DUNLOP PNEUMATIC TYRE COMPANY, LD.V. NORTH BRITISH RUBBER COMPANY, LD
Reports of Patent Design and Trade Mark Cases
Patent. -Action for infringement.-Licence. -Construction; -" Use and 10 "exercise,."-Licence whether full or lim1'ted.-Whether acts complained of ioere covered by the licence.-Goods made abroad by third persons on behalf of Defendants.-Counterclaim for breach by Plaintiffs of aqreemeni contained in licence limiting the number of licences.-Plaintiffs settling with infringers, whether a breach of agreement.-Action dismissed.e-Uounterclaim dismissed.-15 Appeal by Plaintiffs in the action
... he action dismissed. A licence hauina been gran/ted under Bartlett's Patent relating to pneumatic tyres, the oumers of the Patent commenced an action for infringement against the licensees, alleging that certain acts of the licensees were not covered by the licence. Full licence to use and exercise the invention was 20 granted, but certain clauees of the licence, including those relating to royalties and accounts, referred only to tyres manufactured and sold by the licensees , there was also a clause prohibiting assignment or sub-licence, and a clause that the .licensees should not manufacture or sell tyres constructed according to Welch's invention, but, subject as aforesaid, should be entitled to manufacture 25 all forms ofpneumatic tyres theretofore manufactured by them under the name or title of" Clincher." The Plaintiffs contended that the Defendants had in..fringed the Patent by the importation and sale of Clincher-Michelin tyres, such importation and sale not beirtg, as the Plaintiffs aUeged, within the licence, and they also alleged that the arrangement between the Defendants and 30 Michelin & Co., of Paris, was such that the Defendants were in effect sub-licensing by guest on June 6, 2016 http://rpc.oxfordjournals.org/ Downloaded from 162 REPORTS OF PATENT, DESIGN, . : [Mar~30; 1904. Dunlop Pneumatic 'Ty.re,Oompany, Ld. v ..North British Rubber . Company, Ld. Michelin & 00. They further alleged that by the clause as to Welch's Patent the Defendants were prohibitedjrom making.any tyre under Bartlett's Patent that would also infringe Welch's Patent. The Defendants contended, on the first point, that the licencewas a general one and that they were entitled to purchase tyres from any person, and also that Michelin & Co. were manufacturing the tyres as 5 their agents; and, on the secondpoint, that an absolute licence without limitation was given to use Bartlett's invention. These points were decided as points of construction on admissions, and the Plaintiffs eubsequentiu determined to call no evidence to show that the Welch Patent was used in the tyres complained of. The licence also contained a clauseprohibiting the Plaintiffs, in events which happened, 10 from granting more than one licence besides the licence above mentioned and one other already granted. ' The Plaintiffs granted a further licence, which was assigned to the O. Oompany, and afterwards did certain acts which, the Defendants contended, were breaches by the Plaintiffs of their agreement, and the (.D efendants counterclaimed in respect of the same. Such acts consisted, as the 15 Defendants alleged, of lioensinq tyres in Paris for importation into this country, and of licensing in England tyres brought into this country by infringers by allowing the continued use of such tyres on payment of a royalty. The Plaintiffs contended that they .toere not in any way bound under the contract, which contained a special clause as to infringements, to sue for 20 infrinqement, and that in the instances complained o/they had only done what they were reasonably entitled to do in cases of infringement. Held, by Byrne, J., in the action-first, that, under the licence, the tyres sold by the Defendants must be manufactured by them, but might nevertheless be manufactured for them by a third party, and that the agreement between the Defen-25 dants and Michelin & Co. was for Michelin & Co. to make as agents for the Defendants, and,jurther, that the arranqement did not amount to a sub-licence; and, secondly, that the Defendants might manufacture according to Bartlett's Patent, and all things that they had done-preuious to the licence were to be deemed to bewithin, Bartlett's Patent, but they might not manufacture according 30 to Welch's Patent. Held, on the Oounterclaim-first, that the Defendants had failed to connect thePlaintijfs with the acts in Paris complained of; and, secondly, that, as to the acts complained of in England, they only amounted to a fair and reasonable w~y of dealing. with i,nfringers. 35 The actionand counterclaim were both dismissed 'with costs, including in the costs of the act/ion given to-the Defendants the costs of and occasioned by an applicatio.n made by the Plaintiffs to enable them to raise the point as to _Wcl~h'~_o,P~~~~t, tf)l!iq", application was allowed, and any costs thrown away in consequence of it, UJith a set-off. 40 The Plaintiffs appealed (except as tv the point with respect to Welch's Patent), .and the Dejendants served a notice that; in the. event 0/ the Court of Appeal by guest on June 6, 2016 http://rpc.oxfordjournals.org/ Downloaded from Vol. XXI., No.8.] AND TRA.DE MARK CASES.~1 63 Dunlop Pneumatic Tyre Oompany, Ld. v. North British Rubber Oompany, Ld. reversing the [udament in the action, they would ask that the J·udgment on ·the Counterclaim might be reversed; as the Plaintiffs' appeal jailed, however, the Defendants' appeal was not opened. Held, by the Court of Appeal, that the licence was a full one, not limited, as 5 the Plaintiffs contended, to "manufacture and' sale." The judqment of Byrne, J., in the action was affirmed, Stirling, L.J., expressing the opinion also that Michelin & Co. were agents oj' the Defendants as held by Byrne, J. The appeal of the Plaintiffs was disrnissed with costs, but the Plaintiffs were given any increased costs occasioned by the Defendants' appeal. 10 Pel" VAUGHAN WILLIAMS, L.J.-The words" use and exercise" in the .grant of a licence confer, in the absence of anything limiting .the construction of them, a full licence on the licensee.