In 1871, L. & B., being partners, commenced the manufacture
of hydraulic elevators in Cincinnati. S. was employed by them as
engineer and draughtsman at a fixed salary of $1,200 per annum.
While in their employ, and while using their tools and patterns, he
invented a stop-valve in 1872 which was patented in February, 1876.
In 1876, the partnership was dissolved, and a corporation was
formed, called the L. & B. Company, in which the same business
was instantly vested in the same interests, and remained there.
Meanwhile, S. ceased in 1874 to serve L. & B. as engineer and
draughtsman, and went into their employ as consulting engineer at a
salary of $2,000 per annum. The duties of the latter office did not
require him to reside in Cincinnati. He served the partnership in
the same capacity up to 1884. The partnership with his knowledge
used his valve in the elevators constructed by them until its
dissolution, and after that the corporation used it in the same way
and with the like knowledge. In 1884, S. severed his connection
with the corporation. During all this time, he made no claim for
remuneration for the use of his patent, and when asked why he had
not, replied that he did not desire to disturb his friendly
relations with the L. & B. Company. In 1884, he filed this bill
in equity, with the usual prayers for an accounting and for an
(1) That, on authority of McClurg v.
1 How. 202, it might be presumed that S.
had licensed L. & B. and the L. & B. Company to use his
(2) That on the authority of Solomons v. United States,
137 U. S. 342
might be presumed that S. had recognized an obligation, flowing
from his employment by the partnership and by the corporation, to
permit them to use his invention.
(3) That he was guilty of laches in allowing so long a period to
elapse before asserting his rights.
(4) That the excuse he gave for not asserting them was entitled
to less favorable consideration by a court of equity than if his
conduct had been that of a mere inaction.
In equity. The case is stated in the opinion.
Page 150 U. S. 194
MR. JUSTICE SHIRAS delivered the opinion of the Court.
On November 26, 1884, Joseph M. Locke, this defendant in error,
filed a bill in the Circuit Court of the United States for the
Southern District of Ohio alleging infringement by the Lane &
Bodley Company, a corporation of the State of Ohio, of letters
patent No. 173,653, dated February 15, 1876, for an improvement in
stop valves, issued to said Locke as inventor. The bill contained
the usual allegations, and prayed for an injunction and other
The answer, filed on January 24, 1885, denied that Locke was the
original inventor, because the same devices were shown in certain
specified earlier patents and publications; denied that said
invention was not, for more than two years prior to the application
for letters patent therefor, in public use or on sale, but averred,
on the contrary, that said apparatus was well known and in public
use in the United States for more than two years prior to said
application. The answer also contained a history of the original
development of the alleged invention by Locke while in the
employment of the firm of Lane & Bodley, and averred a
continuous use and sale by defendant of the alleged devices, with
the knowledge and consent of said Locke, in such circumstances as
to show the acquisition by Lane & Bodley of an indefeasible
license to use the patented devices. By an amendment to the answer,
filed on February 12, 1886, there was set up as an additional
defense an equitable right in the patent based upon a written
agreement signed by said Locke. The answer also averred that said
license and right had become vested in the corporation defendant.
The case, having been put at issue, was proceeded in so that the
circuit court found in favor of the complainant, and after
reference to and report by a master, rendered a final decree
against the defendant for the sum of $3,667.37, with interest and
The record shows us that the court below held that the patent to
Locke had not been anticipated, but was valid in all
Page 150 U. S. 195
its claims; that the defendant's answer in respect to its
allegations as to Lane & Bodley's right to a license or to an
interest in the patent was not sustained by the evidence, and that
even if Lane & Bodley had such a right, it had not passed to
the defendant corporation, under the doctrine of the case of
Hapgood v. Hewitt, 119 U. S. 226
Although the defendant has assigned error to the holdings of the
court below in these several particulars, we are relieved from
considering the contentions as to the validity of the patent or its
anticipation by other patents by the election of the counsel for
the plaintiff in error to confine his case to the effect of the
pleadings and evidence as establishing an equitable right or
license in the defendant company to use the patented invention.
If the court below were right in thinking that the case of
Hapgood v. Hewitt, 119 U. S. 226
applicable, under the facts of the present case, any further
inquiry on our part would be unnecessary.
In that case, a corporation employed Hewitt as superintendent,
who, while in such employ, invented a plow, upon which a patent was
granted to him. Having acquired a license growing out of the
circumstances of the employment, the corporation was afterwards
dissolved, and all its assets passed into the hands of a receiver
in liquidation. Subsequently, and under the laws of another state,
a new corporation was formed, to which the receiver of the old
corporation assigned certain assets, among which, as was claimed,
was the aforesaid license. This Court held that whatever right the
employer had to the invention by the terms of Hewitt's contract of
employment was a naked license to make and sell the patented
improvement as a part of its business, which right, if it existed,
was a merely personal one, and not transferable, and was
extinguished with the dissolution of the corporation. This ruling
was based on two previous decisions, Troy Iron
& Nail Factory v. Corning,
14 How. 193, and
Oliver v. Chemical Works, 109 U. S.
. In both these cases, there were formal assignments,
without having words or clauses in them showing that they were
meant to be assignable, and the holding
Page 150 U. S. 196
of the court was that the contracts themselves were merely
personal licenses, and did not import an intent to extend the right
to an executor, administrator, or assignee, voluntary or
We see no reason to disturb those cases, yet we do not feel
compelled to extend their ruling to cover the present case.
It may well be that an express license, set forth in terms, is
not assignable unless it is so provided in the instrument. And so
there would seem to be no privity, in law or in equity, between a
defunct corporation of Missouri and a corporation of the State of
Illinois. In none of those cases was there evidence showing a
recognition, implied or express, by the patentee of any right in
In Hammond v. Mason & Hamlin Co., 92 U. S.
, it was held that the nonassignability of a license
may be waived if the patentee ratifies the transfer of the license
by otherwise treating the assignee as the licensee was entitled to
In Lightner v. Boston & Albany Railroad,
338, it was held that a license, though not usually transferable,
is transmissible by succession to a corporation formed by the union
of two licensees succeeding to the obligations of both, for the
reason that the consolidated company is the successor, rather than
the assignee, of the original companies.
In the present case, it clearly appears that the company was
organized upon the same basis as the firm; that the business of the
company was to be the same as that carried on by Lane & Bodley,
and to be carried on on the same premises; that the entire property
and assets of the firm and its liabilities and obligations were
devolved upon the company. Locke himself, in his evidence,
repeatedly speaks of the Lane & Bodley Company as the successor
to the firm.
And if the defendant's version of the facts is accepted, the
acts and circumstances constituting the license and its
consideration were begun by the firm of Lane & Bodley, and
continued by the corporation, participated in and ratified by Locke
himself, to the date of the suit.
Of course, in testing the position of the court below that even
if the alleged agreement that the firm of Lane & Bodley
Page 150 U. S. 197
should have an interest in the patent, or the facts out of which
a license to use would arise were proven, the plaintiff would
nevertheless have no right to recover against the Lane & Bodley
Company, we pronounce a legal conclusion on the facts asserted and
put in evidence by the defendant.
If, then, the allegations of the defendant in this case are
accepted as true, we do not regard the case of Hapgood v.
as an obstacle to the defense asserted.
We do not consider it necessary to enter minutely into the
history of the case, nor does our view compel us to ascribe to
either of the parties or their witnesses any intentional departure
from the truth. We prefer to put our decision upon facts which, if
not conceded, appear to have been clearly established.
The firm of Lane & Bodley were manufacturers of engines and
machinery at Cincinnati in 1871. In that year, they began to
manufacture hydraulic elevators, and on November 21 they employed
Joseph M. Locke, as designing engineer and draughtsman, to assist
them in the development and construction of elevators and other
machinery at a salary of $1,200 per year. He continued in the
employment of the firm at Cincinnati until some time in 1874, when
he went to Salt Lake City, where he remained, with frequent visits
to Cincinnati, until the latter part of 1884. During this period,
he was more or less continuously in the employ of Lane &
Bodley, and of the Lane & Bodley Company, a corporation formed
in 1876 to carry on the same business and in the same interests, as
consulting engineer, on a salary of $2,000 per annum, with a
contribution of $20 per month for office rent.
While in the employ of Lane & Bodley at Cincinnati, Locke
made many efforts to devise a stop valve to be used in the
elevators. That he was experimenting in this direction was well
known to his employers.
The testimony of Lane and of Locke, while contradictory as to
the extent in which Lane contributed to the perfection of the
invention, clearly shows that many futile attempts were made in the
workshop of Lane & Bodley, involving the use of their tools and
patterns, before finally, sometime in 1872, the valve that was
subsequently patented was produced, and
Page 150 U. S. 198
it went immediately into use by Lane & Bodley, and was used
by them and the Lane & Bodley Company continuously, with the
knowledge of Locke, from that time till the bill was filed in
In February, 1874, Locke left the works of Lane & Bodley,
and on May 27, 1874, he made application for the patent. It does
not appear that Lane & Bodley knew of this application till the
letters patent were granted, February 15, 1876. While Locke was
living in Salt Lake City, and in the receipt of a salary from the
Lane & Bodley Company -- as he himself admits at least from
1880 to 1884 -- he placed an order for the company from the Horn
Solver Smelting Company for a hydraulic hoister containing the stop
valve according to the Locke patent, and he was aware of several
instances of elevators sent to that part of the country by the
defendant in which was used the patented valve. On August 30, 1884,
Locke wrote a letter to the Lane & Bodley Company severing his
connection with them, and on November 26, 1884, filed his bill.
There was evidence on behalf of the defendant tending to show
that an actual agreement had been entered into between Locke and
Lane & Bodley whereby the latter were to have a interest in any
and all improvements in the line of their manufacture which might
be made by Locke during the period of his employment by the firm,
and a right on certain terms to have the exclusive ownership of
such patents as should be issued for inventions so made, and the
defendant set up such an agreement in an amendment to the
But we agree with the court below in thinking that such
agreement was not made out by the evidence; and indeed that view of
the case has not been pressed in this Court. The defense really
relied upon is that of a license arising upon implied contract
based upon the relation of the parties and the nature of the
In the case of McClurg v.
1 How. 202, the facts were very similar
to those of the present case. Harley was employed by the defendants
at their foundry, receiving wages from them by the week. While so
Page 150 U. S. 199
he claimed to have invented the improvement patented. After
several unsuccessful experiments, he made a successful one in
October, 1834. The experiments were made in the defendants'
foundry, and at their expense. Harley continued in their employment
on wages until February, 1835, during all which time he made
rollers for the defendants, using his method. He often spoke of
obtaining a patent, and finally, on the 3d of March, obtained a
patent. While Harley continued in the defendants' employment, he
proposed that they should purchase his right, which they declined.
He made no demand on them, and gave them no notice not to use his
improvement, till, on some misunderstanding on another subject, he
gave them such notice, left their employment, and assigned his
patent to the plaintiffs, who brought an action for infringement
against the defendants.
The trial judge instructed the jury that if the foregoing facts
were found to be true, they would fully justify the presumption of
a license, a special privilege, or grant to the defendants to use
the invention; that such facts amounted to "a consent and allowance
of such use," and show such a consideration as would support an
express license or grant, or call for the presumption of one, to
meet the justice of the case, by exempting them from liability,
having equal effect with a license and giving the defendants a
right to the continued use of the invention.
These instructions received the approval of this Court, and the
judgment of the circuit court was affirmed.
In Solomons v. United States, 137 U.
, this subject again came before this Court for
its consideration, and it was held that
"when a person in the employ of another in a certain line of
work devises an improved method or instrument for doing that work
and uses the property of his employer and the service of other
employees to develop and put in practicable form his invention, and
explicitly assents to the use by the employer of such invention, a
jury or a court trying the facts is warranted in finding that he
has so far recognized the obligations of service flowing from his
employment and the benefits resulting from his use of the property
as to have
Page 150 U. S. 200
given to such employer an irrevocable license to use such
and the case of McClurg v. Kingsland
was affirmed and
The facts of the present case fairly bring it within the
doctrine of these cases. There is, however, another feature in this
case not present in the cited cases, which is of great
significance, and that is the long period that the plaintiff
permitted to elapse before he resorted to his legal remedy. The
invention, as we have seen, was perfected in 1872, and was
immediately and from that time continuously used by Lane &
Bodley and by the Lane & Bodley Company. The suit was brought
on November 26, 1884, a period of twelve years. In the interim, the
plaintiff continued, for most of the time, in the defendants'
employment, and admits that he knew that Lane & Bodley and the
Lane & Bodley Company were using the patented valve. He does,
indeed, claim that in 1875 and 1876, he had conversations with Lane
in which he demanded an arrangement or settlement for the use of
his invention, but he admits that in 1876, Lane repelled him and
refused to talk upon the subject. According to Locke's own account,
he dropped the matter, and continued to acquiesce in defendants'
use of his patent and to receive a salary from them for a period of
When asked to account for his conduct in this respect, his
explanation was that he felt convinced that any demand he might
make would have been rejected, and thus his friendly relations with
the defendants be disturbed.
On cross-examination, the following question was put to him:
"Did you in any of your letters to Lane & Bodley refer to the
matter of the valve, and ask for any recognition or adjustment of
your claim?" To this his answer was:
"I did not, for the reason that I had the impression in my mind
from the interview with Colonel Lane at Philadelphia that Lane
& Bodley were not inclined to fulfill promptly the verbal
understanding of the proceeding year, or at least would attempt to
open negotiations for more favorable terms, and I did not deem it
prudent to open up the matter until I was in a position as for time
and means to carry forward claims to
Page 150 U. S. 201
my right, which conditions I was in hope would occur from time
to time, but such conditions, in my judgment, were not realized at
an earlier date than 1884."
Again the following question was put to him by his own
"You have been asked substantially why you continued your
amicable relations with the company from the west after this
evasion of Col. Lane in Philadelphia in 1876. It was also pointed
out that you had not mentioned the matter to them from there.
Pleased explain why this was so."
His answer was:
"I did not regard it as either right or prudent to have other
than amicable relations with them so long as they had not actually
refused to comply with the agreement of April, 1875. I did not
write to them so as to bring up the issue, as I had neither the
time nor the means at my command to enforce my rights in case of
the refusal to comply with their agreement at that time."
The existence of any agreement in 1875 was strenuously denied by
Col. Lane, but, conceding the plaintiff's version of the disputed
facts to be true, he yet permitted eight years more to elapse
before he made a hostile move. The "amicable relations" he desired
to have continued were evidently those out of which he was
receiving a salary of $2,000 per annum, a sum larger than he would
have been entitled to if he had been in receipt of a royalty.
Courts of equity, it has often been said, will not assist one
who has slept upon his rights and shows no excuse for his laches in
asserting them. The plaintiff's excuse in this instance, that he
preferred for prudential reasons to receive a salary from the
defendant, rather than to demand a royalty, is entitled to a less
favorable consideration by a court of equity than if his conduct
had been that of mere inaction.
We are therefore of opinion that the decree of the court below
Reversed, and the record remanded to that court, with
directions to dismiss the bill of complaint, and it is so