Forster v. Brown Hoisting Machinery Co.

Mr. Justice Brown delivered the opinion of the court. We think that the chancellor in the Superior Court was right in sustaining the demurrer to the bill in this case. Whatever of merit there can be in the complainant’s case must depend on the proposition maintained by him that the demurrer admits the truth of allegations in the bill to the effect that the invention for which Alexander E. Brown received leters patent on July 4, 1899, was the invention of the complainant and was “contemplated” and “expressed” in the contract of February 17,1899, between the Brown Hoisting* & Conveying* Machine Company, the Iroquois Furnace Company and the complainant; that Brown applied for a patent covering said invention, asserting it to be his own, in order to defraud the complainant, and that this was admitted and acknowledged by Brown and the predecessor Company, to whose rights and obligations the defendant has succeeded. This acknowledgment is said by the bill to be shown by the correspondence which passed between the complainant and Brown and other officers of the Brown Hoisting & Conveying Machine Company and which appears in Exhibits 3 to 17 “made apart of the bill.” But the correspondence thus incorporated in the bill does not bear out the allegations of the bill. Making the purport of the correspondence itself, rather than the construction placed on it by the phrasing of the bill, the test of what is admitted by the defendant’s demurrer, we cannot hold that the defendant stands here as admitting* now or having* admitted through its officers or its predecessor in the past that the patented device of Brown was not his own invention or was the invention of Forster or was “contemplated” or “expressed” by the agreement of February 17, 1899. On the contrary, we find about two weeks after the agreement, the Brown Hoisting & Conveying Machine Company making a distinction between the “patents covering as broad a claim as possible, which will also include your method of moulding and casting” and the patents which it notifies Forster “our Mr. A. E. Brown also proposes to take out.” “It is his intention” the Company says, “to take out such patents as were invented and perfected by him and he will at once apply for a patent covering the method of holding the pigs and sow with details pertaining to same.” This is all said with reference to the apparatus at the works of the Iroquois Furnace Company. A few days later, March 10,1899, the Company writes to Mr. Forster: “The matter of taking out the patent is entirely optional with you, the agreement merely being that we shall pay the expenses in case you decide to apply for the patent. This agreement covers the broad claim as stated and had no reference to any details which you yourself might also claim to have invented. We understood that the broad combination referred to in the agreement was for the use of carriers generally in conjunction with breakers generally, you having asserted at the time that you yourself had conceived the broad idea of thus combining two separate pieces of machinery for use in cast houses for the purpose. How such a combination was to be worked out, the details of making it operative, we did not understand you made any claim to have invented. Without ourselves being sufficiently informed to be able to decide as between you and Mr. Brown in respect to the inventions involved in the machinery referred to, we made the agreement to depend, in the first instance, surely, upon the fact of your ability to obtain a United States patent for the broad invention as above defined. Replying to the second paragraph of your letter, we have again to say that it is our understanding that the question is not what we wish you to do, but what you may yourself decide to do in the'premises, and further we think it lies with us alone to decide with respect to taking out any and all patents covering inventions by Mr. Brown in the connection. This part was left entirely optional with us, but after we returned home and after taking the matter up with Mr. Brown we concluded that the points mentioned in our letter of 6th instant ought to be covered and at once, and we therefore started on our application and duly notified you, which we considered proper.” We think nothing could be clearer than the repudiation by this letter of any acknowledgment that the proposed application of Brown covered anything that Forster had invented or that was “contemplated” in the agreement of February 17th, or that in any sense Brown would be the “agent” of Forster in securing any expected patent. It will be noted also that the construction placed on the agreement was thus early a matter of. difference between the parties to it: This difference still continues, as appears from a comparison of the bill with this correspondence, for the bill alleges that by said agreement it was provided that the complainant “should obtain United States letters patent on any invention by him which broadly covered the combination” existing in certain pig handling and breaking machinery; and that the complainant “was to obtain” these letters patent within two years and “was to assign” them to the Company, on which assignment the Company was to pay the complainant certain sums; and that it was “pursuant to the terms of said agreement” that the complainant made his application for letters patent. But the claim of the defendant in the correspondence—a claim which is certainly borne out by the terms of the agreement, which is also by reference and annexation a part of the bill—is that the agreement was that if, and only if, Forster should within two years obtain letters patent on any invention by him which broadly covered the combination embraced in the pig handling and breaking machinery as then constructed at the Iroquois Furnace Company plant, then the Conveying Company would pay Forster the expense of taking out the patent, Forster should on his part assign the letters patent to the Conveying Company, and the Conveying Company pay Forster a large royalty on each and every pig handling and breaking machine built by the Hoisting Company under such assigned patents. This difference is very vital. The case made by the bill and the exhibits taken together, which is admitted by the demurrer, is different from that which would be made were the allegations of the bill purporting to give the effect of the contract and correspondence to be considered by themselves. It is entirely consistent with the theory that the predecessor company of the defendant had constructed according to plans and instructions of both Forster and Brown, peculiarly arranged machinery, that it was without knowledge whether Brown, one of its officers, or Forster, was entitled and able to procure patents on the whole or any part of the same, or how far the claims of one would interfere with those of the other, that it wished to forestall the possibility of any outside interest being able to duplicate the machinery as it had been constructed, that Forster claimed the invention of the underlying and broad idea of a combination of certain devices in the matter, and that the Company was unable or unwilling to assert that such a combination was unpatentable or had been anticipated by Brown or otherwise, and equally unable and unwilling to assert that it was patentable or was not anticipated by Brown or others; that therefore it made an agreement which provided that if Forster should succeed in his contention he would deal with them and no one else. In this view, the contract was to tie Forster to a certain course in a certain contingency which might or might not arise, and in the happening of which the Company had no favorable interest. Nothing can be properly predicated as to the admission claimed on the use of the words “your scheme” and “your problems” and “your plans” in letters written four years before in relation to a plant of the complainant’s Company not fully installed until the end of those four years. In this view, the bill is properly demurrable, as it seems to us, for a general want of equity. Its prayer is solely based on the contract, but nothing ever became due to the complainant under the contract because the basic and primary condition of it had never taken place. The contract was not that Forster should obtain letters patent, assign them and receive a royalty, but that if he did obtain them within two years that he should assign them in consideration of a royalty. He did not obtain them and consequently did not assign them and is entitled to no royalty. Nor can there be any such position successfully maintained in this view as that Brown was the agent of Forster in obtaining his patent, or that the contract is in effect already carried out in everything but the payment of royalties. Of course under this view it is still possible to contend that the Examiner of the Patent Office was wrong in refusing a patent to Forster on his application, or that the Patent Office was wrong in granting a patent to Brown as the first inventor of the devices patented by him. But these contentions pertain to a controversy between Forster and Brown, or Brown’s assignees, which is not within the jurisdiction of other than Federal Courts. They arise under the patent-right laws of the United States. The complainant did not pursue the course marked out by the law for him to test the accuracy of the Examiner’s report on his application, or the decision of the Patent Office on Brown’s application. It may be noted that the bill with its exhibits taken together does not bear out the implication of the body of the bill separately, that the claims allowed by the Patent Office in the Brown application were clearly substantially identical with those disallowed in the Forster application; nor does the Examiner’s report on the Forster application place the rejection altogether on anticipation by Brown. Of the seventeen claims of Forster nine only are said to have been anticipated in the Brown patent, and of these nine six were rejected for reasons additional to their being anticipated. The three remaining ones were not for “combinations” but “methods.” The contract made the obligations of the Hoisting Company dependent on the obtaining by Forster of a patent broadly covering “a combination.” The claims of “combinations” in his application were declared by the Examiner not to be for combinations, but to show that the applicant was endeavoring to patent separate inventions on a single application, which could not legally be done. If Forster disputed the decision of the Examiner on his application he could have a rehearing and if the rejection was repeated could appeal through two tribunals in the Patent Office to a final adjudication by Federal Courts. If he disputed the validity of Brown’s patent on the ground that he and not Brown was the inventor of the combinations therein described which the Examiner reported anticipated his claims, he had a similar recourse to higher authority in the Patent Office and, in the case of adverse decisions there, to the courts. He took no such action, but remained entirely inactive in the matter for about twelve years, when, in apparent preparation for a bill which he did not file until after twelve years had passed since Brown’s patent had issued and his own application had been denied, he asked information from the defendant Company as to the amount of machinery it had manufactured under the Brown patent. Before the amended bill was filed Brown had died. From the phrasing of the allegations of the amended bill we may suppose that he died even before the original bill was filed on August 16, 1911. The absence of any intention on the part of the complainant to await the death of an important witness may be conceded—indeed, it is admitted by the demurrer; but this is immaterial. The relevant matter is that the result of the long waiting on the part of the complainant was that when the bill was brought the witness was dead. This fact itself is relevant only as making apparent the fact that the twelve years that had intervened since action could have been taken by the complainant in support of his contentions had brought about a material change in conditions to the disadvantage of the defendant Company in its defense. Laches was, we think, imputable to the complainant, and that laches would have been injurious to' the position of the defendant even if the theory of the complainant’s bill had been well founded. The well recognized authority for the doctrine that a foreign corporation without license from the State cannot, because it is nonresident, avail itself of a statute of limitations which does not run while a defendant is nonresident, is not in point. Laches may sometimes be used as a defense when the statute is unavailable. In Gibbons v. Hoag, 95 Ill. 45, and Hubbard v. U. S. Mortgage Co., 14 Ill. App. 40, cited by the complainant, the distinction is clearly noted. In this last case the Court says: “Mere laches alone, short of the period fixed by the statute of limitations as a bar, will not preclude the assertion of an equitable right, where the adverse party is not lulled into1 security by the delay or prejudiced thereby. Nothing appears showing that the defendant was or could have been prejudiced by the delay,- and laches, therefore, cannot be interposed as a defense.” In the case at bar the reverse of this condition, as we think, is true. When the bill was filed the defendant Company had constructed many costly machines and it had been deprived of a most material factor in its possible defense. Our conclusion is that the bill is without equity, that the real contentions of the complainant shown by the bill and exhibit are not within the jurisdiction of the Superior Court of Cook county, and that the complainant has been guilty of laches in bringing them forward. The judgment of the Superior Court is affirmed. Affirmed.