§ 199. The relations of the patentee and the licensee, with regard to the validity and extent of the patent, must depend on the terms of the license. The taking of a naked license or permission to work under a patent, does not, without some recitals or covenants amounting to an admission, estop the licensee from denying the validity of the patent, or the fact of infringement, if he is subsequently proceeded against. It is necessary to look into the instrument, and to ascertain license to Brown, (assuming it to be capable of assignment,) is to him and to his assigns, to employ six persons. Whoever is employed is to be employed by Brown and his assigns. It would seem to be a reasonable interpretation of this language to say, that all of these persons should be employed by one and the same party, either all by Brown, or all by his assigns. But the sub-agreement with Brooks conveys to him one right in severalty, embracing one person; that is, (as I understand it,) the right to employ one person in the manufacture of the matches. So that, if this agreement be valid, then the original privilege or license, granted by the patentee to Brown upon this construction, includes six distinct and independent rights, each of which may be granted to a different person in severalty. Now I must confess, that such a construction is open to all the objections stated at the bar. It exposes the patentee to the competition of six different distinct persons, acting in severalty, and independently of each other. It may make an essential difference to the patentee in his own sales, whether the whole of the right or privilege granted to Brown be in the possession of one or more persons, having a joint interest, and of several persons, each having a separate and independent interest. The danger, too, to the patentee, of an abuse or excess of the right or privilege granted by him, is materially enhanced by the circumstance, that each of the subholders may be acting at different places, at the same time, and the nature and extent of their claim and use of the right or privilege may be difficult for him to ascertain, and leave him without any adequate remedy for any such excess or abuse of it. The language ought, in my judgment, to be exceedingly clear, that should lead a court to construe an instrument of this sort, granting a single right or privilege to a particular person or his assigns, as also granting a right or license to split up the same right into fragments among many persons in severalty, and thus to make it apportionable as well as transmissible. The patentee might well agree to convey a single right as an entirety to one person, to manufacture the matches and employ a fixed number of persons under him, when he might be wholly opposed to apportioning the same right in severalty among many persons." what recitals and covenants will deprive a licensee of the defence to which all other persons may resort. If, by his agreement, the licensee has admitted that the process or thing which he uses is the patented process or thing, and he is afterwards proceeded against for not complying with the terms of his agreement, it seems that he will not be at liberty to show, that he did not use the patented thing or process.1 So, too, if the deed contain recitals or statements amounting to an admission of the validity of the patent, either as to the novelty or utility of the supposed invention, or the sufficiency of the specification, the licensee will be estopped, in an action of covenant for the rent or license dues, to deny the validity of the patent, by setting up any thing contrary to the admissions in his deed.2 In like manner, it has been held that a licensee, who has paid an annuity in consideration of a license to use a patent privilege, which he has had the benefit of, but which afterwards turns out to be void, cannot recover back the money he has paid, in an action for money had and received. This is upon the ground that the licensee has had the benefit of what he stipulated for; but, if the patent turns out to be invalid, before a payment becomes due, and the license deed contains no admission of its validity, the licensee may plead the fact in answer to an action of covenant for money reserved by the license.1 1 Baird v. Neilson, 8 Cl. & Fin. 726. 2 Bowman v. Taylor, 2 Ad. & E. 278. But if the patentee join issue upon an allegation made by a licensee contrary to an admission in his deed, instead of pleading the estoppel, the deed will be evidence for the patentee, but will not as evidence be conclusive. Bowman v. Rostrom, 2 Ad. & E. 295. 3 Taylor v. Hare, 1 N. R. 260. 4 Hayne v. Maltby, 3 T. R. 438. This case was thus explained by Lord Cottenham, C., in Neilson v. Fothergill, Webs. Pat. Cas. 290. "The case of Hayne v. Maltby appears to me to come to this, that, although a party has dealt with the patentee and has carried on business, yet that he may stop, and then the party who claims to be patentee cannot recover, without giving the other party the opportunity of disputing his right, and that, if the defendant successfully dispute his right, that, notwithstanding he has been dealing under a contract, it is competent to the defendant so to do. That is $200. And where there has been no enjoyment by the licensee, who, in an agreement not under seal, has stipulated to pay a certain sum for the right to use a patent privilege, the invalidity of the patent will be a good plea in bar to an action upon the agreement, on the ground of failure of consideration. The competency of a licensee to dispute the validity of a patent, is a question which may also arise, where the licensee is proceeded against for an infringement, on the ground that he is using the patent contrary to the conditions in his license. If, for instance, a party receives a license to use a patented machine, on condition that he pay a stipulated sum on all the articles which he may manufacture by means of the machine, and, after having been put in possession of the machine, he uses it, but refuses to pay the rent or license dues, or to comply with any other condition, he may be enjoined in equity for an infringement. The sole right which such a party can have to use the machine depends on the license; and he can use under the license only by complying with the conditions; so that his use aside from the license is an infringement.2 If, in such a case, the licensee refuses to pay under the license, or sets up, as a reason for not performing any of his covenants, that the patentee has not complied with the terms of the contract on his part, will the licensee be permitted to question the validity of the patent, in any proceeding either at law or in equity, for using the patent without right? This must depend, in the first place, upon the admissions in the license deed. If the deed. exactly coming to the point which I put, whether, at law, the party was estopped from disputing the patentee's right, after having once dealt with him as the proprietor of that right; and it appears from the authority of that case, and from the other cases, that, from the time of the last payment, if the manufacturer can successfully resist the patent-right of the party claiming the rent, that he may do so in answer to an action for the rent for the use of the patent during that year." 1 Chanter v. Leese, 4 M. & W. 295, affirmed in error, 5 M. & W. 698. 2 Brooks v. Stolley, 1 M'Lean's R. 523; Neilson v. Fothergill, Webs. Pat. Cas. 287, 290. contains no admission of the plaintiff's title, then the licensee will not be estopped from denying it; but, if it contains such admissions, and, à fortiori, if, after such admissions, the licensee has worked under the license, and has paid the license dues before his refusal, or, if he still continues to claim under the deed, and excuses his non-payment by reason of the non-performance of some covenant on the part of the patentee, he will be estopped from denying the validity of the patent, and the sole question will be, whether he is liable for an infringement; which will depend upon the validity of his excuse for not paying, on account of the non-performance by the patentee.1 But, in the second place, if the licensee repudiates the contract altogether, and stands upon the right of every man to use the alleged invention because it is not new, or because the patent is void for some other reason, he foregoes all benefit of the license as a permission to use the invention, and becomes a trespasser. In that event, I conceive that his solemn admission, under hand and seal, of the validity of the patent, may still be used against him as an estoppel, both in an action and under a bill in equity for the infringement, unless he can show that he was deceived and misled; otherwise, a party might obtain possession of the invention, under a license, and then repudiate the contract at his pleasure. 1 In equity, no alleged failure on the part of the patentee, under the contract of license, will authorize the use, unless the licensee does every thing in his power to perform the contract. Brooks v. Stolley, ut supra. If the license is granted on condition of a weekly payment, the payment must be made weekly, or the licensee may be enjoined for infringing. Ibid. |