Pentlarge v. Beeston. Judgment is rendered for the plaintiff, for $880 26, with interest from March 1st, 1879, with costs. E. D. McCarthy, for the plaintiff. J. E. Develin, for the defendant. RAFAEL PENTLARGE v8. WILLIAM R. BEESTON AND FREDERICK PENTLARGE. In a suit in equity, brought in this Court by W. against F., for the infringe ment of a patent, a compromise was made, by a contract, whereby F. admitted the validity of the patent, and consented to a decree for $2,000 and for a perpetual injunction, and, on the entry of such decree and the payment of the $2,000, W. was to grant to F. a license under the patent, with a provision therein, that, if F. should fail to pay a specified royalty, or should sell the patented article below a specified price, W. should be entitled to revoke the license, by notice. The decree was entered, the $2,000 paid, the perpetual injunction issued and served, and the license given. Afterwards W. gave notice of the revocation of the license, for an alleged violation of its terms by F. as to the selling price. F. continuing to make the patented article, W. applied for an attachment for a violation of the injunction. F. then applied for a stay of the contempt proceeding, setting forth that he had brought a suit against W. in a State Court of New York, setting up that, since he made the compromise, he had discovered an English patent earlier than that of W., for the same invention, and praying that the agreement of compromise be set aside, and that the State Court had enjoined W. from disturbing F. in making the patented article: Held, (1.) The injunction of this Court was not made null by the granting of the license; (2.) The effect of a termination of the license would be to make that injunction available; (3.) The contempt proceeding ought to be stayed until a determination of the suit in the State Court. (Before BENEDICT, J., Eastern District of New York, April 18th, 1880.) Pentlarge v. Beeston, BENEDICT, J. This case comes before the Court upon a motion on the part of the defendants for the stay of a proceeding instituted by the plaintiff, in this Court, to punish the defendants for contempt, because of a violation by them of a perpetual injunction, whereby they were restrained from making a certain form of bungs for casks, described in a patent issued to the plaintiff and known as reissue No. 5,937. Of the many proceedings had in this Court, between these parties, arising out of this patent, the following must be mentioned, in order to an understanding of the questions presented by this motion. In April, 1877, the plaintiff filed his bill, in this Court, against the above-named defendants, in which he set forth the issuing of the said patent and the infringement thereof by the defendants, and prayed to be awarded damages for said infringement, and a perpetual injunction to restrain the defendants from using his invention in the future. After issue had been joined in that action, and on the 3d of January, 1878, an agreement of compromise was entered into between the plaintiff, on the one side, and the defendants, on the other, in which it was provided, among other things, (1), that the defendants should admit the validity of the plaintiff's patent, and his exclusive right to the invention therein described, and that the defendants should cease infringing upon his rights as sole owner of the said invention; (2), that the defendants should consent to a final decree in this action, awarding the plaintiff the sum of $2,000 for his damages by reason of past infringements, and directing that the defendants be perpetually enjoined from using the said invention in the future; (3), that, upon the entry of such a decree, and the payment of the damages agreed on, the plaintiff should grant to the defendants, and the defendants should accept, a license to use the said invention. The terms of the license were particularly specified in this agreement of compromise, and one of its provisions is, that, in case of a failure of the defendants to pay the royalty specified therein, or maintain the selling price of the bungs at the agreed rate, the plaintiff should be entitled to revoke the license, by giving Pentlarge v. Beeston. written notice of revocation to the defendants. In pursuance of this written contract between the parties, a final decree was entered, in this action, according to the prayer of the bill, and awarding the plaintiff $2,000 for his damages, and directing the issue of a perpetual injunction, forbidding the use of the said invention by the defendants. Upon the entry of such decree, the defendants paid the damages and costs, and received from the plaintiff a license to use the invention, as provided in the agreement of compromise. Under this license, the defendants continued to manufacture bungs of the form described in the plaintiff's patent, until July 5th, 1879, when the plaintiff gave notice of revocation of the license, upon the ground that it had been violated by the defendants, by selling bungs at less than the prescribed price. The defendants disregarded this notice of revocation of the license, and continued to use the plaintiff's invention. Thereupon, the plaintiff applied to this Court for an attachment against them, to enforce their obedience to the perpetual injunction theretofore issued out of this Court, according to the direction in the final decree herein. A reference was thereupon ordered, to take proofs respecting the acts charged upon the defendants, and also respecting the circumstances under which the notice of revocation of the license had been given. Pending that reference, the defendants make the present application, that all further proceedings to punish them for contempt be stayed. In support of this application, it is, first, contended, that the perpetual injunction was rendered of no effect by the granting of the license. But, it seems plain, that the granting of a license by the plaintiff could not deprive of vitality a writ of injunction issued by the Court in pursuance of its final decree. In the absence of any order of the Court to recall the writ, or suspend its operation, I cannot doubt that it still remains alive, and affords foundation for a commitment of the defendants, if equity requires such action on the part of the Court. Perpetual injunctions are founded on the equity of relieving a man from the necessity of bringing ac Pentlarge v. Beeston. tion after action. (Kerr on Injunctions, p. 44.) The operation of such an injunction may be suspended, for a given time, by the action of the Court. (Id., p. 47.) But, unless suspended or recalled by the Court, a perpetual injunction, issued upon final decree, continues in existence and may be enforced at any time. The real question raised by the license is not as to the power of the Court to compel obedience to the injunction, but whether the plaintiff has not, by granting the license, acquiesced in the breach of the injunction, and so deprived himself of the right to demand a commitment of the defendants. (Mills v. Cobby, 1 Merivale, 3; Kerr on Injunctions, p. 578.) Upon this question, it may be said, that, if the understanding between the parties had been that the injunction should be superseded, there would be little difficulty in holding that the plaintiff had waived his right to demand a commitment of the defendants, notwithstanding their omission to apply for a suspension of the injunction by the Court. But, such could not have been the intention of these parties. The license forms part of the agreement of compromise of January 3d, 1878, made prior to the entry of the final decree. That agreement provides, in express terms, not only for the license, but for a final decree and a perpetual injunction. The careful provision, in this contract, for the issuing of a perpetual injunction, forbids the conclusion that it was intended that the injunction, when issued, should be forever inoperative and of no avail to the plaintiff. To suppose such an intention is to suppose that the provision for a perpetual injunction was intended to be vain words, without meaning or effect. Moreover, the acts of the parties are not in harmony with such an understanding, for, not only was a final decree directing a perpetual injunction entered upon notice, without objection, but the writ of injunction was actually issued in pursuance of the decree and served upon the defendants by the marshal, all without objection or question by the defendants. The only understanding, consistent with the terms of the compromise and the acts of the parties is, that it was intended that the plaint Pentlarge v. Beeston, iff should make no complaint respecting the disobedience of the injunction during the existence of the license, but that, in case of a termination of the license, the injunction should be available to the plaintiff for the protection of his rights as fixed by the final decree. The next position taken by the defendants is, that the plaintiff himself was the first to break the agreement respecting the price at which the bungs were to be sold, and that the notice of revocation was not given in accordance with the terms of the license, or because of any substantial violation of the license by the defendants, but for the purpose of compelling the defendants to buy the plaintiff's patent. If the defendants were now insisting upon their right to the license, there might be a question whether it would be competent for the Court to pass on the effect of the notice of revocation, upon a motion to attach the defendants for contempt. Although, in this instance, the license is in writing, and no controversy exists as to its terms, the remarks of the Supreme Court in Hartell v. Tilghman, (99 U. S., 556,) are calculated to render it doubtful whether, in the absence of a termination of the license by mutual agreement or final decree, a revocation of the license could be held to have been effected by the notice given. But, the difficulty with the defendants' position is, that they now deny the plaintiff's power to grant a license, and assert a right to use the invention described in the plaintiff's patent without regard to license, and, in fact, are now using that invention under a claim of right outside of the license. So long as the defendants maintain their present attitude in regard to the plaintiff's patent, the circumstances attending the notice of revocation of the license, as well as the effect of that notice, are wholly immaterial. The next position taken by the defendants is, that they have become entitled to have the agreement of compromise set aside, because of the discovery of a fact of which they were ignorant at the time of entering into that agreement, viz., that there was in existence, prior to the date of the plaintiff's invention, an English patent issued to one Taylor, |