considered as one. Indeed, the decision of the Court of Appeals leads almost to this conclusion. However these things may be, there is clearer ground for the conclusion we have stated. One of the claims, No. 11, of the Robinson patent, as first issued, and a claim which it must be presumed was an essential part of the monopoly which the parties were contracting about, was first made by Copeland in his application that went into the second interference and never was present in Robinson's application until he annexed it by right of conquest after the second interference was finished. In addition to this, claim 9, which is, from most points of view if not from all, the broadest claim of the patent and which forms Robinson's chief reliance in the present suit as a basis of his claim for royalty, never was present in his application until after this second interference was finished. This claim was one of the four inserted by the attorneys during the two weeks' delay allowed after Robinson's personal orders that the patent issue at once. Certainly only the clearest and most unambiguous language could justify the accruing of royalty before the second or rehearing interference was finished and the patent for the first time took substantially its final shape; and, instead of this being clear and unambiguous, the natural inferences are all the other way. If there were doubt about this, it would be solved by Robinson's letter of May 14, 1913, in which he says:

"Now it is pointed out that the 'final award of priority in favor of Robinson in interference proceedings in the matter of the application of October 8, 1897,' was the issue of the decision of the Court of Appeals in Interference No. 33,840, dated and decided January 6, 1913, awarding priority to Robinson. That finished the interference, and any delay since that time has been in the hands of counsel. It seems clear, therefore, that the accumulation of royalty must be computed from that date."

9. We have found that Robinson was in fault for not executing or tendering the formal exclusive license. He should have done so, when the original patent issued, and when his only claimed reason to the contrary disappeared. If it be thought that the almost immediate application for reissue postponed this duty, then he should have done so. upon the reissue. At the latest, he should have distinctly made such tender upon filing this bill, instead of relying on the mistaken theory that the formal license was unnecessary. At the same time, we have found action by the company, continuing up until after the filing of the bill, such that it cannot be permitted to rely upon the lack of this formal license to destroy its contract obligations to Robinson. The question is whether, by permitting the exclusive license to be given now, we can restore substantially the situation which would have existed if it had been given when the patent issued or tendered when the bill was filed, and can put the company in substantially the same shape as if it had then, as was its duty to do, accepted the license and proceeded with the contract. It may be that changes in the manufacturing or trade. conditions during the interval, impair such restoration, but the burden was upon the company to make proof to this effect, and it has not done so.

The record indicates only one difficulty. Paragraph 9 of the contract provides for the company the only escape from the continued payment of royalties (unless by paragraph 22). If the formal license had been

158 C.C.A.-3

delivered when the patent issued, and the company had proceeded under the contract, and if it had been of the opinion, as it now is, that the patent was invalid, it would at once have begun or caused to be begun some suit which would lead to a judicial determination and so either establish the patent or end the royalties. We make allowance for the reissue delay and give the company the benefit of whatever doubts there ought to be, if we assume that, acting with diligence, it could have secured such judicial determination within two years from the original issue, or by July 8, 1915. It is somewhat arbitrary, but essentially fair to assume that if the royalties ought to terminate under paragraph 9, the necessary judgment would have been pronounced as early as that date, that it would not have occurred earlier, that, until that time, the liability of the company for the contract royalty was inevitable, but that the delay from that time to this in instituting proceedings which may lead to that result has been so far the result of Robinson's default and of the confusion and uncertainty thereby created that he must allow further reasonable opportunity for that test, before exacting a further performance of the contract.

After the suit was commenced, the company seems to have executed a transfer to Robinson of everything that had been assigned to it. This was never completed by delivery and acceptance, but the record indicates that it may have been recorded in the Patent Office; if so, Robinson should at once execute and record a sufficient release and quitclaim back to the company of everything so apparently transferred. At the same time and within 30 days after the mandate goes down, he should execute and deliver to the company, or deposit with the clerk of the court below for delivery to the company, an exclusive license, under the reissue patent, but otherwise in the form prepared and tendered to him on July 8, 1908. Thereupon, the company must pay to him the prescribed minimum royalties for ten quarters commencing with the quarterly payment due April 6, 1913, and ending with that due July 6, 1915, and with interest at 6 per cent. from the date of the reissue, on payments due theretofore, and with interest at the same rate from the date of each maturity on payments due thereafter. There should also be an accounting, if desired, to ascertain whether more than the minimum accrued during these ten quarters, and, if so, the excess amount should be paid as soon as it is fixed. If Robinson should fail to execute and record the reassignment (if by record of assignment to him this has become necessary) or to execute and deliver the license, his bill will be dismissed. If the company should fail for 30 days after the delivery of the license to pay the minimum royalty for the ten quarters and interest, it will lose its right to any further consideration, and it must pay at once, also, the remainder of the $20,000 agreed minimum, with interest, and be subject to the general accounting as provided in the decree appealed from. If the company does make this payment for the ten quarters, thereupon all further proceedings (except the accounting as to the excess in these ten quarters) should be stayed for 60 days. Within this period, the company may institute such proceedings as it may be advised, for the purpose of obtaining the judicial decision contemplated by paragraph 9. If it elects to bring an infringement suit against another manufacturer, Robinson must join therein as

provided by paragraph 18. So long as the selected proceeding is prosecuted with the utmost diligence, the stay may continue. If, upon the final determination of such proceeding the patent is found invalid within the meaning of paragraph 9, the company will be excused from all payments, except the royalty (both minimum and excess) for the first ten quarters. Lacking such result, the stay will expire and the accounting will proceed in the court below for all the intervening period.. All time limits herein mentioned are subject to modification, in the discretion of the court below.

[7] We see no reason why the company, if it so elects, may not proceed in this cause to obtain the decree which shall establish the validity of the patent or the contrary. The general rule that a licensee may not dispute the validity of the patent must yield, as far as necessary, to an express provision providing for a decree of invalidity as the means of ending the contract. Probably the rendering of such a judgment in a suit prosecuted by Robinson and the company against a third party infringing was the thing specifically in the mind of both parties; but if the licensee, under a contract like this, is later convinced that the patent is invalid, suit in a proper court brought by the licensee against the licensor is the most direct and sure way to get the question decided, without the suspicions of collusion sure to arise if the licensee were prosecuting a suit which it brought against a stranger and in which it wished to fail. If this may be done by direct suit, it surely may be done by answer, under the provisions of general equity rule 30 (198 Fed. xxvi, 115 C. C. A. xxvi), in a suit in the United States District Court.

The company, in its answer and amendments thereto in this case, laid all foundation for obtaining such a judgment, except that it did not pray therefor. It set up the invalidity of the patent, not as a basis for obtaining a decree terminating the contract, which it might have done, but as a basis for defending against current liability under the contract, which it could not do. The election which we now permit to institute proceedings looking to such a judgment may be exercised (if defendant desires) by reforming its answer in this cause.

The proper interpretation of "null and void" in paragraph 8, we cannot now consider. Whether this phrase means utterly void as to all claims, or whether it means void as to those claims which might purport to secure the monopoly contemplated by the parties, is a question to be later decided by the tribunal to which it is presented.

The decree below must be reversed, and the case remanded for proceedings in accordance with this opinion. The appellant will recover costs in this court. Costs in the court below will be in the discretion of that court.

On Motion for Rehearing.

PER CURIAM. On application for rehearing, the Miami Company, for the first time, brings to our attention the claim that Robinson accepted the retransfer to him of everything which the company had received from him, and to which attempted retransfer the opinion refers. This suit was commenced on July 13, 1914. On November 2, 1914, by an amendment to the answer, the defendant alleged that it had renounced the contract by notification to Robinson in a letter dated

and mailed on September 29, 1914, and that the defendant had retransferred to Robinson all the patents and applications which were the subject-matter of the contract. To this Robinson replied denying that the defendant had any right to renounce the contract as claimed in the amendment. We think we rightly interpreted this record as failing to show that any retransfer to Robinson had been effectively made. We are now told that, in the court below, it was agreed between counsel that the retransfer had been completed on September 29, 1914, that Robinson's brief in the court below was upon that theory, and that the decree framed by Robinson's counsel in the court below is upon the same theory, and, for that reason, awarded only that royalty which had accrued up to September 29.

Counsel for Robinson, responding to the application for rehearing, do not concede that the transfer was made and accepted; yet we are not sure that they deny it. It may be that when the reply denied the right of the company to "renounce" the contract it contemplated only the liability already accrued. If in fact the retransfer was accepted by Robinson, either expressly or as a necessary effect of what was said and done in the court below, and if the intent and effect of the retransfer were to deprive the company of its status as licensee under the main patent, it is obvious that there could be no recovery in this suit, except for the royalties which had then accrued; but the existence and all the effect of such retransfer and acceptance cannot be decided by us upon this record. These questions must be remitted to the court below for its decision, except as hereafter stated.

It is not now apparent to us how this retransfer can affect the right to recover the royalties then already accrued; but if there are reasons which lead to such a result, the court below will be at liberty to consider them and give them due effect. We have held that the company has the right to initiate proceedings looking toward a judicial determination that the patent was invalid; but for the reasons stated in the opinion it must be assumed that its obligation to pay royalties and be considered a licensee continued at least till September 29, 1914; and it cannot be heard to question the validity of the patent as against royalties arising before that date. If, therefore, it shall be found that the company then ceased to have the rights and carry the burdens of a licensee, there will be no occasion to litigate the validity of the patent. In the event that it is so found, the decree below will require no modifications, except those resulting from the conclusion that the accruing. of royalty will begin January 6, 1913, and the recovery thereof will be upon condition that Robinson execute and deliver (instead of the exclusive license specified by the opinion) an assignment of the legal title. to and the right to recover all profits and damages that accrued from any infringement of the reissued patent by others prior to September 29, 1914, and which assignment shall provide that one-half of the net sums collected thereunder shall be paid by the company to Robinson. The other conditions specified in the opinion to attach to the execution of the decree will be inappropriate.

The application for rehearing is denied; and, except as herein provided, the conclusions of the opinion remain unmodified.

(245 Fed. 609)

O. & W. THUM CO. v. DICKINSON.

SAME v. A. K. ACKERMAN CO.

(Circuit Court of Appeals, Sixth Circuit. August 1, 1917. Petition for Rehearing Denied November 6, 1917.)

Nos. 2906, 2907.

1. TRADE-MARKS AND TRADE-NAMES

58-INFRINGEMENT.

Complainant's trade-mark for sticky fly paper, consisting of printed matter and arbitrary designs printed in black ink on the sheets, held infringed by defendant. 2. TRADE-MARKS AND TRADE-NAMES 58-INFRINGEMENT IMITATION. In testing the charge of infringement of trade-mark or of unfair competition, consideration must be given to the question whether the resemblances so far dominate the differences as to be likely to deceive ordinary purchasers; and the purchasers most to be considered are the ultimate users rather than jobbers and retailers; also the larger features of resemblances, instead of the subordinate points of differences, must control.

3. TRADE-MARKS AND TRADE-NAMES 55-INFRINGEMENT INTENT.

It is not necessary to the maintenance of a charge of infringement of trade-mark to prove a distinct intent on the part of the infringer; but it is the fact of infringement, and the consequent invasion of the good will and business of the owner of the mark, that is controlling, and the intent will be presumed.

4. TRADE-MARKS AND TRADE-NAMES 60-UNFAIR COMPETITION-IMITATION OF DRESS.

When a manufacturer has, through a particular trade dress, as by the size of the article, and of the cartons and cases in which it is marketed, so identified his product as to indicate that it is his, every principle of fair dealing and fair trade forbids the adoption by a subsequent competitor of the same dress, without otherwise effectively distinguishing it from that of the first user.

5. TRADE-MARKS AND TRADE-NAMES 70(4)—UNFAIR COMPETITION-IMITATION OF DRESS.

Defendant held chargeable with unfair competition in imitating in size and marking the sheets of fly paper made by complainant, an older manufacturer, with an established business and reputation, and also of the cartons and cases in which the same was marketed, to such extent as to justify the inference that the similarity was intentional, and for the purpose of deceiving purchasers.

6. TRADE-MARKS AND TRADE-NAMES 93(3)-SUIT FOR UNFAIR COMPETITION -PROOF OF INTENT.

To establish unfair competition, it is not necessary to prove intent by direct evidence, where it is clearly to be inferred from circumstances. 7. MONOPOLIES 21-VIOLATION-DEFENSE TO SUIT FOR INFRINGEMENT.

A suit for infringement of trade-mark and unfair competition cannot be defended on the ground that complainant has violated the anti-trust laws.

8. TRADE-MARKS AND TRADE-NAMES 86-SUIT FOR INFRINGEMENT-LACHES. Where the action of a defendant in imitating the trade-marks and trade dress of complainant was progressive, new features of similarity being added from time to time, complainant is not chargeable with laches in delaying to bring suit, which deprives it of the right to an injunction, although the delay may affect its right to an accounting for the full period.

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