227 F. 906 | S.D.N.Y. | 1915
The appearance of counsel representing the Navy Department is as amicus. The United States is not a party to this suit, but it is in my opinion competent for the government,
The defendant’s motion to dismiss the bill on the ground that he is sued in the wrong district must be denied, if the record is to stop here. So far as affidavit making goes, I think it shown by a present fair preponderance of evidence that the defendant has in the past usually resided within the Southern district, has always maintained an office here, and had and owned the sample set of apparatus (which is the infringement) within the Southern district shortly before suit. Under accepted practice the defendant can either appear, reserving liis rights, and make the matter of residence an issue in the cause, or he may move for a reference in limine.
Such is the case here. The Navy Department has by contract employed Simon to construct radio apparatus, without which certain vessels of war now approaching completion cannot go into commission. If Simon does not complete the articles for which he has contracted, injury to the military arm of the government will result. In the language of the Assistant Secretary of the Navy:
“Interference by injunction * * * with the fulfillment by Simon - * * of his contract with this department * * * would embarrass the department * * * and be detrimental to-the interests of the naval service.”
It is regrettable that this official opinion is contained in a letter to the court, not made a part of the moving papers, though now added to them by me. But the method by which one is advised of matters affecting the public welfare cannot prejudice the commonwealth. Therefore, because upon the assumption that Simon is an infringer the ordinary remedy against him would injure an arm of the government of the greatest immediate importance, no injunction will issue in any way interfering with the contract now existing between Simon and the United, States. Without commenting further upon matters political rather than judicial, the case is within the exception recognized by Clifford, J., in Brady v. Atlantic Works, Fed. Cas. No.’ 1,794.
The motion to dismiss this bill, upon the ground that Simon, as a contractor with the government for articles infringing a patent of the United States, is protected by the “Act to provide additional protection for owners of patents of the United States and for other pur
I think such a defense might have been set up by plea under tire former practice, and may now be made by motion under equity rule 29 (198 Fed. xxvi, 115 C. C. A. xxvi). The material facts which would formerly have been asserted by plea or proven by evidence under the plea are these: Plaintiff is the owner, with good right to sue thereon, of a valid patent of the United .States. Certain officers of the United States Navy drew plans and specifications for part of a radio apparatus which it was physically impossible to comply with except by infringing (outright or by contribution) tire aforesaid patent of the plaintiff. Duly authorized governmental authority then invited bids upon said plans and specifications. All bidders, as well as the draughtsmen of said plans and specifications, were well aware of the existence of plaintiff’s patent, and there must be conclusively imputed to them an intention to infringe or at least to perform acts which would constitute infringement in a private person.
Several parties bid for the contract under the plans aforesaid, including two- licensees of'this plaintiff. Simon was not the lowest bidder, but he was, in the opinion of the naval authorities, the best bidder, in that the apparatus devised or “laid out” by him was in compactness, strength, adjustment, and other purely mechanical attributes the best device offered. For this reason Simon’s bid was accepted. He made and submitted to the laboratory at the Brooklyn Navy Yard one specimen or model -of his apparatus. The making thereof is the act of infringement alleged, and the fulfillment of his contract by multiplying similar apparatus up to the limit of the contract is what is sought to be prevented by preliminary and final injunction.
• It thus appears that there is an element of personal skill and mechanical superiority involved in Simon’s machinery. This explains the action of the naval authorities; but it does not, as between private parties, affect in any way the question of infringement. Viewed without regard to the act of 1910, certain officers of the government deliberately committed the United States to an infringement of private rights; i. e., an appropriation of private property. Pursuant to this intent they
Under these facts the position is taken by defendant that he is an employé, agent, or the like, of the United States. This cannot, I think, be sustained. He is an independent contractor; i. e., a person held at arm’s length by the department with which he has contracted, one who gives bond, not for his general good conduct, but for the fulfill-^ ment of his contract, who may bring an action in the Court of Claims for any balance that he considers to be unpaid thereunder, and who may be sued, if he does not fulfill his obligation, not for malfeasance in office, but for breach of contract.
So far as the first query is concerned, it has been fully and finally answered by Crozier v. Krupp, 224 U. S. at page 305, 32 Sup. Ct. at page 491, 56 L. Ed. 771, which holds that, having regard to “the undoubted authority of the United States as to such subjects [as patents] to exercise the power of eminent domain, the statute * * * provides for the appropriation of a license to use the inventions; the appropriation thus made being sanctioned by the means of compensation for which the statute provides.”
It may in some sense be true, as is urged by the plaintiff, that the act is remedial and does not disturb any of the rights of a patentee which existed before its passage. But it is also true that, if the act creates a legal status, the relation of the holder of that status to the rest of the world is affected by the statute, whether such change or modification of relation be specifically mentioned or described in the act or not.
The Supreme Court has defined the somewhat inartificial language of the statute. What the act contemplates being done by the United States is to use an invention “described in and covered by a patent.” This is held to be equivalent to the expropriation or appropriation of a “license to use the inventions.” This means a license in its widest sense; i. e., both to make and to use, and possibly to sell, but certainly both to make and to use.
■ But it is said (and here hangs the plaintiff’s whole case) that before the act of 1910 the holder of a patent could sue a contractor with the government for infringement as fully and freely as he could any one else, provided always that he did not by injunction or otherwise interfere with governmental possession of -anything (however obnoxious' to-the patentee’s rights) actually in governmental use. Brady v. Atlantic Works, supra; International, etc., Co. v. Cramp, 211 Fed. 124, 127 C. C. A. 522, and cases therein cited. In my opinion this is true, but not so as to the corrollary stated by plaintiff, viz., that since this' right existed before the act of 1910, and is not explicitly taken away by that statute, it must still survive as fully as of old. If the reason of the law fails, the law ought to fail with it; this maxim seems to me to-apply very forcibly here. The reason for permitting actions for infringement by private parties against government contractors was that since infringement was a tort, and the United States had never consented to be sued in tort, patentees were without remedy. Now they have such remedy under the statute, and cannot take what the statute gives (or imposes) and retain what they had before, if it interferes-with governmental enjoyment of its license.
The United States has a license under this patent to make, use, and perhaps to sell, to any extent deemed beneficial to- the commonwealth, and without any territorial or other limitation upon its right. A licensee to make and use is not (in the absence of specific language in-his license) limited to making with his own hands, in his own shop, or by his own employés. He may employ, procure, or contract with as many persons as he chooses to supply him with that which he may lawfully use, provided such conduct does- not change his relation to the licensor. In my opinion this is exactly what the government has done here, and Simon is not an infringer because he is supplying lawful goods to a lawful licensee. Foster Hose Supporter Co. v. Taylor Co., 191 Fed. 1003, 111 C. C. A. 667.
. There is another and more technical view of the facts, viz.: ANhat Simon contracted to furnish to the Navy Department is not a complete wireless apparatus, nor even a complete transmitting device, but only certain transmitter parts. The parts (to Simon’s knowledge) could
No injunction will issue. The motion to dismiss is granted, unless plaintiff elects in 20 days to plead over and allege infringements not arising from governmental contracts. If such election is made, defendant to answer in 20 days after amended bill filed.
It is inconceivable that the government could or would sell for gain patented articles which it had manufactured or caused to be manufactured. But can it be doubted that articles covered by a patent, used and then sold after condemnation by governmental authority, would lawfully pass into the hands of the purchaser? In this sense, at least, the appropriated license is one to sell.
Note. — Plaintiff elected not to plead oyer, and has appealed from a decree of dismissal.
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