Chauche v. Pare

GILBERT, Circuit Judge. The plaintiffs in error were the defendants in an action brought to recover damages for the infringement of letters patent issued on June 3,1884, to Dominique Lille, for an improvement in fruit presses. On May 22, 1885, the patentee, wTho resided in France, executed to Aime Pare, of Fresno, Cal., a power of attorney, with authority and upon terms therein expressed to grant licenses to manufacture and sell machines containing the invention for and during the life of the patent, also authority to transfer and assign said patent, “but at prices, charges, clauses, and conditions agreed on and approved by the grantor, or every bargain closed will be void.” Concerning the power to assign the patent, there were inserted also the following provisions: “However, it is understood that the said Lille’s consent and approval will follow sufficiently either from a letter or from a telegraphic dispatch addressed by him on receipt of notice.” “It is understood that the grantor reserves the right of approving the sales only when the cession of patents is concerned, and not for the cession of license which the attorney shall have full power to make under the conditions above stipulated.” On August 28, 1886, under the authority conveyed by this instrument, the attorney therein named transferred unto the defendant in error, Antoine S. Pare, his executors, administrators, and assigns, “the exclusive liberty, license, power, and authority to make, use, and sell within and throughout all the states and territories of the-United States of America, for and during the residue or remainder of the term for which the said letters patent are or may be granted, the said invention (improvement in wine or fruit presses), upon the terms and conditions herein contained.” This assignment, instead of being made in the name of the patentee, is, by its expressed terms, an assignment from Aime Pare, the party of the first part, to Antoine S. Pare, the party of the second part, and is executed under the hand and seal of the said party of the first part, and not for and on behalf of the patentee. It contains, however, the following recitals: [285] “Whereas, letters patent of the United States of America were granted and issued to Dominique 1.111c, of the republic of France, and a resident of Troncens, in the department of (Jera, France, foi an improvement in fruit presses, said letters patent hearing date the 3rd day of June, 1884, and are numbered 299,815, as will more fully appear by reference thereto; and whereas, the said Dominique Lille did, by an instrument in writing, on the 22d day of Hay, A. D. 1885, authorize and empower the said Aime Fare, party of the first part, to convey and dispose of, by license, on a stated and fixed royalty, the said invention and letters patent, within all the states and territories of the United States of America aforesaid, as will also more fully appear by reference thereto.” Upon the trial, the defendants in the action disputed the authority of the plaintiff therein to maintain the action under the rights conferred upon him by the assignment, and contended that the instrument was void and in effective to transfer to him any interest in the patented invention, or right to damages for its infringement, and the court so held. The plaintiff thereupon proceeded to offer in evidence certain communications that had passed between the attorney, Aime Tare, and his principal, the patentee, whereby it was claimed that the latter had ratified the transaction of his agent. The court admitted these communications in evidence, ruled that their contents were sufficient to prove such ratification, and instructed the jury that the instrument purporting to he an assignment, taken together with such subsequent acts of ratification on the part of the patentee, were sufficient to transfer his. interest in the patented improvement to the plaintiff. This instruction of the court to the jury, and the admission in evidence of the communications referred to, together with the exclusion of evidence offered by the plaintiffs in error to prove an assignment to them from the patentee of his demand for damages for the infringement, are the principal assignments of error. There can be no question that, under the power of attorney, the agent had' full authority to assign the patent. But it is equally clear that his authority could he exercised only upon terms that should first he communicated to and accepted by his principal. The purported assignment, therefore, was clearly insufficient to transfer a title to the patent, not only because it was the act and deed of the agent, and not that of his principal (Machesney v. Brown, 29 Fed. 145, and cases there cited), hut for the further reason that the agent exercised a power not conferred upon Mm. in that he made a transfer of the patent without communicating the terms of the sale to his principal, or obtaining his approval thereof (Johnson Railroad Signal Co. v. Union Switch & Signal Co., 59 Fed. 20; Union Switch & Signal Co. v. Johnson Railroad Signal Co., 10 C. C. A. 176, 61 Fed. 940). The letters the contents of which were held to furnish conclusive evidence of a ratification of the assignment on the part of the patentee were written during the period of years succeeding the date of the assignment. The first was written to the patentee by his agent on September 20,1886, and contains the following: “I made up my mind, and wrote to my brother [the defendant in error! and explained to him the situation. X told him that, if he was not to give me the money required, X was to abandon this business. He immediately sent [286] me the funds, and, later on, I made him consent to buy the license, at the price and conditions mentioned in your power of attorney.” This is the only letter in the record which contains direct information concerning the extent of the interest sold, and the terms and conditions of the sale. The agent here distinctly informs his principal that he has sold, not the patent, but a license; and he makes that fact doubly clear by saying that the sale has been made at the price and conditions mentioned in the power of attorney. The price and conditions mentioned in that instrument referred only to the transfer of a license. The terms upon which an assignment or. “cession” of the patent might be made were not expressed. They were to be fixed after conference with the patentee. The agent was powerless to assign the patent upon terms to be fixed at his own discretion. His authority to grant privileges under thé patent without the concurrence of his principal was limited solely to the transfer of licenses. It is in the light of the information afforded to the patentee by this first letter from his agent that the subsequent correspondence must be viewed. On December 28, 1886, the patentee thus wrote to the defendant in error: “If I had taken my patent in the United States at first, the duration might have been of 17 years; but, nevertheless, you will have the privilege, at the expiration of the patent, to possess all the relation for the manufacture of my system, and you will receive as in the past the orders. In one word, there is an infallible prospect, there is only to manufacture on a large scale. For this, if necessary, organize a small company, because, to make money, the cash must not be wanted. If you pay cash, your fournisseurs will allow you great reduction. In this enterprise there can be no risk, first, because you are the only one who has the right to exploiter my system in the United States.” On April 23, 1887, the defendant in error wrote the patentee: “I havé no definite plans for the manufacture of the machines; most probably will have them made by different manufacturers. * * * I inclose two drawings to give you an idea of the manner we are going to make the machines this year.- Tell me what you think of it.” On October 21,1888, the patentee wrote to the defendant in error: “I send you herewith the duplicate of a letter which I send to-day to the address below, concerning a lawsuit which you have instituted against Toulouse and Delorieux. I believe you are in the right.” The inclosed duplicate letter is addressed to the attorney of Toulouse & Delorieux. After referring to the rival presses of Toulouse & Delorieux, it contains the following: “Now, then, if these gentlemen wish to continue to build similar machines, all they have to do is to suppress the pieces I have pointed out, or else enter into an agreement with Mr. Pare, my licensee in the United States, for the development of my system of presses. The latter may make arrangements with several manufacturers, assigning to each a special territory. This is, sir, what my licensee is entitled to have your clients observe strictly, and failing to do which he must prosecute them to the full extent of the law.” On October 31, 1888, the patentee wrote to the defendant in error. After mentioning certain men who might be consulted with reference to disputed points in the patent, he proceeded thus: “If you will believe so, ask them the proof, if it is for that reason that you brought the lawsuit. * * * As for the power of attorney, I have looked it [287] over, and see (hat you have the right to make, in general, all necessary proceedings. Consequently, it is useless for me to make such a trip. I will go only later on, or, if yon wish to give up the license, 1 will take it back. You have only to renounce by a simple letter, and paying what is due to me.” On December 20,1888, the defendant in error wrote the patentee concerning the rival machines that were being manufactured by Toulouse & Delorieux, and says: “But, no sooner the United States decide in my favor, X shall no more he friendly, and I will let them know my mind; also, the throe other manufacturers who are infringing. í: í¡ « As soon as the court will have finally decided the‘validity of your x>atent, X will pay the royalty upon all machines sold by mo.” The last of the lei fcers hears date February 2, 1889. It contains similar expressions to those found in the preceding correspondence, and adds nothing material to the force or effect thereof. We find nothing in any of these letters to indicate that the patentee was aware that his agent had made an assignment of the patent, or that he ever received information from which that fact might be deduced. All the expressions found in the correspondence point to the conclusion that the patentee understood the defendant in error to be, as indicated in the first letter, a licensee only. If the letters prove ratification, they prove the ratification of the transfer of a license, and not the ratification of an assignment. Such being their purport, it was error to charge the jury that the letters connected with the attempted conveyance from the agent to the defendant in error constitute a conveyance to the latter. As licensee, the defendant in error had no authority to maintain ihe action. Birdsell v. Shaliol, 112 U. S. 486, 5 Sup. Ct. 244; Waterman v. Mackenzie, 198 U. S. 52, 11 Sup. Ct. 334. The judgment is reversed, with costs to the plaintiffs in error, and a new trial is ordered.