
    Harris et al. v. The Wallace Manufacturing Company.
    
      Because of plaintiff’s laches — Court of equity will refuse to decree ,specific performance, when — Contract to assign future improvements — In patented invention — Law of contracts.
    
    Because of plaintiff’s laches a court of equity will refuse to decree the specific performance of a contract to assign future improve- '' merits in a patented invention where the defendant, believing the later to be a wholly independent invention, not embraced in the contract to assign, and acting upon that belief and with the plaintiff’s full knowledge, devotes four years to the expenditure i ‘ of money' and effort to perfect the latter device and to create a market’ for it.
    (No. 11788
    Decided April 18, 1911.)
    Érror to the Circuit Court of Cuyahoga county.
    On June 16, 1906, the Wallace / Company brought suit in the court of common pleas against the plaintiffs in error for the specific performance of a contract whereby it was alleged that J. Harris had on June 1, 1901, agreed — imputing for brevity of statement to both parties the consequences of the acts and omissions of their respective predecessors in right and title — to transfer and assign to it all the improvements in gas burners which he might thereafter invent. This contract was an incident to and a part of an assignment to the Wallace Company of an invention covered by letters patent number 681,052, which was for an acetylene illuminating burner issued August 20, 1901. The present suit is to enforce the claim of the Wallace Company that by that agreement it became entitled to an invention ■ for a gas stove burner covered by letters patent number 704,635, issued July 1, 1902, to J. Harris and by him assigned to the Harris Company. The later patent was in -no sense an improvement upon the illuminating device embraced in the transaction of June 1, 1901, although it is now claimed by the Wallace Company that in view of the principles involved and the terms of the contract of June 1, 1901, the later invention is embraced in that .contract. Upon securing the later patent Harris, and Harris Company, made arrangements to manufacture stove burners under it, and the company continued the manufacture of the stoves thereunder with expenditures of time and money to perfect the device and secure a market for it until the beginning of this suit. During all this time the Wallace Company and persons representing it and its predecessors in title and right, had- full knowledge of the business conducted under the later patent by the plaintiffs in error, witnessed it without objection and without assertion of the right which it now alleges.. There is substantial evidence tending to prove that just prior to the purchase of the later invention by the J. Harris Company, all interest in it was. expressly disclaimed by the Wallace Company.The record presents other facts not material tothe view, we take of the case. The circuit court found for the Wallace Company and decreed the-transfer of the later invention to it in accordance with the prayer'of the petition. .
    
      
      Messrs. Foster, Foster & Hartman and Messrs. Herrick & Flopkins, for plaintiffs in error.
    The law clearly distinguishes between an agree- ‘ ment by an inventor or patentee contemporaneously with • the assignment of the patent to. assign any future improvements he may invent that improve the device to which the patent applies; and an agreement to assign any future invention the inventor may make without reference to the patent assigned.
    The law seems to be clearly established that an agreement to assign in gross a man’s future labor as an inventor will not be specifically enforced. McFarland v. Mfg. Co., 53 N. J. Eq., 649; Manufacturing Co. v. Gill, 32 Fed. Rep., 697; Machine Co. v. Bates, 87 Ill. App., 225.
    The burden of proving that it is only an improvement of the original patent is upon the plaintiff. McFarland v. Mfg. Co., 53 N. J. Eq., 649.
    It is also submitted that even though the plaintiff be entitled to the agreement of John Harris to assign future patents, and even though the plaintiff be entitled to have that claim specifically enforced under ordinary circumstances, and even though this defendant be charged with notice, actual or constructive, still, this plaintiff by its own laches and that of its predecessors in title is not entitled to specific performance. Machine Co. v. Machine Co., 32 Fed. Rep., 783.
    
      Messrs. Parsons & Fits Gerald, for defendant in error.
    The case was argued orally for the plaintiffs in error by Mr. Hopkins and for the defendant in error by Mr. Parsons.
   Shauck, J.

Counsel for the plaintiffs in error present several propositions which in view of the reasons stated, and authorities cited, would be entitled to careful consideration before the judgment under review should be' affirmed. It is urged that the-J. Harris Company is the purchaser of the later invention for value, and without notice, either actual or constructive, of the rights which the Wallace Company now assert, or of the facts out of which it is claimed that those' rights arise. The claim of the Wallace Company that there was constructive notice introduces conflicting views respecting the requirements of constructive notice of rights in property of this character.

• It is further urged that in view of the obvious differences in the devices manufactured under the two patents and the wide dissimilarity between the uses to which they are appropriate, the later should not be regarded as an improvement upon the former with'in the meaning of the contract of June 1, 1901. The claim of the Wallace Company of identity of principle introduces a subject upon which the expert witnesses are not in accord.

It is further urged that the contract upon which the original plaintiff counted, is a contract in gross to assign all future inventions, that it is not incident to a contract of employment and that it is not, therefore, such a contract as will be specifically enforced.

Respecting the evidence tending to show the Wallace Company’s disclaimer of interest in the later invention at the time of the purchase of its rights thereunder by the Harris Company, counsel for the plaintiffs in error admit the general rule ■that when' there is opportunity, the facts out! of :which an equitable estoppel is claimed to arise •must be pleaded, and that in the present-case they are not pleaded by the Harris Company to which they would be availing but only by J. Harris to whom they would be unavailing because he has assigned his interest. But since in this state o'f the pleadings the evidence to establish an estoppel was admitted without objection, is it not entitled to be considered, notwithstanding the absence of such allegations as would make it competent?

Finally, counsel for the plaintiffs in error urge that -the delay of the Wallace Company and its predecessors during four years to assert' the right, .whose enforcement it how seeks, should, upon settled principles, deny it consideration in a court of equity.. If'this point is well taken the others need riot be examined further. To this point the oft-approved statement of Lord Camden in Smith v. Clay, 3 Bro. C. C., 640, is appropriate:. “A court of equity which is never active in relief against conscience or public convenience has always refused its aid to stale demands where a party has slept upon his rights and acquiesced for a great length of time. Nothing can call forth this court into activity but conscience,- good faith and reasonable diligence.” Indeed the fundamental truth has found a condensed expression .in the familiar maxim, equity aids the vigilant, not those who slumber on their rights. The restraining influence of. that maxim may be seen throughout the administration -of equitable relief. It regards the .just and • important considerations • that rights should be asserted before, lapse of time! may have added to the-difficulty and uncertainty in’, judicial inquiry, and before acquiescence may have encouraged the adverse party to so change his position with respect to the subject that the enforcement of the right would impose unnecessary loss or hardship upon him. Certainly the rule also regards circumstances, if any appear, reasonably justifying or excusing the delay, and it regards conduct of the defendant, if any there appears, by which he may have.encouraged such delay. What delay will be fatal to the assertion of an equitablé right is not always, perhaps • not usually, to be determined from lapse of time alone. So potent with respect to that question may be the attendant circumstances that even the -delay of four years in the present case, it is conceivable might find equitable excuse. In considering- the circumstances attending the delay in the bringing of this suit, distinction between the parties and their predecessors in right may be ignored. Throughout the four years the J. Harris Company was openly operating under the second of the patents here brought into view, and expending time and money in perfecting and bringing to sale an acetylene heating device, in which it created a monopoly. Of all they did in that regard the Wallace Company was fully aware from the beginning to the end of the four years. It is not necessary, to impute to the Wallace Company a deliberately formed design to secure, without return, a market for the second device created by the labor and expenditure of the Harris Company. So widely different in appearance and application were the two devices that it probably did not at any time in the four years occur to either, party that the later patent was an improvement upon the former within the terms of the contract of June, 1901. The Harris Company was guilty of no fraud or concealment, and it can not be held to a fuller comprehension of the rights of the Wallace Company than it had. Upon the assumption we are now making, that the later invention was an improvement on the former, it must in the equitable view be regarded as the misfortune of the plaintiff if it did not know the extent of its rights,- as it must be regarded as its want of conscience if it knew of those rights and did not make an earlier assertion of them. The case presents no consideration which would justify a court in decreeing the specific performance of the contract after a delay of four years in the assertion of the alleged right. On the contrary, there are conspicuously present the unnecessary hardship to the defendant and the suggestion of insecure foundations of decrees which have given to laches a recognized place among equitable defenses.

Judgment reversed and judgment for plaintiffs in error.

Judgment reversed.

Spear, C. J., Davis, Johnson and Donahue, JJ., concur.  