COURT OF APPEAL

VAVASSEUR v. KRUPP.

[1877 V. 50.]

Foreign Sovereign - Jurisdiction - Submission - Injunction - Property - Patent.

The Court has no jurisdiction to prevent a foreign sovereign from removing his property in this country.

A foreign sovereign who, for the purpose of obtaining his property, submits to be made a Defendant in an action, does not thereby lose his rights.

There is a right of property in an article made in infringement of a patent although the Court would order the article to be destroyed.

A foreign sovereign bought in Germany shells made there, but said to be infringements of an English patent. They were brought to this country in order to be put on board a ship of war belonging to the foreign sovereign, and the patentee obtained an injunction against the agents of the foreign sovereign and the persons in whose custody the shells were, restraining them from removing the shells. The foreign sovereign then applied to be and was made a Defendant to the suit. An order was then made by the Master of the Rolls, and affirmed on appeal, that notwithstanding the injunction he should be at liberty to remove the shells.

JOSIAH VAVASSEUR, the Plaintiff in this case, had brought an action against F. Krupp, of Essen, in Germany, Alfred Longsden,

his agent in England, and Ahrens & Co., described as agents for the Government of Japan, claiming an injunction and damages for the infringement of the Plaintiff's patent for making shells and other projectiles. The shells in question had been made at Essen, in Germany, had been there bought for the Government of Japan, had been brought to this country and landed here in order to be put on board three ships of war which were being built here for the Government of Japan, and to be used as ammunition for the guns of those ships.

On the 18th of January, 1878, an in junction was, without prejudice to any question, granted, restraining the Defendants and the owners of the wharf where the shells lay from selling or delivering the shells to the Government of Japan, or to any person on their behalf, or otherwise from parting with, selling, or disposing of the shells and projectiles.

On the 11th of May an application to the Court was made on behalf of the Mikado of Japan and his Envoy Extraordinary in this country, that, notwithstanding the injunction, the Mikado and his agents might be at liberty to remove the shells, and that if and so far as might be necessary the Mikado and his Envoy should for the purposes of making and being heard upon such application be added as Defendants in the suit. Upon this application an order was made by the Master of the Rolls that on the Mikado by his counsel submitting to the jurisdiction of this Court and desiring to be made a Defendant, and on payment into Court by the Mikado of £100 as security for costs, the name of the Mikado be added as a party Defendant in the action.

Notice of motion was then given on the part of the Mikado that the injunction might be dissolved, and that the Mikado might be at liberty to take possession, and remove out of the jurisdiction of the Court the shells in question the property of his Imperial Majesty.

The motion was heard before the Master of the Rolls on the 29th of June.

Aston, Q.C., Davey, Q.C., and Everitt, for the Plaintiff.

Fooks, Q.C., and Cozens-Hardy, for the Mikado.

Chitty, Q.C., Cookson, Q.C., Macrory, and Medd, for the Defendants.

JESSEL, M.R.:-

The Plaintiff, entertaining not unnaturally the strongest objection to Mr. Krupp manufacturing these shells without paying any royalty, has undertaken to prevent persons in this country from making any use of or removing these shells.

Then the Mikado came in and said, "I am a foreign sovereign, yet I will submit to the jurisdiction for the purpose of empowering the Court to make an order; but I say that you cannot interfere with my taking away these shells under these circumstances brought to this country." I think that he is right; and then comes the question what the form of the order should be. Now the Defendants say, and I think they say rightly, the order did not prevent the Mikado from taking the shells away; but when the Mikado's agent applies for them, the persons liable under the injunction say they do not wish to run any risk, because if it was afterwards decided that allowing the Mikado to take the shells was a breach of the injunction, they might be exposed to loss. They therefore would not allow the Mikado to take the shells away without obtaining the decision of the Court; and the object of this motion is to obtain that decision, and nothing else. I propose to make an order that, without prejudice to any question, notwithstanding the injunction, the Mikado shall be at liberty to take out of the jurisdiction the shells which belong to him.

The Plaintiff expressed his intention at once to appeal, and the appeal came on at once for hearing, on the 3rd of July, without any order having been drawn up or any formal notice of appeal having been given.

Aston, Q.C., Davey, Q.C., and Everitt, for the Plaintiff:-

These shells may be the property of a foreign sovereign, but they are now in this country, and he has submitted to the jurisdiction of the Court, and must defend the action and take the consequences like any one else. If a foreign sovereign allows his property to come here and his agents here give rights over it to

third parties, the Court must deal with the property as if it was ordinary property: Gladstone v. Musurus Bey (1). In the other cases, such as Hullett v. King of Spain (2), the sovereign had not submitted to the jurisdiction. But there is no property in these shells, for if an article made in infringement of a patent is brought into this country, the Court will order it to be destroyed.

There is a difference between what is done by a sovereign and what is done by his agents: Dixon v. London Small Arms Company (3). No doubt a foreign sovereign cannot be sued, but where his property is within the jurisdiction there is no reason why the Court should refrain from adjudicating upon it. If the Court has no jurisdiction, why is this application made?

[ Fooks, Q.C.:- The Defendants have had this injunction served on them, and are anxious not to do anything which might be held wrong.]

Fooks, Q.C., and Cozens-Hardy, for the Mikado, were not called upon.

Chitty, Q.C., Cookson, Q.C., Macrory, and Medd, appeared for the Defendants.

JAMES, L.J.:-

I am of opinion that this attempt on the part of the Plaintiff to interfere with the right of a foreign sovereign to deal wish his public property is one of the boldest I have ever heard of as made in any Court in this country.

It is an undoubted and admitted fact that the Mikado of Japan,who is a sovereign prince, bought in Germany a certain quantity of shells, which shells were lawfully made in Germany, although they were, as alleged, made upon the same principle as something which is the subject of a patent in this country. Those shells were bought by the Mikado for the purpose of his government. He brought them into this country on the way to Japan, and he asks to be allowed to remove them from this country, that is to say, he asks that he shall not, by reason of something which was

(1) 1 H. & M. 495.

(2) 2 Bli. (N.S.) 31.

(3) Law Rep. 10 Q. B. 130.

done between the Plaintiff and some other persons, be interfered with in his removal of them to his own country. It seems to me that to refuse him that leave would be a very dangerous proceeding. If a tribunal of any foreign country were to deal with the ammunition of a British man of war under those circumstances, or refuse to permit the captain of a British man of war to remove his ammunition and shells, or anything else, I think that our country would consider it a very serious matter, and possibly demand reparation.

The objection made is this. The Plaintiff says, "True it is that these shells were your property; you had brought them to this country in transitu to Japan, and you had no doubt a right so to bring them. But some persons in this country, either with or without your authority - with your authority it may be, but at all events having possession of these things as your agents - were minded to make, and did make, a use of these shells which was inconsistent with our patent, that is to say, they were making a profitable use of them." If they were doing so, then they are liable in an action for damages, and the Plaintiff may recover any damages that he may be entitled to. But that does not interfere with the rights of the sovereign of Japan, who now asks to be allowed to take his property. It was his property. It is now in the shape in which it was when he lawfully bought it in Germany,where it was lawfully made, and he asks to be allowed to take it out of this country in that shape.

I cannot conceive it possible how any doubt could arise or could be suggested as to the right of the Mikado to do this. I suppose that there is a notion that in some way these shells became tainted or affected through the breach or attempted breach of the patent; but even then a foreign sovereign cannot be deprived of his property because it has become tainted by the infringement of somebody's patent. He says, "It is my public property, and I ask you for it." That seems to me to be the whole of the case.

It is, however, said that the Mikado has submitted to the jurisdiction. No doubt he submitted to the jurisdiction, but in this way only, and for this purpose only. In certain circumstances (which it is not necessary for us now to inquire into) Mr. Ahrens and others were ordered by a Court of municipal jurisdiction not to

deliver certain shells and other things to the Mikado, that is to say, treating them as property, these persons were ordered not to deliver them to the Mikado, but entirely without prejudice. It could never be supposed that that order was to deprive him of any right or property which he had in them. Then when he himself applied to these persons and said, "Give me my property, let me take my property out of this country to my own country," they said, "We do not claim the property, we know it is yours, but there is an injunction of this Court, and we may be liable to punishment by this Court if we give you up your property." Upon which the Mikado, for the purpose of making an application to relieve his own property from a fetter which had been put upon it (I think inadvertently, if I may venture to say so), by the injunction of the Court, does come and say, "I will submit to the jurisdiction of the Court," which means "I will submit to the jurisdiction of the Court as to discovery, as to process, and as to costs." He never meant "I shall submit my public property to be dealt with by a Court of municipal jurisdiction in another country, and in violation of my rights." The whole effect of that proceeding was that he made himself a suitor liable to the ordinary consequences, so far as they can be enforced against a sovereign as to costs and otherwise, and in that character he made a deposit of £100 to provide for the costs of the proceedings. The order he obtained does not prevent his saying, as is the truth, "This is my property, it was lawfully bought by me and paid for by me, and it is public property. Whether anybody else has done anything right or wrong with it, is a question with which I have nothing to do. No Court of municipal jurisdiction has any right to interfere with my property, and be good enough to remove your hands from it." The Master of the Rolls, who granted the injunction, and heard the whole matter, as soon as he learnt what was the state of things, said of course that he could not keep hands on a property which he had no right to interfere with; and he made the order which is complained of.

BRETT, L.J.:-

It does not seem to me that in this case there is any fact whatever in dispute. These shells were made by Krupp at Essen.

That was no infringement of the Plaintiff's patent. In Germanythey were sold to the Mikado and paid for by the agents of the Mikado. None of these facts are in dispute; and this purchase and sale was a perfectly lawful purchase and sale. The Mikado had three ships of war building in this country, and he desired that these shells should be sent to this country and put on board these ships. They were sent to this country by the order and by the authority of the Mikado, through Ahrens & Co. They were brought into this country, and they were deposited on a wharf. The Plaintiff then finding these shells in this country, and finding, as he alleges, that they were made according to the process of his patent, asserts that the bringing them into this country by Ahrens & Co. is an infringement of his patent by them; and thereupon he brings an action against Ahrens & Co. for the infringement. In that action he claims an injunction against Ahrens & Co., and it may be that he claims an order from the Court to destroy those shells, because he says they are an infringement of his patent. In the course of that suit an injunction is obtained against Ahrens & Co. and against others, which injunction in terms forbids them from delivering these shells, which with other things are in their possession, to the ships of the Mikado, and in fact forbids them from sending the shells to Japan. To this action the Mikado was no party, but he or his agents here come forward and claim to have the delivery and the possession of these shells. The Defendants in the action are not unwilling to give the shells to the Mikado, but they say, "If we do so, it may be said that we have broken the injunction, and we may therefore be liable to certain penalties." It seems to me beyond dispute that this was the purpose for which the Mikado came in and desired to be made a party to the suit, and the Master of the Rolls thus describes the purpose. [His Lordship then read the judgment of the Master of the Rolls.] Now it is said that in the first place there is a dispute whether these shells are the property of the Mikado. It is argued that if he were a private individual, then, although he has purchased these shells and paid for them, yet, inasmuch as there has been an infringement of the patent, the property is not in him, because the Court may order the shells to be destroyed. Is that argument good or not? To my mind it is utterly fallacious. The

patent law has nothing to do with the property. The facts here are undisputed, that Krupp made them with his own materials in Germany, where he had a right to make them, that he entered into a contract to sell specific shells to the Mikado, that that contract was performed, and that the shells were paid for, and that they were delivered in Germany to the Mikados's agent. Well, unless the patent law prevents the property from passing, nobody can doubt that the property passed to the Mikado. Therefore the dispute is not upon facts, but upon a false theory of law, that the patent law prevented the property from passing. I am clearly of opinion that the patent law did not prevent the property from passing. The goods were the property of the Mikado. They were his property as a sovereign; they were the property of his country; and therefore he is in the position of a foreign sovereign having property here.

Whether the fact of Ahrens & Co. bringing these goods into England under these circumstances, and with his intention, was an infringement of the patent, I decline to consider. I shall assume for this purpose that it was an infringement, and that we have in this country property of the Mikado which infringes the patent. If it is an infringement of the patent by the Mikado, you cannot sue him for that infringement. If it is an infringement by the agents, you may sue the agents for that infringement, but then it is the agents whom you sue. The injunction is against the agents, the Mikado being then no party to the action, and not being forbidden to do anything. He then comes here as a sovereign, and requires the delivery of his own goods. His only difficulty is the injunction against the agents, and for the purpose of enabling the Court to make an order, he what is called "submits himself to the jurisdiction of the Court." I think the interpretation put by the Master of the Rolls upon the order then made is right, and that it was only an order that the Mikado might be made a Defendant for the purpose of enabling the Court to make the order which the Court has made. He now says, "I know not, and I care not, whether my agents have infringed your patent law. I have property in this country, which property is my own. I demand that it shall be delivered to me, and I make myself a Defendant in your Court merely for the purpose of your modifying

the order which you have made, so that my agents may not be injured in consequence of their delivering to me my own property," And the only order that the Master of the Rolls has made is that these goods may be delivered up to the Mikado; the meaning of which is that the mere fact of the Mikado taking these shells away shall not be considered as against Ahrens & Co. an infringement of the injunction. That is the whole effect of this order. The Mikado has a perfect right to have these goods; no Court in this country can properly prevent him from having goods which are the public property of his own country. Therefore it seems to me that order, which is really made for the benefit of Ahrens & Co., was order rightly made, and that this appeal cannot be sustained.

COTTON, L.J.:-

We have not got the order appealed from, because it has not been drawn up, but in substance it is either that the Mikado should be at liberty, notwithstanding the injunction, to take away the shells in question, or that some Defendants to the suit should, notwithstanding that injunction be at liberty to deliver them to the Mikado, thus leaving the injunction against the Defendants to stand as it was, though doing away with the effect of the injunction, in so far that the particular goods in question are no longer stopped.

The point, therefore, which has been a great deal argued does not arise, whether the Defendants can justify an act which would otherwise be an infringement of the Plaintiff's patent rights, on the ground that they were acting as agents for a foreign sovereign. That question does not arise, but undoubtedly if parties in Englandare doing that which is an infringement of a patent, they cannot justify it by saying that some one who has no power to authorize them to use the patent has authorized them to do so. Certainly, my judgment in this case in no way depends upon any such proposition. After that injunction had been granted, and assuming that the injunction was properly granted against the Defendants in the suit, the Mikado came in and said, "These shells are public property of the country of which I am sovereign, and therefore I ought not to be prevented by that injunction from

taking these shells. The injunction is not against me, but there may be a question whether the Defendants could allow me to take these goods away without committing a breach of the injunction; therefore I come in and state that the shells are public property of the country of which I am sovereign, and I ask the Court to give them over to me." In that proposition he is, I apprehend, clearly right. This Court has no jurisdiction, and, in my opinion, none of the Courts in this country have any jurisdiction, to interfere with the property of a foreign sovereign, more especially with what we call the public property of the state of which he is sovereign as distinguished from that which may be his own private property. The Courts have no jurisdiction to do so, not only because there is no jurisdiction as against the individual, but because there is no jurisdiction as against the foreign country whose property they are, although that foreign country is represented, as all foreign countries having a sovereign are represented, by the individual who is the sovereign.

Then, what besides was argued? I think one argument was very much this, that if the foreign sovereign had been a private individual he could have had no property in these goods, because they were violations of the Plaintiff's patent, or rather I should say more correctly, because they were to violate the Plaintiff's patent. Now there, I venture to say, is a fallacy. The property in articles which are made in violation of a patent is, notwithstanding the privilege of the patentee, in the infringer if he would otherwise have the property in them. The Court in a suit to restrain the infringement of a patent does not proceed on the footing that the Defendant proved to have infringed has no property in the articles; but, assuming the property to be in him, it prevents the use of those articles, either by removing that which constitutes the infringement, or by ordering, if necessary, a destruction of the articles so as to prevent them from being used in derogation of the Plaintiff's rights, and does this as the most effectual mode of protecting the Plaintiff's rights - not on the footing that there is no property in the Defendant. The Court cannot proceed to give that relief and interfere with the articles unless it has before it the person entitled to the articles in question, and has as against this person power to adjudicate that the articles are made or used

in infringement of the Plaintiff's rights. As against a foreign sovereign, how could that be done? If these things, as on the evidence we must take them to be, are the property of the State of which the Mikado is sovereign, I can see no possible ground for interfering on any such principle as that on which the Court acts when a Defendant subject to its jurisdiction having been shewn to have infringed the Plaintiff's rights, the Plaintiff gets this relief, that either the articles are destroyed or the objectionable portion is removed.

The only other point which we really have to consider is this. It is said that although under ordinary circumstances there is no jurisdiction as against a foreign sovereign, yet that in this particular case there is jurisdiction in consequence of the Mikado having come in and obtained the order of the 11th of May. It is said that a sovereign suing submits himself to the Court as an ordinary Plaintiff, and that the Mikado, in consequence of having obtained this order and acted upon it, puts himself in the position of cm ordinary Plaintiff. In the first place, there is this fallacy: the Mikado is not now in any way suing in the ordinary sense of the word, nor has he come to the Court to establish as against an adverse claim his title to the property, which is really what is meant by a foreign sovereign coming here to sue to establish his rights. He is simply coming and saying, "The order of the Court, possibly inadvertently, interferes with my sovereign rights. To prevent any question as to the Defendants' committing a breach of the injunction by allowing me to remove the property, make an order that they be at liberty, notwithstanding the injunction, to hand them over to me." So that, in my opinion, the very foundation for the suggestion fails. But again, even if the Mikado had brought himself into Court as an ordinary Defendant, that, in my opinion, would not give the Court jurisdiction as against the subject-matter, namely, jurisdiction to interfere with the public property of Japan, which is represented here by the Mikado. But when one comes to look at the form of the order, the Mikado does not by it come in as an ordinary Defendant. By it he simply says, "I wish to bring before the Court the facts: that these are my property, that the Defendants were not constructing them under a contract for me, or using them under a contract with me. I wish

to shew that they are my property. I wish to apply for liberty to remove them as the public property of the State of Japan, and for that purpose, if necessary, I ask to come in." In my opinion, the order taken fairly must be read with reference to the purpose for which the Mikado applied, and that being so, although possibly the form is not very happy, it is like a conditional appearance entered where a Defendant who considers himself improperly served with any proceeding has entered a conditional appearance, in order to contest the question, which he could not do without an appearance of some sort. It cannot, in my opinion, be said that the order puts the Mikado in the position of a Plaintiff or of a person who is made simpliciter a Defendant. He came in for the particular purpose of raising this question, and the form of the order, in my opinion, ought not in any way to prejudice the rights which he would have had independently of that order.

JAMES, L.J.:-

This appeal is dismissed with costs.

The costs of the short-hand writer's note of the proceedings before the Master of the Rolls were allowed.

Solicitors for Plaintiffs: Harrison, Beal, & Harrison.

Solicitors for the Mikado: Wilson, Bristows, & Carpmael.

Solicitors for Defendants: Maples, Teesdale, & Co.