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prosecute the suits, and that they were commenced and prosecuted maliciously and without probable cause, whereby plaintiffs were caused certain items of damages.

in them, and monopolizing over 90 per cent of their production and sale, of which, prior to one year before the bringing of this action, plaintiff had no knowledge or notice except the two suits in equity and the contract by which Virtue and Deeg transferred to the Creamery Package Manufacturing Company the exclusive right to manufacture the churn and butter worker under patent No. 634,074 for the period of three years. That they did not know that that contract was procured as part of the schemes of defendants. That they were at no time parties to acts of defendants, and did not know of the wrongful contracts and combinations until after the time limited to take the testimony in the two equity suits.

The other allegations of the complaint need not be repeated in detail. They are to the effect that the contract of February 24, 1898, was made in violation of law, to restrain state and interstate trade and commerce, and that all that was done under it was in pursuance and execution of that purpose, including the suits brought against plaintiffs by the Owatonna Company and the Creamery Package Manufacturing Company for the infringement of patents. That prior to the bringing of those suits, plaintiffs had a good and established trade and market for their churns, and were manufacturing and shipping them in the states of Wisconsin, Iowa, and South Dakota; and knowing this, and fearing that suching others. They alleged performance of trade would be continued in those states, and be extended to other states, defendants commenced the suits for infringement, and prior thereto and since have written letters and talked to purchasers and prospective purchasers of plaintiffs' churns, threatening lawsuits and actions for damages for infringement of the patents described in the bills, and also threatened suits for injunction, and by this means destroyed plaintiffs' state and interstate trade.

That plaintiff D. E. Virtue and one Martin Deeg were the first joint inventors of a churn and butter worker, and that a patent was issued therefor, No. 634,074, under which they manufactured those articles and sold them in state and interstate commerce except as they had been prevented by the suits brought against them as hereinbefore stated. And by elaborate allegations the patents upon which those suits were brought are attacked for want of invention and novelty.

That the Creamery Package Manufacturing Company has purchased the property and business of other competitive concerns, and that it has had during the last several years contracts with many and numerous dealers in the articles sold by which it required them to purchase such goods exclusively of it at certain fixed and main tained prices, and to sell only in certain designated territory, the object of which is to secure a monopoly to the Creamery Package Manufacturing Company, and to restrain interstate commerce. That all of the acts detailed were done in pursuance of a common scheme and conspiracy on the part of all of the defendants during the years 1897 and 1898, and ever since maintained and carried out, limiting the production of creamery supplies, fixing and determining their prices, restraining trade

The defendants answered the complaint, admitting some of its allegations and deny.

the contract between the Creamery Package Manufacturing Company and the plaintiff Virtue and said Deeg, and opposed to the charges of the complaint certain affirmative matters, including two actions brought in the state court.

A jury was impaneled to try the issues, which, under the instructions of the court, found a verdict for defendants upon which a judgment was duly entered. It was affirmed by the circuit court of appeals. 102 C. C. A. 413, 179 Fed. 115.

The circuit court and the circuit court of appeals both decided that the damages which plaintiffs alleged they sustained were not a consequence of a violation by defendants of the provisions of the Sherman anti-trust law. Both courts assumed, for the purpose of their decision, that the contract of February 24, 1898, between the Creamery Package Manufacturing Company and the other manufacturers and sellers of churns and butter workers was a combination in restraint of trade; but both courts held that the Owatonna Company was not a party to it, nor became associated subsequently in its scheme.

Of the infringement suits the court of appeals said they exhibited "a case where two suits were brought, one by a party to a lawful agreement, the other by a party to an unlawful agreement, for the infringement of patents owned by them respectively, and where both parties were doing no more then exercising their legal rights." And the court declared in effect that it could see no sinister significance in the suits being simultaneous, and said, further, that after a thorough examination of the record, it agreed with the circuit court that there was no evidence offered at the trial ""which would warrant the jury in find.

ing that any agreement of that kind exist-, Rep. 9. But patents are not so used when ed.'"

The plaintiffs attack this conclusion in twenty-one propositions, some of which are of very broad generality, and all, counsel contend, are supported by the decisions of this and other courts. It is quite impossible to consider them in detail without a review and repetition of the cases. The view we take of the case makes this unnecessary. The case is, as we have said, in narrow compass. The complaint charges a violation of the Sherman law, and, as a means of accomplishing its purpose, the destruction of plaintiffs' interstate trade by a malicious litigation of their rights. A necessary element of the charge is the co-operation of at least the corporate defendants in the purpose, and this determines our inquiry. In answering it we shall assume, as the lower courts assumed, that by the contract of February, 1898, the Creamery Package Manufacturing Company and the corporations competing with it entered into a combination offensive to the law. Did the Owatonna Company participate in it, or subsequently join it or co-operate to execute its purposes? The question must be answered in the negative, as we shall proceed to show.

the rights conferred upon them by law are only exercised. The agreement of the 19th of April, 1897, constituted, as we said, the Creamery Package Manufacturing Company a sales agent of the churns and butter workers made by the Owatonna Company and fixed their list price. The patents under which the articles were manufactured were stated, and it was provided that the Owatonna Company should protect the Creamery Package Manufacturing Company from all suits for infringement, defend the validity of the patents, and promptly attack infringers. This provision is especially urged by plaintiffs as showing a common and illegal purpose between the companies. It has not that quality. It is but an assurance of title to the rights conveyed.

But it is said that the contract between the companies dated June 4, 1898, exhibits knowledge by the Owatonna Company of the Creamery Package Manufacturing Company's purpose, and "fitted into the scheme of the two defendant corporations to get a monopoly in the United States;" and this, it is said further, "can only be when all of the doings are looked at as a whole from beginning to end." We cannot concur. We have seen that the contract of June 4, 1898 (inserted above in the margin), was but a settlement of claims growing out of reciprocal charges of infringement, and it has no other connection with the agreement of February, 1898, than that some of the claims were against corporations which were parties to that agreement. It would be far-fetched to say that the Owatonna Company could not assert rights or protect rights because they were asserted or sought to be protected against corporations which had become members of an il

The Owatonna Company was a manufacturer of churns and butter workers under various patents owned by it, which articles it sold throughout the United States, and by the contract of April 19, 1897, it constituted the Creamery Package Manufacturing Company its sales agent of them, the latter company not making churns and butter workers. The contract was a perfectly legal one, and preceded by some time the agreement of the 24th of February, 1898, entered into between the latter company and other corporations. There were contracts between the Cream-legal combination, without participating in ery Package Manufacturing Company and the Owatonna Company subsequent to the latter date, but all of them were supplemental to the first one and had no illegal taint, nor did they affect it with illegal taint. It is true they granted rights to the Creamery Package Manufacturing Company, and exclusive rights, but this was no violation of law. The owner of a patent has exclusive rights,-rights of making, using, and selling. He may keep them or transfer them to another,-keep some of them and transfer others. This is elementary; and, keeping it in mind, there is no trouble in estimating the character of such rights or their transfer. Of course, patents and patent rights cannot be made a cover for a violation of law, as we said in Standard Sanitary Mfg. Co. V. United States, 226 U. S. 20, 57 L. ed. 33 Sup. Ct.

the guilt of such combination and becoming a joint conspirator in its purposes. But it may be said that we are considering the transactions isolatedly and ignoring *their combined effect. That indeed would be a fault, but in order to compute their combined effect we must estimate what strength they have separately, and so far, on the face of the contracts, there is nothing to inculpate the Owatonna Company.

But a united purpose is sought to be established between it and the Creamery Package Manufacturing Company by the testimony of witnesses to the effect that the contract of April 19, 1897, between the Disbrow Manufacturing Company and the Owatonna Company, was urged by the president of the Creamery Package Manufacturing Company, who represented that the acceptance of royalties by the Disbrow

Company was better than a continuance of competition. It is not practicable to give all the testimony of what preceded and induced that contract. The part most relevant to our inquiry is that which related to the competition which existed between the companies. A witness, who was president of the Owatonna Company at the time, testified that it was suggested to him and other officers of the company by Mr. Gates, president of the Creamery Package Manufacturing Company, that a settlement ought to be brought about by letter or otherwise with the Disbrow Manufacturing Company "so as to get the two churns which were then being manufactured together," and stated that he (Gates) had had some conferences with the Disbrow Company, and he thought that if the officers of the Owatonna Company would go to Mankato "there might be an arrangement made whereby that business could be brought in connection with ours, and in that way eliminate the competition that at that time existed between the Owatonna Manufacturing Company and the Disbrow Manufacturing Company." This object was expressed by the witnesses in different ways.

other character, or rather the object of the negotiations and the contracts which resulted from them take on another character, when all the testimony is considered. It will be observed from the date of those negotiations and of the contracts that they preceded by nearly a year the contract between the Creamery Package Manufacturing Company and its competitors, and could have had no relation to it. And, besides, they had a natural and adequate inducement. They were an adjustment of disputes and litigation growing out of a contract between the Disbrow Company and the Owatonna Company concerning the very same patents. In one suit the Owatonna Company was plaintiff against the Disbrow Company; ing another suit the latter company was plaintiff against the Owatonna Company, and both suits were based on disputes as to rights or obligations arising from the contract of October 2, 1893. The testimony also shows some controversy between the Creamery Package Manufacturing Company and the Disbrow Company in regard to other patents, but the effect of it is not easy to estimate. There was also a contract entered into between the Disbrow Company The president of the Disbrow Manufac- and the Creamery Package Manufacturing turing Company testified that Gates urged Company on the 19th of April, 1897, setthat the Disbrow Company should "stop tling matters growing out of a contract bemanufacturing and make a contract with tween those companies, made on the 12th the Owatonna Manufacturing Company, and of October, 1896, by which the Disbrow let them have all our patents on combined Company made the Creamery Package Manchurns and butter workers and other things, ufacturing Company its exclusive sales and combine the whole business under one agent for churns and butter workers, and head, and let them do all of the manufac- mortgaged to the latter company its plant. turing." The witness testified that he at The other provisions of the contract confirst rejected the proposition and resented cern the adjustment of the relations bethe manner in which the proposal was made, tween all of the companies under the conGates going so far as to declare, with a temporaneous contracts, and need not be profane accompaniment, "You will do it stated in detail. It is clear, then, as we or we will put you out of business." But have already said, that what transpired on subsequently negotiations were resumed and the 19th of April, 1897,-negotiations and the president of the Creamery Package contracts,-had no relation to the contract Manufacturing Company explained that he of February, 1898, and had for their inwanted matters settled, litigation stopped, ducement and object the settlement of con"and a new arrangement made so that the troversies and rights growing out of the whole thing should be run under one head contract of October 2, 1893, between the and one control," and in that way "control Disbrow Company and the Owatonna Com. the whole churn business." The witness pany, and that of October 12, 1896, between formulated the terms, which resulted, after the Disbrow Company and the Creamery some days of negotiation, in the contract Package Manufacturing Company, and the of April 19, 1897. But during the negotia proposition of the latter company to become tions the witness did not see the Owatonna the sales agent of the churns made by the Company's representatives until they Owatonna Company. All of this is very reached the point of signing the contract. complicated in the statement, but is simple These declarations seem to be very arbi- enough in the results, and can be definitely trary and unjustifiable when standing alone, estimated as to actual and legal effect. We and to have had no other purpose than the may therefore sum up by saying that the ruthless crushing of a competitor in the Disbrow Company, by its contract with the same line of business. They take on an- Owantonna Company, did nothing more

than confirm or enlarge the rights which the Owatonna Company had obtained, by the contract of 1893, and conveyed to it the exclusive right in the patents for certain named royalties. This was no violation of law. The Owatonna Company did nothing more in its contract with the Creamery Package Manufacturing Company than to make that company its exclusive sales agent, and this was no violation of law. Both contracts had natural and adequate legal inducements and conveyed rights that could, under the law, be conveyed, and, as a necessary incident to the conveyance, one only of the parties could thereafter exercise them. It may be that the Disbrow Company was to an extent in competition with the Owatonna Company, but it was a competition in part, at least, which, it was contended, was illegally conducted against rights which had been transferred in 1893. But, be that as it may, we repeat, patent rights may be conveyed partially or entirely, and the monopoly of use, of manufacture, or of sale, is not one condemned by law.

It is, however, urged that the infringement suits brought by the Creamery Package Manufacturing Company and the Owatonna Company against plaintiffs were provided for by the contracts between the Owatonna Company and the Disbrow Company, and their coincidence in time is urged as proof of concerted action on the part of defendants and of a conspiracy to destroy plaintiffs' business. The contention is that the bringing of those suits was not a single and isolated act, but was a part of the more comprehensive plan and scheme to secure a monopoly in the United States of the business of making and selling creamery supplies, or, more accurately, counsel, say, to continue and maintain the monopoly already acquired. And it is contended that the attempt was successful in that it destroyed plaintiffs' business. That these contentions are untenable we have demonstrated. The contracts, we have shown, were legal conveyances of rights, and the provision for the prosecution of infringe ment suits was but an assurance of those rights. Patents would be of little value if infringers of them could not be notified of the consequences of infringement, or proceeded against in the courts. Such action, considered by itself, cannot be said to be illegal. Patent rights, it is true, may be asserted in malicious prosecutions as other rights, or asserted rights, may be. But this is not an action for malicious prosecution. It is an action under the Sherman anti

trust act for the violation of the provisions of that act, seeking treble damages. This, indeed, plaintiffs take special pains to allege, that there may be no confusion about the right or grounds or extent of recovery. The testimony shows that no wrong whatever was committed by the Owatonna Company, and the fact that it failed in its suit against plaintiffs does not convict it of any.

This is enough to dispose of the case, for the foundation of the complaint is that the defendants entered into a contract or combination in restraint of trade which caused damage to plaintiffs; and the guilt of the individual defendants and of the two corporations and of all of their officers, servants, and stockholders, is very carefully alleged. It was in this aspect that the case was tried.

But plaintiffs urge that the Creamery Package Manufacturing Company was of itself a combination offensive to the statute, and that they were entitled to go to the jury as to that company. But the contention was not made in the circuit court nor was it made in the circuit court of appeals. The case was tried and ruled upon, as we have seen, on the ground of the cooperation of the defendants in a scheme of monopoly and restraint of trade. There was no liability asserted in the circuit court or in the circuit court of appeals against one of the defendants separately from the others. Concert and co-operation was asserted against all, and a ruling was not invoked as to the separate liability of either. One Frank LaBare was a party defendant, and as to him plaintiffs made a motion that "the case be dismissed and dropped." The court denied the motion for some reason, and then plaintiffs' counsel said: “We desire to proceed with the case as against the defendants, the Owatonna Manufacturing Company and the Creamery Package Manufacturing Company." The plaintiffs then offered to prove that they had not infringed the patents sued on by the defendants. It is manifest, therefore, that the separate liability of the Creamery Package Manufacturing Company is an afterthought and urged in this court for the first time.

There are twenty-seven errors assigned upon offers of testimony excluded or upon other rulings of the circuit court. These we have examined and find that, in the view taken by the courts below of the case and that which we take, there was no error of substance committed. Judgment affirmed.

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A bill in equity was brought by appellant PATENTS ( 132*)-TERM-EXPIRATION OF as successor to the rights of an invention FOREIGN PATENT-EFFECT OF TREATY. patented under United States letters patent 1. The term of a United States patent to Edwin Cameron et al. for a process and which, under U. S. Rev. Stat, § 4887, U. S. an apparatus for treating sewage, No. Comp. Stat. 1901, p. 3382, would expire The bill with the expiration of the term of a British 634,423, dated October 3, 1899. patent previously granted for the same in- contained the usual allegations and prayed vention, was not extended by the provisions for an injunction to restrain appellee from of the treaty of Brussels of December 14, the use of the invention. Appellee filed a 1900 (32 Stat. at L. 1936), art. 4 bis, that plea to the bill, in which it alleged that the patents applied for in the different contract- invention had been previously patented in ing states by persons admitted to the benefit Great Britain by letters patent dated Noof the convention shall be independent of the patent obtained for the same invention vember 8, 1895, and that that patent had in other states, and that this provision shall expired on or before the 8th day of Novem-apply to existing patents, but such provi- ber, 1909, being the expiration of the term sions, if construed as they must be, in ac- for which it was granted, and that therecordance with the declaration of the Brus-fore the United States patent expired and sels Convention at the instance of the American delegates, affect only those exist ing patents whose terms might otherwise be shortened by the lapsing of foreign pat

ents.

[Ed. Note.-For other cases, see Patents, Cent.

Dig. 1882-191; Dec. Dig. § 132."]
PATENTS ( 132*) - TERM - EFFECT OF
TREATY.

2. The omission from the act of March 3, 1903 (32 Stat. at L. 1225, chap. 1019, U. S. Comp. Stat. Supp. 1911, p. 1453), enacted to make effective the Brussels treaty of December 14, 1900, for the protection of industrial property, of any provision to carry out art. 4 bis, which declares that patents applied for in the different contracting states by persons admitted to the benefit of the convention shall be independent of the patent obtained for the same invention in other states, and that this provision shall apply to existing patents, which article, in the light of subsequent congressional action and of legislative action of some of the other contracting nations, cannot well be deemed self-executing, leaves in force as to existing United States patents the provisions of U. S. Rev. Stat. § 4887, U. S. Comp. Stat. 1901, p. 3382, under which such patents will expire with the expiration of the term of a foreign patent previously granted

for the same invention.

[Ed. Note.-For other cases, see Patents, Cent. Dig. §§ 1882-191; Dec. Dig. § 132.*]

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became terminated by law, and it being stipulated that the bill should be considered as filed as of that date, and as the bill was not filed with the purpose or intention of applying for or obtaining an injunction before the expiration of the British patent, no injunctive or equitable relief could be had. A dismissal of the bill was therefore

prayed. The decree of the court recited the facts of the plea and adjudged that the that its expiration was not prevented "by patent had expired as therein alleged, and any effect of the treaty of Brussels of December 14, 1900 [32 Stat. at L. 1936], which treaty and the construction thereof was drawn in question on the plea in this cause;" and that therefore the court was without jurisdiction, the complainant having a plain and adequate remedy at law. This appeal was then prosecuted under § 5 of the circuit court of appeals act (26 Stat. at L. 826, chap. 517, U. S. Comp. Stat. 1901, p. 488).

The single question here is whether the United States patent expired with the British patent according to the laws which existed when it was issued, or whether its existence was preserved by the treaty of

Brussels.

At the time the patent was issued, § 4884, Revised Statutes (U. S. Comp. Stat. 1901, p. 3381), made the term of a patent seventeen years; and by § 4887 it was provided that the receiving of a foreign patent did not prevent the granting of a United States patent. It was, however, provided that "every patent granted for an invention which has been previously patented in a

the bill in a suit founded upon the infringe- foreign country shall be so limited as to ment of a patent. Affirmed.

The facts are stated in the opinion.
Mr. Henry Love Clarke for appellant.

expire at the same time with the foreign patent; or, if there be more than one, at the same time with the one having the

For other cases see same topic & § NUMBER in Dec. & Am. Digs. 1907 to date, & Rep'r Indexes 33 S. C.-14.

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