Farrand Optical Co. v. United States

• Decision Date: 21 August 1961
• Citation: Farrand Optical Co. v. United States, 197 F.Supp. 756 (S.D. N.Y. 1961)
• Parties: FARRAND OPTICAL CO., Inc., Plaintiff, v. UNITED STATES of America, Defendant.
• Court: U.S. District Court — Southern District of New York

197 F. Supp. 756

FARRAND OPTICAL CO., Inc., Plaintiff, v.UNITED STATES of America, Defendant.

United States District Court S. D. New York.

August 21, 1961.

Pennie, Edmonds, Morton, Barrows & Taylor, New York City, for plaintiff(Willis H. Taylor, Jr., New York City, of counsel).

Robert M. Morgenthau, U. S. Atty. for the Southern Dist. of New York, New York City, for defendant(Mark I. Cohen, Asst. U. S. Atty., New York City, of counsel).

RYAN, Chief Judge.

We have previously concluded by our decision of July 23, 1959(D.C., 175 F.Supp. 230) that the plaintiff may lawfully claim any compensation which it may be entitled to recover under Title 35 U.S.C. § 183andTitle 22 U.S.C. § 1758.The trial of the second phase of this suit, which concerns the fixation of the amount of such compensation, has been delayed by discovery proceedings and accounting studies by the parties.

Plaintiff has waived all claim for compensation under the Mutual Security Act of 1954(Title 22 U.S.C. § 1758).There remains for determination only plaintiff's claim under the Invention Secrecy Act(Title 35 U.S.C. § 183) for just compensation for the damage and/or use of the invention in suit.The claim is further limited by the fact that plaintiff by contract was obligated not to disclose this invention during the period in which the order of secrecy was effective and that plaintiff could not during this period publish the patent.Our problem then is to find and ascertain the amount of compensation, if any, plaintiff may recover only for the use of the subject invention.

The patent on this invention, No. 2,719,457(called in this litigation the Tripp patent) issued on October 4, 1955.However, the Government held a royalty — free license for "the duration of hostilities * * * plus six months".It has been stipulated "that plaintiff is in no event entitled to compensation prior to March 2, 1946(which is six months subsequent to cessation of hostilities on September 2, 1945)".We then have March 2, 1946 as the starting date of any claim for compensation for use of the invention.Breese Burners, Inc. v. United States, 1954, 128 Ct.Cl. 649, 121 F.Supp. 530, 128 Ct.Cl. 649.

The area of use for which plaintiff may in any event recover is further confined by stipulation of the parties that there is no right, in plaintiff, to compensation in respect of any apparatus supplied by plaintiff to the Government, and that recovery shall be restricted to use by the Government in the performance of certain specified contracts made by the Government with Eastman Kodak Company for sights which embodied and employed the invention.

At the outset, we are now met with the contention of the Government that this Court does not have jurisdiction under Title 35 U.S.C. § 183 to grant compensation for any use of the invention by the Government for the period after October 4, 1955, the date of the issuance of the patent.The Government urges that all evidence of use after that date be rejected and the recovery of plaintiff, if any, be so limited.It is the position of the Government that the sole forum available to plaintiff for its claim covering this period is in the Court of Claims.

Under the provisions of the statute(Title 35 U.S.C. § 183), the plaintiff had available to it three separate times when it could have attempted to have fixed and enforced payment of compensation claimed by it to be due from the Government for the use of its invention.Halpern v. United States, 2 Cir., 1958, 258 F.2d 36;Robinson v. United States, 2 Cir., 1956, 236 F.2d 24.Plaintiff commenced this suit on May 5, 1955, prior to the issuance of its patent on October 4, 1955; however, it could have awaited the issuance of the patent or have further delayed the filing of its suit for six years after a patent issued.

From an independent examination of the legislative history of the Invention Secrecy Act of 1951(35 U.S.C. §§ 181,183,66Stat. 805, 806, July 19, 1952), and upon consideration of the precedents interpreting this Act,¹we conclude this Court has jurisdiction to award compensation after the date of the granting of the patent, October 5, 1955, under Title 35 U.S.C. § 183 and to determine and award just compensation for use by the Government for the period commencing March 2, 1946(when the Government's royalty free license terminated) to the date of the trial.

It is not in dispute that the invention had no commercial or practical use other than as part of a gunsight or a bombsight,² and the plaintiff does not contend that all of the claims of the patent as issued were used by the Government.Plaintiff seeks to recover compensation for the use of but one of the 22 claims allowed in the patent, that is, for application ClaimNo. 32, allowed December 21, 1942, which is now ClaimNo. 4 of the patent in suit No. 2,719,457.

In determining the compensation for an invention which gives value to an entire apparatus, the component parts of which apparatus fail to operate with any utility absent the invention, damages will be based upon the total costs of the apparatus, including those elements necessary for the efficient operation of the machine but extraneous to the patented portions of the article.Cf.Marconi Wireless Telegraph Company of America v. United States, 1942, 99 Ct.Cl. 1, affirmed in part and reversed in part, 1943, 320 U.S. 1, 63 S.Ct. 1393, 87 L.Ed. 1731;Shearer v. United States, 1944, 101 Ct.Cl. 196;Imperial Machine & Foundry Corp. v. United States, 1930, 69 Ct.Cl. 667.³However, if the invention may be limited to a separable unit in the device and the other component parts have utility apart from this invention, then the items upon which compensation will be based will be restricted to those parts includable in the invention itself.Waite v. United States, 1930, 69 Ct.Cl. 153.⁴

We find that the invention in suit is part of a physical unit of construction which is separable from the entire apparatus or sights of which it is a part.Compensation for use may not be based, therefore, on the cost of the entire completed devices or machines, which were delivered under contracts entered into by the Government with Eastman Kodak Company for Hemisphere Gunsights, Periscopic Bombsights and spare parts.Waite v. United States, supra.

Our task here is to apportion the costs of the devices or machines delivered which is attributable to this ClaimNo. 4 of the patent; this we have found to be, in all the devices or machines delivered, separable from the "sights" of which it is but a part.

The issues to be resolved were stated by the Court during this trial (SMp. 1253) as follows:

"Is the plaintiff entitled to compensation for the employment of its invention from March 2, 1946 to November 1, 1960, and, if so, how much?"

The invention was embodied in what has been designated by the Government as the Y-1 and Y-3 Bombsights, and the B-36, A-3, A3A, MD-9 and TV Optical head assemblies for Gunsights.We have in evidence Defendant's Second Phase Trial Exhibit P (for convenience we have referred to the portion of the trial in which we seek to ascertain damages as the "second phase trial", and marked the plaintiff's exhibits on this portion of the trial as "PXS" and the defendant's exhibits as "DXS").This summary or schedule prepared and offered by the Government lists the Eastman Kodak Company Purchase Order or Contract for each type or model of Bombsights or Gunsights ordered, the quantity of each type and the amount paid by the Government.

It appears that our primary study of the evidence should be directed to ascertaining what portion of the complete sights delivered represent actual embodiment of the Tripp invention and the reasonable compensation thereon.

In weighing the factors to determine reasonable compensation, we are mindful of the applicability to the instant suit of comments by the Court of Claims in Olsson v. United States, supra, 25 F.Supp. at page 500.

"Plaintiff was not in a position to manufacture and sell, or have manufactured and sold, to the United States complete guns embodying his invention which would be acceptable to the United States.Through the use by the United States of plaintiff's invention on the guns which it designed and manufactured or acquired at its own expense, plaintiff was relieved of the trouble, expense, and responsibility of manufacture and sale.In these circumstances it seems clear that plaintiff's reasonable and entire compensation paid contemporaneously with the appropriation of the use of his invention was only a percentage of the monetary value of the advantages accruing to the United States by reason of such use.The United States was entitled to claim the benefit of a large portion of the value of the savings in cost and other advantages by reason of its assumption of the care, trouble, risk, expense, and responsibility attending the incorporation of the invention in suit into an acceptable design and the manufacture of the guns."

During the course of the trial, the term "invention area" was coined to designate the separable unit of construction of the entire manufactured and assembled article which embodied and employed the Tripp invention.It is this "invention area" upon which plaintiff's compensation must be based.It must be defined if we are to consider the contract costs to the Government of the Eastman Kodak Company delivered article, in fixing plaintiff's just compensation.

Some of the Gunsights and Bombsights employed camera or television attachments.There is no problem as to these camera or television attachments, concededly they form no part of the invention area.Cf.Waite v. United States, supra.

All of the Gunsights and Bombsights in question, except the television model Hemisphere Gunsight Model AN/ASG15, have an eye piece.

Patent Claim 4 reads as follows:

"4.In a telescope having

"(1) an objective,

"(2) an aperture stop, and

"(3) axially separated prismatic scanning elements mounted in

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