explaining that “in a multiple claims case the judgment which finally adjudicates all the claims is the only judgment having finality unless [the district] court in its discretion enters a final judgment pursuant to [Rule 54(b) ]”
How later courts described this case
- explaining that “in a multiple claims case the judgment which finally adjudicates all the claims is the only judgment having finality unless [the district] court in its discretion enters a final judgment pursuant to [Rule 54(b) ]”
- “multiple claims” presented where claims for specific performance and counterclaim for damages arose out of same transaction
Written by the judges who cited it.
The opinion
BIGGS, Chief Judge
(concurring in part and dissenting in part).
I must respectfully dissent from the views expressed by the other members of the court as to the merits of this case.
Glass was employed by Bendix under an “Employee’s Agreement” as follows: “In part consideration of my employment by Bendix Aviation Corporation and/or any *274 of its subsidiary, controlled or associated companies, and of wages and salary to be paid me, I hereby agree to disclose promptly to my employer inventions conceived or developed by me, whether on the employer’s time or my own time, during, the entire period of my employment by Bendix Aviation Corporation or any subsidiary or controlled or associated company, and which inventions are capable of use in any way in connection with the business during said period of Bendix Aviation Corporation or any of its subsidiary or controlled or associated companies; and for the same considerations I do hereby grant and agree to convey to Bendix Aviation Corporation or its nominee (and subsidiary or controlled or associated company) the entire right, title and interest, domestic or foreign, or such lesser interest as that Corporation at its option may in any particular case choose to accept, in and to each and all of said inventions, and I do further agree to sign all applications for patents, assignments and other papers and writings and to perform all acts necessary or convenient to make this agreement effective as to particular inventions.”
I think there is little doubt but that an employment contract so worded implies a negative covenant that the employee will not hinder the employer’s exploitation of an invention or encumber any invention made by the employee during his employment. Such a negative covenant ordinarily may be specifically enforceable against the employee. 1
It is an inference to be fairly drawn from the pleadings, which at this stage of the case must be construed most strongly in favor of Bendix and against Glass, that, prior to the filing of the complaint, Glass asserted that he was entitled to all right, title and interest in the invention, both legal and equitable. He refused to execute an assignment of a divisional application of the Patent Office and this formed the primary basis for the suit against him embodied in Bendix’s complaint. But the prayers of the complaint prayed not only that Glass should execute the divisional application but also that he be enjoined “from encumbering, 2 licensing, disposing or operating under the * * * invention.”
The complaint was filed on June 4, 1948. On August 9, 1948 Glass filed an answer and a counterclaim and demanded a jury trial. The substance of his answer and his counterclaim was that he was entitled to all right, title and interest in the invention, and, on an inconsistent theory, that Bendix owed him compensation for the invention if Bendix had acquired ownership of it.
Bendix filed a reply to the counterclaim which in effect denied the truth of Glass’s allegations. On August 20, 1948 Glass filed an amended answer and counterclaim which in substance reiterated his prior allegations and on August 21, 1948 the court allowed the amendment as of August 9, 1948. On August 21, therefore, it was clear that Glass was still asserting that he was entitled to all right, title and interest in the invention, and that Bendix, if he could prove the allegations of its complaint, was entitled to’ specific performance of the terms of Glass’s employment contract including the negative covenant herein-before referred to. Bendix’s suit was in effect one to quiet title to the invention.
On October 1, 1948 Bendix moved to strike Glass’s demand for a jury trial and thereafter, on November 9, 1948, Glass delivered to Bendix the executed divisional patent application. On November 9 Glass also offered to deliver to Bendix an executed ¿ssignment of the patent application but conditioned this offer on acknowledgement by Bendix of his, Glass’s equitable rights in the invention. Glass’s demand for a jury trial and his motion to dismiss the complaint were argued. The court below ruled against the demand for jury trial and denied Glass’s motion to dismiss the complaint.
*275 The court stated, Bendix Aviation Corporation v. Glass, D.C., 81 F.Supp. 645, 646 , “In the present case the cause of action stated in the complaint, the remedy sought and the defenses pleaded in the answer, including the ‘understanding and implied agreement’ for compensation, create an issue which is as purely equitable as anything can be. It is whether the defendant can be compelled to specifically perform his side of the employment contract. This issue the defendant cannot transform into one at law merely by counterclaiming for money damages.” Chief Judge Kirkpatrick went on to- say, 81 F.Supp. at page 647 , “On the other hand the issue raised by the counterclaim is at law — whether the plaintiff has broken a promise to pay the defendant money. If this breach of contract had not been pleaded as a defense, if the promise had been set out as a collateral agreement or as a collateral term of the employment contract performance of which was not necessary to entitle the plaintiff to relief, the issues could be severed and a separate jury trial awarded to the defendant upon his counterclaim. As it is, the facts upon which the counterclaim is based, if proof of them is offered as a defense, will have to be determined in the trial upon the equity issue.” The trial judge also said that the defendant had sought to get the ground for equity jurisdiction out of the case by making a written offer to assign the patent and by then moving to dismiss the complaint on the ground that the cause was thus rendered moot. Chief Judge Kirkpatrick pointed out that Glass’s offer to assign the patent was not an unconditional offer and that it was therefore unnecessary to determine whether an unconditional offer by Glass would have had the effect which he desired, stating “ * * * it may be noted that tender after suit brought is not ordinarily a defense to the action but merely operates as a termination of liability for interest and costs accruing thereafter.” The trial judge then observed that Glass’s offer was made subject to payment by Bendix of compensation as claimed in the counterclaim coupled with what, in view of the pleadings, amounted to a complete denial of any obligation by Glass under the employment contract. The trial court ended by stating, “As made, it [the offer to' assign the patent] clearly can have no effect whatever upon the status of the action.”
On January 4, 1951, Glass filed another motion to dismiss the complaint, and on April 19, 1951, filed a motion for leave to file a statement supplementing the motion of January 4, 1951. This statement is an oddity in pleading and is as follows: “Without waiving any of the matters of fact or law set forth in the Counterclaim and Answer to the Complaint, and upon the understanding that defendant’s following statement will not be construed by the Court as a waiver of or as in any way impairing defendant’s claim for money compensation for patents 2,488,771 and 2.535.914 and/or for the inventions forming the subject matter thereof, which claim for money compensation is the subject matter of the Counterclaim filed in this action, defendant states that he will not now or at any time seek of this or any other court any relief in respect to any matters of fact or law set forth in the Counterclaim and Answer to the Complaint or in respect to patents Nos. 2,488,771 and 2.535.914 or the inventions claimed therein, other than money compensation or damages. John P. Glass, * *
The court below filed no further written opinion but there was extended discussion at a hearing held on May 7, 1951 and it is clear that Chief Judge Kirkpatrick came to the conclusion that the statement of April 19, 1951, quoted above, heavily relied on by the majority of this court in the conclusion upon the merits, was in the nature of an unconditional offer by Glass to assign the patent to Bendix.
I conclude that the court below and this court have overlooked an important issue in the instant suit. The complaint, answer, counterclaim and reply state a cause of action cognizable in equity, despite Glass’s execution of the divisional application, his assignment of the patent and his statement of April 19, 1951. The complaint, viewed in the light of the answer and counterclaim — even if the present suit be judged strictly on the sufficiency of the *276 pleading — states a primary issue of law and fact; viz., whether Glass can he compelled to abide by the terms of his employment contract, including the negative covenant, hereinbefore referred to, which would prevent him from encumbering the invention in any way or from harassing Bendix in its exploitation. In other words, the issue here was and is whether Bendix is entitled to maintain an action for specific performance of its employment contract with Glass or whether Glass can compel Bendix to submit to a jury trial on the single issue of compensation or damages. By dextrous use of the statement of April 19, 1951 Glass has convinced the court below and this court that the suit at bar is cognizable only at law and that no issue of specific performance remains in the case. This, I think, is the fundamental error o.f the court below and of the majority of this court.
But even if I am wrong on this issue I cannot regard Glass’s statement of April 19, 1951 as the equivalent of an unconditional offer by Glass to assign the patent to Bendix. In short, I think Chief Judge Kirkpatrick’s first decision was correct and his second decision wrong. Glass’s statement of April 19 commences with a declaration that he does not waive any matter of fact or law set forth in the counter-c’aim and answer to the complaint. It goes on to say that Glass will not seek any relief other than money compensation or damages as to any matters set forth in the counterclaim or answer. It appears, therefore, that the litigation is in substantially the same status as it was on November 30, 1948 when the court below filed its opinion quoted in part above. 81 F.Supp. 645 . Glass’s carefully drawn statement of April 19, 1951, with its meticulous hedging of both Glass’s and Bendix¡s rights, does not render unconditional Glass’s conditional offer to assign the patent. Glass does not say that he will look solely to Bendix in the instant suit to enforce any and all rights which he may have to the invention. He could have done this in a few simple words.
In addition the statement of April 19, 1951 is addressed to Bendix and must be viewed in the context of this particular law suit; non constat that if Bendix were to license another or others under the patents to manufacture, use and sell the devices, Glass -could not or would not sue the licensee or licensees for compensation or damages. It may be argued that if the instant suit were decided in Bendix’s favor it could intervene in such a proceeding and plead the former decree as an effective bar. I am far from sure that the former decree would so operate but, even if it did, Bendix nonetheless would be put to the trouble of further litigation in another law suit or law suits. An adjudication of the issue of compensation or damages can definitively settle only one of the issues here presented. Major rights of the parties will hang in the air and Bendix, if it is entitled to exploit the invention, may encounter great practical difficulty in doing so. I can perceive no valid reason why the court below should not resolve all issues raised by the complaint, answer, counterclaim and reply and grant Bendix, if it prove its case, appropriate relief in equity.
The fascinating problem presented as to the correct application of Section 1291 and Rule 54(b) and of Section 1292(1), namely when and under what circumstances a judgment is final and appealable, seems to have distracted the attention of the court from what I consider to be the principal issue of the instant case.
The courts have decided in limine complicated issues of law and fact which will be much clearer in definition after evidence has been received. If it should then appear that Bendix is not entitled to equitable relief, and that the sole issue is in reality one of compensation or damages, a jury trial would then be possible. Glass, at least at this stage of the proceeding, should not be granted summary judgment dismissing the complaint. The case at bar is fraught with fateful consequences for both Bendix and Glass and the title, legal and equitable, to very important disclosures are at issue.
I agree with Judge MARIS’ reasoning in the majority opinion that the decree appealed from is a final decision within the purview -of Section 1291, viewed in the *277 light of Rule 54(b) and I am also in accord with Judge HASTIES opinion that the order is appealable under Section 1292(1). I disagree with the decision on the merits. I would reverse the order appealed from and order the complaint reinstated.
. Bendix is a Delaware corporation. Glass was apparently employed at Teterboro, New Jersey. The suit at bar was brought in the Eastern District of Pennsylvania. It is not presently necessary to resolve any question of conflicts of law.
. Emphasis added.