Waterman v. Mackenzie
138 U.S. 252 (1891)

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U.S. Supreme Court

Waterman v. Mackenzie, 138 U.S. 252 (1891)

Waterman v. Mackenzie

No. 82

Argued November 19, 1890

Decided February 2, 1891

138 U.S. 252

Syllabus

An agreement by which the owner of a patent for an invention grants to another person "the sole and exclusive right and license to manufacture and sell" the patented article throughout the United States, not expressly authorizing him to use it, is not an assignment, but a license, and gives the licensee no right in his own name to sue a third person at law or in equity for an infringement of the patent.

The mortgagee of a patent by assignment recorded within three months from its date in the Patent Office, is the party entitled (unless otherwise provided in the mortgage) to maintain a bill in equity against an infringer of the patent.

This was a bill in equity, filed April 24, 1886, against James A. Mackenzie and Samuel R. Murphy by Lewis E. Waterman, claiming to be the sole and exclusive owner of a patent granted to him by the United States on February 12, 1884, for an improvement in fountain pens, and of the invention thereby secured, alleging an infringement thereof by the defendants and praying for an injunction, a discovery, an account of profits, and damages.

The defendants filed a plea which alleged that the plaintiff at the time of filing the bill was not possessed either of the patent or of an exclusive right under it to the whole or any specified part of the United States, for that certain assignments in writing under seal of the patent and invention from the plaintiff to Sarah E. Waterman, his wife, from her to the firm of Asa L. Shipman's Sons, and from that firm to Asa L. Shipman, were made by the parties thereto, and were recorded in the Patent Office at the dates stated below, and that Shipman continued to be possessed of the patent and invention until and including the time of the filing of the bill.

The plaintiff filed a general replication. At the hearing on the issue thus joined, the following instruments, executed in

Page 138 U. S. 253

New York by and between citizens of that state, were duly proved:

1st. An assignment, made February 13, 1884, and recorded March 27, 1884, from Lewis E. Waterman, the plaintiff, to Sarah E Waterman, his wife, of the whole patent and invention.

2d. A "license agreement" made between Mr. and Mrs. Waterman on November 20, 1884, and never recorded, by which she granted to him "the sole and exclusive right and license to manufacture and sell fountain pen-holders, containing the said patented improvement throughout the United States," and he agreed to pay her "the sum of twenty-five cents as a license fee upon every fountain pen-holder so manufactured by him."

3d. An assignment, made November 25, 1884, and recorded November 29, 1884, from Mrs. Waterman to the firm of Asa L. Shipman's Sons, of the whole patent and invention, expressed to be made in consideration of the payment of the sum of $6,500 and containing this provision:

"The consideration of this assignment is that whereas the said Lewis E. Waterman and the said Sarah E. Waterman have on this 25th day of November, 1884, made a joint note of hand for the sum of $6,500, payable to the said Asa L. Shipman's Sons three years from this date, with interest at six percent, now if the said Lewis E. Waterman and myself, or either of us, shall well and truly pay the said note, according to its tenor, then this assignment and transfer shall be null and void, otherwise to be and remain in full force and effect."

It also contained covenants of full right to assign, and against all encumbrances, "except a license to the said Lewis E. Waterman to manufacture and sell pens" under the patent, being the license above mentioned.

4th. An assignment, made November 25, 1884, in consideration of the payment of the sum of $6,500, and recorded November 29, 1884, from the firm of Asa L. Shipman's Sons to Asa L. Shipman, of all the right and title acquired by the assignment made to them by Mrs. Waterman, as well as the promissory note thereby secured.

Page 138 U. S. 254

"5th. An assignment, made April 16, 1886, and recorded April 22, 1886, from Mrs. Waterman to the plaintiff of all her right, title, and interest in the patent and invention, and all her claims or causes of action for the infringement of the patent, and rights to damages or profits by reason thereof."

The circuit court allowed the plea, for reasons stated in its opinion, as follows:

"The transfer to Asa L. Shipman is in language so emphatic and exact that there is little opportunity for misapprehension. It matters not what the instrument is called. It matters not that it may be defeated by the payment of $6,500 on November 25, 1887. The fact remains that by virtue of this assignment or mortgage, the title to the patent was on April 24, 1886, when this action was commenced, outstanding in Asa L. Shipman. If it was not absolute, it was a present, existing title, defeasible upon a condition subsequent. On April 16, therefore, when Sarah E. Waterman assigned all her right, title, and interest to the complainant, she had nothing to assign which could at all change the legal status of the parties. She could not vest a clear title to the patent in the complainant for the obvious reason that she had previously disposed of it, and did not own it. The agreement of November 20, 1884, being a license and nothing more, does not enable the complainant to maintain this action without joining the holder of the legal title. The suggestion that, irrespectively of the Shipman assignment, the complainant is entitled to prosecute for infringements alleged to have occurred between February 12 and November 25, 1884, is equally unavailing, for assuming such a right of action to exist, it could only be maintained on the law and not on the equity side of the court. The plea is allowed. The complainant may amend, upon payment of costs, within ten days."

29 F. 316.

The plaintiff not having filed an amended bill within the ten days, a final decree was entered dismissing his bill, with costs, and he appealed to this Court.

Page 138 U. S. 255

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