Page:Harvard Law Review Volume 10.djvu/44

18 l8 HARVARD LAW REVIEW. d' Electricity,^ the doctrine was applied to the purchase of patent rights subject to notice of an agreement with another to pay roy- alties. It was insisted that there was no privity between the plaintiff and the last assignee, and that the first assignee alone was liable, but this was not sustained. Sir George Jessel, M. R., said : " Now if that is so, if the owners for the time being of the patent are to work it, and are to pay five per cent to the plain- tiffs out of the profits, then whether we treat it as a partnership, or whether we treat it as a charge on this patent, or whether we treat it as a royalty, it is quite plain that nobody could take the patent with notice of the arrangement, and say we will keep all the profits and not be liable to account. What Spencer's Case (3 Rep. i6d), and Keppell v. Bayley (2 M. & K. 517), have to do with such a case as this, I cannot see. It is a part of the bargain that the patent shall be worked in a particular way, and the profits disposed of in a particular way, and no one who takes with notice of that bargain can avoid the liability." This was a case of the purchase of the whole franchise, and not of the franchise for particular districts, and the covenant related to the profits, and not to the use of the article; but the rights acquired on the purchase of a patent were held to be affected by notice ot a bargain made with another with respect to the proceeds of the sale of the patented article. In a later English case. Heap v. Hartley,^ the question related to the right to exercise the invention and to sell or use the patented article within a specified district for which another had an exclu- sive license. It was held that a mere licensee who was not an assignee of a patent acquired merely a right to use, and not a title, and could not maintain an action under the patent for an infringe- ment; but Cotton and Fry, L. JJ., before disposing of the case, inquired whether the defendant had not had actual notice of the exclusive license of the plaintiff to use and sell within the district. Fry, J., said: "Then in the Second place the plaintiff puts his case in this way. He says, 'The exclusive license implies a contract not to grant to anybody else within the district. The defendants took these machines with notice of that contract, and it would be unconscientious to allow them to use the machines in such a manner as to violate the contract of which they had notice. ' Had they then notice of the contract.? " It was found that they had 1 L. R. 19 Ch, D. 246. 2 L. R. 42 Ch. D. 461 (i