Amicus Curiae Brief — Sperry Co. v. Arma Co.

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Statutes involved_------------------ De ata ce apnea estan esos aba 5

Summary of argument_------------------------- 999 7

Argument:

I. THE PROPER CONSTRUCTION OF THE ACT OF JULY 1, 1918- 8

Il. APPLICATION OF THE ACT OF JULY 1, 1915, TO THE FACTS

OW S896 CARB. .23 54-2252 5-8 354 es nnsd nner nnn 20

Conclusion -------------------------~- Se eee. er 22

Appendix: U nreported opinion in L watt n Railway Artillery,

Inc, v. Pullman Co_--------------=-------- == 25

AUTHORITIES CITED

Cases:

Cramp & Sons vy. Curtis Turbine Co., 246 U. 8. 28-------- 13, 14

Crozier v. Krupp, 224 U. 8. 900) nn cnecmannnonnnecaeseu 11,13

Floyd Smith Aerial Equipment Co. V. Irving Air Chute Co.,

DFR RGA. BOM oo Scene sae nae eaen ee eR nan ae 19

Foundation Co. V. Underpinning & Foundation Co., 206

Wis B74 oe eae tanec nene ne +seeansenn so" 19

Isherwood v. Newport News Shipbuilding & Dry Dock Co.,

289 Fed. 282; 5 F. (2nd) 924-------------------------— 20

Louie v. United States, 254 U. 8. 548_...---------------- 3

Luellen Railway Artillery, Ine. V. Pullman Co. (unre-

ported) ------------------------------"~ a eae eae 20

Marconi Wireless Telegraph Co. V. Simon, 246 U. 8S. 46-- 15

Wood v. Altantic Gulf € Pacific Co., 296 Fed. <g ). peeres 12, 17, 20

Statutes:

Act of June 25, 1910, ¢. 423 (36 Stat. 851) ---------------- 5,6

Act of July 1, 1918, ¢. 114 (40 Stat. 704, 705) ------------ 6,7

Act of February 13, 1925, c. 229 (43 Stat. 936) ---------- 2, 22

Judicial Code, Sec. 238_---------------------- = 999 -"= 2, 3, 22

92444—26——1 (1)

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PLETE TE RO IY SNOPES NM . e eee

Inthe Supreme Court of the Wnited States

OcToBER TERM, 1925

No. 239

SPERRY GYROSCOPE COMPANY, APPELLANT

v.

ARMA ENGINEERING COMPANY

ON APPEAL FROM THE DISTRICT COURT OF THE UNITED

STATES FOR THE EASTERN DISTRICT OF NEW YORK

BRIEF FOR THE UNITED STATES AS AMICUS CURLZ

OPINION BELOW

The opinion of the United States District Court

(R. 42) is not reported.

JURISDICTION

The judgment of the United States District

Court was entered October 9, 1924. (R. 49.) Di-

rect appeal to this Court was taken December 30,

1924. (R. 49.) The judgment of the District

Court provided ‘‘that the bill of complaint be and

the same is hereby dismissed for lack of jurisdiec-

tion.’ Direct appeal to this Court was evidently

taken on the theory that it was authorized by See-

(1)

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tion 238 of the Judicial Code as it stood prior to

the Act of February 13, 1925, and which provided

that appeals might be taken from District Courts

direct to this Court—

2

In any ease in which the jurisdiction of

the court is in issue, in which ease the ques-

tion of jurisdiction alone shall be certified

to the Supreme Court from the court below

for decision * * *,

It is far from clear that the jurisdiction of the

District Court, in any proper sense, was at issue.

The question was not, as stated in the appellee’s

brief, whether a District Court of the United States

or the Court of Claims has jurisdiction of the cause

of action presented by the bill of complaint. The

Court of Claims could have no jurisdiction over a

suit against a private corporation. The real ques-

tion is not, properly speaking, one of jurisdiction,

but whether the appellant (plaintiff below) has a

cause of action against the appellee (defendant be-

low) enforceable in any court, the contention of

the latter being that the Act of July 1, 1918, pro-

viding that when a patented article is manufac-

tured for the United States without license from

the owner of the patent the latter’s remedy shall

be by suit against the United States in the Court of

Claims, operated to exclude any recovery against

a contractor manufacturing a patented article for

the United States. In other words, the District

Court held, in substance, that the plaintiff had no

cause of action against the Arma Engineering Com-

3

pany because the cause of action had been taken

away by the United States under the power of

eminent domain.

In principle, this case, so far as jurisdiction is

concerned, is like that of Louie v. United States,

254 U.S. 548, where the Court held that the ques-

tion was not really one of jurisdiction, but went

to the merits, and that a direct appeal to the

this Court was unauthorized.

The United States District courts have jurisdic-

tion over suits arising under the patent laws, other

than suits against the United States. If the Dis-

trict Court in this case could not allow veecovery to

the plaintiff, it was not through want of jurisdic-

tion over the parties or the subject matter, but be-

cause no cause of action existed in favor of the

plaintiff and against this defendant on account of

the manufacture of patented articles for the United

States, which could be enforced in any court.

STATEMENT

f

This suit was brought in July, 1923, in the United

States District Court for the Eastern District of

New York by the Sperry Gyroscope Company, a

corporation, against the Arma Engineering Com-

pany, a corporation, to enjoin the latter from manu-

facturing and selling the gyrosecopie apparatus

claimed to infringe patents owned by the Sperry

Company, and to recover damages and profits on

account of prior infringements. <As_ originally

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drawn, the bill of complaint covered the manufac-

ture and sale of the alleged patented apparatus not

only to the United States but to others.

By amendments to the bill of complaint (R. 48),

the scope of the action was finally limited to a

claim for damages or profits on account of the man-

ufacture and sale by the defendant of gyroscopic

compasses for the United States Navy Depart-

ment under contract with said Department, the

allegation being ‘‘ that the defendant * * *

without the license * * * of plaintiff * * *

made a number of gyroscopic compasses for and

sold them to the United States Navy Depart-

ment under contract with the said Navy Depart-

ment * * * during the vears 1918 to 1923, all

in infringement of the aforesaid Letters Patent.”

The contract between the United States and the

Arma Engineering -~Conypany is not set forth in

the record, and it does not appear whether that

contract contained any provision to the effect that

the Arma Engineering Company should indemnify

and protect the United States against claims aris-

ing under’patents. It will be noted that the com-

plaint alleges that the defendant manufactured and

sold the gyroscopic compasses to the Navy Depart-

ment during 1918, but it does not appear whether

the compasses were delivered to the United States

before or after July 1, 1948. There is no allega-

tion in the bill of complaint, and nothing in the

record, to show that the contract specifications for

the compasses were such that a performance of

— .

5

the contract necessarily involved an infringement

of the patents, or that the contractor might not

have performed his contract by delivering gyro-

scopic compasses which did not infringe. The case

was disposed of by the District Court on bill, an-

swer, and some answers to interrogatories.

STATUTES INVOLVED

The Act of June 25, 1910 (Chap. 423, 36 Stat.

851), is as follows:

An Act to provide additional protection for owners

of patents of the United States. and for other

purposes

Be it enacted by the Senate und House of

Representatives of the United States of

America in Congress assembled, That when-

ever an invention described in and cov-

ered by a patent of the United States

shall hereafter be used by the United States

without license of the owner thereof or law-

ful right to use the same, such owner may

recover reasonable compensation for such

use by suit in the Court of Claims: Pro-

vided, however, That said Court of Claims

shall not entertain a suit or reward compen-

sation 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: Pro-

vided further, That in any such suit the

United States may avail itself of any and all

defenses, general or special, which might be

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pleaded by a defendant in an action for in-

fringement, 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 patentee, who,

when he makes such claim is in the employ-

ment 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 em-

ployee during the time of his employment

or service.

The Act of July 1, 1918 (Chap. 114, 40 Stat. 704,

705), provides:

The Act entitled ‘“‘An Act to provide addi-

tional protection for the owners of patents

of the United States, and for other pur-

poses,’’ approved June twenty-fifth, nine-

teen hundred and ten, shall be, and the same

is hereby, amended to read as_ follows,

namely :

‘* That whenever an invention described

in and covered by a patent of the United

States shall hereafter be used or manufac-

tured by or for the United States without

license of the owner thereof or lawful right

to use or manufacture the same, such own-

er’s remedy shall be by suit against the

United States in the Court of Claims for the

recovery of his reasonable and entire com-

pensation for such use and manufacture:

Provided, however, That said Court of

Claims shall not entertain a suit or award

compensation under the provisions of this

7

Act where the claim for compensation is

based on the use or manufacture by or for

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, that might be pleaded by a de-

fendant in an 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

patentee who, when he makes such claim, is

in the employment or service of the Govern-

ment 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 employinent

or service.”’

SUMMARY OF ARGUMENT

The Act of June 25, 1910, merely waived the

immunity of the United States from suit on claims

of a patentee for infringing use by the United

States and did not ‘affect the liability to the pat-

entee of others who manufactured infringing ar-

ticles for the United States. The Act of J uly 1,

1918, made a radical change, in that it took from

the patentee, under the power of eminent domain,

his cause of action against one who manufactures

infringing articles for the United States and, by

way of compensation placed on the United States

the entire liability for the infringing manufacture

for, as well as the use by, the United States. To

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be a ‘‘manufacture for’’ the United States

within the meaning of the Act of 1918, so as to

place the liability on it and release its contractor,

it must appear that the performance of the con-

tractor’s agreement to make and deliver articles

to the United States necessarily involved infringe-

ment.

If the contract may be performed without in-

fringement, the contractor may not by either con-

scious choice or ignorance or inadvertence make

an infringing article and place the liability for

infringing manufacture on the United States and

relieve himself from it. In this case the record

does not show that the contractor was requived by

his contract to make and deliver to the United

States compasses infringing the appellant’s pat-

ents, and so far as the record shows it may have

been possible for the contractor to comply with

his contract by furnishing compasses which did

not infringe, and, therefore, liability for the in-

fringing manufacture was not shifted to the

United States, and the complaint stated a cause of

action.

ARGUMENT

I

THE PROPER CONSTRUCTION OF THE ACT OF

JULY 1, 1918

The Act of 1910 (id not provide for the assump-

tion by the United States of any liability to a pat-

entee for infringement incurred by those who man-

ufactured patented articles for and sold them to

an

9

the United States, nor did it relieve the contracting

manufacturers from liability to the patentee for

infringing manufacture and sale. It made the

United States liable only for the infringing use by

the United States, for which no other persons would

be liable to the patentee in any event. It therefore

clearly provided an additional protection to the

patentee by waiving the immunity of the United

States from suit, and allowing the patentee to en-

force against the United States a liability that the

United States alone ineurred.

The Act of July 1, 1918, made a radical change.

While the Act of 1910 recited that it provided

‘additional ’’ protection for patents, the Act of

1918, while referring to the Act of 1910 as an Act

to provide additional protection for patentees, con-

tains no assertion that it—the Act of 1918—has

any such purpose, and there is in it no suggestion,

through the use of words reciting an intent to pro-

vide additional protection, that the patentee was to

retain his rights or remedies against those who

manufactured infringing articles for the United

States.

The Act of 1918 provides that if a patented

invention is manufactured or used by the United

States the latter shall be subject to suit. For sueh

an infringement the United States alone wouid

be liable in any event, and in this respect the stat-

ute differs only from the Act of 1910 in waiving

immunity of the United States from suit for in-

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fringement resulting from the manufacture by as

well as the use by the United States—an addition

of no practical importance.

The Act of 1918, however, also provides tliat the

United States shall be liable if the patented inven-

tion is, without a license from the patentee, manu-

factured, for the United States by others. In this

respect the Act is more than a waiver of immunity.

It effects an assumption of liability and an obliga-

tion to pay, for infringements, liability for which

would otherwise rest on others.

It goes one step further and makes the remedy

against the United States exclusive, and creates an

immunity from suit in favor of the contractor or

third party, who has made the infringing device for

the United States.

The statement that ** such owner’s remedy shall

be by suit against the United States,’ under

familiar rules of construction, excludes the idea of

ay remedy against any one other than the United

States, and excludes the idea of a remedy by in-

junction against the United States.

This idea is further driven home by the state-

ment in the Act that from the United States the

patentee shall recover his ** entire compensation for

such use and manufacture.”’ To say that this lan-

guage shows an intention to give the patentee the

option to recover either from the United States or

from its contractor damages for the manufacture

of infringing devices by the contractor for the

ll

United States is to disregard the plain meaning of

words.

The effect of the statute, therefore, is an expro-

priation by the United States, under the power of

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eminent domain, of any cause of action which the

patentee might have against the contractor who

manufactures for the United States with a provi-

sion for awarding compensation for such taking, in

a suit against the United States in the Court of

Claims. This amounts to a taking by the United

RESTS

States not only of a license under the patent for

use by it of the infringing article, but a free license

in favor of the contractor to manufacture the in-

fringing article for the United States, compensa-

tion for such taking to be paid by the United States,

upon being fixed by the Court of Claims.

It is not necessary, where such an exercise of

the power of eminent domain occurs, that com-

pensation should be paid in advance of or simul-

taneously with the taking. Crozier v. Krupp, 224

U. S. 290.

There is no substance to the contention that the

taking of property without providing for an award

of compensation by a jury, as distinguished from

a court, is a violation of the Federal Constitution.

The Act of 1918 covers cases where an inven-

tion is ** used or manufactured by or for the United

States.”’ It plainly covers a use by the United

States and the manufacture by or for the United

States. Whether it covers a case of a patented

device or tool used for the United States by a

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12

contractor in doing work for the United States,

or in manufacturing unpatented devices for the

United States, is not clear. Wood vy. Atlantic

Gulf & Pacific Co., 296 Fed. 718, 719. That ques-

tion may be laid aside in this case, because not ,

presented by this record.

A patent protects the patentee in the fields of

manufacture, sale and use. The Act of 1918 makes

the United States liable in money damages for

use by it, and for the moneys ordinarily recover-

able from an infringing manufacturer, where pat-

ented devices are manufactured for it. It definite-

ly excludes liability on the United States where

the latter buys infringing patented devices which

have not been specially manufactured for it, be-

cause the Act of 1918 does not cover the sale to

the United States of infringing devices, except in

those cases where the devices are ‘‘ manufactured

for ’’ it. This case presents only a situation where

patented devices were manufactured for the

United States.

It remains only to consider when a device is

manufactured for the United States within the

meaning of the Act of 1918, and whether lability

is shifted to the United States by that Act in the

ease of the manufacture of infringing patented

devices for the United States, where the United

States may not have intended an infringement.

The appellant contends that because the Act of

1918, as well as the Act of 1910, amounted to an

exercise of the power of eminent domain, the ex-

ercise of that power will not be presumed, in the

absence of an intention to exercise it.

In Crozier v. Krupp, 224 U.S. 290, it appeared

that Crozier, as Chief of Ordnance, was engaged

as an officer of the United States in directing the

manufacture by the United States of guns embody-

ing patented inventions. The United States was,

in fact, the manufacturer. The point was made

that as the United States was the principal, and

Crozier only its officer, the suit was one against the

United States. That point was laid aside as un-

necessary for decision. The Court held that the

Act of 1910 amounted to an appropriation by the

United States of a license to use in any case where

it in fact used a patented invention, and that the

remedy of the patentee, so far as concerned the use

by the United States, was against it in the Court of

Claims. No point was made as to whether the

United States was liable unless it intentionally in-

fringed or thought it was infringing, and the case

proceeds on the theory that if there was in fact a

use by the United States of an infringing device,

the question whether it consciously infringed in the

sense of knowing it was using a patented device,

was immaterial. The opinion does not justify any

other conclusion.

In Cramp & Sons v. Curtis Turbine Company,

246 U. S. 28, Cramp made a contract with the

United States to build destroyers according to de-

tailed plans and specifications. The contract con-

14

tained the express provision that the contractor

would hold the United States harmless from all lia-

bility to patentees on account of the use of any

patented invention, article, or appliance. The case

involved patents on the turbine engines installed

in the destrovers. The suit was against Cramp &

Sons, who did not use the patented device, but

manufactured and sold it to the United States, and

as the Act of 1910 only imposed liability on the

United States for use by it and left its contractor

liable to the patentee for manufacture and sale, it

Was quite evident that there was nothing in the

Act of 1910 which prevented the patentee from

recovering damages against Cramp & Sons for the

manufacture and sale of the patented device.

Cramp contended that by virtue of the Act of 1910

the United States had aequired, under the right of

eminent domain, a license to use the patented tur-

bines and that Cramp & Sons had merely built the

articles for one licensed to use them, and therefore

the manufacture and sale in effect were licensed.

This was obviously untenable, as the license of one

person to use does not protect another who manu-

factures and sells to the licensee.

Recognizing that a patent covers the exclusive

right to manufacture, use, and sell, and that each

one of these acts may constitute an infringement,

all that the Court decided, or intended to decide, in

the Cramp case was that the Act of 1910, which

made the United States liable to the patentee for

its unlicensed use of a patented article, and which

pie: aoe

15

act effeeted only a waiver by the United States of

immunity from suit, did not operate to relieve

others who manufactured or sold the article to the

United States from liability for the infringement

of the patentee’s exclusive right to manufacture,

use and sell.

In Marconi Wireless Telegraph Company v.

Simon, 246 UL S. 46, the wireless company brought

suit to enjoin Simon from making delivery to the

United States of wireless transmitters alleged to

be covered by its patents. It was not made clear

by the record that the making of the wireless sets

was ii and of itself an infringement. The Court

said that if it had appeared that the making of the

sets was in and of itself an infringement, Srmon

would not have been protected by the Act of 1910,

It sent the case back to the lower court because of

uncertaiity as to whether the manufacture was in

and of itself an infringement of the patents.

The correct view, and one consistent with the —

decisions of this Court, is that there is a ‘* manu-

facture for *’ the United States within the meaning

of the Act of July 1, 1918, and a taking by it, under

ee

the power of eminent domain, of rights under a

patent, where the performance of the contract be-

tween the contractor and the United States to

manufacture articles for the United States neces-

sarily involves an infringement of a valid patent.

Where the contract specifications make it impossi-

ble for the contractor to fulfill his contract and at

16

the same time avoid infringement, liability rests on

the United States and the contractor is relieved.

To hold otherwise would defeat the very purpose of

the amendment effected by the Act of 1918, and dis-

closed by the Congressional Record.

It will be noted that the Act of 1918 provides that

in any suit against the United States it may avail

itself of any and all defenses that might be pleaded

by any defendant in an action for infringement,

which leaves it open to the United States to deny

infringement and to deny the validity of the patent.

The giving of authority for the assertion of these

defenses is wholly inconsistent with the idea that

the United States only shoulders liability where it

intends to infringe a patent believed by it to be

valid, because if that were the meaning of the Act

of 1918 the defense of non-infringement or invalid-

ity of the patent never would be asserted.

The only real question as to the meaning and ef-

fect of the Act of 1918 arises where the contractor

who agrees to manufacture and deliver a certain

device to the United States, may be able to fulfill

his contract either by manufacture and delivery of

a non-infringing device or by the manufacture and

delivery of an infringing device. In such a ease,

it may well be said that an infringing device is not

‘* manufactured for ’’ the United States within the

meaning of the Act of 1918. If the contractor has

the choice of infringing or not infringing a patent

in the fulfillment of his contract with the United

17

States, it is reasonable to suppose that it was not

the intention of the Act of 1918 to allow the con-

tractor to make a choice at the expense of the

United States. This subject was discussed in

Wood vy. Atlantic Gulf & Pacific Company, 296

Fed. 718. The court, after considering whether

the Act of 1918 intended to rest liability on the

United States for the ‘“‘ use for ’’ the United States

of a patented device by the contractor in the per-

formance of work for the United States, at page

722, said:

I can readily understand how the govern-

ment should provide that, where it calls for

the use by the contractor in doing work for it

of a patented article, it should be willing to

pay damages to the patentee because it had

required the use of the patented article in

doing the work. I cannot understand how

the government would be willing to pay such

damages as the patentee might suffer by the

unauthorized use by an independent con-

tractor, without any knowledge on the part

of the government or any requirement of the

government that such patented article should

be used in the performance of the work, any

more than the government would be willing

to pay for damages suffered by employees of

an independent contractor who were injured

in the performance of the work of such in-

dependent contractor, unless the govern-

ment directed the doing by such employee of

the thing which brought about his injury.

ANNE EE RE OR a

18

When the government knows and obliges

the contractor to use the patented article, of

course the government should be willing to

pay; but it will be going entirely too far to

say that, because any independent contrac-

tor for his own convenience saw fit to use

the patented article in| doing government

work, the government should pay for such

use by him, when they did not know he was

using it.

That a contract provision respecting liability of

the contractor or of the United States for infringe-

ment of patents, or providing that liability to the

patentee for such manufacture shall be borne by

the contractor, ean affect the operation of the Act

of 1918 is not apparent. If the performance of

the contract with the United States necessarily re-

quires a manufacturer to manufacture and furnish

an infringing article, it would seem that, under the

statute, liability to the patentee rests only on the

Government, and if there be a valid covenant by

the contractor to protect the United States against

claims of infringement, that operates merely as an

indemnity contraet under which the United States

could recoup itself for damages recovered against

it in the Court of Claims under the Act of 1918.

That again is a question which may be laid aside,

because not presented by this record, as the agree-

ment is not in the record.

The conclusion should therefore be that, in the

case of devices manufactured for the United States

—

19

by one contracting with it so to do, liability fox in-

fringement by manufacture and sale, as well as

by use, rests exclusively on the United States under

the Act of 1918, if the performance of the contract

necessarily requires an infringement, but not so if

the contract may be fulfilled by the manufacture

and delivery of a noninfringing article, but the

contractor, for reasons of his own, chooses to in-

fringe or does so unwittingly.

It is only necessary to add that the Act of 1918 is

prospective in its operation. It would be so con-

strued without any express provision in it, but

it contains the provision that the Court of Claims

shall not entertain a suit or award compensation

against the United States where the claim is based

on the use or manufacture by or for the United

States ‘‘of any article heretofore owned, leased,

used by, or in the possession of the United States.”’

The Act covers the case of devices in the posses-

sion of the United States after its passage, but not

those owned, used or possessed by it prior to its

passage.

The Act of July 1, 1918, has been considered in

the following cases:

Foundation Co. v. Underpinning & Foun-

dation Co. (8. D. N. Y.), 256 Fed. 374;

Floyd Smith Aerial Equipment Co. v.

Irving Air Chute Co. (W. D. N. Y.), 276

Fed. 834;

— |

OO a a - a

20

Isherwood v. Newport News Shipbuilding

& Dry Dock Co. (KE. D. Va.), 289 Fed. 282,

289. Same case on appeal, 5 F. (2d) 924,

933 ;

Wood vy. Atlantic Gulf & Pacific Co. (S.

D. Ala.), 296 Fed. 718;

Luellen Railway Artillery, Inc. v. Pullman

Co. (N. D. UL, E. D.). Unreported opinion

printed as an appendix hereto.

Il

APPLICATION OF THE ACT OF JULY 1, 1918S, TO THE

FACTS OF THIS CASE

The amended complaint (R. 48) alleged that

** during the vears 1918 to 1923" the defendant

made and sold to the United States infringing gyro-

scopic compasses. It does not definitely appear

whether these compasses were in the possession of

the United States before or after July 1, 1918, the

date of the passage of the Act here to be applied.

If any infringing compasses were delivered to or

in the possession of the United States prior to July

1, 1918, the question of liability for infringement

by their manufacture and sale is to be determined

by the Act of 1910 and not by the Act of 1918, and

under the Act of 1910, which only gave a right to

assert a claim against the United States for its

use, and left its contractor liable for infringing

manufacture and sale, a cause of action exists

against the defendant.

lamers oe

21

Having in mind the rule as to the burden of

proof, it is probably true that the complaint in

this respect stated no cause of action against the

defendant, Arma Engineering Company, under

the Act of 1910. It fails to show, with reasonable

certainty, that some of the infringing compasses

were used by or in the possession of the United

States prior to July 1, 1918. For all that appears

from the allegation in the complaint quoted above,

all of the compasses manufactured and sold to the

United States in 1918 may have been delivered to

it after July 1, so that in this respect the com-

plaint does not bring the ease under the Act of

1910.

The next question is whether the record shows

that the contract between the Arma Engineering

Company and the United States necessarily re-

quired in its performance the manufacture and

delivery of infringing gyroscopic compasses. It

is alleged that the compasses which were manufac-

tured and delivered, in fact infringed the plain-

tiff’s patent. The contract with the United States

and specifications are not in the record, and there

is nothing in the record to show that the Arma

Engineering Company could not have fulfilled its

contract without infringing the patents. For all

that appears in the record, gyroscopic compasses

might have been manufactured and delivered in

full compliance with the contract without in-

fringing.

~ -

Sate time lade

eniiaihaniatiettidiie aah tein ok tet ak ee

22

If we are right in the view that the Act of 1918

does not place liability on the United States, where

infringement is not necessary in the performance

of a contract, but where the contractor, for rea-

sons of his own, chooses to infringe, or does so in

ignorance or inadvertently, it follows that the Act

of 1918 does not fix liability on the United States

in this case and relieve the Arma Engineering Com-

pany from liability for infringing manufacture

and sale, and in that view of the case the court

erred in dismissing the bill of complaint.

CONCLUSION

The question decided by the District Court is

not one of its jurisdiction, but whether the plain-

tiff has a cause of action against the defendant

in any court, and consequently the case is not one

in which a direct appeal was permitted by Section

238 of the Judicial Code, as it stood prior to the

Act of February 13, 1925.

If the Court concludes, however, that it has juris-

diction, the judgment below should be reversed, on

the ground that, for all that appears in the record,

the Arma Engineering Company chose to infringe

for reasons of its own when an infringement was

not necessary to the performance of its contract

with the United States, and by the Act of 1918 it

was not intended to impose on the United States lia-

bility for infringing manufacture by others, and re-

lease those contracting with it for the manufacture

23

and sale of articles for its use, unless an infringe-

ment necessarily results from the performance of

the contract.

Respectfully submitted.

Wituiam D. MirrcHe.,

Solicitor General.

Harry E. Kniaut,

Special Assistant to the

Attorney General.

Henry C. WorkMAN,

Attorney.

APRIL, 1926.

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