nor partners with the American Bell Telephone Company in respect of the same, nor agents for the management thereof, nor in possession thereof.

"The bill seeks to cancel, tear the seal from, and destroy said patents upon the alleged ground of alleged fraud in the proceedings of the patentee, Alexander Graham Bell, in procuring the same, and of errors, mistakes, and inadvertences in the officers of the United States in granting the same, and before the respective grants and dates thereof. Such alleged cause of action arose, if at all, in and out of transactions had in Massachusetts and the District of Columbia, and by and between parties then and there resident. Said alleged cause of action arises, if at all, out of the constitution and laws of the United States, and said bill has for its sole object to destroy a grant made by the United States, the patent-office, and the secretary of the interior, to hold the same null and void, and to mutilate and destroy the records of the patentoffice. As ancillary thereto, this bill also seeks to prevent the American Bell Telephone Company from bringing suits for the infringement of said patents in the courts of the United States, where alone such suits can be brought. Said alleged cause of action, if it exists, is exclusively of federal origin, cognizance, and jurisdiction.

"The two patents referred to in the bill are No. 174,465, applied for by Alexander Graham Bell, February 14, 1876, and dated March 7, 1876, and No. 186,787, applied for by Alexander Graham Bell, January 15, 1877, and dated January 30, 1877. They were both issued to said Bell as inventor, owner, and patentee. At the time when each of said patents was applied for, and at the time when each was granted and issued, and during all the intervening time, the patent-office of the United States, and the legal official residence of all the officers thereof, and of the secretary of the interior, was at Washington, in the District of Columbia. At all said times, and during the whole of the pendency of said two applications, said Bell was an inhabitant of and resident in the state of Massachusetts, and not of or in the state of Ohio. The whole business of filing said two applications, prosecuting them, obtaining and receiving said patents, and all communications with the patent-office and with the officers thereof, relating to that business, were done, transacted, and had in Massachusetts, or in Washington, and not in any particular in the state of Ohio. Thereafter, by purchase for valuable consideration, and by divers mesne assignments, the entire, sole, and absolute title in and to said patents became vested in the American Bell Telephone Company, in the years 1880 and 1881, and has ever since continued vested in said corporation. All said assignments have been executed and delivered in Massachusetts or Washington, and not in the state of Ohio.

"At the time this bill was filed, and ever since, and long before, the business of the American Bell Telephone Company and the telephone business in Ohio has been conducted and transacted as follows:

"The American Bell Telephone Company, ever since it purchased said patents, and took said assignments thereof, in 1880 and 1881, has always been the sole and exclusive owner of said two Bell patents,-No. 174,465 and No. 186,787; and has never granted or conveyed to any person whatever, and especially has never granted or conveyed to any of the other corporations defendant, any such assignable right or interest in the said patents, or either of them, as is described, referred to, or contemplated by section 4898 of the Revised Statutes of the United States. It has not given or granted to either of the other defendant corporations any right or license whatever to make or sell telephones employing or embodying or embracing any of the inventions patented in and by the said two patents, nor any telephones whatever.

"It and its predecessors, owners of said patents, each for itself determined that it would not itself carry on the telephone business (or any business) in the state of Ohio, (or elsewhere outside of the state of Massachusetts,) but, in lieu thereof, that it would grant licenses under its patents to persons or corporations who might apply therefor to use its patented telephones, and

furnish them to others, for use in the state of Ohio, (and in other states,} and, generally, to carry on all the telephone business therein. Whereupon divers corporations, including the Central Union Telephone Company, the Central District & Printing Telegraph Company, the Cleveland Telephone Company, the City & Suburban Telegraph Company, and the Miami Telephone Company, named as defendants herein, or certain other corporations under whom they, or some of them, claim as successors, (called hereinafter, for convenience, the licensee corporations,') desired and sought and obtained licenses to carry on the telephone business in the state of Ohio, at and for the risk and as the business of said licensee corporations. To that end, and long before this suit was brought, the American Bell Telephone Company so arranged with such licensee corporations that, at the commencement of this suit, and ever since, and long before, the latter should carry on and have carried on all such business in the state of Ohio, and the American Bell Telephone Company has not carried on the telephone business in the state of Ohio. Said licensee corporations have carried on that business in their own right, and entirely for their own profit and loss, and not as agents or for account of the American Bell Telephone Company.

"The American Bell Telephone Company has no license contract with the Erie Telephone & Telegraph Company, another corporation named as defendant herein; but it is believed that the latter corporation owns the whole or a major part of the stock of the Cleveland Telephone Company, with whom the American Bell Telephone Company has, and for several years past has had, a license contract and dealings as herein stated.

"The American Bell Telephone Company furnishes to each of said licensee corporations, at its general office or factory in Boston, Massachusetts, and not elsewhere, and as often as requested, telephones embodying said patented inventions, and manufactured by the American Bell Telephone Company. The actual and the legal place of delivery thereof is agreed to be, and in fact is, such general office or factory. The licensee corporation transports them, at its own risk and expense to wherever it wishes to, and lawfully may use them or furnish them to others for use. The licensee corporation, when it sees fit, returns them into the possession of the American Bell Telephone Company, in Massachusetts, and it pays to the American Bell Telephone Company a certain stipulated sum per month in respect of each telephone, reckoned from the time when it receives the same from the American Bell Telephone Company, in Massachusetts, as aforesaid, until it returns the same into the actual possession of the American Bell Telephone Company, as aforesaid, and in some few cases pays certain other sums, but in no case a share or portion of profits. These payments are made, and the accounts respecting the same are settled, at the American Bell Telephone Company's office, in Boston, Massachusetts. "All the telephones used in the state of Ohio are so furnished, and all the money the American Bell Telephone Company actually receives in respect of, or growing out of, any use of telephones in the state of Ohio, it receives at its general office, in Boston, Massachusetts, from the licensee corporations, and all its accounts therefor are there settled. Each licensee corporation uses said telephones, and furnishes them to others, under and by virtue of, and in the exercise of, its license right so to do, and makes such payments as payments due from it for such license right; and no payments beyond what the licensee corporation has so agreed to make, and in the invariable course of dealing does itself make, are due to or demanded by or received by the American Bell Telephone Company in respect of the use of telephones in the state of Ohio.

"Subject to certain general limitations and regulations restricting the use of telephones so furnished, the right of the licensee corporation is, and its invariable course of business is, to use those telephones itself, or to furnish them to others to be used, within certain counties and portions of the state of Ohio. The licensee corporation constructs, or procures to be constructed, at its own

expense, or at the expense of users to whom it furnishes telephones, all needed lines of wires, and furnishes all batteries and other appliances; the telephones as they have been in fact furnished not being intended to be used, or adapted to be used, without such wires, batteries, and appliances. The licensee corporation selects the customer who is to use such telephones, and fixes the price charged to him; but no matter what price it charges, nor whether it puts the telephones to use, or lets them lie unused in its store-house, it agrees to pay, and does pay, to the American Bell Telephone Company the said stipulated price per month for each instrument.

"The whole of the business connected with the telephones, from the time the licensee corporation received them from the American Bell Telephone Company at its general office or factory, in Boston, Massachusetts, until it returns them to said company, is done at the risk and expense of the licensee corporation, under its direction and control, and by officers and agents appointed and paid by it. The American Bell Telephone Company does not direct or control, and has not the right to direct or control, such business; does not participate in the profits thereof; and is not responsible for, and does not bear the burden of, the losses thereof. It does not select nor dismiss such officers and agents, nor pay them, nor bear any of the burden of payment to them for their salaries. It does not, in fact, by itself, or any officer or agent employed by it, use telephones in the state of Ohio. It has not in fact, and at no time since the filing of this bill nor long before, used, or had a right to use, any telephone existing, nor any telephone line existing, in the state of Ohio, and it has never itself built or operated a telephone line in the state of Ohio. It does not select what individual users shall be furnished with telephones and lines, nor control their selection. It does not solicit business, nor direct who shall be solicited, and has not the power or right to do either. It is not responsible to the individual user for bad service, and does not receive complaints therefor. It does not, and for many years last past it has not, (and it is believed that it never has,) demanded or received any money from any individual user of telephones in the state of Ohio.

"In originally arranging for such conduct of the telephone business in the state of Ohio, (and elsewhere in the United States,) the American Bell Telephone Company sometimes found a licensee corporation disposed to undertake one branch or subdivision of the several branches into which it has been found convenient to divide the telephone business; as, for example, one licensee corporation might undertake the construction and operation of a telephone exchange in one town, another licensee corporation in another town, and another licensee corporation the business of building lines to connect these two exchanges. In such cases, the American Bell Telephone Company stipulated for and reserved, for example, in each exchange license, the right to construct connecting lines, and connect them with the exchange, and other similar rights to make connections and through lines; but it contemplated that such other lines would be built and operated by other licensee corporations, and therefore made such stipulations and reservations in favor of its appointees or assigns as well as itself, and provided that, when its appointees or assigns undertook such work, they should become pro tanto the contracting parties, and the American Bell Telephone Company should not be responsible for their misfeasance or non-feasance. And further, for the same purpose, it established such regulations that different licensee corporations needing to interchange business or connect lines should do so in a convenient manner, without the power of either to obstruct the same by mere self-will; but it has not otherwise undertaken to regulate such business. In fact, it has not itself, in the state of Ohio, undertaken or carried on such business, but the same has been entirely undertaken and carried on and performed by its various licensee corporations. In many cases one licensee corporation has successively undertaken to extend its business as aforesaid into the other branches and connecting exchanges or lines.

"The more effectively to carry out said course of dealing, and to enable it to enforce its rights and protect its interests as licensor, not itself carrying on the telephone business in the state of Ohio, and to do this without destroying or dismembering the telephone system, the serious inconvenience of the individual users, in case of default or failure on the part of the licensee corporation, the American Bell Telephone Company retains the technical legal title to said telephones; and has the right, in case of default, or if said course of dealing is not duly carried out, to take possession of lines and instruments temporarily or permanently, and thereafter to withdraw them from operation, or cause them to be operated by itself or through other licensees, or pursue various remedies at law and in equity to collect from each individual user what he would otherwise have paid to the licensee corporation, or otherwise to step into the shoes of the licensee corporation, and then, retaining its stipulated royalty or license fee, to account for the overplus to the licensee corporation, or otherwise, according to law; but no such steps have ever in fact been taken in the state of Ohio.

"The license contracts to and with the licensee corporations, in respect of instruments to be used on private lines, contemplated that the whole business of selecting and soliciting customers for private lines, of communicating with them, demanding and collecting all payments from them, and doing all business in connection with them, should be performed by the licensee corporation as its own business, at its own discretion, at its own expense, for its own profit or loss, and at its own risk, and in its own right; and that (except in case of a cancellation of said contract for default) the American Bell Telephone Company should neither demand nor receive, in respect of instruments used on private lines, any payment whatever, except the monthly royalties to be paid to it at its office, in Boston, Massachusetts, by the licensee corpora tion, as already stated, and whether the instruments furnished to the licensee corporation were by it furnished to an individual user or not; and the business, in fact, has been and is so conducted.

"The license contract also contemplated, but solely as a convenient means for enabling the parties to exercise the rights arising thereunder, that, in respect of each set of instruments for such private line, a special license should also be furnished by the American Bell Telephone Company to the licensee corporation, and by it countersigned and granted over to such individual users as it might so select. So far as such special licenses have been furnished, they have been furnished by the American Bell Telephone Company to its licensee corporation in bulk, with the blanks unfilled, and the particular telephones not designated therein, to be used by the licensee corporation as its property, and of right, and not as an agent, nor liable to be revoked at pleasure by the American Bell Telephone Company, even before they were furnished to individual users by the licensee corporation.

"As a matter of fact, the licensee corporations have not, with any considerable degree of accuracy, returned to the American Telephone Company duplicates of such special licenses when used, nor reported the names of the private-line users to whom such special licenses have been furnished; but the course of dealing at the present time is, and for a period long before the beginning of this suit has been, for the licensee corporation to receive all its telephones from the American Bill Telephone Company at Boston, Massachusetts, and to pay the stipulated royalties thereon under a general classification thereof, according to their intended uses; but without discrimination as to the particular customers to whom they might be furnished, and without being precluded from using, for private lines, telephones ordered for ex-changes, or vice versa, when holding separate license contracts for both these purposes.

"These, and all other provisions of detail in the license contracts, and in the dealings between the American Bell Telephone Company and licensee corporations, are intended and used to provide for and secure the licensee cor

porations in carrying on its business, and enjoying its rights as licensee, and to enable the American Bell Telephone Company to enjoy, protect, and enforce its rights in case the licensee corporation fails to carry on its business, and make its payments as contemplated.

"The American Bell Telephone Company owns stock in four of the licensee corporations named as defendants herein. In some of them it acquired some stock when the licenses were made. In others of them it has acquired it by subsequent purchase at the market price, as any other purchaser might do. It has not a majority of the stock in any of them, except two, and in those it holds a bare majority, and acquired enough to give it a majority by purchase at the market price.

"The American Bell Telephone Company has not agreed to supply all counsel, and maintain all suits, against or affecting the licensee corporations. It has in two cases, but not in others, agreed, as in good conscience a manufacturer and furnisher of patented machinery may well agree, that, in consideration of the license fees paid to it, it will defend all suits brought against its licensee corporations on the ground that the telephones furnished by it unlawfully infringe patents owned by others.

"Samples of the standard forms of contract which the American Bell Telephone Company has been accustomed to make with the licensee corporations aforesaid are hereunto annexed. They are designated Form 109 D,' Form 113 D,' Form 116 C,' and 'Form 251 B.'

"The Central Union Telephone Company, the Erie Telephone & Telegraph Company, the Central District & Printing Telegraph Company, the Cleveland Telephone Company, the City & Suburban Telegraph Company, the Miami Telephone Company, and the Buckeye Telephone Company, named as defendants in this cause, were not at the date of filing the bill of complaint herein, nor at the several dates of alleged service of the writs of subpoena issued herein, nor theretofore, the associates or copartners, nor was either or any of them at those dates, nor has either or any of them ever, at any time, been an associate or copartner of the American Bell Telephone Company, in any manner or for any purpose; nor have they, nor has either or any of them, in the state of Ohio, or elsewhere, formed with the American Bell Telephone Company any association, copartnership, or joint-stock company which divides the profits of any business whatsoever between them, or either or any of them, and the American Bell Telephone Company; nor has any part of the profits of the telephone business carried on by any local association, copartnership, or joint-stock company, nor any part of the profits of the licensee corporations, been set apart weekly, (or at any other period,) and accounted for by such local company, nor collected by agents of the American Bell Telephone Company who visit any local company for that purpose, (and no such visits are made,) or otherwise paid to the American Bell Telephone Company; nor is it entitled to receive any such share or division.

"All of which matters and things this defendant avers to be true, and is ready to maintain and prove. Wherefore this defendant prays the judgment of this honorable court whether it ought to be required to appear in accordance with any writ of subpoena issued in the said suit."

Along with its plea and motion the American Bell Telephone Company exhibits samples of the standard forms of the contracts "for exchanges," for "extraterritorial connecting lines," "branch lines," and for "private lines and other purposes," which it has usually made with the licensee or local corporation. These contracts are too lengthy to be here inserted, but will be referred to in considering and passing upon the questions raised by the plea in abatement, of which they form a part.