the patent receives his compensation through his own use of the article, and neither licenses nor makes for sale to others, is to be arrived at on the ground that satisfaction will be made. If not made, the defendant will not suffer unjustly by having it reckoned as if it would be. It follows, necessarily, that the defendant will be under no liability over to the purchasers after satisfaction, and that nothing should be deducted here on that account." 4 Bann. & A. 445 (451). In Perrigo v. Spaulding (1876), 13 Blatch. 389, Johnson, J.: (391) "It seems to be well established that, when a patentee gets his remuneration by patent or license fees, a recovery of the license or patent fee from an infringer, and its payment, authorizes him to use the particular articles for which such recovery has been had. On the other hand, when a patentee chooses to use his invention himself, and find his remuneration in the sale of the products of its use, and to prevent others from using his invention, it is his right, and then a recovery for profits and damages will be limited to the profits and damages up to the time of the recovery. Such a recovery will not carry with it any right to the further use by the infringer of the invention. (Suffolk Co. v. Hayden, 3 Wall. 315; Spaulding v. Page, 4 Fisher's Pat. Cases, 641, 645, 646.) But where the patentee sells his patented instrument or machine for use by others, finding his remuneration in the profit of the sale of the manufactured machine or instrument, it is obvious that his interest is promoted by increasing the sale and that into his profit enters the value of the patented invention over and above the cost of manufacture and the ordinary fair profit of the manufacture. Even if no patent or license fee is fixed, the value thereof, as a profit, enters into the selling price, and, if not capable of exact ascertainment, may, nevertheless be approximated to by estimation, when necessary. When the pat. entee sells, he receives this profit, and thus obtains full compensation for the article sold and for the right to use it while it lasts. When, for an infringement, he obtains both the profits and damages, he will be presumed to have obtained a full compensation for all the injury he has sustained, and to be placed in as good a position as if he had made and sold the article himself. Such is, I think, the presumption between parties thus situated, and if any different rule is sought to be applied in any particular case, it should appear that a recovery has not been sought or obtained for the whole gains of the manufacture as well as for all the damages sustained. (Spaulding v. Page, before cited; The Gilbert & Barker Manufacturing Co. v. Bussing, 12 Blatchf. C. C. R. 426.) When a patentee manufactures and sells his patented article for use, the right to use passes by the sale. If an infringer manufactures and sells, he must account for and pay the profits, which are to be calculated upon the principle that the gain by the appropriation of the patentee's invention is their measure. If there are damages sustained and proved by the plaintiff, beyond the profits made by the infringer, these also may be recovered. But, when a full recovery and satisfaction from one party has been had, the patentee has obtained all that the law gives him, and the particular article or machine, if it be a machine, becomes, in effect, licensed by the patentee, and may be used so long as it lasts, free from any further claim by the paten tee." 2 Bann. & A. 348 (350); 12 O. G. 352 (353). In Spaulding v. Page (1871), 4 Fish his recovery of damages is a mere recompense for injuries inflicted by the infringer upon his exclusive use. The payment of such damages is not the payment of a license-fee, nor of the profit on the article unlawfully sold. It leaves the article still under the monopoly, and any future use will be as truly an infringement as the past has been.2 From the er, 641, Sawyer, J.: (649) "Where a patentee does not use the patented machine himself, nor establish a patent fee, but manufactures the patented article, and sells at fixed prices, seeking his compensation in the profits of the manufacture and sale at such fixed prices, and another party infringes the patent by making and selling the patented article, and where the patentee sues the party so infringing, and claims to recover, and does recover, the full amount of profits which he himself would have obtained on said articles had he manufactured and sold them at his ordinary prices, by such claim and recovery he adopts the sale made by the party infringing, and the right to use the specific articles so sold, and for which the recovery has been had, vests in the purchaser." 1 Sawyer, 702 (709). See also Steam Stone Cutter Co. v. Sheldons (1884), 21 Fed. Rep. 875; 22 Blatch. 484; Booth v. Seevers (1881), 19 O. G. 1140; Gilbert & Barker Mfg. Co. v. Bussing (1875), 12 Blatch. 426; 1 Bann. & A. 621; 8 O. G. 144. That a conversion ratified may be regarded as a sale for purposes of royalty, see Wilder v. Adams (1860), 16 Gray, 478. That a mere judgment against an infringing seller, without satisfaction does not confer an implied license on the purchaser, see Tuttle v. Matthews (1886), 28 Fed. Rep. 98; 36 O. G. 694; Fisher v. Consolidated Amador Mine (1885), 25 Fed. Rep. 201; 11 Sawyer, 190; Birdsell v. Shaliol (1884), 112 U. S. 485; 30 O. G. 261; Gilbert & Barker Mfg. Co. v. Bussing (1875), 8 O. G. 144; 12 Blatch. 426; 1 Bann. & A. 621. That when the judgment against an infringing seller is satisfied, the buyer has an implied license to use, see Steam Stone Cutter Co. v. Sheldon (1884), 22 Blatch. 484; 21 Fed. Rep. 875; Gilbert & Barker Mfg. Co. v. Bussing (1875), 8 O. G. 144; 12 Blatch. 426; 1 Bann. & A. 621. That where a sale by an infringing vendor is ratified by his agreement with the patentee, the purchaser has an implied license to use and sell the device, see Alabastine Co. v. Richardson (1886), 26 Fed. Rep. 620; 35 O. G. 1225. That the settlement of the vendor with the patentee for past infringements does not protect vendees subsequently purchasing, see Matthews v. Spangenberg (1882), 23 O. G. 92; 20 Blatch. 482; 19 Fed. Rep. 823. That on an agreement to pay royalties on each article made by the licensee, royalties are due on articles made by infringers of the licensee's rights if he has received payment for the future use of such articles from the infringing makers, as if he himself had made them, see Porter v. Standard Measuring Mach. Co. (1886), 142 Mass. 191. 2 See citation from Perrigo v. Spaulding (1876), 13 Blatch. 389, in note 1, ante. That where no satisfaction has been made to the patentee, the purchaser from an infringing maker can be enjoined, for he cannot use the device without the consent of the patentee, see Gilbert & Barker Mfg. Co. v. Buss recovery and payment of mere nominal damages, in either case, no license is implied.3 § 831. Implied License: License to Use Implied from Permission to Make before an Application for a Patent. Another case in which a license is implied from the dealings of the parties with each other arises when, before his application for a patent, the inventor sells the article which is to be protected by the patent, or knowingly permits another to construct it, without a contract limiting the extent or method of its use. The purchaser or maker in this case obtains the right, by implication, to use or sell the specific article after the patent has been granted, with the same freedom from restrictions as if he had bought it from the patentee during the existence of the patent.1 § 832. Implied License: License to Use Inventions of Workmen Sometimes Implied in favor of Employer. The principal case in which a license is implied from the relations of the parties occurs where an employee, during the period of his employment, makes an invention in the line of his employer's business. An employer, simply as such, has ing (1875), 8 O. G. 144; 12 Blatch. also to his vendees, as to all existing 426; 1 Bann. & A. 621. 8 In Blake v. Greenwood Cemetery (1883), 16 Fed. Rep. 676, Benedict, J.: (677) "In this action the validity of the plaintiff's patent is not disputed, nor is it denied that the machine used by the defendant infringes upon that patent. But it is contended by the defendant that the recovery by the plaintiff of the sum of one dollar in the former suit, and the tender of that sum to him by the maker of the machine, is a bar to any recovery in this action against the user of the machine. To sustain this plea would be to hold that a decree for nominal damages recovered by a patentee against the manu. facturer of infringing machines operates as a license to the manufacturer, and infringing machines made by such manufacturer. The law is not so understood. The infringement by the manufacturer and the infringement by the user of an infringing machine, are separate tres. passes, and judgment because of one is no bar to an action for the other. To create a bar there must be satisfaction, and nominal damages is not satisfaction." 25 O. G. 89 (90); 21 Blatch. 222 (223). § 831. See Sec. 4899, Rev. Stat. That under this act a person making or buying an invention, before the application for a patent, has a right to use or sell only that specific thing, see Brickill v. City of New York (1879), 18 O. G. 463; 18 Blatch. 273; 5 Bann. & A. 544; 7 Fed. Rep. 479. no right to the inventions of his employee. If he contracts for his employee's inventive skill, and pays him for its exercise in his behalf, he may thereby become the equitable owner of the inventions which result, and be entitled to an assignment of the patents when they are obtained.2 If their agreement is that the employer shall have the benefit, or the exclusive benefit, of the inventions of the employee, this is an express license to the employer to practise the inventions, but leaves their ownership in the inventor. But where, without any express agreement to that effect, an employee uses the time and tools of the employer in making an invention, and then applies it practically in the employer's business, the law implies a license to the employer to continue his enjoyment of the invention, even after the relations between himself and the inventor have been dissolved. § 832. 1 That an employer, as such, has no right to the inventions of his employee, see Hall v. Johnson (1883), 23 O. G. 2411; Hapgood v. Hewitt (1882), 11 Bissell, 184; 11 Fed. Rep. 422; 21 O. G. 1786; Damon v. Eastwick (1882), 14 Fed. Rep. 40; 22 O. G. 1709; Whiting v. Graves (1878), 13 O. G. 455; 3 Bann. & A. 222; and § 414, and notes, ante. 2 That an employer may become the equitable owner of his employee's inventions through a definite prior contract between them, see Joliet Mfg. Co. v. Dice (1883), 105 Ill. 649; Continental Windmill Co. v. Empire Windmill Co. (1871), 8 Blatch. 295; 4 Fisher, 428; Appleton v. Bacon (1862), 2 Black, 699; and § 414 and notes, ante. That where an employee assigned his invention to his employer, who patented it, and under it the employee made devices for his employer as and for the one patented, he cannot claim after leaving the employ that such devices were not the ones patented, and if he makes them himself he is an infringer, see Time Telegraph Co. v. Himmer (1884), 19 Fed. Rep. 322; 26 O. G. 826; 22 Blatch. 34. The duration of 8 That a contract for the exclusive right to an employee's inventive skill for a specific period carries the exclusive license to use all inventions made during that period, under all patents and extensions, and also a license to use all inventions previously patented, but first made available during that period, see Wilkens v. Spafford (1878), 3 Bann. & A. 274; 13 O. G. 675. 4 In Wade v. Metcalf (1883), 16 Fed. Rep. 130, Lowell, J.: (131) "This section of the statute, which first appeared in the law of 1839, § 7 (5 St. 354), has been usually applied to the case of employer and workman. If the workman, by using the tools and time and money of his employer with his consent, makes an invention and applies it in his employer's business, the employer may continue to use it. If the improvement is a process, it has been held that the employer may continue to practise the process for the whole period of the patent. McClurg v. Kingsland, 1 How. 202; Chabot v. American Button-hole, &c., Co., 6 Fisher, 71. But if the invention pertains to a machine, it is understood that only the specific machine or machines which have been so his license in such cases depends upon the nature of the invention. If it is an art he may practise it until the origi made are licensed. Pierson v. Eagle Screw Co., 3 Story, 402; Brickill v. Mayor, &c., of New York, 7 Fed. Rep. 479." Further, that where a workman makes an invention at the expense of his employer, and applies the invention practically in the employer's business, the employer has an implied license to use it after the relation ceases, see Jencks v. Langdon Mills (1886), 27 Fed. Rep. 622; 36 O. G. 347; Bensley v. Northwestern Horse Nail Co. (1886), 26 Fed. Rep. 250; 36 O. G. 689; Barry v. Crane Bros. Mfg. Co. (1884), 22 Fed. Rep. 396; Slemmer's Appeal (1868), 58 Pa. St. 155. That an employer, merely as such, has no right in the inventions of his employee, unless it be a naked license to use or sell the invention in his ordinary business, see Hapgood v. Hewitt (1882), 21 O. G. 1786; 11 Fed. Rep. 422; 11 Bissell, 184. That where an inventor, using the tools and time of his employer, makes an invention under an agreement that the employer should have his invention for a certain sum, and uses it in the employer's business, the invention belongs to the employer as against subsequent assignees of the inventor, or at least the employer has an implied license to use it, see Continental Windmill Co. v. Empire Windmill Co. (1871), 8 Blatch. 295; 4 Fisher, 428. That where an employee incorporates his inventions into machines belonging to his employers, it gives the employers an implied license to use the inventions in such machines after the employment ceases, see Chabot v. American Buttonhole and Overseaming Co. (1872), 6 Fisher, 71. That where an employee makes his experiments at the expense and in the factory of his employer, and has his wages increased as a result of his success, and having perfected his invention permits the employer to use it without claiming any pay, this operates as an implied license to the employer to continue its use, see McClurg v. Kingsland (1843), 1 How. 202; 2 Robb, 105. That where an employee is hired to invent, and does so, and puts his invention into use in his employer's business, the latter has a right to use the particular device till it is worn out, but acquires no rights in the patent itself, see Whiting v. Graves (1878), 3 Bann. & A. 222; 13 O. G. 455. That where an employee constructs his invention for the use of his employer, and uses it until he applies for a patent, the employer has a right to use it until it is worn out, see Magoun v. New England Glass Co. (1877), 3 Bann. & A. 114; 14 O. G. 1. That an inventor and employee, having supervised and directed the building of his machine for his employer, a license in favor of the latter to use it as long as it lasts is implied, see American Tube Works v. Bridgewater Iron Co. (1886), 26 Fed. Rep. 334; 34 O. G. 1047. That if an employee puts his invention into his employer's use without the consent of the employer and without any agreement for compensation, and the invention develops in the employer's use into a practical condition at his expense, he has an implied gra tuitous license to use it as long as it lasts, see Barry v. Crane Bros. Mfg. Co. (1884), 22 Fed. Rep. 396. That use by an inventor in his employer's business of a new design, without express contract, gives the employer an implied license to continue the use |