Richardson Shoe MaChinery Co. v. Essex MaCh. Co.

• Decision Date: 03 January 1911
• Citation: 207 Mass. 219,93 N.E. 650
• Parties: RICHARDSON SHOE MACHINERY CO. v. ESSEX MACH. CO.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

207 Mass. 219

93 N.E. 650

RICHARDSON SHOE MACHINERY CO. v. ESSEX MACH. CO.

Supreme Judicial Court of Massachusetts, Essex.

January 3, 1911

Jan. 3 1911.

COUNSEL

W. B Farr and N. B. Todd, for complainant.

W. Quinby, for defendant.

OPINION

SHELDON J.

It is undisputed that the agreement now sought to be enforced was made concerning the machine then in process of construction and embodying the invention and improvements of Reed, which is mentioned in the plaintiff's bill.The plaintiff claims that by the correct construction of this agreement it is now entitled to a decree declaring that it is jointly interested with the defendant in the said invention and improvements, and ordering the defendant to assign to it one-half interest therein and in the application for letters patent now pending in the name of the defendant as assignee of Reed.The defendant rests its claim that no such decree should be entered, upon its contentions that the agreement was not to be carried out and cannot be enforced until letters patent upon the invention shall have been actually issued, that there is no agreement to assign anything, that the alleged agreement is only a license and has as yet no other subject-matter than an experimental machine, which is of no value; and that before the assignment made by Reed to the plaintiff the agreement was rescinded and abrogated by the parties and is no longer in existence.It is also suggested that the agreement, if otherwise valid and enforceable, yet ought not to be specifically enforced in equity, for the reason that since it was made the United Shoe Machinery Company has become the owner of the entire capital stock of the plaintiff corporation and all the tangible property of the latter except this agreement has been transferred to that company (hereinafter called the United Company), the plaintiff company having been theretofore a competitor in business of the United Company; that this suit is now prosecuted at the instance and really for the benefit of the United Company, and that the result of its success would be and is intended to be to prevent the defendant from putting upon the market the new machines in competition with those of the United Company, or at least materially to hamper the efforts of the defendant in that direction, whereas the main object of both the plaintiff and the defendant in making the agreement was to enable them, the one as the manufacturer and the other as the seller of the projected machines, to compete better and more advantageously with the United Company.

1.In our opinion, the agreement in question was designed to make the parties the equal owners of both the invention and of any letters patent that might be issued thereon.Each of them was to pay one-half of the cost of constructing the experimental machine and of any other machines that might be agreed upon.They were to contribute equally to the cost of obtaining patents.Each was to own an undivided half interest in the machines and the patents.It was clearly contemplated that the title to the invention itself as well as to the patent that might be obtained thereon should be vested by proper instruments of assignment or otherwise in both parties, and that, except as limited by the terms of the agreement itself, each one should have the power to deal with its own interests; for there was an express stipulation that neither party should sell or lease its half interest or grant any licenses thereunder or make any other use or disposition thereof without the written consent of the other party.

The inventor or his assignee has before the issuance or allowance of a patent an inchoate right of property in his invention and in a pending application for a patent, which he may assign or with which he may deal as an article of property.Somerby v. Buntin,118 Mass. 279, 19 Am. Rep. 459;Adams v. Messinger,147 Mass. 185, 17 N.E. 491, 9 Am. St. Rep. 679;Currier v. Hallowell,158 Mass. 254, 255, 33 N.E. 497;Lamson v. Martin,159 Mass. 557, 562, 35 N.E. 78;Burton v. Burton Stock Car Co.,171 Mass. 437, 50 N.E. 1029;Gayler v. Wilder,10 How. 477, 13 L.Ed. 504;Runstetler v. Atkinson, 4 MacArthur & M. (D. C.) 382.The assignments or licenses which might have been made by the parties under this agreement could have been made before as well as after the actual issuance of the patent or even the filing of the application therefor.It seems plain to us that the agreement must be construed to cover and establish the rights of the parties to the invention itself and to the application for a patent as well as to the patent when that should have been obtained.

2.For the same reasons the subject-matter of the agreement is not limited to the experimental machine therein mentioned; and it would not be material to determine the value of that machine.Nor can the agreement be regarded as merely a license.

3.Upon the evidence it does not satisfactorily appear that the agreement has been abrogated or rescinded.The defendant relies mainly upon the fact that when the application was about to be made Richardson who represented the plaintiff, caused two assignments to be drawn, each transferring one-half interest in the invention, the application, and the patent to be issued thereon, and running respectively to the plaintiff and the defendant.The agreement now in suit was shown to Reed the inventor, and he was requested by Richardson to execute the assignments in order to carry out the intent of the agreement.Reed however refused to do so, and declared that he would not assign his invention to any one while that agreement remained in force.Richardson said that he desired only the agency to sell the proposed machines, or as one witness put it, that he merely 'wanted the selling end.'Reed also said that he would not assign to the Richardson Company at all, and that he would assign to the defendant only if that agreement was done away with.Richardson made no reply to this, and thereupon Reed made the assignment to the defendant.It does not appear that Reed was under any obligation to assign his rights to either of the parties; indeed, there are in the evidence some intimations to the contrary; and it cannot be presumed that there was such an obligation.American Circular Loom Co. v. Wilson,198 Mass. 182, 201, 84 N.E. 133, 126 Am. St. Rep. 409.

The question presented it very different from what it would be if this suit were against Reed.In that event it might forcibly be...