*2
KALODNER,
Bеfore GOODRICH
Judge.
Judges
FEE, District
Circuit
GOODRICH,
Judge.
Circuit
Court,
presents to this
The instant case
time,
constitutionality of
second
for the
Adjustment Act.1
Royalty
the wartime
us in Timken
question first came to
The
Company
Alma Motor
Axle
Detroit
validity of
Company2
upheld the
and we
judgment was vacated
Our
legislation.
remand
Supreme
and the case
Court
first
to determine
with directions
ed to us
litiga
issues of the
the non-constitutional
parties.3 This we did
tion between the
patent law
on
was rendered
the decision
questions.
points involving no constitutional
Cir.,
F.2d 190.
3
163
disposed of.
thus be
case cannot
Coffman, sues for
plaintiff,
The
agree-
licensing
under a
alleged due him
in 1932.4
defendаnt
ment made with the
under the terms
City, The
defends
Carpenter,
Jersey
defendant
Jr.,
D.
James
and,
spe-
more
Adjustment Act
Buchanan,
Pittsburgh,.
Royalty
J.,
N.
G.
John
W-9
Ingersoll,
orders
cifically,
&
(Smith, Buchanan
Pa.
respectively by the War
Pa., Carpenter,
&
N-7 issued
Pittsburgh,
Gilmour
Department pursu-
Department
City,
Navy
Jersey
J.,N. William H.
Dwyer, of
statute.5
Pittsburgh, Pa., Samuel
ant
M.
Eckert,
January
(1942),
from
1944 to December
1013
U.S.C.A.
Stat.
§§
1 56
By an order of the District
89-96.
1944,144
2 Cir.,
were consolidated for trial.
F.2d 714.
these cases
3
1946,
Federal Labor
orders directed
U.S.
These
S.Ct.
pay
no
what
more
atories
L.Ed.
agreement
complaints.
on
license
In
ever
filed two
Coffman
royal-
cartridges
14,1944,
one,
manufactured for the United
filed on June
first
payments
year
limited
for each
States
claimed
were
ties
through
manufactured for
Govern
starters
December
per
August
with an
$8.00
starter
overall
ment to
filed
second
year
specified
payments'
limitation
one
at the
rate
claimed
$50,000.
period
which ran
contract
disputed
defendant
úí
selling price” -on
cartridges
manufac
grounds
involving
amount due on other
tured to fill
There
Navy
a certain
contract.
validity
plaintiff’s
statute
-the
agreement
had been
an
which reduced
*3
patents.
royalties
But these defenses went
por
to a
to
the
on
manufactured articles
only;
tion of the claim
-asto thе remainder
particular
plaintiff
fulfill that
contract but
the
sole
is
defense
the
claimed that
failure to
its condi
a
observe
pursuant
Act. If it
the
made
to
and
orders-
payable.
tions
full
the
made the
When
6%
valid,
it are
to
the
not liable
part
defendant is
com
defendant answered this
the
plaintiff
the
held. plaint
and the District Court so
royalties
it admitted
were
that
of 3%
D.C.W.D.Pa.1947,
F.Supp.
Consid
cartridges
due on
under
manufactured
inescapable
eration of the statute
particular Navy
seems
previous
contract. As
upon
litigants
point
ly
in
stated, however,
this
are
the de
it also set up
agreement.6
Royalty
fense
Adjustment
of the
orders.
plaintiff
summary
The
judg
moved for a
In
urging
addition
the non-constitu-
to
part
ground
ment on
of the claim the
tionality
plaintiff
statute,
of the
claims
that the
prohibit
payment.
did not
orders
its
Act,
alternatively,
that in
event the
or
granted.
The motion was
The order and
particular
question,
in
orders
should
pleadings,
which are
have in the
-allwe
applied
not be
royalties
to
due before Janu-
way
case,
aspect
of a
record
that
of the
ary 1, 1943,
or-
the date mentioned in the
do not
District
indicate
basis
made, first,
ders. This
is
as a
Court’s
Federal
ar
action.
Laboratories
plaintiff regards
matter of what the
as
gues
original
that its
-answer was drawn' in
proper
and,
interpretation
statute,
Roy
such a manner that it did not raise the
second,
application
an
doctrine
alty Adjustment orders as
defense to
a
judicata.
phase
res
we
case
says did,
it
claim. Coffman
turn to first.
pointing
argu
out that the briefs and -oral
Interpretation
Res
mainly
of the ment on the motion were concerned
Judicata
Orders Issued
just
point.
Pursuant
to
Act.
with
need
We
do not
controversy.
way
resolve this
Either
presses
plaintiff
judi
The
his res
preclude
proceeding did not
District
point
conjunction
cata
with
in
his conten
Court when
matter
came to trial
tion that the orders
under
issued
the Act
applied
royalties
that the orders
holding
prospective only,
were
terms
their
they
due before
were
Our
issued.
conclu
their intent
not
to affect
(d)
sion
(a)
turns on subsections
January
which accrued before
1943. To
(a)
(b)
Rule 56 and subsections
point
understand Coffman’s
it will
neces
Procedure,
Rule
Rules
Federal
of Civil
sary
greater
progress
to relate
detail the
28 U.S.C.A., all of which are
set out
way
this lawsuit as it worked
final
its
margin.
disposition
Among
District
in 'the
Court.
up
roy
54(b) provides
items which made
the claim
judgment
for-
Rule
final
a
upon
terms
predicated
alties due
of the license
one
suit
claim a
agreement was
“the
nеt
or
It
clear, however,
licensee’s
two more claims.
is
6%
position
question
“(b) Judgment
Stages.
this
Since
called into
at Various
constitutionality
Act
than
When more
one claim for
relief
presented
action,
a
an
United States filed motion to intervene
is
at
court
course, granted.
was,
any stage, upon
and it
50 Stat.
a determination
(1937),
particular
§
[now
U.S.O.A.
material
to a
§
issues
claim and
2403],
party
arising
The Government
all counterclaims
out of the trans-
this
Court as
result of
action
or
action
occurrence which is
sub-
ject
claim,'
Court.
the District
matter
enter
Judgments;
judgment disposing
“Rule 54.
Costs
of such
claim.
‘Judgment’
Definition;
judgment
“(a)
Form.
shаll
terminate the
respect
disposed
in these rules includes a
claim
used
any
so
decree
appeal
proceed
an
order
from which
the action shall
lies.
remain-
ing
separate judgment
not contain
In
A
shall
a recital
claims.
case
report
pleadings,
entered,
may stay
master,
is so
the court
or
order
prior proceedings.
entering
the record of
its enforcement until
of a
single
essentially a
does
make
or
not
differing occurrences
must be
that there
out of
arising
sepa-
claims
claim into several
bases
form the
transactions which
transactions
wholly separate
distinct
such a
judicial action before
rate units of
moreover,
claim,
engagements.
Rule.8
under that
be entered
judgment can
sought, was
being
enforcement was
plaintiff’s which
here. The
They
not found
are
con-
particular
on a
him one
due
alleged to be
claim for
6%
of that amount
half
tract and at most
of com-
in his bill
up
set forth
dates
part does
undisputed.
wás
Since
claim was divided
plaint. The fact that this
judg-
of action
fact,9
separate
cause
become
parts
findings of
into several
*4
Rule
entered under
ment could not be
impact
and or-
of the Act
to determine the
it, 54(b).10
of
segments
on
ders
various
thereundеr
may
necessary
subsequent
ment is entered.”
to
to recover
ing
pleading
judgment
served,
or
and the
facts
of.
ing
tion.
ment is not rendered
or for
without
controverted.
rogating
substantial
certain what
fied shall
damages or
an order
troversy,
had not been
from the
ing periods:
ceedings
the trial of
trial
dall, 1942,
between the
which accrued
believe it the Act of 1910 The Act purpose. implement printed margin,20 Li- be invoked to are S. U.S. Bowles v. shall be which licensee. Within ment or States, vention, grant has ordered prosecution thereof otherwise such concerned partment such or cense includes department concerned, or event less House sembled, That, ed “Be other excessive States of Royalty Adjustment Act, Yakus v. United Lichter v. United effective date 64 S.Ct. rates or amounts of fact 35 U.S.C.A. licenses it enacted are believed to be whether with or agency disposition, S.Ct. manufactured, or Representatives than ten shall disposed shall to the Willingham, anyone of the such by agency thе rates provisions S.Ct. America license agency thereunder, to by patented give a reasonable manufacture, War, of said by aid §§ days, licensor and order having L.Ed. 892. head *7 States, of the Government written notice of Government States, 1944, from the owner in in for whenever for the or amounts head of used, fix of the or the successful 90 and Congress as- notice, and such unreasonable Senate Government royalties, head L.Ed. unpatented, the Unit- 321 U.S. use, 56 Stat. payment sold, right depart- specify United an in- which in no after sale, and de- U. li- or to if such just, any, censee issued within a legal within ten tive fied not pay or tract or thorize the tiоn. such thirty days manufacture, or the licensee or present amounts termined, sole and exclusive disposition: way remedy by rates and amounts of opinion, royalty, ing order, shall payment wartime unpaid, indirectly after circumstances which to the any recovery date of said taking manufacture, presentation. The to the in said order on account of such he shall determine are have if order fixed and otherwise, writing days any, or from any licensor, licensor shall not have payment against into account royalties, production, Provided, a use, sale, effective date of said notice damages to the licensor, bearing additional fixing from licensor the date of reasonable or suit, remedy, specified provided excess of that use, sale, notice, may the licensee for the Such nor but in thereof if for upon or if person any set-off, hotoever, on account royalty any, after charge directly such licensor’s he so the conditions breach specifying other licensee may, fixed except such as in section 2 time after to shall aforesaid, or States fair or other requests rates shall remain- disposi- request of con- be de- within speci- effec- other as That facts shall said any аu- his li- or be a plication situation the 1910 statute to a legislation enacted pattern Patents procurement goods involving agreement. not a war license facilitate protection It monopolies. the war. are Under federal waging cost of minimize the may prospective under any the owner exclude inventions manufactured extends to may user, including He precursor, the Act the Government. what its license permissive If he provided respect price inven set his own for unlicensed use. clearly its use— permits price the Govern sets a exorbitant for feature Its new tions. say $1,000,000 per manufactur unit—аnd licensee as its starter to use the ment appropriating appropriates Government wartime ing agent, instead of itself patent pat using stranger patent and for war use under the Act of manufacturer, merely right 1910 Act has as the the Government taken entee as clearly money? right The as author to receive permit. We consider would money had legisla for as if it itatively earlier reducible to a claim established by private be- agreement Gov that the been determined tion and decisions thereunder licensee, appropriate patentee party a third may constitutionally tweеn a ernment remedy price rests on patent provide patentee determination of the monopoly instance. compensation Court of base in either the same suit against con Claims. Plaintiff’s argu new Coffman makes no Thus stitutionality ear is thus concluded against Act of 1942 does ment ap element unless a lier authorities new equal force Act apply with pears litigation. present patent rights latter statute If suggested license element is the new constitutionally appropriated may be his agreement bases Coffman Government, indeed to see how it is difficult pure right to receive contention thаt a patentee private arrangements between enti- money has been taken. Licensor is un taking parties can render the and third per unit fixed number of dollars tled to Nor by statute. if covered constitutional licensee, and if manufactures licensee authori contradict the reason to does any purchas- number of units certain people power appear us. ties view mon- er, Coffman’s that a sum of it is goods procure war States to of the United ey him and has due that the Government subject to prices at cannot reasonable money away sum. For taken clearly taking is restriction, аnd the right insists dollar-for-dollar com- he constitutional. pensation is the constitutional substi- argu Once the dollar-for-dollar tute. of, disposed between confusion ment *8 upon validity measure- taking The fails considera -of the and the the disappears* ap- compensation of patent just largely nature and the of tion of the facture, use, sale, such compensation in shall be to the shall be effective days hereof, suit cover such Courts dress of mum rates a license issued any hereof. Written notice as diction such Court ever “Sec. licensed order issued date order, against- courts after with the of of thе fixing is the or amounts Claims, mailed sum, shall constitute the earlier. Any may to the licensor for the the United invention licensor and licensee United mailing thereof, Court if by have concurrent licensor fixed or other pursuant to upon specifying any, as, or him, the last known States insofar as of in the for receipt royalties States- provided Claims, may aggrieved disposition fair to section when specified institute District or in United which- manu- to maxi- added juris- here- just five ad- re- by in itself of fendant or suant tion shall Government as set vised facture, use, States, rates by such< tions of reduction paid or ready paid “Sec. Whenever a reduction sрecial, [*] order, by directly invention, Statutes, suit or amounts of to section compromise forth taking in [*] any wartime pursuant in that to inure an or by way sale, in title or United might indirectly into account v licensee.” to otherwise. by way or other contract all production. to or hereof, royalties the benefit be sixty States [*] defenses, general section for settlement, pur- pleaded for of refund corresponding disposition infringement price such reduc- of such [*] tbe is may the Re- by In effected hereof,, in manu- condi- to if avail [*] any de- al- be compensation What pure money right just was taken. tain as measure No only was the licensor’s taken when the was Goverment is customer patent needed rights which was and the in engaged nation is total under his war. right to wage The nation to war. constitutionality apply On the taken; ac- exclude the Government ing unpaid the Act accrued but for unpaid on items crued and at the time of notice giving use, determined to which were Government patentee, we can little to what we said add pat- excessive, also The were taken. private in Timken.23 The subordination paid was still entitled to be entee-licensor proper interests to exercise of Govern to' be a reasonable wаs determined power settled, mental is now well even Claims amount and sue compensation when no given for the ad ought he thought he for whatever more Express provision verse action. for com full get. And contract he also his retained pensation would seem re remove rights for units manufactured customers maining provi doubt. Similar retroactive The fact other than the United States. Renegotiation sions in the Act have been was, practically speaking, no ci- there recently upheld by Supreme Court and market, may emptiness vilian indicate very broad terms.24 wartime; remaining rights but it The will District Court just graphically also illustrates how artifi- be affirmed. pat- cial which was the market FEE, just ALGER Judge a measure of District
entee relies to establish JAMES compensation. (concurring). opinion foregoing Concurrence require Fifth Amendment does The ap- absolute as to the result and as to the royalties specified license proach up point where im- it seems agreement just compen be the measure of properly plaintiff accept to bind the abundantly compen It is clear sation. compensation by the tendered orders. This appropriation private property sation point need not be herе settled. is measured value Government cause should not Determination of a property taking21 at grounds based on constitutional unless this impart accretions to value exclusive of Particularly, course unavoidable. con- pointed taking.22 ed As we out by the validity statute stitutional of a as a whole Timken, fair the license were rates not be considered where whatever should production be enough peacetime scale there be affects vice severable unduly demand was high when the came clause, “taking into account the conditions requirements many fold increased production.” wаrtime enormous increase in global war. preemption position the li- by normal goods measured stand value of property right hardly defined supply can ob- censee demand ards 96 A.L.R. U.S. 290 U.S. Development n negotiation (cid:127)§ tracts Cir., 22 1191] to future Cir., United States U.S. A.L.R. Olson «* * 1944, 369, final already Cir., Jacobs 1943, 13, 1. 63 S.Ct. v. United payments * 55; Act 54 S.Ct. Co. Congress F.2d 209. 136 F.2d existing 54 S.Ct. United States [50 contracts v. v. 144 F.2d 276, had States, 1934, U.S.C.A.Appendix, United 26, Miller, but limited the not been 78 States, 1933, pursuant and to con- L.Ed. L.Ed. 1943, States, v. 78 L.Ed. Cameron Rayno, made *9 142, 336, Re- 317 involved. ment United as also subcontracts made original A prior yet profits whether each right before or after extent “We either event contract has bеen 68 S.Ct. exists directly to the date of to recover excessive derived uphold States, 1948, Act. been they the contracts made, as arose with the Government done here.” and, These to such equally a final right recovery if from contracts it passage uncompleted included contracts enactment of payment before us. excessive as U.S. war contract be those Lichter v. profits authorized excessive has not Govern- profits made here Act. valid. Act was by licensee of' expropriation status W-9 N-7 virtue of orders Laborator- for Federal
an absolute defense pay- ies, for the provision Inc. is a There patentee compensation
ment some presented is problem licensor. sole compensation so the amount of
whether it question that can by clause
limited compensa- “just longer as described no within controversy is not But
tion.” leaves competence. A provision valid our compensation be fixed amount of Court, in If ac-
the Court Claims. ques- disregard cordance compensation,” “just clause, grant tioned been in- right will have
no constitutional defendant fringed. can done to Justice settled,
by leaving be so the amount to final determination making
rather than go extent of We
here. need not
needlessly prejudicing the interests of similarly
plaintiff others situated balance-of this clause well
holding constitutionally and the re- Act founded
covery administratively determined before Claims, known if
it is Court of decision,
not so our would al- shackled ground On the that the seizure
low. firm I case,
constitutes defense in this would not,
stop majority, and would as do the
plunge into the maelstrom controversy powers of the
about war executive.
UNITED YOUNGSTOWN STATES et SHEET & TUBE CO. al.
No. Appeals States Circuit. Sixth
Dec.
