Source: https://supreme.justia.com/cases/federal/us/275/331/case.html
Timestamp: 2017-01-23 17:08:33
Document Index: 710304225

Matched Legal Cases: ['§ 3477', '§ 3477', '§ 4898', '§ 3477', '§ 3477', '§ 3477', '§ 3477', '§ 937', '§ 3477', '§ 3477', '§ 3477']

Richmond Screw Anchor Co. v. United States (full text) :: 275 U.S. 331 (1928) :: Justia U.S. Supreme Court Center Log In
› Richmond Screw Anchor Co. v. United States
Richmond Screw Anchor Co. v. United States 275 U.S. 331 (1928)
U.S. Supreme CourtRichmond Screw Anchor Co. v. United States, 275 U.S. 331 (1928)Richmond Screw Anchor Company v. United StatesNo. 99Argued December 1, 1927Decided January 3, 1928275 U.S. 331CERTIORARI TO THE COURT OF CLAIMS
6. Under the Act of July 1, 1918, which did away with the remedy against the contractor in such cases and confined the patent owner to a suit against the United States in the Court of Claims for "recovery of his reasonable and entire compensation for such use and manufacture," the claim of the patent owner against the Page 275 U. S. 332 United States for manufacture and use occurring since the date of the Act is assignable with the patent, notwithstanding the sweeping terms of Rev.Stats. § 3477. P. 275 U. S. 345.
Certiorari, 273 U.S. 679, to a judgment of the Court of Claims rejecting a claim for infringement of a patent. Page 275 U. S. 337
Upon the additional findings of fact, the government contended that the former judgment should be set aside, Page 275 U. S. 338 and a new one entered dismissing the plaintiff's petition, for the reason that the assignment of the claims for infringement to the plaintiff was void and of no effect under § 3477 of the Revised Statutes. The Court of Claims, on the second hearing, yielded to this contention and dismissed the petition.
The patent was a combination patent, and, in view of the prior art, was limited to the exact terms of the Page 275 U. S. 339 claims, which made it quite narrow, as its course through the Patent Office clearly demonstrated.
"All transfers and assignments made of any claim upon the United States, or of any part or share thereof, or interest therein, whether absolute or conditional and whatever may be the consideration therefor, and all powers of attorney, orders, or other authorities for receiving payment of any such claim or of any part or share thereof, shall be absolutely null and void unless they are freely made and executed in the presence of at least two attesting Page 275 U. S. 340 witnesses, after the allowance of such a claim, the ascertainment of the amount due, and the issuing of a warrant for the payment thereof. Such transfers, assignments, and powers of attorney must recite the warrant for payment, and must be acknowledged by the person making them before an officer having authority to take acknowledgments of deed, and shall be certified by the officer, and it must appear by the certificate that the officer at the time of the acknowledgment, read, and fully explained the transfer, assignment, or warrant of attorney to the person acknowledging the same."
An elaborate argument has been made to show that the section should not apply to the assignment of claims for infringements of a patent, for the reason that a claim for infringements is not a common law chose in action, but grows out of rights created by the statutes covering patents; the provisions for their assignment and for suits by Page 275 U. S. 341 the assignee are to be found in §§ 4898, 4919, 4921, and other related sections. Crown Die & Tool Co. v. Nye Tool & Machine Works, 261 U. S. 24, 261 U. S. 42-43. But there is no conflict between the patent sections and § 3477. The latter section was passed to protect the government and prevent frauds upon the Treasury. Western Pac. R. Co. v. United States, 268 U. S. 271, 268 U. S. 275; Seaboard Air Line R. Co. v. United States, 256 U. S. 655, 256 U. S. 657; Goodman v. Niblack, 102 U. S. 556, 102 U. S. 559-560. And it would seem that the danger of exploiting and harassing the government with the use of assignments of claims for patent infringement was within the general purpose of that section.
We come, then, to the question whether § 3477 and the Brothers case apply to the case before us, and that requires an interpretation of the amending Act of 1918, and its operation upon the rights of the assignee and owner of the patent and its claims for infringement. Exceptions to the general language of § 3477 have been recognized by this Court because not within the evil at which the statute aimed. Seaboard Air Line R. Co. v. United States, supra; Western P. R. Co. v. United States, supra; Goodman v. Niblack, supra; Price v. Forrest, 173 U. S. 410, 173 U. S. 421-423; Parrington v. Davis, 285 F. 741, 742. We think that the situation created by the provisions of the amending act of 1918 is such that § 3477 does not apply to all of the assigned claims of the petitioners for infringement under that act. The Act of June 25, 1910, c. 423, 36 Stat. 851, provided that whenever an invention described in and covered by a patent of the United States should hereafter be used by the United States without license of the owner thereof or lawful right to use the same, such owner might recover reasonable compensation for such use by suit in the Court of Claims. The Act contained a number of provisos, only one of which is important here -- namely, that in any such suit, the Page 275 U. S. 342 United States might avail itself of any and all defenses, general or special, which might be pleaded by a defendant in an action for an infringement, as set forth in Title 60 of the Revised Statutes or otherwise.
"A prior decision of the Supreme Court, that in the case of Crozier v. Krupp, had been interpreted as having the opposite meaning, and the Department was able, up to the time of the later decision, on March 4th last, to proceed satisfactorily with the procuring of such patented articles as it needed, leaving the matter of compensation to patentees for adjustment by direct agreement, or, if necessary, by resort to the Court of Claims under the above-mentioned Act of 1910. Now, however, manufacturers are exposed to expensive litigation, involving the possibilities of prohibitive injunction, payment of royalties, rendering of accounts, and payment of punitive damages, and they Page 275 U. S. 343 are reluctant to take contracts that may bring such severe consequences. The situation promised serious disadvantage to the public interests, and in order that vital activities of this department may not be restricted unduly at this time, and also with a view of enabling dissatisfied patentees to obtain just and adequate compensation in all cases conformably to the declared purpose of said act, I have the honor to request that the act be amended by the insertion of a proper provision therefor in the pending naval appropriation bill."
The purpose of the amendment was to relieve the contractor entirely from liability of every kind for the infringement of patents in manufacturing anything for the government, and to limit the owner of the patent and his assigns and all claiming through or under him to suit against the United States in the Court of Claims for the recovery of his reasonable and entire compensation for such use and manufacture. The word "entire" emphasizes the exclusive and comprehensive character of the remedy provided. As the Solicitor General says in his Page 275 U. S. 344 brief with respect to the Act, it is more than a waiver of immunity, and effects an assumption of liability by the government.
It is settled that, but for the Act of 1918, the two assignments vesting title in the Anchor Company would enable it to recover from the contractor for all his infringements. Crown Die & Tool Co. v. Nye Tool & Machine Works, supra; Gordon v. Anthony, 16 Blatchf. 234, Fed.Cas. Page 275 U. S. 345 No. 5,605; Waterman v. Mackenzie, 138 U. S. 252, 138 U. S. 256, 138 U. S. 261; Gayler v. Wilder, 10 How. 477, 51 U. S. 494; Robinson on Patents, Vol. 3, § 937, p. 122. If now § 3477 applies, and these assignments are rendered void, the effect of the Act of 1918 is to take away from the assignee and present owner not only the cause of action against the government, but also to deprive it of the cause of action against the infringing contractor for injury by his infringement. The intention and purpose of Congress in the Act of 1918 was to stimulate contractors to furnish what was needed for the war, without fear of becoming liable themselves for infringements to inventors or the owners or assignees of patents. The letter of the Assistant Secretary of the Navy upon which the Act of 1918 was passed leaves no doubt that this was the occasion for it. To accomplish this governmental purpose, Congress exercised the power to take away the right of the owner of the patent to recover from the contractor for infringements. This is not a case of a mere declared immunity of the government from liability for its own torts. It is an attempt to take away from a private citizen his lawful claim for damage to his property by another private person which, but for this act, he would have against the private wrongdoer. This result, if § 3477, Rev.Stat., applies and avoids the assignment, would seem to raise a serious question as to the constitutionality of the Act of 1918 under the Fifth Amendment to the federal Constitution. We must presume that Congress, in the passage of the Act of 1918, intended to secure to the owner of the patent the exact equivalent of what it was taking away from him. It was taking away his assignable claims against the contractor for the latter's infringement of his patent. The assignability of such claims was an important element in their value, and a matter to be taken into account in providing for their just equivalent. If § 3477 applied, such equivalence was impossible. Page 275 U. S. 346