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MARSH v. NICHOLS

decided: May 11, 1891.

MARSH
v.
NICHOLS, SHEPARD & CO.



ERROR TO THE CIRCUIT COURT OF CALHOUN COUNTY, STATE OF MICHIGAN.

Author: Fuller

[ 140 U.S. Page 353]

 MR. CHIEF JUSTICE FULLER, after stating the case, delivered the opinion of the court.

The bill was filed in the Circuit Court of Calhoun County for the specific performance by defendants below, of an alleged contract between Marsh and the plaintiff below, by which the latter was to be permitted, if Marsh obtained a patent on the improvement in question, to make, use, vend and employ said device on any or all engines made at its shops without molestation or interference, and to restrain the defendants below from asserting that plaintiff did not have the full and complete right to make, use, sell or operate the device, or that they had any right in the device to the exclusion of plaintiff;

[ 140 U.S. Page 354]

     and the decree granted the relief accordingly, which decree was subsequently amended by the Supreme Court of Michigan so as to require the defendants below to make, execute and deliver to plaintiff a release from all claim, right or demand on their part, by reason of the manufacture, use or sale of the said invention by the plaintiff theretofore or thereafter.

The Supreme Court held that the agreement set up by the plaintiff was convincingly established by the evidence; and that the suit not being brought to determine any question arising under the patent laws, but merely to enforce a contract to transfer an inventor's right, was not one in which the courts of the United States had particular jurisdiction; that the bill filed in the United States Circuit Court, March 21, 1885, being later than the one in hand, needed not to be considered; that as to the bill filed June 9, 1881, in the United States Circuit Court, and which had been dismissed before this suit was brought, but was afterwards taken to this court on appeal, which appeal was then pending, there was nothing in it to prevent the maintenance of this suit, since it was strictly a bill under the patent laws and nothing else, while this bill could not have been filed in that court between these parties, who were citizens of Michigan, and it was very questionable whether it could have been framed as a proper crossbill in that case; and the court further held that the plaintiff was not estopped by that litigation, for if the defendants had not a good patent, plaintiff was not called upon to put in any defence which admitted one, and could not be deprived of the right to vindicate in another suit such right as could not have been adequately enforced in that litigation.

It is settled that in order to justify a writ of error from this court to review the judgment of a state court, the record must show that the judgment rested upon the disposition of a Federal question.

In this case the state court did not decide any question arising under the patent laws, nor did the judgment require, to sustain it, any such decision. Neither the validity of the patent, nor its construction, nor the patentability of the device, was brought under consideration, even collaterally.

[ 140 U.S. Page 355]

     In the language of Mr. Chief Justice Taney, Wilson v. Sandford, 10 How. 99, 101, the dispute "does not arise under any act of Congress; nor does the decision depend upon the construction of any law in relation to patents. It arises out of the contract stated in the bill; and there is no act of Congress providing for or regulating contracts of this kind. The rights of the parties depend altogether upon common law and equity principles."

Under such circumstances the correctness of a decision of the highest court of a State upon the merits, based upon the existence and effect of an agreement such as that set up in this case, and not necessarily passing upon any question under the patent laws, cannot be reviewed by this court on writ of error. Dale Tile Company v. Hyatt, 125 U.S. 46. In that case it was held that an action upon an agreement in writing, by which, in consideration of a license from the patentee to make and sell the invention, the licensee acknowledges the validity of the patent, stipulates that the patentee may obtain the reissue thereof, and promises to pay certain royalties so long as the patent shall not have been adjudged invalid, is not a case arising under the patent laws of the United States, and is within the jurisdiction of the state courts; and reference is made by Mr. Justice Gray, delivering the opinion of the court, to a series of decisions sustaining that conclusion. Thus in Brown v. Shannon, 20 How. 55, it was decided that a bill in equity in the Circuit Court of the United States by the owner of letters patent to enforce a contract for the use of the patent, and in Wilson v. Sandford, 10 How. 99, to set aside such a contract because the defendant had not complied with its terms, was not within the acts of Congress by which an appeal to this court was allowable in cases arising under the patent laws, without regard to the value of the matter in controversy.

So in Albright v. Teas, 106 U.S. 613, where a suit was brought in a state court, the parties thereto being citizens of the same State, for moneys alleged to be due to the plaintiff under a contract, whereby certain letters patent granted ...


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