Nat'l Dev. Co. v. Gray

• Decision Date: 31 May 1944
• Citation: 316 Mass. 240,55 N.E.2d 783
• Parties: NATIONAL DEVELOPMENT CO. v. GRAY.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

316 Mass. 240

55 N.E.2d 783

NATIONAL DEVELOPMENT CO.

v.GRAY.

Supreme Judicial Court of Massachusetts, Essex.

May 31, 1944.

Action by National Development Company against Ellen Gray and another, administrators, and another to require defendants to assign a patent and for an injunction. From a decree for plaintiffs, the defendants appeal. On report.

Order modified and as modified affirmed.Appeal on report from Superior Court, Essex County; Greenhalge, judge.

Before FIELD, C. J., and LUMMUS, DOLAN, RONAN, and WILKINS, JJ.

H. D. Linscott, of Lynn, for plaintiff.

L. Withington and L. G. Miller, both of Boston, for defendant.

RONAN, Justice.

The plaintiff manufactures an automatic wood heel edge setting machine known as the Howard machine upon which it holds a patent, and leases the machines under license contracts to wood heel manufacturers. It services these machines, supplies parts and receives a royalty for their use. The bill alleges that the defendant Lawson while in the plaintiff's employment had invented an edge setting machine for wood heels, which on account of the nature and terms of his employment belongs to the plaintiff; that Lawson had applied for a patent for his invention; and that he had assigned his rights in the application to the defendant Lawson-Porter Shoe Machinery Corporation which, the plaintiff alleged, was organized to develop, manufacture and lease said machine in competition with the plaintiff's machine. The bill seeks an assignment from the defendants of the applicationfor letters patent, an injunction prohibiting the manufacturing, selling or leasing of the machine by the corporate defendant, an accounting and damages. Since the filing of the bill, Lawson has died and the administrators of his estate have been substituted for him. Letters patent have also been issued on the machine and are now held by the corporate defendant, which has developed and manufactured the machine and has distributed it to the makers of wood heels. By agreement of the parties and with the assent of the judge, the only question presented was the right of the plaintiff to an assignment of the patent, and if such right was established then the matter of an accounting and damages was to be later determined. After rescript was sent down, National Development Co. v. Gray, 315 Mass. 127, 51 N.E.2d 960, further proceedings were had in the Superior Court. The judge ordered that a decree be entered in conformity with the third and fourth prayers of the bill, which in substance sought to require the defendants to assign the patent to the plaintiff and to enjoin them from manufacturing, selling, leasing or using edge setting machines embodying the patented invention, and in accordance with the fifth prayer, which sought to enjoin them from using ‘any invention, device, improvement, machine or attachment for setting the edges or breasts of heels for shoes.’ The judge then reported the correctness of his action in ordering the decree.

The plaintiff's wood heel edge setting machine was invented by one Howard in 1929, who assigned the patent to the plaintiff which was organized to develop the patent. The plaintiff made a five year contract with the Pope Machinery Corporation (hereafter called Pope) by which the latter built the machines, put them out on leases, supplied parts and serviced the machines, and received a rental or royalty, a portion of which it paid over to the plaintiff. Difficulties had arisen between the plaintiff and the Pope concern, and it seemed likely in the summer of 1933 that the contract with Pope would not be renewed upon its expiration in January, 1934. The plaintiff anticipated that Pope would not turn over the plans, drawings and parts, and that, if the plaintiff decided not to renew the Pope contract but to manufacture its own machines, it would be necessary to make drawings to the separate parts of the machine, make patterns for the drawings, make or have the parts made and assemble the machines. This could be done only by studying the existing machines and the Howard patent.

Lawson had been employed prior to 1927 as a draftsman in an experimental machine shop maintained by the A. E. Little Company, and had worked on the Howard machine and had made some drawings for the patent application. He left the employ of the A. E. Little Company in 1927, and became an employee of the United Shoe Machinery Corporation as an inventor. His employment there terminated in September, 1932. He then worked on inventions for one Matson until Matson went out of business in July, 1933. Sometime thereafter, in 1933, Lawson became an employee of the plaintiff. Little, who owned all the stock of the plaintiff, testified that after a series of conversations with Lawson beginning in August or September, 1933, he hired Lawson on December 26, 1933; that Pope would not return the plaintiff's drawings; that he told Lawson that he needed a man to make complete drawings of the machine, and all its parts; that he wanted that done first ‘and then-as a draftsman-inventor, and if we decide to install a shop of our own, supervise the work of making the parts, and we shall expect-I want you to be able to carry out any-willing to carry out any suggestions I make for other things, and we want an understanding that all inventions or all ideas talked over’ become the property of the plaintiff. He told Lawson that his duties would be those of a designer, inventor, supervisor, and that he was to carry out Little's suggestions as far as he could. Lawson said that he understood exactly what Little wanted and that he was ‘willing to come under those arrangements.’ He entered the employment of the plaintiff. Lawson studied the plaintiff's machines which were in use in the wood heel factories, made drawings of the parts, had the parts made and assembled the machines. The plaintiff began to service the machines in these factories. Lawson then spent most of his time making drawings and experimenting on improvements on the plaintiff's machine and on improvements on machinery unrelated to wood heels. Little and Liberty, an employee of the plaintiff, would tell Lawson what the trade required and ask him to develop something to take care of that requirement. Lawson in the course of his experimental work made three inventions upon which he secured patents and assigned them to the plaintiff. One was a patent for a heel attaching machine, the second a patent for an edge setting iron which was an improvement on the plaintiff's edge setting machine, and the third an edge setting machine. Applications for two other patents were assigned to the plaintiff but no patents were issued.

The manufacture, leasing and servicing of the edge setting machine and the supplying of parts were practically all the business that the plaintiff did. It was desirable, therefore, that the plaintiff keep its machine up to date. After a wood heel is fashioned, a thin piece of leather called a top lift is attached to the bottom of the heel. Edge setting consists in finishing and polishing the round edge or periphery of this top lift and in rolling in the joint, making the surfaces of the heel and the edge of the top lift smooth and continuous. This work was done by the plaintiff's machine by rotating and oscillating the heel against a heated iron. The plaintiff's machine did not set or polish the straight edge or breast of the top lift. When the machine was invented, most of the wood heels were of the ‘Louis' type and it was not necessary to set the breast for shoe manufacturers usually polished the breast in bottom-finishing the shoe. Cuban style heels were coming into greater use in 1935 and 1936. These heels were lower and broader than the Louis style. Little and Liberty saw the necessity for an edge setting machine that would set the breasts of cuban heels. Both of them talked with Lawson in 1936 and 1937. Little told him that he thought that a machine could be made where the iron would travel around the heel and Lawson said it might be possible, but after he made some drawings he reported that he saw no way of heating a travelling iron. Little then suggested to Lawson the possibility of putting an attachment on the present machine for setting the breasts of the heels. Lawson worked on this suggestion, but there was no evidence that he ever subsequently invented such an attachment. He left the plaintiff's employment on August 28, 1937. It thereafter appeared that Lawson while in the plaintiff's employment had prepared a drawing at his home showing an edge setting machine designed to operate by having the iron rotate around the heel. This drawing was dated May 21, 1937, and served as a basis for the construction of such a machine and the issuance of the patent therefor which was assigned to the defendant corporation.

The judge found that there was no express contract that Lawson should assign any patents, nor was he satisfied that Lawson was expressly employed as an inventor, but he found that it was understood that Lawson should study improvements and developments for the machine and that patentable inventions might result from the work that he was to do or the ideas that he might conceive; that Lawson, while employed for the purpose, among others, of developing and perfecting the plaintiff's machine and if possible of combining with the operation of setting the periphery of the top lift the further operation of setting the breast of the top lift, conceived an idea for such a combination, and on his own time so far perfected it as to interest others to promise financial aid; and that this was accomplished by him before he left the plaintiff's employment and when he knew that the contemplated machine, if perfected, would compete with the plaintiff's machine and might destroy the plaintiff's business.

The principal contention of the defendants is that Lawson was employed as a mechanic draftsman and superintendent and that his general employment in these...