A patentee of certain machines, whose original patent had 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 patent having, towards the expiration of the original term,
been extended for seven years,
held that an injunction by
a grantee of the extended term would lay to restrain the use of the
four machines, they being in use after the term of the original
patent had expired.
Page 83 U. S. 545
The 18th section of the Patent Act of July 4, 1836, [
Footnote 1] after enacting that patents
may in certain cases be extended, and that "thereupon the said
patent shall have the same effect in law as though it had been
originally granted for the term of twenty-one years," adds:
"And the benefit of such renewal shall extend to assignees and
grantees of the right to use the thing patented to the extent of
their respective interests therein."
With this statutory enactment in force the United States, on the
3d of May, 1853, granted a patent to one Taylor for fourteen years
for improved machinery in felting hats, the patent lasting, of
course, till May 3, 1867.
While the patent was in force, that is to say on the 19th of
November, 1860, Taylor, by deed reciting that one Bayley was
"desirous of obtaining the exclusive right to make and use, and
license to others the right to use the said machines in the states
of Massachusetts and New Hampshire,"
"conveyed to the said Bayley" certain rights, as follows:
"The exclusive right to make and use, and to license to others
the right to use the said machines in the said states of
Massachusetts and New Hampshire, and in no other place or places,
during the remainder of the original term of said letters patent.
Provided, that the said Bayley shall not in any way or form
dispose of, sell, or grant any license to use the said machines
beyond the 3d day of May, A.D. 1867."
"Should the said letters patent be extended beyond the 3d of
May, A.D. 1867, then it is agreed that the said Bayley shall have
the right to control the same in the said states of Massachusetts
and New Hampshire, provided that he shall pay to the said grantor
or his heirs or assigns, a fair and reasonable compensation for the
same, or on terms as favorable as may be offered by any other
person or party. "
Page 83 U. S. 546
In possession of this license Bayley, on the 18th of March,
1864, in consideration of $1,200, licensed one Mitchell and others
of the town of Haverhill, Massachusetts, to run and use two sets
(four machines) for felting hats, in said town of Haverhill,
under Taylor's patent bearing date May 3, A.D. 1864.
Before the patent expired (May 3d, 1867) the Commissioner of
Patents renewed and extended it for the further term of seven
years; and one Hawley, having become the owner of this extended
term for the states of Massachusetts and New Hampshire, filed a
bill against Mitchell and the others to restrain them from using
the four machines which Bayley on the 18th of March, 1864, had give
them license to use, it being admitted that the said Mitchell
et al. were now using those identical machines.
The court below granted the injunction, and the defendants took
this appeal.
MR. JUSTICE CLIFFORD delivered the opinion of the Court.
Patentees acquire by their letters patent the exclusive right to
make and use their patented inventions and to
Page 83 U. S. 547
vend the same to others to be used for the period of time
specified in the patent, but when they have made one or more of the
things patented, and have vended the same to others to be used,
they have parted to that extent with their exclusive right, as they
are never entitled to but one royalty for a patented machine, and
consequently a patentee, when he has himself constructed a machine
and sold it without any conditions, or authorized another to
construct, sell, and deliver it, or to construct and use and
operate it, without any conditions, and the consideration has been
paid to him for the thing patented, the rule is well established
that the patentee must be understood to have parted to that extent
with all his exclusive right, and that he ceases to have any
interest whatever in the patented machine so sold and delivered or
authorized to be constructed and operated. Where such circumstances
appear, the owner of the machine, whether he built it or purchased
it, if he has also acquired the right to use and operate it during
the lifetime of the patent, may continue to use it until it is worn
out, in spite of any and every extension subsequently obtained by
the patentee or his assigns. [
Footnote 2]
Patents were granted, under the prior Patent Act, for the term
of fourteen years, but the provision was that a patentee in certain
cases might have the term extended for seven years from and after
the expiration of the first term, and the same section provided
that the benefit of such renewal shall extend to assignees and
grantees of the right to use the thing patented to the extent of
their respective interests therein, which last provision has
frequently been misunderstood. Such misapprehension has usually
arisen from a failure to keep in view the well founded distinction
between the grant and the right to make and vend the patented
machine, and the grant of the right to use it, as was first
satisfactorily pointed out by the late Chief Justice Taney with his
accustomed clearness and precision. [
Footnote 3]
Page 83 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 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 or 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.
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.
Letters patent were granted to James F. Taylor for new and
useful improvements in machinery for felting hats, bearing date the
third of May, 1853, securing to him the exclusive right to make and
use and to vend to others the right to make and use the said
machines for the term of fourteen years from the date of the
letters patent. Due conveyance or license, subject to certain
restrictions and limitations, was made by the patentee of the
exclusive right to make and use
"and to license to others the
right to use the said machines"
Page 83 U. S. 549
in the states of Massachusetts and New Hampshire,
during the remainder of the original term of said letters
patent, it being expressly stipulated in the instrument of
conveyance that the licensee "
shall not, in any way, or form,
dispose of, sell, or grant any license to use the said
machines beyond the expiration" of the original term. Apart from
that the patentee also stipulated that the said licensee, if the
patent should be extended, should have the right to control the
same in those two states, he paying to the grantors in his license,
or their heirs and assigns, a fair and reasonable compensation for
the same, on terms as favorable as may be offered to any other
person or party. Bayley, as such licensee, on the eighteenth of
March, 1864, constructed four machines, being two sets, and sold
the machines, "with the right to run" the same, to the grantors of
the respondents, for the sum of twelve hundred dollars, executing
to the purchasers at the same time a license under his hand and
seal, authorizing the purchasers, as such licensees,
"to run and use two sets (four machines) for felting hats, in
said town of Haverhill, under Taylor's patent, bearing date as
specified in the original letters patent,"
showing conclusively that the purchasers were referred to the
original letters patent as the source of his authority. Of course
said letters patent expired on the third of May, 1867, and the
record shows that the commissioner, before the term expired,
renewed the letters patent and extended the same for the further
term of seven years from the expiration of the original term, and
that the complainants having become by certain mesne conveyances,
duly recorded, the exclusive assignees of the right, title, and
interest in the renewed letters patent for those two states,
instituted the present suit to restrain the respondents from using
the four machines which they or their grantors purchased of the
licensee under the original letters patent. They 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
Page 83 U. S. 550
by those under whom they claim, which is the only question in
the case.
No one in general can sell personal property and convey a valid
title to it unless he is the owner or lawfully represents the
owner.
Nemo dat quod non habet. Persons, therefore, who
buy goods from one not the owner, and who does not lawfully
represent the owner, however innocent they may be, obtain no
property whatever in the goods, as no one can convey in such a case
any better title than he owns, unless the sale is made in market
overt, or under circumstances which show that the seller lawfully
represented the owner. [
Footnote
4]
Argument to show that the grantor under whom the respondents
claim never acquired the right to sell the machines and give their
purchasers the right to use the same in the ordinary pursuits of
life beyond the term of the original patent is certainly
unnecessary, as the instrument of conveyance from the patentee to
him, which describes all the title he ever had, expressly
stipulates that he shall not in any way or form dispose of, sell,
or grant any license to use the said machines beyond the expiration
of that term of the patent, and the form of the license which he
gave to the purchasers shows conclusively that he understood that
he was not empowered to give a license which should extend beyond
that limitation. Notice to the purchaser in such a case is not
required, as the law imposes the risk upon the purchaser, as
against the real owner, whether the title of the seller is such
that he can make a valid conveyance. Certain exceptions undoubtedly
exist to that rule, but none of them have any application to this
case. Suppose the rule was otherwise, and that the real owner, in
order to defeat the
Page 83 U. S. 551
title of the purchaser, must show that the latter knew what the
facts were, the court would still be of the opinion that the decree
ought to be affirmed, as 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 machines 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.
Decree affirmed.
[
Footnote 1]
5 Stat. at Large 125.
[
Footnote 2]
Bloomer v.
Millinger, 1 Wall. 350.
[
Footnote 3]
Bloomer v.
McQuewan, 14 How. 549;
Chaffee v. Boston Belting
Co., 22 How. 223.
[
Footnote 4]
Foxley's Case, 5 Coke 109 a; 2 Blackstone's
Commentaries 449; 2 Kent 11th ed. 224;
Williams v. Merle,
11 Wendell 80;
Stone v. Marsh, 6 Barnewall & Creswell
551;
Marsh v. Keating, 1 Bingham New Cases 198;
Marsh
v. Keating, 2 Clarke & Finelly 250; Benjamin on Sales 4;
White v. Spettigue, 13 Meeson & Welsby 603; 1 Smith's
Leading Cases, 7th edition, 1195; 1 Parson's Con., 5th ed. 520.
