## Facts

- De Forest Radio Telephone & Telegraph Company held rights in two patents covering vacuum tubes (“audions”) used in radio communication.
- De Forest executed a written instrument granting Western Electric (later assigned to AT&T) extensive rights “for the full terms of the patents” to make, use, sell, and otherwise dispose of patented apparatus, conveying “all transferable rights” except those expressly reserved.
- During World War I, the United States sought to use the audion technology for wartime communications.
- AT&T informed the United States it would permit such use, that the use would otherwise be infringing, and that AT&T would later seek an accounting; the government agreed.
- AT&T supplied audions for the government’s use and later negotiated and received compensation from the United States for that use.
- De Forest sued the United States in the Court of Claims under the 1910 patent-use statute as amended in 1918, alleging the government used the patented invention without license or lawful right.
- The Court of Claims dismissed the petition; De Forest appealed to the Supreme Court.

## Issues

1. Whether the De Forest-to-Western Electric instrument (assigned to AT&T) transferred sufficiently broad rights under the patents to authorize AT&T to license the United States to use the invention.
2. Whether, under the 1910/1918 statute, the United States remains liable to the original patent holder after obtaining authorization from, and paying compensation to, a party holding the substantial transferable patent rights.

## Decision

- The Supreme Court affirmed dismissal of De Forest’s claim.
- The Court construed the instrument as transferring all substantial, transferable rights in the patents (subject only to limited express reservations), giving AT&T authority to permit the government’s use.
- Because the government used the invention under authorization from AT&T and compensated AT&T, the use was not “without license of the owner or lawful right,” defeating De Forest’s statutory claim.

## Legal Principles

- Patent agreements are classified by the substance of the rights conveyed, not by the label used; a grant of broad exploitation rights for the patent term and of “all transferable rights” may operate as an assignment of the beneficial interest.
- Under the 1910/1918 statutory scheme permitting suits against the United States for unauthorized patent use, the United States may assert defenses available to private infringement defendants, including use under a valid license from a party holding the relevant patent rights.
- When the government secures authorization from a party holding the substantial patent rights and pays that party for the use, the government is not subject to additional liability to another claimant for the same use.

## Conclusion

The Court held that De Forest’s conveyance left AT&T with the substantial transferable patent rights needed to authorize the United States’ wartime use of the audion invention; after the government paid AT&T, the use was lawful under the statute and De Forest could not recover additional compensation.


De Forest Radio Tel. & Tel. Co. v. United States, 273 U.S. 236 (1927)