The evening times., 1901-08-26
NOT ENTITLED TO ROYALTY
The Department Of Justice Decides
Against Steel Companies.
The secretary of the Navy Declared
to Be Justified in Withholding
Vouchers for Claims Tor Harden
ing Arm0r Plates for Wurships.

ion rendered today 10y the Acting At,or-
ney General, Mr. Beck, advised the Sec
retary Of the Navy that he is justified in
Withholding his approval Of certain
vouchers which have been submitted by
the Bethlehem Steel Company and the
Carnegie Steel Company, for royalties
which these companies paid to the Har-
vey Steel Company for the use Of the
Harvey process in harden ng steel. and
for which they claim reimbursement from
the Government under contract b.
which the Government agreed to -epay
these royalties to the steel companies. if
the steel companies were required Il pay
them to the Harvey Steel Company.
The decision Of the Acting Attorney
General will settle dispute in regard TO
the liability to pay these royalties. which
has been Of several years standing. Six
teen thousand dollars is the amount OF
money immediately involved. but a differ
eut ruling would probably haze meant
the outlay Of vast sums iu the future.
The particular royalties relate only to
the hardening Of the armor plate for the
battleships Illinois AMI Wisconsin. At the
same time the decision affects an of the
royalties upon metals used in connection
with battIeship construction since 1888.
The opinion OF the Acting Attorney
General contains a fun statement of the
contract relations between the Govern
mcut and the contractors. II states that
on April =, 1893 the United States made
contract with the Harvey Steel Company,
by which the Government acquired the
right 90 use the inventions described as
the Harvey patterns by paying a royalty
Of one-half OF l cent a pound upon the
finished plates. Subsequently Admiral
Sampson. then Chief Of the Bureau Of
Ordnance. advised the Navy Department
that no further royalties should De paid,
as the process used by the Government,
through its contractors. in the construc-
tlon Of armor plate, was not the same
as that covered by the Harvey patents,
and for the additional reason that the
Harvey patents were invalid for want Of
novelty on this recommendation Secre-
tary Herbert, in 1895, refused 10 pay fur
ther royalties.
In 1897 the Carnegie Steel Company and
the Bethlehem Steel Company took out
a license from the Harvey Steel Company
20 use its process IN the face harden
ing OF armOr plates. ard the contract
stipulated that the steel companies were
under no obligation 20 pay any royalties
whenever the Harvey Steel Company had
previously granted license 10 any Gov
crumeut and the royalties provided by
said license had IN fact been paid by such
Government The agreement further
stipulated that the steel companies should
submit to an adverse decree for ar al
legged infringement Of the Harvey pat
ents and the issuance Of an injunction 70
restrain them from the use Of the pro
cess except under this license.
Suit was commenced IN the United
States Circuit Court for the Eastern dis
trict OF Pennsylvania and a decree enter
ed stipulated in the agreement. Subse-
quently. the two steel companies IN 1SgS
made contracts with the Government for
the manufacture OF arm0r plates for the
battIeships Illinois and Wisconsin which
provided that if the steel companies were
required TO pay royalty for the use Of
the fsce-hardening process the Govern
ment should reimburse them, and the
Harvey Steel Company then brought suit
against the Government IN the Court Of
Claims for an infringement OF the pat
euts. and the Government defended on the
grounds indicated by Secretary Herbert
The Bethlehem Steel Company and the
Carnegie Steel Company paid the royal
ties for hardening the armor plate Of the
Illinois and Wisconsin TO the Harvey
Steel Company and presented "a voucher
for the approval Of the Secretary Of the
Navy 20 secure reimburse ment. The Sec
retary requested the opinion Of the Attor-
ney General as TO whether he was 1usti-
fed ia Withholding his approval until the
case in the Court Of Claims. involving the
validity Of the Harvey patents. was first
determined The Acting Attorney Gen
eral, in his opinion sent today 20 the Sec
retary Of the Navy, advised Secretary
Long that he Is justified in Withholding
much approval The oplnicn says.
THE Government contends that the
process employed in hardening these ar
NOR plates j. not covered by the Harvey
patents; and IN the second place. that the
patents are invalid II the only qucs-
zion were as 10 the validity Of the pat
ents 1t could be urged with some force
that by the license Of March "A. 1897. the
Carnegie Company is est0ppgd from dis
putting the validity Of the Harvey pat
cnts. and is therefore required 70 pay
these royalties.
1T is not necessary 10 decide this ques-
tiOu at this time. for II the rrst COuten-
tiOn Of the Government be sound and the
process used by the Carnegie Company
H. hardening these plates IS not the proc
ess covered by the Harvey patents then
il would not be the subject Of the agree
ment of March a. 1897 and the Carnegie
Company was not required TO pay roy
aIties hereunder. This is the very ques-
tiOn at issue in the pending litigation be-
tween the United States and the Harvey
Company, behind which latter company
the Carnegie Company stands as bench
cial pIaintin 20 the extent Of the royal
ties paid By Il, for the Carnegie Company
is 'subrOEated To the rights Of the Harvey
steel Company for the amount OF such
royalties ana the Harvey Company 'on
the written request, and at the expense /
OF the Carnegie Steel Company. Limited
must commence and prosecute with due
diligence a suit against the United States |
To recover the royalty due under the said
Government license. and must pay over
the royalties thus recovered 10 the Car
negie Company. Whether recovery IS |
sought in the pending case in the Court /
Of Claims for the particular royalties. Tor /
which you are now asked to approve a !
voucher, is not important. the question I
involved Is the same, and Il the Harvey 1
Company be successful in this suit. and \
the royalties comprised IN the disputed /
voucher De- not recoverable IN the pend 4
ing suit. the Harvey Company IS Obliged 1
TO bring o new suit for such royalties for /
g.F 81