and position of an assignee. Such a party has no part of the legal estate; he cannot authorize others to make the machine; nor does the permission extended to him diminish in any degree the power of the patentee to make, or to authorize others to make, the patented machine. So, also, where the subject of the patent is a compound or composition of matter, if the patentee authorizes another to make and sell the article, the party so authorized becomes a licensee, but he has no interest in the patent, and no power to grant to others any portion of the exclusive right of making the thing, which is vested in the patentee.1 Upon this distinction it follows that a license does not require to be recorded, and that suits for infringement cannot be brought in the name of the licensee, but must be brought in the name of the patentee or other person holding the legal title; for an assignee may sue in his own name, because he holds the entire and unqualified interest which the suit is to vindicate.2

§ 212. If, then, an instrument vests in the grantee the exclusive right, either for the whole country, or for a particular district, of making and using the thing patented, and of granting that right to others, it is an assignment. The entire monopoly secured by the patent, for the whole country or for a particular district, must be embraced by an instrument which is to operate as an assignment. Any conveyance short of this is a license. If the patentee has seen fit to limit the extent of the monopoly, as by limiting the number of machines which his grantee may build and use in the particular district, the instrument may still be an assignment, provided it vests in the assignee the whole of the exclusive right so limited, including the right to grant to others the right to build and use any of the limited number of machines. But an exclusive license is no more than a common license, unless it vests in the licensee a right to grant to others the right to make and use the thing patented.4

3

1 Brooks v. Byam, 2 Story's R. 525, 538, 539, 542.

Gaylor v. Wilder, 10 How. 477.

Gaylor v. Wilder, 10 How. 477; Blanchard v. Eldredge, 1 J. W. Wallace, 337; Brooks v. Byam, 2 Story, 525; Protheroe v. May, 1 Webs. Pat. Cas. 445; s. c. 5 Mees. & Welsb. 675; Woodworth v. Wilson, 4 How. 712.

Gaylor v. Wilder, 10 How. 477; Woodworth v. Wilson, 4 How. 712; Protheroe v. May, 1 Webs. Pat. Cas. 445; Ritter v. Serrell, 2 Blatch. 379.

§ 213. A license, then, being an authority to exercise some of the privileges secured by the patent, but which still leaves an interest in the monopoly in the patentee, the first question that arises is, whether it is assignable. This quality is inherent in an assignment, but whether it belongs to a license depends on the terms of the instrument. A mere license to a party, without mentioning his assigns, is a grant of a power, or a dispensation with a right or a remedy, and confers a personal right upon the licensee, which is not transmissible to another person. It seems, however, that the use of the word "assigns" in the granting part of a license will not necessarily operate to make it assignable, when, from the tenor of the whole instrument, it appears to have been intended as a personal privilege. But whether a license is assignable or not, as to the entirety of the privilege, it is still more questionable whether it is apportionable, so as to permit the licensee to grant to others rights to work the patent, by subdividing the rights that may have been granted to himself.

§ 214. This question arose in a case where the patentee of friction matches granted to another the right to make, use, and sell the friction matches, and "to have and to hold the right and privilege of manufacturing the said matches, and to employ in and about the same six persons and no more, and to vend the said matches in the United States." The licensee afterwards undertook to sell and convey to a third person "a right of manufacturing friction matches, according to letters-patent, &c., in said town of A., to the amount of one right, embracing one person only, so denominated, in as full and ample a manner to the extension (extent) of the said one right, as the original patentee." Mr. Justice Story held that every conveyance of this sort must be construed according to its own terms and objects, in order to ascertain the true intent and meaning of the parties; and that, in this case, the interest under the license was an entirety, incapable of being split up into distinct rights, each of which could be assigned to different persons in severalty.2

$215. The relations of a licensee to the patentee, in respect to the validity and scope of the patent, involve an inquiry into 1 Brooks v. Byam, 2 Story's R. 525.

Ibid.

the terms of the license. The taking of a naked license, or permission to work under a patent, does not, without some recitals or covenants amounting to an admission, estop the licensee from denying the validity of the patent, or the fact that he has used the patented thing or process, if he is subsequently proceeded against for infringement. It is necessary to look into the instrument, and to ascertain that there are recitals or covenants which will deprive a licensee of the defences to which all other persons may resort. If, by his agreement, the licensee has admitted that the process or thing which he uses is the patented process or thing, and he is afterwards proceeded against for not complying with the terms of his agreement, he will not be permitted to show that he did not use that patented thing or process. So, too, if the deed contain recitals or statements amounting to an admission of the validity of the patent, either as to the novelty or utility of the supposed invention, or the sufficiency of the specification, the licensee will be estopped in an action of covenant for the rent or license dues, to deny the validity of the patent, by setting up anything contrary to the admissions in the deed. But if the patentee join issue upon an allegation made by a licensee contrary to an admission in his deed, instead of pleading the estoppel, the deed will be evidence for the patentee, but will not, as evidence, be conclusive.3

§ 216. It has also been held that a licensee, who has paid an annuity in consideration of a license to use a patent privilege, which he has had the benefit of, cannot recover back the money he has paid, upon the ground of the invalidity of the patent, in an action for money had and received. This is upon the ground that the licensee has had the benefit of what he stipulated for, and also upon the ground that the consideration is not divisible. But another question arises where there are periodical payments reserved by a license, and after some payments have been made, and while others remain to be made, the patent turns out to be invalid. In such a case, is there an estoppel growing out of the mere fact that 1 Baird v. Neilson, 8 Cl. & Fin. 726.

* Bowman v. Taylor, 2 Ad. & El. 278; Jones v. Lees, 38 Eng. L. & Eq. R. 318. Bowman v. Rostrom, 2 Ad. & El. 295.

Taylor v. Hare, 1 N. R. 260; s. c. 1 Webs. Pat. Cas. 292. Where the contract between patentee and licensee has been executed, and is not still executory, a plea by the licensee that the patent is invalid, in an action for the license money, is bad. Lawes v. Purser, 38 Law & Eq. R. 48.

the licensee has dealt with the patentee as if the patent were valid, and has paid some of the license dues? It would appear from the case of Hayne v. Maltby, and from the mode in which that case has been subsequently understood, that the estoppel must arise out of recitals or admissions of the defendant in his contract, and that it does not arise out of the mere circumstance of having worked under a license. In Hayne v. Maltby there was no recital of the plaintiff's title, but an agreement to use a machine according to the specification, and a covenant to pay. A plea that the invention was not new was sustained, and it was held that the doctrine of estoppel did not apply. The effect of this case has been thus explained by Lord Cottenham: "That although a party has dealt with the patentee, and has carried on business, yet that he may stop, and then the party who claims to be patentee cannot recover without giving the other party the opportunity of disputing his right, and if the defendant successfully dispute his right, that notwithstanding he has been dealing under a contract, it is competent to the defendant to do so. That is exactly coming to the point which I put, whether, at law, the party was estopped from disputing the patentees' right, after having once dealt with him as the proprietor of that right; and it appears from the authority of that case, and from the other cases, that from the time of the last payment, if the manufacturer can successfully resist the patent right of the party claiming the rent, that he may do so in answer to an action for the rent for the use of the patent during that year.'

§ 217. Where there has been no enjoyment by the licensee, and there is no covenant or recital admitting the validity of the patent, its invalidity may be set up as a failure of consideration, in an action upon an agreement to pay a certain sum for the right to use the patent privilege. The competency of a licensee to dispute the validity of the patent is a question which may also arise where the licensee is proceeded against for an infringement, upon the ground that he is using the patent contrary to the conditions in his license. If, for example, one receive a license to use a patented machine on condition that he pay a stipulated sum on all the articles which he may make by it, and, after having begun to

1

Hayne v. Maltby, 3 T. R.

* Neilson v. Fothergill, 1 Webs. Pat. Cas. 290.

Chauter v. Leese, 4 M. & W. 295; affirmed on error, 5 M. &. W. 698.

use the machine, he refuses or neglects to pay the license dues, or to comply with any other condition of the license, he may be enjoined in equity for an infringement like any other person unlawfully using the machine.1 Whether, in such a case, the licensee can set up the invalidity of the patent, as any other party could, must depend on the terms and operation of his contract, and upon what he himself claims under it. Merely taking a license, without any covenants or recitals admitting the validity of the patent, does not, as we have already seen, estop the licensee. But if there are such admissions in the contract, and the licensee has worked under it, and has paid the license dues for a time, and then stops, or if he still continues to claim under the license, and excuses his non-payment by reason of the non-performance of some agreement on the part of the patentee, he will still remain bound by his relation as licensee to admit the validity of the patent, and the sole question will be whether he is liable for an infringement; which will depend upon the validity of his excuses for not paying on account of a breach of the agreement by the patentee. But a different question arises where the licensee undertakes to repudiate the contract of license altogether, and to stand upon the right of every person to use the alleged invention because it is not new, or because the patent is void for some other reason. In such a case he foregoes all benefit of the license as a permission to use the alleged invention; but having taken the license, he is estopped by any admissions which it contains, unless he can avoid their effect by showing that he was deceived and misled.

§ 218. The situation of a licensee where the patentee undertakes to treat the license as forfeited for non-performance or violation of the conditions of the license, also presents several important subjects of inquiry. In the first place, it has been held, that a clause in a license, making it void on non-payment of the money consideration stipulated, is to be regarded as giving the patentee a double remedy; that is to say, he may enforce the collection of what is due to him, or he may treat the license as forfeited, and proceed to enjoin the licensee as infringer. So, too, a breach of

1 Brooks v. Stolley, 3 M'Lean, 523; Neilson v. Fothergill, Webs. Pat. Cas. 287, 290; Woodworth v. Cooke, 2 Blatch. 151.

Woodworth v. Weed, 1 Blatch. 165.