46$ MORSS
FEDERAL REPORTER,
vol. 39. v. KXAPP et al. (No. (No. 538.) July 26, 1889.)
v.
UNION
FORM
Co. (No. 316.) MORSS V. KNAPP.
HALT,
336.)
(Circuit Court,' D. Connecticut. 1.
PATENTS FOR INVENTIONS-INFRINGEMENT-DAMAGES-PROFITS.
Defendants sold the complainant's patented expanding dress-form, to which defendants attached an improved device for operating it. Complainant's patented device gave to the infringing form its value as a marketable artiele. Held. that if any distinct part of the profit derived by defendants froID the infringing sales was due to their improvement in the operating device, the burden was on them to show it.
2.
SAME-Loss OF SAI,ES.
The master properly refused to ailow eomplainant, in addition to the profits which he would have made upon the number of forms which he was deprived from selling by defendants' infringing sales, the profits made by defendants upon the number of forms sold by them in excess thereof. The proper rule is to allow only proved damages. Where it is manifest that during the period covered by the litigation all the testimony of importance was discovered and presented, it is proper for the master to refuse to open the accounting to receive further evidence that an expanding device not included in complainant's patent, but accomplishing the same results, was free to be used, and to receive in evidence a patent issued to one of the defendants before the accounting commenced. While complainant is entitled to increased damages, under Rev. St. U. S. 4919, 4921, giving the court discretionary power to increase the damages. for infringing sales made by defendants in willfnl violation of a decree enjoining them from so doing, he is not entitled to such damages merely on account of defendants' conduct in pushing the infringing articles upon complainant's customers, and endeavoring to deprive him of his former trade.
3.
4. SAME-INCREASED DAMAGES.
At Law and in Equity. On exceptions to master's repurt. The facts are sutliciently stated in the opinion. Rev St. U. S. § 4919, provides that damages for infringement of a patent may be recovered by an action on the case, and that on a verdict for plaintiff" the court may judgment thereon for any sum above the amount found by the verdi<;t as the actual damages sUi:itained, according to the circumstances of the case, not exceeding three times the amount of such verdiet," etc. Section 4921 provides that in suits in equity the court may assess the damages caused by the infringement, and that" the court shall have the same power to increase such damages, in its discretion, llS is given to illcrease the damages found by verdicts in actions in the nature of act.ions of trespass on the case." Payson E. Tucker and Charles F. Perkins, for complainant. John K. Beach, for defendants. SHIPMAN, J. These fire exceptions to the committee's and master's report in two actions at law and one suit in equity, whi<.:h were based upon the infringement of letters patent No. 233,240, dated October 12, 1880, to John Hall, for an adjustable dress-form. A description of the invention and the claim which was infringed are given in JtJorss v. Knapp, 37 Fed. Rep. 351. By agreem811t of the parties the accounting upon the
MORSS V. UNION FORM CQ.
469
bill in equity was referred to Edwin E. Marvin, Esq., as master, who was also appointed committee to ascertain the damages in the actions at law. The time which was covered by the different suits was as follows: By No. 316, from October 12, 1880, to April 27, 1886; by No. 336, from April 27, 1886, to November 16, 1880; and by the accounting in No. 538, from November 16, 1886, to February 2.5, 1889. 'rhe three cases were heard together upon the stipulation that all the proofs should be considered to be taken in each of said causes, so tilf as the same were competent and relevant. In No. 538 the master found the profits of the defendant to be $5,421.02, and the proved damages to the complainant to be $7,206.21. The damages in No. 306 and No. 336 he found to be respectively $512.43 and $373.23. A larger sum in damages in each of these he also found in the alternative. if the court should be of the opinion that the evidence was sufficient to justify it. This will be considered hereafter. Both parties except to the findings of the committee and master. Two general classes of forms were made by the defendants, as well as by the complainants, a skat-form and a complete form. In order to it is necessary to give understand the bearing of the severa] the findings of the master in regard to the damages and profits by the sale of each of these forms, and I think it is important to give them in his own language: "I find both these forms contain the expanding device of the second claim of the plaintiff's patent in this suit. Of the skirt it supplies the chief elements of the structure, and gi ves to it itll value as a marketable article. It does not appear by the evidence that the solid skirts of such form have or ever did have any considerable sale or great market value, but for skirts adjustable in a greater 01' less degree to the human form it does appear that there is a large and increasing demand. for the purposes of draping and fitting of garments. The adjustable device employed as to these particular skirts belonged to the complainant, and was embodied in them by the defendants for the purpose of giVing them sale, and did in fact sell them. The defendants superadded to the complainant's invention in snit a firmer waist, a substantial foot on casters. also a very SImple, convenient, and valuable device for operating the expanding mechanism of it, consisting of a slow-threaded screw on the central rod. rotated or operated by a handle or knob at the top of the form, wheraby the mechanism of the plaintiff's patent could be conveniently expanded to fit any form, and at all stages of the adjustment be securely and firmly locked and held in position and in proper form. This device was an improvement for the operation of the plaintiff's device whid), as organized in plaintiff's skirt, operated by hand, and with considerable inconvenience, and required to be locked and held at all points desired by the use of several set-screws. The plaintiffs' device was more valuable with this improvement added to it than without it; and the defendants' form embodying plaintiff's device so improved in competition with the plaintiff's skirt form, which did not contain the defendants' improvement, sold more freely than plaintiff's, at slightly higher pricps than plaintiff's; that is, it brought from $2.50 to $3, while plaintiff's iron post form brought from $2 to and wood post form from $1.50 to $2. The defendants' improvement was not such a device as could give any value to a skirt-form having no expanding devices within it upon which it could operate. The expanding device W!lS absolutely necessary to it to give it any sale;; nor does it appear
470
FEDERAI:. REPORTER,
vol. 39·
.that there is any other expanding device for skirt-foi'ms on which thedefendants' device can operate, Qr with which it can be employed, .which is ·open and free for them to use and employ. For such profits as the defendants secured by this appropriation of the plaintiff's patent, or for the damages thereby coming upon the plaintiff by loss of sales of his own invention, the defendants are to account. If the defendants' device added to these any essential part: of them,the defendants should have proH'd the amount of such added profits in their own interest after having stated their total profits to the master in their statement on file. There was no such proof made, and the added expellse manufacture necessary would rather iudicate a lessening of profits. Theprolits which the defendants admit they malie on these skirts are Sixty cents each, and $I,576.8U in the whole." "As to the 3,364 full-figure forms sold during the same time, i. e., from November 16, 1886, to April 20, 1888, the defendants admit their profits upon the sale of them to have been $1.08 each, and $3.633.12 in the whole. I find that the .device of the plaintiff's patent in suit Was embodied in all these figures in the same way as in defendants' skirt, to which was added the defendants' knob at ,the top upon aeentral rod, for expanding and holding at all points the plaintiff's expanding device, and such addition was entirely useless unless so organized WIth the plaintiff's patent in suit. 1.'hat the plaintiff's exin suit, both in bust and the skirt, was a valuable element of defendants' forms, and contributed largely to their sales; but that there were in these full fonns:other important and prominent features which likewise contributed largeJyto their sales, and added much to the value of the structure in use; and therefore I caunot find from the evidence that all the profits made by the defendants belong' oi' are due to the plaintiff's patent in suit. Neither is there evidence in the case from which I can find the proportion of the amount of stated profits belonging or attributable to the complainant's patented device, and what to the devices patented by the defendants, and unpatented, which are embodied in this dress-form. There is ·no evidence from which I can separate the one from the other, and, under such circumstances, if the plaintiff should be adjudged profits, only nominal profits could be given. As to the damages resulting to the plaintiff by the loss of sales of his full and complete form in each instance ·whereoneof these formswel;e sold to his previous customers, 1 cannot find that he was so damaged. While he undoubtedlysuffered a great loss of sales by slich interference, the evidence will not establish the fact that he lost the Whole number of such sales for such cause, nor is there anyevidence which determines what number of sales was so lost. The defendants' ,'Vas in many respects a very superior form.. The whole figure was firmer,strllnger,and fully as graceful as that of theplaintitf, and also employed in itsconstructioll a papiel' mache bust, which kept its shape better, and was far more preferable in general appearanceandfol' fitting purposes than one made of wires. The complainant's selling agents admit that there in the trade for forms containing these papier mache busts; and that .the inatter of incorporating such a bust in the plaintiff's forms iil order to meet the demands of thetrad'e was suggested by customers, from all of which it' is certain that although the plaintiff's device in suit was a very desirable element in the trade, and still more desirable when improved byexpanding mechanism operating at the top as the defendant organized it in all Of his forms; still that the papier mache bust was nearly, if not quite, as valuable an element; and it seems fair to presume from the evidence that this bust made as maniof the defendants' sales as did the plaintiff's device, and it is absolutely certain that defendant did not make all, or nearly all, his sales to the complainant's previous customers because of the expanding devices of the hip portion of the skirt. Nor can I find the same fact that I have found
*
*.
MORSS
UNION FOIUlCO.
471
in regard to tl\e'deffllJdant'sskirt-form, that the plaintiff's expanding device was. absolntely necessary to give it any sale, and that it would have had no great sale orcomrt1etclal value without it. On the contrary. I find that it would have undoLibtedly had a very considerable sale if .it had no expanding devic.es whatever at the hip of the skirt."
The same d'ifferenceor distinction was made in regard to. the damages in the actions at law and in regard to the sales after April 1888. No damages or profits were given upon the 7,636 complete formswhkh the defendants sold. Ten of the complainant's 13 exceptions relate to this portion of the report and it is contended that the defendants. should be required to pay all the profits which they made upon the full figures, or should pay upon the forms at least a sum based upon the amount which they made upon the skirt-forms. This contention is upon the ground that the invention of the second claim constituted the chief part and value of the full forms. While it is manifest from an examination of the careful and conservative report of the master that he had no doubt of the fact of a great loss of sales to the complainant from these competing forms, and a consequent damage by the infringement, yet that he could not find a basis for the ascertainment of a specific amount of damages arising from the use of the patented invention. My examination of the proofs leads me to the conclusion that, while I do not place quite so much value as he did upon the preference which agents exhibited for the papier maqhe bust, and think that without the expanding devicel!! at the hip of the skirt it would not have been so formidable a rival to the .complainant's full form as it was, yet I perceive that there is necessarily a haziness about that part of the case, which makes it difficult to reach exact and definite results in figures as to the amount of damages or profits resulting from the use of the invention as described in the second claim. Two other exceptions make the point that as damages the master should, in addition to the profits which the complainant would have made upon the number of skirt-forms which he was deprived from selling by the defendants' sales, have allowed the profits made by the defendants upon the number of skirt-forms sold by them in excess thereof. The master and committee followed the rules in the computation of damages which are laid down in Seymour v. Me Cormi{;k, 16 How. 480; Philp v. Nock, 17 Wall. 460; Buerk v. Jmhacuser, 14 Blatchf. 19, and which are commented upon in Root v. Railway Co., 105 U. 8.189, and allowed only proved damages, and I think that he followed the established rule. The remaining ninth exception, in regard to th.e sufficiency of the means of ascertaining the number of wooden post and iron post forms, respectively, which the complainant would have sold but for the infringement, is immaterial, in view of the alternative finding of the master, which will be hereafter considered. The 21 exceptions of the. defendants cover the entire case which is stated in the. r.eport. The important ones may be divided into three classes. The first contention is that the patented form is but an improvement in the art over pre-existing forms, and that, therefore, the entire