#### ELIZABETH HAWKS, Appellant, *v.*GEORGE W. SWETT AND OTHERS, RESPONDENTS.

*Decree*— *when parties to, bound by—Assignees of patent—effect of invalidity of patent on agreement entered into by—Letters*patent— *what conferred by.*

In 1867 the plaintiff, to whom letters patent for an improvement in the manufacturing of stoves had been issued, assigned them to defendants, who agreed to pay her a certain sum for each stove manufactured thereunder, she agreeing to protect them in the exclusive enjoyment of the privileges thereby conferred. In 1869 she surrendered these letters, and obtained a reissue, which was subsequently assigned to the defendants, subject to the agreement for compensation. Subsequently one Goodfellow, claiming to be the first inventor, procured letters to be issued to him, which he afterward assigned to the defendants, who sold the rights acquired under the assignment from the plaintiff, to one Burtis. Subsequently a suit was commenced by the defendants against the plaintiff and Burtis, in which a decree was entered deciding that the letters patent issued to the plaintiff were void, and of no effect. This action was brought to obtain the compensation agreed to be paid by the defendants to this plaintiff upon her assignment to them of the said letters. *Held*(1), that the decree in the suit brought in the United States court established conclusively, as between the parties to this action, that the letters patent were void, and that defendants weze not estopped from setting up such invalidity ; (2), that the letters patent being void, there was no consideration for the promise of the defendants to pay for stoves znanufactured thereunder; (3), that the assignment by the defendants of their lights thereunder, did not estop them from setting up this failure of consideration as against the plaintiff.

*147
      *Saxton*v. *Dodge*(57 Barb., 84) followed; *Thomas*v. *Quintard,*(5 Duer, 80) distinguished.

Letters patent for an invention confer nothing, except a right to bring actions, and thereby prevent persons from doing what they might otherwise lawfully do.

Appeal from a judgment in favor of the defendants, entered upon an order dismissing the plaintiff’s complaint.

This action was brought to recover certain royalties or license fees, claimed to be due the plaintiff by virtue of a written agreement. The defense was, that the covenant to pay royalties was void for want of consideration.

*James*Lansing, for the appellant.

The defense of fraud is not available in this case, because it is not alleged in the answer that the defendants offered to restore the plaintiff to her former condition on the discovery of the alleged fraud, which is indispensable to the defense. *(Devendorf*v. *Beardsley,*23 Barb., 656.) Their own assignment precludes the defendants from saying that what they sold was valueless, and therefore unnecessary to return. *(Thomas*v. *Quintard,*5 Duer, 80.) So long as the defendants elected to keep the contract on foot they are bound by it, and can only avail themselves of a breach by way of recoupment. *(Pitts*v. *James,*15 Barb., 310.) In order to defend for breach of warranty of title, there must be an eviction, either a recovery by or an enforced surrender to the true owner. This applies to personal as well as real property. *(Case*v. *Hall,*24 Wend., 102; *Burt*v. *Dewey,*40 N. Y., 283; *Bordwell*v. *Collie,*45 id., 494.) The defense of failure of consideration is not available, since the defendants, by parting with the patent for a valuable consideration, are precluded from setting up want of value in the patent, and have disabled themselves from restoring the plaintiff to her former condition. *(Thomas*v. *Quintard,*5 Duer, 80; *Winslow*v. *Buel,*1 How., 373; *Parley*v. *Balch,*23 Pick., 283.) The decree was improperly admitted in evidence, because, being, new matter which confessed and avoided the plaintiff’s title, it should have been set up in the answer. *(O'Toole*v. *Garvin,*1 Hun, 92; *Brazill*v. *Isham,*12 N. Y., 9.) It is not admissible as evidence to prove the fact that the plaintiff’s patent is valueless: First, because no such defense is set up in the answer; second, if it were, the statute which authorizes the action in the United *148States court, limits the effect of the decree so that the patent may, under certain circumstances, still be of value. (Rev. Patent Laws, approved July 8, 1870; see appendix to Patent Laws, p. 17, § 58; *Johnson*v. *Titus,*2 Hill, 606.) The conveyance of the patent to the defendants being made upon a nominal consideration, with the real consideration to be paid by the defendants from working the patent, it became a joint venture, and the plaintiff and defendants are partners in the benefits of the investment. *(Taylor*v. *Hare,*4 Bos. & Pull., 260.) And the defendants, when called upon to account, having received the benefit, are estopped from denying the plaintiff’s title or retaining the profits to their own use. *(Kinsman*v. *Parkhurst,*18 How. [U. S.], 289.)

*Esek Cowen,*for the respondents.

A promise or note given in consideration of an assignment of the whole or a part of letter's patent which are void for want of novelty, is given without consideration and cannot be enforced. That is clearly so in this State. *(Cross*v. *Huntly,*13 Wend., 385; *Head*v. *Stevens,*19 id., 411; *McDougall*v. *Fogg,*2 Bosw., 387; *Saxton*v. *Dodge,*57 Barb., 84, 114; *Dickinson*v. *Hall,*14 Pick., 220; *Earl*v. *Page,*6 N. H., 480; *Davis*v. *Bell,*8 id., 503; *Dunbar*v. *Marden,*13 id., 317; *Geiger*v. *Cook,*3 Watts *&*Serg., 270; *Durst*v. *Brockway,*11 Ohio, 471; *Fallis*v. *Griffith,*Wright, 303; *Mulliken*v. *Latchem,*7 Blackf.,*138; McClure*v. *Jeffrey, 8*Ind., 82.) A complete answer to the claim that the defendants were estopped by the assignment to them, or the assignment from them, is that the judgment between the same parties was conclusive upon that point. *(LeGuen*v. *Gooverneur, 1*Johns. Cas., 436 ; *Embury*v. *Conner,*3 N. Y., 511, 522; *Haire*v. *Baker,*5 id., 357; *Davis*v. *Tallcot,*12 id., 184.)

Learned, P. J.:

The .first question is, whether the decree of the United States court was admissible under the pleadings. The answer is not well drawn, but it sets up want of consideration and worthlessness of the patent. There could be no doubt as to the intended defense. This decree between the same parties was good evidence of these facts. * If necessary to amend the answer so as to set up the *149decree by way of supplement, this could have been done at the trial by the permission of the court; for the plaintiff could not be misled. She was a party to the action in which the decree was taken, and appeared therein. *

Another, objection taken to the admission of the decree was, that the plaintiff and defendants were jointly interested in the invention, and the defendants are therefore estopped from setting up an adverse title. The bill of complaint in which that decree was obtained, to state it briefly, set forth that Elizabeth Hawks, the present plaintiff, having fraudulently obtained letters patent, assigned the same to Swett and others, the present defendants; that they assigned them to one Burtis; that one' Groodfellow was the real inventor of the alleged improvement, and had obtained letters patent therefor. Swett and others, these present defendants, therefore brought that action against Elizabeth Hawks, the said Burtis and one Marston, to have the letters patent issued to this present plaintiff declared void, etc.

How, if it be so, that the present defendants, having taken an assignment from this present plaintiff, could not legally maintain that action, such defense should have been interposed there. Here, it is too late. That decree is a decision that the plaintiffs therein, the present defendants, were not estopped from setting up the adverse title; that is, I mean they were not estopped in that action.

The most important point, however, is the objection taken on the ground of the immateriality of that decree. That objection substantially raises the real question of the case, which also came up on the exception to the nonsuit.

The facts are briefly these: In 1867, letters patent for an invention were issued to the plaintiff. In the same year she entered into an agreement by which she assigned them to Swett, Perry, Huttall and Marston. Huttall has since assigned his interest to Marston ; and Swett and Perry have assigned an interest to Quimby. By that agreement, the assignees were to pay her fifty cents on every stove, etc., manufactured and sold under said letters patent. She guarantied the validity and priority of the letters patent; agreed to protect the assignees in the exclusive enjoyment of all *150rights and privileges conferred; failing to do which all payments were to cease. In 1869, she surrendered the letters and obtained a re-issue; and in 1870, she assigned to these defendants, Marston, Swett, Quimby and Perry, the said reissue, subject to the aforesaid agreement for compensation.

In 1869, one Goodfellow applied for letters patent on this invention, alleging himself to have been the first inventor, and to have shown the invention to the plaintiff. An interference was declared ; testimony was taken on the part of Goodfellow and of the plaintiff; a decision was rendered in favor of Goodfellow, by the examiners, which was affirmed by the examiners-in-chief, and by the commissioner of patents. The defendants acquired, by assignment, Goodfellow’s right in the patent, and then commenced the' action in the United States Circuit Court against the present plaintiff, one Burtis, and Marston. This plaintiff was duly served with process and appeared, and a decree was taken *pro confesso,*January 21, 1873. This adjudges that the letters patent issued to the plaintiff are wholly void, invalid, and of no effect, and that she was not the original and first inventor.

Now, this decree is conclusive between the parties, as to the matters in controversy — the facts necessary to sustain it. * The invalidity of the plaintiff’s letters patent, and the fact that she was not the first inventor, are settled, as between these parties. The only question is, as to the effect which these established facts have on the present action.

In order that we should not be misled by any false analogy, it should be noticed that letters patent for an invention confer nothing except a right to bring actions, and thereby to prevent persons from doing what they might otherwise lawfully do. Mrs. Hawks, under her letters patent, had a right to sue any one who made stoves in a particular manner; and that was all that she had. If the patent was valid she could succeed in the action. The first agreement above mentioned was, in its real substance, an agreement that she would not sue the assignees if they would pay her fifty cents for each stove; and they agreed to pay her this sum in consideration that she would not sue. The whole basis of the *151agreement, therefore, is her right to maintain successfully an action against them. When it is decided that she has no such right, all the consideration of the agreement is gone; for, if she has no cause of action by reason of their manufacture of the stoves, an' agreement not to bring such an action is of no value.

The counsel for the plaintiff have compared the transaction to the sale of property, real or personal. They insist that in order to defend an action for purchase-money, on the ground of a breach of warranty of title, there must be an eviction. But the difference in the case is, that there is no *thing*which passed to the defendants by this agreement; there is no *thing*of which they have had possession, or of which they could be evicted. In a loose sense, these patent rights are sometimes called *property;*but it will not answer to apply to them, without discrimination, the rules which apply to *things.*If the plaintiff had sold land to the defendants, with warranty, they might have enjoyed it until evicted. So, if she had sold them a chattel. But in this present case she has only agreed not to prevent them from manufacturing certain stoves; and, by the decision of the United States court, it appears that she could not have prevented them, if she had tried. Her assignment to them, if the patent were valid, gave them only a right to sue others. If it were invalid, it gave no right of action against any one.

It is said that the defendants have had the enjoyment of the patent, and have manufactured under it. But there was nothing to enjoy; and it cannot be said that they manufactured under a right, which, in fact, did not exist.

When certain defendants took a license from a patentee, on an agreement to pay certain license fees, so called, and gave a note therefor, the invalidity of the patent was held a good defense to the note. * In harmony with that decision are the cases of *Cross*v. *Huntly,*
      †
      *Head*v. *Stevens,*
      *‡*
      **and *McDougall*v. *Foss.*
      § If the case of *Thomas*v. *Quintard*
      ǁ be contrary to these, it must be considered as overruled. But an examination of that case will show -that there was no attempt to prove that the patent was invalid. The offer was to show that the article manufactured under *152the same was of no value. That offer presented a question very different from that involved in this case. The defendants do not here offer to show that the stoves which they made were of no value; hut they show that the plaintiff had no right to prevent the manufacture of these stoves by her pretended invention. Why, then, should they pay her for not doing what she could not do ?

It is insisted further, by the plaintiff', that, as the defendants assigned their interest in this patent to Burtis, they are precluded from alleging its invalidity. It is not necessary to inquire whether such a rule would apply to the case of a patent utterly invalid. It is enough that, in an action where that objection, if valid, might have been urged — that is, the action in the United States court — the plaintiff’s patent was adjudged invalid at the suit ‘ of these defendants. *

The judge was right in directing a verdict for the defendant, and the judgment and order denying a new trial should be affirmed.

Boardman, J.:

The English decisions seem to hold, in cases like this, where the contract has been executed, and the defendants have had the benefit contracted for, they may not set up that the patent was void, and that there was no consideration to uphold it, since the contract gave no exclusive right; that in the absence of fraud or eviction, the defendants, having enjoyed the benefits contracted for, are bound to pay in accordance with their contract, though the patent he void, or the plaintiff not the inventor.† From the case of *Bartlett*v. *Holbrook,*
      *‡*
      **it would appear that the same rule obtains in Massachusetts.

The authorities cited by my brother Learned in his opinion, show the existence of a different rule of law within this State, and sustain the ruling of the Circuit, dismissing the plaintiff’s complaint on the ground of a want of consideration. I therefore concur in affirming the judgment.

*153Present—Learned, P. J., Boardman and Potter, JJ.

Judgment affirmed.

Gates v. Preston, 41 N. Y., 113.

See, also, Rinchey v. Stryker, 28 N. Y., 45.

The People v. Johnson, 38 N. Y., 63; Marsh v. Pice, 4 Rawle, 273; Hopkins v Lea, 6 Wheat., 109; Gates v. Preston, *ut supra.*

Saxton v. Dodge, 57 Barb., 84.

13 Wend., 385.

19 Wend., 411.

2 Bosw., 387.

5 Duer, 80.

Davis v. Tallcot, 12 N. Y., 184.

Taylor v. Hare, 1 Mod. R., 260; Hayne v. Maltby, 3 T. R., 438; Bowman v. Taylor, 2 Adol. & El., 278 (29 E. C. L., 90); Cutler v. Bower, 11 Q. B. (63 E. C. L.), 972; Laws v. Purser, 38 Eng. L. and Eq., 48.

1 Gray, 114.