Couch Patents Co. v. Berman

Miller, J.: The plaintiff avers that it is the owner of certain letters patent of the "United States covering sliding couches; that on the 28th day of September, 1907, it entered into a contract with the defendant, a copy of which is annexed' to the complaint, whereby it granted the defendant a non-exclusive license to- manufacture and sell in the United States specifically described sliding couches, embodying the invention covered by said patent, in consideration whereof the defendant agreed not to sell or deal in any sliding couches of the kind described without attaching a license tag furnished by the [298] plaintiff, which the defendant agreed to purchase in lots of one thousand for thirty cents each; that the defendant further agreed^ among other things, that he would not, at any time, contest or question the validity of the letters patent; that he would keep correct and detailed books of account and would render the plaintiff on the tenth of each month a sworn statement, setting forth the number of couches sold by him during the preceding month and the number of license tags on hand. The complaint charges a violation of that agreement and prays that the defendant be required to perform the contract; that he be restrained from selling couches without attaching the license tag.; and that he be required to account. The demurrer was sustained on the authority of Continental Store Service Company v. Clark (100 N. Y. 365) on the ground that the suit was brought to restrain the violation of patent rights. That suit was brought by an alleged assignee of the patentee against the latter and a third party, claiming also as assignee of the patentee; and it was held that an injunction-should not issue pendente lite restraining such third party from using the patented article. It will be observed that there was no privity of contract between the plaintiff and the party songlit to be enjoined. As assignee of the patent the plaintiff sought to restrain the. said defendant from infringing upon its rights. So far as that branch of the case was concerned, therefore, if was a patent, not a contract, suit. This case involves contract rights only. The defendant is sued, not as assignee, but as licensee, and the suit is strictly one to enforce contract" rights. In such a,case, it does not matter that the construction or validity of a patent may be collaterally involved, though it is not easy to see how the defendant can raise any question on that head. He has agreed to pay a stipulated sum for the privilege of manufacturing and selling a definitely-described article, which he concedes is covered by a patent owned by the plaintiff. The rule is that if the suit is brought to enforce contract rights it carries with it the whole case, and the State courts have jurisdiction; and vice versa, if the suit is brought to enforce patent rights, though a contract may be involved, the Federal courts have jurisdiction. ( Wise v. Tube Bending Machine Co., 194 N. Y. 272; Excelsior W. P. Co. v. Pacific Bridge Co., 185 U. S. 282; Littlefield v. Perry, 88 id. 205.) [299] The interlocutory judgment should be reversed, with costs, and the demurrer overruled, with costs, with, leave to withdraw demurrer and answer upon payment of costs in.this court and in the court below. Ingraham, P. J., McLaughlin and Laughlin, JJ., concurred. Judgment reversed, with costs, and demurrer overruled, with costs, with leave to defendant to withdraw demurrer and to answer on payment of costs.