Waite v. United States

Background

A patent owner sued the United States under the Act of July 1, 1918, c. 114, 40 Stat. 704, 705 (Title 35, § 68) to recover for the Government’s unlicensed use of a patented invention. The Court of Claims found the United States liable and held that the proper measure of damages was the profits the owner would have made; those findings were not disputed here. The Court of Claims nevertheless ruled that interest should not be added to the award, and the Supreme Court agreed to review that limited question.

Reasoning

The Court addressed whether the statute’s grant of "reasonable and entire compensation for such use" includes interest on the damage award. The Government, while not formally confessing error, told the Court it believed interest should have been allowed. Writing for the Court, Mr. Justice Holmes said the word "entire" was intended to accomplish complete justice between the private claimant and the United States. The opinion cited earlier decisions (including Richmond Screw Anchor Co., Seaboard Air Line Ry., Brooks-Scanlon, Liggett & Myers, and Phelps) and concluded that allowing interest is necessary to make compensation whole. On that basis, the Court reversed the lower court’s refusal to permit interest.

Real world impact

Because the ruling allows interest to be added to profit-based damages against the United States under the 1918 Act, successful patent owners can recover more complete monetary compensation. The Court of Claims’ denial of interest in this case was overturned, and interest is now part of the remedies available in similar suits against the Government.