84 F. 57 | U.S. Circuit Court for the District of Southern New York | 1897
(after stating the facts). This record presents a legal tangle which is unique and unprecedented. To define with perfect accuracy the rights of all the parties involved in this snarl of titles is a problem the solution of which can hardly be expected of a merely finite intellect. It is thought, however, that the issues involved may be disposed of without attempting so formida-' ble a task. It is unnecessary to consider the testimony relating to the cash payments provided for by the agreement of February 20, 1894, for the reason that the complainant’s brief concedes that Wagner received a sufficient amount “to estop him from claiming that he has not been paid.” The source from which Watkins procured this money and his alleged indirection towards others in connection therewith are questions wholly immaterial to this dispute. It is enough that the licensee paid to the licensor the full amount agreed on between them. This sum being paid there can be no forfeiture under the written stipulations of the agreement. The only provision for a forfeiture has reference to a default in making these preliminary payments. As the payments were made, the clause providing that in case of nonpayment “ this agreement to be forfeited within ten days after such default” never became operative. It is said that Watkins failed to keep the agreement for the reason that he did not pay the expenses incident to the application for additional patents. This proposition cannot be maintained. It is unable to stand alone either on the facts or the law. The license only required the payment of the expenses of such patents “as said Watkins may at any time de
“What equitable rights hg.s Watkins in said agreement? (of February 20th.) Has he forfeited them? Should the agreement be canceled as to him on complainant’s prayer?”
And again,
“The principal contention in this litigation is that Watkins, wholly failing to pay the royalties and moneys due under the agreement of February 20, 1894, has forfeited his rights under said license agreement, and that therefore the court is asked to rescind the same so far as Watkins is concerned.”
By tbe agreement of February 20th Watkins is given tbe exclusive right, during tbe life of tbe patent, to manufacture and sell tbe patented typewriter. • Wagner retained tbe right to use, but this right, in view of what bad previously been conveyed, would seem to be of no practical value. An option was given to Watkins to purchase, within a year, all tbe Wagner patents for $15,000, but tbe option was never exercised. Watkins did not obligate himself to manufacture and sell any given number of machines, but bis failure to sell was guarded against by a provision that be should pay a royalty of not less than $2,400 annually. So that tbe agreement, so far as applicable to tbe patent controversy, was an exclusive license to Watkins to manufacture and sell upon tbe payment of a yearly royalty of $2,400. As long as this license was in force tbe entire interest in tbe patent remained in Watkins. All that Wagner retained was tbe right to use any machines which be then possessed. Tbe agreement of August 10,1894, seems to be regarded by both parties as an assignment of tbe title of tbe patent to Hagemeyer and Luddington together with tbe right to collect royalties under tbe February license. If this be tbe correct construction, and tbe court is inclined to tbe opinion that it is, Wagner retained no interest in tbe patent of tbe least value, and tbe right to demand and receive tbe royalties vested in Hagemeyer under tbe tripartite agreement referred to in tbe letter of Luddington of February 5,1896.
Tbe effect of tbe conveyances thus far considered was to vest tbe entire interest under tbe patent in Watkins and Hagemeyer. Wagner bad no longer any interest. Watkins held an exclusive license
First. An undivided interest in the patent, carrying with it a right to use the patented machine.
Second. The right transferred by Hagemeyer to collect the royalties due after February 5, 1896, and
Third. A two-thirds interest in a license giving it the right to manufacture and sell the patented machine.
All of the interests not owned by the complainant are owned by the defendant Watkins either individually, or as beneficiary under the Luddington trust.
If it be held that the license is forfeited there still remains the Luddington interest, which it would seem may yet be acquired by Watkins on paying the amounts due to Hagemeyer and Luddington. The court is unable to see how in any event this interest can be confiscated, and Luddington be compelled to convey to the complain