REF ID:A101210 

coma OJ' Ai' t EALS' F l1URTH CIRCUIT 

KOBER V. UNITED STATES 

No. 5786 Decided Nov. 8, 1948 

l. Appeals to Circuit Courta of Appeals -- weight ~:iven findings of 

District Court 

Finding of district judge that employee was aasi:i!ied to develop 

specific devices is supported by substantial evidence including employee's 

admissions; appellate court auat accept rindin3, since there ia no basis 

for holding that Judge, who saw and heard witnessee and 'lllla in better 

position than appellate court to ~ge their credibUity, was clearly 

wrong in accepting evidence relied on by employer. 

2. Title -- Employer and employee -- In general 

Title--Employer and employee--Shop right 

In absence of agreement fixin~ ri~hta of parties, rights of employee 

in his invention depend upon facts; if he made invention on own initiative 

and on own time and raaourcea, invention belongs to him and •ployer has 

no rights in it; if', while engaged in line of v.'Ork for employer, he devisea 

or improves method or instrumentality for doing work, using employer's 

property and services of other employees to develop invention and has 

aaaentad to use of same by employer, invention is hie property subject 

to irreYOcable license or shop right in employer; if ha makes invention 

while employed to make inveetigations and conduct experiaents for purpose 

ot making it, invention i• employer'• property; rules apply' to employeea 

ot Gcwernment. 

). Title -- Emplo7er and empl07ee -- In general 

Agreement between War Department and employee provides that invention• 

made by •plo7ee while engaged in aaaigned work aha.ll belong to Government 

it in opinion ot Chief Signal Officer it ia in public intereat that it be 

owned by War Department and that otherwi .. it shall belong to .. Ploree 

subject to non-exclusive license to Government; agreement na entered into 

by Government for lawtul and proper purpoae and finda ample statutory' 

1Upport; until Chief Signal Officer makes daterminstion as to public 

interest, emplo7ee ia entitled to inYentiona, subject to license to Gov· 

ernment, and to apply for patenta; no action (certificate of Secretary 

of ~ar to relieve employee from paying Patent Office fee1, J5 U. S. c. 45) 

taken or allowed a1 matter of courae to protect employee's ri~hta precludes GoYarnment from a1aartion of right• under contract attar Chief Signa~ Officer makes d~termination for which contract provides; good 

faith on part of Chief' Si~na.l Officer in making determination is easential 

@'pproved for Release by NSA on 05-20-2014 pursuant to E.O. 1352e 
-· • REF ID:A10124.'t!J 

to vest title in Government; his decision is reviewable for fraud, bad 

faith, or failure to exercise honest judgment; even if Chief Signal 

Officer acts in good faith, his determination would be set aside if he 

wae fraudulently induced by false statements or other fraudulent conduct 

of suborcinatea or others. 

4. Arbitration 

Award of arbitrator may be 1mpeac11ed for fraudulent oanduct in its 

procurement. 

Appeal from District Court for Eastern District of Virginia. 

Action by United Statea against William Kober for t••igrnent of 

inventions. :.·ram judgment for plaintiff, defendant appeals. .Affirmed. 

MARI P. l''RIED.LA1'1DER (LEROI BE.NDHEIM on the brief) both of iVashington, 

D.C., for appellant. 

T. HAY~ARD BROWN, Washington, D. C. 

(H.G. Moriaon, Washington, D.C., anci George R. Humrickhouse, Alexandria, Va., on the brief) for appellee. 

Before PARKER, Chief Judge, and SOPER and DOBIE, Circuit Judges. 

PARKER, Chief Judge. 

Thia is an appeal from a decree requiring the appellant lilliaa 

Kober to aasign to the United States all right• in certain invention• 

cOYered by applications for patent• pending in the .fatent Office, earial 

Noa. 54.3,744 a.,d 686,093 reapective13. The District Judge found that 

the inYentions were made by appellant while he •• employed by the 

United State• and assigned to the dut1 of developing electrical appliances of the sort covered by the applications for patents, under a 

contract providing that title to such inTentiona ahould be vested in 

the United State• upon a determination bf the Chief Signal Officer, which 

had been duly made, 'Uaat the public intereat ao required. The t·lstrict 

Judge held that the inYentions belonged to the United States under the 

express terms of the contract, •as well aa under the general law". 

The facts are that appellant, a graduate engineer, waa 91ployed bf 

the United States Army, Signal Corpa, Engineering l!aboratoriea, near 

Fort Monmouth, New Jersey, from January 194.3 to January 1947. In Janua17 1943, before being assigned to laborato17 work involving research 

and devalopaent projects, he agreed to the provisions of "Patent Memorandum No. J", which is as follows: 

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REF/ID:A1012f'd 0 

__ ,. ... 

"You are hel'eby aasi.511ed to develop improvement in arts of 

value to the··thief' Signal Officer. It is expected that this work 

may r•sult in the discovel')" of patentable f eaturea, and your 

aasipment to thia work ia for the particular purpoae of vesting 

in the United States all right, title and interest .lo •ZV' inven• 

tion that you m81' make while engageQ in the work a1aigned, if in 

the opinion of the Chier Signal Officer the public interest d_. 

mands that the invention be owned and controlled b7 the War Department. 

"Acceptance of aaaignaent to this work will constitute an 

agreement on your part to execute the paper• required for complete 

assignment of &l'J1' such invention to the United Statea in caae the 

Chief Signal Officer decidea that the invention should remain 

secret, or to execute the papers necessary for making application 

for patent and the aaeig1111ent of the patent to the United Statea 

if secrecy is not necessary or is necessary only for a limited 

time. In the case or an invention which the Chief Signal Officer 

decidea should remain secret acceptance of this aaaignment al•o 

constitutes an agreement on 7our part that 7ou will not di•cloae 

the invention to unauthorized persona until such ti.lie aa you are 

informed in writing b7 the ~!rector of the Si~nal Corpe Ground 

Signal Service, that the need for secrecy ha• ceased. 

"The aaaignaent of the invention to the United States must 

be drafted in form to comply' with requirement• of law relating 

to patent applications coming under this categorya but such a•aignment or inst!'Ulllent of tranllf'er 111&7 in a proper case include 

auitable reservations to enable you to retain or repose••• your 

commercial rights, in whole or in part, if and when the need 

for secrecy cea••• to exi•t. 

"Thi• notice of aesignment to develop improvements in arta 

of value to the Signal Corps shall not be construed a• diYesting 

you of ownership of an1 invention made by you while engaged on 

th.ii work, other than those which in the opinion of the Chief 

Signal Officer ehould be owned and controlled by the War Department to saf e~rd the public interest, except that the United 

State• shall be entitled to a nonexclusive license to a117 and 

all inventions made by you in the course of the work assigned in 

the same way as if this special aaaignment had not been made." 

(1) In February or March 1943, appellant conceived an invention 

relating to an altPrnating current generator, and in .August 1944 an 

invention designed to maintain within limits the voltage output of a 

generator notwithstanding varying loada. He contends that he was not 

aasigned to the dnelopaent of these devices under hie contr&ct of 

empl0711ent; but the District Judge has found that he waa ao assigned 

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_,. REF ID:A1012'!-~ 

and thi• finding ia 8Upported b7 11Ubatantial evidence including admiea. 

made b7 appellant himself in atatements filed by hi.ti aa a basis of promotion in the goyernaent service. We must accept this finding, since ~here is no baai1 for holding that the judge who saw and heard the witneaaea and was in better position than we are to judge their credibilit7, 

was clearly wrong in accepting the evidence relied on b7 the Government. 

In making applications for patent• on these inventions, appellant secured 

and filed certificates of the Secretary of War that the iDYentiona were 

like.17 to be used in the public interest and •• relieved of the pa1111ent 

of feea of the Patent Office under the ~ct of Kay 3, 1883, aa amended, 

35 u.s.c.A. 45. 

In 1946, appellant prepared a document showing the theo17 of th• 

first of hia patents; and this waa uaed by hia 8Uperior, a Colonel 

M07nahan, without h11 knowledge, in negotiations with officials of the 

General Electric Compan.y looking to the manufacture of the device for 

the GoYernment, jppellant protested against this diacloaure and considerable feeling 1111.a developed between him and Colonel MoJD&han. He 

waa ordered to make a public apology for language which he had used to 

Colonel l07NLhan, and resigned hia po1iiion rather than do so. Demand 

waa then made upon him that he either execute to the Government licensee 

authorizing it to licen .. other• under the patent• or make aaaignmenta 

to the Govern11ent retaining licen1ea tor him•elf which would authorize 

hill to enter into &117 coainercie.l. arranglllenta covering the patent• that 

he might desire. Upon hia retuaal to accede to this demand, the Chief 

Signal Officer of the United state•, Major General s. B. Akin, made a 

tinding that, in hia opinion, the public intereat daaanded that the inYention described in appellant'• applications be owned and controlled 

b7 the War Department and enclosed papers or a•aignment for him to 

execute. He refused to execute theae, and thi• 1111tt ·~· thereupon instituted to require hill to a•sign to the Gover1111ent hia rights under 

the patent applications. 

At the hearing in the court below Major General Akin testified that 

he made the determination that it wa• in the public interest for the 

patent• to be owned and controlled bJ the War Department on recommendations 

submitted by hi• technical advisers and on his personal knowledge of the 

facts in the case. He stated that the facts laid before him were that 

the devices covered b7 appellant's inventions were needed b7 the armed 

f orcea of the United States and that it waa desirable that the GoYernaent 

own the patents in order to secure quantit7 production by priTate aanuracturer1 and lower price• aa a result of such production. He said that 

he knew nothing about the controver97 that had arisen between appellant 

and Colonel llo7nahan or the feeling resulting therefrOll. There ia not 

the alighteat eTidence that General Akin acted otherwise than in entire 

' good faith in making the determination or that arJ7 person who furnished 

inf orm&tion to him with regard to the matter waa actuated b7 improper 

motivea. Coun•altor appellant complain that th97 were stopped in their 

examination of General Akin; but the.record 1how1 that thorough exa.mina-~ 

tion waa permitted ae to the facts which were before the General and that 

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REF ID:A101210 

the court merely declined to permit examination to ehow that he had 

made a miatake. While counsel stated generall.1' that they propoaed to 

ahow that fraud waa perpetrated upon the General in aecuring hia determination, thia appeara to be mere brutum tul.llen, with no specific 

question or offer of proof to support the statement. 

(2) Upon these facts, we think that the judgment appealed from 

waa clearly correct. In the absence of agreement fixing the rights of 

the partiea, the rights of an employee in an inventio~ which he baa made 

are subject to different rules dependent upon the facta. If he has made 

the invention on his own initiative and on his own time and reaourcea, 

the invention belongs to him and the employer haa no righta in it. If 

while en~aged in a certain_ line of work tor hia employer he has devised 

or improved a method or instrumentality for doing the work, using the 

property of the employer and the aervices of other employees to develop 

hie invention and haa aeaented to the use of same by the employer, the 

invention is hie property subject to an irrevocable license, or shop 

right, in the employer. If he 11akea an inTention while mplo7ed to mske 

inveatigationa and conduct experiJlente for the purpose of making it, 

the invention ie the property of the •player, who is entitled to the 

fruit• of the labor for which he contracted. Theae rules appl.7 to employee• of the Government ae well ae to thoae of private pereone. See 

United States T. Dubilier Condenser Corporation, 289 U. s. 178 (17 USPQ 

154), and Houghton v. United Statee, 4 Cir., 23 F. 2d 3a6, where thia 

court discussed the matter full.Jr ·with citation of the applicable authorities. In the case at bar, however, these rulea need not be conaidered 

except aa furniehing background tor the agi:eement of the partiea heretofore quoted which dale fully with the matter. The effect of that agreement, aside from the provisions for secrecy, ia to provide that an;y 

invention made by appellant while engaged in the work to which he hae 

been aasi')ned aha.11 belong to the Unitedc'.Statee, it in the opinion of 

the Chief Signal Officer it i• in the public interest that it be owned 

and controlled by the War Depart~•nt, otherwise it shall belong to 

appellant subject to a non exclusive license on the part of the United 

Statea. The determination b7 General Akin fulfilled the condition ot 

the contract and vested title to the invention in the United Statea. 

()) Appellant queations the validity of the contract on the ~ound hat it is lacking in atatutory foundation. If it •ere held invalid, ~his •ould not help appellant, as the Government would then be entitled 

to the invention on the ground that appellant had made it while am.-

1 ed for the purpoH of conducting inveatigationa and making e:xperi-

:.~. from which it was anticipated that patentable inve~tio~~dwou~d the 

lt we do not think however, that the contract is nva • n 

re~ra" it is a reaso~ble agreement entered into by the Govern-

:~:i r~'a lawful and proper purpoae and tind1 ample euppo~t in~ atatutei See Act of Augu1t 29, 1916, c. 418, sec. l, 39 ;)tat. • 

10 u.s.c:A. 1223; Act of July 2, 1942, c. 477, sec. 8, 56 Stat. 631-

632. 
- .,.. REF ID :A1012];-0-

It i• argued that the contract, proper.17 construed, does not authorize an,y determination b7 the Chief Signal Officer "except to inEure 

military .. crec1 or to safeguard the public intere.t in a military wa.7•. 

It ·is perfectly clear tram a reading or the contract, bowner, that the 

provision• aa to secrecy- are entireJ.7 separate and distinct fro• those 

relating to the detel'llination that the public intere.t require• ownership and control by the war department. !be provi1ion of paragraph two 

ot the contract, upon which appellant relies, relating to a determination 

b7 the Chief Signal Officer that the invention lhould remain 1ecret, provide• for an a•aignaent in auch caae of the invention as distinguished 

froa the patent. Thia i• followed by" a provision requiring the aal!lignaent of the patent, "if secrec1 is not necess&r7 or is neceaaary for 

only a limited tiae•. The paragraph oloaea with a requ1r81lent that the 

inYention be not diacloaed until the need tor aecrec7 hae expired. The 

third paragraph relate1 to f ol'll of a•aignaenta of patents aa to which 

secrecy ia required, but provide• that reaervations of righta ma7 be 

made •in a proper oasa" to be asserted when need of aecrec7 ha• expired. 

The final par~graph makes clear that by a "proper came" iaaeant a case 

in which the Chiet Signal Ofticer ha• not determined that the patent 

•hould be "owned and controlled b7 the war department to safeguard the 

public interest.• That paragraph 118.k•• it equalJ.T clear, when considered 

with the first paragraph, that 11t1ch a determination bJ' the Chief Signal 

Officer ve•t• the right to such invention in the United Statea. 

And •• do not think that the righta of the United Statee were in a111 

way prejudiced b7 the fact that appellant was allowed to appl.7 for patents 

with &Hignrnent of license• to the Goftrnment, or that certificates of the 

Secretary ot War were filed to permit thia to be done without P81'1lent ot 

Patent Office feaa, as allowed b7 the Act of 1883, a1 amended. Until the 

Chier Signal Of'ticer made hi• detel'llination with respect to the public 

interest, appellant waa entitled to his inventiona, 1111bjeot to thia license, 

and to app17 for patents to protect 18ae; and no action taken or allowed 

aa a matter of courae for the protection of righta, which were undoubtedly' 

his until action bJ' the Chtet Signal Officer, should be held to preclude 

the GoYernment froa aasertion o£ righta under the contract after the Chiet Si,~nal Officer made the determination for which the contract provide1. 

See Houghton v. United St.atea, aupraJ Grand Trunk Western Railway v. 

United States, 252 U. s. 112; Wisconsin Central R. Co. v. United States, 

164 u. s. 190. 

We quite agree with appellant that good faith on the part of the 

Chiet Signal Officer in making the determination for which the contract 

provides was essential to vest title to the inventions in tee United States, 

and that his decision would be reviewable for fraud, bad faith, or failure 

to exercise an honest judgment. United Statea v. Glea.aon, 175 U. s. 588; 

lihlberg v. United States, 97 U. S. J98. There is nothing in the record, 

howeYer, upon which to base a contention of fraud, bad faith or failure 

to exercise an huneat judgment, nor i• there any basis for saying that 

evidence to thia effect was excluded. Aa .tated above, general charges 

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,. 

REF ID:A10121~QA 

ot fraud were made in the argument of counsel, but there was no tender 

of proof which would justify sending the case back. There wae no pretense or compliance with the requirement of rule 4J(c) of the Rules of 

Civil Procedure, which· provides: 

•In action tried by a jury, if an objection to a question 

propounded to a witness is sustained by the court, the examining 

attorney may make a specific offer of what he expects to prove 

by the answer of the witness. The court may' require the ofter 

to be made out of the hearing of the jury. The court may add 

such other or further statement as clearly arows the character of 

the evidence, the form in which it was offered, the objection 

made, and the ruling thereon. In actions tried without a jury 

the same procedure may be followed, except that the court upon 

request shall take and report the evidence in full, unless it 

clearly appears that the evidence is not admissible on any ground 

or that. the witnesa 18 privileged." 

Even though the Chief of the Signal Corp• acted in good faith, his 

detel'llination would be set aside if it were shown to have been fraudullntly 

induced by false statements or other fraudulent conduct on the part of hi• 

subordinates or others, just as the award of an (4) arbitrator mi~ht be 

impeached for fraudulent conduct in its procurement; but there is no 

evidence or offer of evidence of this sort. It wa• not competent, of 

course, for the tr~il court to substitute its judgment for that of the 

Chief of the Signal Corps or enter into an inquiey a1 to whether or not 

he had made a mistake or judgment. Thie was wh~t the judge refused to 

do; anti then was no offer of a..v specific evidence to austain the charge 

of fraud. 

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