l'ENTLARGIll v. BEESTON and another.
(Oircuit Oourt, E. D. New York.
April 13, 1880.) PATENT-INJUNCTION-LICENsE.-An injunction founded upon consent, enjoining the use of an invention, is not necessarily deprived of vitality by the granting of a conditional license. SAME-ATTACHMENT-SUIT PENDING IN STATE COURT.-An attachment will not be issued for the violation of such injunction while a suit is pending in a state court of competent jurisdiction, concerning the validity of the agreement upon which the decree for the injunction was founded, and in relation to the legality of the revocation of the license which authorized the use of the invention.
Preston Stevenson, for Pentlarge. Tracy Catlin Brodhead, for Beeston. BENEDICT, J. This case comes before the court, upon a motion on the part of the defendants, for the stay of a proceeding instituted by the plaintiff in this court, to punish the defendants for contempt, because of a violation by them of a perpetual injunction, whereby they were restrained from making a certain form of bungs for casks, described in a pat. ent issued to this plaintiff, and known as re-issue No. 5937. Of the many proceedings had in this court between these parties, arising out of this patent, the following must be mentioned, in order to an understanding of the questions pre· sented by this motion. In April, 1877, the plaintiff filed his bill in this court against the above named defendants, in which he set forth the issuing of the said patent, and the infringement thereof by the defendants, and prayed to be awarded damages for said infringement, and a perpetual injunction to restrain the defendants from using his invention in the future. After issue had been joined in that action, and on the third day of January, 1878, an agreement of compromise was entered into between the plaintiff on the one side, and the defendants on the other, in which it was provided, among other thingsFirst, that the defendants should admit the validity of the plaintiff's patent, and his exclusive right to the invention therein described, and that the defendants should cease infringing upon his rights as sale owner of the said invention;
PENTLARGIll ". BEESTON.
3econd, that the defendants should consent to a final decree in this action awarding the plaintiff the sum of $2,000 for his damages by reason of past infringements, and directing that the defendants be perpetually enjoined from using the said invention in the future; third, that· upon the entry of such a decree, and the payment of the damages agreed on, the plaintiff should grant to the defendants, and the defendants should accept, a license to use the said invention. The terms of the license were particularly specified in this agreement of compromise, and one of its provisions is that in case of a failure of the defendants to pay the royalty specified therein, or maintain the selling price of the bungs at the agreed rate, the plaintiff should be entitled to revoke the license, by giving written notice of revocation to the defendants. In pursuance of this written contract between the parties a final decree was entered in this action, according to the prayer of the bill, and awarding the plaintiff $2,000 for his damages, and directing the issue of a perpetual injunction forbidding the use of the said invention by the defendants. Upon the entry of such decree the defendants paid the damages and costs, and received from the plaintiff a license to use the invention as provided in the agreement of compromise. Under this license the defendants continued to manufacture bungs, of the form described in the plaintiff's patent, until July 5, 1819, when the plaintiff gave notice of revocation of the license, upon the ground that it had been violated by the defendants by selling bungs at less than the prescribed price. The defendants disgregarded this notice of revocation of the license and continued to use the plaintiff's invention. Whereupon the plaintiff applied to this court for an attachment against them to enforce their obedience to the perpetual injunction theretofore issued out of this court, according to the direction in the final decree herein. A reference was thereupon ordered, to take proofs respecting the acts charged upon the defendants, and also respecting the circumstances under which the notice of revocation of the license had been given. Pending that reference the defendants make the present applies,-