Keeler v. Standardco

• Decision Date: 08 April 1895
• Docket Number: FOLDING-BED,No. 52,52
• Citation: 39 L.Ed. 848,15 S.Ct. 738,157 U.S. 659
• Parties: KEELER et al. v. STANDARDCO
• Court: U.S. Supreme Court

157 U.S. 659

15 S.Ct. 738

39 L.Ed. 848

KEELER et al.

v STANDARD FOLDING-BED CO.

No. 52.

April 8, 1895.

[Syllabus from pages 659-660 intentionally omitted] The Standard Folding-Bed Company, a corporation of the state of New York, filed in the circuit court of the United States for the district of Massachusetts a bill of complaint against Keeler & Bro., partners doing business in the city of Boston.

By an agreed state of facts, if appears thatt he complainants are assignees, for the state of Massachusetts, of certain letters patent granted to one Lyman Welch, for an improvement in wardrobe bedsteads; that the Welch Folding-Bed Company own the patent rights for the state of Michigan; and that the defendants purchased a carload of said beds from the Welch Folding-Bed Company, at Grand Rapids, Mich., for the purpose of selling them in Massachusetts; and they they afterwards sold and are now engaged in selling the said beds in Boston.

The conclusion in the court below was that the defendants were not protected from the claim of the Massachusetts assignee by having purchased the patented articles from the Michigan assignee, and accordingly there was an injunction and final decree in favor of the complainants, from which an appeal was taken to this court.

Causten Browne and J. Henry Taylor, for appellants.

Edwin T. Rice, for appellees.

Mr. Justice SHIRAS delivered the opinion of the court.

It is provided in section 4884 of the Revised Statutes that 'every patent shall contain a grant to the patentee, his heirs, and assigns, for the term of seventeen years, of the exclusive right to make, use, and vend the invention or discovery throughout the United States and Territories thereof'; and in section 1898 that 'any patent or any interest therein shall be assignable in law by an instrument in writing, and the patentee entee and his assigns or legal representatives may in like manner grant and convey an exclusive right under his patent to the whole or any specified part of the United States.'

Where the patentee has not parted, by assignment, with any of his original rights, but chooses himself to make and vend a patented article of manufacture, it is obvious that a purchaser can use the article in any part of the United States, and, unless restrained by contract with the patentee, can sell or dispose of the same. It has passed outside of the monopoly, and is no longer under the peculiar protection granted to patented rights. As was said by Mr. Justice Clifford in Goodyear v. Rubber Co., 1 Cliff. 348, Fed. Cas. No. 5,557: 'Having manufactured the material and sold it for a satisfactory compensation, whether as material or in the form of a manufactured articel, the patentee, so far as that product of his invention is concerned, has enjoyed all the rights secured to him by his letters patent, and the manufactured article and the material of which it is composed go to the purchaser for a valuable consideration, discharged of all the rights of the patentee previously attached to it or impressed upon it by the act of congress under which the patent was granted.'

Suppose, however, the patentee has exercised his statutory right of assigning by conveying to another an exclusive right under the patent to a specified part of the United States. What are the rights of a purchaser of patented articles from the patentee himself within the territory reserved to him? Does he thereby obtain an absolute property in the article, so that he can use and vend it in all parts of the United States, or, if he take the article into the assigned territory, must he again pay for the privilege of using and selling it? If, as is often the case, the patentee has divided the territory of the United States into 20 or more 'specified parts,' must a person who has bought and paid for the patented article in one part, from the vender having an exclusive right to make and vend therein, on removing from one part of the country to another, pay to the local assignee for the privilege of using and selling his property, or else be subjected to an action for damages as a wrongdoer? And is there any solid distinction to be made, in such a case, between the right to use and the right to sell? Can the owner of the patented article hold and deal with it the same as in case of any other description of property belonging to him, and,o n his death, does it pass, with the rest of his personal estate, to his legal representatives, and thus, as a part of the assets to be administered, become liable to be sold?

These are questions which, although already in effect answered by this court in more cases than one, are now to be considered in the state of facts disclosed in this record.

In Wilson v. Rousseau, 4 How. 688, and in Bloomer v. McQuewan, 14 How. 556, it was held that the purchasers of patented machines had the right to continue the use of such machines, without again paying royalty, although the patent was twice extended. In the latter case it appeared that McQuewan, the defendant, had purchased his machines, not from the original patentee or from a territorial assignee, but from a purchaser from the latter. Therefore, that case is authority for the proposition that the purchaser chaser of a patented machine has not only the right to continue the use of the machine as long as it exists, but to sell such machine, and that his vendee takes the right to use.

The scope and effect of those decisions were thus expressed by Mr. Justice Clifford in Mitchell v. Hawley, 16 Wall 547; 'Patentees acquire by their letters patent the exclusive right to make and use their patented inventions and to vend to others to be used for the period of time specified in the patent; but when they have made one or more of the things patented, and have vended the same to others to be used, they have parted to that extent with their exclusive right, as they are never entitled to but one royalty for a partented machine, and consequently a patentee, when he has himself constructed a machine, and sold it without any conditions, or authorized thorized another to construct, sell, and deliver it, or to construct, use, and operate it, without any conditions, and the consideration has been paid to him for the thing patented, the rule is well established that the patentee must be understood to have parted to that txtent with all his exclusive right, and that he ceases to have any interest whatever in the patented machine so sold and delivered or authorized to be constructed and operated. Where such circumstances appear, the owner of the machine, whether he built it or purchased it, if he has also acquired the right to use and operate in during the lifetime of the patent, may continue to use it until it is worn out, in spite of any and every extension subsequently obtained by the patentee or his assigns.'

These cases were followed, and a step further taken, in the case of Adams v. Burke, 17 Wall. 453. There, Lockhart and Seelye owned, by assignment, all the right, title, and interest which the patentees had in a certain patented coffin lid, in a circular district of a diameter of 10 miles, whereof the city of Boston was the center. Adams, also by assignment, was the owner of all other rights under the patent. Burke, an undertaker, carried on his business at Natick, and within the territory covered by the patent as owned by Adams. To a bill for an infringement, filed by Adams in the circuit court of the United States for the district of Massachusetts, Burke pleaded that the patent coffins used by him in his business were purchased by him from Lockhart and Seelye, and were sold to him without condition or restriction.

The validity of this plea was sustained by the circuit court, and its decree dismissing the bill was affirmed by this court.

Mr. Justice Miller, in giving the opinion of the court, said: 'In the essential nature of things, when the patentee, or the person having his right, sells a machine or instrument whose sole value is in its use, he receives in consideration for its use, and he parts with the right to restrict that use. The article, in the language of the court, passes without the limit of the monopoly; that is to say, the patentee or his assignee having in the act of sale received all the royalty or consideration which he claims for the use of his invention in that particular machine r instrument, it is open to the use of the purchaser without further restriction on account of the monopoly of the patentee. * * * A careful examination of the plea satisfies us that the defendant, who, as an undertaker, purchased each of these coffins, and used it in burying the body which he was employed to bury, acquired the right to this use of it, freed from any claim of the patentee, though purchased within the ten-mile circle and used without it.'

It is obvious that necessarily the use made by Burke of these coffins involved a sale in every case. He did not put them to his personal use, unless we are permitted to suppose that he was himself buried in each one of the coffins. He bought the coffins for the purpose of selling them to others, and the legal significance of the decision upholding his defense is that a person who buys patented articles from a person who has a right to sell, though within a restricted territory, has a right to use and sell such articles in all and any part of the United States; that, when the royalty had once been paid to a party entitled to receive it, the patented article then becomes the absolute, unrestricted property of the purchaser, with the right to sell it as an essential incident of such ownership.

That this was the meaning of this decision not only appears from the language used, and from the necessary legal effect of the conclusion reached as between the parties , but from the dissenting opinion of Justice Bradley, whose reasoning went wholly upon the assumption that such was its meaning.

Boesch v. Gr aff, 133 U. S. 698, 10 Sup. Ct. 378, is...