Opinion ID: 2375114
Heading Depth: 1
Heading Rank: 1

Heading: On Limited Reargument

Text: Within due time after the opinion in this appeal was announced, the defendant requested permission to reargue. Limited rehearing was ordered to allow reconsideration of the defendant's first assignment of error to the effect that there was no implication of a covenant in the license agreement to prevent the defendant from operating in the unlicensed area of the plaintiff's patent. The defendant contends that the Court's reference to Manners v. Morosco, 252 U.S. 317, 40 S.Ct. 335, 64 L.Ed. 590; Harper Bros. v. Klaw, D.C., 232 F. 609 and Underhill v. Schenck, 238 N.Y. 7, 143 N.E. 773, 33 A.L.R. 303 was inappropriate. Since these decisions deal with copyright licensing agreements, rather than with patent licenses and these authorities were not briefed or argued in the first instance, further hearing was granted to enable the Court to have the benefit of oral argument and written briefs submitted by the parties. Upon reconsideration, we are not persuaded that the authorities referred to were inappropriate to the question reviewed. They reaffirm what inheres in a reasonable interpretation of the common understanding of the parties to a restrictive licensing agreement, such as the one presented here. When permission is granted to operate in a restricted area, the acceptance of the privilege implies a condition that the area reserved will not be invaded. An English judge has observed,This seems to be common sense and not to depend upon any patent law or any other particular law. Incandescent Gas Light Co. v. Cantelo, 12 Rep.Pat.Cas. 262, (Opinion by Mr. Justice Wills, quoted with approval in Henry v. A. B. Dick Co., 224 U.S. 1, 32 S.Ct. 364, 56 L.Ed. 645, 661). In the copyright cases cited, the restrictions were not as explicit as in the agreement here. It is plain from the text of the letter which enunciates the licensing agreement, quoted in the original opinion, that the license was offered with the express restriction against manufacture, sale or use of filaments which exceeded the cross-sectional demension of .005 mils. The defendant was at liberty to accept or reject the license, as thus restricted, according to its choice. When it elected to accept the license at the price indicated it became bound by the restriction which it imposed. See Henry v. A. B. Dick Co., supra, 224 U.S. 1, 32 S.Ct. 364, 56 L.Ed. at 650, 655; Pope Mfg. Co. v. Owsley, C.C., 27 F. 100, 104. Let the original order affirming the judgment be certified to the Addison County Court.