Court Opinion

ID: 8796201
Source: CourtListenerOpinion
Date Created: 2022-11-26 14:12:01.228272+00
Date Added: 2024-06-11T17:03:38.648068
License: Public Domain

COXF,, Circuit Judge.
Clause 19 of the contract of November 22, 1905, which became clause 20 in the contract of June 12, 1912, is the clause out of which the controversy between the parties principally arises. The contract provides that the Bliss Company will make and deliver at Newport, R. I., 300 torpedoes of the Bliss-Reavitt 5-meter 12-inch mark 1 type. The manufacture of these torpedoes is to conform to plans and specifications annexed to the contract and the work is to be done and the materials are to be furnished under the supervision of inspectors appointed by the Secretary of the Navy. When completed, the torpedoes are to be tested and need not be accepted by the government unless they comply with all the requirements of the specification. Clause 19 also provides that the Bliss Company will not *330make use of any device the design for which is furnished by the United States, represented by the Bureau of Ordnance, in any torpedo constructed for persons or governments, other than the United States. This clause further provides that the Bliss Company will not exhibit, describe or give information in regard to such' devices to any firms, corporations or governments other than the United States. The Bliss Company agrees that it will not exhibit any torpedo containing such device to any governments,- or to their representatives, other than the United States. In case of the breach of these provisions by the Bliss Company the United States shall be at liberty to cancel the contract and proceed with the manufacture of torpedoes contracted for in the agreement, including all improvements, without the payment of royalty, license fee or other charge on account of the use therein of any models, designs, devices, appliances or other features invented and communicated to the Bliss Company by the United States or its agents. The clause further provides that in the case of a breach by the Bliss Company, all torpedoes with the designs, drawings, patterns, models and prepared material therefor, on account - of which payment in any amount shall have been made, shall become the property of the United States. Clause 19 concludes as follows :
“Provided- furthermore, that no device or design shall he considered as coming within the provisions of this clause unless the party of the second part shall state to the party of the first part in -writing, at the time when said device or design is itself conveyed to the party of the first part by written communication from the party of the second part, that the party of the second part considers that the said device or design is embraced within the provisions of this clause.”
In 1912 another contract was made between the parties for the manufacture of one hundred and twenty additional torpedoes of the same type, in which it is stated that the torpedoes are to conform in all respects to the drawings referred to which are not annexed to the contract for the reason that:
“They contain information of a confidential character that cannot be made public without detriment to the government’s and the contractor’s interests, and they are to be treated as confidential by the parties to this contract, it being understood, however, that nothing in this clause shall be construed as depriving the party of the first part of the right to make and sell such torpedoes to any other party or government whatsoever, except as limited by clause twentieth of this contract.”
The bill alleges that the feature of the balanced turbine was invented by the officers composing the Bureau of Ordnance in 1906-07 and due notice thereof under clause 19 was given to the defendant; that in like manner the complainant gave notice, through its agents, of changes in the vertical rudder, the method of starting the torpedo, in the engines, the fire gyro, the independent spin, the ball bearings of. gyro and compound regulation of the air.
This case illustrates the importance of a great government like the United States having a manufactory of its own for the manufacture of torpedoes and other implements of war which are improved and changed from time to time by the addition of ingenious mechanism which should clearly be kept secret, unless our enemies are to profit *331equally with ourselves in every improvement which the ingenuity of our army and navy officers may suggest. The futility of attempting by agreement to give to an outside contractor the benefit of such improve-incuts as he may suggest while keeping secret other improvements in the same machine devised by officers of the navy and their assistants, is demonstrated by the testimony in the case at bar. How is it possible for the Bliss Company to make- public their own improvements and suggestions, in the construction of a given type of torpedo, and at the same time keep secret the suggestions and improvements made by the officers of the navy and their assistants? The defendant insists that all of the improvements in controversy were suggested and embodied in working models by it or its employés. Mr. Reavitt, defendant’s chief engineer, testifies that the defendant got no assistance whatever from the government officials and that though they made many suggestions, not a single one was adopted by the Bliss Company. On the other hand, the government insists that all of the improvements now in controversy were the result of the experiments made by the Bureau of Ordnance of the United States Navy.
Stated concretely the question now to he considered is whether or not the Bliss Company has a right to exhibit and sell to the representatives of foreign nations the so-called Bliss-Jbeavitt torpedo. We think it is clear 1hat it cannot do so. The language of the nineteenth clause is explicit and its purpose is obvious, viz., to keep secret the construction of any torpedo which contains a device the design for which is furnished by the United States or its agents and to bind the defendant not to disclose the performance of any torpedo containing such device to any ope other than the United States. The contract should be construed in view of what must have been the intention of the United States. She was not engaged in procuring a perfected torpedo for the benefit of foreign nations. Her officers and experts were endeavoring to secure some device which was better than those possessed by foreign nations. That she should wish her experiments kept secret is- too obvious for argument. Indeed, it might almost be inferred without specific provisions. The contention of the defendant is very qlearly stated in the letter of May 9, 1913, in which it says:
“We have repeatedly insisted that said article of the contract (20) did not apply for the protection o-f any principle, but merely to ‘any device the design for which was furnished for us by the government’; that the specific design furnished has been and will be kept a secret; that the ‘principle’ having been made public by the grant by the government of a patent for it, which patent the government afterwards purchased, the ‘principle’ of the balanced turbine is no longer a confidential matter and we cannot bo held to a secrecy which the government has itself waived.”
We think this takes too narrow and superficial a view of the matter and if followed will leave the government practically remediless unless she makes her munitions of war in her own factories. It is true that the contents of the Davison patent were made public when the patent was issued, but the government purchased it and no one can use its disclosures without infringing unless he has obtained a license so to do. “A principle” is not the subject of a patent except through the instrumentalities by which the principle is carried out. No one can *332secure a patent for the principle of striking the enemy’s ship under water with a loaded torpedo. As the means disclosed by Davison’s patent belong to the complainant, it is not easy to see what rights the defendant acquired by the granting of the Davison patent. If it owned the patent or if it were licensed under it, a different question would arise, hut being, in a sense, the confidential agent of the government in the making of torpedoes, it acquired-no rights adverse to those of the government. We fail to see how the defendant has acquired a right to do what it promised it would not do because a patent has been issued which makes public some of the methods and devices used in the manufacture of the Bliss-Leavitt torpedo. In this connection it is interesting to note that the defendant agreed with this view in December, 1-912, when it wrote to the Bureau that the publication of the patents in no way prevented the real construction of _ the fundamental parts of the torpedo from being kept secret.
There can be no doubt, we- think, that thé balanced turbine was the invention of Lieutenant Commander Davison, acting for the United States, and that the government did not lose the benefits of the invention because the patent subsequently issued in his name, and assigned to the government, “disclosed” the invention to the world. Certainly the fact that foreign patents were issued which were subsequently purchased by the defendant did not give the defendant the right to make, use or sell the patented structure in this country without the license' of the owner of the patent.
The contract of June 12, 1912, provides that the drawings, plans and specifications used by the defendant in making the government torpedoes should not he disclosed to any one. Although the Bliss Company might sell torpedoes to other nations and individuals it could not sell such torpedoes if they contained a device designed by the government, acting through its officers and experts.
Throughout the entire record, in the contracts, correspondence and dealings of the parties, the importance of secrecy is everywhere manifest. The nature of the services rendered was such that secrecy might almost be implied. It is difficult to imagine a nation giving to one of its citizens contracts to manufacture implements necessary to the national defense and permitting that citizen to disclose the construction' of such implement or sell it to another nation. The very nature of the service malees the construction urged by the defendant untenable. We are of the opinion, therefore, that the injunction should include all designs, drawings, plans and specifications used by the defendant in making the Bliss-Leavitt torpedo for the government which were approved by the Ordnance Bureau, notice of which was given to the Bliss Company pursuant to the provisions of clauses 19 and 20 of the contracts in question.
The decree should be amended by adding such a provision and, as so amended, it should be affirmed with costs.