Appeal from the District Court of the United States for the Eastern District of Wisconsin; Ferdinand A. Geiger, Judge.
Before EVANS, SPARKS, and FITZHENRY, Circuit Judges.
Appellant was employed by appellee in the year 1927 as a chemical engineer at a salary of $150 per month, which wage was thereafter increased from time to time until it reached $225 per month. His employment terminated in June, 1930. His work wa in appellee's research laboratory. His assignment was to solve the problem presented by the laminating or tearing of paper tape when being unwound from the roll or removed from the surface to which it was adhered and also to endeavor to reduce the cost of adhesive tape manufacture.
Appellee for many years had been engaged in the manufacture of masking tape, abrasives, etc. Masking tape is a pressure sensitive tape made by placing pressure sensitive adhesive on paper backing made of paper which has been unified. The result is a paper that is wound in rolls and then unwound and placed on surfaces and which can be removed from the surface without splitting or laminating the tape; the avoidance of splitting permits the tape to be reused repeatedly. The paper backing is unified by saturating it with an adhesive solution which binds or welds the fibres together, thus unifying the paper so it will not laminate.
In appellee's laboratory and research department there were some thirty chemists and chemical engineers employed during the period covered by appellant's employment. All employees who were engaged in research work were required to sign contracts wherein they agreed, among other things, that inventions by them perfected should be assigned to the company. Appellant executed and delivered to appellee such a contract, a copy of which is herewith set forth.*fn1
In the course of appellant's employment he went to Green Bay, Wisconsin, to study methods of can drying which differed from the regular procedure of tungsten drying of adhesive creping. Following this trip, appellee purchased a machine for further experimental and testing purposes. Appellant continued his experiments with this machine with the result, as appellee claims and the court found, that about February 26, 1930, a new product was conceived for which appellant could validly apply for a patent and which patent appellee was entitled to because of the aforesaid agreement. After appellant left appellee's employment there was submitted to him an application for a patent which he refused to sign because he claimed he was not the inventor of the product covered thereby and disclosed therein, but that he was shown such a product in the Green Bay factory and that someone in that factory, rather than he, was the inventor. He also challenged the validity of the contract above set forth. It is unnecessary to go into detail in respect to the other invention because the foregoing fact statement is sufficient to present the issues which appellant has raised and which grow out of the aforementioned employment agreement. Both questions are of more than ordinary interst.
The two questions are: (a) Was the contract, which appellee relies upon to enforce the assignment of the patent application, against public policy and therefore void? (b) Upon the evidence here presented, was the court justified in requiring appellant to sign an application for a patent which necessitated his making an affidavit which contained material statements which he says he could not truthfully make?
The contract obligated appellant to assign:
"(a) all my rights to inventions which I have made or conceived, or may at any time hereafter make or conceive, either solely or jointly with others, relating to abrasives, adhesives or related materials, or to any business in which said company during the period of my employment by said company or by its predecessor or successor in business, is or may be concerned, and
"(b) all my rights to inventions which, during the period of my employment by said company or by its predecessor or successors in business, I have made or conceived, or may hereafter make or conceive, either solely or jointly with others, or in the time or course of such employment, or with the use of said company's time, material or facilities, or relating to any subject matter with which my work for said company is or may be concerned; and
"(c) I further agree, without charge to said company, but at its expense, to execute, acknowledge and deliver all such further papers, including applications for patents, and to perform such other acts as I lawfully may, as may be necessary in the opinion of said company to obtain or maintain patents for said inventions in any and all countries. * * *"
The right of an employer to contract for patentable discoveries made by its employee within certain limits is well recognized.*fn2
Equally well settled is the proposition that such negative employment contracts are subject to legal limitations.*fn3
Applying the rules of these decisions to the contract under review, it is worthy of note (a) that the agreement is not limited in point of time. It covers inventions which the employee has made or conceived or may at any time hereafter make or conceive. (b) It is not limited to the subject matter to which the employee directed his attention when in the employ of appellee, but extends to any business "in which said company during the period of my employment by said company or by its predecessor or successor in business is or may be concerned." In other words, if appellee's ...