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American Well Works v. Layne

U.S.
May 22, 1916
241 U.S. 257 (1916)

Summary

holding that " suit arises under the law that creates the cause of action"

Summary of this case from Eastman v. Marine Mechanical Corp.

Opinion

ERROR TO THE DISTRICT COURT OF THE UNITED STATES FOR THE EASTERN DISTRICT OF ARKANSAS.

No. 376.

Argued May 5, 1916. Decided May 22, 1916.

A suit for damages to business caused by a threat to sue under the patent law is not in itself a suit under the patent law, of which the state court cannot take jurisdiction. Whether a wrong is committed by one making statements to effect that an article sold by another infringes the former's patent depends upon the law of the State where the act is done and not upon the patent law of the United States; and, in this case held that the state court had jurisdiction of a suit for libel or slander based on such statements.

THE facts, which involve the jurisdiction of the District Court, are stated in the opinion.

Mr. David A. Gates, for plaintiff in error, submitted.

Mr. Paul Synnestvedt, with whom Mr. J.M. Moore and Mr. Coke K. Burns were on the brief, for defendants in error.


This is a suit begun in a state court, removed to the United States Court, and then, on motion to remand by the plaintiff, dismissed by the latter court, on the ground that the cause of action arose under the patent laws of the United States, that the state court had no jurisdiction, and that therefore the one to which it was removed had none. There is a proper certificate and the case comes here direct from the District Court.

Of course the question depends upon the plaintiff's declaration. The Fair v. Kohler Die Co., 228 U.S. 22, 25. That may be summed up in a few words. The plaintiff alleges that it owns, manufactures and sells a certain pump, has or has applied for a patent for it, and that the pump is known as the best in the market. It then alleges that the defendants have falsely and maliciously libeled and slandered the plaintiff's title to the pump by stating that the pump and certain parts thereof are infringements upon the defendant's pump and certain parts thereof and that without probable cause they have brought suits against some parties who are using the plaintiff's pump and that they are threatening suits against all who use it. The allegation of the defendants' libel or slander is repeated in slightly varying form but it all comes to statements to various people that the plaintiff was infringing the defendants' patent and that the defendant would sue both seller and buyer if the plaintiff's pump was used. Actual damage to the plaintiff in its business is alleged to the extent of $50,000 and punitive damages to the same amount are asked.

It is evident that the claim for damages is based upon conduct, or, more specifically, language, tending to persuade the public to withdraw its custom from the plaintiff and having that effect to its damage. Such conduct having such effect is equally actionable whether it produces the result by persuasion, by threats or by falsehood, Moran v. Dunphy, 177 Mass. 485, 487, and it is enough to allege and prove the conduct and effect, leaving the defendant to justify if he can. If the conduct complained of is persuasion, it may be justified by the fact that the defendant is a competitor, or by good faith and reasonable grounds. If it is a statement of fact, it may be justified, absolutely or with qualifications, by proof that the statement is true. But all such justifications are defences and raise issues that are no part of the plaintiff's case. In the present instance it is part of the plaintiff's case that it had a business to be damaged; whether built up by patents or without them does not matter. It is no part of it to prove anything concerning the defendants' patent or that the plaintiff did not infringe the same — still less to prove anything concerning any patent of its own. The material statement complained of is that the plaintiff infringes — which may be true notwithstanding the plaintiff's patent. That is merely a piece of evidence. Furthermore, the damage alleged presumably is rather the consequence of the threat to sue than of the statement that the plaintiff's pump infringed the defendants' rights.

A suit for damages to business caused by a threat to sue under the patent law is not itself a suit under the patent law. And the same is true when the damage is caused by a statement of fact — that the defendant has a patent which is infringed. What makes the defendants' act a wrong is its manifest tendency to injure the plaintiff's business and the wrong is the same whatever the means by which it is accomplished. But whether it is a wrong or not depends upon the law of the State where the act is done, not upon the patent law, and therefore the suit arises under the law of the State. A suit arises under the law that creates the cause of action. The fact that the justification may involve the validity and infringement of a patent is no more material to the question under what law the suit is brought than it would be in an action of contract. If the State adopted for civil proceedings the saying of the old criminal law: the greater the truth the greater the libel, the validity of the patent would not come in question at all. In Massachusetts the truth would not be a defence if the statement was made from disinterested malevolence. Rev. Laws, c. 173, § 91. The State is master of the whole matter, and if it saw fit to do away with actions of this type altogether, no one, we imagine, would suppose that they still could be maintained under the patent laws of the United States.

Judgment reversed.

MR. JUSTICE McKENNA dissents, being of the opinion that the case involves a direct and substantial controversy under the patent laws.


Summaries of

American Well Works v. Layne

U.S.
May 22, 1916
241 U.S. 257 (1916)

holding that " suit arises under the law that creates the cause of action"

Summary of this case from Eastman v. Marine Mechanical Corp.

holding that libel and slander suit that involved statements concerning plaintiff's patent for a pump arose under state law, not federal patent law: "A suit arises under the law that creates the cause of action."

Summary of this case from Harper v. Autoalliance Intern., Inc.

holding that " suit arises under the law that creates the cause of action"

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holding that " suit arises under the law that creates the cause of action"

Summary of this case from McCarthy v. Michigan

holding that " suit arises under the law that creates the cause of action"

Summary of this case from Rackley v. City of Cincinnati

finding that “a suit for damages to business caused by a threat to sue under the patent law is not itself a suit under the patent law.”

Summary of this case from Gardiner v. St. Croix District Governing Board of Directors

finding that state law governs issue whether there has been slander of a patent

Summary of this case from Kiwanis Intern. v. Ridgewood Kiwanis Club

noting that generally a suit "arises under the law that creates the cause of action"

Summary of this case from North Carolina v. Alcoa Power Generating, Inc.

In American Well Works, supra, a pump manufacturer sued a competitor in state court for libel and slander after the competitor allegedly made statements suggesting that the plaintiff's pump infringed on the defendant's pump and the defendant began to file lawsuits against parties who were using the plaintiff's pump. 241 U.S. at 258, 36 S.Ct. 585. The defendant removed the case to federal court on the ground that the action arose under federal patent law.

Summary of this case from Harper v. Autoalliance Intern., Inc.

explaining that " suit arises under the law that creates the cause of action"

Summary of this case from Interstate Petroleum Corp. v. Morgan

In American Well Works Co. v. Layne Bowler Co., 241 U.S. 257, 36 S.Ct. 585, 60 L.Ed. 987 (1916), Justice Holmes devised this still relied upon rule writing that "[a] suit arises under the law that creates the cause of action."

Summary of this case from West 14th Street Commercial Corp. v. 5 West 14th Owners Corp.

In American Well Works Co. v. Layne Bowler Co. (1916) 241 U.S. 257, 36 S.Ct. 585, 60 L.Ed. 987, the action sounded in tort, although plaintiff could just as easily have sued for infringement. The plaintiff initiated the action in state court, charging that it had a valid patent on a certain pump, that defendants asserted that plaintiff's patent infringed defendants' pump patent, and that defendants were suing and threatening to sue plaintiff's licensees for infringement. Defendants removed the case to federal court as an action arising under the patent laws.

Summary of this case from Koratron Company v. Deering Milliken, Inc.

In American Well Works v. Layne, 241 U.S. 257, 36 S.Ct. 585, 60 L.Ed. 987, a removal case, the plaintiff in its complaint alleged: That it owns, manufactures and sells a certain pump and has applied for a patent on it; that defendants have falsely and maliciously libeled and slandered plaintiff's title to the pump in regard to infringements; that it be awarded damages.

Summary of this case from Chaskin v. Thompson

stating that a "suit arises under the law that creates the cause of action"

Summary of this case from Hammond v. Wabash Auto Grp.

stating that a "suit arises under the law that creates the cause of action"

Summary of this case from Zeller v. Zhou

stating that a "suit arises under the law that creates the cause of action"

Summary of this case from Raktabutr v. Greater Balt. Med. Ctr.

stating that a "suit arises under the law that creates the cause of action"

Summary of this case from Schifanelli v. Jourdak

stating that a "suit arises under the law that creates the cause of action"

Summary of this case from Aucker v. Univ. of Md. Med. Sys. Corp.

In American Well Works, the plaintiff owned a patent for a pump, and the defendant made public statements that the plaintiff's pump infringed on defendant's own design for a pump, causing plaintiff to bring state tort causes of action against the defendant for libel and slander.

Summary of this case from Fouad v. Milton Hershey Sch.

stating that a "suit arises under the law that creates the cause of action"

Summary of this case from Mayor & City Council of Baltimore v. BP P. L.C.

stating that a "suit arises under the law that creates the cause of action"

Summary of this case from Mayor & City Council of Baltimore v. BP P. L.C.

establishing Justice Holmes' early conception of federal question jurisdiction

Summary of this case from South Dakota v. Wayfair, Inc.

asserting that a "suit arises under the law that creates the cause of action"

Summary of this case from Scott v. Toll Bros., Inc.

In American Well Works, cited by Vincent without discussion, the Supreme Court reversed the federal court's dismissal of an action for lack of subject matter jurisdiction.

Summary of this case from Vincent v. Quality Addiction Mgmt. Inc.

In American Well Works Co. v. Layne Bowler Co., 241 U.S. 257, 36 S.Ct. 585, 60 L.Ed. 987 (1916), the plaintiff brought suit in state court against the defendant for libel because of statements made by the defendant that the plaintiff was infringing upon a patent of the defendant.

Summary of this case from Wynn v. Philip Morris, Inc.
Case details for

American Well Works v. Layne

Case Details

Full title:AMERICAN WELL WORKS COMPANY v . LAYNE AND BOWLER COMPANY

Court:U.S.

Date published: May 22, 1916

Citations

241 U.S. 257 (1916)
36 S. Ct. 585

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