Long v. Rockwood

Mr. Justice McReynolds

delivered the opinion of the Court.

These causes present the question whether the State of Massachusetts may tax, as income, royalties received by one of her citizens for the use of patents issued to him by the United States. The Supreme Judicial Court of that State held such an imposition would amount to a tax upon the patent right itself and was prohibited by the Federal Constitution. We agree with that conclusion.

The Constitution (Art. 1, Sec. 8) empowers Congress “ to promote the progress of science and useful arts, by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries; . . . ” The first Congress provided for issuance, in the name of the United States, of letters patent granting “ for any term not exceeding fourteen years, the sole and exclusive right and liberty of making, constructing, using and vending to others to be used, the said invention or discovery . ' . Act April 10, 1790, Sec. 1, Chap. 7, 1 Stat. 109.

Chap. 230, Act July 8, 1870,- 16 Stat. 201 (Rev. Stat. Sec. 4884; Sec. 40, Title 35, U. S. Code)—

“ Sec. 22. And be it further enacted, That every patent shall contain a short title or description of the invention or discovery, correctly indicating its nature and design, and a grant to the patentee, his heirs or assigns, for the term of seventeen years, of the exclusive right to make, use and vend , the said invention or discovery throughout the United States and the Territories thereof, . . .”

Chief Justice Marshall, speaking for the court in Grant v. Raymond, 6 Pet. 218, 241-242, stated the general purpose for which patents issue—

“ To promote the progress of useful arts, is the interest and policy of every enlightened government. . . . This subject was among the first which followed the organization of our government. It was taken up by the first congress . .. . The amendatory act of 1793 contains the same language, and it cannot be doubted that the settled purpose of the United States has ever been, and continues to be, to confer on the authors of useful inventions an exclusive right in their inventions for the time mentioned in their patent. It is the reward stipulated for the advantages derived by the public for the exertions of the individual, and is intended as a stimulus to those exertions. The laws which are passed to give effect to this purpose ought, we think, to be construed in the spirit in which they have been made. . . . The public yields nothing which it has not agreed to yield; it receives all ' which it has contracted to receive. . .. .”

Kendall v. Winsor, 21 How. 322, 327-328—

“ It is undeniably true, that the limited and temporary monopoly granted to inventors was never designed for their exclusive profit or advantage; the benefit to the pub,lic or community at large was another and doubtless the primary object in granting and' securing that monopoly.”

Bloomer v. McQuewan, 14 How. 539, 549—

“ The franchise which the patent grants, consists altogether in the right to exclude every-one from making, using, or vending the thing* patented, without the permission of the patentee.. This is all he obtains by the patent.”

See also Paper Bag Patent case, 210 U. S. 405, 423; Bauer & Cie v. O’Donnell, 229 U. S. 1, 11.

The power to exclude others granted by the United States to the patentee subserves a definite public purpose — to promote the progress of science and useful arts. The patent is the instrument by which that end is to be accomplished. It affords protection during the specified period in consideration of benefits conferred by the inventor. And the settled doctrine is that such instrumentalities may not be taxed by the States.

. In California v. Pacific Railroad Co., 127 U. S. 1, the State sought to sustain a tax laid upon a franchise granted by the United States; but its.power therein was denied. Through Mr. Justice Bradley this court said; — “Recollecting the fundamental principle that the Constitution, laws and ti^aties of the United States are the supreme law of the land, it seems to us almost absurd to contend that a power given to a person or corporation by the United States may be subjected to taxation by a State.” The same general doctrine was approved by McCullough v. Maryland, 4 Wheaton, 316; Home Savings Bank v. Des Moines, 205 U. S. 503; Farmers, etc. Bank v. Minnesota, 232 U. S. 516; Choctaw & Gulf R. R. Co. v. Harrison, 235 U. S. 292; Indian Terr., etc. Oil Co. v. Oklahoma, 240 U. S. 522; Smith v. Kansas City Title & Trust Co., 255 U. S. 180; Gillespie v. Oklahoma, 257 U. S. 501; Clallam County v. United States, 263 U. S. 341; First National Bank v. Anderson, 269 U. S. 341; Jaybird Mining Co. v. Weir, 271 U. S. 609; Northwestern Mutual Life Ins. Co. v. Wisconsin, 275 U. S. 136.

The courts of last resort in Pennsylvania and New York have held that a State may not tax patents granted by the United States. Westinghquse Elec. Mfg. Co. v. Commonwealth, 151 Pa. 265; People, etc. v. Assessors, 156 N. Y. 417. And no opinion to the contrary has been cited.

As United States patents grant only the right to-exclude, our conclusion • is not in conflict with those cases which sustain the power of the States to exercise control over articles manufactured by patentees, to regulate the assignment of patent rights, and to prevent fraud in connection therewith. Patterson v. Kentucky, 97 U. S. 501; Webber v. Virginia, 103 U. S. 344; Allen v. Riley, 203 U. S. 347; John Woods & Sons v. Carl, 203 U. S. 358; Ozan Lumber Co. v. Union County National Bank, 207 U. S. 251.

The challenged judgments are affirmed.

Affirmed.