Lane Bodley Co v. Locke

• Decision Date: 13 November 1893
• Docket Number: No. 52,52
• Citation: 14 S.Ct. 78,37 L.Ed. 1049,150 U.S. 193
• Parties: LANE & BODLEY CO. v. LOCKE
• Court: U.S. Supreme Court

150 U.S. 193

14 S.Ct. 78

37 L.Ed. 1049

LANE & BODLEY CO.

v LOCKE.

No. 52.

November 13, 1893.

L. M. Hosea, for appellant.

T. A. Logan, for appellee.

Mr. Justice SHIRAS delivered the opinion of the court.

On November 26, 1884, Joseph M. Locke, this defendant in error, filed a bill in the circuit court of the United States for the southern district of Ohio, alleging infringement by the Lane & Bodley Company, a corporation of the state of Ohio, of letters patent No. 173,653, dated February 15, 1876, for an improvement in stop valves, issued to said Locke as inventor. The bill contained the usual allegations, and prayed for an injunction and other relief.

The answer, filed on January 24, 1885, denied that Locke was the original inventor, because the same devices were shown in certain specified earlier patents and publications; denied that said invention was not, for more than two years prior to the application for letters patent therefor, in public use or on sale, but averred, on the contrary, that said apparatus was well known and in public use in the United States for more than two years prior to said application. The answer also contained a history of the original development of the alleged invention by Locke while in the employment of the firm of Lane & Bodley, and averred a continuous use and sale by defendant of the alleged devices, with the knowledge and consent of said Locke, in such circumstances as to show the acquisition by Lane & Bodley of an indefeasible license to use the patented devices. By an amendment to the answer, filed on February 12, 1886, there was set up, as an additional defense, an equitable right in the patent, based upon a written agreement signed by said Locke. The answer also averred that said license and right had become vested in the corporation defendant. The case, having been put at issue, was proceeded in so that the circuit court found in favor of the complainant, and, after reference to and report by a master, rendered a final decree against the defendant for the sum of $3,667.37, with interest and costs.

The record shows us that the court below held that the patent to Locke had not been anticipated, but was valid in all its claims; that the defendant's answer, in respect to its allegations as to Lane & Bodley's right to a license or to an interest in the patent, was not sustained by the evidence; and that, even if Lane & Bodley had such a right, it had not passed to the defendant corporation, under the doctrine of the case of Hapgood v. Hewitt, 119 U. S. 226, 7 Sup. Ct. Rep. 193.

Although the defendant has assigned error to the holdings of the court below in these several particulars, we are relieved from considering the contentions as to the validity of the patent or its anticipation by other patents by the election of the counsel for the plaintiff in error to confine his case to the effect of the pleadings and evidence as establishing an equitable right or license in the defendant company to use the patented invention.

If the court below were right in thinking that the case of Hapgood v. Hewitt, 119 U. S. 226, 7 Sup. Ct. Rep. 193, was applicable, under the facts of the present case, any further inquiry on our part would be unnecessary.

In that case a corporation employed Hewitt as superintendent, who, while in such employ, invented a plow, upon which a patent was granted to him. Having acquired a license growing out of the circumstances of the employment, the corporation was afterwards dissolved, and all its assets passed into the hands of a receiver in liquidation. Subsequently, and under the laws of another state, a new corporation was formed, to which the receiver of the old corporation assigned certain assets, among which, as was claimed, was the aforesaid license. This court held that whatever right the employer had to the invention by the terms of Hewitt's contract of employment was a naked license to make and sell the patented improvement as a part of its business, which right, if it existed, was a merely personal one, and not transferable, and was extinguished with the dissolution of the corporation. This ruling was based on two previous decisions,—Nail Factory v. Corning, 14 How. 193, and Oliver v. Chemical Works, 109 U. S. 75, 3 Sup. Ct. Rep. 61. In both these cases there were formal assignments, without having words or clauses in them showing that they were meant to be assignable; and the hold- ing of the court was that the contracts themselves were merely personal licenses, and did not import an intent to extend the right to an executor, administrator, or assignee, voluntary or involuntary.

We see no reason to disturb those cases; yet we do not feel compelled to extend their ruling to cover the present case.

It may well be that an express license, set forth in terms, is not assignable unless it is so provided in the instrument. And so there would seem to be no privity, in law or in equity, between a defunct corporation of Missouri and a corporation of the state of Illinois. In none of those cases was there evidence showing a recognition, implied or express, by the patentee of any right in the assignee.

In Hammond v. Organ Co., 92 U. S. 724, it was held that the nonassignability of a license may be waived if the patentee ratifies the transfer of the license, by otherwise treating the assignee as the licensee was entitled to be treated.

In Lightner v. Railroad Co., 1 Low. 338, it was held that a license, though not usually transferable, is transmissible by succession to a corporation formed by the union of two licensees succeeding to the obligations of both, for the reason that the consolidated company is the successor, rather than the assignee, of the original companies.

In the present case it clearly appears that the company was organized upon the same basis as the firm; that the business of the company was to be the same as that carried on by Lane & Bodley, and to be carried on on the same premises; that the entire property and assets of the firm and its liabilities and obligations were devolved upon the company. Locke himself, in his evidence, repeatedly speaks of the Lane & Bodley Company as the successor to the firm.

And if the defendant's version of the facts is accepted, the acts and circumstances constituting the license and its consideration were begun by the firm of Lane & Bodley, and continued by the corporation, participated in and ratified by Locke himself, to the date of the suit.

Of course, in testing the position of the court below, that, even if the alleged agreement that the firm of Lane & Bodley should have an interest in the patent, or the facts out of which a license to use would arise, were proven, the plaintiff would nevertheless have no right to recover against the Lane & Bodley Company, we pronounce a legal conclusion on the facts asserted and put in evidence by the defendant.

If, then, the allegations of the defendant in this case are accepted as true, we do not regard the case of Hapgood v. Hewitt as an obstacle to the defense asserted.

We do not consider it necessary to enter minutely into the history of the case, nor does our view compel us to ascribe to either of the parties or their witnesses any intentional departure from the truth. We prefer to put our decision upon facts which, if not conceded, appear to have been clearly established.

The firm of Lane & Bodley were manufacturers of...