Where the decree of a Circuit Court and the order allowing an
appeal both state that the bill was dismissed for want of
jurisdiction, no separate certificate is necessary, and the appeal
may be taken at any time within two years.
If a bill be brought to enforce or set aside a contract, though
such contract be connected with a patent, it is not a suit under
the patent laws, and the jurisdiction of the Circuit Court can only
be maintained upon the ground of diversity of citizenship.
Although the bill be an ordinary bill for the infringement of a
patent, of which the circuit court would have jurisdiction, if the
answer show that it is really a suit upon a contract, the court
should dismiss the bill.
Where a bill is filed by a licensee (the license being set up
merely to show the title of the plaintiff to the patent) against
the patentee and another party to whom the patentee has granted a
conflicting license, the jurisdiction of the court is not ousted by
reason of allegations in the answer that the plaintiff had
forfeited all his rights under the license by failure to comply
with its terms and conditions, by reason of which the license had
been revoked by the patentee.
This was a bill in equity filed by the Excelsior Wooden Pipe
Company, a California corporation, against the Pacific Bridge
Company, also a California corporation, but having a branch in the
City of Seattle, Washington, and Charles P. Allen, for the
infringement of a patent issued to Allen, one of the defendants,
for a wooden pipe.
Beside the usual allegations of a bill for the infringement of a
patent, the plaintiff averred that, prior to the acts charged
against the respondents, the said Charles P. Allen, one of the
defendants, had granted, December 20, 1892, unto the Excelsior
Redwood Company, a California corporation, the exclusive right
within the Pacific states of manufacturing and selling wooden pipe
under his patent to the full end of its term; that the
Excelsior
Page 185 U. S. 283
Redwood Company had, with the written consent of Allen, the
patentee, on December 22, 1892, transferred unto the Excelsior
Wooden Pipe Company, plaintiff, the said exclusive license to it,
from Allen, with all rights and privileges thereunder, and that
Allen had been, and still was, the exclusive owner of the patent,
and the plaintiff the sole and exclusive licensee; that the
plaintiff has ever since and still is engaged in the manufacture
and sale of the patented articles, and has filled all orders
therefor, and is well known as the exclusive licensee, and that
Allen has joined with the plaintiff in suits against infringers of
his patent, all of which have resulted in his favor. The gravamen
of the bill lies in the allegation that, notwithstanding all this,
the defendant, the Pacific Bridge Company, and the said Allen,
have, since such license, conspired to make and sell, and without
the license and consent of your orator, exclusive licensee as
aforesaid, have made and sold, within one year last past, within
the State of Washington, wooden pipe substantially the same as that
described in the patent and embodying the invention, and therefore
it brought this bill to recover damages for this infringement and
for an injunction.
The answer, which was a joint one of both defendants, admitted
the issue and validity of the patent and its ownership by defendant
Allen. It also admitted a license by defendant Allen to plaintiff's
assignor, whereby the latter obtained the exclusive right to make
and sell the patented articles in the territory described, and set
out the license in full; but it denied that this license was a
subsisting one, and alleged an abandonment of the same by the
plaintiff, a forfeiture of all rights thereunder by failure and
refusal to comply with its terms and conditions, and by acts of bad
faith toward the patentee by seeking to defeat the patent and
destroy its monopoly, and a revocation of the license by Allen for
cause in pursuance of the terms of the contract. It also set up
that, after the alleged revocation of the license the defendant
Allen granted a license to his joint defendant, the Pacific Bridge
Company. In short, the only defense was a denial of the license
which lies at the basis of plaintiff's suit, and constitutes its
title to the patent.
The usual replication was filed, and, pending an application
Page 185 U. S. 284
on the part of defendants for an extension of time to take
proofs, the plaintiff, apparently at the suggestion of the court,
moved for a decree in its favor upon the pleadings and affidavits
on file. Upon argument, which was upon the question of jurisdiction
alone, the court held that the suit was not one arising under the
patent laws, but solely out of a contract; that the court had no
jurisdiction, and a decree was entered to that effect. Plaintiff
thereupon appealed to the circuit court of appeals, which dismissed
the case upon the ground that it had no jurisdiction itself over
the appeal, and that, as such appeal was prosecuted from an order
dismissing the bill solely for want of jurisdiction, it should have
been taken to this Court. 109 F. 497. Whereupon the mandate of the
circuit court of appeals being filed in the circuit court, an
appeal from the final decree of that court, which had been entered
November 5, 1900, was taken to this Court.
MR. JUSTICE BROWN delivered the opinion of the Court.
1. Motion is made by defendants to dismiss this appeal upon the
ground that no appeal was taken, and no certificate of the trial
court upon the question of jurisdiction was made by such court
during the term at which the decree was rendered, and that no such
certificate has since or ever been made.
As the appeal was taken directly to this Court, it must appear
under the fifth section of the Court of Appeals Act either that the
question of jurisdiction was certified to this Court or that the
decree appealed from shows upon its face that the sole question
decided was one of jurisdiction. Plaintiff evidently supposed that
the case was a proper one to carry to the court of appeals, but,
its appeal having been there dismissed, it took this
Page 185 U. S. 285
appeal May 27, 1901, from the original decree of the circuit
court made November 5, 1900. This decree, after reciting
"that said suit does not really and substantially involve a
dispute or controversy property within the jurisdiction of this
Court, and that this Court should not further exercise
jurisdiction, it is therefore ordered and decreed that said suit be
and the same is hereby dismissed for want of jurisdiction."
An appeal was taken from this decree, and the order allowing the
appeal states that the appeal was allowed "from the final order and
decree dismissing said suit for want of jurisdiction." This is
clearly a sufficient certificate of the circuit court that the
jurisdiction of that court was in issue, and the only question to
be considered by us relates to the jurisdiction of that court.
Shields v. Coleman, 157 U. S. 168;
In re Lehigh Mining Co., 156 U. S. 322;
Huntington v. Laidley, 176 U. S. 668.
The case being thus in proper condition for appeal, such appeal
could be taken at any time within two years.
Allen v. Southern
Pacific Railroad, 173 U. S. 479;
Holt v. Indiana Mfg. Co., 176 U. S.
68.
2. The most important question is whether this is a suit under
the patent laws of the United States within the meaning of
Rev.Stat. sec. 629, sub. 9, which grants original jurisdiction to
the circuit courts "of all suits at law or in equity arising under
the patent or copyright laws of the United States." The rule is
well settled that, if the suit be brought to enforce or set aside a
contract, though such contract be connected with a patent, it is
not a suit under the patent laws, and jurisdiction of the circuit
court can only be maintained upon the ground of diversity of
citizenship. But difficulties sometimes arise in determining
whether the action be upon a contract or upon the patent. The first
case involving this question was
Wilson v.
Sandford, 10 How. 99, in which a bill filed on the
equity side of the circuit court by the assignee of a patentee, to
set aside a contract in the nature of a license upon the ground
that the licensee had not complied with the terms of the contract,
was held not to be a case under the patent laws. The object of the
bill was to have the license set aside and forfeited, and
plaintiff's title reinvested in him. Such was also the case in
Brown v.
Shannon,
Page 185 U. S. 286
20 How. 55, which was a bill to enforce the specific execution
of certain contracts respecting the use of the patent, and in
Albright v. Texas, 106 U. S. 613,
which was a suit brought by the plaintiff for moneys alleged to be
due under a contract whereby certain letters patent granted to him
were transferred to the defendant. This was clearly a bill to
recover royalties, and no question under the patent laws was
involved.
Dale Tile Mfg. Co. v. Hyatt, 125 U. S.
46, was an action in a state court by the owner of the
patent upon an agreement by which such owner granted an exclusive
license to make and sell the patented articles within a certain
territory. Defendant expressly acknowledged the validity of the
patent. This we held to be clearly within the jurisdiction of the
state court. A like ruling was made in the next case of
Felix
v. Scharnweber, 125 U. S. 54. In
the same line of cases are those of
Marsh v. Nichols,
140 U. S. 344, to
enforce the specific performance of a contract to transfer an
interest in a patent to the plaintiff;
Wade v.Lawder,
165 U. S. 624, and
Pratt v. Paris Light & Coke Co., 168 U.
S. 255, which was an action by patentees in a state
court upon the common counts to recover of the defendant the
stipulated price for manufacturing and setting up an apparatus for
the manufacture of water gas. Defendant pleaded that the plaintiff
had agreed to save it harmless against any suit which might be
brought against it for infringement, and to defend such suits at
their own expense, and averred, among other things, that the
patents were void and an infringement upon prior patents; that
defendant had not kept plaintiffs harmless against such suits, but
had refused to defend a certain suit brought against it, and that
the defendant had rightfully rescinded the contract. 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
"section 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 clear
Page 185 U. S. 287
distinction between a case and a question arising under the
patent laws. The former arises when the plaintiff in his opening
pleading -- 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."
Now, as the bill in this case differs from an ordinary bill for
infringement only in the fact that the suit is by a license against
two defendants, one of whom is the licensor and owner of the
patent, and the license is set forth only for the purpose of
showing title, there would be no difficulty whatever in sustaining
it were it not for the question whether we are not also bound to
consider the averments of the answer. We think this difficulty is
practically settled by a reference to section 5 of the
jurisdictional statute of 1875, 18 Stat. 470, 472, which
provides
"that, if, in any suit commenced in a circuit court, . . . it
shall appear to the satisfaction of the said circuit court at any
time after such suit has been brought, . . . that such suit does
not really and substantially involve a dispute or controversy
properly within the jurisdiction of said circuit court, . . . the
said circuit court shall proceed no further therein, but shall
dismiss the suit,"
etc. While it seems reasonable to say that a jurisdiction once
acquired by the filing of a proper bill ought not to be taken away
by any subsequent pleading, the statute is peremptory in this
particular, and requires the court to dismiss the case whenever at
any time it shall appear that its jurisdiction has been improperly
invoked. We are by no means without authority upon this question.
In
Robinson v. Anderson, 121 U. S. 522, it
was held that, when it appeared, after all the pleadings were
filed, that the averments in the declaration, which alone gave the
court jurisdiction, were immaterial and made for the purpose of
creating a case cognizable by the court, it was the duty of the
circuit court to dismiss the bill for want of jurisdiction. Said
the Chief Justice:
"Even if the complaint, standing by itself, made out a case of
jurisdiction, which we do not decide, it was taken away as soon as
the
Page 185 U. S. 288
answers were in, because if there was jurisdiction at all, it
was by reason of the averments in the complaint as to what the
defenses against the title of the plaintiffs would be, and these
were of no avail as soon as the answers were filed and it was made
to appear that no such defenses were relied on."
In
Williams v. Nottawa, 104 U.
S. 209, this Court went so far as to dismiss a case in
which judgment had been rendered for the plaintiff in the circuit
court, because it appeared from the testimony of the plaintiff that
certain bonds were put in his hands for collection in which he had
no real interest. It was held that it was the duty of the circuit
court, on its own motion, as soon as the evidence was in and the
collusive character of the case shown, to stop all further
proceedings and dismiss the suit, the Chief Justice further
remarking that this proviso of the act 1875 was a salutary one, and
that it was the duty of the circuit courts to exercise their power
under it in proper cases.
See also Wetmore v. Rymer,
169 U. S. 115;
Morris v. Gilmer, 129 U. S. 315;
Lake County v. Dudley, 173 U. S. 243.
Is there anything in the answer to show that the court was bound
to dismiss the bill for want of jurisdiction?
The bill makes the usual allegations of a bill for infringement,
and puts in issue (1) the title of the plaintiff, which in this
case was a license from one of the defendants, fully set forth in
the margin,
* (2) the validity
of the patent, and
Page 185 U. S. 289
(3) the infringement. The answer raises no issue as to the
validity of the patent, or as to the acts charged as infringement.
It admits the license, but denies that it is a subsisting one, and
pleads abandonment of the same by plaintiff, a forfeiture of all
rights thereunder by failure to comply with its terms and
conditions, and by acts of gross had faith towards the patentee by
seeking to defeat the patent, and a revocation of the license by
Allen. It will be observed that the answer raises no question of
the construction of the license, but merely of its existence --
that is, of the title of the plaintiff to sue. Before deciding that
these allegations oust the jurisdiction of the court, it must at
least appear that the plaintiff has another remedy by an action in
a state court. But what remedy has it? All the
Page 185 U. S. 290
agreements and conditions of the license are such as are made by
the plaintiff's assignor, the Excelsior Redwood Company. This
company, the party of the second part, agrees first to pay a
license for or royalty, the time of payment being fixed in a
subsequent sentence; second, that it will neither transfer nor
assign the license without the consent of the patentee (it was
admitted that the patentee consented to the assignment to
plaintiff); third, that in case the licensee should fail to use the
patent in any pipe constructed by them, or from any cause it should
cease to manufacture a wooden pipe, the license shall be at once
revoked. The only clause in the license which the patentee appears
as promisor is that wherein
"he hereby grants, subject to the conditions hereinafter stated,
unto the party of the second part, its successors and assigns, the
exclusive right, license, and privilege, within [certain states] of
manufacturing and selling wooden pipe under and in accordance with
the said letters patent, to the full end of the term of said
letters patent."
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.
But the same does not hold good with respect to the licensee.
There were practically but two ways in which the patentee could
impair the grant he made to the licensee, and those were by a
revocation of the license by a bill in equity or by treating it as
abandoned and revoked, and granting a license to another party. He
elected the latter remedy, and made a contract with the Pacific
Bridge Company to make and sell wooden pipe within the same
territory. A suit in a state court would either be inadequate or
would involve questions under the patent law. If the licensee sued
at law, he would be obliged to establish the fact that the patent
had been infringed, which the patentee might have denied and in any
case could only recover damages for past infringements. If he sued
in equity, he could only pray an injunction against future
infringements; but this is exactly
Page 185 U. S. 291
what he prays in this case, and thereby raises a question under
the patent laws. In either case, the patentee could defeat the
action by showing that he did not infringe -- in either case the
defendant could so frame his answer as to put in issue the title,
the validity, or the infringement of the patent.
The natural and practically the only remedy, as it seems to us,
was for the plaintiff to assert his title under the license, and to
prosecute the defendants as infringers. In doing this, he does what
every plaintiff is bound to do -- namely, set forth his title
either as patentee, assignee, or licensee, and thereby puts that
title in issue. The defendant is at liberty in such a case to deny
the title of the plaintiff by declaring that the license no longer
exists, but in our opinion this does not make it a suit upon the
license or contract, but it still remains a suit for the
infringement of a patent, the only question being as to the
validity of plaintiff's title. There can be no doubt whatever that,
if the plaintiff sued some third person for an infringement of his
patent, the defendant might attack the validity of his license in
the same way, but it would not oust the jurisdiction of the court.
Why should it do so in this case?
Much reliance is placed upon the case of
Hartell v.
Tilghman, 99 U. S. 547, which
was a bill by a
patentee against one with whom he had made
a contract in the nature of a license, alleging that defendants,
after paying the royalty for several months, refused to do certain
other things which he charged to have been a part of the contract,
and thereupon he forbade them further to use his patented process,
and charged them as infringers. Defendants pleaded the contract as
they understood it, and the tender of all that was due plaintiff
under it, and their readiness to perform it.
Plaintiff's case was that there was a verbal agreement that he
should prepare and put up his patented mechanism in defendants'
workshop, and that, after this was done, defendants should take a
license for the use of the invention. The machinery was put up, but
defendants refused to sign the license, apparently upon the ground
that the patentee claimed the right to visit the works of the
defendants, and inspect their books with a view to ascertaining the
amount of work done. The dispute was as
Page 185 U. S. 292
to the terms of the agreement, defendants insisting that they
had never proposed to accept the license with the conditions
mentioned. It was held that the patentee could not sue the
defendants for an infringement, and in answer to the objection that
he had no other remedy, Mr. Justice Miller observed that he could
establish his royalty once every year, and sue at law and recover
every month or every year for what was due, and that, if he desired
to assert his right of examining the works of the defendants, he
could in a proper case compel them to submit to the examination.
The case is the converse of the one under consideration, inasmuch
as it was a suit by the patentee against the licensee for a
violation of his contract, and, as the court observed, the
plaintiff might have brought suit for royalties. As already said,
the
patentee might have done the same in this case, if he
had sought to enforce his contract.
Much more nearly analogous to the case under consideration, and
practically upon all fours with it, is that of
Littlefield v.
Perry, 21 Wall. 205. This was a suit by an assignee
against the patentee, who had made a conveyance to the plaintiff of
his patent with all improvements thereon, within certain states,
for which plaintiff had agreed to pay royalty upon all articles
sold, with a clause of forfeiture in case of nonpayment or neglect,
after due notice, to make and sell the patented articles to the
extent of a reasonable demand therefor. There was by supplementary
document an agreement reserving to the patentee the right to apply
the principle of his invention to one special purpose. It was held
that, whether the plaintiff was an assignee or a licensee, he had a
right to maintain a suit for infringement in his own name in a
federal court against the
patentee. Said the Chief
Justice: "They," the plaintiffs,
"certainly had the exclusive right to the use of the patent for
certain purposes within their territory. They thus held a right
under the patent. The claim is that this right has been infringed.
To determine the suit, therefore, it is necessary to inquire
whether there has been an infringement, and that involves a
construction of the patents. . . . Such a suit may involve the
construction of a contract as well as of a patent, but that will
not oust the court of its jurisdiction. If a patent is involved, it
carries with it the whole case. "
Page 185 U. S. 293
Upon the subject of a licensee suing his own patentee, the Chief
Justice observed:
"A mere licensee cannot sue strangers who infringe. In such
cases, redress is obtained through or in the name of the patentee
or his assignee. Here, however, the patentee is the infringer, and,
as he cannot sue himself, the licensee is powerless, so far as the
courts of the United States are concerned, unless he can sue in his
own name. A court of equity looks to substance, rather than form.
When it has jurisdiction of parties, it grants the appropriate
relief without regard to whether they come as plaintiff or
defendant. In this case, the person who should have protected the
plaintiff against all infringements has become himself the
infringer."
White v. Rankin, 144 U. S. 628, was
a bill by a patentee for infringement, to which there was answer
setting up an agreement between the plaintiff and one of the
defendants to assign to him an interest in the patent on certain
conditions which it was alleged were performed, and certain other
matters which it was alleged gave the defendants the right to make,
use, and sell the patented invention. The case was tried upon a
stipulation admitting that defendants had made and sold the
patented inventions, and that a certain written agreement between
the plaintiff and one of the defendants had been made as above
stated. The circuit court entered a decree dismissing the bill,
which was reversed by this Court. "It" (the court) "appears," said
Mr. Justice Blatchford,
"to have dismissed the bill on the simple ground that the
defendants set up a contract of license from White. The bill being
purely a bill for infringement, founded upon patents, what was set
up by the defendants was set up as a defense, and as showing the
lawful right in them to do what they had done, and as a ground for
the dismissal of the bill because they had not infringed the
patents."
The decree was not one upon the facts of the case, but was
simply a decree that the court had no jurisdiction to try the case.
The subject matter of the action, as set forth in the bill, gave
the court jurisdiction, and exclusive jurisdiction, to try it. All
of the parties to the suit were citizens of California, and if
jurisdiction did not exist under the patent laws, it did not exist
at all.
"The circuit court found nothing as to the existence or
Page 185 U. S. 294
validity of the contract, decree, or deed mentioned in the
stipulation. The stipulation provides that at the hearing the
contract, complaint, answer, decree, and deed set forth in the
stipulation may be offered in evidence, subject to such objections
as might be urged against the originals thereof. The stipulation
further states that the defendants do not admit that anything is
due to the plaintiff from Thompson, and that they do admit that
nothing had been paid by Thompson to the plaintiff under the decree
of the state court of August 26, 1884, and since the making
thereof. All these matters and questions ought to have been
adjudicated by the circuit court before it could find ground to
determine whether or not it should dismiss the bill. Until it had
so adjudicated those questions, the decision in the case of
Hartell v. Tilghman could not apply."
The cases in the circuit courts and courts of appeal are too
numerous to be analyzed, or even cited. One of the most recent and
satisfactory is that of the
Atherton Mach. Co. v.
Atwood-Morrison Co., 102 F. 949, in which it was broadly held
that a suit in which the relief sought is an injunction and a
recovery of damages for the infringement of a patent is one arising
under the patent laws of the United States, although it
incidentally involves a determination of the question of the
ownership of the patent, which was claimed by both complainant and
defendant under separate assignments from the patentee. All the
cases cited herein are reviewed and the jurisdiction sustained.
The difficulty with the defendant's position in the case under
consideration is that it apparently leaves the plaintiff without an
adequate remedy. Defendant has broken no express covenant of the
contract, since it has made no covenant. It has simply ignored the
existence of the contract and granted a license to another party.
It is difficult to see what remedy is available to the plaintiff in
a state court that would not involve the right of the defendant to
use the patent. In other words, it would be an ordinary suit for
infringement in which the federal courts would alone have
jurisdiction. Whether it sued at law or in equity, its damages
would be such as are
Page 185 U. S. 295
usual in cases of infringement, and the only injunction it could
obtain would be against the further use of the invention.
In any suit that could be brought, the title of the plaintiff to
sue must be put in issue, and, that being the title to the patent,
is put in issue in every suit for infringement. We held in
Pratt v. Paris Light & Coke Co., 168 U.
S. 255, with respect to an action in a state court,
which involved the question whether the patents were void and an
infringement upon prior patents, that this did not necessarily oust
the state court of its jurisdiction, and by parity of reasoning we
hold in this case that the mere fact that the suit may involve the
existence of the license does not oust the court of jurisdiction of
a suit for the infringement of a patent.
While we do not intend to allow the jurisdiction of the federal
courts to be invoked primarily for the determination of the
respective rights of parties to a contract concerning patents, yet
when the bill is an ordinary one for an infringement and the answer
puts in issue the title of the plaintiff to sue, we think the
jurisdiction is not ousted by the mere allegation that the license
has been revoked, and that the court is at liberty to go on and
determine that fact. We regard this question as conclusively
settled in
Littlefield v.
Perry, 21 Wall. 205, and
White v. Rankin,
144 U. S. 628, and
have no disposition to disturb it.
The decree of the Circuit Court is therefore
Reversed, and the case remanded to that court for further
proceedings consistent with this opinion.
MR. JUSTICE GRAY did not sit in this case or participate in the
decision.
*
"
License and Agreement"
"This agreement, made this 11th day of March, 1893, by and
between Charles P. Allen, of Denver, Colorado, party of the first
part, and the Excelsior Redwood Company, a corporation duly
organized and existing under and by virtue of the laws of the State
of California, and having its principal place of business in the
City and County of San Francisco in said state, party of the second
part:"
"Witnesseth: That, whereas the party of the first part is the
owner and holder for, to, and in the states and territories
hereinafter mentioned, of the whole right, title, and interest in
and to letters patent of the United States No. 359,590, dated March
22, 1887, for 'wooden pipe.'"
"And, whereas the party of the second part is desirous of
obtaining for, to, and within the said states and territories
hereinafter mentioned an exclusive right, license, and privilege to
manufacture and sell wooden pipe under and in accordance with said
letters patent:"
"Now therefore the parties have agreed as follows: the party of
the first part hereby grants, subject to the conditions hereinafter
stated, unto the party of the second part, its successors and
assigns, the exclusive right, license, and privilege, within the
states of northern California, Oregon, Washington, Nevada, Montana,
and Idaho, and territories of Arizona and Utah, of manufacturing
and selling wooden pipe under and in accordance with the said
letters patent, to the full end of the term of said letters
patent."
"The party of the second part agrees to pay unto the party of
the first part, as a license fee or royalty under this license and
agreement, the following sums, to-wit: one dollar ($1) on every
1,000 feet, board measure, of lumber employed in the manufacture of
said pipe, and two and one-half percent (2 1/2 percent) on the cost
at factory of all steel and iron used in said manufacture."
"The said license or royalty is to be paid by the said party of
the second part to the said party of the first part upon the final
payment to the party of the second part of the contract price on
each and every contract taken by said party of the second part,
involving the manufacture and sale of said patented wooden pipe.
The right, license, and privilege hereby granted is not
transferable or assignable, either in whole or part, by the party
of the second part, without the consent of the party of the first
part. It is agreed that in case the party of the second part shall
fail to use the above-described patent in any pipe constructed by
them, of twelve (12) inches diameter and upwards, or from any cause
the said party of the second part shall cease the manufacture of
wooden pipe, then and in that event all rights and privileges
granted by this agreement and license to the said party of the
second part shall at once be revoked."
"It is understood and agreed that this agreement is binding upon
the heirs, legal representatives and assigns of the party of the
first part, and upon the successors and assigns of the party of the
second part."