Source: http://supreme.nolo.com/us/168/255/case.html
Timestamp: 2019-04-25 16:01:53+00:00

Document:
"the jurisdiction vested in the courts of the United States in the cases and proceedings hereinafter mentioned shall be exclusive of the courts of the several states. . . . Fifth. Of all cases arising under the patent right or copyright laws of the United States."
which the plaintiffs agreed to save the defendant harmless against any suit which might be brought against it for infringement, and to defend such suits at their own expense, and averred, among other things, that the patents were void and an infringement upon prior patents, that plaintiffs had not kept the defendant harmless against suits, but had refused to defend it against a suit brought by the National Gas Light & Fuel Company, by reason of which the consideration had wholly failed, and defendant had rightfully rescinded the contract. Manifestly if the defendant had no right to use the machine, it was of no value to it, and the whole purpose of its purchase was frustrated.
circuit court of the United States to rescind the contract, but, having the right to rescind without suit, it ought not to be driven to this circuitous remedy.
The action under consideration is not one arising under the patent right laws of the United States in any proper sense of the term. To constitute such a cause, the plaintiff must set up some right, title, or interest under the patent laws, or at least make it appear that some right or privilege will be defeated by one construction or sustained by the opposite construction of these laws. Starin v. New York, 115 U. S. 248; Germania Ins. Co. v. Wisconsin, 119 U. S. 473.
The state court had jurisdiction both of the parties and the subject matter, as set forth in the declaration, and it could not be ousted of such jurisdiction by the fact that, incidentally to one of these defenses, the defendant claimed the invalidity of a certain patent. To hold that it has no right to introduce evidence upon this subject is to do it a wrong and deny it a remedy. Section 711 does not deprive the state courts of the power to determine questions arising under the patent laws, but only of assuming jurisdiction of "cases" arising under those laws. There is a clear distinction between a cases and a question arising under the patent laws. The former arises when the plaintiff, in his opening pleading -- be it a bill, complaint, or declaration -- sets up a right under the patent laws as ground for a recovery. Of such, the state courts have no jurisdiction. The latter may appear in the plea or answer or in the testimony. The determination of such question is not beyond the competency of the state tribunals.
The jurisdiction of state courts over patent cases is not more exclusive than that of the district courts over cases of admiralty and maritime jurisdiction. Yet when vessels have passed into the hands of an assignee or receiver, it had been the constant practice of courts of bankruptcy and equity to respect the liens given by the maritime law, to marshal such liens, and direct their payment, precisely as a court of admiralty would have done. Scott's Case, 1 Abbott U.S. 336; In re Kirkland, 14 Fed.Cas. 677; In re People's Mail Steamship Co., 3 Ben. 226; High on Receivers § 138.
While the question has never arisen in this Court in the exact form presented in this case, we have repeatedly held that the federal courts have no right, irrespective of citizenship, to entertain suits for the amount of an agreed license or royalty, or for the specific execution of a contract for the use of a patent, or of other suits where a subsisting contract is show governing the rights of the party in the use of an invention, and that such suits not only may, but must, be brought in the state courts. Hartell v. Tilghman, 99 U. S. 547; Wilson v. Sandford, 10 How. 99; Albright v. Texas, 106 U. S. 613; Goodyear v. Day, 1 Blatchford 565; Blanchard v. Sprague, 1 Cliff. 288; Dale Tile Mfg. Co. v. Hyatt, 125 U. S. 46; Wade v.Lawder, 165 U. S. 624, although, in an action for royalties, if the validity and infringement of the patent are controverted, the case is considered as one "touching patent right" for the purposes of an appeal to this Court under Rev.Stat. § 699. St. Paul Plough Works v. Starling, 127 U. S. 376. In this case, the court expressly reserved the question whether the action should be considered as one arising under the patent laws of the United States within the meaning of section 711.
We are referred to but one case directly in point which favors plaintiffs' contention -- Elmer v. Pennel, 40 Me. 430, in which, in a suit upon a note given for a patent right, proof that the patent was void as an infringement upon a prior one was held not to be admissible without that fact having been determined by a court of competent jurisdiction.
MR. JUSTICE GRAY, to the effect that any degree of utility or practical value in a patent will support the consideration paid for it, but that if it be wholly void, a note given for it is without consideration, and such issue may be tried in the state court as well as in the circuit court of the United States. See also, to the same effect, Bierce v. Stocking, 11 Gray 174; Lester v. Palmer, 4 Allen 145.
Like opinions have been pronounced in the courts of New Hampshire, Connecticut, New York, Pennsylvania, Indiana, Wisconsin, Illinois, and Missouri, and in all these states the principle seems well established that any defense which goes to the validity of the patent is available in the state courts. In these cases, the validity of the patent was attacked upon different grounds, but we perceive no distinction in the principle involved. The patent may be void because the invention was well known before, or because it is useless or immoral, or because it is an infringement upon other prior patents, and it is no objection to the jurisdiction of the state court that the question of validity may involve the examination of conflicting patents, or the testimony of experts. It is the fact of its invalidity, and not the reasons for it, that is material. The cases are so numerous and uniform that a bare reference to them is all that is necessary. Dunbar v. Marden, 13 N.H. 311; Rich v. Atwater, 16 Conn. 409; Sherman v. Champlain Transportation Co., 31 Vt. 162; Clought v. Patrick, 37 Vt. 421; Burrall v. Jewett, 2 Paige 134; Middlebrook v. Broadbent, 47 N.Y. 443; Continental Store Service Co. v. Clark, 100 N.Y. 365; Head v. Stevens, 19 Wend. 411; Harmon v. Bird, 22 Wend. 113; Cross v. Huntly, 13 Wend. 385; Saxton v. Dodge, 57 Barb. 84, 115; Geiger v. Cook, 3 W. & S. 266; Slemmer's Appeal, 58 Penn.St. 155, 163; McClure v. Jeffrey, 8 Ind. 79; Nye v. Raymond, 16 Ill. 153; Page v. Dickerson, 28 Wis. 694; Rice v. Garnhart, 34 Wis. 453; Billings v. Ames, 32 Mo. 265.
as error either in the appellate court or in the supreme court of the state, and is not noticed in either of the opinions of those courts. Under these circumstances, it cannot be assigned as error here.

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