Even if there were findings sufficient to show that the United
States had in any manner infringed letters patent No. 52,925,
granted February 27, 1866, to Hiram Berdan for an improvement in
breech-loading firearms, in the absence of anything disclosing a
contract, the use would be a tort, creating no cause of action
cognizable in the Court of Claims.
Where several elements, no one of which is novel, are united in
a combination which is the subject of a patent, and these several
elements are thereafter united with another element into a new
combination, and this new combination performs a work which the
patented combination could not perform, there is no
infringement.
As to letters patent No. 88,436, granted to Hiram Berdan March
30, 1869, for an improvement in breech-loading firearms, it appears
that the use of that invention was with the consent and in
accordance with the wish of the inventor and the Berdan Company,
and with the thought of compensation therefor, which facts, taken
in connection with other facts referred to in the opinion,
establish a contractual relation between the parties sufficient to
give the Court of Claims jurisdiction.
The contract was not a contract to pay at the expiration of the
patent, but the right to recover accrued with each use, and the
statute of limitations is applicable to all uses of the invention
prior to six years before the commencement of the action.
The Court of Claims did not err in fixing the amount of the
royalty.
These are crossappeals from a judgment of the court of claims
entered December 8, 1890, in favor of the petitioner against the
United States, for the sum of $95,004.36. The case as it was
presented in the Court of Claims contained two distinct causes of
action, each founded upon a patent issued to Hiram Berdan and by
him assigned to petitioner. The first patent was dated February 27,
1866, being No. 52,925, and entitled "Improvement in BreechLoading
Firearms." The
Page 156 U. S. 553
second was dated March 30, 1869, being No. 88,436, and entitled
in the same way. The court found against the petitioner in respect
to the first cause of action, and in its favor on the second. The
findings of facts made by that court are quite voluminous, and it
would needlessly encumber this statement to quote them all at
length.
In reference to the first of these causes of action, it will be
sufficient to note these facts, taken from the findings, and which
present all that is necessary for a determination of the questions
involved: in January, 1866, the Secretary of War convened a board
of officers of the army, of which General Hancock was named as
president. This board, known as the "Hancock Board," was
"ordered to examine thoroughly the following questions, and make
recommendations thereon:"
"(1) What form and caliber of breechloading arm should be
adopted as a model for future construction of muskets for
infantry?"
"(2) What form and caliber should be adopted as a model for
future construction of carbines for cavalry?"
"(3) What form of breechloading arm should be adopted as a model
for changes of muskets, already constructed, to breechloading
muskets?"
"Each person who submits an arm to the above board will be
required to state in writing the lowest price at which it will be
furnished in the event of its being adopted by the government."
It met at Washington on March 10, 1866. In the same month, it
issued a circular to the public, with the following blank form of
proposal, to be signed by those presenting arms for trials:
"_____, of _____, being the proprietor of the patent right to
manufacture a breechloading arm, known as _____, do hereby bind
_____ heirs, executors, and assigns to grant to the United States
government, if called on within three years from this date to make
such grant, the right to manufacture the aforesaid breechloading
arm on the following terms, viz:"
"For payment to _____ of _____ dollar per arm for the
Page 156 U. S. 554
privilege of manufacturing fifty thousand; of _____ dollar per
arm for the privilege of manufacturing one hundred thousand; of
_____ dollar per arm for the privilege of manufacturing two hundred
thousand; and of _____ dollar per arm for the privilege of
manufacturing any additional number of arms; provided, that when
the government shall have paid the total amount, _____ dollars,
counting each and every payment, then it shall have the full and
entire privilege of manufacturing _____ patented arms, for its own
use, without further payment to _____ on account of _____ patent
right. Each payment, as above specified, to be made for not less
than five thousand arms. Or by the payment of _____ dollars within
three years from this date, the privilege of manufacturing as many
arms as may be desired shall be granted to the United States."
In response to the circular, the petitioner, among others, on
March 27, 1866, forwarded a communication, a part of which is as
follows:
"The Berdan Firearms Co., of New York, New York, being the
proprietor of the patent right to manufacture a breechloading arm
known as the 'Berdan Breech Loader,' do hereby bind ourselves,
heirs, executors, and assigns to grant to the United States
government, if called on within three years from this date to make
such grant, the right to manufacture the aforesaid breechloading
arms on the following terms, viz.:"
"For payment to us of two dollars per arm for the privilege of
manufacturing fifty thousand; of one and threequarters dollars per
arm for the privilege of manufacturing one hundred thousand; of one
and onehalf dollars per arm for privilege of manufacturing two
hundred thousand; and of one and onequarter dollars per arm for the
privilege of manufacturing any additional number of arms."
Later, and on May 21, 1866, it presented a gun, called "No. 4,"
which, while similar in many respects to the one described in the
specifications and drawings of the patent No. 52,925, differed in
others. One of such differences is thus described in the latter
part of the fifth finding:
Page 156 U. S. 555
"A friction plunger (which did not exist in the patented gun)
was placed in the gun (No. 4) shown the Hancock board; this plunger
appeared in the middle of the bottom of the breech receiver, close
to the barrel's mouth, and was so placed that when the gun was
loaded, the spring was held up against the cartridge head and in
contact with it by a flat spring placed underneath the barrel. The
friction plunger was introduced for the reason stated in finding
XIII."
Finding No. 8 is as follows:
"June 4, 1866, the said board of officers concluded its labors
and made a final report to the Secretary of War which contained
this recommendation and statement, namely:"
"Fourth. This board recommends the plan of alteration submitted
by H. Berdan. This gives the stable breech pin, secures the piece
against premature discharge, and involves only a slight change of
our present pattern of arms."
In finding No. 9 is this statement:
"No gun has been bought by the government from defendants
[petitioner?] and no gun has been manufactured by the government
which is a copy of the gun recommended by the Hancock board."
Findings 11, 12, and 13 disclose these facts:
"11. Several models of Springfield arms have been placed in
evidence, and as to them we find: the model of 1865 was the Allin
gun. The model of 1866 (finding XII) was a tightjointed mechanism,
and except for the ejector device, elsewhere described in these
findings, the Berdan model has no bearing upon this case. The
loosejointed mechanism appeared in 1868, with the new ejector
device elsewhere in these findings described. For the purposes of
this action, the model of 1868 and those subsequent are alike, and
for these purposes the description given in these findings of the
Springfield gun applies to all models subsequent to that of
1866."
"12. The Berdan gun (patent 52,925) was not loosejointed; when
the breech block was down, there was no play, for then the block
abutted against the barrel at one end and the brace against the
breech screw at the other; Berdan, by joining his block (making
thus a block and brace) procured a square recoil
Page 156 U. S. 556
shoulder against the end of the breech pin; but he did not
procure any play in the parts; there were elongated holes in the
plate fastening of his breech block, as shown in the Patent Office
model, a device replaced in the gun shown the Hancock board (No. 4)
by a band which has a minute slip upon the barrel under strong
pressure; but neither the holes nor the band are claimed to give,
nor do they give, looseness of construction; they merely take up
slight wear of the parts. It is admitted that no single element in
patent 52,925 is new. The combinations shown in claims 1, 2, 4, and
5 were novel and useful."
"13. The Berdan extractor (patent 52,925) was intended for
rimfire cartridges; with those cartridges, it was successful. It
was not successful when used with centerfire cartridges, for this
reason: the flange of the rimfire cartridges expanded somewhat at
the time of explosion, and the shell thus took a firm seat in the
barrel. This expansion did not occur in the centerfire cartridges,
and therefore the shell was pressed back by the ejector spring in
proportion to the speed with which the breech block was raised; the
movement thus communicated to the cartridge was therefore not
sufficiently fast to throw the cartridge out of the receiver. To
counteract this difficulty, Berdan introduced the friction plunger
into the receiver just behind the cartridge head, thus
counteracting the backward pressure of the spring until the breech
block was open sufficiently to allow the shell to clear the face of
the breech block when ejected, so that the motion backward should
not be impeded by the intervening breech block. This friction
plunger, singly or in combination, was not patented by Berdan."
"It appears that the ejector in patent 52,925 would only operate
when a rimfire cartridge was used. The government uses centerfire
cartridges."
Patent No. 88,436 was for what is called an "extractor ejector."
In reference to the cause of action under this patent, findings 16,
17, and 19 are as follows:
"16. Extraction and ejection of cartridges was thus performed in
all Springfield guns, beginning with the model of 1868, and
continuing since. "
Page 156 U. S. 557
"Extraction: by an extractor plate swinging on the hinge pin,
and struck above its center of motion by the forward end of the
breech block, near the completion of its movement in opening."
"Ejection: by accelerating the movement of the extractor by
means of a spiral ejector spring which surrounds the stem of the
ejector spindle, and bears against the bottom of its hole in the
receiver at one end, and against the head of the spindle at the
other end. When the extractor is revolved by the opening of the
block, the ejector spring is compressed by the ejector spindle, the
point of which rests in a cavity in the back of the extractor above
its axis of motion. The continued revolution of the extractor
finally brings the prolongation of the ejector spindle below the
axis of motion; as soon as the center is passed, the sudden release
of the ejector spring causes the extractor to rapidly rotate about
its axis and to carry the empty cartridge shell against the beveled
surface of the ejector stud, by which it is deflected upward and
thrown clear of the gun."
"This specific device was perfected by Benjamin F. Adams, an
employe in the Springfield armory. He invented it in the autumn of
1868."
"17. The extraction and ejection of cartridges was thus
performed in the RussianBerdan gun, patent No. 88,436."
"Extraction: by an extractor swinging on the joint screw, and
struck above its center of motion by the forward end of the breech
block, nearer the completion of its movement in opening."
"Ejection: by accelerating the movement of the extractor by the
ejector spring, one end of which has a solid bearing on the
hingestrap slide, and the other, resting on the extractor, above
the center of motion, causes the spring to be compressed by the
movement of the latter until the direction of the resistance passes
below the center of motion; the sudden release of the spring then
throws out the extractor, carrying with it the shell, which in
passing out is deflected by the beveled surface of the ejector
stud, and is thus thrown clear of the place."
"The only difference between the Berdan and Adams devices is
that Berdan used a flat spring, while the government
Page 156 U. S. 558
used a spiral spring with a spindle or plunger; both perform the
same office and attain the same result in the same way; the use of
the flat spring or of the spiral spring is matter of choice, and is
in no way material to the result."
"Adams, when he made his invention, was ignorant of Berdan's
prior invention."
"19. The War Department is early and regularly informed of all
improvements and inventions in firearms and ammunition. It is aware
of the state of the art at all times, and generally knows of all
patents upon firearms as soon as issued."
"The attitude of the War Department towards inventors in
ordinance has been one of neutrality; it has neither denied nor
admitted the legal rights, if any there were, of inventors. In an
endeavor to perfect the government arm, that department has taken
advantage of all knowledge within its reach, and of all inventions;
it does not deny the claims of inventors, but has proceeded upon
the policy that executive officers should not decide upon such
claims against the government, or upon conflicting claims, but that
the claim should be presented without prejudice before some other
tribunal than an executive department. Berdan, as an officer of
plaintiffs herein, assignees of his inventions during the period
covered by this action, was in constant communication with the
ordinance officers, requesting the use of his devices by the
government; they knew him as an inventor, and knew his inventions
as soon as they were patented. In 1867, it was known that Berdan
was at work upon an ejector, and in August, 1868, that he had
applied for patents for improvements in firearms; but it does not
appear that, prior to issue of patent, the ordnance officers knew
of the specific devices protected by letters patent No. 88,436,
issued March 10, 1869, upon application filed July 21, 1868, except
as hereinafter appears."
Finding 23 contains these statements:
"In 1867, during the autumn, Berdan showed to Colonel Benton,
commandant of the Springfield armory, at the armory, a transformed
musket, containing the extractor ejector subsequently described in
the specifications and claims of patent number 88,436. Colonel
Benton then and there examined and
Page 156 U. S. 559
tested the device. He neither approved or disapproved it; his
attitude was neutral."
"August 3 or 4, 1889, Berdan had a conversation with General
Dyer, then Chief of Ordnance, in the Ordnance Office, upon the
subject of his devices. During this conversation, the Chief of
Ordnance said in substance that he had recommended that some steps
should be taken, or some court constituted, for the purpose of
determining the value of the various claims for devices used in the
Springfield gun, the army officers (in his opinion, he said) being
powerless to settle the question."
"Berdan's application for patent No. 88,436 was then pending in
the Patent Office, and Berdan explained generally its features. The
chief of ordinance said, in substance, that if any of the features
should be used by defendants in the Springfield gun, the ordnance
officers expected to pay for them when the claimant had gone
through the proper channels and settled the claim."
"While this application for patent 88,436 was pending in the
Patent Office, the following letters were written: "
" Washington, August 3, 1868"
" General: I hold some patents on the system of converting
muzzleloading muskets into breech loaders, recently adopted by the
United States. I am also the inventor of other points in the same
system not yet patented, but applications for which have been made
some time since, and I am now informed that the business of this
branch of the Patent Office is some five months behindhand, and
that my application would be acted upon at once on a receipt of a
note from the department that it is desirable that these
applications should be disposed of, to enable me to present my
claim to the government for the use of said patent."
" Trusting that you will grant me this favor,"
" I am, very respectfully, your obedient servant,"
" H. Berdan"
"Bvt. Maj. Gen. A. B. Dyer,"
"
Chief of Ordnance"
Page 156 U. S. 560
" War Department, Washington City"
" August 12, 1868"
" Sir: I have the honor to transmit herewith a communication,
dated the 3d instant, from H. Berdan, asking that his application
for patents for various improvements in firearms be acted upon
immediately by the Patent Office in order that he may present his
claims against this department for its use of said inventions, and
to state that, so far as this department is concerned, the early
consideration of the aforesaid claims is regarded as being
desirable."
" Very respectfully, your obedient servant,"
" J. M. Schofield,"
"
Secretary of War"
"
* * * *"
"The Berdan extractor and ejector device (patent 88,436) was
exhibited, in competition with other guns, to a board of officers
detailed to test guns, and called the 'Terry Board,' in the year
1873. In the report of that board, the device was fully described.
General Benet became Chief of Ordnance in June, 1874, and has since
held this position; he understood the Springfield device for
extracting and ejecting the shell, as described in the 'Terry'
report, as 'seemingly identical, certainly the mechanical
equivalent,' of Berdan's device for the same subject, covered by
patent 88,436. After the decision of the case of
McKeever v.
The United States in this court (December term, 1878, 14
Ct.Cl. 396), General Benet has been of this 'decided opinion':
"
" First, that the Supreme Court having given the opinion in the
case of
Seymour v. Osborne, 11
Wall. 533, that 'inventions secured by letters patent are property
in the holder of the patent, and are as much entitled to protection
as any other property, consisting of a franchise during the terms
for which the franchise or the exclusive right is granted,' that
patent rights are private property, and cannot be taken by the
United States without due compensation; and, "
Page 156 U. S. 561
" Second, that a use of an invention protected by a patent is
the use of private property that must be paid for, and therefore an
implied contract, that has a place in court, and that if the
validity of the patent is sustained, and its use by the government
is proved to the satisfaction of the court, the inventor must be
paid."
"General Benet, 'with this understanding,' continued the
manufacture of the Springfield gun, containing the disputed ejector
and extractor device, after adjournment of the 'Terry Board,' with
the expectation that if the court sustained a claim by Berdan
against the government upon his patent No. 88,436, then the
government must pay him for the use of his invention. Plaintiffs
have desired that the government should use their patented devices,
and have also desired and requested compensation for such use."
"Upon the foregoing facts, the court find that since 1874, the
Berdan extractor ejector device (described in patent No. 88,436)
has been used by defendant's ordnance officers knowingly and
without claim of adverse right, believing the device in the
Springfield gun to be the device, or the mechanical equivalent of
the device, covered by said letters patent, and with the
anticipation that, should the understanding of the said ordnance
officers as to plaintiffs' rights be judicially decided to be
correct, the defendant would compensate plaintiffs for such use.
"
Page 156 U. S. 565
MR. JUSTICE BREWER, after stating the facts in the foregoing
language, delivered the opinion of the Court.
Three questions are presented: first, did the court err in
denying relief to the petitioner on the first cause of action?;
second, was the petitioner entitled to recover from the United
States on the second cause of action?; and third, if so, was there
any mistake in the amount awarded?
With respect to the first little need be said. The ninth finding
is express that the government never bought any guns from
petitioner (for the word "defendants" is obviously a clerical
error), and has never manufactured a gun after the model
recommended by the Hancock board. It therefore never received any
tangible property from the petitioner, nor ever trespassed upon any
intangible right created by the patent. Beyond this, it also
appears that the patent was only for a combination, no single
element of which was new; that it was intended for, and was
successful when used with, rimfire cartridges, and was not
successful when used with centerfire cartridges; that the
government uses only the latter cartridges; that in order to adapt
his patent to these cartridges, the inventor added a new element,
for which neither singly nor in combination did he take out any
patent. If, therefore, the government had used model No. 4, which
was presented to the Hancock board, it would not have infringed any
patent right. For where several elements, no one of which is novel,
are united in a combination which is the subject of a patent, and
these several elements are thereafter united with another element
into a new combination, and this new combination performs a work
which the patented combination could not, there is no infringement.
Even if there were findings sufficient to show that the government
had in any manner infringed upon this patent, there is nothing
disclosing a contract, express or
Page 156 U. S. 566
implied, and a mere infringement, which is only a tort, creates
no cause of action cognizable in the Court of Claims.
Gibbons v. United
States, 8 Wall. 269;
Morgan v.
United States 14 Wall. 531;
Hill v. United
States 149 U. S. 593;
Schillinger v. United States 155 U.
S. 163.
With regard to the second question, it appears that Berdan
invented the extractor ejector, that he received a patent therefor,
and assigned such patent to the petitioner. It also appears that
the government has made use of this invention, or at least one
differing from it only in the substitution of a spiral for a flat
spring. These springs "perform the same office, and attain the same
result in the same way," and the use of the one for the other is a
"matter of choice, and is in no way material to the result." Upon
these facts alone, thus briefly stated, the defendant, were it a
private person, would be liable to an action of infringement. Nor
would it be a defense to the action that such person had,
subsequent to Berdan's invention and without knowledge thereof,
devised the contrivance which he was using. He would be in the
attitude of a subsequent inventor, and the prior inventor is the
one who, under the statutes, is entitled to the monopoly. Rev.Stat.
§§ 48844886.
"For any one invention but one valid patent can exist, and of
several distinct inventors of the same invention, one only is
entitled to receive a grant of the exclusive right. This one is the
original and first inventor."
1 Robinson on Patents sec. 58. That the peculiar contrivance
used by the government was devised by Adams, one of its employes,
and that it differs from the Berdan invention in the use of a
spiral instead of a flat spring, in no manner diminishes the patent
rights of Berdan or his assignee, the petitioner, or changes the
fact that the use made by the government of the extractor ejector
was an infringement upon such rights.
But as heretofore stated, something more than a mere
infringement, which is a tort, and not within the jurisdiction of
the Court of Claims, is necessary to enable the petitioner to
maintain this action. Some contractual liability must be shown. In
United States v. Palmer, 128 U. S. 262, it
appeared that the petitioner was the inventor of certain
improvements
Page 156 U. S. 567
in infantry equipments; that he presented such improvements to a
board of officers appointed by order of the Secretary of War to
meet, consider, and report upon the subject of a proper equipment
for infantry soldiers; that such board recommended the use of his
improvements; and that the improvements were adopted by the
Secretary of War as part of the equipment of the infantry soldiers
of the United States army. Upon these facts, the Court found that
there was an implied contract, Mr. Justice Bradley, speaking for
the Court, saying:
"No tort was committed or claimed to have been committed. The
government used the claimant's improvements with his consent, and
certainly with the expectation on his part of receiving a
reasonable compensation for the license. This is not a claim for an
infringement, but a claim of compensation for an authorized use --
two things totally distinct in the law, as distinct as trespass on
lands is from use and occupation under a lease. . . . We think that
an implied contract for compensation fairly arose under the license
to use, and the actual use, little or much, that ensued thereon.
The objection, therefore, that this is an action for a tort, falls
to the ground."
In the case at bar, according to the nineteenth finding,
"Berdan, as an officer of plaintiffs herein, assignees of his
inventions during the period covered by this action, was in
constant communication with the ordnance officers, requesting the
use of his devices by the government; they knew him as an inventor,
and knew his inventions as soon as they were patented,"
and, by the twentythird, "plaintiffs have desired the government
should use their patented devices, and have also desired and
requested compensation for such use." So far, then, as the
petitioner is concerned, the use of this invention was with its
consent, in accordance with its wish, and with the thought of
compensation therefor.
While the findings are not so specific and emphatic as to the
assent of the government to the terms of any contract, yet we think
they are sufficient. There was certainly no denial of the
patentee's rights to the invention; no assertion on the part of the
government that the patent was wrongfully issued; no
Page 156 U. S. 568
claim of a right to use the invention regardless of the patent;
no disregard of all claims of the patentee, and no use in spite of
protest or remonstrance. Negatively, at least, the findings are
clear. The government used the invention with the consent and
express permission of the owner, and it did not, while so using it,
repudiate the title of such owner.
The nineteenth finding, besides showing knowledge on the part of
the officers of the government of Berdan's invention, states in a
general way that
"the attitude of the War Department towards inventors in
ordnance has been one of neutrality; it has neither denied nor
admitted the legal rights, if any there were, of inventors. In an
endeavor to perfect the government arm, that department has taken
advantage of all knowledge within its reach, and of all inventions.
It does not deny the claims of inventors, but has proceeded upon
the policy that executive officers should not decide upon such
claims against the government or upon conflicting claims, but that
the claim should be presented without prejudice before some other
tribunal than an executive department."
The twentythird finding discloses that while Berdan's
application for patent No. 88,436 was pending, the Chief of
Ordnance of the army said, in substance, that if any of the
features of that patent should be used by the defendant in the
manufacture of the Springfield gun, the officers expected to
recommend the payment for their use when the claims had gone
through the proper channels, and were settled; that the inventor
wrote to the Chief of Ordnance asking the assistance of the War
Department in securing speedy action on the pending application in
the Patent Office, which letter was transmitted by the Secretary of
War to the Secretary of the Interior, stating that "the early
consideration of the aforesaid claims is regarded as being
desirable."
By the same finding, it also appears that this patent was
exhibited in 1873, in competition with other guns, to a board of
officers. called the "Terry Board," detailed to inspect guns; that
in the report of this board, the device is fully described; that
General Benet became Chief of Ordnance in June, 1874; "that he
understood the Springfield device for extracting and
Page 156 U. S. 569
ejecting the shell, as described in the "Terry" report, as
"seemingly identical, certainly the mechanical equivalent" of
Berdan's device for the same subject, covered by patent 88,436;"
and also understood
"that a use of an invention protected by a patent is the use of
private property that must be paid for, and therefore an implied
contract that has a place in court, and that if the validity of the
patent is sustained, and its use by the government is proved to the
satisfaction of the court, the inventor must be paid,"
and,
"'with this understanding,' continued the manufacture of the
Springfield gun, containing the disputed ejector and extractor
device, after adjournment of the 'Terry Board,' with the
expectation that, if the court sustained a claim by Berdan against
the government upon his patent No. 88,436, then the government must
pay him for the use of the invention."
The import of these findings is this: that the officers of the
government, charged specially with the duty of superintending the
manufacture of muskets, regarded Berdan as the inventor of this
extractor ejector; that the difference between the spiral and flat
spring was an immaterial difference; that therefore they were using
in the Springfield musket Berdan's invention; that they used it
with his permission, as well as that of his assignee, the
petitioner, and that they used it with the understanding that the
government would pay for such use as for other private property
which it might take, and this although they did not believe
themselves to have the authority to agree upon the price.
These facts bring the case clearly within
United States v.
Palmer, supra, and show that the judgment of the Court of
Claims was not founded upon a tort resulting from a mere
infringement, but upon a contract to which both parties assented.
That no price was agreed upon, or that the officers of the
government were not authorized to agree upon a price, is
immaterial. No price was fixed in
United States v. Palmer,
supra, or in
United States v.
Russell, 13 Wall. 623. The question is whether
there was a contract for the use, and not whether all the
conditions of the use were provided for in such contract. This is
the ordinary rule in respect to the purchase of property or
labor.
Page 156 U. S. 570
With regard to the third question, we are of opinion that the
Court of Claims ruled correctly that the statute of limitations was
a bar to any recovery for the use of the patented invention prior
to six years before the action was commenced.
The Berdan device has been used by the government since January,
1869, and the petition in this case was filed July 26, 1887.
Between January, 1869, and July 26, 1881, there were manufactured
224,952 muskets containing this device. Between July 26, 1881, and
the expiration of the patent, the number of muskets so manufactured
was 159,940. The Court of Claims found that five percent upon the
lowest cost of manufacturing the musket during the period covered
by this action was a fair and reasonable royalty.
One contention of the petitioner is that the contract to be
implied from the facts in this case was entered into at the
commencement of the use by the government of this patented device,
and was a single contract in respect to the entire manufacture,
under which no cause of action accrued to the petitioner until it
was fully completed, and that therefore the statute of limitations
began to run only from such time. The foundation of this claim lies
in the fact that the blank form of proposal prepared by the Hancock
board contained "the cardinal feature that the price should be
fixed on a sliding scale, the more used, the less rate," and that
the proposition made by the petitioner was in exact response
thereto, and named the prices graduated by the number of arms that
should be manufactured, to-wit, "two dollars per arm for the
privilege of manufacturing 50,000; one and threequarters dollars
for the privilege of manufacturing 100,000," and so on, and that
all the offers made at the time were on some sliding scale of
compensation.
It is further insisted that no other mode of determining the
compensation was ever agreed upon between the parties, that the
whole history of the transactions between them indicates that that
must have been the mode contemplated by each, that in the nature of
things, and in accordance with the ordinary rules which control
matters of this kind the price should vary with the number or
quantity, and that
Page 156 U. S. 571
until the government had ceased using the device, or at least
until the patent had expired, there could be no satisfactory
determination of what was a reasonable price for its use.
It is a sufficient reply that the proceedings before the Hancock
board were abortive, and resulted in nothing. The proposition made
by the petitioner was never accepted, and the government never
bought any gun from it or manufactured any like that recommended by
the Hancock board. The proposition contemplated no rights other
than the petitioner then had. It did not in terms or by implication
extend to patents that it might thereafter acquire, and cannot be
construed as underlying any action by the government commenced
three years thereafter with reference to a different subject
matter. Because the petitioner in 1866 offered the government
certain patent rights at specified prices, it does not follow that
those prices were to control in respect to other patent rights not
then in existence, and which were subsequently tendered by it. If
the prices are not to control, there is no reason for insisting
that the other terms of the original proposition entered into the
later transaction. When the negotiations of 1866 failed, they
failed for all purposes, and in the absence of some specific
evidence indicating an intent to carry forward the terms of the
proposition then made into the new arrangement of 1869, the
conditions of this new contract must be determined by the
circumstances which attended it.
But further, the negotiations of the Hancock board contemplated
intermediate payments. In the blank form of proposal issued by the
board was this provision:
"Each payment, as above specified, to be made for not less than
five thousand arms, and the same language was inserted in the offer
made by the petitioner."
Evidently the parties intended that any contract which might be
entered into should provide for payments from time to time, such
payments to be for not less than five thousand arms, and not for a
single payment when the government had finished the use, or the
patent had expired. And of course, the moment any payment should
become due, that moment, as to it, the statute of limitations would
begin to run. Whatever, however, may
Page 156 U. S. 572
have been the thought of the parties in respect to the contract
then proposed, the actual use by the government of the device
covered by patent No. 88,436 was, so far as appears from any of the
findings, upon no understanding that the prices named in 1866 for
the device then tendered were to control, or that any sliding scale
existed by which the price should be reduced as the number
increased, or that the manufacture was to continue for any
specified time, or that any particular number of muskets containing
the device were to be manufactured. It was the use of the device in
each single musket, with no other agreement or understanding than
that a reasonable price should be paid therefor. It was like the
ordinary purchase of a series of articles -- no time for payment
being named, payment is due for each article as it is
delivered.
The case of
Steam Packet Co. v.
Sickles, 10 How. 440, is not in point, for in that
case, the contract specifically provided that the machine should be
used by the defendants during the continuance of the patent, and
that, after paying for its construction, the savings caused thereby
in the consumption of fuel should be divided between the defendants
and plaintiffs, onequarter to defendants and threequarters to
plaintiffs. It was in view of this feature of the contract that the
Court said:
"The agreement on the part of the plaintiffs is that the
defendants shall use their machine for a certain time, in
consideration of which defendants are to pay a certain sum of
money. It is true that the exact sum is not stated; but the mode of
rendering it certain is fully set forth. It is one entire contract,
which cannot be divided into a thousand, as the plaintiffs
imagine."
But here there is no pretense that the government agreed to use
in all its muskets this device, or to continue the use of the
device in any that it should manufacture during the life of the
patent. There was no obligation on the part of the government as to
time or number.
It is further contended that the royalty fixed by the Court of
Claims is less than it should have been. In support of this
contention, reference is made to finding number twenty-two, which
contains these statements:
Page 156 U. S. 573
"The cost of manufacturing the extractor ejector now in use
(since 1868) is $1.25 per gun less than the cost of manufacturing
the Allin device. Several witnesses of high military position,
experts in the practical use of arms of this description and
familiar with the cost of manufacturing, have testified to the
great value of the extractor ejector device, claimed to be covered
(and understood by them to be covered) by patent No. 88,436, and
they are of the opinion that a reasonable royalty for the use of
this device would be the saving in cost over the Allin device plus
a sum varying somewhat with each witness, but of which the average
is $1.41 2/3 per musket, thus giving as royalty the sum of $2.66
2/3 per musket. It does not appear upon what facts these witnesses
based their opinions, or that they were cognizant of facts in
relation to sales or licenses of this or other similar inventions
upon which to found their opinions."
In this finding, the court states that it "finds the ultimate
fact that five per cent. upon the lowest cost of manufacturing the
musket during the period covered by this action" was a fair and
reasonable royalty. It gives the cost of manufacturing during the
various years, and, in addition to the matters just quoted, the
amount paid in other cases for the use of other devices in
firearms. It also gives a table of the rates offered by the
fifty-six different patentees of firearms to the Hancock board. Now
it may be that the finding as to the reasonable royalty is
something in the nature of an arbitrary determination, and it is
true that the court refers to the various matters above indicated
as furnishing the basis upon which it reaches this conclusion, yet
the question of a reasonable royalty is a question of fact to be
determined by the Court of Claims, and its determination, as
expressed in its findings, is conclusive upon us unless from other
findings it is apparent that there was error. We are not satisfied
that there was any such error. The question is what, under the
circumstances, was the reasonable price to be paid by the
government? It does not appear that there was any customary
royalty, or that anybody other than the government has used this
device. It is fair also to bear in mind that the particular
structure which the government used was devised by one of its
own
Page 156 U. S. 574
employees, and while the difference between it and the Berdan
device is slight, and Berdan was the prior inventor, yet it is not
unreasonable to take into consideration this slight difference
between the two structures, and that the government constantly held
to the specific device invented by its own employee. The question
is not whether, from the other facts stated in the findings, we
should have reached the same conclusion as the Court of Claims, but
whether, from such other facts, we can see that that court erred.
We are not prepared so to hold.
These are the only questions presented in this record, and,
finding no error in them, the judgment of the Court of Claims
is
Affirmed.
MR. JUSTICE WHITE took no part in the decision of these
cases.
