Birdsell v. Shaliol

In Birdsell v. Shaliol, 112 U.S. 485, 5 S.Ct. 244, 28 L.Ed. 768 (1884), the Court held, inter alia, that since a purchaser of an infringing machine can be restrained from continued use of the machine, the purchaser may be liable for damages for such use unless "full satisfaction" was provided to the patentee by the manufacturer. The Court explained that payment of damages by the infringing manufacturer does not automatically free the device from the patent, in the same way as would an authorized first sale by a patentee or licensee. "An infringer does not, by paying damages for making and using a machine in infringement of a patent, acquire any right himself to the future use of the machine." Birdsell, 112 U.S. at 487, 5 S.Ct. 244. The payment of damages by an infringer "does not ordinarily confer, upon him or upon others, the right to continue or repeat the wrong." Id. at 488, 5 S.Ct. 244. An infringer is not an authorized seller whose wares are free of the patent after first sale. The Court left no uncertainty: No more does one, who pays damages for selling a machine in infringement of a patent, acquire for himself or his vendee any right to use that machine. In the case of a license or a sale by the patentee, the rights of the licensee or the vendee arise out of contract with him. In the case of infringement, the liability of infringers arises out of their own wrongful invasion of his rights. The recovery and satisfaction of a judgment for damages against one wrong-doer do not ordinarily confer, upon him or upon others, the right to continue or repeat the wrong. (Birdsell, 112 U.S. at 487-88, 5 S.Ct. 244.) The Court established that while sales by the patentee or an authorized licensee can trigger the first sale doctrine, the collection of damages for infringement does not. Payment of damages by an infringing manufacturer is not an automatic "implied license" to itself or others to continue the infringement. Birdsell does not "suggest," as the panel majority postulates, that "recovery of actual damages, rather than nominal damages, from a maker and seller of a product would bar a suit against a buyer and user of the same product." Maj. op. at 864. To the contrary, Birdsell is explicit that such a bar arises "only . . . when actual damages have been paid, and upon the theory that the plaintiff has been deprived of the same property by the acts of two wrongdoers, and has received full compensation from one of them." Birdsell, 112 U.S. at 489, 5 S.Ct. 244.