A general assignment, or agreement to assign, all inventions thereafter made by a party, is not only contrary to public policy, but is void under the patent laws of the United States.34 But a contract to assign future inventions is valid, where it relates to a particular subject and imposes only such restraint upon the assignor as is fairly and reasonably necessary for the protection of the assignee under all the circumstances of the case.85 An illustration of such a reasonable and valid contract is a contract for the sale of letters patent for a machine, "together with all improvements I may hereafter make." 36
Smalley v. Greene, 52 Iowa, 241, 3 N. W. 78, 35 Am. Rep. 267; Bunn v. Guy, 4 East, 190. Agreement not to practice dentistry in a particular town. Turner v. Abbott, 116 Tenn. 718, 94 S. W. 64, 6 L. R. A. (N. S.) 892, 8 Ann. Cas. 150. See "Contracts," Dec. Dig. (Key-No.) § 117; Cent. Dig. §§ 554-569.
33 TODE v. GROSS, 127 N. Y. 480, 28 N. E. 469, 13 L. R. A. 652, 24 Am. St. Rep. 475, Throckmorton Cas. Contracts, 270 (affirming 51 Hun, 644, 4 N. Y. Supp. 402). And see Fowle v. Park, 131 U. S. 88, 9 Sup. Ct. 658, 33 L. Ed. 67; Wiley v. Baumgardner, 97 Ind. 66, 49 Am. Rep. 427; Vickery v. Welch, 19 Pick. (Mass.) 523; Peabody v. Norfolk, 98 Mass. 452, 96 Am. Dec. 664; Jarvis v. Peck, 10 Paige (N. Y.) 118. Condition of contract of employment that servant shall not use or divulge trade secrets is not invalid as in restraint of trade. Thum Co. v. Tloczynski, 114 Mich. 149, 72 N. W. 140, 38 L. R. A. 200, 68 Am. St Rep. 469; Simmons Medicine Co. v. Simmons (C. C.) 81 Fed. 163; McCall Co. v. Wright, 198 N. Y. 143, 91 N. E. 516, .31 L. R. A. (N. S.) 249. See "Contracts," Dec. Dig. (Key-No.) § 117; Cent. Dig. §§ 554-569.
34 Rev. St § 4898 (U. S. Comp. St. 1901, p. 3387). See Consolidated Ry., etc., Co. v. United States Light & Heating Co., 77 N. J. Eq. 285, 78 Atl. 684. See "Contracts," Dec. Dig. (Key-No.) § 116; Cent. Dig. § 552.
35 Consolidated Ry., etc., Co. v. United States Light & Heating Co., supra;
170. A combination between dealers in a necessary commodity to control and enhance the price by preventing competition in the sale thereof, or by decreasing the production, or by withholding it from the market, or other illegitimate means, is contrary to public policy.
171. Combinations to prevent competition have been allowed under particular circumstances.
172. A combination between laborers, mechanics, and other workmen to control the price of their labor, by the weight of authority, is lawful if unlawful or unreasonable means for accomplishing the object are not contemplated, the mere fact of combination to control the price of labor not being per se illegal.
A monopoly, as now understood, is a combination the tendency of which is to prevent competition and to control prices to the detriment of the public.37 So a trust, as the term is commonly employed, is a combination for the purpose of establishing a monopoly.38 To render a contract void on the ground that its object is to establish a monopoly or trust, it is not necessary to prove any evil intent of the parties or actual injury to the public. It is sufficient to show that the necessary tendency of the contract is to control prices, limit production, or suppress competition in such a way as to create a monopoly to the injury of the public.39 So it is not necessary to show that the contract relates to one of the prime necessaries of life. It is sufficient that it relates to a legitimate article of trade or commerce in extensive use.40
Reece Folding Machine Co. v. Fenwick, 140 Fed. 287, 72 C. C. A. 39, 2 L. R. A. (N. S.) 1094 and note; Westinghouse Air Brake Co. v. Chicago Brake & Mfg. Co. (C. C.) 85 Fed. 786. And see Printing & Numerical Registering Co. v. Sampson, L. R. 19 Eq. 462. Contract of employment between company using patented machines and mechanic, which requires that improvements in machines made by mechanic shall belong to company, is not unreasonable. Hulse v. Machine Co., 65 Fed. 864, 13 C. C. A. 180. See "Contracts," Dec. Dig. (Key-No.) § 116; Cent. Dig. § 552.
36Aspinwall Mfg. Co. v. Gill (C. C.) 32 Fed. 697. See "Contracts," Dec. Dig. (Key-No.) § 116; Cent. Dig. § 552.
37 Pocahontas Coke Co. v. Powhatan Coal & Coke Co.. 60 W. Va. 508, 56 S. E. 264, 10 L. R. A. (N. S.) 20S, 116 Am. St Rep. 901, 9 Ann. Cas. 6G7. And see STANDARD OIL CO. OF NEW JERSEY v. UNITED STATES, 221 U. S. 1, 31 Sup. Ct. 502, 55 L. Ed. 619, 34 L. R. A. (N. S.) 834, Ann. Cas. 1912D, 734, Throckmorton Cas. Contracts, 274. See "Contracts," Dec. Dig. (Key-No.) § 116; Cent. Dig. §§ 542-552.
38 Pocahontas Coke Co. v. Powhatan Coal & Coke Co., 60 W. Va. 508, 56 S. E. 264. 10 L. R. A. (N. S.) 268, 116 Am. St. Rep. 901, 9 Ann. Cas. 607. Bee "Contracts," Dec. Dig. (Key-No.) § 116; Cent. Dig. §§ 542-552.
The law does not undertake to say to a dealer in a commodity, even though it may be one of the necessaries of life, that he shall not sell it above a certain price, nor to compel him to sell it at all. Singly, he may suspend sales and raise the price to suit his own interests, though it may be detrimental to the public interest. The law does, however, condemn a combination between several manufacturers or dealers in a necessary commodity, the object of which is to control and enhance the price by preventing competition in the sale thereof, or by decreasing the production, or by withholding it from the market, or other illegitimate means. "When competition is left free," it was said by the Pennsylvania court, in holding a combination between coal companies void, "individual error or folly will generally find a correction in the conduct of others. But here the companies have combined together to govern the supply and the price of coal. * * * This combination has a power in its confederated forms which no individual can confer. The public interest must succumb to it, for it has left no competition free to correct its baleful influence. When the supply of coal is suspended, the demand for it becomes importunate, and prices must rise; or, if the supply goes forward, the price fixed by the confederates must accompany it.' * * * The influence of a lack of supply, or a rise in the price, of an article of such prime necessity, cannot be measured. * * * Such a combination is more than a contract; it is an offense."*1