Excelsior Wooden-Pipe Co. v. Allen

GILBERT, Circuit Judge, after stating the case as above, delivered the opinion of the court. The questions which are involved in this case were fully considered by this court in the case of Brush Electric Co. v. California Electric Light Co., 3 C. C. A. 368, 52 Fed. 945, in which it was held that the grant by the owner of a patent of an exclusive license to sell the patented article in a specified territory carries with it the implied authority to join the patentee, even against his will, as a party plaintiff in suits against infringers. It is unnecessary to reconsider the grounds upon which that conclusion was reached. It is contended that a different question is here presented from the fact that the patentee has denied the existence of the license to his co-complainant, and has granted a license to the defendant. It is said that thereby he has assumed a position which is antagonistic to that of his co-complainant, necessitating the dismissal of the bill as to him, and justifying his joinder as a defendant, if the complainant has a cause of suit for infringement. We find no material difference between the facts of the two cases. In the former case the Brush Electric Company sustained the same relation to the patent that Charles P. Allen does in the present case. The Electric Improvement Company in íáan José was sued for infringement by the California Electric Light Company, which claimed to have a license from the Brush Electric Company, the owner of the patent; and the latter corporation was joined as a party complainant. It moved that it be dismissed from the suit upon the ground that the suit was brought without its knowledge or consent, and against its will, and in violation of its right as owner of the patent, claiming that the license was forfeited by reason of the attempt of the licensee to subdivide the same. In that case, as in the case at bar, the licensor was a nonresident of the state in which the suit was begun, and for want of service could not have been made a party defendant. It is urged, however, that the facts shown in the defendant’s affidavit on the motion to dismiss in the present case would have justified an allegation in the bill that Allen, the patentee, was a joint infringer with the defendant, provided the complainant’s license still subsisted; and that under the authority of Littlefield v. Perry, 21 Wall. 205, 22 L. Ed. 577, the patentee could have been joined in the suit only as a defendant. In the case referred to, the court remarked : “Here, however, the patentee is the infringer, and. as he cannot sue himself, the licensee is powerless, so far as the courts of the United States are eon* [555] cerned, unless he can siv in his own name. A court of equity looks to substance, rather than form. When it has jurisdiction of parties, it grants the appropriate relief, without regard to whether they come as plaintiff or defendant.” It may be conceded in the i*reseii(: case that upon the assumption that the statements contained in the defendant’s affidavit are true the patentee might have been joined as a party defendant, but tills does not meet the proposition that in the case as made upon the bill the patentee was a proper party complainant, and that upon the showing made on the motion and the affidavits the court should not have dismissed the suit as to him. It was admitted in the affidavits that the license which the complainant set forth in the bill had been executed. It was alleged, it is true, (hat the license was coupled with conditions, that the conditions had been violated, and the license revoked; but the nature of the conditions was not set forth, nor was it alleged in what way they had been violated, or how a forfeiture was incurred or revocation was made. It was not stated that a court had decreed a forfeiture. It was not even assorted that the complainant had been notified of such forfeiture or re vocation. So far as the court was advised of the facts by the affidavits, revocation existed only in the mind of the patentee, and was but the assertion of his Own construction of his rights in the premises. Khali a court of equity, upon such a showing, prejudge the rights of the complainant in a bill of equity, and dismiss his suit? To dismiss in this case as to- the patentee is to dismiss from the suit an indispensable party. It results in the dismissal of the bill, since the patentee, a nonresident of the territorial jurisdiction of the court, cannot be served with process as a defendant. That the patentee is in such a suit an indispensable party is held in Gayler v. Wilder, 10 How. 477, 13 L. Ed. 504, and Waterman v. Mackenzie, 138 U. S. 252, 11 Sup. Ct. 334, 34 L. Ed. 923. In the latter ca.se the court said: “In equity, as at law. when the transfer amounts to a license only, the title remains in the owner of the patent; and suit must bo brought in life name, and never in the name of the licensee alone, unless that is necessary to prevent an absolute failure of justice, — as where the patentee is the inf linger, mid cannot sue himself.” We entertain no doubt that the court should have retained jurisdiction of the suit as it was presented. When he granted the license to the appellant, the patentee granted the implied authority to use his name as a complainant in any suit necessary to protect tile rights of the licensee. It has not been shown that the license so granted is not now in full force and effect. The result arrived at by the court was not based upon a plea in abatement, and upon evidence taken to determine the question of the existence of a license, but was reached upon the ex parte statement of the patentee himself, alleging as a conclusion of law that the license for breach of its conditions had been revoked. Nor is a court of equity devested of its power to decree appropriate and final relief from the fact, if it be a fact, that the patentee has conspired with the defendant to infringe the rights of the licensee. If his attitude towards his co-complainant is antagonistic, it does not [556] follow that be must be dismissed from the suit. The former practice of courts of chancery which required the dismissal of a bill in case of the joinder of complainants whose interests were antagonistic has given place to a more equitable procedure, which recognizes the power of the court to so arrange the parties to the suit as their interests demand, to make a complainant a defendant, and to decree relief to all parties before it, whether they appear as complainants or defendants, so long as they are all the necessary parties to the controversy. Boughton v. Allen, 11 Paige, 321; Osgood v. Franklin, 2 Johns. Ch. 1; Bowen v. Idley, 1 Edw. Ch. 148; Le Fort v. Delafield, 3 Edw. Ch. 32; Parkman’s Adm’r v. Aicardi, 34 Ala. 393; Suydam v. Dequindre, Har. (Mich.) 347; U. S. v. Union Pac. R. Co., 98 U. S. 569, 25 L. Ed. 143. In the case last cited the court said: “It is no objection to granting such relief that tlie company is a defendant, for by the flexibility of chancery practice a person whose interests in the subject of litigation are on the same side with the complainant may be made a defendant.” In 1 Daniell, Ch. Prac. (5th Ed.) 235, it is said: “The consequences of a misjoinder of plaintiffs such as above considered are no longer the same as formerly, for then the bill would have been dismissed, whereas now the court is empowered to grant such relief as the circumstances of the case require, to direct such amendments as it shall see fit, and to treat any of the plaintiffs as defendants.” We think there can be no question that, if at any time during the progress of the cause it had appeared that the patentee sustained a relation to the controversy such as to require that he be treated as a defendant, the court had the power to deal with him as such, and to mold- the final decree so as to determine the rights of all the parties to the controversy. The decree is reversed, and the cause remanded for further proceedings not inconsistent with the foregoing views.