Lead Opinion
delivered the opinion of the court:
This is an action brought by a patentee to recover his royalty upon certain cartridge-boxes covered by his letters patent, which were manufactured by the defendants’ Ordnance Department., under an implied license from the jiatentee.
The learned counsel for the defendants resists a recovery upon the ground that letters x>atent do not exclude the government from the free use of a patented invention. He cites, to sustain the proposition, the English cases of Feather v. The Queen (6 B. & S., Q. B., 237) and Dixon v. The London Small Arms Company (10 Law Rep., Q; B., 130, 1874 —’75; 1 Law Rep., Q. B. Div., 384, 1875-’76; 1 Law Pep. ax>peal cases, 632., 1875-’76), and it may be conceded that such is the law of England. The resulting question is wdiether that is likewise the law of this country.
Invention in the useful arts seems to have been i>eculiarly a product of the Anglo-Saxon mind. But the common law, which, dealt with things tangible and material, did not recognize prop
During’ the reign of Elizabeth it was the policy of the Crown to raise as little revenue as possible by direct taxation, and as much as possible by the sale of monopolies. In the forty-fourth year of her reign, the burdens borne by the nation through this method of indirect taxation had become so intolerable that they produced an outbreak in Parliament; and the extraordinary extent to which the system had been carried is nowhere so well stated as in the report of the debate on the bill entitled “An act for the explanation of the common law in certain eases of letters patents,” moved b3 Mr. Lawrence Hyde on the 20th November, 1601, a debate in which both Sir Walter Raleigh and “Mr. Francis Bacon” participated.
Sir Robert Wroth said: “There have been divers patents .granted since the last Parliament; these are now in being, viz: the patents for currants, iron, powder, cards, ox shin-bones, train -oyl, transportation of leather, lists of cloth, ashes, anise-seed,
On a subsequent day, the Queen being pleased, in the language of the speaker of the house of commons, “to lay the axe of her princely justice at the root of the tree,” signified, through him, to Parliament that some of the obnoxious patents “ should be presently repealed, some suspended, and none put in execution but such as should first have trial according to the law for the good of the people.” And in consequence of this assurance the bill “for the explanation of the common law in certain cases of letters patents” was laid aside.
But in the following year, 1002, there came before Chief Justice Popham and all the judges what has ever since been known as the great Case of Monopolies, D’Arcy v. Allen (Moore, 671; Noy, 179; 11 Co., 86), in which the distinction is clearly taken between patents “where any man by his own charge and industry or by his own wit and invention doth bring any new trade into the realm, or any engine tending to the furtherance of a trade that never was used before,” and patents to create a monopoty of things public and restrain them to a private use. And in 1623 (the abuse of patents having been revived) there was enacted the Act concerning Monopolies (21 Jac., I, cap. 3).
This celebrated statute continued to define the law of England concerning patent rights for inventions when the decisions in Feather v. The Queen and Dixon v. The London Small Arms Compcmy (supra) were rendered. It prohibits almost every conceivable form of monopoly, but declares two notable exceptions:
In this country, on-the contrary, our organic law recognizes in the clearest terms that mind-workwhichwe term inventions. What immediate reasons operated upon the framers of the Constitution seem to be unknown, but it is plain that they had a (dear apprehension of the English law, on the one hand, and a just conception, on the other, of what one of the commentators on the Constitution has termed “a natural right to the fruits of mental labor.” Instead of placing our patent system upon the English foundation of executive favor and conferring that prerogative of the Crown upon the President, they transferred all authority to the legislative department of the government (the department which regulates rights), by placing it among the specially enumerated powers of Congress.
It is a noticeable fact, which, however, seems to have received very little attention, that neither the word “patent” nor the word “grant” is used in the Constitution. (Art. 1, § 8.) The words which it docs employ, moreover, are unmistakably clear in the intent of its recognition. The language of the English law is, in substance, that the Crown may grant or confer upon the inventor a patent, subject to the conditions and limitations which attach by implication to grants from the Crown. The
Pursuant to the plain intent of the Constitution, Congress have never sought to attach such a condition to the issuing of a patent; private acts have been passed remitting claims for the use of patented inventions to this court for adjudication; statutes have been enacted prohibiting or regulating the use of patented articles in the government service (12 Stat. L., 91,104, § 3; Rev. Stat., § 1537); appropriations have been made to pay inventors the royalty justly due for their property thus taken for public use; the executive departments have freely resorted to patented articles for the purposes of the government, and have made them the subject of express contracts. The course of the legislature and the practice of the executive alike forbid the assumption that this government has ever sought to appropriate the property of the inventor, or that it has ever asserted an inherent right to do so analogous to that reserved in Great Britain by the Crown.
The decisions of the judiciary, so far as they have gone, also seem to be in harmony with the action of the other departments of the government.
The counsel for the defendants also insists that the action of the government in resorting to the claimant’s invention was either a tort or a user under a gratuitous license from him. We are unable to adopt either of these extreme views. When a vendible article, such as ordinarily is the subject of bargain and sale, is offered by a producer to a consumer, though with no price specified, and is accepted and used by the latter, it is not to be supposed, on the one hand, that the offer was intended as a gift inter vivos, nor implied, on the other, that the taking was with a tortious intent. In this case the Secretary of War had convened one of those military boards for the selection of arms and ordnance before which inventors and manufacturers are accustomed to appear and present their devices or manufactures with a view to an ultimate sale. The claimant transmitted to the proper and responsible officer of the defendants, their Chief of Ordnance, two specimens of his invention, accompanied by a letter, in which he expressly described them as his
The counsel for the defendants has also argued that this court is without jurisdiction of an action upon a patent right except, in the limited class of cases where jurisdiction may be entertained by State courts, because the law has placed the jurisdietion elsewhere.
The answer to this proposition seems to be that an exclusive
But all of these decisions go upon the express ground that the party has a remedy elsewhere. In the present case the claimant has confessedly no remedy in the circuit court against the government, and is without a remedy to recover for his property taken for public use, unless the act creating this court gives him one. That act was passed long after the establishment of the patent system; it' is comprehensive in terms; it makes no exception either as regards the kind of property which maybe the subject of an implied contract or as regards the jurisdiction of other courts over suits between ordinary litigants. Where, as in this case, there is clearly an implied contract between the government and the citizen, and the suit is brought entirely upon that agreement, and the claimant is without judicial redress elsewhere, we perceive no reason why we should en-graft an exception upon the statute which Congress have not placed there.
Concluding that the claimant is entitled to recover upon an implied contract for the use of his invention, we now come to the question of damages.
The elements from which the court must estimate damages in this case are simply these: It appears (1) that the manufacturer’s price of the article, apart from royalty, is about $1.25 per box; (2) that 20 per cent, of the manufacturer’s selling price is ordinarily considered by manufacturers and patentees a fair royalty where the patent substantially covers the article sold, but not where it is in part made under two patents and embodies the improvements of two inventors, to each of whom a royalty will be properly due: (3) that in this case the box manufactured by the defendauts was not made exclusively under the claimant’s patent, but involved the right of another inventor, inasmuch as one of the claimant’s improvements was itself an improvement (for reasons hereafter stated) of the improvement of another patentee; (4) that in the judgment of a competent expert, familiar with inventions of this nature and well acquainted with prices paid by manufacturers for licenses, 25 cents a box ivas a fair and reasonable royalty for the right to manufacture and use the article in question, it being assumed, however, by him that the claimant’s patent covered the article exclusively, and that the manufacture did not involve an obligation to another inventor ; (5) that the claimant has not manufactured under his patent, and has sold licenses in but two instances, and then to a very limited extent, and amid circumstances which did not ipso facto raise a presumption that the price charged for the license would be its ordinary market value; (6) that in one of these instances the Arm of Walton Brothers, of New York, being iii
It is apparent here that the claimant has produced about all the evidence that the nature of his case admits of; and it is to be noted that the defendants have produced no evidence' whatever to controvert it. The claimant perhaps might have produced experts to estimate the value of the other inventor’s original improvement, but the manufactured article has been before us, and it is manifest that the testimony of such witnesses would have been entirely conjectural, and would amount to nothing more than substituting their judgment, from an inspection of the article, for that of the court.
The rate of damages in patent cases may now be said to be generally (1) that the plaintiff may recover in equity the profits which the infringer has made from the use of the invention, or (2) that he may recover at law the profits which he, the plaintiff, has lost by reason of the defendant’s infringement; and that these profits lost, where it can properly be done, will be regarded as simply the fee which would have been charged if the infringer had procured a licence. But in cases where the plaintiff has evinced an intention to exercise an exclusive user of his invention, and in cases where the sales of licenses have been too few to establish a criterion of their actual or market value, courts have sought for other elements or evidences to determine the profits lost. In Suffolk Company v. Hayden (
It is true that the established price of a license, or the profits lost by the patentee as a manufacturer, are the ordinary criteria for determining his damages in a suit at law; yet, nevertheless, where he has clearly suffered a material loss by the defendants’ use of his invention, and has produced all the evidence which the nature of his case admits of to establish the amount, there has never yet been a case in which his recovery has been restricted to nominal damages. Moreover, if such were the law, it is manifest that an ordinary infringer would occupy a defensive position as strong as that which the government holds in
Furthermore, if this court now admits this questionable evidence, and gives effect to it after it is admitted, by deducing from it such facts as a jury might deduce, the sufficiency of the evidence to sustain the finding may be made a matter of review in the Supreme Court on a proper statement of the facts. (Pugh’s Case,
We proceed now to state the theory upon which we compute the claimant’s damages.
It is conceded that the cartridge-boxes manufactured by the defendants were made in substantial conformity with the specifications of the claimant’s patent; but the counsel for the defendants has nevertheless brought in three prior patents, all of which he insists are more or less utilized in the manufactured article. In other words, that the gross amount of the royalty, the sum of 25 cents, is due not to the claimant alone but likewise in part to the other throe inventors.
The first of these patents is that issued to William Freeborn, December 10,1867. In it the cartridges are attached to both the front and back of the box. But they are all placed in the box in the same position, that is to say, with the fulminate up. The box is operated by raising a flap, which brings into view the upper tier or doublerow of cartridges. When this tier is emptied, a section of the front of the box, by unbuttoning a strap at eacli end, drops down, thus bringing into view the second tier of cartridges. When the second tier is in like manner exhausted, a second section of the front of the box may be in like manner unbuttoned and dropped, and a third tier be brought into view.
In the claimant’s box there is no flap to be raised. The cartridges attached to the front of the box are placed fulminate down. When the box is opened it divides from top, to bottom like a modern traveling-valise, the front falls down, thereby reversing its cartridges, bringing them fulminate up, and the entire contents of the box, by the single operation of unbuttoning a single button, are brought within the soldier’s reach. We perceive nothing in common between the two boxes, except the mechanical arrangement of attaching the cartridges to both the front and back of the box. The object which Freeborn had in view' was to rfeduce the thickness or clumsiness of the ordinary cartridge-box, and the means by which he attained that end was the successive bringing into view of tiers of cartridges by the process of dropping successive sections of the front of the box. The object which the claimant had in view was to dispense with the flap of the ordinary cartridge-box, and by the single operation of unbuttoning a single strap to bring the en
The second patent produced is that issued to J. E. King, November 15, 1870. This invention is not properly a box, but a scroll having cartridges attached to it, much as razors, combs, &c., are attached to a traveling dressing-case, which, when closed, i. e., rolled up, somewhat resembles a box. The peculiarity of it is that at the lower end of the scroll there is a double row of cartridges, the one attached to the outside and the other to the inside of the scroll, the one row with fulminate up, the other with the fulminate down. When the scroll is rolled up so as to form a box, it contains but a single tier of cartridges, which, however, is three deep; that is, contains three rows. The box is operated by raising a flap, by removing the cartridges from the two rows in which the fulminate is up, and then, by unbuttoning two straps and opening the scroll, reversing the third row, and thus bringing the remaining row of cartridges fulminate up. The only thing in common between this device and that of the claimant is that of placing a portion of the cartridges with the fulminate down when the box is closed. But the object of the two inventors and the means of attaining their objects are different and distinct.
The third patent is that issued to T. Chillingworth, June 15, 1869. There is one device in this invention which conflicts with one device in the claimant’s, and it is this: The lower tier of cartridges may be thrown forward, that is to say, inclined outward, so as to come within the more ready grasx> of the soldier. In the Chillingworth invention this is accomplished by a hinge attached to the outer lower edge of the tier, and is operated by unbuttoning a strap below and a strap above, and with the latter drawing the lower tier over. In the claimant’s invention it is accomplished by a bellows arrangement, something like that of the musical instrument known as an accordeon, and the device is substantially self-operating, requiring no loosening of straps to incline the tier, and no rebuttoning of them when the box is closed.
We therefore regard Chillingworth as the first inventor of this device, and the claimant’s invention as an improvement upon his. On the one hand, this fact did not authorize the de-
Tbe court is not agreed as to tbe extent to which tbe claimant should recover, but a majority of tbe judges, for tbe purpose of intelligibly presenting tbe entire case to tbe Supreme Court, concur in tbe following judgment:
That tbe claimant recover a license-fee of 20 cents a box on tbe 18,813 cartridge-boxes manufactured by tbe defendants, amounting in tbe aggregate to tbe sunvbf $3,762.60.
Dissenting Opinion
dissenting :
As tbe defendants manufactured and used tbe claimant’s improvement with bis consent, their acts were not tortious, but permissory; and unless tbe permission was intended and understood to be gratuitous, tbe claimant is entitled to recover tbe value of tbe invention to tbe extent of tbe defendants’ use of it, so far as be establishes that value by competent proof. In ascertaining it, tbe rules of law and tbe modes of applying them to tbe evidence are intermingled to such an extent, that it appears to me to be tbe duty of an inferior court to present tbe evidence on tbe point of value as facts, and tbe fact resulting from it as a mixed question of fact and law, in order that either
In practice, courts ordinarily resort to one of two standards in order to ascertain the value of an invention; 1st, the profits to be derived from the manufacture and sale of the patented article; or, 2d, the royalty fixed by the patentee and voluntarily paid by licensees. In the present case it is impossible to apply the first measure, because no sales of the manufactured article have taken place; and I think it is equally impossible to apply the second, because no voluntary purchase, of licenses have been made.
The claimant has granted but two licenses. The circumstances under which those were made preclude the idea of free action on the part of the licensee. If this were a jury case it Avould be the duty of the court to instruct the jury that, as the sales were made under duress, they are no evidence of the value which the purchaser attached to the royalty. Even if they had been voluntarily made by the purchasers, without the duress caused by the necessity of fulfilling their contracts, they are not sufficiently numerous to warrant us in accepting them as the measure of the damages to be imposed upon the defendants for their use of the claimant’s invention prior to the alleged sales. The character and standing of the parties to this transaction preclude the possibility of collusion; but it is plain that if such sales can be received as evidence of the just value of a license, so far as the opinion of this court can do it, the door is thrown open for fraud in futrue transactions between less reputable parties.
The claimant further oilers in proof the opinion of witnesses as to the probable value of the royalty on the claimant’s invention, derived from a knowledge of royalties on similar improvements fixed by inventors and paid by the public. This evidence is inadmissible, and in' my opinion, we are not warranted in forming any conclusion from it. The market value of a license is a fact, not an opinion. It is the price which the public is willing to pay and does .pay for the privilege of manufacturing and selling the patented article. To substitute for this ascertained or ascertainable fact the opinion of any one, no matter how learned in patents, as to what the public may at some future time be willing to pay for it when it shall be offered for sale, is wandering too far into the region of guesses.
Both parties have further offered proof as to the amount of benefit which the defendants have derived from the claimant’s Invention. In the absence of an established patent or license fee, and of all proof as to profits derived or derivable from the use of the invention, evidence of this kind is the best that can be procured. In the language of the late Mr. Justice Nelson, “What evidence can be more appropriate and pertinent than that of the utility and advantage of the invention over the old modes or devices that had been used for working out similar results ? ” (Suffolk Company v. Hayden,
The proof on this point shows, first, that on the recommenda
The defendants, who had on hand 18,000 manufactured boxes of this kind, are now using them for the latter purpose. There are some facts found which would warrant a jury in finding that, when the defendants’ agents approved and manufactured the cartridge-boxes, they thought that they were to do it without the payment of a royalty, but there is nothing to show that the claimant authorized or contributed to this impression; and apart from his long silence while they are manufacturing, and his delay in fixing an amount for the royalty, there is nothing to indicate that he shared in the impression. On the case as it stands, the claimant would be entitled to recover the value of the benefit which the defendants derived from the use of his invention if he had proved it. But he furnishes no data by which this value may be measured. The case, therefore, comes within the principle of New York v. Ransom (
In my opinion tbe claimant is entitled to recover only nominal damages.
Concurrence Opinion
concurring:
I concur in tbe opinion about to be read, by Judge Davis, except as to tbe admissibility and effect of tbe claimant’s evidence as to bis damages. Under tbe circumstances, I think tbe evidence was tbe best that tbe nature of tbe case admits of, and that it is not excluded under any principle of law. Standing uncontradicted in tbe record, I think we are bound to give it effect, and that it establishes the claimant’s demand for damages. I concur in tbe conclusion of Judge Nott.