Paulus v. M.M. Buck Mfg. Co.

• Decision Date: 28 March 1904
• Docket Number: 1,968.
• Citation: 129 F. 594
• Parties: PAULUS et al. v. M. M. BUCK MFG. CO. et al.
• Court: U.S. Court of Appeals — Eighth Circuit

129 F. 594

PAULUS et al. v. M. M. BUCK MFG. CO. et al.

No. 1,968.

United States Court of Appeals, Eighth Circuit.

March 28, 1904

Syllabus by the Court

The owner of an undivided part of all the rights secured by a patent may, without the consent of his co-owners, grant a valid license to use the monopoly secured by the patent.

A patent secures the exclusive right to make, the exclusive right to use, and the exclusive right to vend the invention it protects. A grant of all these exclusive rights throughout the United States, a grant of an undivided part of all these exclusive rights, or a grant of all these exclusive rights throughout a specified part of the United States, is an assignment of an interest in the patent, by whatever name it is designated. A grant of any interest in or right under a patent less than these is a license.

An unrecorded parol or written grant of all the exclusive rights under a patent is an assignment, and under section 4898, Rev St. (U.S. Comp. St. 1901, p. 3387), it is void as against subsequent purchasers for value, without notice.

Where a chancellor has considered conflicting evidence, and made his findings and decree thereon, they must be deemed to be presumptively correct in an appellate court; and, unless an obvious error had intervened in the application of the law or some serious mistake has been made in the consideration of the evidence, they will not be disturbed.

James H. Pierce, George P. Fisher, Jr., Paul Bakewell, and Frederick R. Cornwall, for appellants.

George H. Knight, for appellees.

Before SANBORN, THAYER, and HOOK, Circuit Judges.

SANBORN Circuit Judge.

This is an appeal from a decree which dismissed a bill for relief from an infringement of letters patent No. 428,516, for improvements in railway drills, issued to the complainant Aaron R. Paulus on May 20, 1890. On June 14, 1890, he conveyed an undivided one-fourth of his interest in the patent to his co-complainant, William W. Ellis. The issue in this case is one of title, and not one of impinging inventions. The complainants' title, as the record discloses it, has been stated. This is the title of the defendants: On February 24, 1890, Paulus made a written agreement to sell and convey one-half of his interest under the patent to W. W. Ellis and Mrs. Mary West, the wife of Charles J. West, as soon as he should receive his patent. This agreement was not recorded. On June 14, 1890, Paulus conveyed one-fourth of his interest as patentee to Charles J West. On June 8, 1891, West assigned this interest to Mrs Mary West, his wife. After these assignments had been recorded, and on September 23, 1896, Mrs. West conveyed her one-fourth interest in the patent to the defendant Weaver and Emminger. On May 24, 1897, Weaver and Emminger granted a license to the defendant M. M. Buck Manufacturing Company to manufacture and sell the railway track drills protected by the patent to Paulus. Under this title, as the record of the Patent Office disclosed it, Weaver and Emminger owned an undivided one-fourth of the monopoly secured by the patent when they issued their license to the Buck Company, and Paulus and Ellis were entitled to no relief under their bill. The owner of an undivided part of all the rights secured by a patent may, without the consent of his co-owners, grant a valid license to use the monopoly it protects. Bloomer v. McQuewan, 14 How. 539, 14 L.Ed. 532; Blackedge v. Weir & Craig Mfg. Co., 47 C.C.A. 212, 108 F. 71. The burden was therefore upon the complainants to show that by reason of facts which the recorded title did not disclose the defendants ought not to be permitted to use the one-fourth of the exclusive rights under the patent which they had purchased. They endeavor to bear this burden in this way: They alleged in their bill, and the defendant denied in their answer, that about the 1st of June, 1890, they and Charles J. West, the owners of the patent, formed a partnership styled the Paulus R. R. Drill Company, and orally agreed that this partnership should have all the exclusive rights secured by the patent during its term; that neither one of them should sell his interest in the patent without first offering to sell it to the other members of the firm; that, if any one of them should sell to a stranger, the purchaser should step into the shoes of the vendor, and become a member of the partnership subject to the agreement; and that Weaver and Emminger had notice of these facts before they purchased their one-fourth interest from Mrs. West. Paulus and Ellis testified to the existence of the agreement of partnership and of transfer to the partnership of the exclusive rights protected by the patent, and Charles J. West and Mary West, his wife, testified that no such grant was ever made. The defendants introduced in evidence the written agreement dated February 24, 1890, by which Paulus contracted to sell to W. W. Ellis and Mrs. West a one-half interest in the patent as soon as he obtained it, and they testified that West never owned any interest in the patent; that the assignment to him dated June 14, 1890, was made by mistake, when it should have been made to Mrs. West; that Paulus knew these facts; that he made the assignment to West in the performance of the agreement of February 24, 1890; and that Mrs West never consented to any grant or license to the partnership which could in any way prevent her from using her one-fourth of the rights secured by the patent. The evidence was conclusive that Charles J. West and his wife left Villisca,...