National Carbon Co. v. Richards & Co.

• Decision Date: 10 August 1936
• Docket Number: No. 327.,327.
• Citation: 85 F.2d 490
• Court: U.S. Court of Appeals — Second Circuit
• Parties: NATIONAL CARBON CO., Inc., v. RICHARDS & CO., Inc., et al.

85 F.2d 490 (1936)

NATIONAL CARBON CO., Inc., v. RICHARDS & CO., Inc., et al.

No. 327.

Circuit Court of Appeals, Second Circuit.

August 10, 1936.

Gifford, Scull & Burgess, of New York City (Newton A. Burgess, of New York City, of counsel), for appellants.

Watson, Bristol, Johnson & Leavenworth, of New York City (L. A. Watson, C. V. Johnson, and C. P. Bauer, all of New York City, of counsel), for appellee.

Before MANTON, SWAN, and CHASE, Circuit Judges.

SWAN, Circuit Judge.

The patents in suit relate to improvements in adsorptive carbon and the process of making the same. The defendants are not charged with infringement of the patented process, but with infringement of certain product claims by the use of infringing carbon in their business. One of the defendants, the Zapon Company, has succeeded to the assets and liabilities of the other, Richards & Co. Inc., and they have successively owned and operated a plant in Stamford, Conn., for the manufacture of pyroxylin coated fabrics and lacquers. In the process of coating fabrics valuable solvents are used and one of the problems of the business is to recover such solvents as are evaporated in drying the coated fabrics so that they may be used again. To this end the defendants at first operated a recovery plant which employed no carbon and which for convenience will be referred to as the condensation and creosote system. On June 1, 1930, after this recovery plant had become somewhat inefficient, the defendants installed a new system by which the mixture of solvent vapor and air in the coating machine was, after cooling, passed through a carbon adsorber until the carbon became saturated with the absorbed solvent. The adsorber was then blown out with steam and the mixture passed through a condenser, a separator, and a rectifying still, thereby recovering the solvents in a form ready for re-use. Three carbon adsorbers, arranged so that the recovery process might be continuous, were utilized. The carbon so used by the defendants from June 1, 1930, to June 30, 1934, is the basis for the charge of infringement in the present suit.

At the trial the defendants' counsel stated that no defense was to be made as to validity or infringement of the claims in suit, and they offered no evidence in support of the denials of validity and infringement contained in their answer. They now maintain, though apparently no such contention was made below, that the bill should have been dismissed because the plaintiff failed to carry its burden of proving infringement. The point has no merit. It was proved that the defendants, with knowledge that they would be charged with infringement, purchased from the Barnebey-Cheney Engineering Company carbon that was known as "60 Minute Adsorbite." Though in part hearsay, this evidence was admitted prior to objection and no motion was made to strike it out. Dr. Ray testified that he had tested 60 Minute Adsorbite of the Barnebey Company and found it to infringe the claims in suit. Furthermore, Dr. Ray gave his opinion as an expert, based on Mr. Creighton's description of the defendants' cycles of operation and efficiency of recovery, that any carbon so operating infringed the claims. His testimony was not even subjected to cross-examination. On this record the plaintiff made out a prima facie case of infringement.

On the accounting the plaintiff secured an award of $24,410.65 representing profits for which the defendants must account. They contend that the recovery should have been only nominal because the plaintiff failed to make an apportionment of the profits derived by the defendants from their solvents recovery equipment so as to show what part was due to use of the infringing carbon and what to the rest of the equipment. Concededly the case falls within rule (d) of the principles laid down in Westinghouse Electric, etc., Co. v. Wagner Mfg. Co., 225 U.S. 604, 614, 32 S.Ct. 691, 56 L.Ed. 1222, 41 L.R.A.(N.S.) 653. That rule requires the plaintiff, where both the patented invention and other factors have contributed to the profits, to apportion the profits, or else to prove that he is entitled to the entire fund, which he may do by showing either that "the entire value of the whole machine, as a marketable article, is properly and legally attributable to the patented feature" (225 U.S. 604, at page 614, 32 S.Ct. 691, 694), or that the defendant has "inextricably commingled and confused the parts composing" the fund (225 U.S. 604, at page 618, 32 S.Ct. 691, 696). The trial judge held that apportionment was impossible and that the plaintiff was entitled to the entire profits, but he nevertheless reduced them by the amount of profits which the defendants would have realized had they continued to use the superseded condensation and creosote system, renovated so as to restore its 1927 efficiency, which the parties seemed to agree would be a fair standard of comparison. The profits from solvent recovery with the carbon system were found to be $38,353.36 and the profits attainable had the renovated condensation and creosote system been used were found to be $13,942.71. The plaintiff's award was the difference between these sums. The result of thus reducing the actual profits by such application of the standard of comparison, which was the best noninfringing alternative, was equivalent to an apportionment of the profits so as to show the part attributable to the use of carbon. Both systems were essentially the same in functional processes, although the old system used condensation coils and adsorbent creosote of oil to catch and hold the volatile solvent vapors while the infringing system used adsorbent carbon, and this necessitated differences in mechanical appurtenances; but each system produced only the result of recovering solvents. Hence the operation of the old system as a whole is a fair standard of comparison for determining the advantage gained by operation of the new system as a whole. Cf. Cambria Iron Co. v. Carnegie Steel Co., 224 F. 947, 954 (C.C.A.3); Morgan Const. Co. v. Forter-Miller Engineering Co., 234 F. 324 (C.C....