214 F. 550 | 9th Cir. | 1914
(after stating the facts as above). 1. The plaintiff is a manufacturer and seller of the machines covered by his patent, and the sole profits which he derives from his patent are those arising from the manufacture and sale of the machines covered thereby. The suits brought by the plaintiff, and sought to be enjoined
The theory of the defendants’ petition is that, under the accounting ordered in the interlocutory decree entered in the court below, the plaintiff would receive full compensation for all infringing machines which' had been manufactured and sold by the defendants in violation of the plaintiff’s patent; that such machines would be thereafter released from any claim on the part of the plaintiff by virtue of his patent; and that the plaintiff, pending the entry of the final judgment against the defendants in this suit, is not entitled to bring or maintain any suits against the persons or corporations," customers of the defendants, to whom the infringing machines had been sold by the defendants, and who were users of them at the time of the institution of the various suits sought to be enjoined; ■
The defendants were manufacturers of and general dealers in machinery of various kinds used in the business of fruit packing, and it is not to be denied that the institution and prosecution of the suits set forth in the petition, and similar suits, against customers of the de- . fendants, would have the effect of harassing and annoying the defendants’ customers; that they would be put to heavy expense; and that the probable outcome would be the loss to the defendants of the patronage of such customers and the consequent depreciation and destruction of their business as dealers in packing house machinery and supplies.
The bill of complaint filed by the plaintiff in this case asked that the defendants be decreed to account for and pay over unto the plaintiff the gains and profits realized by the defendants from and by reasor of the infringement, and, further., that the defendants be decreed to account for and pay over unto the plaintiff the damages suffered by him by reason of the infringement; and the interlocutory decrees entered in the court below provided:
“That complainant recover of the defendants, arid each of them, the profits, gains, and advantages which said defendants, and each of them, have or has derived, received, or made, by reason of said infringement, and that the complainant recover of the said defendants, and each of them, any and all damages which complainant has sustained or shall sustain by reason of said infringement by defendants, or either of them.”
• Pursuant to this decree, the matter was referred to a master of the court to ascertain and report to the court the amount of such damages and also the amount of such gains, profits, and advantages.
There was thus distinctly provided a method whereby the plaintiff might recover all losses suffered by him by reason of the infringement of his patent — those in the nature of damages as well as those in the nature of profits received by the infringing defendants. There is no. controversy in the case as to the financial ability of the defendants to respond to whatever judgment might be finally rendered against them upon the final hearing of the case. To permit the plaintiff, under such circumstances, to institute and maintain suits against the customers of the defendants, to whom the infringing machines have passed, would, it is obvious, be harassing, annoying, and expensive, and would place
The rule laid down in the case of Birdsell v. Shaliol, 112 U. S. 485, 5 Sup. Ct. 244, 28 E. Ed. 768, which is earnestly commended to our attention by counsel for the plaintiff, is in no respects inconsistent with these views. In that case Birdsell had brought a suit in equity for infringement of his patent, against .the Ashland Machine Company, a manufacturer and seller of the machines covered by his patent. A perpetual injunction had been decreed and the case had been referred to a master before whom damages sustained by Birdsell were proved and claimed. The master reported that the Ashland Machine Company had made no profits for which it should account, and that if any damage had been sustained it had been sustained by the Birdsell Manufacturing Company, a stranger to the suit, and a corporation to whom Birdsell had granted an exclusive license to make, vend, and use his invention. The master accordingly reported that Birdsell was entitled to recover only $1 as nominal damages. Subsequently Birdsell, together with the Birdsell Manufacturing Company, brought suit against one Shaliol and another, who had used one of the machines manufactured by the Ashland Machine Company, and which was embraced in the master’s report in -the former suit against that company. The defendants contended that the second suit was barred by the recovery of nominal damages by Birdsell in the former suit against the manufacturing company. The Supreme Court held that a judgment for and payment of nominal damages in favor of a patentee upon a bill in equity against one person for making and selling a patented machine was not a bar to a subsequent suit by the patentee against another per'son for afterwards using the same machine, within the term of the patent. The court then added:
“If one person is in any case exempt from being sued for damages for using the same machine for the making and. selling of which damages have been recovered against and paid by another person, it can only be when actual damages have been paid, and upon the theory that the plaintiff has been deprived of the same property by the acts of two wrongdoers, and has received*555 full compensation from one of them. In that view, the case of the patentee, whose right of property under his patent has been invaded, would be analogous to that of one from whom personal property had been taken.”
In the present case, not only has it been decreed that the plaintiff is entitled to actual damages suffered by him by reason of the infringement of his patent, but he has also been awarded the profits received by the defendants by reason of such infringement. It therefore falls within the rule stated by the court that if the plaintiff has been deprived of his property by two wrongdoers, and has received full compensation from one of them, the other is exempt.
We find the case of Allis v. Stowell (C. C.) 16 Fed. 783, an authority upon this question. It was held in that case that, where a patentee recovers from an infringing manufacturer full damages and profits on account of the infringement, the purchaser from such manufacturer, who is a user of the machine, will be protected in such use against a suit for infringement, as he would be if he were’ a licensee from the patentee. It was also held that to prevent a multiplicity of suits the court may, in a proper case and upon a proper showing, require the prosecution of suits between the patentee and the mere user- of a patented machine to be suspended, and await the result of a suit pending between the patentee and the principal infringer, from whom the user purchased the machine.
In the case of National Cash-Register Co. v. Boston Cash Indicator & Recorder Co. (C. C.) 41 Fed. 51, Circuit Judge Colt held that:
“Tbe power of a court of equity, by petition in tbe main suit against a manufacturer, to restrain a complainant from bringing further suits against tbe purchasers or users of a patented article, seems to be recognized in this country, and to be founded upon sound principles of equity” — citing a numoer of cases, including Allis v. Stowell.
In Kelley v. Ypsilanti Mfg. Co. (C. C.) 44 Fed: 19, 10 R. R. A. 686, Judge Brown (afterwards Associate Justice of the Supreme Court of the United States) held that where suits had been brought in other districts against customers of an alleged infringing manufacturer, before suit brought against the latter, the suits in the other districts would not be enjoined because comity demanded that the application should be made to the court in which the suits were pending. The court refers to the decision in Allis v. Stowell, and says it fully concurs in the doctrine of that case, “although we think the application should be made to the courts in which these suits are pending.” The court says further:
“There would seem to be, however, no objection to tbe court in which such actions are brought staying proceedings in them until the validity of plaintiffs patent and the infringement of the defendant have been judicially ascertained in one of the principal suits; and perhaps in an aggravated case of threatened irreparable injury to defendant’s business, or, if there were any etidence of malice, oppression, or bad faith on the part of the plaintiff, the court might enjoin temporarily the commencement of new suits.”
The doctrine of Allis v. Stowell is not in conflict with Birdsell v. Shaliol, but on the contrary is entirely in accord with that case, and we think states the true doctrine upon the question under consideration.
2. The prayer of the defendants’ petition was for an order enjoining the plaintiff from further prosecuting the several suits set forth in the petition “and from bringing any more suits of like nature against the customers of said Parker for the infringement of said patent by the use of fruit grading machines made and sold to them by said Parker; said injunction order to be continued until the rendition of the judgment of this court upon the master’s report on the accounting in the present entitled cause.” The order and decree of the court below is that plaintiff “be enjoined and restrained from any further prosecution of those certain suits hereinafter set forth by name of party and number, and from bringing any other suit or suits against users of machines manufactured in substantial accordance with letters patent of the United States No. 997,468.” We are of opinion that the order and decree should have provided further, as prayed for in the petition, that the injunction should be “continued until the rendition of the judgment of the court upon the master’s report on the accounting” ordered in the interlocutory decree. We are also of opinion that the order and decree enjoining the prosecution of suits by the plaintiff against in-fringers should be limited in its operation to infringements of complainant’s patent by machines constructed under the Parker patent, and by him sold to the users.
The case will be remanded, with directions to the court below to modify the order of injunction entered by it to conform with the views herein expressed, with costs in this court in favor of the appellant and against the appellees.
