Court Opinion

ID: 5340749
Source: CourtListenerOpinion
Date Created: 2022-01-08 05:54:58.01018+00
Date Added: 2024-06-11T08:29:33.967161
License: Public Domain

Martin, P. J. (dissenting).
The defendants appeal from an order denying their motion to dismiss the complaint upon the ground (1) that it fails to state facts sufficient to constitute a cause of action; (2) that the court has no jurisdiction of the subject of the action, and (3) that there is another action pending between the same parties for the same cause.
The complaint alleges that the defendants obtained a United States patent for a certain seam upon false statements made to the Patent Office, well knowing that before the alleged invention of said seam by the defendants it had been for many years in public use by the plaintiffs, competitors of the defendants, and by many other persons. It is further alleged that the defendants after the granting of the patent informed the entire industry of the granting thereof and threatened with suit all those who purchased from any one other than the defendants. It is then alleged that the defendants, well knowing the patent to be invalid and that it could not stand the test of an adjudication by a court of competent jurisdiction, seek to capitalize unlawfully ownership of this invalid patent as far as possible before the patent is invalidated, to the damage of these plaintiffs and to the advantage of the defendants. Damages in the sum of $100,000 are demanded. No injunctive relief is sought.
This court is without jurisdiction to entertain this action, since it is based entirely upon the alleged invalidity of defendants’ patent and directly involves that issue.
The case of Pratt v. Paris Gas Light & Coke Co. (168 U. S. 255), which is referred to as sustaining the complaint herein, appears *640to fall within the class of cases where the State court has jurisdiction because the validity of the patent is not directly involved. The court in that case stated that “ The only Federal question presented by the record in this case turns upon the admissibility of evidence tending to show that the patents issued to the plaintiffs Pratt and Ryan were infringements upon a prior patent issued to Springer. Plaintiffs contend that the State court, by admitting such testimony, thereby assumed jurisdiction of a patent case, in violation of Rev. Stat. § 711.” The court then pointed out that the action was not brought to test the validity of plaintiffs’ patent, to recover damages for their infringement or to enjoin their use by the defendant, but, on the contrary was an ordinary action for the price of a machine, “ a patented machine it is true, but none the less subject to a common law action to recover its value.” The court further stated that “ No mention is made of a patent in the declaration and the contract having been executed, the action was properly brought upon the common counts.”
The defendant in Pratt v. Paris Gas Light & Coke Co. set up a contract on the part of the plaintiffs to hold the defendant harmless in any suit brought for infringement, alleging that the patents were void and that plaintiffs had failed to defend suits for infringement, whereby the agreement was breached and the consideration for the sale had failed. The court held that under these circumstances the question of the validity of the patent was collateral to the action and that its determination did not deprive the State court of jurisdiction.
A similar case is that of New Era Electric Range Co. v. Serrell (252 N. Y. 107), also relied upon as sustaining the complaint. In that case the assignment of title to a patent was involved. It was held merely that title to the patent might be determined irrespective of its validity or invalidity.
The distinction between the class of cases where the State court has and has not jurisdiction is made clear in Continental Store Service Co. v. Clark (100 N. Y. 365, 368), where the court said:
“ It is very apparent that cases may arise upon contracts relating to patents and their validity, which are especially within the power and jurisdiction of the State courts, but it by no means follows necessarily that this jurisdiction confers upon the State courts the right to adjudicate and determine questions arising as to infringements made upon rights and privileges which are secured by patents issued by the government. The interpretation of the contract, the effect to be given to its various parts, and even the right to the patent, may well be the subject of consideration within the courts of the State, while any interference beyond this is in contravention *641of the general rule that in such an action the jurisdiction rests exclusively within the courts of the United States. In the case now considered the facts which would have been disclosed upon the trial would have authorized the court to determine as to the title of the parties claiming the patents, and to adjudicate in reference to any violation of the contract which affected their interest, except so far as it might interfere with the infringement of the patents and the interests conferred by the same upon the patentee and his assignee.
“ It cannot be said, we think, where a suit is brought upon a contract relating to a patent, where it is sought to prevent an infringement upon the rights of the patentee, that the case presented arises exclusively under a contract and not under the patent laws. It may arise under a contract so far as an interpretation of the same is required and demanded, but where it is sought in addition to prevent an infringement of the patent and by injunction to restrain the defendant from an invasion of the plaintiff’s rights in the use of the patent, it cannot be claimed that it does not arise under the patent laws, and that, by seeking relief against an infringement upon the rights of a patentee, there is no interference with the jurisdiction conferred upon the courts of the United States in such a case.”
The rule thus appears to be that where the very basis of the action depends upon the validity or invalidity of a patent, the State court is without jurisdiction.
There would seem to be no distinction in principle between a case where a patent is alleged to- be invalid because the patented device had been in public use prior to the granting of the patent and a case in which the claim is that the patent is invalid because subordinate to a prior patent. There is in each case directly involved a case arising under the patent laws of the United States.
Assuming the correctness of the aforesaid premise, the decision of Hovey v. Rubber Tip Pencil Co. (57 N. Y. 119) is controlling. That action was brought to restrain defendant from publishing and circulating a circular or notice to the injury of plaintiffs’ business, and for damages caused by said circulation. The complaint alleged that plaintiffs were the owners of letters patent, pursuant to which they were engaged in the manufacture of certain pencils; that defendant, with intent to injure the plaintiffs, prepared and published a circular which stated that defendant was the owner of certain letters patent and had exclusive rights to manufacture certain pencils, and cautioned all parties against purchasing such pencils unless manufactured under its authority, expressing the intent to prosecute all infringements. The answer, among *642other things, set forth certain letters patent owned by defendant and alleged that the pencils manufactured by plaintiffs were an infringement thereof. Among its conclusions the court held that to decide whether the defendant had the exclusive right would call for a decision as to the validity of its patent and the validity of plaintiffs’ patent. It also called for a decision whether one patent was subordinate to the other and whether there was an infringement, the decision of which questions, it was held, rested exclusively in the United States Circuit Court. The court (at p. 125) said: “ The case before us is founded upon the right of the plaintiffs under the patent law. To that right they allege an injury by the act of the defendant. The defendant admitting the fact attributed to it, justify it under rights which it claims under the same laws. To dispose of the question requires the direct decision of the court upon these rights, with a view to ascertain, in the language of the statute, whether there has occurred a violation^ of the right of an inventor as secured to him by the laws of the United States. If the plaintiffs’ patent is invalid, they have no standing in court founded upon it. If the defendant’s patents are valid, it was in giving the notice complained of, in the exercise of its clear civil right to print the truth and circulate it even though it injured the plaintiffs. Of such a suit no case decides or intimates that the State courts have jurisdiction.”
In the case at bar, therefore, it is not an answer to claim that the State court, having jurisdiction of an action in unfair competition, may determine the question of the validity of the patent of the defendants. Under the facts alleged in the complaint there could be no unfair competition if the defendants’ patent is valid. If defendants have a valid patent, they have the legal right to advertise that fact, and it would follow that there is no basis for an action at law for money damages because of the exercise of that right.
The order appealed from should be reversed, with twenty dollars costs and disbursements, and the motion to dismiss the complaint granted, with ten dollars costs.
Merrell, J., concurs.
Order affirmed, with twenty dollars costs and disbursements, with leave to the defendants to answer within twenty days after service of order upon payment of said costs.