Judgment for and payment of nominal damages upon a bill in
equity by a patentee, without joining his licensee, against one who
has made and sold a machine in violation of the patent, are no bar
to a bill in equity by the patentee and licensee together, for the
benefit of the licensee, against another person who afterwards uses
the same machine.
This was a bill in equity for an injunction and damages for the
infringement of a patent for an improvement in machines for
threshing and hulling clover seed. The answer set up a former
decree as an estoppel. The case was heard in the circuit court upon
a statement of facts agreed by the parties, by which it appeared to
be as follows:
Birdsell was the inventor and patentee of the improvement, and
granted to the Birdsell Manufacturing Company, a corporation of
which he was the president and active manager and owner of a large
part of the stock, an exclusive oral license to make, vend, and use
his invention, but did not give it authority to license others to
make, vend, and use. The corporation paid him no royalty, but set
apart a sinking fund to defray the expense of defending the patent
in the courts.
A former suit in equity was brought by Birdsell against the
Ashland Machine Company for an infringement of his patent by making
and selling large numbers of machines. The Birdsell Manufacturing
Company was not made a party to that suit, but participated in
instituting it and carrying it on till its close. In that suit, a
perpetual injunction was decreed, and the case was referred to a
master, before whom damages sustained by the Birdsell Manufacturing
Company were proved and claimed, and who reported that the
defendant had made no profits for which it should account, and that
if any damages had been sustained, they had been sustained by the
Birdsell Manufacturing Company, a stranger to the suit, and that
Birdsell, the plaintiff,
Page 112 U. S. 486
was entitled to recover only one dollar as nominal damages. The
Ashland Machine Company afterwards, pending that suit, became
insolvent, and a decree was rendered in Birdsell's favor according
to the master's report, for nominal damages and for costs, which
were paid by that company.
The present suit was brought by Birdsell and the Birdsell
Manufacturing Company against Gerhart Shaliol and John Feikert, who
had used one of the machines manufactured by the Ashland Machine
Company and embraced in the master's report in the suit against
that company.
The circuit court held that in the former suit the Birdsell
Manufacturing Company, although not named as a party plaintiff in
the bill, was in reality a co-plaintiff with Birdsell, and that, by
the final decree in that suit and the recovery and payment of
nominal damages, Birdsell and the Birdsell Manufacturing Company
were estopped to maintain the present bill, and therefore dismissed
the bill, with costs. The plaintiffs appealed to this Court.
MR. JUSTICE GRAY delivered the opinion of the Court. He recited
the facts as above stated and continued:
The plaintiffs in the present suit, Birdsell, the patentee, in
whom is the legal title, and the Birdsell Manufacturing Company,
his licensee, in whom is the beneficial interest, make three
objections to the decree set up by way of estoppel: 1. that the
Birdsell Manufacturing Company was not a party, 2. that the present
defendants were not parties, 3. that only nominal damages were
recovered and paid.
1. A licensee of a patent cannot bring a suit in his own name at
law or in equity for its infringement by a stranger; an action at
law for the benefit of the licensee must be brought in the name of
the patentee alone; a suit in equity may be brought by the patentee
and the licensee together.
Gayler v.
Wilder, 10 How. 477,
51 U. S. 495;
Littlefield v.
Perry, 21 Wall. 205,
88 U. S.
223;
Page 112 U. S. 487
Paper Bag Cases, 105 U. S. 766,
105 U. S. 771.
In a suit in equity brought by the patentee alone, if the defendant
seasonably objected to the nonjoinder of the licensee, the court
might, as Judge Lowell did in
Hammond v. Hunt, 4 Banning
& Arden 111, order him to be joined. But when a suit in equity
has been brought and prosecuted, in the name of the patentee alone,
with the licensee's consent and concurrence, to final judgment from
which, if for too small a sum, an appeal might have been taken in
the name of the patentee, we should hesitate to say that the
licensee, merely because he was not a formal plaintiff in that
suit, could bring a new suit to recover damages against the same
defendant for the same infringement.
2. It is a more serious question whether a decree in favor of
the patentee upon a bill in equity against one person for making
and selling a patented machine is a bar to a subsequent suit by the
patentee against another person for afterwards using the same
machine within the term of the patent. A license from the patentee
to make, use, and sell machines gives the licensee the right to do
so, within the scope of the license, throughout the term of the
patent, and has the same effect upon machines sold by the licensee
under authority of his license, that a sale by the patentee has
upon machines sold by himself, of wholly releasing them from the
monopoly, and discharging all claim of the patentee for their use
by anybody, because such is the effect of the patentee's voluntary
act of licensing or selling, in consideration of the sum paid him
for the license or sale.
Adams v.
Burke, 17 Wall. 453. But an infringer does not, by
paying damages for making and using a machine in infringement of a
patent, acquire any right himself to the future use of the machine.
On the contrary, he may, in addition to the payment of damages for
past infringement, be restrained by injunction from further use,
and when the whole machine is an infringement of the patent, be
ordered to deliver it up to be destroyed.
Suffolk
Co. v. Hayden, 3 Wall. 315,
70 U. S. 320;
Root v. Railway Co., 105 U. S. 189,
105 U. S. 198;
Needham v. Oxley, 8 Law Times (N.S.) 604;
S.C. 2
New Rep.Eq. & Com.Law 388;
Frearson v. Loe, L.R. 9
Ch.D. 48, 67. No more does one who pays damages for selling a
machine in infringement of a patent
Page 112 U. S. 488
acquire for himself or his vendee any right to use that machine.
In the case of a license or a sale by the patentee, the rights of
the licensee or the vendee arise out of contract with him. In the
case of infringement, the liability of infringers arises out of
their own wrongful invasion of his rights. The recovery and
satisfaction of a judgment for damages against one wrongdoer do not
ordinarily confer, upon him or upon others, the right to continue
or repeat the wrong.
This view is in accord with the judgment of Vice-Chancellor Wood
(afterwards Lord Chancellor Hatherley) in two suits brought by a
patentee, the one against the manufacturer and the other against
the user, where the plaintiff asked for an injunction against each,
for an account against the manufacturer, and for damages against
the user, and declined to accept an offer of the user to pay him
the like royalties that other persons paid. It was argued in behalf
of the user that the patentee was not entitled to damages against
him, as well as to an account against the manufacturer, and could
not have an account against the seller without adopting the sale,
and, if he adopted the sale, had no right to get anything from the
purchaser. But the vice-chancellor held that the plaintiff was
entitled to an injunction, to an account, or, upon his waiving
that, to damages against the manufacturer, and also to damages
against the user, and said:
"With regard to the damages, it has never, I think, been held in
this court that an account, directed against a manufacturer of a
patented article, licenses the use of that article in the hands of
all the purchasers. The patent is a continuing patent, and I do not
see why the article should not be followed in every man's hand
until the infringement is got rid of. So long as the article is
used, there is continuing damage. . . . As to the royalties, I
cannot compel the plaintiff to accept the same royalty from these
defendants as he receives from others. I cannot in the decree do
less than give the plaintiff his full right, and I cannot bargain
for him what he may choose or may not choose to do."
Penn v. Bibby, L.R. 3 Eq. 308;
S.C. 15 Weekly
Reporter 192.
3. If one person is in any case exempt from being sued for
damages for using the same machine for the making and selling
Page 112 U. S. 489
of which damages have been recovered against and paid by another
person, it can only be when actual damages have been paid, and upon
the theory that the plaintiff has been deprived of the same
property by the acts of two wrongdoers, and has received full
compensation from one of them. In that view, the case of the
patentee, whose right of property under his patent had been
invaded, would be analogous to that of one from whom personal
property had been taken.
But according to the law of England as well as of America, the
owner of a chattel which others have taken from him and converted
to their own use is not deprived of his property therein by
recovering judgment for damages against any or all of them without
actual satisfaction by somebody. By the law of England, indeed, as
declared by its courts, upon technical grounds, the owner of a
chattel who has recovered judgment for its value in trover against
one of two joint tortfeasors cannot, although that judgment remains
unsatisfied, bring a like action against the other for the same
cause. But even by that law such a judgment against the one without
satisfaction does not vest the property in the chattel in him or
bar a subsequent action against the other for continuing to detain
the chattel. Holroyd and Littledale, JJ., in
Morris v.
Robinson, 5 Dowl. & R. 34, 47, 48;
S.C. 3 B.
& C.196, 206, 207;
Brinsmead v. Harrison, L.R. 6 C.P.
584, and L.R. 7 C.P. 547, 554;
Ex Parte Drake, L.R. 5
Ch.D. 866. In
Brinsmead v. Harrison, Mr. Justice Willes
observed that to say that the mere obtaining judgment for nominal
damages vests the property in the defendant would be an absurdity.
L.R. 6 C.P. 588.
By our law, judgment against one joint trespasser without full
satisfaction is no bar to a suit against another for the same
trespass.
Lovejoy v.
Murray, 3 Wall. 1. The reasons are therefore
stronger, if possible, here than in England for holding that a
judgment for nominal damages against one wrongdoer does not bar a
suit against another for a continuance of the wrong.
The result is that in any view of the case the decree of the
circuit court dismissing this bill was erroneous, and must be
Reversed.
