1. Letters patent granted by the United States do not exclude
from the operation of the tax or license law of a state the
tangible property in which the invention or discovery is
embodied.
2. A statute of Virginia requires that the agent for the sale of
articles manufactured in other states must first obtain a license,
for which he is required to pay a specific tax for each county in
which he sells or offers to sell them, while the agent for the sale
of articles manufactured in that state, if acting for the
manufacturer, is not required to obtain a license or pay any
license tax.
Held that the statute is in conflict with the
commerce clause of the Constitution of the United States, and
void.
3. Commerce among the states is not free whenever a commodity
is, by reason of its foreign growth or manufacture, subjected by
state legislation to discriminating regulations or burdens.
4.
Welton v. State of Missouri, 91 U. S.
275, and
County of Mobile v. Kimball,
102 U. S. 691,
cited and approved.
This case comes before this Court on a writ of error to the
Supreme Court of Appeals of the State of Virginia, and arose in
this way:
In May, 1880, the plaintiff in error, J. T. Webber, was indicted
in the County Court of Henrico County in that state for unlawfully
selling and offering for sale in that
Page 103 U. S. 345
county, to its citizens, certain machines known as Singer sewing
machines, which were manufactured out of the state, without having
first obtained a license for that purpose from the authorities of
the county, or having paid the tax imposed by law for that
privilege.
The indictment was founded upon the forty-fifth and forty-sixth
sections of the revenue law of the state, which are as follows:
"45. Any person who shall sell, or offer for sale, the
manufactured articles or machines of other states or territories,
unless he be the owner thereof and taxed as a merchant, or take
orders therefor, on commission or otherwise, shall be deemed to be
an agent for the sale of manufactured articles of other states and
territories, and shall not act as such without taking out a license
therefor. No such person shall, under his license as such, sell or
offer to sell such articles through the agency of another, but a
separate license shall be required from any agent or employee who
may sell or offer to sell such articles for another. For any
violation of this section, the person offending shall pay a fine of
not less than fifty dollars nor more than one hundred dollars for
each offense."
"46. The specific license tax upon an agent for the sale of any
manufactured article or machine of other states or territories
shall be twenty-five dollars, and this tax shall give to any party
licensed under this section the right to sell the same within the
county or corporation in which he shall take out his license, and
if he shall sell or offer to sell the same in any other of the
counties or corporations of this state, he shall pay an additional
tax of ten dollars in each of the counties or corporations where he
may sell or offer their agents, selling articles manufactured in
this state, shall pay the specific license tax imposed by this
section."
Acts of Assembly 1875 and 1876, p. 184, c. 162, secs. 45,
46.
To the indictment the accused pleaded "not guilty;" and on the
trial it was proved that he had sold and offered to sell sewing
machines in Henrico County, as charged, but that at the time he was
acting as agent or employee of the Singer Manufacturing Company, a
corporation created under the laws of New Jersey; that this company
had a place of business in Richmond, Va., where it was licensed as
a resident merchant,
Page 103 U. S. 346
for the year beginning May 1, 1880, and had paid the required
license tax, and where it kept a stock of machines for sale; that
the machines sold by the accused were the property of the company,
and were manufactured by it out of the state and in accordance with
specifications of a patent of the United States, granted in 1879 to
one W. C. Hicks, and by him transferred to the company. It also
appeared that the accused had not taken out a license to sell the
machines in Henrico County, and was not himself taxed as a
merchant, and had not taken orders for the machines on commission
or otherwise.
On the trial. his counsel requested the court to instruct the
jury that if they believed the Singer Manufacturing Company had
paid for a general merchant's license for the year beginning May 1,
1880, and received such license, or that the machines sold were
constructed according to the specifications of the patent held by
the company, and that the accused was acting in the sales made only
as its employee, he was entitled to a verdict of acquittal. The
court refused to give these instructions, and, at the request of
the attorney for the Commonwealth, instructed the jury in substance
that if they believed the accused had, at different times within
the year previous to the indictment, sold or offered to sell in
Henrico County to its citizens Singer sewing machines manufactured
beyond the state, and at the time he was neither the manufacturer
himself nor the owner of them, and was not taxed as a merchant in
the county, and had not taken orders therefor on commission or
otherwise, and had not obtained a license to sell the same in the
county, and had not paid to the proper officer the tax imposed by
law for selling the same in that county, they should find him
guilty.
The jury found the accused guilty, and he was sentenced to pay a
fine of fifty dollars and costs. On appeal to the circuit court of
the county, this judgment was affirmed, and on further appeal to
the Supreme Court of Appeals of the state, the judgment of the
circuit court was affirmed. To review the latter judgment, the case
is brought here on writ of error.
Page 103 U. S. 347
MR. JUSTICE FIELD, after stating the case, delivered the opinion
of the Court.
In the county court where the accused was tried, the only
defense presented by his instructions was that he was acting as the
agent of the Singer Manufacturing Company, which had a license from
the state as a resident merchant in Richmond to sell the machines,
and also held a patent of the United States authorizing it to
manufacture and sell them anywhere in the United States. To this
defense the answer is obvious. The license, being limited to the
City of Richmond, gave no authority to the company to sell the
machines elsewhere, and of course gave none to its agent. Besides,
the question as to the extent of the territorial operation of the
license depended upon the construction given by the Court of
Appeals of the state to the statute, and its decision thereon is
not open to review by us. And the right conferred by the patent
laws of the United States to inventors to sell their inventions and
discoveries does not take the tangible property, in which the
invention or discovery may be exhibited or carried into effect,
from the operation of the tax and license laws of the state. The
combination of different materials so as to produce a new and
valuable product or result or to produce a well known product or
result more rapidly or better than before, which constitutes the
invention or discovery, cannot be forbidden by the state, nor can
the sale of the article or machine produced be restricted except as
the production and sale of other articles, for the manufacture of
which no invention or discovery is patented or claimed, may be
forbidden or restricted.
The patent for a dynamite powder does not prevent the state from
prescribing the conditions of its manufacture, storage, and sale so
as to protect the community from the danger of explosion. A patent
for the manufacture and sale of a deadly poison does not lessen the
right of the state to control its handling and use. The legislation
respecting the articles which the state may adopt after the patents
have expired it may equally adopt during their continuance. It is
only the right to the invention or discovery -- the incorporeal
right -- which the state cannot interfere with. Congress never
intended that the patent laws should displace the police powers
Page 103 U. S. 348
of the states, meaning by that term those powers by which the
health, good order, peace, and general welfare of the community are
promoted. Whatever rights are secured to inventors must be enjoyed
in subordination to this general authority of the state over all
property within its limits.
These views find support in the language of this court in
Patterson v. Kentucky, 97 U. S. 501. There
a party was convicted of violating a statute of the state
regulating the inspection and gauging of oils and fluids, the
product of coal, petroleum, or other bituminous substances. The
statute provided that such oils and fluids should be inspected by
an authorized officer of the state before being used, sold, or
offered for sale, and required the inspector to brand, according to
the fact, casks and barrels of the oil with the words "standard
oil," or with the words "unsafe for illuminating purposes." It
imposed a penalty for selling or offering for sale in the state
such oils and fluids as had been condemned. A particular oil, known
as the Aurora oil, which had been thus condemned, was sold by the
accused. A patent for the oil had been issued by the United States
to a party who had assigned it to him, and in defense to the
indictment he asserted the right under the patent to sell the oil
in any part of the United States, and that no state could,
consistently with the federal Constitution and the laws of
Congress, prevent or obstruct its exercise. But the court held this
construction of the Constitution and laws to be inadmissible, and
that the right was to be exercised in subordination to the general
powers which the several states possessed over their purely
domestic affairs, whether of internal commerce or police. After
some just observations upon the police powers of the state, their
extent and object, and a reference to previous decisions, the Court
said, speaking through MR. JUSTICE HARLAN:
"These considerations, gathered from the former decisions of
this court, would seem to justify the conclusion that the right
which the patentee or his assignee possesses in the property
created by the application of a patented discovery, must be enjoyed
subject to the complete and salutary power, with which the states
have never parted, of so defining and regulating the sale and use
of property within their respective limits as to afford protection
to the many against the injurious
Page 103 U. S. 349
conduct of the few. The right of property in the physical
substance, which is the fruit of the discovery, is altogether
distinct from the right in the discovery itself, just as the
property in the instruments or plates by which copies of a map are
multiplied is distinct from the copyright of the map itself."
And again, the enjoyment of the right in the discovery
"may be secured and protected by national authority against all
interference; but the use of the tangible property which comes into
existence by the application of the discovery is not beyond the
control of state legislation simply because the patentee acquires a
monopoly in his discovery."
In accordance with the views thus expressed we can find no
objection to the legislation of Virginia in requiring a license for
the sale of the sewing machines, by reason of the grant of letters
patent for the invention.
There is, however, an objection to its legislation arising from
its discriminating provisions against nonresident merchants and
their agents, and this is presented by the instructions given to
the jury at the request of the attorney of the Commonwealth.
The forty-fifth section of the revenue law declares that
"any person who shall sell or offer for sale the manufactured
articles or machines of other states or territories, unless he be
the owner thereof and taxed as a merchant, or take orders therefor,
on commission or otherwise, shall be deemed to be an agent"
for the sale of those articles, and shall not act as such
without taking out a license therefor. A violation of this
provision subjects the offender to a fine of not less than fifty
dollars nor more than one hundred dollars for each offense.
The forty-sixth section fixes the license tax of the agent for
the sale of such articles at twenty-five dollars. The license only
gives him a right to sell in the county or corporation for which it
is issued. If he sells, or offers to sell, in other counties or
corporations, he must pay in each an additional tax of ten dollars.
The section then declares that
"All persons, other than resident manufacturers or their agents,
selling articles manufactured in the state shall pay the specific
license tax imposed by this section. "
Page 103 U. S. 350
By these sections, read together, we have this result: the agent
for the sale of articles manufactured in other states must first
obtain a license to sell, for which he is required to pay a
specific tax for each county in which he sells or offers to sell
them; while the agent for the sale of articles manufactured in the
state, if acting for the manufacturer, is not required to obtain a
license or pay any license tax. Here there is a clear
discrimination in favor of home manufacturers and against the
manufacturers of other states. Sales by manufacturers are chiefly
effected through agents. A tax upon their agents when thus engaged
is, therefore, a tax upon them, and if this is made to depend upon
the foreign character of the articles, that is, upon their having
been manufactured without the state, it is to that extent a
regulation of commerce in the articles between the states. It
matters not whether the tax be laid directly upon the articles sold
or in the form of licenses for their sale. If, by reason of their
foreign character, the state can impose a tax upon them or upon the
person through whom the sales are effected, the amount of the tax
will be a matter resting in her discretion. She may place the tax
at so high a figure as to exclude the introduction of the foreign
article and prevent competition with the home product. It was
against legislation of this discriminating kind that the framers of
the Constitution intended to guard when they vested in Congress the
power to regulate commerce among the several states.
In
Welton v. State of Missouri, we expressed at length
our views on the subject, and to our opinion we may refer for their
statement. No one questions the general power of the state to
require licenses for the various pursuits and occupations conducted
within her limits, and to fix their amount as she may choose, and
no one on this bench -- certainly not the writer of this opinion --
would wish to limit or qualify it in any respect, except when its
exercise may impinge upon the just authority of the federal
government under the Constitution, or the limitations prescribed by
that instrument. But where a power is vested exclusively in that
government, and its exercise is essential to the perfect freedom of
commercial intercourse between the several states, any interfering
action
Page 103 U. S. 351
by them must give way. This was stipulated in the indissoluble
covenant by which we became one people.
In a recent case we had occasion to consider at some length the
extent of the commercial power vested in Congress, and how far it
is to be deemed exclusive of state authority. Referring to the
great variety of subjects upon which Congress, under that power,
can act, we said that
"some of them are national in their character, and admit and
require uniformity of regulation, affecting alike all the states;
others are local, or are mere aids to commerce, and can only be
properly regulated by provisions adapted to their special
circumstances and localities. Of the former class may be mentioned
all that portion of commerce with foreign countries or between the
states which consists in the transportation, purchase, sale, and
exchange of commodities. Here there can, of necessity, be only one
system or plan of regulations, and that Congress alone can
prescribe. Its nonaction in such cases, with respect to any
particular commodity or mode of transportation, is a declaration of
its purpose that the commerce in that commodity or by that means of
transportation shall be free. There would otherwise be no security
against conflicting regulations of different states, each
discriminating in favor of its own products and citizens and
against the products and citizens of other states."
County of Mobile v. Kimball, 102 U.
S. 691,
102 U. S.
697.
Commerce among the states in any commodity can only be free when
the commodity is exempted from all discriminating regulations and
burdens imposed by local authority by reason of its foreign growth
or manufacture.
The judgment of the Supreme Court of Appeals of Virginia must,
therefore, be reversed, and the cause remanded to it for further
proceedings in accordance with this opinion, and it is
So ordered.
