machine and under such conditions, however, as shall not interfere with its operation.

This lease and license shall not be subject to either voluntary or involuntary assignment, but upon surrender of the license and the payment of all arrears thereunder, the Crown Cork & Seal Co. of Baltimore City will issue to such person as the lessee may designate a new license, reserving only the rentals thereafter maturing and otherwise identical with this license.

If said lessee shall violate or fail to perform any of the terms or conditions of this instrument, then this lease or license shall, at the option of the lessor, be null and void, and said Crown Cork & Seal Co. of Baltimore City shall have the right at any time to take possession of the machine.

This license shall not be valid unless confirmed by countersignature of the Crown Cork & Seal Co. at its home office in Baltimore. Witness the signatures of said parties this 190-.

day of

LICENSE TO OPERATE.

Crown cork system and automatic crown machine.
MARCH 14, 1910.

To the CROWN SEAL & CORK Co., Baltimore:

We hereby make application for license to operate your crown cork system and automatic crown machine, as covered by patents, No. 638354, dated December 5, 1899, and No. 643973, dated February 20, 1900, to be used in Boston, Mass., and request you to forward to our address one automatic crown machine, at $1,800, f. o. b., Baltimore.

Upon the granting of the license we agree and obligate ourselves that the system and machine shall only be used and operated by us in connection with crown corks, purchased from the Crown Cork & Seal Co., and bottles made, by properly authorized manufacturers, with the company's standard finishing tools.

It is agreed that the price of crown corks (plain) shall not exceed 25 cents per gross, f. o. b., Baltimore. It is agreed that the shall have the benefit of any general reduction in the price of crown corks.

It is further agreed that no claims for consequential damages shall be allowed by the Crown Cork & Seal Co.

AGREEMENT OF LICENSE AND LEASE OF ONE CROWN MACHINE.

The Crown Cork & Seal Co., of Baltimore City, called the Crown Co., hereby licenses and leases to doing business at Boston, Mass., called the lessee, one Crown machine of the standard type below mentioned, and does hereby license said lessee to use for the term and within the terms and limitations herein set forth, the Crown Co.'s cork system, i. e., the said machine, and processes. This license is granted under the following United States patents, to wit: No. 473776, April 26, 1892; No. 608158, July 26, 1898; No. 638354, December 5, 1899; No. 643973, February 20, 1900; No. 779991, January 10, 1905; No. 908688, January 5, 1909, and other letters patent heretofore or hereafter granted to the Crown Co.

Type of machine.-The type of machine so leased, and annual rental payable therefor, is the following (i. e., the one not canceled): Machine type, automatic power Crown beer machine (rent), $180.

Term of lease. The term of this agreement commences on the date hereof and continues until terminated as herein provided. Either the Crown Co. or lessee may at their option, respectively, terminate this agreement.

Rent. The lessee shall pay to the Crown Co. the annual rent above stated for the type of machine leased; the rent shall be payable in equal quarterly instalments on the 1st days of January, April, July, and October; the first instalment shall commence on the first day of the month succeeding the shipment of the machine, and shall be a due proportion for the time from such date to the first quarterly-payment date.

Termination. This lease and license may be terminated by either party at their options, respectively, and shall terminate on the date fixed therefor as herein provided. The Crown Co. may terminate the same by written notice addressed to the lessee at his address herein given, mailed at Baltimore, and shall take effect 60 days after the mailing date. The lessee may terminate by similar written notice addressed to the Crown Co. at Baltimore, together with the delivery of the machine, f. o. b. Baltimore, to the Crown Co., and termination by the lessee shall take effect on such delivery, and shall not take effect unless or until such delivery is made. No abatement of rent shall be made while the machine is in the lessee's possession or until such delivery at Baltimore. On

any termination, all liabilities of the lessee to the Crown Co., including arrears of rent, and a due proportion of the accruing quarter's rent to the date it takes effect, shall be at once due and payable.

And the said parties hereby agree as follows: The lessee shall not be obliged to insure the machine or be liable for its value destroyed by fire or lost in transportation. All deliveries of the machine by or to the Crown Co. shall be f. o. b. Baltimore, and the lessee shall pay all transportation charges and all taxes on the machine. The said machine shall be used only by said lessee at his place of business in the city above stated. The lessee shall keep the machine in good working order and condition at his own expense and pay the cost of repair of any machine not in such condition when returned to the Crown Co., whether the lease be terminated by either party. Repair parts must be obtained from the Crown Co. only. The Crown Co. shall in no event be liable for any consequential damages or injury to business claimed to arise from alleged defects in leased machines or for defects in quality of or failure to deliver crowns; nor shall the payment of the rent be affected thereby.

This license and lease shall not be subject to voluntary or involuntary alienation, but upon surrender hereof and the payment of all arrears hereunder and all of the lessee's liability to the Crown Co., the Crown Co. will issue to the lessee's nominee a new lease and license, reserving only the rentals thereafter maturing and otherwise identical with this instrument.

This instrument is not valid unless signed or confirmed by the Crown Co. at its home office, Baltimore, Md. Dated 1st day of June, 1911.

The CROWN CORK & SEAL CO.

Secretary.

EXHIBIT 4

SIDNEY HENRY V. A. B. DICK COMPANY

1

Mr. Justice LURTON delivered the opinion of the court: This cause comes to this court upon a certificate under the sixth section of the court of appeals act of March 31, 1891.

1 Will appear in 223 or 224 U. S. The fact that the excerpts in this exhibit are taken from an advance copy of the decree will account for such slight differences in punctuation and the use of italics as may be observed.-Ed.

The facts and the questions certified, omitting the terms of the injunction awarded by the circuit court, are these:

This action was brought by the complainant, an Illinois corporation, for the infringement of two letters patent, owned by the complainant, covering a stencilduplicating machine known as the rotary mimeograph. The defendants are doing business as copartners in the city of New York. The complainants sold to one Christina B. Skou, of New York, a rotary mimeograph embodying the invention described and claimed in said patents under license which was attached to said machine, as follows:

"LICENSE RESTRICTION.

"This machine is sold by the A. B. Dick Co. with the license restriction that it may be used only with the stencil paper, ink, and other supplies made by A. B. Dick Co., Chicago, United States of America.

"The defendant, Sidney Henry, sold to Miss Skou a can of ink suitable for use upon said mimeograph with knowledge of the said license agreement and with the expectation that it would be used in connection with said mimeograph. The ink sold to Miss Skou was not covered by the claims of said patent."

QUESTION CERTIFIED.

Upon the facts above set forth, the question concerning which this court desires the instruction of the Supreme Court is:

Did the acts of the defendants constitute contributory infringement of the complainant's patents?

There could have been no contributory infringement by the defendants, unless the use of Miss Skou's machine with ink not made by the complainants would have been a direct infringement. It is not denied that she accepted the machine with notice of the conditions under which the patentee consented to its use. Nor is it denied that thereby she agreed not to use the machine otherwise. What defendants say is that this agreement was collateral, and that its validity depended upon principles of general law, and that if valid the only remedy is such as is afforded by general principles of law. Therefore they say that the suit is not one arising under the patent law, and one not cognizable in a Federal court unless diversity of citizenship exists.

We are unable to assent to these suggestions. We do not prescribe the jurisdiction of courts, Federal or State, but only give effect to it as fixed by law. If a bill asserts a right under the patent law to sell a patented machine subject to restrictions as to its use, and alleges a use in violation of the restrictions as an infringement

of the patent, it presents a question of the extent of the patentee's privilege, which, if determined one way, brings the prohibited use within the provisions of the patent law, or, if determined the other way, brings into operation only principles of general law. Obviously a suit for infringement, which must turn upon the scope of the monopoly or privilege secured to a patentee, presents a case arising under the patent law. The jurisdiction of the circuit court over such cases has, for more than a century, been exclusive by the express terms of the statute, although for the most part its jurisdiction over other kinds of suits arising under the Constitution and laws of the United States is only concurrent with that of the State

courts.

That the license agreement constitutes a contract not to use the machine in a prohibited manner is plain. That defendants might be sued upon the broken contract, or for its enforcement or for the forfeiture of the license, is likewise plain. But if by the use of the machine in a prohibited way Miss Skou infringed the patent, then she is also liable to an action under the patent law for infringement. Now, that is primarily what the bill alleged, and this suit is one brought to restrain the defendants as aiders and abettors to her proposed infringing use.

The books abound in cases upholding the right of a patentee owner of a machine to license another to use it subject to any qualification in respect of time, place, manner, or purpose of use which the licensee agrees to accept. Any use in excess of the license would obviously be an infringing use and the license would be no defense. (Robinson on Patents, secs. 915, 916, and notes.) This is so elementary we shall not stop to cite cases.

The contention is not that a patentee may not permit the use of a patented thing with such qualifications as he sees fit to impose, and that a prohibited use will be an infringing one, but that he can only keep the article within the control of the patent by retaining the title. To put the contention in another form-it is that any transfer of the patentee's property right in a patented machine carries with it the right to use the entire invention so long as the identity of the machine is preserved, irrespective of any restrictions placed by the patentee upon the use of the article and accepted by the buyer.