Fox Typewriter Co. v. Underwood Typewriter Co.

• Decision Date: 06 March 1923
• Docket Number: 3698.
• Citation: 287 F. 447
• Parties: FOX TYPEWRITER CO. v. UNDERWOOD TYPEWRITER CO.
• Court: U.S. Court of Appeals — Sixth Circuit

287 F. 447

FOX TYPEWRITER CO. v. UNDERWOOD TYPEWRITER CO.

No. 3698.

United States Court of Appeals, Sixth Circuit.

March 6, 1923

Fred L Chappell, of Kalamazoo, Mich. (Chappell & Earl, of Kalamazoo Mich., on the brief), for appellant.

Hans v Briesen, of New York City (Briesen & Schrenk, of New York City, on the brief), for appellee.

Before DONAHUE, Circuit Judge, and COCHRAN and PECK, District Judges.

COCHRAN District Judge.

This cause is here for the second time. The opinion delivered on behalf of this court by Judge Sater on the former appeal is reported in 220 Fed., beginning at page 880, 136 C.C.A. 446. The litigation began with a controversy as to the validity of a patent for a tabulator owned by appellee, and, as to its infringement, by appellant. Both matters were determined adversely to appellant by the lower court. Judge Knappen's opinion is reported in 181 Fed., beginning at page 530. An interlocutory decree was entered, so adjudging and ordering a reference for an accounting. The infringing period ran from June, 1906, to September 23, 1907, when the patent expired. In that time appellant made and sold 530 tabulators, embodying appellee's patent, separately from its typewriter. Appellee's tabulator was a single stop. That so made and sold by appellant was a ten-stop, or decimal, tabulator. The master found that appellant had received a profit of $1,750.36 from the sale thereof, and awarded that sum to appellee on this account. He also found that appellant had made and sold 5,606 typewriters with the appellee's tabulator as a part thereof, and received a profit of $55,901.03 from such sales, and awarded that sum to appellee on that account. Upon the hearing on the master's report the finding as to the first amount was approved, and that as to the second disapproved. The disapproval was not on the ground that appellant had not made such profit, but that it did not appear that the making of such profit was due to the tabulator. It not appearing what, if any, portion of such profit was due to the tabulator or that appellee had suffered any damage by the infringement, a decree was entered adjudging appellee $1,750.36, with interest, and $1 as nominal damages.

Both parties, feeling aggrieved, appealed from the decree. It was on these appeals that the former opinion, heretofore referred to, was delivered. Appellant's appeal involved the merits and the sums awarded against it; appellee's, the limitation of its recovery to $1 on account of the larger infringement. On the former, the adjudication as to the validity of the patent and its infringement, and as to appellee's right to $1,750.36 on account of the 530 tabulators sold separately, was held proper, and so much of the decree was affirmed. On the latter, the other portion of the decree was reversed. The reversal, however, was not on the ground that the lower court had erred in not awarding to appellee more than $1. This holding was approved. It was to afford appellee an opportunity to show, if it could, what, if any, portion of the profits received on account of the larger infringement was due to the tabulators. This court, in its opinion, pointed out a method by which such fact could be shown. It said:

'If the difference between the average profit on each tabulating and on each nontabulating machine made or sold in any given year be multiplied by the number of tabulating machines made or sold within such year, the result ought to represent the profit which plaintiff is entitled to recover for such period. As the defendant was accustomed to making annual statements, compliance with the method above suggested should impose no hardship on it.'

It said further, however:

'Such method is not to be understood as exclusive; if it should be found not applicable, and the certainty which it would afford be not attainable, the parties may have occasion to resort to some other way of determining the amount of recovery, as was done in Herman v. Youngstown Mfg. Co., 216 F. 604, 132 C.C.A. 608, or, as suggested in U.S. Frumentum Co. v. Lauhoff, 216 F. 610, 132 C.C.A. 614, both of which were decided by this court.'

On the return of the cause to the lower court a re-reference was had, and the master found that, of the profit received by appellee from the sale of the 5,606 typewriters with appellee's tabulators as parts thereof, $10,433.33 was due to the tabulators, and awarded appellee that sum. This finding, on a hearing on the report, was approved by the lower court, and thereupon a decree was entered in favor of appellee against appellant for that sum and for the $1,750.36 theretofore decreed, making together the sum of $12,233.58, with interest from the date of the last report. It is from this decree that this appeal is taken.

Appellant complains of the decree in so far as it adjudges, for the second time, the sum of $1,750.36 against it on account of the profit received by it from the sale of the 530 tabulators sold separately. But it is not open now to question appellee's right to this sum. It was adjudged in its favor by the decree of the lower court from which the first appeal was taken, and on this appeal this portion thereof was not reversed, but affirmed. No reason occurs to us why appellee could not have stood on this decree and taken a decree only for the other sum. That appellant's complaint here is not dealt with on its merits is not to be taken as an indication that we have any doubt as to the propriety of the decree in this particular. The consideration advanced renders it unnecessary that we should so deal with it.

Appellant's main complaint has to do with the other portion of the decree. It introduced no evidence before the master concerning that matter. It contented itself with urging that appellee's evidence failed to establish that it was entitled to that sum. And such is its position here. Undoubtedly the burden was upon appellee to show that appellant received profits from the sales of its typewriters equipped with appellee's tabulator, which were due solely to the tabulator, and the amount thereof; and in the absence of the introduction by appellee of such evidence it was not incumbent on appellant to introduce any evidence. But this burden was not to show such profits with precise accuracy. It was no more than to establish them with reasonable certainty. It did not go even this far. It was not to so establish the whole amount thereof. It was no more than to so establish that the profits so received amounted at least to a certain sum. So the question here is whether appellee's evidence established with reasonable certainty that such profits amounted, at least, to the sum of $10,483.33, the amount adjudged by the lower court.

Certain facts appearing from that evidence are not questioned by appellant. They are these: Prior to January, 1906, appellee had put on the market a visible typewriter and made a success of it. Its success was so great that its competitors were driven to a like machine. In January, 1906, appellant began to make and sell such typewriters. Between that time and June, 1906, it made and sold 640 visible typewriters. None of them was equipped with a tabulator. It realized from such sales a profit of $1.22 on each one, or $780.80 in all. In June, 1906, it began to equip its typewriters with appellee's tabulator, and continued so to do until the expiration of the patent, September 23, 1907. It so did because it was indispensable that it should so do to maintain itself in business. The necessity here was probably not so great as before. But it was a real necessity. Appellee's tabulator was the only practically and commercially successful tabulator. It was highly useful in saving time and annoyance. It added greatly to the salability of a typewriter. It was difficult to sell a typewriter without such an equipment. An expert user of typewriters, an expert salesman thereof, and an expert...