delivered the opinion of the court.
Thomas Sayles, as assignee of the lettérs-patent originally granted to Henry Tanner for an improvement in railroad car brakes, dated. July 6, 1852, and which, on July 5, 1866, were renewed and extended for the additional term of seven years, which expired July 6, 1878, filed his bill in the court below on Dec. 9, 1878, against the Lake Shore and Michigan Southern Railway Company. He avers that, by virtue of the assignments to him, he was invested with all rights of action for infringements of the patent which had occurred, and particularly
The prayer of the bilk is that the defendant may be compelled to account for and pay to the complainant all the gains, profits, arid savings which it derived,"received, or realized from or by reason of the use of said brakes.
To this bill a general demurrer was filed, alleging, as grounds thereof, that the bill does not contain any matter of equity on which the court could grant any relief, and that the compláinant is not entitled to the relief prayed for, because he had a plain, adequate, and complete remedy at law, and also because it appeared on the face of the bill that the causes of complaint were barred by the Statutes of Limitation both of the United States and of the State of-Illinois-
This demurrer, was sustained and the bill dismissed. The decree of the Circuit Court was brought here' for review. Say les having died, Charles T. Root was, as his executor, substituted in this court as the appellant.
The propositions mainly relied upon by the appellee in support of the decree, are, — ' ■ - '
. First, That after the expiration of a patent, equity has no jurisdiction to entertain a bill, .merely for an account and the recovery of the profits of an infringer; during its existence, the remedy being at law for damages ; and,
Second, That, even if, in certain cases, such' a jurisdiction exists, the present does not fall within it.
On the other hand, it is contended on the.part of. the appellant that, in cases for the enforcement of the rights of patentees, resort may be had, as matter of right, to a court of 'equity, as a distinct head of its jurisdiction, for the ..mere purpose’of establishing an infringement and ascertaining and recovering the profits of the infringer, upon the independent equity that, he is for that purpose a trustee of his gains for the
' An examination of’ the practice and opinions of the Circuit Courts undoubtedly shows much diversity, incapable of reconciliation, and'makes, it necessary, .as far as it can be done, by a deliberate judgment, of this court, to remove the question out of its present uncertainty, by a .settlement upon some basis of principle, in harmony with our system of equity jurisprudence,, developed and modified by legislation. To effect this satisfactorily and- intelligently, it will' be necessary to review the course of legislation, and judicial decision in this court, so far-as it bears upon the question from the beginning.
Prior to the passage of the act of Feb. 15, 1819, c. 19 (.3 Stat. 481), Congress had passed three laws,* in execution of the power conferred by. the Constitution itself, * and in furtherance of the’ policy thereby indicated, to secure- to inventors an exclusive right of property in their inventions. The first of them, the act of April 10, 1790, c. 7 (1 Stat. 109), gave as a remedy for its violation an action at law upon the case for damages, and forfeited the infringing article. The next was the act of Feb. 21, 1793, c. 11 .(1 Stat. 318), which fixed the rulé and measure of damages' recoverable in an action at law upon the act at three times the price at which the patentee had usually sold or licensed to other persons the use of the invention. This was changed by the act of April 17, 1800, c. 25 (2 Stat. 37), to three times the actual damage sustained by the patentee by reason of the infringement. "By neither- of these acts, however, was any jurisdiction conferred upon the courts of the United States in equity. In
Livingston
v.
Van Ingen
(
Congress then passed the act of Feb. 15, 1819, c. 19, which-enacted “that the Circuit Courts of the United States shall have original cognizance, as well in equity as at law, of all actions, suits, controversies, and cases arising under any law of the United States, granting or confirming to authors or inventors the exclusive right to their respective writings, inventions, and discoveries; and upon any bill in equity, filed by any party aggrieved in any -such cases, shall have 'authority to grant injunctions, according to the. course and principles of courts of equity, to prevent the yiolation of Jhe rights of any authors or inventors secured to them by any law of the United States, on such terms and conditions as the said courts may deem fit and reasonable.”
In the case of
Sullivan
v.
Redfield
(
The substance of the act of 1819 was incorporated into the seventeenth section of the act of July 4, 1836, c. 357 (5 Stat. 117), so far as it related to inventors, but remained in force, after the passage, of the latter act, so far as it gave cognizance to the courts of the United States .of cases of copyright. It was under that, provision of the act of 1819 that the case of
Stevens
v.
Gladding
arose and was decided.
The seventeenth section of the act of 18-36 differs from the act of 1819 in one other particular only. It makes the jurisdiction in patent causes of the court of the United States exclusive.
It was under the act of 1836 that the question arose for the first time, in
Livingston
v.
Woodworth (15
How. 546), as to the rule for computing the profits of an infringer, upon a decree for such an account. .The bill was for an injunction and' account. The validity of' the patent and the fact of infringement were both admitted by the defendant, who con- . sented to a decree requiring him to account for and pay over the gains and profits made by him, during the infringement, in accordance with the prayer of the bill. The decree confirmed the report of the master, who awarded, not actual gains and profits, but such as he estimated the defendant might have made by due diligence. It was argued, in support of the .decree, that where the court has jurisdiction to give the principal, relief sought, it will make a complete decree, and give compensation for the past injury, as in- bills for specific performance and injunction bills for waste; and that it was a correct rule to hold the party accountable, as an involuntary trustee, for what the patentee might have realized by the same exercise of the right, as a court of equity sometimes forces the character óf a trustee upon an intruder, or wrong-doer, or one' in possession under color of right, or who takes rents'or profits belonging to another, or might have taken them, as in cases of mortgagees ; but it was admitted that the case was of first impression. The decree, upon this point, was reversed. The court said; “We are aware of no rule which converts
&
court of equity into an instrument for the punishment of. simple ■ torts. . ." If tlie~appellees, the plaintiffs below, had sustained
This rule in relation to the profits recoverable in such suits was followed in.
Dean
v.
Mason
(
• The important case off
Seymour
v.
McCormick
(
In
Rubber Company
v.
Goodyear
(
Mowry
v.
Whitney
(
In
Packet Company
v.
Sickles
(
The doctrine of this case was reiterated in
Burdell
v.
Deniy
(
“Profits are not the primary or’true criterion of damages for infringement in an action at law. That rule applies eminently and mainly to cases in equity, and is based on the idea that the infringer shall be converted into a trustee, as to those profits, for. the owner of the' patent which he infringes; a principle which it is very difficult to apply in a trial-before a jury, but quite appropriate on a reference to a master, who can examine defendant’s books and papers, and examine him on oath, as well as all his clerks and employes. On the .other ■hand,' we have repeatedly held that sales of' licenses of machines, or of a royalty established, constitute the primary and true criterion of damages in the action at law. No dpubt, in the absence of satisfactory evidence of either class in the forum •to. which it is.most appropriate, the other may be resorted to "as -one of the elements on which the damages or the compensation may be ascertained.”
Littlefield
v.
Perry
.(
By the act of July 8, 1870, c. 230, Congress revised, consolidated, and amended the statutes relating to patents ajnd copyrights. -16 Stat. 198. The' fifty-ninth section renewed the provision previously in force, that damages- for infringement might be recovered by action on the case, and that whenever, in any such action, a verdict shall'be rendered for the plaintiff, the court m¡ay enter judgment therein for any sum above the amount found by the verdict as the actual damages sustained, .according to the circumstances of the case, not exceeding three 'times the amount of the verdict. The fifty-fifth section is as follows-: —
“ That all actions, suits, controversies, and cases arising Under the patent-laws of the United States shall be originally cognizable,as well in equity as at law, by the Circuit Courts of the United States, or any District Court having the power and jurisdiction of a Circuit Court, or by the Supreme Court of the District of Columbia,- or of any Territory; and the court shall have power, upon bill in equity filed by any .party aggrieved, to grant injunctions, according to the course and principles , of courts of equity, to prevent the violation of any right secured by patent, on such terms as the court may- deem reasonable; and upon a decree being rendered in any such..cases for an infringement, the complainant shall be. entitled to recover, in addition to the profits to be accounted for by the defendant, the- damages the complainant has sustained thereby, and the court shall assess the same or cause the .same to be assessed Under its direction, and the court shall have the same powers to increase the same in its discretion that are given by this act to increase the damages found- by- verdicts in actions upon the case; but all 'actions shall be brought during the term for which the lettersqmtent shall be granted or extended, or within six years after the- expiration thereof.”
These provisions , are substantially 'carried into the Revised. Statutes, sect.. 59 of-, the .act oh, 1870,/being sect., 491-9-.of the
In the case of
Birdsall
v.
Coolidge
(
Mr..Justice Clifford, in the' opinion in this case, quotes a passage,, slightly altered, from Curtis on Patents, sect. 341
a
(4th e'd.), p. 461, which, taken by itself, might seem to imply that' prior to the act of 1870 the owner of a patent had the election to resort to-a court of equity for the recovery of profits, or á court of law for damages, irrespective of any other -relief of an equitable character; but the language of the passage is to be restrained to mean merely that the option existed to sue at law for ]past infringement, or seek equitabje relief by way of prevention, the damages or profits following, as either jurisdiction is resorted to, each according tp its . kind. For if this be not so, it follows that, since the passage of the act of-1870 an owner of a patent may recover, in a suit ■ in equity, profits and damages in all cases, according to tlie ■ rule above stated, without .seeking any other relief whatever, (he effect of which would be to give two remedies, one in equity, the other at law,merely for the recovery of damages for an injury to a legal right, an anomaly not to be found, in any other branch of our jurisprudence. And manifestly, upon such a construction, the a'6tion:at law would soon become obsolete, as completely as if it had been abolished by.legislation. The whole force of the change in.' the statute consists in - conferring upon courts of equity, in the exercise of their jurisdiction in administering the relief, which they are accustomed and authorized to givé, and which is appropriate to their forms of procedure, the power
But the difference between the state of the -law before and after the act of. 1870 finds its best illustration in a comparison between two cases, both of which were decided at the October Term, 1877, Elizabeth v. Pavement Company, 97 U. S.126, and Marsh v. Seymour, id. 348.
In the former the bill was filed, before the passage of • the act, but prayed, besides an injunction, for- both damages and profits. -It was held that the court below had rightly decided that a decree-for profits alone could be rendered, inasmuch as the jurisdiction of courts of equity to decree damages, as distinct from profits, was first conferred by the statute. Mr. Justice. Bradley, delivering the opinion of the court, remarking that the general question- of the ’profits recoverable in equity by a patentee was surrounded with many difficulties, which the courts had not yet succeeded in overcoming, said : —
“But one thing may be affirmed'with reasonable confidence, that, if air infringer of a patent has realized no profit from the use of the invention, he cannot be called upon to respond for profits; the patentee in such case is left to his remedy for damages,. It is also clear that a patentee is entitled to recover the profits that have been actually realized from the use of his invention, although from other causes the general business of the defendant, in which the' invention is employed, may - not have resulted in profits, — as when it is shown that,the use of his invention produced a dtefinité saving in the process of a manufacture.
Mowry
v. Whitney,
Accordingly, in that case, ,the bill was dismissed as to the city of Elizabeth, which had infringed, because it appeared that it had made no profit from the use of the patented improvement, while a decree was rendered against the contractor, who had laid the pavement which was the _ subject of the patent, because he was shown to have made profits from the infringement. The municipal corporation, of course, remained liable to respond in damages in an action at law for any loss which the plaintiff could have established by proof.
The cases of Marsh v. Seymour (supra) arose under the act of 1870, and were bills for injunction and account. Decrees were rendered in favor of the complainant, and a reference ordered to a master to state an account of profits. In both cases, the respondents showing that they had made no profits by reason of the use' of the invention, the complainant waived his claim for. a recovery on that account, and decrees were rendered for damages on the basis of a license fee for the infringing machines which had been sold, and nominal damages for those manufactured but not sold. These decrees were affirmed, the court saying, Mr. Justice Clifford delivering its opinion, that “ damages of a compensatory character may be allowed to a complainant in an equity suit, where it appears that the business of the infringer was so improvidently conducted that it did not yield any substantial profits, as in the case before, the court.”
Hendrie
v.
Sayles
(
This appears to be the only Ccise of the kind, until the present, that found its way into this court.
Eureka Company
v.
Bailey Company
(
All the acts of Congress relating to patents prior to that of 1870 contained provisions specifying the special defences which might be made in an action at law for an' infringement,, under the plea of the general issue, notice thereof having been previously given. The sixty-first section of the act of 1870 enumerates the several special matters thus authorized to be •proved, and adds, for the first time in the history of this legislation, the clause that “ the like defences may be pleaded' in any suit in equity for relief against an alleged infringement, and proofs of the same may be givenuipon like notice in the' answer of the defendant and with the like effect.”
The plain and obvious purpose of this provision is to furnish appropriate modes in equity pleading for the trial of. all issues, both of fact and law, relating b.oth to the alleged infringement and the validity of the patent, without the necessity of framing special issues out of chancery for trial by jury, or sending the parties to a court of law for the trial of an action in that forum, in order to determine their legal right. It proceeds upon the idea that the court of equity having acquired jurisdiction for the .purpose of administering the equitable relief sought by the bill, may determine directly and for itself,' in the same proceeding, all questions incidental to the exercise of. its. jurisdiction, notwithstanding they may be quéstions affecting legal rights and legal titles.
Although this was the first statutory authority for the practice, it was rather a recognition of what had already been established than its’introduction for the practice had, in fact, originated long before, and was based upon well-known principles of equity jurisprudence. Whatever question may have existed in reference to it previously was settled in the courts of the United States by
Goodyear
v.
Day
(
It is impossible, we think, to maintain the claim that the-language of this act, similar in that respect to the previous acts of 1819 and 1836, conferring jurisdiction in patent cases in equity as well as at law, was meant to obliterate the distinctions between these two jurisdictions, or even to confuse the boundaries between them, as it is alleged" was done by the decision in the case of
Nevins
v.
Johnson
(
It becomes necessary, therefore, to consider what support there is in the general doctrines of -equity for the contention of the appellant.
It is the fundamental characteristic and limit' of the jurist-diction in equity that it cannot give relie| when there is a plain and adequate and.complete remedy at.law; and hence it. had no original, independent, and inherent power to afford redress for breaches of- contract or torts, by awarding damages; for to do that. was the' very office of proceedings at law. j-When, however, relief was sought which .'equity alone could give, as by way of injunction to prevent a continuance of the wrong, in
order-ter
avoid multiplicity of suits and to do complete justice, the court assumed jurisdiction to award compensation-for the past injury, not, however, by assessing damages, which was the peculiar office of a jury, but requiring an. account of profits, on-the ground that if any had been made,-it was equitable to require the wrong-doer to refund them, as it would be inequitable that he should make a profit out of his own wrong. As was said by Vice-Chancellor Wigram in
Colburn v. Simms
(2 Hare, 543), “ the court does not'by an account accurately measure the damage sustained by the pro
Whether a bill for an account of profits against a wrong-doer would lie, independently of other equitable grounds for the intervention of the court, is a question, as was said by Lord "Chancellor Brougham in Parrott v. Palmer (3 Myl. & K. 632), “ which has been oftentimes agitated, and has, perhaps, never received a clear and a general decision ; that is to say, a distinct judgment on the general proposition, with its limitations.” He concluded that, “ from the whole it may be collected that, although as to timber there exists considerable discrepancy, yet the sound rule is to malee the- account the incident and mt the principal, where there is a remedy at law; but that mines are to be otherwise considered, and that as to them the party may have an account even in cases where no injunction Avould lie.”
The supposed exception in cases of mines seems to rest upon a
dictum
of Lord Hardwicke in
Jesus College
v.
Bloom
(3 Atk. 262), that “ it was a sort of trade ; ” but the reference is to the case of
Bishop of Winchester
v.
Knight
(1 P. W. 406), where the bill prayed for an account of ore dug by" the ancestor of the defendant, in respect to which the argument was, that being a personal tort it died with the person. The decision was that the plaintiff was not entitled; but on this point the Lord Chancellor said: “ It would be a reproach to equity to say, where a man has taken my property, as my ore or timber, and disposed of it in his lifetime and dies, that in this case I would be without remedy. It is true as to the trespass of breaking up meadow or ancient pasture ground, it dies Avith the person ; but as to the property of the ore or timber, it Avould be clear, even at law, if it. came to the executor’s hands, that trover would lie for it; and if it has been disposed of in the testator’s lifetime, the executor, if assets are left, ought to answer it.” It is plain from these observations that the assumed ground of the equity jurisdiction was the absence of any remedy at law.
Powell
v.
Aiken
4 Kay & J. 843. It is now
The samé rule is applied by the modern decisions in cases of mines, where, as incident to the relief ¿ought by a bill; an account is asked of profits against trespassers. It appears that as to the mode-of; assessing compensation, in such suits, to an owner of coal which has been improperly worked by the owner of an adjoining mine, a different principle iá applicable when, the coal is taken inadvertently, or under d,
bona fide
belief of title, and when it is taken fraudulently, with knowledge of the wrong. In cases of the latter description, at law, the strict rule of damages laid down in
Martin v. Porter
(5 Mee. & W. 851) was to charge the value of dhe coal without allowing any of the expenses of getting it; but in those of the. former description a milder rule was applied in
Morgan
v.
Powell (3
Q. B. 278) and
Wood
v.
Morewood
(id. 440), which was to give to the plaintiff'the fair value of the coals,as if the;coal-, field had been purchased from him .by .the defendaiit. This distinction was adopted and the latter rule applied in equity, by Vice-Chancellor Malins in
Hilton
v.
Woods
Law Rep. 4 Eq. 432), and by Lord Chancellor Hatherley
in Jegon
v.
Vivian
(Law Rep. 6 Ch. App. 742), the latter remarking that “this court never allows a man to make profit by a wrong.” This rule was adopted in
Stockbridge Iron Co.
v.
Cone Iron
Works,
The same rule applies in England in patent and copyright cases. The Vice-Chancellor Page-Wood, in
Smith
v.
London & Southwestern Railway Co.
(Kay, 408);
said:
“ The true ground of relief in these cases is laid down in
Baily
v.
Taylor
(1 Russ. & M. 73), where Sir J. Leach, M. R., says: ‘ The court has no jurisdiction to.give to a plaintiff a relnedy for an alleged piracy, unless he can make out that he is entitled to the equitable interposition of this court by injunction ; and in such case the court will also give him. an account, that his
In the case of
Price's Pat. Candle Co.
v.
Bauwen's Pat. Candle Co.
(4 Kay & J. 727), the bill was dismissed, because the patent having expired
pendente
lite, the relief by injunction could not be granted at the hearing; but in
Davenport
v.
Rylands
(Law Rep. 1 Eq. 302), the same judge retained the bill, under similar circumstances, for the purposes -of an inquiry' as to damages, -because the act of 21 & 22 Vict., c. 27, commonly .called Cairn’s Act, passed after the fóTmer decision; had altered the rule. That statute déelared that in all cases in which the court has jurisdiction to entertain an application for an injfmction against ^ breach of any covenant, contract; or agreement,
Mr., Kerr, in his treatise on Injunctions, 41, summarizes the result of many decisions, which 'he cites, under this statute, as follows: “ The statute did not transfer to the court the general jurisdiction of common law by way of damages, or extend its jurisdiction to cases where previously to the statute it had no jurisdiction, or could not, consistently with its rules and principles, have interfered. The statute merely empowered the court to give damages in cases involving elements or ingredients of an equitable character. If the case as presented to the court was an equitable one, so that the subject-matter of the application is properly cognizable in equity, the court had jurisdiction under the statute to entertain the question of damages. If, on the other hand, the plaintiff had no equitable right at the time of bringing the action, so that the matter has been improperly brought into equity, the statute had no application. Damages may be awarded under the statute if it appear that at the time of bringing the action there was an equitable case, although the case for an injunction fails, or although an injunction is not competent from circumstances which have occurred since the .filing of the bill.”
It will be observed that the British statute does not. touch
. This firm and indisputable doctrine of the English chancery has been recognized and declared by this court, in
Hipp
v.
Babin
(
In reply to these points, Mr. Justice Campbell remarked that “there are precedents in which the right of an infant to treat a person who enters upon his estate with notice of- his' title, as guardian or bailiff, and to exact an account in equity for the profits for the whole period of -his occupancy, is recognized.” “ But,” he. added; “ in those cases the title must, if disputed, be established at law, or other grounds of jurisdiction must be shown.” “ Nor can the court retain the bill under an impression that a court of chancery is better adapted for the adjustment of the account for rents, profits, and improvements. The rule-of the court is, that when a suit for the recovery of the possession can be properly brought in a court of equity, and a decree is given, that court will direct an account as an' incident in the cause. But when a party has a- right to a possession which he can enforce at law, his right to the rents and profits is also a legal right, and must be enforced in the same jurisdiction. The instances where bills for an'account of rents and profits have been maintained .are those in which special grounds have been stated, to show that courts of law could not give a plain, adequate, and complete remedy. No instances exist where a person who had been successful at law has been allowed to file a bill for an account of rents and profits during the tortious possession held against him, or in which the complexity of the account'has afforded a motive for the interposition of the Court of Chancery to decide the title and to adjust the account.”
These principles were announced in a case for the recovery of the possession of real estate held adversely, but they are of general application, and embrace, as well, the case of
The- distinct ground upon which the. opposite view is presented to us in argument is, that the infringer of a patent-right is, by construction of law, a trustee of the profits derived from his wrong, for the patentee, and that a court of equity, in .the exercise of its acknowledged jurisdiction over trusts and trustees, will require him to account as trustee, without reference to any other relief. And in support of this contention we are referred to passages in the judgments of this court in the cases of Packet Company v. Sickles, Burdell v. Denig, and Birdsall v. Coolidge, all of which have been already cited in this opinion, supra, pp. 198, 199.
But the inference sought to be drawn from the expressions referred to is not warranted. It is true that it is declared in those cases that, in suits in equity for relief against infringements of patents, the patentee, succeeding in establishing his right, is entitled to an account of the profits realized by fhe infringer, and that the rule for ascertaining the amount of such profits is that of treating the infringer as though he were' a trustee for the patentee, in respect to profits. But it is nowhere said that the patentee’s right to an account is based upon the idea that there is a fiduciary relation created between him and the wrong-doer by the fact of infringement, thus conferring jurisdiction upon a court of equity to administer the trust and to compel the trustee to account. That would be a
reductio ad absurd-urn,
and, if accepted, would extend the jurisdiction of equity to every case of tort, where the wrong-doer had realized a pecuniary profit from his wrong. All that was meant in the opinions referred to was to declare according to what rule of computation and measurement the compensation of a complainant would be ascertained in a court of equity, which, having acquired jurisdiction upon some equitable grounds to grant relief, would retain the cause for the sake of administering an entire remedy and complete justice, rather than send him to a court of law for redress, in a second action. The rule adopted was that which the court in fact applies in cases of trustees who havé committed breaches- of trust by an unlawful use of the trust property for their own advantage ; that is, to
The case is not within the principle, according to which, in certain circumstances, a court of equity decrees a wrong-doer to be a trustee
de son.tort,
and exerts its jurisdiction over him in that character. Where a defendant has wrongfully inter-meddled with property already impressed with a trust, he may be required as a trustee to account for it, as was done in the case of
People
v.
Houghtaling
(
Our conclusion is, that a bill in équity for a naked account of profits and damages, against an infringer of a patent cannot be
The case of Garth v. Cotton (1 Dick. 183) furnishes an interesting and curious ..illustration of on e-of the excepted cases. In that case Lord Hardwicke sustained a bill in equity, in a case of waste, for. an ác.count of timber felled ’ and sold, where there could be no injunction, in favor of a complainant unborn at the- time of its commission, whose estate Was a contingent remainder,'supported by a limitation to trustees to preserve it, the defendánt being the owner of a prior term-of years, and the ultimate remainder-man in fee. The Lord’. Chancellor proceeded on the ground of collusion between the defendants and a nominal- or imputed breach of trust on the part of the trustees to preserve the contingent remainder in permitting the wrong; and distinguished the case from Jesus College v. Bloom (3 Atk. 262), particularly "on the ground that the complainant could have no remedy at law. Another instance of an exception is mentioned by Vice-Chancellor Page-Wood in the extract from his judgment in the case of' Smith v. The London & Southwestern Railway Co. (Kay, 408), contained in a previous part of this opinion.
It does not appear from the allegations of the bill in the present case that there are any circumstances which would
Decree affirmed.
