NATIONAL OAR-BRAD SHOE 00. v. TERRE HAUTE OAB 00. and others. (Oircuit Court, D. indiana.
1. PATENTS FOR INVENTIONS-PARTIE8
January 30, 1884.)
nil ACTION AT LAW FOR INFRINGEMENT. In an action at law for infringement of a patent, all parties who participate in the infringement are liable. although 80me are simply acting as officers of a corporation; all parties who participate in a tort or are liable, and a man cannot retreat behind a corporation and escape liability for infringements in which he actively participates.
It is for the court, as a matter of law, to construe a patent, and for the jury, as a que&tion of fact, to determine whether it has been infringed, and the amount , of damages that should bl! allowed.
SAME-CONSTRUOTION OF PATENT.
In s,ninfringementsuit, the burden is on the plaintitt to show the amount of damages he has suffered; and if he furnishes reasonably satisfactory evidence on that subject, he is entitled to substantial damages, otherwise to nominal damages. '
SAME-EvIDENCE OF DAMAGR.....,LICEN8E.
On the of damages, it is competent for a patentee to prove the prices at which licenses were granted under the patent while it was in force; but in order to he competent evidence of value, the prices agreed upon must be prices fixed with regard to the future, when there is no liability between the parties, and the parties not being suhject to 8uits are presumed to act voluntarily, and therefore to make up their minds deliberately as to what would be a fair price. Such arrangements, licenses thus granted, fees thus fixed;are competent evidence to consider in determining what the actual value of an invention is, and what the recovery ought to be for its use.
It is not competent for a patentee to prove the prices paid for infringements already perpetrated; $uch settlements are not at all admissible on the subject of value.
SAME-PAYMENTS MADE IN SETTLEMENT.
SAME-AMOUNT OF DAMAGES.
The value oran invention for Which an infringer is liable i$ the value at the time of the infringement. A man who has got a patent owns it property, and if al}ybody sees to infringe it he is bound to pay for its fair value; and the filet that there is something else just as good aI' better does not entirely destroy its value, but may affect it. The doctrine of a confusion of goods hasno application to a suit for infringe. ment of a patent, especially where there is only a confusion of book-keeping and not a confusion of the articles themselves, the articles being incapable of mixture.
SAME-CONF\JSION OF GOODS.
SAME-CoNCEALMENT-PRODUCTION OF BOOKS,
If a party shows an unwillitignes8 to let the truth out, and keeps back facts and the means of getting at facts,in his power, then the jury is warranted in drawing the strongest possible inferences against him, which may be drawn from the evidence actually given in favor of the other party. But if he comes forward with his books, furnishes all the evidence in his power, and is fairly candid in the matter, no inferences should be drawn against him, except such as are fairly drawn from the evidence adduced.
Everyone is bOUJid to take notice of the existence of a patent, and of the rights of parties under it; like the record of a deed to real estate, the record of a patent at Washington is notice thereof to all the world.
Action for Da.mages for Infringement.
NAT.OAB-BRAKE SROB'GO.'V. TERRE HAUTE CAB &; IfANOr'a 00.
WOODS, J., (charging jury.) This is an aotion by the plaintiff against the defendants olainiing damages for the alleged of a patent granted to James Bing,Octoher 6, 1863, for ali improvement in oar-brake shoes. The burden of proof is upon the plaintiff, . to show the faots, 80 far as they ate material, alleged in the oom. plaint,-that it had a patent; that the defendants infringed it; and the amount of damages that it has suffered by reason of the infringement. The defendants are three-the car oompany and two individuals who ate shown to be officers of the oompany. The aotion is in the form of a suit in trespass on the case, and oonsequentlyif all the defendants have participated in the infringement they are all liable, though the individuals were acting simply as officers of the company in doing it. All parties who take part in a tort or trespass are liable. A man cannot retreat behind a corporation, and escape liability for a tort in whioh he actively participates. So there is no ques- ' tion, probably, in the oase but that all the defendants are liable,if any. There is no dispute that the plaintiff has a patent. The patent itself has been put in evidance, and is conclusive of the fact that the patent-office issued it to Bing, under whom the plaintiff claims. It is for the conrt to tell you what the olaim of the party is in his patent, and what he acquired by the patent. It is for you, as a ques· tion of fact, to determine whether the defendants have, by anything that they have made, infringed the patent of the plaintiff. The plaintiff in bis patent makes two olaims. The first is for the two parts of the brake, the shoe and the sole, adjustad together in a particular way described, for the purpose of producing a rotary motion. To this claim the rotary motion is essential, imd any implement which does not produce the rotary motion is not an ment of that claim of the patent. But there being two olaims in the patent, an implement may infringe one and not the other; and if the defendants have manufactured an article which infringes either claim, the plaintiff is entitled to recover in the action for that infringement; and if it infringes both claims, of course the plaintiff is entitled to recover. I instruct you, on tbe authority of Judge DRUMMON]), who is my official superior in this cirouit, as welt as upon my own judgment of the law of the case, and of the proper interpretation of the patent, that the second olaim does not embrace the idea of rotary motion, and may be violated by an implement which is not designed to produce, a/nddoes not in fact produce, the rotary motion. The second claim is simply for a combination of the two parts of the brake already mentioned,-the shoe and sole,-and of the clevis and bolt made in the'substantial form described in the patent; but it is not' necessary, as '! have said, that it shall be sotnade as ta produce rOtary motion. It is simply for the oombination of these parts, in substantially the way they are described, without reference to rotary
et Banning, for plaintiff. et Ketcham, for defendants.
"ion, for the accomplishment of whatever benefits will result from the combination of the parts in that way. If the benefit be the ease in taking apart and putting together, or taking out old pieces and putting in new, or any other benefit that results from that combination, whether described in the letters patent or not, the inventor has the . right to the benefits of the combination that he has thus produced. As already stated, it is for you to determine, as a question of fact, whether the implement manufactured by the defendants, which I believe is concedod to be in the form of this red model which I take in my hands, designated "J. S.," does infringe the patent of the plaintiff in respect to either claim,-the combination for rotary motion, and the general combination of the fOUf parts, without reference to rotary motion. Now, it is a.rgued by one side that this piece resting squarely down upon the shoe,and not pushed forward by this toe, will not produce rotary motion, and therefore does not violate this patent in respect to the claim for rotary motion. On the other hand, it is argued that this will produce rotary motion on the principle the plaintiff contends for. I leave that to you as a question of fact. If this implement, constructed in this way, will produce the rotary motion to some extent,-it may not be to the full extent of a model constructed in the form of the patent,-it is a violation of the first claim of the patent. If it will not produce rotary motion at all, then it is not a violation of that claim. The next question is whether this model is substantially a combination of th.e same parts as are included in the second claim of Bing's patent. In order that there be an infringement, it is not necessary that the parts be exactly alike. If they are substantially the same in construction, and produce substantially the same result in substantially the same manner, it is an infringement. It takes more than a mere difference in form to escape an infringement. If a man has procured a patent-a combination patent-consisting of certain parts, one of which, for instance, is a clevis like that, coming down in two arms upon the outside of the ears of the brake head, the question in this case is whether the substitution of a single strap like this escapes that patent. If this strap was a thing already known to mechanics as something that, in this connection, would produce sub· stantially the same result as the cleviB, in the same connection,-a mere substitution of one thing that is equivalent to the other,-it then must be treated as an infringement. The defendants do not escape if this is substantially the Bame, and was a thing known to mechanics already, and substituted merely to produce substantially the same result as the clevis; and if not involving any invention, it is a mere mechanical equivalent. Such a change does not enable a party to escape liability for infringement. The question is for you. Ijel have argued it before you and I shall not enlarge upon it. It is fOT you to say whether there is a substantial change in anything more than mere form from that to this. If the're is no substantial
NAT. OAR-BRAKE SHOE CO.
HA.UTE CA.R & MANUJI"G 00.
change, no change except in form, then this should be treated as- an infringement of the plaintiff's second claim. Considerable has been said in argument, and some evidence adduced, in reference to decisions made by Judge DRUMMOND, of this circuit, that a certain brake-shoe used by the Illinois Central and the Lake Shore railroads, which are claimed to be substantially identical, even in form, with this model, are an infringement of the plaintiff's patent. I say to you that such decisions have been made; but they were decisions in particular cases, made, of course, with reference to the evidence adduced in those cases; and while they are entitled to weight upon your minds, they are not absolutely conclusive upon you. I leave it to you, as the law leaves it, a question of fact whether this is an infringement of that; that is, whether the brake-shoe represented by this model is an infringement of the Bing patent. You should hold that it is, unless there is some departure more than in mere form; that is, unless the result accomplished by this is by a substantially different contrivance, operating in a substantially different way from the Bing brake-shoe. If you find that the implement made by the defendants, of which this is conceded to be a model, is an infringement of the plaintiff's patent, then will arise the question, which counsel have more earnestly argued before you, and which is for you, perhaps, the more important question in the case-what damages shall be awarded? The burden of proof is upon the plaintiff to show the amount of damages that he has suffered, and to furnish the jury reasonably satisfactory evidence to enable them to reach a conclusion on that subject; and, if the plaintiff has furnished you that proof, it is your duty to award him substantial damages. If there has been an infringement, he is entitled to nominal damages anyway; but if the evidence shows that the patent is of real value, then he is entitled to substantial damages,according to the proof. As a general .proposition, the weight that testimony shall have is a question for the jury; but the court may lay down general principles which will enable the jury to understand how the testimony should be weighed. I instruct you that it is competent for a patentee, in order to enable the jury to measure his damages, to prove contract prices at which licenses had been granted under the patent while it was in force, but that it is not competent for him to prove the prices paid for infringements; that is to say, payments made in settlement of infringements already perpetrated. In order to be competent evidence of value, the prices agreed upon must have been fixed with regard to future use, when, there being no liability between the par·· ties, they are presumed, on both sides, to have acted voluntarily, and therefore to have made up their minds deliberately as to what was a fair price. Such arrangements, licenses thus granted, fees thus fixed, are competent evidence to consider in determining what the value of an invention is, and what the recovery ought to be for its use. But settlements for past transactions, where the parties are
518 . "
liable to suit if they do not pay, I instruct you, are not admissible as evidence for the plaintiff upon the subject of value. . Now, there is in evidence the deposition of Mr. Shaw, and counsel have discussed before you the weight that it should have. They dispute whether Mr. Shaw, in this deposition, has spoken about payments made for past use, or a price agreed upon for future use, or paJ'ments partly for past and partly for future uses. I leavd that to you. The testimony is before you, and it is for you to say what it means, and what effect you will give it in this respect. Other evidence has been introduced as to the value of the patented brake-shoe as compared with others, and some question ill made of what the comparison should be. The plaintiff's counsel insists that no comparison shall be made with any implement that had not been in use, or been invented,-if it was a patented implement,-before the patent sued upon was issued. I am not able to agree fully with that position. The action being for damages, (not profits,) I suppose the defendants are liable-if they are liable for anything-for the value of the invention at the time they appropriated it. A patent issued on a particular day for a particular contrivance, might, with reference to the business of the community, and the uses to which it could be put, be worth a given sum on that day and at ,that time. If it was the only contrivance that could be used to accomplish the purpose for which it was adapted, it would of course constitute a monopoly, and would command the market for whatever price should be fixed upon it. If shortly after it was invented and put into use some new contrivance, entirely different, and not infringing it in any respect, but useful for accomplishing the same purpose, should be Invented and brought into use, it is evident that competition would arise, and the first patent, instead of then being the sale occupant of the field, would have to meet the competition of the new, and might not be worth so much as when it was first produced. I phink the jury have the right-and I so instruct you-to look to the facts as they existed at the time of the infringement. If the patent was useful when invented, and was an improvement of actual value over what then existed, the fact that something else was invented afterwards that was better than it, would not take a way its entire value, so that the one who should prefer to use it or manufacture it could say, "I shall pay nothing for that because I might have taken something better." A man who has a patent owns it as property, and if anybody sees fit to infringe he is bound to pay for its fair value; and the fact that there may be something else .just as good as that or better does not destroy its value, but it may affect your judgment of what the actual value is. The fact that this company chose to make this implement, with the combined parts,-that is, if you find those combined parts are an infringement of this patent,-is conclusive upon the company that they regarded it as a valuable instrument, thus combined, and its actual value in use, under the circumstances existing at the
TERRE HAUTE CAR & MANUF'a 00.
time, the value of that combination, which constitutes the patent, should be awarded to the plaintiff in daIllages; but the existence of these other implements, patented or unpatented, is a matter that you have a right to consider in arriving' at what your judgment of its actual value shall be.' Of courSe, if the rival hnplements are patented, the existence of them could. have no effeot, or but little 'effect, upon the value of the invention in suit, excopt as they furnished competition in the market. If there existed some contrivance that was not patented at all, or that was free to everybody, which subserved substantially the same purpose, that might still further in your minds depreciate the value of this; but the mere fact that such a thing did exist would not destroy entirely, and could only be treated as modifying, the value of this at the time. In this connection I will refer to a point to which counsel have called my attention. It is claimed by plaintiff's counsel that the burden of proof is on the defendants to show that those implements which were brought forward· are free if they want to claim the benefits of them as free implements. If they are patented, then of course the parties resorting to them would have to l'ay royalty for their use, and if they chose to go to this iIljltead, they should pay royalty on this, the fair royalty, whatever it is. But counsel for defendants have asked me to say to you, that if, during the examination of the witnesses, it was conceded by the counsel for the plaintiff that anyone of these implements was not patented, you have a right to accept that concession and treat it as proof of the' fact that that particular one was not patented; and they claim that the one which has been called or designated as the reversible sale was admitted by counsel for the plaintiff not to be covered by any patent,-not to have been patented,-and therefore you 'are entitled to treat that as an unpatented implement; and so far as the existence of that in the market could have affected the fair value of this, you should consider it as a free instrument. I instruct you that a concession made by counsel may bel treated by the jury as a fact against the party whose counsel made the concession. There is one other point that I will instruct you about. In his opening statement the plaintiff's counsel claimed to you that if he made proof that these defendants constructed a brake which was a violation of his client's patent, and showed that they had constructed a certain number of brakes altogether, f.he burden of proof would then fall upon the defendants to show just how many were constructed after the form of the Bing patent; and that unless they offered that proof you should find that all made by them were constructed in .that way, on the principle of the confusion of goods; that is, that a party who mixes his goods with another man's, so that they cannot be separated, is liable to lose his own goods with those that he commingles with them. That rule does not apply in this case, for the manifest reason that whenever you go and look at a car you can tell what brake is on it. If there is any confusion, it is confusion in the book-keep-
ing, and not of the goods. The brakes could not be mixed; one brah is always separable from another; and the burden is upon the plaintiff to show how many articles were made in infringement of its patent; and the plaintiff is entitled. to recover for the infringement of only such number as upon the evidence you are satisfied were made by the defendants. It is only in a case of this kind,-and I do not mean to intimate that there is any cause for invoking the rule here; I leave that solely to you, as you are the judges of questions of fact. If a party shows an unwillingness to let the truth out, and keeps back facts, and the means of getting at facts in his power, then the jury is warranted in drawing the strongest possible inferences which may be drawn from the evidence actually given in favor of the other party; but further than this, there is no doctrine that can have any applicability in this case, and I do not say that this doctrine is applicable; I do not say to you that the defendants have manifested any disposition to keep back any facts in their power. If, when they made these im· plements, they actually knew they were violating somebody else's patent, and purposely omitted keeping any record of how many violatioqs were perpetrated, then you would be entitled to draw. the strongest inferences against them, if there were any evidence of that fact. But if they have brought forward their books, and furnished all the evidence in their power, and have been fairly candid in the matter, as much so as men may reasonably be expected to be when · their interests are heavily at stake, you would not be justified in drawing any inferences, other than such as may fairly be drawn from the evidence adduced. In reference to this subject of knowledge of the patent, I say to you that everyone is bound to take notice of the exist· ence of a patent, and the rights of parties under it, and is held responsible to pay for every infringement that he actually perpetrates, just as if he did know it. It is like the record of a deed; the record of patents at Washington is notice to everyone, just as your title deeds on the records of the proper county are notice to all the world of your title. But, while a man is held to have this constructive knowledge, he may be in actual ignorance of the fact; and so if these defendants were actually ignorant of the existence of this patent at the time they made the implements which are claimed' to be an infringement, they should not be deemed subject to criticism or reproof because they have come here with their books in such shape that they cannot tell from their books what infringements they did commit. It -is only when a man consciously does wrong, and 80 does it as to conceal the facts, that he is subject to such criticism and to this harsh rule of evidence.
DUNOAN V. SHAW.
8m wand others.
(District (Jourt, 8. D. N6'IJ) York. February 7,1884.,
SHIPPING-BEAMAN'S WAGES-ADVANCE NOTE-DISCHARGE AFTER NEGOTIATION-INDORSEE-REv. ST. J 4534.
Where an advance note is given upon the shipment of a seaman for a vovagt, and it is transferred to a bonafide. indorsee, under section 4534, the lattti may recover of the owners of the vessel the amount thereof, notwithstanding the seaman's discharge by the master before sailing, and notWithstanding that till,: note contained the proviso that the seaman" be duly earning his wages." By giving the advance security, the master under the statute incurs the risk, as respects a bona fide indorsee, of the seaman's discharge before the vessel sails, Where the shipping commissioner, at the request of the master, gave such an advance security 'to the seaman shipped by him, with the consent of the master, the master having full opportnnity previously for ascertaining the titness of the seaman, and the master SUbsequently discharged' the seamen by reason of drunkenness on the evening preceding the sailing of the ship, and the latter act not being sufficient ground of discharge by the maratine law, held, that the master was not entitled as against the indorsee of the security to allege the general unfitness of the seaman of which he had previously means of knowledge; that the security was valid, and could be enforced bl the indorsee; and that the shipping commissioner being obliged to pay It, could, therefore, recover the amount in an action against the owners. Held, also, that the shipping commissioner, having defended in a former action against him on the note, without notice to the present defendants, was net entitled to recover against them the costs of the former suit.
Benedict, Taft tf Benedict, for libelant. Alexander tf Ash, for respondents. BROWN, J. This libel was brought to recover for moneys paid
the libelant upon an advance note of $60, dated December 26, 1877, and given for two months' advance wages to the cook of the ship S. Hignett. The libelant was then, ltnd is now, United States shipping commissioner at this port. His deputy, at the request of the captain of the ship, procured a cook for the ship, who signed the shipping articles; and the deputy at the same time, as requested by the captain, signed the advance note in the following form:
"Seaman's Advance Note. "NEW YORK, December 26,1877. "Three days after the final departure of the ship Sarah Hignett from New York, for Calcutta, I promise to pay Joseph Harley, or his order, sixty (60} dollars, provided he is then duly earning his wages. "860. FRED C. DUNOAN, Dep'y U. S. Ship'g Com'r."
The cook had been employed upon the ship for two weeks previous, with the understanding on the part of the captain that he would be shipped for the voyage. On the moming of the day that the ship sailed, the captain, being dissatisfied through evidence of the cook's drunkenness, determined not to allow him to proceed on the voyage, called upon the shipping commissioner, discharged the cook; and pro-