license as the one now under consideration. The conveyance in this case is of the exclusive right to make, use, and sell the patented invention; the complainant yielding and paying therefor the royalties, and upon the terms and conditions, specified in a separate agreement. The owner of the patent has the legal title,-a continuing right to receive royalties for the use of the patent; and whether its use is contingent upon the performance of the conditions, which are contained in the separate agreement, is not known. It is apparent that the owner is continually pecuniarily interested in infringements, if these infringements diminish sales, and therefore diminish royalties; and it does not appear whether the exclusive license is an absolute conveyance, or one which may be defeated, and whether the licensee may cease to enjoy the right. It is by no means clear that the owner has not retained a very considerable interest in the patent, and therefore I cannot say that the license amounts to either an assignment or a grant.

In Nellis v. Manufacturing Co., 22 O. G. 1131, 13 Fed. Rep. 451, Judge MCKENNAN held that the complainant, to whom and to whose legal representatives had been given the exclusive right to manufacture and sell the patented invention in the United States to the full end of the patented term, could alone maintain a bill in equity for an infringement. It appears, however, that by a subsequent agreement the assignees were relieved from liability to forfeiture, and were released from other liabilities assumed by them by an agreement of even date with the original conveyance, and that the effect of that agreement upon the right conveyed by the assignment was nullified. The court was of opin

ion that the entire interest of the assignee in the patent was intended to be vested in the assignee.

In illustration of the distinction between an absolute and a conditional conveyance is the case of Manufacturing Co. v. Manufacturing Co., 27 Fed. Rep. 550, decided by Judge BLODGETT, in which he held that "where owners of patents had granted the entire interest in them for certain territory, but upon certain conditions which grantees were to perform, and, upon failure to perform, the title was to revert to grantors;' "that grantors' title was never fully divested, or at least, they had a possible reversionary interest, so that it was proper to join them as complainants in a suit for infringement of the patents within the territory covered by the grant."

But the precise question in this case came indirectly before the circuit court for this circuit in Huber v. Sanitary Depot, 34 Fed. Rep. 752, in which it was held that the sole owner of one patent, and exclusive licensee of another, may join his licensor as plaintiff in one bill for an injunction against the use of an apparatus infringing both patents, and that such a bill was not demurrable for misjoinder of parties. The facts in that case appear to have been the same as in this case. The complainant was the owner of one patent, and, "except for the payment of royalties, entitled to the whole beneficial interest in the other." Judge LACOMBE says: "As exclusive licensee, however, he is required to join the owner of the legal title." It is true that this question was not prob

ably a subject of contention between the counsel. The contention was whether one or two bills must be brought, and the fact that the licensor and the exclusive licensee must be joined was not a subject of dispute. But this bill cannot be sustained without disregarding the opinion of the court for this circuit upon the question of law which is raised by the demurrer.

The defendant also demurs because the, allegations of the bill in regard to title in either patent are not sufficient. The allegations are that, by mesne assignments and grants, it became, prior to the bringing of this suit, and now is, the party interested in said letters patent; "all of which, by said assignment and grants, now in court produced and shown, will more fully appear." The objection is that the bill does not show how the complainant is interested, whether as assignee, grantee, or whether it is solely interested, or the extent of the interest. The allegations, coupled with the profert and exhibit of the "assignments and grants," which show the nature and character of the interest, are sufficiently definite. The demurrer, so far forth as it relates to the parties who must unite in a suit upon the Beecher patent, is sustained. is given to amend.

Leave

CONSOLIDATED ROLLER-MILL Co. v. RICHMOND CITY MILL-WORKS.

(Circuit Court, D. Indiana. November 9, 1889.)

PATENTS FOR INVENTIONS-INFRINGEMENT-PRELIMINARY INJUNCTION.

A provisional injunction will not be granted, against the infringement of a patent whose validity is dependent upon the result of an appeal in a former suit for its infringement, where it appears that defendant has been carrying on its business in good faith, and in ignorance of the alleged infringement, and that a stoppage would be an irreparable injury, while plaintiff has an adequate remedy in damages.

In Equity. On motion for provisional injunction.

Rodney Mason, for complainants.

Parkinson & Parkinson, for defendant.

GRESHAM, J. The above complainants brought suit on four patents, in the eastern district of Michigan, against William A. Coombs, as the user of a roller-mill, made by the defendant in this suit, for the manufacture of flour. The answer attacked the validity of all the patents, and denied infringement. The complainants abandoned one of the patents at the hearing. The court held two of them invalid, and sustained the second, third, fourth, and fifth claims of the other, the Gray patent, which consisted "in a peculiar construction and arrangement of devices. for adjusting the rolls vertically, as well as horizontally, whereby any unevenness in the wear of the rolls, or in their journals or bearings, may be compensated for, and the grinding or crushing surfaces kept exactly in line," and also "in the special devices for separating the rolls when not in action, and in other details." The usual decree was entered

against the defendant, and the case was sent to a master.

The answer

in the suit here sets up substantially the same defenses that were relied on in the Michigan case, which was defended by an association of five mill furnishers, of which the defendant, the Richmond City Mill-Works, was one. The motion for a provisional injunction is based in part upon the decree in the Michigan 'case on the theory that there was privity between the defendant there and the defendant here. Prior to the commencement of the Michigan suit, Allis, the then owner of the Gray patent, sued Freeman for its infringement in the western district of Wisconsin,' and after a hearing the court (Judge BUNN) held the patent invalid, and dismissed the bill for want of equity. The complainant appealed, and then assigned the patent to the parties, or some of them, who became complainants in the Michigan suit, and they dismissed the appeal. Why this was done we do not know. In Gray's first application for a patent he claimed broadly the means for adjusting the roller bearings, irrespective of the particular location of the supporting pivots, which were adjustable, and irrespective of other details of construction. The application was rejected by the patent-office. Gray submitted to the decision, and filed another application, with claims limited to special devices for his adjustments, and the application; with the claims thus limited, was allowed. Judge BROWN, who heard the Michigan case, did not hold Gray to the limitations imposed upon him by the patent-office, but construed his claims broadly, and somewhat as if the patent were a pioneer. Indeed, he interpreted the claims as if no limitations had been introduced into them by amendment to meet the requirements of the patent-office. Certain foreign patents, properly or improperly, caused the patent-office to reject Gray's original application. He submitted to the decision as stated above, and amended his claims by limiting them to the "special devices" by which he made his adjustments, and if he is held to these limitations, and his claims are not expanded by construction, this suit must fail, and the appeal from the Michigan decree will be reversed. It is not necessary, however, for the court, at this time, to express an opinion as to the correctness of the rulings of the learned judge who entered the decree in the Michigan case, or of the effect of that decree upon the defendant in this suit. The defendant is a manufacturer, and the complainants are not, and if the supreme court should hold the Gray patent invalid, and reverse the decree in the Michigan suit, this defendant might, and probably would, suffer irreparable injury, while, if the decree of the Michigan court is affirmed, the complainants can recover full damages and profits for the use of their patented improvements. The defendant owns and operates an extensive establishment, and has a large capital invested in the manufacture of roller-mills. It cannot be said upon the proofs before the court that the defendant has not been carrying on its business in good faith, and in the belief that it was not trespassing upon the rights of others, and a sudden stoppage of its business might be ruinous to it. The chances are more than

'No opinion filed.

even that if the court should now issue a provisional injunction as prayed for it would result in serious injury to the defendant without benefit to the complainants. The motion for a provisional injunction will be denied, when the defendant files an undertaking, with security, to be approved by the clerk of the court, for the payment of any decree that may be rendered in favor of the complainants on final hearing.

CELLULOID MANUF'G Co. v. CELLONITE MANUF'G CO.

(Circuit Court, 8. D. New York. November 6, 1889.)

1. PATENTS FOR INVENTIONS-PROFITS FROM USE-FINDINGS OF MASTER. In an action to recover profits arising from the use of a patent solvent, the master in chancery found that defendants used the solvent for treating pyroxyline, and during the same period treated it with other solvents, but, owing to a defect in the pyroxyline, its treatment with the various solvents resulted in a product which could not be sold at a profit; but that, if defendants had not used the solvent in question, they would have used others; and that, by reason of the patent solvent being cheaper, defendants saved a sum which complainant was entitled to recover as a profit. Held, that the conclusion of the master was correct.

2. EQUITY-REPORT OF MASTER-FINDINGS OF FACT-WAIVER.

The reason for the rule requiring objections to the findings of a master in chancery to be first made to him on the draft of his report does not fully obtain where the objection is to the principal finding of fact, as he probably would not have changed his conclusion; but it is no hardship to require of the dissatisfied party that he so state his objections, or be deemed to have waived them.

8. SAME-CONCLUSIONS OF LAW.

Where the master is correct in his findings of fact, but errs as to conclusions of law, the rule requiring exceptions to his report is not applicable.

In Equity. On exceptions to master's report.

J. E. Hindon Hyde, for complainant.

John R. Bennett, for defendant.

WALLACE, J. The exceptions filed by the defendant to the report of the master, to whom it was referred to take an account of damages and profits, impugn every important finding of the master upon matters of fact, and also his conclusion of law upon the facts. The testimony taken before the master has been examined sufficiently to ascertain that it justifies his findings of fact. In the view most favorable to the defendant, the master has only found against the defendant upon facts as to which there is a fair conflict of testimony. His findings, therefore, should not be disturbed. Mason v. Crosby, 3 Woodb. & M. 258. Although the testimony bearing upon the exceptions has been thus examined, it is not to be understood that the court is of the opinion that the defendant is entitled to have these exceptions considered. In his draft report the master made the same findings, and no objections to them were interposed by the defendant. According to the correct practice, no exceptions to a report can be considered which were not taken before the master in the form of objections to his draft of the report. The reason for

this rule of practice is that the master might have allowed the objections, and corrected his report, if errors had been pointed out to him; thus saving the parties unnecessary expense, and the court unnecessary trouble. 2 Daniell, Ch. Pr. (2d Amer. Ed.) 1483; Church v. Jaques, 3 Johns. Ch. 81; Byington v. Wood, 1 Paige, 145; Copeland v. Crane, 9 Pick, 73; Story v. Livingston, 13 Pet. 359; Gaines v. New Orleans, 1 Woods, 104; Gordon v. Lewis, 2 Sum. 143; Nail Factory v. Corning, 6 Blatchf. 328. So far as the cases of Hatch v. Railroad Co., 9 Fed Rep. 856, and Jennings v. Dolan, 29 Fed. Rep. 861, relax this rule of practice, they are inconsistent with the practice in this circuit, as recognized in the case of Nail Factory v. Corning. When the correctness of the principal finding of the master-a finding upon the ultimate question of fact referred to himis controverted, it is hardly to be supposed that an objection to the draft report would have induced him to change his conclusion, and consequently the reason for the rule does not fully obtain; but it is no hardship to the dissatisfied party to require him to state his objections, and, unless the precedents are to be disregarded, he must be deemed to waive any objection which he does not state. If, owing to accident, surprise, or any other sufficient excuse, the objections have not been properly taken before the master, the court may, upon an application showing the facts, recommit the report to the master, and allow the dissatisfied party to make and argue the objections before him, or may permit the exceptions to be filed as though the objections had been properly taken.

The practice thus referred to does not preclude the defendant from being heard upon a question of the correctness of the legal conclusion reached by the master. Where the master, by his report, states the facts correctly, but errs as to the legal conclusion, the party against whom he errs is not required to except to the report, but may bring the question to the attention of the court upon further directions; or, if the report is made pursuant to an interlocutory decree, when the cause comes on to be disposed of by a final decree. 2 Daniell, Ch. Pr. 149. The cause remains under the control of the court until disposed of by a final decree, and until then it can revise the interlocutory decree, or any proceeding in the cause; and it is its duty to correct any error of the master affecting the merits, as well as any error of its own, properly brought to its knowledge. Wooster v. Handy, 22 Blatchf. 308, 21 Fed. Rep. 51; Perkins v. Fourniquet, 6 How. 206; Fourniquet v. Perkins, 16 How. 82. There is nothing inconsistent with these well-settled rules of chancery practice in equity rule 83.

The defendant insists that the master has erred in his conclusion of law that the defendant made gains, profits, and advantage by its use of the patented solvent in the treatment of pyroxyline. The master finds that for a period of several months in the year 1887 the defendant used the patented solvent in the treatment of pyroxyline; that during the same period, and simultaneously, defendant used other solvents for treating pyroxyline; that, owing to a defect in the pyroxyline, its treatment with the various solvents was unsuccessful, and the resulting product was imperfect, and could not be sold at a profit; that the product of the