National Phonograph Company of Australia Limited v Menck [1911] UKPCHCA 1

12 C.L.R.] OF AUSTRALIA.

[PRIVY COUNCIL.]

NATIONAL PHONOGRAPH COMPANY

OF AUSTRALIA LIMITED } SE RELUENTS 5

MENCK . # 3 = ' 3 3 . RESPONDENT.

ON APPEAL FROM THE HIGH COURT OF AUSTRALIA.

Patent—Infringement—Use and vending of patented invention—Conditions attached to patented article on sale—Whether conditions binding apart from contract—

Breach of contract—Patents Act 1903 (No. 21 of 1903), secs. 4, 62, 65, First Schedule.

A patentee may, by virtue of his patent, sell his patented article accom- panied by restrictive conditions which would not apply in the case of ordinary chattels.

The imposition of such conditions in the event of a sale is not presumed, but, asale having oceurred, the presumption is that the full right of ownership was meant to be vested in the purchaser.

'The rights of the purchaser of a patented article will be limited if there is brought home to him knowledge at the time of the purchase of conditions imposed upon his vendor by the patentee.

The plaintiffs, who were the manufacturers of three patented articles, sold them wholesale to "jobbers" upon the terms of an agreement which provided that jobbers should only sell the articles to ''dealers" who had signed a "retail dealers' agreement" in a form provided by the plaintiffs. Both the jobbers' agreement and the retail dealers' agreement provided that the articles should not be sold on better terms than those authorized by the plaintiffs. The jobbers' agreement provided that all dealers must sign the retail dealers' agreement, which was to be forwarded immediately to the plaintiffs. By the dealers' agreement the dealer covenanted and agreed that, in consideration of

*Present—Lord Macnaghten, Lord Atkinson, Lord Shaw, Lord Mersey, and Lord Robson.

Privy Counci.

1911. NationaL PHoNo- GRaPH Co. or Aus-

TRaLIa Lrp.

w MEnck.