Boesch v. Graff

• Decision Date: 03 March 1890
• Citation: 33 L.Ed. 787,10 S.Ct. 378,133 U.S. 697
• Parties: BOESCH t al. v. GRAFF et al
• Court: U.S. Supreme Court

133 U.S. 697

10 S.Ct. 378

33 L.Ed. 787

BOESCH t al. v. GRAFF et al.

March 3, 1890.

J. J. Scrivner, for appellants.

J. H. Miller, for appellees.

FULLER, C. J.

Albert Graff and J. F. Donnell filed their bill in the circuit court of the United States for the northern district of California against Emile Boesch and Martin Bauer, to recover for infringement of letters patent No. 289,571, for an improvement in lamp-burners, granted on December 4, 1883, to Carl Schwintzer and Wilhelm Graff, of Berlin, Germany, assignors of one-half to J. F. Donnell & Co., of New York, all rights being averred to be now vested in the complainants. Claim 1, alleged to have been infringed, reads as follows: 'In a lamp-burner of the class described, the combination, with the guide tubes, of a ring-shaped cap provided with openings for the wicks, said cap being applied to the upper ends of the guide tubes, so as to close the intermediate spaces between the same, substantially as set forth.' The patent was granted December 4, 1883, but prior to that, November 14, 1879, January 13, 1880, and March 26, 1880, letters patent had been granted to Carl Schwintzer and Whilhelm Graff by the government of Germany for the same invention. After a hearing on the merits, an interlocutory decree was entered, finding an infringment, and referring the case to a master for an accounting. The opinion will be found reported in 33 Fed. Rep. 279. A petition for a rehearing was filed, and overruled. The case then went to the master, who reported that the infringement was willful, wanton, and persistent; that the appellees had sustained demages to the extent of $2,970.50; and that they waived all claims to the profits realized by the infringement. Exceptions were filed to this report, and overruled, and a final decree entered in favor of Graff and Donnell for $2,970.50, with interest, and costs, from which decree this appeal has been prosecuted. Appellants urge three grounds for reversal: First, that a title to the patent sufficient to maintain a suit for infringement was not, at the date of filing the bill, vested in the complainants; second, that Boesch and Bauer could not be held for infringement, because they purchased the burners in Germany from a person having the right to sell them there, though not a licensee under the German patents; third, that the damages awarded were excessive.

These propositions are presented by some of the errors assigned, and are the only errors alleged which require attention, that which questions the infringement not being argued by counsel, and that which goes upon the refusal of the circuit court to grant a rehearing not being open to consideration here. Buffington v. Harvey, 95 U. S. 99, 100; Steines v. Franklin Co., 14 Wall, 15, 22; Railway Co. v. Heck, 102 U. S. 120; Kennon v. Gilmer, 131 U. S. 22, 24, 9 Sup. Ct. Rep. 696. The assignment by Schwintzer to Albert Graff was dated the 22d day of April, 1885, was absolute in form, and transferred title to six twenty-fourths of the patent, for the expressed consideration of 'the sum of one hundred dollars, and for other valuable considerations;' but a contract between Schwintzer and Albert Graff was produced by the latter upon his examination by the respondents, which read as follows: 'S. 1. Mr. Albert Graff binds himself to pay to Mr. Carl Schwintzer, instead of the, in the patent letter mentioned, one hundred dollars for the first year, the sum of two hundred and fifty marks, payable on the 1st February, 1886, and each following year on the same date the sum five hundred marks, (not less,) till the amount of four thousand marks are paid in all. S. 2. Should Mr. Albert Graff, of San Francisco, not be able to sell more than one thousand burners, called 'Diamond' or 'Mitrailleuse' burners, No. 10,621, manufactured by Mess. Schwintzer & Graff, of Berlin, he reserves to himself to make up a new agreement with Mr. Carl Schwintzer. S. 3. Should not Mr. Albert Graff, San Franciso , against all expectation, stick to the agreements mentioned in S. 1 & 2, all titles of the patent letter ceded to him by Carl Schwintzer shall him return. S. 4. Mr. Carl Schwintzer, partner of the firm Schwintzer & Graff, engages to deliver to Mr. Albert Graff the said burners at the same price as before, if the market price of the metal does not exceed,—make 150% kos.; and promise likewise to effect any order promptly, if in his power.'

Albert Graff testified in respect to the words, 'instead of the, in the patent letter mentioned, one hundred dollars for the first year,' etc., that they meant that, instead of the $100 mentioned in the assignment, he was to pay 250 marks the first year, and that the contract was made on day later than the assignment. Counsel contends that the two documents must be construed together, and amount simply to an executory contract to assign when Graff shall have paid the sum of 4,000 marks; that, therefore, Graff could, at most, only be regarded as a licensee of the interest under the patent, until such time as his contract should be executed according to its terms; and that the legal right as to six twenty-fourths of the patent remained in Schwintzer, who was therefore a necessary party. It is evident that the agreement was not drawn by parties well versed in English but their intention is sufficiently apparent. The assignment, being absolute in form, conveyed the legal title, and on the next day the parties signed this contract, relating to the consideration, probably to enable Albert Graff to pay the 4,000 marks out of the sales of the burners; at all events, it provides that, if Graff failed to carry out his covenants, then the title was to return to Schwintzer, which provision was in the nature of a security to him that he should be paid. The condition that if Mr. Albert Graff did not, 'against all expectations, stick to the agreements mentioned in S. 1 & 2, all titles of the patent letter ceded to him by Carl Schwintzer shall him return,' is a condition subsequent. The title had already vested, but was liable to be defeated in futuro, on failure of the condition. There has been no such failure, but, on the contrary, Albert Graff has paid the 4,000 marks in full. We shall therefore not reverse the decree on the ground first referred to.

Letters patent had been granted to the original patentees for the invention by the government of Germany in 1879 and 1880. A portion of the burners in question were purchased in Germany from on Hecht, who had the right to make and sell them there. By section 5 of the imperial patent law of Germany, of May 25, 1877, it was provided that 'the patent does not affect persons who, at the time of the patentee's application, have already commenced to make use of the invention in the country, or made the preparations requisite for such use.' 12 O. G. 183. Hecht had made preparations to manufacture the burners prior to the application for the German patent. The official report of a prosecution against Hecht in the first criminal division of the royal district court, No. 1, at Berlin, in its session of March 1, 1882, for an infringement of the patent law, was put in evidence; wherefrom it appeared that he was found not guilty, and judgment for costs given in his favor, upon the ground 'that the defendant has already prior to November 14, 1879,—that is to say, at the time of the application by the patentees for and within the state,—made use of the invention in question, especially, however, had made the necessary preparations for its use. Section 5, eodem. Thus Schwintzer & Graff's patent is of no effect against him, and he had to be acquitted accordingly.'

It appears that appellants received two invoices from Germany, the burners in one of which were not purchased from Hecht, but, in the view which we take of the case, that circumstance becomes immaterial. The exact question presented is whether a dealer residing in the United States can purchase in another country articlesp atented there, from a person authorized to sell them, and import them to and sell them in the United States, without the license or consent of the owners of the United States patent. In Wilson v. Rousseau, 4 How. 646, it was decided that a party who had purchased and was using the Woodworth planing-machine during the original term for which the patent was granted, had a right to continue the use during an extension granted under the act of congress of 1836; and Mr. Chief Justice TANEY, in Bloomer v. McQuewan, 14 How. 539, 549, says, in reference to it, that 'the distinction is there taken between the grant of the right to make and vend the machine and the grand of the right to use it.' And he continues: 'The distinction is a plain one. 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 that he obtains by the patent. And, when he sells the exclusive privilege of making or vending it for use in a particular place, the purchaser buys a portion of the franchise which the patent confers. He obtains a share in the monopoly, and that monopoly is derived from, and exercised under, the protection of the United States. And the interest he acquires necessarily terminates at the time limited for its continuance by the law which created it. * * * But the purchaser of the implement or machine, for the purpose of using it in the ordinary pursuits of life, stands on different ground. In using it he exercises no rights created by the act of congress, nor does he derive title to...