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TAGORE   LAW   LECTURES,  1916. 


THE  LAW  OF  MONOPOLIES 

IN 

BRITISH  INDIA. 


BY 

PROSANTO   KUMAR   SEN,  M.A.  (Cal.),  M.A.,  L.L.M.  (Cantab) 

of  Gray'  s  Inn,  Barrister-at-Law;  Advocate,  High  Court,  Patna  ;  Member  for  the 

Patna  University,  Legislative  Council,  Behar  and  Orissa  ;  Fellow  of  the 

Patna  University  ;  Foundation  Scholar  and  Newcome  Prizeman, 

St.  John's  College,  Cambridge  ;    sometime  Professor  of 

Law,  Calcutta;   Author  of  'A  Manual  of 

the  Law  of  Torts.' 

WITH    A    FOREWORD    BY 

THE   HONOURABLE   SIR    DAWSON   MILLER,  KT.,  K.C., 

Chief  Justice  of  the  Patna  High  Court. 


S', 


CALCUTTA : 

PRINTED   AT   THE)    BAPTIST   MISSION   PRESS,   AND    PUBLISHED    BY 
M.   C.  SIRCAR  &  SONS,  8o/2A,  HARRISON  ROAD. 


1922. 


TO   THE   MEMORY   OF 

MY   FATHER, 
PROSUNNO   COOMAR   SEN, 

WHOSE   LIFE  OF   FAITH,  COURAGE   AND   FIERY 
ENTHUSIASM   HAS    BEEN   TO   ME   A   PER- 
ENNIAL SOURCE   OF   STRENGTH   IN 
ALL   MY   STRIVINGS. 


* 


PREFACE. 

I  OWE  the  University  and  the  general  public  an  apology 
for  the  delay  which  has  unavoidably  occurred  in  the  publica- 
tion of  these  lectures.  They  were  delivered  in  the  year  1916. 
In  order,  therefore,  to  bring  them  up  to  date  later  cases  of 
consequence,  specially  on  the  law  of  patents,  copyright,  trade- 
marks and  restraints  of  trade,  have  been  incorporated  in 
them.  To  make  the  lectures  on  the  law  of  patents  and 
copyright  more  serviceable  to  the  student  and  the  practitioner 
the  Indian  Patents  and  Designs  Act  of  1911,  the  Patents 
and  Designs  (Temporary  Rules)  Act  of  1915,  and  the  Indian 
Patents  and  Designs  Rules  of  1912,  have  been  added  as 
appendix  to  lecture  V  ;  and  the  Indian  Copyright  Act  of  1914 
and  the  Indian  Copyright  Regulations  of  1914,  have  been 
added  as  appendix  to  lecture  VI. 

To  the  Honourable  Sir  Dawson  Miller,  Kt.,  K.C.,  Chief 
Justice  of  the  Patna  High  Court,  I  cannot  sufficiently  express 
my  gratitude  for  kindly  contributing  the  Foreword  which 
introduces  this  volume.  Considering  that  his  Lordship's 
time  is  so  preoccupied  by  the  duties  of  his  high  office  I 
cannot  help  feeling  greatly  indebted  to  him  for  this  act  of 
kindness  on  his  part. 

I  have  acknowledged  my  obligations  individually  to  the 
authors  whose  works  I  have  constantly  drawn  upon.  But 
I  wish  again  to  express  my  acknowledgements  to  them  for 
the  help  I  have  derived  from  their  works  in  the  preparation 
of  these  lectures. 

I  deeply  deplore  the  sudden  death  of  my  friend  Babu 
Panchanan  Banerjee,  M.A.,  B.L.,  Vakil  of  the  Patna  High 
Court,  who  was  cut  off  in  the  prime  of  his  life  when  this 
work  was  only  half-way  through  the  press.  But  for  his 
ungrudging  assistance  it  would  hardly  have  been  possible 
for  me  to  get  the  lectures  ready  for  the  press.  To  him  I  owe 
a  debt  of  obligation  for  bringing  the  case-law  up  to  date 
in  lectures  V-IX. 


vi  PREFACE. 

I  desire  to  express  my  sense  of  indebtedness  to  Mr. 
vS.  N.  Datta,  Barrister-at-Law  and  Advocate  of  the  Patna 
High  Court,  for  his  unfailing  kindness  and  co-operation  in 
the  preparation  of  this  volume.  He  has  not  only  helped 
me  in  preparing  lecture  X  for  the  press  and  bringing  the 
case-law  therein  up  to  date,  but  has  taken  the  entire 
responsibility  of  preparing  the  General  Index  and  the  Index 
of  Cases,  which  have  considerably  added  to  the  usefulness 
of  the  book. 

I  also  desire  to  express  my  thanks  to  Mr.  S.  N.  Sahay, 
B.A.  (Oxon),  Barrister-at-L/aw  and  Advocate  of  the  Patna 
High  Court,  for  rendering  me  active  .assistance  in  the  pre- 
paration of  lectures  III  and  IV  for  the  press. 


BAYLEY  ROAD, 

PATNA.  P.   K.   SEN. 

The  i ^th  June,  1922. 


FOREWORD. 

THE  law  of  monopolies  is  probably  one  of  the  least  studied 
of  the  various  branches  of  jurisprudence.  To  the  majority 
of  people  it  is  perhaps  no  exaggeration  to  say  that  it  is 
almost  a  closed  book,  and  yet;  as  is  pointed  out  at  the 
beginning  of  these  lectures,  in  one  sense  the  secret  of  success 
in  all  competition  and  all  economic  activity  consists  in 
availing  oneself  of  monopolistic  advantages.  The  business 
mind  is  no  doubt  imbued  with  the  importance  of  such 
advantages  and  instinctively  strives  in  a  multitude  of  ways 
to  secure  them,  but  the  law  relating  to  monopolies  is  probably 
a  subject  which  the  average  man  of  business  regards  merely 
as  the  dry  bones  of  legislation  locked  up  somewhere  in  the 
law's  lumber  rooms.  Nevertheless,  the  history  of  the  subject 
is  full  of  human  interest.  It  is  also  one  of  great  antiquity 
and  reminds  us  of  the  proverb  that  there  is  nothing 
new  under  the  sun.  Many  of  its  features  as  it  exists  at  the 
present  day  can  be  recognised  amongst  the  early  laws  of 
primitive  communities.  The  great  modern  capitalistic 
monopolies  known  as  trusts  or  combines,  which  now  spread 
their  tentacles  over  the  face  of  the  globe  and  which  are 
looked  at  askance  by  the  State,  find  their  prototype  in  the 
most  ancient  times.  The  combination  of  traders  for  the 
purpose  of  putting  up  prices  beyond  those  fixed  by  the 
State  was,  as  the  author  reminds  us,  known  in  the  days  of 
Manu  and  the  repressive  measures  in  force  to  suppress  the 
practice  find  mention  in  the  Mitakshara.  In  ancient  Greece 
the  machinations  of  the  corn  factors,  who  took  advantage 
of  national  calamities  to  form  what  would  nowadays  be  called 
a  corner  in  wheat  and  so  increase  their  wealth  at  the  expense 
of  the  public,  incurred  the  severe  strictures  of  Lycias  the 
orator  whose  caustic  comments  might  almost  have  been 
intended  to  touch  the  conscience  of  the  so-called  "  profiteer  " 
of  our  own  times. 


viii  FOREWORD. 

The  subject  must  be  regarded  from  two  aspects,  the 
legal  and  the  economic.  The  object  of  legislation  is  to 
assist  the  economic  value  of  monopolies  by  controlling  and 
directing  their  exercise  within  certain  channels  best  cal- 
culated to  combine  the  welfare  of  commercial  enterprise 
with  the  interests  of  the  public.  At  the  present  day  the 
most  important  branch  of  the  law  on  the  subject  is  that 
which  deals  with  patents  and  their  cousins  copyright  and 
trade  marks.  The  Indian  patent  law  is  founded  upon  that 
now  obtaining  in  England,  and  it  is  instructive  to  trace  its 
history  from  early  times  to  its  present  state  of  development. 
It  forms  an  interesting  chapter  in  the  struggle  between  the 
Crown  and  Parliament.  Monopolies  were  always  part  of  the 
royal  prerogative  and  were  originally  exercised  only  by  the 
sovereign  power.  The  granting  of  these  privileges  to  subjects 
as  a  mark  of  royal  favour  or  as  a  means  of  augmenting  the 
private  revenue  of  the  Sovereign  was  of  later  growth.  In 
England  the  first  recorded  case  in  the  patent  rolls  appears 
in  the  time  of  Edward  III  but  during  the  reign  of  the 
Plantagenets  comparatively  few  cases  are  recorded.  The  abuse 
of  this  practice  only  became  notorious  under  the  Tudor 
Monarchs  and  was  continued  by  the  first  of  the  Stuarts.  It 
was  always  keenly  resented  by  Parliament  and  the  common 
law  lawyers.  Such  grants,  they  maintained,  were  contrary 
to  the  spirit  of  Magna  Charta  and  against  the  ancient  and 
fundamental  laws  of  the  realm  and  the  liberties  of  the 
subject.  The  abuse  received  its  death  warrant  by  the 
passing  of  the  Statute  of  Monopolies  in  1623.  This  was  not 
achieved  however  without  a  severe  struggle.  Heated  debates 
had  taken  place  in  the  House  of  Commons  in  Queen  Elizabeth's 
reign,  notabty  in  1565  and  again  in  1601,  and,  although  the 
tact  of  Elizabeth  lead  her  to  give  way  to  popular  feeling, 
the  evil  was  revived  in  the  reign  of  James  I.  Under  that 
Monarch  in  spite  of  the  decision  in  Darcy  v.  Allein  in  1602 
which  declares  monopolies,  except  in  the  case  of  new  inven- 
tions, to  be  against  the  common  law,  and  notwithstanding 
the  renunciation  of  Elizabeth,  the  abuse  of  the  royal 
prerogative  in  granting  patents  of  monopolies  attained 


FOREWORD.  IX 

inordinate  proportions.  Public  feeling  ran  high.  Many  such 
grants  were  cancelled  by  the  Committee  of  grievances 
appointed  by  Parliament  and  presided  over  by  Sir  Edward 
Coke,  and  some  of  the  mpre  notorious  of  the  monopolists 
fled  the  country  rather  than  face  a  trial.  Finally  about 
two  years  before  James'  death  the  Statute  of  Monopolies 
was  passed.  Although  Cbarles  I  revived  the  objectionable 
practice  the  law  on  the  subject  was  definitely  declared  by 
the  Act  of  1623.  Since  then  many  Acts  have  been  passed 
the  most  important  of  which  are  that  of  1883  (46  and  47 
Viet.  c.  57),  which  repealed  previous  enactments,  and  the 
Patents  and  Designs  Act,  1907,  but  it  is  upon  the  exception 
contained  in  the  Statute  of  Monopolies  that  the  whole  law  of 
patents  in  favour  of  new  inventions  is  up  to  the  present 
time  based. 

It  is  interesting  to  note  that  the  arguments  put  forward 
in  favour  of  granting  monopolies  from  the  time  of  Elizabeth 
were  based  upon  the  same  principle  as  those  which  were 
urged  against  them,  namely,  the  public  interest.  Para- 
doxical as  this  may  appear  it  cannot  lightly  be  brushed 
aside  as  a  piece  of  sophistical  reasoning.  In  this  work-a-day 
world  the  true  doctrine  is  frequently  found  to  lie  in  a 
compromise  which  is  arrived  at  by  the  recognition  that  few 
great  truths  are  subject  to  no  exceptions.  Just  as  it  is 
in  the  public  interest  that  all  citizens  should  have  the 
right  to  follow  any  trade  or  profession  they  choose  without 
restraint  or  hindrance,  so  also  public  policy  recognises  that 
new  and  useful  inventions  tending  to  the  expansion  of 
trade,  the  saving  of  labour,  the  cheapening  of  commodities, 
the  simplification  of  mechanical  processes  and  so  on  should 
be  encouraged.  To  encourage  such  inventive  genius  within 
reasonable  limits  without  interfering  with  existing  rights 
is  the  object  of  the  present  patent  law.  This  policy  was 
recognised  even  in  the  time  of  Queen  Elizabeth  in  the  case 
of  Darcy  v.  Allein,  that  great  landmark  in  the  history  of 
monopolies,  and  it  was  incorporated  later  in  the  Statute 
of  Monopolies.  Although  that  Statute  declared  void  all 


X  FOREWORD. 

monopolies  as  being  grievous  and  inconvenient  to  the  sub- 
jects of  the  realm,  an  exception  was  made  in  favour  of  all 
those  granted  by  Parliament  or  such  as  were  in  respect  of 
new  manufactures  and  inventions.  How  far  the  present 
law  relating  to  this  subject  expresses  the  true  public  policy 
and  strikes  the  proper  balance  between  the  claims  of  in- 
ventors and  the  rights  of  the  public  a  study  of  these  lectures 
will  assist  the  reader  to  determine. 

PATNA,  DAWSON   MILLER. 

June  1922. 


CONTENTS. 

Page 

PREFACE  . .  . .  . .  . .  . .  v-vi 

FOREWORD  . .  . .  . .  . .  . .  vii-x 

TABLE  OF  CASES  . .  . .  . .  . .       xiii-xx 

LECTURE   I. 
Introductory        .  .  .  .  .  .  .  .  .  .  1-32 

LECTURE    II. 
Kinds  and  Classes  of  Monopolies     . .  33~5i 

LECTURE   III. 
History  of  Monopolies        .  .  .  .  . .  . .         52-76 

LECTURE   IV. 
Monopoly  of  Trading  Companies     . .  . .  .  .         77~9* 

LECTURE  V. 
The  Law  of  Patents  .  .  .  .  .  .  . .        92-198 

LECTURE   VI. 
The  Law  of  Copyright        .  .  . .  . .      199-251 

LECTURE   VII. 
The  Law  of  Copyright   . .  . .     252-293 

LECTURE  VIII. 
The  Law  of  Trade-Marks  and  Trade -Names  . .  . .     294-340 

LECTURE   IX. 
Contracts  in  Restraint  of  Trade      . .  . .      341-380 

LECTURE   X. 

Combination  of  Labour     . .  . .  . .  .  .     381-397 

LECTURE   XI. 

Capitalistic  Monopolies      . .  . .  . .  . .     398-428 


xii  CONTENTS. 

LECTURE   XII.  Pa?e 

Capitalistic  Monopolies      . .  . .  . .  . .     429-450 


APPENDIX. 

Indian  Patents  and  Designs  Act  (II  of  1911)  . .  137-167 

Patents   and    Designs   (Temporary  Rules)  Act   VI  of 

1915)  . .  . .  . .  . .  . .  168-169 

Indian  Patents  and  Designs  Rules  . .  . .  . .  170-198 

Indian  Copyright  Act  (III  of  1914)  . .  . .  215-244 

Indian  Copyright  Regulations          .  .  .  .  .  .  245-25 1 


INDEX   . .  ....     451-46(8 


TABLE  OF   CASES. 


Abdul  Cadur  v.  Mahomedali,  299. 
Abdul  Jalil  v.  Ram  Dayal,  262. 
Abdul    Salem    v.    Hamidullah,    298, 

3i5.  332,  334,  337- 
Abdur  Rahaman  v.  Shirazi,  267. 
Abernethy  v.  Hutchinson,  201. 
Adair  v.  Young,  126,  128,  332. 

Addyston  Pipe  &  Steel  Co.  v.  United 
States,  443. 

Aga  Mahmood  v.  Pelter,  337. 

A.  G.  of  Australia  v.  Adelaide  Steam 
Ship  Co.,  393. 

Albo-carbon  Light  Co.  v.  Kidd,  108. 

Alexander  v.  Henry,  132,  334. 

Alger  v.  Thatcher,  344. 

Allan  v.  Flood,  390,  391. 

Allnut  v.  Inglis,  25. 

Allsopp  v.  Wheatcroft,  353,  354,  355. 

American  Biscuit  Mfg.  Co.  v.  Klotz, 
428. 

American  Braided  Wire  Co.  v.  Thom- 
son, 132,  133. 

American  Preservers'  Trust  v.  Taylor 
Mfg.  Co.,  425. 

American  Tobacco  Co.  v.  Best.  332. 

Anadiram  Mandal  v.  Goza  Kachori, 

380. 

Anderson  &  Co.,  Ltd.  v.  Lieber  Code 
Co.,  258. 

Anglo-Swiss  Condensed  Milk  Co.  v. 
Swiss  Condensed  Milk  Co.,  336. 

Anheser-Busch  Brewing    Association 
v.  Houck,  413. 

Anti  Vibration,  etc.,  Co.  v.  Crossley, 
1 06. 

Auchterlonie,  D.  W.  v.  Charles  Bill, 

349- 
Automatic  Weighing  Machine  Co.  v. 

Fearby.  134. 

Bacon  v.  Spottiswoode,  133. 

Badische  Anilin  and  Soda  Fabrik  v. 
Levinstein,  109,  118,  126. 

Badische  Anilin  and  Soda  Fabrik  v. 
Maneckji,  298. 

Badische  Anilin  and  Soda  Fabrik  v. 
Schott  Segner  &  Co.,  28. 

Badische  Anilin  and  Soda  Fabrik  v. 
Spivey.  129. 


Badische  Anilin  and  Soda  Fabrik  r 
Tejpal,  302. 

Bagot  Pneumatic  Tyre  Co.  v.  Clipper 

Pneumatic  Tyre  Co.,  131. 
Baily  v.  Taylor,  284. 

Baker  Tuckers  &  Co.  v.  Sutherland 

McGuffle&  Co.,  290. 
Bank  v.  Manchester,  264. 
Barkar  v.  Manico,  333. 
Barlow  v.  Govind  Ram,  304. 

v.  Johnson,  329. 
Beard  v.  Turner,  299,  336. 
Bentleyy.  Fleming,  113. 
Bett  v.  Wilmot,  129. 
Betts  v.  De  Vitre,  133. 

v.  Gallais,  131. 

v.  Menzies,  113. 

v.  Neilson,  i u,  133. 

Bhathey  Sundararayan  v.  Laguduva. 
Ramudu,  115, 

Bircot's  case,  96. 

Bishop  v.  American  Preservers'  Co., 

425- 
Blacklock    &    Co.,     Ltd.    v.    Arthur 

Pearson,  Ltd.,  255. 

Blackwell  v.  Wright,  24. 
Blofield  v.  Payne,  334. 
Borthwick  v.  Evening  Post,  280,  282, 
Boosey  &  Co.  v.  Wright  &  Co.,  283. 
Boulton  v.  Bull,  96,  101,  103,  104. 
Bovill  v.  Crate,  131. 
v.  Moore,  18. 
Bowen  v.  Hall,  390,  392. 
Bradbury  v.  Beeton,  282. 
Braham  v.  Beachim,  333. 
v.  Bustard,  326. 

Brahmaputra    Tea   Co.,    Ltd.    v.    B. 
Scarth,  374. 

Brandeth  v.  Lance,  260. 
Bridson  v.  M' Alpine,  128,  130. 

British    American    Tobacco    Co.    v* 
Mahbub  Baksh,  301,  302. 

British  Dynamite  Co.  v.  Krebs,  118. 

British  Motor  Syndicate  v.  Taylor, 
129,  132. 

British    United    Shoe    Mfg.    Co.    v.. 
Fussell,  109. 


XIV 


TABLE    OF    CASES. 


British  Vacuum  Cleaner  Co.  v.  James 
Robertshaw  &  Sons,  134. 

British  Vacuum  Cleaner  Co.  v.  Suction 
Cleaner,  Ltd.,  105,  134. 

Broad  v.  Jollyfe,  346. 

Brooks  v.  Lamplugh,  105. 

Brown  v.  Annandale,  in. 

Brunton  v. -Hawkes,  18. 

Bunn  v.  Guy,  25,  350. 

Burgess  v.  Hills,  332. 

Buskin,  E.  G.  v.  Ramkisun,  372. 

Butler  v.  Adamji  Bahura,  106. 

Butler  v.  Burleson,  25. 

Byramji  Cowasji  v.  Vera  Samabhai, 

298. 
Byrne  v.  Statist  Co.,  287. 

Cable  v.  Marks.  258. 

Caird  v.  Sime,  201,  266. 

Caldwell  v.  Van  Vlisiinger,  128,  130. 

Camel  Hair  Belting  Case,  12. 

Carlisles  Nephews  &  Co.  v.  Ricknauth, 

37i,  372. 

Carpenter?;.  Smith,  in,  112. 
Cartier  v.  Carlile,  334,  336. 
Carver  v.  Bowkin,  333. 
Cassel      Gold      Extracting     Co.      v. 

Ayanide  etc.  syndicate,  107. 
Cate   v.  Devon  etc.  Newspaper  Co., 

281. 

Central  Ohio  Salt  Co.  v.  Guthrie,  415. 
Cescinsky  v.  George  Routledge  &  Co., 

277. 

Challender  v.  Royle,  125. 
Chapin,  D.  &  E.  v.  Brown  Brothers, 

4i5- 

Cheppel  v.  Davidson,  334. 
Charles    River     Bridge     v.     Warren 

Bridge,  9. 

Charlesworth  v.  Macdonald,  375. 
Chatterton  v.  Cave,  268,  269. 
Cheavin  v.  Walker,  297,  321. 

Cheshire  Brewery  Co.  v.  Manchester 
Brewery  Co.,  312,  314. 

Chilton     v.    Progress    Printing    etc. 

Co.,  258. 

Chubb  v.  Griffith,  333. 
Clark  v.  Adie,  119. 
Cobbett  v.  Woodward,  255. 
Cohen,  B.  M.  D.  v.  Allan  Wilkie,  378. 
Colburn  v.  Simms,  284. 


Colgate  v.  Batchelor,  345. 

Collins  v.  Locke,  389,  405. 

Company  of  Stationers  v.  Parker,  12, 
13- 

Continental  Securities  Co.  v.  Inter- 
borough  etc.  Co. ,  8. 

Conway  v.  Wade,  393. 

Corporation  of  Stationers  v.  Seymor, 

12. 

Cox  v.  Land  and  Water  Journal  Co., 
255,  280. 

Craft  v.  McConnoughy,  414. 

Crane  v.  Price,  106. 

Croft  v.  Day,  330. 

Crossley  v.  Beverley,  131. 

Crossley  v.  Derby  Gas  Light  Co.,  131, 
133. 

Cummings  v.  Union  Blue  Stone  Asso- 
ciation, 414. 

Curtis  v.  Cutts,  130. 
Curtis  v.  Platt,  107. 

D'Almaine  v.  Boosey,  269,  270. 

D.  P.  Anderson  &  Co.  v.  Lieber  Code 
Co.,  258. 

Dangerfield  v.  Jones,  105. 

Darcy  v.  Allein,  13,  17,  94. 

Davenant  v.  Hurdis,  15. 

Davenport  v.  Richard,  130. 

Davenport  v.  Rylands,  334. 

Davis  v.  Davis,  28,  344. 

Davis  v.  Mason,  25,  351. 

Day  v.  Foster,  125. 

De  Vitre  v.  Betts,  131,  284,  334. 

Delfe  v.  Delamotte,  283. 

Denaby  etc.  Collieries,  Ltd.  v.  York- 
shire Minors  Association,  393. 

Dent  v.  Turpin,  334. 

Dicks  v.  Brooks,  274. 

Dicks  v.  Yates,  253. 

Dilly  v    Doig,  285. 

Distilling   &   Cattle   Feeding   Co.   v. 

People,  424. 
Dixon  v.  Fawcus,  334. 
Dolland's  Case,  113. 
Donaldson  v.  Beckett,  22. 
Doolub  Das  v.  Ramlal,  61. 
Dover  v.  New  Townsend  Co.,  129. 
Dowling  v.  Billington,  128,  129. 
Dudgeon  v.  Thomson,  130. 
Dunlop  v.  British  Car  Co.,  129. 


TABLE   OF    CASES. 


XV 


Dunlop  Pneumatic  Tyre  Co.  v.  Neal, 

128. 
Dunnachie  v.  Young  &  Sons,  24. 

East  India  Co.  v.  Sandys,  13,  14,  88. 

Eastes  v.  Russ,  365. 

Ebrahim  v.  Essa,  308. 

Edelsten  v.  Edelsten,  333,  334,  335. 

Edgebury  v.  Stephens,  18,  in. 

Edison  Bell  v.  Smith,  134. 

Edison     and     Swan     Light     Co.     v. 
Holland,  116. 

Edwards  &  Co.  v.  Picard,  98. 
Egerton  v.  Erie  Brownlow,  344. 

Elgin  Mills  Co.  v.  Mtiir  Mills  Co.,  106, 
109. 

Elias  v.  Grovesend  Tinplate  Co.,  113. 
Elliot  v.  Turner,  118. 
Emery  v.  Ohio  Candle  Co.,  414. 
Emperor  of  Austria  v.  Day,  332. 

English  etc.  Machinery  Co.  v.  Union 
etc.  Machine  Co.,  132. 

Ernest  otto  Gammeter  v.  Controller 
of  Patents  etc.,  290,  293. 

Ewing  &  Co.  v.  Grant  Smith  &  Co., 
298. 

Farina  /'.  Silverlock,  334. 
Farrer  v.  Close,  389. 

Penning  Film  Service,  Ltd.  v.  Wolver- 

hampton  etc.  Cinemas,  Ltd.,  273. 
Ford  v.  Foster,  299,  322,  328,  333,  337. 
Forrester  v.  Walker,  204. 

Frank  Reddaway  v.  George  Banham, 

282. 

Fraser  &  Co.  v.  Bombay  Ice  etc.  Co., 

371- 
Frearson  v.  Loe,  127,  128,  134. 

Gadd  v.  The  Mayor  etc.  of  Manches- 
ter, 105,  106. 

Gangabishun  v.  Moreshwar,  255. 
Geary  v.  Norton,  332. 
Gee  v.  Pritchard,  260. 
Gegelahan  v.  Guntner,  392. 

Giblan     v.    National    Amalgamated 
Union,  393. 

Giridhari  Lai  v.  Devi  Dial,  256. 

Glamorganshire    Coal    Co.,    Ltd.    v. 
South  Wales  etc.,  392. 

Glyn  v.  Western  Feature  etc.,  288. 
Goldsoll  v.  Goldman,  367. 
Gosnell  v.  Bishop,  107. 


Gould  v.  Head,  424. 

Grace  v.  Newman,  255,  258. 

Graham  &  Co.  v.  Kerr,  Dodds  £  Co. 
299. 

Gregory  v.  Duke  of  Brunswick,  392. 
Guinness  v.  Heap,  332. 
Gyles  v.  Wilcox    22,  263. 

Hall  v.  Barrows,  331. 
Haufstaengl  v.  Bains,  273. 

Haufstaengl  r.  Empire  Palace,  273, 
290. 

Haufstaengl  v.  Newnes.  273. 
Haufstaengl  v.  Smith  &  Sons,  283. 
Hannah  v.  Juggernath,  301,  337. 
Hare  v.  L.  &  N.W.  Rly.  Co.,  405. 
Haribhai  Maniklal  v.  Sharafali  Isavji , 

376- 

Harrison  v.  Taylor,  336. 
Harwood  v.  Great  Northern  Rly.  Co., 

106. 

Hastings  v.  Whitey,  351. 
Hay  ward  v.  Young,  25. 
Health  v.  Unwin.  118. 
Hearn  v.  Griffin,  404. 
Heininger  v.  Droz,  304. 
Hepworth   Mfg.    Co.    v.    Ryott,   341. 

366. 

Herbert  Morris,  Ltd.  v.  Saxelby,  365 
Herriman  v.  Menzies,  i,  9. 
Hill  v.  Thomson  and  Foreman,  20, 

106,  117,  130. 
Hills  v.  Evans,  113. 
Hills  v.  London  Gas  Light  Co.,  113 
Hilton  v.  Eckersley,  381. 
Hinde  v.  Gray,  354. 
Hinks  v.  Safety  Lighting  Co.,  105. 
Hitchcock  v.  Coker,  347,  349,  363. 
Hoffman  v.  Brooks,  409,  415. 
Hogg  v.  Kirby,  259. 
Hollinrake  v.  Truswell,  258. 
Homer  v.  Ashford,  27. 
Honie  v.  Chavey,  300. 
Hooker  v.  Vandewater.  408. 
Hopkinson  v.  Burghley,  261. 
Hopkinson    v.  St.   James  etc.  Light 

Co.,  130. 

Hornby  v.  Close,  389. 
Homer  v.  Graves,  347,  348- 
Horwood   ••).    Millars   etc.  Co..  Ltd., 

379- 


XVI 


TABLE   OF    CASES. 


House  u.  Weber,  134. 

Househill  Coal  etc.    Co.    v.  Neilson, 
105. 

Hugh  Balfourft  Co.  v.  Edward    etc. 
&  Co.,  298. 

Hurry    Krishna   Pillai   v.  M.   Anthi- 
lachary,  376. 

India  Bagging  Association  v.  Kock, 

412. 
In  re  Adair's  Patent,  122. 

Bett's  Patent,  121. 

Carr's  Patent,  122. 

Clarke's  Design,  290. 

Clarke's  Patent,  121. 

Christiansen's  Trade  Mark,  314. 

Hill's  Patent.  121. 

Hyde  &  Co. 's  Trade  Mark,  319. 

Markwick's  Patent,  120. 

McDougall's  Patent,  120. 

Merten's  Patent,  106. 

Newton's  Patent,  122. 

Norton's  Patent,  121. 

Paine,  333. 

Pinkus'  Patent,  120. 

Poulsen's  Patent,  120. 

Reade  and  Ores  well's  Designs, 
290. 

Ritchie's  Patent,  120. 

Robin  Electric  Lamp  Co.'s  Peti- 
tion, 123. 

Saxby's  Patent,  122. 
Short's  Patent,  103. 
Simister's  Patent,  121. 
Societe  etc.  i'Etoile,  333. 
Spencer's  Trade  Mark,  318. 
Taylor's  Patent,  112. 
Trotman's  Patent,  121. 
Whitehouse's  Patent,  120. 

International  Tooth  Crown  v.  Hanks 
Dental  Association,  19. 

Ipswich  Taylor's  Case.  345. 
Isaacson  v.  Mampson.  3^3. 

Jagernath  &  Co.   v.   Cress  well,   300, 

306,315- 

Jarold  v.  Houlston,  255. 
Jeffreys  v.  Boosey,  21. 
Jenkins  v.  Hope,  129. 
Jogeschandra  v.  Mohimchandra,  264. 


John  D.  Park  &  Sons  Co.  v.  National 
Wholesale,  etc.,  414. 

John  Smidt  v.  Reddaway  &  Co.,  309, 

3",  312. 

John  Streater  v.  Abel  Roper,  12. 
Johnston  v.  Orr  Ewing,  314,  332. 
Joseph  Evens  &  Co.  v.  Heathcot, 

365. 

Judd  v.  Harrington,  415. 
Jwalaprasad  v.  Munnalal,  302. 

Karam  Elahi  &  Co.  v.  Abdul  Aziz, 

299. 

Karno  v.  Pathe  Freres    268. 

Kedernath  v.  Goneschandra,  125. 

Kellog  v.  Larkin,  407. 

Kelly  v.  Hooper,  284. 

Kelly  v.  Morris,  254,  255,  282. 

Kenrick  v.     Danube    Collieries   etc. 

258. 

Khetra  Pal  v.  Pancham  Sing,  298. 

Kinahan  v.  Bolton,  332. 

King  v.  Waddington,  60. 

King  v.  Wheeler,  102. 

Kinmond  v.  Jackson,  106,  131,  337. 

Konsky  v.  Peet,  365. 

Kopp  v.  Rosenwald,  102. 

Kubernath  v.  Mahali  Ram,  377. 

Lakhpat  Rai  v.  Kishan  Das,  106. 
Land  v.  Greenbury,  259. 
Lane    Fox    v.    Kensington    Electric 
etc.,  101,  1 10. 

Lavergne  v.  Hooper,  301,  315. 
Lawrence  v.  Bushnell,  255. 
Lawrence  v.  Smith,  288. 

Leather      Cloth     Co.     v.     American 
Leather  Cloth  Co.,  299. 

Leather  Cloth  Co.  v.  Hirschfield,  334. 
Leather  Cloth  Co.  v.  Lorsont,  26,  352, 

353,  354,  355,  359- 
Lee  v.  Haley,  337. 

Leeds  Forge  Co.  v.  Deighton's  Patent 
Flue  Co.,  130,  132. 

Lei.^hton  v.  Wales,  349. 
Leng  &  Co.,  Ltd.  v.  Andrews,  358. 
Lever  v.  Goodwin,  334,  336. 
Lewis  v.  Fullerton,  255,  265,  282. 

Lewitt  Wire  Cloth  Co.  v.  N.  G.  Wire 

Cloth  Co.,  415. 
Licensed     etc.     Newspaper    Co.    v. 

Bingham,  259. 


TABLE    OF    CASES. 


XV11 


Life  Boat  Co.  v.  Chambers  Brothers 
&  Co.,  112. 

Linoleum  Co.  v.  Nairn,  325. 
Losh  v.  Hague,  128. 
Lumley  v.  Gye,  38^,  390,  392,  394. 
Lyon  v.  Goddard,  107. 

Lyon    v.    Newcastle     etc.     Corpora 
tion,  128. 

Mack  v.  Fetter,  259,  282. 
Macklin  v.  Richardson,  204. 
Mackenzie  v.  Strirmiah,  371. 
Macmillan  v.  Suresh,  262. 
Macmillan  v.  Zaka,  267. 
Macmillan  &  Co.  v.  Dent,  260. 
Madhab  Chandra   Paramanik  v.  Raj- 

kumarDas,  372,  374,  378. 
Madhabji   etc.  Co.    Ltd.    v.    Central 

India  etc.  Co.,  Ltd.,  298,  336. 

Mahomed      Esuf      v.       Rajaratnam 
Pillai,  303. 

Mallary  v.  Hananer  Oil  Works,  425. 
Mallon  v.  May,  25,  349. 

Manockji    Petit    etc.    Co.    v.    Maha- 
lakshmi  etc.  Co.,  Ltd.,  334,  335. 

Manton  v.  Moore,  18. 

Mason    v     Provident    Clothing    etc. 
Ltd.,  362,  365. 

Massam    v.    Thorley's    Cattle    Food 
Co.,  333. 

Mavvman  v.  Tegg,  281,  283,  284. 

McEllistrin   v.    Ballynacelligott    etc. 
Society,  Ltd.,  365. 

McLay  v.  Lewis.  &  Co.,  108. 

Md.    Jewa  Motalla  v.  H.   S.  Wilson, 

336. 
Mersey  Dock  Case,  252. 

Merz    Capsule    Co.   v.   U.S.    Capsule 
Co.,  428. 

Meters  Ltd.  v.  Metro.  Gas  Co.,  132. 
Metzler  v.  Wood,  282. 

Millar  v.  Taylor,  22,  97,  200,  203,  207, 
210,  211. 

Millar  &  Lang  Ltd.  v.  Polak,  290. 

Millington  v.  Fox.  48,  298,  322,  333. 

Mills  v.  Dunham,  356. 

Mills  v.  U.S.  Printing  Co.,  397. 

Minter  v.  Mover,  132. 

Mitchel  v.  Reynolds,  28,  346. 

Moet  v.  Custon,  333,  336. 

Moghul    S.S.    Co.    v.   McGregor    and 
others,  391 ,  405,  406,  448. 


Monckton  v.  Pathe  Freres  etc.  Ltd. , 
269,  271. 

Moody    etc.  Gurr   Ltd.    v.    Newell  £ 
Co.,  128. 

Morarji  v.  Madanji,  310. 
Morgans.  Seaward,  no,  112.  116. 
Morgan  v.  Windover,  134. 
Morison  v.  Salmon,  334. 
Morris  v.  Ashbee,  255. 
Morris  v.  Branson,  96. 
Morris  v.  Kelly,  205. 
Morrison  v.  Moat,  201. 
Mostyn  v.  Fabrigas,  88. 
Muddock  v.  Blackwood,  283. 
Mullins  v.  Hart,  in. 
Murray  v.  Benbow,  288. 
Murray  v.  Clayton,  133. 

National  Cotton  Oil  Co.  v.  Texas,  31. 

National    Harrow  Co.   v.    Bement  & 
Sons,  428. 

National  Harrow  Co.  v.  Hinch,  428. 
Neilson  v.  Betts,  131.  132. 
Neilson  v.  Harford,  117. 
Neilson  v.  Horniman,  280. 
Nemai  Chand  v.  Wallace,  311. 
Nester  v.  Continental    Brewing  Co., 

41.3- 

Newall  v.  Elliot,  113. 
Newberry's  Case,  262. 
Newbery  v.  James,  116. 
Nickels  v.  Ross,  in. 
Nicol  v.  Stockdale,  280. 
Noel    Charles    etc.    Home  v.     John 

etc.  Douglas,  351. 

Noor  Ali  Dubash  v.  Abdul  Ali,  374. 
Nooroodeen  v.  Sowden,  306. 
Nordenfelt  v.  Maxim  Nordenfelt  etc., 

28,  351,357,  36i,  362,  364,  3/8. 
Norton  v.  Barker  &  Son,  in. 

Oakdale  Mfg.  Co.  v.  Garst,  407. 
Oakes  &  Co.  v.  Jackson,  370. 
Olmstead  v.  Distilling    etc.    Co.,  428. 
Oriental   etc.    Assurance  Co.,  Ltd.  v. 

Oriental  Assurance  Co.,  Ltd.,  309. 
OrrEwingv.  Grant  Smith  &  Co.,  333. 
Orr  Ewingv.  Johnston  &  Co.,  329, 

333- 
Osborne    v.    Amalgamated    Society, 

etc.,  365. 


XV111 


TABLE   OF    CASES. 


Osram  Lamp  Works  Ltd.  v.  Schloss 
&  Co.,  134. 

Otto  v,  Linford,  105,  no. 
Oxby  i).  Holden,  in. 

Pager.  Wisden,  258. 

Parasullah  v.  Chandra  Kanta,  375. 

Parkers  v.  Stevens,  106. 

Parsons  v.  Gillespie,  282. 

Patterson  v.  Gas  Light  Co.,  in,  114. 

Penn  v.  Bibby,  106. 

Penn  v.  Pack,  132. 

People  v.  Chicago  Gas  Trust  Co. ,  425. 

People  v.  Milk  Exchange,  414. 

People  v.  North  River  etc.  Co.,  31, 
406,422. 

People   v.  Sheldon,  414. 

People  Ex.  Rel.  v.  Chicago  Gas  Trust 
Co.,  344. 

Percival  v.  Phipps,  260,  261. 

Petty  v.  Taylor,  255,  280. 

Phillip  v.  Pennell,  261. 

Pike  v.  Nicholas,  255,  283,  284. 

Pittsburg   Carbon   Co.    v.   McMillan, 

415. 

Plimpton  v.  Malcolmson,  111,  116. 
Plimpton  v.  Spiller,  114,  130. 

Pneumatic    Tyre    Co.    v.    Puncture 
Proof  etc.  Co.,  132. 

Ponnusami  v.  Palayathan,  380. 
Pope  v.  Curl,  259,  261. 

Pothiram    v.   Mosst.    Islam   Patima, 

372. 

Powell  v.  Aikin,  284. 
Powell  v.  Brewery  Co.,  323. 
Pragnell  v.  Gosse  Aleyn,  345. 
Premsook  v.  Dhurmchand,  372. 

Price's    Patent    Candle  Co.   v.  Ban- 
wen's  Patent  Candle  Co.,  131. 

Prince  Albert  v.  Strange,  205,  206' 
276. 

Printing     etc.     Registering    Co.    v. 
Sampson,  26. 

Proctor  v.  Bayley,  128,  129. 
Proctor  v.  Bennis,  129. 

Quinn  v.  Leathern,  390,  391,  392,  393. 

Rajkumar  v.  Emperor,  395. 
Ralli  v.  Fleming,  304. 
Ralston  v.  Smith,  96,  101. 
Ramsaroop  v   Bansi,  379. 


Reddaway  v.  Banham,  309,  310,  333. 
Reddaway   v.  Bentham  Hemp  etc., 

334- 

Reddaway  &  Co.  v.  Smidt  &  Co.,  333. 
Reg.  v.  Duffield,  387. 
Reg.  v.  Rowlands,  387. 
Reg.  v.  Selsby,  386. 
Renard  v.  Levinstein,  130. 
Rex  v.  Arkwright,  18,  117. 

Rexy.  County  Court  Judge  of  Hali- 
fax, 97. 

Rex  v.  Cutler,  18. 
Rexy.  Wheeler,  118. 
Richard  v.  Butcher,  317. 

Richard    Atkinson    and    another    v. 

George  Moore  and  others,  12. 
Richardson  v.  Buhl,  428. 
Richardson  v.  Mellish,  16. 
Robl  v.  Palace  Theatre,  269. 
Rodgers  v.  Nowell,  334. 
Roebuck  v.  Stirling  &  Sons,  111. 
Rose  v.  Loftus,  335. 
Rousillon  v.  Rousillon,  354,  355,  359 
Roussac  v.  Thacker  &  Co.,  256. 
Rundell  v.  Murray,  280. 
Rushton  v.  Crawley,  108. 

S.  V.  Nevanas  &  Co.  v.  Walker  & 
Foreman,  365. 

Saccharine  Corporation,  Ltd.  v. 
Anglo-Continental  etc.  Works. 
126. 

Saccharine  Corporation,  Ltd.  v. 
Chemical  Co.,  133. 

Saccharine  Corporation,  Ltd.  v, 
Quincey,  131. 

Saccharine  Corporation,  Ltd.  v.  Wild, 
126. 

Salt  &  Co  v.  Guthrie,  409. 

Santa  Clara   etc.    Co.  v.  Hayes,  415. 

Sassoon  v.  Mills  &  Co.,  305. 

Satis  Chandra  y.  Kasi  Sahu,  379. 

Saunders  v.  Smith,  280. 

Saxby  v.  Gloucester  Waggon  Co.,  109. 

Saxlehner  y.  Appolinaris  Co.,  334. 

Schove  v.  Schmincke,  258. 

Scott  y.  Stanford,  255. 

Seixo  y.  Provezende,  330. 

Seymour  v.  Osborne,  19. 

Shaikh  Kalu  y.  Ramsaran,  377. 

Sheen  v.  Johnson,  in,  132. 


TABLE   OF   CASES. 


XIX 


Shoe  Mfg.  Co.  v.  Cutlan,  128. 

Shrewsbury    etc.    Rly.    Co.    v.    L.    & 
N.W.  Rly.  Co.,  405. 

Siddell  v.  Vicker,  133. 
Siegert  v.  Findlater,  337. 

Simplex    Concrete    etc.  v.    Stewart, 
in. 

Simpson  v.  Holliday,  117. 

Singer  Mfg.  Co.  v.  Loog,  23,48,  295, 
296,297,  314,  315,  324,  332. 

Singer  Mfg.  Co.  v.  Wilson,  324,  334. 
Skinner  v.  East  India  Co.,  88. 
Skinner  v.  Perry,  125. 
Slazenger  v.  Feltham,  334. 
Smith  v.  L.  &  N.W.  Rly.,  126. 

Smithies     v.    National    Association, 
etc.,  393. 

Southern  v.  How,  294. 
Southey  v.  Sherwood,  207. 

South    Wales   Minors   Federation   v. 

Glamorganshire  Coal  Co.,  393. 
Spiers  v.  Brown,  253. 
Stanton  v.  Allan,  412. 
State  v.  Duluth  Board  of  Trade,  406. 
State  v.  Nebraska  Distilling  Co.,  424. 
State  v.  Standard  Oil  Co.,  421. 
Steady.  Anderson,  112. 
Steers  v.  Rogers,  98. 
Stevens  v.  Wildy,  283. 
Stockdaley.  Onwhyn,  288. 
Strait  v.  National  Harrow  Co.,  428. 

Sunlight  Incandescent  etc.  v.  Incan- 
descent Gas  etc.,  120. 

Tallis  v.  Tallis,  352. 

Tan  Khwan  Hong  v.  Maung  Kegaw, 

371. 

Taylor  v.  Carpenter,  334. 
Taylor  v.  Virasami,  306. 
Texas  Standard  Oil  Co.  v.  Adone, 

413,  4H- 
Thangavelu     Chetti      v.      Muhunda 

Naidu,  379. 

Thompson  v.  Foreman,  18. 
Thompson  v.  James,  108. 
Thompson  v.  Moore,  107. 
Thorny.  Worthing  Skating  etc.,  126. 
Tonge  v.  Ward,  332. 

Trustee    of    Denny    v.    Denny    and 

Warr,  379. 
Tuck  v.  Priester,  275. 


Turnery.  Winter,  117. 
Turton  y.  Turton,  298. 

Uberoi  Ltd.  v.  Proprietor  of  Uberoi 
&  Co.,  305. 

Ulman  &.  Co.  v.  Cesar  Luba,  331. 
United  HorsenailCo.  v.  Stewart,  126' 

I3L  132. 
United  States  y.  Addyston  Pipe  etc., 

405. 

United   States  y.  American  Tobacco 
Co.,  406. 

United  States  v.  E.  C.  Knight  &  Co., 
442,  444. 

United  States  v.  Trans-Missorie,  etc., 
440. 

United  States  Chemical  Co.  v.  Provi- 
dent Chemical  Co.,  9,  406. 

United  States  Vinegar  Co.  y.  Fochran- 
bach,  407. 

United  Telephone  Co.  v.  London  and 
Globe  Co.,  129. 

United    Telephone    Co.    v.    London 
etc.  Maintenance  Co.,  128,  134. 

United  Telephone   Co.    v.    Sharpies, 
125. 

United  Telephone  Co.  y.  Walker,  126. 

University  of  London  Press  Ltd.  y. 
University  Tutorial  Press  Ltd.,  253. 

Upmann  v.  Elkan,  298,  332,  334. 
Upmann  y.  Forester,  332,  333. 

Vadilal  y.  Burditt  &  Co.,  299. 
Vavasseur  y.  Krupp,  134. 
Von  Hey  den  y.  Neustadt,  125. 

Wallis  y.  Day,  348,  354. 

Walsby  y.  Anley,  388. 

Walter  y.  Lane,  256,  257. 

Walton  y.  Bateman,  in. 

Ward  y.  Byrne,  28,  349,  350,  354,  364. 

Wards  Application,  104. 

Warne  &  Co.  y.  Seeborhm,  283. 

Watson  y.  Holliday,  133. 

Webb  y.  Rose,  203. 

Weed  y.  Peterson,  332. 

Wegman  y.  Corcoran,  116. 

Weldon  y.  Dicks,  258,  259. 

Welsbach      Incandescent,      etc.      y. 

Dowle,  128. 
Welsbach  Incandescent    etc.  y.   New 

Incandescent  etc.,  no,  131. 


XX  TABLE   OF   CASES. 

West  End  Watch  Co.  v.  Berna  Watch  Wood  v.  Brown,  382. 

Co.,  315,  331-  Wood  v.  Chart,  266. 

Western  Wooden  ware  etc.  v.  Starkie,  Wood  v.  Lambert  and  Butler,  319. 

428-  Wood  v.  Raphael,  109. 

Wickens  v.  Evans,  404.  Woody.  Zimmer,  18,  103. 

Williams  v.  Nye,  109.  Wotherspoon  v.  Currie,  326. 

\Yheaton  v.  Peters,  22.  Wright  v.  Tallis,  289. 

Whittaker  v.  Howe,  351.  Wyatt  v.  Bernard,  258. 


CORRIGENDA. 

Page  23,  footnote,  line    7,  for  "  Zoog  "  read  "  Loog  " 

49,  line  n,                   for  "to"  read  "  from  " 

52,  line  4,                     after  "  met  with  "        insert  '*  but '' 

„       52.  last  line  but  one,  for  "  horse  "  read  "  horses 

„     210,  line  18,  after  "publishes  it,"  insert  "it" 

383,  footnote,                 after  "  Ed  IV  "  insert  "  C.  6.' 


The  Law  of  Monopolies, 


INTRODUCTORY. 


Monopoly  is  primarily  a  phenomenon  of  Econo-  Monopoly— prima- 
mics — a  result  of  social,  industrial  and  economic  rihenomenon°mic 
conditions.  The  underlying  idea  of  monopoly  must, 
therefore,  be  sought  in  the  science  of  political  econo- 
my. Literally,  the  word  denotes  sale  by  one  man, 
from  monos  (alone)  and  polein  (to  sell).  Monopolia, 
in  Greek,  means  exclusive  sale  by  one  man,  and 
monopolion,  the  exclusive  right  or  power  of  sale.  But 
although,  originally, { monopoly '  means  to  sell  and  not 
buy  or  produce,  it  came  to  be  used  in  the  English 
language  to  cover  buying  and  producing  as  well  as 
selling.1  The  term  is  now  extended  to  denote  pro- 
duction, sale,  or  purchase,  either  by  one  man  or  by  a 
group  acting  as  one  man. 

Thus,  monopoly  seems  to  represent  a  condition  it  is  opposed  to 
which  is  inconsistent  with  unrestricted  sale  or  pur- free  comPetition- 
chase  by  every  member  of  society;  in  other  words, 
of  open  and  free  competition.2     If  in  regard  to  any 
particular  commodity,  every  man  enjoys  perfect  free- 
dom in  producing,  purchasing  or  selling  any  quantity 
or  quality  of  it  at  pleasure,  we  have  a  state  of  affairs 
which    is   considered   to   be   the   direct   opposite   of 
monopoly.3     Under  such  conditions  the  state  of  the  under  free  compe- 
market  is  determined  by  a   mutual    adjustment   of  JJ*JJ*£Jj^ 
demand  and  supply.     Economists  have  discussed  at  mutual  adjustment 

of  demand  and 
-  supply. 

i  The  term  "Monopol"  in  German  is  employed  to  cover  both  selling 
and  manufacturing. 

*  Competition  has  been  defined  as  "the  act  of  seeking,  or  endeavour- 
ing to  gain,  what  another  is  endeavouring  to  gain  at  the  same  time ;  common 
contest  or  striving  for  the  same  object." — Century  Dictionary. 

3  Monopoly  is  "  the  abuse  of  free  commerce,  by  which  one  or  more 
individuals  have  procured  the  advantage  of  selling  all  of  a  particular  kind 
of  merchandise" — Herriman  v.  Menzies,  115  Cal.  16,  21;  46  Pac.  730;  35 
Iv.R.A.  318;  56A.S.R.  81. 


Demandand°f 


°°nf 


length  the  characteristics  of  such  a  condition.  The 
fundamental  idea  in  which  they  all  agree  is  embodied 
in  the  so-called  doctrine  of  the  Equilibrium  of  De- 
mand  and  Supply.  Into  the  diverse  ramifications  of 
this  doctrine  it  is  beyond  the  scope  of  the  present 
lecture  to  enter.  Whether  free-trade  or  protection,1 
whether  laissez  faire  or  non-intervention,  on  the 
one  hand,  or  state  intervention,  on  the  other,  should 
claim  our  adherence  as  sound  economic  maxims,  we 
shall  have  occasion  to  discuss  later  on  in  its  proper 
place.  Suffice  it  to  say  for  the  present  that  mon- 
opoly generally  represents  a  set  of  conditions  inconsis- 
tent with  free  and  open  competition  and  with  laissez 
faire,  as  ordinarily  understood.* 

^e  a^ove  *s  at  ^est  a  negative  way  of  charac- 
terising  monopoly.  In  order  properly  to  understand 
the  notion  of  monopoly  it  is  necessary  to  analyse  it 
carefully  and  bring  out  its  constituent  elements. 
Different  economists  have  emphasised  one  or  other  of 
these  constituents,  and  their  treatment  of  the  subject 
is  imbedded  in  a  mass  of  details,  peculiar  to  the 
science  of  political  economy,  which  are  of  remote 
concern  to  a  lecture  dealing  mainly  with  the  legal 
aspect  of  it.  It  is  only,  however,  when  these  funda- 
mental factors  that  go  to  make  a  monopoly  are 
gathered  up  and  synthesised  from  the  standpoint  of 
law  that  the  full  significance  of  monopoly  for  our 
purposes  may  be  appreciated. 

Monopolies  have  been  roughly  classified  as  fol- 
lows8 :  — 

(i)  Natural  Monopolies,  arising  from  favour- 
able natural  arrangements  of  soil  or  situa- 
tion, or  special  ability,  aptitude  and  the 
like  (see  §  i). 


1  These  antithetic  terms  are  no  doubt  usually  employed  with  reference 
to  the  question  of  tariff  or  duties  for  the  regulation  of  international  trade. 
But,  in  a  broader  sense,  they  are  also  used  to  indicate  the  presence  or  ab- 
sence of  any  form  of  restraint  on  the  economic  activities  of  individuals  —  a 
subject  which  comes  directly  under  monopolies. 

2  I  have  to  speak  with  reservation,  as  it  will  be  found  later  on  that, 
in  the  case  of  combinations  or  capitalistic  monopolies,  which  are  compara- 
tively a  recent  growth,  the  conditions  are  reversed,  the  principle  of  laissez 
faire  or  non-intervention  being  invoked  on  behalf  of  such  monopolies  them- 
selves, and  state  control  being  deprecated  by  them  as  being  destructive  of 
their  freedom  of  action.     (See  §  5  post). 

3  For  a  fuller  classification  see  Lecture  II. 


(2)  Legal    Monopolies,    deriving     their    origin 

from  express  grant  or  authority  or  from 
the  direct  sanction  of  common  law  or  sta- 
tute. These  include  patents,  copyrights, 
trade-marks,  etc.  (see  §  4). 

(3)  Capitalistic  Monopolies,  otherwise  known  as 

Trusts  and  Combines  which  are  the  out- 
come of  the  acts  of  an  individual  or  indi- 
viduals— in  other  words,  the  outcome  of 
the  social  will,  or  of  social,  industrial  and 
economic  conditions,  and  independent  of 
express  grant  or  authority  (see  §  5). 

(4)  Governmental   and   Municipal  Monopolies. 

These  really  come  under  the  second  class. 
But  they  are  treated  separately  lor  reasons 
indicated  later  (see  Lecture  II) . 

With  the  above  rough  classification  before  us,  let 
us  proceed  to  analyse  the  notion  of  monopoly. 


ANALYSIS   OF   THE  NOTION  OF  MONOPOLY. 


§  i.     DIFFERENTIAL  ADVANTAGE — An  Essential  Basis 

of  Monopoly. 

One  of  the  fundamental  ideas  which  go  to  make  Differential 
up  the  notion  of  monopoly  is  the  idea  of  differential 
advantage,  or  difference  of  return  to  equal  effort. 
As  an  economic  phenomenon,  it  appears  in  diverse 
forms,  and  its  value  has  been  estimated  differently 
by  different  economists.  It  may  be  said  that  there 
are  few  commodities  of  which  the  production  or  dis- 
tribution has  not,  at  some  stage  or  other,  been  assist- 
ed by  special  or  differential  advantages  of  soil  or 
situation,  by  peculiar  talent  or  aptitude  on  the  part 
of  the  producer  or  seller,  or  by  special  processes  (of 
manufacture  and  the  like)  not  accessible  to  the  rest 
of  its  producers.  Thus  in  one  sense  the  secret  of 
success  in  all  competition,  and  all  economic  activity, 
is  to  avail  oneself  of  such  advantages.  Taken  in  this 
sense,  monopoly  would  seem  to  cover  the  whole  field 
of  economic  activity.  At  the  same  time,  it  is  well 
recognized  that  in  some  cases  of  purchase,  produc- 
tion, or  sale,  such  special  advantages  attain  a  predom- 
inance which  justifies  their  being  regarded  as  a  class 
by  themselves.  Take,  for  example,  the  case  of  the 
so-called  '  natural  monopolies/  such  as  railways, 
canals,  tramways  and  other  local  rapid-transit  agen- 
cies ;  the  supply  of  gas,  water  or  electricity — some  of 
them  local  or  municipal  monopolies;  the  supply  of 
coal  or  other  mineral,  available  only  from  a  particu- 
lar local  area,  and  so  on.  In  these  cases,  the  mon- 
opoly obviously  arises  from  inherent  natural  advan- 
tages. Two  tramways  cannot  run  down  one  and  the 
same  street,  two  railways  cannot  run  through  the 
same  area,  two  plants  for  the  supply  of  gas,  water, 
or  electricity  cannot  exist  within  the  same  town, 
without  involving  a  ruinous  waste  of  resources  due  to 
such  competition.  Therefore,  the  individual  or  the 
company  first  in  the  field  must  necessarily  enjoy  the 


monopoly.     So,  if  there  be  a  fund   of  latent  power 
locked  up  in  some  creation  of  Nature  such  as  the 
Niagara  Falls  in  America,  or  the  Cauvery  Falls  in 
Southern  India,  anybody  having  the  privilege  of  uti- 
lising such  power  will  have  a  monopoly  based  upon 
the  inherent  properties  of  the  water-fall.     The  above 
illustrations,  all  drawn  from  amongst  natural  mon- 
opolies, show  clearly  what  a  pre-eminent  part  differen- 
tial advantage  plays  in  them.     But  it  is  not  present 
in   natural  monopolies   alone.     In   all  the    different 
types  of  monopoly,  it  is  an  essential  and  invariable 
element.     Consider  one  or  two  homely  illustrations. 
Let  two  men  of  equal  capacity  and  with  equal  re- 
sources cultivate  two  plots  of  land  of  unequal  fer- 
tility.    The  result  would  naturally  be  that  the  happy 
possessor  of  the  more  fertile  soil  would  succeed  and 
drive  the  other  to  the  wall — he  would  enjoy  a  mon- 
opoly.     Again  let   two  men  of  unequal  intellectual 
capacity   be   employed   in  the  same  department  of 
activity.     The  one  having  superior  intellect  would,  of 
course,  succeed  and  might  ultimately  drive  the  other 
out  of  the  field.     In  other  words,  he  would  enjoy  a 
monopoly.     In  the  former  case,  the  differential  ad- 
vantage   is   physical,    in  the   latter   psychical.     But 
the  principle  is  the  same  in  both,  viz.  that  production 
assisted  by  natural  qualities  or  special  facilities  gives 
more  valuable  results  than  production   not  so  assisted. 
Thus  the  fundamental  notion  of  monopoly  is  present 
in  both.     One  of  the  greatest  economists  of  the  Eng- 
lish Classical  School  says  while  dealing  with   mono- 
poly :     "Now  it  is  clear  that  the  production  in  which 
nt)  appropriated  natural  agent  has  concurred  is  the 
only  production  which  has  been  made  under  circum- 
stances  of   perfectly   equal   competition.      And   how 
few  are  the  commodities  of  which  the  production  has 
in  no  stage  been  assisted  by  peculiar  advantages  of 
soil  or  situation,  or  by  extraordinary  talent  of  body 
or  mind,  or  by  processes  generally  unknown  or  pro- 
tected by  law  from  imitation  ?     Where  the  assistance 
of  these  agents,  to  which  we  have  given  the  general 
name  of  natural  agents,  has  been  obtained,  the  result 
is  more  valuable  than  the  result  of  equal  labour  and 
abstinence  unassisted  by  similar  aids.     A  commodity 
thus  produced  is  called  the  subject  of  a  monopoly, 


and  the  person  who  has  appropriated  such  a  natural 
agent  a  monopolist." 

§  2.     LIMITATION — A  Basis  of  Monopoly. 

The  second  point  which  has  to  be  observed  is 
that  an  article  which  is  the  object  of  a  monopoly  is 
limited  in  quantity.  This  is  a  separate  and  indepen- 
dent idea  going  to  the  concept  of  monopoly  and, 
therefore,  requires  independent  treatment.  Prof. 
Marshall,  in  his  own  inimitable  fashion,  gives  a  very 
happy  illustration  of  this  idea.  '"Suppose,"  he  says, 
"that  a  meteoric  shower  of  a  few  thousand  stones  as 
hard  as  diamonds,  but  very  large,  fell  all  in  one  place  ; 
so  that  they  were  all  picked  up  at  once  and  no 
amount  of  search  could  find  any  more.  These  stones, 
able  to  cut  the  hardest  metal,  would  revolutionize 
many  branches  of  industry,  and  the  owners  of  them 
would  have  a  differential  advantage  in  production 
that  would  afford  a  large  producer's  surplus."  It 
will  be  observed  that  the  significance  of  the  illustra- 
tion is  that  the  quantity  or  number  of  the  mete- 
oric stones  in  question  is  limited  and  cannot  be 
increased.  Take,  again,  the  case  of  the  legendary 
Indian  King  who  while  out  hunting  lost  his  way  in 
the  forest  and  was  almost  dying  of  thirst  when  he 
suddenly  met  a  man  with  a  cupful  of  water.  The 
proud  possessor  of  the  cup  of  water  was  in  every 
sense  a  monopolist  and  could  fix  his  own  price,  for  no 
more  water  was  to  be  had  for  love  or  money.  Thus 
limitation  in  the  quantity  of  the  commodity  is  an  in- 
gredient in  the  concept  of  monopoly ,  although  every  case 
of  limitation  is  not  a  case  of  monopolv. 

§  3.     EXCLUSIVENESS — A  Basis  of  Monopoly. 

Exclusiveness  is  one  of  the  underlying  ideas  mak- 
ing  up   the  notion  of  monopoly.     It  is,  in  fact,  ixn- 
plied  in  the  idea  of  limitation  above  discussed ;  and  but  this  idea  is 
the   illustration  chosen   by    Prof.  Marshall  seeks  to  ^Oprfie°dr^stshe 
express  this  kindred  idea  equally    well.     The  mete-  idea  of  limitation, 
oric  stones  are  picked  up  all  at  once  and  become  the 

1  William  Nassau  Senior's  *  Political  Economy.' 

2  Marshall's  '  Principles  of  Political  Economy.' 


8 


Lord  Coke's 
definition  adopts 
this  view. 


Blackstone. 


Rulings  of 
American 
Courts. 


exclusive  possession  of  a  few.  Hence  the  monopoly. 
Where,  again,  the  number  of  sellers  is  limited  to  a 
class  or  where  a  commodity  is  the  special  and  pecu- 
liar product  of  a  limited  area,  there  must  be  a  mon- 
opoly. It  is  in  this  sense  that  Adam  Smith  speaks  of 
the  "  monopoly  of  the  colonial  trade/'  and  Cairnes 
and  Prof.  Bastable  of  a  "country  having  the  mon- 
opoly of  an  article "  (although  the  traders  in  the 
privileged  country  are  not  supposed  to  be  in  com- 
bination). So  Mill  speaks  of  the  "natural  monopoly 
of  skilled  labourers/' 

Monopoly  looked  at  from  this  point  of  view 
means  an  exclusive  privilege  or  the  possession  or  as- 
sumption of  anything  to  the  exclusion  of  other  posses- 
sors.1 This  is  a  most  essential  idea  and  has  been 
emphasised  from  very  olden  times.  Thus  Lord  Coke 
describes  monopoly  as  "a  power  granted  to  any  per- 
son or  persons,  bodies  politic  or  corporate,  for  the  sole 
buying,  selling,  making,  working  or  using  of  anything, 
whereby  any  person  or  persons,  bodies  politic  or 
corporate,  are  sought  to  be  restrained  of  any  freedom 
or  liberty  that  they  had  before,  or  hindered  in  their 
lawful  trade." a  Blackstone,  following  soon  after, 
adopts  Coke's  definition  and  observes:  "Monopolies 
are  much  the  same  offences  in  other  branches  of  trade 
that  engrossing  is  in  provisions,  being  a  license  or 
privilege  allowed  by  the  King  for  the  sole  buying  or 
selling,  making,  working  or  using  of  anything  what- 
soever; whereby  the  subject  in  general  is  restrained 
from  that  liberty  of  manufacturing  or  trading  which 
he  had  before."  3  Recent  rulings  of  American  Courts 
bring  out  this  point  of  exclusiveness  as  a  test  of 
monopoly  with  great  force  and  vividness.  The 
following  is  an  instructive  specimen  :  "A  monopoly 
exists  where  all  or  so  nearly  all  of  an  article  of  trade 
or  commerce  within  a  community  or  district  is 
brought  within  the  hands  of  one  man  or  one  set  of 


1  "  The  possession  or  the  assumption  of  anything  to  the  exclusion  of 
other  possessors ;  thus  a  man  is  popularly  said  to  have  a  monopoly  of  any 
business  of  which  he  has  acquired  complete  control " — Century  Dictionary. 
Quoted  in  Continental  Securities  Co.  v.  Interborough  Rapid  Transit  Co. 
(U.S.C.C  ),  165,  Fed.  945,  956.  The  definition  is  quoted  in  various  other 
cases  in  America.  (See  Joyce  on  Monopolies,  §  8,  note  28). 

a  Coke  3  Inst.  181. 

8  Blackstone's  Commentaries  Book  IV,  p.  159. 


men,  as  to  practically  bring  the  handling  or  produc- 
tion of   the  commodity  or   thing  within  such   single  HOW  exclusive 
control  to  the  exclusion  of  competition  or  free  traffic  brou^hVabout 
therein.    Anything  less  than  this  is  not  a  monopoly."  l 
Such   single  control  as  is  referred  to  above  may  be  (i)  By  drcumstan- 
brought    about    by    various   sets   of    circumstances.  £es  ^^es*1 
Firstly,  it  may  be  determined  by  the  very  nature  of  inherent  in  the 
the  commodity  itself  and  natural  or  physical  condi-  business  itself- 
tions   governing  its  production,  in  which   case  it    is 
rightly  designated  a  '  natural '  monopoly  (see  §  i  ante) .  (i1) 
Secondly,  it  may  be  brought  about  by  Trusts,  Kar-  tiveiy" 
tells  or  Combinations,  by  the  use  of  methods  which  gr°wth. 
will  be  discussed  later  in  §  5.     Thirdly,  one  of  the  time-  (*«)  B7  express 
honoured  ways  of  bringing  the  production,  handling  or  authority, 
sale  of  a  commodity  within  the  exclusive  control  of 
one  man  or  body  of  men  is  by  express  grant  or  con- 
cession from  the  Sovereign,  or  some  high  public  autho- 
rity.    A  monopoly  so  created  is  usually  called  a  'legal 
monopoly. '     This  leads  us  to  the  next  feature  of  a 
monopoly. 

§  4.     EXPRESS  GRANT  OR  AUTHORITY — A  Basis 
of  Monopoly. 

One  of  the  time-honoured  ways  of  creating  a 
monopoly  is  by  express  grant  or  authority.  It  must 
be  observed  at  the  outset  that  this  feature  is  not 
common  to  all  monopolies.  It  is,  however,  the  charac- 
teristic of  the  oldest  monopolies  and  certain  others 
that  have  also  come  down  from  fairly  olden  times, 
such  as  the  exclusive  right  obtained  by  royal  patent, 
the  copyright  of  an  author  or  artist,  the  right  to  the 
use  of  a  trademark.  These  rights,  to  be  discussed 
presently,  go  under  the  name  of  f  legal  monopolies.' 
There  are  some  who  hold  the  view  that  the  term  'mon- 
opoly '  ought,  in  strictness,  to  be  applied  to  these  alone, 
and  should  be  denied  to  that  modern  phenomenon 

1  Herriman  v.  Menzies,  115  Cal.  16,  20,  Supreme  Court;  46  Pac.  Rep. 
730  (1896).  Quoted  by  F.  H.  Cooke  in  his  '  Law  of  Combinations  Monopolies 
and  Labour  Unions,'  2nd  edition,  p.  215,  "Monopoly  implies  an  exclusive 
right,  from  which  all  others  are  debarred,  and  to  which  they  are  subser- 
vient "—United  States  Chemical  Co.  v.  Provident  Chemical  Co.,  64  Fed.  946, 
950,  citing  Green's  case,  52  Fed.  104.  "But  what  is  a  monopoly,  as  under- 
stood in  law  ?  It  is  an  exclusive  right,  granted  to  a  few,  of  something 
which  was  before  of  common  right" — Charles  River  Bridge  v.  Warren  Bridge, 
ii  Pet.  (36  U.S.)  420,  607  ;  9  L.  Ed.  773,  per  Mr.  Justice  Story. 


10 

of  monopolistic  combination,  whereby  previously  com- 
peting businesses  are  centralised  or  concentrated  so 
as  to  bring  the  whole  market  in  respect  of  a  particu- 
lar commodity  within  the  single  control  of  a  person 
or  combination.1  This  appears  to  be  a  very  narrow 
view.  Equally  narrow  is  the  view  of  those  who  go  to 
the  opposite  extreme  and  restrict  the  term  monopoly 
to  the  modern  combination  alone,  to  the  exclusion  of 
the  so-called  legal  monopolies. 

MONOPOLY  AGAINST   THE  SPIRIT   OF   ENGLISH   LAW. 

The  conflict  between  the  King  and  people  of 
England  in  regard  to  monopolies  arose  mainly  in  con- 
nection with  the  so-called  legal  monopolies.  As  a  result 
of  such  conflicts  at  various  epochs  emerged  the  doc- 
trine that  monoplies  were  against  the  spirit  of  English 
law.  To  begin  with,  monopoly  is  against  the  spirit  and 
provisions  of  the  Magna  Charta :  A  ut  dissaisietur  de 
libero  tenemento  suo  vel  libertatibus,  vel  liberis  consuetu- 
dinibus  suis  etc.,  in  other  words,  no  man  shall  be 
dispossessed  of  his  freehold,  that  is,  land  or  livelihood, 
or  of  his  liberties  or  free  customs,  that  is,  of  such 
franchises  or  free  customs  as  belong  to  him  of  his 
birthright.  The  word  liberties  has  various  signifi- 
cations, as  the  laws  of  the  realm,  franchises  and  privi- 
leges bestowed  by  the  King,  and  the  natural  freedom 
possessed  by  the  subject  of  England ;  and  as  being 
opposed  to  this  last,  monopolies  are  contrary  to  the 
Great  Charter.4 

The  theory  of  English  common  law  has  always 
been  that  every  individual  must  be  left  absolutely 
free  to  choose  and  carry  on  what  calling  he  likes,  and 
to  develop  whatever  sort  of  skill  may  be  adequate  to 
such  calling.  He  must  be  able  to  earn  an  honest 
living  by  any  lawful  employment,  and  for  that  pur- 
pose he  must  be  left  perfectly  free.  This  general  right 
to  freedom  in  the  choice  and  conduct  of  trade  was 
steadily  maintained  by  pre- Elizabethan  Judges. 3  The 


1  Vide  Lectures  XI,  XII. 

2  See  Taswell-Langmead's  English  Constitutional  History,  p.  138  ;  also 
Coke's   Second   Institutes,  Vol.  i,  pp.   1-77,  and   Thomson's   Magna  Charta 
referred  to  in  Taswell-Langmead. 

3  A  striking  note  of  dissent  is  to  be  found  in  the  utterance  of  Chief 
Justice  Sir  James  L,ey  who  observes:  '*  For  that  God,  at  the  original  crea- 


*' 


II 

social  and  economic  fabric  which  this  theory  of  free- 

dom has  built  up  is  that  of  free  competition  which  Anything 

has  been  called  "  the  life-blood  of  commerce."     Any-  Jj£J^ts  free 

thing  -calculated  to  place  fetters  upon  free  competi-  competition  is, 

tion  is  void  at  common  law.     It  is  on  this  ground  f^kinJ  void 

that  Lord   Coke   after  having   defined  monopoly  in  at  common  law. 

the  above  manner  (vide  §  3  ante)  observes  :     "  That  Lord  Coke  : 

monopolies  are  against  the  ancient  and  fundamental  j^2t°th!  &1 

laws  of  the  realm  and  that  the  monopolist  was  in  ancient  and 

times  past,  and  is  much  more  now,  punishable 

obtaining  and  procuring   of   them,   we   will  demon- 

strate  by   reason    and  prove  it  by  authority";  and 

then  he  proceeds   to  throw   his   argument   into  the 

form   of  a  syllogism  thus  :     "  Whatsoever  offence  is 

contrary  to  the  ancient  and  fundamental  laws  of  the 

realm,  is  punishable  by  law  ;    but  the  use  of  a  mon- 

opoly is  contrary  to  the  ancient  and    fundamental 

laws  of  the  realm  ;    therefore,  the  use  of  a  monopoly 

is  punishable  by  law."  l 

Despite  the  fact  that  the  common  law  of  the 
realm  was  and  is  against  such   privileges,  we  find, 
however,  that  monopolies  by  special  grant,  concession  Yet  monopolies, 
or   royal  patent,   were   not  unknown.      One  of 
articles,   says  Coke,  wherewith  William  de  la  Pool,  used  to  be 
Duke  of  Suffolk,  was  charged  was  for  procuring  of 
diverse  liberties  in  derogation  of  the  common  law  and 
hindrance   of  justice.'2     The   common   law   principle 
that  grants,  or  contracts  in  restraint  of  trade,  were 
invalid,  as  being  contrary  to  the  public  advantage, 

tion  of  man,  had  ordained  one  man  to  one  trade  more  than  to  another,  and 
that  no  civil  republic  can  subsist  without  distinction  of  traders  ----  There 
was  a  distinction  of  trades  and  a  man  could  not  use  two  "—2  Rol.  Rep.  392. 
This  almost  sounds  like  an  echo  of  the  old  Indian  classification  into  castes 
founded  upon  the  basis  of  their  respective  callings.  It  is,  however,  really  an 
exception  to  the  general  trend  of  informed  opinion  in  England  in  those 
days. 

1  See  Coke  3  Inst.  181,  where  the  following  case  is  also  given.     "  King 
Philip  and  Queen  Mary  by  their  letters  patent  granted  to  the  mayo  •,  bailiff 

and  burgesses  of  Southampton,  and  their  successors  (for  that  King  Philip  The  case  of 

first  landed  there)  that  no  wines  called  malmsies  brought  into  this  realm  tfoe  malmsey 

from  the  parts  beyond  the  seas  by  any  liegeman  or  alien,  should  be  dis-  wines. 

charged  or  landed  in  any  other  places  of  the  realm  but  only  at  the  said 

town   and  port  of  Southampton,  with  a   prohibition,    that   no  person  or 

persons  shall  do  otherwise,  upon  pain  to  pay  treble  custom  :    and  it  was 

resolved  by  all  the  judges  of  England   that  this  grant  made  in  restraint 

of  the  landing  of  the  same  wines  was  against  the  laws  and  statutes  of  the 

realm,  viz.  Magna  Charta  29,  30  ;   9  E.  Ill  C.  i.  ;    14  E.  Ill;    25  E.  Ill  C.  2  ; 

27  and  28  E.  Ill,  Statute  of  the  Staple  ;    2  R.  II  C.  i  ,  and  others  ;    and  also 

that  the  assessment  of  treble  custom  was  against  law  and  merely  void." 

2  See  Coke  3  Inst.  181. 


In  the  reign 
of  Queen 
Elizabeth,  this 
practice  became 
notorious. 


Old  cases  under 
the  head  of 
royal  patents 
— the  principles 
which  they  lay 
down. 


Cases  concerning 
the  exclusive 
right  of  printing 
the  holy 
scriptures, 
law  books,  etc. 


Cases  relating 
to  exclusive 
right  of  printing. 


12 


was  often  challenged  and,  in  practice,  often  departed 
from.  In  fact,  in  the  reign  of  Queen  Elizabeth  the 
practice  of  granting  patents  for  monopolies  to  ser- 
vants and  courtiers  l  by  way  of  reward  or  encourage- 
ment, was  carried  to  such  an  extreme  as  to  constitute 
a  standing  menace  to  all  honest  competitive  enterprise 
and  emulation.  The  patents  granted  by  her  were 
sold  by  the  patentees  to  others,  who  were  thus  enabled 
to  raise  the  price  of  the  commodity  as  high  as  they 
pleased,  to  the  great  detriment  of  the  general  public. 
The  old  reported  cases  under  the  head  of  royal 
patents  fall  into  several  well-defined  classes.  Many 
of  them  were  cases  of  first  impression  and  had  to  be 
decided  on  their  own  merits  and  in  view  of  the 
principles  involved.  In  one  class  of  cases,  it  was 
held  that  the  King  might  grant  to  particular  persons 
the  sole  use  of  some  particular  employments,  as  of 
printing  the  holy  scriptures  and  law  books.51  The 

1  An  intsance  of  an  established  industry  deliberately  made  over  to  a 
courtier  with  monopoly   privileges  is  the  starch  monopoly  granted  to  one 
Young.     The  patent    was  granted  to  him  on  April  15,  1588  (Pat.  30  Eliz., 
pt.  9).     It  was  transferred  to  Pakington  July  6,  1594  (Pat.  36  Eliz.,  pt.  13) 
and  re-issued  May  20,   1598  (Pat.  40  Eliz.,  pt.  16).     Other  examples  are  the 
patents    for    playing-cards  to  the  "  pensioners."      Bowes   and  Bedingfield 
(Pat.   1 8  Eliz.,    pt.  12,  July  28,  1576)  ;    that  for  vinegar  to  Richard  Drake, 
"groom  of  the  privy  chamber"  (Pat.  36  Eliz.,  pt.  u,  March  23,  1584)  ;    and 
that  to  Thomas  Wilkes  for  salt.     Of  royal  favourites,  Sir  Walter  Raleigh  was 
perhaps  the  most  liberally  supplied.     See  '  The  English  Patents  of  Monopoly  ' 
by  William  Hyde    Price  in  which  the  student   will  find  much    interesting 
information  on  the  subject  of  English  monopoly  patents  based  upon  original 
research. 

2  The  following   cases   will    serve   as   illustrations :  The    Company    of 
Stationers'  Case  (isth  Nov.   1681) — 2  Ch.  Ca.  66.     This  was  a  case  of  patent 
of  the  sole  printing  and  trading  in  almanacs.     In  it  will  be  found  a  reference 
to  the  still  earlier  cases  of  John  Streater  v.  Abel  Roper  and  others  and  Richard 
Atkinson  and  another  v.  George  Moore  and  others  concerning  the  privilege  of 
printing  law  books.    The  Company  of  Stationers'  Case  (28th  Nov.   1681),  2  Ch. 
Ca.  76, — concerning   the    sole    printing   and  vending  of  statute  books.     The 
Company  of  Stationers'   Case,  2  Ch.  Ca.  93, — concerning  the  sole  printing 
of  English    Bibles  and  Statute    Books.     An  anonymous   case,  Vernon    120, 
in  which  an  injunction  was  sought  for  stopping  the  sale  of  English  Bibles 
printed  beyond  sea  on  the  ground  that "  for  the  great  mischief  that  might  arise 
from  these  Bibles,  if  they  should  be  suffered  to  be  publicly  sold,  the  sale  ought 
to  be  prohibited  by  Court  upon  that  politic  account  as  well  as  to  quiet  the 
King's  patentees  in  their  possession."      Hills  v.   Universitat  Oxon,  Vernon 
276, — concerning  a  patent  granted  by  King  Charles  I  to  the  University  of 
Oxford   to   print    Bibles    and   other  books   not   prohibited   and  in   which 
"  the  Lord  Keeper  was  of  opinion  that  it  was  never  meant  by  the  patent 
to  the  University  that  they  should  print  more  than  for  their  own  use.  or 
at  least  but  some  small  number  more,  to  compensate  their  charge  ;    but 
as  they  now  manage  it  they  would   engross  the  whole  profit  of  printing 
to  themselves  and  prevent  the  King's  farmers  of  the  benefit  of  their  patent." 
The  Corporation  of  Stationers  v.  Seymor,  3  Keb.  792,  in  which  it  was  found 
that  « '  the  usage  of  printing  hath  been  regulated  by  the  King  and  that  he  by 
patent   granted  them  ( the  plaintiffs )  the  sole   printing  of   almanacs   and 


13 

reasons  given  were  that  "the  invention  of  printing 
was  new  ;  that  it  concerned  the  State  and  was  matter 
of  public  care ;  that  it  was  in  the  nature  of  a  pro- 
clamation and  none  could  make  proclamations  but  the 
King  ;  that,  as  to  law  books,  the  King  has  the  mak- 
ing of  judges,  Serjeants  and  officers  of  law  ;  that  they 
are  printed  in  a  particular  language  and  character 
with  abbreviations,  etc/'  l  Another  important  class 
of  cases  related  to  companies  of  merchant  adventurers 
who  had  secured  exclusive  rights  of  trading  and 
claimed  relief  against  encroachment  of  such  rights  by 
interlopers.  The  case  of  the  East  India  Company  v.  East  India 
Sandys %  stands  out  prominently  as  the  type  of  such 
cases.  The  company  claimed  that  the  King  had 
by  his  letters  patent  granted  to  them  the  sole  trade 
of  buying  and  selling  in  the  East  Indies,  and  that 
no  one  else  should  trade  there.  They  brought  an 
action  against  Sandys  for  having  sent  a  ship  into 
the  forbidden  waters  to  the  prejudice  of  the  company. 
It  was  urged  in  defence  "  that  trade  is  free  ;  that  the 
common  law  is  as  much  against  monopoly  as  against 
ingrossing  3  and  that  they  differ  only  that  a  monopoly 
is  by  patent  from  the  King,  the  other  is  by  act  of  the 
subject  between  party  and  party,  but  the  mischiefs 
are  the  same  from  both,  and  there  is  the  same  law 
against  both."  It  was  ultimately  held  by  Chief  Justice 
Jeffries  and  his  brother  justices  that  the  patent  was 
good  and  binding.*  The  argument  of  Holt  and  Treby 
(afterwards  Chief  Justices  of  the  King's  Bench)  as 
counsel  in  the  case  is  replete  with  interest  even  to 
the  present  day,  containing  as  it  does  all  the  points 
that  can  possibly  be  taken  for  and  against  such 
exclusive  trade. 

But  of  supreme  interest  is  the  discussion  that  Darcy  v. 
arose  in  the  great  case  of  monopolies  Darcy  v. 


common  prayer  books  "  and  judgment  was  awarded  for  the  plaintiffs.     See 
also  Company  of  Stationers  v.  Parker — Skin.  223. 

1  See  Bac.  Abr.  Vol.  V.  ;  Skin  234. 

2  Skin.  165,  223,  226. 

3  For  a  definition  of  '  Ingrossing '  see  post  under  §  5. 

*  "  A  monopoly  is  no  immoral  act,  but  only  against  the  politick  part 
of  our  law  ;  which  if  it  happen  to  be  of  advantage  to  the  publick,  as  this 
trade  is,  then  it  ceases  to  be  against  the  politique  part  of  the  law  and 
so  not  within  the  law  of  monopolies  " — Skin.  226  ;  10  Howell  State  Trials 
386,  425. 

&  i"i  00.84;  Moor  671;  Noy.  173;  2  Inst.  47.  It  was  this  case  which 
really  hastened  the  Statute  of  Monopolies,  as  Coke  observes:  "The  said 


which  was  decided  in  the  forty-fourth  year  of  the  reign 
of  Queen  Elizabeth  by  Chief  Justice  Popham.  Edward 
Darcy,  a  groom  of  the  Privy  Chamber  to  the  Queen, 
brought  an  action  against  T.  Allein,  haberdasher  of 
London,  and  declared  that  Queen  Elizabeth  "  intend- 
ing that  her  subjects  being  able  men  to  exercise 
husbandry  should  apply  themselves  thereunto,  and 
that  they  should  not  employ  themselves  in  making 
playing  cards  which  had  not  been  any  ancient  man- 
ual occupation  within  this  realm,  and  that  by  making 
such  a  multitude  of  cards,  card-playing  was  becoming 
more  frequent,  and  especially  among  servants  and 
apprentices  and  poor  artificers ;  and  to  the  end  that 
her  subjects  might  apply  themselves  to  more  lawful 
and  necessary  trades"  by  her  letters  patent  granted 
to  the  plaintiff  full  power  license .  and  authority  to 
buy  in  any  part  beyond  the  sea  all  such  playing  cards 
as  he  thought  fit  and  to  import  them  into  the  realm 
and  that  he  should  have  and  enjoy  the  whole  trade, 
traffic  and  merchandise  of  all  playing  cards.  The 
defendant,  knowing  the  grant  and  prohibition  in 
the  plaintiffs  letters  patent,  caused  several  grosses 
of  playing  cards  to  be  made  and  sold  in  the  country, 
and  imported  others  and  was  accordingly  sued  for 
infringing  upon  the  exclusive  privileges  of  the  plain- 
tiff. The  case  was  argued  by  eminent  counsel  and  all 
possible  points  were  taken  for  and  against  the  legality 
of  such  monopoly.  It  is  scarcely  possible  here  to 
enter  upon  a  detailed  discussion  of  all  the  principles 
enunciated  and  put  forward  in  the  case.  But  there 
are  three  inseparable  incidents  to  every  monopoly 
which  were  forcibly  brought  out  in  the  course  of 
argument  as  affecting  the  common  weal,  and  it  would 
be  useful  to  consider  those.  First,  that  every  mon- 
opoly is  calculated  to  raise  the  price  of  commodity 
in  respect  of  which  the  monopoly  is  enjoyed,  "for  he 
who  has  the  sole  selling  of  any  commodity  may  and 
will  make  the  price  as  he  pleases/'1  Secondly,  after 

case  of  monopolies,  Trin.  44,  Eliz.,  was  the  principal  motive  of  the  King's 
book  mentioned  in  the  preamble  of  this  Act  (Stat.  21  Jac.  C.  3)" — Coke 
3  Inst.  183. 

l  This  argument  is  adopted  in  E.I.  Co.  v.  Sandys:  "All  evils  attend- 
ing monopolies  are  in  this — the  first  evil  is  enhancing  the  price  mentioned 
in  1 1  Co.  Rep.  88.  Nothing  is  plainer  than  that  they  have  had  the  setting 
of  their  own  price,  and  for  a  man  to  come  to  such  a  contempt  of  riches 


che°s 


15 

the  monopoly  is  once  granted  there  is  a  tendency  for 
the  commodity  to  go  down  in  quality,  "for  the  pa- 
tentee having  the  sole  trade  regards  only  his  private 
benefit  arid  not  the  common  weal."  Thirdly,  it 
throws  honest  and  independent  workmen  out  of  em- 
ployment and  "tends  to  the  impoverishment  of 
diverse  artificers  and  others  who  before,  by  the  labour 
of  their  hands  in  their  art  or  trade,  had  maintained 
themselves  and  their  families  who  now  will  of  neces- 
sity be  constrained  to  live  in  idleness  and  beggary." 
On  these  and  other  grounds  l  it  was  held  that  the 
grant  was  utterly  void  as  being  a  monopoly  and 
against  the  common  law  and  diverse  Acts  of  Parlia- 
ment:' 

as  not  to  get  what  he  can  when  he  hath  it  in  his  power  is  such  a  virtue 
as  is  not  ordinarily  met  with  in  mankind" — Skin.  170. 

1  The  grant  was  declared  void  for  the  following  reasons  : — 

"  (i)  All  trades,  as  well  mechanical  as  others,  which  prevent  idleness, 
(the  bane  of  the  commonwealth)  and  exercise  men  and  youth  in  labour, 
for  the  maintenance  of  themselves  and  their  families,  and  for  the  increase 
of  their  substance,  to  serve  Queen  when  occasion  shall  require,  are  profit- 
able for  the  commonwealth;  and  therefore  the  grant  to  the  plaintiff  to 
have  the  sole  making  of  these  is  against  the  common  law  and  the  benefit 
and  liberty  of  the  subject. 

(2)  The  sole  trade  of  any  mechanical  artifice,  or  any  other  monopoly,  is 
not  only  a  damage   and   prejudice  to  those  who  exercise  the  same  trade, 
but  also  to  all  other  subjects  ;  for  the  end  of  all  these  monopolies  is  for  the 
private  gain  of  the  patentees. 

(3)  The  Queen  was  deceived  in  her  grant;   for  the  Queen  as  by  the  pre- 
amble appears,  intended  it  to  be  for  the  weal  public  and  it  will  be  employed 
for  the  private  gain  of  the  patentee,  and  for  the  prejudice  of  the  weal  public. 

(4)  This  grant  is  primae  impressionis ,  for  no  such  was  ever  seen  to  pass 
by  letters  patents  under  the  great  seal  before  these  days,  and  therefore,  it  is 
a  dangerous  innovation  as  well  without  any  precedent  or  example  as  with- 
out authority  of  law  or  reason  "     See  also  Bac.  Abr.  Vol.  V.  and  Hawk.  P.  C. 
Ch.  29  where  it  is  observed:  "  Also  it  hath  been  adjudged  that  the  King's 
grant  of  the  sole  making  importing  and  selling  of  playing  cards  is  void  not- 
withstanding the  pretence  that  the  playing  with  them  is  a  matter  merely  of 
pleasure  and  recreation  and  often  much  abused  and,  therefore,  proper  to  be 
restrained  ;  for  since  the  playing  with  them  is,  in  itself,  lawful  and  innocent, 
and  the  making  of  them  an  honest  and  laborious  trade,  there  is  no  more 
reason  why  any  subject  should  be  hindered  from  getting  his  livelihood  by 
this  than  any  other  employment." 

2  The  case  of  Davenant  v.  Hurdis  was  cited  in  support  of  this  position. 
"In  that  case  a  company  of  merchant  tailors  in  London  having  power  by 
charter  to  make  ordinances  for  the  better  rule  and  government  of  the  com- 
pany, so  that  they  were  consonant  to  law  and  reason,  made  an  ordinance 
that  any  brother  of  the  society  who  should  have  any  cloth  dressed  by  a 
cloth- worker,  not  being  a  brother  of  the  society,  should  put  one  half  of  his 
cloth  to  some  brother  of  the  same  society  who  exercised  the  art  of  a  cloth 
worker,  upon  pain  of  forfeiting  ten  shillings ;    '  and  it  was  adjudged  that 
the  ordinance,  although  it  had  countenance  of  a  charter,  was  against  the 
common  law,  because  it  was  against  the  liberty  of  the  subject ;  for  every 
subject,  by  the  law  has  freedom  and  liberty  to  put  his  cloth  to  be  dressed  by 
what  cloth- worker  he  pleases  and  cannot  be  restrained  to  certain  persons, 
for  that  in  effect  would  be  a  monopoly  and  therefore  such  ordinance^by  colour 
of  a  charter  or  any  grant  by  charter  to  such  effect,  would  be  void.'  " 


i6 


Public  policy 
demands  an 
adequate 
recognition  of 
these  three 
incidents  of 
monopoly  in 
every  legislation, 
or  judicial 
decision. 


It  will  be  seen  as  we  proceed  that  these  three 
grounds  are  fundamental,  and  no  sound  policy  of  legis- 
lation can  afford  to  disregard  them  under  any  set  of 
social  or  industrial  conditions.  Had  judicial  decisions 
in  England  and  in  America,  in  connection  with  the 
larger  developments  that  have  since  taken  place  in 
the  economic  world  in  the  shape  of  capitalistic  mon- 
opolies (see  post,  §  5)  proceeded  on  a  strict  and  un- 
biassed estimate  of  the  influence  of  these  three  factors, 
they  would  have  succeeded  in  defining  and  regulating 
public  policy  on  a  fairly  satisfactory  basis. 

Public  policy  is  a  very  unruly  horse  and  when 
once  you  get  astride  it  you  never  know  where  it  will 


What  is  '  public 

policy '  ?     Warning 

against  a  misuse  of  1      ,1. 

the  expression.       carry  you    . l     At  the  first  blush  these  words  appear 


The  problem  of 
monopoly  cannot 
be  solved  without 
regard  to  question 
of  public  policy. 


How  far  legislation 
and  judicial 
decisions  have 
successfully  kept 
this  end  in  view. 


Summary : — a 
monopoly  based 
on  express  grant 
is  a  '  concession.' 


to  carry  a  wholesale  condemnation  of  the  abuses  to 
which  the  application  of  the  principle  of  public  policy 
has  been  put.  Taken,  however,  as  words  of  warning 
they  serve  as  a  helpful  guide  through  the  mazes  of 
monopoly  law.  In  no  department  of  law  do  the 
notions  of  public  policy,  public  interest  or  public  weal 
play  such  a  considerable  part  as  in  that  of  monopoly. 
Indeed,  the  whole  problem  which  monopoly  law  has 
to  face  is  how  to  weigh  the  claims  of  different  social, 
economic,  customary  and  other  forces  at  work,  and 
judge  which  of  them  would  conduce  to  the  greatest 
good  of  the  community,  and  which  of  them,  on  that 
ground,  should  receive  the  stamp  of  legal  authority. 
It  must  be  confessed  that  this  standpoint  has  not 
uniformly  been  kept  in  view,  and  confusion  of 
thought  has  often  resulted  in  consequence.  An  en- 
deavour will  be  made  in  these  lectures  to  show  how  far 
legislation  and  judicial  decision  have  been  able 
successfully  to  keep  this  end  in  view.  In  so  far  as 
judicial  decisions  have  been  able  to  keep  clear  of 
prejudice  and  proceed  on  this  principle  of  public  good, 
they  have  evolved  a  consistent  and  harmonious  system 
of  law  applicable  not  only  to  monopolies  proper  but 
also  to  phenomena  akin  to  monopolies. 

To  sum  up  the  discussion  under  the  third  head, 
viz.  express  grant  as  a  basis  of  monopoly.  Mon- 
opoly looked  at  in  this  light  is  a  concession  a  or  exclusive 


252. 


1  Per  Burrough  J.  in  Richardson  v.  Mellish  (1824),  2  Bing.  229,  at  p. 

2  The  term  '  concession '  is  not  generally  used  in  England  with  reference 


17 

right  based  upon  an  express  grant  or  authority y  the  legal 

validity  of  such  grant  resting  ultimately  on  grounds  of  And  its  legal 

public  advantage.     It  is  on  the  ground  of  public  policy  Validit7  r«stsP* 

.•'-"    <w •       j  «•'«'.  ,  grounds  of  public 

that  the  King  s  grant  to  any  particular  corporation  l  welfare. 
of  the  sole  importation  of  any  merchandise  is  void. 
Hence  also  the  King's  charter  empowering  particular 
persons  to  trade  to  and  from  a  particular  place  is  void, 
so  far  as  it  gives  such  persons  an  exclusive  right 
of  trading  and  debarring  all  others.2  ' '  It  seems  now 
agreed  that  nothing  can  exclude  a  subject  from  trade 
but  an  Act  of  Parliament."  3 

EXCEPTIONS   TO   THE   COMMON   LAW   RULE  AS  TO 
MONOPOLIES. 

Such  being  the  general  view  of  the  common  law, 
we  may  now  pass  on  to  consider  the  exceptions  to  The  common  law 
such  law  which  are  well  recognised.     The  exceptions,  mono8  oile^But 
it  may  be  observed,  only  prove  the  rule,  inasmuch  as  there  are  well-  u 
their   justification   rests   on   the  principle   of   public  ^°fn^^cneP" 
good.    The  first  of  these  exceptions  is  a  patent  granted  public  policy, 
in   respect   of   a  new   invention ;    and   the  principle 
on  which  such  a  monopoly  patent  may  be  granted 
appears   to   have    been  well  recognised   before   the  First  Exception- 
Statute  of  Monopolies  (1624).     Thus  in  the  great  case  Patent- 
of  monopolies  Darcy  v.  Allein*we  find  the  principle  The  principle  of 
of  common  law  clearly  expounded.     t(  Where  any  man  ^££n<Jfaw' " 
by  his  own  charge  and  industry,  or  by  his  own  wit  or  patents,  discussed 
invention,  doth  bring  any  new  trade  into  the  realm, 
or  any  engine  tending  to  the  furtherance  of  a  trade 
that  never  was  used  before,  and  that  for  the  good  of 
the  realm ;  in  such  cases  the  King  may  grant  to  him 
a   monopoly  patent  for  some  reasonable  time,  until 
the  subjects  may  learn  the  same,  in  consideration  of 

to  these  special  privileges.     But  it  is  so  used  in  Prance  and  seems  rather  Use  of  the  term 
felicitous  for  expressing  the  idea  which  it  connotes.     It  has  been  current  in  '  concession '  in 
France  for  the  last  three  centuries,  and  is  used  in  the  sense  of  a  right  of  France  and 
property,  privilege  or  monopoly  granted  by  Government  to  individuals  or  India, 
groups  of  individuals,  in  land,  mines,  public  works,  railways,  performance 
of  stage-plays  and,  generally  speaking,  in  anything  that  can  be  monopo- 
lised.    In  India  it  is  used  most  often  of  mines^  as  in  the  case  of  the  ruby 
mines  of  Upper  Burma. 

l  The  Statute  of  Monopolies  21  Jac.  C.  3  makes  an  exception  in  favour 
of  corporations.     See  Sec.  IX  of  the  Statute. 

*  For  exceptions  to  this  rule  resting  on  considerations  of  public  advan- 
tage, see  supra. 

»  Bac.  Abr.  Vol.  V,  under  the  head  of  «  Monopolies.' 

*  Noy.  184. 


i8 


The  principle 
adopted  by  the 
Statute  of 
Monopolies,  21. 
James  i.  C.  3,  sees, 
5  and  6. 


Other  exceptions, 
besides  patent, 
provided  for  in 
the  Statute  of 
Monopolies. 


the  good  that  he  doth  bring  by  his  invention  to  the 
commonwealth,  otherwise  not."  This  principle  of 
exception  was  soon  afterwards  recognised  and  adopted 
by  the  Statute  of  Monopolies  in  sections  5  and  6  thereof. l 
Section  5  provided  that  the  Act  should  not  extend 
to  any  letters  patent  or  grants  of  privilege  thereto- 
fore made,  and  sec.  6  provided  for  a  similar  exception 
in  favour  of  patents  thereafter  to  be  made.  In  the 
former  case,  the  maximum  term  allowed  for  the  patent 
was  twenty-one  years  and  in  the  latter  case  fourteen 
years.  But  the  rest  of  the  provisions  in  both  the 
sections  are  similar.  Thus,  in  England,  the  Crown 
always  appears  to  have  exercised  a  control  over  the 
trade  of  the  country/  but  such  control  was  regulated 
and  kept  within  reasonable  limits  by  the  common 
law  and,  later,  by  the  Statute  of  Monopolies.  The 
effect  of  such  regulation  was  that  the  Crown  might 
grant  the  exclusive  right  to  trade  with  a  new  inven- 
tion 3  for  a  reasonable  period.  The  Statute  of  Monopo- 
lies, it  should  be  observed,  did  not  create  but  simply 
regulated  the  power  of  the  Crown,  in  granting  to  the 
first  inventors  the  privilege  of  the  sole  working  and 
making  of  new  inventions,  and  in  doing  so  it  simply 
carried  out  and  enforced  the  already  existing  principle 
of  common  law. 

The  principle  of  regarding  a  patent  for  a  useful 
invention  as  a  proper  exception  to  the  old  common 
law  prohibition  of  monopolies  has  been  adopted  in 
America*  by  Congress,  and  well  elucidated  in  many 

1  There  are  also  other  exceptions  provided  for  in  sees.  8,9,  10,  1 1  and  12 
of  the  Statute  which  save  warrants  to  justices,  charters  to  corporations, 
letters  patents  concerning  printing,  or  concerning  the  digging,  making  or 
compounding  of  saltpetre  or  gunpowder,  the  casting  or  making  of  ordnance 
or  shot  for  ordnance,  commissions  for  alum  or  alum-mines,  the  liberties  of 
the  Hoastmen  of  Newcastle  upon  Tyne,  licences  for  keeping  taverns,  etc. 

2  Vide  Elizabeth's  reply  to  the  address  which  was  presented  to  her  by 
the  House  of  Commons  touching  the  abuse  of  monopolies  and  praying  that 
the  patents  granted  by  her  might  be  repealed  or  superseded.     She  replied 
through  Lord  Keeper  that  she  "  hoped  her  dutiful  and  loving  subject  would 
not  take  away  her  prerogative,  which  is  the  choicest  flower  in  her  garden 
and  the  principal  and  head-pearl  in  her  crown  and    diadem  ;  but   would 
rather  leave  that  to  her  disposition,  promising  to  examine  all  patents  and 
abide  the  touchstone  of  the  law."      Taswell-Langmead's  English  Constitu- 
tional History,  p.  495. 

3  On  this  subject  of  novelty  of  the  invention  see  the  following  cases : — 
Rexv.  Arkwright,  Dav.  Pat.  Ca.  129;  Manton  v.  Moore,  ibid.  333;  Brunton  v. 
Hawkes,  4  Barn  &  A.  540  ;   Thomson  v.  Forman,  2  B.  Moo.  424 ;  Rex.  v.  Cutler, 
i  Stark  Ca.  354;  Wood  v.  Zimmer,  i  Holt  Ca.  58;  Bovill  v.  Moore,  Dav.  Pat., 
Ca.  361  ;  Edgebury  v.  Stephens,  i  Salk  447. 

*  U.S.  Rev.  Stat.  S.  4883-4936;  U.S.  Comp.  Stat.,  1901,  pp.  3380  et  seq.; 
Supp.,  1909,  pp.  1269  et  seq.     See  also  5  Fed.  Stat.  Annot.  p.  417  et  seq. 


cases  in  the  United  States.  Thus  in  a  case  decided  in 
the  year  1870  in  the  United  States  Supreme  Court, 
Mr.  Justice  Clifford  said : — Letters  patent  are  not  to 
be  regarded  as  monopolies,  created  by  the  executive 
authority  at  the  expense  and  to  the  prejudice  of  all 
the  community  except  the  persons  therein  named  as 
patentees,  but  as  public  franchises  granted  to  the 
inventors  of  new  and  useful  improvements  for  the 
purpose  of  securing  to  them,  as  such  inventors,  for  the 
limited  time  therein  mentioned,  the  exclusive  right 
and  liberty  to  make  and  use  and  vend  to  others  to  be 
used  in  their  own  inventions,  as  tending  to  promote 
the  progress  of  science  and  the  useful  arts,  and  as 
matter  of  compensation  to  the  inventors  for  their 
labour,  toil  and  expense  in  making  the  inventions, 
and  reducing  the  same  to  practice  for  the  public  benefit, 
as  contemplated  by  the  Constitution  and  sanctioned 
by  the  laws  of  Congress.1  The  following  is  another 
clear  exposition  of  the  policy:  "It  is  the  policy  of 
the  law  in  this  country  and  has  been  enacted  by  Con- 
gress, under  the  powers  given  to  it  by  the  constitu- 
tion, that  if  a  man  finds  out  something  new  and  use- 
ful, and  publishes  it  to  the  world  through  the  inter- 
mediation of  the  patent  office,  he  shall  in  exchange 
for  it  and  as  a  compensation  for  doing  so,  receive  a 
patent;  that  is,  he  receives  a  grant  of  monopoly  of 
manufacturing,  selling  and  using  that  particular  in- 
vention for  a  certain  period  of  time.  .  . .  That  mon- 
opoly is  not  a  monopoly  in  the  sense  in  which  the 
word  first  came  into  the  English  language  where, 
without  anything  at  all  except  the  mere  whim  of 
sovereign  power  some  extraordinary  privileges  were 
granted  to  individuals ....  There  is  nothing  obnoxious 
to  law  or  good  morals,  or  to  anything  else  in  the  fact 
that  a  patent  secures  to  the  holder  of  it  a  monopoly 
for  a  limited  period  of  time.'2 

Another  way  of  looking  at  a  patent  is  that  it  is 
of  the  nature  of  a  contract  between  the  Crown  and 
the  patentee,  whereby  the  Crown  secures  to  the 
patentee  the  right  to  vend  and  use  his  invention  for 
a  few  years,  the  consideration  for  such  privilege  being 

1  Seymour  v.  Osborne,  n  Wall  (60  U.S.)  516,  533. 

*  International  Tooth  Crown  v.  Hanks  Dental  Association  (U.S.C.C),  in 
Fed.  916,  917,  per  Lacombe,  Cir.  J. 


20 

the  good  brought  to  the  commonwealth  by  the  inven 
tor,  for  uhe  has  perfected  and  described  it  and  ha 
granted  its  use  to  the  public  forever  after."  L 

Contrary  view,  On  the  other  hand,  there  are  still  some  who  hoi 

stm  held  in  some    ^^  not  only  is  a  patent  privilege  a  true  monopoly, 

quarters,  mat  a  ,  *       ,     • ,  i  <  i. 

patent  is  an  odious  but  that  it  approaches  very  nearly  to  an  odious  mon- 
monopoiy.  opoly  in  its  restriction  of  the  pre-existing  public  right. 

Thus  Robinson  in  his  well-known  treatise  on  the  law 
of  patents  says :  ' '  The  nature  of  the  patent  privilege 
differs  from  an  odious  monopoly  in  this :  that  in  the 
odious  monopoly  the  public  are  deprived  of  some 
existing  method  of  enjoying  these  rights,  while  the 
patent  privilege  prevents  their  exercise  only  in  the 
new  direction  marked  out  by  the  discovery  of  the 
inventor.  But  in  both  cases  the  rights  restricted  are 
the  same,  and  the  effect  on  their  enjoyment  after  the 
monopoly  is  granted  is  identical.  That  a  patent  privi- 
lege is  a  true  monopoly  derogatory  to  common  right, 
is,  therefore,  the  correct  theory  concerning  it,  con- 
sidered in  itself."  * 

The  law  of  patents  In  India  substantially  the  same  law  prevails  as 
in  England  and  America.  The  Indian  Patents  and 
Designs  Act  of  1911  (Act  II  of  1911)  has  taken  advan- 
tage of  the  consolidation  of  the  English  statutes  which 
the  Patents  and  Designs  Act  of  1907  effected,  and  has 
brought  the  practice  and  procedure  in  this  country 
for  obtaining  an  exclusive  privilege  more  into  confor- 
mity with  that  of  the  United  Kingdom,  ( Invention, ' 
according  to  the  Act,  means  "any  manner  of  new 
manufacture,  and  includes  an  improvement  and  an 
alleged  invention/' 3  Although,  however,  an  invention 
includes  an  improvement,  it  does  not  by  any  means 
follow  that  any  improvement  is  an  invention.  It  is 
impossible  to  lay  down  any  hard  and  fast  rule  as  to 
what  improvements  should  be  considered  to  be  inven- 
tions. It  would  be  a  question  for  the  Court  to  deter- 
mine whether  the  amount  of  inventive  power  dis- 
played was  such  as  to  justify  the  grant  of  a  patent.* 

1  Joyce  on  Monopolies  §  283  ;  Halsbury's '  I^aws  of  England,'  Vol.  22, 
§  275  ;  Ipswich  Cloth  Worker's  Case  (1614),  Godb.  252. 

2  Robinson  on  Patents  (Ed.  1890). 
8  Sec.  2,  sub-sec.  8. 

*  I.Iv.R.  17.  All.  490.  In  the  same  case  it  is  observed:  "There  may 
be  a  valid  patent  for  a  new  combination  of  materials  previously  in  use  or  for 
a  new  method  of  applying  such  materials" — referring  to  Hill  v.  Thompson, 
and  Foreman,  3  Mer.  622  ;  i  Webb.  P.C.  299. 


. 

The  second  exception  to  the  common  law  prohibi-  Second 
tion  regarding  monopolies  is  made  in  favour  of  copy- 
right.  This  may  be  regarded  as  an  extension  of  the 
patent  law  to  the  department  of  intellectual  and  artis- 
tic originality.  At  common  law,  the  author,  or  his 
assignee,  of  any  unpublished  composition  of  a  literary  copyright  at 
character  had  a  proprietary  right  or  interest  therein.  common  law- 
He  had  the  exclusive  right  to  copy  the  manuscript. 
He  might  withhold  it  or  communicate  it,  and  if  he 
communicated  it  he  might  limit  the  number  of  the 
persons  to  whom  it  was  to  be  imparted,  and  impose 
such  restrictions  as  he  pleased  upon  the  use  of  it. 
This  common  law  right  was  distinct  from  the  right 
created  by  statute.  The  latter  is  limited  in  respect 
of  time,  the  former  (which  subsisted  until  the  publica- 
tion of  the  composition)  was  unrestricted  as  to  time. 
When  the  book  or  composition  is  published,  the 
owner's  common  law  right  is  lost  and  a  statutory  copyright  under 
copyright,  by  which  is  meant  the  sole  and  exclusive  the  statute, 
right  of  multiplying  copies  of  a  book  by  printing  or 
otherwise  for  a  limited  period,  springs  into  existence. 
As  Lord  St.  Leonards  in  the  case  of  Jeffreys  v.  Boosey  Lord  st.  Leonards 
observed :  "  When  we  are  talking  of  the  right  of  an  %<£%£** v* 
author  we  must  distinguish  between  the  mere  right 
to  his  manuscript,  and  to  any  copy  which  he  may 
choose  to  make  of  it,  as  his  property,  just  like  any 
other  personal  chattel,  and  the  right  to  multiply  copies 
to  the  exclusion  of  every  other  person.  Nothing  can 
be  more  distinct  than  these  two  things.  The  common 
law  does  give  a  man  who  has  composed  a  work  a  right 
to  that  composition,  just  as  he  has  a  right  to  any 
other  part  of  his  personal  property ;  but  the  question 
of  the  right  of  excluding  all  the  world  from  copying, 
and  of  himself  claiming  the  exclusive  right  of  for- 
ever copying  his  own  composition  after  he  has  pub- 
lished it  to  the  world,  is  a  totally  different  thing." 
Baron  Parke,  in  the  same  case,  pointed  out  expressly 
these  two  different  legal  senses  of  the  word  copyright, 
viz.  first,  the  right  in  the  copy,  a  right  of  possession, 
always  fully  protected  by  the  common  law;  and, 
secondly,  the  right  to  copy,  a  nght  of  multiplication, 
which  alone  has  been  the  subject  of  special  statutory 

1  (1854)  4  H.L.C.  815  at  p.  978,  S.C.  10  Bng.  Rep.  681. 


22 


Millar  v.  Taylor. 


Donaldsons  v. 
Beckett. 


Statute  8  Anne  C. 
19. 


Statute  54  Geo.  3 
C.  156,8.4- 


Lord  Chancellor 
Hardwicke  in 
Gyles  v.  Wilcox : 
The  privilege  of 
copyright  does  not 
come  within  the 
odium  of  a 
monopoly. 


American  view  on 
the  subject. 


protection.  There  was  much  contention  in  Englan< 
as  to  whether  the  common  law  recognized  this  property 
in  copyright  before  the  statute  of  Anne  (8  Anne  C. 
19).  In  the  case  of  Millar  v.  Taylor  l  which  was  argued 
at  great  length  it  was  contended  on  behalf  of  the 
plaintiff  that  under  the  common  law  a  sole  and  exclu- 
sive copyright  in  perpetuity  vested  in  the  author  or 
his  assign  or  assigns,  after  publication  of  the  book, 
whereas  it  was  urged  on  behalf  of  the  defendant  that 
it  was  the  printer  and  not  the  author  who  formerly 
enjoyed  such  right.  The  controversy  went  on  till  the 
decision  in  the  House  of  Lords  in  the  case  of  Donald- 
sons v.  Beckett*  the  result  of  the  decision  being  that 
a  majority  of  the  judges,  while  in  favour  of  the 
common  law  right,  held  the  same  had  been  taken 
away  by  the  statute.3 

Statutory  copyright  was  first  granted  by  8  Anne 
C.  19,  whereby  it  was  provided  that  "  the  author  of  any 
book  or  books  and  his  assignee  or  assigns  shall  have 
the  sole  liberty  of  printing  and  reprinting  such  book 
and  books  for  the  term  of  fourteen  years."  The  term 
of  fourteen  years  was  extended  by  statute  54  Geo.  3. 
C.  156,  S.  4,  to  twenty -eight  years,  and  if  the  author 
should  be  living  at  the  end  of  that  period,  for  the  resi- 
due of  his  natural  life.  The  reason  for  regarding  the 
privilege  of  copyright  as  not  coming  within  the  odium 
of  a  monopoly  in  the  old  common  law  sense  is  to  be 
found  in  Lord  Chancellor  Hard  wick's  decision  in  the 
case  of  Gyles  v.  Wilcox.*  In  that  case  he  held  that 
the  provisions  of  statute  8  Anne  €.19  for  the  vesting 
of  the  copies  of  books  in  authors  were  not  in  the  nature 
of  a  monopoly  and  ought  to  receive  the  most  liberal 
construction,  "for  it  is  very  far  from  being  a  mon- 
opoly, as  it  is  intended  to  secure  the  property  of  books 
in  the  authors  themselves  or  the  purchasers  of  the 
copy  as  some  recompense  for  their  pain  and  labour, 
in  such  works  as  may  be  of  use  to  the  learned  world. " 
This  principle  holds  goods  even  to  the  present  day,  as 
we  find  from  a  well-known  treatise  on  the  law  of  copy- 
right. '  ( Copyright  is  a. monopoly  to  which  the  Govern- 


1  (1774)4  Burr.  2303,  S.C.  98  Eng.  Rep.  201. 

2  (1774)  4,  Burr.  2408,  H.L.  S.C.  98  Eng.  Rep.  257. 

3  See  Wheaton  v.  Peters,  8  Pet.  (33  U.S.)  591,  8  I,.  Ed.  1055. 
*  2  Atk.  143. 


23 

ment  assures  protection  in  granting  the  copyright.     It 

is  a  monopoly  not  in  the  offensive  sense,  but  in  the 

sense  of  private  and  personal  ownership ;  the  public 

is  not  the  loser,  but  is  the  gainer  by  the  protection l 

and  encouragement  given  to  the  author."2     The  sta- The- law  of 

tutes  relating  to  copyright  in  British  India  have  now  Copyright  in 

been  consolidated  by  the  Indian  Copyright  Act,  Act 

III  of  1914,  which  is  in  the  main  based  on  the  English 

Copyright  Act  of  1911,  with  a  few  modifications  which 

will  be  discussed  in  a  later  lecture. 

The  third  exception  to  the  common  law  rule  as  to  Third  Exception- 
monopolies  is  to  be  found  in  the  law  relating  to  trade-  Trade-marks  and 

ii  j  ,,«.,  T  r    ,  1  Trade-names. 

marks  and  trade-names.     The  admission  of  these  to 
the  privilege  of  patents  was  a  comparatively   later 
phenomenon.     But  in  course   of  time  and  with  the  Policy  of  the  law 
development  of  trade  the  recognition  was  bound  to  re  trade-marks- 
come.     It  gradually  came  to  be  perceived  that  the 
state  protection  of  exclusive  trade-marks  was  bene- 
ficial from  all  points  of  view — beneficial  to  the  public 
inasmuch  as  they  could  buy  with  confidence  when  they 
knew  what  they  were  getting,  and  beneficial  to  the 
trader   because   it   would    stereotype  and   secure  his 
custom  and  good- will. *     Thus  it  does  not  answer  to 
any  of  those  reprehensible  qualities  which,  in  the  eye 
of  the  old  common  law,  characterised  a  monopoly.     It 
is,  therefore,  a  natural  and  a  proper  exception  to  the 
ordinary  common  law  rule.     The  interesting  method  American  rulings 
of  argument  which  is  adopted  in  making  out  that  the  thaTa  trademark 
law  of  trade- marks  is  such  an  exception  will  appear  does  not  come 
from   the   following  specimen  of   a   judgment   in    an  m™n<aln  odious 
American  case.     Speaking  of  a  man's  assertion  of  his 
exclusive  right  to  a  trade-mark  it  is  said :   "  Monopoly 
is  not  the  thing  for  which  the  one  party  struggles  and 
which  the  other  party  resists.     On  the  contrary,  fair 
trading  is  all  for  the  protection  of  which  the  law  is 


1  As  Herbert  Spencer  says:  «« If  I  am  a  monopolist,  so  are  you;  so  also 
is  every  man.     If  I  have  no  right  to  those  products  of  my  brain,  neither 
have  you  to  those  of  your  hands.     No  one  can  become  the  sole  owner  of  any 
article  whatever,  and  all  property  is  robbery." 

2  Bowker's  '  Copyright,'  p.  50. 

3  For  an  exposition  of  the  history  and  theory  of  the  law  of  trade-marks, 
see  the  judgment  of  Lord  Blackburn  in  Singer  Manufacturing  Co.  v.  Zoog. 
8.  A.C.  29. 

Trade-mark  is  thus  defined  in  the  Indian  Merchandise  Marks  Act :  "A 
mark  used  for  denoting  that  goods  are  the  manufacture  or  merchandise  of  a 
particular  person  is  called  a  trade-mark." 


Other  recognized 
exceptions  besides 
the  above  three. 


Fourth  Excep- 
tion— Customary 
monopolies. 


Docks  and  cranes 
in  a  port  town — 
those  affected 
with  a  public 
character  and 
those  that  are  not. 


invoked  ;  and  the  public,  as  well  as  the  manufacturer 
or  merchant,  are  concerned  that  infringement  of  trade- 
marks and  trade-designation  should  be  prevented." 

It  will  be  observed  that  the  criterion  of  legality 
in  the  above  three  exceptions  in  favour  of  patents, 
copyright  and  trade-marks  is  the  encouragement  of 
originality,  enterprise  and  invention.  But  there  are 
two  other  recognized  exceptions  in  which  although 
the  test  above  mentioned  is  not  strictly  applicable, 
the  law  allows  monopoly  of  a  sort  to  be  enjoyed. 
These  are  monopolies  that  rest  on  custom  or  contract. 

Under  the  head  of  customary  monopolies  may 
be  mentioned,  among  others,  ferries,  cranes,  weighing 
machines,  docks,  and  markets.  In  these  cases,  it  has 
been  held  that  the  Courts  could  exercise  some  sort 
of  vague  control  based  on  considerations  of  public 
advantage.  For  instance,  in  the  case  of  a  dock-owner 
his  rights  and  duties  are  defined  by  Sir  Matthew  Hale, 
who  observes  that  a  man  for  his  own  private  advan- 
tage "may  in  a  port  town  set  up  a  wharf  or  crane 
and  may  take  what  rates  he  and  his  customers  may 
agree  for  cranage,  wharfage,  etc.,  for  he  doth  no  more 
than  what  is  lawful  for  any  man  to  do,  viz.  make  the 
most  of  his  own."  '2  But  "  if  the  King  or  subject  have 
a  public  wharf,  into  which  all  persons  that  come  to 
that  port  must  come  and  unlade  or  lade  their  goods, 
as  for  the  purpose  because  they  are  wharves  only 
licensed  by  the  Queen,  according  to  the  statute  I 
Eliz.  C.  ii  or  because  there  is  no  other  wharf  in  that 
port,  as  it  may  fall  out  where  a  port  is  newly  erected ; 
in  that  case  there  cannot  be  taken  arbitrary  or  exces- 
sive duties  for  cranage,  wharfage,  etc. ;  neither  can 
they  be  enhanced  to  an  immoderate  rate,  but  the 
duties  must  be  reasonable  and  moderate,  though 
settled  by  the  King' s  license  or  charter ;  for  now  the 
wharf,  the  crane  and  other  conveniences  are  affected 
with  a  public  trust  and  they  cease  to  be  juris  privati 


1  Lord  Craighill  in  Dunnachie  v.   Young  &  Sons,  Ct.  Sess.  Cas.  4  S.  X. 
874;  cf.  Blackwell  v.  Wright,  73  N.  Car.  310. 

2  This  does  not  necessarily  mean  that  he  can  charge  exorbitant  rates. 
"Wherever  a  party  happens  to  have  the  benefit  of  a  legal  monopoly,  of 
landing  goods  in  a  public  port,  e.g.  where  he  is  the  owner  of  the  sole  wharf 
authorized  to  receive  goods  in  a  given  port,  then  he  must  take  reasonable 
compensation  only  for  the  use  or  his  monopoly" — Sir  Matthew  Hale's  De 
Portibus  Marts. 


25 

only.     As  if  a  man  set  out  a  street  on  his  land,  it  is 
no  longer  bare  private  interest,  but  it  is  affected  with 

!a  public  interest."1 
Thus  it  was  held  in  the  case  of  Allnut  v.  Inglis  Aiinutv. 
that  "  where  a  monopoly  is  intended  for  the  public 
good,  it  cannot  be  exercised  by  the  grantee  for  his 
mere  private  advantage  without  regard  to  the  rights 
and  interests  of  the  public.* 

In  olden  days,  when  the  whole  of  the  retail  trade  Markets  and  fairs. 
which  is  now  transacted  by  means  of  shops  used  to  be 
carried  on  by  means  of  markets  or  fairs,  a  market 
was  recognized  as  a  monopoly  and  the  monopoly  was 
strictly  enforced.  The  setting  up  a  new  market  or 
fair  within  a  certain  radius  of  the  already  existing 
market,  which  enjoyed  the  monopoly,  and  holding  it 
on  the  same  day  as  the  existing  market-day,  was  held 
to  be  an  encroachment  and  put  down  as  a  nuisance. 

The  attitude  of  the  common  law  was  similar  with 
regard  to  ferries.  In  both  there  was  a  pronounced 
tendency  to  favour  monopoly. 

From  very  olden  times  certain  contracts  fell  under  Fifth  Exception— 
the  condemnation  of  the  common  law  as  being  con-  ^SSSSt^SL 
tracts  fin  restraint  of  trade/  i.e.  on  the  ground  that  times  called' *con- 
they  in  fact  restrained  or  were  calculated  to  restrain  ^tual '  mon°P°- 
trade.     'Trade'   is  a  very  comprehensive  term  and  Contracts  in 
embraces  within  its  meaning  not  only  mechanical  pur-  co^demne'd  £7  the 
suits  but,  in  the  broad  and  general  sense,  all  occupa-  common  law. 
tion  or  business,  carried  on  for  subsistence  or  profit.3 
The  general  principle  of  common  law  is  that  a  man  "Trades '—what  it 

11111.  .  1        r    i    ,        i  i  means.  The  general 

should   be  free  to  exercise  any  lawtul  trade  as  and  principle  of 

J  Sir  Matthew  Hale's  De  Portibus  Marts. 

2  Where  the  London  Dock  Co.  having  built  warehouses  in  which  wines 
were  deposited  upon  payment  of  such  a  rent  as  they  and  the  owners  agreed 
upon,  afterwards  accepted  a  certificate  from  the  Board  of  Treasury  under 
the  Warehousing  Act,  43  G.  Ill  C.   132,  whereby  it  became  lawful  for  the 
importers  to  lodge  and  secure  wines  there  without  paying  the  duties  in  the 
first  instance,  and  it  did  not  appear  that  there  was  any  other  place  in  the 
port  of  London  where  the  importers  had  a  right  to  bond  their  wines ;  it  was 
held  that  such  monopoly  was  enjoyed  by  them  for  the  public  benefit,  and 
that  they  were  bound  by  law  to  receive  the  goods  into  their  warehouses  for 
a  reasonable  hire  and  reward. — Allnut  v.  Inglis,  12  East,  527';  Lord  Ellen- 
borough's  observations  at  p.  538. 

3  It  would  seem  that  the  pursuit  of  the  liberal  arts  or  the  learned  pro- 
fessions, such  as  medicine  or  law,  would  come  within  it.     See  the  following 
cases:  Bunn  v.  Guy,  4  East,  190, — case  of  an  attorney;  Davis  v.  Mason,  5, 
Term  R.  118, — case  of  a  surgeon  ;  Hayward  v.  Young,  2  Chitty  407, — case  of 
a  surgeon  and  man  midwife;   Mallon  v.  May,  n  M.  £  W.,  652, — case  of 
a  surgeon  and  apothecary;  Butler  v.  Burleson,  16.  Vt.  176, — case  of  a  phy- 
sician and  Surgeon.     See  also  Spelling's  '  Trusts  and  Monopolies,'  Ch.  II. 


26 


common  law — 

perfect  freedom  of 

trade. 

Is  freedom  free 

to  slay  herself  ? 


When  a  man 
contracts  himself 
out  of  his  freedom, 
what  is  to  be  the 
attitude  of  law  ? 


James  V.  C.  in 

Leather  Clock  Co. 
v.  Lorsont. 


Jessel  M.R.  in 
Printing  and 
Numerical 
Registering  Co.  v. 
Sampson. 


where  he  wills.  But  the  question  arises,  '  Is  freedom 
free  to  slay  herself  ?  '  Suppose  one  chooses  to  barter 
away  one's  own  freedom,  or,  in  other  words,  to  enter 
into  a  contract  with  another  whereby  one  voluntarily 
restricts  one's  own  freedom  and  undertakes  not  to 
carry  on  one's  trade  freely  as  and  where  one  likes. 
What  is  to  be  the  attitude  of  the  law  towards  him  or 
towards  such  contract  ?  Under  such  circumstances, 
if  the  contract  were  to  be  declared  void,  the  law  would 
virtually  be  interfering  with  freedom  of  contract.  If, 
on  the  other  hand,  the  law  were  to  allow  such  con- 
tracts to  be  entered  into  and  enforced,  it  would  be 
encouraging  restraint  of  trade.  And  what  is  restraint 
with  the  party  so  contracting  himself  out  of  his  free- 
dom, is  monopoly  in  respect  of  the  party  in  whose 
favour  the  contract  is  made. 

Judges  have  constantly  been  confronted  by  this 
dilemma  between  public  policy  requiring  restraints 
on  restraints  of  trade,  and  public  policy  requiring  the 
utmost  possible  freedom  of  contract.  Thus  James 
V.  C.  in  Leather  Clock  Co.  v.  Lorsont {  says :  "  Public 
policy  requires  that  every  man  shall  be  at  liberty  to- 
work  for  himself  and  shall  not  be  at  liberty  to  deprive 
himself  or  the  State  of  his  labour,  skill  or  talent  by  any 
contract  that  he  enters  into.  On  the  other  hand, 
public  policy  requires  that  when  a  man  has  by  skill, 
or  by  any  other  means,  obtained  something  which  he 
wants  to  sell,  he  should  be  at  liberty  to  sell  it  in  the 
most  advantageous  way  in  the  market ;  and  in  order 
to  enable  him  to  sell  it  advantageously  in  the  market, 
it  is  necessary  that  he  should  be  able  to  preclude 
himself  from  entering  into  competition  with  the  pur- 
chaser." On  the  other  hand,  Jessel  M.  R.  in  Printing 
and  Numerical  Registering  Co.  v.  Sampson  *  says  :  "  It 
must  not  be  forgotten  that  you  are  not  arbitrarily  to 
extend  those  rules  which  say  that  a  given  contract  is 
void  as  being  against  public  policy,  because  if  there 
is  one  thing  which  more  than  another  public  policy 
requires,  it  is  that  contracts  when  entered  into  freely 
and  voluntarily  shall  be  held  sacred,  and  shall  be  en- 
forced by  courts  of  justice.  Therefore,  you  have  this 
paramount  public  policy  to  consider,  that  you  are 


1  (1869)  L.R.  9-  Eq.  345- 


(1875) 


19-  Eq.  462. 


27 

not  lightly  to  interfere  with  this  freedom  of  contract." 
See  also  the  observations  of  Best  C.J.  in  Homer  v.  BestCj  i 
Ashford1  where  he  points  out  clearly  in  what  cases  Homer  v.' 
contractual  restraints  on  one's  own  freedom  of  action 
should  be  held  void,  and  in  what  cases  upheld  by  law. 
With  reference  to  the  latter  he  observes  :  "But  it  may 
often  happen  that  individual  interest  and  general  con- 
venience render  agreements  not  to  carry  on  trade,  or 
to  act  in  a  profession,  in  a  particular  place  proper. 
Manufactures  or  dealings  cannot  be  carried  on  to  any 
great  extent  without  the  assistance  of  agents  and 
servants.  These  must  soon  acquire  a  knowledge  of 
the  manufactures  or  dealings  of  their  employers.  A 
merchant  or  manufacturer  would  soon  find  a  rival  in 
every  one  of  his  servants,  if  he  could  not  prevent  them 
from  using  to  his  prejudice  the  knowledge  acquired 
in  his  employ.  Engagements  of  this  sort  are  not  in- 
jurious restraints  of  trade,  but  securities  necessary  to 
those  who  are  engaged  in  it.  The  effect  of  such  con- 
tracts is  to  encourage  rather  than  cramp  the  employ- 
ment of  capital  in  trade  and  the  promotion  of  indus- 
try." 

In  the  dilemma  above  described  the  common  law 
at  an  early  stage  took  the  view  that  any  interference 
with  trade  must  be  jealously  put  down,  even,  if,  to 
compass  such  an  end,  it  were  necessary  to  interfere 
with  freedom  of   contract   in    individuals.     But   the  Antinomies 
matter  after  all  was  not  so  easy  of  solution.     The  different  views 
antinomies  of  law  resulting  from  the  dubious  verdicts  as  to  public 
yielded  by  considerations  of  public  policy  render  this  po1 
subject  peculiarly  difficult.     The  law  reports  abound 
with    judgments    obviously    inconsistent    and    often 
contradictory.     It  is  not  proposed  in  this  lecture  to  Different  stages 
deal  with  the  subject  in  any  detail.     It  is  observable,  ££££££ tc 
however,  that    the    law    has  passed  through  several  restraint  of  trade, 
well-marked  stages  in  order  to  arrive  at  its  present 
form. 

The  earliest  view  was,  as  above  noted,  one  of  un-  The  earliest  view. 
qualified  disapproval  of  any  agreements  that  purported 
in  any  way  to  limit  the  freedom  of  a  subject  in  exer- 
cising his  trade  or  profession  to  the  fullest  extent. 
All   agreements   whether   general   or  restricted  to  a 

1  (1825)  3  Bing.  322. 


28 


The  next  stage ; 
Mitchell  v. 
Reynolds. 


Chief  Justice 
Parker's  two 
propositions. 


The  test  of 
space-limit,  how 
far  sound. 


The  test  of  time- 
limit,  by  analogy. 


particular  area  were  held  bad.  The  next  stage  was 
marked  by  the  decision  in  the  case  of  Mitchell  v. 
Reynolds  l  in  which  Chief  Justice  Parker,  afterwards 
Ivord  Macclesfield,  after  much  consideration  laid  down 
the  doctrine  that  a  general  restraint  was  of  necessity 
void,  but  a  partial  restraint  might  be  good,  if  reason- 
able. He  lays  down  two  striking  propositions  :  First, 
that  to  obtain  the  sole  exercise  of  any  known  trade 
throughout  England  is  a  complete  monopoly,  and 
against  the  policy  of  the  law.  Secondly,  that  when 
restrained  to  particular  places  or  persons  (if  lawfully 
and  fairly  obtained)  the  same  is  not  a  monopoly. 
The  test  of  space-limit  thus  laid  down  has  been 
severely  criticised  and  perhaps  justly  so,  for  a  mon- 
opoly is  none  the  less  a  monopoly  because  it  is 
circumscribed  in  space.  On  the  other  hand,  attempts 
have  been  made  to  extend  the  idea  of  limit,  by  ana- 
logy >  to  time.'2  The  law  continued  in  a  more  or  less 
uncertain  and  nebulous  state  for  some  time  until  it 
was  considerably  simplified  by  the  judgments  in  the 
famous  Maxim  Nordenfelt  case.3  The  law  now  is 
clear  that  whether  a  restraint  is  general  or  partial, 
its  validity  is  to  be  determined  by  the  consideration 
whether  it  exceeds  what  is  reasonably  necessary  for 
the  protection  of  the  covenantee ;  that  is,  the  criterion 
of  reasonableness  which  was  formerly  applied  only  to 
partial  restraints  must  now  be  applied  to  restraints 
of  every  kind.  It  is  doubtful  whether  this  test  of 
reasonableness  is  final,  or  whether  the  question  of 
public  policy  must  be  considered,  in  addition  to  that 
of  reasonableness,  to  secure  the  final  validity  of  the 
contract. 


The  idea  not 
absolutely 
unknown  in 
olden  times. 


§  5  COMBINATION — A  Basis  of  Monopoly  Formation. 

We  now  pass  on  to  consider  a  comparatively 
newer  phase  of  monopoly.  Not  that  the  idea  was 
absolutely  unknown  to  old-time  methods  of  trade  or 
business.  But  the  development  of  modern  industrial- 


1  (1711)  i  P.  Williams,  181. 

2  Ward  v.  Byrne  (1839)  5  M.  &  W.  548;  Davies  v.  Davies.per  Cotton 
L.J.,  36  Ch.  D.  359 ;  Badische  Anilin  und  soda  fabrik  v.  Schott  Segner  &>  Co. 
(i892)3Ch.  447. 

'*  Nordenfelt  v.  Maxim  Nordenfelt  Guns  and  Ammunition  Co.  (1894)  A.C. 
535- 


29 

ism  has  brought  in  its  train  certain  forms  of  monopoly 

which  would   have   been  impossible  under  old-world 

conditions.     I  refer  to   the  Kartells,   Combines   and 

Trusts.     From  contracts  in  restraint  of  trade  to  com-  But  modern 

binations  is  not  a  far  cry,  if  we  look  to  the  principle  f^f "aallas^ is 

involved.     At  bottom  it  is  the  same  old  question  of  produdn^he ° 

the  legality  of  restraining  the   free  action  of   others  monopolistic 

.1  jj_i  «j_    il          .cj.  1  r  combinations  of 

on  the  ground  that  it  benefits  only  one  fortunate  the  present  day. 
trader — in  other  words,  the  legality  of  monopoly  it- 
self. But  so  varied  are  the  methods  and  procedure 
adopted  by  combinations  l  and  so  vast  the  magnitude 
of  their  operations  that  in  the  actual  treatment  of 
the  subject  one  has  to  deal  with  problems  altogether 
novel, — problems  peculiar  to  modern  industrial  con- 
ditions. 

In  discussing  the  ( legal  monopolies '  we  had  occa-  changes  in  the 
sion  to  notice  the  strong  view  which  the  common  law  1°*^^^  of 
took  in  the  sixteenth  and  seventeenth  centuries  con-  commerce, 
cerning  any  act  on  the  part  of  an  individual  calculated 
to  restrict  the  business  of  others.  The  conditions  of 
trade,  however,  in  those  days  were  quite  different. 
Since  the  reign  of  Queen  Elizabeth  the  conditions  of 
trade  and  commerce  have  been  completely  revolu- 
tionised. New  methods  of  communication,  such  as 
by  post  and  telegraph,  and  by  rapid-transit  agencies 
like  steam  and  electricity,  have  become  accessible  to 
all.  The  area  within  which  each  trade  is  now  carried 
on  has  thus  undergone  incredible  expansion.  New 
and  diverse  processes  of  manufacture  have  grown  up, 
and  the  scale  of  production  has  gone  up  a  hundred- 
fold. It  would  not  do  for  any  man  now  to  say,  for 
instance,  as  Coke  did  in  his  day,  that  "  bonnets  and 
caps  should  be  thickened  and  fulled  by  the  strength 
of  men  and  not  in  a  fulling  mill,  for  it  was  holden 
inconvenient  to  turn  so  many  labouring  men  to  idle- 
ness." Such  a  view  would  at  the  present  day  be 
regarded  as  antiquated  and  ridiculous. 

With   the  manifold   changes  referred   to  above,  Corresponding 
there  came  a  great  change  over  the  doctrine  of  freedom  doctrlne^ree 
of  competition,  so  much  so  that  President  Andrews  competition, 
could  go  the  length  of  observing :  "  The  day  of  old- 


i  The  term  '  Combination '  is  here  used  in  the  sense  of  capitalistic  mon- 
opoly, to  be  explained  presently ;  and  not  in  the  sense  of  Trade  or  Labour 
Unions. 


Industrial 
monopolies : 
causes  and 
factors. 


Instances  of 

capitalistic 

monopolies. 


time  competition  has  set.  Law  or  not  law,  capital 
will  henceforth  march  mostly  in  phalanxes."  '  It 
cannot  be  gainsaid  that,  under  the  modern  form  of 
industrial  organization,  immense  amounts  of  capital 
are  required  for  achieving  anything  like  success.  Com- 
petition between  great  establishments  often  becomes 
so  fierce  that  ruin  threatens  all  the  rival  establish- 
ments unless  some  form  of  agreement  between  them 
is  reached.  It  is  but  natural  that  individual  business 
men  unable  to  cope  single-handed  with  the  growing 
difficulties  should  meet  the  situation  by  forming  a 
combination,  that  is,  a  concentration  of  wealth,  skill 
and  business  ability.  In  many  instances  they  are 
aided  by  the  rail-roads,  which  give  them  preferential 
freight  rates.  The  tariff  law  is  also  of  supreme  help 
in  many  instances.*  Whether  they  form  Pools,  Kartells 
or  Syndicates,  or  whether  they  resort  to  the  system 
devised  by  the  genius  of  John  D.  Rockefeller  and 
establish  Trusts,  is  indeed  only  a  matter  of  form.3 
But  the  fact  remains  that  combinations  and  coali- 
tions are  still  on  the  increase. 

The  rapid  growth  of  monopolies  of  this  descrip- 
tion, perhaps  best  described  as  ( capitalistic  monopo- 
lies/ was  particularly  favoured  by  the  industrial  and 
economic  conditions  prevailing  in  the  United  States. 
The  first  great  monopoly  of  this  class  was  the  Stand- 
ard Oil  Company,  which  through  a  process  of  rapid 
growth  through  ten  or  fifteen  years,  with  the  advan- 
tage of  lower  freight  rates  on  the  railroads  than  its 
rivals  could  secure,  was  organized  into  the  Standard 
Oil  Trust — a  combination  able  to  control  eighty-five 
per  cent  of  the  total  output  of  refined  petroleum  in 
the  country.  The  other  most  important  capitalistic 
monopolies  are  the  American  Sugar  Refining  Co.  (Sugar 
Trust),  the  Distilling  and  Cattle  Feeding  Co.  (Whiskey 
Trust),  besides  several  other  big  combinations  con- 
trolling cotton-seed  oil,  linseed  oil,  white  lead,  dressed 
meat,  cordage  and  tobacco.  At  present,  the  monopo- 
lies in  the  United  States  are  so  many  that  a  mere 

'i  Quoted  by  Ernest  Von  Halle  in  his  '  Trusts  or  Industrial  Combina- 
tions in  the  United  States '  at  p.  10. 

2  Mr.  Francis  W.  Hirst  in  his  book    '  Monopolies,  Trusts  and  Kartells ' 
speaks  of   "  Mr.  Havemeyer's  candid  avowal   that   tariff  is   the  mother  of 
trusts." 

3  See  Lects.  XI,  XII. 


list  of  their  names  would  fill  several  closely  printed 
pages.     It  is  not  within  the  scope  of  this  lecture  to 
enter  into  a  detailed  discussion  of  the  various  forms 
these  organizations   take,  or   their  economic  advan- 
tages or  disadvantages.1     But  we  may  pause  to  con- 
sider the  central  idea  underlying  a  monopoly  viewed  The  central  idea 
in  the  light  of  these  capitalistic  combinations.     The™^J£* 
ideas  of  differential   advantage,  of  limitation  and  of  viewed  as  a 
exclusiveness  (see  §§  i,  2,  3  ante)  are  all  there.     But  combination- 
that  of  express  grant  or  authority,  which  is  the  central 
feature  of   '  legal  monopolies/  is  absent.     Instead  of 
that,  the  basis  of  a  capitalistic  monopoly  is  a  certain  unified  control, 
unified  control  over  a  particular  business  calculated 
to  drive  competitors,  wholly  or  partially,  out  of  the 
field,  and    secure   the  predominance  of  one  or  more 
persons  who   hold  such  control.     It  is  in   this  sense  The  essence  of 
that  Prof.  Ely  speaks   of   monopoly  when   he  says :  ^ant 
"Monopoly  means  the  substantial  unity  of  action  on  of  action, 
the  part  of  one  or  more  persons  engaged  in  some  kind 
of  business  which  gives  exclusive  control  more  particu- 
larly, although  not  solely,  with  respect  to  price.    *     * 
The  essence  of  monopoly  is  substantial  unity  of  action." 
The  point  is  forcibly  brought  out  in  the  decisions  of 
American  courts  :  "  The  idea  of  monopoly  is  not  now  American  rulings 
confined  to  a  grant  of  privileges.     It  is  understood  to        date  this 
include  a  'condition  produced  by  the  act  of  mere  indi- 
viduals.'    Its  dominant  thought  now  is,  f  the  notion  of 
exclusiveness  or  unity ' ;  in  other  words,  the  suppres- 
sion of  competition  by  the  unification  of  interest  or 
management,  or  it  may  be  through  agreement  and  con- 
cert of  action."  3 

No  doubt  the  United  States  may  be  called  the 
home  of  capitalistic  monopolies.  But  it  is  not  an 
altogether  uncommon  phenomenon  in  Great  Britain, 
while  in  the  Continent,  especially  in  Germany,  such 
monopolies  abound,  although  the  characteristics  vary. 

l  Prof.  Jenks  lays  great  stress  upon  the  great  economic  advantages  d^- 
rivable  from  big  combinations.    A  good  summary  of  their  good  and  evil  quali- 
ties will  be  found  in  Ch.  XI  of  his  book  '  The  Trust  Problem.'     See  also 
'  The  Control  of  Trusts  '  by  John  Bates  Clark. 
'  '2  Prof.  Ely's  «  Monopolies  and  Trusts,'  p.  14. 

3  National  Cotton  Oil  Co.  v.  Texas,  197  U.S.  115;  25  supm.  397;  49  L. 
Ed.  689  (1905).  See  also  People  v.  North  River  Sugar  Refining  Co.,  54  Hun. 
355,  377;  3  N.Y.  suppl.  401,413;  2  L.R.A.  33,42  (1889);  and  other  cases 
quoted  tinder  §  117  of  F.  H.  Cooke's  '  Combinations,  Monopolies  and  Labour 
Unions.' 


32 

It  will  be  our  endeavour  to  trace  the  development  of 
these  monopolies  in  a  later  lecture,  and  also  to  study 
the  course  which  modern  legislation  and  judicial  de- 
cisions have  taken  on  the  subject. 


LECTURE   II. 
KINDS   AND   CLASSES  OF   MONOPOLIES. 

In  the  foregoing  lecture  no  attempt  was  made  to  The  plan  adopted 
arrive  at  a  systematic  classification  of  monopolies,  or  a°/^~tn°t 
to  discuss   the  merits  of   the  different  classifications  systematic  ciassi- 
offered  by  different  authors.     An  endeavour  was  made  fication- 
to  estimate  the  value  of  the  different  forces — social, 
economic  or  otherwise — that  underlie  the  growth  and 
formation    of   monopolies  in    different   parts   of   the 
world.     The  discussion  of  the  question  of  classification  But  classification 
was  reserved  for  separate  treatment.     But  it  is  to  be  fnCJd^auas 
observed  that  classification  of  a  sort  was  incidentally  introduced7 
introduced.     The   classes  hitherto  broadly  indicated 
are : — 

(1)  Natural  Monopolies — due  to  favourable  natur- 
al arrangements  of    soil  or  situation,  ability,  aptitude  }featul 
and  the  like.1 

(2)  Legal  Monopolies — -which  owe  their  origin  to  n. 
express  grant  or  authority  or  to  the  direct  sanction  of  I'egal 
common  law  or  statute,  e.g.  patents,  copyrights,  trade- 
marks, etc.4 

(3)  Capitalistic   Monopolies — or  those  which  are 
the  outcome  of   the  acts  of  an  individual  or  indivi- 
duals ;  in  other  words,  the  outcome  of  the  social  will, 
or  of  social,  industrial  and  economic  conditions,  irres- 
pective of  express  grant  or  authority.3 

It  will  be  seen  as  we  proceed  that  the  above  three 
classes  cover  a  wide  ground  in  the  field  of  monopo- 
lies. There  is  only  one  important  class  which  was 
not  specially  touched  upon  in  the  last  lecture,  viz. : 

(4)  Governmental   and  Municipal  Monopolies — It 

is  necessary  before  we  deal  with  the  classification  of  and  Municipal 
monopolies  to  indicate  the  character  and  conditions  Monopolies, 
of  the  last-mentioned  class  of  monopolies. 

These  really  come  under  monopolies  by  express 
grant,  for  they  invariably  owe  their  origin  to  author- 
ity from  the  sovereign  power,  or  the  legislature.  But 
they  are  treated  separately  for  convenience,  because 

i  See  §  i,  Lecture  I.        *  See  §  4,  Lecture  I.        3  See  §  5,  Lecture  I. 


State  or  Govern- 
mental monopolies 
are  mainly  based 
on  fiscal  grounds. 


Excepting  legal , 
customary  and 
contractual,  the 
principal 
monopolies  in 
British  India  are 
Governmental. 


Monopolies 
under  the  East 
India  Company. 


34 


they  involve  questions  of  state  policy  different  from 
those  that  arise  in  ordinary  cases  of  legal  monopolies, 
such  as  a  patent,  copyright,  trade  mark,  etc.  For  in- 
stance, questions  of  revenue,  of  facility  of  transport, 
of  supply  of  public  conveniences — -these  are  matters 
that  pertain  to  all  governmental  or  municipal  mono- 
polies, but  are  comparatively  foreign  to  a  treatment 
of  legal  monopolies.  The  leading  examples  of  muni- 
cipal monopolies  are  drainage  works,  water  supply, 
gas  and  electric  light  supply,  telephones,  tramways, 
street-railways  and  the  like.  The  interests  of  the 
people  are  so  intimately  connected  with  all  these  that 
public  control,  whether  partial  or  complete  according 
to  circumstances,  is  thought  to  be  just  and  desirable. 
The  problem  of  municipal  monopolies  is  really  con- 
fined to  the  respective  merits  of  two  plans — the  plan  of 
public  ownership  and  the  plan  of  private  ownership 
with  varying  degrees  of  public  control.  But  an  out- 
and-out  policy  of  laissez  faire,  however  beneficial  it 
may  be  in  the  ordinary  fields  of  commercial  activity, 
is  generally  admitted  to  be  not  adaptable  to  munici- 
pal monopolies. 

So  in  the  case  of  state  or  governmental  monopo- 
lies. They  arise  from  practical  considerations  of  great 
weight,  and  it  is  generally  conceded  that  at  least 
those  state  monopolies  which  are  based  on  fiscal  con- 
siderations are  justified,  even  though  they  necessarily 
involve  a  sacrifice  of  the  let-alone  policy. 

In  British  India,  with  the  exception  of  the  legal, 
customary,  contractual,  and  municipal  monopolies 
above  indicated,  the  principal  monopolies  have  been 
the  monopolies  exercised  and  maintained  by  the 
Government.  They  have  come  down  from  the  days 
of  the  East  India  Company.  As  early  as  1769  the 
Directors  of  the  East  India  Company  directed  that 
silk-winders  should  be  made  to  work  in  the  Company's 
factories  and  prohibited  from  working  outside  "under 
severe  penalties  by  the  authority  of  the  Govern- 
ment/' l  We  find  from  the  Ninth  Report  of  the 
Select  Committee  of  the  House  of  Commons  (1783) 
that  the  great  and  valuable  articles  of  the  Company's 


l  General  Letter  dated  i/th  March,  1769,  quoted  in  R.  C.  Dutt's  '  Eco- 
nomic History  of  British  India,'  p.  256. 


35 

Investment [  were  raw  silk  and  various  descriptions  of 
piecegoods  made  of  silk  and  cotton.     "  These  articles  Monopoly  in  raw 
are  not  under  any   formal   monopoly;  nor  does   the 
Company  at  present  exercise  a  declared  right  of  pre- 
emption with  regard  to  them.     But  it  does  not  appear 
that  the  trade  in  these  particulars  is,  or  can  be,  per- 
fectly free.  ******     por  ^e  present  trade, 
even  in  these  articles,  is  built  from  the  ruins  of  old  — ^buiit  from 
monopolies  and  pre-emptions,  and  necessarily  partakes  monopolies 
of  the   nature   of  its  materials."       The  preamble  to 
Regulation  31  of  1793  sets  forth  in  detail  the  extent 
of  state  control  over  production  exercised  at  this  time 
in  respect  of  the  different  articles  of  the  Company's 
Investment/ 

Amongst  fiscal  monopolies  in  India,  or  monopo-  Fiscal  monopoli 
lies  conducted  with  a  view  to  revenue,  salt  and  opium 
occupy  a  conspicuous  place.4  "The  manufacture  of 
opium  and  salt,"  said  Holt  Mackenzie,  who  was  one 
of  the  principal  witnesses  examined  by  the  Common's 
Committee  in  1832,  "is  conducted  with  a  view  to 
revenue,  not  trade.  My  opinion  is  that,  of  the  sug- 
gested changes  with  regard  to  those  articles,  there  is 
none  that  would  not  involve  a  large  loss  of  revenue. 
In  the  salt  department,  I  do  not  think  we  could  by 
any  means  of  an  excise,  collect  the  same  amount  of 
net  revenue  as  is  yielded  by  the  public  sales.  *  *  * 
From  that  source  also  (opium)  they  derive  a  very 
large  revenue,  the  excess  of  the  sale  prices  beyond 
the  first  cost  constituting  such  a  tax  as  I  would  think 
it  hopeless  to  get  by  any  other  device ;  and  though, 
commercially  speaking,  there  are  strong  objections  to 
the  system,  yet  we  must  set  against  that  the  necessity 

l  By  this  term  was  evidently  meant  the  business  of  the  Company  where 
by  the  revenues  of  the  country  were  invested  in  the  purchase  of  Indian  goods 
for  exportation  and  sale  in  Europe. 

*  Ninth  Report  of  the  Select  Committee  of  the  House  of  Commons  (1783), 
p.  23,  quoted  in  Harrington's  '  Analysis,'  Vol.  Ill,  p.  595. 

'*  See  John  Herbert  Harrington's  •  An  Analysis  of  the  Laws  and  Regu- 
lations enacted  by  the  Governor-General  in  Council  at  Fort  William  in 
Bengal,'  Vol.  Ill,  p.  595. 

+  A  similar  monopoly  in  opium,  salt  and  camphor  exists  in  Formosa, 
the  Japanese  dependency.  The  first  is  defended  on  moral  and  economic 
grounds,  but  all  the  three  are  a  source  of  substantial  revenue  to  the  Japanese 
Government.  There  is  also  a  very  successful  state  monopoly  in  Japan  in 
the  cultivation  of  the  tobacco-leaf.  In  respect  of  the  la-^t.  however,  Austria 
perhaps  leads  the  way — the  tobacco  monopoly  of  the  Austrian  Government 
deing  considered  the  most  successful,  from  the  point  of  view  of  the  State  as 
well  as  that  of  the  consumer. 


36 

of  the  revenue  ;  and  my  belief  is  that  the  same  amount 
of  revenue  cannot  be  otherwise  got."  l 

History  of  the  The  history  of  the  opium  monopoly  in  India  is 

opium  ir  an  interesting  one.     The  right  to  produce  opium  in 

under  the  Muham-  Bengal  was  farmed  by  the  Muhammadan  rulers  who 

preceded  the  East  India  Company  and  this  method 

under  warren        was  adopted    by  Warren  Hastings  on   behalf   of   the 

East  India  Company  in  1773.  2     About  the  year  1775, 

The  desirability  of  the  question  arose  as  to  whether  the  manufacture  and 

mJnop^ques-      sale  of  opium  should  remain  the  exclusive  privilege 

tioned  in  1775.        of  the  Company  or  the  trade  in  it  be  thrown  open, 

subject  to  a  duty.     The  Court  of  Directors3  took  a 

very  liberal  view  of  the  position  and  directed  that  if 

the  Governor  and  Council  should  "  be  of  opinion  that 

abolishing  the  monopoly  of  opium  will  contribute  in 

any  great  degree  to  the  relief  of  the  natives"   they 

were  authorised  "to  give  up  that  commodity  as  an 

article  of  commerce  ;  only  fixing  and  reserving  a  rea- 

sonable duty  thereon  to  the  Company/'  and  such  duty, 

it  was  thought,  should  not  exceed  Rs.  30  per  maund. 

Mr.   Francis,  Member  of   Council,  contended   for   the 

abolition  of  this  and  all  other  monopolies  as  "anti- 

commercial  in  the  first  instance  and  ultimately  des- 

view  of  the  major-  tructive  of  revenue."  *    But  the  majority  of  the  Mem- 

ity  of  the  Mem-      bers    took   a    different   view   and    held    that,   taking 

-recoinnfendrng011  all  the  circumstances  into  consideration,  a  continuance 

continuance.          of  monopoly  on  behalf  of  the  Company  was  expedient. 

The  monopoly  has  since  been  maintained  accordingly. 

One  of  the  arguments  put  forward  for  its  continuance 

is  based  on  moral  grounds,  and  it  is  contended  that 

if  it  be  just  and  advisable  in  any  case  to  monopolise 

for  the  benefit  of  Government  the  growth,  manufac- 

ture or  sale  of  an  article  of  internal  produce,  a  per- 

nicious drug  like  opium  which  is  neither  a  necessary 

of   life  nor  even  a  desirable  superfluity,  must  be  an 

unexceptionable  subject  of  exclusive  privilege.     Be- 

sides, if  not  adulterated  (as  it  might  be  in  the  hands  of 


1  Quoted   in  R.  C.  Dutt's   '  Economic   History   of    British    India,'   pp. 
287-288. 

2  Imperial  Gazetteer  (1907  Edition),  Vol.  IV,  p.  242. 

3  See  their  General   Letter  dated  24th   December,  1776,  para  77.      Vide 
Harrington's  '  Analysis,'  Vol.  Ill,  p.  654. 

*  See  Ninth  Report  of  the  Select  Committee  1793,  under  head  of 
'  Opium'  and  App.  No.  62  ;  also  Mr.  Francis'  '  Plan  of  Settlement'  printed 
in  App.  14  to  the  Committee's  Sixth  Report  ;  referred  to  in  Harrington's 
'  Analysis,'  Vol.  Ill,  p.  655. 


37 

individuals)  it  would  be  a  valuable  commodity  for 
external  commerce.  Therefore,  it  should  be  brought 
under  state  control  and  made  an  instrument  of  raising 


revenue. ' 


The  system  of   farming  was,  however,  found    to  The  system  of 
give  rise  to  deterioration  of  the  product  and  to  oppres-  ?armin§  f.ound 

.  r    ...  -,.  1         ,1  ,    inconvenient. 

sion  of  the  cultivators  by  the  contractors.     Accord- 
ingly in  1797  the  Bengal  Government  assumed    the  in  i797, 
direct  monopoly  of  manufacture.     In  the  year   180^  Governni«nt 

Tk  *  /~\  •      •  .....  ?^  assumed  direct 

a  Royal  Commission  was  appointed  to  inquire  into  the  monopoly  of  the 
extent  and  effects  of  opium  consumption  in  India,  and  manufacture, 
to  consider  whether  the  production  and  sale  of   the 
drug  except  for  medicinal  purposes  only  should  be  pro- 
hibited.    The  result  was  that  they  recommended  the 
maintenance  of  the  Bengal  monopoly  system  of  pro- 
duction. 

The  next  important  article  of  governmental  mono-  History  of  the 
poly  in  India  is  salt.     Lord  Clive  observed  that  "  the  salt  mon°Poly- 
salt  trade  in  Bengal  had  (before  the  Company's  admin-  «  salt  trade  a 
istration)   been  a  monopoly   time  immemorial:   that mon°Poly time 

j  .1  i  i    ,1          ^    •     immemorial    — 

t  ever  was  and  must  be  a  monopoly  and  that  Coja  Lord  ciive. 
Wajid  and  other  merchants  long  before  him,  had  given 
to  the  Nabob  and  his  ministers  two  hundred  thousand 
pounds  per  annum  for  the  exclusive  privilege.'2    What- 
ever may  have  been  the  extent  and  character  of  the 
monopoly  of  salt  under  the  Muhammadan  rulers,  this 
at  any  rate  is  certain,  that  at  the  very  commencement 
of    the  Dewanny  grant   in  August   1765,  a   plan  was 
adopted  for  engrossing  the  entire  purchase,  in  the  first  Monopoly  of  salt, 
instance  not  only  of  salt,  but  of  '  all  salt,  beetle-nut 


Dewanny  grant 
in  1705. 


1  The  following  extract   is  from   Mr.    H.   Colebrooke's  Remarks,  etc., 
printed  at  Calcutta  in  1804:     "  Opium,  it  is  well  known,  has  been  monopo- 
lised by  Government.     It  is  provided  in  the  provinces  of  Behar  and  Benares, 
and  sold  in  Calcutta  by  public  sale.     For  many  reasons  this  monopoly  seems 
less  exceptionable  than  any  other.     It  is  doubtless  a  national  object  of  policy 
to  discourage  the  internal  consumption  of  a  drug,  which  is  so  highly  perni- 
cious, when  employed  for  intoxication.     It  must  not,  however,  be  concealed, 
that,  by  the  effect   of   the  monopoly,  Behar   has   lost   the  market   of  the 
Western  countries,  which   formerly  were  thence  supplied;    but  which  now 
raise  as  much  as  is  consumed  within  their  limits;  and  even  furnish  some 
opium  to  the  British  provinces.     *     *     *     *     The  facility  of  adulterating 
opium,  and  the  consequent  necessity  of  precautions  against  such  frauds  are 
circumstances  which  would  justify  the  monopoly,  were  it  even  objectionable, 
on  other  considerations.     In    a  free  commerce,  the  quality  might  probably 
be  more  debased,  to  the  injury  of  export  trade."      Chap.   V,  pp.  no  and 
114;  cited  in  Harrington,  Vol.  Ill,  p.  656. 

2  See  Ninth  Report  of  the  Select  Committee  of  the  House  of  Commons, 
P-  43 ;  cited  in  Harrington's  '  Analysis,'  Vol.  Ill,  p.  658. 


Disapproved  by 
Court  of  Directors 
in  1768. 

Salt  manufacture 
thrown  open  to 
the  public. 

Act  of  1773. 


Monopoly  again. 


History  of  the 

saltpetre 

monopoly. 

Under   the   Subah 
dars. 


Under  the  East 
India  Company. 


i.  Anne.  Cap.  12. 


and  tobacco  produced  in  and  imported  into  Bengal 
for  the  benefit  of  the  Company's  servants.1  This  was 
subsequently  disapproved  by  the  Court  of  Directors 
and,  in  pursuance  of  their  orders,  the  monopoly  was 
abolished  in  1768  and  the  salt  manufacture  and  trade 
was  thrown  open  to  the  public.  In  1773,  an  Act  of 
the  legislature  was  passed  whereby  it  was  provided 
that  it  should  not  be  lawful  for  any  of  his  Majesty's 
subjects  to  engage,  intermeddle  or  be  in  any  way  con- 
cerned, directly  or  indirectly,  in  the  inland  trade  in 
salt,  beetle-nut,  tobacco  or  rice  except  on  account  of 
the  United  Company."  In  fact,  however,  before  this 
Act  came  into  force  the  salt  manufacture  and  trade 
were  in  the  year  1772  again  monopolised,  for  the  bene- 
fit of  the  Company,  on  the  declared  ground  "  that  no 
new  hardships  would  be  imposed  upon  the  salt  manufac- 
turers, by  taking  the  management  of  that  article  into 
the  hands  of  Government ;  the  only  difference  being 
that  the  profit,  which  was  before  reaped  by  the  English 
gentlemen  and  their  banians,  would  be  now  acquired 
by  the  Company."  From  the  year  above  mentioned 
up  till  now,  a  monopoly  of  salt  under  varying  modes 
of  conducting  it  has  been  continued  for  the  benefit 
of  Government. 

The  next  important  article  of  monopoly  under 
the  East  India  Company  was  saltpetre.  The  exclu- 
sive privilege  of  saltpetre  trade  was  granted  by  the 
Subahdars  as  a  matter  of  favour  to  different  persons. 
Before  the  establishment  of  the  English  influence  it 
could  only  be  bought  from  the  manufacturer  in  the  first 
instance  by  those  persons  who  were  allowed  to  trade 
in  it :  and  all  other  persons  must  purchase  from  them. 

Under  the  East  India  Company  the  system 
adopted  was  that  the  whole  quantity  of  saltpetre 
produced  in  the  province  of  Behar  was  brought  into 
the  Company's  factories,  and  certain  established  prices 
allowed  for  it ;  and  no  other  persons  whatever  were 
permitted  to  trade  in  the  article.  The  Company  were 
bound  by  an  Act  of  Parliament  (i  Ann.  Cap.  12  §  112 

I  See  Ninth  Report  of  the  Select  Committee  1783,  under  head  of  «  Salt '  ; 
see  also  Regulations  for  carrying  on  the  inland  trade  in  salt,  beetle-nut,  and 
tobacco,  passed  loth  August  1765,  in  Colebrooke's  «  Digest,'  Vol.  Ill,  p.  375  ; 
referred  to  in  Harrington's  '  Analysis,'  Vol.  Ill,  661.  rt  ^  ?ti  • 

2  Ninth  Report  of  the  Select  Committee,  1783.  Harrington's  •  Analysis,' 
Vol.  Ill,  p.  661. 


39 

to  §  114)  to  deliver  annually,  if  demanded,  into  His 
Majesty's   stores  a  certain   quantity  of    saltpetre  at 
certain  specified   rates.     This   probably    operated    in 
keeping  up   a  virtual  monopoly  of   saltpetre  in  the 
hands  of  the  Company.     Then  followed  Regulation  8  Reg.  8,1812. 
of  1812  declaring  the  manufacture  of  saltpetre  to  be 
a  monopoly  on  the  part  of  Government ;  preventing  il- 
licit manufacture  of  saltpetre ;  and  regulating  the  con- 
duct of  the  agents,  and  all  persons  employed  in  the 
provision  of  that  article,  in  the  provinces  of  Bengal,  Monopoly 
Behar,  Orissa  and  Benares.     The  monopoly  was  abol-  MMd 
ished   on   the  nth  March,  1814,  by  Regulation  4  of 
that  year. 

Of  State  monopolies,  the  production  and  sale  of  state  monopoly 
intoxicating    liquors    has  always  held  a  conspicuous }"  JJJJ^0*    g 
place  in  some  western  countries.    It  is  one  of  the  essen-  essentially  fiscal, 
tially  fiscal  monopolies,  although  it  is  also  justified  ^SS 
on  moral  grounds   inasmuch  as  it  serves  as  a  guar-  as  well, 
antee  of  the  quantity  and  quality  of  the  article  con- 
sumed.    In  respect  of  the  monopolisation  of  'alcohol, 
Switzerland  stands  pre-eminent — the  moral  object  of  in  Switzerland, 
the  monopoly  being  the  popularisation  of  light  beers 
and  wines  in  preference  to  spirits.     The  monopoly  is 
in  part  federal,  in  part  cantonal,  and  in  part  munici- 
pal ;  and  the  annual  net  profit  since  the  establishment 
of  the  monopoly  has  been  considerable.     The  Gothen- 
burg system  in  Sweden  has  proved  equally  profitable  in  Sweden. 
and  equally  beneficial  to  the  people. 

The  same  can  hardly  be  asserted  with  confidence  in  India, 
about  the  liquor  trade  in  India.     But  it  is  undoubted- 
ly a  source  of  revenue  to  the  Indian  Government  and 
is  calculated  to  a  very  large  extent  to  exercise  a  whole- 
some check  on  the  consumption  of  alcohol  in  India. 
Under   the  Moghul   Emperors   the  system  of   excise 
(Abkari)  generally  in   force  was  one  of   farming,  the  Abkari— under  the 
right    of   manufacture  and    sale   being  given    to    the  M°8hul  Emperors, 
highest  bidder.     Under  the  British  administration,  at  under  British 
first,  this  farming  system  was  continued.     With  the  administration. 
double  object  of  checking  the  immoderate  use  of  spiri- 
tuous or  fermented  liquors  and  intoxicating  drugs  and  of 
augmenting  the  public  revenue,  successive  rules,  orders 
and  regulations  were  passed/     The  first  step  was  the 


1   In  1790;  in  1791;  in  1792;  Regulation  34  of  1793;  Regulation  47  of 
179?  :  Regulation  6  of  1800  amending  the  original  rules  for  the  purpose  of 


The  out-still 
system. 


The  central 
distillery  system. 


Manufacture  and 
sale  of  hemp-drugs 
— under  strict  state 
control. 


Abkari — not 
directly  within  the 
purview  of  our 
subject. 


Railways,  an 
instance  of  govern- 
mental monopolies. 


Should  Railways  be 
company-owned  or 
State-owned  ? 


Proportion  of 
state- owned  to 
company-owned 
railways  in  the 
world — 
U.S.A. 


limitation  of  the  number  of  shops  in  the  area  farnie 
Next,  was  established  the  so-called  out-still  system 
whereby  individual  licensees  were  allowed  to  distil 
liquor  at  their  own  shop  premises  and  sell  it  at  plea- 
sure. This  is  what  prevailed  for  a  long  time  in  Bengal, 
Behar  and  Orissa.  But  the  evils  of  the  out-still  sys- 
tem were  that  it  allowed  individuals  to  produce  an 
unlimited  quantity  of  inferior  stuff,  lower  the  prices, 
and  thus  encourage  the  practice  of  drinking.  This 
system  is  now  gradually  being  replaced  by  the  central 
distillery  system,  in  which  the  manufacture  and  stor- 
age are  under  Government  supervision,  and  the  liquor 
pays  a  still-head  duty  before  issue. 

A  system  of  abkari  with  necessary  variations  in 
details  is  followed  in  the  case  of  hemp -drugs  such  as 
ganja,  charas  and  bhang,  and  all  these  are  carried  on 
under  more  or  less  stringent  state  control,  one  of  the 
objects  of  such  control  being  to  keep  the  consumption 
of  the  commodities  in  question  within  reasonable 
limits.  Although,  however,  abkari  comes  indirectly 
into  our  discussion,  as  making  for  monopoly  of  a  sort 
(in  the  sense  of  state-controlled  industry),  I  do  not 
propose  to  discuss  it  in  detail  as  it  does  not  come 
directly  within  the  purview  of  our  subject. 

The  case  of  railways  affords  another  instance  of 
governmental  monopolies.  The  question  as  to  whether 
railways  should  be  company-owned  or  state-owned  has 
long  been  mooted ;  and  opinion  is  still  divided  on  the 
subject.  But  some  are  of  opinion  that  the  State 
should  take  over,  consolidate  and  operate  as  one  great 
undertaking  the  entire  railway  system  of  each  coun- 
try as  it  already  does  with  the  Post  Office,  the  tele- 
graph and  other  allied  services.  A  survey  of  the 
world's  railways  shows  that  the  proportion  of  state- 
owned  to  company-owned  railways  varies  in  a  remark- 
able manner.  Thus  in  the  United  States  and,  general- 
more  effectually  carrying  out  the  original  objects  of  the  abkary  tax  'cby 
enhancing  the  price  to  the  consumer  ' '  as  well  as  by  giving  the  Magistrates 
a  more  immediate  and  efficient  control  over  the  conduct  of  the  vendors. 
On  the  2ist  August,  1813,  Regulation  10  of  that  year  was  enacted  for  reduc- 
ing to  one  regulation,  with  alterations  and  amendments,  the  regulations  in 
force  respecting  the  manufacture  and  sale  of  spirituous  liquors,  intoxicating 
drugs,  taury  and  putchwy  (Taury  OY  Toddy  is  juice  from  the  palm  tree,  fer- 
mented, or  similar  juice  from  the  date  tree  and,  in  some  parts  of  Southern 
India,  from  the  cocoanut  tree.  Putchwy  OY  Puchooee,  is  composed  of  boiled 
rice,  mixed  with  various  drugs ;  and  prepared  by  a  fermenting  process  for 
intoxication).  See  Harrington's  'Analysis,'  Vol.  Ill,  p.  177. 


, 


41 

ly,  in  the  American  Continent  company-ownership  is 
paramount.     The  conditions  in  Australasia  are  just  the  Australasia, 
reverse,  the  state-owned  railways  being  over  90  per 
cent.     In  Europe,  there   is   only    a   slight   excess   in  Europe, 
favour  of  state-owned  over  company-owned  railways. 
In  British  India  there  is  a  considerable   amount  of  British  India. 
State  Railways,  e.g.  the  North- Western  Railway,  the 
Oudh  and  Rohilkhund  Railway,  the  Eastern  Bengal 
Railway,  and    so  on.      But    there    is    quite    a    large 
quantity  of  railway  in  the  land  which  is  run  by  com- 
panies such  as  the  East  Indian  Railway,  the  Great 
Indian  Peninsular  Railway,  the  Bombay,  Baroda  and 
Central  India  Railway  and  the  like.     As  matters  stand 
at  present,  it  is  on  State  agency  and  on  private  enter- 
prise under  State  control  that  India  has  to  depend 
for  the  construction  of  new  railways.     The  railways  Railways  in  India 
in  India  thus  present  a  variety  of  different  kinds  of  present  a  great 

^  i .         . «  1,1  i  variety  in  modes 

management,     borne    are    directly    undertaken    and  Of  management, 
managed  by  Government  or  Native  States,  others  are 
owned  by  Government  or  Native  States,  but  managed 
by  companies,  the  rest   exclusively    company-owned 
and  company-managed.     Concessions  are  granted  by  Concessions  granted 
the  Government  of  India  for  the  construction  of  branch  SSSSSrf  f< 
lines  forming  feeders  to  State  lines.     No  concession  branch  lines. 
can  be  granted  for  the  construction  of  a  branch  line 
until   the  line  has  been  surveyed   and  detailed  esti- 
mates of  its  cost,  and  an  adequate  report  on  its  traffic 
prospects,  have  been  prepared  by  an  agency  approved 
by  the  Government  of  India.     The  concession  granted 
is  in  the  shape  of   financial  assistance  to  approved 
companies  either  by  way  of  a  guarantee  of  interest 
or  of  a  rebate  to  the  branch  line  company  from  the 
net  earnings  of  the  main  line  from  traffic  interchanged 
with  the  branch.1 

CLASSIFICATION   OF   MONOPOLIES. 

Now  that  we  have  briefly  surveyed  the  different 
types  of  monopoly  that  present  themselves  to  an 
ordinary  observer,  we  are  perhaps  in  a  position  to  ana- 
lyse them  a  little  further  and  proceed  to  classify 
them.  Strictly  speaking,  the  work  of  classification 

I  See  Resolution  No.  457  R.P.  of  1913  modified  by  Resolution  No.  969 
R.P.  of  1914.     Railway  Administration  Report. 


42 

ought  to  come  last,  for  you  have  to  know  a  thing  well 
before  you  can  label  it  and  classify  it.  At  the  same 
time,  a  tentative  process  of  classification  helps  the 
understanding  of  a  subject,  and  saves  one  from  con- 
fusion among  all  its  details.  Monopolies  have  been 
classified  differently  by  various  authors  and,  I  almost 
think,  the  work  of  classification  has  been  done  too 
much  so  that  at  times  reality  has  been  sacrificed  ta 
subtlety.  Most  of  these  classifications  proceed  from 
the  economic  point  of  .view.  With  us,  happily,  the 
work  is  much  simpler  as  we  have  to  proceed  upon  a 
broader  basis  and  take  only  the  main  types  as  they 
present  themselves  to  the  jurist,  and  seek  to  classify 
them  for  purposes  of  convenience  and  clearness  of 
thought. 

classification  by  The  classification  incidentally  adopted  so  far  and 

Na°urainks  int°  indicated  at  the  beginning  of  this  lecture  is  the  one 
Capitalistic- *  ''  adopted  by  Prof.  J.  W.  Jenks.1  He  divides  monopo- 
discussed.  lies  jnto  three  main  classes,  viz.  Natural,  Legal,  and 

Capitalistic  Monopolies.  The  first  class  includes  such 
businesses  as  railways,  tramways,  gas,  drainage  and 
other  similar  works,  as  also  the  working  of  such  miner- 
als as  can  be  found  only  in  specific  areas,  in  other  words, 
all  businesses  which  owe  their  existence  and  success  to 
favourable  natural  arrangements  of  soil  or  situation. 
As  to  natural  ability  in  the  sense  of  personal  aptitude 
and  the  like,  Prof.  Jenks  touches  upon  the  subject, 
but  does  not  sufficiently  develop  it ;  nor  does  he  indi- 
cate the  monopolies  which  spring  out  of  special 
mental  equipments  on  the  part  of  individuals.  But 
we  may  take  it  that  they  are  implied  by  him,  and 
evidently  go  under  the  class  of  Natural  monpolies. 
The  Legal  monopolies  include  Patents,  Copyright, 
Trademarks,  etc.,  but,  I  presume,  they  would,  properly 
speaking,  also  include  the  municipal  and  governmen- 
tal monopolies  (whether  based  on  fiscal  considerations 
or  otherwise)  discussed  in  the  earlier  portion  of  this 
lecture.  Lastly,  the  Capitalistic  Monopolies  include  all 
the  monopolistic  combinations  which  depend  on  va- 
rious factors  briefly  indicated  in  the  last  lecture,  viz. 
combination  of  large  masses  of  capital,  business 
ability  and  the  like,  resulting  in  the  absolute  or  partial 

l  See  his  suggestive  article  in  Palgrave's  Dictionary  of  Political  Econ- 
omy headed  '  Monopolies  in  the  United  States.' 


43 

concentration  of  business  in  a  particular  commodity 
in  the  hands  of  one  or  more  persons.  The  word  objection  to  the 
'  Capitalistic '  has  been  objected  to  on  the  ground  that  i!rdTScUCSsed!alisti 
the  prevailing  or  paramount  feature  of  such  monopo- 
lies is  not  the  mass  of  capital  involved,  but  the  combi- 
nation or  unification  of  action  which  they  present.1  It 
can  scarcely  be  doubted,  however,  that  the  mass  of 
capital  employed  is  an  invariably  potent  factor  in 
the  case  of  all  such  monopolistic  combinations,  and 
in  that  view  the  nomenclature  can  hardly  be  called 
inaccurate. 

A  classification  somewhat  on  the  same  lines,  but  Dr.  Bullock's 
rather  improved  in  some  respects,  is  offered  by  Dr. 
Charles  J.  Bullock  in  his  l  Introduction  to  the  Study  of 
Economics/     He  classifies  as  follows  :— 

A.  Monopolies  of  Personal  Abilities. 

B.  Legal  Monopolies. 

I.     Private  Monopolies,  such  as  patents,  copy- 
right, etc. 

II.  Public  Monopolies,  such  as  the  postal  busi- 
ness of  modern  countries.  (Herein  would 
be  included  the  public  consumption 
monopolies,  and  the  fiscal  monopolies; 
and,  perhaps,  also  the  railway  mono- 
polies under  State  control.  But  these 
last  go  under  Natural  Monopolies  as  well, 
and  are  placed  by  Dr.  Bullock  in  that 
class). 

C.  Natural  Monopolies. 

I.     Monopolies  of  location,  such  as  the  monopo- 
ly of  anthracite  coal. 

II.  Monopolies  due  to  consumption  of  products 
in  connection  with  the  plants,  such  as 
gas  and  electric  light  works  and  rail- 
ways. 

D.  Capitalistic  Monopolies,  such  as  agreements, 

pools,  the  former  ( Trusts '  and  the  vast  cor- 
porations which  now  replace  the  'Trusts/  a 

A  very  ingenious  and  comprehensive  classification  Prof.  Ely's  ciassifi 
of  monopolies  for  our  purposes  is  that  offered  by  Prof.  cation~ 

l  See  §  5,  Lecture  I.  *  See  Lectures  XI,  XII. 


44 

Ely  in  his  luminous  little  book,  'Monopolies  and 
Trusts/  He  suggests  several  modes  of  classification  l 
of  which  I  shall  take,  first  of  all,  the  following  :- 

A.  SOCIAL  MONOPOLIES.     These  are  subdivided 

into  :— 

I.     General  Welfare  Monopolies. 

1.  Patents. 

2.  Copyrights. 

3.  Public  Consumption  Monopolies. 

4.  Trade-marks. 

5.  Fiscal  Monopolies. 

II.     Special  Privilege  Monopolies. 

1.  Those  based  on  Public  Favouritism. 

2.  Those  based  on  Private  Favouritism. 

B.  NATURAL    MONOPOLIES.     These,   again,    are 

subdivided  into  :— 

I.     Those  arising  from  a  limited  supply  of  raw 

material. 
II:     Those  arising  from  properties  inherent  in 

the  business. 
III.     Those  arising  from  secrecy. 

The  term « Social  ^  *s  to  De  observed  that  the  class  called  Social 

monopolies'—       Monopolies  is  comprehensive  enough  to  include  within 
it  the  so-called  contractual  monopolies  and  customary 
,  monopolies  dealt  with  in  the  last  lecture.     "  A  Social 

Monopoly,"  observes  Prof.  Ely,  "is  a  monopoly  which 
arises  out  of  social  arrangements  and  is  an  expression 
of  the  will  of  society  as  a  whole,  through  Government 
or  of  a  section  of  society  strong  enough  to  impose  its 
will  on  society.  A  Natural  Monopoly,  on  the  other 
hand,  is  a  monopoly  which  rests  back  on  natural  arrange- 
ments as  distinguished  from  social  arrangements.  The 
term  '  Natural '  here  is  used  in  its  well-understood  and 
customary  sense,  to  indicate  something  external  to 
man's  mind.  A  natural  monopoly  is  one  which,  so 
far  from  giving  expression  to  the  will  of  society,  grows 
up  apart  from  man's  will  and  desire,  as  expressed 
socially,  and  frequently  in  direct  opposition  to  his  will 
and  desire  thus  expressed." 


See  «  Monopolies  and  Trusts  *  by  Prof.  Richard  T.  Ely,  Chap.  II. 


45 


RA  few  words  are  necessary  to  explain  the  sig-  prof,  Ely's  scheme 
icance  of  the  various  heads  or  designations  under  ^^  ?iscussed  and 
^lich  monopolies  have  been  grouped  in  the  last  men-  cl 
tioned  classification.  So  far  as  patents,  copyrights 
and  trade-marks  are  concerned  the  position  is  clear  place  of  patents 
enough.  It  is  not  difficult  to  perceive  that  for  the  ^ the  scheme— 
welfare  of  society  and  for  the  general  encouragement 
of  inventions  it  is  expedient  and  proper  that  the  legis- 
lature should  grant  to  the  first  inventor  an  exclusive 
right  to  the  fruits  of  his  invention  for  a  limited  time. 
Thus  the  monopoly  is  a  limited  one  in  time,  and  after 
the  lapse  of  the  prescribed  period  the  inventor  loses 
his  monopoly  and  it  becomes  public  property.  While, 
however,  it  is  easy  to  see  that  there  should  be  in  the 
interests  of  public  welfare  a  limited  monopoly,  such 
as  the  one  above  indicated,  in  the  first  inventors,  it 
is  not  so  easy  to  admit  that  the  law  as  it  stands  new 
is  perfectly  fair  and  equitable  to  contemporaneous 
inventors.  Inventions  are  after  all  social  products 
and  shape  themselves  to  the  needs  and  requirements 
of  particular  ages  and  climes.  For  instance,  with  the 
development  of  rapid  transit  agencies  of  all  sorts, 
aviation  as  a  new  method  of  locomotion  has  made  its 
appearance  and  in  these  days  of  aviation  one  may  well 
expect  all  ingenious  artificers  and  workmen  to  cast 
about  and  improvise  new  methods  and  new  contri- 
vances that  may  help  forward  and  improve  the  art 
of  aviation.  Now  suppose  two  men  by  the  employ- 
ment of  such  materials  and  ideas  as  have  become  the 
common  property  of  all  mechanics,  and  by  their  own 
independent  exertion  and  skill,  hit  upon  the  same  in- 
vention, but  one  of  them  is  only  a  day  or  two  ahead 
of  the  other.  Who  is  to  be  entitled  to  the  patent 
right  ?  Is  the  one  who  comes  a  day  or  two  later  to 
be  deprived  of  the  privilege,  although  he  really  owes 
it  to  no  one,  but  has  evolved  it  out  of  his  own  im- 
agination ?  Is  time  really  of  the  essence  of  the  right  ? 
One  would  think  not,  yet  the  patent  system  as  it 
stands  now  can  give  us  nothing  better.  '  First  come, 
first  served '  is  the  principle  on  which  it  proceeds. 

The  case  of  copyright  is  simpler.     Two  men  may  Place  of  copyright 
hit  upon  the  same  invention,  independently  of  eachic 
other.     But   two  men  cannot   possibly  chance  upon 
the  very  same  literary,  artistic  or  musical  composition. 


46 

At  any  rate,  the  probabilities  are  much  against  sue] 
a  thing  happening.  It  is  for  this  reason  that  some 
have  contended  in  favour  of  a  perpetual  copyright 
monopoly.  But  it  is  obvious  that  the  claim  is  based 
on  an  utter  disregard  of  the  right  of  society  to  its  pro- 
ducts, for,  after  all,  whether  it  be  mechanical  inven- 
tion, or  literary,  artistic  or  musical  invention,  it  is 
pre-eminently  a  social  product ;  and  after  the  claims 
of  the  inventor  or  author  are  satisfied  by  means  of  a 
temporary  monopoly  the  subject  of  such  monopoly 
should  become  the  property  of  the  public  at  large. 
This  question  was  thoroughly  discussed  in  the  case  of 
Millar  v.  Taylor,1  and  Mr.  Justice  Yates  observed:— 
''That  every  man  is  entitled  to  the  fruits  of  his  own 
labour  I  readily  admit.  But  he  can  only  be  entitled 
to  this,  according  to  the  fixed  constitution  of  things, 
and  subject  to  the  general  right  of  mankind  and  the 
general  rules  of  property.  He  must  not  expect  that 
these  fruits  shall  be  eternal,  that  he  is  to  monopolise 
them  to  infinity ;  that  every  vegetation  and  increase 
shall  be  confined  to  himself  alone  and  never  revert  to 
the  common  mass.  In  that  case,  the  injustice  would 
lie  on  the  side  of  the  monopolist  who  would  thus 
exclude  all  the  rest  of  mankind  from  enjoying  the 
natural  and  social  rights.  The  labours  of  an  author 
have  certainly  a  right  to  a  reward,  but  it  does  not 
from  thence  follow  that  this  reward  is  to  be  infinite 
and  never  to  have  an  end." 

« Public  consump-  The  third  sub-class,  viz.  public  consumption  mono- 

exSaTned'and68'"  P°lies>  covers  a  variety  of  articles  and  may  well  be  con- 
iiiustrated.  sidered   together   with  the  fifth  sub-class,  viz.  fiscal 

monopolies.  The  salt  and  opium  monopoly  of  India  ; 
the  opium,  salt  and  camphor  monopoly  of  Formosa ; 
the  tobacco  monopoly  of  Austria ;  the  tobacco  leaf  mon- 
opoly of  Japan ;  the  monopoly  of  alcohol  in  Switzer- 
land; the  partial  monopoly  or  abkari  system  of 
India — all  these  may  be  mentioned  as  making  for  pub- 
lic welfare  in  regard  to  consumption  of  necessaries  or 
luxuries.  But  the  majority  of  them  turn  more  on 
fiscal  than  on  any  other  consideration.  Regarding 
the  opium  or  alcohol  monopoly,  for  instance,  or  the 
many  other  intoxicating  drugs  that  come  within  the 

i  4  Burr  2303,  at  p.  2359.     S.C  98  Eng.  Rep.  201. 


47 

abkari  regulations  of  the  Government  of  British  India, 
if  the  moralist  had  his  way  altogether,  the  use  of  the 
articles  would  be  placed  under  prohibition,  except  for 
medical  purposes.  On  the  other  hand,  an  article  like 
salt  would  have  been  made  much  more  accessible  than 
it  is  at  present.  The  State  in  these  instances  has  to 
content  itself  with  a  qualified  ideal  of  public  welfare ; 
and  is  powerfully  influenced  by  questions  of  revenue. 
Thus  referring  to  the  opium  monopoly  created  by  the 
Japanese  Government  in  its  dependency  of  Formosa, 
Mr.  Franci?  W.  Hirst  in  his  little  book  quotes  from 
Dr.  Shimpi  Goto,  the  Civil  Governor,  who  observes 
that  the  habit  of  smoking  opium  is  pernicious  and 
that  it  was  therefore  decided  to  abolish  the  practice 
by  degrees :  "  When  the  Japanese  took  possession  of 
Formosa  they  found  there  a  population  more  or  less 
addicted  to  the  use  of  the  drug."  "  Only  those  who  were 
already  addicted  to  the  use  of  the  drug  to  the  extent 
that  it  occasioned  them  intense  pain  to  deprive  them 
of  the  pipe  are  now  permitted  by  a  special  warrant, 
whi?h  they  are  obliged  to  procure,  to  continue  its  use. 
To  commence  opium  smoking  is  strictly  forbidden,  or 
even  to  continue  its  use,  unless  it  can  be  shown  that 
abstention  is  impossible.  The  Government  monopoly 
of  the  article  was  expressly  established  to  facilitate 
the  final  extinction  of  the  opium  habit."  Mr.  Hirst 
then  pertinently  observes:  "  This  sounds  highly  satis- 
factory. But  it  is  rather  alarming  to  learn  that  the 
revenue  derived  from  so  very  virtuous  a  monopoly 
amounts  at  present  (1904)  to  about  £4,000,000  a 
year.  The  inhabitants  of  Formosa  number  less  than 
3,000,000"  ! 

The  essence  of  a  trade-mark  right  is  the  reputed  Place  of  trade- 
association  in  the  market  of  the  particular  symbol  or  ™in  the 
mark  or  the  particular  trade-name  with  the  goods  of 
a  particular  trader.  Such  mark  or  name  comes  to 
stand  for  the  quality  of  the  goods  in  question.  If 
any  one  uses  the  particular  mark  or  name,  he  there- 
by represents  his  goods  as  the  goods  of  the  particular 
trader  or  as  possessing  some  connection  with  him  which 
the  goods  in  fact  do  not  possess.  Thus  the  public  is 
deceived  and  there  is  a  wrong  committed  in  respect 
of  which  the  trader  has  a  cause  of  action  against  any 
person  who  is  responsible  for  the  deception.  The  lead- 


48 


poiies  would 

undUer1iTeCg0eneerai 
welfare  monopo- 


Special  Privilege 
monopolies. 


illustrations. 


ing  principle  as  stated  by  James,  LJ.  in  the  case  of 
Singar  Manufacturing  Co.  v.  Loog  '  is  as  follows  :—  "  No- 
man  is  entitled  to  represent  his  goods  as  being  the 
goods  of  another  man  ;  and  no  man  is  permitted  to  use 
any  mark,  sign  or  symbol,  device  or  other  means,  where- 
by, without  making  a  direct  false  representation  him- 
self to  a  purchaser  who  purchases  from  him,  he  enables 
such  purchaser  to  tell  a  lie,  or  to  make  a  false  repre- 
sentation to  somebody  else  who  is  the  ultimate  cus- 
tomer. That  being,  as  it  appears  to  me,  a  comprehen- 
sive statement  of  what  the  law  is  upon  the  question  of 
trade-mark  or  trade-designation,  I  am  of  opinion  that 
there  is  no  such  thing  as  a  monopoly  or  a  property 
in  the  nature  of  a  copyright,  or  in  the  nature  of  a 
patent,  in  the  use  of  any  name.  Whatever  name  is 
used  to  designate  goods,  anybody  may  use  that  name 
to  designate  goods;  always  subject  to  this,  that  he 
must  not  as  I  said,  make,  directly  or  through  the 
medium  of  another  person,  a  false  representation  that 
his  goods  are  the  goods  of  another  person."  The  right 
of  property  in  trade-marks  was  further  established 
by  the  decision  of  Lord  Cottenham  in  Millington  v. 
Fox  *  where  it  was  held  that  an  injunction  could  be 
obtained  to  restrain  infringement  of  a  trade-mark,  even 
though  the  infringement  was  due  to  ignorance,  and 
was  without  fraudulent  intent. 

Th?  customary  and  contractual  monopolies  men- 
tioned  in  the  last  lecture  do  not  appear  anywhere  in 
the  classification  above  offered.  They,  however,  come 
naturally  under  general  welfare  monopolies,  for  the 
main  principle  on  which  they  rest  is  public  policy  or 
public  welfare.3 

The  second  class  under  Social  Monopolies  is  called 
Special  Privilege  Monopolies  or  those  which  owe  their 
origin  to  the  arbitrary  favour  or  patronage  of  the 
sovereign,  or  some  authority  in  whose  hands  lies  the 
gift  of  the  power  or  privilege.  The  old  monopolies 
established  in  England  were  of  this  class.  The  exclusive 
right  anciently  given  to  the  Universities  of  Oxford 
and  Cambridge  of  printing  and  publishing  almanacs, 
the  monopoly  given  to  the  East  India  Company, 


'  18  Ch.  D.  395  at  p.  412 ;  52  IV.J.  Ch.  481  (1880). 
*  3  My.  and  Cr.  338.  3  See  Lecture  I. 


49 

monopolies  founded  on  protective  tariff  are  illustra- 
tions of  Special  Privilege  Monopolies,  based  on  public 
favouritism.  They  have  been  discussed  in  detail  in  the 
last  lecture  and  I  do  not  propose  to  deal  with  them 
any  further  in  the  present.  Those  based  on  private 
favouritism  are  more  often  to  be  found  in  present-day 
economic  conditions.  The  favouritism  of  the  railways 
is  a  conspicuous  instance.  A  study  of  the  conditions 
under  which  the  so-called  modern  'Trusts'  nourish 
reveals  the  undoubted  fact  that  a  good  many  of  the 
Trusts  derive  their  origin  and  success  not  so  much  to 
concentration  of  capital,  or  organisation  of  business 
ability,  as  to  the  securing  of  advantageous  freight 
rates  from  Railway  companies,  with  the  result  that  they 
succeed  in  delivering  the  article  to  the  wholesale  dealer 
at  his  place  of  business  at  a  much  lower  price  than 
is  possible  to  any  other  producer  in  the  field. L  The  con- 
ditions above  referred  to  are  no  doubt  highly  artificial. 
No  less  artificial  are  the  monopolies  which  are  fostered 
by  a  system  of  preferential  tariff.  Mr.  Havemeyer 
has  observed  that  tariff  is  the  mother  of  trusts.  There 
are  at  the  present  day  in  America  many  great  trusts 
whose  connection  with  the  tariff  has  never  been 
denied.  The  United  States  Steel  Corporation  (with 
its  constituent  companies  such  as  the  American  Plate 
Company),  the  American  Sugar  Refining  Company,  the 
Beef  Trust,  the  National  Cash  Register  Company,  the 
International  Harvester  Company,  the  International 
Paper  Company  and  the  American  Woollen  Company 
are  well-known  illustrations  of  the  intimate  connection 
between  tariff  and  Trusts.  A  protective  tariff  is  sup- 
posed to  foster  an  infant  industry  by  protecting  it  from 
the  effects  of  unequal  competition  with  a  powerful 
rival.  The  common  case  is  that  of  an  unsuccessful 
industry  complaining  of  foreign  competition  and  a 
paternal  government  promptly  adding  a  clause  to  the 
tariff  placing  a  stiff  duty  upon  the  foreign  article. 
This,  of  course,  safeguards  the  industry  in  question  from 
the  encroachments  of  foreign  competition.  But  at  the 
same  time,  it  encourages  other  producers  in  the  country 
to  enter  the  field,  thereby  keeping  up  the  competition 
although  in  another  form.  This  leads  to  combina- 

l  See  Lectures  XI  and  XII. 


Social  monopolies 
due  to  artificial 
conditions — hence 
often  called  '  arti- 
ficial monopolies.' 


Monopolies  arising 
from  inherent  pro- 
perties of  business. 


tion  as  the  next  most  inevitable  step.  One  of  the 
leading  firms  of  producers  hits  upon  the  happy  idea 
of  combining  with  some  other  and  thereby  killing  com- 
petition and  avoiding  the  lowering  of  prices  which 
competition  brings  in  its  train.  Thus  the  tariff,  by 
excluding  foreign  industry,  artificially  limits  the  field 
of  competition  and,  again,  by  encouraging  home  com- 
petition imperceptibly  leads  the  way  to  the  formation 
of  Trusts  and  combinations.  This,  however,  is  not  in- 
variably so.  In  certain  cases  the  industry  in  ques- 
tion is  sheltered  from  foreign  competition  not  by  a 
tariff  but  by  natural  advantages.  This  leads  us  to 
the  next  class. 

It  will  have  been  noticed  that  the  monopolies 
coming  under  the  designation  social  monopolies  are 
all  due  more  or  less  to  artifical  conditions.  In  fact, 
social  monopolies  are  often  called  ( artificial '  monopo- 
lies. For  my  part,  I  am  inclined  to  think  that  ( artifi- 
cial' is  a  happier  name,  and  is  also  a  more  suitable 
antithesis  to  the  word  "'natural.11  Certain  writers 
like  Prof.  Ely,  however,  prefer  the  term  ( social '  to 
'  artificial '  on  the  ground  that  the  latter  carries  with 
it  a  certain  criticism  and  almost  savours  of  reproach. 
Whatever  may  be  said  about  the  first  group,  so  far 
as  the  second  group  is  concerned  the  term  ( natural 
monopolies '  is  about  the  most  appropriate  which  has 
been  applied,  and  has  also  received  very  wide  accepta- 
tion. Illustrations  of  the  first  sub-class,  viz.  monopo- 
lies arising  from  a  limited  supply  of  the  raw  material, 
may  be  found  in  the  business  in  anthracite  coal  in 
America.  The  secret  of  the  monopoly  is  to  be  found 
in  the  fact  that  the  supply  of  anthracite  coal  is  limited 
only  to  one  section  of  Pennsylvania.  The  oil  business 
in  America  furnishes  another  instance.  The  business 
of  refining  oil  first  became  a  monopoly.  The  produc- 
tion of  crude  oil  also  soon  became  a  monopoly  owing 
to  the  fact  that  the  oil  was  to  be  found  only  in  limited 
geographical  areas.1  It  is  difficult  to  give  similar 
instances  ija  India. 

The  tSjjgtt  class,  namely  the  monopolies  arising 
from  properties  inherent  in  the  business,  include  rail- 
ways, canals,  postal  service,  the  telegraph  and  the  tele- 


See  Lectures  XI  and  XII. 


phone,  docks,  light-houses,  local  rapid  transit  agen- 
cies, gas-works,  water-works,  etc.,  and  other  enter- 
prises and  businesses  of  a  like  nature.1 

Lastly,  monopolies  arising  from  secrecy.  Secret  Monopolies  arising 
processes  are  an  important  source  of  monopoly.  A  from  secrecy' 
special  recipe  for  dying,  or  tanning,  a  special  process 
of  tempering  steel,  or  a  special  prescription  for  hydro- 
phobia or  malaria,  has  formed  the  basis  of  a  most 
lucrative  monopoly.  The  object  of  the  law  of  patents 
is  to  do  away  with  such  secrecy  by  giving  the  first 
inventor  a  limited  protection  for  a  specified  period 
and  thereafter  making  the  secret  process  the  property 
of  the  public.  But  notwithstanding  patent  laws  the 
practice  of  keeping  processes  secret  is  most  exten- 
sively followed  in  all  departments  of  arts  and  indus- 
tries. In  India,  it  is  common  knowledge  that  a  secret 
is  very  often  kept  within  a  family  circle  and  handed 
down  from  generation  to  generation. 

Various  other  classifications  have  been  suggested. 
But  having  regard  to  the  special  object  of  classifica- 
tion we  have  in  view  for  the  purposes  of  these  lectures, 
a  detailed  discussion  of  these  methods  of  classifica- 
tion is  scarcely  necessary. 

i  The  following  passage  from  Prof.  Ely's  Monograph  entitled  '  Monopo- 
lies and  Trusts'  will  repay  perusal : — "The  chief  characteristics  of  natural 
monopolies  of  this  kind  are  these :  first,  that  the  service  or  commodity  makes 
use  of  certain  pecularly  favoured  spots  or  lines  of  lands  ;  secondly,  that  it  is 
furnished  in  connection  with  the  plant  itself — railway  service,  for  example, 
cannot  be  shipped  but  must  be  used  in  connection  with  the  plant — if  it  could 
be  shipped  as  flour  can  be  then  we  would  have  a  different  result ;  and  thirdly, 
that  the  returns  are  in  accordance  with  the  law  of  increasing  returns— the 
greater  the  output  the  larger  the  return.  The  latter  produces  an  inevitable 
tendency  to  monopoly.  The  cheaper  the  rate  at  which  an  increasing  output 
can  be  furnished  the  greater  is  the  tendency  to  monopoly,  because  wherever 
two  competitors  unite,  they  can  furnish  the  service  or  commodity  more 
cheaply  and,  consequently,  there  is  always  a  gain ;  in  the  case  of  street  rail- 
ways, for  example,  there  is  a  very  decided  gain,  which  is  the  inducement  to 
combination. 


LECTURE  III. 


Growth  of  modern 
monopolies. 


Character  of 

ancient 

monopolies. 


HISTORY  OF  MONOPOLIES. 

§  i.    ANCIENT  MONOPOLIES. 

The  modern  monopolies  are  the  direct  outcome 
of  modern  conditions  of  industry,  We  hear  of  at- 
tempts at  a  world  monopoly,  although  hitherto  they 
have  met  with  partial  success.  Such  a  thing  was  un- 
heard of  in  ancient  times,  the  conditions  of  life  were  so 
different  and  the  means  of  transportation  by  sea  and 
land  so  slow  and  uncertain.  Steam  and  electricity 
and  the  rapid  transit  agencies  which  they  have 
brought  in  their  train  have  revolutionised  the  world,  in- 
finitely expanded  the  sphere  of  our  activities  and  affec- 
ted the  magnitude  of  our  undertakings.  The  change 
effected  by  these  improvements  in  the  realm  of 
monopolies  is  no  less  remarkable.  We  now  speak  of 
'  Trusts  '  and  (  Combinations  '  and  look  upon  their  pro- 
digious proportions  as  almost  in  the  nature  of  common- 
places. In  the  olden  times,  the  only  considerable 
monopolies  that  existed  were  governmental  or  state 
monopolies.  Thus  we  read  of  royal  monopolies  of 
brick,  syenite  and  papyrus  in  Egypt,  of  royal  monopo- 
lies of  wheat  and  purple  among  the  Phoenicians. 
In  ancient  Greece  and  Rome  there  were  also  various 
state  monopolies  ;  as,  for  instance,  monopolies  of  lead 
mines  and  of  banking  in  Greece,  the  monopoly  of  salt 
in  Rome.  In  the  ancient  books  of  India  we  find  refer- 
ence in  distinct  terms  to  royal  monopolies.  Thus  we 
find  in  the  code  of  Manu,  "Let  the  king  confiscate  the 
whole  property  of  a  trader  who  out  of  greed  exports 
goods  of  which  the  king  has  a  monopoly  or  the  export 
of  which  is  forbidden."  L  Medhatithi,  the  learned  com- 
mentator of  Manu,  gives  as  instances  of  monopolies, 
elephants,  saffron  in  Kashmir/  fine  cloth  and  wool  in 
the  east  ;  horse  in  the  west,  precious  stones  and  pearls 
in  the  south.  In  Yajnavalkya  we  find  a  reference  to 


1  Manu  VIII,  verse  399. 

2  It  is  interesting  to  note  that  saffron  is  still  a  royal  monopoly  in  Kash- 
mir. 


53 

royal  monopolies  in  the  following  verse :  "  The  king 
shall  take  as  a  tax  a  twentieth  share  of  the  price  of  a 
commodity  fixed  by  him.  A  thing  specially  ordered 
to  be  reserved  by  or  worthy  of  a  king  shall,  if  sold  to 
a  stranger,  belong  to  a  king."  Again  during  the 
reign  of  Chandra  Gupta,  the  founder  of  the  Mauryya 
dynasty,  ship-building,  which  was  quite  a  flourishing 
industry,  was  in  the  hands  of  the  State  and  was  a 
Government  monopoly.  Speaking  of  ship-builders 
Megasthenes  observes  that  they  were  salaried  public 
servants  and  were  not  permitted  to  work  for  any 
private  person.1 

It  would  scarcely  be  true,  however,  to  say  that  other  monopolies 
royal  monopolies  were  the  only  ones  in  the  world,  iesMe^sta^168 
although  they  were  no  doubt  the  most  considerable  monopolies, 
monopolies.  But  others  could  easily  be  mentioned. 
For  instance,  there  was  that  much-hated  class  of 
monopolists  known  to  us  under  the  scriptural  designa- 
tion of  "publicans  and  sinners"  -the  farmers  of 
revenue  who  enjoyed  the  exclusive  privilege  of  collect- 
ing taxes,  a  privilege  which  they  often  abused  by 
levying  blackmail  in  the  tracts  coming  within  their 
jurisdiction.  Apart  from  these  and  other  minor 
monopolies,  there  were,  of  course,  as  there  must  be  in 
all  ages  and  climes,  natural  monopolies  springing  from 
some  special  advantages,  mental  or  material,  of  some 
sort  or  other.  Thus  if  Tyre  and  Sidon  enjoyed  exclu- 
sive privileges  of  trade  in  the  Black  Sea  and  the 
Mediterranean,  it  was  because  they  had  a  natural 
aptitude,  pre-eminent  in  that  age,  for  commerce  and 
trade  and  made  themselves  conspicuous  for  commer- 
cial enterprise  across  the  seas.  There  is  enough  evi- 
dence in  ancient  and  mediaeval  history  of  organized 
attempts  at  monopoly  of  food- stuffs,  and  also  of  steps 
taken  by  individuals  and  the  State  to  counteract  them. 
Witness  the  proverb,  <(  He  that  withholdeth  corn  the 
people  shall  curse  him  but  blessing  shall  be  upon  the 
head  of  him  that  selleth. "  This  seems  to  point  to  the 
existence  of  a  phenomenon  which  in  mediaeval  phraseo- 
logy would  be  called  'Ingrossing'  and  which  per- 
haps is  the  prototype  of  our  modern  ' Corner.' 

1  Strabo  XV,  46.     The  ship-builders  received  wages  and  provisions  from 
the  king  for  whom  alone  they  worked. 

2  See  infra.     See  also  Le  Rossignol's  '  Monopolies  Past  and  Present,' 
p.  26. 


54 

In  Athens  there  appears  to  have  been  a  strong 
feeling  against  similar  manipulations  by  grain-factors 
who  used  to  buy  up  grain  from  the  ships  at  the  Piraeus 
and  sell  it  in  Athens  at  high  prices,  which  they  secured 
by  combination  amongst  themselves.  The  public 
feeling  led  the  State  to  intervene  and  laws  were  passed 
with  the  object  of  controlling  prices  and  profits. 
Officers  were  appointed  whose  duty  was  to  supervise 
the  grain  trade  in  Athens  and  the  Piraeus  and  to  con- 
duct an  inspection  of  bread  and  meat.  And  yet  the 
mischief  was,  as  it  always  has  been,  hard  to  combat. 
Listen  to  what  Lysias,  the  orator,  says  in  denunciation 
of  the  methods  of  corn-factors  of  his  time,  and  you  will 
at  once  realise  that  history  does  repeat  itself.  He 
says,  "They  buy  up  grain,  under  the  pretence  of  car- 
ing for  the  public  welfare  or  of  having  a  commission 
from  the  Magistrates.  But  when  a  war-tax  is  imposed 
their  pretended  public  spirit  is  not  maintained.  They 
gain  by  the  public  calamities.  They  are  so  well- 
pleased  with  them  that  they  have  the  first  news  of  them 
or  invent  news,  as  for  instance,  that  the  ships  in  the 
Pontus  have  been  taken  or  destroyed,  that  ports  are 
closed,  that  treaties  are  revoked.  Even  when  the 
enemy  are  quiet  they  harass  the  citizens  by  accumu- 
lating grain  in  their  storehouses,  and  by  refusing  to 
sell  in  time  of  the  greatest  scarcity  in  order  that  the 
citizens  may  not  dispute  with  them  about  the  price, 
but  may  be  glad  to  procure  grain  at  any  price.  In  the 
case  of  other  criminals,  ye  have  to  learn  their  offence 
from  the  accusers,  but  the  wickedness  of  these  men 
ye  all  know.  If  then  ye  condemn  them  ye  will  act 
justly  and  make  corn  cheaper,  but,  if  not,  dearer." 
Evidently  the  tactics  of  the  grain- dealers  of  those 
times  do  not  differ  much  in  principle  from  the  manipu- 
lations of  various  classes  of  modern  traders  through 
a  press  too  often  addicted  to  sensationalism.  For 
another  illustration  of  prohibitions  of  monopolies  in 
the  ancient  world  take  the  following  translation  of  an 
Edict  of  Zeno,  Emperor  of  the  East,  issued  to  the 
Praetorian  Prefect  of  Constantinople.  "We  com- 
mand that  no  one  may  presume  to  exercise  a  mono- 
poly of  any  kind  of  clothing,  or  of  fish,  or  of  any  other 

l  Quoted  in  I,e  Rossignol's  «  Monopolies  Past  and  Present,'  pp.  27-28. 


55 

thing  serving  for  food,  or  for  any  other  use  whatever 
its  nature  may  be,  either  of  his  own  authority  or  under 
a  receipt  of  an  Emperor  already  procured  or  that  may 
hereafter  be  procured,  or  under  an  Imperial  Decree, 
or  under  a  receipt  signed  by  Our  Majesty ;  nor  may 
any  persons  combine  or  agree  in  unlawful  meetings 
that  different  kinds  of  merchandise  may  not  be  sold 
at  less  price  than  they  may  have  agreed  upon  among 
themselves.  Workmen  and  contractors  for  buildings, 
and  all  who  practise  other  professions  and  contractors 
for  baths,  are  entirely  prohibited  from  agreeing  to- 
gether that  no  one  may  complete  a  work  contracted  for 
by  another,  or  that  a  person  may  prevent  one  who 
has  contracted  for  a  work  from  finishing  it ;  full  liberty 
is  given  to  anyone  to  finish  a  work  begun  and  aban- 
doned by  another  without  apprehension  of  loss,  and 
to  denounce  all  acts  of  this  kind  without  fear  and 
without  costs,  and  if  any  shall  presume  to  practise  a 
monopoly  let  his  property  be  forfeited  and  himself 
condemned  to  perpetual  exile.  And  in  regard  to  the 
principals  of  other  professions,  if  they  shall  venture 
in  the  future  to  fix  a  price  upon  their  merchandise, 
and  to  bind  themselves  by  agreements  not  to  sell  at  a 
lower  price,  let  them  be  condemned  to  pay  forty 
pounds  of  gold  if  it  shall  happen  through  avarice, 
negligence  or  any  other  misconduct,  the  provisions  of 
this  salutary  constitution  for  the  prohibition  of  mono- 
polies and  agreements  among  the  different  bodies  of 
merchants  shall  not  be  carried  into  effect." 

In    India,   as   early   as   the   days   of  Manu  and  Monopolies  of 
Yajnavalkya,  the  question  as  to  the  propriety  of  tr a- ^ders  in  ancient 
ders  combining  for  the  purpose  of  putting  up  prices 
received  marked  attention.     In  Yajnavalkya,  for  in- 
stance, we  find  the  following: — " For  traders  combin- 
ing to  maintain  a  price  to  the  prejudice  of  labour  and  Manu  and 
artisans,  although  knowing  the  rise  or  fall  of  prices,  YaJnavaikya. 
the  fine  shall  be  the  highest  amercement."  l     On  this 
the  Mitakshara   aptly  comments,  "Although   know- The  Mitakshara. 
ing   the   increase  or  decrease  in  the  market  rates  as 
regulated  by  the  king,  if  traders  combine,   i.e.,  join 
together  and  out  of  greed  for  profit  maintain  another 
price,  which  is  detrimental  to  the  labourers  such  as 

1  Yajnavalkya  Book  II,  verse  252. 


n 


to 


56 

the  washerman  and  others,  or  the  artisans  such  as 
painters  and  sculptors,  they  shall  be  fined  1000 
panas."  In  the  next  verse  Yajnavalkya  continues, 
"  For  traders  combining  to  obstruct  the  sale  of  a  com- 
modity by  demanding  a  wrong  price,  or  for  selling  it, 
the  fine  laid  down  is  the  highest  amercement."  The 
comment  of  Mitakshara  on  this  is,  "Moreover,  those 
traders  who,  combining  together,  obstruct  the  sale  of 
a  commodity  arrived  from  a  foreign  country,  by 
demanding  it  at  a  wrong  price,  i.e.,  at  a  lower  value, 
or  sell  it  at  a  higher  price,  the  highest  amercement  or 
fine  for  these  has  been  laid  down  by  Manu  and  others.  " 
But  the  next  verse  conveys  a  most  interesting  piece 
of  information  which  throws  a  light  even  on  present- 
day  problems  as  to  regulation  of  prices.  Says 
Yajnavalkya,  "The  sale  or  purchase  should  be  con- 
ducted  at  tne  Price  which  is  fixed  by  the  king  ;  the 
regulate  prices.  surplus  made  therefrom  is  understood  to  be  the  legal 
profit  of  traders."  In  Manu  too  there  is  a  similar 
rule  laid  down  with  regard  to  the  fixing  of  prices  of 
commodities  by  the  king."  "Once  in  every  five 
nights,"  says  he,  "or  at  the  close  of  each  fortnight, 
the  king  shall  settle  the  prices  in  the  presence  of  these, 
the  traders."  l 

The  above  extracts  from  the  Institutes  of  Manu 
and  from  Yajnavalkya,  with  the  comment  of  Mitak- 
shara thereon,  clearly  indicate  that  the  Hindu  law  con- 
demned any  attempt  on  the  part  of  traders  to  monopo- 
lise, i.e.,  to  control  the  market  for  any  given  product 
and,  consequently,  to  enhance  its  prices  by  combina- 
tion amongst  themselves.  They  are  also  of  interest 
to  the  students  of  historical  jurisprudence  inasmuch 
as  they  show  that  in  ancient  times  the  Hindu  kings 
had  the  power  to  regulate  the  prices  of  commodities, 
and  that  there  was  no  constitutional  limitation  on 
such  power.3 

§  2.    MONOPOLIES  OF  FOOD-STUFFS. 

Monopolies  of  Turning  to  the  Middle  Ages  we  find  that  the  prac- 

the     tice  of  buying  up  food-stuffs  and  other  necessaries  of 

1  Institutes  of  Manu,  Chap.  VIII,  verse  402. 

2  Cf    the  American  view  regarding  the  right  of  Government  to  regulate 
prices.     Vide  Tiedeman's  '  State  and  Federal  Control  of  Person  and  Property,' 
p.  302. 


57 

life  at  wholesale  prices  with  a  view  to  resell  them  at 
higher  prices  was  quite  a  common  one  in  England. 
The  merchants  or  middlemen  who  adopted  such  busi- 
ness methods  did  not  escape  the  kind  attention  of 
legislators.  The  practice  of  "  Forestalling"  or  buying  Forestalling 
direct  from  the  producers  for  future  sale  by  the  mer-  —explained, 
chant  or  middleman,  was  looked  upon  as  most  iniqui- 
tous, inasmuch  as  it  tended  to  deprive  the  consumer 
of  his  right  of  purchasing  at  the  market  direct  from 
the  producer.  Hence  it  was  put  down  as  an  offence 
against  public  trade.  "This  which  *  *  *  *  is 
also  an  offence  at  common  law  was  described  by  sta- 
tute to  be  the  buying  or  contracting  for  any  merchan- 
dise or  victual  coming  in  the  way  to  the  market ;  or 
dissuading  persons  from  bringing  their  food  or  provi- 
sions there ;  or  persuading  them  to  enhance  the  price 
when  there ;  any  of  which  practices  make  the  market 
dear  to  the  fair  trader."  l 

The  offences  of  forestalling,  engrossing  and  regrat-  Forestalling, 
ing  were  kindred  offences  and  were  always  dealt  with  ^g^tinn— and 
as  such.     Thus  Stephen  in  his  f  History  of  the  Criminal  regarded  as 
L,aw  of  England '  'z  observes,  "  Forestalling,  ingrossing  °ffences- 
and   regrating   was   the  offence  of  buying  up  large 
quantities  of  any  article  of  commerce  for  the  purpose 
of  raising  the  price.     The  forestaller  intercepted  goods 
on  their  way  to  market  and  bought  them  up,  so  as  to 
be  able  to  command  what  price  he  chose  when  he  got 
to  the  market.     The  ingrosser  or  regrater — for  the  two 
words  had  much  the  same  meaning — was  a  person  who 
having  bought  goods  wholesale  sold  them  again  whole- 
sale.    This  was  regarded  as  a  crime."      It  is  doubtful 
if  any  very  great  discrimination  was  shown  so  far  as 
the  thirteenth  or  fourteenth  centuries  were  concerned 
in  the  use  of  the  three  terms.     But  for  purposes  of  Exact  meaning 
greater  accuracy  it  is  best  to  know  their  exact  signifi-  of  each* 
cations.     In  Act  5  &  6  Edw.  VI    (1551-1552)  a  Fore- 
staller is  defined  as  <(  a  person  having  goods  or  victuals 
on  their  way  to  a  market  or  port  or  contracting  to  buy  the 
same  before  they  are  actually  brought  for  sale,3  or 
endeavouring  by  these  and  other  means  to  enhance 

1  Blackstone's  Commentaries  160;  Dane's  Abridg.  Ch.  205,  Art  2. 

2  C.  30,  p.  199 

*  An  indictment  for  forestalling  must  charge  expressly  that  the  goods 
brought  were  "  coming  to  the  market  to  be  sold."     I  Rol.  Rep.  421. 


Legislation  in 
the  fifteenth 
and  sixteenth 
centuries. 


Popular  feeling 
against  combina- 
tions making  for 
monopoly. 


the  price  or  prevent  the  supply."  A  Regrator  is  de- 
fined as  a  person  buying  corn  or  other  victuals  and 
reselling  the  same  in  the  same  market-place  or  in  any 
other  fair  or  market  within  four  miles.  An  Ingrosser 
is  defined  as  any  one  buying  corn  growing,  or  any 
other  dead  victual,  with  intent  to  resell  the  same  again. 
Regrating  must,  therefore,  be  taken  as  the  complete 
act  embracing  both  forestalling  and  ingrossing,  which 
were  particular  stages  in  the  act.  All  these,  however, 
point  to  practically  the  same  practice  which  is  con- 
demned and  declared  to  be  criminal  as  tending  to 
monopoly  and  is  sought  to  be  combated  in  various 
ways,  specially  because  it  resulted  in  unrighteous 
enhancement  of  prices. 

During  the  fifteenth  and  sixteenth  centuries 
stringent  laws  were  passed  against  the  engrossing  of 
various  articles  of  consumption,  all  of  which  would 
come  more  or  less  in  the  category  of  necessaries. 
Thus  in  the  reign  of  Edward  VI  engrossing  was  pro- 
hibited in  respect  of  "corn,  wine,  fish,  butter,  cheese, 
candles,  tallow,  sheep,  lambs,  calves,  swine,  pigs, 
geese,  capons,  hens,  pigeons  and  conies."  Then,  again, 
the  so-called  Assizes  were  expressly  intended  for  con- 
trolling the  price  of  necessary  articles  of  consumption. 
The  Assize  of  Bread  passed  in  the  reign  of  Henry  II 
provided  that  the  weight  of  a  farthing  loaf  of  bread 
was  to  vary  with  the  price  of  wheat,  i.e.,  when  the 
price  of  wheat  was  low  the  farthing  loaf  was  to  be 
large,  and  smaller  when  the  price  of  wheat  was  high. 
This  provision  was  intended  to  limit  the  baker  to  a  fair 
profit  and  thus  confer  a  benefit  upon  the  consumer 
by  protecting  him  from  unreasonable  rises  of  price. 
The  Assizes  of  Ale  and  Wine  served  a  similar  purpose 
and  sought  to  maintain  prices  on  a  fair  and  reasonable 
level.  The  Assize  of  Cloth  was  passed  for  controlling 
the  length,  breadth  and  quality  of  cloth.  The  people 
in  general  highly  appreciated  these  measures  and 
resented  any  infringement  of  the  provisions  of  the 
Assizes.  There  can  be  no  doubt  that  in  the  Middle 
Ages  there  was  a  strong  popular  feeling  in  England 
against  all  agreements  or  organizations  which  made 
for  monopoly  or  had  for  its  object  the  keeping  up  of 
prices.  Indeed,  the  feeling  ran  so  high  that  in  1299 
or  1300  several  chandlers  of  Norwich  were  fined  for 


59 

having  madea  covenant  amongst  themselves  that  none 
should  sell  a  pound  of  candles  cheaper  than  another. 
A  monopoly  in  any  shape  or  form  was  regarded  as 
contrary  to  the  spirit  and  policy  of  the  common  law 
The  ninth  statute  of  Edward  III  was  only  declara- 
tory of  the  common  law.  In  the  fifth  and  sixth 
years  of  Edward  VI  we  find  an  act  against  f orestallers, 
ingrossers  and  regrators  l,  which  was  also  declaratory 
of  the  common  law.  Commenting  on  this  statute  Adam  Smith's 
Adam  Smith  in  his  '  Wealth  of  Nations '  says,  ( '  Our  ^"^  °°  5  and 
ancestors  seem  to  have  imagined  that  the  people  would 
buy  their  corn  cheaper  of  the  farmer  than  of  the  corn- 
merchant  who,  they  were  afraid,  would  require  over 
and  above  the  price  which  he  had  paid  to  the  former 
an  exhorbitant  profit  to  himself.  They  endeavoured, 
therefore,  to  annihilate  his  trade  altogether.  They 
even  endeavoured  to  hinder  as  much  as  possible  any 
middleman  of  any  kind  from  coming  in  between  the 
grower  and  the  consumer.  The  statute  of  Edward 
VI,  therefore,  by  prohibiting  as  much  as  possible  any 
middlemen  from  coming  in  between  the  grower  and 
the  consumer,  endeavoured  to  annihilate  a  trade,  of 
which  the  free  exercise  is  not  only  the  best  palliative 
of  the  inconveniences  of  a  dearth,  but  the  best  preven- 
titive  of  the  calamity ;  after  the  trade  of  farmer,  no 
trade  contributing  so  much  to  the  growing  of  corn  as 
that  of  the  corn  merchant.'2 

From  the  above  passage  it  is  quite  clear  that  the 
good  citizens  of  those  times  did  not  perceive,  as  Adam 
Smith  did  later  on,  that  the  merchant  while  relieving 
the  farmer  of  his  products,  did  a  service  to  the  farmer 
and  to  the  citzen  as  well,  and  that  the  merchant's  pro- 
fits were  in  general  little  more  than  the  equivalent  of 
wages  for  the  service  he  rendered.  It  was  the  excesses 
of  certain  merchants  which  provoked  the  wrath  of 
the  citizens.  Some  merchants  no  doubt  made  ex- 
cessive profits  by  raising  of  prices.  Their  unworthy 
conduct  led  to  the  sweeping  generalization  that  all 
merchants  were  monopolists  and  given  to  oppressive 
methods  calculated  to  keep  up  prices  at  a  prohibitive 
level.  The  Acts  of  Parliament  such  as  those  passed 


1  5  and  6  Edward  VI,  C.  14. 

2  <  The  Wealth  of  Nations,'  Book  IV,  Ch.  5. 


6o 

in  the  reign  of  Edward  VI  were  intended  to  counteract 
the  tactics  of  such  merchants.  The  attempt  was  no 
doubt  disinterested  and  well-meant,  but  it  went  against 
the  natural  course  of  trade  and  the  laws  of  economics. 
It  had,  therefore,  to  be  repealed  in  the  reign  of  George 
12  George  in.  c.  HI.1  By  this  Act  Parliament  sought  to  repeal  all  exist- 
eistmg* statutes  ing  statutes  relating  to  the  offences  of  regrating,  fore- 
on  the  subject  of  stalling  and  ingrossing.  The  preamble  of  the  Act  re- 
cites, "  Whereas  it  has  been  found  by  experience  that 
the  restraints  laid  by  several  statutes  upon  dealing  in 
corn,  meal,  flour,  cattle  and  sundry  other  sorts  of  vic- 
tuals, by  preventing  a  free  trade  in  the  said  commodi- 
ties, have  a  tendency  to  discourage  the  growth,  and  to 
enhance  the  price  of  the  same ;  which  statutes,  if  put 
in  execution,  would  bring  great  distress  upon  the  inhab- 
itants of  many  parts  of  this  kingdom,  and  in  particu- 
lar upon  those  of  the  cities  of  London  and  Westmins- 
ter, etc.,  etc."  Notwithstanding,*  however,  that  the 
object  and  intent  of  the  Act  was  to  abrogate  the  com- 
mon law  offence  by  the  repeal  of  the  statute  of 
Edward  VI  against  monopolies,  the  courts,  under  the 
lead  of  Lord  Kenyon,  continued  to  hold  that  regrat- 
ing, forestalling  and  engrossing  were  offences  at  com- 
mon law.2  The  courts  practically  disregarded  the 
repealing  Act  of  George  III  inasmuch  as  they  held 
that,  despite  that  statute,  regrating,  forestalling  and 
engrossing  continued  to  be  offences  at  common  law. 
Hence  Parliament,  on  the  4th  of  July,  1844,  passed  a 
general  repealing  Act,  the  preamble  of  which  definitely 
declared  the  public  policy  of  England.  This  Act  abol- 
ished in  whole  or  in  part  eighteen  restrictive  English 
statutes,  some  ten  Scotch  statutes  and  eight  Irish.  It 
provided  that  it  should  not  apply  to  the  offence  of 
fraudulently  spreading  or  conspiring  to  spread  false 
rumours  with  intent  to  affect  the  prices  of  goods  or 
merchandise,  nor  to  the  offence  of  wrongfully  prevent- 
ing, by  force  or  threats,  goods  or  merchandise  being 
brought  to  market.  The  effect  of  the  Act  of  1844  was 
that  regrating,  forestalling  and  engrossing,  if  accom- 
panied by  fraud,  remained  offences  under  the  law.  It 
has  to  be  noted  in  this  connection  that  in  an  appeal 

1  12  George  III,  C.  71. 

2  The  King  v.  Waddington  (1800).     i  East,  143. 


6i 

from  India  decided  by  the  Judicial  Committee  of  the 
Privy  Council  in  1850  their  Lordships  pointed  out  that 
the  common  law  offence  of  engrossing  or  regrating 
applied  only  with  respect  to  the  necessaries  of  life, 
and  that  the  principles  underlying  these  offences  ought 
not  to  be  extended  for  they  "would  not  meet  with 
countenance  in  these  times  when  the  true  principles 
of  trade  and  commerce  are  better  and  more  generally 
understood."1  "There  is  no  law/'  said  their  Lord- 
ships, "  which  prevents  any  person  buying  any  quantity 
of  a  commodity  at  any  price  that  he  likes,  whether 
to  use  himself  or  to  sell  again  in  gross  or  by  retail 
or  to  give  away  or  to  prevent  another  having  it,  pro- 
vided always  that  he  does  not  commit  the  common 
law  offence  of  forestalling  and  regrating,  which  this  is 
not,  or  irigrossing,  which  the  authorities  show  can 
only  be  committed  with  respect  to  the  necessaries  of 
life ;  provided,  also,  he  makes  no  false  representation 
in  order  to  effect  the  purchase." 

A  parallel  attempt  was  made  by  means  of  legis-  legislation  for 
lation  to  regulate  the  wages  of  labourers.  This  was 
found  to  be  absolutely  necessary  especially  after  the 
Black  Death  of  1348,  which  decimated  the  population 
of  England  and  thus  caused  a  considerable  scarcity 
of  labourers.  In  the  years  1349  and  1351  were  passed 
the  Ordinance  and  Statute  of  Labourers,  which  pro- 
vided that  labourers,  carpenters,  masons,  plasterers 
shoe-makers  and  other  craftsmen  having  no  other 
means  of  livelihood  were  not  to  refuse  to  work  for  any 
one  offering  to  pay  wages  at  the  rate  that  prevailed 
before  the  plague.  The  measure,  however,  went  against 
the  natural  course  of  trade  and  labour.  The  employers 
were  many  but  the  labourers  were  few.  Naturally, 
the  latter  would  not  accept  low  wages  when  there  was 
such  a  considerable  demand  for  their  services.  Thus 
this  piece  of  legislation  hardly  produced  any  good  or 
abiding  result ;  all  that  it  did  was  to  cause  much  hard- 
ship and  suffering  to  those  who  acted  in  contraven- 
tion of  its  provisions. 

1  Doolub  Dass  v.  Ramlall  Thackersey  Dass,  5  M.I. A.,  109. 

2  Ibid.,  page  152. 


62 


§  3-     HISTORY  OF  GII/DS. 

Another  prominent  instance  of  monopolies  of  the 

olden  type  is  to  be  found  in  the  ancient  gilds.     The 

The  ancient  gilds—  history  of  the  gilds  and  the  regulations  that  governed 

general  features.        ,  -  J 1         <       •     j  •  ,  1  ,  i      •        1   • 

them  clearly  indicate  that  their  object  was  to  create 
monopoly.  How  far  they  succeeded  in  their  object 
has  to  be  considered.  It  appears  at  any  rate  that 
they  succeeded  in  exercising  a  control  over  the  prices 
of  commodities  and  also  over  the  quality  of  wares 
and  the  wages  of  servants.  They  succeeded  also  in 
restricting  the  number  of  persons  who  could  enter  a 
particular  trade,  thereby  checking  competition  and 
preparing  the  way  for  monopoly  profits.  But  while 
they  looked  after  the  interest  of  the  producer  in  the 
main,  they  also  conferred  benefit  on  the  consumer  by 
securing  to  him  a  good  article,  and  this  they  did  by 
means  of  various  stringent  regulations  touching  the 
production  of  articles  of  consumption. 

The  merchant  gild  The  merchant  gild,  or  house,  was  "  a  Society 
and  f°rmed  primarily  for  the  purpose  of  obtaining  and 
maintaining  the  privilege  of  carrying  on  trade,  a  privi- 
lege which  implied  the  possession  of  a  monopoly  of 
trade  in  each  town  by  the  gild  brethren  as  against 
its  other  inhabitants  and  also  liberty  to  trade  in  other 
towns.  The  exact  character  of  the  monopoly  pro- 
bably varied  somewhat  from  place  to  place."  The 
gild  merchant  also  exercised  jurisdiction  over  its  mem- 
bers, drew  up  and  enforced  regulations  for  trade  and 
punished  breaches  of  commercial  morality.  It  is  said 
that  the  first  positive  mention  of  a  merchant  gild  is 
certainly  not  earlier  than  1093.*  Before  the  conquest 
there  had  existed  religious  gilds  and  frith  gilds,  i.e. 
clubs  or  societies  for  the  performance  of  certain  pious 
offices  and  for  mutual  assistance  in  the  preservation 
of  peace.  From  the  reign  of  Henry  I  onwards  we  find 
a  long  series  of  charters  granted  to  towns  by  the  king 
or  other  lords ;  and  in  all  these  charters  the  recogni- 


1  Ashley's  '  Economic  History, '  Volume  I,  Chap.  II.     See  also  Pollock 
and  Maitland's  *  History  of  English  Law,'  Vol.  I,  p.  664. 

2  Ashley's  'Economic  History,'  Volume  I,  Chap.  II,' p.  71.     "The  gild 
merchant  came  into  existence  in  England  soon  after  the  Norman  conquest, 
as  a  result  of  the  increasing  importance  of  trade." — Palgrave's  '  Dictionary 
of  Political  Economy,'  Vol.  II,  p.  210. 


63 

tion  of  a  merchant  gild  occupies  a  prominent  place.1 
The  conclusion  arrived  at  from  this  is  that  the  mer- 
chant gilds  had  been  in  existence  before  they  were  so 
recognised  and  the  charters  in  question  only  gave  sanc- 
tion to  the  controlling  power  which  the  societies  already 
enjoyed  and  the  rights  which  they  sought  to  secure 
for  their  members.* 

The  members  of  the  merchant  gild  were  not 
necessarily  great  merchants.  Agriculture  was  still  one 
of  the  main  occupations  in  most  of  the  towns,  and  a 
considerable  portion  of  the  trade  consisted  in  the  sale 
and  purchase  of  the  raw  products  of  agriculture  such 
as  skin,  wool,  corn,  etc. 

The  charters  to  towns  granting  permission  to 
have  a  merchant  gild  usually  contained  a  clause  to 
the  effect  that  none  but  members  of  that  society  were 
to  engage  in  trade.  In  one  case  it  is  expressly  stated 
that  the  members  are  to  have  the  monopoly  even  in 
the  retail  sale  of  cloth.  A  remnant  of  the  old  mer- 
chant gilds — in  fact  the  only  merchant  gild  still  sur- 
viving in  England — is  that  of  Preston,  its  charter  having 
been  granted  by  Henry  II  towards  the  end  of  the 
twelfth  century.  Among  the  "Liberties  of  Preston" 
may  be  mentioned  the  following — "  That  they  shall 
have  gild  mercatory  with  Hanse  and  other  customs 
and  liberties  belonging  to  such  gild,  so  that  no  one 
who  is  not  of  that  gild  shall  make  any  merchandise 
in  the  said  town  unless  with  the  will  of  the  burgesses." 

One  of  the  chief  objects  of  the  gild  was  the  main- 
tenance of  the  society's  privileges.  Thus  one  often 
comes  across  ordinances  against  acting  as  agents  for 
the  sale  of  goods  belonging  to  non-members,  or  aiding 
or  assisting  an  outsider  merchant  to  purchase  to  the 
detriment  of  members  of  the  gild.  A  no  less  impor- 
tant feature  of  the  gild's  jurisdiction  was  the  drawing 
up  and  the  enforcing  of  wholesome  regulations  affect- 
ing matters  of  trade.  These  regulations  indicate  a 


1  Ashley's  '  Economic  History,'  Vol.  I,  Chap.  II. 

2  "  Its  chief  function  was  to  regulate  the  trade  monopoly  conveyed  to 
the  borough  by  the  royal  grant  of  gilda  mercatoria.     The  gildsman  had  the 
right  to  trade  freely  in  the  town,  and  to  impose  payments  and  restrictions 
upon  others  who  desired  to  exercise  that  privilege.     The  ordinances  of  the 
fraternity  thus  aim  to  protect  the  brethren  from  the  commercial  competi- 
tion of  strangers  or  non-gildstnen." — Palgrave's  '  Dictionary  of  Political  Eco- 
nomy,' Vol.  II,  p.  210. 


64 

strong  feeling  underlying  them  all  that  the  well-being 
of  the  trade  or  industry  was  the  supreme  object  to  be 
kept  in  view,  that  each  was  bound  to  submit  to  regula- 
tions for  the  common  good,  and  to  be  of  assistance  to 
his  fellow  members.  Thus  maintenance  of  fair  dealing 
and  of  a  high  standard  of  quality  in  the  goods  sold 
formed  one  of  the  main  objects  of  the  regulations. 
The  craft  gild—  The  rise  of  craft  gilds  is  of  later  date.1  The  craft 

its  character  and  gilds  might  be  regarded  as  mutual  benefit  societies  or 
associations  of  artisans  engaged  in  a  particular  industry 
in  a  particular  town,  formed  with  the  object  of  securing 
and  maintaining  their  common  well-being.  Here  is  a 
vivid  description  of  the  character  of  a  craft  gild  and 
of  its  members,  and  it  is  specially  interesting  because, 
incidentally,  it  describes  the  system  of  apprenticeship 
prevalent  in  those  times,  in  respect  of  all  branches  of 
trade.  "As  a  rule  no  man  could  become  a  shoemaker 
unless  he  entered  the  gild  through  the  doorway  of 
apprenticeship.  When  he  had  completed  seven  years, 
more  or  less,  of  bondage  under  a  master  shoemaker, 
the  apprentice  became  a  journeyman  and  was  per- 
mitted to  work  for  other  masters.  When  he  found 
himself  able  to  acquire  a  shop  of  his  own  and  to  estab- 
lish himself  in  business  he  became  a  master  shoemaker 
and  a  full  member  of  the  gild.  He  paid  his  fees  at 
stated  times  and  incurred  fines  when  he  transgressed 
the  rules.  He  made  boots  and  shoes  according  to  the 
standards  set  by  the  officers  of  the  gild.  He  sold 
them  at  prices  fixed  by  the  same  authorities.  He 
employed  as  many  journeymen  and  apprentices  as  the 
gild  allowed.  He  paid  his  men  according  to  the 
appointed  scale  of  wages.  He  attended  the  meetings 
of  the  gild  and  enjoyed  the  society  and  conviviality 
of  his  brethren.  At  the  annual  meeting  he  voted  for 
the  election  of  gild  officers,  whether  the}^  were  called 
wardens,  aldermen,  searchers,  overseers,  bailiffs  or 
masters.  On  the  first  day  of  the  gild's  patron  saint 

J  It  was  in  the  second  half  of  the  eleventh  century  that  merchant  gilds 
began  to  come  into  existence  ;  during  the  twelfth  century  they  arose  in  all 
considerable  English  towns.  The  rise  of  craft  gilds  is,  roughly  speaking,  a 
century  later ;  isolated  examples  occur  early  in  the  twelfth  century, — they 
become  more  numerous  as  the  century  advances,  and  in  the  thirteenth  cen- 
tury they  appear  in  all  branches  of  manufacture  and  in  every  industrial 
centre — Ashley's  *  Economy  History,'  Volume  I,  Chapter  II,  p.  76.  For  an 
early  history  of  the  gilds  see  also  Palgrave's  *  Dictionary  of  Political  Econo- 
my,' Vol.  II,  p.  208. 


65 

he  went  in  procession  to  the  church.  In  time  of  war 
he  marched  in  the  train-bands  beside  the  brethren  of 
his  craft.  In  poverty  he  received  aid  from  the  com- 
mon fund.  In  sickness  his  brethren  visited  him. 
Dying  in  poverty  he  was  buried  with  shoemakers'  rites 
at  the  expense  of  the  gild,  while  the  same  benevolent 
association  had  masses  said  for  the  repose  of  his  soul, 
and  provided  for  the  support  of  his  widow  and  orphan 
children.  His  children  after  him  were  shoemakers  unto 
the  third  and  fourth  generation."  L 

Up  to  the  reign  of  Edward  I  the  craft  gilds  grew  HOW  craft  gilds 
up  spontaneously,  their  object  being  to  secure  mutual 
help  and  advantage  to  the  craftsmen.  For  their  recog- 
nition they  were  obliged  to  make  annual  payments  to 
the  king  or  other  lords,  as  the  case  might  be.  Yet 
their  position  was  not  secure  and  they  found  it  hard 
to  maintain  their  rights  against  the  municipal  authori- 
ties. It  was  Edward  I  who  first  perceived  the  latent 
power  of  these  bodies.  He  resolved  to  utilise  them  as 
an  effective  counterpoise  to  the  power  of  the  govern- 
ing bodies  in  the  towns.  He  accordingly  initiated  a 
new  policy  whereby  the  gild  system  was  not  only  to 
be  tolerated  as  before,  but  encouraged  and  extended. 
This  was  done  in  various  ways  such  as  by  securing 
due  supervision  of  the  crafts,  and  by  providing  for 
due  punishment  of  those  who  offended  against  their 
regulations  through  the  machinery  of  the  crafts  them- 
selves. The  regulations  had  for  their  object  the  pre- 
vention of  fraud  and  the  maintenance  of  certain  stan- 
dards of  size  and  quality  in  the  wares  produced.2 

1   Le  Rosignol's  '  Monopolies  Past  and  Present,'  pp.  45-46. 

'2  The  regulations  in  fact  covered  many  details  of  conduct  on  the  part 
of  the  workmen,  as  will  appear  from  the  following  : — 

''Penalties  were'  provided,  as  far  as  possible,  for  every  sort  of  deceitful 
device  :  such  as  putting  better  wares  at  the  top  of  a  bale  than  below,  moisten- 
ing groceries  so  as  to  make  them  heavier,  selling  second-hand  furs  for  new, 
soldering  together  broken  swords,  selling  sheep  leather  for  doe  leather,  and 
many  other  like  tricks.  It  was  for  the  same  reason  that  night  work  was  for- 
bidden ;  not,  as  Brentano  says,  with  the  philanthropic  object  of  providing 
work  for  all,  but  because  work  could  not  be  done  so  neatly  at  night,  and 
because  craftsmen,  knowing  they  were  not  likely  to  be  visited  at  that  time 
by  the  wardens,  took  the  opportunity  to  make  wares  "  falsely  "  or  because 
working  at  night  disturbed  the  neighbours.  It  seems,  however,  to  have  been 
a  general  rule  that  men  should  not  work  after  six  o'clock  on  Saturday 
evening,  or  on  the  eves  of  Double  Feasts."— Ashley's  'Economic  History/ 
Vol.  I,  Chapter  II,  pp.  90-91.  Besides  making  rules  such  as  those  above 
mentioned  the  gilds  had  also  very  wholesome  rules  tending  to  promote 
mutual  assistance  in  difficulties  and  co-operation  for  meetings,  festivities  and 
common  worship. 


66 

Articles  produced  in  contravention  of  these  regula- 
tions or  failing  to  come  up  to  the  exact  requirements 
laid  down  therein  were  called  "  false  "  just  in  the  same 
way  as  we  would  call  counterfeit  coin  "  false  "  money. 
The  workmen  responsible  for  such  production  were  pun- 
ished by  fines,  one  half  of  the  fines  going  to  the  craft 
and  the  other  half  to  the  town  funds.  If  the  offence 
was  repeated,  on  the  third  or  fourth  occasion  the  dras- 
tic punishment  of  expulsion  from  the  trade  was  meted 
out  to  the  offender.  The  craft  gilds  gradually  grew  in 
number  till,  at  the  end  of  the  reign  of  Edward  III, 
there  were  in  London  as  many  as  forty-eight  compa- 
nies or  crafts,  each  self-contained  and  with  separate 
officers  of  its  own;  and  soon  afterwards  their  number 
rose  to  sixty.  The  craft  gilds  were  known  by  various 
names.  Thus  we  read  of  the  Company  of  Weavers, 
the  Gild  of  Tailors,  the  Craft  of  Glovers,  the  Fraternity 
of  Carpenters,  the  Mysterie  of  Barbruers,  the  Fellow- 
shippe  of  Cordwainers  and  Shoemakers,  the  Society  of 
Shipwrights,  the  Brotherhood  of  Barber-Surgeons  and 
the  like  ;  and  the  regulations  which  governed  them 
respectively  were  as  various  as  their  names.1 

importance  of  the  it  cannot  be  doubted  that  the  gilds  were  a  most 

MiddiTlges.  important  factor  in  the  development  of  economic  life  in 
the  Middle  Ages.  This  was  so  particularly  in  England 
where  the  kings  gave  them  protection  in  various  ways 
and  secured  them  against  feudal  encroachments.  We 
have  observed  above  how  the  important  towns  ob- 
tained charters  of  liberties  from  the  kings.  In  a  simi- 
lar manner  the  gilds  gradually  obtained  powers  of  muni- 
cipal government  from  the  kings.  It  was  the  mer- 
chant gilds  that  first  obtained  control  of  the  town 
government.  The  craft  gilds  followed.2  As,  however, 
time  went  on,  the  gilds  found  it  more  and  more  diffi- 
cult to  maintain  their  privileges  or  to  carry  their  ordi- 
nances into  effect.  The  monopoly  of  the  gilds  to  civic 
power  became  objectionable.  Their  rules  and  ordi- 
nances gradually  became  odious  and  unenforceable. 

1  See  Le  Rosignol's  •  Monopolies  Past  and  Present,'  p.  46. 

*  The  origin  of  the  latter  is  not  to  be  attributed  to  the  former.  "  There 
was  seemingly  no  organic  connection  between  the  two  classes  of  gilds,  though 
many  artisans  probably  belonged  both  to  their  own  craft  fraternity  and  to 
the  gild  merchant,  and  the  latter  owing  to  great  power  in  the  town,  seems 
to  have  exercised  some  sort  of  supervision  over  the  craftsmen  and  their 
societies  " — Palgrave's  'Dictionary  of  Political  Economy,'  Vol.  II,  p.  211. 


67 

Their  exclusiveness,  in  particular,  made  them  intoler- 
able. Outsiders  saw  no  reasonableness  or  justification 
in  their  being  shut  out.  The  weavers'  monopoly  in 
London  seems  to  have  become  a  grievance  as  early 
as  the  year  1321.  Later,  we  read  of  the  gilds  as  setting 
the  local  authorities  at  defiance  and  working  harm  to 
the  people.  An  Act  had  to  be  passed  in  redress  of 
these  grievances.  The  preamble  of  the  Act  recites 
that  "masters,  wardens  and  people  of  gilds,  fraterni- 
ties, and  other  companies  corporate3  dwelling  in  diverse 
parts  of  the  realm,  oftentimes  by  colour  of  rule  and 
governance  and  other  terms  in  general  words  to  them 
granted  and  confirmed  by  charters  and  letters  patent 
of  diverse  kings  made  amongst  themselves  many  un- 
lawful and  unreasonable  ordinances  as  well  in  prices 
of  ware  and  other  things  for  their  own  singular  pro- 
fit, and  to  the  common  hurt  and  damage  of  the  people, 
etc/'  The  Act  provided  that  the  ordinances  of  the  gild 
should  have  to  be  submitted  to  justices  of  the  peace 
and  recorded  by  them.  Ultimately,  the  economic 
importance  of  the  gilds  disappeared.  There  appeared 
a  new  and  an  all-powerful  factor  in  the  realm  of  eco- 
nomics in  the  shape  of  competition,  and  every  tradi- 
tional restraint  or  mode  of  governance,  whether  it  was 
by  gilds  or  other  long-recognised  institutions,  turned 
out  ineffective.  Free  and  open  competition  began  to 
determine  the  prices.  But  the  control  of  town  govern- 
ment yet  remained  in  the  hands  of  the  gilds.  It  was 
not  till  the  nineteenth  century  that  this  final  mono- 
poly passed  away. 

While  the  control  and  regulation  of  internal  trade  The  foreign  trade 
was  in  the  hands  of  the  merchant  gilds,  the  Foreign  ^t 
trade  was  in  the  hands  of  the  merchants  of  the  Staple,  of  the  staple. 
The  institution  of  the  staple  arose  about  the  middle 
of  the  thirteenth  century.     The  settled  policy  of  the 
Kings    of    England    in    those    days    was   to   prevent 
the   free  and  unrestricted  export  of  English  goods. 
Thus  arose  what  were  called  staple  towns,  and  it  was 
expressly  ordered    that  English  goods  such   as  wool 
and  leather  could  be  sold  to  foreign  merchants  only 
at  a  staple  town.     Thus  we  hear  of  Calais,  Bruges, 
Antwerp  as  staple  towns.     Later  on,  we  find  certain 
English  towns  designated  staple  towns,  and  foreign 
merchants  were  invited  to  come  to  England  and  buy 


68 

goods  there  for  foreign  export.  Thus  the  staple  towns 
enjoyed  a  monopoly  of  English  export  trade,  and  the 
merchants  of  the  staple  obtained  special  privileges  not 
accessible  to  other  merchants.  Gradually,  they  ac- 
quired the  right  of  nominating  the  Mayor  of  the  town, 
and  the  Mayor  and  Aldermen  of  the  Staple  had  the 
entire  control  and  regulation  of  trade  in  the  staple 
town  It  was  not  till  the  eighteenth  century  that 
the  staple  began  to  decay  and  gradually  gave  place  to 
a  new  order  of  things. 

The  Hanseatic  It  would  hardly  be  appropriate  to  close  this  part 

of  the  subject  without  a  passing  reference  to  the  Han- 
seatic League  which  grew  up  into  a  powerful  mono- 
poly at  one  time  comprising  as  many  as  eighty-five 
German  cities  and  carrying  on  a  rich  and  profitable 
trade  with  England,  Scandinavia,  Russia  and  other 
countries.  It  is  said  that  the  League  was  originally 
formed  for  the  purpose  of  providing  protection  against 
piracy.  ff  It  is  clear,"  says  Mr.  Thorold  Rogers/  "that 
the  association  was  formed  in  order  to  put  down  the 
Norse  freebooters,  whom  a  foolish  habit  of  seeing 
courage  and  spirit  in  piracy  and  brigandage  has  white- 
washed. In  this  object  they  succeeded ;  they  became 
a  power,  had  a  treasury,  and  the  fatal  gift  of  pro- 
perty which  could  be  plundered."  But  the  pirates 
were  not  the  only  danger  to  be  combated  by  means 
of  co-operation,  and  it  cannot  be  doubted  that  the 
German  Hansards  combined  together  for  purposes  of 
general  mutual  protection  and  for  the  purpose  of 
securing  monopoly  privileges  in  England  and  other 
countries.  The  Hanse  towns  and  the  League  were  the 
object  of  many  charters.  Later  on,  there  was  a  large 
immigration  of  merchants  into  the  city  of  London 
and  representatives  of  the  Hanse  towns  were  gladly 
accorded  a  settlement  in  London  under  the  name  of 
the  Aldermen  and  Merchants  of  the  Steelyard.  Thus 
German  merchants  wishing  to  trade  with  England 
were  obliged  to  join  the  Hanse.  The  League  was  in 
close  touch  with  the  merchant  gilds  which  controlled 
the  Government  of  the  various  towns.  In  the  thir- 
teenth century  the  League  became  a  most  powerful 

l  '  The  Industrial  and  Commercial  History  of  England  '  by  Mr.  Thorold 
Rogers,  p  300. 


69 

body.  In  fact  it  grew  up  into  a  great  offensive  and 
defensive  alliance.  For  purposes  of  protecting  the 
interest  of  the  League  they  sometimes  carried  on  war 
and  they  even  interfered  in  England  during  the  Wars 
of  the  Roses.  In  the  sixteenth  century  we  find  the 
League  declining,  and  then  came  the  Thirty  Years' 
War  which  finished  it. 

In  India  the  existence  in  ancient  times  of  perma-  Merchant  gilds  in 
nent  associations  of  the  type  of  merchant  gilds  is  very  Ancient  India- 
doubtful.  There  are  numerous  instances  of  corporate 
activity  amongst  merchants  mentioned  in  the  Jataka 
stories.  But  it  is  not  clear  if  those  are  examples  of 
the  activity  of  institutions  of  a  permanent  nature. 
Moreover,  there  is  hardly  any  reliable  evidence  avail- 
able from  which  the  nature  and  character  of  these 
organisations,  if  any,  could  be  gathered.  It  is  probably 
on  these  grounds  that  Mrs.  Rhys  Davids  comes  to  the 
conclusion  that  "  there  does  not  seem  to  be  much 
warrant  for  concluding  that  there  was  any  extensive 
system  of  organisation  in  the  shape  of  merchant  gilds 
in  ancient  India.  "  l  Dr.  Richard  Kick,  another  au- 
thority on  the  economic  conditions  in  ancient  India, 
denies  the  existence  of  any  close  organisation  amongst 
the  merchants  and  traders  in  Buddhist  times.2  In 
modern  times,  however,  we  find  numerous  instances  Merchant  gilds  in 
of  permanent  organisations  of  merchants,  specially modern  India- 
in  the  Bombay  and  Madras  Presidencies.  Such  institu- 
tions are  usually  called  Mahajans  and  occupy  a  slightly 
higher  status  than  the  sister  associations  of  craftsmen 
which  go  by  the  name  of  Punchayet? 

The    gilds    of    workmen   approximating    to    the  craft  gilds  in 
craft  gilds  of  mediaeval  Europe  are  found  to  be  in  a  Ancient  India- 
developed  state  in  India  from  very  ancient  times.     It  is 
possible  that  these  craft  gilds  existed  as  far  back  as  the 

1  (1901)  Article  in  the  Economic  Journal,  p.  313. 

2  Dr.    Richard   Pick's   '  Sociale  Gliederung  in  Nordostlichen  Indien  Zu 
Budha's  Zeit.'     Dr.  R.  C.  Mozumdar,  however,  on  more  or  less  the  same 
materials,  comes  to  a  different  conclusion  and  is  of  opinion  that  in  ancient 
India  there  was  some  sort  of  a  permanent  organisation  amongst  merchants 
and  traders  resembling  those  of   the  merchant  gilds  of  mediaeval  Europe. 
(See  Dr.  Mozumdar's  treatise  '  Corporate  Life  in  Ancient  India,'  p.  32,  sec. 
12).     But  in  the  absence  of  any  new  evidence  of  a  convincing  nature,  it  is 
difficult  to  agree  with  Dr.  Mozumdar's  views  in  opposition  to  the  opinions 
of  such  well-known  authorities  as  Prof.  Rhys  Davids  and  Dr.  Richard  Pick. 

8  Bombay  Gazetteer,  Vol.  IV,  p.  106,  and  Vol.  VII,  p.  161 ;  Prof.  J.  C. 
Sinha's  article  on  «  Indian  Gilds  '  in  the  Bengal  Economic  Journal,  Vol.  II, 
pp.  309-10. 


70 

Brahmanas  as  we  get  the  word  Shresthin  there  and 
according  to  Prof.  Macdonell  the  word  may  already 
have  acquired  the  sense  of  'the  headman  of  a  gild/  the 
modern  'Seth.'  There  can  be  no  doubt  that  the  craft 
gilds  were  in  full  working  order  about  the  time  of  the 
earliest  Dharma  Sutras.  Thus  we  find  in  the  Gautama 
Dharma  Sutras  that  the  additional  occupations  of  a 
Vaisya  are  <c  agriculture,  trade,  tending  cattle  and 
lending  money  at  interest."  l  This  list  may  be  taken 
to  include  at  least  all  the  important  occupations  of 
the  people  at  large  that  were  within  the  knowledge  of 
the  writer,  and  so  it  becomes  significant  when  he  says 
in  the  very  next  chapter  that  "  cultivators,  traders, 
herdsmen,  money-lenders  and  artisans  (have  authority 
to  lay  down  rules)  for  their  respective  classes" 
and  "  having  learned  the  (state  of)  affairs  from  those 
who  in  each  class  have  authority  (to  speak)  the  King 
shall  give  the  legal  decision."  2  This  would  mean  that 
practically  all  the  different  branches  of  occupations 
mentioned  above  had  some  sort  of  definite  organisa- 
tion, and  the  organisation  must  have  been  sufficiently 
advanced,  as  its  rules  were  recognised  as  valid  by  the 
law,  and  its  representatives  had  a  right  to  be  consulted 

Rhys  Davids.  by  the  King  in  any  matter.  Mrs.  Rhys  Davids  after 
having  carefully  collected  and  analysed  a  great  deal 
of  data  from  Buddhist  sources  comes  to  the  following 
conclusions3: — "In  all  probablity  there  was  scarcely 
a  single  trade  or  calling,  but  was  organised  as  a  gild 
(Seni)  with  its  own  special  rules  and  its  acknowledged 
head.  Master  mariners,  literally,  navigators  had  also 
a  recognised  chief,  so  too  had  the  profession  of  caravan 
constabulary.  *  *  *  *  The  'gilds'  are  frequent- 
ly mentioned  as  a  leading  factor  in  the  body  politic 
summoned  by  and  attending  upon  the  King,  either 
en  masse,  or  through  their  heads  or  representatives, 
who  were  apparently  permanent  court  officials  and 

The  jatakas.  even  'great  ministers.'  One  of  the  Jataka  stories 
records  the  inception  of  further  organisation  in  the  ap- 
pointment of  a  permanent  president  over  all  the  gilds 
vested  in  the  person  of  the" (  Lord  of  the  Treasury.'  * 

1  '  Sacred  Books  of  the  Bast,'  Vol.  II,  p.  237  ;  Gautama  XI,  21. 
*  Gautama  S.B.E.,  Vol.  II,  p.  237. 

3  Rhys  Davids'  article  on  'Economic  Conditions  in  Ancient  India'  in 
the  Economic  Journal  (1901),  p.  313.  4  Jataka  IV,  No.  445. 


The  leading  gilds  are  spoken  of  as  eighteen  l  in  num- 
ber, 'to  wit,  the  carpenters,  smiths,  leather  workers, 
painters  and  the  rest.'  Of  their  special  regulations 
we  have  as  yet  no  evidence  to  show.  Apprentices  are 
often  mentioned  but  not  the  rules  of  apprenticeship. 
But  that  the  gild  as  a  body  exercised  a  quasi-pater- 
nal control  over  its  members  is  evinced  by  the  ordi- 
nance of  the  Buddhist  church,  which  forbade  the  giving 
of  religious  orders  to  the  wife  of  a  member  unless  his 
gild  sanctioned  it.  This  tendency  of  the  Indian  to 
mutual  organisation — in  which  he  resembled  his  later 
kinsmen  the  western  Aryans  of  the  Middle  Ages — found 
further  expression  in  the  general  institution  still  in 
force,  of  a  headman  or  syndic  in  every  village.  And 
when  the  village  consisted  of  the  craftsmen  of  one 
localised  industry  the  functions  of  syndic  and  presi- 
dent of  the  local  gild  would  be  doubled  in  the  same 
person.  Such  a  functionary  might  attain  a  high  social 
status,  for  instance,  the  ' elder'  of  a  village  of  1000 
smiths  is  described  as  fa  favourite  of  the  king  (of 
Benares),  rich  and  of  great  substance.' '  Thus  we 
find  that  about  the  time  of  the  Dharma  Sutras  and  the  The 
Jatakas  the  gilds  had  already  a  president  or  alderman  Sutras- 
and  a  set  of  officers  who  used  to  discharge  the  execu- 
tive functions.  We  also  find  that  they  had  a  Court 
official,  the  Treasurer,  who  was  appointed  by  the  King, 
and  one  of  whose  principal  duties  was  to  act  as  a 
judge  in  all  disputes  between  the  different  gilds.  We 
also  come  across  apprentices  but  not  yet  with  the  rules 
of  apprenticeship.  In  Kautilya,  who  is  now  recognised 
to  be  an  authority  more  or  less  contemporaneous  with 
the  Dharma  Sutras,  and  in  Narada  and  Brihaspati 
who  are  authorities  of  a  somewhat  later  date  (about 
400-500  A.D.),  we  come  across  more  detailed  informa- 
tion about  the  organisation  and  importance  of  the 
gilds. 

In  Kautilya's  Arthashastra   (about  300  B.C.)  we  Kautilya 
find  that  the  leaders  of  the  gilds  had  already  obtained 
such  wide  powers  that  by  their  misuse  they  were  in- 
juring the  life  and  property  of  others.3    The  gilds  were 

1  This  number  must  be  taken  as  a  conventional  one.  Dr.  Mozumdar  in 
his  '  Corporate  Life  in  Ancient  India,'  p.  4,  gives  a  list  of  about  twenty- eight 
such  gilds.  2  Jataka  III,  No.  387. 

3  Kautilya's  '  Arthasastra,'  edited  by  R.  Shamasastri,  p.  403  (referred  to 
in  Mozumdar's  '  Corporate  Life  in  Ancient  India,'  p.  7). 


72 

considered  to  be  such  important  institutions  that  the 
Superintendent  of  Accounts  had  to  enter  their  '  cus- 
toms, professions  and  transactions '  in  a  prescribed 
register  l  and  three  ministers  enjoying  the  confidence 
of  the  gilds  were  appointed  to  protect  artisans  and 
officers  and  to  receive  their  deposits  which  could  be 
taken  back  in  times  of  distress.2  Special  concessions 
were  made  with  regard  to  law  suits  between  gilds,  and 
special  privileges  were  accorded  to  a  merchant  belong- 
ing to  a  trade  gild.8  Even  places  were  reserved  in  the 
fort  for  the  residence  of  the  gilds  and  the  corporations 
of  workmen  4  and  the  taxes  paid  by  the  gilds  are  in- 
cluded in  the  most  important  sources  of  revenue.6 
Kaufilya  also  mentions  a  few  of  the  privileges  which 
these  gilds  of  workmen  enjoy  and  gives  us  some  of 
the  rules  under  which  they  work.6  Thus  the  gilds  get 
a  grace  of  seven  nights  over  and  above  the  period 
agreed  upon  for  fulfilling  their  engagements,  and  the 
gilds  of  workmen  divide  their  earnings  either  equally 
or  as  agreed  upon  among  themselves.  "A  healthy 
person  who  deserts  his  company  after  work  has  been 
begun  shall  be  fined  12  panas,  for  none  shall  of  his 
own  accord  leave  his  company.  Any  person  who  is 
found  to  have  neglected  his  work  shall  be  shown  mercy 
for  the  first  time  and  given  a  proportional  quantity  of 
work  anew  with  promise  of  proportional  earnings  as 
well.  In  case  of  negligence  for  a  second  time,  or  of 
going  elsewhere,  he  shall  be  thrown  out  of  the  company. 
If  he  is  guilty  of  a  glaring  offence  he  shall  be  treated 
Narada.  as  the  condemned."  1  Narada  (about  500  A.D.)  clearly 

lays  down  that  the  King  must  maintain  the  usages 
of  the  gild  and  other  corporations.  "  Whatever  be 
their  laws,  their  religious  duties,  the  rules  regarding 
their  attendance  and  the  particular  mode  of  livelihood 
prescribed  for  them,  that  the  King  must  approve  of." 
We  are  also  told  that  those  who  sow  dissension  among 
the  members  of  an  association  should  be  severely 
punished  as  they  would  prove  dangerous  as  an  epi- 
demic if  they  are  allowed  to  go  free.9  Narada  also  gives 


l  Kautilya,p.  69,  1.  33.  2  Ibid.,  p.  253. 

s  Ibid.,  p.  228, 1.  28.  *  Ibid.,  p.  61, 1.  31. 

5  Ibid.,  p.  66,  1.  4.  6  Kautilya,  p.  235,  1.  16. 

7  Ibid.,  p.  236,  1.  6 

»  S.B  E.  Vol.  XXXIII ;  Narada  X,  3,  p.  154. 

y  Ibid.,  Narada  X,  6,  p.  155. 


I 


73 


us  the  rules  of  apprenticeship.1  Thus  we  find  that 
the  master  made  an  agreement  with  his  apprentice  as 
to  the  period  of  apprenticeship  and  the  latter  had  to 
live  in  his  master's  house  till  the  expiration  of  the 
period.  If  the  apprentice  forsook  his  master  he  might 
"be  compelled  by  forcible  means  to  remain  with  his 
master  and  would  deserve  corporal  punishment.  But 
the  master  was  to  teach  him,  feed  him  and  treat  him 
like  a  son.  While  the  apprentice  thus  got  his  board 
and  lodging  at  his  master's  expense,  the  profits  arising 
from  the  work  done  by  the  apprentice  went  to  the 
master,  and  the  apprentice  could  not  leave  his  master 
before  completing  the  full  period  of  apprenticeship 
although  his  course  of  instruction  might  have  been 
completed  before  the  expiry  of  this  period.  But  if 
the  master  permitted  him  to  do  so  the  apprentice, 
after  having  learnt  his  art,  could  leave  his  master 
within  the  stipulated  period  and  return  home,  but  he 
must  reward  his  master  as  plentifully  as  he  could. 
In  Brihaspati  (about  600  A.D.)2  we  find  that  the 
executive  authority  which  enabled  the  gild  to  perform 
its  various  functions  was  a  chief  or  president,  assisted 
by  two,  three,  or  five  executive  officers.  Only  persons 
who  were  "honest,  acquainted  with  the  Vedas  and 
with  dut}r,  able,  self -controlled,  sprung  from  noble 
families  and  skilled  in  every  business"  were  to  be 
appointed  as  officers.  These  officers  exercised  a  con- 
siderable amount  of  authority  over  individual  mem- 
bers. Thus  if  an  individual  failed  to  perform  his  duty, 
though  able  to  do  the  same,  he  could  be  punished  by 
the  confiscation  of  his  entire  property  and  by  banish- 
ment from  the  town.  Whatever  was  done  by  these 
officers  whether  harsh  or  kind  towards  individual  mem- 
bers, in  accordance  with  prescribed  rules,  must  be  up- 
held by  the  King.  But  if  the  officers  were  actuated 
by  hatred  or  malice  and  injured  a  member  then  the 
King  could  interfere.  Thus  it  is  clear  that  an  appeal 
lay  to  the  King  from  every  decision  of  the  executive 
officers,  but  the  King  could  only  grant  relief  if  the  deci- 
sion of  the  officers  was  actuated  by  personal  feelings 
and  was  not  in  accordance  with  prescribed  rules. 


1  Ibid.,  Narada  V,  16-20,  pp.  133-4. 

*  S.B.E.  Vol.  XXXIII,  Brihaspati,  Chapter  XVII,  9-20,  pp.  347-9. 

10 


74 


The  monopoly  of 
caste  in  India. 


Effect  of  caste  on 
industries  and 
callings. 


Manu. 


A  dissertation  on  the  ancient  monopolies  in  India 
will  not  be  complete  without  a  reference  to  what  might 
be  called  the  monopoly  of  caste.  The  characteristics 
of  the  caste  system,  however,  as  well  as  its  history 
and  work  in  India,  differ  very  much  from  those  of  the 
craft-gilds  of  Europe.  The  caste  system  as  such  is 
no  integral  part  of  the  constitution  of  municipal  or 
town  government,  nor  has  it  anything  to  do  with 
charters  or  grants  from  the  King.  It  is  a  vast  social 
fabric  built  on  a  religious  or  quasi-religious  founda- 
tion.1 It  has  had,  however,  a  very  far-reaching  effect 
upon  the  development  of  industries  and  on  the  trans- 
mission of  talent  or  acquired  skill  from  generation  to 
generation.  Of  the  four  primary  castes,  the  Vaisyas 
or  the  third  caste  form  the  back-bone  of  the  commer- 
cial class.  The  Kshatriyas  or  nobles  whose  proper 
calling  is  to  bear  arms  may  also  engage  in  trade.  But 
the  Brahmana  is  not  entitled  to  do  so  unless  it  be  a 
case  of  necessity  or  exigency.  The  Sudras  who  form 
the  servitor  or  lowest  caste  supply  the  bulk  of  the 
mechanics,  artisans,  and  labourers  such  as  weavers, 
tanners,  carpenters,  black-smiths,  gold-smiths,  fisher- 
men arid  the  like.  Thus  in  ancient  India  one's  calling, 
generally  speaking,  had  not  to  be  determined  by  one's 
own  choice,  or  the  pleasure  or  patronage  of  a  society, 
or  a  period  of  apprenticeship  in  some  firm  or  factory, 
but  it  was  in  fact  in  most  cases  predetermined  for 
him  by  the  caste  in  which  he  was  born  and  to  which 
he  necessarily  belonged.  Not  every  person  could  en- 
gage in  trade  in  ancient  India.  Commerce  or  trade 
proper  was  restricted  to  Vaisyas.  They  alone  had  the 
control  of  the  buying  and  selling  of  commodities.  A 
Brahmana  could  not  engage  in  trade  except  when  he 
was  in  distress.  Thus  Manu  lays  down  that  a  Brah- 
mana might  in  distress  live  by  the  occupation  of  a 

1  Legends  invest  it  with  somewhat  of  a  religious  significance.  But  it 
appears,  originally,  to  have  been  based  on  the  distinction  of  different  callings 
or  professions.  Thus  the  Vdyu  Purdna  describes  how  in  the  first  or  Krita 
age  there  existed  no  castes,  but,  subsequently,  Brahma  established  divisions 
among  men  according  to  their  persuasions.  "  Those  of  them  who  were 
suited  for  command  and  prone  to  deeds  of  violence,  he  appointed  to  be 
Kshatriyas.  Those  disinterested  men  who  attended  upon  them,  spoke  the 
truth  and  declared  the  Veda  aright  were  Brahmanas.  Those  of  them  who 
were  feeble,  engaged  in  the  work  of  husbandmen,  tillers  of  earth  and  indus- 
trious, were  Vaisyas.  Those  who  were  cleansers  and  ran  about  on  service 
and  had  little  vigour  or  strength  were  called  Sudras."  See  also  Mahabha- 
rata,  Santi  Parva,  Sec.  188, 


75 

Kshatriya,  or  even  that  of  a  Vaisya.1  The  Mitakshara  The  Mitakshara. 
commenting  on  this  subject  obseryes  :  "  A  twice-born 
person,  that  is,  a  Brahmana,  when  by  reason  of  being 
depended  upon  by  a  large  family,  is  unable  to  subsist 
by  the  occupation  of  his  own  caste,  might  live  by  the 
occupation  belonging  to  a  Kshatriya,  that  is  by  such 
things  as  bearing  arms  and  so  on,  at  the  time  of  dis- 
tress. When  he  is  not  able  to  live  even  by  that  he 
might  live  by  the  occupation  belonging  to  a  Vaisya, 
such  as  trade,  etc.,  but  not  by  the  profession  of  a 
Sudra."  Again,  when  a  Brahmana  was  thus  compelled 
to  give  up  the  pursuit  of  his  owrn  legitimate  calling,  he 
was  not  free  to  go  the  whole  length  and  be  an  out- 
and-out  Vaisya.  Though  by  occupation  a  Vaisya, 
there  were  restrictions  on  what  he  could  sell.  Fruits, 
stones,  linen,  soma,  men  (slaves),  wheat,  cake,  herbs, 
sessamum,  boiled  rice,  a  Brahmana  shall  not  sell  at  any 
time.2  Similarly,  the  Sudra  had  a  place  allotted  to 
him  in  the  social  and  economic  life  of  the  people.  His 
work  was  to  serve  the  twice-born  classes.  But  when 
unable  to  make  a  living  in  the  sphere  of  life  assigned 
to  him  he  might  become  a  merchant  or  live  by  various 
handicrafts,  contributing  to  the  comfort  and  conve- 
nience of  the  twice-born  classes. 

Regarding  the  social  usages  prevailing  in  Northern  Mrs.  Rhys  Davids 
India  between  the  sixth  or  seventh  century  B.C.  and  °?th*  castem 

.11  r  ,1        TA  T.yr^-1          V^-11          Northern  India. 

the  date  of  the  Emperor  Asoka,  Mrs.  Rhys  Davids  has 
made  an  important  collection  of  data  from  early 
records  upon  which  she  comes  to  the  conclusion  that 
the  ancient  records  go  far  to  show  that  "  there  was 
no  such  thing  as  a  hard  and  fast  division  of  the  indus- 
trial world  into  hereditary  groups  and  castes,  but,  on 
the  contrary,  there  was  a  considerable  degree  of  mo- 
bility both  of  labour  and  capital."  At  the  same  time 
there  was  considerable  specialisation  and  localisation 
of  industry.  We  are  told  that  there  were  villages  of 
carpenters,  of  iron-smiths,  etc.,  as  also  villages  of  Brah- 
manas.  Brahmanas  appear  frequently  in  the  Jataka 
stories  as  cultivating  their  own  acres  aided  sometimes 
by  their  families  and  slaves  or  hired  labourers.  And 
in  at  least  one  case  such  a  person,  owning  a  thousand 


1  Manu,  Chapter  X,  verses  81  and  82. 

2  See  Manu,  Chap.  X,  verses  86-89;  S.B.E).  Vol.  25,  p.  421. 


76 

Karisas,  is  described  as  living  in  a  Brahmin  village.1 
There  were,  however,  Brahmanas  and  Brahmanas. 
Those  who  took  their  hereditary  sacerdotal  functions 
seriously  undertook  no  wordly  calling,  abstaining  from 
agriculture  as  much  as  from  hunting,  trade,  or  usury. 
The  law-books  expressly  declare  agriculture  to  be  unfit 
for  either  Kshatriyas  or  Brahmanas.  The  latter 
might  engage  in  them  only  in  distressful  circumstances 
or  if  they  took  no  active  part  in  the  work.2 

AU  this  is  now  ancient  history.  One's  calling  is 
Sit  present  determined  in  India  by  the  sovereign  needs 
of  competition.  True  the  weavers,  carpenters,  gold- 
smiths, blacksmiths,  milkmen  and  craftsmen  of  various 
sorts  exist  at  the  present  day  as  separate  castes— 
mostly  confined  within  the  Sudra  class.  But  under 
the  levelling  influence  of  western  civilization  the  castes 
and  sub -castes,  from  an  economic  point  of  view,  are 
fast  losing  their  restrictive  barriers. 


1  Economic  Journal  (1901),  article  headed   "Economic   Conditions    in 
Ancient  India,"  pp.  310-12;  Jataka,  Vol.  IV,  No.  484. 

2  'Sacred    Books   of   the  East,'    II,  123,  225,  229;    XIV,  II,  175.  176; 
XXV  3.72,  325. 


LECTURE  IV. 

MONOPOLY  OF  TRADING  COMPANIES. 

The  history  of  the  Hanseatic  League  is  closely  The  Company  of 
associated  by  way  of  rivalry  with  that  of  the  Company 
of  Merchant  Adventurers,  which  marks  the  border  line 
between  the  gilds  of  the  Middle  Ages  and  the  trading 
companies  forming  the  subject  of  the  present  lecture. 
The  Company  was  established  in  London  but  had 
branches  at  Exeter  and  Newcastle.  It  received  its 
first  charter  of  privileges  in  the  year  1407  as  the 
Brotherhood  of  St.  Thomas  a  Becket.  In  the  year 
1505  King  Henry  VII  granted  a  fresh  charter  under 
the  name  of  the  Fellowship  of  the  Merchant  Adven- 
turers of  England.  Soon,  it  grew  into  a  most  power- 
ful and  influential  body  and  came  to  have  about  four 
thousand  members.  This  is  how  the  Company  is  des- 
cribed as  it  was  in  the  year  1601.  "The  Company 
consists  of  a  great  number  of  wealthy  merchants  of 
diverse  great  cities  and  maritime  towns  in  England, 
London,  York,  Norwich,  Exeter,  Ipswich,  Newcastle, 
Hull,  etc.  These  of  old  times  linked  themselves  to- 
gether for  the  exercise  of  merchandise  by  trading  in 
cloth,  kersies,  etc.,  whereby  they  brought  great  wealth 
to  their  respective  places  of  residence.  Their  limits 
are  the  towns  and  ports  lying  between  the  river  Somme 
and  all  the  coasts  of  Netherland  and  Germany  within 
the  German  Sea ;  not  unto  all  at  each  man's  pleasure, 
but  unto  one  or  two  towns  at  most  within  the  same 
bounds,  which  they  commonly  call  Mart  Towns,  or 
Towns,  because  there  only  they  stacked  their  commo- 
dities and  put  them  to  sale  and  thence  only  they  brought 
such  foreign  wares  as  England  wanted,  and  which  were 
brought  from  far,  by  diverse  nations  flocking  thither 
to  buy  and  sell  as  at  a  fair." 

The  various  companies  of  merchant  adventurers 
which  were  authorized  at  the  time  had  definite  territo- 
rial limits  assigned  to  each  of  them,  within  which  its 
members  were  privileged  to  trade.  There  were  advan- 
tages of  such  a  system  and  although  there  was  a 
large  and  persistent  opposition  to  companies  by 
advocates  of  open  trade  the  companies  succeeded  in 


obtaining  a  firm  footing.  The  advantages  are  obvious. 
First,  from  the  point  of  view  of  the  State.  It  was 
scarcely  possible  for  the  kings  to  exercise  control 
over  the  minutiae  of  foreign  trade.  There  were  few 
consuls  at  foreign  ports ;  and  even  where  there  were 
consuls  they  would  not  have  had  authority  over 
buyers  and  sellers.  It  was,  therefore,  found  expedient 
for  maintaining  a  hold  on  foreign  commerce  and 
regulating  it  on  proper  lines  to  take  recourse  to  the 
Merchant  Adventurers.  The  State  proceeded  to  confer 
special  trading  privileges  on  these  bodies  of  mer- 
chants and  make  them  responsible  for  the  proper  con- 
duct of  traffic  on  lines  most  advantageous  to  the 
realm,  as  well  as  profitable  to  themselves.  Secondly, 
from  the  point  of  view  of  the  members  themselves. 
The  companies  offered  benefits  which  were  highly 
appreciated.  Among  other  benefits,  Cunningham 
points  out,  (( It  was  possible  for  such  a  body  to  secure 
definite  privileges,  as  to  tolls  and  customs  for  their 
foods  and  a  satisfactory  status  in  regard  to  the  re- 
covery of  debts  and  other  civil  business."  l  But  apart 
from  all  this,  the  companies  of  merchant  adventurers 
like  the  merchant  and  craft  gilds  succeeded  in  framing 
useful  and  effective  rules  for  securing  fairplay  among 
the  merchants.  "No  one,"  for  instance,  "might 
trade  at  odd  times  or  in  secret  places,  but  fairly  and 
openly.  A  minimum  price  was  fixed  and  no  one  was 
to  spoil  the  market  by  taking  less ;  but  if  he  failed  to 
get  the  price,  other  merchants  could  be  required  to 
take  the  foods  off  his  hands ;  only  when  the  market 
was  regularly  glutted,  and  after  consultation  with 
others,  was  a  merchant  permitted  to  lower  his  price  ; 
no  one  man  was  allowed  to  undersell  others.  Similar- 
ly, the  "stint"  was  intended  to  prevent  any  one 
dealer  from  engrossing  the  whole  trade  ;  the  merchant 
adventurers  had  elaborate  arrangements  for  appor- 
tioning this  limited  amount  of  business  among  the 
different  members  of  the  company,  so  that  each  might 
have  a  fair  chance  of  earning  his  living  by  his  call- 
ing." 2  Lastly,  there  were  considerable  profits  which 


1  Cunningham's  '  Growth  of  English  Industry  and  Commerce,  Modern 
Times,'  Part  I  (1903  edition),  p.  219. 

2  '  Ibid  ,  p.  220. 


79 

naturally  drew  to  its  support  and  co-operation  a  large 
body  of  powerful  and  influential  merchants.  That 
the  profits  were  phenomenal  is  evidenced  by  the  fact 
that  outsiders  or  ' ( inter lopers "  often  thought  it 
worth  their  while  to  poach  upon  the  trade  of  adven- 
turers, notwithstanding  the  risks  which  they  inevitably 
ran  by  doing  so.  Cases  of  such  interlopers  were  of 
frequent  occurrence. '  The  charge  persistently  levelled 
against  the  companies  by  outsiders  was  that  they  were 
odious  monopolies.  It  was  as  often  met  by  the 
companies  by  the  assertion  that  the  merchants  were 
quite  free  to  compete  with  one  another  within  the 
prescribed  limits,  and  hence  there  could  be  no 
monopoly.  Besides,  they  were  subject  to  competition 
with  the  Hanseatic  League  and  other  alien  merchants. 
They  claimed,  on  the  contrary,  that  they  conferred  a 
benefit  on  merchants  by  ensuring  a  steady  trade  with 
no  violent  fluctuations  and  that  their  rules  and  regula- 
tions tended  to  contribute  to  the  common  weal. 

The  struggle  for  supremacy  between  the  merchant 
adventurers  and  the  Hanseatic  League  was  long  and 
arduous.  But  it  finally  terminated  in  favour  of  the 
Merchant  Adventurers  in  the  sixteenth  century  and  the 
Hanse  Merchants  were  obliged  to  withdraw  from  the 
Steelyard  in  London.  It  is  not  possible  within  the 
scope  of  these  lectures  to  discuss  the  later  history 
of  the  adventurers  and  I,  therefore,  pass  on  to  con- 
sider in  brief  one  or  two  other  companies  of  the  time. 

1  Vide  Cunningham's  *  Growth  of  English  Industry  and  Commerce  '  Vol. 
I.  'Modern  Times,'  Part  I,  p.  244:  The  west  of  England  appears  to  have 
been  a  stronghold  of  interlopers  ;  the  clothiers  there  had  objected,  as  early 
as  the  time  of  Henry  VII,  to  the  practical  necessity  which  compelled  them 
to  send  their  drapery  to  Blackwall  Hall  in  London,  so  that  it  might  be 
shipped  from  there  by  the  Merchant  Adventurers  who  had  the  exclusive 
rights  of  exporting  it  to  the  Low  Countries.  Complaints  were  made  by 
some  Exeter  merchants  in  1660  ;  but  the  answer  of  the  London  Company 
seems  to  have  impressed  the  Government  favourably,  and  the  interlopers 
got  no  satisfaction.  The  traders  of  Bristol  took  the  lead  in  a  similar 
agitation  in  1669,  and  endeavoured  without  success  to  get  the  merchants  of 
Newcastle  to  join  in  other  efforts ;  but  the  Tyneside  men  were  in  favour 
of  well-ordered  trade,  and  had  little  sympathy  with  interlopers  though  they 
had  grievances  of  their  own,  of  which  some  record  has  been  preserved  in  the 
papers  of  the  Newcastle  branch  of  the  Merchant  Adventurers:  "  Although 
the  merchant  adventurers  have  dealt  very  unkindly  to  us  yet  in  this 
case  we  do  hold  it  more  conducing  to  the  common  good  of  trade  and  the 
maintayning  of  our  generall  privilege  to  joyne  with  the  the  merchants  of 
London  rather  than  with  these  interlopers  and  if  you  find  them  (the  London 
Branch)  desirous  of  it  (petitioning)  if  York  and  Hull  will  doe  the  like,  wee 
shall  joyne  our  force  against  those  enemies  of  our  trade." — Newcastle  Merchant 
Adventurers  [Surtees  Society),  II,  137. 


8o 

It  will  have  appeared  from  the  above  treatment 
that  these  companies  were  not  'Companies'  in  the 
modern  sense  of  the  term.  A  joint-stock  company, 
by  which  is  meant  a  corporation  with  one  capital 
which  the  members  hold  jointly,  is  of  later  growth. 
In  a  joint-stock  company  the  members  are  precluded 
from  trading  separately.  In  fact,  they  merge  their  in- 
dividuality in  the  whole,  their  individual  contributions 
go  to  make  up  the  whole  capital,  and  the  profits  too 
are  not  separate  but  make  up  one  entire  fund,  which 
is  subsequently  distributed  amongst  the  members. 
If  special  trading  privileges  are  conferred  on  such  a 
company,  such  as  the  sole  right  to  deal  in  a  particular 
class  of  goods,  or  in  a  particular  tract  of  country,  the 
company  necessarily  becomes  a  monoply  ;  and  no  one 
but  the  joint-stock  company  in  question  can  deal  in 
such  goods  or  within  such  area.  The  character  of 
the  companies  we  have  been  hitherto  discussing  was 
evidently  quite  different  .  They  have  been  designated 
(  regulated  '  companies.  Each  member  of  a  regulated 
company  might  trade  separately  on  his  own  capital. 
Only,  he  was  bound  to  observe  certain  rules  laid  down 
for  the  general  body.  In  other  words,  it  was  a  federa- 
tion of  businesses.  Strictly  speaking,  therefore,  it  was 
not  a  monopoly.  But,  in  fact,  it  often  proved  to  be  a 
monopoly,  by  bringing  an  important  trade  or  industry 
into  the  hands  of  a  favoured  few  l  who  alone  by  reason 
of  the  charter,  grant  or  special  privilege,  could  control 
it  and  profit  by  it. 

Regulation  of  There  were  various  exclusive  trading  companies 

trade  by  the  trad  of  ^he  time  in  whose  hands  were  entrusted  the  com- 


ing  companies.  .  . 

mercial  development  of  the  people.  The  closing  of 
the  Steelyard  and  the  withdrawal  of  the  Hanse  privi- 
leges in  London  left  the  Merchant  Adventurers  the 
masters  of  the  situation  so  far  as  the  trade  in  the  Elbe 
and  the  Rhine  valleys  were  concerned.  But  there  were 
yet  large  tracts  of  country  which  were  covered  by  the 
activities  of  the  Hanse  League,  and  which  were  outside 
the  scope  of  the  charter  granted  to  the  adventurers. 

J  Cunningham's  <  Growth  of  English  Industry  and  Commerce,  Modern 
Times,'  Part  I,  p.  216.  One  of  the  means  by  which  the  benefits  of  the  com- 
pany were  kept  within  narrow  limits  was  the  heavy,  at  times  almost  prohibi- 
tive, fine  on  admission  to  the  society,  and  the  efforts  of  the  interlopers  or 
independent  traders  were  directed  to  reducing  the  amount  of  the  fine,  and 
thereby  making  it  more  accessible  to  all. 


8i 

new  company  called  the  Eastland  Company  was  The  Eastland  Com- 
created  by  Elizabeth  in  the  year  1579  having  for  its  pany* 
object  the  regulation  and  control  of  the  trade  with 
Scandinavia,  Poland  and  the  German  ports  on  the 
Baltic.  This  Company  like  that  of  the  Merchant 
Adventurers  exported  cloth,  but  presently  it  began  to 
import  from  the  shores  of  the  Baltic,  tar,  hemp, 
cordage  and  all  sorts  of  naval  stores,  and  in  the 
seventeenth  century  it  seems  to  have  carried  on  a 
most  vigorous  and  prosperous  trade.  It  appears  to 
have  been  conducted  on  the  footing  of  a  regulated 
company,  and,  from  all  accounts,  to  have  been  carried 
on,  on  a  fair  and  equitable  basis,  without  being  open  to 
the  charge  of  being  an  odious  monopoly.  Various 
causes,  however,  soon  brought  about  its  decline.  The 
current  of  public  opinion  in  England  against  the 
chartered  companies  was  steadily  gaining  strength. 
Thus  in  1672  "it  was  decreed,  firstly,  that  there 
should  be  a  free  trade  to  Norway,  Denmark  and 
Sweden  ;  secondly,  that  any  one  should  be  entitled  to 
trade  to  the  other  Baltic  ports  wdthin  the  limits  of  the 
Eastland  Company's  charter  on  his  joining  that 
company  which,  it  provided,  any  trade  could  do  on 
payment  of  405."  l  The  Eastland  Company  ultimately 
had  to  give  way  before  the  Dutch  maritime  power 
which  captured  the  trade  in  and  about  the  Baltic. 

The  career  and  character  of  the  Muscovy  Com-  The  Muscovy  or 
pany  was  somewhat  different,  inasmuch  as  it  enjoyed  Russian  Company, 
throughout  the  reputation  of  being  an  odious  mono- 
poly. It  was  organized  after  the  remarkable  expedi- 
tion of  Sir  Hugh  Willoughby  in  the  hope  of  finding  a 
North- East  passage  to  India.  In  the  year  1555  the 
company  obtained  a  charter  whereby  exclusive  privi- 
leges were  reserved  in  its  favour  for  trade  with  Russia 
by  the  nothern  route.  It  also  succeeded  in  obtaining 
special  privileges  from  the  Czar  of  Russia.  In  the  year 
1604  "the  management  of  the  Company  became  the  sub- 
ject of  severe  strictures  in  the  House  of  Commons: 
( The  Muscovy  Company,  consisting  of  eight  score  per- 
sons or  thereabouts,  have  fifteen  directors,  who  man- 
age the  whole  trade  ;  these  limit  to  every  man  the  pro- 
portion of  stock,  which  he  shall  trade  for,  make  one 

l  Palgrave's  « Dictionary  of  Political  Economy, '  Vol.  I,  p.  673. 
II 


82 

purse  or  stock  of  all,  and  consign  it  into  the  hands  of 
one  agent  at  Moscow  and  as  again  at  their  return,  to 
one  agent  in  London,  who  sell  all,  and  give  such  ac- 
count as  they  please.  This  is  a  strong  and  shameful 
monopoly,  a  monopoly  in  a  monopoly,  both  abroad 
and  at  home ;  a  whole  company,  by  this  means,  is 
become  as  one  man,  who  alone  hath  the  utterance  of 
all  the  commodities  of  so  great  a  country."  l 

The  company  was  originally  started  as  a  joint- 
stock  company.  Later,  it  became  a  regulated  com- 
pany. But  the  admission  fine  was  put  at  such  a  high 
figure  as  successfully  to  exclude  all  but  a  few  mer- 
chants. Thus  though  not  a  monopoly  in  form,  it  be- 
came in  fact  a  very  exclusive  monopoly,  and  brought 
upon  itself  the  criticism  and  condemnation  of  all  right- 
minded  persons.  Owing  to  numerous  representations 
on  behalf  of  individual  merchants  a  statute  was 
passed  (10  Will.  Ill  C.  6)  by  which  the  entrance  fee 
payable  to  the  company  was  definitely  fixed  at  ^5, 
and  under  these  conditions  the  company  existed  until 
the  close  of  the  i8th  century.  The  history  of  this 
company  is  of  special  interest  inasmuch  as  it  exem- 
plifies the  gradual  victory  of  the  interlopers  in  breaking 
down  the  monopoly  of  an  exclusive  corporation. 
The  Turkey  The  Levant  Company,  otherwise  known  as  the 

Turkey  Company,  was  started  later.  During  the 
1 6th  century  various  attempts  had  been  made  by 
Englishmen  to  obtain  a  share  in  the  commerce  of  the 
Eastern  Mediterranean.  It  was  not  till  1606  when 
the  Turkey  Company  was  freshly  constituted  that 
regular  commerce  was  established  between  England 
and  the  dominions  of  the  Sultan.  It  is  interesting 
to  note  that  by  the  charter  granted  by  James  I  in 
1605  to  this  Company,  it  had  power  "  to  fine  and  im- 
prison members  and  subordinates  who  disobeyed  its 
orders.  No  one  might  send  ships  to  the  parts  desig- 
nated by  their  charter,  but  such  as  were  free  bro- 
thers of  the  corporation,  or  otherwise  licensed  by 
them,  who  were  to  pay  £20  for  admission ....  The 
Company,  however,  had  never  been  an  exclusive  or 
oppressive  monopoly,  but  on  the  contrary  was  based  on 
the  assertion  of  the  inestimable  liberty  of  trade.  Every 

l  «  Commons  Journals'  I.  220,  quoted  in  Cunningham's  '  History. ' 


83 

merchant  who  could  pay  the  required  entrance  fee 
was  of  right  admitted  as  a  member,  and  was  entitled 
to  trade  on  his  own  account".1  Its  principal  factor- 
ies were  at  Smyrna  and  Aleppo,  the  latter  being  the 
depot  for  trade  with  Persia.  Later  on,  the  Turkey 
Company  came  into  conflict  with  the  French  mer- 
chants and  it  met  with  its  greatest  adversary  in  the  Eng- 
lish East  India  Company.  It  had  none  of  the  faults  of 
the  latter  and  was  not  open  to  criticism  as  much  as 
the  latter  undoubtedly  was.  But  regulated  companies 
were  just  becoming  a  thing  of  the  past.  The  growing 
tendency  was  in  favour  of  joint-stock  companies.  The 
Turkey  Company  gave  way  before  this  new  change 
which  had  come  over  the  State  and  the  people  in 
regard  to  their  attitude  towards  business  and  com- 
mercial enterprises. 

The  joint-stock  principle  was  applied  with  no  The  Early 
very  marked  success  to  the  trade  with  Africa.  There  Af "can  Companies, 
were  repeated  schemes  for  establishing  an  African 
Company.  In  the  year  1618  James  I  granted  the  first 
patent  for  a  joint- stock  company  to  organize  a  trade 
to  Guinea.  From  this  time  onwards  repeated  at- 
tempts were  made  with  little  or  no  success  of  a 
permanent  nature.  In  the  year  1672  the  Royal  African 
Company  also  called  the  Guinea  Company  was  founded 
by  Royal  Charter.  At  first  it  seemed  to  go  well  with 
the  Company,  and  it  secured  the  sympathy  and  good- 
will of  the  public.  But  there  was  one  great  drawback. 
The  royal  charter,  without  a  parliamentary  status, 
failed  to  render  the  Company  immune  from  attacks 
by  ( interlopers '  who  began  to  outbid  and  undersell 
the  Company.  In  1698  the  help  of  the  Parliament 
was  invoked  and  an  Act  was  passed  which  definitely 
declared  the  trade  open  to  all,  but  provided  that  every 
independent  trader  must  pay  a  duty  of  10  per  cent  to 
the  Company  to  enable  the  Company  to  maintain 
the  necessary  fortifications  and  establishments.  The 
duty,  however,  which  was  levied  from  the  interlopers 
did  not  suffice  for  the  Company's  expenses  on  the  up- 
keep of  the  fortifications.  From  1730  onwards  the 
Parliament  granted  the  Company  £10,000  annually 
towards  its  expenses.  Even  this  did  not  suffice.  In 

i  Palgrave's  '  Dictionary  of  Political  Economy,'  Vol.  Ill,  p.  595. 


1750  the  Parliament  had  to  interfere  again — this  time 
for  winding  up  the  joint-stock  African  Company  and 
incorporating  all  traders  to  Africa  as  a  regulated 
company  with  a  fine  on  admission  fixed  at  40  shillings. 
But  the  affairs  of  the  Company  never  looked  up 
again.  After  some  years  of  unprofitable  expenditure 
the  Company  was  finally  wound  up  in  the  year 
1821. l 

Another  celebrated  company  of  the  period  or- 
Bay  company  ganized  on  a  joint- stock  basis  was  the  Hudson's  Bay 
Company  *  founded  in  the  year  1670  by  royal  charter 
granted  to  Prince  Rupart  and  seventeen  other  noble- 
men and  gentlemen.  The  charter  secured  to  the  Com- 
pany ' '  the  sole  trade  and  commerce  of  all  those  seas, 
straits,  bays,  rivers,  lakes,  creeks  and  sounds  in  what- 
ever latitude  they  shall  be,  that  lie  within  the 
entrance  of  the  Straits  commonly  called  Hudson's 
Straits,  together  with  all  the  lands  and  territory  upon 
the  countries,  coasts  and  confines  of  the  seas,  bays,  etc., 
aforesaid,  that  are  not  actually  possessed  or  granted  to 
any  of  our  subjects  or  possessed  by  the  subjects  of  any 
other  Christian  prince  of  state."3  The  English  Com- 
pany was  at  first  exposed  to  constant  hostility  from  the 
French  from  Canada.  But  after  the  downfall  of  Quebec 
the  trading  system  of  the  French  was  paralysed  and  the 
Hudson's  Bay  Company  found  itself  at  a  position  of 
vantage.  Throughout  the  region  comprised  within  the 
charter  the  Company  possessed  for  nearly  two  hundred 
years  the  monopoly  of  the  fur  trade  and  succeeded  in 
earning  considerable  profits  for  its  members. 

The  history  of  the  seventeenth  and  eighteenth  cen- 
turies is  replete  with  the  activities  of  numerous  exclu- 
sive companies.  They  were  regarded  by  the  go-ahead 
nations  not  only  with  favour  and  indulgence,  but  almost 
as  necessary  instruments  for  colonization  and  expan- 
sion. Hence  we  find  the  French,  the  Spanish,  the 
Portuguese,  the  Dutch,  and  the  English  vying  with 
each  other  in  inaugurating  and  promoting  exclusive 
companies.  Besides  the  companies  already  mentioned, 

1  See  Palgrave's  '  Dictonary  of  Political  Economy,'  Vol.  I,  p.  18,  andl/e 
Rosignol's  '  Monopolies,  Past  and  Present.' 

2  A  most  interesting  account  of  this  Company  will  be  found  in  George 
Bryce's  « The  Remarkable  History  of  the  Hudson's  Bay  Company,' and  in 
Palgrave's  «  Dictionary  of  Political  Economy,'  Vol.  II,  p.  335. 

3  Quoted  in  I^e  Rosignol's  « Monopolies,  Past  and  Present ,'  p.  82. 


85 

there  were  other  celebrated  companies  of  which  may 
be  mentioned  the  Dutch  East  India  Company,  the 
Dutch  West  India  Company,  the  French  East  India 
Company,  the  French  West  India  Company,  the  Loui- 
siana Company,  the  Virginia  Companies  of  London  and 
Plymouth,  the  South  Sea  Company  and  the  Darien  Com- 
pany. It  was  virtually  the  age  of  Companies.  In  the 
words  of  Macaulay  which  were  meant  to  apply  to  the 
English  only,  but  which  were  really  applicable  to  other 
important  nations  of  Europe  at  the  time,  "  The  nation 
was  in  no  humour  to  dispute  the  validity  of  the 
charters  under  which  a  few  companies  in  London  traded 
with  distant  parts  of  the  world."  l  Some  of  these 
companies  were  actuated  by  purely  commercial  motives. 
Others  had  for  their  object  not  only  the  development 
of  a  profitable  trade,  but  also  settlement  and  coloni- 
zation in  the  regions  coming  within  the  scope  of  their 
operations.  In  the  case  of  the  latter,  the  flag  went  in 
the  wake  of  the  trade  and  necessarily  led  to  political 
complications. 

The  history  of  the  British  East  India  Company  The  British 
stands  out  unique  and  unparalleled  both  by  reason  of  Bast  India 
the  magnitude  of  its  operations,  and  the  great  part  it 
has  played  in  shaping  the  destinies  of  this  country. 
Who  ever  could  have  thought  when  the  first  expedi- 
tion set  sail  from  Torbay  that  there  was  the  unconscious 
beginning  of  a  great  and  gigantic  programme  of  empire- 
building  ?  Yet  so  it  has  turned  out  to  be.  The  first 
charter  of  the  East  India  Company  was  granted  on 
the  3ist  December,  1600.  It  constituted  the  adven- 
turer, viz.  George  Earl  of  Cumberland  and  215  knights, 
aldermen  and  burgesses,  a  body  politic  and  corporate 
under  the  name  of  "The  Governor  and  Company  of 
Merchants  of  London  trading  to  the  East  Indies." 
By  this  charter  privilege  was  granted  to  the  Company, 
with  certain  reservations,  of  trading  to  the  East  Indies, 
that  is,  to  all  places  beyond  the  Cape  of  Good  Hope 
and  the  Straits  of  Magellan,  with  power  to  export  in 
each  voyage  £30,000  in  gold  and  silver,  also  English 
goods  for  the  first  four  voyages  exempt  from  duties, 
and  to  re-export  Indian  goods  in  English  ships.  The 
charter  was  exclusive,  prohibiting  the  rest  of  the 

1  See  Macaulay's  '  History  of  England,'  Vol.  Ill,  pp.  293-302. 


86 

community  from  trading  within  the  limits  assigned  to 
the  Company,  but  granting  to  them  the  power,  when- 
ever they  pleased,  of  bestowing  licenses  for  that 
purpose.1 

The  affairs  of  the  Company  were  to  be  managed 
by  a  Committee  of  twenty-four,  and  one  chairman. 
The  charter  was  granted  for  a  period  of  fifteen  years, 
but  on  condition  that  if  the  trade  did  not  appear  to  be 
profitable  to  the  realm  it  might  be  annulled  at  any 
time  under  a  notice  of  two  years ;  if  advantageous,  it 
might  be  renewed  for  a  further  period  of  fifteen  years. 
This  restriction,  however,  was  removed  soon  after. 
In  1609,  the  Company  obtained  a  renewal  of  their 
charter,  confirming  all  their  preceding  privileges,  and 
constituting  them  a  body  corporate,  not  for  fifteen 
years,  or  any  other  limited  time,  but  for  ever ;  at  the 
same  time  providing  that  in  the  event  of  injury  to  the 
nation,  their  exclusive  privileges  could  be  terminated 
by  a  three  years'  notice.  Unlike  the  other  companies, 
the  British  East  India  Company  was  openly  and 
avowedly  a  most  exclusive  monopoly.  Although  at 
first  the  Company  was  open  to  any  merchant  on 
payment  of  the  prescribed  entry  fee,  the  Company's 
Directors  so  contrived  it  that  presently  the  Company  's 
control  came  to  be  exclusively  confined  to  the  earlier 
share-holders  only.  The  share-holders  had  one  common 
purse;  there  was  no  admission  to  the  trade  by  merely 
paying  a  fine  as  in  the  case  of  the  other  companies ; 
the  only  way  of  entering  into  the  trade  was  by  pur- 
chasing a  share  from  one  of  the  merchants  who  wrere  in 
the  business  already — a  very  uncertain  chance  for  there 
might  be  few  ready  to  sell,  specially  if  the  business 
was  profitable.  None  but  the  Company  could  sell 
the  goods  it  imported  and  there  was  no  restriction  as 
to  prices,  so  that  the  Company  was  free  to  raise  them  to 
any  arbitrary  figure  and  thereby  make  unreasonable 
profits  at  the  expense  of  the  purchasers. 

Such  was  the  character  and  constitution  of  the 
Company.  No  doubt  it  had  been  originally  founded 
in  the  year  1600  as  a  regulated  company,  But  steps 
were  soon  taken  in  1612  and  1657  which  transformed 
it  into  a  joint- stock  company.  It  soon  established 

l  See  Mill's  «  History  of  British  India,'  Vol.  I,  p.  24. 


87 

several  factories  in  different  parts  of  India  such  as  at 
Surat  in  1609,  at  Madras  in  1639,  at  Hooghly  near 
Calcutta  in  1650,  and  at  Bombay  in  1665.  In  the  Spice 
Islands  the  interest  of  the  English  Company  came 
into  direct  conflict  with  those  of  the  Dutch.  Eventu- 
ally the  English  merchants  were  obliged  to  leave 
the  Islands  and  seek  fresh  fields.  In  India,  slowly  but 
steadily  the  Company  made  its  influence  felt,  and 
gradually  strengthened  its  position  by  alliances  with 
the  Native  Princes,  and  afterwards  by  war  and  con- 
quest. But  trouble  arose  at  home.  For  as  soon 
as  the  Company  became  prosperous  and  accounts  of 
its  large  profits  got  home,  the  '  interlopers '  who  had 
by  no  means  been  inactive  so  far,  were  spurred  on  to 
take  the  aggressive  in  a  pronounced  manner.  The 
independent  merchants  now  took  their  stand  on  their 
constitutional  rights  and  questioned  the  validity  of 
the  charter  purporting  to  grant  a  monopoly  in  vio- 
lation of  the  rights  of  free  citizens.  The  Company 
claimed  that  the  charter  had  been  granted  in  the 
fitness  of  things.  For  the  successful  prosecution  of 
Eastern  trade  it  was  necessary  to  have  an  association 
strong  enough  to  negotiate  with  Native  Princes,  to 
adopt  adequate  offensive  and  defensive  measures, 
whenever  and  wherever  necessary,  to  enforce  discipline 
amongst  its  agents  and  servants,1  and  to  sweep  away 
European  rivals  from  the  field.  Free  and  open  com- 
petition, howsoever  right  and  proper  it  might  be  in 
other  spheres  of  commerce  and  trade,  would  be  entirely 
out  of  place  in  gigantic  and  hazardous  enterprises  of 
this  description.  There  were  great  issues  at  stake  and 
equally  great  were  the  risks  and  responsibilities  in- 
volved, and  the  adventurers  must  receive  sufficient 
encouragement  in  order  that  they  might  embark  on 
their  arduous  enterprise.  The  only  inducement  that 
could  attract  them  was  the  grant  of  exclusive  privileges. 
All  this  was  indeed  true.  At  the  same  time  the  argu- 
ment of  the  interlopers  was  unanswerable.  They  re- 
sented the  monopoly  of  the  Company  and  stood  up  for 

1  It  is  interesting  to  note  that  in  1624  the  Company  petitioned  the  king 
for  authority  to  punish  servants  abroad  by  martial  as  well  as  municipal 
law.  This  prayer  seems  to  have  been  readily  granted  and  it  appears  that  it 
was  not  even  deemed  necessary  to  go  through  any  parliamentary  proceeding 
for  warranting  the  transfer  to  the  Company  of  unlimited  power  over  the  life 
and  liberty  of  citizens. 


88 

freedom  and  equality  and  no  favour.  Again  and  again 
they  attempted  to  break  in  upon  the  chartered  privi- 
leges of  the  Company.  One  such  case  of  interloping 
was  rendered  famous  by  the  altercation  which  it  pro- 
duced between  the  two  houses  of  Parliament  in  1666. 
Thomas  Skinner,  a  merchant,  fitted  out  a  vessel  in 
1657.  The  agents  of  the  Company  seized  his  ship  and 
merchandise  in  India,  his  house  and  the  Island  of 
Baretha  which  he  had  bought  of  the  King  of  Jamby. 
They  even  denied  him  a  passage  home  ;  and  he  was 
obliged  to  travel  overland  to  Europe.  The  Lords  took 
up  Skinner's  case,  but  the  Company  would  not  acknow- 
ledge their  jurisdicton  and  appealed  to  the  Com- 
mons who  sent  Skinner  to  the  Tower.  He  obtained  no 
redress  though  the  Lords  awarded  him  £5000. l 
Another  well-known  case  is  that  of  Sandys.  Sandys 
had  ventured  a  voyage  on  his  own  account  to  the  East 
Indies.  His  ship  "The  Expectation"  was  arrested 
under  Admiralty  process,  and  he  himself  was  sued  on 
an  action  on  the  case  of  violating  the  franchise.  The 
case  was  decided  in  favour  of  the  Company,  it  being 
held  that  these  charters  were  matters  of  royal  preroga- 
tive and  were  not  to  be  governed  by  the  rules  of  com- 
mon law.2  In  view  of  the  constant  troubles  caused 
by  the  action  of  interlopers,,  the  Company  secured  from 
King  Charles  II  in  1661  a  new  charter  confirming  all 
the  former  privileges  and  granting  the  Company  per- 
mission to  make  peace  or  war  "with  or  against  any 
princes  or  people  not  being  Christians"  and  to 
seize  the  unlicensed  persons  and  send  them  to  England. 
In  exercise  of  the  rights  under  the  charter  the  Company 
seized  interlopers  and  sent  them  off  to  England  where 
they  were  tried  in  the  Admiralty  Courts  on  charges 
of  piracy  or  other  heinous  offences,  and  punished 
with  great  severity.  All  this  contributed  to  rouse 
the  hostility  of  the  House  of  Commons  which 
proceeded  to  appoint  a  Committee  for  investigating 
the  subject.  On  the  i6th  January,  1690,  the  Com- 
mittee reported  that  a  new  Company  should  be 
established,  and  established  by  Act  of  Parliament ;  and 
that  the  present  Company  should  be  allowed  to  carry  on 

1  See  Skinner  v.  East   India  Co.  referred  to  in  Mostyn  v.  Fabrigas,  i 
Cowp.  p.  1678. 

2  East  India  Co.  v.  Sandys  (1684),  Skin.  pp.  197-8.. 


the  trade  exclusively  till  the  new  Company  was  estab- 
lished. In  1691  the  House  addressed  the  King  to 
dissolve  the  Company  and  the  matter  was  referred  to  a 
Committee  of  the  Privy  Council.  In  1693  the  King  with 
the  view  of  retaining  the  prerogative  of  granting  char- 
ters or  monopolies  in  his  own  hands,  and  also  with  the 
object  of  summarily  settling  the  controversy,  granted 
a  new  charter  by  letters  patent  conferring  on  the  Com- 
pany a  monoply  for  twenty-one  years  under  certain 
conditions.  The  right  of  the  King  to  grant  such  a  fran- 
chise (in  the  face  of  the  Declaration  of  Rights)  was, 
however,  questioned  by  the  Commons,  and  it  was 
strongly  suspected  that  the  Company  had  been  adopting 
a  policy  of  wholesale  corruption  for  the  purpose  of  win- 
ning over  high  officials  on  its  side.  An  inquiry  was 
ordered  and  it  ended  in  the  startling  disclosure  that  no 
less  than  £90,000  had  been  expended  on  bribes  in  the 
year  1693^  of  which  it  is  said  £10,000  was  traced  to 
the  King. 2  Great  indignation  prevailed  in  the  House 
of  Commons,  which  proceeded  to  pass  a  resolution 
"that  all  the  subjects  of  England  have  equal  rights  to 
trade  to  the  East  Indies  unless  prohibited  by  Act  of 
Parliament."  This  gave  a  new  impetus  to  the  exer- 
tions of  the  interlopers  who  now  became  more  active 
than  ever.  In  the  year  1698  they  were  able  to  float  a 
new,  or  General,  as  distinguished  from  the  London 
Company  called  (( The  General  Society  Trading  to  the 
East  Indies."  Thus  commenced  a  period  of  rivalry 
and  competition  resulting  in  loss  and  injury  to  both, 
till  in  the  year  1702  Parliament  resolved  for  the  welfare 
of  the  realm  to  bring  about  an  union  between  the  two. 
After  long-protracted  negotiations  the  two  companies 
were  finally  amalgamated  on  a  joint-stock  basis,  and 
in  the  year  1708  was  established  in  their  place  "The 
United  Company  of  Merchants  of  England  trading  to 
the  East  Indies."  The  exclusive  privileges  of  the  United 
Company  were  granted  not  only  by  the  Crown  but  by 
Act  of  Parliament  to  hold  good  till  1726.  By  a  later 
Act3  the  period  was  extended  to  1733.  Thus  Parlia- 
ment finally  committed  itself  to  the  declared  policy 

1  Mill's  «  History  of  British  India,'  Vol.  I,  p.  134. 

2  Cunningham's   '  Growth  of  English  Industry  and  Commerce  (Modern 
Times),'  Part  I,  p.  268. 

3  10  Anne  C.  28. 

12 


of  giving  exclusive  right  to  a  corporation  notwith- 
standing the  right  so  often  pressed  on  behalf  of  the 
citizens  to  free  and  unrestricted  trade  to  the  East 
Indies  or  to  any  part  of  the  world.  But  this  was  not 
all.  In  the  year  1718  it  reaffirmed  its  decision  em- 
powering the  Company  to  punish  interlopers  when 
caught  trading  under  foreign  commissions.1 

Armed  with  the  franchise  and  with  the  support 
of  the  Parliament,  demonstrated  by  repeated  Acts  in 
its  favour,  the  Company  set  out  afresh  on  its  work. 
Before  the  period  of  its  franchise  came  to  an  end  the 
interlopers,  however,  again  renewed  their  activities 
and  the  independent  merchants  clamoured  for  equal 
rights  and  an  open  trade  for  all.  The  Company  was 
not  to  be  put  down  in  a  hurry.  In  1733  and  1744 
the  Company  succeeded  in  obtaining  fresh  renewals 
of  its  charter.  In  1766  a  committee  of  inquiry  was 
again  appointed  by  the  House  of  Commons  to  in- 
vestigate the  nature  and  causes  of  the  complaints  made 
against  it,  but  it  resulted  in  the  reconstruction  of  the 
Company  in  1773. 

The  East  India  Company  since  its  inception  had 
weathered  many  storms  and  fought  many  battles. 
It  was  no  longer  a  merely  trading  body.  It  had  formed 
important  alliances  with  native  Princes  in  India, 
taken  an  important  part  in  the  quarrels  and  conflicts 
that  had  arisen  amongst  them,  and  had  slowly  grown 
into  a  political  power  by  no  means  to  be  despised. 
It  was  clear  that  its  activities  had  now  transcended 
the  small  sphere  of  traders  and  had  entered  upon 
the  larger  plane  of  Empire-builders.  The  victories  of 
Clive  had  definitely  raised  the  vision  of  an  Empire, 
and  the  English  people  were  not  slow  to  perceive  it. 
It  was  high  time,  therefore,  that  this  fact  should  be 
recognized  by  Act  of  Parliament.  By  the  Act  of  recon- 
struction in  1773  the  Parliament  recognized  the  politi- 
cal character  of  the  Company  and  made  provision 
for  parliamentary  control. 

The  political  achievements  of  the  Company  do 
not  concern  us  in  the  present  treatment.  The  good 
and  evil  of  the  East  India  Company,  its  merits  and 


i  5  Geo.  I.  C.  21.     These   powers  were  further  enforced  and  extended 
by  7  Geo.  I.  C.  21  ;  9.  Geo.  I.  C.  26. 


9* 

demerits,  generally,  are  matters  that  pertain  to  a 
historical  treatise.  In  giving  the  above  short  history 
my  object  has  been  merely  to  portray  the  chequered 
career  of  a  company  which  affords  a  magnificent  illus- 
tration of  the  forces  at  work  for  and  against  privi- 
leged companies.  Despite  repeated  efforts  the  Com- 
pany remained  supreme  and 'the  open  trade  to  India 
was  not  secured  till  1813,  and  even  then  the  Company 
was  allowed  to  retain  the  monopoly  of  the  trade  to 
China  until  1833.  In  1833  it  ceased  to  be  a  commercial 
body  and  was  allowed  to  exist  as  the  agent  of  the 
British  Government  for  the  administration  of  India, 
--a  fitting  end  to  the  unique  career  of  the  Company. 
The  different  interests  of  the  Company, — as  sovereign 
of  India  on  the  one  hand,  and  as  monopoliser  of  trade 
and  commerce  on  the  other, — were  in  direct  conflict 
with  each  other.  As  sovereign  it  was  the  clear  duty 
of  the  Company  to  look  alone  to  the  interests  of  the 
people  whom  it  governed ;  as  a  trading  monopoly  its 
interest  was  to  secure  as  large  a  profit  as  possible,  even 
if  that  were  to  be  secured  at  the  expense  and  to  the 
prejudice  of  the  same  people.  This  was  a  position  that 
could  not  be  allowed  to  continue.  Moreover,  the  ex- 
clusive privilege  of  the  Company  while  preventing  the 
people  of  India  from  purchasing  foreign  articles  and 
selling  their  indigenous  products  on  advantageous 
terms  also  operated  to  shut  out  individual  enterprise 
in  Great  Britain  as  was  so  often  evidenced  by  the 
cases  of  '  interlopers.'  It  was,  therefore,  felt  that 
from  the  English  as  well  as  the  Indian  point  of  view 
the  time  had  come  for  the  extinction  of  the  East 
India  Company  as  a  trading  monopoly. 


LECTURE  V. 
THE  LAW   OF   PATENTS. 

In  my  introductory  lecture  I  have  briefly  indi- 
cated the  place  which  patents  occupy  in  the  law  of 
monopolies.  In  one  sense  patents  may  be  looked 
Patents  mark  the  upon  as  the  beginning  of  the  so-called  legal  mono- 
.  polies.  From  very  early  times  the  English  sovereigns 
used  to  grant  "letters  patent"  or  open  letters  to 
individuals  or  groups  of  individuals.  We  have  found 
that  it  was  usual  for  kings  to  grant  charters  to  towns, 
as  also  to  merchant  gilds,  craft  gilds,  regulated  com- 
panies and  joint- stock  companies.  It  was  also  corn- 
History  of  patents,  mon  f  or  kings,  as  a  mark  of  their  favour,  to  grant  to 
individuals  by  letters  patent  special  privileges  or  spe- 
cial immunities  from  duties  or  restrictions.  In  fact,  it 
was  the  prerogative  of  the  king  to  issue  charters  or 
letters  patent  sealed  with  the  great  seal  and  ad- 
dressed to  the  king's  subjects  at  large  declaring  in 
favour  of  the  particular  individual  grants  of  land,  titles 
of  nobility,  liberties,  franchises  or  any  other  privilege 
that  could  be  granted.  At  times  the  royal  pre- 
rogative came  to  be  exercised  in  favour  of  individuals 
who  paid  money  into  the  king'  s  Treasury,  receiving 
in  lieu  thereof  valuable  franchises.  Under  the  Tudor 
and  Stewart  kings  many  such  monopolies  were  granted 
by  royal  patents.  Under  Henry  VIII  they  increased 
in  number.  Under  Queen  Elizabeth  the  innumerable 
monopolies  by  royal  patent  became  a  source  of  great 
public  discontent.  The  patentees  openly  sold  their 
franchises  at  high  prices  to  others  and  there  was  a 
regular  traffic  going  on  in  royal  patents.  Hence  there 
Conflict  between  arose  a  great  conflict  in  the  reign  of  Elizabeth  between 
thepeop£ignand  the  sovereign  and  her  people  touching  the  abuse  of 
monopolies.  Let  the  historian  speak  of  it  in  his  own 
language.  "  Under  cover  of  the  loosely  defined  pre- 
rogative possessed  or  assumed  by  the  Crown  of  regu- 
lating all  matters  relating  to  commerce,  the  queen 
had  taken  upon  herself  to  make  lavish  grants  to  her 
courtiers  of  patents  to  deal  exclusively  in  a  multitude 
of  articles,  mostly  common  necessaries  of  life.  Coal, 
leather,  salt,  oil,  vinegar,  starch,  iron,  lead,  yarn, 


93 

glass  and  many  other  commodities  were  in  conse- 
quence only  to  be  obtained  at  ruinous  prices.  The 
grievance  was  first  mooted  in  Parliament  in  1571  by 
a  Mr.  Bell :  but  he  was  at  once  summoned  before  the 
Council,  and  returned  to  the  House  "with  such  an 
amazed  countenance,  that  it  daunted  all  the  rest." 
After  the  lapse  of  twenty-six  years  the  Commons 
ventured  in  1597  to  present  an  address  to  the  Queen 
on  the  same  subject,  to  which  she  replied,  through 
the  Lord  Keeper,  that  she  '  hoped  her  dutiful  and 
loving  subjects  would  not  take  away  her  prerogative, 
which  is  the  choicest  flower  in  her  garden  and  the 
principal  and  head-pearl  in  her  crown  and  diadem; 
but  would  rather  leave  that  to  her  disposition,  pro- 
mising to  examine  all  patents  and  to  abide  the  touch- 
stone of  the  law/  In  spite  of  these  fair  words,  the 
abuse  far  from  being  abated,  rose  to  a  still  greater 
height.  So  numerous  were  the  articles  subject  to 
monopoly,  that  when  the  list  of  them  was  read  over 
in  the  House  in  1601,  an  indignant  Member  exclaimed, 
'  Is  not  bread  amongst  them  ?  Nay,  if  no  remedy  is 
found  for  these,  bread  will  be  there  before  the  next 
Parliament! '  A  Bill  ( for  explanation  of  the  common 
law  in  certain  cases  of  letters-patent'  was  introduced 
by  Mr.  Lawrence  Hyde,  and  was  debated  with  unpre- 
cedented warmth  for  four  days.  The  ministers  and 
courtiers  who  endeavoured  to  support  the  prerogative, 
were  overborne  by  a  torrent  of  indignant  and  menac- 
ing eloquence.  The  populace  openly  cursed  the 
monopolies  and  declared  that  the  prerogative  should 
not  be  suffered  to  touch  the  old  liberties  of  England. 
Seeing  that  resistance  was  no  longer  politic,  or  even 
possible,  Elizabeth  with  admirable  tact  sent  a  mes- 
sage to  the  House  that  'understanding  that  diverse 
patents  which  she  had  granted  had  been  grievous  to 
her  subjects,  some  should  be  presently  repealed,  some 
superseded,  and  none  put  in  execution,  but  such  as 
should  first  have  a  trial,  according  to  the  law,  for  the 
good  of  the  people.'  Robert  Cecil,  the  Secretary,  added 
the  more  direct  assurance  that  all  existing  patents 
should  be  revoked,  and  no  others  granted  for  the 
future."  l 

l  Taswell-I^angmead's   «  English  Constitutional   History,'   pp.  495-497. 


94 


Darcy  v.  Allein. 


The  Statute  of 
Monopolies 

reaffirmed  the 
Common  Law. 


The  present  law  of 
patents  is  sub- 
stantially that  con- 
tained in  the  Sta- 
tute with  differ- 
ences as  to  details. 


Then  followed  the  case  of  Darcy  v.  Allein,1  in 
which  the  principle  of  common  law  as  to  validity  of 
patents  as  an  exception  to  monopolies  was  fully  dis- 
cussed and  clearly  laid  down  (see  Lecture  I).  The 
principle  of  exception  was  soon  afterwards  adopted 
by  the  Statute  of  Monopolies  *  in  Sections  5  and  6 
thereof.  The  statute,  therefore,  did  not  create,  but 
simply  reaffirmed  and  regulated  the  power  of  the 
crown  in  granting  patents  to  true  and  first  inventors. 
It  declared  all  grants  of  monopolies  whatsoever  apart 
from  those  already  in  existence  to  be  void  save  those 
exempted  by  the  following  proviso:  "  Provided  also 
that  any  declaration  beforementioned,  shall  not  ex- 
tend to  any  letters  patent  and  grants  of  privilege  for 
the  term  of  fourteen  years  or  under,  hereafter  to  be 
made,  of  the  sole  working  or  making  of  any  manner 
of  new  manufactures  within  this  realm  to  the  true 
and  first  inventor  and  inventors  of  such  manufac- 
tures which  others  at  the  time  of  making  such  letters 
patent  and  grants  shall  not  use,  so  as  also  they  be 
not  contrary  to  the  law  nor  mischievous  to  the  State 
by  raising  the  price  of  commodities  at  home  or  hurt 
of  trade  or  generally  inconvenient,  the  said  fourteen 
years  to  be  accounted  from  the  date  of  the  first  letters 
patent  or  grants  of  such  privilege  hereafter  to  be 
made,  but  the  same  shall  be  of  such  force  as  they 
should  be  if  this  Act  had  never  been  made  and  of 
none  other."  The  law  of  patents  as  it  stands  to-day 
is  substantially  the  same  as  laid  down  in  the  above 
section.  The  difference  is  one  of  detail  only.  It  has 
been  elaborated  and  rendered  more  definite  and  pre- 


In  the  Long  Parliament  Sir  John  Culpepper  indulged  in  the  following 
vigorous  language  :— They  are  a  nest  of  Wasps— a  swarm  of  Vermin  which 
have  over- swept  the  land  Like  the  Frogs  of  Egypt,  they  have  gotten  pos- 
session of  our  dwellings  and  we  have  scarce  a  room  free  from  them.  They 
sup  in  our  cup  ;  they  dip  in  our  dish ;  they  sit  by  our  fire.  We  find  them  in 
the  dyefat,  wash-bowl  and  powdering  tub.  They  share  with  the  butler  in 
his  box.  They  will  not  bait  us  a  pin.  We  may  not  buy  our  clothes  with- 
out their  brokerage.  These  are  the  leeches  that  have  sucked  the  common 
wealth  so  hard  that  it  is  almost  hectical.  Mr.  Speaker  I  have  echoed  to 
you  the  cries  of  the  kingdom.  I  will  tell  you  their  hopes.  They  look  to 
Heaven  for  a  blessing  on  this  Parliament. 

The  monopolies  referred  to  in  the  above  declaration  were  nothing  more 
than  the  royal  patents.  Restriction  of  competition  under  them  was  effected 
not  by  the  act  of  the  individuals,  but  the  exclusive  character  of  the  grant. 

1  (1602)  Noy.  173,  s.c.  74  Eng.  Rep.  1131. 

2  Statute  of  Monopolies    (1624)  entitled  *'  An  Act   concerning  Mono- 
polies and  Dispensations  with  Penal  Laws  and  Forfeiture  thereof." 


95 

cise  by  numerous  decisions.  Besides,  the  present  law 
prescribes  distinct  remedies  as  well  as  specific  forms 
and  procedure  for  safeguarding  patent  right.  Sir 
Edward  Coke  in  his  lucid  commentary  on  sections  5  Coke'scommentary 
and  6  of  the  Statute  of  Monopolies  points  out  seven  of^sStute'Sf6 
outstanding  features  to  be  noted  regarding  the  provi-  Monopolies, 
sions  contained  therein.  He  says:  ((  Firstly,  it  must 
be  for  twenty-one  years  or  under.1  Secondly,  it  must 
be  granted  to  the  first  and  true  inventor.  Thirdly, 
it  must  be  of  such  manufactures  which  any  other  at 
the  making  of  such  letters  patents  did  not  use ;  for 
albeit  it  were .  newly  invented,  yet  if  any  other  did 
use  it  at  the  making  of  the  letters  patents,  or  grant 
of  the  privilege,  it  is  declared  and  enacted  to  be  void 
by  this  Act.  Fourthly,  the  privilege  must  be  sub- 
stantially newly  invented ;  but  if  the  substance  was 
in  esse  before,  and  a  new  addition  thereunto  though 
that  addition  make  the  former  more  profitable,  yet 
it  is  not  a  new  manufacture  in  law ;  and  so  was  it 
resolved  in  the  Exchequer  Chamber,  Pasch  15  Eliz. 
in  Bircot'  s  case  for  a  privilege  concerning  the  pre- 
paring and  melting,  etc.,  of  lead  ore;  for  there  it  was 
said  that  that  was  to  put  but  a  new  button  to  an  old 
coat  and  it  is  much  easier  to  add  than  to  invent. 
And  there  it  was  also  resolved  that  if  the  new  manu- 
facture be  substantially  invented  according  to  law, 
yet  no  old  manufacture  in  use  before  can  be  pro- 
hibited. Fifthly,  nor  mischievous  to  the  State  by 
raising  of  prices  of  commodities  at  home.  In  every 
such  new  manufacture  that  deserves  a  privilege  there 
must  be  urgens  necessitas  and  evidens  utilitas.  Sixthly, 
nor  to  the  hurt  of  trade.  This  is  very  material  and  evi- 
dent. Seventhly,  nor  generally  inconvenient.  There 
was  a  new  invention  found  out  heretofore,  that  bon- 
nets and  caps  might  be  thickened  in  a  fulling  mill, 
by  which  means  more  might  be  thickened  and  fulled 
in  one  day  than  by  the  labours  of  fourscore  men  who 
got  their  livings  by  it.  It  was  ordained  that  bonnets 
and  caps  should  be  thickened  and  fulled  by  the 
strength  of  men,  and  not  in  a  fulling  mill  for  it  was 
holden  inconvenient  to  turn  so  many  labouring  men  to 
idleness.  If  any  of  these  seven  qualities  fail,  the  privi- 


1  It  is  fourteen  years  in  the  case  of  Sec.  6. 


Much  of  Coke 's 
commentary  has 
now  become 
obsolete. 


Bouiton  v.  Butt, 


"  utility 


lege  is  declared  and  enacted  to  be  void  by  this  Act ; 
and  yet  this  act,  if  they  have  all  these  properties,  set 
them  in  no  better  case,  than  they  were  before  this 
Act." 

It  will  be  apparent  as  we  proceed  that  a  good 
portion  of  this  famous  commentary  of  Sir  Edward 
Coke's  has  now  become  obsolete  and  is  not  good  law  at 
the  present  day.  For  instance,  it  could  scarcely  be 
imagined  now  that  a  fulling  mill  would  be  deemed  to 
be  against  public  policy  because  forsooth  "it  was 
ordained  that  bonnets  and  caps  should  be  thickened 
and  fulled  by  the  strength  of  men,"  or  because  "it 
was  holden  inconvenient  to  turn  so  many  labouring 
men  to  idleness. "  This  antiquated  view  has  been 
overruled  in  Boulton  v.  Bull.1  Sir  Edward  Coke  also 
lays  down  that  it  is  a  necessary  ingredient  in  every 
patent  that  it  shall  have  evidens  utilitas.  If  by  "  util- 
ity "  is  meant  the  commercial  utility  of  a  particular 
invention,  the  law  is  quite  clear  that  it  has  no  direct 
effect  on  the  validity  of  a  patent,  although  it  does,  no 
doubt,  affect  the  value  of  the  patent.  The  real  test  of 
validity  of  a  patent  is  that  it  shall  be  new.  Probably, 
what  Sir  Edward  Coke  meant  by  evidens  utilitas  is  that 
it  must  be  proved  that  the  invention  put  forward  is 
really  new  and  that  in  actual  working  it  is  found  to 
do  the  special  work  which  is  claimed  for  it,  in  other 
words,  the  invention  must  justify  its  existence  as  a 
new  invention.  Further,  Sir  Edward  Coke  lays  down 
that  an  improvement  on  something  known  cannot  be 
the  subject  matter  of  a  patent  and  quotes  Bircofs 
Case  *  in  support  of  his  proposition.  This  proposition 
is  no  longer  good  law.  It  has  been  overruled  again 
and  again.3  Indeed,  if  this  were  regarded  as  good  law 
many  existing  patents  would  be  thrown  out  of  protec- 
tion. Apart  from  the  points  indicated  above,  the 
commentary  of  Sir  Edward  Coke  remains  true  to  this 
day ;  and  the  special  value  of  it  lies  in  the  concluding 
portion  of  it  which  makes  it  clear  that  the  statute  of 


1  (1795)  2  Hy.  Bl.  463  s.c.  126  Eng.  Rep.  651. 

2  (1573)  3-  Co.  Inst.  184,  Ex.  Ch. 

3  Ralston  v.  Smith  (1865)  n  H.L.C.  223,  s.c.  11  Eng.  Rep.  1318;  Boulton 
v.  Bull  (1795)  2  Hy.  Bl.  463,  488;  Morris  v.  Branson   1776,   cited  2  Hy.  Bl. 
489  s.c.  126  Eng.  Rep.  p.  664.    See  also  Halsbury's  '  Laws  of  England,' 
Vol.  22,  p.  138. 


97 

monopolies  does  not  create,  but  only  preserves  the 
right  which  previously  existed  at  common  law  to 
grant  letters  patent. 

Thus  it  appears  that  letters  patent  confer  a  f ran-  Letters  patent 
chise.1     No  one  is  entitled  to  a  patent  as  of  right  confer  a  franchise- 
The  principle  on  which  the  king  may  grant  the  t^fttESS+L 
chise  was  distinctly  laid  down  in  the  great  case  of  Principle  on  which 
Darcy  v.  Allein*  and  will  bear  repetition  in  this  con-  l ^ ™5chise is 
nection :  "  Where  a  man  had  by  his  own  charge  and  ® 
industry  or  by  his  own  wit  and  invention,  brought  any 
new  trade  into  the  realm,  that  was  not  used  before, 
and  that  for  the  good  of  the  realm,  the  king  might 
grant  him  a  monopoly  patent  for  some  reasonable  time 
until  the  subjects  might  have  learned  the  same,  in 
consideration  of  the  good  that  he  brought  by  his  invention 
to  the  common  wealth,  otherwise  not."     It  was  also 
laid  down  in  the  case  of  Millar  v.  Taylor 3  that  the 
inventor  is  not  in  the  same  position  as  an  author. 
An  author  has  a  natural  right  of  property  in  the  pro- 
duction of  his  mind,  for  an  author  creates  his  work. 
On  the  other  hand,  it  is  said  that  an  inventor  creates 
nothing.     He  merely  discovers  what  was  already  there 
and  exercises  his  ingenuity  in  applying  it  to  some 
useful  purpose  in  the  shape  of  a  machine  or  an  article 
of  manufacture.*     In  order,  therefore,  that  he  may 
enjoy  the  exclusive  6  use  of  it  for  a  time  he  must  apply 
to  the  crown  for  a  patent. 


1  See   Reg.   v.   County  Court  Judge  of  Halifax  I,.  R.  (1891)  I  Q.  B.  793. 
"  The  right  of  the  Crown  to  grant  letters  patent  to  a  person  for  the  sole  use 
of  any  art  first  invented  by  him  is  a  part  of  the  ancient  royal  prerogative. 
This  right  has  been  limited  by  the  Statute  of  Monopolies,  but  the  grant  is 
founded  on  the  common  law  right  of  the   Sovereign " — per  Pollock  B.  at 
p.  796. 

2  (1602-)  Noy  173  s.c.  74  Eng.  Rep.  1131. 

3  (1769)  4  Burr.  2303  s.c.  98  English  Rep.  201. 

4  Observe  that  a  contrary  opinion  is  expressed  by  Yates  J.  in  the  same 
case  Millar  v.    Taylor  (1769)  4  Burr,   p   2386.   "The  whole  claim  that  an 
author  can  really  make  is  on  the  public  benevolence,  by  way  of  encourage- 
ment, but  not  as  an  absolute  coercive  right      His  case  is  exactly  similar  to 
that  of  an  inventor  of  a  new  mechanical  machine ;  it  is  the  right  of  every 
purchaser  of  the  instrument  to  make  what  use  of  it  he  pleases.     It  is,  indeed, 
in  the  power  of  the  Crown  to  grant  him  a  provision  for  a  limited  time,  but 
if  the  inventor  has  no  patent  for  it  every  one  may  make  it  and  sell  it.  "     See 
also  the  observations  of  Aston  J.  at  p.  2348. 

5  Note  that  the  right  which  a  patentee  has  by  virtue  of  his  patent  is  a 
chose  in  action— [See  Re  Heath's  Patent  (1912)  W.  N.  137]— created  by  the 
exercise  of  the  royal  prerogative  and  is  entirely  distinct  from  the  right  of 
property  in  a  chattel  created  under  it.     The  letters  patent  do  not  give  the 
patentee  any  right  to  use  the  invention,  that  is,  a  right  which  he  would  have 
as  effectually  if  there  were  no  letters  patent  at  all.     What  the  letters  patent 

13 


The  Indian  Patents 
and    Designs    Act. 
Important  provi- 
sions bearing  on 
the  fundamental 
features  of  the 
monopoly  of  pa- 
tents, discussed. 


The  law  relating  to  patents  in  India  is  at  present 
governed  by  the  Indian  Patents  and  Designs  Act  (Act 
II  of  1911)  which  substantially  adopts  the  consoli- 
dating English  Act  (7  Edward  VII  C.  29)  with  some 
minor  variations,  such  as  may  be  necessary  for  adapt- 
ing it  to  the  conditions  of  this  country.  The  pre- 
rogative of  the  Crown  to  grant  patents  on  application 
has  been  kept  intact  by  Sec.  79  of  the  Act  (Act  II  of 
1911)  which  provides  as  follows:  " Nothing  in  this 
Act  shall  take  away,  abridge  or  prejudicially  affect  the 
prerogative  of  the  Crown  in  relation  to  the  granting 
of  any  letters  patent  or  to  the  withholding  of  a  grant 
thereof.  "  An  application l  for  a  patent  may  be  made 
by  any  person,  whether  he  is  a  British  subject  or  not 
and  whether  alone  or  jointly  with  any  other  person. 
The  application  must  be  made  in  the  prescribed  form, 
and  must  be  left  at  the  Patent  Office2  in  the  pre- 
scribed manner.  It  must  contain  a  declaration  to  the 
effect  that  the  applicant  is  in  possession  of  an  inven- 
tion, whereof  he,  or,  in  the  case  of  a  joint  application, 
one  at  least  of  the  applicants,  claims  to  be  the  true 
and  first  inventor,  or  the  legal  representative  or  assign 
of  such  inventor  and  for  which  he  desires  to  obtain  a 
patent.  Where  the  true  and  first  inventor  is  not  a 
party  to  the  application,  the  application  must  contain 
a  statement  of  his  name,  and  such  particulars,  for  his 
identification  as  may  be  prescribed,  and  the  applicant 
must  show  that  he  is  the  legal  representative  or  assign 
of  such  inventor.  The  application  must  be  accom- 
panied by  the  prescribed  fee  and  by  a  specification. 
The  specification  must  particularly  describe  and  ascer- 
tain the  nature  of  the  invention  and  the  manner  in 
which  the  same  is  to  be  performed.  Where  the 
Controller  3  deems  it  desirable  he  may  require  that 
suitable  drawings  shall  be  supplied  with  the  specifi- 


confer  is  the  right  to  exclude  others  from  manufacturing  in  a  particular 
way,  and  using  a  particular  invention  (Edwards  &  Co.  v.  Picard  (1909)  2 
K.  B.  903,  905  C.  A.  citing  Steers  v.  Rogers  (1893)  10  R.  P.  C.  245,  251  ;  (1893) 
A.  C.  232,  235).  See  Halsbury's  'Laws  of  England,'  Vol.  22,  p.  127. 

l  Sees.  3  and  4  of  the  Act. 

•2  The  Governor  General  in  Council  may  provide  for  the  purposes  of  this 
Act,  an  office  which  shall  be  called,  and  is  in  this  Act  referred  to  as,  the 
Patent  Office — Sec.  55,  sub-sec,  (i). 

3  The  Patent  Office  shall  be  under  the  immediate  control  of  the  Control- 
ler of  Patents  and  Designs,  who  shall  act  under  the  superintendence  and 
direction  of  the  Governor-General  in  Council,  Sec.  55,  sub-sec.  (2). 


99 

cation.  The  specification  must  commence  with  the 
title  and  mast  end  with  a  distinct  statement  of  the 
invention  claimed  or  alleged  to  constitute  an  invention. 
If  in  any  particular  case  the  Controller  desires  that 
an  application  should  be  further  supplemented  by  a 
model  or  sample  of  anything  illustrating  the  inven- 
tion, such  model  or  sample  as  he  may  require  shall  be 
furnished  before  the  acceptance  of  the  application, 
but  such  model  or  sample  shall  not  be  deemed  to  form 
part  of  the  application.  See  also  sec.  20  sub-sec, 
(i)  which  provides  as  follows :  There  shall  be  kept 
at  the  Patent  Office  a  book  called  the  Register  of 
Patents  wherein  shall  be  entered  the  names  and  ad- 
dresses of  grantees  of  patents,  of  licenses  under  patents, 
and  of  amendments,  extensions,  and  revocation  of 
patents,  and  such  other  matters  affecting  the  validity 
or  proprietorship  of  patents  as  may  be  prescribed. 
Sec.  38  of  the  Act  deals  with  the  question  of  'novelty.' 
An  invention  shall  be  deemed  a  new  invention  if  it 
has  not,  before  the  date  of  the  application  for  a  patent 
therein,  been  publicly  used  in  any  part  of  British 
India,  or  been  made  publicly  known  in  any  part  of 
British  India,  and  if  the  inventor  has  not  by  secret  or 
experimental  uses  made  direct  or  indirect  profits  from 
his  invention  in  excess  of  such  an  amount  as  the  Court 
or  the  Governor-General  in  Council,  as  the  case  may  be, 
may,  in  consideration  of  all  the  circumstances  of  the 
case,  deem  reasonable.  But  the  public  use  or  know- 
ledge of  an  invention,  before  the  date  of  the  appli- 
cation for  a  patent  thereon,  is  not  deemed  a  public 
use  or  knowledge  within  the  meaning  of  this  Act  if 
the  knowledge  has  been  obtained  surreptitiously  or 
in  fraud  of  the  true  and  first  inventor,  or  has  been 
communicated  to  the  public  in  fraud  of  such  inventor 
or  in  breach  of  confidence,  provided  that  such  inventor 
has  not  acquiesced  in  the  public  use  of  his  invention, 
and  that,  within  six  months  after  the  commencement 
of  that  use,  he  applies  for  a  patent.  Sec.  21  of  the 
Act  lays  down  that,  subject  to  any  conditions  which 
the  Governor-General  in  Council  may  have  imposed l 
a  patent  shall  have  to  all  intents  the  like  effect  as 

l  See  Sec.  77  of  the  Act  which  gives  the  Governor-General  in  Council 
the  power  to  make  such  rules  as  he  thinks  expedient  subject  to  the  provi- 
sions of  the  Act,  including,  among  others,  rules  for  regulating  the  practice 


100 

against  His  Majesty  as  it  had  against  a  subject  pro- 
vided that  the  officers  or  authorities  administering  any 
department  of  the  service  of  His  Majesty  may  by 
themselves,  their  agents,  contractors  or  others,  at  any 
time  after  the  application,  use  the  invention  for  the 
services  of  the  Crown  on  such  terms  as  may  either 
before  or  after  the  use  thereof,  be  agreed  on,  with  the 
approval  of  the  Governor-General  in  Council,  between 
those  officers  or  authorities  and  the  patentee,  or  in 
default  of  agreement,  as  may  be  settled  by  the 
Governor-General  in  Council  after  hearing  all  parties 
interested. 

I  have  put  the  above  sections  together  and  re- 
ferred to  them  first  because  they  reveal  the  fundamen- 
tal features  of  the  monopoly  of  patents  as  it  exists  at 
present.     The  rest  of  the  Act,  with  the  exception  of 
a  few  sections,  concerns  itself   with  details  of  pro- 
cedure, etc.     Another  way  of  studying  those  funda- 
Thefonn  prescribed  mental  features  is  to  look  at  the  form  prescribed  for 
for  application  jor  fae  application  f or  grant  of  a  patent.     In  exercise  of 
£a?ysedPaandn        the  powers  conferred  by  sees.  57  and  177  (i)  of  the 
discussed.  Act  the  Governor- General  in  Council  has  framed  rules 

(Indian  Patents  and  Designs  Rules,  1912).  Form  I 
Sched.  II  of  the  Rules  is  prescribed  for  application 
for  a  patent  under  sec.  3  when  the  true  and  first 
inventor  is  sole  or  joint  applicant.  Under  this  form 
the  applicant  (or  applicants,  as  the  case  may  be)  must 
declare,  first,  that  he  is  in  possession  of  an  invention 
of  which  the  title  has  to  be  given ;  secondly,  that  he 
claims  to  be  the  true  and  first  inventor  thereof; 
thirdly,  that  the  invention  is  not  in  use  by  any  other 
person ;  fourthly,  that  the  specification  filed  with  the 
application  is,  or  any  amended  specification  which 
may  thereafter  be  filed  will  be,  true  of  the  invention 
to  which  the  application  relates. 

Three  things  essen-  Thus  the  three  most  essential  things  for  a  patent 
tiai  for  a  patent.  are  that  there  must  be  an  f  invention/  that  the  patentee 
i.  There  must  be  must  be  the  true  and  first  inventor,  and  the  ( invention ' 
an  invention.  must  not  have  been  in  use  by  any  other  person. 
Now  what  is  an  invention  ?  An  invention  is  not 
invention  ex-  the  same  thing  as  a  discovery.  The  discovery  of  X- 

plained. 

of  registration  under  the  Act.  See  also  Indian  Patents  and  Designs  Rules 
made  in  exercise  of  such  powers,  infra. 


101 

rays  for  instance  is  a  most  important  addition  to 
scientific  knowledge.  But  it  is  a  discovery  pure  and 
simple,  until  it  conies  to  be  applied  by  means  of  an 
apparatus  to  various  uses,  well  known  to  medicine  and 
surgery,  when  it  becomes  an  'invention.'  So  with 
wireless  telegraphy,  radium  and  the  like.  If  a  man  does 
nothing  more  than  discover  that  a  known  machine 
can  produce  effects  which  no  one  before  him  knew 
could  be  produced  by  it,  his  discovery,  however  great 
and  useful,  is  not  a  patentable  invention.  To  entitle 
a  patentee  to  maintain  his  patent,  he  must  make 
some  addition  not  only  to  knowledge  but  to  pre- 
viously known  inventions,  and  must  produce  either  a 
new  and  useful  thing  or  result,  or  a  new  and  useful 
method  of  producing  an  old  thing  or  result.1 

An  invention,  as  defined  by  the  Act,  i means  any  'Manufacture' 
manner  of  new  manufacture,  and  includes  an  improve-  includes  a 

n     .  , .         .       ,_.,  new  substance  or 

ment  and  an  alleged  invention.  The  word  manu-  composition, 
facture'  is  interpreted  in  the  Act  to  "  include  any  art, 
process,  or  manner  of  producing,  preparing  or  making 
an  article,  and  also  any  article  prepared  or  produced 
by  manufacture.''  The  word,  therefore,  comprehends 
not  only  productions  but  also  the  means  or  method  of 
producing  them,  in  other  words,  in  addition  to  the 
article  produced,  it  will  comprehend  a  new  machine, 
or  a  new  combination  of  machinery,  as  well  as  a  new 
process  or  an  improvement  in  an  old  process.*  This 


1  Lane  Fox  v.  Kensington  Electric  Light  Co.  (1892)  3  Ch.  D.  424,  at  pp. 
428-429.     "The   discovery  that  a  known  thing — such,  for  example,  as  a 
Plante    battery — can    be    employed   for    a    useful   purpose    for    which    it 
has  never  been   used  before  is  not  alone    a  patentable  invention;    but, 
on   the  other  hand,  the  discovery   how  to  use    such    a    thing    for   such 
a    purpose    will    be    a    patentable    invention  if  there    is    novelty  in  the 
mode  of  using  it,  as  distinguished  from  novelty  of  purpose,  or  if 'any  new 
modification  of  the    thing  or  any  new   appliance  is    necessary   for  using 
it  for  its  new  purpose,    and  if  such   mode    of    user,  or  modification,  or 
appliance    involves     any     appreciable     merit." — Per    I^indley    I/.    J.,    at 
p.  429. 

2  Per  Lord  Westbury  in  Ralston  v.  Smith,  n  H.  I/.  C.  223  at  p.  246  s.c. 
145    R.R.    140    s.c.    ii   IJng.   Rep.    1318.     See    the    observations   of  Lord 
Cranworth  at  p.  251:     "It  is  not  every  useful  discovery  that  can  be  made 
the  subject  of  a  patent  but  you  must  show  that  the  discovery  can  be  brought 
within  the  fair  extension  of  the  words  a  •  new  manufacture.'  ....  Now  that 
is  a  very  useful  discovery,  but  it  would  be  strange  to  say  that  that  is  a  new 
manufacture,  and  that,  therefore,  I  am  to  be  deprived   of  the   most   useful 
way  of  employing  my  roller.     There  is  nothing  new  in  the  invention,  except 
that  I  now  know  what  I  did  not  know  before,  that  by  a  particular  use  of 
it  I  shall  obtain  a  result  which  I  did  not  before  know  that  I  could  obtain.  " 
See  also  the  observation  of  Eyre  Iv.  C.  J.  in  Boulton  and  Watt  v.  Bull  (2  H. 
Bl.    463    at    pp.    492-493    s.c.    126  Bug.    Rep.    651):    "When   the    effect 


102 

point  has  been  clearly  brought  out  by  Abbott  C.  J.  in 
The  King  v.  W  heeler, *•  thus :  "  the  word  'manufactures' 
has  been  generally  understood  to  denote  either  a 
thing  made,  which  is  useful  for  its  own  sake,  and  ven- 
dible as  such,  as  a  medicine,  a  stove,  a  telescope,  and 
many  others,  or  to  mean  an  engine  or  instrument,  or 
some  part  of  an  engine  or  instrument,  to  be  employed, 
either  in  the  making  of  some  previously  known 
article,  or  in  some  other  useful  purpose  as  a  stocking- 
frame,  or  a  steam  engine  for  raising  water  from  the 
mines.  Or  it  may  perhaps  extend  also  to  a  new  pro- 
cess to  be  carried  on  by  known  implements,  or  ele- 
ments, acting  upon  known  substances,  and  ultimately 
producing  some  other  known  substance,  but  producing 
it  in  a  cheaper  or  more  expeditious  manner,  or  of  a 
better  and  more  useful  kind.  But  no  merely  philo- 
sophical or  abstract  principle  can  answer  to  the  word 
manufacture.  Something  of  a  corporeal  and  sub- 
stantial nature,  something  that  can  be  made  by  man 
from  the  matters  subjected  to  his  art  and  skill,  or  at 
the  least  some  new  mode  of  employing  practically  his 
art  and  skill,  is  requisite  to  satisfy  this  word.  A 
person,  therefore,  who  applies  to  the  Crown  for  a 
patent,  may  represent  himself  to  be  the  inventor  of 
some  new  thing,  or  of  some  new  engine  or  instrument. 
And  in  the  latter  case  he  may  represent  himself  to  be 
the  inventor  of  a  new  method  of  accomplishing  that 
object,  which  is  to  be  accomplished  by  his  new  engine 
or  instrument,  as  was  the  case  of  Watt's  patent/  in 
which  he  represented  himself  to  be  the  inventor  of  a 
new  method  of  lessening  the  consumption  of  steam 
and  fuel  in  fire  engines,  and  by  his  specification  he 
described  certain  parts  to  be  used  in  the  construction 
of  fire  engines.  Or  supposing  a  new  process  to  be  the 
lawful  subject  of  a  patent,  he  may  represent  himself 


produced  is  some  new  substance  or  composition  of  things,  it  should  seem 
that  the  privilege  of  the  sole  working  or  making  ought  to  be  for  such  new 
substance  or  composition  without  regard  to  the  mechanism  or  process  by 
which  it  has  been  produced,  which  though  perhaps  also  new  will  be  only 

useful  as  producing  the  new  substance When  the  effect  produced  is  no 

new  substance  or  composition  of  things,  the  patent  can  only  be  for  the 
mechanism  if  new  mechanism  is  used,  or  for  the  process,  if  it  be  a  new  method 
of  operating,  with  or  without  old  mechanism,  by  which  the  effect  is  pro- 
duced." Cf.  Kopp  v.  Rosenwald  (1902)  19  R.  P.  C.  205. 

1  2  B.  and  Aid.  345  at  p.  349  s.c.  106  Eng.  Rep.  392. 

2  8  T.R.  95. 


103 

to  be  the  inventor  of  a  new  process,  in  which  case  it 
should  seem  that  the  word  method  may  be  properly 
used  as  synonymous  with  process." 

The  question  as  to  the  scope  of  the  term  f  manu- 
facture '  came  up  as  early  as  the  year  1815  in  the  case 
of  Wood  v.  Zimmer  l  in  connection  with  a  patent  for  wood 
a  new  mode  of  making  verdigrease,  and  the  discussion 
turned  on  whether  the  term  'manufacture'  could  be 
applied  to  a  new  process  or  method,  as  distinguished 
from  a  new  substance.  In  the  report  of  the  case  will 
be  found  a  note  *  containing  an  interesting  discussion 
of  the  subject,  and  reference  is  made  to  the  dictum  of 
Eyre  CJ.  in  Boulton  &  Watt  v.  Bull  *  laying  down  Bouiton  and  Watt 
that  new  methods  of  manufacturing  articles  in  common  v-  BulL 
use  "maybe  said  to  be  new  manufactures  in  one  of 
the  common  acceptations  of  the  word Three- 
fourths  of  the  patents  granted  since  the  Statute  (of 
James)  are  for  methods  of  operating  and  of  manu- 
facturing, producing  no  new  substance,  and  employ- 
ing no  new  machinery."  All  this  discussion  has 
been  now  rendered  unnecessary  by  reason  of  the  fact 
that  the  principle  embodied  in  the  above  cases  has 
been  crystallized  in  the  defining  section  of  the  Act. 
In  the  matter  of  an  alleged  invention  of  A.  E.  Short*  in^e  matter  of  an 
it  was  contended  on  behalf  of  the  applicant  that  the  \ 
term  'manufacture'  cannot  apply  to  the  process  alone 
but  means  the  process  taken  together  with  the  article 
produced  thereby  and  that,  therefore,  the  term  '  inven- 
tion '  cannot  be  confined  to  the  process  alone.  On 
the  other  side,  it  was  argued  that  the  term  manu- 
facture is  intended  to  draw  a  distinction  between  the 
invention  of  a  new  process  or  method  of  producing 
an  old  substance ;  and  that  where  an  old  substance 
like  shellac  is  produced  by  a  new  process  then  it  is 
the  new  process  which  is  the  new  manufacture,  where- 
as when  a  new  substance  is  produced  then  it  is  the 
new  substance  or  new  article  which  is  the  new  manu- 
facture. It  was  not  necessary  in  that  case  to  express 
a  final  opinion  on  these  points.  But  the  court  was 
inclined  to  take  the  view  that,  reading  the  definition 

1  Holt  (N.P.)  p.  58  s.c.  17  R.R.  605. 

2  Ibid.,  at  p.  65. 

s  2  Hy.  BL.  463  at  p.  494  s.c.  126  Eng.  Rep.  651. 
*  I.I/.R.  23  Cal.  702. 


104 


Patentable  inven- 
tion involves  a 
discovery,  but  the 
discovery  must 
result  in  a  '  new 
thing.  ' 


Subject-matter 
and  Novelty. 


of  the  term  manufacture  in  the  light  of  the  English 
authorities,  it  was  intended  that  when  an  old  or  known 
substance  is  produced  in  a  new  way  by  a  newly  dis- 
covered art  or  process,  then  the  term  '  manufacture ' 
may  be  applied  to  the  new  process. 

It  will  appear  from  the  above  that  there  must 
be  more  than  a  mere  discovery  to  constitute  a  patent- 
able  invention.  There  must  of  course  be  a  discovery. 
But  such  discovery  must  result  in  a  new  f thing' 
possessing  utility.  I  use  the  word  'thing'  advisedly 
because,  as  ordinarily  used,  the  word  implies  some 
concrete  object  as  opposed  to  a  mere  abstract  idea. 
In  technical  phraseology,  the  expression  'new  thing'  is 
conveyed  by  two  separate  terms,  viz.,  'novelty'  and 
'subject-matter,'  the  subject-matter  referring  to  the 
concrete  manifestation  of  the  new  discovery. 

Considerable  confusion  has  arisen  as  to  the  signi- 
fication of  the  term  (  subject-matter. '  The  confusion 
is  partly  due  to  the  fact  that  in  a  good  many  cases  it 
has  been  used  interchangeably  with  '  novelty,'  which 
is  practically  an  invariable  factor  in  an  invention. 
As  has  been  observed  above  an  invention  is  not  a 
mere  discovery,  but  implies  something  more.  In  the 
words  of  Eyre  I/.CJ.1  "  there  can  be  no  patent  for  a 
mere  principle  but  for  a  principle  so  far  embodied  and 
connected  with  corporeal  substances  as  to  be  in  a 
condition  to  act,  and  to  produce  effects  in  any  art, 
trade,  mystery  or  manual  occupation."  Such  em- 
bodiment or  concrete  manifestation  whether  it  be  in 
the  form  of  a  substance  or  a  process  or  method  is  desig- 
nated ( subject-matter.2 '  It  often  happens,  therefore, 
that  the  validity  of  a  patent  fails  for  what  is  called 
want  of  subject-matter.  But  more  often  than  it  ought 
to,  the  plea  of  want  of  subject-matter  is  raised  when 
it  appears  upon  examination  that  in  reality  what  is 
meant  is  that  the  patent  fails  for  want  of  novelty. 
This  confusion  should  be  avoided  as  far  as  possible, 
and  novelty  and  subject-matter  viewed  as  independent 
and  separate  factors  necessary  for  a  patent.  "  In  con- 


Watt 


Bull  2  H.B1.   463    at  p.  495,  s.c.  126  English 


1  Boulton  and 
Rep.  651. 

2  Thus  a  business  scheme  even  when  it  involves  ingenuity,  novelty  and 
utility  is  not  a  proper  subject-matter,  e.g.  a  new  method  of  indexing  finger 
prints.     Ward's  Application,  29  R.P.C.  79. 


sidering  subject-matter,  novelty  is  assumed;  the  ques- 
tion is  whether,  assuming  the  invention  to  be  new,  it  is 
one  for  which  a  patent  can  be  granted.  In  considering 
novelty,  the  invention  is  assumed  to  be  one  for  which 
a  patent  can  be  granted  if  new,  and  the  question  is 
whether  on  that  assumption  it  is  new  "  l 

The  law  on  this  subject  seems  on  the  face  of  it 
fairly  simple.  But  the  application  of  it  to  individual  Case-law. 
cases  is  fraught  with  some  difficulty.  Questions  of 
some  nicety  are  apt  to  arise  and  it  is,  therefore,  neces- 
sary to  look  into  the  case-law  which  has  denned  with 
some  accuracy  what  may  be  the  subject-matter  of  a 
patent.  It  has  been  held  that  the  discoverer  of  a 
new  principle  or  new  idea  as  regards  any  existing  art 
or  manufacture,  who  shows  a  mode  of  carrying  it  into 
practice,  as  by  a  machine,  may  patent  the  com- 
bination of  principle  and  mode,  although  the  idea,  or 
the  machine  would  not  alone  be  the  proper  subject  of 
of  a  patent.2  Here  there  is  the  discovery  of  a  new 
principle  followed  by  a  novel  application  of  it  in  some 
concrete  form.  A  novel  application  of  an  old  prin- 
ciple would  equally  justify  the  grant  of  a  patent.  In 
Danger  field  v.  Jones 3  it  was  laid  down  that  if  a  person 
having  a  particular  purpose  in  view  takes  the  general 
principles  of  mechanics,  and  applies  one  or  other  of 
them  to  a  manufacture  to  which  it  has  not  previously 
been  applied,  that  is  a  sufficient  ground  to  warrant 
an  application  for  a  patent,  provided  that  the  manu- 
facture in  question  be  new,  desirable,  and  of  public 
utility.*  So  in  Brooks  v.  Lamplughf  the  plaintiff  uti- 
lised the  principle  of  the  "trussed  beam"  already 
well  known  for  other  purposes  for  supporting  bicycle 
saddles ;  it  was  held  that  the  employment  of  the  old 
principle  was  attended  by  results  which  were  suffi- 
ciently new  and  ingenious  to  form  a  fit  subject  for  a 
patent.  As  observed  by  Jessel  M.R.  in  Hinks  v. 
Safety  Lighting  Co.,6  " where  a  slight  alteration  in  a 

1  Per  I^indley  ly.J.  in  Gadd  v.  The   Mayor  etc.  of  Manchester  (1892)  9 
R.P.C.  at  p.  525.     As  Terrell  observes,  "  strictly  speaking,  subject-matter 
is  a  question  of  law,  while  novelty  is  a  question  of  fact."     Terell  on  Patents, 
5th  Ed.  p.  39. 

2  Otto  v.  Linford  46  ly.T.N.S.  35  ;  The  Househill  Coal  and  Iron  Co.  v. 
Neilson   (1843)    I  W.P.C.  679;  s.c.  9,  C.  &  P.  788,    s.c.  8  Bug.  Rep.  616  ; 
The  British  Vacuum  Cleaner  Co.  v.  Suction  Cleaners  Ld.  (1904)  21  R.P.C.  303. 

13  L.T.  142.  *  On  the  question  of  utility  see  p.   109  infra. 

(1898)  15  R.P.C.  33.          6  (1876)  4  Ch.  D.  607,  615. 


io6 

combination  turns  that  which  was  practically  useless 
before  into  that  which  is  very  useful  and  very  import- 
ant, judges  have  considered  that  though  the  inven- 
tion was  small  yet  the  result  was  so  great  as  fairly  to 
be  the  subject  of  a  patent."  Another  class  of  cases 
turns  on  the  new  combination  of  old  materials.  If 
the  result  of  such  combination  is  a  new  article,  a 
better  article  or  a  cheaper  article,  than  that  produced 
before  by  the  old  method,  such  combination  is  an  in- 
vention or  manufacture  and  may,  therefore,  be  the 
subject-matter  of  a  patent.1  A  valid  patent  for  an 
entire  combination  for  a  process  gives  protection  to 
each  part  thereof,  which  is  new  and  material  for  that 
process.2  Again  an  arrangement  of  apparatus,  so 
constructed  as  to  bring  into  operation  a  well-known 
dynamic  agent,  so  as  to  produce  a  useful  effect  or  a 
result  of  apparent  utility,  constitutes  an  invention 
and  a  good  subject-matter  for  a  patent.  But  the 
combination  or  arrangement  must  be  new  in  the  sense 
of  having  required  the  exercise  of  the  inventive 
faculty,  or  thought  and  study. 

In  every  case  of  this  description,  says  Chelmsford 
L.C.,  one  main  consideration  seems  to  be  whether 
the  new  application  lies  so  much  out  of  the  tract  of 
the  former  use  as  not  naturally  to  suggest  itself  to  a 
person  turning  his  mind  to  the  subject,  but  to  require 
some  application  of  thought  and  study.3  Thus  a 
patent  cannot  be  granted  for  putting  known  contri- 
vances to  a  use  that  is  new  but  analogous  to  the  uses 
to  which  they  were  previously  put,  without  overcoming 
any  fresh  difficulties.4  As  Cockburn  L.C.J.  observes:6 
' f  The  question  in  every  case  is  one  of  degree,  whether 


1  Crane  v.   Price   i  Web.   P.C.  303.     The  Anti   Vibration   Incandescent 
Lighting  Co.   v.    Crossley  (1905)  22  R.P.C.  441. 

There  may  also  be  a  valid  patent  for  a  new  combination  of  materials- 
previously  in  use  for  the  same  purpose,  or  for  a  new  method  of  applying 
such  materials.  Hill  v.  Thompson  and  Foreman,  3  Mer.  622  s.c  ,  36  Eng- 
lish  Rep.  239;  cited  in  Elgin  Mills  Co.  v.  Muir  Mitts  Co.,  I.L.R.  17 
All.  490  (494) ;  Lakhpat  Rai  v.  Kishan  Das  (1918)  16  A.L,J.  941  ;  48  Ind. 
Cas.  450. 

2  W.   Butler  v.   Adamji  Bahura   I.L.R.  26  All.  96,  following  Parker s  v. 
Stevens  (1896)  L.R.  8  Eq.  358  at  p.  367. 

3  Penn'v.  Bibby,  L.R.  (1866)    2   Ch.  Ap.  Cases  127;  36  L.J.  Ch.  455; 
15  ly.T.  399;   15  W.R.  208;  Kinmond  v.  Jackson  (1877)  i    C.L.R.  66. 

*  In  re  Merten's  Patent  (1914)  31  R.P.C.  373;  Gaddv.  The  Mayor  of 
Manchester  (1892)  9  R.P.C.  516. 

6  Harwoodv.  Great  Northern  Railway  Co.  2  B.  &.  S.  208,  quoted  by 
Chelmsford  I/.C.  in  Penn  v.  Bibby  (r866)  2.  Ch.  Ap.  Cases  127  at  p.  136. 


the  amount  of  affinity  or  similarity  which  exists 
between  the  two  purposes  is  such  that  they  are  sub- 
stantially the  same,  and  that  determines  whether  the 
invention  is  sufficiently  meritorious  to  be  deserving 
of  a  patent.  "  What  will  constitute  the  merit  of  the 
invention  is  a  matter  of  some  difficulty.  In  some 
cases  it  has  been  urged  that  where  there  has  been  a 
long-standing  demand  for  a  certain  article  and  some 
one  succeeds  in  satisfying  the  demand,  that  in  itself 
argues  merit  in  the  invention.  But  this  view  does 
not  appear  to  have  found  favour ;  for  commercial 
success  may  often  be  due  to  adventitious  circum- 
stances and  cannot  furnish  a  safe  criterion  of  merit ; 
thus  we  get  back  to  the  principle  already  enunciated, 
viz.  an  invention  connotes  real  ingenuity  in  over- 
coming difficulties.1  The  attainment  of  a  better  result 
than  had  been  previously  attained  constitutes  a  new 
result  so  as  to  make  an  instrument  a  new  invention. * 
Further,  when  it  is  common  knowledge  that  certain 
things  have  certain  properties  and  act  in  a  certain 
way,  or  that  a  class  of  processes  yields  a  particular 
kind  of  result,  the  selection  of  the  best  of  such  class 
or  of  the  conditions  under  which  the  process  in  ques- 
tion will  yield  the  best  of  results  will  amount  to  a 
patentable  invention.  For  instance,  it  was  well  known 
that  all  solutions  of  potassium  cyanide  would  dissolve 
gold  out  of  its  ores  to  a  certain  extent.  It  was  found 
that  a  very  dilute  solution  was  far  superior  to  a  strong 
solution  and  it  was  held  that  the  selection  of  the  very 
dilute  solution  was  good  subject-matter  for  a  patent.3 
Again,  it  was  known  that  hydrated  oxides  of  iron 
would  absorb  sulphuretted  hydrogen  from  coal  gas. 
It  was  also  known  that  sulphuret  of  iron  produced 
by  the  action  of  sulphuretted  hydrogen  upon  hy- 
drated oxide  of  iron,  would  be  reoxidised  by  being 
exposed  to  the  action  of  atmospheric  air.  But  it  was 
not  known  that  when  the  sulphuret  was  produced  by 
exposure  of  hydrated  oxide  of  iron  to  the  action  of 


1  Gosnellv.  Bishop  (1888)  5  R.P.C.  155  ;  Lyon  v.  Goddard (1893)  icR.P.C. 
334- 

2  Thompson   v.  Moore  23  L.R.  Ir.  599.     See  also  Curtis  v.  Plait  35  LJ. 
Ch.  852  and  Proctor  v.  Bennis  36  Ch.  D.  740. 

3  Cassel  Gold  Extracting  Co.  v.  Cyanide  Gold  Recovery  Syndicate  (1895) 
12  R.P.C.  232  C.A. ;  Halsbury'  s  '  I<aws  of  England  '  Vol.  22,  p.  139. 


io8 

sulphuretted  hydrogen  mixed  with  coal  gas,  the  re- 
oxidation  of  the  iron  might  not  be  prevented  by  the 
cyanogen,  compounds  of  ammonia  and  tarry  matter 
which  would  be  mixed  with  it.  So  it  was  held  in  the 
same  case  that  a  patent  might  be  granted  for  re-oxid- 
ising the  iron  by  exposure  to  the  air  after  it  had 
been  used  in  the  purification  of  coal  gas. 

Adaptation  of  old  A  large  number  of  cases  turn  on  the  adaptation 
materials  or  old  of  old  materials  or  old  processes  to  new  cases,  but  in 
a  manner  which  although  involving  skill  does  not 
involve  ingenuity.  In  fact  every  adaptation  involves 
some  skill;  it  is  only  a  matter  of  degree.  But  in- 
genuity alone  in  the  sense  above  indicated  can  estab- 
lish for  the  article  or  the  process  the  claim  to  a  patent. 
Thus  the  use  of  solid  naphthaline,  an  article  already 
in  existence  for  enriching  gas,  could  not  be  the  subject- 
matter  of  a  patent  though  solid  naphthaline  had  not 
been  used,  the  use  of  other  varieties  of  naphthaline 
being  well  known  for  the  same  purpose.1  Similarly 
where  C  springs  had  been  formerly  employed  for  the 
back  of  a  carriage,  the  employment  of  them  for  the 
forepart  of  a  carriage  was  held  to  imply  no  ingenuity 
sufficient  for  a  patent.2  In  Thompson  v.  James  *  use  of 
hoops  made  of  steel  watch  springs  for  suspending  from 
the  waist  and  firming  a  petticoat  in  place  of  hoops 
of  whalebone,  cane  and  other  substances  which  had 
long  been  used  by  the  ladies  was  held  not  to  be 
patentable.  In  Rushton  y.  Craw  ley  *  the  plaintiff  had 
obtained  a  patent  for  the  use  of  animal  fibre,  by  pre- 
ference Russian  wool,  or  wool  of  a  coarse  texture 
in  the  manufacture  of  artificial  hair  to  be  made  up  as 
ladies'  head  dresses  and  for  upholstery,  and  other  like 
purposes.  Sir  R.  Mallins  V.C.  in  refusing  an  injunc- 
tion for  infringement,  observed  :  f '  The  use  of  a  new 
material  to  produce  a  known  article  is  not  the  subject 
of  a  patent,  but  there  must  be  some  invention,  some- 
thing really  new,  something  more  valuable  to  the 
public  than  the  simple  use  of  a  new  material  to  pro- 
duce a  known  article."  It  follows  that  not  every 


1  The  Albo-Carbon  Light  Co.  v.  Kidd  (1887)  4  R.P.C.  535.     See   also 
McLay  v.  Lawes  dx.  Co.  (1905)  22  R.P.C.  199. 

2  Morgan  v.  Windover  (1890)  7  R.P.C.  131. 
s  32  Beav.  570  s.c.  55  ljng.  Rep.  224. 

*  L.R.  (1870)  10  Kq.  522  at  p.  529. 


log 

adaptation  or  combination  is  a  fit  subject-matter  of 
a  patent.1  In  The  Elgin  Mills  Co.  v.  Muir  Mills  Co? 
the  inventor  claimed  as  the  subject-matter  of  a 
patent  "a  new  general  combination  of  a  tent"  by 
which  he  presumably  meant  a  combination  of  features 
found  in  previously  existing  tents  so  as  to  form  what 
was  practically  a  new  tent.  The  Court  quoting  the 
words  employed  in  Saxby  v.  Gloucester  Waggon  Co.6 
held  that  the  combination  in  question  did  not  require 
"  an  exercise  of  such  an  amount  of  skill  and  in- 
genuity as  to  entitle  it  to  the  protection  of  an  exclusive 
grant"  although  counsel  for  the  inventor  strenuously 
contended  that  the  new  tent  was  an  improvement 
on  pre-existing  tents  and,  therefore,  an  ( invention.' 
Thus  though  an  invention  includes  an  improvement 
it  does  not  by  any  means  follow  that  every  improve- 
ment is  an  invention. 

Under  Section  2  clause  (8)  of  the  Act,  invention « improvements 
includes  an  f  improvement. '  But  what  sort  of 
improvement  will  come  within  the  meaning  of  an 
invention  does  not  appear  from  the  Act.  For  a  clear 
understanding  of  the  essentials  of  a  patentable  im- 
provement we  have  to  resort  to  case-law.  There  is  a 
variety  of  cases  on  the  subject  but  questions  as  to 
subject-matter,  novelty,  utility  and  improvements 
have  been  discussed  in  these  cases  with  no  very  great 
regard  to  distinction  or  accuracy.  In  fact,  it  seems 
no  clear  line  of  demarcation  is  possible,  for  the  conno- 
tations of  the  several  terms  overlap  to  a  very  large 
extent.  It  is  clear,  however,  that  an  improvement 
involves  a  substantial  and  meritorious  advance  upon 
the  old  state  of  affairs,  whether  it  was  a  contrivance, 
a  process  or  method,  or  a  combination. 

Another  essential  factor  that  makes  an  invention 
patentable  within  the  meaning  of  the  Act  is  '  utility/  *  utility. 
Utility  has  not  been  defined  in  the  Act.  We  must, 
therefore,  again  turn  to  case-law  for  its  meaning.  It 
has  a  technical  significance  in  the  law  of  patents 
and  must  be  distinguished  from  commercial  utility 6 

1  Williams  v.  Nye  (1889)  7  R.P.C.  37;  Wood  v.  Raphael  (1896)  13  R.P. 
C.  730;  The  British  United  Shoe  Machinery  Co.  v.   Fussell  (1908)25  R.P.C. 
631- 

2  I.I,.R.  17  All.  490  (496). 

3  L.R.  7  Q.B.D.  305  at  p.  312.  *  Vide  p.  96  supra. 

&  The  Badische  Anilin  and  Soda  Fabrik  v.  Levinstein  (1887)  4  R.P.C. 


no 


When  the  re- 
quirements of  an 
*  invention '  are 
satisfied  the 
applicant  must 
next  satisfy 
the  Crown  that 
he  is  the  first 
inventor. 


or  the  quality  of  securing  advantage  measurable  by 
money  value.  On  analysis,  utility  appears  to  signify 
the  quality  or  capability  of  securing  a  particular  end 
or  object  in  view  ;  in  other  words  when  a  method, 
process,  combination,  or  contrivance,  secures  the 
object  which  it  has  in  view,  it  is  said  to  have  utility. 
Utility  in  the  law  of  patents  does  not  mean  either 
abstract  utility  or  comparative  or  competitive  utility, 
or  commercial  utility,  but,  as  applied  to  an  invention 
it  means  that  the  invention  is  better  than  what  was 
previously  known  on  the  subject;  it  may  be  better  in 
some  respects  only  and-not  necessary  in  every  respect. 
For  instance,  an  article  which  is  good,  though  not  so 
good  as  that  previously  known  but  which  can  be  pro- 
duced more  cheaply  by  another  process,  is  better  in 
that  it  is  better  in  point  of  cost  although  not  so  good 
in  point  of  quality.  An  invention  is  useful  when  the 
public  are  thereby  enabled  to  do  something  which  they 
could  not  do  before  or  to  do  in  a  more  advantageous 
manner  something  which  they  could  do  before.1  The 
test  of  utility  is  whether  the  object  sought  to  be 
attained  by  the  patentee  can  be  attained  and  is  practi- 
cally useful  at  the  time  when  the  patent  is  granted. 
"  Utility,"  Lindley  Iv. J.  observes,2  "  is  often  a  question 
of  degree  and  always  has  reference  to  some  object. 
Useful  for  what  ?  is  a  question  which  must  always 
be  asked,  and  the  answer  must  be,  Useful  for  the 
purposes  indicated  by  the  patentee."  A  very  small 
amount  of  utility  is  sufficient  to  support  a  patent.  * 

The  above  cases  go  to  show  what  constitutes  an 
'invention.'  If  the  requirements  of  an  'invention' 
are  satisfied  the  applicant  for  the  patent  may  upon 
that  footing  declare  that  he  is  the  '  true  inventor.' 
But  that  is  not  all.  He  has  also  to  satisfy  the  Crown 
that  he  is  the  '  first  inventor. '  *  This  is  in  effect  the  same 

449  ;  The  Sunlight  Incandescent  Gas  Lamp  Co.  v.  The  Incandescent  Gas  Light 
Co.  (1897)  14  R.P.C.  457- 

1  Welsbach  Incandescent  Gas  Light  Co.  v.  New  Incandescent  (Sunlight 
Patent)  Gas  Light  Co.  17  R.P  C.  237;  (1900)  i  Ch.  843  at  p.  850. 

*  Lane  Fox  v.  Kensington  and  Knights  Bridge  Electric  Lighting  Co.  (1892) 
3  Ch.  424  at  p.  431.  See  also  Morgan  v.  Seaward  2  M.  &.  W.  5445.0.  150 
IJng.  Rep.  874. 

*  (1900)    i  Ch.    843,  supra;     Otto  v.    Linford   (1881)    46   L.T.N.S.  35; 
Morgan  v.  Seaward  2.  M.  &  W.  544  s.c.  150  Eng.  Rep  874. 

4  In  the  case  of  an  invention  communicated  from  abroad  the  true  and 
first  importer  is  in  the  same  position  as  the  true  and  first  inventor ;  but  it 
is  essential  that  the  communication  of  the  invention  to  the  importer  was 


Ill 

as  saying  that  the  invention  is  not  in  use  by  any 
other  person/  in  other  words  he  must  establish  the 
' novelty'  of  the  invention.'2  Here  there  is  often  a 
serious  confusion  caused  by  the  word  '  novelty '  being 
used  in  different  senses.  Strictly  speaking,  any  inven- 
tion is  a  new  invention,  or  else  it  is  no  invention.  So 
far  as  this  aspect  of  novelty  is  concerned,  we  have 
dealt  with  it  in  detail.  Suppose  an  inventor  by  exer- 
cise of  his  own  skill  and  ingenuity  has  really  turned 
out  something  original.  So  far  as  he  is  aware,  it  is 
cnew/  But  it  so  happens  that  it  is  already  in  use 
by  some  other  person  who  comes  forward  and  claims 
it  as  his  own  invention.  Can  the  former  get  a  patent 
for  it  ?  No.  Subjectively,  if  I  may  be  permitted  to 
use  the  antithesis,  it  may  be  new,  but  objectively  it 
is  not.  In  fact  it  may  be  new,  so  far  as  he  is  con- 
cerned, but  the  law  wants  something  more  in  order 
that  it  may  be  the  subject-matter  of  a  patent,  namely, 
that  it  was  not  previously  in  use  by  any  other  person. 
When,  therefore,  the  authorities  lay  down  that  the 
subject-matter  of  the  patent  must  have  novelty,  one 
has  to  be  prepared  for  the  use  of  the  word  in  either 
of  the  two  significations  above  mentioned.  Thus  in 
Patterson  v.  Gas  Light  Co.*  it  is  held  that  the  subject- 
matter  should  be  novel.  If  the  public  once  become 
possessed  of  an  invention  by  any  means  whatsoever, 
no  subsequent  patent  of  it  can  be  granted  either  to 
the  first  inventor  or  any  person.  The  prior  publica- 
tion may  have  been  made  by  the  inventor  himself ;  Prior  use  in 
use  by  him  or  any  other  member  of  the  public  has 
the  same  effect  in  invalidating  a  patent.  Thus  if  an 
article  is  manufactured  openly  that  fact  is  sufficient 
to  avoid  a  subsequent  patent ;  it  is  not  even  necessary 
that  a  single  piece  should  have  been  sold.*  But  the 

made  outside  the  realm,  in  other  words,  the  importation  must  strictly  be 
from  outside  the  realm.  Brown  v.  Annandale  &  Son  (1842)  i  Web.  P.C. 
433;  Roebuck  v.  Stirling  &>  Son  (1774)  i  Web,  P.C.  45  ;  Walton  v.  Bateman 
(1842)  i  Web.  PC.  613.  See  also  Edgebury  v.  Stephens  (1668)  2  Salk  447, 
s.c.  91  Eng.  Rep.  387 ;  Carpenter  v.  Smith  (1841)  i  Web.  P.C.  540  s.c. 
152  Eng  Rep.  127;  Nickels  v.  Ross  (1849)  8  C.B.  679  s.c.  137  Eng.  Rep. 
674;  Plimpton  v.  Malcolmson  (1876)  3  Ch.  D.  531,  which  is  referred  to 
and  discussed  in  Sheen  and  another  v  Johnson  I.L.R.  2.  All.  368  at  p.  377. 

1  Norton  v.   W.  H.  Barker  cS>  Son  C.A.  30  R.P.C.  741 ;  Simplex  Concrete 
Piles  Ltd.  v.  /.  W.  Stewart  30  R.P.C.  205. 

2  Vide  section  38  of  the  Act. 

3  3  App.  Cas.  239,  244. 

*  Mullins  v.  Hart  (1852)  3  Car  &  Kir  297  ;  Oxby  v.  Holden  (1860)  8.  C.B. 


uSe 


112 

use  must  be  a  public  use,  by  which  is  meant  not  neces- 
sarily use  by  the  public,  but  use  in  public.  This  has 
to  be  understood  with  reference  to  the  doctrine 
already  referred  to,  namely,  that  the  Crown  can  grant 
patents  only  for  the  consideration  that  after  the 
period  of  the  patent  expires,  the  invention  will  become 
the  property  of  the  public  and  thus  conduce  to  the 
public  weal.  If,  however,  it  is  already  public  proper- 
ty the  consideration  does  not  exist  and,  therefore, 
the  patent  cannot  be  granted.  Where,  for  instance, 
a  lock  had  been  used  on  a  man's  gate  adjoining  a 
public  road,  it  was  held  that  it  was  public  use.1 
Where  the  article  is  openly  exhibited  in  a  shipbuild- 
ing yard  and  no  precautions  taken  to  secure  secrecy,2 
it  clearly  amounts  to  public  use  within  the  meaning 
Citutes  of  the  law.  The  circumstances  of  the  case  must  be 
looked  at  in  order  to  make  out  whether  they  can 
amount  to  public  use  or  not.  Where  a  few  months 
before  the  date  of  a  patent  for  an  improvement  in 
paddlewheels,  two  pairs  of  the  wheels  were  made  for 
the  plaintiff  (to  whom  the  patent  was  afterwards 
assigned)  by  an  engineer  and  his  workman  at  his  own 
manufactory,  under  the  directions  of  the  patentee, 
and  under  an  injunction  of  secrecy,  the  engineer  being 
paid  for  them  by  the  plaintiff,  and  when  finished  they 
were  taken  to  pieces,  packed  up,  and  shipped  for  a 
foreign  port,  where,  according  to  the  plaintiff's  direc- 
tions, they  were  put  together  and  used  (after  the 
date  of  the  patent)  in  steam  boats  belonging  to  a  com- 
pany, of  which  the  plaintiff  was  the  manager  and 
principal  shareholder,  it  was  held  that  this  was  not 
such  a  publication  of  the  invention  as  to  avoid  the 
patent.3  It  follows  that  '  '  if  a  person  has  invented 
anything  which  is  the  subject  of  a  patent,  and  has 
kept  it  to  himself  or  communicated  it  privately  to  one 
or  two,  in  fact  has  not  made  it  public  knowledge,  if 
any  one  else  discovers  that  invention  it  is  new,  that 


(N.S.)  666  s.c.  141  Eng.  Rep.  1327;    Beits  v.  Neilson  (1868)  3  Ch.  A.   429, 
436. 

1  Carpenter  v.  Smith  (1842)  9  M.  &  W.  300  at  p.  304;    i    W  P.C.    540 
s.c.   152  Eng.  Rep.   127;     Stead  v.  Anderson  2  W.P.C.   147,   148;  Taylor's 
Patent  13  R.P  C.  482. 

2  Life  Boat  Co.  v.  Chambers  Brothers  &  Co.  8  R.P.C.  418. 

3  Morgan  v.  Seward  2  M.  &  W.  544  ;  M.  &  H.  55  ;  6  I/.J.  Ex.  153:1  Jur. 
527  s.c.  150  Eng.  Rep.  874. 


is  to  say,  new  in  the  sense  that  the  first  invention  has 
not  been  published.1"  A  necessary  and  an  unavoid- 
able disclosure  of  an  invention  to  others,  if  made  in 
the  course  of  mere  experiments,  is  not  such  a  publica- 
tion as  will  avoid  the  subsequent  grant  of  a  patent, 
though  the  same  disclosure,  if  made  in  the  course  of 
profitable  use  of  an  invention  previously  ascertained 
to  be  useful  would  be  publication ;  but  an  experiment 
performed  in  the  presence  of  others,  which  not  only 
turns  out  to  be  successful,  but  actually  beneficial  in 
the  particular  instance,  is  not  necessarily  a  publica- 
tion, so  as  to  constitute  a  gift  of  the  invention  to 
the  world.2  In  the  case  of  Betts  v.  Menzies 3  an  applica- 
tion for  a  patent  was  made  in  respect  of  improve- 
ment in  making  capsules.  As  there  was  some  delay 
in  the  office,  the  applicant  manufactured  a  quantity 
of  the  capsules  between  the  date  of  application  and 
that  of  the  issue  of  the  letters  patent.  They  were 
made  by  his  own  workmen  and  were  not  intended  for 
sale  before  the  patent  was  granted,  nor  were  they 
sold.  It  was  held  that  this  did  not  invalidate  the 
patent.4  If  the  inventor  of  a  machine  lends  it  to 
another  in  order  to  have  its  qualities  tested,  and  that 
person  uses  it  for  some  weeks  in  a  public  work-room, 
this  is  not  giving  the  invention  such  publicity  as  to 
deprive  the  inventor  of  his  right  to  obtain  letters 
patent  for  it.5  But  the  test  of  public  knowledge  such 
as  would  avoid  a  patent  is  rather  a  stringent  one. 
It  must  be  knowledge  equal  to  that  required  to  be 
given  by  a  patent,  that  is,  such  knowledge  as  will 
enable  the  public  to  perceive  the  very  discovery  and 
to  carry  the  invention  into  practical  use.  The  publica- 
tion, therefore,  which  would  have  the  effect  of 
invalidating  a  patent  must  be  one  from  which  a  person 
with  ordinary  knowledge  would  be  able  practically 
to  apply  the  discovery  without  further  experiment.6 

1  Per  Lord  Bramwell  in  Hills  v.  London  Gas  Light  Co.  (1858)  5  H.  &  N. 
336 ;  see  also  In  re  Dolland's  case  (1766)  i  W.P.C.  43. 

2  Newall  v.    Elliot   4  C.B     (N.S.)   269;    s.c.    140   Eng.    Rep.    1087;    27 
L.J.   C.P.   337;    4    Jur.   (N.S.)   562;    Elias  v.  Grovesend  Tinplate  Co.   (1890) 
7  R.P.C.  455. 

s  (1857.)  3  Jur.  (N.S.)  885. 
*  22  LJ.Q.B.  361  ;   5  Jur.  (N.S.)  1164. 
&  Bentley  v.  Fleming  i  Car.  K.  587. 

6  Hills  v.  Evans  4  De.  G.P.  &  J.   288;  31    L.J.  Ch.  457;    8   Jur.   (N.S). 
525  6L.T.  90. 

15 


H4 

It  is  not  enough  that  the  invention  has  been  published ; 
it  must  have  been  made  public  to  such  an  extent  that 
a  knowledge  of  it  may  be  assumed  among  persons  in 
the  trade  or  interested  in  the  matter.1  Public  knowl- 
edge, however,  irrespective  of  user  seems  to  be 
enough. '  Thus  in  Patterson  v.  Gas  Light  &  Coke  Co.'1  it 
was  held  that  if  an  invention  without  fraud  becomes 
known  to  the  public,  no  subsequent  patent  can  be 
granted  for  it.  It  is  not  necessary  that  it  should 
have  been  used  by  the  public  as  well  as  known  to  the 
public.  There  are  a  few  statutory  exceptions  to  this 
rule  as  to  prior  use  and  publication.  Section  40 
deals  with  these  exceptions. 

y-Novelty  ^ow   ^at  t^ie  terms  invention,  subject-matter, 

*  utility  and  novelty  have  been  discussed  it  will  be  pro- 
fitable to  consider  what  part  is  played  in  the  law  of 
patents  by  each.  As  observed  already  they  overlap 
each  other  at  certain  points ;  none  the  less  it  is  essen- 
tial to  assign  their  respective  functions  as  far  as 
possible.  First  of  all,  an  invention  must  be  an  inven- 
tion within  the  meaning  of  the  Act,  as  above  describ- 
ed.8 If  it  is,  then  and  then  alone  is  it  a  fit  subject- 
matter  for  a  patent.  If  it  satisfies  the  requirements 
of  an  "  invention  "  and  thereby  becomes  a  fit  subject- 
matter,  it  implies  that  it  has  utility,  for  it  will  be 
remembered  that  utility  in  the  common  acceptation 
of  the  term  is  not  what  is  meant  by  utility  in  the  law 
of  patents.  In  the  ordinary  sense  of  the  term  we 
may  say  "useful  is  that  useful  does/'  But  when 
applied  to  the  law  of  patents,  usefulness  or  utility 
has  a  further  signification,  viz.,  that  it  must  amount  to 
an  advance  upon  the  then  state  of  knowledge  on  the 
subject.  Viewed  in  this  light,  the  line  of  demarcation, 
if  any,  between  a  thing  possessing  utility  and  an 
invention,  seems  to  be  an  illusory  one.  In  other 
words,  a  patentable  invention  or  an  invention  which 
is  a  fit  "  subject-matter  "  for  patent  must  necessarily 
possess  utility.  Novelty,  however,  stands  on  a  differ- 
ent footing.  It  will  be  remembered  that  novelty,  in 

1  Plimpton  v.  Spiller  47  I/.J.  Ch.  211  ;  6  Ch.D.  412 ;  37  Iv.T.  56  ;  26  W.R. 
285. 

*  47  lyj.  Ch.  402;  (1877)  3  App.  Cases  239;  38  L.T.  303;  26  W.R.  482 
H.L. 

3  See  p.  1 1 1  supra. 


the  law  of  patents,  has  a  technical  signification.  It 
means  absence  of  prior  user  in  public.  The  only 
case  in  India  in  which  subject-matter  and  novelty 
have  been  discussed  with  reference  to  validity  of  pat- 
ents is  that  of  B hat hey  Sundararayan  and  others  v. 
LaguduvaRamudu.1  In  that  case  Wallis,  C.  /.,  observed : 
'  It  is  quite  clear  from  a  perusal  of  the  Patent  Act  of 
1888,  and  the  same  conclusion  follows  from  a  perusal 
of  the  present  Patent  Act,  the  Indian  Patents  and 
Designs  Act,  II  of  1911,  that  the  framers  of  these  Acts 
did  not  intend  that  there  should  be  any  separate 
defence  to  the  grant  of  a  patent  on  the  ground  of 
want  of  subject-matter  as  distinguished  from  want  of 

novelty The  Legislature,   if  I  may  say  so,  I 

think  rightly  took  the  view  that  any  defence  which 
had  been  raised  under  that  head  might  appropriately 
be  brought  under  the  head  of  want  of  novelty.  Con- 
sequently, we  are  of  opinion  that  it  is  not  open  to 
the  appellants  in  these  cases  to  raise  any  defence  of 
want  of  subject-matter  as  distinguished  from  want 
of  novelty."  With  great  respect  it  is  submitted 
that  this  proceeds  upon  a  misapprehension  of  the 
Indian  Patents  and  Designs  Act  of  1911.  The  con- 
tents of  the  notion  of  subject-matter  and  those  of 
novelty,  according  to  the  law  of  patents,  are  entirely 
different  and,  therefore,  the  defences  on  the  two  heads 
must  also  be  separate.  That  the  L,aw  provides  for 
such  separate  defence  is  clear  from  the  terms  of  sec- 
tions 26  and  29  of  the  Act.  Section  26,  clause  (a], 
provides  that  want  of  utility  is  a  sufficient  ground  for 
revocation  of  a  patent.  It  will  be  observed  that 
utility,  within  the  meaning  of  the  law,  inevitably 
brings  in  what  is  technically  called  subject-matter. 
Moreover,  section  26,  clause  (b),  provides  for  another 
ground  for  such  revocation,  namely,  that  the  invention 
in  question  was  not  a  new  '  invention,'  within  the  mean- 
ing of  the  Act,2  in  other  words,  that  it  did  not  pos- 
sess subject-matter.  Thus  subject-matter  seems  un- 
mistakeably  to  have  been  provided  for  in  the  Act 
as  a  ground  for  validity  of  patents,  although  the  term 
'  subject-matter/  so  common  in  English  case-law  on 


27  Ind.  Cas.  996  at  p.  997. 

In  this  connection,  see  sections  2  (8)  and  5  (e)  of  the  Act. 


n6 


Essentials  of 

complete 

specification. 


the  subject,  has  not  been  employed.  Novelty  has 
also  been  provided  for  in  clause  (b)  of  section  26,  in- 
asmuch as  the  invention  to  be  patentable  must  be 
'  new.' L 

The  first  essentials  of  complete  specification  are 
sufficiency,  certainty  and  particularity.  A  specifica- 
tion must  not  omit  these  essential  matters.  The 
cases  cover  a  wide  variety,  but  they  all  establish 
the  above  few  tests  as  the  only  legitimate  ones. 
Thus  it  has  been  held  that  the  test  of  a  sufficient 
specification  is  whether  it  would  enable  an  ordinary 
wrorkman,  exercising  the  actual  knowledge  common 
to  the  trade,  to  make  the  machine.  It  ought  to  tell 
the  workman  how  to  do  it,  but  it  need  not  tell 
him  every  detail.2  The  specification  "  ought  to  be 
framed  so  as  not  to  call  on  a  person  to  have  recourse 
to  more  than  those  ordinary  means  of  knowledge  (not 
invention)  which  a  workman  of  competent  skill  in  his 
art  and  trade  may  be  presumed  to  have.  You  may 
call  upon  him  to  exercise  all  the  actual  existing 
knowledge  common  to  the  trade,  but  you  cannot  call 
upon  him  to  exercise  anything  more.  You  have  no 
right  to  call  upon  him  to  tax  his  ingenuity  or  inven- 
tion,3 In  order  to  support  a  patent  the  specification 
should  be  so  clear  as  to  enable  all  the  world  to  use 
the  invention  as  soon  as  the  term  for  which  it  has 
been  granted  is  at  an  end.*  The  specification  of  a 
patent  is  bad,  if  a  skilled  mechanic  would  not  without 
performing  a  series  of  experiments  be  able  to  con- 
struct a  machine  from  the  description.6  If  the  speci- 
fication does  not  mislead  and  contains  enough  to 
enable  the  workman  to  do  that,  then  it  is  sufficient.6 


1  The  above  view  is  supported  by   a   reference  to   the   Statement    of 
Objects  and  Reasons  of  Act  II  of  1911,  paragraph  7  (e)  :     "  Defendants  in 
infringement  suits  will  be  allowed  in  all  cases  to  use  the  natural  ground  of 
defence  by  pleading  non-validity  and  non-novelty  of  the  patent." 

2  Plimpton  v.  Malcolmson,  45  I/.J.  Ch.  505;  3  Ch.D.    531 ;    34  L.T.  340. 
"  The  fact  that  the  workman  may  use  a  wrong  tool  when  he  has  a  right  one, 
which  a  little  thought  will  lead  him  to  see  ought  to  be  used,   does  not  war- 
rant the  inference  that  a  specification  is  bad  if  it  does  not  tell  him  which  tool 
to  use  " — Per  Lindley  L.J.   in   The  Edison  and  Swan  Light  Co.  v.  Holland 
(1889)  6  R.P.C.  243  at  p.  282. 

3  Per  Baron  Alderson  in   Morgan  v.  Seaward,  2  M.  &  W.  544  s.c.   150 
Bng.  Rep.  874,  cited  by  Jessel  M.R.  in  Plimpton  v.  Malcolmson  (1876)  I/.R. 
3  Ch.  D.  531  at  p.  569. 

*  Newbery  v.  James  2  Mer.  446  at  p.  451  s.c.  35  Bng.  Rep.  ion. 

5  Wegman  v.  Corcoran,  (1879)  13  Ch.  D.  65. 

6  Plimpton  v.  Malcolmson  L.R.  3  Ch.  D.  531  at  p.  570. 


A  patent  is  void  if  the  specification  is  ambiguous  or 
gives  directions  which  tend  to  mislead.1  If  a  speci- 
fication contains  an  untrue  statement  in  a  material 
circumstance  of  such  a  nature  that,  if  literally  acted 
upon  by  a  competent  workman  it  would  mislead  him, 
and  cause  the  experiment  to  fail,  the  specification  is 
bad,  and  the  patent  invalidated,  although  a  com- 
petent workman  acquainted  with  the  subject,  would 
not  be  misled  by  the  error,  but  would  correct  it  in 
practice.2  Where  a  specification  claimed  to  effect  a 
particular  object  by  either  of  two  alternative  proces- 
ses, one  of  which  was  found  to  be  incapable  of  effect- 
ing the  object  and  where  evidence  showed  that  no 
skilled  practical  workman  would  be  misled,  inasmuch 
as  he  would  know  that  only  one  of  the  two  processes 
would  be  effectual  and  the  other  one  would  have  to 
be  rejected,  it  was  held  notwithstanding  that  the 
specification  was  defective  and  the  patent  void.3  Not 
only  must  the  specification  be  intelligible,  but  it  must 
not  attempt  too  much,  i.e.,  it  must  not  attempt  to 
cover  more  than  that  which  is  the  only  proper  subject 
for  the  protection  of  a  patent.  As  Lord  Eldon  ob- 
serves, "if  a  patentee  seeks  by  his  specification  any 
more  than  he  is  strictly  entitled  to,  his  patent  is 
thereby  rendered  ineffectual  even  to  the  extent  to 
which  he  would  be  otherwise  fairly  entitled."  4 

Apart  from  the  three  requirements  above  men-  Good  faith, 
tioned,  viz.,  sufficiency,  certainty  and  particularity, 
the  specification  must  satisfy  another  equally  impor- 
tant test,  and  that  is,  good  faith.  The  patentee  must 
suppress  or  withhold  nothing.  It  may  be  that  he 
discloses  enough  in  his  specification  to  enable  a  work- 
man skilled  in  his  trade  to  make  use  of  the  invention 
according  to  the  directions  given,  but  he  may  withhold 
some  item  of  information  which  gives  him  an  advant- 
age over  others  in  using  the  invention.  This  will 
render  the  specification  bad.  Thus  where  a  patentee 


1  Turner  v.  Winter  i  T.R.  602  s.c.  99  Eng.  Rep.   1274.     See  also  Rex  v. 
Arkwright,  Bull.  N.P.  77:     "If  the  specification  be,  in   any  part  of   it, 
materially  false  or  defective,  the  patent  is  void." 

2  Neilson  v.  Harford  8  M.  &  W.  806 ;  n  LJ.  Ex.  20;  s.c.  151  Eng.  Rep. 
1266. 

3  Simpson  v.  Holliday  35  Z,J.  Ch.  811 ;   L.R.    i    H.I,.  315. 

»  Hill  v.    Thompson  and   Foreman   3   Mer.  622  at    p.  629  s.c.  36  Eng. 
Rep.  239. 


n8 


Construction  of 
specifications. 


withheld  the  information  that  tallow  could  be  advan- 
tageously used  for  making  steel  trusses,  the  subject- 
matter  of  the  patent,  and  it  was  proved  that  he 
himself  used  tallow  to  facilitate  his  own  work,  it  was 
held  that  the  specification  was  bad  for  want  of  bona 
fides.1  In  Wood  v.  Zimmer,1  it  was  similarly  found 
that  the  patentee  had  withheld  the  information  that 
by  putting  aqua  fortis  into  the  boiler  the  method  of 
making  verdigris,  which  was  the  subject-matter  of  the 
patent,  was  considerably  facilitated,  and  that  he  him- 
self used  clandestinely  to  employ  aqua  fortis  for  the 
purpose,  the  specification  was  held  to  be  bad.  Where, 
however,  there  is  no  want  of  bona  fides }  the  mere  fact 
that  the  patentee  has  described  four  processes  of 
dyeing  and  printing,  of  which  only  one  is  proved  to 
have  any  practical  value,  does  not  vitiate  the  speci- 
fication on  the  ground  that  he  should  have  given 
specific  directions  how  to  produce  the  best  shade  of 
colour.  As  observed  by  Lord  Halsbury  "upon  the 
principle  contended  for  each  shade  must  not  only  be 
shown  but  its  excellence  or  popularity  must  be  dis- 
tinguished separately  by  the  patentee.  This,  as  it 
appears  to  me,  reduces  the  obligation  supposed  to  press 
upon  the  patentee  to  an  absurdity."  Nor  will  the 
specification  be  bad  on  the  ground  that  the  patentee 
has  not  disclosed  the  best  method,  if  subsequent  to 
the  grant  he  discovers  a  better  method,  for  the  essence 
of  the  objection  is  want  of  bona  fides. 

As  to  the  construction  of  specification  the  rule 
is  to  construe  the  words  according  to  their  proper 
meaning,  unless  there  is  something  in  the  context  to 
show  that  a  different  construction  ought  to  be  made.4 
This  fact  may  be  substantiated  by  evidence.6  Again, 

i  Anonymous  W.P.C.  i75n. 

«  W.P.C.  44,  82n.  ;  Holt  (N.P.)  58;  5.0.17  R.R.  605.  See  also  The 
British  Dynamite  Co.  v.  Krebs  (1896)  13  R.P  C.  190;  Health  v.  Unwin  (1850) 
2  W.P  C.  227. 

3  Badische  Anilin   and  soda   Fabrik   v.   Ivan  Levinstein,  L.R.    12   A. 
C.  710  at  p.  716. 

4  Thus  where  the  word  '  malt '  was  used  not  in  its  usual  sense,  viz.,  that 
of  an  article  used  in  the  brewing,  but  only  in  the  colouring  of  beer,  and  it 
was  contended  that  the  purpose  need  not  be  mentioned  in  the  ground,  it 
was  held  that  if  in  any  particular  case  the  mention  of  the  purpose  be  neces- 
sary to  explain  the  words  previously  used,    to   shew  that  they  were   not 
used  in  their  ordinary  and  obvious  sense  but  in  a  sense  limited  and  confined 
to    that  particular   purpose,   the   purpose   ought  to  be   mentioned.     R.v. 
Wheeler,  2  B.  &  A.  345  at  p.  352  s.c.  106  E'ng.  Rep.  392. 

5  Elliott  v.  Turner  2.  C.B.  466;   15  I,J.  C.P.  49.  s.c.    135  Eng.  Rep.  1019. 


it  has  been  held  that  the  words  used  in  a  patent  must 
be  construed  like  the  words  of  any  other  instrument, 
in  their  natural  sense,  according  to  the  general  pur- 
pose of  the  instrument  in  which  they  are  found.1 

Under  the  statute  the  patentee  has  the  exclusive  Term  of  Patent, 
privilege  of  making,  selling  and  using  the  invention 
throughout  British  India  and  of  authorising  others  to 
do    so.1     This    privilege    continues   for    a  period    of 
fourteen  years  from  the  date  of  the  patent,  unless  the 
period  is  extended  under  special  circumstances.3     If 
a  patent  is  obtained  fraudulently  by  a  person  who  is 
not  the  true  and  first  inventor  but  who  puts  himself 
forward  as  such,  and  it  appears  afterwards  that  the 
true  and  first  inventor  is  another  person,  the  patent 
is  liable  to  be  revoked  and  on  the  application  of  the 
true  and  first  inventor  (or  his  legal  representative  or 
assign)  the  Controller  may  grant  to  him  a  patent  in 
lieu  of  and  bearing  the  same  date  as  the  patent  so 
revoked,  for  any  invention  comprised  in  the  revoked 
patent  to  which  he  is  entitled.     Sec.  13,  sub-sec.  (2), 
which  lays  down  this  provision  says,  the  revocation 
may  be  on  the  ground  of  fraud  "  or  any  other  ground." 
This  expression  "  or  any  other  ground"  is  introduced 
to  meet  cases  of  hardship    arising  in  circumstances 
akin  to  fraud,  but  not  falling  within  the  legal  defini- 
tion of  fraud.     Section   15   provides  for  the  excep- 
tional  cases  in  which  the  term  of  patent  may  be 
extended.     A  patentee  may,  after  advertising  in  the 
prescribed  manner  his  intention  to  do  so,  present  a 
petition  to  the  Governor-General  in  Council  praying 
that  his  patent  may  be  extended  for  a  further  term, 
but  such  petition  must  be  left  at  the  office  at  least 
six  months  before  the  time  limited  for  the  expiration 
of  the  patent  and  must  be  accompanied  by  the  pres- 
cribed fee.     Where  such  a  petition   is  presented^  the 
Governor-General  in  Council  may,   as  he  thinks  fit, 
dispose  of  the  petition  himself  or  refer  it  to  a  High 
Court  for  decision      Any  person  may  give  notice  to 
the  Controller  of  his  objection  to  the  extension.     If 
the  petition  be  referred  to  a  High  Court,  then  on  the 
hearing  of  such  petition  the  patentee  and  any  person 

!  Clark  v.  A  die  46  LJ.  Ch.  598 ;  2  A.C.  423  ;  37  L.T.i  25  ;  W.R.  45. 
*  Sec.  14.  3  Sec.  15. 


120 


who  has  given  notice  shall  be  made  parties  to  the 
proceeding  and  the  Controller  shall  be  entitled  to 
appear  and  be  heard.  The  Court  in  considering  its 
decision  must  have  regard  to  the  nature  and  merits 
of  the  invention  in  relation  to  the  public,  to  the  pro- 
fits made  by  the  patentee  as  such,  and  to  all  the 
circumstances  of  the  case.  If  it  appears  to  the  Gover- 
nor-General in  Council  or  to  the  High  Court  that  the 
patent  has  been  inadequately  remunerated  by  his 
patent,  the  Governor-General  in  Council  or  the  High 
Court,  as  the  case  maybe,  may  by  order  extend  the  term 
of  the  patent  for  a  further  term  not  exceeding  seven, 
or  in  exceptional  cases  fourteen,  years,  or  may  order 
the  grant  of  a  new  patent.  To  entitle  a  patentee,  or 
his  assignee,  to  an  extension  of  the  term  of  letters 
patent  he  must  establish  three  things ;  first,  the  merit 
of  his  invention  ;  secondly,  that  the  parties  interested 
Grounds  on  which  had  done  all  in  their  power  to  bring  the  invention 
into  public  use  and  to  turn  it  to  advantage ;  and, 
thirdly,  that  from  circumstances  beyond  their  control 
they  had  been  unable  to  obtain  adequate  remunera- 
tion.1 The  merit  and  utility  of  the  invention,  the  merit 
of  the  petitioner  in  patronising  an  ingenious  inventor, 
and  liberally  expending  money  to  introduce  the  inven- 
tion, the  amount  of  profit  not  being  greater  than  the 
ordinary  profit  on  capital  employed  in  similar  trades, 
the  annoyances,  anxiety  and  cost  of  litigation  are  seve- 
ral grounds  for  consideration  in  recommending  an 
extension.*  But  it  is  in  every  case  essential  for  the 
petitioner  to  establish  that  the  invention  is  of  consider- 
able merit  and  of  public  utility,  and  that  it  has  brought 
an  inadequate  remuneration.3  The  non-reduction  of 
the  patent  into  practical  public  utility  is  the  strongest 
evidence  against  merit  and  utility.*  Indeed,  the  fact 
of  an  invention,  not  getting  into  general  use,  is  a 
presumption  against  its  utility.  So  an  extension  of 
the  term  of  patent  must  be  refused  although  the  profits 
derived  from  the  patented  article  are  less  than  the 


Extension  of  the 
term  of  letters 
patent. 


extension  may  be 
granted. 


1  In   re   Markwtck's    Patent    13    Moore   P.C.    310;    8  W.R.   333;    In  re 
Poulsen's  Patent  30  R.P.C.  597. 

2  In  re  Whitehouse's  Patent  2  Moore  P.C.  496. 

3  In  re  McDougall's   Patent  37  L.J.P.C.,    17;  L.R.  2   P.C.    i;   5    Moore 
P.C.  (N.S.)  i  ;  In  re  Ritchie's  Patent  31  R.P.C.  i. 

*  In  re  Pinkus'  Patent  12  Jur.  233. 


121 

expenditure  incurred  upon  the  patent,  the  utility  of 
the  invention  being  small.1  To  re-state  the  grounds 
on  which  extension  of  patents  are  granted,  they  are, 
first,  to  reward  the  inventor  for  the  peculiar  ability 
and  industry  he  has  exercised  in  making  the  dis- 
covery ;  secondly,  to  reward  him,  because  some  great 
benefit  of  an  unusual  description  has  been  conferred  by 
him  upon  the  public  through  the  invention  itself  ;  or, 
thirdly,  because  the  inventor  has  not  been  sufficiently 
remunerated  by  the  profit  derived  from  his  strenuous 
exertions  to  make  the  invention  profitable.  All  these 
grounds  proceed  on  the  supposition  that  the  invention 
is  a  new  and  useful  invention.  But  where  an  inventor 
intentionally  delays  for  a  great  length  of  time  attempt- 
ing to  put  the  invention  into  practice,  those  reasons 
for  a  prolongation  of  the  patent  cannot  be  relied  upon 
by  him,  unless  he  shows  some  reasonable  ground, 
such  as  want  of  funds,  for  the  delay.*  A  patentee 
seeking  the  grace  and  favour  of  the  Crown,  in  apply- 
ing for  an  extension  of  the  term  of  letters  patent,  is  bound 
to  bring  his  accounts  before  the  court  in  such  a  shape 
as  to  leave  no  doubt  what  the  remuneration  has  been 
that  he  has  received  from  the  patent.3  The  account 
of  profit  and  loss  of  the  patentee  in  working  a  patent 
ought  to  be  clear  and  precise ;  and  it  is  the  duty  of 
the  patentee,  if  engaged  in  any  other  business,  or  as  a 
manufacturer  of  his  own  invention,  to  keep  the  ac- 
count of  the  patent  and  the  manufacture  separately.* 
The  most  unreserved  and  clear  statement  of  the  pa- 
tentee's remuneration  is  an  indispensable  condition  for 
extension.5  To  entitle  a  patentee  to  a  prolongation 
of  the  term  of  letters  patent  he  must  satisfactorily 
establish  the  amount  of  his  profit.6  He  must  show 
in  a  manner  which  admits  of  no  controversy,  what 
has  been  the  amount  of  remuneration  which,  in  every 
point  of  view,  the  invention  has  brought  him  and  it 


1  In  re  Simister's  Patent  4  Moore  P.C.  164,  7  Jur.  451. 

2  In  re  Norton's  Patent   i   Moore  P.C.  (N.S.)  339;  9  Jur.  (N.S.)  419;   n 
W.R.  720. 

3  In  re  Clark's  Patent  7  Moore  P.C.  (N.S.)  255  ;  L.R.  3  P.C.  421. 

*  In  re  Beit's  Patent  i  N.R.  137;  i  Moore  P.C.  (N.S.)  49  ;  9  Jur.  N.S. 
137;  7  L.T.  577;  ii  W.R.  221. 

&  In  re  Hill's  Patent  i  Moore  P.C.  (N.S.)  258;  9  Jur.  (N..S.)  1209;  9 
ly.T.  101  ;  12  W.R.  25. 

6  In  re  Trotman's  Patent  I/.R.  i  P.C.  118. 

16 


122 

is  his  duty  to  frame  the  accounts  in  such  a  shape  as 
to  leave  no  doubt  as  to  what  remuneration  he  has 
received.1  The  authorities  on  this  head  are  numerous 
and  they  all  go  to  establish  that  whether  the  paten- 
tee's remuneration  has  been  adequate  or  not  his 
furnishing  a  satisfactory  account  is  a  condition  prece- 
dent to  his  obtaining  on  extension  of  his  term.2  In 
estimating  the  profits  derived  from  the  patent,  a 
deduction  is  allowed  for  the  personal  expense  of  the 
patentee,  who  is  entitled  to  charge,  as  part  of  his 
expenses,  for  loss  of  time  in  endeavouring  to  bring 
the  invention  into  general  use.* 

RIGHTS   AND   REMEDIES. 

We  now  come  to  the  subject  of  enforcement  of 
Rights  and  reme-  the  rights  and  remedies  in  regard  to  patents.  This 
rfriewrf  the*0**  subject  may  be  conveniently  discussed  from  two  points 
of  view — from  the  point  of  view  of  the  public,  and 
from  the  point  of  view  of  the  individual.  The  pro- 
ceedings that  may  be  regarded  as  specially  meant  for 
safeguarding  the  interests  of  the  public  are  indicated 
in  sections  22,  23,  and  25  of  the  Act.  Sec.  22  provides 
that  any  person  interested  may  present  a  petition  to 
the  Governor-General  in  Council,  which  shall  be  left 
at  the  Patent  Office,  alleging  that  the  reasonable 
requirements  of  the  public  with  respect  to  a  patented 
invention  have  not  been  satisfied  and  praying  for  the 
grant  of  a  compulsory  license,  or  in  the  alternative, 
for  the  revocation  of  the  patent.  If  it  be  found  that 
the  reasonable  requirements  of  the  public  with  refer- 
ence to  the  patented  invention  have  not  been  satisfied, 
the  patentee  may  be  ordered  to  grant  licenses  on 
such  terms  as  the  Governor-General  in  Council,  or  the 
High  Court,  as  the  case  may  be;*  may  think  just,  or  if 
the  Governor-General  in  Council  or  the  High  Court 
is  of  opinion  that  the  reasonable  requirements  of  the 
public  will  not  be  satisfied  by  the  grant  of  licenses, 


public. 


1  In  re  Saxby's  Patent  7  Moore   P.C.    (N.S.)   82;  ly.R.    3  P.C.  292;  19 
W.R.  513. 

2  In  re  Adair's  Patent  6  A.C.  176 ;   29  W.R.  746. 

3  In  re  Carr's  Patent  9  Moore  P.C.  (N.S.)  379;  L.R.  4  P.C.  539.     In  re 
Newton's  Patent  14  Moore  P.C.  156;   10  W.R.  731. 

4  The  Governor-General  in  Council  may,  as  he  thinks  fit,  either  dispose 
of  the  petition  himself,  or  refer  it  to  a  High  Court  for  decision. 


123 

the  patent  may  be  revoked  by  order  of  the  Governor- 
General  in  Council  or  the  High  Court.  '  Reasonable 
requirements'  is  also  denned  by  the  Act.  If  by 
reason  of  the  default  of  the  patentee  to  manufacture 
to  an  adequate  extent  and  supply  on  reasonable 
terms  the  patented  article,  or  any  parts  thereof,  which 
are  necessary  for  its  efficient  working,  or  to  carry  on 
the  patented  process  to  an  adequate  extent,  or  to 
grant  licenses  on  reasonable  terms,  any  existing  trade 
or  industry,  or  the  establishment  of  any  new  trade 
or  industry  in  British  India  is  unfairly  prejudiced,  or 
the  demand  for  the  patented  article  or  the  article 
produced  by  the  patented  process  is  not  reasonably 
met,  the  reasonable  requirements  of  the  public  shall 
be  deemed  not  to  have  been  satisfied.  So  again,  if 
any  trade  or  industry  in  British  India  is  unfairly 
prejudiced  by  the  condition  attached  by  the  patentee 
before  or  after  the  commencement  of  the  Act  to  the 
purchase,  hire  or  use  of  the  patented  article,  or  to  the 
using  or  working  of  the  patented  process,  it  shall 
amount  to  not  satisfying  the  reasonable  requirements 
of  the  public.1  Sec.  23  deals  with  revocation  of  a 
patent  on  the  ground  that  the  patented  article  or 
process  is  manufactured  or  carried  on  exclusively  or 
mainly  outside  British  India.  Any  person  may  apply 
for  such  revocation  not  less  than  four  years  after  the 
date  of  a  patent.  The  Governor- General  in  Council 
shall  consider  the  application  and  if,  after  inquiry, 
he  is  satisfied  that  the  allegations  are  correct,  that 
the  applicant  is  prepared,  and  is  in  a  position  to 
manufacture  or  carry  on  the  patented  article  or  pro- 
cess in  British  India  and  that  the  patentee  refuses  to 
grant  a  license  on  reasonable  terms,  he  may  make  an 
order  revoking  the  patent  unless  the  patentee  proves 

l  Mere  default  in  supplying  the  patented  article  or  granting  a  license 
to  an  individual  does  not  necessarily  amount  to  '  default  in  supplying  the 
patented  article  or  granting  licenses'  within  the  meaning  of  sub- section  (<;) 
(a)  of  the  section.  The  expression  "  trade  or  industry  "  in  sub-section  (5) 
(a)  is  to  be  read  in  a  wide  sense,  as  one  speaks  of  the  cotton  or  woollen  trade 
or  industry,  so  that  it  is  not  enough  to  establish  that  a  particular  trade  is 
unfairly  prejudiced ;  it  must  be  further  proved  that  the  trade  or  industry 
as  a  whole  is  thus  affected.  The  *  establishment  of  any  new  trade  or  indu- 
stry '  referred  to  in  sub-section  5  (a)  is  a  different  thing  from  the  entry  of 
particular  person  into  an  existing  trade  or  industry.  The  '  demand  '  refer- 
red to  in  sub-section  5  (a)  is  not  the  demand  of  a  particular  person,  but  that 
of  the  public  at  large.  In  re  Robin  Electric  Lamp  Company's  Petition  (/<?/5) 
i  Ch.D.  780;  32  R.P.C.  202;  113  L.T.  132. 


124 


Rights  and 
remedies  from  the 
point  of  view  of 
the  individual. 

Forms  of  proceed- 
ings prescribed. 


that  the  patented  article  or  process  is  manufactured 
or  carried  on  to  an  adequate  extent  in  British  India, 
or  gives  satisfactory  reasons  why  the  article  or  pro- 
cess is  not  so  manufactured  or  carried  on.  A  patent 
may  also  be  revoked  if  the  patent,  or  the  mode  in 
which  it  is  exercised,  be  mischievous  to  the  state  or 
generally  prejudicial  to  the  public  (sec.  25). 

Apart  from  these  special  cases  of  revocation  of 
patent  there  may  be  revocation  of  a  patent,  in  whole 
or  in  part,  by  legal  proceedings  and  such  legal  proceed- 
ings may  be  initiated  by  petition  to  a  High  Court 
(sec.  26).  The  petition  may  be  presented  by  the 
Advocate-General  or  any  person  alleging  that  the 
patent  was  obtained  in  fraud  of  his  rights,  or  of  the 
rights  of  any  person  under  or  through  whom  he  claims, 
or  that  he,  or  any  person  under  or  through  whom  he 
claims,  was  the  true  and  first  inventor  of  any  inven- 
tion included  in  the  claim  of  the  patentee ;  or  that  he 
or  any  person  under  or  through  whom  he  claims  an 
interest  in  any  trade,  business  or  manufacture,  had 
publicly  manufactured,  used  or  sold,  within  British 
India,  before  the  date  of  the  patent,  any  thing  claimed 
by  the  patentee  as  his  invention.  An  application  for 
revocation  will  lie  on  any  of  the  grounds  which  go 
to  the  validity  of  a  patent  such  as,  that  it  has  no 
utility ;  that  it  was  not  a  new  invention  at  the  date 
of  the  application;  that  the  patentee  was  not  the 
true  and  first  inventor ;  that  the  specification,  orginal 
or  amended,  does  not  fulfil  the  requirements  of  the 
act ;  that  the  patentee  had  fraudulently  put  forward 
as  his  invention  something  which  was  not  new  and 
whereof  he  was  neither  the  inventor,  nor  the  assign 
nor  the  legal  representative  of  such  inventor;  that 
his  application  or  specification  contains  a  wilful  or 
fraudulent  mis-statement,  or  that  there  was  insuffi- 
ciency of  description  and  that  such  insufficiency  was 
fraudulent  or  injurious  to  the  public. 

The  public  are  also  protected  from  groundless 
threats  of  institution  of  legal  proceedings  at  the  ins- 
tance of  patentees  by  section  36.  This  section  lays 
down  in  effect  that  any  person  who  is  aggrieved  by 
such  threats  may  institute  a  suit  in  a  District  Court 
and  obtain  (i)  an  injunction  and  (2)  damages  if  he 
has  sustained  any.  But  there  is  a  proviso  to  this 


125 

section  which  says  that  "  this  section  shall  not  apply 
if  the  person  making  such  threats  with  due  diligence 
commences  and  prosecutes  a  suit  for  infringement  of 
his  patent."  The  object  of  this  section  is  to  prevent 
a  patentee  from  causing  damage  to  a  rival  by  (( dis- 
seminating threats  which  he  dare  not  or  will  not 
justify  by  an  action,  who  is  willing  to  wound  but  yet 
afraid  to  strike.1"  A  general  warning  to  the  public 
to  the  effect  that  "  A.  B.  has  a  patent  for  such  and 
such  a  machine  and  proceedings  will  be  taken  against 
any  one  who  infringes  it  "  will  not  be  actionable.  It 
is  only  when  the  warning  either  expressly  or  by 
implication  points  to  any  particular  individual  that 
it  becomes  actionable  as  a  threat.2 

Then  there  is  the  usual  remedy  available  to  the  Suit  for  infringe 
patentee  by  a  suit  for  infringement  of  patent  against  m 
any  person  who  during  the  continuance  of  a  patent 
makes,  sells  or  uses  the  invention  without  license,  or 
counterfeits  it  or  imitates  it.3  To  a  suit  for  infringe- 
ment the  defence  set  up  may  be  on  any  of  the 
grounds  already  indicated  on  which  a  patent  may  be 
revoked.  It  has  been  held  that  to  manufacture 
abroad  according  to  a  process  patented  in  England 
and  then  import  the  substance  for  sale  in  England  is 
a  violation  of  the  patent4;  also  importing  of  such 
an  article  though  not  for  sale,  yet  for  the  purpose  of 
experiment  or  instruction  is  a  user  for  advantage  and 
an  infringement.6  Any  one  who  uses  what  is  an 
infringement  of  a  patent  is  liable  though  he  was  only 
an  agent  or  servant  of  another  who  is  not  himself 
sued.  Thus  the  captain  of  a  vessel  fitted  with  pumps 

1  Per  North,  /.,  in  Day  v.  Foster  (1890)  7  R.P.C.  60;  see  also  Lindley 
IvJ.  in  Skinner  v.  Perry  (1893)  i  Ch.D.  420. 

2  Challender  v.  Royle  (18X7)  L.R   36  Ch.D.  441  ;  s.c.  4  R.P.C.  375. 

3  Section  29.     The  words  "  District  Court  "  includes  the  High  Court  in 
the  exercise  of  its  ordinary  original  civil  jurisdiction.     Kedarnath  Mandal 
v.   Gonesh  Chandra  A  dak  (1907)  12  C.W  N.  446.     See  also  sec.  2  (b)  of  the 
Act  and  sec   2  (4)  of  the  Code  of  Civil  Procedure  (Act  V  of  1908). 

A  patent  privilege  may  bo  infringed  in  several  ways  ;  (i)  by  making  or 
manufacturing  articles  for  use  or  sale  by  means  of  the  art  which  has  been 
invented  by  the  patentee,  or  by  using,  exercising  or  putting  the  art  into 
practice,  to  the  prejudice  of  the  patentee  in  any  other  way  ;  (2)  by  vending  or 
selling  articles  made  in  violation  of  the  patent  privilege ;  (3)  by  making  for 
use  or  sale,  or  vending  articles  which  counterfeit,  imitate  or  resemble  articles 
made  in  pursuance  of  the  invention :  (4)  by  counterfeiting  or  imitating  the 
invention  in  any  other  way.  — Hindmarsh's  '  I/aw  of  Patents.' 

4  Von  Hey  den  v.  Neustadt.  14  Ch.D.  230. 

&  United   Telephone  Co.  v.  Sharpies  29  Ch.D.  164. 


126 

which  were  an  infringement  of  the  plaintiff's  patent 
was  held  liable  although  he  was  not  owner  of  the 
vessel.1  The  burden  of  showing  that  the  plaintiff  has 
a  cause  of  action,  lies  upon  him  in  a  patent  case  just 
as  much  as  in  any  other  case.2  When,  however,  the 
grant  of  patent  is  once  proved,  the  onus  of  proving 
that  it  had  determined  is  on  the  defendant.  Where 
a  patent  is  for  an  invention  consisting  of  several  parts, 
the  imitation  of  any  part  of  the  invention  is  an  in- 
fringement of  the  patent/  In  determining  whether  a 
defendant  has  infringed  the  plaintiff's  patent,  the 
Court  will  regard  the  substance  of  the  invention,  and 
if  the  defendant  has  infringed  the  substance  of  the 
invention,  although  he  may  have  made  immaterial 
variations  or  used  mechanical  equivalents,  an  injunc- 
tion will  be  granted/  The  manufacture  and  sale  of 
an  article  made  out  of  a  material,  the  making  of 
which  infringes  a  patent,  is  also  an  infringement  of  the 
patent  and  must  be  restrained  by  an  injunction. 
However  much  the  article  may  completely  change 
the  nature  of  the  material,  the  material  itself  is 
obtained  by  infringing  the  patent  and  the  plaintiffs 
are  indirectly  deprived  of  the  benefit  of  their  inven- 
tion by  the  use  made  of  it  by  the  defendants.5  Where 
a  patent  is  obtained  for  the  use  of  particular  chemical 
materials  for  arriving  at  a  particular  chemical  result, 
it  is  no  infringement  to  arrive  at  the  same  result  by 
the  use  of  other  chemical  materials  which  were  not 
known  to  be  equivalents  for  the  materials  mentioned 
in  the  specification  at  the  time  when  the  patent  was 
obtained/  When  articles  which  were  the  subject  of 
a  patent  are  made  without  a  license  from  the  paten- 
tee simply  for  the  purpose  of  bona  fide  experiments, 
those  who  so  make  them  are  not  necessarily  liable  to 
an  action  but  when  they  are  made  and  used  for  profit, 
or  with  the  object  of  obtaining  profit  even  to  a  lim- 


l  Adair  v.    Young  12  Ch.  D.  13. 

*  Saccharine  Corporation  Ltd.  v.  Wild  (1903)  i.  Ch.  410. 

3  Smith  v.  L  6-  N.W  Ry.  2  El.  &  Bl.  69;  17  Jur.  1071  ;  S.C.  118  Eng. 
Rep.  694.  The  United  Horsenail  Co  v.  Stewart  (1886)  3  R.P.C.  at  p.  143. 
Cf.  United  Telephone  Co.  v  Walker  (1887)  4  R.P.C.  63  ;  56  L.T.  508. 

*  Thorn  v.  Worthing  Skating  Rink  Co.  6  Ch.D.  41511. 

5  Saccharine    Corporation   Ld.    v.    Anglo-Continental    Chemical    Works 
(1901)  i  Ch.D.  414. 

6  Badische  Anilin  und  Soda  Fabrik  v.  Levinstein  52  IvJ.Ch.    704;    24 
Ch.D.  156  ;  48  L.T.  820;  31  W.R.  913  ;  affirmed  12  A.C.  710  H.L. 


127 

ited  extent,    such   making   and    using  constitute  an 
infringement  of  the  patentee's  rights.1 

Section  30  of  the  Act  makes  provision  for  the 
protection  of  innocent  infringers.  It  lays  down  that ( a  innocent  infrin- 
patentee  shall  not  be  entitled  to  recover  any  damages  §ers- 
in  respect  of  any  infringement  of  a  patent  granted 
after  the  commencement  of  this  Act  from  any 
defendant  who  proves  that  at  the  date  of  that 
infringement  he  was  not  aware,  nor  had  reasonable 
means  of  making  himself  aware,  of  the  existence  of  the 
patent,  and  the  making  of  an  article  with  the  word 
" patent,"  " patented"  or  any  word  or  words  express- 
ing or  implying  that  a  patent  has  been  obtained 
for  the  article,  stamped,  engraved,  impressed  on, 
or  otherwise  applied  to  the  article,  shall  not  be  deemed 
to  constitute  notice  of  the  existence  of  the  patent 
unless  the  word  or  words  are  accompanied  by  the  year 
and  number  of  the  patent :  Provided  that  nothing  in 
this  section  shall  affect  any  proceedings  for  an  injunc- 
tion.' This  section  applies  only  to  patents  granted 
after  the  ist  January,  1912.  Prior  to  this  Act,  the 
law  was  that  ignorance  of  the  existence  of  a  patent 
was  no  excuse  for  infringement  and  the  inf ringer  was 
liable  to  an  injunction  as  well  as  to  pay  damages. 

The  reliefs  which  are  open  to  the  plaintiffs  are  of  Reliefs. 
two  kinds:  i.  Injunction,  2.  Damages  or  an  account  of 
profits.  As  observed  by  Romer,  /.,  in  Shoe  Machinery 
Co.  v.  Cutlan*  "Two  kinds  of  action  may  be 
brought  by  a  plaintiff  patentee.  The  one  is  based  on 
this — that  the  defendant  has  infringed  before  action 
brought,  and  in  respect  of  this  the  plaintiff  is  entitled 
to  claim  damages,  or  an  account,  or  an  injunction  to 
prevent  similar  infringements  in  the  future.  The 
other  action  is  based  on  the  fact,  not  that  the 
defendant  has  infringed,  but  that  he  threatens  and 
intends  to  infringe;  and  in  this  case  the  plaintiff 
may  claim  an  inj  unction  to  restrain  the  threatened 
infringement.  Of  course  you  may  find  both  kinds  of 
action  combined  in  one." 

When  the  validity  of  the  patent  and  the  fact  of  injunction, 
the  infringement  are  established,   and  when  there  is 


Frearson  v.  Loe  9  Ch.D.  48  ;  27  W.R.  183. 
12  R.P.C.  at  p.  367;  (1896)  i  Ch.D.  108. 


Possession  of 
infringing  article. 


128 

a  probability  of  the  infringement  being  repeated  a 
perpetual  injunction  restraining  the  infringement 
of  the  patent  will  be  granted.1  Where  a  patent  is 
infringed  and  the  patentee  has  prima  facie  case,  an 
injunction  will  be  granted,  for  it  is  presumed  that  an 
infringer  intends  to  go  on  infringing,  notwithstanding 
any  promise  he  may  make  not  to  do  the  same  thing 
again2  unelss  there  are  special  circumstances  which 
show  that  there  is  no  probability  of  the  infringement 
being  repeated ;  e.g.,  injunction  was  refused  where  the 
defendant  who  was  the  captain  of  a  ship  having  the 
infringing  machinery  had  resigned  his  post.3  Even 
when  there  has  been  no  actual  infringement  but  an 
intention  to  infringe  is  shown,  an  injunction  will  be 
granted.1*  A  patentee  can  sustain  an  injunction  to 
restrain  a  threatened  infringement  of  patent,  even  if 
no  actual  infringement  has  taken  place.5 

An  interesting  question  often  presents  itself  and 
that  is,  '  Is  the  mere  possession  of  an  infringing  article 
a  sufficient  ground  for  granting  an  injunction  ?  '  It 
has  been  urged  in  several  cases  that  mere  possession 
is  not  enough,  unless  intention  to  use  the  article  is 
proved.6  But  it  was  held  that  an  injunction  must  be 
granted  for  ffif  it  is  not  their  intention  to  use  the 
instrument,  then  the  injunction  asked  for  can  do  them 
no  harm."  InAdair  v.  Young 1  an  action  was  brought 
against  the  master  of  a  ship  to  restrain  him  from 
using  pumps  which  were  an  infringement  of  the  plain - 


l  Bridson  v.  M* Alpine  (1845)  8  Beav.  229  s.c.  50  Eng.  Rep.  90  ;  Proctor 
v.  Bayley  (1889)  42  Ch.D.  390  C.A.  See  also  Lyon  v.  Newcastle-upon-Tyne 
Corporation  (1894)  11  R.P.C.  218. 

Evidence  of  act  after  the  initiation  of  the  proceedings  has  been  held  to 
be  inadmissible  for  the  purpose  of  showing  that  the  defendant  intends  to 
commit  infringement  in  the  future.  The  Welshbach  Incandescent  Gas  Light 
Co.  v.  Dowle  (1899)  16  R.P.C.  391.  But  see  The  Shoe  Machinery  Co.  v. 
Cutlan  (1895)  12  R.P.C.  at  p.  367,  where  Romer, /.,  was  of  opinion  that  "leave 
would  be  given  by  the  Court  to  the  plaintiff  in  a  proper  case,  and  on  proper 
terms  to  amend  his  action,  and  to  bring  these  subsequent  infringements 
before  the  Court  to  be  dealt  with  once  and  for  all  with  the  prior  infringe- 
ment." 

*  Losh  v.  Hague  i  W.P.C.  at  p.  200. 

3  Caldwell  v.   Van  Vlisiingen   (1851)21  L.J.  (Ch.)  97;  68  Eng.  Rep.  571. 

*  Proctor  v.   Bayley  (1889)   42   Ch.D.   390,  per  Cotton  I/.J.  at  p.  398. 
See  alsoDunlop  Pneumatic  Tyre  Co.  v.  Neal  (1899)  I  Ch.D.  807. 

&  Frearson  v.  Loe  9  Ch.D.  48;  27  W.R.  183.  See  also  Dowling  v. 
Billington  (1890)  7  R.P.C.  191. 

6  United  Telephone  Co.  v.  London  and  Globle  Telephone  and  Maintenance 
Co.  (1884)  26  Ch.D.  766  at  p.  775.  See,  however,  Messers  Moody,  Wraith 
and  Gurr,  Ld.  v.  Newell  and  Co.  31  R.P.C.  510. 

1  (1879)  12  Ch.  D.  p.  13. 


I2Q 

tiffs  letters  patent.  It  was  shown  that  the  ship  was 
fitted  up  exclusively  with  pumps  which  were  an  in- 
fringement of  the  letters  patent,  but  was  so  fitted  up 
before  the  defendant  had  taken  command  of  her  and 
he  had  nothing  to  do  with  putting  them  on  board,  and 
they  had  never  been  worked  in  British  waters.  It  was 
held  by  Brett  and  Cotton,  I/.J.J.  (James,  IV.J.  dissent- 
ing), that  injunction  was  rightly  granted  on  the 
ground  that  if  any  accident  had  happened  to  the  ship 
the  pumps  which  were  ready  for  use  would  have  been 
actually  used  within  British  waters  and  the  master, 
therefore,  must  be  considered  to  have  intended  to 
use  them.1 

The  Court  will  generally  refuse  to  interfere  by 
injunction  if  the  inf ringer  has  acted  innocently  and 
promptly  discontinues  and  offers  a  proper  under- 
taking and  compensation  * — but  the  undertaking  must 
be  full  and  clear.3  Nor  will  the  court  grant  an  injunc- 
tion if  it  be  suspected  that  the  plaintiff's  object  is  to 
advertise  the  patent  and  the  defendant  does  not 
oppose.*  Nor  will  an  injunction  be  granted  if  the 
infringement  has  ceased  to  continue :  "  It  is  not 
because  a  man  has  done  a  wrong  that  an  injunction 
will  be  granted  against  him." 6  Acquiescence  is  another 
ground  on  which  the  Court  will  refuse  to  grant  an 
injunction,  but  such  acquiescence  must  amount  to  a 
representation  to  the  defendant  that  what  he  is  doing 
is  not  an  infringement ;  mere  silence  or  lying-by  on 
the  part  of  the  plaintiff  will  not  be  sufficient.6 

Where  the  patent  is  an  old  one,  and  there  has  interiocut<£v 
been  long  and  undisturbed  enjoyment  of  it,  or  where  injunction. 
its   validity  has  been  established  elsewhere  and  the 
Court  sees  no  reason  to  doubt  the  result,  or  where  the 
conduct   of   the    defendant   has  been   such  that  as 
against  him  there  is  no  reason  to  doubt  the  validity 
of  the  patent,  the  Court  will,  in  support  of  the  patent 

1  (l%79)   I2  Ch.D.  p.  13  at  p.  19.     See  British  Motor  Syndicate  v.  Taylor 
(  1900)  17  R.P.C.  189,  723.     Bowling  v.  Billington    (1890)  7   R.P.C.   191,   at 
p.  201.     Dunlop  v.  British  Car  Co.  (1901)  18  R.P.C.  313.     Proctor  v.  Bailey 
(1889)  6  R.P.C.  112,  538  ;  42  Ch.D.  390. 

2  Jenkins  v.  Hope  13  R.P.C.  57.     Beits  v.  Wilmot  (1870)  18  W.R.  946. 
a  United  Telephone  Co.  v.  London  &>  Globe  Co.  i  R.P.C.  118. 

*  Dover  v.  New  Townsend  Co.  21  R.P.C.  135.     Badische  Anilin  undSoda 
Fabrik  v.  Spivey  (1905)  22  R.P.C.  65. 

&  Proctor  v.  Bailey  (1889)  6  R.P.C.  538;  42  Ch.D.  390. 
6  Proctor  v.  Bennis  (1887)  36  Ch.D.  740  at  pp.  759,  761. 

17 


130 

right,  interfere  by  interlocutory  injunction.1  In  a 
suit  to  restrain  the  infringement  of  a  patent  relating 
to  roller  skates  the  plaintiff  moved  for  an  injunction 
against  the  defendant  until  the  hearing.  It  was  held 
that  the  plaintiff  was  entitled  to  an  injunction  upon 
giving  an  undertaking  as  to  damages.2  Whether  the 
Court  will  grant  an  interim  injunction  or  not  depends 
upon  the  degree  of  doubt  which  exists  as  to  the  ques- 
tion of  validity  and  infringement.  The  degree  of 
convenience  and  inconvenience  caused  by  granting 
an  injunction  will  always  be  carefully  considered.8 
For  example,  in  one  case,4  an  injunction  though 
granted,  was  suspended  for  six  months,  as  great  in- 
convenience would  have  been  caused  to  the  public  if  the 
use  of  the  infringed  machinery  were  suddenly  stopped  ; 
and  in  another 6  it  was  suspended  pending  appeal, 
inasmuch  as  enforcing  it  at  once  would  throw  a 
large  number  of  workmen  out  of  employment.  The 
general  principle,  however,  followed  in  the  matter  of 
interim  injunctions  is  that  the  court  will  interfere  to 
protect  a  patentee  before  he  has  established  his  rights 
at  law  in  the  case  of  patents  which  have  been  long 
used  and  enjoyed,  but  in  the  case  of  new  patents  will 
suspend  its  interference  until  the  right  at  law  has 
been  established.6  There  are,  of  course,  exceptions. 
Although  the  ordinary  rule  is  not  to  grant  an  injunc- 
tion unless  either  the  validity  of  a  patent  has  been 
established  or  the  patent  has  been  undisputed  for 
many  years,  the  circumstances  of  the  case  may  be 
such  as  to  induce  the  court  to  depart  from  the  rule.1 
An  injunction  cannot  be  granted  in  respect  of  a  pa- 


1  Dudgeon  v.    Thomson  30  L.T.    244;    22   W.R.   464;  3    A.C.    34    See 
also   Hindmarsh's  Law    of   Patents :     **  When   a   patentee   can  show   that 
he  has  possession  of  a  patent  privilege,  under  colour  of  a  title  not  only 
evidenced  by  his  patent  but  also  supported  by  long  and  undisputed  enjoy- 
ment, and  can  also  show  that  the  defendant  against  whom  he  is  proceeding 
has  violated  the  privilege,  he  shall  have  immediate  relief  and  the  protec- 
tion of  an  interlocutory  injunction." 

2  Plimpton  v.  Spiller  4  Ch.D.  286  ;  35  L.T.  656;  25  W.R.  152. 

3  Bridson  v.  Me  Alpine  8.  Beav.  229  S.C.  50  Eng.  Rep.  90. 

*  Hopkinson  v.  St.  James  and  Pall  Mall  Electric  Light  Co.  (1893)  10 
R.P.C.  at  p.  62. 

&  The  Leeds  Forge  Co.  v.  Deighton's  Patent  Flue  Co.  (1901)  18  R.P.C. 
at  p.  240. 

6  Caldwellv.  Vanvlissengan,  9  Hare  415  68;  21  L.J  Ch.  97;  i6Jur.  115  ; 
S.C.  Eng.  Rep.  571.  Curtis  v.  Cutts  18  I*J.Ch.  184.  Hill  v.  Thomson  3  Mer. 
622;  17  R.R.  156;  S.C.  36  Eng.  Rep.  239.  Davenport  v.  Richard  3  I/.T.  503. 

1  Renard  v.  Levinstein  10  I/.T.  94,  affirmed  10  I/.T.  177. 


13* 

tent  which  has  expired.1  So  also  when  an  action  is 
brought  immediately  before  the  expiration  of  a  pa- 
tent, an  injunction  will,  as  a  general  rule,  be  refused,2 
but  the  sale  of  articles  manufactured  in  infringement 
during  the  life  of  the  patent  would  be  restrained  even 
after  its  expiration. * 

When  there  are  several  inf  ringers,  the  plaintiff  Several  infringe^, 
should  "select  that  which  he  thought  the  best  in 
order  to  try  the  question  fairly  and  proceed  in  that 
case  to  obtain  his  interlocutory  injunction.  He  might 
write  at  the  same  time  to  all  the  others  who  were  in 
simili  casu,  and  say  to  them,  f  Are  you  willing  to 
take  this  as  a  notice  to  you  that  the  present  case 
is  to  determine  yours?  Otherwise  I  shall  proceed 
against  you  by  way  of  interlocutory  injunction;  and 
if  you  will  object  on  the  ground  of  delay,  I  do  not 
mean  to  file  bills  against  all  of  you  at  once.  Am  I 
to  understand  that  you  make  no  objection  of  that 
kind  ?  If  you  do  not  object  I  shall  file  a  bill  against 
only  one  of  you.'  I  do  not  think  any  court  could 
complain  of  a  patentee  for  taking  the  course  I  am 
suggesting."* 

Another  remedy  to  which  the  patentee  is  entitled  Damages, 
is  damages  or  an  account  of  profits.  But  he  is  not 
entitled  to  both ;  he  must  elect  which  of  the  two  he 
will  take,5  When  damages  are  claimed,  he  is  entitled 
to  such  damages  as  will  fairly  compensate  him  for 
the  injury  which  he  has  sustained  by  reason  of  the 
wrongful  act  of  the  defendant  proved  at  the  trial. 
The  act  of  the  defendant  is  treated  as  a  tort  and 
the  measure  of  damages  is  not  the  profit  made  by 
the  infringer  but  the  loss  sustained  by  the  plaintiff.6 

l  Saccharine  Corporation,  Ltd.  v.  Quincey  (1900)  2  Ch.D.  246  at  p.  249. 

*  Beits  v.  Gallais  (1870)  Iv.R.   10  Eq.  392.     Welsbach  Incandescent  Gas 
Light  Co.,  Ltd.  v.  New  Incandescent  (Sunlight  Patent)  Gas  Lighting  Co.  (1900) 
17  R.P.C.  237,  254. 

3  Crossley  v.  Beverley  (1829)  I  Russ  &  M.  169  S.C.  39  Bng.  Rep.  65. 
Crossley  v.  Derby  Gas  Light  Co.  (1834)  44  L.J.  Ch.  25.  Price's  Patent 
Candle  Co.  v.  Bauwen's  Patent  Candle  Co.  (1858)  4  K.  &  J.  727  S.C.  70  Eng. 
Rep.  302. 

*  Per  Sir  W.  Pagewood  V.C.  in  Bovill  v.  Crate  (1865)  I  Eq.  at  p.  391. 

6  Neilson  v.  Belts  (1871)  Iv.R.  5.  H.L.  at  p.  22.  De  Vitrev.  Beits  (1873) 
Iv.R.  6  H.Iv.  319.  United  Horsenail  Co.  v.  Stewart  (1886)  3  R.P.C.  at  p.  143 
S.C.  5  R.P.C.  at  p.  266;  S.C.  7  R.P.C.  152.  Kinmond  v.  Jackson  (1877) 
i  C.  Iv.R.  66 

^  United  Horseshoe  &  Nail  Co.  v.  John  Stewart  &  Co.  (1886)  3  R.P.C. 
143;  S.C.  5  R.P.C.  260  S.C.  13  A.C.  401 ;  Bagot  Pneumatic  Tyre  Co.  v.  Clipper 
Pneumatic  Tyre  Co.  (1901)  i  Ch.D.  196. 


132 

As  Lord  Watson  observed  :  "  The  profit  made  by  the 
infringer  is  a  matter  of  no  consequence.  However 
large  his  gains,  he  is  only  liable  in  nominal  damages 
so  long  as  his  illegal  sales  do  not  injure  the  trade  of 
the  patentee ;  and  however  great  his  loss,  he  cannot 
escape  from  liability  to  make  full  compensation  for 
the  injury  which  his  competition  may  have  occa- 
sioned." l  It  is  necessary  for  the  plaintiff  to  give  such 
evidence  as  will  enable  the  court  to  estimate  the  extent 
of  the  loss  and  injury  which  he  has  sustained ;  in  the 
absence  of  such  evidence  he  cannot  get  more  than 
nominal  damages.4  (<  The  loss,"  in  the  words  of  Lord 
Macnaughten,  "  must  be  the  natural  and  direct  conse- 
quence of  the  respondents'  acts  "  3 ;  so  the  damages 
generally  will  be  the  loss  of  profit  suffered  by  the 
plaintiff  on  account  of  the  sale  by  the  defendant  of 
the  pirated  articles.  But  the  plaintiff  can  claim  more 
by  showing  that  the  defendant's  unlawful  competi- 
tion has  caused  him  to  lower  prices,*  or  has  otherwise 
caused  him  loss,  e.g.  if  the  plaintiff  had  received  the 
orders  which  the  defendant  had  received,  the  establish- 
ment charges  on  the  articles  manufactured  would 
have  been  proportionately  reduced  and  the  profit 
would  have  been  greater.5  But  where  damages  are 
sought  to  be  recovered  on  the  ground  of  lowering  of 
prices,  it  must  be  clearly  shown  that  the  reduction 
was  due  to  the  defendant's  unlawful  competition  and 
not  to  the  ordinary  exigencies  of  trade.0  Where  a 
patentee  has  been  in  the  habit  of  granting  licenses  at 
a  certain  royalty,  the  measure  of  damages  will  be  the 
amount  of  royalty  which  the  plaintiff  would  have 
received.1 

L  The  United  Horseshoe  6-  Nail  Co.  v.  John  Stewart  6-  Co.  5  R.P.C.  at 
p.  267  ;  13  A.C.  at  p.  413.  . 

*  M inter  v.  Mover  i  Webs  R.  138. 

3  United  Horseshoe  &  Nail  Co.  v.  John  Stewart  &  Co.  (1886)  5  R.P.C.  at 
p.  268  ;  13  A.C.  at  p.  416. 

*  Meters  Ltd  v.  Metropolitan  Gas   Co.  28  R.P.C.    157  C.A;  144  L.T.  113. 
United  Horseshoe  &  Nail  Co.  v.  John  Stewart  &  Co.   5   R.P.C.  260;   13  A.C. 
401.     American  Braided   Wire  Co.  v.  Thomson  7  R.P.C.  152;  44  Ch.D.  274. 

&  Leeds  Forge  Co.,  Ltd.  v.  Deighton's  Patent  Flue  Co.  (1908)  25  R.P.C. 
209. 

6  Alexander  v.  Henry  (1895)  12  R.P.C.  at  p.  367.  See  also  13  A.C.  at  p. 
216. 

T  Penn  v.Pack  (1867)  L.R.  5.  Eq.  81.  English  and  American  Machinery 
Co.  v.  Union  Boot  and  Shoe  Machine  Co.  (1896)  13  R.P.C.  64.  The  Pneu- 
matic Tyre  Co.,  Ltd.  v.  Puncture  Proof  Pneumatic  Tyre  Co.,  Ltd.  (1899)  16 
R.P.C.  209.  The  British  Motor  Syndicate  v.  John  Taylor  and  Sons,  Ltd. 
(1900)  17  R.P.C.  723.  Sheen  and  another  v.  Johnson  (1879)  I.I/.R.  2  All.  368. 


133 

When  judgment  for  a  perpetual  injunction  has 
been  granted  and  an  enquiry  as  to  damages  ordered, 
the  defendant  must  make  full  discovery  of  the  names 
and  addresses  of  the  persons  to  whom  the  infringing 
articles  have  been  sold.1 

In  the  case  of  an  account  of  profits,  the  point  of  Account  of  profits 
view  taken  is  different  from  that  adopted  in  the  case 
of  damages.  The  test  is  not  the  loss  to  the  plaintiff 
but  the  profit  made  by  the  infringer  who,  for  the 
purpose  of  accounting,  is  treated  as  the  agent  of  the 
plaintiff.2  Of  the  two  remedies,  an  account  of  profits 
would  obviously  be  preferable  in  certain  cases,  for 
instance  where  the  defendant  has  an  established  trade 
on  a  profitable  footing  and  the  plaintiff  is  not  trading. 
But  an  enquiry  as  to  profits  has  also  its  own  disad- 
vantages, involving,  as  it  often  does,  questions  of 
great  difficulty  as  well  as  considerable  expenditure 
of  time  and  money.  "Therefore,  although  the  law 
is  that  a  patentee  has  a  right  to  elect  which  course 
he  will  take,  as  a  matter  of  business  he  would  generally 
be  inclined  to  take  an  inquiry  as  to  damages  rather 
than  launch  upon  an  inquiry  as  to  profits."  In 
certain  cases,  an  inquiry  as  to  damages  is  the  only 
relief  open  to  the  plaintiff,  for  instance,  where  it  ap- 
pears at  the  trial,  that  the  defendant  has  made  no 
profit,  in  which  case  an  account  of  profits  will  not  be 
allowed/  Where  the  plaintiff  has  tacitly  acquiesced 
in  the  infringement,  looking  for  an  account  of  profits 
in  future,  the  court  on  principles  of  equity  will  not 
grant  him  the  relief.  As  Lord  Brougham  observed  :5 
'  It  is  a  principle  of  equity,  that  a  party  who  claims 
a  right  should  not  lie  by,  and  by  his  silence  or  ac- 
quiescence induce  another  to  go  on  spending  his 
money  and  incurring  risk,  and  afterwards,  if  profit 
has  been  made,  come  and  claim  a  share  in  that  profit 
without  having  ever  been  exposed  to  share  in  the 
losses  which  might  have  been  sustained." 


l  Murray  v.  Clayton  (1872)  L.R.  15  Eq.  115.  American  Braided  Wire 
Co.  v.  Thomson  (1885)  5  R.P.C.  375.  Saccharine  Corporation  v.  Chemicals 
Co  (1900)  17  R.P.C.  612  ;  (1900)  2  Ch.D.  556. 

*  Belts  v.   Neilson  (1866)   L.R.   5  H.L.  i.  Belts  v.  DeVitre  (1864)  L.R..  6 
H.L.  319.     Watson  v.  Holliday  (1882)  20  Ch.D.  782  C.A. 

s  Per  Lindley,  L.  J.  in  Siddell  v.  Vicker  9  R.P.C.  at  p.  163. 

*  Bacon  v,  Spottiswoode  (1839)  i  Beav.  387  S.C.  48  Bng.  Rep.  988. 
*>  Crossley  v.  Derby  Gas  Light  Co.  i  W.P.C.  at  p.  120. 


134 

Delivery  up.  In  addition  to  the  remedies  above  mentioned, 

there  is  another  remedy  recognised  by  the  Courts  in 
England  in  a  series  of  cases,  and  that  is  by  a  manda- 
tory order  upon  the  defendant  to  deliver  up  to  the 
plaintiff  the  infringing  articles  or  to  destroy  them. 
Section  31  of  Act  II  of  1911  vests  in  the  Courts 
in  this  country  a  very  wide  discretion  which  may  be 
regarded  as  ample  for  the  purpose  of  such  an  order 
in  a  fit  case.  Such  an  order,  however,  will  only  be 
made  when  the  nature  of  the  infringing  matter  will 
permit  of  it.1  If  the  circumstances  of  the  case  are 
such  that  such  an  order  would  do  mere  mischief,  the 
order  would  not  be  made.1  The  order  for  delivery 
up  shall  be  restricted,  where  possible,  to  the  infringing 
parts  only.3  Where  the  patent  is  not  for  the  con- 
stituent parts  of  a  combination,  but  for  their  use  in 
that  particular  combination,  the  defendant  may  be 
allowed  to  keep  the  parts  though  ordered  to  remove 
them  from  the  patented  combination.4  It  is  to  be 
noted  however  that  the  property  in  the  infringing 
articles  remains  in  the  infringer,  although  the  pa- 
tentee is  entitled  to  prevent  the  use  of  these  articles 
in  derogation  of  his  rights  and  also  to  an  order,  if, 
necessary,  for  a  destruction  of  the  articles  so  as  to 
prevent  them  from  being  so  used.5 

Certificate  A  special  provision  laid  down  for  the  protection 

of  validity.  of  patentees  under  section  32  of  the  Act  calls  for  a  few 

words.     The    section   runs   as   follows:     "  In  a  suit 

for  infringement  of  a  patent,  the  court  may  certify 

1  Frearson  v.  Loe  (1878)  L.R.  9  Ch.D.  48  at  p.  67.  British  Vacuum 
Cleaner  Co.,  Ltd.  v.  James  Robertshaw  and  Sons,  Ltd.  C.A.  31  R.P.C.  29. 
Osram  Lamp  Works,  Ltd.  v.  Schloss  6-  Co.  30  R.P.C.  359. 

8  United  Telephone  Co.  v.  London  and  Globe  Telephone  and  Maintenance 
Co.  (1884)  26  Ch.D.  766  at  p.  776. 

8  Edison  Bellv.  Smith  n  R.P.C.  389  C.A.  British  Vacuum  Cleaner  Co. 
v.  Sections  Ltd.  21  R.P.C.  303.  Automatic  Weighing  Machine  Co.  v.  Fearby 
TO  R.P.C,  442;  House  v.  Weber  12  R.P.C.  478. 

*  Morgan  v.  Windover  7  R.P.C.  446. 

5  "  The  property  in  articles  which  are  made  in  violation  of  a  patent  is, 
notwithstanding  the  privilege  of  the  patentee,  in  the  infringer,  if  he  would 
otherwise  have  the  property  in  them.  The  Court  in  a  suit  to  restrain  the 
infringement  of  a  patent  does  not  proceed  on  the  footing  that  the  defendant 
proved  to  have  infringed  has  no  property  in  the  articles ;  but,  assuming 
the  property  to  be  in  him,  it  prevents  the  use  of  those  articles,  either  by 
removing  that  which  constitutes  the  infringement,  or  by  ordering,  if  neces- 
sary, a  destruction  of  the  articles  so  as  to  prevent  them  from  being  used 
in  derogation  of  the  plaintiff's  rights,  and  does  this  as  the  most  effectual 
mode  of  protecting  the  plaintiff's  rights — not  on  the  footing  that  there  is  on 
property  in  the  defendant."  Per  Cotton,  ly.J.,  in  Vavasseur  v.  Krupp. 
(1878)9  Ch.D.  351  at  p.  360. 


135 

that  the  validity  of  the  patent  came  in  question,  and, 
if  the  court  so  certifies,  then  in  any  subsequent  suit 
in  that  court  for  infringement  of  the  same  patent, 
the  plaintiff,  on  obtaining  a  final  order  or  judgment 
in  his  favour,  shall,  unless  the  court  trying  the  suit 
otherwise  directs,  have  his  full  costs,  charges  and  ex- 
penses of  and  incidental  to  the  said  suit  properly 
incurred."  The  object  of  the  section  is  apparently 
to  protect  the  patentee  from  being  exposed  to  the 
risk  of  bringing  successive  suits  for  restraining  in- 
fringements, where  manufacturers  may  conspire  to- 
gether to  defeat  his  rights  by  such  ruinous  litigation. 
It  is  in  fact  a  sort  of  penal  provision  for  deterring 
intending  infringers. 


APPENDIX. 
PART  I. 

THE   INDIAN    PATENTS    AND    DESIGNS   ACT,    1911 
(II   OF    1911). 


CONTENTS. 

PRELIMINARY. 
SECTIONS. 

1.  Short  title,  extent  and  commencement. 

2.  Definitions. 


PART  I. 

PATENTS. 

Application  for  and  Grant  of  Patent. 

3.  Application. 

4.  Specification. 

5.  Proceedings  upon  application. 

6.  Advertisement  on  acceptance  of  application. 

7.  Use  of  invention  on  acceptance  of  application, 

8.  Inquiry  before  sealing  patent. 

9.  Opposition  to  grant  of  patent. 

10.  Grant  and  sealing  of  patent. 

11.  Date  of  patent. 

12.  Effect,  extent  and  form  of  patent. 

13.  Fraudulent  applications  for  patents. 

Term  of  Patent. 

14.  Term  of  patent. 

15.  Extension  of  term  of  patent. 

16.  Restoration  of  lapsed  patent. 

Amendment  of  Application  or  Specification. 

17.  Amendment  of  application  or  specification  by 

Controller. 

18.  Amendment  of  specification  by  the  Court. 

19.  Restriction  on  recovery  of  damages. 

Register  of  Patents. 

20.  Register  of  Patents. 

18 


Crown. 
SECTIONS. 

21.  Patent  to  bind  Crown. 

Compulsory  Licenses  and  Revocation. 

22.  Compulsory  licenses  and  revocation. 

23.  Revocation  of  patents  worked  outside  British  India. 

24.  Power  of  Controller  to  revoke  surrendered  patent. 

25.  Revocation  of  patent  on  public  grounds. 

Legal  Proceedings. 

26.  Petition  for  revocation  of  patent. 

27.  Notice  of  proceedings  to  persons  interested. 

28.  Framing  issue  for  trial  before  other  Courts. 

29.  Suits  for  infringement  of  patents. 

30.  Exemption  of  innocent  infringer  from  liability  for 

damages. 

31.  Order  for  inspection,  etc.,  in  suit. 

32.  Certificate  of  validity  questioned  and  costs  thereon 

33.  Transmission  of  decrees  and  orders  to  the 

Controller. 

34.  Power  of  High  Court  to  stay  proceedings,  etc. 

35.  Hearing  with  assessor. 

36.  Remedy  in  case  of  groundless  threats  of  legal  pro- 

ceedings. 

Miscellaneous. 

37.  Grant  of  patents  to  two  or  more  persons. 

38.  Novelty  of  invention. 

39.  Loss  or  destruction  of  patent. 

40.  Provisions  as  to  exhibitions. 

41.  Models  to  be  furnished  to  Indian  Museum. 

42.  Foreign  vessels  in  British  Indian  waters. 


PART   II. 

DESIGNS. 

Registration  of  Designs. 

43.  Application  for  registration  of  designs. 

44.  Registration  of  designs  in  new  classes. 

45.  Certificate  of  registration. 

46.  Register  of  Designs. 

Copyright  in  Registered  Designs. 

47.  Copyright  on  registration. 

48.  Requirements  before  delivery  on  sale. 

49.  Effect  of  disclosure  on  copyright. 


139 


SECTIONS. 


50.  Inspection  of  registered  designs. 

51.  Information  as  to  existence  of  copyright. 

Industrial  and  International  Exhibitions. 

52.  Provisions  as  to  exhibitions. 

Legal  Proceedings. 

53.  Piracy  of  registered  design. 

54.  Application  of  certain  provisions  of  the  Act  as  to 

patents  to  designs. 


PART   III. 

GENERAL,. 

Patent  Office  and  Proceedings  thereat. 

55.  Patent  office. 

56.  Officers  and  clerks. 

Fees. 

57.  Fees. 

Provisions  as  to  Registers  and  other  Documents  in  the 

Patent  Office. 

58.  Notice  of  trust  not  to  be  entered  in  registers. 

59.  Inspection  of  and  extracts  from  registers. 

60.  Privilege  of  reports  of  Controller. 

61.  Prohibition  of  publication  of  specification,  draw- 

ings, etc.,  where  application  abandoned,  etc. 

62.  Power  for  Controller  to  correct  clerical  errors. 

63.  Entry  of  assignments  and  transmissions  in  registers. 

64.  Rectification  of  register  by  Court. 

Powers  and  Duties  of  Controller. 

65.  Powers  of  Controller  in  proceedings  under  Act. 

66.  Publication  of  patented  inventions. 

67.  Exercise  of  discretionary  power  by  Controller. 

68.  Power  of  Controller  to  take  directions  of  Governor 

General  in  Council. 

69.  Refusal  to  grant  patent,  etc.,  in  certain  cases. 

70.  Appeals  to  the  Governor  General  in  Council. 

Evidence,  etc. 

71.  Certificate  of  Controller  to  be  evidence. 

72.  Transmission  of  certified  printed  copies  of  specifica- 

tions, etc. 


140 


SECTIONS. 

73.  Applications  and  notices  by  post. 

74.  Declaration  by  infant,  lunatic,  etc. 

Agency. 

75.  Subscription  and  verification  of  certain  documents. 

76.  Agency. 

Powers,  etc.,  of  Governor  General  in  Council. 

77.  Power  for  Governor  General  in  Council  to  make 

rules. 

Offences. 

78.  Wrongful  use  of  words  "  Patent  Office." 

Savings  and  Repeal. 

79.  Saving  for  prerogative. 

80.  Repeal. 

81.  Substitution  of  patents  for  rights  under  repealed 

Act. 


THE  SCHEDULE.— FEES. 


ACT  No.  II  OF   I9II. 


PASSED  BY  THE  GOVERNOR  GENERAL  OF  INDIA  IN  COUNCIL. 

(Received  the  assent  of  the  Governor  General  on  the  ist 
March  igi /.) 

An  Act  to  amend  the  law  relating  to  the  protection  of  Inven- 
tions and  Designs. 

HERHAS  it  is  expedient  to  amend  the  law  relating  to  the 
protection  of  inventions  and  designs  ;  It  is  hereby  enacted 
as  follows  : — 

PRELIMINARY. 


w 


1.  (/)  This  Act  may  be  called  the  Indian  Patents  and  De-  Short  title,  extent 
Signs  Act,  I9II.  mednt.0mmenCe" 

(2)  It  extends  to  the  whole  of  British  India  including 
British  Baluchistan  and  the  Santhal  Parganas  ;  and 

(j)  It  shall  come  into  force  on  the  first  day  of  January  1912. 

2.  In  this  Act,  unless  there  is   anything  repugnant  in  the  Definitions, 
subject  or  context, — 

(/)  "  Advocate  General  "  includes  a  Government  Advocate  : 

(2)  "  article "  means  (as  respects  designs)  any  article  of 
manufacture  and  any  substance,  artificial  or  natural,  or  partly 
artificial  and  partly  natural  : 

(j)  "Controller"  means  the  Controller  of  Patents  and 
Designs  appointed  under  this  Act  : 

(^)  "  copyright  "  means  the  exclusive  right  to  apply  a  design 
to  any  article  in  any  class  in  which  the  design  is  registered  : 

(5)  "  design  "  means  any  design  applicable   to   any   article, 
whether  the  design  is  applicable  for  the  pattern,  or  for  the  shape 
or  configuration,  or  for  the  ornament  thereof,  or  for  any  two  or 
more  of  such  purposes,  and  by  whatever  means  it  is  applicable, 
whether  by  printing,  painting,  embroidering,  weaving,   sewing, 
modelling,  casting,  embossing,  engraving,   staining  or   any  other 
means  whatever,  manual,   mechanical  or  chemical,  separate  or 
combined,  but  does  not  include  any  trade  or  property  mark  as 

defined  in  sections  478  end  479  of  the  Indian  Penal  Code  :  Xl/v  of  1860. 

(6)  "  District  Court  "  has  the  meaning  assigned  to  that  ex- 
pression by  the  Code  of  Civil  Procedure,  1908  :  V  of  1908. 

(7)  "  High  Court  "  has  the  meaning  assigned  to  that  expres- 
sion by  the  Code  of  Criminal  Procedure,    1898,  in  reference  to  V  of  1898. 
preceding  against  European  British  subjects  : 

(£)  "  invention  "  means  any  manner  of  new  manufacture  and 
includes  an  improvement  and  an  alleged  invention  : 


142 

(p)  'legal  representative"  means  a  person  who  in  law 
represents  the  estate  of  a  deceased  person  : 

(10)  "manufacture"  includes  any  art,  process  or  manner 
of  producing,  preparing  or  making  an  article,  and  also  any  article 
prepared  or  produced  by  manufacture  : 

(//)  "  patent  "  means  a  patent  granted  under  the  provisions 
of  this  Act  : 

(12}  "  patentee "  means  the  person  for  the  time  being 
entitled  to  the  benefit  of  a  patent : 

(f3)  '' prescribed  "  includes  prescribed  by  rules  under  this 
Act :  and 

(/^)  "  proprietor  of  a  new  and  original  design/' — 

(a)  where  the  author  of  the  design,  for  good  consideration, 

executes  the  work  for  some  other  person,  means  the 
person  for  whom  the  design  is  so  executed  ;  and 

(b)  where   any  person  acquires   the   design  or  the  right  to 

apply  the  design  to  any  article,  either  exclusively  of 
any  other  person  or  otherwise,  means,  in  the  respect 
and  to  the  extent  in  and  to  which  the  design  or 
right  has  been  so  acquired,  the  person  by  whom  the 
design  or  right  is  so  acquired  ;  and 

(c)  in  any  other  case,  means  the  author  of  the  design  ; 

and  where  the  property  in,  or  the  right  to  apply,  the  design  has 
devolved  from  the  original  proprietor  upon  any  other  person, 
includes  that  other  person. 


PART   I. 

PATENTS. 

Application  for  and  Grant  of  Patent. 

Application.  3.   (/)  An   application  for  a  patent  may  be  made  by  any 

person  whether  he  is  a  British  subject  or  not,  and  whether  alone 
or  jointly  with  any  other  person. 

(2)  The  application  must  be  made  in  the  prescribed  form, 
and  must  be  left  at  the  Patent  Office  in  the  prescribed  manner. 

(j)  The  application  must  contain  a  declaration  to  the  effect 
that  the  applicant  is  in  possession  of  an  invention,  whereof  he, 
or  in  the  case  of  a  joint  application  one  at  least  of  the  ap- 
plicants, claims  to  be  the  true  and  first  inventor  or  the  legal 
representative  or  assign  of  such  inventor  and  for  which  he  de- 
sires to  obtain  a  patent,  and  must  be  accompanied  by  a  specifica- 
tion and  by  the  prescribed  fee. 

(4)  Where  the  true  and  first  inventor  is  not  a  party  to  the 
application,  the  application  must  contain  a  statement  of  his 
name,  and  such  particulars  for  his  identification  as  may  be  pre- 


143 

scribed,  and  the  applicant  must  show  that  he  is  the  legal  represen- 
tative or  assign  of  such  inventor. 

4.  (/)  The  specification  must  particularly  describe  andascer-  specification, 
tain  the  nature  of  the  invention  and  the  manner  in  which  the 

same  is  to  be  performed. 

(2)  Where  the  Controller  deems  it  desirable,  he  may  require 
that  suitable  drawings  shall  be  supplied  with  the  specification, 
or  at  any  time  before  the  acceptance  of  the  application,  and 
such  drawings  shall  be  deemed  to  form  part  of  the  specification. 

(j)  The  specification  must  commence  with  the  title,  and 
must  end  with  a  distinct  statement  of  the  invention  claimed. 

(^)  If  in  any  particular  case  the  Controller  considers  that 
an  application  should  be  further  supplemented  by  a  model  or 
sample  of  anything  illustrating  the  invention  or. alleged  to  consti- 
tute an  invention,  such  model  or  sample  as  he  may  require  shall 
be  furnished  before  the  acceptance  of  the  application,  but  such 
model  or  sample  shall  not  be  deemed  to  form  part  of  the  speci- 
fication. 

5.  (/)  The  Controller   shall  examine  every  application,  and  Proceedings  upon 
if  he  considers  that—  application. 

(a)  the  nature  of  the  invention  is  not  fairly  described,  or 

(b)  the   application,   specification   and   drawings   have   not 

been  prepared  in  the  prescribed  manner  or  relate  to 
more  than  one  invention,  or 

(c)  the  title  does  not  sufficiently  indicate  the  subject-matter 

of  the  invention,  or 

(d)  the  statement  of  claim  does   not  sufficiently   define   the 

invention,  or 

(e)  the  invention  as  described  and  claimed  is  prima,  facie 

not  a  new  manufacture  or  improvement 

he  may  refuse  to  accept  the  application,  or  require  that  the  appli- 
cation, specification  or  drawings  be  amended  before  he  proceeds 
with  the  application  ;  and  in  the  latter  case  the  application  shall, 
if  the  Controller  so  directs,  bear  date  as  from  the  time  when  the 
requirement  is  complied  with. 

(2)  Where  the  Controller  refuses  to  accept  an  application  or 
requires  an  amendment,  the  applicant  may  appeal  from  his 
decision  to  the  Governor  General  in  Council. 

(j)  The  investigations  required  by  this  section  shall  not  be 
held  in  any  way  to  guarantee  the  validity  of  any  patent,  and  no 
liability  shall  be  incurred  by  the  Governor  General  in  Council 
or  any  officer  by  reason  of,  or  in  connection  with,  any  such  in- 
vestigation, or  any  proceeding  consequent  thereon. 

(^)  Unless  an  application  is  accepted  within  twelve  months 
from  the  date  of  the  application,  the  application  shall  (except 
where  an  appeal  has  been  lodged)  become  void  : 

Provided  that  where  an  application  is  made  for  an  extension 
of  time  for  the  acceptance  of  an  application,  the  Controller  shall 


144 


Advertisement  on 
acceptance  of 
application. 


Use  of  invention 
on  acceptance  of 
application. 


Inquiry  before 
sealing  patent. 


Opposition  to 
grant  of  patent. 


Grant  and  sealing 
of  patent. 


on  payment  of  the  prescribed  fee,  grant  an  extension  of  time  to 
the  extent  applied  for  but  not  exceeding  three  months. 

6.  On  the  acceptance  of  an  application  the  Controller  shall 
give  notice  thereof  to  the  applicant   and   shall  advertise  the   ac- 
ceptance;  and   the  application   and  specification  with  the  draw- 
ings (if  any))  shall  be  open  to  public  inspection. 

7.  Where  an  application  for  a  patent  in  respect  of  an  inven- 
tion has  been  accepted,  any  use  or  publication  of  the  invention 
during  the  period  between  the  date  of  application  and  the  date  of 
sealing  such  patent  shall  not  prejudice  the  patent  to   be  granted 
for  the  invention  : 

Provided  that  an  applicant  shall  not  be  entitled  to  institute 
any  proceedings  for  infringement  unless  and  until  a  patent  for 
the  invention  has  been  granted  to  him. 

8.  After   acceptance   of  an  application  and  before  sealing  a 
patent  the  Controller  shall,  if  he  thinks  it  advisable  or  is  directed 
by  the  Governor  General  in  Council  so  to  do,  refer  the  specifica- 
tion  for  inquiry  and  report  to  any  person  whom  he  thinks  fit. 

9.  (/)  Any  person  may,  on  payment  of  the  prescribed  fee, 
at  any  time  within  three  months  from  the  date  of  the  advertise- 
ment of  the   acceptance  of  an    application,    give    notice   at    the 
Patent  Office  of  opposition  to  the  grant  of  the  patent  on  any  of 
the  following  grounds,  namely  :  — 

(a)  that  the  applicant  obtained   the  invention    from   him, 

or  from  a  person  of  whom  he  is  the  legal  representa- 
tive or  assign  ;  or 

(b)  that  the  invention  has  been  claimed  in  any  specification 

filed  in  British  India  which  is  or  will  be  of  prior  date 
to  the  patent,  the  grant  of  which  is  opposed  ;  or 

(c)  that  the  nature  of  the  invention  or  the  manner  in  which 

it  is  to  be  performed  is  not  sufficiently  or  fairly  de- 
scribed and  ascertained  in  the  specification  ;  or 

(d)  that  the  invention   has   been  publicly  used  in  any  part 

of  British  India  or  has  been  made  publicly  known  in 
any  part  of  British  India  ; 
but  on  no  other  ground. 

(2)  Where  such  notice  is  given,  the  Controller  shall  give 
notice  of  the  opposition  to  the  applicant,  and  shall,  on  the  ex- 
piration of  those  three  months,  after  hearing  the  applicant  and 
the  opponent,  if  desirous  of  being  heard,  decide  on  the  case. 

(j)  The  decision  of  the  Controller  shall  be  subject  to  appeal 
to  the  Governor  General  in  Council. 

10.  (/)  If  there  is  no  opposition,  or,  in  case  of  opposition,  if 
the  determination  is  in  favour  of  the  grant  of  a  patent,  a  patent 
shall,  on  payment   of  the  prescribed  fee,  be  granted,  subject  to 
such  conditions   (if  any)   as   the   Governor   General   in   Council 
thinks  expedient,  to  the  applicant,  or  in  the  case  of  a  joint  ap- 
plication to  the  applicants  jointly,  and  the  Controller  shall  cause 
the  patent  to  be  sealed  with  the  seal  of  the  Patent  Office. 


145 

(2)  A  patent  shall  be  sealed  as  soon  as  may  be,  and  not 
after  the  expiration  of  eighteen  months  from  the  date  of  applica- 
tion : 

Provided  that, — 

-  (a)  where  the  Controller  has  allowed  an  extension  of  the  time 
within  which  an  application  may  be  accepted,  a 
further  extentsion  of  four  months  after  the  said 
eighteen  months  shall  be  allowed  for  the  sealing  of 
the  patent  ; 

(b)  where  the  sealing  is  delayed  by  an  appeal  to  the  Gover- 

nor General  in  Council,  or  by  a  reference  under  sec- 
tion 8,  or  by  opposition  to  the  grant  of  the  patent, 
the  patent  may  be  sealed  at  such  time  as  the  Con- 
troller may  direct  ; 

(c)  where  the  patent  is  granted  to  the  legal  representative  of 

an  applicant  who  has  died  before  the  expiration  of 
the  time  which  would  otherwise  be  allowed  for  sealing 
the  patent,  the  patent  may  be  sealed  at  any  time 
within  twelve  months  after  the  date  of  his  death ; 

(d)  where  in  consequence  of  the  neglect  or  failure  of  the 

applicant  to  pay  any  fee  a  patent  cannot  be  sealed 
within  the  period  allowed  by  this  section,  that  period 
may,  on  payment  of  the  prescribed  fee  and  on  com- 
pliance with  the  prescribed  conditions,  be  extended 
to  such  an  extent  as  may  be  prescribed. 

11.  Bxcept  as  otherwise  expressly  provided  by  this  Act,  Date  of  patent 
a  patent  shall  be  dated  and  sealed  as  of  the  date  of  the  applica- 
tion : 

Provided  that  no  proceedings  shall  be  taken  in  respect  of 
an  infringement  committed  before  the  publication  of  the  spe- 
cification. 

12.  (/)  A  patent  sealed  with  the  seal  of  the  Patent  Office  Effect,  extent  and 
shall,  subject  to  the  other  provisions  of  this  Act,  confer  on  the  form  of  patent, 
patentee  the  exclusive  privilege  of  making,  selling  and  using  the 

invention  throughout  British  India  and  of  authorizing  others  so 
to  do. 

(2)  Kvery  patent  may  be  in  the  prescribed  form  and  shall  be 
granted  for  one  invention  only,  but  the  specification  may  contain 
more  than  one  claim ;  and  it  shall  not  be  competent  for  any  per- 
son in  a  suit  or  other  proceeding  to  take  any  objection  to  a  patent 
on  the  ground  that  it  has  been  granted  for  more  than  one  inven- 
tion. 

13.  (/)  A  patent  granted  to  the  true  and  first  inventor  or  Fraudulent 
his  legal  representative  or  assign  shall  not  be  invalidated  by  an  a^ctgtions  for 
application  in  fraud  of  him,  or  by  protection  obtained  thereon  p 

or  by  any  use  or  publication  of  the  invention  subsequent  to  that 
fraudulent  application  during  the  period  of  protection. 

(2)  Where  a  patent  has  been  revoked  on  the  ground  of 
fraud  or  on  any  other  ground,  the  Controller  may,  on  the  ap- 

19 


146 

plication  of  the  true  inventor  or  his  legal  representative  or 
assign  made  in  accordance  with  the  provisions  of  this  Act,  grant 
to  him  a  patent  in  lieu  of  and  bearing  the  same  date  as  the 
patent  so  revoked  for  any  invention  comprised  in  the  revoked 
patent  to  which  he  was  entitled  : 

Provided  that  no  suit  shall  be  brought  for  any  infringement 
of  the  patent  so  granted  committed  before  the  actual  date  when 
such  patent  was  granted. 


Term  of  patent. 


Extension  of  term 
of  patent. 


Term  of  Patent. 

14.  (/)  The  term  limited  in  every  patent  for  the  duration 
thereof  shall,  save  as  otherwise  expressly  provided  by  this  Act, 
be  fourteen  years  from  its  date. 

(2)  A  patent  shall,  notwithstanding  anything  therein  or  in 
this  Act,  cease  if  the  patentee  fails  to  pay  the  prescribed  fees 
within  the  prescribed  times  : 

Provided  that  the  Controller,  upon  the  application  of  the 
patentee,  shall,  on  receipt  of  such  additional  fee  as  may  be 
prescribed,  enlarge  the  time  to  such  an  extent  as  may  be  applied 
for  but  not  exceeding  three  months. 

(j)  If  any  proceeding  is  taken  in  respect  of  an  infringement 
of  the  patent  committed  after  a  failure  to  pay  any  fee  within  the 
prescribed  time,  and  before  any  enlargement  thereof,  the  Court 
before  which  the  proceeding  is  taken  may,  if  it  thinks  fit,  refuse 
to  award  any  damages  in  respect  of  such  infringement. 

15.  (/)  A  patentee  may,  after  advertising  in  the  prescribed 
manner  his  intention  to  do  so,  present  a  petition  to  the  Governor 
General  in  Council  praying  that  his  patent  may  be  extended  for 
a  further  term  ;  but    such  petition   must,  be  left  at  the  Patent 
Office  at  least  six  months  before  the  time  limited  for  the  expira- 
tion of  the   patent  and  must  be  accompanied  by  the  prescribed 
fee. 

(2)  Any  person  may  give  notice  to  the  Controller  of  objec- 
tion to  the  extension. 

(j)  Where  a  petition  is  presented  under  sub-section  (/),  the 
Governor  General  in  Council  may,  as  he  thinks  fit,  dispose  of  the 
petition  himself  or  refer  it  to  a  High  Court  for  decision. 

(4)  If  the  petition  be  referred  to  a  High  Court,  then  on  the 
hearing  of  such  petition  under  this  section  the  patentee,  and  any 
person  who  has  given  notice  under  sub-section  (2}  of  objection, 
shall  be  made  parties  to  the  proceeding,  and  the  Controller  shall 
be  entitled  to  appear  and  be  heard. 

(5)  The   Court  to  which  the  petition  is  referred  shall,   in 
considering  its  decision,  have  regard  to  the  nature  and  merits  of 
the  invention  in  relation  to  the  public,  to  the  profits  made  by 
the  patentee  as  such,  and  to  all  the  circumstances  of  the  case. 

(6)  If  it  appears  to  the  Governor  General  in  Council,  or  to 
the  High  Court  when  the  petition  has  been  referred  to  it,   that 
the  patentee  has  been  inadequately  remunerated  by  his  patent, 


147 

the  Governor  General  in  Council  or  the  High  Court,  as  the  case 
may  be,  may  by  order  extend  the  term  of  the  patent  for  a 
further  term  not  exceeding  seven,  or,  in  exceptional  cases,  four- 
teen years,  or  may  order  the  grant  of  a  new  patent  for  such  term 
as  may  be  specified  in  the  order  and  subject  to  the  payment  of 
such  fees  as  may  be  prescribed  and  containing  any  restriction, 
conditions  and  provisions  which  the  Governor  General  in  Council 
or  the  High  Court,  as  the  case  may  be,  may  think  fit  : 

Provided  that  any  patent  so  extended  or  granted  shall, 
notwithstanding  anything  therein,  or  in  this  Act,  cease  if  the 
inventor  fails  to  pay  before  the  expiration  of  each  year  the  pre- 
scribed fee. 

16.  (/)  Where  any  patent  has  ceased  owing   to  the  failure  Restoration  of 
of  the  patentee  to  pay  any  prescribed  fee  within  the  prescribed  laPsed  patent, 
time,  the  patentee  may  apply  to  the  Controller  in  the  prescribed 

manner  for  an  order  for  the  restoration  of  the  patent. 

(2)  Every  such  application  shall  contain  a  statement  of  the 
circumstances  which  have  led  to  the  omission  of  the  payment 
of  the  prescribed  fee. 

(j)  If  it  appears  from  such  statement  that  the  omission 
was  unintentional  or  unavoidable  and  that  no  undue  delay  has 
occurred  in  the  making  of  the  application,  the  Controller  shall 
advertise  the  application  in  the  prescribed  manner,  and  within 
such  time  as  may  be  prescribed  any  person  may  give  notice  of 
opposition  at  the  Patent  Office. 

(4)  Where  such  notice  is  given  the  Controller  shall  notify 
the  applicant  thereof. 

(5)  After  the  expiration  of  the  prescribed   period   the  Con- 
troller  shall  hear   the    case    and,   subject  to  an  appeal  to  the 
Governor  General  in  Council,  issue  an  order  either  restoring  the 
patent  subject  to    any    conditions  deemed  to  be    advisable  or 
dismissing  the  application  : 

Provided  that  in  every  order  under  this  section  restoring  a 
patent  such  provisions  as  may  be  prescribed  shall  be  inserted  for 
the  protection  of  persons  who  may  have  availed  themselves  of 
the  subject-matter  of  the  patent  after  the  patent  had  ceased. 

Amendment  of  Application  or  Specification. 

17.  (/)  An  applicant   or  a  patentee  may  at  anytime,  by  Amendment  of 
request  in  writing  left  at  the  Patent  Office  and  accompanied  by  application  or 
the  prescribed  fee,    seek  leave  to  amend  his  application  or  spe-  ^^^m  by 
cification,  including  drawings  forming  part  thereof,  by  way    of 
disclaimer,  correction  or  explanation,  stating  the  nature  of,  and 

the  reasons  for,  the  proposed  amendment. 

(2)  If  the  application  for  a  patent  has  not  been  accepted, 
the  Controller  shall  determine  whether  and  subject  to  what 
conditions  (if  any)  the  amendment  shall  be  allowed. 

( j)  In  any  other  case  the  request  and  the  nature  of  the  pro- 
posed amendment  shall  be  advertised  in  the  prescribed  manner, 


148 


Amendment  of 
specification  by 
the  Court. 


Restriction  on 
recovery  of 
damages. 


and  at  any  time  within  three  months  from  its  first  advertisement 
any  person  may  give  notice  at  the  Patent  Office  of  opposition  to 
the  amendment. 

(4)  Where  such   a  notice   is  given  the  Controller  shall  give 
notice  of  the  opposition  to  the  person  making  the  request,   and 
shall  hear  and  decide  the  case. 

(5)  Where  no  notice  of  opposition  is  given,  or  the  person  so 
giving  notice  of  opposition  does  not  appear,  the  Controller  shall 
determine  whether  and  subject  to  what  conditions,  if  any,  the 
amendment  ought  to  be  allowed. 

(6)  The  decision  of   the  Controller  in  either  case  shall  be 
subject  to  an  appeal  to  the  Governor  General  in  Council. 

(7)  No   amendment   shall  be  allowed  that  would  make  the 
application   or   specification,    as   amended,   claim    an  invention 
substantially  larger  than,  or  substantially  different  from,  the  in- 
vention claimed  by  the  application   or   specification   as  it  stood 
before  amendment. 

((?)  I/eave  to  amend  shall  be  conclusive  as  to  the  right  of 
the  party  to  make  the  amendment  allowed,  except  in  case  of 
fraud  ;  and  the  amendment  shall  be  advertised  in  the  prescribed 
manner,  and  shall  in  all  Courts  and  for  all  purposes  be  deemed 
to  form  part  of  the  application  or  specification. 

(9)  This  section  shall  not  apply  when  and  so  long  as  any 
suit  for  infringement  or  proceeding  before  a  Court  for  the 
revocation  of  the  patent  is  pending. 

18.  In  any  suit  for  infringement  of  a  patent  or  proceeding 
before  a  Court  for  the  revocation  of  a  patent  the  Court   may  by 
order  allow  the  patentee   to  amend  his  specification  by  way  of 
disclaimer  in  such  manner,  and  subject  to  such  terms  as  to  costs, 
advertisement  or  otherwise,  as  the  Court  may  think  fit  : 

Provided  that  no  amendment  shall  be  so  allowed  that  would 
make  the  specification,  as  amended,  claim  an  invention  sub- 
stantially larger  than,  or  substantially  different  from,  the  inven- 
tion claimed  by  the  specification  as  it  stood  before  the  amend- 
ment, and  where  an  application  for  such  an  order  is  made  to  the 
Court  notice  of  the  application  shall  be  given  to  the  Controller, 
and  the  Controller  shall  have  the  right  to  appear  and  be  heard. 

19.  Where  an  amendment  of  a  specification  by  way  of  dis- 
claimer, correction  or  explanation   has  been  allowed  under  this 
Act,  no  damages  shall  be  given  in  any  suit  in  respect  of  the  use 
of  the  invention  before  the  disclaimer,  correction  or  explanation, 
unless  the  patentee  establishes  to  the  satisfaction  of  the  Court 
that  his  original  claim  was   framed  in  good  faith  and  with  rea- 
sonable skill  and  knowledge. 


Register  of  Patents. 

Register  of  20.     (/)  There  shall  be  kept  at  the  Patent  Office  a  book 

Patents.  called   the   Register  of  Patents,   wherein   shall  be  entered  the 

names   and    addresses   of  grantees  of  patents,    notifications  of 


149 

assignments  and  of  transmissions  of  patents,  of  lincenses  under 
patents,  and  of  amendments,  extensions,  and  revocations  of 
patents,  and  such  other  matters  affecting  the  validity  or  pro- 
prietorship of  patents  as  may  be  prescribed. 

(2}  The  register  of  inventions  and  address  book  existing  at 
the  commencement  of  this  Act  shall  be  incorporated  with,  and 
form  part  of,  the  register  of  patents  under  this  Act. 

(j)  The  register  of  patents  shall  be  primd  facie  evidence  of 
any  matters  by  this  Act  directed  or  authorised  to  be  inserted 
therein. 

(4)  Copies  of  deeds,  licenses  and  any  other  documents  affect- 
ing the  proprietorship  in  any  patent  or  in  any  license  there- 
under, must  be  supplied  to  the  Controller  in  the  prescribed  man- 
ner for  riling  in  the  Patent  Office,  and,  unless  such  copies  have 
been  so  supplied,  such  deeds,  licenses  or  other  documents  shall 
not  be  received  as  evidence  of  any  transaction  affecting  a  patent. 

Crown. 

21.  Subject  to  any  conditions  which  the  Governor  General  Patent  to  bind 
in  Council  may  have  imposed,  a  patent  shall  have  to  all  intents  Crown. 

the  like  effect  as  against  His  Majesty  as  it  has  against  a  subject :  « 

Provided  that  the  officers  or  authorities  administering  any 
department  of  the  service  of  His  Majesty  may,  by  themselves, 
their  agents,  contractors  or  others,  at  any  time  after  the  applica- 
tion, use  the  invention  for  the  services  of  the  Crown  on  such  terms 
as  may,  either  before  or  after  the  use  thereof,  be  agreed  on,  with 
the  approval  of  the  Governor  General  in  Council,  between  those 
officers  or  authorities  and  the  patentee,  or,  in  default  of  agreement, 
as  may  be  settled  by  the  Governor  General  in  Council  after  hear- 
ing all  parties  interested. 

Compulsory  Licenses  and  Revocation. 

22.  (/)  Any  person  interested  may  present  a  petition  to  Compulsory 
the   Governor    General    in   Council,   which  shall   be  left  at  the  licenses  and 
Patent  Office,   together  with  the  prescribed  fee,  alleging  that  the  revocatlon- 
reasonable    requirements    of   the  public  with  respect  to  a  pa- 
tented invention  have  not  been  satisfied,  and  praying  for  the 

grant  of  a  compulsory  license,  or,  in  the  alternative,  for  the 
revocation  of  the  patent. 

(2)  The  Governor  General  in  Council  shall  consider  the  peti- 
tion, and  if  the  parties  do  not  come  to  an  arrangement  between 
themselves  the  Governor  General  in  Council  may,  as  he  thinks  fit, 
either  dispose  of  the  petition  himself  or  refer  it  to  a  High  Court 
for  decision. 

(j)  The  provisions  of  sub-section  (^)  of  section  15,  prescribing 
the  procedure  to  be  followed  in  the  case  of  references  to  the 
Court  under  that  section,  shall  apply  in  the  case  of  references 
made  to  the  Court  under  this  section. 

(4)  If  the  Governor  General  in  Council  is  of  opinion,  or, 
where  a  reference  has  been  made  under  sub-section  (2)  to  a  High 


150 


Revocation  of 
patents  worked 
outside  British 
India. 


Court,  that  Court  finds,  that  the  reasonable  requirements  of  the 
public  with  reference  to  the  patented  invention  have  not  been 
satisfied,  the  patentee  may  be  ordered  to  grant  licenses  on  such 
terms  as  the  Governor  General  in  Council  or  the  High  Court,  as 
the  case  may  be,  may  think  just,  or,  if  the  Governor  General  in 
Council  or  the  High  Court  is  of  opinion  that  the  reasonable 
requirements  of  the  public  will  not  be  satisfied  by  the  grant  of 
licenses,  the  patent  may  be  revoked  by  order  of  the  Governor 
General  in  Council  or  the  High  Court  : 

Provided  that  an  order  of  revocation  shall  not  be  made 
before  the  expiration  of  four  years  from  the  date  of  the  patent, 
or  if  the  patentee  gives  satisfactory  reasons  for  his  default. 

(5)  For  the  purposes  of  this  section  the  reasonable  require- 
ments of  the  public  shall  not  be  deemed  to  have  been  satisfied  — 

(a)  if  by  reason  of  the  default  of  the  patentee  to  manufac- 

ture to  an  adequate  extent  and  supply  on  reasonable 
terms  the  patented  article,  or  any  parts  thereof  which 
are  necessary  for  its  efficient  working,  or  to  carry  on 
the  patented  process  to  an  adequate  extent  or  to  grant 
licenses  on  reasonable  terms,  any  existing  trade  or 
industry  or  the  establishment  of  any  new  trade  or 
industry  in  British  India  is  unfairly  prejudiced,  or  the 
demand  for  the  patented  article  or  the  article  produced 
by  the  patented  process  is  not  reasonably  met ;  or 

(b)  if   any    trade   or   industry  in  British  India  is  unfairly 

prejudiced  by  the  conditions  attached  by  the  patentee 
before  or  after  the  commencement  of  this  Act  to  the 
purchase,  hire  or  use  of  the  patented  article  or  to  the 
using  or  working  of  the  patented  process. 

(6)  An  order  of  the  Governor  General  in  Council  or  of  the 
High  Court  directing  the  grant  of  any  license  under  this  section 
shall,   without  prejudice  to   any   other  method  of  enforcement, 
operate  as  if  it  were  embodied  in  a  deed  granting  a  license  and 
made  between  the  parties  to  the  proceeding 

23.  (/)  At  any  time  not  less  than  four  years  after  the  date 
of  a  patent  granted  under  this  Act,  any  person  may  apply  to  the 
Governor  General  in  Council  for  the  revocation  of  the  patent  on 
the  ground  that  the  patented  article  or  process  is  manufactured 
or  carried  on  exclusively  or  mainly  outside  British  India. 

(2)  The  Governor  General  in  Council  shall  consider  the 
application,  and,  if  after  inquiry,  he  is  satisfied— 

(a)  that  the  allegations  contained  therein  are  co'rrect ;  and 

(b)  that  the  applicant   is  prepared,    and  is  in  a  position,  to 

manufacture  or  carry  on  the  patented  article  or  pro- 
cess in  British  India  ;  and 

(c)  that  the  patentee  refuses  to  grant  a  license  on  reasonable 

terms, 

then,  subject  to  the    provisions  of  this  section,   and  unless  the 
patentee  proves  that  the  patented   article  or   process  is  manu- 


factured  or  carried  on  to  an  adequate  extent  in  British  India,  or 
gives  satisfactory  reasons  why  the  article  or  process  is  not  so 
manufactured  or  carried  on,  the  Governor  General  in  Council  may 
make  an  order  revoking  the  patent  either — 

(i)  forthwith  ;  or 

(ii)  after  such  reasonable  interval  as  may  be  specified  in  the 
order,  unless  in  the  meantime  it  is  shown  to  his 
satisfaction  that  the  patented  article  or  process  is 
manufactured  or  carried  on  within  British  India  to  an 
adequate  extent. 

(j)  No  order  revoking  a  patent  shall  be  made  under  the  last 
sub-section  which  is  at  variance  with  any  treaty,  convention, 
arrangement  or  engagement  with  any  foreign  country  or  British 
possession. 

(4)  The  Governor  General  in  Council  may,  on  the  applica- 
tion of  the  patentee,  extend  the  time  limited  in  any  order  made 
under  sub-section  (2),  clause  (ii),  for  such  period  not  exceeding 
two  years  as  he  may  specify  in  a  subsequent  order,  or  revoke 
any  order  made  under  sub-section  (2},  clause  (ii),  or  any  sub- 
sequent order  if  sufficient  cause  is,  in  his  opinion,  shown  by  the 
patentee. 

24.  A  patentee  may  at  any  time,   by  giving  notice  in  the  „     er  Q{ 
prescribed  manner  to  the   Controller,   offer  to  surrender  his  pa-  Controller  to 
tent,  and  the  Controller  may,  if  after  giving   notice   of  the   offer  revoke  surrendered 
and  hearing  al    parties  who   desire  to  be  heard   he  thinks  fit,  patent. 

accept  the  offer,  and  thereupon  make  an  order  for  the  revocation 
of  the  patent. 

25.  A  patent  shall  be  deemed  to  be  revoked  if  the  Governor  Revocationo  f 
General  in   Council  declares,   by   notification  in  the   Gazette  of  patent  on  public 
India,  the  patent  or  the  mode  in  which   it  is   exercised   to  be  grounds, 
mischievous  to  the  State  or  generally  prejudicial  to  the  public. 

Legal  Proceedings. 

26.  (/)  Revocation  of  a  patent  in  whole  or  in  part  may  be  Petition  for 
obtained  on  petition   to   a  High   Court  on  all  or  any  of  the  fol-  revocation  of 
lowing  grounds,  namely  :—  patent. 

(a)  that  any  invention  included  in  the  statement  of  claim 

is  of  no  utility  ; 

(b)  that  any  invention   included  in   the  statement  of  claim 

was  not,  at  the  date  of  the  application  for  a  patent, 
a  new  invention  within  the  meaning  of  this  Act ; 

(c)  that  the  applicant  was  not  the  true  and  first  inventor 

thereof  or  the  assign  or  legal   representative  of  such 
inventor  thereof ; 

(d)  that  the  original   or   any  amended  application  or  speci- 

fication does  not  fulfil  the  requirements  of  this  Act  ; 

(e)  that  the    applicant  has   knowingly  or  fraudulently   in- 

cluded in   the   application   for   a   patent   or   in   the 


152 

original  or  any  amended  specification,  as  his  inven- 
tion, something  which  was  not  new  or  whereof  he  was 
neither  the  inventor  nor  the  assign  nor  the  legal 
representative  of  such  inventor  ; 

(/)  that  the  original  or  any  subsequent  application  relating 
to  the  invention,  or  the  original  or  any  amended 
specification,  contains  a  wilful  or  fraudulent  mis- 
statement  ; 

(g)  that  a  part  of  the  invention  or  the  manner  in  which  a 
part  is  to  be  made  and  used  as  described  in  the 
original  or  any  amended  specification,  is  not  thereby 
sufficiently  described,  and  that  this  insufficiency  was 
fraudulent  or  is  injurious  to  the  public. 

(2)  A  petition  for  revocation  of  a  patent  may  be  presented— 

(a)  by  the  Advocate  General  or  any  person  authorized 

by  him  ;  or 

(b)  by  any  person  alleging — 

(1)  that  the  patent  was  obtained  in  fraud  of  his  rights,  or 

of  the  rights  of  any  person  under  or  through  whom 
he  claims ;  or 

(ii)  that  he,  or  any  person  under  or  through  whom  he 
claims,  was  the  true  and  first  inventor  of  any 
invention  included  in  the  claim  of  the  patentee  ;  or 

(iii)  that  he,  or  any  person  under  or  through  whom  he 
claims  an  interest  in  any  trade,  business  or  manu- 
facture, had  publicly  manufactured,  used  or  sold, 
within  British  India,  before  the  date  of  the  patent, 
anything  claimed  by  the  patentee  as  his  invention. 

( j)  The  High  Court  may,   irrespective  of   any   provisions   of 

V  of  1908.  the  Code  of  Civil  Procedure,  1908,  in  this   behalf,   require   any 

person,  other  than  the  Advocate  General  or  any  person  autho- 
rized by  him,  applying  for  the  revocation  of  a  patent  to  give 
security  for  the  payment  of  all  costs  incurred  or  likely  to  be  in- 
curred by  any  person  appearing  to  oppose  the  petition. 

Notice  of  2^'  ('}  Notice  of  any  petition  for  revocation  of  patent 

proceedings  to  under  section  26  shall  be  served  on  all  persons  appearing  from 
persons  interested,  the  register  to  be  proprietors  of  that  patent  or  to  have  shares  or 

interests  therein,  and  it  shall  not  be  necessary  to  serve  the  notice 

on  any  other  person. 

(2)  The  notice  shall   be  deemed  to  be  sufficiently  served  if 
a  copy  thereof  is  sent  by  post  in  a  registered  letter  directed  to 
the  person  and  place  for  the  time  being  stated  in  the  register. 

Framing  issue  for  28.     (/)  A  High  Court  may,  if  it  thinks  fit,   direct   an    issue 

trial  before  other  for  the  trial,  before  itself  or  any  other  High  Court,  or  any  dis- 
trict Court,  of  any  question  arising  upon  a  petition  to  itself 
under  section  26,  and  the  issue  shall  be  tried  accordingly. 

(2)  If  the  issue  is  directed  to  another  High  Court,  the  find- 
ing shall  be  certified  by  that  Court  to  the  High  Court  directing 
the  issue. 


153 

(j)  If  the  issue  is  directed  to  a  District  Court,  the  rinding 
of  the  Court  shall  not  be  subject  to  appeal,  but  the  evidence 
taken  upon  the  trial  shall  be  recorded  and  a  copy  thereof, 
certified  by  the  Judge  of  the  Court,  shall  be  transmitted,  together 
with  any  remarks  which  he  may  think  fit  to  make  thereon,  to 
the  High  Court  directing  the  issue,  and  the  High  Court  may 
thereupon  act  upon  the  finding  of  the  District  Court,  or  dispose 
of  the  petition  upon  the  evidence  recorded,  or  direct  a  new  trial, 
as  the  justice  of  the  case  may  require. 

29.  (/)   A  patentee  may  institute  a  suit  in  a  District  Court  Suits  for 
having  jurisdiction  to    try    the    suit    against    any    person    who,  infringement  of 
during  the    continuance  of  a  patent  acquired  by  him  under  this  Patents- 

Act  in  respect  of  an  invention,  makes,  sells  or  uses  the  invention 
without  his  license,  or  counterfeits  it,  or  imitates  it. 

(2)  Every  ground  on  which  a  patent  may  be  revoked  under 
this  Act  shall  be  available  by  way  of  defence  to  a  suit  for  in- 
fringement. 

30.  A  patentee  shall  not  be  entitled  to  recover  any  dam-  Exemption  of 
ages  in  respect  of  any    infringement  of  a  patent  granted  after  innocent  infringer 
the  commencement  of  this  Act  from  any  defendant  who  proves  lrom  liability  for 
that  at   the    date    of   the   infringement  he  was  not  aware,  nor 

had  reasonable  means  of  making  himself  aware,  of  the  existence 
of  the  patent,  and  the  marking  of  an  article  with  the  word  "  pa- 
tent," "  patented,"  or  any  word  or  words  expressing  or  implying, 
that  a  patent  has  been  obtained  for  the  article,  stamped,  engraved, 
impressed  on,  or  otherwise  applied  to  the  article,  shall  not  be 
deemed  to  constitute  notice  of  the  existence  of  the  patent  unless 
the  word  or  words  are  accompanied  by  the  year  and  number  of  the 
patent : 

Provided  that  nothing  in  this  section  shall  affect  any  proceed- 
ings for  an  injunction. 

31.  In  a  suit  for  infringement  of  a  patent,  the  Court  may,  Order  for 

on  the  application  of  either  party,  make  such  order  for  an  injunc-  inspection,  etc.,  in 
tion,  inspection  or  account,  and  impose  such  terms  and  give  such  sult> 
directions  respecting  the  same  and  the  proceedings  thereon,  as  the 
Court  may  see  fit. 

32.  In  a  suit  for  infringement  of  a  patent  the  Court  may  Certificate  of 
certify  that  the  validity  of  the  patent  came  in  question,  and  if  validity  questioned 
the  Court  so  certifies,  then  in  any  subsequent  suit  in  that  Court  and  ' 

for  infringement  of  the  same  patent  the  plaintiff,  on  obtaining  a 
final  order  or  judgment  in  his  favour,  shall,  unless  the  Court 
trying  the  suit  otherwise  directs,  have  his  full  costs,  charges 
acid  expenses  of  and  incidental  to  the  said  suit  properly  in- 
curred. 

33.  A  Court  making  a  decree  in  a  suit  under  section  29,  or  Transmission  of 
an  order  on  a  petition  under  section  26,  shall  send  a  copy  of  the  decrees  and  orders 
decree  or  order,  as  the  case  may  be,  to  the  Controller,  who  shall t( 

cause  an  entry  thereof  and  reference  thereto  to  be  made  in  the 
register  of  patents. 

34.  A  High  Court  to  which  a  petition  has  been  presented  Power  of  High 
under  section  26  may  stay  proceedings  on,  or  dismiss,  the  petition  Court  to  stay 
if  in  its  opinion  the  petition  would  be  disposed  of  more  justly  or  p 
conveniently  by  another  High  Court. 

20 


154 

Hearing  with  35-     (/)  In  a  suit  or  proceeding  for  infringement  or  revoca- 

assessor.  tion  of  a  ipatent,  the  Court  may,  if  it  thinks  fit,  and  shall  on  the 

request  of  either  of  the  parties  to  the  proceedings,  call  in  the  aid 
of  an  assessor  specially  qualified,  and  try  the  case  wholly  or  part- 
ially with  his  assistance. 

(2)  A  Court  exercising  appellate  jurisdiction  in  respect  of 
such  suit  or  proceeding  may,  if  it  thinks  fit,  call  in  the  aid  of  an 
assessor  as  aforesaid. 

(j)  The  remuneration,  if  any,  to  be  paid  to  an  assessor  under 
this  section  shall  in  every  case  be  determined  by  the  Court  and 
be  paid  by  it  as  part  of  the  expenses  of  the  execution  of  this  Act. 
Remedy  in  case  of  36.     Where  any  person  claiming    to  be  the   patentee  of  an 

groundless  threats  invention,  by  circulars,  advertisements  or  otherwise,  threatens 
nS-  any  other  person  with  any  legal  proceedings  or  liability  in  res- 
pect of  any  alleged  infringement  of  the  patent,  any  person 
aggrieved  thereby  may  bring  a  suit  against  him  in  a  District 
Court  having  jurisdiction  to  try  the  suit,  and  may  obtain  an  in- 
junction against  the  continuance  of  such  threats,  and  may  re- 
cover such  damage  (if  any)  as  he  has  sustained  thereby,  if  the 
alleged  infringement  to  which  the  threats  related  was  not  in  fact 
an  infringement  of  any  legal  rights  of  the  person  making  such 
threats  : 

Provided  that  this  section  shall  not  apply  if  the  person  mak- 
ing such  threats  with  due  diligence  commences  and  prosecutes  a 
suit  for  infringement  of  his  patent. 


Grant  of  patents  to 
two  or  more 
persons. 


Novelty  of 
invention. 


Miscellaneous. 

37.  Where,  after  the  commencement  of  this  Act,  a  patent 
is  granted  to  two  or    more  persons  jointly,   they   shall,    unless 
otherwise  specified  in  the  patent,  be  treated  for  the  purpose  of 
the  devolution  of  the  legal  interest  therein  as  joint  tenants,  but, 
subject  to  any  contract  to  the  contrary,  each  of  such  persons  shall 
be  entitled  to   use    the    invention  for    his  own  profit    without 
accounting  to  the  others,  but  shall  not  be  entitled  to  grant  a  li- 
cense without  their  consent,   and,  if  any  such  person  dies,  his 
beneficial  interest  in  the  patent  shall  devolve  on  his  legal  re- 
presentatives. 

38.  (/)  An  invention  shall  be  deemed  a  new  invention  within 
the  meaning  of  this  Act — 

(a)  if  it  has  not,  before  the  date  of  the  application  for  a 

patent  thereon,  been  publicly  used  in  any  part  of  Bri- 
tish India,  or  been  made  publicly  known  in  any  part 
of  British  India,  and 

(b]  if  the  inventor  has  not  by  secret  or  experimental  user 

made  direct  or  indirect  profits  from  his  invention  in 
excess  of  such  an  amount  as  the  Court  or  the  Governor 
General  in  Council,  as  the  case  may  be,  may,  in  consi- 
deration of  all  the  circumstances  of  the  case,  deem 
reasonable. 

(2)  The  public  use  or  knowledge  of  an  invention  before  the 
date  of  the  application  for  a  patent  thereon  shall  not  be  deemed 


155 


a  public  use  or  knowledge  within  the  meaning  of  this  Act  if  the 
knowledge  has  been  obtained  surreptitiously  or  in  fraud  of  the 
true  and  first  inventor  or  has  been  communicated  to  the  public 
in  fraud  of  such  inventor  or  in  breach  of  confidence: 

Provided  that  such  inventor  has  not  acquiesced  in  the  public 
use  of  his  invention,  and  that,  within  six  months  after  the  com- 
mencement of  that  use,  he  applies  for  a  patent. 

39.  If  a  patent  is  lost  or  destroyed,  or  its  non-production  Ivoss  or  destruction 
is  accounted  for  to  the  satisfaction  of  the  Controller,  the  Con-  of  patent, 
troller  may  at  any  time,  on  payment  of  the  prescribed  fee,  seal  a 

duplicate  thereof. 

40.  (/)  The  exhibition  of  an  invention  at  an  industrial  or  Provisions  as  to 
international  exhibition,  certified  as  such  by  the  Governor  Gen-  exhlbl 

eral  in  Council,  or  the  publication  of  any  description  of  the  inven- 
tion during  the  period  of  the  holding  of  the  exhibition,  or  the  use 
of  the  invention  for  the  purpose  of  the  exhibition  in  the  place 
where  the  exhibition  is  held,  or  the  use  of  the  invention  during 
the  period  of  the  holding  of  the  exhibition  by  any  person  else- 
where, without  the  privity  or  consent  of  the  inventor,  shall  not 
prejudice  the  right  of  the  inventor  to  apply  for  and  obtain  a  pa- 
tent in  respect  of  the  invention  or  the  validity  of  any  patent 
granted  on  the  application  : 
Provided  that — 

(a)  the  exhibitor,  before  exhibiting  the  invention,  gives 
the  Controller  the  prescribed  notice  of  his  intention  to 
do  so  ;  and 

(b)  the  application  for  a  patent  is  made  before  or  within 
six  months  from  the  date  of  the  opening  of  the  exhibi- 
tion. 

(2}  The  Governor  General  in  Council  may,  by  notification  in 
the  Gazette  of  India,  apply  this  section  to  any  exhibition  men- 
tioned in  the  notification  in  like  manner  as  if  it  were  an  indus- 
trial or  international  exhibition  certified  as  such  by  the  Governor 
General  in  Council,  and  any  such  notification  may  provide  that 
the  exhibitor  shall  be  relieved  from  the  condition  of  giving  notice 
to  the  Controller  of  his  intention  to  exhibit,  and  shall  be  so  re- 
lieved either  absolutely  or  upon  such  terms  and  conditions  as  may 
be  stated  in  the  notification. 

41.  The  trustees  of  the  Indian  Museum  may  at  any  time  re-  Models  to  be 
quire  a  patentee  to  furnish  them  with  a  model  or   sample  of  his  furnished  to  Indian 
invention  on  payment  to  the  patentee  of  the  cost  of  the   manu-  Museum- 
facture  of  the  model  or  sample,  the  amount  to  be  settled,  in  case 

of  dispute,  by  the  Governor  General  in  Council. 

42.  (/)  A  patent  shall  not  prevent  the  use  of  an  invention  for  Foreign  vessels  in 
the  purposes  of  the   navigation  of  a  foreign   vessel   within  the  British  Indian 
jurisdiction  of  any  Court  in  British  India,  or  the  use  of  an  inven-  waters. 

tion  in  a  foreign  vessel  within  that  jurisdiction,  provided  it  is  not 
used  therein  for  or  in  connection  with  the  manufacture  or  prepara- 
tion of  anything  intended  to  be  sold  in  or  exported  from  British 
India. 

(2)  This  section  shall  not  extend  to  vessels  of  any  foreign 
State  of  which  the  laws  do  not  confer  corresponding  right  with 


156 

respect  to  the  use  of  inventions  in  British  vessels  while  in  the 
ports  of  that  State,  or  in  the  waters  within  the  jurisdiction  of  its 
Courts. 


Application  for 
registration  of 
designs. 


PART  II. 
DESIGNS. 
Registration  of  Designs. 

43.  (/)  The  Controller  may,  on  the  application  of  any  person 
claiming  to  be  the  proprietor  of  any  new  or  original  design  not  pre- 
viously published  in  British  India,  register  the  design  under  this 
Part. 

(2)  The  application  must  be  made  in  the  prescribed  form  and 
must  be  left  at  the  Patent  Office  in  the  prescribed  manner  and 
must  be  accompanied  by  the  prescribed  fee. 

(j)  The  same  design  may  be  registered  in  more  than  one 
class,  and,  in  case  of  doubt  as  to  the  class  in  which  a  design  ought 
to  be  registered;  the  Controller  may  decide  the  question. 

(4)  The  Controller  may,  if  he  thinks  fit,  refuse  to  register  any 
design  presented  to  him  for  registration  ;  but  any  person  aggrieved 
by    any  such    refusal  may  appeal   to  the   Governor  General  in 
Council. 

(5)  An  application  which,  owing  to  any  default  or  neglect  on 
the  part  of  the  applicant,  has  not  been  completed  so  as  to  enable 
registration  to  be  effected  within  the  prescribed   time  shall  be 
deemed  to  be  abandoned. 

(6}  A  design  when  registered  shall  be  registered  as  of  the 
date  of  the  application  for  registration. 

44.  Where  a  design  has  been  registered  in  one  or  more  class- 
es of  goods,  the  application  of  the  proprietor  of  the  design  to 
register  it  in  some  one  or  more  other  classes  shall  not  be  refused, 
nor  shall  the  registration  thereof  be  invalidated — 

(a)  on  the  ground  of  the  design  not  being  a  new  and  ori- 

ginal design,  by  reason  only  that  it  was  so  previously 
registered  ;  or 

(b)  on    the  ground  of  the  design  having  been  previously 

published  in  British  India,  by  reason  only  that  it  has 
been  applied  to  goods  of  any  class  in  which  it  was  so 
previously  registered. 

Certificate  of  45-     (7)  The  Controller  shall  grant  a  certificate  of  registration 

registration.  to  the  proprietor  of  the  design  when  registered. 

(2)  The  Controller  may,  in  case  of  loss  of  the  original  certi- 
ficate or  in  any  other  case  in  which  he  deems  it  expedient,  furnish 
one  or  more  copies  of  the  certificate. 

Register  of  46.     (/)  There  shall  be  kept  at  the  Patent  Office  a  book  called 

Designs.  the  Register  of  Designs,  wherein  shall  be  entered  the  names  and 

addresses  of  proprietors  of  registered  designs,  notifications  of  as- 
signment and  of  transmissions  of  registered  designs,  and  such  other 
matters  as  may  be  prescribed. 


Registration  of 
designs  in  new 
classes. 


157 

(2)  The  register  of  designs  existing  at  the  commencement  of 
this  Act  shall  be  incorporated  with  and  form  part  of  the  register 
of  designs  under  this  Act. 

(j)  The  register  of  designs  shall  be  primd  facie  evidence  of 
any  matters  by  this  Act  directed  or  authorized  to  be  entered 
therein. 

Copyright  in  Registered  Designs. 

47.  (/)  When  a  design  is  registered,  the  registered  proprietor  Copyright  on 
of  the  design  shall,  subject  to  the  provisions  of  this  Act,  have  registration, 
copyright  in  the  design  during  five  years  from  the  date  of  registra- 
tion. 

(2}  If  within  the  prescribed  time  before  the  expiration  of  the 
said  five  years  application  for  the  extension  of  the  period  of  copy- 
right is  made  to  the  Controller  in  the  prescribed  manner,  the  Con- 
troller shall,  on  payment  of  the  prescribed  fee,  extend  the  period 
of  copyright  for  a  second  period  of  five  years  from  the  expiration 
of  the  original  period  of  five  years. 

(j)  If  within  the  prescribed  time  before  the  expiration  of 
such  second  period  of  five  years  application  for  the  extension 
of  the  period  of  copyright  is  made  to  the  Controller  in  the  pres- 
cribed manner,  the  Controller  may,  subject  to  any  rules  under  this 
Act.  on  payment  of  the  prescribed  fee,  extend  the  period  of  copy- 
right for  a  third  period  of  five  years  from  the  expiration  of  the 
second  period  of  five  years. 

48.  (/)   Before  delivery  on  sale  of  any  articles  to  which  a  Requirements 
registered  design  has  been  applied,  the  proprietor  shall —  before  delivery  on 

sale 

(a)  (if  exact  representations  or  specimens  were  not  furnished 

on  the  application  for  registration),  furnish  to  the  Con- 
troller the  prescribed  number  of  exact  representations 
or  specimens  of  the  design  ;  and,  if  he  fails  to  do  so, 
the  Controller  may  erase  his  name  from  the  register, 
and  thereupon  the  copyright  in  the  design  shall  cease  ; 
and 

(b)  cause  each  such  article  to  be  marked  with  the  prescribed 

mark,  or  with  the  prescribed  words  or  figures,  denot- 
ing that  the  design  is  registered  ;  and,  if  he  fails  to  do 
so,  the  proprietor  shall  not  be  entitled  to  recover 
any  penalty  or  damages  in  respect  of  any  infringement 
of  his  copyright  in  the  design  unless  he  shows  that  he 
took  all  proper  steps  to  ensure  the  marking  of  the 
article,  or  unless  he  shows  that  the  infringement  took 
place  after  the  person  guilty  thereof  knew  or  had  re- 
ceived notice  of  the  existence  of  the  copyright  in  the 
design. 

(2)  Where  a  representation  is  made  to  the  Governor  General 
in  Council  by  or  on  behalf  of  any  trade  or  industry  that  in  the 
interests  of  the  trade  or  industry  it  is  expedient  to  dispense  with 
or  modify  as  regards  any  class  or  description  of  articles  any  of 
the  requirements  of  this  section  as  to  marking,  the  Governor 
General  in  Council  may,  if  he  thinks  fit,  by  rule  under  this  Act, 
dispense  with  or  modify  such  requirements  as  regards  any  such 


158 


Effect  of  disclosure 
on  copyright. 


Inspection  of 
registered  designs. 


Information  as  to 
existence  of 
copyright. 


Provisions  as  to 
exhibitions. 


class  or  description  of  articles  to  such  extent  and  subject  to  such 
conditions  as  he  thinks  fit. 

49.  The  disclosure  of  a  design   by  the  proprietor  to  any 
other  person,  in  such  circumstances  as  would  make   it  contrary 
to  good  faith  for  that  other  person  to  use  or  publish  the  design, 
and  the  disclosure  of  a  design  in  breach  of  good  faith  by  any  per- 
son other  than  the  proprietor  of  the  design,  and  the  acceptance 
of  a  first  and  confidential  order  for  goods  bearing  a  new  or  origi- 
nal textile   design  intended  for  registration,  shall  not  be  deemed 
to   be  a  publication    of  the  design  sufficient    to  invalidate   the 
copyright  thereof  if  registration  thereof  is  obtained  subsequently 
to  the  disclosure  or   acceptance. 

50.  (/)  During  the  existence  of  copyright  in  a  design,  or  such 
shorter  period  not  being  less  than  two  years  from  the  registration 
of  the  design  as  may  be  prescribed,  the  design  shall  not  be  open 
to  inspection  except  by  the  proprietor  or  a  person  authorized  in 
writing  by  him,  or  a  person  authorized  by  the  Controller  or  by 
the  Court,  and  furnishing  such  information  as  may  enable  the 
Controller  to  identify  the  design,  and  shall  not  be  open  to  the  in- 
spection of  any  person  except  in  the  presence  *of  the  Controller, 
or  of  an  officer  acting  under  him,   and  on  payment  of  the  pres- 
cribed  fee  ;  and  the  person   making  the  inspection  shall  not  be 
entitled  to  make  any  copy  of  the  design,  or  of  any  part  thereof  : 

Provided  that,  where  registration  of  a  design  is  refused  on 
the  ground  of  identity  with  a  design  already  registered,  the  appli- 
cant for  registration  shall  be  entitled  to  inspect  the  design  so 
registered . 

(2)  After  the  expiration  of  the  copyright  in  a  design,  or  such 
shorter  period  as  aforesaid,  the  design  shall  be  open  to  inspection, 
and  copies  thereof  may  be  taken  by  any  person  on  payment  of 
the  prescribed  fee. 

(j)  Different  periods  may  be  prescribed  under  this  section 
for  different  classes  of  goods. 

51.  On  the  request  of  any  person  furnishing  such  informa- 
tion as  may  enable  the  Controller  to  identify  the  design,  and  on 
payment  of  the  prescribed  fee,  the  Controller  shall  inform  such 
person  whether  the  registration  still  exists  in  respect  of  the  design, 
and,  if  so,  in  respect  of  what  classes  of  goods,  and  shall  state  the 
date  of  registration,  and  the  name  and  address  of  the  registered 
proprietor. 

Industrial  and  International  Exhibitions. 

52.  (/)  The  exhibition  at  an  industrial  or  international  ex- 
hibition certified  as  such  by  the  Governor  General  in  Council,  or 
the  exhibition  elsewhere  during  the  period  of  the  holding  of  the 
exhibition,  without  the  privity  or  consent  of  the  proprietor,  of   a 
design,  or  of  any  article  to  which  a  design  is  applied,  or  the  publi- 
cation during  the  holding  of  any  such  exhibition,  of  a  descrip- 
tion of  a  design,  shall  not  prevent  the  design  from  being  regis 
tered,  or  invalidate  the  registration  thereof  : 

Provided  that — 

(a]  the  exhibitor,  before  exhibiting  the  design  or  article,  or 


publishing  a  description  of  the  design,  gives  the  Con- 
troller the  prescribed  notice  of  his  intention  to  do  so ; 
and 

(b)  the  application  for  registration  is  made  before  or  within 
six  months  from  the  date  of  the  opening  of  the  ex- 
hibition. 

(2)  The  Governor  General  jn  Council  may,  by  notification  in 
the  Gazette  of  India,  apply  this  section  to  any  exhibition  men- 
tioned in  the  notification  in  like  manner  as  if  it  were  an  indus- 
trial or  international  exhibition  certified  as  such  by  the  Governor 
General  in  Council,  and  any  such  notification  may  provide  that  the 
exhibitor  shall  be  relieved  from  the  condition  of  giving  notice  to 
the  Controller  of  his  intention  to  exhibit,  and  shall  be  so  relieved 
either  absolutely  or  upon  such  terms  and  conditions  as  may  be 
stated  in  the  notification. 

Legal  Proceedings. 

53.  (/)  During  the  existence  of  copyright  in  any  design  it  Piracy  of 

shall  not  be  lawful  for  any  person—  registered  design. 

(a)  for  the  purpose  of  sale  to  apply  or  cause  to  be  applied 

to  any  article  in  any  class  of  goods  in  which  the 
design  is  registered  the  design  or  any  fraudulent  or 
obvious  imitation  thereof,  except  with  the  license 
or  written  consent  of  the  registered  proprietor,  or  to  do 
anything  with  a  view  to  enable  the  design  to  be  so 
applied  ;  or, 

(b)  knowing  that  the  design  or  any  fraudulent  or  obvious 

imitation  thereof  has  been  applied  to  any  article  with- 
out the  consent  of  the  registered  proprietor,  to  pub- 
lish or  expose  or  cause  to  be  published  or  exposed 
for  sale  that  article. 

(2)  If  any  person  acts  in  contravention  of  this  section,  he 
shall  be  liable  for  every  contravention — 

(a)  to  pay  to  the  registered  proprietor  of  the  design  a  sum 
not  exceeding  five  hundred  rupees  recoverable  as  a 
contract  debt,  or 

(6)  if  the  proprietor  elects  to  bring  a  suit  for  the  recovery 
of  damages  for  any  such  contravention,  and  for  an 
injunction  against  the  repetition  thereof,  to  pay  such 
damages  as  may  be  awarded  and  to  be  restrained  by 
injunction  accordingly  : 

Provided  that  the  total  sum  recoverable  in  respect  of  any 
one  design  under  clause  (a)  shall  not  exceed  one  thousand 
rupees. 

(j)  When  the  Court  makes  a  decree  in  a  suit  under  sub- 
section (2),  it  shall  send  a  copy  of  the  decree  to  the  Controller, 
who  shall  cause  an  entry  thereof  to  be  made  in  the  register  of 
designs. 

54.  The  provisions  of  this  Act  with  regard  to  certificates  of  Application  of 
the  validity  of  a  patent,  and  to  the  remedy  in  case  of  groundless  certain  provisions 


i6o 


of  the  Act  as  to 
patents  to  designs. 


threats  of  legal  proceedings  by  a  patentee  shall  apply  in  the  case 
of  registered  designs  in  like  manner  as  they  apply  in  the  case  of 
patents,  with  the  substitution  of  references  to  the  copyright  in 
a  design  for  references  to  a  patent,  and  of  references  to  the 
proprietor  of  a  design  for  references  to  the  patentee,  and  of  refer- 
ences to  the  design  for  references  to  the  invention. 


Patent  Office. 


Officers  and  clerks. 


Fees. 


PART  III. 

GENERAL. 

Patent  Office  and  Proceedings  thereat. 

55.  (/)  The  Governor  General  in  Council  may  provide,  for 
the  purposes  of  this  Act,  an  office  which    shall  be  called,   and  is 
in  this  Act  referred  to  as,  the  Patent  Office. 

(2)  The  Patent  Office  shall  be  under  the  immediate  control 
of  the  Controller  of  Patents  and  Designs,  who  shall  act  under 
the  superintendence  and  direction  of  the  Governor  General  in 
Council. 

(j)  There  shall  be  a  seal  for  the  Patent  Office. 

(/)  Any  act  or  thing  directed  to  be  done  by  or  to  the  Con- 
troller may  be  done  by  or  to  any  officer  authorized  by  the  Gover- 
nor General  in  Council. 

56.  The  Governor  General  in  Council  may  appoint  the  Con- 
troller, and  so  many  officers  and  clerks,  with  such  designations 
and  duties,  as  he  thinks  fit. 

Fees. 

57.  (/)  There  shall  be  paid  in  respect  of  the  grant  of  patent 
and    the  registration  of  designs,    and   applications  therefor,  and 
in  respect  of  other   matters  with    relation   to    the  patents  and 
designs  under  this  Act,   such  fees  as  may  be  prescribed  by  the 
Governor  General  in  Council,  so  however  that  the  fees  prescribed 
in  respect  of  the  instruments  and  matters  mentioned  in  the  sche- 
dule shall  not  exceed  those  there  specified. 

(2)  A  proceeding  in  respect  of  which  a  fee  is  payable  under 
this  Act  or  the  rules  made  thereunder  shall  be  of  no  effect  unless 
the  fee  has  been  paid. 


Notice  of  trust  not 
to  be  entered  in 
registers. 

Inspection  of  and 
extracts  from 
registers. 


Provisions   as   to    Registers    and   other  Documents    in   the   Patent 

Office. 

58.  There  shall  not  be  entered  in  any  register  kept  under 
this  Act,  or  be  receivable  by  the  Controller,   any  notice  of  any 
trust,  expressed,  implied  or  constructive. 

59.  Every  register  kept  under  this  Act  shall  at  all  convenient 
times  be  open  to  the  inspection  of  the  public,  subject  to  the 
provisions  of  this  Act ;  and  certified  copies,  sealed  with  the  seal 
of  the  Patent  Office,  of  any  entry  in  any  such  register  shall  be 


given  to  any  person  requiring  the  same  on  payment  of  the  pres- 
cribed fee. 

60.  Reports  of  or  to  the  Controller  made  under   this  Act  Privilege  of  reports 
shall  not  in  any  case  be  published  or  be  open  to  public  inspec-  of  Controller, 
tion. 

61.  (/)'  Where  an  application  for  a  patent  has  been   aban-  Prohibition  of 
doned  or  become   void,  the  specifications   and  drawing   (if   any  ),  publication  of 
accompanying  or  left  in  connection  with  such  application,  shall  Drawings l°eic 
not,  save  as  otherwise  expressly  provided  by  this   Act,  at  any  where  application 
time  be  open  to  public  inspection  or  be  published  by  the  Con-  abandoned,  etc. 
troller. 

(2)  Where  an  application  for  a  design  has  been  abandoned 
or  refused,  the  application  and  any  drawings,  photographs,  trac- 
ings, representations  or  specimens  left  in  connection  with  the 
application  shall  not  at  any  time  be  open  to  public  inspection  or 
be  published  by  the  Controller. 

62.  The  Controller  may,  on  request  in  writing  accompanied  Power  for 
bv  the  prescribed  fee,—  Controller  to 

.  .  .  correct  clerical 

(a)  correct  any  clerical  error  in  or  in  connection  with   an  errors. 

application  for  a  patent  or  in  any  patent  or  any  speci- 
fication ; 

(b}  cancel  the  registration  of  a  design  either  wholly  or  in 
respect  of  any  particular  goods  in  connection  with 
which  the  design  is  registered  ; 

(c)  correct  any  clerical  error  in  the  representation  of  a  design 
or  in  the  name  or  address  of  the  proprietor  of  any 
patent  or  design,  or  in  any  other  matter  which  is 
entered  upon  the  register  of  patents  or  the  register  of 
designs. 

63.  (/)  Where  a  person  claims  to  be  entitled  by  assignment,  Entry  of 
transmission  or  other  operation  of  law  to  a  patent,  or  to  the  assignments  and 
copyright  in  a  registered  design,  the  Controller  shall,  on  request 

and  on  proof  of  title  to  his  satisfaction,  register  his  interest  in 
such  patent  or  design. 

(2)  Where  any  person  claims  to  be  entitled  as  mortgagee, 
licensee  or  otherwise  to  any  interest  in  a  patent  or  registered 
design,  the  Controller  shall,  on  request  and  on  proof  of  title  to  his 
satisfaction,  cause  notice  of  the  interest  to  be  entered  in  the 
prescribed  manner  in  the  register  of  patents  or  designs,  as  the  case 
may  be. 

(j)  The  person  registered  as  the  proprietor  of  a  patent  or 
design  shall,  subject  to  the  provisions  of  this  Act  and  to  any 
rights  appearing  from  the  register  to  be  vested  in  any  other  per- 
son, have  power  absolutely  to  assign,  grant  licenses  as  to,  or 
otherwise  deal  with,  the  patent  or  design  and  to  give  effectual  re- 
ceipts for  any  consideration  for  any  such  assignment,  license  or 
dealing: 

Provided  that  any  equities  in  respect  of  the  patent  or  design 
may  be  enforced  in  like  manner  as  in  respect  of  any  other  move- 
able  property. 

64.  (/)  A  High  Court  may,  on  the  application  in  the  pre- Rectification  of 
scribed  manner  of  any  person  aggrieved  by  the  non-insertion  in  or  register  by  Court. 

21 


162 


Powers  of 
Controller  in 
proceedings  under 
Act. 


Publication  of 

patented 

inventions. 

Bxercise  of 
discretionary 
power  by 
Controller. 


Power  of 

Controller  to  take 
directions  of 
Governor  General 
in  Council. 
Refusal  to  grant 
patent,  etc.,  in 
certain  cases. 

Appeals  to  the 
Governor  General 
in  Council. 


omission  from  the  register  of  patents  or  designs  of  any  entry,  or 
by  any  entry  made  in  either  such  register  without  sufficient  cause, 
or  by  any  entry  wrongly  remaining  on  either  such  register,  or  by 
an  error  or  defect  in  any  entry  in  either  such  register,  make  such 
order  for  making,  expunging  or  varying  such  entry  as  it  may  think 
fit. 

(2)  The  Court  rnay  in  any  proceeding  under  this  section  de- 
cide any  question  that  it  may  be  necessary  or  expedient  to  decide 
in  connection  with  the  rectification  of  a  register. 

(j)  The  prescribed  notice  of  any  application  under  this  section 
shall  be  given  to  the  Controller,  who  shall  have  the  right  to 
appear  and  be  heard  thereon. 

(4)  Any  order  of  the  Court  rectifying  a  register  shall  direct 
that  notice  of  the  rectification  be  served  on  the  Controller  in   the 
prescribed  manner,  who  shall  upon  the  receipt  of    such    notice 
rectify  the  register  accordingly. 

(5)  A  High  Court  to  which  an  application  has  been  made  under 
this  section  may  stay  proceedings  on  or  dismiss  the  application 
if  in  its  opinion  the  application  would  be   disposed  of  more  justly 
or  conveniently  by  another  High  Court. 

Powers  and  Duties  of  Controller. 

65.  vSubject  to  any  rules  in  this  behalf,  the  Controller  in  any 
proceedings  before  him  under  this  Act  shall  have  the  powers  of  a 
Civil  Court  for  the  purpose  of  receiving  evidence  and  administer- 
ing oaths  and  enforcing  the  attendance  of  witnesses  and  compelling 
the  production  of  documents  and  awarding  costs. 

66.  The  Controller  shall  issue  periodically   a  publication  of 
patented  inventions  containing  such  information  as  the  Governor 
General  in  Council  may  direct. 

67.  Where  any  discretionary  power  is  by  or  under  this  Act 
given  to  the  Controller,  he  shall  not  exercise  that  power  adversely 
to  the  applicant  for  a  patent,  or  for  amendment  of  an  application 
or  of  a  specification,  or  for  registration  of  a  design,  without  (if  so 
required  within  the  prescribed  time  by  the  applicant)   giving  the 
applicant  an  opportunity  of  being  heard. 

68.  The  Controller  may,  in  any  case  of  doubt  01  difficulty 
arising  in  the  administration  of  any  of  the  provisions  of  this  Act, 
apply  to  the  Gover-nor  General  in   Council  for  directions  in  the 
matter. 

69.  The  Controller  may  refuse  to  grant  a  patent  for  an  in- 
vention, or  to  register  a  design,  of  which  the  use  would,  in  his  opi- 
nion, be  contrary  to  law  or  morality. 

70.  (/)  Where  an  appeal  is  declared  by  this  Act  to  lie  from 
the  Controller  to  the  Governor  General  in  Council,  the  appeal  shall 
be  made  within  two  months  of  the  date  of  the  order  passed  by  the 
Controller,  and  shall  be  in  writing,  and  accompanied  by  the  pre- 
scribed fee. 

(2}  In  calculating  the  said  period  of  two  months  the  time  (if 
any)  occupied  in  granting  a  copy  of  the  order  appealed  against 
shall  be  excluded. 

(j)  The  Governor  General  in  Council  may,  if  he  thinks  fit, 


i63 

obtain  the  assistance  of  an  expert  in  deciding  such  appeals,  and 
the  decision  of  the  Governor  General  in  Council  shall  be  final. 

Evidence,  etc. 

71.  A  certificate  purporting   to  be  under  the  hand  of  the  Certificate  of 
Controller  as  to  any  entry,  matter  or  thing  which  he  is  authorised  Controller  to  be 
by  this  Act,  or  any  rules  made  thereunder,  to  make  or  do,  shall  evldence- 

be  primd  facie  evidence  of  the  entry  having  been  made,  and  of 
the  contents  thereof,  and  of  the  matter  or  thing  having  been  done 
or  left  undone. 

72.  Copies  of   all  specifications,  drawings  and   amendments  Transmission  of 
left  at  the  Patent    Office  after  the  commencement  of  this  Act,  certified  printed 

printed  for  and  sealed  with  the  seal  of  the  Patent  Office,  shall  be  c°Pie*  of. . 

.        -  1          TJ       j  1         1  i  i          spcciTiCcicions y  etc, 

transmitted   as  soon  as  may  be,  alter  they  nave  been  accepted  or 

allowed  at  the  Patent  Office,  to  the  Governor  of  Fort  St.  George 
in  Council,  the  Governor  of  Bombay  in  Council,  the  Lieutenant- 
Governor  of  Burma  and  to  such  other  authorities  as  the  Governor 
General  in  Council  may  appoint  in  this  behalf,  and  shall  be  open 
to  the  inspection  of  any  person  at  all  reasonable  times  at  places  to 
be  appointed  by  those  authorities. 

73.  Any    application,   notice  or   other  document  authorized  Applications  and 
or  required  to  be  left;  made  or  given  at  the   Patent  Office  or  to  notices  by  post, 
the  Controller,  or  to  any  other  person  under  this  Act,  may  be  sent 

by  post. 

74.  (/)  If  any  person   is,   by   reason   of  infancy,  lunacy  or  Declaration  by 
other  disability,  incapable  of  making  any  statement  or  doing  any-  infant,  lunatic, 
thing  required  or  permitted    by  or  under  this   Act,   the   lawful 

guardian,  committee  or  manager  (if  any)  of  the  person  subject  to 
the  disability,  or,  if  there  be  none,  any  person  appointed  by  any 
Court  possessing  jurisdiction  in  respect  of  his  property,  may  make 
such  statement  or  a  statement  as  nearly  corresponding  thereto  as 
circumstances  permit,  and  do  such  thing  in  the  name  and  on  be- 
half of  the  person  subject  to  the  disability. 

(2)  An  appointment  may  be  made  by  the  Court  for  the  pur- 
poses of  this  section  upon  the  petition  of  any  person  acting  on  be- 
half of  the  person  subject  to  the  disability  or  of  any  other  person 
interested  in  the  making  of  the  statement  or  the  doing  oj  the 
thing. 

Agency. 

75.  The  following  documents,  namely,—  Subscription  and 
(/)  applications  for  a  patent,  verification  of 

(2)  notices  of  opposition,  rertain  documents. 

(j)  applications  for  extension  of  term  of  a  patent, 

(4)  applications  for  the  restoration  of  lapsed  patents, 

(5)  applications  for  leave  to  amend, 

(6)  applications  for  compulsory  license  or  revocation,  and 

(7)  notices  of  surrenders  of  patent, 

shall  be  signed  and  verified,  in  the  manner  prescribed,  by  the  per- 
son making  such  applications  or  giving  such  notices : 

Provided  that,  if  such  person  is  absent  from  British  India, 
they  may  be  signed  and  verified  on  his  behalf  by  an  agent  resi- 


164 

dent  in  British  India  authorized  by  h  m  in  writing  in  that  be 
half. 

Agency.  76.     (/)  All  other  applications  and  communications  to  the 

Controller  under  this  Act  may  be  signed  by,  and  all  attendances 
upon  the  Controller  may  be  made  by  or  through  a  legal  practi- 
tioner or  by  or  through  an  agent  authorized  to  the  satisfaction  of 
the  Controller. 

(2)  The  Controller  may,  if  he  sees  fit,  require — 

(a)  any  such  agent  to  be  resident  in  British  India  ; 

(b)  any  person  not  residing   in  British  India  to  employ  an 
agent  residing  in  British  India ; 

(c)  the  personal  signature  or  presence    of    any    applicant, 
opponent  or  other  person. 

Powers,  etc.,  of  Governor  General  in  Council. 

Power  for  Governor  77.  (/)  The  Governor  General  in  Council  may  make  such 
General  in  Council  rules  as  he  thinks  expedient,  subject  to  the  provisions  of  this 
to  make  rules.  A  ^ 

(a)  for   regulating   the  practice  of  registration    under   this 

Act; 

(b)  for  classifying  goods  for  the  purposes  of  designs  ; 

(c)  for  making  or  requiring  duplicates  of  specifications,  draw- 

ings and  other  documents ; 

(d)  for  securing  and  regulating  the  publishing  and  selling  of 

copies,  at  such  prices  and  in  such  manner  as  the  Gover- 
nor General  in  Council  thinks  fit,  of  specifications,  draw- 
ings and  other  documents  ; 

(e)  for  securing  and  regulating  the  making,  printing,  publish- 

ing, and  selling  of  indexes  to,  and  abridgments  of, 
specifications  and  other  documents  in  the  Patent  Office ; 
and  providing  for  the  inspection  of  indexes  and  abridg- 
ments and  other  documents ; 

(/)  generally  for  regulating  the  business  of  the  Patent  Office, 
the  conduct  of  proceedings  before  the  Controller,  and 
all  things  by  this  Act  placed  under  the  direction  or 
control  of  the  Controller  or  of  the  Governor  General 
in  Council ;  and 

(g)  generally  for  the  purpose  of  carrying  into  effect  the 
provisions  of  this  Act. 

(2)  The  power  to  make  rules  under  this  section  shall  be  sub- 
ject to  the  condition  of  the  rules  being  made  after  previous  publi- 
cation. 

(3)  All  rules  made  under  this  section  shall  be  published  in  the 
Gazette  of  India,  and  on  such  publication  shall  have  effect  as  if 
enacted  in  this  Act. 

Offence's. 

Wrongful  use  of  78.     If  any  person  uses  on  his  place  of  business,  or  on  any 

words  "  Patent  document  issued  by  him,  or  otherwise,  the  words  "Patent  Office," 
°ffice."  or  any  other  words  suggesting  that  his  place  of  business  is  offici- 

ally connected  with,  or  is,  the  Patent  Office,  he  shall  be  punishable 


I6S 

with  fine  which  may  extend  to  two  hundred  rupees,  and,  in  the  case 
of  a  continuing  offence,  with  further  fine  of  twenty  rupees  for 
each  day  on  which  the  offence  is  continued  after  conviction 
thereof. 

78  A.1     (/)  If  His  Majesty  is  pleased  by  order  in  Council  to  Reciprocal  arrange 
apply  such  of  the  provisions  of   section  91  of   the  Patents  and  ments  with  the 
Designs  Act,  1007,  as  relate  to   inventions  or  designs  to  British  United  Kingdom 

*   ''  ,.    j    r  .•        £  and  other  parts  of 

India,  then  any  person  who  has  applied  for  protection  for  any  His  Majesty's 

invention  or  design  in  the  United  Kingdom  shall  be  entitled  to  a  dominions, 
patent  for  his  invention  or  to  registration  of  his  design  under  this 
Act,  in  priority  to  other  applicants ;  and  the  patent  or  registration 
shall  have  the  same  date  as  the  date  of  the  application  in  the 
United  Kingdom : 
Provided  that— 

(a)  the  application  is  made  in  the  case  of  a  patent  within 

twelve  months,  and  in  the  case  of  a  design,  within  four 
months  from  the  application  for  protection  in  the 
United  Kingdom ;  and 

(b)  nothing  in  this  section  shall  entitle  the  patentee  or  the 

proprietor  of  the  design  to  recover  damages  for  in- 
fringements happening  prior  to  the  actual  date  on 
which,  in  the  case  of  a  patent,  his  application  is  accept- 
ed, or  in  the  case  of  a  design,  the  design  is  registered, 
in  British  India. 

(2)  The  patent  granted  for  an  invention  or  the  registration 
of  a  design  shall  not  be  invalidated — 

(a)  in  the  case  of  a  patent,  by  reason  only  of  the  publica- 

tion of  a  description  of,  or  use  of,  the  invention,  or 

(b)  in  the  case  of  a  design,  by  reason  only  of  the  exhibition 

or  use  of,  or  the  publication  of  a  description  or  re- 
presentation of  the  design  in  British  India  during  the 
period  specified  in  this  section  as  that  within  which 
the  application  may  be  made. 

(j)  The  application  for  the  grant  of  a  patent  or  the  registra- 
tion of  a  design  under  this  section  must  be  made  in  the  same 
manner  as  an  ordinary  application  under  this  Act : 

Provided  that  in  the  case  of  a  patent,  if  the  application  is 
not  accepted  within  twelve  months  from  the  date  of  the  applica- 
tion for  protection  in  the  United  Kingdom,  the  specification  and 
the  drawings  (if  any)  supplied  therewith  shall  be  open  to  public 
inspection  at  the  expiration  of  that  period. 

(4)  Where  it  is  made  to  appear  to  the  Governor  General  in 
Council  that  the  legislature  of  any  other  part  of  His  Majesty's 
dominions  has  made  satisfactory  provision  for  the  protection  of 
inventions  or  designs,  patented  or  registered  in  British  India,  the 
Governor  General  in  Council  may  by  notification  in  the  Gazette 
of  India,  direct  that  the  provisions  of  this  section  with  such 
variations  or  additions,  if  any,  as  may  be  set  out  in  such  notifica- 


1  New  section  inserted  by  the  Indian  Patents  and  Designs  (Amendment) 
Act  (Act  XXIX  of  1920). 


1 66 


Saving  for 
prerogative. 


Repeal. 


Substitution  of 
patents  for  rights 
under  repealed 
Act. 


tion,  shall  apply  for  the  protection  of  inventions  or  designs 
patented  or  registered  in  that  part  of  His  Majesty's  dominions. 

Savings  and  Repeal. 

79.  Nothing  in  this  Act  shall  take   away,  abridge  or  preju-  . 
dicially  affect  the  prerogative  of  the  Crown  in  relation  to  the  grant- 
ing of  any  letters  patent  or  to  the  withholding  of  a  grant  thereof. 

80.  The   Inventions  and    Designs  Act,  1888,    is  hereby  re-Vofi 
pealed  : 

Provided  that  this  repeal  shall  not  affect  any  application 
under  the  said  Act  pending  at  the  commencement  of  this  Act, 
and  all  proceedings  on  such  application  shall  be  continued  as  if 
this  Act  had  not  been  passed. 

81.  (/)  At  any  time  within  two  years  from  the  commence- 
ment of  this  Act,  any  person   possessing  an  exclusive  privilege 
under  the  Inventions  and  Designs  Act,  1888,  may,  by  request  in  Vof  i 
writing  left  at  the  Patent  Office  and  on  payment  of  the  prescribed 

fee,  seek  leave  to  convert  his  exclusive  privilege  under  the  said 
Act  into  a  patent  under  this  Act. 

(2)  Notice  of  any  application  under  this  section  shall  be  sent 
to  all  persons  appearing  from  the  address  book  kept  under  the 
said  Act  to  have  any  shares  or  interests  in  the  exclusive  privilege. 

(j)  Save  as  aforesaid,  the  procedure  prescribed  by  section  17 
in  the  case  of  applications  under  that  section  shall,  so  far  as  may 
be,  apply  to  every  application  under  this  section. 

(4)  Every  patent  granted  under  this  section  shall  be  dated 
as  of  the  date  of  the  exclusive  privilege  for  which  it  is  substituted. 


THE  SCHEDULE 

(See  section  57.) 
FEES. 

Rs. 

On  application  for  a  patent       .......          10 

Before  sealing  a  patent      ........         30 

Before  the  expiration  of  the  4th  year  from  the  date  of  the          50 

patent. 
Before  the  expiration  of  the  5th  year  from  the  date  of    the          50 

patent. 
Before  the  expiration  of  the  6th  year  from  the  date  of  the          50 

patent. 
Before  the  expiration  of  the  /th  year  from  the  date  of  the          50 

patent. 
Before  the  expiration  of  the  8th  year  from  the  date  of  the          50 

patent. 
Before  the  expiration  of  the  9th  year  from  the  date  of  the        100 

patent. 
Before  the  expiration  of  the  loth  year  from  the  date   of   the        100 

patent. 
Before  the   expiration  of  the  nth  year  from  the  date  of  the        100 

patent. 
Before  the  expiration  of  the  T2th  year   from  the  date  of  the         100 

patent. 


i67 


Before  the  expiration  of  the   13th  year    from  the  date  of  the 

pateiit : 

Provided  that  the  fees  for  two  or  more  years  may  be  paid 

in  advance. 

On  application  to  extend  term  of  a  patent 
Before  the  expiration  of  each  year  of  the  extended  term  of  a 

patent  or  of  a  new  patent  granted  under  section  15. 
On  application  for  registration  of  a  design         .  . 


Rs. 

100 


50 

IOO 


ACT  VI   OF   1915. 


vShort  title. 


Definitions. 


Power  to  make 
rules. 


PATENTS  AND  DESIGNS  (TEMPORARY  RULES)  ACT. 
(Passed  22nd  March,  1915.} 

An  Act  to  extend  the  powers  of  the  Governor  General  in 
Council  during  the  continuance  of  the  present  war  to  make  rules 
under  the  Indian  Patents  and  Designs  Act,  1911. 

1.  (/)  This   Act   may  be   called   the   Indian    Patents   and 
Designs  (Temporary  Rules)  Act,  1915. 

(2)  It  extends  to  the  whole  of  British  India  including  British 
Baluchistan  and  the  Santhal  Parganas. 

(j)  This  Act  and  the  rules  made  thereunder  shall  be  in  force 
during  the  continuance1  of  the  present  war  and  for  a  period  of 
one  year  and  six  months  '2  thereafter . 

2.  In  this  Act  the  expression  subject  of  any  State  at  war 
with  His  Majesty  includes  : — 

(i)  any  person  resident  and  carrying  on  business  in  the 
territory  of  a  state  at  war  with  His  Majesty  ;  and 

(ii)  with  reference  to  a  company,  any  company  the  busi- 
ness whereof  is  managed  or  controlled  by  such 
subjects,  or  is  carried  on  wholly  or  mainly  for  the 
benefit  or  on  behalf  of  such  subjects,  notwithstand- 
ing that  the  company  may  be  registered  within 
His  Majesty's  dominions. 

3.  (/)  The  power  of  the  Governor  General  in  Council  under 
section  77  of  the  Indian  Patents  and  Designs  Act,  1911,  to  make  II  of  i 
rules  shall  include  power  to  make  rules — 

(a)  for  avoiding  or  suspending  in  whole  or  in    part    any 

patent  or  license,  the  person  entitled  to  the  benefit 
of  which  is  the  subject  of  any  State  at  war  with 
His  Majesty ; 

(b)  for  avoiding  or  suspending  the  registration,  and  all  or 

any  rights  conferred  by  the  registration,  of  any 
design  the  proprietor  whereof  is  a  subject  as  afore- 
said ; 

(c)  for  avoiding  or  suspending    any  application  made  by 

any  such  person  under  the  said  Act ; 

(d)  for  enabling  the  grant,  in  favour  of  persons  other  than 

such  persons  as  aforesaid,  on  such  terms  and  condi- 
tions, and  either  for  the  whole  term  of  ^he  patent 

1  Under  the  provisions  of  the  Termination  of  the  Present  War  (Defini- 
tion) Act  (V  of  1919),  the  present  war  shall  be    treated  as  having  continued 
to  and  as  having  ended  on  such  date  as  His  Majesty  in  Council  may  declare 
in  that  behalf. 

2  Altered   from    "six   months"   by   the   Indian    Patents   and   Designs 
(Temporary  Rules)  Amendment  Act  (XXVIII  of  1920). 


169 

or  registration  or  for  such  less  period,  as  may  be 
thought  fit,  of  licenses  to  make,  use,  exercise,  or 
vend,  patented  inventions  and  registered  designs  so 
liable  to  avoidance  or  suspension  as  aforesaid  ;  and 
(e)  for  extending  the  time  within  which  any  act  or  thing 
may  be  or  is  required  to  be  done  under  the  said 
Act. 

(2}  If  the  rules  made  under  this  Act  so  provide,  the  rules  or 
any  of  them  shall  have  effect  from  the  passing  of  this  Act. 

(j)  All  rules  made  under  this  Act  shall  be  published  in  the 
Gazette  of  India,  and  on  such  publication  shall  have  effect  as  if 
enacted  in  this  Act. 

4.     The  power  to  make  rules  conferred  by  section  3  (i)  (a] 

and    (d)    of   this   Act   shall   be  exercisable  in 

Power  m  case  of     respect   of    any   exclusive   privilege    acquired 

underS1VActnv    of     un<Jer  the  Inventions  and  Designs  Act,  1888,  v  of  1888. 

1888.  as  if  such  exclusive  privilege  had  been  a  patent 

granted  under  the  Indian  Patents  and  Designs 

Act,  1911 ;  and  the  power  to  make  rules  conferred  by  section  3  n  Of  1911. 
(i)  (e)  of  this  Act  in   respect   of  any  thing    to  be  done  under 
the  Indian  Patents  and  Designs  Act,   1911,  shall  be  exercisable  II  of  1911 
in  respect  of  any  thing  to   be   done  under  the   Inventions  and 
Designs  Act,  1888.  v  of  1888 


APPENDIX. 
PART  II. 


No.  I959-P. — In  exercise  of  the  powers  conferred  by  sections  57  and  77  (i> 
of  the  Indian  Patents  and  Designs  Act,  1911  (II  of  1911),  the  Governor 
General  in  Council  is  pleased  to  make  the  following  rules. 


Indian  Patents  and  Designs  Rules,  1912. 

(As  amended  by  notification  No.  15757-22,  dated  16-10-1915 
of  the  Government  of  India.) 

CHAPTER  I. 
Preliminary. 

Short  title  and  i.  These  rules  may  be  called  the  Indian  Patents  and 
commencement.  Designs  Rules,  1912. 

They  shall  come  into  force  on  the  first  day  of  January,  1912. 
r»Afi«itioti  2.     In  the  rules,  unless  there  is  anything  repugnant 

in  the  subject  or  context. 

(a)  The  Act  means  the  Indian  Patents  and  Designs  Act,  1911. 

(&)  Office  means  the  Patent  Office  provided  under  section  55  of  the  Act. 

(c)  Controller  means  the  Controller  of  Patents  and  Designs  appointed 

under  section  56  of  the  Act,  and  includes  any  officer  appointed  to 

act  for  him. 

3.     Any  application,  notice,  or  other  document,  and  any  fee,  authorised 

Communications       or  re(luired  to  be  left>  made,  given  or  paid  at    the 

1 0  thm    S"  office,  or  to  the  Controller,    may  be  sent  by  hand  or 

through  the  post  addressed, to  the  Controller  of  Patents 

and  Designs,  i ,  Council  House  Street,  Calcutta,  and,  if  so  sent,  shall  be  deemed 
to  have  been  left,  made,  given  or  paid  on  the  day  of  receipt. 

4.     (i)  The  fees  to  be  paid  under  the   Act  shall  be 
-p  those  specified  in   the  first  Schedule  to  these  rules, 

hereinafter  described  as  the  prescribed  fees. 

(2)  Fees  may  be  paid  in  cash  at  the  office,  or  may  be  sent  by  money 
order  or  postal  order  or  cheque  payable  to  the  Controller  at  Calcutta. 
Cheques  not  carrying  the  correect  addition  for  Commission,  and  other  cheques 
on  which  the  full  value  cannot  be  collected  in  cash  within  the  time  allowed  for 
payment  of  the  fee,  will  only  be  accepted  at  the  discretion  of  the  Controller. 
•  Stamps  will  not  be  received  in  payment  of  fees. 

Application,     etc.,  5.     All  applications,   notices,  requests,  appeals  or 

to  be  accompanied        documents  on  which  a  fee  is  leviable  under  these  rules 
by  the  prescribed  fee.     shall  be  accompanied  by  the  prescribed  fee. 

6.  The  forms  set  forth  in  the  second  schedule  to  these  rules,  with  such 

variations  as  the  cricumstances  of  each  case  require, 
Forms.  shall  be  used  for  the  respective  purposes  therein  men- 

tioned, and  if  used  shall  be  sufficient. 

Documents. 

7.  (i)  All  documents  and  copies  of  documents,  except  drawings,  sent  to 

or  left  at  the  office  or  otherwise  furnished  to  the  Con 

Size,  etc.,  of  troller  shall  be  written,  type- written,  lithographed,  or 
documents.  printed  in  the  English  language  (unless  otherwise 

directed)  in  large  and  legible  characters  with  deep 
permanent  in  upon  strong  white  paper,  and  on  one  side  only,  of  a  size 


approximately  of  13  inches  by  8  inches,  leaving  a  margin  of  at  least  one 
inch  and  a  half  on  the  left  hand  part  thereof.  Signatures  thereto  must  be 
written  in  a  large  and  legible  hand,  and  a  vernacular  signature  must  be 
accompanied  by  a  transliteration  in  English. 

(2)  Duplicate  documents  shall  be  filed  at  the  Office,  if  at  any   time 
required  by  the  Controller. 

(3)  Names  and  addresses  of  applicants  and  other  persons  shall  be  given 
in  full,  together  with  such  other  particulars  of  nationality,  caste  or  calling  as 
are  necessary  for  identification. 

8.  The  documents  specified  in   S.   75   of  the  Act  shall   be    dated   and 
Signature     and         signed  at  the  foot,  and  shall  contain  a  statement  that 

verification  of  docu-  the  facts  and  matters  stated  therein  are  true  to  the 
ments  specified-  in  best  of  the  knowledge,  information  and  belief  of  the 
S.  75  of  the  Act.  person  signing  them. 

9.  (i)  For  all  matters  falling  under  the  provisions  of  S.  76  of  the  Act, 
.  any  person     may,    unless  otherwise   directed  by   the 

Controller,  authorise,  under  his  personal  signature,  any 

other  person  to  act  as  his  agent  and  to  receive  all  notices,  requisitions  and 
communications.  The  authority  may  be  given  on  Form  26. 

(2)  If  he  does  not  desire  to  authorise  any  other  person  to  act  as  his  Agent, 
but  wishes  notice,  requisitions  and  communications  to  be  sent  to  a  particu- 
lar address,  he  may  notify  the  same  to  the  Controller  on  Form  27, 


CHAPTER  II.— PATENTS. 

Applications  for  grant  of  Patent. 

10.  (i)  An  application,  under  section  3  of  the  Act,  for  a  patent  shall  be 

made  on  Form  i  or  Form  2,  and  shall  be  accompanied 
Application.  by  a  specification,  prepared  in  duplicate  in  accordance 

with   Form  3. 

(2)  Applications  shall,  as  far  as  may  be  practicable,  be  numbered  and 
dated  in  the  order  of  their  receipt. 

(3)  If  the  true  and  first  inventor,  or  any  other  applicant  is  in  the  service 
of  the  Crown,  he  shall  disclose  that  fact  in  the  application  and  shall  state  the 
office  he  holds. 

(4)  If  the  true  and  first  inventor  does  not  wish  to  be  a  party  to  the 
application,  the  applicant  shall  produce  the  original  deed  of  assignment  or 
other  document  under  which  he  is  enabled  to  apply  for  a  patent,  unless  the 
application   itself  is  endorsed  by  the  true  and  first  inventor  in  the  presence 
of   two   witnesses  with  a  statement  that  the  said  inventor  agrees  that  the 
application  shall  be  made  without  his  name  as  an  applicant  for  a  patent. 

(5)  If  the  application  is  made  by  the  legal  representative  of  a  deceased 
inventor,  the  legal  representative  shall  produce  for  inspection  the   probate 
of  the  will  or  the  letters  of  administration  of  the  estate  of  the  inventor,   or 
a  certified  copy  of  such  probate  or  letters,   or  such  other  evidence  of  hi< 
title  as  the  Controller  may  require. 

Specifications. 

11.  (i)  The  specification  shall  commence  with  the  title  of  the  invention 
Specification  and  the  name  of  the  applicant  as  in  the  application. 

It  shall  terminate  with  a  clear  and  succinct   statement 

of  the  invention  claimed,   distinct  from  the  body  of  the  specification  and 
shall  be  signed  by  the  applicant  or  his  agent. 

(2)  Where  the   invention    is   capable    of    representation  by   drawings, 
such  drawings  shall  be  prepared  in   accordance  with  rule   13   and   shall  be 
supplied  with,  and  referred  to  in  detail,  in  the  specification. 

(3)  Irrelevant  or  other  matter,  not  necessary,  in  the  opinion  of  the  Con- 
troller,  for  elucidation  "of  the    invention,   shall  be  excluded  from  the  title, 
description,  claims  and  drawings. 

12.  (i)  When   the  specification,  or  any  drawing  accompanying  it,  is 
Amendments  how     defective  and  requires  amendment,  one  copy  shall  be 

10*     returned  to  the  applicant  or  his  agent  and   all  altera- 
tions shall  be  made  thereon  as  far  as  possible.     Addi- 

22 


172 

tioiial  matter  may  be  interpolated  if  necessary  by  re-writing  such  pages  as 
are  required  to  form  a  continuous  document.  Amendments  shall  not  be 
made  by  slips  pasted  on,  or  as  footnotes,  or  by  writing  in  the  margin.  The 
amended  documents  shall  be  returned  to  the  Controller  together  with  the 
cancelled  pages  or  drawings,  if  any,  and  with  a  duplicate  of  any  pages  or 
drawings  that  have  been  amended  or  added. 

(2)  Amendments,  alterations  or  additions  shall  be  initialled  by  the  appli- 
cant or  his  agent. 

(3)  No  amendments,  alterations  or  additions  shall  be  made  in   a  docu- 
ment returned    for  amendment  beyond  those  necessary  to  comply  with  the 
requirements  of  the  Controller. 

(4)  When  a  specification  comprises  more  than  one  invention,   and  it  is 
considered  by  the  Controller  or  the  applicant  that  the  application  should  be 
restricted  to  one  invention,  the  additional  inventions  may  be  made  the  sub- 
ject-matter of  additional  applications.     Any  such  application,  if  made  before 
the  acceptance  of  the  original  application,  shall,  on  the  request  of  the  appli- 
cant, bear  date  of  the  original  application  and  shall  be  proceeded  with  as 
substantive  applications  of  that  date." 

13.     (i)  Drawings  shall  be  supplied  in  duplicate  on  sheets   13  inches  in 
Siyp  nf  draw  height  and  either  8  or  16  inches  in  width.     A  clear 

et^  z  mgs'      margin  of  half  an  inch  shall  be  left  round  each  sheet. 

The  figures  of  the  drawing  shall  be  numbered  consecu- 
tively Pig.  i,  Fig.  2,  etc.,  and  shall  be  placed  upright  on  the  sheets.  Re- 
ference figures  and  letters  shall  be  clear  and  bold,  not  less  than  1/8  of  an 
inch  in  height,  and  the  same  letters  shall  be  used  for  the  same  parts  in 
different  views  or  drawings.  The  sheets  of  drawings,  when  more  than  one, 
shall  be  numbered  consecutively,  the  number  of  each  sheet  being  shown  in 
the  right-hand  top  corner.  Each  sheet  shall  be  signed  by  the  applicant  or 
his  agent  in  the  bottom  right-hand  corner. 

(2)  No  written  description  of  the  invention  shall  appear  on  the  sheets  of 
drawings. 

(3)  At  least  one  copy  of  the  drawings  shall  be  suitable  for  reproduc- 
tion and,  for  that  purpose,  shall  be  prepared  on  tracing  cloth  or  on  smooth 
white  paper  which  is  not  opaque      All  lines  and  lettering  shall  be  executed 
with  Indian  ink  of  good  quality.     Coloured  lines  and  washes  shall  not  be  used. 
The  lines  and  lettering  shall  be  firm  and  even,  and  section  lines  shall  not  be 
closely  drawn.     The  scale  adopted  shall  be  large  enough  to  show  the  inven- 
tion clearly. 

(4)  Drawings  shall  be    delivered  flat   or  rolled  so  as  to  be  free   from 
creases. 

Opposition  to  grant  or  Amendment,  etc. 

14.     Notice  of  opposition  to  the  grant,  or  to  the 

Notice  of  opposi-       amendment,  etc.,  of  a  patent  shall  be  given  in  dupli- 
tion.  cate  on  Form  5.     The  duplicate   notice  shall  be  sent 

by  the   Controller  to  the  applicant  or  his  agent. 

15.     (i)  Within  24  days  of  giving  notice  of  opposition  the  opponent  may, 

and  shall,  if  at  any  time  so  required  by  the  Controller, 

•p.,-          f    t  t  leave  at   the  office  a  full  written   statement  in  dupli- 

ments  cate  of  the  reasons  for'  and  extent  of,  his  opposition, 

and  of  the  grounds  upon  which  he  relies  in  support  of 

his  opposition. 

(2)  If  the  written  statement  referred  to  in   clause   (r)   is  supplied,   the 
Controller  shall  furnish  the  applicant  or  his  agent  with  the  duplicate  copy 
thereof,   and  the  applicant  or  his  agent  may  leave  at  the  office  a  reply  in 
writing  within  a  time  to  be  specified  by  the  Controller.     Such  reply  shall  deal 
in  full  with  the  statement    of  the  opponent  and  shall  be  in  duplicate. 

(3)  If  the  reply  referred  to  in  clause  (2)  is  supplied  by  the  applicant,  the 
Controller  shall  furnish  the  opponent  or  his  agent  with   the  duplicate  copy 
thereof,  and  the  opponent  or  his  agent  may  again  leave  at  the  office  a  rejoin- 
der in  writing  within  a  time  to  be  specified  by  the  Controller.     Such  rejoin- 
der shall  be  confined  strictly  to  matters  in  reply,  and  shall  be  in  duplicate. 
The  duplicate  copy  shall  be  sent  by  the  Controller  to  the  applicant  or  his 
agent. 

(4)  The  Controller  may  require  at  any  time  that  any  written  statement, 
reply  or  rejoinder  shall  be  in  the  form  of  an  affidavit. 


(5)  The  time  ordinarily  allowed  for  filing  a  reply  or  rejoinder  shall  be 
one  month. 

1 6.  (i)  On  completion  of  these  proceedings,  if  any,  or  at  such  other  time 
H       .  as  he  may  see   fit,  the  Controller  shall  appoint   a  time 

for  the  hearing  of  the  case,  and  shall  give  the  parties 

not  less  than  ten  days'  notice  of  such  appointment.  If  either  party  does 
not  desire  to  be  heard,  he  shall  as  soon  as  possible  notify  the  Controller  to 
that  effect.  If  either  party  desires  to  be  heard,  he  must  leave  a  notice  of  his 
intention  to  attend  the  hearing  on  Form  6,  together  with  a  fee  of  Rs.  10  at 
the  office.  The  Controller  may  refuse  to  hear  any  party  who  has  not  left  such 
notice  and  fee  at  least  two  clear  days  before  the  date  fixed  for  the  hearing. 

(2)  After  hearing  the  party  or  parties  desirous  of  being  heard  or  if 
neither  party  desires  to  be  heard,  then  without  a  hearing,  the  Controller 
shall  decide  the  case  and  notify  his  decision  to  the  parties. 

Sealing  of  Patents. 

17.  (i)  If  an  applicant  desires  to  have  a  patent  sealed  on  his  applica- 

tion, he  shall  within  the  period  allowed  by  section  10, 
Sealing.  sub-section  2  of  the  Act,  leave  at  the  office  an  applica- 

tion on  Form  7. 

(2)  Where  the  applicant  neglects  or  fails  to  pay  the  fee  prescribed 
within  the  time  allowed,  the  time  may  be  extended  for  a  period  not 
exceeding  three  months.  An  application  for  such  extension  of  time  shall  be 
made  on  Form  4,  and  shall  be  accompanied  by  a  fee  of  Rs.  10,  Rs.  20  or 
Rs.  30  for  an  extension  of  one,  two,  or  three  months  respectively. 

18.  The  patent  shall  be  in  the  form  given   in   the  third  schedule  to 

these  rules,   with  such  modifications  as  the   circum- 


Form  of  patent. 


of 


stances  of  each  case  require. 

Restoration  of  a  Lapsed  Patent. 

19.     (i)  Application  under  section  16  of  the  Act 


for  the  restoration  of  a  lapsed  patent  shall  be  made  on 
Form  9. 


Restoration 
lapsed  patent. 

(2)  If  the  Controller  entertains  the  application,  he  shall  advertise   t  in 
the  Gazette  of  India. 

20.  Notice  of  opposition  to  the  restoration  may  be  given  on  Form  3 

within  six  weeks  of  the  advertisement  and   the  proce- 
dure for  the  disposal  of  such  opposition  shall  be  regu- 
lated by  the  provisions  of  Rules  14,  15  and  16. 

Amendment. 

21.  A  request  under  section  17  of  the  Act  for  the   amendment  of   an 
.          ,  application,  specification  or  drawings  (not  being   a  re- 
quest  under  section  62  of  the  Act  for    correction  of  a 

clerical  error)  shall  be  made  on  Form  10,  and  shall  be  accompanied  by  a 
copy  of  the  application,  specification,  or  drawings  showing  in  red  ink  the 
proposed  amendment  in  such  a  manner  as  to  indicate  clearly  the  alteration 
desired. 

22.  If  the  request  relates  to  an  application  for  a  patent  which  has  been 

accepted,  the  request  and  the  nature  of  the   proposed 

Procedure     when     amendment  shall  be  advertised  by  notification  in  the 

patent      has     been     Gazette  of  India  and  in  such  other  manner,  if  any,  as 

accepted.  the  Controller  may  in  each  case  direct  under  Rule  45. 

The  Controller  shall  also  notify  all  persons  whose 

names  are  entered  at  the  time  of  the  request  on  the  Register  as  claiming 
an  interest  in  the  patent. 

23.  Notice  of  opposition  to  the  amendment  may  be  given  on  Form  5 
OoDositi  within  three  months  of  the  date  of  the   notification, 

and  the  procedure  for  the  disposal  of  such  opposition 
shall  be  regulated  by  the  provisions  of  Rules  14,  15,  and  16. 

24.  Notice  of  an  offer  under  section  24  of  the  Act  to  surrender  a  patent 
Q,nr  .t^ot-    f  sha11  be  made  on  Form  II.     The  Controller  shall  ad- 

nat  nt  vertise   the   offer  in  the   Gazette  of   India,   and   shall 

notify  all  persons  whose  names  are  entered  at  the  time 
of  the  offer  on  the  Register  as  claiming  an  interest  in  the  patent. 


174 

25.  Within  six  weeks  of  the  advertisement  any  person  may  give  notice 
of  opposition  to  such  surrender.  After  the  expiration 
of  such  six  weeks  the  Controller  may,  if  a  notice  of 

opposition  has  been  given,  appoint  a  hearing  if  he  sees  fit,  and  shall  decide 

whether  the  patent  shall  be  revoked. 


CHAPTER  IIL— DESIGNS. 

-,.       -~     ,.  26.     (i)  For  the  purposes  of   the   registration  of 

Uass  designs  and  of  these  rules,  goods  shall  be  classified  in 

the  manner  specified  in  the  fourth  Schedule  hereto. 
(2)  If  any  doubt  arises  as  to  the  class  to  which  any  particular  descrip- 
tion of  goods  belongs,  it  shall  be  determined  by  the   Controller. 

27.  An  address  for  service  in  British  India  shall  be  given  in  all  appli- 

cations and  other  communications  to  the  Controller  in 
connection  with  designs.     Unless  such    an  address  is 

service.  given  the  Controller  need  not  proceed  with  the  examina 

tion  of  an  application,  nor  send  any  notice  that  may  be  required  by  the 
Act  or  these  rules. 

Application  to  register  a  Design. 

28.  (i)  An  application  under  section  43  of  the  Act  for  the  registration 
A      i-     f  of  a  design  shall  be  made  on  Form   14  and   shall  be 

PP  1(  accompanied  by  four  copies  of  the  design  and  shall  be 

dated  and  signed  by  the  applicant  or  his  agent. 

(2)  The  application  shall  state  the   class  in  which  the  design  is  to  be 
registered  and  the  article  or  articles  to  which  the  design  is  to  be  applied. 
Where  it  is  desired   to  register  the  same  design  in   more   than  one   class,  a 
separate  application  shall  be  made  in  each  class. 

(3)  If  so  required  by  the  Controller,  the  applicant  shall  state  the  purpose 
for  which  the  article  is  used,  and  the  material  or  predominating  material  of 
which  the  article  is  made,  and  shall  give  a  brief  statement  of  the  novelty 
claimed  for  the  design. 

29.  (i)  The  four  copies  of  the  design  which  in  accordance  with  rule  28 
p     •          j          •      must  accompany  the  application  shall  be  exactly  simi- 

pies  au  lar  drawings,  photographs,  tracings,  or  other  representa- 

tions of  the  design,  or  shall  be  specimens  of  the  design. 

(2)  Bach  representation   shall  show    the  complete  design  and  shall  be 
on  paper,  or  mounted  on  paper,  of  a  size  of  13  by  8  inches,   and  on  one  side 
only.     Drawings  or  tracings  shall  be  made  in  black  ink. 

(3)  When  the  specimens  are  not,  in  the  opinion  of  the  Controller,  suit- 
able for  record  in  the  office,  they  shall  be  replaced  by  representations. 

(4)  If  the  Controller  in  any  case  so  requires,  he  shall  be  supplied   with 
one  or  more  representations  or  specimens  of  the  design  in  addition  to  those 
supplied  with  the  application. 

(5)  Where  words,  letters,   or  numerals    are  not    of  the  essence  of  the 
design,  they  shall  be  removed  from  the  representations  or  specimens. 

Procedure  on  receipt  of  application. 

30.  Upon  receipt  of  an  application  for  registration,  the  Controller  shall 
.  consider  it,  and  if  he  thinks  there  is  no  objection  to  the 

design  being  registered,  he  may  accept  it. 

31.  If  after  consideration  of  the  application  any  objections  appear  to 
Obi  ction  tlle  Controller,  a  statement  of  these  objections  shall  be 

sent  to  the  applicant  or  his  agent  in  writing  and  unless 

within  one  month  the  applicant  or  his  agent  applies  for  a  hearing  he  shall  be 
deemed  to  have  withdrawn  his  application. 

32.  The  decision  of  the  Controller  at  such  hearing  as  aforesaid  shall  be 
Decision     f  communicated  to  the  applicant  or  his  agent  in  writing, 

C  ntr  11  and  if  he  obJects  to  sucl1  Decision,  he  may  within  one 

month,  should  he  consider  it  necessary  for  the  purpose 

of  appeal,  apply  upon  Form  15,  requiring  the  Controller  to  state  in  writing 
the  grounds  of  his  decision  and  the  materials  used  by  him  in  arriving  at  the 
same. 


33-     Upon  receipt  of  such  form,  the  Controller  shall  send  to  the  appli- 
cant or  his  agent  such  statement  as  aforesaid  in  writing 
'  appeal.      and  the  date  when    guch  statement    is  sent  shall  be 

deemed  to  be  the  date  of  the  Controller's  decision  for  the  purpose  of  appeal. 

34.  An  application  which,  owing  to  any  neglect  or  default  of  an  appli- 
XT  .     '  cant,  has  not  been  completed  so  as  to  enable  registra- 
tion to  be  effected   within  six  months  of  the  date   of 

within  six  months.      applicatioll(  shall  be  deemed  to  be  abandoned. 

35.  Application  under  section  47,  sub-sections  (2)  and  (3)  of  the  Act  for 
„  f  the  extension  of  the  period  of  copyright  in  registered 

.  ,  ,       designs  may  be  made  at  any  time  not  more  than  six 

months  and  not  less  than  one  month   before  the  time 

registered  design.     of  tfae  expiry  Q£  thfi  copyright>     The  appiication  shall 

be  made  on  Form  16. 

36.  Before    delivery   on    sale    of    any    articles    to   which  a  registered 
,r    ..         f  design  has  been  applied  the  proprietor  of  such  design 

shall  cause  each  such  article  to  be  marked  with  the 

r    on i    al6  '  word.  REGISTERED  or  with  the  abbreviation  REGD. 

or  with  the  abbreviation   RD.   as  he  may  choose,  and 

also  (except  in  the  case  of  articles  to  which  have  been  applied  designs  regis- 
tered in  classes  9,  13,  14  and  15)  with  the  number  appearing  on  the  certi- 
ficate of  registration. 

TtKjnpption  of  37-     Registered  designs  shall  not,  except  aspiovid- 

,     :  ^  ed  in  section  50  of  the  Act,  be  open   to   inspection  until 

five  years  after  the  date  of  application  for  registration. 
38.     A  request  for  information  under  section  51  of  the  Act  may  be  made 
R  ,,  on  Form  1 8.     If  the  number  of  the  registered  design  is  not 

known,  two  copies  of  the  design,  in  respect  of  which  inquiry 
is  made,  shall  accompany  the  application. 


CHAPTER  IV.— GENERAL. 
Registers  of  Patents  and  Designs. 

39.  Requests  under  section  63  of  the  Act  to  enter  a  claim  to   any  intet- 
Requests  under       est  in  a  patent  or  registered  design  shall  be  made  on 

section  63  of  the          Form  21,   accompanied  by  the  document  under  which 

^cj.  the  claim  is  made,  and  an  attested   copy  thereof.     If, 

however,  the  document  is  a  matter  of  record,  an  official 

or  certified  copy  thereof   may  be  produced  unless  the  Controller  otherwise 
directs. 

40.  Ten  clear  days'  notice  of  every  application  to  the  Court  under  section 
Rectification  of       64  of  the  Act  for  rectification  of  the  register  shall  be 

the  Register.  given  to  the  Controller. 

Appeals. 

41.  (i)  An  appeal  to  the  Governor  General  in  Council  from  the  decision 
Appeals         H  °^  ^^e  C°ntroller  shall  be   made  on  Form  24  and  shall 

be  left  at  the  office  in  duplicate   and  shall  show  fully 

the  reasons  for  appealing  and  the  grounds  on  which  objection  is  taken  to  the 
decision. 

(2)  The  Controller  shall  forward  one  copy  to  the  Governor  General  in 
Council  through  the  Secretary  in  the  Department  of  Commerce  and  Industry, 
who  shall  notify  the  appellant  of  its  receipt. 

Conversion  of  exclusive  privilege  into  a  patent. 

Conversion  of  42.  (i)  A  request  under  section  81  of  the  Act  for  the 

exclusive  privilege      couversion  o£  an  exclusive  privilege  into  a  patent  shall 

into  a  patent  ^e  ma(^e  on  Form  25,  and  shall  be  accompanied  by  the 

order  under  which  the  exclusive  privilege  was  acquired. 

(2)  The  Controller  shall   advertise  the  request  in  the  Gazette  of  India. 

(3)  Notice  of  application  to  the  conversion   may  be  given  'on   Form  5 
within  three  months  of  the  date  of  the  first  advertisement,   and  the  proce- 
dure for  the  disposal  of  such  opposition  shall  be  regulated  by  the  provision 
of  Rules  14,  15  and  16. 


176 


cretionary  power  of 
Controller. 


Miscellaneous  powers  of  the  Controller. 

43.  Before  exercising  any  discretionary  power  given  to  the  Controller  by 
"  f  ,.  the  Act  or  these  rules  adversely  to  the  applicant  for  a 

patent,  or  for  amendment  of  an  application  or  speci- 
fication, the  Controller  shall  (under  section  67  of  the 
Act)  give  notice  to  the  applicant  or  his  agent  and  shall 
if  so  required  within  one  month  of  the  date  of  such  notice,  appoint  a  date 
for  a  hearing  in  the  matter  and  shall  give  ten  days'  notice  thereof. 

44.  Whether  an  applicant  or  agent  desires  to  be  heard  or  not  the  Con- 

troller may  at  any  time  require  him  to  submit  a  state- 
ment in  writing  within  a  time  to  be  notified  by  the 

require  statem  nt.       Controller,  or  to  attend  before  him  and  make  explana- 
tion with  respect  to  such  matters  as  the  Controller  may  require. 

45.  Applications  for  extension  of  the  term  of  a  patent  under  section  15, 

or  for  amendment  under  section  17  shall,  if  so  directed 
by  the  Controller,  be  advertised  by  the  applicant  in 
not  less  than  two  newspapers  published  in  British  India. 

in  newspapers.  Copies  of  the  newspapers  containing  those  advertise- 

ments shall  be  supplied  to  the  Controller. 

Advertisement  of  such  application  shall  be  made  by  the  Controller  by 
Notification  in  the  Gazette  of  India. 

46.  Any  document  for  the  amending  of  which  no  special  provision  is 
~  .  made   by  the  Act  may  be  amended,   and   any  irregu- 
Uc                               larity  in  procedure  which,  in  the  opinion  of  the  Control- 
ler, may  be  obviated  without  detriment  to  the  interests 

of  any  person  may  be  corrected  if  the  Controller  think  fit,  and  upon  such 
terms  as  he  may  direct. 

47.  The  time  prescribed  by  these  rules  for  doing  any  act  or  taking  any 

proceeding  thereunder  may  be  enlarged  by  the  Con- 
troller, if  he  thinks  fit  and  upon  such  terms  as  he  may 
direct. 


General  power 
to  enlarge  time. 


INDIAN  PATENTS  AND  DESIGNS  RULES. 

SCHEDULES. 
and  Rule  4. 


I.  Fees,  section  57 

II.  Forms,  Rules  6. 

III.  Model  form  of  patent,  section  12  and  Rule  18. 

IV.  Classification  of  goods  for  designs,  sections  and  43  (3)  and  77  (i) 
(b)  and  Rule  26. 


THE  FIRST  SCHEDULE. 
( Vide  Section  57  and  rule  4.) 

FEES. 


Number 
of  entry. 

On  what  payable. 

Number 
of  Form. 

Proper 
Fee. 

i 

On  application  for  a  patent  under  section 

Rs.      A. 

3 

i  or  2 

10        o 

2 

For  extension  of  time  to  accept  application 
under  section  5  (4) 

4 

20           0 

3 

On  notice  of  opposition  under  section  9(1) 

5 

5        o 

4 

On  hearing  by  Controller  under  section  9 

(2).     By  applicant  and  opponent  respec- 

tively 

6 

10           0 

5 

Before  sealing  under  section  10  (i) 

7 

30        o 

6 

On  extension  of  time  for  sealing  under 

section  10  (2)  (d)  .  . 

4 

.... 

One  month 

10           0 

177 


Number 
of  entry. 


On  what  payable. 


Two  months 

Three  month ; 

On  certificate  of  renewal  under  section  14 

Before  expiration  of  4th  year  in  respect  of 
the  5th  year 

Before  expiration  of  5th  year  in  respe.Qt  of 
the  6th  year 

Before  expiration  of  6th  year  in  respect  of 
the  7th  year 

Before  expiration  of  7th  year  in  respect  of 
the  8th  year 

Before  expiration  of  8th  year  in  respect  of 
the  Qth  year 

Before  expiration  of  9th  year  in  respect  of 
the  loth  year 

Before  expiration  of  loth  year  in  respect 
of  the  nth  year 

Before  expiration  of  nth  year  in  respect 
of  the  1 2th  year 

Before  expiration  of  I2th  year  in  respect 
of  the  1 3th  year 

Before  expiration  of  I3th  year  in  respect 
of  the  i4th  year 

Note. —  The  'ees  for  two  or  more  years  may 
be  paid  in  advance. 

On  enlargement  of  time  for  payment  of 
renewal  fees  under  section  14  (2) 

One  month 

Two  months 

Three  months* 

On  petition  for  extension  of  term  of  patent 
under  section  15.. 

On  certificate  c":  renewal  in  respect  of  each 
year  under  section  15 

On  application  for  restoration  of  lapsed 
patent  under  section  16 

On  opposition  to  restoration  under  section 
16 

On  hearing  by  Controller  under  section  16 
By  applicant  and  opponent,  respectively 

On  application  to  amend  under  section  17 

Before  acceptance 

After  acceptance 

On  opposition  to  amendment  under  sec- 
tion 17  (3) 

On  hearing  by  Controller  under  section  17 
(4).  By  applicant  and  opponent,  res- 
pectively. 

On  petition  for  compulsory  license  or  revo- 
cation under  sections  22  and  23 

On  offer  to  surrender  a  patent  under  sec- 
tion 24 

For  duplicate  of  a  patent  under  section  39 

On  notice  to  Controller  of  intended  exhibi- 
tion of  an  invention  or  design  under  sec- 
tion 40  or  52  . .  ... 

On  request  to  register  design  under  sec- 
tion 43  in  classes  I  to  6  and  class  16  . . 

In  classes  7  to  1 5  . . 


Number 
of  Form. 


9 
5 

6 

10 


ii 

12 


13 
14 


Proper 
Fee. 


Rs.  A. 

20   O 

30  o 


50  o 

50  o 

50  o 

50  o 

50  o 

IOO  O 

ioo  a 

IOO  O 

ioo  a 

ioo  a 


10  o 

20  O 

30  o 

50  o 

IOO  O 

IOO  O 

5  o 

10  a 

10  a 

20  O 


TO   O 
IO   C 


10   O 
IO   O 


3  o 
o  8 


178 


Number 
of  entry. 

On  what  payable. 

Number 
of  Form. 

Proper 
Fee. 

, 

Rs.     A. 

22 

On  request  for  written  decision  under  Rule 

32 

15 

5     o 

23 

On    request    to    extend    copyright   under 

section  47 

16 

10      0 

24 

On  request  to  inspect  under  section  50    .  . 

17 

I       0 

25 

On  request  for  information  under  section 

51 

18 

. 

when  number  is  given 

.  . 

2      O 

when  number  is  not  given 

•    .  . 

4    o 

26 

On  inspection  of  the  register  under  sec- 

tion 59 

27 

On  request  for  certificate  under  section  59 

19 

I       0 

An  additional  fee  of  4  annas  for  every  100 

2       O 

words  in   excess   of  400   words  will  be 

charged.     Drawings     will     be     charged 

according  to  agreement. 

28 

On  request  to  correct  or  cancel  entry  in 

register  under  section  62 

20 

3     o 

29 

On  request  to  enter  claim  in  register  under 

section  63 

21 

5     o 

30 

On  request  to  alter  address  in  register     .  . 

22 

I       0 

3i 

On  entrv  of  order  of  Court  under  section 

64(4)".. 

23 

3     o 

32 

On    appeal    from    the    Controller    to    the 

Governor  General  in  Council  under  sec- 

tion 70 

24 

30    o 

33 

On  aplication  for  a  patent  in  place  of  an 

exclusive  privilege  under  section  8  1 

25 

3    P 

34 

On  opposition  to  grant  thereof  under  sec- 

tion 81 

5 

5    ° 

35 

On  hearing  by  Controller  under  section  81 

(3).     By  applicant  and  opponent,  res- 

pectively 

6 

10    o 

THE   SECOND   SCHEDULE. 
Forms. 

List  of  Forms. 


Form  No. 

Act,  Section. 

Title. 

Fee. 

Rs. 

i 

3 

Application  for  patent 

10 

2 

3. 

Do.                  do. 

10 

3 

4 

Specification 

4 

5  (4),  10(2),  14(2) 

Application  for  extension  of  time  .  . 

10,  20,  30 

5 

9  (i),  16,  17,81 

Notice  of  opposition 

5 

6 

9(2),  16,  17,  81 

Notice  of  intention  to  attend  hearing 

10 

7 

10 

Request  for  sealing 

30 

8 

H 

Request  for  certificate  or  renewal.  . 

50  or  100 

9 

16 

Application  for  restoration  of  patent 

ICO 

10 

17 

Application  to  amend 

10  or  20 

ii 

24 

Offer  to  surrender  patent 

10 

12 

39 

Application  for  duplicate  patent    .  . 

10 

13 

40  and  52 

Notice  of  intended  exhibition 

5 

179 


Form  No. 

Act,  Section. 

Title. 

Fee. 

• 

Rs. 

Designs. 

Annas  S 

14 

43 

Application  for  registration             .  .  or  Rs.  3. 

15 

Request  for  grounds  of  decision     .  .            5 

16 

47 

Application  for  extension  of  copy- 

right 

10 

17 

50 

Request  to  inspect  design 

i 

18 

Si 

.,         for  information 

2  or  4 

General. 

• 

19 

59 

Request  for  certificate                      .  .          2 

20 

62 

,  ,       to  cancel  or  correct          .  .          3 

21 

63 

,  ,       for  entry  in  register 

5 

22 

63 

,,        for  entry  of  address 

j 

23 

64 

Entry  of  order  of  Court 

3 

24 

5  (2),  9  (3)»  16(5), 

17  (6),  43  (4),  70 

Appeal 

30 

25 

81 

Application    for  conversion    of   ex- 

elusive  privilege 

3 

26 

76 

Power  of  authority  to  agent 

27 

76 

Statement  of  address 

Form  i. 

(Form  to  be  used  when  the  true  and  first  inventor  is  sole  or  joint  applicant.) 

INDIAN    PATENTS    AND    DESIGNS   ACT,  1911. 

Application  for  Patent,  Section  3. 

To  be  accompanied  by  the  specification  on  Form  3  in  duplicate. 
I  (or  we)  i 


do  hereby  declare  : — 

(i)  that*I  am  (or  we  are)  in  possession  of  an  invention  of  which  the  title 
is  2 

(ii)  that  I  (or  we)  (or  the  said  3. .    )  claim  to  be  the  true 

and  first  inventor  thereof ; 

(iii)  That  the  invention  is  not  in  use  by  any  other  person  ; 

(iv)  that  the  specification  filed  with  this  application  is,  or  any  amended 
specification  which  may  hereafter  be  filed  in  this  behalf  will  be,  true  of  the 
invention  to  which  this  application  relates  ; 

(v)  that  the  facts  and  matters  stated  herein  are  true  to  the  best  of  my 
(or  our)  knowledge,  information  and  belief. 

I  (or  we)  humbly  pray  that  a  patent  may  be  granted  to  me  (or  us)  for  the 
said  invention. 


Date  and  Sign.     Dated  this. 


.day  of . . . 
(Signed), 


19. 


To  the 


Controller  of  Patents, 

i ,  Council  House  Street,  Calcutta. 


I    Insert  name,  calling  and  address.     ^.  Insert  title.       3.  Insert  name. 


i8o 

Form  2. 


.Pee  Rs.  10. 


(Form  to  be  used  when  the  true  and  first  inventor  is  not  a  party  to  the 
application.) 

INDIAN    PATENTS    AND   DESIGNS  ACT,    1911. 

Application  for  Patent,  Section  3. 

To  be  accompanied  by  the  specification  on  form  3  in  duplicate. 
I  (or  we)  i 

do  hereby  declare: — 

(i)  that  I  am  (or  we  are)  in  possession  of  an  invention  of  which  the  title 
is  2 

(ii)  that  I  (or  we)  (the  said  3 )  claim  to  be  the 

assign  of  (or  the  legal  representatives  of )  4 

who  claims  and  is  believed  to  be  true  and  first  inventor  thereof  ; 

(iii)  that  the  invention  is  not  in  use  by  any  other  person ; 

(iv)  that  the  specification  filed  with  this  application  is,  or  any  amended 
specification  which  may  hereafter  be  filed  in  this  behalf  will  be,  true  of  the 
invention  to  which  this  application  relates ; 

(v)  that  the  facts  and  matters  stated  herein  are  true  to  the  best  of  my 
(or  our)  knowledge,  information  and  belief. 

I  (or  we)  humbly  pray  that  a  patent  may  be  granted  to  me  (or  us)  for  the 
said  invention. 

Date  and  sign.     Dated  this day  of 19 

(Signed) 

To  the 

Controller  of  Patents, 

i,  Council  House  Street,  Calcutta. 

Note  i.  If  the  inventor  does  not  wish  to  be  a  party  to  the  application, 
the  applicant  shall  produce  for  inspection  by  the  Controller  the  original  deed 
of  assignment  or  other  document  under  which  he  is  enabled  to  apply  for  a 
patent  and  shall  supply  a  copy  thereof  to  be  retained  by  the  Controller, 
unless  the  application  itself  is  endorsed  in  the  following  form  signed  by  the 
inventor. 

15 •' 

referred  to  on  the  reverse  of  this  document  as  claiming  to  be  the  true  and 
agree  that  the  said  application  shall  be  made  without  my  name  as  an  appli- 
cant for  a  patent. 

Dated  this day  of 19 

(Signed) 

Signature  of  2  witnesses 

1 .  Insert  name,  calling  and  address. 

2.  Insert  title. 

3.  Insert  name. 

4.  Insert  full  name,  address  and  calling  of  true  and  first  inventor.     See 
notes. 

5.  Insert  full  name,  calling  andjiddress. 


To  the 

Controller  of  Patents, 

i,  Council  House  Street,  Calcutta. 

Note  2.  If  the  application  is  made  by  the  legal  representative  of  a 
deceased  inventor,  the  legal  representative  shall  produce  for  inspection  the 
probate  of  the  will  or  the  letters  of  administration  granted  of  the  estate  and 
effects  of  the  inventor,  or  an  official  copy  of  such  probate  or  letters,  or  such 
other  evidence  of  his  title  as  the  Controller  may  require. 


Form  3. 

(To  be  supplied  in  duplicate  with  Form  i  or  Form  2.) 

INDIAN   PATENTS   AND   DESIGNS   ACT,    1911. 

Specification,  Section  4. 

No  fee. 


The  following  specification  particularly  describes  and  ascertains  in  the 
nature  of  the  invention  and  the  manner  in  which  the  same  is  to  be  per- 
formed : — 


The  completion  of  the  description  should  be  followed  by  the  words  I  (or 
we)  claim  : — After  which  should  be  written  the  claim  or  claims  numbered 
consecutively.  The  specification  and  the  duplicate  thereof  must  be  signed 
at  the  end  and  dated  thus  :  Dated  the.. day  of 19 


1.  Insert  title  verbally  agreeing  with  that  in  the  application  form. 

2.  Insert  name,  calling  and  address  of  applicants  as  in  application. 

3.  Here  begin  full  description  of  the  invention.     The  continuation  of 
the  specification  should  be  upon  wide  ruled  paper   of  a  size  approximately 
of   13  inches  by  8  inches,  on  one  side  only,  with  a  margain  of  i|  inches  on 
the  left  hand  part  of  the  paper. 

Note. —In  the  preparation  of  the  claim  or  claims  careful  attention  should 
be  paid  to  the  terms  of  Rule  11  of  the  Indian  Patents  and  Designs  Rules, 
1912.  Any  unnecessary  multiplicity  of  claims  or  prolixity  of  language 
should  be  avoided. 


182 

Form  4. 


Fee  Rs.  10,  20  or 
30.  See  note  below. 


INDIAN   PATENTS    AND    DESIGNS   ACT,    1911. 
Application  for  extension  of  time,  sections  5,  loor  14. 

I  (or  we)  i 

do  hereby  apply  for months'  extension  of  time  : — 

2  (a)  Under  section  5  (4)  for  the  acceptance  of  the  application  for  a 
patent  No of 

,,  (b)  Under  section  10  (2)  (d)  for  the  sealing  of  a  patent  on  applica- 
tion No of 

,,  (c)  Under  section  14  (2)  for  payment  of  renewal  fees  on  patent 
No of 

The  reasons  for  making  this  application  are  as  follows  3  : — 
My  (or  our)  address  for  service  in  British  India  is  4 : — 


Date  and  sign.  Dated  this day  of 19 

Signed 

To  the 

Controller  of  Patents, 

i,  Council  House  Street,  Calcutta. 

Note. — Time  allowed  and  fees  payable — 

(a)  Three  months  Rs.  20. 

(6)  or  (c)  One  month,  Rs.    10;  two  months,  Rs.  20;  three  months 
Rs.  30. 


Form  q. 


Fee  Rs. 


INDIAN   PATENTS   AND   DESIGNS   ACT,  1911. 
Notice  of  opposition,  sections  9,  16,  17  or  81. 

(To  be  supplied  in  duplicate.) 
1  (or  we)  5 


1.  Insert  name,  calling  and  address. 

2.  a,  b,  ct  strike  out  when  not  applicable.     Quote  number  and  year  of 
application  or  patent. 

3.  Insert  reasons. 

4.  Insert  address. 

5.  Insert  name,  calling  and  address. 


do  hereby  give  notice  of  my  (or  our)  intention  to  oppose— 

I  (a)  Under  section  9,  the  grant  of  a  patent. 

,,  (b)  Under  section  16,  the  restoration  of  lapsed  patent. 

,,  (c)  Under  section  17,  the  amendment. 

,,  (d]  Under  section  81,  the  conversion  of  exclusive  privilege. 

upon  application  for  patent  No.  2 of  19 entitled 

applied  for  by  3 


The  grounds  of  opposition  are  as  follows  4  : — 


I  (or  we)  declare  that  the  facts  and  matters  stated  herein  are  true  to 
the  best  of  my  (or  our)  knowledge,  information  and  belief. 
My  (or  our)  address  for  service  in  British  India  is  5  : — 


Date  and  sign.  .       Dated  this day  of 19. 

Signed 


To  the 

Controller  of  Patents, 

i,  Council  House  Street,  Calcutta. 


Form  6. 


Fee  Rs.  10. 


INDIAN    PATENTS    AND    DESIGNS    ACT,  1911. 

Notice  of  intention  to  attend  hearings  of  opposition,  sections  9,  16,  17 
and  81. 

I  (or  we)  6 

hereby  give  notice  that  the  hearing  in  reference  to  7 


will  be  attended  by  myself  (or  ourselves)  or  by  some  person  on  my  (or  our) 
behalf. 

Date  and  sign.  Dated  this day  of 19 

(Signed) 

To  the 

Controller  of  Patents, 

i,  Council  House  Street,  Calcutta. 

Note  : — The  Controller  may  refuse  to  hear  any  party  who  has  not  left 
this  notice  and  paid  the  prescribed  fee  at  least  two  clear  days  before  the 
date  fixed  for  the  hearing. 


1.  a,  b,  c,  d,  strike  out  when  not  applicable. 

2.  Insert  number,  date  and  title. 

3.  Insert  name  of  person  making  application  which  is  opposed. 

4.  Insert  grounds. 

5.  Insert  address. 

6.  Insert  name,  calling  and  address. 

7.  Insert  particulars. 


184 


Form  7. 


INDIAN    PATENTS    AND   DESIGNS   ACT,    1911. 
Request  for  sealing,  section  10. 

I  (or  we)  1 

desire  to  have  a  patent  sealed  on  my  (or  our)  application  2  of . . . 


and  request  that  the  following  address  in  British  India  may  be  entered  on 
the  Register  as  my  (or  our)  address  for  service  in  British  India  3 


Dated  this day  of. 

(Signed) 


19. 


Date  and  sign. 

To  the 

Controller  of  Patents, 

i,  Council  House  Street,  Calcutta. 

Note. — If  a  patent  is  to  be  sealed,  so  that  rights  may  accrue  under  sec- 
tion 12  of  the  Act,  this  request,  together  with  the  fee  of  Rs.  30,  must  be 
received  in  the  Patent  Office  before  the  expiration  of  18  months  from  the 
date  of  the  application  or  within  such  extended  times  as  are  allowed  in  sec- 
tion 10  (2).  An  extension  of  time  not  exceeding  three  months  shall  be 
allowed  under  section  10  (2)  (d)  on  application  being  made  on  Patents  Form 
No.  4  accompanied  by  the  fee  of  Rs.  10  for  one  month,  Rs.  20  for  two 
months  or  Rs.  30  for  three  months. 


Form  8. 


INDIAN    PATENTS   AND    DESIGNS    ACT,   1911. 
Request  for  certificate  of  payment  or  renewal,  section  14. 

I  for  we)  transmit  the  fee  of  Rs by  4 in  payment  of  the 

renewal  fee  on  patent  No of granted  to 

and  request  that  the  usual  certificate  may  be  granted. 

Dated  this day  of 19 

Signature 

Address 

To  the 

Controller  of  Patents, 

i,  Council  HouSe  Street,  Calcutta. 


1.  Insert  name,  calling  and  address. 

2.  Insert  number  and  date.  3.  Insert  address  for  service. 
4.  State  whether  cash,  note,  money  order  or  postal  order. 


Form  9. 


Fee  Rs.  50  or 
Rs.  loo. 


INDIAN   PATENTS   AND    DESIGNS   ACT,  1911. 

Restoration  of  Patent,  section  16. 
I  (or  we)  a 

hereby  apply  for  an  order  of  the  Controller  for  restoration  of  the  patent  No. 
b of granted    to 


The  circumstances  which  have  led  to  the  omission  to  pay  the  fee  of  Rs.  c. . . 
on  or  before  the  d day  of as  are  follows  e 


I  (or  we)  declare  that  the  facts  and  matters  stated  herein  are  true  to  the 
best  of  my  (or  our)  knowledge,  information  and  belief. 

My  (or  our)  address  for  service  in  British  India  is  f 

Date  and  sign.  Dated  this day  of 19. ... 

(Signed) 

To  the 

Controller  of  Patents, 

i,  Council  House  Street,  Calcutta. 


Form  10. 


Fee  Rs.  10  before  ! 

acceptance,  Rs.  20  j 

after  acceptance,    i 


INDIAN   PATENTS   AND    DESIGNS   ACT,  1911. 

Amendment,  section  17.' 
I  (or  we)  a 


seek  leave  to  amend  the 


g- 


a.  Insert  name,  calling  and  address. 

b.  Insert  number  and  date. 

c.  Insert  amount. 

d.  State  last  date  when  fee  was  due. 

e.  The  circumstances  must  be  stated  ia  detail. 
.f.  Insert  address  for  service. 

g.  State  whether  application,  specification  or  drawings. 

24 


i86 

of  application  for  patent  No.  a dated 

as  shown  in  red  ink  in  the  copy  b  hereunto  annexed. 

c  I  (or  we)  declare  that  no  suit  for  infringement  or  proceedings  before  a 
Court  for  revocation  of  the  Patent  in  question  is  pending. 

My  (or  our)  reasons  for  making  this  amendment  are  as  follows  d 

I  (or  we)  declare  that  the  facts  and  matters  stated  herein  are  true  to  the 
best  of  my  (or  our)  knowledge,  information  and  belief. 

My  (or  our)  address  for  service  in  British  India  is  e 
Date  and  sign.  Dated  thig dfty  of lg 

(Signed) 

To  the 

Controller  of  Patents. 

i,  Council  House  Street,  Calcutta. 


Form  ii. 


Fee  Rs.  10. 


INDIAN    PATENTS    AND    DESIGNS   ACT,  1911. 

(Surrender  of  Patent,  section  24.) 
I  (or  we)  f . .      


hereby  offer  to  surrender  the  Patent  No.  a , 
dated granted  to 


No  suit  for  infringement  or  proceedings  for  revocation  of  the  patent  is 

pending.     My  (or  our)  reasons  for  making  this  offer  are  as  follows  d 

• 

I  (or  we)  declare  that  the  facts  and  matters  stated  herein  are  true  to  the 
best  of  my  (or  our)  knowledge,  information  and  belief. 

My  (or  our)  address  for  service  in  British  India  is  e  : — 

Date  and  sign.         Dated  this day  of 19 

(Signed) 

To  the 

Controller  of  Patents, 

i,  Council  House  Street,  Calcutta. 


a.  Insert  number  and  date. 

b.  If  the  specification  has  been  printed,  an  officially  printed  copy  shall 

be  used. 

c.  Strike  out  this  paragraph  if  a  patent  has  not  been  sealed. 

d.  Insert  reasons. 

e.  Insert  address. 

f.  Insert  name,  calling  and  address. 


187 


Form  12. 


Pee  Rs.  10. 


INDIAN    PATENTS    AND    DESIGNS   ACT,  1911, 

(Application  for  Duplicate  Patent,  section  39.) 
I  (or  we)  a 


regret  to  have  to  inform  you  that  the  Patent  No.  b . 

dated 

granted   to c 

has  been  d 


I  (or  we)  declare  that  the  facts  and  matters  stated  herein  are  true  to  the 
best  of  my  (or  our)  knowledge,  information  and  belief. 

I  (or  we)  beg   therefore  to  apply  for  the  issue  of  a  duplicate  of  such 
patent. 

Dated  this day  of. 19 

(Signed) 

To  the 

Controller  of  Patents, 

i,  Council  House  Street,  Calcutta. 


Form  13. 


Fee  Rs.  5. 


INDIAN  PATENTS  AND   DESIGNS   ACT,  1911. 
(Notice  of  Intended  Exhibition,  section  40  and  section  52.) 
I  (or  we)  a 

hereby  give  notice  that  I  (or  we)  intend  to  exhibit  my  (or  our)  invention  (or 
design)  c 


a.  Insert  name,  calling  and  address. 

b.  Insert  number  and  date. 

c.  Insert  name  of  original  grantee. 

d.  Insert  the  word  "  lost "  or  "  destroyed  "  as  the  case  may  be  and  state 
fully  the  circumstances.     Also  state  the  interest  possessed  by  the  applicant 
in  the  patent. 

e<  Insert  short  description  of  invention  or  design. 


i88 


at  the  a exhibition  certified  or  notified  by 

Act,  1911.,  as  an  international  or  industrial  exhibition. 

Date  and  sign.     Dated  this day  of 19 

(Signed) 

To  the 

Controller  of  Patents, 

i,  Council  House  Street,  Calcutta. 
Form  14. 


Pee  Annas  8  or 
Rs.  3  according 
to  classification. 


INDIAN   PATENTS   AND    DESIGNS   ACT,  1911. 
(Application  for  Registration  of  Design,  section  43.) 

You  are  requested  to  register  the  accompanying  design  in  Class  No.  b. . 

in  the  name  of  c 

who  claims  to  be  the  proprietor  thereof. 

Four  exactly  similar  d of  the  design  accompany  this  request. 

The  design  is  to  be  applied  to  e Address  for  service  in 

British  India  is  f 

Date  and  sign.     Dated  this day  of 19 

(Signed) 

To  the 

Controller  of  Designs, 

i,  Council  House  Street,  Calcutta. 

Note. — Trade  or  property  marks  are  not  registered  under  the  Patents 
and  Designs  Act,  1911. 


Form  15. 


Fee  Rs.  5. 


INDIAN   PATENTS   AND    DESIGNS   ACT,  1911. 
(Request  Under  Rule  32.) 


Application  for  design  No. 
Class   . 


a.  Insert  name. 

b.  Insert  number  of  class. 

c.  Insert  name,  calling  and  address. 

d.  State  whether  drawings,  photographs,  tracings,  or  specimens. 

e.  Insert  name  of  article  or  articles  to  which  design  is  to  be  applied. 

f.  Unless  an  address  for  service  in  British  India  is  given,  the  request 
will  not  be  considered. 


189 

You  are  hereby  requested  under  Rule  32  of  the  Patents  and  Designs 
Rules  to  state  in  writing  the  grounds  of  your  decision  and  the  materials  used 
by  you  in  arriving  at  such  decision. 

Address  for  service  in  British  India  is : 

Dated  this day  of 19 

(Signed) 


To  the 

Controller  of  Patents, 

i,  Council  House  Street,  Calcutta. 


Form  16. 


Fee  Rs.  10. 


INDIAN   PATENTS   AND   DESIGNS   ACT,    1911. 
(Application  to  extend  Copyright,  section  47.) 

You  are  requested  by  the  undersigned  who  is  the  registered  proprietor 

of  the  Design  No registered  in  class to  extend  the  period  of 

copyright  for  a  period  of  five  years. 

Address  for  service  in  British  India  is.: 

Dated  this day  of 19 

(Signed) 

To  the 

Controller  of  Patents, 

i,  Council  House  Street,  Calcutta. 


Form  17. 


INDIAN   PATENTS   AND    DESIGNS   ACT,  1911. 
(Inspection  of  Design,  section  50.) 

You  are  requested  by  the  undersigned  who  is  the  registered  proprietor 
of  the  design  No.  a registered  in  Class  No to  allow  him  or  his 


a.  Insert  number  and  class. 


i  go 


nominee  a 


to  inspect  the  design. 

Dated  this day  of 19. 

Signed 

Address 

Signature  of  nominee 


To  the 


Controller  of  Designs, 

i,  Council  House  Street,  Calcutta. 


Form  1 8. 


Fee  Rs.  2  or  4. 


INDIAN   PATENTS    AND    DESIGNS   ACT,  1911. 
(Request  for  information,  section  51.) 

You  are  requestsd  to  give  to  the  undersigned  such  information  as  he 
may  be   entitled   to  under  section  51  of  the  Act  in  respect  of  the  design 

No.. 


,19. 


Address  for  service  is 

Dated  this day  of 

(Signed) ; 

To  the 

Controller  of  Designs, 

i,  Council  House  Street,  Calcutta. 

Note. — If  the  number  cannot  be  given  and  information  is  required  re- 
garding a  design,  two  samples  of  the  design  may  be  attached  to  this  form 
which  must  then  be  accompanied  by  a  fee  of  Rs..  4. 


Form  19. 


Fee  Rs.  2.     See 
foot-note. 


INDIAN    PATENTS   AND    DESIGNS   ACT,    1911. 
(Request  for  Certificate,  section  59.) 


a.  Insert  name  of  nominee  who  must  also  sign  the  application. 

b.  Insert  number  and  date. 


I  (or  we)  a 


hereby  request  you  to  furnish  me  (or  us)  with  your  certificate  to  the 
effect  that  b 

and  to  send  the  certificate  to  c 

Dated  this day  of 19 

(Signed) 

7*o  the 

Controller  of  Patents  and  Designs, 

i,  Council  House  Street,  Calcutta. 

Note. — An  extra  charge  of  annas  four  will  be  charged  for  every  100 
vrords  in  excess  of  400.  The  certificate  will  not  be  supplied  until  the  charge 
is  paid. 


Form  20. 


INDIAN   PATENTS   AND    DESIGNS   ACT,  1911. 
(Request  for  correction  or  cancellation,  section  62  of  Act.) 


In  the  matter  of  (Design 


PatentNo.d of 

I  (or  we)      a 


hereby   request  you  under  the  power  given  by  section  62  of    the  Indian 
Patents  and  Designs  Act,  191 1 ,  to  c 


My  (or  our)  address  for  service  in  British  India  is  a  : 

Date  and  sign.  Dated  this day  of 19. 

To  the  (Signed) 

Controller  of  Patents  and  Designs, 

i,  Council  House  Street,  Calcutta. 


a.  Insert  name,  calling  and  address. 

b.  Here  set  out  the  particulars  which  the  Controller  is  requested  to 

certify. 

c.  Insert  name  and  address.     Date  and  sign, 

d.  Insert  number  and  date. 

e.  Insert  particulars. 


IQ2 


Form  21. 


Fee  Rs.  5 . 


INDIAN    PATENTS   AND   DESIGNS    ACT,    1911. 
(Request  for  Entry  in  Register,  section  63.) 


Patent  No.  b of 

I  (or  we)  c 


In  the  matter  of  {Design 


, 
claim  to  be  entitled  by  (or  as)  d 


to  the  following  interest  e. 


f  in  the  Patent  No of 

in  the  registered  design  No class 

granted  to  g- 

in  proof  whereof  I  (or  we)  transmit  the  accompanying  h . . . 


together  with  an  attested  copy  thereof  and  I  (or  we)  request  that  an  entry 
may  be  made  in  the  Register. 

My  (or  our)  address  for  service  in  British  India  is  a : 

Date  and  sign.  Dated  this day  of 19 

(Signed) 

To  the 

Controller  of  Patents  and  Designs, 

i,  Council  House  Street,  Calcutta. 


a.  Insert  address. 

b.  Insert  number  and  date. 

c.  Insert  name,  calling  and  address. 

d.  Insert  ground  of  claim  whether  by  assignment,  transmission,  etc., 

or  as  mortgagee,  licensee  or  otherwise. 
e..  Insert  nature  of  interest. 

f.  Insert  nature  and  date  of  patent,  or  number  and  class  of  the  regis- 

tered design. 

g.  Insert  name. 

h.  Insert  nature  of  document. 


103 


Fee  Re.  r. 


INDIAN    PATENTS   AND    DESIGNS    ACT,    1911. 
(Entry  of  Alteration  of  Address.) 

In  the  matter  of  (  Patent  No of 

{  Design  No •  -class. 

I  (or  we)  a 


hereby  request  that  the  following  address  in  British  India  may  be  entered  in 

the  Register,  viz.  b ... 

and  request  that  the  existing  address  which  is  as  follows  may  be  cancelled  c 

Date  and  sign.     Dated  this day  of 19 

(Signed) 

To  the 

Controller  of  Patents  and  Designs, 
i,  Council  House  Street,  Calcutta 

Note. — This  form  may  only  be  used  for  a  request  to  correct  a  name  or 
alter  an  address  upon  the  Register.  It  may  not  be  used  as  a  request  to 
register  any  change  of  interest  in  a  patent  or  registered  design. 


Form  23. 


Fee  Rs.  3. 


INDIAN    PATENTS    AND    DESIGNS   ACT,    191 1. 
(Entry  of  Order  of  Court,  section  64.) 

I  (or  we)  a ". 

hereby  transmit  an  office  copy  of  an  order  of  the  Court  with  reference  to  d 


and  request  that  the  register  may  be  rectified. 

Date  and  sign.     Dated  this day  of 19. . . . . 

(Signed). 
To  the 

Controller  of  Patents  and  Designs, 

r.  Council  House  Street,  Calcutta. 


a.  Insert  name,  calling  and  address, 

b  Insert  address  to  be  entered 

c.  Insert  address  to  be  cancelled. 

d.  Insert  purport  of  order. 

15 


194 

Form  24. 


Fee  Rs.  30. 


INDIAN    PATENTS   AND    DESIGNS    ACT,   1911. 
(Appeal  to  Governor- General  in  Council  under  sections  5,  9,  16,  17,  43  or  70.) 

I  (or  we)  a 

hereby  appeal  to  the  Governor-General  in  Council  from  the  decision  (or  that 

part  of  the  decision)  b  of  the  Controller,  dated  the  c day  of 

....  19 whereby  he — 

(a)  refused  to  accept  an  application  for  a  patent  under  section  5  ; 

(b)  required  an  amendment  under  section  5  ; 

(c)  decided  an  opposition  under  section  9 ; 

(d)  restored  a  lapsed  patent  under  section  16  ; 

d  (e)  refused  to  restore  a  lapsed  patent  under  section  16  ; 
(/)  allowed  an  amendment  under  section  17  ; 
(g)  refused  to  allow  an  amendment  under  section  17  ; 
(h]  refused  to  register  a  design  under  section  43. 

The  reasons  for  appealing,  and  the  full  statement  of  the  grounds  upon 
which  I  (or  we)  rely  for  objecting  to  the  decision,  are  as  follows  z. : — 

Note. — This  form  in  duplicate  should  be  sent  to  the  Controller  of  Patents 
and  Designs,  I,  Council  House  Street,  Calcutta,  who  will  proceed  under 
Rule  41. 


Form  2^. 


Fee  Rs.  3. 


INDIAN    PATENTS    AND    DESIGNS   ACT,   1911. 
(Application  for  conversion  of  exclusive  privilege,  section  81.) 

(To  be  accompanied  by  the  order  under  which  the  exclusive  privilegt 
was  obtained.} 

I  (or  we)  a.  . 

do  hereby  declare  : — 


a.  Insert  name,  calling  and  address. 

b.  Strike  out  if  not  applicable. 

c.  Insert  date  of  decision.     The  appeal  must  be  made  within  two  months 
of  that  date. 

d.  Strike  out  parts  not  applicable. 

e.  State  fully,  continuing  on  further  sheets  and  on  one  side  only.     The 
last  page  must  be  dated  and  signed. 


195 

(i)  that  1  am  (or  we  are)  in  possession  under  the  Inventions  and 
Designs  Act,  1888,  of  an  exclusive  privilege  registered  as  No. 
a  ..............  of  ..............  and  obtained  by  .............. 

(ii)  that  no  other  person  has  any  share  or  interest  in  the  said  exclu- 

sive privilege  b 
(iii)  that  the  facts  and  the  matters  stated  herein  are  true  to  the  best 

of  my  (or  our)  knowledge,  information  and  belief. 

I  (or  we)  pray  that  a  patent  under  the  Indian  Patents  and  Designs  Act 
191  1,  may  be  granted  to  me  (or  us)  in  substitution  for,  and  bearing  the  same 
date  as,  the  said  exclusive  privilege. 

Date  and  sign.         Dated  this  ............  day  of  19 


Controller  of  Patents  and  Designs, 
i,  Council  House  Street,  Calcutta. 


Note.—  If  any  person  has  any  share  or  interest  in  the  exclusive  privilege 
consent  in  writing  should  be  obtained  and  forwarded  with  his  application. 


Form  26. 


Stamp  to  be 

attached,  see 

foot-note. 


INDIAN   PATENTS   AND    DESIGNS    ACT.    1911. 

(Power  of  Authority  to  Agent.) 
In  connection  with  c 


I  (or  we),  the  undersigned  hereby  authorise  d 
of..  


to  act  as  my  Agent  b  and  to  receive  all  notices,  requisitions  and  communica- 
tions until  further  notice. 

e  And  I  (or  we)  revoke  the  previous  authority  given  by  me  (or  us)  tof. . 


in  this  matter. 

'  g  Dated  this day  of 19 

Signature 

Address 

To  the 

Controller  of  Patents  and  Designs, 

r,  Council  House  Street.  Calcutta. 

Note. — This  form  is  liable  to  stamp  duty  under  the  Indian  Stamp  Act, 
II  of  1889.     When  power  is  given  to  one  or  more  persons  as  Agents  to  act  in 


a.  Insert  number  and  date.  b.  See  footnote. 

c.  State  particulars.         d.  Insert  name  and  address  of  Agent. 

e.  Cancel  if  not  required. 

f .  Insert  name  of  Agent  whose  authority  is  cancelled. 
£.  Insert  date,  signature  and  address. 


196 

a  single  transaction,  it  will  be  sufficient  if  the  form  bears  a  special  adhesive 
label  of  the  value  of  one  rupee  only.  When  power  is  given  to  not  more  than 
five  persons  to  act  jointly  and  severally  in  more  than  one  transaction,  or 
generally  in  respect  of  several  patents  or  designs  applications,  then  a  special 
adhesive  label  of  five  rupees  value  should  be  affixed. 


Form  27. 

INDIAN    PATENTS   AND    DESIGNS   ACT,    1911. 

(Statement  of  Address.) 
In  connection  with  a 


I  (or  we)  the  undersigned  request  that  until  further  notice  all  notices, 
requisitions,  &c. ,  may  be  sent  to  b at 

Date  and  sign.  Dated  this day  of 19 

Signature 

To  the 

Controller  of  Patents  and  designs, 

i,  Council  House  Street,  Calcutta. 


THE   THIRD   SCHEDULE. 

(Model  Form  of  Patent.) 

Government  of  India. 

Patent. 
No of 19 

Whereas  A.  B.  of hath  declared  that  he  is  in  possession 

of  an  invention  for (quote  title) and  that  he  is 

the  true  and  first  inventor  thereof  (or  the  legal  representative  or  assignee  of 
the  true  and  first  inventor)  and  that  the  same  is  not  in  use  by  any  other 
person  to  the  best  of  his  knowledge,  information  and  belief. 

And  whereas  he  hath  humbly  prayed  that  a  patent  might  be  granted  to 
him  for  the  said  invention. 

And  whereas  he  hath  by  his  specification  (of  which  a  copy  is  here- 
unto annexed)  particularly  described  and  ascertained  the  nature  of  the 
invention  and  the  manner  in  which  the  same  is  to  be  performed. 

The  Governor-General  in  Council  is  pleased  to  order  by  these  presents 
that  the  above  said  petitioner  (including  his  legal  representatives  and  assignees 
or  any  of  them)  shall,  subject  to  the  provisions  of  the  Indian  Patents  and 
Designs  Act,  1911,  as  patentee  have  the  exclusive  privilege  of  making,  sell- 
ing and  using  the  invention  throughout  British  India  (including  British 
Baluchistan  and  the  Santhal  Parganas)  and  of  authorizing  others  so  to  do 

for  the  term  of  14  years  from  the day  of 19 subject 

to  the  condition  that  the  validity  of  this  patent  is  not  guaranteed  by  Govern- 
ment c  (and  that  Government  shall  have  the  right  to  use  the  invention 
either  without  payment  or  on  such  terms  as  it  may  consider  reasonable)  and 
also  provided  that  the  fees  prescribed  for  the  continuation  of  this  patent  are 
duly  paid. 

In  witness    whereof   the   Governor-General  in  Council  has  caused  this 

patent  to  be  sealed  as  of  the day  of 19 

Signature  of  Controller 

Date  of  sealing 


a.  State  particulars. 

b.  Insert  name  and  address. 

c.  For  Government  servant  only. 


Note. — Renewal  fees  will  be  due  on  this  patent,  if  it  is  to  be  continued, 
on  the day  of 19 and  on  the  same  day  in  each  year 

thereafter. 

THE   FOURTH    SCHEDULE. 
(Classification  of  Goods.) 

Class  i. — Articles  composed  wholly  of  metal  or  in  which  metal  predomi- 
nates not  included  in  Class  2. 

Class  2. — Jewellery. 

Class  3. — Articles  composed  wholly  of  wood,  bone,  ivory,  papiermache, 
or  other  solid  substances  not  included  in  other  classes,  or  of  materials  in 
which,  such  substances  predominate. 

Class  4.— Articles  composed  wholly  of  glass,  earthenware,  or  porcelain, 
bricks,  tiles,  or  cement,  or  in  which  such  materials  predominate. 

Class  5. — Articles  composed  wholly  of  paper  (except  paper  hangings), 
card-board,  mill-board  or  straw-board,  or  in  which  such  materials  predomi- 
nate. 

Class  6. — Articles  composed  wholly  of  leather  or  in  which  leather  pre- 
dominates, and  bookbinding  of  all  materials. 

Class  7. — Paper  hangings. 

Class  8.— Carpets  and  rugs  in  all  materials,  floorcloths,  and  oil  cloths. 

Class  9  — Lace. 

Class  10. — Hosiery. 

Class  ii. — Millinery  and  wearing  apparel,  including  boots  and  shoes. 

Class  12. — Ornamental  needlework  on  muslin  or  other  textile  fabrics. 

Class  13. — Printed  or  woven  designs  on  textile  piece-goods  (other  than 
cheqks  or  stripes). 

Class  14. — Printed  or  woven  designs  on  handkerchiefs  and  shawls  (other 
than  checks  or  stripes). 

Class  1 5.— Printed  or  woven  designs  (on  textile  piece-goods  or  on  handker- 
chiefs or  shawls)  being  checks  or  stripes. 

Class  1 6. — Goods  not  included  in  other  classes. 

NOTICES. 
THE  PATENT  OFFICE. 

i,  Council  House  Street,  Calcutta. 

Public  room  open,  n  A.M.,  to  4P.M.,  Saturdays  n  A.M.  to  i  P.M. 

1.  All  communications  relating  to  applications  for  leave  to  file  specifica- 
tions and  for  registration  of  designs  under  the  Inventions  and  Designs  Act 
(V  of  1888),  or  in  continuation  of  such  applications,  should  be  addressed  to 
the  Patents  Secretary,  i,    Council  House  Street,  Calcutta.     Documents  sent 
by  post  should  be  carefully  packed. 

2.  Directions  for  the  guidance  of  inventors  and  others  are  given  in  the 
Act  Manual  (Price  Re.  i  or  is.  6d.) 

3.  Fees  payable  under  thje  fourth  and  sixth  schedules  are  payable  in 
cash  and  must  be  received  in  the  office  within  the  times  allowed  by  the  Act. 
When  cheques  are  offered  in  payment  of  fees,  it  must  be  clearly  understood 
that  the  office  cannot  hold  itself  responsible  for  any  delay  that  may  occur  in 
the  collection  of  cash  on  the  cheques ;  any  cheque  not  payable  in  Calcutta 
is  subject  to  commission.     In  cases  where  it  is  not  possible  to  have  the  fees 
handed  in  at  the  Patent  Office,  it  would  be  preferable  to  have  them  sent  by 
money  order  payable  at  Calcutta  to  the  Patent's  Secretary. 

4..  Trade  marks  are  not  registered  and  medicines  are  not  patented 
imder  the  Inventions  and  Designs  Act. 

5.  Applications  made  under  the  Act  are  placed  for  inspection  in  the 
public  room  for  ten  days  from  the  date  of  the  Gazette  of  India  in  which  their 
filing  has  been  notified. 

6.     Specifications  of  inventions  which  have  been  notified  as  filed  in  the 
Gazette  of  India  may  be  inspected  on  payment  of  a  fee  of  one  ruppee  at — 

Calcutta— Patent  Office,  i ,  Council  House  Street. 
Madras-- Record  Office,  Egmore. 


198 


Bombay — Record  Office. 

Rangoon — Office  of  the  Revenue  Secretary  to  the  Government. 

Cawnpore — Office  of  the  Director  of  Industries,  United  Provinces. 

7.     Publications  on  sale  at  the  Patent  Office  : —  Price. 

Rs.  A. 

(a)  Act  Manual,  comprising  the  Inventions  and  Designs  Act 
(V  of  1888)  and  an  explanatory  memorandum  and  directions  for 
the  guidance  of  parties  applying  for  the  protection  of  inventions  or 
designs  . .      i     o 

(b)  The  Indian  Patents  and  Designs  Act  ion  (II  of  1911)       . .     o  10 

(c)  Weekly  Notifications  (extract  from  the  Gazette  of  India)  . .     o     i 

Annual  subscription  with  postage    . .      3     « > 

(d)  Inventions  (consolidated  subject-matter  index,  1900 — 1908, 
and  chronological  list  1900-1904 

(e)  Inventions    and    Designs.     Annual   indexes   for  the  years 
19°5>  I9°6>  T9O7>  ^908,  1909,  1910  each     ..      i     o 

(/)  Quarterly  index,    January  to  March  and  April  to    June, 
1911  ..     o     S 

H.  G.  GRAVES, 
Secretary  under  the  Inventions  and  Designs  Act,  V  of  1888. 


LECTURE  VI. 
THE  LAW  OF  COPYRIGHT, 

Copyright — what  it 

The  word  copyright  now  stands  for  a  compre-  denotes, 
hensive  class  of  rights  in  respect  of  literary,  drama- 
tic, musical  and  artistic  work.  It  will  be  rny  endea- 
vour to  explain  in  due  course  the  exact  character 
and  extent  of  this  right.  But  in  doing  so  it  will  be 
necessary  to  discuss  in  brief  the  stages  of  develop- 
ment of  this  right  in  English  jurisprudence.  « uterar 

In  its  earliest  signification  copyright  was  regarded  property/ 
as  ' literary  property.'  I  shall  confine  myself  for  the 
present  to  this  so-called  property  in  literary  and 
dramatic  productions  only,  as  distinguished  from 
property  in  musical  and  artistic  productions.  Every- 
one, it  is  said,  should  enjoy  the  reward  of  his  labour. 
What  a  man  has  sown  he  should  be  entitled  to  reap. 
This  stands  to  reason,  and  it  can  scarcely  be  doubted 
that  literary  labour,  from  which  the  most  extensive 
and  far-reaching  benefit  accrues  to  mankind,  should 
also  confer  upon  the  labourer  a  similar  right  to  enjoy 
the  fruits  of  his  labour.  The  right  so  to  enjoy  may 
be  called  literary  property. 

The  question  is  how  and  when  the  right  arises 
and  whether  the  character  of  the  right  is  such  as 
to  bring  it  within  the  denomination  of  property. 
The  original  ideas  that  spring  up  in  the  fertile  brain 
of  the  poet  or  the  philosopher  are  clearly  beyond 
the  reach  of  the  law  of  property.  Such  ideas  must 
be  bodied  forth  in  language  and  impressed  on  paper, 
marble,  metal  or  any  other  substance  so  as  to  assume 
physical  existence,  before  it  can  come  within  the 
reach  of  any  law.  "The  poet's  eye  in  fine  frenzy 
rolling"  may  "'glance  from  heaven  to  earth  and  from 
earth  to  heaven,"  but  until  his  imagination  bodies 
forth  the  forms  of  things  unknown,  such  things  do 
not  come  within  the  scope  and  cognisance  of  the 
practical  lawyer.  It  is  only  when  the  incorporeal 
ideas  of  the  author  have  assumed  corporeal  existence 
that  a  certain  right  called  s  copyright '  comes  into 


2OO 


Copyright  before 
publication  and 
Copyright  after 
publication. 


existence    which   is    exercisable   by    the    author    as 
against  the  whole  world. 

Copyright  in  fact  includes  two  rights  which  are 
entirely  distinct  in  their  origin,  nature  and  extent. 
The  frequent  application  of  the  term  to  these  two 
rights  indiscriminately  has  often  tehded  to  create  a 
good  deal  of  confusion.  One  of  them  has  been  called 
'copyright  before  publication.'  It  is  the  exclusive 
privilege  of  first  publishing  any  original  and  material 
product  of  intellectual  labour.  The  other  is  '  copyright 
after  publication'  by  which  is  meant  the  exclusive 
privilege  on  the  part  of  the  author  of  printing  or 
otherwise  multiplying  copies  of  any  intellectual  produc- 
tion after  it  has  once  been  published  to  the  world.1 
Both  these  rights  when  analysed  reveal  two  funda- 
mental factors.  The  one  is  positive  and  the  other  is 
negative,  viz.  first,  the  positive  right  in  the  author 
either  to  publish  his  intellectual  production  to  the 
world  (copyright  before  publication)  or  to  republish 
or  multiply  copies  thereof  after  first  publication 
(copyright  after  publication),  secondly,  the  negative 
right  to  exclude  any  one  else  from  doing  so.2  Are 
not  these  two  factors  the  essentials  of  property? 
Thus  these  two  rights  in  their  exercise  resemble  in  a 
stfiking  manner  the  right  of  property.8  And  yet 
there  is  no  doubt  that  literary  property  is  essentially 
different  from  property  in  substantial  and  corporeal 


'  This  distinction  has  no  significance,  so  far  as  legal  effect  goes,  since 
the  Act  of  1911  (i  &  2  Geo.  v.  C.  46,  the  bulk  of  which  is  incorporated  into 
the  Indian  Copyright  Act,  Act  III  of  1914,  as  the  First  Schedule  thereof) 
which  has  put  both  kinds  of  copyright  on  the  same  footing.  But  it  is 
useful  for  the  purpose  of  understanding  the  different  rights  which  emerge 
under  two  different  sets  of  circumstances. 

'2  Cf.  per  Yates  J.  in  Millar  v.  Taylor  4  Burr.  2356  : 

' '  The  value  with  respect  to  the  author  depends  upon  his  right  to  the 
sole  and  perpetual  publication  of  them ;  and  the  great  point  in  question  is 
'  whether  he  is  entitled  to  that  right  or  not.'  But  laying  this  observation 
aside,  mere  value  (all  may  see)  will  not  describe  the  property  in  this.  The 
air,  the  light,  the  sun  are  of  value  inestimable;  but  who  can  claim  a  prop- 
erty in  them  ?  Mere  value  does  not  constitute  property.  Property  must 
be  somewhat  exclusive  of  the  claim  of  another." 

?Cf.  Prof.  Maitland  who  while  discussing  the  right  of  the  Cestui  qui 
trusts  observes:  The  new  class  of  right  is  made  to  look  as  much  like  rights 
in  rem  (estates  in  land)  as  the  Chancellor  can  make  them  look —  Thus  we 
get  a  conversion  of  the  use  into  an  incorporeal  thing —  in  which  estates  and 
interests  exists — a  sort  of  immaterialised  piece  of  land.  This  is  a  perfectly 
legitimate  process  of  thing-making  and  one  that^is  always  going  on.  For  an 
old  rxample  you  may  take  the  advowson ;  new  examples  are  patent  right, 
and  copyright.  Good  will  is  now  in  the  very  process.  '  Equity  and  the 
forms  of  Action  at  Common  I,aw,  p.  31. 


2OI 

objects.  Suppose  some  one  chooses  to  take  away 
the  manuscript  of  a  book  which  I  have  kept  in  my 
drawer.  He  offends  against  my  undoubted  right  of 
property  thereto,  and  he  is  liable  to  an  action,  or 
prosecution,  as  the  case  may  be.  But  he  does  not 
encroach  upon  my  literary  property  in  respect  of 
the  book  unless  and  until  he  publishes  to  the  world 
the  sentiments  contained  therein  and  substantially  in 
the  language  in  which  they  have  been  embodied  by 
me.  This  difference  has  led  some  to  apply  the  term 
property  to  the  former  class  of  rights  and  deny  it  to 
the  latter.  You  will  observe  that  that  is  rather  a 
narrow  view  of  property.  But  whether  copyright 
can  properly  come  under  the  denomination  of  pro- 
perty or  whether  it  must  remain  sui  generis,  whether 
it  is  capable  of  being  labelled  as  a  property  right  or 
not,  it  is  clear  that  an  author's  copyright  is  a  right 
sufficiently  definite,  sufficiently  well-grounded  in  sound 
reason  and  general  utility  to  society  and,  therefore,  fit 
to  be  upheld  by  law.  Listen  to  what  Blackstone 
says  of  this  right,  "  When  a  man  by  the  exertion  of 
his  rational  powers  has  produced  an  original  work,  he 
seems  to  have  clearly  a  right  to  dispose  of  that  identi- 
cal work  as  he  pleases,  and  any  attempt  to  vary  the 
disposition  he  has  made  of  it  appears  to  be  an  invasion 
of  that  right.  Now  the  identity  of  a  literary  composi- 
tion consists  entirely  in  the  sentiment  and  the  language  ; 
the  same  conceptions  clothed  in  the  same  words,  must 
necessarily  be  the  same  composition;  and  whatever 
method  be  taken  of  exhibiting  that  composition  to  the 
ear  or  the  eye  of  another,  by  recital,  by  writing,  or  by 
printing,  in  any  number  of  copies,  or  at  any  period  of 
time,  it  is  always  the  identical  work  of  the  author 
which  is  exhibited;  and  no  other  man  (it  hath  been 
thought)  can  have  a  right  to  exhibit  it  especially  for 
profit,  without  the  author's  consent."1 

I  have  already  said  that  no  such  property  can  be  Illcorporeal  ideas 
said  to  exist   in   incorporeal  ideas  until  they  are  em-  must  assume 
bodied.     This   proposition   was  definitely  laid   down  SgSte££to 
in  the    case  of  Abernethy  v.   Htitchinson.1     Mr.  Aber- property  can  come 


into  existence. 


1  Blackstone  Vol.   II,  pp.  406-7. 

2  I.  H.  &  Tw.  28  at  p.  39;  (1825)  3,  L.J.  Ch.  209;  47  Bug.  Rep.  1313  at 
p.  1317866  aLso  Morrison  v    Moat  9  Hare  257;  s.c.  68  Eng.   Rep.  499  and 
Caird  v.  Sime  L.R.  12  A.C.  326  where  it  is  referred  to  and  discussed. 

26 


202 


The  same  principle 
applies  to  musical 
and  artistic 
production . 


As  to  literary 
productions. 


nethy,  an  eminent  surgeon  filed  a  bill  in  Equity  to 
restrain  the  publication  of  certain  lectures  delivered 
orally  by  him  to  medical  students  at  St.  Bartholomew's 
Hospital.  He  was  unable  to  swear  that  the  whole 
lecture  had  been  reduced  to  writing  at  the  date  of  its 
delivery.  Lord  Eldon  in  discussing  the  propriety  of 
granting  an  injunction  on  the  ground  of  copyright, 
observed,  "where  the  lecture  is  orally  delivered,  it 
is  difficult  to  say  that  an  injunction  can  be  granted 
upon  the  same  principle  upon  which  literary  compo- 
sition is  protected,  because  the  court  must  be  satis- 
fied that  the  publication  complained  of  is  an  invasion 
of  the  work  and  this  can  only  be  done  by  comparing 
the  composition  with  the  piracy."  In  other  words, 
the  incorporeal  ideas  of  the  lecturer  had  not  assumed 
corporeal  existence  before  the  lecture  was  delivered, 
and,  therefore,  no  invasion  of  literary  property  could 
be  proved.  It  must,  however,  be  noted  that  an  in- 
junction was  granted  on  a  second  argument  and  on 
the  ground  of  breach  of  an  implied  contract  between 
the  lecturer  and  his  pupils,  viz.  that  the  latter  are  not 
to  carry  into  print  the  lecture  notes  taken  by  them 
either  for  their  own  profit  or  for  the  profit  of  others. 

What  applies  to  literary  and  dramatic  productions 
applies  with  equal  force  to  musical  and  artistic 
productions.  The  beauteous  figures  that  the  creative 
fancy  of  a  Raphael,  a  Titian  or  a  Michael  Angelo  offers 
to  the  world  do  indeed  exist  in  idea  long  before  they 
are  thrown  on  canvas  or  carved  on  marble.  They 
exist  in  their  fancy  in  all  the  vividness  of  reality. 
But  they  are  beyond  the  reach  of  the  law  of  copyright 
until  they  find  objective  manifestation  and  are  vested 
with  corporeal  existence.  So  with  the  immortal 
compositions  of  Beethoven  or  of  Handel.  They  were 
there  even  before  they  were  sung  or  played  or  could 
be  published  to  the  wondering  world  as  'Music.'  It  is 
only  when  some  sort  of  material — be  it  paper,  canvas, 
wax  or  marble — has  embodied  the  ideas  of  the  artist 
that,  indirectly  through  that  material,  the  ideas  can 
come  within  the  operation  of  copyright  law. 

Now  suppose  the  author  has  already  embodied 
his  ideas  in  writing  but  has  not  as  yet  committed  it  to 
the  public  or  has  committed  it  only  to  a  restricted 
circle  of  his  friends  and  admirers,  or  say,  to  his  pupils 


203 

or  disciples.  Here  arises  what  I  have  described 
above  as  copy right-bef ore-publication.  The  author 
has  the  exclusive  right  to  the  first  publication  of  his 
manuscript.  "Ideas,"  says  Mr.  Justice  Yates  in  the 
famous  case  of  Millar  v.  Taylor,*  "  are  free.  But  while 
the  author  confines  them  to  his  study  they  are  like 
birds  in  a  cage,  which  none  but  he  can  have  a  right  to 
let  fly ;  for  till  he  thinks  proper  to  emancipate  them 
they  are  under  his  own  dominion.  It  is  certain  every 
man  has  a  right  to  keep  his  own  sentiments,  if  he 
pleases  ;  he  has  certainly  a  right  to  judge  whether  he 
will  make  them  public,  or  commit  them  only  to  the 
sight  of  his  friends.  In  that  state  the  manuscript  is,  in 
every  sense,  his  peculiar  property,  and  no  man  can 
take  it  from  him  or  make  any  use  of  it  which  he  has 
not  authorised  without  being  guilty  of  a  violation  of 
his  property.  And  as  every  author  or  proprietor  of  a 
manuscript  has  a  right  to  determine  whether  he  will 
publish  it  or  not,  he  has  a  right  to  the  first,  publication  ; 
and  whoever  deprives  him  of  that  priority  is  guilty 
of  a  manifest  wrong,  and  the  court  have  a  right  to 
stop  it."* 

Early  decisions  on  the  law  as  to  copyright-before-  Eariy  decisions  on 
publication  3  are  few  and  far  between.  Besides,  in 
many  of  the  reported  cases  there  is  to  be  found  an 
element  of  fraud  or  breach  of  contract  which  obvi- 
ously is  not  essential  to  the  violation  of  the  right  now 
under  discussion.  The  earliest  case  appears  to  be  one 
of  1732 — the  case  of  Webb  v.  Rose.*  In  that  case  a  con- 
veyancer's clerk  threatened  to  publish  as  legal  prece- 


1   (J76())  4  Burr  2378  s.c.  98  Eng.  Rep.  201  at  p.  242. 

*  So  Aston.  J.    in  the    same     case     observes:  "The    present  claim  is 
founded  on  the  original  right  to  this  work,  as  being  the  mental  labour  of 
the  author ;  and  that  the  effect  and  produce  of  the  labour  is  his.     It  is  a 
personal  incorporeal  property,  saleable  and  profitable;  it  has  indicia  certa  : 
for,  though  the  sentiments  and  doctrines  may  be  called  ideal,  yet  when  the 
same  are  communicated  to  the  sight  and  understanding  of  every  man  by 
the   medium    of   printing,  the    work  becomes  a   distinguishable  subject  of 
property  and  not  totally  destitute  of  corporeal  qualities"  4  Burr,  p.  2341. 

3  Formerly,  the  distinction  between  copyright-before-publication  and 
copyright-after-publication  was  a  necessary  one  inasmuch  as  the  one  was 
governed  by  the  common  law  and  the  other  by  statute.  Cases  under  the  two 
heads  used  accordingly  to  be  treated  separately.  At  present,  the  distinc- 
tion has  no  legal  significance,  because  both  are  governed  by  statute.  For 
the  sake  of  convenience,  the  cases  relating  to  copyright-before-publication 
have  been  separately  grouped  together  in  this  chapter,  for  although  there  is 
no  distinction  in  the  eye  of  law,  there  is  a  difference  between  the  two  and 
it  is  conducive  to  clearness  of  thought  to  recognise  the  difference, 

*  Cited  4  Burr.  2330. 


204 

dent  his  master's  conveyancing  drafts,  without  having 
previously  obtained  his  master's  permission  for  such 
publication.  A  suit  was  brought  by  the  son  and 
devisee  of  Mr.  Webb  and  an  injunction  was  granted 
by  Sir  Joseph  Jekyll,  M.R.  restraining  the  defendant 
from  publishing  the  drafts.  In  1741,  a  similar  in- 
junction was  granted  in  the  case  of  Forrester  v. 
Walker  l  against  printing  the  plaintiff's  notes  of  cases 
"gotten  surreptitiously/'  without  his  consent.  An- 
other interesting  case  is  mentioned  by  Sir  S.  Romilly.2 
Dr.  Paley  the  famous  divine  and  theologian  had  left 
certain  manuscripts  to  be  available  for  use  to  his 
parishioners  only.  A  bookseller  managed  to  get  pos- 
session of  them  and  threatened  to  publish  them. 
He  was,  however,  restrained  by  injunction  from  pub- 
lishing. In  the  case  of  Macklin  v.  Richardson*  the 
subject  of  the  copyright  claimed  was  Macklin's  cele- 
brated farce  called  "Love  a  la  mode."  The  play 
had  been  publicly  acted  by  permission  of  the  plain- 
tiff. The  defendant  employed  a  shorthand  writer 
who  took  down  the  words  as  the  players  uttered 
them  in  the  course  of  the  performance.  Thereafter, 
the  defendant  corrected  the  shorthand  notes  from 
memory,  published  the  first  Act  in  a  magazine  and 
threatened  to  publish  the  second  Act  in  the  next 
number  of  the  same  magazine.  The  plaintiff  prayed 
for  an  injunction.  It  appeared  that  there  was  a 
printed  or  written  copy  of  the  work.  But  it  had  not 
been  published  by  the  author  to  the  world  at  large ; 
it  had  only  been  lent  by  the  author  to  the  prompter 
during  and  for  the  purpose  of  each  performance. 
It  was  contended  by  the  defendant  that  the  represent- 
ation of  the  farce  on  the  stage  was  a  publication 
by  the  author  so  that  he  was  thereby  stopped  from 
objecting  to  its  being  dealt  with  in  a  different  manner 
viz.  by  printing  and  selling  it.  The  argument,  in  other 
words,  was  that  once  you  published  the  play  in  one 
form,  it  had  become  public  property,  and  you  could 
not  object  to  its  being  dealt  with  by  any.  member  of 
the  public  in  some  other  form.  The  Court,  however, 
negatived  the  plea  and  granted  an  injunction,  Lord 


'  ibid. 

*  See  2  V.  and  B.  23  ;  s.c.  35  E)ng.  Rep.  227. 
y  Ambl.  694;  27  Eng.  Rep.  451. 


2O5 

Commissioner  Smythe  observing  (tlt  has  been  argued 
to  be  a  publication  by  being  acted,  and,  therefore,  the 
printing  is  no  injury  to  the  plaintiff;  but  that  is  a 
mistake,  for  besides  the  advantage  from  the  perform- 
ance, the  author  has  no  other  means  of  profit,  from 
the  printing  and  publishing,  and  there  is  as  much 
reason  that  he  should  be  protected  in  that  right  as 
any  other  author.1 

The  leading  case  on  the  subject  of  copyright-  P.  Albert  v. 
bef ore-publication  is  that  of  Prince  Albert  v.  Strange  fn 
and  others?  The  facts  of  that  case  briefly  stated  are 
these  :  Her  Majesty  Queen  Victoria  and  His  Royal 
Highness  Prince  Albert  had  occasionally,  for  their 
amusement,  made  drawings  and  etchings,  being  princi- 
pally on  subjects  of  private  and  domestic  interest  to 
themselves.  Amongst  the  etchings  were  private  port- 
raits of  the  plaintiff,  the  Prince  of  Wales,  the  Prin- 
cess Royal  and  other  members  of  the  Royal  family 
and  personal  friends  of  Her  Majesty,  portraits  of 
favourite  dogs  of  the  Royal  family,  taken  from  life, 
etc. ;  there  were  also  etchings  from  old  and  rare 
engravings  in  the  possession  of  the  Queen.  Of  these 
etchings  they  had  made  impressions  for  their  own 
use,  and  not  for  publication.  Such  impressions  had 
been  partly  made,  for  greater  privacy,  by  means  of 
a  private  press  kept^  for  that  purpose,  and  partly 
by  employing  a  printer  in  the  country.  The  plates, 
however,  were  kept  in  the  exclusive  custody  of  the 
Queen  or  her  Consort,  except  while  temporarily  with 
the  printer  above  mentioned.  Copies  of  the  impres- 
sions were  placed  in  several  of  the  private  apart- 
ments of  the  Queen  at  Windsor  and  in  such  apart- 
ments only,  and  a  few  had  occasionally,  but  not 
frequently,  been  given  to  some  of  the  personal  friends 
of  the  Queen  and  the  Prince.  It  so  happened  that 
some  of  the  impressions  had  been  surreptitiously 
retained  by  one  of  the  pressmen  employed  and  from 

1  See  also  the  case  of  Morris  v.  Kellv   (1820).   i    Jac.  &  W.  481   (s,c.  37 
Eng.  Rep,  451)  where  Lord  Eldon,  C.  granted  an  injunction  against  the  per- 
formance of  O'keeie's  Comedy  of  the  "  Young  Quaker"  at  the  English  Opera 
for  the  benefit  of  Maria  Kelly.     It  seems,  however,  that  the  manuscript  of 
the  "  Young  Quaker"  had  already  been  published. 

2  Prince  Albert  v.  Strange  and  others  :  Attorney  General  v   Strange  and 
others  (1848)  2  De.  Gex.   &   Sm.  p.    652;  S.C.    64  Eng.  Rep.  293,  on   appeal 
I.H.  &  Tw.  i,  S  C.  47  Eng.  Rep.  1302  ;  M.  &  Gor.  25  ;  S.C.  41  Eng.  Rep.  1171 . 


206 


him  through  one  Mr.  Judge,  they  had  passed  into 
the  possession  of  the  defendant,  a  London  publisher. 
The  defendant  declared  his  intention  of  publicly  ex- 
hibiting the  impressions  so  obtained  and  also  of  sell- 
ing to  the  public  a  descriptive  catalogue  of  the  litho- 
graphs. A  bill  was  thereupon  filed  in  the  Court  of 
Chancery  by  the  Prince  praying  for  delivery  up  to  the 
plaintiff  of  the  impressions  surreptitiously  taken,  an 
injunction  against  any  exhibition,  engraving,  copying, 
publication  or  any  other  dealing  with  the  same,  or 
any  sale  or  publication  of  the  catalogue,  also  for  deli- 
very up  to  the  Prince  of  all  copies  of  the  catalogue 
then  in  the  defendant's  possession.  Sir  J.  L.  K.  Bruce, 
V.C.,  granted  an  interim  injunction  in  terms  of  the 
plaintiff's  prayer  ;  and  the  injunction  was  subsequently 
extended  to  Judge.  The  defendant  moved  to  dissolve 
the  injunction  in  so  far  as  it  restrained  the  publica- 
tion of  the  descriptive  catalogue.  It  was  contended 
on  his  behalf  that  his  conduct  at  most  amounted  to 
a  breach  of  manners,  but  did  not  amount  to  the  in- 
fringement of  a  right  cognisable  by  law.  The  Vice- 
Chancellor  held  that  the  act  of  the  defendant  Strange 
amounted  to  an  unlawful  interference  with  another's 
property  and  that  the  means  of  composing  and  form- 
ing the  catalogue  had  been  l(  obtained  unduly,  i.e. 
without  the  consent  of  the  plaintiff,  without  that  of 
his  Consort  and  without  any  right,  moral,  equitable, 
or  legal."1  He  accordingly  refused  the  motion.  On 
appeal,  his  judgment  was  affirmed  by  Lord  Cotten- 
ham,  C.,  who  characterised  the  act  of  the  defendant 
Strange  as  an  interference  with  the  Prince's  property. 
He,  however,  added  that  the  case  did  not  depend 
solely  upon  property,  because  according  to  the  evi- 
dence before  him  the  possession  of  the  defendant 
Strange  must  have  originated  in  a  breach  of  confi- 
dence. 

The  question  as  to  the  improper  manner  in  which 
the  impressions  were  extracted  no  doubt  formed  an 
important  feature  of  the  case.  But  apart  from  such 
impropriety  amounting  to  breach  of  trust,  which 
entitles  the  injured  party  to  appropriate  reliefs,  the 
case  of  Prince  Albert  v.  Strange  furnishes  a  clear 

i  Ibid,  at  p.  697. 


2O7      • 

judicial  exposition  of  the  fundamental  principles  of 
the  law  of  copyright,  viewed  as  literary  property ; 
and  from  this  point  of  view  the  importance  of  the 
case  cannot  be  over-estimated,  I,  therefore,  make  no 
apology  in  giving  a  long  extract  from  the  judgment 
of  the  Vice-Chancellor ;  in  which  he  states  his  view  of 
the  origin,  nature  and  scope  of  the  right  in  ques- 
tion : — 

cc  Upon  the  principle,  therefore,  of  protecting  prop-  Bruce,  v.c.,on 
crty  it  is  that  the  Common  Law,  in  cases  not  aided  nor 
prejudiced  by  statute,  shelters  the  privacy  and  seclu- 
sion of  thoughts  and  sentiments  committed  to  writing, 
and  desired  by  the  author  to  remain  not  generally 
known.  This  has  been  in  effect  often  judicially  de- 
clared, nor  by  any  judge  more  distinctly  than  by  Lord 
Eldon  upon  several  occasions.  In  particular  in  Mr. 
Southey's  case,1  he  said,  'it  is  to  prevent  the  use  of 
that  which  is  the  exclusive  property  of  another,  that 
an  injunction  is  granted '  and,  again,  '  I  have  exam- 
ined the  cases  that  I  have  been  able  to  meet  with 
containing  precedents  for  injunctions  of  this  nature, 
and  I  find  that  they  all  proceed  upon  the  ground  of  a 
title  to  the  property  in  the  plaintiff. '  Such  then  being, 
as  I  believe,  the  nature  and  foundation  of  the  Common 
Law  as  to  manuscripts,  independently  of  Parliament- 
ary additions  and  subtractions,  its  operation  cannot 
of  necessity  be  confined  to  literary  subjects.  That 
would  be  to  limit  the  rule  by  its  example.  Where- 
ever  the  produce  of  labour  is  liable  to  invasion  in  an 
analogous  manner,  there  must,  I  suppose,  be  a  title 
to  analogous  protection  or  redress.  To  consider  then 
the  case  of  mechanical  works,  or  works  of  art  executed 
by  a  man  for  his  private  amusement  or  private  use  ; 
whatever  protection  these,  or  some  of  these,  may  have 
by  Act  of  Parliament,  they  are  not,  I  apprehend, 
deserted  by  the  Common  Law.  The  principles  and 
rules  which  it  applies  to  literary  compositions  in 
manuscript  must,  I  conceive,  be  to  a  considerable 
extent  at  least,  applicable  to  these  also.  Mr.  Justice 
Yates  in  Millar  v.  Taylor'2  said  that  an  author's  case 
was  exactly  similar  to  that  of  an  inventor  of  a  new 


1   South  ey  v.  Sheru-ood  2  Merivale  435  ;  S.C.  35  Eng.  Rep.  1006. 
*  4  Burr.  2303  S.C.  98  Eng.  Rep.  201. 


.       208 

mechanical  machine;  that  both  original  inventions 
stood  upon  the  same  footing  in  point  of  property, 
whether  the  case  were  mechanical,  or  literary,  whether 
an  epic  poern  or  an  orrery  ;  that  the  immorality  of 
pirating  another  man's  invention  was  as  great  as  that 
of  purloining  his  ideas.1  Property  in  mechanical 
works  or  works  of  art  executed  by  a  man  for  his  own 
amusement,  instruction,  or  use,  is  allowed  to  subsist 
certainly,  and  may  before  publication  by  him  be 
invaded,  not  merely  by  copying,  but  by  description 
or  by  catalogue,  as  it  appears  to  me.  A  catalogue  of 
such  works  may  in  itself  be  valuable.  It  may  also  as 
effectually  show7  the  bent  and  turn  of  the  mind,  the 
feelings  and  taste  of  the  artist,  especially  if  not  pro- 
fessional, as  a  list  of  his  papers.  The  portfolio  or  the 
studio  may  declare  as  much  as  the  writing-table .... 
Addressing  the  attention  specifically  to  the  particular 
instance  before  the  Court,  we  cannot  but  see  that  etch- 
ings executed  by  the  plaintiff  and  his  consort  for  their 
private  use,  the  produce  of  their  labour,  and  belong- 
ing to  themselves,  they  were  entitled  to  retain  in  a 
state  of  privacy,  to  withhold  from  publication.  That 
right,  I  think  it  equally  clear,  was  not  lost  by  the 
limited  communications  which  they  appear  to  have 
made,  nor  confined  to  prohibiting  the  taking  of  im- 
pressions without  or  beyond  their  consent  from  the 
plates,  their  undoubted  property.  It  extended  also,  I 
conceive,  to  the  prevention  of  persons  unduly  obtaining 
a  knowledge  of  the  subjects  of  the  plates,  from  pub- 
lishing (at  least  by  printing  or  writing)  though  not  by 
copy  or  resemblance,  a  description  of  them  whether 


I  It  is  to  be  noted,  however,  that  in  the  same  case  (at  p.  2348)  Aston  J. 
expressed  quite  a  different  opinion  on  the  relation  between  literary  work 
and  mechanical  production:  "that  the  comparison  betwixt  a  literary  work 
and  a  mechanical  production,  and  that  the  right  to  publish  the  one  is  as  free 
and  fair  as  to  imitate  the  other,  carries  no  conviction  of  the  truth  of  that 
position  to  my  judgment.  They  appear  to  me  very  different  in  their 
nature.  And  the  difference  consists  in  this  that  the  property  of  the  maker 
of  a  mechanical  engine  is  confined  to  that  individual  thing  which  he  has 
made,  that  the  machine  made  in  imitation  or  resemblance  of  it,  is  a  different 
work  in  substance,  materials,  labour  and  expense  in  which  the  maker  of  the 
original  machine  cannot  claim  any  property ;  for  it  is  not  his,  but  only  a 
resemblance  of  his ;  whereas  the  reprinted  book  is  the  very  same  substance  ; 
because  its  doctrine  and  sentiments  are  its  essential  and  substantial  part  and 
the  printing  of  it  is  a  mere  mechanical  act  and  the  method  only  of  publishing 

and  promulgating  the  contents  of  the  book The  imitated  machine  is 

a  new  and  different  work  ;  the  literary  composition  printed  on  another  man's 
paper,  is  still  the  same." 


209 

more  or  less  limited  or  summary,  whether  in  the  form 
of  a  catalogue  or  otherwise.  But  I  am  satisfied,  I 
repeat,  that  the  means  of  composing  and  forming  the 
catalogue  in  question  must,  upon  the  materials  now 
before  the  Court,  be  taken  to  have  been  obtained 
unduly,  that  is,  without  the  consent  of  the  plaintiff, 
without  that  of  his  consort,  and  without  any  right, 
moral,  equitable  or  legal.  Can  I  then  deny  it  to  be 
an  interference  with  another's  property  ?  I  think  not. 
The  defendant  appears  to  me  to  have  been  seeking  to 
make  use  for  his  own  purposes  of  what  does  not 

belong  to   him I   think,    therefore   not   only 

that  the  defendant  here  is  unlawfully  invading  the 
plaintiff's  right,  but  also,  that  the  invasion  is  of  such 
a  kind,  and  affects  such  property,  as  to  entitle  the 
plaintiff  to  the  preventive  remedy  of  an  injunction."1 

Copyright  (relating  to  books)  was  first  made  s  Anne  c. 
the  subject  of  statute  by  8  Anne  C.  19  styled  An 
Act  for  the  Encouragement  of  Learning  whereby  it 
was,  among  other  things,  enacted  that  "  from  and  after 
the  tenth  day  of  April  one  thousand  seven  hundred 
arid  ten  the  author  of  any  book  or  books  already  printed 
or  the  book-seller  or  book- sellers,  printer  or  printers 
other  person  or  persons  who  hath  or  have  pur- 
chased or  acquired  the  copy  or  copies  of  any  book  or 
books  in  order  to  print  or  reprint  the  same  shall  have 
sole  right  and  liberty  of  printing  such  book  and  books 
for  the  term  of  one  and  twenty  years;  and  that  the 
author  of  any  book  or  books  already  composed  and  not 
printed  and  published,  or  that  shall  hereafter  be  com- 
posed, and  his  assignee  or  assigns,  shall  have  the  sole 
liberty  of  printing  and  reprinting  such  book  and  books 
for  the  term  of  fourteen  years.  Any  one  infringing  this 
right  without  the  consent  of  the  proprietor  or  proprie- 
tors thereof,  first  had  and  obtained  in  writing  signed  in 
the  presence  of  two  or  more  credible  witnesses ;  and  any 
one  selling,  publishing  or  exposing  to  sale  or  causing  to 
be  sold,  published,  or  exposed  to  sale  any  such  book  or 
books  without  such  consent  had  or  obtained  shall  forfeit 
such  book  or  books  and  all  or  every  sheet  or  sheets, 
being  part  of  such  book  or  books,  to  the  proprietor  or 
proprietors  thereof  who  shall  forthwith  damask  and 

1  See  2  De  Gex  &  Sm.  695  et  seq. 
27 


2IO 

make  waste-paper  of  them ;  and,  further,  every  such 
offender  or  offenders  shall  forfeit  one  penny  for  every 
sheet  which  shall  be  found  in  his  or  their  custody ;  the 
one  moiety  thereof  to  the  Queen's  Most  Excellent 
Majesty,  her  heirs  and  successors  and  the  other  moiety 
thereof  to  any  person  or  persons  that  shall  sue  for  the 


same." 


is  copyright  a  nat-          j£  was  f or  some  time  a  matter  of  keen  controversy 

ural  right  or  a  crea-  1,1  •    -,  t  11 

ture  of  statute  ?  as  to  whether  copyright  was  to  be  regarded  as  a  natural 
right  dependent  upon  the  common  law  of  the  realm  or 
a  creature  of  statute.  In  the  former  case,  the  term  of 
copyright  might  be  perpetual,  whereas  in  the  latter 
alternative  its  incidents,  such  as  term  of  enjoyment 
and  the  like,  would  be  determined  by  the  specific  provi- 
.  Taylor.  sions  of  the  statute.  Thus  in  Millar  v.  Taylor  we  find 
the  following  observation  from  Willes  J.  "  Suppose  a 
man  with  or  without  leave  to  peruse  a  manuscript  work, 
transcribes  and  publishes  it,  is  not  within  the  Act  of 
Queen  Anne ;  it  is  not  larceny  ;  it  is  not  trespass ;  it  is 
not  a  crime  indictable  (the  physical  property  of  the  au- 
thor, the  original  manuscript,  remains) ;  but  it  is  a  gross 
violation  of  a  valuable  right.  Suppose  the  original,  or 
a  transcript,  was  given  or  lent  to  a  man  to  read  for  his 
own  use,  and  he  publishes  it;  it  would  be  a  violation 
of  the  author's  common  law  right  to  the  copy.  This 
never  was  doubted  and  has  often  been  determined".  l 
Again,  Aston  J.  puts  the  problem  thus  "  the  great  ques- 
tion in  this  cause  is  a  general  one  'How  the  common 
law  stands  independent  of  the  statute  of  8  Anne  in  res- 
pect of  an  author's  sole  right  to  the  copy  of  his  literary 
productions."  2  The  solution  is  offered  by  him  in  the 
following  terms  :  "  It  is  settled  and  admitted  and  is  not 
now  controverted  but  that  literary  compositions  in  their 
original  state  and  the  incorporeal  right  of  the  publica- 
tion of  them  are  the  private  and  exclusive  property  of 
the  author  and  that  thay  may  ever  be  retained  so ;  and 
that  if  they  are  ravished  from  him  before  publication, 
trover  or  trespass  lies."  ....  "Upon  the  whole,  I 
think  an  author's  property  in  his  works,  and  the  copy- 
right is  fully  and  sufficiently  established,  because  it  is 
admitted  to  be  property  in  his  own  hands,  and  that  he 


1  (1769)  4  Burr.  2303,  at  p.  2330.  s.c.  98  ^ng.  Rep.  201  at  p.  216. 
*  (1769  Ibid  at  p.  233S- 
3  (1769)  4  Burr.  p.  2340. 


211 

has  the  original  right  of  first  publishing  them."  l  Such 
being  the  judicial  view  with  regard  to  what  we  have 
called  copyright-bef  ore-publication  the  question  natur- 
ally arose  whether  publication  destroyed  the  property 
which  admittedly  was  in  the  author  prior  to  publication. 
If  so,  the  position  would  be  most  contradictory.  With- 
out publication  it  is  obviously  impossible  for  the  author 
to  render  his  '  property '  useful  to  mankind  or  profitable 
to  himself,  and  yet  the  moment  the  work  is  published 
the  property  is  extinguished.  In  the  case  of  Millar  v. 
Taylor  the  subject  was  argued  at  great  length  and  ulti- 
mately Willes  and  Aston  JJ.  came  to  differ  from  Yates 
J.  on  this  most  important  question.  '  I  am  of  opinion 
says  Aston  J.,  that  the  publication  of  a  composition 
does  not  give  away  the  property  in  the  work  ;  but  the 
right  of  the  copy  still  remains  in  the  author;  and  that 
no  more  passes  to  the  public  from  the  free  will  and 
consent  of  the  author  than  an  unlimited  use  of  every 
advantage  that  the  purchaser  can  reap  from  the  doctrine 
and  sentiments  which  the  work  contains.  He  may 
improve  upon  it,  imitate  it,  translate  it,  oppose  its  senti- 
ments, but  he  buys  no  right  to  publish  the  identical 
work."  Mr.  Justice  Yates,  however,  comes  to  an  en- 
tirely different  conclusion.  "  The  act  of  publication  ", 
says  he,  ''when  voluntarily  done  by  the  author  himself 
is,  virtually  and  necessarily,  a  gift  to  the  public."3 
( Therefore,  it  appears  to  me  that  this  claim  of  a  perpe- 
tual monopoly  is  by  no  means  warranted  by  the  gene- 
ral principles  of  property ;  and  from  thence  I  should 
have  thought  that  it  could  not  be  a  part  of  the  common 
law  of  England."  * 

After  8  Anne,  C.  19,  the  next  statute  that  may  be 
mentioned  dealing  with  the  subject  of  copyright  is  41 
Geo.  Ill  C.  107.  This  provides  that  authors  of  books  4i  Geo.  inc.  107. 
already  composed  and  not  printed  or  published  and  of 
books  to  be  composed  after  the  passing  of  the  Act  and 
their  assigns,  shall  have  the  sole  right  of  printing  them 
for  fourteen  years ;  booksellers  etc.,  in  any  part  of  the 
United  Kingdom  or  British  European  Dominions  who 
shall  print,  reprint  or  import  any  such  book  without 
consent  of  the  proprietor  shall  be  liable  to  an  action 


i  (1769)  4  Burr.  p.  2346.  *  Ibid,  at  p.  2348. 

3  Ibid,  at  p.  2363.  *  Ibid,  at  p.  2367. 


212 

for  damages,  and  shall  also  forfeit  the  books  to  the 
proprietor,  and  3^.  per  sheet,  half  to  the  King  and  half 
to  the  informer. 

It  also  provides  that  after  the  expiration  of  the 
said  term  of  fourteen  years,  authors,  if  living,  shall 
have  a  second  term  of  fourteen  years.  The  rest  of  the 
Act  concerns  itself  with  matters  of  procedure,  such 
as  entering  books  at  Stationers'  Hall,  etc.  Then  comes 
54  Geo.  Ill,  C.  156,  which  besides  making  certain 
provisions  as  to  procedure,  etc.,  enacted  that  instead 
of  copyright  for  fourteen  years  and  continuously  for 
fourteen  more,  authors  and  their  assigns  shall  have 
twenty-eight  years  copyright  in  their  works  and  the 
residue  of  their  life.  All  the  above  Acts  were  repealed 
by  the  Copyright  Act  of  1842  (5  &  6  Viet.  C.  45) 
commonly  known  as  Talfourd's  Act.  This  act  ex- 
tended the  period  of  copyright  to  the  life  of  the  author 
and  seven  years  after  his  death,  or  a  term  of  forty-two 
years,  which  ever  should  be  the  longer.  The  Act  was 
admittedly  defective.  In  draftsmanship  it  was  obs- 
cure and  ill-arranged.  In  substance  too,  it  was  in- 
complete, in  as  much  as  it  did  not  touch  cases  which 
ought  to  come  within  the  scope  of  copyright  law. 
These  cases  had  to  be  met  by  a  process  of  tinkering  of 
the  law  by  means  of  separate  or  supplementary  statutes 

f  &  ^Geo1'  c  6  which  thus  went  on  multiplying  according  as  exigencies 
'  arose  from  time  to  time  till  in  the  year  1911  was  passed 
an  act  to  amend  and  consolidate  the  law  relating  to 
copyright.  The  object  of  the  Act  was  to  repeal  some 
twenty  different  statutes  extending  back  to  1734, 
and  thus  bring  the  whole  of  the  copyright  law 
within  one  statute.  But  that  was  not  all.  The  act 
was  intended  to  form  an  Imperial  Code,  so  as  to  be 
capable  of  being  extended  as  far  as  practicable  to 
all  the  British  Dominions.  As  regards  the  self- 
governing  Dominions  they  could  either  adopt  the  Act 
in  its  entirety,  or  adopt  it  in  substantially  identical 
terms  with  such  modifications  or  additions  relating 
to  procedure  and  remedies  as  might  be  necessary 
to  adapt  it  to  local  requirements.  If  this  object  could 
be  attained,  the  law  of  the  Empire  would  be  brought 
into  line  with  the  recommendations  of  the  Berlin  Con- 

1!h®I?d.ian  convention  of   iqo8.     The  Indian  Copyright  Act  of  1914 

right  Act,  1914  (III  ,  A  .  ,1       i          •     T     j-         ±  i.t. 

of  1914)  (Act  III  of  1914)  which  governs  the  law  in  India  at  the 


213 

present  moment  adopts  the  above  Act  of  1911,  with 
such  modifications  and  slight  additions  as  may  be 
necessary  to  suit  local  conditions.  The  Indian  Act 
contains  fifteen  sections,  mainly  dealing  with  proce- 
dure, but  introducing  some  variations  as  to  substan- 
tive law  as  well ;  and  the  whole  of  the  English  Copy- 
right Act  of  1911  is  appended  thereto  in  the  form  of 
a  Schedule.  The  main  features  l  of  the  Act  (includ- 
ing Schedule  I  above-mentioned)  may  be  thus  indi- 
cated :— 

First,  it  establishes  uniformity  in  copyright  law  ap- 
plicable to  different  classes  of  productions  such  as  lite- 
rary, dramatic,  musical,  and  artistic  works.  Hitherto 
these  were  governed  by  different  statutes  and  the  provi- 
sions of  the  statutes  were  far  from  uniform.  Secondly, 
it  introduces  simplicity  in  matters  of  procedure  by 
dispensing  with  the  formality  of  registration.  It  also 
does  away  with  the  exception  that  the  Crown  for  pur- 
poses of  international  copyright  may  impose  certain 
formalities.  The  remedies  for  infringement  are  also 
simplified  and  extended.  Thirdly,  the  Act  confers 
copyright  on  unpublished  as  well  as  published  works 
(Sec.  31,  Sch.  I).  Thus  the  vexed  question  as  to 
whether  copyright-before-publication  rests  on  com- 
mon law  or  statute  is  finally  set  at  rest.  Copyright 
at  common  law  is  abolished  and  all  copyright  law  is 
based  on  the  statute.  Fourthly,  there  are  new  sub- 
jects which  the  Act  for  the  first  time  brings  within 
the  reach  of  copyright  law — such  as  architecture, 
works  of  artistic  craftsmanship,  pieces  for  recitation 
and  choreographic  works.  Nor  is  this  all.  Cinemat- 
ograph productions,  records,  perforated  rolls  and 
other  mechanical  contrivances  for  the  production  of 
sound  find  an  honourable  place  in  the  Act  quite  com- 
patible with  their  importance  and  usefulness  in  present 
day  life  (Sees,  i  and  19,  Sch.  I).  Other  important  addi- 
tions to  the  subject-matter  of  copyright  law  are  trans- 
lations, lectures,  adaptations,  dramatic  records,  drama- 
tised novels  and  novelised  dramas.  Fifthly,  it  lays  down 
an  uniform  term  for  the  various  kinds  of  copyright, 
namely,  the  life  of  the  author  and  fifty  years  thereafter, 


i   These  characteristics  are  obviously  deri  ved  f rom  the  English  Copyright 
Act,  the  Copyright  Act  of  1911  (i  &  2  Geo.  V.  c.  46). 


2I4 

with  a  provision  for  reproduction  (Sec.  3,  Sch.  I)  after 
a  period  of  twenty  years  (or,  in  the  case  of  a  work  in 
which  copyright  subsists  at  the  passing  of  the  Act, 
thirty  years)  upon  payment  of  certain  royalties  to  the 
owner  of  the  copyright.  In  case  of  unpublished  wrorks 
the  term  of  copyright  runs  from  the  date  of  the  making 
of  the  work  until  its  publication  and  thereafter  for  the 
life  of- the  author  and  fifty  years  after  his  death.  If 
at  the  date  of  the  death  of  the  author  the  work  happens 
to  be  still  unpublished  then  copyright  subsists  until 
publication  (it  being  deemed  that  the  author  died  at 
the  date  of  publication)  and  for  a  period  of  fifty  years 
thereafter.  (Sec.  17,  Sch.  I).  Sixthly,  the  Act  provides 
that  the  author  shall  be  the  first  owner  and  that  copy- 
right shall  vest  in  him.  A  different  rule  applies  when 
the  work  in  question  is  done  on  commission ;  in  that 
case  the  copyright  shall  belong  to  the  person  ordering 
the  work.  If  the  work  be  done  by  the  author  in  the 
ordinary  course  of  his  employment  the  copyright  shall 
belong  to  the  employer  (Sec.  5,  Sch.  I).  Seventhly, 
the  Act  removes  some  long- standing  grievances  and 
anomalies  by  allowing  the  author  of  a  novel  the  exclu- 
sive right  of  dramatising  and  translating  it  and,  con- 
versely the  writer  of  a  play  the  exclusive  right  of 
novelising  it  (Section  4).  On  the  same  principle  the 
composer  of  a  musical  composition  is  allowed  the 
right  (subject  to  exceptional  privileges  granted  to 
makers  of  gramophones)  of  adapting  his  composi- 
tion for  use  upon  mechanical  instruments  (Section  i, 
Sch.  I).  Lastly,  the  system  of  "compulsory license" 
is  introduced.  This  provides  that  if  at  any  time  after 
the  death  of  the  author  of  a  literary,  dramatic,  or 
musical  work  which  has  been  published  or  performed 
in  public,  the  owner  of  the  copyright  refuses  republi- 
cation  or  performance  of  the  work  in  public  and  the 
work  is  thus  withheld  from  the  public,  the  owner  may 
be  compelled  to  grant  a  license  for  reproduction  or 
performance  thereof  on  certain  terms. 


APPENDIX. 
PART  I. 

THE   INDIAN    COPYRIGHT   ACT,  1914, 
(ACT  No.   Ill   OF   1914.) 


CONTENTS. 

CHAPTER  I. 
PRELIMINARY. 


SECTIONS. 

1.  Short  title  and  extent. 

2.  Definitions. 


CHAPTER  II. 
CONSTRUCTION  AND  MODIFICATION  OF  THE  COPYRIGHT  ACT. 

3.  Application   of  Copyright    Act    to    British    India     with 

adaptations. 

4.  Modification  of  copyright  as  regards  translation  of  works 

first  published  in  British  India. 

5.  Musical  works  made  by  resident  of,  or  first  published  in, 

British  India. 

6.  Importation  of  copies. 


CHAPTER  III. 
PENALTIES. 

7.  Offences  in  respect  of  infringing  copies. 

8.  Possession  of   plates    for   purpose    of    making   infringing 

copies. 

9.  Punishment  on  second  conviction. 

10.  Power  of  Court  to  dispose  of  infringing  copies  or  plates 
for  purpose  of  making  infringing  copies. 

n.  Cognizance  of  offences. 

12.  Saving  in  case  of  infringement  by  construction  of  build- 
ing. 


CHAPTER  IV. 
MISCELLANEOUS. 

13.  Courts  having  civil  jurisdiction  regarding  infringement  of 
copyright. 


2l6 


SECTIONS. 

14.  Effect  of  non-registration  under  Act  XX  of  1847. 

15.  Repeals 

THE  FIRST  SCHEDULE. 

PORTIONS    OF    THE    COPYRIGHT    ACT    APPLICABLE   TO   BRITISH 

INDIA. 


THE  SECOND   SCHEDULE. 
REPEAL  OF  ENACTMENTS. 


ACT   No.   Ill   OF   1914. 


PASSED  BY  THE  GOVERNOR  GENERAL  OF  INDIA  IN  COUNCIL. 

(Received  the  assent  of  the  Governor  General  on  the  2^th 
February, 


An  Act  to  modify  and  add  to  the  provisions  of  the  Copy- 
right Act,  IQII. 

WHEREAS  it  is  expedient  to  modify  and  add  to    the  provi-  i  &  2,  Geo.  s,c.  46. 
sions    of  the  Copyright  Act,    1911,  in  its  application  to 
British  India  ;  It  is  hereby  enacted  as  follows  :  — 

CHAPTER  I. 
PRELIMINARY. 

1.  (/)  This  Act  may  be  called  the  Indian  Copyright  Act,  Short  title  and 
1914.  extent. 

(2)  It  extends  to  the  whole  of  British  India  including 
British  Baluchistan,  the  District  of  Angul  and  the  Sonthal 
Parganas. 

2.  In  this  Act,  unless  there  is  anything  repugnant  in  the  Definitions. 
subject  or  context,— 

(/)  "the  Copyright  Act"  means  the  Act  of  Parliament 
entitled  the  Copyright  Act,  1911  :  and 

(2)  words  and  expressions  defined  in  the  Copyright  Act 
have  the  same  meanings  as  in  that  Act. 


CHAPTER  II. 
CONSTRUCTION  AND  MODIFICATION  OF  THE  COPYRIGHT  ACT. 

3.     In    the  application  to   British   India  of  the    Copyright  Application  of 
Act  (a  copy  of  which  Act,  except  such  of  the  provisions  thereof  Copyright  Act  to 
as  are  expressly  restricted  to  the  United  Kingdom,  is  set  out  in 
the  First  Schedule),  the  following  modifications  shall  be  made, 
namely : — 

(/)  the  powers  of  the  Board  of  Trade  under  section  3  shall, 
in  the  case  of  works  first  published  in  British  India, 
be  exercised  by  the  Governor  General  in  Council ; 

(2)  the  powers  of  the  Board  of  Trade  under  section  19 
shall;  as  regards  records,  perforated  rolls  and  other 
contrivances,  the  original  plate  of  which  was  made 
in  British  India,  be  exercised  by  the  Governor  General 
in  Council ;  and  the  confirmation  of  Parliament  shall 
not  be  necessary  to  the  exercise  of  any  of  these 
powers ; 

28 


218 


7  Edw.  VII,  Cap. 

29. 

II  of  1911. 

7  Edw  VII,  Cap. 

29. 

II  of  1911. 


Modification  of 
copyright  as 
regards  translation 
of  works  first 
published  in 
British  India. 


Musical  works 
made  by  resident 
of,  or  first 
published  in, 
British  India. 


Importation  of 
copies. 


VIII  of  1878. 


(j)  the  references  in  section  19,  sub-section  (4),  and  in  sec- 
tion 24,  sub-section  (/),  to  arbitration  shall  be  read 
as  references  to  arbitration  in  accordance  with  the 
law  for  the  time  being  in  force  in  that  part  of  British 
India  in  which  the  dispute  occurs  ; 

(4}  as  regards  works  the  authors  whereof  were  at  the  time 
of  the  making  of  the  works  resident  in  British  India, 
and  as  regards  works  first  published  in  British  India, 
the  reference  in  section  22  to  the  Patents  and  Designs 
Act,  1907,  shall  be  construed  as  a  reference  to  the 
Indian  Patents  and  Designs  Act,  1911,  and  the  refer- 
ence in  the  said  section  to  section  86  of  the  Patents 
and  Designs  Act,  1907,  shall  be  construed  as  a  refer- 
ence to  section  77  of  the  Indian  Patents  and  Designs 
Act,  1911  ; 

(5)  as  regards  works  first  published  in  British  India,  the 
reference  in  section  24,  sub-section  (/).  proviso  (a),  to 
the  London  Gazette  and  two  London  newspapers  shall 
be  construed  as  a  reference  to  the  Gazette  of  India 
and  two  newspapers  published  in  British  India :  and 
the  reference  in  proviso  (b)  of  the  same  sub-section  of 
the  same  section  to  the  26th  day  of  July,  1910,  shall, 
as  regards  works  the  authors  whereof  were  at  the 
time  of  the  making  of  the  works  resident  in  British 
India,  and  as  regards  works  first  published  in  British 
India,  be  construed  as  a  reference  to  the  3Oth  day  of 
October,  1912. 

4.  (r)  In.  the  case  of  works  first  published  in  British  India, 
copyright  shall  be  subject  to  this  limitation   that  the  sole  right 
to  produce,   reproduce,  perform  or  publish  a  translation  of    the 
work  shall  subsist  only  for  a  period    of  ten   years  from  the  date 
of  the  first  publication  of  the  work  : 

Provided  that  if  within  the  said  period  the  author,  or  any 
person  to  whom  he  has  granted  permission  so  to  do,  publishes  a 
translation  of  any  such  work  in  any  language,  copyright  in 
such  work  as  regards  the  sole  right  to  produce,  reproduce, 
perform  or  publish  a  translation  in  that  language  shall  not  be 
subject  to  the  limitation  prescribed  in  this  sub-section. 

(2)  For  the    purposes   of    sub-section    (/)    the    expression 
"  author  "  includes  the  legal  representative  of  a  deceased  author. 

5.  In  the  application  of  the  Copyright  Act  to  musical  works 
the   authors    whereof  were    at    the   time    of  the    making    of  the 
works  resident  in  British  India,  or  to  musical  works  first  pub- 
lished in  British  India,  the  term  "  musical  work  "  shall,  save  as 
otherwise  expressly  provided  by  the  Copyright.  Act,  mean  <:  any 
combination  of  melody  and  harmony,  or  either  of  them,  which 
has  been  reduced  to  writing." 

6.  (/)  Copies  made  out  of  British   India   of  any   work    in 
which  copyright  subsists  which  if  made  in  British  India  would  in- 
fringe copyright,  and  as  to  which  the  owner  of  the  copyright 
gives   notice   in   writing   by   himself   or  his  agent  to  the  Chief 
Customs  officer,  as  defined  in  the  Sea  Customs  Act,  1878,  that  he 


2IQ 

is  desirous  that  such  copies  should  not  be  imported  into  British 
India,  shall  not  be  so  imported,  and  shall,  subject  to  the  provi- 
sions of  this  section,  be  deemed  to  be  prohibited  imports  within 
the  meaning  of  section  18  of  the  Sea  Customs  Act,  1878.  vm  of  l8?8- 

(2)  Before  detaining  any  such  copies,  or  taking  any  further 
proceedings  with  a  view  to  the  confiscation  thereof,  such  Chief 
Customs  officer,  or  any  other  officer  appointed  by  the  Local 
Government  in  this  behalf,  may  require  the  regulations  under 
this  section)  whether  as  to  information,  security,  conditions  or 
other  matters,  to  be  complied  with,  and  may  satisfy  himself,  in 
accordance  with  these  regulations,  that  the  copies  are  such  as  are 
prohibited  by  this  section  to  be  imported 

(j)  The  Governor  General  in  Council  may,  by  notification 
in  the  Gazette  of  India,  make  regulations,  either  general  or 
special,  respecting  the  detention  and  confiscation  of  copies  the 
importation  of  which  is  prohibited  by  this  section,  and  the  con- 
ditions, if  any,  to  be  fulfilled  before  such  detention  and  confisca- 
tion ;  and  may,  by  such  regulations,  determine  the  information, 
notices  and  security  to  be  given,  and  the  evidence  requisite  for 
any  of  the  purposes  of  this  section,  and  the  mode  of  verification 
of  such  evidence. 

(4)  Such  regulations  may  apply  to  copies  of  all  works  the 
importation  of  copies  of  which  is  prohibited  by  this  section,  or 
different  regulations  may  be  made  respecting  different,  classes  of 
such  works. 

(5)  The    regulations    may    provide    for    the    informant   re- 
imbursing the  Secretary  of  State  for  India  in  Council  all  expenses 
and  damages  incurred  in  respect  of  any  detention  made  on  his 
information,  and  of  any  proceedings  consequent  on  such  deten- 
tion ;  and  may  provide  that  notices  given  under  the  Copyright 
Act  to  the  Commissioners  of  Customs  and  Excise  of  the  United 
Kingdom,  and  communicated  by  that  authority  to  any  authority 
in  British  India,  shall  be  deemed  to  have  been  given  by  the  owner 
to  the  said  Chief  Customs  officer. 

(6)  This  section  shall  have  effect  as  the  necessary  modifica- 
tion of  section  14  of  the  Copyright  Act. 


CHAPTER  III. 

PENALTIES. 

7.     If  any  person  knowingly —  Offences  in  respect 

(a)  makes  for  sale  or  hire  any  infringing  copy  of  a  work  in  ° 

which  copyright  subsists ;  or 

(b)  sells  or   lets    for   hire,   or    by  way  of  trade    exposes  or 

offers  for   sale   or  hire,    any   infringing  copy  of  any 
such  work  :  or 

(c)  distributes   infringing  copies   of  any   such    work,    either 

for  the  purposes  of  trade  or  to  such  an  extent  as  to 
affect  prejudicially  the  owner  of  the  copyright;  or 


220 


Possession  of 
plates  for  purpose 
of  making 
infringing  copies. 


Punishment  on 
second  conviction. 


Power  of  Court 
to  dispose  of 
infringing  copies  or 
plates  for  purpose 
of  making 
infringing  copies 


Cognizance  of 
offences. 


Saving  in  case  of 
infringement  by 
construction  of 
building. 


(d)  by  way  of  trade  exhibits  in  public  any  infringing  copy 

of  any  such  work  ;  or 

(e)  imports  for  sale  or  hire  into  British  India  any   infring- 

ing copy  of  any  such  work  ; 

he  shall  be  punishable  with  fine  which  may  extend  to  twenty 
rupees  for  every  copy  dealt  with  in  contravention  of  this  section, 
but  not  exceeding  five  hundred  rupees  in  respect  of  the  same 
transaction. 

8.  If  any  person  knowingly  makes,  or  has  in  his  possession, 
any  plate  for  the  purpose  of  making  infringing  copies  of  any 
work   in   which   copyright   subsists,    or    knowingly    and   for   his 
private  profit  causes  any  such  work  to  be  performed  in  public 
without  the  consent  of  the  owner  of  the  copyright,  he  shall  be 
punishable  with  fine  which  may  extend  to  five  hundred  rupees. 

9.  If  any  person,  after  having  been  previously  convicted  of 
an  offence  punishable  under  section  7  or  section  8  is  subsequently 
convicted  of  an  offence  punishable  under  either  of  these  sections, 
he  shall  be  punishable   with  simple    imprisonment    which   may 
extend    to  one  month,  or  with  fine  which  may   extend  to  one 
thousand  rupees,  or  with  both. 

10.  (/)  The    Court    before    which   any    offence   under   this 
Chapter  is  tried  may,  whether  the  alleged  offender,  is  convicted 
or  not,  order  that   all   copies   of  the  work  or   all  plates  in  the 
possession  of  the  alleged  offender,  which  appear  to  it  to  be  in- 
fringing copies,  or  plates  for  the   purpose  of  making  infringing 
copies,  be  destroyed  or  delivered  up  to  the  owner  of  the  copyright, 
or  otherwise  dealt  with  as  the  Court  may  think  fit. 

(2}  Any  person  affected  by  an  order  under  sub-section  (/) 
may,  within  thirty  days  of  the  date  of  such  order,  appeal  to  the 
Court  to  which  appeals  from  the  Court  making  the  order  ordin- 
arily lie ;  and  such  appellate  Court  may  direct  that  execution  of 
the  order  be  stayed  pending  consideration  of  the  appeal. 

ii  No  Court  inferior  to  that  of  a  Presidency  Magistrate  or 
a  Magistrate  of  the  first  class  shall  try  any  offence  against  this 
Act. 

12.  The  provisions  of  this  Chapter  shall  not  apply  to  any 
case  to  which  section  9  of  the  Copyright  Act,  regarding  the  restric- 
tions on  remedies  in  the  case  of  a  work  of  architecture,  applies. 


Courts  having  civil 
jurisdiction 
regarding 
infringement  of 
copyright. 

Effect  of 
non-registration 
under  Act  XX  of 
1847. 


CHAPTER   IV. 
MISCELLANEOUS. 

13.  Every  suit  or  other  civil  proceeding  regarding  infringe- 
ment of  copyright  shall  be  instituted  and  tried  in  the  High  Court 
or  the  Court  of  the  District  Judge. 

14.  No  suit  or  other  civil  proceeding  instituted  after   the 
3Oth  of  October,  1912,  regarding  infringement  of  copyright  in  any 
book  the  author  whereof  was  at  the  time  of  making   the  book 
resident  in  British  India,  or  of  any  book  first  published  in  British 
India,  shall  be  dismissed  by  reason  only  that  the  registration  of 


221 

such  book  had  not  been  effected  in  accordance  with  the  provisions 

of  the  Indian  Copyright  Act,  1847.  XX  of  l847' 

15.     The  enactments  mentioned  in  the  Second  Schedule  are  Repeals, 
hereby    repealed   to    the   extent  specified   in  the  fourth   column 
thereof. 

THE  FIRST  SCHEDULE. 

PORTIONS  OF  THE  COPYRIGHT  ACT  APPLICABLE  TO  BRITISH 

INDIA. 

(See  section  3.) 

COPYRIGHT   ACT,    1911. 

[i  &  2  GEO.  5,  C.  46.] 


ARRANGEMENT   OF   SECTIONS. 


SECTIONS. 

i.  Copyright. 


PART  I. 

IMPERIAL  COPYRIGHT. 
Rights. 


2.  Infringement  of  copyright 

3.  Term  of  copyright. 

4.  Compulsory  licences. 

5.  Ownership  of  copyright,  etc. 

Civil  Remedies. 

6.  Civil  remedies  for  infringement  of  copyright. 

7.  Rights  of  owner    against   persons   possessing   or    dealing 

with  infringing  copies,  etc. 

8.  Exemption    of  innocent   infringer  from   liability  to   pay 

damages,  etc. 

9.  Restriction  on  remedies  in  the  case  of  architecture. 
10.  Limitation  of  actions. 


Importation  of  Copies. 

14.  Importation  of  copies. 

Delivery  of  Books  to  Libraries. 

15.  Delivery  of  copies  to  British  Museum  and  other  libraries. 


222 

SECTIONS. 

Special  Provisions  as  to  certain  Works. 

16.  Works  of  joint  authors. 

17.  Posthumous  works. 

18.  Provisions  as  to  Government  publications. 

19.  Provisions  as  to  mechanical  instruments. 

20.  Provisions  as  to  political  speeches. 

21.  Provisions  as  to  photographs. 

22.  Provisions  as  to  designs  registrable  under  7  Edw.  7,  c,  29. 

23.  Works  of  foreign  authors  first  published  in  parts  of  His 

Majesty's  dominions  to  which  Act  extends. 

24.  Existing  works. 

Application  to  British  Possessions. 

25.  Application  of  Act  to  British  dominions. 

26.  Legislative  powers  of  self-governing  dominions. 

27.  Power  of  Legislatures  of  British  possessions  to  pass  supple- 

mental legislation. 

28.  Application  to  protectorates. 


PART    TI. 
INTERNATIONAL  COPYRIGHT. 

29.  Power  to  extend  Act  to  foreign  works. 

30.  Application  of  Part  II  to  British  possessions. 


PART   III. 
SUPPLEMENTAL  PROVISIONS. 

31.  Abrogation  of  common  law  rights. 

32.  Provisions  as  to  Orders  in  Council. 

33.  Saving  of  university  copyright 

34.  Saving  of  compensation  to  certain  libraries 

35.  Interpretation. 

36.  Repeal. 

37.  Short  title  and  commencement. 

SCHEDULES. 
CHAPTER   46, 

AN    ACT    TO    AMEND     AND    CONSOLIDATE    THE    LAW 
RELATING   TO    COPYRIGHT. 

[i6TH  DECEMBER,  1911.] 

Be  it  enacted  by  the  King's  Most  Excellent  Majesty,  by  and 
with  the  advice  and  consent  of  the  Lords  Spiritual  and  Temporal, 


223 

and  Commons  in  this  present  Parliament  assembled,  and  by  the 
authority  of  the  same,  as  follows : — 

PART   I. 

IMPERIAL  COPYRIGHT. 
Rights. 

1.  (/)  Subject  to  the  provisions  of  this  Act,  copyright  shall 
subsist  throughout  the  parts  of  His  Majesty's  dominions  to  which 
this  Act  extends  for  the  term  hereinafter  mentioned  in  every 
original  literary,  dramatic,  musical  and  artistic  work,  if — 

(a)  in    the   case   of   a    published   work,    the    work  was  first 

published  within  such  parts  of  His  Majesty's  domin- 
ions as  aforesaid  ;  and 

(b)  in  the  case  of  an  unpublished  work,  the  author  was  at 

the  date  of  the  making  of  the  work  a  British  subject 
or  resident  within  such  parts  of  His  Majesty's  domin- 
ions as  aforesaid; 

but  in  no  other  works,  except  so  far  as  the  protection  conferred 
by  this  Act  is  extended  by  Orders  in  Council  thereunder  relating 
to  self-governing  dominions  to  which  this  Act  does  not  extend 
and  to  foreign  countries. 

(2}  For  the  purposes  of  this  Act,  ''copyright"  means  the 
sole  right  to  produce  or  reproduce  the  work  or  any  substantial 
part  thereof  in  any  material  form  whatsoever,  to  perform,  or  in 
the  case  of  a  lecture  to  deliver,  the  work  or  any  substantial  part 
thereof  in  public  ;  if  the  work  is  unpublished,  to  publish  the 
work  or  any  substantial  part  thereof;  and  shall  include  the  sole 
right— 

(a)  to    produce,    reproduce,   perform,  or  publish  any  trans- 

lation of  the  work ; 

(b)  in  the  case   of  a   dramatic    work,    to   convert  it  into  a 

novel  or  other  non-dramatic  work  ; 

(c)  in  the  case  of  a  novel  or  other  non-dramatic  work,  or  of 

an  artistic  work,  to  convert  it  into  a  dramatic  work, 
by  way  of  performance  in  public  or  otherwise ; 

(d)  in  the  case  of  a  literary  dramatic  or  musical  work,    to 

make  any  record,  perforated  roll,  cinematograph 
film,  or  other  contrivance  by  means  of  which  the 
work  may  be  mechanically  performed  or  delivered  ; 

and  to  authorise  any  such  acts  as  aforesaid. 

(j)  For  the  purposes  of  this  Act,  publication,  in  relation  to 
any  work,  means  the  issue  of  copies  of  the  work  to  the  public, 
and  does  not  include  the  performance  in  public  of  a  dramatic  or 
musical  work,  the  delivery  in  public  of  a  lecture,  the  exhibition 
of  an  artistic  work,  or  the  construction  of  an  architectural  work 
of  art,  but,  for  the  purposes  of  this  provision,  the  issue  of  photo- 
graphs and  engravings  of  works  of  sculpture  and  architectural 
works  of  art  shall  not  be  deemed  to  be  publication  of  such  works. 

2.  (/)  Copyright  in  a  work  shall  be  deemed  to  be  infringed  Infringement  of 
by   any  person   who,  without  the   consent  of  the   owner  of  the  copyright. 


224 

copyright,  does  anything  the  sole  right  to  do  which  is  by  this 
Act  conferred  on  the  owner  of  the  copyright :  Provided  that  the 
following  acts  shall  not  constitute  an  infringement  of  copy- 
right :— • 

(1)  Any  fair  dealing   with   any    work    for    the  purposes    of 

private  study,  research,  criticism,  review,  or  news- 
paper summary  : 

(ii)  Where  the  author  of  an  artistic  work  is  not  the  owner 
of  the  copyright  therein,  the  use  by  the  author  of 
any  mould,  cast,  sketch,  plan,  model  or  study  made 
by  him  for  the  purpose  of  the^work,  provided  that 
he  does  not  thereby  repeat  or  imitate  the  main 
design  of  that  work  : 

(iii)  The  making  or  publishing  of  paintings,  drawings,  engrav- 
ings, or  photographs  of  a  work  of  sculpture  or 
artistic  craftsmanship,  if  permanently  situate  in  a 
public  place  or  building,  or  the  making  or  publishing 
of  paintings,  drawings,  engravings  or  photographs 
(which  are  not  in  the  nature  of  architectural  drawings 
or  plans)  of  any  architectural  work  of  art  : 

(iv)  The  publication  in  a  collection,  mainly  composed  of 
non-copyright  matter,  bona  fide  intended  for  the  use 
of  schools,  and  so  described  in  the  title  and  in  any 
advertisements  issued  by  the  publisher,  of  short  pas- 
sages from  published  literary  works  not  themselves 
published  for  the  use  of  schools  in  which  copyright 
subsists  :  Provided  that  not  more  than  two  of  such 
passages  from  works  by  the  same  author  are  pub- 
lished by  the  same  publisher  within  five  years,  and 
that  the  source  from  which  such  passages  are  taken  is 
acknowledged  : 

(v)  The  publication  in  a  newspaper  of  a  report  of  a  lecture 
delivered  in  public,  unless  the  report  is  prohibited 
by  conspicuous  written  or  printed  notice  affixed 
before  and  maintained  during  the  lecture  at  or  about 
the  main  entrance  of  the  building  in  which  the  lec- 
ture is  given,  and,  except  whilst  the  building  is  being 
used  for  public  worship,  in  a  position  near  the  lec- 
turer ;  but  nothing  in  this  paragraph  shall  affect  the 
provisions  in  paragraph  (i)  as  to  newspaper  summa- 
ries : 

(vi)  The  reading  or  recitation  in  public  by  one  person  of 
any  reasonable  extract  from  any  published  work. 

(2)  Copyright  in  a  work  shall  also  be  deemed  to  be  infringed 
by  any  person  who — 

(a)  sells  or  lets    for  hire,    or    by  way    of   trade  exposes    or 

offers  for  sale  or  hire  ;  or 
(6)  distributes  either    for  the  purposes  of  trade  or  to  such 

an  extent  as  to  affect  prejudicially  the  owner  of  the 

copyright ;  or 
(c)  by  way  of  trade  exhibits  in  public ;  or 


225 

(d)  imports  for  sale  or  hire  into  any  part  of  His  Majesty's 
dominions  to  which  this  Act  extends, 

any  work  which  to  his  knowledge  infringes  copyright  or  would 
infringe  copyright  if  it  had  been  made  within  the  part  of  His 
Majesty's  dominions  in  or  into  which  the  sale  or  hiring,  exposure, 
offering,  for  sale  or  hire,  distribution,  exhibition,  or  importation 
took  place. 

(j)  Copyright  in  a  work  shall  also  be  deemed  to  be  infringed 
by  any  person  who  for  his  private  profit  permits  a  theatre  or 
other  place  of  entertainment  to  be  used  for  the  performance  in 
public  of  the  work  without  the  consent  of  the  owner  of  the 
copyright,  unless  he  was  not  aware,  and  had  no  reasonable 
ground  for  suspecting,  that  the  performance  would  be  an  in- 
fringement of  copyright. 

3.  The  term  for  which  copyright  shall  subsist  shall,  except  Term  of 
as  otherwise  expressly  provided  by  this  Act,  be  the  life  of  the  c°Pyrigbt- 
author  and  a  period  of  fifty  years  after  his  death  : 

Provided  that  at  any  time  after  the  expiration  of  twenty- 
five  years,  or  in  the  case  of  a  work  in  which  copyright  subsists 
at  the  passing  of  this  Act  thirty  years  from  the  death  of  the 
author  of  a  published  work,  copyright  in  the  work  shall  not  be 
deemed  to  be  infringed  by  the  reproduction  of  the  work  for  sale 
if  the  person  reproducing  the  work  proves  that  he  has  given  the 
prescribed  notice  in  writing  of  his  intention  to  reproduce  the 
work,  and  that  he  has  paid  in  the  prescribed  manner  to,  or  for 
the  benefit  of,  the  owner  of  the  copyright  royalties  in  respect  of 
all  copies  of  the  work  sold  by  him  calculated  at  the  rate  of  ten 
per  cent  on  the  price  at  which  he  publishes  the  work ;  and,  for 
the  purposes  of  this  proviso,  the  Board  of  T;ade  may  make  regula- 
tions prescribing  the  mode  in  which  notices  are  to  be  given,  and 
the  particulars  to  be  given  in  such  notices,  and  the  mode,  time, 
and  frequency  of  the  payment  of  royalties,  including  (if  they 
think  fit)  regulations  requiring  payment  in  advance  or  othtiwise 
securing  the  payment  of  royalties 

4.  If,    at    any   time    after   the   death   of   the    author   of  a  Compulsory 
literary  dramatic  or  musical  work  which  has  been  published  Orlicences> 
performed    in    public,    a    complaint    is    made    to    the    Judicial 
Committee  of  the  Privy  Council  that  the  owner  of  the  copyright 

in  the  work  has  refused  to  republish  or  to  allow  the  republica- 
tion  of  the  work  or  has  refused  to  allow  the  performance 
in  public  of  the  work,  and  that  by  reason  of  such  refusal  the 
work  is  withheld  from  the  public,  the  owner  of  the  copyright 
may  be  ordered  to  grant  a  licence  to  reproduce  the  work  or 
perform  the  work  in  public,  as  the  case  may  be,  on  such  terms 
and  subject  to  such  conditions  as  the  Judicial  Committee  may 
think  fit. 

5.  (/)  Subject  to  the  provisions  of  this  Act,  the  author  of  Ownership  of 
a  work  shall  be  the  first  owner  of  the  copyright  therein:  copyright,  etc 

Provided  that — 

(a)  where,  in  the  case  of  an  engraving,  photograph,  or 
portrait,  the  plate  or  other  original  was  ordered 
by  some  other  person  and  was  made  for  valuable 

29 


226 

consideration  in  pursuance  of  that  order,  then,  in 
the  absence  of  any  agreement  to  the  contrary,  the 
person  by  whom  such  plate  or  other  original  was 
ordered  shall  be  the  first  owner  of  the  copyright ; 
(b)  where  the  author  was  in  the  employment  of  some  other 
person  under  a  contract  of  service  or  apprenticeship 
and  the  work  was  made  in  the  course  of  his  employ- 
ment by  that  person,  the  person  by  whom  the  author 
was  employed  shall,  in  the  absence  of  any  agreement 
to  the  contrary,  be  the  first  owner  of  the  copyright, 
but  where  the  work  is  an  article  or  other  contribu- 
tion to  a  newspaper,  magazine,  or  similar  periodical, 
there  shall,  in  the  absence  of  any  agreement  to  the 
contrary,  be  deemed  to  be  reserved  to  the  author  a 
right  to  restrain  the  publication  of  the  work,  other- 
wise than  as  part  of  a  newspaper,  magazine,  or 
similar  periodical. 

(2)  The  owner  of  the  copyright  in  any  work  may  assign 
the  right,  either  wholly  or  partially,  and  either  generally  or  subject 
to  limitations  to  the  United  Kingdom  or  any  self-governing 
dominion  or  other  part  of  His  Majesty's  dominions  to  which  this 
Act  extends,  and  either  for  the  whole  term  of  the  copyright  or 
for  any  part  thereof,  and  may  grant  any  interest  in  the  right  by 
licence,  but  no  such  assignment  or  grant  shall  be  valid  unless  it 
is  in  writing  signed  by  the  owner  of  the  right  in  respect  of  which 
the  assignment  or  grant  is  made,  or  by  his  duly  authorised  agent : 

Provided  that,  where  the  author  of  a  work  is  the  first  owner 
of  the  copyright  therein,  no  assignment  of  the  copyright,  and  no 
grant  of  any  interest  therein,  made  by  him  (otherwise  than  by 
will)  after  the  passing  of  this  Act,  shall  be  operative  to  vest 
in  the  assignee  or  grantee  any  rights  with  respect  to  the 
copyright  in  the  work  be}7ond  the  expiration  of  twenty-five 
years  from  the  death  of  the  author,  and  the  reversionary  interest 
in  the  copyright  expectant  on  the  termination  of  that  period 
shall,  on  the  death  of  the  author,  notwithstanding  any  agree- 
ment to  the  contrary,  devolve  on  his  legal  personal  representa- 
tives as  part  of  his  estate,  and  any  agreement  entered  into  by 
him  as  to  the  disposition  of  such  reversionary  interest  shall  be 
null  and  void,  but  nothing  in  this  proviso  shall  be  construed  as 
applying  to  the  assignment  of  the  copyright  in  a  collective  work 
or  a  licence  to  publish  a  work  or  part  of  a  work  as  part  of  a 
collective  work. 

(j)  Where,  under  any  partial  assignment  of  copyright,  the 
assignee  becomes  entitled  to  any  right  comprised  in  copyright, 
the  assignee,  as  respects  the  rights  so  assigned,  and  the  assignor, 
as  respects  the  rights  not  assigned,  shall  be  treated  for  the  purposes 
of  this  Act  as  the  owner  of  the  copyright,  and  the  provisions 
of  this  Act  shall  have  effect  accordingly. 

Civil  Remedies. 

Civil  remedies  5      (7)  where  copyright  in  any  work  has  been  infringed,  the 

owner  of  the  copyright  shall,  except  as  otherwise  provided   by 


227 

this  Act,  be  entitled  to  all  such  remedies  by  way  of  injunction 
or  interdict,  damages,  accounts,  and  otherwise,  as  are  or  may 
l)e  conferred  by  law  for  the  infringement  of  a  right. 

(2)  The  costs  of  all  parties  in  any  proceedings  in  respect 
of  the  infringement  of  copyright  shall  be  in  the  absolute  discre- 
tion of  the  Court. 

( j)  In  any  action  for  infringement  of  copyright  in  any 
work,  the  work  shall  be  presumed  to  be  a  work  in  which  copy- 
right subsists  and  the  plaintiff  shall  be  presumed  to  be  the  owner 
of  the  copyright,  unless  the  defendant  puts  in  issue  the  existence 
of  the  copyright,  or,  as  the  case  may  be,  the  title  of  the  plaintiff, 
and  vvhere  any  such  question  is  in  issue,  then — 

(a)  if  a  name  purporting  to   be  that  of  the  author   of  the 

work  is  printed  or  otherwise  indicated  thereon  in 
the  usual  manner,  the  person  whose  name  is  so 
printed  or  indicated  shall,  unless  the  contrary  is 
proved,  be  presumed  to  be  the  author  of  the  work  ; 

(b)  if   no  name  is  so  printed  or  indicated,  or  if  the  name 

so  printed  or  indicated  is  not  the  author's  true  name 
or  the  name  by  which  he  is  commonly  known,  and  a 
name  purporting  to  be  that  of  the  publisher  or 
proprietor  of  the  work  is  printed  or  otherwise  in- 
dicated thereon  in  the  usual  manner,  the  person 
whose  name  is  so  printed  or  indicated  shall,  unless 
the  contrary  is  proved,  be  presumed  to  be  the  owner 
of  the  copyright  in  the  work  for  the  purposes  of 
proceedings  in  respect  of  the  infringement  of  copy- 
right therein. 

7.  All  infringing   copies   of  any  work  in    which  copyright  Rights  of  owner 
subsists,  or  of  any  substantial  part  thereof,  and  all  plates  used  against  persons 
or  intended  to  be   used   for  the  production   of  such  infringing  deali^^witl^ 
copies,  shall  be  deemed  to  be  the  property  of  the  owner  of  the  infringing  copies, 
copyright,  who  accordingly  may  take  proceedings  for  the  recov-  etc. 

ery  of  the  possession  thereof  or  in  respect  of  the  conversion 
thereof. 

8.  Where  proceedings  are  taken  in  respect  of  the  infringe-  Exemption  of 
ment  of  the  copyright  in  any  work  and  the   defendant   in   his  innocent  infringer 
defence   alleges  that  he  was  not  aware  of  the  existence  of  the  from  Habilty  to 
copyright  in  the  work,  the  plaintiff  shall  not  be  entitled  to  any  pa: 

remedy  other  than  an  injunction  or  interdict  in  respect  of  the 
infringement  if  the  defendant  proves  that  at  the  date  of  the 
infringement  he  was  not  aware,  and  had  not  reasonable  ground 
for  suspecting,  that  copyright  subsisted  in  the  work. 

9.  (/)  Where  the  construction  of  a  building  or  other  struc-  Restriction  on 
ture  which  infringes  or  which,  if  completed,  would  infringe  the  remedies  in  the 
copyright  in  some  other  work  has  been  commenced,  the  owner  case  of 

of  the  copyright  shall  not  be  entitled  to  obtain  an  injunction  or  al 
interdict  to  restrain  the  construction  of  such  building  or  struc- 
ture or  to  order  its  demolition. 

(2)  Such  of  the  other  provisions  of  this  Act  as  provide 
that  an  infringing  copy  of  a  work  shall  be  deemed  to  be  the 
property  of  the  owner  of  the  copyright,  or  as  impose  summary 


228 


Limitation  of 
actions. 


penalties,   shall    not   apply   in    any  case  to  which    this  section 
applies. 

10.  An  action  in  respect  of  infringement  of  copyright  shall 
not  be  commenced  after  the  expiration  of  three  years  next  after 
the  infringement. 


Importation  of  copies. 

Importation  of  *4-    (7)  Copies  made  out  of  the  United  Kingdom  of  any  work 

copies.  in  which  copyright  subsists  which  if  made  in  the  United  King- 

dom would  infringe  copyright,  and  as  to  which  the  owner  of  the 
copyright  gives  notice  in  writing;  by  himself  or  his  agent  to  the 
Commissioners  of  Customs  and  Excise,  that  he  is  desirous  that 
such  copies  should  not  be  imported  into  the  United  Kingdom, 
shall  not  be  so  imported,  and  shall,  subject  to  the  provisions  of 
this  section,  be  deemed  to  be  included  in  the  table  of  prohibi- 
39  &  40  Viet.,  c.  36,  tions  arid  restrictions  contained  in  section  forty-two  of  the 
Customs  Consolidation  Act,  1676,  and  that  section  shall  apply 
accordingly. 

(2}  Before  detaining  any  such  copies  or  taking  any  further 
proceedings  with  a  view  to  tho  forfeiture  thereof  under  the  law 
relating  to  the  Customs,  the  Commissioners  of  Customs  and 
Excise  may  require  the  regulations  under  this  section,  whether 
as  to  information,  conditions,  or  other  matters,  to  be  complied 
with,  and  may  satisfy  themselves  in  accordance  with  those 
regulations  that  the  copies  are  such  as  are  prohibited  by  this 
section  to  be  imported. 

(j)  The  Commissioners  of  Customs  and  Excise  may  make 
regulations,  either  general  or  special,  respecting  the  detention 
and  forfeiture  of  copies  the  importation  of  which  is  prohibited 
by  this  section,  and  the  conditions,  if  any,  to  be  fulfilled  before 
such  detention  and  forfeiture,  and  may,  by  such  regulations, 
determine  the  information,  notices,  and  security  to  be  given, 
and  the  evidence  requisite  for  any  of  the  purposes  of  this  sec- 
tion, and  the  mode  of  verification  of  such  evidence. 

(4)  The   regulations   may    apply  to  copies  of  all  works  the 
importation    of  copies  of   which    is   prohibited    by   this  section, 
or  different  regulations  may  be  made  respecting  different  classes 
of  such  works. 

(5)  The   regulations   may   provide  for  the  informant    reim- 
bursing the  Commissioners  of  Customs  and  Excise  all  expenses 
and  damages  incurred  in  respect  of  any  detention  made  on  his 
information,  and  of  any  proceedings  consequent  on  such  deten- 
tion ;  and  may  provide  for  notices  under  any  enactment  repealed 
by  this  Act  being  treated  as  notices  given  under  this  section. 

(6)  The    foregoing   provisions   of   this    section    shall   have 
effect  as  if   they  were  part  of   the  Customs   Consolidation    Act, 
1876 :     Provided   that,   notwithstanding   anything  in  that   Act, 


22Q 

the  Isle  of  Man  shall  not  be  treated  as  part  of  the  United  King- 
dom for  the  purposes  of  this  section. 

(7)  This  section  shall,  with  the  necessary  modifications, 
apply  to  the  importation  into  a  British  possession  to  which  this 
Act  extends  of  copies  of  works  made  out  of  that  possession. 

Delivery  of  Books  to  Libraries. 

15.     (/)  The  publisher  of  every  book  published  in  the  United  Delivery  of  copies 
Kingdom  shall,  within  one  month  after  the  publication,  deliver,  *nd  other  M 
at  his  own  expense,    a  copy  of  the  book  to  the  trustees  of  the  libraries. 
British  Museum,  who  shall  give  a  written  receipt  for  it. 

(2)  He  shall  also,  if  written  demand  is  made  before  the 
expiration  of  twelve  months  after  publication,  deliver  within 
one  month  after  receipt  of  that  written  demand  or,  if  the 
demand  was  made  before  publication,  within  one  month  after 
publication,  to  some  depot  in  London  named  in  the  demand  a 
copy  of  the  book  for,  or  in  accordance  with  the  directions  of, 
the  authority  having  the  control  of  each  of  the  following  libra- 
ries, namely  :  the  Bodleian  Library,  Oxford,  the  University 
Library,  Cambridge,  the  Library  of  the  Faculty  of  Advocates 
at  Edinburgh,  and  the  Library  of  Trinity  College,  Dublin;  and, 
subject  to  the  provisions  of  this  section,  the  National  Library 
of  Wales.  In  the  case  of  an  encyclopaedia,  newspaper,  review, 
magazine,  or  work  published  in  a  series  of  numbers  or  parts, 
the  written  demand  may  include  all  numbers  or  parts  of  the  work 
which  may  be  subsequently  published. 

(j)  The  copy  delivered  to  the  trustees  of  the  British 
Museum  shall  be  a  copy  of  the  whole  book  with  all  maps  and 
illustrations  belonging  thereto,  finished  and  coloured  in  the  same 
manner  as  the  best  copies  of  the  book  are  published,  and  shall 
be  bound,  sewed,  or  stiched  together,  and  on  the  best  paper  on 
which  the  book  is  printed. 

(4)  The  copy  delivered  for  the  other  authorities  mentioned 
in  this  section  shall  be  on  the  paper  on  which  the  largest  number 
of  copies  of  the  book  is  printed  for  sale,  and  shall  be  in  the  like 
condition  as  the  books  prepared  for  sale. 

(5)  The   b'>oks  of   which  copies  are    to  be  delivered  to  the 
National    Library    of    Wales    shall    not   include    books   of   such 
classes   as  may  be  specified  in  regulations  to  be  made  by  the 
Board  of  Trade. 

(6)  If   a   publisher    fails   to   comply    with   this   section,   he 
shall  be  liable  on  summary  conviction  to  a  fine  not  exceeding 
five  pounds  and 'the  value  of  the   book,  and  the  fine  shall   be 
paid  to  the  trustees  or  authority  to  whom  the   book  ought  to 
have  been  delivered. 

(7)  For  the  purposes  of  this  section,  the  expression  "  book  " 
includes  every  part  or   division  of    a  book,   pamphlet,  sheet   of 
letter-press,  sheet  of  music,  map,  plan,  chart  or  table  separately 
published,  but  shall  not  include  any  second  or  subsequent  edition 
of  a  book  unless  such  edition  contains  additions  or  alterations 
either  in  the  letter  press  or  in  the  maps,  prints,  or  other  engrav- 
ings belonging  thereto. 


230 

Special  Provisions  as  to  certain  Works. 

Works  of  -joint  I^a     (7)  1^- the  case  of  a  work  of  joint  authorship,  copyright 

authors.  shall  subsist  during  the  life  of  the  author  who  first  dies  and  for 

a  term  of  fifty  years  after  his  death,  or  during  the  life  of  the 
author  who  dies  last,  whichever  period  is  the  longer,  and 
references  in  this  Act  to  the  period  after  the  expiration  of  any 
specified  number  of  years  from  the  death  of  the  author  shall  be 
construed  as  references  to  the  period  after  the  expiration  of  the 
like  number  of  years  from  the  death  of  the  author  who  dies  first 
or  after  the  death  of  the  author  who  dies  last,  whichever  period 
may  be  the  shorter,  and  in  the  provisions  of  this;  Act  with 
respect  to  the  grant  of  compulsory  licences  a  reference  to  the 
date  of  the  death  of  the  author  who  dies  last  shall  be  sub- 
stituted for  the  reference  to  the  date  of  the  death  of  the  author. 

(2)  Where,  in  the  case  of  a  work  of  joint  authorship,  some 
one  or  more  of  the  joint  authors  do  not  satisfy  the  conditions 
conferring  copyright  laid  down  by  this  Act,  the  work  shall  be 
treated  for  the  purposes  of  this  Act  as  if  the  other  author  or 
authors  had  been  the  sole  author  or  authors  thereof : 

Provided  that  the  term  of  the  copyright  shall  be  the  same 
as  it  would  have  been  if  all  the  authors  had  satisfied  such  condi- 
tions as  aforesaid. 

(j)  For  the  purposes  of  this  Act  "a  work  of  joint  author- 
ship "  means  a  work  produced  by  the  collaboration  of  two  or 
more  authors  in  which  the  contribution  of  one  author  is  not 
distinct  from  the  contribution  of  the  other  author  or  authors. 

(4)  Where  a  married  woman  and  her  husband  are  joint 
authors  of  a  work  the  interest  of  such  married  woman  therein 
shall  be  her  separate  property. 

osthumous  works  T7-  (7)  I*1  the  case  of  a  literary  dramatic  or  musical  work, 
or  an  engraving,  in  which  copyright  subsists  at  the  date  of  the 
death  of  the  author  or,  in  the  case  of  a  work  of  joint  author- 
ship at  or  immediately  before  the  date  of  the  death  of  the 
author  who  dies  last,  but  which  has  not  been  published,  nor,  in 
the  case  of  a  dramatic  or  musical  work,  been  performed  in 
public,  nor,  in  the  case  of  a  lecture,  been  delivered  in  public, 
before  that  date,  copyright  shall  subsist  till  publication,  or 
performance  or  delivery  in  public,  whichever  may  first  happen, 
and  for  a  term  of  fifty  years  thereafter,  and  the  proviso  to  sec- 
tion three  of  this  Act  shall,  in  the  case  of  such  a  work,  apply  as 
if  the  author  had  died  at  the  date  of  snch  publication  or  per- 
formance or  delivery  in  public  as  aforesaid. 

(2)  The  ownership  of  an  author's  manuscript  after  his 
death,  where  such  ownership  has  been  acquired  under  a  testa- 
mentary disposition  made  by  the  author  and  the  manuscript  is 
of  a  work  which  has  not  been  published  nor  performed  in  public 
nor  delivered  in  public,  shall  be  primd  facie  proof  of  the  copy- 
right being  with  the  owner  of  the  manuscript. 

Provisions  as  to  18.     Without  prejudice  to  any   rights   or   privileges   of  the 

Government  Crown,    where  any  work  has,  whether  before  or  after  the  com- 

mencement of  this  Act,  been  prepared  or  published  by  or  under 
the  direction  or  control  of  His  Majesty  or  any  Government 


231 

department,  the  copyright  in  the  work  shall,  subject  to  any 
agreement  with  the  author,  belong  to  His  Majesty,  and  in  such 
case  shall  continue  for  a  period  of  fifty  years  from  the  date  of 
the  first  publication  of  the  work. 

19.  (/)  Copyright  shall  subsist  in  records,  perforated  rolls,  Provisions  as  to 
and  other  contrivances  by  means  of  which  sounds  may  be 
mechanically  reproduced,  in  like  manner  as  if  such  contrivances 
were  musical  works,  but  the  term  of  copyright  shall  be  fifty 
vears  from  the  making  of  the  original  plate  from  which  the 
contrivance  was  directly  or  indirectly  derived,  and  the  person 
who  was  the  owner  of  such  original  plate  at  the  time  when  such 
plate  was  made  shall  be  deemed  to  be  the  author  of  the  work, 
and.  where  such  owner  is  a  body  corporate,  the  body  corporate 
shall  be  deemed  for  the  purposes  of  this  Act  to  reside  within  the 
parts  of  His  Majesty's  dominions  to  which  this  Act  extends  if  it 
has  established  a  place  of  business  within  such  parts. 

(2)  It  shall  not  be  deemed  to  be  an  infringement  of  copy- 
right in  any  musical  work  for  any  person  to  make,  within  the 
parts  of  His  Majesty's  dominions  to  which  this  Act  extends, 
records,  perforated  roles  or  other  contrivances  by  means  of 
which  the  work  may  be  mechanically  performed,  if  such  person 
proves — 

(a)  that  such  contrivances  have  previously  been  made  by, 
or  with  the  consent  or  acquiescence  of,  the  owner  of 
the  copyright  in  the  work  ;  and 

(6)  that  he  has  given  the  prescribed  notice  of  his  intention 
to  make  the  contrivances,  and  has  paid  in  the 
prescribed  manner  to,  or  for  the  benefit  of,  the  owner 
of  the  copyright  in  the  work  royalties  in  respect  of 
all  such  contrivances  sold  by  him,  calculated  at  the 
rate  hereinafter  mentioned  : 

Provided  that — 

(i)  nothing  in  this  provision  shall  authorise  any  alteration 
in,  or  omissions  from,  the  work  reproduced,  unless 
contrivances  reproducing  the  work  subject  to  similar 
alterations  and  omissions  have  been  previously  made 
by,  or  with  the  consent  or  acquiescence  of,  the  owner 
of  the  copyright,  or  unless  such  alterations  or  omis- 
sions are  reasonably  necessary  for  the  adaptation  of 
the  work  to  the  contrivances  in  question  ;  and 

(ii)  for  the  purposes  of  this  provision,  a  musical  work  shall 
be  deemed  to  include  any  words  so  closely  associated 
therewith  as  to  form  part  of  the  same  work,  but 
shall  not  be  deemed  to  include  a  contrivance  by 
means  of  which  sounds  may  be  mechanically  re- 
produced. 

(j)  The  rate  at  which  such  royalties  as  aforesaid  are  to 
be  calculated  shall — 

(a)  in  the  case  of  contrivances  sold  within  two  years  after 
the  commencement  of  this  Act  by  the  person  making 
the  same,  be  two  and  one-half  per  cent ;  and 


232 

(b)  in  the   case  of   contrivances   sold  as  aforesaid  after  the 
expiration  of  that  period,  be  five  per  cent. 

on  the  ordinary  retail  selling  price  of  the  contrivance  calculated 
in  the  prescribed  manner,  so  however  that  the  royalty  payable 
in  respect  of  a  contrivance  shall,  in  no  case,  be  less  than  a 
half-penny  for  each  separate  musical  work  in  which  copyright 
subsists  reproduced  thereon,  and,  where  the  royaltv  calculated 
as  aforesaid  includes  a  fraction  of  a  farthing,  such  fraction  shall 
be  reckoned  as  a  farthing  : 

Provided  that,  if,  at  any  time  after  the  expiration  of  seven 
years  from  the  commencement  of  this  Act,  it  appears  to  the 
Board  of  Trad'^  that  such  rate  as  aforesaid  is  no  longer  equitable, 
the  Board  of  Trade  may.  after  holding  a  public  inquiry,  make 
an  order  either  decreasing  or  increasing  that  rate  to  such  extent 
as  under  the  circumstances  may  seem  just,  but  any  order  so 
made  shall  be  provisional  onlv  and  shall  not  have  any  effect 
unbss  and  until  confirmed  by  Parliament ;  but,  where  an  order 
revising  the  rate  has  been  so  made  and  confirmed,  no  further 
revision  shall  be  made  before  the  expiration  of  fourteen  years 
from  the  date  of  the  last  revision. 

(^t)  If  any  such  contrivance  is  made  reproducing  two  or 
more  different  works  in  which  copyright  subsists  and  the  owners 
of  the  copyright  therein  are  different  persons,  the  sums  payable 
by  way  of  royalties  under  this  section  shall  be  apportioned 
amongst  the  several  owners  of  the  copyright  in  such  proportions 
as,  failing  agreement  may  be  determined  by  arbitration 

(j)  When  any  such  contrivances  by  m^ans  of  which  a 
musical  work  may  be  mechanically  performed  have  been  made, 
then,  for  the  purposes  of  this  section,  the  owner  of  the  copy- 
right in  the  work  shall,  in  relation  to  any  person  who  makes  the 
prescribed  inquiries,  be  deemed  to  have  given  his  c  msent  to  the 
making  of  such  contrivances  if  he  fails  to  reply  to  such  inquiries 
within  the  prescribed  time. 

(6)  For   the   purposes  of   this  section,  the  Board  of   Trade 
may   make   regulations   prescribing    anything  which  under  this 
section  is  to  be  prescribed,  and  prescribing  the  mode  in  which 
notices  are  to  be  given  and  the  particulars  to  be  given  in  such 
notices,  and  the  mode,  time,  and  frequency  of  the  payment  of 
royalties,  and  any  such  regulations  may,  if  the  Board  think  fit, 
include  regulations  requiring  payment  in  advance  or  otherwise 
securing  the  payment  of  royalties 

(7)  In    the   case   of    musical    works    published    before   the 
commencement  uf  this  Act,  the  foregoing  provisions  shall  have 
effect,  subject  to  the  following  modifications  and  additions  : — 

(a)  The  conditions   as  to  the  previous  making  by,  or  with 

the  consent  or  acquiescence  of,  the  owner  of  the 
copyright  in  the  work,  and  the  restrictions  as  to 
alterations  in  or  omissions  from  the  work  shall  not 
apply: 

(b)  The  rate  of   two  and  one-half   per   cent   shall  be  sub- 

stituted for  the  rate  of  five  par  cent  as  the  rate  at 
which  royalties  are  to  be  calculated,  but  no  royalties 


233 

shall  be  payable  in  respect  of  contrivances  sold 
before  the  first  day  of  July,  nineteen  hundred  and 
thirteen,  if  contrivances  reproducing  the  same  work 
had  been  lawfully  made,  or  placed  on  sale,  within  the 
parts  of  His  Majesty's  dominions  to  which  this  Act 
extends  before  the  first  day  of  July,  nineteen  hundred 
and  ten  : 

(c)  Notwithstanding  any  assignment  made  before  the  pass- 

ing of  this  Act  of  the  copyright  in  a  musical  work, 
any  rights  conferred  by  this  Act  in  respect  of  the 
making,  or  authorising  the  making  of  contrivances 
by  means  of  which  the  work  may  be  mechanically 
performed  shall  belong  to  the  author  or  his  legal 
personal  representatives  and  not  to  the  assignees,  and 
the  royalties  aforesaid  shall  be  payable  to,  and  for 
the  benefit  of,  the  author  of  the  work  or  his  legal 
personal  representatives  : 

(d)  The  saving  contained  in  this  Act  of  the  rights  and  in- 

terests arising  from,  or  in  connexion  with,  action 
taken  before  the  commencement  of  this  Act  shall 
not  be  construed  as  authorising  any  person  who  has 
made  contrivances  by  means  of  which  the  work  may 
be  mechanically  performed  to  sell  any  such  con- 
trivances, whether  made  before  or  after  the  passing 
of  this  Act,  except  on  the  terms  and  subject  to  the 
conditions  laid  clown  in  this  section  : 

(e)  Where   the  work  is  a  work  on  which  copyright  is  con- 

ferred by  an  Order  in  Council  relating  to  a  foreign 
country,  the  copyright  so  conferred  shall  not,  except 
to  such  extent  as  may  be  provided  by  the  Order, 
include  any  rights  with  respect  to  the  making  of 
records,  perforated  rolls  or  other  contrivances  by 
means  ol  which  the  work  may  be  mechanically 
performed. 

(8)  Notwithstanding  anything  in  this  Act  where  a  record, 
perforated  roll,  or  other  contrivance  by  means  of  which  sounds 
may  be  mechanically  reproduced  has  been  made  before  the 
commencement  of  this  Act,  copyright  shall,  as  from  the  com- 
mencement of  this  Act,  subsist  therein  in  like  manner  arid  for 
the  like  term  as  if  this  Act  had  been  in  force  at  the  date  of  the 
making  of  the  original  plate  from  which  the  contrivance  was 
directly  or  indirectly  derived  : 
Provided  that — 

(*)  the  person  who,  at  the  commencement  of  this  Act,  is 
the  owner  of  such  original  plate  shall  be  the  first 
owner  of  such  copyright  ;  and 

(ii)  nothing  in  this  provision  shall  be  construed  as  conferr- 
ing copyright  in  any  such  contrivance  if  the  making 
thereof  would  have  infringed  copyright  in  some  other 
such  contrivance,  if  this  provision  had  been  in  force 
at  tiie  time  of  the  making  of  the  first- mentioned 
contrivance. 

30 


234 


Provision  as  to 
political  speeches. 


Provision  as  to 
photographs. 


Provisions  as  to 
designs  registrable 
under  7  Edw.  7, 
c.  29. 


Work  of  foreign 
authors  first 
published  in  parts 
of  His 
Majesty's 
dominions  to 
which  A.ct 
extends. 


Existing  works. 


20.  Notwithstanding  anything  in  this  Act  it  shall  not  be 
an  infringement  of  copyright  in  an  address  of  a  political  nature 
delivered  at  a  public  meeting  to  publish  a  report  thereof  in    a 
newspaper. 

21.  The  term  for  which  copyright  shall  subsist  in   photo- 
graphs shall  be  fifty  years  from  the  making  of  the  original  nega- 
tive   from    which    the    photograph    was    directly    or   indirectly 
derived,  and  the  person  who  was  owner  of  such  negative  at  the 
time  when  such  negative  was  made  shall  be  deemed  to  be  the 
author  of  the  work,  and,  where  such  owner  is  a  body  corporate, 
the  body  corporate  shall  be  deemed  for  the  purposes  of  this  Act 
to  reside  within  the  parts  of  His  Majesty's  dominions  to  which 
this  Act  extends  if  it  has  established  a  place  of  business  within 
such  parts 

22.  (/)  This  Act  shall  not  apply  to  designs  capable  of  being 
registered   under  the    Patents    and    Designs   Act,    1907,    except 
designs  which,  though  capable  of  being  so    registered,    are    not 
used  or  intended  to  be  used  as  models  or  patterns  to  be  multi- 
plied by  any  industrial  process. 

(2}  General  rules  under  section  eighty -six  of  the  Patents 
and  Designs  Act,  1907.  may  be  made  for  determining  the  condi- 
tions under  which  a  design  shall  be  deemed  to  be  used  for  such 
purposes  as  aforesaid. 

23.  If  it  appears  to  His  Majesty  that  a  foreign  country  does 
not  give,  or,  has  not  undertaken  to  give,  adequate  protection  to 
the  works  of  British  authors,  it  shall  be  lawful  for  His  Majesty 
by  Order  in  Council  to  direct  that  such  of  the  provisions  of  this 
Act  as  confer  copyright  on  works  first  published  within  the  parts 
of  His  Majesty's  dominions  to  which  this  Act  extends,  shall  not 
apply  to  works  published  after  the  date  specified  in  the  Order, 
the   authors   whereof    are  subjects   or   citizens   of  such  foreign 
country,  and  are  not  resident  in  His  Majesty's  dominions,  and 
thereupon  those  provisions  shall  not  apply  to  such  work. 

24.  (/)  Where     any    person    is     immediately    before     the 
commencement  of  this  Act  entitled  to  any  such  right  in  any  such 
work  as  is  specified  in  the  first  column  of  the  First  Schedule  to 
this  Act,  or  to  any  interest  in  such  a  right,  he  shall,  as  from  that 
date,  be  entitled  to  the  substituted  right  set  forth  in  the  second 
column  of  that  schedule,  or  to  the  same  interest  in  such  a  sub- 
stituted right,  and  to  no  other  right  or  interest,  and  such  sub- 
stituted right  shall  subsist  for  the  term  for  which  it  would  have 
subsisted  if  this  Act  had  been  in  force  at  the   date   when   the 
work  was  made  and  the  work  had  been  one  entitled  to  copyright 
thereunder  : 

Provided  that — 

(a)  if  the  author  of  any  work  in  which  any  such  right  as 
is  specified  in  the  first  column  of  the  First  Schedule 
to  this  Act  subsists  at  the  commencement  of  this 
Act .  has,  before  that  date,  assigned  the  right  or 
granted  any  interest  therein  for  the  whole  term  of 
the  right,  then  at  the  date  when,  but  for  the  passing 
of  this  Act,  the  right  would  have  expired  the  sub- 


235 

stituted  right  conferred  by  this  section  shall,  in  the 
absence  of  express  agreement,  pass  to  the  author  of 
the  work,  and  any  interest  therein  created  before 
the  commencement  of  this  Act  and  then  subsisting 
shall  determine  ;  but  the  person  who  immediately 
before  the  date  at  which  the  right  would  so  have 
expired  was  the  owner  of  the  right  or  interest  shall 
be  entitled  at  his  option  either — 

(1)  on  giving   such    notice   as  hereinafter    mentioned,  to  an 

assignment  of  the  right  or  the  grant  of  a  similar 
interest  therein  for  the  remainder  of  the  term  of  the 
right  for  such  consideration  as,  failing  agreement, 
may  be  determined  by  arbitration ;  or 

(ii)  without  any  such  assignment  or  grant,  to  continue  to 
reproduce  or  perform  the  work  in  like  manner  as 
theretofore  subject  to  the  payment,  if  demanded  by 
the  author  within  three  years  after  the  date  at  which 
the  right  would  have  so  expired,  of  such  royalties  to 
the  author  as,  failing  agreement,  may  be  determined 
by  arbitration,  or,  where  the  work  is  incorporated 
in  a  collective  work  and  -the  owner  of  the  right  or 
interest  is  the  proprietor  of  that  collective  work, 
without  any  such  payment ; 

The  notice  above  referred  to  must  be  given  not 
more  than  one  year  nor  less  than  six  months  before 
the  date  at  which  the  right  would  have  so  expired, 
and  must  be  sent  by  registered  post  to  the  author, 
or,  if  he  cannot  with  reasonable  diligence  be  found, 
advertised  in  the  London  Gazette  and  in  two  I/>ndon 
newspapers  ; 

(b)  where  any  person  has,  before  the  twenty-sixth  day  of 
July,  nineteen  hundred  and  ten,  taken  any  action 
whereby  he  has  incurred  any  expenditure  or  liability 
in  connexion  with  the  reproduction  or  performance 
of  any  work  in  a  manner  which  at  the  time  was 
lawful,  or  for  the  purpose  of  or  with  a  view  to  the 
reproduction  or  performance  of  a  work  at  a  time 
when  such  reproduction  or  performance  would,  but 
for  the  passing  of  this  Act,  have  been  lawful,  nothing 
in  this  section  shall  diminish  or  prejudice  any  rights 
or  interest  arising  from  or  in  connexion  with  such 
action  which  are  subsisting  and  valuable  at  the  said 
date,  unless  the  person  who  by  virtue  of  this  section 
becomes  entitled  to  restrain  such  reproduction  or 
performance  agrees  to  pay  such  compensation  as, 
failing  agreement,  may  be  determined  by  arbitra- 
tion. 

(2)  For  the  purposes  of  this  section,  the  expression  "  author  " 
includes    the    legal     personal      representatives    of    a    deceased 
author. 

(3\    Subject   to   the   provisions   of   section   19,  sub-sections 
(/)   and  (<?)    and   of  section   33  of  this  Act,   copyright  shall  not 


Application  of 
Ac  to  British 
dominions. 


Legislative  powers 
of  self-governing 
dominions. 


236 

subsist  in  any  work  made  before  the  commencement  of  this  Act, 
otherwise  than  under,  and  in  accordance  with,  the  provisions 
of  this  section. 

Application  to  British  Possessions 

25.  (/)  This  Act,  except  such  of  the  provisions  thereof  as 
are  expressly    restricted  to  the   United    Kingdom,    shall   extend 

throughout  His  Majesty's  dominions  :  Provided  that  it  shall  not 
extend  to  a  self-governing  dominion  unless  declared  by  the 
Legislature  of  that  dominion  to  be  in  force  therein  cither  with- 
out any  modifications  or  additions,  or  with  such  modifications 
and  additions  relating  exclusively  to  procedure  and  remedies,  or 
necessary  to  adapt  this  Act  to  the  circumstances  of  the  dominion, 
as  may  be  enacted  by  such  Legislature. 

(2)  If  the  Secretary  of  State  certifies  by  notice  published 
in  the  London  Gazette  that  any  self-governing  dominion  has 
passed  legislation  under  which  works,  the  authors  whereof  were 
at  the 'date  of  the  making  of  the  works  British  subjects  resident 
elsewhere  than  in  the  dominion  or  (not  being  British  subjects) 
were  resident  in  the  parts  of  His  Majesty's  dominions  to  which 
this  Act  extends,  enjoy  within  the  dominion  rights  substantially 
indentical  with  those  conferred  by  this  Act,  then,  whilst  such 
legislation  continues  in  force,  the  dominion  shall,  for  the  pur- 
poses of  the  rights  conferred  by  this  Act,  be  treated  as  if  it  were 
a  dominion  to  which  this  Act  extends;  and  it  shall  be  lawful 
for  the  Secretary  of  State  to  give  such  a  certificate  as  aforesaid, 
notwithstanding  that  the  remedies  for  enforcing  the  rights,  or 
the  restrictions  on  the  importation  of  copies  of  works,  manufac- 
tured in  a  foreign  country,  under  the  law  of  the  dominion,  differ 
from  those  under  this  Act. 

26.  (/)  The  Legislature  of  any  self-governing  dominion  may, 
at  any  time,   repeal    all  or  any  ^of  the  enactments  relating   to 
copyright  passed  by  Parliament  (including   this  Act)    so   far  as 
they    are   operative   within   that    dominion  :    Provided   that   no 
such  repeal  shall  prejudicially  affect  any  legal  rights  existing  at 
the  time  of  the  repeal,  and  that,  on  this  Act  or  any  part  thereof 
being  so  repealed  by  the  Legislature  of  a  self-governing  domi- 
nion .  that  dominion  shall  cease  to  be  a  dominion  to  which  this 
Act  extends. 

(2)  In  any  self-governing  dominion  to  which  this  Act  does 
not  extend  the  enactments  repealed  by  this  Act  shall,  so  far  as 
they  are  operative  in  that  dominion,  continue  in  force  until 
repealed  by  the  Legislature  of  that  dominion 

(j)  Where  His  Majesty  in  Council  is  satisfied  that  the  law 
of  a  self-governing  dominion  to  which  this  Act  does  not  extend 
provides  adequate  protection  within  the  dominion  for  the  works 
(whether  published  or  Unpublished)  of  authors  who  at  the  time 
of  the  making  of  the  work  were  British  subjects  resident  else- 
where than  in  that  dominion,  His  Majesty  in  Council  may,  for 
the  purpose  of  giving  reciprocal  protection,  direct  that  this  Act, 
except  such  parts  (if  any)  thereof  as  may  be  specified  in  the 
Order,  and  subject  to  any  conditions  contained  therein,  shall, 


237 

within  the  parts  of  His  Majesty's  dominions  to  which  this  Act 
extends,  apply  to  works  the  authors  \\hereof  were,  at  the  time 
of  the  making  of  the  work,  resident  within  the  first-mentioned 
dominion,  and  to  works  first  published  in  that  dominion;  but 
save  as  provided  by  such  an  Order,  works  the  authors  whereof 
were  resident  in  a  dominion  to  which  tlds  Act  does  not  extend 
shall  not,  whether  they  are  British  subjects  or  not,  be  entitled 
to  any  protection  under  this  Act  except  such  protection  as  is  by 
this  Act  conferred  on  works  first  published  within  the  parts  of 
His  Majesty's  dominions  to  which  this  Act  extends  : 

Provided  that  no  such  Order  shall  confer  any  rights  within 
a  self-governing  dominion,  but  the  Governor  in  Council  of  any 
self-governing  dominion  to  which  this  Act  extends  may,  by 
Order,  confer  within  that  dominion  the  like  rights  as  His 
Majesty  in  Council  is,  under  the  foregoing  provisions  of  this  sub- 
section, authorised  to  confer  within  other  parts  of  His  Majesty's 
dominions. 

For  the  purposes  of  this  sub-section,  the  expression  "  a 
dominion  to  which  this  Act  extends"  includes  a  dominion  which 
is  for  the  purposes  of  this  Act  to  be  treated  as  if  it  were  a  domi- 
nion to  which  this  Act  extends. 

27.  The  Legislature  of  any  British  possession  to  which  this  Po^e:  °* 
Act  extends  may  modify  or  add  to  any  of  the  provisions  of  this  Brf 
Act  in  its  application  to  the  possession,  but,  except  so  far   as  to  pass 
such  modifications  and  additions  relate  to  procedure  and  reme-  supplemental 
dies,  they  shall  apply  only   to  works  the  authors  whereof  were,  legislation, 
at  the  time  ot  the  making  of  the  \\ork,  resident  in  the  possession, 

and  to  works  first  published  in  the  possession. 

28.  His  Majesty  may,  by  Order  in  Council,  extend  this  Act  Application  to 
to   any  territories  under  his  protection   and  to   Cyprus,  and,  on  Protect 

the  making  of  any  such  Order,  this  Act  shall,  subject  to  the 
provisions  of  the  Order,  have  effect  as  if  the  territories  to 
which  it  applies  or  Cyprus  were  part  of  His  Majesty's  dominions 
to  which  this  Act  extends. 


PART   II. 
INTERNATIONAL  COPYRIGHT. 

29.     (/)  His  Majesty  may,  by  Order  in  Council,  direct  that  Power  to  extend 
this  Act  (except  such  parts,  it  any,  thereof  as  may  be  specified  ^^  f< 
in  the  Order)  shall  apply— 

(a)  to  works  first  published  in   a  foreign  country  to  which 

the  Order  relates,  in  like  manner  as  if  they  were 
first  published  within  the  parts  of  His  Majesty's 
dominions  to  which  this  Act  extends  ; 

(b)  to  literary,  dramatic,  musical  and  artistic  works,  or  any 

class  thereof,  the  authors  whereof  were,  at  the  time 
of  the  making  of  the  works,  subjects  or  citizens 
of  a  foreign  country  to  which  the  Order  relates,  in 
like  manntr  as  if  the  authors  were  British  subjects; 

(c)  in  respect   of   residence  in  a  foreign   country  to  which 


238 

the  Order  relates,  in  like  manner  as  if  such  residence 
were  residence  in  the  parts  of  His  Majesty's  dominions 
to  which  this  Act  extends; 

and  thereupon,  subject  to  the   provisions  of  this   Part  of  this 
Act  and  of  the  Order,  this  Act  shall  apply  accordingly  : 
Provided  that — 

(i)  before  making  an  Order  in  Council  under  this  section 
in  respect  of  any  foreign  country  (other  than  a 
country  with  which  His  Majesty  has  entered  into  a 
convention  relating  to  copyright),  His  Majesty  shall 
be  satisfied  that  that  foreign  country  has  made,  or 
undertaken  to  make,  such  provisions,  if  any,  as  it 
appears  to  His  Majesty  expedient  to  require  for  the 
protection  of  works  entitled  to  copyright  under  the 
provisions  of  Part  I  of  this  Act ; 

(ii)  the  Order  in  Council  may  provide  that  the  term  of 
copyright  within  such  parts  of  His  Majesty's  domi- 
nions as  aforesaid  shall  not  exceed  that  conferred  by 
the  law  of  the  country  to  which  the  Order  relates ; 
(Hi)  the  provisions  of  this  Act  as  to  the  delivery  of  copies 
of  books  shall  not  apply  to  works  first  published  in 
such  country,  except  so  far  as  is  provided  by  the 
Order; 

(iv)  the  Order  in  Council  may  provide  that  the  enjoyment 
of  the  rights  conferred  by  this  Act  shall  be  subject 
to  the  accomplishment  of  such  conditions  and  for- 
malities (if  any)  as  may  be  prescribed  by  the  Order ; 

(v)  in  applying  the  provisions  of  this  Act  as  to  ownership 
of  copyright,  the  Order  in  Council  may  make  such 
modifications  as  appear  necessary  having  regard  to 
the  law  of  the  foreign  country  ; 

(vi)  in  applying  the  provisions  of  this  Act  as  to  existing 
works,  the  Order  in  Council  may  make  such  modifica- 
tions as  appear  necessary,  and  may  provide  that 
nothing  in  those  provisions  as  so  applied  shall  be 
construed  as  reviving  any  right  of  preventing  the 
production  or  importation  of  any  translation  in  any 
case  where  the  right  has  ceased  by  virtue  of  section 
49  &  50  vict,  c.  33.  5  of  the  International  Copyright  Act,  1886. 

(2)  An  Order  in  Council  under  this  section  may  extend  to 
all  the  several  countries  named  or  described  therein. 

Application  of  Part          30.     (/)  An  Order  in  Council  under  this  Part  of  this  Act 
British  shall  apply  to   all  His  Majesty's  dominions  to  which  this  Act 

extends  except  self-governing  dominions  and  any  other  posses- 
sions specified  in  the  Order  with  respect  to  which  it  appears  to 
His  Majesty  expedient  that  the  Order  should  not  apply. 

(2)  The  Governor  in  Council  of  any  self-governing  dominion 
to  which  this  Act  extends  may,  as  respects  that  dominion,  make 
the  like  Orders  as  under  this  Part  of  this  Act  His  Majesty  in 
Council  is  authorised  to  make  with  respect  to  His  Majesty's 
dominions  other  than  self-governing  dominions,  and  the  £rovi- 


239 

sions  of  this  Part  of  this  Act  shall,  with  the  necessary  modifica- 
tions, apply  accordingly. 

(j)  Where  it  appears  to  His  Majesty  expedient  to  except 
from  the  provisions  of  any  Order  any  part  of  his  dominions,  not 
being  a  self-governing  dominion,  it  shall  be  lawful  for  His 
Majesty  by  the  same  or  any  other  Order  in  Council  to  declare 
that  such  Order  and  this  Part  of  this  Act  shall  not,  and  the  same 
shall  not,  apply  to  such  part,  except  so  far  as  is  necessary  for 
preventing  any  prejudice  to  any  rights  acquired  previously  to 
the  date  of  such  Order. 


PART   III. 

SUPPLEMENTAL  PROVISIONS. 

31.  No  person  shall  be  entitled  to  copyright  or  any  similar  Abrogation  of 
right  in  any  literary,  dramatic,  musical,  or  artistic  work,  whether  common  law  rights. 
published  or  unpublished,  otherwise  than  under  and  in  accordance 

with  the  provisions  of  this  Act,  or  of  any  other  statutory  enact- 
ment for  the  time  being  in  force,  but  nothing  in  this  section 
shall  be  construed  as  abrogating  any  right  or  jurisdiction  to 
restrain  a  breach  of  trust  or  confidence. 

32.  (/)  His  Majesty  in  Council  may  make  Orders  for  alter-  Provisions  as  to 
ing,  revoking,   or  varying  any  Order  in  Council  made  under  this  Orders  in  Council. 
Act,  or  under  any  enactments  repealed  by  this   Act,  but  any 

Order  made  under  this  section  shall  not  affect  prejudicially  any 
rights  or  interests  acquired  or  accrued  at  the  date  when  the 
Order  comes  into  operation,  and  shall  provide  for  the  protection 
of  such  rights  and  interests. 

(2)  Bvery  Order  in  Council  made  under  this  Act  shall  be 
published  in  the  London  Gazette  and  shall  be  laid  before  both 
Houses  of  Parliament  as  soon  as  may  be  after  it  is  made,  and  shall 
have  effect  as  if  enacted  in  this  Act. 

33.  Nothing  in  this  Act  shall  deprive  any  of  the  universities  Saving  of 
and   colleges   mentioned   in   the   Copyright   Act,  1775,   of   any  University 
copyright  they  already  possess  under  that  Act,  but  the  remedies  c°pyrignt- 
and  penalties  for  infringement  of  any  such  copyright  shall  be  15  Geo.  3,  c.  53. 
under  this  Act  and  not  under  that  Act. 

34.  There  shall  continue  to  be  charged  on,  and  paid  out  of,  Saving  of 
the  Consolidated  Fund  of  the  United  Kingdom  such  annual  com-  compensation 
pensation  as  was  immediately  before  the  commencement  of  this  to  certam  libraries. 
Act  payable  in  pursuance  of  any  Act  as  compensation  to  a  library 

for  the  loss  of  the  right  to  receive  gratuitous  copies  of  books : 

Provided  that  this  compensation  shall  not  be  paid  to  a  library 
in  any  year,  unless  the  Treasury  are  satisfied  that  the  compensa- 
tion for  the  previous  year  has  been  applied  in  the  purchase  of 
books  for  the  use  of  and  to  be  preserved  in  the  library. 

35.  (/)  In  this  Act,  unless  the  context  otherwise  requires--  Interpretation. 
"Iviterary  work"  includes  maps,  charts,  ,plans,  tables,  and 

compilations  ; 

"  Dramatic  work"  includes  any  piece  for  recitation,  choreo- 
graphic work  or  entertainment  in  dumb  show,  the 
scenic  arrangement  or  acting  form  of  which  is  fixed  in 


240 

writing  or  otherwise;  and  any  cinematograph  produc- 
tion where  the  arrangement  or  acting  form  or  the 
combination  of  incidents  represented  give  the  work 
an  original  character; 

"  Artistic  work  "  includes  works  of  painting,  drawing, 
sculpture  and  artistic  craftsmanship  and  architectural 
works  of  art  and  engravings  and  photographs  ; 

"  Work  of  sculpture  "  includes  casts  and  models  ; 

"  Architectural  work  of  art  "  means  any  building  or  structure 
having  an  artistic  character  or  design,  in  respect  of 
such  character  or  design  or  any  model  for  such  build- 
ing or  structure,  provided  that  the  protection  afforded 
by  this  Act  shall  be  confined  to  the  artistic  character 
and  design,  and  shall  not  extend  to  processes  or 
methods  of  construction  ; 

"  Engravings  "  include  etchings,  lithographs,  wood-cuts 
prints,  and  other  similar  works,  not  being  photo- 
graphs ; 

"  Photograph  "  includes  photo-lithograph  and  any  work 
produced  by  any  process  analogous  to  photography  ; 

"  Cinematograph  "  includes  any  work  produced  by  any 
process  analogous  to  cinematography  ; 

';  Collective  work"  means— 

(a)  an  encyclopaedia,  dictionary,  year  book,    or  similar 

work  ; 

(b)  a  newspaper,  review,  magazine,  or  similar  periodical ; 

and 

(c)  any    work    written    in   distinct    parts    by    different 

authors,  or  in  which  works  or  parts  of  works   of 
different  authors  are  incorporated  ; 

"  Infringing,"  when  applied  to  a  copy  of  work  in  which 
copyright  subsists,  means  any  copy,  including  any 
colourable  imitation,  made  or  imported  in  contraven- 
tion of  the  provisions  of  this  Act ; 

;;  Performance  "    means    any    acoustic    representation  of   a 
.    work  and  any   visual  representation  of  any  dramatic 
action   in    a   work,    including   such    a  representation 
made  by  means  of  any  mechanical  instrument ; 

"  Delivery,"  in  relation  to  a  lecture,  includes  delivery  by 
means  of  any  mechanical  instrument ; 

"  Plate "  includes  any  stereotype  or  other  plate,  stone, 
block,  mould,  matrix,  transfer,  or  negative  used  or 
intended  to  be  used  for  printing  or  reproducing 
copies  of  any  work,  and  any  matrix  or  other  appliance 
by  which  records,  perforated  rolls  or  other  contrivances 
for  the  acoustic  representation  of  the  work  are  or  are 
intended  to  be  made  ; 

"  Lecture"  includes  address,  speech,  and  sermon; 

•'  Self-governing  dominion"  means  the  Dominion  of  Canada, 
the  Commonwealth  of  Australia,  the  Dominion  of 
New  Zealand,  the  Union  of  South  Africa,  and  New- 
foundland. 


241 

(2)  For  the  purposes  of  this  Act  (other  than  those  relating 
to  infringements  of  copyright),  a  work  shall  not  be  deemed  to 
be  published  or  performed  in  public,  and  a  lecture  shall  not  be 
deemed  to  be  delivered  in  public,  if  published,  performed  in 
public,  or  delivered  in  public,  without  the  consent  or  acquiescence 
of  the  author,  his  executors,  administrators  or  assigns. 

(j)  For  the  purposes  of  this  Act.  a  work  shall  be  deemed 
to  be  first  published  within  the  parts  of  His  Majesty's  dominions 
to  which  this  Act  extends,  notwithstanding  that  it  has  been 
published  simultaneously  in  some  other  place,  unless  the 
publication  in  such  parts  of  His  Majesty's  dominions  as  afore- 
said is  colourable  only  and  is  not  intended  to  satisfy  the  rea- 
sonable requirements  of  the  public,  and  a  work  shall  be  deemed 
to  be  published  simultaneously  in  two  places  if  the  time  between 
the  publication  in  one  such  place  and  the  publication  in  the 
other  place  does  not  exceed  fourteen  days,  or  such  longer  period 
as  may,  for  the  time  being,  be  fixed  by  Order  in  Council. 

(4)  Where,  in  the  case  of  an  unpublished  work,  the  making 
of  a  work  has  extended  over  a  considerable  period,  the  condi- 
tions of  this  Act  conferring  copyright  shall  be  deemed  to  have 
been   complied  with,  if  the  author  was,  during  any  substantial 
part  of  that  period,  a  British  subject  or  a  resident  within   the 
parts  of  His  Majesty's  dominions  to  which  this  Act  extends. 

(5)  For  the  purposes  of  the   provisions  of  this   Act  as   to 
residence,  an  author  of  a  work  shall  be  deemed  to  be  resident 
in   the   parts   of   His   Majesty's   dominions   to   which   this   Act 
extends  if  he  is  domiciled  within  any  such  part. 

36.  Subject  to  the  provisions  of  this  Act,  the  enactments  Repeal, 
mentioned   in   the   Second   Schedule   to   this    Act    are    hereby 
repealed   to   the  extent   specified  in  the   third  column  of  that 
schedule : 

Provided  that  this  repeal  shall  not  take  effect  in  any  part 
of  His  Majesty's  dominions  until  this  Act  comes  into  operation 
in  that  part. 

37.  (/)  This  Act  may  be  cited  as  the  Copyright  Act,  1911.     Short  title  and 

(2)  This  Act  shall  come  into  operation- 

(a)  in  the  United  Kingdom,    on  the  first  day  of  July, 

nineteen  hundred  and  twelve  or  such  earlier  date  as 

may  be  fixed  by  Order  in  Council ; 
(6)  in  a    self-governing    dominion    to    which    this    Act 

extends,    at    such    date  as   may   be   fixed   by   the 

Legislature  of  that  dominion ; 

(c)  in  the  Channel  Islands,  at  such  date  as  may  be  fixed 

by  the  States  of  those  Islands  respectively ; 

(d)  in  any  other  British   possession  to  which   this   Act 

extends,   on   the   proclamation    thereof   within   the 
possession  by  the  Governor. 


242 
SCHEDULES. 

FIRST   SCHEDULE. 
SECTION   24. 

EXISTING  RIGHTS. 


Existing  Right.  Substituted  Right. 


(a)  In  the  case  of  Works  other  than  Dramatic  and  Musical  Works. 
Copyright       ..  ..  ..    |   Copyright  as  denned  by  this  Act.* 

(6)  In  the  case  of  Musical  and  Dramatic  Works. 


Both  copyright  and  performing  right. 
Copyright,  but  not  performhig  right. 


Copyright  as  defined  by  this  Act.* 

Copyright  as  defined  by  this  Act, 
except  the  sole  right  to  perform 
the  work  or  any  substantial  part 
thereof  in  public. 

Performing  right,  but  not  copyright.  ;    The  sole  right  to  perform  the  work 

in  public,  but  none  of  the  other 
rights  comprised  in  copyright  as 
defined  by  this  Act. 


For  the  purposes  of  this  Schedule  the  following  expressions, 
where  used  in  the  first  column  thereof,  have  the  following  mean- 
ings :— 

"  Copyright,"  in  the  case  of  a  work  which  according  to 
the  law  in  force  immediately  before  the  commence- 
ment of  this  Act  has  not  been  published  before 
that  date  and  statutory  copyright  wherein  depends 
on  publication,  includes  the  right  at  common  law 
(if  any)  to  restrain  publication  or  other  dealing 
with  the  work ; 

"  Performing  right,"  in  the  case  of  a  work  which  has  not 
been  performed  in  public  before  the  commencement 
of  this  Act,  includes  the  right  at  common  law  (if 
any)  to  restrain  the  performance  thereof  in  public. 


*  In  the  case  of  an  essay,  article,  or  portion  forming  part  of  and  first 
published  in  a  review,  magazine,  or  other  periodical  or  work  of  a  like 
nature,  the  right  shall  be  subject  to  any  right  of  publishing  the  essay, 
article,  or  portion  in  a  separate  form  to  which  the  author  is  entitled  at  the 
commencement  of  this  Act,  or  would,  if  this  Act  had  not  been  passed,  have 
become  entitled  under  section  eighteen  of  the  Copyright  Act,  1842. 


243 


SECOND   SCHEDULE. 
ENACTMENTS  REPEALED. 


Section  36 


Session  and 
Chapter. 

Short  Title. 

Extent  of  Repeal. 

8  Geo.  2,  c.  13 

The  Engraving  Copyright  Act,  1734 

The  whole  Act. 

7  Geo.  3,  c.  38 

The  Engraving  Copyright  Act,  1767 

Ditto. 

15  Geo.  3,  c.  53 

The  Copyright  Act,  1775 

Ditto. 

17  Geo.  3,  c.  57 

The  Prints  Copyright  Act,  1777   .  . 

Ditto. 

54  Geo.  3,  c.  56 

The  Sculpture  Copyright  Act,  1814 

Ditto. 

3  &  4  Will.  4,  c. 

The  Dramatic  Copyright  Act,  1833 

Ditto. 

IS- 

5  &6  Will.  4,  c. 

The  Lectures  Copyright  Act,  1835 

Ditto. 

* 

6  &  7  Will.  4,  c. 

The  Prints  and  Engravings  Copy- 

Ditto. 

59- 

right  (Ireland)  Act,  1836. 

6&7  Will.  4,  c. 

The  Copyright  Act,  1836 

Ditto. 

no. 

5  &  6  Viet.,  c.  45 

The  Copyright  Act,  1842 

Ditto. 

7  &  8  Vict.,c.  12 

The  International  Copyright  Act, 

Ditto. 

1844. 

10  &  1  1  Viet.,  c. 

The  Colonial  Copyright  Act,  1847 

Ditto. 

95- 

15  &  16  Viet.,  c. 

The  International  Copyright  Act, 

Ditto. 

12. 

1852. 

25  &  26  Viet.,  c.    The  Fine  Arts  Copyright  Act,  1862 

Sections   one    to    six. 

68. 

In  section  eight  the 

words  "  and  pursu- 

ant to  any   Act   for 

the     protection      of 
copyright       engrav- 

ings," and   "  and  in 

any     such     Act     as 

aforesaid."           Sec- 

tions nine  to  twelve. 

38  &  39  Viet.',  c. 

The  International  Copyright  Act, 

The  whole  Act. 

12. 

1875, 

39  &40  Viet,,  c. 

The    Customs   Consolidation    Act, 

Section         forty-two. 

36. 

1876. 

from  "  Books  where- 

in" to  "  such  copy- 

right   will     expire." 

Sections    forty-four, 

forty  five     and     one 

hundred    and    fifty- 

two 

244 


Session  and 
Chapter. 


Short  Title. 


Extent  of  Repeal. 


45  &  46  Viet.,  c.  i  The  Copyright  (Musical  Composi-    The  whole  Act. 
40.  tions)  Act,  1882. 


49  &  50  Viet.,  c.     The  International  Copyright  ActT 

33-  ;     1886. 

51  &  52  Viet.,  c.    The  Copyright  (Musical  Composi- 
17. "  tions)  Act,  1888. 

52  &  53  Viet.,  c.  :  The  Revenue  Act,  1889 
42. 


6  Ed\v.  7,  c.  36       The  Musical  Copyright  Act,  1906 


Ditto. 
Ditto. 

Section  one,  from 
"Books  first  pub- 
lished "  to  "as  pro- 
vided in  that  sec- 
tion." 

In  section  three  the 
words  "  and  which 
has  been  registered 
in  accordance  with 
the  provisions  of  the 
Copyright  Act,  1842, 
or  of  the  Interna- 
tional Copyright  Act, 
1844,  which  registra- 
tion may  be  effected 
notwit  hstanding 
anything  in  the  In- 
ternational Copy- 
right Act,  1886." 


REPEAL  OF  ENACTMENTS, 
Section  15). 


Year.       No. 


1847 
1867 


XX 
XXV 


Short  Title, 

The  Indian  Copy-  ' 
right  Act,  1847.  I 

The  Press  and! 
Registration  of  ; 
Books  Act,  1867.  ; 


Extent  of  Repeal. 


1878 


VIII 


The  Sea  Customs 
Act,  1878 


So  much  as  has  not  already  been  re- 
pealed. 

In  section  18  the  following  words, 
namely: — "Every  registration  under 
this  section  shall,  upon  the  payment  of 
the  sum  of  two  rupees  to  the  office 
keeping  the  said  Catalogue,  be  deemed 
to  be  an  entry  in  the  Book  of  Registry 
kept  under  Act  No.  XX  of  1847  (for 
the  encouragement  of  learning  in  the 
territories  subject  to  the  government 
of  the  East  India  Company,  by  the  de- 
fining and  providing  for  the  enforce- 
ment of  the  right  called  copyright 
therein) ;  and  the  provisions  contained 
in  that  Act  as  to  the  said  Book  of 
Registry  shall  apply  mutatis  mutandis 
to  the  said  Catalogue." 

Clause  (a)  of  section  18. 


NOTIFICATION   No.  425  (Books),  Dated  the  i/th  November,  1914. 
THE  INDIAN  COPYRIGHT  REGULATIONS,  1914. 

In  exercise  of  the  powers  conferred  by  sections  3,14  and  19  of  the 
Copyright  Act,  1911,  as  modified  in  its  application  to  British  India  by  the 
Indian  Copyright  Act,  1914,  the  Governor-General  in  Council  is  pleased  to 
make  the  following  Regulations  : — 

Preliminary. 

Short    title    and  i.     (i)  These  Regulations  may  be  called  the  Indian 

application.  Copyright  Regulations,  1914. 

(2)  Regulations  i  to  n  apply  to  works  first  published  in  British  India 
and  to  records,  perforated  rolls  and  other  contrivances,  the  original  plate  of 
which  was  made  in  British  India,  and  regulations  12  to  19  apply  to  copies 
of  works  the  importation  of  copies  of  which  into  British  India  is  prohibited 
by  section  6  of  the  Indian  Copyright  Act,  1914. 

T   ,  ,    , .  2.     In  these  Regulations,  unless  there  is  anything 

repugnant  in  the  subject  or  context.— 

(1)  "  The  Act  "  means  the  Copyright  Act,  1911,  as  modified  in  its  appli- 
cation to  British  India  by  the  Indian  Copyright  Act,  1914. 

(2)  The  expression  '-book  or  other  printed  work"  means  every  part  of 
or  division  of  a  book,  pamphlet,  sheet  of  letter-press,  sheet  of  music,  map, 
plan,  chart  or  table  separately  published. 

(3)  "  Form  "  means  a  form  annexed  to  these  regulations. 

(4)  The  expression  «'  ow  er  of  the  copyright"  includes  the  duly  author- 
ized agent  of  such  owner. 

(S)  "  Section  "  means  a  section  of  the  Act. 

Royalties. 

Royalties  to  be  3.     (i)  Unless  otherwise  agreed,  royalties  shall  be 

ordinarily  payable  payable  by  means  of  adhesive  labels  purchased  from 
by  adhesive  labels,  the  owner  of  the  copyright. 

(2)  After  the  person  reproducing   a  work  referred  to  in  section   3  or 
o        i      f  i  v,  i        making  a  contrivance  referred  to  in  section  19  has  given 

the  notice  prescribed  by  these  Regulations  of  his  in- 
tention to  reproduce  the  work  or  to  make  or  sell  the  contrivance,  the  owner- 
of  the  copyright  shall,  if  the  royalty  is  payable  by  means  of  adhesive  labels, 
intimate  to  him,  by  registered  post,  some  reasonably  convenient  place 
within  British  India  from  which  adhesive  labels  can  be  obtained;  and  on 
demand  in  writing  and  tender  of  the  price,  shall  supply  from  such  place 
adhesive  labels  of  the  required  denominations  at  a  price  equal  to  the  amount 
of  royalty  represented  thereby. 

(3)  The  adhesive  label  supplied  as  aforesaid  shall  be  an  adhesive  paper 
T?          nf  1  "h  1         label,  square  in  shape,  the  design  to   be  entirely    en- 
closed within  a  circle  and  the  side  of  the  label  to  be 

greater  than  f  inch  in  length.  The  label  shall  not  bear  the  effigy  of  the 
Sovereign  or  any  other  person,  nor  any  word,  mark  or  design  such  as  to 
suggest  that  the  label  is  issued  by  or  under  the  authority  of  the  Government 
for  the  purpose  of  denoting  any  duty  payable  to  the  Government. 

Labels  to  be  af-  (4)  Subject  to  these  Regulations,    when  royalties 

fixed  to  copy  or  are  payable  by  means  of  adhesive  labels  no  copy  of  any 
contrivance  before  such  work  and  no  such  contrivance  shall  be  delivered 
delivery  to  purcha-  to  a  purchaser  until  such  label  or  labels  denoting  the 
ser.  amount  of  royalty  have  been  affixed  thereto  : 

Provide!  that  in  the  case  of  cylinders,  to  which  it  is  not  reasonably 
practicable  to  affix  the  labels,  the  requirements  of  this  regulation  shall  be 
deemed  to  be  fulfilled  if  such  label  or  labels  have  been  affixed  to  a  carton  or 
box  enclosing  the  cylinder. 


246 

Exception  in  cer-  4.     (i)    When  royalties  are  payable  by  means   of 

tain  cases  when  la-  adhesive  labels,  if  at  any  time  labels  of  the  required 
bels  not  available.  denomination  are  not  available  either  because— 

(a)  after  the  expiration  of  one  month  from  the  date  of  the  prescribed 

notice  referred  to  in  regulation  3  (2),  the  owner  of  the  copy- 
right has  not  duly  sent  to  the  person  reproducing  the  work  or 
making  the  contrivance,  as  the  case  may  be,  an  intimation  of 
some  reasonably  convenient  place  within  British  India  from 
which  such  labels  can  be  obtained  ;  or 

(b)  the  owner  of   the  copyright  refuses  or  neglects  to  supply  such 

labels  within  one  month  after  demand  duly  made, 

copies  of  the  work  or  the  contrivances,  as  the  case  may  be,  may  be  deli- 
vered to  purchasers  without  having  labels  affixed  thereto  as  required  by 
regulation  3  (4),  and  the  amount  of  royalties  shall  be  a  debt  due  from  the 
person  reproducing  the  work  or  making  the  contrivances,  as  the  case  may 
be,  to  the  owner  of  the  copyright,  and  the  person  aforesaid  shall  keep  an 
account  of  all  such  copies  or  contrivances  sold  by  him. 

(2)  For  the  purposes  of  this  regulation  "  the  date   of   the    prescribed 
notice  "  means — 

(i)  in  cases  where  the  notice  is  required  to  be  sent  by  registered  post, 

the  date  when  the  notice  would  in  ordinary  course  of  post  be 

delivered  ; 
(ii)  in  cases  where   the  notice  is  required   to  be  advertised  in  the 

Gazette  of  India  and  in  two  newspapers  published  in   British 

India,  the  date  of  such  advertisement,  or  of  the  latest  of  such 

advertisements. 

Payment  of  royal-  5.     Where  royalties  are  by  agreement  payable  in 

ties  when   payable  any  other  mode  than  by  means  of  adhesive  labels,  the 

otherwise  than  by  time  and  frequency  of  the  payment  shall  be  such  as 

adhesive  labels.  are  specified  in  the  agreement. 

Notices. 

Notice     required  6.     The  notice  required  by  section  3  shall  contain 

by  section  3.  the  following  particulars  : — 

(a)  the   name  and   address  of  the  person  intending  to  produce  the 

work, 

(b)  the    name  of  the   work  which  it  is  intended  to  produce  and  (if 

necessary)  a  description  sufficient  to  identify  it, 

(c)  the  manner  in  which  it  is  intended  to  reproduce  the  works  (e.g. 

whether  by  printing,  lithography,  photography,  etc.), 

(d)  the  price  or  prices  at  which  it  is  intended  to  publish  the  work, 

and 

(e)  the  earliest  date  at  which  any  of  the  copies  will  be  delivered  to 

a  purchaser, 

and  shall  be  sent  or  advertised  in  the  manner  provided  in  regulation  8  not 
less  than  one  month  before  any  copies  of  the  work  are  delivered  to  a  pur- 
chaser. 

Notice    required  7.     (i)  The  notice  required  by  section  19,  sub-sec- 

by  section  19(2).          tion  (2),  shall  contain  the  following  particulars  : — 

(a)  the  name  and  address  of  the  person  intending  to  make  the  con- 
trivances, 

(6)  the  name  of  the  musical  work  which  it  is  intended  to  reproduce 
and  of  the  author  (if  known)  and  (if  necessary)  a  description 
sufficient  to  identify  the  musical  work, 

(c)  the  class  of  contrivance  on  which  it  is  intended  to  reproduce  the 

musical  work  (e.g.  whether  discs,  cylinders  or  music  rolls), 

(d)  the   ordinary   retail  selling  prices  of  the  contrivances  and   the 

amount  of  the  royalty  payable  011  each  contrivance  in  respect 
of  the  musical  work, 

(e)  the  earliest  date  at  which  any  of  the  contrivances  will  be  delivered 

to  a  purchaser,  and 
(/)  whether  any  other  work  is  to  be  reproduced  on  the  same  contriv- 


247 

ance  with  the  musical  work  specified  in  accordance  with  para- 
graph (&), 

and  shall  be  sent  or  advertised  in  the  manner  provided  in  regulation  8  not 
less  than  one  month  before  any  contrivances  on  which  the  musical  work  is 
reproduced  are  delivered  to  a  purchaser  : 

Provided  that  any  number  of  musical  works  may  be  included  in  the 
same  advertisement, 

(2)  In  cases  where  royalties  are  payable  on  contrivances  made  before 
the  3oth  day  of  October  1912,  being  the  commencement  in    British  India 
of  the  Copyright  Act,  1911,  the  person  miking  such  contrivances  may  give 
notice  of  his  intention  to  s?ll  them,  containing  mutatis  mutandis  the  same 
particulars  and  given  in  the  same  manner  as  is  prescribed  by  these  Regula- 
tions in  the  case  of  the  notice  required  by  section  19,  sub-section  (2). 

(3)  The  ordinary  retail  selling  price  of    any  contrivance    shall  be  cal- 
culated at  the  marked  or  catalogued  selling  price  of  single  copies  to  the 
public  or,  if    there  is  no  such  marked  or  catalogued  selling  price  at  the 
highest  price  at  which  single  copies  are  ordinarily  sold  to  the  public  :  and 
one  half  anna  shall  be  deemed  to  be  the  equivalent  of  one  half  penny  and 
ore  quarter  anna  of  one  farthing. 

Service   and    ad-  8.     The  notices  referred  to  in  the  two  last  foregoing 

vertisement  of  no-  regulations  shall  be  sent  by  registered  post  or  advertised 
tices-  as  follows  : — 

(a)  if  the  name  and  an  address  within  British  India  of  the  owner  of 

the  copyright  are  known  or  can  with  reasonable  diligence  be 
ascertained,  the  notice  shall  be  sent  to  him  at  such  address ; 

(b)  if  such  name  and  address  are  not  known  and  cannot  with  reason- 

able diligence  be  ascertained  the  notice  shall  be  advertised  in 

the  Gazette  of  India  and  in  two  newspapers  published  in  British 

India  ;  such  advertisements  shall  give  the  particulars  required  by  paragraphs 

(a)  and  (b)  of  regulation  6  or  regulation  7,  as  the  case  may  be,  and  shall 

also  state  an  address  from  which  a  copy  of  the  notice  may  be  obtained. 

Inquiries. 

9.     The   inquiries  referred   to  in  section    19,   sub-section  (5),  shall   be 
Innuiries  referred     directed  to  the  owner  of  the  copyright  by  name  or  (if 
his  name  is  not  known  and  cannot  with  reasonable 
9  (S)'     diligence  be  ascertained)  in  general  terms  to  "  the  own- 
er of  the  copyright "  of  the  musical  work  in  respect  of  which  the  inquiries 
are  made,  and  shall  contain — 

(a)  a  statement  of  the  name  of  the  musical  work  in  respect  of  which 

the  inquiries  are  made  and  of  the  author  (if  known)  and  (if 
necessary)  a  description  sufficient  to  identify  it ; 

(b)  a  statement  of  the  name,  address  and  occupation  of  the  person 

making  the  inquiries; 

(c)  an  allegation  that  a  contrivance  has  previously  been  made   by 

means  of  which  the  musical  work  may  be  mechanically  per- 
formed, with  the  trade  name  (if  known)  and  a  description  of 
such  contrivance ;  and 

(d)  an  inquiry  whether  the  contrivance  so  described  was  made  with 

the  consent  or  acquiescence  of  the  owner  of  the  copyright. 

Service   and   ad-  10.     The  inquiries  shall  be  sent  by  registered  post 

vertisement  of  in-     or  advertised  as  follows  : — 
quiries. 

(a)  if  an  address  within  British  India  of  the  owner  of  the  copyright 

is  known  or  can  with  reasonable  diligence  be  ascertained,  the 
inquiries  shall  be  sent  to  such  address  ;  or 

(b)  if  such  address  is  not  known  and  cannot  with  reasonable  diligence 

be  ascertained,  the  inquiries  shall  be  advertised  in  the  Gazette 
of  India  and  in  two  newspapers  published  in  British  India. 
Prescribed    time  1 1 .     The  prescribed  time  for  reply  to  such  inquiries 

for  reply  to  inqui-     shall  be — 


248 

(a)  in  cases  where  the  inquiries  are  required  to  be  sent  by  registered 
post,  one  month  after  the  date  when  the  inquiries  would  in 
ordinary  course  of  post  be  delivered  ; 

(6)  in  cases  where  the  inquiries  are  required  to  be  advertised  in  the 
Gazette  of  India  and  in  two  newspapers  published  in  British 
India,  one  month  after  the  date  of  such  advertisement  or  of 
the  latest  of  such  advertisements. 

Importation  of  Copies, 

12.  The  notice  to  be  given  to  the  Chief  Customs  officer  under  section 

6  of  the  Indian  Copyright  Act,  1914,  requesting  that 

;     copies  of  any  book  or  other  printed  work  printed  or 

of    books  or  other     reprinted  out  of  British  India,  shall  not  be  imported 

into  British  India,  shall  be  in  Form  No.  i  or  as  near 

thereto  as  circumstances  permit. 

13.  The  notice  to  be  given  to  the  Chief  Customs  officer  under  section  6 
XT    ..        .  of   the  Indian   Copyright  Act,    1914,   requesting   that 
Notice    in    case  ies   of  any  work  made  out  of  British  India  other 

than  a  book  or  other  printed  work,  shall  not  be  import- 
ed into  British  India,  shall  be  either  in  Form  No.  2,  or  in  Form  No.  5,  or 
as  near  thereto  as  circumstances  permit. 

14.  Any  notice  given  under  section    14,  sub-section  (i),  of  the  Copy- 

•D  -4--  v,     right  Act,  1911,  to  the  Commissioners  of  Customs  and 

j\  to  .Briti!        3xcise  of  the  United  Kingdom,  and  communicated  by 

'    that  authority  through  the  Governor-General  in  Coun- 

tles>  cil    or   the   Local   Government  to  the   Chief  Customs 

officer,  shall  be  deemed  to  have  been  given  to  such  officer  by  the  owner  of 

the  copyright. 

15.  Before  any  article  is  detained  as  a  copy  of  a  work  to  which  any 
_,       .       «   ,  such  notice  as  aforesaid  applies  or  any  further  pro- 
*                    Drma-     ceedings  with  a  view  to  the  confiscation  thereof  under 

tion  and  affidavu.       thfi  ^  relating  to  the  Customs  are  taken,  the  Chief 
Customs  officer  may  require  the  owner  of  the  cop/right — 

(a)  to  give  him  in  writing  such  further  information  as  such  officer  may 
consider  necessary  to  satisfy  himself  that  the  article  in  question 
is  liable  to  detention  and  confiscation,  and  such  person  shall  be 
bound  to  give  such  information  accordingly,  and 

(6)  to  verify  the  information  contained  in  the  notice  or  given  under 
clause  (a)  by  an  affidavit. 

1 6.  Whenever   any    goods   are  detained   in   pursuance  of  a  notice  in 

Form  No.  3,  the  Chief  Customs  officer  may  require  the 
owner  of  the  copyright  to  deposit  with  him  as  security 
a  sum  of  money  sufficient,  in  the  opinion  of  such  officer,  to  cover  any  ex- 
penses which  may  be  incurred  in  the  examination  required  by  reason  of  the 
notice. 

Undertaking  17.     Whenever  any  goods  are  detained  in  pursuance 

to    reimburse    and     of  any  notice  given  under  these  Regulations,  the  Chief 
security  bond.  Customs  officer  may  require  the  owner  of  the  copy- 

right— 

(a)  to  give  an  undertaking  in  writing  to  reimburse  the  Secretary  of 

Stat  e  for  India  in  Council  all  expenses  and  damages  incurred 
in  respect  of  the  detention  and  of  any  proceedings  for  confisca- 
tion subsequently  taken,  if  such  an  undertaking  has  not  already 
been  given,  and 

(b)  within  four  days  after  the  detention  to  enter  into  a  bond  for  such 

reimbursement,  with  two  approved  sureties,  in  such  form  and 
for  such  amount  as  the  Chief  Customs  officer  may  require  ; 

Provided  that,  on  the  completion  of  such  bond,  any  money  previously 
deposited  under  regulation  16  shall  be  returned. 

1 8      If  upon  the  examination  of  goods  detained  under  these  Regula- 

Deliverv    f        d      tions,  the  Chief  Customs  officer  is  satisfied  that  there 

detained  '     is  no  ground  for  their  detention,  he  may  order  them  to 

be  delivered. 


249 

19.     Any  notice  in  regard  to  any  book  in  which  copyright  subsisted  on 

the  24th  February  1914,  which  was  given  to  and  accept- 

ider  sec-     ed  by  tfae  chief  Customs  Authority  on  or  before  that 

tion  is,  A  11,     date  under  section  Ig   (a)  of  the   Sea   Customs  Act, 

1878,  shall,  so  long  as  the  copyright  subsists,  be  treated 

as  a  notice  given  under  section  6  of  the  Indian  Copyright  Act,   1914,  unless 
the  notice  is  withdrawn  or  superseded  ; 

Provided  that  the  Chief  Customs  officer  may  require  the  owner  of  the 
copyright  to  give  a  fresh  notice  in  accordance  with  these  Regulations,  or  to 
comply  with  any  of  the  provisions  of  these  Regulations,  regarding  further 
information,  verification,  or  security;  and  from  such  date  as  the  Chief 
Customs  officer  may,  by  such  requisition,  fix  in  this  behalf,  the  notice  given 
under  section  18  (a)  of  the  Sea  Customs  Act,  1878,  shall  be  deemed  void  and 
of  no  effect. 


FORM    NO.    i. 

NOTICE. 

RELATING  TO  IMPORTATION  OF  COPYRIGHT  BOOKS  AND  OTHER  PRINTED 
WORKS. 
To  THE  CHIEF  CUSTOMS  OFFICER, 


I of. 


hereby  give  you  notice  that  copyright  in  the  original  work  (i) 

mentioned    in    the    Schedule    hereto    now    subsists   under   the   Copyright 
Act,   1911,  as  modified  by  the  Indian   Copyright  Act,    1914,   and  that  (2) 

the  owner  of  the  copyright  in  the  said  work  (i) 

and  that  (3) desirous  that  copies  of  the  said  work 

(i) printed  or  reprinted    out  of  British  India,  shall  not  be  im- 
ported into  British  India. 

Dated  this day  of .19    . 

(Signature) 


(4) 

Schedule. 


Title  of  book  (5) 

Description  of  printed  work,  if  not  a  book. 
Full  name  of  author  or  authors 


Whether  author  or  authors  alive,  if  not,  date  of  death 
When  and  where  (6)  book  or  printed  work  first  published- 


1 i )  or  works. 

(2)  If  notice  is  given  by  the  owner  insert  "  I  am."     If  given  by  an  agent 
insert  the  name  of  owner  and  the  word  '«  is." 

(3)  "I  am  "  or  <•  he  is." 

(4)  If  an  agent  insert  "  Agent  of  owner." 

(5)  The  notice  may   apply  to   a  number  of  books  or  printed  works  in 
which  case  the  particulars  in  the  Schedule  must  be  given  as  respects  each 
book  or  printed  work. 

(6)  It  is  sufficient  to  state  the  country  of  first  publication. 

Note. — Where  advantage  has  been  taken  of  the  provisions  of  the  Copy- 
right Act,  1911,  as  modified  by  the  Indian  Copyright  Act,  1914,  as  to 
simultaneous  publication  the  date  and  place  stated  should  be  those  which 
entitle  the  work  to  Copyright  in  British  India. 

32 


250 
FORM   NO.   2. 

NOTICE. 

RELATING  TO  IMPORTATION  OF  COPYRIGHT  WORKS,  OTHER  THAN  BOOKS 
OR  OTHER  PRINTED  WORKS. 

To  THE  CHIEF  CUSTOMS  OFFICER. 


of        

hereby  give  you  notice  that  copyright  in  the  original  work  mentioned 
in  the  Schedule  hereto  now  subsists  under  the  Copyright  Act,  1911,  as 
modified  by  the  Indian  Copyright  Act,  1914,  and  that  (i) — 

the  owner  of  the  copyright  in  the  said  work, 

and  that  (2) desirous  that  copies  of  the  said  work  made 

out  of  British  India,  shall  not  be  imported  into  British  India. 

Dated  the__  _day  of  19     • 

(Signature) — 

(3)— 


Schedule. 


Title  of  work  (if  any) 

Full  description  of  work 

Initials  or  marks  (if  any)  usually  placed  on  copies  of  work. 
Full  name  of  author  or  authors 


Whether  author  or  authors  alive,  if  not,  date  of  death 
When  and  where  (4)  work  first  published  — 
If  work  not  published — 

Whether  author  British  subject  or  not 


If  not  a  British  subject,  name  of  country  in  which  author  was  a  resident 
or  domiciled  at  date  of  the  making  of  work 

In  the  case  of  photographs,  phonographic  records  and  music  rolls,  date 
of  making  the  original  negative  or  original  plate 

(1)  If  notice  given  by  the  owner  insert  "  I  am."     If  given  by  an  agent 
insert  name  of  owner  and  the  word  "  is  " 

(2)  "  I  am"  or  "  he  is." 

(3)  If  an  agent  insert  "  Agent  of  owner." 

(4)  It  is  sufficient  to  state  the  country  of  the  first  publication. 

(Note.— Where  advantage  has  been  taken  of  the  provisions  of  the  Copy- 
right Act,  1911.  as  modified  by  the  Indian  Copyright  Act,  1914,  as  to 
simultaneous  publication,  the  date  and  place  stated  should  be  those  which 
entitle  the  work  to  copyright  in  British  India.) 


FORM   NO.    3. 

NOTICE. 

RELATING  TO  A  PARTICULAR  IMPORTATION. 
To  THE  CHIEF  CUSTOMS  OFFICER, 


of. 


hereby  give  you  notice  that  I  am  the  owner  (i). 


-ot  the  copyright  in  a  certain  original  work  as  to 


( i )  or  agent  for  the  owner. 


251 

which  copyright  now  subsists  under  the  Copyright  Act,  1911,  as  modified  by 
the  Indian  Copyright  Act,  1914,  and  that  the  undermentioned  goods,  that 
is  to  say,  (i) — : 


are  about  to  be  imported  into  British  India  through  the  port  of 

on  or  about  the 

day  of_ 


.next  in  the  (2)- 


from 


That  such  goods  are  liable  to  detention  and  confiscation  as  being  (3) 


And  I  request  that  the  said  goods  may  be  detained  and  dealt  with 
accordingly. 

And  I  hereby  undertake  to  reimburse  the  Secretary  of  State  for  India 
in  Council  all  expenses  and  damages  to  be  incurred  in  respect  of  the  deten- 
tion, and  of  any  proceedings  for  confiscation  which  may  be  subsequently 
taken. 


Dated  this 


—day  of 


(Signature) 


(4) 


(1)  Describe  the  goods,  number  of  packages,  marks  used,  and  any  other 
particulars  necessary  for  their  identification. 

(2)  Describe  the  ship  and  give  name  or  indication. 

(3)  State  if  the  goods  are  copies  of  the  original  work  made  out  of  British 
India,  or  how  otherwise  the  goods  are  liable  to  detention  and  confiscation. 

(4)  If  an  agent  insert  "  Agent  of  owner." 


LECTURE   VII. 
THE  LAW  OF  COPYRIGHT — (continued). 

As  alreadY  stated  the  Consolidating  Act  of  1911 
the  Indian  Act.       which  the  Indian  Act  (Act  III  of  1914)  adopts  with 
a  few   necessary   additions  and   alterations,    mainly 
as    to    procedure/    repeals    about    twenty   different 
statutes  covering  different  branches  of  copyright  law. 
It  does  not  follow  that  the  decisions  under  the  repealed 
Acts  have  become  unserviceable.     Not  only  is  there 
referred  to  for  ample  room  f or  reference  to  the  old  decisions,  but  in 

newstatutT of  the  certain  cases  tneY  are  essential  for  the  purpose  of 
understanding  the  law  as  it  stands.  In  this  connec- 
tion, it  is  useful  to  remember  the  well-known  and  oft- 
quoted  dictum  of  Mr.  Justice  Blackburn  in  the  M evsey 
Dock  Case?  fc  Where  an  Act  of  Parliament  has  re- 
ceived a  judicial  construction  putting  a  certain  mean- 
ing on  its  words,  and  the  Legislature  in  a  subsequent 
Act  in  pan  materia  uses  the  same  words,  there  is  a  pre- 
sumption that  the  Legislature  used  those  words  intend- 
ing to  express  the  meaning  which  it  knew  had  been 
put  upon  the  same  words  before ;  and,  unless  there  is 
something  to  rebut  the  presumption,  the  Act  should 
be  so  construed,  even  if  the  words  were  such  that  they 
might  originally  have  been  construed  otherwise." 
There  are  some  things  which  the  Act  does  not  expressly 
provide  for,  there  are  others  which  appear  doubtful ; 
and  in  all  these  matters  the  help  derived  from  the 
decided  cases  is  invaluable,  and  must  be  sought  for 
purposes  of  accurate  understanding  and  exposition. 

originality.  Take,  for  instance,  the  question  of  originality. 

Not  every  production  can  claim  copyright.  In  order 
to  acquire  cop37-right  it  is  necessary  that  the  work 
should  be  original.  Section  I,  schedule  I,  of  the  In- 
dian Copyright  Act  provides  inter  alia  that  copyright 
shall  subsist  throughout  the  parts  of  His  Majesty's 
dominions  to  which  the  Act  extends,  in  every  original 


1  The  Indian  Copyright  Act  (Act  III  of  1914)   consists  of  15  Sections, 
which  indicate  the  necessary  additions  and  modifications,  and  two  schedules, 
of  which   the  first  schedule  sets  out  the  Act  of  1911  (i  &  2  Geo.  V.c.  46) 
with  the  exception  of  a  few  sections. 

2  ii  H.L.C.  at  p.  480. 


253 

literary,  dramatic,  musical  and  artistic  work  if,  in  the 
case  of  a  published  work,  the  work  was  first  published 
within  the  parts  of  His  Majesty's  dominions  above 
referred  to  and,  in  the  case  of  an  unpublished  work,  the 
author  was  at  the  date  of  making  the  work  a  British 
subject  resident  within  such  parts  of  His  Majesty's 
dominions  as  aforesaid.  The  Copyright  Act  says 
nothing  as  to  what  is  to  be  understood  by  ( original- 
ity/ We  have  to  look  into  the  decided  cases  for  light 
on  this  subject.  A  literary  work  of  an  original  charac- 
ter has  been  defined  in  Spiers  v.  Brown  as  "  being  a 
work  of  imagination  or  invention  on  the  part  of  the 
author,  or  original  in  respect  of  its  being  a  work  treat- 
ing of  a  subject  common  to  mankind,  such  as  history 
or  other  branches  of  knowledge,  varying  much  in  their 
mode  of  treatment  in  which  the  hand  of  the  artist 
will  be  readily  discerned."1  In  that  case,  a  compiler 
of  a  dictionary  was  held  to  have  used  another,  but 
to  have  bestowed  such  individual  effort  and  independ- 
ent labour  upon  it  as  to  make  it  'original'  within  the 
meaning  of  the  law.  The  defendant  had  struck  out 
an  enormous  quantity  of  the  plaintiff's  meanings. 
It  was  held  that  the  mere  striking  out  of  a  certain 
quantity  of  the  plaintiff's  words  would  not  necessarily 
make  it  original.  If  that  was  all  he  had  done,  a  case 
of  piracy  would  perhaps  have  been  made  out.  But 
it  was  found  that  the  defendant  had  bestowed  mental 
work  upon  the  compilation  sufficient  in  the  eye  of  law 
to  make  the  work  his  own.  In  Dicks  v.  Yates 2  the 
same  point  arose,  though  in  another  form,  and  the 
judgment  put  the  subject  in  afresh  light.  "The 
matter  must  be  original,  it  must  be  a  composition 
of  the  author,  something  which  has  grown  up  in  his 
mind,  the  product  of  something  which,  if  it  were 
applied  to  patent  rights,  would  be  called  '  invention.' ' 
Originality,  or  for  that  matter,  novelty  must  not  be 

1  Spiers  v.    Brown  (1858)  6  W.R.  352  ;  per  Wood  V.C.  "  Literary  work," 
under  the  present  Act,  "includes  maps,  charts,  plans,   tables  and  compila- 
tions."    (Sch.  I,  sec.  35.)     In  University  of  London  Press  Ltd.  v.  University 
Tutorial   Press  Ltd.   (1916)  L.R.  2  Ch   601,  it  has  been   held  that  papers  set 
by  examiners  are  '  original  literary  work  '  within  the  meaning  of  the  Copy- 
right Act."     This   case  is  also  of  assistance  on    another   point;    it  explains 
under    what   circumstances  an    author  may   be   regarded   as  being  •*  in  the 
employment  of  some  other  person  under  a  contract  of  service,"  within  the 
meaning  of  Section  5,  sub-section  (i)  (6). 

2  18  Ch.  D.  76  at  p.  92. 


254 


'  Originality  '  or 
'  novelty'  must 
not  be  understood 
in  too  strict  a 
sense. 


understood,  however,  in  too  strict  a  sense.  If  a 
strict  standard  is  applied,  hardly  anything  can  be 
called  absolutely  new  or  original  in  literature,  art,  or 
artistic  craftmanship.  Every  age  inherits  the  acquisi- 
tion of  its  predecessor  or  predecessors.  (C  Knowledge 
grows  from  more  to  more,"  to  be  sure.  But  that  does 
not  mean  that  every  addition  to  our  knowledge  must 
consist  of  an  item  entirely  new,  and  unknown  to  the 
past.  The  majority  of  intellectual  and  artistic  pro- 
ductions is  obtained  by  an  employment  of  the  materi- 
als already  at  our  disposal,  and  the  skill  and  original- 
ity of  the  author  consists  in  utilising  materials  access- 
ible to  all  and  casting  them,  as  it  were,  into  a  new 
mould.  Thus  he  imposes  a  new  form  on  old  materials 
and  sends  forth  his  creation  to  the  world  with  the 
stamp  of  his  own  mind  on  it.  Should  any  one  after- 
wards slavishly  copy  it,  he  would  at  once  be  open  to 
the  charge  of  piracy  or  plagiarism.  It  is  then  and 
then  only  that  the  right  of  the  author  is  infringed. 
Looked  at  in  this  light,  originality  or  novelty  appears 
to  have  a  wider  denotation.  Thus  we  find  that  even 
a  street  directory  may  be  the  subject-matter  of  copy- 
right. In  the  case  of  Kelly  v.  Morris1  it  was  found 
that  the  Imperial  Directory  of  London  was  a  copy 
of  the  Post  Office  London  Directory,  in  as  much  as  it 
had  involved  no  independent  labour  or  research. 
"In  the  case  of  a  dictionary,  map,2  guide  book,  or 
directory,  when  there  are  certain  common  objects  of 
information,  which  must,  if  described  correctly,  be 
described  in  the  same  words,  a  subsequent  compiler  is 
bound  to  set  about  doing  for  himself  that  which  the 
first  compiler  has  done.  In  case  of  a  road-book,  he 
must  count  the  mile-stones  himself.  In  the  case  of 
a  map  of  a  newly  discovered  island,  he  must  go  through 
the  whole  process  of  triangulation,  just  as  if  he  had 
never  seen  any  former  map,  and,  generally,  he  is  not 
entitled  to  take  one  word  of  the  information  previously 
published  without  independently  working  out  the 
matter  for  himself,  so  as  to  arrive  at  the  same  result  from 
the  same  common  sources  of  information,  and  the  only 
use  that  he  can  legitimately  make  of  a  previous  publi- 


l   (1866)  I,.R,  i  Eq.  697. 

'2  Maps,  tables,  charts  and  plans  are  protected  as  literary  works. 
Sch.  I,  sec.  35  (i). 


255 

cation  is  to  verify  his  own  calculations  and  results  when 
obtained."  l  It  must  be  observed  that  mere  likeness 
or  resemblance  in  the  results  obtained  does  not  neces-  Mere  likeness  or 
sarily  show  that  the  one  has  been  copied  from  the.  S^SSSS 
other.  There  may  be  accidental  coincidence,  spe-  infringement. 
cially  having  regard  to  the  fact  that  the  same  materials 
may  be  available  to  both.  Where  authors  have  writ- 
ten upon  the  same  subject,  and  have  derived  their 
information  from  common  sources,  it  is  necessary  in 
order  to  prove  infringement  to  show  that  substantial 
passages  from  the  plaintiff's  work  have  been  actually 
copied,  or  copied  with  mere  colourable  alterations.2 
The  case  of  Gangabishwn  Srikisondas  v.  Moreshwar 
Bapuji  Hegishthe  and  others  ;l  illustrates  very  clearly 
what  constitutes  piracy  and  what  not.  In  that  case, 
the  plaintiff  a  book-seller  brought  out  a  new  and  an- 
notated edition  of  a  certain  well-known  Sanskrit  work 
on  religious  observances  entitled  "Vritraj"  having 
for  the  purpose  obtained  the  assistance  of  Pundits, 
who  recast  and  re-arranged  the  work,  introduced  vari- 
ous passages  from  other  old  Sanskrit  books  on  the  same 
subject  and  added  footnotes.  The  defendants  printed 


1  Kelly  v.  Morris  (1866)  L.R.  i   Eq.  697  at  p.   701-2.     The  same  idea  is 
expressed  in  another  judgment  thus  : —  "  Whilst  all  are  entitled  to  resort 
to  common  sources  of  information,  none  are  entitled  to  save  themselves 
trouble  and  expense,  by  availing  themselves,  for  their  own  profit,  of  other 
men's   works,  still   subject   to   copyright  and  entitled  to  protection"   Per 
Langdale  M.R.  in  Lewis  v.  Fullerton(iS^)  2  Beav.  6 at  p.  8,  s  c.  48  Eng.  Rep. 
p.  1080.     In  Scott  v.  Stanford  statistical  returns  formed  the  subject-matter  of 
the  alleged  infringement.     It  was  held  that  having   regard  to  the   quantity 
and  matter  of  the  informaton  which  had  been  taken  and  republished  without 
the  exercise  of  any  independent   thought  and  labour  and  the  prejudice  to 
the  plaintiff  in  having  the  sale  of  his  work  superseded  by  this  re-publication 
in  a  cheap  form  of  his  labours,   he  was  entitled  to  an   injunction.     "Mere 
honest   intention,"  said   Sir   W.    Page    Wood  V.C. ,  "  on    the    part  of  the 
appropriator  will  not  suffice,  as  the  court  can  only  look  at  the  result  and 
not  the  intention  in  the  man's  mind  at  the  time  of  doing  the  act  complained 
of,  and  he  must  be  presumed  to  intend  all  that  the  publication  of  his  work 
effects  (Scott  v.  Stanford  L  R.  3  Eq.    p.    718,  at  p.   723).     See  also  in  this 
connection  Morris  v.  Ashbee  (L.R.  7  Eq.  34)  concerning  copyright  in  paid- 
for  insertion  in  a  Directory ;  Cox.  v.  Land  6-  Water  Journal  Co.  (L.R.  9  Eq. 
324)  concerning  copyright  in  contents  of  newspapers ;  H.  Blacklock  &  Co. ,  Ltd. 
v.  Arthur  Pearson  Ltd.   (1915)  L.R.    2  Ch.  376,    concerning  compilation  of 
current   timetables  of  Railways;    Cobbett  v.   Woodward  (L.R.    14  Eq.  407) 
concerning  copyright  in  descriptive    advertisements  ;   Lawrence  v.   Bushnell 
I.L.R.  35  Cal.  463,  s.c.  12  C.W.N.  753,  concerning  copyright  in  illustrations 
contained  in  a  catalogue;   Grace,  v.  Newman  (L.R.    19  Eq.  623}   concerning 
copyright  in  a  book  of  designs  in  the  nature  of  an  advertising  catalogue  ; 
also   Petty  v.  Taylor  (1897)  I  Ch.  465   in  which  Grace  v.  Newman  was  distin- 
guished. 

2  Pike  v.  Nicholas    (1869)  5  Ch.  App.  251.     See  also  Jarold  v.  Houlston 
(1857)  3  K.  &  J.  708;  s.c.  69  Eng.  Rep.  1294. 

s  I.L.R.  13  Bom.  358. 


256 


New  arrangement 
of  old  matter  can 
make  a  work 

'  original.' 


Walter  v.  Lane. 


and  published  an  edition  of  the  same  work,  the  text 
which  was  identical  with  that  of  the  plaintiff's  work 
and  which,  moreover,  contained  the  same  additional 
passages  and  the  same  footnotes,  at  the  same  places, 
with  many  slight  differences.  The  plaintiff  asked  for 
an  injunction  alleging  that  his  copyright  had  been 
infringed.  It  was  held  that  the  plaintiff's  work  was 
such  a  new  arrangement  of  old  matter  as  to  be  an 
original  work  and,  therefore,  entitled  to  protection; 
that  the  defendants  had  not  gone  to  independent 
sources  for  their  material  but  had  simply  appropriated 
the  labour  and  industry  of  a  previous  compiler  (the 
plaintiff)  who  had  an  existing  copyright  therein,  and 
they  had,  therefore,  pirated  the  plaintiff's  work,  and 
must  be  restrained  by  injunction.  Where,  however, 
there  is  no  original  matter  in  the  work  alleged  to  be 
copied,  the  strongest  evidence  of  servile  imitation 
and  piracy  must  be  afforded  before  an  action  for  an 
infringement  of  copyright  can  be  successful. [ 

The  case  of  Walter  v.  Lane*  which  went  up  to 
the  House  of  Lords  elucidates  the  notion  of  originality, 
as  understood  by  the  law,  in  a  very  striking  manner. 
The  defendant  in  that  case  published  a  book  entitled 
"  Appreciations  and  Addresses  delivered  by  Lord  Rose- 
bery."  It  contained  practically  verbatim  copies  of  the 
reports  of  five  speeches  delivered  by  Lord  Rosebery. 
The  reports  of  these  speeches  had  appeared  in  the 
columns  of  the  Times,  having  first  been  taken  down 
verbatim  at  the  meetings  where  they  had  been  deli- 
vered, by  the  Times  reporters  in  shorthand.  The 
proprietors  of  the  Times  sued  the  defendants  for  in- 
fringement of  copyright.  It  appeared  on  the  admis- 
sion of  the  defendant  himself  that  in  preparing  his 
work  he  had  utilised  cuttings  from  the  Times,  and 
four  of  the  speeches  appeared  to  have  been  taken 
down  bodily  from  it.  Lord  Rosebery  made  no  claim 
to  copyright.  The  plaintiff  obtained  an  injunction 
restraining  the  defendant  from  further  publishing  any 
book  containing  copies  of  the  speeches.  On  appeal, 
the  decision  was  reversed,  the  Court  of  Appeal  hold- 
ing that  the  Copyright  Act  was  passed  to  protect 

1  Roussac  v.  T hacker  &  Co.  i  Hyde  9.     See  also  Giridhari  Lall  v.  Devi 
Dial  3  I.C.  497. 

*  (1899)  2  Ch.  749. 


257 

authors,  not  reporters,  and  that  short-hand  reporters 
are  not  authors.  <cNo  doubt/'  said  the  Court,  "it 
requires  considerable  education  and  ability  to  make  a 
good  report  of  any  speech.  But  an  accurate  report 
is  not  an  original  composition,  nor  is  the  reporter  of 
a  speech  the  author  of  what  he  reports."1  The  plain- 
tiff appealed  to  the  House  of  Lords  where  the  decision 
of  the  Court  of  Appeal  was  again  reversed.  In  his 
judgment  Lord  Halsbury  L-C.  observed:  "The  pro- 
ducer of  this  written  composition  is,  to  my  mind,  the 
person  who  is  the  author  of  the  book  within  the 
meaning  of  the  statute,  and,  as  I  have  pointed  out, 
the  words  '  original  composer '  are  not  to  be  found  in 
the  statute  at  all,'2  and,  as  I  understand,  the  judgment 
of  the  Court  of  Appeal  is  entirely  based  on  the  thing 
protected  being  an  original  composition  in  the  sense 
that  the  person  who  claims  the  protection  of  the 
statute  must  not  ha^e  obtained  his  words  or  his  ideas 
from  somebody  else,  but  must  be  himself  an  original 
author  in  the  sense  in  which  that  word  is  generally 
used  in  respect  of  literary  composition."3  The  princi- 
ple upon  which  the  decision  of  the  House  of  Lords 
went  is  well  expressed  in  the  following  words  which  fell 
from  Davey,  ly.J. :  "It  is  a  sound  principle  that  a 
man  shall  not  avail  himself  of  another's  skill,  labour 
and  expense  by  copying  the  written  product  of  it.* 
In  other  words,  the  reporter  had  expended  his  skill 
and  labour  in  '  reporting/  i.e.  reducing  to  writing  Lord 
Rosebery's  speeches  delivered  orally  in  public,  and 
thereby  had  made  the  report  his  own  original  compo- 
sition.5 There  is  another  matter  which  this  case  clears 
up,  and  that  is  the  question  as  to  whether  originality,  Does  <  originality  • 
according  to  the  law  of  copyright,  imports  any  parti-  ^J^^r  mentor 
cular  merit  or  excellence.  In  the  words  of  the  Lord  excellence  in  the 
Chancellor,  copyright  "  is  given  by  the  statute  to  the  work? 
first  producer  of  a  book,  whether  that  book  be  wise 

1  (1899)  2  Cf.  at  p.  792. 

'2  The  word  'original'  did  not  appear  in  the  Copyright  Act  of  (1842) 
(5  &  6  Viet.  C.  45).  It  should  be  noted  that  Sec.  i  of  the  Copyright  Act 
1911  removes  the  defect  and  expressly  provides  that  only  original  works  are 
to  be  entitled  to  copyright. 

3  (1900)  A.C.  546,  547. 

*  Ibid.,  at  p.  552. 

&  Thus  it  appears  that  the  report  of  a  stenographer,  as  in  the  case 
of  Walter  v.  Lane,  made  to-day  would  be  entitled  to  copyright  under 
the  Indian  Copyright  Act  of  1914,  as  being  an  '  original  composition.' 

33 


258 

or  foolish,  accurate  or  inaccurate,  of  literary  merit  or 
of  no  merit  whatever."  l  It  does  not  follow  from  this 
that  every  kind  of  miscellaneous  matter  can  be  al- 
lowed to  be  the  subject-matter  of  copyright.  For 
instance,  it  has  been  held  that  an  album  for  holding 
photographs  with  pictorial  borders  containing  views 
of  castles  with  short  descriptions  attached  is  not  a 
literary  composition,  within  the  meaning  of  the  law 
of  copyright.2  A  production  consisting  of  an  enve- 
lope on  the  outside  of  which  a  title  was  printed 
and  a  piece  of  cardboard  so  cut  that  held  up  in 
the  light  it  cast  a  shadow  of  a  well-known  picture 
l(Ecce  Homo"  together  with  a  slip  of  paper  contain- 
ing a  verse  from  Longfellow,  has  been  held  not  to  be  a 
literary  work.3  Similarly,  sporting  tips  in  the  shape 
of  a  list  of  horses  expected  to  win  at  the  races  were 
held  not  to  come  within  the  purview  of  the  law.4 
Other  examples  of  such  exclusion  are  specifications 
of  patents, 5  or  a  particular  method  of  ruling  a  book 
for  scoring  purposes.6  On  the  other  hand,  the  author 
of  a  mining  report  has  been  held  to  have  copyright 
therein7  and  a  code  of  made  up  words  suitable  for 
cabling  purposes  has  been  held  to  be  an  "  original 
literary  work  within  the  meaning  of  the  Copyright 
Act."8 

Copyright    in  the          The  name  or  title  of  a  book  is  not  the  subject- 
°  f  a  matter  of  copyright,  unless,  in  form  and  language  it 

constitutes  a  literary  composition  of  the  author.9 
On  principle  this  statement  seems  quite  sound.  But 
the  decisions  are  rather  conflicting,  and  there  seems  to 
have  been  some  confusion  on  the  subject.  Thus  in 
Weldon  v.  Dicks  lo  Malins  V.C.  held  that  the  title  of  a 
book  is  a  part  of  the  book  and  as  such  the  subject  of 
copyright,  as  the  book  itself.  This  seems  also  to  have 

l  (1900)  A.C.  at  p.  549.     See  also  Hollinrake  v.  Truswell  (1894)  3  Ch.  420. 
*  Schove  v.  Schmincke  33  Ch.  D.  546. 

3  Cable  v.    Marks   (1882)    52  I^J.   Ch.   107.     Though  a  book  containing 
sketches  of  monumental  designs  with  scarcely  any  letter  press  was  held  to 
be  the  subject  of  copyright  Grace  v.  Newman,  L.R.  19  Eq.  623. 

4  Chilian  v.  Progress  Printing  and  Publishing  Company  (1895)  2  Ch.  29. 
6  Wyatl  v.  Bernard  (1814)  3  Ves.  &  B.  77;  s.c.  35  Eng.  Rep.  408. 

6  Page  v.  Wisden  (1869)  20  L.T.  435. 

1  Kenrick  v.  Danube  Collieries  and  Minerals  Co.,  Ld.  (1891)  39  W.R.  473, 

8  D.  P.  Anderson  &>  Co.,  Ltd.  v.  The  Lieber  Code  Co.  (1917)  I/.R.  2  K.B. 

469- 

9  See  Halsbury's  Laws  of  England,  Vol.  VIII,  p.  143. 
10  (1872)  10  Ch.  D.  247. 


259 

been  the  opinion  of  the  court  in  Mack.  v.  Petter  L  where 
a  work  called  '  The  Birthday  Scripture  Text-Book '  was 
protected  against  a  colourable  imitation  styled 
'Children's  Birthday  Text-Book.'  Evidently,  how- 
ever, the  decision  was  not  based  on  the  principle  of 
copyright.  A  title  might  be  a  sort  of  trademark,  and 
thus  might  be  the  subject  of  a  "  passing  off  "  action 
(see  infra,  Lect.  VIII),  i.e.  an  action  brought  against 
a  person  for  fraudulently  inducing  the  public  to  believe 
that  they  were  buying  the  work  of  another.  The 
decision  in  Weldon  v.  Dicks  was  considered  and  criti- 
cised in  that  light  by  the  Court  of  Appeal  in  Dicks  v. 
Yates2,  Jessel  M.R.  observing  that  there  might  be 
copyright  where  there  was  "  a  whole  page  of  title 
or  something  of  that  kind  requiring  invention."  Simi- 
larly, it  was  held  in  the  Licensed  Victualler' s  Newspaper 
Co.  v.  Ring-ham*,  that  there  is  no  copyright  in  the 
name  of  a  newspaper  or  periodical,  but  the  adoption 
of  the  name  by  another  newspaper  may  be  restrained 
on  the  ground  of  being  misleading  to  purchasers  (pass- 
ing off).  The  adoption  of  a  nom-de-plume  which  is 
associated  with  a  particular  author  may  be  restrained 
on  the  same  ground,  and  not  on  the  ground  of  copy- 
right.* In  Hogg.  v.  Kirby 6  the  defendant  published  a 
magazine  as  a  continuation  of  the  plaintiff's  magazine 
in  numbers.  An  injunction  was  issued  restraining  him 
from  doing  so,  making  it  clear  that  it  was  to  operate 
upon  nothing  but  the  publication  handed  out  to  the 
world  as  the  continuation  of  the  plaintiff's  work. 

Copyright  in  private  letters  is  again  a  subject  on  Copyright  in 
which  the  old  rulings  are  of  considerable  help.  The  Private  lette«. 
question  as  to  the  application  of  copyright  to  private 
letters  was  first  judicially  considered  in  England  in 
the  case  of  Pope  v.  Curl  about  the  year  1741.  In 
that  case  an  injunction  was  granted  against  a  re-publi- 
cation of  the  poet  Pope's  private  letters  to  Dean  Swift, 
and  Lord  Hardwicke  C.  observed :  "  Objection  has  been 
made  by  defendant's  counsel,  that  where  a  man  writes 
a  letter,  it  is  in  the  nature  of  a  gift  to  the  receiver. 
But  I  am  of  opinion  that  it  is  only  a  special  property 
in  the  receiver,  possibly  the  property  of  the  paper 

1  (1872)  I,.R.  14  Eq.  431.       2  (1881)  18  Ch.  D.  76  C.A. 

3  (1888)  38  Ch.  D.  139.  *  Land  v.  Greenbery  (1908)  24  T.I/.R.  441. 

&  8  Vesey  Jun  215  ;  s.c.  32  Eng.  Rep.  336  at  p.  340. 


260 

may  belong  to  him ;  but  this  does  not  give  a  licence 
to  any  person  whatsover  to  publish  them  to  the  world, 
for  at  most  the  receiver  has  only  a  joint  property 
with  the  writer.1  In  the  more  modern  case  of  Per  civ  at 
v.  Phipps  ?  several  kindred  questions  in  connection 
with  private  letters  ^came  up  for  discussion  and  they 
were  well  summed  up  by  Sir  Thomas  Plumer  V.C. 
who  observed  that  "  letters  had  the  character  of 
literary  composition  stamped  upon  them,  so  that  they 
were  within  the  spirit  of  the  Act  of  Parliament  pro- 
tecting literary  property ;  and  a  violation  of  the  right 
in  that  instance  is  attended  with  the  same  consequences 
as  in  the  case  of  an  unpublished  manuscript  of  an 
original  composition  of  any  other  description"  ;  thus 
obviously  inclining  to  hold  that  an  injunction  restrain- 
ing the  publication  of  private  letters  must  stand  upon 
the  foundation  of  literary  property,  not  of  breach  of 
confidence.  In  the  case  of  Gee  v.  Pritchard6  Lord 
Eldon  C.  restrained  the  publication  of  private  letters 
written  and  sent  by  a  lady  to  her  husband's  adopted 
son,  and  observed  that  he  believed  he  was  bound  so 
to  do  by  the  law  (although  he  doubted  its  soundness) 
laid  down  in  similar  cases  in  the  Court  of  Chancery, 
'  that  the  receiver  of  a  letter  had  only  a  joint  property 
with  the  writer.'  Lord  Eldon' s  decision  in  that  case 
has  received  the  approval  of  Mr.  Justice  Story,  the 
learned  American  commentator  on  Equity  Jurispru- 
dence. It  has,  however,  been  remarked  by  an  Americ- 
an Chancellor,4  that  Lord  Eldon  in  that  case  perhaps 
endangered  to  some  extent  the  freedom  of  the  press 
by  assuming  jurisdiction  of  the  case  as  a  matter  of 
property  only,  whereas  in  fact  the  object  which  the 
lady  had  in  view  was  not  so  much  to  prevent  the 
publication  of  her  letters  on  the  ground  of  any  pro- 
prietary interest  in  them,  but  rather  as  a  matter  of 
sentiment  in  as  much  as  it  invaded  her  right  to  privacy. 
In  this  connection  it  is  profitable  to  refer  to  the  ob- 
servations of  Buckley  L- J.  in  Macmillan  &  Co.  v.  Dent:* 
"  We  have  been  pressed  with  a  metaphysical  distinc- 

i  2  Atk.    342,  s.c.  26  Eng.   Rep.   608  ;  referred  to  in  Macmillan  <&•  Co. 
v.  Dent  (1907)  ICh.  107. 

•2  2  V.  Sr  B.  19  at  p.  24 ;  s.c.  35  Eng.  Rep.  225  at  p  227. 
3  2  Swanst  402  ;  s.c.  36  Eng.  Rep.  670. 
*  See  Brandeth  v.  Lance  8  Paige  2,  8. 
6  (1907)  I  Ch.  107  at  pp.  128-129. 


26l 

tion  which  it  has  been  sought  to  draw  between  the 
author's  manuscript  in  the  sense  of  the  sheets  of  paper 
with  words  written  upon  them  and  the  literary  com- 
position whose  expression  is  found  in  those  written 
words.  It  has  been  argued  that  the  author's  manu- 
script means  the  abstract  thing,  that  is,  the  literary 
composition,  as  distinguished  from  the  concrete  thing, 
meaning  the  expression  of  that  literary  composition 
in  characters  upon  paper.  I  agree  that  there  exists 
in  an  author  a  right  of  property  in  the  literary  com- 
position, the  abstract  thing,  as  distinguished  from  the 
concrete  thing,  the  words  written  upon  the  paper. 
The  decision  of  Lord  Hardwicke  in  Pope  v.  Curl  as 
understood  and  explained  by  Sir  Thomas  Plummer  in 
Lord  Per  civ  al  v.  Phipps  rests  no  doubt  upon  this, 
that  as  between  the  writer  and  the  addressee  of  a 
letter,  notwithstanding  the  fact  that  the  latter  is 
entitled  to  the  letter,  meaning  the  paper  on  which  it 
is  written,  yet  the  writer  has  a  right  of  property 
in  the  letter  based  upon  his  right  as  composer.  The 
writer  retains  the  rights  flowing  from  authorship. 
He  does  not  by  sending  the  letter  to  the  addressee 
authorize  him  to  publish  it.  As  Lord  Gairns  said  in 
Hopkinson  v.  Burghley^  the  writer  is  supposed  to 
intend  that  the  receiver  may  use  it  for  any  lawful 
purpose,  but  publication  is  not  such  a  lawful  purpose." 
It  is  instructive  to  consider  the  facts  in  the  case  of 
Phillip  v.  Pennell*  A  biography  of  Whistler  was  in 
course  of  preparation  and  had  been  authorised  by  him. 
No  express  authority  had,  however,  been  granted  to 
publish  any  letter.  The  writers  of  the  biography 
were  held  entitled  to  use,  for  the  purpose  of  compiling 
the  biography,  the  information  contained  in  letters 
or  documents  written  by  Whistler,  when  they  had  law- 
fully come  into  their  possession  without  any  express 
or  implied  authority ;  but  they  were  not  entitled  to 
publish  the  letters  or  extracts  from  them.  Lastly, 
the  question  of  letters  which  have  not  been  published 
during  the  life-time  of  the  author  remains  to  be 


l  (1867)  2  Ch,  App.  447.  It  was  held  in  this  case  that  a  private  and 
confidential  letter  ought  to  be  published  in  a  court  of  law  if  required  for 
purposes  of  justice  ;  but  the  defendant  would  be  justified  in  refusing  to 
produce  the  letters  without  the  direction  of  the  Court. 

*  (1907)  2  Ch.  577. 


262 

considered.     They  are  on  the  same  footing  as  posthu- 
mous works   under   the  present   Act,  and  copyright 
in  them  subsists  until  publication  and  for  a  term  of 
fifty  years  thereafter, 
selection  of  poems,          >phe  question  as  to  whether  a  selection  of  poems, 

whether  can  be  the  .    /*    ,  .  -.  .  .    -* 

subject-matter  of    etc.,  might  be  the  subject-matter  of  copyright  came 
copyright.  Up  m  fae  case  of  Macmittian  v.  Suresh  Chandra  Deb,1 

and  it  was  held  that  it  came  within  the  operation  of  the 
same  principle  which  made  maps,  road-books,  guide- 
books, street  directories,  dictionaries  and  compilations 
the  subject-matter  of  copyright.  Wilson  J.  in  the 
course  of  his  judgment  in  that  case  observed  :  "  There 
has  not,  so  far  as  I  know,  been  any  actual  decision 
upon  the  question.  In  the  case  of  works  not  original 
in  the  proper  sense  of  the  term,  but  composed  of 
and  compiled  or  prepared  from  materials  which  are 
open  to  all,  the  fact  that  one  man  has  produced  such 
a  work  does  not  take  away  from  any  one  else  the 
right  to  produce  another  work  of  the  same  kind  and  in 
doing  so  to  use  all  the  .materials  open  to  him.  But 
as  the  law  is  concisely  stated  by  Hall,  V.C.,  in  Hoggv. 
Scott1  c  the  true  principle  in  all  these  cases  is,  that  the 
defendant  is  not  at  liberty  to  use  or  avail  himself  of 
the  labour  which  the  plaintiff  has  been  at  for  the 
purpose  of  producing  his  work,  that  is,  in  fact,  merely 
to  take  away  the  result  of  another  man's  labour,  or, 
in  other  words,  his  property'  ....  This  principle 
seems  to  me  clearly  applicable  to  the  case  of  a  selec- 
tion of  poems.3 

copyright  in  On  the  subject  of  abridgments  the  law,  I  appre- 

hend, has  been  substantially  changed  by  the  present 
Act.  Under  the  old  law,  abridgments  came  under  the 
general  principle  above  referred  to,  viz.  if  the  abridg- 
ment or  epitome  is  such  as  to  show  that  independent 
labour  has  been  bestowed  upon  it  then,  and  in  that 
case  only,  was  it  allowable.  But  an  unintelligent  use 
of  scissors  and  paste  whereby  some  passages  are  cut 
out  and  others  retained,  thus  merely  reducing  the  size 
of  the  book,  is  not  in  the  proper  sense  of  the  term  an 
abridgment.  Thus  in  Newberry's  case 4  it  was  held 

1  I.L.R.  17  Cal.  951.     See  also  Md.  Abdul  Jalil  v.  Ram  Dayal  and  others 
I.L.R.  35  All.  484;  34  I.C.  357. 
*  L.R.  18  Eq.  444,  at  p.  458. 
3  I.L.R.  17  Cal   at  p.  961.  *  Lofts  Rep.  775. 


263 

that  "  to  constitute  a  true  and  proper  abridgment  of  a 
work  the  whole  must  be  preserved  in  its  sense  and  then 
the  act  of  abridgment  is  an  act  of  the  understanding 
employed  in  carrying  a  large  work  into  a  smaller 
compass."  Again,  in  D'Almaine  v.  Boosey  the  ques- 
tion was  discussed  and  the  observations  of  Abinger 
Iv-C.B.  in  that  case  are  well  worth  quoting  :  c<  It  is  a 
nice  question/'  says  he,  "what  shall  be  deemed  such 
a  modification  of  an  original  work  as  shall  absorb  the 
merit  of  the  original  in  the  new  composition.  No 
doubt  such  a  modification  may  be  allowed  in  some 
cases,  as  in  that  of  an  abridgment  or  a  digest.  Such 
publications  are  in  their  nature  original.  Their  com- 
piler intends  to  make  of  them  a  new  use ;  not  that 
which  the  author  proposed  to  make  ....  It  must  be 
a  bonafide  abridgment  because  if  it  contains  many 
chapters  of  the  original  work,  or  such  as  made  that 
work  most  saleable,  the  maker  of  the  abridgment 
commits  a  piracy.1  Such  was  the  law  before  the 
Copyright  Act  of  1914.  According  to  sec.  i,  sch.  I  of 
the  present  Act  "  Copyright  means  the  sole  right  to 
produce  or  reproduce  the  work,  or  any  substantial 
part  thereof  in  any  material  form  whatsoever."  It 
seems  to  me  that  in  the  case  of  any  abridgment  of  a 
work  an  infringement  of  this  right  of  the  author  is  al- 
most unavoidable.  The  only  exception  that  is  made 
is  to  be  found  in  sec.  2,  sub-section  (i)  which  provides 
that  any  fair  dealing  with  any  work  for  the  purposes 
of  private  study,  research,  criticism,  review,  or  news- 
paper summary  shall  not  constitute  an  infringement 
of  copyright. 

A  digest  is  on  a  different  footing  from  an  abridg-  Copyright  in 
ment.     An  abridgment  properly  speaking  is  a  conden-  Dlges 
sation  of   the   work  of    the   author,    keeping    intact 
the   general   plan   and    arrangement.       If  the  latter 
is  not  retained,  it  would  scarcely  be  a  faithful  abridg- 
ment.     A  digest,   on  the  other  hand,  is  a  compila- 
tion  consisting   of   extracts    selected   from   different 
authors  irrespective  of  the  arrangement  and  plan  of 
the    work    from    which    the    extracts    are    selected. 
Nevertheless,    a   digest   will   constitute   an   infringe- 

1  (1835)  I  Y.  &.  C.  Ex.  288  at  p.   301;    s.c.    i6oEng.  Rep.    117.     See 
also  Gyles  v.  Wilcox  (1740)  2  Atk.  p.  14;  s.c.  26  Bng.  Rep.  489. 


264 

ment  if  it  contains  a  substantial  reproduction  suffi- 
cient to  impair  the  value  of  the  original  work. 
Take  the  special  case  of  'Law  Digests.'  There  is 
undoubtedly  copyright  in  a  summary  of  legal  pro- 
ceedings or  in  the  form  in  which  the  principles  of  a 
judgment  are  expressed  in  the  head-note  of  a  reported 
case.1  The  right  of  selecting  passages  from  books  of 
report  and  even  entire  judgments  in  treatises  of 
law  is  recognised.  If  this  were  not  allowed,  many 
valuable  works  which  are  in  existence  at  the  present 
day  would  be  impossible.  Further,  any  number 
of  persons  may  take  down  or  obtain  copies  of  judg- 
ments, and  publish  them  without  copying  from  each 
other.  In  America,  there  is  .no  copyright  in  the 
written  judgment  delivered  by  a  court.  The  Supreme 
Court  of  the  United  States  has  held  that  neither  a 
Copyright  in  judge  nor  the  State  has  copyright  in  judgments.*  The 
judgments.  question  of  copyright  in  India  in  judgments  and  selec- 

tions of  judgments  was  thoroughly  discussed  in  the 
case  of  Jogesh  Chandra  Chaudhuri  v.  Mohim  Chandra 
Rai\  in  which  the  plaintiff,  the  proprietor  and  editor 
of  the  law  weekly  known  as  the  Calcutta  Weekly 
Notes,  sued  the  editor  and  publisher  of  a  rival  law 
periodical  known  as  the  Calcutta  Case  Law,  and  com- 
plained that  the  defendant  had  systematically  pirated 
reports  from  the  Calcutta  Weekly  Notes  and  printed 
and  published  the  same  in  the  Calcutta  Case  Law. 
The  defendant  maintained  that  the  plaintiff  had  no 
copyright  in  the  report  of  judgments  of  any  courts 
of  law  and  denied  the  alleged  piracy.  In  delivering 
judgment  for  the  plaintiff  Imam  J.  observed  :  " It  is 
generally  true  that  in  the  reports  of  judgments,  the 
reporter  has  no  copyright,  but  it  cannot  be  said  that 
in  the  selection  of  cases,  and  in  the  arrangement  of 
the  reporting,  the  reporter  has  not  the  protection  of 
the  law.  The  defendant  is  entitled  to  report  such 


1  "  The  head-note,  or  the  side  or  marginal  note  of  a  report  is  a  thing 
upon  which  much  skill  and  exercise  of  thought  is  required  to  express  in 
clear  and  concise  language  the  principles  of  law  to  be  deduced  from  the 
decision  to  which  it  is  prefixed  or  the  facts  and  circumstances  which  bring 
the  case  in  hand  within  the  same  principle  or  rule  of  law  or  of  practice." 
Per  Crowder  J.  in  Sweet  v.  Banning  (1855)  16  C.B.  459,  at  p.  491  s.c.  139 
Eng.,  Rep.  838. 

'2  See  Bank  v.  Manchester  (1888)  21    Davis  244,  cited'in  Robinson' 
of  Copyright. 

3  18  C.W.  N.  1078  at  p.  1085  ;  26  I.C.  30. 


265 

judgment  as  he  obtains  by  expenditure  of  his  time) 
labour  and  money,  but  where  he  fails  to  exert  his  own 
energies,  he  cannot  be  allowed  to  avail  himself  of 
other  people's  industry.  The  contesting  defendant, 
instead  of  restricting  himself  to  reporting  the  judg- 
ments only,  has  gone  much  further.  What  he  has 
done  in  the  present  case  is  that  he  has  freely  drawn 
on  such  portions  of  the  plantifFs  reports  as  form  no 
part  of  the  judgment.  He  has  also  taken  from  the 
plantifFs  reports  the  quotations  from  judgment  that 
were  appropriate  to  the  reports.  The  plaintiff' s  reports 
in  many  instances  contain  statements  of  facts  not  to 
be  found  in  the  judgment  but  have  been  gathered  by 
the  reporter  from  the  records  of  the  cases.  The  defen- 
dant no  doubt  was  at  liberty  to  bestow  his  labour  on 
collecting  the  facts  for  himself  but  he  was  not  entitled 
to  avail  himself  of  the  labours  of  another."  The  latter 
part  of  the  passage  is  based  upon  the  principle  laid 
down  in  Lewis  v.  Fullarton1  already  referred  to. 

To  pass  on  for  a  moment  to  consider  the  law  Copyrigh  in 
of  copyright  with  regard  to  lectures.  The  Act  pro-  Lectures- 
vides  that  the  lecturer  shall  have  copyright  in  his 
lecture  and  the  copyright  includes  ' '  the  sole  right  to 
deliver  (it)  or  any  substantial  part  thereof  in  public  ".* 
It  is  necessary,  however,  to  remember  the  general 
exceptions  laid  down  in  sec.  2,  sub-sees,  (i),  and  (iv)  of 
sch.  I,  which  are  applicable  to  lectures  as  well.  It  is 
provided  that  any  fair  dealing  with  any  work,  includ- 
ing a  lecture,  for  the  purposes  of  private  study, 
research,  criticism,  review  or  newspaper  summary  shall 
not  constitute  an  infringement  of  copyright.  Second- 
ly, the  publication  in  a  collection  mainly  composed  of 
non- copy  right  matter,  bona  fide  intended  for  the  use 
of  schools  (and  so  described  in  the  title  and  in  any 
advertisements  issued  by  the  publisher)  of  short  pass- 
ages from  published  literary  works  (including  lectures), 
not  themselves  published  for  the  use  of  schools,  in 
which  copyright  subsist,  is  allowable,  provided  that 
not  more  than  two  of  such  passages  from  works  by 
the  same  author  are  published  by  the  same  publisher 
within  five  years  and  that  the  source  from  which  such 

1  2  Beav  6;  s.c.  48  E)ng.  Rep.  1080. 

2  Sec.  i,  sub-sec.  (2).  Sch.  I,  sec.  35,  sub-sec,  (i),  says,  "  Lecture  includes 
address,  speech  and  sermon." 

34 


266 


'  Delivery '  of 
Lecture. 


Copyright  in 
Translations. 


passages  are  taken  is  acknowledged.  But  there  are 
some  special  formalities  prescribed  which  must  be 
observed  by  the  owner  of  copyright  in  lectures,  in 
order  that  his  rights  may  be  effectively  enforced  in 
certain  cases.  These  have  been  laid  down  in  sub-sec, 
(v)  of  sec.  2,  sch.  I.  This  provides  that  the  publica- 
tion in  a  newspaper  of  a  report  of  a  lecture  delivered 
in  public  shall  not  constitute  an  infringement  unless 
the  report  is  prohibited  l  and  the  prohibition  must  be 
(a)  by  conspicuous  written  or  printed  notice,  (b)  affixed 
before  and  maintained  during  the  lecture/-  (c)  at  or 
about  the  main  entrance  of  the  building  in  which  the 
lecture  is  given,  and  (d)  in  a  position  near  the  lecturer 
except  whilst  the  building  is  being  used  for  public 
worship.  There  is  one  solitary  exception  made  in 
favour  of  political  speeches  (see  sec.  20,  sch.  I)  deli- 
vered at  public  meetings,  a  publication  of  which  in  a 
newspaper  shall  not  constitute  an  infringement. 

'  Delivery '  of  a  lecture,  before  the  present  Act, 
was  defined  to  mean  communication  to  the  public  by 
oral  delivery.2  Under  the  present  law,  however,  the 
meaning  is  very  much  extended  in  keeping  with  the 
needs  of  the  times.  In  these  days  of  mechanical 
instruments  such  as  talking  machines,  and  the  like  it 
would  give  poor  protection,  indeed,  if  infringements 
were  held  to  be  possible  by  oral  delivery  alone.  Sec. 
35  (i)  of  sch.  I,  therefore,  provides  that  '  delivery '  in 
relation  to  a  lecture  includes  delivery  by  means  of 
any  mechanical  instrument.  This  is  of  a  piece  with 
similar  other  provisions  noted  above,  and  particularly 
sec.  19  of  the  Act  which  recognises  the  part  played 
by  records,  perforated  rolls  and  other  contrivances 
for  mechanical  productions  of  sound  in  the  modern 
world. 

The  subject  of  translations  requires  special  consi- 
deration. A  translation  means  an  accurate  interpreta- 
tion of  the  whole  work  so  as  to  make  it  know,n  through 
the  medium  of  the  new  language.3  Under  the  present 
law  copyright  includes  the  exclusive  right  of  trans- 
lation of  the  work  Thus  copyright  and  translating 
right  are  now  co-extensive.  This  was  not  so  under 


1  This  does  not  apply  to  newspaper  summaries. 

2  Caird  v.  Sime  (1887)  12  A. C.  326. 

3  Wood  v.  Chart  (1870)  L.R.  10  Eq.  193. 


267 

the  old  law.1  The  author  now  has  the  sole  translating 
right  and  unauthorised  translations  are  infringements 
of  his  copyright.  In  this  connection  it  is  essential  to 
note  the  variation  introduced  by  the  Indian  enactment 
(Act  III  of  1914).  Sec.  4  (i)  provides  as  follows:— 
"  In  the  case  of  works  first  published  in  British  India, 
copyright  shall  be  subject  to  the  limitation  that  the 
sole  right  to  produce,  reproduce,  perform  or  publish  a 
translation  of  the  work  shall  subsist  only  for  a  period 
of  ten  years  from  the  date  of  the  first  publication  of 
the  work ;  provided  that  if  within  the  said  period  the 
author,  or  any  person  to  whom  he  has  granted  per- 
mission so  to  do,  publishes  a  translation  of  any  such 
ivork  in  any  language,  copyright  in  such  work  as 
regards  the  sole  right  to  produce,  reproduce  perform 
or  publish  a  translation  in  that  language  shall  not  be 
subject  to  the  limitation  prescribed  in  this  sub-section." 
It  is,  therefore,  necessary  for  the  author,  or  any  one 
who  obtains  a  permit  for  translation  from  him,  to 
produce,  reproduce,  perform,  or  publish  the  transla- 
tion within  ten  years  from  the  date  of  first  publication, 
so  that  he  may  then  enjoy  the  copyright  for  the  usual 
period  prescribed  by  the  Act,  viz.  the  life  of  the  author 
and  fifty  years  thereafter. 

Now  to  pass  on  to  other  forms  of  copyright,  copyright  in 
It  will  be  observed  that,  under  the  present  Act,  copy- 
right  extends  to  original,  literary,  dramatic,  musical 
and  artistic  work.  The  features  of  copyright  which 
we  have  been  discussing  so  far  apply  to  all  the  forms 
of  copyright  abovementioned.  But  there  are  some 
special  characteristics  which  pertain  to  dramatic,  musi- 
cal and  artistic  work,  and  it  is  necessary  to  deal  with 
them  somewhat  in  detail.  Under  sec.  35  (1)  of  sch.  I 
of  the  Act,  ''Dramatic  work"  includes  any  piece  for 
recitation,  choreographic  work  '2  or  entertainment  in 


l  See,  for  instance,  Munshi  SJi.  Abdur  .Rahman  and  another  v.  Mirza 
Md.  Shirazi  I.L.R.  14  B.  586,  and  Macmillan  and  others  v.  K.B.  Shamsul- 
ulama  M.  Zaka,  I.L.R.  19  B.  557. 

*  I  am  indebted  to  Mr.  Oldfield  for  the  following  explanation  of  choreo-  <  Choreographic 
graphic  work  which  is  quoted  in  his  book  on  the  law  of  copyright  (p.  30, 
Note  M).  "  A  choreographic  work  represents  a  processional  dance,  some- 
times also  a  dancing  group,  which  has  for  its  object  the  reproduction 
on  the  stage  of  a  determinate  subject,  often  an  allegory  or  a  sym- 
bolic grouping,  see  '  Le  Droit  d'Auteur '  (1899),  p.  14.  The  author  of 
the  choreographic  work  is  the  ballet  master  or  person  who  has  arranged 
the  steps  of  the  dance  or  the  scenic  or  acting  form,  and  has  the  copyright, 


268 

dumbshow,  the  scenic  arrangement  or  acting  form  01 
which  is  fixed  in  writing  or  otherwise,  and  any  cine- 
matograph production  where  the  arrangement  or  act- 
ing form,  or  the  combination  of  incidents  represented 
give  the  work  an  original  character.  These  appear 
to  be  new  forms  of  copyright  created  by  the  Act. 
At  any  rate,  they  are  for  the  first  time  expressly 
provided  for  in  the  present  Act.  The  Act  of  1842 
defined  (( dramatic  piece  "  as  <(  every  tragedy,  comedy, 
play,  opera,  farce,  or  other  scenic  or  dramatic  entertain- 
ment." Although,  however,  the  old  statute  did  not 
expressly  provide  for  all  the  different  forms  of  enter- 
tainment included  in  the  definition  of  dramatic 
work  under  sec.  35  of  sch.  I,  some  of  them  at  any 
rate  were  held  to  come  within  its  scope.  Thus  in 
Karno  v.  Pathe  Freres  l  the  Court  observed  :  "  Looking 
to  the  object  of  the  statute  which  is  evidently  to  protect 
the  results  of  independent  labour  and  composition  in 
dramatic  work  and  to  extend  to  dramatic  compositions 
the  same  protection  as  that  already  given  to  books, 
I  see  no  reason  in  the  nature  of  things  why  a  drama- 
tic composition  which  is  entirely  pantomimic  or 
performed  in  dumbshow,  and  neither  reduced  nor 
reducible  into  writing,  should  not  be  protected  against 
piracy  as  being  a  piece  '  composed,'  i.e.  'put  together' 
by  its  author." 

The  intention  of  the  Act,  however,  it  must  be 
remembered,  is  to  protect  original  works,  and  original 
works  only.  In  Chatterton  v.  Cave  the  whole  of  the 
language  of  the  defendant's  drama  was  different  from 
the  plaintiff's ;  only  in  the  last  scene  an  expedient  was 
adopted  which  was  identical  with  that  adopted  by  the 
plaintiff's  drama.  It  was  held  that  in  as  much  as  the 
two  versions  were  substantially  independent  there  was 
no  infringement  of  copyright.  "  I  think,"  observed 
the  Court,  "this  would  be  going  too  far.  The 
intention  is  to  protect  original  work;  it  would  be 
descending  to  absurdity  to  give  protection  to  the 
application  of  a  common-place  expedient  of  scenic  art 

just  as  the  composer  of  the  music  or  the  writer  of  the  libretto  are  each 
of  them  the  authors  of  their  respective  works,  see  Stichel  v.  Mendi  et  Hahn 
(IQTI)  Trib.  Civil  de  la  Seine  30  Ch.  10  Feb.  and  "  I«e  Droit  d'  Auteur" 
1911)  p.  38  ;  reported  also  in  the  Daily  Telegraph  Feb.  10,  1911.— Oldfield's 
'  Law  of  Copyright.' 

i  (1908)  99.  ly.T.  114,  at  p.  117 ;  100  I,.T.  260. 


269 

to  the  end  of  a  version  of  drama."  l  Nor  is  there  any 
infringement  of  copyright  where  the  similarity  be- 
tween the  two  dramatic  pieces  is  due  to  mere  coinci- 
dence.2 

The  word  " cinematograph"  is  under  sec.  35,  sub-  cinematograph, 
sec  (i),  sch.  I,  made  sufficiently  elastic  to  cover  "any 
work  produced  by  any  process  analogous  to  cinemato- 
graphy." It  will  also  be  observed  that  the  process  of 
extending  copyright  has  been  carried  still  further,  for 
sec.  i,  sub-sec.  2  (d),  sch.  I,  provides  that  copyright 
in  the  case  of  literary,  dramatic  or  musical  work 
"shall  include  the  sole  right  to  make  any  record, 
perforated  roll,  cinematograph  film,  or  other  contri- 
vance by  means  of  which  the  work  may  be  mechani- 
cally performed  or  delivered,  and  to  authorise  any 
such  acts  as  aforesaid." 

The  general  principles  abovementioned  as  to  in- 
fringement of  copyright  apply  to  musical  works.*  copyright  in 
Consequently,  the  old  cases  on  the  subject  continue  to  musical  work.' 
be  of  considerable  help.  Take  the  following  dictum, 
for  instance,  laid  down  in  Dy Almaine  v.  Boosey  b  which 
remains  as  true  to-day  as  it  was  when  it  was  uttered. 
"  The  mere  adaptation  of  the  air,  either  by  changing  it 
to  a  dance  or  by  transferring  it  from  one  instrument 
to  another,  does  not,  even  to  common  apprehensions, 
alter  the  original  subject.  The  air  tells  you  that  it  is 
the  same.  The  original  air  requires  the  aid  of  genius 
for  its  construction,  but  a  mere  mechanic  in  music 
can  make  the  adaptation  or  accompaniment.  Sub- 
stantially, the  piracy  is  where  the  appropriated  music, 
though  adapted  to  a  different  purpose  from  that  of  the 
original,  may  still  be  recognised  by  the  ear.  The  add- 
ing variations  makes  no  difference  in  the  principle." 
Again  take  the  following  passage  from  the  same  case 
:(  Piracy  may  be  of  part  of  an  air  as  well  as  of  the 
whole  ....  If  the  plaintiffs  were  entitled  to  the  whole, 

'   Chatterton  v.  Cave  (1875)  L.R.  10.  C.P.  572  at  p.  579. 

*  Robl  v.  Palace  Theatre  (1911)  28.  T.L,.R.  69. 

3  See  Monckton  v.  Pathe  Freres  Pathephone  Ltd.  L.R.  (1914)  i  K.B.  395. 

*  "  Musical  work"   is    defined    in   sec.  5  of   Act  III  of  1914.     It  is  also  '  Musical  work* 
defined  in  the  musical  (Summary  Proceedings)  Copyright  Act  of  1902,  which  — defined, 
stands  unrepealed,  as  follows  :  "  Musical  work  is  any  combination  of  melody 

and  harmony,  or  either  of  them,  printed,  reduced  to  writing,  or  otherwise 
graphically  produced  or  reproduced."  The  reader  is  invited  to  compare  the 
two  definitions. 

5  (1835)  i  Y.  &  C.  288  at  p.  302  ;  s.c.  160  Eng.  Rep.  117. 


270 

a  fortiori  they  were  entitled  to  publish  the  melodies 
which  form  a  part.  It  is  the  air  or  melody  which  is 
the  invention  of  the  author  and  which  may  in  such  case 
be  the  subject  of  piracy ;  and  you  commit  a  piracy  if, 
by  taking  not  a  single  bar,  but  several,  you  incorporate 
in  the  new  work  that  in  which  the  whole  meritorious 
part  of  the  invention  consists"1  ....  Musical  merit  or 
excellence  in  the  piece  copied  is  no  more  necessary 
to  constitute  infringement  than  literary  merit  or 
excellence  to  infringement  of  literary  copyright. 

Musical  copyright  includes  under  sec.  i,  sub-sec. 
2  (d),  sch.  I,  of  the  Act  the  sole  right  "to  make  any 
record,  perforated  roll,  cinematograph  film,  or  other 
contrivance  by  means  of  which  the  work  may  be 
mechanically  performed  or  delivered,  and  to  authorise 
any  such  act  as  aforesaid/'  This,  however,  is  subject 
to  the  exceptions  indicated  in  sec.  19,  sch.  I,  of  the 
Act,  the  elaborate  provisions  of  which  section  relate 
exclusively  to  records,  perforated  rolls  and  other 
mechanical  instruments  for  the  production  of  sound. 

Into  the  details  of  the  section  we  do  not  propose 
to  enter.  But  the  general  scheme  and  intent  of  the 
law  relating  to  manufacture  of  mechanical  contrivances 
may  be  briefly  indicated  thus.  The  composer  of  a 
musical  work  has  the  copyright  in  it,  and  such  copy- 
right, as  observed  above,  includes  the  sole  right  to  make 
any  record,  perforated  roll,  cinematograph  film  or 
other  contrivance  by  means  of  which  the  work  .may  be 
mechanically  performed  or  delivered.  The  term  for 
which  such  copyright  subsists  is  the  life  of  the  author 
and  fifty  years  thereafter.  If  he  chooses,  however,  to 
make  a  record,  perforated  roll  or  mechanical  contri- 
vance or  consents  or  acquiesces  in  its  making  within 
such  period,  any  one  has  the  right  to  reproduce  his 
musical  work  on  payment  of  a  royalty  and  on  giving 
notice  in  the  manner  prescribed.  Thus  the  owner  of 
the  copyright  is  precluded  from  granting  to  any  parti- 
cular person  or  firm  an  exclusive  licence  for  mechani- 
cally reproducing  his  work.  It  is  clear  that  the  section 
is  intended  to  protect  manufacturers  of  mechanical 
contrivances  in  such  a  manner  that  no  one,  by  being 


l  Per   I/ord   Abinger,  C.B.  in  D'Almaine  v.  Boosey  (1835)  I  Y.  &  C.  Ex. 
at  pp.  30-2;  s.c.  160  Eng.  Rep.  117. 


271 

first  in  the  field  in  securing  the  permission  of  the 
owner  of  the  copyright,  may  derive  an  advantage 
in  preference  to  others.  It  is  to  be  noted  that  the 
mechanical  contrivance  for  the  reproduction  of  any 
work  is  not  included  within  the  " musical  work"  as 
interpreted  in  this  section  (sub- section  2,  proviso  (ii) ). 
Therefore  in  case  of  records,  a  manufacturer  is  not 
entitled  to  reproduce  directly  from  another  record,  even 
upon  payment  of  royalty ;  all  that  he  can  do  is  to 
make  an  entirely  fresh  record  for  himself  subject,  of 
course,  to  the  payment  of  royalty;  etc.  The  same 
proviso  also  lays  down  that  the  musical  work  would 
include  "  words  so  closely,  associated  therewith  as  to 
form  part  of  the  same  work."  The  power  of  such 
reproduction  is  limited.  The  reproducer  must  repro- 
duce the  work  as  it  has  been  consented  to  or  ac- 
quiesced in  by  the  owner  of  the  copyright  and  is  not 
authorised  to  make  any  alteration  in,  or  omissions 
from,  the  same,  unless  such  alterations  or  omissions 
are  reasonably  necessary  for  the  adaptation  of  the 
work  to  the  contrivances  in  question.  The  section 
then  goes  on  to  lay  down  the  rate  at  which  the  royalty 
is  to  be  paid  and  the  mode  of  apportionment  of  such 
royalty  when  there  are  more  owrners  than  one  in  the 
works  reproduced  by  the  contrivance.  It  also  pro- 
vides for  the  enquiry  that  has  to  be  made  and  the 
mode  of  giving  the  notice  and  the  particulars  to  be 
contained  therein. 

Clauses  7  and  8  of  the  section  provide  for  the  case 
of  musical  works  published  already,  before  the  com- 
mencement of  the  Act. 

Clause  (7)  of  section  19,  schedule  I  of  the  Act 
deals  in  detail  with  the  position  of  musical  works 
published  before  the  commencement  of  the  Act.  Be- 
sides provisions  relating  to  rates  of  royalty  l  the  details 
whereof  we  need  not  discuss,  it  lays  down  certain  other 
provisions  which  are  of  some  importance.  Firstly, 
the  conditions  in  sections  19  (2)  (a)  and  19  (2)  (b)  (i) 
are  made  inapplicable  to  such  works.  Secondly,  in 
the  case  of  assignments  of  copyright  in  musical  works 
made  prior  to  the  passing  of  the  Act  it  is  provided 
that  any  rights  conferred  by  the  Act  in  respect  of  the 

l  See  Monckton  v.  Pathe  Freres  Ltd.  I/.R.  (1914)  i  K.B.  395. 


272 

making  or  authorising  the  making  of  contrivances 
by  means  of  which  such  works  may  be  mechanically 
performed  shall  belong  to  the  author  thereof  or  his 
legal  personal  representatives  and  not  to  the  assignees, 
and  the  royalties  shall  be  payable  to  the  former  and 
not  to  the  latter.  Thirdly,  if  any  person  has  made  such 
mechanical  contrivances  whether  before  or  after  the 
passing  of  this  Act  it  is  provided  that  he  shall  not  sell 
any  such  contrivances  except  on  the  terms  and  subject 
to  the  conditions  laid  down  in  the  previous  portion  of 
the  section.  Fourthly,  where  copyright  is  conferred 
by  an  Order  in  Council  on  a  work  of  a  foreign  country 
the  copyright  so  conferred  shall  not,  except  to  such 
extent  as  may  be  provided  by  the  Order,  include  any 
rights  with  respect  to  the  making  of  records,  per- 
forated rolls  or  other  contrivances  by  means  of  which 
the  work  may  be  mechanically  performed.  Section 
19,  sub-section  (8),  schedule  I,  lays  down  explicitly 
that  where  a  record,  perforated  roll  or  other  contri- 
vance by  means  of  which  sound  may  be  mechanically 
reproduced  has  been  made  before  the  commencement 
of  the  Act,  copyright  shall  as  from  the  commence- 
ment of  the  Act,  subsist  therein  in  like  manner  and 
for  the  like  term  as  if  this  Act  had  been  in  force  at 
the  date  of  the  making  of  the  original  plate  from 
which  the  contrivance  was  directly  or  indirectly  de- 
rived, that  is,  fifty  years  from  the  making  of  the 
original  plate. 

Artistic  Copyright.  *  Artistic  work '  under  the  Act  appears  to  have  a 
fairly  wide  denotation.  Section  35  (i)  provides  that 
artistic  works  shall  include  ' '  works  of  painting,  draw- 
ing, sculpture  and  artistic  craftsmanship  and  archi- 
tectural work  of  art  and  engravings  and  photographs/' 
The  expression  '  works  of  sculpture  '  includes  casts  and 
models.  'Architectural  work  of  art'  is  defined  as 
"  any  building  or  structure  having  an  artistic  character 
or  design,  in  respect  of  such  character  or  design,  or 
any  model  for  such  building  or  structure,  provided  that 
the  protection  afforded  by  this  Act  be  confined  to  the 
artistic  character  and  design,  and  shall  not  extend 
to  processes  or  methods  of  construction/5 

It  will  be  remembered  that  copyright  under  the 
Act  means  the  sole  right  to  produce  or  reproduce  the 
work,  or  any  substantial  part  thereof,  in  any  material 


i 


273 

form  whatsoever,  to  perform  l  the  work  or  any  substan- 
tial part  thereof  in  public,  and  if  the  work  is  unpub- 
lished,  to  publish  the  work   or  any  substantial  part 
thereof.     Now  it   would  be  worth  while  to    consider 
carefully  the   contents   of  this  definition.     A  liberal 
construction  of  the  words  fto  produce  or  reproduce/ 
would  appear  to  lead  to  the  position  that  a  painting, 
drawing,  engraving  or  photograph  of  a  work  of  sculp- 
ture or  artistic  craftmanship  would  constitute  repro- 
duction ;     but   such   a   construction  is  precluded  by 
sec.  2  sub-sec,  (i)  (iii),  sch.  I  of  the  Act  which  provides 
that  the  making  or  publishing  of  paintings,  drawings, 
engravings,  or  photographs,  of  a  work  of  sculpture  or 
artistic  craftsmanship,    if   permanently   situate   in  a 
public  place  or  building,  or  the  making  or  publishing 
of   paintings,    drawings,    engravings   or   photographs 
(which  are  not  in  the  nature  of  architectural  drawings 
or  plans)  of  any  architectural  work  of  art  shall  not 
constitute  an   infringement   of  copyright.     But   con- 
sider the  case  of  an  artistic  work  which  is  converted, 
into  a  dramatic  work,  as  for  instance  in  the  form  of 
tableaux  vivants.     Under  the  old  law  it  would  not  con- 
stitute an  infringement.     But  it  would  appear  clearly 
to  come  within  the  meaning  of  sec.  i,   sub-sec.    (2), 
sch.  I  of  the  present  Act.     In  a  group  of  cases  known 
as  the  '  Living  Picture  '  cases  *  the  question  of  tableux  living  pictures 
vivants  was  fully  considered.     In  Hanfstaengl  v.  Empire 
Palace  the  defendants  had  produced   on  their  stage 
certain  tableux  vivants^  which   were   intended    to   be 
representations    of  pictures  the   copyright   in   which 
belonged  to   the   plaintiff.     Lord  Justice  Lindley  in 
giving  judgment  said,  "  We  are  asked  to  say  that  the 
words     ( copying    and    reproducing   by    any  means ' 
include  reproducing  in  the   sense  of  imitating  or  re- 
presenting by  means  not  equivalent  to  drawing  or 
painting  or  photographing  or  any  such  means,   but 
by   totally    different    means,    by    the    exhibition    of 
living  figures.     Is  that  what  is  aimed  at  ?  It  appears 
to   me   that   obviously   and  plainly   it  is   not  .  .  .   > 
It  is  intended  to   protect  the   author  of  the  picture 

1  Penning  Film  Service   Ltd.   v.   Wolver Hampton,    Walsall  and  District 
Cinemas  Ltd.  (1914)  ly.R.  3  K.B.  1171. 

2  Hanfstaengl' v:  Empire  Palace  (1894)  2  Ch.  i,;  Hanfstaengl  v.  Newnes^ 
(1394.)  3  Ch.  109  ;  Hanfstaengl  v.  Baines  (1895)  A.C.  20. 

35 


274 

from  any  body's  producing  a  painting,  drawing  01 
photograph  of  his  picture  so  as  to  compete  with  him 
in  the  market :....!  think  a  good  deal  of  light  is 
thrown  upon  the  question  by  the  case  of  Dicks  v. 
Brooks l  because  although  it  is  very  true,  as  was  pressed 
upon  us  by  Mr.  Scrutton,  that  the  word  f  design  J  is 
not  used  in  the  Engraving  Acts,  still  the  object  of  the 
Acts  in  protecting  engravings  is  exactly  the  same  as 
the  object  which  the  legislature  had  in  view  in  pro- 
tecting paintings,  drawings,  and  photographs  in  this 
Act.  It  was  not  meant  to  give  them  the  right  to 
restrain  Madame  Tussaud  from  exhibiting  a  repres- 
entation of  a  painting  in  wax  work ;  but  to  restrain 
people  from  producing  something  which  would  compete 
in  the  market  with  the  originals  or  with  authorised 
copies  of  them/'  *  So  also  Lord  Justice  Kay  :-"  What 
does  c  reproduction '  really  mean  ?  Reproduction  is 
producing  again.  Is  this  a  producing  again  the  design 
of  this  painting  within  the  meaning  of  the  copyright 
Act  ?  I  cannot  think  that  it  is.  It  seems  to  me  that 
in  order  to  produce  the  painting  you  must  have  some- 
thing which  itself  is  and  would  be  properly  described 
as  a  picture."  3  It  seems  that  in  view  of  the  express 
provisions  of  sec.  i,  sub-sec.  (2)  of  the  present  Act  the 
law  must  be  taken  to  have  been  modified,  for  copy- 
right now  means  "  the  sole  right  to  produce  or  repro- 
duce the  work  or  any  substantial  part  thereof  in  any 
material  form  whatsoever.  That  being  so,  it  seems  to 
follow  that  a  representation  of  a  painting  in  wax  work 
can  constitute  an  infringement  under  the  present  law. 
We  proceed  now  to  consider  some  other  important 
provisions  of  the  Act  which  have  made  profound 
modifications  in  the  law  of  copyright.  The  first  of 
these  is  with  regard  to  the  term  of  copyright  or  the 

Term  of  period  during  which  the  copyright  monopoly  is  to  last. 

copyright,  it  is  recognised  that  it  is  against  public  policy  and 

all  principles  of  fairness  and  equity  that  the  monopoly 
should  be  perpetual.  There  must  be  a  point  of  time 
when  the  monopoly  should  cease  and  the  property 
in  the  work  should  be  capable  of  being  enjoyed  by 
the  public  without  any  restriction.  The  problem, 


)  (1880)  15  Ch.  D.  22.  2  (1894)  3  Ch.  i  at  pp.  5,  6. 

3  Ibid,  at  p.  8. 


275 

therefore,  is  to  lay  down  what  the  point  of  time 
should  be.  It  is  also  the  duty  of  the  legislature  to 
fix  the  point  of  time  at  which  the  monopoly  begins, 
that  is  to  say  whether  it  should  spring  up  imme- 
diately upon  the  production  of  the  work,  or  upon  its 
publication,  and  so  on.  Thus  the  subject  as  to  the 
term  of  copyright  is  closely  associated  with  the  further 
questions  as  to  what  is  meant  by  the  (  making '  of  the 
work  and  what  is  meant  by  'publishing'  it.  We 
shall  now  briefly  consider  these  allied  matters. 

It  will  be  remembered  that  formerly  the  author 
had  a  common  law  right  in  his  unpublished  work  from 
the  date  of  the  making  of  the  work  until  the  date  of 
its  publication — what  I  have  called  for  convenience  The  distinction 
'  copy right-bef ore-publication.'  As  soon  as  the  work  iaew^ightCandm 
was  published,  the  copyright  with  regard  to  it  came  statutory  right 
to  be  governed  by  statute.  Thus  there  was,  before 
the  present  Act,  the  broad  difference  between  copy- 
right-before-publication  governed  by  the  common 
law  and  copyright-after-publication  governed  by 
statute.  In  practice,  however,  there  was  less  simpli- 
city and  more  lack  of  uniformity  than  would  appear 
from  the  enunciation  of  the  law  given  above.  For 
instance,  in  Tuck  v.  Priester  l  it  was  held  that  copy- 
right in  paintings,  drawings  and  photographs  com- 
menced from  the  date  the  works  were  made  •  in  other 
words,  the  common  law  right  and  the  statutory  right 
would  be  synchronous.  The  present  Act  renders  the 
common  law  right  quite  unnecessary  and  brings  copy- 
right-before-publication  and  copyright-after-publica- 
tion on  the  same  statutory  footing  as  will  appear  from 
sec.  i,  sub-sec,  (i).  It  provides  that  in  the  case  of  all 
unpublished  works,  whether  literary,  dramatic,  musi- 
cal or  artistic,  copyright  is  to  subsist  from  "  the  date 
of  the  making  of  the  work/'  provided  that  the 
author  was  at  that  date  a  British  subject,  or  resident 
within  His  Majesty's  Dominions.2  In  the  case  of  a 
published  work,  the  question  of  publication  is  impor- 
tant in  as  much  as  the  section  provides  as  a  necessary 
condition  that  the  work  should  be  first  published 
within  His  Majesty's  dominions.  Other  distinctions 


1  (1887)  19  Q.B.D.  p.  629,  per  Lord  Esher  M.R.  at  p.  636. 

2  Note,  however,  the  concluding  words  of  sec.  i,  sub-sec,  (i). 


276 

between  published  and  unpublished  works  is  removed 
by  the  new  Act.  Lest  there  should  be  any  doubt  a« 
to  the  abolition  of  the  common  law  right  regarding 
unpublished  works,  sec.  31  makes  a  clear  pronounce- 
ment by  providing  as  follows:-" No  person  shall  be 
entitled  to  copyright  or  any  similar  right  in  any 
literary,  dramatic,  musical  or  artistic  work,  whether 
published  or  unpublished,  otherwise  than  under  and 
in  accordance  with  the  provisions  of  this  Act,  or  of 
any  other  statutory  enactment  for  the  time  being  in 
force  but  nothing  in  this  section  shall  be  construed  as 
abrogating  any  right  or  jurisdiction  to  restrain  a  breach 
of  trust  or  confidence."  The  last  portion  of  the  sec- 
tion evidently  refers  to  the  principle  so  often  indicated 
in  cases  like  Prince  Albert  v.  Strange  (see  Lect.  VI) 
that  an  injunction  restraining  publication  might  be 
granted  upon  the  ground  of  breach  of  confidence, 
and  continues  the  same  relief  under  the  present 
law. 

Publication.  The  question  as  to  what  constitutes  'publication  ' 

of  a  work,  as  also  the  date  of  such  publication,  is  thus 
not  of  such  consequence  under  the  present  law  as  it 
was  formerly.  Under  the  old  law,  the  term  of  copy- 
right often  expired  at  a  fixed  date  reckoned  from  the 
date  of  first  publication.  Under  the  new  law,  copy- 
right in  regard  to  published  works  expires  fifty  years 
after  the  author's  death.  Thus  the  precise  date  of 
publication  is  immaterial.  The  term  of  copyright 
according  to  sec.  3,  sch.  I  of  the  present  Act  shall  be, 
"  except  as  otherwise  expressly  provided  by  this  Act," 
the  life  of  the  author  and  a  period  of  fifty  years  after 
his  death.1  It  should  be  noted  that  in  some  cases 
there  may  be  occasion  under  the  present  Act  to 
ascertain  whether  and  when  a  work  has  been  pub- 
lished, because  it  may  so  happen  that  a  work,  if  pub- 
lished, would  be  entitled  to  protection  but,  if  unpub- 
lished, may  be  entitled  to  no  protection  at  all.  Thus 
sec.  i,  sch.  I  provides  that  copyright  is  to  subsist  in 
published  literary,  dramatic  and  artistic  works  if 
they  are  first  published  within  the  parts  of  His 
Majesty's  dominions  to  which  the  Act  extends,  but 
in  the  case  of  unpublished  works,  only  ff  if  the  author 


1  Note,  however,  the  proviso  in  sec.  3. 


277 

was  at  the  date  of  the  making  of  the  work  a  British 
subject  or  resident  within  such  parts  of  His  Majesty's 
dominions  as  aforesaid."  From  this  it  appears  that 
a  foreigner  may  be  entitled  to  no  copyright  in  his 
unpublished  work,  although  he  might  by  first  publica- 
tion on  Indian  soil  acquire  an  Indian  copyright  in 
the  same  work.  The  anomalies  and  inconveniences 
resulting  from  this  are  somewhat  met  by  the  provi- 
sions of  sec.  29  (i),  sch.  I. 

(  Publication  '  is  defined  '  as  c<  the  issue  of  copies 
of  the  works  to  the  public/'  but  it  is  provided  that 
it  (f  does  not  include  the  performance  in  public  of  a 
dramatic  or  musical  work,  the  delivery  in  public  of  a 
lecture,  the  exhibition  in  public  of  an  artistic  work 
or  the  construction  of  an  architectural  work  of  art, 
but  for  the  purposes  of  this  provision,  the  issue  of 
photographs  and  engravings  of  works  of  sculpture 
and  architectural  works  of  art  shall  not  be  deemed 
to  be  publication  of  such  works." 

With  regard  to  the  period  during  which  the  copy-  Special  cases. 
right  is  to  subsist,  the  Act  provides  for  certain  special 
cases  which  are  not  covered  by  sec.  3,  schedule  I  of 
the  Act.  Thus  the  case  of  a  work  of  joint  author- 
ship is  naturally  attended  with  some  difficulty.2  Sec. 
16,  sch.  I,  therefore  provides  that  the  period  in 
such  a  case  is  to  be  the  life  of  the  author  who  dies 
first  and  fifty  years  thereafter,  or  the  life  of  the 
author  who  dies  last,  whichever  period  is  the  longer. 
In  the  case  of  posthumous  works,  whether  it  be 
literary  dramatic  or  musical  work  or  an  engraving, 
sec.  17,  sch.  I  provides  that  the  copyright  subsists 
till  publication,  and  for  a  period  of  fifty  years  there- 
after. Thus  in  such  cases  the  date  of  publication  is 
material  and  the  effect  of  the  law  is  as  if  the  author 
died  at  the  date  of  the  publication,  Government 
publications  have  been  specially  provided  for  by  sec. 
18,  sched.  I,  the  period  of  copyright  laid  down  being 
fifty  years  from  the  date  of  publication.  In  the  case 
of  mechanical  instruments  for  the  production  of 
sound  the  term  of  copyright  is  fifty  years  from  the 


l  Sec.  I,  sub- sec.  (3)  of  the  Act. 

•2  On  the  question  as  to  the  right  of  a  part  owner  of  the  copyright  in 
a  book  to  sue  the  other  part  owner  for  infringement,  see  Cescinsky  v.  George 
Routledge  6-  Sons,  Ltd.  £.R.  (1916  2  K.B.  325. 


278 

making  of  the  original  plate  from  which  the  contri- 
vance was  directly  or  indirectly  derived.  (Sec.  19, 
sub-sec,  (r),  sch.  I.  In  the  case  of  photographs  the 
term  is  fifty  years  from  the  making  of  the  original 
negative  from  which  the  photograph  was  directly  or 
indirectly  derived  (sec.  21,  sch.  I). 

Assignment  of  f  fre  subject  of  assignment  of  copyright  is  dealt 

with  in  section  5,  sub-sections  (2)  and  (3),  schedule  I. 
The  owner  of  the  copyright  in  any  work  may  assign 
the  right  either  wholly  or  partially,  either  generally 
or  subject  to  limitations  to  the  United  Kingdom,  or 
any  self-governing  dominion  or  other  part  of  His 
Majesty's  dominions  to  which  the  Act  extends,  and 
either  for  the  whole  term  of  the  copyright  or  for  any 
part  thereof,  and  may  grant  any  interest  in  the  right 
by  licence.  It  seems  that  the  limitations  to  any 
smaller  area  than  those  indicated  in  the  section,  such 
as  a  County  in  the  United  Kingdom  or  a  Province  of 
any  of  His  Majesty's  dominions,  are  not  allowable. 
The  assignment  or  grant  by  licence  in  order  to  be 
valid  must  be  in  writing  signed  by  the  owner  of  the 
copyright  or  by  his  duly  authorised  agent.  There  is 
a  special  restriction  imposed  by  the  proviso  to  sub-sec- 
tion (2)  in  regard  to  assignment  by  the  author  of  a 
work  who  is  the  first  owner  of  the  copyright  therein. 
It  lays  down  that  no  assignment  of  the  copyright 
and  no  grant  of  any  interest  therein  made  by  him 
(otherwise  than  by  will)  after  the  passing  of  the  Act, 
shall  be  operative  to  vest  in  the  assignee  or  grantee 
any  rights  beyond  the  expiration  of  twenty-five  years 
from  the  death  of  the  author ;  and  it  is  further 
provided  that  the  reversionary  interest  in  the  copy- 
right expectant  on  the  termination  of  that  period 
shall,  on  the  death  of  the  author,  notwithstanding 
any  agreement  to  the  contrary,  devolve  on  his  legal 
personal  representatives  as  part  of  his  estate,  and 
any  agreement  entered  into  by  him  as  to  disposition 
of  such  reversionary  interest  shall  be  null  and  void. 
There  are  two  exceptions,  viz.  assignment  of  the 
copyright  in  a  collective  work  and  a  licence  to  publish 
a  work  or  part  of  a  work  as  part  of  a  collective 
work.  It  would  appear,  therefore,  that  the  person 
who  has  the  copyright  in  a  collective  work  as  such 
may  assign  such  copyright  for  the  full  term.  If  the 


279 

owner  of  the  copyright  in  the  collective  work  happens 
also  to  be  the  author  of  any  part  of  that  work,  he  can 
assign  the  copyright  in  that  part  for  the  limited  term 
only.     Similarly ,  a  contributor  to  such  collective  work 
can  assign  the  copyright  in  his  contribution  for  the 
limited   term    only,  but   he   can   grant   a   licence    to 
publish  his  contributions  as  part  of  the  collective  work 
for  the  full   term.     The  provision  in  sub-section  (2) 
authorising  partial  assignment  of  copyright  renders 
it  necessary  in  sub- section  (3)  to  remove  all  conflict 
of  interest  by  providing  that  in  case  of  such  partial 
assignment,   the  assignee,   as  respects  the  rights  so 
assigned  and  the  assignor,  as  respects  the  rights  not 
assigned,  shall  be  treated  as  the  owner  of  the  copy- 
right.    It  is  to  be  noted  that  section  19,  sub- sections 
(7)  and  (8),  section  24,  and  section  33  of  schedule  I 
taken    together    contain    all   the   provisions   in   the 
present  Act  for  saving  of  pre-existing  rights.     Section 
19,  sub-sections  (7)  and  (8)  as  observed  above  relate  to 
musical  works  published  before  the  commencement 
of  the  Act.     Section  33  relates  to  the  Universities 
and  Colleges  mentioned  in  the  Copyright  Act,  1775, l 
and  lays  down  that  they  shall  not  by  the  present  Act 
be  deprived  of  any  copyright  they  already  possess, 
but  the  remedies  and  penalties  for  infringement  of 
any  such  copyright  shall  be  under  the  present  Act 
and  not  under  that  Act.     The  elaborate  provisions  of 
sec.   24  concern  themselves  with  the  saving  of  rights 
in  existing  works  generally,  but  subject  to  terms  to 
be  settled  by  agreement  or  arbitration.     Section  24, 
sub-section  (3)  lays  down  that,  subject  to  the  provi- 
sions of  section  19,  sub-sections  (7)  and  (8)  and  of  sec- 
tion 33,  copyright  shall  not  subsist  in  any  work  made 
before  the  commencement  of  the  Act  otherwise  than  - 
under  and  in  accordance  with  the  provisions  of  sec- 
tion 24. 

The  remedies  in  India  afforded  by  the  Act  for  The  remedies  under 
infringement   of  copyright  are    of  two   classes,   civil  the  Copyright  Act 
and   criminal.     First,    as   to   civil   remedies.     Every" 
suit  or  other  civil  proceeding  regarding  infringement 
of  copyright  has  to  be  instituted   and  tried   in  the 
High  Court  or  the  Court  of  the  District  Judge.2    The 


15  Geo.  Ill  C.  53.  2  See  Section  13,  Act  III  of  1914. 


280 

remedies  are  provided  for  in  sec.  6  (i),  sch.  I, 
which  runs  as  follows  :—''  When  copyright  in  any 
work  has  been  infringed,  the  owner  of  the  copyright 
shall,  except  as  otherwise  provided  by  this  Act,  be 
entitled  to  all  such  remedies  by  way  of  injunction  or 
interdict,  damages,  account  and  otherwise,  as  are  or 
may  be  conferred  by  law  for  the  infringement  of  a 
right."  Only  the  " owner"  of  the  copyright  is 
entitled  to  the  remedies,  consequently  a  mere  agent L 
or  a  licensee2  cannot  bring  the  action,  and  the  period 
of  limitation  for  bringing  the  action  is  three  years 
from  the  infringement/ 

in'unction-the  ^e  mos^  usua^  remedy  is  an  injunction  (or  an 

nsuai  remedy.  interdict)  except  in  the  case  of  architecture  con- 
templated in  s.  9  (i),  sch.  I.  The  injunction  may  be 
either  interlocutory  or  final.  It  is  interlocutory  when 
it  is  granted  prior  to  the  trial  only  until  that  trial,  or 
further  orders.  It  is  final  when  it  is  granted  at  the 
trial  of  the  action.  The  law  as  to  interlocutory  in- 
junctions in  India  is  laid  down  in  Order  39  of  the  Civil 
Procedure  Code.  It  appears  that  delay  in  the  in- 
stitution of  proceedings  would  necessarily  be  no 
ground  for  refusing  an  injunction.  But  where  such 
delay  amounts  to  a  tacit  permission  to  reproduce  the 
work,  an  injunction  will  be  refused/ 

On  proof  of  an  infringement,  an  injunction  will 
be  granted,  though  actual  damage  is  not  proved ;  but 
mere  suggestion  of  possible  injury  will  not  constitute 
a  sufficient  ground  for  injunction.  There  must  be 
reasonable  probability  that,  in  fact,  there  will  be 
damage  to  the  party  complaining 5  as  also  the  like- 
lihood of  continuance  of  the  infringement.6  C(  An 

l  Nicol  v.  Stockdale  3  Swans.  687  s.c.  36  Eng.  Rep.  1023;  Petty  v.  Taylor 
(1897)  i  Ch.  465. 

•2  Neilson  v.  Horniman  (1909)  25  T.Iv.R.  684. 

3  S.  10,  sch.  I  of  the  Act. 

*  Rundell  v.  Murray  (1821)  Jac.  311  s  c.  37  Eng.  Rep.  868.  "  There  has 
often  been  great  difficulty  about  granting  injunctions,  where  the  plaintiff 
has  previously,  by  acquiescence,  permitted  many  others  to  publish  the 
work ;  where  ten  have  been  allowed  to  publish  the  Court  will  not  restrain 
the  eleventh.  A  Court  of  Equity  frequently  refuses  an  injunction  where  it 
acknowledges  a  right,  when  the  conduct  of  the  party  complaining  has  led  to 
the  state  of  things  that  occasions  the  application."  Per  Lord  Eldon.  Ibid., 
at  p.  316.  See  also  Saunders  v.  Smith  (1838)  3  My.  and  Cr.  711  s.c.  4  Eng. 
Rep.  noo;  and  Hogg  v.  Scott  (1874)  18  Eq.  444. 

6  Borthwick  v.  Evening  Post  (1888)  37  Ch.  D.  449. 

6  In  this  connection  see  Cox  v.  Land  and  Water  Journal  Co.  (1869)  9 
Eq.  324- 


28l 

injunction  can  only  be  granted  in  respect  of  matters 
with  regard  to  which  the  plaintiffs  now  have  the 
copyright  and  a  present  right  to  sue  ;  they  cannot 
have  any  protection  by  injunction  to  restrain  the 
defendants  for  publishing  hereafter  any  future  entries 
with  respect  to  which  the  plaintiffs  may  possibly, 
before  they  are  published,  acquire  a  copyright/ 

An  interesting  question  arises  sometimes  as  to  Special  cases  of 
the  extent  to  which  an  injunction  should  go  in  a  case  mJunctlon- 
where  portion  only  of  the  work  complained  against  is 
piratical.  In  such  a  case  if  the  part  which  has  been 
copied  from  the  plaintiff's  work  can  be  separated 
from  that  which  has  'not  been  copied,  an  injunction 
will  issue  against  the  objectionable  part  or  parts  only. 
But  where  the  parts  which  have  been  copied  cannot 
be  separated  from  those  which  are  original  without 
destroying  the  use  and  value  of  the  original  matter 
an  injunction  must  be  issued  against  the  whole,  <c  for 
he  who  has  made  an  improper  use  of  that  which 
did  not  belong  to  him  must  suffer  the  consequences 
of  so  doing."  Lord  Eldon  observed  in  the  case  of 
Maw  man  v.  Tegg*  "As  to  the  hard  consequences 
which  would  follow  from  granting  an  injunction, 
when  a  very  large  proportion  of  the  work  is  unques- 
tionably original,  I  can  only  say  that  if  the  parts 
which  have  been  copied  cannot  be  separated  from 
those  which  are  original,  without  destroying  the  use 
and  value  of  the  original  matter,  he  who  has  made 
an  improper  use  of  that  which  did  not  belong  to 
him  must  suffer  the  consequences  of  so  doing.  If  a 
man  mixes  what  belongs  to  him  with  what  belongs 
to  me  and  the  mixture  be  forbidden  by  law,  he  must 
again  separate  them,  and  he  must  bear  all  the  mischief 
and  loss  which  the  separation  may  occasion.  If  an 
individual  chooses  in  any  work  to  mix  my  -  literary 
matter  with  his  own,  he  must  be  refrained  from 
publishing  the  literary  matter,  which  belongs  to  me, 
and  if  the  parts  of  the  work  cannot  be  separated  and 
if  by  that  means  the  injunction  which  restrained  the 
publication  of  my  literary  matter  prevents  also  the 
publication  of  his  own  literary  matter,  he  has  only 

1  Gate  v.  Devon  and   Exeter   Constitutional  Newspaper  Co.   40  Ch.    D. 
500  (507). 

a  (1826)  2  Russ.  385  at  pp  390,  391,  s.c.  38  Eng.  Rep.  380. 

36 


282 

himself  to  blame."  In  any  event,  where  a  book  is 
published  consisting  of  matter  pirated  from  the  plain- 
tiffs works  intermixed  with  original  matter,  the  Court 
without  waiting  till  all  the  parts  which  have  been 
pirated  can  be  distinctly  ascertained  will  enjoin  the 
defendant  from  publishing  his  book  containing  any 
articles  pirated  from  the  plaintiff's  work.1 

Similarity  of  appearance  has  often  led  the  Court 
to  grant  an  injunction ;  but  the  similarity  must  be 
misleading,  i.e.  such  as  an  intending  purchaser  of  the 
one  might  be  misled  into  purchasing  the  other.2  The 
question  is :  Did  the  defendant  dishonestly  pass  off 
his  work  as  the  work  of  the  plaintiffs  ?  The  defend- 
ants are  not  entitled  to  publish  a  work  with  such  a 
title,  or  in  such  a  form  as  to  binding  or  general  appear- 
ance as  to  be  a  colourable  imitation  of  the  plaintiff.8 
But  if  the  similarity  be  not  deceptive, — i.e.  if  a  paper 
be  started  with  the  title  "  Punch  and  Judy,"  in  the 
face  of  two  existing  papers  one  called  "  Punch"  and 
one  called  "  Judy, "-—an  injunction  would  not  be 
granted.4 

Restriction  in  cases  It  should  be  noted  that  sec.  9  of  the  Act  lays 
of  architecture,  down  a  special  restriction  on  remedies  in  cases  of 
architecture.  "  Where  the  construction  of  a  building 
or  other  structure  which  infringes  or  which,  if  com- 
pleted, would  infringe  the  copyright  in  some  other 
work  has  been  commenced,  the  owner  of  the  copyright 
shall  not  be  entitled  to  obtain  an  injunction  or  inter- 
dict to  restrain  the  construction  of  such  building  or 
structure  or  to  order  its  demolition."  The  alternative 
remedy  by  way  of  damages  is  no  doubt  open  to  him. 
The  next  remedy  is  by  way  of  damages.  The 
measure  of  damages  will  be,  as  in  the  case  of  in- 
fringement of  any  other  right,  the  loss  suffered  by 
the  owner  of  the  copyright  on  account  of  the  diminu- 
tion of  the  sale  of  his  work,  of  the  loss  of  profit 
which  he  might  otherwise  have  made.  But  only 

1  Lewis  v.  Fullarton  (1839)  2  Beav.  6  at  p.   14  s.c.   48  Etig.  Rep.  1080 
followed  in  Kelly  v.  Morris  (r'866)  ly.R.  i  Eq.  697  at  p.  701. 

2  See  the  Camel  Hair  Belting  Case  (which  was  the  case  of  a  Trade  name) 
Frank   Reddaway  v.    George  Banham  (1896)  A.C.   199;  approved  in  Parsons 
v.  Gillespie  (1898)  A.C.  239. 

3  Mack  v.  Fetter  (1872)   I,.R.  14  Eq.  431  ;  Metzlerv.  Wood  (1878)  8   Ch. 
D.  609. 

*  Bradbury  v.   Beeton   (1869)  1 8    W.R.    33  ;  Borthwick  v.    Evening  Post 
(1888)  37  Ch.  D.  449. 


283 

nominal  damages1  would  be  awarded,  if  the  defendant 
has  suppressed  the  infringement  and  has  removed 
all  cause  of  complaint.  There  is  another  way  in 
which  the  Act  allows  him  compensation.  The 
plaintiff  may  base  his  claim  for  damages  on  section 
7,  schedule  I  of  the  Act  which  provides  that  "all  in- 
fringing copies  of  any  work  in  which  copyright  sub- 
sists, or  of  any  substantial  part  thereof,  and  all  plates 
used  or  intended  to  be  used  for  the  production  of 
such  infringing  copies,  shall  be  deemed  to  be  the 
property  of  the  owner  of  the  copyright,  who  accord- 
ingly may  take  proceedings  for  the  recovery  of 
possession  thereof  or  in  respect  of  the  conversion 
thereof."  It  appears  that  under  this  section  the 
plaintiff  would  get  by  way  of  compensation  the  price 
of  every  copy  of  the  work  sold.  As  observed  by 
James  L,.J.  in  Pike  v.  Nicholas*  the  defendant  is  to 
account  for  every  copy  of  the  book  sold  as  if  it  had 
been  a  copy  of  the  plaintiffs,  and  to  pay  the  plaintiff 
the  profit  which  he  would  have  received  from  the  sale 
of  so  many  additional  copies.  It  will  be  observed 
that  section  7  besides  providing  for  damages  as  in  an 
action  for  conversion  of  the  books  which  the  defend- 
ant has  actually  sold,  affords  a  further  remedy  to  the 
plaintiff  in  the  shape  of  delivery  up  of  all  books  in 
the  defendant's  possession  as  in  an  action  of  detinue.8 
It  has  sometimes  been  contended  that  the  plaintiff 
who  claims  to  sue  under  this  section  must  elect  to  sue 
either  in  detinue  or  in  trover  and  cannot  sue  in  both ; 
but  it  has  been  held  that  he  can  pursue  both  the 
remedies  simultaneously.4  If  the  piracy  is  only  of  a 
part  of  the  work,  the  plaintiff,  nevertheless,  can 
recover  possession  of  the  whole,  unless  the  pirated 
parts  can  be  separated  from  the  non-pirated  parts,6  or 
unless  the  infringement  is  not  of  a  'substantial  part' 
of  the  work.8 


l  Hanfstaengl  v.  W.  H.  Smith  6-  Sons  (1905)  I  Ch.  519. 
^  5  Ch.  Ap.  251.     See  also  Delfe  v.  Delamotte  (1857)  3  K.  &  J.  581  ;  s.c. 
112  R.R.  292;  s.c.  69  Eng.  Rep.  1241. 

3  Muddock  v.  Blackwood  (1898)  i  Ch.  58. 
*  Ibid. 

5  Mawman  v,  Tegg  (1826)  2  Russ.  385  at  p.  391   s.c.   38  Eng.  Rep.  380.  ; 
Warne  &•  Co.   v.   Seeborhm  (1888)    39  Ch.   D.    73   at  p.  83;  Boosey  &  Co  v. 
Whight  &>  Co.  (No.  2)  (1899),  31  I/.T.   265.  See  also  Stevens  v.   Wildy  (1850) 
19  LJ   Ch.  190. 

6  S.  7,  sch.  I  of  the  Act. 


284 


Account  of  profits  Another   remedy    is    an   account   of   profits,— an 

equitable  remedy  which  is  incidental  to  the  right  of 
injunction.1  But  a  plaintiff  cannot  have  both  an  ac- 
count of  profits  and  an  enquiry  into  damages  ;  he  must 
elect  one  of  them.2  The  oft-quoted  observation  of 
Wigram  V.C.  in  Colburn  v.  Simms6  illustrates  lucidly 
the  principle  on  which  an  account  is  granted.  "  It  is 
true/'  says  he,  "that  the  Court  does  not  by  any 
account,  accurately  measure  the  damage  sustained 
by  the  proprietor  of  an  expensive  work  from  the 
invasion  of  his  copyright  by  the  publication  of  a 
cheaper  book.  It  is  impossible  to  know  how  many 
copies  of  the  dearer  book  are  excluded  from  sale  by 
the  interposition  of  the  cheaper  one.  The  court,  by 
the  account,  as  the  nearest  approximation  which  it 
can  make  to  justice,  takes  from  the  wrong  doer  all  the 
profits  he  has  made  by  his  piracy,  and  gives  them  to 
the  party  who  has  been  wronged.  In  doing  this  the 
Court  may  often  give  the  injured  party  more,  in  fact, 
than  he  is  entitled  to,  for  non  constat  that  a  single 
additional  copy  of  the  more  expensive  book  would 
have  been  sold,  if  the  injury  by  the  sale  of  the  cheaper 
book  had  not  been  committed.  The  Court  of  Equity, 
however,  does  not  give  anything  beyond  the  account." 
But  it  appears  that  where  there  are  no  profits,  or 
where  there  is  no  adequate  means  of  ascertaining  the 
profits  the  Court  will  give  damages  and  not  order  an 
account.4 

In  an  action  for  infringement  of  copyright,  the 
law  has  laid  down  certain  presumptions  which  will  be 
found  in  sub-section  (3)  of  section  6  of  schedule  I  of 
the  Act.  First,  the  work  shall  be  presumed  to  be  a 
work  in  which  copyright  subsists  (unless  the  defend- 
ant puts  in  issue  the  existence  of  the  copyright), 
and,  secondly,  the  plaintiff  shall  be  presumed  to  be 
the  owner  of  the  copyright,  unless,  of  course  the 
defendant  puts  in  issue  the  title  of  the  plaintiff. 

1  Baily  v.  Taylor  (1829)  i  Russ.  and  My.  73  ;  s.c.  39  Eng.  Rep.  28 ;  Kelly 
v.  Hooper  (1840)  I  Y.  and  C.C.C.  197  ;  s.c.  62  Eng.  Rep.  852. 

2  De    Vitre   v.    Belts   (1873)  L.R.  6  H.L.C.   319   (which  was  a  case  of  in- 
fringement of  a  patent). 

3  (1843)  2  Ha.   543  at  p.  560;  s.c.  67   Eng.    Rep.  224.     See   also  Pike  v. 
Nicholas  (1870)  5  Ch.  A.  251  at  p.  255. 

*  Powell  v.  Aikin  (1857)  4  K.  and  J.  343  at  p.  351 ;  s.c.  70  Eng.  Rep.  144  ; 
Ma-vman  v.  Tegg  (1826)  2  Russ.  385  at  p.  400;  s.c.  38.  Eng.  Rep.  380. 


Statutory  pre- 
sumptions. 


285 

Where  any  such  question  arises  for  determination, 
then  the  person  whose  name  appears  on  the  work 
purporting  to  be  that  of  the  author,  shall  be  presumed 
to  be  the  author,  unless  the  contrary  is  proved ;  or, 
if  no  name  appears,  or  if  the  name  appearing  is  only 
a  pseudonym,  then  the  person  whose  name  appears 
to  be  the  publisher  or  proprietor  of  the  work,  shall 
be  presumed  to  be  the  owner  of  the  copyright,  unless 
the  contrary  is  shown. 

The   costs  of  all  parties  in  any   proceedings  in  costs, 
respect  of  the  infringement  of  copyright  shall  be  in 
the  absolute  discretion  of  the  Court. 

There  cannot  be  one  action  against  several  persons  Action  against 
infringing   the    copyright,    the    right   of    an    author several  infrin^ers 
against  different  book-sellers  selling  the  same  spurious 
edition  of  his  work  not  being  joint,  but   a  distinct 
right  against  each.1 

The  summary  remedies  (which  apply  to  all  cases  summary 
except  cases  of  architecture  mentioned  in  section  9, 
schedule  I  of  the  Act)  for  infringement  of  copyright 
are  laid  down  in  sections  7  to  12  of  the  Act.  A  fine 
of  twenty  rupees  for  every  infringing  copy  (subject 
to  a  maximum  of  five  hundred  rupees  in  respect  of 
infringements  comprised  in  the  same  transaction), 
shall  be  levied  upon  a  person  who,  knowingly,  makes 
or  imports  into  British  India  for  sale  or  hire,  or  sells 
or  lets  for  hire,  or  by  way  of  trade  exposes  or  offers 
for  sale  or  hire,  or  distributes,  either  for  the  purposes 
of  trade  or  to  an  extent  affecting  prejudicially  the 
owner  of  the  copyright,  or  exhibits  in  public  by  way 
of  trade,  any  infringing  copy  of  a  work  in  which 
copyright  subsists.  A  fine  up  to  a  sum  of  five 
hundred  rupees  is  also  prescribed  for  a  person  who 
knowingly  makes  or  has  in  his  possession  any  plate 
for  making  infringing  copies,  or  knowingly  and  for 
his  private  profit  causes  any  work  (in  which  copy- 
right subsists)  to  be  performed  in  public,  without  the 
consent  of  the  owner  of  the  copyright.  Whether  an 
alleged  offender  is  convicted  or  not  the  Court  (which 
must  not  be  inferior  to  that  of  a  Presidency  Magistrate 
or  a  Magistrate  of  the  first  class)  before  which  the 
offence  is  tried,  may  order  that  all  copies  of  the 

1  Ditty  v.  Doig  (1790)  2  Ves.  486;  s.c.  Eng.  Rep.  738.  . 


286 


Special  remedy 
against  importa- 
tion. 


Exceptions  to  lia- 
bility— innocen  t 
inf  ringer. 


work  or  all  plates  in  the  possession  of  the  alleged 
offender,  which  appear  to  it  to  be  infringing  copies,  or 
plates  for  the  purpose  of  making  infringing  copies,  be 
destroyed  or  delivered  up  to  the  owner  of  the  copy- 
right or  otherwise  dealt  with  as  the  Court  may  think 
fit.1  A  subsequent  off ence  is  punishable  with  simple 
imprisonment  which  may  extend  to  one  month,  or 
with  fine  which  may  extend  to  one  thousand  rupees, 
or  with  both. 

There  is  a  special  remedy  provided  for  in  section 
6  of  the  Act  which  prohibits  importation  of  (<  copies 
made  out  of  British  India  of  any  work  in  which  copy- 
right subsists  which  if  made  in  British  India  would 
infringe  copyright,  and  as  to  which  the  owner  of  the 
copyright  gives  notice  in  writing  by  himself  or  by  his 
agent  to  the  Chief  Customs  Officer,  that  he  is  desirous 
that  such  copies  should  not  be  imported  into  British 
India."  On  the  owner  of  the  copyright  giving  such 
notice,  the  copies  will  be  deemed  to  be  prohibited 
imports  within  the  meaning  of  section  18  of  the  Sea 
Customs  Act  (VIII  of  1878).  For  further  details  as 
to  the  procedure  laid  down  in  the  section,  the  reader 
is  referred  to  sub-clauses  (2)  to  (5)  of  the  section. 

We  shall  now  consider  the  exceptions  to  liability 
for  infringement  of  copyright.  The  most  important 
exception  is  that  laid  down  in  sec.  8  of  the  Act, 
exempting  the  innocent  infringer  from  liability  to  pay 
damages.  The  meaning  of  the  section,  however,  is 
far  from  clear.  What  is  the  test  of  innocence  ?  Let 
us  consider  for  a  moment  the  wording  of  the  sec- 
tion. "  Where  proceedings  are  taken  in  respect  of 
the  infringement  of  the  copyright  in  any  work,  and 
the  defendant  in  his  defence  alleges  that  he  was  not 
aware  of  the  existence  of  the  copyright  in  the  work, 
the  plaintiff  shall  not  be  entitled  to  any  remedy  other 
than  an  injunction  or  interdict  in  respect  of  the  in- 
fringement if  the  defendant  proves  that  at  the  date 
of  the  infringement  he  was  not  aware,  and  had  no 
reasonable  ground  for  suspecting  that  copyright  sub- 


1  An  appeal  is  allowed  against  such  an  order  for  destruction  or  delivery 
up  of  copies  within  thirty  days  of  the  date  of  such  order  and  it  lies  to  the 
Court  to  which  appeals  from  the  Court  making  the  order  ordinarily  lie. 
The  appellate  court  is  given  the  power  to  stay  execution  of  the  order  pend- 
ing the  appeal. 


287 


sisted  in  the  work."  Thus  it  appears  that  innocence 
under  the  law  is  equivalent  to  ignorance  that  copy- 
right subsisted  in  the  work.  In  the  case  of  Byrne  v. 
Statist  Co.,  decided  in  IQI4,1  this  question  came  up 
for  consideration.  The  facts  were  as  follows  :-B.  was 
employed  by  the  proprietors  of  a  newspaper  to  trans- 
late and  summarise  a  speech  of  the  Governor  of 
Bahia  State  (Brazil)  for  publication  as  an  advertise- 
ment in  their  paper.  The  advertisement  appeared  in 
the  paper  with  the  words  at  the  end  "  Translated 
from  the  Portugese  language  by  F.  D.  Byrne."  The 
defendants  subsequently  obtained  permission  from 
the  Governor  to  publish  it  as  an  advertisement  in 
their  paper  for  which  they  were  duly  paid,  and  they 
reproduced  the  whole  of  it  verbatim.  It  was  held  in 
a  suit  for  infringement  of  copyright  that  sec  8  did 
not  exempt  the  defendants  from  liability.  Bailhache 
J.  observed:  "The  position  of  the  defendants  was 
not  so  much  that  they  did  not  suspect  copyright,  as 
that  they  supposed  the  copyright  was  in  the  Governor 
of  Bahia  whose  instructions  for  its  reproduction  they 
had  obtained.  This  merely  amounts  to  saying  that 
they  supposed  themselves  to  have  the  authority  of 
the  owner  of  the  copyright,  a  very  different  thing 
from  alleging  and  proving  that  they  did  not  suspect 
that  any  copyright  existed.  It  is  this  latter  state  of 
mind  that  sec.  8  requires  to  be  proved  and  sec.  8  is 
no  protection  to  a  person  who,  knowing  or  suspecting 
that  copyright  exists,  makes  a  mistake  as  to  the 
owner  of  the  copyright  and  under  that  mistake  ob- 
tains authority  to  publish  from  a  person  who  is  not 
in  fact  the  owner."'  As  Mr.  Copinger  says  in  his 
well-known  book  on  the  law  of  copyright,  the  only 
grounds  for  not  suspecting  copyright  appear  to  be 
either  (a)  that  the  period  of  copyright  protection  has 
run  out  or  (b)  that  he  thinks  that  the  work  is  of  such 
a  character  that  it  ought  not  to  be  a  subject  of  copy- 
right. Thus  after  all  sec.  8  does  not  really  give  much 
of  an  exemption  if  this  is  what  innocent  infringement 
means. 

The  other  recognised  exceptions  to  liability  are  Libellous,  immoral, 
independent  of  the  Act  and  we  have  to  turn  to 


1914  i  K.B.  622. 


Ibid,  at  p.  628. 


288 

law  for  them.  From  years  past  there  have  been 
many  cases  which  lay  down  the  doctrine  that  copy- 
right cannot  exist  in  works  of  libellous,  immoral,' 
obscene  or  irreligious  tendency.  For  the  author  in 
order  to  establish  his  copyright  must  first  of  all 
establish  his  right  to  sell  the  work,  and  if  the  work 
be  objectionable  on  any  of  the  grounds  above  men- 
tioned he  cannot  acquire  property  therein,  and  there- 
fore he  cannot  sell  it.  Copyright,  therefore,  would 
be  out  of  the  question.  In  the  case,  of  Stockdale  v. 
Onwhyn 2  an  action  had  been  brought  for  the  purpose 
of  recovering  compensation  in  damages  for  piracy  of 
a  publication  entitled  "  The  Memoirs  of  Harriette 
Wilson."  The  work  was  libellous  and  licentious. 
Abbott,  C.J.,  said,  "It  would  be  a  disgrace  to  the 
common  law  could  a  doubt  be  entertained  on  the 
subject"  (viz.,  that  the  right  does  not  subsist  in  a 
book  of  which  the  publication  is  itself  an  offence 
against  the  law.)3  In  Murray  v.  Benbow*  an  applica- 
tion for  an  injunction  to  restrain  the  defendants  from 
publishing  a  pirated  edition  of  Lord  Byron's  poem 
"Cain"  was  refused  on  the  same  principle.  In  an- 
other case  an  injunction  which  had  been  granted 
restraining  an  infringement  of  the  same  poet's  work 
"  Don  Juan"  was  dissolved  by  Vice-Chancellor  Leach 
on  similar  grounds.  In  Lawrence  v.  Smith*  Lord 
Eldon  in  dissolving  the  injunction  remarked,  "Look- 
ing at  the  general  tenor  of  the  work  and  at  many 
particular  parts  of  it,  recollecting  that  the  immorta- 
lity of  the  soul  is  one  of  the  doctrines  of  the  scripture, 
considering  that  the  law  does  not  give  protection  to 
those  who  contradict  scripture,  and  entertaining  a 
doubt,  I  think  a  rational  doubt,  whether  the  book 
does  not  violate  the  law,  I  cannot  continue  the  in- 
junction." The  decisions  go  further  than  this  and 
Works  intended  to  lay  down  that  there  can  be  no  copyright  even  in  works 

deceive  the  public. 

1  Glyn  v.  Weston  Feature  Film  Co.  L.R.  (1916)1  Ch.  261. 

2  (1826)  5  B.  &  C.  173,  s.c.  1 08  Eng.  Rep.  65. 

3  It  is  interesting  to  note  that  the  printer  of  the  book  above  referred 
to  brought  an  action  for  his  bill  against  the  publisher.     It  was  held  that  he 
could  not   maintain  such  an  action.     Best,  C.J.,  observed  that  the  printer 
and  the  publisher  were  participes  criminis  and  that  he  would  not,  as  Lord 
Kenyon  once  said,  sit  to  take  an  account  between  two  robbers  on  Hounslow 
Heath. 

*  (i822)Jac.  474  n  ;  s.c.  37  Eng.  Rep.  929. 

&  (1822)  Jae.  471  at  p.  473,  s.c.  37.  Eng.  Rep.  928. 


289 

which  were  intended  to  deceive  the  public,  so  that  an  Works*  nteuded  to 
action  for  pirating  a  work  falsely  professing  to  be  a  deceive  the  public, 
translation  from  the  German  of  an  author  well-known 
for  writings  of  a  devotional  character,  in  other  words, 
a  work  apparently  planned  for  defrauding  purchasers, 
could  not  succeed.1 

A  few  words  are  needed  to  indicate  the  position  Foreign  authors, 
of  foreign  authors,  or  that  of  works  published  in  a 
foreign  country,  or  produced  by  authors  who  at  the 
time  of  production  are  either  subjects  or  citizens  of 
a  foreign  country  or  are  resident  in  a  foreign  country. 
Section  29,  schedule  I,  of  the  Act  deals  with  the 
subject,  and  its  provisions  are  so  framed  as  to  enable 
the  Crown  to  ratify  the  decision  of  the  Revised  Berne 
Convention  of  iqo8.  Subject  to  certain  provisos  the 
section  lays  down  that  His  Majesty  may  by  Order  in 
Council  direct  that  the  Act  (i.e.  Copyright  Act,  1911, 
i  &  2  Geo.  V,  C.  46,  except  such  parts,  if  any,  there- 
of as  may  be  specified  in  the  Order)  shall  apply  (a)  to 
works  first  published  in  a  foreign  country  to  which 
the  Order  relates,  in  like  manner  as  if  they  were  first 
published  within  the  parts  of  His  Majesty's  dominions 
to  which  the  Act  extends ;  (b)  to  literary,  dramatic, 
musical  and  artistic  works,  or  any  class  thereof,  the 
authors  whereof  were  at  the  time  of  the  making  of  the 
works  subjects  or  citizens  of  a  foreign  country  to 
which  the  Order  relates,  in  like  manner  as  if  the 
authors  were  British  subjects;  (c)  in  respect  of  resi- 
dence in  a  foreign  country  to  which  the  order  relates, 
in  like  manner  as  if  such  residence  were  residence  in 
the  parts  of  His  Majesty's  Dominions  to  which  the 
Act  extends;  and  thereupon  the  Act  shall  apply 
accordingly.  Section  30  provides  that  such  Orders  in 
Council  shall  apply  to  all  His  Majesty 's  Dominions  to 
which  the  Act  extends  except  self-governing  domi- 
nions, which  may  make  the  like  orders  on  their  own 
behalf. 

DESIGNS. 

A  subject  allied  to  copyright  is  that  of  "  Designs,"  Definition, 
which  has  been  dealt  with  by  the  Indian  Legislature 
in  the  Indian  Patents  and  Designs  Act  (II  of  1911). 
By  section  2,  sub-section  (5)  of  the  said  Act  a  "  Design  " 

1   Wright  v.  Tallis  (1845)  i  C.B.  893,  s.c.  135  Eng.  Rep.  794. 

37 


2QO 

is  defined  as  meaning  "any  design1  applicable  to  any 
article,  whether  the  design  is  applicable  for  pattern, 
or  for  the  shape  or  configuration,  or  for  the  ornament 
thereof,  or  for  any  two  or  more  of  such  purposes,  and 
by  whatever  means  it  is  applicable,  whether  by  print- 
ing, painting,  embroidering,  weaving,  sewing,  modell- 
ing, casting,  embossing,  engraving,  staining,  or  any 
other  means  whatever,  manual,  mechanical  or  chemi- 
cal, separate  or  combined."  A  design  must  be  dis- 
tinguished from  a  trade  mark,2  i.e.  mark  used  for 
denoting  that  goods  are  manufacture  or  merchandise 
of  a  particular  person,  nor  does  it  include  a  property 
mark,  i.e.  a  mark  used  for  denoting  that  moveable 
property  belongs  to  a  particular  person.  Again,  the 
distinction  between  a  '  Design '  and  an  '  Artistic  work  ' 
( as  defined  in  section  35,  schedule  I  of  the  Indian 
Copyright  Act,  III  of  1914)  should  not  be  lost  sight  of. 
An  artistic  work  is  valued  and  protected  for  its  own 
artistic  qualities,  whereas  a  design  must  be  applied  to 
another  article,  and  when  it  is  so  applied  the  article  is 
purchased  not  only  because  of  the  artistic  qualities  of 
the  design  on  it,  but  primarily  because  of  the  value 
and  utility  of  the  article  itself.3 

A  design  must  be  Unlike  copyright  under  the  Copyright  Act  (III  of 

1914),  a  design  must  be  registered  under  the  Indian 
Patents  and  Designs  Act  (II  of  1911)  for  being  protect- 
ed from  infringement.  Under  section  43  of  the  Act, 
a  design  can  be  registered  by  the  Controller  when  an 
application  is  made  to  him  in  the  prescribed  form  and 
accompanied  by  the  prescribed  fee.  The  requisite 
conditions  are :  (i)  the  application  must  be  by  a  person 
claiming  to  be  proprietor  of  the  design ;  (2)  the  design 
must  be  new  or  original  *  ;  (3)  the  design  must  not 
have  been  previously  published  in  India.  The  same 


1  See  criticism  by  Lindley  L.J.,  in  In  re  Clarke's  Design  (1896),  2,  Ch.  38 
at  p,  43  :   "  Unfortunately  the  section  says  that  a  design    means  a  design 
.     .     .     .     the  word  '  design  ',  therefore,  must  be  taken  to  be  used  in  its  ordi- 
nary signification  of  something  marked  out— a  plan  or  representation  of  some- 
thing." 

2  See  Baker  Tuckers  &  Go.  v.  Sutherland  McGuffle  cfcCo.,  16  W.R.  90;  8 
B.L.R.  298. 

3  Millar  and  Lang  Ltd.  v.  Polak  (1908)  i,  Ch.  438  ;  Hanfstaengl  v.  Empire 
Palace  (1894)  2,  Ch.  i,  at  p.  6. 

4  There  is  novelty  in  applying  an  old  thing  to  a  new  use — Ernest  otto 
Gammeter   v.  The  Controller  of   Patents    and   Designs  and  another   22  C.W. 
N.  580  ;  48  I.C.  437.    In  re  Clark's  Design  (1896)  2,  Ch.  38.    In  re  Reade  and 
Greswells  '  Design  (1889)  42,  Ch.D.  260. 


design  may  be  registered  in  more  than  one  class,  and 
the  registration  takes  effect  from  the  date  of  the 
application.  In  case  of  doubt  as  to  the  class  in 
which  a  design  ought  to  be  registered  the  Controller 
may  decide  the  question.1  An  appeal  is  provided 
by  sub -section  (4)  of  the  above  section  to  the  Gover- 
nor-General in  Council,  in  case  of  refusal  of  registra- 
tion by  the  Controller.  Under  section  47  the  protec- 
tion afforded  to  a  registered  design  is  for  five  years 
only,  renewable  for  two  more  periods  of  five  years 
each,  thus  making  the  maximum  number  of  years  to 
be  fifteen.  This  period,  it  will  be  observed,  is  shorter 
than  that  given  by  the  Copyright  Act,  which  is  the 
life  of  the  author  and  a  period  of  fifty  years  after  his 
death.  Section  22,  schedule  I  of  the  Copyright  Act, 
lays  down  that  that  Act  shall  not  apply  to  designs 
capable  of  being  registered  under  the  Patents  and  De- 
signs Act  except  designs,  which,  though  capable  of 
being  so  registered,  are  not  used  or  intended  to  be 
used  as  models  or  patterns  to  be  multiplied  by  any 
industrial  process. 

It  is  important  to  note  the  legal  effect  of  disclo-  Effect  of  disclosure, 
sure  of  a  design  to  any  other  person,  dealt  with 
in  section  49.  If  disclosure  is  made  by  the  pro- 
prietor to  any  other  person  under  circumstances  which 
would  make  it  contrary  to  good  faith  for  that  other 
person  to  use  or  publish  the  design  it  shall  not  be 
deemed  to  be  a  publication  of  the  design  sufficient  to 
invalidate  the  copyright,  if  registration  thereof  is 
obtained  subsequently  to  the  disclosure.  So  much 
with  regard  to  disclosure  by  the  proprietor  himself. 
The  effect  would  be  the  same  if  the  disclosure  of  the 
design  be  made  in  breach  of  good  faith  by  any  person 
other  than  the  proprietor  of  the  design.  Similarly, 
the  acceptance  of  a  first  and  confidential  order  of 
goods  bearing  a  new  and  original  textile  design  in- 
tended for  registration  shall  not  be  deemed  to  be  a 
publication  invalidating  the  copyright  if  registration 
thereof  is  obtained  subsequently  to  the  acceptance. 

Infringement  of   copyright  in  registered  designs 


l  Section  44  gives  liberty  to  the  proprietor  of  the  design  which  has  been 
registered  in  one  or  more  classes  of  goods  to  apply  and  have  it  registered 
in  some  one  or  more  other  classes. 


292 

- is  dealt  with.  in  section  53  of  the  Act.     Infringement 
deigns.          consists  in  (i)  applying,  or  causing  to  be  applied  for 
the  purpose  of  sale,  to  any  article   (in  any   class  of 
goods  in  which  the  design  is  registered,  the  design  or 
any   fraudulent   or  obvious  imitation  thereof,    or  in 
doing  anything  with  a  view  to  enable  the  design  to  be 
so  applied ;  or  (ii)  publishing  or  exposing  or  causing  to 
be  published  or  exposed  for  sale  any  article  knowing 
that  the  registered  design  or  any  fraudulent   or  ob- 
vious imitation  thereof  has  been  applied  to  the  article 
without  the   consent  of  the   proprietor.     The    conse- 
quences of  such  infringement  are  indicated  in  sub-clause 
(2)  of  section  53,  viz.,  the  infringer  may  be  restrained 
by  injunction  from  repeating  the  infringement,  or  he 
may  be  ordered  to  pay  damages,  or  both,  in  a  proper 
suit  filed  for  the  purpose  by  the  proprietor.     The  sec- 
tion also  provides  for  a  summary  remedy,  viz,,  that 
the  wrong-doer  has  to  pay  to  the  registered  proprietor 
for  every  contravention  a  sum  not  exceeding  rupees 
five  hundred  recoverable  as  (a  contract  debt,  but  the 
total  sum   recoverable  in  respect  of  one  design  shall 
not  exceed  one  thousand  rupees.     Section  54  makes 
the  provisions  of  the  Act  with  regard  to  certificates 
of  the  validity  of  a  patent  and  to  the  remedy  in  case 
of  groundless  threats  of  legal  proceedings  by  a  paten- 
tee, applicable  to  the  case  of  registered  designs   (vide 
sections  32  and  36  of  the  Patents  and  Designs  Act, 
ii  of  1911). 

°f  The  subject  of  remedies  comprehends   within  it 

the  rectification  of  Registers  of  Patents  and  Designs. 
Power  is  given  to  the  Controller  under  the  Act  to  ef- 
fect such  rectification  under  various  circumstances. 
Section  62  provides  for  correction  of  clerical  errors 
in  connection  with  the  registration  of  patents  and  de- 
signs. It  further  confers  on  the  Controller  the  power 
to  cancel  the  registration  of  a  design  either  wholly 
or  in  respect  of  any  particular  goods  in  connection 
with  which  the  design  is  registered.  The  question 
is  on  whose  application  the  Controller  can  effect  such 
cancellation  or  alteration  of  the  entry  in  the  register. 
The  section  itself  as  well  as  the  prescribed  form  of 
application  (Form  No.  20)  is  silent  on  the  point.  But 
it  has  been  held  that  the  only  person  who  can  apply 
under  section  62  is  the  registered  proprietor  or  some 


293 

person  in  whom  his  interest  is  vested.1  If  the  appli- 
cation for  cancellation  of  entry  is  made  by  a  person 
hostile  to  the  registered  owner  and  if  the  Controller 
misconceiving  his  jurisdiction  cancels  the  entry,  what 
relief  is  open  to  the  person  aggrieved  ?  Section  64 
provides  that  (i)  a  High  Court  may,  on  the  appli- 
cation in  the  prescribed  manner,  of  any  person  ag- 
grieved by  the  non-insertion  in,  or  omission  from,  the 
Register  of  Patents  or  Designs  of  any  entry,  or  by 
any  entry  made  in  either  such  register  without  suffici- 
ent cause,  or  by  any  entry  wrongly  remaining  on 
either  such  register,  or  by  an  error  or  defect  in  entry 
in  either  such  register,  make  such  order  for  making, 
expunging  or  varying  such  entry  as  it  may  think  fit ; 
(2)  the  Court  may  in  any  proceeding  under  this  sec- 
tion decide  any  question  that  it  may  be  necessary 
or  expedient  to  decide  in  connection  with  the  rectifi- 
cation of  a  register.  It  has  been  held  that  the 
terms  of  this  section  do  not  include  the  case  of  can- 
cellation of  an  entry  by  the  Controller.  Once  such 
cancellation  is  made,  whether  rightly  or  wrongly,  the 
High  Court  has  no  power  under  the  provisions  of  the 
Act  to  interfere  with  it.  But  under  section  45  of  the 
Specific  Relief  Act  it  can  interfere  when  in  the  opinion 
of  the  High  Court  the  doing  or  forbearing  of  any 
specific  act  by  any  person  holding  a  public  office, 
is  consonant  to  right  and  justice/  Thus  before  it 
can  direct  the  Controller  to  restore  the  entry  the 
High  Court  has  first  to  consider  the  case  on  the  me- 
rits. 


l    Ernest    otto    G ammeter  v.    The  Controller  of    Patents  or  Designs    and 
another,  22  C.W.N.  580;  48  I.C.  437. 
i  Ibid. 


LECTURE  VIII. 
THE  LAW  OF  TRADE-MARKS  AND  TRADE-NAMES. 

The  law  of  trade-  The  law  of  trade-marks  is  a  comparatively  recent 

growth?  ]  growth,  the  whole  subject  having  developed  during 

the  last  century.  Marks,  or  symbols  of  authenticity 
have  been  used  by  traders  at  all  times,  ancient  and 
modern.  Signs  or  signboards,  watermark  upon  paper, 
and  other  devices  of  a  like  nature  are  all  more  or  less 
of  the  nature  of  trade-mark,  or  marks  authenticating 
the  genuineness  or  quality  of  the  goods. of  a  particular 
trader.  While,  however,  marks  or  symbols  were  com- 
mon in  olden  times,  there  were  scarcely  any  actions  for 
infringement  of  marks.  These  have  come  in  the  wake 
of  commerce  and  competition  and  the  development  of 
trades  and  industries  commanding  wide  markets. 
Occasionally  in  the  days  of  old  we  find  complaints 
made  by  traders  of  dishonest  attempts  on  the  part  of 
rivals  to  deprive  them  of  their  legitimate  profits  by  a 
colourable  infringement  of  their  trade -marks.  An 
interesting  specimen  of  this  kind  appears  as  far  back 
as  1518  on  a  notice  affixed  to  the  edition  of  Alder's 
Livy  published  in  that  year.  The  following  passage 
from  the  preface  to  the  book  will  speak  for  itself : 
"  Lastly,  I  must  draw  the  attention  of  the  student  to 
the  fact  of  some  Florentine  printers,  seeing  that  they 
could  not  equal  our  diligence  in  correcting  and  print- 
ing, have  resorted  to  their  usual  artifices.  To  Alder's 
'  Institutiones  Grammaticae '  printed  in  their  offices, 
they  have  affixed  our  well-known  sign  of  the  dolphin 
wound  round  the  anchor.  But  they  have  so  arranged 
it  that  any  person  who  is  in  the  least  acquainted  with 
the  books  of  our  production  cannot  fail  to  observe 
that  this  is  an  impudent  fraud ;  for  the  head  of  the 
dolphin  is  turned  to  the  left,  whereas  that  of  ours 
is  well-known  to  be  turned  to  the  right."1  It  is  said 
that  an  action  for  the  infringement  of  trade-mark  lay 
as  early  as  the  reign  of  James  I.  In  support  of  this 
proposition  the  case  of  Southern  v.  How 2  is  sometimes 


)  Cited  in  Salaman  on  Trade-marks. 

2  Popham  144;  Cro  Jac.  971  ;  Rolles  282. 


295 

cited.  That  was  a  case  against  a  clothier  who,  it  was 
alleged,  had  applied  the  mark  of  another  clothier  to  his 
own  ill-made  cloth,  and  it  was  held  that  an  action  for 
deceit  lay  on  that  account.  But  it  is  doubtful  whe- 
ther the  action  was  on  the  footing  of  infringement  of 
trade-mark.  One  of  the  reports'  has  it  that  the 
action  was  brought  by  the  owner  of  the  mark.  Accord- 
ing to  the  other  report/  the  action  was  by  the 
defrauded  purchaser.  In  either  case,  however,  it 
appears  to  have  been  treated  as  an  action  for  deceit. 

The  various  definitions  of  trade-mark  that  one 
comes  across  are  mostly  based  on  the  statutory  defi- 
nition,3 only  more  or  less  amplified  and  elaborated. 
The  essential  principles,  however,  are  well  set  out  in 
the  following  definition  by  Mr.  Upton,  a  learned 
American  author  :  c<  A  trade-mark  is  a  name,  symbol, 
figure,  letter,  form,  or  device,  adopted  and  used  by  a 
manufacturer  or  merchant  in  order  to  designate  goods 
that  he  manufactures  or  sells  and  to  distinguish  them 
from  those  manufactured  or  sold  by  another  ;  to  the 
end  that  they  may  be  known  in  the  trade  as  his,  and 
thus  enable  him  to  secure  such  profits  as  result  from 
an  established  reputation  for  superior  skill,  industry  or 
enterprise,  which  sign,  label,  symbol,  or  words  others 
have  not  an  equal  right  to  employ  for  the  same  pur- 
pose." A  shorter  definition  is  given  by  Mr.  Coddington 
in  his  book  on  American  Trade  Mark  Law.  He  defines 
trade- mark  as  "  a  name,  symbol,  figure,  letter,  form 
or  device,  adopted  and  used  by  a  manufacturer,  or 
merchant,  to  designate  the  goods  he  manufactures  or 
sells  and  to  distinguish  them  from  the  goods  of 
another."  The  Indian  Penal  Code  defines  trade  mark 
as  a  mark  used  for  denoting  that  goods  are  the  manu- 
facture or  merchandise  of  a  particular  person.  This 
definition  is  adopted  by  the  Indian  Merchandise  Marks 
Act  (ActIV  of  1889). 

The  principle   on  which  the  right  of  action  for  The  principle 
infringement  of  trade-mark  or  trade-designation  restsstated 
is  so  well  stated  in  the  famous  dictum  of  James,  L.J., 
that  I  cannot  do  better  than  give  it  in  his  own  words  : 
<(  No  man,"  said  he,  in  the  case  of  Singer  Manufacturing 

1  Popham  p.  144;  s.c.  79  Eng.  Rep.  1244. 

2  Cro  Jac.  471 ;  s.c.  79  Eng.  Rep.  402. 

*  E.g.  sec.  30  of  Stat.  5  Edw.  VII.  C.  15. 


296 

Co.  v.  Loog  l  (<  is  entitled  to  represent  his  goods  as  being 
the  goods  of  another  man,  and  no  man  is  permitted  to 
use  any  mark,  sign  or  symbol,  device  or  other  means, 
whereby,  without  making  a  direct  false  representation 
himself  to  a  purchaser  who  purchases  from  him,  he 
enables  such  purchaser  to  tell  a  lie  or  to  make  a  false 
representation  to  somebody  else  who  is  the  ultimate 
customer.  That  being,  as  it  appears  to  me,  a  com- 
prehensive statement  of  what  the  law  is  upon  the 
question  of  trade-mark  or  trade-designation,  I  am  of 
opinion  that  there  is  no  such  thing  as  a  monopoly  or 
a  property  in  the  nature  of  a  copyright,  or  in  the 
nature  of  a  patent,  in  the  use  of  any  name.  Whatever 
name  is  used  to  designate  goods,  anybody  may  use 
that  name  to  designate  goods,  always  subject  to  this, 
that  he  must  not,  as  I  said,  make  directly  or  through 
the  medium  of  another  person,  a  false  representation 
that  his  goods  are  the  goods  of  another  person."  L/ord 
Justice  James  calls  it  "  a  comprehensive  statement  of 
the  law."  So  it  is,  but  why  it  is  to  be  regarded  as  such 
does  not  appear  on  the  face  of  the  dictum  to  the 
ordinary  reader.  A  few  words  will  make  the  position 
clear.  A  man  may  pass  off  his  goods  as  the  goods  of 
another  in  various  ways.  One  ma}7  imitate  the  symbol 
or  mark  which  has  been  expressly  adopted  by  another 
trader  to  identify  his  goods  with  himself  and  to  distin- 
guish them  from  those  of  others.  This  would  be  a  case 
of  infringement  of  trade-mark.  Again,  one  may  imitate 
any  other  symbol  or  symbols  which  have,  in  course  of 
time,  become  associated  with  the  goods  of  a  particular 
trader,  so  as  in  fact  to  distinguish  or  identify  them. 
One  may  content  himself  with  imitating  no  more  than 
the  general  appearance  or  "get  up"  of  the  goods  of 
another  trader.  One  may  imitate  the  name  under  which 
another  trader  carries  on  his  trade.  All  these  would 
not  amount  to  infringement  of  trade-mark,  properly 
speaking ;  but  they  would  all  amount  to  conduct  such 
as  that  indicated  in  the  dictum  of  James,  L-J-  above 
quoted  whereby  a  trader  would  succeed  in  passing  off 
his  own  goods  as  the  goods  of  another  trader,  which 
enjoy  a  reputation  in  the  market. 

It  is,    therefore,    necessary  to  distinguish  at  the 


18  Ch.  D.  395  at  p.  412;  52  I,.J.  Ch.  48r. 


297 

outset  two  classes  of  cases.  In  one  class,  a  sort  of 
definite  property  right  is  set  up  in  the  use  of  a  trade 
mark,  and  on  an  infringement  of  that  right  an  action 
is  brought.  The  other  class  arises  out  of  conduct  of 
any  kind  whatever  which  is  calculated  to  pass  off  the 
goods  of  one  trader  as  the  goods  of  another  l  The 
former  may  be  called  trade-mark  cases  proper  and  the 
latter  "passing  off"  cases.  The  first  reported  case  in 
which  the  two  classes  were  distinguished  is  that  of 
Singer  Manufachtring  Co.  v.  Wilson  *  in  which  Jessel,  M. 
R.,  thus  drew  the  contrast  between  them  :  "The  cases 
which  have  come  before  the  court  may,  I  think,  be 
conveniently  divided  into  two  classes :  the  first  class, 
which  is  the  more  numerous  one,  consists  of  cases  where 
the  goods  manufactured  are  distinguished  by  some 
description  or  device  in  some  way  or  other  affixed 
to  the  article  sold.  It  may  be,  as  I  said  before,  descrip- 
tion, that  is,  it  may  consist  of  a  name  or  names,  or  a 
lengthy  description  consisting  of  names  with  superad- 
ded  words,  and  that  description  may  be  either  affixed 
to,  or  impressed  upon,  the  goods  themselves  by  means 
of  a  stamp  or  an  adhesive  label,  or  it  may  be  made  to 
accompany  the  goods  by  being  impressed  or  made  to 
adhere  to  an  envelope  or  case  containing  the  goods. 
Now,  as  to  this  class,  it  is  quite  immaterial  that  the 
maker  of  the  goods,  to  which — what  I  will  call  for 
the  sake  of  shortness — the  trade-mark  is  affixed  did 
not  know  that  it  was  a  trade-mark  and  had  not  the 
slightest  intention  of  defrauding  any  body.  The 
second  class  of  cases  are  of  a  totally  different  char- 
acter ;  they  are  always  cases  of  fraud. ;  They  are 
cases  where  the  defendant,  without  putting  any  trade- 
mark at  all,  on  his  goods,  or  putting  a  trade-mark 
which  is  admittedly  different  in  substance  from  the 
trade-mark,  if  any,  of  the  plaintiff  on  the  goods,  has 
represented  the  goods  as  being  goods  manufactured 
by  the  plaintiff.  What  the  defendant  has  said  or  done 
must  amount  to  a  representation  that  the  goods  to  be 


1  When  one  knowing  that  goods   are  not  made  by  a  particular  trader 
sells  them  as  and  for  the  goods  of  that  trader,  he  does  that  which  injures 
that  trader — Per  lyord  Blackburn,  Singer  Manufacturing  Co.  v.   Loog  (1892) 
8  A.C  ,  p.  29. 

2  2  Ch.  D.  434;   1874,  45  LJ.  Ch.  490. 

3  A  similar  view  was  expressed  in  the  case  of  Cheavin  v.  Walker  (1876)  5 
Ch.  D.  850  before  the  decision  by  the  House  of  Ivords  mentioned  later. 

38 


298 

sold  are  the  goods  of  the  plaintiff,  or  that  they  are 
manufactured  by  the  plaintiff.  What  amount  of 
representation  will  be  sufficient  for  that  purpose  must 
again  depend,  of  course,  on  the  facts  of  each  particu- 
lar case." 

The  view  expressed  by  Sir  George  Jessel  that  in 
the  second  class  of  cases  the  presence  of  fraudulent 
intention  is  essential  to  relief,  although  approved  by 
the  court  of  appeal,  was  not  accepted  by  the  House 
of  Lords.  There  it  was  laid  down  that  no  difference 
in  point  of  principle  exists  between  the  two  classes  of 
cases.  As  Lord  Cairns  observed,  since  the  decision  in 
Millington  v.  Fox  l  it  is  necessary  either  to  aver  or 
to  prove  fraud  :  "The  question"  said  he,  (< must  as  it 
seems  to  me,  be :  '  Are  the  advertisements  of  the  de- 
fendant, having  regard  to  the  evidence  in  the  case, 
calculated  to  mislead  an  unwary  purchaser."  Thus  it 
is  settled  law  now  that  even  where  there  is  no  infringe- 
ment of  a  trade-mark  or  of  any  mark  attached  to  any 
goods,  a  trader  will  not  be  allowed  to  "pass  off"  his 
goods  as  the  goods  of  another ;  whether  such  conduct 
on  his  part  is  intentional  or  not  does  not  affect  the 
question ;  all  that  is  necessary  to  inquire  is  whether 
the  trader  has  acted  in  such  a  manner  as  to  lead,  or 
as  is  calculated  to  lead,  to  deception.2  In  the  case 
of  Turton  v.  Turton*  the  position  was  accepted  and 
further  elucidated  by  Cotton,  LJ.,  who  said:  "No 
man  must  pass  off  his  goods  as  the  goods  of  another. 
*  *  *  *  Qf  course,  that  may  be  done  uninten- 
tionally ;  but  where  there  is  a  manifest  and  natural 
meaning  in  the  words  used  that  the  goods  are  the 
goods  of  somebody  else,  and  the  man  who  uses 
those  terms  uses  not  his  name  only,  but  somebody 
else's,  he  would  be  stopped  from  doing  so  as  soon  as 
he  is  aware  of  the  facts  which  make  the  prima  facie 
intention  and  result  of  what  he  is  doing,  passing  off 


1  3  My.  &  Cr.  338.  S.C.  40  E)ng.  Rep.  956. 

2  Hugh  Balfour  6-  Co.  v.  Edward,  Dundas,  Kilburn  &  Co.  i  Hyde  270,  ; 
Ewing  <&•  Co  v.  Grant  Smith  6-  Co.  2  Hyde  185  ;  Badische  Aniline   Und   Soda 
Fabrik  v.  Maneckji  Shapurji  Katrak   I.Iy.R.    17   Bom.   584;   Abdul  Salam  v. 
Hamidutta    15  I.C.    116;    Byramji  Cowasji   v.    Vera   Samabhai  Motibhai   36 
I.C.  965  ;  Khetra  Pal  v.  Pancham  Singh  I.Iy.R.  37  All.  446  (case  of  infringe- 
tnent    by    advertisement)  ;    Balladin  v.   Puranmull   30  I.C.    633  ;    Madhavji 
Dharamsey  Manufacturing  Co.,  Ltd.   v.  Central  India  Spinning  Weaving  and 
Manufacturing  Co.,  Ltd.  I.L,.R.  41  Bom.  49. 

3  (1899)  42  Ch.  D    128. 


299 

his  goods  as  the  goods  of  somebody  else.  It  was 
formerly  said  that  no  action  could  be  maintained 
unless  a  man  had  done  so  fraudulently  and  inten- 
tionally ;  but  when  he  finds  out  that  the  natural  con- 
struction of  what  he  is  doing,  when  the  facts  are 
known,  is  to  represent  his  goods  to  be  somebody  else's, 
then  he  should  be  stopped,  even  though  he  had 
originally  done  that  unintentionally  and  innocently." 

To  turn  to  the  first  class,  that  is,  the  cases  which  infringement  of 

*<  i    .  -*M  r  T  1  -r      trade-marks. 

turn  on  the  alleged  infringement  of  a  trade-mark.  In 
the  words  of  Lord  Westbury2  the  word  'trade-mark' 
is  the  designation  of  the  marks  or  symbols,  as  and 
when  applied  to  a  vendible  commodity,  and  the  exclu- 
sive right  to  make  such  user  or  application  is  rightly 
called  property."  The  essence  of  the  right  is  the 
reputed  association  in  the  market  of  the  particular 
mark  or  symbol  with  the  goods  of  the  plaintiff.8  It 
is,  therefore,  essential  to  prove  user  of  the  mark  by 
the  plaintiff,  and  further  that  the  mark  is  reputed  to 
be  the  plaintiff's.  In  some  cases  it  may  so  happen  that 
a  trade-mark  is  so  completely  personal  to  a  particular 
individual  as  of  necessity  to  import  that  the  goods 
bearing  the  mark  or  the  name  have  been  manufactured 
by  him  or  under  his  supervision.  The  Supreme  Court 
of  Massachusets  expressed  the  principle  involved  in 
such  cases  in  the  following  terms  :  "  There  may  no  doubt 
be  cases  where  the  personal  skill  of  an  artist  or  artisan 
may  so  far  enter  into  the  value  of  a  product  that  a 
trade-mark  bearing  his  name  would,  or  at  least  might, 


1  Ibid,  at  p.  141.    Even  an  innocent  carrier  of  infringing  articles  is  not 
protected.    Upmann  v.  Elkan  (1871)  ly.R.  7  Ch.  A.C.  130.    See  also  Beard  v. 
Turner  13  ly.T.N.S.  746. 

2  The  Leather  Cloth   Co,   v.    The  American  Leather  Cloth  Co.  4  De.  G.  J. 
and  S.  p.  142  ;  (1863)  L,.  J.   Ch.    1995.  c.  46  Eng.    Rep.  868.    See  also  Ford  v. 
Foster  (1872)  L.R.  7  Ch. ,  p  616,  where  Bacon,  V.C.,  describes  a  trade  mark  as 
follows  : — ' '  The  meaning  and  use  of  a  trade-mark  is  that  the  same  person 
dealing  in  goods,  no  matter  of  what  kind,  whether  of  his  own  manufacture 
or  not,  having  a  certain  defined  shape,  if  he  stamps  upon  them   some  indica- 
tion that  that  particular  article  is  his  and  his  only,  may  thereby  acquire  so 
far  an  exclusive  right  to  it  that  no  man  may  imitate  his  mark,  and  the  legal 
right    goes   no   further   than    that."     See    also    Abdul    Cadur    Allibhoy    v. 
Mahomedali  Hyderali,  3  Bom.  L.R.  220  which  lays  down  that  where  a  person 
uses  a  label   which  is  a  deliberate  combination  of  other   registered  labels 
with  a  view  to  represent  and  sell  his  wares  as  the  wares  of  others  cannot   be 
allowed  to    take  out  an   injunction    restraining   some  other    person    from 
imitating  his  label.    This  is  on  the  principle  that  a  plaintiff  must    come  into 
a  court  of  Equity  with  clean  hands. 

3  Graham  &>  Co.  v.  Kerr  Dodds  &>  Co.  3  B.L.R.  App.  4  ;  Karam  Elahi  &> 
Co   v.  Abdul  Aziz  4  I.C.  968 ;    Vadilal  v.  Burditt  6-  Co.  I. L.R.  30  Bom.  6t 


300 

imply   that   his    personal    work    of    supervision  was 
employed  in  the  manufacture;  and  in  such  cases  it 
would  be  a  fraud  upon  the  public  if  the  trade-mark 
should  be  used  by  other  persons."1 
NO  registration  of          ]jp  to  the  year  1 87 5,  there  was  no  registration  of 

trade  marks  in  Eng-  ,        j  1       •      T*       1        j  j    •  c-    *   • 

land  up  to  1875.  trade-marks  in  England,  and  in  every  case  of  infringe- 
ment of  trade-mark  a  good  deal  of  evidence  had  to  be 
gone  into  to  prove  such  user  and  reputation.  On  the 
other  hand,  the  defendant  frequently  contended  that 
what  was  alleged  to  be  the  plaintiff's  trade-mark  was 
really  a  mark  common  to  the  trade,  or  that  there  was 
nothing  c  distinctive '  in  such  mark  or  symbol,  or  that 
it  was  merely  descriptive  in  character,  and  that  as 
such  no  one  could  claim  exclusive  use  of  it.  In  1875  the 
Trade  Marks  Registration  Act  was  passed,  which  pro- 
vided that  registration  should  be  prima  facie  evidence 
of  the  right  of  the  registered  proprietor  to  the  exclu- 
sive use  of  the  trade-mark,  such  right  to  be  limited  to 
the  goods  of  the  class  for  which  it  was  registered.1 
The  act  practically  made  registration  of  trade-marks 
compulsory  in  England  in  as  much  as  it  provided  that 
no  one  should  be  entitled  to  institute  a  proceeding  to 
prevent  the  infringement  of  a  trade-mark,  unless  such 
trade  mark  was  registered  in  pursuance  of  the  Act. 
This  was  followed  by  the  Act  of  1883  (The  Patents, 
Designs  and  Trade  Marks  Act)3  which  substantially 
re-enacted  the  principal  provisions  of  the  Act  of  1875 
and  made  some  necessary  additions  and  alterations. 
An  influential  committee  was  then  appointed,  under 
the  presidency  of  Lord  Herschell,  and  with  a  view  to 
carry  out  their  suggestions  an  amending  Act  was 
passed  in  1888  which  came  into  operation  on  the  ist 
January,  1889.  The  latest  important  piece  of  legislation 
in  England  is  the  Trade-Marks  Act  of  1905,  section 
9  of  which  indicates  the  essential  particulars  of  a 
registrable  trade  mark  to  be  at  least  one  of  the  follow- 
ing : — (i)  The  name  of  a  Company,  individual  or  firm 
represented  in  a  special  or  particular  manner ;  (2)  the 
signature  of  the  applicant  for  registration  or  some 


1  Honie  v.  Chavey   153  Mass  592,  cited  in  Jagernath  6-  Co.   v.  Cressweil 
and  others  I.L.R.  40  Cal.  814  at  pp.  827,  828. 

2  It  also  provided  that  after  the  expiration  of  five  years  it    would  be 
conclusive  evidence  of  such  right  provided  that  the  proprietor  of  the  mark 
remained  the  owner  of  the  good  will  of  the  business  in  which  it  was  used. 

3  46  and  47  Viet.   C.  57. 


30i 

predecessor  in  his  business ;  (3)  an  invented  word  or 
invented  words,  (4)  ;  a  word  or  words  having  no  direct 
reference  to  the  character  or  quality  of  the  goods  and 
riot  being  according  to  its  ordinary  signification  a 
geographical  name  or  surname.  Any  other  distinctive 
mark,  save  a  name,  signature,  or  word  or  words  other 
than  such  as  fall  within  the  description  in  the  above 
paragraphs  (i,  2,  3,  4)  shall  not,  it  is  provided,  except 
by  order  of  the  Board  of  Trade,  or  the  Court,  be  deem- 
ed a  distinctive  mark. 

Thus  in  England,  under  the  statute  law,  registra-  in  England 
tion  of  trade-marks  is  essential,  in  as  much  as  it  is  a  tration  is  essential. 
condition  precedent  to  proceedings  for  infringement. 
Yet  there  are  many  trade-marks  still  unregistered,  the 
reason  being  that  the  remedies  by  an  action  for 
<l  passing- off  "  are  available  to  the  person  aggrieved, 
and  such  action  does  not  require  registration  as  an 
essential  condition.  In  India  there  is  no  system  of 
registration,  nor  is  there  any  provision  for  a  statutory 
title  to  a  trade-mark.  The  rights  and  liabilities  in 
connection  with  trade-marks  are  determined  in  accord- 
ance with  the  principles  of  the  common  law  of 
England.1  The  law,  therefore,  stands  as  it  did  in 
England  before  the  registration  acts  were  passed,  and 
the  numerous  decisions  which  have  since  been  given 
in  England  and  followed  in  India  have  elaborately 
defined  the  rights  and  remedies  attaching  to  traders 
and  their  trade-marks.  It  is  the  adoption  and  user  in  India  adoption 
of  a  trade-mark  which  gives  a  title  to  it.  As  soon  as  and  user  gives  title 
a  trade-mark  has  been  so  employed  in  the  market  as 
to  indicate  to  purchasers  that  the  goods  to  which  it  is 
attached  are  the  manufacture  of  a  particular  firm,  it 
becomes  to  that  extent  the  property  of  the  firm.  The 
actual  length  of  time  it  has  been  employed  is  not  an 
essential  ingredient  'l  provided  it  has  been  used  long 
enough  to  render  it  probable  that  a  reputation  in  the 
market  has  been  acquired.  But  the  right,  it  must  be 
remembered,  avails  only  in  respect  of  the  goods  of  the 
particular  class  to  which  the  mark  has  been  attached. 
The  acquisition  of  an  exclusive  right  to  a  mark  or 


1  British  American    Tobacco   Co  v.  Mahbub  Baksh  I.Iv.R   38  Cal.  no   at 
p.  117 ;  Hannah  v.  Juggernath  6-  Co.  I.Iv.R.  42  Cal.  262  at  p.  275 

2  Lavergne  v.  Hooper  I.I/.R.    8  Mad.    149  ;  Jagarn,tth  &  Co.  v.  Cresswell 
and  others  I.I^.R.  40  Cal.  814. 


302 

name  in  connection  with  a  particular  article  of  com- 
merce cannot  entitle  the  owner  of  that  right  to 
prohibit  the  use  by  others  of  such  mark  or  name  in 
connection  with  goods  of  a  totally  different  character.1 
An  action  is  maintainable  not  only  by  the  manu- 
facturer or  selector  of  the  goods  but  also  by  the  vendor 
of  them.  In  the  case  of  Jwala  Pro  sad  v.  Munna  Lai 
Serowgee,*  the  plaintiff,  who  carried  on  business  in 
Calcutta  as  a  merchant  in  ghee  (clarified  butter),  sued  the 
defendant  who  also  carried  on  business  as  a  dealer  and 
commission  agent  in  ghee,  for  infringement  of  his  trade- 
mark. It  was  alleged  in  the  plaint,  and  established 
by  the  evidence,  that  for  a  considerable  time  (twelve 
years)  the  plaintiff's  ghee  had  been  sold  in  Calcutta  and 
foreign  markets,  tinned  in  canisters  bearing  his  em- 
bossed mark,  which  consisted  of  a  flower  on  a  stem  with 
leaves,  the  flower  being  of  the  shape  of  an  ellipse  with 
an  indented  circumference,  having  within  its  circum- 
ference the  initials  of  the  plaintiff's  firm  M.D.S.  The 
infringement  was  said  to  consist  in  the  fact  that  the 
defendant  had  used  on  their  canister  of  ghee,  intended 
for  sale  and  export  in  the  same  markets,  a  colourable 
imitation  of  the  plaintiff's  mark  ;  and  that  the  use  by 
the  defendants  of  that  mark  was  calculated  to  deceive, 
and  it  had  deceived,  by  inducing  purchasers  to  buy  the 
defendant's  goods  in  the  belief  that  they  were  buying 
those  of  the  plaintiff.  There  were  two  points  that 
came  up  for  disposal.  First,  the  plaintiff's  mark  was 
described  as  a  registered  trade-mark  Evidently,  the 
contention  was  based  on  the  fact  that  although  there 
was  no  law  for  registration  of  trade-mark  in  India, 
yet  a  large  number  of  trade-marks  used  to  be  deposited 
with  the  Registrar  of  Assurances  appointed  under  the 
Indian  Registration  Act.  It  was  held  that  there  was 
no  system  of  registration  in  India  which  gave  a 
statutory  title,3  and  that,  therefore,  it  was  necessary 
for  the  plaintiff  to  establish  that  the  mark,  in  respect 
of  which  he  made  his  claim,  had  acquired  a  reputation 
in  connection  with  the  goods  that  he  sold.  On  this 


1  Badisch  Amiline  etc.  v.  Tejpal,  etc.,  5  Bom.  L.R.  1025. 

2  I.Iy.R    37  Cal.  204,  on  appeal  from  35  Cal.  311  ;   5  I.C.  icoo. 

3  Per  Jenkins,  C.J.,  I.L.R.  37  Cal.,  p.  209.    See  also  The  British  America) 
Tobacco  Co-,  Ld.  v.  Mahoob  Bux,  I.I^.R.  38  Cal.  no,  7  Ind.  Cas.  279. 


303 

point  both  the  original  court  and  the  court  of  appeal 
held  that  the  mark  in  question  did  denote  in  the 
market  the  ghee  of  the  plaintiff  and  that  the  defend- 
ants deliberately  adopted  the  plaintiffs  trade-mark 
for  their  own  purposes.1  Secondly,  it  was  objected 
that  the  plaintiff  was  merely  the  vendor  of  the  goods 
and  not  the  manufacturer  nor  selector.  It  was  held 
that  even  though  the  plaintiff  was  not  the  manufac- 
turer, nor  the  selector  but  only  a  vendor  of  the  goods, 
his  action  was  maintainable.2 

But  a  trade-mark  which  represents  the  reputa- 
tion of  the  manufacturer  and  not  of  the  importer  is 
under  the  control  and  protection  of  the  former  and 
not  of  the  latter.  The  importer  cannot  under  the  cir- 
cumstances be  aggrieved  at  any  use  of  the  trade- 
mark wrhich  obviously  belongs  not  to  himself  but  to 
the  producer.  The  importer  can  only  protect  a  mark 
indicating  importation  by  him.  If  his  importation  is 
not  indicated  by  the  mark  but  otherwise,  as  for  in- 
stance by  the  style  and  name  under  which  he  trades 
as  importer,  he  cannot  sue  to  restrain  the  use  of  the 
mark,  and  can  only  sue  if  his  trade  name  and  style 
be  deceitfully  assumed  by  a  rival.  So  where  the  trade- 
mark on  certain  watches  was  the  trade-mark  of  the 
manufacturers  and  exporters,  and  the  plaintiff's  con- 
nection with  the  watches  was  that  of  an  importer  and 
seller  under  a  contract  for  exclusive  supply  in  India, 
and  where  he  sought  a  perpetual  injunction  to  restrain 
the  defendants  from  importing  or  selling  any  watches 
similar  in  appearance  to  the  watches  imported  by 
himself  or  having  any  design  or  mark  calculated  to 
deceive  purchasers  into  the  belief  that  such  watches 
were  the  watches  imported  and  sold  by  the  plaintiff, 
it  was  held  that  he  was  not  entitled  to  the  injunction 
asked  for.  In  order  to  succeed,  the  plaintiff  would 
have  had  to  show  that  the  value  of  the  trade  which 
he  carried  on  was  due  to  the  reputation  acquired  by, 
and  attaching  to  the  trade-mark,  as  a  guarantee  of 
importation  by  him,  and  not  merely  as  a  guarantee  of 
manufacture  by  somebody  else,  and  that  the  limita- 
tion of  that  trade-mark  was  an  infringement  of  an 


See  Mahomed  Esuf  v.  Rajaratnam  Pillai  I.I^.R.  33  Mad.  402. 
Per  Woodroffe,  J.,  I.Iy.R.  37  Cal.  at  p.  211. 


304 

exclusive  right  of  his  own,  entitling  him  to  ask  for 
protection.1 

Action  by  In  India  for  obvious  reasons  cases  of  "  importers" 

of  trade-marks  are  more  numerous  than  those  of  pro- 
ducers or  manufacturers.  In  the  case  of  Ralli  v. 
Fleming  'l  it  was  held  (per  Markby,  J.)  that  it  was 
only  an  extension  of  the  general  law  of  trade-marks 
that  the  right  to  the  exclusive  use  of  a  trade-mark 
may  be  claimed  as  well  by  a  trader  who  only  imports 
goods  as  by  one  who  manufactures.  When  a  trader 
specially  selects  and  appropriates  to  himself,  for  the 
purpose  of  distinguishing  his  goods,  any  device,  it  is 
his  trade-mark  proper,  and  no  one  else  is  allowed  to 
use  it.  Again,  if  without  any  such  selection  and 
appropriation,  the  trader's  goods  happen  to  bear  some 
mark  which  has  come  to  be  associated  by  the  public 
with  the  trader's  name  so  that  all  the  goods  with  the 
mark  are  supposed  to  come  from  him,  then  too  the  law 
will  not  allow  any  one  else  to  use  it.  It  was  further 
held  that  where  the  use  or  the  imitation  of  the  plain- 
tiff's marks,  on  goods  not  imported  by  him,  by  the 
defendants  would  be  calculated  to  deceive  or  mislead 
the  public  into  the  belief  that  they  were  purchasing 
goods  imported  by  the  plaintiff  the  defendants  ought 
to  be  restrained  from  such  imitation.  The  case  of  T. 
Barlow  and  others  v.  Gobindram  and  another*  which 
was  also  for  infringement  of  an  importer's  trade-mark 
further  establishes  this  point.  There  the  plaintiffs  al- 
leged that  they  were  entitled  to  the  exclusive  use  of 
the  number  9000  as  a  mark  for  distinguishing  a  par- 
ticular variety  of  cloth  imported  by  them  and  com- 
plained against  the  unauthorised  use  of  the  number 
by  the  defendants  in  respect  of  cloth  not  imported  by 
the  plaintiff.  It  was  held  that  the  question  of  the 
right  to  the  exclusive  use  of  a  trade- mark  or  trade 
number  is  largely,  if  not  entirely,  a  question  of  fact; 
and  the  question  whether  it  exists  in  any  given  case 
must  depend  upon  whether  the  evidence  in  that  case 
is  sufficient  to  show  such  an  association  or  connection 
between  the  mark  or  the  number  and  the  firm  which 
uses  it  as  to  indicate  to  the  ordinary  purchasers  in  the 


J  Heininger  v.  Droz  3  Bom.  L.R.  i ;  I.L.R.  25  Bom.  433. 
2  I.L.R.  3  Cal.  417;  2  C.L.R.  93. 
*  I.L.R.  24  Cal.  364;   i.'C.W.N.  281. 


305 

market  that  the  goods  are  the  goods  of  that  particular 
firm.  To  show  that  a  particular  trade  number  has 
acquired  a  reputation  in  the  market  and  that  pur- 
chasers buy  the  goods  by  that  number  and  not  from 
an  examination  of  the  nature  or  quality  of  that  cloth, 
is  not  sufficient  to  establish  the  right  of  exclusive  user 
of  that  number.  There  must  be  such  an  association 
between  the  number  and  the  firm's  name  as  to  indicate 
in  the  understanding  of  the  public  that  the  goods 
bearing  that  number  came  from  that  particular  firm. 
The  right  of  exclusive  user  of  a  name,  or  a  number,  as 
a  trade-mark  is  not  an  absolute  and  unqualified  right 
which  would  entitle  the  owner  to  prevent  another 
person  from  using  it  under  all  circumstances.  It  is 
only  when  the  use  of  that  name  or  number  deceives 
or  is  reasonably  likely  to  deceive  the  public,  that  it 
can  be  interfered  with  or  prevented.1  There  must  be 
a  reasonable  probability  of  purchasers  being  deceived ; 
it  is  not  enough  to  show  a  mere  possibility  of  decep- 
tion.'2 At  the  same  time  it  should  be  remembered 
that  it  is  not  necessary  for  relief  in  equity  that  proof 
should  be  given  of  persons  having  been  actually  deceived 
and  having  bought  goods  with  the  defendant's  mark 
under  the  belief  that  they  were  goods  manufactured 
or  imported  (as  the  case  may  be)  by  the  plaintiffs. 
As  laid  down  in  numerous  cases,  what  one  has  to  look 
at,  in  cases  of  colourable  imitation  of  trade-marks,  is 
not  whether  a  critical  and  astute  purchaser  seeing  the 
two  labels  or  marks  side  by  side  would  be  able  to 
detect  the  difference,  but  whether  the  distinctive  and 
characteristic  symbol  is  the  same  in  both  cases,  so  that 
one  is  likely  to  be  taken  for  the  other.  It  is  immaterial 
whether  there  are  slight  differences  which  could  be 
detected  on  a  close  scrutiny.  Trade-marks  appeal  for 
the  most  part  to  the  illiterate  classes  who  are  unable 
to  read  or  would  be  unlikely  to  spell  out  the  descrip- 
tion round  the  border.3 

Another  interesting  case  is  that  decided  by  the 


J   Uberoi  Ld.  v.  The  Proprietor  of  Uberoi  6-  Co.  Kashmir  (1920)  56  I.C.  709. 

s  I.L.R.  24  Cal.  at  p.  379. 

3  E.  D.-Sassoon  v.  D.  L.  Mills  Co.  i  Bom.  L,  R.  291.  See  also  I.L.R.  24 
Cal.  p.  379:  "  If  it  can  be  shown  that  such  use  was  intended  to  deceive  fche 
ordinary  or  unwary  purchaser  into  the  belief  that  the  goods  were  imported 
by  the  plaintiff,  or  that  such  use  would  render  it  reasonably  probable  that 
the  purchaser  would  be  so  deceived." 

39 


306 

Full  Bench  of  Madras  L  in  which  several  points  came 
up  for  discussion  and  the  law  was  clearly  laid  down. 
The  plaintiffs  and  the  defendant  were  carrymg  on 
business  as  piece  goods  merchants  at  Madras.  The 
plaintiffs  complained  that  the  defendant  infringed 
their  trade- mark  on  grey  shirtings  which  they  (the 
plaintiffs)  were  importing  from  England.  The  plain 
tiffs  claimed  the  exclusive  right  to  the  user  of  a  com- 
bination of  certain  words,  designs,  letters  and  numbers 
which  constituted  the  '  facing  '  imprinted  on  their  grey 
shirtings.  It  was  proved  that  the  plaintiffs  were 
using  this  facing  continuously,  and  without  alteration 
since  1889.  It  was  also  proved  that  in,  and  prior  to, 
1889,  there  was  no  similar  ( facing '  in  use  in  Madras 
and  that  the  goods  bearing  the  '  facing '  and  sold  by 
the  plaintiffs  had  acquired  a  large  reputation  and 
were  known  in  the  market  3,$"tulwa"  or  " kuttee" 
shirting,  the  word  ffkuttee"  meaning  sword.  The 
plaintiffs  claimed  that  their  trade  mark  consisted  of  the 
whole  combination  forming  the  facing  on  their  grey 
shirtings.  It  was  found  that,  since  1898,  the  defendant 
was,  with  the  object  of  overthrowing  the  plaintiffs, 
effecting  some  change  or  other  in  his  facing  from  time 
to  time  with  the  result  that  in  the  end  his  facing 
came  to  be  almost  exactly  similar  to  that  of  the  plain- 
tiffs in  the  words,  letter  sand  figures,  etc.,  except  that 
the  defendant  had  imprinted  on  his  facing  scent 
bottles  lying  horizontally  instead  of  swords  lying  in 
the  same  position  on  the  plaintiffs'  facing.  In  short, 
the  various  marks  used  by  the  defendant  constituted 
a  colourable  imitation  of  the  plaintiffs'  marks  in 
every  respect  apart  from  the  swords.  The  defend- 
ant's contention  was  that  the  plaintiffs'  goods  had 
been  known  as  "kuttee"  or  sword  shirtings.  That 
being  so,  he  could  copy  every  portion  of  the  plaintiffs' 
trade- mark  except  that  which  gave  the  special  name 
to  the  cloth ;  in  other  words,  that  he  could  copy  every 
part  of  the  combination  of  the  plaintiffs  '  trade-mark, 
except  the  words  from  the  use  of  which  the  plaintiffs' 
shirtings  had  acquired  the  reputation  of  the  '  sword ' 


J  Nooroodeen  Sahib  v.  Charles  Sowden  15  M.I/.J.  45  F.B.  See  Thomas 
Arthur  Taylor  v.  Virasami  Chetty  and  another  I.I/.R.  6  Mad.  108  referred  to 
in  the  Full  Bench  Case. 


307 

or  'kuttee'  shirting,  and  that  as  he  (the  defendant) 
used  scent  bottles  instead  of  swords  on  his  facing 
there  was  no  infringement  of  the  plaintiffs'  trade- 
mark and,  therefore,  the  plaintiffs  could  not  get  relief 
by  way  of  injunction,  etc.,  which  they  sought.  It 
was  held,  Davies,  J.,  dissenting,  that  the  plaintiffs  were 
entitled  to  the  injunction  prayed  for.  The  action, 
said  Davies,  J.,  was  not  upon  a  trade-mark  properly  so 
called,  as  there  is  no  registration  of  trade-mark  in  this 
country  but  it  was  upon  the  right  of  an  exclusive 
user  of  what  might  be  more  appropriately  styled  a 
c  trade  description'  which  is  recognised  and  protected 
tinder  sees.  2,  4  and  6  of  the  Indian  Merchandise 
Marks  Act  of  1889.  To  establish  the  user  of  trade- 
mark, it  is  necessary  for  the  claimant  to  show  that 
it  is  by  that  particular  marking  that  his  goods  are 
known  or  recognised  in  the  market  or  by  the  public, 
He  must  also  show  that  the  marks,  as  arranged  by 
him  indicate  origin  of  property  as  well  as  quality. 
This  the  plaintiffs  failed  to  prove.  Except  as  to  four 
items,  the  plaintiffs  did  not  make  out  their  right  of 
exclusive  user  and  the  defendant  did  not  imitate 
any  of  those  marks.  Further,  what  the  defendant 
copied  he  was  at  liberty  to  copy  and  no  one  was 
likely  to  be  deceived  thereby  into  taking  his  goods  as 
the  plaintiffs' .  Benson,  J.,  observed  :  There  is  no  sys- 
tem of  registering  trade-marks  in  India.  Every 
one  may  use  any  mark  or  combination  of  marks  or 
symbols  that  he  likes,  unless  some  other  person  has, 
by  user  acquired  a  reputation  which  couples  his  name 
with  the  mark  or  combination  of  marks  or  symbols. 
In  that  case,  the  user  acquires  a  property  in  the 
mark  or  combination  which  the  law  will  protect 
just  as  much  as  if  it  were  a  registered  trade-mark. 
To  that  extent,  it  becomes  his  exclusive  property 
and  no  one  else  has  a  right  to  copy  it,  or  even  to 
appropriate  any  part  of  it,  if,  by  such  appropriation, 
unwary  purchasers  may  be  induced  to  believe  that 
they  are  getting  goods  which  were  made  by  the  firm 
to  whom  the  trade-mark  belongs.  For  several  years 
previously,  the  plaintiffs  had  acquired  by  user  a  prop- 
erty in  their  facing.  Moore,  J.,  said  :  " The  principle 
of  law  applicable  to  a  case  like  the  present  is  that  no 
man  may  canvas  for  custom  falsely  holding  out  his 


3o8 

goods  or  business,  whether  by  misleading  description 
or  by  colourable  imitation  of  known  marks,  packages, 
etc.,  as  being  the  goods  of,  or  business  of,  another." 
Its  application  is  not  excluded  by  showing  that  the 
style  or  words  appropriated  by  the  defendant  are  in 
themselves  not  false  as  he  uses  them,  or  that  the 
plaintiffs  if  they  succeed  will  have  a  virtual  monopoly 
in  an  exclusive  designation  which  is  not  capable  of 
registration  as  a  trade-mark.  The  question  is  whether 
the  defendant's  action  naturally  tends  to  cause  an 
ordinary  dealer  or  purchaser  to  think  he  is  dealing 
with  the  plaintiffs  or  buying  the  plaintiffs'  goods.  In 
the  present  case  there  could  be  no  doubt  that  the 
facing  of  the  defendant  would  appear  to  the  purchaser 
as  virtually  identical  with  that  of  the  plaintiffs'. 
The  object  of  the  defendant  in  adopting  the  facing 
he  did  must  have  been  to  cause  an  ordinary  illiterate 
purchaser  to  think  that  he  was  buying  the  plaintiffs' 
goods.  It  was  further  held  unanimously  that  evidence 
of  opinion  as  to  the  probability  of  the  purchaser  being 
deceived  or  otherwise  was  not  admissible, 
otside  The  effect  of  prior  user  of  a  trade-mark  outside 
India.  India  in  granting  immunity  from  action  came  up  for 

consideration  in  the  case  of  Ebrahim  Currim  v.  Essa 
Abba  Sait.1  In  that  case  the  plaintiff,  an  importer  of 
umbrellas  with  a  certain  trade-mark,  sued  for  an 
injunction  restraining  the  defendant  from  importing 
and  selling  umbrellas  with  a  trade-mark  having  a 
similar  device.  The  plaintiff  contended  that  the  trade- 
mark of  the  defendant  was  likely  to  deceive  the  public 
into  a  belief  that  the  umbrellas  sold  by  the  defendant 
were  those  of  the  plaintiff.  The  defendant  while  denying 
that  the  plaintiff  had  any  right  to  the  trade-mark 
claimed  by  him,  contended  that  his  trade-mark  had 
been  long  used  in  Scotland,  and  that  the  public  were 
not  likely  to  be  deceived.  For  the  purpose  of  the 
suit  it  was  taken  for  granted  that  the  mark  in 
question  was  used  by  the  firm  in  Scotland  before  it 
was  used  by  the  plaintiff  in  India  and  that  it  had 
not  been  used  in  India  by  the  Scotch  firm  before.  It 
was  held  that  the  prior  use  in  Scotland  did  not 
justify  the  Scotch  firm  or  the  defendant  in  saying 


I.Iy.R.  24  Madras  163. 


309 

that  plaintiff's  use  of  the  trade-mark  was  illegal,  or 
otherwise  than  an  exclusive  user.  The  protection 
which  the  law  affords  to  traders  using  a  trade-mark 
would  be  seriously  diminished  if  immunity  from  action 
were  secured  to  rival  traders  who  were  able  to  prove 
that  in  some  other  quarter  of  the  globe,  some  other 
trader  had  been  in  the  habit  of  using  the  mark  for  a 
period  longer  than  that  alleged  by  the  plaintiff. 

A  particular  trade-name  bearing  on  the  face  of  it 
a  particular  signification  may,  in  course  of  time  and  tion  of  a  trade 
as  a  result  of  association  with  the  name  and  goods  of  name> 
a  particular  trader,  acquire  a  secondary  signification.1 
In  that  case,  it  will  not  be  open  to  any  other  trader 
to  use  it  in  its  primary  signification  on  his  own  goods, 
because  that  may  lead  to  deception.  This  question 
came  up  in  the  case  of  John  Smidt  v.  F.  Reddaway 
&  Co:'  The  plaintiffs  F.  Reddaway  and  Co.,  were 
manufacturers  of  machine  belting.  Since  1889  they 
had  manufactured  and  sold  in  England,  India  and 
the  colonies  a  belting  of  their  manufacture  under  the 
name  of  'Camel  Hair  Belting/  'Camel  Brand  Bel- 
ting' or  'Camel  Belting'  which,  they  said,  had  a 
very  valuable  trade  reputation.  They  also  alleged 
that  the  name  f  Camel  Hair  Belting/  c  Camel  Brand 
Belting '  '  or  Camel  Belting '  or  all  belting  invoiced, 
sold  or  advertised  in  connection  with  the  word  (  Camel ' 
was  understood  in  the  trade  and  by  the  public  to  mean 
and  indicate  exclusively  belting  of  the  plaintiffs'  manu- 
facture. The  defendants  were  a  firm  of  merchants 
carrying  on  business  in  Calcutta  with  headquarters  at 
Bremen  in  Germany.  They  imported  into  India 
machine  belting  of  German  manufacture  which  they 
placed  on  the  market  under  the  name  of  '  Camel  Hair 
Belting  '  or  Schroder  Smidt  and  Co.'s  '  Camel  Hair 
Belting.'  The  plaintiffs  sought  to  restrain  the  defen- 
dants from  using  the  words  f Camel  Hair'  whether 
alone  or  in  conjunction  with  the  names  or  in  any 
manner  likely  to  deceive  purchasers  in  connection 
with  belting  advertised  or  offered  for  sale  by  them 
and  not  being  of  the  plaintiff's  manufacture.  The 


J  Oriental  Government  Security  Life  Assurance  Co.,  Ltd.  v.  Oriental 
Assurance  Co.,  Ltd.  (1913)  I.I/.R.  40  Cal.  570. 

*  I.I/.R.  32  Cal.  401  ;  9  C.W.N.  281  ;  following  Reddaway  v.  Banham 
(1896)  A.C.  199. 


3io 

issues  framed  were  these :  (i)  Does  Camel  Hair 
Belting  mean  belting  made  by  the  plaintiff  com- 
pany ?  (2)  Or  does  it  mean  belting  of  a  particular 
kind  without  reference  to  any  particular  maker? 
(3)  Do  the  defendants  so  describe  their  belting  as 
to  be  likely  to  mislead  purchasers  and  to  lead  them 
to  buy  the  defendant's  belting  as  and  for  the  bel- 
ting of  the  plaintiff  company  ?  (4)  Did  the  defend- 
ants endeavour  to  pass  off  their  goods/ as  and  for  the 
goods  of  the  plaintiff  company  so  as  to  be  likely  to 
deceive  purchasers  ?  It  appears  that  the  defendants 
had  carefully  confined  to  India  their  denial  of  the 
plaintiffs'  claim  as  to  the  exclusive  meaning  attached 
to  the  words  f  Camel  Hair '  for  upon  the  decisions  in 
England,  specially  the  judgment  of  the  House  of 
Lords  in  Reddaway  v.  Banhani  it  could  hardly  be 
disputed  that  the  words  'Camel  Hair'  or  ( Camel 
Brand  '  or  '  Camel '  used  in  connection  with  belting  had 
acquired  in  England  a  distinctive  signification  indi- 
cating belting  manufactured  by  the  plaintiff  company. 
The  question  for  consideration  in  the  case  was  whe- 
ther it  had  acquired  any  such  meaning  in  India.  The 
case  was  decided  by  Ameer  Ali,  J.,  who  held  in  favour 
of  the  plaintiffs  and  granted  an  injunction  in  the 
same  terms  as  had  been  granted  in  Reddaway  v. 
Banham.]  On  appeal,  the  decision  of  Ameer  Ali,  J.,, 
was  upheld  and  the  conclusion  arrived  at  was  that 
the  words  ( Camel  Hair  Belting '  had  acquired  a 
special  or  secondary  signification  in  the  Indian  mar- 
ket;2 meaning  that  the  belting  so  called  was  belting 
of  the  plaintiffs'  exclusive  manufacture  ;  that  under 
the  circumstances  since  the  name  '  Camel  Hair  Belt- 
ing '  had  come  to  mean  in  the  Indian  market  the 
plaintiff's  belting  and  nothing  else,  a  purchaser  would 
be  likely  to  be  deceived  when  buying  the  defendants' 
belting  into  believing  that  he  was  buying  Reddaway' s, 
and  further  that  it  was  immaterial  to  prove  that  any 
special  damage  was  caused  to  the  plaintiff  or  that  any 
purchaser  was  in  fact  deceived.3 

On  the  question  of  deception  the  case  of  John 


1  (1896)  A. C.  199. 

2  The  burden  of  proving  that  particular  words  have  acquired  a  secondary 
signification  lies  on  the  person  alleging  it. 

a  See  Morarji  Mohanji  v.  Madanji  Mohanji  and  others  5  Bom.  LR.  545. 


3" 

Smidt  v.  Reddaway  was  referred  to  with  approval  by  counterfeit  trade- 
Sale,  J.,  in  Nemi  Chand  v.  C.  W.  Wallace  and  others  l  n 
The  latter  was  a  case  of  slander  of  title  and  the  plain- 
tiff alleged  that  the  defendants  by  a  false  statement 
maliciously  made  with  the  intention  of  causing  his 
goods  to  be  wrongfully  detained,  did  in  fact  cause  the 
goods  to  be  wrongfully  detained  by  the  customs 
authorities.  The  issue  to  be  determined  between  the 
plaintiff  and  the  defendant  was  whether  the  plaintiff's 
marks  were  counterfeit  as  alleged  by  the  defendants  or 
not.  "  A  counterfeit  trade-mark/'  said  Sale,  J.,  "  may 
be  defined  as  a  trade-mark  which  is  either  designed  and 
used  with  the  intention  of  deceiving  or  which  by  rea- 
son of  its  resemblance  to  another  pre-existing  and  al- 
ready established  mark  is  calculated  to  deceive  apart 
from  any  dishonest  intention.  In  order  to  succeed  in 
establishing  the  first  proposition  the  plaintiffs  must 
shew  that  in  introducing  and  using  their  trade-mark 
they  were  not  actuated  by  any  intention  to  imitate  the 
trade-mark  of  Messrs.  G.  and  R.  Dewhurst.  If  the 
plaintiffs  fail  to  shew  that  they  had  no  such  intention, 
it  becomes  idle  and  unnecessary  to  enquire  whether 
the  imitation  was  calculated  to  deceive  and  for  this 
obvious  reason.  The  resemblance  must  have  been 
either  designed  or  innocent  and  accidental,  and  whether 
it  was  the  one  or  the  other  the  plaintiffs  alone  know, 
and  can  prove  if  they  will.  If  they,  having  the  oppor- 
tunity, deliberately  abstain  from  shewing  that  the 
resemblance  adopted  by  them  was  accidental  and  in- 
nocent it  necessarily  follows  that  it  was  the  result 
and  outcome  of  deliberate  design  and  intention.  If 
then  the  court  must  on  the  facts  before  it  presume 
that  the  marks  of  resemblance  between  the  plaintiffs 
trade-mark  or  combination  and  the  defendants'  trade- 
mark or  combination  are  not  accidental  but  inten- 
tional and  designed,  then  the  imitation  must  have 
been  designed  with  the  object  of  deceiving.  And  if 
the  object  was  to  deceive,  then  the  court  will  pre- 
sume as  against  the  wrong-doer  that  the  means  em- 
ployed to  cause  deception  were  calculated  to  effect 
that  purpose.  This  I  think  is  the  effect  of  the  ruling 


l  4    C.L.J.  268  at  p.  282  ;    10  C.W.N.   107.     There  was  an  appeal   and 
the  judgment  was  upheld.    See  n  C.W.N.    537  ;  I.I,.R.  34  Cal.  495. 


312 

of  this  court  in  the  case  of  John  Smidt  v.  Reddaway. 
It  follows  from  this  reasoning  that  if  the  plaintiffs 
imitated  the  whole  or  part  of  Dewhurst's  mark  with 
the  object  of  deceiving,  the  court  will  presume  as 
against  the  plaintiffs  that  the  imitation  so  adopted 
was  calculated  to  deceive." 

likelihood  of  There  was  another  vexed  question  which  came 

opinion?11"'  up  for  discussion  in  the  above  case,  viz.  whether  the 

opinion  of  experts  or  men  in  the  trade  can  be  consi- 
dered in  order  to  come  to  a  conclusion  whether  or  not 
a  combination  is  such  as  is  calculated  to  deceive  the 
purchaser.  It  was  held  that  that  is  a  question  entirely 
for  the  Judge  and  no  evidence  of  opinion  may  be  given. 
But  evidence  of  facts  which  may  assist  the  Judge  to 
come  to  a  conclusion  as  to  whether  one  mark  is  a  col- 
ourable imitation  of  another  may  be  given.  The  ques- 
tion arose  thus :  During  the  examination-in-chief  of 
one  of  the  witnesses  for  the  defendants  the  following 
question  was  put :  '  Did  you  come  to  any  conclusion 
with  regard  to  this  cloth  (which  had  been  imported 
by  the  plaintiff)  ?  '  To  this  the  following  answer  was 
given.  (Yes.  This  is  obviously  intended  to  be  an 
imitation  of  Dewhurst's  cloth.'  Counsel  for  the  plain- 
tiff objected  saying  that  no  questions  could  be  asked 
as  to  the  opinion  of  witnesses  as  regards  resemblance 
and  that  the  eye  of  the  Judge  was  the  sole  test.  Coun- 
sel for  the  defendant  urged  among  other  things  that 
such  questions  could  be  asked,  if  not  on  any  other 
ground,  at  least  on  the  ground  that  it  was  not  a 
passing-off  action,  but  an  action  for  slander  of  title 
and  that  he  was  entitled  to  get  the  conclusion  of 
persons  similarly  situated  to  show  bona  fides.  The 
court  gave  a  short  separate  judgment  on  the  point,1 
which  I  give  below  in  extenso  :— 

"The  question  which  is  sought  to  be  put  and  which 
is  objected  to  is  to  elicit  witness's  opinion  as  to  whether 
or  not  the  plaintiff's  combination  is  not  such  as  is  cal- 
culated to  deceive  the  purchaser  who  wanted  to  buy 
the  defendant's  goods.  The  objection  is  based  on  the 
view  taken  by  Lord  Halsbury  in  the  case  of  North 
Cheshire  Brewery  Co.  v.  Manchester  Brewery  Co*  There 
I/ord  Halsbury  points  out  that  wThere  the  question  is 


4.  C.I/.J,  at  p.  279.  z  1899  A..C.  83. 


313 

a  question  as  regards  one  combination  being  a  colour- 
bale  imitation  of  another,  certain  questions  are  admis- 
sible. Then  he  goes  on  to  say  that  another  class  of 
evidence,  i.e.  based  on  the  opinion  of  witnesses,  viz. 
whether  one  mark  is  a  colourable  imitation  of  the 
other  cannot  be  given,  because  this  is  the  very  ques- 
tion which  the  Judge  has  to  decide.  The  language  is 
very  explicit.  He  says,  "  but  upon  the  one  question 
which  your  lyordships  have  to  decide  whether  the 
one  name  is  so  nearly  resembling  another  as  to  be 
calculated  to  deceive,  I  am  of  opinion  that  no  witness 
would  be  entitled  to  say  that  and  for  this  reason  :  that 
that  is  the  very  question  which  your  Lordships  have 
to  decide."  It  is  not  possible  to  distinguish  the  ques- 
tion put  to  the  witness  in  this  case  from  the  question 
which  is  considered  by  Lord  Halsbury.  But  it  is  said 
that  this  action  is  not  a  passing-off  action,  but  an 
action  of  deceit.  It  is  submitted  that  the  question  is 
admissible  to  show  that  the  defendants  acted  honestly 
and  bona  fide.  It  would  be  embarassing,  I  think,  to 
admit  evidence  which  is  inadmissible  on  one  issue,  on 
another  issue.  If  the  court  is  not  to  have  the  advan- 
tage of  the  witness's  opinion  as  to  resemblance,  it  is 
difficult  to  see  why  the  court  should  insist  on  it  to 
show  the  absence  of  malice.  The  principle  must  be 
that  if  the  court  is  competent  to  come  to  a  conclusion 
on  one  issue,  it  is  competent  to  come  to  a  conclusion 
on  another  issue.  Under  these  circumstances,  in  as 
much  as  the  plaintiff  has  objected,  I  follow  Lord 
Halsbury  in  saying  that  this  kind  of  evidence  is  not 
admissible.  Evidence  of  facts  which  may  assist  the 
Judge  to  come  to  a  conclusion  whether  one  is  a  col- 
ourable imitation  of  the  other,  or  whether  the  defend- 
ants are  acting  bona  fide  may  be  given.  The  question 
is,  therefore,  inadmissible." 

As  to  the  evidence  of  the  circumstances  under 
which  the  goods  come  into  the  hands  of  the  purchasers 
and  how  it  may  affect  the  question  of  likelihood  of 
deception,  the  following  observations  of  Sale,  J.,  in  the 
same  case  will  repay  careful  perusal  :— 

"  What  about  these  ignorant  purchasers  ?     They  Likelihood  of 
do  not  have  the  opportunity  of  comparing  the  two  aenw  of  ch 
combinations  together  and  being,  it  may  be  assumed,  stances. 
for  the  most  part  unable  to  read  English,  they  would 
40 


314 

make  little  of  the  opportunity  if  they  had  it.  The 
only  comparison  a  purchaser  of  this  class  could  make 
would  be  between  the  combination  of  marks  on  the 
piece  of  shirting  offered  to  him  and  his  probably  very 
hazy  and  imperfect  recollection  of  the  combination 
appearing  on  the  goods  he  had  been  in  the  habit  of 
purchasing.  If  the  purchaser  on  making  this  com- 
parison was  shrewd  enough  to  detect  differences, 
might  he  not  justly  conclude,  as  was  pointed  out  by 
Lord  Selborne  in  the  case  of  Johnston  v.  Orr  Ewing,1 
that  these  variations  had  been  made  by  the  owners 
themselves  for  reasons  of  their  own  ?  How  then  can 
the  Judge  comparing  these  combinations  in  court 
answer  for  the  ignorant  purchaser  in  the  mofussil  as 
to  the  effect  on  his  mind  of  the  plaintiff's  combination 
which  is  presented  to  him  under  totally  different 
circumstances  ?  Before  the  Judge  can  deal  with  the 
question  as  to  the  likelihood  of  deception  of  any  given 
combination;  there  must  be  evidence  of  the  circum- 
stances and  conditions  under  which  the  goods  come 
into  the  hands  of  the  purchaser  for  whose  guidance 
the  combination  is  intended  and  how  he  regards  and 
is  affected  by  the  marks  stamped  upon  the  cloth  he 
buys.  In  the  case  of  the  plaintiff's  grey  shirtings  the 
practice  is  to  stamp  each  piece  with  their  combina- 
tion. Therefore,  the  question  of  likelihood  of  decep- 
tion is  important  as -regards  the  purchasers  of  the 
single  pieces  and  not  so  much  as  regards  the  pur- 
chasers of  the  entire  bale.  The  importance  of  this 
class  of  evidence  in  supplementing  the  effect  produced 
on  the  Judge's  mind  by  a  comparison  of  the  combina- 
tion is  all  the  greater,  as  the  rule  now  laid  down  is  a 
departure  from  the  old  practice  prevailing  at  the  time 
when  the  cases  of  Johnston  v.  Orr  Ewing  and  the 
Singer  Manufacturing  Co.  were  decided  which  per- 
mitted opinions  of  experts  being  given  to  assist  the 
Judge  in  arriving  at  a  conclusion  on  the  question  ;  see 
North  Cheshire  Co.  v.  Manchester  Brewery  Co." 

In  appeal  the  judgment  of  Sale,  J.,  was  upheld, 
and  the  court  of  appeal  following  re  Christiansen's 
Trade  Mark?  Johnston  v.  Orr  Ewing* -and  Singer  Manu- 


l  (1882)  Iv.R.  7  A.C.  219.  2  4  Ch.  J.  268  at  p.  285. 

3  (1866)  3  R.P.C.  54.  *  (1882)  I..R.  7  A.C.  219. 


315 

factoring  Co.  v.  Loog  L  held  that  in  order  to  arrive  at 
a  conclusion  as  to  whether  a  trade-mark  is  a  colourable 
imitation  of  another  or  not,  the  court  may  look  at  the 
two  marks  in  question  with  its  own  powers  of 
forming  an  opinion,  accompanied  by  the  evidence  in 
the  case.  It  has  to  consider  whether  the  mark  is  cal- 
culated to  deceive  incautious,  ignorant  or  unwary 
purchasers.2 

An  important  question  often  arises  in  connection  Abandonment  of  a 
with  alleged  infringement  of  a  trade-mark  and  that  is 
whether  the  circumstances  show  that  there  has  been 
an  abandonment  of  the  trade-mark  by  the  plaintiff 
and  whether  in  that  case  he  can  still  claim  any 
exclusive  rights  in  regard  to  it.3  This  question  came  up 
for1  determination  in  the  case  of  The  West  End  Watch 
Co.  v.  The  Berna  Watch  Co.*  The  plaintiffs  trading 
under  the  name  and  style  of  the  West  End  Watch  Co. 
imported  watches  into  India  as  sole  agents  of  a 
factory  in  Switzerland  established  at  St.  Imier.  Those 
watches  had  printed  on  their  dials  a  device  and  the 
words  C(  Berna"  and  "  West  End  Watch  Company" 
and  they  came  to  be  known  in  the  Indian  market  as 
the  (  Berna  Watches.'  The  factory  at  St.  Imier  sub- 
sequently passed  into  the  hands  of  the  defendants.  A 
dispute  having  arisen  between  the  plaintiffs  and  the 
defendants  as  to  the  quality  of  watches  manufactured 
by  the  latter,  the  plaintiffs  discontinued  to  send 
orders  to  the  defendants  and  began  to  import  watches 
made  at  other  factories.  In  the  advertisements  issued 
by  the  plaintiffs  since  that  time  as  well  as  in  answer 
to  letters  received  by  them  from,  their  constituents, 
they  declared  that  owing  to  deterioration  in  the 
making  of  the  Berna  watches,  they  had  discontinued 
to  import  them,  and  had  substituted  instead  a  new 
quality  styled  the  ( Secular '  or  the  '  Railway  Service.' 
The  defendants  who  had  incorporated  themselves 
under  the  name  and  style  of  the  Berna  Watch  Co., 

1  (1882)  L.R.  SAC.  15. 

2  I.L.R.     34    Cal.   495;   n    C.W.N.    537.  Abdul    Salam   v.    Hamidulla, 
15  I.C.  116. 

3  Jagarnath  and  Co.  v.  Cresswell  and  others  I.I^.R.  40  Cal.  814,  following 
Lavergne  v.  Hooper,  I.I^.R.  8  Mad.  149.  "  As  the  right  to  a  trade-mark  may 
be    acquired,    so  it   may   be  abandoned.     As  there   is    no  length   of   time 
required   for   the    acquiring   of   a  right   to   a  trade-mark,    in  like  manner 
apart  from  statutory  law  there  is  no  length  of  time  required  to  constitute  an 
abandonment."  *  13  Bom.  L.R.  212. 


3i6 

opened  an  office  in  Bombay,  and  issued  a  circular  in 
which  they  referred  to  the  plaintiffs  as  their  agents 
who  had  sold  six  hundred  thousand  watches  made  at 
the  St.  Imier  Factory,  and  proclaimed  that  Berna 
Co.'s  watches  would  no  longer  be  sold  by  the  plaintiffs 
as  their  sole  agents,  as  they  had  decided  to  deal 
directly  themselves.  The  plaintiffs  filed  this  suit  to 
restrain  the  defendants  from  using  and  imitating 
various  trade  symbols  alleged  to  belong  to  the  plain- 
tiffs and  from  representing  that  the  defendant's  busi- 
ness was  the  business  carried  on  by  the  plaintiffs.  It 
was  held,  on  evidence,  that  as  the  plaintiffs  had  for 
three  years  preceding  the  suit,  both  in  their  dealings 
with  the  new  factories  and  with  their  customers, 
evinced  the  intention  to  abandon  the  name  (  Berna  ' 
as  a  quality  mark  for  their  watches,  they  could  not 
claim  any  exclusive  title  to  the  use  of  that  name 
either  alone  or  in  a  trade-mark  with  a  symbol. 
It  was  further  held  that  the  plaintiffs  were  entitled 
to  an  injunction  restraining  the  defendants  from 
representing  that  they  were  carrying  on  business  of 
which  the  plaintiffs  were  the  sole  agents  or  were  the 
successors  in  business  of  the  plaintiffs.  Where  a 
trade-mark  has  up  to  the  date  of  the  suit  been 
associated  in  the  minds  of  the  buyers  in  a  particular 
country  with  a  particular  kind  of  commodity  sold  by 
the  plaintiff,  then,  unless  there  is  an  abandonment  of 
the  trade-mark  by  him,  he  is  entitled  to  an  injunction 
against  any  other  person  importing  and  selling  the 
commodity  under  that  name,  notwithstanding  that  the 
plaintiff's  name  has,  in  addition  to  the  word  or  trade- 
mark, always  appeared  on  the  article  sold  and  is  well 
known  to  all  dealers.  The  importer  who  by  advertising 
and  pushing  the  sale  of  goods  under  a  particular  mark, 
secures  a  wide  popularity  in  relation  to  the  goods 
sold  by  him,  is  entitled  to  the  protection  of  the  court 
for  that  mark  in  the  country  of  importation  even 
against  the  producer  of  the  goods.  The  fact  that  the 
user  of  a  word  or  mark  always  uses  it  in  conjunction 
with  his  own  name  is  not  conclusive  to  show  that  the 
word  or  mark  cannot  be  claimed  as  a  trade-mark  or  that 
the  user  has  waived  his  rights  in  it  as  a  trade-mark. 
There  can  be  no  property  in  a  trade  mark  in  gross,  apart 
from  the  goods  of  which  it  has  become  the  symbol. 


317 

After  a  brief  survey  of  the  important  Indian  cases 
on  trade-marks  we  are  now  in  a  position  to  consider 
some  of  the  leading  English  cases  which  form  the  English  leading 
basis  of  the  law  on  the  subject.  For  this  purpose, cases- 
one  must  recall  to  mind  the  essential  particulars  of 
a  registrable  trade-mark  as  provided  by  s.  9  of  the 
Trade  Marks  Act  of  1905,  which  is  only  a  revised 
version  of  the  corresponding  section  (section  10)  of 
the  Trade  Marks  Registration  Act  of  1875.  There 
must  be  one  of  the  following  :  —  (i)  the  name  of  a  com- 
pany, individual  or  firm  represented  in  a  special  or 
particular  manner  ;  (ii)  the  signature  of  the  applicant 
for  registration,  or  some  predecessor  in  his  business  ; 
(iii)  an  invented  word  or  invented  words  ;  (iv)  a  word 
or  words  having  no  direct  reference  to  the  character 
or  quality  of  the  goods  and  not  being  according  to  its 
ordinary  signification  a  geographical  name  or  a 
surname.  Now  these  particulars  have  been  indicated 
as  the  result  of  various  cases  in  which  the  question  as 
to  the  nature  of  trade-marks  capable  of  registration 
was  hotly  contested  and  discussed,  and  either  regis- 
tration was  refused  or  the  trade-mark  already  regis- 
tered had  to  be  taken  off  the  register  on  the  ground 
that  it  was  not  capable  of  registration.  The  important 
question  that  arises  may  be  put  in  the  form  of  a 
conundrum :  '  when  is  a  trade-mark  not  a  trade-mark  ?  ' 
In  other  words,  under  what  circumstances  is  an  alleged 
trade-mark  invalid  in  the  eye  of  the  law  ?  What  are 
the  conditions  that  affect  the  right  to  sue  on  a  trade- 
mark ? 

An  instance  of  a  registered  owner  of  a  trade-mark  invalid  trade- 
failing  in  his  attempt  to  attack  a   firm   for  alleged  marks- 
colourable  imitation  of  his  trade-mark,  on  the  ground 
of  invalidity,  is  furnished  by  the  case  of  Richard  v.  Richard  v.  Butcher 
Butcher.1    In  1882   Heidsick&  Co.,  a  French  firm  of 
champagne    growers   registered,    under    the     Trade 
Marks  Registration  Act  1875,  the  words  s  Monopole ' 
and    fDry   Monopole'    as    separate   trade-marks   for 
separate  kinds  of  champagne  on  the  ground  of  user  of 
those  marks'before  the  Act ;  but  they  never  had,  in  fact, 
used  those  words  alone  as  marks  ;  for  upon  the  labels, 
wrappers,  corks  and  cases  for  their  bottles,  they  had 


(1891)  2  Ch.  522;  8  R.P.C.  249. 


always  used  them  in  conjunction  with  the  name  of  the 
firm  '  Heidsick  &  Co.'  which  they  also  registered  by 
itself  in  1882  as  a  trade-mark  under  the  Act ;  and 
upon  the  corks  and  cases  there  were  also  various 
devices  which  had  been  registered  as  trade-marks 
under  the  Act.  The  defendants  in  the  action  moved  to 
rectify  the  Register  of  trade-marks  by  expunging 
therefrom  the  words  'Monopole'  and  '  Dry  Monopole  ' 
on  the  ground  that  they  had  never  been  used  alone  as 
trade-marks  and  were  not  "  special  and  distinctive" 
words  within  the  meaning  of  the  Act  of  1875.  It  was 
held  on  the  above  facts  that  the  words  '  Monopole  '  and 
( Dry  Monopole '  had  not  been  used  as  trade-marks 
within  the  meaning  of  section  10  of  the  Act  of  1875. 
As  Kay,  J.,  observed  :  "There  had  not  been  upon  the 
wrapper  or  upon  the  box  such  a  use  of  the  word, 
( Monopole '  or  the  words  '  Dry  Monopole '  that  a  person 
who  bought  would  believe  either  to  be  the  trade-mark 
and  the  only  trade-mark  of  the  man  using  it." 

in  re  spencer's  Spencer' s    case'2  which   was   referred   to   by   Mr. 

Justice  Kay  in  the  above  judgment  throws  further 
light  on  the  subject.  Spencer's  firm  had  carried  011 
the  business  of  a  steel  and  file  manufacturer.  They 
had  a  mark  consisting  of  a  crescent,  Z  turned  on  one 
side,  and  a  diamond,  which  used  to  be  stamped  on  all 
the  steel  and  files  of  the  best  quality  manufactured 
by  them  with  the  words  '  Diamond  cast  steel '  and 
the  words  'Spencer,  Rotherham.1  The  court  held 
that  there  was  no  separate  user  of  the  words  '  Diamond 
cast  steel'  as  a  trade-mark.  On  appeal  the  judgment 
was  upheld  on  the  ground  that  the  words  6<  Diamond 
cast  steel"  were  not  used  by  themselves  as  a  trade- 
mark but  only  in  conjunction  with  something  else 
which,  with  the  words  in  question,  made  up  and 
composed  the  trade-mark. 

A  "special  and  distinctive  word"  used  in  the 
definition  of  a  trade-mark  in  section  10  of  the  Trade 
Marks  Registration  Act,  1875,  means  a  word  which 
distinguishes  the  goods  to  which  it  is  attached  as 
goods  made  or  sold  by  the  owner  of  the  mark ;  and 
by  using  some  additional  words  so  as  to  induce  the. 


1  (1891)  2  Ch.  at  p.  540. 

2  In  re  Spencer's  Trade-Marks  3  Rep.  Pat.  Cas.  73 ;  54  L.T.N.S.  659. 


general  public,  as  distinguished  from  persons  in  the 
secrets  of  the  particular  trade  who  would  not  be 
deceived,  to  believe  that  goods  so  marked  are  of 
foreign  brand  or  manufacture  the  inventor  of  the 
original  word  is  precluded  from  saying  that  such  word 
is  distinctive  of  his  own  manufacture  so  as  to  be 
capable  of  registration  as  his  trade-mark.  Where  A 
in  1876  registered  as  his  trade-mark  the  word  c  Eton ' 
which  had  been  used  since  1869  and  become  known  in 
the  trade  as  denoting  cigarettes  of  his  manufacture 
and  where  it  was  found  that  he  had  also  been  in  the 
habit  of  selling  and  supplying  for  the  purposes  of  sale 
'  Eton '  cigarettes  in  boxes  so  labelled  as  to  imply 
that  such  cigarettes  were  manufactured  at  St.  Peters- 
burg by  a  Russian  firm,  it  was  held  that  A  by  so  acting 
in  connection  with  the  word  ( Eton '  as  to  suggest  to 
persons  not  in  the  trade  that  the  cigarettes  were  not 
of  his  making,  had  destroyed  the  value  of  the  word  as 
f(  special  and  distinctive"  within  the  meaning  of 
section  10  of  the  Trade  Marks  Act,  1875.* 

A  ground  on  which  a  trade-mark  may  be  declared 
invalid  is  that  at  the  time  of  its  registration  it  was  com- 
mon to  the  trade  in  the  goods  in  respect  of  which 
it  was  registered.  Soon  after  the  passing  of  the 
Trade  Marks  Registration  Act  1875,  the  point  came 
up  for  discussion  in  the  case  of  In  re  Hyde  &  Co!  s  Infe  Hyde 
Trade  Mark.2  Messrs.  Hyde  &  Co.,  had  registered  Trade  Mark. 
the  words  'Bank  of  England'  for  sealing  wax. 
Several  other  makers  of  sealing  wax  used  the  same 
words,  whereupon  they  were  threatened  by  the  re- 
gistered owners.  It  was,  however,  proved  that  the 
words  (  Bank  of  England  '  had  been  used  by  a  great 
number  of  manufacturers  of  sealing  wax.  It  was  held 
that  the  trade-mark  must  be  ordered  to  be  removed 
from  the  Register.  The  case  of  Newman  and  Pinto 3 
illustrates  some  of  the  above  points.  The  plain- 
tiffs who  were  manufacturers  of  and  dealers  in  cigars 
in  England,  imported  from  Germany  cigars  made  of 
Havana  tobacco.  There  was  no  direct  evidence  as  to 
the  place  where  they  were  manufactured,  but  the 
court  found  as  a  fact  that  they  were  also  manufac- 


1  Wood  v.  Lambert  and  Butler  (1886)  32  Ch.  D.  247. 
•2  (1878)  7  Ch.  D.  724.  s  57  L.T.N.  531- 


320 

tured   in   Germany.     Plaintiffs    sold   these   cigars  in 
England   in  boxes  on  which  was  a   label  containing 
their  trade-mark  (registered  under  the  Trade  Marks 
Registration  Act,  1875)  which  consisted  of  the  words 
fLa   Pureza/    and   a  pictorial   representation    of    an 
Indian   woman  holding   up   a  bundle  of  cigars,  two 
winged  boys  each  holding  a  shield,  and  a  background 
representing  a  portion  of  some  tropical  country.     On 
one  shield  was  depicted  the  arms  of  Spain,  and  on 
the   other    those    of   Havanah.     In   the   trade-mark 
as  registered  the  shields  were  blank.     A  smaller  label 
contained  what  was  apparently  the  lithographed  sig- 
nature of    'Ramon    Romnedo/      On  each  box   were 
branded    the    words    (I/a    Pureza'    and     'Habana.' 
The  defendants  having  sold  cigars  in  boxes  contain- 
ing similar  labels  and  marks,  the  plaintiffs  commenced 
an  action  for  an  injunction,  account    of  profits,    etc. 
The  defendant  contended  that   the   plaintiff  was  not 
entitled   to  relief,  because    firstly,  the    plaintiff    was 
guilty   of    misrepresentation   having  used   the  word 
( Habana '    in    such  a  manner  as  to  lead  people  to 
think  that  the  cigars  were  made  of  Havanah  tobacco 
whereas  they  were  admittedly  not  made  in  Havanah 
and    secondly,  that   the  plaintiff   was   not  using  his 
trade-mark  as  registered.     The  plaintiff  proved  that 
in  a  great  number  of  instances  the  word  *  Habana ' 
was  used"  upon   cigars  not  made  in  Havannah  and 
urged  that  the  word  ( Habana '  had  come  to  denote 
shape.     Kekewich,  J.,  granted  the  injunction  prayed 
for.     On    appeal  Mr.   Justice   Kekewich's   judgment 
was  reversed  and  it  was  held  that  as  the  trade-mark 
and    other    marks   on  the   plaintiffs'  boxes  together 
amounted  to  a  dressing  up  of  the  plaintiffs'  cigar  and 
a  misrepresentation  that  they  were  cigars  manufac- 
tured in  Havannah  the  action  must  be  dismissed. 
Lord  Justice  Bowen  in  referring  to  the  word  ' Habana' 
observed  that  he  did  not  attach  much  importance  to 
it,  because  the  word    'Habana'  had  in  the  tobacco 
trade   ceased    to  be  a  term  which  meant  anything 
in   particular  except  that  the  cigar  was  made  in  the 
shape  and  way  in  which  the  old  Havana  cigars  used  to 
be  made.    As  to  Ramon  Romnedo  he  observed  that  it 
was  "a  name  intended  to  appear  to  the  English  pur- 
chasing public  as  a  Spanish   name.     Following   the 


321 

name  of  a  Spanish  brand  and  'Habana'  it  seems  to 
me  it  is  intended,  I  will  not  say  to  state,  but  to  sug- 
gest to  the  purchaser,  that  'Ramon  Romnedo'  is  an 
existing  person,  or  was  an  existing  person,  who  has 
something  to  do  with  Havana,  and  with  an  Havana 
brand ;  and  secondly,  that  he  has  something  to  do 
with  the  cigars  inside  this  box....  It  surely  re- 
presents that  in  the  manufacture  of  the  cigars  some 
Havana  house  is  concerned,  somebody  who  is  entitled 
to  use  the  name  or  the  facsimile  of  the  signature 
'Ramon  Romnedo.'  Well,  that  is  absolutely  false. 
This  box  is  made  in  Germany.  The  whole  of  these 
pictures  are  devised  in  Germany;  the  signature 
(  Ramon  Romnedo'  who  is  a  person  that  never  exist- 
ed, is  put  on  in  Germany ;  and  the  whole  thing  is  a 
simple  sham. ...  I  think  that  no  court  of  justice  can 
assist  a  man  who  is  engaged  in  that  operation."1 

Next  take  the  case  of  Cheavin  v.  Walker %  which  cheavin  v  Walker 
also  illustrates  the  above  principles.  In  this  case  a 
patent  for  improvements  in  filters  was  taken  out  in 
1862  by  S.  Cheavin  in  the  name  of  himself  and  of 
his  son  G.  Cheavin.  After  the  death  of  S.  Cheavin  the 
business  was  carried  on  by  his  son  who  made  and  sold 
filters  under  the  title,  arid  marked  with  a  label  thus 
"S.  C.'s  Improved  Patent  Gold  Medal  Self-cleaning 
Rapid  Water  Filters."  The  patent  of  1862  was  allowed 
to  lapse  in  1865.  In  1867,  G.  Cheavin  altered  his  label 
to  "G.  C.'s  Improved  Patent  Gold  Medal  Self-cleaning 
Rapid  Water  Filters"  above  which  was  a  medallion 
containing  the  royal  arms,  surmounted  by  the  words 
"  By  Her  Majesty's  Royal  Letters  Patent.  "  The  de- 
fendants who  had  been  in  G.  Cheavin' s  employ  set  up 
in  business  in  the  same  town  in  1876  as  makers  and 
sellers  of  filters,  which  were  similar  in  appearance  to 
those  of  G.  Cheavin's  and  inscribed  thus — ffS.  C.'s 
Patent  Prize  Medal  Self-cleaning  Rapid  Water- Filters, 
Improved  and  Manufactured  by  W.  &  Co."  The 
plaintiff  claimed  an  injunction.  It  was  held  by  the 
Court  of  Appeal  that  the  label  used  by  the  plaintiff 
was  not  a  trade-mark  but  only  a  description  of  the 
article  as  made  according  to  S.  Cheavin's  patent  which 
was  common  to  all  the  public ;  secondly,  that  there 


.    l  Ibid  ,  at  p.  37.  *  (1877)  5  Ch.  D.  850. 

41 


322 

was  nothing  in  defendants'  label  calculated  to  mislead 
the  public  by  a  fraudulent  imitation  of  the  plaintiffs' 
label ;  thirdly,  that  t  he  plaintiffs'  label  coupled  with 
the  medallion  of  the  Royal  Arms,  constituted  a  false 
representation  that  the  patent  was  still  subsisting  and 
disentitled  the  plaintiff  to  relief  by  injunction, 
v.  FOX.  it  has  been  observed  above  that  it  is  necessary 

that  the  mark  should  be  distinctive  ard  not  merely 
descriptive.  This  question  arose  in  Millington  v. 
Fox,  one  of  the  earliest  of  the  cases.1  There  the  plain- 
tiffs sued  for  infringement  of  their  trade-marks  by  the 
defendants,  the  trade-marks  consisting,  among  others, 
of  the  words  fCrowby  Millington'  or  one  of  them. 
The  defendants  alleged  that  both  Crowby  and  Milling- 
ton  were  technical  terms  which  had  a  recognised  sig- 
nification in  the  market,  viz.  steel  shaped  in  a  parti- 
cular way,  in  other  words,  that  they  were  descriptive, 
not  distinctive  of  the  plaintiff's  goods.  But  the  most 
important  class  of  cases  in  which  the  question  has 
arisen  is  that  in  which  it  is  argued  that  a  name  or 
A 'distinctive'  mark,  which  may  have  been  (  distinctive '  to  begin 

mark  may  cease  to        ....     \  ..        -• .    ,  .        .  .  ,  -,  ,•       i 

be  distinctive  and  with,  loses  its  distinctive  character  under  particular 
juris.  circumstances  and  becomes  publici  juris,  or  open  to  all 
members  of  the  community.  It  may  be  that  under 
the  leave  and  license  of  the  owner  of  the  mark  it  has 
been  used  by  others,  or  that  by  reason  of  neglect 
in  asserting  his  right  other  people  have  used  the  mark 
along  with  him,  or  that  by  mere  lapse  of  time  the 
mark  has  come  to  have  a  secondary  signification 
which  is  descriptive  of  the  particular  class  of  goods 
upon  which  it  is  placed,  rather  than  indicative  of  their 
source  or  origin,  or  that  owing  to  other  circumstances 
it  has  become  the  common  property  of  the  public 
and  is  no  longer  the  exclusive  proprietary  right  of  an 
individual  trader.  Thus  ( Harvey's  Sauce'  became 
publici  juris  because  the  owners  of  the  name  did  not 
take  proper  precautions  to  protect  their  right.  Lord 
Justice  Mellish  thus  commented  upon  it  in  the  case 
of  Ford  v.  Foster?  "  There  is  no  doubt,  I  think,  that 
a  word  which  was  originally  a  trade-mark,  to  the 
exclusive  use  of  which  a  particular  person,  or  his  suc- 
cessor, in  trade,  may  have  been  entitled,  may  subse- 


(1838)  3  My.  and  Cr.  338.  *  I,.R.  7  Ch.  611. 


323 

quently  become  publici  juris,  as  in  the  case  which  has 
been  cited  of  'Harvey's  Sauce.'  It  was  admitted 
there  that  although  that  had  been  originally  the  name 
of  the  sauce  made  by  a  particular  individual,  it  has 
become  public  juris,  and  that  all  the  world  were  en- 
titled to  call  sauce  f  Harvey's  Sauce  '  if  they  pleased." 
If,  however,  the  owner  of  the  name  jealously  protects 
his  right  by  taking  prompt  steps  against  any  at- 
tempts at  infringement  as  happened  in  the  case  of 
Powell  v.  Birmingham  Vinegar  Brewery  Co.[  the  name  poweii  v.  Binning- 
in  question  may  be  successfully  prevented  from  be-  hamV 
coming  publici  juris.  The  plaintiffs  in  that  case,  had*' 
been  making  and  selling  a  sauce  to  which  they  gave 
the  name  of  ( Yorkshire  Relish  '  and  upon  the  bottles 
was  affixed  a  label  in  red,  white  and  blue.  The  evi- 
dence showed  that  the  defendant  had  placed  before 
his  designer  the  bottle  and  the  label  with  instructions 
to  copy  it  as  closely  as  possible  and  that  the  designer 
had  succeeded  in  making  a  copy  such  as  would  be  like- 
ly to  deceive  purchasers.  Mr.  Justice  Kay  held  that 
it  was  a  gross  fraud  and  that  it  was  calculated  and 
meant  to  deceive.  Referring  to  the  question  as  to 
whether  the  words  '  Yorkshire  Relish '  had  become 
publici  juris,  he  observed  :  <c  Then  there  remained  the 
question  what  the  defendant  had  thought  fit  to  con- 
test, namely,  whether  or  not  he  might  use  the  words 
*  Yorkshire  Relish  '  and  the  mode  in  which  he  attempt- 
ed to  justify  doing  that  was  this.  He  did  not  say  he 
was  aware  of  the  materials,  or  mode  of  manufacture 
of  the  plaintiff's  sauce,  or  that  the  words  (  Yorkshire 
Relish'  had  become  the  exclusive  designation  of  a 
particular  sauce  that  might  be  made  by  anybody,  but 
he  said  other  people  had  been  making  sauces  to  which 
they  had  given  the  name  '  Yorkshire  Relish  .'  From 
the  evidence  it  appeared  that  if  this  were  so,  it  had 
been  done  in  a  secret  and  hole-and-corner  sort  of  way 
and  to  such  a  small  extent,  that  it  did  not  become 
known  to  the  principal  dealers  in  such  goods.  The  de- 
fendant had  no  manufactory  in  Yorkshire  ;  he  had  no 
knowledge  of  the  recipe  of  the  plaintiffs ;  and  he 
could  not  justify  the  use  of  the  title  '  Yorkshire 
Relish'  by  saying  that  other  people  had  used  the 

i  (1896)  Iv.R.  2  Ch.  54;  on  appeal  1897  A.C.  710. 


324 

name/'  An  injunction  was  granted  on  these  grounds 
restraining  the  use  of  the  words  'Yorkshire  Relish  ' 
arid  the  use  of  the  label. 

The  Sewing  Ma-  f  ne  principle  of  a  trade  name  becoming  publici 

juris  is  well  illustrated  by  the  Sewing  Machine  Cases. 
The  earliest  of  these  was  that  of  the  Wheeler  and 
Wilson  Sewing  Machine  Company.1  In  that  case  the 
plaintiffs  were  an  American  Company,  of  which 
Messrs.  Wheeler  and  Wilson,  two  of  the  original  mem- 
bers of  the  company,  possessed  the  patent  right  to 
manufacture  a  particular  type  of  sewing  machines  on  an 
improved  principle.  The  patent  expired  in  the  year 
1866.  In  1867,  the  defendant  began  to  .sell  machines 
other  than  the  plaintiffs',  under  the  title  of  <c  Wheeler 
and  Wilson's  Sewing  Machines  "  and  representing  him- 
self as  agent  for  the  sale  of  Wheeler  and  Wilson  sewing 
machines.  In  an  action  for  injunction  by  the  plaintiff s 
it  was  held  by  James,  V.C.,  that  the  name  '  Wheeler  and 
Wilson '  affixed  to  a  sewing  machine  was  not  distinctive 
of  the  plaintiffs'  manufacture  but  was  only  descriptive 
of  the  particular  type  of  machinery.  "  It  seems  to  me 
that  the  name  '  Wheeler  and  Wilson  Machine '  has  come 
to  signify  the  thing  manufactured  according  to  the  prin- 
ciple of  that  patent.  That  being  so,  I  cannot  re- 
strain anybody,  after  the  expiration  of  that  patent, 
from  representing  his  article  as  being  the  article  so 
patented.  A  man  cannot  prolong  his  monopoly  by 
saying  '  I  have  got  a  trade-mark  in  the  name  of  a 
thing  which  was  the  subject  of  a  patent '  and,  there- 
fore, to  that  extent,  I  think  the  plaintiffs  are  not  en- 
titled to  the  relief  they  ask." 

A  similar  principle  was  laid  down  in  the  case  of 
Singer  Manufacturing  Co.  v.  Wilson  3  and  of  Singer 
Manufacturing  Co.  v.  Loog.*  In  both  these  cases  it 
was  laid  down  that  a  manufacturing  company  who 
affixed  their  own  device  and  their  own  name  to  their 
machines  were  not  precluded  from  using  the  name 
'  Singer '  as  descriptive  of  the  principle  on  which  the 
machines  were  constructed.  There  is,  however,  one 


l  39  L.J.  Ch.  36.  2  Ibid,  at  p.  40. 

3-2  Ch.D.  434,  443;  3  A.C.  376;  45  LJ.  Ch.  490;  47  L.J.  Ch.  481;  34 
L.T.  (N.S.)  858  :  38  Iv.T.  (N.S.)  303;  24  W.R.  1023  ;  26  W.R.  664. 

*  18  Ch.D.  395,  412;  8  A.C.  15;  52  LJ.  Ch.  481  ;  44  L.T.  (N.S.)  888; 
48  L.T.3. 


325 

Important  proviso,  viz.  that  there  must  be  no  attempt 
to  represent  that  the  machines  were  manufactured  by 
the  original  manufacturer,  nor  must  there  be  an  appro- 
priation of  the  special  or  distinctive  device  of  the  ori- 
ginal manufacturers,  so  as  to  lead  to  deception. 

The  Linoleum  Case L  is  perhaps  the  most  instructive  The  Linoleum 
case  on  this  branch  of  the  subject  and  it  also  illus-  v-  Nairn- 
trates  the  respective  functions  of  a  trade-mark  and  a 
trade-name.  A  Mr.  Walton  had  obtained  a  patent  in 
1863  for  preparing  floor-cloth  by  means  of  a  certain 
solidified  or  oxydised  oil,  to  which  he  gave  the  name 
'Linoleum/  and  the  floor-cloth  made  by  him  there- 
with had  been  called  Linoleum  Floor  Cloth  and  ap- 
parently also  Linoleum.  The  word  Linoleum  had 
not  been  previously  used  and  was  a  fancy  name  invent- 
ed by  Mr,  Walton,  and  the  substance  itself  appeared  to 
have  been  new.  In  1864  the  Linoleum  Manufacturing 
Co.,  the  plaintiffs  in  this  action,  was  formed  and  took 
assignments  of  Mr.  Walton's  patents  and  rights.  The 
patent  of  1863  had  now  expired.  The  defendants  who 
were  floor-cloth  manufacturers  proposed  to  make  and 
sell  Linoleum  Floor  Cloth,  calling  it  by  that  name. 
The  plaintiffs  thereupon  brought  a  suit  for  restraining 
them.  The  plaintiffs  had  a  trade-mark  which  used  to 
be  stamped  upon  the  floor-cloth  with  the  words  '  Lino- 
leum Floor  Cloth '  written  along  side  it  and  the  words 
*  F.  Walton's  Patent'  also  written  conspicuously  on 
the  article.  The  case  of  the  plaintiffs  was  that  the 
essential,  or  one  of  the  essential  and  material  terms  of 
their  trade-mark  was  the  word  'Linoleum'  and  that 
this  had  been  taken  by  the  defendants.  The  defend- 
ant's trade-mark  contained  their  own  name  much 
more  conspicuously  than  the  word  Linoleum  and  was 
quite  dissimilar  from  the  plaintiff's  trade-mark.  They 
contended  that  the  word  Linoleum  was  merely  des- 
criptive of  the  article  and  was  not  an  essential  part  of 
the  trade- mark.  Fry,  L.J.,  held  that  the  words  '  F. 
Walton's  patent '  was  the  most  conspicuous  part  of 
the  trade-mark  used  by  the  plaintiffs  and  that  the 
word  Linoleum  appeared  to  be  used  in  a  descriptive 
sense.  "  The  word  directly  or  primarily  means  solidi- 
fied oil.  It  only  secondarily  means  the  manufacture 


I'The  Linoleum  Co.  v.  Nairn,  7  Ch.  D.  834 ;  47  I/.J.   Ch.  (1878)  430 


326 

of  the  plaintiffs  and  has  that  meaning  only  so  long  as 
the  plaintiffs  are  the  sole  manufacturers.  In  my  opi- 
nion, it  would  be  extremely  difficult  for  a  person  who 
had  been  by  right  of  some  monopoly  the  sole  manu- 
facturer of  a  new  article,  and  has  given  a  new  name 
to  the  new  article  meaning  that  new  article  and  noth- 
ing more,  to  claim  that  the  name  is  to  be  attributed 
to  his  manufacture  alone  after  his  competitors  are  at 
liberty  to  make  the  same  article." 

It  must  not  be  supposed  that  because  a  name 
which  was  formerly  applied  to  a  patented  article  has, 
on  the  expiration  of  the  patent,  become  public  prop- 
erty and  has  come  to  designate  a  particular  class  or 
character  of  goods,  any  man  is  at  liberty  to  use  the 
label  by  which  the  patentees  were  accustomed  to  dis- 
tinguish their  goods.  That  would  be  taking  the  rule 
as  to  a  name  becoming  publici  juris  too  far.  The 
limits  within  which  the  rule  is  to  be  applied  were  indi- 
cated by  Wood,  V.C.,  afterwards  Lord  Hatherley,  thus  : 
"  It  was  said  that  when  a  patent  expired,  it  was  open 
to  the  public  at  large  to  adopt  the  description  of  the 
article  by  which  it  had  become  known  to  the  world, 
and  to  use  the  label  by  which  the  article  made  by  the 
plaintiffs  had  been  theretofore  distinguished.  It  does 
not,  however,  follow  because  upon  the  expiration  of 
the  patent  the  article  and  known  description  became 
open  to  all,  that,  therefore,  all  would  be  entitled  to 
use  the  label  by  which  the  patentees  had  been  accus- 
tomed to  distinguish  their  goods.  The  public  may 
have  acquired  confidence  in  that  particular  label,  and 
that  confidence  may  have  given  a  value  to  it,  which 
the  patentees  may  be  entitled  to  have  protected  after 
the  expiration  of  the  patent." 

The  cases  discussed  above  illustrate  the  principle 
not  only  of  infringement  of  trade-mark,  but  also  in 
many  instances  the  principle  of  passing  off.  Cases  can 
easily  be  multiplied.  But  it  is  necessary  to  add  only 
a  few  more  of  the  leading  cases  which  are  luminous 
on  special  points.  The  case  of  Wotherspoon  v.  Currie 
is  one  of  them.  Messrs.  Fulton  &  Co.,  had  formerly 
carried  on  the  business  of  starch  makers  at  Glenfield 


l  Iv.R.  7  Ch.  834  at  p.  837.     See  also  Braham  v.  Bustard  i  H.    and 
447  cited  at  p.  338. 


and  M. 


327 

near  Paisley.  They  manufactured  a  species  of  powder 
starch  from  sago  and  gave  it  the  name  of  t  Glenfield 
Double  Refined  Powder  Starch'  by  which  name  it 
became  well  known  to  the  public.  One  William 
Wotherspoon  purchased  the  business  from  Messrs. 
P'ultoii  &  Co.,  and  with  the  business  the  plant  and 
stock  at  Glenfield.  For  some  years  Wotherspoon  car- 
ried on  the  business  of  making  starch  at  Glenfield  it- 
self, but  subsequently  the  works  were  removed  to  an- 
other and  more  commodious  place  in  Maxwell  town,  as 
also  near  Paisley  which  became  known  as  the  e  Glen- 
field Starch  Work,'  the  article  itself  being  commonly 
known  as  Glenfield  starch.  Currie  was  a  starch  and 
corn-flour  manufacturer.  His  place  of  residence  had 
been  for  many  years  at  Glenfield  during  the  whole  of 
the  time  that  the  starch  works  of  Fulton,  and  after- 
wards of  Wotherspoon,  had  been  carried  on  there. 
Currie  had  a  brother  in  the  business,  and  finding 
that  there  was  a  considerable  sale  of  starch  under  the 
name  of  (  Glenfield  Starch  '  conceived  the  idea  of  be- 
coming a  starch  manufacturer  and  applied  to  Fulton 
to  let  him  occupy  a  small  portion  of  the  building  at 
Glenfield.  Thus  Currie  succeeded  in  setting  up  his 
manufactory  at  Glenfield.  He  sold  his  starch  in 
packets  bearing  the  name  '  Royal  Palace  Starch ' 
and  also  the  name  of  (  Currie '  but  also  in  very  dis- 
tinguishing and  emphasised  character  the  word  ( Glen- 
field.' The  plaintiffs  contended  that  the  only  object  of 
the  defendant  was  to  give  colour  to  the  use  of  the  word 
(  Glenfield  '  on  the  defendant's  labels.  On  the  other 
hand,  it  was  contended  by  the  defendant  that  no  person 
can  acquire  a  monopoly  in  the  name  of  a  place  so  as  to 
prevent  any  other  person  carrying  on  his  business  at 
that  place,  as  in  the  present  case,  from  putting  the 
name  of  the  place  on  the  articles  produced  there. 
Malins,  V.C.,  granted  the  injunction  prayed  for.  On 
appeal  James,  LJ.,  dissolved  the  injunction.  The 
plaintiff  appealed  to  the  House  of  L,ords,  which  re-in- 
stated the  judgment  of  Malins,  V.C.  Lord  Hatherley 
observed  :  "  The  name  of  the  article  if  it  has  acquired 
a  name,  should  not,  by  any  honest  manufacturer,  be 
put  upon  his  goods  if  a  previous  manufacturer  has, 
by  applying  it  to  his  goods,  acquired  the  sole  use  of 
that  name.  I  mean  the  use  in  this  sense,  that  his 


328 

goods  have  acquired  by  that  description  a  name  in  the 
market,  so  that  whenever  that  designation  is  used  he 
is  understood  to  be  the  maker,  where  people  know 
who  the  maker  is  at  all  or  if  people  have  been  pleased 
with  an  article,  it  should  be  recognised  at  once  by  the. 
designation  of  the  article,  although  the  customers  may 
not  know  the  name  of  the  manufacturer.  It  may  very 
well  be  that  hundreds  of  people  like  Glenfield  starch 
and  order  it  because  they  think  that  it  is  the  best 
starch  that  they  ever  used,  without  having  heard  the 
name  of  Mr,  Wotherspoon  and  without  knowing  him 
at  all.  They  say,  I  want  the  thing  that  bears  the 
name,  the  thing  made  in  a  particular  way,  made  by 
the  manufacturer  who  makes  it  in  that  way,  and  there 
being  only  one  manufacturer  who  does  make  it  in  that 
way,  I  want  the  article  made  by  that  manufacturer. 
That  being  so,  it  appears  to  me  that  the  respondent, 
if  he  was  an  honest  manufacturer  setting  up  in  busi- 
ness, would  take  great  care  and  all  the  more  because 
he  was  setting  up  in  business  at  a  place  where  Glenfield 
starch  had  been  manufactured  and  sold,  to  disconnect 
his  name  with  any  name  which  had  become  exclu- 
sively a  designation  of  an  article  manufactured  by  the 
appellants."  In  other  words  the  court  held  that 
the  word  '  Glenfield  '  had  acquired  a  secondary  signi- 
fication in  connection  with  a  particular  manufacturer 
— it  had  become  the  trade  designation  of  the  starch 
made  by  the  plaiiitifL 

Ford  v.  Foster.  jn  p0rd  v.  Foster'2  the  plaintiff  had  brought  out  a 

shirt  of  a  particular  shape  which  he  had  called  '  The 
Eureka '  and  which  obtained  a  wide  reputation  in  the 
market.  He  always  marked  his  shirt  with  the  follow- 
ing mark.  '  R.  Ford's  Eureka  Shirt,  London '  and 
described  his  shirt  in  all  advertisements  and  elsewhere 
as  'Ford's  Eureka  Shirts.'  The  defendants  marked 
their  shirts  with  the  words  (  The  Eureka  Shirt '  and 
advertised  themselves  as  manufacturing  and  selling 
f  Eureka  Shirt.'  It  was  contended  by  the  defendants 
that  the  two  descriptions  being  different  there  could 
be  no  deception  or  likelihood  of  confusion.  But  on 
appeal  it  was  held  that  the  word  f  Eureka '  was  the 


1  5  H.Iy.  508  at  pp.  514,  515. 

•2  (1827)  Iv.R.  7  Ch.  611  ;  41  I,.J.  Ch.  682. 


329 

leading  description  and  in  purchasing  the  shirt  the 
public  would  be  guided  by  it  rather  than  the  name 
'  Ford  '  to  which  it  is  attached.  "  It  is  quite  obvious/' 
said  Mellish  L.J.,  "that  although  he  puts  the  word 
'  Ford'  to  it  for  the  purpose  of  enabling  people  to  come 
to  him  and  to  tell  them,  when  you  buy  a  Eureka  shirt 
you  must  buy  it  of  Ford,  yet  a  large  number  of  per- 
sons who  read  these  advertisements  would  be  attracted 
by,  and  remember,  the  word  '  Eureka '  and  would 
wholly  forget  the  word  'Ford.''  In  the  case  of 
Orr-Ewing  &  Co.  v.  Johnston  &  Co./  the  plaintiffs  Ory-Ewing  &  Co.  v 
had  used  upon  their  Turkey  red  yarn  a  ticket  con-  J°* 
taining  among  other  things  a  representation  of  two 
golden  elephants  and  a  golden  banner  which,  they 
claimed,  had  been  known  ever  since  its  introduction 
as  the  ( Elephant  Ticket '  or  ( Two  Elephant  Ticket.' 
They  also  claimed  that  the  yarn  to  which  it  was 
affixed  had  become  widely  known,  especially  in  the 
Indian  and  African  markets,  as  '  Elephant  Yarn  '  and 
had  acquired  a  great  reputation  under  that  name.  The 
defendants  used  a  ticket  upon  their  Turkey  red  yarn 
which  was  of  a  similar  shape  and  colour  to  the  plain- 
tiffs' two-elephant  ticket  and  it  also  had  two  golden 
elephants  and  a  golden  banner.  It  was  alleged  that 
the  defendants'  ticket  was  calculated  to  deceive  pur- 
chasers into  the  belief  that  their  goods  were  those  of  the 
plaintiffs'.  The  plaintiffs  claimed  an  injunction  and 
other  consequential  reliefs.  It  was  held  that  the  two 
elephants  were  a  material  and  substantial  part  of  the 
plaintiffs '  ticket.  ( '  If  one  man  will  appropriate  to 
himself  a  material  and  substantial  part  of  the  ticket 
which  another  man  has  used  for  the  purpose  of  indicat- 
ing his  goods,  he  ought  so  to  appropriate  it,  and  with 
such  precautions,  as  that  the  reasonable  probability 
of  error  should  be  avoided."  On  the  ground  that 
such  probability  of  error  was  not  avoided  the  court 
granted  the  injunction  asked  for.  Barlow  v.  Johnson*  Bariow  v.  Johnson. 
is  another  case  which  illustrates  the  principle  that 
adopting  a  material  and  substantial  part  of  another's 
label  constitutes  an  infringement.  The  plaintiffs  were 
manufacturers  of  Turkish  towels.  They  manufactured 


1  41  Iv.J.  Ch.  at  p.  689  ;   (1872)  Iv.R.  7  Ch.  at  p.  629. 

2  Iv.R.  13  Ch.  D.  434.  *  Ibid.,  at  p.  448.  *  (1890)  W'.N.  no. 

42 


330 

a  particular  kind  of  Turkish  towel  and  put  upon  it  a 
label  or  ticket  which,  among  other  things,  contained 
the  word  '  Osman  '  in  a  conspicuous  place.  The  towels 
acquired  in  course  of  time  a  great  reputation  in  the 
market.  The  defendants,  a  rival  firm,  began  to  turn 
out  a  similar  kind  of  Turkish  towel  and  to  use  upon  it 
a  ticket  not  entirely  similar  to  the  plaintiffs  but 
bearing  in  a  prominent  position  the  word  f  Osman/ 
An  injunction  was  issued  restraining  the  defendants 
from  using  the  word  '  Osman  '  on  the  ground  that  it 
was  the  essential  feature  of  the  label  and  its  use  by 
another  was  calculated  to  cause  deception  or  confusion. 
What  constitutes  a  colourable  imitation  is  laid  down 
by  Lord  Langdale  in  the  following  famous  dictum  of 
Croft  v.  Day.  his  in  Croft  v.  Day.[  (C  First,  there  must  be  such  a 
general  resemblance  of  the  forms,  words,  symbols,  and 
accompaniments  as  to  mislead  the  public ;  and,  second- 
ly, a  sufficient  distinctive  individualism  must  be 
presented,  so  as  to  procure  for  the  person  the  benefit 
of  that  deception  which  the  general  resemblance  was 
calculated  to  produce.  To  have  a  copy  of  the  thing 
would  not  do,  for,  though  it  might  mislead  the  public 
in  one  respect,  it  would  lead  them  back  to  the  place 
where  they  were  to  get  the  genuine  article,  an  imitation 
of  which  was  improperly  sought  to  be  sold.  For  the 
accomplishment  of  such  a  fraud,  it  was  necessary  in 
the  first  instance  to  mislead  the  public ;  and  in  the 
next  place  to  secure  a  benefit  to  the  party  practising 
the  deception  by  preserving  his  own  individuality." 
Provezende  ^ganl>  Lord  Cranworth  in  Seixo  v.  Provezende*  lays 
e'  down  the  rule  in  the  following  terms  :  (( It  is  hardly 
necessary  to  say  that,  in  order  to  entitle  a  party  to 
relief,  it  is  by  no  means  necessary  that  there  should 
be  absolute  identity ;  what  degree  of  resemblance  is 
necessary  is,  from  the  nature  of  the  thing,  a  matter 
incapable  of  definition  a  priori.  All  that  courts  of 
justice  can  do  is  to  say  that  no  trader  can  adopt  a 
trade-mark  so  resembling  that  of  a  rival  as  that 
ordinary  purchasers,  with  ordinary  caution,  are  likely 
to  be  misled.  It  would  be  a  mistake,  however,  to 


7  Beav.  84. 


7  -tseav.  84. 

(1866)  L.R.  i  Ch.  192;   14  Iv.T.  (N  S  )  314;   I4W.R.  357;   12  Jur.  (N.S. 


suppose  that  the  resemblance  must  be  such  as  would 
deceive  persons  who  should  see  the  two  marks  placed 
side  by  side.  The  rule  so  restricted  would  be  of  no 
practical  use.  If  a  purchaser  looking  at  the  article 
offered  to  him,  would  naturally  be  led,  from  the  mark 
impressed  on  it,  to  suppose  it  to  be  the  production  of 
the  rival  manufacturer,  and  would  purchase  it  in  that 
belief,  the  court  considers  the  use  of  such  a  mark  to  be 
fraudulent.  But  I  go  further  :  I  do  not  consider  the 
actual  physical  resemblance  of  the  two  marks  to  be 
the  sole  question  for  consideration.  If  the  goods  of  a 
manufacturer  have,  from  the  mark  or  device  he  has 
used,  become  known  in  the  market  by  a  particular 
name,  I  think  that  the  adoption  by  a  rival  trader  of 
any  mark  which  will  cause  his  goods  to  bear  the  same 
name  in  the  market  may  be  as  much  a  violation  of 
the  rights  of  that  rival  as  the  actual  copy  of  his 
device." 

A  few  words  are  necessary  on  the  question  of  Assignment  of 
assignment  of  trade-marks.  Under  Section  22  of  the  Trade-Marks. 
Trade  Marks  Act,  1905  (5  Ed.  VII,  C.  15),  a  trade- 
mark when  registered  can  be  assigned  and  transmitted 
only  in  connection  with  the  goodwill  of  the  business 
concerned  in  the  goods  for  which  it  has  been  registered 
and  shall  be  determinable  with  that  good  will.  It 
appears  that  this  statutory  provision  is  only  con- 
firmatory of  the  common  law.1  This  view  has  also  been 
taken  by  the  Judicial  Committee  in  the  case  of  /. 
Ulman  &  Co.  v.  Cesar  Luba'2 

The  remedies  in  an  action  for  infringement  are  Remedies, 
of  three  kinds,  first,  an  injunction  restraining  further 
infringement ;  secondly,  delivery  up  for  destruction 
to  the  plaintiff  of  any  goods  already  marked  with 
the  spurious  mark  which  may  be  in  the  posses- 
sion or  control  of  the  defendant,  or  erasure  of  the 
marks;  thirdly,  damages  for  the  infringement,  or, 
in  the  alternative,  an  account  of  the  profits  made 
by  the  defendant  by  the  sale  of  goods  bearing  the 


1  See  Hall  v.  Barrows  (1863)  4  De  G.  J.  and  S.  150  at  158  s  c.  46  Eng- 
Rep.  873.  Hannah  v.  Juggernath  &>  Co.  (1914)  I.Iy.R.  42  Cal.  262;  19. 
C.W.N.  i. 

*  (1908)  13  C.W.N.  82  P.C.  See  also  West  End  Watch  Co.  v.  Benia  Watch 
Co.  13  Bom.  Iv.R.  212;  loI.C.  805  where  it  was  laid  down  that  there  cau  be 
no  property  in  a  trade-mark  in  gross  apart  from  goods  of  which  it  has  be- 
come the  symbol. 


332 

offending  mark.  Some  one  or  more  of  these  remedies 
may  meet  with  the  requirements  of  the  case. 

In  order  to  found  the  jurisdiction  of  the  court 
three  things  must  be  established  ;  first,  the  existence 
of  a  trade-mark;  next,  the  fact  of  an  imitation, 
whether  a  direct  imitation  or  one  with  such  variations 
that  the  court  must  regard  them  as  merely  colourable, 
and  thirdly,  the  fact  that  the  imitations  were  made 
without  licence  or  anything  that  the  court  would 
regard  as  acquiescence  in  their  use.1 

It  is  obvious  that  the  most  beneficial  remedy  for 
the  plaintiff  is  an  injunction  because  it  summarily  stops 
the  infringement.  The  general  rules  regarding  injunc- 
tion apply  to  trade  mark  cases.  Thus  an  injunction 
may  be  granted  even  if  there  is  no  actual  infringement, 
provided  it  is  proved  that  the  defendant  contemplates 
committing  an  infringement  or  has  threatened  to 
commit  one.2  Possession  of  a  considerable  quantity 
of  goods  bearing  the  pirated  trade-mark,3  even  as  a 
forwarding  agent*  will  be  sufficient  evidence  of  inten- 
tion to  infringe.  And  an  injunction  may  be  granted 
notwithstanding  a  promise  by  the  defendant  to  commit 
no  further  infringement/  or  though  the  defendant  has 
discontinued  the  use  of  the  infringing  trade-mark/ 
and  has  undertaken  not  to  use  any  of  the  infringing 
labels/  or  even  when  he  has  actually  retired  from  the 
business  in  which  the  pirated  marks  were  used.B  In 
some  cases,  however,  the  undertaking  of  an  innocent 
inf ringer  has  been  accepted.9  The  infringement  need 


1  Kinahan  v.  Bolton  15.  Ir.  Ch.  75  ;  Singer  Manufacturing  Co.  v.  Loog 
18  Ch.  D.  395. 

*  The  Emperor  of  Austria  v.  Day  and  Kossouth  3  De  G.  P.  and  J.  217  ; 
30  I/.J.  Ch.  690  (1861).     "  The  very  life  of   a  trade-mark  depends  upon  the 
promptitude  with  which  it  is  vindicated."      Johnston  v.  Orr  -Ewing  7  AC. 
219. 

3  Upmann  v.  Forester  (1883)  24  Ch.  D.  231.  "The  infringement  of  a 
patent  and  of  a  trade-mark  may  be  treated  on  the  same  footing,  the  question 
being  one  and  the  same,  namely,  whether  the  right  of  exclusive  user  has  been 
infringed."  Per  Chittv,  J.,  Ibid.,  at  p.  234,  citing  Adair  v.  Young  (12  Ch. 
D.  13)  and  Neilson  v.  Belts  (L.R.  5  H.I/). 

*  Upmann  v.  Elkan  L.R.  (1871)  12  Eq.  140;  I/.R  7  Ch.  A.C.  130. 

&  Geary  v.  Norton  (1846)  I  De  G.  and  Sm.  9  s.c.  63  Eng.  Rep.  949; 
Burgess  v.  Hills  (1885)  26  Beav.  244  s.c.  53  Eng.  Rep.  891;  Tongev.  Ward 
21  Iv.T.N.S.  480;  Abdul  Salamv.  Hamidulla  15  I.C.  116. 

6  Guinness  v    Heap,  Sebastian's  Digest  of  Trade  Mark  cases,  p.  617. 

?  American  Tobacco  Co.  v.  Guest  (1892)  i  Ch.  630. 

3  Weed  v.  Peterson  12  Abb.  Pr.  N.S.  178. 

9  Upmann  v.  Forester  (1883)  24  Ch.  D.  231.  But  the  court  made  the 
defendant  liable  for  all  the  costs.  "  As  there  is  no  fund  out  of  which 


333 

not  be  fraudulent/  and  an  injunction  will  be  granted 
even  if  it  was  made  in  ignorance  of  the  plaintiff's 
right.2  The  injunction  may  be  couched  in  general 
terms  so  as  to  comprehend  all  the  phases  and  features 
of  the  mark  in  question  and  to  prohibit  the  use  of  it  in 
any  shape  or  form  whatsoever ;  or  it  may  be  more 
limited  in  its  operation, — not  disallowing  the  use  of 
the  mark  altogether  but  laying  down  conditions  and 
safeguards  as  to  the  manner  of  using  it  or  as  to  the 
matter  of  it:'  It  may  also  be  limited  with  reference 
to  the  use  of  the  mark  in  a  particular  country  or 
market.4 

It  is  usual  for  the  plaintiff  to  apply  for  an  inter-  interlocutory 
locutory  injunction  at  an  early  period.  This  application  l  ' 

must  be  made  speedily  6  as  delay  would  lead  the  court 
to  infer  that  the  case  is  not  of  an  urgent  nature.6  In 
such  cases  the  court  is  principally  guided  by  the 
balance  of  convenience.  Where  the  intervention  of 
the  court  is  sought  on  interlocutory  applications 
there  is  always  a  danger  of  prejudging  on  imperfect 
and  incomplete  materials  questions  which  must  be 
finally  determined  at  the  hearing  of  the  case.  Unless 
therefore  an  overwhelming  prima  facie  case  is  made 
out  that  irreparable  injury  may  be  suffered  by  the 
party  without  an  injunction,  the  court  will  not  usually 
intervene.  Failing  to  make  out  a  strong  prima  facie 
case,  the  plaintiffs  remedy  is  to  apply  for  expedition 
of  the  suit.1 

The  second  remed}^  is  applicable  to  cases  where 


successful  plaintiffs  can  receive  costs,  their  costs  must  be  paid  by  the  defend- 
ants, although  they  may  be  innocent."    Per  Chitty,  J.  Ibid.,  at  p.  237. 

1  Millington  v.  Fox  (1838)  3  My.  and  Cr.  338  s.c.  40  Eng.  Rep.  956. 

2  Moet  v.    Custon  (1864)  33   Beav.  578  s  c.  55   Eng.  Rep.  493  ;  Edels'en 
v.  Edelsten  (1863)  i  De  G.J.  and  S.  185  ;  s.c.  46  Eng.  Rep.  72  ;  Orr-Ewing 
&>   Co.  v.    Grant    Smith  &•  Co.  2  Hyde  185  ;  Cartier  v.  Carlile  31   Beav.  292 
s.c.    54   Eng.     Rep.    1151;     Upmann  v.  Forester    24   Ch.    D.    231.     But   an 
account  of  profits  or  compensation  will  not  be  given  (see  infra). 

3  Ford  v.  Foster    L,.R.    7    Ch.    A.C.  611;  Siegert  v.  Findlater  7  Ch.     D. 
801  ;  Braham  v.  Beachim  7  Ch.   D.  848  ;  Massam  v.  Thorley's  Cattle  Food  Co. 
14  Ch.   D.   748;  Orr-Ewing  v.  Johnston  7  A.C.   219;    Reddawayv.  Banham 
(i  96)  A.C.  199. 

4  Carver  v.  Bowkir  Dig.    581  ;  Barker  v.  Manico  10  P.R.   93;  Orr-Ewing 
v.  Johnston  6-  Co.  13   Ch.  D"  434  at  464  s.c.  7  Ap.  C.  219,  227.     In  re  Paine 
(1893)  2  Ch.    567;  In  re  Societe  Anonyre  Des   Verrerries  de  /'  Etoile  (1894) 
i  Ch.  61. 

5  Chubb  v.  Griffiths  35  Beav.   127. 

6  Isaacson  v.  Mampson  41  L.J.  Ch.  101. 

?  F.  Reddaivay    &    Co.    v.    Schrodder   Smidt   &   Co.    (1903)    8    C.W.N. 


334 


Delivery    up   or 
erasure. 


Account  of 
its. 


prof- 


the  defendant  has  spuriously  marked  articles  in  his 
possession  or  under  his  control.  In  such  cases  the 
court  orders  the  erasure  of  the  marks  or  the  delivery 
up  of  the  marked  articles  for  that  purpose  l  or,  if  era- 
sure is  impracticable,  for  destruction.  Destruction 
will  not  be  ordered  if  it  is  possible  to  satisfactorily 
erase  the  spurious  marks  .*  Sometimes  only  the  spu- 
rious labels,  cards  or  tickets  will  be  ordered  to  be  de- 
livered up  and  destroyed  .* 

The  liability  to  account  for  profits  is  usually  in- 
cidental to  the  injunction.4  The  plaintiff,  however, 
may,  at  his  option,  have  an  enquiry  as  to  damages  in 
lieu  of  the  account,  but  not  both/'  Mere  proof  of  in- 
fringement entitles  the  plaintiffs  to  nominal  damages/ 
and  no  allegation  of  special  damage  is  necessary.1  But 
where  the  plaintiff  claims  substantial  damages  he  must 
establish  the  extent  of  the  damage  done.s  It  will  not 
be  assumed  that  the  amount  of  goods  sold  by  the  de- 
fendant under  the  infringing  trade-mark  would  have 
been  sold  by  the  plaintiff  but  for  the  defendant's  unlaw- 
ful competition.9  Generally  speaking  the  injury  done  is 
that  the  sale  of  the  plaintiff's  goods  is  in  some  degree 
diminished  10  on  account  of  the  sale  of  the  defendant's 
goods,  but  there  may  be  further  damage  under  excep- 
tional circumstances,  e.g.  where  the  plaintiff's  trade 
reputation  has  been  injured  on  account  of  the  inferior- 
rity  of  the  infringing  goods,  or  where  the  plaintiff  has 
been  compelled  to  lower  his  prices  on  account  of  the 
unlawful  competition  of  the  defendant.11  But  neither 


l  Dent  v.   Turpin 
s.c.  7  Ch.   130. 


2  J.   and  II.  139;   U  pmann  v.  Elkan  ly.R.  12  Eq.  140 
Slazenger  v.  Feltham  (1889)  5  T.L.R.  265  s.c.  6  R.P.C.  531. 


3  Farina  v.  Silverlock  i  K.  and  J.  509  ;  9  De  G.M.  and  G.  214;  4  K.  and 
J.  650;  Edelsten  v.  Edelsten  i  De.  4  J.  and  S.  185  s.c.  46  Eng.  Rep.  72. 

*  Cartier  v.  Carlile  31  Beav.  292  ;  see  Edelsten  v.  Edelsten  i  De.  G.J.  and 
S.  185  ;  Saxlehner  v.  Apollinaris  Co.  (1897^  T  Ch.  893. 

&  Lever  v  Goodwin  36  Ch.  D.  i  ;  Neilson  v.  Belts  (1871)  L.R.  5  H.L.  i  ;  De 
vitre  v.  Belts  (1872)  L.R.  6  H  L,.  319. 

6  Blofeld  v.  Payne  (1833)  4  B.  and  Ad.  410. 

1  Rodgers  v.  Nowill  (1847)  5  C.B.  109  s.c  17  L.J.C.B.  52;  Reddaway 
v.  Bentham  Hemp  Spinning  Co.  (1892)  2  Q.B.  639  ;  Dixon  v.  Fawcus  (1861) 
3  E.  and  E.  537  ;  30  L.J.Q  B.  137;  Abdul  Salam  v.  Hamidullah  15  I.C.  116. 

8  Davenport  v.  Rylands  L.R.  i  Eq.  308,  per  Wood,  V.C. 

»  Leather  Cloth  Co.  v.  Hirschfield  (1885)  L.R.  i  Eq.  299. 

10  M  orison  v  Salmon  2  Man.  and  G.  385  ;  2  Scott  N.  R.  449  ;  Chappell  v. 
Davidson  2  K.  and  J.   123;   Singer  Manufacturing  Co.  v.    Wilson   2  Ch.    D. 
434,442,451,454:  Reddaway  v.  Bentham  Hemp   Spinning  Co.   (1892)  2  Q.B. 
639;  Taylor  v.  Carpenter  2  Wood  and  M.  i. 

11  Cf.  Alexander  v.  Henry  (1895)  12  R.P.C.    360.    See  also  Manockji  Petit 


535 

an  account  nor  an  enquiry  as  to  damages  will  be  or- 
dered if  the  evidence  of  the  sale  of  the  spuriously 
marked  articles  is  insufficient  to  make  out  an  intention 
to  deceive  on  the  part  of  the  infringer,  as  for  instance 
in  a  case  where  the  defendant  filled  a  few  bottles  bear- 
ing the  plaintiff's  mark  with  a  preparation  of  his  own, 
having  removed  from  them  the  plaintiff's  label  and 
placed  upon  each  of  them  his  own  label J  and  under 
circumstances  which  showed  that  he  could  not  have 
had  any  fraudulent  intention. 

An  innocent  infringement  is  no  defence  to  a  plain-  innocent 
tiff's  claim  to  an  injunction  ;  but  it  appears  that  the  Tufrin-ement- 
position  is  different  with  regard  to  account  of  profits 
or  damages.  As  Lord  Chancellor  Westbury  observes  :* 
' '  Although  it  is  well  founded  in  reason  and  also  settled 
by  decision,  that  if  A  has  acquired  property  in  a  trade- 
mark, which  is  afterwards  adopted  and  used  by  B  in 
ignorance  of  A's  right,  A  is  entitled  to  an  injunction  ; 
yet  he  is  not  entitled  to  any  account  of  profits  or 
compensation,  except  in  respect  of  any  user  by  B  after 
he  became  aware  of  the  prior  ownership."  Again, 
"  on  authority  and  principle  it  is  clear  that  if  a  man 
manufactures  goods  and  knowingly  marks  them  with 
the  trade-mark  of  another  person,  he  is  accountable 
for  the  profits  so  made.  Thus,  if  a  man  brews  porter 
and  puts  the  name  and  mark  of  Guiness  upon  it, 
knowing  he  has  no  right  to  that  mark,  and  sells  his 
own  manufacture  as  the  manufacture  of  another 
person,  he  is  liable  to  account.  Even  if  he  did  not 
at  first  know  that  there  were  such  persons  as  Guiness 
and  Company,  still,  if  when  he  has  that  knowledge  he 
continues  the  sale,  it  makes  him  accountable  to  them 
for  the  profits  obtained  by  the  use  of  their  name. 
But  if  a  person,  who  is  not  a  brewer,  applies  to  an 
agent  for  Guiness' s  porter,  and  that  agent  sends  him 
a  spurious  article  under  that  name,  such  person  is  in 
no  default  until  he  is  told  that  the  porter  he  is  selling 
is  not  that  of  Guiness ;  and  though  Guiness  is  entitled 


Manufacturing  Co.    v.    Mahalaxmi  Spinning  and  Weaving  Co. ,  Ltd.  I.L  R. 
TO  B.  617. 

1  Rose  v.  Loftus  (1878)   47  LJ.  Ch.   576.   In  this  case  Malins,  V.C.,  did 
not  grant   an  injunction  even,  but   made  the  defendant  give  an  undertaking 
that  he  would  not  repeat  the  act  (p.  579). 

2  Edelsten  v.  Edelsten   i  De.  GJ.   and  S.  185  at  p.  199  s.c  46  Eng.  Rep. 
72. 


to  an  injunction  to  restrain  the  future  sale  of  the 
spurious  article,  he  is  not  entitled  to  an  account  of 
the  profits."  '  On  the  above  principle  it  has  been  held 
that  in  all  those  cases  where  it  is  possible  to  impute 
to  a  person  imitating  a  trade- mark  a  desire  to  gain 
the  advantages  which  are  attached  to  the  use  of  that 
particular  trade-mark  which  is  the  private  property 
of  another  person,  in  other  words,  where  there  has 
been  a  colourable  imitation  of  a  trade- mark  "the 
liability  to  account  for  the  profits  is  incident  to  the 
injunction,  and  the  fact  of  the  defendant  not  knowing 
to  whom  the  trade-mark  he  copies  belongs,  does  not, 
in  the  slightest  degree,  affect  the  right  of  the  owner 
to  an  injunction  and  to  an  account  of  the  profits  as 
soon  as  he  ascertain  that  it  is  imitated  and  used." 
The  profits  will  not  necessarily  be  calculated  from  the 
sale  of  the  offending  articles  to  the  ultimate  pur- 
chaser. Thus,  where,  they  have  been  sold  to  middle- 
men and  the  middlemen  find  it  for  their  benefit  not 
to  use  them  fraudulently,  the  profit  for  which  the 
defendants  must  account  is  the  profit  which  they 
have  made  by  the  sale  of  the  articles  in  a  fraudulent 
dress  to  the  middlemen.  The  underlying  principle 
is  that  such  conduct  on  the  part  of  the  defendants 
puts  (<  into  the  hands  of  the  middlemen  the  means  of 
committing  a  fraud  on  the  plaintiffs."  An  account 
of  profits  will  not  be  granted  in  a  case  in  which  the 
plaintiff  after  becoming  aware  of  the  infringement 
allows  the  defendant  to  continue  in  the  expectation 
of  ultimately  obtaining  the  profits  from  him ;  *  and 
mere  neglect  to  take  proceedings  has  also  sometimes 
been  visited  with  the  same  consequence 6 — unless  the 
delay  was  in  order  to  collect  sufficient  evidence  to 


1  Per  Sir   John   Romilly  M.R.  in  Moet  v.   Custon   (1864)  33    Beav.  578 
s  c.  55  Eng.  Rep.  493. 

2  Per  Sir  John  Romilly  M.R.  in  Cartier  v.   Carlile  (1862)  31  Beav.    292 
at  p.  298  s.c.  54  Eng.  Rep.  1151. 

3  Per  Cotton,  L.  J  . ,  in  Lever  v.  Goodwin  ( 1 887)  36  Ch.  D.  i  at  p.  7  ;  followed 
in  Madhavji   Dharamsey  Manufacturing  Co.  Ltd.  v.    Central  India  Spinning 
Weaving  and  Manufacturing  Co.,  Ltd.  I.I/.R.  41  Bom  49. 

*  Beard  v.  Turner  (1865)  13  L.T.N.S.  746  at  749;  Anglo-Swiss  Condensed 
Milk  Co  v.  Swiss  Condense'd  Milk  Co.  (1871)  W.N.  163  ;  in  the  latter  case  an 
injunction  was  granted. 

5  Harrison  v.  Taylor  (1865)  n  Jur.  N.S.  408;  12  L.T.N.S.  339,  though 
ar  injunction  was  granted.  Md.  Jewa  Mot  all  a  v.  H.S.  Wilson  (1911 )  10  I.C. 
787  (a  case  under  S.  15  of  the  Indian  Merchandise  Markets  Act  IV  of  1899). 


337 

establish  the  plaintiff's  case.1  In  one  case  *  the  account 
was  limited  to  profits  earned  after  the  filing  of  the 
suit  as  there  was  some  delay  on  the  plaintiff's  part  and 
some  misrepresentation  in  his  advertisements  and 
invoices  and  it  was  further  found  that  the  defendant's 
trade  being  larger  than  the  plaintiff's,  the  extent  of  the 
defendant's  trade  would  by  no  means  be  a  measure 
of  the  injury  done  to  the  plaintiff's.  It  appears  that 
in  order  that  the  defendant  may  succeed  on  the  plea 
of  delay  he  must  show  not  merely  that  the  plaintiffs 
might  have  been  aware  of  the  infringement  but  that 
he  "knew  of  the  particular  manner  in  which  the 
defendant  was  making  up  his  goods  and  selling  them 
as  his  own." 

Infringement  of  a  trade-mark  is  a  continuing  limitation, 
wrong  and  so  long  as  the  infringement  continues  a 
fresh  cause  of  action  arises  de  die  in  diem.*  In  the 
case  of  a  suit  for  compensation  Art.  40,  sch.  I  of  the 
Indian  Limitation  Act  (IX  of  1908)  applies.  A  suit 
for  an  account  of  profits  is  in  effect  a  suit  for  compen- 
sation/ The  period  of  limitation  in  a  suit  for  an 
injunction  to  restrain  from  the  infringement  of  a  trade- 
mark is  governed  by  Art.  120,  Sch.  I  of  the  Limita- 
tion Act.'' 

The  summary  remedies  for  the  infringement  of  Summary 
trade-mark  are  to  be  found  in  the  Indian  Penal  Code  Rellledies- 
(Act  XLV  of  i86o),7  and  the  Indian  Merchandise 
Marks  Act  (IV  of  1889).  Sections  480  and  482  of 
the  Indian  Penal  Code  provides  that  whoever  uses  a 
false  trade-mark,  i.e.  marks  any  goods  or  any  case, 
package  or  other  receptacle  containing  goods  or  uses 
any  case,  package,  or  other  receptacle  with  any  mark 
thereon,  in  a  manner  reasonably  calculated  to  cause 
it  to  be  believed  that  the  goods  so  marked,  or  any 
goods  contained  in  any  such  receptacle  so  marked, 
are  the  manufacture  or  merchandise  of  a  person  whose 
manufacture  or  merchandise  they  are  not — shall  be 

1  Lee  v.  Haley  (1869)    L.R.  5  Ch.    155. 

•2  Ford  v.  Foster  (1872)  L.R.  7  Ch.  633. 

3  Siegert  v.  Findlater  26  W.R.  459  at  462.  Apparently  each  case  must 
be  governed  by  its  own  circumstances ;  but  the  above  seems  to  be  the  legi- 
timate conclusion  from  the  observations  of  Fry,  J.,  in  the  case. 

*  Abdul  Salam  v.  Hamidula  (1912)  15  I.C.  116. 

5  Kinmond  v.  Jackson  (1877)  I. L.R.  3  Cal.  17. 

6  Aga  Mahmood  v.  Edward  Pelter  2  L.B.R.  113. 
1  Sections  478  to  489 

43 


338 

punished  with  either  simple  or  rigorous  imprisonment 
for  a  term  which  may  extend  to  one  year,  or  with  fine 
or  with  both,  unless  he  proves  that  he  acted  without 
intent  to  defraud.  Under  section  483  counterfeiting 
a  trade-mark  is  liable  to  be  punished  with  imprison- 
ment of  either  description  for  a  term  which  may 
extend  to  two  years,  or  with  fine,  or  with  both. 
Making  or  having  in  one's  possession  any  die,  plate  or 
other  instrument  for  counterfeiting  a  trade-mark  is 
also  an  offence  (under  sec.  485)  punishable  with 
imprisonment  of  either  description  for  a  term  which 
may  extend  to  three  years,  or  with  fine,  or  with  both. 
Sec.  486  lays  down  that  whoever  sells,  or  exposes, 
or  has  in  possession  for  sale  or  any  purpose  of  trade 
or  manufacture  any  goods  or  things  with  a  counterfeit 
trade-mark  affixed  to  or  impressed  upon  the  same 
or  to  or  upon  any  case,  package,  or  other  receptacle 
in  which  such  goods  are  contained  shall  be  punished 
with  imprisonment  of  either  description  for  a  term 
which  may  extend  to  one  year,  or  with  fine  or  with 
both,  unless  he  proves  (a)  that  having  taken  all 
reasonable  precautions  against  committing  an  offence 
under  this  section,  he  had  at  the  time  of  the  com- 
mission of  the  alleged  offence,  no  reason  to  suspect 
the  genuiness  of  the  mark,  and  (b)  that,  on  demand 
made  by  or  one  behalf  of  the  prosecutor,  he  gave 
all  the  information  in  his  power  with  respect  to  the 
person  from  whom  he  obtained  such  goods  or  things, 
or  (c)  that  he  otherwise  acted  innocently.  Sections 
484  and  487  of  the  Indian  Penal  Code  deal  with  kindred 
offences,  relating  to  false  marks. 

The  Indian  Merchandise  Marks  Act  (IV  of  1889) 
deals  with  false  trade  descriptions.  A  trade  descrip- 
tion, as  defined  in  the  act,  means  any  description, 
statement,  or  other  indication,  direct  or  indirect — (a)  as 
to  the  number,  quality,  measure,  gauge,  or  weight  of 
any  goods,  or  (b)  as  to  the  place  or  country  in  which, 
or  at  the  time  at  which,  any  goods  were  made  or, 
produced,  or  (c)  as  to  the  mode  of  manufacturing  or 
producing  any  goods,  or  (d)  as  to  the  material  of 
which  any  goods  are  composed,  or  (e)  as  to  any  goods 
being  the  subject  of  an  existing  patent,  privilege 
or  copyright;  and  the  use  of  any  numeral,  word, 
or  mark  which,  according  to  the  custom  of  the  trade, 


339 

is  commonly  taken  to  be  an  indication  of  any  of  the 
above  matters,  shall  also  be  deemed  to  be  a  trade 
description  within  the  meaning  of  this  Act.  A  false 
description,  according  to  the  Act,  means,  a  trade  des- 
cription which  is  untrue  in  a  material  respect  as 
regards  the  goods  to  which  it  is  applied,  and  includes 
every  alteration  of  a  trade  description,  whether  by 
way  of  addition,  effacement,  or  otherwise,  where  that 
alteration  makes  the  description  untrue  in  a  material 
respect ;  the  fact  that  a  trade  description  is  a  trade- 
mark or  part  of  a  trade-mark  shall  not  prevent 
such  trade  description  being  a  false  trade  description 
within  the  meaning  of  the  Act.  Section  6  of  the  Act 
lays  down  that  if  a  person  applies  a  false  trade  des- 
cription to  goods,  he  shall,  subject  to  the  provisions 
of  the  Act,  and  unless  he  proves  that  he  acted  without 
intent  to  defraud,  be  punished  with  imprisonment 
for  a  term  which  may  extend  to  three  months,  or 
with  fine  which  may  extend  to  two  hundred  rupees, 
and,  in  the  case  of  a  second  or  subsequent  conviction 
with,  imprisonment  which  may  extend  to  one  year, 
or  with  fine,  or  with  both.  The  penalty  for  selling  or 
exposing,  or  having  in  possession  for  sale  or  any 
purpose  of  trade  or  manufacture,  any  goods  or  things 
to  which  a  false  trade  description  is  applied,  as  laid 
down  in  section  7 — -is  imprisonment  for  a  term  which 
may  extend  to  three  months,  or  with  fine  which 
may  extend  to  two  hundred  rupees,  and  in  case  of  a 
second  or  subsequent  conviction  with  imprisonment 
which  may  extend  to  one  year,  or  with  fine,  or  with 
both — unless  the  same  ingredients  as  are  mentioned  in 
section  486  of  the  Indian  Penal  Code  are  proved 
by  way  of  exculpation.  The  innocent  inf ringer  is  pro- 
tected by  the  provisions  of  section  8  of  the  Act. 
Where  a  person  is  accused  under  section  482  of  the 
Indian  Penal  Code  of  using  a  false  trade-mark,  by 
reason  of  his  having  affixed  mark  to  any  goods  or  re- 
ceptacle in  the  manner  mentioned  in  section  480  or 
481  of  that  Code,  as  the  case  may  be,  or  under  section 
6  of  this  Act,  of  applying  to  goods  any  false  trade 
description,  or  under  section  485  of  the  Indian  Penal 
Code  of  making  any  die,  plate  or  other  instrument  for 
the  purpose  of  counterfeiting  a  trade-mark  and  proves 
(a)  that  in  the  ordinarv  course  of  his  business  he 


340 

is  employed,  on  behalf  of  other  persons,  to  apply 
trade-marks  or  trade  description  as  the  case  may  be, 
to  make  dies,  plates,  or  other  instruments  for  making, 
or  being  used  in  making  trade-marks  and  that,  in 
the  case  which  is  the  subject  of  the  charge,  he  was 
not  employed  and  was  not  interested  in  the  goods 
or  other  thing  by  way  of  profit  or  commission  depend- 
ent on  the  sale  thereof,  and  (b)  that  he  took  reason- 
able precautions  against  committing  the  offence 
charged,  and  (c)  that  he  had,  at  the  time  of  the  com- 
mission of  the  alleged  offence,  no  reason  to  suspect 
the  genuineness  of  the  mark  or  description,  and  (d) 
that,  on  demand  made  by  or  on  behalf  of  the  pro- 
secutor, he  gave  all  the  information  in  his  power 
with  respect  to  the  persons  on  whose  behalf  the  mark 
or  descripton  was  applied,  he  shall  be  acquitted.  Sec- 
tion 9  of  the  Act  provides  that  the  court  convicting  or 
acquitting  a  person  under  any  of  the  above  offences 
may  direct  the  forfeiture  to  His  Majesty  of  all  goods 
and  things  by  means  of,  or  in  relation  to,  which  the 
offence  has  been  committed  or,  but  for  such  proof  as 
aforesaid,  would  have  been  committed.  There  is  a 
peculiar  provision  with  respect  to  piece  goods  in  section 
12,  which  makes  it  an  offence  punishable  with  fine  up 
to  one  thousand  rupees  to  remove  or  attempt  to  remove 
any  piece  goods  from  the  premises  of  a  factory  with- 
out the  length  of  each  piece  being  stamped.  Costs  of 
the  proceedings  may  be  ordered  to  be  paid  (as  laid 
down  in  section  14)  to  the  defendant  by  the  prosecutor, 
or  to  the  prosecutor  by  the  defendant,  having  regard 
to  the  information  given  by,  and  the  conduct  of  the 
defendant  and  prosecutor  respectrv  ely ;  such  costs  are 
recoverable  as  fine. 


LECTURE   IX. 
CONTRACTS  IN  RESTRAINT  OF  TRADE. 

A  contract   in   restraint  of  trade   is   a    contract  Contracts  in  rc 
whereby  a  person  binds  himself  not  to  follow  some  £.*££ of  trade~ 
particular  trade,   occupation,  calling  or  profession,  or 
engage  in  some  particular  business  or  enterprise.      In 
the  words  of  Eve,  J.,  it  means  "  a  contract  whereby  a 
restraint  is  imposed  upon  the  liberty  of  an  individual 
to  earn  his  living,  or  exercise  his  calling,  or  in  other 
words  a   contract  whereby  the  individual  liberty   of 
action  in  trading  is  interfered  with  and  controlled."  ' 
The  history  of  the  law  relating  to  contracts  in  res- 
traint of  trade  furnishes   an  unique  example  of  the 
elasticity    of    English  common  law.      At  the  earliest 
stage  we  find  that  the  courts  set  their  face  against  any 
undertaking  on  the  part  of  a  trader  to  restrain  himself 
from  the  exercise  of  his  calling,  the  principle  of  the 
common  law  being  that  every  one  has  a  right  to  pursue 
his  own  calling  without  any  let  or  hindrance  whatso- 
ever.    Gradually,  however,  the  law  is  changed,  till  at 
present  we  find  that  the  older  doctrine  has  practically 
been  reversed  in  deference  to  the  changed  conditions  of 
society  and  the  requirements   of  modern   commerce. 
What  is  particularly  striking  is  that  this  considerable 
change  has  been  effected  by  a  process  of  gradual  evo- 
lution without  any  manifest  discontinuity  and  without 
any   extraneous  aid   from  legislation.     Sir  Frederick 
Pollock  in  his  treatise  on  the  '  Genius  of  the  Common 
Law  '  portrays  very  vividly  the   slow  but  sure  change 
which  has  come  over  the  common  law  in  regard  to 
monopolies,  and  in  particular,  in  regard  to  restraints 
of  trade.     I  can  hardly  do  better  than  quote  his  own 
words  on  the  subject  <(  When  monarchs,  "  says  he,  "  in 
search  of  revenue  took  on  themselves  to  grant  monopo- 
lies, they  found  themselves  in  acute   conflict  with  the 
people  and  with  the  lawyers  ;  and  our  lady  the  Com- 
mon Law  showed,  not  for  the  first  time,  that  she  could 
and  would  maintain  her  ideals  even  against  the  King's 

l  fief) worth  Manufacturing  Co.  v.  Pyott   L.R.  (  1920  )  i  Ch   D.  at  p.  33. 


342 

authority  and  whatever  learning  he  could  command 
among  his  counsellors.  But  the  danger  was  not  ex- 
hausted here.  Private  and  local  monopolies  might  be 
created  by  agreement,  or  short  of  actual  monopoly, 
capable  workers  might  be  tempted  by  the  offers  of 
rivals  or  successors  to  deprive  the  public  of  their  ser- 
vices and  unduly  narrow  the  field  of  competition. 
From  these  .considerations  the  whole  chapter  of  the 
law  against  contracts  in  restraint  of  trade  was  devel- 
oped. In  the  earlier  decisions,  and  still  more  in  dicta 
which  have  been  carelessly  quoted  in  modern  books  as 
if  they  had -positive  authority,  we  find  an  extreme 
jealousy  of  all  undertakings  by  which  a  man  purports 
to  restrain  himself  in  any  degree  from  the  exercise  of 
his  calling.  It  is  not  clear  that  this  attitude  was  al- 
ways unreasonable.  But  as  time  went  on  the  old 
and  merely  local  conditions  disappeared,  the  volume  and 
scope  of  trade  increased  and  the  range  of  business  re- 
lations in  space  became  practically  unlimited.  At  last 
it  was  obvious  that  no  man  dealing  on  a  large  scale 
could  safely  acquire  the  good-will  of  a  business  unless 
he  were  protected  from  destructive  competition  at  the 
hands  of  the  seller  himself ;  without  adequate  protec- 
tion of  that  kind,  indeed,  there  really  would  be  no- 
thing substantial,  in  many  kinds  of  business,  for  the 
seller  to  offer  and  he  would  find  no  buyers.  Hence  it 
became  needful  to  recognize  that  restrictions  which 
appeared  extravagant  in  the  sixteenth  or  eighteenth 
century  might  be  no  more  than  reasonable  in  the  nine- 
teenth ;  and  here  we  may  see  one  of  our  lady's  most 
remarkable  successes.  Without  any  aid  of  legislation 
without  express  disapproval  of  a  single  received  au- 
thority, the  law  as  to  agreements  in  restraint  of  trade 
has  in  our  own  time  effected  a  change  of  front  that 
has  brought  it  completely  into  line  with  modern  busi- 
ness conditions." 

The  principle  on  Now   what  is    tne  principle    on  which   the    rule 

which  the  rule  is  against  contracts  in  restraint,  of  trade  is  based  ?  In 
the  words  of  a  well-known  American  writer  "  The 
general  principles  on  which  contracts  in  restraint  of 
trade  have  been  held  to  be  in  contravention  of  public 
policy  and,  in  consequence,  void,  is  that  it  is  the  duty 
of  the  law-making  power  to  secure  to  every  citizen,  the 
right  to  pursue  his  ordinary  avocation  and  to  dispose 


343 

of  his  labour,  or  the  product  thereof,  without  restraint, 
and  to  protect  the  public  from  the  evil  consequences 
of  an  agreement  under  which  it  would  be  deprived  of 
the  benefits  of  competition  in  skilled  labour.  The 
law  has  regard,  on  the  one  hand,  to  the  interests  of 
the  person  restrained  from  labour  or  trade,  protecting 
him  from  oppression  or  from  the  consequences  of  an 
injudicious  bargain,  and,  on  the  other  hand,  it  takes 
account  of  the  interest  of  the  community  in  providing 
that  it  shall  not  be  deprived  of  the  benefit  of  his  busi- 
ness or  exposed  to  the  burden  of  his  support,  as  a  re- 
sult of  his  lack  of  employment."  ' 

The  principle  stated  above  is  simple  and  intelli-  011  of  the 

gible.  But  the  application  of  it  is  fraught  with  diifi- 
culties,  for  it  is  hard  to  make  out  in  each  individual 
case  how  far  the  restriction  of  a  man's  right  to  con- 
tract himself  out  of  his  business  is  justifiable  and  how 
far  such  restraint  is  likely  to  prove  conducive  to  public 
weal.  An  appeal  to  the  doctrines  of  public  policy  is 
too  readily  made  in  connection  with  the  law  of  mono- 
polies in  all  its  branches.  In  the  law  relating  to  res- 
traints of  trade  it  seems  to  be  particularly  dangerous 
in  its  application.  (C  Contracts  creating  monopolies," 
says  Greenhold  in  his  book  on  Public  Policy  "  are  null 
and  void  as  being  contrary  to  public  policy.  "  This 
hardly  conveys  any  information,  unless  public  policy 
can  be  defined.  But  public  policy  is  indefinite  in  its 
nature  and  changes  with  the  habits  wants  and  opinions 
of  the  society  in  question.  An  act  which  is  illegal  as 
being  against  public  policy  under  the  conditions  of  a 
given  time  and  country  may  not  be  so  under  the  con- 
ditions of  another.  The  spirit  and  temper  of  the 
people,  the  character  of  its  institutions,  the  conditions 
of  business  enterprise  and  industry,  have  to  be  studied 

1  Beach's  '  Monopolies  and  Industrial  Trusts '  2nd  edition,  pp.  107-108. 
A  similar  enunciation  of  the  principle  is  given  by  a  learned  American 
author;  "The  rule  of  public  policy  contravening  contracts  in  restraint  of 
trade  is  based  upon  two  reasons  or  motives.  One  is  that  the  performance  of 
such  contract >  injures  the  public  by  depriving  it  of  the  restricted  party's 
skill  and  industry  ;  the  other  that  the  restricted  party  is  himself  injured  be- 
cause seeking  thereby  to  preclude  himself  from  pursuing  his  occupation, 
and  thus  being  prevented  from  supporting  himself  and  his  family,  and  in- 
directly threatening  the  public  with  becoming  burdened  with  their  support. 
If  r/either  of  these  evils  ensues,  and  if  the  contract  is  founded  on  a  valid 
consideration  and  a  reasonable  ground  of  benefit  to  the  other  party,  it  is  free 
from  objection  and  may  be  enforced". — Spelling's  'Trust  and  Monopolies,' 
p.  4. 


344 


Public  policy  un- 
certain and  fluc- 
tuating. 


Reasons  for  the 
rule  against  such 
contracts. 


with  a  view  to  determine  what  is  likely  to  be  against 
public  policy.  The  standard  of  public  policy  must  be 
the  standard  of  the  day  and  what  was  laid  down  as  to 
public  policy  a  long  time  ago  may  be  of  little  use  in 
settling  what  is  the  actual  standard  at  the  present  day. 
As  Mr.  Justice  Story  observes,  "  Public  policy  is  in  its 
nature  so  uncertain  and  fluctuating,  varying  with  the 
habits  and  fashions  of  the  day,  with  the  growth  of 
commerce  and  usages  of  trade,  that  it  is  difficult  to 
determine  its  limit  with  any  degree  of  exactness.  It 
has  never  been  defined  '  by  the  courts  but  has  been  left 
loose  and  free  of  definition  in  the  same  manner  as 
fraud.  This  rule,  may,  however,  be  safely  laid  down 
that,  wherever  any  contract  conflicts  with  the  morals 
of  the  time  and  contravenes  any  established  interest 
of  society,  it  is  void  as  being  against  public  policy." 

It  is  said  that  although  '  public  policy '  does  not 
admit  of  a  sharply  drawn  definition,  it  is  something 
real  and  tangible.  So  it  is,  to  be  sure.  But  we  get 
something  more  definite  and  intelligible  when  instead 
of  an  appeal  to  the  doctrines  of  public  policy,  an  at- 
tempt is  made  to  analyse  the  real  nature  of  the  harm 
apprehended  by  contracts  in  restraint  of  trade.  In 
Alger  v.  Thatcher  :;  the  court  thus  stated  the  reasons 
for  the  rule  against  such  contracts:  "Such  contracts 
injure  the  parties  making  them,  because  the}7  diminish 
their  means  of  procuring  livelihood,  and  a  competency 
for  their  families.  They  tempt  improvident  persons, 
for  the  sake  of  present  gain,  to  deprive  them  of  the 
power  to  make  future  acquisitions,  and  they  expose 
such  persons  to  impositions  and  oppressions.  (2)  The}7 
tend  to  deprive  the  public  of  the  services  of  men  in 
the  employment  and  capacities  in  which  they  may  be 
most  useful  to  the  community  as  well  as  themselves. 
(3)  They  discourage  industry  and  enterprise,  and 

1  "  Public  policy    does  not   admit  of   definition"   per  Kekewich,  J.,  in 
Davies  v.  Dairies  36  Ch.  D.  359,  364  (  1907  ).      In  People  Ex.   ffel.  v.   Chicago 
Gas  Trust  Co.  public  policy  has  been  defined  as  "  that  principle  of  the  law 
which  holds  that  no  subject  or  citizen  can  lawfully  do  that  which  has  a  ten- 
dency to  be   injurious  to   the  public  or  against  the  public  good."       In  the 
leading  case  on  the  subject  Egerton  v.  Earl  Brownlow  (1853)  4  H.L.C.  p. 196, 
the  classical  definition  given  by  Lord  Brougham  is  practically  in  the   same 
terms   "  Public  policy  is  that  principle  of  the  law  which  holds  that  no  sub- 
ject can  lawfully  do  that  which  has  a  tendency  to  be  injurious  to  the  public, 
or  against  the  public  good.  "     See  also  Chapter  I,  supra,  p.  16. 

2  Story  on  Contracts  Art.  675. 
*  TQ  Pick  u. 


345 

diminish  the  products  of  ingenuity  and  skill.  (4)  They 
prevent  competition  and  enhance  prices.  (5)  They 
expose  the  public  to  all  the  evils  of  monopoly  and  this 
is  especially  applicable  to  wealthy  companies  and  large 
corporations,  which  have  the  means,  unless  restrained 
by  law,  to  exclude  rivalry,  monopolise  business,  and 
engross  the  market.  Against  evils  like  these,  wise 
laws  protect  individuals  and  the  public  by  declaring 
all  such  contracts  void." 

The  earliest  case  on  the  subject  as  appears  from 
the  Year  Books  was  heard  in  the  second  year  of  the 
reign  of  Henry  V  (A.D.  1415)  and  it  was  there  con- 
sidered to  be  settled  law  that  contracts  in  restraint  of  Ullder  the  old  law 

j  .  T  .  «  ., .  i .  ~H   .  contracts  m 

trade  were  void  as  against  public  policy.  This  was  restraint  of  trade 
particularly  so  in  those  times  in  as  much  as  no  man  <vere  void- 
under  the  then  existing  law  could  exercise  any  par- 
ticular trade  without  being  previously  apprenticed  and 
admitted  to  it,  so  that  if  he  covenanted  not  to  exercise 
his  own  trade  he  practically  covenanted  not  to  exercise 
any — in  other  words,  not  to  earn  his  living.1  In 
Colgate  v.  Batchelor  3  a  bond,  by  a  haberdasher  con- 
ditioned to  pay  £20  if  he  used  the  trade  of  a  haber- 
dasher within  a  certain  place  and  time  was  declared  to 
be  against  law  and  void,  the  court  observing  that 
"  although  it  were  alleged  that  here  he  is  not  prohibited 
or  obliged  absolutely  that  he  shall  not  exercise  the 
trade  of  an  haberdasher,  but  that  if  he  exercise  it,  he 
shall  pay  to  the  plaintiff:  £20,  and  so  it  differs  from  the 
case  of  Hen.  v.  PI.  5.  b.  yet  it  was  all  one  ;  for  he  ought 
not  to  be  abridged  of  his  trade  and  living."  In  the  cele- 
brated Ipswich  Tailor's  case  '6  exception  was  taken  to 
a  provision  in  a  bye-law  of  an  association  of  the  tailors 
on  the  ground  that  it  was  in  restraint  of  trade.  The 
court  laid  down  the  principle  of  common  law  thus  : 
"  No  man  could  be  prohibited  from  working  in  any 
lawful  trade,  for  the  law  abhors  idleness,  the  mother 
of  all  evil,  and  specially  in  young  men,  who  ought  in 
their  youth  (which  is  their  seed-time)  to  learn  lawful 
sciences  and  trades  which  are  profitable  to  the  common- 
wealth, and  whereof  they  might  reap  the  fruit  in  their 


1   Spelling's  'Trusts  and  Monopolies,  p.  5. 

*  Cro  Eliz.  872;  s.c.  78  Eng.  Rep.  1057.     Seealso  Pragnell  v.  GosseAleyn 
67  ,•    s.c,  82  Eng.  Rep.  919. 

3  ii  Co.  5.3  a;   i  Rolle  Abr.  16;  s.c.  77  Eng.  Rep.  1218. 

44 


346 


Exigencies  of  a 
more  expanded 
trade  and 
commerce  made 
the  courts  revise 
their  views. 


Mitchell  v. 
Reynolds. 


old  age,  for  idle  in  youth,  poor  in  age ;  and  therefore 
the  common  law  abhors  all  monopolies,  which  prohibit 
any  from  working  in  any  lawful  trade." 

In  the  old  cases  above  referred  to  we  find  the  at- 
titude of  the  court  uniformly  was  strongly  to  dis- 
courage any  and  every  covenant  that  might  in  the  least 
limit  the  freedom  of  a  subject  to  exercise  his  trade  or 
profession  as  he  chose.  Thus  all  agreements,  whether 
general  or  limited  in  space  and  time,  would  probably 
have  been  held  bad.  But  the  exigencies  of  a  more 
expanded  trade  and  commerce  made  it  incumbent  upon 
the  courts  to  revise  their  views  and  adopt  a  more  elastic 
doctrine.  This  is  indicated  by  Lord  Bowen  in  the 
following  passage:  "One  reason  for  the  adoption  of 
a  more  elastic  doctrine  appears  from  a  judgment  deli- 
vered in  Broad  v.  Jolly fe  (1620).'  In  London  and 
other  large  towns  it  had  become  usual  already  for 
traders  to  let  their  shops  and  wares  to  their  servants 
when  they  were  out  of  their  apprenticeship,  and  for 
the  servants  to  covenant  that  they  would  not  use  that 
trade  in  such  a  shop  or  in  such  a  street.  The  courts, 
yielding  to  the  progress  of  industry  and  commerce 
finally  decided  that  a  man  might  restrain  himself 
voluntarily  and  upon  valuable  consideration  from  using 
his  trade  in  a  particular  place.  The  onus,  however,  at 
this  time  still  lay  on  the  covenantee  to  show  that  the 
covenant  on  which  he  wras  insisting  had  been  made  for 
good  consideration,  and  that  it  wras  reasonable." 

The  case  of  Mitchell  v.  Reynolds :5  represents  one 
of  the  landmarks  in  the  history  and  development  of 
this  doctrine.  The  action  was  in  debt  upon  a  bond 
executed  by  the  defendant  which  recited  that  the 
defendant  had  assigned  to  the  plaintiff  a  lease  of  a 
messuage  and  bakehouse  in  Liquorpond  Street,  in 
the  parish  of  St.  Andrews,  Holborn,  London,  for 
the  term  of  five  years  and  that  if  the  defendant  should 
exercise  the  trade  of  a  baker  within  the  parish  during 
the  said  term,  he  should  pay  to  the  plaintiff  the 
sum  of  £50.  Parker,  C.J.,  in  an  elaborate  judgment 
in  which  he  reviewed  all  the  authorities  then  extant 
on  the  subject,  held  that  the  restraint  was 


'  Cro.  Jac.  ^96;  s.c-79  Eng.  Rep.  509. 
*  (1893)  i  Ch.  630  at  p.  655. 
i  P.  Williams  181  ;  s.c.  24  Eng.  Rep.  347. 


•as  valid.     The 


347 

basis  of  the  law  on  the  subject  as  it  then  existed  is  to 
be  found  in  the  following  passage :  "  We  ate  all  of 
opinion  that,  a  special  consideration  being  set  forth  in 
the  condition  which  shews  it  was  reasonable  for  the 
parties  to  enter  into  it,  the  same  is  good  ;  and  that  the 
true  distinction  of  this  case  is,  not  between  promises 
and  bonds,  but  between  contracts  with  and  without 
consideration ;  and  that  wherever  a  sufficient  con- 
sideration appears  to  make  it  a  proper  and  an  useful 
contract  and  such  as  cannot  be  set  aside  without  injury 
to  a  fair  contractor,  it  ought  to  be  maintained ;  but 
with  this  constant  diversity,  viz,  where  the  restraint  is 
general,  not  to  exercise  a  trade  throughout  the  king- 
dom, and  where  it  is  limited  to  a  particular  place ;  for 
the  former  of  these  must  be  void,  being  of  no  benefit 
to  either  party,  and  only  oppressive."  Thus  the  test 
laid  down  for  validity  of  a  contract  in  restraint  of 
trade  was  its  reasonableness,  and  a  contract  was  to  be 
deemed  reasonable  or  unreasonable  according  as  it  was 
restricted  or  unrestricted  in  space.  The  principle  was 
followed  in  the  case  of  Homer  v.  Graves.1  In  that 
case  the  defendant  who  was  a  moderately  skilful  dentist 
agreed  that  he  would  abstain  from  practising  within 
a  district  200  miles  in  diameter  in  consideration  of 
receiving  instruction  and  a  salary  from  the  plaintiff, 
the  engagement  being  terminable  at  three  months' 
notice.  In  delivering  judgment  Tindal,  C.J.,  said  : 
'  The  greater  question  rs  whether  this  is  a  reasonable  The  test  of 
restraint  of  trade.  And  we  do  not  see  how  a  better  reasonableness, 
test  can  be  applied  to  the  question,  whether  reasonable 
or  not,  than  by  considering  whether  the  restraint  is 
such  only  as  to  afford  a  fair  protection  to  the  interests 
of  the  party  in  favour  of  whom  it  is  given,  and  not  so 
large  as  to  interfere  with  the  interests  of  the  public. 
Whatever  restraint  is  larger  than  the  necessary  pro- 
tection of  the  party  can  be  of  no  benefit  to  either ;  it 
can  only  be  oppressive ;  and,  if  oppressive,  it  is  in  the 
eye  of  law  unreasonable.  Whatever  is  injurious  to 
the  interests  of  the  public  is  void,  on  the  grounds  of 
public  policy." 

In  the  case  of  Hitchcock  v.   Co  her  '2  the  plaintiff    Hitchcock  v. 

Coker. 

1   7  Bing,  735,  743;  s.c.  131  Eng.  Rep.  284. 
'2  6  A.  and  E.  438  ;  s.c.  112  Eng.  Rep.  167. 


34$ 

was  a  druggist  and  took  the  defendant  into  his  ser- 
vice as  an  assistant  at  an  annual  salary  and  the  defend- 
ant agreed  not  at  any  time  to  engage  in  the   busi- 
ness of  chemist  and  druggist,  or  either  of  them  in  the 
town  of  Taunton,  or  within  three  miles  thereof,  and, 
further,  that  if  he  did  so  he  would  pay  the  plaintiff 
£500   as  liquidated   damages.     Upon  breach  of  this 
agreement  by  the  defendant  the  plaintiff  brought  an 
action.     The  Court  of  King's  Bench,  upon  the  author- 
ity   of   Horner   v.    Graves,1    decided    that   the  agree- 
ment was  void,  because  it  was  unlimited  as  to  time  ; 
but  on  appeal  to  the  judges  in  Exchequer  Chamber 
the  decision  was  reversed.     Tindal,  C.J.,  in  delivering 
judgment  said  :   "  The  ground  upon  which  the  court 
below  has  held  this  restraint  of  the  defendant  to  be 
unreasonable  is  that  it  operates  more  largely  than  the 
benefit   or   protection   of   the    plaintiff   can   possibly 
require ;  that  it  is  indefinite  in  point  of  time,  being 
neither  limited  to  the  plaintiff's  continuing  to  carry 
on  business  at  Taunton,  nor  even  to  the  term  of  his 
life.     We  agree  in  the  general  principle  adopted  by  the 
court,  that,  where  the  restraint  of  a  party  from  carry- 
ing on  a  trade  is  larger  and  wider  than  the  protection 
of  the  party  with  whom  the  contract  is  made  can 
possibly  require,  such  restraint  must  be  considered  as 
unreasonable  in  law,  and  the  contract  which  would 
enforce  it  must  be,  therefore,  void.     But  the  difficulty 
we  feel  is  in  the  application  of  that  principle  to  the 
case  before  us.     Where  the  question  turns  upon  the 
reasonableness  or  unreasonableness  of  the  restriction 
of  the  party  from  carrying  on  trade  or  business  within 
a  certain  space  or  district,  the   answer  may  depend 
upon  various  circumstances  that  may  be  brought  to 
bear  upon  it,  such  as  the  nature  of  the  trade  or  pro- 
fession, the  populousness  of  the   neighbourhood,  the 
mode  in  which  the  trade  or  profession  is  usually  carried 
on;  with  the  knowledge  of  which  and  other  circum- 
stances, a  judgment  may  be  formed  whether  the  restric- 
tion is  wider  than   the  protection   of  the    party  can 
reasonably    require."2     The    decision  in  this    case  is 
important  for  another  reason  :     It  lays  down  that  the 

1  7  Bing,  735,  734.     vSee  also   in  this  connection   Wallis  v.  Day  2  M.   and 
W,273. 

*  6  A.  and  E.  438  at  p.  454. 


349 

question  as  to  adequacy  of  consideration  is  immaterial, 
that  is  to  say,  the  court  in  such  a  case  would  not  go 
into  the  question  as  to  whether  the  consideration  was 
equal   in   value    to   the   restraint    agreed    to   by   the 
defendant.     The  case  of  Hitchcock  v.  Coker  was  followed 
in  India  in  1868  (i.e.  before  the  passing  of  the  Indian 
Contract  Act)  in  D.  W.  Auchterlonie  v.  Charles  Bill  and 
another.1     It  was  laid  down  therein  that  in  the  case  of 
a  covenant  in  restraint  of  trade,  the  deed  of  covenant 
must  show  a  good  consideration,   though  the  courts 
will  not  enter  into  the  question  of  the  adequacy  of  the 
consideration ;  and  that  a  stipulation  not  to  carry  on 
the  business  of  carriers  on  the  road  between  two  places 
was  not  void  as  being  in  restraint  of  trade.     It  was 
observed  that  the  stipulation  in  question  amounted 
simply  to  a  contract  by  the  vendors  of  the  property 
and  goodwill  of  the  business,  that  they  will  not  carry 
on  the  business  of  carriers  at  the  same  place  and  was 
the  means  by  which  a  saleable  value  was  given  to  the 
goodwill  of  the  business.     So  partial  a  restraint  is  not 
really  adverse  to  the  interests  of  the  public  at  large. 
The  giving  validity  to  such  contracts  'offers',  to  use 
the  words  of  Parke  B.  in  Mallan  v.  May'1,  "an  en- 
couragement to  trade  by  allowing  a  party  to  dispose 
of  all  the  fruits  of  his  industry"  and  similar  contracts 
have   been    upheld. *     The  effect  may    be  as  in    this 
instance  to  deprive  a  portion  of  the  public  of  a  present 
temporary  gain  resulting  from  the  covenantors'  com- 
petition, but  contracts  of  the  kind  by  giving  a  real 
marketable  value  to  the  goodwill  of  an   established 
business  operate  as  an  additional  inducement  to  indivi- 
duals to  comply  their  skill  and  capital  in  trade,  and 
thus   tend  to  the    advantage   of   the   general    public 
interest,    provided  of   course  that  the   limits  of  the 
restraint  are  not  in  excess  of  what  is  reasonable  to 
secure  the  enjoyment  of  the  goodwill  sold. 

One  important  point  that  emerges  from  the  cases 
which  were  decided  during  the  period  under  discussion 
is  as  to  whether  the  duration  of  the  restraint  is  material 
to  the  question  of  validity  or  otherwise  of  the  restraint. 
In  Ward  v.  Byrne  *  a  town  traveller  and  collecting 

l  4M.H.C.R.  77.  2  ii  M.  and  W..  666. 

*  See  Leighton  v.  Wales  3  M.  and  W.  545. 
+  5  M.  and  W.  548     s.c.  151  Bng.  Rep.  232. 


350 

clerk  in  the  service  of  a  coal  merchant  had  given  a 
bond  not  to  solicit  or  sell  to  any  customers  of  his 
employer  within  two  years  of  leaving  service,  and  not 
to  follow  or  be  employed  in  the  business  of  a  coal 
merchant  for  nine  months  after  leaving.  It  was  held 
that  such  an  agreement  was  in  general  restraint  of 
trade.  Parke,  B.,  observed  :  " Now  a  restraint  prohibit- 
ing a  party  from  carrying  on  trade  within  certain 
limits  of  space  would  be  good,  and  a  contract  entered 
into  for  the  purpose  of  enforcing  such  an  agreement  as 
that  would  be  valid  ;  and  the  limit  of  the  space  is  that 
which  according  to  the  trade  he  carries  on  is  necessary 
for  the  protection  of  the  party  with  whom  the  con- 
tract is  made  ;  and  all  the  cases  cited  appeared  to  turn 
on  the  question  as  to  the  limit  of  space  within  which 
the  restriction  should  extend.  Now,  where  a  limit  as 
to  space  is  imposed,  the  public,  on  the  one  hand,  do 
not  lose  altogether  the  services  of  the  party  in  the 
particular  trade — he  will  carry  it  on  in  the  same  way 
elsewhere — nor  within  the  limited  space  will  they  be 
deprived  of  the  benefit  of  the  trade  being  carried  on, 
because  the  party  with  whom  the  contract  is  made 
will  most  probably  within  those  limits  exercise  it 
himself.  But  when  a  general  restriction,  limited  only 
as  to  time,  is  imposed,  the  public  are  altogether  losers, 
for  that  time,  of  the  services  of  the  individual,  and  do 
not  derive  any  benefit  whatever  in  return."  L,ord 
Abinger,  however,  in  the  same  case  did  not  give  his 
decision  on  the  basis  of  space  or  time  limit  as  affecting 
validity  but  put  it  on  the  ground  that  the  restriction 
was  wider  than  would  be  necessary  for  securing  the 
plaintiffs  rights.  "If  in  the  present  case,"  he  said 
"  the  plaintiff  had  been  contented  to  take  from  the 
defendant  an  obligation  which  could  not  extend  further 
than  the  injury  to  himself  would  extend  by  the  viola- 
tion of  it,  that  might  be  reasonable."  In  Bunn  v. 
Guy  '2  an  attorney  covenanted  that  he  would  not 
at  any  time  after  the  appointed  date  practise  as  an 
attorney,  solicitor  or  conveyancer,  within  the  City  of 
London  or  a  hundred  and  fifty  miles  from  thence. 
Here  it  will  be  observed  the  restraint  was  unlimited 


Ibid.,  at  p.  561-562. 

4  Bast  190;    s.c.  102  Eng.  Rep.  803. 


35* 

as   to   time,  though  limited  as  to  space.     It  was  held 
that  the  contract  was  good  and  binding. 

In  Davis  v.  Mason l  the  contract  was  not  to  practise 
as  a  surgeon  for  fourteen  years  within  ten  miles  of  the 
place  where  the  employer  lived  in  consideration  of  his 
taking  the  employer  as  an  assistant  in  his  business  as  a 
surgeon.  It  was  held  that  the  restriction  was  not  un- 
reasonable. In  Hastings  v.  Whitley'2  one  Watson  a  sur- 
geon and  apothecary  took  the  defendant  as  his  assistant 
who  executed  a  bond  not  to  carry  on  the  business  of  a 
surgeon  and  apothecary  after  the  termination  of  the 
engagement  within  ten  miles  of  Stourport  without  Wat- 
son's  consent.  One  of  the  points  urged  on  behalf  of 
the  defendant  was  that  the  bond  was  illegal  and  void 
if  it  should  be  construed  to  extend  to  the  defendant's 
practising  his  profession  after  Watson's  death.  The 
court  held  that  the  bond  was  valid  and  that  the 
period  of  restraint  continued  up  to  the  death  of  Whitley. 
In  Whittaker  v.  Howe 3  an  agreement  by  a  solicitor  for 
valuable  consideration  not  to  practise  as  a  solicitor  in 
any  part  of  Great  Britain  for  twenty  years  without  the 
consent  of  the  plaintiff  to  whom  he  sold  his  business 
was  held  to  be  valid/  There  the  restraint  was  not  un- 
limited, but  it  might  obviously  have  lasted  for  years 
after  the  plaintiff's  death.5 

1  5  T.R.  118;    s.c.  101  Eng.  Rep.  69. 

*  (1848)  2  Exch.  611. 

3  3  Beav.  383;  s  c.  49  Eng.  Rep.  r;o.  This  case  was  referred  to  with 
approval  by  Lord  Macnaghten  in  Nordenfelt's  case  (1894)  A.C.  at  573. 

•*  A  similar  agreement  was  upheld  in  the  case  of  an  English  Barrister 
practising  at  Shanghai.  Noel  Charles  Minchin  Home  v.  John  Charles  Edward 
Douglas  17  C.W.N.  215  P. C. 

&  The  following  is  an  interesting  collection  of  cases  in  which  restrictive 
stipulations  have  been  held  valid  : — not  to  practise  for  fourteen  years  within 
10  miles  of  a  given  place  :  at  any  time  within  seven  miles  ;  at  a  given  place 
or  within  twelve  miles  thereof,  without  the  covenantee's  consent  during  his 
lifetime,  or  within  10  years  after  his  decease.  One  about  to  remove  from 
a  village  agreed,  in  consideration  of  $500  to  sell  defendant  his  practice,  and  to 
recommend  him  to  his  patrons  and  to  use  his  influence  in  his  favour,  reserving 
the  right  to  practise  in  the  village  when  called  on  to  do  so.  It  was  held  that 
he  could  recover  the  $500  from  the  defendant.  A  contract  •'  not  to  locate, 
with  a  view  of  resuming  his  profession,  within  a  circle  of  thirty  miles  around 
T. ,"  was  upheld.  The  same  conclusion  was  reached  with  respect  to  a  sale, 
01  a  house  and  practice,  with  a  condition  "  not  to  establish,  nor  attempt  to 
establish,  a  medical  practice  within  the  aforesaid  township  of  Chili,  nor 
within  six  miles  of  "  the  house;  so  a  similar  sale  with  a  condition  not  to 
practise  in  the  town  or  within  fifteen  miles  thereof  "  by  himself,  agent,  or 
otherwise,"  was  held  not  so  far  restrictive  as  to  contravene  public  policy. 
A  sale  of  land  and  a  practice,  with  a  stipulation  not  to  resettle  in  M.  so 
long  as  the  plaintiff  should  be  located  there,  allows  the  vendor  to  practise, 
but  not  to  reside  there. 

A  guarantee  by  the  vendor  "  that  no  other  physician,  for  the  space  of 


352 

In  the  case  Tallis  v.  Tallis  l  the  defendant  inter 
alia  covenanted  "  not  directly  nor  indirectly  to  be 
concerned  in  the  canvassing  trade  in  London,  or  within 
a  hundred  and  fifty  miles  of  the  General  Post  Office, 
nor  in  Dublin  nor  Edinburgh  or  within  fifty  miles  of 
either,  not  in  any  town  in  Great  Britain  or  Ireland 
in  which  the  plaintiff  or  his  successors  might  at  the 
time  have  an  establishment  or  might  have  had  one 
within  the  six  months  preceding."  It  was  held  that 
the  restraint  was  good  as  it  was  not  unreasonable. 
The  case  is  of  special  importance  because  it  lays 
down  for  the  first  time  that  there  is  no  presump- 
tion against  the  valdity  of  a  covenant  in  restraint 
of  trade. 

cioth  Co.  The  case  of  Leather  Cloth  Co.  v.  Lorsont 2  which 

came  on  in  the  year  1869  stands  out  prominent  for 
two  reasons.  First,  it  is  a  case  on  a  somewhat 
different  plane,  the  contract  in  question  being  one  for 
the  sale  of  a  trade  secret.  Secondly,  it  represents  a 
determined  attempt  to  get  out  of  the  rigid  rule  sought 
to  be  laid  down  in  the  previous  decisions  on  the  subject 
of  general  restraint  of  trade  as  affecting  validity  of  a 
contract.  The  vendors  of  an  American  process  of 
manufacture  to  a  company  covenanted  that  they 
"  will  not  directly  or  indirectly  carry  on,  nor  will  they, 
to  the  best  of  their  power,  allow  to  be  carried  on  by 
others,  in  any  part  of  Europe,  any  company  or  manu- 
factory having  for  its  object  the  manufacture  or  sale 
of  productions  now  manufactured  in  the  business  or 
manufactory"  (of  the  vendors)  "  and  will  not  com- 
municate to  any  person  or  persons  the  means,  or 
processes  of  such  manufacture,  so  as  in  any  way  to 
interfere  with  the  exclusive  enjoyment  by  the  purchas- 
ing company  of  the  benefit  hereby  agreed  to  be  pur- 
chased." James,  V.C.,  said  :  "  No  doubt  the  covenant 
is  expressed  in  very  large  and  full  terms,  and  it  is 
insisted  that  the  mere  fact  that  the  covenant  is  ( not 

four  years,  will  establish  himself  in  this  place,  as  a  competitor  unless  the 
increased  population  of  the  place  should  warrant  it"  or  unless  through  the 
purchaser's  fault,  and  agreeing  in  the  former  event,  to  refund  the  purchase 
money,  is  valid  ;  and  a  contract  not  to  practise  medicine  nor  in  any  manner  do 
business  as  a  physician  in  the  county  of  Oswego  at  any  time  after  May  ist, 
1851,  was  sustained.  The  same  principles  govern  restrictive  contracts  between 
dentists  : — Spelling's  '  Trusts  and  Monopolies,'  p.  19. 

1  i  E.  and  B.  391  ;  S.C.  118  Eng.  Rep.  482. 

2  L.R.G  Eq.  345- 


353 

to  carry  on  or  allow  to  be  carried  on  in  any  part  of 
Europe '  is  in  itself  what  is  called  a  general  restraint 
of  trade,  and  that  what  is  called  a  general  restraint 
of  trade  is  a  restraint  of  trade  throughout  the  United 
Kingdom,  and  that  in  that  form  a  restraint  of  trade 
extending  throughout  the  United  Kingdom  is  upon 
the  face  of  it  bad,  though  something  short  of  it  may 
be  allowable,  provided  the  circumstances  justify  it. 
I  do  not  read  the  cases  as  having  laid  down  that 
unrebuttable  presumption  *  *  *  *  All  the  cases, 
when  they  come  to  be  examined,  seem  to  establish 
this  principle,  that  all  restraints  upon  trade  are  bad 
as  being  in  violation  of  public  policy  unless  they 
are  natural,  and  not  unreasonable  for  the  protection 
of  the  parties  in  dealing  legally  with  some  subject- 
matter  of  contract.  ...  I  am  satisfied  that  those 
words  '  so  as  in  any  way  to  interfere  with  the  exclusive 
enjoyment  of  the  company'  do  properly,  and  suffi- 
ciently modify  and  qualify  it;  the  principle  being 
that  you  are  not  to  have  any  more  restraint  than 
is  necessary  for  the  benefit  of  the  purchasers.  The 
company  say,  we  do  not  ask  for  any  unreasonable 
or  capricious  restraint  upon  you,  we  only  ask  you  to 
bind  yourself  not  to  do  something  which  will  interfere 
with  that  which  you  profess  to  sell  to  us,  and  for 
which  you  have  received  a  consideration.  I  am  of 
opinion,  therefore,  that  the  covenant  is  one  capable 
of  being  enforced  in  this  court." 

The  case  of  Allsopp  v.  W  heater  oft '  represents  the 
opposite    tendency,  viz.    to    adhere    to  the  already  Wheatcy°ft 
recognised  rule  as  to  limitation  of  space  being   neces-  Rule  as  to  Hmita- 
sary  in  order  that  a  contract  in  restraint  of  trade  may  tion  of  3Pace* 
be  valid.     The  fact  that  it  does  betray  that  tendency 
will  appear  very  clearly  from  the  following  observa- 
tions of  Wickens,  V.C.,  "The  question,"  says  he,  "  in 
this  case  is  purely  legal,  viz.  as  to  the  validity  of  the 
covenant   in   restraint  of   trade.     There   has   been  a 
natural    inclination    of    the   courts   to   bring    within 
reasonable  limits  the  doctrine  as  to  these   covenants 
laid    down  in  the  earlier  cases,  but  it  has  generally 
been  considered  in  the  later  as  well  as  in  the  earlier 
cases  that  a  covenant  not  to  carry  on  a  lawful  trade, 


i   L.R.  15  Eq.  59- 

45 


354 

unlimited  as  to  space,  is  on  the  face  of  it  void.  This 
seems  to  have  been  treated  as  clear  law  in  Ward  v. 
Byrne  [  and  in  Hinde  v.  Greyf  and  in  other  cases  ; 
and  the  rule  if  not  obviously  just,  is  at  any  rate, 
simple  and  very  convenient.  No  doubt,  in  the  case 
of  the  Leather  Cloth  Co.  v.  Lorsont,  Lord  Justice  (then 
Vice -Chancellor)  James  threw  some  doubt  on  the 
existence  of  a  hard  and  fast  rule  which  makes  a 
covenant  in  restraint  of  trade  invalid  if  unlimited  in 
area ;  but  there  were  expressions  in  the  instrument  in 
that  case  limiting  the  generality  of  the  covenant, 
and  it  was  in  substance  a  case  of  a  different  class 
from  this,  since  the  restriction  against  trading  was 
only  a  consequence  of  a  clearly  lawful  restriction 
against  divulging  a  trade  secret.  In  this  point  of 
view  it  may  probably  be  thought  to  bear  some 
analogy  to  Wallis  v.  DayJ>J 

"  Assenting,  as  I  do,  to  everything  that  was  said 
in  Leather  Cloth  Co.  v.  Lorsont,  I  can  hardly  treat  it  as 
authorising  me  to  depart  from  the  recognised  rule  as 
to  limitation  of  space  in  a  case  so  different  from  it  as 
the  present  is,  and  unless  that  rule  be  departed  from 
the  covenant  here  is  clearly  bad." 

But  the  Vice-Chancellor,  after  discussing  the  trend 
of  previous  cases,  proceeded  to  consider  the  facts  of 
the  case  before  him  and  observed  that  -even  if  no  rule 
existed,  the  conclusion  in  this  case  wrould  be  the 
same — because  the  covenant  in  question  therein  was 
such  as  could  not  be  reasonably  required  for  the 
plaintiff's  protection.  He,  therefore,  held  that  in- 
dependently of  any  absolute  rule  the  covenant  in 
question  was  inoperative. 

Then  followed  the  case  of  Rousillon  v.  Rousillon  * 
smd  we  fin(j  gjr  Edward  Fry  breaking  away  com- 
pletely from  the  old  position,  and  declaring  that  the 
'absolute  restraint'  so-called  is  void  only  in  so  far 
as  it  is  unreasonable,  thus  coming  to  an  altogether 
new  test  or  standard  for  ascertaining  the  validity  of 
contracts  in  restraints  of  trade.  The  plaintiffs  were 
champagne  merchants  at  Epernay  in  France ;  they 


1  See  supra. 

*  i  Man  and  G.  195  ;  s.c.  133  Eng.  Rep.  302. 
3  2  M.  and  W.  273  ;  s.c.   150  Eng.  Rep.  759. 

*  14  Ch.  D.  351. 


355 

had  also  an  office  in  London.  They  were  not  the 
proprietors  of  any  vineyard  but  they  bought  grapes, 
manufactured  and  bottled  the  wine  and  exported 
the  same  to  England  and  other  countries.  The  defend- 
ant was  employed  by  them  originally  as  a  clerk  and 
afterwards  as  a  travelling  agent  and  he  covenanted 
not  to  represent  any  othei  champagne  house  for  two 
years  after  leaving  the  plaintiffs  and  also  not  to 
establish  himself  nor  associate  himself  with  other 
persons  or  houses  in  the  champagne  trade  for  ten 
years  in  case  he  should  leave  the  plaintiffs.  Later  on 
the  defendant  left  the  plaintiffs  and  started  in  business 
as  a  retail  wine-merchant  in  London,  selling  champagne 
and  other  wines.  The  plaintiff  had  meanwhile  given 
up  their  retail  trade.  They  instituted  an  action 
against  him  in  France  on  his  covenant  and  obtained  a 
judgment  and  then  sued  him  in  England  on  the  foreign 
judgment,  claiming  an  injunction  to  restrain  the  defend- 
ant from  carrying  on  the  business  of  a  champagne 
merchant  for  ten  years  as  agreed  and  for  other  reliefs. 
Fry,  J.,  following  Leather  Cloth  Co.  v.  Lorsont  and 
differing  from  the  principle  laid  down  in  Allsopp  v. 
Wheatcroft,  said  that  there  was  no  such  thing  as  an 
absolute  rule  that  a  covenant  in  restraint  of  trade  is 
void  because  there  is  no  limit  as  to  space.  The  decision 
is  an  important  one  and  I  will,  therefore,  give  here 
the  gist  of  it  in  Fry,  JYs,  own  words :  (( But  then  it  is 
said  that  over  and  above  the  rule  that  the  contract 
shall  be  reasonable,  there  exists  another  rule,  viz.  that 
the  contract  shall  be  limited  as  to  space  and  that  this 
contract  being  in  its  terms  unlimited  as  to  space  and, 
therefore,  extending  to  the  whole  of  England  and 
Wales  must  be  void.  Now  in  the  first  place  let  me 
consider  whether  such  a  rule  would  be  reasonable. 
There  are  many  trades  which  are  carried  on  all  over 
the  kingdom  which  by  their  very  nature  are  extensive 
and  widely  diffused.  There  are  others  which  from 
their  nature  and  necessities  are  local.  If  this  rule 
existed  it  would  afford  a  complete  protection  to 
the  latter  class  of  trade,  whilst  it  would  prohibit 
complete  protection  of  the  former  class,  and  an  injury 
which  ought  not  to  be  wrought  without  good  reason 
would  arise.  In  the  next  place,  the  rule  if  it  existed 
would  apply  in  two  classes  of  cases.  It  would  apply 


356 

where  the  want  of  a  limitation  of  space  was  unreason- 
able, and  also  where  it  was  reasonable.  Now,  in  the 
former  class  of  cases,  those  in  which  the  universality 
was  unreasonable,  the  rule  would  operate  nothing, 
because  the  ground  is  already  covered  by  the  rule  th  at 
the  restraint  must  be  reasonable.  It  would,  therefore, 
only  operate  in  cases  in  which  the  universality  of  the 
prohibition  was  reasonable ;  that  is  it  would  only 
operate  where  it  ought  not.  For  the  existence  of  such 
a  rule  I  should  require  clear  authority.  In  the  next 
place,  the  rule  is  pressed  upon  me  as  an  artificial  rule, 
an  absolute  rule,  or,  as,  it  was  called  by  the  late  Vice- 
Charicellor  Wickens  a  fhard  and  fast'  rule.  Such  a 
rule  might  always  be  evaded  by  a  single  exception. 
No  exception  can  be  said  to  be  colourable  to  a  rule  of 
this  description,  because  you  can  only  judge  whether 
an  exception  be  colourable  or  not  by  the  principle  of 
the  rule,  and  if  the  rule  be  really  an  artificial  one, 
without  principle,  there  is  no  criterion  for  saying 
whether  the  evasion  is  colourable  or  not.  It  appears 
to  me  for  these  reasons  that  I  ought  not  to  hold  such 
a  rule  to  exist  unless  it  be  clearly  established."  He 
then  reviewed  and  criticised  previous  decisions  on  the 
question,  and  proceeded  as  follows:  "I  have,  there- 
fore, upon  the  authorities,  to  choose  between  two  sets 
of  cases,  those  which  recognise  and  those  which  refuse 
to  recognize  this  supposed  rule  ;  and,  for  the  reasons 
which  I  have  already  mentioned,  I  have  no  hesitation 
in  saying  that  I  adhere  to  those  authorities  which 
refuse  to  recognize  this  rule,  and  I  consider  that  the 
case  in  which  an  unlimited  prohibition  has  been  spoken 
of  as  void,  relate  only  to  circumstances  in  which  such 
a  prohibition  has  been  unreasonable."  In  the  case  of 
Mills  v.  Dunham  [  there  was  an  agreement  that  the 
defendant  after  the  termination  of  his  engagement 
with  the  plaintiff  should  not  either  on  his  own  account 
or  for  any  employer  "call  upon  or  directly  or  in- 
directly solicit  orders  from,  or  in  any  way  deal  or  tran- 
sact business  with ' '  any  one  who  had  been  a  customer 
of  the  plaintiffs.  The  contract  was  held  good  and 
binding.  The  words  (( transact  business  with"  was 
construed  to  mean  business  of  the  same  or  a  similar 

(1891.)  i  Ch.  D.  576. 


357 

kind  to  thai  which  had  been  carried  on  by  the  plaintiffs. 
Such  a  contract  was  held  to  be  valid  and  reasonable 
though  there  was  no  limitation  as  to  time  or  distance. 

We  come  now  to  the  epoch-making  case  of  Norden-  Nordenf^t 
felt  v.  Maxim  Nordenfelt  Guns  and  Ammunition  Com- 
pany.1  The  defendant  who  was  interested  in  several 
businesses,  including  the  business  of  a  manufacturer 
of  guns  and  ammunition,  in  1886  sold  the  latter 
business  for  a  large  sum  to  a  limited  company,  whose 
business  was,  in  1888,  taken  over  with  the  concurrence 
of  the  defendant  by  the  plaintiffs,  another  limited 
company  incorporated  partly  for  that  purpose ;  and 
the  plaintiff  company  and  the  defendant  entered  into 
an  agreement  whereby  the  defendant  was  to  act  as 
their  managing  director  at  a  fixed  salary,  the  defendant 
(who  was  then  forty-six  }^ears  of  age)  covenanting 
that  he  would  not  "during  the  term  of  twenty-five 
years  from  the  date  of  the  incorporation  of  the  com- 
pany, if  the  company  shall  so  long  continue  to  carry 
on  business,  engage  except  on  behalf  of  the  company 
either  directly  or  indirectly  in  the  trade  or  business 
of  a  manufacturer  of  guns,  gun  mountings  or  carriages, 
gunpowder,  explosive  or  ammunition  or  in  any  business 
competing,  or  liable  to  compete,  in  any  \vay  with  that 
for  the  time  being  carried  on  by  the  company"; 
but  other  businesses  in  which  the  defendant  was 
interested  were  excepted  from  the  restriction.  Under 
that  agreement  the  defendant  acted  as  the  plaintiff 
company's  managing  director  until  1890  when  he  ceased 
to  be  so ;  and  he  afterwards  joined  a  rival  gun  and 
ammunition  company.  The  plaintiff  company  there- 
upon brought  an  action  against  the  defendant  to  enforce 
his  covenant  by  injunction.  The  defendant  pleaded 
that  the  restrictive  clause  was  void  and  inoperative. 
Romer,  J.,  held  that  the  clause  was  unreasonable  and 
void  and  decided  the  case  in  favour  of  the  defendant. 
The  Court  of  Appeal — consisting  of  Lindley,  Smith  and 
Bowen,  ly.JJ. — held  that  the  covenant,  as  restricted  to 
the  gun  and  ammunition  business,  though  unlimited 
as  to  space,  and  practically  covering  the  remainder  of 
the  defendant's  life,  was,  under  the  circumstances, 
reasonable.  lyindley,  L.J.,  while  observing  that  the 

1   (1894)  A.C.  535. 


358 

principle  on  which  the  old  division  of  restraints  into 
general  and  partial  depended  ought  not  to  be  lost  sight 
of,  referred  to  a  large  number  of  decisions,  which  on 
ultimate  analysis  would  appear  to  be  based  on  the  two 
underlying  principles,  viz.  (i)  the  restraint  must  not 
be  greater  than  the  protection  of  the  covenantee 
requires  and  (2)  the  covenant  taken  in  connection  with 
the  business  to  which  it  refers  must  not  be  injurious 
to  the  public  interests.1 

The  case  went  up  in  appeal  to  the  House  of  Lords 
and  was  argued  for  three  days.  A  considered  judg- 
ment was  given  and  the  appeal  of  the  defendant  was 
dismissed.  In  the  several  judgments  delivered  by  the 
Law  Lords  the  whole  history  of  the  doctrine  of  inva- 
lidity of  restraints  upon  trade  was  reviewed  and  the 
cases  discussed  threadbare.  It  is  impossible  to  give  an 
adequate  idea  of  the  learning  erudition  and  independ- 
ence shown  in  the  judgments  without  making  long 
extracts  from  them,  but  I  cannot  help  giving  a  few 
extracts  in  view  of  the  gravity  of  the  case.  In  con- 
clusion the  House  laid  down  two  simple  principles, 
governing  all  contracts  in  restraint  of  trade,  namely, 
first,  the  sole  test  of  the  validity  of  such  a  contract  is 
its  reasonableness  in  the  interest  of  the  covenantee, 
and,  secondly,  the  covenant  must  not  otherwise  offend 
against  public  policy  Lord  Macnaghten  observed  : 
l(  Restraints  of  trade  and  interference  with  individual 
liberty  of  action  may  be  justified  by  the  special  circum- 
stances of  a  particular  case.  It  is  a  sufficient  justifi- 
cation, if  the  restriction  is  reasonable — reasonable,  that 
is,  in  reference  to  the  interests  of  the  parties  concerned 
and  reasonable  in  reference  to  the  interests  of  the 
public,  so  framed  and  so  guarded  as  to  afford  adequate 
protection  to  the  party  in  whose  favour  it  is  imposed, 
while  at  the  same  time  it  is  in  no  w^ay  injurious  to 
the  public."* 


i  (1893)  i  Ch.  at  pp.  648-649. 

'2  Followed  in  Sir  W.  C.  Leng  &  Co.,Ld.  v.  Andrews  (1904)  i  Ch.  763. 
The  remarks  of  Farwell,  L.J.  (at  p.  773),  in  this  connection  are  instructive. 
With  reference  to  the  passage  quoted  his  lordship  observed  :  "  The  argument 
which  has  been  addressed  to  us  on  behalf  of  the  respondents  does  not  mean 
that  an  employer  can  prevent  his  employe  from  using  the  skill  and  know- 
ledge in  his  trade  or  profession  which  he  has  learnt  in  the  course  of  his  em- 
ployment by  means  of  directions  or  instructions  from  the  employer.  That 
information  and  that  additional  skill  he  is  entitled  to  use  for  the  benefit 
the  public  who  gain  the  advantage  of  his  having  had  such  admirable  insti 


359 

In  regard  to  the  difference  of  opinion  between 
Vice-Chancellor  James  and  Sir  Edward  Fry  Lord 
Herschell's  observations  must  be  regarded  as  finally 
settling  the  controversy.  He  says  :  "  There  have  been 
differing  expressions  of  opinion  on  the  subject  by 
distinguished  equity  judges  in  more  recent  times.  I 
will  only  allude  to  two  of  these,  in  which  the  exis- 
tence of  the  rule  I  have  been  considering  has  been 
questioned.  In  the  case  of  the  Leather  Cloth  Co.  v. 
Lorsont^  James,  V.C.,  said  :  '  I  do  not  read  the  cases 
as  having  laid  down  that  unrebuttablc  presumption 
which  was  insisted  upon  with  so  much  power  by  Mr. 
Cohen.  All  the  cases  when  they  come  to  be  exa- 
mined, seem  to  establish  the  principle,  that  all  res- 
traints upon  trade,  are  bad,  as  being  in  violation  of 
public  policy,  unless  they  are  natural,  and  not  un- 
reasonable for  the  protection  of  the  parties  in  deal- 
ing legally  with  some  subject-matter  of  contract/ 
And  again  in  Rousillon  v.  Ro^ts^llon)  Fry,  J.,  thus 
expressed  himself  :  '  I  have  therefore  upon  the 
authorities  to  choose  between  two  sets  of  cases,  those 
which  recognise  and  those  which  refuse  to  recognise 
this  supposed  rule,  and,  for  the  reasons  which  I  have 
mentioned,  I  have  no  hesitation  in  saying  that  I  adhere 
to  those  authorities  which  refuse  to  recognise  this  rule 
and  I  consider  that  the  cases  in  which  an  unlimited 
prohibition  has  been  spoken  of  as  void  relate  only  to 
circumstances  in  which  such  a  prohibition  has  been 
unreasonable.'  I  do  not  intend  to  throw  doubt  on 
what  was  decided  in  these  cases  for  reasons  which 
will  appear  hereafter,  but  I  respectfully  differ  from 
the  view  which  appears  to  be  indicated  that  there 
was  not  at  any  time  a  rule  of  the  common  law 
distinguishing  particular  from  general  restraints,  and 
treating  the  former  only  as  exceptions  from  the 
general  principle  that  contracts  in  restraint  of  trade 
are  invalid."  l 

Then  the  Lord  Chancellor  proceeds  to  discuss  the 
changed  conditions  of  trade  and  commerce  and  to  indi- 


tiOii.     The  case  in  which  the  court  interferes  for  the  purpose  of  protection  is 
where  use  is  made,  not  of  the  skill  which  the  man  may  have  acquired,  but 
of  the  secrets  of  the  trade  or  profession  which  he  had  no  right  to  reveal  to 
any  one  else  — matters  which  depend  to  some  extent  on  good  faith." 
'  (1894)  A,C.  at  p,  546. 


360 

cate  upon  what  view,  properly  speaking,  the  distinction 
between  general  and  particular  restraints,  which  there- 
tofore prevailed,  must  be  abrogated  in  order  to  bring 
the  law  into  consonance  with  the  needs  of  the  times  : 
"  The  discussion  on  which  I  have  been  engaged  is,  it 
must  be  admitted,  somewhat  academic.  For,  in  con- 
sidering the  application  of  the  rule  and  the  limita- 
tions, if  any,  to  be  placed  on  it,  I  think  that  regard 
must  be  had  to  the  changed  conditions  of  commerce 
and  of  the  means  of  communication  which  have  been 
developed  in  recent  years.  To  disregard  these  would 
be  to  miss  the  substance  of  the  rule  in  a  blind  adher- 
ence to  its  letter.  Newcastle-upon-Tyne  is  for  all 
practical  purposes  as  near  to  London  to-day  as  towns 
which  are  now  regarded  as  suburbs  of  the  metropolis 
were  a  century  ago.  An  order  can  be  sent  to  Newcastle 
more  quickly  than  it  could  then  have  been  transmitted 
from  one  end  of  London  to  the  other,  and  goods  can 
be  conveyed  between  the  two  cities  in  a  few  hours  and 
at  a  comparatively  small  cost.  Competition  has  as- 
sumed altogether  different  proportions  in  these  altered 
circumstances  ;  and  that  which  would  have  been  once 
merely  a  burden  on  the  covenantor  may  now  be 
essential  if  there  is  to  be  reasonable  protection  to  the 
coven antee.  When  Lord  Macclesfield  emphasised  the 
distinction  between  a  general  restraint  not  to  exercise 
a  trade  throughout  the  kingdom  and  one  which  was 
limited  to  a  particular  place,  the  reason  which  he  gave 
for  the  distinction  was  that  'the  former  of  these  must 
be  void,  being  of  no  benefit  to  either  party,  and  only 
oppressive,  as  shall  be  shown  by  and  by.'  He  returns 
to  the  subject  later  on,  when  giving  the  reasons  why 
all  voluntary  restraints  are  regarded  with  disfavour 
by  the  law,  in  these  terms :  (  Thirdly,  because  in  a 
great  many  instances  they  can  be  of  no  use  to  the 
obligee,  which  holds  in  all  cases  of  general  restraint 
throughout  England,  for  what  does  it  signify  to  a 
tradesman  in  London  what  another  does  at  Newcastle  ? 
And,  surely,  it  would  be  unreasonable  to  fix  a  certain 
loss  on  one  side  without  any  benefit  to  the  other. 
The  Roman  law  would  not  enforce  such  contracts 
by  an  action.  ( See  Puffendorf  lib,  5,  c,  2,  ss.  3,  21, 
H.  720.) '  There  are  other  passages  in  the  judgment 
where  this  view  is  enforced. 


36i 

"  There  is  no  doubt  that  with  regard  to  some  pro- 
fessions and  commercial  occupations,  it  is  as  true  to-day 
as  it  was  formerly  that  it  is  hardly  conceivable  that 
it  should  be  necessary,  in  order  to  secure  reasonable 
protection  to  a  covenantee,  that  the  covenantor 
should  preclude  himself  from  carrying  on  such  profes- 
sion or  occupation  anywhere  in  England.  But  it  can- 
not be  doubted  that  in  other  cases  the  altered  circum- 
stances to  which  I  have  alluded  have  rendered  it  es- 
sential, if  the  requisite  protection  is  to  be  obtained, 
that  the  same  territorial  limitations  should  not  be 
insisted  upon  which  would  in  former  clays  have  been 
only  reasonable.  I  think  then  that  the  same  reasons 
which  led  to  the  adoption  of  the  rule  require  that  it 
should  be  frankly  recognised  that  it  cannot  be  rigidly 
adhered  to  in  all  cases.  My  lords,  it  appears  to  me 
that  a  study  of  Lord  Macclesfield's  judgment  will 
show  that,  if  the  conditions  which  prevail  at  the  pre- 
sent day  had  existed  in  his  time,  he  would  not  have 
laid  down  a  hard  and  fast  distinction  between  general 
and  particular  restraints,  for  the  reasons  by  which  he 
justified  that  distinction  would  have  been  unfounded 
in  point  of  fact.  Whether  the  cases  in  which  a  general 
covenant  can  now  be  supported  are  to  be  regarded 
as  exceptions  from  the  rule  which,  I  think,  was  long 
recognised  as  established,  or  whether  the  rule  is  itself 
to  be  treated  as  inapplicable  to  the  altered  condi- 
tions which  now  prevail,  is  probably  a  matter  of 
word  rather  than  of  substance.  The  latter  is  perhaps 
the  sounder  view.  When  once  it  is  admitted  that, 
whether  the  covenant  be  general  or  particular  the 
question  of  its  validity  is  alike  determined  by  the 
consideration  whether  it  exceeds  what  is  necessary  for 
the  protection  of  the  covenantee,  the  distinction  be- 
tween general  and  particular  restraints  ceases  to  be  a 
distinction  in  point  of  law." 

Thus  Nor  den  felt's  case  finally  does  away  with  Effect  oi  the 
the  distinction  between  general  and  particular  res- 
traints  on  the  ground  that  under  the  changed  condi- 
tions of  commerce  and  extended  means  of  communica- 
tion of  the  present  day  it  has  ceased  to  furnish  a 
satisfactory  test  of  the  validity  of  restrictive  covenants. 
The  only  test  which  now  prevails  is  that  of  reason- 
ableness of  the  covenant  with  reference  to  the  parti- 

46 


362 

cular  case.  The  reasonableness  or  otherwise  of  the 
covenant  must  be  determined  with  reference  to  the 
character  of  the  business  and  other  surrounding  circum- 
stances. Different  kinds  of  business  require  different 
degrees  of  protection  Thus  different  considerations 
must  apply  to  trade  secrets,  apprenticeships  and 
sales  of  goodwill,  and  more  or  less  latitude  in  each 
of  these  particular  cases  may  be  justifiable  on  grounds 
of  fair  and  reasonable  protection  to  the  parties  con- 
cerned. '  The  test  of  reasonableness  being  the  sole 
guide  it  follows  that  the  distinction,  formerly  drawn 
between  space  limit  and  time  limit,  vanishes.  Whether 
the  restriction  be  as  to  space  or  as  to  time,  it  may 
be  too  wide  having  regard  to  all  the  circumstances  of 
the  case  for  protecting  the  interests  of  the  parties  con- 
cerned and,  therefore,  unreasonable  and  void. 

Later  cases.  The    law    laid    dow^n    in     Nor  den-felt's    case    was 

Mason  v.  followed  in  M ason's  case.*    Mason  was  engaged  as  a  can- 

Provident  Clothing  Vasser  by  the  plaintiff  company,  carrying  on.  the  busi- 
ness of  a  general  clothing  and  supplying  company 
having  branches  all  over  England  on  the  check  and  cre- 
dit system  "  at  London  in  the  county  of  Middlesex 
(amongst  other  places)/'  By  the  contract  of  employ- 
ment the  defendant  Mason  agreed  that  he  would  not 
within  three  years  after  the  termination  of  the  employ- 
ment be  in  the  employ  of  any  person,  firm  or  company 
carrying  on  or  engaged  in  a  business  the  same  as  or 
similar  to  that  of  the  plaintiff  company  or  assist  any 
person  employed  or  assisting  in  any  such  business 
"  within  twenty-five  miles  of  London  aforesaid  where 
the  company  carry  on  business."  The  House  of  Lords 
decided  that  the  restriction  was  wider  than  was 
reasonably  necessary  for  the  plaintiffs'  protection. 
The  luminous  observations  of  Lord  Shaw  afford  a 
striking  commentary  on  the  principles  underlying 
Nordenfelt's  case  and  other  leading  case?.  He  observes  : 
"  The  restriction  lasts  for  three  years  and,  as  will  be 
seen,  is  not  confined  to  the  appellant  canvassing  the 
customers  of  the  old  firm  or  in  his  old  district.  But 
he  cannot,  throughout  any  part  of  this  great  and 
densely  populated  area,  take  any  engagement  as  a 

1  Per  Lord  Macnaghten  at  p.  566. 

2  Mason  v.  Provident  Clothing  and  Supply  Company,  Limited  (1913)  A.C 
724  at  p.  737  et  seq. 


363 

canvasser  with  their  trade  rivals,  nor  can  he  be 
employed  by  them  in  any  other  capacity  whatsoever. 
He  may  not  be  a  manager,  a  book-keeper,  a  clerk,  a 
messenger,  a  typist,  a  care-taker.  The  restriction, 
even  granted  the  limit  in  time  and  in  area  as  already 
stated  is  of  a  comprehensive  and  most  extensive 
character.  The  question  is  whether  this  restriction  is 
enforceable  in  a  court  of  law.  *  *  *  *  It  is 
necessary,  my  Lords,  to  look,  in  the  first  place,  at  the 
nature  of  the  contract  itself.  As  to  that,  the  diver- 
sities may  be  wide  and  the  view  of  the  law  may  be 
different  as  to  the  upholding  or  the  scope  of  a  covenant 
in  restraint  of  personal  or  industrial  freedom.  If  the 
contract,  for  instance,  be  for  the  sale  of  a  business  to 
another  for  full  consideration  or  price,  there  may  be 
elements  going  in  the  strongest  degree  to  shew  that 
such  a  contract — in  so  far  as  it  restrains  the  vendor 
from  becoming  the  rival  of  a  business  whose  goodwill 
he  has  sold  and  which  he  has  bargained  he  shall  not 
oppose — there  may  be  elements  shewing  that  such  a 
contract  is  enforceable,  and,  indeed  that  a  declinature 
by  the  law  to  enforce  it  would  amount  to  a  denial  of 
justice.  *  *  *  *  In  my  opinion  there  is  much 
greater  room  for  allowing,  as  between  buyer  and 
seller,  a  larger  scope  for  freedom  of  contract  and  a 
correspondingly  large  restraint  in  freedom  of  trade, 
than  there  is  for  allowing  a  restraint  of  the  oppor- 
tunity for  labour  in  contract  between  master  and  ser- 
vant or  an  employer  and  an  applicant  for  work.  *  *  l 
*  *  My  Lords,  the  law  can  achieve  a  reconciliation 
and  adjustment  of  these  two  elementary  liberties — the 
right  to  bargain  and  the  right  to  work.  And  it  has 
in  fact  achieved  this  in  such  a  manner  that  the  public 
interest  has  been  in  both  cases  conserved.  *  *  * 
'  For  the  rule  evolved  after  much  discussion  may 
now  be  considered  settled.  The  language  of  Tindal, 
C.J.,  in  Hitchcock  v.  Coker*  can  now  no  longer  be 
questioned  as  being  the  law,  that  'where  the  restraint 
of  a  party  from  carrying  on  a  trade  is  larger  and  wider 
than  the  protection  of  the  party  with  whom  the  con- 
tract is  made  can  possibly  require,  such  restraint  must 
be  considered  as  unreasonable  in  law,  and  the  contract 

J    Hid  p.  738-739.  2  (1837)  6  Ad.  and  E.  438  at  p.  454. 


364 

which  would  enforce  it  must  be  therefore  void.'  This 
was  adopted  by  Parke,  B.  in  Ward  v.  Byrne  '  and  is 
expressly  founded  upon  by  Lord  Macnaghten  in  his 
analysis  of  the  case  law  in  NordenfeltJ1  I  cannot 
refrain  from  again  quoting  Lord  Macnaghten' s  words: 
'  The  true  view  at  the  present  time,  I  think>  is  this : 
The  public  have  an  interest  in  every  person  carrying 
on  his  trade  freely  :  so  has  the  individual.  All  inter- 
ference with  individual  liberty  of  action  in  trading, 
and  all  restraints  of  trade  of  themselves,  if  there  is 
nothing  more,  are  contrary  to  public  policy,  and 
therefore  void.  That  is  the  general  rule.  But  there 
are  exceptions :  restraints  of  trade  and  interference 
with  individual  liberty  of  action  may  be  justified  by 
the  special  circumstances  of  a  particular  case.  It  is 
a  sufficient  justification,  and  indeed  it  is  the  only 
justification,  if  the  restriction  is  reasonable — reasona- 
ble, that  is,  in  reference  to  the  interests  of  the  parties 
concerned  and  reasonable  in  reference  to  the  interests 
of  the  public,  so  framed  and  so  guarded  as  to  afford 
adequate  protection  to  the  party  in  whose  favour  it  is 
imposed,  while  at  the  same  time  it  is  in  no  way 
injurious  to  the  public.' 

"I  have  referred,  my  Lords,  to  the  apparent  anta- 
gonism between  the  right  to  bargain  and  the  right  to 
work.  The  extreme  of  the  one  destroys  the  other. 
But  the  public  interest  reconciles  these  two,  and 
removes  all  antagonism  by  the  establishment  of  a 
principle  and  a  limit  of  general  application.  It  may 
be  that  bargains  have  been  entered  into  with  the  eyes 
open,  which  restrict  the  field  of  liberty  and  of  labour, 
and  the  law  answers  the  public  interest  by  refusing  to 
enforce  such  bargains  in  every  case  where  the  right  to 
contract  has  been  used  so  as  to  afford  more  than  a 
reasonable  protection  to  the  covenantee.  In  every 
case  in  which  it  exceeds  that  protection,  the  public 
interest,  which  is  always  upon  the  side  of  liberty, 
including  the  liberty  to  exercise  one's  powers  or  to 
earn  a  livelihood,  stands  invaded,  and  can  accordingly 
be  invoked  to  justify  the  non-enforcement  of  the 
restraint." 


1   5  M.  and  W.  548  *  (1894)  A.C.  at  p.  565. 


365 

In  a  subsequent  case/  the  statement  of  the  law  Herbert  Morris  v. 
as  laid  down  by  Lord  Macnaghten  was  affirmed  and 
Mason's  case  was  followed.  Herbert  Morris  Limited 
were  the  leading  manufacturers  of  hoisting  machinery 
in  the  United  Kingdom,  and  the  defendant  Saxelby 
had  been  in  the  company's  employment  as  draughts- 
man and  otherwise  from  the  time  he  left  school.  After 
several  years'  service  the  defendant  was  engaged  by 
the  company  as  engineer  for  two  years  certain  and, 
thereafter,  subject  to  four  months'  notice  on  either 
side,  upon  the  terms  of  an  agreement  which  contained 
a  covenant  by  the  defendant  with  the  company  that 
he  would  not  during  a  period  of  seven  years  from  his 
ceasing  to  be  employed  by  the  company,  either  in  the 
United  Kingdom  of  Great  Britain  or  Ireland,  carry 
on  either  as  principal,  agent,  servant,  or  otherwise, 
alone  or  jointly  or  in  connection  with  any  other  person, 
firm,  or  company,  or  be  concerned,  or  assist,  directly 
or  indirectly,  whether  for  reward  or  otherwise,  in  the 
sale  or  manufacture  of  pulley  blocks,  hand  overhead 
runways,  electric  overhead  runways,  or  hand  overhead 
travelling  cranes.  The  House  of  Lords  came  to  the 
decision  that  the  covenant  was  wider  than  was  re- 
quired for  the  protection  of  the  plaintiff  company  and 
was  not  enforceable.'2  Lord  Shaw  observed:  " Trade 
secrets,  the  names  of  customers,  all  such  things  which 
in  sound  philosophical  language  are  denominated 
objective  knowledge — these  may  not  be  given  away  by 
a  servant;  they  are  his  master's  property,  and  there  is 
no  rule  of  public  interest  which  prevents  a  transfer  of 
them  against  the  master's  will  being  restrained.  On 
the  other  hand  a  man's  aptitudes,  his  skill,  his 

1  Herbert  Morris  Ltd.  v.  Saxelby  (1916)  i  A.C.  688. 

2  In  the  case  of  a  pathologist  a  life-long  restraint  not  to  engage  in  similar 
work  was  held  to  be  unenforceable.     Eastes  v.  Russ  I/.R.  (1914)  i  Ch.  468. 
In  the  case  of  a  meat  importer  an  agreement  which  precluded  him  from 
carrying  on  his  natural  business  in  any  part  whatever  of  the  United  Kingdom 
even  for  one  year  was  held  to  be  void  as  being  in  undue  restraint  of  trade 
S.    F.  Nevanas  <&•  Co.  v.   Walker  and   Foreman  L.R.  (1914)   i  Ch.  413.     In 
Konski  v.  Peet  L.R.  (1915)  i  Ch.  530  an  agreement  not  to  solicit  customers 
was  held  not  to  be  confined   to  persons  who   were  customers   during  the 
employment,  but  extended  to  all  persons  who  were  customers  at  the  date  of 
the  agreement  or  at  any  time  after  date  ;  and  was  void  being  wider  than  was 
reasonable.     As  to  how  far  a  society  is  entitled  to  restrain  the  freedom  of 
its  members,  by  its  rules,  see  Osborne  v.   Amalgamated  Society  of  Railway 
Servants  (1911)  i  Ch.  540;  Joseph  Evans  6-  Co.  Ltd.  v.  Heathcote  and  others 
(1918)  i  K  B.  418;  McEUistvim  v.  Ballynacelligott  Co-operative  Agricultural 
and  Dairy  Society  Ltd.  (1919)  A.C.  548. 


366 

dexterity,  his  manual  and  mental  ability — all  these 
things  which  in  sound  philosophical  language  are  not 
objective  but  subjective — they  may  and  they  ought 
riot  to  be  relinquished  by  a  servant ;  they  are  not  his 
master's  property,  they  are  his  own  property;  they 
are  himself.  There  is  no  public  interest  which  compels 
the  rendering  of  those  things  dormant  or  sterile  or 
unavailing;  on  the  contrary,  the  right  to  use  and  to 
expand  his  powers  is  advantageous  to  every  citizen, 
and  may  be  highly  so  for  the  country  at  large." 

It  will  be  seen  from  the  above  that  the  two  afore- 
said cases  have  gone  a  great  way  to  minimize  the 
difficulties  in  respect  of  the  conflict  between  the 
sanctity  of  contract  and  the  right  to  work.  The  ex- 
position of  the  law  found  therein  formed  the  basis  of 
the  decision  in  the  novel  and  interesting  case  of 
Hepworth  Manufg.  Hepworth  Manufacturing  Co.,  Ltd.  v.  Ryott .'  The 
Co.  v,  Ryott.  plaintiff  company  who  were  producers  of  kinemato- 
graph  films,  employed  the  defendant  Ryott  as  a  film 
actor.  His  contract  of  employment  required  him  to 
act  under  a  pseudonym,  which  should  be  the  sole 
property  of  the  plaintiffs.  On  the  determination  of 
the  contract  he  was  precluded  from  using  the  pseu- 
donym for  any  purpose  whatever  and  from  film-acting 
for  new  employers  unless  and  until  they  agreed  not  to 
announce  or  advertise  his  performance  under  the 
pseudonym.  The  defendant  adopted  the  pseudonym 
of  '  Stewart  Rome  '  and  owing  partly  to  his  own  ability 
and  partly  .to  the  plaintiff's  advertisements  the  defend- 
ant acquired  a  considerable  reputation  so  much  so 
that  in  a  newspaper  competition  as  to  who  were  the 
most  popular  kinematograph  actors  in  this  country, 
he  obtained  on  a  large  poll  the  second  place,  being 
beaten  only  by  the  redoubtable  Charlie  Chaplin. 
The  defendant  joined  a  rival  producing  company 
known  as  Broadwest  Films  Ld.  and  acted  as  and  was 
advertised  as  Stewart  Rome.  The  plaintiffs  suit  for 
an  injunction  was  dismissed  on  the  ground  that  the 
contract  was  in  restraint  of  trade  and  not  reasonably 
required  for  the  protection  of  the  employers. 

This  doctrine  of  reasonable  protection  to  the  em- 
ployers has  led  the  courts  to  consider  the  question  of 

(1920)  I  Ch    D.  i. 


367 

severability  of  a  covenant.  If  a  covenant  is  too  wide,  Severabiiity  of  a 
i.e.  wider  than  is  reasonably  necessary  for  the  pro- 
tection of  the  party  concerned,  will  the  courts  refuse 
to  enforce  it  altogether  or  wilt  treat  it  as  severable 
and  enforce  such  parts  of  it  as  are  reasonably  neces- 
sary for  the  protection  of  the  party  concerned  ?  The 
answer  given  is  that  such  contracts  are  severable. 
The  case  of  Goldsoll  v.  Goldman,1  is  an  illustration  of  Goidsoii  v.  Goldman 
this  proposition  of  law.  The  plaintiff  and  the  defend- 
ant were  dealers  in  imitation  jewellery.  To  avoid 
competition  the  defendant  Goldman  sold  his  business 
to  the  plaintiff  and  covenanted  that  he  would  not  for 
the  period  of  two  years  "  either  solely  or  jointly  with 
an  agent  or  employee  or  any  other  person  or  persons 
or  company  directly  or  indirectly  carry  on  or  be  en- 
gaged, concerned  or  interested  in  or  render  services 
(gratuitously  or  otherwise)  to  the  business  of  a  vendor 
of  or  dealer  in  real  or  imitation  jewellery  in  the  County 
of  London  or  any  part  of  the  United  Kingdom  of  Great 
Britain  and  Ireland  and  the  Isle  of  Man  or  in  France, 
the  United  States,  Russia  or  Spain,  or  within  twenty- 
five  miles  of  Potsdamerstrasse,  Berlin,  or  St.  Stephans 
Kirche,  Vienna."  In  an  action  for  an  injunction 
against  the  defendant  for  having  committed  breaches 
of  covenant,  it  was  held  that  the  covenant  not  to 
carry  on  business  in  the  United  Kingdom  or  the  Isle 
of  Man,  and  the  covenant  not  to  deal  in  imitation 
jewellery,  were  severable  from  the  rest,  and  these  por- 
tions of  the  entire  covenant  could  be  enforced  being 
not  wider  than  was  reasonably  necessary  for  the 
plaintiff's  protection. 

Turning  now  to  the  Indian  law  on  the  subject  of  The  law  in  India. 
restraints  upon  trade  we  find  that  the  policy  adopted 
is  one  of  retrogression.  11;  will  have  appeared  from 
the  above  discussion  that  in  England  the  tendency  of 
decisions  has  been  gradually  but  steadily  to  widen 
the  narrow  view  of  the  common  law  as  to  restraints. 
The  effect  of  section  27  of  the  Indian  Contract  Act  is 
to  narrow  it  down  further.  This  is  due  to  the  fact 
that  sec.  27  unfortunately  follows  the  New  York  Draft 
Code  which  Pollock  calls  the  ( evil  genius  of  the 
Indian  Contract  Act.'  The  New  York  draftsmen 


(1915)  Iv.R.  i  Ch.  292. 


368 

were  of  opinion  that  "  contracts  in  restraint  of  trade 
had  been  allowed  by  modern  decisions  to  a  very 
—based  on  the  dangerous  extent."1  Section  833  of  the  New  York 
Draft  Code  represented  this  alarmistic  view.  Indeed 
the  whole  trend  of  American  law  on  the  subject  of 
monopolies,  as  well  as  restraints,  has  been  determined 
by  an.  extreme  dread  of  any  restriction  on  the  right  of 
individual  action.  The  cry  of  freedom  raised  with 
the  Declaration  of  Independence  rang  in  all  depart- 
ments of  life  and  activity  in  America  and  the  view 
that  restraints  in  any  shape  or  form  must  be  done 
away  with  became  supreme  for  the  moment.  To  this 
awakened  consciousness  and  love  of  freedom  all  con- 
siderations were  subordinated  and  even  judges  waxed 
eloquent  and  spoke  with  more  emotion  than  wisdom, 
when  questions  of  restraint  were  under  discussion. 
Take  for  instance  the  following  observations  of  Mr. 
Justice  Field,  which  forcibly  expresses  the  typical 
American  view.  ((  As  in  our  intercourse  with  our 
fellow  men  certain  principles  of  morality  are  assumed 
to  exist  without  which  society  would  be  impossible 
so  certain  inherent  rights  lie  at  the  foundation  of  all 
action,  and  upon  a  recognition  of  them  alone  can  free 
institutions  be  maintained.  These  inherent  rights 
have  never  been  more  happily  expressed  than  in  the 
Declaration  of  Independence,  that  new  evangel  of 
liberty  to  the  people :  '  We  hold  these  truths  to  be 
self-evident ' — that  is,  so  plain  that  their  truth  is  re- 
cognised upon  their  mere  statement — •'  that  all  men 
are  endowed  '--not  by  edicts  of  Emperors  or  decrees 
of  Parliament  or  acts  of  Congress,  but — fby  their 
Creator,  with  certain  inalienable  rights ' — that  is, 
rights  which  cannot  be  bartered  away  or  given  away, 
or  taken  away,  except  in  punishment  of  crime — (  and 
that  among  these  are  life,  liberty  and  the  pursuit  of 
happiness  and  to  secure  these  ' — not  grant  them,  but 
secure  them — 'governments  are  instituted  among 
men,  deriving  their  just  powers  from  the  consent  of 
the  governed.'  Among  these  inalienable  rights  as 
proclaimed  in  that  great  document  is  the  right  of 
•men  to  pursue  their  happiness  by  which  is  meant  the 
right  to  pursue  any  lawful  business  or  vocation  in 

1  See  Pollock  and  Miulla's  Indian  Contract  Act,  3rd  Edition  p.  167. 


369 

any  manner  not  inconsistent  with  the  equal  rights  of 
others,  which  may  increase  their  prosperity  or  develop 
their  faculties,  so  as  to  give  to  them  their  highest 
enjoyment.  The  common  business  and  callings  of 
life,  the  ordinary  trades  and  pursuits,  which  are 
innocuous  in  themselves,  and  have  been  followed  in 
all  communities  from  time  immemorial  must,  there- 
fore, be  free  in  this  country  to  all  alike  upon  the 
same  conditions.  The  right  to  pursue  them  without 
let  or  hindrance  except  that  which  is  applied  to  all 
persons  of  the  same  age,  sex  and  condition,  is  a 
distinguishing  privilege  of  citizens  of  the  United 
States,  and  an  essential  element  of  that  freedom 
which  they  claim  as  their  birth  right  ....  In  this 
country  it  has  seldom  been  held,  and  never  in  so 
odious  a  form  as  is  here  claimed,  that  an  entire  trade 
and  business  could  be  taken  from  citizens  and  vested 
in  a  single  corporation.  Such  legislation  has  been 
everywhere  else  as  inconsistent  with  civil  liberty, 
that  exists  only  where  every  individual  has  the 
power  to  pursue  his  own  happiness  according  to  his 
own  views,  unrestrained,  except  by  equal,  just  and 
impartial  laws." 

Such  being  the  view  of  freedom,  the  New  York 
Code  would  obviously  represent  a  proportionately 
stringent  view  towards  contracts  in  restraint  of  trade. 
Singularly  enough,  the  Indian  law  copies  its  provi- 
sions, although  the  conditions  of  trade  and  industry 
in  this  country  are  vastly  different  from  those  obtain- 
ing in  America.  Section  27 l  runs  as  follows  : — • 

Every  agreement  by  which  any  one  is  restrained  Sec.  27,  Indian 
from  exercising  a  lawful  profession,  trade  or  business  Contract  Act- 
of  any  kind  is  to  that  extent  void. 

Exception  i.  One  who  sells  the  goodwill  of  a 
business  may  agree  with  the  buyer  to  refrain  from 
carrying  on  a  similar  business,  within  specified  local 
limits,  so  long  as  the  buyer,  or  any  person  deriving 
title  to  the  goodwill  from  him,  carries  on  a  like 
business  therein :  Provided  that  such  limits  appear 
to  the  court  reasonable,  regard  being  had  to  the 
nature  of  the  business. 


i  The  first  paragraph  is  taken  almost  word  for  word,   and  the  first  and 
second  exceptions  with  slight  variations,  from  the  New  York  Draft  Code. 

47 


370 

Exception  2.  Partners  may,  upon  or  in  anti- 
cipation of  a  dissolution  of  the  partnership,  agree  that 
some  or  all  of  them  will  not  carry  on  a  business 
similar  to  that  of  the  partnership,  within  such  local 
limits  as  are  referred  to  in  the  last  preceding  excep- 
tion. 

Exception  3.  Partners  may  agree  that  some 
one  or  all  of  them  will  not  carry  on  any  business, 
other  than  that  of  the  partnership,  during  the  contin- 
uance of  the  partnership.1 

11          ^ne  °^         earlier  cases  under  the  section  was  that 
traints.  of  Oakes  &  Co.  v.  ] '  ackson  and  another.1     There   two 

persons  had  entered  into  an  agreement  that  on  the 
expiry  of  five  years,  the  period  of  their  service  under 
the  agreement,  or  sooner  determination  of  the  service, 
they  would  not  carry  on  within  800  miles  of  Madras 
any  business  carried  on  by  the  plaintiff's  firm,  and 
they  also  covenanted  that  on  such  expiry,  or  sooner 
determination,  they  would,  whenever  requested  by 
the  firm  so  to  do,  return  to  England.  Eventually  they 
refused  to  return  to  England  and  proceeded  to  set  up 
and  carry  on  on  their  own  account,  business  of  the 
same  kind  as  that  carried  on  by  the  plaintiff's  firm. 
It  was  urged  for  the  plaintiff  company  that  it  was  of 
the  greatest  importance  to  the  interests  of  the 
mercantile  community  in  India  and,  in  fact,  to  the 
whole  community  that  such  a  contract  should  be 
upheld.  On  the  decision  whether  such  contracts 
would  be  valid  or  not  depended  the  question  as  to 
whether  employers  of  labour  in  India  would  be.  able 
to  bring  out  skilled  artificers  from  England.  It  was 
argued  that  if  an  artificer  brought  out  at  the 
expense  of  his  employers,  could  not  be  tied  down  by 
an  agreement  such  as  that  the  employer  would  be 
exposed  to  a  practical  robbery  of  his  customers  by 
the  employee  whom  he  had  brought  out.  It  was 
held  by  Kindersley,  J.,  that  the  covenant  was  void 
under  Sec.  27  of  the  Indian  Contract  Act.  "  I  am  by 
no  means  satisfied,"  he  observed,  "  that  the  omission 
to  except  such  a  case  as  this  from  the  operation  of 
the  general  rule  was  unintentional.  Trade  in  India 
is  in  its  infancy ;  and  the  legislature  may  have  wished 

1  I.L.R.  i  Mad.  p.  134. 


to  make  the  smallest  number  of  exceptions  to  the 
rule  against  contracts  whereby  trade  may  be  res- 
trained." 

The  scope  of  the  section  has,  however,  been 
somewhat  restricted  by  various  decisions.  Thus  it 
has  been  held  that  the  fact  that  the  scheme  of  an 
agreement  would  limit  competition  and  keep  up 
prices  does  not  bring  it  within  the  terms  of  section 
27.  To  succeed  in  the  defence  under  the  section,  one 
must  establish  that  the  suit  is  one  to  enforce  an 
agreement  whereby  some  one  is  restrained  from  ex- 
ercising a  lawful  profession,  trade  or  business  of  any 
kind.1  A  stipulation  in  a  contract  prohibiting  any 
sales  of  goods  of  a  certain  description  to  any  others 
during  a  particular  period,  is  not  in  restraint  of  trade 
within  the  meaning  of  the  section.2  When,  again, 
one  having  a  licence  for  the  manufacture  of  salt  en- 
tered into  a  contract  with  a  firm  of  merchants  to  the 
effect  that  he  should  not  manufacture  salt  in  excess 
of  the  quantity  which  the  firm,  at  the  commence- 
ment of  each  manufacturing  season,  should  require 
him  to  manufacture,  and  that  all  salt  manufactured 
by  him  should  be  sold  to  the  firm  for  a  fixed  price  ; 
it  was  held  that  the  second  clause  was  not  void 
under  section  27  and  that  it  was  separable  from  the 
first.'  Mr.  Justice  Handley  observed  :  "  In  one  sense 
every  agreement  for  sale  of  goods  whether  in  esse  or 
in  posse  is  a  contract  in  restraint  of  trade,  for,  if  A  .B. 
agreed  to  sell  goods  to  C.D.,  he  precludes  himself 
from  selling  them  to  anybody  else.  But  a  reason- 
able construction  must  be  put  upon  the  section  and 
not  one  which  would  render  void  the  most  common 
form  of  mercantile  contract.  I  understand  the  sec- 
tion to  aim  at  contracts  by  which  a  person  precludes 
himself  altogether  either  for  a  limited  time  or  over  a 
limited  area  from  exercising  his  profession,  trade  or 
business,  not  contracts  by  which  in  the  exercise  of 
his  profession,  trade  or  business,  he  enters  into 
ordinary  agreements  with  persons  dealing  with  him 

1  Fraser  6-  Co.  v.  Bombay  Ice  M  ami  fa  during  Co.  7  Born.  L  R.  107  ; 
I.L.R.  29  Bom.  107. 

*  Carlisle  Nephews  6-  Co.  v.  Ricknauth  fiucktearmull  I.L  R.  8.  Cal. 
809.  See  also  Tan  Khwan  Hong  v.  HJaung  Kcgaw  18  I.C.  183. 

3  Mackenzie  and  others  v.  Strirmiah  I.L.R.  13  Mad.  472.  See  also  I.L.R. 
15.  Mad.  79. 


372 

which  are  really  necessary  for  the  carrying  on  of  his 
business.  I  think  I  am  supported  in  this  decision  by 
the  Calcutta  cases  of  Carlisles  Nephews  &  Co.  v. 
Ricknauth  Bucktearmull ;  Prem  So  ok  v.  Dhurum  Chand, 
and  by  the  principles  which  govern  the  English 
decisions  upon  the  subject." 

The  agreement  must  be  in  restraint  of  some 
trade  or  business.  A  landlord  who  in  return  for 
market  tolls  or  fees,  allows  a  cattle  market  to  be  con- 
ducted on  his  land  does  not  thereby  exercise  the  trade 
or  business  of  selling  cattle.  Therefore,  an  agreement 
between  the  owners  of  two  neighbouring  lands  to  the 
effect  that  a  market  for  sale  of  cattle  shall  not  be 
held  on  the  same  day  on  the  lands  of  both  of  them  is 
not  void  under  s.  27  of  the  Contract  Act  ar.d  can  be 
enforced.1  It  has  also  been  held  that  an  agreement 
between  a  merchant  and  a  broker  to  sell  all  his  goods 
through  the  latter  is  not  in  restraint  of  trade.2  A  con- 
tract under  which  goods  were  purchased  at  a  certain 
rate  for  the  Cuttack  market,  containing  a  stipulation 
that  if  the  goods  were  sent  to  Madras  a  higher  rate 
should  be  paid  for  them  was  held  to  be  one  not  in 
restraint  of  trade.3  An  interesting  case*  came  up 
as  early  as  the  year  1874  before  Sir  Richard  Couch, 
C.  J.  and  Pontifix,  J.,  on  a  reference  by  the  First  Judge 
of  the  Court  of  Small  Causes,  Calcutta,  for  the  opin- 
ion of  the  High  Court.  The  plaintiff  was  a  brazier  and 
had  established  a  shop  in  the  part  of  Calcutta  named 
in  his  cause  of  action.  The  body  of  braziers  carrying 
on  business  in  the  same  locality  held  a  public  meet- 
ing at  which  it  was  resolved,  among  other  things,  that 
none  of  their  body  would  employ  more  than  four 
underworkmen,  and  that  then  the  trade  would  return 
to  its  former  prosperity.  The  plaintiff  then  inter- 
posed and  said  he  could  not  conform  to  this  resolu- 
tion, as  his  business  was  so  organized  that  it  required 
from  sixteen  to  twenty  underworkmen  to  carry  it 
on  profitably  ;  but  he  was  willing  to  remove  his  shop 

1  Poihi  Ram  v.  Musst.  Islam  Fatema  I.I/.R.  37  All.    212;  27  I.C.   871; 
13  A  LJ.,  281. 

*  E.  G.  Buskin  v.  Ramkisszn  Seal,  23  W.R.  146 

3  Prem   Sook  and  another  v.    Dhurum  Chand  and  another  I.L.R.  17  Cal. 
320. 

*  Madhub  Chandra    Poramanik.   v.    Raj  Kumar    Dass  22  W.R.  370.    i: 
B.I,.R.  76. 


373 

elsewhere,  if  his  already  expended  advances  were  re- 
couped to  him.  There  was  a  general  shout  '  We  will 
pay  your  advances ;  those  who  take  on  your  work- 
men will  pay/  The  plaintiff  objected  saying  that  he 
did  not  wish  to  have  a  hundred  guarantors  to  look  to, 
but  if  any  four  or  five  would  undertake  to  pay  him 
the  advances  which  he  had  already  given  to  his  men, 
he  would  remove.  The  defendants  undertook  accord- 
ingly, and  the  plaintiff  sued  them  on  this  undertak- 
ing, which  was  verbal.  The  sum  advanced  to  the 
workmen  was  proved  to  be  Rs.  900.  It  was  contend- 
ed by  the  counsel  for  the  defendants  that  this  agree- 
ment was  void  under  section  27  of  Act  IX  of  1872, 
being  (  an  agreement  by  which  the  plaintiff  was  res- 
trained from  exercising  a  lawful  profession,  trade  or 
business '  and  not  coming  under  any  of  the  three  ex- 
ceptions following  that  section. 

The  Judge  of  the  Court  of  Small  Causes  had  held 
that  the  defendant's  agreement  did  not  come  within 
section  27  of  Act  IX  of  1872,  in  as  much  as  there  was 
nothing  in  it  restraining  the  plaintiff  from  setting  up 
the  same  trade  in  some  other  locality,  or  even  in  the 
very  next  house  to  that  which  he  then  occupied  for  it. 
It  was  a  mere  engagement  on  his  part  to  remove  his 
business  out  of  that  house  and  perhaps  it  might  be 
construed  to  have  been  the  intention  of  the  parties 
that  he  should  remove  it  from  that  locality,  but  not 
an  engagement  restraining  him  from  exercising  that 
business  altogether.  He  thought  also  that  if  the  en- 
gagement did  come  within  the  meaning  of  section  27 
it  would  only  be  void  to  that  extent — viz.  to  the  ex- 
tent it  restrained  one  of  the  parties  from  exercis- 
ing his  trade;  but  that  it  would  still  operate 
to  make  the  consideration  money  payable  to  him. 
Couch,  C.J.,  held  that  "the  words  'restrained  from 
exercising  a  lawful  profession,  trade  or  business  '  do 
not  mean  an  absolute  restriction,  and  are  intended  to 
apply  to  a  partial  restriction,  a  restriction  limited  to 
some  particular  place.  Otherwise,  the  first  exception 
would  have  been  unnecessary.  *  *  *  *  Section  27 
was  intended  to  prevent  not  merely  a  total  restraint 
from  carrying  on  trade  or  business,  but  a  partial  one. 
We  have  nothing  to  do  with  the  policy  of  such  a  law. 
All  we  have  to  do  is  to  take  the  words  of  the  Contract 


374 

Act  and  put  upon  them  meaning  which  they  appear 
plainly  to  bear.  In  my  opinion,  they  must  be  held 
to  apply  to  such  a  case  as  the  present,  and  the  agree- 
ment on  the  part  of  the  plaintiff  not  to  carry  on  his 
business  in  that  locality  is  to  that  extent  void.  *  * 
*  *  If  the  agreement  on  the  part  of  the  plaintiff  is 
void,  there  is  no  consideration  for  the  agreement  on  the 
part  of  ihe  defendants  to  pay  the  money,  and  the 
whole  contract  must  be  treated  as  one  which  cannot 
be  enforced.  Therefore  *  *  *  *  the  agreement 
is  a  void  contract  and  the  plaintiff  has  no  right  to  re- 
cover the  money  which  he  has  claimed."  l  The  case 
was  followed  in  the  case  of  Brahampiitra  Tea  Co.,  Ltd. 
v.  E.  Scarth  in  which,  it  was  held  that  a  contract 
under  which  a  person  is  partially  restrained  from 
competing,  after  the  term  of  his  engagement  is  over, 
with  his  former  employer,  is  bad  under  sec.  27  of  the 
Indian  Contract  Act.  Such  contracts,  said  the  judges, 
are  well  known  in  English  law  and  the  omission  to 
make  them  an  exception  to  the  general  prohibition 
contained  in  section  27  clearly  indicates  that  it  was 
not  intended  to  give  them  legal  effect  in  this  country.* 
Madhab  Chandra  Pavamanik's  case  was  followed 
in  another  case  in  the  year  1892. 3  In  that  case 
the  plaintiff  was  a  ghat  serang  who  along  with  an- 
cther  ghat  serang  entered  into  a  contract  with  six 
dubashes  who  carried  on  business  at  Chittagong  for 
the  purpose  of  carrying  on  their  respective  business 
in  unanimity  and  not  injuring  one  another's  trade. 
The  contract  which  was  to  last  for  three  years  pro- 
vided inter  alia  that  the  ghat  serangs  were  to  act 
only  as  such  and  do  no  service  to  the  ships  in  any 
other  capacity,  that  the  dubashes  were  to  give  the 
plaintiff  five  vessels,  secured  by  them,  every  year  for 
him  to  act  as  ghat  serang  to  ;  and  that  the  plaintiff 
was  only  to  act  as  ghat  serang  to  the  said  five  ships, 
and  with  the  exception  of  ships  for  which  he.  had  pre- 
viously, acted  as  ghat  serang,  he  should  not  act  as 
ghat  serang  or  do  any  other  services  for  ships  belong- 
ing to  any  one  else.  The  contract  contained  provi- 
sions as  to  the  apportionment  of  the  five  ships  so  to 


1  22.  W  R.  at  t>.  375.  2  I.L    ii  Cal    545  at  p    550. 

3  Nttr  Ali  Dubash  v.  Abdul  AH  I.L.R.  19  Cal,  765  at  p.  775. 


375 

be  given  to  the  plaintiff  amongst  the  various  dubashes, 
and  also  a  provision  for  the  payment  of  Rs.  1,000  as 
damages  by  any  one  breaking  the  contract  to  the 
person  who  should  suffer  by  the  breach.  In  a  suit  on 
the  contract  by  the  plaintiff  it  was  contended  that 
the  contract  was  void  under  sec.  27  as  being  in  res- 
traint of  trade.  It  was  held  that  there  was  a  partial 
restraint  in  the  agreement  in  question,  that  sec.  27 
does  away  with  the  distinction  observed  in  the  Eng- 
lish cases  between  partial  and  total  restraint  of  trade 
and  makes  all  contracts  falling  within  its  terms  void 
unless  they  fall  within  its  exceptions,  and  that  conse- 
quently the  agreement  was  void.  To  a  similar  effect 
is  the  decision  in  Parasulla  Mallick  v.  Chandra  Kanta 
Das.1  The  defendant  Parasulla  used  to  carry  on 
business  as  a  carrier  of  passengers  by  gahana  boats 
between  two  places.  The  plaintiff  set  up  a  rival  busi- 
ness and  as  the  competition  interfered  very  seriously 
with  the  defendant's  profits,  he  agreed  to  pay  to  the 
plaintiff  a  large  sum  of  money  in  consideration  of  the 
latter  abstaining  from  carrying  on  the  rival  business 
along  the  same  route  for  a  period  of  three  years.  It 
was  held  that  the  consideration  of  the  contract  being 
the  restraint  of  the  plaintiff's  rival  business  in  gahana 
boats,  the  contract  was  void  under  the  provisions  of 
section  27  of  the  Contract  Act. 

The  agreement  of  a  physician  not  to  practise  for 
a  limited  period  within  a  certain  area  was  considered 
by  the  Bombay  High  Court  in  a  case  from  Zanzibar2 
The  defendant  Macdonald  agreed  on  certain  terms  to 
become  assistant  for  three  years  to  the  plaintiff  Charles- 
worth,  a  physician  and  surgeon,  practising  at  Zan- 
zibar. The  letter  which  stated  the  terms  which  the 
plaintiff  offered  and  which  had  been  accepted  by  the 
defendant  contained  the  words  "the  ordinary  clause 
against  practising  must  be  drawn  up."  No  formal 
agreement  was  drawn  up  but  the  terms  stated  in  the 
letter  were  strictly  observed.  At  the  end  of  a  year  a 
disagreement  took  place  and  the  defendant  ceased  to 
act  as  the  plaintiff's  assistant  and  began  to  practise 
in  Zanzibar  on  his  account.  In  decreeing  the  plain- 


I    21   C.W.N.  QIQ  ;    ?Q  I  C.    177. 

a  Charles-worth  v.  Macdonald  I.L.R.  23  Rom.  103. 


376 

tiff's  suit  for  injunction  the  court  observed  that  there 
being  no  evidence  of  what  (<  the  ordinary  clause 
against  practising  "  was,  it  must  be  taken  at  least  to 
be  a  contract  not  to  practise  at  Zanzibar  in  competi- 
tion with  the  employer  during  the  period  of  engage- 
ment ;  such  an  agreement  would  be  in  furtherance  and 
not  in  restraint  of  the  exercise  of  a  profession. 

The  question  whether  a  contract  which  violates 
the  provisions  of  section  27  of  the  Contract  Act  would 
be  void,  even  if  it  had  been  carried  out  partially,  came 
up  for  discussion  recently  before  a  Full  Bench  of  the 
Lower  Burma  Chief  Court.1  The  plaintiff  in  the  case 
promised  and  undertook  not  in  any  way  to  set  up  or 
carry  on  a  stevedoring  business ;  the  defendant  in 
consideration  of  the  plaintiff's  promise  agreed  to  pay 
a  certain  sum  of  money  per  month  during  the  plain- 
tiff's life.  The  agreement  was  observed  for  some 
months  but  the  defendant  afterwards  refused  to  pay. 
The  plaintiff  brought  a  suit  for  recovery  of  the  money. 
It  was  held  that  the  agreement  being  in  restraint  of 
trade,  the  plaintiff  was  not  entitled  to  recover. 

The  case  of  Haribhai  Maniklal  v.  Sharafali  Isabji  'l 
is  one  of  the  few  Indian  cases  in  which  the  ques- 
tion has  arisen  as  to  how  far  an  agreement  among 
traders  or  manufacturers  to  carry  on  their  work  under 
special  conditions  and  stipulations  as  to  price,  etc.,  is 
against  public  policy  as  being  in  restraint  of  trade.  ' 
I  will,  therefore,  state  the  facts  briefly.  In  that 
case  the  owners  of  four  ginning  factories  with  a  view 
to  prevent  competition  amongst  them,  entered  into 
an  agreement  which  provided  inter  alia  that  they 
should  charge  a  uniform  rate  of  Rs.  4-8  per  palla  of 
cotton  to  be  ginned,  and  that  they  should  treat  Rs. 
2-8  of  that  sum  as  the  actual  cost  of  ginning,  and  that 
the  remaining  Rs.  2  should  be  carried  to  a  common 
fund  which  was  to  be  divided  each  year  bet  ween  them 
in  proportion  to  the  number  of  gins  which  each  of 
them  possessed.  The  agreement  was  to  continue  in 
force  for  four  years.  The  other  parties  carried  out 
the  agreement,  but  the  defendant  though  he  had 


1  Hurry  Krishna  Pillai  v.  M.  Anthitackary  Ammal  33  I.C.  238. 

2  I.L  R.  22  Bom.  p.  861. 

•*  Cases  of  this    description  abound  in  England  and  America  but  they 
are  rare  in  this  country 


377 

credited  Rs.  2  to  a  separate  account  refused  to 
pay  the  plaintiff  his  share  of  the  amount.  The  plain- 
tiff sued  the  defendant  to  recover  his  share.  The 
defendant  contended  that  the  agreement  was  in  res- 
traint of  trade,  and  was,  therefore,  unenforceable. 
The  court  held  that  the  plaintiff  was  entitled  to  re- 
cover his  share  from  the  defendant.  Farran,  C.J., 
thought  that  the  stipulation  that  the  parties  should 
not  charge  more  than  Rs.  4-8  per  palla  was  in  res- 
traint of  trade.  Candy,  J.,  however,  was  inclined  to 
the  contrary  view.  The  decision  was  put  on  the 
ground  that  the  only  agreement  sought  to  be  enforced 
in  the  suit  was  the  agreement  to  divide  the  profit, 
which  was  perfectly  lawful,  and  that  there  was  no 
question  in  the  suit  to  enforce  any  of  the  covenants 
alleged  to  be  in  restraint  of  trade.  The  decision  was 
followed  in  a  subsequent  case,1  where  it  was  laid  down 
that  a  combination  in  circumstances  similar  to  the 
above,  among  managers  of  rival  firms,  was  not 
unlawful. 

In  no  case  was  the  question  as  to  the  legality  of 
contracts  in  restraint  of  trade  under  the  Indian  law  so 
fully  and  thoroughly  discussed  as  in  that  of  Shaikh 
Kahi  v.  Ramsaran  Bhagat?  In  that  case,-  the  facts 
were  as  follows  :  The  plaintiff  was  a  merchant  residing 
at  Patna  City  who  used  to  supply  traders  in  Calcutta 
with  combs.  He  took  an  agreement  from  the  defend- 
ant Shaikh  Kalu  as  well  as  twenty-eight  other 
manufacturers  of  combs  in  the  city  of  Patna  whereby 
the  latter  agreed  to  supply  him  with  combs  and  not  to 
sell  the  same  to  any  one  else.  The  plaintiff  Ramsaran 
did  not  execute  the  agreement.  It  was  further  stipu- 
lated that  he  was  not  bound  to  accept  the  goods 
manufactured  if  he  found  there  was  no  market  for 
them  at  Patna,  Calcutta  or  elsewhere.  It  was  held 
that  the  agreement  was  void  as  being  in  restraint  of 
trade,  the  restraint  being  unreasonable  within  the  rule 
of  law  laid  clown  in  recent  English  cases  and  certainly 
void  under  the  wider  language  of  sec.  27  of  the  Indian 
Contract  Act.  Under  sec.  27  of  the  Contract  Act 
whether  the  restraint  is  general  or  partial,  unqualifiedor 


i   Kuber  Nath  v.  Mahali  Ram  I.L.R.  34  All.  587  ;  f6  I.C.  631. 
*  13  C.W.N.  p.  388  ;  9  C.LJ.  216  ;  II.C.  94. 


48 


qualified,  if  it  be  in  the  nature  of  a  restraint  of  trade, 
it  is  void.  It  was  further  held  that  it  was  void  as  being 
an  attempt  to  suppress  competition  by  means  of 
contracts  with  independent  manufacturers  for  their 
entire  products,  so  as  to  monopolise  the  market.  The 
case  stands  out  in  bold  relief  from  others  of  its  kind  in 
India  in  as  much  as  the  court  did  not  content  itself 
with  keeping  within  the  four  corners  of  the  Act  itself. 
vSir  Ashutosh  Mookerjee  in  delivering  judgment 
went  into  the  fundamental  principles  governing 
the  validity  of  contracts  in  restraint  of  trade,  passing 
in  review  all  the  more  important  English  and  American 
cases  (including  the  Nordenfelt  case)  as  also  the  Indian 
cases  beginning  from  that  of  Madhab  Chunder  Pora- 
manik.  The  conclusion  which  Sir  Ashutosh  Mookerjee 
arrived  at  in  regard  to  the  scope  and  effect  of  sec.  27 
of  the  Contract  Act  will  appear  from  the  following 
observations :  u  It  is  obvious,  therefore,  that  the 
framers  of  the  Indian  Contract  Act  deliberately  repro- 
duced the  provisions  of  sec.  833  of  the  New  York 
Civil  Code  with  the  full  knowledge  that  the  effect 
would  be  to  lay  down  a  rule  much  narrower  than 
what  was  recognised  at  the  time  by  the  common  law. 
The  rules  of  the  common  law7,  on  the  other  hand,  have 
since  then  been  considerably  widened  and  developed. 
The  result  is  that  the  rule  as  embodied  in  sec.  27  of  the 
Indian  Contract  Act.  presents  an  almost  startling  dis- 
similarity to  the  most  modern  phase  of  the  English  rule 
on  the  subject.  As  observed,  however,  by  Sir  Richard 
Couch  in  the  case  to  which  we  have  referred,  we  have 
nothing  to  do  with  the  policy  of  the  law,  specially  as  the 
legislature  has  deliberately  left  the  provision  in  sec.  27 
in  its  original  form,  though  other  provisions  of  the 
Contract  Act  have  from  time  to  time  been  amended." 
In  a  later  ca?e  l  where  the  defendant,  actor  and  pro- 
prietor of  Allan  Wilkie  &  Co.,  had  contracted  with 
the  plaintiff,  proprietor  of  the  Grand  Opera  House, 
Calcutta,  to  play  for  him  arid  not  to  play  in  any  other 
theatre  on  his  own  or  on  some  one  else's  behalf  until 
after  the  expiration  of  the  period  contracted  for,  and 
until  after  his  return  from  England,  and  where  he  had, 
in  breach  of  the  agreement,  performed  in  another 


E.  M.  D.  Cohen  v.  Allan  Wilkie,  16  C.W.N.  554 


379 

theatre  after  the  expiration  of  the  period  con- 
tracted for,  but  before  his  return  to  England,  it  was 
held  that  under  sec.  27  of  the  Contract  Act  the  agree- 
ment being  in  restraint  of  a  lawful  profession,  trade  or 
business  was  void  and  as  such  could  not  be  enforced 
by  injunction.  In  another  case1  where  one  of  two 
rival  cooly  suppliers  agreed  with  the  other  not  to 
supply  coolies  in  consideration  of  the  latter  agreeing 
to  pay  the  former  a  sum  of  money  per  month,  it 
was  held  that  the  agreement  was  made  with  a  view 
to  avoid  competition  and  hence  was  clearly  an  agree- 
ment by  which  the  former  was  restrained  from  exer- 
cising a  lawful  trade  or  business. 

There  is  a  class  of  cases  in  which  though  the 
contract  is  not  in  restraint  of  any  trade  or  profession  slavery-bond 
it  is  in  restraint  of  personal  freedom.  In  such  cases  cases- 
it  has  been  held  that  the  courts  will  not  enforce  a 
contract  fettering  a  man's  liberty  of  action  as  being 
contrary  to  public  policy/  unless  it  be  for  his  benefit/ 
The  principle  has  been  applied  to  what  are  known  as 
"slavery  bond"  cases  and  it  has  been  held  that  a 
harwaki  (ploughman's)  bond — which  bound  down  the 
executant  to  daily  attendance  and  manual  labour 
until  the  amount  borrowed  was  repaid  in  a  certain 
month  and  penalised  default  with  75  p.c.  interest  per 
year— is  not  enforceable.4  This  case  has  been  followed 
in  a  subsequent  case.5  Two  brothers  executed  a  bond 
in  favour  of  the  plaintiff  in  which  one  of  them  agreed 
to  remain  all  along  in  attendance  and  to  do  the  work 
of  the  plaintiff  and  never  to  remain  absent  from  duty. 
In  case  of  absence  it  was  stipulated  that  the  whole 
amount  mentioned  in  the  bond  would  be  recoverable 
with  interest  atone  anna  per  rupee  per  month.  It  was 
observed  that  such  a  contract — in  which  a  labourer 
engages  to  work  without  any  payment  whatsoever 
under  conditions  that  make  it  practically  impossible 
for  him  to  discharge  the  debt  until  some  other  capi- 
talist redeems  him — is  indistinguishable  from  slavery 

1  P.  P.  Thangavelu  Ch-tty  v.  P.  Mnlmnda  Naidu  21  I.C.  768. 

*  llnnvood  v    Millar's   Timber  and    Trading   Company,  Limited   (1917) 
I.K.B.  505. 

3  Tmsteeof  Dennv  v.  Denny  find  Warr  (1919)  i  K.  B.  583. 

+  Earn  Samp  Bhagat  v.   Bausi  Mandar,  I.L.C.  42  Cal.  742.  i)CW.N 
1118  ;  30  I.C.  055. 

fc  Sittisk  Chandra  Ghosh  v.  Kashi  Sahu  3  P.I/.J.  412  ;  46  I.C.  418. 


380 

and  in  practice  compels  the  debtor  and  his  descendants 
to  a  perpetual  serfdom.  The  contract  was  held 
to  be  wholly  void  and  the  plaintiff  was  refused  any 
relief  whatsoever. l  It  may  be  observed,  however,  that 
a  stipulation  in  a  bond  to  work  for  a  specified  term  in 
lieu  of  payment  of  interest — is  enforceable.  There  is 
little  difference  between  such  a  contract  and  one  of 
apprenticeship  or  indenture.2 

1  The  contrary  view  taken  in  the  case  of  Anandiram  Mandal  v.  Goza 
Kachori  27  C.L.J.  459;  45  I.C.  965  (decided  ex  parte)  is,  it  is  submitted, 
bad  law. 

*  Ponnusami  v.  Polavathan  51  I.C.  25. 


LECTURE    X. 
COMBINATION  OF  LABOUR. 

In  one  sense  agreement  in  restraint  of  trade  may 
be  taken  to  cover  a  wide  area  and  to  include  agreement 
among  labourers  to  raise  wages,  and  agreement  among 
employers  to  reduce  wages.  But  such  treatment  has 
evident  disadvantages.  Trade  and  labour  combina- 
tions have  their  peculiar  causes  and  characteristics  and 
for  purposes  of  accurate  understanding,  it  is  not  only 
convenient  but  necessary  to  study  their  incidents 
separately  and  discuss  their  legal  bearing  in  the  light  of 
the  conditions  which  bring  them  into  existence. 
Obviously,  both  employers  and  workmen  have  a  right 
to  combine  within  limits.  The  question  is  what  those 
limits  are.  According  as  these  limits  are  observed  or 
not,  the  combinations  of  both  classes  may  be  lawful 
or  otherwise. 

The  principle  on  which  such  combinations  may 
be  countenanced  by  law  is  comprehensively  expressed 
by  Chief  Justice  Campbell  in  Hilton v.  Eckersley1  "I 

cannot  bring  myself  to  believe  that  if  two 

workmen  who  sincerely  believe  their  wages  to  be 
inadequate  should  meet  and  agree  that  they  would 
not  work  unless  their  wages  were  raised,  without 
designing  or  contemplating  violence  or  any  illegal 
means  for  gaining  their  object,  they  would  be  guilty 
of  a  misdemeanor,  and  liable  to  be  punished  by  fine 
and  imprisonment.  The  object  is  not  illegal  and, 
therefore,  if  no  illegal  means  are  to  be  used  there  is  no 
indictable  conspiracy.  Wages  may  be  unreasonably 
low  or  unreasonably  high,  and  I  cannot  understand 
why  in  the  one  case  workmen  can  be  considered  as 
guilty  of  a  crime  in  trying  by  lawful  means  to  raise 
them,  or  masters,  on  the  other,  can  be  considered 
guilty  of  a  crime  in  trying  by  lawful  means  to  lower 
them." 

It  will  be  observed  that  the  above  remarks  of 
Campbell,  C.J.,  amount  to  this  that  the  rule  against 

1  6  E.  and  B.  47,  62  ;  s.c.  119  EJng.  Rep.  781. 


restraint  of  trade  is  not  to  be  extended  to  combinations 
among  employees,  on  the  one  hand,  to  raise  wages,  or  to 
combinations  of  employers,  on  the  other,  to  reduce 
wages.  One  reason  for  the  partiality  to  the  employers 
and  the  workingmen  may  be  the  sentiment  so  often 
expressed,  namely,  that  they  after  all  are  the  people 
legally  responsible  for  the  general  prosperity  of  the 
country,  and  the  other  reason  perhaps  is  the  utter 
inutility  of  putting  stumbling  blocks  in  their  way. 
They  have  always  managed  to  hold  their  own  against 
odds,  and  they  had  better  be  let  alone  to  arrange  for 
wages,  etc.,  according  to  their  respective  interests,  if 
only  they  would  do  so  by  proper  methods,  i.e.  without 
violence,  threat  or  intimidation,  and  without  molesting 
or  obstructing  any  one  else. 

On  the  other  hand,  owing  to  the  increasing  power 
of  the  working  class  vote  and  the  growing  belief, 
admitted  by  economists,  that  individual  labour  cannot 
bargain  on  equal  terms  with  employers  and  that  the 
just  interests  of  labour  require  the  force  and  protection 
to  be  derived  from  combination,  it  was  felt  that 
association  was  essential  for  many  useful  forms  of 
economic  activity.  A  marked  change  of  opinion  took 
place  in  favour  of  labour  combination  during  the 
nineteenth  century,  and  such  combination  was  gra- 
dually admitted  as  necessary  for  the  protection  of  the 
rights  and  interests  of  labour.  This  change  of  opinion 
is  well  reflected  in  the  observation  of  Cockburn,  C.  J.,  in 
Wood  v.  Brown.1  "  And  we  ought,  as  long  as  nothing 
is  done  contrary  to  the  law,  to  leave  it  open  to  labour 
on  the  one  hand  and  capital  on  the  other  to  make  the 
best  terms  they  can  for  themselves.  Large  numbers 
of  men,  who  have  not  the  advantage  of  wealth,  very 
often  can  protect  their  own  interests  only  by  means 
of  association  and  co-operation  and  we  ought  not  to 
strain  the  law  against  men  who  have  only  their  own 
labour  and  their  association  by  which  they  can  act  in 
the  assistance  of  one  another."  The  aim  of  law,  in 
modern  times,  has  thus  been  to  safeguard  associations 
so  far  as  socially  beneficial,  while  retaining  a  weapon 
of  defence  against  harmful  forms  of  associations. 
Labour  combination,  therefore,  is  now  not  regarde< 

1  (1866)  L.R.  2  Q.B.  21  at  p.  25. 


as  necessarily  harmful  or  against  public  policy  but  is 
judged  by  its  purpose  and  results. 

This  is  the  present  position.  But  it  has  not 
always  been  so.  The  modern  view  is  the  opposite  of 
that  embodied  in  the  earlier  English  statutes.  Labour 
and  capital  are  now  regarded  as  on  the  same  footing 
and  equally  entitled  to  freedom  in  regard  to  combina- 
tion for  the  protection  of  their  own  interests,  but 
under  the  earlier  statutes  they  came  in  for  little 
favour,  the  advantage  being  all  on  the  side  of  their 
employers.  Take  for  instance  the  Statute  of  Labour- 
ers of  1349  and  1359- l  They  provided  that  every  man 
and  woman  of  whatever  condition  able  in  body,  and 
within  the  age  of  three  score  years,  "being  required, 
shall  be  bound  to  serve  him  that  doth  require  him,  or 
else  committed  to  the  gaol,  until  he  finds  surety  to 
serve."  Thus  such  service  was  compulsory,  and  in 
default  the  labourer  was  to  be  visited  with  imprison- 
ment. Besides,  he  was  not  to  get  more  than  the 
customary  wages.  These  statutes  were  intended  to 
check  the  rise  in  wages  and  meet  the  scarcity  of 
labourers  caused  by  the  Black  Death.  They  were 
the  first  of  a  series  passed  to  impede  the  free 
operation  of  labourers.  The  statute  of  Henry  VI  of 
1424,  the  statute  of  Edward  VI  (1548),  the  statute 
of  Elizabeth  (1562)  were  all  directed  against  labourers. 
The  last  one  was  entitled  ((  An  Act  containing  diverse 
orders  for  artificers,  labourers,  servants  of  husbandry 
and  apprentices."  Other  enactments  too  numerous 
to  mention,  were  passed  from  time  to  time  whereby 
the  legislature  endeavoured  to  fetter  the  hands  of  the 
labourer  as  far  as  possible.  What  the  labourer  failed 
to  do  by  individual  effort,  he  tried  to  achieve  by 
combination  with  fellow  labourers.  Diverse  forms  of 
combined  action  were  attempted  and  the  result  was. 
among  others,  the  statutes  of  1799  and  1800  directed 
against  combination  to  raise  wages.  The  following 
observations  of  Mr.  Justice  Stephen  give  a  clear  idea 
of  the  effect  and  scope  of  the  combination  laws.  He 
says:  (ilt  is  obvious  that  whatever  may  have  been 
the  immediate  occasion  of  the  laws  in  question  they 
carried  out  and  developed  to  their  natural  and  legit- 

l  23  Ed.  IV  and  25  Ed.  Ill,  C.I. 


384 

imate  conclusion  a  great  mass  of  earlier  legislation, 
going  back  to  the  Statute  of  Labourers,,  which  again 
has  relation  to  the  still  earlier  period  when  a  consider- 
able part  of  the  population  were  serfs.  First,  it  is 
enacted  that  labourers  and  mechanics  are  to  work 
at  certain  wages  and  to  reside  at  certain  places.  In 
process  of  time  this  became  inconsistent  with  the  altered 
circumstances  of  society  and  a  system  is  substituted 
for  it  under  which  wages  are  still  to  be  fixed,  and  all 
mechanics  are  to  go  through  a  regular  apprenticeship 
for  seven  years,  all  the  conditions  as  to  the  taking  of 
apprentices  being  carefully  regulated  by  act  of  parlia- 
ment. Incidentally,  combinations  to  raise  wages  are 
forbidden,  but  with  no  detail.  This  system  also 
breaks  down  as  new  trades  spring  up,  and  numbers 
of  workmen  are  collected  in  manufacturing  towns  and 
brought  into  a  proximity  to  each  other  which  cannot 
but  make  them  feel  their  own  power  and  suggest  to  them 
that,  as  against  their  employers,  they  have  common 
interests  which  may  be  promoted  by  combinations. 
The  difficulties  which  arise  from  this  conflict  between 
the  existing  law  and  the  new  facts  are  at  first  provided 
for  by  particular  statutes  relating  to  particular  trades. 
At  last  they  are  made  the  subject  of  a  general  act, 
which  applies  in  the  most  detailed,  specific,  uncom- 
promising way  the  principle  upon  which  all  the  earlier 
legislation  had  depended.  Workmen  are  to  be  con- 
tented with  the  current  rate  of  wages,  and  are  on 
no  account  to  do  anything  which  has  a  tendency  to 
compel  their  employers  to  raise  it.  Practically,  they 
could  go  where  they  pleased  individually  and  make  the 
best  bargains  they  could  for  themselves,  but  under  no 
circumstances  and  by  no  means,  direct  or  indirect, 
must  they  bring  the  pressure  of  numbers  to  bear  on 
their  employers  or  on  others."  ' 

One  very  significant  reason  for  the  passing  of  the 
earlier  statutes  was  that  the  State  undertook,  chiefly 
through  the  Justices  of  the  Peace,  to  control  and  fix 
fair  wages  and  fair  prices  for  food.2  So  long  as  this 

l  Stephens  Hist.  Crim.  Law,  Vol.  Ill,  p.  208. 

*  See  Statute  of  Labourers  1350,  25  Ed.  IV  C.  6— The  justices  shall 
hold  their  sessions  four  times  a  year  and  all  times  needful  to  enquire  into 
wages  and  prices  for  food. 

See  also  Statute  of  Labourers,  1349,  23  Ed.  IV  C.  6— Victuals  shall  be 
sold  at  a  reasonable  price. 


State  machinery  was  supposed  to  function,  private 
combinations  could  not  be  allowed  to  intervene.  State 
control,  however,  failed  during  the  Industrial  Revolu- 
tion and  the  Statute  of  Apprentices,  etc.,  was  repealed 
in  1813.  But  owing  to  fear  of  popular  rebellion, 
increased  by  the  French  Revolution,  and  owing  to 
predominance  of  the  doctrine  of  natural  liberty,  the 
penal  laws  against  combination  were  continued  till 
1824. 

A  safer  and  more  practical  policy  led  the  legis- 
lature in  that  year  to  repeal  all  the  enactments  which 
had  up  to  that  time  stood  in  the  way  of  free  exer- 
tion on  the  part  of  labourers  to  protect  their  own  in- 
terests. The  Act  of  1824  l  provided  inter  alia  as  fol- 
lows :  "  That  journeymen,  workmen  or  other  persons 
who  shall  enter  into  any  combination  to  obtain  an 
advance  or  to  fix  the  rate  of  wages  or  to  lessen  or 
alter  the  hours  or  duration  of  the  time  of  working,  or 
to  decrease  the  quantity  of  work,  or  to  induce  an- 
other to  depart  from  his  service  before  the  end  of  the 
time  or  term  for  which  he  is  hired,  or  not  being  hired, 
to  refuse  to  enter  into  work  or  employment,  or  to  re- 
gulate the  mode  of  carrying  on  any  manufacture, 
trade  or  business  or  the  management  thereof,  shall 
not  therefore  be  subject  or  liable  to  any  indictment 
or  prosecution  for  conspiracy,  or  to  any  other  crimi- 
nal information  or  punishment  whatever,  under  the 
common  or  the  statute  law."  Then  followed  the  Act 
of  1825  *  which  was  directed  against  the  exercise  of 
violence,  intimidation,  undue  persuasion  and  unwar- 
rantable interference  with  the  rights  of  others.  At 
the  same  time  it  expressly  provided  that  it  would  not 
affect  any  combination  the  object  of  which  was  to 
raise  wages  or  prices  or  any  meeting  held  in  that  be- 
half. By  the  Acts  of  1824  and  1825  the  legislature 
for  the  first  time  endeavoured  to  place  capital  and 
labour  on  a  footing  of  equality.  The  principle  laid 
down  was  that  if  capital  could  be  allowed  to  combine 
for  lowering  wages,  labour  must  also  be  allowed  free- 
dom to  combine  for  the  purpose  of  raising  wages. 
Both  forms  of  conduct  were  lawful  provided  that 
they  were  for  the  purpose  of  a  legitimate  trade  object 

l   5  Geo.  4,  C.  95.  2  6  Geo.  4,  C.  129. 

49 


386 

and  not  in  pursuit  of  a  malicious  purpose  to  ruin  or 
injure  a  person  and  the  means  employed  for  carrying 
out  their  respective  objects  was  not  unlawful,  or  op- 
pressive. In  the  year  1871  was  passed  the  Trades 
Union  Act l  and  also  an  Act  '2  to  amend  the  criminal 
law  relating  to  "  violence,  threats  and  molestation" 
directed  towards  checking  unlawful  methods  often  re- 
sorted to  by  labourers.  In  1875  it  \\as  found  expedi- 
ent to  repeal  the  Act  of  1871  and  the  Conspiracy  and 
Protection  of  Property  Act,  1875  3  was  passed  to  take 
its  place.  It  provided  that  "  An  agreement  or  combi- 
nation by  two  or  more  persons  to  do  or  procure  to 
be  done  any  act  in  contemplation  or  furtherance  of 
a  trade  dispute  between  employers  and  workmen  shall 
not  be  indictable  as  a  conspiracy,  if  such  act  commit- 
ted by  one  person  would  riot  be  punish  able  as  a  crime."* 

Thus  the  law  as  to  labour  combinations  is  not 
only  the  result  of  a  series  of  judicial  decisions  but  also 
a  series  of  legislative  enactments.  The  legislation  has 
uniformly  been  in  the  direction  of  allowing  greater 
freedom  to  employers  as  well  as  to  workmen.  Such 
freedom  is  only  to  be  checked  when  the  circumstances 
show  an  attempt  on  their  part  to  resort  to  unlawful, 
violent  or  oppressive  methods. 

The  leading  cases  also  lay  down  the  same  princi- 
ple, and  declare  that  only  acts  such  as  boycotting, 
picketting,  intimidation,  molestation,  etc.,  amount  to 
unlawful  methods.  In  Reg  v.  Selsby  6  the  circumstan- 
ces were  such  as  to  show  that  the  defendants  were 
guilty  of  resorting  to  unlawful  methods,  hence  some  of 
them  were  found  guilty  of  the  conspiracy  charged. 
The  defendant  had  attempted  to  dictate  what  work- 
men should  be  employed  and  to  give  a  warning  that  no 
journeymen  who  were  not  members  of  certain  trades 
unions  should  be  given  work.  They  failed  to  attain 
their  object  and  thereupon  they  struck  and  circulated 
bills  announcing  that  pickets  had  been  established 
round  the  foundry.  The  following  words  from  the 
charge  to  the  jury  by  Baron  Rolfe  will  show  how  he 


l  34  and  35  Viet.  C.  31. 

*  34  and  35  Viet.  C.  32.  *  38  and  39  Viet.  C.  86. 

*  See  also  the  Trade  Union  Act  Amendment  Act,  1876  (39  and  40  Viet 
C   22  }  and  the  Trade  Union  Act  of  1913   (2  and  3  Geo.  V.  C.  30). 

&  ( 1847  )  5  Cox.  Cr.  Cas.  495. 


apprehended  the  law  laid  down  in  the  statute.1  (( If 
any  illegal  means  be  taken,  the  principle  of  the  com- 
mon law  steps  in  and  says  that  if  persons  conspire  and 
combine  together  to  effect  the  illegal  object,  an  object 
that  is  of  itself  illegal,  any  such  conspiracy  to  effect 
an  illegal  object  is  itself  criminal ;  and  what  the  pro- 
secutors of  this  indictment  have  done  is  this.  They 
have  not  proceeded  under  the  statute  to  indict  the 
parties  for  the  alleged  illegal  act,  but  they  undertake 
to  show  a  general  combination  amongst  them  all  to 
effect  these  illegal  acts,  and  for  that  it  is  they  have 
indicated  them."  In  Reg  v.  Duffield  %  a  committee  put 
forward  a  threat  that  unless  a  certain  employee  was 
discharged  every  man  in  the  factory  would  be  called 
out.  It  was  held  that  it  was  perfectly  legitimate  for 
a  workman  not  to  take  employment  unless  he  was  paid 
at  a  certain  rate  of  wages  That  being  so,  it  was  per- 
fectly lawful  for  a  body  of  workmen  to  combine  and 
resolve  not  to  accept  employment  unless  the  employ- 
ers gave  them  wages  at  a  certain  rate.  But  it  would 
not  be  lawful  for  a  workman  to  persuade  men  already 
hired  by  and  in  the  employ  of  other  masters  to  leave 
that  employment.  Therefore,  it  follows  that  a  com- 
bination of  workmen  formed  for  the  purpose  of  per- 
suading other  workmen  already  employed  to  leave 
their  employment,  or  any  conspiracy  to  obstruct  a 
manufacturer  in  carrying  on  his  business  by  inducing 
his  workmen  to  leave  service  or  to  make  an  alteration 
in  the  mode  of  conducting  and  carrying  on  trade,  is 
an  indictable  offence.  In  Reg.  v.  Rowlands,*  the 
combination  was  one  of  employers.  Eighteen  cotton 
spinners  signed  a  bond  whereby  they  bound  them- 
selves severally  to  carry  on  their  business  according 
to  the  resolutions  of  the  majority,  the  object  of  the 
combination  avowedly  being  to  counteract  certain 
combinations  of  workmen,  whereby  f '  persons  otherwise 
willing  to  be  employed  are  deferred  by  a  reasonable 
fear  of  social  persecution  and  other  injuries,  from 
hiring  themselves."  The  question  was  whether  this 
bond  was  unlawful  or  merely  unenforceable.  The 
case  -was  argued  before  three  judges  and  there  was 
great  difference  of  opinion  on  the  subject.  The  fol- 

1  6  Geo.  IV.  Ch.  129.         25  Cox.  Cr.  C.  404.         *   $  Cox.  Cr.  C.  436, 


388 

lowing  extract  from  the  charge  to  the  jury  by  Erie,  J., 
will  show  clearly  how  the  court  apprehended  the  right 
of  the  workmen  and  the  employers  to  combine  and 
the  limits  of  that  right :  "  The  law  is  clear  that  work- 
men have  a  right  to  combine  for  their  own  protection 
and  to  obtain  such  wages  as  they  choose  to  agree  to 
demand.  I  say  nothing  at  present  as  to  the  legality 
of  other  persons,  not  workmen,  combining  with  them 
to  assist  in  that  purpose.  As  far  as  I  know  there  is 
no>  objection  in  point  of  law  to  it  and  it  is  not  neces- 
sary to  go  into  the  matter,  but  I  consider  the  law  to 
be  clear  so  far  only  as  while  the  purpose  of  the  combi- 
nation is  to  obtain  a  benefit  for  the  parties  who 
combine — a  benefit  which  by  law  they  can  claim.  I 
make  that  remark  because  a  combination  for  the  pur- 
pose of  injuring  another  is  a  combination  of  a  differ- 
ent nature,  directed  personally  against  the  party  to 
be  injured  ;  and  the  law  allowing  them  to  combine  for 
the  purpose  of  obtaining  a  lawful  benefit  to  them- 
selves gives  no  sanction  to  combinations  which  have 
for  their  immediate  purpose  the  hurt  of  another. 

'The  rights  of  workmen  are  conceded;  but  the 
exercise  of  free  will  and  freedom  of  action  within  the 
limits  of  the  law,  is  also  secured  equally  to  the  masters. 
The  intention  of  the  law  is  at  present  to  allow  either  of 
them  to  follow  the  dictates  of  their  own  will  with 
respect  to  their  own  actions  and  their  own  property; 
and  either  I  believe  has  a  right  to  study  to  promote 
his  own  advantage  or  to  combine  with  others  to  pro- 
mote their  mutual  advantage/'  The  statement  of 
the  law  by 'Lord  Cockburn  in  Walsby  v.  Anley  '  should 
also  be  carefully  studied.  It  puts  the  whole  position 
in  a  nutshell.  "  I  am  decidedly  of  opinion"  says  he, 
u  that  every  workman  who  is  in  the  service  of  an 
employer,  and  is  not  bound  by  agreement  to  the  con- 
trary, is  entitled  to  the  free  and  unfettered  exercise  of 
his  own  discretion  as  to  whether  he  will  or  will  not 
continue  in  that  service  in  conjunction  with  any  other 
person  or  persons  who  may  be  obnoxious  to  him. 
More  than  this ;  any  number  of  workmen  who  agree 
in  considering  some  of  their  fellow  workmen  obnox- 
ious, have  each  a  perfect  right  to  put  their  employer 

I  3  E.  and  E.  (Q.B.  )  515  ;  s.  c.  121  Eng.  Rep.  536. 


the  alternative  of  either  retaining  their  services  by  dis- 
charging the  obnoxious  persons,  or  losing  those  services 
by  retaining  those  persons  in  his  employment.  But  if 
they  go  further,  and,  not  content  with  simply  put- 
ting the  alternative  to  the  employer,  combine  to 
coerce  him,  by  threats  of  jointly  doing  something  which 
is  likely  to  operate  to  his  injury,  into  discharging  the 
obnoxious  persons,  I  think  that  they  may  properly  be 
said  to  bring  themselves  within  the  scope  of  the  third 
section  of  the  statute.  In  the  case  before  us,  it  was 
not  one  man  merely  who  went  to  the  employer  and  said 
that  he  should  leave  if  the  obnoxious  workmen  did  not, 
nor  several  men  merely,  who,  adopting  the  same  course, 
gave  their  master  the  option  of  retaining  them  or  the 
obnoxious  men  in  his  service ;  but  several  men,  who 
combined  together  with  the  object  of  coercing  the  mas- 
ter into  dismissing  the  obnoxious  workmen  by  the  threat 
of  otherwise  leaving  in  a  body  at  a  moment's  notice. 
Although  I  at  first  entertained  some  slight  doubt 
whether  what  was  said  amounted  to  a  '  threat,'  I 
have  no  doubt  whatever  that  the  conduct  of  the  ap- 
pellant and  the  other  malcontent  workmen  amounted 
to  a  '  molesting '  of  the  master,  within  the  meaning  of 
the  Act ;  and  that  their  proceedings  were  altogether 
illegal,  whether  it  is  said  that  the}^  threatened  and 
intimidated,  or  that  they  molested  and  obstructed  the 
respondent,  their  employer,  in  his  business."  ' 

The  above  cases  bear  on  the  question  of  crim- 
inal liability  for  conspiracy.  Turning  to  the  question 
of  civil  liability  for  unlawful  acts  constituting  conspir- 
acy, we  come  across  a  number  of  momentous  deci- 
sions in  the  course  of  the  last  and  the  present  country. 
In  order  that  the  conspiracy  might  be  declared  un- 
lawful it  was  found  necessary  to  inquire  in  the  first 
instance  whether  the  act  committed  would  have  been 
unlawful  if  committed  by  an  individual  and  not  jointly 
with  others.  The  law  on  the  subject  was  laid  down 
thus  by  Crompton.,  J.,  in  Lumley  v.  Gyef  "A  person 
who  wrongfully  and  maliciously,3  or,  which  is  the 

1  See  also   Collins  v.  Locke  L.R.  4  A.C.  674;  48   L.J.  P.C.  68;  41   L.T. 
(N.S. )  292;  Hornby  v.  Close  L.R.  2  O.B.  153  ;  Farret  v.  Close  L.R.  4  Q.B.  602. 

2  1853  2  E.  and  B.  216  at  p.  224  ;  22  L.  J.  Q.B.  463  ;  s.c   1 18  E)ng.  Rep.  749. 

3  Although  the  principle  is  stated  as    applying  only  against  a  person 
who  acts  maliciously,  the  only  '  malice'  necessary  to  render  him  liable  con- 
sists merely  of  the  knowledge  that  the  contract  exists  and  that  he  has  no 


39° 

same  thing,  with  notice,  interrupt  the  relation  sub- 
sisting between  master  and  servant  by  procuring  the 
servant  to  depart  from  the  master's  service,  or  by 
harbouring  and  keeping  him  as  servant  after  he  has 
quitted  it  and  during  the  time  stipulated  for  as  the 
period  of  service,  whereby  the  master  is  injured, 
commits  a  wrongful  act  for  which  he  is  responsible 
at  law."  In  that  case  the  plaintiff  a  manager  of  a 
theatre  sued  the  defendant,  a  rival  manager  for  induc- 
ing a  third  party  Miss  Wagner,  to  break  an  engage- 
ment to  sing  at  the  plaintiff's  theatre.  It  was  held 
that  the  plaintiff  was  entitled  to  recover.  He  who 
maliciously  procures  a  damage  to  another  by  violation 
of  his  right  ought  to  be  made  to  indemnify  ;  and  that, 
whether  he  procures  an  actionable  wrong  or  a  breach 
of  contract/ 

The  principle  laid  down  in  Lumley  v.  Gye  was 
confirmed  by  the  Court  of  Appeal  in  Bowen  v.  Hall*- 
though  in  that  case  too  the  decision  was  not  unani- 
mous— and  ultimately  received  the  approval  of  the 
House  of  Lords  in  Quinn  v.  Leathern*  The  whole  law 
on  this  subject  is  to  be  found  in  these  decisions  as 
well  as  in  the  decision  in  Allen  v.  Flood*  'The  prin- 
ciples may  be  briefly  indicated  as  follows  :— 

An  Act  which  is  in  itself  lawful  cannot  be  con- 
verted into  an  unlawful  act  so  as  to  render  the  doer 
of  the  act  liable  to  a  civil  action  merely  because  it  is 
done  with  a  bad  motive.  The  facts  in  Allen  v.  Flood 
were  these :  The  Glengall  Iron  Co.  employed  the 
plaintiffs,  who  were  not  members  of  the  trades  union, 
by  the  day.  The  defendants  (who  were  union  nien) 
informed  the  Glengall  Iron  Co.  of  the  determination 
of  their  union  men  to  leave  the  service  of  that  Co. 
unless  the  plaintiffs,  non-union  men,  were  discharged  ; 
and  by  that  means  procured  the  Glengall  Iron  Co. 
to  refuse  at  the  end  of  a  certain  day  to  employ  the 
plaintiffs,  the  refusal  not  being  a  breach  of  contract  or 
other  legal  duty  by  the  company.  The  employment 


adequate  justification  for  procuring  a  breach  of  it.  The  term  '  malice' 
appears  to  be  used  in  this  connection  in  one  of  its  weakest  senses.  See 
Bigelow  on  Torts,  also  Kenny's  cases,  p.  523. 

l  Per  Erie.  J.,  in  Lumley  v.  Gye  2  E.  and  B.  216  at  p.  233 ;  s.c.  118  Eng. 
Rep.  749.  Note,  however,  that  Coleridge,  J.,  delivered  an  elaborate  dis- 
sentient opinion. 

*  I/.R.  6Q.B.D.  333.  3  k.R.  1901  A.C.  495.  *  (1898)  A.C.  i. 


391 

would  have  continued  but  for  what  the  defendants 
did,  and  the  plaintiffs  suffered  damage.  It  was  held  that 
the  defendants  were  not  liable  whatever  might  have 
been  their  motive.  They  had  a  legal  right  to  procure 
the  Glengall  Iron  Company  in  the  way  they  did, 
and  not  by  use  of  any  wrongful  means,  to  refuse  to 
renew  the  employment  of  the  plaintiffs,  and  malice  on 
their  (the  defendants')  part  towards  the  plaintiffs 
could  not  convert  that  right  into  a  legal  wrong.  "  A 
man  has  the  legal  right  to  say  what  he  pleases,  to 
induce,  to  advise,  to  exhort,  to  command,  provided  he 
does  not  slander  or  deceive  or  commit  any  other  of 
the  wrongs  known  to  the  law  of  which  speech  may  be 
the  medium."  ' 

Acts  which  are  done  by  A  and  B  who  are  acting 
in  concert,  solely  with  the  lawful  object  of  preserving 
and  developing  their  trade  and  increasing  their  pro- 
fits, and  which  do  not  necessitate  the  employment  of 
any  means  in  themselves  unlawful,  are  not  actionable 
even  though  these  acts  cause  damage  to  C  (Moghul 
Steamship  Co.  v.  Mcgregor  Gow,  &  Co.)*  The  facts  in 
that  case  were  thes^ :  Both  the  plaintiffs  and  defend- 
ants were  shipowners  engaged  in  the  tea- carry  ing 
trade.  The  defendants  had  offered  a  special  discount 
to  those  exporters  who  employed  them  alone  and  had 
organized  a  conspiracy  for  underbidding  the  plain- 
tiffs, even  by  accepting  unremunerative  rates  of 
freight.  It  was  held  by  the  House  of  Lords,  affirming 
the  decision  of  the  Court  of  Appeal  that  the  plaintiffs 
had  no  cause  of  action.  For  the  right  of  competition 
exists  even  when  it  is  conducted  by  means  so  unusual 
as  to  render  it  unfair,  at  any  rate  if  the  ultimate 
motive  is  that  of  benefiting  oneself  and  not  that  of 
injuring  the  rival. 

In  Q-uinn  v.  Leathern  the  defendants  were  officers 
of  a  trade-union  of  butchers.  The  members  of  the 
union  adopted  a  rule  that  they  would  not  work  with 
non-union  men,  or  cut  up  meat  coming  from  a  place 
where  non-union  men  were  employed.  The  plaintiff 
was  a  butcher,  not  a  member  of  the  union,  and  had 
men  in  his  employ  who  were  not  union  men.  By 


1  Allen  v.  Flood  ( 1898  )  A.C.  i  per  Lord  Herschell  at  p.  138. 

2  (i889)23Q.B.D.  598;  (1892)  A.C.  25. 


392 

invitation  of  the  secretary  of  the  union  he  attended  a 
meeting  of  the  union,  the  defendants  also  being 
present,  and  offered  to  pay  whatever  was  required  to 
enable  his  men  to  become  members  of  the  union ;  but 
the  offer  was  rejected  and  a  vote  passed  to  call  out 
the  plaintiff's  men.  A  threat  was  also  held  out,  and 
afterwards  carried  into  effect,  to  call  out  the  men  of  a 
customer  of  the  plaintiff  who  supplied  the  plaintiff 
with  meat ;  the  result  being  that  though  the  customer 
wished  to  continue  to  supply  the  plaintiff  he  stopped 
doing  so.  tf  Black  Lists  "  were  also  circulated  through- 
out the  plaintiff's  neighbourhood  by  several  of  the 
defendants  holding  up  to  odium  the  plaintiff  and 
those  who  dealt  with  him.  The  plaintiff  suffered 
damage  from  all  this.  It  was  held  that  the  defend- 
ants were  liable.  "The  defendants  were  doing  a 
great  deal  more  than  exercising  their  own  rights  ; 
they  were  dictating  to  the  plaintiff  and  his  customers 
and  servants  what  they  were  to  do.  The  defendants 
were  violating  their  duty  to  the  plaintiff  and  his 
customers  and  servants,  which  was  to  leave  them  in 
the  undisturbed  enjoyment  of  their  liberty  of  action.1 
It  has  also  been  held  *  that  the  violation  of  a  legal 
right  committed  knowingly  is  a  cause  of  action  and  it 
is  a  violation  of  legal  right  to  interfere  with  contractual 
relations  recognised  by  law  if  there  be  no  sufficient 
justification  for  interference. 

A  combination  of  A  and  B,  to  do  damage  to  C, 
in  his  trade  and  by  means  of  coercion  or  intimidation 
to  induce  C's  customers  or  servants  against  their  will 
to  break  their  contract  with  him,  or  not  to  deal  with 
him,  or  not  to  continue  in  his  employment,  is  action- 
able provided  it  causes  damage  to  C. 

If  the  inducing  is  done  by  a  combination  of 
many  persons  a  continuous  manifestation  of  ill-will 
by  them,  even  when  it  involves  no  fear  of  physical 
violence  (e.g.  mere  boycotting),  may  become  an 
annoyance  so  serious  as  to  constitute  an  unlawful 
means  of  inducement.8 


1  Quinn  v.  Leathern  (1901)  A.C.  495.  per  Lord  Lindley  at  p.  537. 

*  Glamorganshire  Coal  Co.,  Ltd.  v.  South  Wales  Miners'  Federation  L.! 
(1903)  2  K.B.  545.  See  also  Lumley  v.  Gye  and  Bowen  v.  Hall  (supra). 

3  Gegelahn  v.  Guiitner  and  others  167  Mass  92.  Gregory  v.  Duke  of  Brw 
wick  and  H.  W.  Vallance  i  C.  and  K.  24. 


393 

I  have  endeavoured  to  give  a  brief  survey  of  the 
law  as  to  civil  liability  in  regard  to  conspiracies  by  a 
reference  to  the  leading  cases  only.  There  are 
numerous  other  cases  '  in  which  trade-union  disputes 
in  some  shape  or  form  came  up  for  disposal  in  connec- 
tion with  allegations  of  conspiracy  or  combination. 
It  is  scarcely  possible  within  the  scope  of  this  lecture 
to  deal  with  the  details  of  all  these  cases.  One  point, 
however,  should  be  noted  that  the  effect  of  such  cases  as 
Quinn  v.  Leathern  is  a  great  deal  counteracted  and  cut 
down  by  the  Trade  Disputes  Act,  igo6.2  In  addition 
to  providing  (sec.  4)  that  no  action  for  a  tort  of  any 
kind  shall  lie  against  a  trade  union  so  as  to  charge 
the  union  funds,  the  Act  provides  (sec.  3)  that  (<  An 
act  done  by  a  person  in  contemplation  or  furtherance 
of  a  trade  dispute  shall  not  be  actionable  on  the 
ground  only  that  it  induces  some  other  person  to 
break  a  contract  of  employment  or  that  it  is  an 
interference  with  the  trade,  business,  or  employment  of 
some  other  person,  or  with  the  right  of  some  other 
person  to  dispose  of  his  capital  or  his  labour  as  he 
wills."  The  expression  'trade  dispute'  means  (sec. 
5,  sub-sec.  3)  an}^  dispute  between  employers  and 
workmen,  or  between  workmen  and  workmen,  which 
is  connected  with  the  employment  or  non- employ- 
ment, or  the  terms  of  the  employment  or  with  the 
conditions  of  labour  of  any  person,  and  the  expression 
f  workmen  '  means  all  persons  employed  in  trade  or 
industry,  whether  or  not  in  the  employment  of  the 
employer  with  whom  a  trade  dispute  arises.  The 
change  introduced  by  the  Trade  Disputes  Act  of  1906, 
therefore,  is  that  it  is  now  no  longer  necessary  to 
examine  the  motive  with  which  the  Act  is  committed 
provided  that  it  is  done  "in  contemplation  and 
furtherance  of  a  trade  dispute,"  and  the  means  adopt- 
ed are  not  unlawful.  This  has  been  very  clearly 
explained  by  Lord  Loreburn,  L.C.,  in  Conway  v.  Wade. 
"It  is  necessary"  he  observes,  "  to  consider  how  the 


1  See  for  instance  A.  G.  of  Australia  v.   Adelaide  Steamship  Co.  (1909) 
L.T.  258  P.C.  ;    South  Wales  Miners'1  Federation  v.  Glamorgan  Coal  Co.  Ltd. 
(1905)  A.C.  239;  Giblan  v.  National  Amalgamated  Labourers'"  Union  of  Great 
Britain  and  Ireland  (1903)  2  K.B.  600  C.  A.  ;  Smithies  v.  National  Association 
of  Operative   Plasterers   (1909)    i  K.B.  310  C.A.     Denaby  and   Cadeby  Main 
Collieries  Ltd.  v.  Yorkshire  Miners  Association  (1906)  A.C.  384. 

2  6  Ed.  VII  C.  47. 

50 


394 


law  stood  before  1906     ....     If  inducement  was 
accompanied  by  violence  or  threat  (always  remember- 
ing that  a  warning  is  one  thing  and  a  threat  is  another) 
there  was  a  good  ground  of  action.     I  next  suppose 
there  was  no  violence  and   no  threat,   and  yet  the 
inducement  involved  a  breach  of  contract.    There  also 
it  was  established,  after  a  long  controversy  beginning 
with  Lumley  v.  Gye  in  1853,  that  an  action  could  be 
maintained,  unless  at  all  events  some  sufficient  justifica- 
tion could  be  made  good,"     Hi?  Lordship  then  quotes 
section  3  of  the  Trade  Disputes  Act  of  1906  and  goes 
on  to  say  "  L,et  me  see  how  this  alters  the  pre-existing 
law.     It  is  clear  that  if  there  be  threats  or  violence, 
this  section  gives  no  protection,  for  there  is  some  ground 
of  action  besides  the  ground   that   c  it  induces  some 
person  to  break  a  contract/  and  so  forth.     So  far 
there  is  no  change.     If  the  inducement  be  to  break 
a  contract  without  threat  or  violence,  then  this  is  no 
longer  actionable,  provided  always  that  it  was  done  cin 
contemplation  or  futherance  of  trade  dispute'      .     . 
.     In  this  respect  there  is  a  change.     If  there  be  no 
threat  or  violence,  and  no  breach  of  contract,  and  yet 
there  is  '  an  interference  with  the  trade,  business,  or 
employment  of  some  other  person,  or  with  the  right 
of  some  other  person  to  dispose  of  his  capital  or  his 
labour  as  he  wills,"  there  again   there  is  perhaps  a 
change.     It  is  not  to  be  actionable,  provided  it  was 
done  '  in  contemplation  or  furtherance  of  a  trade  dis- 
pute/   So  there  is  no  longer  any  question  in  such  cases, 
whether  there  was  '  sufficient  justification '  or  not.   The 
condition  contained  in  these  words  as  to  trade  dis- 
pute is  made  sufficient."1 

The  law  on  this  branch  of  the  subject  of  mono- 
polies has  not  developed  in  India  owing  to  the  fact 
that  trade  unions  hardly  exist  in  the  country  and 
cases  of  conflict  between  workmen  and  employers 
through  the  operations  of  trade-union  rules,  or  other- 
wise, are  practically  unknown.  A  trade-union  has 
been  defined  as  fc  A  combination  of  workmen  of  the 
same  trade  or  of  .several  allied  trades  for  the  purpose 
of  securing  to  each  member  by  united  action  the  con- 
ditions most  favourable  for  labour,  an  association  of 


1  (1909)  A.C.  506  at  pp.  510,  511  and  512. 


395 

workmen  formed  principally  for  the  purposes  of 
regulating  the  prices  and  the  hours  of  labour  and,  in 
many  cases,  the  number  of  men  engaged  by  an 
employer,  the  number  of  apprentices  which  may  be 
found  in  proportion  to  the  journeymen  employed  by  a 
master  and  the  like.  As  accessories  these  unions  may 
collect  funds  for  benefit  societies,  insurance  of  tools, 
libraries,  and  reading  rooms,  but  their  fund  to  which 
every  member  must  regularly  contribute  a  stated  sum, 
is  principally  reserved  for  enabling  the  men  to  resist 
by  strikes  and  otherwise  such  action  on  the  part  of  the 
employers  as  would  tend  to  lower  the  rate  of  wages 
or  lengthen  the  hours  of  labour ."  l 

From  the  vocabulary  of  trade-unions,  several 
words  have  become  current  in  ordinary  language. 
Some  only  of  these  such  as  the  words  Boycott,  Picket- 
ting,  Strike,  etc.,  have  become  familiar  in  this  country. 
But  few,  if  any,  cases  of  importance  on  the  subject 
have  been  decided  by  the  courts  here.2  And  those  that 
have  come  to  the  notice  of  the  court  hardly  turn  on  any 
consideration  of  the  principles  of  boycott  or  picketting. 
It  is  useful,  however,  in  view  of  the  questions  that 
underlie  these  terms  to  state  in  brief  what  constitutes 
the  acts  represented  by  them.  ( Boycotting  '  has  been 
defined  as  follows  :  "  A  combination  between  persons 
to  suspend  or  discontinue  dealings  or  patronage,  with 
another  person  or  persons  because  of  refusal  to  comply 
with  a  request  made  of  him  or  them.  The  purpose  is 
to  constrain  acquiescence  or  to  force  submission  on  the 
part  of  the  individual  who  by  non-compliance  with  the 
demand  has  rendered  himself  obnoxious  to  the  imme- 
diate parties,  and  perhaps  to  their  personal  and  frater- 
nal associates.  The  persons  directly  so  confederating 
have  hitherto  as  a  class  been  employees  as  against 
either  their  own  employer  or  the  employer  of  others  in 
a  like  business  or  else  of  retail  dealers  as  against  a 
particular  manufacturer  or  wholesale  dealer.  The 
means  employed  have  been  the  withdrawal  of  custom 
and  good-will  in  business  of  the  immediate  parties  and 
of  such  others  as  they  could  influence.  The  word 


'   Webster's  Universal  Diet. 

*  See  for  instance  Raikumar  v.  Emperor  11  C.W  N.  28.  The  decision, 
however,  in  these  cases  hardly  rest  on  the  question  of  boycott  or  picketting, 
as  such.  The  significance  of  these  cases  is  more  political  than  legal. 


396 

may  refer  to  the  fact  of  combining  or  to  the  resolution 
as  executed.  The  practice  takes  its  name  from  one 
Boycott,  an  agent  for  L,ord  Erne  on  certain  estates  in 
the  western  part  of  Ireland.  Having  lost  favour  with 
the  tenant  from  evictions  and  other  harsh  treatment 
they  agreed  not  to  work  for  him,  and  .the  tradesmen 
of  the  community  not  to  deal  with  him.1 

A  strike  is  briefly  defined  as  "  a  simultaneous 
cessation  of  work  on  the  part  of  the  workmen,  and 
its  legality  or  illegality  must  depend  on  the  means  by 
which  it  is  enforced  and  on  its  objects."  Another 
definition  is  this:  A  strike  is  a  combination  among 
labourers,  those  employed  by  others,  to  compel  an 
increase  of  wages,  a  change  in  the  hours  of  labour,  some 
change  in  the  mode  or  manner  of  conducting  the 
business  of  the  principal,  or  to  enforce  some  particular 
policy  in  the  character  or  number  of  the  men  employed 
or  the  like." 

There  is  a  distinction  between  strikes  and  boy- 
cotts. The  latter  though  unaccompanied  by  violence 
or  intimidation  have  been  generally  pronounced  as 
unlawful  by  the  courts  of  the  United  States  and  of 
England.  Strikes,  however,  are  not  necessarily  unlaw- 
ful, the  right  of  employees  to  combine  and  peaceably 
to  leave  the  employ  of  their  employer  because  any  of 
the  terms  of  their  employment  are  unsatisfactory 
being  generally  recognized. 'l 

,  'Picketting'  is  derived  from  the  word  'picket. 
'  Picket '  means  a  body  of  men  belonging  to  a  trade- 
union  sent  to  watch  and  annoy  men  working  in  a 
shop  not  belonging  to  the  Union,  or  against  which  a 
strike  is  in  progress.3  Picketting  may,  however,  mean 
simply  the  stationing  of  men  for  observation.  If  their 
duty  ends  there  and,  in  so  watching  and  observing 
the  doings  of  others,  they  do  not  cause  any  physical 
annoyance  or  molestation  to  any  one,  it  can  hardly 
be  said  that  such  an  act  is  in  itself  unlawful.  But 
when  men  are  stationed  for  exercising  threat,  coercion, 
or  intimidation  and  when  they  endeavour  by  force  to 
make  others  desist  from  going  to  the  picketted  place 
to  do  business  or  work  or  to  seek  work  therein  or  in 


1  Anderson's  '  Diet,  of  Law.  ' 

2  See  Joyce  on  Monopolies,  pp.  51-2. 
<*  Century  Dictionary. 


397 

some  other  way  to  hamper,  hinder  or  harass  the  free 
despatch  of  business  by  the  employer,  such  conduct 
on  their  part  clearly  becomes  unlawful.1 


l  Mills    v.    United    States     Printing    Co.  91  N.Y.    supp.   185  ;  99  App. 
Div.  605 — quoted  in  Joyce  on  Monopolies. 


LECTURE   XI. 
CAPITALISTIC  MONOPOLIES. 

Trusts  and  com-  "  Any  sort    of    capitalistic    combination,"  says 

the  great  legal  historian  of  modern  times  l  is 
popularly  called  a  '  Trust/  if  only  it  is  powerful 
enough/'  This  is  putting  the  thing  in  the  proverbial 
nutshell,  and  is  only  possible  by  presupposing  in  the 
reader  a  fairly  wide  acquaintance  with  the  different 
varieties  of  monopolistic  combination.  Indeed,  com- 
binations appear  in  such  protean  varieties  that  it  is 
essential,  first,  to  study  their  characteristics  and  the 
conditions  of  their  growth,  before  we  can  take  it  upon 
ourselves  to  criticise  their  merits  and  demerits,  or  the 
law  and  legislation  applicable  to  them.  A  detailed 
account  of  their  origin,  growth  and  present  position  is 
obviously  beyond  the  scope  of  these  lectures.  The 
United  States  have  been  properly  called  the  native 
home  of  Trusts  and  monopolistic  combinations.  In 
Germany,  Austria  and  some  other  parts  of  the  Con- 
tinent, combinations  of  a  sort  have  flourished,  but 
they  have  assumed  more  or  less  a  particular  form, 
with  its  own  characteristics,  which  are  conveyed  by 
the  generic  term  Kartell  applied  to  them  all.  In 
England  Trusts,  in  the  strict  American  sense,  are 
not  prominent  for  reasons  which  I  shall  indicate  later 
on.  Concentration  of  capital  in  large  businesses  and 
combination  of  businesses  for  purposes  of  economy 
and  efficiency  do  exist.  But  these  facts  do  not 
necessarily  imply  monopoly  in  the  odious  sense  con- 
noted by  the  word  Trust  in  the  legal  phraseology 
of  the  United  States. 

To  begin  with,  one  has  to  dismiss  from  one's 
mind  the  old  signification  of  the  word  Trust,  A 
Trust,  as  ordinarily  understood,  is  a  respectable 
institution,  and  imports  an  arrangement  by  which 
property  is  handed  to  or  vested  in  a  person  in  the 
trust  or  confidence  that  he  will  use  or  dispose  of  it  for 

1  Prof.  F.  W.    Maitland.     See   'Collected     Papers,'   Vol.     Ill,    Article, 
'  Trust  and  Corporation.' 


399 

the  benefit  of  another.  A  Trust,  as  understood  in 
the  special  sense  in  the  United  States,  has  an  evil 
savour  about  it,  and,  as  will  appear  presently,  is 
associated  with  the  ideas  of  fraud,  oppression  and 
illegality,  of  unholy  alliance  with  railways,  of  the 
stifling  of  competition  and  starving  of  industries,  of 
collossal  profits  and  iniquitous  self-agrandisement  on 
the  part  of  Trust  magnates.  Public  feeling  has 
run  very  high  at  times  against  these  industrial  mam- 
moths, and  Committees  of  Investigation  have  been 
appointed  times  without  number  to  inquire  into  the 
modus  operandi  of  Trusts  with  the  result  that  they 
have  been  characterised  by  many  opprobrious  epithets. 
Law  and  legislation  have  also  strenuously  endeavoured 
to  strangle  the  giants  which  the  industrial  conditions 
of  the  country  have  brought  into  being.  Nevertheless, 
they  continue  in  unabated  vigour.  This  leads  us  to 
consider  the  conditions  which  favour  the  growth  of 
Trusts.  And,  first,  as  to  monopolistic  combinations  in 
general. 

One  of  the  prime  requisites  is  the  concentration  Conditions  favour- 


of  raw  material  within   a  defined  area,  such   as  would  1  ' 


afford  opportunities  to  a  firm  to  establish  complete 

control  over  the  area  in  question    and  exclude    new  Concentratk>n  of 

,.,  ,  .  .   H.  -,i        ,1  ,-  raw  material  within 

competitors   from   interfering   with    the    operations,  a  defined  area. 

Iron    ores   in   the  Lake   Superior   region,  oil  ores  in 

Pennsylvania,1    diamond   ores  in  the   Transvaal  and 

potash    in   Germany    are   illustrations   of   the   great 

possibilities  for  a  monopolistic  formation  in  the  region 

where  nature  offers  her   bounties  in  the  shape  of  con- 

centrated raw  materials.     Specially,  where  the  parti- 

cular raw  material  in  question  is  only  found  in  one 

country,  or  where,  although  available  elsewhere   the 

expense  of  procuring  it  becomes  prohibitive  owing  to 

freight  or  other  charges,  foreign  competition  is  shut 

out  and  the  monopoly  is  established  on  a  secure  foot- 

ing.    This  leads  us  to  the  next  condition,  viz.  absence 

of  foreign   competition.    It   may   arise  from  natural 

advantages  such  as   those  abovementioned,  or  from 

artificial   manipulation  such  as  by  means  of  a  pro- 

tective  tariff.     This  is    why  it    has   been  said  that  Protective  tanft. 

i  The    Feudatory  State  of  Mayurbhanj  and    Burma   present  analogous 
cases  in  India  in  regard  to  iron  and  oil  respectively. 


400 


Preferential  rates 
of  freight. 


Internal  advan- 
tages. 


Social  and 
temperamental 
ondit  ons 
a  vourable  to 
growth  of 
monopolies 
in  America. 


''Tariff  is  the  mother  of  Trusts."  l  Under  this  head 
comes  also  another  potent  circumstance  which  has 
been  the  making  of  many  a  monopoly — I  refer  to 
secret  preferential  rates  of  freight  and  other  discri- 
minations which,  together  with  the  subject  of  tariff, 
will  engage  our  attention  later  on.  The  notorious 
case  of  the  Standard  Oil  Company  is  an  instance  of 
what  protective  tariff  and  preferential  rates  of  freight 
can  achieve.  Another  powerful  factor  in  the  growth 
and  development  of  monopolies  consists  in  the 
character  and  working  of  the  business  itself  and 
may,  therefore,  be  called  ( internal.'  Thus  the  trade 
may  be  one  in  which  each  separate  firm  requires  a 
large  amount  of  fixed  capital,  and  the  expenses  of 
production  are  heavy.  Under  such  circumstances, 
new  rivals  are  not  likely  to  appear,  and  there  is  a 
tendency  on  the  part  of  the  long-established  big 
firms  to  come  to  an  agreement  and  join  hands  with 
the  new,  for  purposes  of  regulation  of  output  and 
prices  and  securing  efficiency  and  economy.  In  some 
cases,  again,  the  success  of  a  monopoly  has  depended 
upon  yet  another  condition  and  that  is,  the  possession 
of  specially  effective  patents,  for  example,  in  the  case 
of  Mr.  Carnegie  in  the  iron  and  steel  trade  and  of  Mr. 
Havemeyer  in  sugar- refining.2 

In  considering  the  course  which  the  development 
of  monopolies  has  taken  in  America  and  the  character- 
istic forms  they  have  assumed  there,  it  is  necessary  to 
study,  in  addition  to  the  causes  abovementioned,  the 
peculiar  social  and  industrial  conditions  of  that  coun- 
try. There  were  forces  at  work  in  the  United  States, 
which  were  absent  in  any  other  part  of  the  world,  and 
it  is  hardly  too  much  to  say  that  the  social  and  tem- 
peramental conditions  of  the  people  formed  the  main 
nucleus  of  these  forces.  Consider  for  a  moment  the 
effect  of  immigration.  Never  before  in  the  history 
of  the  world  has  immigration  played  such  a  conspicu- 
ous part  in  shaping  the  destinies  of  a  country  as  in 
America.  Who  ever  could  have  thought  that  the 
refuge  of  the  Pilgrim  Fathers  would  become  the  veri- 


1  Mr.  Havemeyer. 

2  vSo  also  in  the  case  cf  the  Cotton-seed  Oil  Trust  the  success  was  largely 
based   upon   the   ownership   of   a  patent  process    for  cleaning   cotton-seed 
preparatory  to  crushing. 


401 

table  Vulcan's  workshop  for  all  the  world,  or  that  the 
refugees  from  intolerant  states  in  Europe  would 
within  a  short  space  of  time  develop  into  a  nation  of 
intrepid  organisers,  fortune-builders  and  nation-build- 
ers, such  as  the  world  had  never  seen  ?  Yet  so  it 
has  been.  After  the  year  1840,  there  was  a  regular 
stream  of  immigration  from  different  parts  of  Europe 
to  America.  The  devastating  famine  in  Ireland,  the 
oppression  of  reactionary  Governments  in  Europe,  the 
dearth  of  openings  for  talent  in  other  countries  of  the 
West, — all  these  contributed  to  the  great  consumma- 
tion, and  bands  of  intrepid  workers  and  ardent  spirits 
betook  themselves  to  the  continent  across  the  At- 
lantic full  of  enthusiasm  and  faith  for  the  future. 
The  result  was  an  obvious  accession  of  strength  and 
working  power.  In  1800  the  population  of  the  United 
States  was  only  five  millions.  In  the  year  1860  it 
was  over  thirty-one  millions.  These  ardent  spirits 
threw  themselves  into  a  life  of  strenuous  activity 
which  began  from  the  establishment  of  Independence, 
and  steadily  went  on  expanding  thereafter.  The 
population  going  up  apace  at  an  enormous  rate 
gradually  pressed  inland  till  they  penetrated  across 
the  Continent  to  California.  "  Before  1860  twenty 
new  States  were  added  to  the  Union  of  the  thirteen 
(  original'  States.  From  1830  to  1860  the  marvellous 
railway  development  (twenty- three  miles  in  1830,  and 
thirty  thousand  miles  in  1860)  gave  fresh  impetus  to 
this  expansion.  Only  a  few  years  were  required  to 
transform  frontier  forts  into  huge  cities,  and  riverside 
hamlets  into  flourishing  manufacturing  towns.  The 
pioneers  noted  and  adopted  every  new  and  labour- 
saving  invention,  specially  the  machines  which  were 
then  beginning  to  revolutionise  agriculture,  and  the 
States  soon  took  their  place  among  the  great  wheat- 
growing  countries  of  the  world."  l  Then  followed 
the  Anti-slave  War  (1861-1865)  and  during  the  period 
of  the  war  and  after,  marked  changes  took  place  in 
the  conditions  of  production.  Railway  extensions 
became  absolutely  imperative  for  the  purposes  of  the 
war,  and  it  was  found  expedient  to  offer  every  induce- 
ment to  railroad  corporations  to  start  upon  new  ven- 

l  '  The  Story  of  Trusts'  by  M.  E.  Hirst,  p.  55. 
51 


402 

tares.  To  the  Union  Pacific,  for  instance,  and  to  the 
Northern  Pacific  exceptionally  generous  grants  in 
lands  and  money  were  made  for  encouraging  exten- 
sions. Improvements  in  transport  made  rapid  strides. 
The  tariff  too  was  raised  to  an  average  of  nearly  fifty 
per  cent.,  thereby  preventing  import  of  raw  materials 
or  finished  products  from  foreign  countries  and 
favouring  articles  of  home  manufacture.  Add  to  all 
this  the  discoveries  of  phenomenal  quantities  of  rich 
ores  within  defined  areas,  such  as  gold  in  California, 
iron  near  the  Lake  Superior,  anthracite  coal  in  Penn- 
sylvania petroleum  in  Ohio,  and  other  mineral  ores 
of  various  descriptions.  With  the  growth  of  large 
cities  there  was  a  parallel  growth  of  large  industrial 
centres,  created  and  fashioned  by  a  class  of  shrewed 
financiers  and  business-organisers  or  '  Undertakers/ 
the  like  of  whom  the  old  world  had  not  seen.  Obvi- 
ously, the  rise  of  this  class  of  individuals  was  as  much 
an  effect  of  the  peculiar  social  and  economic  causes  at 
work,  as  the  rise  of  the  industries  themselves.  To  the 
careful  student  of  American  economic  history  the 
( Railroad  King  '  or  the  '  Oil  Dictator '  does  not 
appear  as  accidents,  but  as  part  of  the  natural  evolu- 
tion of  American  genius  acting  and  reacting  on  the 
environment-  of  the  times  in  which  they  have  lived. 
It  was  just  the  psychological  moment  for  money 
making  and  fortune  building,  for  industrial  and  finan- 
cial monopoly.  A  vast  and  ever  increasing  population, 
an  almost  inexhaustible  store  of  minerals  and  other 
raw  materials,  an  indulgent  legislature  ready  to  offer 
unlimited  protection  by  means  of  tariffs,  on  the  one 
hand,  and  bounties  on  the  other,  an  ever-expanding 
system  of  transport  by  sea  and  land,  an  eager  and 
sagacious  band  of  business  engineers  and  entrepeneurs 
—what  more  could  one  ask  for  ?  Never  in  history  were 
the  economic  conditions  more  favourable  to  ' '  stupend- 
ous production  and  colossal  profits."  Thus  the  era 
came  to  be  marked  by  large  accumulations  of  fortune 
in  the  hands  of  a  few  individuals  gifted  with  the 
requisite  training  and  business  instinct.1  But  if  the 

1  Cf.  the  following  "  All  over  the  country  there  is  a  peculiar  tendency 
to  generalise  and  to  jump  at  far-reaching  conclusions  ....  It  is  the 
necessary  counter-part  to  the  American  spirit  of  specialisation  and  adaptability 
to  given  circumstances.  Therefore,  the  general  belief  was  that  the  true  publ' 


403 

root  cause  of  monopolies  in  America  is  to  be  found  in 
the  social,  economic  and  industrial  evolution,  briefly 
indicated  above,  it  is  also  to  be  found  in  the  tempera- 
ment and  character  of  the  people.  The  mental  consti- 
tution of  the  American  is  intensely  individualistic. 
True  to  the  traditions  of  the  Anglo-Saxon  race,  and 
true  to  the  memory  of  his  Puritan  and  revolutionary 
ancestors,  the  American  means  to  carve  out  his  career 
for  himself  free  from  interference,  or  control,  from 
without.  In  industry  as  much  as  in  everything  else, 
he  follows  the  principle  of  laissez  jane  and  demands 
that  the  business  man  or  the  industrial  magnate, 
whoever  it  may  be,  shall  be  "  let  alone"  so  that  he 
may  shape  his  shop  and  make  his  money  as  best  he 
chooses.  It  follows  that  in  law  and  legislation  the 
same  principle  must  prevail.  And  so  it  did,  to  begin 
with  The  constitution  of  the  United  States  was 
drawn  up  under  the  influence  of  the  physiocratic  doc- 
trine of  natural  rights  and  the  principle  of  laissez  faire. 
Anything  tending  to  curb  or  cripple  the  equal  personal 
right  of  every  citizen,  or  to  interfere  with  the  free 
transaction  of  lawful  private  business  was  therefore 
prohibited  as  being  '  against  public  policy.'  The  first 
rulers  of  the  United  States  were  saturated  with  this 
idea  and  the  institutions  which  they  shaped  and 
moulded  bear  its  stamp  to  this  day.  <(  A  belief  in  the 
blessings  of  a  minimum  of  government/'  says  Ernst 
von  Halle,  "and  a  disinclination  for  the  interference 
of  society  with  the  sphere  of  the  individual,  was  more 
widely  diffused  than  any  other  country.  To  forbid 
as  little  as  possible  and  to  regard  what  was  not 
forbidden  as  silently  permitted,  to  consider  a  right 
once  granted  as  irrevocable,  these  were  the  principles 
on  which  public  opinion  was  built.  The  device  of  free 
competition  partook,  in  the  eyes  of  the  people,  of  the 
character  of  an  eternal  holy  truth,  remote  from  the 
influence  of  time  and  economic  conditions.  Whoever 
disregarded  it  was  eo  ipso  wrong ;  his  actions  were 
'against  public  policy.'  "  l 

welfare  depends  upon  a  continuous  increase  of  production  and  upon  a  utili* 
sation  of  all  natural  resources  to  the  utmost  of  technical  possibility."  Ernst 
von  Hall's  '  Trusts  or  Industrial  Combinations  and  Coalitions  in  the  United 
States,'  pp.  4-5. 

1  Ernst  von  Halle's  *  Trusts  or  Industrial  Combinations  and  Coalitions 
in  the  United  States,  pp.  2-3. 


404 


Attitude  of  the 
courts  towards 
Trusts  and 
Combinations. 


In  England. 


Thus  it  came  about  that,  with  the  appearance  of 
monopolies  and  Trusts'  in  America,  there  arose  a 
strong  feeling  that  they  were  contrary  to  the  accepted 
ideal  of  equal  personal  rights  for  every  one.  The 
common  law  of  England  and  the  statute  law  of  the 
eighteenth  century  abhorred  monopolies  of  every 
description,  Any  agreement  to  control  or  restrict 
the  production  and  sale  of  goods,  or  to  enhance  prices, 
was  against  the  spirit  of  the  law.  A  similar  principle 
governed  the  American  Constitution  and  the  Ameri- 
can rulings.  Later,  however,  a  difference  grew  up 
between  the  English  and  the  American  views.  In 
i844l  Parliament  definitely  abolished  all  restrictions 
upon  forestalling,  enhancing,  regrating  and  engrossing, 
thereby  recognising  the  altered  industrial  conditions 
of  society.  Looking  to  case  law  too,  it  appears  that 
the  English  courts  of  justice  have  revised  their  viewrs 
in  the  light  of  the  palpable  change  which  has  come 
over  industrial  conditions  and  taken  up  a  compara- 
tively lenient  attitude  towards  combinations.  As  re- 
gards an  agreemer/t  between  rivals  not  to  run  in  opposi- 
tion to  each  other,  but  rather  to  effect  combinations 
for  the  purpose  of  securing  greater  efficiency,  greater 
economy,  or,  in  any  event,  greater  chances  of  survival 
in  the  struggle  for  existence,  the  attitude  of  English 
decisions  can  hardly  be  said  to  be  one  of  condemna- 
tion. A  few  rulings  may  serve  as  illustrations  : 

In  Hearn  v.  Griffin  2  an  agreement  between  two 
rival  coach  proprietors  not  to  run  in  opposition  to 
each  other,  and  to  charge  the  same  prices  was  sus- 
tained by  the  King's  Bench  against  the  objection  that 
it  was  void  as  "in  restraint  of  that  competition  in 
trade  which  is  so  conducive  to  the  interest  of  the  pub- 
lic." Lord  Ellenborough  observed  :  "This  is  merely 
a  convenient  mode  of  arranging  two  concerns  which 
might  otherwise  ruin  each  other."  In  Wickens  v. 
Evans, 3  an  agreement  among  three  persons,  rivals  in 
the  business  of  selling  trunks  and  boxes  in  different 
parts  of  England,  entered  into  in  view  of  the  inconve- 
nience and  loss  resulting  from  rivalry, and  whereby  each 
should  have  the  right  of  doing  business  in  certain 


i  7  and  8  Viet.  C.  24.  2  2  Chitty  407  (1815). 

3  3  Younge  and  J.  318  (1829). 


405 

districts  to  the  exclusion  of  the  others  was  held  not 
illegal  as  'in  restraint  of  trade/  In  Shrewsbury  and 
Birmingham 'Ry.  Co.  v.  L.  and  N.  W .  Ry.  Co. l  an  agree- 
ment between  two  railway  companies  tending  to  pre- 
vent competitions  was  held  not  unlawful.  The  case 
of  Hare  v.  L.  and  N.  W.  Rly.  Co.'2  took  the  matter 
a  little  further  and  held  that  agreement  among  com- 
peting railroad  companies  for  a  division  of  profits,  in 
certain  fixed  proportions,  was  not  illegal  as  preventing 
competition,  in  the  absence  of  statutory  provisions ; 
the  court  observing,  "  it  is  a  mistaken  notion  that  the 
public  is  benefited  by  putting  two  railway  companies 
against  each  other  till  one  is  ruined,  the  result  being 
at  last  to  raise  the  fares  to  the  highest  possible 
standard."  In  Collins  v.  Locke*  an  agreement  among 
four  individuals  and  firms  carrying  on  the  business  of 
stevedores  in  the  port  of  Melbourne,  for  parcelling  out 
the  stevedoring  business,  and  preventing  competition,, 
at  least  among  themselves,  "and  it  may  be  to  keep 
up  the  price,"  was  held  not  unlawful  as  in  restraint 
of  trade,  if  carried  into  effect  by  proper  means/ 

In  the  United  States  the  tendency  of  the  legisla-  ia  the  United 
ture  as  well  as  of  the  courts  of  justice  has  been  states, 
different.  In  the  name  of  laissez  faire,  they  upheld  the 
stringent  restrictions  of  the  common  law  and  the  sta- 
tutes of  England  of  the  days  of  the  Pilgrim  Fathers, 
not  perceiving  that  in  doing  so  under  modern  condi- 
tions they  themselves  violated  the  principles  of  laissez 
faire.  For  had  not  the  combinations  or  corporations 
an  equal  right  to  be  '  let  alone  '  ?  Numerous  enact- 
ments were  passed  in  every  State  for  the  purpose  of 
checking  monopolies  which  had  the  effect  of  defeating 
or  lessening  competition,  raising  prices  and  so  forth.6 

As  in  legislature,  so  in  the  rulings  of  the  courts 
the  endeavour  throughout  seemed  to  be  to  put  new  wine 

l   16  Jurist,  311  (1851). 

•2  2  Johnston  and  Hemming,  80,  103.  Note  however  the  case  of  Moghul 
Steamship  Co.  v.  McGregor  Gow  and  others  (1892)  A.C.  25,  which  is  not  in 
point  on  this  branch  of  our  subject. 

3  (1879)4  A.  C.  674. 

*  It  was  pointed  out  in  U.S.  v.  Addyston  Pipe  and  Steel  Co.  84  Fed. 
271,  285;  29  C.C.A.  141,  154;  46  L.R.A.  122,  132  (6th  C.  1898)  that  this  deci- 
sion is  at  variance  with  many  in  America.  (See  post). 

&    The  following  from  the  constitution  of  Georgia,  which  was  the  firs 
provision  in  this  direction    will  serve  as  an  illustration :  "  The  general  as- 
sembly shall  have  no  power  to  authorise  any  corporation  to  make  any  con- 
tract or  agreement  whatever  with  any  other  corporations  which  may  have 


406 

into  old  bottles,  to  regulate  new  world  conditions  by 
old  world  methods  and  principles.  It  was  laid  down, 
that  "  a  monopoly  in  the  modern  sense  is  created 
when,  as  a  result  of  efforts  to  that  end,  previously 
competing  businesses  are  so  concentrated  in  the  hands 
of  a  single  person  or  corporation,  or  a  few  persons  or 
corporations  acting  together,  that  they  have  power 
to  practically  control  the  prices  of  commodities  and 
thus  to  practically  suppress  competition.'  Again 
"  any  combination  the  tendency  of  which  is  to  pre- 
vent competition  in  its  broad  and  general  sense,  and 
to  control,  and  thus  at  will  enhance  prices,  to  the 
detriment  of  the  public,  is  a  legal  monopoly." 

We  find,  however,  a  broader  and  more  rational 
view  taken  in  other  cases,  specially  some  later  deci- 
sions,— the  view,  namely,  that  although  a  monopoly 
may  deprive  the  community  of  the  '  benefit '  of  free 
competition  and  place  the  control  of  production  in 
the  hands  of  a  few,  still  it  does  not  follow  necessarily 
that  "  every  contract  or  combination  which  in  any 
degree  tends  to  restrict  competition  is  illegal.  So 
strict  a  rule  would  invalidate  innumerable  ordinary 
business  transactions,  which  are  unobjectionable  and 
necessary  in  order  that  business  shall  not  completely 
stagnate."  This  view,  it  may  be  observed,  is  in 
agreement  with  that  taken  by  Lord  Chief  Justice  Col- 
eridge in  the  famous  case  of  Moghul  Steamship  Co.  v. 
McGregor*  The  following  extract  from  his  lumi- 
nous judgment  puts  the  whole  principle  in  a  nut- shell : 
"  It  must  be  remembered  that  all  trade  is  and  must 
be,  in  a  sense,  selfish  trade  not  being  infinite,  nay,  the 
trade  of  a  particular  place  or  district  being  possibly 
very  limited  what  one  man  gains  another  loses.  In 
the  hand  to  hand  war  of  commerce,  as  in  the  conflicts 
of  public  life,  whether  at  the  Bar,  in  Parliament,  in 


the  effect,  or  be  intended  to  have  the  effect,  to  defeat  or  lessen  competition  in 
their  respective  business,  or  to  encourage  monopoly  ;  and  all  such  contract 
or  agreement  shall  be  illegal  or  void" — Ernst  von  Halle's  '  Trusts  or  In- 
dustrial Combinations  iii  the  United  States,'  p.  17. 

1  U.S.  \.   American  Tobacco  Co.  164  Feb  700,  721  ( C.C.N.Y.igoS  ).     See 
numerous  cases  cited  there. 

2  People   v.    North  Rivet-  Sugar  Refining  Co.   54  Hun.  355,  377;   3  N.Y. 
Suppl.  401,  413  ;  2  L  R.A.  33,  42  '(1889). 

<*  State  v.  Duluth  Board  of  Trade  107  Minn.  506,  544;   121  N.W.  395.    See 
also  United  States  Chemical  Co.,  v,  Provident  Chemical  Co.  64  Fed.  946,  950 
4  I/.R.  21.  Q.B.D.  552,  553. 


407 

medicine,  in  engineering  (I  give  examples  only)  men 
fight  on  without  much  thought  of  others,  except  a 
desire  to  excel  or  defeat  them.  Very  lofty  minds  like 
vSir  Philip  Sydney  with  his  cup  of  water,  will  not  stoop 
to  take  an  advantage,  if  they  think  another  wants  it 
more.  Our  age,  in  spite  of  high  authority  to  the  con- 
trary, is  not  without  its  Sir  Philip  Sydneys ;  but  these 
are  counsels  of  perfection  which  it  would  be  silly  in- 
deed to  make  the  measure  of  the  rough  business  of 
the  world  as  pursued  by  ordinary  men  of  business. 
*  *  *  *  It  follows  that  they  may,  if  they  think  fit, 
endeavour  to  induce  customers  to  deal  with  them 
exclusively  by  giving  notice  that  only  to  exclusive 
customers  will  they  give  the  advantage  of  the  profit- 
able offers."  Here  we  have  an  eloquent  application  of 
the  principle  of  laissez  faire  in  favour  of  combinations 
within  reasonable  limits,  although  it  may  tend  to  be 
antagonistic  to  free  competition. 

A  similar  view  has  been  taken  of  late  in  other 
American  cases.  Thus  it  is  said,  "Not  all  combina- 
tions are  condemned,  and  self-preservation  may  justi- 
fy prevention  of  undue  and  ruinous  competition,  when 
the  prevention  is  sought  by  fair  and  legal  methods."  ' 
As  regards  competition  being  the  'life  of  trade,'  the 
principle  has  been  considerably  whittled  down,  till  we 
find  judges  vigorously  attacking  it  as  a  fruitful  source 
of  mischief  in  practical  economics  and  legislation.  In 
the  case  of  Kellogg  v.  Larkin  *  the  court  thus  ex- 
pressed itself;  "  I  apprehend  it  is  not  true  that  competi- 
tion is  the  life  of  trade.  On  the  contrary,  that  maxim 
is  one  of  the  least  reliable  of  the  host  that  may  be 
picked  up  in  every  market-place.  It  is  in  fact  the 
shibboleth  of  mere  gambling  speculation,  and  is  hardly 
entitled  to  take  rank  as  an  axiom  in  the  jurisprudence 
of  this  country.  I  believe  universal  observation  will 
attest  that  for  the  last  quarter  of  a  century,  competi- 
tion in  trade  has  caused  more  individual  distress,  if 
not  more  public  injury,  than  the  want  of  competition. 


1  U.S.  Vinegar  Co.  v.  Fochranbach  148  N.Y.  58,64.  See  also  Oakdale 
Manuf.  Co.  v.  Gars>t  18  R.I.  484;  28  AtJ.  973  ;  23  L.R.A.  630;  49  Am-  St- 
Ref.  784:  "It  does  not  follow  that  every  combination  in  trade,  even 
though  such  combination  may  have  the  effect  to  dimini  h  the  number  of 
competitors  in  business,  is,  therefore,  illegal.  Such  a  rule  would  produce 
greater  public  injury  than  that  which  it  would  seek  to  cure." 

*  3  Pinney  (Wis),    125,  150;  56  Am.  Dec.  164,  180  (1351). 


408 


The  current  of 
decisions  not 
uniform. 


Indeed,  by  reducing  prices  below  or  raising  them 
above,  values  (as  the  nature  of  the  case  prompted) 
competition  has  done  more  to  monopolise  trade,  or  to 
secure  exclusive  advantages  in  it,  than  has  been  done 
by  contract."  ' 

It  will  appear  from  the  above  that  the  current 
of  legal  decisions  has  not  been  uniform.  Now  one 
principle,  and  now  the  other  has  formed  the  basis  for 
the  courts  to  proceed  upon.  The  authorities  against 
combination  generally  proceed  to  lay  down  that  com- 
bination of  capital  may  fulfil  the  following  objects  :  (a) 
to  control  competition,  (b)  to  control  prices,  and  (c) 
to  control  production.  But  it  is  worth  considering 
whether  a  combination  must  be  pronounced  illegal 
because  it  is  capable  of  doing -any  of  the  things  above 
mentioned.  It  would,  indeed,  be  a  dangerous  doctrine 
to  lay  down  that  a  combination  must  be  condemned 
because  of  its  supposed  tendencies  or  possibilities.' 
Whether  an  association  or  combination  does  as  a 
matter  of  fact  stifle  competition  is  a  matter  of  evidence. 
But  it  would  hardly  be  sound  to  say  that  the  position 
of  a  combination  being  such  as  to  render  it  possible 
for  it  to  do  what  is  unlawful,  or  contrary  to 
public  policy,  it  must  necessarily  be  condemned  as 
unlawful.  If  that  were  the  ground — and  in  many 
decisions  it  is  difficult  to  discover  any  other — it  would 
be  equally  justifiable  to  condemn  a  law-abiding  citizen 
as  a  criminal  because  from  his  environment  and  other 
conditions  it  appears  to  be  possible  for  him  to  commit 
offences.  As  Mr.  Eddy  observes :  "  the  larger  a 
partnership  and  the.  more  powerful  a  corporation 
becomes,  the  greater  the  possibility  of  doing  that  which 
is  injurious  or  oppressive;  but  individuals,  part- 
nerships and  corporations  are  not  condemned  on 
account  of  any  of  their  supposed  tendencies.  The 
law  views  actual  conditions  and  results  rather  than 
possibilities,  whether  near  or  remote.  There  are  few 
lines  of  decision  more  pernicious  than  those  whi< 

I  This  is  in  strange  contrast  with  the  oft-quoted  statement  in  Hooker 
v.  Vandewater  4  Denio  (N."S.)349;  "Competition  is  the  life  of  trade.  It 
follows  that  whatever  destroys  or  even  relaxes  competition  in  trade  is 
injurious,  if  not  fatal,  to  it." 

a  Statutory  provisions  apart,  of  course  ;  for  a  statute  may  lay  down 
that  the  tendency  or  the  possibility  itself  should  be  a  sufficient  test  of 
illegality. 


409 

arbitrarily  dispose  of  valuable  property  rights  on  account 
of  alleged  tendencies".'  There  is  no  presumption 
against  the  legality  of  a  combination.  On  the  contrary  a 
combination  should  be  presumed  legal,  until  the  con- 
trary is  shown  by  affirmative  evidence.  Where, 
however,  it  affirmatively  appears  that  an  actual 
monopoly  has  been  created  by  the  agreement  of  com- 
bination, the  presumption  of  law  may  fairly  be  indulged 
in.  "Where  they  include  all  those  engaged  in  any 
business  in  a  large  city  or  district,  are  unlimited  in  du- 
ration, and  are  manifestly  intended,  by  the  surrender  of 
individual  discretion,  by  the  arbitrary  fixing  of  prices, 
or  by  any  of  the  methods  to  which  the  hope  of  gain 
makes  human  ingenuity  so  fruitful,  to  strangle  competi- 
tion outright  and  breed  monopolies,  the  law,  while  it 
may  not  punish,  will  not  enforce  them.  " 

After  the  above  brief  sketch  of  the  tendency  of  Different  forms  of 
law  and  legislation  regarding  combinations  in  the 
United  States  it  is  time  for  us  now  to  consider  the 
different  forms  of  combinations  which  they  are  designed 
to  combat.  They  naturally  fall  into  three  main 
classes  3 : — 

(1)  Simple  Combinations. 

(2)  Trusts. 

(3)  Corporate  Combinations. 

i.     Simple  Combinations. 

This  comprehends  an  extensive  class  of  combi-  simple  comb 
nations  of  varying  degrees  of  integration.  As  dis- tion- 
tinguished  from  (2)  and  (3)  it  is  characterised  by 
loose  formations  consisting  of  different  firms  and 
businesses,  foi  some  specific,  sometimes  a  temporary, 
purpose  only.  In  the  words  of  von  Halle,  they  are 
"  more  or  less  amorphous."  *  Take,  for  instance 
associations  of  men  in  the  same  line  of  business 
whose  interests  are  identical,  associations  formed  for 
protecting  their  interest^,  safeguarding  their  common 
rights  or  otherwise  promoting  their  general  welfare. 

1  Arthur  '  J.  Eddy's,  Law  of  Combinations.'  Vol.  I,  p.  467. 

2  Hoffman  et  al  v.  Brooks  et  al  (1884)  n  Wkly.  Law  Bui.  258.   See  also  Salt 
Co.\.    Guthrie  (1880)  35  Ohio  St.  666. 

3  This  classification  is  taken  from  Eddy's  '  Law  oi  Combinations.' 

*  von    Halle's  '  Trusts   or    Industrial   Combinations    and    Coalitions  in 
the  United  States, '  p.  19, 

52 


ma- 


The    "Brewer's    National    Convention"     is    an    in- 
stance.    It  merely  represents  a  mode  of  co-operation 
for  the  purpose,  as  they  feel,  of  fighting  the  good  fight 
against   temperance  preachers  and   temperance  legis- 
lation, or  of  protesting  against  unfavourable  taxation. 
So  also  are  the  "  Butchers'  National  Protective  Asso- 
ciation,"  "the  Bankers'    National  Convention"   and 
the  like,  all  acting  in  co-operation  in  their  own  res- 
pective spheres  for  mutual  help  and  protection.     Apart 
from  their  negative  propaganda,  they  sometimes  have 
a  positive  programme- of  work  in  the  shape  of  organ- 
ising and  maintaining    relief   funds    for   invalids    as 
also   life   policies   and  pensions   for   widows   and  or- 
phans, etc.     It  is  evident  that  these  associations  do  not 
affect  the  conditions  of  competition  and  from  that  point 
of  view  may  be  regarded   as   innoccuous.     The  next 
step  is  reached  when  we  come  to  associations  for  the 
purpose  of  regulating  trade  customs,  listings  and  quota- 
tions or  scales  of  prices.     Thus  an  association  of  brew- 
ers, or  milk  wholesalers,    or  cattle   and  meat  dealers 
is   formed    in    Chicago    or   New    York,    and    though 
only  joined  by  a  majority  of  the  tradesmen   in  the 
particular  trade  succeeds  in  establishing  the  prices  for 
the  entire  business.     "They  regulate  the  standard  of 
quality   of  the  articles  dealt  in,   the   admittance  of 
securities  to  dealings  and  listings,  the  terms  of  pay- 
ment, the  forms  of  transaction,  the  methods  of  clear- 
ing ;  occasionally,   they  forbid    certain    practices. 
A  further  step  is  reached  when  we  come  to  associa- 
tions which  not  only  fix  prices  but  regulate  the  output. 
Such  regulation,  however,  is  obviously  riot  possible 
unless  the  firms  entering  into  the  agreement   control 
a  very  large  proportion  of  the  output,  and  unless  they 
take  good  care  not   to    overstock  the    market.     For 
this  purpose  it  is  usual  in  such  associations  to  appoint 
common  agents  for  marketing  the  product.     The  asso- 
ciations or  combinations  above  mentioned  come  under 
the  large  genus   denominated  'Pools.'    A  pool  of  its 
very  nature  is  more  or  less  short-lived  and  often  col- 
lapses after  exacting  high  prices  for  a  few    months. 
Loosely  organised  and  temporary  pools  and  associa- 


1    See    von    Halle   Trusts    or    Industrial   Combinations    in    the    United 
States,  p.  23. 


tions  are  prevalent  in  many  trades  in  England  and 
other  countries  not  to  speak  of  the  United  States  where 
combinations  of  all  shades  and  grades  are  found  in 
abundance.  At  times  they  succeed  in  obtaining  high- 
er prices  .to  begin  with,  but  this  success  draws  new 
competitors  to  the  field  and  prices  inevitably  go  down  ; 
at  other  times,  the  success  is  not  up  to  expectation 
and  the  result  is  that,  the  organisation  relaxes  its  hold 
on  the  members  and  it  gradually  crumbles  down. 
The  most  successful  (  pools '  have  been  in  the  trans- 
port trades.  A  closer  and  more  lasting  form  of  combi- 
nation among  a  few  firms  controlling  a  large  market  is 
sometimes  called  a  "  Ring."  This  is  most  frequent  in 
the  collecting  and  distributing  branches  of  trade. 

Between  the  so-called  ( amorphous '  or  loosely  Kartells, 
formed  alliances,  above  described  under  the  head 
of  simple  combinations,  and  the  fully  developed 
monopolies  about  to  be  dealt  with  under  the  head  of 
Trusts  and  c  corporate  combinations '  there  is  an  inter- 
mediate form.  I  refer  to  Kartells.  It  is  a  form  of 
union  greatly  prevalent  in  Belgium,  Austria,  Germany 
and  other  parts  of  the  Continent.  A  Kartell  is  a  com- 
bination effected  by  the  businesses  or  firms  in  question 
forming  a  Central  Board  or  Syndicate  consisting  of 
their  representatives,  which  fixes  uniform  prices  and 
regulates  the  output,  without  interfering  with  the 
management  of  the  individual  firms.  <(  The  syndicate 
apportions  to  each  its  share  of  the  output,  pays 
for  it  at  a  fixed  price,  and  markets  the  whole  stock  at 
prices  which  depend  on  market  conditions.  The 
profit  is  divided  among  members  in  proportion  to 
their  output,  a  bonus  or  compensation  is  given  to  any 
firm  which  has  not  produced  the  whole  of  its  allot- 
ment and  fines  exacted  from  any  which  have  exceeded. 
The  bonus  cannot  exceed  a  certain  maximum,  so  that 
no  firm  can  enjoy  a  profitable  leisure  by  closing  down 
its  works  altogether.  One  essential  feature  of  a 
Kartell  is  that  it  is  a  terminable  association  and  must 
be  renewed  or  dissolved  at  the  end  of  a  fixed  period. 
Here,  again,  it  differs  from  the  permanently  organised 
Trust.  '"  Germany  may  be  regarded  as  the  home  of 

1  See   M.    E     Hirst's   luminous  little  book  '  The    Story    of  Trusts  '   pp. 
170-171. 


412 

Kartells,    and    there   they    dominate    many    trades, 
specially  the  coal  trade,  the  iron  and  steel  trades  and 
the  chemical  trades. 
Decisions  as  to  Before  we  pass  on  to  the  more  thorough-going 

simple  combma-  1.        -    .  .  -         ., 

OIL  monopolies  let  us  consider  for  a  moment  some  of  the 

earlier  cases  of  simple  combinations  that  came  up 
before   the  American   Courts.     In  Stanton  v.   Allen ' 
there   was  a  formidable   association  of  boat-owners 
consisting  of  the  members  of  all  the  transportation 
lines  on  the  Erie  and  Oswego  canals  at  the  time.     Its 
professed  object   was    the  establishment  of    fair  and 
uniform  rates  of  transport  both  as  to  freight  and  passen- 
gers, and  to  equalise  the  business  among  the  members. 
The  rates  were  to  be  determined  by   a  committee. 
Each  member   bound    himself   not    only    to    run    all 
his   present   boats,    according  to  the  agreement  and 
turn  his  earnings  into  the  common  stock  at  the  rates 
agreed  upon,  but  he  was  also  prohibited,  under  severe 
penalties,  from  employing  on  any  other  terms  boats 
subsequently   acquired.     Each   member   having  thus 
thrown  his  concern  into  stock  was  to  derive  an  income 
in   proportion  to  the  number  of  boats  employed  by 
him.     It  was  held  that  such  a  combination  was  illegal. 
"  Indeed  the  consequence  of    such  a  state  of  things 
would  shortly  be,  that  freighters  and  passengers  would 
be  ill-served,  just  in  proportion  as  the  carriers  were 
well    paid.     The  rule  that  contracts  and  agreements 
are  void  when  contrary  to  public  policy,  when  properly 
understood  and  applied,  is  one  of  the  great  preserva- 
tive  principles    of    a   state.     Sound   morality   is  the 
corner-stone  of    the  social  edifice.     Whatever,  there- 
fore,  disturbs   that  is    condemned  under   that    fun- 
damental rule.'2     In  India  Bagging  Association  v.  Kock 
a  number  of  commercial  firms  entered  into  an  agree- 
ment not  to  sell  any  India  cotton  bagging  for  a  speci- 
fied time,  except  with  the  consent  of  a  majority  of  the 
combination.     It   was  held    that  such  an  agreement 
was  void  and  could  not  be  enforced.     The  court  ob- 
served :  "  This  is  a  case  which  ought  never  to  have  come 
before   us.     The   agreement   between  the  parties  was 
palpably  and  unequivocally  a  combination  in  restraint 
of  trade,  and  to  enhance  the  price  in  the  market  of  an 


(1848)  5  Denio  434  at  441.  2  (1848)  5  Denio  434  at  441. 


413 

article  of  primary  necessity  to  cotton  planters.  Such 
combinations  are  contrary  to  public  order  and  cannot 
be  enforced  in  a  court  of  justice.  "  '  In  another  case, 
N ester  et  alv.  Continental  Brewing  Co.  et  al  '2  forty-five 
firms  engaged  in  the  business  of  brewing  in  Philadelphia 
entered  into  a  combination  to  regulate  and  control  the 
price  of  beer  within  that  city  and  adjoining  territory. 
The  combination  was  known  as  the  Brewer's  Pool  and 
included  all  the  brewers  in  Philadelphia  with  the  excep- 
tion of  one  only.  It  was  held  that  it  was  a  combina- 
tion in  restraint  of  trade,  tending  to  destroy  competi- 
tion and  to  create  a  monopoly  in  an  article  of  daily 
consumption  ;  and  that  the  power  which  was  given  to 
the  pool  to  arbitrarily  fix  the  price  necessarily  con- 
trolled production,  and  was  contrary  to  public  policy. 
"  An  increased  price  put  upon  an  article  restricts  its 
sale  and  the  restricted  sale  necessarily  reduces  the 
production  It  is  no  answer  to  say  we  do  not  restrict 
your  production  ;  you  may  produce  any  amount  you 
like — we  only  restrain  your  sale  of  it.  Is  this  not 
practically  a  limit  to  production  ?  Where  a  pool  or 
combination  reserve  the  right  to  regulate  prices, 
they  can,  by  the  manipulation  of  prices,  drive  their 
competitors  out  of  business,  create  a  monopoly  and 
enhance  at  their  pleasure  the  prices  to  consumers.  " 
On  appeal  the  Supreme  Court  of  Pennsylvania  observed, 
"  The  test  question  in  every  case  like  the  present  is, 
whether  or  not  a  contract  in  restraint  of  trade  exists 
which  is  injurious  to  the  public  interest.  If  injurious,  it 
is  void  as  against  public  policy.  Courts  will  not  stop  to 
inquire  as  to  the  degree  of  injury  inflicted.  It  is 
enough  to  know  that  the  natural  tendency  of  such 
contracts  is  injurious.  "  The  point  of  distinction  be- 
tween lawful  and  unlawful  combinations  is  well  in- 
dicated in  the  following  dictum  in  Texas  Standard  Oil 
Co.  et  al  v.  A  done  et  al :  *  (<  If  the  object  of  the  contract 


1  (1849)  14  La.  Ann  164.  Note,  however,  that  the  Supreme  Court  of 
Texas  held  that  a  combination  of  persons  and  firms  in  a  city  for  the  control 
of  the  sale  of  beer  and  the  cessation  of  competition  inter  se  is  not  void 
at  common  law  as  against  public  policy  although  in  restraint  of  trade, 
since  beer  is  not  an  article  of  prime  necessity  and  its  sale  is  closely  restricted 
by  public  policy,  but  that  the  combination  was  contrary  to  the  Texas 
Act  of  1889,  relating  to  conspiracies  against  trade  Anheser-Busch  Brewing 
Association  v.  Houck  et  al  (1894)  27  S.W.R.  692. 

•2  (1894)  2  Dist.  R.  177  s.c.  on  appeal  161  Pa.  St.  473  ;  29  Atl.  .R.  102. 

3  (1892)  83  Tex  650,  19  S.W.R.  274. 


had  been  merely  to  provide  in  good  faith  a  uniformity 
of  prices  among  the  parties  thereto,  to  avoid  unhealthy 
fluctuations  in  the  market,  or  if  the  contract  had  con- 
templated a  joint  and  mutual  association  between  the 
parties  for  their  common  benefit  in  the  nature  of  a 
partnership  and  had  simply  fixed  the  prices  at  what 
they  considered  the  business  would  bear,  instead  of  a 
combination  between  independent  manufacturers  and 
dealers  for  the  purpose  of  at  least  destroying  all  com- 
petition between  themselves,  then  there  might  have 
been  nothing  in  such  an  arrangement  which  the  courts 
could  pronounce  as  pernicious  and  forbidden  by  law. 
There  is  no  pretence,  however,  that  any  partnership 
was  contemplated  in  this  instance  ;  and  if  there  had  been, 
the  entire  absence  of  any  community  of  interest  in  the 
profits,  losses,  or  capital  employed,  would  have  effec- 
tually repelled  the  assumption.  Each  party  retained, 
after  the  contract  as  before  that  time  the  control  of  his 
capital  and  the  operation  of  his  own  mills  and  did  not 
throw  his  capital  or  manufacturing  concerns  into  a 
common  stock.  .  He  continued  to  operate  with  his 
own  separate  means,  but  surrendered  his  right  of  com- 
petition and  of  supplying  his  mills  with  raw  material  at 
the  best  prices  he  might  otherwise  have  obtained  in 
the  markets  of  the  State  and  consented  to  submit  to 
rates  artificially  established.  "  Similar  decisions  were 
given  in  a  host  of  allied  cases.  It  is  hardly  profitable 
to  deal  with  them  at  length ;  for  they  proceed  on  the 
same  basis.  Suffice  it  that  there  sprang  up  an  infinite 
variety  of  combinations  in  different  branches  of  trade 
which  had  to  be  dealt  with  by  the  American  Courts  : 
There  was  combination  of  grain  dealers,1  combination 
of  cotton  seed  oil  mills,2  combination  of  blue  stone 
producers/  combination  of  druggists,*  combination 
of  retail  coal-dealers,5  combination  of  milk  dealers,'5 
combination  of  candle-makers,7  combination  of 


1  Craft  et  al  v.  McConnoughy  (1875)  79  111.  346.     • 

2  Texas  Standard  Oil  Co.  v.  Adoue  et  al  (1892)  83  Tex  650,  19  S.W.R.  274. 

3  Cummings  v.  Union  Bluestone  Association  et  al  (1897)  44  N.Y,  Supp. 
87. 

*  John  D.  Park  and  Sons  Co.  v.  National  Wholesale  Druggists  Association 
et  al  (1896)  50  N.Y.  Sup.  1064. 

6  People  v.  Sheldon  et  ^(1893),  J 39  N.Y.  251,  34N.E.R.  785. 

6  People,  v.  Milk  Exchange  (1895)  145  N.Y.  267,  39  N.E.R.  1062. 

T  Emery  et  al  v.  Ohio  Candle  Co.  (1890)  47  Ohio  St.  320,  24  N.E.R.  660. 


415 

buyers  of  sheep,1  combination  of  salt  producers,2 
combination  of  carbon  manufacturers,3  combination 
of  lumber  manufacturers,4  combination  of  wire  cloth 
manufacturers,6  combination  of  tobacco  warehouse 
men,6  combination  of  grocery  men,1  and  so  on.s 

2.     The  Trust  form  of  Combination.  Tne  standard  on 

By  a  loose  phraseology,  all  combinations  of  cap- 
ital are  nowadays  commonly  described  as  Trusts. 
In  one  way  this  is  significant,  for  it  shows,  as  von 
Halle  observes,  that  the  public  has  unconsciously 
recognised  that,  though  different  in  their  form  and 
sometimes  in  their  temporary  aims,  all  these  at- 
tempts at  combinations  are  but  manifestations  of 
one  underlying  tendency.  Yet,  for  the  sake  of  accu- 
racy, it  is  necessary  clearly  to  understand  that  there 
are  combinations  of  capital  which  are  Trusts,  and 
there  are  combinations  which  are  not  Trusts. 

The  Trusts  represent  an  effort  to  evade  the  force 
of  the  decisions  above  mentioned  against  simple  combi- 
nations. Under  those  decisions  neither  individuals 
nor  corporations  could  become  parties  to  agreements, 
pools,  or  associations  for  the  control  of  prices  and 
products.  It  was,  therefore,  suggested  that  the 
same  result  might  be  accomplished  by  the  organisation 
of  constituent  corporations  in  such  a  manner  as  only 
nominally  to  retain  their  individuality,  but  for  all 
practical  purposes  to  attain  identity  of  interests  by 
merging  them  in  a  whole,  which  was  called  the  Trust. 
This  was  done,  as  von  Halle  points  out,  in  one  of  three 


ways.9 


i.     The  Trust  was  established  by  a  transfer  of  a 


1  Judd  v.  Harrington  (1893)  139  N.Y.  105,  34  N.E.R.  790. 

*  Central  Ohio  Salt  Co.  v.  Guthrie  35  Ohio  St.  666. 

3  Pittsburg  Carbon  Co.  v.  Mcmillin  (1890)  119  N.Y.  46,23  N.E.R. 
530;  affirming  6  N.Y.  Supp.  433. 

*  Santa  Clara  Valley  Mill  and  Lumber  Co.  v.  Hayes  et  al  76  Cal.  387,  18 
Pac.  R.  391. 

6  Le  Witt  Wire  Cloth  Co.  v.  N.J.  Wire  Cloth  Co.  (1891)  14  N.Y.  Supp. 
277. 

6  Hoffman  v.  Brooks.  23  Am.  Law  Reg.  648. 

1  D.  and  E.  Chapin  v.  Brown  Bros,  et  al  (1891),  83  Iowa  i_6,  48  N.W.R. 
1074. 

8  For  a  fuller  account  the  reader  is  referred  to  Mr.  Arthur  J.  Eddy's 
elaborate  treatise  «  The  Law  of  Combination  '  to  which  I  am  much  indebted. 

»  See  von  Halle's  «  Trusts  or  Industrial  Combinations  and  Coalitions  in 
the  United  States,'  p.  27, 


416 

majority  of  stock  of  the  different  companies  to  certain 
trustees  in  whom  the  control  was  vested  and  who 
issued  certificates  in  exchange. 

2.  Or,  the  total   amount  of  all  the  stocks  was 
transferred  to  the  trustees,  who  issued   the  Trust  cer- 
tificates, whilst  the  former  owners  kept  mortgages  to 
the  extent  of  the  valuation   of  their   factories,   and 
perhaps  received  an  additional  bond. 

3.  Or,  the  property  was  unconditionally  trans- 
ferred to  the  trustees  in  return  for  the   delivery  of 
trust  certificates. 

An  illustration  of  No.  2  is  the  Whiskey  Trust. 
Of  No.  3  the  best  illustration  is  the  Standard  Oil 
Trust  to  be  dealt  with  hereafter.  It  is  obvious  that 
the  three  classes  rest  on  the  same  fundamental  prin- 
ciple, the  variations  depending  upon  the  degree  of 
confidence  reposed  in  the  trustees  by  the  corporations 
constituting  the  Trust.  The  fundamental  principle 
put  forward  in  justification  is  the  good  old  principle 
of  laissez  faire  viz. :  that  every  man  can  do  as  he 
pleases  with  his  own ;  so  that  if  a  firm  chooses  to 
place  its  stock  in  the  hands  of  the  trustees,  so  called, 
with  power  to  vote  it,  it  should  be  free  to  do  so. 
Generally  speaking,  this  is  a  fairly  sound  principle. 
But  one  has  to  test  its  soundness  when  applied  to  the 
law  relating  to  corporations.  Corporations  are  crea- 
tures of  the  law,  their  existence  as  well  as  their  rights 
and  liabilities  are  defined  by  and  derived  from  the 
law.  It  does  not  do,  therefore,  to  say  that,  like  the 
individual  the  corporation  is  free  to  do  as  it  chooses. 
Even  the  individual  can  scarcely  be  said  to  have  the 
power  of  doing  just  as  he  chooses.  For  instance,  the 
maxim  Sic  utere  tuo  ut  alienam  non  leadas  imposes  a 
wide  restriction  on  the  freedom  of  action  of  individuals 
in  various  cases.  We  shall  presently  see  that  the 
combination  of  two  or  three  corporations  in  the  form 
of  a  Trust  is  open  to  serious  objection  on  grounds  of 
law  and  public  policy.  For  as  soon  as  the  Trust  form 
is  adopted,  a  constituent  corporation  seems  to  lose  its 
individuality  and  "violates  some  provision  of  its 
charter  or  some  principle  of  the  law  of  its  creation." 
It  is,  therefore,  not  correct  to  say  that  just  as  an  indi- 
vidual, if  he  chooses,  can  shut  up  or  sell  his  shop  or 
abandon  his  occupation,  so  a  corporation  whenever  it 


likes  can  surrender  its  franchise,  transfer  its  stock  or 
delegate  its  duties  to  a  body  of  trustees. 

To  form  a  correct  idea  of  the  nature  and  opera-  Trusts, 
tions  of  Trusts  it  would  be  worth  our  while  to  study 
one  or  two  concrete  instances.  Take  the  case  of  the 
Standard  Oil  Trust.1  The  Trust  agreements  provided 
that  a  corporation  should  be  formed  in  each  of  the  four 
states,  namely,  Ohio,  New  York,  Pennsylvania  and 
New  Jersey,  that  each  of  the  said  corporations  should 
be  known  as  the  Standard  Oil  Co.  of  the  particular 
state  in  question,  that  all  assets  and  businesses  of  the 
parties  to  the  trust  agreements  situated  in  each  state 
should  be  transferred  to  the  said  several  Standard  Oil 
Companies  in  each  particular  state,  and  payment 
made  therefor  in  the  stock  of  the  transferee  Company, 
that  the  said  stock  should  be  delivered  to  nine  trustees, 
and  that  no  stock  of  any  of  the  said  companies  should 
ever  be  issued  except  to  the  trustees  to  be  held  subject 
to  the  trust  specified.  In  return  for  the  stock  so 
delivered  the  trustees  were  to  issue  certificates  of  like 
value  to  the  several  stockholders.  Complete  powers 
of  management  in  respect  of  the  several  companies 
mentioned  was  vested  in  the  nine  trustees.  An  action 
was  brought  by  the  State  of  Ohio  against  the  Standard 
Oil  Company  on  the  ground  that  it  had  violated  the 
terms  of  its  franchise  by  becoming  a  party  to  the 
above  agreement  which  was  clearly  against  public 
policy.  There  were,  in  fact,  two  trust  agreements  one 
of  which  was  supplementary  to  the  other.  The  prin- 
ciple defence  taken  was  that  the  Standard  Oil  Com- 
pany of  Ohio,  as  a  corporation,  was  not  a  party  to  the 
said  agreement.  To  understand  the  extent  and 
magnitude  of  the  Trust's  operations  it  would  be  pro- 
fitable to  glance  at  the  main  terms  of  the  Trust 
agreements.  As  already  observed,  there  was  an  ori- 
ginal agreement  and  a  supplemental  one  and  the  two 
trust  agreements  provided  as  follows  :— 

i.  As  soon  as  practicable  corporations  shall  be 
formed  in  each  of  the  following  states  under  the  laws 
thereof,  to  wit :  Ohio,  New  York,  Pennsylvania  and 


'  For  a  graphic  and  elaborate  account  of  the  history  and  progress  of  the 
Standard  Oil  Co.,  see  Miss  Ida  M.  Tarbell's  'History  of  the  Standard  Oil 
Company '  in  two  volumes.  See  also  Montague's  monograph  '  The  Rise 
and  Progress  of  the  Standard  Company.' 

53 


418 

New  Jersey  ;  provided,  however,  that  instead  of  org; 
ising  a  new    corporation    any    existing    charter    an< 
organization  may  be  used  for  the  purposes  when  it  can 
advantageously  be  done. 

2.  The  purposes  and  powers  of  said  corporation 
shall  be  to  mine  for,  produce,  manufacture,  refine  and 
deal  in  petroleum  and  all  its  products  and  all  the  mate- 
rials used  in  such  business,  and  transact  other  busi- 
ness   collateral   thereto.      But    other    purposes    and 
powers  shall  be  embraced  in  the  several  charters,  such 
as  shall  seem  expedient  to  the  parties  procuring  the 
charter  or,  if  necessary,  to  comply  with  the  law  the 
powers  aforesaid  may  be  restricted  and  reduced. 

3.  At  any  time  hereafter,  when  it  may  seem 
advisable  to  the  trustees  herein  provided  for,   similar 
corporations  may  be  formed  in  other  states  and  terri- 
tories. 

4.  Each  of  the  said  corporations  shall  be  known 
as  the    Standard    Oil  Company  of — (and  here  shall 
follow  the  name  of  the  state  or  territory  by  virtue  of 
the  laws  of  which  the  said  corporation  is  organized). 

5.  The  capital  stock  of  each  of  the  said  corpora- 
tions shall  be  fixed  at  such  an  amount  as  may  seem 
necessary  and  advisable  to  the  parties  organizing  the 
same,  in  view  of  the  purpose  to  be  accomplished. 

6.  The  shares  of  stock  of  cash  of  the  said  cor- 
porations shall  be  issued  only  for  money,  property  or 
assets,  equal  at  a  fair  valuation  to  the  par  value  of  the 
stock  delivered  therefor. 

7.  All  of  the  property,  real  and  personal,  assets 
and  business  of  each  and  all  of  the  corporations  and 
limited  partnerships  mentioned  or  embraced  in  class 
first !  shall  be  transferred  to  and  vested  in  the  said 
several  Standard  Oil  Companies.     A1J  of  the  property, 
assets  and  business  in,  or  of,  each  particular  state  shall 
be    transferred   to    and    vested  in  the   Standard   Oil 
Company  of  that  particular  state,  and  in  order  to  ac- 
complish such  purposes  the  directors  and  managers  of 
each  and  all  of  the  several  corporations  and  limited 
partnerships    mentioned    in    class    first    are    hereby 
authorised  and  directed  by  the  stockholders  and  mem- 

1  The  first  class  consisted  of  all  the  stockholders  and  members  of  four- 
teen named  corporations  and  limited  partnerships  and  such  other  corpora- 
tions and  partnerships  as  might  join  thereafter. 


bers  thereof  (all  of  them  being  parties  to  this  agree- 
ment) to  sell,  assign,  transfer,  convey  and  make  over 
for  the  consideration  hereinafter  mentioned,  to  the 
Standard  Oil  Company  or  companies  of  the  proper 
state  or  states,  as  soon  as  the  said  corporations  are 
organised  and  ready  to  receive  the  same,  all  the  pro- 
perty real  and  personal,  assets  and  business  of  the 
said  corporations  and  limited  partnerships.  Correct 
schedules  of  such  property,  assets  and  business  shall 
accompany  each  transfer. 

8.  The  individuals  embraced  in  class  second  '  of 
this  agreement  do  each  for  himself  agree,  for  the  consi- 
deration hereinafter  mentioned,  to  sell,  assign,  transfer, 
convey  and  set  over  all  the  property,  real  and  per- 
sonal  assets  and  business  mentioned  and  embraced  in 
schedules  accompanying  such  sale  and  transfer  to  the 
Standard  Oil  Company  or  Companies,  of  the  proper 
state  or  states,  as  soon  as  the  said  corporation  are 
organised  and  ready  to  receive  the  same. 

9.  The  parties  embraced  in  class  third  *  of  this 
agreement  do  covenant  and  agree  to  assign  and  trans- 
fer all  of  the  stock  held  by  them  in  the  corporations 
or  limited  partnerships  herein  named  to  the  trustees 
herein  provided  for,  for  the  consideration  and  upon 
the  terms  hereinafter  set  forth.  It  is  understood  and 
agreed  that  the  said  trustees  and  their  successors  may 
hereafter  take  the  assignment  of  stocks  in  the  same 
or  similar  companies  upon  the  terms  herein  provided, 
and  that  whenever  and  as  often  as  all  the  stocks  of 
any  corporation  or  limited  partnership  are  vested  in 
the  said  trustees,  the  proper  steps  may  then  be  taken 
to  have  all  the  money,  property,  real  and  personal  of 
such  corporation  or  partnership  assigned  and  conveyed 
to  the  Standard  Oil  Company  of  the  proper  state  on 
the  terms  and  in  the  mode  herein  set  forth,  in  which 
event  the  trustees  shall  receive  stocks  of  the  Standard 
Oil  Companies  equal  to  the  value  of  the  money,  pro- 
perty and  business  assigned  to  be  held  in  place  of  the 


1  Forty-four  individuals,  some  acting  individually  as  well  as  in  a  repre- 
sentative capacity,  one  estate  and  one  partnership  and  such  other  individuals 
as  might  thereafter  become  identified  with  them,  constituted  the  second  class. 

2  The  third  class  was  composed  of   a  portion  of  stockholders  and  mem- 
bers of  twenty-six  named  corporations  and  limited  partnerships,  and  such  in- 
dividual  stockholders  and  members  of  corporations  and   limited  partnerships 
as  might  thereafter  become  interested  in  the  said  agreement. 


420 

stocks  of  the  company  or  companies  assigning  sucJ 
property. 

10.  The  consideration  for  the  transfer  and  con- 
veyance of  the  money,  property  and  business  aforesaid 
to  each  or  any  of  the  Standard  Oil  Companies  shall  be 
stock   of   the    respective   Standard    Oil   Company  to 
which  the  said  transfer  or  conveyance  is  made,  equal 
as   per  value  to  the  appraised  value  of  the  money, 
property  and  business  so  transferred.     The  said  stock 
shall  be  delivered  to  the  trustees  hereinafter  provided 
for,  and  their  successors,  and  no  stock  of  any  of  the 
said  companies  shall  ever  be  issued  except  for  money, 
property  or  business  equal  at  least  to  the  par  value  of 
the  stock  so  issued,  nor  shall  any  stock  be  issued  by 
any  of  the  said  companies  for  any  purpose,  except  to 
the  trustees  herein  provided  for,  to  be  held  subject  to 
the   trusts   hereinafter   specified.     It   is  understood, 
however,  that  this  provision  is  not  intended  to  restrict 
the  purchase,  sale  and  exchange  of  property  by  said 
Standard  Oil  Companies  as  fully  as  they  may  be  au- 
thorised to  do  by  their  respective  charters,  provided 
only  that  no  stock  be  issued  therefor  except  to  the  said 
trustees. 

11.  The  consideration  for  any  stocks  delivered  to 
the  said  trustees  as  above  provided  for,  as  well  as  for 
stocks  delivered  to  the  said  trustees  by  persons  men- 
tioned   or    included  in  class  third  of  this  agreement 
shall  be  the  delivery  by  the  said  trustees  to  the  persons 
entitled  thereto,  of  trust  certificates  hereinafter  pro- 
vided for,  equal  at  par  value  to  the  par  value  of  the 
stocks  of  the  said  Standard  Oil  Companies  so  received 
by   said    trustees  and    equal  to  the  appraised  value 
of   the  stocks  of  other  companies  or  partnerships  de- 
livered to  the  said  trustees.     The  said  appraised  value 
shall  be  determined  in  a  manner  agreed  upon  by  the 
parties  in  interest  and  the  said  trustees.     It  is  under- 
stood and  agreed,  however,  that  the  said  trustees  may, 
with    any  trust  funds  in  their  hands  in  addition  to 
the   mode   above  provided  purchase  the  bonds  and 
stocks  of  other  companies  engaged  in  business  similar 
or   collateral   to    the   business   of   the   Standard  Oil 
Companies  on  such  terms  and  in  such  mode  as  they 
may  deem  advisable  and  shall  hold  the  same  for  the 
benefit  of  the  owners  of  said  trust  certificates  and  may 


421 

sell,  assign,  transfer  and  pledge  such  bonds  and  stocks 
whenever  they  deem  it  advantageous  to  the  said  trust 
so  to  do. 

The  case  was  heard  by  the  Supreme  Court  of 
Ohio  l  and  the  main  questions  that  came  up  for  deci- 
sion were  the  following  :  (i)  Was  the  agreement  con- 
stituting the  Standard  Oil  Trust  against  public  policy  ? 
(2)  Could  the  Standard  Oil  Co.  of  Ohio  be  regarded 
as  not  having  joined  the  agreement  in  its  cor- 
porate capacity,  in  other  words,  could  the  stock- 
holders of  the  said  company  be  deemed  to  have 
entered  into  the  said  agreement  as  distinguished  from 
the  Company  itself  ?  (3)  Had  the  Company  as  such 
power  to  become  a  party  to  such  an  agreement  ?  It 
was  held  that  an  agreement  by  which  all,  or  a  majority, 
of  the  stockholders  of  a  corporation  transfer  their 
stocks  to  certain  trustees,  in  consideration  of  the 
agreement  by  the  stockholders  of  other  companies  and 
of  the  members  of  limited  partnerships,  engaged  in 
the  same  business,  to  do  likewise  ;  and  by  which  all 
are  to  receive,  in  lieu  of  their  stocks  and  interests 
so  transferred,  trust  certificates  to  be  issued  by  the 
trustees,  equal  at  par  to  the  par  value  of  the  stocks  and 
interests ;  and  by  which  the  trustees  are  empowered, 
as  apparent  owners  of  the  stock,  to  elect  directors  of 
several  companies  and  thereby  control  their  affairs  in 
the  interests  of  the  trust  so  created;  and  are  to 
receive  all  dividends  declared  by  the  several  com- 
panies and  limited  partnerships  from  which,  as  a  com- 
mon fund,  dividends  are  to  be  paid  by  the  trustees  to 
the  holders  of  the  trust  certificates, — tends  to  the 
creation  of  a  monopoly  to  control  production  as  well 
as  prices,  and  is  against  public  policy.  It  was  further 
held  that  a  corporation  can  be  managed  only  by  its 
duly  elected  or  appointed  directors  iri  the  interest  of 
its  own  stockholders  and  conformably  to  the  purpose 
for  which  it  was  created.  <(  Where  all,  or  a  majority, 
of  a  corporation's  stockholders  do  an  act  which  is  de- 
signed to  affect  the  property  and  business  of  the  com- 
pany, and  which,  through  the  control  their  numbers 
give  them  over  the  selection  and  conduct  of  the  cor- 


i  State   v.    Standard   Oil   Co.     (1892)  Ohio    St.  137;  30  N.E.R.  279 ;   15 
A.,  145  ;   34  Am.  St.  Rep.  541. 


422 

porate  agencies,  does  affect  the  property  and  busines 
of  the  company  in  the  same  manner  as  if  it  had  beei 
a  formal  resolution  of  its  board  of  directors  and  the 
act  so  done  is  ultra  vires  of  the  corporation  and  against 
public  policy,  and  is  done  by  them  in  their  individual 
capacity  for  the  purpose  of  concealing  their  real  pur- 
pose and  object,  the  act  is  regarded  as  the  act  of  the 
corporation,  and,  to  prevent  the  use  of  corporate  power1 
may  be  challenged  as  such  by  the  state  in  a  proceeding 
in  quo  warranto"  l 

RefiniuRiVor  ^n"  ^^  us  nex^  consider  the  case  of  the  North  River 
Y'  Sugar  Refining  Company.  This  Company  was  organ- 
ised as  a  manufacturing  corporation  under  the  law 
of  the  state  of  New  York  in  the  year  1865  and  contin- 
ued to  carry  on  its  business  until  the  close  of  the 
year  1887.  In  the  year  1887  a  plan  was  formed  for 
the  organisation  of  what  was  called  the  Sugar  Refiner- 
ies Company  to  take  effect  from  October  of  that  year. 
The  general  object  was  to  bring  together  the  parties 
arid  corporations  engaged  in  the  manufacture,  refining 
and  sale  of  sugar  and  to  place  their  affairs  under  a 
board  of  eleven  persons,  subject  to  a  further  increase 
to  the  number  of  thirteen.  The  North  River  Sugar  Re- 
fining Company  became  a  party  to  the  said  trust 
agreement.  Thereupon  the  Attorney  General  in  the 
name  of  the  people  commenced  an  action,1  in  the 
nature  of  a  quo  warranto  to  have  the  Company  dis- 
solved, its  charter  vacated,  and  its  corporate  existence 


1  The  fol'ovving  passage  from  the  same  judgment  will  also  repay  perusal  : 
"  Applying  then  the  principle  that  a  corporation  is  simply  a  corporation  of 
natural  persons,  united  in  one  body  under  a  special  denomination,  and  vest- 
ed by  the  policy  of  the  law  with  the  capacity  of  acting  in  several  respects 
as  an  individual,  and  disregarding  the  mere  fiction  of  a  separate  legal  entity, 
since  to  regard  it  in  an  inquiry  like  the  one  before  us  would  be  subversive 
of  the  purpose  for  which  it  was  invented,  is  there,  upon  the  analysis  of  the 
agreement,  room  for  doubt  that  the  act  of  all  the  stockholders,  officers  and 
directors  of  the  Company  in  signing  it  should  be  imputed  to  them  as  an  act 
done  in  their  capacity  as  a  corporation  ?  We  think  not,  since  thereby  all 
the  property  and  business  of  the  Company  is,  and  was  intended  to  be,  vir- 
tually transferred  to  the  Standard  Oil  Trust,  and  is  controlled,  through  its 
trustees,  as  effectually  as  if  a  formal  transfer  had  been  made  by  the  direc- 
tors of  the  Company.  On  a  question  of  this  kind,  the  fact  must  constantly 
be  kept  in  view  that  the  metaphysical  entity  has  no  thought  or  will  of  its 
own  ;  that  every  act  ascribed  to  it  emanates  from  and  is  the  act  of  the  indi- 
viduals personated  by  it ;  *  *  *  *  and,  where  an  act  is  ascribed  to  it,  it 
must  be  understood  to  be  the  act  of  the  persons  associated  as  a  corporation, 
and  whether  done  in  their  capacity  as  corporators  or  as  individuals,  must 
be  determined  by  the  nature  and  tendency  of  the  act.  " 

'2  People  v.  North  River  Sugar  Refining  Co.  (1889)  5  Ry  and  Corp  Law 
Jour.  56;  54  Hun,  354;  121  N.Y.  582;  24  N.E.R.  834. 


423 

annulled.  The  grounds  set  out  for  such  forfeiture  are 
typical  and  it  would  be  profitable  to  study  them,, 
they  were  inter  alia  the  following  :  That  it  was  a 
party  to  the  combination  created  by  the  Sugar  Re- 
fineries Company  deed,  the  said  combination  being  in- 
jurious to  trade,  and,  therefore,  a  criminal  conspiracy 
and  an  indictable  offence  ;  that  the  combination  tended 
to  monopoly,  prevention  of  competition  and  enhance- 
ment of  prices,  and  as  such  was  illegal;  that  corpor- 
ate franchises  being  granted  in  trust  upon  condition 
that  they  be  exercised  to  the  attainment  of  the  object 
for  which  they  are  granted,  and  that  they  be  not  ab- 
used to  public  detriment,  any  act  of  a  corporation  in 
violation  of  this  grant  and  these  duties  forfeits  its 
franchise ;  that  the  participation  of  the  North  River 
Sugar  Refinery  Company  in  a  conspiracy  is  ground  for 
the  forfeiture  of  its  franchise  ;  that  the  transfer  by  the 
North  River  Sugar  Refinery  Company  of  its  control  to 
a  board  not  recognised  by  its  charter  is  a  forfeiture 
of  its  charter.  The  Court  held  that  the  North 
River  Sugar  Refining  Co.  had  entered  into  an  unlaw- 
ful combination  and  had  thereby  subverted  its  own 
franchises  and  rendered  itself  liable  to  annulment  of 
its  charter.  The  effect  of  the  combination,  it  was 
held,  was  to  bring  about  a  partnership  between  the 
parties  thereto  who  would  share  the  profits  and 
losses  of  the  new  corporation,  but  the  defendant  com- 
pany had  no  authority  to  enter  into  any  partnership 
agreement,  however  innocent  in  itsel<f.  'clt  is  well 
settled  that  corporations  cannot  consolidate  their  funds 
or  form  partnerships  unless  authorised  by  express 
grant  or  necessary  implication  ;  nor  can  they  enter  into 
any  arrangement  amounting  to  a  practical  consoli- 
dation or  copartnership."  Lastly,  the  combination 
was  declared  illegal  as  being  in  restraint  of  trade  and 
tending  to  monopoly.  In  this  connection  Judge  Bar- 
rett said,  "The  board,  under  this  executed  deed,  can 
close  every  refinery  at  will ;  close  some  and  open 
others  ;  limit  the  purchase  of  raw  materials  ( thus  jeo- 
pardizing and  in  a  considerable  degree  controlling  its 
production )  ;  artificially  limit  the  production  of  re- 
fined sugar ;  enhance  the  price  to  enrich  themselves 
and  their  associates  at  the  public  expense,  and  de- 
press a  fool-hardy  rival ;  in  brief,  can  come  as  near  to 


424 

creating  an  absolute  monopoly  as  is  possible  under  the 
social,  political  and  economic  conditions  of  to-day. 
We  are  told  that  this  cannot  be  accomplished  with 
regard  to  an  article  like  sugar,  which  can  be  inde- 
finitely produced  by  the  application  of  capital  and 
labour,  and  that  monopoly  is  impossible  only  where 
the  supply  of  the  article  is  restricted  by  nature.  This 
position  has  been  maintained  in  an  argument  of  exceed- 
ing brilliancy,  which  I  confess  to  have  enjoyed  as  one 
always  enjoys  a  persuasive  manner  of  presentation. 
But  while  the  argument  was  most  ingenious  it  was 
neither  sound,  nor,  I  say  with  respect,  plausible.  Of 
course  a  monopoly  in  the  strict  technical  and  absolute 
sense  cannot  be  thus  created,  but  a  monopoly  in  a  legal 
sense  can.  The  monopoly  with  which  the  law  deals 
is  not  limited  to  the  strict  equivalent  of  royal  grants 
or  people's  patents.  Any  combination  the  tendency  of 
which  is  to  prevent  competition  in  its  broad  and  general 
sense  and  to  control  and  thus  at  will  enhance  prices  to 
the  detriment  of  the  public  is  a  legal  monopoly.  And 
this  rule  is  applicable  to  every  monopoly  whether  the 
supply  be  restricted  by  nature  or  susceptible  of  inde- 
finite production.  The  difficulty  of  effecting  the  un- 
lawful purpose  may  be  greater  in  one  case  than  in  the 
other,  but  it  is  never  impossible/  Nor  need  it  be  per- 
manent or  complete.  It  is  enough  that  it  may  be 
even  temporarily  and  partially  successful/' 

of  The  above  two  cases  of  Trust  are  typical  and  relate 

Tmsts.  to  two  of  the  most  successful  monopolistic  enterprises 

in  the  United  States.  I  have,  therefore,  thought  it 
best  to  give  the  gist  of  the  arguments  as  well  as  the 
grounds  of  decision  rather  fully.  There  is  no  dearth 
of  Trust  cases  or  adverse  judgments.  Indeed,  in  every 
department  of  industry  there  was  at  one  time  a  vigor- 
ous attempt  to  '  trustify  '  firms ;  and  it  was  as  vigor- 
ously met  by  the  courts  of  justices  by  ordering  for- 
feiture of  franchise  on  the  ground  of  offending  against 
public  policy.  Thus  the  Distillers  and  Cattle  Feeders' 
Trust,1  the  American  Cattle  Trust,*  the  American 


1  See  State,  v.  Nebraska  Distilling  Co.  (1890)  29  Neb.  700;  46N.W.R.  155. 
See  also  Distilling  and  Cattle  Feeding  Co.  v,  People  (1895)  156  111.  448;  41 
N.E.R.  188,  where  the  history  of  the  Trust  and  of  the  Distilling  and  Cattle 
Feeding  Company,  which  succeeded  the  Trust,  is  given  at  length. 

*  Gould  v.   Head  et  al  (1889)  38  Fed.  R.  886. 


425 

Preservers'  Trust,1  the  Chicago  Gas  Trust,2  the 
Cotton  Seed  Oil  Combination8  were  one  after  another 
declared  illegal  combinations. 

While  the  courts  of  -justice  set  their  face  against  °PP°sit<:  °Pinion 

A  1  <•>  f  1  •       ,  •  i  •     1  •  *  .  •        denouncing 

the  trust  form  of  combinations  and  while  one  section  restrictive  legisia- 
of  the  public  Was  clamouring  for  more  and  more  strin- tion  against  Trusts, 
gent  measures  on  the  part  of  the  states  against  Trusts, 
there  was,  on  the  other  hand,  a  powerful  and  highly 
thoughtful  body  of  critics  who  denounced  such  restrict- 
ive legislation  in  the  strongest  possible  terms.  In  so 
far  as  public  opinion,  rationally  and  thoughtfully 
expressed,  gives  a  clue  to  the  history  and  philosophy 
of  law,  it  is  deserving  of  careful  consideration.  I 
shall,  therefore,  endeavour  to  give  one  or  two  specimens 
of  the  contrary  opinion  expressed  by  unbiassed  people. 
In  an  interesting  article  contributed  to  the  Political 
Science  Quarterly  (Vol.  3,  page  609)  Theodore  W. 
Dight  discusses  the  situation  regarding  the  Law  of 
Trusts.  It  gives  us  the  other  side  of  the  picture. 
After  discussing  at  great  length  what  wonders  perfect 
trade  freedom  has  achieved  in  the  United  States  the 
writer  observes  :  (( Forty  years  of  legislative  experience 
have  taught  the  people  of  England  that  there  is  noth- 
ing to  fear  from  combinations  of  producers  when  com- 
petition is  absolutely  free,  and  that  no  '  conspiracy 
against  the  world '  is  possible.  Let  us,  therefore,  be 
calm.  Trusts,  as  a  rule,  are  not  dangerous.  They 
cannot  overcome  the  law  of  demand  and  supply,  nor 
the  resistless  power  of  unlimited  competition.  They 
are,  however,  a  sign  of  the  times.  The  right  of 
association  is  the  child  of  freedom  of  trade.  It  is  too 
late  to  banish  it.  As  mercantile  concerns  under  free- 
dom of  trade  have  tended  in  our  cities  to  be  more  and 
more  vast  and  comprehensive  and  absorb  the  smaller 
ones,  so  it  is  reasonable  to  suppose  that  the  right  of 


I  American  Preservers'  Trust  v.  Taylor  Manufacturing  Co.  et  al  (1891)  46 
Fed.  R.  152.  See  also  Bishop  v.  American  Preservers'  Co.  (1895)  J 57  IN-  284  '• 
41  N.E.R.  76$,  where  the  court  observed  :  "  It  will  thus  be  seen  that  the  agree- 
ment in  question  makes  prevision  for  welding  together  all  the  interests 
engaged  in  the  business  named  in  the  agreement  into  one  giant  combination 
or  partnership  under  the  absolute  dominion  and  control  of  a  board  of  nine 
trustees.  Its  illegal  purpose  is  apparent  upon  its  face,  and,  therefore,  under 
the  decisions  above  referred  t )  must  be  held  to  be  void  as  being  injurious  to 
the  public  interests.  " 

*  People  v.  Chicago  Gas  Trust  Co.  (1889)  130  111.  268  ;  22  N.E.R.  798. 

3  Mallory  v.  Hananer  Oil  Works  (1889)  86  Term.  598 ;  8  S.W.R.  396. 

54 


426 

association  will  be  made  more  and  more  available  in 
manufacturing.  In  fact,  the  two  tendencies  are  in 
substance  the  same.  If  association  is  prevented  by 
law,  different  manufactories  may  be  melted  into  one. 
The  only  way  out  of  the  difficult}^  if  it  be  one,  is  to 
invade  the  right  of  property,  limit  production  by  law, 
cut  down  the  employment  of  large  capitals,  and 
perhaps,  in  the  end,  hand  over  production  to  the 
state.  Are  we  ready  for  these  things  ?  All  English- 
speaking  people, — we  of  the  United  States  and  the 
English  of  England — have  been  engaged  for  a  hundred 
years  both  in  overcoming  natural  obstacles  to  internal 
trade  and  in  abrogating  absurdly  restrictive  laws.  It 
is  not  to  be  credited  that  we  shall  commit  the  su- 
preme folly  of  resorting  to  mischievous  legislation,  fully 
tried  and  long  since  abandoned. ''  l 

3.     Consolidated  Combinations. 

coCn°soPHdated  "com-  We  n°W  COme  to  the  third  claSS'       We  have  f  OUtld 

from  the  decisions  above  mentioned  that  there  were 
legal  obstacles  in  the  way  of  individuals  or  corpora- 
tions meeting  together  and  forming  associations, 
alliances  and  pools  ;  and  that  the  last  and  most  potent 
method — the  one  under  the  form  of  Trusts — came 
equally  to  incur  the  disapprobation  of  the  courts.  The 
logical  outcome  of  all  this  was  the  consolidated  combi- 
nation,2 in  which  the  undertakings  themselves  were 
fused  into  one.  This  was  effected  by  amalgamation 
of  different  firms  or  corporations,  by  sale  of  one  con- 
cern to  another,  the  former  being  either  closed  or 
continued  only  as  a  branch  of  the  latter,  by  lease 
(a  method  quite  common  with  railroads),  or  by  the 
establish  ment  of  a  new  large  company,  which 
absorbed  in  itself  all  those  already  existing,  assigning 
to  them  particular  functions,  sometimes  within  areas 
specifically  allotted  to  them  This  represents  the 
final  phase  of  centralisation  of  industries  in  America, 
attempting  as  it  does  to  effect  a  complete  fusion, 
financially  and  otherwise,  of  all  the  different  under- 
takings in  a  particular  field  of  production  or  enter- 
prise. The  argument  on  which  they  are  sought  to  be 


l   Quoted  in  Eddy's  '  Law  of  Combinations,'  Vol.  I.  p.  599. 
*  I    have   adopted   this    name   for    lack  of  a  better  one.     Eddy  in  his 
*  Law  of  Combinations '  adopts  the  name  '  corporate  '  for  this  form. 


427 

supported  is  the  time-honoured  one  viz.  you  cannot 
deny  the  right  of  an  individual  firm,,  partnership  or 
company  to  purchase  outright  the  assets,  business  and 
goodwill  of  any  other  firm,  firms,  or  corporations  en- 
gaged in  the  same  department  of  industry,  with  a  view 
to  extend  its  operations.  The  judgments  which  con- 
demned the  ' trust'  form  of  combinations  often  con- 
tain passages  which  justify  the  ( consolidated '  form. 
Take,  for  instance,  the  following  from  the  judgment 
of  the  Court  of  Appeals  of  New  York  in  the  Sugar 
Refineries  case  :  6<  It  is  said,  however,  that  a  con- 
solidation of  manufacturing  corporations  is  permitted 
by  the  law,  and  that  the  trust,  or  combination,  or 
partnership,  however  it  may  be  described,  amount 
only  to  a  practical  consolidation,  which  public  policy 
does  not  forbid,  because  the  statute  permits  it.  The 
refineries  did  not  avail  themselves  of  that  statute. 
They  chose  to  disregard  it,  and  to  reach  its  practical 
results  without  subjection  to  the  prudential  restraint 
with  which  the  state  accomplished  its  permission. 
//  there  had  been  a  consolidation  under  the  statute,  one 
single  corporation  would  have  taken  the  place  of  the 
others  dissolved.  They  would  have  disappeared  utterly, 
and  not,  as  under  the  trust,  remained  in  apparent 
existence  to  threaten  and  menace  the  other  organisa- 
tions and  occupy  the  ground  which  otherwise  would 
be  left  free.  Under  the  statute,  the  resultant  com- 
bination would  itself  be  a  corporation  deriving  its 
existence  from  the  state,  owing  duties  and  obligations 
to  the  state,  and  subject  to  the  control  and  supervi- 
sion of  the  state,  and  not,  as  here,  an  unincorporated 
board,  a  collossal  and  gigantic  partnership,  having 
no  corporate  functions  and  owing  no  corporate  alle- 
giance. Under  the  statute,  the  consolidated  taking 
the  place  of  the  separate,  corporations  could  have  as 
capital  stock  only  an  amount  equal  to  the  fair  aggre- 
gate value  of  the  rights  and  franchises  of  the  com- 
panies absorbed ;  and  not  as  here,  a  capital  stock 
double  that  value  at  the  outset,  and  capable  of  an 
elastic  and  irresponsible  increase.  The  difference  is 
very  great,  and  serves  further  to  indicate  the  inherent 
illegality  of  the  trust  combination."  [ 


(1890)  121  N.Y.  582,  24  N.E.R.  834,  9  Iv.R.A.  33. 


428 

In  Richardson  v.  Buhl  et  al,  l  however,  which  was 
the  case  of  a  consolidated  combination  of  match  com- 
panies the  judgment  is  in  quite  a  different  key.  The 
court  held  that  the  contract  between  the  parties  con- 
stituting the  combination  was  void  as  against  public 
policy  "Monopoly,"  said  Sherwood,  J.,  "in  trade  or 
in  any  kind  of  business  in  this  country  is  odious  to 
our  form  of  government.  It  is  sometimes  permitted 
to  aid  the  Government  in  carrying  on  a  great  public 
enterprise,  or  public  work  under  governmental  con- 
trol, in  the  interest  of  the  public.  Its  tendency  is, 
however,  destructive  of  free  institutions  and  repugnant 
to  the  instinct  of  a  free  people,  and  contrary  to  the 
whole  scope  and  spirit  of  the  federal  constitution,  and 
is  not  allowed  to  exist  under  express  provision  in 
several  of  our  state  constitutions.  Indeed,  it  is 
doubtful  if  free  government  can  long  exist  in  a 
country  where  such  enormous  amounts  of  money  are 
allowed  to  be  accumulated  in  the  vaults  of  corpora- 
tions to  be  used  at  discretion  in  controlling  the  pro- 
perty and  business  of  the  country  against  the  interest 
of  the  public  and  that  of  the  people  for  the  personal 
gain  and  aggrandizement  of  a  few  individuals." 

Instances  might  be  multiplied  but  I  do  not  wish 
to  do  so,  *  Corporate  or  consolidated  combinations  came 
by  the  same  fate  as  Trusts,  and  the  courts  in 
numerous  cases  held  that  an  illegal  combination  could 
not  cloak  its  objects  under  the  form  of  a  corporation 
and  thus  evade  the  penalties  provided  by  the  Anti- 
Trust  Law. 


i   (1889)  77  Mich.  632,43  N.W.R.  1102,  6  Iv.R.A.  457. 

*  The  following  cases  may  be  referred  to:  American  Biscuit  and  Manu- 
facturing Co.  v  Klotz  (1891)  44  Fed.  R.  721  ;  Merz  Casule  Co.  v.  United 
States  Capsule  Co.  et  al  (1895)  67  Fed-  R-  4[4>'  Strait  et  al  v.  National 
Harrow  Co.  et  al  (1891)  18  N.Y.  Supp.  224;  National  Harrow  Co.  v.  Hinch  et 
al  (1896)  76  Fed.  R.  667;  National  Harrow  Co  v.  Bewent  and  Sons  (1897) 
21  App,  Div.  290;  Western  Woodenware  Association  v  Starkie  et  al  (1890)  84 
Mich  76,  47  N.W.R.  604;  Olmstead  v.  Distilling  anl  Cattle  Feeding  Co.  (1895) 
73  Fed.  R.  44. 


LECTURE  XII. 
CAPITALISTIC  MONOPOLIES — (Cont.). 

flThe  spirit  of  monopolists"  wrote  Gibbon,  "  is  The  good  and  evil 
narrow,  lazy  and  oppressive  ;  their  work  is  more  costly  of  mon°P°lies- 
and  less  productive  than  that  of  independent  artists, 
and  the  new  improvements  so  easily  grasped  by  the 
competition  of  freedom  are  admitted  with  slow  and 
sullen  reluctance  in  those  proud  corporations,  above 
the  fear  of  a  rival  and  below  the  confession   of   an 
error."     Gibbon  spoke  with  reference  specially  to  the 
corporations  of  Oxford  and  Cambridge      The  observa- 
tion applies  equally    well  to  monopolies  in  general. 
But  it  seems  to  be  too  sweeping  a  generalisation.     Be- 
sides, the  character  of  the  problem  of  monopoly  has 
become  vastly  different  at  the  present  day  and  it  is 
necessary  now  to  form  new   standards   of   judgment. 
For  instance,  if  we  turn  to  the  monopolistic  combina- 
tions of  the  present  day,  it  is  hardly  correct  to  say 
that  their  work  is  more  costly  or  less  productive  than 
that  of  independent  artists,    that   improvements   are 
admitted  by  them  with  slow  and  sullen  reluctance,  or 
for  that  matter,  that  they  are  above  the  fear  of  a  rival. 
On  the  contrary,  there  are  admitted  economies  of  a  far 
reaching  character  effected  by  production  or  distribu- 
tion on  a  large  scale,  which  are  well  known  to  be  impos- 
sible in  the  case  of  independent  traders.     Improvement 
in  machinery,  inventions  and  appliances  form  another 
striking  feature  of  the  methods  adopted  by  present 
day  large  combinations.     The  case  of  the  Carnegie 
Steel  Trust  is  a  well-known  instance  of  it.     Then  as 
regards  their  being  above  the  fear  of  rivalry,  statis- 
tics show  that  the  small   business   or   the   individual 
producer,    like   the    poor,  is   always   with    us.     Not- 
withstanding   the   prevailing   tendency  to  concentra- 
tion  and  combination,  the  average   firm   even   now 
is  small    rather  than  large ;    and    the   large    firm  be 
it    a    'trust'    or  a  'corporate  combination' — invari- 
ably calls  forth   new  competitors,  large  or   small,  as 
soon  as  its  profits  are  high  enough   to  tempt  them 
into  the  field.     Thus  potential  competition  is  always 


430 

a  real  force  which  the  combination  has  to  reckon 
with. 

Let  us  form  our  own  estimate  of  the  good  and 
evil  of  monopolies.  In  order  to  do  so,  we  must  clear 
the  way  by  removing  misconceptions.  Just  as  the 
word  Trust  is  employed  as  an  omnibus  term  for  carry- 
ing all  sorts  of  significations,  though,  in  strictness, 
it  ought  to  be  applied  to  denote  only  a  species  of 
monopolistic  organisation  (see  Lecture  XI,  supra),  so 
the  word  Monopoly  is  also  loosely  employed  to  mean  all 
sorts  of  things.  "  There  are  three  things,  "  says  Prof. 
Clark,1  (<  no  tat  all  identical,  which  the  people  in  their 
thought  and  speech  jumble  together,  and  even  attack 
without  discrimination.  They  are,  first,,  capital  as 
such ;  secondly,  centralisation ;  and  thirdly,  monopoly. 
When  a  general  attack  is  pending  the  word  that  is 
used  to  cover  them  all,  in  blanket  fashion,  is  'mono- 
poly.' '  Now  it  must  be  remembered  that  a  large 
aggregation  of  capital  is  not  necessarily  unlawful  or 
against  public  policy,  nor  is  centralisation  of  business 
wrong.  It  is  only  when  centralisation  results  in  an 
'  odious  monopoly '  that  it  should  be  branded  as  an 
enemy  to  freedom  and  progress.  Hence  it  follows 
that  if  we  can  have  centralisation  without  monopoly, 
we  may  succeed  in  securing  the  productive  energy, 
the  savings  and  the  economies  that  great  capitals 
en  .sure,  in  other  words,  secure  the  good  that  is  in 
monopolies,  and  cast  away  its  evils.2 

Now  what  are  the  evils  of  monopoly  ?  We  have 
in  the  earlier  lectures  considered  these  in  a  general 
way.  We  have  now  to  discuss  them  in  a  more  con- 
crete fashion,  with  reference  to  the  tactics  adopted 
by  combinations  specially  in  America,  and  also  to 
a  certain  extent  in  England  and  the  continent.  These 
tactics  have  become  notorious,  and  it  is  by  recourse  to 
these  that  the  '  trust,'  the  'monopoly/  or  the  'combin- 
ation,' by  whatever  name  you  may  choose  to  call  it,  pro- 
ceeds literally  to  kill  competition  in  cold  blood.  No 
one  doubts  that  the  big  company  has  always  the  right 
to  beat  the  small  one  in  the  struggle  for  existence 

1  See  Prof.  John  Bates  Clark's  book  'The  Control  of  Trust,'  p.  6. 

2  «'  If  America  is,  as  it  seems  to  be,  the  natural  home  of  the  trust  and  if 
we  can  draw  the  fangs  of  the  monster  and  tame  him  to  good  uses,  we  can 
get  all  that  is  possible  to  get  out  of  material  civilisation."     '  The  Control  of 
Trust,'  p.  9. 


and  in  an  honest  and  straightforward  fight  for  cheap- 
ness and  efficiency.  But  when  it  takes  recourse  to 
questionable  methods l  and  proceeds  to  disable  its 
adversary  by  an  underhand  blow,,  there  is  an  end  to 
real  rivalry  and  it  offends  the  spirit  of  the  common 
law.  If  an  appeal  to  the  common  law  proves  ineffec- 
tual, a  proper  case  arises  for  the  legislature  to  take 
action  and  put  a  stop  to  the  mischief. 

One  of  the  underhand  methods  by  which  mono-  Trust  tactics 
polies  have  proved  themselves  obnoxious  is  contriv- 
ing to  obtain  preferential  rates  from  railroad  companies 
and  shipping  companies.  In  these  days  the  success  of 
any  industry  or  manufacture  depends  very  largely 
upon  its  means  of  transport.  In  its  race  for  competi- 
tion its  first  and  foremost  qualification  is  the  facility 
which  it  commands  for  cheap  and  rapid  transit  of  its 
goods  from  one  place  to  another,  from  inland  centres 
to  the  sea-board,  and  thence  by  shipment  to  other 
shores.  If  there  were  fair  field  and  no  favour  in  regard 
to  this  important  requisite  for  success,  many  an  in- 
dependent producer  would  be  able  to  carry  on  a  good 
fight  against  large  capitalistic  organisations  and  there- 
by keep  up  a  competition  which  would  in  the  long  run 
prove  wholesome  not  only  to  the  monopolies  but  to 
themselves  as  well.  But  the  grievance  of  the  indepen- 
dent producer  is  that  the  great  corporations  succeed  by 
the  length  of  their  purse  in  effecting  unholy  alliances 
with  railroad  companies,  and  thus  in  arming  themselves 
with  unfair  fighting  powers.  The  history  of  the  three 
railroad  companies  which  competed  for  the  '  Oil '  traffic 
is  full  of  secret  agreements  for  freight  discriminations  Freight 
and  rebates  as  a  means  of  attracting  custom.  In*1 
many  cases,  the  railroad  companies  became  parties  to 
agreements  whereby  not  only  were  rebates  granted  on 
the  carriage  of  standard  oil,  but  '  drawbacks '  were  Rebates  and 
given  on  the  oil  carried  for  independent  shippers.  ' 
This  method  would  obviously  destroy  the  independent 
shippers  in  no  time.  The  story  of  the  Steel  Trust, 
of  the  Whiskey  Trust,  and  man}^  another  American 
combine  is  replete  with  illustrations  of  the  secret  and 

l  This  is  very  happily  put  in  one  sentence  by  Prof.  Clark  in  his  in- 
structive little  book  '  The  Control  of  Trust.'  "  Monopoly  is  that  monopoly 
does  ;  and  the  typical  act  that  identifies  the  unlawful  power  is  the  crushing 
of  rivals  by  the  means  above  described."  See  p.  73. 


432 


works  at  bargain 
prices 


underhand  manner  in  which  by  unlawful  alliance  with 
railroad  companies,  the  independent  producer  was  done 
out  of  this  right  to  existence.  Armed  with  the  advan- 
tage of  railway  discriminations  the  monopolies  pro- 
Acquisition  of  rival  ceeded  to  the  acquisition  of  rival  works  at  bargain 
prices.  One  after  another  the  independent  traders 
had  either  to  shut  up  their  works  or  sell  off  their  con- 
cern to  the  monopolist.  A  very  instructive  illustra- 
tion of  this  is  furnished  by  the  report  of  Frank  Rocke- 
feller (brother  of  John  D.  Rockefeller,  the  Oil  Dicta- 
tor, later  of  the  Standard  Oil  Trust  fame)  to  the  Com- 
mittee of  Congress  appointed  in  1876 '  who  des- 
cribes the  manner  in  which  his  brother  and  other 
operators  induced  him  to  sell  off  his  concern.  "  If  you 
do  not  sell  your  property/'  said  they,  "it  will  be 
valueless,  because  we  have  got  advantages  with  the 
railroads.  "  *  He  was  not  the  only  victim,  for  the  same 
device  was  adopted  for  compelling  twenty-one  out  of 
twenty- six  oil  refineries  in  Cleveland  to  sell  their 
works  at  prices  which  were  abnormally  below  value. 

There  are  other  ways  of  unfair  dealings.  A  most 
notorious  method  is  by  what  is  called  '  factors  '  agree- 
ment/ whereby  the  monopolist  may  refuse  to  sell 
goods  to  the  independent  trader.  A  trust  has  in- 
variably, among  the  wide  variety  of  its  products,  some 
articles  which  are  essential  to  a  merchant's  business. 
It  adopts  the  device  of  refusing  to  sell  the  merchant 
any  of  those  articles  or  refusing  to  give  him  the  usual 
discount,  if  the  merchant  instead  of  buying  goods  from 
it  alone,  buys  from  any  competing  establishment. 
This  device,  therefore,  is  of  the  nature  of  a  boycott — a 
boycott  of  merchants  who  do  not  comply  with  its  regul- 
ations and  also  a  boycott  of  merchants  who  do  not  in 
and  turn  boycott  ( independents. '  Hereis  another  method 
often  employed :  the  trust  may  sell  goods  at  less  than 
cost  price  with  a  view  to  kill  the  independent  trader. 
Suppose  an  independent  trader  or  producer  is  operat- 
ing in  a  particular  tract  of  country,  which  affords 
special  facilities  for  the  commodity  in  question.  He 


Factors'  agree- 
ment. 


Price-cutting 
Dumping. 


1  The  Committee  was  appointed  to  inquire  and  report  on  the  ways,  and 
methods  of  the  South  Improvement  Company.  The  Committee  characterised 
it  '  as  a  most  gigantic  and  daring  conspiracy,'  and  this  brought  about  its 
ultimate  death.  But  most  of  the  members  of  this  Company  notably  Mr. 
John  D.  Rockefeller,  continued  its  policy  later  in  the  Standard  Oil  Company. 

-2  Cited  in  Hirst's  •  The  Storv  of  Trusts.  ' 


433 

may  be  in  a  position  to  produce  the  commodity  much 
cheaper  than  the  monopolist  can  hope  to  do,  other 
things  remaining  the  same.  Under  ordinary  circum- 
stances, he  is  an  invulnerable  opponent.  But  the 
monopolist  has  large  capital  at  his  back  and  freight 
discriminations  that  give  him  an  unfair  advantage  over 
his  adversary.  He  can  afford  to  stand  some  loss  for 
a  time;  the  profit  he  earns  by  exacting  monopoly 
prices  in  one  area,  where  he  works  unopposed,  he  can 
well  afford  to  throw  away  in  another  area  in  trying  to 
undersell  and  exterminate  competitors  there.  This  is 
what  he  does.  Ultimately,  the  independent  producer 
is  beaten  out  of  the  market.  Then  comes  the  opportu- 
nity for  the  monopolist  to  dictate  his  terms  afresh  to 
consumers.  This  method  of  '  local  cutting  '  of  prices  [ 
or  selling  of  goods  within  the  rivals  special  territory 
below  the  cost  of  production,  is  the  complement  of 
another  method  of  'cutting'  which  is  as  frequently 
adopted.  The  monopolist  for  instance  may  make 
many  varieties  of  one  general  kind  of  merchandise 
while  the  rival  firm  may  make  only  one.  That  being 
so,  the  monopolist  can  well  afford  to  reduce  the  price 
of  only  that  variety  of  goods  which  the  rival  producer 
makes,  retaining  the  other  prices  at  the  original  high 
level.  This  obviously  brings  about  the  destruction  of 
the  opponent  within  a  short  time  leaving  the  field 
entirely  to  the  monopolist. 

The  iniquitous  methods  above  described  have 
been  very  happily  described  as  "  the  predatory  policy 
of  Trusts.  "  To  bring  back  things  to  anything  like 
the  normal  condition,  this  predatory  policy  must  be 
counteracted  by  securing  fair  treatment  to  all  by 
railroads  stopping  secret  rebates,  on  the  one  hand,  and 
1  drawbacks '  on  the  other,  and  putting  an  end  to 
'price  cutting'  and  'dumping.'  Above  all,  it  is 
essential  that  the  operations  of  the  trusts  should  be 
brought  out  of  the  darkness  of  secrecy,  in  which  they 
are  invariably  buried,  into  the  light  of  public  knowledge 
and  criticism.  The  amount  of  secrecy  which  is  gen- 
erally indulged  in  is  obviously  inconsistent  with  hon- 
esty, integrity  and  straightforwardness.  In  1888  Mr. 

1  The  method  of  reaching  customers  in  different  localities  with  different 
prices  is  also  known  as  '  Dumping.  ' 

2  Clark's  '  Control  of  Trusts. ' 

55 


434 

Rockefeller  had  to  give  evidence  before  a  Trust  in- 
vestigation undertaken  by  a  Committee  of  the  New 
York  vSenate.  The  manner  in  which  admissions 
regarding  the  constitution  of  the  South  Improvement 
Company  had  to  be  extracted  from  him  by  searching 
cross-examinations  furnishes  an  instructive  illustra- 
tion of  Trust  methods  of  secrecy. 
Anti-Trust  Legis-  fhe  above  brief  sketch  of  Trust  methods  will 

ation  in  America.  ,  ..  n 

enable  us  to  understand  better  the  reason  why  the 
courts  and  the  legislature  in  America  have  Fought  to 
put  them  down  with  a  firm  hand.  In  the  last  lecture, 
I  endeavoured  to  give  an  idea  of  the  trend  of  case 
law  on  the  subject  of  trusts  and  combinations.  I 
shall  in  this  lecture  give  a  brief  sketch  of  anti- Trust 
legislation  in  America.  The  movement  for  consolida- 
tion and  combination  began  in  America  after  the  year 
1860.  Business  men  saw  that  as  individuals  they 
proved  powerless  against  circumstances  and  they, 
therefore,  tried  to  meet  the  exigencies  of  the  situation 
by  associating  in  ( pools  '  notably  in  salt,  cordage  and 
whiskey  industries.  As  already  observed,  these  com- 
biations  did  not  meet  with  recognition  from  the  law. 
It  was  the  genius  of  John  D.  Rockefeller  which  then 
suggested  the  new  and  the  more  ingenious  method  in 
the  shape  of  Trust  formation.  The  'Standard'  was 
the  first  born  of  the  Trusts.  Mr.  Rockefeller  was 
able  to  secure  special  rates  of  transportation  from 
railway  companies,  and  the  (  Oil  Dictator '  soon  found 
himself  in  a  position  to  dictate  terms  to  all.  The 
succcess  of  the  Standard  Oil  Trust  gave  an  impetus  to 
the  whole  movement  for  consolidation  and  combination 
of  industries.  Trusts  on  pretty  much  the  same  lines 
as  the  c  Standard '  were  formed  for  the  manufacture 
of  sugar,  whiskey,  lead,  cotton,  oil,  linseed  oil, 
starch,  etc.  Unfair  discriminations  by  railroad  com- 
panies, unfair  manipulation  of  the  stock  exchanges 
which  were  glutted  with  huge  quantities  of  Trust 
stocks,  unscrupulous  price-cutting  and  dumping  opera- 
tions, and  the  gradual  extermination  of  the  independ- 
ent producer  or  supplier  became  the  order  of  the  day. 
Public  opinion  was  strong  against  the  Trusts  and  the 
people  cried  out  for  action  on  their  behalf  by  the 
Government  and  the  legislature.  In  1877  the  first 
piece  of  anti-Trust  legislation  was  passed  by  the  con- 


435 

stitution  of  Georgia.  It  provided  as  follows :  (( The 
General  Assembly  shall  have  no  power  to  authorise 
any  corporation  to  make  any  contract  or  agreement 
whatever  with  any  corporation  which  may  have  the 
effect,  or  be  intended  to  have  the  effect,  to  defeat  or 
lessen  competition  in  their  respective  business,  or  to 
encourage  monopoly  ;  and  all  such  contracts  or  agree- 
ments shall  be  illegal  or  void."  This  was  originally 
directed  against  railroad  companies  but  was  readily 
applied  to  Trusts  later  on.  In  1887  the  Inter-State 
Commerce  Act  was  passed  whereby  railways  engaged 
in  inter-state  commerce  were  forbidden  to  exercise 
discrimination  between  clients  in  their  rates  of  freight, 
and  all  railroad  pools  and  traffic  arrangements  were 
declared  illegal.  An  Inter  State  Commerce  Commis- 
sion was  appointed  to  enforce  obedience  to  the  law. 
"Anti- Trust  Laws  were  passed  in  1889  by  Kansas, 
Maine,  Michigan,  Missouri,  Nibraska,  N.  Carolina, 
Tennesse,  Texas  and  the  territories  of  Idaho,  Mont- 
ana and  N.  Dakota ;  and  the  new  States  of  Washing- 
ton and  Wyoming  introduced  provisions  in  this  direc- 
tion into  their  constitutions.  In  1890,  Anti-Trust  Laws 
were  passed  by  Iowa,  Kentucky,  Louisiana,  Missouri 
and  S.  Dakota.  In  1890,  Kentucky  or  Missouri  intro- 
duced provisions  into  their  constitutions.  In  the  same 
year  Alabama,  Illinois,  Minnesota  and  the  territory  of 
New  Mexico ;  in  1892,  New  York  and  Wisconsin  legis- 
lated to  the  like  effect ;  while  in  1893  California  for- 
bade combinations  in  live  stock,  Nibraska  in  coal  and 
lumber.  Amendments  to  these  laws  were  passed  in 
Missouri  and  Tennesse  in  1891 ;  Louisiana  in  1892 ; 
Illinois,  Minnesota  and  South  Dakota  in  1893.  The 
United  States  Act  was  passed  in  1891  and  the  Tariff 
Act  of  August  1894  makes  some  general  provisions  of 
the  same  character  as  to  the  regulation  of  prices.  " 
Thus  between  the  year  1887  and  1894  the  Federal 
Government,  twenty- two  states  and  one  territory  had 
enacted  anti-trust  laws,  emphasising  in  the  main  the 
old  principle  of  common  law  that  contracts  in  res- 
traint of  trade  are  against  public  policy  and  are  void. 
Most  important  of  all  wTas  the  Sherman  Anti-Trust 

i  Von  Halle's  '  Trusts  or  Industrial  Combinations  in  the  United  States' 
pp.  17-18.  See  also  P.  H.  Cooke's  '  Economic  and  Anti-Economic  Legis- 
lation. ' 


436 

Law  of  1890,  which  declared  all  combinations  in  res- 
traint of  trade  among  the  several  states,  or  attempl 
to  monopolise  such  trade,  to  be  misdemeanours  punish- 
able by  fine  or  imprisonment.     Presently,  we  find,  th< 
law   was    set   in  motion  either  by  individuals  or 
states,  through  the  State  Attorney,  and  some  of  th( 
more  important  Trusts  were  soon  dissolved  as  illegal 
such  as  the  Oil  Trust  of  Ohio  .in  1892,  and  the  Sugar 
Trust    of   New   York  in  1890.'     But  if   Trusts   were 
illegal,  the  corporate  combinations  were  not  yet.     So 
the  Sugar  and  Whiskey  Trusts,  after  dissolution,  adopt- 
ed the  device  of  forming  one  large  corporation,  and 
thereby    evading   the    reach    of   the   new  law  which 
affected  more  immediately  the  Trust  formations.     The 
new  corporation  flourished  under  the  same  manage- 
ment as  the  Trust,  only  the  form  of  it  was  changed. 
Partiality  to  Trusts          ^  fa[s  point  a  curious  phenomenon  happened  in 

m  particular  States.     ...  r      *  •  i   •  TTT-I   ••«  A  1 

the  history  of  American  combinations.  While  on  the 
one  hand  there  were  strong  repressive  measures  adopted 
by  the  states  and  the  Federal  Government  to  put  an 
end  to  the  mischief  of  monopolistic  combinations,  on 
the  other  hand  there  was  the  strange  spectacle  of 
certain  particular  states  offering  every  encouragement 
to  them  and  affording  them  a  haven  of  safety  from 
which  to  carry  out  their  programme  of  work.  The 
state  of  New  Jersey  led  the  way  in  this  matter.  It 
amended  its  laws  in  such  a  manner  as  to  empower  a 
corporation  formed  in  New  Jersey  to  purchase  and 
own  the  stock  of  any  corporation  in  any  state.  The 
only  formalities  insisted  upon  by  New  Jersey  for  this 
purpose  was  the  payment  of  a  small  fee  and  an  annual 
tax,  the  maintenance  of  a  head  office  in  New  Jersey 
and  the  publication  of  an  annual  report.  The  effect 
of  this  was  that,  by  having  a  small  office  in  New  Jersey 
town,  a  corporation  was  able  to  operate  in  all  other 
states  and  thus  run  a  chariot-and-four  through  the 
anti- Trust  laws  of  those  states.  The  corporations  could 
scarcely  have  asked  for  anything  simpler  for  carrying 
out  their  operation.  New  Jersey  soon  became  the 
"  Mecca  of  irresponsible  corporations."  With  the 
inrush  of  corporations,  its  revenue  went  up,  and  other 
states  could  scarcely  resist  the  temptation  of  following 

i  Ibid. 


437 

its  example.  Presently,  Delaware,  Illinois,  West 
Virginia,  Maine  and  other  states  amended  their  laws 
for  the  purpose  of  sheltering  corporations  and  reaping 
the  income  to  be  made  by  such  means.  The  Industrial 
Commission  which  carried  on  its  elaborate  investiga- 
tion from  1899  to  1902  made  a  report  recommending 
national  supervision  of  Trusts  and  compulsory  public- 
ation of  their  accounts  and  operations.  But  the 
Federal  Government  could  not  interfere,  for  corpora- 
tion law  lay  outside  its  sphere  and  was  "  a  jealously 
guarded  state  right,"  while  the  states  recklessly  went 
on  harbouring  the  worst  corporations,  and  encourag- 
ing their  evil  practices.  Thus  the  constitutional  diffi- 
culty between  the  states  and  the  Republic  was  largely 
responsible  for  the  apparent  anomaly  which  prevailed 
for  a  long  time — the  anomaly  of  legislation  repressing 
monopolies  in  some  states  and  legislation  fostering 
them  in  others. 

But  the  evil  day  could  no  longer  be  put  off.  Cor- 
porations went  on  extending  their  operations  among 
several  states  and  into  foreign  countries,  relentlessly 
checking  competition  eve^where.  Hence  came  what 
is  known  as  the  Federal  Anti-Trust  Act  of  1890,  The  Sherman  Act 
otherwise  called  the  Sherman  Act  or  the  Anti-Trust  I890< 
Act.1  It  is  entitled  "An  Act  to  protect  trade  and 
commerce  against  unlawful  restraints  and  mono- 
polies." The  first  three  sections  of  it,  which  contain 
the  most  important  portion  of  the  legislation  are  as 
follows  : — 

Sec.  i.  Every  contract,  combination  in  the  form 
of  Trust  or  otherwise,  or  conspiracy,  in  restraint  of 
trade  or  commerce  among  the  several  states,  or  with 
foreign  nations,  is  hereby  declared  to  be  illegal. 
Every  person  who  shall  make  any  such  contract  or 
engage  in  such  combination  or  conspiracy,  shall  be 
deemed  guilty  of  a  misdemeanour,  and  on  conviction 
thereof,  shall  be  punished  by  line  not  exceeding  five 
thousand  dollars  or  by  imprisonment  not  exceeding 
one  year,  or  by  both  said  punishments,  in  the  discre- 
tion of  the  court. 

Sec.  2.  Every  person  who  shall  monopolise,  or 
attempt  to  monopolise,  or  combine  or  conspire  with 

i  Act  of  July  2,  1890,  C.  247  (26  Stat.  L.  209). 


any  other  person  or  persons  to  monopolise  any  part 
of  the  trade  or  commerce  among  the  several  states,  or 
with   foreign   nations,    shall   be   deemed   guilty  of  a 
misdemeanour,   and,   on   conviction  thereof,  shall  be 
punished  by  fine  not  exceeding  five  thousand  dollars, 
or  by  imprisonment  not  exceeding  one  year,  or  by 
both  said  punishments  in  the  discretion  of  the  court. 
Sec.  3:     Every  contract,  combination  in  form  of 
trust  or  otherwise,  or  conspiracy,  in  restraint  of  trade 
or  commerce  in  any  territory  of  the  United  States,  or 
of  the  districts  of  Columbia,  or  in  restraint  of  trade 
or  commerce  between  any  such  territory  or  territories 
and  any  state  or  states  or  the  district  of  Columbia  or 
with  foreign  nations,  or  between  the  district  or  Colum- 
bia and  acy  state  or  states  or  foreign  nations,  is  hereby 
declared  illegal.     Every   person  who  shall  make  any 
such  contract  or  engage  in  any  combination  or  conspir- 
acy, shall  be  deemed  guilty  of  a  misdemeanour,  and 
on   conviction  thereof  shall  be  punished  by  fine  not 
exceeding  five  thousand  dollars  or  by  imprisonment 
not  exceeding  one  year,  or  by  both  said  punishments, 
in  the  discretion  of  the  court. 
The  exact  scope  of          jt  wjn  be  noticed  that  the  title  describes  the  Act 

the  Act.  -  ., 

as  one  to  protect  trade  and  commerce  against  un- 
lawful restraints  and  monopolies."  The  body  of  the 
Act,  however,  nowhere  uses  the  term  ( unlawful/  but 
embraces  every  contract  in  restraint  of  trade  or  com- 
merce. The  question,  therefore,  arises  what  would  be 
the  proper  construction  of  the  statute  where  restraints 
are  sought  to  be  justified  on  the  ground  of  being  reason- 
able. In  the  case  of  United  States  v.  Trans-Missouri 
Freight  Association^  the  Supreme  Court  of  the  United 
States  held  that  the  Act  embraces  every  contract  in 
restraint  of  trade  or  commerce,  whether  reasonable 
or  unreasonable,  whether  legal  or  illegal.  1(  It  is  now 
with  much  amplification  or  argument  urged  that  the 
statute,  in  declaring  illegal,  every  combination  in  the 
form  of  trust  or  otherwise,  or  conspiracy  in  restraint 
of  trade  and  commerce,  does  not  mean  what  the  lan- 
guage used  therein  plainly  imports,  but  that  it  only 
means  to  declare  illegal  any  such  contract  which  is 
in  unreasonable  restraint  of  trade,  while  leaving  all 


(1896)  1 66.,  U.S.  290  ;    17  Snp.  C.  F.  R.  540. 


439 

others  unaffected  by  the  provisions  of  the  Act;  that 
the  common  law  meaning  of  the  term  'contract  in 
restraint  of  trade '  includes  only  such  contracts  as 
are  in  unreasonable  restraint  of  trade,  and  that  when 
the  term  is  used  in  the  federal  statute  it  is  not  in- 
tended to  include  all  contracts  in  restraint  of  trade, 
but  only  those  which  are  in  unreasonable  restraint 
thereof.  The  term  is  not  of  such  limited  signification. 
Contracts  in  restraint  of  trade  have  been  known  and 
spoken  of  for  hundreds  of  years,  both  in  England  and 
this  country,  and  the  term  includes  all  kinds  of  all 
contracts  which  in  fact  restrain  or  may  restrain  trade. 
vSome  of  such  contracts  have  been  held  void  and  un- 
enforceable in  the  courts  by  reason  of  their  restraint 
being  unreasonable,  while  others  have  been  held  valid 
because  they  were  not  of  that  nature.  A  contract  may 
be  in  restraint  of  trade  and  still  be  valid  at  common 
law.  Although  valid,  it  is  nevertheless  a  contract  in 
restraint  of  trade  and  would  be  so  described  either  at 
common  law  or  elsewhere.  By  the  simple  use  of  the 
term  '  contract  in  restraint  of  trade '  all  contracts  of  that 
nature,  whether  valid  or  otherwise,  would  be  included, 
and  not  alone  that  kind  of  contract  which  was  in- 
valid and  unenforceable  as  being  in  unreasonable  res- 
traint of  trade.  When,  therefore,  the  body  of  an  Act 
pronounces  as  illegal  every  contract  or  combination 
in  restraint  of  trade  or  commerce  among  the  several 
states,  etc.,  the  plain  and  ordinary  meaning  of  such 
language  is  not  limited  to  that  kind  of  contract  alone 
which  is  in  unreasonable  restraint  of  trade,  but  all  con- 
tracts are  included  in  such  language,  and  no  exception 
or  limitation  can  be  added  without  placing  in  the  Act 
that  which  has  been  omitted  by  Congress." 

From  the  above  it  seems  to  follow  at  first  blush  Does  it  embrace  ail 
that  the  Act  really  embraces  every  contract  in  res- 
traint  of  trade.  In  fact,  however,  it  does  not,  and  that 
for  two  reasons :  first,  the  supreme  court  in  the  same 
case  held  that  the  Act  does  not  embrace  a  very  large 
class  of  contracts  which  fall  within  the  strict  definition 
of  the  phrase  ((  contracts  in  restraint  of  trade."  Re- 
ferring to  contracts  entered  into  in  connection  with  the 
sale  of  property  or  of  property  right  such  as  a  business, 
a  practice,  or  an  industry,  contracts,  that  is,  in  which 
the  seller  bound  himself  to  refrain  from  competing  with 


440 


Combinations  of 
competing  rail- 
roads— whether 
outside  the  scope 
of  the  Act. 


the  purchaser,  the  court  observed  :  "  A  contract  which 
is  the  mere  accompaniment  of  the  sale  of  the  property, 
and  thus  entered  into  for  the  purpose  of  enhancing  the 
price  at  which  the  vendor  sells  it,  which  in  effect  is  colla- 
teral to  such  sale,  and  where  the  main  purpose  of  the 
whole  contract  is  accomplished  by  such  sale,  might  not 
be  included  within  the  letter  or  spirit  of  the  statute  in 
question."  It  is,  therefore,  clear  that  a  large  class  of 
contracts  at  present  ordinarily  understood  as  contracts 
in  restraints  of  trade  goes  out  of  the  scope  and  operation 
of  the  Act.  Secondly,  the  Act  covers  only  such  con- 
tracts, restraints  and  monopolies  as  affect  trade  or  com- 
merce wTith  'foreign  nations  or  among  the  states,  or 
with  the  Indian  tribes.  Here  is  the  special  limitation 
of  the  scope  of  the  Act.  Thus  it  leaves  outside  of  its 
operation  nearly  all  those  contracts  or  agreements 
which  are  ordinarily  understood  by  the  lawyer  as 
contracts  in  restraint  of  trade  and  which  we  had  occa- 
sion to  discuss  in  a  previous  lecture.  The  primary  pur- 
pose of  the  Act  was  to  suppress  commercial  and  indus- 
trial trusts  and  combinations,  and  in  so  far  as  the 
direct  object  of  any  such  trust  or  combination  was 
the  restriction  or  control  of  inter-state  or  foreign 
commerce  such  trust  or  combination  came  clearly 
within  the  purview  of  the  Act. 

The  case  above  mentioned1  was  one  in  which  several 
points  came  up  for  decision.  Among  other  things,  it 
was  contended  that  the  Act  in  question  was  not  directed 
to  the  combinations  of  competing  railroads  to  keep  up 
their  prices  to  a  reasonable  sum.  Eighteen  competing 
railway  companies  had  formed  the  Trans-Missouri 
Freight  Association  and,  as  members  thereof,  had  en- 
tered into  an  agreement  giving  the  association  control 
of  all  competitive  traffic  within  a  designated  and  com- 
bined territory,  appointing  a  board  consisting  of  several 
persons,  one  from  each  of  the  railway  companies  and 
conferring  upon  such  association  the  power  to  establish 
and  maintain  rules,  regulations  and  rates  on  all  com- 
petitive traffic  and  to  punish  by  fine  such  members  as 
failed  to  live  up  to  established  schedules.  In  1892,  a 
bill  was  filed  by  the  Government  against  the  Asso- 
ciation and  its  members,  praying  that  the  contract  be 


1    United  States  v.  Trans-Missouri  Freight  Association  et  al  (1896)  i66U.S 


290. 


441 

declared  illegal  under  the  Anti-Trust  Act  of  1890,  that 
the  association  be  dissolved,  that  the  defendants  be 
prohibited  from  further  agreeing  and  acting  together 
in  maintaining  the  rules  and  regulations  for  carrying 
freights,  etc.,  that  they  be  restrained  from  continuing 
to  monopolise  or  attempting  to  monopolise  freight  and 
traffic  in  the  different  states  and  territories  of  the 
United  States.  The  defence,  inter  alia,  was  that  they 
had  the  right  under  the  Inter-State  Commerce  Act  to 
combine  and  agree  for  the  purpose  of  establishing  and 
maintaining  reasonable  uniform  rates.  The  court  held 
that  the  Act  in  question  did  apply  to  combinations  of 
the  kind  complained  against.  The  judgment  gives  a 
brief  history  of  the  times  relating  to  the  growth  of  cor- 
porations. I,  therefore,  make  no  apology  for  giving 
the  following  extracts  from  it.  "  It  is  said  that  Con- 
gress had  very  different  matters  in  view  and  very 
different  objects  to  accomplish  in  the  passage  of  the 
Act  in  question  ;  that  a  number  of  combinations  in 
the  form  of  trusts  and  conspiracies  in  restraint  of 
trade  were  to  be  found  throughout  the  country,  and 
that  it  was  impossible  for  the  State  Government  to 
successfully  cope  with  them  because  of  their  com- 
mercial character  and  of  their  business  extension 
through  the  different  states  of  the  Union.  Among 
these  trusts  it  was  said  in  Congress  were  the  Beef 
Trust,  the  Standard  Oil  Trust,  the  Steel  Trust,  the 
Barbed  Fence  Wire  Trust,  the  Sugar  Trust,  the 
Cordage  Trust,  the  Cotton  Seed  Oil  Trust,  the  Whisky 
Trust,  and  many  others,  and  these  trusts,  it  was 
stated,  had  assumed  an  importance  and  had  acquired 
a  power  which  were  dangerous  to  the  whole  coun- 
try, and  that  their  existence  was  directly  antagon- 
istic to  its  peace  and  prosperity.  To  combinations 
and  conspiracies  of  this  kind  it  is  contended  that  the 
Act  in  question  was  directed  and  not  to  the  combina- 
tions of  competing  railroads  to  keep  up  their  prices 
to  a  reasonable  sum  for  the  transportation  of  persons 
and  property.  It  is  true  that  many  and  various 
trusts  were  in  existence  at  the  time  of  the  passage  of 
the  Act,  and  it  was  probably  sought  to  cover  them  by 
the  provisions  of  the  Act.  Man}^  of  them  had  rendered 
themselves  offensive  by  the  manner  in  which  they 
exercised  the  great  power  that  combined  capital  gave 

56 


442 

them.  But  a  further  investigation  of  the  history 
the  times,  shows  also  that  those  trusts  were  not  th( 
only  associations  controlling  a  great  combination  oi 
capital  which  had  caused  complaint  at  the  manner  11 
which  their  business  was  conducted.  There  were 
many  and  loud  complaints  from  some  portions  of  the 
public  regarding  the  railroads  and  the  prices  they 
were  charging  for  the  service  they  rendered,  and  it 
was  alleged  that  the  prices  for  the  transportation  of 
persons  and  articles  of  commerce  were  unduly  and  im- 
properly enhanced  by  combination  among  the  different 
roads.  Whether  these  complaints  were  well  or  ill 
founded  we  do  not  presume  at  this  time  and  under 
these  circumstances  to  determine  or  to  discuss.  It  is 
simply  for  the  purpose  of  answering  the  statement 
that  it  was  only  to  trusts  of  the  nature  above  set  forth 
that  this  legislation  was  directed  that  the  subject  of 
the  opinions  of  the  people  in  regard  to  the  action  of 
the  railroad  companies  in  this  particular  is  referred  to. 
A  reference  to  this  history  of  the  times  does  not,  as 
we  think,  furnish  us  with  any  strong  reason  for  believ- 
ing that  it  was  only  trusts  that  were  in  the  minds  of 
the  members  of  Congress  and  that  railroads  and  their 
manner  of  doing  business  was  wholly  excluded  there- 
from. " 

Another  important  ruling  was  given  at  this  period 
in  the  case  of  the  United  States  v.  E.  C.  Knight  &  Co. 
et  al.1  The  facts  in  that  case  were  as  follows:-  The 
American  Sugar  Refining  Company  was  incorporated 
under  the  laws  of  the  state  of  New  Jersey  for  the 
purpose  of  manufacture  and  sale  of  sugar,  molasses, 
etc.  The  Knight  Compan}^  was  incorporated  under 
the  laws  of  the  state  of  Pennsylvania  for  substantially 
the  same  business  and  was  engaged  in  that  business  in 
the  city  of  Philadelphia.  There  were  three  other 
Pennsylvania  corporations,  viz.  the  Franklin  Sugar 
Refining  Co.,  the  Spreckeles  Sugar  Refinery  and  the 
Delaware  Sugar  House,  all  carrying  on  business  in  the 
same  line  in  Pennsylvania.  Prior  to  1892,  the  American 
Sugar  Refining  Co.  had  obtained  control  of  practically 
all  the  Sugar  Refineries  in  the  United  States  with  the 
exception  of  the  four  Pennsylvania  Companies  above 


I    156  U.S.  I.  39  Iv.  Ed.  325  ;  Pa.  1895. 


443 

mentioned.  With  a  view  to  secure  complete  control 
(about  98  per  cent)  of  the  sugar  industry  in  the  United 
States,  the  American  Sugar  Refining  Co.  entered  into 
negotiations  whereby  it  secured  the  control  of  the 
capital  stock  of  the  above  four  corporations.  A  bill 
was  filed  charging  that  the  said  companies  had  com- 
bined and  conspired  to  restrain  the  trade  and  com- 
merce in  refined  sugar  in  the  several  states  and  with 
foreign  nations  contrary  to  the  Act  of  Congress  (the 
Sherman  Act)  of  1890.  It  was  held  that  the  mere 
business  of  manufacturing  was  not  '  inter-state  com-  Manufacturing 
merce  ' ;  that  the  manufacture  of  an  article  has  only 
an  indirect  and  secondary  effect  upon  commerce ' 
and  is,  therefore  a  matter  for  state  control  and  regula- 
tion ;  that  (<  the  fact  that  an  article  is  manufactured 
for  export  to  another  state  does  not  of  itself  make 
it  an  article  of  inter-state  commerce,  and  the  intent 
of  the  manufacturer  does  not  determine  the  time 
when  the  article  or  product  passes  from  the  control  of 
the  state  and  belongs  to  commerce  "  ;  that  only  direct 
restraints  upon  inter-state  commerce  were  covered  by 
the  Federal  Anti- Trust  I/aw ;  and,  finally,  that  the 
said  law  conferred  no  jurisdiction  upon  courts  of  the 
United  States  over  contracts  entered  into  for  the  pur- 
pose of  creating  a  monopoly  relating  to  property  sit- 
uated within  different  states,  but  which  did  not  consti- 
tute inter- state  commerce.  For  a  time,  it  was  believed 
that  this  decision  stultified  the  l  Sherman  '  law.  But 
then  followed  the  case  of  the  Addyston  Pipe  and  Steel 
Co.  v.  United  States  which  was  less  favourable  to  the  united states. 
monopolist.  In  that  case  *  six  formerly  competing 
firms  which  supplied  the  market  of  thirty- six  states 
with  cast-iron  gas  and  water  pipes  formed  a  combina- 
tion whereby  they  agreed  that  there  should  be  no 
competition  between  them ;  and  the  various  states 
specified  in  the  agreement  were  apportioned  among 
the  six  companies,  each  company  being  given  prac- 
tically the  control  of  the  territory  assigned  to  it. 


1  "  Contracts,  combinations  or  corporations  to  control  domestic  enter- 
prise in  manufacture,  agriculture,  mining,  production  in  all  its  forms,  or  to 
raise  or  lower  prices  or  wages,  might  unquestionably  tend  to  restrain  external 
as  well  as  domestic  trade  ;  but  the  restraint  would  be  an  indirect  result, 
however  ii  evitable,  and  whatever  its  extent,  and  such  result  would  not  neces- 
sarily determine  the  object  of  the  contract,  combination  or  conspiracy." 

2  175  U.S.  2ii  ;  41  Iv.  Ed.  139  ;  Teim.  1899. 


444 

They  further  agreed  that  in  making  bids  for  public 
contracts  they  should  not  compete,  but  that  they 
should  allot  each  job  to  a  particular  member  of  the 
( ring/  whereupon  it  should  make  the  bid  accord- 
ingly, and  the  other  members  should  not  put  in 
higher  bids,  thereby  allowing  the  chosen  firm  to  obtain 
the  contract.  It  was  held  that  such  agreement  was 
in  direct  restraint  of  inter-state  trade  and  commerce 
and  illegal  under  the  Federal  Act  of  1890.  The  deci- 
sion of  the  supreme  court  in  this  case  is  of  very  great 
moment  in  as  much  as  it  settled  many  questions 
which  demanded  immediate  solution ;  among  others, 
the  following  :— 

1.  Under  the  commerce  clause  of  the  Federal 
Constitution,  Congress  has  power  to  prohibit  making 
or  performing  of  private  contracts  having  inter-state 
or  foreign  commerce  for  their  object  and  which  result 
in  a  direct  substantial  obstruction  to  or  regulation  of 
that  cpmmerce. 

2.  Any  substantial  regulation  of  inter-state  or 
foreign    commerce  by  any  other  power  than  that  of 
Congress,  after  Congress  has  itself  acted  thereon,  even 
though  such  regulation  effected  by  means  of  private 
contracts  between  individuals  or  corporations,  is  illegal. 

3.  Any  agreement  or  combination  which  direct- 
ly operates  not  alone  upon  the  manufacture,  but  upon 
the  sale  transportation  and  delivery  of  an  article  of 
inter-state  commerce  by  preventing  or  restricting  its 
sale,  etc.,  thereby  regulates  inter-state  commerce  to 
that  extent  and  to  the  same  extent  trenches  upon  the 
power  of   the  national  legislature    and    violates   the 
statutes.1 

4.  When  the  necessary,  direct  and  immediate 
effect  of  a  contract  is  to  violate  an  act  of  Congress 
and  also  to  restrain  and  regulate  inter-state  and  for- 
eign commerce,  whether  the  design  so  to  regulate  was, 
or  was  not,  in  existence  when  the  contract  was  entered 
into,  is  immaterial. 

5.  Inter-state  commerce  consists  of  intercourse 
and  the  traffic  between  the  citizens  or  inhabitants  of 
different  states,  and  includes  not  only  the  transporta- 
tion of  persons  and  property  and  the  navigation  of 


1   C.F.  the  ruling  in  U.S.  v.  E.G.  Knight  c~  Co.  supra. 


445 

public  waters  for  the  purpose,  but  also  the  purchase, 
sale  and  exchange  of  commodities. 

6.  A  sale  of   an  article   for  delivery   beyond  a 
state  makes  the  transaction  a  part  of  inter-state  com- 
merce. 

7.  Where    the    contract   is    for  the  sale  of  the 
article  and  for  its  delivery  in  another  state,  the  tran- 
saction is  one  of  inter-state  commerce,  although  the 
vendor  may   have  also  agreed  to  manufacture  it  in 
order  to  fulfil  his  contract  of  sale. 

8.  Whether  or  not  a  combination  is  in  restraint 
of  an  inter-state  trade  is  to  be  tested  by  its  effect  in 
limiting  and  restricting  the  right  of  each  of  the  mem- 
bers to  transact  business  in  the  ordinary  way,  as  well 
as  its  effect  upon  the  volume  or  extent  of  the  dealing 
in.  the  commodity,  taking  into  consideration  all  the 
facts  and  circumstances. 

9.  Where  a  direct  and  immediate  effect  of  a  con- 
tract or  combination  among  particular  dealers  in  a 
commodity  is  to  destroy  competition  between  them 
and  others,  so  that  the  parties  of  the  contract  or  com- 
bination may  obtain  increased  prices  for  themselves, 
such  contract  or  combination  amounts  to  a  restraint  of 
trade  in  the  commodity  even  though  contracts  to  buy 
such  commodity  at  the  enhanced  price  are  continually 
being  made. 

10.  Any  combination  among  dealers  in  a   com- 
modity, which,  in  its  direct  and  immediate  effect,  fore- 
closes all  competition    and    enhances   the-  purchased 
price  for  which  such  commodity  would  otherwise  be 
delivered  at  its  destination  in  another  state,  is  in  res- 
traint of  trade  or  commerce  among  the  states,  although 
the  article  to  be  transported  and  delivered  in  another 
state  is  still  taxable  at  its  place  of  manufacture. 

11.  It   is  no   defence   to  the   charge  of  being  a 
monopoly  that  prices  are  only  partially  affected  and 
that  there  is  only  an  incomplete  monopoly,  it  being 
sufficient   to    annul    a    contract  or   combination   if  it 
really  tends  to  being  a   monopoly   and  to  deprive    the 
public  of  advantages  derived  from  free  competition. 

12.  Combinations  or  agreements,  in  so  far  as  they 
relate  to  trade  or  commerce  solely  within  a  state,  are 
not  within  the  Sherman  Anti- Trust  Law. 

13.  Where  a  combination  or  agreement  relates  to 


446 


The  device  of 

orming  *  holding 
companies   ; 


Covered  by  the 
Sherman  Act. 


both  state  and  inter-state  commerce,  Federal  courts 
under  the  Sherman  Act  have  no  jurisdiction  over  that 
part  of  the  combination  or  agreement  which  concerns 
commerce  wholly  within  the  state.1 

A  new  device  for  combination  was  brought  to 
light  in  the  case  of  the  Northern  Securities  Company. 
The  shareholders  of  two  competing  railroads — the 
Northern  Pacific  and  the  Great  Northern--  formed  a 
third  or  ( holding '  company,  namely,  the  Northern 
Securities  Co.  to  hold  the  stock  and  to  control  both 
lines.  The  arrangement  made  the  stockholders  of 
each  system  jointly  interested  in  both  systems,  and  by 
practically  pooling  the  earnings  of  both  for  the  benefit 
of  the  former  stockholders  of  each  and  by  vesting  the 
selection  of  the  directors  and  officers  of  each  system 
in  a  common  body,  to  wit,  the  holding  corporation. 
The  holding  corporation  was  to  have  not  only  the 
power  but  the  duty  to  pursue  a  policy  whereby  "  all 
inducement  for  competition  between  the  two  systems 
was  to  be  removed,  a  virtual  consolidation  effected, 
and  a  monopoly  of  the  inter-state  and  foreign  com- 
merce, formerly  carried  on  by  the  two  systems  as  inde- 
pendent competitors,  established."  It  was  found  as  a 
fact  that  the  incorporation  of  the  '  holding  company 
was  not  a  bona  fide  purchase  of  the  stock  of  the  constitu- 
ent companies,  but  was  organised  to  accomplish  a  pool- 
ing of  profit  of  these  companies  ;  and  it  was  held  that 
the  scheme  or  device  came  fully  within  the  purview  of 
the  Sherman  Act.  It  was  further  held  that  the  New 
Jersey  charter  was  no  protection,  since  it  could  be 
granted  only  for  '  any  lawful  purpose.'  This  decision 
applies  to  railroads,  but  it  was  obviously  capable  of 
application  to  other  monopolies,  and  during  President 
Taft's  term  of  office  the  Standard  Oil  and  the  Tobacco 
Trusts  were  dissolved  by  the  court  on  suit  by  the 
Government,  as  being  both  holding  corporations  and 
manufacturing  monopolies.  In  1912,  the  Bath  Tub 
Trust  came  by  the  same  fate,  it  being  declared  by  the 
courts  to  be  a  mere  device  for  attaining  monopoly  in 
the  enamelled  ware  trade.  In  1913,  the  principal  offi- 
cials of  the  National  Cash  Register  Company  were 
sentenced  .to  varying  terms  of  imprisonment  for  at- 

l  See  Lawson's  Monopoly  and  Trade-Restraint  Cases,  Vol.  I,  pp.  3-5. 


447 

tempting  monopoly  and  practising  unfair  methods  of 
competition.  About  the  same  time,  proceedings  were 
initiated  against  the  United  Shoe  Manufacturing  Com- 
pany, the  Sugar  Trust  and  the  Steel  Trust.  Having 
regard  to  the  number  of  proceedings  had  in  the  United 
States  of  late  for  the  dissolution  of  monopolistic 
combinations — popularly  called  '  trust  busting '  — one 
would  be  inclined  to  think  that  they  would  soon  be- 
come a  thing  of  the  past.  But  we  are  as  far  from  it 
as  ever.  I  have  already  indicated  the  industrial  condi- 
tions which  have  brought  the  monopolistic  combina- 
tions into  being.  When  one  studies  those  conditions 
carefully,  the  only  conclusion  one  can  come  to  is  that 
they  have  come  to  stay.  Many  are  the  remedies  that 
have  been  suggested,  amongst  others,  the  socialistic 
scheme  of  state  control  of  all  industries.  It  is  hardly 
possible  in  these  lectures  to  discuss 'the  merits  and 
demerits  of  the  various  schemes  suggested.  But  it 
can  scarcely  admit  of  any  doubt  that  the  most  practi- 
cal and  expeditious  method  of  curing  monopolistic 
combinations  of  some  of  their  worst  qualities  and  of 
making  them  serviceable  to  society  is  by  securing 
greater  publicity  of  their  ways  of  management  and 
accounts,  under  compulsion  of  law. 

In  England  the  movement  for  combination  has  Movement  for 
made  itself  felt  in  many  industries,  notably  the  iron 
and  steel  industries,  the  chemical  industries,  the  tex- 
tile trade,  the  transport  trade  and  the  tobacco  and 
liquor  trades.  But  Trusts,  in  the  technical  American 
sense,  are  unknown  in  England.  The  peculiar  condi- 
tions of  that  type  of  monopoly  formation  are  not 
present  in  England.  Except  coal,  there  is  scarcely  in 
Great  Britain  that  concentration  of  raw  material  in 
defined  areas  which  has  furnished  such  rare  opportu- 
nities for  monopolistic  enterprises  in  America.  The 
tariff  is  another  potent  factor  which  is  conspicuous 
by  its  absence.  Most  important  of  all,  the  law  of 
England  has  been  almost  friendly  to  consolidation  of 
companies.  The  result  is  that  in  England  one  scarce- 
ly comes  across  a  combination  desperately  trying  to 
escape  from  the  cognisance  of  the  law,  as  in  the  United 
States.  Perhaps  the  most  notable  case  of  a  successful 
combination  in  Great  Britain  is  that  in  sewing  cotton. 
But  the  questionable  practices  attributable  to  the 


Tendency  of  the 
courts  to  favour 
associations  or 
combinations. 


Standard  have  never  been  alleged  against  J.  and.  P. 
Coats.  The  shipping  trade  shows  a  marked  tendency 
of  late  to  consolidation.  The  amalgamation  of  the 
Ellerman  Lines,  Ltd.,  with  Messrs.  Thomas  Wilson, 
Sons  &  Co.,  of  Hull,  further  emphasises  the  tendency 
to  combination  in  the  shipping  world  which  has  result- 
ed in  the  P.  &  O.  Company  joining  forces  with  the 
British  India  Company  and  the  New  Zealand  Com- 
pany, and  in  the  fusion  of  the  fleets  of  Messrs.  Al- 
fred Holt  and  Company  and  the  India  Line  formerly 
owned  by  Messrs.  T.  B.  Royden.  By  the  P.  £  O. 
Company's  move  the  honour  possessing  the  largest  ship- 
ping combinations  reverted  from  Germany  to  Eng- 
land, the  Hamburg- Amerika  taking  second  place. 
That  powerful  organisation  and  its  sister  the  Nord- 
deutsche  Lloyd  are  now  followed  for  the  fourth  place 
in  the  list  by  the  Ellerman  combined  with  its  fleet  of 
approximately  two  hundred  large  vessels.  The  ten- 
dency to  larger  groupings  of  vessels  under  the  same 
management,  as  towards  the  standardisation  of  con- 
struction, has  received  a  strong  impetus  from  the  war 
with  its  merciless  destruction  of  tonnage  and  whole- 
sale appropriation  of  vessels  for  Government  uses. 

The  tendency  of  the  courts'  in  England  has  all 
along  been  favourable  -to  associations  of  traders  and 
manufacturers.  In  the  Moghul  Steamship  Co.  v.  Mc- 
Gregor and  others  'l  already  referred  to,  the  defendants 
were  a  'conference'  or  combination  of  shipping  com- 
panies which  had  tried  to  exclude  the  plaintiffs  from 
the  Hankow  Tea  Trade  by  offering  a  special  rebate  to 
shippers  who  confined  their  shipments  exclusively  to 
the  conference  lines.  Damages  were  sought  for  a 
conspiracy  to  injure  the  plaintiffs,  and  it  was  pleaded 
that  the  conference  was  unlawful,  being  in  restraint 
of  trade.  Judgment  was  given  unanimously  by  the 
House  of  Lords  against  the  plaintiffs,  the  Moghul 
Co.  "There  are  two  senses/'  said  the  Court,  "in 
which  the  word  *  unlawful'  is  not  uncommonly,  though, 
I  think,  somewhat  inaccurately  used.  There  are 
some  contracts  to  which  the  law  will  not  give  effect, 
and  therefore,  although  the  parties  may  enter  into 


1  See  Lecture  XI,  supra. 


(1892)  A.C.  25. 


449 

what,  but  for  elements  which  the  law  condemns, 
would  be  perfect  contracts,  the  law  would  not  allow 
them  to  operate  as  contract  notwithstanding  that,  in 
point  of  form,  the  parties  have  agreed.  Some  such 
contracts  may  be  void  on  the  ground  of  immorality ; 
some  on  the  ground  that  they  are  contrary  to  public 
policy ;  as,  for  example,  in  restraint  of  trade,  the  con- 
tracts so  tainted  the  law  will  not  lend  its  aid  to  en- 
force. It  treats  them  as  if  they  had  not  been  made 
at  all.  But  the  more  accurate  use  of  the  word  '  un- 
lawful' which  would  bring  the  contract  within  the 
qualification  which  I  have  quoted  from  the  judgment 
of  the  Exchequer  Chamber,  namely,  as  contrary 
to  law,  is  not  applicable  to  such  contracts.  It  has 
never  been  held  that  a  contract  in  restraint  of  trade 
is  contrary  to  law  in  the  sense  that  I  have  indicated. 
A  judge  in  very  early  times  expressed  great  indigna- 
tion at  such  a  contract ;  and  Mr.  Justice  Crompton 
undoubtedly  did  say  (in  a  case  where  such  an  observa- 
tion was  wholly  unnecessary  to  the  decision,  and, 
therefore,  manifestly  obiter)  that  the  parties  to  a  con- 
tract in  restraint  of  trade  would  be  indictable.  I  am 
unable  to  assent  to  that  dictum.  It  is  opposed  to 
the  whole  current  of  authority  ;  it  was  dissented  from 
by  Lord  Campbell  and  Chief  Justice  Erie,  and  found 
no  support  when  the  case,  in  which  it  was  said,  came 
to  the  Exchequer  Chamber,  and  it  seems  to  me  con- 
trary to  principle."  Lord  Justice  Bowen  said,  "To 
say  that  a  man  is  to  trade  freely,  but  that  he  is  to 
stop  short  at  any  act  which  is  calculated  to  harm 
other  tradesmen,  and  which  is  designed  to  attract 
business  to  his  own  shop,  would  be  a  strange  and 
impossible  counsel  of  perfection."  ....  Again, 
<fThey  (the  defendants)  have  done  nothing  more 
against  the  plaintiffs  than  pursue  to  the  bitter  end  a 
war  of  competition  waged  in  the  interest  of  their 
trade."  Finally,  to  quote  Lord  Justice  Fry:  "To 
draw  a  line  between  fair  and  unfair  competition, 
between  what  is  reasonable  and  unreasonable,  passes 
the  power  of  the  courts."  These  oft-quoted  opinions, 
delivered  by  eminent  judges  in  the  course  of  the 
Moghul  Case  make  clear  the  legal  position  of  competi- 
tive traders.  Prices  can  be  fixed  as  high  or  low  as 
the  maker  of  the  articles  pleases.  Competition,  how- 


450 

ever  violent,  is  not  "  contrary  to  public  policy, "  even 
if  the  stronger  party  carries  on  business  at  a  loss  for 
a  time  in  order  to  drive  the  weaker  out  of  business. 


INDEX. 

Abkari,  39,  40. 
Acts  :— 

Conspiracy  and  Protection  of  Property  Act  of  1875,  386. 

Copyright  Act  of  1911,  23,  212,  221-244. 

Copyright  Act  of   1775,  279. 

Indian  Contract  Act  of  1872,  The,  367,  369. 

Indian  Copyright  Act  of  1914,  The,  23,  212,  215-221 

Indian  Copyright  Regulations  of  1914,  The,  245-251. 

Indian  Merchandise  Mark  Act  of  1889,  The,  23(^,295,  307,  338. 

Indian  Patents  and  Designs  Act  of  1911,  The,  20,  137-167. 

Indian  Patents  and  Designs  (Temporary  Rules)  Act,  The,  168. 

Indian  Patents  and  Designs'Rules  of  1912,  The,  170-198. 

Patents  and  Designs  Act  of  1917,  20. 

Patents,  Designs  and  Trade  Marks  Act  of  1883,  300. 

Sherman  Act  of  1890,  437. 

Trade  Disputes  Act  of  1906,  393. 

Trade  Marks  Act  of  1905,  300,  331. 

Trade  Marks  Registration  Act  of  1875,  300. 

Trade  Union  Act  Amendment  Act  of  1876,  386(n). 

Trade  Union  Act  of  1871,  386. 

Trade  Union  Act  of  1913,  386(n). 

Address  to  Queen  Elizabeth  by  House  of  Commons,  18. 
African  Companies,  The  early,  83. 
Artificial  Monopolies,  50. 

Blackstone's  definition  of  Monopoly,  8. 

Capitalistic  Monopolies,  3,  33. 

acquisition  of  rival  works  at  bargain  prices,  432. 

factors  agreement,  432. 

freight  discriminations,  431. 

good  and  evil  of,  429. 

instances  of,  30. 

objection  to  the  term,  43. 

price  cutting  and  dumping,  432. 

rebate  and  drawbacks,  431. 

trusts  and  combinations,  398. 

anti-trust  legislation  in  America,  434. 

attitude  of  the  Courts  towards,  404. 
in  England,  404. 
in  United  States,  405. 

current  of  decisions  not  uniform,  408. 

partiality  to  trusts  in  particular  States,  436. 
trust  tactics,  431. 


452 

Caste,  monopoly  of,  74. 
effect  of,  74. 
in  Manu,  74. 
in  Mitakshara,  75. 

Classification  of  Monopolies,  2,  33,  42,  43,  44, 
by  Dr.  Bullock,  43. 
by  Prof.  Jenks,  42. 
by  Prof.  Ely,  43- 
Coke's  definition  of  monopoly,  8. 
Combination,  a  basis  of  monopoly  formation,  28. 
conditions  favouring  the  growth  of,  399. 
absence  of  foreign  competition,  399. 
concentration  of  raw  materials,  399. 
internal  advantages,  400. 
preferential  rates  of  freight,  400. 
Social  and  temperamental  conditions,  400. 
in  United  States,  different  forms  of,  409. 
consolidated,  426. 
corporate,  426. 
simple,  409. 
Pools,  410. 
Ring,  411. 
Kartells,  411. 
decisions  as  to,  412. 
trust  form  of,  4.15. 
Trusts,  417. 
Suppression  of,  424. 

opinion  against  restrictive  legislation,  425. 
tactics,  431. 

movement  for,  in  England,  447. 
of  labour,  381. 

allowable  within  limits,  381. 
Boycotting,  picketting,  strike,  395. 
cases  on  the  question  of  civil  liability,  389. 
cases  on  the  question  of  criminal  liability,  386. 
change  of  opinion  in  favour  of,  382. 
early  English  Statutes.  383. 
present  position,  383. 
principle  on  which  countenanced,  381. 
trade  union ,  394. 

to  raise  wages  allowed  by  Statute,  385. 
popular  feeling  against,  58. 
tendency  of  the  courts  to  favour,  448 

Common  I^aw,  does  not  recognize  restrictions  on  free  competition,  n, 
exceptions  to  the  principle  of,  17. 
perfect  freedom  of  trade  under,  26. 
the  use  of  mouoply  punishable  under,  11. 
Companies,  trading,  (see  trading  companies). 


453 

Competition,  free,  i. 

change  in  the  doctrine  of  free,  29. 

how  market  is  governed  in  free,  i. 

restrictions  on,  void  at  Common  I,aw,  11. 
Conditions  of  trade  and  commerce,  changes  in  the,  29. 
Conspiracy  and  Protection  of  Property  Act  of  1875,  386. 
Consolidated  combinations,  426. 
Contracting  out  of  one's  freedom  of  trade,  26. 
Contracts  in  restraint  of  trade,  defined,  25. 

different  stages  of  development,  27. 

space  limit,  28. 

time  limit,  28. 

Contract  Act  of  1872,  The  Indian,  367,  369. 
Contractual  Monopolies,  25. 
Copyright  Act  of  1911,  23,  212,  221-244. 

abrogation  of  Common  Law  rights,  239. 

application  of  Act  to  British  dominions,  236. 

application  of  part  II  to  British  possessions,  238. 

application  to  protectorates,  237. 

arrangement  of  sections,  221. 

civil  remedies  for  infringement  of  copyright,  226. 

compulsory  licence,  225. 

delivery  of  copies  to  British  Museum  and  other  libraries,  229. 

exemption  of  innocent  inf ringer  from  liability,  227. 

existing  works,  234. 

extent  of  the  act,  223. 

importation  of  copies,  228. 

infringement  of  copyright,  223. 

interpretation,  239. 

limitation  of  actions,  228. 

legislative  powers  of  self-governing  dominions,  236. 

ownership  of  copyright,  225. 

posthumous  works,  230. 

powers  of  legislatures  of  British  possessions,  237. 

"power  to  extend  to  foreign  works,  237. 

provisions  as  to  government  publications,  230. 

provisions  as  to  mechanical  instruments,  231. 

provision  as  to  political  speeches,  234. 

provision  as  to  photograph,  234. 
•    provisions  as  to  designs  registrable  under  7  Ed.  VII,  c.  29,  234. 

provisions  as  to  orders  in  Council,  239. 

repeal  of  enactments,  244. 

restrictions  on  remedies  in  the  case  of  architecture,  227. 

rights  of  owner  against  infringer ,  227. 

saving  of  compensation  to  certain  libraries,  239. 

saving  of  University  copyright,  239. 

schedule  I,  242. 

schedule  II,  243. 


454 

shor-t  title  and  commencement,  241. 

term  of  copyright,  225. 

work  of  foreign  authors  first  published   in  His    Majesty's   dominions 

234. 
work  of  joint  authors,  230. 

Copyright  Act  of  1914,  The  Indian,  212,  215-221. 
appendix,  215. 

application  of  the  Act  to  British  India  with  adaptations,  217. 
cognizance  of  offences,  220. 
contents,  215. 
copyright   as  [regards   translation   of    work   first  published   in    British 

India,  217. 

courts  having  jurisdiction' over  infringement  of  copyright  cases,  220. 
definitions,  217. 
effect  of  non-registration,  220. 
importation  of  copies,  218. 
musical  works  made  by  resident  of  or  first  published  in  British  India,  217. 
offences  in  respect  of  infringing  copies,  219. 

possession  of  plates  for  purpose  of  making  infringing  copies,  220. 
power  of  courts  to  dispose  of  infringing  copies  or  plates,  220. 
punishment  on  second  conviction,  220. 
repeals,  221. 

saving  in  case  of  infringement  by  construction  of  building,  220. 
short  title  and  extent,  217. 
Copyright,  action  for  infringement,  costs,  285. 

foreign  authors,  289. 

innocent  inf ringer  not  liable,  286. 

libellous,  immoral,  obscene  or  irreligious  works,  287. 

presumptions,  285 

works  intended  to  deceive  the  public,  288. 
after  publication,  200. 
artistic  work,  272. 
assignment  of,  278. 
at  Common  I,aw,  21. 
before  publication,  200,  203. 

does  not  come  within  the  odium  of  monopoly,  22. 
decisions  under  repealed  acts  referred  for  construction  of  new 

252. 

distinction  between  common  law  right  and  statutory  right,  275. 
early  decisions  on  copyright  before  publication,  203. 
first  made  the  subject  of  statute,  210. 
in  abridgments,  262. 
in  digests,  263 
in  dramatic  work,  267. 

includes  cinematograph  267,  269. 
in  judgments,  264. 
in  lectures,  265. 

delivery  of,  266. 


455 

in  musical  work,  269. 

in  private  letters,  259. 

in  selection  of  poems,  262. 

in  translation,  266. 

in  the  name  or  title  of  a  book,  258. 

includes  two  distinct  rights,  200. 

incorporal   ideas  must  assume  corporeal   existence  to  become  literary 
property,  2or. 

Indian  law  of,  23. 

law  brought  within  one  statute,  212. 

living  pictures,  273. 

mere  likeness  does  not  constitute  infringement  of,  255. 

originality,  252. 

originality  or  novelty  not  in  strict  sense,  254. 

originality,  although  new  arrangement  of  old  matters,  256. 

originality  does  not  imply  particular  merit  or  excellence,  257. 

publication,  276. 

principle  applicable  to  musical  and  artistic  production,  202. 

regarded  as  literary  property,   19^. 
Copyright  Regulations  of  1914,  The  Indian,  245-251. 

delivery  of  goods  detained,  248. 

exception  when  labels  not  available,  246. 

form  of  labels,  245. 

forms,  249-251. 

further  information  and  affidavit.  248. 

inquiries,  247. 

interpretation,  245. 

labels  to  be  affixed  to  copy,  245. 

notices,  246. 

notice  in  case  of  books  or  other  printed  works,  248. 

notice  in  case  of  other  works,  248. 

notice  to  British  customs  authorities,  248. 

notice  given  under  other  Act  deemed  to  be  under  tbe  Act,  249. 

payment  of  royalties  otherwise  than  by  adhesive  labels,   246. 

prescribed  time  for  reply  to  enquiries,  247. 

royalties  ordinarily  payable  by  adhesive  labels,  245. 

security  deposit,  248. 

service  and  advertisement  of  inquiries,  247. 

service  and  advertisement  of  notices,  247. 

short  title  and  application,  245. 

supply  of  labels,  245  . 

undertaking  to  reimburse  and  security  bond,  248. 
Copyright,  remedy,  in  case  of  infringement  of,  277. 

injunction,  the  usual,  280. 
special  cases  of,  28  r . 

restriction  in  case  of  architecture,  282. 
damages,  282. 
account  of  profits,  284. 


456 

summary,  285. 

special,  against  importation,  286. 

second  exception  to  the  common  law  rules,  21. 

second  statute  dealing  with,  211. 

social  monopoly,  45. 

statutes  dealing  with,  212. 

under  the  statute,  21. 

what  it  denotes,   199. 

when  ideas  are  put  in  writing  but  not  committed  to  public,  202. 

whether  natural  right  or  a  creature  of  statute,  210. 
Corporate  combination,  426. 
Cranes,  monopoly  in  respect  of,  24. 
Customary  monopolies,  24. 

affected  with  a  public  character  or  not,  24. 

Demand  and  supply,  adjustment  of,  i. 

equilibrium  of,  2. 
Designs,  definition  of,  289. 

must  be  registered,  290. 

effect  of  disclosure,  291. 

infringement,  of  copyright  in  registered,  292. 

rectification  of  register,  293. 
Differential  advantage,  a  test  of  monopoly,  5. 
Docks,  monopoly  in  respect  of,  24. 

Eastland  Company,  The,  81. 

East  India  Company,  The  British,  85. 

monopolies  under,  34. 
Exceptions  to  the  common  law  rule  as  to  monopolies,  17. 

American  cases  on  the  principle  of,  19. 

based  on  public  policy,   17. 

contractual  monopolies  are,  25. 

copyright  an  exception,  21. 

customary  monopolies  are,  24. 

patent  an  exception,  17. 

recognized  by  statute,  18. 

trade  mark  an  exception,  23. 
Exclusiveness,  a  basis  of  monopoly,  7. 

how  brought  about,  9. 

Exclusive  right  of  printing,  cases  relating  to,  12. 
Express  grant,  monopolies  by,  33. 

a  basis  of  monopoly,  9. 

a  concession,   16. 

legal  validity  rests  on  grounds  of  public  welfare,  17. 


Ferries,  monopoly  in  respect  of,  24. 
Fiscal  monopolies,  salt  and  opium,  35. 
saltpetre,  38. 


457 

Forestalling,  explained,  57. 

ingrossing  and  regrating  regarded  as  offences,  57. 
meaning  of,  57. 
legislation  against,  59. 
repeal  of  statutes  on  the  subject  of,  60. 
Free  competition,  i. 

change  in  the  doctrine  of,  29. 

common  law  does  not  recognise  restrictions  on,  n. 
how  market  is  governed  in,  i. 
Freedom  of  trade,  26. 

contracting  out  of  one's,  26. 
public  policy  requiring,  26. 

General  welfare  monopolies,  48. 

Gilda  mercatoria,  63  (n). 

Gilds,  craft,  character  and  object  of ,  64. 

growth  of  power  and  number  of,  65. 

importance  in  the  middle  ages,  66. 

in  ancient  India,  69. 

in  Brihaspati,  73. 

in  Dharma  Sutras,  71. 

in  Jatakas,  70. 

in  Kautilyas  Arthashastra,  71. 

in  Narada,  72. 

general  features  of  ancient,  62 
merchant,  in  ancient  India,  69. 

in  modern  India,  69. 

character  and  object  of,  62 
Governmental  monopolies,  3,  33. 
based  on  fiscal  grounds,  34. 
the  principal  in  India,  34. 

Hanseatic  league,  68,  77,  79 
Hudson's  Bay  Company,  84. 

Industrial  monopolies,  causes  and  factors,  30. 
Ingrossing,  meaning  of,  57. 

regarded  as  an  offence,  57. 

legislation  against,  158. 

repeal  of  statutes  on  the  subject  of,  60. 
Injunction,  a  relief  in  suit  for  infringement  of  patents,  127. 

interlocutory,  in  a  suit  for  infringement  of  patents,  129. 

a  remedy  in  an  action  for  infringement  of  copyright,  280,  181. 

a  remedy  in  an  action  for  infringement  of  trade  mark,  232. 

interlocutory,  in  an  action  for  infringement  of  trade  mark,  333. 
Invention,  defined,  101. 

case  law  on  the  term,  102,  103. 

patentable,  adaptation  of  old  materials  or  old  processes,  not,  108. 
case  law  on,  105,  106,  107. 


458 

improvements  in  some  cases  are,  109. 

involves  discovery  resulting  in  a  «  new  thing  ',  ioj. 

subject  matter  and  novelty,  104. 

utility  an  essential  factor,  109. 

Kartells,  a  combination,  411. 

Labourers,  legislation  for  regulating  wages  of,  61. 
Labour  combination,  381. 

allowable  within  limits,  381. 

boycotting,  picketting,  strike.  395. 

cases  on  the  question  of  civil  liability,  389. 

cases  on  the  question  of  criminal  liability,  386. 

change  of  opinion  in  favour  of,  382. 

early  English  statutes,  383. 

present  position,  383. 

principle  on  which  countenanced,  381. 

trade  union,  394. 

to  raise  wages  allowed  by  statutes,  385. 
Legal  monopolies,  3,  33. 
Limitation,  a  basis  of  monopoly,  7. 

in  the  quantity  of  the  commodity,  7. 
Liquor,  State  monopoly,  39 

essentially  fiscal,  39. 

justifiable  on  other  grounds  as  well,  39. 

in  India,  39. 

in  vSweden,  39. 

in  Switzerland,  39. 

abkari  under  the  Moghul  Emperors,  39. 
under  the  British  administration,  39. 

out-still  system,  40. 

central  distillery  system,  40. 

manufacture  and  sale  of  hemp-drugs  under  strict  stale  control,  40. 

Manu,  reference  to  monopolies  in,  52,  55,  56. 

monopoly  of  caste  in,  74. 
Manufacture,  defined  in  the  Patents  and  Designs  Act,  101. 

case  law  on  the  term,   102,  103. 
Market,  monopoly  in  respect  of,  24,  25. 
Merchant  adventurers,  77. 

Merchandise  Marks  Act  of  1889,  The  Indian,  23(n),  295,  307,  338. 
Mitakshara,  reference  to  monopolies  in,  55. 

monopoly  of  caste  in,  75. 
Monopolies,  artificial,  50. 

arising  from  inherent  properties  of  business,  50. 

arising  from  secrecy,  51. 

by  express  grant,  33. 

capitalistic,  3,  33,  398. 
instances  of,  30. 


459 

contractual,  25,  48. 
customary,  24,  48. 
character  of  ancient,  52. 
fiscal,  35,  37,  38. 

governmental  and  municipal,  3,  33. 
examples  of,  34. 
based  on  fiscal  grounds,  34. 
principal  monopolies  in  India  are.  34.. 
good  and  evil  of,  429. 
general  welfare,  48. 
growth  of  modern,  52. 
industrial,  causes  and  factors,  30. 
in  respect  of  cranes,  24. 
docks,  24. 
ferries,  24,  25. 
market,  24,  25. 
weighing  machines,  24. 
kinds  and  classes  of,  33. 
legal,  3,  33. 
natural,  2,  5,  33. 
of  traders  in  ancient  India,  55. 

other  monopolies  in  ancient  times  besides  state,  53. 
of  foodstuffs  in  the  middle  age,  56. 
social,  explained,  44. 
patent,  45. 
copyright,  45. 
public  consumption,  46. 
trade  mark,  47. 

due  to  artificial  conditions,  50. 
special  privilege,  48. 
under  the  East  India  Company,  34. 
Monopoly,  against  the  spirit  of  English  law,  10. 
Blackstone's  definition  of,  8. 
classification  of,  2,  33,  42,  43,  44. 
Coke's  definition  of,  8. 
combination  a  basis  of,  28. 
copyright  not  an  odious,  22. 
definition  of,  i. 

defined  in  Century  Dictionary,  8(n). 
differential  advantage,  a  test  of,  4. 
exclusiveness,  a  test  of,  7. 
English  common  law  does  not  recognize.  10. 
in  the  shape  of  special  privilege,  1 1 . 
in  liquors,  39. 
in  railways,  40. 

in  raw  silk  and  various  piecegoods,  35. 
in  salt  and  opium,  35,  36,  37. 
in  saltpetre,  38. 
limitation,  a  basis  of,  7. 


460 


meaning  of  the  term,  i. 

notion  of,  2. 

of  caste  in  India,  74. 

effect  of,  74. 

in  Manu,  74. 

in  Mitakshara,  75. 
of  trading  companies,  77. 

regulation  of  trade  by,   80. 

the  Eastland  Company,  81. 

the  Muscovy  Company,  81. 

the  Turkey  Company,  82. 

the  early  African  Companies,  83, 

the  Hudson's  Bay  Company,  84. 

the  British  East  India  Company,  85. 
opposed  to  free  competition,  i. 
patent  regarded  by  some  as  an  odious,  20. 
popular  feeling  against  combination  making  for,  58. 
public  policy  demands  recognition  of  three  incidents  of,  16. 
substantial  unity  of  action,  the  essence  of,  31. 
trade  mark  not  an  odious,  23. 
Municipal  monopolies,  3,  5,  33. 

examples  of,  34. 
Muscovy  Company,  The,  81. 

Natural  monopolies,  2,  5,  33. 

Opium  monopoly,  fiscal,  35. 
history  of,  36. 

Passing  off  and  trade  mark  distinguished,  297. 

registration  not  essential  in  an  action  for,  301. 
Patent,  an  odious  monopoly,  20. 

beginning  of  legal  monopolies,  92. 

conflicts  between  sovereign  and  people  touching,  92. 

enforcement  of  rights  and  remedies  in  regard  to,  122. 
from  the  point  of  view  of  the  public,  122. 
from  the  point  of  view  of  the  individual,  124. 

extension  of  the  term  of  letters,  120,  146. 

forms  of  proceedings  in  cases  of  revocation  of,  124,  157.  152. 

first  exception  to  the  common  law  rule,  17. 

grounds  on  which  extension  may  be  granted,  120. 

history  of,  92. 

Indian  law  of,  20. 

invention  an  essential  thing  for  a,  100. 

no  one  entitled  as  of  right  to,  97. 

parts  played  by  utility,  novelty  and  subject  matter  in,  114 

prescribed  forms  for  application  for  grant  of,  100. 

present  law  of ,  94. 

principle  on  which  granted,  97. 


46i 

social  monopoly,  45. 

suit  for  infringement  of,  125,  153. 

account  of  profits,  133. 

certificate  of  validity  of  patent,  134,  153. 

damages,  a  relief,  131. 

delivery  up  of  the  article,  a  remedy,  134. 

innocent  inf ringer  protected,  127,  153. 

injunction,  a  relief,  127. 

interlocutory  injunction,   129. 

mere  possession,  no  ground  for  granting  injunction,  128. 

plaintiff  should  select  in  case  of  several  inf  ringers,  131. 

reliefs  in,  127. 
specification  to  support  a,  1 16. 

essentials  of  complete,  116. 

good  faith  essential,  117. 

construction  of,  118. 
three  things  essential  for,  100. 
term  of,  119. 

Patents  and  Designs  Act  of  1907,  20. 
Patents  and  Designs  Act  of  1911,  The  Indian,  20. 

important  provisions  discussed,  98. 
Patents  and  Designs  Act  of  1911,  The  Indian,  137-167. 
appendix,  137-140. 
application  for  patent,  142. 

advertisement  on  acceptance  of  application,  144. 
amendment  of  application  or  specification  by  controller,  147. 
amendment  of  specification  by  court,  148. 
application  for  registration  of  designs,  156. 
application  of  certain  provisions  of  the  Act  to  designs,  160. 
appeals  to  the  Governor  General  in  Council,  162. 
application  and  notices  by  post,  163. 
agency,  164. 

compulsory  licenses  and  revocation,  149. 
certificate  of  validity  questioned  and  costs  thereon,  153. 
certificate  of  registration,  156. 
copyright  in  registered  designs,  157. 

controller  may  take  directions  of  Governor  General  in  Council,  162. 
certificate  of  controller  to  be  evidence,   162. 
definitions,  141,  142. 
date  of  patent,  145. 

declaration  by  infant,  lunatic,  etc.,  163. 
effect,  extent  and  form  of  patents,  145. 
extention  of  term  of  patent,  146. 
exemption  of  innocent  inf  ringer  from  liability,  153. 
effect  of  disclosure  on  copyright,  158. 
entry  of  assignments  and  transmissions  in  registers,  161. 
exercise  of  discretionary  power  by  controller,  162. 
fraudulent  application  for  patents,  145. 


462 

framing  issues  for  trial  before  other  courts,  152. 

foreign  vessels  in  British  Indian  waters,  155. 

fees,  160. 

grant  and  sealing  of  patent,  144. 

grant  of  patent  to  two  or  more  persons,  154. 

hearing  with  assessors,  154. 

inquiry  before  sealing  patent,  144. 

inspection  of  registered  designs,  158. 

information  as  to  existence  of  copyright,  158. 

inspection  of  and  extracts  from  registers,   160. 

loss  or  destruction  of  patent,  155. 

models  to  be  furnished  to  Indian  museums  155. 

notice  of  proceedings  to  persons  interested,  152. 

novelty  of  invention,  154. 

notice  of  trust  not  to  be  entered  in  registers,  160. 

opposition  to  grant  of  patent,  144. 

order  for  inspection  etc.  in  suits,   153. 

officers  and  clerks,  160, 

proceedings  upon  application  for  patent,  143. 

patent  to  bind  Crown,  149. 

power  of  controller  to  revoke  surrendered  patent,  151. 

petition  for  revocation  of  patent,  151. 

power  of  High  Court  to  stay  proceedings  etc.,  153, 

provisions  as  to  exhibition  of  inventions,  155. 

provisions  as  to  exhibition  of  designs,  158. 

piracy  of  registered  designs,  159. 

patent  office,  160. 

privilege  of  reports  of  controller,  161. 

prohibition  of  publication  of  specification  etc.,  161. 

power  of  controller  to  correct  clerical  errors,  161. 

powers  of  controller  in  proceedings  under  Act,  162. 

publication  of  patented  inventions,  162. 

power  for  Governor  General  in  Council  to  make  rules,  164. 

restoration  of  lapsed  patent,   147. 

restriction  on  recovery  of  damages,  148. 

register  of  patents,  148. 

register  of  patents  worked  outside  British  India,  150. 

revocation  of  patents  on  public  grounds,  151. 

remedy  in  case  of  groundless  threats  of  legal  proceedings,  154. 

registration  of  designs  in  new  classes,  156. 

register  of  designs,  156. 

requirements  before  delivery    on  sale   of    article   to    which    registered 

design  has  been  applied,  157. 
rectification  of  registers  by  court,  161. 
refusal  to  grant  patent  etc.,  162. 

reciprocal  arrangements  with  United  Kingdom  etc.,  165. 
repeal  of  Inventions  and  Designs  Act  of  1888,  166. 
specification  as  to  the  nature  of  invention,  143. 


463 

security  for  the  payment  of  all  costs,  152. 
suits  for  infringement  of  patents,  153. 
subscription  and  varification  of  certain  documents,  163. 
saving  for  prerogative,    166. 

substitution  of  patents  for  rights  under  repealed  Act,  166. 
schedule,  166,  167. 

title,  extent  and  commencement,  141. 
term  of  patent,  146. 

transmission  of  decrees  and  orders  to  the  controller,  153. 
transmission  of  certified  printed  copies  of  specification,  etc.,  163. 
use  of  invention  on  acceptance  of  application,  144. 
wrongful  use  of  words  patent  office,  164. 

Patents  and  Designs  (Temporary  Rules)  Act  of  1915,  168,  169. 
definition,  169. 
power  to  make  rules,  169. 
power  in  case  of  exclusive  privilege,  169. 
short  title,  168. 

Patents  and  Designs  Rules,  1912,  170-198. 
agency,   171. 

application  for  grant  of  patent,  171. 
amendment  how  to  be  made  of  specification,  171. 
amendment  of   application,  173. 
address  for  service,  174. 
application  to  register  a  design,  174. 
acceptance  of  the  application  by  controller,  174. 
appeals,  175. 

communication  to  the  office,  170. 
classification  of  goods,  174. 

copies  and  specimens  of  designs,  174. 

conversion  of  exclusive  privilege,  175. 

controller  may  require  statement,  176. 

controller  may  direct  advertisement,  176. 

definition,  170. 

decision  of  controller,  174. 

date  of  appeal,  175. 

extention  of  period  of  copyright  in  registered  designs,  175. 

exercise  of  discretionary  power  of  controller.  176. 

fees,  170. 

forms  to  be  used,  170. 

filing  of  statement,  172. 

form  of  patent,  173. 

forms  for  application  of  patent  etc.,  179-196. 

general  powers  of  amendment,  176. 

general  power  to  enlarge  time,  176. 

hearing,  173. 

inspection  of  designs,  175. 

marking  of  articles  before  delivery  on  sale,  175. 

notices  of  opposition,  172. 


464 

non-completion  within  six  months,  175. 

notices,  197. 

opposition  of  restoration,  173. 

opposition  to  the  amendment,  173. 

opposition  to  surrender,  174. 

objections,  174. 

procedure  when  patent  has  been  accepted,  173. 

restoration  of  a  lapsed  patent,  173. 

request  for  information,  173. 

request  to  enter  a  claim,  175. 

rectification  of  the  register,  175. 

short  title  and  commencement,  170. 

size  etc.  of  documents,  170. 

signature  and  verification  of  documents,  171. 

specification,  171. 

size  of  drawings  etc.,  172. 

sealing,  173. 

surrender  of  patents,  173. 

schedule  I,  176. 

schedule  II,  178. 

schedule  III,  196. 

schedule  IV,  197. 

Patents,  Designs  and  Trade  Marks  Act  of  1883,  300. 
Patentable  inventions,  involves  discovery  resulting  in  a  '  new  thing  ',   104. 

'  new  thing  *  connoted  by  the  terms  '  subject-matter  '  and  '  novelty,'  104. 

case  law  on,  105-107. 

adaptation  of  old  materials  or  old  processes  not,  108. 

improvements  in  some  cases  are,  109. 

utility  an  essential  factor  in,  109. 
Patentability,  prior  use  of  invention  in  public  will  affect,  in. 

what  constitutes  public  uses,  112. 
Patentee  must  be  the  true  and  first  inventor,  1 10. 
Pool,  a  combination,  410. 
Public  policy,  antinomies  arising  from  different  views  as  to,  27. 

demands  recognition  of  the  three  incidents  of  monopoly,  16. 

exception  to  the  common  law  rule  based  on,  17. 

problem  of  monopoly  requires  due  regard  to  question  of,  16. 

requiring  freedom  of  trade,  26 
freedom  of  contract,  26. 

what  is,  1 6. 
Public  welfare,  legal  validity  of  express  grants  rests  on  grounds  of,  17. 

Railways,  governmental  monopolies,  40. 
company-owned  or  state-owned,  40. 
proportion  of  state-owned  to  company-owned, 

in  United  States,  40. 

in  American  Continent,  41. 

in  Australia,  41. 


465 


in  Europe,  41. 

in  British  India,  41. 

in  India  present  a  great  variety  in  modes  of  management,  41. 
concessions    granted  by  government  for  construction  of  branch 

lines,  41. 
Regrating,  meaning  of,  57. 

regarded  as  an  offence,  57. 
Regulation  31  of  1793,  35. 

Restraint  of  trade,  application  of  the  principle,  343. 
adoption  of  elastic  doctrine  by  courts,  346. 
contracts  under  old  law  void,  345. 
defined,  25. 
different  stages,  27. 

distinction  between  general  and  particular,  367. 
history  of  contracts,  341. 
Indian  law,  367. 

based  on  the  American  law,  368. 
Indian  case  law,  370-379. 
limitation  of  space,  28,  353. 
principle  on  which  the  rule  is  based,  342. 
public  policy  and  restraint  of  trade,  344-345. 
public  policy  uncertain  and  fluctuating,  344. 
reasons  for  the  rule  against  contracts,  344. 
severability  of  a  covenant,  367. 
section  27,  Indian  Contract  Act,  367,  360. 
slavery- bond  cases,  379. 
time  limit,  28. 
test  of  reasonableness,  347. 
Ring,  a  combination,  411. 

, Royal  patent,  used  to  be  granted  as  special  privileges,  n. 
became  notorious  in  the  reign  of  Queen  Elizabeth,  12. 
old  cases  under  the  head  of,  12. 

Salt  monopoly,  fiscal,  35. 

history  of,  37. 
Saltpetre  monopoly,  fiscal,  39. 

history  of,  39. 
Sherman  Act  of  1890,  437, 
Simple  combination,  409. 

Pools,  410. 

Rings,  411. 

Kartells,  411. 

decisions  as  to,  412. 
Social  monopolies,  explained,  44. 

patent,  45. 

copyright,  45. 

trade  mark,  47. 


466 

Public  consumption,  46. 

St*  J^  ^  artifidal  conditions,  50 

®taP^  merchants  of  the,  67 

vStatutes  :— 


12  Geo.  IHj  Q  7l 
8  Anne,  C.  19,  22/ 
54  Geo.  in,  C.  ictf 


•  '359),  383. 

'  La  '350,, 


and  Protection  of  r 


39  and  40  Viet.,  C  22  (Tr* 

' 


Coke's  commentary  on    9c 

has  now  become  obsolete,  9 
Statute  of  Henry  VI  of  ,424    ' 
Statute  of  BdwardVIof^ls 
Statute  of  eii2abethof  ;s 


Test  of  monopoly 


o4 

abandonment  of  a,  315 
assignment  of,  33I. 

^longing  to  manufacturers,  303 
Counterfeit,  311. 


467 


does  not  come  within  the  odium  of  monopoly,  23. 

defined,  23(n). 

English  leading  cases  on,  317. 

infringement  of,  299. 

invalid,  317. 

law,  a  recent  growth,  294. 

no  registration  in  England  till  1875,  300. 

policy  of  law  relating  to,  23. 

principle  in  an  action  for  infringement  of,  295  . 

prior  user  outside  India,  308. 

registration  essential  under  statute,  301. 

remedies  in  an  action  for  infringement  of,  331. 
injunction,  332. 
interlocutory  injunction,  333. 
delivery  up  or  erasure,  334. 
account  of  profits,  334. 
innocent  infringer,  335. 
continuing  wrong,  limitation,  337. 
summary,  337. 
Trade  mark  or  name,  distinctive  and  not  de.scriptive,  32: 

distinctive  mark  may  cease  to  be  distinctive,  332. 

becomes  publici  juris,  322. 
Trade  Marks  Act  of  1905,  331. 
Trade  marks  Registration  Act  of  1875,  300. 
Trade  name,  primary  and  secondary  signification,  309. 
Trade,  restraint  of,  application  of  the  principle,  343. 

adoption  of  elastic  doctrine  by  courts,  346. 

contracts  under  old  law  void,  345. 

defined,  25. 

different  stages,  27. 

distinction  between  general  and  particular,  367. 

history  of  contracts,  341. 

Indian  law,  367. 

based  on  the  American  law,  .368. 

Indian  case  law,  370. 

limitation  of  space,  28,353. 

principle  on  which  the  rule  is  based,  342. 

public  policy  uncertain  and  fluctuating,  344. 

reasons  for  the  rule  against  contracts,  344. 

sever  ability  of  a  covenant,  367. 

section  27,  Indian  Contract  Act,  367,  369. 

slavery-bond  cases,  379. 

time  limit,  28. 

test  of  reasonableness,  347. 
Trade  Union  Act  of  1871,  386. 

Trade  Union  Act  Amendment  Act  of  1876,  386(n). 
Trade  Union  Act  of  1913,  386(n). 
Trading  Companies,  monopoly  of,  77. 

regulation  of  trade  by,  80. 


V 


468 

the  Eastland  Company,  Si. 

the  Muscovy  Company,  81. 

the  Turkey  Company,  82. 

the  early  African  Companies,  83. 

the  Hudson's  Bay  Company,  84. 

the  British  East  India  Company.  85. 
Trust  form  of  combination,  415. 

trusts,  417. 

suppression  of,  424. 

opinion  against  restrictive  legislation,  425. 

tactics,  431. 
Turkey  Company,  The,  82. 

Weighing  machines,,  monopoly  in  respect  of,  24. 

Vajnavalkya,  reference  to  monopolies,  in,  52,  55,  56. 
power  of  the  king  to  regulate  prices,  56. 


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Under  Pat.  "Ref.  Index  File" 
Made  by  LIBRARY  BUREAU