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PATEN!'S 

REF ID:A68974 

COURl' OF AP.t-EALS, FOURTH CIRCUI'.I' 

KOBER V. U.NITED STATES 

No. 5786 Decided Nov. 8, 1948 

1. Appeals to Circuit Courts of Appeals -- weight given findings of 

District Court 

Finding of district judge that employee was assigned to develop 

specific devices is supported by substantial evidence including employee's 

admissions; appellate court must accept finding, since there is no basis 

for holding that judge, w)lo saw and heard witnesses and was in better 

position than appellate court to !judge their credibility, 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 fixing rights of parties, rights of employee 

in his.invention depend upon facts; if h~ made invention on own initiative 

and on own time and resources, invention belongs to him and employer has 

no rights in it; if, while engaged in line of work for employer, ha devises 

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

property and services of other employees to develop invention and has 

assented to use of same by employer, invention is his property subject 

to irrevocable license or shop right in employer; if he makes invention 

while employed to make investigations and conduct experiments for purpose 

of making it, invention is employer's property; rules appiy to employees 

of Government. 

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

Agreement between War Department and ecployee provides that inventions 

made by employee while engaged in assigned work shall belong to Government 

if in opinion of Chief Signal Officer it is in public interest that it be 

owned by War Depart~ent and.that otherwise it shall belong to employee 

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

by Government for lawful and proper purpose and finds ample statutory 

support; until Chief Signal Officer makes determination as to public 

interest, employee is entitled to inventions, subject to license to Government, and to apply for patents; no action (certificate of Secretary 

of War to relieve employee from paying Patent Office fees, 35 U. S. C. 45) 

taken or allowed as matter of course to protect employee's rights precludes Government from assertion of rights under contract after Chief 

Signal Officer makes determination for which contract provides; good 

faith on part of Chief Signal Officer in making determination is essential 

@'pproved for Release by NSA on 01-03-2014 pursuantto E.O. 1352a 
REF ID:A68974 

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

faith, or failure to exe~cise honest judgment; even if Chief.Signal 

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

was fraudulently induced by false statements or other fraudulent conduct 

of subordinates or others. · 

4. Arbitration 

Award of arbitrator may be impeached for fraudulent conduct in its 

procurement. 

Appeal from District Court for Eastern District of Virginia. 

Action by United States against William Kober for assignment of 

inventions. From judgment for plaintiff, defendant appeals. Affirmed. 

MARK P. FRIEDLANDER (LEROY BENDHEIM on the brief) both of Washington, 

D.c., for appellant. 

T. HAYWARD.BROWN, Washington, D. C. 

(H.G. Morison, Washington, D.C., and George R. Humrickhouse, Alexandria, Va., on the brief} for appellee. 

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

PARKER, Chief Judge. 

This is an appeal from a decree requiring the appellant William 

Kober to assign to the United States all rights in certain inventions 

covered by applications for patents pending in the }atent Office, serial 

Nos. 543,744 and 686,093 respectively. The District Judge found that 

the inventions were made by appellant while he was employed by the 

United States and assigned to the duty of developing electrical appliances of the sort covered by the applications for patents, under a 

contract providing that title to such inventions should be vested in 

the United States upon a determination by the Chief Signal Officer, which 

had be~n duly made, that the public interest so required. The District 

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

express terms of the contract, 11 as well as under the general law". 

The facts are that appellant, a graduate engineer, was employed by 

the United States Army, Signal Corps, Engineering ~aboratories, near 

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

and development projects, he agreed to the provisions of "Patent Memorandum No. 3'', which is as follows: 

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REF ID:A68974 

RYou are hereby assigned to develop improvement in arts of 

value to the Chief Sicinal Officer. It is expected that this work 

may result in the discovery of.J?atentable features, and your 

assignment to this work is for the particular purpose of vesting 

in the United States all right, title and interest to any invention that you may make while engaged in the work assigned, if in 

the opinion of the Chief Signal Officer the public interest demands that the invention be owned and controlled by the War Department. 

"Acceptance of assignment to this work will constitute an 

agreement on your part to execute the papers required ror complete 

assi.:,cnment of any such invention to the United States in case the 

Chief Signal Officer decides that the invention should remain 

secret,' or to execute the papers necessary for making application 

for patent and the assignment of the patent to the United States 

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

time. In the case of an invention which the Chief Signa~ Officer 

decides should remain secret acceptance of this assignment also 

constitutes an agreement on your part that you will not disclose 

.the invention to unauthorized persons until such time as you are 

informed in writing by the Director of the Signal Corps Ground 

Signal Service, that the need for secrecy has ceased. 

''The assignment of the invention to the United States must 

be drafted in form to comply with requirements of law relating 

to patent applications coming under this category; but such assign• 

ment or instrument of transfer may in a proper case include 

suitable reservations to enable you to.retain or repossess your 

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

for secrecy ceases to exist. 

. nrhis notice of assignment to develop improvements in arts 

of value to the Signal Corps shall not be construed as divesting 

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

this work, other than those which in the opinion of the Chief 

Signal Officer should be owned and controlled by the War Department to sai'eguard the public interest, except that the United 

States shall be entitled to a nonexclusive license to any and 

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

the same way as if this special assignment bad not been made.u 

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

relating to an alternating current generator, and in August 1944 an 

invention designed to maintain within limits the voltage output of a 

generator notwithstanding varying loads. He contends that he was not 

assigned to the development of these devices under his contract of 

employment; but the District Judge has found that he was so assigned 

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REF ID:A68974 

and this findi.ng is supported by substantial evidence ihcluding admissions 

made by appellant himself in statements filed by him as a basis of promotion in the government service. We must accept thls finding, since 

there is no basis for holding that the judge who saw and heard the witnesses and was in better position than we are to judge their credibility, 

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

In making applications for patents on these inventions, appellant secured 

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

likely to be used in the public interest and was relieved of the payment 

of fees of the Patent Office under the Act of May.J, 1S8J, as amended, 

35 u.s.c.A. 45. 

In 1946, appellant prepared a document showing the theory of the 

first of his patents; and this was used by his superior, a Colonel 

Moynahan, without his ·knowledge, in negotiations with officials of the 

General Electric Company looking to the manufacture of the device for 

the Government. Appellant protested against this disclosure and considerable feeling was developed between him and Colonel Moynahan. He 

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

Colonel Moynahan, and resigned hi~ position rather than do so.- Demand 

118.S then made upon him that he either execute to the Government licenses 

authorizing it to license others under the patents or make assignments 

to the Government retaining licenses for himself which would authorize 

him to enter into any commercial arrangements covering the patents that 

he might desire. Upon his refusal to accede to this demand, the Chief 

Signal Officer of the United states, Major General S. B. Akin, made a 

finding that, in his opinion, the public interest demanded that the invention described in appellant's applications be owned and controlled 

by the War Department and enclosed papers of assignment for him to 

execute. He refused to execute these, and this suit was thereupon 

instituted to require him to assign to the Government his rights under 

the patent applications. · 

A~ the hearing in the court below Major General Akin testified that 

he made the determination that it was in the public interest for the 

patents to be owned and oontrolled by the War Department on recommendations 

submitted by his 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 by appellant's inventions were needed by the armed· 

forces of the United States and that it was desirable that the Government 

own the patents in order to secure quantity production by private manufacturers and lower prices as a result of such production. He said that 

he knew nothing about the controversy that had arisen between appellant 

and Colonel Moynahan or the feeling resulting therefrom. There is not 

the slightest evidence that General Akin acted otherwise than in entire 

good faith in making the determination or that any person who furnished 

information to him with regard to the matter was actuated by improper 

motives. Counse~o~ appellant complain that they were stopped in their 

examination of Ge~eral Akin; but the record shows that thorough examination was permitted as to the facts which were before the General and that 

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REF ID:A68974 

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

made a mistake. While counsel stated generally that they proposed to 

show that fraud was perpetrated upon the General in securing his determination, this appears to be mere brutum fulmen, with no specific 

question or offer of proof to support the statement. 

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

was clearly correct. In the absence of agreement fixing the riglits of 

the parties, the rights of an employee in an inventiop which he has made 

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

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

the invention belongs to him and the employer has no rights in it. If 

while engaged in a certain line of work for his employer he has devised 

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

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

his invention and has assented to the use of same by the employer,. the 

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

right, in the employer. If he makes an invention while employed to make 

investigations and conduct experiments ~or the purpose of making it, 

the invention is the'property of the employer, who is entitled to the 

fruits of the labor for which he contracted. These rules apply to employees of the Government as well as to those of private persons. See 

United St~tes v. Dubilier Condenser Corporation, 289 U. S. 178 (17 USPQ 

154), and Houghton v •. United States, 4 Cir., 23 F. 2d JS6, where this 

court discussed the matter fully with citation of the applicable authorjties. In the case at bar, however, these rules need not be considered 

except as furnishing background for the agreement of the parties ·heretofore quoted which deals fully with the matter. The effect of that agreement, as~de from the provisions for secrecy, is to provide that any 

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

been assigned shall belong to the UnitedcStates, if in the opinion of 

the Chief Signal Officer it is in the public interest that it be owned 

and controlled by the War Departffient, otherwise it shall belong to 

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

States. The determination by General Akin fulfilled the condition of 

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

(3) Appellant questions the validity of the contract on the ground 

that it is lacking in statutory foundation. If it were held invalid, 

this would not help appellant, as the Government would then be entitled 

to the invention on the ground that appellant had made it while·em- · ployed for the purpose of.conducting investigations and making experiments from which it was anticipated that patentable inventions would 

result. We do not think, however, th.at the contract is invalid. On the 

contrary, it is a reasonable agreement entered into by the Govern- me~t for a lawful and proper purpose and finds ample support in the 

statμtes. See Act of August 29, 1916, c. 418, sec. 1, 39 Stat. 622, 

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

6~. 

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REF ID:A68974 

It is argued that the contract, properly construed, does not authorize a.DY determination by the Chief' Signal Of'ficer "except to insure 

military secrecy or to safeguard the public interest in a military way". 

It is perfectly clear from a reading of the contract, however, that the 

provisions as to secrecy are entirely separate and distinct from those 

relating to the determination that the public interest requires ownership and control by the war department. ~he provision of paragraph two 

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

by the Chief Signal Officer that the invention should remain secret, provides for an assignment in such case of the invention as distinguished 

f'rom the patent. This is followed by a provision requiring the assignment of t.he patent, "if secrecy is not necessary or is necessary for 

only a limited time11 • The paragraph closes with a requirement that the 

invention be not disclosed until the need for secrecy has expired. The 

third paragraph relates to form of assignments of' patents as to which 

secrecy is required, but provides that reservations of ri~hts may be 

made 11 in a proper case 11 to be asserted when need of secrecy has expired. 

The final paragraph makes clear that by a "proper case" is meant a case 

in which the Chief Signal Officer has not determined that the patent 

should be "owned and controlled by the war department to safeguard the 

public interest." That paragraph makes it equally clear, when considered 

with the first paragraph, that such a determination by the Chief Signal 

Officer vests the right to such invention in the united States. 

And we do not think that the rights of the United States were in any 

way prejudiced by the fact that appellant was allowed to apply for patents 

with assign~ent of licenses to the Government, or that certificates of the 

Secretary of War were filed to permit this to be done without payment of 

Patent Office fees, as allowed by the Act of lBSJ, as amended. Until the 

Qhief Signal Officer made his determination with respect to the public 

interest, appellant was entitled to his inventions, subject to this ~icense, 

and to apply for patents to protect same; and no action taken or allowed 

as a matter of course for the protection of rights, which were undoubtedly 

his until action by the Chief Signal Officer, should be held to preclude 

the Government from assertion of rights under the contract after the Chief 

Si6nal Officer made the determination for which the contract provides. 

See Houghton v: United States, supra; 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 or the 

Chief Signal Officer in making the determination for which the contract 

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

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

to exercise an honest judgment. United States v. Gleason, 175 U. S. 588; 

Kihlberg v. United States, 97 U. S. J9S. There is nothing in the record, 

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

to exercise an honest judgment, nor is there any basis'for saying that 

evidence to this effect was excluded. As stated above, general charges 

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REF ID:A68974 

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

of proof which wou.ld justify sending the case back. There was no pretense of compliance with the requirement of rule 4J{c) of the Rules of 

Civil Prpcedure, which provides: 

, 

. "In action tried by a jury, if an objection tq 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 ~itness. The court may require the offer 

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

such other or further statement as clearly shows the character of 

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

made, and the ruling thereon. In tctions 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 witness is privileged.n 

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

determination would be set aside if it were shown to have been fraudulently 

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

subordinates or others, just as the award of an (4) arbitrator might be 

impeached for fraudulent conduct in its procurement; but there is no . evidence or offer of evidence of this sort. It was not competent, of 

course, for the trail court to substitute its judgment for that of the 

Dhief of the Signal Corps or enter into an inquiry as to whether or not 

he had made a mistake of judgment. This was what the judge refused to 

do; and ·there was no offer of any specific evidence to sustain the charge 

of fraud. 

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REF ID:A68974 

lC U. S, C, A, J.223 

COlTTRACTS 01" SIG:iil CORPS. :··henever contracts "'.71".ich are 

not to be performed \'Ii thin sixty days are ms.de on behalf 

of the Government by the Chief Signal Officer, or by 

officers of the Signal Corps authorized to make them, 

· and are in excess or .,.i500 in amount, such contracts 

shall be reduced to writing and signed by the contracting 

parties, In all other cases contracts shall be entered. 

into ur.der such regulations as mB¥ be prescribed by the 

Chief' Signal Of ricer, 

Act or Jul,,y 2. 19~ 

56 Stat, 631~32 

Sec, 8 

:-:henevor, during the fiscal year endi.'l{; Jur::.e .30, 1943, 

the Secretary of ;-:ar should deem it to be aclvantageous 

to the national defense, and if in his opinion the existing facilities of the ~!ar Departnent aro inadequate, he 

is he11eby authorized to employ, by contract 01· othertiise, 

;·;ithout i•ef'erence to section .3709 Revised Statutes, civil 

service or classii'ic~tion laws, or section 5 of the Act of 

April 6, 1914 (38 Stat • .3.:3:5) 1 and o.t su.ch. rates of compensation (not to exceed :;50 ,er day for j_r.d.ivi~uc.:.l.::1) as he ~ deterr.iine, the ser'rices of architects, engineers 1 or 

fir~s or corporations thereof, and ether technical aJJd 

professio:cal persoru1el as raay be necessa.i.-y.