Kaiser v. General Phonograph Supply Co. , 171 F. 432 ( 1909 )

NOYES, Circuit Judge.

At the outset of his argument counsel for the defendant contends that permission to file the amended bill should not have been given, because it sets up a new cause of action. But the propriety of allowing the amendment cannot be reviewed here. The sufficiency of the bill as tested by the demurrer is the only matter now to be considered.

The seven grounds of demurrer may be thus summarized and restated: (1) The complainant Kaiser has not sufficient interest in the patent to be joined as a party complainant. (2) The complainant Cunnius has not sufficient interest in the patent to be joined as a party complainant. , (3) The complainant the Excelsior Drum Works had no interest in the patent at the commencement of the suit and has not been properly brought into the suit. (4) The complainants Pepper and Soistman have no interest in the relief prayed for jointly with the other complainants.

It appears, from both the original and amended bills, that the complainant Kaiser, by assignment from the assignee of the patentees, became the owner of the patent in suit. He granted an exclusive license to Pepper and Soistman, hut retained an interest in damages recovered from infringers, and also — what is more important — the right to terminate the license contract under certain conditions'. In view of the interests retained, lie is, in my opinion, properly joined as a party complainant in the amended hill.

There is no merit in the contention that the allegations concerning the license given by Kaiser in the amended bill show that the court was without jurisdiction of the original bill for want of a proper party complainant. If this were true, a court would never have power to allow the substitution or change of parties in a case apparently brought by a proper party, but who was subsequently shown to have disposed of his interest in whole or part.

The situation with respect to the complainant Cunnius is, however, different. It does not appear that lie has any interest whatever in the patent. Pie has merely the right to share in moneys collected from infringers. I perceive no principle upon which he can join in the prayer for the injunction; and if he cannot he should not be permitted to remain as a party complainant. His rights under the contract can be protected in other ways.

The Excelsior Drum Works — the corporation — is a proper party complainant as assignee of the license contract. But it acquired its interest after the commencement of the suit, and should properly have been brought in under a supplemental, rather than an amended, bill. Still this objection is technical, and 3 think the amended bill may be regarded, so far as the averments concerning said corporation are concerned, as in the nature of a supplemental bill, speaking from the date of its filing.

The, complainants Soistman and Pepper, having disposed of their interests in the patent to the corporation, the Excelsior Drum Works, have no standing to pray for an injunction. As said with respect to the complainant Cunnius, their interest in the moneys to be recovered from infringers gives them no standing to pray for injunctive relief. This objection is not specifically taken in the sixth ground of the demurrer; but I think that that ground may be construed to embrace if.

The demurrer is sustained, with costs, upon the fourth ground, and also upon the sixth ground so far as it relates to the complainants Pepper and Soistman, but with the privilege to the other complainants, upon the payment of costs, to amend within 20 days by striking out the names of said parties complainant, Cunnius, Pegper, and Soistman.