Evening star., 1901-08-26
CLAIMS FOR ROYALTY
Vouchers Submitted by Two Steel
Companies.
OPINION OF The ATTORNEY GENERAL
Secretary Of Navy Justified in
Withholding Approval.
TIL e II RVEY PATEN T S

The Department Of Justice, in an opinion
by Acting Attorney General Beck, has ad-
vised the Secretary of the Navy that he
Is justified in Withholding his approval of
certain vouchers which have been submit
ted by the Bethlehem Steel Company and
the Carnegie Steel Company for royalties
which these companies paid to the Harvey
Steel Company for the use of the Harvey
process in hardening steel, and for which
they claim reimbursement from the govern
ment under a contract by which the gov
ernment agreed to repay these royalties to
the steel companies If the steel companies
were required to pay them to the Har-
vey Steel Company. The liability to pay
these royalties has been matter of dis
pute for some years, and while the par
ticular royalties only relate to the harden
ing of the armor plates for the battleships
Illinois and Wisconsin, yet the decision af-
fects all Of the royalties upon the various
battle ships which have been constructed
since 1893, or under process Of construc-
tion.
The opinion of the acting attorney gen.
eral contains full statement of the con-
tract relations between the government
and the contractors, and sets forth that
on April u 1898, the United States made a
contract with the Harvey Steel Company
by which the government acquired the
right to use the inventions described in the
Harvey patents by paying a royalty OF one
half Of one cent a pound upon the finished
plates. Subsequently Admiral Sampson,
then chief of the bureau of ordnance, ad-
vised the Navy Department that no fur
ther royalties should be paid as the pro-
cess used by the government, through it's
contractors In the construction OF armor
plate. was not the same as that covered
by the Harvey patents, and for the addl-
ticnal reason that the Harvey patents were
inv fnr
ommendation Secretary Herbert, in 1880,
refused to pay further royalties.
In 1897 the Carnegie Steel Company and
the Bethlehem Steel Company took out a
license from the Harvey Steel Company to
use its process in the face hardening of
armor plates, and the contract stipulated
that the steel companies were under no
obligation to pay any royalties whenever
the Harvey Steel Company had previously
granted a license to any government and
the royalties provided by said license
had, in fact. been paid by such gov
ernnent. The agreement further stip-
ulated that the steel companies should
submit to an adverse decree for an alleged
infringement of the Harvey patents and
the issuance OF an injunction to restrain
them from the use Of the process except
under this license. Suit was commenced
in the United States circuit court for the
eastern district of Pennsylvania and a de-
cree entered as stipulated in the agree
ment. Subsequently the two steel COM
ernment for the manufacture Of armor
plate for the battle ships Illinois and Wis
consin. which provided that if the steel
companies were required to pay royalty
for the of the face-hardening pro-
cess" the government should reimburse
them, and the Harvey Steel Company then
brought suit against the government in
the Court of Claims for an infringement
of the patents, and the government de-
Tended on the grounds indicated by Sec
retary Herbert The Bethlehem Steel
Company and the Carnegie Steel Company
having paid the royalties for hardening the
armor plate of the Illinois and Wisconsin
to the Harvey Steel Company, presented a
voucher for the approval of the Secretary
of the Navy to secure reimbursement and
the Secretary requested the opinion of the
Attorney General as to whether he was
justified in withholding his approval until
the case in the Court of Claims, involving
the validity Of the Harvey patents, was
first determined.
Justified i'm Withholding Approval.
The acting attorney general, in the opin-
ion JUST sent to the Secretary of the Navy,
advised him that he is justified in with
holding such approval. The opinion says:
THE government contends that the pro-
cess employed in hardening these armor
plates is not covered by the Harvey pat
ents; and in the second place, that the pat
ents are invalid. If the only question
were as to the validity Of the patents, It
could be urged with some force that by
the license of March "a, 1897, the Carnegie
company Is estopped from disputing the
validity of the Harvey patents, and is
therefore required to pay these royalties
1t is not necessary to decide this ques-
tion at this time. for If the first contention
OF the government be sound and the process
used by the Carnegie company in harden
ing these plates is not the process covered
by the Harvey patents. then it would not
be the subject of the agreement of March
ND tl@ r4y
not required to pay royalties Hereunder
This Is the very question at issue in the
pending litigation between the United
states and the Harvey company. behind
which latter company the Carnegie COM
pany stands as beneficial plaintiff to the
extent of the royalties paid by it, for the
carnegie company is Subrogated to the
rights of the Harvey Steel Company for
the amount Of such royalties and 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
to the Carnegie company. Whether re-
covery is sought in the pending case in the
court Of claims for the particular ROYALTIES
for which you are now asked to approve
voucher is not important. The question in
volved Is the same, and If the Harvey COM
pany be successful in this suit. and the
royalties comprised in the disputed voucher
be not recoverable in the pending suit, the
Harvey company is obliged to bring a new
suit for such royalties for the benefit of
the Carnegie company, and the prior de-
cision would unquestionably be controlling.
1t is obvious, therefore, that to pay these
royalties is not merely to prejudice the
question at issue in the present litigation,
but in effect to concede the entire claim.
In my judgment. therefore, you are justi-
fed in Withholding your approval of this
voucher.
ut Is evident that the government de-
sires to have the question of the validity
OF the Harvey patents, and the exact pro-
cess covered by them, judicially deter
mined, and 1t should not be defeated in this
purpose by the ingenious agreement into
which it's contractors and the Harvey com
pany entered. I, therefore, adhere to the
opinion previously expressed that you are
justified in withholding such approval. to
the end that the questions involved may
be judicially determined
GRAIN FOR GERMANY.
Com manetftf0n HefrNAn In ~.A <h1