26 SPOGL-Patent Branch 194 (L) James P. Hume, Esq., Wilkinson, Huxley, Byron First National Chicago 3, Dear Hume: Mr. July Bank @ Knight Blidg., Illinois. in reviewing the royalty arrangements between J. M. & M. S. Browning Company and Colt's Patent Firearms Manufacturing Company, particularly with reference to the 37 mm. automatic cannon, it is noted from page 29 of the memorandum, submitted to St. Louis Ordnance District Price Adjustment the principles of the No. 678,937. It is list of 6 April patents Board, recoil that this cannon operating mechanism further noted that this which Colt was under embodies certain disclosed in patent licensed is under included the of patent in the agreement of 1903. It is understood that the 1903 agreement gave Colt not only a license under the patents listed, but also a license under any patents which might issue covering improvements in the inventions disclosed in these patents. In this early agreement the royalty rate was $45.00 for each gun. the 37 A separate agreement mm. cannon, having a dated 3 royalty July 1931 was made with schedule as follows: $1,000 » 750 per per gun gun $ per gun for all 500 for for These royalty rates have been further of the above mentioned memorandum. In view of the provisions the the to first 100 guns next 100 guns additional reduced in the respect 1903 as guns indicated agreement for on page rights 41 under future inventions, inquiry is made as to the reasons for entering into the 1931 agreement respecting the 37 mm. cannon. It would appear that Colt, if it so chose, could have relied upon the earlier agreement for any rights which it might desire under Browning patents covering the 37 mm. cannon. Your For comments the Chief respecting of the foregoing are requested. Ordnance: Very truly yours, Chas. &. Herrstrom Lt. Col., Ordn. Dept. Assistant