the compensation which might be rightly exacted because of such taking.

(d) That where an officer of the United States in dealing with a subject within the scope of his authority infringed patent-rights by a taking or use of property for the benefit of the United States without the conditions stated justifying the implication of a contract, however serious might be the infringement or grave to the holder of the rights the consequences of such infringement, the only redress of the owner was against the officer, since no ground for implying a contract and securing compensation from the United States obtained.

Coming to consider the statute in the light of these principles there would seem to be no room for controversy that the direct and simple provision

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

embraces and was intended alone to provide for the discrepancy resulting from the divergence between the right in one case to sue on an implied contract and the non-existence of a right to sue in another. And this meaning becomes irresistible when the concordance which it produces between the title and the report of the committee is considered on the one hand, and the discord which would arise on the other from reading into the statute the theory of automatic and general license as to every patent which the argument presses. Observe that the right to recover by implied contract as existing prior to 1910 and the right to recover given by that act both rest upon the possession and exertion of official authority, although from the absence of definition in the statute the precise scope of the official power possessed, in order to bring the authority into play, is not specified, but is left to be deduced from the application of general principles. Observe further that, resting thus upon the exercise of official power, it was not assumed before the act of 1910 or under that act, that the official authority would consciously and intentionally be exerted so as to violate the Constitution by wrongfully appropriating private property. This follows from a twofold point of view: first, because the basis of the right to sue on implied contract is the fact that official power recognizing the patent-right and at the least implied assent of the owner had acted in reliance upon the fact that adequate compensation would follow the taking, and, second, because in conferring the right to prove infringement the act of 1910 obviously contemplates the possibility of the commission of official error or mistake on that subject and afforded a remedy for its correction and resulting compensa

tion. Thus it is true to say that under both views the theory of universal and automatic appropriation by the United States of a license to use all patent-rights is unsupported, since both views assume that official authority would not be willfully exerted so as to violate the Constitution, and this although it be that the act of 1910 embraces the exceptional case where, because of some essential governmental exigency or public necessity, the authority of the United States is exerted to take patent-rights under eminent domain in reliance upon the provision to recover the adequate compensation which the act of 1910 affords. And this fundamental characteristic at once exposes the want of foundation for the contention that because the statute made provision for giving effect to acts of official power in taking patentrights under the conditions stated and even when necessary of curing defects in the exertion of such power; therefore it is to be assumed that the statute conferred upon all who contracted with the United States for the performance of work a right to disregard and take without compensation the property of patentees. This must be, since the making of a contract with the United States to perform duties in favor of the United States does not convert the contractor into an official of the United States qualified to represent it and to entail obligations on it which under the terms of the statute can alone rest upon official action and the discharge of official duty. The making of a contract with the United States and the resulting obligation to perform duties in favor of the United States by necessary implication impose the responsibility of performance in accordance with the law of the land; that is, without disregarding the rights or appropriating the property of others. A contractor with the United States, therefore, is in the very nature of things bound to discharge the obligation of his contract without violating the rights of others, and merely because he contracts with the United States is not vested with the power to take the property of others upon the assumption that as a result of the contract with the United States he enjoys the right to exercise public and governmental powers possessed by the United States.

Nor is there any foundation for the assumption that the ruling in Crozier v. Krupp (C. D., 1912, 633; 178 O. G., 1154; 224 U. S., 290) is in conflict with these self-evident propositions and by necessary implication sanctions the theory of universal license in favor of the United States as to all patent-rights and the asserted resulting authority in contractors with the United States for the purpose of the execution of their contracts to disregard and appropriate all such rights.

Stated as briefly as we possibly can the case was this: In the arsenals of the United States guns and gun-carriages were constructed containing appliances which it was asserted infringed

patent-rights of the Krupp Company. A bill was filed against Crozier, who was Chief of Ordnance of the United States, to enjoin the alleged violation of the asserted patent-rights. Crozier demurred to the amended bill on the ground that the court had no jurisdiction because the suit was one against the United States. The trial court dismissed the bill. The Court of Appeals of the District of Columbia reversed because, although it fully conceded there was no jurisdiction over the United States and no power to interfere with its public property or duties, it yet considered that there was jurisdiction to restrain the individual, although an officer, from continuing to take property without compensation in violation of the Constitution. A certiorari was granted. It was stipulated in the cause that the structures complained of had been made in all the arsenals of the United States by Crozier, the Chief of Ordnance, and by the United States, and that the United States had asserted the right, and proposed to continue, to make the guns and gun-carriages in the future for its governmental purposes and denied the violation of any patentright. It was also stipulated that the Chief of Ordnance had made no profits and that all claims were waived except the claim of right to a permanent injunction at the termination of the suit to prevent the use of the appliances in the future. And that was the solitary issue which here arose for decision.

It was held that in view of the admission as to the nature and character of the acts done by the United States and further in view of the power of the United States to take under eminent domain the patent-rights asserted, the provisions of the statute affording a right of action and compensation were adequate to justify the exercise of such power. In accordance with this ruling it was decided that there was no right to an injunction against the Chief of Ordnance as an individual and the parties if their rights had been infringed were relegated to the compensation provided under the act of 1910. In reaching this conclusion the statute was critically considered principally for the purpose of determining whether the right to recover compensation which the act afforded was adequate to fulfil the requirements of compensation for rights taken as protected by the Constitution. It is true in the analysis which was made of the statute for this purpose it was said that the consummated result of the act of 1910 in any particular case was to confer upon the United States a license to use the patent-right. (P. 305.) But the use of the word "license" affords no room for holding that it was decided that the statute provided for the appropriation by anticipation and automatically of a license to the United States to use the rights of all patentees as to every patent. And clearer yet is it that the use of the word "license" affords no ground for the proposition that the statute invested every person contracting with the United States for the fur

nishing of material or supplies or for doing works of construction with public powers and transferred to them the assumed license to violate patent-rights to the end that they might be relieved of the obligation of their contracts and entail upon the United States unenumerated and undetermined responsibility upon the assumption that the United States would be ultimately liable for the patent-rights which the contractors might elect to take. Through abundance of precaution, however, we say that if any support for such contentions be susceptible of being deduced from the use of the word "license in the passage referred to, then the word must be and it is limited, as pointed out by the context of the opinion and by what we have said in this case, to the nature and character of use which was contemplated by the statute and which is consonant with the execution of its limited though beneficent purpose and not destructive of the same.

Under the views which we have stated it follows that the court below did not err in ordering the accounting under the 1911 contracts to proceed so that the statute when correctly construed might be applied. To the end, therefore, that effect may be given to such accounting as ordered by the court below our decree will be:

The order of the circuit court of appeals to the extent that it directed the accounting to be made on the basis therein stated is affirmed and the decree of the district court is reversed and the case is remanded to the district court for further proceedings in conformity with this opinion.

[Supreme Court of the United States.]

BOSTON STORE OF CHICAGO v. AMERICAN GRAPHOPHONE COMPANY AND COLUMBIA GRAPHOPHONE COMPANY.

Decided March 4, 1918.

249 O. G., 985; 246 U. S., 8.

1. PATENTS-PRICE-FIXING CONTRACTS VOID-SELLING FOR LESS THAN CONTRACT PRICE DOES NOT CONSTITUTE INFRINGEMENT.

Where A. delivers to B. patented articles under contract to sell at a fixed price and B. sells the articles at a reduced price, Held that the contract was contrary to the general law and void and that the right to make the contract was not within the monopoly conferred by the patent law and cannot be enforced under the guise of infringement.

2. SAME-EXTENT OF MONOPOLY.

Where a patentee delivers to another his patented article for a gross consideration, Held that he cannot in the act of delivering lawfully reserve by contract a part of his monopoly right to sell.

3. JURISDICTION-PRICE-FIXING CONTRACTS.

Where a suit arose under a price-fixing contract for a patented article, Held that the circuit court of appeals had jurisdiction to determine whether or not the suit arose under the patent law.

ON A CERTIFICATE from the United States Circuit Court of Appeals for the Seventh Circuit.

Mr. Walter Bachrach, Mr. Joseph W. Moses, Mr. Hamilton Moses, and Mr. Richard D. Daniels for the appellant.

Mr. James M. Beck, Mr. Taylor E. Brown, Mr. Clarence E. Mehlhope, Mr. Elisha K. Camp, Mr. Daniel N. Kirby, and Mr. G. H. Montague for the appellees.

Mr. Chief Justice WHITE delivered the opinion of the Court.

The court below before whom this case is pending, desiring instruction to the end that the duty of deciding the cause may be performed, has certified certain facts and propounded questions for solution arising therefrom. The certificate as to some matters of procedure is deficient in specification and looked at from the point of view of the questions which it asks is somewhat wanting in precision. As, however, the matters not specified are not in dispute and the want of precision referred to is not so fundamental as to mislead or confuse, we are of opinion the duty rests upon us to answer the questions and we come to discharge it, making the statements, however, which we have made as an admonition concerning the duty not to be negligent and ambiguous but to be careful and precise in preparing certificates as the basis for questions propounded to obtain our instruction.

Without in any degree changing, we rearrange and somewhat condense the case as stated in the certificate. The American Graphophone Company, a West Virginia corporation, as assignee of certain Letters Patent of the United States was the sole manufacturer of Columbia graphophones, grafonolas, records, and blanks, and the Columbia Graphophone Company, also a West Virginia corporation, was the general agent of the American Company for the purpose of marketing the devices above stated.

* *

The American Company, acting through its agent, the Columbia Company, employs in the marketing of its phonographic records and its other products a system of price maintenance, by which system it has been its uniform practice to cause its agent, the Columbia Company, to enter into * contracts * * * in the name of the Columbia Company, with dealers in phonographic records, located in the United States and its territorial possessions, to whom the American Company delivers its product, through the Columbia Company, by which it is provided, in part, that in consideration of the prices at which prescribed quantities of the various said products of the American Company are agreed to be delivered to such dealer, the dealer, in turn, obligates himself or itself in selling such products to adhere strictly to and to be bound by and not to depart from the official list prices promulgated from time to time by the Columbia Company for said products, and further expressly covenants not in any way to dispose of any such products at less than such list prices. The American Company fixes and prescribes the prices of its said