COFFIN, Circuit Judge.
This diversity action
In 1940, Freeman went to work as an inventor for Rockwood Sprinkler Company, then an independent concern which has since been acquired by Bliss. Among other products, Rockwood manufactured ball valves. Rockwood's ball valves utilized only a single seal or seat, could control the flow of fluid in only one direction, and tended to leak. Rockwood's customers occasionally requested a so-called double-seal ball valve, but Rockwood never developed one during Freeman's employment. In his employment contract with Rockwood, Freeman agreed
The major question is whether Freeman's admitted close-to-the-line actions,
Up to this point nothing apparently had been put on paper. Not until February 1 or 2 had Freeman begun to make drawings or sketches of the '666 patent concepts.
In mid-February, Freeman began testing his invention. In April, he encountered a mechanical difficulty in implementing his idea and he was assisted by Oscar R. Vaudreuil, who ran a machine shop. When the invention was finally perfected, a patent application naming Freeman and Vaudreuil as co-inventors was filed. The district court concluded that Vaudreuil was a spurious joint inventor whose name was added to the application to shield Jamesbury, to which the patent was assigned, from a claim that Freeman had made the invention while still at Rockwood. On appeal, Jamesbury strenuously argued that this finding was erroneous.
Patent '666 was finally issued in 1960. In 1966, Bliss came across testimony given by Freeman in December 1965 and January 1966 in which he claimed to have first conceived of the idea for his invention in the first week of February 1954 and to have begun his drawings on February 1 or 2. These statements caused Bliss to believe that Freeman had actually invented the ball valve while he was still with Rockwood. Under the 1940 employment contract, the '666 patent would then have been Rockwood's, and now Bliss' property. Bliss promptly raised this claim as an intervenor in the Jamesbury-Worcester Valve suit.
Statute of Limitations and Laches
The initial issue that confronts us is whether Bliss is barred by the Massachusetts
Bliss argues that it did not discover evidence that Freeman had violated his contract until 1966 because Freeman had fraudulently concealed the time of his development of the patent.
It is true that Freeman's concealment took the form merely of keeping silent, but silence can be fraudulent concealment by a person, such as a fiduciary, who has a duty to disclose. Stetson v. French, 321 Mass. 195, 72 N.E.2d 410 (1947). Under his contract with Rockwood, Freeman had a duty to disclose any inventions. Moreover, the district court's findings indicate that Freeman took positive steps to conceal his possible liability to Rockwood by listing Vaudreuil as a spurious co-inventor.
Jamesbury argues, however, that the 1966 testimony did not bring to light facts which revealed fraudulent concealment but only a suspicion of concealment. These suspicions, it argues, are insufficient to demonstrate fraudulent concealment, and hence the statute of limitations was never tolled. It cites two decisions of this court, Burns v. Massachusetts Institute of Technology, 394 F.2d 416, 420 (1st Cir. 1968), and Tracerlab, Inc. v. Industrial Nucleonics Corp., 313 F.2d 97 (1st Cir. 1963), which held that a tolled limitation period begins to run after facts are discovered which reveal fraudulent concealment, but that a suspicion of concealment is insufficient to start the statute running. These opinions were not concerned with the extent of knowledge a plaintiff must have to bring a delayed suit based on fraudulent concealment of a cause of action, but with the extent of knowledge he must have obtained as to the existence of his cause of action to be compelled to bring suit within the limitations period following the acquisition of such knowledge. The facts Bliss became aware of in 1966 were not sufficient to start the period running, but they were sufficient for Bliss to allege fraudulent concealment. This allegation is sufficient for Bliss to temporarily overcome the statute of limitations in order to attempt to prove at trial that Freeman had in fact fraudulently concealed the date of his invention.
If the 1966 discovery was sufficient basis for suit, Jamesbury argues further, Bliss should have filed earlier because the testimony revealed no new facts to Bliss. Under Burns v. Massachusetts Institute of Technology, supra, a tolled statute begins to run if a plaintiff has facts which should give him knowledge of fraudulent concealment. But the district court found that Bliss had no such knowledge before 1966. Bliss had, of course, seen Jamesbury valves ever since the fall of 1954, and it knew of the patent application and issuance.
Alternatively, Jamesbury argues that Bliss is precluded by laches from seeking relief after such a passage of time. Laches requires not only a passage of time but also acquiescence in the alleged wrong by the tardy plaintiff. Tracerlab, Inc. v. Industrial Nucleonics Corp., supra at 102. Acquiescence would require that Bliss knew Freeman had invented the '666 ball valve when at Rockwood but that it did not act on its knowledge. The district court having found that Bliss had no knowledge, until 1966, of exactly when the invention was made, laches is no bar to this suit.
Freeman's Employment Contract
The central issue in this case is the interpretation of the word "invention" as it is used in the 1940 employment contract between Freeman and Rockwood.
In interpreting contracts, "[t]here is in fact no `one correct' meaning of an expression; and the party choosing the expression may have no clear and conscious meaning of his own." 3 Corbin on Contracts, § 535, at 16 (1970).
There is, in Massachusetts case law, a definition of "invention" which coincides with the usage of the word in patent law. We cannot distinguish the relevant facts of Lamson v. Martin, 159 Mass. 557, 35 N.E. 78 (1893), from this case. Lamson also concerned an invention, made by the key man in a corporation, who was claiming a later date for his invention than that claimed by the other party. The issue was whether an invention had been made by the defendant before
There are other cases which define "invention" similarly. See National Development Co. v. Gray, 316 Mass. 240, 249, 55 N.E.2d 783 (1944); United States v. Dubilier Condenser Corp., 289 U.S. 178, 188, 53 S.Ct. 554, 77 L. Ed. 1114 (1933); T. H. Symington Co. v. National Malleable Casting Co., 250 U.S. 383, 386, 39 S.Ct. 542, 63 L.Ed. 1045 (1919). Bliss tries to distinguish these cases as priority cases: cases in which each of two individuals claims to have been first in making an invention. If a non-disclosed idea could constitute an invention, courts would have to read minds to determine priority. Therefore, courts will not consider an idea to be an "invention" until it is made tangible. This does not mean, Bliss says, that a non-disclosed idea cannot be an "invention"; it is merely an arbitrary definition created because of difficult problems of proof.
Those same problems of proof which Bliss claims militate in favor of a requirement of tangible evidence of an invention are also present in this case. Here, one party is attempting to prove that an invention was actually made at a point in time prior to its being reduced to drawings. Moreover, the rationale put forth by the Massachusetts court in Lamson v. Martin, supra, is not one of evidentiary convenience; it is an acknowledgement that an "invention" is generally thought to be more than a thought in the inventor's head. Finally, Lamson and United States v. Dubilier Condenser Corp., supra, were not priority disputes between two would-be patent-holders; they were both cases in which the patent-holder attempted to prove he made the invention at a point in time later than that at which another party, asserting rights to the patent, claimed the invention was made. In sum, it would seem that the Massachusetts cases and the patent law cases hold that an idea becomes an "invention" only when it is reduced to some tangible form. No such "invention" existed when Freeman left Rockwood's employ. Cf. Goodyear Tire & Rubber Co. of Akron, Ohio v. Miller, 22 F.2d 353 (9th Cir. 1927).
Bliss cites two cases from other jurisdictions in support of its definition of "invention". New Jersey Zinc Co. v. Singmaster, 71 F.2d 277 (2d Cir. 1934), cert. denied, 293 U.S. 591, 55 S.Ct. 106, 79 L.Ed. 685 (1934), involved an employee who contracted to assign all patentable "ideas" to his employer. The employee conceived the idea in dispute
Winston Research Corp. v. Minnesota Mining & Mfg. Co., 350 F.2d 134, 145 (9th Cir. 1965), contains only a brief discussion of a contract provision which required an employee to assign "inventions conceived". The contract itself is not quoted in the opinion; "inventions conceived" is the court's term. The court merely upheld as not clearly erroneous a district court's finding that three inventions had been conceived during the inventor's employment. "Inventions conceived" is neither defined nor distinguished from "inventions made", the term in Freeman's contract, which Bliss argues should be the focal point of our interpretive analysis.
Although the generally understood definition in the trade and the patent law definition support Jamesbury's interpretation that an idea becomes an invention only when put in tangible form, that support is only evidence — but strong evidence — that Jamesbury offers the correct interpretation. Indeed, patent law contains an exception to its own definitional rule so that in some cases the rival inventor who conceives the idea first, but puts it in tangible form after someone else, may secure the patent by proving earlier conception and reasonable diligence in reducing his conception to practice. 35 U.S.C. § 102(g). See Note, Date of Invention: The Varying Standards of Proof, 57 Georgetown L.J. 162, 162-63 (1968). It is still possible that Freeman and Rockwood had a different definition in mind.
The only other evidence put forth by either party is Bliss' assertion that Freeman's practice was to inform Rockwood of possible patentable inventions when they were merely ideas. If true, this would be evidence that the parties interpreted "invention" to mean "idea". The parties' own application of a contract provision is clearly relevant to interpretation, 3 Corbin, supra, § 558, but the evidence at trial does not support Bliss' assertion. In the over 1300 pages of trial transcript and 500 pages of documents, Bliss points to only five pages of testimony as relevant to how the parties applied the contract requirement. Bliss' counsel never asked Freeman, who was on the stand for extensive periods of time, what the practice actually was.
He did ask Freeman about his practice of consulting Rockwood's patent attorney if he felt he or a member of his department had come up with a patentable idea.
The interpretive evidence in favor of Bliss' definition of "invention" would seem non-existent. But even if we were to say that there remained some doubt about the definition of that term, we would resolve that doubt in favor of the party who did not choose the wording of the agreement. Marston v. American Employers Insurance Co., 439 F.2d 1035 (1st Cir., 1971); 3 Corbin, supra, § 559, at 262. This agreement was a standard form contract drawn up by Rockwood and signed by Freeman shortly after being graduated from college. Rockwood drew up the contract and had superior bargaining power. See Stedman, Rights and Responsibilities of the Employed Inventor, 45 Indiana L.J. 254, 258 (1970). If the term "invention", after the use of all analytical aids, retained its ambiguity, we would still adopt the Freeman-Jamesbury definition.
Our interpretation is that Freeman had not made an invention, within the meaning of the employment contract when he left Rockwood, because he had not put any of his ideas down in any tangible form. The district court found that Freeman deliberately refrained from making any drawings in order to circumvent the contract requirements. Bliss argues that it would be sound policy to frustrate the success of such bad faith. Perhaps so, but the contract could easily have provided that Rockwood was entitled to any inventions patented by Freeman and relating to Rockwood's business, within a specified number of years after termination of employment.
Freeman's Fiduciary Duties
As a final argument, Bliss argues that Freeman had a fiduciary duty under Massachusetts law to give Rockwood the benefit of any inventions resulting from ideas conceived on Rockwood's time. This argument relies on three cases, Hoyt v. Corporon, 268 Mass. 544, 168 N.E. 94 (1929), Wireless Specialty Apparatus Co. v. Mica Condenser Co., Ltd., 239 Mass. 158, 131 N.E. 307 (1921), and United States v. Dubilier Condenser Corp., supra. None of these cases supports Bliss' position. They all concern employees hired without written contracts, who had quit and taken inventions with them. The unwritten agreements were construed to require employees who had been hired as inventors, as opposed to designers, to turn over the patents to their former employers. In all cases the employment contracts were
There is a common law doctrine of "shop right" which entitles an employer to rights in an employee's invention to which the employer had made some contribution, such as the use of equipment. But the ambiguity of this doctrine and the inability to predict how courts would apply it led to the use of written contracts to allocate inventive rights. Where those rights are allocated by contract, the common law doctrine is superseded. Stedman, supra, at 256-58; Employer's and Employee's Rights, note 11 supra, at 828-30.
The district court's interpretation of "invention" as being an idea reduced to tangible form is supported by the evidence and is not clearly erroneous. Bliss has been unable to prove that Freeman made his invention while still in the employ of Rockwood.