Case ID: ad_113/html/0052-01.html
Source: Caselaw Access Project
Author: {"author": "McLaughlin, J.:", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Charles H. Moore and William R. Bracken, Respondents, v. John Coyne and James Delaney, the Names John and James Being Fictitious, etc., Defendants, Impleaded with The Coyne and Delaney Manufacturing Company, Appellant.
    First Department,
    May 11, 1906.
    Patents — State courts have ño jurisdiction of action for infringement— ■ complaint alleging manufacture by unlicensed corporation and asking an ■ accounting states, no cause of action — action for royalties must be : at law.. .
    If-an. unlicensed corporation has manufactured and sold a patented article in ■violation of the rights of the patentee, the remedy of the latter is to enjoin it . and to recover damages for an infringement, of the patent, of which the State courts have no jurisdiction.
    Hence, a complaint which in substance alleges that the patentee granted a license ' -to d," partnership to make and sell the patented article, and that .the licensee ■gave the benefit of the contract to a corporation, and asks that both the part- „ ■ nership .and corporation account jointly for whatever sum may be found due, does not state a cause of action against the corporation.
    Moreover, such complaint is bad as against the partnership, for the plaintiff has an'adequate remedy at law for the breach of the contract to pay royalties, '. The mere fact that an incidental accounting may be necessary does not alone . give.a court of equity jurisdiction. There must in addition be some trust or ■ fiduciary relation between the parties..
    . If such complaint be treated as stating an action at law, it is ‘still bad in the-absence bf an allegation that the corporation manufactured or sold the patented - ’articles upon which royalties were due in excess of the quantity for which royalties were actually paid.
    Appeal by the defendant, The Coyne and Delaney Mariufacturing Company, from an'interlocutory judgment of the Supreme Court in favor of the plaintiffs, entered in the office of the clerk of the county of New York on the 29th day of January, 1906, upon the decision of the court, rendered after a trial at the New York Special Term, overruling the said defendant's demurrer to the amended complaint.
    
      De Witt Bailey, for the appellant.
    
      J. D. O'Connor, for the respondents.
   McLaughlin, J.:

The Coyne & Delaney Manufacturing Company demurred to the complaint upon the ground that it did not state facts sufficient to constitute a cause of action against it. The demurrer was overruled and it has appealed.

The'complaint charges that at all the times mentioned John Coyne and James Delaney were a copartnership doing business under the name of Coyne & Delaney; that the Coyne & Delaney Manufacturing Company is a domestic corporation and has an office for, the transaction of business at the same place that the firm of Coyne & Delaney has; that on the 22d of March, 1899, the plaintiffs were the owners of letters patent issued by the United States for the manufacture and sale of wash-basin "fixtures or traps of a certain design, and that on that day they entered into an agreement- with the firm of Coyne & Delaney, by which such firm wás permitted to manufacture and sell such patented articles; upon. paying to the plaintiffs, their legal representatives or assigns, a royalty of twenty-five cents on each fixture or trap manufactured or sold, and rendering to plaintiffs, every thirty days, an account of the fixtures or traps so manufactured or sold, and paying such royalty, Which the firm agreed to do. It also contains an allegation to the effect, that Coyne & Delaney fraudulently and deceitfully represented themselves as a firm and gave the benefit of the contract to the.Cóyne & Delaney Manufacturing Company, and it thereafter manufactured and sold ■large quantities of the patented articles, for which Coyne ,& Delaney and the Coyne & Delaney Manufacturing Company refused to. pay, although requested to do so; that the plaintiffs had received not exceeding $350 from Coyne & Delaney, but they were unable to say whether the payments were made by the firm or the corporation., ' Thfe judgment demanded is that both the firm and the corporation account for the articles manufactured and sold and that plaintiffs, have judgment against the individuals composing the firm, and the corporation, jointly] for whatever sum might-be found due.

I am unable to see any causé of action whatever alleged against the Corporation. ' If it be true that the corporation has .manufactured of sold the patented articles in violation of plaintiffs’ rights secured under their letters patent, then their remedy against the corporation is to enjoin it and to recover damages for an infringement of the patent, which would necessitate a different action in a different foriim.

-It will be noted that there is no-allegation in the complaint that any of. the articles,, for the manufacture and sale of which the corporation is sought to be held liable, were made or sold- in pursuance of . the license given by the plaintiffs to the firm of Coyne & Delaney. The only allegation bearing on that subject is that the corporation had the benefit of the contract and' it and the firm Were “ beneficiaries under said agreement,” whatever this may mean. This allegation. might make the corporation liable to the firm, but not to the plaintiffs because there is no contract relation existing between the plaintiffs and the corporation. ■ ■

The. complaint is also bad for another reason. It appears upon the face of it that the plaintiffs have an adequate remedy at law. The contract simply provides for the .payment of royalties upon a patented article if manufactured or sold,"and if the same have been manufactured or sold under the Contract, then this gives the plaintiffs the right,- not to an accounting, but to the royalties stipulated to. be paid., for which ¡tn action at law may be maintained. And While it might be necessary, in- order to ascertain just what royalties were due, to take an account, this alone would not. give-a court of equity jurisdiction: There must be something in addition. Theffe must exist some trust Or fiduciary relation, between the parties to justify a court, of equity.in exercising its powers by decreeing an accounting. The only relief that could. here be awarded would ■be a-money judgment, clearly.an action at law, and nothing else. (McCullough v. Pence, 85 Hun, 271; Everett v. De Fontaine, 78 App. Div. 219.)

If the action cotild be treated as one at law and an inference could be drawn from the facts alleged that the corporation had assumed the obligations of the firm of Coyne & Delaney, this would not aid the plaintiffs' because there are no allegations that the corporation has manufactured or sold articles upon which the royalties would be in excess of the amount which has been paid.

The judgment appealed from, therefore,' should be reversed, with costs, and the demurrer sustained, with cost's, with leave to the plaintiffs to serve an amended complaint on payment of the costs in this court and in the court below.

O’Brien, P. J., Ingraham, Clarke and Houghton, JJ., concurred.

Judgment reversed, with costs, and demurrer sustained, with costs, with leave to plaintiff to amend on payment of costs in this court and in the court below. Order filed.