White v. Lee

• Decision Date: 24 July 1880
• Citation: 3 F. 222
• Parties: WHITE and others v. LEE.
• Court: U.S. District Court — District of Massachusetts

3 F. 222

WHITE and others v. LEE.

United States Circuit Court, D. Massachusetts.

July 24, 1880

LOWELL C.J.

The complainants, citizens of Illinois, are the owners of two patents for an improvement in boots and shoes, and they bring this bill against the defendant, a citizen of Massachusetts for an injunction, and an account of profits and damages alleging an infringement of one of the patents. The bill alleges that the defendant took a license from the plaintiffs, a copy of which is annexed to the bill, to use said inventions during the continuance of the patents, and any extension or renewal thereof, on condition of keeping the agreements on his part, which were, to render accounts, pay royalties, and permit an inspection of his books; and, if he made default, the licensors might, at their option, cancel the license as thereafter provided. The mode of cancellation provided by the agreement is 'Upon a failure by the licensee to make returns, or to make payment of royalties, as herein provided, or to comply with any of his covenants or agreements herein, the licensors may terminate this license by serving a written notice upon the licensee, or by leaving such notice at the usual place of business of the licensee. But the licensee shall not thereby be discharged from any liability to the licensors, then accrued, whether due or not due.'

The bill does not rely upon a written notice to terminate the license, and it is admitted that none has been given; it merely avers that the defendant has refused to pay for the invention, and has, 'in all other respects,' failed and refused to perform his part of the agreement. This allegation is of too vague and general a nature to have much legal significance.

The defendant demurs to the relief, and I find his demurrer well taken.

The theory of the bill is that any failure by the licensee to pay the royalties, or to render an account, avoids the license immediately at the election of the licensor. A license is often compared to a lease of land, and many decisions follow this analogy. Now, so far is equity from decreeing the forfeiture of a lease for a breach of covenant, it often interferes to prevent a forfeiture which would exist at law. I know of no case in which a mere failure to pay money, or keep some engagement of that nature, has been held a good cause for asking a court of equity either to declare a forfeiture, or to proceed as if one had been incurred.

In some few patent cases, beginning with Brooks v. Stolley, 3 McLean, 523, it has been held that a patentee enjoyed the unusual privilege of treating a breach of covenant as if it, of itself, worked a forfeiture. No doubt the parties may agree that such an effect shall follow; and this will account for some of the decisions. The others of this sort are overruled by Hartell v. Tilghman, 99 U.S. 547.

The hardship of the doctrine contended for is manifest. The controversy in...