Marvin v. Mills Alloys, Inc.

WOOD, J. Plaintiff seeks to recover upon a contract whereby defendant agreed, upon certain conditions, to pay a royalty upon the manufacture of sand blast nozzles. By the agreement, which was in writing and dated January 28, 1930, plaintiff became an employee of defendant and assigned to defendant all of plaintiff’s developments and inventions with the exception of “an invention heretofore made by me in connection with the lining of nozzles with tungsten carbide’’. The contract provided: “With respect to the ex[550]ception above noted, which refers to a wear-resisting nozzle, it is agreed that I shall, at my own expense, file a patent application thereon, and that Mills Alloys, Inc., and its successors are herebj^ granted an exclusive right and license to make and sell throughout the world wear-resisting nozzles embodying my said excepted invention; and I am to receive a royalty for each such nozzle sold at the rate of 50 cents, from Mills Alloys, Inc. Said nozzle is characterized by the use of a wear-resisting lining preferably made from tungsten carbide; and I understand that in the event of my being finally unsuccessful in obtaining a patent for said device, all royalty payments shall cease. I understand there may be an interference contest on priority between myself and others, who have granted an exclusive license under their application to Mills Alloys, Inc.; and my right to a continuation of said royalty is contingent upon my success in any such interference proceeding.” The trial court found that plaintiff obtained a patent in accordance with the terms of the contract and rendered judgment for plaintiff. It is the contention of defendant that plaintiff failed to obtain the patent referred to in the contract and that the trial court’s findings in plaintiff’s favor are not sustained by the evidence.

Shortly after the making of the contract between the parties plaintiff applied for the patent. His application was denied by the United States patent department on November 15, 1930, on the ground that patents on the same invention had been issued to one Jaeobovics. Plaintiff was paid royalties up to January 14, 1931, at which time he was notified by defendant that no further royalties would be paid. Plaintiff persevered in his efforts with the patent office and finally obtained a patent on July 23, 1935, on a certain structure consisting of a sand blast nozzle and a holder with an inset or adapter feature. Defendant continued manufacturing the nozzle for which a patent had been denied but did not manufacture any of the instruments for which plaintiff succeeded in obtaining a patent except for the purposes of experimentation. It will be noted that according to the terms of the contract royalties were to cease in the event of plaintiff’s being finally unsuccessful in obtaining a patent on the “device” referred to in the contract. The question for determination, therefore, is whether plaintiff obtained a pat