McKee Glass Co. v. H. C. Fry Glass Co.

• Decision Date: 29 January 1918
• Docket Number: 2310.
• Citation: 248 F. 125
• Parties: McKEE GLASS CO. et al. v. H. C. FRY GLASS CO.
• Court: U.S. Court of Appeals — Third Circuit

248 F. 125

McKEE GLASS CO. et al. v. H. C. FRY GLASS CO.

No. 2310.

United States Court of Appeals, Third Circuit.

January 29, 1918

Kay Totten & Powell, of Pittsburgh, Pa. (James I. Kay and Robert D. Totten, both of Pittsburgh, Pa., of counsel), for appellants.

Marshall A. Christy, of Pittsburgh, Pa., for appellee.

Before BUFFINGTON, McPHERSON, and WOOLLEY, Circuit Judges.

WOOLLEY Circuit Judge.

This matter arises out of contempt proceedings instituted against the defendants below for violation of a permanent injunction against infringement of the patent in suit (No. 628,027), and pertains to the amount awarded the complainant as compensation for its injuries.

This litigation was begun in 1906; it was bitterly fought through various state and federal courts (Fry Glass Co. v. McKee Glass Co., 239 Pa. 34, 86 A. 644; Blair v Jeanette-McKee Glass Works (C.C.) 161 F. 355; Libbey Glass Co. v. McKee Glass Co. (D.C.) 216 F. 172, affirmed 220 F. 672, 136 C.C.A. 314); and it reached perhaps its final stage in a recent decree of the District Court (now before us on appeal) imposing upon the defendants a penalty for violating its injunction.

We are not concerned with this protracted litigation, except as it bears upon the proceedings for contempt of the court's final decree, in which violation of the injunction is admitted and entire contempt for the court's decree is shown.

The questions raised on this appeal are three: The first has to do with the principle upon which the court formulated a penalty against the defendants; the second and third relate to certain items in the amount of the penalty.

The defendants do not deny their liability to the complainant for injuries proven to have been sustained; but maintain, that in imposing the penalty, the trial court exceeded its powers by adding to the remedial amount ascertained a sum that is purely punitive. They argue that the purpose of a civil prosecution for contempt is remedial rather than punitive and that the penalty to be imposed should correspond with and be no greater than the loss, expense, and injury which the complainant is shown to have sustained by reason of the defendants' misconduct and disobedience; citing Wells v. Oregon Ry. & Nav. Co. (C.C.) 19 F. 20; Christensen Engineering Co. v. Westinghouse Air Brake Co., 135 F. 774, 68 C.C.A. 476. We find that we are not called upon either to consider or decide any question of punitive and remedial penalties in contempt proceedings, because the record makes it very clear that the award in this case was within the principle contended for by the defendants, in that, it shows no attempt on the part of the court to impose a punitive penalty, but shows, on the contrary, that the court was careful to restrict its award to compensation for injuries actually sustained. The trial judge said:

'In fixing penalties for civil contempts, it seems to the court important that care should be taken to give the plaintiff full compensation for the injuries sustained, and not more.'

The only question, therefore, is: Whether the trial judge in awarding the complainant indemnity for its injuries, abused his discretion by making an award in excess of injuries proved.

The penalty imposed amounts to $25,151.70. It is made up of several items, which in round numbers are as follows:

Net infringing profits realized by defendants . . . $ 8,000.00

Royalty at 6 per cent. on defendants' entire sales of $41,713.97 . . .2,500.00

Complainant's expenses and costs, and master's fee . . . 4,700.00

Additional compensation for complainant's injuries . . . 10,000.00

The assignments of error embrace all items except those of complainant's expenses and costs, and master's fee; but at the argument they were limited to the compensation item of $10,000.00 and the royalty item of $2,500.00.

The defendants charge that the court abused its discretion by allowing $10,000.00 as compensation for the complainant's injuries, in that, it arbitrarily made the allowance without any evidence of injuries sustained by the complainant to which such compensation is applicable. The defendants base this contention upon the theory that all matters of the complainant's injuries and compensations were referred to a master, who showed by his report that all injuries sustained were compensated for in the items of profits, royalties, expenses, and costs, therein set forth, and, that, therefore, there was no evidence upon which to predicate the court's award of $10,000.00 subsequently made for additional compensation. Of course, if this is the fact, the contention of the defendants is sound. What is the fact?

The contempt proceedings were conducted in open court and consumed three days. Many witnesses were heard, and there were offered in evidence the entire record of this case and of the case in the Pennsylvania state courts, in much of which litigation the trial judge had taken part and with all of which he was thoroughly familiar. It became clear at the hearing, that certain of the complainant's injuries arose from infringing profits which had enured to the defendants, and that an accounting of such profits was necessary. The trial judge, therefore, appointed a master to ascertain these profits and damages-- 'to assist (him) in arriving at proper pecuniary penalties which should be imposed upon the defendants in relief of the plaintiff. ' After the master had filed his report, showing an accounting, the court said:

'The findings of the master as reported in aid of the court are based upon actual figures taken from books of the defendants and from the records of the case. They will not compensate the plaintiff for the injuries done it.'

Continuing, the court said:

'The history of this litigation, shows that the defendants have been most persistent in their acts of infringement of the plaintiff's rights, and that they have in a marked degree treated not only the decrees but the jurisdiction of this court with contempt. It is plain from all the testimony in this case (by which we surmise the court meant that which was taken in open court as well as that which was taken before the master) that the plaintiff has suffered injury at the hands of the defendants to an extent which cannot be accurately measured in dollars and cents.'

The court then added to the items of the master's report the disputed item of $10,000.00.

The record, as it appears before us on this appeal, embraces only the testimony taken before the master upon which alone his accounting and findings were based. But there was testimony heard by the trial judge which was not heard by the master, to which, manifestly the trial judge alluded when he said:

'It is plain from all the testimony in the case that the plaintiff has suffered injury at the hands of the defendants which cannot be

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