Covert v. Sargent

| U.S. Circuit Court for the District of Southern New York | Mar 18, 1889

Wallace, J.

The exceptions in this case challenge the correctness of the master’s report, botinas to. the profits and damages which the complainant should recover for the infringement of his patent. Whore, as in the present Cease, á'patentee elects'to enjoy his ¿ioUópóly under a. patent by manufacturing and selling the patented device, without granting ¡licenses,.and'anqther ipvades his right by making and selling it in competition with him, the measure of damages -for the wrong is the profits which the. patentee has. lost in consequence of the unauthorized sales made by. his competitor. The difference between the cost price to the patentee and the price he could have realized except for the interference bf the infringer represents'the profit lost on each sale; but in order to establish the amount of his loss he must show by satisfactory evidence to .what extent the competition of-the infringer has diverted sales which he would otherwise have made himself. This case seems to have been presented to the piaster upon the theory that the complainant was entitled to recover against .the defendants the profits he would have made if he h^d sold all the infringing devices which were sold by the defendant. The cases are very.rare and exceptional in which it can be presumed, without evidence directly to the point, that the patentee would have sold all the devices which were sold by the infringer. Frequently competition stimulates the demand in the market for a given article, and the zeal and energy of competing dealers are an element which cannot be ignored. The patentee is not required to show by direct evidence that he would have made' all or some part of the sales which -were made by his competitor, and indeed generally it would be impossible to do so; but he must, prove facts and circumstances which legitimately create the pre-surirption that he-would have made the sales himself had it not been for the sales of the infringer.- In the present ease it is impossible to determine from the testimony which has been introduced how many thimbles' the complainant w.ould have sold if the defendants, instead of selling' the thimbiés of the patent, had confined themselves to selling the other. fastening.-.devices,' which they were at liberty to sell, and which ■were being sold by others. The patented articles are not so superior to the oth'er fastening- devices as to give rise to any cogent presumption that those who purchased them of the defendants would have bought them óf‘tile complainant in'preference to the other, devices,, and without ref-erepce .to the--difference in -price, if they could not have bought them elsewhpref Eyidencej however, was given that customers of the complainant stopped buying the patented devices of him after the defendants offered them' at a reduced price, and then became and continued cüstomers of the defendants. This testimony authorized the presumption that the. Complainant lost the sales 'made by the defendants to .these purchasers; -but’.here, again the cpipplainant failed to show the amount of.his loss.- :.He did -not prove how many thimbles the' defendants sold. Therstatements of sales'furnished by the 'defendants do not give the number, or any data from'which the number can be-computed. The statements give the.name-and-datés bísales,'.aiid'the sums, in-gross charged or rgCeiyedybtit the'-sums, represent,charges or receipts for other articles sold with tlie thimbles, and do not give any information which enabled the master to ascertain what part is for thimbles, or the number of thimbles sold. The master could not have made any different findings with respect to damages, and the exceptions to these findings must be overruled. The only evidence before the master to show that the defendants made any profits by the sale of the patented thimbles is their own admission, in the form of a stipulation. The evidence was that they were the selling agents at the city of New York of a Connecticut corporation by which the thimbles were manufactured, and sold the thimbles, as.well as other articles manufactured by the Connecticut corpoi’ation, without commission. The stipulation is that one of the defendants received $750, and the other the sum of $250, from the Connecticut corporation, which sum represented their respective interests as members of that corporation in the profits, made by the corporation from the manufacture and sale of the thimbles. There is no merit in the exceptions filed by either party to the findings of the master in respect to profits. The decree, however, will charge each defendant with the profits which he severally derived, instead of charging both, jointly for $1,000.