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TUTTLE v. CLAFLIN et al.

(Circuit Court of Appeals, Second Circuit.

February 23, 1897.)

Patents — Infringement—Damages—Decision on Appeal — Rehearing.

Decree on appeal in case for infringement of plaiting machine, reversing decree for nominal damages, and allowing substantial damages, will not be modified by directing return of the case to the master for further evidence in regard to the cost of hand-made plaits, on the single affidavit of defendant’s representative, made as the result of a short test by persons employed by him, that such plaits could be made at a certain low cost; the same person having represented defendant before the master, when cost was an important feature of the case, and then been silent on the subject, and the manufacture of plaits having practically ceased, so that evidence on the subject of'cost would necessarily be based on estimates.

Appeal from the Circuit Court of the United States for the Southern District of New York.

This was a suit in equity by Theodore A. Tuttle, trustee, etc., against John Claflin, as executor of Horace B. Claflin, and others, formerly partners, under the name of H. B. Claflin & Co., for alleged infringement of a patent for a machine for crimping textile materials. The patent was sustained, and held to be infringed, by the court below, and an accounting, was ordered. 19 Fed. 599. The cause was afterwards heard on exceptions to the master’s report, and a decree entered for complainant for nominal damages. 62 Fed. 453. Both parties appealed to this court, which, on July 29, 1896, filed an opinion, finding that large profits had been made by H. B. Claflin & Co., and reversing the decree below, with directions to enter a decree for complainant in the sum of $40,000 and costs. See 22 C. C. A. 138, 76 Fed. 227. Defendants have now applied for a modification of the decree by directing the return of the cause to the master for further proofs.

Benj. F. Lee, for plaintiff.

Edmund Wetmore, for defendants.

Before WALLACE, LACOMBE, and SHIPMAN, Circuit Judges.

*745SHIPMAN, Circuit Judge.

The defendants have moved that tlie decision upon this appeal be modified by directing that the case should be returned to the master for further evidence in regard to the cost of hand-made plaits, upon the ground that it has been ascertained by experiments that the cost of linen plaits, made and ironed by hand, óf as marketable a quality as those made upon a machine, would not have exceeded one cent per yard. The counsel for the defendants states that this class of testimony was not deemed by him of importance upon the hearing before the master, because (lie conijilainant's testimony was to tlie effect that band-made plaits could not in any event compete with machine-made plaitings, on account of the inferiority of hand-made work. We think that the counsel construed the testimony too literally. The witnesses were introduced for the purpose of proving the cost of hand-made linen and woolen plaitings, and their testimony related to the salable or merchantable character of the goods as they ordinarily could be presented by hand, and that linen and percale goods could not commercially compete with machine-made goods without an excessive expense. They went further than this, and said that hand-made goods of linen could not he manufactured at any cost to compete'in quality with the same kind of plaitings made by machinery; while one of these witnesses also said that he could not make narrow plaits in woolen goods so as to give satisfaction. This latter class of testimony was not true, as was shown by the defendants’ witness Mrs. Hmith; and, indeed, it must have been well known that silk and woolen goods were, as a rule, hand plaited, in preference to running them through a machine.

The defendants were represented, upon the hearing before the master, by Mr. Asaliel K. Smith, the superintendent of their manufacturing department, who asked his wife, under whose supervision the defendants’ plaiting was made from the latter part, of 187(5 to (he first part: of 1880, to make experiments upon the subject of the cost of hand-made goods. Her experience made her an intelligent witness in regard to plaitings. and she made an experiment, but of so. brief a character as to be of very little moment. The attempt of Mr. Smith to present information, to the master upon tlie subject of profits stopped with this testimony. Mrs. Smith, however, also testified that the goods that were plaited upon the machines could be plaited by band; that she did not know the actual expense of plaiting fine goods by band, because no separate account was made of it; that silk and dress goods and woolen goods were; generally hand plaited at the complainant's factory during 187(5 and subsequently, because tlie work upon line goods was done better by band than through a machine; that the character of the material made the difference between 1be results of band plaiting and of machine plaiting; and that hand-made plaiting was sufficiently uniform for the ornamental uses to which the articles were put.

The questions of expense and of the proper standard of comparison for the purpose of an estimate of profits went to the ma.ster upon the testimony which the parlies thus chose to give. ■ The actual history of the manufacture fully justified the finding that, in esti*746mating the profits gained by tbe use of tbe patented machines, tbe proper and tbe only proper standard of comparison was tbe expense of making tbe like articles by band. In determining tbe amount of profits, bis estimates were based upon tbe only figures which tbe parties chose to give him. Tbe defendants now say, by Mr. A. K. Smith, tbe same person who was silent before the master, that:

“With the apparatus that we had in our employ during the time covered by the accounting, it would have been entirely possible to have made by hand all Of the plaitings which we made by machine, and to supply our trade without any delay. At the rate of wages we then paid, and carefully following the work step by step, I am able to say positively that the cost of the hand plaiting-, and ironing- each plait out so as to produce the result shown by the specimens above referred to, would not have exceeded one cent a yard. A more accurate estimate would show about three-quarters of a cent, but it is certain that it would not have exceeded one cent a yard; and at that cost we could have furnished plaitings upon all the goods which we made and sold during the said period.”

We do not doubt that tbe exhibits were made in tbe presence of Mr. Wetmore, in tbe time that be states, and as they are now presented; but tbe question is that of tbe cost of manufacture upon a commercial scale. Tbe new information which Mr. Smith lias obtained is not in harmony with bis silence when be was also the representative of bis employers, and when cost was an important feature of tbe case. His single affidavit, made as tbe result of a short test by tbe work people whom be employed, that linen plaitings can be made at one cent per yard, is not adequate to satisfy a court that justice towards a losing party requires a rehearing.

Turning to tbe .question whether, under any state of facts, it would be the more proper course to send back tbe case to tbe master, in tbe hope that.another investigation might turn estimates into mathematical accuracy, it is to be recollected that this case is, by reason of its history, both remarkable and unique. Tbe interlocutory decree was dated in March, 1884, and tbe master’s report was dated August 24, 1893, and related to an industry which, as an active industry, died in 1879 or 1880. As tbe case presented itself before tbe master, large profits bad been undeniably made. This court thought that too little account bad been taken of two subjects which would reduce tbe sums found by the master, but that, if the case should be sent back, tbe result would be another prolonged bearing, necessarily based upon estimates by tbe experts on both sides; for tbe time when facts could be ascertained which were based upon tbe experience of actual manufacturers bad been suffered i.o pass by. Ho new rule of law was announced in regard to tbe burden of proof, or in regard to tbe necessity that tbe complainant should, in tbe cases which ordinarily come before tbe master, satisfy him by affirmative evidence of tbe amount of profits. Tbe court was of opinion that justice to tbe defendants required a reduction of tbe amount which bad been apparently made out by tbe testimony, and that for tbe purpose of bringing to a close a litigation which, by its delays, bad become discreditable, it was desirable that tbe court should take the responsibility of making a decision, modifying tbe amount found by tbe master to such an extent that tbe defendants should have no cause of complaint. Tbe motion is denied.

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