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A suit brought to recover the consideration for the transfer of an interest in letters patent, in which no issue is made touching the construction of the patent or its validity or infringement, is not one arising under the patent laws of the United States, and cannot be removed from a State to a Federal Court, where all the parties are citizens of the same State.
Appellant inventor filed suit against appellee to recover the consideration appellee was to have paid appellant under a contract for the transfer of appellant's interest in letters-patent to appellee. Appellant filed suit in the circuit court after which appellee had the cause remanded to state court. According to the circuit court, the state court had full and exclusive cognizance of the suit, inasmuch as it did not arise under any of the laws of the United States, but was one for an accounting and relief and for the settlement of controversies under a contract. Appellant sought review of the decision of the circuit court.
Under the circumstances, was it proper to remand the case to the state court?
Affirming the decision of the lower court to remand the case to state court, the court held that the action was not arising under the patent laws of the United States and therefore was not subject to federal court jurisdiction. Because appellant unconditionally and absolutely sold and transferred his title and interest in the inventions, the court found that he was not alleging the infringement or invalidity of the patents, but was instead seeking only those payments due to him under the contract. Because the action was a suit to recover royalties and not a suit upon the letters-patent, the court ruled that it did not involve a federal controversy and was therefore properly remanded to state court.