Wireless Specialty Apparatus Co. v. MICA Condenser Co.

• Decision Date: 03 June 1921
• Citation: 131 N.E. 307,239 Mass. 158
• Parties: WIRELESS SPECIALTY APPARATUS CO. v. MICA CONDENSER CO., Limited, et al. (two cases).
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

239 Mass. 158

131 N.E. 307

WIRELESS SPECIALTY APPARATUS CO.

v.MICA CONDENSER CO., Limited, et al. (two cases).

Supreme Judicial Court of Massachusetts, Suffolk.

June 3, 1921.

Case Reserved and Report from Superior Court, Suffolk County; Frederick Lawton, Judge.

Two suits by the Wireless Specialty Apparatus Company against the Mica Condenser Company, Limited, and others. Reserved and reported by the superior court on the pleadings, the evidence, and a report of facts found. Decree for plaintiff.

The first suit was to require the assignment to plaintiff of applications for patents, the inventions covered thereby, and the patents to be issued thereon. The inventions related to improvements on magneto condensers, and were inventions of a former employee of plaintiff who subsequently entered the employ of the defendant, Mica Condenser Company, Limited. The second suit was to establish plaintiff's rights in certain alleged trade secrets, to enjoin defendants from using any secret processes or apparatus belonging to plaintiff, or any information or knowledge relating to such processes or apparatus acquired by former employees of plaintiff, to enjoin the disclosure of any such knowledge, etc.

R. G. Dodge and H. F. Lyman, both of Boston, for plaintiff.

Stuart C. Rand and Archibald MacLeish, both of Boston, for defendants.

JENNEY, J.

The Wireless Speciality Apparatus Company is the plaintiff in two suits, both relating to the same subject-matter and tried together. During the Great War the plaintiff made radio condensers for the United States government. On the signing of the armistice, it became apparent that this industry would be seriously affected if not ended, and the plaintiff's officers conceived the idea of producing magneto condensers to be sold to manufacturers of electrical apparatus. By June, 1919, the six employees then remaining in the plaintiff's condenser department were employed in experimental work in developing a method of manufacturing such condensers. This work was continued until about October, 1919, when the production of the condensers began. The work was substantially all performed in the plaintiff's shop, with its tools, at its expense, and under the general direction and supervision of one Priess, its chief engineer. Some examination had been made by the chief engineer, and by other persons, of the methods in use to accomplish the desired result. The judge found that, in course of the experimentation, ‘in at least three respects, important changes, improvements, or inventions * * * [had] been made,’ which ‘combined with others of minor importance * * * constitute a change, improvement or invention in the * * * generalprocess' of manufacture of magneto condensers. It is noticeable that the findings characterized the result of this experimental work as ‘changes, improvements or inventions,’ but they also are declared to be ‘substantial and valuable, tending to reduce the cost of production and to improve the quality of the product.’ Later they are several times expressly described by the judge as inventions; applications were made by the defendant McPherson for the issuance of letters patent upon these inventions, which applications have been assigned by him to Watson Brothers, Inc., and by it to the Mica Condenser Company, Ltd., who are defendants in both suits. The plaintiff in one suit seeks to compel the assignment to it of said applications and of the inventions covered thereby; and in the other to enjoin their publication, manufacture or use by the corporations who are defendants in the first suit and by certain former employees of the plaintiff, on the ground that the inventions constitute secret processes of which the plaintiff was the owner. In the second suit other relief of a kindred nature also is sought.

We consider the findings of the judge on the basis that they determine that the changes and improvements were in fact inventions which must be considered as patentable. The parties have so treated them.

These inventions as found and described by the judge are as follows:

‘(1) In the machine for applying varnish to the sheets of mica used in the condenser, and by the use of copal varnish in the process: (2) the method of using so called telltale light for detecting defects while building up the condenser stacks; (3) the process of rehealing a defective condenser without dismembering the same. These changes, improvements or inventions combined with others of minor importance may be fairly said to constitute a change, improvement or invention in the (4) general process.’

The three invention first named were in the main those of the defendant McPherson-who was one of the six employees of the plaintiff hereinbefore referred to-‘qualified only by the statement that the use of copal varnish was the suggestion of Goodwin,’ a defendant in the second suit. The general process invention was the joint production of McPherson, Goodwin and Priess. The latter is still in the employ of the plaintiff.

It is found on conflicting evidence that there was no express contract that any invention made by these employees was to be the plaintiff's property; and the evidence did not satisfy the judge that there was any understanding to that effiect.

The principles governing relationship between employer and employee, so far as property in invention is involved-using that word in the sense in which it is used in the statutes relating to patents-are well established. An invention made by an employee, in the course of his employment and at his employer's expense, is the property of the inventor unless he has by the terms of his employment, or otherwise, agreed to transfer to his employer its ownership as distinguished from its use. It matters not how valuable the invention or how vital its control may be for the success of the business in which it has been conceived. American Circular Loom Co. v. Wilson, 198 Mass. 182, 84 N. E. 133,126 Am. St. Rep. 409;American Stay Co. v. Delaney, 211 Mass. 229, 97 N. E. 911, Ann. Cas. 1913B, 509;Hapgood v. Hewitt, 119 U. S. 226, 7 Sup. Ct. 193, 30 L. Ed. 369;Dalzell v. Dueben Manuf. Co., 149 U. S. 315, 13 Sup. Ct. 886,37 L. Ed. 749;Pressed Steel Car Co. v. Hansen, 137 Fed. 403, 71 C. C. A. 207,2 L. R. A. (N. S.) 1172;Dempsey v. Dobson, 174 Pa. 122, 34 Atl. 459,32 L. R. A. 761, 5i Am. St. Rep. 816.

However, as was said in Solomons v. United States, 137 U. S. 342, at 346, 11 Sup. Ct. 88, at 89, 34 L. Ed. 667:

‘If one is employed to devise or perfect an instrument, or a means for accomplishing a prescribed result, he cannot, after successfully accomplishing the work for which he was employed, plead title thereto as against his employer. That which he has been employed and paid to accomplish becomes, when accomplished, the property of his employer.’

The inventions here in controversy were made while the inventors were wholly engaged in ‘experimental work to develop a method of manufacturing magneto condensers.’ That for the time being was their sole employment. They were under the direction of the plaintiff's superintendent who aided and furnished information to them.

‘* * * The persons concerned understood or ought to have understood that the plaintiff intended to keep the processes secret, and that any information received by them in the course of their employment was confidential information.’

To justify a claim of property in the inventions, it must be held that the plaintiff had no interest in that which its workmen created while engaged in this special work, except the ownership of the actual things produced considered merely as chattels, and except a nonexclusive right to use them or the processes discovered. Such a result defeats the purpose in which they were engaged. In a case like this the nature of the employment impresses on the employee such a relationship of trust and confidence as estops him from claiming as his own property that which he has brought into being solely for the benefit and at the express procurement of his employer. The want of an express agreement that the ownership shall be in the employer is not fatal under such circumstances. This result is supported by authority. Gill v. United States, 160 U. S. 426, 16 Sup. Ct. 322, 40 L. Ed. 480;Silver Spring Bleaching & Dyeing Co. v. Woolworth, 16 R. I. 729, 19 Atl. 528. Said the court in Gill v. United States, supra, 160 U. S. at page 436, 16 Sup. Ct. at page 326, 40 L. Ed. 480:

‘There is no doubt whatever of the proposition laid down in Solomons' Case, that the mere fact that a person is in the employ of the government does not preclude him from making improvements in the machines with which he is connected, and obtaining patents...