DECISIONS AND NOTES
The following digest will be found to contain much useful information
for the patentee, it being a carefully selected list of decisions
affecting assignments, territorial grants, licenses, State laws, etc.;
including those rendered by the Supreme Court of the United States, the
Circuit Court of Appeals, State Courts, and of various Commissioners of
Patents, all of which decisions enunciate well-settled and controlling
principles of Patent Law.
[Sidenote: Assignments.]
Assignments of patents are not required to be under seal. The statutes
simply provide that "every patent, or any interest therein shall be
assignable in law by an instrument in writing." (_Gottfried_ vs.
_Miller, U. S. S. C. Decided Jan. 23, 1882._)
A contract assigning a patent and all future improvements thereon is
enforceable against assignees of such improvements who take notice of
the contract. (_Westinghouse Air Brake Co._ vs. _Chicago Brake and Mfg.
Co., 85 F. R., 786._)
Each co-owner of a patent may use his right without the concurrence of
the others and license at will. (_Washburn & Moen Co._ vs. _Chicago Wire
Fence Co., 109 Ill., 71._)
Owners of a patent are tenants in common, and each, as an incident of
his ownership, has the right to use the patent or manufacture under it.
But neither can be compelled by his co-owner to join in such use or
work, or be liable for the losses which may occur, or to account for the
profits which may arise from such use. (_De Witt_ vs. _Elmira Nobles
Mfg. Co., 12 N. Y. Spur., 301._)
Joint owners of a patent, right are not copartners, and in the absence
of any express contract each is at liberty to use his moiety as he may
think fit, without any liability to or accounting to the other for
profits or losses. (_Vose_ vs. _Singer, 4 Allen (Mass.), 226; vide Pitt
vs. Hall, 3 Blatch., 201._)
Although an assignment of patent is not recorded within three months, it
is binding on the assignor, and he cannot sell the patent again. (_Ex
parte Waters, Com. Dec., 1899, p. 42._)
A verbal license or interest in an invention has no effect as against a
subsequent assignee without notice of such verbal license or interest.
(_U. S. S. C., Gates Iron Works_ vs. _Fraser et al., 1894, C. D., 304._)
An assignment to assign future patents, in consideration of the
assignee's paying the expense of taking them out, is broken by his
refusal to pay for and take out a particular patent when requested, and
a subsequent assignment to another conveys a perfect title. (_Buck_ vs.
_Timony, 78 Fed. Rep., 487._)
Any assignment which does not convey to the assignee the entire and
unqualified monopoly which the patentee holds in the territory
specified, or an undivided interest in the entire _monopoly,_ is a mere
license. (_Sanford_ vs. _Messer, 2 O. G., 470._)
When a party does license, grant, and convey any invention which he may
hereafter make, this gives only an equitable right to have an assignment
made, and this right may be defeated by assignment of the patent to a
purchaser for value without notice of this equity. (_Regan Vapor Engine
Co._ vs. _Pacific Gas Engine Co. (Nineth Cir.), 7 U. S., App., 73._)
[Sidenote: Territorial Grants.]
A territorial grantee cannot be restrained from advertising and selling
within his territory, even though the purchasers may take the patented
article outside the vendor's territory. (_Hatch_ vs. _Hall, 22 Fed.
Rep., 483._)
One who buys patented articles of manufacture from an assignee for a
specified territory becomes possessed of an absolute property in such
articles, unrestricted in time or place. (_U. S. S. C., Keller et al._
vs. _Standard Folding Bed Co., 71 O. G., 451._)
The sale of a patented machine by one authorized to sell, conveys the
whole ownership to the purchaser, who may sell it again to another.
(_Morgan Envelope Co._ vs. _Albany Perforated Wrapping Paper Co., 152 U.
S. 425._)
[Sidenote: Licenses.]
Every person who pays the patentee for a license to use his process
becomes the owner of the product, and may sell it to whom he pleases, or
apply it to any purpose, unless he binds himself by covenants to
restrict his rights of making and vending certain articles that may
interfere with the special business of some other licensee. (_Met.
Washing Machine Co._ vs. _Earl, 2 Fish., 203; 2 Wall., Jr., 230._)
A license is not forfeitable for non-payment of royalties in the absence
of express provisions to that effect. (_Wagner Typewriter Co._ vs.
_Watkins, 84 Fed. Rep., 57; 1898._)
A shop right is a personal license and is not assignable. (_Gibbs_ vs.
_Hoefner, 19 Fed. Rep., 323; 22 Blatch., 36._)
A license to a person to use an invention only "at his own
establishment" does not authorize a use at an establishment owned by him
and others. (_Rubber Co._ vs. _Goodyear, 9 Wallace, 788._)
A license is not transferable unless its terms so state. (_Olmer_ vs.
_Rumford Chemical Co., 109 U. S., 75._)
A license merely to make and not to sell does not impair the patent
owner's right to sue for infringement outside of the license; and the
purchaser of the licensee's tools and materials would not carry the
right to sell the product made thereon. (_American Graphophone Co._ vs.
_Walcut, 87 Fed. Rep., 556; 1898._)
A license to use a machine carries with it the right to repair the
machine, and replace worn parts until the essential original parts of
the machine have disappeared. (_Robinson on Patents, Sec. 827._)
A lawful sale of a patented article by a patentee or grantee, within his
own territory, carries with it the right to use such article throughout
the whole United States. (_Adams_ vs. _Burke, 5 O.G., 118_; _Hobbie_ vs.
_Smith. 27 Fed. Rep., 636._)
When an applicant in certain instruments assigned his right, title, and
interest in an invention, retaining for himself the exclusive right to
employ the invention in the manufacture of a certain class of machines,
Held, that such instruments do not convey the entire interest in the
invention or any undivided part thereof, and they are construed to be
nothing more than licenses. (_Ex parte Rosback, 89 O. G., 705. Decided
Oct. 5, 1899._)
An implied license to use a patented improvement without payment of any
royalties during the continuance of employment of the inventor, and
thereafter, on the same terms and royalties fixed for other parties, is
shown where the inventor applies the patent to his employer's work
without any agreement for compensation for its use further than a notice
that he would require pay after his employment terminated. (_Keys_ vs.
_Eureka Consol. Min. Co., U. S. S. C., 158 U. S., 150._)
A breach of a covenant in a license does not work a forfeiture of the
license unless it is so expressly agreed. (_Consol. Middlings Purifier
Co._ vs. _Wolf, 37 O. G., 567._)
[Sidenote: Patent Title.]
A patent right, like any other personal property, is understood by
Congress to vest in the executors and administrators of the patentee, if
he dies without having assigned it. (_Shaw Relief Valve Co._ vs. _City
of New Bedford, 19th Fed. Rep., 758._)
A patent to a dead man at the time of its grant is not void for the want
of a grantee, but vests in his heirs or assigns. (_U. S. S. C, De La
Vergne Ref. Machine Co._ vs. _Featherstone, 1893, C. D., 181._)
A court of equity may direct a sale of an inventor's interest in his
patent to satisfy a judgment against him, and will require the patentee
to assign as provided in Rev. Stat., Sec. 4898, and if he refuses, will
appoint a trustee to make the assignment. (_Murray_ vs. _Ager, 20 O. G.,
1311._)
A patent right cannot be seized and sold on execution. (_Carver_ vs.
_Peck, 131 Mass., 291._)
A receiver cannot, under his general powers, convey the legal title to a
patent (_Adams_ vs. _Howard, 23 Blatch., 27_), but a court may compel an
insolvent to assign his patent to a trustee or receiver. (_Pacific Bank_
vs. _Robinson, 20 O. G., 1314_; _Murray_ vs. _Ager, 20 O. G., 1311._)
A patentee who assigns his patent cannot, when sued for infringement,
contest the validity thereof. (_Griffith_ vs. _Shaw, 89 Fed. Rep.,
313._)
RULES OF PRACTICE
The following from the "Rules of Practice in the United States Patent
Office" may be perused with interest to the patentee; a copy of which,
together with a copy of the "Patent Laws," will be mailed free to any
person upon addressing the Hon. Commissioner of Patents, Washington,
D. C., requesting the same; these being the only books or pamphlets
published by the Office for gratuitous distribution.
[Sidenote: Assignments.]
Every patent or any interest therein shall be assignable in law by an
instrument in writing; and the patentee or his assigns or legal
representatives may, in like manner, grant and convey an exclusive right
under the patent to the whole or any specified part of the United
States. Interests in patents may be vested in assignees, in grantees of
exclusive sectional rights, in mortgagees, and in licensees.
[Sidenote: Assignees.]
An assignee is a transferee of the whole interest of the original patent
or of an undivided part of such whole interest, extending to every
portion of the United States. The assignment must be written or printed
and duly signed.
[Sidenote: Grantees.]
A grantee acquires by the grant the exclusive right under the patent to
make and use and to grant to others the right to make and use, the thing
patented within and throughout some specified part of the United States,
excluding the patentee therefrom. The grant must be written or printed
and be duly signed.
[Sidenote: Mortgages.]
A mortgage must be written or printed and duly signed.
[Sidenote: Licensees.]
A licensee takes an interest less than or different from either of the
others. A license may be oral, written, or printed, and if written or
printed, must be duly signed.
[Sidenote: Must be Recorded.]
An assignment, grant, or conveyance of a patent will be void as against
any subsequent purchaser or mortgagee for a valuable consideration
without notice unless recorded in the Patent Office within three months
from the date thereof. If any such assignment, grant, or conveyance of
any patent shall be acknowledged before any notary public of the several
States or territories, or the District of Columbia, or any commissioner
of the United States Circuit Court, or before any secretary of legation,
or consular officer authorized to administer oaths or perform notarial
acts under Section 1750 of the Revised Statutes, the certificate of such
acknowledgment, under the hand and official seal of such notary or other
officer, shall be _prima facie_ evidence of the execution of such
assignment, grant, or conveyance.
No instrument will be recorded which does not, in the judgment of the
Commissioner, amount to an assignment, grant, mortgage, lien,
encumbrance, or license, or which does not affect the title of the
patent or invention to which it relates. Such instruments should
identify the patent by date and number; or, if the invention is
unpatented, the name of the inventor, the serial number, and date of the
application should be stated.
[Sidenote: Conditional Assignments.]
Assignments which are made conditional on the performance of certain
stipulations, as the conditional payment of money, if recorded in the
office are regarded as absolute assignments until cancelled with the
written consent of both parties, or by the decree of a competent court.
The office has no means for determining whether such conditions have
been filled. (_Rev. Stat., Sec. 4898._)
STATE LAWS ON SELLING PATENTS
In some States, laws have been passed by which attempts have been made
to regulate or prevent the sale of patent rights within their borders,
by imposing upon patentees or their agents certain State restrictions,
such as requiring the filing of copies of patents, making and filing
proofs, taking out licenses, procuring certificates, complying with
forms, or prescribing the terms of a note to be given for a patent.
While it has never been squarely brought before the United States
Supreme Court, with the result that much conflicting legislation has
been enacted by the different States, it may be said, as a general
proposition, that a State or municipality, through the medium of its
Legislature or officials, has no constitutional right to make or enforce
laws which in any way affect or control the transfer, sale, or other
disposition of United States Letters Patent; or to interfere in any
manner with the patentee going into the open market anywhere to sell his
rights conferred by the patent.
It is a well-established principle of law that Congress has exclusive
right and power to legislate on the subjects specially assigned to it by
the Constitution, while power is delegated to the several States to
legislate on those subjects not thus expressly placed within the
control of Congress. It would seem clear that there can be no State
interference with the rights which are incident to the grant of Letters
Patent and expressly conferred thereby.
Ohio was the first State attempting to place restrictions upon the
handling of patent rights, which, in 1868, passed an act requiring any
person, before offering for sale a patent right in any county, to submit
the patent to the Probate Judge of the county, and make affidavit before
said judge that the patent was in force, and that the applicant had the
right to sell, and also requiring that any written obligation taken on
the sale of such right should bear on its face the words, "Given for a
Patent Right."
The portion of the Ohio statute relating to the making and filing proofs
was subsequently made the law in Illinois, Minnesota, Indiana, Nebraska,
and Kansas, while the requirement that written obligations given for a
patent right should bear such statement written upon its face was made
the law in Vermont, Michigan, Pennsylvania, Wisconsin, New York,
Connecticut, and Arkansas.
In view of the decisions rendered by the Supreme Court of the United
States in the cases of _ex parte_ Robinson, 2 Bissel, 309, and Webber
_vs._ Virginia, 103 U. S., 347; 20 O. G., 136, some of the States
repealed their statutes relating to the filing of proofs, while others
did not--notably Indiana and Kansas, where the statute still remains in
force.
While the Supreme Court in the above cases did not decide the
constitutionality of the State statutes, it was clearly indicated that
property in inventions existed by virtue of the laws of Congress, and
that no State had any right to interfere with its enjoyment, or to annex
conditions to the grant, and that the patentee had a right to go into
the open market anywhere in the United States and sell his property. It
also established the proposition that a State may require the taking out
of a license for the sale of the manufactured article covered by the
patent; and the patentee should keep in mind the distinction between
selling patents, or patent privileges, and the selling of goods or
manufactured articles, as all who sell goods, whether patented or not,
must conform with the local and State laws relating to same.
The statute requiring the insertion in written obligations of the words,
"Given for a Patent Right," has been declared unconstitutional by the
higher State Courts in Illinois, Michigan, Minnesota, and Nebraska, and
by the Circuit Courts in the southern district of Ohio, and in the
district of Indiana; while its validity has been sustained by the courts
of last resort in New York, Pennsylvania, Ohio, Indiana, and Kansas.
Therefore, the validity of the State statutes on the point referred to
may be regarded as finally established in the last-named States until
brought before the Supreme Court of the United States.