Regan Vapor-Engine Co. v. Pacific Gas-Engine Co.

• Decision Date: 30 January 1892
• Citation: 49 F. 68
• Parties: REGAN VAPOR-ENGINE CO. v. PACIFIC GAS-ENGINE CO. et al.
• Court: U.S. Court of Appeals — Ninth Circuit

49 F. 68

REGAN VAPOR-ENGINE CO. v. PACIFIC GAS-ENGINE CO. et al.

United States Court of Appeals, Ninth Circuit.

January 30, 1892

(Syllabus by the Court.)

A contract by which A. does 'license, grant, and convey' any invention he may thereafter make in gas-engines to B. does not operate as an assignment of such invention when made, and, at most, gives to A. the right in equity to have an assignment of such invention to him, which may be defeated by a prior assignment of the same, to a purchaser without notice of such contract, in good faith, and for a valuable consideration.

An indorsement of such contract by B. in these words: 'I hereby sell, assign, and transfer unto M. M. Barrett all my right, title, and interest in and to the above agreement,'-- only passes the paper on which it is written, with such rights of action thereon as have not become vested in the indorser.

The record of the assignment of two patents contained the words 'contracts concerning the same.' Held to mean 'concerning the rights and privileges granted by said patents, and thereby assigned;' and also that constructive notice could not be predicated of such record as to the status or ownership of another patent.

J. H Miller, for appellant.

John L Boone, for appellees.

Before DEADY, HANFORD, and Morrow, District Judges.

DEADY District Judge.

On May 12, 1890, the appellant brought suit against the appellees, in the circuit court of the United States for the northern district of California, for an alleged infringement of reissued letters patent numbered 11,068, for a gas-engine, issued to the appellant, as the assignee of Daniel Regan, the inventor, on April 1, 1890.

The appellees pleaded in abatement that the Pacific Gas-Engine Company, one of the appellees, was the owner of all rights under said patent for the Pacific coast. To this plea a replication was filed. The case was then referred to the master, who reported against the plea. Exceptions were taken to the report, which were sustained, and the bill was dismissed. The plaintiff appeals to this court.

On May 15, 1886, Regan and Garratt entered into an agreement wherein they stated that we 'do hereby license, and grant and convey, each to the other,' throughout certain states and territories,-- the license to Garratt being for the Pacific coast,-- 'all such inventions and improvements, whether patented or not, which may be hereafter made by either of us,' in gas-engines and the mechanism by which they are operated.

This agreement was never recorded in the patent-office, nor was it even recordable. It forms the basis of the appellees' claim to be the owner of patent numbered 408,356, issued to Regan on August 6, 1889, and upon which this suit is brought. On September 10, 1889, Regan assigned to Sanford S. Bennett, in consideration of $3,000, the undivided one-half of said patent for the whole United States, which assignment was duly recorded on September 17, 1889. On October 22, 1889, Regan and Bennett, for a valuable consideration, assigned to the appellant the entire patent for the United States. On December 21, 1889, M. M. Barrett, one of the defendants, took an assignment from Garratt of all his right, title, and interest in the Regan-Garratt agreement of May 15, 1886. At this time Barrett had full knowledge of appellant's claim to patent 408,356. On May 6, 1890, Barrett assigned the interest acquired from Garratt to the Pacific Gas-Engine Company.

On March 3, 1890, the appellant surrendered its patent, under section 4916 of the Revised Statutes, and had a reissue on April 1, 1890. It is numbered 11,068, and grants to the Regan Vapor-Engine Company, its successors or assigns, the exclusive right to make, use, and vend the said invention for the term of 17 years.

The lower court decided that the Regan-Garratt agreement of May 15, 1886, operated as an assignment of an invention which Regan, three years afterwards, on August 6, 1889, made and secured a patent for, as well as the patent issued on April 1, 1890, the same being a reissue thereof, and which was issued to and in the name of the appellant. Accordingly a decree was entered which, in effect, decides that the appellant has no title to the patent in suit for The pacific coast, and that the Pacific Gas-Engine Company has.

The agreement of May 15, 1886, is not the assignment of a patent, though it contains language-- 'grant and convey'-- sufficient for that purpose, if there was anything to assign. It may be good as an agreement to sell and assign a future invention, but it cannot operate as a sale or assignment of such an invention, even when made. No one can sell that which he hath not. Comyn's Dig. tit. 'Grant,' D. A man cannot grant all the wool that shall grow upon his sheep that he shall buy afterwards, for there he hath it not actually or potentially. Bac. Abr. tit. 'Grant,' D.

Chancellor Kent says, (2 Comm. 468:)

'The thing sold must have an actual or potential existence, and be specific or identified, and capable of delivery; otherwise it is not strictly a contract of sale, but a special or executory agreement. * * * But, if the article intended to be sold has no existence, there can be no contract of sale.'

Benjamin, in his work on Sales, (section 78,) says:

'In relation to things not yet in existence, or not yet belonging to the vendor, the law considers them as divided into two classes, one of which may be sold, while the other can only be the subject of an agreement to sell,-- of an executory contract. Things not yet existing, which may be sold, are those which may be said to have a potential existence; that is, things which are the natural product or expected increase of something already belonging to the vendor. A man may sell the crop of hay to be grown on his field, the wool to be clipped from his sheep at a future time, the milk that cows will yield in the coming month, and the sale is valid. But he can only make a valid agreement to sell, not an actual sale, where the subject of the contract is something to be afterwards acquired, as the wool of any sheep, or the milk of any cows, that he may buy within the year, or any goods to which he may obtain title within the next six months.'

A man may make a valid agreement to sell an invention not yet made by him, but he cannot make a valid sale thereof.

Curtis on Patents (section 160) says:

'The statutes, however, which authorize the assignment of an invention before the patent has been obtained, appear to embrace only the cases of perfected or completed inventions. There can, properly speaking, be no assignment of an inchoate or incomplete invention, although a contract to convey a future invention may be valid, and may be enforced by a bill for specific performance. But the legal title of an invention can pass to another only by a conveyance which operates upon the thing invented after it has become capable of being made the subject of an application for a patent.'

Mr. Robinson, in his work on Patents, (volume 2, Sec. 771,) says:

'A contract for the transfer of inventions not

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