# Amicus Curiae Brief — Sperry Co. v. Arma Co. > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386006_0476%3A4 ## Record - **Collection:** Supreme Court brief - **Document type:** Amicus Curiae Brief - **Published:** January 1, 1926 - **Citation:** 271 U.S. 232 ## Text —— EAE SARITA DY FA EOE PES EOE ELIS ARATE TON GEES BACHE LAE LAAS S — = wwe Sy Pi RA Page Detaled BOY -.- 1.22 -225- =~ name ennnnnn enw nnn nen nn 1 SiO... - vane n n-ne nas near nnn 1 IEE Foo ci endn deanna sone Sana ene eanem ene AON S 3 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. Kat Freee re combines i . 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. O --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386006_0476%3A4. Public record. Not legal advice.