Statement by Mr. Justice GRAY:

These were two bills in equity, heard together in the circuit court, and argued together in this court.

On March 31, 1886, Allen C. Dalzell, a citizen of the state of New York, and the Fahys Watch-Case Company, a New York corporation, filed a bill in equity against the Dueber Watch-Case Manufacturing Company, a corporation of Ohio, for the infringement of two patents for improvements in apparatus for making cores for watch cases, granted to Dalzell, October 27, 1885, for the term of which he had, on January 21, 1886, granted a license, exclusive for three years, to the Fahys Company.

To that bill the Deuber Company, on June 4, 1886, filed the following plea: That prior to the grant of the said [149 U.S. 315, 316] letters patent upon which the bill of complaint is based, and prior to the application therefor, and prior to any alleged invention by said Dalzell of any part, feature, or combination described, shown, or claimed in either of said letters patent, the said defendant being then engaged in the manufacture of watch cases in the city of Newport, in the state of Kentucky, and the said Dalzell having been in its employ as a tool maker for a year preceding, it, said defendant, at the request of said Dalzell, re-employed said Dalzell, at increased wages, to aid in experimenting upon inventions upon machinery and tools to be used in the manufacture of various portions of watch cases; that said Dalzell did then and there agree with said defendant, in consideration of said increased salary as aforesaid to be paid to him, and which was paid to him by this defendant, to dedicate his best efforts, skill, and inventive talent and genius towards the perfecting and improvement of watch-case machinery and such other devices as this defendant should direct and order, and in experimenting under the direction of this defendant for this purpose, and further agreed that any inventions or improvements made or contributed to by him (said Dalzell) should be patented at the expense of this defendant, and for its benefit exclusively, and that said Dalzell should execute proper deeds of assignment, at the expense of this defendant, to be lodged with the applications for all such patents in the United States patent office, and said patents were to be granted and issued directly to this defendant; that, in pursuance of said agreement, said Dalzell entered upon said employment, and while thus employed at the factory of this defendant, and while using its tools and materials, and receiving such increased wages from it, as aforesaid, the said alleged inventions were made; that said patents were applied for, with the permission of this defendant, by the said Dalzell; and that all fees and expenses of every kind, necessary or useful for obtaining said patents, including as well patent-office fees as fees paid the solicitor employed to attend to the work incident to the procuring of said patents and drawing said assignments to this defendant, were paid by this defendant; and that, notwithstanding the foregoing, said Dalzell did [149 U.S. 315, 317] not sign the said deeds, although he had promised so to do, but fraudulently and secretly procured the said patents to be granted to himself, of all of which this defendant avers the complainant the Fahys Watch-Case Company had notice at and prior to the alleged making of the license by said Dalzell to it, more particularly referred to in the bill of complaint; and defendant avers that, by reason of the premises, the title in equity to said patents is in this defendant.

The plea, as required by equity rule 31 of this court, was upon a certificate of counsel that in his opinion it was well founded in point of law, and was supported by the affidavit of John C. Dueber that he was the president of the Dueber Company, that the plea was not interposed for delay, and