Covert v. Sargent

• Decision Date: 18 March 1889
• Parties: COVERT v. SARGENT et al.
• Court: U.S. District Court — Southern District of New York

38 F. 237

COVERT v. SARGENT et al.

United States Circuit Court, S.D. New York.

March 18, 1889

Action by James C. Covert against Joseph B. Sargent and George H Sargent, for the infringement of letters patent No. 161,757 granted April 6, 1875, to complainant, for an improvement in 'clasps or thimbles for hitching devices. ' The court found against the defendants, and directed a reference to a master to state an account of the profits, who reported among other things, as follows:

'The infringement by the defendants consisted in selling thimbles and in selling cattle-ties constructed with the infringing thimble, a rope, and a snap. These articles, as sold by the defendants, were made by a corporation at New Haven, Conn under the name of Sargent & Co., being the identical firm name under which the defendants carried on business in New York City. The defendants seem to have been the sales agents, without compensation, of the New Haven corporation, but they were largely interested as stockholders of the corporation, and received compensation for their services and expenses in the form of dividends on their stock. The competition between the defendants and the complainant was sharp and active, and the latter, in order to meet it, were forced to, and did, reduce the selling price of their product by enlarging the discounts. Complainant's trade and customers were diverted from them by the lower prices of the defendants, and many letters were received showing a preference for the complainant's device, should they meet the lower price quoted by the defendants. In this respect the complainant was seriously damaged, and the profits from the sale and use of their device were very materially lessened by the conduct of the defendants. It was stipulated by the counsel for the defendants that the New Haven corporation made a net profit on the infringing thimbles of $1,500, and that the defendant's share therein was $1,000.

'From the foregoing facts I find as conclusions of law-- First, that complainant is entitled to recover of the defendants the sum of $1,000, being the profits derived by them by use of the patented device; second, that there is no reliable basis upon which to compute profits beyond the amount named in the preceding finding; third, that the complainant has been greatly damaged in his enjoyment of the monopoly granted, but that the evidence presents no definite basis upon which such damages can be assessed; fourth, that the facts do not warrant the presumption that if the defendants had not used complainant's device, that the complainant would have sold as many thimbles and cattle-ties at the higher price charged by him, in addition to what he did sell, as were sold and disposed of by the defendants.'

To this report both complainant and defendants excepted.

William H. King, for complainant.

John K. Beach for defendants.

WALLACE J.

The exceptions in this case challenge the correctness of the master's report, both as to the profits and damages which ...