## Facts

- Andrew Teas was an inventor who obtained patents covering improvements to saddles.
- In 1876, Teas entered into an agreement assigning his saddle-related patents to Andrew Albright and Edwin R. Cahoone, who were manufacturers.
- Under the agreement, Albright and Cahoone would manufacture goods using the patented improvements and pay Teas royalties based on their sales.
- Teas later suspected the manufacturers were not paying the full amount of royalties required by the contract.
- Teas filed suit in state court seeking access to the manufacturers’ accounts (so the royalty amount could be determined) and an order requiring payment of the royalties found due.
- The manufacturers filed a petition to remove the case to federal court, arguing that because the dispute involved patents, it arose under the federal patent laws and fell within federal courts’ jurisdiction.
- Albright sought to have the case sent back to state court, arguing the suit was a contract dispute governed by state law.
- The federal circuit court remanded the case to state court, and the manufacturers appealed from that remand order.

## Issues

1. Does a suit seeking inspection of accounts and payment of royalties due under a patent-assignment/royalty contract “arise under” the federal patent laws so that it may be removed to federal court when federal jurisdiction otherwise is lacking?

## Decision

- No. The case did not arise under the federal patent laws because the plaintiff’s claim was for contractual accounting and payment of royalties owed under a private agreement.
- The federal circuit court properly remanded the case to state court.
- The Supreme Court affirmed the remand.

## Legal Principles

- A case does not arise under the patent laws merely because a patent is part of the background or subject matter of the parties’ contract.
- Federal patent jurisdiction requires that the plaintiff’s right to relief depend on the patent laws (for example, issues of infringement, validity, or other patent-law rights), not simply on alleged nonpayment under an agreement concerning patents.
- When the claim sounds in state contract law—such as a request for an accounting and payment under a royalty agreement—state courts may decide the dispute even though patents are involved.
- Removal on federal-question grounds is not permitted unless the plaintiff’s own statement of the claim shows a federal right or duty is a necessary element of the cause of action.

## Conclusion

Because Teas’s suit sought an accounting and payment of royalties under a contract assigning patent rights, and did not require adjudication of a right created by federal patent law, it was not a case arising under the patent laws; the federal circuit court therefore correctly remanded it to state court, and the Supreme Court affirmed.


Albright v. Teas, 106 U.S. 613, 1 S. Ct. 550, 27 L. Ed. 295 (1883)