Opinion — Farnham v. United States

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FARNHAM v. UNITED STATES.

APPEAL FROM THE COURT OF CLAIMS.

No. 107. Argued March 2, 1916.—Decided April 3, 1916.

Where the officers of the United States charged with the matter have

refused the offer of a patentee for the use of his invention, and have

declined to use it, and, proceeding independent!y, make and use ar-

ticles designed by themselves, which the patentee claims embody his

invention, there is no implied contract on the part of the Govern-

ment to pay for the use of the invention; in the absence of such

contract the Court of Claims could not take cognizance of the claim

of an inventor for infringement of his patent prior to the passage of

the act of June 25, 1910.

While the petitions in this case must be dismissed because the claims

are based on an implied contraet whieh hes not been proved, the

judgment of dismissal should be without prejudice to claimant's

right to present his claim for infringement of his patent under the

Act of June 25, 1910, ¢. 423, 36 Stat. S51.

49 Ct. CL. 19, affirmed.

Tue facts, which involve a claim against the United

States for infringement of patent rights in connection

With postage stamp-holders, are stated in the opinion.

538 OCTOBER TERM, 1915.

Opinion of the Court. 240 U.S.

Mr. George W. Ramsey and Mr. Hosea B. Moulton for

appellant.

Mr. Assistant Attorney General Huston Thompson for

the United States.

Mr. Justice Huaues celivered the opinion of the court.

The claimant, in the year 1906, brought his petition

to recover upon the basis of an implied contract for the

alleged use by the Government of his patented invention,

consisting of a stamp-holder. The claim was for profits

alleged to have been made between April 16, 1900, and

June 30, 1905. Another petition was filed, in 1911, upon

the same basis, to recover profits for the period between

June 30, 1905, and June 30, 1910. Motion to consolidate

the two suits, as involving the same issues, was granted.

Upon hearing, the court made findings of fact and held

that the plaintiff was not entitled to recover. 49 Ct. Cls. 19.

The court found that, under date of January 4, 1898,

Letters Patent No. 596,656 had been issued to the claim-

ant for improvement in stamp-holders. Models of the

proposed stamp book 2d an explanatory pamphlet were

submitted to the Third Assistant Postmaster-General

with the suggestion that the Post Office Department

should adopt this method of handling and selling stamps.

That officer, on June 17, 1898, returned the books to the

claimant, saying: ‘“‘The Department does not deem it

expedient to sell stamps in this way.”” The claimant on

July 14, 1898, replied, stating that the descriptive pamph-

let and the model stamp books formerly transmitted did

not fully show the invention and that he requested a per-

sonal interview. Two days later the Government. re-

sponded as follows: ‘Your plan for booking and selling

stamps is well understood; your explanation of it could not

be clearer; but, as stated in a former letter to you, the

FARNHAM v. UNITED STATES. 539

240 U.S. Opinion of the Court.

Department does not wish to adopt it.” In June, 1899,

the adoption of the claimant’s device was again suggested

to the Post Office Department, and the Department

replied that it adhered to its former decision. On July 1,

1899, Edwin C. Madden was appointed Third Assistant

Postmaster General and he held office until March, 1907.

Soon after his appointment he took under consideration

the manufacture and sale of postage stamp books. He

designed, without actual knowledge of the existence of the

claimant’s patent or of the correspondence with the De-

partment relating to it, the stamp book now in depart-

mental use. This stamp book was transmitted by Mr.

Madden to the Bureau of Printing and Engraving with an

inquiry as to the possibility of its manufacture, the details

of manufacture being left to that Bureau. It prepared

plans accordingly. After the public announcement that

the Department would begin the public sale of two-cent

stamps in book form, Mr. Madden learned for the first

time that it was claimed that there were letters patent

covering the proposed stamp book, and before issuing

the same to the public he requested the Assistant Attorney

General for the Department to examine all such claims,

and letters patent, and to advise him whether his book

would constitute an infringement. The Assistant At-

torney General advised him to proceed with the public

sale as contemplated; that the stamp book to be issued

was not covered by any previous patents. Both he and

Mr. Madden examined the patents of the claimant, and

Mr. Madden also examined the correspondence on file.

From the beginning the latter insisted that the invention

of the stamp book issued by the Department was his own,

being independent of the claimant’s patent. In March,

1900, the Third Assistant Postmaster General addressed

a letter to the claimant’s attorney expressly asserting

that the Department's stamp book was not an infringe-

ment. It was in these circumstances that the Govern-

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540 OCTOBER TERM, 1915.

Opinion of the Court. 240 U.S.

ment commenced the manufacture of its stamp books

on March 26, 1900.

It is apparent that these facts furnished no basis for a

finding of implied contract on the part of the Government

to pay for the use of the invention,—the only ground upon

which the petitions were cognizable in the Court of Claims.

Schillinger v. United States, 155 U. S. 163, 170; United

States v. Berdan Arms Co., 156 U. S. 552, 556; Russell v.

United States, 182 U. 8. 516, 530; Crozier v. Krupp, 224

U.S. 290, 303, 304; United States v. Société Anonyme &c.,

224 U.S. 309, 311. In this view, the consolidated petition

was properly dismissed and it is unnecessary to consider

the questions which have been argued with respect to

actual use and the validity of the claimant’s patent. The

second petition related to a period extending to June 30,

1910, thus embracing five days after the approval of the

Act of June 25, 1910, c. 423, 36 Stat. 851, permitting the

recovery from the Government of reasonable compensa-

tion in cases of infringement. Crozier v. Krupp, supra.

This petition, however, like the first, did not purport

to present a case within this Act, but was rested solely

upon implied contract. The judgment, however, should

be without prejudice to the presentation of any claim the

petitioner may have under the statute; and with this

modification the judgment is affirmed.

It is so ordered.

Mr. Justice McREyYNo ps took no part in the consider-

ation and decision of this case.