Burr v. . De La Vergne , 102 N.Y. 415 ( 1886 )

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[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] The proposition asserted in behalf of the defendant, that one partner acquires no right or interest, legal or equitable, in an invention made by his copartner during the existence of the partnership by reason merely of the copartnership relation, although the invention relates to an improvement in machinery to facilitate the business carried on by the firm, and although the partner making the invention, uses copartnership means in his experiments, and is also bound by the copartnership articles to devote his whole time and attention to the firm business, is a doctrine supported by authority and consonant with reason. (Slemmer's Appeal, 58 Penn. St. 155, 164; Belcher v.Whittemore, 134 Mass. 330.) The proposition assumes, however, that there was no agreement pursuant to which a joint right was to be acquired in inventions made by either partner, and that the making or perfecting of inventions was not within the scope of the partnership business. The defendant relies upon this principle as decisive against the claim of the plaintiff to demand any share in the joint inventions of Mixer and the defendant, for which patents were issued to them jointly. This contention is put upon the ground that the agreement between the plaintiff and the defendant, upon which the plaintiff bases his action, as proved and found, related to an interest in inventions which should be made by Mixer under the arrangement between Mixer and the defendant. It is therefore claimed that the agreement is confined to an interest in inventions made by Mixer exclusively, and does not extend to joint inventions made by Mixer and the defendant. But this construction of the contract, if allowed to prevail in this case, would operate as a fraud upon the plaintiff. When the agreement was made, Mixer had in mind an undeveloped idea which he desired to embody in an experimental machine, to test its practicability and usefulness, and he therefore proposed to the defendant that experiments should be carried on in the brewery of De La Vergne and Burr, and that he would give the defendant one-half interest in the invention, provided the latter would pay the expenses of making the experiments and of constructing an experimental machine to test the value of the invention. The defendant, as the evidence on the part of the plaintiff tends to show, then presented the proposition to the plaintiff and offered to give him one-half of his proposed interest under the proposition of Mixer, provided the plaintiff would agree that the expenses of the experiments and of constructing the experimental machine should be paid by the firm. The plaintiff consented, and an expenditure of $40,000 was incurred and paid by the firm in prosecuting the enterprise, which finally resulted in the perfecting of the invention and the construction of a machine apparently of great value. Three several patents were applied for and issued to the defendant and Mixer jointly. This fact furnishes the foundation for the claim made, that these patents were not within the agreement between the parties. It must be assumed that the inventions covered by these patents were the joint inventions of the joint patentees. This is the inference from the patents themselves, and it is claimed that the inference is conclusive and incontestable upon a collateral inquiry. Assuming this to be true, nevertheless it does not we think furnish an answer to the claim of the plaintiff to an interest in these patents, under his arrangement with defendant. The referee finds, and the evidence justifies the finding, that the most material parts of the invention were Mixer's. Nor can there be any reasonable doubt that the patents embraced the original idea of Mixer, existing when the original negotiation commenced between him and the defendant, but adapted and perfected by experiment until the invention took its final form. Assuming, as perhaps must be assumed, that in the course of these experiments the defendant contributed original suggestions, which were adopted and entitled him to claim the inventions as the joint inventions of himself and Mixer, nevertheless we are of opinion that as between himself and the plaintiff, they must be regarded for the purposes of this action as the inventions of Mixer alone, and that any contribution on the part of the defendant thereto, must be considered as having been made in aid of Mixer while proceeding under the original agreement. Any other conclusion would, as we have said, work a fraud upon the plaintiff. It is significant as bearing upon this view, that all the experiments, including whatever was done at the suggestion of the defendant, were conducted at the expense of the firm and were treated as expenses incurred under the arrangement between the parties. We concur in the conclusion reached by the learned trial judge as to the right of the plaintiff to an interest in the patents, including the patent issued to the defendant in his own name alone. We are also of opinion that no error was committed in adjudging that the plaintiff was entitled to share in all the advantages derived or derivable by the defendant from the inventions, past or future, which are within the contract between the parties. The profits heretofore received by the defendant from licenses or sales of the right to use the invention, are assumed by the defendant to be reached and covered by the judgment. We think the defendant is justly accountable to the plaintiff for his share, according to his interest under the contract. It is not the case of one joint owner and patentee exercising the right to license the use of the invention, which he has a right to do without accountability to the other joint owners or patentees. The defendant denied the title of the plaintiff and refused to clothe him with a legal title to his interest in the patents, thereby practically precluding him from availing himself of their use, by granting licenses to others. His situation was analogous to that of a tenant in common of land, who has been ousted by a co-tenant, who has appropriated the rents and profits exclusively to his own use. The plaintiff cannot have the full benefit of his agreement unless the defendant is held to account for the profits received by him. The judgment does not specifically define what future inventions will come within, or result from the contract between the parties. This can be determined when the question arises. The claim that the agreement being by parol, was void under the statute of the United States, is not well founded. The agreement related to an inchoate invention, not perfected or patentable at the time the agreement was made, and was not, therefore, within section 4898 of the U.S. Revised Statutes, which declares that "every patent, or any interest therein, shall be assignable in law by an instrument in writing." Even in the case of a perfected invention, the statute does not prevent the obtaining of an equitable title thereto, or interest therein by parol (Walker on Patents, § 274), nor does it apply to a parol executory agreement to transfer an interest in an invention contemplated, but not perfected, and not cognizable under the patent laws when the agreement was made. The plaintiff by the agreement acquired an equitable right which attached to the interest of the defendant in the patents subsequently issued, and he is entitled to demand a legal title corresponding with his equitable interest.

The objection that there was no reference pursuant to the interlocutory judgment is not based upon any fact affirmatively appearing on the record. But assuming that the final judgment was rendered without a reference, it was nevertheless entered upon the direction of the judge before whom the case was tried, and at most it was an irregularity to be reached by motion, and is not brought up by an appeal from the judgment simply.

We think the judgment should be affirmed.

All concur.

Judgment affirmed.