payment. It should have been confined to interest on the principal sums. The eighth finding of the Court of Claims shows in more or less detail how the interest was calculated. The methods adopted we have already criticised. The Solicitor General in his brief makes it evident that in the case of no one of the four items is the amount which has been actually paid less than that which should have been paid down to the day of payment, in accordance with the judgment, including the principal and 5 per cent. simple interest to the date of payment. There is no attempt on the part of the appellant to question the demonstration of this fact. The truth is that the errors in the calculation increased by a substantial sum the amounts which under the judgment should have been paid. As this was more favorable than it should have been to the Cherokees, they can not complain. On this appeal, under the Act of 1919, and in compliance with its requirement, we hold that there is no more interest due to the Cherokees beyond that which they have already received. The Government is not in a position, in view of the fact that the errors referred to have been embodied in legislation, and the overpayments have been made by direction of Congress, to seek to recover them back. Indeed it has not attempted to do so. The judgment of the Court of Claims is

LUCKETT v. DELPARK, INC., ET AL

Affirmed.

APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW JERSEY.

No. 220. Argued March 16, 1926.-Decided April 12, 1926. 1. A suit is within the jurisdiction of the District Court, as arising under the patent laws, where the bill seeks an injunction against infringement, with profits and damages, even though it contain averments in denial of an anticipated defense of license or authority

496

Argument for Appellant.

to use the patent. Hartell v. Tilghman, 99 U. S. 547, qualified. P. 510.

2. But where the main purpose of the bill is to recover royalties under a license or assignment, or damages for breach of covenants, or for specific performance thereof, or to declare a forfeiture of licenses or obtain a reconveyance of an assigned patent for breach of conditions, additional averments of danger that the patent will be infringed after the title has been so restored, coupled with a prayer for an injunction, do not bring the case within the federal jurisdiction. Wilson v. Sandford, 10 How. 99. Pp. 502, 510.

Affirmed.

APPEAL from a decree of the District Court dismissing the bill for want of jurisdiction in a suit by Luckett, a patent-owner, for an accounting and damages under license agreements, for cancellation of the agreements, injunction against future infringement of the patents, etc.

Mr. Thomas J. Johnston, with whom Messrs. J. Granville Meyers and John Milton were on the brief, for appellant.

Counsel for appellant cited: White v. Rankin, 144 U. S. 628; Healy v. Sea Gull Mfg. Co., 237 U. S. 479; Wilson v. Sanford, 10 How. 99; Hartell v. Tilghman, 99 U.S. 547; Albright v. Teas, 106 U. S. 613; Dale v. Hyatt, 125 U. S. 46; Excelsior Wooden Pipe Co. v. Pacific Bridge Co., 185 U. S. 282; Littlefield v. Perry, 21 Wall. 205; Atherton Co. v. Atwood, 102 Fed. 949; The Fair v. Kohler, 228 U. S. 22; Healy v. Sea-Gull Specialty Co., 237 U. S. 479; Geneva Furniture Co. v. Karpen, 238 U. S. 254; Briggs v. United Mch. Co., 239 U. S. 48. From these cases they deduced the following propositions:

I. Where the suit is based only on a contract concerning patent (or other) rights, whether to enforce the contract, to modify it, to cancel it, or to recover damages for its breach, the suit is not one "touching patent rights," under § 256, par. 5, Judicial Code, and jurisdiction must be maintained, if at all, by reason of diverse citizenship,

100569°-26- -32

Opinion of the Court.

270 U.S.

or otherwise, under § 24; subject to the usual restrictions as to residence, etc., of the concurrent jurisdiction found in § 51. That patent rights may or must be incidentally considered does not affect the principle.

II. Where the suit declares for infringement of letterspatent, the jurisdiction of the District Court is not only complete, but exclusive; subject to the residence limitation of § 48.

III. Jurisdiction once attaching is not divested by the fact that contract questions must be decided in the adjudication on the merits.

IV. The merits have nothing to do with jurisdiction. That depends exclusively upon the case stated by the plaintiff.

V. Where the plaintiff pleads jurisdictional facts, an answer interjecting a contractual defense does not divest the jurisdiction; the court must proceed to "hear and determine" all of the issues.

VI. Where the bill pleads patent infringement, an anticipatory negation of a contract defence will not divest jurisdiction.

Distinguishing or repelling Standard Dental Co. v. Natl. Tooth Co., 95 Fed: 291; Amer. Graphophone Co. v. Victor, 188 Fed. 431.

On the authority of the Excelsior Wooden Pipe Case, .185 U. S. 282, and Healy v. Sea Gull Mfg. Co., 237 U. S. 479, the decree below should be reversed, and the cause remanded to the court below to proceed upon the merits.

Mr. Archibald Cox for appellees.

MR. CHIEF JUSTICE TAFT delivered the opinion of the Court.

He

Philip A. Luckett is a citizen of Connecticut. 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 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 § 238 of the Judicial Code, in accordance with the saving provision of § 14 of the Act of February 13, 1925, 43 Stat. 942.

Section 51 of the Judicial Code provides that where the jurisdiction is founded on the fact that the action is between citizens of different States, suits shall be brought only in the district of the residence of either the plaintiff or the defendant. The requisite diverse citizenship between the plaintiff and the defendants exists in this suit, but the District of New Jersey is not the district of the residence of either the plaintiff or the defendants. And against defendants' objection, jurisdiction on that ground can not be sustained.

The plaintiff asserts that jurisdiction exists as of a suit under the patent laws under the Judicial Code, § 24, par. 7, § 48 and § 256. Section 48 provides that "in suits 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.

The bill shows that two patents were issued to Luckett, one on November 12, 1918, No. 1284391, and the other on October 12, 1915, No. 1156301, for a method of making undergarments known as union suits. The later patent, No. 1284391, is averred to be the generic and the broader invention, while the earlier patent, No. 1156301, 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 Luckett a royalty on all garments manufactured and sold under it, the licensee covenanting to give access to its books of account. A supplementary agreement made the license exclusive. Later, Luckett gave to the other defendant, Parker, Ford & Dick, an assignment of the Letters Patent No. 1156301, under which a particular union suit known as the " My Pal" suit is made, with conditions subsequent that the assignee should pay certain royalties, should keep the accounts open for inspection, and should push vigorously the sale of "My Pal" suits, and with a provision that, if any condition subsequent failed, the title to the letters patent assigned should revert to Luckett, on his giving the assignee thirty days' notice in writing of his election to resume title. All the contracts of license and assignment made by the plaintiff with each of the defendants are attached to the bill as exhibits.

The averments of the bill are that Delpark, Incorporated, has acquired control of the stock of the Parker, Ford & Dick corporation, and the defendants are acting together; that the Delpark corporation refuses to pay to Luckett any royalties due under its exclusive license of the generic patent; that the Parker, Ford & Dick corporation refuses to pay any royalties under plaintiff's assignment to it of the specific patent, and refuses to push the sale of "My Pal" suits; that this refusal is to prevent competition of the "My Pal" suits with the Delpark suits,