(Oircuit OO'Wl't, D. OonnecUcut. November 20, 1889.)
Where a. patentee grants,to a 'complainant" the exclusive right, liberty, and privilege to make, use, and sell" a patented invention, thE! full unexpired term tlJ:ereof, and of all 'reissues, renewals, and improvements, , throughout the United ,S'tatEllland the tetrltlOries,the complainant to pay the royalties agreed upon in a "separate agreement, and it,does not appear whether s)]ch grant is an abso11.lte Or de'feasible conveyance. tnecomplainant must joili the owner of the legal title in a suit ,to enjoin'the infringement of the patent. . In such suit, COmplainant'!! allegations thg,t, by mesne 'assignments and it became, prior to' the suit, and now is, the party interested iii said letters patent, "all.Of whioh, bY,' said. asSign.ment, nd grants, now in co,urt pr04uc,ed, an.d s.h0WD, will more fUlly appear," sufficiently show cOmplainant.'. intQr8et, when coupled Wfth the profert exhibit. .,', ,' ,
Pl&.TEl'ITSl!'OR INVE:N'TIONS-AcTIO!f POR INFRINGEMENT-PARTIES.
In Equity. On bill for injunction. ,Maynadier &: Boo;eh,' for complainant. ,John'P.': Baraett, ' for defendants.,
S$MAN j J. is a demurrer to'Ut" com plairlant'sbin in equity 'for an injunction against 'the infringemel1t of two pafents. The bill alleges 'that'tqecomplainant; "by mesne assignments and grants," is the party intereSted inletters "pateni'No. 241,471, dated MatH, 1881, to James Beecher, arid makeS profert ofsaid assignments .By the writof'coIlvey,aneel', dated April'16,' 1886, from tne:owner of the patent tQ thecotnplamant, the former grants unt<> the latter" the exarid privilege to make, use, and sell the invention in andwotected by the letters patent United States above during the term thereof,' and of all reissues, renew'ale, and improvements thereof, 'tHroughout the United Statea and 'the terrl.'tories said! Clement Manufacturing, Compllnf''Yielding a,rid unto E. the royalties, and-upon' the: ,te'tn:ls condItIons, m acilrtam artIcle of agreement made between the parties, ',dated the ,16th day 'of April, 18'86, specified and :setfoi'th.l' The de::relldant demurs upon': tlle,gtound that the instrument is an exclusive 'Ucense,and ts neitberan 1l.Sllignment of the patent, Dor: a. grant; of the QWner's ¢xchisive right thereof, and that therefore the owner should, be
"rh6'f'ourteenth sectIon orthestatuteof 1836 authOrIZed the recovery 'of'damages for infringemfint of patents by-action on the C1l.S6;to be brought ; of the'persons interested, whether as patentees, assignees, . or oftheeiclusive' right within and'thtlJughout 'a specified , P!1l't olthe U nitedStates.Theterms whieh were' used ill ,this statute 'were defined as follows: "An,assigneels dnewho has had traIisfer:red to him, til Writing, the Whole intereSt of'the origina1llateiit. or any undivided part of such wholQinterest, iua8Vel}' portion'of'the;Unitedtitates; and no one" unless he hasbad;auchan "iDl. is A is ,wbQ bas bad
transferred to him, in writing, the exclusive right, under the patent, to make and use, and 'to grantto'others to make and use, the thing pate.ted. within and throughout some speci fled part or portion of the United States. Such right must be an exclusive sectional right, excluding the patentee therefrom. A licensee is one who has had transferred to him, in writing or orally, a ItlsS or different interest than either the interest in the whole patent, or an undiv!ded part of such whole interest, or an exclusive sectional interest.',' Potter v. Holland. 4 Blatchf. 211. The fifty-ninth section of the statute 9f 1870, which corresponded with the fOQrteenth section of the act of 1836, authorized all action at law to be brought "in the name of the party interested,either as :patentee, as, ,signee, or grantee," and did not add "of the exclusive right withib'a. ,specified portion of the United while the thirty-sixth section au,'thorized the patentee or his assigns "to grant and convey an exclusive right under his patent tothe whole, or any specified part, of theUi,lited States." The language is substantially reproduced in sections 4898 and ,I 4919 of the Revised Statutes. The question in dispute is whether the complainant is a. grantee, or simply an exclusive licensee; for it is not an assignee, strictly speaking, as that term has been defined. It has not the entire patent, or the un':divided part thereof., <11 it is' a, it is substantially conceded ,that, in equity and at law, it is entitled, to sue alone. The complainant that it has an ,exchisive right to the beneficial interest in the entire patent; the right to make, use,and sell the invention, throughout all the territory of the Un\ted States, for the entire possible lile ,of the patand that, therefore the conveyance is m01e a license. It isa grant of the owner's exclusive throughout the entire territory which the 'patent covers. There is verymuch force in the The general language of the text-books,and ofthe decisions is neiAher nor the patentee ca.nmaintain!:\ bill in equity a third person for infringement without joining the other; but the great majprity of the reported cases throw. but little .light on the :question in the ca,se. What is called "an exclusi've license," is frequently ",all. exclusive license to make it part of the. in venHon which is covered by the pl!-tentj or is, in the language of Judge WALL,ACE in Telegraph (10. v· . Brooklyn, 2.2 O. G. 1978, 14 Fed. Rep. 255, "a. segregated right fora. "partiQular employment of the invention." This was thE> fact in Hammond v. Hunt,4 Ban. & A. 111. a case which is quite relied upon by the plaintiff. 'rhe conveyance or contract which was' the foundation of the defense in that case wall an exclusive license, under the patent which been granted, to make, use, and sell the specified mechanism whic,h ,was described in the,application for a new plj.tent,which.application .was subsequentlydeni(Jd. Judge LoWEJ,L points out the distinction between such a license anli one which is equivalent to an assignment or that the grant where nothing is reserved to the patentee. His, and ofcollrts in reeard to the necessity that language of the all. exclusive licensee must unite the owner as a c<>-complainant in a bill in'equity is perfectly true when the exclusive license is for a' particular ;'erhployment of the inv.ention. It does not 80 forcibly apply to such a
CO. t1. UrsON &: .BART 00.
license as the one now under consideration. .The conveyance in this case is of the exclusive right to make, use, ana sell the patented invention; the complainant yielding and paying therefor the royalties, and upon the terms and conditions, specified in a separate agreement. The Owner of the patent has the legal title,-a continuing right to receive royalties for the use of the patent; and whether its use is contingent upon the performance of the conditions, which are contained in the separate agreement, is not known. It is apparent that the owner is continually pecuniarily interested in infringements, if these infringements diminish sales, and therefore diminish royalties; and it does not appear whether the exclusive license is an absolute conveyance, or one which may be defeated, and whether the licensee may cease to enjoy the right. It is by no means clear that the owner has not retained a very considerable interest in the patent, and therefore I cannot say that thi:l license llmounts to either an assignment or a grant. . In NeUis v. Manufactwring Co., 22 O. G. 1131, 13 Fed. Rep. 451, Judge McKENNAN held that the complainant, to whom and to whose legalrepreselltatives had been given the exclusiv:e right to manufacture and sell the patented invention in the United States to the fv.ll end. of the patented term, could alone maintain a bill in equity for an infringement. It appears, however, that by a subsequent agreement the assignees were relieved from liability to forfeiture, and were released from other liabilities a&Sumed by them by an agreement-of evel\ date w.ith the original conveyance, and that the effect of that agreement upon the right conveyed by the assignment was nullified. The c01,lrt was of opinion that entire inte,rest of the assignee in the patent was intended to be vested in the assignee. In 'illustration of the distinction between an absolute and a condiis the case of Manufacturing Co. v. Manufactu.ring, 00., 27 Fed. Rep. 550, decided by Judge BLODGETT, in which h'eheld that owners of patents had granted the entire interest in themfor cer-tain territory, but upon certain conditions which granteel? w.ereJo" perform, and, upon failure to perform, the title was to revert t!) grantors;" 4'that grantors' title was never fully divested, 'or at least, they had a possible reversionary interest, so that it was proper to join them as complairtantsin' a suit for infringement of the patents within ,the territory eovared; by the grant." ._ . _ _ : . But the precise questiun in this case came indirectly before the for this: circuit in .Huber 'v. Sanitary Depot, 34 Fe!i, Rep.. 752, in which it was held that the sole Owner of Ol)e patent,and exclusive licensor as plaintiff in one bill for- an licensee of another, may join ihjunctiQn against the use of an apparatus both patents, and that such a. bill was not demurrable for misjoindt'r of .parties. The facts in that case appear to have been the same as ill this case. The complainant was the owner of one patent, and, " e:ltcept for payment -of entitled to-the whole in the othlilr." Ju,dge LAooMBE.saya:"As exclusive licensee., however., be the owner of 'thelegal title'" . 'It i13 ttne PIY.lc
ably a subject 'of contention between' the counsel;, ,The contention,was whether One or two billsin:ust be brought, and the fact that the licensor and the exclusive licensee be joined was nQt:a :subject of dispute. But this bill cannot be sustained without disregarding the opinion of the court for this oircuitttpon the question onaw whichis raised by the demurrer.' ' The defendant also dertiurs because the allegations of the bill. Inr&-' gard to title' either patent are'not sufficient. ,The allegations are that, by mesne assignments and grants, it ,became, prior to the bringing of ibis suit, and now is, the party interested in said letters patent; "all of which, by said assignment and grants; now in' court produced and shown, will more fully appear." The objection is that the bill does not show how the ,complainant is intel'ested, whether as aSsignee, grantee, or whether it is solely interested, or the extent of the The allega,with the profettand exhibit of the "assignments and, grants," which show the nature 'and character of the ,interest, are sufficiently definite;':The demurrer, so' far forth as it relates to the wlio mustu'tlite in a suit upon'the Beecher patent, is sustained. Leave is given 'to'ainend. .
(C'£rcuU COUH, D.lndW1'l.a. :November 9, 1889.)
P.A.TJmTB POB INVBNTIONII-INFlUNGBMENT-1'RBLlMINA.BY INroNOTION..
A prol'i,sl9nal injunctionwill not be granted, against theinfringemEint of a patent ,whose validity is iiepelident upon the 'result of an appeal in a former suit for it!! infringement.Where it, appears that defendant;,9-asbeliln oarrying Qn its business iQ good faitll,and In of the alleged infnngelDent, ',and that a stoppage would be an frreparable whlle plahitiffhu an adequate remedy in damages. '
In Equity. On motion,for provisional injunction. 'Rodney MaBO'Tt, for complainants. Parkinaon &:Parkin8orl;,' for:defendant.
'. GRESHAM, J. The above oomplaimilnts brought suit on four patents, in the eastern district of Michigan, against William A. CoombS, as the user ora'roller-mill, made by this suit, for the manufactUre 'of flour;' The answer attacked the validity of all the patents, and 4enied infringement. .The complainants abandoned one of the parent3 at the held twooftqem invalid, and sustainedtbe . sec.;md; third, fourth, 'aiidfifth claims 'of the other, the Gray which consisted apElCUlial' oonstmction and arrangement of devices fOr 'adjusting the 'rolls vetticfdly, as well as horizontally, whe11ebyany uQevenness ih rolls"ol'in their journals or bearings, may be compensated for; surfaces kept exactly in line," and also "in special devices for separating the rolls when not in action; andihbther details." 'Tbeusual decree ,was entered