Kline v. M. Garland Co. ( 1904 )

Grant, J.

(after stating the facts). We deem it essential to discuss and determine only two of the questions raised: (1) Did the contract terminate with the expiration of the first patent ? (2) Did the plaintiff covenant or contract against the unlawful or fraudulent manufacture of these devices by others ? If these two questions must be answered in the negative, the other questions become immaterial.

1. The contract is entirely free from any ambiguity. It cannot possibly be misunderstood. It covers two letters patent; one terminating in 1900, and the other in 1905. Mr. Garland expressly agreed to pay the royalty upon the devices under the secohd letters patent during its life. His liability under his contract is not affected by the fact that, upon the expiration of the first patent, the devices covered by it might be used by manufacturers in general. Plaintiff, as patentee, assigned to Mr. Garland the use, manufacture, and sale of all these devices during the entire lives of both letters patent. It was an absolute sale, not for cash, but for royalties, but subject to forfeiture for failure to perform. Neither Mr. Garland nor his assigns could continue to manufacture the devices covered by the second patent, and refuse to pay royalties. He might have rescinded the contract by giving six months’ notice, but in no other way could he avoid his obligations under it. Under defendant’s construction of the contract, if, when it was made, the first letters patent would have expired in one year, then it would have been a contract for only one year, although the second letters patent had 15 years to run. To sustain this contention would in fact terminate the letters patent before the time fixed by law for its expiration, or at least would suspend its operation, as to Mr. Garland and his assigns, so long as they chose to manufacture the machines. Defendant was manufacturing machines under its contract with plaintiff. Its counsel do not contend that it was not. It cannot now be heard to say that it was not operating under the contract, and was manufacturing machines illegally. So long as defendant manufactures and sells, it must pay; This case does not come within the rule enunciated in Sproull v. Pratt & Whitney Co., 101 Fed. 265, where it was held that a contract to manufacture and pay royalties under a number of patents relating to the same art, and expiring at different times, should not be so construed as to require payment of the same royalty after all the patents but one had expired, where the goods manufactured were capable of being separately used, were ordinarily sold for separate iise, and only “small portions of the goods were covered by the remaining patent.” As we read the two letters patent in this case, we understand that they are not issued upon any single piece, but upon all in combination to accomplish certain results.

2. There is no language in this contract which either expressly or impliedly imposed upon the plaintiff the duty to protect .Mr. Garland or his assigns from the unlawful manufacture and sale of the like devices by other manufacturers. Counsel cite no authorities to sustain their contention that that duty was imposed upon the plaintiff under a similar contract. His sole contract was to defend his own letters patent against attacks by others. Whether, under the United States decisions, Mr. Garland would be termed a licensee, so that the rule as to eviction would apply, is immaterial. After the assignment, plaintiff had no control over the manufacture or sale of the articles. He did not agree to investigate and ascertain whether other manufacturers were infringing, or to prosecute those who did infringe. The correspondence between the parties, covering a period of many years, upon this point, cannot be held to change the plain terms of the contract. Plaintiff was equally interested with the defendant in preventing infringements. At the request of defendant, plaintiff wrote to all the parties who defendant informed him it heard were infringing, calling for explanations, and notifying them not to infringe upon his patents, which were owned by the defendant. To these, replies were received denying any infringement. The fact that the plaintiff complied with the defendant’s request to look after these infringements did not read into this contract a covenant to protect the defendant against them. Without such a covenant or agreement, no such obligation exists. McKay v. Smith, 39 Fed. 556; National Rubber Co. v. Boston Rubber-Shoe Co., 41 Fed. 48. Cases holding that, where the patent is void, there is a failure of consideration which avoids the contract, do not apply to this case. Such is White v. Lee, 14 Fed. 789. Neither does the case of J. B. Brewster & Co. v. Tuthill Spring Co., 34 Fed. 769, apply. The patentee in that case sought to enforce the specific performance of the contract of license. The court found that the contract was harsh and oppressive, and virtually obtained by fraud, and left complainant to its remedy at law. In this case the patents were valid, and the defendant obtained the exclusive right to manufacture under them during their lives. Both plaintiff and defendant were jointly interested in preventing illegal manufacture. Defendant could have prosecuted for infringements. Instead of doing so, it reported rumors and hearsay statements of infringements, and endeavored to impose the cost of investigation and suits upon the plaintiff. In no instance did it itself take any steps to stop such illegal manufacture. It follows that the court was correct in directing a verdict for the plaintiff.

Judgment is affirmed.

Moore, C. J., Carpenter and Hooker, JJ., concurred. Montgomery, J., did not sit.