A-3099, AUGUST 29, 1924, 4 COMP. GEN. 224

A-3099: Aug 29, 1924

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IN THE ABSENCE OF A PATENT GRANT THERE EXISTS NO CONSIDERATION SUCH AS WOULD SUPPORT A CONTRACT PROVIDING FOR THE UNITED STATES TO PAY A STIPULATED SUM FOR THE RIGHT TO HAVE AIRPLANES OF A CERTAIN DESIGN CONSTRUCTED BY OTHERS. WHERE THE CLAIMANT COMPANY AND THE MANUFACTURERS OF A PARTICULAR TYPE OF AIRCRAFT FOR THE UNITED STATES WERE ASSOCIATE MEMBERS OF THE MANUFACTURERS' AIRCRAFT ASSOCIATION. THE RIGHT TO SUCH ROYALTY IS BARRED WHERE IT APPEARED THAT 266 SUCH CRAFT OF THAT TYPE HAD BEEN CONSTRUCTED BY CLAIMANT COMPANY AND AN ALLIED CORPORATION. THE CLAIM WAS DISALLOWED ON THE GROUND THAT THERE WAS NO LEGAL LIABILITY ON THE UNITED STATES FOR ROYALTY BY REASON OF THE MANUFACTURE OF THESE PARTICULAR AIRPLANES.

A-3099, AUGUST 29, 1924, 4 COMP. GEN. 224

PATENTS - PAYMENT OF ROYALTIES THE RIGHT TO ROYALTY RESTS UPON THE EXISTENCE OF A PATENTED INVENTION, AND IN THE ABSENCE OF A PATENT GRANT THERE EXISTS NO CONSIDERATION SUCH AS WOULD SUPPORT A CONTRACT PROVIDING FOR THE UNITED STATES TO PAY A STIPULATED SUM FOR THE RIGHT TO HAVE AIRPLANES OF A CERTAIN DESIGN CONSTRUCTED BY OTHERS. WHERE THE CLAIMANT COMPANY AND THE MANUFACTURERS OF A PARTICULAR TYPE OF AIRCRAFT FOR THE UNITED STATES WERE ASSOCIATE MEMBERS OF THE MANUFACTURERS' AIRCRAFT ASSOCIATION, HAVING RECIPROCAL RIGHTS TO USE ALL PATENTS OWNED BY EACH MEMBER, THE USE BY ONE MEMBER OF ANY PATENT FEATURE ASSERTED TO BE OWNED BY THE CLAIMANT COMPANY IN CONTRACTS ENTERED INTO WITH THE UNITED STATES FOR THE MANUFACTURE OF AIRPLANES WOULD NOT RENDER THE UNITED STATES LIABLE FOR THE PAYMENT OF ROYALTY. A CONTRACT STIPULATING THAT AFTER 100 OF A PARTICULAR TYPE OF AIRPLANE HAD BEEN CONSTRUCTED BY THE CLAIMANT COMPANY OR AN ALLIED CORPORATION THE PAYMENT OF ROYALTY WOULD BE THEREAFTER WAIVED, THE RIGHT TO SUCH ROYALTY IS BARRED WHERE IT APPEARED THAT 266 SUCH CRAFT OF THAT TYPE HAD BEEN CONSTRUCTED BY CLAIMANT COMPANY AND AN ALLIED CORPORATION.

DECISION BY COMPTROLLER GENERAL MCCARL, AUGUST 29, 1924:

THOMAS-MORSE AIRCRAFT CORPORATION REQUESTED MAY 23, 1924, REVIEW OF SETTLEMENT NO. W-023261, DATED MAY 7, 1924, DISALLOWING ITS CLAIM FOR $10,000 REPRESENTING AN ASSERTION TO THE RIGHT OF ROYALTY IN THAT SUM AT THE RATE OF $200 EACH ON 50 AIRPLANES OF A TOTAL OF 200 AIRPLANES WHICH THE GOVERNMENT HAD MANUFACTURED BY THE BOEING AIRPLANE CO., UNDER A CONTRACT DATED APRIL 8, 1921. THE CLAIM WAS DISALLOWED ON THE GROUND THAT THERE WAS NO LEGAL LIABILITY ON THE UNITED STATES FOR ROYALTY BY REASON OF THE MANUFACTURE OF THESE PARTICULAR AIRPLANES.

AS THE GROUNDS FOR REVIEW, CLAIMANT STATES THAT THE REASONS GIVEN IN THE DISALLOWANCE ARE NOT A TRUE INTERPRETATION OF THE BOEING CONTRACT NO. 365, DATED APRIL 8, 1921, PARTICULARLY IN CONNECTION WITH PARAGRAPH (1) OF ARTICLE VI, WHICH IT IS URGED STATES THAT THE BOEING CO. PROTECTS THE GOVERNMENT AGAINST RIGHTS OWNED OR ENJOYED BY THEM AND PATENTS COVERED BY THE CROSS-LICENSE AGREEMENT, BUT THAT PARAGRAPH (2) OF ARTICLE VI OF THE CONTRACT PROVIDES THAT THE GOVERNMENT WILL HOLD THE CONTRACTOR (THE BOEING CO.) HARMLESS AGAINST ALL OTHER SUCH CLAIMS, AND CITES DECISION DATED JANUARY 31, 1924, REVIEW 5842--- THE ORDNANCE ENGINEERING CORPORATION.

THE BASIS OF THIS CLAIM IS A CONTRACT BETWEEN THE GOVERNMENT AND CLAIMANT DATED NOVEMBER 4, 1918, WHEREBY THE CLAIMANT AGREED TO CONSTRUCT FOR THE GOVERNMENT:

FOUR (4) EXPERIMENTAL THOMAS-MORSE, MB-3, SINGLE-SEATER FIGHTER AIRPLANES, DESIGNED AND BUILT AROUND THE 300 H.P. HISPANO-SUIZA ENGINE; TO BE CONSTRUCTED IN CONFORMITY WITH THE CONTRACTOR'S DESIGNS AND SPECIFICATIONS, APPROVED BY THE AIRPLANE ENGINEERING DIVISION, AND SUBJECT TO SUCH MAJOR CHANGES AS MAY BE MADE BY THE CHIEF OF ENGINEERING OF SAID DIVISION; THAT SAID DESIGNS AND SPECIFICATIONS AND CHANGES WHEN MADE, BEING INCORPORATED HEREIN BY REFERENCE, AND FORMING A PART OF THIS CONTRACT.

IT IS FURTHER PROVIDED IN THIS CONTRACT, ARTICLE I, THAT:

IT IS EXPRESSLY UNDERSTOOD AND AGREED BETWEEN THE PARTIES HERETO THAT SHOULD THE ABOVE DESIGN BE APPROVED AND ADOPTED BY THE UNITED STATES OR ITS ALLIES, THE COMPLETE RIGHT AND LICENSE TO MANUFACTURE, TO CAUSE TO BE MANUFACTURED, AND TO USE, ARTICLES SIMILAR TO THE ARTICLES CONTRACTED FOR HEREIN, SHALL BE GIVEN BY THE CONTRACTOR TO THE GOVERNMENT FOR ITSELF AND ITS ALLIES UNDER A SUPPLEMENTAL AGREEMENT TO BE HEREAFTER ENTERED INTO, UNDER SUCH TERMS AND CONDITIONS AS MAY BE PRESCRIBED BY THE DIRECTOR OF AIRCRAFT PRODUCTION.

THE FIRST THREE AIRPLANES CONSTRUCTED HEREUNDER SHALL BE SIMILAR, EXCEPT THAT THE FIRST ONE, BUILT WITHOUT ENGINE, ARMAMENT, INSTRUMENTS, OR STANDARD ACCESSORIES, SHALL BE FOR SAND TEST; THE SECOND, THIRD, AND FOURTH AIRPLANES FULLY EQUIPPED, FOR FLIGHT-TEST PURPOSES; ALL TESTS TO BE CONDUCTED BY THE GOVERNMENT. THE FOURTH AIRPLANE CONSTRUCTED HEREUNDER SHALL BE BUILT WITH DOUBLE AILERONS, UNLESS CHANGED AS ABOVE SET FORTH.

ARTICLE II

THE GOVERNMENT WILL FURNISH OR CAUSE TO BE FURNISHED TO THE CONTRACTOR MOTORS, INSTRUMENTS, ARMAMENT, AND STANDARD ACCESSORIES TO BE INSTALLED IN THE AIRPLANES TO BE CONSTRUCTED UNDER THIS CONTRACT. ALSO, IF REQUESTED, THE GOVERNMENT MAY, UNDER AN ACT APPROVED JULY 9, 1918 (PUBLIC ACT NO. 193, 65TH CONGRESS), AND LETTER OF THE SECRETARY OF WAR TO THE DIRECTOR OF AIRCRAFT PRODUCTION OF AUGUST 9, 1918, SELL THE CONTRACTOR EQUIPMENT, MATERIALS, SUPPLIES, OR PARTS: PROVIDED, THAT THE CONTRACTING OFFICER MAY PERMIT THE COST OF SUCH EQUIPMENT, MATERIALS, SUPPLIES, OR PARTS TO BE DEDUCTED FROM THE AMOUNT TO BE PAID UNDER ARTICLE IV HEREOF, BUT IN NO EVENT SHALL MORE THAN TWO THIRDS OF THE TOTAL CONTRACT PRICE BE DEDUCTED ON ACCOUNT OF ANY SUCH EQUIPMENT, MATERIALS, SUPPLIES, OR PARTS WHICH MAY BE FURNISHED.

ARTICLE III

WHENEVER REQUESTED SO TO DO, THE CONTRACTOR WILL FURNISH TO THE CONTRACTING OFFICER A FULL STATEMENT AND REPORT OF THE PROGRESS OF THE WORK UP TO AND INCLUDING THE DATE OF THE RECEIPT OF THE REQUEST, TOGETHER WITH AN ITEMIZED STATEMENT OF THE EXPENSE INCURRED UP TO SUCH DATE, AND A STATEMENT OF THE TOTAL PROGRESS MADE.

ARTICLE IV

THE PRICE TO BE PAID BY THE GOVERNMENT TO THE CONTRACTOR FOR THE PROPER PERFORMANCE OF THIS CONTRACT IS THE SUM OF SIXTY-SIX THOUSAND DOLLARS ($66,000.00), WHICH SUM SHALL INCLUDE ALL LABOR, MATERIAL, OVERHEAD,AND OTHER GENERAL AND INCIDENTAL CHARGES, AND WHATEVER EXPERIMENTAL WORK AND CHARGES THEREFOR HAVE ACCRUED OR MAY HEREAFTER ACCRUE IN CONNECTION WITH THE EXPERIMENTAL OR OTHER WORK NECESSARY TO THE CONSTRUCTION OF THE ABOVE ARTICLES; SAID SUM SHALL BE PAYABLE IN THE MANNER SET FORTH IN ARTICLE V HEREOF AND ON THE FOLLOWING BASIS:

UPON DELIVERY TO AND ACCEPTANCE BY THE GOVERNMENT OF THE FIRST AIRPLANE, $26,000; UPON DELIVERY TO AND ACCEPTANCE BY THE GOVERNMENT OF THE SECOND AIRPLANE, $14,000; UPON DELIVERY TO AND ACCEPTANCE BY THE GOVERNMENT OF THE THIRD AIRPLANE, $14,000; UPON DELIVERY TO AND ACCEPTANCE BY THE GOVERNMENT OF THE FOURTH AIRPLANE, $12,000.

BY A SUPPLEMENTAL AGREEMENT TO THE FOREGOING CONTRACT DATED DECEMBER 13, 1919, ENTERED INTO TO ADJUST SOME DIFFERENCES OF PAYMENTS ARISING OUT OF THE AFORESAID CONTRACT, IT IS PROVIDED RELATIVE TO THE STIPULATIONS IN THE FORMER CONTRACT CONCERNING THE RIGHT OF THE GOVERNMENT TO HAVE MANUFACTURED ADDITIONAL PLANES TO THOSE BUILT UNDER THAT CONTRACT, AS FOLLOWS:

PROVIDED, THE GOVERNMENT MAY, IF IT SO DESIRES, PUT SAID THOMAS MORSE MB- 3 AIRPLANE INTO PRODUCTION WITHOUT RESTRICTION AND FREE FROM ANY CLAIMS OR DEMANDS OF THE THOMAS-MORSE AIRCRAFT CORPORATION, ITS ASSIGNS, REPRESENTATIVES, EMPLOYEES, OR OTHER COOPERATORS, IF IT SHALL PAY TO SAID CORPORATION A ROYALTY FEE OF $200.00 FOR EACH SUCH AIRPLANE SO PRODUCED: PROVIDED FURTHER, THAT ALL PAYMENT OF ROYALTY FEES SHALL CEASE WHEN SAID CORPORATION SHALL HAVE RECEIVED THEREFROM A TOTAL OF $20,000.00, IT BEING UNDERSTOOD, HOWEVER, THAT SHOULD SAID CORPORATION, OR A SUBSIDIARY OR ALLIED CORPORATION, PRODUCE ONE HUNDRED OR MORE OF SUCH AIRPLANES FOR THE GOVERNMENT, THEN AND IN THAT EVENT SAID THOMAS-MORSE AIRCRAFT CORPORATION WAIVES THE PAYMENT OF ALL ROYALTY FEES: AND PROVIDED FURTHER, THAT SHOULD THE GOVERNMENT PUT SAID AIRPLANES INTO PRODUCTION WITHOUT PAYING SAID ROYALTY FEE, SAID THOMAS-MORSE AIRCRAFT CORPORATION DOES NOT, IN SUCH EVENT, WAIVE ANY RIGHTS IT MAY HAVE TO SEEK RECOVERY FROM THE GOVERNMENT.

IT IS NOTED THAT ARTICLE I OF THE CONTRACT OF NOVEMBER 4, 1918, GIVES THE UNITED STATES THE COMPLETE RIGHT AND LICENSE TO MANUFACTURE, TO CAUSE TO BE MANUFACTURED, AND TO USE, WITHOUT RESTRICTION, THE THOMAS-MORSE MB-3, SINGLE-SEATER, FIGHTING AIRPLANE, OR ANY PART THEREOF,"UNDER SUCH TERMS AND CONDITIONS AS MAY BE PRESCRIBED BY THE DIRECTOR OF AIRCRAFT PRODUCTION.' THE SUPPLEMENTAL AGREEMENT OF DECEMBER 13, 1919, UNDERTAKES TO PRESCRIBE THE TERMS OF SUCH LICENSE TO SO MANUFACTURE AND USE THAT DESIGN OF AIRCRAFT BUT THERE IS NO INDICATION THAT THE TERMS THERE AGREED UPON WERE PRESCRIBED BY THE DIRECTOR OF AIRCRAFT PRODUCTION. SAID SUPPLEMENTAL AGREEMENT IS NOT SIGNED OR APPROVED BY THE DIRECTOR OR HIS SUCCESSOR. WHETHER OR NOT AN OFFICER OR AGENT OF THE UNITED STATES MAY PRESCRIBE TERMS PREJUDICIAL TO THE UNITED STATES IS A QUESTION OF MUCH DOUBT AND IT WOULD SEEM THAT THE WEIGHT OF AUTHORITY IS IN FAVOR OF HOLDING THAT SUCH OFFICER OR AGENT MUST PRESCRIBE TERMS LEAST EXPENSIVE TO HIS PRINCIPAL. WAIVING FOR THE PRESENT ANY QUESTION AS TO THE VALIDITY OF THE UNDERTAKING AS TO "ROYALTY," THE POWERS AND DUTIES OF THE OFFICER OR AGENT, THE EXISTENCE OF PRESCRIBED TERMS, OR WHETHER THE GOVERNMENT IS OTHERWISE ENTITLED TO AN UNRESTRICTED USE OF THE DESIGN IN QUESTION, THE SPECIFIC SUM CLAIMED IS ASSERTED UNDER A CONTRACT ENTERED INTO BY THE GOVERNMENT WITH THE BOEING AIRPLANE CO., DATED APRIL 8, 1921, FOR---

TWO HUNDRED (200) TYPE MB-3 SINGLE-SEATER PURSUIT AIRPLANES, EACH BUILT AROUND A 300-H.P. WRIGHT H., H-2, OR H-3 AERONAUTICAL ENGINE, AND EACH CONSTRUCTED IN ACCORDANCE WITH THE SAMPLE AIRPLANE HEREINAFTER MENTIONED, IN ACCORDANCE WITH ALL OF THE CHANGES ENUMERATED IN PARAGRAPH 2 OF SECTION II OF THE ATTACHED SPECIFICATION, AND ALSO IN ACCORDANCE WITH SAID SPECIFICATION, ATTACHED HERETO AND HEREBY MADE A PART HEREOF, IN SO FAR AS SAID SPECIFICATION IS NOT OTHERWISE INCONSISTENT WITH THE SAID SAMPLE AIRPLANE; PROVIDED THE SAID SPECIFICATION SHALL ALWAYS GOVERN WITH RESPECT TO MATERIALS AND WORKMANSHIP IN ALL CASES WHERE THE QUALITY OF MATERIALS OR WORKMANSHIP IN THE SAMPLE AIRPLANE IS INFERIOR TO THE REQUIREMENTS OF THE SPECIFICATION.

IT WAS THE APPARENT INTENTION TO HAVE MANUFACTURED THROUGH THE MEDIUM OF THIS CONTRACT 200 AIRPLANES DESIGNATED MB-3, SIMILAR TO THOSE BUILT FOR THE GOVERNMENT BY THE CLAIMANT COMPANY UNDER CONTRACT DATED NOVEMBER 4, 1918, AND PRESUMABLY TO GUARD AGAINST POSSIBLE COMPLICATIONS THAT MIGHT ARISE FROM CONSTRUCTING THESE ADDITIONAL AIRPLANES IN ACCORDANCE WITH THAT MODEL, THE FOLLOWING RECIPROCAL PROVISIONS WERE INCORPORATED IN THE BOEING CONTRACT, VIZ:

ARTICLE VI

(1) THE CONTRACTOR WILL HOLD AND SAVE THE GOVERNMENT, ITS REPRESENTATIVES, AND ALL OTHER PERSONS ACTING FOR IT AS AGENT, CONTRACTOR, OR OTHERWISE, HARMLESS FROM ALL DEMANDS OR LIABILITIES FOR ALLEGED USE OF ANY PATENTED OR UNPATENTED INVENTION, SECRET PROCESS, OR SUGGESTION IN, OR IN THE MAKING OR SUPPLYING OF, THE ARTICLES AND/OR SPARE PARTS HEREIN CONTRACTED FOR, AND FOR ALLEGED USE OF ANY PATENTED INVENTION IN USING SUCH ARTICLES AND/OR SPARE PARTS FOR THE PURPOSE FOR WHICH THEY ARE MADE OR SUPPLIED, WHERE THE DEMAND OR LIABILITY IS BASED ON PATENTS THAT ARE OWNED OR CONTROLLED BY, OR UNDER WHICH AND TO THE EXTENT THAT RIGHTS ARE ENJOYED BY, THE CONTRACTOR, ITS OFFICERS OR EMPLOYEES, OR PERSONS IN PRIVITY WITH THE CONTRACTOR, OR IS BASED ON PATENTS OR RIGHTS THAT ARE ENJOYED BY MEMBERS OF THE MANUFACTURERS' AIRCRAFT ASSOCIATION, OR ON PATENTS OR RIGHTS THAT ARE CROSS-LICENSED UNDER THE SO-CALLED CROSS- LICENSE AGREEMENT AND/OR ITS SUPPLEMENTS, UNDER WHICH THE MEMBERS OF SAID ASSOCIATION ARE ENTITLED TO THE USE OF CERTAIN PATENTS; AND IF AND WHEN REQUIRED, WILL DISCHARGE AND SECURE THE GOVERNMENT FROM ALL DEMAND OR LIABILITY ON ACCOUNT THEREOF BY PROPER RELEASE FROM THE PATENTEES OR CLAIMANTS; BUT IF SUCH RELEASE IS NOT PRACTICABLE, THEN BY BOND OR OTHERWISE, AND TO THE SATISFACTION OF THE CHIEF OF AIR SERVICE.

(2) THE GOVERNMENT WILL, WITHOUT LIMITATION TO THE TIME OF COMPLETION OF THIS CONTRACT IN OTHER RESPECTS, HOLD AND SAVE THE CONTRACTOR HARMLESS FROM ALL DEMANDS OR LIABILITIES FOR ALLEGED USE OF ANY PATENTED OR UNPATENTED INVENTION, SECRET PROCESS, OR SUGGESTION IN, OR IN MAKING OR SUPPLYING, THE ARTICLES AND/OR SPARE PARTS HEREIN CONTRACTED FOR, AND FOR ALLEGED USE OF ANY PATENTED INVENTION IN USING SUCH ARTICLES AND/OR SPARE PARTS FOR THE PURPOSE FOR WHICH THEY ARE MADE OR SUPPLIED, WHERE THE DEMAND OR LIABILITY IS BASED ON PATENTS THAT ARE NOT OWNED OR CONTROLLED BY OR UNDER WHICH RIGHTS ARE NOT ENJOYED BY THE CONTRACTOR, ITS OFFICERS OR EMPLOYEES, OR PERSONS IN PRIVITY WITH THE CONTRACTOR, OR IS BASED ON PATENTS THAT ARE NOT ENJOYED BY MEMBERS OF THE MANUFACTURERS' AIRCRAFT ASSOCIATION, OR PATENTS OR RIGHTS THAT ARE NOT CROSS-LICENSED UNDER THE SAID CROSS LICENSE AGREEMENT OR ANY SUPPLEMENTS THERETO, PROVIDED IMMEDIATE NOTICE OF ANY SUCH DEMAND OR LIABILITY AND OF ANY LEGAL PROCEEDINGS CONNECTED THEREWITH IS GIVEN IN WRITING BY THE CONTRACTOR TO THE CONTRACTING OFFICER, AND PROVIDED FURTHER, THAT THE GOVERNMENT MAY INTERVENE IN ANY SUCH DEMAND OR PROCEEDING AND IN ITS DISCRETION MAY DEFEND THE SAME OR MAKE SETTLEMENT THEREOF, AND THE CONTRACTOR SHALL FURNISH ALL INFORMATION IN ITS POSSESSION AND ALL ASSISTANCE OF ITS EMPLOYEES REQUESTED BY THE GOVERNMENT.

THE SPECIFIC PURPOSE OF THESE TWO PROVISIONS IS UNDERSTOOD TO BE THAT THE CONTRACTOR, THE BOEING AIRPLANE CO., IS TO PROTECT THE GOVERNMENT FROM ALL LIABILITY THAT MIGHT ARISE FROM THE USE IN THE EXECUTION OF THIS CONTRACT FOR CONSTRUCTING MB-3 AIRPLANES, OF ANY PATENT RIGHTS OWNED OR ENJOYED BY IT, THE MANUFACTURERS' AIRCRAFT ASSOCIATION OR RIGHTS THAT ARE CROSS LICENSED UNDER THE SO-CALLED CROSS-LICENSE AGREEMENT AND ITS SUPPLEMENTS, AND THE GOVERNMENT IS TO PROTECT THE BOEING AIRPLANE CO., FROM LIABILITY ARISING FROM THE USE OF ANY PATENTS NOT OWNED BY IT OR THE AIRCRAFT ASSOCIATION OR CROSS LICENSED BETWEEN SUCH MEMBERSHIP.

WHILE THE ACTION HERE TAKEN DEALS PRIMARILY WITH THE CONTRACTUAL RIGHTS OF CLAIMANT TO ROYALTY ON THE AIRPLANES IT SHOULD BE OBSERVED THAT NO EVIDENCE HAS BEEN FURNISHED SHOWING THAT ANY OF THE AIRPLANES MANUFACTURED BY OR FOR THE UNITED STATES OF THE MB-3 TYPE ARE OF CLAIMANT'S DESIGN, IT NOT APPEARING THAT CLAIMANT IS THE ORIGINATOR OF THE MB-3 AIRPLANE OR IF IT IS THE ORIGINATOR THEREOF THAT THE TYPE ORIGINALLY DESIGNED WAS APPROVED AND ADOPTED WITH REFERENCE TO THE TOTAL OF 266 AIRPLANES OF THAT DESCRIPTION MANUFACTURED. IF CLAIMANT WERE OTHERWISE ENTITLED IT WOULD BE INCUMBENT UPON IT TO FURNISH SUCH EVIDENCE IN ADVANCE OF FAVORABLE CONSIDERATION. IT MUST ALSO SHOW THAT IT IS THE ORIGINAL INVENTOR OF NEW AND USEFUL IMPROVEMENTS WHICH HAVE NOT BEEN DEDICATED TO THE PUBLIC. IS NOT SUFFICIENT THAT CLAIMANT DESIGN AN AIRPLANE MANUFACTURED FOR THE GOVERNMENT BUT THAT SUCH DESIGN BE NEW AND USEFUL, AND BEFORE CLAIMANT IS ENTITLED TO A ROYALTY FOR THE USE OF ITS INVENTION IT MUST MEET THE REQUIREMENTS OF THE SEVERAL STATUTES UNDER WHICH IT MAY BE ENTITLED TO A PATENT GRANTING A MONOPOLY ON THE INVENTION. IT IS NOT ENTITLED TO THE EXCLUSIVE USE THEREOF UNTIL A PATENT IS GRANTED AND A PATENT IS PROSPECTIVE ONLY AND CARRIES WITH IT NO RETROACTIVE RIGHTS. THERE IS NO OBLIGATION UPON THE GOVERNMENT TO PAY A ROYALTY ON THE USE OF THE INVENTION PRIOR TO THE GRANTING OF A PATENT THEREFOR. IT DOES NOT FOLLOW, HOWEVER, THAT THE GRANTING OF A PATENT IS CONCLUSIVE EVIDENCE OF PATENTEE'S RIGHTS, FOR IT IS COMPETENT FOR THE GOVERNMENT TO SHOW THAT THE USE OF THE PATENTED INVENTION WAS NOT AN INFRINGEMENT THEREOF. ACT OF JUNE 25, 1910, AS AMENDED BY ACT OF JULY 1, 1918, 40 STAT. 705.

IN DABLE V. FLINT, 137 U.S. 41, IT WAS HELD THAT NEITHER AN INVENTOR NOR AN AUTHOR HAS ANY EXCLUSIVE RIGHT TO PROPERTY IN HIS INVENTION OR WRITING AFTER PUBLISHING IT, EXCEPT UNDER AND BY VIRTUE OF THE STATUTES SECURING IT TO HIM, AND IN ACCORDANCE WITH THE REGULATIONS AND RESTRICTIONS OF SUCH STATUTES. IN GAYLER V. WILDER, 10 HOW. (U.S.) 477, THE MAJORITY OPINION SAID NO SUIT CAN BE MAINTAINED BY THE INVENTOR AGAINST ANYONE FOR USING IT BEFORE THE PATENT IS ISSUED. AS IN OTHER CONTRACTUAL RELATIONS AN IMPLIED LICENSE MAY ARISE THROUGH THE ACTS OF THE OWNER OF A PATENT OR INVENTION OR AS A RESULT OF THE TERMS OR CIRCUMSTANCES OF THE EMPLOYMENT OF THE INVENTOR. MERE ACQUIESCENCE FOR A VALUABLE CONSIDERATION IS SUFFICIENT TO CREATE A LICENSE. THE TERMS AND CIRCUMSTANCES BETWEEN AN EMPLOYER AND EMPLOYEE MAY ENTITLE THE EMPLOYER TO THE OWNERSHIP OF A PATENT, TO THE LICENSE TO MAKE USE AND SELL THE INVENTION OR TO A MORE LIMITED LICENSE SOMETIMES DEFINED AS "SHOP RIGHT," INDICATING GENERALLY A RIGHT OF THE EMPLOYER TO USE THE INVENTION IN HIS FACTORY BUT NOT TO MAKE OR SELL THE INVENTION. SECTION 4899, REVISED STATUTES, PROVIDES THAT PERSONS PURCHASING OF THE INVENTOR BEFORE APPLICATION MAY USE OR SELL THE THING PURCHASED AND IT HAS BEEN HELD THAT A PREVIOUSLY PURCHASED MACHINE CAN BE NO INFRINGEMENT DURING AN EXTENSION OF THE TERM. SEE PAPER BAG MACHINE CASES, 105 U.S. 766. EXAMPLES OF IRREVOCABLE LICENSES TO AN EMPLOYER BY THE TERMS OF EMPLOYMENT ARE FOUND IN SOLOMONS V. UNITED STATES, 137 U.S. 342; LANE AND BODLEY V. LOCKE, 150 ID. 193; GILL V. UNITED STATES, 160 ID. 426. SEE 1 ROGERS ON PATENTS 178, 179, AND 194. WHILE A CONTRACTOR EMPLOYED BY THE UNITED STATES TO PRODUCE A CERTAIN ARTICLE WOULD SEEM TO BE AN "EMPLOYEE" WITHIN THE PRINCIPLES RELATING TO PATENTS IT IS NOT NOWNECESSARY TO FURTHER CONSIDER THAT QUESTION.

ONE OF THE ESSENTIAL ELEMENTS OF A VALID CONTRACT IS THE MATTER OF CONSIDERATION, FOR WITHOUT SOMETHING WHICH THE COURTS CAN RECOGNIZE AS OF ADEQUATE CONSIDERATION A CONTRACTUAL AGREEMENT IS UNENFORCEABLE; CONSEQUENTLY THERE IS FOR ASCERTAINMENT THE CONSIDERATION WHICH IS SUFFICIENT TO SUPPORT THE PROVISIONS IN THE CONTRACT OF NOVEMBER 4, 1918, AND BIND THE GOVERNMENT TO PAY $200 FOR EVERY MB-3 AIRPLANE WHICH IT MAY HAVE MANUFACTURED FOR IT BY SOME MANUFACTURER OTHER THAN THE CLAIMANT COMPANY. THE CONSIDERATION IN THIS CASE IS DESIGNATED AS A "ROYALTY," AND THIS TERM IS RECOGNIZED AND DEFINED TO BE PAYMENT MADE TO A PATENTEE FOR THE RIGHT TO MAKE, SELL, OR USE A PATENTED ARTICLE. A PATENT UPON WHICH THE RIGHT TO DEMAND ROYALTY RESTS IS DEFINED IN ONE SENSE AS THE RIGHT GRANTED BY THE GOVERNMENT TO AN INDIVIDUAL TO PREVENT THE USE OF A PATENTED ARTICLE BY OTHERS, 30 CYC. 817, EXCEPT UPON CONCESSION AND TERMS SATISFACTORY TO THE PATENTEE.

THE RIGHT TO ROYALTY AND ITS VALUE AS A CONSIDERATION TO SUPPORT AN ENFORCIBLE CONTRACT THEREFORE RESTS UPON THE EXISTENCE OF PATENT RIGHTS GRANTED UPON THIS SPECIAL MODEL OF AIRPLANE, OR SOME ESSENTIAL FEATURE OF IT, WHICH AN UNAUTHORIZED USE BY THE GOVERNMENT WOULD CONSTITUTE AN INFRINGEMENT OF THAT PATENT.

AN EXAMINATION OF THE CONTRACT FOR THE ORIGINAL FOUR STYLE MB-3 AIRPLANES DISCLOSES THAT THEY APPEAR TO HAVE BEEN BUILT MORE OR LESS EXPERIMENTALLY, THIS BEING EVIDENCED BOTH BY THE GRADUATED PRICES CHARGED AS WELL AS THE RATHER COMPREHENSIVE DETAILED SPECIFICATIONS PROVIDED BY THE GOVERNMENT, TOGETHER WITH THE SUPPLEMENTAL CONTRACTS COVERING CONSTRUCTION CHANGES. FROM THE HISTORY OF THE PROGRESS IN THE DEVELOPMENT OF THE AIRPLANE BY WELL-KNOWN PIONEERS IN THAT FIELD, TOGETHER WITH THE RAPIDLY CHANGING REQUIREMENTS DEVELOPED BY THE STRESS AND EXPERIENCE OF WAR, IT IS SAFE TO SAY THAT POSSIBLY ALL THAT THE MB-3 PLANE EMBODIED OF ANY POSSIBLE PATENTABLE FEATURE THAT COULD CONFER ANY PROPRIETARY PATENTABLE RIGHT UPON THE CLAIMANT COMPANY WAS SOME SUBORDINATE DETAIL AND NOT A DISTINCTIVELY NEW MODEL OF CRAFT.

THE ARCHIVES OF THE PATENT OFFICE HAVE BEEN EXAMINED AND ONLY TWO PATENTS HAVE BEEN LOCATED, BOTH COVERING SUBORDINATE FEATURES OF SUCH CRAFT, EACH ISSUED TO B. D. THOMAS, ONE OF WHICH, NO. 1370242, IS DATED AS PATENTED MARCH 1, 1921, AND ANOTHER, NO. 1389106, IS DATED AS PATENTED AUGUST 30, 1921. IF, AS IT SEEMS, THESE ARE THE ONLY PATENTS OWNED BY THE CLAIMANT COMPANY THEN THEY WERE NOT IN EXISTENCE AT THE TIME THE SUPPLEMENTAL AGREEMENT OF DECEMBER 13, 1919, WAS ENTERED INTO AND AS THE BASIS FOR THE GRANTING OF ANY PRIVILEGE OR LICENSE COULD NOT COMPRISE A CLAIM TO ROYALTY AS A CONSIDERATION TO SUPPORT A CONTRACT. IT IS NECESSARY IN AN AGREEMENT BASED UPON A LICENSE AS THE SUBJECT MATTER TO SUPPORT THE RECIPROCAL CONSIDERATION IN AN AGREEMENT OF THIS KIND THAT THE PARTICULAR PATENT BE SET FORTH FOR WHICH USE A LICENSE IS GRANTED. IN THE ABSENCE OF A SHOWING OF SUCH PATENT RIGHTS THE EXISTING AGREEMENT FAILS TO ESTABLISH THE RIGHT TO ANY CLAIM OF ROYALTY FROM THE GOVERNMENT, AND BECOMES MERELY A NUDUM PACTUM. IN ADVANCE DECISION DATED JUNE 22, 1923, NO. 7731, WITH REFERENCE TO THIS IDENTICAL CLAIM IT WAS SAID THAT IF THERE IS NO LEGAL OBLIGATION ON THE PART OF THE GOVERNMENT TO PAY THE ROYALTY IN QUESTION THE PROPOSED CONTRACT (FOR PAYMENT OF THE ROYALTY CLAIMED) WOULD IMPOSE NO SUCH OBLIGATION, BECAUSE IT DOES NOT EVEN PURPORT TO GIVE OR SECURE TO THE GOVERNMENT ANY ADDITIONAL RIGHT, BENEFIT, PRIVILEGE, OR THING OF VALUE; IN OTHER WORDS, IT IS WITHOUT CONSIDERATION MOVING TO THE GOVERNMENT.

FROM A CAREFUL EXAMINATION OF THE SEVERAL CONTRACTS INVOLVED IT APPEARS THAT SUCH DESIGN OF AIRPLANE AS WAS ORIGINALLY OFFERED BY CLAIMANT WAS SO CHANGED AS TO CAUSE THE MANUFACTURE AND DELIVERY OF AN AIRPLANE DIFFERING MATERIALLY IN DESIGN AND STRUCTURE. DURING THE PERIODS OF PERFORMANCE OF THESE CONTRACTS MANY CHANGES WERE MADE AT THE DIRECTION OF THE GOVERNMENT, SOME OF WHICH APPEAR TO BE DEPARTURES NOT ONLY FROM THE ORIGINAL DESIGN BUT EVEN WITH REFERENCE TO CLAIMANT'S ALLEGED INVENTIONS, AND IN OTHER PARTICULARS IMPROVEMENTS WERE MADE OF SUCH CHARACTER AS TO SUGGEST ORIGINAL INVENTION BY GOVERNMENT OFFICERS AND EMPLOYEES, NOT TO MENTION SUCH NEW AND USEFUL INVENTIONS BY THEM ORIGINATING FROM TIME TO TIME THROUGHOUT THE DEVELOPMENT OF THE ART OF HEAVIER-THAN-AIR FLYING MACHINES, AS TO WHICH THERE CAN BE NO INFRINGEMENT BY THE GOVERNMENT. DURING THE TESTING OF THE FIRST AIRPLANES BEING MANUFACTURED UNDER THE CONTRACT OF JUNE 19, 1920, IT DEVELOPED THAT THE AIRPLANES MANUFACTURED, PRESUMABLY IN ACCORDANCE WITH CLAIMANT'S DESIGN, WERE UNSAFE AND DANGEROUS. SEE REPORT OF LIEUTENANT MCCREADY, DATED APRIL 6, 1921. THEREUPON, FURTHER CHANGES AND IMPROVEMENTS WERE MADE IN THE CONSTRUCTION, FOR WHICH CLAIMANT RECEIVED ADDITIONAL COMPENSATION, ABOUT $100,000. WHETHER OR NOT THE DEFECTS IN CONSTRUCTION WERE SUCH AS CLAIMANT SHOULD HAVE REMEDIED WITHOUT ADDITIONAL COMPENSATION DOES NOT APPEAR BUT WILL BE THE SUBJECT OF FURTHER INQUIRY TO DETERMINE WHETHER ANY CONSIDERATION MOVED TO THE GOVERNMENT SUFFICIENT TO SUPPORT THE PAYMENTS IN EXCESS OF THE CONTRACT PRICE.

ANOTHER PHASE OF THE CONTRACT WITH THE BOEING AIRPLANE CO., OF APRIL 8, 1921, FOR CONSIDERATION IS THE CONDITIONS STIPULATED IN ARTICLE VI, PARAGRAPHS 1 AND 2, ADVERTED TO HEREIN, NAMELY, THE REQUIREMENTS THAT THE BOEING CO., SHOULD PROTECT THE GOVERNMENT FROM ALL LIABILITY THAT MIGHT ARISE FROM THE USE OF ANY PATENT RIGHTS OWNED OR ENJOYED BY IT, THE MANUFACTURERS' AIRCRAFT ASSOCIATION, OR RIGHTS THAT ARE CROSS LICENSED UNDER THE SO-CALLED CROSS-LICENSE AGREEMENT, AND/OR ITS SUPPLEMENTS, WHILE THE GOVERNMENT WAS TO PROTECT THE BOEING CO., AGAINST ALL OTHERS.

FROM AN AVAILABLE COPY OF THE CROSS-LICENSE AGREEMENT DATED JULY 14, 1917, AND SUPPLEMENT OF APRIL, 1918, IT IS ASCERTAINED THAT THESE ARTICLES CONSTITUTE AN INCORPORATION OF CERTAIN AIRCRAFT MANUFACTURERS INTO WHAT IS STYLED THE MANUFACTURERS' AIRCRAFT ASSOCIATION (INC.), IN CONNECTION WITH WHICH THERE WAS INCORPORATED AN AGREEMENT TO THE EFFECT THAT IN CONSIDERATION OF THE PREMISES, THE COVENANTS AND CONDITIONS THEREIN CONTAINED, AND OTHER GOOD AND VALUABLE CONSIDERATIONS MOVING BETWEEN THE SUBSCRIBERS, IT WAS COVENANTED AND AGREED THAT EACH SUBSCRIBER GRANTED, AGREED TO GRANT, AND CAUSED TO BE GRANTED TO EACH OTHER, LICENSE TO MAKE, USE AND SELL AIRPLANES, UNDER ALL AIRPLANE PATENTS OF THE UNITED STATES THEN OR THEREAFTER OWNED OR CONTROLLED BY THEM OR ANY OF THEM, OR BY ANY FIRM, CORPORATION, OR ASSOCIATION OWNED OR CONTROLLED BY THEM OR UNDER WHICH THEY, OR ANY OF THEM, OR ANY SUCH FIRM, CORPORATION, OR ASSOCIATION HAVE OR SHALL HAVE THE RIGHT TO GRANT LICENSES, AND THE SUBSCRIBERS ARE BOUND TO PAY CERTAIN SUMS UP TO $200, INTO A GENERAL FUND, UPON EACH AND EVERY AIRPLANE SEVERALLY MANUFACTURED BY THEM.

THE SUPPLEMENTAL AGREEMENT OF APRIL, 1918, MAINLY AMENDED THE AGREEMENT TO PROVIDE FOR THE PAYMENT BY EACH SUBSCRIBER INTO THE COMMON FUND OF ONLY $100 ON EACH AIRPLANE MANUFACTURED FOR THE UNITED STATES AFTER APRIL 1, 1918. A CERTIFIED LIST OF THE MEMBERSHIP OF THE MANUFACTURERS' AIRCRAFT ASSOCIATION (INC.), BY THE GENERAL MANAGER THEREOF DISCLOSES BOTH THE BOEING AIRPLANE O., AND THE CLAIMANT COMPANY TO BE MEMBERS OF SUCH ASSOCIATION. IN VIEW OF THE SITUATION THUS EXHIBITED TO HAVE EXISTED, THE BOEING AIRPLANE CO., HAD THE RIGHT IN CONNECTION WITH ITS UNITED STATES CONTRACT TO USE ANY OF THE PATENT RIGHTS OF THE ASSOCIATED MEMBERSHIP, WHICH INCLUDED ANY PATENT RIGHTS OF THE CLAIMANT COMPANY, WITHOUT ANY LIABILITY FOR INFRINGEMENT, OTHER THAN THE SPECIFIC CONTRIBUTIONS TO THE GENERAL FUND OF SUCH ASSOCIATION, PRESUMABLY ALLOWED FOR IN THE CONTRACT PRICE, AND IF THERE WAS NO SUCH LIABILITY RESTING UPON THE BOEING CO., IN MANUFACTURING THE PARTICULAR PLANES FOR WHICH CLAIM IS NOW MADE FOR ROYALTY, AND AS BEING THE CHARACTER OF LIABILITY FROM WHICH THEY WERE TO SAVE THE GOVERNMENT HARMLESS, THEN THERE IS NO OBLIGATION IMPOSED UPON THE GOVERNMENT TO PAY ROYALTY FOR PROTECTION AS TO A NONMEMBER.

FURTHER EXAMINATION OF THE CROSS-LICENSE AGREEMENT DISCLOSES SEVERAL MATTERS OPEN TO QUESTION, THEREFORE, ANYTHING SAID HEREIN WITH REFERENCE THERETO MUST BE UNDERSTOOD AS AFFECTING THE SUBJECT MATTER ONLY AND NOT AS A CONSTRUCTION OF SAID AGREEMENT WITH REFERENCE TO ITS LEGALITY IN OTHER RESPECTS. WHETHER OR NOT THE CROSS-LICENSE AGREEMENT CREATES AN UNLAWFUL COMBINATION OR TRUST, OR IS AN IMPROPER RESTRAINT UPON TRADE AND COMPETITION, PROHIBITED BY LAW, IS NOT FOR DECISION BY THIS OFFICE AND NOTHING SAID HEREIN IS SO INTENDED. IT IS PROPER TO OBSERVE, HOWEVER, THAT THE CROSS-LICENSE AGREEMENT APPARENTLY TAXES ITS SUBSCRIBERS ON THE BASIS OF MANUFACTURES FOR THE UNITED STATES AND THEREBY INDIRECTLY AFFECTS THE INTERESTS OF THE UNITED STATES; THAT IT REQUIRES ITS SUBSCRIBERS TO DIVULGE TO THE ASSOCIATION INFORMATION MATERIAL TO THE AIR DEFENSES OF THE UNITED STATES, INFORMATION TO AN ASSOCIATION THAT OWES NO DUTIES TO THE UNITED STATES AND WHICH MAY DIVULGE TO OTHERS THE ADEQUACY OR INADEQUACY IN DETAIL OF OUR AIR DEFENSES. THE AGREEMENT APPARENTLY EMPOWERS ITS SUBSCRIBERS BY COMBINATION TO SECURE TO THEMSELVES MONOPOLIES OVER CLAIMED INVENTIONS THAT HAVE NOT AND POSSIBLY CAN NOT BE THE BASIS OF PATENT RIGHTS UNDER EXISTING LAWS, OR EXTEND MONOPOLIES THEREON BEYOND THE STATUTORY PERIOD.

THERE IS ALSO FOR CONSIDERATION THE CONDITION IN THE CONTRACT WITH THE CLAIMANT COMPANY OF DECEMBER 13, 1919, STIPULATING FOR THE ROYALTY IN QUESTION, WHICH PROVIDED THAT SHOULD SAID CORPORATION OR A SUBSIDIARY OR ALLIED CORPORATION PRODUCE ONE HUNDRED OR MORE OF SUCH AIRPLANES FOR THE GOVERNMENT, THEN AND IN THAT EVENT THE SAID THOMAS MORSE AIRCRAFT CORPORATION WAIVES THE PAYMENT OF ALL ROYALTY FEES.

PREVIOUS TO THE CONTRACT WITH THE BOEING CO., THE CLAIMANT COMPANY BY CONTRACT NO. 265, DATED JUNE 19, 1920, REDESIGNED AND CONSTRUCTED 50 MB-3 AIRPLANES FOR THE GOVERNMENT WHICH IT ACKNOWLEDGED SHOULD BE CREDITED IN ACCORDANCE WITH THE FOREGOING PROVISIONS, AND BY CONTRACT NO. 265-S-1, DATED MAY 16, 1921, IT CONSTRUCTED 12 MORE SUCH PLANES; THEN BY THE CONTRACT WITH THE BOEING CO. 200 MORE MB-3 PLANES WERE CONSTRUCTED BY WHAT IS DISCLOSED TO BE AN ALLIED CORPORATION, MAKING A TOTAL OF 266 (INCLUDING THE FIRST 4) OF SUCH PLANES CONSTRUCTED FOR THE GOVERNMENT WHICH APPEAR PROPERLY TO BE CREDITABLE UNDER THE CONDITIONS OF THE AGREEMENT OF DECEMBER 13, 1919. THE TOTAL NUMBER THUS EXCEEDS BY 166 THE NUMBER WHICH THEN CONSTRUCTED AS PROVIDED FOR WOULD RELEASE THE GOVERNMENT FROM THE PAYMENT OF ALL ROYALTY, AND THEREFORE A CLAIM TO ANY SUM BASED UPON THE PROVISIONS FOR ROYALTY IN THE AGREEMENT OF DECEMBER 13, 1919, WOULD APPEAR TO BE FURTHER BARRED BY FULFILLMENT OF THE CONDITIONS THUS STIPULATED. UNDER CONTRACT NO. 265, DATED JUNE 19, 1920, FOR THE CONSTRUCTION OF 50 MB -3 AIRPLANES BY CLAIMANT, IT WAS AGREED IN ARTICLE VI THAT CLAIMANT WOULD HOLD AND SAVE THE GOVERNMENT HARMLESS FROM THE USE OF ANY PATENTED OR UNPATENTED INVENTION, ETC., AND WOULD SECURE THE GOVERNMENT FROM ALL DEMANDS OR LIABILITY ON ACCOUNT OF THE TYPE OF AIRPLANE MANUFACTURED, EXCEPT AS TO INFRINGEMENT BY REASON OF ARTICLES, ETC., FURNISHED BY THE GOVERNMENT. IT WAS FURTHER STIPULATED IN SAID ARTICLE VI AS FOLLOWS:

(2) THE CONTRACTOR AGREES TO GRANT, AND BY THE EXECUTION OF THIS CONTRACT DOES GRANT, TO THE GOVERNMENT WITHOUT FURTHER CONSIDERATION THE IRREVOCABLE AND NONEXCLUSIVE RIGHT AND LICENSE TO MAKE, HAVE MADE, USE, AND SELL, FOR GOVERNMENTAL PURPOSES ONLY, ANY AND ALL PARTS, MACHINES, MANUFACTURES, COMPOSITIONS OF MATTER AND/OR DESIGNS, AND TO PRACTICE OR CAUSE TO BE PRACTICED ANY AND ALL DISCOVERIES, INVENTIONS, IMPROVEMENTS AND/OR SUGGESTIONS THAT MAY BE MADE, PERFECTED, OR DEVISED BY THE CONTRACTOR, ITS REPRESENTATIVES, OFFICIALS, AND/OR OTHER EMPLOYEES IN CONNECTION WITH OR IN PURSUANCE OF THE PERFORMANCE OF THIS CONTRACT, UNDER ANY AND ALL PATENTS AND OTHER RIGHTS BASED UPON SUCH DISCOVERIES, INVENTIONS, IMPROVEMENTS, AND/OR SUGGESTIONS, SAID RIGHT AND LICENSE SHALL EXTEND THROUGHOUT THE UNITED STATES, ITS TERRITORIES, AND ALL FOREIGN COUNTRIES IN WHICH SUCH PATENTS OR OTHER RIGHTS SHALL BE OBTAINED, AND SHALL REMAIN IN FORCE AND EFFECT FOR THE FULL PERIOD OF SAID PATENTS OR OTHER RIGHTS.

BY THIS STIPULATION THE CONTRACTOR GRANTED TO THE GOVERNMENT AN IRREVOCABLE, UNLIMITED, AND NONEXCLUSIVE LICENSE TO MAKE, HAVE MADE, USE, AND SELL, FOR GOVERNMENT PURPOSES, ANY AND ALL PARTS OF THE STYLE OF AIRPLANE IN QUESTION. IT SHOULD BE NOTED THAT CLAIMANT CONTRACTOR IN PRESENTING ITS CLAIM UNDER THE CONTRACT OF NOVEMBER 4, 1918, FAILED TO CALL ATTENTION TO THE PROVISIONS OF THE CONTRACT OF JUNE 19, 1920, ABOVE QUOTED. SUCH FAILURE ON THE PART OF CLAIMANT MIGHT HAVE RESULTED IN SERIOUS DAMAGE TO THE GOVERNMENT. IT IS NOT UNDERSTOOD WHAT CLAIMANT'S PURPOSE WAS IN ASSERTING A CLAIM FOR A MATTER TO WHICH IT HAD NO RIGHT AND REQUIRING THIS OFFICE TO GO AFIELD TO NEGATIVE ITS ASSERTIONS.

FROM THE EVIDENCE AT HAND AND THE CONDITIONS ASSOCIATED THEREWITH, AS REVIEWED HEREIN, THERE APPEARS NO VALID BASIS FOR THE CLAIM FOR $10,000 ROYALTY FROM THE GOVERNMENT ON ACCOUNT OF THE CONSTRUCTION BY THE BOEING AIRPLANE CO., CLAIMANT, OR OTHERS OF THE MB-3 STYLE AIRPLANE, AND ACCORDINGLY UPON REVIEW THE DISALLOWANCE THEREOF IS AFFIRMED. THE INTENT OF CLAIMANT IN PRESENTING THE CLAIM IS NOT CLEAR, AND IT APPARENTLY IGNORES ITS AGREEMENTS AND THE STATUTES RELATING THERETO.

IN VIEW OF RECENT DEVELOPMENTS AND ADDITIONAL EVIDENCE THE DECISION IN THE CASE OF THE ORDNANCE ENGINEERING CORPORATION, DATED JANUARY 31, 1924, REFERRED TO, CAN NOT SERVE AS A PRECEDENT IN THIS CASE. THE PRINCIPLES HERE ANNOUNCED, UNTIL MODIFIED OR REVERSED, WILL PREVAIL OVER EXISTING DECISIONS IN CONFLICT HEREWITH.