The Eclipse Wind Engine Co. v. Zimmerman Manufacturing Co.

• Decision Date: 22 October 1896
• Docket Number: 1,768
• Parties: THE ECLIPSE WIND ENGINE COMPANY v. ZIMMERMAN MANUFACTURING COMPANY
• Court: Indiana Appellate Court

44 N.E. 1115

16 Ind.App. 496

THE ECLIPSE WIND ENGINE COMPANY v. ZIMMERMAN MANUFACTURING COMPANY

No. 1,768

Court of Appeals of Indiana

October 22, 1896

Rehearing denied Dec. 30, 1896.

From the DeKalb Circuit Court.

Reversed.

Allen Zollars and C. H. Worden, for appellant.

C. S Denny, R. W. McBride, J. W. Baxter and C. M. Brown, for appellee.

OPINION

GAVIN J.

The jurisdiction of this court over this cause must be regarded as settled by the Supreme Court's order. The petition for rehearing upon the motion to transfer is accordingly overruled. The questions presented in this case arise upon the special findings of the court with the conclusions of law thereon.

In 1889 appellant was the owner of a certain patent right, which it claimed was infringed by appellee through using certain improvements upon windmills which it made and sold. To release all liability for past damages and to provide against future liabilities, the parties entered into a written agreement by the terms of which, in consideration of $ 2,000.00, appellant released appellee from all damages accrued and "granted and licensed" the said Zimmerman Manufacturing Company to manufacture windmills of the same general form and construction as those now manufactured by it, and containing said patented improvements. In a further clause of the contract it was declared "that under the terms of this license the said Zimmerman Manufacturing Company shall have the right to manufacture windmills of the general type now made by it at Auburn, Indiana, or if said company shall cease manufacturing at Auburn, then at any other one point in the State of Indiana." Notes were given for the $ 2,000.00, and the appellee continued to manufacture and sell windmills of the same general form and construction as those before made by it. The notes did not contain the words "given for a patent right," nor had appellant filed in the clerk's office of the county duly authenticated copies of its letters patent, nor the affidavit required by section 8130, Burns' R. S. 1894 (6054, Horner's R. S. 1896).

For want of compliance with the statute the court held the notes unenforcible.

The sections of the statute relating to the question under consideration are as follows:

Section 8130, Burns' R. S. 1894 (6054, Horner's R. S. 1896). "It shall be unlawful for any person to sell or barter, or to offer to sell or barter, any patent right, or any right which such person shall allege to be a patent right, in any county within this State, without first filing with the clerk of the court of such county copies of the letters patent, duly authenticated, and, at the same time, swearing or affirming to an affidavit, before such clerk, that such letters patent are genuine, and have not been revoked or annulled, and that he has full authority to sell or barter the right so patented; which affidavit shall also set forth his name, age, occupation and residence, and, if an agent, the name, occupation, and residence of his principal. A copy of this affidavit shall be filed in the office of said clerk, and said clerk shall give a copy of said affidavit to the applicant, who shall exhibit the same to any person, on demand."

Section 8131, Burns' R. S. 1894 (6055, Horner's R. S. 1896). "Any person who may take any obligation, in writing, for which any patent right, or right claimed by him or her to be a patent right, shall form the whole or any part of the consideration, shall, before it is signed by the maker or makers, insert in the body of said written obligation, above the signature of said maker or makers, in legible writing or print, the words 'given for a patent right.'"

Section 8132, Burns' R. S. 1894 (6056, Horner's R. S. 1896). "Any person who shall sell or barter, or offer to sell or barter, within this State; or shall take any obligation or promise, in writing, for a patent right, or for what he may call a patent right, without complying with the requirements of this act; or shall refuse to exhibit the certificate when demanded, shall be deemed guilty of a misdemeanor, and, on conviction thereof before any court of competent jurisdiction, shall be fined in any sum not exceeding one thousand dollars, or be imprisoned in the jail of the proper county not more than six months, at the discretion of the court or jury trying the same, and shall be liable to the party injured, in a civil action, for any damages sustained."

The instrument referred to clearly confers upon appellee no interest in the patent itself. It is a mere license by which appellee acquired the privilege of making and using the patented improvement upon the windmills it manufactured, together with the right to sell such windmills thus constructed. It was stated in Ft. Wayne, etc., R. R. Co. v. Haberkorn, 15 Ind.App. 479, 44 N.E. 322, that "A patent is a grant to the patentee, his heirs and assigns, for a stated period, of the exclusive right to make, use, and vend the invention, or discovery, throughout the territory of the United States. The patentee may, by writing, assign or convey an entire or partial interest in the patent by conveying: first, the whole patent, comprising the exclusive right to make, vend, and use the invention throughout the United States; or, second, an undivided right or share of that exclusive right throughout this entire country; or, third, the exclusive right under the patent within a specified part of the United States. A transfer of either of these three kinds of interests is an assignment, properly speaking, and vests in the assignee a title to so much of the patent itself. Any assignment or transfer short of one of these is a mere license, giving the licensee no interest in the patent. A transfer, or grant of a right to make and use a patented appliance upon a particular machine, or number of machines or cars, could not, then, be more than a license to so make and use it within such fixed limits. Waterman v. MacKenzie, 138 U.S. 252, 34 L.Ed. 923, 11 S.Ct. 334; Mitchell v. Hawley, 16 Wall. 544, 21 L.Ed. 322, Walker Pat., section 296; Robinson Pat., section 806."

Can the granting of such a license be deemed a sale of the patent right within the meaning of these statutes?

The proposition herein involved has not been passed upon directly by any other court so far as we have been advised. The constitutionality of such laws has been the subject of much conflict among the various courts; some uphold laws more or less similar. Tod v. Wick, 36 Ohio St. 370; Herdic v. Roessler, 109 N.Y. 127, 16 N.E. 198; Tilson v. Gatling, 60 Ark. 114, 29 S.W. 35; Haskell v. Jones, 86 Pa. 173, uphold note clauses. Reeves v. Corning, 51 F. 774, sustains the requirements as to duly authenticated copies, but disapproves the note clause. Mason v. McLeod, 57 Kan. 105, 45 P. 76.

Others declare them to be in conflict with the federal laws upon a subject over which federal authority is supreme. Hollida v. Hunt, 70 Ill. 109; Crittenden v. White, 23 Minn. 24; Castle v. Hutchinson, 25 F. 394; Cranson v. Smith, 37 Mich. 309; Wilch v. Phelps, 14 Neb. 134, 15 N.W. 361; Ex Parte Robinson, 2 Biss. 309, 20 F. Cas. 961.

It is not our province to enter upon a consideration of this much mooted question. We must accept as final the repeated later adjudications of our own Supreme Court which recently said in Sandage v. Studabaker Bros. Mfg. Co., 142 Ind. 148, 41 N.E. 380: "Counsel for appellant urge that this statute is in conflict with the federal constitution and therefore void. This question has been settled to the contrary in this State, and is no longer an open question. New v. Walker, 108 Ind. 365, 9 N.E. 386; Hankey v. Downey, 116 Ind. 118; 1 L. R. A. 447, 18 N.E. 271; Pape v. Wright, 116 Ind. 502, 19 N.E. 459.

The peculiar characteristic of a patent right is its quality of exclusion. The right bestowed by a patent is that of excluding all others from enjoying the benefit of the invention. The right of the patentee either to use it himself or to sell it, he possesses naturally and without any patent. Herdic v. Roessler, supra; Tod v. Wick, s...