Krentler-Arnold Hinge Last Co. v. Leman

• Decision Date: 14 February 1928
• Docket Number: No. 1853.,1853.
• Citation: 24 F.2d 423
• Parties: KRENTLER-ARNOLD HINGE LAST CO. v. LEMAN et al.
• Court: U.S. District Court — District of Massachusetts

24 F.2d 423 (1928)

KRENTLER-ARNOLD HINGE LAST CO. v. LEMAN et al.

No. 1853.

District Court, D. Massachusetts.

February 14, 1928.

James R. Hodder, Robert Cushman, and Roberts, Roberts & Cushman, all of Boston, Mass., for plaintiff.

Ellis Spear, Jr., and Edward N. Goding, both of Boston, Mass., for defendants.

LOWELL, District Judge.

This case related to patents for hinged lasts. It was begun by the Krentler Company, which brought suit on September 12, 1923, against George E. Belcher, doing business as the Belcher Company, for infringement of patent No. 842,319, granted to George A. Krentler on January 29, 1907, which was then about to expire, and on patent No. 969,244, granted on September 6, 1910, to Rudolph Carl. The Belcher Company denied infringement, and set up a counterclaim on the patent to O. A. Peterson, No. 1,195,266, of August 22, 1916. The Krentler Company depended on its later patent to W. A. Krentler, No. 1,459,061, granted June 19, 1923, as a defense to this counter suit. The District Court (300 F. 834) decided that the first Krentler patent was not infringed and that the only claim of the Carl patent which was relied on (claim 1) was invalid. It further held that the Krentler Company had infringed the Peterson patent and that the second Krentler patent was not a defense to the infringement. This opinion was handed down in July, 1924. Shortly thereafter Belcher died, and the Krentler Company interposed many technical objections to the title of the Belcher Company, which had succeeded to the rights of Belcher. The interlocutory decree was entered in August, 1925. On appeal the Circuit Court of Appeals (13 F.2d 796) sustained the District Court on all points except the minor one of allowing Peterson himself to be made a party to the case.

After the decision in the Circuit Court of Appeals the case was sent to Arthur P. Hardy, Esq., as master, to report the damages and profits. His report was filed on December 14, 1927. It appeared in evidence before him that the Krentler Company had kept on infringing till November, 1925. The testimony before the District Court showed that the Krentler Company tried to buy the Peterson patent, and, being unsuccessful, got out the second Krentler patent above referred to, in order to have a patent to enable it to make the devices which the Belcher Company claimed were in infringement of the Peterson patent.

The present proceeding relates to exceptions to the master's report. The master found that the Krentler Company had made profits of $10,368.30. He then proceeded to assess damages, and, as no items of damage could be proved, he made use of the "reasonable royalty" rule, and determined that the damages amounted to $6,921.43. The Belcher Company asked the master to allow proof of its expenses of litigation, which he refused to do.

The master rendered a very careful and clearly expressed report. Though I am of opinion that he erred in allowing damages, as well as profits, the case can be settled without the necessity of sending it back to him. The Krentler Company took ten exceptions to the report, only three of which need be mentioned. It excepted to the master's refusal to allow certain overhead expenses to be deducted from the profits which the master found to be the result of sales of infringing devices. On this point the master correctly ruled that the burden was on the Krentler Company to prove that these expenses were made necessary by the extra cost of producing the infringing devices, or at least to show specifically what portion of them was due to the infringement. Westinghouse Co. v. Wagner Co., 225 U. S. 604, 32 S. Ct. 691, 56 L. Ed. 1222, 41 L. R. A. (N. S.) 653.

The master held that this burden had not been sustained, and on this point also I agree with him. The Krentler Company also excepted to the ruling of the master that damages as well as profits should be allowed to the Belcher Company. In my opinion this exception is well taken. The profits of the Krentler Company were proved. There were no facts from which damages could be proved, and the master resorted to the reasonable royalty rule. In this respect he was in error. The rule of law allowing damages to be assessed under the guise of a reasonable royalty arose in cases where the evidence showed that damage had been sustained, but there were no sufficient facts from which to ascertain actual damages.

The leading case on the subject is United States Frumentum Co. v. Lauhoff, 216 F. 610, in which Judge Denison in 1914 in a learned and able opinion delivered the decision of the Circuit Court of Appeals for the Sixth Circuit. The judge characterizes this kind of proof as the determination of "general damages." 216 F. at page 617.

The material part of the statute governing the case at bar (section 70 of title 35 of the U. S. Code 35 USCA § 70; Comp. St. § 9467) is as follows:

"The several courts vested with jurisdiction of cases arising under the patent laws shall have power to grant injunctions according to the course and principles of courts of equity, to prevent the violation of any right secured by patent, on such terms as the court may deem reasonable; and upon a decree being rendered in any such case for an infringement the complainant shall be entitled to recover, in addition to the profits to be accounted for by the defendant, the damages the complainant has sustained thereby, and the court shall assess the same or cause the same to be assessed under its direction. If on the proofs it shall appear that the complainant has suffered damage from the infringement or that the defendant has realized profits therefrom to which the complainant is justly entitled, but that such damages or profits are not susceptible of calculation and determination with reasonable certainty, the court may, on evidence tending to establish the same, in its discretion, receive opinion or expert testimony, which is hereby declared to be competent and admissible, subject to the general rules of evidence applicable to this character of testimony; and upon such evidence and all other evidence in the record the court may adjudge and decree the payment by the defendant to the complainant of a reasonable sum as...