Fraser v. Gates

Mr. Chief Justice Scholfield 'delivered the opinion of the Court: Although the question is not free from doubt, we think the-weight of authority is, that in case of joint patentees, neither is liable to account to the other for profits derived from the use of the patent, in the absence of a special agreement providing for such accounting. Washburn & Moen Manufacturing Co. v. Chicago Galvanized Wire Fence Co. 109 Ill. 71; Vose v. Singer Manufacturing Co. 4 Allen, 226; Dewitt v. Elmira Manufacturing Co. 12 N. Y. (5 Hun,) 303; Curtis’ Law of Patents, (4th ed.) secs. 186-191; Bump’s Law of" Patents, 141. But the preponderance of evidence here, in our opinion, establishes an agreement, whereby it was mutually agreed between Gates and Fraser, that in considera- ■ tion of the assignment of the invention by Gates to them, jointly, they would each bear one-half the expenses of obtaining the patent, and after the patent should be issued, that-they would mutually account, each to the other, for one-half' of the profits derived from its use. Gates testifies to this-effect, and he is corroborated by the direct testimony of Fargo,. and by the conduct and action of both himself and Fraser. Fraser’s denial is not sufficient to overcome this evidence. The claim made by Fraser, that Gates was not the inventor, is not sustained by the evidence. The letters patent contradict the claim. Gates’ evidence contradicts it, and he is sustained by the corroborating statements of others. Fraser’s claim to be the inventor consists of a single remark,—which he says he made to Gates, but which Gates denies,—in the nature of a suggestion. It is said in Curtis on Patents, (3d ed.) 121, “that a person may be the real author of the plan of a complicated machine, or other invention which requires for its perfection the skill, and, to some extent, the inventive faculties, of workmen or engineers, in adapting the best means to the successful application of the principle. ”, The principle here was to make a hard iron shoe with a soft iron stem. There is no pretence but that, as to that principle, Gates was the inventor. But difficulty was experienced in making the two metals to mix. Fraser says he suggested, “Why not pour in the hard iron, and then pour in the soft iron, and fill up the place, ” and that ultimately this was done by Gates, and proved successful. The remark, when made, was not based upon actual knowledge, and was evidently intended as suggestive, merely, and until Gates, by repeated experiments, demonstrated that it was practical, Fraser did not know whether it was of value or not. But, at best, it related merely to the mechanical detail by which the principle previously conceived was to be made available. This will be illustrated by reference to Bloxam v. Elsee, 1 Carr. & Payne, 567, and O'Reilly v. Morse, 15 Howard, 62. Fraser acquiesced in this claim of Gates, permitted him to apply for a patent, as inventor, and accepted letters patent to Gates and himself, jointly, reciting that Gates was inventor. Counsel contend it is absurd, if Gates were inventor, that he should assign one-half interest to Fraser. There is nothing, to our apprehension, absurd, or even unusual, in what Gates says was the arrangement between them. They were brothers-in-law, mutually interested in manufacturing mining machinery, etc., and each somewhat given to experimenting in inventions in the machinery they were manufacturing. Each was to have one-half interest in the inventions of the other. Any advantage which Fraser derived from this patent' might therefore be fully offset by advantages which Gates would derive from other inventions of Fraser. But the sharing in the expense of obtaining the patent, and the advantage of having a manufacturer to aid in introducing the patent to the public, under favorable circumstances might, alone, very reasonably afford a consideration for the assignment of one-half of the patent. But, conceding an agreement proved, two objections are urged against its enforcement in this action: First, that it was not in writing, and is therefore insusceptible of being enforced, by reason of the Statute of Frauds; and second, that, at most, it was but an agreement of co-partnership, which terminated upon Gates becoming bankrupt. We think the case is not affected by the Statute of Frauds, in two views authorized by the evidence: First, the contract, on one side, has been fully executed. The letters patent were issued in pursuance of the agreement, and the obligation to account for the profits results from the use of those letters, by virtue of the agreement, and ceases with the use. (White v. Murtland, 71 Ill. 251; Browne on Statute of Frauds, sec. 117.) Second, although the agreement was not expected to be performed within a year, yet, by reason of peculiar circumstances, it might have been performed within the year. Browne on Statute of Frauds, secs. 275, 276, et seq. It is quite plain, the agreement was not an agreement of co-partnership, because neither has an interest in the use of the patent by the other. They are simply tenants in common, with the right to require each other to account for one-half the profits derived by them severally from the use of the patent. The agreement to account and pay over is a continuing consideration of the grant of the letters patent. Chitty on Contracts, (11th Am. ed.) 73. . Being continuing, it was unaffected by the bankruptcy of Gates,—Bump on Bankruptcy, (10th ed.) 493,—and the right to enforce it hence passed, upon the assignment in bankruptcy, to the assignee, and by the assignee’s deed back to Gates. Fraser’s relations to the letters patent have remained all the time unaffected, and his obligations in respect thereof must, consequently, also remain unaffected. The reasoning of the Appellate Court, in Gates v. Fraser, 9 Bradw. 631, meets with our concurrence, so far as relates to this part of the ease. The rulings of the circuit court upon the exceptions to the master’s report we think correct, and we deem it unnecessary to review the evidence bearing upon the subject. We find no sufficient ground in the record to warrant us in disturbing the decree below. It is therefore affirmed. Decree affirmed.