Bloomer v. McQuewan/Dissent McLean
Mr. Justice McLEAN.
Woodworth's patent bears date the 27th of December, 1828, and runs for fourteen years. On the 29th of July, 1830, the patentees conveyed to Isaac Collins and Barzillai C. Smith the right to construct, use, and vend to others, the planing machine invented within several States, including Pennsylvania, except the city of Philadelphia. On the 19th of May, 1832, Collins and Smith transferred to James Barnet the right to construct and use, during the residue of the aforesaid term of fourteen years, fifty planing machines, within Pittsburg and Alleghany county, for which he agreed to pay four thousand dollars. Barnet agreed not to construct or run more than fifty machines during the term aforesaid, and Collins and Smith bound themselves not to license during the term, nor to construct or use themselves during the term, or allow others to do so, in the limits of Pittsburg and Alleghany county.
On the 27th of December, 1842, the patent expired, but it was renewed and extended for seven years, under the act of 1836. This extension expired in 1849; but Congress, on the 26th of February, 1845, passed an act which provided that 'the said letters-patent be, and the same is hereby, extended for the term of seven years, from and after the twenty-seventh day of December, 1849.'
The patentee, by deed dated the 14th of March, 1845, and also by a further deed dated the 9th of July, 1845, conveyed to James E. Wilson all his interest as administrator in the letters patent under the extension by the act of Congress. And Wilson, on the 4th of June, 1847, for the consideration of twenty-five thousand dollars, gave to Bloomer, the plaintiff, a license to construct and use, and vend to others to construct and use, during the two extensions, 'all that part of Pennsylvania lying west of the Alleghany Mountains, excepting Alleghany county, for the first extension, which expires on the 27th day of December, 1849, and the States of Virginia, Maryland, Kentucky, and Missouri, excepting certain parts of each State.'
The defendants continued to run their machines during the residue of the fourteen years, for which the patent was granted, and during the first extension; and the complainant filed his bill to enjoin the defendants from running their machines under the second extension, by the act of Congress.
The contract of the defendants was entered into the 19th of May, 1831, and under it Barnet had a right 'to construct and use during the residue of the aforesaid term of fourteen years, fifty planing machines,' &c. The patent expired on the 27th of December, in 1842. The contract of defendants was made the 19th of May, 1832, leaving about nine years and six months for the patent to run, and this was the time limited by the contract, and for which the consideration of four thousand dollars was paid. This was not left to construction from the life of the patent, but the contract expressly declared the right was purchased 'for the residue of the aforesaid term of fourteen years.'
This term was enjoyed by the defendants, and under the decision of this court, in the case of Wilson v. Rousseau et al. (4 Howard, 646,) the seven years' extension under the act of 1836, was also enjoyed by the defendants. This construction of the act of 1836, in my judgment, was not authorized, and was not within the intention of the law, as was expressed at the time. That extension having expired, another extension is claimed under the act of Congress. This claim is set up to an injunction bill, filed by the complainant, who is the assignee of the patent for a part of Pennsylvania and other States. And by the decision of four of my brethren, just delivered, the defendants are to enjoy this extension, making fourteen years beyond their control. This would seem to imply, that, under the act of 1836, and under the act of 1845, the assignees were the favored objects of Congress. But this is not the case. The patentee who made the invention, and through whose ingenuity, labor, and expense, a great benefit has been conferred on the public, in justice, is entitled to remuneration, and that only was the ground of extension, whether under the law of 1836, or the special act of 1845.
This, as well as the former decision, was influenced by the consideration that the owners of the machines are, in equity, entitled to run them so long as the exclusive right of the patent shall be continued. It is said that the machines are property, and that no act of Congress should deprive the owners of the use of their property. But in this view, the property of the patentee seems not to be taken into the account. He is the meritorious claimant for protection. The assignee for a specific time, rests upon his contract. He has conferred no benefit on society. His investment was made with an exclusive reference to his own advantage. He has no more claims upon the public sympathy than he who rents a mill, a farm, or engages in a business, open to all who expect a profit by it.
But the hardship is supposed to exist, in the fact that, to use the right, a planing machine must be constructed at an expense of some four or five hundred dollars, and this will be lost to the occupier, if by an extension he shall not be permitted to run his machine. The answer is, when he entered into the contract he knew, or is presumed to have known, that the patent might be extended under the law of 1836 or by special act, and if he desired an interest under the renewed patent, he should have provided for it in his contract. Having failed to do this, it would seem to be unjust that, under a contract to run the machine less than ten years, he should be entitled to run it sixteen years. The consideration paid was limited to the term specified in the contract. But, it is answered, that the assignee expected to run his machine after the termination of the contract on which the exclusive right would end and become vested in the public.
Let us examine this plea, and it will be found that a great fallacy prevails on this subject. A right that is common, is no more valuable to one person than another, as all may use it. The injury, then, consists, so far as the licensee is concerned, in the reduction of the value of his machine, by the extension of the exclusive right in the patentee, to the exclusion of the assignee. It is true this deprives him of the monopoly which his contract secured to him. But he has enjoyed this to the extent of his contract, and for which he has paid the stipulated consideration. Now his only equitable plea to run his machine during the renewed patent, arises alone from the supposed difference in the value of his machine, under the renewal, without a license, and where the right becomes vested in the public.
If there had been no renewal, the licensee might run his machine, and any other person might run one. It is a fact known to every observing individual, when a new business is set up, as a planing machine, supposed to be very profitable generally, a competition is excited, which reduces the profit below a reasonable compensation for the labor and expense of the business. If the monopoly continued, as enjoyed under the contract, the consideration paid for the monopoly would be added to the profits, which would make them large. But when the monopoly ceases, the profits, if not destroyed, are reduced by competition, at least as low, if not below the ordinary profit of capital employed in other investments.
If the business of the county or city required the number of planing machines in operation, the licensee could sell his machine at a reasonable reduction for the time it had run. The machines of the defendant had run, probably, from twelve to fifteen years. A considerable reduction would be expected by the purchaser, as a machine could not be expected to last more than twenty years. But suppose it can be used thirty, then one half of the value must be deducted for the wear of the machine fifteen years, which would reduce it to some two hundred and fifty or three hundred dollars.
But suppose the exclusive right should be continued in the patentee, by an extension of it seven years. Then, if the machines were not more numerous than the public required, they would be wanted by their owners, or by others disposed to engage in the business. And I hazard nothing in saying, that, after deducting the compensation from the profits, paid for the exclusive right, they would be larger than could be hoped for, where the right was common. Under such circumstances, I can entertain no doubt, that a machine would sell for more money, under the extension of the patent, than where the right goes to the public.
The idea that to refuse the use of a machine under the extension of a patent, is an unjust interference with property, I think, is unfounded. There is no interference with the property in the machine. The owner may sell it to any one who has a license to use it. It is not the property in the machine that is complained of, but because the right to run it longer than the contract provided for, is not given. The licensee has used the franchise, as long as he purchased and paid for it; and can he in justice claim more than his contract. The extension of the right to use, while the extended patent continues, does a wrong to the patentee, by taking his property, without compensation, and giving it to the licensee. The franchise is property, and it can no more be transferred to another, without compensation or contract, than any other property. It would seem that this description of property is not governed by contract. That a contract to use the franchise ten years, does not mean what is expressed, but may mean a right for twenty years, or any other term to which the patent may be extended.
Every man who has sense enough to make a contract, takes into his estimate the contingency of a loss, to some extent, in going out of the business. He fixes his own time for the contract, and if he wishes to provide for the contingency arising from the renewal of a patent, he can embrace it in his contract for a stipulated compensation.
It may be true, that, unless the contrary appear, when the patentee sells a planing machine, a right to use it may be applied. But the right to construct and the right to use, are distinct. Some purchase of the patentee the right to construct the machine, others to use it. This planing machine cannot be compared to a plough, or any other article which may be considered the product of the patent. The machine is the instrument through which the plank is planed. The plank is the product, and may be sold in the market as other property. But the planing machine cannot be used, without a license. The law protects the franchise, by prohibiting the use of the machine without a license. When Barnet purchased the franchise for the fifty machines, he did not buy the machines for a term as long as the machines could run, but for nine years and six months. The contract, neither expressly nor impliedly, extended beyond that term.
In this view, I think that I am not mistaken, and if I am not, the license is not injured a dollar by the termination of his right to run his machine, as fixed in his contract. But, on whom is the injury inflicted by extending the contract of the licensee with the patentee, and that without compensation? In the present case, the patentee has been injured, by the use of the fifty machines, at least four thousand dollars, the amount agreed to be paid for the right to run them less than ten years. And must not the property of the patentee be taken into the account, as well as the imagined rights of the licensee?
The patentee is justly considered a public benefactor. He has conferred a great benefit upon the world; and he is entitled, under our laws, to at least a compensation for his expense, ingenuity, and labor.
That the patentee is the only one whose interests are regarded, as the ground of extending the patent in the act of 1836, is clear. Now, suppose the patentee has assigned the whole of the patent, without receiving such a compensation as the law authorizes; there can be no doubt he is entitled, on that ground, to a renewal of the patent; and yet, under the decision now given, his assignees would receive all the benefits of the renewal. Should not this fact cause doubts whether the rule of construction of the statute can be a sound one, which defeats its avowed object? If this be the consequence of the assignment of the entire interest by the patentee, any partial assignment must produce the same result, though to a more limited extent. A principle which will not bear this test is not sound.
The act of 1845, extending this patent, annexed no conditions. The exclusive right was extended to the administrator of Woodworth for seven years, from the 27th of December, 1849. But the decision now given, in effect declares this exclusive right is not given. Indeed the object of Congress must be defeated if the machines, in operation at the time of the passage of the act, are to be continued without compensation. It is presumed there are few places where planing machines were not constructed before 1849, the time the renewal took effect, if the public required them. On this supposition, the extension of the patent can be of little or no benefit to the heirs of the patentee. Congress could have granted the act only upon the ground to remunerate the heirs of the inventor.
There seems to be a great mistake as to the profits of this patent. It was a valuable patent, but, as in all other cases, its value excited the rapacity of men who seek to enrich themselves by taking the property of others. The records of the courts show, that piracies were committed on this patent in every part of the country; and that to sustain it, much expenditure and labor have been required. It is stated that the sum of near two hundred thousand dollars has been thus expended to establish this patent. Congress have extended many patents; in some instances conditions have been imposed, in others, the franchise has been extended unconditionally. Now, where the patent is extended by act of Congress, without conditions, I am unable to perceive how the court can impose conditions. Such an act would be legislation, and not construction.
By the act of the 15th February, 1847, the patent of Thomas Blanchard, for cutting irregular forms out of wood, brass, or iron, was extended for fourteen years, from the 20th of January, 1848: 'Provided that such extension shall enure to the use and benefit of the said Thomas Blanchard, his executors and administrators and to no other persons whomsoever, except that a bon a fide assignee of the invention, by virtue of an assignment from the patentee heretofore made, shall have the benefit of this act, upon just, reasonable, and equitable terms, according to his interest therein. And if the said Thomas Blanchard, his executors or administrators, cannot agree with such assignee, the terms shall be ascertained and determined by the Circuit Court of the United States for the district in which such assignee resides, to be decreed upon a bill to be filed by such assignee for that purpose. And provided further, that no assignee shall have the benefit of this act unless he shall, within ninety days from its passage, agree with the said Thomas Blanchard as to the consideration upon which he is to have it, or file his bill,' &c.
Every one must perceive the justice and propriety of this act; under the decision now given, the assignee of Blanchard would have had the benefit of the extension without paying for it. This act, extending Blanchard's patent, was passed two years after the decision of this court in Wilson v. Rousseau, which, under the act of 1836, gave the benefit of the extension to the assignee. This must have been known to Congress, and yet they deemed a special provision in behalf of the assignee necessary. This act, and several others of a similar character, cannot fail to convince every one that Congress did not suppose that the courts have power to annex a condition to a legislative grant.
In the case of Evans v. Jordan and Morehead, (9 Cranch, 199,) this court held, that the act of January, 1808, for the relief of Oliver Evans, does not authorize those who erected their machinery between the expiration of their old patents and the issuing of the new one, to use it after the issuing of the latter.
The above act extended the patent fourteen years, 'provided that no person who may have heretofore paid the said Oliver Evans for license to use the said improvements, shall be obliged to renew said license or be subject to damages for not renewing the same; and provided also, that no person who shall have used the said improvements, or have erected the same for use, before the issuing of the said patent, shall be liable to damages therefor.'
This was a much stronger case for equitable considerations than the one before us. Evans's patent had expired. His improvements were free to the public, and they were adopted by the defendants before he made application to Congress for a renewal of his patent. I will cite the reasoning of the Supreme Court on that case. 'The language,' they say, 'of this last proviso is so precise, and so entirely free from all ambiguity, that it is difficult for any course of reasoning to shed light upon its meaning. It protects against any claim for damages which Evans might make, those who have used his improvements, or who may have erected them for use, prior to the issuing of his patent under this law. The protection is limited to acts done prior to another act thereafter to be performed, to wit, the issuing of the patent. To extend it, by construction, to acts which might be done subsequent to the issuing of the patent, would be to make, not to interpret, the law.' 'The injustice of denying to the defendants the use of machinery which they had erected after the expiration of Evans's first patent, and prior to the passage of this law, has been strongly urged as a reason why the words of this proviso should be so construed as to have a prospective operation. But it should be recollected that the right of the plaintiff to recover damages for using his improvement after the issuing of his patent, under this law although it had been erected prior thereto, arises not under this law, but under the general law of the 21st of February, 1793. The provisos in this law profess to protect, against the operation of the general law, three classes of persons-those who had paid Evans for a license prior to the passage of the law; those who may have used his improvements; and those who may have erected them for use before the issuing of the patent.'
And the court say, 'The legislature might have proceeded still further, by providing a shield for persons standing in the situation of these defendants. It is believed that the reasonableness of such a provision could have been questioned by no one. But the legislature have not thought proper to extend the protection of these provisos beyond the issuing of the patent under that law; and this court would transgress the limits of the judicial power by an attempt to supply, by construction, this supposed omission of the legislature. The argument founded upon the hardship of this and similar cases, would be entitled to great weight if the words of this proviso were obscure and open to construction. But considerations of this nature can never sanction a construction at variance with the manifest meaning of the legislature, expressed in plain and an unambiguous language.'
The above views do not conflict with the opinion of the court in Evans v. Eaton, 3 Wheat. 454. In that case the court say, 'Some doubts have been entertained respecting the jurisdiction of the courts of the United States, as both the plaintiff and defendants are citizens of the same State. The fifth section of the act to promote the progress of useful arts, which gives to every patentee a right to sue in a Circuit Court of the United States, in case his rights be violated, is repealed by the third section of the act of 1800, which gives the action in the Circuit Court of the United States where a patent is granted, 'pursuant' to that act, or to the act for the promotion of useful arts. This patent, it has been said, is granted, not in pursuance of either of those acts, but in pursuance of the act 'for the relief of Oliver Evans.' But this court is of opinion, that the act for the relief of Oliver Evans, is ingrafted on the general act for the promotion of useful arts, and that the patent is issued in pursuance of both. The jurisdiction of the court is therefore sustained.'
There can be no question that the special law extending the grant, as to its validity, is subject to the general patent law. The right was intended to be exclusive, if it be established that Evans was the original inventor of the improvements claimed, and such improvements were stated with the necessary precision. And also that it came under the class of cases on which suit could be brought in the courts of the United States, without regard to the citizenship of the parties. But it could not have been intended to apply to any contract subsequent to the patent, and it could only be held to embrace those general provisions of the patent law which relate to the validity of the patent. Under the act of Congress, a specification was necessarily filed, and it seems to be the practice to issue a patent under the act. This, it appears to me, is unnecessary, as the grant in the act is sufficient. But the schedule is necessary to show the nature and extent of the claim, and these must be sustained on those principles which apply to patents generally.
To give any other construction to the above remarks of the court, would be in direct contradiction to the language used, and the principle decided, in the case above cited from Cranch. In fact, the remark that the relief of Evans was ingrafted on the general law, was made in reference to the jurisdiction of the court, and cannot be extended beyond that and other questions, in relation to the validity of the patent.
This argument of the court, in Evans v. Jordan, applies with all its force and authority to the case before us; and I need only say it was the language of Marshall, of Story, of Washington, and of the other Judges of the court, except Judge Todd, who appears to have been absent. I can add nothing to the weight of the argument; but I will proceed to name the Judges of this court who have given opinions opposed to the decision of this case by four of my brethren.