Complainant sold his patented machine embodying the invention
claimed and described in the patent, and attached to the machine a
license restriction that it only be used in connection with certain
unpatented articles made by the vendor of the machine; with the
knowledge of such license agreement and with the expectation that
it would be used in connection with the said machine, defendant
sold to the vendee of the machine an unpatented article of the
class
Page 224 U. S. 2
described in the license restriction.
Held that the act
of defendant constituted contributory infringement of complainant's
patent.
This Court does not prescribe the jurisdiction of courts,
federal or state, but only gives effect to it as fixed by law.
A suit for infringement which turns upon the scope of the patent
and privileges of the patentee thereunder presents a case arising
under the patent law.
In determining questions of jurisdiction, this Court never
shirks the responsibility of maintaining the lines of separation
defined in the Constitution and the laws made in pursuance
thereof.
A patentee who has leased his patent to a licensee under
restrictions may waive the tort involved in infringement and sue
upon the broken contract; but in that event, the case is not one
arising under the patent laws and, in absence of diversity of
citizenship, a federal court has no jurisdiction thereof.
Whether the case is one of infringement, of which the federal
court has jurisdiction,, or of contract, of which it has not
jurisdiction, is often determined by the remedy which complainant
seeks.
The test of jurisdiction is whether complainant does or does not
set up a right, title or interest under the patent laws or make it
appear that a right or privilege will be defeated by one, or
sustained by another, construction of those laws.
Whether a patentee may lawfully impose restrictions on the use
of a patent and whether the violation thereof constitutes
infringement are questions under the patent law.
A patentee may elect to sue his licensee upon the broken
contract, or for forfeiture for breach, or for infringement.
While an absolute and unconditional sale operates to pass the
patented article outside of the boundaries of the patent, a
patentee may, by a conditional sale, so restrict the use of his
vendee within specific boundaries of time, place, or method as to
make prohibited uses outside of those boundaries constitute
infringement, and not mere breach of collateral contract.
The extent of a license to use which is carried by a sale of a
patented article depends upon whether any restrictions were placed
upon the sale, and if so what they were, and how they were brought
home to the vendee, and where, as in this case, a restriction is
plainly placed upon the article itself, a sale carries with it only
the right to use within the limits specified, and any other use is
an infringing one.
The patent statute is one creating and protecting a true
monopoly granted to subserve a broad public policy, and it should
be construed so as to give effect to a wise and beneficial
purpose.
Page 224 U. S. 3
The monopoly of a patent extends to the right of making, selling
and using, and each is a separable and substantial right.
A patentee may exclude others from the use of his invention
although he does not use it himself.
The Paper Bag Patent
Case, 210 U. S. 405.
Although a contract in regard to use of a patent may include
interstate commerce and restrain interstate trade, if it involves
only the reasonable and legal conditions imposed under the patent
law, it is not within the prohibitions of the Sherman Act.
Bement v. National Harrow Co., 186 U. S.
70.
Contributory infringement is the intentional aiding of one
person by another in the unlawful making, selling or using of a
patented invention.
The larger right of exclusive use of the patentee embraces the
lesser one of only permitting the licensee to use upon prescribed
conditions.
Courts cannot declare the monopoly created by Congress under
authority of the Constitution to be unwise; Congress alone has
power to prescribe what restraints shall be imposed.
Where a great majority of the courts to which Congress has
committed the interpretation of a law have construed it, so that
the line of decisions has become a rule of property, this Court
should not, in the absence of clear reason to the contrary,
overrule those decisions on certiorari, and so
held in
this case after reviewing the decisions sustaining the rule of
contributory infringement.
A bare supposition that an article adapted for use in connection
with a patented machine sold under restricted license is to be used
in connection therewith will not make the vendor a contributory
infringer, but where the article so sold is only adapted to an
infringing use, there is a presumption that it is intended
therefor.
Questions certified by circuit court of appeals on appeal from
149 F. 424 answered in affirmative.
The facts, which involve the power of a patentee to enforce a
license restriction as to the use of the patented article, and the
determination of what constitutes contributory infringement, are
stated in the opinion.
Page 224 U. S. 11
MR. JUSTICE LURTON delivered the opinion of the Court.
This cause comes to this Court upon a certificate under the
sixth section of the Court of Appeals Act of March 3, 1891.
The facts and the questions certified, omitting the terms of the
injunction awarded by the circuit court, are these:
"This action was brought by the complainant, an Illinois
corporation, for the infringement of two letters patent, owned by
the complainant, covering a stencil-duplicating machine known as
the 'Rotary Mimeograph.' The defendants are doing business as
copartners in the City of New York. The complainants sold to one
Christina B. Skou, of New York, a Rotary Mimeograph embodying the
invention described and claimed in said patents under license which
was attached to said machine, as follows:"
"
LICENSE RESTRICTION"
"This machine is sold by the A. B. Dick Company with the license
restriction that it may be used only with the stencil paper, ink,
and other supplies made by A. B. Dick Company, Chicago, U.S.A."
"The defendant Sidney Henry sold to Miss Skou a can of ink
suitable for use upon said mimeograph, with knowledge of the said
license agreement, and with the expectation that it would be used
in connection with
Page 224 U. S. 12
said mimeograph. The ink sold to Miss Skou was not covered by
the claims of said patent."
"
QUESTION CERTIFIED"
"Upon the facts above set forth, the question concerning which
this Court desires the instruction of the Supreme Court is:"
"Did the Acts of the defendants constitute contributory
infringement of the complainant's patents?"
There could have been no contributory infringement by the
defendants unless the use of Miss Skou's machine with ink not made
by the complainants would have been a direct infringement. It is
not denied that she accepted the machine with notice of the
conditions under which the patentee consented to its use. Nor is it
denied that thereby she agreed not to use the machine otherwise.
What defendants say is that this agreement was collateral, and that
its validity depended upon principles of general law, and that, if
valid the only remedy is such as is afforded by general principles
of law. Therefore, they say that the suit is not one arising under
the patent law, and one not cognizable in a federal court unless
diversity of citizenship exists.
But before coming to the question whether this is a suit of
which the circuit court had jurisdiction as a suit arising under
the patent law, it may be well to notice an argument against
jurisdiction based upon the suggestion that, if a breach of such a
license restriction will support a suit for infringement, direful
results will follow. Chief among the results suggested are an
encroachment upon the authority of the state courts and an
extension of the jurisdiction of the federal courts. And, to swell
the grievance, it is said that if it be held that a breach of such
a restriction will support a suit for infringement, parties will be
deprived of the right to have the validity and import of the
license restriction determined by the general law,
Page 224 U. S. 13
and be compelled to have their rights determined by the patent
law.
We are unable to assent to these suggestions. We do not
prescribe the jurisdiction of courts, federal or state, but only
give effect to it as fixed by law. If a bill asserts a right under
the patent law to sell a patented machine subject to restrictions
as to its use, and alleges a use in violation of the restrictions
as an infringement of the patent, it presents a question of the
extent of the patentee's privilege which, if determined one way,
brings the prohibited use within the provisions of the patent law,
or, if determined the other way, brings into operation only
principles of general law. Obviously a suit for infringement, which
must turn upon the scope of the monopoly or privilege secured to a
patentee, presents a case arising under the patent law. The
jurisdiction of the circuit court over such cases has, for more
than a century, been exclusive by the express terms of the statute,
although, for the most part, its jurisdiction over other kinds of
suits arising under the Constitution and laws of the United States
is only concurrent with that of the state courts.
The suggestion, therefore, that we should refrain from ruling
that a patentee may sell a patented machine subject to restrictions
as to its use, and may predicate infringement upon a use in
violation of the federal lest such a ruling may draw to the federal
courts cases which otherwise would not come to them, cannot be
sustained without placing our decision upon considerations which
are quite apart from the law. This, of course, we may not do. In
determining questions of jurisdiction, this Court has never shirked
the responsibility of maintaining the lines of separation defined
in the Constitution and the laws made in pursuance thereof, but, on
the contrary, has been ever watchful to maintain those lines as
obligatory alike upon all courts and all suitors.
Page 224 U. S. 14
We come, then, to the question whether a suit for infringement
is here presented.
That the license agreement constitutes a contract not to use the
machine in a prohibited manner is plain. That defendants might be
sued upon the broken contract, or for its enforcement, or for the
forfeiture of the license, is likewise plain. But if, by the use of
the machine in a prohibited way, Miss Skou infringed the patent,
then she is also liable to an action under the patent law for
infringement. Now that is primarily what the bill alleged, and this
suit is one brought to restrain the defendants as aiders and
abettors to her proposed infringing use.
That the patentee may waive the tort and sue upon the broken
contract, or in assumpsit, is elementary. 3 Robinson, Patents, §§
1225, 1250, and notes;
Steam Stone Cutter Co. v. Sheldon,
15 F. 608;
Pope Mfg. Co. v. Owsley, 27 F. 100;
Button-Fastener Case, 77 F. 288, 291;
Wilson v.
Sandford, 10 How. 99. But if the patentee elect to
waive the tort and sue upon the covenants or for a breach of
contract, the suit would not be one dependant upon or arising out
of the patent law, and a federal court would have no jurisdiction
unless diversity of citizenship existed. 3 Robinson, Patents, §
1250;
Magic Ruffle Co. v. Elm City Co., 13 Blatchf. 151;
Goodyear v. Union India Rubber Co., 4 Blatchf. 63;
Goodyear v. Congress Rubber Co., 3 Blatchf. 449. This
would be so although the damages for a breach would be measured by
the loss resulting from the infringement.
Magic Ruffle Co. v.
Elm City Co., 13 Blatchf. 151. After such a recovery in
assumpsit, no further damages for the infringement can be claimed.
Steam Stone Cutter Co. v. Sheldon, 15 F. 608.
The remedy which the complainant seeks may often determine
whether the suit is one arising under the patent law, and
cognizable only in a court of the United States, or one upon a
contract between the patentee and his assigns or licensees, and
therefore cognizable in a
Page 224 U. S. 15
state court, unless there be diversity of citizenship. Thus, a
bill to enforce a contract concerning the title to a patent, or an
interest therein, or to declare a forfeiture of an assignment of an
interest in a patent, or even a license to make, sell, or use the
patented thing, or an action to recover damages for a breach of a
contract relating to a patent of a license thereunder, would not,
because of the character of remedy or relief sought, be a suit
cognizable in a United States court, although the facts stated
might have justified a suit for infringement in a United States
court if the complainant had elected that remedy. To sustain the
contention that a breach of the implied agreement not to use the
machine in question except in a particular way might have supported
a suit to forfeit the license, or an action for damages upon the
broken contract, counsel have cited and commented at great length
upon the cases of
Wilson v.
Sandford, 10 How. 99;
Dale Tile Mfg. Co. v.
Hyatt, 125 U. S. 46;
Albright v. Texas, 106 U. S. 613;
Hartell v. Tilghman, 99 U. S. 547;
Pratt v. Paris Gaslight & Coke Co., 168 U.
S. 255;
Keeler v. Standard Folding Bed Co.,
157 U. S. 659, and
Bement v. National Harrow Co., 186 U. S.
70; but an examination of these cases will disclose
that, while in some of them a suit for infringement might have been
brought, the complainants had in fact brought suits to set aside or
enforce contracts relating to patents, or licenses under patents.
They were therefore not "patent cases," but cases determinable upon
principles of general law. In
Excelsior Wooden Pipe Co. v.
Pacific Bridge Co., 185 U. S. 282, Mr.
Justice Brown reviews the cases and shows so plainly why they were
not patent cases that we shall only refer to that opinion.
To support their contention that the only remedy for a violation
of the license under which Miss Skou acquired her machine is one in
the state courts, counsel quote a paragraph from the same opinion
in these words:
"Now, it may be freely conceded that, if the licensee had failed
to
Page 224 U. S. 16
observe any one of the three conditions of the license, the
licensor would have been obliged to resort to the state courts,
either to recover the royalties or to procure a revocation of the
license. Such suit would not involve any question under the patent
law."
But the three conditions of the license there referred to were:
first, to pay royalties; second, that the transferee would not
transfer or assign the license without consent of the licensor;
third, that the failure to use the license in the manufacture of
pipe should operate to revoke it. It is evident that the licensee
would not have infringed the patent by either failing to pay
royalties, by assigning the license, or by neglecting to use his
privilege. The licensor would clearly have been compelled to rely
wholly upon his contract, as such, in any suit for the violation of
any of the conditions named.
The test of jurisdiction is this: does the complainant
"set up some right, title, or interest under the patent laws of
the United States, or make it appear that some right or privilege
will be defeated by one construction, or sustained by another, of
those laws?"
Excelsior Wooden Pipe Co. v. Pacific Bridge Co.,
185 U. S. 282;
Pratt v. Paris Gaslight & Coke Co., 168 U.
S. 255,
168 U. S. 259;
White v. Rankin, 144 U. S. 628.
The bill alleges that the complainant's patent has been
infringed by the breach of the conditions upon which the patented
machine was sold. The remedy it seeks is an injunction against
indirect infringement by the defendants. The facts stated upon the
face of the bill may be insufficient to show an infringement of the
patent, but the right to treat the conduct of the defendants as an
indirect infringement is a right which the complainant sets up as
arising under the patent law. One construction of the scope of the
grant will sustain the rights asserted, if the facts be as alleged,
and another will defeat those rights.
Page 224 U. S. 17
Whether a patentee may lawfully impose such restrictions and
whether their violation constitutes an infringement are obviously
questions arising under the patent law. In
Littlefield v.
Perry, 21 Wall. 205,
88 U. S. 222,
this Court said:
"An action which raises a question of infringement is an action
arising 'under the law,' and one who has the right to sue for the
infringement may sue in the circuit court. Such a suit may involve
the construction of a contract as well as the patent, but that will
not oust the court of its jurisdiction. If the patent is involved,
it carries with it the whole case."
Although the complainant might have sued upon the broken
contract, or brought a bill to declare a forfeiture of the
licensee's rights for breach of the implied covenant to operate it
only in connection with materials supplied by it, it has elected to
sue for infringement. To quote from Judge Shipman's opinion in
Magic Ruffle Co. v. Elm City Co. supra:
"It was competent for the complainants to take either one of the
two remedies. . . . They could bring a bill alleging an injury to
their exclusive rights under the laws of the United States, or, as
the residence of the parties gave this Court jurisdiction, could
bring a proper suit setting up the breach of the contract as the
gravamen of their action."
That a patentee may effectually restrict the time, place, or
manner of using a patented machine, so that a prohibited use will
constitute an infringement of the patent, is fully conceded. Thus,
in the printed brief, counsel for defendants say:
"Aside from such special contracts, an agreement that the
article shall be used only in a certain manner can be made only by
way of lease of the article, terminating the lease upon condition
broken, or by way of conditional sale, by breach of which the title
reverts to the seller."
In either such case, counsel say,
"a use of the article in violation of the condition may
terminate the lease or sale of the article
Page 224 U. S. 18
[which] would become the property of the patentee again, and a
use thereof by the lessee or purchaser may constitute a violation
of the patent, for which an infringement may lie. . . . He cannot
make a sale with the condition attached that the article shall be
used or disposed of in a certain manner, leaving the title,
however, in the purchaser in case of a breach of the
condition."
The books abound in cases upholding the right of a patentee
owner of a machine to license another to use it, subject to any
qualification in respect of time, place, manner, or purpose of use
which the licensee agrees to accept. Any use in excess would
obviously be an infringing use, and the license would be no
defense. 3 Robinson, Patents, §§ 915, 916, and notes. This is so
elementary we shall not stop to cite cases.
The contention is not that a patentee may not permit the use of
a patented thing, with such qualifications as he sees fit to
impose, and that a prohibited use will be an infringing one, but
that he can only keep the article within the control of the patent
by retaining the title. To put the contention in another form, it
is that any transfer of the patentee's property right in a patented
machine carries with it the right to use the entire invention so
long as the identity of the machine is preserved, irrespective of
any restrictions placed by the patentee upon the use of the
article, and accepted by the buyer. It is said that, by such a
sale, the patentee "disposes of all his rights under his patent,
and thereby removes the article from the operation of the patent
law." If he attempts to sell the machine for specified uses only,
and prohibit all others, the restriction is disposed of as
constituting a collateral agreement such as any vendor of personal
property might impose, and enforceable, if valid at all, only as a
collateral contract.
The issue is a plain one. If it be sound, it concludes the case,
and our response should be a negative one, since
Page 224 U. S. 19
the violation of a mere collateral contract, which is not also
an infringement of the patent, would not be a case arising under
the patent law. But is it true that, where a patentee sells his
patented machine for a specific and limited use, he does not
thereby reserve to himself, as patentee, the exclusive right to all
unpermitted uses which may be made of his invention as embodied in
the machine sold? Obviously this is a question arising under the
patent law. By a sale of a patented article subject to no
conditions, the purchaser undeniably acquires the right to use the
article for all the purposes of the patent, so long as it endures.
He may use it where, when, and how he pleases, and may dispose of
the same unlimited right to another. This has long been the settled
doctrine of this and all patent courts.
Mitchell
v. Hawley, 16 Wall. 544;
Livigston
v. Woodworth, 15 How. 546, [argument of counsel --
omitted]550;
Adams v.
Burke, 17 Wall. 453,
84 U. S. 456;
Folding Bed Case, 157 U. S. 659,
157 U. S. 666.
By such an unconditional sale of the thing patented, it is said to
be "no longer within the limits of the monopoly. It passes outside
of it, and is no longer under the protection of the Act of
Congress."
In the cases cited above, as well as in the leading case of
Bloomer v.
McQuewan, 14 How. 539, the statement that a
purchaser of a patented machine has an unlimited right to use it
for all the purposes of the invention, so long as the identity of
the machine is preserved, was made of one who bought
unconditionally -- that is, subject to no specified limitation upon
his right of use. The question of the effect of limitations upon
the right of use arose, however, in
Mitchell v. Hawley,
and there we find the distinction was deemed material and the
effect declared.
In that case, one Taylor was the patentee, under a grant for a
term of fourteen years, for a machine for felting hats. By what Mr.
Justice Clifford calls "a conveyance or license, subject to certain
restrictions or limitations,"
Page 224 U. S. 20
one Bayley was given the
"exclusive right to make and use and to license to others the
right to use the said machines in the states of Massachusetts and
New Hampshire, during the remainder of the original term of said
letters patent,"
subject to a stipulation that
"the licensee shall not in any way or form dispose or sell or
grant any license to use the said machines beyond the expiration of
the original term."
There was also a provision that, if the term of the patent
should be extended, Bayley should have the right to control the
same in those two states, upon paying a reasonable compensation,
etc.
Bayley, as such licensee, made and sold four machines to the
appellant Mitchell, with the right to use them for felting hats in
the Town of Haverhill, Massachusetts, "under Taylor's patent
bearing date May 3, 1864." Before the patent expired, it was
extended for the further term of seven years, the benefits of which
extension for the said two states were assigned to the appellee
Hawley. Hawley then filed his bill to restrain Mitchell from using
the four identical machines which had been sold to him by Bayley.
From a decree restraining their further use, Mitchell appealed. Mr.
Justice Clifford, before stating the facts upon which the judgment
must rest as to the right of Mitchell as the purchaser of the
machines to continue their use after the expiration of the original
term of Taylor's patent, and after directing attention to what he
termed "the well grounded distinction between the grant of the
right to make and vend the patented machine and the grant of the
right to use it," which, he says, "was first satisfactorily pointed
out by the late Chief Justice Taney, with his accustomed clearness
and precision," says (p.
55 U. S.
548):
"Purchasers of the exclusive privilege of making or vending the
patented machine hold the whole or a portion of the franchise which
the patent secures, depending upon the nature of the conveyance,
and, of course, the interest
Page 224 U. S. 21
which the purchaser acquires terminates at the time limited for
its continuance by the law which created the franchise, unless it
is expressly stipulated to the contrary. But the purchaser of the
implement or machine for the purpose of using it in the ordinary
pursuits of life stands on different grounds, as he does not
acquire any right to construct another machine, either for his own
use or to be vended to another for any purpose. Complete title to
the implement of machine purchased becomes vested in the vendee by
the sale and purchase, but he acquires no portion of the franchise,
as the machine, when it rightfully passes from the patentee to the
purchaser, ceases to be within the limits of the monopoly."
In the succeeding paragraph, he in effect limits what was above
said to unconditional sales of such patented machines by adding
this:
"Patented implements or machines sold to be used in the ordinary
pursuits of life become the private individual property of the
purchasers, and are no longer specifically protected by the patent
laws of the state where the implements or machines are owned and
used. Sales of the kind may be made by the patentee with or without
conditions, as in other cases; but where the sale is absolute, and
without any conditions, the rule is well settled that the purchaser
may continue to use the implement or machine purchased until it is
worn out, or he may repair it or improve upon it as he pleases, in
same manner as if dealing with property of any other kind."
The force and bearing of this opinion cannot be escaped by
suggesting that the court was referring to mere common law
contractual conditions, for the suit was to restrain infringement
by the use of four machines which had been sold, not leased.
That the bill was one alleging and seeking to enjoin further use
as an infringement of the patent is shown by the statement that
"they," referring to the purchaser
Page 224 U. S. 22
Mitchell and those associated with him,
"appeared to the suit and filed an answer setting up as a
defense to the charge of infringement that they are by law
authorized to continue to use the four machines just the same under
the extended letters patent as they had the right to do under the
original patent, when the purchase was made by those under whom
they claim, which is the only question in the case."
The question argued, as shown by the brief, as set out in the
report, was there, as here, that, by a sale of the machines "they
were taken out of the reach of the patent law altogether, and that,
as long as the machines themselves lasted, the owner could use
them." For the patentee it was urged that
"the right to make and use and to license others to use was
expressly limited by apt words, showing clearly an intent that it
should not survive the original term of the patent."
This latter was the argument which prevailed. Mr. Justice
Clifford, after referring to the principle of law that one cannot
convey a better title or right than he has, said, touching the
restriction imposed by Bayley on the machines sold by him to
Mitchell:
"The form of the license which he gave to the purchaser shows
conclusively that he understood that he was not empowered to give a
license which should extend beyond that limitation."
Later, referring to this sale with license to use, the learned
Justice says:
"The terms of the license which the seller gave to the
purchasers were sufficient to put them upon inquiry, and it is
quite obvious that the means of knowledge were at hand, and that,
if they had made the least inquiry they would have ascertained that
their grantor could not give them any title to use the machine
beyond the period of fourteen years from the date of the original
letters patent, as he was only a licensee, and never had any power
to sell a machine so as to withdraw it indefinitely from the
operation of the franchise secured by the patent. "
Page 224 U. S. 23
The distinction between the sale of a machine free from specific
restrictions upon the right of use and a sale subject to such
limitations becomes the more evident in view of the fact that, but
for the license to use only for the remainder of the original
patent term, the purchaser would have acquired the right to
continue the use during an extended term of the same patent. This
was the express holding in the two prior cases of
Wilson v.
Rosseau, 4 How. 646, and
Bloomer v.
McQuewan, 14 How. 539, where the unlimited right of
use by an unconditional purchaser was laid down in the strongest
terms, and which cases are now relied upon by counsel in this case
as equally applicable to a sale subject to a restricted use.
It is obvious that, if Taylor, the patentee, could authorize
Bayley to make and sell the patented machines, subject to the
restriction that he should not sell for use beyond the terms of the
original patent, and that a purchaser of the machines so made and
sold by Bayley, with notice, would infringe the extended patent by
a use after the original term had expired, it is because the
exclusive right of the patentee embraces the right to make and sell
patented machines subject to restrictions upon the right of use,
which, if not observed, will support an action for
infringement.
An absolute and unconditional sale operates to pass the patented
thing outside the boundaries of the patent, because such a sale
implies that the patentee consents that the purchaser may use the
machine so long as its identity is preserved. This implication
arises first because a sale without reservation, of a machine whose
value consists in its use, for a consideration, carries with it the
presumption that the right to use the particular machine is to pass
with it. The rule and its reason is thus stated in Robinson on
Patents, § 824:
"The sale must furthermore be unconditional. Not only may the
patentee impose conditions limiting the use of the patented
article,
Page 224 U. S. 24
upon his grantees and express licensees, but any person having
the right to sell may, at the time of sale, restrict the use of his
vendee within specific boundaries of time or place or method, and
these will then become the measure of the implied license arising
from the sale."
The argument for the defendants ignores the distinction between
the property right in the materials composing a patented machine
and the right to use for the purpose and in the manner pointed out
by the patent. The latter may be and often is the greater element
of value, and the buyer may desire it only to apply to some or all
of the uses included in the invention. But the two things are
separable rights. If sold unreservedly, the right to the entire use
of the invention passes, because that is the implied intent; but
this right to use is nothing more nor less than an unrestricted
license presumed from an unconditional sale. A license is not an
assignment of any interest in the patent. It is a mere permission
granted by the patentee. It may be a license to make, sell, and
use, or it may be limited to any one of these separable rights. If
it be a license to use, it operates only as a right to use without
being liable as an infringer. If a licensee be sued, he can escape
liability to the patentee for the use of his invention by showing
that the use is within his license. But if his use be one
prohibited by the license, the latter is of no avail as a defense.
As a license passes no interest in the monopoly, it has been
described as a mere waiver of the right to sue by the patentee. 2
Robinson, Patents, §§ 806, 808.
We repeat. The property right to a patented machine may pass to
a purchaser with no right of use, or with only the right to use in
a specified way, or at a specified place, or for a specified
purpose. The unlimited right of exclusive use which is possessed by
and guaranteed to the patentee will be granted if the sale be
unconditional. But if the right of use be confined by specific
restriction, the use not permitted is necessarily reserved to the
patentee.
Page 224 U. S. 25
If that reserved control of use of the machine be violated, the
patent is thereby invaded. This right to sever ownership and use is
deducible from the nature of a patent monopoly, and is recognized
in the cases.
In
Sawin v. Guild, 1 Gall. 485, Mr. Justice Story, as
far back as 1813, recognized the distinction by holding that a sale
of patented machines under an execution against the patentee did
not render the sheriff liable under a statute which made any person
liable who should sell a patented device without consent of the
patentee, because the sheriff had merely sold the materials, and
had not undertaken to pass any right of use. But in
Wilder v.
Kent, 15 F. 217, it was held that under such an execution sale
there passed whatever right of use the debtor had if the sale was
unconditional.
Judge Lowell, in
Porter Needle Co. v. National Needle
Co., 17 F. 536, after saying that an absolute and unqualified
sale of a patented machine carried with it the right of use,
said:
"But the mere value of a patented machine is often, and is
proved to be in this case, insignificant in comparison with the
value of its use, and the courts have permitted a severance of
ownership and right of use, if the patentee has chosen to dissever
them, and if his intent is not doubtful."
It is plain from the power of the patentee to subdivide his
exclusive right of use that, when he makes and sells a patented
device, the extent of the license to use which is carried by the
sale must depend upon whether any restriction was placed upon the
use and brought home to the person acquiring the article.
That here the patentee did not intend to sell the machine made
by it subject to an unrestricted use is, of course, undeniable from
the words upon the machine, viz.:
"
LICENSE RESTRICTION"
"This machine is sold by the A. B. Dick Company with the
Page 224 U. S. 26
license restriction that it may be used only with the stencil,
paper, ink, and other supplies made by A. B. Dick Company."
The meaning and purpose of this restriction was that, while the
property in the machine was to pass to the purchaser, the right to
use the invention was restricted to use with other articles
required in its practical operation, supplied by the patentee. It
was stated at the bar, and appears fully in the opinion of Judge
Ray (149 F. 424), who decided the case in the circuit court, that
the patentee sold its machines at cost, or less, and depended upon
the profit realized from the sale of other nonpatented articles
adapted to be used with the machine, and that it had put out many
thousands of such machines under the same license restriction. Such
a sale, while transferring the property right in the machine,
carries with it only the right to use it for practicing the
invention according to the terms of the license. To no other or
greater extent does the patentee consent to the use of the machine.
When the purchaser is sued for infringement by using the device, he
may defend by pleading not the general and unlimited license which
is carried by an unconditional sale, but the limited license
indicated by the metal tablet annexed to the machine. If the use is
not one permitted, it is plainly an infringing use.
If, then, we assume that the violation of restrictions upon the
use of a machine made and sold by the patentee may be treated as
infringement, we come to the question of the kind of limitation
which may be lawfully imposed upon a purchaser.
To begin with, the purchaser must have notice that he buys with
only a qualified right of use. He has a right to assume, in the
absence of knowledge, that the seller passes an unconditional title
to the machine, with no limitations upon the use. Where, then, is
the line between a lawful and an unlawful qualification upon the
use? This is a question of statutory construction. But with what
eye
Page 224 U. S. 27
shall we read a meaning into it? It is a statute creating and
protecting a monopoly. It is a true monopoly, one having its origin
in the ultimate authority, the Constitution. Shall we deal with the
statute creating and guaranteeing the exclusive right which is
granted to the inventor with the narrow scrutiny proper when a
statutory right is asserted to uphold a claim which is lacking in
those moral elements which appeal to the normal man? Or shall we
approach it as a monopoly granted to subserve a broad public
policy, by which large ends are to be attained, and therefore to be
construed so as to give effect to a wise and beneficial purpose?
That we must neither transcend the statute, nor cut down its clear
meaning, is plain. In
Bement v. National Harrow Co.,
186 U. S. 70,
186 U. S. 89-92,
this Court quoted with approval the language of Chief Justice
Marshall in
Grant v.
Raymond, 6 Pet. 218,
31 U. S. 241.
Concerning the favorable view which the law takes as to the
protection extended to the exclusive right, the Court, through
Chief Justice Marshall, said:
"It is the reward stipulated for the advantages derived by the
public for the exertions of the individual, and is intended as a
stimulus to those exertions. The laws which are passed to give
effect to this purpose ought, we think, to be construed in the
spirit in which they have been made, and to execute the contract
fairly on the part of the United States, where the full benefit has
been actually received, if this can be done without transcending
the intention of the statute or countenancing acts which are
fraudulent or may prove mischievous. The public yields nothing
which it has not agreed to yield, it receives all which it has
contracted to receive. The full benefit of the discovery, after its
enjoyment by the discoverer for fourteen years, is preserved, and
for his exclusive enjoyment of it during that time the public faith
is pledged."
If the patent be for a machine, the monopoly extends to the
right of making, selling, and using, and these are
Page 224 U. S. 28
separable and substantial rights. In
Bloomer v.
McQuewan, 14 How. 539,
55 U. S. 547,
it is said that the grant is of "the right to exclude everyone from
making, using, or vending the thing without the permission of the
owner." In
Bement v. National Harrow Co., 186 U. S.
70,
186 U. S. 90,
there was involved the legality of certain contracts between
patentees of and dealers in patented harrows. The purpose and
effect of the combination and of the contracts between the parties
was to fix and keep up the prices at which licensees might sell the
patented harrows. It was claimed that the combination and contracts
were obnoxious to the Sherman Act, but, upon the other side, it was
said that, as the contracts concerned only the sale of patented
articles, that act did not apply. The character of the monopoly
granted under the patent act was therefore involved. Touching the
right of the patentee to exclude all others from the use of his
invention, the Court quoted with approval what was said in the
Button-Fastener Case, 77 F. 288, as follows:
"If he see fit, he may reserve to himself the exclusive use of
his invention or discovery. If he will neither use his device nor
permit others to use it, he has but suppressed his own. That the
grant is made upon the reasonable expectation that he will either
put his invention to practical use or permit others to avail
themselves of it upon reasonable terms is doubtless true. This
expectation is based alone upon the supposition that the patentee's
interest will induce him to use, or let others use, his invention.
The public has retained no other security to enforce such
expectations. A suppression can endure but for the life of the
patent, and the disclosure he has made will enable all to enjoy the
fruit of his genius. His title is exclusive, and so clearly within
the constitutional provisions in respect of private property that
he is neither bound to use his discovery himself nor permit others
to use it. "
Page 224 U. S. 29
In the
Paper Bag Case, 210 U.
S. 405, this right to exclude others from all use of the
invention was held to be so comprehensive that a patentee was
allowed to restrain, by injunction, one who was infringing his
patent although he had, during a long-term of years, neither used
his invention himself nor allowed others to use it.
That there are limitations upon the right of vending and using a
patented machine may be conceded. Thus, if the thing patented
belong to a class of things which, on account of their inherent
danger to the public safety or health, cannot be sold or used
because prohibited by an exertion of the police power of a state,
they will not be immune to such a law because patented. Upon this
ground, a patent for "an improved burning oil" was held not to take
the article without the operation of a state statute forbidding the
sale of oil which was unsafe for illuminating purposes.
Patterson v. Kentucky, 97 U. S. 501. And
so in the
Bement case, the Court said of this exclusive
grant of privilege:
"It is true that, in certain circumstances, the sale of articles
manufactured under letters patent may be prevented when the use of
such article may be subject, within the several states, to the
control which they may respectively impose in the legitimate
exercise of their powers over their purely domestic affairs,
whether of internal commerce or of police regulation."
In that case, the question was not one of infringement, but one
arising in a suit to enforce certain contracts directly restraining
commerce in patented articles which were claimed to violate the
Sherman law, although the agreements covered only patented
articles. The Court, after referring to the exceptions to the
patentee's monopoly resulting from conflict with the police power
of the state, said:
"Notwithstanding these exceptions, the general rule is absolute
freedom in the use or sale of rights under the
Page 224 U. S. 30
patent laws of the United States. The very object of these laws
is monopoly, and the rule is, with few exceptions, that any
conditions which are not in their very nature illegal with regard
to this kind of property, imposed by the patentee and agreed to by
the licensee for the right to manufacture or use or sell the
article, will be upheld by the courts. The fact that the conditions
in the contracts keep up the monopoly or fix prices does not render
them illegal."
Now if this was a suit to recover damages upon the contract not
to use the machine except in connection with other articles proper
in its use, made by the patentee, the only possible defense would
be that the agreement was one contrary to public policy, in that it
affected freedom in the sale of such articles to the user of such
machines. But that was the nature of the defense made to the suit
to enforce the agreements under consideration in the
Bement case. The Court in that case found that the
contracts did include interstate commerce within their provisions
and restrained interstate trade, but, with reference to the Sherman
Act, said (p.
186 U. S.
92):
"But that statute clearly does not refer to that kind of a
restraint of interstate commerce which may arise from reasonable
and legal conditions imposed upon the assignee or licensee of a
patent by the owner thereof, restricting the terms upon which the
article may be used and the price to be demanded therefor. Such a
construction of the act, we have no doubt, was never contemplated
by its framers."
As to whether the restrictions upon sales imposed by the
agreements were "legal and reasonable conditions," the Court said
(p.
186 U. S.
93):
"The provision in regard to the price at which the licensor
would sell the article manufactured under the license was also an
appropriate and reasonable condition. It tended to keep up the
price of the implements manufactured
Page 224 U. S. 31
and sold, but that was only recognizing the nature of the
property dealt in, and providing for its value so far as possible.
This the parties were legally entitled to do. The owner of a
patented article can, of course, charge such price as he may
choose, and the owner of a patent may assign it or sell the right
to manufacture and sell the article patented upon the condition
that the assignee shall charge a certain amount for such
article."
If the stipulation in an agreement between patentees and dealers
in patented articles which, among other things, fixed a price below
which the patented articles should not be sold would be a
reasonable and valid condition, it must follow that any other
reasonable stipulation, not inherently violative of some
substantive law, imposed by a patentee as part of a sale of a
patented machine would be equally valid and enforceable. It must
also follow that if the stipulation be one which qualifies the
right of use in a machine sold subject thereto, so that a breach
would give rise to a right of action upon the contract, it would be
at the same time an act of infringement, giving to the patentee his
choice of remedies.
But it has been very earnestly said that a condition restricting
the buyer to use it only in connection with ink made by the
patentee is one of a character which gives to a patentee the power
to extend his monopoly so as to cause it to embrace any subject,
not within the patent, which he chooses to require that the
invention shall be used in connection with. Of course, the argument
does not mean that the effect of such a condition is to cause
things to become patented which were not so without the
requirement. The stencil, the paper, and the ink made by the
patentee will continue to be unpatented. Anyone will be as free to
make, sell, and use like articles as they would be without this
restriction, save in one particular -- namely, they may not be sold
to a user of one of the patentee's machines with intent that
they
Page 224 U. S. 32
shall be used in violation of the license. To that extent,
competition in the sale of such articles for use with the machine
will be affected, for sale to such users for infringing purposes
will constitute contributory infringement. But the same consequence
results from the sale of any article to one who proposes to
associate it with other articles to infringe a patent when such
purpose is known to the seller. But could it be said that the
doctrine of contributory infringement operates to extend the
monopoly of the patent over subjects not within it because one
subjects himself to the penalties of the law when he sells
unpatented things for an infringing use? If a patentee says,
"I may suppress my patent if I will. I may make and have made
devices under my patent, but I will neither sell nor permit anyone
to use the patented things,"
he is within his right, and none can complain. But if he
says,
"I will sell with the right to use only with other things proper
for using with the machines, and I will sell at the actual cost of
the machines to me, provided you will agree to use only such
articles as are made by me in connection therewith"
-- if he chooses to take his profit in this way, instead of
taking it by a higher price for the machines, has he exceeded his
exclusive right to make, sell, and use his patented machines? The
market for the sale of such articles to the users of his machine,
which, by such a condition, he takes to himself, was a market which
he alone created by the making and selling of a new invention. Had
he kept his invention to himself, no ink could have been sold by
others for use upon machines embodying that invention. By selling
it subject to the restriction, he took nothing from others and in
no wise restricted their legitimate market.
A like objection has been made against injunctions restraining
the sale for infringing purposes of a single element in a patent
combination. It was said that to enjoin such sales, although the
thing sold was intended
Page 224 U. S. 33
to be used with other elements to complete an infringing
combination, was to extend the scope of the patent so as to give to
the patentee the same advantage as if the element had been claimed
alone. But in
Davis Electrical Works v. Edison Electric Light
Co., 60 F. 276, 280, Judge Putnam answered this, saying:
"Neither in such instances nor in the case at bar is the course
of the law to be turned aside because the practical result may be
to give a patentee for the time being more than the Patent Office
contemplated, nor is the patentee to be deprived of his just rights
because, under some circumstances, he gets incidental advantages
beyond what he expressly bargained for. We do not in terms give the
patentee the benefit of a claim for the filament alone, nor
prohibit its use in some other combination than that set out in the
second claim if some ingenious way of making such other combination
is ever discovered."
In
Thomson-Houston Electric Co. v. Kelsey Co., 72 F.
1016, the language was adopted by Judge Townsend.
Neither can we see that the liability of the defendants for
aiding and abetting an infringing use by Miss Skou would be
different whether she had made her machine in open defiance of the
rights of the patentee or had bought it under conditions limiting
her right of use. If she had made it, she would have been liable to
an action for infringement for making, and if she used it, she
would become liable for such infringing use. But if the defendants
knew of the patent and that she had unlawfully made the patented
article, and then sold her ink or other supplies without which she
could not operate the machine,
with the intent and purpose that
she should use the infringing article by means of the ink supplied
by them, they would assist in her infringing use.
"Contributory infringement," says Judge Townsend in
Thomson-Houston Co. v. Kelsey, Co., 72 F. 1016,
Page 224 U. S. 34
"has been well defined as the intentional aiding of one person
by another in the unlawful making, or selling, or using of the
patented invention." To the same effect are
Wallace v.
Holmes, 29 Fed.Cas. 74, 79;
Risdon Iron & Locomotive
Works v. Trent, 92 F. 375;
Thomson-Houston Co. v. Ohio
Brass Works, 80 F. 721;
American Graphophone Co. v.
Hawthorne, 92 F. 516.
In the
Risdon case, a member of the firm which made the
plans for the construction of certain mining machinery to be made
in the owner's shop, and then superintended its erection at the
mine, was held to be guilty of infringement, though he neither
personally made nor used the machines which were found to be an
infringement of valid patents. In
American Graphophone Co. v.
Hawthorne, one who sold a machine with knowledge that it was
to be used to produce an infringing article was held to be liable
as an infringer.
For the purpose of testing the consequence of a ruling which
will support the lawfulness of a sale of a patented machine for use
only its connection with supplies necessary for its operation,
bought from the patentee, many fanciful suggestions of conditions
which might be imposed by a patentee have been pressed upon us.
Thus, it is said that a patentee of a coffee pot might sell on
condition that it be used only with coffee bought from him, or, if
the article be a circular saw, that it might be sold on condition
that it be used only in sawing logs procured from him. These and
other illustrations are used to indicate that this method of
marketing a patented article may be carried to such an extent as to
inconvenience the public and involve innocent people in unwitting
infringements. But these illustrations all fail of their purpose,
because the public is always free to take or refuse the patented
article on the terms imposed. If they be too onerous or not in
keeping with the benefits, the patented article will not find a
market. The public, by permitting the invention to go unused, loses
nothing
Page 224 U. S. 35
which it had before, and, when the patent expires, will be free
to use the invention without compensation or restriction. This was
pointed out in the
Paper Bag case, where the inventor
would neither use himself nor allow others to use, and yet was held
entitled to restrain infringement because he had the exclusive
right to keep all others from using during the life of the patent.
This larger right embraces the lesser of permitting others to use
upon such terms as the patentee chooses to prescribe. It must not
be forgotten that we are dealing with a constitutional and
statutory monopoly. An attack upon the rights under a patent
because it secures a monopoly to make, to sell, and to use is an
attack upon the whole patent system. We are not at liberty to say
that the Constitution has unwisely provided for granting a
monopolistic right to inventors, or that Congress has unwisely
failed to impose limitations upon the inventor's exclusive right of
use. And if it be that the ingenuity of patentees in devising ways
in which to reap the benefit of their discoveries requires to be
restrained, Congress alone has the power to determine what
restraints shall be imposed. As the law now stands, it contains
none, and the duty which rests upon this and upon every other court
is to expound the law as it is written. Arguments based upon
suggestions of public policy not recognized in the patent laws are
not relevant. The field to which we are invited by such arguments
is legislative, not judicial. The decisions of this Court, as we
have construed them, do not so limit the privilege of the patentee,
and we could not so restrict a patent grant without overruling the
long line of judicial decisions from circuit courts and circuit
courts of appeal, heretofore cited, thus inflicting disastrous
results upon individuals who have made large investments in
reliance upon them.
The conclusion we reach is that there is no difference, in
principle, between a sale subject to specific restrictions as to
the time, place, or purpose of use and restrictions
Page 224 U. S. 36
requiring a use only with other things necessary to the use of
the patented article purchased from the patentee. If the violation
of the one kind is an infringement, the other is also. That a
violation of any such restriction annexed to a sale by one with
notice constitutes an infringing use has been decided by a great
majority of the circuit courts and circuit courts of appeal, and
has come to be a well recognized principle in the patent law, in
accordance with which vast transactions in respect to patented
articles have been conducted. But it is now said that the numerous
decisions by the lower courts have been erroneous in respect to the
proper construction of the limit of the monopoly conferred by a
patent, and that they should now be overruled. To these courts has
been committed the duty of interpreting and administering the
patent law. There is no power in this Court to review their
judgments, except upon a writ of certiorari, or to direct their
decisions, save through a certified interrogatory for direction
upon a question of law. This power to review by certiorari is one
which has been seldom exercised in patent cases. A line of
decisions which has come to be something like a rule of property,
under which large businesses have been conducted, should at least
not be overruled except upon reasons so clear as to make any other
construction of the patent law inadmissible.
The earliest of the reported cases in which the precise question
here presented arose were cases arising in suits for the
infringement of a patent upon an iron band connected by a buckle,
intended for binding cotton bales. The band and this buckle were of
iron. The buckle was so adjusted as that the band could be removed
from the bale only by cutting. Upon the buckle were stamped the
words: "Licensed to use only once." When cut from the bale, the
band and buckle were sold to persons who used the buckles either
upon a new band, or one repaired, and these bands were sold to
planters to be used again in baling
Page 224 U. S. 37
cotton. The question arose in a number of cases as to whether
such second use of the buckles by one with notice was an infringing
use. In
American Cotton Tie Co. v. Simmons, 3 Ban. &
A. 320, Judge Shepley dismissed the bill. The case, upon appeal to
this Court, was reversed upon the ground that that which had been
done after the first use was a reconstruction, and not a repair,
and was therefore an infringement.
106 U. S. 106 U.S.
89. The Court did not pass upon the question whether a second use
of the buckles would be an infringing use. Another case arising
under the same patent was that of
American Cotton Tie Supply
Co. v. Bullard, 4 Ban. & A. 520, decided by Judge
Blatchford, who gave the question great consideration. "It is
manifest," says Judge Blatchford,
"that the owners of the patents intended, by the stamps on the
buckles and the imprints on the billheads, to grant a restricted
license for the use of the ties and the buckles, and that the
intended restriction was to a use of them once only as baling ties.
The words, 'Licensed to use once only,' stamped on each buckle, was
notice to everyone who handled it that there was attached to it a
restriction in the shape of a license, and of a license merely to
use, and of a license to use only once. This was a lawful
restriction."
Concerning the question of the effect of this restriction upon
subsequent buyers of the cotton with its bands and buckles, the
Court said:
"It is difficult to see how, in view of the facts of the case,
the owners of these patents can properly be said to have sold the
buckles for the purpose of allowing them to be used in the ordinary
pursuits of life, and to pass into the markets of the country as an
ordinary article of commerce. . . . The original license is fairly
a license to have the buckle and the band confine a bale until the
consumer needs to confine the bale no longer, and a license for no
longer time. There is no purchase of buckle and band by a purchaser
of the baled cotton except as he purchases them confining the
cotton,
Page 224 U. S. 38
and to confine it till it reaches the consumer, and such
purchase of buckle and band is, in effect, only a purchase of them
subject to such original license. It is quite as reasonable to say
that the purchaser of the cotton buys subject to such license as it
is to say that the licensor, having imposed the restricted license,
permits it to be instantly destroyed. The former view is consistent
with the original intention, and the latter view is inconsistent
with it."
As indicating the trend of judicial opinion that such license
restrictions annexed to patented articles, when sold, constitute
licenses under the patent, and that their violation by persons
having notice constitutes an infringement of the patent, we here
set out in the margin a number of the reported cases.**
It would lengthen this opinion unreasonably to make
Page 224 U. S. 39
quotations from these opinions to show either the grounds upon
which they go or their applicability. Some of them concern sales
subject to a restriction upon the price upon resale, and others
relate to a requirement that the article sold shall be used only in
connection with certain other things to be bought from the
patentee. We deem it well, however, to refer to the opinion of the
Circuit Court of Appeals of the Eighth Circuit, delivered by Judge
(now MR. JUSTICE) VAN DEVANTER in
National Phonograph Co. v.
Schlegel, cited above, because it draws so clearly the
distinction between a conditional and an unconditional sale of a
patented article. Speaking for the court, Judge VAN DEVANTER
said:
"An unconditional or unrestricted sale by the patentee, or by a
licensee authorized to make such sale, or an article embodying the
patented invention or discovery, passes the article without the
limits of the monopoly, and authorizes the buyer to use or sell it
without restriction; but, to the extent that the sale is subject to
any restriction upon the use or future sale, the article has not
been released from the monopoly, but is within its limits, and, as
against all who have notice of the restriction, is subject to the
control of whoever retains the monopoly. This results from the fact
that the monopoly is a substantial property right conferred by law
as an inducement or stimulus to useful invention and discovery, and
that it rests with the owner to say what part of this property he
will reserve to himself and what part he will transfer to others,
and upon what terms he will make the transfer."
There is no collision between the rule against restrictions upon
the alienation or use of chattels not made under the protection of
a patent and the right of the patentee through his control over his
invention. The distinction is pointed out by MR. JUSTICE HUGHES in
Dr. Miles Medical Co. v. John D. Park & Sons Co.,
220 U. S. 373,
220 U. S.
401.
The English patent law, like our own, grants to the
Page 224 U. S. 40
patentee the exclusive right to make, to sell, and to use. The
decisions of the English courts upon the subject are therefore
worthy of examination, and weight should be attached not only
because of the respect due by reason of the similarity of statutes,
but because many English patentees take out American patents, and
the converse. The English opinions which we shall refer to have to
do with the sale of patented articles with restrictions upon the
use.
The cases of
Incandescent Gaslight Co. v. Cantelo, 12
Patent Law Reports 262, decided in 1895, and
Incandescent
Gaslight Co. v. Brogden, 16 Patent Law Reports 179, decided in
1899, were actions for the infringement of the Welsbach mantle
patent for incandescent gas lighting. The mantles were sold subject
to a license restriction, printed on the box containing them, that
they should be used in connection with burners or apparatus sold or
supplied by the patentee. In the
Cantelo case, Mr. Justice
Wills said:
"The sale of a patented article carries with it the right to use
it in any way that the purchaser chooses to use it, unless he knows
of restrictions. Of course, if he knows of restrictions and they
are brought to his mind at the time of the sale, he is bound by
them. He is bound by them on this principle: the patentee has the
sole right of using and selling the articles, and he may prevent
anybody from dealing with them at all. Inasmuch as he has the right
to prevent people from using them or dealing in them at all, he has
the right to do the lesser thing -- that is to say, to impose his
own conditions. It does not matter how unreasonable or how absurd
the conditions are. It does not matter what they are, if he says at
the time when the purchaser proposes to buy or the person to take a
license: 'Mind, I only give you this license on this condition,'
and the purchaser is free to take it or leave it, as he likes. If
he takes it, he must be bound by the condition. It seems
Page 224 U. S. 41
to be common sense, and not to depend upon any patent law or any
other particular law."
Upon the evidence, it was held that, Cantelo not having bought
direct, he did not have actual knowledge of the restriction, and he
was given judgment for costs upon that defense.
In the subsequent case against Brogden, the complainants were
given an injunction against future infringement, and an accounting
for damages for past infringement, upon the second point in the
claim -- namely, that the defendant had sold, being a dealer, with
notice of the restriction, for use upon a burner not made or
supplied by the patentee. As to the effect of the sale subject to
the license restriction as to the use, Lord Justice Kennedy
said:
"A patentee has a right, not merely by sale without reserve, to
give an unlimited right to the purchaser to use, and thereby to
make a grant from which he cannot derogate, but may attach to it
conditions, and if these conditions are broken, then there is no
license, because the licensee is bound up with the observance of
the conditions."
In
British Mutoscope & Biograph Co. v. Homer, 17
Times Law Reports 213, decided in 1901, it was held that the
purchaser of a mutoscope under a rent distress warrant obtained no
greater right to the use of the patented machine than that which
pertained to the execution debtor, and that, if the debtor had no
right other than a strictly personal right to use, the purchaser
obtained no right to the use. Mr. Justice Farwell, who delivered
the opinion, cited and quoted with approval from the case of the
Incandescent Gaslight Co. v. Brogden, supra, where it was
said that a purchaser who buys with knowledge of the conditions
under which his vendor is authorized to use a patented invention is
bound by such conditions, and that such conditions are not
contractual, but are incident to and a
Page 224 U. S. 42
limitation of the grant of the licensee to use, so that, if the
conditions are broken there is no grant at all.
In
McGruther v. Pitcher, 20 Times Law Reports 652, it
is held that the purchaser of an article made under a patent and
sold originally subject to restrictions as to place or method of
use is not bound by such restrictions unless he buys with notice of
them, as such restrictions do not run with the goods, and are
obligatory only upon those persons who take the article with
knowledge of the conditions.
In the very late case of the
National Phonograph Co. v.
Menck, decided in 1911 by the Judicial Committee of the Privy
Council and reported in 27 Times Law Reports 239, the cases were
cited and reviewed. Referring to the distinction between the
principles applicable to sales of unpatented and patented articles,
Lord Shaw, in delivering the opinion of the court, said (p.
241):
"To begin with, the general principle -- that is to say, the
principle applicable to ordinary goods bought and sold -- is not
here in question. The owner may use and dispose of these as he
thinks fit. He may have made a certain contract with the person
from whom he bought, and to such a contract he must answer. Simply,
however, in his capacity as owner he is not bound by any
restrictions in regard to the use or sale of the goods, and it is
out of the question to suggest that restrictive conditions run with
the goods."
Referring to former cases, he proceeds:
"All that is affirmed is that the general doctrine of absolute
freedom of disposal of chattels of an ordinary kind is, in the case
of patented chattels, subject to the restriction that the person
purchasing them, and in the knowledge of the conditions attached by
the patentee, which knowledge is clearly brought home to himself at
the time of sale, shall be bound by that knowledge and accept the
situation of ownership subject to the limitations. These
limitations are merely the respect paid and the effect given to
those conditions of transfer of the
Page 224 U. S. 43
patented article which the law, laid down by statute, gave the
original patentee a power to impose. Whether the law on this head
should be changed and the power of sale
sub modo should be
withdrawn or limited is not a question for a court. It may be added
that, where a patented article has been acquired by sale, much, if
not all, may be implied as to the consent of the licensee to an
undisturbed and unrestricted use thereof. In short, such a sale
negatives in the ordinary case the imposition of conditions and the
bringing home to the knowledge of the owner of the patented goods
that restrictions are laid upon him."
Lord Shaw then referred to the case of the
Incandescent
Gaslight Co. v. Cantelo, cited above, saying that the judgment
in that case by Mr. Justice Wills forms undoubtedly a leading
authority in the law of England. The passage above set out is then
quoted in full.
The precise question here involved has never been decided by
this Court. It was raised in the
Cotton-Tie case,
106 U. S. 89, but
was passed by, and the case decided upon the single ground that the
defendants had infringed by a reconstruction of the bands after
they had been cut. It was again presented in
Cortelyou v.
Johnson, 207 U. S. 199,
but was not decided because it did not appear that the defendants,
charged as contributory infringers as in the present case, had
notice of the restriction upon the use of the patented machine.
In
Bobbs-Merrill Co. v. Straus, 210
U. S. 345, it was urged that the analogy between the
right of one under the copyright statute to fix the price at which
a copyrighted book might be sold by retailers by a mere notice
accompanying the book, and the right of one selling a patented
article subject to a condition that it should not be sold at less
than a prescribed minimum price was such as to entitle the owner of
the copyright to treat a sale contrary to the notice as an
infringing sale. But this Court declined to consider the rule
applicable to restrictive
Page 224 U. S. 44
licenses accompanying the sale of a patented article,
saying:
"If we were to follow the course taken in the argument, and
discuss the rights of a patentee, under letters patent, and then,
by analogy, apply the conclusions to copyrights, we might greatly
embarrass the consideration of a case under letters patent when one
of that character shall be presented to this Court."
"We may say in passing, disclaiming any intention to indicate
our views as to what would be the rights of parties in
circumstances similar to the present case under the patent laws,
that there are differences between the patent and copyright
statutes in the extent of the protection granted by them. This was
recognized by Judge LURTON, who wrote a leading case on the subject
in the federal courts (
Button-Fastener Case, 77 F. 288),
for he said in the subsequent case of
John D. Park & Sons
Co. v. Hartman, 153 F. 24:"
" There are such wide differences between the right of
multiplying and vending copies of a production protected by the
copyright statute and the rights secured to an inventor under the
patent statutes that the cases which relate to the one subject are
not altogether controlling as to the other."
Touching the question there involved, the Court said (p.
210 U. S.
350):
"The precise question, therefore, in this case is does the sole
right to vend (named in Rev.Stat. § 4952) secure to the owner of
the copyright the right, after a sale of the book to a purchaser,
to restrict future sales of the book at retail, to the right to
sell it at a certain price per copy, because of a notice in the
book that a sale at a different price will be treated as an
infringement, which notice has been brought home to one undertaking
to sell for less than the named sum? We do not think the statute
can be given such a construction, and it is to be remembered that
this is purely a question of statutory construction. There is
Page 224 U. S. 45
no claim in this case of contract limitation, nor license
agreement controlling the subsequent sales of the book."
"In our view, the copyright statutes, while protecting the owner
of the copyright in his right to multiply and sell his production,
do not create the right to impose by notice, such as is disclosed
in this case, a limitation at which the book shall be sold at
retail by future purchasers, with whom there is no privity of
contract. This conclusion is reached in view of the language of the
statute, read in the light of its main purpose to secure the right
of multiplying copies of the work -- a right which is the special
creation of the statute. True, the statute also secures, to make
this right of multiplication effectual, the sole right to vend
copies of the book, the production of the author's thought and
conception. The owner of the copyright in this case did sell copies
of the book in quantities and at a price satisfactory to it. It has
exercised the right to vend. What the complainant contends for
embraces not only the right to sell the copies, but to qualify the
title of a future purchaser by the reservation of the right to have
the remedies of the statute against an infringer because of the
printed notice of its purpose so to do unless the purchaser sells
at a price fixed in the notice. To add to the right of exclusive
sale the authority to control all future retail sales by a notice
that such sales must be made at a fixed sum would give a right not
included in the terms of the statute, and, in our view, extend its
operation by construction beyond its meaning when interpreted with
a view to ascertaining the legislative intent in its
enactment."
Though the Constitution gives to Congress power to promote
"science and useful acts" by securing for a limited time to writers
and inventors "the exclusive right to their respective writings and
discoveries," the legislation for this purpose had to be adapted to
the difference between a "discovery" and a "writing." To secure
to
Page 224 U. S. 46
the author an exclusive right to his "writings," Congress
provided that he should have "the sole liberty of printing,
reprinting, publishing, completing, copying, executing, finishing,
and vending the same." Rev.Stat. § 4952. This is, in short, the
sole right to multiply and vend copies of his production. While
there are resemblances between the right of the author to "vend"
his copyrighted production, and of the patentee to "vend" the
patented thing, the inherent difference between the production of
an author, be it a book, music, or a picture, and that of an
inventor, be it a machine, a process, or an article, is so manifest
that the exclusive right of one to multiply and sell was declared
sufficient to give him that exclusive right to his writings
purposed by the Constitution. To the inventor, by § 4884, Revised
Statutes, there is granted "the exclusive right to make, use, and
vend the invention or discovery." This grant, as defined in
Bloomer v.
McQuewan, 14 How. 549, "consists altogether in the
right to exclude every one from making, using, or vending the thing
patented." Thus, there are several substantive rights, and each is
the subject of subdivision, so that one person may be permitted to
make, but neither to sell nor use, the patented thing. To another
may be conveyed the right to sell, but within a limited area, or
for a particular use, while to another the patentee may grant only
the right to make and use, or to use only for specific purposes.
Adams v.
Burke, 17 Wall. 453;
Mitchell
v. Hawley, 16 Wall. 544;
Providence
Rubber Co. v. Goodyear, 9 Wall. 788,
76 U. S. 798.
Thus, in the case last cited, the license was
"to use the said Goodyear gum-elastic composition for coating
cloth for the purpose of japanning, marbling, and variegate
japanning at his own establishment, but not to be disposed of to
others for that purpose without the consent of the said Charles
Goodyear, . . . the right and license hereby conferred being
limited to the United States, and not extending to any foreign
country, and not being
Page 224 U. S. 47
intended to convey any right to make any contract with the
government of the United States."
Of this license, this Court said:
"It authorizes Chaffee to use it himself. It gave him no right
to authorize others to use it in conjunction with himself, or
otherwise, without the consent of Goodyear, which is not shown, and
not to be presumed. It was to be used at his own establishment, and
not at one occupied by himself and others. Looking at the terms of
the instrument and the testimony in the record, we are satisfied
that its true meaning and purpose were to authorize the licensee to
make and sell India-rubber cloth, to be used in the place, and for
the purposes, of patent or japanned leather. In our judgment, it
conveyed authority to this extent, and nothing more."
The licensees were held to have infringed the license by uses
not permitted.
We have already pointed out that, in the
Bement case,
186 U. S. 91, it
was said in respect of the power of a patentee that, in the sale of
rights under a patent,
"with few exceptions, that any conditions which are not in their
very nature illegal with regard to this kind of property, imposed
by the patentee and agreed to by the licensee, for the right to
manufacture,
or use, or sell the article will be upheld by
the courts."
(Italics ours.) The question, as was said in reference to the
copyright, is one of statutory construction. The kinds of property
rights sought to be guaranteed and the terms of the two statutes
are so different that very different constructions have been placed
upon them. There is no collision whatever between the decision in
the
Bobbs-Merrill case and the present opinion. Each rests
upon a construction of the applicable statute and the special facts
of the cases.
The
Paper Roll Case, 152 U. S. 425, has
been relied upon by the defendants. We do not question that case,
nor anything it
Page 224 U. S. 48
decides. But it has no application to the question here
presented. This is manifest when that case is attentively examined.
First, because here, the ink and other supplies used in the
operation of the complainant's rotary mimeograph patent were not
made elements of the patent, as in the
Paper Roll Case,
and second, the toilet paper fixture in the
Paper Roll
Case was not sold with the license restriction that it was not
to be used except in connection with paper supplied by the
patentee. There was some evidence of a practice to sell the fixture
only to those who used the patentee's paper, but this was far from
proof of a specific license annexed to the sale of the fixtures
that they were sold only to be used with paper supplied by the
patentee. One who bought subject to no such restriction acquired
the right to use the fixture with any paper. The opinion in that
case is considered and analyzed in all of its aspects in the
Button-Fastener Case, 77 F. 288, 298, 299.
We come, then, to the question as to whether "the acts of the
defendants constitute contributory infringement of the
complainants' patent."
The facts upon which our answer must be made are somewhat
meager. It has been urged that we should make a negative reply to
the interrogatory as certified because the intent to have the ink
sold to the licensee used in an infringing way is not sufficiently
made out. Undoubtedly a bare supposition that, by a sale of an
article which, though adapted to an infringing use, is also adapted
to other and lawful uses is not enough to make the seller a
contributory infringer. Such a rule would block the wheels of
commerce. There must be an intent and purpose that the article sold
will be so used. Such a presumption arises when the article so sold
is only adapted to an infringing use.
Rupp & Wittgenfeld
Co. v. Elliott, 131 F. 730. It may also be inferred where its
most conspicuous use is one which will cooperate in an infringement
when sale to such user is invoked by advertisement.
Page 224 U. S. 49
Kalem Co. v. Harper Brothers, decided at this term,
222 U. S. 55.
These defendants are, in the facts certified, stated to have
made a direct sale to the user of the patented article, with
knowledge that, under the license from the patentee, she could not
use the ink sold by them directly to her in connection with the
licensed machine without infringement of the monopoly of the
patent. It is not open to them to say that it might be used in a
noninfringing way, for the certified fact is that they made the
sale, "with the expectation that it would be used in connection
with said mimeograph." The fair interpretation of the facts stated
is that the sale was with the purpose and intent that it would be
so used.
So understanding the import of the question in connection with
the facts certified, we must answer the question certified
affirmatively.
MR. JUSTICE DAY did not hear the argument, and took no part in
the decision of this case.
* This case was argued after the death of MR. JUSTICE HARLAN,
and during the absence of MR. JUSTICE DAY. The opinion of the Court
was delivered by MR. JUSTICE LURTON (
see p.
224 U. S. 11
post), with whom MR. JUSTICE McKENNA, MR. JUSTICE HOLMES, and MR.
JUSTICE VAN DEVANTER concurred; a dissenting opinion was delivered
by MR. CHIEF JUSTICE WHITE (
see p.
224 U. S. 49
post), with whom MR. JUSTICE HUGHES and MR. JUSTICE LAMAR
concurred. After the opinion was delivered, the plaintiff in error
asked leave to file a petition for rehearing, and The Attorney
General and The Solicitor General filed an application and brief on
behalf of the United States for leave to intervene and for a
rehearing of the cause; both application were denied.
**
Dickerson v. Matheson, 57 F. 524, Second Circuit
Court of Appeals;
Heaton-Peninsular Button-Fastener Co. v.
Eureka Specialty Co., 77 F. 288, Sixth Circuit Court of
Appeals;
Tubular Rivet & Stud Co. v. O'Brien, 93 F.
200;
Cortelyou v. Lowe, 111 F. 1005, Second Circuit Court
of Appeals;
Edison Phonograph Co. v. Kaufmann, 105 F. 960;
Edison Phonograph Co. v. Pike, 116 F. 863;
Victor
Talking Machine Co. v. The Fair, 123 F. 424, Seventh Circuit
Court of Appeals;
National Phonograph Co. v. Schlegel, 128
F. 733;
The Fair v. Dover Mfg. Co., 166 F. 117;
Aeolian Co. v. Harry H. Juleg Co., 155 F. 119, Second
Circuit Court of Appeals;
A. B. Dick Co. v. Milwaukee Office
Specialty Co., 168 F. 930;
Crown Cork & Seal Co. v.
Brooklyn Bottle Stopper Co., 172 F. 225;
Rupp & W. Co.
v. Elliott, 131 F. 730, Sixth Circuit Court of Appeals;
Commercial Acetylene Co. v. Autolux Co., 181 F. 387;
Boesch v. Graff, 133 U. S. 697,
where articles made in Germany under a German patent and imported
to this country were held to infringe a United States patent for
the same article, and
Dickerson v. Tinling, 84 Fed.192,
where it was held that one purchasing a patented article in Germany
from the owners of a United States patent, having marked on it a
condition that it should not be imported into the United States,
was held guilty of infringement by bringing it into the United
States.
See also Curtis on Patents, §§ 218, 218a; Walker on
Patents, §§ 300-302;
Wilson v. Sherman, 1 Blatchf.
536.
MR. CHIEF JUSTICE WHITE, with whom concurred MR. JUSTICE HUGHES
and MR. JUSTICE LAMAR, dissenting:
My reluctance to dissent is overcome in this case, first,
because the ruling now made has a much wider scope than the mere
interest of the parties to this record, since, in my opinion, the
effect of that ruling is to destroy, in a very large measure, the
judicial authority of the states by unwarrantedly extending the
federal judicial power. Second, because the result just stated, by
the inevitable development of the principle announced, may not be
confined to sporadic or isolated cases, but will be as broad as
society itself, affecting a multitude of people, and capable of
operation upon every conceivable subject of human contract,
interest, or activity, however
Page 224 U. S. 50
intensely local and exclusively within state authority they
otherwise might be. Third, because the gravity of the consequences
which would ordinarily arise from such a result is greatly
aggravated by the ruling now made, since that ruling not only
vastly extends the federal judicial power, as above stated, but as
to all the innumerable subjects to which the ruling may be made to
apply, makes it the duty of the courts of the United States to test
the rights and obligations of the parties, not by the general law
of the land, in accord with the conformity act, but by the
provisions of the patent law, even although the subjects considered
may not be within the embrace of that law, thus disregarding the
state law, overthrowing, it may be, the settled public policy of
the state, and injuriously affecting a multitude of persons.
Lastly, I am led to express the reasons which constrain me to
dissent because of the hope that, if my forebodings as to the evil
consequences to result from the application of the construction now
given to the patent statute be well founded, the statement of my
reasons may serve a two-fold purpose: first, to suggest that the
application in future cases of the construction now given be
confined within the narrowest limits, and second to serve to make
it clear that, if evils arise, their continuance will not be caused
by the interpretation now given to the statute, but will result
from the inaction of the legislative department in failing to amend
the statute so as to avoid such evils.
Let me briefly recapitulate the facts and the rulings based
thereon. A machine styled a rotary mimeograph was covered by a
patent. The claims of the patent, however, did not embrace the ink
or other materials used in working the machine, nor were they
covered by independent patents. The Dick Company, owner of the
patent, sold one of the machines to a Miss Skou. The entire title
was parted with; in other words, there
Page 224 U. S. 51
was no condition imposed affecting the title or the uses to
which the machine might be applied, or the duration of the use.
Upon the machine, however, was inscribed a notice, styled a License
Restriction, reciting that the machine "may be used only with the
stencil paper, ink, and other supplies made by the A. B. Dick
Company, Chicago, U.S.A." The Henry Company, dealers in ink, sold
to Miss Skou, for use in working her machine, ink not made by the
Dick Company. The court now decides that a use of such ink by Miss
Skou would have been "a use of the machine in a prohibited way" and
would have rendered her "liable to an action under the patent law
for infringement," and that the seller of the ink was liable as an
infringer of the patent on the machine because of the aiding and
abetting a proposed infringing use.
I cannot bring my mind to assent to the conclusion referred to,
and shall state in the light of reason and authority why I cannot
do so. As I have said, the ink was not covered by the patent;
indeed, it is stated in argument, and not denied, that a prior
patent which covered the ink had expired before the sale in
question. It therefore results that a claim for the ink could not
have been lawfully embraced in the patent, and if it had been by
inadvertence allowed, such claim would not have been enforceable.
This curious anomaly, then, results -- that that which was not
embraced by the patent, which could not have been embraced therein,
and which, if mistakenly allowed and included in an express claim,
would have been inefficacious, is now, by the effect of a contract,
held to be embraced by the patent and covered by the patent law.
This inevitably causes the contentions now upheld to come to this:
that a patentee, in selling the machine covered by his patent, has
power by contract to extend the patent so as to cause it to embrace
things which it does not include; in other words, to exercise
legislative power
Page 224 U. S. 52
of a far-reaching and dangerous character. Looking at it from
another point of view, and testing the contention by a
consideration of the rights protected by the patent law and the
rights which an inventor who obtains a patent takes under that law,
the proposition reduces itself to the same conclusion. The natural
right of anyone to make, vend, and use his invention which, but for
the patent law, might be invaded by others is by that law made
exclusive, and hence the power is conferred to exclude others from
making, using, or vending the patented invention.
Paper Bag
Case, 210 U. S. 424,
210 U. S. 425,
and cases cited.
The exclusive right of use of the invention embodied in the
machine which the patent protected was a right to use it anywhere
and everywhere, for all and every purpose of which the machine, as
embraced by the patent, was susceptible. The patent was solely upon
the mechanism which, when operated, was capable of producing
certain results. A patent for this mechanism was not concerned in
any way with the materials to be used in operating the machine, and
certainly the right protected by the patent was not a right to use
the mechanism with any particular ink or other operative materials.
Of course, as the owner of the machine possessed the ordinary right
of an owner of property to use such materials as he pleased in
operating his patented machine, and had the power in selling his
machine to impose such conditions in the nature of covenants not
contrary to public policy as he saw fit, I shall assume that he had
the power to exact that the purchaser should use only a particular
character of materials. But, as the right to employ any desired
operative materials in using the patented machine was not a right
derived from or protected by the patent law, but was a mere right
arising from the ownership of property, it cannot be said that the
restriction concerning the use of the materials was a restriction
upon the use of the machine protected
Page 224 U. S. 53
by the patent law. When I say it cannot be said, I mean that it
cannot be so done in reason, since the inevitable result of so
doing would be to declare that the patent protected a use which it
did not embrace. And this, after all, serves to demonstrate that it
is a misconception to qualify the restriction as one on the use of
the machine when in truth, both in form and substance, it was but a
restriction upon the use of materials capable of being employed in
operating the machine. In other words, every use which the patent
protected was transferred to Miss Skou, and the very existence of
the particular restriction under consideration presupposes such
right of complete enjoyment, and because of its possession there
was engrafted a contract restriction not upon the use of the
machine, but upon the materials. And these considerations are
equally applicable to the exercise of the exclusive right to vend
protected by the patent unless it can be said that, by the act of
selling a patented machine and disposing of all the use of which it
is capable, a patentee is endowed with the power to amplify his
patent by causing it to cover in the future things which, at the
time of the sale, it did not embrace.
But the result of this analysis serves at once again to
establish, from another point of view, that the ruling now made in
effect is that the patentee has the power, by contract, to extend
his patent rights so as to bring within the claims of his patent
things which are not embraced therein, thus virtually legislating
by causing the patent laws to cover subjects to which, without the
exercise of the right of contract, they could not reach, the result
not only to multiply monopolies at the will of an interested party,
but also to destroy the jurisdiction of the state courts over
subjects which, from the beginning, have been within their
authority.
The vast extent to which the results just stated may be carried
will be at once apparent by considering the facts
Page 224 U. S. 54
of this case, and bearing in mind that this is not the suit of a
patentee against one with whom he has contracted to enforce, as
against such person, an act done in violation of a contract as an
infringement, but it is against a third person who happened to deal
in an ordinary commodity of general use with a person with whom the
patentee had contracted. And this statement shows that the effect
of the ruling is to make the virtual legislative authority of the
owner of a patented machine extend to every human being in society,
without reference to their privity to any contract existing between
the patentee and the one to whom he has sold the patented machine.
It is worthy of observation that the vast power which the ruling
confers upon the holders of patented inventions does not alone
cause controversies which otherwise would be subject to the state
jurisdiction to become matters of exclusive federal cognizance, but
subjects the rights of the parties when in the federal forum to the
patent law to the exclusion of the state law which otherwise would
apply, and it may be to the overthrow of the settled public policy
of the state wherein the dealings involved take place. All these
results are in a measure comprehensively portrayed by the decree of
the circuit court. They are, moreover, vividly shown by a reference
made by the court to, and the putting aside as inapplicable of, a
previous decision of this Court (
Dr. Miles Medical Co. v. John
D. Park & Sons Co., 220 U. S. 373),
which, if here applied, would cause the alleged license to be held
void as against public policy. As the theory upon which the
Miles Medical Company case is treated as inapplicable is
that this case is one governed by the patent laws, and therefore
not within the rule of public policy which the
Miles case
applied, it is made indubitably clear that the ruling now announced
endows the patentee with a right by contract not only to produce
the fundamental change as to jurisdiction of the state and federal
courts to which I have referred, but also to bring about the
overthrow
Page 224 U. S. 55
of the public policy both of the state and nation, which I at
the outset indicated was a consequence of the ruling now made.
I do not think it necessary to stop to point out the innumerable
subjects which will be susceptible of being removed from the
operation of state judicial power, and the fundamental and radical
character of the change which must come as a result of the
principle decided. But nevertheless, let me give a few
illustrations:
Take a patentee selling a patented engine. He will now have the
right by contract to bring under the patent laws all contracts for
coal or electrical energy used to afford power to work the machine,
or even the lubricants employed in its operation. Take a patented
carpenter's plane. The power now exists in the patentee by contract
to validly confine a carpenter purchasing one of the planes to the
use of lumber sawed from trees grown on the land of a particular
person, or sawed by a particular mill. Take a patented cooking
utensil. The power is now recognized in the patentee to bind by
contract one who buys the utensil to use in connection with it no
other food supply but that sold or made by the patentee. Take the
invention of a patented window frame. It is now the law that the
seller of the frame may stipulate that no other material shall be
used in a house in which the window frames are placed except such
as may be bought from the patentee and seller of the frame. Take an
illustration which goes home to everyone -- a patented sewing
machine. It is now established that, by putting on the machine, in
addition to the notice of patent required by law, a notice called a
license restriction, the right is acquired, as against the whole
world, to control the purchase by users of the machine of thread,
needles, and oil lubricants or other materials convenient or
necessary for operation of the machine. The illustrations might be
multiplied indefinitely. That they are not imaginary is now a
matter of common
Page 224 U. S. 56
knowledge, for, as the result of a case decided some years ago
by one of the circuit courts of appeal, which has been followed by
cases in other circuit courts of appeal, to which reference will
hereafter be made, what prior to the first of those decisions on a
sale of a patented article was designated a condition of sale,
governed by the general principles of law, has come in practice to
be denominated a license restriction, thus, by the change of form,
under the doctrine announced in the cases referred to, bring the
matters covered by the restriction within the exclusive sway of the
patent law. As the transformation has come about in practice since
the decisions in question, the conclusion is that it is
attributable as an effect caused by the doctrine of those cases.
And, as I have previously stated, it is a matter of common
knowledge that the change has been frequently resorted to for the
purpose of bringing numerous articles of common use within the
monopoly of a patent when otherwise they would not have been
embraced therein, thereby tending to subject the whole of society
to a widespread and irksome monopolistic control.
But I need not reason further, since, in my opinion, many
adjudications of this Court directly refute the existence of a
supposed right of extension by contract of the patent laws, and are
therefore, as I understand them, in conflict with the ruling now
made. In
Wilson v.
Sandford (1850), 10 How. 99, the facts were these:
Wilson granted to Sandford and the other defendants the right to
use a patented planing machine, the consideration to be paid in
installments. Each note contained a provision that the title should
revert in case of nonpayment. Upon the theory that the refusal to
pay an installment forfeited the rights of the licensees, Wilson
sued to restrain the further use of the machine on the ground that
such use was an infringement of his patent rights. It was, however,
decided that the matter in controversy arose
Page 224 U. S. 57
upon contract, and that the requisite jurisdictional value was
not involved. The claim that jurisdiction could be exercised
because the case arose under the patent laws was thus disposed of
(p.
51 U. S.
101):
"Now the dispute in this case does not arise under any act of
Congress, nor does the decision depend upon the construction of any
law in relation to patents. It arises out of the contract stated in
the bill, and there is no act of Congress providing for or
regulating contracts of this kind. The rights of the parties depend
altogether upon common law and equity principles. The object of the
bill is to have this contract set aside and declared to be
forfeited, and the prayer is, 'that the appellant's reinvestiture
of title to the license granted to the appellees, by reason of the
forfeiture of the contract, may be sanctioned by the court,' and
for an injunction. But the injunction he asks for is to be the
consequence of the decree of the court sanctioning the forfeiture.
He alleges no ground for an injunction unless the contract is set
aside. And if the case made in the bill was a fit one for relief in
equity, it is very clear that whether the contract ought to be
declared forfeited or not, in a court of chancery, depended
altogether upon the rules and principles of equity, and in no
degree whatever upon any act of Congress concerning patent rights.
And whenever a contract is made in relation to them which is not
provided for and regulated by Congress, the parties, if any dispute
arises, stand upon the same ground with other litigants as to the
right of appeal, and the decree of the circuit court cannot be
revised here unless the matter in dispute exceeds $2,000."
The foregoing views were reiterated in
Bloomer v.
McQuewan (1852), 14 How. 539.
In
Hartshorn v.
Day (1856), 19 How. 211, the Court, in commenting
upon the effect upon a license of the nonperformance by the
licensee of a patent right of covenants
Page 224 U. S. 58
made by him, and speaking in particular of a covenant to pay an
annuity to one Chaffee, the patentee, said (p.
60 U. S.
222):
"The payment of the annuity was not a condition to the vesting
of the interest in the patent in Judson, and, of course, . . . the
omission or refusal to pay did not give to Chaffee a right to
rescind the contract, nor have the effect to remit him to his
interest as patentee. The right to the annuity rested in covenant.
. . . The remedy for the breach could rest only upon the personal
obligation of . . . [the covenantor]."
The cases just referred to and others in accord with them were
reviewed in the opinion in
Albright v. Texas, 106 U.
S. 613, decided in 1883. The case was this: a patentee
sold and assigned all his title and interest in the invention
covered by his patents, and the purchasers covenanted to use their
best efforts to introduce the invention, to pay specified royalties
for the use of the patented improvements, etc. The assignor sued in
a state court for a discovery and account and a decree for the
amount of royalties found due, and for general relief. On the
application of the defendants, the cause was removed into a circuit
court upon the theory that the suit was one arising under the
patent laws of the United States, and, in consequence, exclusively
within the cognizance of the courts of the United States. On final
hearing, however, the circuit court remanded the cause as being one
for the settlement of controversies under a contract, of which the
state court had full cognizance. This Court held that, as the
transfer of title was absolute, no rights secured by the patent
under any act of Congress remained in the patentee, and that the
case arose solely upon the contract, and not upon the patent laws
of the United States.
The prior cases on the subject were again reviewed by Mr.
Justice Gray in
Dale Tile Mfg. Co. v. Hyatt (1888),
125 U. S. 46. The
plaintiff sued in a state court to recover
Page 224 U. S. 59
from one who had been licensed by a patentee to make and use
certain patented articles to recover royalties due under the
contract. The defendant contended in the state court that the
subject matter was one exclusively cognizable in the courts of the
United States because the case was one arising under the patent
laws, citing Rev.Stat. § 629, cl. 9, § 711, cl. 5. The contention
was held untenable, and, in the course of the opinion, the Court
said (p.
125 U. S.
52):
"It has been decided that a bill in equity in a circuit court of
the United States by the owner of letters patent, to enforce a
contract for the use of the patent right, or to set aside such a
contract because the defendant has not complied with its terms, is
not within the Acts of Congress by which an appeal to this Court is
allowable in cases arising under the patent laws without regard to
the value of the matter in controversy. Act of July 4, 1836, c.
357, § 17, 5 Stat. 124; Rev.Stat. § 699;
Wilson v.
Sandford, 10 How. 99;
Brown v.
Shannon, 20 How. 55."
Reviewing the decisions in
Hartell v. Tilghman,
99 U. S. 547, and
Albright v. Texas, supra, the Court said (p.
125 U. S.
53):
"It was said by Chief Justice Taney in
Wilson v.
Sandford and repeated by the court in
Hartell v.
Tilghman and in
Albright v. Texas:"
"The dispute in this case does not arise under any act of
Congress; nor does the decision depend upon the construction of any
law in relation to patents. It arises out of the contract stated in
the bill, and there is no act of Congress providing for or
regulating contracts of this kind. The rights of the parties depend
altogether upon common law and equity principles."
"10 How.
51 U. S. 101-102;
106 U. S.
106 U.S. 619."
"Those words are equally applicable to the present case, except
that, as it is an action at law, the principles of equity have no
bearing. This action therefore was within the jurisdiction, and,
the parties being citizens of the same state within the exclusive
jurisdiction of the
Page 224 U. S. 60
state courts, and the only federal question in the case was
rightly decided."
The case of
Keeler v. Standard Folding Bed Co.,
157 U. S. 659,
touches upon the precise question before us. In the course of the
opinion, the Court said -- italics mine -- (p.
157 U. S.
666):
"Upon the doctrine of these cases, we think it follows that one
who buys patented articles of manufacture from one authorized to
sell them becomes possessed of an absolute property in such
articles, unrestricted in time or place. Whether a patentee may
protect himself and his assignees by special contract brought home
to the purchaser is not a question before us, and upon which we
express no opinion.
It is, however, obvious that such a
question would arise as a question of contract, and not as one
under the inherent meaning and effect of the patent laws."
A reference to the foregoing and other decided cases is
contained in the opinion in
Excelsior Wooden Pipe Co. v.
Pacific Bridge Co., 185 U. S. 282. The
suit was by a licensee authorized to manufacture and sell wooden
pipe under certain letters patent, against two defendants, one of
whom was the licensor and owner of the patent. The covenants of the
licensee were (1) to pay a license fee or royalty; (2) not to
transfer or assign the license without the consent of the patentee,
and (3) that the license might be revoked for failure to
manufacture. While, because of peculiar conditions present in the
case, the suit was held to be one arising under the patent laws,
the Court yet observed (p.
185 U. S. 290):
"Now it may be freely conceded that, if the
licensee
had failed to observe any one of the three conditions of the
license, the
licensor would have been obliged to resort to
the state courts either to recover the royalties or to procure a
revocation of the license. Such suit would not involve any question
under the patent law."
The Court, after reciting the facts in the case of
Pratt v.
Page 224 U. S. 61
Paris Gaslight & Coke Co., 168 U.
S. 255, said (pp.
168 U. S.
286-287):
"It was held that the action was not one arising under the
patent laws of the United States, and that to constitute such a
cause, the plaintiff must set up some right, title, or interest
under the patent laws, or at least make it appear that some right
or privilege will be defeated by one construction or sustained by
the opposite construction of those laws. That"
"§ 711 does not deprive the state courts of the power to
determine
questions arising under the patent laws, but
only of assuming jurisdiction of cases arising under those laws.
There is a complete distinction between a case and a question
arising under the patent laws. The former arises when the
plaintiff, in his opening pleadings -- be it a bill, complaint, or
declaration -- sets up a right under the patent laws as ground for
a recovery. Of such the state courts have no jurisdiction. The
latter may appear in the plea or answer or in the testimony. The
determination of such question is not beyond the competency of the
state tribunals."
The case of
Bement v. National Harrow Co., decided at
the same term as the
Wooden Pipe case, illustrates the
doctrine. In that case, the National Harrow Company, the patentee,
commenced the action in a state court of New York to recover
damages for the violation of license contracts pertaining to the
manufacture and sale of a patent harrow, and also sought to
restrain the future violation of the contracts and compel their
specific performance. If, in consequence of the subject matter, the
case was one arising under the patent laws, as it would have been
if the question of infringement of the patent was involved, the
jurisdiction of the courts of the United States was exclusive. The
case was disposed of on its merits in the state courts, and came to
this Court by writ of error upon the question as to whether the
agreements between the licensor and licensee violated
Page 224 U. S. 62
the federal antitrust law, and jurisdiction was entertained and
the federal question was passed upon.
Finally, it seems to me the rulings made in the
Morgain
Envelope Case, 152 U. S. 425, are
so apposite here as practically in reason to foreclose all
controversy on the question. In that case, suit was brought on
three patents, one for an oval roll of paper, the other two for
apparatus for holding the paper. The patentee sold the fixtures or
apparatus only to purchasers of his paper, with the understanding
that the paper would be subsequently purchased of the plaintiff
company. It was held that the patent for the roll of paper was
invalid, but the validity of the apparatus claims, or at least, of
some of them, was not challenged. The defendant sold the paper with
full knowledge of the restriction imposed by the patentee. Mr.
Justice Brown, after quoting from
Chaffee v.
Boston Belting Co., 22 How. 217,
63 U. S. 223,
says (p.
63 U. S.
432):
"The real question in this case is whether, conceding the
combination of the oval roll with the fixture to be a valid
combination, the sale of one element of such combination, with the
intent that it shall be used with the other element, is an
infringement. We are of opinion that it is not. . . . Of course, if
the product itself is the subject of a valid patent, it would be an
infringement of that patent to purchase such product of another
than the patentee; but if the product be unpatentable, it is giving
to the patentee of the machine the benefit of a patent upon the
product, by requiring such product to be bought of him."
Earlier in the opinion it was said (p.
63 U. S.
431):
"The first defense raises the question whether, when a machine
is designed to manufacture, distribute, or serve out to users a
certain article, the article so dealt with can be said to be a part
of the combination of which the machine itself is another part. If
this be so, then it would seem to follow that the log which is sawn
in the
Page 224 U. S. 63
mill, the wheat which is ground by the rollers, the pin which is
produced by the patented machine, the paper which is folded and
delivered by the printing press, may be claimed as an element of a
combination of which the mechanism doing the work is another
element. The motion of the hand necessary to turn the roll and
withdraw the paper is analogous to the motive power which operates
the machinery in the other instances."
Nor, when accurately appreciated, is there any conflict between
the principles so long and firmly established by the cases to which
I have just referred and the doctrine upheld in the
Goodyear Rubber
Case, 9 Wall. 788, and
Mitchell
v. Hawley, 16 Wall. 544. In the
Goodyear
case, the facts were these: the right was conferred upon one
Chaffee by license
"to use the said Goodyear's gum elastic composition for coating
cloth for the purpose of japanning, marbling, and variegate
japanning at his own establishment, but not to be disposed of to
others for that purpose without the consent of the said Charles
Goodyear; . . . the right and license hereby conferred being
limited to the United States and not extending to any foreign
country, and not being intended to convey any right to make any
contract with the government of the United States."
Looking at the terms of the license and the testimony in the
record, the court considered the instrument only "to authorize the
licensee to make and sell India-rubber cloth, to be used in the
place, and for the purpose, of patent or japanned leather." The
patent was held to be infringed because a right of use of the
invention not granted to the licensee, but reserved by the patentee
or his assignee to himself,
viz., "the exclusive right to
manufacture and sell army and navy equipments made of vulcanized
India rubber," etc., had been invaded by the defendants.
In
Mitchell v. Hawley, this was the controversy: a
patentee of certain machines whose original patent had
Page 224 U. S. 64
still between six and seven years to run conveyed to another
person the "right to make and use, and to license to others the
right to make and use, four of the machines" in two states
"during the remainder of the original term of the letters
patent, provided that the said grantee shall not in any way or form
dispose of, sell, or grant any license to use the said machines
beyond the said term."
The licensee constructed and sold four machines to persons who,
as found by the court, had knowledge of the limited title of the
licensee. After the patent had expired and during an extended term
of the patent, the persons to whom the licensee had transferred the
machines made use of the machines in violation of the limitation,
and the owner of the patent sued to prevent the infringement, and
his right to do so was upheld. Stating it to be unquestioned that a
patentee who had absolutely parted with the title to the machine
and with the use which the patent protected must be understood to
have parted with all his exclusive right, and hence ceased to have
any interest in the machine protected by the patent law, the court
maintained the contentions of the complainant on the ground that
the rule just stated did not apply where the patentee did not grant
the entire right covered by the patent, but retained a part thereof
in himself, and therefore a violation of such reserved right was in
conflict with a right still protected by the patent, and an
infringement of the patent. The difference between the rule applied
in that case and the doctrine of the many other cases which we have
cited, and which also exists between the controversy presented in
Mitchell v. Hawley and the one here under consideration,
was simply as follows: (a) that which exists between the conveyance
of all one's rights covered by a patent and a transfer of only a
part of such rights; (b) that which obtains between the ability of
a patentee to protect the right which he enjoys under the patent
law from infringement, and his
Page 224 U. S. 65
want of power, on parting with all his rights under the patent,
to contract so as to secure rights never embraced in his patent,
and to bring such newly acquired contract rights under the
protection of the patent law. That the sale here in question was
one of all the rights which the patent protected has, it seems to
me at the outset, been demonstrated beyond reasonable dispute. I
mean, of course, within the limit of my powers of understanding,
since, looking at the so-called license restriction again and again
with a purpose, if possible, to bring my mind to assent to the view
which the court takes of it, I find it impossible to do so. And in
this connection it is to be observed that the real nature of the
transaction is, in the argument of counsel for the Dick Company,
stated to be directly the opposite of that which the court now
holds it to be. Thus, counsel say:
"In the license plan in issue, the licensor, by limiting the
market at which supplies may be purchased, is merely insuring to
himself a royalty based upon the output of the machine. The
licensor, by requiring the purchase of ink of him, in fact exacting
a royalty (infinitesimal in amount) for every copy of the original
produced by the mimeograph. The very nature of the work of these
machines forbids the use of a fixed money royalty upon the work
produced, since the money value is so small that the expense of the
accounting would be prohibitive of such a method."
A construction of the restriction which, by speaking of license
and licensor, obscures the fact that the restriction itself states
the transaction to have been a sale of the machine and its right of
use, yet, by the very force of the nature of the so-called
restriction, describes it as being, in essence, and effect but a
consideration for the rights parted with, and thus brings the case
within the doctrine of
Wilson v. Sandford, Albright v.
Texas, and other cases which I have referred to.
Page 224 U. S. 66
The distinction between the two rules and the absolute harmony
and cooperation between them had been pointed out before the
decision in
Mitchell v. Hawley, and has been since so
clearly indicated as to my mind to leave no room for contention or
evasion. Let me quote from some of the cases. In one of the early
cases,
Bloomer v.
McQuewan, 14 How. 539, after referring to previous
cases which had marked the distinction between the grant of the
right to make and vend a patented machine and the grant of the
right to use it, the court said (p.
55 U. S.
549):
"The distinction is a plain one. The franchise which the patent
grants consists altogether in the right to exclude everyone from
making, using, or vending the thing patented, without the
permission of the patentee. This is all that he obtained by the
patent. And when he sells the exclusive privilege of making or
vending it for use in a particular place, the purchaser buys a
portion of the franchise which the patent confers. He obtains a
share of the monopoly, and that monopoly is derived from, and
exercised under, the protection of the United States. . . ."
"But the purchaser of the implement or machine for the purpose
of using it in the ordinary pursuits of life stands on different
ground. In using it, he exercises no rights created by the Act of
Congress, nor does he derive title to it by virtue of the franchise
or exclusive privilege granted to the patentee. The inventor might
lawfully sell it to him, whether he had a patent or not, if no
other patentee stood in his way. And when the machine passes to the
hands of the purchaser, it is no longer within the limits of the
monopoly. It passes outside of it, and is no longer under the
protection of the Act of Congress. And if his right to the
implement or machine is infringed, he must seek redress in the
courts of the state, according to the laws of the state, and not in
the courts of the United States, nor under the law of Congress
granting the patent. The implement or machine becomes his private,
individual
Page 224 U. S. 67
property, not protected by the laws of the United States, but by
the laws of the state in which it is situated. Contracts in
relation to it are regulated by the laws of the state, and are
subject to state jurisdiction."
Likewise, in
Adams v.
Burke, 17 Wall. 453, the Court, speaking through
Mr. Justice Miller, said (p.
84 U. S.
456):
"In the essential nature of things, when the patentee, or the
person having his rights, sells a machine or instrument whose sole
value is in its use, he receives the consideration for its use and
he parts with the right to restrict that use. The article, in the
language of the court, passes without the limit of the monopoly.
That is to say, the patentee or his assignee having, in the act of
sale, received all the royalty or consideration which he claims for
the use of his invention in that particular machine or instrument,
it is open to the use of the purchaser without further restriction
on account of the monopoly of the patentees."
Yet, again, in the
Folding Bed Co. Case, 157
U. S. 666, this Court, reiterating the doctrine,
said:
"Upon the doctrine of these cases, we think it follows that one
who buys patented articles of manufacture from one authorized to
sell them becomes possessed of an absolute property in such
articles, unrestricted in time or place. Whether a patentee may
protect himself and his assignees by special contracts brought home
to the purchasers is not a question before us, and upon which we
express no opinion. It is, however, obvious that such a question
would arise as a question of contract, and not as one under the
inherent meaning and effect of the patent laws."
"The conclusion reached does not deprive a patentee of his just
rights, because no article can be unfettered from the claim of his
monopoly without paying its tribute. The inconvenience and
annoyance to the public that an opposite conclusion would occasion
are too obvious to require illustration. "
Page 224 U. S. 68
In view of the settled rule of this Court, established by so
many decisions, I might well refrain from referring to the English
cases and the decisions of lower federal courts relied on as
persuasively supporting the doctrine now announced. But
nevertheless I shall briefly notice the cases.
I pass by the English decisions relied upon with the remark that
it is not perceived how they can have any persuasive influence on
the subject in hand in view of the distinction between state and
national power which here prevails, and the consequent necessity,
if our institutions are to be preserved, of forbidding a use of the
patent laws which serves to destroy the lawful authority of the
states and their public policy. I fail also to see the application
of English cases in view of the possible difference between the
public policy of Great Britain concerning the right, irrespective
of the patent law, to make contracts with the monopolistic
restriction which the one here recognized embodies and the public
policy of the United States on that subject, as established, after
great consideration, by this Court in
Dr. Miles Medical Co. v.
John D. Park & Sons Co., 220 U. S. 373.
See especially on this subject the grounds for dissent in
that case expressed by MR. JUSTICE HOLMES, referring to the English
law, on page
220 U. S. 413.
So far as the various decisions of circuit courts of appeals
which the court refers to are concerned, as they conflict with the
many adjudications of this Court to which I have referred, it seems
to me they ought not to be followed, but should be overruled. It is
undoubted that the leading one of the cases, which all the others
but follow and reiterate, is the
Button-Fastener case, to
which I have previously referred. I shall not undertake to review
that case elaborately, because in substance and effect the theory
upon which it proceeds is in absolute conflict with the many
adjudications of this Court to which I have referred, and the
reasoning which was employed in the case, in my
Page 224 U. S. 69
opinion, in its ultimate aspect rests upon a failure to
distinguish between the principle announced in
Wilson v.
Sandford and followed and applied in the many cases which I
have reviewed, and the doctrine announced and applied in
Mitchell v. Hawley. In other words, the
Button-Fastener case and the confusion which has followed
the application of the ruling made in that case was but the
consequence of failing to observe the difference between the rights
of a patentee which were protected by the patent and those which
arose from contract, and therefore were subject alone to the
general law. In addition, it may be well to observe that the very
groundwork upon which the case preceded has been since
authoritatively declared by this Court to be without foundation.
For instance, it will become apparent for an analysis of the
opinion in the case that it proceeded upon the theory that the
doctrine upheld had been virtually sanctioned in previous
adjudications of this Court. Since the decision, however, this
Court, in the
Bobbs-Merrill Co. v. Straus, 210
U. S. 345, has expressly declared that the doctrine had
never been upheld by this Court. Moreover, also, in the
Bobbs-Merrill case, this Court, in considering one of the
cases principally relied upon, in the opinion in the
Button-Fastener case -- the
Cotton-Tie case --
expressly pointed out that that case had been misconceived in the
opinion in the
Button-Fastener case, and did not have the
significance which had there been attributed to it.
But even if I were to put aside everything I have said, and were
to concede, for the sake of argument, that the power existed in a
patentee, by contract, to accomplish the results which it is now
held may be effected, I nevertheless would be unable to give my
assent to the ruling now made. If it be that so extraordinary a
power of contract is vested in a patentee, I cannot escape the
conclusion that its exercise, like every other power, should be
subject to the law of the land. To conclude otherwise
Page 224 U. S. 70
would be but to say that there was a vast zone of contract lying
between rights under a patent and the law of the land, where
lawlessness prevailed and wherein contracts could be made whose
effect and operation would not be confined to the area described,
but would be operative and effective beyond that area, so as to
dominate and limit rights of everyone in society, the law of the
land to the contrary notwithstanding.
Again, a curious anomaly would result from the doctrine. The
law, in allowing the grant of a patent to the inventor, does not
fail to protect the rights of society; on the contrary, it
safeguards them. The power to issue a patent is made to depend upon
considerations of the novelty and utility of the invention. and the
presence of these prerequisites must be ascertained and sanctioned
by public authority, and although this authority has been favorably
exerted, yet, when the rights of individuals are concerned, the
judicial power is then open to be invoked to determine whether the
fundamental conditions essential to the issue of the patent
existed. Under the view now maintained of the right of a patentee
by contract to extend the scope of the claims of this patent, it
would follow that the incidental right would become greater than
the principal one, since by the mere will of the party rights by
contract could be created, protected by the patent law, without any
of the precautions for the benefit of the public which limit the
right to obtain a patent.
I have already indicated how, since the decision in the
Button-Fastener case, the attempt to increase the scope of
the monopoly granted by a patent has become common by resorting to
the device of license restrictions manifested in various forms, all
of which tend to increase monopoly and to burden the public to the
exercise of their common rights. My mind cannot shake off the dread
of the vast extension of such practices which must come from the
decision of the court now rendered. Who, I submit,
Page 224 U. S. 71
can put a limit upon the extent of monopoly and wrongful
restriction which will arise, especially if by such a power a
contract which otherwise would be void as against public policy may
be successfully maintained?
What could more cogently serve to point to the reality and
conclusiveness of these suggestions than do the facts of this case?
It is admitted that the use of the ink to work the patented machine
was not embraced in the patent, and yet it is now held that, by
contract, the use of materials not acquired from a designated
source has become an infringement of the patent, and exactly the
same law is applied as though the patent in express terms covered
the use of ink and other operative materials. It is not, as I
understand it, denied, and if it were, in the face of the decision
in the
Miles Medical Co. case,
supra, in reason
it cannot be denied, that the particular contract which operates
this result, if tested by the general law, would be void as against
public policy. The contract therefore can only be maintained upon
the assumption that the patent law and the issue of a patent is the
generating source of an authority to contract to procure rights
under the patent law not otherwise within that law, and which could
not be enjoyed under the general law of the land. But here, as upon
the main features of the case, it seems to me this Court has spoken
so authoritatively as to leave no room for such a view. In
Pope
Manufacturing Company v. Gormully, 144 U.
S. 224, the validity of certain stipulations contained
in a license to use patented inventions came under consideration.
It was decided that contracts of that character, like all others,
were to be measured by the law of the land, and were nonenforceable
if they were contrary to general rules of public policy. And it was
further held that, even if contracts of that character were not
void as against general principles of public policy, the aid of a
court of equity would not be given to their enforcement if the
stipulations were unconscionable and
Page 224 U. S. 72
oppressive, as are, in my judgment, aside from the rule of
public policy, the stipulations of the contract here involved.
Indeed, when the decree rendered by the lower court which is now
affirmed and which is excerpted in the margin* is considered, it
seems to me the conclusion cannot be escaped that, although in the
mental process by which it was held that relief under the patent
law could
Page 224 U. S. 73
be afforded, the contract was treated as a restriction upon the
use of the machine covered by the patent, so inexorable was the
contrary result of the contract that, in framing the decree, it
became necessary to give relief upon the theory that the gravamen
of the suit was the violation of a contract stipulation in regard
to unpatented materials.
For these reasons I therefore dissent.
* The circuit court granted a decree in favor of the complainant
for an accounting of profits and damages and for an injunction
restraining the defendants from infringing upon the said letters
patent, and
"from directly or indirectly procuring or attempting to procure,
inducing or attempting to induce, or causing, any breach or
violation of the covenant, condition, or obligation now existing or
which may hereafter exist on the part of vendees or licensees of
said patented and restricted rotary mimeographs to the complainant
by reason of the license restrictions hereinbefore set out, and
particularly from directly or indirectly making or causing to be
made, or selling or causing to be sold, or offering or causing to
be offered, to any person or concern whatsoever, any supplies
adapted for use or capable of being used on said patented or
restricted mimeographs with design or intent that the same shall be
so used in violation of such license restriction; from directly or
indirectly persuading or inducing such persons or concerns to
purchase any such supplies not of the complainant's manufacture and
sale, designed or adapted for use in such machines for use thereon
in violation of such license; from advertising or causing to be
advertised in any manner any supplies intended or designed for use
in said rotary mimeographs in violation of such license; from
publishing or causing to be published any offer, promise, or
inducement designed or intended to procure licensees or vendees of
the said patented and restricted rotary mimeographs to use or
purchase for use in such machine supplies not of the manufacture of
the complainant, in violation of such license, and from doing and
performing any and all other acts or things designed or intended to
persuade or induce said licensees or vendees to violate the
condition or covenant binding upon them with respect to the use of
said rotary mimeograph, and from in any way further interfering
with the business of the said complainant of marketing said
machines and supplies therefor under license restrictions limiting
such machines to use only in conjunction with supplies made by or
procured from said complainant."