*1 CO., Inс. v. MFG. AUTOMATIC RADIO RESEARCH, Inc. HAZELTINE
No. 4381. Appeals States
United Court First Circuit.
Argued 8, 1948. Dec. Aug.
Decided
WOODBURY, Judge, Circuit dissent- ing. Crews,
Floyd City (George H. New York Woodworth, Boston, Mass., Darby K. Darby, City, & New York him on the with brief), appellant. Dodds, City B. New
Laurence York Roberts, Walker and (Richard F. Cushman Boston, .Grover, Mass., & with him on brief), appellee. MAGRUDER, Judge, Before Chief WOODBURY, Judge, Circuit and SWEE- NEY, Judge. District MAGRUDER, Judge. purposes private Chief educational non- commercial agreed use”. Automatic alleged This to be suit for royalties expressed specified in terms of a agreement be- *3 due under a percentage selling price piece of the of each defendant, Radio Man- tween the Automatic types equipment of the man- enumerated of Company, Inc., ufacturing a Massachusetts licensee, by ufactured and sold whether corporation Automatic), (herеinafter called or patents actually of such plaintiff’s assignor, and Cor- Hazeltine particular used in the manufacture of the poration, a corporation. Plain- Delaware apparatus. any case, In Research, Inc., tiff Hazeltine an Illinois royalty payment called a minimum of corporation organized wholly aas owned $10,000per year. Corporation. subsidiary of Ha- Hazeltine Corporation, zeltine Electronics another The contract, pro- in Article VI further wholly subsidiary owned of Cor- Hazeltine appellant vided—and makes much of this—(cid:127) poration, program conducts the research “agrees that the licensee to mark all licensed about to be mentioned. We shall refer to apparatus and Li- by manufactured sold corporations these collectively as Hazeltine. hereunder, form, legible censee readily in with the many years by For statement ‘Licensed Hazeltine engaged Hazeltine has program research, Corporation homes, a only for 'radio use of as a of for edu- result purposes, patented cational developed many private, which it has and for in- non-com- use, patents ventions. mercial acquired Other under one or have been more of fol- by lowing patents through it and arrange- appli- various pending under business by ments. At cations suit, the time followed Hazeltine word ‘Patent’ and owned, or right had the patents are, numbers of the grant un- which licenses der, opinion Licensor, five patents ap- hundred ap- and more involved in and paratus proximately patent applica- types two hundred licensed hereunder tions, chiefly manufactured pertaining to and televi- one or radio more licensees of largest sion. As Licensor. marking required licensors in The field, granted radio section shall affixed ap- has non-exclusive li- be to said licensed paratus censes to radio manufacturers, by attaching permitting plates bearing re- them quired to use any or marking all of affixing marking said ents, in return for on royalty payment apparatus said equal- some other form fixed percentage ly of gross permanent bearing various and sales of types of equipment. radio marking suсh is not licensed.” It was found the district court Automatic that the first became licensee of contract was executed in York, New Hazeltine in 1935. It roy- defaulted on its performance part that at least alty obligations there- under the agree- first two due in under was New York. The conclud- ments with Hazeltine. However, in each provided article the contract that it instance a settlement reached, and the “governed interpreted was to be relationship continued. present The con- accordance with the laws of the tract State parties between the became effective New York.” September 1, 1942, years, to run subject ten option to an of earlier termination Because of wartime restrictions on the licensor the happening spec- production private of radio use, certain sets for ified events. given Automatic was payment Hazeltine waived demand for non- transferable, non-exclusive the minimum annual Sep- schedule of tember, enumerated August through and all oth- er respect with Upon pay royalties which refusal of Automatic to should acquire grant thereafter, complaint Hazeltine filed its licenses during period April 9, 1947. Plain- license authorized Automatic to prayed judgment tiff utilize such that Automatic patents in the pay manufacture and sale of cer- to Hazeltine the minimum sum due un- tain radio, described phonographic, year and oth- der the contract for the ending August er equipment, “limited to homes, 31, 1946, interest; use with that an accounting now provisions de- suant to Code be sums due the further be had and that Judicial 1291, 1292(1), and in 28 paid the found U.S.C.A. §§ decreed termined approved 1294(1). interest; ren- Counsel for both defendant plaintiff “that with form," question required judgment “as and no statements plaintiff the to the der presented scope the in- continu- throughout here as to said junction. de- agreement”; ance in force said herein; and plaintiff’s costs fendant raised, court and the district other further plaintiff considered, defenses. exam- numerous just. relief as court, we ining judgment of the district *4 filed, only matters both confine our attention to those answer was Automatic’s After Au- presented brief, appeal. In its summary judgment parties motions for filed , enveloрed A tomatic has the case in an at- supporting affidavits. and submitted mosphere chicanery motions, overreaching and and hearing was held on the hardly lengthy A was on the case warranted record. concluded that district court for Au- sum- affidavit of counsel executed one application appropriate tomatic, support was and Automatic in there filed mary since judgment procedure con- summary judgment, fact”. of motion for any material its genuine “no as to issue (cid:127) many charges, sweeping claims and granted and Auto- tains motion Haze'ltine’s part most the affidavit for the D.C., but was made denied. matic’s motion (cid:127) belief”, and not on “on information and required by personal knowledge, Rule as “Interlocutory Judg- 21, 1948,an On June Procedure, 28 (e), Rules Civil Federal entered, ad- it was in which ment” was U.S.C.A. : judged and follows decreed as I. Patent Misuse agreement between (1) That variety Appellant of de- has advanced September as of dated proposition that sustain fenses to force in full good at and law “is and valid monopoly so Hazeltine has misused the and effect.” grants disentitled it- as its to defend- from plaintiff recover (2) That present com- self relief under the to royalty minimum under as ant plaint. August year ending agreement for' the ar- Restrictive Use Notices.—Automatic interest, “and $10,000with 1946the sum requirement in the license gues that may issue therefor.” execution that apparatus be mark- agreement that licensed further recover such plaintiff (3) That nоtice, use” as above with “restrictive ed at from the defendant are due as sums stated, such misuse constitutes judgment said li- date agreement render the unenforce- ent as to re- the case be agreement, and that cense rejected This must be able. contention and state an ac- to take Master ferred authority Talking Pictures of General thereof. count Co., 1938, U.S. Corp. v. Western injunction issue permanent That “a (4) 849, 82 L.Ed. and 58 S.Ct. di- seal this Court and under the out of rehearing, S.Ct. defendant, agents, officers and its to rected non-exclusive 81. In that case a 83 L.Ed. restraining each of them and enjoining and expressly “was confined to the throughout in force of continuance them patented am- sell the manufacture and to such breaсhing said license reception, radio amateur plifiers for radio as IV and V thereof Articles provisions of experimental reception, home broad- and plaintiff obligation to defendant’s to relate reception.” page at cast keep to records to The at S.Ct. proper from which the statements render required affix licensee to royalty payments of such amounts license a no- amplifiers sold under the all determined.” was licensed stating that the tice Amplifiers with only uses. the aforesaid jurisdiction entertain court has This li- were sold pur- notices attached such appeal.from judgment, chasers, problem presented but that purchaser who intended not censee to part as And noted put use in theaters case bar. it is to be did them to picture judgment appeal the time of talking equipment. At from which this sale, the li taken order, both does Auto- manufacture and command matic, pur licensee, comply purchaser knew with the term censee and the use, agreement requiring commercial and the attach the chaser’s intended ap- license did restrictive purchaser use notices the licensed knew that paratus am sold to make and sell it. authorize licensee through Mr. plifiers Speaking for that use. Talking Corp. General Pictures v. West Brandéis, Supreme Court on ern Elec. Justice has not been Co. overruled rehearing its earlier view that reaffirmed Supreme Appellant Court. contends in purchaser an was accountable wrongly decided, the case was legal license is fringer. “That a restrictive authority has been * * * practice seems clear. more less subsequent undermined de use is a restricted granting licenses for cisions of the Court on related *5 Goodyear, Company one, old see Rubber subject matters. of From our examination 788, 799, 800, 19 L.Ed. Game 9 Wall. the later cases we are not satisfied that Brook Telegraph Co. v. well Fire-Alarm so; rate, specu this any is at we decline to appears, lyn, C.C., far as 255. So 14 F. late on whether the case would now be questioned. legality never been its * * * has by Supreme followed the Court. If the legal and As the restriction overruled, case is to be that must be done amplifiеrs sold made and outside the by Meanwhile, the is Court. it pre scope the the effect is the of duty our to follow it. cisely if no license whatsoever the same as fact, appears it that none of the radio granted And had been to licensee]. [the apparatus made sold and Automatic has facts, in no it purchaser] knew as the [the been marked with the restrictive use notice it had manufactured position better than if VI; required by words, Article other amplifiers a license. the itself without consistently ignored Automatic has invention because it has used the is liable provision of Automatic so.” 305 U.S. without license to do suggestion makes the curious that its own page 83 L.Ed. 59 S.Ct. at of this of term the affords contract breach continued, Consequently, Court independent ground relieving an for of “no to consider what there was occasion obligation pay stipulated per- to rights would been of the have centage royalties. argument is based amplifier had been manufactured ‘un if the provision upon ap- of Article VI that patent’ passed and der the ‘had into the paratus hearing restrictive not no- use ordinary purchaser chan hands of a licensed”; therefore, “is Au- tice trade.’ Nor have we nels of occasion to appara- argues, since “no licensed tomatic notice’ consider effect ‘licensee’s royalties which tus for are due under the purports which to restrict the use of ar sold”, ever been contract has made or lawfully sold.” ticles requiring court erred in an district account- percentage royalties. ing of Under We must conclude from de circumstances, foregoing Talking no doubt Hazel- General Pictures cision agreement proceed tine would had an election to necessarily is not that a license granted against theory of Automatic on in- the licensee is invalid because pat fringement. make and the above right pro- vend a But contract restricted apparatus partic licensor, limited of use visions are the benefit ented field, required may ular, choose to them. described who waive Notwith- apparatus standing affix to failure the licensed of Automatic agreement to to attach noticеs, of such restricted use. There use Hazeltine is notice the restrictive en- upon performance which under a notice insist be circumstances of titled to inoperative obligation use would be of its contract restricted Automatic pur- pay royalties subsequent as IV as a percentage unenforceable Article 8(M ap- the complete circum- Depending licensee. on the selling price each III, royalty might stances, paratus types in Article such a percentage listed of the during charge upon con- well be licensee’s a lesser Licensee
Section
“sold
stipulation
payment
business than
tinuance
license”.
of a flat
yearly.
sum
been
has
Payments.
Royalty
—It
presented
A different рroblem
agree
pointed
that' the
out above
provided
agreement
if
had
use
gave
right to make
Automatic the
ment
part
make
consideration for the
patents,
required
any
of Hazeltine’s
patents,
Hazeltin’s
Automatic
by a
royalties
measured
Automatic
compete
agreed
in the commercial
not to
price
all
radio
percentage
selling
any
field
sale of
manufacture and
specified types manufactured
apparatus of
enumerated,
apparatus
types
radio
any
Automatic,
whether or
and sold
embody
though
did not
any of
particular apparatus in
utilized
fact
Hazel-
the inventions covered
the inventions
patents.
might
Such
tine’s
$10,-
royalty payment of
with a minimum
constituting
be unenforceable
an unlaw-
as
objection to
year.
valid
There is no
000 a
attempt
monopoly
ful
li-
extend the
parties are free
agreement;
this sort
patents beyond
censor’s
the limits
basis
which the
bargain as to the
But we
grants.
read the
computed.
De
H-P-M
are to be
bar,
agreement in the case at
Corp. v. Watson-Stillman
velopment
would not break the
manu-
Pyrene
Cf.
D.C.N.J.,
*6
use
facturing
selling for unrestricted
and
D.C.E.D.Pa.,
Urquhart,
fg.M
Co. v.
apparatus
radio
which in fact does not em-
Op
555, 560;
F.Supp.
American
any
body
of the inventions covered
Co., D.C.,
Optical
Jersey
tical Co. v. New
patents. This is
notwith-
Hazeltine’s
true
Mass., 1944, F.Supp.
Ohio Cit
Automatic,
standing the fact that
in mak-
Appli
Air-Way
izens Trust Co.
sale,
required by
such
be
Ar-
a
would
D.C.N.D.Ohio, 1944, F.Supp.
Corp.,
ance
IV,
agreеment'
ticle
Section
to
in
1012. As stated
one Hazeltine’s
of
stipulated percentage
Hazeltine the
of
to
this,
affidavits,
type
royalty
of
clause was
price
right
royalty for the
selling
adopted “for
of ac
originally
convenience
patents
to utilize the
covered
The
counting”.
court
stated: “This
below
operation
of
designed
a convenient mode
is
necessity
de
brief
to avoid the
of
Duress.—Automatic’s
states
by the
type
termining
of defend
its
“assert
the license was
whether each
that
affidavits
any
only
product
signed
litigation.
of
hun
in
embodies
fear of disastrous
ant’s
fact,
was,
taking
plaintiff
If it
in
coerced
a
patents which
controls.”
into
dreds
patents
Certainly
having
ap
license
invalid
D.C.,
a
under
no
plication
today,
licensee,
grant
any
to
radio set
consideration of
made
in
patent, may
obviously
patents
a
misused.”
all
to
licensor’s
Not
pressure
lawfully promise
pay the
a fixed
constitutes “duress”
to
licensor
economic
rendering
The
per year during
agree
life of the
a contract voidable.
sum
Williston,
ment;
promise
this
not become
is discussed in 5
Con
would
of duress
tracts,
Ed., 1937, where
is
merely because the licensee
Rev.
it
§
unenforceable
pot
pressure
year, happened
must
particular
pointed
to utilize
out that the
exerted
in a
wrongful;
be
so,
is
it
If
would
be
threat
to resort
to
this
that
invention.
stipulate
such
policy
litigation
to
duress as
public
civil
to
no more
way
roy
of a transaction induced
justify rescission
for a variable.consideration
though
thereby
legal right
is no.
there
patent,
alty
right, to use the
whether
for the
claim, provided
expressed
to enforce the
the threat
such consideration were
in.terms
faith,
is,
good
in the belief
profits
the net
percentage
made
possible cause
business,
of action exists.
in terms that a
(as here)
licensee’s
answer
its
Neither Automatic’s
nor
amend
price of cer
percentage
.selling
up
.by
answer
as defense. Not-
ed
set
duress
and sold
manufactured
tain
withstanding
approximately
applications
statement Automatic’s
for United
*
**
spe
brief,
record in fact contains
States letters
from its
improp employees”
corporations
allegation
(and
cific
from othеr
executing
persons).
erly
coerced into
From
some-
Automatic’s
There
generalizations,
suit.
is a state what
now
nebulous
is diffi-
it
for cult
precise
in Automatic’s counter motion
to
ment
ascertain the
nature of its
judgment,
argument
score,
summary
as one of the asserted
on
though
does
con-
complaint,
grounds for dismissal of the
that cede
mere
that the
accumulation of
patents by suing
great
number,
Hazeltine has misused its
illegal
however
per
is not
sue,
threatening
Corp.
and otherwise har
Transparent-Wrap
se. Cf.
Machine
assing
Co., 1947,
radio manufacturers
customers of
v. Stokes & Smith
patents
refusing
a license under its
to take
67 S.Ct.
402,
363,
quite
86 L.Ed.
which dealt with
tract in suit was not an integral part of
involving
a different set of facts not
it;
agreement,
being
itself
third-party
assertion of
defenses
a de
contract,
a valid
will not be rendered un
fendant sued
breach of contract.
enforceable by collateral activities of the
Monopoly.
plaintiff
has claimed
in violation of the anti-trust laws.
—Automatic
monopolistic
alleged
prac
that Hazeltine’s
Restatement,
2
Contracts
(1932);
519
5
§
preclude
recоvery
tices
its
Williston,
1661,
should
here. Its
Ed., 1937;
Contracts
Rev.
§
alleged
answer
aas defense
Walker,
that Hazeltine 2
409,
Ed.,
Patents
Deller
§
illegal
“in an
endeavor
eliminate all
Juices,
com
Inc.,
See also Bruce’s
v. American
petition and secure an unlawful monopoly
Co., 1947,
755-756,
743, 754,
Can
330 U.S.
in violation of the
1015,
antitrust
laws of the 67 S.Ct.
thority 374. As to rоyalties may bogged Court judgment. reserved action for complicated defendant into a down Until we receive further light and leading collateral protracted trial asserted Court, we are disinclined laws. And see infractions the anti-trust to extend holdings Katzinger Majestic Corporation of America v. Radio MacGregor cases so as to into throw 641, Distributors, D.C.Conn., 1931, 53 F.2d altogether the discard long line of ear- 642-643, cases cited. lier cases disallowing a licensee to chal- lenge validity patent. of the licensor’s Invalidity Alleged II. It is not uncommon pat- Patents infringement suit, ent in which there is generally recently, it had Until genuine issue validity as to the that, in thought be settled law been ent, to make a settlement litigation patent royalties a liсense suit for agreement under which the patentee estopped from agreement, the licensee gives a alleged infringer license to the licensor’s validity of the challenging the consideration payment stipulat- Co., Harvey v. Steel patent. States United royalty. Indeed, ed 240, 310, S.Ct. 49 L.Ed. 196 U.S. suit seems to way have been of set- Ed., Patents, ; Walker, Deller § litigation tlement earlier between the Chicago Katzinger v. Edward Co. parties. apparent is not to us that the Mfg. Metallic public interest served render- MacGregor L.Ed. S.Ct. ing such common-sense business settlements Co., 1947, Mfg. & Westinghouse nugatory, which would be the result of a es S.Ct. ruling that the licensee reopen could long can no proposition that this tablished validity stipu- issue of when sued for the qualifiсation. without er be received royalty. lated agreed had the licensee each of those cases bar, prices large In the products at fixed case at where a licensed sell the number of were single a restriction on the covered “Such licensor. price-fix containing com entering interstate price articles stipulation, particu Act the result would be the Sherman a violation of merce larly protection if it held that the li awkward only as it within save monopoly.” by putting censee defend Sola issue the lawfully granted *8 Co., validity 1942, patents. of all Although these Elec. Co. v. Jefferson 172, 173, summary judgment 175, 87 L.Ed. Automatic’s motion for 173, 63 S.Ct. supporting affidavit Katzinger gen Mac and its make the Court, in the The n that none of cases, price-fixing un eral statement deemed Gregor patents part valid, covered the license are inseparable of the dertaking be attempt license concrete was made to for the buttress these consideration “integrated assertions, and the con district court concluded: circumstances these and in grant”; “Furthermore, pur does not defendant public in “freedom interest cluded that validity plaintiff’s port to contest the of all from restraints patents and invalid D.C., 401, patents.” page at page 67 S.Ct. U.S. at of trade” have been ourselves unable 380, We to find from would best served page seriously record that Automatic at up set the inva the licensee to allowing tempted “genuine to raise issue” as to the patent in to a suit defense lidity of validity patents. of all licensed If the to the set confined it's decision It royalties. Katzinger holding of the it, MacGregor pointedly declined to before of facts extended situa cases were rule that a licensee broader lay down the tion, provi of the ground because restrictive on of defend may all cases otherwise, licensee, or patent even when no sion invalidity of the defense, make out its have es order to stipulation was involved price-fixing every li- each and one of tablish that contract. U.S. at ed, li- Or could alleges but was then invalid? that it patents is censed invalidity the fact that maintain, judgments of unaware of in view censee payable non-infringement patents liti- are wheth- other stipulated royalties gated manu- any particular before that date. er or not embodies licensee and sold factured Although Automatic did not in this court covered inventions misrepresenta- rely on a defense of fraud or in- as an ents, royalty agreement tion, Automatic claim that the afore- does unenforceable separable entirety becomes patents adversely said ten litigated to Haz- any one of the 500 if it can be shown eltine were the ones in which Automatic Or, third patents as a is invalid? licensed interested; been chiefly judg- had that the alternative, licensee have would the against ments Hazeltine demonstrate the patents, number that a substantial show patents, worthlеssness these and that important patents constituting or the more consequently failure there has been a in- agreement, the “substance” relieving consideration Automatic of its ob- wrong in our conclusion valid? If we>are ligations under the license challenge that the licensee here cannot may be that the defense of validity we confess we patents, then eviction or failure of consideration raises a to know how to instruct would be at loss question of local law. court below proceed with the the district court correctly ruled in so far local as law upon the three al- Whichever of remand. ap is controlling, properly the local law followed, suggested were ternatives above plicable under the circumstances of this resulting situation would seems to us the case is that of of New York. State See mess, like- be a and the district court would Inc., Klaxon Mfg. Co. v. Stentor Elec. ly subjected well-nigh intolerable 61 S.Ct. 85 L.Ed burden. 1477; Curtiss-Wright Adamowski v. Fly Eviction III. Service, Inc., 300 Mass. Questions upon validity Restatement, Laws, direct attack N.E.2d Conflict 'aside, Automatic relies the defense of on (1934). Comment b §§ which, eviction as we understand its at- opinion our the defense of eviction application here, tempted inis substance a insupportable grounds. on several failure consideration. The The mere fact that' Automatic argument these circumstanc- based particular regarded ten out of the past, es: At various times patents more than аpplica- brought infringement suits third tions agreement, covered eight based on one or more of important licensed, the most ones in no licensed under the in suit. parties regarded sense means that both Only eight patents one of these ever those as the “substance” of the passed Court, and its agreement and contracted accordingly. The invalidity judgment of did not extend to all *9 significant no record offers suggestion that patent. claims Of the of this the other case, such was the and the district court seven lower courts held all the concluded that Automatic “has not made invalid, claims of two and some the any serious effort show eviction here remaining the claims of five were also held it”, and could show not and that Automаtic invalid. Two additional sued on “by got contract, what bargained held Hazeltine were lower a court for, namely, to use whatever infringed. been Some have of these plaintiff’s available ents are for use in large litigated before the effective D.C., collection.” 77 at 497. date suit and some after. The record is clear that if Even properly had presented defense, informed Automatic of the Su- this we aforesaid do not think it preme judgment invalidity Court before be sustained a could where non-exclusive li was execut- cense is concerned. attempting Without a
808
eviction,2
infringer.
and had
as an
censee
been sued
full
doctrine
discussion
that,
short,
that
holding by
In
a
court
lower
present purposes
we may assume fоr
patent
and a
is
conclusive
hardly
invalid is
a
granted
license is
where
exclusive
an
invalidity
patent’s
invalid,
a lower determination of
even
that
is held
patentee-li
non
court,
of a
hence the “worthlessness”
'in a
suit between
Ap
may
patent. See
exclusive license of that
party,
licensee
censor and a third
Co.,
pleton Toy
An
&
v. Lehman
successfully
exclu
Furniture Co.
eviction.
claim an
801;
Cir., 1948,
Mfg. Co.
Pope
be said to 7
165 F.2d
agreement may
sive license
C.C.,
1886,
Owsley,
N.D.Ill.,
F.
of a
v.
27
grant
the licensee
com
presuppose a
upheld
patent is not
But cf. Drackett
Chamber
plete monopoly;
if the.
Chemical Co. v.
Co., Cir., 1933,
infringer,
lain
6
an
F.2d 853.
even one suit
63
destroyed,
pro
monopoly
tanto
is
desired
rule
Nor do we find that
different
a
of con
may
be failure
and there
be said to
prevails in
New York.
the State of
Koerting
&
Co.
See
sideration.
Schutte
Research, Inc., De
that in Hazeltine
v.
true
Co.,
Engineering
&
v. Wheeler Condenser
81,
Mfg. Corp., 194 Misc.
Wald Radio
Williston,
158; 1
D.C.E.D.Pa.1924, 295 F.
597,
mo
ruling
plaintiff’s
N.Y.S.2d
Contracts,
Rev.Ed.,
137,
But where
summary
§
judgment,
Hof
tion for
Justice
non-exclusive,
here, is
as
apparently
the defense of
stadter
held that
inapplicable.
argument
eviction like
advanced in the case
that
a
bar was available
New York to
non
licensee
non-exclusive
To
that a
hold
royalties.
being
exclusive licensee
sued
lower
a
of eviction on
base
have examined
New
authori
We
York
invalidity in suits be-
judgments of
court
court,
think
par-
ties cited
do not
and third
patentee-licensor
twеen
they support
that
conclusion. The lead
prin-
inconsistent with the
seem
ties would
1876,
Swett,
v.
Lowell,
case of Marston
66 N.Y.
1936,
Triplett
recognized
v.
ciples
206,
1880,
Am.Rep. 43,
retrial,
82 N.
645,
after
638,
S.Ct.
809 by 184, 803, 404; covered 11 S.Ct. 35 Ohio device sought, for the patent the Ap Patent Of- Air-Way the Citizens Trust Co. v. license, refused was pliance merely Corp., D.C.N.D.Ohio, 1944, licensor 56 fice, F. allowed which Supp. on an improvement 1010. But cf. Martin v. New Trin minor for a Asphalt Co., D.C.N.J., 1919, cites Bottlers Lake Appellant also idad patent. earlier 373, 369, 93, 1919, N.Y. F. Rainey, Assuming governs 94. local law that Seal Co. matter, to that, referred passage we satisfied even if but the are N.E. merely, repudiation is, and furthermore by the licensee in some dictum cir was posi- cumstances, to the reference New York was with to discussion royalties, license. Sep exclusive suit for assignee of an Automatic’s letter of tion 18, controlling 1947, tember Clearly stringent none of these cases does not meet the requirements De raised in the question set forth in on the eviction Skinner v. Wood Mowing Reaping Co., It does 1893, case at bar. Machine case and Wald 491, Am.St.Rep. N.Y. 35 N.E. attention appear whether 'not Jus- Wald De Hofstadter tice doc- aspects eviction to the directed suggested cases which have any already At discussed. we have trine the existence of some such doctrine of that' to believe rate we are constrained repudiation explained have unilateral that case is De Wald apparent holding in the may unequivocally the licensee announce New law of with the not in accordance longer recognizes binding “that he no highest be declared .York as it would agreement, force of the and that he will state. court that manufacture thereafter or the article Repudiation patent under IV. covered a claim of right, alleged invalidity founded 18, 1947, September sеveral On patent, and in hostility to and de complaint in filing of the months after the authority fiance of case, wrote a letter so that the licensor there can latter, formally advising the Hazeltine proceed against after him infringe for an more, repudi that Automatic “has without patent, ment of the if he choose so to do.” Agree the License ated terminated Co., Asphalt Martin v. New Trinidad Lake asserts notice ment”. Automatic supra, D.C.N.J., F. “repudiation” extinguished its contract Fahys Co., See Skidmore v. Watch-Case obligation pay royalties. Perhaps a suf App.Div. 50 N.Y.S. answer ficient contention 1021-1022; Son, Inc., L. Heller & v. Lass such defense was set forth either in Auto App.Div. 315, 318, ner answer, matic’s answer or amended inor 175, 180. already But as we N.Y.S. summаry judgment. its counter motion for out, pointed under the license Furthermore, giving every indulgence does, liability royalties suit Automatic’s repudiation for contention, Automatic’s such depend upon not its any actual use of only prospectively, operate could and would particular ap the licensed judgment royal affect for minimum paratus made sold it. If Automatic year ending August ties the contract repudiate permitted were nor it affect Automatic’s liability percentage agreement and in any due fact did not utilize period up “repudia inventions pat to the date of covered prevail ents, could tion”. addition to so far as it an in law, fringement even question be a of federal suit if all its option valid; аbsence of a cancellation and Automatic would thus achieve immunity liability by agreement, a substantial default non-use Haz licensor, despite the licensee cannot eltine’s its contract under repudiation royalties, regardless taking such unilateral notice of termi of such use, obligation nate its contract for the to make use of them. years Hence, yet having assuming several to run. doctrine of *11 repudiation Starling, 1891, Paul Plow might St. Works v. 140 unilateral in some cases certainly recognized, such a the circum- would not available at bar.
stances District Court judgment of
affirmed.
' (dissent- Judge WOODBURY, Circuit
ing). question on this decisive my view the licensing aof appeal enforceability licensee to requiring the does not in fact he though even any invention any use whatsoever make liсensor. patent owned
embodied necessarily I see agreements Such be expanding have the effect the mon confines legitimate yond -the many years therein,
opoly granted public Court, because of system, dominant interest that' having agreements licensing has held busi spite of the unenforceable effect necessities convenience ness Suppiger v. Co. Salt Morton parties. 402, 86 L.Ed. S.Ct. U.S. Ellis, 314 U.S. v.Co. Chemical B. B. 367; Mer 406, 86 L.Ed. 495, 498, 62 S.Ct. Co., 320 U.S. Corp. v. Mid-Continent coid seq., S.Ct. et Therefore, by painty of cited.
and cases I would above cases reasoning with here suit licensing
hold the
unenforceable. LAMBETH.
UNITED STATES No. Caudle, Gen., Atty. Theron Lamar Asst. Appeals Slack, Court Anderson, Robert United Ellis N. N. Fred States Ninth Circuit. Garland, Sp. Neuland P. J. James Aug. Gen., Henry Hess, Atty. L. Assts. Hamilton,
Atty., D. Floyd S. Asst. U. Ore., Atty., Portland, appellant Vosburg Arthur and William H. Hed- S. lund, Ore., appellee. Portland, HEALEY, POPE, BONE and Before Judges. Circuit