Case Name: THE HARVEY STEEL COMPANY v. THE UNITED STATES, THE MIDVALE STEEL COMPANY INTERVENOR
Court: United States Court of Claims
Jurisdiction: United States
Decision Date: 1911-03-27
Citations: 46 Ct. Cl. 298
Docket Number: No. 20899
Parties: THE HARVEY STEEL COMPANY v. THE UNITED STATES, THE MIDVALE STEEL COMPANY IN-TERVENOR.
Judges: 
Reporter: United States Court of Claims Reports
Volume: 46
Pages: 298–318

Head Matter:
THE HARVEY STEEL COMPANY v. THE UNITED STATES, THE MIDVALE STEEL COMPANY IN-TERVENOR.
[No. 20899.
Decided March 27, 1911.]
On the Proofs.
This is a suit between the same parties and upon the same contract as that reported in 88 O. Cls. R., 662, 681; affirmed, 196 U. S. R., 310; viz, to recover royalties under an express contract for the use of the Harvey process in hardening armor plate. The intervenor is the manufacturer who used the .process. He seeks to defeat a recovery upon the ground that sand was not packed on the back of the armor plates as a noncarbona-eeous material and hence that the process covered by the ' claimant’s patent and contract with the defendants was not used. \
I. Where the only difference between the present suit and one previously decided in favor of the claimant is that in former cases the hardening of armor plates was effected by using sand as noncarbonaceous material on the back of the plates and in the present case carbonaceous material was confined within the brick box inclosing the plates; the change is technical, the use of sand not being essential to the Harvey process.
II. That the manufacture of armor plates for the Government was not an infringement of the patent is not a defense which can be set up by the Government under the former decisions of this and the Supreme Court. The Government having received the benefit of the process under its contract with the claimant, is liable to the claimant therefor.
III. Where the action is upon the contract between a patentee and the Government, by the terms of which the Government becomes expressly liable for royalties where the patented process is used in the manufacture of armor plates for one of its vessels, it can not compel the patentee to look for payment to the manufacturer who erñployed the process.
IY. The court reiterates the principle formally announced in its de-cesion in the previous case that where by the terms of the contract the defendants are entitled to a disclosure of the inventor’s process and to his instructions and assistance in the practical application of the invention in whole or in part, deviations therefrom can not be set up as a defense.
The Reporter’s statement of the case:
The following are the facts of the case as found by the court:
I. The Harvey Steel Company, claimant herein, is now, and at all times since the year 1887 has been, a corporation created, organized, and existing under the laws of the State of New Jersey.
The Midvale Steel Company, the intervenor herein, is a corporation organized under the laws of the State of Pennsylvania, and has its principal place-of business and works at Nicetown, in the city of Philadelphia, Pa.
II. The proceedings and findings of fact in the prior case between said Harvey Steel Company and the United States, No. 21110, and by reference made a part hereof, are set forth in 38 Court of Claims, pages 664 to 689, wherein on the construction of the same contract judgment was rendered in favor of said Harvey Steel Company in the sum of $60,806.45, which on appeal to the Supreme Court was affirmed. (196 U. S., 310.)
Subsequently findings of substantially the same character were filed in case No. 25267 for royalties under the same contract, and judgment, without opinion, was rendered in favor of the claimant in the sum of $650,132.17, from which no appeal was taken.
III. The “ Harvey process ” mentioned in the contract of April 12, 1893, as defined and set forth in Letters Patent No. 460262, is as follows:
“1. The herein-described method of producing a decre-mentally hardened tenacious armor plate, which consists of inclosing a low steel plate between a mass of noncarbonaceous material on one side and a mass of granular carbonaceous material firmly packed upon the other side, contained in a compartment formed within the heating chamber of a suitable furnace, and in maintaining the said heating chamber for a predetermined period “of time at a temperature above the melting point of cast iron, and in subsequently chilling said plate, whereby a stratum of steel of prescribed thickness upon the side of the plate against which said carbonaceous material has been pressed is made to acquire a heterogeneous crystalline structure and a condition of excessive hardness upon its exposed surface and a condition of gradually diminishing hardness as the depth from said surface increases.”
The Harvey process actually used was as follows: The scaled plate was covered by carbonaceous material, either by putting the carbonaceous material on the bottom of the furnace and placing the plate thereon with the scaled side down or by placing the carbonaceous material on the plate and using another plate on top of it to insure contact. The plates were then placed in the furnace and the side which was not to be carbonized was protected, at first, by sand. Later the bottom plate was placed on transverse brick piers of the movable furnace with the scaled side up; a frame of angles was then placed on the scaled side of the plate. The space was then filled with carbonaceous material, well packed and raised about an inch above the height of the angle. Another plate was then placed on top of this structure with the scaled side down toward the carbonaceous material. The car was then run into the furnace and the fire started.
The noncarbonaceous material actually used in the “ Harvey process” consisted of sand packed at the back of the plate to protect the same from the carbonaceous material and excessive heat, of which the Government was advised by the patentee by an exhibition of the process with the use of sand prior to the contract of April 12, 1893.
The use of sand was gradually discontinued, because the same result could be accomplished without it, and some of the companies manufacturing plates were so advised late in 1893. Since 1904 no sand or other noncarbonaceous material has been used by the Carnegie and Bethlehem companies manufacturing armor plate.
The process used by the Midvale Steel Company in the manufacture and production of armor plate was as follows: The plate to be carbonized was mounted, face up, on brick piers about 18 inches high resting on the car bottom, about 1 foot apart. A row of bricks, 2 high, was then placed around the plate and the carbonizing material was put inside of these bricks on the face of the plate and raised about three-fourths of an inch above the bricks. Mortar was edged up on the second bricks. Then the second plate was placed on the carbonizing material, face down. The plates were then run into the furnace and the fire started.
The brick bos containing the carbonaceous material prevented the same from reaching the back and sides of the plates, thus accomplishing the same result as with the sand which was used to protect the back of the plate from the carbonaceous material and excessive heat as aforesaid.
IV. By an act approved on or about March 3, 1903, Congress authorized the construction of five battleships for the United States Navy, which were known, respectively, as Nos. 20, 21, 22, 23, and 24, and subsequently named the Vermont, Minnesota., Kansas, Mississippi, and Idaho.
On or about August 3, 1903, the United States, by the Acting Secretary of the Navy, issued an advertisement and circular inviting proposals for the supply of armor plates for said battleships, said advertisement and circular stating to the bidders, among other things, the following:
“ Bids are invited for supplying the following-named materials: About 14,410 tons, more or less, of improved face-hardened armor, to be of the best material and of domestic manufacture, treated, as shown by the specifications, by a process of face hardening approved by the department and applied to plates of 5 inches and more in thickness, to be designated as class ‘A’; about 1,360 tons of the best face-hardened armor, treated by the so-called Harvey process or by such process as may be approved by the department and applied to plates to be face hardened, of a thickness of less than 5 inches, designated as class ‘ B
The Midvale Steel Company, by proposals dated on or about October 1, 1903, proposed and agreed to furnish to the United States the said armor plate called for in and in ac cordance with said circular and advertisement of August 3, 1903, and upon the terms and conditions stated therein.
Y. In pursuance of and in accordance with the said advertisement, circular, and proposals, and on or about December 15, 1903, the United States, by its Secretary of the Navy, made and entered into a written contract with the said Mid-vale Steel Company, in which the latter agreed to manufacture and deliver to the Navy Department of the United States, in accordance with the terms and conditions of the contract, 5,336 tons, more or less, of the best and most resisting quality of said Class A armor, to be manufactured, carbonized face-hardened, and treated by the most approved method, and by a process satisfactory to and approved by the Navy Department, and 478 tons of the best and most resisting quality of Class B armor, to be manufactured, carbonized treated, and face-hardened by a process satisfactory to and approved by the Navy Department, the said contract providing, among other things, as follows:
“ Should the party of the first part desire to make use of the so-called ‘ Harvey process ’ in the manufacture of armor under this contract, the party of the second part hereby authorizes the party of the first part to use said process under the license guaranteed to the United States by the Harvey Steel Company of New Jersey, dated April 12,1893; and the party of the second part hereby agrees to assume, and does assume, responsibility for royalty that may become due to the Harvey Steel Company of New Jersey for the use of the said process in the manfacture of armor under this contract by the party of the first part to the extent of the royalty specir fied in’ said license authorizing said party of the second part to use said process, namely, one-half of 1 cent a pound ($11.20 a ton) : Provided, That if said party of the second part pays the aforesaid royalty of one-half of 1 cent a pound ($11.20 a ton) for the use of the ‘Harvey process’ by the party of the first part in connection with the manufacture of any armor under this contract, an equal amount shall be deducted by the party of the second part from the price to be paid to the party of the first part, specified in clauses (a) and (5) of clause first of this contract.”
The circular and specifications of the Navy Department, which form a part of the contract, gave the right to the Government to keep inspectors at the works of the Midvale Steel Company, and to have full access to all parts of such works where the manufacture of the armor was carried on as Avell as the right to witness all “ the processes of manufacture, and to examine the contractor’s records with reference to such matters.” In addition, the circular and specifications provide that—
“A written statement of the work and the contractors’ tests to be commenced and in progress each day must be furnished to the chief inspector, and at such times as will allow him to witness the various treatments, should ho so desire.”
The contract itself further provides:
“When all the plates of a group of armor are forged and ready for carbonizing, the first payment therefor of 30 per cent of the contract price of the armor constituting such group shall be made; a second payment of 30 per cent of the contract price of the group shall be made when all of the plates constituting said group are carbonized and face hardened. * * *
“ Tenth. The party of the first part, in consideration of the premises, hereby covenants and agrees to hold and save the United States harmless from and against all and every demand or demands of any nature or kind'for or on account of the adoption of any plan, model, design, or suggestion, or for or on account of the use of any patented invention, article, process, or appliance that has been or may be adopted or used by the party of the first part, in or about the manufacture or production of said armor plates and appurtenances, or any part thereof, under this contract, except the so-called ‘ Harvey process ’ and the use of nickel as an alloy, as hereinbefore provided, and to protect and discharge the Government from all liability on account thereof or on account of the use thereof by proper releases from patentees or otherwise, and to the satisfaction of the Secretary of the Navy.
“4. No payment shall be made except upon bills in quadruplicate, certified by the inspectors in such manner as shall be directed by the Secretary of the Navy, whose final approval of all" bills thus certified shall be necessary before payment thereof.”
Payments have been made in accordance with said provision by the United States to the Midvale Steel Company, and no deductions were made from said payments on accoimt of royalties provided for by the contract of April 12, 1893, between the Harvey Steel Company and the United States.
VI. The weights of the finished plates of said armor of Classes A and B and ballistic plates manufactured for the United States and delivered to it by the Midvale Steel Company, and paid for and accepted by the United States, in each year from the beginning of said manufacture, treatment, and shipment to September 29, 1908, under and in compliance with said contract of December 15, 1903, and the vessels of the United States to which the plates were applied were, according to the United States Navy Department, as follows:
VII. The Congress of the United States, by act approved on or about April 27, 1904, authorized the construction of one battleship and two armored cruisers for the United States Navy. The battleship was known as “battleship No. 25” and the armored cruisers as “Nos. 12 and 13,” respectively. The battleship was afterwards named the New Hampshire and the armored cruisers the North Carolina and the Montana.
On or about the 8th day of December, 1904, the United States, by its Secretary of the Navy, issued an advertisement and circular inviting proposals for the supply of armor plates for said battleship and armored cruisers, said advertisement and circular stating to the bidders, among other things, the following:
“Bids are invited for supplying the following-named materials: About 3,700 tons, more or less, of improved face-hardened armor, to be of the best material and of domestic manufacture, treated, as' shown by the specifications, by a process of face hardening approved by the department and applied to plates of more than 5 inches in thickness, to he designated as Class £A’; and about 3,700 tons of the best face-hardened armor, treated by the so-called Harvey process or by such process as may be approved by the department and applied to plates to be face-hardened, of a thickness of 5 inches and less, designated as Class £ B.’ ”
The said Midvale Steel Company, by proposals dated on or about January 11,1905, proposed and agreed to furnish to the United States the said armor plate called for in, and in accordance with, .the said circular and advertisement of December 8, 1904, and upon the conditions and terms stated therein.
"VIII. In pursuance of and in accordance with said advertisement, circular, and proposals, and on or about the 5th day of April, 1905, the United States, by its Secretary of the Navy, made and entered into a written contract with the said Midvale Steel Company, in which the latter agreed to manufacture and deliver to the Navy Department of the United States, in accordance with the terms and conditions of the contract, 703 tons, more or less, of the best and most resisting quality of Class A armor, to be manufactured, carbonized, face-hardened, and treated by the most improved method, by a process satisfactory to and approved by the Navy Department; and 208 tons, more or less, of the best and most resisting quality of Class B armor, to be manufactured, carbonized, treated, and face-hardened by a process satisfactory to and approved by the Navy Department. The circulars and specification of this contract also contained ju’ovisions as to right of the Government to Avitness all processes of making the armor, similar to the provisions of the contract of December 15, 1903.
The contract itself further provides:
“ When all the plates of a group of armor are forged and ready for carbonizing, the first payment therefor of 30 per cent of the contract price of the armor constituting such group shall be made; a second payment of 30 per cent of the contract price of the group shall be made when all of the plates constituting said group are carbonized and face-hardened. * * *
“4. No payment shall be made except upon bills in quadruplicate certified by the inspectors in such manner as shall
be directed by the Secretary of the Navy, whose final approval of all bills thus certified shall be necessary before payment thereof.”
Payments have been made in accordance with said provision by the United States to the Midvale Steel Company.
IX. The weights Classes A and B and ballistic plates manufactured for the United States and delivered to it by the Midvale Steel Company, and paid for and accepted by the United States, in each year from the beginning of said manufacture, treatment, and shipment to September 29, 1908, under and in compliance with said contract of April 5, 1905, and the vessels of the United States Navy to which the plates were applied were, according to the United States Navy Department, as follows:
X. The Congress of the United States, by an act approved on or about March 3,1905, authorized the construction of two battleships known as battleships Nos 26 and 27 and subsequently named the Michigan and the South Carolina, respectively.
Subsequently the Navy, issued an advertisement inviting proposals for the supply of armor for said battleships, and a circular and specification dated on or about March 21, 1906, concerning said armor plate.
The about the 10th day of July, 1906, proposed and agreed to furnish to the United States in accordance with the said advertisement and said circular and specifications, 7,024 tons of Class A armor plate and 10 tons of Class B armor plate for said battleships Nos. 26 and 27.
XI. In pursuance of and in accordance with said advertisement and said circular and specifications, on of about the 6th day of August, 1906, the United States, by its Secretary of the Navy, made and entered into a written contract with the said Midvale Steel Company, in which the latter agreed to manufacture and deliver to the Navy Department of the United States, in accordance with the terms and conditions of the contract, 3,514 tons, more or less, of the best and most-resisting quality of Class A armor, manufactured, treated, carbonized, and face-hardened by the most improved method by a process satisfactory to and approved by the Navy Department, and 5 tons, more or less, of the best and most-resisting quality of Class B armor, to be manufactured, treated, carbonized, and face-hardened by a process satisfactory to and approved by the Navy Department. The circulars and specification of this contract also gave the Government the said right of inspection of the armor processes of the Midvale Steel Company used in manufacturing the armor.
The contract further provides:
“ When all the plates of a group of armor are forged and ready for carbonizing, the first payment therefor of thirty per cent of the contract price of the armor constituting such group shall be made; a second payment of thirty per cent of the contract price of the group shall be made when all the plates constituting said group are carbonized and face hardened. * * *
“ 4. No payment shall be made except upon bills in quadruplicate certified by the inspectors in such manner as shall be directed by the Secretary of the Navy, whose final approval of all bills thus certified shall be necessary before payment thereof.”
Payments have been made in accordance with said provision by the United States to the Midvale Steel Company.
XII. The weights of the finished plates of’ said armor of Classes A and B manufactured for the United States and delivered to it by the Midvale Steel Company, and paid for and accepted by the United States in each year from the beginning of said manufacture, treatment, and shipment to September 29, 1908, under and in compliance with said contract of August 6, 1906, and the vessels of the United States Navy to which the plates were applied, were, according to the United States Navy Department, as follows:
XIII. On or about August 29, 1901, the United States, by its Acting Secretary of the Navy, made and entered into a written contract with the said Midvale Steel Company, in which the latter agreed to manufacture and deliver to the Navy Department of the United States, in accordance with the terms and conditions of the contract, 1,871 tons, more or less, of the best and most resisting quality of said Class A armor, “manufactured by the most improved method byrn process satisfactory to and approved by” the Navy Department, and 227 tons, more or less, of the best and most resisting quality of Class B armor, “to be manufactured by a process satisfactory to and approved by ” the Navy Department, for battleships Nos. 28 and 29, or such other ships as may be selected by the Navy Department.
XIV. The weights of the finished plates of armor Classes A and B, manufactured for the United States, and delivered to it by the Midvale Steel Company, and paid for and accepted by the United States, in each year from the beginning of such manufacture, treatment, and delivery, to September 29, 1908, under and in compliance with said contract of August 29,1907, and the vessels of the United States Navy to which the plates were applied, were, according to the United States Navy Department, as follows:
Payments for all armor covered by the contract of August 29, 1907, have been made to the Midvale Steel Company except the final reservation, amounting to $15,123.10, which is withheld until expiration of the required period after emplacement of the last plate on the ship.
Each of said contracts of April 5, 1905, August 6, 1906, and August 29, 1907, between the Midvale Steel Company and the United States contains the following provision:
“ The party of the first part, in consideration of the premises, hereby covenants and agrees to hold and save the United States harmless from and against all and every demand or demands of any nature or kind for or on account of the adoption of any plan, model, design, or suggestion, or for or on account of the use of any patented invention, article, process, or appliance which has been or may be adopted or used by the party of the first part, in or about the manufacture or production of said armor plates and appurtenances, or any part thereof, under this contract, and to protect and discharge the Government from all liability on account thereof or on account of the use thereof by proper releases from patentees or otherwise, and to the satisfaction of the Secretary of the Navy.”
XV. In the manufacture and production of said classes A and B armor plate as aforesaid, the Midvale Steel Company, under their contracts of December 15, 1903, April 5, 1905, August 6, 1906, and August 29, 1907, did not use sand or any other noncarbonaceous material to protect the back of the plate in the carbonization or supercarbonization of said plates.
In all other respects said Midvale Steel Company used the steps designated in the Harvey Patent No. 460,262, known as the “Harvey process,” of said contract of April 12, 1893, between the claimant herein and the United States, and as communicated at various times by claimant to the officers and agents of the United States and as actually used under the inspection, supervision, and with the approval of said officers and agents; and the face-hardening process so used by the Midvale Steel Company was substantially the same as the “ Harvey process ” hereinbefore described, and the same result was accomplished without the use of sand or other noncarbonaceous material.
XYI. On June 9, 1906, the Harvey Steel Company addressed a letter to the Navy Department, Washington, D. C., setting' up the claim that the Midvale Steel Company was using the “Harvey process” in the manufacture of armor plate for naval vessels under the contracts between the Mid-vale Steel Company and the United States then in force, and that the United States were obligated by their contract of April 12,1893, to pay royalties to said Harvey Steel Company on said armor plate. This letter was referred to the Midvale Steel Company for a statement as to the facts in relation to whether or not it was using the “Harvey process ” in the manufacture of said armor plate, and to it the Midvale Steel Company replied, June 25, 1906, in effect that it was not using the “Harvey process,” nor anything that could be construed as the “ Harvey process.” This letter, or a copy thereof, was transmitted to Messrs. Betts, Sheffield & Betts, attorneys for the Harvey Steel Company on June 27, 1906, and the original petition herein was filed December 3, 1906.
XVII. The total weight of the finished plates of said armor so manufactured, treated, carbonized, and face-hardened by the “ Harvey process ” and delivered to the United States by the said Midvale Steel Company and paid for and applied by the United States to the said vessels of its Navy up to September 28, 1908, under said contracts of December 15, 1903, April 5,1905, August 6,1906, and August 27,1907, amounts to 9,049.11 tons, or 20,207,006 pounds, which, at a royalty of one-half of 1 cent per pound, or $11.20 per ton, for the finished plate amounts to the sum of $101,350.03.
The claimant has applied to the United States and the Secretary of the Navy for the payment of said royalty, which has been refused.
XVIII. The total weight of finished plates of said, armor so manufactured, treated, carbonized, and face-hardened by the “ Harvey process ” under said contract of August 6,1906, up to September 28, 1908, but delivered to and accepted by the United States after said last-named date by the Midvale Steel Company, and applied by the United States to vessels of its Navy, amounts to 909.99 tons or 2,038,377 pounds, which, at a royalty of one-half of 1 cent per pound, or $11.20 ■per ton, for the finished plate, amounts to the sum of $10,191.88.
XIX. The total weight of finished plates of said armor so manufactured, treated, carbonized, and face-hardened by the “Harvey process” under said contract of August 29, 1907, up to September 28, 1908, but delivered to and accepted by the United States after said last-named date by the Midvale Steel Company and applied by the United States to vessels of its Navy, amounts to 1,064.76 tons or 2,385,063 pounds, which, at a royalty of one-half of 1 cent per pound, or $11.20 per ton, for the finished plate, amounts to the sum of $11,925.32.
Claimant has applied to the United States and the Secretary of the Navy for the payment of said royalties, which has been refused.
C0NCLTJSI0N OE EACT.
Upon the foregoing findings of fact the court finds the ultimate fact, so far as it is a question of fact, that the Midvale Steel Company in the manufacture of armor plate for the Government used substantially the Harvey process covered by said contract of April 12, 1893, as defined in the patent.
Mr. James B. Sheffield for the claimant. Messrs. Betts, Sheffield, Bentley, and Betts, and Mr. James J. Cosgrove were on the brief.
Mr. George J. Harding for the Midvale Steel Company intervening. Mr. A. H. Wintersteen, Mr. Frederick D. Mc-Kenney, and Mr. Frank S. Busser were on the brief.
Mr. Philip M. Ashford (with whom was Mr. Assistant Attorney General John Q. Thompson) for the defendants.

Opinion:
Peelle, Ch. J.,
delivered the opinion of the court:
This is a claim for royalties under an express contract by the Harvey Steel Company with the United States for the use of what is known as the " Harvey process " in hardening armor plate. The reasoning, arguments, and conclu sions of the court in tbe case between the same parties involving the construction of the same contract, Avherein judgment was rendered in favor of the claimant in a former suit (38 C. Cls., 662, 681), which judgment on appeal was affirmed by the Supreme Court (196 U. S., 310, 313), apply in the present case, and hence little need be said.
In the present case the contention of the defendants and the intervenor is that in the hardening or Harvey process referred to, one of the elements required was the use of sand, a noncarbonaceous material packed in the back of the plates, and that if not so used it can not be contended that the Harvey process was applied by the Midvale Steel Company in the process which it used in hardening the plates under its several contracts with the United States, though in other respects it concedes that the Harvey process was substantially used. Its contention is that it did not use sand. That is to say, that it accomplished the same result without, as had been accomplished with sand; and it may be added that the same result was accomplished without the use of any non-carbonaceous material in the back of the plates by confining the carbonaceous material within the brick box, as set forth in the findings.
The only difference, therefore, between the cases which heretofore went to judgment (one of which was affirmed by the Supreme Court) and the present case is that in the former suits sand was used in the back of the plates, and the question is, Shall this technical change defeat the right of recovery in this case ? We say technical, because the use of sand was not, as a matter of fact, essential to the Harvey process of carbonizing armor plate.
In the first contract, ref erred to in the findings with the Midvale Steel Company the Government gave the company the option of using the Harvey process or any other hardening process which might be satisfactory to the United States; and in the subsequent contracts, as disclosed by the findings, the hardening process was simply .to be satisfactory to the United States, but, as a matter of fact, under all the contracts referred to the Harvey process was used except in the elimination of sand in the back of the plates. As disclosed in the former case (38 C. Cls., 684), contracts were entered into with the Bethlehem Iron Company and the Carnegie Steel Company, and the plates manufactured by those companies were received by the officers of the Ordnance Bureau of the Navy Department and paid for " as armor treated by the Harvey process," and, as was said in that case (p. 685)—
" When the armor plates manufactured by the Bethlehem and Carnegie companies were completed, and delivered, and accepted, and paid for, the claimant's cause of action certainly was complete. At that time the process was as satisfactory to the Secretary of the Navy as it ever had been. No' rival inventor had appeared claiming that it was an infringement of another patent; no court had decided that the patentee ' was not legally entitled ' to own and contract the exclusive right to the use of the process; no suit was pending on the lYth of November, 1891, when the claimant demanded payment, in which the validity of the patent was in issue. The royalty was due and payable then. The defendants had no defense to interpose at that time, and they can not interpose one of their own subsequent making now.
"A plainer case of estoppel never came before a court. The defendants first bound the claimant's hands by a contract which secured the right to themselves to use the invention and precluded the claimant from prosecuting the manufacturers as infringers. They next closed the claimant's eyes as against the manufacturers by advertising that the plates to be made were to be treated by the 4Harvey process,' and that 'the prices bid for armor treated by the Harvey process must not include anything for royalties, as the department has acquired the right to use said process, and will indemnify the contractor against all claims therefor.' They did not rescind the contract or give a notice which would have put the claimant on its guard, or enabled it to proceed against the manufacturers, but stood silent until the work was done and they had received the fruits of their agreement. Having received every possible benefit that was assured to them by the contract, they now seek to evade its obligations. Their position is that of a man who, to avoid the dangers and costs of an action in trespass or ejectment, enters under a lease and then seeks to evade the payment of rent by assuming the attitude of a wrongdoer and denying his landlord's title."
Furthermore, as was said in that case (p. 686)—
" The same principle applies to the defense that the armor plates were not manufactured according to the Harvey process, as defined and limited in the patent. The claimant had brought the process to the defendants before it was patented, and they have never been able to obtain the desirable plate except by the use of the process, patented or unpatented. The variations from the patent, if any there were, were trivial— so trivial that they were not known to the manufacturers when they made the plates, or to the defendants' officers who supervised the making. They were not discovered by the Ordnance Bureau until after the first work was completed, but they were known to the bureau when the last work, the work involved in the case, was contracted for, as plates to be manufactured by the Harvey process and under the Harvey patent and in pursuance of the Harvey contract. The variations from the patented process, if substantial, would have practically stricken down the patent and.left the invention valueless. There was but one way in which that issue could be properly tried, and that was by an action for infringement. "
patent or the exceedingly restricted construction which the defendants seek to place upon it constitute a failure of consideration, it must be replied that the agreement itself contains a complete refutation of that defense. In a word, this is a case where a man without fraud or misrepresentation entered into a contract; where he received from the other party all that the contract promised him or that he expected to receive; where he kept his mouth closed when he should have spoken, and withheld a defense when he should have interposed it; where, by his silence and his words, he misled the other contracting party and thereby deprived him of his legal right to the adjudication of courts of competent jurisdiction, which adjudication might be favorable to the other party and cause irreparable loss and injury to himself. Such a man is not entitled to set up in an action on the contract the defenses which the defendants' executive officers have insisted on interposing in this case."
What was there said by this court in the former suit is equally applicable in the present case.
The Supreme Court on appeal, in affirming the judgment of this court (196 U. S., 310, 318), reviews the experiments by the Navy Department as to the value of the process and the several contracts entered into giving the Navy Department the option of purchasing the process upon the payment of a fixed sum for all vessels authorized by Congress up to and including July 19, 1892, and a half a cent a pound on all vessels authorized thereafter, the United States being held harmless from further claims and demands on account of alleged infringement of patented rights appertaining to said process and to furnish full information regarding the composition and application of all improvements which it might make upon said process.
The right to the use of the process was given to the Government, and in response to the contention and defense that the patent was invalid, and for that reason the claimant company was not entitled to receive royalty thereunder, the Supreme Court (p. 316) said:
"The argument is put mainly on the construction of the clause quoted, coupled with the further agreement that the United States ought not to be estopped as licensee to deny the validity of the patent because it is not a vendor but simply a user of the patented article, and therefore has not enjoyed the advantage of a practical monopoly, as a seller might have enjoyed it even if the patent turned out to be bad. This distinction between sale and use, even for a noncompetitive purpose, does not impress us. So far as the practical advantage secured is matter for consideration, whether a thing made under a patent supposed to be valid is used or sold, it equally may be assumed that the thing would not have been used or sold but for the license from the patentee. We regard the clause in the contract as the measure of the appellant's rights. It is argued that the agreement was only to pay for the use of the process covered by the patent named, and that if the meaning of the parties was to cover anything broader than the patent, even what was known in their speech as the Harvey process, that meaning could be imported into the contract only by reformation, not by construction of the contract as it stands. But we are of opinion that this defense also must fail. In the first place, it is not fully open on the record. The findings asked had a different bearing. All that were asked might have been made without necessitating a judgment for the United States as matter of law and the court believed that the difference between patent and process was trivial. But we should hesitate to admit the defense in any event. The argument is that at the time of the contract it was supposed that the heat required for the process was greater than that actually used, that the patent was valid only for a process with the greater heat, and that the contract covers no more than the patent. But the fact that the parties assumed that the process used and intended to be used was covered by the patent works both ways. It shows that they thought and meant that the agreement covered and should cover the process actually used. We think that this can be gathered from the agreement itself apart from the mere supposition of the parties.
a process process.' It imported the speech of the parties and the common speech of the time into the description of the subject matter. The words Harvey process commonly are put in quotation marks in the first contract, thus emphasizing the adoption of common speech. They mean the. process actually used. The contract states that it is dealing with the same thing that had been the subject of the former agreement. That agreement further identified that subject as a process which was tested at the naval ordnance proving ground. It also identified it, it is true, as a patented process, but if the incompatibility of the two marks is more than trivial, as it was regarded by the court which found the facts with which we have to deal, the identification by personal familiarity and by common speech is more pungent ánd immediate than that by reference to a document couched in technical terms, which the very argument for the United States declares not to have been understood. It is like a reference to monuments in a deed. As we have said, this identification by personal experiment and by common speech is carried forward into the contract in suit. The latter contract manifests on its face that it is dealing with a process actually in use, which requires the communication of practical knowledge and which further experience may improve."
Did the Midvale Steel Company use the Harvey process; and if not, what process did it use? It is conceded that, eliminating sand, the Harve3r process was used. Sand was not mentioned in the patent as one of the essential elements except as covered by the term " noncarbonaceous material," though it is true in illustrating the value of -the Harvey process to the officers of the Government prior to the contract of April 12,1893, sand was used; but, as the findings disclose, any other noncarbonaceous material would have accomplished the same result, though not essential, unless made so by the terms of' the patent. That the same result was accomplished without sand by the Midvale Steel Company is established in this case. Shall this technical variation defeat a recovery? We think not. Of course the defense of infringement or tort is not available to the United States, since by express contract it had the right to the use of the process on any of its vessels, by whomsoever manufactured; and even if we were to assume that the use of the process by the Midvale Steel Company under any of its contracts with the Government was ah infringement it would not avail the Government, since it received the benefit of the process on the vessel so manufactured, and tinder its contract of license is liable to the claimant company therefor, and that, too, with a right of action over against the Midvalle Steel Company for reimbursement. The Government having received the benefit of the process on its vessels under its license can not compel the claimant company to look to the Midvale Steel Company for payment or other redress.
We can not consent that the abandonment of sand — which, as a matter of fact, is not material in the process of carbonizing the armor plate — entitles the Midvale Steel Company to the rights of the claimant as against the Government in the royalties, or any part thereof, when by express contract the Government had agreed to pay the claimant company for the use of the process on all of its vessels by whomsoever manufactured, and by the terms of its contract had informed the Government of its method and process, and afterwards advised the Government, through the manufacturers of such armor plate, that sand might be discontinued, which was presumably known to the Midvale Steel Company.
As was said by the' court in this case on the motion for a new trial (39 C. Cls., 297, 299), " In the opinion of the court, the contract entitled the defendants to a disclosure of the inventor's process, to his instructions and assistance in the practical application of the patent, and to use the process, little or much, in whole or in part; " and, further, that as the defendants have received all they bargained for, they " are not entitled to set up their deviations, if any, from the specifications of the patent as a defense."
In view of the prior adjudications of the Supreme Court and of this court upon which we rest the right of recovery, as hereinbefore stated, we deem it unnecessary to pursue the case further, nor do we deem it necessary to review and discuss the authorities cited by counsel respecting the use and infringement of other patents, as the present case must stand or fall on the prior decisions of this and the Supreme Court, as we have said. The rendition of judgment, however, will be suspended until the extent of the amendment to the petition has been determined.
Order for entering judgment May 1, 1911.
The amended petition having been filed respecting the amount of armor plate treated «and delivered, a s shown by the returns from the Navy Department, and the handing down of this opinion having been withheld therefor, the court now orders that judgment be entered in the claimant's favor on the findings in the sum of $123,467.23.
The intervening petition as to the Midvale Steel Company is dismissed.