# Brief for the United States — Waite v. United States > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386007_0470%3A5 ## Record - **Collection:** Supreme Court brief - **Document type:** Brief for the United States - **Published:** January 1, 1931 - **Citation:** 282 U.S. 508 ## Text ee pipe - a i Offices Sunreme Coun, U. ™ } cD JAN 23 1931 C " =a LLiciapine FILE COPY No. 103 — | Inthe Supreme Court of the United States OcToBER TERM, 1930 Hakry F. WaAIrtre, PETITIONER v. THE Unirep STATES ON WRIT OF CERTIORARI TO THE COURT OF CLAIMS BRIEF FOR THE UNITED STATES BEY SR Soe eee pei - INDEX IE OE ois ioscan Gass ediotsar ec deoreeineienarmainw inate SE RUIN cs care spe eects rah pi cocmet ns vicen eatee inc ek arenes aah ean ieanin adores IRI SONI oo oases resis ghee snr een ans aaa ND TRUE oo is ci pce screech aa ences ect eear ee eeenanne IN a tai sce ccs or rtd ak Sees eh ea ice PII cok ctr m car ues tet calm ds eesse ee neem acide et aticeodeaiaa apatenapmen as aia Conclusion CITATIONS Cases: Brooks-Scanion Corp. v. United States, 265 U. S. 106___-__- Consolidated Rubber Tire Co. vy. Diamond Rubber Co., 226 PG. GG, GG: Bee SU Clin ncn mecvcncousenssinoseene Crosby Steam Gage & Valve Co. v. Consolidated Safety TOG Th Bee Ue ee Ren eke sence cutenensee Cente Fi Bee Os 0. Bowe nsccnneneneaenma Dallas Brass & Copper Co. vy. Faries Mfg. Co., 1 F. (2d) Farmers’ Handy Wagon Co. v. Beaver Silo & Bor Mfg. ei eee es aa ew ecestn ts be po aec t meetnaia alae eee Goodrich Company, B. F., v. Consolidated Rubber Tire Co., ies trees ean ae een naa Mn einiede Ignition Company, K. W., y. Tamco Electric Motor Co., 283 II Siete beacon excise viouesss tnesmercilcensgspideacgy tavdigttbeebdee daenidhebsapeetianiahitas dada Illinois Central R. R. Co. v. Turrill, 110 U. S. 301_----_-__ Imperial Machine & Foundry Corp. vy. United States, 69 C. INR, AP iv erispssinion’otdicp sara ins sien oan dls ap eccenidnadadabeneai cen inaaelde adaware eee Liggett & Myers v. United States, 274 U. S. 215_-.-______ Merrell Soule Co. vy. Powdered Milk Co. of America, 7 F. SR I sie ces nu es kavvalgnt ur ccas ces ecaceeiah tates cccencantsasrealis sia eaaictaehsesckeai Metallic Rubber Tire Co. v. Hartford Rubber Works Co., Se es, Greet cake canta ee eae aaa National Tube Co. v. Mark, 10 F. (2d) 4380 Pheios v. United Giates, 274 U. By Sb... son... PR vy. TOO, TT TP. Cs vein t sense OOe FT eT Oe Rind eae eae ee Seaboard Air Line Ry. v. United States, 261 U. 8S. 299____ Tilghman v. Proctor, 125 U. S. 136 36214—31 (1) a ° a AVIA 37 a PS Ea re eae ——s ot Break A a at ee % ry Re PI ee eh tae OBO i ag UME AN Ss UDR II Statute: Page Act of July 1, 1918, c. 114, 40 Stat. 704, 705, amending the act of June 25, 1910, c. 423, 36 Stat. 851 (U.S. C., title a Si i ee tei nce asangidaeeddacibcadeelaabpaiminnaninelinide 8-9 Miscellaneous: Walker, Patents, 6th Ed., sec. 607 6 Authe Supreme Court of the United States OctToBER TERM, 1930 No. 103 Harry F. WAITE, PETITIONER v. THE UNITED STATES ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF CLAIMS BRIEF FOR THE UNITED STATES OPINION BELOW The opinion of the Court of Claims (R. 22) hold- ing that the petitioner’s patent had been infringed is reported in 63 C, Cls. 438. The court’s memo- randum as to damages (R. 31) is reported in 69 C. Cls. 153, but its decision refusing to allow interest (R. 33) is not yet reported. JURISDICTION The judgment sought to be reviewed was entered on February 10, 1930. (R. 33.) A motion for new trial was overruled on April 7, 1930. (R. 30.) (1) IE PRET NEL DMI IIE STA APE ORR ES oe ad Wh tah 3 a 3 AMA DIAL Oia he ere he 25h tas sts caren Seater te i 9 2 ‘ The petition for certiorari was filed on Mav 7, 1930 (R. 33), and the writ was granted October 13, 1930 (R.35). The jurisdiction of this Court is invoked under Sectfon 3 (b) of the Act of February 13, 1925. QUESTION PRESENTED In determining ‘reasonable and entire compensa- tion’’ recoverable under the Act of July 1, 1918, e. 114, 40 Stat. 704, by a patent owner against the United States for the use or manufacture by or for the United States of his invention, must interest be added to an allowance of profits which the patent owner would have received if the infringing devices had been purchased from him ? STATUTE INVOLVED The Act of July 1, 1918, ec. 114, 40 Stat. 704, 705, is set forth in the Appendix, infra, pp. 8-9. STATEMENT In 1920 letters patent were issued to the peti- tioner upon a transformer for the production of suitable currents for the operation gf a Coolidge X-ray tube. (R. 10, 29.) In ser Bnd 1918 the petitioner’s company had sold to the United States transformers of two different grades on which it had realized an average profit of $59.42 per trans- former. (R. 29, 30.) In 1921 and 1922 the Wap- pler Electric Company, at the request of the United States, manufactured and sold 101 similar trans- formers to the Government. (R. 28.) In a de- cision rendered May 2, 1927, the Court of Claims 3 held that the use of these transformers by the United States was an infringement of the peti- tioner’s patents. (R. 22.) After further submis- sion of the case as to the amount recoverable, the Court of Claims gave judgment for the petitioner for $6,001.42, representing the estimated profits of $59.42 per transformer lost by the petitioner be- cause of the use by the United States of the Wap- pler transformers. (R. 32.) On February 25, 1930, the plaintiff filed a motion for a new trial contending that the court erred in not allowing interest from the date of the commencement of the use. (R. 33.) On April 7, 1930, the Court of Claims entered an order overruling the motion and refusing to award interest. (R. 33.) The findings of fact do not show the existence of a fixed royalty or the determination of a reasonable royalty. There was a finding as to the actual profit realized by the contractor (R. 29), but this was not used as the measure of plaintiff’s loss (R. 32). The court was of the opinion that the plain- tiff would have been in a position to make sales to the Government if the infringement had not taken place (R. 32), and it accordingly based its judg- ment on an estimate of the profits lost by the plain- tiff as a result of the infringement (R. 30). ARGUMENT The petitioner’s claim for interest is predicated on the theory that by reason of the Act of July 1, 1918, ec. 114, 40 Stat. 704, 705 (infra, pp. 8-9), the aS as as TH SEI GS RITE URE GMD Raat SNS me 8 MEI PC a acne eer eee eae BP siete * fly Saryhins pitad RAB 4 infringement of his patent rights amounted to an appropriation of private property for public use as in eminent domain (Crozier v. Krupp, 224 U.S. 290) and that under various decisions of this Court, of which Seaboard Air Line Ry. v. United States, 261 U.S. 299, is a typical example, just compensa- tion includes interest on the value of the property from the date of the taking. In its memorandum acquiescing in the petition for certiorari, the Government said (p. 3): If the phrase ‘‘reasonable and entire com- pensation,’’ as used in the Act of 1918, has the same meaning as the phrase ‘‘just com- pensation,’’ as used in the Fifth Amendment of the Constitution, it would seem that the court should have allowed interest. This statement was based on the prior decisions of this Court holding that interest was recover- able as part of the compensation required by the Fifth Amendment. The applicability of this rule to cases involving infringement of patent rights by the United States has not been passed upon by this Court and it may well be that in patent cases interest should be al- lowed or disallowed in accordance with the rules governing recovery between private litigants. In order that the plaintiff be fully compensated, it is necessary that he recover at least the equivalent of what would be recoverable at law or in equity in a suit for infringement pursuant to R. S. 4921 or R. S. 4919. | - ov In equity recovery may be had of the infringer’s profits. Such profits are not liquidated until the court, or a master appointed by the court, has com- puted them. Illinois Central R. R. Co. v. Turrill, 110 U. 8. 301; Tilghman v. Proctor, 125 U.S. 136; Crosby Steam Gage & Value Co. Vv. Consolidated Safety Valve Co., 141 U. 8, 441. Accordingly, in- terest is not added unless it appears that the in- fringement was deliberate and wanton. See Me- tallic Rubber Tire Co. v. Hartford Rubber Works | Co., 275 Ked. 315 (C. C. A. 2d). Damages for infringement, recoverable either at law or in equity, are compensatory and have no re- lation to the defendant’s gain. If such damages are computed on the basis of a fixed royalty for the use of the invention, interest from the date when the royalty was due is recoverable. K. W. Ignition Company v. Temco Electric Motor Co., 283 Fed. 873 (C. C. A. 6th). Interest is also included as a part of the damages, either as a matter of right or in the discretion of the court when damages are computed on the basis of a reasonable royalty. B. F. Goodrich Company v. Consolidated Rubber Tire Co., 251 Fed. 617 (C. C. A. 7th); Consolidated Rubber Tire Co. v. Dia mond Rubber Co., 226 Fed. 455 (S. D. N. Y.), aff’d, 232 Fed. 475 (C. C. A. 2d) ; Merrell Soule Co. v. Powdered Milk Co. of America, T F. (2d) 297 (C. C. A. 2d); National Tube Co. Vv. Mark, 10 F. (2d) 430 (C. C. A. 6th). . FS A Pa eee Cis eg FSS i hag ——— v2 my TSAR AAP: 5 Beams! Senn ae seny — ; Eerste per cece temp yee B tins Sora. 6 In the case at bar recovery was measured by ‘‘the sum of the profits which the patentee would have derived from the sales which tlie infringer’s course prevented the patentee from making.’’ JWalker, Patents, 6th Ed., Sec. 607; Dallas Brass & Copper Co.v. Faries Mfg. Co., 1 F. (2d) 930 (C. C. A. Tth) ; see Philp vy. Nock, 17 Wall. 460; Farmers’ Handy Wagon Co.v. Beaver Silo & Bow Mfg. Co., 259 Fed. 270, 271 (C. C. A. 7th). We have found but two cases involving the com- putation of damages on this basis in which the ques- tion of interest was raised. In Rose y. [irsh, 94 Fed. 177 (C. C. A. 38d), and in Imperial Machine & Foundry Corp. v. United States, 69 C. Cls. 667,.the rule in Tilghman v. Proctor, supra, was followed in computing damages upon the basis of profits lost to the owner of the patent, and interest was allowed only from the date of the filing of the master’s re- port. There was no discussion of the question in either of these cases. Profits lost by the patent owner are in quite a different category from profits gained by the infringer. Tilghman v. Proctor, supra, merely holds that the infringer’s profits are unliquidated until judicially determined, and ac- cordingly interest runs only from the date of the master’s report. Where there is a recovery of damages on the basis of profits lost by the owner of the patent, there would seem to be quite as much reason for an allowance of interest as when such damages are computed upon the basis of an esti- mated reasonable royalty. There is, indeed, less 7 certainty in determining reasonable royalties than in computing lost profits, when, as in this case, com- putation is based upon actual costs and established selling prices of similar machines. Accordingly, we believe that Rose v. Hirsh, supra, and Imperial Machine & Foundry Corp. v. United States, supra, ave of doubtful authority, and that in this case interest should have been allowed upon profits lost to the patent owner. Sucha result will accord with the decisions of this Court in Seaboard Air Line Ry. v. United States, 261 U. S, 299, Brooks-Scanlon Corp. v. United States, 265 U. S. 106, Liggett & Myers v. United States, 274 U.S. 215, and Phelps vy, United States, 274 U.S. 341. CONCLUSION We believe that the court below erred in failing to allow interest. Respectfully submitted. /THomaS D. THACHER, Solicitor General. J CHaRLEs B. Rvae, Assistant Attorney Geyeral. * H. Brian froeate, © Attorney. JANUARY, 1931. Qreeeeeree seceeneenersnecraesererononasomgsemeeen , Pe III ET SS MAST NT il “| APPENDIX The Act of July 1, 1918, ¢. 114, 40 Stat. 704, 705, amending the Act of June 25, 1910, ¢. 423, 36 Stat. 851 (U.S. C., Title 35, See. 68) provides in part as follows: ' The Act entitled ‘‘An Act to provide ad- ditional 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 manufactured by or for the United States without license of the owner thereof or lawful right to use or manufacture the same, such owner’s remedy shall be by suit against the United States in the Court of Clatins for the recovery of his reasonable and entire compensation for such use and manufacture: Provided, however, That said Court of Claims shall not entertain a suit or award compensation under the pro- visions of this Act where the claim for com- pensation I&based on the use or manufacture by or for the United States or 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 end all de- fenses, general or special, that might be pleaded by a defendant in an action for in- fringement as set forth in Titie Sixty of the (8) 9 Revised Statutes, or otherwise: And pro- vided 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 Government of the United States, or the assignee of any such patentee ; nor shall this Act apply to any device dis- covered or invented by such employee during the time of his employment or service.”’ we U.S. GOVERNMENT PRINTING OFFICE: 193! Qpiteseri ee PARED EUSA Str tan eee atesane a mms --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386007_0470%3A5. Public record. Not legal advice.