Case: A. S. SOLOMONS v. THE UNITED STATES
Abbreviation: Solomons v. United States
Decision Date: 1886-06-07
Docket Number: No. 10697
Citation: 21 Ct. Cl. 479
Volume: 21
Reporter: United States Court of Claims Reports
Court: United States Court of Claims
Jurisdiction: United States
Parties: A. S. SOLOMONS v. THE UNITED STATES.
Judges: Weldon, J., sat in the case, but. was prevented by illness from taking part in the decision.
Pages: 479–484

Head Matter:
A. S. SOLOMONS v. THE UNITED STATES.
[No. 10697.
Decided June 7, 1886.]
On the Proofs.
The Chief of the Bureau of Engraving and Printing is officially assigned to the duty of devising an internal-revenue tax stamp. He perfects the device in the Bureau with the means and appliances of the Government. Subsequently he resigns his office and takes out a patent, which is assigned to the claimant in consideration of antecedent indebtedness. The claimant sends a letter to the Commissioner of Internal Revenue relating to- compensation, but does not forbid the continued use of the device.
I. Where the United States employ their own agent to devise a revenue tax stamp, they bearing the cost of the invention and running the risk of its worthlessness, and making an enormous outlay, with his knowledge and concurrence, to engraft, the invention upon the revenue system, his acts constitute a license to manufacture and use the device, if patented, in the public service, and negative any presumption of an implied contract on the part of the Government to pay a royalty for its use.
II. An assignee of such a patent who acquires it in payment of an antecedent debt and while it is in public use, takes the assignment subject to the license, and by his subsequent silence and inaction will be estopped from maintaining an action to recover a royalty
The Reporters’ statement, of the case :
The following are' the facts so far as they are necessary to present the points decided:
I. In 1867, while the bill which subsequently became the Internal Revenue Act, 20bh July, 1868, was in the hands of the Committee on Ways, and Means of the House of Representatives, a subcommittee was given special charge of the tax on whisky' and distilled spirits. A room was assigned'by the Secretary of the Treasury-, in the Treasury building, to this subcommittee, which immediately’ proceeded to hold official consultations with the Secretary of the Treasury and the Commissioner and Deputy Commissioner of Internal Revenue. Into these consultations Spencer M. Clark, the Chief of the Bureau of Engraving and Printing, was called officially, and to Him was assigned the duty of devising a stamp, and it was early determined and understood by all, including Mr. Clark, that the scheme would proceed upon the assumption that the best stamp which he could devise would be adopted and make a part of the revised scheme. In these consultations it was mutually understood that Mr. Clark was acting' in his official capacity as Chief of the Bureau of Engraving and Printing, and it was not understood or intimated that the stamp which he was to devise would be patented or become his personal property.
II. Pursuant to the consultation, arrangement, and understanding in the first findings set forth, Mr. Clark experimented in the Bureau of Engraving and Printing, with the machinery, implements, materials, and appliances of the Governihent, and at last produced the device for an internal-revenue tax stamp, which is set forth and described in the specifications of the patent annexed to and forming part of these findings. This device was satisfactory to the subcommittee, to the Secretary of the Treasury, and to the Commissioner of Internal Revenue, and it was subsequently adopted as the internal-revenue stamp to be used in the collection of the tax on whisky and distilled spirits, under and in pursuance of the act 20th July, 1868.
III. No bargain, agreement, contract, or understanding was ever entered into or reached between the officers of the Government and Mr. Clark concerning the right of the Government to use the invention, or concerning the remuneration, if any, which should be paid for it. Neither did Mr. Clark give notice or intimate that he intended to protect the same by letters patent, or that he would expect to be paid a royalty if the Government should manufacture and use stamps of his invention. On one occasion his personal right to the device was a subject of conversation between the Commissioner of Internal Revenue and himself, but no common understanding was reached. On the part of the Commissioner it was understood as the pirrport of this conversation that no compensation from the Government would be expected by Mr. Clark, inasmuch as he was employed by the Government and was employing Government implements and machinery in the development of his device; on the part of Mr. Clark it was understood that he should not charge the Government anything so long as he remained in its employment.
V. Mr. Clark continued to hold the office and receive the salary of Chief of the Bureau of Engraving and Printing after the manufacture of stamps therein had begun, and until the 17th November, 1868. On the 6th December, 1869, he assigned his invention to the claimant, the consideration therefor being an antecedent indebtedness due and owing from Clark to the claimant. Un the 27th December, 1869, the claimant addressed to the Commissioner of Internal Revenue the communication of that date (inclosing a copy of the patent), which is hereto annexed.
lAns’d Dec. 31, ’69, Col. Given (B.), Philp & Solomons, Booksellers & Stationers.]
Washington, Dec. 27th, 1869.
Hon. Columbus Delano,
Commissioner of Int. Reverme.
Dr. Sib : I have the, honor to inform you that I am the owner of letters patent No. 98031 which you will see by reference to the enclosed copy covers the stamps now used by your Department on whiskey barrels.
It is of course my interest, as well as my desire, to make an arrangement for a proper compensation for the use of this patent by-your Department, and I should be pleased to have an interview with you for that purpose at your earliest convenience.
Very resp’y yours,
A. S. SOLOMONS.
No other notice or notification relating to these stamps was ever given by the claimant to the defendants, their officers or agents.
VI. Under the new system of internal-revenue taxation established by the act 20th July, 1868, a greatly augmented amount was collected as the tax ou whisky and distilled spirits, and of the new system thereby established the stamp devised by Mr. Clark was an important element; but the changes effected by that statute were so radical that it is impossible to determine what proportion of’the increased revenue was attributable to the stamp of Mr. Clark. The device has no general or market value, and has never been used by any person or corporation other than the Government. The royalty charged by patentees for other devices of a detective character, such as the bell-punch, the passenger-fare enumerator, and the gas-meter, has been shown; but in these cases the instrument or device has been manufactured and furnished by the patentee. Subsequent to the 21st June, 1869, when the claimant’s patent was antedated, there was collected By means of his patented stamp $70,302,654; and the court finds that one twentieth of one per cent, of the amount so collected, to wit, the sum of $35,151.33, would be a reasonable royalty for the use of the device if the claimant be entitled to recover therefor.
And upon the foregoing findings of fact the court decided, as conclusions of law:
(1) The acts of the inventor, Spencer M. Clark, as set forth in the preceding findings constituted a license to the Government authorizing it to manufacture and use the patented device in the service of the Internal Revenue Bureau; and the benefits accruing to the iuventor in being able to develop and perfect his device at the cost of the Government constituted a good and sufficient consideration to support such license.
(2) The claimant amid the circumstances was chargeable, with notice of the license granted by his assignor, the inventor, to the Government, and took the patent subject to that license, and is now estopped by his silence and inaction from maintaining this suit to recover an implied royalty for the use of the patented device.
Mr. Benjamin F. Butler for the claimant.
The Assistant Attorney-General for the defendants.

Opinion:
Nott, J.,
delivered the following opinion:
In the case of Burns (12 Wall., 246) the Supreme Court said : " If an officer in the military service, not specially employed to make experiments with a view to suggest improvements, devises a new and valuable improvement in arms, tents, or any other kind of war material, he is entitled to the benefit of it."
The alternative which the Supreme Court suggested seems to be presented by the present case. Here an officer of the Government in the civil service was " specially employed to make experiments with a view to suggest improvements " in a revenue tax stamp which the Government was to manufacture as well as use; and he moreover was not only specially employed, to make these experiments, but he made them in the Gov ernment's Bureau of Engraving and Printing, of which he was-the chief, and with the tools, implements, machinery, and material of his employers. In other words, the work of the invention was prosecuted and completed exclusively at the cost of the United States.
Can such an officer maintain an action for royalty on the very patent which in the course of his official duty he devised ?
In answering this question I put aside the English doctrine of the right of the Crown to the user of a patented device, and deal with it entirely upon the assumption that a patent right is property, and that the Government can take no kind of property lor public use except under the constitutional condition of making just compensation.
This new form of property, the mind-work of the inventor, though its constitutional existence is now well nigh a century old, is still a novelty in the law. The wisdom of the common law gives neither maxims nor precedents to guide, and the American cases which deal with it, though numerous enough, run in a narrow, statutory groove. Though the most intangible form of property, it still, in many characteristics, is closer in analogy to real than to personal estate. Unlike personal property, it cannot be lost or found; it is not liable to casualty or destruction; it cannot pass by manual delivery. Like real property, it may be disposed of, territorially, by metes or bounds; it has its system of conveyancing by deed and registration ; estates may be created in it, such as for years and in remainder; and the statutory action for infringement bears a. much closer relation to an action of trespass than to an action in trover and replevin. It has, too, what the law of real property has, a system of user by license.
"A license is an authority to do a particular act, or series of acts, upon the land of another, without possessing an estate therein. When executed it will prevent the owner of the land from maintaining an action for the acts done under it; but it. is revocable at pleasure, and will not be a defense for an act done after revocation. A consideration may have been given for it, or expenditures made strictly on the faith of it, yet the-owner of the land may revoke it when he will (unless it be coupled with an interest) without paying back the money or-making compensation for the expenditure.'' (Morgan & Rhinehart, 14 C. Cls. R., 319, 327.)
In this case I am of the opinion that there was a license- which, whether coupled with an interest or not, has never been -revoked. This license was founded on the defendants employing their own agent at his solicitation to devise the stamp, on their bearing the cost of the invention, on tlieir running the risk of its worthlessness, and on their making an enormous •outlay of cost and preparation, with the knowledge and concurrence of the agent, to ingraft the invention upon a revenue system which must necessarily be a matter of years. The license so granted may not have passed to the United States a specific interest in .the patent, nor a monopoly thereof, nor a right to share in its profits, nor to exclude other licensees from the use • of it, nor to maintain an action against any one for an infringe-nnent; and yet, as a license to enter upon real property will •.negative the presumption of trespass and preclude the owner from maintaining an action for acts done under it, so this license negatives the presumption of an implied contract, and precludes (he claimant from maintaining an action for a royalty which the defendants in no legal sense could ever have agreed to pay.
. I am aware that a letter was sent by the claimant to the Secretary of the Treasury concerning the matter of compensation. But the claimant was not a purchaser in good faith for a valuable consideration and without notice, who could assert a •higher equity than his grantor. He took the assignment with knowledge of and subject to the license. Amid the circumstances of the case, he, as the representative of the inventor, was bound, if he would revoke the license, to give to the Government the clearest and most unequivocal notice of revocation. I do not regard the communication as a revocation, and my conclusion is, that so long as the invention was used by the Government, the user was an act done under the license.
The judgment of the court is that the petition be dismissed.
Weldon, J., sat in the case, but. was prevented by illness from taking part in the decision.
Scofield, J., was absent on the day when the judgment was announced, but took part in the decision.