Court Opinion

ID: 6833864
Source: CourtListenerOpinion
Date Created: 2022-07-23 19:59:58.735063+00
Date Added: 2024-06-11T16:04:38.373741
License: Public Domain

HOUGH, Circuit Judge
(after stating
the facts as above). The legal difficulties pressed upon us in this cause vanish, we think, when the relation of the parties is noted, the meaning of the contracts between them (of 1907 and 1913) declared, and the sequence of relevant occurrences established. When application 460,426 was abandoned in 1915, defendant was in a fiduciary relation to plaintiff, because he was the paid servant of plaintiff’s attorney, his act was that attorney’s act, and the extremity of confidence reposed by client on counsel is too well known to need emphasis.
The contract of 1907 was not only for the acquisition by plaintiff of the future fruit of defendant’s brain, but was of employment on a stated monthly stipend for a period that overpassed the date of filing the above application for patent. The covenant of the contract was to convey to plaintiff, not merely applications for patents, or the patents themselves, but “any and all inventions” relating to the described art, which defendant might devise within the agreed period. The contract of 1913 is a definite conveyance (inter alia) of the invention disclosed by application 460,426, and a compliance with the covenants of the agreement of 1907.
This earlier contract contains the proviso that “the subject-matter of all abandoned applications for letters patent of the United States shall become the property of the inventor [this defendant] immediately upon their abandonment.”
The material events are these: In 1915 the person in active and actual charge of the prosecution of application 460,426 was this defendant, and the abandonment thereof was his act. We believe that he did not at the time consider the abandoned matter of any importance, and think the best evidence of that fact is that he forgot what he had done, and for some time thought that plaintiff controlled his embodiment of the broad idea of amplification in the train control art.
On these facts, defendant insists that, since the application was undoubtedly abandoned, the subject-matter became his under the terms of the 1907 contract, to which that of 1913 was but a supplement, hot a substitute; wherefore he is entitled to keep and use that matter, unless his acquisition was the result of his own fraud. But fraud is never presumed, must be proven, and is not proven by this record. At most negligence is shown, and negligence furnishes no ground for relief on a bill of which the gist or gravamen is fraud, and that is the basis of this bill.
To these contentions we cannot agree. To say that a bill or declaration is for fraud, or sounds in fraud, means that it rests on actionable wrongdoing; i. e., without the dolus no cause of action is stated. This bill asserts title to the invention in question under the contract of 1913, and, unless by new matter that claim is rebutted, it is good.
The effort at rebuttal rests first on abandonment by oversight only, which, however, is alone insufficient, for abandonment of application would not per se divest title to invention. Accordingly the revesting clause of the 1907 agreement is used to supplement the argument; but this involves defendant’s agreeing that he was negligent, and then trying to profit by his own negligent act, and this he cannot do, because this endeavor on his part is a fraud — not a fraud charged by plaintiff, but arising from defendant’s act in making such a defense.
The true meaning of the revesting agreement is, we think, plain, viz.: That applications which plaintiff decided to abandon, and gave orders to abandon, went back to defendant. Since the bill rested on title to the invention, however, the burden of showing an intentional abandonment by plaintiff was on defendant, and, as first ’ above indicated, defendant has utterly failed to bear that burden.
So, reduced to its lowest terms, and the terms most favorable to defendant, this ease shows a servant, owing uberrimam fidem to his master’s client, seeking to profit by his own negligence in throwing away what he then thought a pebble, but subsequently found to be a diamond. He cannot keep the diamond.
Decree affirmed, with costs.