Citations
- 43 F.2d 408
Full opinion text
CAMPBELL, District Judge.
This is an action brought by Dry Ice Corporation of America, to compel the transfer by the defendant Josephson to it of certain inventions made by him, as they allege he is bound to do by the terms of a contract made by Herman H.. Moore and Walter S. Josephson to Prest-Air Coloration, plaintiff’s predecessor.
The plaintiff is a Delaware corporation. Herman H. Moore is a resident of Canada, and has never been served with process, and the court has not acquired jurisdiction as to him.
The defendant Walter S. Josephs.on is a resident of this district, and has appeared and answered, and the action has proceeded against him alone.
The defendant Josephson is an engineer and was engaged in the general practice of that profession from 1912 to 1922.
Herman H. Moore is a-doctor of medicine, who at all the times mentioned herein resided and still resides in Canada.
On an application filed in January, 1920, by Wallace Ateheson Delahey and George Whitefield Delahey, a patent subsequently issued on the so-called power bottle, items 1 and 3 of schedule A of the contract on which the suit is based.
This power bottle patent was in the Deco Metal Products Company of Toronto, and had been commercialized to some extent when in 1922 the said Dr. Herman H. Moore acquired' from said company, for $5,000, an option to purchase that patent for $50,000.
Dr. Moore then met the defendant Josephson, who was a consulting engineer as well as engaged in manufacturing, and consulted Mr. Josephson about that patent, and Mr. Josephson, after testing the bottle for about two months, was so impressed with the commercial possibilities of the patent that he joined Dr. Moore in the purchase of said patent, in Dr. Moore’s name, for $50,000.
On May 23, 1922, Mr. Josephson and Dr. Moore, having acquired said patent, formed the Prest-Air Corporation.
They did not transfer the said patent to the Prest-Air Corporation, but Dr. Moore entered into a license agreement with the Prest-Air Corporation covering said patent, in consideration of a minimum royalty of $50,000 a'year.
Mr. Josephson and Dr. Moore then formed a corporation known as M. & J. Interests, Inc., to which corporation Dr. Moore transferred the said patent and the license contract with Prest-Air Corporation.
All of the capital stock of the Prest-Air Corporation was issued to Mr. Josephson, Dr. Moore, and M. & J. Interests, Ine., in consideration of the granting of said license to the said corporation, and less .than one-half of said capital stoek was by them donated back to Prest-Air Corporation and subsequently sold by Mr. Josephson to the public to raise capital.
The stoek of M. & J.' Interests, Ine., was not sold to the public, but was kept by Mr. Josephson and Dr. Moore for themselves.
The situation then was that the founders of the Prest-Air Corporation, Mr. Josephson and Dr. Moore, were entitled through the M. & J. Interests, Ine., to receive $50,000 a year minimum royalty for the use of the said power bottle patent.
Some of these royalties were paid, but the amount was not shown.
The so-called, power bottle patent of Del-ahey was for an improvement