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case proceeded upon the theory that the act relating to patents permitted the holder of the patent to license the use of the patented article upon such terms as he saw fit, and if the conditions and stipulations which he imposed were not lived up to, then the license failed and there was a user without license,—that is to say, an infringement. This line of reasoning the Motion Picture Patents case denies. It declares that the holder of the patent may license the use of the article or not, as he pleases, but that the act gives him no authority to license subject to the condition or stipulations in question which if not adhered to, will cause the user to be an infringement.
The Dick case and the Motion Picture case have to do only with a construction of the patent act; but behind the decision in the Motion Picture case is the intimation that the arrangement there attempted is so far contrary to the public interest that the patent act should not be construed to permit it. Suppose, then, that instead of seeking relief for an infringement, the complainants in the Dick case and the Motion Picture case sought damages for the breach of a contract on the part of the licensee to use only such accessories with the patented article as were furnished by the licensors. Is it a defense to such a suit that the contract is illegal?
The reasoning of the court in the Dr. Miles Medical case has nothing to do with this problem. The result of the Dr. Miles case went upon the illegality of a restraint or forfeiture on alienation which was attempted to be imposed, and the fact that there was in effect a combination of retailers under contract with each other to fix the price of a commodity. Neither line of reasoning touches the contract by a purchaser to use only certain accessories with the article purchased. If such contracts are illegal between the parties, it must be on some ground not articulated or applied in the Dr. Miles case. What can it be?
Suppose A has a mule, can he sell him to B subject to the covenant by B to curry him only with such combs as are furnished by A? Why not? A does not have to sell. Can he not, as one of the terms of the selling, require the purchaser to buy something else? What is the objection to limiting what B must also buy to an article used in connection with the chattel sold? The courts have not been troubled with such a case because trading in mules is carried on in such a way as to make stipulations of the sort suggested impracticable. Such conditions and stipulations can only be exacted where the article sold is of special and peculiar value-as is more frequently the case with patented articles. Suppose, then, that A had a valuable collection of paintings: could he sell each article with the stipulation that the purchaser should use only such cleaning and preserving preparations for the picture as were sold by A? Why not? The only difference in the cases is that now A is in a strong enough position in the market to exact the stipulation.
Where A has a patented article the situation is precisely the same. The patent laws, by giving him the right to prevent anyone else from making the patented article, place A in the unique position of being able to control absolutely the sale of an article of special and peculiar value. He can sell it or not as he pleases. He can prevent anyone else from selling it. Having such an article, A bargains for the sale or license of it as he would any other piece of personal property. Is he, then, debarred from selling it on the best terms possible? Is he barred from saying, “I will not sell unless the purchaser buys something else with it which is not patented"? Is he forbidden to make a bargain that unpatented accessories which are used in connection with the patented article shall be only those made and sold by the licensor or holder of the patent? How can there be any other answers to these questions than an emphatic negative? When A has goods to sell, is it not in the public interest that he should get as much for them as possible? Is he not free to make the best terms possible? If he can require the purchaser to buy other goods, and thus secure a market for the sale of such other goods, in competition with other parties, is not that his privilege? Since when has it been true that this time honored method of trading has become illegal? If such terms are legal, is it not equally legal for the purchaser to require that unpatented accessories used with a patented article sold shall be purchased from the seller? Are the rights of a patentee in this respect less than the rights of the owner of a mule or a picture?
If the stipulation in question makes a legal and enforceable contract at law, then the question arises whether equity will give specific performance of it as between the original parties and as against third parties who take the patented article with notice. This depends upon whether the remedy at law is inadequate. Suppose it is. Suppose, also, the fact that the restrictive covenant is connected with the sale or license of a chattel is no objection to the specific enforcement of the convenant against third parties taking the chattel with notice.15 Is there any defense to an action of specific performance that the contract, while not illegal in law, is so far unfair, unconscionable or contrary to the interests of the public that equity
15 Abergarw Brwg. Co. v. Holmes, L. R. (1900) 1 Ch. 188; Francisco v. Smith, 143 N. Y. 488 (1894); Standard Co. v. Methodist Co., 33 App. Div. (N.Y.) 409 (1898); Murphy v. Christian Press Assn., 38 App. Div. (N. Y.) 426 (1899); New York Co. v. Hamilton Co., 83 Hun. (N. Y.) 593 (1895); 28 App. Div. (N.Y.) 411 (1898).
should not give specific performance? Such a defense might exist, especially where the contract was supplementary to a combination occupying a preponderant position in the business, and part of a system of contracts used for the purpose of compelling others to come into the combination or be excluded entirely from the business. It is submitted, however, that no such defense to specific performance existed in the Dick case or the Motion Picture case.
If, then, the condition or stipulation entered into by the licensee or purchaser of a patented article, that he will not use the same except with unpatented accessories furnished by the licensor or seller is not illegal,--and if it is specifically enforceable in equity as between the parties and as against third parties taking with notice,what possible objection is there to permitting a construction of the patent act which would permit the holder of a patent to make a license or sale of a patented article subject to the condition or stipulation that it be used only in connection with certain unpatented accessories sold by the licensor, with the result that upon a breach of the stipulation or condition the continued user of the patented article would become an infringement? Perhaps this: That so long as the stipulation is justified under the patent act it confers an absolute statutory right in equity to obtain specific performance in the guise of enjoying an infringement. On the other hand, so long as it is merely a contract of which equity gives specific performance under certain terms and conditions, its enforcement by injunction may be so far limited and controlled that the results will not be unconscionable as between the parties or contrary to the interests of the public. In short, a stipulation which requires specific performance as a matter of right might be regarded as contrary to public policy, when a stipulation which was valid at law between the parties and the specific performance of which was in the control and discretion of a court of equity, might be regarded as valid.
III What has been said by way of objection to the Dr. Miles case and the Motion Picture Patents case has been based upon
the assumption that there was no objection to a court of equity giving specific performance of restrictions as to the use of chattels even against third parties taking the chattels with notice of the restrictions. This proposition, however, may be open to question. It is only recently that courts have been called upon to give specific performance in such cases.
While the justice of so doing in particular instances may be apparent, the courts must face the fact that they are opening up a wide field for the creation of what are in effect property interest
servitudes in chattels. When the covenantee or promisee can say to the buyer of a chattel, “You cannot use what you have bought unless you do so in the following manner," or, “You cannot sell it unless at a certain price," and if this position on the part of the seller can be enforced specifically against any holder of the chattel taking with notice, a servitude has been created in the chattel in favor of the promisee and perhaps in favor of whoever is running the business of the promisee. It may be that the Dr. Miles case and the Motion Picture Patents case both indicate a reaction against permitting the specific performance of restrictions as to chattels against third parties with notice. Perhaps the undesirable features of having vast numbers of chattels in commerce subject to all manner of property servitudes has been borne in upon the Supreme Court of the United States. Perhaps a general dislike for such servitudes may have been translated by the Court into what appears to the casual reader of the opinions to be a condemnation of the particular restrictions involved.
The following discriminations are suggested:
1. Stipulations and conditions requiring the buyer of a chattel to keep up the price on re-sale, or to buy or use other articles in connection with those sold, are valid between the parties and may be enforced in suits at law for damages.
2. When the articles sold are patented or copyrighted, the license to use them cannot be made subject to such conditions and stipulations so that the failure to observe them will give rise to the statutory action in equity for an infringement.
3. Such restrictive contracts may be specifically enforceable in equity as between the parties.
4. Whether specific performance will be given to the promisee against third parties taking the chattel with notice of the restrictions may be open to debate. Specific performance should not, however, be refused because the contract is illegal as between the parties. It should not be refused because there is anything inimical to the interests of the public in such restrictions as were involved in the Dr. Miles and Motion Picture Patents cases. It is entirely conceivable, however, that some restrictions might be of such a character that while they were valid at law or even in equity, as between the parties, it would be proper, in the interests of the public, to refuse enforcement of them against third parties, even with notice. If specific performance against third parties is refused in the case of restrictions such as were involved in the Dr. Miles and Motion Picture Patents cases, it should be on the ground that it is against public policy that any servitudes be created in chattels by the specific performance in equity of restrictions against third parties with notice.
John G. Johnson: A Great American
BY HAMPTON L. CARSON?
John Graver Johnson was a native Philadelphian. The date of his birth, as stated in his will, was the 4th of April, 1841. His grandfather was the village butcher at Chestnut Hill, a sturdy and highly respected old man of the type of an English yeoman. His father was a blacksmith, whose busy shop stood by the roadside near the junction of Germantown and Highland Avenues. His mother, Elizabeth Graver, daughter of John Graver, a farmer, was a very remarkable woman, with handsome features and great charm of manner. She had been a school teacher of unusual influence with her pupils, and, in her years of struggle to maintain her children, kept a millinery and notion store. There is a pleasant story that Mrs. Watmough, whose daughter had married the late Judge M. Russell Thayer, was visiting the store, and little John, a chubby, curly-headed, barefooted boy in blue jeans, attracting her attention, she asked his mother what she intended for him, who replied, "I think of making him a blacksmith, he is so strong." The boy said, "I don't want to be a blacksmith; ; I want to go to school.” “Send him to me,” replied Mrs. Watmough; "I like little boys and I have some books with pictures, and can give him an hour a day."
Mr. Johnson's mother lived to be more than ninety years of age, dying but a short time before her son, whose filial devotion to her was one of the most beautiful and touching traits in his character. He never permitted other engagements throughout a busy life to interrupt his weekly visits to her. It was from her that he drew an inherent but little suspected gentleness, while he owed much to her teachings. From the paternal side he drew his inexhaustible physical strength. It was an ancestry not unlike that of Franklin in its happy combination of somewhat irreconcilable qualities.
In July, 1853, when but little more than twelve years of age, he entered the Thirtieth Class of the Central High School of Philadelphia. The most conclusive evidence of the diligence and leadership of the boy Johnson is to be found in the official records of the High School; his average of monthly results with fifteen professors is stated at 98/7; his average in written examinations at 95/7, proof positive that his handwriting then was not what it became later, and his term
Adapted, by the author, from an address delivered by him before the Pennsylvania Bar Association, June 27, 1917.
2Of the Philadelphia bar; former Attorney-General of Pennsylvania; author of the History of the Supreme Court of the United States, and other works.