this action on the part of the McKay association put strangers on a more advantageous footing than themselves with respect to the patents covered by their license, because strangers could buy a machine upon the payment of the same sum which they originally paid, and use it without the payment of any royalty. The broad ground is taken that a licensor, independent of any express covenants in the license, has no right to do any act which will impair the licensee's enjoyment of the monopoly granted by the license; that the licensee has a vested interest in the monopoly which the licensor is bound to respect, and, it may be, to defend, and that if the licensor does any act whereby the monopoly is injuriously affected, such as granting other licenses for a less royalty, the licensee is relieved from the further payment of license fees under his license. I do not understand that the doctrine of eviction, as between licensor and licensee, has ever been pressed so far as this, and I find no case which supports the position of the defendants. It has been held that where a patent has been repealed, or where a licensee is enjoined from acting under a license at the suit of the owner of a senior patent, there is an eviction. Walk. Pat. § 307; Marston v. Swett, 66 N. Y. 206, 82 N. Y. 526; Iron Works v. Newhall, 34 Conn. 67. It was admitted by counsel for the plaintiff in Lawes v. Purser, 6 El. & Bl. 930, 932, that, if every one had publicly used the patented invention, that might amount to an eviction, and Walker, in the section cited, says that an eviction will probably be held to occur wherever the patentee is defied by unlicensed persons so extensively and so successfully as to deprive the licensees of the benefit of his share in the exclusive right which it was supposed to secure. Whether the general public use of a patented invention, in the absence of any covenant in the lease that the licensor will prosecute infringers, amounts to an eviction, has not been, so far as I have been able to examine the cases, judicially determined; and, upon the facts before me in this case, it is not necessary to decide this question. The rule, however, is now well established that the mere invalidity of the patent is not a sufficient defense to the payment of royalties under a license, because the licensee may still continue to enjoy all the benefits of a valid patent. Birdsall v. Perego, 5 Blatchf. 251; Marsh v. Dodge, 4 Hun, 278; Bartlett v. Holbrook, 1 Gray, 114; Marston v. Swett, 66 N. Y. 206, 82 N. Y. 526. In White v. Lee, 14 Fed. Rep. 789, the defendant sought to resist an action for license fees on the ground that the patent was void. In his opinion in that case Judge LowELL carefully reviews the authorities. His conclusion is that the mere invalidity of the patent is not a sufficient defense, but "that something corresponding to eviction must be proved if a licensee would defend against an action for royalties." In other words, it is not enough for a licensee to prove that the patent is void, but he must also show that he has been deprived of the benefits secured to him under his license. seem, therefore, from the cases, that eviction may be shown, where the patent has been repealed, or where the licensee has been enjoined from acting under the license at the suit of the owner of a senior patent, or where he can show that he has been deprived of the benefits of his license under a patent which is void. In these instances it may be said that the subject-matter of the contract has been in substance destroyed, and therefore the payment of royalties should cease. A license is the grant of a right to manufacture, use, or sell the thing patented, but, outside of the terms of the contract, I do not see that there is any implied covenant that the licensor will protect the licensee in the full enjoyment of the monopoly. If a licensee, as in this case, enters into an agreement to pay royalties for the use of a patented machine, and attaches no such conditions to the contract as that the licensor will not license to others for a less royalty, or that the licensor will prosecute infringers, it is difficult to discover upon what principle the licensor is bound by any such conditions. There is no implied covenant in a license that the licensor will protect the licensee against competition. In the present case more than 1,000 licenses have been issued to use the McKay machine. By so doing the licensor creates competition. But it is not contended that this relieves the licensee from the payment of royalties; and with equal reason I think that a licensor may license others to use a patented machine at a less price, in the absence of any express agreement in the license, the same as a landlord may lease one store in a block for a less rental than another. It is a question of contract. Admitting that there is an analogy between the case of landlord and tenant and that of licensor and licensee under a patent, I do not see how that helps the defendants upon the facts before me in this suit. What was granted to the defendants was not the protection of the monopoly covered by the license, but the right to use a machine which embodies certain patents. If they were deprived of the use of the machine by the act of the licensor, they might set up eviction, but they cannot continue to use the machine and refuse to pay the royalty due under their contract. When we begin to import implied covenants into a license the problem meets us of where we are to begin and where to end. Upon the theory of the defendants in this case, it would seem that any act or omission on the part of a licensor which impairs the benefit to be derived from the use of the patents contained in the license amounts to an eviction, and relieves the licensee from further payment of royalties, and at the same time allows him to go on and use the patents. Such a doctrine as this, it seems to me, is manifestly unsound, and would lead to much confusion in this important branch of the patent law. The rule of caveat emptor should be invoked here as elsewhere; and, if the licensee expects protection, the terms and the degree of such protection should form part of his contract. It is quite common in licenses to provide that the licensor shall not grant future licenses for a less royalty without allowing prior licensees the benefit of any such reduction. In the present case, there being no express stipulation in the license that the complainant should not lease or sell the machine to others for a less price, I think the defendants should account to the complainant for the amount of unpaid royalties due under their license upon the shoes manufactured by them on the McKay machine. Decree for complainant. THE AUGUSTINE KOBBE. REVERE COPPER Co. et al. v. THE AUGUSTINE KOBBE. (Circuit Court, S. D. Alabama. June 24, 1889.) 1. MARITIME LIENS-PRIORITIES. After return from a foreign voyage, a coasting trip for repairs and to earn freight on the way to the port of loading for abroad again is to be considered a voyage, when the contemplated foreign voyage is broken up by seizure of the vessel; and creditors on this domestic trip will be paid in full, although no funds will remain to satisfy those of the late foreign voyage. 2. EVIDENCE-PAROL TO VARY WRITING. In a suit in admiralty by prior creditors to enforce their claims against a vessel, evidence is admissible of an agreement between master and charterer, not incorporated in the charter-party, to pay off prior liens. 8. MARITIME LIENS-PRIORITIES. Under the circumstances of this case, one chartering a vessel with knowledge of existing liens must, when the voyage is broken up, have his damage by breach of charter subordinated to the earlier claims; but he will be allowed moneys advanced for the necessities of the vessel, and will be paid pari passu with these liens. 4 SAME-PAYMENTS FOR SUPPLIES. Payment at the request of the master, just before her seizure, of a ship's draft for necessary supplies, furnished on an earlier foreign voyage, imports a maritime lien that will be satisfied out of the proceeds of her sale. 5. SAME. Supplies delivered in New York to an agent of the ship in a ship-yard at Jersey City give a general maritime lien. 6. SAME-REPAIRS. When a ship purports to hail from a foreign port, and the carpenter is not informed to the contrary, repairs, exclusively on her credit, import a general maritime lien, and the owner is estopped from setting up that she is a domestic vessel. In Admiralty. On appeal from district court. 37 Fed. Rep. 696, 702. The Kobbe, after a voyage from Portland, Me., to South America, and return to Providence, R. I., was repaired at Jersey City for another South American voyage, and started for Pensacola to receive her outward cargo, calling at Mobile to deliver a Mobile cargo taken on at New York. While there, the master abandoned his proposed voyage to South America for one on more advantageous terms to Great Britain, for the firm of Martin, Taylor & Co., of Mobile, whereupon sundry creditors seized the vessel, had her sold under order of the district court, and established their claims by suit in that court. The opinion of TOULMIN, district judge, in the court below, as well as a full statement of the facts, will be found reported in the two cases of The Kobbe, 37 Fed. Rep. 696, 702. The only new facts elicited in the circuit court were that the copper purchased for the vessel from the Revere Company was delivered to the ship's agent in New York, and was there punched for her use before being sent over to Jersey City to be put on her; and that the New Jersey carpenters, Gokey & Son, knew nothing of the ownership of the vessel except that a maritime register gave her as owned in New Eng land; that the name painted on the stern marked her as of Searsport, Me.; and that Alfred Conover, the master, who contracted for the repairs, and whose wife now claims to own the vessel, and to reside in New Jersey, had at one time lived in Philadelphia. The appeal was argued for two days before Mr. Circuit Justice LAMAR and Mr. Circuit Judge PARDEE. The opinion here reported was filed by the court rather as an explanation of the decree rendered than as an exhaustive opinion. Under the facts, the court did not find it necessary to pass on the relative rank of statutory and maritime liens. Part of the money allowed Edwards and Martin, Taylor & Co. was, in fact, advanced by them to pay off stevedores, who are given a lien by the Alabama statute, and the decree ranks these claims as equal to maritime claims, although the opinion is silent on the point. The decree rendered was in these words: "This cause came on to be heard on the appeal of the Revere Copper Company, William Gokey & Son, John S. Adamson, and J. R. Edwards, libelants and petitioners in the case, and was argued, whereupon, and it appearing that in the district court the said bark Augustine Kobbe was sold by the order of court, and the proceeds thereof, $6,350, paid into court, of which sum has been paid and distributed in the court below the costs of the sale, and the costs of the district court, the seamen's wages, and bills for pilotage and towage, amounting to some $1,746.40, which leaves in the registry of this court, to be distributed, under the decree to be herein rendered, among the several libelants having liens, the sum of $4,603.60, it is ordered, adjudged, and decreed that the following named claims and liens, incurred in the port of Mobile, and on the last voyage of the said Augustine Kobbe, to-wit, from the port of Providence, R. I., via New York, to the port of Mobile, be paid pro rata out of said fund, after all the costs of this court shall be taxed by the clerk, and paid, towit: to Martin, Taylor & Co., the sum of $993; to Joseph R. Edwards, the sum of $560.74; to Charles A. Leanman, the sum of $61.90; to L. P. Waganer, the sum of $34.70; to John Boyce, the sum of $15.30; to Baker, Carver & Co., the sum of $505.25; to William Gokey & Son, the sum of $1,818.28; to Revere Copper Co., the sum of $998.80. The remaining claims and liens, together with the claim of Richard Doughty, mortgagee, it is not necessary to rank and order paid, because they are postponed to the aforesaid claims, and there are no funds in court arising out of the sale of the said bark Augustine Kobbe to pay any part of them. "June 21, 1889. ver. [Signed] "L. Q. C. LAMAR, Circuit Justice. G. L. & H. T. Smith, for Revere Copper Company and Baker & Car Hamiltons & Gaillard, for Steelman et al., sailors, and for sundry petitioners. D. C. & W. S. Anderson and Hamiltons & Gaillard, for Gokey & Son. J. L. & T. H. Smith, for Edwards and Doughty. PER CURIAM. For the information of proctors and parties we give the following explanation of the decree handed down in this case: The funds in court are not sufficient to pay the conceded maritime liens in the case. For the purposes of determining priority, we have considered that the last voyage was from the port of Providence, R. I., via New York, to the port of Mobile. Whether the trip from Portland, Me., to South America, and thence back to Providence, R. I., should be considered one or two voyages is immaterial. We think that the liens upon this last voyage are entitled to be paid in preference to those incurred on prior voyages. Martin, Taylor & Co., in Mobile, had knowledge of the liens which existed to a large amount against the Kobbe. There is evidence, which we think admissible, to show that Martin, Taylor & Co. agreed to advance the necessary sums to pay off or postpone those liens, so that the ship could make the voyage as contracted with Martin, Taylor & Co. Whether this contract was made or not we deem immaterial, because, with the knowledge Martin, Taylor & Co. had, they had no right to make a charter which, if the vessel should be seized, would further incumber her with large damages, growing out of the failure to comply with the charter-party. We think that Martin, Taylor & Co. should be allowed only the amounts advanced by them to the Kobbe for the necessities of the ship, and that any claim they may have for damages growing out of the breaking up of the voyage and the failure to comply with the charter-party should be postponed until valid liens are paid. As to the claim of Joseph R. Edwards, we allow him the amounts advanced by him for the necessities of the ship in the port of Mobile. The debt to L. P. Wright & Co., which was paid by the said Edwards at the request of the master, imported a lien upon the ship, for which a seizure could have been made, and was threatened. We think that for such advance Mr. Edwards is entitled to the regular maritime lien for necessary supplies furnished a ship in foreign ports. The copper furnished by the Revere Copper Company for the Kobbe was furnished in the port of New York, and to a vessel registered in Searsport, Me., and holding out Searsport, Me., as her home port, although then lying in the waters of New Jersey, and belonging to a party then living in New Jersey. We consider the copper as furnished in the port of New York on the credit of the ship. The bill of William Gokey & Son is for supplies and repairs furnished in Jersey City to a vessel registered in Searsport, Me., having painted on her stern, as required by the act of congress, "Augustine Kobbe, Searsport, Maine." She was thus held out. by her owner as of Searsport, Me. Gokey & Son were not apprised, as the evidence clearly shows, of the fact that the residence of the owner was in New Jersey. The owner, therefore, is estopped from claiming other than Searsport, Me., as the home port, and we think, and so decide, that Searsport, Me., was, in the particular circumstances of this case as to him and the other parties interested, the home port of the vessel; that the credit for these supplies and repairs was given exclusively to the ship, and without any reference to the credit of the owner, and, therefore, that the claim imports a maritime lien upon the ship. v.39F.no.11-36 |