Opinion
No. 4082.
December 2, 1924.
Appeal from the District Court of the United States for the Eastern Division of the Northern District of Ohio; D.C. Westenhaver, Judge.
Chas. E. Brock and Hull, Brock West, all of Cleveland, Ohio, for appellant.
Kelley, David Cottrell, of Cleveland, Ohio, for American Shipbuilding Co. Fay, Oberlin Fay, Jesse B. Fay, and Horace B. Fay, all of Cleveland, Ohio, for Douglas Brews.
Before DENISON, MACK, and DONAHUE, Circuit Judges.
The defendant Shipbuilding Company had a written license from the defendant patentee to use the invention for a specified purpose. It proceeded to use the invention for a purpose which might or might not be within its license, according to the true construction. It notified the patentee, who approved, and accepted royalty thereon. While this course of business was continuing, the plaintiff took an exclusive license under the same patent, but expressly subject to the defendant's existing rights. Plaintiff did not know the extent of these rights, except as shown by the written license, and at that time made no inquiry. Some months later it did inquire from the patentee and from the defendant whether defendant had any other rights under the patent, and both replied in the negative. Claiming that defendant company's continued use in the broader sense was not within its written license, properly construed, the plaintiff brought this infringement suit, and joined the patentee as defendant. Defendant company's rights, as against the patentee, to continue the use in question, cannot be doubted. It is not important whether their mutual conduct was a construction of their ambiguous contract, or whether it was the granting of a further and oral license. Plaintiff's license was expressly subject to the defendant company's rights, whatever they were. The answers which both defendants made to the plaintiff's inquiries could not change the actual situation, unless on the theory of an estoppel; and plainly there could be no estoppel by answer to plaintiff's question, when plaintiff's only action in the matter had been finished before it made the inquiry. The decree of the court below, dismissing the bill, is affirmed.