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131 U.S. 159

9 S. Ct. 744

33 L. Ed. 117

Docket No. 293.

Cornely v. Marckwald

Supreme Court of the United States

Argued April 26, 1889. —

Decided May 13, 1889.

Supreme Court of the United States · decided 1889-05-13

Held: that evidence of payments made for infringements was incompetent to establish a price as for a fixed royalty; that, as to loss by the plaintiff from the diversion of sales, he had failed to give any evidence showing the cost of his machines, or what his profits would have been; that, as there was no basis for a computation of the loss of profits, the determination of the master was correct ; and that his conclusion…

2 counsel of record

Key passage — most relied on by later courts

““It is clear that a payment of any sum in settlement of a claim for an alleged infringement cannot be taken as'a standard to measure the value of the improvements patented in determining the damages sustained by the owners of the patent in other cases of infringement. Many considerations other than the value of the improvements patented may induce the payment in such cases. The avoidance of tho risk and expense of litigation will always be a potential motive for a settlement. * * * Sales of licenses made at periods years apart-will not establish any rule on the subject, and determine the value of the patent. Like sales of ordinary goods, they must be common, —that is, of frequent occurrence, — to establish such a market price for the article that it may be assumed to express, with reference to all similar articles, their salable value at the place designated. In order that a royalty may bo accepted as a measure of damages against an infringer, who is a stranger to the license establishing it, it must be paid or secured before the infringement complained of. [None of these parties paid anything here until after the infringement of the patent.] It must' be paid by such a number of persons as to indicate a general acquiescence in its reasonableness, by those who have occasion to use the invention; and it must be uniform at the places where the licenses are issued. Tested by these conditions, the sums paid in the instances mentioned, upon which the master relied, cannot bo regard”

quoted by 1 later decision, including Keyes v. Pueblo Smelting & Refining Co.

““When, however, a plaintiff: seeks to recover because he has been compelled to lower his prices to compete with an infringing defendant, he must show that his reduction in prices was due solely to the acts oí the defendant, or to what extent it was due to such acts. Cornely v. Marckwald, 131 U. S. 159 , 9 Sup. Ct. 744 , 33 L. Ed. 117 . There must be some data by which the actual damages may be calculated. New York City v. Ransom, 23 How. (U. S.) 487, 36 L. Ed. 512 ; Rude v. Westcott, 130 U. S. 152 , 9 Sup. Ct. 463 , 32 L. Ed. 888 .””

quoted by 1 later decision, including McSherry Mfg. Co. v. Dowagiac Mfg. Co.

Relies on Rude v. Westcott

Good law ✅— No negative treatment on recordhow we know

Affirmed · 8–0 · Decided 1889-05-13

How this case has been cited

Cited by 41 later decisions (3 by the Supreme Court) — most recently March 2017 · most notably Hawker v. People of New York (1898), Boesch v. Graff (1890)

16 federal appellate · 6 district · 1 state decisions

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Later decisions citing this case, by decade. The current decade is in progress, and our corpus holds fewer opinions from the most recent years, so the latest bars are undercounted — not a real decline.

View the full empirical analysis of this case →

¶1APPEAL FROM THE CIRCUIT COURT OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK.

¶2The decision in Rude v. Westcott, 130 IT. S. 152, affirmed that the payment of a sum in settlement of a claim fdr an alleged infringement of a patent cannot be taken as a standard to measure the value of the improvements patented, in determining the damages sustained by the owner of the patent in other cases of infringement.

¶3"Where a plaintiff seeks to recover damages because he has been compelled to lower his prices to compete with an infringing defendant, he must show that his reduction in prices was due solely to the acts of the defendant, or to what extent it was due to such acts.

¶4Where he seeks to recover damages for the loss of the sale of infringing machines which the defendant has sold, he must show what profit he made on his own machines.

¶5In equity. Tbe case is stated in the opinion.

¶6" Mr. Benjamin F. Lee, for appellant.

¶7*160Mr. William A. Coursen for appellee.

¶8Mr. Justice Blatchford

¶9delivered the opinion of the court.

¶10This -is a suit in equity brought by Emile Cornely against Freeman D. Marckwald, for the alleged' infringement of letters patent No. 83,910,- granted to Cornely, as assignee of Antoine Bonnaz, the inventor, for an' “ improvement in sewing-machine for embroidering.” There was an interlocutory decree for the plaintiff, establishing the validity of the patent and its infringement, .and ordering a reference to a master to take an account of profits and damages.

¶11The master reported that the defendant had made a profit of $142.92, by the sale of 26 infringing machines; and that he was not a wilful and deliberate infringer. ■ As to damages, he reported that the plaintiff had instituted ten suits against other infringers on -the patent, all of which, .with one exception, were settled on the basis of $50 for each infringing machine ; that the plaintiff claimed .that, that afforded a proper measure of damages, on the basis-of an established license fee; that there was a deviation in one instance because, as was stated by a witness, the case presented “circumstances of exceptional hardship,” but what the circumstances were did not appear.; that it did not appear-that licenses were issued to any one other than in the settlement of a suit, or that the.plaintiff had adopted the sum .of $'50 as a sum on the payment of which he was prepared to. grant a license to any and all who wished.to use the invention ; and that the facts did not warrant the measurement of the damages by a fixed and established license fee.

¶12The master also reported - that the plaintiff claimed that he had been forced to lower his prices to compete with the defendant ; that the evidence did not show that any. reduction in prices by the plaintiff was solely due to the acts of the defendant, or to what extent it was due to such acts; that as to damage to the plaintiff from the loss. of the sale of machines which the defendant had sold, it did not appear what profits the plaintiff made' on his machines, or what it cost to make *161them; and that, therefore, such damage could not be computed, and could not be reported as exceeding the nominal sum of six cents.

¶13The plaintiff excepted to the report, and, on a hearing,- the court made a decree, (23 Blatchford, 163,) overruling the exceptions, and confirming the report, and awarding to the plaintiff the $142.92, with interest and costs, except the costs on the accounting subsequent to the master’s draft report and the casts on the exceptions, which two items of costs it awarded to the defendant. The plaintiff has appealed from so much of the decree as awards to him no damages beyond the six. cents.

¶14The Circuit Court, in its opinion, held, that evidence of payments made for infringements was incompetent to establish a price as for a fixed royalty; that, as to loss by the plaintiff from the diversion of sales, he had failed to give any evidence showing the cost of his machines, or what his profits would have been; that, as there was no basis for a computation of the loss of profits, the determination of the master was correct ; and that his conclusion was proper as to the alleged loss of the plaintiff by reason of the enforced reduction of his prices.

¶15We concur in these views. As to the question of an established license fee, the case is governed by the recent decision of this court in Rude v. Westcott, 130 U. S. 152, where it was held that the payment of a sum in settlement of a claim for an alleged infringement of a patent “ cannot be taken as a standard to measure the value of the improvements patented, in determining the damages sustained by the owner of the patent in other cases of infringement.”

¶16Decree affirmed.

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