Brush Elec. Co. v. California Elec. Light Co.

• Decision Date: 06 October 1892
• Docket Number: 54.
• Citation: 52 F. 945
• Parties: BRUSH ELECTRIC CO. v. CALIFORNIA ELECTRIC LIGHT CO. et al.
• Court: U.S. Court of Appeals — Ninth Circuit

52 F. 945

BRUSH ELECTRIC CO. v. CALIFORNIA ELECTRIC LIGHT CO. et al.

No. 54.

United States Court of Appeals, Ninth Circuit.

October 6, 1892

H. P Bowie, for appellant.

There is no implied authority in any license contract under the patent laws of the United States, vesting absolutely in the licensee the right to use the name of the owner of the patent to restrain infringements in a territory covered by the license.

The monopoly granted to the patentee is created by act of congress. It differs in its nature from all other monopolies and no rights can be acquired in it unless authorized by statute, and in the manner the statute prescribes. To enable any one to sue in his own name for an infringement of patent rights, he must have the entire and unqualified monopoly which is conferred by the statute upon the patentee, and which consists in the exclusive right, or an undivided interest in the exclusive right, to the entire United States or to a specified portion thereof, to manufacture, use, and vend, and to authorize others to manufacture, use, and vend the patented invention. Any right short of this is a mere license. The legal title to the monopoly remains in the patentee, and he alone can maintain an action to restrain an infringement upon his patent rights.

Where the patentee is the infringer, the licensee may sue him in equity, and enjoin in such action the infringement. Littlefield v. Perry, supra, 223.

The thing attempted here by the California and San Jose Companies is not merely to use the name of the patentee or owner of the patent, as was done at common law by the assignee of a chose in action. There the whole cause of action or beneficial interest was in the assignee, the assignor holding only the naked legal title, having nothing at stake but costs, and the use of his name as the plaintiff being a mere formality. Here the licensee's right forms but an insignificant fractional portion of the patentee's estate, to wit, to use and sell within a restricted area; the Brush Company still having the right to manufacture everywhere, and to sell and use everywhere, except in the restricted territory covered by the license, if such it be, to the California Electric Light Company. Hence an action by the Brush Company, or in the name of the Brush Company, puts into controversy its own interest, its own right, its monopoly privileges, in and to which, confessedly, the licensee has no right, claim, or title.

A court of equity cannot compel a party to stand against his will as a co-plaintiff in an action where his own interests and rights are involved, because another claims it to be for that other's interest that he shall do so. No authority can be found for such a proceeding. The bill filed in this case involves in the adjudication prayed for the whole interest of the Brush Company in the patent in question, including the exclusive right of that company 'to make' within the territory in which the San Jose Company claims a license to use and sell. A judgment for the defendant upon this bill would bar any further proceedings by the Brush Company for the protection of its interests under the letters patent in question.

Under the ruling in Littlefield v. Perry, 21 Wall. 223, the head of equity jurisprudence to which the question relates is that of trustee and cestui que trust. Where a trustee is a necessary part to an action, he must either appear or be brought in by process. If he refuses to bring an action upon the request of the beneficiary, the latter may sue in his stead, making the trustee party defendant. It would be very unnecessary to make him a party defendant, and bring him in by process, if, by merely naming him as plaintiff, the court is vested with jurisdiction to bind him by a decree. The settled practice of chancery is against thrusting a party into an action as plaintiff against his will. Perry, Trusts, Sec. 886; 2 Lewin, Trusts, § 853; 1 Daniell,Ch.Pr. 183, note; Morgan v. Railway Co., 15 F. 56, 57. Et vide Lube, Eq. (2d Amer.Ed.) 189; Rob. Pat. Sec. 1099.

The owner of the patent right, having a substantial interest in the subject-matter of this suit, distinct from the interest of his licensee, cannot be subjected to the jurisdiction of this court in respect of that interest, at the mere will of such licensee, and without his own voluntary appearance, or some process of the court duly served on him, requiring his appearance, however advantageous to the special interest of such licensee it may be that such jurisdiction should be taken.

The solicitors of the California Electric Light Company and of the San Jose Light & Power Company, by joining the Brush Company as a party complainant to this bill, and by assuming to sign the bill as solicitors also of the Brush Company, conclusively commit the Brush Company to every averment of the bill, and conclusively authorize this court to adjudicate accordingly. To say that such authority to the solicitors of the California Company is to be implied from the nature of the transaction between the parties is only to beg the question. An inquiry into the nature of the transaction requires a construction of the contract, a determination of its obligation, express or implied, absolute or conditional, and then, if the authority is proved, an enforcement of the contract; but this is an adjudication of the rights of the parties to the contract, and a complete exercise of the jurisdiction of the court over the Brush Company. Clearly, such jurisdiction cannot be exercised, unless the Brush Company has been in some way subjected to the power of the court. The question, therefore, comes to this: Can the Brush Company be subjected to the judicial power of this court as a party complainant because the solicitor of the California Company and the San Jose Company chooses to insert its name in the bill as such party?

Were the Brush Company named a defendant in the case, the court could not acquire jurisdiction over it without voluntary appearance or compulsory process; much less does the mere naming of the Brush Company as a co-complainant confer such jurisdiction.

Process is the test of jurisdiction. Case v. Humphrey, 6 Conn. 139; Cole Silver Min. Co. v. Virginia & Gold Hill Water Co., 1 Sawy. 470.

Even had the Brush Company expressly covenanted that it would join the California Company and the San Jose Company as a co-complainant, and had thereafter refused, while it might be liable upon its covenant, the covenant would not relieve this court from issuing its process if it desired to subject the Brush Company to its jurisdiction against its consent. We know of no authority contrary to this contention. No authority, express of implied, absolute or conditional, has been shown from the Brush Company to the San Jose Company, authorizing, empowering, or directing it to join the Brush Company with it as a co-complainant in this action. There has been no undertaking on the part of the Brush Company shown to allow either the California Company or the San Jose Company to use its name in any way in any infringement suits, and the solicitor's authority even to make a party plaintiff pro forma must be special. 1 Daniell, Ch.Pr. 309. No authority contrary to this contention can be shown.

A licensee has no implied power to and cannot compel the owner of the patent to join with him in a suit in equity for an infringement of the patented invention; nor can the licensee, without the consent of the owner, use his name in such suit, even where the owner has covenanted to bring or to join in bringing suit. If he refuses, the remedy is, we submit, by action against him in the proper forum, either to compel specific performance, or to obtain a decree permitting the use of his name, or by action at law to recover damages for the breach of the covenant.

Covenants by the patentee licensor to protect the licensee against infringements, to maintain actions in support of the patent right, to defend all attacks made by competing, senior, or other patents, are of frequent occurrence in written licenses.

Where such covenant, clause, or stipulation is omitted from the license by the parties, it cannot be supplied by the court; the license itself being the measure of the licensee's rights. McKay v. Smith, 29 F. 295; Emerson v. Hubbard, 34 F. 327; Ingalls v. Tice, 14 F. 297; National Rubber Co. v. Boston Rubber Shoe Co., 41 F. 50.

Even in a written license, where there is a covenant to sue infringers, the owner of the patent is not bound to protect the licensee against those who claim under adverse patents, nor does he warrant against them. Jackson v. Allen, 120 Mass. 77.

The rule which gives the patentee, by virtue of his ownership of the patent, control over all litigation wherein his patent, monopoly, rights, and franchise are involved or may be jeopardized, is a rule intended for his protection. Any rule short of this would place him entirely at the mercy of careless or dishonest licensees, of collusive litigation, of judgments against him, suffered by default, or it may be by fraud. Such power in the licensee would be simply ruinous to the owner of the patent. This is well indicated in Brush-Swan Electric Light Co. v. Thomson-Houston Electric Co., 48 F. 224.

In the court below, and in the written brief filed by the learned solicitors of the California Company, it was admitted that there is no implied covenant that the licensor will protect the licensee against infringers by instituting suits; but it was insisted that there was an implied covenant giving the licensee the right to use the name of the licensor in bringing suit, on the ground that the licensee cannot protect himself in any other way. The answer, however, to this, is that, if the licensor is not bound to protect his...