Merserole v. Union Paper Collar Co.

BLATCHFORD, District Judge. In order to give this court jurisdiction of the suit on the ground of parties, it must be a suit between a citizen of the state of New York and a citizen of another state. Act Sept. 24, 1789, § 11 (1 Stat. 78). The necessary averments of citizenship to confer jurisdiction must appear on the face of the bill, This bill is defective in that respect. The plaintiffs are not averred to be citizens of any state, but only citizens of the United States. It should appear, affirmatively, that they are not citizens of the same state with the defendants. The other ground of jurisdiction invoked is that of the subject-matter of the suit In that respect, the bill is founded wholly on the alleged invalidity of the patents; for, if this court has not jurisdiction, growing out of the subject-matter,, to decree the patents to be void, it has none to enjoin the defendants from suing on the license under the patents, or to decree that the consideration for the license has failed, or to decree the canceling of the license or the agreement, or to decree a return of paid tariffs. The only authority conferred on' this court, by any statute of the United States, to adjudge any letters patent to be void, is that given by section 16 of act of July 4, 1836 (5 Stat. 123), as extended by section 10 of the act of March 3, 1839 (5 Stat 354). Such authority extends, by-those provisions, no farther than to a case of two interfering patents, and to a case where the granting of a patent is refused by the commissioner of patents, or by the chief justice of the District of Columbia on appeal. The jurisdiction of this court fails, therefore, in this case, as respects the subject-matter, so far as regards the conferring on it of any special authority to declare the patents in question- void. It is urged, however, on the part of the plaintiffs, that section 17 of the act of July 4,1836, confers upon this court jurisdiction to declare these patents void. That section provides that “all actions, suits, controversies, and cases arising under any law of the' United States granting or confirming to inventors the exclusive right to their inventions or discoveries, shall be originally cognizable, as well in equity as at law by the circuit courts of the United States.” It is claimed that this suit is one arising under the laws of the United States which grant to the patentees named in the patents in question the exclusive right to the inventions covered thereby. So far as regards the right of the defendants to sue the plaintiffs upon the license, to recover from the plaintiffs the tariffs reserved therein, and the rights of the defendants to alienate their interest under the license, and their right to hold in force, as against the plaintiffs, the license and the agreement made by the plaintiffs in the assignment of the license to them, and the right of the defendants to retain the amount of tariffs paid -by the plaintiffs, it needs no argument to show that those rights arise-, all of them, out of and under the license and the agreement and the transactions thereunder, and not in any proper or legal sense, out of or under the patents or the law under which they were granted; and that this suit, so far as it seeks to impair or destroy those rights, has the same origin and basis. It is well settled that such a subject-matter does not confer on this court - jurisdiction of a suit. Wilson v. Sandford, 10 How. [51 U. S.] 99; Goodyear v. Union India Rubber Co. [Case No. 5,586]. Whether the suit be one by a licensor to enforce the covenants contained in a license granted under a patent, as -in- the cases just cited, or be like the present suit, one by the licensee to destroy and annul the license and its covenants, it is equally impossible to find in the subject-matter any basis for the jurisdiction of this .court. So far as the suit is based on any alleged false representations made by the defendants, it arises out of a fraud committed by the defendants, and not under any act of congress. If the license and the agreement of the plaintiffs are void because the patents are void, the fact that the plaintiffs must show that the patents are void, in order to get rid of the license and the agreement, does not make the case one arising under the patent act, so as to give to this court jurisdiction of it A state court has jurisdiction to decree the license and agreement to be void and inoperative for fraud, or any other adequate reason, and the fact that, in the investigation, the state court will be obliged to inquire whether there was anything new in the patents which could operate as a consideration for the license and agreement, can not de [155] prive the state court of jurisdiction, or confer it on this court. It is true that a state court can not take cognizance of a suit brought for the infringement of a patent; nor of a direct-suit, brought to decree a patent to be void. But, as is well said by Chief Justice Williams, in Rich v. Atwater, 16 Conn. 409, 414: “That the validity of patent rights is a subject peculiarly within the jurisdiction of the courts of the United States is true. But it is equally true, that when they come in question collaterally, their validity must become a subject of inquiry in the state courts. Thus, in á suit upon a note if it is claimed that the note was given for a patent right, and the patent is invalid, and so there was no consideration for the note, the state courts constantly exercise jurisdiction.” In Rich v. Atwater, the plaintiff owned a patent for a machine which the defendant was infringing. The defendant, by a covenant, agreed not to use the infringing machine any longer, but nevertheless, went on using it, and the plaintiff brought a suit founded on the agreement for an account and an injunction. The defendant offered to prove that the patent was invalid for want of novelty. The plaintiff objected to the evidence, and took the point before the full court, which held that the evidence was admissible. In Cross v. Huntley, 13 Wend. 385, the suit was brought on a note given on the sale of a patent for a machine. In defense, it was proved that the machine was not new, and that the specification of the patent was so defective as teá.avoid the patent Mr. Justice Nelson, in delivering the opinion of-the court, says: “It is insisted by the defendant ..below that the patent is void on the grounds: (1) That the machine, for the making and vending of which the patent was granted, is-not a new invention; and (2)' if new in parts, the patent is void, inasmuch as it is for the whole machine, and not for the improvement If either of these positions were sustained by the proof, the defendant was entitled to judgment in the court below, as in such case a failure of the consideration of the note was shown. Prom the evidence, there can not be a doubt but that the patent, in both respects, is defective and void. * * * The patent being void, nothing passed to the plaintiff in error, and the note was given without consideration.” The case of Head v. Stevens, 19 Wend. 411, was one .of the same character. It can make no difference whether the payee of the note or the licensor in the license brings the suit to enforce the note or the license, or whether the suit is brought by the-maker of the note, or the licensee in the license, to cancel the instrument. The state court has jurisdiction in either case, to inquire collaterally into the validity of the patent. It is true, that a state court can not entertain jurisdiction of a direct suit to repeal a patent. Every citizen has, abstractly, the same interest with every other citizen, that a void patent shall not be in existence. Yet, such interest .is not sufficient to warrant the maintenance of a suit to repeal a- patent. Such a suit can not be brought in a state court. If not embraced within section 16 of the act of 1836, and section 10 of the act of 1839, it is not within the jurisdiction of this court; for it can not be contended that every citizen has a right to bring a suit in the circuit court of the district where the proper defendant may be found, to repeal a patent, for the reason that such suit is a suit arising under a law of the United States. If such right existed under section 17 of the act of 1836, the provisions of section 16 would be useless. The two sections must be construed together, and the confiding of authority, by section 16 to declare a patent void, in certain specified cases, must be regarded as intended not to confer such authority in any other cases. The bill must be dismissed with costs.