#### THE FEDERAL MANUFACTURING AND PRINTING COMPANY v. THE UNITED STATES.

[No. 18930.

Decided October 28, 1907.]

*On the Proofs.*

The Bureau of Engraving and Printing contracts for and uses licenses for patented steam plate-printing presses having automatic wipers which are subsequently patented. Later it uses twelve additional presses after the automatic wiper has been *480patented. The royalty agreed upon is $1 for every 1,000 perfect impressions. The contracts, or licenses, are impliedly limited to eighteen specific presses. After a time the Bureau discontinues the use of these patented presses. Subsequently it has twenty-five presses built and uses them without licenses and refuses to pay a royalty. The claimant brings suit on the contracts, alleging that they extend to these subsequently manufactured twenty-five presses.

I. Where a contract granting a license to make and use a patented printing press is for one press, and a second contract is for five presses, and a third for six, and a fourth for six, the contracts are limited to these eighteen presses, and do not preclude the defendants, if they build and use additional presses, from contesting the validity of the patent

II. The assignment of a patent under the Revised Statutes, section 4898, carries to the assignee the right to receive royalties under licenses previously granted by the assignor, and the Government is liable to the assignee for such royalties, notwithstanding the provisions of section 3737.

III.When the patentee represents to the other contracting party that an automatic wiper unpatented is a valuable part of the press, and he subsequently patents it and enters into additional similar contracts with the same party, the fact of his patenting the wiper will not change the effect and intent of the contracts. The wiper will be regarded as included in the later licenses as a substantial part of a press.

■ IV. A patent must be held invalid under Revised Statutes, section 4S8(>, if there has been sale and public use of the article for more than two years prior to the filing of an application for a patent.

V. The experimental stage of an invention ceases, and the two years within which an application must be filed begins to run, when the inventor grants a license, and represents, concerning an unpatented part, an automatic wiper, that the press has been in successful operation and is “ *so perfectly adapted to the icorlc that every part of the plate is wiped equally tnj such a motion as to cross all lines.”*

VI. Allowing the purchaser of an unpatented device a period of use to determine whether it will satisfactorily do his work must be deemed the user’s trial and not the inventor’s. It can not be regarded as extending to the experimental stage of the invention.

*The*Reporters’ statement of the case:

The following are the facts of the case as found by the court:

*481I. The Federal Manufacturing and Printing Company, the claimant herein, is, and at all times since about March 24, 1885, has been, a corporation created, organized, and existing under the laws of the State of New York.

II. Letters patent of the United States No. 180490 were granted and issued to James Milligan August 1, 1876, and also letters patent of the United States No. 193097 were granted and issued to said Milligan July 17, 1877. Both of said letters patent were for improvements in steam plate-printing presses, but did not show a mechanical wiper.

III. On October 12,1877, said Milligan assigned and transferred an undivided one-third interest in both said letters patent to Charles F. Steel, which by assignment was increased to one-half interest on or about April 9, 1878.

IY. On April 19, 1877, and again on May 12, 1877, said James Milligan (then a plate printer in the employ of the American Bank Note Company, in New York) and said Charles F. Steel wrote to the Secretary of the Treasury, asking permission to make a test before him of a.steam plate-printing press, invented by the said Milligan, with a view to its use in the Bureau of Engraving and Printing. In their letter of May 12, 1877, among other things, they stated that the press had been “ in successful operation by private parties for upwards of a year,” and that—

“ The operation of plate printing is, first, to ink the plate; second, to remove the ink from off the surface by a cloth; third, to polish the plate of the smear of ink left on it by the cloth — this last, namely, polishing, must be done by hand; 'fourth, to place the sheet to be printed on the plate; ‘ fifth, to pass the plate with the paper under the impression roller; and, sixth, to take the printed sheet from the plate.

“ There is provision made on this press to adjust four plates. They are carried by power on a rectangular bed. On one side the ink is rolled into the plate while moving; on the next side the ink is wiped from the surface; at the following corner the printer stands ready to polish the plate as soon as it leaves the wiper; at the next corner the first assistant places .the paper on the plate; the plate then passes under the impression roller, the sheet of paper is printed, and at the last corner the sheet is removed from the plate by the second assistant; .the four plates following each other, one *482being inked, the next being wiped, the next being polished, and the fourth receiving the impression, all at the same time.

“ The manner of performing the three parts of the operation done by the machine is very similar to that of doing the same by hand, but far more perfect than can possibly be expected from hand, as inking the plate the printer can not possibfy in common practice ink all parts of the plate equally, while the machine does ink the whole plate uniformly. This is the first essential to a good print.

' “ Then, in the wiping as in the inking it is apparent to an ’observer that a printer can not in practice Avipe over all parts of a platé with equal bearing. He will wipe one part heavier or more than another or in straight lines, and by so doing “ wipe out ” the ink and consequently produce an unevenness in the depth of color or a break in the print. But the machine is so perfectly adapted to the work that every part of the plate is wiped equally and by such a motion as to cross all lines, and this regular motion is continued throughout the whole operation, thus providing for the second essential ; and, lastly, the regular turning of the impression roller gives to the print a perfect evenness- of impression which is most frequently lost in hand printing from the fact that the printer generally pulls the handles of his press faster on some parts of the impression than on others, and also that when fresh at his work he will pull the press faster than when ho becomes wearied; and, again, scarcely any .two printers pull the press at the same sixeed or in the same manner, and thus at these three points, viz, inking, wiping, and impression, a great variation in work is the result in consequence of the different modes of action of hands.

“ But with the machine so constructed and operated as to be capable of doing this work this irregularity is obviated, for there is one regular manner of inking, wiping, and impression by steady power.”

The committee appointed to make a test of the press reported to the Secretary of the Treasury on or about June 9, 1877, that there were certain classes of work which might be satisfactorily printed upon the Milligan power press with economy and more rapidly than by hand presses. '

V. Subsequently, on January 9, 1878, the Qhief of the Bureau of Engraving and Printing wrote to Milligan and Steel as follows:

*483“ TREASURY DEPARTMENT,

“ Bureau oe Engraving and Printing,

■ “ *9th*January, *1878.*

“ Gentlemen : I have the authority of the Secretary of the Treasury for sending you, inclosed, a copy of the report of the committee who .witnessed the operation of your steam plate-printing press.

“.I am also authorized by him to permit the erection of your press in the Bureau, if you desire a more extended trial, * * * namely:

“ That the removal to the Bureau shall be made at the expense of the Bureau, and the removal from it at the end of the trial, if it be so moved; that the Bureau will pay the wages' of the plate printer whom you may select for the purpose of running it, and the feeders — the former at the rate of $5-a day when employed, the latter at the rate of $1.50.

“ The Bureau will also pay you a royalty of $1.00 for every perfect 1,000 sheets turned out, deducting the cost of the spoiled sheets,' which may be in excess of the allowance made for spoiled work on the hand-roller presses.

“ The Bureau will also furnish the power, ink, and other materials consumed in the printing, and will charge you with the repairs to the machine.

“ The Bureau to have the right to the use of the press, and this arrangement for the period of six months unless sooner satisfied with the trial. At the end of the trial the Department to have the right to buy the press, if satisfied with its working, at a price which may be agreed upon by its owners and the Department, and to buy at the same price as many additional presses as it may desire.

“ Very respectfully, yours,

“ Edw. McPherson,

“ *Chief of Bureau.*

“ Messrs. Steel and Milligan,

“ *No. 87 Liberty /St., New York.”*

YI. On January 12,1878, said Milligan and Steel accepted the terms above stated, and the United States commenced the use of said Milligan power plate-printing press, embodying patents Nos. 180490 and 193097, referred to in finding n on or about January 29,1878, and continued at intervals such use by way of trial to December 18,1878, and to pay the royalty of $1 per thousand perfect impressions printed thereon, • as agreed upon in finding v.

With said press there was a mechanical wiper constructed and operating, substantially as shown and described in letters *484patent Nos. 321743 and 3G0716, subsequently issued to said Milligan’s executrix, as set forth in finding xi, and for which no application had been made for said letters patent at the time of the making of said contract.

YII. On or about December 18, 1878, a committee of fire, of which Hon. Hiram P. Bell, M. C., a member of the Committee on Banking and Currency of the House of Representatives, was chairman, was appointed by the Secretary of the Treasury to further investigate, examine, and report on the merits of the “ Milligan press ” and the “ Neale-Appleton press.” The committee made an elaborate report upon these two presses, under date of February 26, 1879, and reported that several classes of printing might be done on the Milligan press in a satisfactory manner,' and with considerable saving to the Government, and that it might be to the advantage of the Government to procure a limited number of such presses to be used in printing such securities as they indicated might be printed thereon, and that the question of economy was settled beyond dispute by the statistics furnished by the Chief of the Bureau in faimr of the steam press, of which Milligan’s was one.

VIII. On or about March 28,1879, the Chief of the Bureau of Engraving and Printing notified said Milligan and Steel that with their consent the Milligan press theretofore used by way of trial would in future be operated as part of the machinery of the Bureau, to which they gave their consent. ■ They continued to use said Milligan press under said agreement set forth in finding v until March 27, 1887, when the Treasury Department purchased said single press with the right to use the same for the sum of $500 and the continuous royalty of $1 for each 1,000 perfect impressions printed thereon, which was paid to the owners of said patent.

Before said sale the owners of said press had paid for the repairs and improvements made thereon.

' IX. After the report of the committee mentioned in finding vn, and upon the recommendation of the Chief of the Bureau therefor, the Secretary of the Treasury, on February 18, 1880, entered into a contract with said Milligan and Steel whereby the United States acquired “ the right to construct *485or have constructed five of the plate-printing presses known as the *‘*Milligan press 5 in accordance with letters patent granted James Milligan on August 1, 1876, No. 180490, and on July 17, 1877, No. 193097, and the right to change and alter the same in accordance with any improvement in plate-printing presses for which letters patent are now or shall hereafter be granted James Milligan or Charles F. Steel or both of them, or in accordance with any improvement for which letters patent shall hereafter be issued which shall be applicable to these presses, in which the parties of the first part shall have any interest, and the right to use the five presses constructed under this contract without interference or hindrance of any kind -whatever with the work of plate printing in the Bureau of Engraving and Printing of the Treasury Department; ” and to indemnify and secure the United States from any and all claims or infringements growing out of the construction and use of said Milligan presses, said Milligan and Steel agreed to and did execute to the satisfaction of the Secretary of the Treasury a good and sufficient bond with two sureties in the sum of $20,000 in accordance with the terms of said contract, a copy of which is set forth in the petition as agreement “A,” and by reference thereto made a jiart hereof.

X. Said Milligan presses provided for in said agreement were constructed by the United States under and in accordance with said patents, and went into use in the Bureau of Engraving and Printing under said agreement between November 1 and December 16, 1880, and they were thereafter used by them in printing revenue stamps, the backs of the currency, and other securities, under the conditions of said contract. Said sum of $500 was paid for the right to make each of said presses as aforesaid, and a royalty of $1 for each 1,000 impressions thereafter printed thereon was paid as agreed, to and including June 30, 1889.

XI. On or about October 21, 1880, and later, on January 29, 1883, said James Milligan filed his separate applications for a patent for a device for wiping engraved plates in the process of plate printing, on which application patents were granted to Elizabeth B. Milligan, executrix of said James Milligan, he having in the meantime died, the first July 7, *4861886, No. 321743 (ajjplication January 29, 1883), and the second April 3, 1887, No. 360716 (application October 21, 1880), copies of which patents, in the order stated, are as follows. (Here insert in case of appeal.)

XII. Said James Milligan died Otober 6, 1884, leaving a .will by which, after providing for the payment of his debts, he devised and bequeathed all the rest of his estate to his wife, Elizabeth R. Milligan, for life,, then to his daughter, Ida C. Milligan, and appointed his said wife executrix of his said will, and on October 21, 1884, she was duty appointed and qualified as such executrix and entered upon the discharge of her duties.

. XIII. After the death of said Milligan, and after the 21st day of October, 1884, all the royalties on said six Milligan presses, used under said two contracts heretofore set out, were paid by the United States to William J. Gibson, as attorney for Elizabeth R. Milligan, executrix of James Mil-ligan, deceased, and Charles F. Steel, with full knowledge of the transfer by will of the interest of said J ames Milligan in said contracts to said Elizabeth R. Milligan and Ida C. Milligan.

XIV. On or about March 24, 1885, Elizabeth R. Milligan, as executrix of the will of James Milligan and legatee, and Ida C. Milligan, as next of kin and legatee of said James Milligan, deceased, and Charles F. Steel, assigned, trans-. ferred, and delivered to the claimant company the licenses or agreements with the defendants of January 9, 1878, and February 18, 1880, to make and use said Milligan presses under letters patent theretofore granted to said Milligan or to his executrix and the pending applications for patents in connection with said press and all royalties arising and accruing thereunder in consideration of the issuance and delivery to them of the entire capital stock of 4,000 shares of the claimant company, the said assignors agreeing that they would thereafter assign and transfer and set over to said claimant company any and all other contracts that .they should thereafter make with the defendants for the construction and use of said Milligan presses, which assignment is set forth in the amended petition herein as assignment *u*B,” and by reference thereto is made a part hereof.

*487At the time of said assignment the assignors aforesaid were the owners of all the capital stock of the claimant company. W. J. Gibson, esq., attorney for the owners of said patents, informed the Secretary of the Treasury of the foregoing assignment on or about June 14, 1886.

XY. On June 24, 1886, after the issue of letters patent No. 321743, dated July 7, 1885, for an improved wiping device, the Secretary of the Treasury entered into a contract with said Elizabeth K>. Milligan, as executrix and as widow and legatee of said James Milligan, deceased, Ida C. Milli-gan, legatee, and Charles F. Steel, as owners of the patent, whereby they agreed to cause to be constructed “ six of the . plate-printing presses known as the Milligan press in accordance with letters patent granted J ames Milligan, of Brooklyn, N. Y., No. 180490, dated August 1, 1876, and No. 193097, dated July 17, 1877, and to Elizabeth B. Milligan, executrix of said James Milligan, deceased, No. 321743, dated July 7, 1885,” said parties agreeing to convey to the United States “ the right to use the presses constructed under this contract upon Government work without interference or hindrance of any kind whatever and the right to change and alter said presses at any time in accordance with any improvement in plate-printing presses for which letters patent have been granted to the said James Milligan, now deceased, or to any of the parties of the first part, or in accordance with any improvement in plate-printing presses for which letters patent shall hereafter be issued in which the parties of the first part or their legal representatives shall have any interest ; ” for which the United States agreed to pay to them “ or their assigns the sum of five thousand five hundred dollars ($5,500) for the construction of six said Milligan presses and a royalty of five hundred dollars ($500) for each press on its delivery to and acceptance by the Chief of said Bureau, and a further royalty for the continuous use of said presses of one dollar ($1.00) for each one thousand (1,000) perfect impressions thereafter printed thereon,” a copy of which agreement is set forth in the petition as agreement “ C,” and by reference thereto is made a part hereof.

Said six Milligan presses were' constructed, delivered to, and accepted by the Chief of the Bureau of Engraving and *488Printing, and the royalty of $500 for each press was paid, and the further royalty for the use of said presses of $1 for each 1,000 perfect impressions printed thereon was paid to the owners of said patents to and including June 30,1889.

XYI. On November 22, 1886, Elizabeth B. Milligan, Ida C. Milligan, and Charles F. Steel, by an instrument in writing to carry out the agreement of March 24, 1885, referred to in finding xiv, assigned and transferred to the claimant herein the written agreement or license of June 24, 1886, a copy of which assignment of November 22,1886, is set forth in the amended petition herein as assignment “ D,” and by reference thereto is made a part hereof.

XVII. In March, 1881, Elizabeth II. Milligan, as execu-trirx of said Milligan, deceased, and individually, Ida C. Milligan and Charles F. Steel sold, assigned, and conveyed to the United States the said Milligan'press No. 1, being the first press erected in the Bureau of Engraving and Printing, and which was used by the United States by way of trial from January 30, 1818, to December 18, 1818, and thereafter regularly for the consideration of $500 and the payment of $1 royalty for every 1,000 perfect impressions printed thereon, and on conditions set forth in the agreement of June 24, 1886, referred to infinding xvi, a copy of which assignment or bill of sale therefor is set forth as Exhibits P 1, P 2, and P 3 in the amended petition herein, and by reference thereto is made a part hereof.

XVIII. On or about April 8,1881, said Elizabeth B. Milli-gan, Ida C. Milligan, and Charles F. Steel, in further compliance with their contract of March 24, 1885, referred to in finding xiv, sold, conveyed, and set over to the claimant herein said contract for the use of said press No. 1, together with all royalties earned on said press since January 1, 1881, and thereafter to be earned by the use of said press, a copy of which assignment is set forth as part of assignment “ Gr ” in the amended petition herein, and by reference thereto is made a part hereof.

The royalty of $1 for each 1,000 perfect impressions printed on said press was paid as agreed to and including June 30, 1889.

*489NIX. On'April 8, 1887, Elizabeth R. Milligan, as executrix and individually, Ida C. Milligan, and Charles F. Steel sold, conveyed, and assigned to "the claimant herein said letters patent Nos. 180490, 193097, 321743, and 360716, granted and issued to said Milligan, deceased, and to his said widow, Elizabeth R. Milligan, as executrix, a copy of which assign-men is set forth in the amended petition herein as assignment “ G,” and by reference thereto is made a part hereof.

The assignment aforesaid was finally acknowledged February 7, 1890, and was recorded in the United States Patent-Office October 26, 1894, in liber L 50, page 30G, of transfers of patents, and prior to the filing of the petition herein. The defendants, through the Chief of the Bureau of Engraving and Printing, were notified of said assignment on June 8, 1894.

XN. On August 30, 1887, the Secretary of the Treasury entered into a written agreement or license with said Elizabeth R. Milligan as executrix and as widow and legatee of said James Milligan, deceased, and Ida C. Milligan and Charles F. Steel to construct six plate printing presses, known as Milligan presses, in accordance with letters patent No. 180490, dated August 1, 1876; No. 193097, dated July 17, 1877, granted and issued to said James Milligan, and No. 321743, dated July 7,21885, and No. 360716, dated April 5, 1887, granted and issued to said Elizabeth R. Milligan as executrix of said Milligan, deceased, ivith “ the right to change and alter said presses at any time in accordance with any improvements in plate printing ” presses as in the two preceding contracts, a copy of which agreement or license is set forth in the petition as agreement “ E,” and by reference thereto is made a part hereof.

Said six Milligan presses were constructed and delivered to and accepted by the Chief of the Bureau of Engraving and Printing about November, 1887, and the sum of $7,500 for the construction thereof and a royalty of $500 for each press was paid, and the further royalty of $1 for each 1,000 impressions printed thereon to and including June 30,1889, was also paid, in accordance with said contract, making in all used by the Bureau under this and the preceding” contracts herein referred to 18 presses, all of which presses were oper*490ated with a mechanical wiper, substantially as shown and described in letters patent Nos. 821743 and 360716, subsequently issued to said Milligan’s executrix as set forth in finding xi, for which applications were made on the dates therein stated.

XXI. After the agreement or license of August 30, 1887, being the last of the agreements between the assignors of the ‘'claimant and the Government for the right to make and use said eighteen presses with mechanical wipers as aforesaid, the following correspondence took place between the attorney of the owners of said patents and the Chief of said Bureau:

“ 120 Broadwav,

“ *New York, June 2d, 1888.*

“ IIon. E. O. Graves,

“ *Chief of Bureau of Engraving and Printing,*

“ *Washington, D. G.*

“ Dear Sir: Deferring to a conversation on the subject of the jmrchase by the U. S. Government of the right to use the Milligan power plate-printing press for a lump sum in lieu of royalties, as now paid, I beg to say that I am authorized by the owners of the patents and the press, who are also clients of mine, to offer to the U. S. Government the right to use and manufacture all of said presses the Government may see fit to use in its printing business, and to cancel the agreements now existing for the payment of royalties, etc., to allow the Government to use and operate the presses now in the Bureau of Engraving and Printing, and all other presses that it may use in its work, without claim, control, interference, or hindrance by the said owners, for the sum of $80,000, to be paid to them in cash.

“ I make this offer at the present time so that if necessary it can be considered before the estimates are made up.

“ Very respectfully, yours,

“ W. J. Gibson.”

The following telegram is in reply:

Dated *“*Washington, D. C., *June Jth, 1888.*“To W. *J.*Gibson,

“ *120 Broadway, N. Y. City :*

“ Write me this evening without fail the annual amount which you would be willing to accept for the use of the Milli-gan presses, without limit as to number, on the basis of your proposition of June 2nd, which has just been received by me.

“ E. O. Graves,

“ *Chief of Bureau*

*491New York, *June 4-th, 1888.*

“ Hon. E. O. Graves,

“ *Chief of Bureau of Engraving and*Printing,

“ Washington, *D. C.*

“ Dear Sir: I am just in receipt of your telegram of this instant, asking the ‘ annual amount my clients would be willing to accept from the U. S. Government for the use of the Milligan presses, without limit as to number, on the basis of your (my) proposition of June 2nd.’ I beg to say that we could not base any annual sum on the offer of June 2nd. We have never considered but two ways of dealing with the press. The first is upon the payment of a royalty, such as we have with the Government now, and the second is to sell ’ the right to use it for a lump sum, such as I offered to you in mine of the 2nd instant. By this second plan we°are willing, as my offer shows, to take a great deal, less in a lump sum than the royalties would amount to and that the Government would pay, for the reason that we would get a sum. of money at once, and then we would be relieved from looking after the press in so far as the Government is concerned, and for some other reasons that may suggest themselves to you. We are now in the receipt of a royalty from the Government, taking the month of March, 1888, as an average-, that will amount to about $20,000 a year. The rate of royalty is fixed by agreement, and if we accept a lump sum per an-num in lieu of royalty for the use of the press without limit as to number, we will have to base our price per annum on the amount of royalties now received and not on the $80,000 offer, and in this view of this course you can see that we, as business people, Avould very naturally be entitled to more than $20,000 per annum; and although I can not answer you definitely this evening, I do not think we would be willing to accept less than $30,000 per annum for the use of the presses without limit.

“ I did not receive your telegram until 5 p. m., and could not communicate with my clients in time to write you by this evening’s post.

“Very respectfully, yours,

' “ W. J. Gibson.”

“ "Washington, D. C., *Jtme*5th, *1888.*

“ To William J. Gibson,

“ *120*Broadway, *New York City:*

“ It is contemplated to increase number of presses for next year’s work to twenty-four. Appropriation committee is reluctant to materially increase the aggregate amount of *492royalty for these presses and is therefore desirous of obtaining reduction per thousand sheets. The average earnings of the eighteen presses per year is, say, $18,000. If the number of presses be increased and the same rates maintained, *which would he the*case, the earnings of the twenty-four presses would be $24,000, an increase of $6,000 per year. If this amount be divided, the earnings for the 24 presses per year would be $21,000, which amount, if divided by the 24,000,000 impressions necessary to be printed, would give 87-£ cents per thousand impressions as the average royalty. Would owners of presses be willing to accept this rate per thousand if the number of presses were increased to twenty-four on condition that if the number were at any time reduced to “eighteen or less the old rate of one dollar per thousand impressions should be restored. Telegraph reply at once at Bureau expense.

“E. O. Graves,

“ *Chief of*Bureau.”

JtrNE 5th, *18S8.*

“ HoN. E. O. Graves,

*“.Chief of Bureau of Engraving and*Printing,

“ Washington, *D. C.*

“ The rate of royalty in so far as the presses uoav in use is fixed by agreement, and you will remember that the Assistant Secretary of the Treasury insisted upon the insertion of the most-favored-nation clause in the agreement, which I very strenuously opposed. The Government by its own act has debarred us from making the abatement you now ask. Owing to this clause in the agreement we can not reduce the rate of royalty on the presses now in use, but if the Government should want more presses I will see if it can be arranged so as to take a less rate on additional presses.

“ W. J. GibsoN.”

XNII. After June 30, 1889, the defendant kept and i'e-tainecl the eighteen Milligan power plate presses in the Bureau of Engraving and Printing, constructed by it or caused to be constructed by it and used under the said agreements or licenses in conformity with said patents, until after the commencement of this suit, when they were destroyed.

XXIII. By the act of March 2, 1889 (25 Stat. L., 945), making appropriation for the sundry civil expenses of the Government, it was in substance provided that unless the patentees of said presses would accept the $500 theretofore paid them as royalty on each press and further agree to ac*493cept 1 cent instead, of $1 for each 1,000 impressions for the further use of said presses they would not be used in said Bureau after the close of the then fiscal year.

The terms specified in said act were embodied in the draft of a formal agreement which was sent to the claimant’s assignors, but they, on July 8, 1889, declined to accept the same, and thereupon the further use of said presses, except as to one of them under the contract of August 30, 1887, referred to in finding xx, was discontinued.

XXIY. On July 11, 1889, after the six presses contracted for August 30, 1887, had been constructed, delivered to, and accepted by said Bureau, said Elizabeth R. Milligan, as executrix and individually, Ida C. Milligan, and Charles F. Steel assigned and transferred to the claimant herein said license or agreement of August 30,1887, as in said agreement provided, a copy of which is set forth in the amended petition herein as assignment “ F,” and by reference thereto made a part hereof.

XXY. The royalties on all the eighteen presses so used by the Government to June 30, 1889, inclusive, were paid by it to said Milligan or to Elizabeth R. and Ida C. Milligan and Charles F. Steel or their attorney, and in respect to the royalties under the contract of June 24, 1886, and August 30, 1887, appropriations were made to pay the same in the sundry civil appropriation act of 1886 and 1887 (24 Stat. L., 222,227,509,519).

After said date of June 30, 1889, when-the use of said presses were discontinued pursuant to the act of Congress set forth in finding xxm, none of said eighteen presses was used by the Government, except one of them under the caintract of August 30, 1887, as set forth in finding xxxiv.

XXYI. For about one year prior to the contract of January 9 , 1878, under which the first Milligan press was set' up in the Bureau of Engraving and Printing, two like presses, each including a wiper so constructed and operated as to respond to claims one and two of patent No. 360716, had been in public use on similar classes of work at the American Bank Note Company, in New York, where the inventor, Mil-ligan, was at the time employed, they having been purchased *494by said company, and they continued to be so used in the printing of cigar stamps and spirit stamps for the Brazilian and Spanish Governments until some time in 1878, when the contract for those particular kinds of work expired.

Another Milligan press of the same design, with a wiper of the same construction, was being operated in the same way at the National Bank Note Company in printing 2-cent United States documentary stamps and work for foreign governments and companies for over a year before the first Milligan press Avas set up in the Bureau of Engraving and Printing as aforesaid and until about July, 1878, by which time the contracts for the work had expired.

On February 1, 1878, after the first Milligan press was set up in the Bureau, the padded wooden block of the wiper was removed and three narrow blocks separately padded were substituted in its place. The construction and operation of the wiper after this change had been made were substantially as shown and described in létters patent 360716 subsequently issued to Milligan’s executrix, as stated in finding xi.

From about December 26, 1878, to April 30, 1879, the wiper on said Milligan press at the Bureau was used with a single pad composed of four layers of blanketing and an outer part of leather below the padded blocks. This single pad was fastened by being laced to the ends of the crossbars on each side of the wiper, the construction and operation of the wiper as a whole being substantially as shown and described in letters patent 321743 subsequently issued to said Milligan’s executrix, as set forth in finding xi.

For more than two years prior to Milligan’s applications of October 21, 1880, and January 29, 1883, the wiper constructed and adjusted as above set forth was in public use as a part of the machinery of the Bureau of Engraving and Printing.

The main difference between said two patents is that patent No. 321743 has a single pad with an inclined plane, thereby securing a graduated pressure as the plate passes under the wiper, while patent No. 360716 has two or more pads, the wiper under both patents operating substantially the same.

*495XXVII. Prior to April 5, 1887, the date of the issue of letters patent No. 360716, to wit, on July 8, 1885, Elizabeth B. Milligan, as executrix of James Milligan, deceased, secured the issue of a British patent for the invention or device shown and described in patents Nos. 321743 and 360716, with all the claims of both these patents. Under the British law this patent expired at the close of July 7, 1899 — British patent No. 8278 of 1885; Patents, Designs, and Trade-marks Act, 1883; 19 Law Beports.

XXVIII. On or about August 8, 1893, after an interview with the Chief of said Bureau and the Secretary of the Treasury looking to a resumption of the use of the presses in said Bureau and a request from the Secretry of the Treasury to submit a proposition for a lump sum for the use of said patents, the attorney of the owners of said patents addressed to the Secretary of the Treasury the following-letter :

“ 120 BROADWAY,

“ *New York, August*15th, *1893.*

“ Hon. Joi-iN G. Carlisle,

“ *Secretary of the Treasury.*

“ Sir : In an interview between yourself, Mr. Johnson, Chief of the Bureau of Engraving and Printing, and myself, on the 9th inst., on the subject of the Milligan steam plate printing presses, you suggested that the owners and patentees of these printing presses submit a proposition,for the absolute ownership of the eighteen presses now in the Bureau by the Government, including royalty and all interests the owners and patentees have in them. In compliance therewith, the owners and patentees of said presses have authorized me, as their attorney, to say that they will convey to the Government all the right, title, and interest, royalty, royalty rights, and claims on these eighteen steam plate printing presses for $36,000, or $2,000 a press.

“ They would be willing to wait for the payment of this money until these presses have saved'that amount in their work, over and above the same amount of work done on the hand presses, if the Government so desired.

“According to the records of the Bureau this amount would be saved in iour months. The agreement for the use of the last six presses is dated August 30th, 1887, and the clause in regard to the continuous royalty is as follows: ‘A royalty for the continuous use of said presses of one dollar for each one thousand perfect impressions thereafter printed thereon, *496and to keep and furnish the parties of the first part a true and correct account of the number of impressions so printed.’ This is a valid and subsisting contract between the Government and the owners of these presses, and no act of Congress can defeat the right to recover this rate of royalty so long as the Government uses these presses, unless released by the owners, which they propose to do if their offer is accepted.

“ This rate of royalty was proposed by the Government, and it was based on the claim that they would save fifty per cent over hand presses, and the records of your Department show that they saved 56-&% over the hand presses, or 6T%% more than was counted on. They saved the Government the last year they were used $102,147.50, or about $330 a day.

“ The Bureau of Engraving and Printing is the largest plate-printing establishment in the world, and there is no reason why it should pay twice as much for its plate printing as it would cost a private concern.

“No reason why it should throw out the most improved plate-printing machinery of the age and go back two hundred years to the old hand presses.

• “ Respectfully submitted.

“ W. J. Gibson,

*“Attorney for the Owners and Patentees of the*

“ *Milligan Steam Plate Printing*Presses.”

The above proposition was not accepted by the defendants.

XNIX. On March 5, 1894, the defendants accepted the proposal of Messrs. Hoe & Co., of New York, to build eight Milligan presses, as set forth in the correspondence hereinafter set out, which Milligan presses embodied patents Nos. 180490, 193097, 321743, and 360716, being the same and identical patents embodied in the Milligan presses theretofore used by the defendants under the contracts hereinbefore referred to, for which royalties, as therein provided, had been paid. The patent No. 180490 expired July 31, 1893, before the acceptance of said proposal. The correspondence referred to is as follows:

“ New York, *February 28th, 189F*

“ Dear Sir : From what Mr. Read reports, and from the feeling expressed when you were here, we are confident it will be impossible for us to make an estimate for supplying the Milligan presses. There will necessarily be so much experimenting and changing and improvements as suggested by your Mr. Harley that we could not get at the cost of them. *497The better plan, we believe, and such as we adopt in every case when making new machinery, or anything differing from our regular presses, is to do the job at our regular shop rates, working after your directions to the best of our ability, assuming no responsibility whatever for the running of the machine aside from the workmanship in it.

“ We need Mr. Eead here very much on important Avork, and it probably is not necessary for him to remain longer.

“ In case you decide to have us go on with the press the entire machine may be sent on here for us to use as a pattern, and any suggestions you may have to make we will gladly carry out.

“ Yours, venr truly,

“ E. Hoe & Co.

“ Claude M. Johnson, Esq.,

“ *Chief of the Bureau of Eng. &*Prg.,

“ Washington, *D. C.v*

“ New York, *March 1894-*

“ Dear Sir : Mr. Eead has returned and made his report. Our position is the same as expressed in the letter sent you a few days since. It seems impossible to estimate with any degree of accuracy as to the cost of these machines. In the first place, the drawings as now prepared are not made Avith sufficient accuracy for us to work by. To get them out properly it would be necessary to employ a skillful mechanical draughtsman, either to look those OArer which are iioav done or to make them entirely from the beginning. Besides this, Ave would like the old machine sent on here, and if Mr. Harley could come on from time to time Ave would, of course, profit by his suggestions. In any event we could not be 'responsible for the successful working of the machine further than in our agreement to promise to use eArerything in our' poAver to accomplish this result, supplying also the very best Avorkmanship.

“ We Avould like also to arrange, if the machine is satisfactory, that we haA^e a contract for making any more of them that you may require — that is, within a reasonable time. We should think, but do not name this as even an approximate figure, but, in our opinion, the first machine will not cost more than twenty-five hundred dollars ($2,500), possibly less, possibly more. Our preference will be to go on Avith the Avork, charging our regular shop rates. Furthermore, if the elements of haste come in prominently and we are compelled to work nights or 0Arertime, it will increase the cost.

*498“ You understand that tlie-machine will be in every way superior to the cumbersome ones formerly in use, which, so far as our report goes, were poorly made and not well adapted to the work they were t'o do; certainly not in their lasting qualities and general efficiency.

“As stated above, if Mr. Harley could come on when the machine was started and remain here a little time, returning and coming back again, if desired, it would facilitate matters greatly, and we would profit by his advice and suggestions. If you could so arrange it, we suggest sending the entire machine here and having Mr. Iiarley come with it, remaining until the drawings were completed by us (which would be extra), we taking his directions in the matter.

“ Promising the best attention to any orders .you may commit to us, ive remain,

“ Yours, very truly,

“ R. Hoe & Co.

“ Claude M. Johnson, Esq.,

“ *Chief of Bureau of Eng. and Ptg.,*

“ Washington, *D.*C.”

1 TREASURY DEPARTMENT,

Bureau oe Engraving “ Messrs. R. Hoe & Co., and Printing, *“March*5, *1894-.*

“ *New*York, *N.*

“ Gentlemen : Your letter of the 2d instant is received, and the proposition to build the eight presses at your shop rates is accepted. It is an imperative requisite that these . presses should be delivered in ninety days. The machine will be forwarded to you at once, and our Mr. Harley will go to confer with you. I beg to add that I have been prompted by your excellent reputation to give you this work, and shall rely on you to execute it satisfactorily at the least possible cost.

“ Respectfully, yours,

“ Claude M. Johnson,

“ *Chief of Bureau*

“ New York, *March*6th, *1891¡..*

“ Dear Sir : Your esteemed favor of yesterday is before us, covering order for the presses, which shall be put in hand immediately and every power we possess used to hurry forward their completion in the best possible manner.

*499“ Let the old machine come on quickly, with Mr. Harley, as proposed.

“ Thanking you for the order, we remain, yours, very truly,

“ E. Hoe & Co.

“ Hon. Claude M. Johnson,

“ *Chief of Bureau of Engraving <& Printing,*

“ *Washington, D. CP*

“ Treasury Department,

Bureau oe Engraving & Printing,

“ *March 23,1891/.*

*“*Messrs. E. PIoe *&*Co.,

“ *New York, N. Y. ■ '*

“ Gentlemen : I have to request that you will cause to be made a plate containing the following :

“ ‘ Improved Plate Printing Press, designed and built for the Bureau of Engraving and Printing,’ and that four of these plates be attached to each of the presses now being built by you. I also desire that in the progress of the work upon these presses they shall be called and spoken of among your workmen, to as large extent as possible, as ‘ the Bureau press.’

“ Your kind attention to this matter will oblige me.

“ Very respectfully,

“ Claude M. Joi-inson,

*“ Chief of BureatiP*

“'New York, *March 26th, 189Ip.*

“ Dear Sir: Your favors of the 23 and 24th inst. are received and shall have our best attention.

“ Yours, very truly,

Hon. Claude M. Johnson,

E. Hoe & Co.

“ *Chief of the Bureau of Engraving and Printing, “Washington, D. CP*

XXX. After the agreement between Messrs. E. Hoe & Co. and the Government to make said presses and after two or more of said presses have been partly made by them, the following correspondence took place:

. “ New York, *May 2nd, 1891/.*

“ Hon. Claude M. Johnson,

“ *Chief of Bureau of Engraving and Printing,*

“ *Washington, D. C.*

*“*My Dear Sir : I wrote you under date of April 25th ult. that ‘ a rumor had come to me that one of the Milligan *500power plate-printing presses had been taken away from the Bureau of Engraving and Printing for some purpose and asking you if such was the fact,’ to which I have not received any reply. In an agreement between the Government and the parties owning these presses and the patents on them, dated Feb’y 18th, 1880, in regard to the use, &c., of these presses in the Bureau, the Government agreed that these presses should ‘ not be used except by the Bureau of Engraving and Printing of the Treasury Department upon Government work.’ If the Government has sent one of these presses away it is a violation of this agreement. Will you kindly inform us if any of these presses have been sent away, and if so, where and for what purpose, and oblige,

“ Yours, respectfully,

“ W. J. Gibson.”

“ TeeastjRT Department,

“ Bureau op Engraving and Printing,

*“May 4,1894.*

“ Mr. William J. Gibson.

“ *New*York, *N. Y.*

“ Sir : I am in receipt of your letter of the 2d instant, and have to say that I fully understand the obligation of the contract between the United States and the owners of the patents covering the Milligan presses, and I beg to assure you that it will be respected in every particular.

“Very respectfully,

“ Claude M. Johnson,

“ *Chief of Bureau.”*'

XXXI. Soon after the making of the contract with Messrs. Hoe & Co. for the manufacture of eight Milligan presses, as set forth in finding xxix, and after the Bureau of Engraving and Printing had sent to said Hoe & Co. one of the Milli-gan presses theretofore used in said Bureau as a model from which to make said eight presses, W. J. Gibson, esq., attorney for and on behalf of the owners of the Milligan patents, protested against the* removal of said press for the purpose aforesaid and against the manufacture of said presses, and insisted that for any presses that should be made under the contract with Hoe & Co. the owners of the patents would expect and demand royalty, therefor, according to the terms of the contracts theretofore made between the Government and the assignors of the claimant for said eighteen presses *501and wipers. The Chief of the Bureau of Engraving and Printing, at or about the time of the use of the presses so manufactured under the contract with Hoe & Co., informed said Gibson, as the attorney of the owners, that the Government would refuse to pay royalty on the presses so manufactured because of the invalidity of the patents on the wiper on said press, he claiming that said wiper had been in public use in said Bureau for more than two years before any application for letters patent therefor had been made.

XXXII. After the contract of Hoe & Co. of March 5, 1894, ■ referred to in finding xxix, for the manufacture of eight Milligan presses, and after the manufacture and delivery to said Bureau of Engraving and Printing of three of said presses, embodying patent No. 180490, which expired July 31, 1893, and claims 1 and 2 of Milligan patent No. 193097, which expired July 16, 1894; also embodying claims 1, 2, and 4 of Milligan patent No. 321743 and claims 1 and 2 of Milligan patent No. 360716, both of which latter patents were covered by British patent No. 8278, there were printed on said three presses from June 11 to July 16, 1894, both inclusive, on plates 19^- by 21 inches, 95,050 accepted impressions.

The number of these presses embodying said patents was afterwards increased to twenty-five, all of which substantially embodied said patents, from which said twenty-five presses, to and including July 7,1899, when the British patents of said Milligan expired, the accepted impressions printed on said presses from various plates,, including the 95,050 impressions from said three presses, were as follows:

Plates 191- by 21 inches_ 43, 686, 500

Plates 16* by 1SJ inches.. 1,781, 003

Plates 16| by 16i§ inches., 8, 577,138

nates 16* by 1GH inches. 2, 721, 432

Plates 15f by 21 inches_ 337, 369

Plates 12f by 19 inches... 1, 251, 280

Plates 9 by 14 inches_ 1, 520, 760

Plates 12J by 101Ü inches.. 1,254, 0S3

Total _._ 61,129,571

XXXIII. The number of accepted impressions printed on said twenty-five presses from July 7, 1899, when said British *502patent expired, to July 0, 1902, inclusive, when patent No. 321743 would have expired but for said British patent, was:

On plates 19| by 21 inches_-_ 31,197, 789

On plates 16& by 18¿ inches_13, S3G, 128

On plates 12J by 19 inches_ 575, 370

Total _ 45, 009,293

XXXIY. After the contract of Hoe & Co. of March 5, 1894, one of the eighteen presses made and used under the contract of August 30,1887, for which royalty had been paid to and including June 30,1889, was again set up and operated in the Bureau of Engraving and Printing from about December, 1894, after the expiration of Milligan patents Nos. 180490 and 193097 on the press alone, to about November, 1895, during which period 622,100 accepted impressions from plates 19 by *12$*inches were printed thereon.

XXXV. From July 7, 1899, after the expiration of said British patent, to July C, 1902, when said patent No. 321743, embodying said British patent, expired (R. S., sec. 4887), two other presses were in use in said Bureau, each having a double wiper constructed and operating substantially as said Milligan patented wipers. That is to say, this double wiper comprises two pads, which act in succession upon the engraved plate, each of which is given a circular-reciprocating movement similar to that of the wipers on the other power presses in the Bureau. Each pad has its own independent rag, which is intermittently fed a short distance on each wiper. Each pad has on its under face a proper amount of felt padding, so that each pad presses elastically upon the surface of the plate. Each pad comprises a backing block, which is adjusted up and down by means of tap bolts and encircling wire springs, there being four bolts and four springs for each pad. Each rag is fed in the same direction as the engraved plate moves. Each engraved plate passes first beneath the rag of one of these pads and then immediately beneath the rag of the second pad. Both wipers of each of these presses are substantially set level, and the pressure of the first-acting wiper is greater than that of the last-acting wiper. The first-acting rag is fed forward inter*503mittently about 1 inch for each wipe, while the last-acting rag is a “ creeping ” rag, the feed being relatively slow and amounting to about 1 inch in ten minutes.

From said two presses during said period there were printed thereon from plates 19£ by 21 inches 1,469,514 accepted impressions.

XXXVI. The state of the art at the time of the application for patent No. 360716 is shown by the following patents, which are made a part of. this record:

United States patent to Stewart & McClelland, No. 16952, March 31, 1857. '

United States patent to Nichols, No. 21060, August 3,1858.

■British patent to Parkins, No. 3751, December 9, 1868.

British patent to Gough, No. 2844, October- 28, 1870.

United States patent to Robertson, No. 123933, February 10, 1872.

French patent to Guy, No. 114169, August 12, 1876.

French certificate of addition to Guy, August 7, 1877.

British patent to Brewer, No. 3217, August 15', 1876.

British disclaimer and memorandum of alteration, December 10, 1877.

United States patent to Guy, No. 210116, November 19, 1878.

United States reissue patent to Guy, No. 9317, July 20, 1880.

*Mr. William, G. Gibson*and *Mr. Willis Fowler*for the claimant:

This license or contract plainly contemplated the use of these presses as long as the patents or any patented improvements applicable to them should be in force, and this license or contract recognized that the patents, or patents for improvements covering these presses, might become the property of the heirs, executors, administrators or assigns of the parties of the first part during the time the presses were used by the defendant under this license or contract, and certainly contemplated a privity of contract between such transferees or assignees and the defendant in the use of these presses. This license or agreement contained substantially *504the same provisions as the first license or contract, showing unmistakably that these licenses or agreements were to continue during the lifetime of the patents or of any patents on any improvements for plate-printing presses, and, moreover, this license or agreement specifically provided that it could be assigned by making the royalties payable by the defendants to the licensors “ *or their*assigns.”

The law is well established that a license not expressly limited in duration continues until all the patents it covers expires. *(St. Paul Plow Worles*v. Starling, 140 U. S., 184, 195; *Ilartell*v. Tilghman, 99 U. S., 547, 556; *Solomon*v. *United*States, 21 C. Cls. R., 479, 484; *Ilarvey Steel Company*v. *The United*States, 38 C. Cls. R., 662, 676; Walker on Patents (4th ed.), sec. 308.) '

The agreements or licenses for the use of these presses had no provision for their termination or revocation; the licenses' were to make or to have made and use the Milligan power plate press under the patents named in the licenses or agreements for the whole term of the duration of the patents, and for any power plate presses made and used by the defendant embodying any one or more of the claims of the Milligan patents would make the defendant liable for the royalty fixed by the terms of the license or agreement. *(St. Paul Plow Go.*v. Starling, supra;*HarteTl*v. Tilghman, 99 U. S., 547, 556; *Am. St. Gar Adv. Go.*v. Jones, 122 F. R., 803, 808.)

*A.*license to use a certain number of machines confers upon the licensee the right to keep that number in use during the terms of the patent and replacing them with others when they become unserviceable. (Rob. on Pats., secs. 812, 816.)

The defendant having used these presses, or presses embodying the claims of these patents, can not come in now and say it did not use them under the license but must pay the royalties it agreed to pay.' *(St. Paul Plow Works*v. Starling, supra,140 U. S., 196; *Solomon's*ease, 21 C. Cls. R., 479.) The defendant must pay the full amount of the royalty agreed if he uses any one of the claims of any one of the patents, unless his liability is clearly and distinctly limited. *(PLuUbard*v. Allen, 123 Pa., 198, 211.)

*505The contract is entire and indivisible and the defendant having availed itself of at least a part of the patented process should accoiint and pay as provided in the contract. (Palmers Appeal, 96 Pa., 106,110; *Kroegher*v. *The McO on-way, etc., Go.,*149 Pa., 444, 457.)

Any conveyance of a right under a patent which does not amount to an assignment or to a grant is a license.

The conveyance of a right to make and use or to have made and to use any patent is a license. (Walker on Pats., par. 296, 4th ed.)

“A license in patent law is a transfer of any interest in a patent less than that conveyed by an assignment.” (22 Am. & Eng. Enc. of Law, 430.) Any transfer of less than the entire interest in the patented invention or an undivided part of such entire interest is a license. “Judged by this test every conveyance which does not transfer the exclusive right or an undivided interest in the exclusive right to practice the invention is a license.” All contracts or conveyances of the right to make and use are merely licenses. (Robinson on Pats., vol. 2, par. 80S; *'Waterman*v. *Mackenzie,*138 U. S., 252, 255; *Potter*v. *Holland,*4 Blatchf., 206, Fed. Cas., 11329; *Rice*v. *Boss,*46 F. R., 195.) So that these so-called contracts in regard to making and using these Milligan power plate printing presses are licenses and nothing more.

Section 4898, Revised Statutes, provides that “ Every patent or any interest therein shall be assignable in law, by an instrument in writing; and the patentee or his assigns or legal representatives may, in like manner, grant and convey an exclusive right under his patent to the whole or any specified part of the United States.” A license is an interest in a patent. It is through the granting of a license to use the patented article under the patent that, as a rule, the jiatentee receives his principal benefit from the invention. In *Potter*v. *Holland*(4 Blatchf., 206, Fed. Cas., 11328) Mr. Justice In-gersoll said: “ There are three classes of persons in whom the patentee can vest an interest of some kind in the patent. They are an assignee, a grantee of an exclusive sectional right, and a licensee.” * * * “A licensee is one who has

transferred to him, in writing or orally, a less or different interest than either the interest in the whole patent or an un*506divided part of such whole interest or an exclusive sectional interest.” (Walker Pat., sec. 297.)

It often happens that the United States is the only licensee and the only user of certain patented articles such as armor plate for warships, explosive shells, rams, and submarine batteries to be attached to armed vessels, etc., and such license to the Government is the only interest in the patent of which the patentee can avail himself for profit. *{United States*v. Palmer, 128 U. S., 262, 271.) Such a license would xmques-tionably be an interest in a patent. In this case the. defendant is the largest user of these plate presses in the world.

This provision giving- the right to the patentee to assign his patent “ or any interest therein ” gave the right to assign the licenses or agreements in question by statute, and is an expression by Congress that the transfer of such agreements are not within the mischief it intended to provide against, and takes the assignment or transfer of a license or an agreement to use a patent, where the Government is a party, out of the provisions of said section 3737.

The law is well settled both in this country and in England that a licensee is precluded from setting up the invalidity of the patents in an action to recover royalties for the use of the patented machinery. *{Ilarvey Steel Go.*v. *U. S.,*38 C. Cls. R., 662; Affirmed 196 U. S., 310; Walker on Patents, sec. 307 (4th ed.); *Kinsman*v. Parkhurst, 18 Plow., 269; 3 Robinson on Patents, sec. 1252; *Moore*v. *Water Tube Boiler Go.,*84 F. R., 346; *Pope Mfg. Go.*v..Owsley, 27 F. R., 100, 105; *White*v. *Lee,*14 F. R., 789; *Magic Ruffle Go.*v. *Ehn City,*13 Blatchf., 151, 158; *Marsh*.v. *Harris Manufacturing Go.,*63 Wis., 276; *PattersorOs Appeal,*99 Penna. R., 521; *Union Mfg. Go.*v. *Lounsbury,*41 N. Y., 363; *American Street Oar Adv. Go.*v. *Jones,*122 F. R., 803, g08; *Dale Tile Mfg. Go.*v. *Hyatt,*125 U. S., 46.) , "

*{a)*This court, in the Harvey Steel Company case (38 C. Cls. R., 662), held:

“ That where there was an express contract to manufacture and use a patented article, it would not go into the question of the validity of the patent; that if the agreement did not import a warrantee, it was the duty of the defendants to have investigated the scope and validity of the patent before they *507purchased the right to manufacture under it, and that if the contract contained a warrantee of a right to manufacture and use undisturbed, it was incumbent upon the defendants to show that they had been ousted from the purchased right by some superior patentee or disturbed in the exercise of it.”

*Stott*v. Rutherford, 92 IJ. S., 107; *Laws*v. Purser, 6 Ell & BL, 932; *Marston*y. Sweet, 82 N. Y., 526, 533; *James*v. Burnham, 67 Me., 93; *Adié*y. Clark, 3 L. R. Ch. Div., 134.

The doctrine of estoppel is binding upon the United States, and certainly it must be bound the same as an ordinary corporation when it entered into ordinary transactions. *(United States*v. Duell, 172 U. S., 576, 586; *Butterworth*v. *Hoe,*112 U. S., 50, 59; *International Supply Co.*y. Bruce, 114 F. R., 509, 512; *Belknap*v. *Child,*161 U. S., 10; *James*v. *Campbell,*104 U. S., 356, 358; *Jones*y. *Reynolds,*120 N. Y., 213; *Solomon*v. *United States,*137 IT. S., 342.)

*Mr. Charles C. Binney*(with whom was *Mr. Assistant Attorney-General Van Orsdel)*for the defendants.

Peelle, Ch. J.,

delivered the opinion of the court:

From 1878 to June 30, 1889, the Bureau of Engraving and Printing, under four separate contracts or licenses therefor from the patentee and oivners (claimant’s assignors), as hereinafter set forth, used, first, six steam plate printing presses embodying Milligan patents Nos. 180490 and 193097, with which presses were automatic wipers substantially the same as those for which letters patent were afterwards applied for and granted; and, later, twelve additional like presses and wipers 'after the issue of letters patent for said wiper, as hereinafter’ stated.

The royalty of $1 for every 1,000 perfect impressions under the first contract for one press ivas paid for the two patents on the press, with, unpatented wipers, the owners representing at the time that the press was so perfectly adapted to the work, that every part of the plate was wiped equally.

Under the second and.subsequent contracts $500 was paid for the right to make each press and a royalty of $1 for every 1,000 accepted impressions printed thereon, which payments as provided ‘by the contracts gave the Government *508the right, without the payment of additional royalty, to "the use of any improvements for which letters patent had been or might thereafter be granted to said Milligan or Steel, or either of them, or in which they might have any interest.

.Under these contracts each of the presses nsed was operated with an automatic wiper substantially the same as that embodied in Milligan patents Nos. 321743 and 3607Hi, for the use of which presses with automatic wipers the royalty agreed upon was paid to the claimant’s assignors; and in respect to the payment of the royalty under the last two contracts appropriations were made bjr Congress (24 Stat. L., 222, 227, 509, 515)- The same rate of royalty was paid after as well as before the granting of letters patent for the automatic wiper.

By the act of March 2, 1889 (25 Stat. L., 945), making appropriations for the sundry civil expenses of the Government, it was in substance provided that unless the patentees of said presses would accept the $500 theretofore paid them as royalty on each press, and further agree to accept 1 cent instead of $1 for each 1,000 impressions for the further use of said presses, they would not be used in said Bureau after the close of the then fiscal year.

The terms specified in said act were embodied in the draft of a formal agreement which was sent to the claimant’s assignors, but they, on July 8, 1889, declined to accept the same, and thereupon the further use of said presses, except as to one of them, under the contract of August 30, 1887, hereinafter referred to, was discontinued and they were, after the bringing of this action, destroyed.

About five years after the discontinuance of the use of said eighteen presses and after patent No. 180490 had expired, the Bureau of Engraving and Printing caused to be manufactured, under the contract with Messrs. Floe & Co., of New York, as set forth in finding xxxi, three, and later increased the number to twenty-five, presses and wipers, substantially like the eighteen presses and wipers theretofore used in said Bureau under the contracts • aforesaid; but in respect to said twenty-five presses and wipers the Government declined to continue the payment of royalty under said contracts. Hence this action.

*509The press and wiper were both the inventions of James Milligan, to whom and to his executrix letters patent were issued, but before any contract was made Charles F. Steel had become by assignment the owner of an interest therein. Before any application had been made for letters patent for the automatic wiper on said press, but after the patentee and owners had represented that the press was *“*so perfectly adapted to the work that every part of the plate was wiped equally,” as set forth in finding iv, the Bureau of Engraving and Printing, with the authority of the Secretary of the Treasury, on January 9, 1878, entered into the first contract with Milligan and Steel, by which one press embodying Mil-ligan patents 180490 and 193097 was installed in said Bureau at its expense and operated with the mechanical wiper as mentioned above, though no mention was made of any particular patent.

Under that contract the Government, agreed, to pay the operating expenses for six months, unless sooner satisfied with the trial, and to pay $1 for every 1,000 perfect impressions printed thereon; and, further, it was agreed that “ at the end of the trial the Department to have the right to buy the press if satisfied with its work, at a price which may be agreed upon by its owners and the Department, and to buy at the same price as many additional presses as it m.ay desire.”

The trial proved satisfactory, and after March, 1879, said press was operated as a part of the machinery of the Bureau and subsequently sold to the Government for the sum of $500, but the right to continue the use of the same was conditioned upon the continued payment of' the royalty of $1 for every 1,000 perfect impressions.

Again, on February 18, 1880, and before any application for letters patent for said wiper had been filed, a second contract was entered into for five additional like presses and wipers, for which the Government agreed- to pay $500 for the right to make each press and a continuous royalty of $1 for each 1,000 accepted impressions printed thereon.

On June 26, 1886, after the granting of letters patent No. 321743, dated July 7, 1885, covering the automatic wiper *510substantially as theretofore used, a third contract was entered into for sis additional presses; and on August 30, 1887, after the granting of letters patent No. 360716, dated April 5, 1887, covering said wiper substantially as theretofore operated, a fourth contract was entered into for six additional presses on substantially the same terms as provided in the contract of February 18, 1880, making in all eighteen presses; and in addition thereto the second and subsequent contracts provide in substance that the Government shall have, without the payment of additional royalty, the right to change and alter the presses so purchased to conform to any improvements in plate printing presses for which letters patent are now oi: shall hereafter be granted James Mil-ligan or Charles F. Steel, or either or both of them, or in accordance with any improvement for which letters patent shall hereafter be issued which shall be applicable to these presses or in which the said Milligan and Steel shall have any interest.

On April 8,1887, the owners of all the four patents (claimant’s assignors) executed to the claimant an assignment of all their right, title, and interest in and to the patents on said press and wiper, but said assignment was not acknowledged until after the date of the last contract (August 30, 1887) and was not recorded until October 26, 1894, after the expiration of both patents on the press, though the Government, as set forth in finding xix, was notified of said assignment on June 8,, 1894, before it had used any of the twenty-five like presses and wipers as aforesaid. All the contracts or licenses aforesaid were likewise assigned or attempted to be asigned at- various times to the claimant before the manufacture and use of said twenty-five presses and wipers or either of them.

The claimant as assignee of the contracts and patents contends that it is entitled to recover thereunder royalty for said twenty-five presses and wipers and their use, and that by reason of said contracts the Government is estopped from setting up, as against it, the invalidity of said patents or either of them.

The defendants contend that the contracts operated as a limited license, i. e., for the use only of the eighteen presses *511and wipers, which under Revised Statutes, section 3737, • could not be assigned; and that if entitled to recover as as-signee of the patents for the twenty-five presses and wipers and their use the claimant must, if the patents on the wiper are valid, do so on an implied contract.

It is clear that the Government was not obligated by the contracts, or either of them, to use the eighteen presses and wipers any particular length of time. It had the undoubted right to discontinue the use of-all the presses, as it did June 30,-1889, independently of the act of Congress of March 2, 1889, supra, without incurring any liability to the claimant or its assignors therefor. On the other hand,' if the eighteen presses, or any of them, were used during the lifetime of the patents for which the royalty was agreed to be paid, the contract obligated the Government to pay said royalty; and in this connection it is immaterial whether, under Revised Statutes, section 3737, the contracts as such could, have been assigned so as to vest the assignee with the rights of the assignors, as the assignment of the patents under Revised Statutes, section 4898, concededly carried with it the right of the assignee to the payment of the royalties accruing under the license of its assignors, at least after actual or constructive notice to the Government of said assignments. *(Freedmans Saving Company*v. *Shepherd,*127 U. S., 494-4 Comp. Dec., 43.)

So far as appears from the contracts, the royalty paid was for the use of the patents embodied in the press, Nos. 180490 and 193097, with wipers, and this is apparent when we consider that the rate of royalty agreed upon by the first and second contracts, before the application for letters patent for the wiper had been filed, was the same as it was after letters patent had been issued therefor, thus showing that the press was not regarded as a completed thing without the wiper, and especially does this appear when we consider the representations made by the patentee and owners before the making of the first contract as to the adaptability of the wiper coupled with the right of the Government under subsequent contracts, without the payment of additional royalty, to alter and change said press to conform to any im*512provements on said press. In other words, the use of the automatic wiper before letters patent were issued therefor appears to have been regarded by its owners as essential to give to the press that value for which the royalty was joaid, and for that reason doubtless no additional royalty was paid for the wiper after letters patent had been issued therefor— not that the press without the wiper was of no value, for it was a most useful and valuable invention, but that it was much more valuable with than without the automatic wiper, while the wij)er without the press was of no value. The two combined made a complete, useful, and economical machine, and it might be assumed, from the representations made as to the adaptability of the wiper, that but for. the wiper the Government might have secured' a much more favorable contract.

In this view of the case it might be held that whether the patents on the wiper be held void or otherwise no allowance should be made therefor, as the payment of the royalty for the use of the press (covered by the two patents thereon) appears to have included the use of the wiper as essential to add value to the press. Under the representations made by the patentee and owners as to the wiper before the making of the first contract the wiper became a part of the press under the several contracts and Avas used alike on all the eighteen presses after, as well as before, the granting of letters patent therefor, so that no change or alteration in the Aviper Avas necessary after the issue of said letters patent to conform it to any improvements on said press. Clearly it Avould have been a breach of the contract on the part of the patentee and owners had they not furnished the wiper Avith the press, as by their representations they had agreed to do. Bxit as the tAvo patents on the wiper must be held invalid under Revised Statutes, section 4886, by reason of their- sale and public use substantially as patented for more than two years prior to the filing of an application therefor, AAre need make no further comments in this connection. *(Egbert*v. Lippmann, 104 U. S., 333; *Smith & Griggs Mfg. Co.*v. Sprague, 123 U. S., 257; and *Andrews*v. *Holt,*123 U. S., 267.)

*513By its contracts for the purchase and use .of the eighteen presses and wipers as stated, the Government thereby conceded the validity of the patents and each of them as to said presses on which the royalty had accrued, and as between the parties thereto, under the decision in the case of the *Harvey Steel Company,*196 U. S., 310 (affirming the decision of this court, 38 C. Cls. R., 662; 39 id., 297), would have been, as the defendants concede, estopped from setting up the invalidity of said patents or either of them as to said eighteen presses so used under said contracts.

This being true, did the Government by discontinuing the use of the eighteen presses and wipers, for the purchase and use of which the contracts were made, thereby absolve itself from the further payment of royalties under those contracts to the claimant as assignee for the use of the twenty-five like presses and wipers so procured under the contract with Messrs. Hoe & Co. ?

In the Harvey Steel Company case the license was unlimited for the use of the process known as the “ Harvey process ” for the treatment of armor plate for use in the construction of vessels. The use of the process was not limited to particular vessels, and the royalty therefor had accrued before the Government raised the question of the invalidity of the patent. In the present case the royalty had not accrued, and objection was made to payment on the ground of the invalidity of the patents on the wiper at or a short time after the Government commenced to use the , presses so manufactured by Hoe & Co.

The parties, by making separate contracts for the presses purchased and used, thereby construed them as limited to the particular presses for which said contracts were made respectively. They deemed it essential to enter into separate contracts for the presses which the Government was permitted to purchase and use. The first contract for the use of the one press can not therefore be held a continuing license in the face of the subsequent contracts for each lot of presses. In the construction of contracts the court must take into consideration the action of the parties thereunder. In other words, where there is doubt as to the proper meaning of a *514contract the construction which the parties thereto have given it by their acts, if not erroneous therewith, is entitled to great weight. *(Chicago*v. Sheldon, 9 Wall., 50, 54; *Topliff*v. *Topliff,*122 U. S., 121.)

Congress, by their language in the act discontinuing the use of the presses in the Bureau — unless the patentees would accept the $500 theretofore paid them as royalty on each press and agree to accept 1 cent in lieu of $1 for each 1,000 perfect impressions theretofore printed thereon — appear to have shared the same view. They by their act evidently regarded the contracts as licenses limited to the eighteen particular presses which they covered, and while their construction of an existing contract would not bind the court, it is nevertheless in harmony with the conclusion we have reached; and we may add that the language used by the attorney of the owners in his letters of June 5, 1888, set forth in finding-xxi, and August 15, 1893, set forth in finding xxviii, is at least akin to the same view.

• The fact that the last two contracts provided for payment to the claimant’s assignors “ or their assigns ” adds nothing to the claimant’s right, as that term is satisfied by the assignment of the patents, which carried with it the right of the claimant company to receive the royalties accruing on the eighteen presses under the license of its assignors. Nor can it be held in this case that the mention of patents on the iviper in the last two contracts, when considered in connection with the prior contracts, adds anything to the claimant’s position, as the royalty paid under the two first contracts was the same as that paid under the two last, and therefore at the time of making said last two contracts it was unnecessary to inquire as to the validity or invalidity of the patents on the wiper, as nothing additional was being paid therefor.

We must therefore hold that the contracts and each of them for the eighteen presses and wipers were licenses limited to those particular presses, and that the claimant as assignee of the patents has no right to recover royalty under said contracts for the twenty-five presses and wipers manufactured by Messrs. Hoe & Company.

The wiper constructed, adjusted, and used as set forth in finding xxvi, being the wiper used on the first and subse*515quent presses installed in the Bureau of Engraving and Printing, and being substantially the wiper for which-letters patent were subsequently issued to the executrix of said Mil-ligan, was in public use for more than two years before the applications of October 21, 1880, and January 29, 1883, respectively.

The wiper was first used in the American Bank Note Com: pany, to whom it was sold with- the press, as found in' paragraph one of said finding, and by the National Bank Note Company, in New York, from January, 1877, until some time in 1878, in the printing of various stamps for foreign governments and for companies, and from about February, 1878, when the first press was installed in the Bureau, substantially the same wiper was in public use in said Bureau for more than two years before the applications aforesaid, or either of them.

That the patentees and owners, as early as April, 1877, regarded the experimental stage of the wiper as passed, seems evident from the representation then made by them to the Secretary of the Treasury, as set forth in finding iv. In their letter to the Secretary asking permission to make a test before-him of the press they stated that the press had been in successful operation by private parties for upward of a year, and that the press was “ so perfectly adapted to the work that every part of the plate is wiped equally by such a motion as to cross all lines.” If so, then the experimental stage of the wiper had passed, and this view of the case is well supported by the other facts found, for the wiper first used in the Bureau was substantially the wiper for which letters patent were thereafter issued. This being true, the experimental stage of the wiper for the purpose of perfecting the invention had ceased and the two years begun to run, and, therefore, the authorities relied upon by the claimant, and-particularly the case of *Elizabeth*v. *Pavement Company*(97 U. S., 126), do not apply.

The trial or experimental use of the press in the Bureau under the first contract was not for the purpose of perfecting the invention, but thereby to determine whether the press would do the work required more speedily and economically *516than the hand press. In other words, it was the user’s trial and not the inventor’s, and therefore did not operate to lessen the.time of the public use of the wiper. *(Consolidated Fruit-Jar Co.*v. Wright, 94 U. S., 92; *Smith and, Griggs Mfg. Co.*v. *Sprague,*123 U. S., 249; *International Tooth Crown Co.*v. *Gaylord,*140 U. S., 55; and *Eastman*v. *Mayor City of New York,*134 Fed. Rep., 844.)

About February, 1878, the single-padded block then in use in the Bureau, corresponding to patent No. 321743, was removed, and three narrow blocks separately padded, corresponding to patent No. 360716, were substituted. The one, however, was the mechanical equivalent of the other, and both were operated in substantially the same way, and having been in public use for more than two years before the applications or either of them for letters patent‘therefor, they must, as between the claimant as assignee of the patents and the Government, be, as they are held, invalid.

This conclusion renders it unnecessary to further consider the state of the art respecting patent No. 360716, which is stated in finding xxxi.

It was upon the ground of the invalidity of the patents on the wiper that the Chief of the Bureau of Engraving and Printing refused to pay royalty on the twenty-five presses, while recognizing the obligations of the Government under its contracts for the use of the eighteen presses and wipers. And in this connection it appears from finding xxxm that after the contract of March o, 1894, with Messrs. Floe & Co., one of the eighteen presses and wipers made and used under the contract of August 30, 1887, was again set up and operated in the Bureau from about December, 1894, after the expiration of both the Milligan patents on the press, to about November, 1895, during which time 622,100 accepted impressions from plates 19 by 12f inches were printed thereon. But as the only patents then in force wer„e those referred to on the wiper, which standing alone were of little if any value, and if of value such value is not shown, no recovery can be had therefor.

Furthermore, as we heretofore said, the contract for the use of the press undoubtedly carried with it, without addi*517tional'royalty, the right to the use of the wiper which was installed with the first and subsequent presses and used as hereinbefore stated. The use of the wiper was under the contracts a part of the consideration for the use of the press, and when the patents on the press expired the right to royalty therefor ceased, whether the patents on the wiper were valid or invalid.

It appears from finding xxxi that three of the presses and wipers embodying Milligan patents on the press which expired July 31, 1893, and July 16, 1894, as well as on the wiper, were used from June 11 to July 16, 1904, both inclusive, before the expiration of patent number 193097, during which time 95,050 accepted impressions were printed thereon.

But assuming the right of the claimant as assignee of the patents to recover on an implied contract for the three presses, there is no evidence in the record from which the court can asses the damages for the unexpired patent on the press, and besides its case both in pleading and in argument is predicated on the theory of a recovery on the contracts.

After the expiration of the British patent, number 8278, covering both said patents on the wiper, two other presses were in use in said Bureau to July 6, 1902, when patent number 321743 expired, each having a double wiper constructed and operating as set forth in finding xxxv; but assuming that the two presses so used embodied the two patents on the Milligan wiper, no recovery can be had for said two presses or their use for the reasons we have, given as to the other twenty-five presses.

The conclusion of the court on the whole case is that the petition must be dismissed.

FIowrv, J., was not present when this case was tried and took no part in the decision.