Case ID: us-ct-cl_39/html/0105-01.html
Source: Caselaw Access Project
Author: {"author": "Nott, Ch. J.,", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

JOSEPH L. HARLEY v. THE UNITED STATES.
    [No. 14421.
    Decided December 21, 1903.]
    
      On the Proofs.
    
    The Secretary of the Treasury determines that certain securities shall not be printed in the Bureau of Engraving and Printing until reliable registers are attached to the presses. The claimant having an invention for a register, the Chief of the Bureau takes him with it to the Secretary of the Treasury, who approves and orders one made and tested. No agreement is made in regard to royalty. On the part' of the claimant it is supposed that he will be entitled to compensation and paid; on the part of the Secretary and Chief of the Bureau that the claimant, being an employee of the Treasury Department, will neither expect nor demand remuneration. His register is patented and used on a great number of plate printing presses for several years. During that period he makes no objection and does not give notice that he will demand royalty or remuneration.
    I.In its business of engraving bank bills the Government is a manufacturer and entitled to no more consideration than any other engraver and printer, but is entitled to no less.
    II.Of implied contracts there are two kinds: First, where a man takes property and the owner waives the tort and sues in assumpsit, i. e., where there is no meeting of minds; second, where the parties meet, and their meeting results in an unexpressed agreement.
    III. Where an inventor says, “Tom may use my device, paying me a reasonable royalty,” and the officers of the Government say nothing, but order the device adopted, a contract will be implied. But where the inventor, being an employee of the Government, says nothing, and allows the officers of the Government to suppose that the invention may be used without royalty, and it is so used for a number of years, he can not subsequently set up an implied contract.
    IV. A man can not have a contract thrust upon him against his will. The Government has no legal right to use an invention, but it has the right to print and engrave notes without using it, i. e., the right to know that a royalty will be exacted, and, to save that expense by using registers of another device.
    
      
      The Reporters’ statement of the case:
    The following are the facts of the case as found by the court:
    I. Letters patent No. 100399, dated March 1, 1870, were, by the Government of the United States, duly granted and issued to the claimant, Joseph L. Harley, securing to him a monopoly, pursuant to the laws of the United States, in the invention described in said letters patent.
    II. In November, 1869, the Secretary of the Treasury determined that certain valuable securities should not be printed in the Bureau of Engraving and Printing until proper and reliable registers should be attached to the presses. While the Chief of the Bureau was endeavoring to devise and procure a trustworthy form of register, the claimant brought to him the drawings of a device which he had invented, being substantially the device described, in the foregoing letters patent. The Chief of the Bureau ordered a register to be immediately made after the claimant’s device. At the time of giving-such order he understood that the device was the claimant’s invention.
    The register so ordered being completed, and tried and found satisfactory, the Chief of the Bureau proposed to take the claimant to the Secretary of the Treasury that he might explain it to him. The claimant thereupon objected that the invention was not yet patented, and that he wished, before exhibiting it, to obtain a patent for his individual protection. The Chief of the Bureau replied, “Certainly; I will see that you are protected.” The claimant, then tacitly consenting, was taken before the Secretary, and explained to him the operation of the register, and the Secretary was at the same time'informed that this was the register which the claimant had invented. The Secretary approved the form of register, and directed that such registers be made and attached to the presses in the Bureau.
    Before such registers were manufactured the claimant remonstrated to the effect that he wished first to secure a patent. The Chief of the Bureau replied that he would see the claimant protected and would get him a patent attorney who would explain the law to him. This the Chief of the Bureau did, and the attorney so selected proceeded to procure tbe patent before set forth, the claimant, not the defendants, paying him and the costs and expenses thereof. The attorney so selected at the same time informed the claimant that the manufacture and use of registers in the Bureau would not interfere with or prevent the procurement of the patent.
    After being so advised, the claimant raised no further objection to the registers being manufactured and used, and tacitly acquiesced in the same.
    There was no agreement or understanding between the parties in regard to royalty or the payment of remuneration for the use of the claimant’s invention in the Government’s printing and engraving other than such as may be inferred from the preceding conversations. On the part of the claimant it was supposed and understood that he would be entitled to compensation, and that it would be allowed and paid by the Secretary of the Treasury. But on the part of the Secretary and Chief of the Bureau it was supposed and understood that the claimant, being an employee of the Treasury Department, would neither expect nor demand remuneration.
    III. That ever since the issuance of said letters patent the defendant has constructed, and has used continuously, from the date of said letters patent, to wit, March 1, 1870, upon and in connection with plate printing presses used by the defendant in the Bureau of Engraving and Printing and in the Treasury building, the device aforesaid, so patented to the claimant, for the purpose of registering the number of impressions made bjT the various plate printing presses, both hand and steam, employed and used by the defendant in the said Bureau of Engraving and Printing and in the Treasury Department building.
    IV. The claimant at the time of the making of his invention before described was assistant master machinist in the Bureau of Engraving and Printing. Ho was never assigned to the duty of making inventions, and it was not a part of his duty to do so; and the invention before described was made within his own time and exclusively at his own cost, and was a completed invention properly and sufficiently set forth in drawings when first brought to the Chief of the Bureau, as set forth in finding- ii.
    
      Y. The defendants were in the undisturbed use of the claimant’s invention from July 24, 1878, to July 24, 1884, by attaching such registers to a great number of their presses. During that period the claimant made no objection to such use of his invention, and failed to give notice to the Secretary of the Treasury or the Chief of the Bureau of Engraving* and Printing that he would demand royalty or remuneration therefor.
    VI. The average number of presses with claimant’s device used by the defendants between July 24, 1878, and July 24, 1884, was 200 per day, covering 1,802 working days.
    
      Mr. A. A. IloehUng, jr., and Mr. William W. Dodge for the claimant:
    The defendant relies strong^ upon the case of Gill v. The' United States (160 U. S., 426; 16 Sup. Ct. Rep., 322).
    It is well, before reviewing that decision in detail, or the authorities cited in its support, to ascertain precisely what the question was that the Supreme Court had before it, and in fact decided. This is made clear in the opening of the opinion, where the court says:
    “This case raises the question, which has been several times ¿presented to this court, whether an employee, paid by salary or wages, who devises an improved method of doing his work, using the property or labor of his employer to put his invention into practical form, and assenting to the use of such improvements by his employer, may, by taking out a patent upon such invention, recover a royalty or other compensation for such use.
    • “In a series of cases, to which fuller reference will be made hereafter, we have held that this could not be done.
    “The principle is really an application.or outgrowth of the law of estoppel in pais, by which a person looking on and assenting to that which he has the power to prevent is held to be precluded ever afterwards from maintaining an action for damages.”
    Such being the question which the court was to determine, it naturally took up those cases illustrating or bearing upon the doctrine of estoppel in pais. It cites first Pennock v. Dialogue (2 Peters, 1, 16) to the effect that—
    “This inchoate light, thus once gone, can not afterwards be resumed at his pleasure, for where gifts are once made to the public in this way, they become absolute.”
    
      The Pennock-Dialogue case was decided under the act of 1793, section 1 of which required the inventor to allege that his invention was ■ ‘‘not known or used before the application. ” It was to dedication to the public through public use prior to application that the quoted language referred. Section 7 of the act of 1839 provided for two years’ public use before application, and such has been the law ever since.
    The case of Shaw v. Cooper, next cited in the decision of the Supreme Court, was governed by the same act of 1793, section 1, the holding being simply that under this provision of the statute, “no matter bjr what means an invention may be communicated to the public before a patent is obtained, any acquiescence in the public use hj1- the inventor will be an abandonment of his right.”
    So in the case of Mg Clury v. Kingsland, next cited in the Gill case, public use occurred, with the knowledge and under the direction of the inventor, prior to filing his application for patent, which patent was granted subject to the terms of section 1 of the act of 1793.
    In the case of Solomons v. United States, next referred to in the Gill decision, it appears that the inventor and subsequent patentee had been particularly assigned to the duty. of devising the stamp which was subsequently used and patented, and, further, that “before the final adoption of the stamp he said that the design was his own, but he should make no charge to the Government therefor,” etc. ,
    In the case of lane c& Bodley Co. v. Locke, next cited in the Gill decision, it appears that a long series of experiments was carried on in the employer’s factory, with his tools and materials, running through 1871 and 1872, at which latter time the patented invention was produced. In 1871 Locke, the inventor, left the works of Lane & Bodley, and on May 27, 1871, made application for patent,- which issued February 15, 1876. Lane & Bodley do not appear to have known of the application until letters patent issued. The invention went into use in their factory in 1872, immediately upon its adoption, with the full knowledge of Locke. Referring to this Locke case in the Gill decision, the Supreme Court says:
    “It was held that the patentee, having made no claim for remuneration for the use of the patent, saying that he did not desire to disturb Ms friendly relations with the firm, might be presumed to have recognized an obligation to permit them to use the invention.”
    
      McAleer v. United States, next cited in the Gill case, was based upon an express license, and merely held that it could not be varied by parol.
    
      Keyes v. Mining Go., next cited, held that there was an implied license arising out of the use of the improvement without payment of royalties during the continuance of the inventor’s employment (about ten years); and also a license to use the invention upon the same terms and royalties fixed for other parties from the time the patentee left the defendant’s employment. In the Keyes case it appears that the inventors were employees; they put the invention into use in their employer’s works; obtained patents after leaving- such employment; waited until the patent had but twenty-nine days to run, and then applied for an inj unction to restrain the use of the patented device. The court merely held that the pat-entees were guilty of such laches as would disentitle them to a preliminary injunction; and that, as the patent expired before the return day, which would render impossible the granting of an injunction by the final decree, it was clearly within the discretion of the Circuit Court to dismiss the bill for want of equity and because the proper remedy was at law. The delay was in no manner explained.
    Throughout the decision in the Gill case reference is made to the fact that use was made of the property and labor of the Government in preparing patterns and working drawings and in constructing his working machines.
    The court also says, as to this use of the labor and materials of the Government:
    “In this connection, too, it should be borne in mind that the fact, upon which so much stress has been laid by both sides, that the patentee made use of the property and labor of Government in putting his conceptions into practical shape, is important only as furnishing an item of evidence tending to show that the patentee consented to and encouraged the Government to make use of his deyices. The ultimate fact to be proved is the estoppel arising from the consent given by the patentee to the use of his inventions by the Government without demand for compensation.”
    
      In the Gill case there was no pretense that the Government was given to understand that the invention was or would be claimed as the property of the inventor; nor was any notice given or suggestion made that a patent would be sought; nor did the inventor bring his invention before any Government agent as the subject of purchase or sale, or use under royalty.
    We maintain that the Chief of the Bureau in thus ordering the device put to use with this direct and explicit knowledge did, by implication of law, enter into a contract or agreement with the inventor to use the invention subject to the rights which the inventor.had thus clearly asserted, and which the Chief of the Bureau recognized in sending for attorneys to secure the Harley patent. We maintain also that in so doing the Chief of the Bureau represented the Secretary of the Treasury and through him the defendant.
    Having, as we believe, clearly shown that there was an implied contract on the part of the Government, through its competent and authorized agents, to compensate Mr. Harley for the use of his invention; having shown that the Gill case does not present at all the same facts, but that the distinctions noted bring the present case under the ruling of this honorable court in the cases of McKeever (14 C. Cls. R., 396; affirmed,-18 C. Cls R., 757; 14 Brodix, 414-437), and United States v. Palmer (128 U. S., 262, 270-272) and within the rule announced by the Supreme Court of the United States in the cases of James v. Campbell (104 U. S., 356) and Solomons v. United States (137 U. S., 342); having shown that the invention was novel, and that the claims are not met in the prior art; that the invention has been used, and is still being used, by the Government; that it is of great value, and that no satisfactory substitute has ever been found therefor, we confidently ask a judgment in favor of the claimant.
    From use of the invention by the Government, an obligation on the part of the Government to pay arises, notwithstanding the inventor be at the time in Government employ. (.Solomons v. United States, 137 U. S., 342; 11 Sup. Ct. Rep., 88, at p. 89; United States v. McKeever, 14 Brodix, 414, at pp. 420-422, affirming 14 C. Cls. R., 396.)
    The Government stands upon the same footing as to infringement of patents as does an individual. (McKeever case, 
      14 C. Cls. R., 396, affirmed by Sup. Ct. of U. S., 14 Brodix, 414-437; James v. Campbell, 104 U. S., 356; Solomons v. United States, 137 U. S., 342; 11 Sup. Ct. Rep., 88, at p. 89; United States v. Palmer, 128 U. S., 262, atp. 272; 19 Brodix, 23, at pp. 29-30.)
    Employers are not entitled to the inventions of their employees unless special agreement be made to that effect. (Ilagpgood v. Hewitt, 119 ü. S., 226; 7 Sup. Ct. Rep., 193.)
    The fact (if it be a fact) that defendant incurred expense in the practical development of complainant’s patented invention does not operate to give defendant a license under the patent. (Shcm.v. Colwell Lead Co., 20 Blatehf., 417; 11 Fed. Rep., 711; PalzeTlet al. v. Dueber Watch Mfg. Co., 149 U. S., 315; Hajpgood v. Hewitt, 119 U. S., 323; 7 Sup. Ct. Rep., 193.
    A licensee may not renounce his license and stand as a naked infringer in the absence of such provision in the license or without consent of the licensor. (St. Pawl Plow Works v. Starling, 140 U. S., 194.)
    
      Mr. Charles C. Bi/nney (with whom was Mr. Assistant Attorney- General Pradt) for the defendants.
   Nott, Ch. J.,

delivered the opinion of the court:

This case resembles QilVs (25 C. Cls. R., 415) in that “ the claimant was a simple mechanic, on daily wages, holding a subordinate position, charged with no responsibilhy save that of performing honestly his daily task, and his conduct was fair, honest, and. irreproachable.” It also resembles the Gill case in that he was the inventor of an exceedingly valuable device, which the' Government has used many years in its business of engraving and printing; that it was not a part of his duty to make inventions; that his device was made and invented and perfected within his own time and exclusively at his own cost; and that while it has been of very great value to the Government he has never received for its use so much as one dollar.

At this point resemblances cease and differences begin: In Gill’s case the claimant went to the officers of the Government with his invention and proffered it. In* this case the officers of the Government came to the claimant; the superintendent of the Bureau of Engraving and Printing carried him, manifestly reluctant to go, before the Secretary of the Treasury, and the Secretary of the Treasury and the superintendent took the invention and attached it to the presses in the defendants’ shops without a word of solicitation upon his part. In Gill’s case the officers of the Government did not know that the claimant intended to patent his device, and eight of the nine machines used in the arsenal were in operation before he so much as applied for a patent. In this case the claimant demurred to the use of his device by the Government, and told the superintendent that he wished to patent it first; and the superintendent volunteered to supply him with a patent lawyer; and the patent lawyer which he so supplied assured the claimant that the use of the invention by the' Government would not interfere with his rights as a patentee; and the superintendent knew that the invention would be patented and was being patented as fully and completely as the claimant himself.

In the Gill case it was said that the device when brought to the attention of the officers was simply “the committal of a thought to paper,” and that its complicated parts were such that no one could say the device was valuable or that it would not require years of modifying and perfecting to make its value apparent, and that the Government bore the expense of bringing the invention to the test of practical operation. In this case the device was exceedingly simple; it was perfectly evident that it would be operative; the cost to the Government of making a register was too trivial, both in time and money, to form1 a consideration, and was done voluntarily by the superintendent and not at the solicitation of the claimant.

But at this point unhappily the resemblances between the two cases begin again. The claimant did not speak out and say either to the Secretary or to the superintendent, “If the Government used my device I must be paid a royalty.” It is painfully apparent that the poor mechanic, in the presence of such powerful employers, feared to speak. He rested not on what was said by the Secretary or the superintendent or himself, but on a vague hope that if his register worked well the Secretaiy of the Treasury would allow him something. The work of introducing bis device into the press room went on for seventy-three months and until the Bureau had attached and used registers of his device amounting- to an aggregate of 14,382. Then the claimant spoke.

In its business of engraving bank bills and bonds the Government is a manufacturer and entitled to no more consideration than any other engraver and printer. But it is entitled to no less. If this were an action between the claimant and an individual manufacturer two questions would arise: First. Was there a contract, express or implied, between the parties? Second. Did the employee so mislead the employer that as against his legal claim an equitable estoppel should preclude him from asserting his legal rights ?

Of what are called, generally, “implied contracts” there are two kinds. The first is where a man has tortiously taken property and the owner waives the tort and sues in assumpsit. In such cases there is no meeting of .the minds. It would be absurd to hold by legal fiction that their minds met when the defendant unlawfulty and against the owner’s will took his property or when, without the owner’s knowledge, he sold it. Such cases rest upon the principle that if the owner chooses to waive a tort and sue for the money derived from his property which is in the defendant’s bands the defendant can not set up his own unlawful conduct as a defense. The second kind of implied contracts is where the parties met and their meeting resulted in a wordless agreement.

In the leading case of McKeever (14 C. Cls. R.., 396) the War Department appointed a board of officers to consider the militaiy devices which inventors were presenting for sale. The board recommended the claimant’s device as one which should be adopted and used in the Army. The War Department approved the recommendation, and the Ordnance Bureau proceeded to manufacture. Here was an agreement in everything but words — an agreement on one side that the Government might use the invention, and on the other that it would pay for it what it might be reasonably worth.

If, in the case now before us, the inventor had said to the Secretary of the Treasury, “You may use my device, paying, me a reasonable royalty,” and the Secretary had said nothing, but had ordered the device adopted, a jury would be authorized to imply from the circumstances the words of acquiescence and agreement which the Secretary did not speak, and a contract would be implied. But, as before stated, the claimant did not speak, and the Secretary and superintendent remained under the illusion that the claimant did not intend to charge-the Government anything for the use of the invention in a bureau in which he was an employee. Clearly here was a case where there might have been a meeting of minds, and should have been a meeting of minds, but where there was none. The claimant said nothing about royalty; he heard the order given for the manufacture of registers after his design, and still he said not a word concerning remuneration.

It is a well-settled rule of law that a man can not have a contract thrust upon him against his will. As was said in the case of Boston v. District of Columbia, (19 C. Cls. R., 31):

“An implied contract does not arise from a merely voluntary service. If a man makes a gift inter vimos to-day he can not turn round and sue for its value to-morrow. So, if one performs an act beneficial both to himself and another, he can not make the other contribute his quota of the cost without showing agreement or ratification. It is true that a wrongdoer may be held in contract though he made none; and it is true that one who receives a benefit or accepts a service may be estopped from sajnng that he did not agree to pay for it; but, nevertheless, it is a general principle that no man can be forced into a contract against his will. ”

The closest analogy to the present case is that of gifts im.ter vimos. A man can not make presents to another year after year and then sue him for their value on an implied contract. It is true that the recipient gave no consideration; it may be true that no express words were spoken which indicated that the gifts were gifts; but if the giver allowed the other to believe that they were gifts and he accepted them in that belief, and there was no meeting of minds between them, expressed or unexpressed, looking toward a contract, the law will not allow a contract for their value to be implied.

In this case the transactions were between employer and employee, which comes near to being inter vivos, and the employer accepted and continued to accept in the belief that the implied license to use was to be without consideration— was to be a gift growing out of the peculiar relations of the parties — and this went on year after year. The defendants bad no legal right to use the invention, but they had the right to print and engrave without using it. That is to say, if they had known that a royalty would be exacted they had the right to save themselves that expense and to use registers of' another device.

The judgment of the court is that the petition be dismissed.

Howry, J., did not sit in this case and took no part in the decision.