Wilson v. J. G. Wilson Corp.

WADDILL, District Judge (after stating the facts as above). The object of this suit is to determine the ownership of the letters patent aforesaid, issued by the United States to the complainant, Lester G. Wilson. Complainant avers that the defendant corporation is engaged in using and infringing his said letters patent, and prays for an injunction, an accounting, and profits and damages arising from the infringement. The corporation denies infringement on its part, and insists that, in the circumstances under which the patents were' issued, it has at least a shop right in and a perpetual license to use the patents, and by its cross-bill sets up a claim of ownership to the patents, and avers that, while the several patents were issued in the name of the complainant, they were one and all procured by him while in the employ of the James G. Wilson Manufacturing Company, a corporation engaged in the manufacture of rolling doors, rolling shutters, and partitions in bronze, steel, and wood, and of which this corporation is the successor, the complainant securing said patents while he was chief engineer of said company, charged especially with the duty of developing its business,' and with devising and procuring such improvements as would tend to develop and keep the defendant’s products up to a high standard and abreast of the times; that the inventive skill exercised and the mechanical work done was while complainant was in the employ of the defendant, and as a part of his employment, and the same was done at its cost and expense in every respect, from the furnishing of material used, to the employment of counsel in procuring the patents, and the payment of the patent office fees. The case was heard on bill and answer, and cross-bill and answer thereto, and upon the- evidence adduced, most of which was taken orally at the hearing, and the conclusion reached by the court, upon consideration of all the evidence, and the facts and circumstances surrounding the same, and the law applicable thereto, is: First. That the complainant was not entitled.to claim any of said patents as against his employer, the James G. Wilson Manufacturing Company, by reason of the circumstances under which they were procured, and that said company was entitled to a right in and indefeasible license to the use -of said patents, as against the complainant and his assignees. McClurg v. Kingsland, 1 How. 202, 11 L. Ed. 102; Solomons v. United States, 137 U. S. 342, 11 Sup. Ct. 88, 34 L. Ed. 667; Gill v. United States, 160 U. S. 426, 16 Sup. Ct. 322, 40 L. Ed. 480; Wilson v. American Circular Loom Co., 187 Fed. 840, 109 C. C. A. 600; Schmidt v. Central Foundry Co. (D. C.) 218 Fed. 466. [497] Second. That the defendant J. G. Wilson Corporation,, which acquired the stock of the James G. Wilson Manufacturing Company, and became the lawful successor thereof, changing the name from the James G. Wilson Manufacturing Company to the J. G. Wilson Corporation, likewise is entitled to a right in and irrevocable license to the use of the said patents, as the lawful successor of the said James G. Wilson Manufacturing Company, as against the said complainant and his assigns. The suggestion that the right in and license to use said letters patent is a personal one, existing in favor of the James G. Wilson Manufacturing Company, and does not, in the absence of an express contract, pass to the defendant company, is not well taken, and cannot be maintained, for the reason that the defendant company is but a continuation of its predecessor company, and the complainant in good faith and fair dealing is as completely estopped from claiming the right here set up against one as the other. In a word, these patents were procured by the complainant while in the predecessor coiApany’s employ, with a view to the successful transaction of its business, and they are no less essential to the successor corporation's operation of its business than they were to the original company; and to allow the original company to sell and dispose of its stock and assets, which included these patent rights and privileges, and which added to the value of the assets, at a profit, and then to give the patents, or relinquish their privileges in them, to one having the relation to the business that the complainant had, would operate as a fraud upon the successor company. Lane & Bodley Co. v. Locke, 150 U. S. 193, 14 Sup. Ct. 78, 37 L. Ed. 1049; Lightner v. Boston & Albany R. R., 1 Rowell, 338, Fed. Cas. No. 8,343. Third. That the complainant, subject to the rights of the defendant, as herein set forth, is the owner of the letters patent. Taking into account the circumstances under which these patents were issued, as above indicated, there is much force in the position of the defendant company, under the doctrine laid down in Solomons v. United States, 137 U. S. 342, 346, 11 Sup. Ct. 88, 34 L. Ed. 667, supra, and Gill v. United States, 160 U. S. 426, 435, 16 Sup. Ct. 322, 40 L. Ed. 480, supra, that the James G. Wilson Manufacturing Co., in whose employment complainant was at the time the patents were procured, became the owner of the same, and that the complainant was merely the legal owner, and held a naked trusteeship in such patents, with no beneficial interest therein, still the court, upon the whole evidence and under the authorities, inclines to the view that he is the beneficial owner of the patents, subject to the free and imlimited use thereof by the defendant corporation, the successor to the James G. Wilson Manufacturing Company, without royalty or charge of any kind. Hapgood v. Hewitt, 119 U. S. 226, 7 Sup. Ct. 193, 30 L. Ed. 369; Pressed Steel Car Co. v. Hanson, 137 Fed. 403, 71 C. C. A. 207, 2 L. R. A. (N. S.) 1172, 1182, and note. A decree in consonance with the views herein expressed will be entered on presentation.