Reed Roller Bit Co. v. Hughes Tool Co.

• Decision Date: 25 March 1926
• Docket Number: No. 4514,4615.,4514
• Citation: 12 F.2d 207
• Parties: REED ROLLER BIT CO. et al. v. HUGHES TOOL CO. REED et al. v. CADDO ROCK DRILL BIT CO.
• Court: U.S. Court of Appeals — Fifth Circuit

12 F.2d 207 (1926)

REED ROLLER BIT CO. et al. v. HUGHES TOOL CO.

REED et al. v. CADDO ROCK DRILL BIT CO.

Nos. 4514, 4615.

Circuit Court of Appeals, Fifth Circuit.

March 25, 1926.

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

In No. 4514:

B. F. Louis, of Houston, Tex., and William F. Hall, of Washington, D. C., for appellants.

C. R. Wharton and John A. Mobley, both of Houston, Tex. (Jesse R. Stone, of Houston, Tex., on the brief), for appellee.

In No. 4615:

B. F. Louis, of Houston, Tex., and William F. Hall, of Washington, D. C., for plaintiffs in error.

John A. Mobley and W. L. Cook, both of Houston, Tex. (Jesse R. Stone, of Houston, Tex., on the brief), for defendant in error.

Before WALKER, BRYAN, and FOSTER, Circuit Judges.

BRYAN, Circuit Judge (after stating the facts as above).

In the first of these cases, No. 4514, appellee's claim of infringement has already been upheld. 282 F. 807.

The only question before us is whether the damages awarded on an accounting are excessive. We have no difficulty in sustaining the finding of the master and the District Judge that the appellants were willful infringers. During the time he was an employee and officer of the appellee company, Reed must have had knowledge of the injunction obtained in 1913 against the Caddo Company restraining the use of the Hughes lubricator. After he left the employment of Hughes, and had been enjoined from infringing several of the Hughes patents, and after unsuccessfully attempting to compete by the use of an oil lubricator holding only a gallon of oil, he deliberately began and continued to manufacture and sell as an essential part of his machine a lubricator which infringed that of the Hughes patent.

It is not contended that there was any substantial difference. It is apparent from the evidence that he was not led by the advice of counsel to believe that he would not be infringing if he should make use of the Hughes patents. Under R. S. § 4919, (Comp. St. § 9464), it was within the discretion of the court to assess the expense of auditors, as a punishment for infringement.

Appellants contend that at most recovery should have been limited to the reasonable profits appellee would have made on sales of its lubricator, and that appellee was not entitled to recover loss of profits on complete outfits or spare parts, for the reason that they were not included in the Hughes patent. While it is true that nominally the Hughes patent was only for the improvement of drills, it was in reality an improved drill. Claim 19, quoted above, is for the completed tool and spare parts. Although some of the parts were old, the Hughes device as a whole was new. Manufacturing Co. v. Cowing, 105 U. S. 253, 26 L. Ed. 987. It was the lubricator that gave value to the completed device and made the cutters salable.

In Westinghouse Co. v. Wagner Mfg. Co., 225 U. S. 604, 32 S. Ct. 691, 56 L. Ed. 1222, 41 L. R. A. (N. S.) 653, it is said: "Where profits are made by the use of an article patented as an entirety, the infringer is liable for all the profits `unless he can show — and the burden is on him to show — that a portion of them is the result of some other thing used by him.'" See, also, Putnam v. Lomax (C. C.) 9 F. 448; Covert v. Sargent (C. C.) 38 F. 237; Pressed Prism Glass Co. v. Continuous Glass Prism Co. (C. C.) 181 F. 151; Bredin v. National Metal Co. (C. C.) 182 F. 654; Bemis v. Brill, 200 F. 749, 119 C. C. A. 229; Walker on Patents, § 565.

Dowagiac Mfg. Co. v. Minnesota Plow Co., 235 U. S. 641, 35 S. Ct. 221, 59 L. Ed. 398, relied on by appellants, does not announce a different rule. In that case the patent was for an improvement in grain drills, the objects being to make the drill usable on uneven ground, and to provide means whereby the shoes and covering wheels could be raised from the ground, when the implement was not in use or when it was being transported from one field to another. Other parts were required to complete the machine, and its value was not entirely attributable to the invention.

In Heyer v. Duplicator Mfg. Co., 263 U. S. 100, 44 S. Ct. 31, 68 L. Ed. 189, also relied on by appellants, the patentee sold his own device to purchasers who bought gelatine bands from the defendant. This case is distinguishable from that, for here appellants were not selling parts to those who had bought complete machines from appellee, but were selling spare parts of their own device, which could never have been sold, but for appellee's lubricator. Reed did not have a license to manufacture or sell spare parts of the Hughes drill, and therefore was an infringer, and liable for profits Hughes would have made. Union Tool Co. v. Wilson, 259 U. S. 107, 42 S. Ct. 427, 66 L. Ed. 848.

It does not make any difference that the Pickin patent called for slush water, instead of oil, as a lubricator, for during the accounting period it was not known that such a device could enter into competition with the Hughes device. Turrill v. I. C. R. R. (C. C.) 20 F. 912; Brennan v. Dowagiac Mfg. Co., 162 F. 472, 89 C. C. A. 392. Reed does not claim that he knew there was another method of lubrication. His discovery came about as a result of his infringement, and not because of the existence of the Pickin patent.

A patentee is bound by prior patents and the prior art, irrespective of...