Slemmer's Appeal

1. Where the question of the validity of a patent is directly involved, the jurisdiction of the United States courts is exclusive; state courts have no cognisance at law or in equity. 2. When patent rights come into question collaterally, their validity may be inquired into by state courts. 3. State courts can, at law or in equity, enforce a contract or trust whose subject is a patent, if the validity of the patent is not directly in question, and may pass upon that when it arises ex necessitate, as in defence to an action on a contract. 4. A joint patent taken out on the sole invention of one, or a sole patent on an invention of more than one, is void. 5. Equity cannot decree an assignment of a patent on the ground that the plaintiff, and not the patentee, is the original inventor. 6. Mere suggestions or assistance from others will not invalidate the right of the patentee. To effect this, the suggestions must furnish all the information to enable the alleged inventor to construct the improvement, or use the new process completely and perfectly. 7. It is not necessary to invalidate the right of the patentee, that every minute thing about the invention should be communicated, but the substance must be, 8. In a joint invention, each party should invent or discover something essential to the whole result. 9. A patent is the reward granted by the public for the skill and ingenuity of the inventor; no one else ean have the exclusive right, and he may assign it after the patent has issued. 10. Within the limits prescribed by law, the inventor may grant the use of his invention before the patent is issued, provided he does not thereby forfeit his right, or abandon his discovery to the public. 11. If one employed by another, whilst receiving wages, experiments at the expense of his employer, constructs an invention and permits his employer to use it, without compensation paid or demanded, and then obtains a patent, a license to the employer to use the patent will be presumed. 12. Under a prayer for general relief plaintiff is entitled to such relief as is agreeable to the ease made in the bill, though different from the specific relief prayed for.

Appeal from the decree of the Court of Common Pleas of . Montgomery county: In Equity. To Januai-y Term, 1868, No. 207. The hill in this case was filed April 2d 1866, by Jacob C. Slemmer, William Slemmer, and Charles Slemmer, against Henry T. Slemmer. The allegations of the bill are, that in 1860 the plaintiffs and defendant entered by verbal agreement, into partnership “ for the mining for and refining of rock oil or petroleumthe agreement was reduced to writing on the 5th of January 1861, and provided that the partners should bear the expense and share the profits equally, “ excepting experimental refinery operations, for which the company should erect and own the apparatus, but the experimenter should obtain and own the oil so experimented with.” The partners to the best of their abilities collected information on the subject of refining, the plaintiffs conveying to the defendant their “ information, ideas and opinions,” and afterwards erected a building with the necessary apparatus to test their ideas, &c., and reposed in the defendant the trust of applying them to a practical test, which he accepted: the partners “through the defendant,” tested their ideas, &c., and in the latter part of 1860 and beginning of 1861, discovered a process for making a valuable lubricating oil in addition to the other products in refining petroleum. In February 1861, the experiments were suspended to await the developments of their mining operations, but the minds of the partners continued to be devoted to improving the process of refining. In the fall of 1861 the experiments were resumed and conducted by the defendant, with the use of the partnership property, and for their benefit, “ as to the practical result and discoveries ;” on concluding the experiments, the works were carried on the equal right of all to the “ discoveries and information gained being admitted by all,” and they continued to operate the works and use the information and discoveries for the common benefit. In November 1861, a larger refinery was commenced by the firm and completed in May 1862; in this they carried on the business of refining and continued to improve the same for the common benefit. The bill then averred, that in January 1866 the defendant, without the knowledge or consent of the plaintiffs, and contrary to their known wish, procured in his individual name a patent for the before-mentioned process of refining petroleum, with intent to defraud, &c., the plaintiffs. The prayer was 1. To restrain the defendant, from any sale or use of said patent, to the detriment of the plaintiffs. 2. To decree an assignment of the patent to them and him, jointly as copartners, and to decree the payment to said firm of all moneys, and the transfer to said firm of all other valuable interests which he has acquired or may acquire by reason of the issuing to him, or the use by him, of said patent. 3. For further relief, &c. The plaintiffs filed 64 interrogatories with the bill. The agreement referred to in the bill is as follows: “ Articles setting forth an agreement verbally entered into by the undersigned in the summer of 1860, for the mining for, and disposition of, by sale or refining rock oil or petroleum in Pennsylvania and Virginia. 1. That each party shall bear an equal part of the expense, and receive an equal part of the profits resulting from the undertaking, — except experimental refining operations, for which the company erect and own the apparatus, but the experimenter to obtain and own the oil so experimented with. 2. Nothing to be undertaken without the assent of all parties; but a work commenced to be prosecuted, unless all parties agree to suspend or abandon. 3. Each member of the company shall advance money for company purposes, as he may be able to do so and the company desire to receive it, said advancement to bear interest from the date thereof; but a balance sheet shall be struck on the first of January in each year, or oftener if desired by three members, wherein the amount due by each deficient member shall be covered by a cash payment, or by a note to the member whose advance is in such excess, which note shall, at the desire of the holder, be endorsed by all the members. 4. If any member desires to leave the company, he shall be permitted to do so upon agreement between all the members as to the value of his interest in the company, which shall be paid him by the remaining part of the company, by note or cash, or by his payment to the company of the sum that may appear to be due from him to equalize his part of the expenses not theretofore borne by him, such payment to be by note or cash. Where the parties cannot mutually agree as to such value or amount to be paid as above provided, such amount shall be designated by a disinterested party, to be selected as arbitrators are usually chosen. No appeal from such arbitrament to be authorized. 5. A final settlement of company affairs may be demanded by the concurrent action of any three members, when the assets and debts shall be divided in a similar manner to that set forth in the preceding paragraph. 6. In case of the death of a member, his interest in the company shall not be subject to sale, but may be withdrawn at the request of his legal representatives, or of the remaining members, in the same manner as provided for the voluntary retirement of a member by the fourth paragraph.” By his answer the defendant admitted obtaining the patent, and averred, “the validity and effect of my said patent and of my exclusive claims and rights under the same, and the allegations and matters in relation thereto contained in the said bill, are not cognisable by this court,” and asked that the bill be dismissed. He further answered, averring that the agreement of January 5th 1861 was merged in another of the 5th of June 1862, and that, with all other agreements, was abrogated by the plaintiffs by a written communication of January 25th 1866. The partners purchased oil-land leases in Yenango and Crawford counties, and the business of mining oil proving unprofitable, the plaintiffs abandoned it. The plaintiffs had no idea before November 1861 of engaging in refining oil, and were ignorant of the method of refining; in 1860 the defendant conceived the idea of making from petroleum a better oil than any in use; erected a small experimental refinery at his own' expense, and succeeded towards the end of that year without any aid from the plaintiffs. He then proposed to them to form a partnership for refining oil as well as boring for it, he to continue his labors at his refinery at his own expense in the purchase of crude oil, and to enjoy its profits ; this resulted in the verbal agreement embodied in the article of January 5th 1861. Having continued to entertain the idea of erecting a large refinery elsewhere with the plaintiffs, or, if they declined, without them, he purchased in October 1860 a large lot in Norristown, and made preparations for erecting a refinery. The plaintiffs having been unsuccessful in oil mining in the West, agreed to join him in the business of refining, and they entered into the agreement of June 1862. The agreement was between the defendant of the first part and the plaintiffs and defendant, “ trading under the name and style of ‘ Slemmer Brothers,’ oil refiners, of the second part.” It recited that the firm had erected on the defendant’s premises “ in and through his name,” works for refining petroleum ; the defendant thereby leased to the firm a lot at the corner of Ford and Egypt streets, Norristown, for fifteen years- from April 1st 1862, at f200 per annum; the parties agreed that the lease might end at any period within fifteen years if the firm should desire it in consequence of closing their business as oil refiners, and at the end of fifteen years or earlier termination of the lease, the defendant should purchase all the buildings, &e., erected on the premises at a price to be agreed upon, or, if they could not agree, the price to be fixed by three arbitrators, “ selected in the usual manner,” and the firm agreed to give up the premises when the lease should terminate, &o. Under this agreement the firm continued the business of refining oil until,.about January 1866, when the plaintiffs planned to get the refining business into their own hands, and dissolve the partnership, which they attempted to carry out by terminating the lease, purchasing other lands on which to erect a refinery for themselves, threatening to take away the machinery of the existing works for their own use, refusing to buy crude oil, voting themselves large salaries out of the firm funds, &c., and doing other things which rendered the continuance of the partnership impossible. The defendant further averred that the discovery of the process for making the oil was solely his own, and so often acknowledged by the plaintiffs. He denied that he acted in trust for them or that they gave him any ideas, &c., or assisted him in the matter in any way; or that the discovery was to accrue for their benefit; averred that by his permission they were to share in the profits as long as the partnership continued, which was the whole extent of their interest. The article patented is a superior article to that made at the refinery, and was not perfected until a few days before his- application and after the plaintiffs had given him notice of the abrogation of all the agreements and of the dissolution of the firm. The defendant answered the interrogatories categorically; they do not involve any matters making it necessary to give them. The written communication of January 25th 1866, from the plaintiffs,, referred to in the answer, is as follows :— “Norristown, January 25th 1866. “ Dear Brother — Sufficient time having elapsed since our annual meeting (and the extraordinary steps you have taken in regard thereto), for a calm and serious reflection, we deem it necessary to again bring the subject-matter before you in a decisive manner, and ask your determination in writing. “ In the first place we say to you that under no consideration will we continue the business upon the basis heretofore carried on. The only form in which we will consent to continue the firm is, a total ‘abrogation of all agreements heretofore made, and a new one formed, in which each member shall be equally interested in the realty (as our previous proposal), and share equally the labors of conducting the business, or its full equivalent in salary. “ You failing to accede to this, we propose: “ To sell to you all our interests in the works, together with all the oils, machinery, &c., on hand, with credits and debits (except the last undrawn annual dividend which we claim), for the sum of Fifty Thousand Dollars cash upon delivery of the works. “ Should you refuse all of the foregoing, our only alternative will be to conduct the business in the future, as will best promote the interests of the firm, with a view to an easy, just and equitable distribution of our property, and the dissolution of the firm, and surrender of the lease at as early day as practicable, upon your complying with its requirements.” The patent was dated February 27th 1866; it was for “a new and useful improvement in the manufacture of lubricating oil.” The court having overruled so much of the defendant’s’ answer as denies the jurisdiction of the court, appointed Joseph W. Fornance examiner. From the plaintiffs’ evidence it appeared that the defendant had, in the latter part of the year 1860, been experimenting with great assiduity upon the refinement of petroleum, and for that purpose put up a small refinery on Strawberry alley, in Norristown. At this refinery Charles and Jacob worked, as well as the defendant. On one or more occasions, when defendant and the other members of the firm were present, a witness advised them to get a patent, and one of the firm said, pointing to his head, and in hearing of the defendant, “the best patent is’ here.” The defendant gave evidence that he did all the experimenting; when the other partners'were working in the refinery they took their instructions from him. In the correspondence of the partners with each other and with others, which was very voluminous, the defendant was recognised as the experimenter, and the experiments spoken of as his. A circular issued by the firm speaks of the oil being “manufactured under the eye of our experienced chemist, and by a process of his own.” There was a very great mass of testimony taken, some of it cumulative of the statements given above, and much irrelevant to the matters in issue in the case. ■■ The master found the creation of the partnership in 1860, and that the object was mining for and refining petroleum; that shortly after the formation of the partnership, an experimental refinery built by the defendant was adopted by the firm; at it, while the plaintiffs were managing oil wells, the defendant, as agent of the firm, made experiments in order to discover a mode of profitable refining. In this the defendant was much assisted by information procured and services rendered by plaintiffs. The experiments were successful, producing both illuminating and lubricating oil of good quality. The defendant, on the 30th of January 1866, filed in his own name, in the patent office, a petition for a patent for the process of manufacturing double refined lubricating oil, for which a patent was afterwards granted to him. “ The defendant, in his. experiments, was much assisted by information procured and labor furnished by the plaintiffs. And after the operations were begun at the new refinery, the double refined lubricating oil was much increased in quality and value', by improvements made by plaintiffs in the process of manufacture. The manufacture of the double refined lubricating oil afterwards became the main business of the firm. The process of making the double refined lubricating oil was a secret known only to the members of the firm, and they had agreed among themselves not to take a patent for it. The process, as described in the specification in the letters patent, appears to differ in no material respect from that described as being the process of manufacture at the refinery prior to January 1866. If, however, there is, in the process described in the specification, any substantial improvement, the improvement must have been the result of experience and experiment prior to January 25th 1866; for the petition for the patent was filed at Washington but five days after date, and defendant had no apparatus to perfect such improvement in the mean time. The company continued in the free use and enjoyment of the process of manufacture, their right thereto being unquestioned and freely admitted, from the commencement of operations until January 1866.” From the above stated facts the master found the following conclusions:— “ 1. That the discoveries in refining oil made by defendant at the experimental refinery, together with the whole process of manufacturing the refined oils, as afterwards used by them, were the property of the company. “2. That if the copartnership be not dissolved, the plaintiffs are entitled to an injunction restraining the defendant from the sale or use of said patent to their detriment; also to a decree assigning said patent to them and said defendant jointly as copartners. “3. But if the copartnership be dissolved, then said patent, being part of the assets of the company, is subject to such disposition as would best contribute to the interest of all parties concerned; and as it is not to the interest of these plaintiffs that said patent should be sold, they are, in case of a dissolution, entitled to a decree of court assigning three-fourths of said patent to them respectively as individuals.” Both parties filed exceptions to the report. The court (Chapman, P. J.) confirmed the report, and decreed, December 16th 1867, “that the defendant do forthwith convey to the firm of Slemmer Brothers the patent mentioned in the bill of the plaintiffs, dated February 27th 1866, and it is further ordered and decreed that the said defendant be and he hereby is perpetually enjoined against using or selling the said patent to the detriment of the-said plaintiffs.” From this decree the defendant appealed, and in a number of specifications assigned the decree for error.