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A-57194, OCTOBER 29, 1934, 14 COMP. GEN. 340

A-57194 Oct 29, 1934
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1934: THERE WAS RECEIVED OCTOBER 23. AS IT IS NOT CLEAR TO THE DEPARTMENT JUST HOW THE STANDARD FORM OF PERFORMANCE BOND NO. 25 SHOULD BE AMENDED TO COMPLY WITH YOUR DECISION. IT IS RESPECTFULLY REQUESTED THAT YOU INFORM THE DEPARTMENT JUST HOW YOU DESIRE THIS FORM AMENDED. REFERENCE WAS MADE IN THE DECISION OF OCTOBER 10. THE CONTRACT IS ON STANDARD FORM NO. 32. ARTICLE 15 ADDED FOR PATENTS IS AS FOLLOWS: THE CONTRACTOR SHALL HOLD AND SAVE THE GOVERNMENT. THE PERFORMANCE BOND IS ON STANDARD FORM NO. 25. IN ADDITION THERETO THERE IS A PATENT INFRINGEMENT BOND EXECUTED BY THE SPERRY GYROSCOPE CO. ARE HELD AND FIRMLY BOUND UNTO THE UNITED STATES OF AMERICA. THE CONDITION OF THIS OBLIGATION IS SUCH.

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A-57194, OCTOBER 29, 1934, 14 COMP. GEN. 340

CONTRACTS - PATENTS - SURETY BONDS IN ORDER TO COMPLY WITH THE REQUIREMENTS OF THE DECISION OF OCTOBER 10, 1934, 14 COMP. GEN. 298, REGARDING THE PROPER FORM OF GOVERNMENT CONTRACTS INVOLVING THE USE OF PATENTS BY THE UNITED STATES, THE STANDARD FORM OF PERFORMANCE BOND NO. 25 SHOULD BE AMENDED BY ADDING A PATENT INFRINGEMENT BOND SPECIFICALLY OBLIGATING THE CONTRACTOR AND HIS SURETY "TO HOLD THE GOVERNMENT, ITS OFFICERS, AGENTS, AND EMPLOYEES, HARMLESS FROM LIABILITY OF ANY NATURE OR KIND, INCLUDING COSTS AND EXPENSES FOR OR ON ACCOUNT OF ANY PATENTED INVENTION, ARTICLE, OR PROCESS MANUFACTURED OR USED IN THE PERFORMANCE OF THAT CONTRACT, INCLUDING USE BY THE GOVERNMENT OF THE ARTICLES THEREIN CONTRACTED FOR.'

COMPTROLLER GENERAL MCCARL TO THE SECRETARY OF COMMERCE, OCTOBER 29, 1934:

THERE WAS RECEIVED OCTOBER 23, 1934, YOUR LETTER DATED OCTOBER 16, 1934, AS FOLLOWS:

YOUR DECISION DATED OCTOBER 10, 1934, NO. A-57194, REQUIRES THAT THE PARAGRAPH PAGE 9 "PATENTS" BE AMENDED TO STATE,"THE CONTRACTOR SHALL HOLD AND SAVE THE GOVERNMENT, ETC., " AND THAT THE SURETY BOND CONTAIN A CORRESPONDING PROVISION.

AS IT IS NOT CLEAR TO THE DEPARTMENT JUST HOW THE STANDARD FORM OF PERFORMANCE BOND NO. 25 SHOULD BE AMENDED TO COMPLY WITH YOUR DECISION, IT IS RESPECTFULLY REQUESTED THAT YOU INFORM THE DEPARTMENT JUST HOW YOU DESIRE THIS FORM AMENDED.

REFERENCE WAS MADE IN THE DECISION OF OCTOBER 10, 1934, TO WAR DEPARTMENT CONTRACT NO. W-978-ENG-546, DATED NOVEMBER 2, 1933, WITH THE SPERRY GYROSCOPE CO., INC., CONTAINING A STIPULATION IN THE CONTRACT AND THE PERFORMANCE BOND TO PROTECT THE UNITED STATES AGAINST INFRINGEMENT BY THE CONTRACTOR OF PATENTS OWNED AND CONTROLLED BY OTHERS. THE CONTRACT IS ON STANDARD FORM NO. 32, STANDARD GOVERNMENT FORM OF CONTRACT FOR SUPPLIES, AND ARTICLE 15 ADDED FOR PATENTS IS AS FOLLOWS:

THE CONTRACTOR SHALL HOLD AND SAVE THE GOVERNMENT, ITS OFFICERS, AGENTS, SERVANTS AND EMPLOYEES, HARMLESS FROM LIABILITY OF ANY NATURE OR KIND, INCLUDING COSTS AND EXPENSES, FOR OR ON ACCOUNT OF ANY PATENTED OR UNPATENTED INVENTION, ARTICLE, OR APPLIANCE MANUFACTURED OR USED IN THE PERFORMANCE OF THIS CONTRACT, INCLUDING ITS USE BY THE GOVERNMENT, AND THE CONTRACTOR SHALL GIVE A BOND IN AN AMOUNT SATISFACTORY TO THE UNITED STATES, THE TERMS OF WHICH SHALL FULLY PROTECT THE GOVERNMENT, AGAINST LOSS SHOULD THE CONTRACTOR DEFAULT IN THE OBLIGATION UNDER THIS ARTICLE.

THE PERFORMANCE BOND IS ON STANDARD FORM NO. 25, WITHOUT CHANGES THEREIN, AND IN ADDITION THERETO THERE IS A PATENT INFRINGEMENT BOND EXECUTED BY THE SPERRY GYROSCOPE CO., INC., AND THE SURETY, AS FOLLOWS:

KNOW ALL MEN BY THESE PRESENTS. THAT WE, SPERRY GYROSCOPE CO. INC., OF BROOKLYN, NEW YORK, A CORPORATION ORGANIZED UNDER THE LAWS OF THE STATE OF NEW YORK, AS PRINCIPAL, AND UNITED STATES GUARANTEE COMPANY, OF NEW YORK, NEW YORK, A CORPORATION ORGANIZED UNDER THE LAWS OF THE STATE OF NEW YORK, AS SURETY, ARE HELD AND FIRMLY BOUND UNTO THE UNITED STATES OF AMERICA, HEREINAFTER CALLED THE GOVERNMENT, IN THE PENAL SUM OF ONE HUNDRED THOUSAND ($100,000.00) DOLLARS, LAWFUL MONEY OF THE UNITED STATES, FOR THE PAYMENT OF WHICH SUM WELL AND TRULY TO BE MADE, WE BIND OURSELVES, OUR HEIRS, EXECUTORS, ADMINISTRATORS, AND SUCCESSORS JOINTLY AND SEVERALLY, FIRMLY BY THESE PRESENTS.

THE CONDITION OF THIS OBLIGATION IS SUCH, THAT WHEREAS THE PRINCIPAL ENTERED INTO A CERTAIN CONTRACT, HERETO ATTACHED, WITH THE GOVERNMENT, DATED NOVEMBER 2ND, 1933, FOR FURNISHING 43 EACH SEARCHLIGHT UNITS, 60- INCH, MOBILE, MODEL M-VI, COMPLETE; 61 EACH SEARCHLIGHT UNITS, 60 INCH, PORTABLE, MODEL 1933, COMPLETE, AND WHEREAS THE SAID PRINCIPAL HAS SPECIFICALLY OBLIGATED HIMSELF IN SAID CONTRACT TO HOLD THE GOVERNMENT, ITS OFFICERS, AGENTS, AND EMPLOYEES HARMLESS FROM LIABILITY OF ANY NATURE OR KIND, INCLUDING COSTS AND EXPENSES FOR OR ON ACCOUNT OF ANY PATENTED INVENTION, ARTICLE, OR PROCESS MANUFACTURED OR USED IN THE PERFORMANCE OF THAT CONTRACT, INCLUDING USE BY THE GOVERNMENT OF THE ARTICLES THEREIN CONTRACTED FOR.

NOW, THEREFORE, IF THE PRINCIPAL SHALL WELL AND TRULY PERFORM AND FULFILL THE ABOVE UNDERTAKING AND AGREEMENT, AND SHALL PROMPTLY MAKE PAYMENT OF ANY JUDGMENT AND COSTS OBTAINED AGAINST THE UNITED STATES UNDER THE PROVISIONS OF THE ACT OF JUNE 25, 1910, (36 STAT. 851) AS AMENDED BY THE ACT OF JULY 1, 1918 (40 STAT. 705) OR EXPENSES INCIDENT THERETO, THEN THIS OBLIGATION TO BE VOID; OTHERWISE TO REMAIN IN FULL FORCE AND VIRTUE.

IN WITNESS WHEREOF, THE ABOVE BOUNDEN PARTIES HAVE EXECUTED THIS INSTRUMENT UNDER THEIR SEVERAL SEALS THIS 9TH DAY OF NOVEMBER 1933, THE NAME AND CORPORATE SEAL OF EACH CORPORATE PARTY BEING HERETO AFFIXED AND THESE PRESENTS DULY SIGNED BY ITS UNDERSIGNED REPRESENTATIVES, PURSUANT TO AUTHORITY OF ITS GOVERNING BODY.

THERE APPEARS NO REASON WHY THE PROPOSED CONTRACTS CONSIDERED IN THE DECISION OF OCTOBER 10, 1934, SHOULD NOT HAVE INCORPORATED THEREIN THE PATENT ARTICLE SIMILAR TO THE ABOVE QUOTED ARTICLE 15, AND WHY THERE SHOULD NOT BE IN ADDITION TO THE USUAL PERFORMANCE BOND ON THE STANDARD FORM A PATENT INFRINGEMENT BOND SUBSTANTIALLY IN ACCORD WITH THE ABOVE QUOTED PATENT INFRINGEMENT BOND IN CONNECTION WITH THE SPERRY GYROSCOPE CONTRACT.

IF YOU SHOULD REQUIRE ANY FURTHER INFORMATION IN THE MATTER AND WILL SO INFORM ME, AN EFFORT WILL BE MADE TO FURNISH SAME.

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