Beaumon v. Kittle Manufacturing Co.

EDMONDS, J., pro tem. Appellant is the licensee of a patent for a signaling device for automobiles, under a contract entered into in 1927 with the respondent, who is the inventor and patentee. Respondent sued in another action for $2,500 as royalty for the year 1928, and secured judgment for that amount against the appellant. On appeal the judgment was affirmed and the rights of the respective parties under the contract determined. (See Beaumon v. Kittle Mfg. Co., 122 Cal. App. 547 [10 Pac. (2d) 508].) In the present action the respondent sued for royalty of $2,500 per annum alleged to be due for the years 1929 to 1932, inclusive. The appellant pleaded and proved that respondent in January, 1930, entered into a contract with one Davis under which he made certain agreements concerning the patent rights licensed to the appellant. Appellant contends that by entering into the contract with Davis, respondent breached the agree[650]ment theretofore made with it. Respondent had judgment for $10,000 and the only point presented on appeal concerns the operation and effect of the Davis contract upon the one made by the respondent with appellant.

By the license agreement sued upon, respondent, as licensor, gave to the appellant, as licensee, the sole and exclusive right to manufacture, use and sell the patented direction signal for the full term of the patent. It was stipulated that the appellant has never manufactured any of the patented articles, the judgment against it being for the minimum royalty provided for by the license agreement. Appellant contends that plaintiff under his later contract with Davis made an assignment of an interest in the patent, and thereby divested himself of the means to insure the monopoly he granted to the appellant under its license agreement.

Giving the Davis contract all of the effect appellant claims for it, appellant’s rights have not been interfered with. “An assignee of a patent takes it subject to all prior licenses given by former owners, even though such licenses were oral. ’ ’ (Amdur, Patent Law and Practice, p. 542.) “It is true that in some ways the rule seems anomalous; but it has passed into one of propertj' clearly understood, and should not be interfered with, except, after due consideration, by statute. The present is an instance of how a dishonest inventor can work "injury to several innocent parties; but, w'hen defendant took its assignment, it had long passed into the text-books that such an assignee acquired title subject to prior licenses of which the assignee must inform himself as best he can, and at his own risk. (Rob. Pat., sec. 817; Walker, [5th ed.] secs. 303, 304.) ” (Keystone Type Foundry v. Fastpress Co., 272 Fed. 242, 245.)