express words, but simply by inference to be founded on the strict interpretation of the words "money or money's worth"? It is impossible to foresee the extent of the evils that would flow from such a construction, that "money and money's worth" is not to include the consideration of marriage, contrary to all principle, and contrary to every previous decision both at law and in equity; and this on a statute where the words "money and money's worth" are to be construed most liberally for the subject. But the argument in this case goes much further; for her dower, freebench and thirds are relinquished by the lady as an additional consideration. Surely, no one can argue that dower, freebench and a widow's right to one-third of the personal estate of her husband on intestacy are matters not worth money.

Many cases were cited, but none of them have a very material bearing on this subject. As far as they go they seem indirectly to oppose the contention on the part of the Crown; but, in truth, as far as I have been able to judge, this case is untouched by the decision of any reported case. Whether

that arises from the circumstance that the point has not been contested before, I am unable to say; but I must on the present state of facts express my unqualified opinion that the words of the clause itself exactly cover this case, and that I observe nothing in the rest of the statute to prejudice or affect that construction. And, even if I did, I should rather abide by the observations of Lord Tenterden in The King v. the Inhabitants of Barham (4), who observes, "Our decision may perhaps in this particular case operate to defeat the object of the statute; but it is better to abide by this consequence than to put upon it a construction not warranted by the words of the act in order to give effect to what we may suppose to have been the intention of the legislature." I repeat, however, that I see nothing in this act to require the application of the principle so laid down by Lord Tenterden. My opinion is, that no succession duty is payable to the Crown under the statute of the 16 & 17 Vict. c. 51, in respect of these two annuity charges,

(4) 8 B. & C. 99; s. c. 6 Law J. Rep. M.C. 78.

amounting together to 1,5007. As I have decided this case solely on the effect of the 17th section, I have thought it unnecessary to express any opinion on the construction of the other clauses on which much argument was addressed to me. It is sufficient for me to express my opinion that the 17th section applies in express terms, and that this appears to be confirmed by the general scope and spirit of the act.

Generally, costs are not given against the Crown, and I am not disposed to do so in this case. The costs of all parties, except those of the Commissioners of Inland Revenue, must be paid out of the estate.

Mr. Malins moved to dissolve an injunction which had been obtained, ex parte, on the 8th of May 1863, upon the ground that when the order for the injunction was made the office-copy of the affidavit in support of it had not been delivered out of the office of the clerk of records and writs. He referred toJackson v. Cassidy, 10 Sim. 326; s. c. 10 Law J. Rep. (N.S.) Chanc. 356. The Attorney General v. Lewis, 8 Beav. 179.

Mr. Bacon and Mr. Hardy, for the plaintiffs.

STUART, V.C. said that the authorities referred to were conclusive upon the point, and made an order dissolving the injunction, with costs.

[IN THE HOUSE OF LORDS.]

1863.

March 6, 13.{

CROSSLEY AND OTHERS v.
DIXON.

Patent Licence to Use-Estoppel.

The licensee under a patentee is estopped from disputing the validity of the patent during the continuance of the licence.

The appellants were the owners of patents for the manufacture of carpets. The respondent applied for a licence to use the patents, and it was agreed that certain machines, embodying the inventions of the appellants, should be prepared under their superintendence, the respondent paying for the machines, and also paying certain agreed royalties upon the carpets manufactured therewith. This agreement was acted upon, and whilst being acted upon the respondent obtained, from a different quarter, other machines, which also embodied the appellants' inventions, and used these machines as well as those supplied by the appellants. The appellants filed a bill in Chancery for an account of royalties in respect of the user of both sets of machines, whereupon the respondent, by way of defence to the appellants' claims in respect of the machines not obtained from them, disputed the validity of the appellants' patents:-Held, that the agreement constituted the respondent a licensee of the appellants, and that, so long as he thought fit to claim the benefit of the agreement in respect of the machines supplied by the appellants, he was estopped from denying the validity of the patents, and must pay royalties in respect of the user of both sets of machines.

Held, also, that no term being stipulated for the continuance of the agreement, the respondent might, if he chose, decline to pay royalties thereunder altogether, leaving the appellants to their remedy for infringement in respect of the use of any of the machines.

This was an appeal from an order of the Lords Justices of appeal of the Court of Chancery.

The appellants were carpet-manufacturers at Halifax, carrying on business there under the style of "John Crossley & Sons," and the respondent was a carpet-manufacturer at Kidderminster, and from the year 1852 to the 24th of June 1859 was in partnership with a Mr. James Shoolbred, with whom he carried on business under the NEW SERIES, 32.-CHANC.

style of "Henry Jecks Dixon & Co." The appellants had, for the purposes of their business, become the owners of letters patent for inventions applicable to the manufacture of carpets, and it was their custom to grant licences for the use of their inventions to other manufacturers in consideration of the payment of a royalty upon the fabrics made under such licences, and they had generally supplied to their licensees looms embodying their latest inventions, and the various apparatus used therewith, as their licensees required. The appellants did not manufacture such looms themselves, but they employed certain firms of machinists at Halifax to make the looms required by their licensees, which the appellants supplied to the latter at cost price, not looking for profit upon the looms, but from the royalties payable under their licences.

About the month of March 1852, the respondent's then firm applied to the appellants for the terms of a licence to use their patent inventions for making carpets, and various communications took place between the appellants and the respondent upon the subject of such proposed licence, and it was ultimately verbally agreed, that the appellants should supply the respondent's firm with such looms as they should from time to time require from the appellants for the purpose of manufacturing Brussels and velvet pile carpets; the respondent repaying to the appellants the price of such looms. It was also agreed that upon the purchase of the looms the respondent's firm should pay to the appellants royalties upon the carpets manufactured by the aid of such looms, and should render quarterly accounts to the appellants of the goods manufactured by means of the same looms.

In pursuance of the said agreement, the appellants at various times in the years 1854, 1855, 1857 and 1858, supplied the respondent and his partner with looms for the manufacture of carpets, and they paid to the appellants the prices of the looms and the apparatus supplied therewith, and after the dissolution of his partnership, which happened in 1859, the respondent used, and up to the time of the filing of the appellants' bill in 1860, was still using forty-one of such looms, and paying royalties thereon.

4 K

In the year 1854, certain engineers and machinists at Manchester, carrying on business under the name of "Sharp, Stewart & Co.," who manufacture looms for the weaving of carpets and other pile fabrics, sent to the respondent's firm a letter, in which they stated that they purposed at once constructing a loom which should produce both quality and quantity equal to those then used, with the latest improvements, and that they would guarantee the users of it against the cost of any action for infringement of any other patent; and that it was their intention to offer this loom to carpet-manufacturers on advantageous terms. letter was communicated by the respondent's firm to the appellants, who wrote in reply that it was quite out of the question Messrs. Sharp & Co. being able to work the loom without infringing their patents, and that any one putting it into operation would not only be liable for royalty, but profits too.

This

Some further communications took place between the respondent's firm and the appellants upon the subject of the said Messrs. Sharp & Co.'s looms, the appellants repeating that the loom manufactured by Messrs. Sharp & Co. was a direct infringement on their patents. The respondent's firm, notwithstanding, between January 1856 and December 1859, purchased from Messrs. Sharp & Co. eighteen of their looms and used the same.

In 1859, the said J. Shoolbred retired from the respondent's firm, and the respondent afterwards carried on, and at the time of filing the appellants' bill was carrying on the said business, and had manufactured and was then manufacturing carpets, by means both of the looms supplied by the appellants and of the looms purchased of Messrs. Sharp & Co.

The respondent's firm for a time included in the return made to the appellants of carpets manufactured by means of the appellants' inventions, the carpets manufactured by means of the looms purchased of Messrs. Sharp & Co., without making any distinction between the carpets manufactured by the looms supplied by the appellants and by the looms supplied by Messrs. Sharp & Co.; but having ceased to make any returns of carpets made with the looms supplied by Messrs. Sharp & Co., the appel

lants, on the 23rd of August 1860, filed their bill (which was afterwards amended), against the respondent, praying a declaration that the looms purchased of Messrs. Sharp & Co., and used by the respondent, were constructed according to or upon the principle of the appellants' patent inventions, or some or one of them, and that the respondent was bound to account for and to pay royalties to the appellants in respect of all fabrics manufactured by means thereof by his said late firm or himself according to the terms of the licence granted to the respondent's late firm, and for an account of all carpets and other fabrics manufactured by the respondent's late firm, or the respondent, by means of such looms and of the royalties payable in respect thereof; or, if the Court should be of opinion that the licence granted by the appellants and acted upon by the respondent's late firm, and by the respondent, did not extend to the looms purchased of the said Messrs. Sharp & Co., that the respondent might be restrained by injunction from manufacturing any fabrics the subject of the appellants' said letters patent, or any or either of them, by means of the looms, and from infringing the appellants' patents, or any or either of them, by means of the said looms or otherwise; and for an account and payment of the profits made by the respondent's late firm and the respondent in respect of fabrics manufactured in infringement of the appellants' letters patent, and for general relief.

The respondent, by his answer, denied that the agreement as to the use of the appellants' looms, constituted him a licensee, and alleged that no licence had been granted, or agreed to be granted; and he submitted whether the appellants' letters patent were valid, and denied that he had done or agreed to do any act whereby he was estopped from questioning the validity of the appellants' patents. He also alleged that the looms purchased of Messrs. Sharp & Co. did not infringe the appellants' alleged inventions. He further submitted, that the agreement under which he purchased and made use of the looms supplied by the appellants, extended to all carpets manufactured by means of looms which embodied their inventions so far as the appellants were entitled to the exclusive use or application of such inventions, and whether such looms were

constructed by the appellants or any other person; and that no sum was due to the appellants for royalties in respect of carpets manufactured by means of the looms of Messrs. Sharp & Co., either on the footing of the agreement, or for profits in respect of such carpets.

By the decree of Vice Chancellor Wood, dated on the 13th of November 1861, it was declared that the respondent and his late partner, and the respondent since the termination of the partnership, became accountable to the appellants for the several royalties agreed to be paid to them as being royalties due in respect of the user of the several inventions secured, or purporting to be secured, by letters patent, to which the appellants were entitled, and which were employed in the construction of the several machines supplied by the appellants to the respondent and his late partner; and that the respondent and his late partner were not entitled, and that the respondent was not entitled, to use any machine in the construction of which the same inventions, or any of them, or any inventions only colourably differing therefrom, should have been employed, without paying the same royalty as if the carpets or fabrics manufactured by such user had been manufactured by a machine supplied by the appellants, and inquiries were directed as to first, which of the inventions secured or purporting to be secured by the several letters patent to which the appellants were entitled, were employed in the construction of the several machines supplied by the appellants to the respondent and his late partner; secondly, whether any, and which of such last-mentioned inventions, or any inventions only colourably differing therefrom, had been used in any and what other machines used by the respondent and his late partner, or by the respondent himself, in the manufacturing of any and what quantity of carpets or other fabrics in respect of which royalty would be payable if the same had been manufactured by the machines supplied by the appellants; and, thirdly, an account was directed on the footing of the above declarations of all monies due to the appellants in respect of royalties for carpets or other fabrics produced by the respondent and his late partner, or either of them.

The respondent appealed from this order,

and the Lords Justices, by their order dated the 22nd of February 1862, directed that the appeal should stand over, with liberty for the appellants, within two months from the date of the said order, to bring such action or actions at law as they should be advised.

From this order of the Lords Justices the present appeal was brought.

Sir Hugh Cairns and Mr. Cracknall, for the appellants, contended that it was within the jurisdiction of a Court of equity to decide the question whether the respondent was or was not a licensee of the appellants, and that the decision of the Lords Justices was wrong. That the evidence was conclusive that the appellants had granted and the respondent accepted a licence to use the inventions, the subject of the appellants patents; and that such licence was not determined. That the looms purchased of Messrs. Sharp & Co. were infringements of the appellants' patents. And that if any action was proper to be brought by the appellants, it ought to have been limited to the trial of the fact of the identity of the looms supplied by Messrs. Sharp & Co. with those supplied by the appellants. They further submitted that the respondent, being a licensee of the appellants, was estopped from questioning the validity of their letters patent.

Hall v. Conder, 2 Com. B. Rep. N.S. 22;

s. c. 26 Law J. Rep. (N.s.) C.P. 138. Taylor v. Hare, 1 Bos. & P. N.R. 260. Lawes v. Purser, 6 E. & B. 930; s. c.

26 Law J. Rep. (N.S.) Q.B. 25. Noton v. Brooks, 7 Hurl. & N. 499. Bowman v. Taylor, 2 Ad. & E. 278;

8. c. 4 Nev. & M. 264; 4 Law J. Rep. (N.8.) K.B. 58.

Mr. Rolt and Mr. W. R. Fisher, for the respondent, contended that he was not a licensee from the appellants; that the agreement was simply to pay for certain looms and the goods manufactured by them. That the respondent was not estopped from denying the validity of the appellants' patents. That the looms purchased from Messrs. Sharp & Co. were not infringements of the appellants' patents; and that the order of the Lords Justices was right. They referred to

Carpenter v. Buller, 8 Mee. & W. 209; s. c. 10 Law J. Rep. (N.S.) Exch. 393.

The appellants were not called on for a reply.

The LORD CHANCELLOR.-My Lords, the case presented to your Lordships by the present appeal is one upon which I think you will agree with me that no reasonable doubt can be entertained. The appellants are the owners of divers patents granted for improvements in the manufacture of carpets. The respondent is a carpet-manufacturer at Kidderminster. In the year 1854 the respondent applied to the appellants for the grant of a licence to use their inventions. It was ultimately agreed verbally that certain machines should be prepared and made under the superintendence of the appellants, embodying their inventions, and for which the respondent should pay, and accordingly forty-two machines were manufactured under the superintendence of the appellants for the use of the respondent. The respondent paid for those machines, and he also agreed to pay, and has paid, and is now paying royalties for the use of the inventions embodied in those machines. It is very material to observe that the respondent bought the machines altogether. It is not a case, therefore, in which the appellants, being the owners of machines, hired them out to the respondent, but it is a case in which the respondent according to the agreement began the transaction in question by purchasing and paying for the machines that were prepared for him under the superintendence of the appellants. It consequently follows that the royalties which have been regularly paid eo nomine by the respondent must of necessity have been paid by the one party and received by the other in respect of the right to use the patent inventions that were embodied in the machines so supplied. That agreement subsists at the present moment, and the respondent is using the machines which he so bought and is recognizing his relation as licensee of the appellants by paying the appellants the royalty, a payment that can be attributed to nothing but to the patent rights in respect of which these machines have been constructed,

Now, the first contention on the part of the respondent is this, that notwithstanding that relation continues, he is at liberty to deny the title of the appellants to the

ownership of the inventions for the use of which he is thus paying a royalty. We are all very well aware that that is a proposi tion inconsistent with the law, as it would be equally inconsistent with the ordinary reason and good sense of mankind. But then, it appears that the respondent, being at liberty in point of fact under the agreement to have made for him as many machines as he pleased in conformity with the appellants' patents so long as he paid to the appellants a royalty for their use, has obtained from a different quarter other machines which are apparently, according to the evidence, identical in construction and principle with the machines supplied to him by the appellants. And in respect of the user of these latter machines, it is contended on the part of the respondent that he is at liberty to affirm that those machines are no invasion of the appellants' patent: First, because he denies the validity of the patent and secondly, because he affirms that the machines are different in construction and principle from the machines so made and supplied to him by the appellants.

Now, assuming that the second set of machines are identical in construction with the first, it would be impossible to hold that the obligation, not to deny the appellants' patent right, would not extend to the second set of machines so long as he continues to use the first set of machines, which is the fact at present. That is equally a question of law, and a question of ordinary principle. It is a question upon which I apprehend your Lordships will have no doubt, namely, that the obligation to recognize and admit the validity of the patent right of which the licensor has granted the use in the one case, extends also to the other set of machines, assuming them to be identical in point of construction. Now, upon the subject of the identity of the two sets of machines, the whole of the evidence which has been adduced in the cause is in reality in favour of the proposition of the appellants. But that is a point upon which it is unnecessary for your Lordships to come to any conclusion, because that has been made the subject of an inquiry in the decree of the Vice Chancellor. The only question of fact, therefore, namely, the identity of the two sets of machines, is