The Washington times. (Washington [D.C.]) 1901-1902, 1901-08-27
AGAINST THE COMPANIES.
The Royalties for Hardening Ar.
NOR Plate are DisallOwed.
The Department of Justice Declares
the Claims Void, and Instructs the
Secretary of the Navy Tint He
May withhold the Vouchers.

The Acting Attorney General. Mr.. Beck,
| yesterday rendered an opinion advising
| the Secretary 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 Com
| pany for royalties which these compa-
MES pay to the Harvey Steel Com
pany for the use of the Harvey pro-
cess in hardening steel, and for
I which they claim reimbursement from
| the Government under contract by
| which the Government agreed to repay
| these royalties to the steel companies. if
the steel companies were required to 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 differ
| eut ruling would probably have meant
the outlay of vast sums in 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 all of the
royalties upon metals used in connection
with battleship construction since 1888.
The opinion of the Acting Attorney
General contains n full statement of the
contract relations between the Govern
ment and the contractors. 1t states that
on April y. 1893. the ~ nited States made a
contract with the Harvey Steel Company.
by which the Government acquired the
right to use the inventions described as
the Harvey patterns by paying a royalty
| a
finished plates. Subsequently Admiral
Sampson, then Chief of the Bureau of
Ordnance, advised the Navy Department
that no further royalties should be paid,
as the process used blythe Government,
through its contractors, in the construc-
ton of armor plate, was not the same
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 1898, refused to pay fur
Their 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 harden
ing 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 Gov
eminent 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 an al
legged infringement of the Harvey pat
ents and the issuance of an Injunction to
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 decree enter
ed as stipulated in the agreement Subse-
quentIy. the two steel companies in 1895
made contracts with the Government for
the manufacture of armor plates for the
battleships Illinois and Wisconsin. which
provided that if the steel companies were
required to pay royalty for the use of
the face-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
ents, and the Government defen.Eed 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 voucher
for the approval of the Secretary of the
Navy to secure reimbursement. The Sec
rotary requested the opinion of the Attor-
ney General as to whether he was Justi-
fled in 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
1T 1ax- m, l1ea
Secretary of the Navy advised Secretary
Long that he is justified in withholding
such approval. The opinion says:
THE Government contends that the
process employed in hardening these ar
NOR plates is not covered by the Harvey
patents; and in the second place, that the
patents are invalid. II the only ques-
ton were as to the validity OF the pat |
ents, II could be urged with some force |
that by the license of March q, 1897, the |
Carnegie Company is estopped from dis |
putting the validity of the Harvey pat |
ents. and is therefore required to pay |
these royalties.
1T is not necessary to decide this cues |
ton at this time. for if the first conteu- |
ton of the Government be sound and the |
process used by the Carnegie Company |
in 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 |
was not required to pay roy
alties Hereunder. This is the very ques-
ton at issue in the pending litigation be-
tween the United States and the Harvey
Company behind which latter company
the Carnegie Company stands bench
rial plaintiff to the extent of the royal
ties paid by it, for the Carnegie Company
s 'subrogated to the rights Of the Harvey
steel Company for the amount OF such
royalties and the Harvey Company ON |
he 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
he royalties thus recovered to the Car
legie Company Whether recovery is
sought in the pending case In the Court
If Claims for the particular royalties. for
which you are now asked 70 approve a
is not important. The question
involved Is the same. and II the Harvey
company be successful in this suit, and
he ROYALTIES comprised in the disputed
ng suit. the Harvey Company is obliged
o bring new suit for such royalties for
he benefit OF the Carnegie Company, and
he prior decision would un iTestionably
De controlling. 1t is obvious, therefore, |
hat to pay these royalties IL not merely
o PREJUDICE the question al issue in the
present litigation. but in effect to con- |
lone the entire claim. In my Judgment,
therefore,, you are Justified in withhold
ng your approval of this voucher.
1T is evident that the Government de-
Tres to have the question of the validity |
I the Harvey patents. and the exact pro- !
ess covered by them, judicially deter |
mined and IL should not be defeated in
NV ha n.pt |