COVERT II. SARGENT.
COVERT V. SARGENT
March 18, 1889.j
;(Jircuit OO'Urt. S. D. New York.
PATENTS FOR INVENTIONS-INFRINGEMENT-DAMAGES-EvIDENCE.
The measure of for the infringement of a patent for whIch no licenses have been granted, is tbe profits which the patentee bas lost by rea· son of tbe unautborized sale, and he must show by satisfactory evidence to what extent the competition of the infringer has diverted sales from him. It is not necessary to show by direct evidence that he would have made all or any part of the sales made by the infringer, but be must prove facts and cir· cumstances which legitimately create the presumption that he would have made them.
In Equity. On exceptions to master's report. Action by James C. Covert against Joseph B. Sargent and George H. Sargent, for the infringement of letters patent No. 161,757, granted April 6, 1875, to complainant, for an improvement in "clasps or thimbles for hitching devices." The court found against the defendants, and directed a reference to a master to state an account of the profits, who reported, among other things, as follows: "The infringement by the defendants consisted in selling thimbles and in selling cattle-ties constructed with the infringing thimble, a rope, and a snap. These articles, as soid by the defendants. were made by a corporation atNew Haven, Conn., under the name of Sargent & Co., being the identical firm name under which the defendants carried on business in New York citv. The defendants Seem to have been the sales agents, without compensation, of the New Haven corporation, but they were largely interested as stockholders of the corporation, and received compensation tor theil' services and expenses in the form of dividends on theil' stock. The competition between the defendants and the complainant was sharp and active, and the latter, in order to meet it, were forced to, and did, reduce the selling price of their product by enlarging the discounts. Complainant's trade and customers were verted from them by the lower prices of the defendants, and wany letters were received showing a preference for the complainant's device, should they meet the lower price quoted by the defendants. In this respect the complainant was seriously damaged, and the profits from the sale and use of their device were very materially lessened by the conduct of the defendants. It was stipulated by the counsel for the defendants that the New Haven . ration made a net profit on the infringing thimbles of $1,500; and' that defendants' share therein was$l.OOO. "From the foregoing facts I find as conclusions of law-First, that complainant is i ,entitled to recover of the defendants the sum of $1,000. being the profits derivEld by them by use of the patented device; second, tllat is no reliable basis upon which to compute profits beyond the amount named in the preceding finding; third, that the complainant has been dainaged in his enjoyment of the. monopoly granted, but that the evidence presents no definite basis upon which such damages can be assessed; fou1'th, that the facts do not warrant the presumption that if the defendants had not used complainant's device. that the complainant would have sold as many thimbles and cattle-ties at the higher price charged by him, in additiun to what he did sell, as were sold and disposed of by the defendantfJ." To this report both complainant and defendants excepted. William H. King, for complainant. John K. Beach.for defenda,nts.
WAI,IJACE, J. The exceptions in this case challenge the correctness of the master's report, both as to the p'rofits and damages which the complainant should recover for the infringement of his patent. Where, as in the present case, a patenteeelectsto enjoy his monopoly under a patent by manufacturing and selling the patented device, with<;lutgJ;antipg licenses, and another invades his right by making and selling it in competition with him, the measure of damages for th(;j 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 ha,ve realized except for the interference of 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 prasented to the master upon the theory that the complainant was entitled to reCOver against the defendants the profits he would have made if he had sold all the infringing devices which were sold by the defendant. The, cases are very rare and 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 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 ci'tcumstances which IE'gitimately create theprasumption that he would have maae the sales himself had it not been for the sales of the infringer. In the, present case it is impossible to deterlJ;line,from the testimony which bas b,een introduced how many thimbles theQ()mplainant would have ,sold if the defendants, instead Qf selling the thimbles of the patent, had confined themselves to selling the other fastenhlg devices, which they were at liberty to sell, and which 'were being sold by others. The patented articles are not so superior to the, other fastening devices as to give rise to any Gogent presumption that t}:1ose who purchased therp defendants would have bought tbem of the complainant in pr 'ference to the other devices, and without alience to the difference in price, if they could not have bought tbem elsewhere. Evidence, however, was given that customers of the plainaht stopped buying the patented devices 'of himaftertbe defendIl.,fitsoffeted them at a reduced price, and then became andcontjnued of the defendants. This testimony authorized presumption that the complainant lost the sales made bytbe defendants to these purchasers; but here again the complainant failed to show the amount of his loss. 'Redid not prove hovvIDany thimbles the defendants sold. The statements of sales furnlsheil 'by the defendants do not givethehumber, or any data from which 'thenumher can be com puted. The :statements give the' name and dates' of sales, and, the sums in gross charged or recei\ied;"bultbe Sums 'represent charges or receipts for other articles
sold with the thimbles, anddo not gh,:eanyinforlt\ation which enabled the master to ascertain what part is for thim'bles, or. the numbe,r 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 mastElr to show that the defendants D;ladeany profits by the sale. of the patented thimbles is their own admission, in the form of a stipulation. The evidence was that they '\Vere the selling agents at the city of New York of a Connecticut corporatiqn by which the thimbles were manufactured, and sold the thimbles, as well as other articfes manufactured by the Connecticut corporation, without commission. The stipulation is that one of the defendanta received $750,and the other the sum 0[$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.
WORSWICK MANUF'G Co.
CITY OF KANSAS
w: D. Mi8aouri, w: D.
March 4, 1889.)
The third claim of letters patent No. 171,190, to Edward O. SulliVan, Dec(lmber 14, 1875, is for the combination with the harness fora tire·engine, etc.l'of a device for. suspending liarness above the position of the hOJ,'se when atta9bed theapparatu8.. The collar, which is an open one, and haIDes at· tached to it, both of which were old. and the inne:f and part of tbe;outer trace.ouly, are suspended. The.specification states that the device can be applied to an apparatus using but one horse. Various persons had previollsly parts of the harness over the position of the horse. and there was · evidence that the collar and harness had been so suspended with other parts. Held th'llt; considE.'rin/l; the .prior state of the art, the' de.vice described in let· , ters Patent No. 830,320, November 10. to GeorgE! C. Hale, which has for its'object the suspension of the entire harness, is not an infringement. ' The fule that the issuance of a patent is presumptive evidence of the nov· elty and usefulness of the device applies in favor ,of the defendant in a suit . for infringement who has a patent for his device. .
SAl.Ill::':-PRESUMPTIONS FROM ISSUANCE OF PATENT. .
FOR. INVENTIONs-INFRINGEMENT-SWINGING HARNESS.
., 'A prior adjudication of a federal c:ourt upon the validity of a patent, though as a precedent in a case in another court between ot1l,er partieJil presenting substantially the same facts, is not conclusive. and where the defE!nse in the subsequent case is placed on additional grounds, and new and'important facts are developed, it should stand on its merits.
In' Equity. . Bill by the Worswick Manufacturing Company and Isnac Kidd against , ·the City of Kansas and, George C. Hale, to ,restrain the infringement of . .a patent.' ,