U S v. HARVEY STEEL CO(1913)
Assistant Attorney General Thompson and Mr. P. M. Ashford for the United States.
Messrs. Frederic D. McKenney, Frank S. Busser, and A. H. Wintersteen for the Midvale Steel Company.
Messrs. James R. Sheffield and James J. Cosgrove for appellee. [227 U.S. 165, 166]
Mr. Chief Justice White delivered the opinion of the court:
These appeals are from a judgment in favor of the Harvey Steel Company and against the United States for $123,467.23. This was the amount of royalty found to be due to the Harvey Steel Company under a contract, dated April 12, 1893, to pay royalty on all armor plate treated by the Harvey process and used by the United States. The armor plate under which the royalty in question was allowed was manufactured for the United States under four contracts with the Midvale Steel Company. 46 Ct. Cl. 298. The Midvale Steel Company, for the protection of its interests under the contracts, was permitted to intervene, and it was also allowed to appeal from the judgment. The case is before us on a motion to affirm under paragraph 5 of rule 6.
The questions for decision involve the construction of the contract between the United States and the Harvey Steel Company. As the meaning of that contract was passed upon by this court in a previous case between the same parties ( 196 U.S. 310 , 49 L. ed. 492, 25 Sup. Ct. Rep. 240), and the construction then given to the contract is here either authoritatively controlling or conclusively persuasive, we recur to that case and what was decided in it as the most direct means of not only analyzing and disposing of the issues here presented for decision, but, moreover, of causing it to be apparent that whatever may have been the original force of the contentions relied on, they are, in the light of the previous decision, 'so frivolous as not to need further argument.'
Following tests of armor plate treated by the Harvey process an option was given to the government, at the request of the Navy Department, for the purchase of the right to use the process upon vessels the construction of which had at that time been authorized by Congress. The [227 U.S. 165, 167] option was given on March 3, 1891, and the patent for the process-No. 460, 262-did not issue until September 29, 1891. The Harvey Steel Company, appellee, became the owner of the patent on October 7, 1891. The process was defined in the patent as follows:
After further tests the United States entered into an agreement on March 21, 1892, with the Harvey Steel Company, to purchase the right to employ the Harvey process in Harveyizing-as it is sometimes called-the armor for twelve designated vessels. Subsequently, on October 8, 1892, the Harvey process was definitely and formally adopted by the Navy Department; and, as said in the opinion in 196 U. S. p. 314, in pursuance of the contract of March 21, 1892, 'the Navy Department required and received from Harvey a revelation of the secret processes and improvements' used in the treatment of armor plate by the Harvey process. Subsequently, at the request of the United States, the contract of March 21, 1892, was abrogated and in its stead a contract was entered into on April 12, 1893. By this contract, the United States was [227 U.S. 165, 168] granted the right to use for the treatment of armor plate for its vessels the 'Harvey process' and any and all improvements made by the Harvey Steel Company upon such process, and to use and employ the armor plates manufactured according to said process. The United States agreed to pay the Harvey Steel Company a royalty of 1/2 cent per pound on the finished plate.
The case in 196 U. S. was brought to recover royalties alleged to be due to the Harvey Steel Company under the contract of April 12, 1893, calculated on the weight of armor supplied to the United States by the Bethlehem Iron Company and the Carnegie Steel Company. The Harvey Steel Company obtained judgment in the court of claims, and that judgment was affirmed by this court. The questions presented and decided were (a) whether, under the contract of 1893, the United States could set up the invalidity of the patent as a defense; and (b) whether the United States ought to have been allowed to show that it had not used the patent, properly construed, although it had used 'the process communicated to it, and known in common speech as the Harvey process.' After answering the first of these propositions in the negative, the court came to consider the claim asserted under the second proposition, viz.: '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.' In deciding against this contention, the court said (p. 317):
In concluding the opinion it was observed (pp. 318, 319):
The use of sand was gradualy 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 [227 U.S. 165, 171] second plate was placed on the carbonizing material, face down. The plates were then run into the furnace and the fire started.
The brick box 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.
The contention of the appellants on this branch of the case was thus stated by the court below in its option:
In view of the construction given to the contract of 1893 by the previous decision, we are of opinion that the court below did not err in deciding as it did that the circumstance that sand was used in the back of the plates in the various tests made by the government to which reference has been made, and was also employed in the treatment of the armor plate which was the subject of the suit decided in 196 U. S., while in the treatment of the armor plate involved in this suit neither sand nor any [227 U.S. 165, 172] other noncarbonaceous material was packed on the side of the plate which was not to be carbonized, did not entitle the United States to claim that the Harvey process of the contract of 1893 was not used. As said by the court below, the government received all it had bargained for, since it was not only entitled by the contract to a disclosure of the inventor's process, but to his instructions and assistance in the practical application of the patent, and was at liberty to use the process, little or much, in whole or in part.
The unsoundness of the remaining contention becomes apparent from its mere statement. The proposition is that even although the armor plate made for the United States by the Midvale Steel Company was hardened by the Harvey process, the obligation to pay royalty as to such armor does not exist, because the United States had not, by its contracts with the Midvale Company, specifically required that company to use the Harvey process. But under the terms of two of the contracts with the Midvale Company, that company was permitted to use the Harvey process if desired, while under the other contracts the process used was required to be satisfactory to the Navy Department, and under all the contracts the United States had the right to inspect the process used. Under the contract of April 12, 1893, the right was conferred upon the United States to use and employ the 'aforesaid 'Harvey process' in the treatment of armor plates for vessels which have been, since July 18, 1892, or which may hereafter be, authorized by Congress, and to use and employ armor plates for such vessels manufactured according to such process, paying therefor to the party of the first part the royalty of 1/2 of 1 cent per pound of the finished plate.' We think the plain meaning of the contract was that the government should pay royalty when it used armor plate treated according to the Harvey process of the contract.