Standard Parts Co v. Peck
| Decision Date | 18 February 1924 |
| Docket Number | No. 160,160 |
| Citation | 44 S.Ct. 239,264 U.S. 52,32 A.L.R. 1033,68 L.Ed. 560 |
| Parties | STANDARD PARTS CO. v. PECK |
| Court | U.S. Supreme Court |
Messrs. Bert M. Kent, A. V. Cannon, and John M. Garfield, all of Cleveland, Ohio, for petitioner.
Mr. Geo. L. Wilkinson, of Chicago, Ill., for respondent.
[Argument of Counsel from pages 52-54 intentionally omitted] Mr. Justice McKENNA delivered the opinion of the Court.
Suit for injunction, preliminary and perpetual, and accounting for profits and damages, upon the ground of infringement of letters patent No. 1,249,473, issued to William J. Peck, respondent.
The bill is the usual one in patent cases. For answer to it the Standard Parts Company admits the use of the devices of the patent, and alleges they were constructed under the supervision of Peck, and under the terms and provisions of a contract dated August 23, 1915, by and between him and the Hess-Pontiac Spring & Axle Company, for and in behalf of the latter company and the Western Spring & Axle Company, and that it, the Standard Company, has succeeded to the entire assets, business, and good will of those other companies, including all of their rights in said contract and devices. And the Standard Company avers that Peck was fully compensated for his connection with the devices.
As an offset and counterclaim, the Standard Company avers that all of the invention in the letters patent was made while Peck was in the employ of its predecessors in business, the Axle Companies above mentioned, and that he was so employed for a period of approximately one year and eight months, and paid while so employed a salary of $300 per month, and at the conclusion of the employment paid a bonus of $660.
In answer to the counterclaim Peck admits the contract, but denies that it raised the contractual relations averred, or that it could be construed as passing any title to any inventions which might be incorporated in machinery built thereunder, and that neither the Axle Companies nor any person who might have purchased their assets, business, and good will could have acquired any right, title, or interest in the inventions.
He admits the period of employment averred, and that he received the compensation averred, and that at the conclusion of his employment he received a bonus of $660, being the amount of $10 for each per cent. of reduction of direct labor cost as called for in said contract, the figures compiled by the Hess Company showing a reduction of 66 per cent. in direct labor.
He admits that prior to and during the continuance and subsequent to the period of his employment he practiced as an attorney at law and solicitor of patents, but denies ever so acting for either the Hess Company or Western Company, and denies that he ever prepared or filed or executed any applications for either of the companies, or that any of such applications matured into the patent in suit.
He denies the other allegations of the counterclaim.
On the case as thus presented, Peck's testimony and some other testimony was taken, and certain exhibits introduced, and the judgment of the District Court was, after a review of the decisions of this and other courts, 'that the property in the invention belonged to the employer' (the Hess-Pontiac Spring & Axle Company), and that this property passed to the Standard Parts Company when it acquired the assets of the Axle Company, and that Peck holds the legal title in trust for the Standard Company. A decree was directed to be entered requiring an assignment of the legal title to the latter company.
A motion for rehearing was made and denied, and on March 2, 1921, a formal decree was entered, adjudging the equities to be in favor of the Standard Company, and that Peck, within 10 days from the date of the decree, assign and transfer to the company the legal title to the letters patent and also transfer to it, the company, all other patents or pending applications for patents for inventions made by him, Peck, in connection with the processes and machinery developed in the performance of the agreement with the Axle Company.
It was further adjudged that, if Peck failed to perform the decree, 'then and in that event' the 'decree shall have the same force and effect as such assignments and transfers would have had, if made.'
The Circuit Court of Appeals reversed the decree of the District Court, in so far as it decreed an assignment and transfer of the patent in suit and other patents and applications from Peck to the Standard Company.
The court decreed a license to exist in the Standard Company in the machines, distinguishing, however, between the first six and the last four, in that in the first six title was in the Standard Company 'wholly free from the monopoly of the patent.' this being 'within the spirit and fairly within the letter of Rev. St. § 4899' (Comp. St. § 9445),1 and that the Pontiac Company had a right to sell these six machines to the Standard Company free from the patent. As to the last four, it was decided that the license to construct them was not assignable and could not pass to the Standard Company 'by the ordinary purchase and sale of a business.'
The court concluded its opinion as follows:
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University Patents, Inc. v. Kligman, Civ. A. No. 89-3525
...particular problem, the property of the inventions of the employee related thereto belongs to the employer. Standard Parts Co. v. Peck, 264 U.S. 52, 44 S.Ct. 239, 68 L.Ed. 560 (1924); Colgate, supra, at 217; Quaker State Oil Refining Co. v. Talbot, 315 Pa. 517, 174 A. 99 (1936); Aetna Stand......
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