§ 807. The Invention, not the Monopoly, Transferred by a

License.

It is a necessary consequence of the indivisibility of the monopoly that nothing less than the conveyance of the entire interest in the invention, or of an undivided part of such entire interest, can operate upon it as a transfer. Though the subordinate rights in the invention are separable and may be aliened at the pleasure of its owner, the monopoly cannot be subdivided to correspond with them and be transferred with them to independent owners. The monopoly remains in him on whom the issue of the letters-patent conferred it, until he transfers to another person all the rights for whose vindication the monopoly was created, or makes that other person a joint-owner with himself. As long, therefore, as any interest resides in him to which the monopoly must attach, the interests which he conveys to others, unless they thereby become jointly interested with himself, are interests in the invention merely, not affecting the monopoly; and however extensive in its terms the instrument transferring them may be, it still leaves the monopoly in him. The only alienation which can carry the monopoly is that of the exclusive right, or of an undivided interest in the exclusive right, to practise the invention, including the exclusive right to make, the exclusive right to use, and the exclusive right to sell the patented invention.2

§ 808. Any Transfer of less than the Entire Interest in the Patented Invention, or an undivided part of such Entire Interest, is a License.

Judged by this test every conveyance which does not transfer the exclusive right, or an undivided interest in the. exclusive right, to practise the invention is a license.1 All

ent, among others, is no evidence of fraud, since all parties are chargeable with notice as to the term of patents, see Pope Mfg. Co. v. Owsley (1886), 27 Fed. Rep. 100; 37 O. G. 781.

That a license taken to avoid a suit is not taken under duress or fraud, see Pope Mfg. Co. v. Owsley (1SSC), 27

Fed. Rep. 100; 37 0. G. 781; McKay v. Jackman (1883), 17 Fed. Rep. 641.

§ 807. 1 See §§ 753-758, and notes, ante, for a more extended discussion of these principles.

2 See § 763 and notes, ante.

§ 808. 1 That any grant which does not convey either an undivided interest

alienations of the right to make, or the right to use, or the right to sell, or of the right to make and use, or of the right to make and use and sell, are merely licenses. All transfers of the exclusive right to use, or of the exclusive right to make and use, or of the exclusive right to use and sell, are also simple licenses.3 Conveyances of the exclusive right to use in a certain manner, or of the exclusive right to make and use and sell in a particular form or for a particular purpose, are only licenses. But an instrument conferring the exclu

or an exclusive local interest, is a mere license, see Nelson v. McMann (1879), 16 Blatch. 139; 4 Bann. & A. 203; 16 O. G. 761.

That any grant less than an exclusive right within a given territory, is a mere license, see Sanford v. Messer (1872), 2 O. G. 470; 5 Fisher, 411; Holmes, 149; Farrington v. Gregory (1870), 4 Fisher, 221; Gayler v. Wilder (1850), 10 How. 477.

2 That the grant of a right to use and sell only, but not to make, is a mere license, see Sanford v. Messer (1872), 2 O. G. 470; 5 Fisher, 411; Holmes, 149.

That a grant "to use and sell" in a given territory is a mere license, see Farrington v. Gregory (1870), 4 Fisher,

221.

That an agreement that the promisee may make and sell in a given territory, is a mere license, see Gayler v. Wilder (1850), 10 How. 477.

That an agreement by the patentee not to sue or disturb one who uses the invention is only a license, not affecting the patent right, see Bull v. Pratt (1815), 1 Conn. 342.

That a conveyance of the power to sell, use, and grant to others the right to use the patented device within certain territory for a certain period, is not a mere power of attorney, but a contract vesting rights in the grantee, see Burdell v. Denig (1875), 92 U. S. 716.

That the contract of a workman to

give his employer the benefit of his inventions is a license, not a grant, see Whiting v. Graves (1878), 13 O. G. 455; 3 Bann. & A. 222.

That an agreement between conflicting patentees for a common use of their patents, and the mutual defence of their rights, is not an assignment, but a mere license to each to use the inventions of the other, see Aultman v. Holley (1873), 5 O. G. 3.

That the conveyance of a right to canvass for and sell the patented article as an agent, conveys no interest in the monopoly, and may be oral, see Springfield v. Drake (1876), 58 N. H. 19.

8 That an exclusive territorial right to use and sell, but not make, is a mere license, see Hill v. Whitcomb (1874), 5 O. G. 430; Holmes, 317; 1 Bann. & A. 34; Sanford v. Messer (1872), 5 Fisher, 411; 2 O. G. 470; Holmes, 149.

That the grant of the sole right to sell the patented article within certain territory does not carry any part of the patent right, but is a mere license, the grantor still owning the entire patent, see Ingalls v. Tice (1882), 14 Fed. Rep. 297; 22 O. G. 2160.

That an irrevocable and exclusive power to act as "sole agent" for making and selling, to retain his commis sion, and pay the balance to the principal, is not an assignment but a mere license, see Kempton v. Bray (1868), 99 Mass. 350.

4 That the grant of an exclusive

sive right to make and sell carries the entire invention, since the exclusive right conferred gives to the alienee complete dominion over the use also, and thus transferring the monopoly becomes either an assignment or a grant.5 These limitations of the interest transferred may appear either in the description of the interest itself, or in the reservation of rights to the alienor, or may be implied from the remaining portions of the contract. The conveyance of the entire interest in the patented invention, reserving to the alienor a right to make it, or a right to sell it, even though not exclusive, vests in the alienee only an independent partial interest and makes him a mere licensee.6 The transfer of the entire in

terest with a reservation of the right to use, however, gives to the alienee an absolute control over the patented invention, because without a making and a selling there can be no use, and hence such a conveyance is regarded as an assignment coupled with a license to the alienor to use the patented invention whenever, through the exercise of his rights by the alienee, the former may be able to procure it. The covenants embraced in the instrument may similarly determine whether the conveyance is an assignment or a license. When they impose such obligations on the parties as can exist only while the monopoly remains in the alienor, the granting clause and the description must be regarded as relating to the invention alone, and the instrument itself construed to be a license. A covenant on the part of the alienor to protect the alienee by prosecuting infringers, for example, indicates that in whatever terms the interest transferred may be described, the prohibitory powers are still in the alienor, that the interest conveyed is, therefore, less than the entire interest or an undivided part thereof, and that the transfer operates only as a license.8

making to the grantor, is only a license, see Hamilton v. Kingsbury (1880), 4 Fed. Rep. 428; 17 Blatch. 460; 17 O. G. 847; 5 Bann. & A. 157; Sanford v. Messer (1872), Holmes, 149; 2 O. G. 470; 5 Fisher, 411.

That a grant reserving to the grantor certain uses of the invention is a mere license, see Ex parte Paine (1878), 13 O. G. 408.

That an assignment of the entire interest in the patent, within a certain territory, but reserving to the assignor the right to sell devices of his own making, is a mere license, see Hussey v. Whitely (1860), 2 Fisher, 120; 1 Bond, 407.

7 That the conveyance of all rights in the invention within certain territory, except the right to use the patented device for a certain specific purpose, is a grant of the invention to the assignee, and a special license back to the assignor, see Littlefield v. Perry (1874), 21 Wall. 205; 7 O. G. 964.

That a patentee who sells all his interest in the patent, reserving a right to certain specified uses of the inven tion, is no longer an owner but a mere licensee under his assignee, see Frankfort Whiskey Process Co. v. Pepper (1885), 26 Fed. Rep. 336.

That a contract for an exclusive right to make, construct, and use in a given State, and to sell to others to be used, but reserving to the grantor the right to sell devices of his own make in the State, though neither an assignment nor a grant, is more than a mere license and is assignable, and vests a fixed right in the purchaser, see Pitts v. Jameson (1853), 15 Barb. 310.

8 That the presence in the instrument of a covenant binding the grantor to protect the grantee by suit, etc., shows that the instrument is a mere license, see Theberath v. Celluloid Mfg. Co. (1880), 5 Bann. & A. 577; 3 Fed. Rep. 143.

§ 809. License may be either Express or Implied: Express

Licenses.

A license may consist in an express agreement between the owner of the patented invention and the licensee, or it may be implied from circumstances. An express license may be oral or in writing, and when in writing it may take any form that can be legally interpreted as a conveyance of those interests which a license is sufficient to transfer.1 Thus, if an instrument attempting to convey the entire interest in the patented invention, or an undivided portion of it, is insufficient for that purpose, it may still be valid as a license.2 A contract for such conveyance, or an agreement to bestow a license, when accepted and acted on by the proposed licensee, has the same effect.3 A compromise of litigated claims in which each party abandons all his rights to interfere with or restrain the other, or one by which the contending parties league together for the common enjoyment and common defence of their respective inventions, are other forms which this mode of conveyance may assume, and which are equally valid with licenses of greater definiteness of expression, provided the intention of the parties to transfer the proper interests can be clearly ascertained.

§ 809. 1 That a license need not be written, see Buss v. Putney (1859), 38 N. H. 44; Potter v. Holland (1858), 4 Blatch. 206; 1 Fisher, 327.

2 That a contract for any part of the patent right may be good as a license, see Gayler v. Wilder (1850), 10 How. 477.

That an optional contract to purchase a patent does not operate as a license to the vendee's licensees to make an infringing article during the option, see Iowa Barb Steel Wire Co. v. Southern Barbed Wire Co. (1887), 30 Fed. Rep. 615; 40 O. G. 578.

3 That an agreement to license, if acted on, becomes an actual license according to the intent of the parties, see Magic Ruffle Co. v. Elm City Co. (1875), 13 Blatch. 151; 2 Bann. & A. 152; 8 O. G. 773.

The scope of an implied

That where the parties to a suit compromise it by an agreement allowing each party to do what he pleased, without regard to their conflicting claims, it is a license, see Troy Iron & Nail Factory v. Corning (1849), 1 Blatch. 467.

That an agreement, in settling a suit, that the defendant has infringed and has paid for it, is no license for the future, see Pickering v. Phillips (1876), 4 Clifford, 383; 2 Bann. & A. 417; 10 O. G. 420.

That where a written license is found in the hands of the licensee, a person who claims that it was delivered as an escrow must prove it, see Mellon v. Delaware, Lackawanna, & Western R. R Co. (1882), 21 O. G. 1616.