(46 S. Ct.) censees for royalties and for cancellation of licenses held not a suit under patent laws, within jurisdiction of federal court in any district where patent was infringed and defendant had regular and established place of business (Judicial Code, § 24, par. 7, and sections 48, 256 [Comp. St. §§ 991, 1030, 1233]). clear that the order of the Commission af- 2. Courts 290-Patentee's suit against lifects the furnishing of cars, their loading, their consignment and thus necessarily their movement in transportation and corresponds fully with the powers conferred by paragraph 15; and that paragraph 15 and Service Order No. 23 both apply not only to priority of car service but also to that of transportation. Certainly one who secures reconsignment and diversion from a lower to a higher class of consignees for delivery violates the service order in terms. *527 *In urging this objection to the indictment, reliance is had by defendant upon the opinion of this court in the case of Peoria & Pekin Union Ry. Co. v. United States, 44 S. Ct. 194, 263 U. S. 528, 68 L. Ed. 427. There the Interstate Commerce Commission sought under paragraph 15 to compel a terminal carrier to switch, by its own engines and over its own tracks, freight cars tendered by or for another connecting carrier. It was held that the exercise of the emergency power of the Commission in transferring car equipment from one carrier to the use of another under paragraph 15 was strictly to be construed, and that the provision as to car service did not authorize the Commission to impose upon the terminal carrier, without a hearing, the affirmative duty not only of turning over its cars and equipment to another carrier, as contemplated in paragraph 15, but also that of itself doing the work of the transportation of and for another carrier. It was in this connection that this court used the expression that car service connotes the use to which vehicles of transportation are put, but not the `transportation service rendered by means of them. The opinion expressly affirms the authority of the Commission under paragraph 15 to give regulatory directions for preference or priority in transportation. The language of this court in the Peoria Case referred to is of no aid to the defendant here. The judgment is reversed. (270 U. S. 496) LUCKETT v. DELPARK, Inc., et al. (Argued March 16, 1926. Decided April 12, 1926.) No. 220. 1. Courts 272-By express statutory provision, jurisdiction cannot be predicated on diversity of citizenship, where neither party is resident of district (Judicial Code, § 51 [Comp. St. § 1033]). By express provision of Judicial Code, § 51 (Comp. St. § 1033), court of district in which neither plaintiff nor defendant resides has not jurisdiction of suit on sole ground of diversity of citizenship. Action by patentee against licensee of broad generic patent and against a subsequent licensee of a specific and narrower patent, who had contracted to exploit patented garment, for recovery of royalties and for cancellation of licenses and agreements made with both defendants, presumably in preparation for enjoining future infringement, held not a suit arising under the patent laws, under Judicial Code, § 24, par. 7, and sections 48, 256 (Comp. St. §§ 991, 1030, 1233), giving jurisdiction to court in district where defendants shall have committed acts of infringement and have a regular and established place of business. 3. Courts 290-Generally patentee's suit for royalties, or for any remedy under contract permitting use of patent, is not under patent laws, and cannot be maintained in federal court as such. Generally suit by patentee for royalties, or for any remedy in respect to contract permitting use of patent, is not a suit under patent laws, and cannot be maintained in federal court as such. 4. Courts 299-Federal courts have jurisdic tion of patentee's suit to enjoin infringement and for profits, though bill contains averments intended to defeat anticipated defense of license (Judicial Code, § 24, par. 7, and sections 48, 256 [Comp. St. §§ 991, 1030, 1233]). Under Judicial Code, § 24, par. 7, and sections 48, 256 (Comp. St. §§ 991, 1030, 1233), federal courts have jurisdiction of patentee's suit for injunction against infringement and for tion of defense of license or authority to use profits and damages, even though, in anticipapatent, complainant includes in bill averments intended to defeat such defense. Appeal from the District Court for the District of New Jersey. Suit by Philip A. Luckett against Delpark, Incorporated, and another. From a judgment dismissing the suit for want of jurisdiction, plaintiff appeals. Affirmed. *497 *Mr. Thomas J. Johnston, of New York City, for appellant. *498 *Mr. Archibald Cox, of New York City, for appellees. Mr. Chief Justice TAFT delivered the opinion of the Court. *499 Philip A. Luckett is a citizen of Connecticut. He brought this bill in equity in the District Court of the United States for the District of New Jersey against Del*park, a corporation of New York, and against Parker, Ford & Dick, a corporation, formerly For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes known as the Luckett Company, organized in the state of Maryland. Appearing for the purpose of the motion only, the defendants filed a motion to dismiss, because the court was without jurisdiction to entertain the bill. The certificate by the District Court shows its dismissal on that ground September 17, 1924. This appeal was allowed November 24, 1924, so that it is maintainable under section 238 of the Judicial Code (Comp. St. § 1215), in accordance with the saving provision of section 14 of the Act of February 13, 1925, 43 Stat. 942. Pal" suit, is made, with conditions subse- [1] Section 51 of the Judicial Code (Comp. The averments of the bill are that Delpark, St. § 1033) provides that, where the jurisdic- Incorporated, has acquired control of the tion is founded on the fact that the action is stock of the Parker, Ford & Dick corporabetween citizens of different states, suits tion, and the defendants are acting together; shall be brought only in the district of the that the Delpark corporation refuses to pay residence of either the plaintiff or the de- to Luckett any royalties due under its exclufendant. The requisite diverse citizenship | sive license of the generic patent; that the between the plaintiff and the defendants Parker, Ford & Dick corporation refuses to exists in this suit, but the district of New pay any royalties under plaintiff's assignment. Jersey is not the district of the residence of to it of the specific patent, and refuses to either the plaintiff or the defendants, and push the sale of “My Pal" suits; that this against defendants' objection jurisdiction on refusal is to prevent competition of the "My that ground cannot be sustained. Pal" suits with the Delpark suits, *and thus deprives plaintiff of royalties on the "My vember 27, 1918, by notice in writing he canPal" suits. The plaintiff avers that on Nocelled his assignment to the Parker, Ford & Dick corporation, for failure of condition subsequent, and resumed his title to letters patent No. 1,156,301. [2] The plaintiff asserts that jurisdiction exists as of a suit under the patent laws under Judicial Code, § 24, par. 7, section 48, and section 256 (Comp. St. §§ 991, 1030, 1233). Section 48. provides that: "In suits brought for the infringement of letters patent the District Courts of the United States shall have jurisdiction, in law or in equity, in the district of which the defendant is an inhabitant, or in any district in which the defendant, whether a person, partnership, or corporation, shall have committed acts of infringement and have a regular and established place of business." The question in this case, then, is whether, it being averred that the defendants regularly do business in New Jersey, and have made and sold there the patented articles referred to in the bill, its allegations make the suit one arising under the patent laws. *500 501 The seventeenth paragraph in the bill, and your honors that Delpark, Incorporated, is a *The bill shows that two patents were issued to Luckett, one on November 12, 1918, No. 1,284,391, and the other on October 12, 1915, No. 1,156,301, for a method of making undergarments known as union suits. The later patent, No. 1,284,391, is averred to be the generic and the broader invention, while the earlier patent, No. 1,156,301, is a specific and narrower one. After the later patent was applied for, but before it was granted, Luckett gave a nonexclusive license for manufacture and sale of the garments under it to the Delpark corporation. This reserved to Luck-statements of the garments made and sold ett a royalty on all garments manufactured under both patents, containing retail prices and sold under it, the licensee covenanting to at which the garments were sold, in order to give access to its books of account. A supple- show the royalties due; also a statement of mentary agreement made the license exclu- the orders received for the "My Pal" garsive. Later Luckett gave to the other defend-ments, but not filled, with prices, to show the ant, Parker, Ford & Dick, an assignment of royalties lost, and that they be compelled the letters patent No. 1,156,301, under which to permit access to their books of account. a particular union suit, known as the "My He further prays that the Parker, Ford & The plaintiff sets out 13 prayers for equitable relief. He asks that the defendants file (46 S. Ct.) Dick corporation be required to execute a *502 formal reassignment of letters *patent No. 1,156,301 to the complainant, so as to remove the cloud from his title to that patent, and that an order issue canceling the licenses and agreements made with both defendants. He prays for damages for suppressing the "My Pal" garment, and the failure properly to exploit it as agreed. patented machine and were infringing the patent, prayed an account of profits since forfeiture, a temporary and permanent injunction, and a reinvestiture of title in the complainant. On demurrer, the bill was dismissed for lack of jurisdiction as not arising under the patent laws. Chief Justice Taney, speaking for the court, said: "The rights of the parties depend altogether upon common-law and equity principles. The In prayer J, the plaintiff asks that a pre-object of the bill is to have this contract set liminary injunction issue against both de- aside and declared to be forfeited, and the fendants to prevent their making sale or de- prayer is 'that the appellant's reinvestiture of livery of the so-called Delpark garment, or title to the license granted to the appellees, by the so-called "My Pal" garment, or any other reason of the forfeiture of the contract, may garment infringing the claims of the two let- be sanctioned by the court,' and for an injunction. But the injunction he asks for is in conters patent of the plaintiff, until further order of court. By prayer K, a similar perma- the forfeiture. He alleges no ground for an insequence of the decree of the court sanctioning nent injunction is asked. There is a prayer junction unless the contract is set aside; and for an order sending the cause to a master to if the case made in the bill was a fit one for take and state the account of profits and relief in equity, it is very clear that whether the damages, both as to royalties due and ac- contract ought to be declared forfeited or not, crued, and as to damages for suppression of in a court of chancery, depended altogether upon the "My Pal" garment, and to report the the rules and principles of equity, and in no degree whatever upon any act of Congress concerning patent rights." same to the court. We do not think that this suit arises under the patent laws. Its main and declared purpose is to enforce the rights of the plaintiff under his contracts with defendants for royalties and for pushing the sales of "My Pal" garments. In addition he seeks the reconveyance of one patent on forfeiture for failure of condition to remove a cloud on his title and a cancellation of all agreements of license of the other for their breach in order presumably that, unembarrassed by his assignment and licenses, he may enjoin future infringement. [3] It is a general rule that a suit by a patentee for royalties under a license or assignment granted by him, or for any remedy in respect of a contract permitting use of the patent, is not a suit under the patent laws of the United States, and cannot be maintained in a federal court as such. Wilson v. Sandford, 10 How. 99, 13 L. Ed. 344; Brown v. Shannon, 20 How. 55, 15 L. Ed. 826; Hartell v. Tilghman, 99 U. S. 547, 25 L. Ed. 357; Albright v. Teas, 1 S. Ct. 550, 106 U. S. 613, 27 *503 L. Ed. 295; Dale Tile Manu*facturing Co. v. The bill in the present case cannot in any respect be distinguished from that in Wilson *504 v. Sandford, as this *language of the opinion shows. But counsel for the appellant here insists that a new and more liberal rule has been adopted by this court in later cases, and that the time has now come for recognizing it by taking what he calls the last step. In the common feature of Wilson v. Sandford and the case before us, jurisdiction fails because the complainant in his bill seeks forfeiture of licensed rights in equity before he can rely on the patent laws to enjoin infringement of his patent rights and obtain damages therefor. There has been no variation from the authority and effect of the case New Marshall Co. v. cited on this point. Marshall Engine Co., 32 S. Ct. 238, 223 U. S. 473, 480, 56 L. Ed. 513; White v. Lee (C. C.) 3: F. 222; Adams v. Meyrose (C. C.) 7 F. 208; Standard Dental Mfg. Co. v. National Tooth Co. (C. C.) 95 F. 291; Atherton Machine Company v. Atwood-Morrison Co., 102 F. 949, 955, 43 C. C. A. 72, approved in Excelsior Wooden Pipe Co. v. Pacific Bridge Co., infra, at page 294; Victor Talking Machine Co. v. The Fair, 123 F. 424, 425, 61 C. C. A. 58; Comptograph Co. v. Burroughs Adding Machine Co. (C. C.) 175 F. 787; American Graphophone Co. v. Victor Talking Machine Co. (C. C.) 188 F. 431; Lowry v. Hert (C. C. A.) 290 F. 876. In Wilson v. Sandford, supra, a bill in equity was filed in a federal Circuit Court setting forth complainant's ownership of a The cases cited as qualifying Wilson v. patent, an assignment to defendants of a li- Sandford are White v. Rankin, 12 S. Ct. 768, cense in consideration of five promissory 144 U. S. 628, 36 L. Ed. 569; Excelsior Woodnotes, with a condition of reversion to com- en Pipe Co. v. Pacific Bridge Co., 22 S. Ct. 681, plainant on failure to pay any note. The bill 185 U. S. 282, 46 L. Ed. 910; Henry v. Dick averred that the first two notes were not paid, Co., 32 S. Ct. 364, 224 U. S. 1, 56 L. Ed. 645, insisted that the license was forfeited by the Ann. Cas. 1913D, 880; The Fair v. Kohler Die failure and the licensor was fully reinvested | Co., 33 S. Ct. 410, 228 U. S. 22, 57 L. Ed. 716; at law and in equity with all his original Healy v. Sea Gull Specialty Co., 35 S. Ct. rights, that the defendants were using the 658, 237 U. S. 479, 59 L. Ed. 1056, and Ge neva Furniture Co. v. Karpen, 35 S. Ct. I was that the jurisdiction was established by *505 Mr. Justice Bradley *announced a dissenting In Excelsior Wooden Pipe Co. v. Pacific Bridge Co., supra, an exclusive licensee filed a bill against the patentee and another party, to whom the patentee had granted a conflicting license. This court held that the patent jurisdiction of the court was not ousted by opinion in which two others concurred. That In White v. Rankin, supra, it was held that a bill in equity for the infringement of letters patent for an invention in the usual form, which did not mention or refer to any contract with the defendants for the use of the patent, could not be dismissed for lack of jurisdiction, because the defendants in a plea set up an agreement in writing between the plaintiffs and one of the defendants to assign to him an interest in the patent on certain conditions which he alleged he had per *506 formed, and certain other *matters which it was alleged had given the defendant the right to make, use and sell the patented invention. The plea being overruled and the answer filed, a stipulation in writing was entered into, admitting that the defendants had made and sold the articles containing the patented inventions, and that a certain written agreement had been made to the purport before mentioned. The decision of the court cense. *507 In Henry v. Dick Co., supra, the patentee for a kind of ink filed a bill for infringement against the users of his patent whom the bill showed to be using the ink in connection with unpatented supplies not made by the *patentee in violation of a license from the patentee limited to its use with its supplies. The case has been since reversed on the merits (Motion Picture Co. v. Universal Film Co., 37 S. Ct. 416, 243 U. S. 502, 61 L. Ed. 871, L. R. A. 1917E, 1187, Ann. Cas. 1918A, 959), but not on the suit was not a suit under the patent laws the point of jurisdiction. It was objected that but a suit on the license contract. It was held that the patentee might waive the contract and sue on the tort of infringement, that chose and sought in its bill, and that, as the jurisdiction must depend on the remedy it patentee had neither sued on the broken contract of license nor asked to have it forfeited by the court, the jurisdiction under the pat ent laws was not ousted. In The Fair v. Kohler Die & Specialty Co., supra, the Kohler Company brought a bill in equity to enjoin The Fair from making and vending certain devices and selling them at less than $1.50 each, and asked an account and triple damages. The bill alleged that plaintiff had the sole and exclusive right to make and sell devices and that the defendant had full notice thereof and was selling the same without license from the plaintiff. It alleged that the plaintiff, when it sold, (46 S. Ct.) imposed the condition that the goods should, though the course of the subsequent pleadings not be sold at less than $1.50, and attached to reveals other more serious disputes. Excelsior the goods a notice to that effect, and that Wooden Pipe Co. v. Pacific Bridge Co. [22 S. any sale in violation of that condition would Ct. 681] 185 U. S. 282 [46 L. Ed. 910]. Jurisbe an infringement. It further averred that and relief demanded by the plaintiff, and as it diction generally depends upon the case made the defendant obtained a stock of the devices cannot be helped, so it cannot be defeated, by with notice of the conditions, and sold them the replication to an actual or anticipated deat $1.25 each, in infringement of the plain- fense contained in what used to be the charging tiff's right under the patent. The defendant part of the bill. For the same reason it does pleaded specially that he had purchased not matter whether the validity of the patent these devices from a jobber, who had paid is admitted or denied. full price to the plaintiff, and that there was no question arising under the patent or other laws of the United States, and that the court had no jurisdiction of the case. The case came on for hearing on the plea. This court held that on the bill the plaintiff made a case under the patent laws, in that it set up the *508 patent, charged *infringement, and sought triple damages, and that, in showing later in the bill that the infringement consisted in a sale at a less price than that which it had authorized in an admitted license, it did not oust the court of jurisdiction, because it might appear upon further hearing of the cause on its merits that the restriction of the license upon which the claim of infringement was based was not valid. In Healy v. Sea Gull Specialty Co., supra, the bill alleged ownership of the exclusive right to make and use box-making machines and sell boxes containing the patented improvements. It further alleged that the defendant was infringing the patents, and would continue to do so unless restrained. Anticipating a defense, the plaintiff set out a license to the defendant, a breach of its conditions, and a termination of the same. It added that the license contained a stipulation that, in case of any suit for infringement, the measure of recovery should be the same as the royalty agreed upon for the use of the inventions, and another for the return of the machines let to the defendant while the license was in force. The bill prayed for an injunction against making, using, or selling the boxes or machines, for an account of profits received by reason of the infringement, for triple the damages measured as above stated, and for the surrender of the machines. In sustaining the jurisdiction as arising under the patent laws, the court used these words: "It may be that the reasoning of The Fair v. Kohler Die & Specialty Co. [33 S. Ct. 410] 228 U. S. 22 [57 L. Ed. 716], is more consistent with that of Mr. Justice Bradley's dissent in Hartell v. Tilghman, 99 U. S. 547, 556 [25 L Ed. 357], a decision since explained and limited (White v. Rankin [12 S. Ct. 768] 144 U. S. 628 [36 L. Ed. 569]), than with that of the majority, but it is the deliberate judgment of the court and governs this case. As stated there, the plaintiff is absolute master of what jurisdiction he will appeal to; and if he goes to the District Court for infringement of a patent, unless the claim is frivolous or a pretense, the District Court will have jurisdiction on that ground, even 46 S.CT.-26 *509 "As appears from the statement of it, the plaintiffs' case arose under the patent law. It relied upon a contract as fixing the mode of eswas not affected by the fact that the plaintiffs timating damages or that they sought a return of patented machines to which if there was no license they were entitled. These were incidents. The essential features were the allegation of an infringement and prayers for an injunction, an account of profits and triple damages-the characteristic forms of relief granted by the patent law. The damages were grounded on the infringement, and the contract was relied upon only as furnishing the mode in which they should be ascertained." the patentee charged the defendants in his bill in equity with contributing to the inlicensees of the complainant to use the patent fringement by wrongfully persuading the in circumstances not authorized by the lisuch licensees to violate their licenses in cense; second, with wrongfully procuring particulars not bearing on the charge of infringement; and third, with refusing to perform stipulations by which defendants agreed to assign other patents to plaintiff. Jurisdic tion of the court under the patent laws, sustained for the first branch of the suit, bewhich was the sole basis of jurisdiction, was In Geneva Furniture Co. v. Karpen, supra, 510 cause the claim of infringement *was not frivolous but substantial, and there was jurisdiction, whether the claim ultimately was held good or bad. The remainder of the bill was found not sustainable as arising under the patent laws, because based on contract, and while, under the equity practice, the parts of the bill were properly joined, such practice must yield to a jurisdictional statute, and the bill was dismissed as to its second and third branches. [4] The result of these cases is that a federal district court is held to have jurisdiction of a suit by a patentee for an injunction against infringement and for profits and damages, even though in anticipation of a defense of a license or authority to use the patent, the complainant includes in his bill averments intended to defeat such a defense. If these averments do not defeat such defense, the patentee will lose his case on the merits, but the court's jurisdiction under the patent laws is not ousted. The error in Hartell v. Tilghman, supra, was in denying jurisdiction under the patent laws when the patentee based his action broadly on his patent |