162 F. 472 | 6th Cir. | 1908
This case comes here on an appeal and a cross-appeal from a decree rendered by the court below on an accounting for profits and damages sustained by the plaintiff, the appellant in the second of the above entitlings, resulting from the infringement of letters patent No. 446,230, granted to Hoyt February 10, 1891. The patent was sustained in respect to the claims relied upon by this court at the original hearing in 1903 (127 Fed. 143, 62 C. C. A. 257, reaffirming a like decision made in the case of Same Plaintiff v. McSherry Mfg. Co., 101 Fed. 716, 41 C. C. A. 627). We expressed the opinion that the patent embodied a highly meritorious invention, and, finding that the defendant had infringed it, decreed accordingly and remanded the cause for an accounting for the profits and damages accruing from the infringement, which appeared to have been going on for several years. The court below, on entering the decree directed by this court, ordered a reference to the master to take proofs and report in the matter of profits and damages. The proceedings before the master were very much protracted, and a large volume of evidence taken, much of which the court below thought was useless; all which, to counsel, seemingly had some bearing upon the subject was brought in. The result is that the master has reported, and the court has decreed, that the plaintiff is not entitled to recover anything beyond nominal damages. This seems an untoward ending of an apparently good cause. Congress has exercised much solicitude in securing to patentees the reward which it bestows for useful inventions. It has awarded a remedy for the profits made by an infringer, as well as the damages sustained by the patentee; and it has further provided that, in cases where the court thinks the facts warrant it, the actual damages may be increased to the extent of threefold. Rev. St. §§ 4919, 4921 (U. S. Comp. St. 1901, pp. 3394, 3395); Walker on Patents (4th Ed.) § 568.
The question wc have to consider is whether the result is such as the law and the circumstances require. The master made an elaborate report, especially in regard to the law which he conceived to be applicable. With regard to the facts he states that, in response to an order made by him for a report in respect of the matter of the accounting, the usual course of proceeding (2 Bates Fed. Eq. Pro. § 759), the defendant reported, and its chief officer testified:
“That during the infringing period, in addition to the manufacture of shoe grain drills, it was engaged in the manufacture of numerous other agricultural implements and farm machinery; that the cost of production of the infringing shoe grain drills was so interwoven and intermingled with the cost of manufacture of said other farm implements and machinery that it would be impossible to separate the one from the other; that it kept no separate cost account or expense record as to its shoe grain drill business, and it would be an impossibility for any one to ascertain from its books the profits, if any, derived from the sale of the shoe grain drills which employed complainant’s device.”
“No statement of profits or loss being produced by the defendant, the complainant placed its own expert, Mr. Hart, at work upon the defendant’s books, and he has produced, and filed as a part of his deposition, a statement showing that during the infringing period, viz., from August, 1894, to March, 1903, the defendant manufactured and sold 9,406 shoe grain drills, embodying complainant’s patent, for the gross sum of $304,094.20, and upon which it realized a net profit of $10,992.55. The methods employed by complainant’s expert in arriving at his results have been criticised by defendant’s counsel, aud they have endeavored to point out many fundamental errors in his work. The defendant, however, not only declined to undertake this task when urged so to do, but has absolutely failed to indicate any other method than that pursued by Mr. Hart which -would have arrived at a more nearly exact result; nor has it undertaken to have its books reviewed by its own expert, for the purpose of showing that the profits indicated are excessive. Absolutely mathematical exactness in work of this character is not to be expected. I am of the opinion that the method pursued by the expert was in the main correct, that his work was carefully and honestly performed, and that from the evidence presented we must accept his result, viz., $10,992.35, as the net profit accruing to defendant from the sale of infringing shoe grain drills during the period of the accounting.”
With respect to profits, he states the contentions made before him by the parties thus:
“The complainant claims that it is entitled to the entire profit thus derived, and bases its contention, as I understand it, on two grounds: (a) That the 1-Ioyt patent is not a patent for a portion of a grain drill only, but embraces the machine in its entirety, (b) That, if the patent should be construed as not sufficiently broad to cover the entire machine, then it is of such paramount importance that the entire market value of the grain drill is legally and properly attributable to the addition of complainant’s patented features. Both of these propositions are strongly controverted by the defendant, and they contend that the complainant, having failed to give evidence tending to apportion the profit derived from the whole grain drill and that derived from the use of the infringing device, is entitled to recover only nominal damages.”
He then proceeds to discuss the law touching the recovery of profits, and upon his conclusion of law in that regard, that the plaintiff was bound to distinguish the extent to which the Hoyt invention enhanced the profits made by the defendant in the manufacture and sale of the infringing drills, and his further statement that the plaintiff had failed to do this, he reported that there could be only a nominal recovery. The master seems to have appreciated the injustice of this result, for he says:
“That defendant derived some advantage from the use of complainant’s device is evidenced by its prolonged infringement. That complainant should not be compensated for the appropriation of its property does not accord with our ideas of justice.' To award the entire profits would be to disregard the law and the evidence as I find it; and, no satisfactory basis for an apportionment of the profits being indicated, the complainant is relegated to nominal damages, which I fix at the sum of $1.”
And, as some atonement, he finds at the conclusion of his report as follows:
“Being of the opinion that defendant has profited by the infringement, but that the means of ascertaining the quantum are not presented by the record, I find that all items properly taxable as costs should be paid by it.”
The fundamental proposition on which the report in respect to the profits rests is that the whole of Hoyt’s invention and patent resides
The parts oí a drill consist of a carrier, a seed box or reservoir, and the seeding apparatus. It is to the latter that the attention of inventors has been principally directed. The carrier and the seed box are old and simple. Of them it is enough to say that no one appears in this case to have any patent on them. It is pertinent to cite what was said by Mr. Justice Grier in Seymour v. McCormick, 16 How., at page 488, 14 L. Ed., at page 1024;
“It must be apparent to the most superficial observer of the Immense variety of patents issued every day that there cannot, in the nature of things, be any one rule of damages which will apply equally to all cases. The mode of ascertaining actual damages must necessarily depend on the peculiar nature of the monopoly granted.”
The case here is not a patent for an improvement upon another article, which does uot cover that other article, hut only the improvement made upon it. The patentee cannot in such case extend his invention over the thing improved, if the latter is patented. If not, he may appropriate it, as others of tlie public may. The distinction is well illustrated by the improvement of the harvester by adding a driver’s seat to an otherwise complete harvester in Seymour v. McCormick, 16 How. 480, 14 L. Ed. 1024. When, therefore, the defendant sold one of the plaintiff’s machines, lie sold that which in all its associated parts was covered by the patent; and a Dowagiac drill, without the Iloyt patented combinations, would be but the fragment of a drill and have no distinctive character. The invention was not an addition to an otherwise complete machine.
In the cases of Elizabeth v. Paving Company, 97 U. S. 126, 24 L. Ed. 1000, and Hurlbut v. Schillinger, 130 U. S. 456, 9 Sup. Ct. 584, 32 L. Ed. 1011, no doubt the material employed, the blocks, the sand, the gravel, the cement, could have been put down in the usual way in some other fashion, and have been of some value as a pave
We therefore think that the plaintiff was entitled to recover the profits made on the infringing machines. But this is not the only ground 'on which a decree for those profits should be justly awarded to the plaintiff. The case is not one where the defendant has inadvertently infringed the rights of the patentee. On the contrary, the trespass has been with full knowldge of the plaintiff’s patent, which it knew was presumptively valid. It has made and sold these infringing drills with a purpose to imitate the patentee’s construction. If it made any profits in this business, which were attributable to any contribution of its own, it has mingled them with the profits due to the plaintiff. It took no precaution for distinguishing the profits, and took such a course as to make them indistinguishable by any means which the plaintiff could pursue'; and it now declares that it cannot itself distinguish them, and rests its defense upon the impossibility of showing the actual portion of the profits to which the plaintiff is entitled. This is the infringer’s refuge, and in so many cases renders fruitless the patentee’s right to redress for an undoubted wrong. In Docker v. Somes, 2 Myl. & Keene, 674, Lord Chancellor Brougham, when confronted with such a defense in a case involving an accounting by a trustee, said;
“When did a court of justice, whether administered according to the rulos oí equity or law, ever listen to a wrongdoer’s, argument to stay the arm of justice grounded on the steps he himself had successfully taken to prevent his iniquity from being traced? Rather, let me ask, when did any wrongdoer ever yet possess the hardihood to plead in aid of his escape from justice the extreme difficulties he had contrived to throw in the way of pursuit and detection, saying, ‘You had better not make the attempt, for you will find I have made the search very troublesome?’ The answer is, ‘The court will try.’ ”
In the present case the infringer’s conduct has been such as to preclude the belief that it has derived no advantage from the use of the plaintiff’s invention, as the master well said. In these circumstances, upon whom is the burden of loss to fall? We think the law answers this question by declaring that it shall rest upon the wrongdoer, who has so confused his own with that of another that neither can be distinguished. It is a bitter response for the court to say to the innocent party,-“You have failed to make the necessary proof to enable ns to decide how much of these profits are your own;” for the par
“The rule of law and equity is strict and severe on such occasion. If a party having charge of the property of others so confounds it with his own that the line of distinction cannot be traced, all the inconveniences of the confusion is thrown upon the party who produces it, and it is for him to distinguish his own property or lose it.”
This, also, was a case of an accounting by a trustee. And in a proceeding against an infringer for profits, the defendant may not inaptly be regarded as a trustee de son tort. Wales v. Waterbury, infra. And see also Wyllie v. Ellice, 6 Hare, 505; Bailey v. Bailey, 67 Vt. 494, 32 Atl. 470, 48 Am. St. Rep. 826. As was said on a former occasion, the obligation cast on the party causing the confusion cannot be less when, instead of being intrusted with the possession of property, he takes possession of it wrongfully. P. P. Mast & Co. v. Superior Drill Co., 154 Fed. 45, 57, 83 C. C. A. 157. The rule is of general application. It is stated with equal emphasis by Mr. Justice Strong in The Idaho, 93 U. S. 575, 586, 23 L. Ed. 978, where Hart v. Ten Eyck was cited as authority for it. In Wales v. Waterbury, 101 Fed 126, 41 C. C. A. 250, it was invoked by the Court of Appeals for the Second Circuit as applicable to the accounting for profits in a patent cause, as it was also by this court in the above cited cause of P. P. Mast & Co. v. Superior Drill Co.; Providence Rubber Co. v. Goodyear, 9 Wall. 788, 803, 19 L. Ed. 566. The rule has been recognized by this court in several cases, among them Smith v. Township of Au Gres, 150 Fed. 257, 80 C. C. A. 145, 9 L. R. A. (N. S.) 876, and Smith v. Mottley, 150 Fed. 266, 80 C. C. A. 154, in which last case we referred to a number of cases in other jurisdictions as well as our own.
We do not by any means impugn the general rules laid down in Garretson v. Clark, 111 U. S. 120, 4 Sup. Ct. 291, 28 L. Ed. 371, and the cases which have followed it, one of which is that, when the infringement consists in the making or using of articles improved by his own invention, the plaintiff must prove the extent of the enhancement of profits by the use of his own, as distinguished from those due to the article improved. But we are of opinion that the circumstances of this case, first, in that in the patented combination no other invention inheres, and that the combinations are not for improvements merely, but substitutes for essential congeries in a drill, and, secondly, that the infringement has been so conducted as to render a distinction of profits impossible, are controlled by principles quite independent of those involved in Garretson v. Clark, and that the plaintiff was entitled to a decree for the profits of the sales of the infringing drills. There is in this case no such real hardship as should shock the conscience of the court. The defendant loses nothing of importance but the profits which it made in the infringing business. It sometimes used some improvements of its own, but we are satisfied that they were of trifling value.
The master, for the purpose of this inquiry, made extensive reference to other kinds of drills and their relative satisfaction to the
This patent and the Packham patent, which is the subject of another decision made concurrently with this (Dowagiac Manufacturing Co. v. Superior Drill Co., 162 Fed. 479), relate to one of the most important kinds of machinery employed in one of the great industries of the country — that of seeding grain. At the time when their infringement was going on, we are satisfied, from the records in the cases, the Ployt shoe drill and the Packham disc drill were leading implements in the work of seeding grain in a wide extent of territory and have had their value attested by the numerous infringements which the patents have suffered. They may to some extent have since then been improved upon, and their value diminished by the progress which has taken place in most of the mechanic arts, and the time for reaping the reward for their inventions is spent. But this only en
The decree should be reversed, with the costs of this court, and a decree entered for the complainant in the sum of $16,992.55, with interest from the date of filing the master’s report.
There is a cross-appeal, on which the individual defendants assigned error because, as they say, there is no proof that they personally infringed. This is an objection which should have been advanced at the original hearing. Tt was then decreed that these individual defendants infringed the patent. But it was not determined to what extent the several defendants infringed. It not being shown that these individuals personally interfered in the infringement, or otherwise than as corporate officials, we think they should be charged with nominal damages of $3 only; and it is ordered that the decree as to those defendants be modified accordingly. The defendants Brennan & Co. on the cross-appeal assign as error that the court below should not have awarded the costs of suit against them. If the decree upon the merits were sustained, it would seem that taxing the costs of the suit to the defendant, the decree having been in its favor, was erroneous. It is, however, to be reversed, and the motive which led the court to charge the defendants with costs no longer avails. But the difficulty we encounter is that, while the introduction of some of the testimony seemed to the court below useless and unnecessary, the record made on this appeal does not show to what part of the testimony this criticism of the court was directed, nor furnish us the means of distinguishing between what was pertinent to the inquiry before the master and what was not. If counsel intended to press this objection here, they should have seen to it that the record should contain the data needed to decide it.
We see no alternative but to overrule it, and in this respect affirm the decree of the Circuit Court.
