U.S. Supreme Court
Wade v. Metcalf, 129 U.S. 202 (1889)
Wade v. Metcalf
Argued January 10, 1889
Decided January 21, 1889
129 U.S. 202
Under Rev.Stat. § 4899, a specific patentable machine, constructed with the knowledge and consent of the inventor before his application for a patent, is set free from the monopoly of the patent in the hands of everyone, and therefore, if constructed with the inventor's knowledge and consent before his application for a patent by a partnership of which he is a member, may be used by his co-partners after the dissolution of the partnership, although the agreement of dissolution provides that nothing therein contained shall operate as an assent to such use, or shall lessen or impair any rights which they may have to such use.
This was a bill in equity filed December 4, 1880, by William W. Wade, a citizen of Massachusetts, against Henry B. Metcalf, a citizen of Rhode Island, and William McCleery, a citizen of Massachusetts, alleging that letters patent, numbered 228,233, granted to the plaintiff June 1, 1880, upon his application filed July 26, 1879, for improvements in machines chanroblesvirtualawlibrary
for making buttons, had been infringed by the defendants' use of forty-eight machines embodying such improvements. At the hearing upon pleadings and proofs, the case, so far as it is material to be stated, appeared to be as follows:
The parties to this suit, owning earlier patents for improvements in buttons, were in partnership in the business of making and selling buttons, under the name of the Boston Button Company, from January, 1875, until the dissolution of the partnership in October, 1880. By the co-partnership agreement, certain salaries were to be paid to the plaintiff for improving and developing the machinery, to the defendant Metcalf for assistance in financial matters, and to the defendant McCleery for general superintendence, and the profits of the business were to belong one-half to Metcalf and one-fourth each to the plaintiff and McCleery. The forty-eight machines, with the improvements in question, were constructed by the partnership with the knowledge and consent of the plaintiff before the application for the patent sued on, and were used by the partnership during its continuance and by the defendants after its dissolution. The partnership was dissolved October 30, 1880, by an agreement in writing executed by the three partners, the terms of which were as follows:
"First. It is agreed that the firm composed of said Metcalf, McCleery and Wade, and doing business under the style of the Boston Button Company, shall be this day dissolved."
"Second. The said William W. Wade, in consideration of the payment to him of the sum of twelve thousand dollars by the said Metcalf and McCleery, receipt of which is hereby acknowledged, hereby sells and conveys to the said Metcalf and McCleery all his interest in the property and assets of every name and nature of said firm of the Boston Button Company, together with the goodwill of the same, with authority to use his name if necessary in the premises, saving him harmless from all cost in the same."
"And whereas certain machines, forty-eight in number, with a certain improvement thereon, manufactured by said firm have been and are now in use by said firm, and the same Metcalf and McCleery claim the right as members of said
firm, by virtue of the manufacture and use by said firm of said machines with said improvements, to continue such use, and the said Wade reserves the right to deny such claim,"
"Therefore nothing in this sale and conveyance shall operate as an assent on the part of said Wade to the right to use said improvements upon said machines or as granting any rights for such use other than said Metcalf and McCleery now have, whatever they may be, and nothing in this reservation shall be construed to lessen or impair any rights which the said Metcalf and McCleery may have to such use."
"It being further understood that each party shall have the right to manufacture and use machines under patents for improvements in buttons, one dated March 23, 1869, and numbered 88,099, and one dated April 27, 1869, and numbered 89,450; but neither party shall vend to others the right to use or manufacture under said patents without mutual consent, except as the same may be necessary in the reorganization or liquidation of their own business."
"The said Metcalf and McCleery hereby assume the payment of the debts of said Boston button Company, and agree to indemnify and save harmless the said Wade therefrom."
The Circuit Court dismissed the bill. 16 F.1d 0. The plaintiff appealed to this Court.