Brennan & Co. v. Dowagiac Mfg. Co.

• Decision Date: 18 June 1908
• Docket Number: 1,737-43.
• Citation: 162 F. 472
• Parties: BRENNAN & CO. et al. v. DOWAGIAC MFG. CO. DOWAGIAC MFG. CO. v. BRENNAN & CO. et al.
• Court: U.S. Court of Appeals — Sixth Circuit

162 F. 472

BRENNAN & CO. et al. v. DOWAGIAC MFG. CO.

DOWAGIAC MFG. CO. v. BRENNAN & CO. et al.

No. 1,737-43.

United States Court of Appeals, Sixth Circuit.

June 18, 1908

F. L Chappell, for Dowagiac Mfg. Co.

Border Bowman and P. A. Staley, for Brennan & Co.

Before LURTON, SEVERENS, and RICHARDS, Circuit Judges.

SEVERENS Circuit Judge.

This case comes here on an appeal and a cross-appeal from a decree rendered by the court below on an accounting for profits and damages sustained by the plaintiff, the appellant in the second of the above entitlings, resulting from the infringement of letters patent No. 446,230, granted to Hoyt February 10, 1891. The patent was sustained in respect to the claims relied upon by this court at the original hearing in 1903 (127 F. 143, 62 C.C.A. 257, reaffirming a like decision made in the case of Same Plaintiff v. McSherry Mfg Co., 101 F. 716, 41 C.C.A. 627). We expressed the opinion that the patent embodied a highly meritorious invention, and, finding that the defendant had infringed it decreed accordingly and remanded the cause for an accounting for the profits and damages accruing from the infringement which appeared to have been going on for several years. The court below, on entering the decree directed by this court, ordered a reference to the master to take proofs and report in the matter of profits and damages. The proceedings before the master were very much protracted, and a large volume of evidence taken, much of which the court below thought was useless; all which, to counsel, seemingly had some bearing upon the subject was brought in. The result is that the master has reported, and the court has decreed, that the plaintiff is not entitled to recover anything beyond nominal damages. This seems an untoward ending of an apparently good cause. Congress has exercised much solicitude in securing to patentees the reward which it bestows for useful inventions. It has awarded a remedy for the profits made by an infringer, as well as the damages sustained by the patentee; and it has further provided that, in cases where the court thinks the facts warrant it, the actual damages may be increased to the extent of threefold. Rev. St. Secs. 4919, 4921 (U.S. Comp. St. 1901, pp. 3394, 3395); Walker on Patents (4th Ed.) Sec. 568.

The question we have to consider is whether the result is such as the law and the circumstances require. The master made an elaborate report, especially in regard to the law which he conceived to be applicable. With regard to the facts he states that, in response to an order made by him for a report in respect of the matter of the accounting, the usual course of proceeding (2 Bates Fed.Eq.Pro. § 759), the defendant reported, and its chief officer testified:

'That during the infringing period, in addition to the manufacture of shoe grain drills, it was engaged in the manufacture of numerous other agricultural implements and farm machinery; that the cost of production of the infringing shoe grain drills was so interwoven and intermingled with the cost of manufacture of said other farm implements and machinery that it would be impossible to separate the one from the other that it kept no separate cost account or expense record as to its shoe grain drill business, and it would be an impossibility for any one to ascertain from its books the profits, if any, derived from the sale of the shoe grain drills which employed complainant's device.' He thereupon further reports as follows:

'No statement of profits or loss being produced by the defendant, the complainant placed its own expert, Mr. Hart, at work upon the defendant's books, and he has produced, and filed as a part of his deposition, a statement showing that during the infringing period, viz., from August, 1894, to March, 1903, the defendant manufactured and sold 9,406 shoe grain drills, embodying complainant's patent, for the gross sum of $504,094.26, and upon which it realized a net profit of $16,992.55. The methods employed by complainant's expert in arriving at his results have been criticised by defendant's counsel, and they have endeavored to point out many fundamental errors in his work. The defendant, however, not only declined to undertake this task when urged so to do, but has absolutely failed to indicate any other method than that pursued by Mr. Hart which would have arrived at a more nearly exact result; nor has it undertaken to have its books reviewed by its own expert, for the purpose of showing that the profits indicated are excessive. Absolutely mathematical exactness in work of this character is not to be expected. I am of the opinion that the method pursued by the expert was in the main correct, that his work was carefully and honestly performed, and that from the evidence presented we must accept his result, viz., $16,992.55, as the net profit accruing to defendant from the sale of infringing shoe grain drills during the period of the accounting.'

With respect to profits, he states the contentions made before him by the parties thus:

'The complainant claims that it is entitled to the entire profit thus derived, and bases its contention, as I understand it, on two grounds: (a) That the Hoyt patent is not a patent for a portion of a grain drill only, but embraces the machine in its entirety. (b) That, if the patent should be construed as not sufficiently broad to cover the entire machine, then it is of such paramount importance that the entire market value of the grain drill is legally and properly attributable to the addition of complainant's patented features. Both of these propositions are strongly controverted by the defendant, and they contend that the complainant, having failed to give evidence tending to apportion the profit derived from the whole grain drill and that derived from the use of the infringing device, is entitled to recover only nominal damages.'

He then proceeds to discuss the law touching the recovery of profits, and upon his conclusion of law in that regard, that the plaintiff was bound to distinguish the extent to which the Hoyt invention enhanced the profits made by the defendant in the manufacture and sale of the infringing drills, and his further statement that the plaintiff had failed to do this, he reported that there could be only a nominal recovery. The master seems to have appreciated the injustice of this result, for he says:

'That defendant derived some advantage from the use of complainant's device is evidenced by its prolonged infringement. That complainant should not be compensated for the appropriation of its property does not accord with our ideas of justice. To award the entire profits would be to disregard the law and the evidence as I find it; and, no satisfactory basis for an apportionment of the profits being indicated, the complainant is relegated to nominal damages, which I fix at the sum of $1.'

And, as some atonement, he finds at the conclusion of his report as follows:

'Being of the opinion that defendant has profited by the infringement, but that the means of ascertaining the quantum are not presented by the record, I find that all items properly taxable as costs should be paid by it.'

The fundamental proposition on which the report in respect to the profits rests is that the whole of Hoyt's invention and patent resides in the spring pressure device and does not extend to other parts of the drill.

From this he concludes that only this particular of the drill can be considered in estimating the profits, and that all the other parts might be lawfully made and sold by the defendant without any responsibility to the plaintiff. This is a specious argument; but it is not in accord with the established principles of law regarding patents on claims for combinations of several elements, and, when applied to this case, results in a radical error. The claims of the patent in suit are not restricted to single things, but some of them-- the first, for instance-- include the several elements which go to make up the seeding part of a drill, in combination. It covers them all as one whole. Every one is made material by including it in the combination. The spring devices are not thereby patented. For the purposes of the claim and the patent thereon, they are on the same footing with all the other parts of the drill, however old and common they may be. Any one might make and sell each and every part, or any lesser or larger combination of such parts, including the spring device, without infringing the patent, provided, of course, they are not intended to contribute to the making up of the entire combination covered by the patent. But one part in a combination is no more patented than another. All in association are patented.

The parts of a drill consist of a carrier, a seed box or reservoir, and the seeding apparatus. It is to the latter that the attention of inventors has been principally directed. The carrier and the seed box are old and simple. Of them it is enough to say that no one appears in this case to have any patent on them. It is pertinent to cite what was said by Mr. Justice Grier in Seymour v. McCormick, 16 How., at page 488, 14 L.Ed., at page 1024:

'It must be apparent to the most superficial observer of the immense variety of patents issued every day that there cannot, in the nature of things, be any one rule of damages which will apply equally to all cases. The mode of ascertaining actual damages must necessarily depend on the peculiar nature of the monopoly granted.'

The case here is not a patent for an improvement upon another article, which does not cover that other article, but only the improvement made upon it. The patentee cannot in such case extend his invention over the thing improved, if the latter is patented....