Sperry Gyroscope Company v. Arma Engineering Company/Opinion of the Court

Messrs. Melville Church, of Washington, D. C., D. Anthony Usina, of New York City, and Herbert H. Thompson, of Brooklyn, N. Y., for appellant.

Messrs. Dean S. Edmonds, of New York City, and Charles Neave, of Boston, Mass., W. Brown Morton, and R. Morton Adams, all of New York City, for appellee.

Messrs. William D. Mitchell, Sol. Gen., of Washington, D. C., Harry E. Knight, Sp. Asst. Atty. Gen., and Henry C. Workman, of Washington, D. C., amici curiae.

Mr. Justice Mc,REYNOLDS delivered the opinion of the Court.

Appellant brought suit against the Engineering Company, in the United States District Court for the Eastern District of New York, for damages, profits, etc., on account of the manufacture by it of gyroscopic compasses, covered by patents, for the United States; also for an injunction against further infringements. The allegation which demands special consideration follows:

'That the defendant, well knowing the premises, but with     intent to injure the plaintiff, to interfere with its      business, and to deprive it of the profits derived and to be      derived from making, using, and selling said inventions, has,      within the Eastern District of New York, and without the      license or consent of plaintiff, but against its positive      protest, made a number of gyroscopic compasses for and sold      them to the United States Navy Department under contract with      the said Navy Department, subsequent to the dates of said      patents and within six years next preceding the filing of      this complaint, to wit, during the years 1918 to 1923, all in      infringement of the aforesaid letters patent, and that      defendant is preparing and threatening to infringe said      patents more extensively by the manufacture of said      infringing apparatus for and its sale to the United States      Navy Department under contract with the said Department and      thus to inflict further injury, damage, and loss upon the      plaintiff; but to what extent the defendant has profited by      reason of the aforesaid infringement plaintiff is ignorant      and cannot set forth, and prays an account thereof.'

The contract with the United States is not set forth. Whether it undertook to protect them against claims arising under appellant's patents, or whether the compasses were delivered before or after July 1, 1918, or whether the arrangement necessarily involved an infringement of the patents, does not appear.

The trial court dismissed the bill for lack of jurisdiction, and granted this direct appeal December 30, 1924. Such appeals were permitted by section 238, Judicial Code (Comp. St. § 1215), 'in any case in which the jurisdiction of the court is in issue, in which case the question of jurisdiction alone shall be certified to the Supreme Court from the court below for decision.' We are now concerned only with the power of the trial court to decide the controversy revealed by the record.

Under section 24, Judicial Code (Comp. St. § 991), District Courts have original jurisdiction:

'Seventh. Of all suits at law or in equity arising under the     patent, the copyright, and the trade-mark laws.'

Appellant charged that the Engineering Company had infringed its patents by making and selling compasses to the United States, under contract, during the years 1918 to 1923, and intended further to infringe by continuing so to do. It asked for damages and an injunction. But for the allegation that the inventions were made and sold under such a contract, this would be but the ordinary patent suit. And so the real question presented is whether that allegation was enough to deprive the District Court of the jurisdiction plainly conferred by section 24.

Act of June 25, 1910, c. 423, 36 Stat. 851 (Comp. St. § 9465), 'to provide additional protection for owners of patents,' directed:

'That whenever an invention described in and covered by a     patent of the United States shall hereafter be used by the      United States without license of the owner thereof or lawful      right to use the same, such owner may recover reasonable      compensation for such use by suit in the Court of Claims.'

The Act of July 1, 1918, c. 114, 40 Stat. 704, 705 (Comp. St. Ann. Supp. 1919, § 9465), amended the act of 1910 to read:

'That whenever an invention described in and covered by a     patent of the United States shall hereafter be used or      manufactured by or for the United States without license of the owner thereof or lawful right to use or      manufacture the same, such owner's remedy shall be by suit      against the United States in the Court of Claims for the      recovery of his reasonable and entire compensation for such      use and manufacture: Provided, however, that said Court of      Claims shall not entertain a suit or award compensation under      the provisions of this act where the claim for compensation      is based on the use or manufacture by or for the United      States of any article heretofore owned, leased, used by, or      in the possession of the United States: Provided further,      that in any such suit the United States may avail itself of      any and all defenses, general or special, that might be      pleaded by a defendant in an action for infringement, as set      forth in title sixty of the Revised Statutes, or otherwise:      And provided further, that the benefits of this act shall not      inure to any patentee who, when he makes such claim, is in      the employment or service of the government of the United      States, or the assignee of any such patentee; nor shall this      act apply to any device discovered or invented by such      employee during the time of his employment or service.'

The argument is that the act of 1918 deprived the District Court of jurisdiction over the controversy between the present parties, because it limited the patent owner's remedy, under circumstances like those here disclosed, to a suit against the United States in the Court of Claims. But we think this contention goes to the merits of the matter, and not merely to the question of jurisdiction. The true intent and meaning of the statute is not free from doubt; but certainly there is nothing therein which shows any clear purpose to take away the power to decide. It became the duty of the court below to consider and determine whether, in the circumstances stated, appellee was relieved of liability and permitted by the statute to do what otherwise would have constituted a violation of appellant's rights. There was jurisdiction. The judgment below must be reversed, and the cause remanded for further proceedings in conformity with this opinion. See The Pesaro, 255 U.S. 216, 41 S.C.t. 308, 65 L. Ed. 592; Smith v. Apple, 264 U.S. 274, 44 S.C.t. 311, 68 L. Ed. 678; Smyth v. Asphalt Belt Ry., 267 U.S. 326, 45 S.C.t. 242, 69 L. Ed. 629.

Reversed.