American Harley Corp. v. Irvin Industries, Inc., 27 N.Y.2d 168 (1970)

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State courts retain jurisdiction over actions for tortious interference with a contract, even when the contract involves a patent license, unless the action itself arises under federal patent law.

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Summary

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American Harley Corp. sued Irvin Industries for tortious interference with its exclusive patent license agreement. Irvin, initially negotiating with American Harley for a license, later secured permission from British Harley (the patent owner) to sell a limited number of buckles in the U.S., despite American Harley’s exclusive license. Irvin argued the New York courts lacked jurisdiction, claiming the suit was essentially a patent infringement case, exclusively under federal jurisdiction. The New York Court of Appeals held that state courts have jurisdiction because the suit was for tortious interference with a contract, a state law claim, and did not “arise under” federal patent law.

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Facts

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British Harley owned patents for an automobile seat belt buckle.r
In 1958, British Harley granted American Harley an exclusive license to manufacture and sell the buckle in the U.S. and Canada.r
Irvin Industries, already holding a license for Europe, negotiated with American Harley to expand to the U.S. market; negotiations failed.r
Irvin then approached British Harley, which, despite American Harley’s exclusive license, granted Irvin permission to sell 50,000 buckles in the U.S. to recoup Irvin’s investment.r
American Harley sued Irvin for wrongful interference with its exclusive license, slander of title, and unfair competition.r

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Procedural History

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The trial court dismissed claims against the presidents of both companies and the slander of title claim.r
The jury found in favor of American Harley on the remaining counts, awarding damages.r
The Appellate Division affirmed the trial court’s judgment.r
Irvin appealed to the New York Court of Appeals, challenging the jurisdiction of the New York courts.r

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Issue(s)

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Whether New York state courts have jurisdiction over a tortious interference with contract claim when the contract concerns a patent license agreement, or whether such a claim falls under the exclusive jurisdiction of federal courts because it