Hobbie v. Jennison/Opinion of the Court

As a result of the findings of fact the circuit court held that the sale and delivery of the pipe by the defendant were made at Bay City, Mich., but that in view of the decision of this court in Adams v. Burke, 17 Wall. 453, the defendant could not be held as an infringer by reason of his knowledge that the pipe was to be used in a territory of which the plaintiffs held the monopoly. The circuit court said that in the case of Adams v. Burke an undertaker had purchased patented coffin lids from certain manufacturers, who held the right from the patentee to manufacture and sell within a circle whose radius was 10 miles, having the city of Boston as a center; that the undertaker lived outside of that circle, and within a territory owned by the plaintiff under the patent, and he made use of the coffin lids in his business; that the owner of the territory in which the undertaker carried on his business brought suit against him as an infringer, and it was held by this court that, the sale having been made by a person who had full right to make, sell, and use the invention within his own territory, such sale carried with it the title to the use of the machine without, as well as within, such territory; that the action in that case was brought against the user, but this court announced a principle of law which was equally applicable to the seller; that, if the user of the article was not liable to the patentee, it was because he purchased it of a person who had the legal right to sell it; that, if it was legal for him to buy, it was equally legal for the other party to sell; and that in the opinion of this court, in the case as well as in the dissenting opinion, it was stated, in substance, that the question raised was whether an assignment of a patented invention for a limited district conferred upon the assignee the right to sell such patented article to be used outside of such limited district. The circuit court further said that there was no evidence in Adams v. Burke that the sale was made under the belief on the part of the seller that the article was to be used within his territory, and that the case was authority for the broad proposition that the sale of a patented article by an assignee within his territory carries the right to use it everywhere, notwithstanding the knowledge of both parties that a use outside of the territory is intended.

We understand that to be the true interpretation of the decision in Adams v. Burke. It is said in the opinion in that case that when the patentee, or the person having his rights, sells a machine or instrument whose sole value is in its use, he receives the consideration for its use, and parts with the right to restrict that use; that the patentee, or his assignee, having in the act of sale received all the royalty or consideration which he claims for the use of his invention in that particular machine or instrument, it is open to the use of the purchaser, without further restriction on account of the monopoly of the patentee; that although the right of the assignees of the coffin-lid patent to manufacture, to sell, and to use the coffin lids was limited to the circle of 10 miles around Boston, a purchaser from them of a single coffin acquired the right to use that coffin for the purpose for which all coffins are used; that so far as the use of it was concerned the patentee had received his consideration, and it was no longer within the monopoly of the patent; that it would be to ingraft a limitation upon the right of use, not contemplated by the statute, nor within the reason of the contract, to say that it could only be used within the 10-mile circle; and that whatever might be the rule, when patentees subdivided territorially their patents, as to the exclusive right to make or to sell within a limited territory, this court held that in the class of machines or implements it had described, when they were once lawfully made and sold, there was no restriction on their use to be implied, for the benefit of the patentee or his assignees or licensees.

The plaintiffs in error contend that the decision in Adams v. Burke is not applicable to the present case; that in Adams v. Burke it was assumed that the patented coffin lids were first lawfully sold to the purchaser, without condition or restriction, by assignees of the patent for the territory of Boston and vicinity; that then the question was presented whether, as an incident of such a lawful sale, the buyer could use outside of the limits of the territory of the assignees the article so lawfully purchased; that it was not shown in that case that the sellers sold the patented coffin lids for use in other territory, or knew of, or had any interest in, such use; that in the case now before us the lawfulness, as against the plaintiffs, of the alleged sale of the patented pipe by the defendant, in the actual circumstances of such sale, was contested, the claim of the plaintiffs being that such sale, and the shipment thereunder, expressly for use within the territory of the plaintiffs, constituted an invasion of their rights, and were unlawful, as against the plaintiffs; and that actual sale, delivery, and acceptance of the pipe at Bay City, for actual use, would be one thing, but a form of delivery at Bay City, with an acceptance at Hartford, and knowledge and intention on the part of the defendant that the sole use would be at Hartford, and shipments on that basis and understanding, would not constitute a lawful sale of the pipe at Bay City, as against the plaintiffs.

But we are of opinion that the case of Adams v. Burke cannot be so limited; that the sale was a complete one at Bay City; and that neither the actual use of the pipes in Connecticut, nor a knowledge on the part of the defendant that they were intended to be used there, can make him liable. Adams v. Burke, in the particular in question, is cited with approval by this court in Birdsell v. Shaliol, 112 U.S. 485, 487, 5 Sup. Ct. Rep. 244; Wade v. Metcalf, 129 U.S. 202, 205, 9 Sup. Ct. Rep. 271; and Boesch v. Graff, 133 U.S. 697, 703, 10 Sup. Ct. Rep. 378.

The authorities which are cited on the part of the plaintiffs, holding that where a person makes one element of a patented combination, with the intent that other persons shall supply the other elements, and thus complete the combination, he is guilty of infringement, because he contributes to it, establish a doctrine applicable to the case of a naked infringer. But in the present case the defendant was not such an infringer, because he had a right, under the patent, to make, use, and vend the patented article in the state of Michigan, and the article was lawfully made and sold there. The pipes in question were not sold by the Hartford Steam Company in Connecticut, but were merely used there, and necessarily perished in the using.

It is easy for a patentee to protect himself and his assignees when he conveys exclusive rights under the patent for particular territory. He can take care to bind every licensee or assignee, if he gives him the right to sell articles made under the patent, by imposing conditions which will prevent any other licensee or assignee from being interfered with. There is no condition or restriction in the present case in the title of the defendant. He was the assignee and owner of the patent for the state of Michigan.

Judgment affirmed.