Bliss Co v. United States, 240

• Citation: 253 U.S. 187,64 L.Ed. 852,40 S.Ct. 455
• Decision Date: 17 May 1920
• Docket Number: No. 240,240
• Parties: E. W. BLISS CO. v. UNITED STATES
• Court: U.S. Supreme Court

253 U.S. 187

40 S.Ct. 455

64 L.Ed. 852

E. W. BLISS CO.

v UNITED STATES.

No. 240.

Argued March 12 and 15, 1920.

Decided May 17, 1920.

Mr. Arthur C. Fraser, of New York City, for appellant.

Messrs. Assistant Attorney General Davis and Daniel L. Morris, ofW ashington, D. C., for the United States.

Mr. Justice CLARKE delivered the opinion of the Court.

In this suit compensation is sought from the government for the use which it made of a patented 'superheater,' in connection with Whitehead torpedoes.

A 'superheater' is a device in which fuel is burned in the compressed air which drives the motor by which a torpedo is propelled through the water, so that the air is heated to such a degree that its energy is greatly increased, with the result that the range of the use of the torpedo is much extended.

The Court of Claims interpreted the petition as containing a claim that the defendant had contracted to pay appellant for 50 'superheaters' at $500 each, and also as claiming that it had infringed rights of the appellant in certain United States patents by the purchase of 360 'superheaters' from Whitehead & Co., a British corporation, and by itself manufacturing 100 such 'superheaters.' Concluding, as to the first claim, that the petition did not state a cause of action in contract, and, as to the second, that it did not show title to the patents involved sufficient to support infringement, a demurrer to the petition was sustained, and the suit dismissed.

The main contention in this court is that a cause of action in contract is stated with respect to all of the 510 'superheaters,' but in the alternative, though faintly, it is claimed that the allegations also make out a case of infringement.

The appellant alleges that it was the owner of two United States patents issued in 1902, covering the 'superheater' device, and that in 1905 it entered into a written contract with the Armstrong Company, a British corporation, for the use of improvements in 'superheaters' owned by that company and at the time protected in Great Britain by a provisional specification for a patent. A copy of this contract, attached to the petition, after reciting that the Armstrong Company proposes to apply for a patent in the United States upon the improvements in 'superheaters' which it owns, and that it is desirous of granting to the appellant the exclusive license to use such invention 'in connection with the Bliss-Leavitt torpedo' manufactured by appellant, proceeds to grant to appellant the 'sole and exclusive license' to use such inventions for the full term of the letters patent thereafter to be procured for the purpose of propelling Bliss-Leavitt torpedoes wherever sold by the Bliss Company and 'Whitehead torpedoes sold only to the United States government.'

The contract provides for the payment by the appellant of a royalty of $25 for each torpedo fitted with the Armstrong inventions under penalty of cancellation, and that the Armstrong Company shall pay all costs and expenses of procuring the contemplated patents and of protecting them against infringement.

The petition alleges that eight United States patents on the 'superheater' device were procured by the Armstrong Company, variously dated from August 7, 1906, to November 14, 1911, but no assignment of rights under them was made to appellant other than such as it derives from the contract of 1905, which, it avers, has been fully recognized and its terms complied with, by both of the parties to it.

The references in the amended petition to the two patents owned by the appellant are so meager and so vague that we conclude that liability in contract or for infringement must be derived, if at all, from the allegations applicable to the contract of 1905.

As to the contract:

The allegations are that prior to 1907 Armstrong & Co. licensed Whitehead & Co., a British corporation, to 'use and exercise' its superheater inventions patented in Great Britain and in the United States, but subject to the rights of appellant under its contract of 1905; that in June, 1907, the appellant granted a request by the defendant for permission to purchase from Whitehead & Co. not more than 100 torpedoes containing the 'superheater' invention, thea mount of royalty 'to be later settled'; that subsequently 50 torpedoes so equipped were purchased and were brought into the United States subsequent to June 1, 1908; but that no royalty was ever paid to appellant for the use of the 'superheaters' upon them.

If the petition had stopped here, there might be substance in the claim that as to these 50 torpedoes a contract for royalty on the basis of quantum meruit should be implied. But the petition goes on and alleges that in November, 1907, before the alleged purchase of the 50 torpedoes, in a treaty between the parties as to the amount of royalty to be paid, a demand by the petitioner of $500 for each 'superheater' installed in a Whitehead torpedo was refused by the government; that in December, 1910, and again in March, 1912, long after the alleged purchase, the prior discussion as to royalty was renewed, but without agreement; and finally it is averred——

'that petitioner, by letter dated March 19, 1912, declined to grant any reduction and no reduction has ever been granted, and petitioner has never consented to the use of said patented invention or of said patented...