8RlER 11. BAYNES.
am satisfied beer is not within the meaning of spirituous liquors or wine; and it is hereby ordered that the defendant be discharged from further custody.
GRIER ". BAYNES
(Circuit COUf1, N. D. NtJID York. February 10,189ll.)
P6.U1f'l'll J'O"R INVENTloNs-ConrrroluL .AssIGlOlBNT. A patentee granted to a company a license to make, D88. and sell the ·patentecl artiel. throughout the United States, and an exolusive 11censelor certain western states} escept that he reserved W himself the right to sell in those statile, and to transler that right to one other. Thereafter he executed an assignment to other parties of one-third of his Interest in the patent, In which he, in terms, excepted the rights granted to the company. aud also reserved to himself the right to 8811 in all the remaining states, and to trall8fer that right to one other; and further reeerved to himself the exclnslve control "of and over all sales of thll right to main,.. Dee, and sell" the patented articles, whil'h right he agreed should not 1)& granted or sold at less than a specUledrrice; anol be agreed to ac.("onnt to the assignees for one-third of the proceeds 0 such 8<1".''''; and that, he neglect 80 to or to pay "hem share tbereof}hisexcluslveconL,'ul over suchsaiee should cease and the asslgnment should "tnereupon become and be absolute fol"'" ever." H.eld that, until suoh default, the assignment. was. mere.ly conditional, lD \he natuJ."8 of a security tor the by tho. patentee of Jl1a agreement.
In Equity. Suit by William Watson Grier against James B. Baynee and others for royalties under letters patent. On settlement of final d. cree. Bee former report, 46 Fed. Rep. 523.
STATEMENT 011' ll'AC'l'B.
On the 5th of June, 1891, a decision was rendered in favor of the complainant for an accounting. 46 Fed. Rep. 523. On the 24th of June, 1891, an interlocutory decree was entered referring it to Mr. Charles B. Germain, of Buffalo, N. Y., astnaster to take the accounting and directing him to state "separately the number of sets of springe made and sold by said defendants prior to I?ecember 6, 1887, and the number made and sold subsequent to that date." On the 11th day of December, 1891, the master filed his report in which he finds: .F'i.rBt, that the complainant is entitled to recover $138.60 on account of royal. ties and $47.50 interest thereon, in all $186.14, against the defendant Baynes for springs made and sold by him. Second, that the complainant is entitled to recover $1,896.30 on account ofroyalties and $527.79 interest thertlon, in all $2.424.09,againllt defendants Baynes and tho Buffalo Spring & Gear Company for. springs made and sold by them subsequent to and including March 12\ 1886, and prior to December 6, 1887. Third, that complainant is entitled to recover $12,012.70 OD account of royalties and $1,057 .36 interest thereon, in all $13,070.06, against the defendants Baynes and the Buffalo Spring & Gear Company for springe made and &Old by them 6, 1887. to I, 1891.
Thl;ldefendaritshave filed six 'exceptions tothis report; three disputing the master's findings as to the' principal sums found due for royalties and three disputing his allowance of interest thereon. The master was directed to state separately the number of springs sold before and after December 6, 1887, for the reason that on that date the defendants acquired an interest in the patent which it was thought might give them a right to manufacture and sell free from the obligation to pay royalties. At the time the interlocutory decree Was settled the court was not fully satisfied upon this point. The question was not discussed at the argument and the idefendants' views regarding it have not, until now, been presented to the court. The master was directed to separate the account, court, or an appellate court, might at any time be able to JU'"tbf according to the view taken of the rights acquired on December 6,1887, without the necessity of a new lItlferefule. . . ' ", ', thatth,e accounting should be limited to a time prior toD,eeeriiber 6, 1887, is based upon ,the, assignment to the defendant, Spring ,& Gear Company; P. Richardson and Hl1miltooi'P; Richardson, on that date,oUtn alleged one-third interest in the The Richardson ti,tle'is founded upon the following instrument: " "' "
"Wh'e'feas, I. Charles t':Thomas'. did obtatn letters patent ot'the United certain improvements in springs for vehicles, which letters patent bear'date'the 15th day of Januar,y, A. D . .1884, and are numbered 292,144 ; and Wlulreas, VictorP. Richardson and HamUton P. Richardllon, of the city of Janesville, in the state of are j!esfrous of acquiring an interest therein: Now,therefore, this indenture witnesseth that for and in consideration of the sum of one dollar tome in hand paid. the receipt of which is hereby acknowledged, I have assigned, sold and set over. and do hereby assign, selFand set 'over unto the said Victor.P. Richardson and Hamilton P. RichardsoD.their representatives and assigns, all of the one-third right. title and interest ,which 1 have in the said letters patent. except as to the rights and privileges therein and this day granted by to the Thomas Spring and Gear Company, Limited, of the city of Janesvil)e, in the state of JVisconsiri. "nd the' money agreed to be paid to me by said corporation, as a for such grant, and',aIsoreserving to myself the individual right to manufacture', and to sell, such improved springs for vehicles in all states and ,territories of the United States where said Thomas Spring and Gear Company, Limited, have not, by virtue of such grant to it, above referred to, the exclusive right so to do; and to assign and transfer such individual right so reserved to myself. to anyone individual partnership, company, or corporation only, and no more, and to take, rect'ive and have for my own use and benefit all inoney paid or agreed to be paid to me as a consideration for such assignment and transfer of such individual right. the same to' be held by said Victor P.· Ricbardson and Hamilton P. Richardson for their own use and beqoof,.and for the use of their and each of their legal representat,ives and asto the. full end and, term for which said letters paten,t are granted as and entirely as the same would have beeq held and me had this assignment and sale not been made, prOVided, neverthelcss, that said Oharles L. Thomas shall hav'e and do hereby also retain and reserve to myself tbesoleand exclusive power and control of and over all' sales of the right to manufacture, use or sell such improved sl.lrings for vehicles by any and all
GRIER V. BAYNES.
persons, individuals, companies and corporations whatsoever; which said right it is hereby understood and agreed shall not be granted or sold at a less price than that of one dollar for each set of such improved springs for vehicles manufactured and sold by the grantee of such right.-And for the consideraforesaid it is hereby further understood and agreed by me but subject to the exceptions and reservations in my behalf and favor, that I shall and will account to and pay over to them, their legal representatives or assigns for their sole use and benefit all of the one-third part of all money arising from such sales to others of the right to manufacture, use or sell such improved springs for vehicles not hereinbefore excepted or reserved to myself.. And at the times and on the days following, namely, on the first day of January, A. D. and on the first day of April, JUly, October and January thereafter in each and every year during the term for which such letters patent are granted, but should I at any time refuse or neglect to render such account or to pay to them the money so agreed to be paid for a term of thirty days after the time hereby fixed forsucbaccounting and ,payment, then, and in snchcase the aforementioned sole and Elxclusive power and control over such sales. a8 well those theretofor,e made as those thereafter to be made shall cease, and the sale and assignment aforementioned of said one-tbird right, title and interest in said letters patent to said Richardson and shall thereupon become and be 3bsolute forever thereafter, and the said assignees thereof, their representatives and assigns, be authorized and empowered by action or otb"rwiset() and receive any of mqney then due or to become due to them on account of any and all sales of rights to manufacture, use or sell such improved springs tor ve.bicles theretofore and thereafter made. In wit.ness whereot I have hereunto set my hand and seal this 16th day of August, A. D. 1 8 8 4 . C H A R L E s L. 'fHOMAS. [Sea!.]" In its former decision. tbe court said this subject: ."Whether the decree should extend beyond December 6, 1887, isa question 'which can be determined upon the Settlement of the decree. I do n()t decide It now for the reason that consIderations, which seem to me impol'taut,' were not alluded to upon the argument and are but casually mentioned in the briefs. ()n the 16th ()f August. 1884, Thomas, the patentee, assigned to Victor and Hamilton Richardson a one-third interest in the patent in question. The astiignment was restricted by many conditions, but it provided that upon the 3ssignor's default in certain particulars, it should become absolute. There is plausibility in the suggestion that it did become absolute and that the 3rdsons. in December, 1887, held an unincumbered one-third interest in the patent. On the 6th of December, 1887, they assigned their interest to the Buffalo Company. If the Richardsons had the right to make and sell the patented spring free from all obligations to pay royalty to the oomplainant, it is dear that. when the defendant company purchased their title it acquired the ;Bame right."
James A. Allen, for complainant. Albert H. Walker, for defendants.
COXE, District Judge. The exceptions to the allowance of royal'ties accruing. prior to December 6, 1887, are not pressed at tbis time. exceptions to the master's decision allowing interest on these .amounts are overruled for ,the reasons stated at the argument. The question to be decided is whether the complainant is entitled to royalties after tbe defendant, tbe Buffalo Spring & Gear Company, be.came invested with the title previously beld by the Richardsons. It be-
comes necessary, therefore, to analyze and construe the !'Richardson agreement. In order to do this properly'the situation at the time of its execution must be considered. The patent to Thomas was granted January 15, lSS4. On the 16th of August, 1884, Thomas. granted to the Thomas Spring & Gear Company a license to make, use and sell the patented springs throughout the United States and' territories· and an exclusive license for certain western states; except that he reserved to himself the right to sell in the states covered by the exclusive lioense and to transfer that right to one indivi4ual, partnership or cOrporation. After this paper was executed and delivered Thomas still owned the patent and all the rights thereunder for that part of the United States lying east of Michigan, Indiana, Illinois, Missouri, Arkansas and Louisiana. On the same day, August 16, 1884, the assignment"to the Richardsons was executed. By the terms of this instrument Thomas assigned, sold and set over to the Richardsons, their representatives and assigns, all of theone-third right, title and interest which be had in the patent, the same to be held by them for their own use and behoof and for the use of thE'lir representatives and assigns, to the full end and term for which the patent was granted, as fully and entirely as the same would have been held and enjoyed by Thomas had the. assignment and sale to the Richardsons not been made. But this grant was subject to certain exceptions, proviRos and conditions which qualify language otherwise absolute in its effects. Firat. The provisions directly following the granting clause were, probably, unnecessary, for they simply do what was already done by operation of hiw,-make the conveyance to the Richardsons subject to the prior .conveyance to the spring gear company. The Richardsons could not practice the inventlc/D in the western states, for that territory was covered by the exclusive licensE' previously granted, and they had no interest in the royalties agreed to be paid to Thomas by the spring and gear company. In other respects, had there been no further exception, they wuuld have possessed the same rights that Thomas possessed; namely, they would have owned one-third of the patent and all the states. As to that territory they would rights thereunder for the with Thomas. have been on equal Second. The next qualifying clause is as follows: ' ... And also reserving to mys...lf the individual right to manufacture, and to sell. sllch improved springs for vehiclt's In all statp.s lind territories of the Unit...d States where said Thomas :::lpring & G.'ar Company, Limited, Itave not, by virtue of such to it. above refeneu to, the exclusive right so to do; and to and transfer such intlividlliLlright so reserved to myself, to one individual, partnership, company or corporation only, and no more, and to take, receive lLnd have for Illy own use and bt'nefit all money paid or agreed to be paid to lOe as a cOllsidel'ation for such astdgument and transfer of such individltall'ight." The learned counsel for the complainant construes this language to mean that there was reserved to Thomas not the individual right, but the exclusive right to manufacture and sell. He insists that "the reserved right to license for ,thlt assignur's indi vidualbenetit is carved out
GRIER 17. BAYNES,
of the· whole title to the patent." It seems, if this construction is cor- · rect, that the instrument becomes a mere nudwm;pactum. If Thomas had the exclusive right for the east and the spring and gear company the same right for the west, it is difficult to see what privilege or advantage the Riohardsons could ever obtain. They paid for and received a paper which conveyed nothing of value. Thomas reserved to himself the right to mallufacture and sell in the eastern states and to assign that right to one other persoll, partnership or corporation. Of course this reservation was unnecessary. As owner of two-thirds of the patent he already.' So did the Richardsons if not deprived of possessed the it by subsequent reservations. The reservation to Thomas of one of the rights p.lready his did not deprive the Richardsons of rights already theirs. By reference to the license to the spring and gear company, executed on the same day, it would seem, from the identity of language, that Thonias was apprehensive lest he might have conveyed to the ardsons the same privilege for the eastern states which he had conveyed to the spring company fot' the western states and that he sired to reserve the same individual for the former, section that he already possessed for the latter. If this were his intention the language employed 'was apt' and proper. If the object was to deprive the Richardsons ofan right'topracticethe invention it was most inapt. It cannot be construed into a reservation of all valuable rights under the patent in the assignolhl.nda consequent exclusion of the assignees from such rights. Suppose, as complainant's counsel suggests, that the reservation had been by a separate instrument; suppose that 011 the 15th of August Thomas had conveyed to John Doe "the individual right to manufacture and to sell," etc., employing the exact language quoted; it be argued that the owner of the patent was preoluded from practicing the invention because of the restricted license to John Doe? - The owner of the individual right in question, whether he held it by reservation or direct conveyance, was wholly powerless, by virtue of that right alone,to prevent the owner of the patent or of an undivided interest therein, from exetcising the full privileges of the monopoly granted by the government. Theright retained' by Thomas was nO more efficacious than the same right would be were it outstanding in John Doe. In each caSe it was a reserved right, in each case the privileges possessed by its holder were identical. Moreover complainant's construction is at variance with other portions of the instrument which evidently contemplates.sales ,by many licensees. Considerable light may be thrown upon the language in questionhy comparing it with the language quoted under the next (third) subdivision of this opinion. May it 'not have been the sole intention ofthe assignor, in view of. his agreement to account to the RichardsonsJor one-third of the royalties collected, to reserve to himself and to; one assignee the fight to manufacture and aell free of this obligation? It is, for' these reasons, thought that thebtriguage· quoted leaves the rights' of the Richardsona 'precisely aathey were at ,the conolusion ofthe granting clause. Had the instrument stopped with the it would, then, have been simply a.nassignment of-a one-third .interest.i:n
"GRIElt V. BAYNES.
answering the question in the negative I am not unmindful of the ingenious and persuasive argument of the defendants' counsel that Thomas reserved not the ownership of the right to sell licenses but" the power and control" over such sales. This construction would be more plausible if the paragraph stood alone, but when read in connection with other clauses of the same agreement and with the provisions of the contemporaneous agreement with the spring and gear company it is thought that it does not expressthe true intention of the parties. The paper is not artistically drawn. It is conceded on all sides to be the work of a neophyte in patent law. But if one idea stands out more prominently than another it is the intent of Thomusto retaill full power and control over his: patent. He might have used language more technical and concise, but when he says that he reserves to himself "the sole and exclusive power and control of and over all sales of the right to mimufacture," etc., it is not difficult to perceive that what he intended to do was to prevent the Richardsons from exercising any rights in that regard; He" thought tbat as he had the sole and exclusive power, they had no power at all; that they could not grant licenses without assum:ing control over them; tberefore the granting of licenses would be an inva.sion of his exclusive right. This construction is borrie out by the sUbsequent provision making the assignment absolute if Thomas failed to pay. Until that qefault occurred the conveyance was conditional;. it was not a full and complete grant; something necessary to make. ita complete grant was reserved in the assignor. Is it not clear that what the assignor intended to reserve was tbe exclusive right to make sales of the rigbt to manufacture, use and sell? So long as he paid the Richardsons he retained that right; when he defaulted the rigbt passed to them. Then the assignment became absolute, but not till then. Until then it was a contingent assignment. As soon as the default occurred Thomas lost his exclusive power over sales and thereafter the Richardsonscould sue for and collect the royalties. It is fair to presume that it. was the intention of both parties that the Richardsons should not acquire a title wbich enabled them to maintain such suits prior to a default. I am, therefore, constrained, in the light of all the circumstances surrounding the execution of the instrument in question to hold that it was intended not as an unconditional assignment of a one-third interest in the patent, but more in the nature of security fo;r the performance by Thomas of his agreement; to remain inchoate so long as he performed his duty and to be used the moment he failed in that duty. It follows that the exceptions must be overruled and that the complainant should have a· decree for the amount reported by the master,. with interest thereon from the date of the master's report, together with costs and disbursements. v.49F.no.5-24
NATHAN ·MANUF'Q. CO.
(Circwtt CO'W't, D. Ma8Bachmett8. February
. A.billln equity, under Rev. St. tr. S. for relief a/fainst a patent alleged to interfere with patents owned by complainant, cannot besustail\ed where the an· B.wer/ideI\ies such inl;erference, if it. appears that tbe c.laiIUS of tbe respective patents . 0 not cover the'SBJIle invention.' The court cannot go beyond the claims, and consider generally the two inventions as a whole.
In Equity. Bill by the Nathan Manufacturing Complltnyand others against Warren H.Craig, and others, for relief again!1t a,patent alleged to interfere with complainants' patent·. B.ill dismissed. , P. W. Clarke, for complainants. . JilWv" Richardson &: Swmrw, for defendants.
Revised Statutes; whitlh provides that, where there' are:interfering patentS',lahyperson interestfsd may have relief against. thednterJering patentee,! and all partiestiriterestednnder him, by suit in equity against the owner ·of the interfering patent, and the court may ,adjudge :eithElr ofthe patimtsvoid in bill alleges the issue ofletters patent 331,500,datE!dMareh 9, 1886, to: Kaczander and. Ruddy, and oLthe lettElriq)otent'No. 357,931,dated February 15, 1887, to Kaczander,and that the patents are vested by assignment in complail!lants. It further alleg'etthe issue Of letters patent No. '398,583, dated February 26, 1889, to thj!joEtfendant.Warren:H. ' Craig, and that said 'patents: are interfering patents. ' The answer denies that said patents, are ,interfering patents, and avers that, iNhere is an interference, Craigie the prior inventor. Upon a bill of this character, the first question to determine is whether the plitents are' interfering patehts; and, if this is shown; the:next question who is the fi'rst inventor? The invention..whicb a man patents is that which he claims l . and patents do not interfere, .unless they claim the same' invention in whole or in part. UpOll suits brought under this seotion, it'bias, therefore, been !repeatedly held, until it has wellsettled law,.' that two patents interfere,within: the meaning :of this section, only when they claim. in whole or in part, the same invention.. Gold &: Silver. Ore SeparatJing Co. v· United States· DiaintegratingOre 00., 6 Blatchf. 307-310; Reedy. Landinan,:f)5 O. G. 1275; ·. Manufacturing Co., 20 Fed. Rep; 121; 1:22; Pentlarge v. Bushing 00. , ld. '314; Electrical AccumulatlYr Electrie 00., 44 Fed. Rep. Mowry v· .Whitne:v,<14Wall.i4M-440.:!!t is apparent upon examination that .the claims of the Craig patent do not cover the mechanism d:eacribedinthe claims of the two patents owned by the complainantB;dnother words, there are no "interfering claims" here. and this position is substantially admitted by the complainants. Under these circumstances, 1 do not deem it necessary to enter into a comparison of the claims of these different patents. The complainants' position seems to be that, in a bill of
CoL"r, Circuit Judge·. ,; This bill is brought under seotion.4918 of the