*1 WEST PICTURES CORP. v. TALKING GENERAL ERN ELECTRIC CO. et al FOR THE THE OF APPEALS CERTIORARI TO CIRCUIT COURT SECOND CIRCUIT. May Argued 2, 1938. 13, 14, 1937.

No. 357. December Decided *2 Ephraim Darby, Jr. Berliner Samuel E. Messrs. petitioner. for Henry R. Ashton Clark, with whom Mr. Merrell E.

Mr. brief, respondents. for on opinion delivered of the Mr Justice Butler Court. respondents brought against peti-

Three suits were district of court for southern in the district tioner different based infringements, York to restrain New on. amplifiers tube for inventions vacuum patents talking mo- telephony, radio used wire and been have In there were in suit all fields. and other pictures, tion together and are were tried cases patents. seven patents held one courts one. The lower treated They con- challenged here. ruling is not invalid, curred in holding six of the valid and infringed This by petitioner. Supp. 16 F. 91 F. 293; (2d) granted Court a writ of certiorari.

Under caption petition Presented” the “Questions writ of certiorari following: submits the “1. Can the owner of a patent, by means re- thereof, strict the use made of a device under the manufactured patent; after passed the device has into the hands of a purchaser in ordinary trade, channels of full con- paid sideration therefor?

“2. patent owner, Can a merely by a ‘license notice’ to a attached device made under patent, and sold in ordinary of trade, place channels an enforceable re- on purchaser striction thereof as the use .which purchaser may put the device? application “3. Can an inventor who has filed an *3 patent, showing describing claiming but not certain inventions, obtain a valid for said by inventions voluntarily filing a or ‘continuation’ applica- ‘divisional’ for said inventions more than years tion unclaimed two subsequent public use of the-said unclaimed inventions assignee him or or his licensee?” petition brief supporting

The the contains specifica- relating tions of error to decision of questions. two other whether, by One is acceptance and retention of royalties paid by manufacturer, the licensed respondents acqui- in infringement esced the and are estopped from main- taining the suit. other is whether the patents up- held are invalid because of anticipation of by, or want invention the over, prior patented art. That' brief is' questions confined to the three definitely stated in the petition. But petitioner’s brief on the merits extends questions the additional specification reflected the of errors.

1. Our consideration of the case will be limited to the questions specifically brought forward petition. the following. “The peti- the contains 38, paragraph

Rule and short' statement summary only shall contain tion reasons relied on for and the matter involved 'of the in- may brief be supporting writ. allowance- A or pre- whether so included but, in petition, cluded con-', concise in direct, it must separately, sented A with comply failure to 26 and 27. formity with Rules deny- will be a sufficient' reason requirements these by the Evidently petitioner, . . .” ing petition. it to state issues intended “Questions Presented” involved,” matter of the its “statement to arise on deemed purport supporting brief nor petition for neither in- Whether any question. other for review apply sup- separately presented, or petition, cluded at least petition, brief is not a porting is which review stating questions on purpose , of error that brief do sought. specifications in. questions petition; stated expand or add to the challenge rulings merely upon they idéntify serve grounded ultimate decision of the matter involved. nothing the lower courts’ lecision on either

There is to warrant review here. Whether questions the added infringement and are es- acquiesced respondents Granting the facts. of the writ upon topped depends to review the merely evidence not be warranted would Power Co. v. N. C. drawn Southern inferences from it. States U. 508. United v. John S. Public Service the decision on Moreover, ston, 268 U. S. *4 They are not to findings. on concurrent rests point support. United States plainly without unless disturbed Foundation, 1, 14. United States v. 272 U. S. v. Chemical Ickes, Power Co. v. 592. Alabama McGowan, 290 U. S. Nor support them. to 464. There 302 U. S. is;evidence questions of an granted to review writ bé would argues, for as petitioner and ticijpation invention them there between is conflict decisions of circuit of appeals. courts & Bowler Layne Corp. Western Works, Well 261 U. S. 393. Keller v. Adams-Camp bell 264 U. S. v. United 314, 319-320. Cf. Stilz States, 144, 147-148. The writ 269 U. S. did not issue to questions. bring up Benson, either these Crowell v. 285 U. S. having

One obtained writ of certiorari review specified is not entitled here to obtain questions decision on any other issue. Cork & Seal Co. Crown v. Gutmann here, Co., ante, p. 159. Petitioner is entitled to deci formally presented those any question sion on other than petition for the writ. by its Telephone respondent Telegraph

2. The American & having patents. Amplifiers Co. owns the these inventions One, known fields. commer are úsed in different field, talking picture equipment for includes theaters. cial private field, embiaces radió Another, broad called reception, and radio reception, experi radio amateur cast respondents The other are reception. subsidiaries mental Company and exclusive licensees in the Telephone of the recording reproducing and sound; field-of dur commercial infringement alleged, they en ing the time were talking making supplying picture theaters and gaged embodying including amplifiers the inventions equipment petitioner in suit. also fur patents covered tálking equipment picture including to theaters nished invention embody covered amplifiers charge so Respondents’ doing in suit. them. infringes petitioner Company was one Transformer of a American holding non-exclusive licenses of manufacturers

number sale amplifiers manufacture limited distinguished from commercial use. use, as These private Radio Corporation, granted by acting were licenses Telephone respondent Company, itself *5 The Com- Transformer the latter. assented to were to the confined to expressly license pany’s for radio amplifiers patented the and sell manufacture reception, experimfenal radio reception, amateur to the right, sell had no reception. It home broadcast talking picture a in theaters amplifiers equipment. amplifiers in sell the did knowingly

Nevertheless, it ádiúits use. Petitioner for that to controversy petitioner amplifiers knew that the Company Transformer that the pic- in the motion used were to be petitioner it sold to purchasing from the when industry. petitioner, The ture knowledge use, had actual for that Company Transformer In a make such sale. license to latter had that .no license, the Trans- requirement with a compliance by it under the amplifiers sold affixed to Company former apparatus in that stating substance a notice license amateur, experimental for radio .only was licensed To question. in reception under broadcast petitioner scope to outside amplifiers sold in the license, described, it also affixed notices form but' both parties disregarded. were intended they first puts question its in Petitioner affirmative form: cannot, by óf patent, “The owner a means of the the use made of device manufactured under the- restrict passed has into the after the device hands of a purchaser ordinary channels trade full con- that paid proposition But ignores sideration therefor.” not sell controlling peti- owner did facts. amplifiers question or authorize the Trans- tioner any amplifiers sell or Company former them for uáe use. other commercial The sales made any theaters petitioner were Company the Transformer outside patent. of its license and under the Both scope time of knew fact at parties transactions. assumption petitioner for the ground is no There ordinary channels of trade.” purchaser was “a it Company assignee; was not an did Transformer *6 it a mere them; interest in any patents not own the license, amounting a non-exclusive licensee under De of the sue.” than “a mere waiver more 242. States, 273 S. Pertinent 236, U. v. United Forest Co. . . manufacture . are these: “To of the license words radio amateur radio ex reception, only and to sell . . .” reception. and radio broadcast reception perimental all grant extending licenses uses may Patent owners Company field. v. in a or limited to use defined Rubber Gamewell Fire-Alarm 788, 9 799-800. Goodyear, Wall. 14 Dorsey Fed. 255. Rake Telegraph Brooklyn, Co. v. 4,015, 946, Co., Cas. No. 7 Fed. Cas. Bradley Co. v. Fed. Patents, Unquestionably, 808, §§ 947. Robinson on 824. manufacture, may grant licenses to the owner of scope not inconsistent with the upon use or sell conditions Co., 186 of the Bement v. National Harrow monopoly. Co., 272 93. United States v. General Electric 70, U. S. 476, attempt 489. There is here no on the U. S. to extend of the scope monopoly owner

beyond contemplated by statute. Cf. 283 Corp. Corp., 27, v. American Patents U. S. Carbice Co., Mfg. v. Barber 302 U. S. 458. 33. Leitch Co. There treating amplifiers is no warrant for the sales to peti if or the patents authority as made under the tioner (35 4884 and 4898 U. S. §§ their owner. S. C. 40 §§ R. Marsh, 515, Moore 7 Wall. 521. 47). v. Waterman Mackenzie, Gayler 252, Wilder, 256. v. v. 138 U. S. 10 Co., General 477, 494. United States v. Electric How. 762, 763, Patents, 792, 806 §§ on supra. Robinson et seq. could not Company convey The Transformer to peti- was not knew it tioner what both authorized to sell. 544, 16 Hawley, By Wall. 550. Mitchell v. knowingly outside the making petitioner scope the sales of its 182

license, Company infringed patents the Transformer Goodyear, Rubber Co. v. in the amplifiers. embodied Co., Harrow United supra. Bement National supra. v. Co., Mfg. Vulcan Co. v. supra. v. General Electric States Waterman Co. Maytag L. E. (2d) 136, 73 139. F. v. Kline, Porter Needle Co. v. Nat. 891, 234 Fed. 893. Co., knowl Needle Petitioner, having Fed. 536. with bought constituting infringe at sales edge facts infringe did itself embodied ment, talking picture when it leased them amplifiers Hawley, supra. ubi theaters. Mitchell v. equipment Bullard, Supply Co. v. Cotton-Tie Fed. Cas. American 629, 630. See Robinson on 294, 625, Fed. Cas. No. Mattheson, Holiday v. Fed. 824. Patents, § See Works, Lamp Continental General Electric Co. 186. bought it at the time As petitioner 280 Fed. *7 infringe sales- that the constituted knew amplifiers in them, petitioner’s sec embodied patents ment of notice, need of the license not as effect question, ond be considered. ques- third of its statement Petitioner’s affirmative

3. application filed has an “An inventor who is: tion claiming, but certain describing, showing and patent for a valid said inventions cannot obtain inventions appli- or ‘continuation’ a ‘divisional’ voluntarily filing by years two inventions more than for said unclaimed cation public of said unclaimed inventions subsequent use licensee.” It makes con- assignee his or himby No. Arnold 1,403,475, Patent patents: to four as tention 1,465,332, Arnold Patent No. January 1922; dated 1,329,283, No. Patent dated 21; Arnold 1923; April dated 1,448,550, Patent No. dated Arnold 27, 1920; and January 1923. March court of appeals found and circuit court district

The of either of inventions of public no there filing dates of the prior di- two first These they which issued. upon visional applications adequate peti- evidence and upon were made findings them will not be considered as to tioner’s contentions here. the other two pat the claims of subjects matter of

The were original applications disclosed were ents upon they continuation.applications claimed only “public use was the use” of patentee’s issued. that., And did not pre them. covered the inventions filing,of years as original much two cede dates of the claims the con The effective applications. original are those of the applica applications tinuation intervening rights adverse In the absence tions. to the continuation years prior applica than two more (35 R. S. 4886 U. 31). § time.* S. C. they tions, § were Co., ante, p. & Seal Co. v. Gutmann Cork Crown

Affirmed. Cardozo Roberts, Mr. Justice Justice Mr. Mr. took, e in th consideration or deci Reed Justice this case. sion Black, dissenting. Justice

Mr. in this case and decisions Crown Cork & Seal Co. ante, p. 159, will inevitably Gutmann result in sweeping expansion statutory boundaries consti Congress tutionally scope fixed limit dura monopolies. tion of patent monopoly expanded

The area of the by the *8 right granted holding exclusive an inventor to patented use and vend” his commercial “make, device, assignee corporate (and the inventor’s other permits “pat- pool” how, to control participants) ent where the f * opinion reported by This sentence of the as amended Order o post, 16, 1938, p. May in bought who it purchaser used a

device can be open market.1 bought amplifying tubes from the American

Petitioner authorized to Company, a licensed “manu- Transformer only reception, for radio amateur facture . . and sell experimental recep- and radio broadcast reception radio type tion.” are of a standard uniform devices generally many useful in “fields.” right respond- are not here concerned with

We licensee, ents under the contract with the American fact, do Company. Respondents not—in Transformer rely could with Trans- on.the contract made not— Company, against petitioner former this suit which way If was a contract. party to that Transformer Company respondents’ remedy its contract violated against suit Company the Transformer for the breach.’. question No of malicious interference with contractual presented. Respondents interests is only insist that under their patents, they have the to control the widely these used tubes in the from purchasers hands one authorized respondents to manufacture and sell them.

The mere fact that purchaser of standard and piece uniform of electrical equipment knowledge has his vendor has contracted with an owner of a on equipment not to equipment sell the for certain agreed purposes does not enlarge the scope effect of the patented 1 The amplifying device tube, opinion here is an and the Judge District required stated: “The devices amplifying tubes procured open the defendant by purchase market from distributors; authorized each tube carton bore a license notice read ing follows:

‘License Notice. .'In connection sells, with Corporation devices it Radio of America rights has patents having (a) under claims on the devices them- (b) selves and on combination of the devices with other devices or ” elements, as example hookups.’ various circuits and v

185 gives patentee only statute monopoly. patented and vend his make, to úse exclusive right , article. manufacture to a licensee—authorized Where a to patentee with the to attach notice sell—contracts machine) of “the (a article conditions patented each used in opera- must be its use and the which supplies it, infringement patent,” under pain tion “The do relating Court has said: statutes this , any such notice and . . provide patentee] [the from them can derive no aid . . [inasuitagainstapur- . chaser from the . . licensee]. to which the patented

“The extent use of the machine specific be restricted to may validly supplies pf otherwise , contract between the special owúer 'of a patent and or licensee is a purchaser question outside the 2 law and with it we not here are concerned.”

A patentee right has no under patent-laws to fix patented price the resale of his article3 or to require .that specified unpatented materials be used in conjunction right it.4 with The exclusive to vend any does more not — right than the to- empower exclusive a patentee to use— his into monopoly country’s extend channels of trade ¡which'passes after manufacture and sale title. It is not petitioner contended that did not obtain title to the tubes. . permits statute patentee to “make, power vend” confers to fix and restrict the to which a commodity

uses merchantable can put after 502, 509; 243 U. S. Co., 2 Motion Picture Co. v. Universal Film see Folding Keeler v. Standard 157 U. S. 659. Co., Bed 3 1; 229 O’Donnell, Bauer & Cie v. U. S. Straus v. Victor Talking 490; 243 S. Co., U. Boston v. American Mach. Store Graphophone 8; U. S. cf. Co. Straus, Bobbs-Merrill 210 U. S. 339. Co. v. Universal Film Co., supra; Corp. Motion Picture Carbice 27; v. American Patents 283 U. S. Corp., Mfg. Co. v. Barber Leitch Co., 302 U. S. bought it in the open has been market from one who granted authority to manufacture and sell it. Neither right nor make, right use, nor the *10 chattel, right sell a includes the from —derived monopoly apart from contract —to control the use of the same A purchased chattel another who has it. license to sell a widely used merchantable chattel must be as to prospective purchasers anything transfer of the —if —a patentee’s sell; entire right to it cannot —as to non-con- tracting parties the use of ordinary articles of —restrict bought open purchase market. “The words used few, in the statute simple familiar, are . . . and their meaning would seem not to be doubtful if we can reading really into them that which they avoid do not contain.” Petitioner is held liable for using ordinary an bought amplifying vacuum tube from had one who title right to petitioner and the sell. Notice to the that vendor violating vendor’s) (the its contract. with respond- gave ents latter the no under the and im- posed responsibility patent. under the Petitioner became the owner of tubes. the great portion

At this time a the of common articles of A patented. large commerce and trade .is part of the machinery and equipment used producing goods throughout Many country patented. small parts operation essential to the of machinery patented. are Patented articles are everywhere. Those who acquire control of numerous patents, covering wide of in- fields dustry and business, patents— virtue of their can— on.; wield tremendous influence the commercial life of If nation. the exclusive privilege to “make, use and vend” includes the privilege further after sale, apart .from contract —the use of patented all control— commodities, merchantable a still more sweeping power by patent be exercised can owners. This record indi- Co., supra, Motion Universal Film Co. at 510. Picture a direct and censor power possible extent cates articles multitudinous patented ultimate daily nation’s life is concerned. with Company General Electric record shows that This the American system, and Corporation the Radio system, system are partici- Telegraph Company Telephone and “patent pool” This controls pool.” in a pants “patent “pat- that this record patents. respondents’ discloses agreements, licensing under cross operates pool” ent It appears countries. foreign United States and the Radio Cor- Company the General Electric Radio shall “agreed Corporation poration have the radio except articles patented not resell “agrees Corporation Radio to use system,” and that any patent device, process sys- with or care not to enter or to Company Electric into the General tem field Throughout do the entire others to so.” encourage aid *11 purpose the manifest of the appears “patent agreement for each allo- protect other certain pool” participants in the sale and of production, distribution “fields.” cated in everything used electrical necessities involving modern Although patent laws con- communications. modern but one for one patent monopoly and authorize template patents authorizing invention, separate single pat- many in merged “patent pool.” Thus, this monopolies are ent in patent monopolies are combined and separate all these .to function one. respects made The record many are as larger completely from this out- shows that combination — single in the statutes of and conception side sub-monopolies of monopolies are separate —allotments from “fields,” in respective made which emanate in sub-monopolies. previously other This Court has turn tendency to the attention such combinations directed abuses, following language: law to stimulate in time came the full possibil- “It was not until the one, in appreciated uniting, first to have been ities seem many through organiza- branches of business corporate

188 profits in gathering great payments, small tion and resented, or rather many, which are not realized from than equal profits, larger payments, smaller or even which are. few, felt from a may refused, it came to be ‘right thought to use . . . invention’ aof patentee assigns to the or his patent gave to re- or supplies strict the use of it materials not described .and its made thing terms patented.” patents manufactured under Articles thus con- used in widely trolled are the modern electrical field. The privilege to exercise the power exclusive unrestrained the ultimate of all these important uses mer- determine chantable sold in open, market, articles is a I power do A Congress not believe power has conferred. so far reaching apart from expressly contract —has not been — granted any statute, and should not be into the read implication. law

Second. The patents acquired numerous by respond- ents all relate to claimed inventions made between 1912. 1916; patents yet, some these do not expire until Patent No. illustrates most of patents designated It involved. the “continuation” of two supra, Picture Co. v. Universal Film Motion Co. 513-514. agreement In the between General Electric Company and the Telegraph Telephone Company, appears: American this

“Article VIII. “Acquisition Eights. of Patent acquire rights party shall from others to do under “Neither United rights inventions, or processes, to use secret States appli- *12 party, the other cable such limited to character fields of of not, by operation party this agreement, the other does receive scope respective and within the licenses thereunder fields herein party proposing acquire forth, rights unless the set to such shall given party opportunity represented the other an to first have in acquire rights negotiations thereby its and to for field.”

189 1915 and September 3, filed Novem- applications earlier February years than four 3, ber 19l5. 2, 1919—more use—the “continuation” respondents’ commercial after 13, 1923, and March application was filed “continua- this of “divisionals” or By process granted. permitted is patent monopoly year tions” a seventeen original applications on 1923, theoretically in based begin which were filed 1915. years’ use of an provided public has that two

Congress patent7 bars prior application invention in an patent rights are awarded for disclosures and no Here, however, ap which are not claimed.8 application District given patents for inventions —as proval used publicly found the record Court shows— claim actually years applications two before more than on This is based approval were filed. ing the invention prior (unclaimed) were made that disclosures the fact preceded applications which had not been separate “Divisional” or “continuation” years’ public use. by two any per statute —are applications —unauthorized original applica from the date of give priority mitted barring all other inventions from that date effect tions, nullifying years’ public the statute two use. Thus obtained no on their inven respondents years safely of claim. No one else could -..obtain for'lack tions certainty respondents because of would under a “divisional” “continuation.” later claim provides no exception public statute use by if completed he his and, uses invention in the inventor conduct of his ordinary business—for than: more two 7 2, C., c. 31. S.U. § Patent, 181, 224; Wall. Miller 8 Cf., Corn-Planter v. Brass Co., 350, 352; Ortmayer, 419, 423, McClain v. U. S. 104 U. S. Eustis, Building 424; Buffington’s 807; Ely Iron Co. 65 Fed. (2d) 62 F. v. Mosler Norris Co. Safe Safe

190 years prior discovery to his is abandoned application —the to the he public and cannot thereafter obtain a patent.9 an Such onto the be exception grafted statute —would — directly contrary to aim and and purpose, its would en- able by inventors obtain all the benefits of monopoly simply making disclosures, blanketing unclaimed field, claim waiting until attempted someone else patent a on the same Then, by invention. means “divisional” or “continuation” applications, could be obtained. No expansion statutes such justified.10 I judgment believe of. the Court of Appeals be should reversed. single 9 “A sale to such another of a machine as shown by complainant years been in use prior have more than two application certainly date of righ his would have his defeated

t patent; yet, during period by to a which its use another right, it, have its he pur would defeated himself used for the same pose which it would have purchaser. Why for been used should by himself be strongly against similar usé counted his by another rights as the to whom it, he had sold unless his use substantially with the motive for the purpose, experiment, completing operation further successful of his Mfg. Griggs Sprague, & 249, Smith Co. v. invention?” 123 U. S. 257; Gaylord, 55; International Tooth Crown Co. v. 140 U. S. see Sons, Corp., (2d) 306, Inc. Sales v. Wein F. A. Schrader’s designed Cf., public “The law was benefit, as well of inventors. the benefit ... as for years fourteen "... A term of was deemed suffi [now seventeen] enjoyment right of for the of an exclusive an cient invention delay inventor; may application if he an patent, but his at public may his although use, invention carried into he pleasure, beyond give period what law him.” intended to extend Cooper, Pet. 322 Shaw