Court Opinion

ID: 8744236
Source: CourtListenerOpinion
Date Created: 2022-11-26 11:00:30.484289+00
Date Added: 2024-06-11T17:00:34.390806
License: Public Domain

SHIPMAN, Circuit Judge
(after stating the facts as above). The complainant construes the contract to be a continuing and indivisible agreement for the payment of the specified percentage of proceeds upon the sales of a11 machines and other articles made in accordance with expired or unexpired patents. Unless the contrary appears to have been the intention of the parties, the presumption is that, under a license for the exclusive right to manufacture and sell under a patent, royalties are not payable upon articles manufactured and sold after the expiration of (lie life of the patent. Parties may, of course, contract as they choose; but, in the absence of some provision by which a promise for the continuing payment of royalties upon expired patents may be fairly inferred, the presumption is that the contract is upon the ordinary terms as to the duration of royalty. In this case, the agreement was for the exclusive use and for payment of royal tier upon four patents, one óf which expired in about 3 years, and the fourth expired nearly 17 years, from the date of the contract; and the consideration for Kennedy’s agreement was strictly a royalty, and not a division of the proceeds of a joint business for a term of years. The fact that the contract •declares that the license is to manufacture and sell under the letters patent during the unexpired term thereof, instead of using the plural, “terms,” is not significant in view of the nature of the contract, which was founded upon a license to manufacture in the United States articles under four patents for three separate articles. ' The argument by the complainant was founded upon the theory that these separate articles were to be used, and were used, jointly, .so that the contract was in fact for the manufacture of sets of tools for joint use. The machine patent was for shearing or punching, and the circuit court found that “during the five years or inore covered by the accounting only six of the machines sold, of the value of $286,” were of such a character that they could he used conjointly with the couplers and punches, while more than. §1,500 worth of such machines were sold on which a royalty is claimed, but which could not be conjointly used with the couplers and punches. “It is further found that the articles made under these various patents could readily be separately used, and are or-dinarilv sold for separate use.” The finding of the court was supported by the testimony taken before the master.
The decree of the circuit court was silent on the subject of costs. The bill for an accounting was founded upon a single contract for the payment of unpaid royalties upon four patents after March 31, 1891, when the defendant ceased payment entirely, and the judgment was for the complainant to recover the amount due upon two patents. One of the assignments of error is based upon the nonallowance of costs. When a decree is “affirmed with respect to the merits, it will not be reversed upon the question of costs.” Du Bois v. Kirk, 158 U. S. 58, 15 Sup. Ct. 729, 39 L. Ed. 895. The decree of the circuit court is affirmed, with costs of this court.