377 U.S. 476 (1964)

ARO MANUFACTURING CO., INC., ET AL.
v.
CONVERTIBLE TOP REPLACEMENT CO., INC.

No. 75.

Supreme Court of United States.

Argued February 17, 1964. Decided June 8, 1964. CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE FIRST CIRCUIT.

*478 Charles Hicken argued the cause for petitioners. With him on the briefs was David Wolf.

Elliott I. Pollock argued the cause and filed a brief for respondent.

MR. JUSTICE BRENNAN delivered the opinion of the Court.

Respondent Convertible Top Replacement Co., Inc., (CTR) acquired by assignment from the Automobile Body Research Corporation (AB) all rights for the territory of Massachusetts in United States Patent No. 2,569,724, known as the Mackie-Duluk patent. This is a combination patent covering a top-structure for automobile "convertibles." Structures embodying the patented combination were included as original equipment in 1952-1954 models of convertibles manufactured by the General Motors Corporation and the Ford Motor Company. They were included in the General Motors cars by authority of a license granted to General Motors by AB; Ford, however, had no license during the 1952-1954 *479 period, and no authority whatever under the patent until July 21, 1955, when it entered into an agreement, discussed later, with AB; Ford's manufacture and sale of the automobiles in question therefore infringed the patent. Petitioner Aro Manufacturing Co., Inc. (Aro), which is not licensed under the patent, produces fabric components designed as replacements for worn-out fabric portions of convertible tops; unlike the other elements of the top-structure, which ordinarily are usable for the life of the car, the fabric portion normally wears out and requires replacement after about three years of use. Aro's fabrics are specially tailored for installation in particular models of convertibles, and these have included the 1952-1954 General Motors and Ford models equipped with the Mackie-Duluk top-structures.

CTR brought this action against Aro in 1956 to enjoin the alleged infringement and contributory infringement, and to obtain an accounting, with respect to replacement fabrics made and sold by Aro for use in both the General Motors and the Ford cars embodying the patented structures. The interlocutory judgment entered for CTR by the District Court for the District of Massachusetts, 119 U. S. P. Q. 122, and affirmed by the Court of Appeals for the First Circuit, 270 F. 2d 200, was reversed here. Aro Mfg. Co. v. Convertible Top Replacement Co., 365 U. S. 336 ("Aro I"), petition for rehearing or alternative motion for amendment or clarification denied, 365 U. S. 890. Our decision dealt, however, only with the General Motors and not with the Ford cars. Like the Court of Appeals, we treated CTR's right to relief as depending wholly upon the question whether replacement of the fabric portions of the convertible tops constituted infringing "reconstruction" or permissible "repair" of the patented combination. The lower courts had held it to constitute "reconstruction," making the car owner for whom it was performed a direct infringer and Aro, which made *480 and sold the replacement fabric, a contributory infringer; we disagreed and held that it was merely "repair." The reconstruction-repair distinction is decisive, however, only when the replacement is made in a structure whose original manufacture and sale have been licensed by the patentee, as was true only of the General Motors cars; when the structure is unlicensed, as was true of the Ford cars, the traditional rule is that even repair constitutes infringement. Thus, the District Court had based its ruling for CTR with respect to the Ford cars on the alternative ground that, even if replacement of the fabric portions constituted merely repair, the car owners were still guilty of direct infringement, and Aro of contributory infringement, as to these unlicensed and hence infringing structures. 119 U. S. P. Q. 122, 124. This aspect of the case was not considered or decided by our opinion in Aro I.

On remand, however, another judge in the District Court read our opinion as requiring the dismissal of CTR's complaint as to the Ford as well as the General Motors cars, and entered judgment accordingly. CTR appealed the dismissal insofar as it applied to the Ford cars, and the Court of Appeals reinstated the judgment in favor of CTR to that extent. 312 F. 2d 52. In our view the Court of Appeals was correct in holding that its "previous decision in this case was not reversed insofar as unlicensed Ford cars are concerned." 312 F. 2d, at 57.^[1]*481 However, we granted certiorari, 372 U. S. 958, to consider that question, and to consider also the issue that had not been decided in Aro I: whether Aro is liable for contributory infringement, under 35 U. S. C. § 271 (c), with respect to its manufacture and sale of replacement fabrics for the Ford cars.^[2]

*482 I.^[3]

CTR contends, and the Court of Appeals held, that since Ford infringed the patent by making and selling the top-structures without authority from the patentee,^[4] persons who purchased the automobiles from Ford likewise infringed by using and repairing the structures; and hence Aro, by supplying replacement fabrics specially designed to be utilized in such infringing repair, was guilty of contributory infringement under 35 U. S. C. § 271 (c). In Aro I, 365 U. S., at 341-342, the Court said:

"It is admitted that petitioners [Aro] know that the purchasers intend to use the fabric for replacement purposes on automobile convertible tops which are covered by the claims of respondent's combination *483 patent, and such manufacture and sale with that knowledge might well constitute contributory infringement under § 271 (c), if, but only if, such a replacement by the purchaser himself would in itself constitute a direct infringement under § 271 (a), for it is settled that if there is no direct infringement of a patent there can be no contributory infringement. . . . It is plain that § 271 (c)—a part of the Patent Code enacted in 1952—made no change in the fundamental precept that there can be no contributory infringement in the absence of a direct infringement. That section defines contributory infringement in terms of direct infringement—namely the sale of a component of a patented combination or machine for use `in an infringement of such patent.' And § 271 (a) of the new Patent Code, which defines `infringement,' left intact the entire body of case law on direct infringement. The determinative question, therefore, comes down to whether the car owner would infringe the combination patent by replacing the worn-out fabric element of the patented convertible top on his car. . . ."

Similarly here, to determine whether Aro committed contributory infringement, we must first determine whether the car owners, by replacing the worn-out fabric element of the patented top-structures, committed direct infringement. We think it clear, under § 271 (a) of the Patent Code and the "entire body of case law on direct infringement" which that section "left intact," that they did.

Section 271 (a) provides that "whoever without authority makes, uses or sells any patented invention. . . infringes the patent." It is not controverted— nor could it be—that Ford infringed by making and selling cars embodying the patented top-structures without any authority from the patentee. If Ford had had such authority, its purchasers would not have infringed *484 by using the automobiles, for it is fundamental that sale of a patented article by the patentee or under his authority carries with it an "implied license to use." Adams v. Burke, 17 Wall. 453, 456; United States v. Univis Lens Co., 316 U. S. 241, 249, 250-251. But with Ford lacking authority to make and sell, it could by its sale of the cars confer on the purchasers no implied license to use, and their use of the patented structures was thus "without authority" and infringing under § 271 (a).^[5] Not only does that provision explicitly regard an unauthorized user of a patented invention as an infringer, but it has often and clearly been held that unauthorized use, without more, constitutes infringement. Birdsell v. Shaliol, 112 U. S. 485; Union Tool Co. v. Wilson, 259 U. S. 107, 114; see Sanitary Refrigerator Co. v. Winters, 280 U. S. 30, 32-33; General Talking Pictures Corp. v. Western Electric Co., 305 U. S. 124, 127.

If the owner's use infringed, so also did his repair of the top-structure, as by replacing the worn-out fabric component. Where use infringes, repair does also, for it perpetuates the infringing use.

"No doubt . . . a patented article may be repaired without making the repairer an infringer, . . . but not where it is done for one who is. It is only where the device in patented form has come lawfully into the hands of the person for or by whom it is repaired that this is the case. In other words, if one without right constructs or disposes of an infringing machine, it affords no protection to another to have merely repaired it; the repairer, by supplying an essential part of the patented combination, contributing by *485 so much to the perpetuation of the infringement." Union Special Mach. Co. v. Maimin, 161 F. 748, 750 (C. C. E. D. Pa. 1908), aff'd, 165 F. 440 (C. A. 3d Cir. 1908).

Accord, Remington Rand Business Serv., Inc., v. Acme Card System Co., 71 F. 2d 628, 630 (C. A. 4th Cir. 1934), cert. denied, 293 U. S. 622; 2 Walker, Patents (Deller ed. 1937), at 1487. Consequently replacement of worn-out fabric components with fabrics sold by Aro, held in Aro I to constitute "repair" rather than "reconstruction" and thus to be permissible in the case of licensed General Motors cars, was not permissible here in the case of unlicensed Ford cars. Here, as was not the case in Aro I, the direct infringement by the car owners that is prerequisite to contributory infringement by Aro was unquestionably established.

We turn next to the question whether Aro, as supplier of replacement fabrics for use in the infringing repair by the Ford car owners, was a contributory infringer under § 271 (c) of the Patent Code. That section provides:

"Whoever sells a component of a patented machine, manufacture, combination or composition, or a material or apparatus for use in practicing a patented process, constituting a material part of the invention, knowing the same to be especially made or especially adapted for use in an infringement of such patent, and not a staple article or commodity of commerce suitable for substantial noninfringing use, shall be liable as a contributory infringer."

We think Aro was indeed liable under this provision.

Such a result would plainly have obtained under the contributory-infringement case law that § 271 (c) was intended to codify.^[6] Indeed, most of the law was established *486 in cases where, as here, suit was brought to hold liable for contributory infringement a supplier of replacement parts specially designed for use in the repair of infringing articles. In Union Tool Co. v. Wilson, supra, 259 U. S., at 113-114, the Court held that where use of the patented machines themselves was not authorized,

"There was, consequently, no implied license to use the spare parts in these machines. As such use, unless licensed, clearly constituted an infringement, the sale of the spare parts to be so used violated the injunction [enjoining infringement]."

As early as 1897, Circuit Judge Taft, as he then was, thought it "well settled" that

"where one makes and sells one element of a combination covered by a patent with the intention and *487 for the purpose of bringing about its use in such a combination he is guilty of contributory infringement and is equally liable to the patentee with him who in fact organizes the complete combination." Thomson-Houston Elec. Co. v. Ohio Brass Co., 80 F. 712, 721 (C. A. 6th Cir. 1897).

While conceding that in the case of a machine purchased from the patentee, one "may knowingly assist in assembling, repairing, and renewing a patented combination by furnishing some of the needed parts," Judge Taft added: "but, when he does so, he must ascertain, if he would escape liability for infringement, that the one buying and using them for this purpose has a license, express or implied, to do so." Id., at 723. See also National Brake & Elec. Co. v. Christensen, 38 F. 2d 721, 723 (C. A. 7th Cir. 1930), cert. denied, 282 U. S. 864; Reed Roller Bit Co. v. Hughes Tool Co., 12 F. 2d 207, 211 (C. A. 5th Cir. 1926); Shickle, Harrison & Howard Iron Co. v. St. Louis Car-Coupler Co., 77 F. 739, 743 (C. A. 8th Cir. 1896), cert. denied, 166 U. S. 720. These cases are all authority for the proposition that "The right of one, other than the patentee, furnishing repair parts of a patented combination, can be no greater than that of the user, and he is bound to see that no other use of such parts is made than that authorized by the user's license." National Malleable Casting Co. v. American Steel Foundries, 182 F. 626, 641 (C. C. D. N. J. 1910).

In enacting § 271 (c), Congress clearly succeeded in its objective of codifying this case law. The language of the section fits perfectly Aro's activity of selling "a component of a patented . . . combination . . . , constituting a material part of the invention, . . . especially made or especially adapted for use in an infringement of such patent, and not a staple article or commodity of commerce suitable for substantial noninfringing use." Indeed, this is the almost unique case in which the component was *488 hardly suitable for any noninfringing use.^[7] On this basis both the District Court originally, 119 U. S. P. Q., at 124, and the Court of Appeals in the instant case, 312 F. 2d, at 57, held that Aro was a contributory infringer within the precise letter of § 271 (c). See also Aro I, 365 U. S., at 341.

However, the language of § 271 (c) presents a question, apparently not noticed by the parties or the courts below, concerning the element of knowledge that must be brought home to Aro before liability can be imposed. It is only sale of a component of a patented combination "knowing the same to be especially made or especially adapted for use in an infringement of such patent" that is contributory infringement under the statute. Was Aro "knowing" within the statutory meaning because—as it admits, and as the lower courts found—it knew that its replacement fabrics were especially designed for use in the 1952-1954 Ford convertible tops and were not suitable for other use? Or does the statute require a further showing that Aro knew that the tops were patented, and knew also that Ford was not licensed under the patent so that any fabric replacement by a Ford car owner constituted infringement?

On this question a majority of the Court is of the view that § 271 (c) does require a showing that the alleged contributory infringer knew that the combination for which his component was especially designed was both patented and infringing.^[8] With respect to many of the *489 replacement-fabric sales involved in this case, Aro clearly had such knowledge. For by letter dated January 2, 1954, AB informed Aro that it held the Mackie-Duluk patent; that it had granted a license under the patent to General Motors but to no one else; and that "It is obvious, *490 from the foregoing and from an inspection of the convertible automobile sold by the Ford Motor Company, that anyone selling ready-made replacement fabrics for these automobiles would be guilty of contributory infringement of said patents." Thus the Court's interpretation of the knowledge requirement affords Aro no defense with respect to replacement-fabric sales made after January 2, 1954. It would appear that the overwhelming *491 majority of the sales were in fact made after that date, since the oldest of the cars were 1952 models and since the average life of a fabric top is said to be three years. With respect to any sales that were made before that date, however, Aro cannot be held liable in the absence of a showing that at that time it had already acquired the requisite knowledge that the Ford car tops were patented and infringing. When the case is remanded, a finding of fact must be made on this question by the District Court, and, unless Aro is found to have had such prior knowledge, the judgment imposing liability must be vacated as to any sales made before January 2, 1954. As to subsequent sales, however, we hold, in agreement with the lower courts, that Aro is liable for contributory infringement within the terms of § 271 (c).

In seeking to avoid such liability, Aro relies on the Mercoid cases. Mercoid Corp. v. Mid-Continent Investment Co., 320 U. S. 661; Mercoid Corp. v. Minneapolis-Honey-well Regulator Co., 320 U. S. 680. Since those cases involved essentially an application of the doctrine of patent misuse, which is not an issue in this case,^[9] they are not *492 squarely applicable to the contributory infringement question here. On the other hand, they are hardly irrelevant. The Court in Mercoid said, among other things, that the principle that "he who sells an unpatented part of a combination patent for use in the assembled machine may be guilty of contributory infringement" could no longer prevail "against the defense that a combination patent is being used to protect an unpatented part from competition." 320 U. S., at 668. As the Court recognized, its definition of misuse was such as "to limit substantially the doctrine of contributory infringement" and to raise a question as to "what residuum may be left." 320 U. S., at 669. See Report of the Attorney General's National Committee to Study the Antitrust Laws (1955), at 252. The answer to Aro's argument is that Congress enacted § 271 for the express purpose of reinstating the doctrine of contributory infringement as it had been developed by decisions prior to Mercoid, and of overruling any blanket invalidation of the doctrine that could be found in the Mercoid opinions. See, e. g., 35 U. S. C. §§ 271 (c), (d); Hearings, supra, n. 6, at 159, 161-162; and the Aro I opinions of MR. JUSTICE BLACK, 365 U. S., at 348-349 and nn. 3-4; MR. JUSTICE HARLAN, id., at 378. n. 6; and MR. JUSTICE BRENNAN, id., at 365-367. Hence, where Aro's sale of replacement fabrics for unlicensed Ford cars falls squarely within § 271 (c), and where Aro has not properly invoked the misuse doctrine as to any other conduct by CTR or AB, Mercoid cannot successfully be employed to shield Aro from liability for contributory infringement.^[10]

Thus we hold that, subject to the reservation expressed at pp. 488-491, supra, with respect to sales made before January 2, 1954, and subject to the further reservations *493 set forth in succeeding Parts of this opinion, Aro's sales of replacement fabrics for use in the Ford cars constituted contributory infringement under § 271 (c).

II.^[11]

Although we thus agree with the Court of Appeals that Aro was liable for contributory infringement with respect to the Ford cars, we find merit in a defense asserted by Aro. In our view this defense negatives Aro's liability as to some of the replacement fabrics in question and, as to the others, reduces substantially—quite possibly to a mere nominal sum—the amount of recovery that CTR may be awarded. The defense is based on the agreement of July 21, 1955, between Ford and AB. See note 4, supra. This agreement affected Aro's liability differently, we think, depending upon whether the replacement-fabric sales were made before or after the agreement date. We shall first discuss its effect on liability for the subsequent sales.

The agreement was made at a time when, as CTR states in its brief, "Ford had already completed its manufacture of all the cars here involved." Under it, Ford agreed to pay AB $73,000 for certain rights under the patent, which were defined by paragraph 1 of the agreement as follows:

"1. AB hereby releases Ford, its associated companies. . . [and] its and their dealers, customers and users of its and their products, of all claims that AB has or may have against it or them for infringement of said patents arising out of the manufacture, use or sale of devices disclosed therein and manufactured before December 31, 1955, other than the `replacement top fabrics' licensed under paragraph 3."

*494 In paragraph 3, AB licensed Ford to make and sell "replacement top fabrics" for the Mackie-Duluk topstructures, receiving in return a royalty—separate from the $73,000 lump-sum payment—of 5% of the net sales. And in paragraph 5, AB expressly reserved the right

"to license under . . . said Mackie-Duluk patent. . . the manufacture, use and sale of replacement top fabrics other than those supplied to, made by or sold by Ford . . . to the extent that AB is entitled to reserve such right under 35 United States Code, § 271 (1952)."

In a pretrial memorandum filed early in the lawsuit, the District Court construed the agreement in the following manner, which we think to be a correct interpretation of the parties' intention:

(1) With respect to all patented top-structures manufactured before July 21, 1955, and all replacement fabrics installed before that date, it was a "release" to the parties named—that is, Ford and its customers—of the claims for infringement by manufacture, sale, or use of the patented combination;

(2) With respect to any new structures manufactured between July 21 and December 31, 1955 (it appears that there were no such structures), the agreement was a "future license" to Ford and its customers to make, sell, and use the patented combination, but "excepting replacements" unless these were provided by Ford under the special license granted by paragraph 3;

(3) With respect to the post-July 21 status of structures manufactured before July 21, the agreement was also a "future license" to Ford and its customers of the rights to make, sell, and use, but again, "excepting replacements" not provided by Ford; and

(4) The agreement "demonstrated an intention not to release" or license any persons other than Ford or its customers; in particular, the parties did not intend *495 to release or license contributory infringers like Aro in respect of replacement fabrics sold either before or after July 21.

Considering the legal effect of the agreement as so construed, the District Court went on to rule that if the fabric replacement should be held to constitute repair rather than reconstruction (as this Court did subsequently hold in Aro I), then:

(a) Aro would be liable for contributory infringement as to replacements made before July 21, 1955, since "I do not construe the agreement to release contributory infringers for rights of action already accrued";

(b) however, despite the intention of the parties, Aro would not be liable as to replacements made after July 21, 1955, since "If replacement is legitimate repair, no average owner can do-it-yourself, and he must be free to go to persons in the position of defendants without apprehension on their part."

The distinction between pre-agreement and post-agreement sales subsequently became irrelevant to the District Court's view of the case, when it held after trial that replacement of the fabrics constituted reconstruction rather than repair; the Court's interlocutory judgment for CTR thus held Aro liable with respect to all the Ford cars in question. When this Court in Aro I reversed the ruling on the reconstruction-repair issue, the only reference in the opinions to the Ford cars took the view that Aro should be held liable only in respect of replacements made on those cars "before July 21, 1955," 365 U. S., at 368 (concurring opinion), and thus agreed with the distinction originally drawn by the District Court. The present opinion of the Court of Appeals, however, in reinstating the Ford car portion of the interlocutory judgment for CTR without consideration of this distinction, appears to have held Aro liable in respect of replacement fabrics sold for the 1952-1954 Ford cars not only before *496 July 21, 1955, but also after that date and—so long as the cars remain on the road—up to the present and into the future.

CTR's argument in support of this result emphasizes that the agreement in terms ran in favor only of Ford and Ford's customers and not of third parties like Aro, and that it expressly excepted "replacement top fabrics" from the scope of the rights it granted. Reliance is also placed on testimony that the amount to be paid by Ford under the agreement was set as low as $73,000 only because of a clear understanding between the parties that such payment would not affect AB's rights to recover from persons in the position of Aro.^[12] CTR thus argues:

"If the Ford agreement had never been made at all, it is clear that it would have been proper to require that Aro pay royalties, insofar as infringing Ford cars are concerned, even up to the present time. This being the case, it is clear that it was proper for the agreement to expressly recognize and to expressly exclude Aro's liability from its terms. Since Ford refused to purchase any rights for Aro, either before or after July 21, 1955, Aro is liable for its Ford repair activities both before and after that date."

Insofar as replacement fabrics sold "after that date" are concerned, we do not agree. We think the agreement's attempt to reserve rights in connection with future sales of replacement fabrics was invalid. By the agreement *497 AB authorized the Ford car owners, in return for a payment from Ford, to use the patented top-structures from and after July 21, 1955. Since they were authorized to use the structures, they were authorized to repair them so as "to preserve [their] fitness for use . . . ." Aro I, 365 U. S., at 345, quoting Leeds & Catlin Co. v. Victor Talking Machine Co., 213 U. S. 325, 336. The contrary provisions in the agreement, purporting to restrict the right of use and repair by prohibiting fabric replacement unless done with fabrics purchased from Ford or some other licensee, stand condemned by a long line of this Court's decisions delimiting the scope of the patent grant. When the patentee has sold the patented article or authorized its sale and has thus granted to the purchaser an "implied license to use," it is clear that he cannot thereafter restrict that use; "so far as the use of it was concerned, the patentee had received his consideration, and it was no longer within the monopoly of the patent." Adams v. Burke, 17 Wall. 453, 456. In particular, he cannot impose conditions concerning the unpatented supplies, ancillary materials, or components with which the use is to be effected. E. g., Carbice Corp. v. American Patents Development Corp., 283 U. S. 27; Mercoid Corp. v. Mid-Continent Investment Co., 320 U. S. 661; United States v. Loews, Inc., 371 U. S. 38, 46. It follows that here, where the patentee has by the Ford agreement explicitly authorized the purchasers to use the articles, the patentee cannot thereafter restrict that use by imposing a condition that replacement parts may be purchased only from a licensed supplier.

With the restriction thus eliminated from consideration, it is clear that Aro cannot be liable for contributory infringement in connection with sales of replacement fabrics made after July 21, 1955. After that date the Ford car owners had authority from the patentee—indeed, had *498 a "license"^[13]—fully to use and repair the patented structures. Hence they did not commit direct infringement under § 271 (a) when they had the fabrics replaced; hence Aro, in selling replacement fabrics for this purpose, did not commit contributory infringement under § 271 (c). The case as to the post-agreement sales is thus squarely ruled by Aro I. It was held there, despite AB's attempt to reserve the right to license sales of replacement fabrics, that General Motors car owners, who were authorized to use the patented structures by virtue of the license granted General Motors by AB, performed nothing more than "permissible repair" when they replaced the worn-out fabrics, and hence that there was no direct infringement by the owners to which Aro, by selling the replacement fabrics, could contribute. In other words, since fabric replacement was "repair" rather than "reconstruction," it was merely an aspect of the use of the patented article, and was thus beyond the patentee's power to control after the use itself had been authorized. So here, the Ford car owners were authorized to use the patented structures after July 21, 1955, by virtue of the agreement between AB and Ford. Hence they were likewise entitled, despite AB's attempt to reserve this right, to perform the "permissible repair" of replacing the worn-out fabrics; hence, just as in Aro I, the car owners by replacing the fabrics committed no direct infringement to which Aro's sales could contribute. "[I]f the purchaser and user could not be amerced as an infringer certainly one *499 who sold to him . . . cannot be amerced for contributing to a non-existent infringement." Aro I, 365 U. S., at 341.

CTR would have it that this result is inconsistent with Birdsell v. Shaliol, 112 U. S. 485, and Union Tool Co. v. Wilson, 259 U. S. 107. In our view it is not. Birdsell allowed the patentee to hold one infringer liable for use of the patented machines after obtaining a judgment against another infringer for the manufacture and sale of the same machines; Union Tool held infringement to exist where the defendant, after being held liable for the manufacture and sale of certain infringing machines, sold spare parts for use in the same machines. Both cases turned upon the fact that the patentee had not collected on the prior judgment and thus had not received any compensation for the infringing use—or, indeed, any compensation at all.^[14] Here, in contrast, the amount paid by Ford under the agreement was expressly stated to include compensation for the use of the patented structures by Ford's purchasers; moreover, the agreement covered future use and in this respect operated precisely like a license, with the result that after the agreement date there was simply no infringing use for which the patentee was entitled to compensation. See Birdsell v. Shaliol, supra, 112 U. S., at 487. In sum, AB obtained its reward for the use of the patented structures under the terms of the agreement with Ford; CTR cannot obtain from Aro here another reward for the same use.

*500 We therefore hold, in agreement with the District Court's original view, that Aro is not liable for replacement-fabric sales^[15] made after July 21, 1955. Insofar as the judgment of the Court of Appeals imposes liability for such sales, it is reversed.^[16]

III.^[17]

Turning to the question of replacement-fabric sales made before July 21, 1955, we agree with the District Court that the agreement between AB and Ford did not negative Aro's liability for these sales. With respect to the post-agreement sales the agreement necessarily absolved Aro of liability, its intention to the contrary notwithstanding, because it had the effect of precluding any direct infringement to which Aro could contribute. With respect to the pre-agreement sales, however, Aro's contributory infringement had already taken place at the time of the agreement. Whatever the agreement's effect on the amount recoverable from Aro—a matter to be discussed in Part IV of this opinion—it cannot be held, in the teeth of its contrary language and intention, to have erased the extant infringement.

It is true that a contributory infringer is a species of joint-tortfeasor, who is held liable because he has contributed with another to the causing of a single harm to the plaintiff. See Wallace v. Holmes, 29 Fed. Cas. 74, 80 (No. 17,100) (C. C. D. Conn. 1871); Thomson-Houston Elec. Co. v. Ohio Brass Co., supra, 80 F., at 721; Rich, *501 21 Geo. Wash. L. Rev. 521, 525 (1953). It is also true that under the old common-law rule, a release given to one joint-tortfeasor necessarily released another, even though it expressly stated that it would have no such effect. See Prosser, Torts (2d ed. 1955), at 243-244. Under this rule Aro's argument on this point would prevail, since the agreement did release Ford's purchasers for their infringing use of the top-structures before the agreement date, and that was the use to which Aro contributed. See Schiff v. Hammond Clock Co., 69 F. 2d 742, 746 (C. A. 7th Cir. 1934), reversed for dismissal as moot, 293 U. S. 529. But the rule is not applicable. Even in the area of nonpatent torts, it has been repudiated by statute or decision in many if not most States, see Prosser, supra, at 245, and by the overwhelming weight of scholarly authority. E. g., American Law Institute, Restatement of Torts (1939), § 885 (1) and Comments b-d. And application of the rule to contributory infringement has been rejected by this Court. In Birdsell v. Shaliol, supra, 112 U. S., at 489, the Court applied to a patent case the proposition that "By our law, judgment against one joint trespasser, without full satisfaction, is no bar to a suit against another for the same trespass." What is true of a judgment is true of a release. See Prosser, supra, at 241-244. A release given a direct infringer in respect of past infringement, which clearly intends to save the releasor's rights against a past contributory infringer, does not automatically surrender those rights. Thus the District Court was correct in denying that "defendants are entitled to the fortuitous benefit of the old joint tort-feasor rule." The mere fact that the agreement released Ford and Ford's customers for their past infringement does not negate Aro's liability for its past infringement. Hence the judgment of the Court of Appeals, insofar as it relates to Ford car replacement-fabric sales made by Aro before July 21, 1955—and subject to *502 the reservation set forth at pp. 488-491, supra, with respect to sales made before January 2, 1954—is affirmed; accordingly, the case is remanded to the District Court for a determination of damages and for such other proceedings as that court deems appropriate.

IV.^[18]

The case must now be remanded for a determination of the damages to be recovered from Aro in respect of the infringing pre-agreement sales. It is true that the lower courts have not yet expressly addressed themselves to the damages issue, and that the parties have not argued it here. Nevertheless, it appears that all concerned in this litigation have shared a specific assumption as to the measure of damages that would be available to CTR if it succeeded in establishing infringement. Because we sharply disagree with that assumption, and because expression of our views may obviate the need upon remand for lengthy proceedings before a master in this already over-long litigation, we deem it in the interest of efficient judicial administration to express those views at this time. In brief, it is our opinion that the Ford agreement, while it does not negate Aro's liability for the prior sales as it does for the subsequent ones, does have the effect of limiting the amount that CTR can recover for the pre-agreement infringement, and probably of precluding recovery of anything more than nominal damages.

If the sum paid by Ford for the release of it and its customers constituted full satisfaction to AB for the infringing use of the patented structures, we think it clear that CTR cannot now collect further payment from Aro *503 for contributing to the same infringing use. The rule is that

"Payments made by one tortfeasor on account of a harm for which he and another are each liable, diminish the amount of the claim against the other whether or not it was so agreed at the time of payment and whether the payment was made before or after judgment . . . ." Restatement of Torts, supra, § 885 (3).

It has been said that "all courts are agreed" upon such a rule. Prosser, supra, at 246. And its applicability to contributory-infringement cases has been clearly indicated by this Court. Birdsell v. Shaliol, supra, 112 U. S., at 488-489; see Hazeltine Corp. v. Atwater Kent Mfg. Co., 34 F. 2d 50, 52 (D. C. E. D. Pa. 1929). Indeed, if "actual damages" or "full compensation" paid by a maker-and-seller can have the effect of releasing a user, as was indicated in Birdsell