future, the notice, in terms, imposes various restrictions as to title and as to the "use" of the machines by plaintiff's agents, wholesale and retail, and by the "unlicensed members of the public," for itself, the plaintiff makes sure, that the future shall have no risks, for it requires that all that it asks or expects at any time to receive for each machine must be paid in full before it parts with the possession of it.

Second, while in terms the "use" of each machine is restricted and forfeiture for failure to strictly comply with the many conditions and requirements of the notice is provided for, this system, elaborate to the extent of confusion, fails utterly to provide for entering any evidence of a qualified title in any public office or in any public record, and no requirement is found in it for reporting by users or licensees, who may remove from one place to another taking the machine with them, as would very certainly be required if the plaintiff intended to enforce the rights so elaborately asserted in this notice; if the system were really a genuine provision designed to protect through many years to come the restricted right to "use" and the seemingly qualified title which it purports to grant to dealers and to the public, from being exceeded or departed from.

Third. The fact that under this system "at different times" "large numbers" of machines, as is alleged in the plaintiff's bill, have been "covertly" sold to the defendants by the plaintiff's wholesale and retail agents at less than the price fixed for them, is persuasive evidence that the transaction is not what it purports on its face to be. If it were a reasonably guarded plan, really intended to keep the plaintiff in touch with each of its machines until the expiration of the patent of latest date, for the purpose of insisting upon its being used in the manner provided for in the "license notice" the plaintiff's prompt and sufficient remedy for such an invasion of its right as is claimed in this case would be found in its sales department or rather in its "license" department, and not in the courts. That the plaintiff comes into court with a bill to enjoin the defendants from reselling machines secretly sold to them in large numbers by the plaintiff's agents indicates very clearly that at least until the exigency out of which this case grew, arose, the scheme was regarded by the plaintiff itself and by its agents simply as one for maintaining prices by holding a patent infringement suit in terrorem over the ignorant and the timid.

And finally, while the notice permits the use of the machines, which have been fully paid for, by the "unlicensed members of the general public," significantly called in the bill "the ultimate users," until "the expiration of the patent having the longest term to run " (which, under the copy of the notice set out in the bill, would be

July 22d, 1930) it provides that if the licensee shall not have failed to observe the conditions of the license, and the Victor Company shall not have previously taken possession of the machine, as in the notice provided, then, perhaps sixteen years or more after he has paid for it and in all probability long after it has been worn out or become obsolete and worthless "it shall become the property of the licensee."

It thus becomes clear that this "license notice" is not intended as a security for any further payment upon the machine, for the full price, called a "royalty," was paid before the plaintiff parted with the possession of it; that it is not to be used as a basis for tracing and keeping the plaintiff informed as to the condition or use of the machine, for no report of any character is required from the "ultimate user" after he has paid the stipulated price; that, notwithstanding its apparently studied avoidance of the use of the word "sale" and its frequent reference to the word "use," the most obvious requirements for securing a bona fide enforcement of the restrictions of the notice as to use are omitted; and that, even by its own terms, the title to the machines ultimately vests in the "ultimate users," without further payment or action on their part, except patiently waiting for patents to expire on inventions, which, so far as this notice shows, may or may not be incorporated in the machine. There remains for this "license notice" so far as we can discover, the function only, of fixing and maintaining the price of plaintiff's machines to its agents and to the public, and this we cannot doubt is the purpose for which it really was designed.

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Courts would be perversely blind if they failed to look through such an attempt as this "license notice" thus plainly is to sell property for a full price, and yet to place restraints upon its further alienation, such as have been hateful to the law from Lord Coke's day to ours, because obnoxious to the public interest. The scheme of distribution is not a system designed to secure to the plaintiff and to the public a reasonable use of its machines, within the grant of the patent laws, but is in substance and in fact a mere price-fixing enterprise, which, if given effect, would work great and widespread injustice to innocent purchasers, for it must be recognized that not one purchaser in many would read such a notice, and that not one in a much greater number, if he did read it, could understand its involved and intricate phraseology, which bears many evidences of being framed to conceal rather than to make clear its real meaning and purpose. It would be a perversion of terms to call the transaction intended to be embodied in this system of marketing plaintiff's machines a "license to use the invention." (Bauer v. O'Donnell, C. D., 1913, 533; 191 O. G., 1068; 229 U. S., 1.)

Convinced as we are that the purpose and effect of this "license notice" of plaintiff, considered as a part of its scheme for marketing its product, is not to secure to the plaintiff any use of its machines, and as is contemplated by the patent statutes, but that its real and poorly-concealed purpose is to restrict the price of them, after the plaintiff had been paid for them and after they have passed into the possession of dealers and of the public, we conclude that it falls within the principles of Adams v. Burke (1 0. G., 282; 17 Wall., 453, 456) and of Bauer v. O'Donnell, (C. D., 1913, 533; 191 O. G., 1068; 229 U. S., 1;) that it is, therefore, invalid, and that the district court properly held that the bill must fail for want of equity. It results that the decree of the circuit court of appeals will be reversed and that of the district court affirmed.

Reversed.

[Supreme Court of the United States.]

EWING, COMMISSIONER OF PATENTS, V. THE UNITED STATES, ex rel. THE FOWLER CAR COMPANY.

Decided May 7, 1917.

238 O. G., 983; 244 U. S., 1.

1. PATENTS-INTERFERENCE-DETERMINATION OF THE EXISTENCE OF WITHIN THE DISCRETION OF THE COMMISSIONER OF PATENTS.

Section 4904 "commits to the opinion (judgment) of the Commissioner the effect of an application upon a pending one-whether it will interfere with a pending one; something more, therefore, than the fact of two applications, something more than the mere assertion of a claim. The assertion must be, in the opinion of the Commissioner, an interference with another. And it is this other that is first in regard, not to be questioned except at the instance of the Commissioner by an exercise of judgment upon the circumstances."

2. SAME-SAME-SAME-MANDAMUS WILL NOT LIE TO CONTROL.

Where it appears that an applicant for patent did not conceive the invention until after another application disclosing the same invention was filed, Held that there was no question of priority to be determined and that mandamus will not lie to compel the Commissioner of Patents to declare an interference.

ON WRIT of certiorari to the Court of Appeals of the District of Columbia.

The Solicitor-General, with whom Mr. Assistant Attorney-General Warren and Mr. Robert F. Whitehead were on the brief, for the petitioner.

Mr. George L. Wilkinson, with whom Mr. Melville Church was on the brief, for the respondent.

STATEMENT OF THE CASE.

This writ is directed to a judgment of the Court of Appeals of the District of Columbia which affirmed a judgment of the Supreme Court of the District of Columbia in mandamus commanding the Commissioner of Patents—

to declare or direct to be declared an interference between the application of William E. Fowler, filed May 22, 1915, for improvements in car floor construction and the application for a similar invention—

of an unnamed applicant

pursuant to the statute and rules in such cases made and provided.

The judgment was rendered upon motion of petitioner's attorney upon the petition, rule to show cause, and answer. It was affirmed by the court of appeals. (C. D., 1916, 169; 226 O. G., 700; 45 App. D. C., 185.)

As The Fowler Car Company and Ewing, Commissioner of Patents, were petitioner and respondent, respectively, in the court below, we shall so designate them here.

The facts as stated by the petition are as follows:

William E. Fowler, Sr., was the first and original inventor of certain new and useful improvements in car-floor construction.

On May 22, 1915, he applied for a patent in the usual form and manner and his application was accepted and became known and designated as application Serial No. 29,794.

On May 19, 1915, he duly assigned his right, title, and interest in the invention to The Fowler Car Company, which company appointed Charles C. Linthicum its attorney.

On November 18, 1915, the Commissioner of Patents wrote to Linthicum stating that-

there is another application pending, claiming substantially the same invention as that defined

in certain of the claims which were set out. He further stated:

In order to determine whether it is necessary to declare an interference you are requested to obtain a statement from Fowler setting forth when he conceived the invention defined in the above quoted claims, when he disclosed it to others, and when he reduced it to practice. This statement will not be made a part of the record and will be returned to you.

Fowler replied that he had conceived the subject-matter of the claim quoted in the Commissioner's letter on or about April 16, 1915, disclosed the same to others and made drawings on or about the same date but had not reduced the same to practice by constructing any full-sized devices.

On November 26, 1915, Linthicum filed an amendment to Fowler's application in which all of the claims suggested by the Commissioner were inserted. Of these claims Linthicum said:

It is thought that these claims appear in a co-pending application and they are inserted at this time with the request that, if such claims do appear in a co-pending application an interference be declared.

To this communication the Commissioner replied as follows:

SIR: Inclosed please find the statement of William E. Fowler, Sr., made in response to the request in my letter of November 18, 1915.

The dates of invention claimed by Fowler are subsequent by several months to the filing date of the application of the other party. The other party's case will be passed to issue as soon as possible and when patented will be cited as a reference against such claims in Fowler's application as it may be found to anticipate. An interference will not be declared.

Section 483, Revised Statutes, provides:

The Commissioner of Patents, subject to the approval of the Secretary of the Interior, may, from time to time, establish regulations, not inconsistent with law, for the conduct of proceedings in the Patent Office.

Pursuant to this authority regulations known as "Rules of Practice in the United States Patent Office" have been established by the Commissioner by and with the approval of the Secretary of the Interior and now govern the declaration of interferences between pending conflicting applications and have the force and effect of law, binding as well upon the Commissioner as upon the applicant for patents.

It is further alleged that it clearly appears from the correspondence recited and under the statute and rules that an interference exists between the Fowler application and that of the applicant unknown to petitioner, which applications disclose and claim the same patentable invention and it is the duty of the Commissioner to declare an interference and to call upon each applicant for the sworn preliminary statement required by Rule 110.

That if the unknown applicant receive a patent and thereafter petitioner's (Fowler's) application is put in interference with it and petitioner afterward be awarded priority over the unknown applicant and receive a patent, in order to get rid of the menace of the outstanding patent to such unknown applicant petitioner will have to file a bill in equity under the provisions of section 4918, Revised Statutes, for the cancelation of such patent or the owner of the outstanding patent may file such bill against petitioner, all of which possibility of litigation may be prevented if the Commissioner be required to discharge his plain duty under the statute and rules and declare an interference when the rights of both parties are in the application stage and before either party receives a patent.