William Cramp & Sons Ship & Engine Building Co. v. International Curtis Marine Turbine Co.William Cramp & Sons Ship & Engine Building Co. v. International Curtis Marine Turbine Co.
delivered the opinion of the court.
The history of this suit from its commencement up to the development of the controversy now before us, will be shown by an examination of the decided cases referred to in the margin. 1 We shall therefore not recur to-that which has gone before but confine our statement to the things essential to an understanding of the phase of the issué which we must now decide.
Under proposals submitted by the Navy Department the petitioner, the Cramp Company, in 1908 contracted to build two torpedo boat destroyers, Nos. 30 and 31, and in 1911 further'contracted to build four such boats, Nos. 47, 48,49 and 50. The specifications submitted by the department as to structure, engines, etc., were comprehensively detailed and the contracts were based either upon the acceptance of such specifications or upon such changes suggested by the contractor as met the approval of. the.. Navy Department. The contracts contained an express provision, which is in the margin,
2
protecting the Govern
The Turbine Companies filed their bill against the Cramp Company to recover damages and profits accruing .from the infringement of certain patents on turbine engines which the Cramp Company had placed in the boats built under the contract of 1908. Ultimately this claim of infringement was upheld by the Circuit Court of Appeals for the Third Circuit. 211 Fed. Rep. 124. On the hearing which then ensued before a master as to damages and profits, the Turbine Companies urged their claim and tendered their proof concerning the same, covering the four destroyers, Nos. 47, 48, 49 and 50, built under the contract of 1911, upon the ground of an infringement like that which had been committed as to the boats built under the contract of 1908.
Rubber Co.
v.
Goodyear,
The single question is, did the provisions of the Act of 1910 operate without more to confer upon the United States a license to use the patents of the Turbine Companies; and if so, was the Cramp Company as a contractor authorized to avail itself of the license by using the patent rights of the Turbine Companies without their consent? Avowedly on the véry face of the act its purpose was not to weaken the rights of patentees, but to further secure them. This results not only from the title of the law (An Act to provide additional protection for owners of patents of the United States, and for other'purposes), but further from the report of the committee of the House of Representatives where the act originated which stated that such was the purpose intended to be accomplished
But passing deducing the meaning of the act from its title and the report of the committee by which it was drafted, it is apparent that the significance which the contention affixes to it is directly in conflict with the text (which is in the margin
1
,) since that text expressly declares that the object of the act is to secure compensation for patentees whose rights have been “used by the United States without license” — the very antithesis of a right by license to use all patents which is the purpose attrib
But let us in addition pass these latter considerations and come not only to demonstrate the error of the construction asserted but to make manifest the true meaning of the statute from a twofold point of view, that is, first, from an analysis of the context of the statute as elucidated by the indisputable principles which at the time of the adoption of the act governed the subjects with which it dealt, and, second, from the consideration of the context and the effect upon it of the ruling in
Crozier
v.
Krupp,
At the time of the enactment of the law of 1910 the following principles were so indisputably established as to need. no review of the authorities sustaining them, although the leading cases as to all the propositions are referred to in the margin. 1
(a) That rights secured under .the grant of letters pat-
(b) That although the United States was not subject to be sued and therefore could not be impleaded because of an alleged wrongful taking of such rights by one of its officers, nevertheless a person attempting to take such property in disregard of the constitutional guarantees was subject as a wrongdoer to be controlled to the extent necessary to prevent the violation of the Constitution. But it was equally well settled as to patent rights, as was the case with all others, that the right to proceed against an individual, even although an officer, to prevent a violation of the Constitution did not include the right to disregard the Constitution by awarding relief which could not. rightfully be granted without impleading the United States, or, what is equivalent thereto, without interfering with the property of the United States possessed or used for the purpose of its governmental functions.
(c) That despite the want of authority to implead the United States, yet where an officer of the United States within the scope of an official authority vested in him to deal with a particular subject, having knowledge of existing patent rights and of their validity, appropriated them for the benefit of the United States by the .consent of the owner, express or implied, upon the conception that compensation would be thereafter provided, the owner of the patent right taken under such circumstances plight, under the statute .'law of the United States permitting suits against the United States on contracts express or implied, recover by way of implied contract the compensation which might he rightly exacted because of such taking.
(d) That where an officer of the United States in dealing with a subject within the scope of his authority infringed patent rights by a taking or use of property for
Coming to consider the statute in the light of these principles, there would seem to be no room for controversy that the direct and simple provision, “that whenever an invention described in and covered by a patent of the United States shall hereafter be used by the United States without license of the owner thereof or lawful right to use the same, such owner may recover reasonable compensation for such use by suit in the Court of Claims,” embraces and was intended alone to provide for the discrepancy resulting from the divergence between the right in one case to sue on an implied contract and the nonexistence of a right to sue in another. And this meaning becomes irresistible when the concordance which it produces between the title and the report of the committee is considered on the one hand, and the discord which would arise on the other from reading into the statute the theory of automatic and general license as to every patent which the argument presses. Observe that the right to recover by implied contract as existing prior to 1910 and the right to recover given by that act both rest upon the possession and exertion of official authority, although from the absence of definition in the statute the precise scope of the official power possessed in order to bring the authority into play is not specified but is left to be deduced from the application of general principles. Observe further that, resting thus upon the exercise of official power, it was not assumed before the Act of 1910 or under that act, that the official authority would consciously and intentionally be exerted so as to violate the Constitution
Nor is there any foundation for the assumption that the ruling in
Crozier
v.
Krupp,
Stated as briefly as we possibly can, the case was this: In the arsenals of the United States guns, and gun carriages were constructed containing appliances, which it was asserted infringed patent rights of the Krupp Company. A bill was filed against Crozier, who was Chief of Ordnance of the United States, to enjoin the alleged violation of the asserted patent rights. Crozier demurred to the amended bill on the ground that the court had no jurisdiction because the suit was one against the United . States. The trial court dismissed the bill. The Court of Appeals of the District of Columbia reversed because, although it fully conceded there was no jurisdiction over the United States and no power to interfere with its pub-
It was held that in view of the admission as to the nature and character of the acts done by the United States and further in view of the power of the United States to take under eminent domain the patent rights asserted, the provisions of the statute affording a right of action and compensation were adequate to justify the exercise of such power. In accordance with this ruling it was decided that there was no right to an injunction against the Chief of Ordnance as an individual and the parties if their rights had been infringed were relegated to the compensation provided under the Act of 1910. In reaching this conclusion the statute was critically considered principally for the purpose of determining whether the right to recover compensation whieh the act afforded was adequate to fulfill the requirements of compensation for rights taken as protected by the Constitution. It is true in the analysis which was made of the statute for this purpose it was said that the consummated result of the Act of 1910 in any particular case was to confer upon the United States a license to use the patent right (p. 305).
Under the view which we have stated it follows that the court below did not err in ordering the accounting under the 1911 contracts to proceed so that the statute when correctly construed might be applied. To the end, therefore, that effect may be given to such accounting as ordered by the court below our decree will be
The order of the Circuit Court of Appeals to the extent that it directed the accounting to he made on the basis therein stated is affirmed and the decree of the District Court is reversed and the case is remanded to the District Court for further proceedings in conformity with this opinion.
Notes
International Curtis Marine Turbine Co.
v.
Wm. Cramp & Sons Co.,
176 Fed. Rep. 925;
In re Grove,
“Patents. The party of the first part, in eonsidefution of the premises, hereby covenants and agrees to hold and'save the United States harmless from and against all and every demand dr demands of any nature or kind for or on account of the adoption of any plan, model, design or suggestion, or for or on account of the use of at^y patented invention, article, or appliance that has been or may be adopted or used in or about the construction of said vessel, or any part thereof, under this contract, .and to protect and discharge the Government' from all liability on account thereof, or on account of. the use thereof,
“An Act To provide additional protection for owners of patents of the United States, and for other purposes. :
“Be it enacted by the Senate and House of Representatives of the United States of America in Congress Assembled, That whenever an invention described in and covered by a patent of the United States shall hereafter be used by the United States without license of the owner thereof or lawful right to use the same, such owner may recover reasonable compensation for such use by suit in the Court of Claims: Provided, however, That said Court of Claims shall not entertain a suit or reward (sic) compensation under the provisions of this Act where the claim for compensation is based on the use by the United States of any article heretofore owned, leased, used by, or in the possession of the United States: Provided further, That in any such suit the United States may avail itself of any and all defenses, general or special, which might be pleaded by a defendant in ah action for infringement, as set forth in Title Sixty of the Revised Statutes, or otherwise: And provided further, That the benefits of this Act shall not inure to any pat-entee, who, when he makes such claim is in the employment or service of the Government of the United States; or the assignee of any such patentee; nor shall this Act apply to any device discovered or invented by such employee during the time of his employment or service.”
United States
v.
Palmer,