business. An agreement by an employee selling oil in one city which restrains him from carrying on his business in the entire state, with the exception of one other city, is void, and is not divisible so as to be enforced as to the city in which the employee had been engaged.2

§ 775. Where one corporation engaged in a manufacturing business sells out to another corporation, and the officers of the old corporation become the officers of the new, it is competent for them to bind themselves not to engage in a like business or compete in any manner with the new corporation for a period of five years. A contract between a manufactur

1Oppenheimer et al. v. Hirsch (1896), conducted as a part of a new and 33 N. Y. Supp. 311.

2 Consumers' Oil Co. v. Nunne macker (1895), 142 Ind. 560, 41 N. E. R. 1048.

3 Anchor Electric Co. v. Hawks (1898), 171 Mass. 101, 50 N. E. R. 509. Inasmuch as the stipulation in the present case is only to do no business for five years that shall interfere with or compete with the proposed business of the Anchor Electric Company, it seems quite clear, under the authorities in Massachusetts, that the stipulation goes no further than is reasonably necessary to protect the good-will of the business sold by the defendant's corporation, and that it should therefore be held valid, unless a distinction is to be made between competition with the business of the Anchor Electric Company and competition with the business sold by the defendant and his company. The business sold by the defendant was chiefly installing and constructing electric plants and appliances. The business of the new corporation included with this that which formerly was done by the other two companies, namely, manufacturing and dealing in electrical appliances. In considering this branch of the case, the nature of the contract of sale should be regarded. The defendant's business was sold to be

more general business. Very likely the price paid for it was larger, and the good-will was deemed more valuable, because it was to be so conducted. The plaintiff corporation carried on different, but closely connected, departments of the electrical business, and the different departments were so related to each other that sometimes it would be difficult, if not impossible, to distinguish between competition with one department and competition with another. Moreover, this was a contract for mutual profit in conducting the new business, which, under the findings of the court, has all presumptions in its favor. Each party was to devote himself to the interests of the new corporation. Although the parties provided for the establishment of a corporation. their arrangement was in the nature of a copartnership. The profits of the new corporation were to be shared by the old corporations which had sold their property and become stockholders in the new one. It is difficult to see any good reason why the contract of the three persons to promote the interests of the new corporation should not be binding upon them. This contract necessarily includes the agreement not to enter into competition against the new corporation."

ing corporation, whose business extends throughout the United States and Canada, and one of its traveling salesmen, who has been in its employ for several years, whereby he agrees not to enter the service of any business competitor of the corporation for three years after leaving its service, is valid.1

§ 776. But equity will not enforce contracts in restraint of trade, although good in law, if their terms are so hard and complex as to be unconscionable.?

An agreement between a manufacturer and an employee that the employee should be instructed in the art of making platform scales, and during his employment be paid $1.75 a day, and on the part of the employee that in consideration of the instruction and employment, and of the additional sum of $1 in hand paid, he would pay the manufacturer $50 for every platform scale which he, the employee, should afterwards make for any other person than his said employer, unless he had the employer's written consent to make such scales, is in general an unreasonable restraint of trade and void, since it binds the employee for his entire life-time to account for every pair of scales he might make.3

"Admitting that the agreement in this case was founded in a sufficient consideration, is it reasonable to impose such a tribute upon the labor of a mechanic? Is not its direct tendency such as to restrain his skill in a useful art? And even if at law damages might be recovered for breach of such contract, ought a court of equity to enforce it? According to the doctrine of the cases these questions will admit of no answers that are favorable to the plaintiff. He was not the inventor and patentee of scales, selling his rights to another. Nothing of that sort appears in the case. It was a sale merely of his handicraft; and whilst the parties were free to fix their own valuation of that, a contract that restrained the industry of the defendant, not in a particular locality, but every where, not for a specified period, but for a life-time, was contrary to public policy and void."4

1 Carter v. Alling (1890), 43 Fed. R. 208.

2 Keeler v. Taylor (1866), 53 Pa. St. 467; Kimberly v. Jennings, 1 Sim.

3 Keeler v. Taylor (1866), 53 Pa. St. 467.

4 From opinion in case cited.

§ 777. Contracts between owners of patents.- An agreement between joint owners of letters patent which provides for the continuance of the business by one, and that the other after a specified time shall refrain therefrom, is not in restraint of trade. The theory and purpose of the patent laws is to create a limited monopoly. In consideration that the inventor will give his invention to the public with such drawings and specifications as will enable the public to freely use the inventions at the expiration of seventeen years, a grant is made to him of an exclusive right to the monopoly of the patented article or device during that time. The rights so acquired under grant of the United States are inconsistent with the invention being made subject to the provisions of the anti-trust laws of any of the several states, and a corporation organized for the express purpose of acquiring all or as many as possible of the patents covering any particular article, and which as a matter of fact has acquired many of such patents, is not subject to the antitrust laws of a state.2

§ 778. Sale of a practice.- A physician or lawyer who sells his practice may enter into a contract with his successor not to engage in practice in the same place or within a limited area, and such contract will be enforced even though it is unlimited as to time.3

§ 779. Trade secrets and inventions.- Contracts relating to the exclusive use of secret words and trade secrets, also to the exclusive use of trades protected by patents, are supported upon somewhat different principles, since it cannot be urged that the public has any right to the use of a trade secret, and the law specifically confers upon the inventor the exclusive

1 Fox Pressed Steel Co. v. Schoen 537; Cole v. Edwards (1895), 93 Iowa, et al. (1896), 77 Fed. R. 29.

2 Columbia Wire Co. v. Freeman Wire Co. et al. (1895), 71 Fed. R. 302. In this connection, see Edison Electric Light Co. v. Sawyer-Mann Electric Co. (1892), 53 Fed. R. 592; Strait v. Harrow Co. (1892), 51 Fed. R. 819; Soda Fountain Co. v. Green (1895), 69 Fed. R. 333.

3 McCurry v. Gibson (1895), 108 Ala. 451, 18 S. R. 806; Webster v. Will iams (1896), 62 Ark. 101, 34 S. W. R.

477, 61 N. W. R. 940; Hill v. Gudgell (1887), 9 Ky. Law Rep. 436; Warfield v. Booth (1870, 33 Md. 63; Linn v. Sigsbee (1873), 67 Ill. 75; Smalley v. Greene (1879), 52 Iowa, 241; Timmerman v. Dever (1883), 52 Mich. 34, 17 N. W. R. 230; Holbrook v. Waters (1854), 9 How. Prac. 335; Appeal of McClurg (1868), 58 Pa. St. (8 P. F. Smith), 51; Betts' Appeal (1881), 10 Wkly. Notes Cas. 431; Butler v. Burleson (1844), 16 Vt. 176.

right to use his invention. Contracts whereby trade secrets and inventions are transferred and protected are therefore very generally enforced.1

While the policy of the law does not permit, as a rule, a general restraint of trade, the sale or transfer of a secret process is somewhat different, and the party selling such secret may restrain himself generally from using it as against his grantee. The sale of a secret process is more akin to the sale of a patent.3

The sale of the business of manufacture and sale of porcelain teeth, together with the secret art of the manufacture of the same, accompanied by this covenant: "And the party of the first part will not carry on, or cause to be carried on by any person with whom he shall be interested, the manufacture of porcelain teeth, or impart the knowledge of manufacturing the same to any person, other than as aforesaid," is a valid contract.

Taylor v. Blanchard (1866), 13 Allen, 370; Vickery v. Welch (1837), 19 Pick. 523; Stearns v. Barrett (1823), 1 Pick. 443.

the parties was not to restrain trade, but to insure to the purchasers of an interest in the secret the full benefit of their purchase. And this could

2 Jarvis & Lobdell v. Peck et al. not be done by restricting Jarvis & (1843), 10 Paige, 118.

3 Bryson v. Whitehead (1822), 1 Sim. & Stu. 74. In Jarvis & Lobdell v. Peck et al., the chancellor said: "Assuming then that the relinquishment of the interest of the mortgagees in this business, and in the secret which constituted a part of that interest, to Trimble & Gunn, to have formed a material part of the consideration of the bond and mortgage, I think the agreement of the mortgagees that they would give to Trimble & Gunn the full benefit of the secret which they had purchased, by refraining from engaging in the business themselves or as the agents or workmen of others, and by keeping the secret by which the business was carried on from the knowledge of others, did not vitiate the bond and mortgage, even if a stipulation to give the $100,000 bond formed a part of the same agreement. For, as I have before observed, the object of

Tremain from carrying on the particular business in which the secret process was used, within certain specified limits merely. For if the secret was valuable, the purchasers thereof were interested in controlling its use at other places than that in which they should think proper to carry on the business in person. And though they could not carry on the business themselves in every part of the state, they could sell out their secret to others and give to the purchasers thereof the right to use it within particular limits. This, however, could not be done with the same profit to themselves if the restriction upon Jarvis & Tremain was limited to a particular locality. The agree ment, therefore, was not one which imposed an onerous restriction upon Jarvis & Tremain that was no benefit to the other parties."

4 Alcock v. Gilberton et al. (1855), 5 Duer, 76.

The sale of a business secret, and the engagement by the vendor not to use that secret in conducting any business himself, is entirely valid, even though the restriction is not bounded by either time or geographical limitations.

The sale of a proprietary remedy or preparation is akin to the sale of a secret process, and an agreement by a partner whose name is used as part of the name of a proprietary preparation, on selling out his interest to the other partner,

1. That he will not use, or allow his name to be used, in the preparation of any similar articles.

2. That he will not engage in the manufacture thereof. 3. That he will not impart to any one the secret or recipe for the manufacture thereof.

4. That he will not engage in the manufacture of any article similar to this.

5. That he will allow the plaintiff the free, uninterrupted and exclusive use of his name, in the manufacture and sale of said preparation, is binding and valid in part.' It was objected that these covenants were in restraint of trade and void, and the court held that in so far as the agreement covered the manufacture of any similar article the agreement was void as being too general; but in so far as the agreement covered the manufacture of the particular proprietary preparation in question under either the same name or a name so similar as to deceive the public, the agreement was valid and binding notwithstanding that it was unlimited as to either place or time.2

1 Gillis v. Hall (1870), 2 Brews. 342. 2" In this case the restraint is general; it has no limitation as to time or place, and we will not stop to inquire whether the interests of trade will suffer, in this particular instance, by the enforcement of such a restriction, as we are dealing with general rules, which, to be of any value, must be uniform. I am of opinion that the covenant of defendant Hall that he will not engage in the manufacture of any article of similar nature to that of the preparation of plaintiff, is void, and that it cannot be enforced against him. He may manufacture and sell as many arti

cles as he may desire for the preservation of the hair; but he may not manufacture or sell any of such articles as and for 'Hall's Vegetable Sicilian Hair Renewer.' The right to make and vend an article with that particular name and trade-mark he has parted with. He has bartered away his name, so far as the right to apply it to this preparation is concerned. That a man may be enjoined from using his own name upon goods of his own manufacture is too well established to need authority, and I will cite only a few familiar cases: Bajou's Case. vol. 140 of the Court of Appeals Decisions, Paris, 1854; Sykes