Sec 436

A patent right, however, is not subject to these conditions; and contracts have been validated when transferring such rights either within particular states or districts,2 or absolutely without restriction as to space.3 The rights, also, to an unpatented invention may be, in this way, sold, and the sale may contain a binding covenant, giving exclusive rights to the vendee without limits as to space.4 Hence a stipulation in such a sale that the vendor will not disclose the process nor carry on the manufacture at any place whatsoever, is good.5

Sec 437

It is not against the policy of the law that parties should bind themselves to deal, within a certain range, exclusively with each other. The law of partnership rests on a principle of this kind; and we have still more pointed illustrations in the English cases which sustain purchases of land from brewers with covenants that the purchaser, in case he opens a public house, shall buy all his beer from the vendor.6 A covenant, also, by an author to write exclusively for a particular publisher, will be sustained.7 - A contract, also, by which a railroad company agrees to give all its business to a ferry company, is not void as against public policy when it binds the ferry company to give all the facilities the public requires.1 To validate covenants of this class, however, the commodity or services rendered should be fairly up to the market value;2 and such covenants will not be extended so far as to cover agreements by employers to induce their employees to deal exclusively in a particular store.3 - A contract whereby a railroad corporation grants to a telegraph company the exclusive right to put up on the railroad track a telegraph line is invalid as against public policy. A contract giving an exclusive right to a system of poles has been sustained in Illinois;4 but the use of the entire roadbed cannot be thus limited. "In our opinion," said McCrary, J., in 1882,5 "it is not competent for a railroad company to grant to a single telegraph company the exclusive right of establishing lines of telegraphic communication along its right of way. The purpose of such contracts is very plainly to cripple and prevent competition, and they are therefore void, as being in restraint of trade, and contrary to public policy. They are also in contravention of the act of congress of July 24, 1866, which authorizes telegraph companies to maintain and operate lines of telegraph 'over and along any of the military or post roads of the United States which have been, or may hereafter be declared such by act of congress.'" The last point might be open to criticism, were it not that it is sustained by the supreme court of the United States.6 The first point may be now regarded as settled. Telegraph communication is now as much a business necessity as is railway transportation; and a contract which would operate to give a monopoly to a particular telegraph company must be regarded as conflicting with public policy.7

Patent rights and secret processes may be sold without limitation.

Parties may bind themselves to deal exclusively with each other, and employee to work exclusively for employer.

1 Garrison v. Nute, 87 III. 205.

2 Printing Registering Co. v. Sampson, L. R. 19 Eq. 482; Bryson v. Whitehead, 1 Sim. & St. 74; Kinsman v. Parkhurst, 18 How. U. S. 289; Morse Drill Co. v. Morse, 103 Mass. 73; Stearns v. Barrett, 1 Pick. 443.

3 Sanford v. Messer, 1 Holmes, 149; Dorsey Rake Co. v. Bradley, 12 Blatch. 202; Vickery v. Welch, 19 Pick. 523; Peabody v. Norfolk, 98 Mass. 452; Morse Drill Co. v. Morse, 103 Mass. 73; Gilmore v. Aiken, 118 Mass. 94; see Jones v. Lees, 1 H. & N. 189; Thomas v. Miles, 3 Oh. St. 274; Wilson v. Mar-low, 66 111. 385.

4 Hammond v. Organ Co., 92 U. S.

724; Wetherill v. Zinc Co., 6 Fish. Pat. Cas. 50; Peabody v. Norfolk, 98 Mass. 452; Gillis v. Hall, 2 Brewst. 342; see Rousillon v. Rousillon, L. R. 14 Ch. D. 351, cited supra, sec 430; Leather Cloth Co. v. Lorsont, L. R. 9 Eq. 345.

5 Leather Cloth Co. v. Lorsont, L. R. 9 Eq. 345; Bryson v. Whitehead, 1 Sim. & St. 74; Jones v. Lees, 1 H. & N. 189; Vickery v. Welch, 19 Pick. 525; see Story Eq. Jur. 12th ed. sec 292.

6 Cooper v. Twibill, 3 Camp. 286 n; Gale v. Read, 8 East, 80; Catt v. Tourle, L. R. 4 Ch. 654; see Schwalm v. Holmes, 49 Cal. 665.

7 Morris v. Colman, 18 Ves. 437.

1 Wiggins Ferry Co. v. R. R., 73 Mo. 39.

2 Cooper v. Twibill, 3 Camp. 286 n; Thornton v. Sherratt, 8 Taunt. 529.

3 Crawford v. Wick, 18 Oh. St. 190.

4 West. Un. Tel. Co. v. Chicago R. R., 86 111. 246.

5 West. Un. Tel. Co. v. Burlington R. R., 11 Fed. Rep. 1.

6 Pensacola Tel. Co. v. West. Un. Co.,.

96 U. S. 1; West. Un. Tel. Co. v. Am. Union Co., 19 Am. Law Reg. 173.

7 Atlanta Tel. Co. v. R. R., 1 McCrary, 541; West. Un. Tel. Co. v. Bait. & Oh. R. R., McKennan, J., 1882; West. Un. Tel. Co. v. R. R., 1 McCrary, 565, 585, 597; West. Un. Tel. Co. v. Am. Tel. Co., Sup. Ct. Ga. 1880; and see supra, sec 412.

The question, then, should be, does a contract by which the exclusive use of a railroad is given to a particular company give that company such an advantage as to practically exclude all others from competition ? If it does, the contract is invalid. - It has also been much discussed whether a telephone company can contract to deal exclusively with a particular telegraph company. The validity of such a contract has been affirmed in Connecticut.1 On the other hand, it has been denied in Ohio, on the ground that under a statute prescribing the impartial transmission of dispatches (a similar statute existing also in Connecticut) no preference could be given by the telephone company to any particular telegraph company.2 - It is implied in all contracts of service that the employee should undertake no business that makes him a competitor for the business of his employer.3 In some contracts of service a pledge of this kind is expressly included, and when so included will be sustained, although it is extended to the life of the employee, provided it be limited as to space.4 And when unlimited as to space, it is good if limited to the term of service of the employee,5 or to a period extending so far as ten years after the employee leaves such service.1 And the fact of employment is a sufficient consideration for such an engagement.2

1 American Rapid Telegraph Co. v. Telephone Co., 13 Rep. 329.

2 State v. Telephone Co., 36 Oh. St. 296. In this case the court said: The American Bell Telephone Company "cannot be permitted to operate a system or line of telephones in this state, and in the face of the statute, either directly or through the agency of licenses, without impartiality; or, in other words, with discrimination against any member of the general public who is willing and ready to comply with the conditions imposed upon all other patrons or customers who are in like circumstances. . . . The property of an inventor in a patented machine, like all other property, remains subject to the paramount claims of society, and the manner of its use may be controlled and regulated by state laws when the public welfare requires it. It appears to us a proposition too plain to admit of argument that where the beneficial use of patented property, or any species of property requires public patronage and governmental aid, as, for instance, the use of public ways and the exercise of the right of eminent domain, the state may impose such conditions and regulations as in the judgment of the law-making power are necessary to promote the public good.".

3 Windscheid, sec 401; Rousillon v. Rousillon, supra, sec 430.

4 Leake, 2d ed. 737; Pilkington v. Scott, 15 M. & W. 657; Hartley v. Cummings, 5 C. B. 247; Ward v. Byrne, 5 M. & W. 562; Allsopp v. Wheatcroft, L. R. 15 Eq. 59. See Keeler v. Taylor, cited supra, sec 430.

5 Wallis v. Day, 2 M. & W. 273.