be reassigned to him, whereupon he would include both the original and divisional in his license. This request was neither granted nor refused, but consideration was postponed. During all the years while the application was pending, and after the patent issued, there were occasional references by both parties to their respective positions on this subject, but there never was a positive demand for the license made as a condition of continuing the contract in force nor was there an absolute refusal to give it; but the company proceeded with the prosecution of the matter in a manner wholly inconsistent with any intention to claim forfeiture for lack of this instrument.

Robinson's original refusal to execute the license was unjustified. It amounted to saying that, although he had executed a contract in which there was neither fraud nor mutual mistake, he would not. carry it out because he had later observed that he had left open one possible door by which the other party, if so disposed, might attempt to defraud him. All must agree that to transfer the broad claims to the divisional application, for the purpose and with the effect he feared, would have been to attempt a fraud upon him of which no reputable attorney would have been guilty, which he had no reason to apprehend, and which could not have been successfully carried out. It is true that the attorneys continued Robinson's efforts to get some broad claims allowed in the divisional case, but there is no reason to think that this was with any fraudulent intention; and it is true, also, that after Robinson ousted them from management of the basic case, in June, 1913, they threatened to misuse their power over the divisional; but they never tried to do so, and the threat was measurably, if not quite, justified as a matter of self-defense against Robinson's misconduct. Further, in so far as the divisional application, in July, 1908, supported or could thereafter be made to support details of form rightly separable from the basic claims, it was within the fair intent of the parties that such divisional matter should be included in that which was being absolutely transferred to the company. The substance of the arrangement was that the company presently became absolute owner of all subsidiary inventions 2 and exclusive licensee of the basic one. The company could rightfully have insisted upon the immediate execution of the license as agreed. However, the divisional application then contained nothing which the Patent Office considered properly divisional. Whether it might thereafter be made to do so was wholly contingent and rather improbable, and there is apparently no very substantial reason why the company might not have complied with Robinson's request. Both parties were content to let the matter of reassignment to Robinson drift along. It was not important while the interference made everything contingent; and later, after the patent issued, there was no possibility that the broad claims could be transferred to the divisional, and the latter was either negligible, because there was nothing left in it, or else it belonged to the company, because containing something rightly separable from the basic appli

2 Subject to a reverter clause (paragraph 22), which is rather incomprehensible, if it is intended to apply to the inventions assigned and in the use of which by the company Robinson had no apparent interest.

cation. Probably there was nothing left, because it was allowed to die. Certainly since the patent issued, the existence of legal title in the company to the divisional application has not afforded even a plausible pretext for not executing the formal license for the basic invention.

Merely as between the parties, and until the patent issued, there was no particular necessity for the formal license nor any prejudice to the company from its nonexecution. The contract of July 8th fixed the rights of the parties; and not until the patent issued could such a formal instrument have been of any value to the company for the purpose of enabling it to license others. Any such licenses to others could not be effectively granted before the issuing of the patent, and if the company desired to make contracts that it would license others when the patent was obtained, it could make those contracts as well on the basis of the contract of July 8th as upon a more technical basis. It follows that Robinson's conduct, in not giving the formal license up to the time when the patent issued, cannot be considered a substantial or material breach which justifies the company in denying its contract liability. After the patent originally issued, the company never took the position that the failure to give the license had ended its rights and liabilities under the contract. When Robinson, in October, 1913, claimed that the company had broken the contract and forfeited all rights, and so demanded a reassignment of everything, the company responded:

"If you propose to treat the agreement as having been broken, we will be compelled to take proper steps to put us in the position we both were in prior to the date of the agreement. Has the reissue been granted?"

Robinson then dropped the subject until, in December, 1913, he demanded royalty. The attorneys for the company replied that the contract had been broken by Robinson by his personal interference in the issue of the original patent and by his application for reissue, and that, because of this repudiation by Robinson in these two particulars, they had advised the company to turn everything back to him, if certain compensations could be agreed upon; but this termination of contract rights was tentative, and based expressly on grounds other than the failure to execute the license. The company made no demand for this formal license until and unless by its letter of April 1, 1914 (after the reissue), in which it said, in reply to a further demand for royalty payments:

"Dr. Robinson's contract has not yet been executed upon his part. He has failed to execute and forward to us the exclusive license under the 1897 application, including the right to license others. Are you ready to forward that license?"

To this Robinson's attorneys replied that the original contract itself sufficiently gave the license. After further correspondence, and demands to know the number of the coaster brakes manufactured, etc., the company's attorney answered, on April 27, 1914:

"I cannot well answer the questions raised by your letter, until we ascertain from you whether you are ready to turn over to us an exclusive license under the 1897 application and in accordance with the terms of the contract."

245 F.-36

To this Robinson's attorney answered:

"If the Robinson-Miami contract is valid and in force, Dr. Robinson has certain rights thereunder, regardless of whether or not he gives the Miami Company an exclusive license under its 1897 application. I now assume that you will stand on your contention that the contract is null and void, and that the Miami Company does not intend to comply with any of the terms thereof."

Thereupon the bill of complaint was filed. It is clear enough that any breach on Robinson's part by his failure to execute the formal license, and in so far as such breach might justify repudiation of the whole contract by the company, had been waived by the company, and that, down to the date of filing the bill, it was bound to accept such license, if tendered.

In this situation, the execution of the license cannot be considered a condition precedent to the accruing of any royalty liability; but we do not think it was an immaterial condition, nor one which Robinson was not bound to perform. An essential part of what the company was buying was the right to control the situation by licensing other manufacturers (paragraph 17). It would be natural to include a provision to that effect in the formal license contemplated by paragraph 8, and this was done in the form of license drafted at the time, and to which form Robinson made no objection. It was also provided (paragraph 18) that, under the terms of this exclusive license, Robinson would join in any infringement suits which it might be necessary to bring to enforce the monopoly. It was plainly contemplated that upon the issue of the patent there should be a formal instrument given to the company, evidencing these rights, which could be placed upon record and upon the basis of which the company could deal with others without the necessity of resorting to all the conditions and complications of the original contract; and when Robinson came into a court of equity, it was his duty (as it had been since the issue) to tender to the company, before filing the bill or in the bill, such a formal exclusive license.

The bill did not allege or make such a tender, nor expressly touch this subject-matter; but the whole theory of its filing and maintenance necessarily implies that the company had received a sufficient license to satisfy the contract. It refers to the original contract as an "agreement and license"; and, taken altogether, it is a clear declaration that the company is vested with all the rights as exclusive licensee to which it was entitled under the contract. The answer, among other defenses, alleges the failure to execute the formal license, but it counts substantially upon Robinson's original refusal to do so in 1908. Although it alleges that the refusal continued down to the filing of the answer, yet it does not allege any willingness to accept, nor present any distinct theory of defense on this ground, excepting the continuing breach of the contract by the continuing effect of Robinson's original refusal; and we have seen that this original refusal was at the time immaterial and was waived by the company. In this situation, Robinson's suit should not fail merely because he had not executed the formal license nor because he did not offer to do so in his bill of complaint; but any decree in his favor based upon the contract, should be conditional upon his performance of his part thereof

in the matter of execution of this license. Such prejudice as there has been to the company for lack of earlier execution can be taken care of as hereafter indicated.

[2] 3. The next defense relates to the issue of the patent. After the delays caused by the interferences had ended in the manner hereafter stated, Robinson, asked the attorneys to have the patent issued at once. They replied that they needed some considerable time for complete study of the state of the art, in order to shape the claims broadly enough to give the desired monopoly, but not too broadly to be valid. Losing patience, he went to the Patent Office, canceled all the pending claims which had not been allowed, paid the final fee, and directed immediate issuance. Here, again, Robinson clearly broke his contract. It had been stipulated that the conduct of the application was to be under the control of the company's attorneys. This had been their reasonable demand, agreed to by Robinson. His reasons now given for his conduct do not justify it. During the years the interferences had been pending, amendments and reshaping of the claims could not be allowed. The days of time and study required to secure the most perfect formulation would have been wasted if the interference was lost, and would have become at any time unavailing by the discovery of new references. The attorneys were justified in not having made this preparation while the interferences were on hand, nor could it rightly be made in a few hours, as Robinson seemed to think. On this ground, again, the company could have refused to proceed further with the contract; but it did not take this course. Its attorneys arranged with Robinson to join in trying to recall the case from issue and get further time for amendment, and, although the Patent Office would give only two weeks the attorneys accepted this situation and co-operated with Robinson in formulating and securing four additional claims (6, 7, 8, and 9). The company was represented in the whole matter by these attorneys, and their conduct was a clear election to condone Robinson's default and continue the contract in force notwithstanding.

4. Next is the matter of reissue. After the original had been thus hastily issued through Robinson's personal act, he changed his mind and decided that the invention was not rightly protected and that the claims were quite inadequate. Accordingly, he employed another attorney, offered the original for surrender, and filed the reissue application. Here, again, his action was high-handed and an entire breach of his contract duty; but still, again, it must be held that the breach was waived. On his suggestion to the attorneys that the claims of the original were inadequate, they advised Robinson that there. should be an immediate reissue, they consulted together about the best form of claims, and there was co-operation until they learned that he had filed the application by another attorney. Their only objection then was:

"We do not know what effect the prosecution of the reissue pro se by you will have upon the contract."

In December, 1913, they complained of this conduct as a breach; but in April, 1914, they are found claiming the license, and this can

refer only to a license under the reissue. In its answer in this case, the company twice alleged Robinson's continuing fault in not giving a license under the reissue. After the answer was filed, the company again indicated a claim that the reissue constituted a breach of the contract; but this was too late. Robinson had then put the controversy into the hands of the court under a bill which committed him to that license under the reissue which the company had been asking. [3] We have the less hesitation in holding that the company cannot rely upon the taking of the reissue as a breach of the contract, because there is no reason to think that substantial prejudice to the company has resulted therefrom. It is apparent that the only complaint of the original and the only ground for reissue was the absence from the original of sufficiently broad claims; and, in this situation, it would seem that the eleven claims of the original, repeated verbatim in the reissue, are just as valid as they were in the original. The company, as the holder at the time of substantial interests in the original patent, could not be bound by any narrow construction which Robinson erroneously put upon the original claims to support his theory that a reissue was necessary; and if the broader claims of the reissue shall not be sustained, the company will be entitled to have the same construction put upon the original claims as if the reissue had not been made. It is true that such damages as might have accrued against others from infringement of the original patent before its surrender have been forever lost (Reedy v. Scott, 90 U. S. [23 Wall.] 352, 364, 23 L. Ed. 109); but the existence of such damages, in material amount, is problematical, and their possible existence is a thing which the company must have taken into account while it was treating the reissue as the rightful substitute for the original.

5. Next comes the denial that the company's product is covered by the claims of the patent, leading to a denial of any liability to pay the contract royalties.

We must first observe that the question is not whether the company's device is covered by any valid claim. The subject of the validity of the patent which was to be obtained, the contract takes care of in another way, when it provides that royalties must continue to be paid until the patent is judicially declared invalid. Therefore, when the contract refers to paying royalty upon the company's product which is "covered by the patent to be obtained," it must refer to a situation where, when the claims are assumed to be valid and construed as the circumstances require them to be, they will cover the company's device.

No one questions that some of the added claims of the reissue reach and cover the devices in question; but we prefer to dispose of this matter as if affected only by the claims of the original patent. Upon a review of these claims, we entertain no doubt that the court below was right in thinking that royalties accrued, for, regardless of any expert testimony or of what occurred between the parties, an inspection of the company's device shows that at least claim 9 reads thereon so clearly that the device must be considered to be "covered" by the patent. When we take into account the differences between claim 9 and other claims, there is no room to give it any narrower construction