Ruth v. Stearns-Roger Mfg. Co.
| Decision Date | 23 December 1935 |
| Docket Number | No. 9178.,9178. |
| Citation | 13 F. Supp. 697 |
| Parties | RUTH v. STEARNS-ROGER MFG. CO. |
| Court | U.S. District Court — District of Colorado |
COPYRIGHT MATERIAL OMITTED
Max Melville, of Denver, Colo., for plaintiff.
Forrest C. Northcutt and Jesse G. Northcutt, both of Denver, Colo., for defendant.
This cause came on for hearing on exceptions filed by the defendant to the report of the special master. Oral arguments were presented and written briefs filed. Thereafter, an application was presented to the Court of Appeals for leave to file in the District Court, an original bill in the nature of a bill of review. The application was denied. See Stearns-Roger Mfg. Co. v. Ruth (C.C.A.10) 79 F.(2d) 425. The opinion on the application to file the bill of review, disposes of one of the principal questions here presented, adversely to the defendant.
The special master has filed herein, an excellent report, which manifests thoroughness and ability. It should serve as a model in future patent accounting cases.
In it, the special master has considered each of the questions here presented. I agree with his reasoning and his conclusions, and therefore, incorporate his report in this opinion. It follows:
Report of Robert B. Cartwright, Special Master.
This cause was referred to the undersigned as special master on an order of reference entered by the court the 13th day of February, 1933, to ascertain, take, state, and report to this court an account of the apparatus manufactured and/or sold by Stearns-Roger Manufacturing Company, which embody the invention of patent No. 1,277,750 as set forth in claims 1 and 3 thereof, and the profits which Stearns-Roger Manufacturing Company has received or which have accrued to it and/or the damages which Joseph P. Ruth, Jr., has suffered by reason of such infringement.
Findings of Fact.
The plaintiff, Joseph P. Ruth, Jr., hereinafter called Ruth, is the assignee of letters patent No. 1,277,750, granted to Jackson A. Pearce, September 3, 1918.
The defendant, Stearns-Roger Manufacturing Company, hereinafter called Stearns-Roger, is a corporation engaged, among other things, in the manufacture and sale of mining and milling machinery, and in the course of its business infringed claims 1 and 3 of the patent in suit, as held by the Circuit Court of Appeals of this circuit in Stearns-Roger Mfg. Co. v. Ruth, 62 F.(2d) 442, 449.
The infringing or accounting period begins on June 28, 1928, at which time Ruth caused to be attached to flotation machines manufactured and sold by him patent notice plates. From and after November 30, 1928, Stearns-Roger had actual notice of the patent in suit.
Before the taking of testimony, on motion of counsel for Stearns-Roger, filed in accordance with Equity Rule 59, 28 U.S. C.A. following section 723, the master entered an order directing Stearns-Roger to prepare and file an account in accordance with Equity Rule 63, 28 U.S.C.A. following section 723, specifying the information that such account should contain. Said order, in addition to requiring an account on the infringing devices, required an account on all parts made and sold by Stearns-Roger contributing to the infringement. On April 12, 1933, Stearns-Roger filed an account certified to as correct by H. C. Morey, secretary, covering two 6-cell flotation machines sold to the Colorado School of Mines, Golden, Colo., in 1930. A motion was filed with the account to quash that part of the order requiring an accounting on the parts. The motion to quash was denied. Ruth objected to the account and moved for an order on Stearns-Roger requiring it to file blue-prints of all flotation apparatus manufactured since June 15, 1928, and to render a further account in compliance with the master's order. Blueprints of 14 machines sold by Stearns-Roger subsequent to June 28, 1928, were filed. These blueprints, Defendant's Exhibits 1-A to 1-E, inclusive, were compared with drawing No. 4965, Exhibit I in the infringement suit in the District Court, which represents the machine the Court of Appeals held to be an infringement. The machines represented by such blueprints, aside from dimensional differences, were in all material respects similar to the infringing machine. The parts used were identical, their arrangement was the same, and the same process was employed. The sands holes were in the same relative position and were the same size or smaller than the sands hole in the infringing machine.
Machines represented by such blue-prints sold by Stearns-Roger subsequent to June 28, 1928, are:
Location Date Shipped
R. D. Webb November 21, 1928
Colo. Lead Zinc Co. December 7, 1928
Xichu Mining Company March 26, 1929
International Smelting Co. April 15, 1929
Piermont Mines July 3, 1929
Climax Molybdenum Company August 12, 1929
Vertex Mining Company September 13, 1929
Shenandoah Dives Mining Co. September 21, 1929
Shenandoah Dives Mining Co. October 28, 1929
Colo. School of Mines February 15, 1930
Cia Minera Fundidora March 20, 1930
Colorado School of Mines May 31, 1930
Willow Creek Mines July 14, 1930
W. R. Hall December 1, 1931
Counsel for Stearns-Roger took the position that such machines, with the exception of two sold to the Colorado School of Mines, were different, in that sands holes were employed, that such sands holes were necessary and essential for proper operation, and that a substantial part of the tailings was discharged through such sands holes. An offer of proof was made to sustain such contention.
All evidence with respect to the amount of tailings which discharge through the sands hole was rejected, for the reason that that issue had been tried and decided by the court. The Circuit Court in Stearns-Roger Mfg. Co. v. Ruth, supra, said:
Since the above is the law of the case and decides the issue of sands holes, I limited by inquiry to their size and relative position in the machines. After determining that the sands holes in the above machines were in the same relative position as the sands hole in the infringing machine and were the same size or smaller, a further account was ordered.
Stearns-Roger thereupon filed an account, Exhibit A, covering such machines. Morey and other officials and employees of Stearns-Roger were produced before the master at Denver where the books and records were.
Extras.
In the statement of account (Exhibit A) submitted by Stearns-Roger on infringing machines, the shop cost reported therein on some of the machines contains, in addition to the cost of the infringing machine, the cost of extras which were sold with the machine. These extras consisted of motors, texrope drives, texropes and switches, and were no part of the infringing unit proper. The sale price of such extras is also reported in the selling price.
The following table, marked A, shows the sale price of extras and the cost of extras:
TABLE A
Sale Price Cost of
Machine of Extras Extras
Colorado Zinc Lead Co. $ 328.00 $ 233.93
International Smltg. Co. 150.00 150.00
Piermont Mines 532.00 478.28
Climax Molybdenum Co. 1,200.00 1,067.20
Vertex Mining Co. 1,516.00 1,102.64
Shenandoah Dives Mng. Co. 470.00 391.80
The following table, marked B, shows the sale price of infringing machines, sales price of extras deducted, and cost of infringing machines, cost price of extras deducted:
TABLE B
Machine Sale Price Cost
R. D. Webb $ 5,586.00 $ 3,934.44
Colorado Zinc Lead Co. 5,688.00 4,138.97
Xichu Mining Co. 7,760.00 5,442.02
International Smltg. Co. 17,450.00 12,933.83
Piermont Mines 3,688.00 2,371.72
Climax Molybdenum Co. 4,017.00 3,804.23
Vertex Mining Co. 3,984.00 3,156.17
Shenandoah Dives Mng. Co. 2,180.00 1,697.48
Shenandoah Dives Mng. Co. 17,280.00 1,685.22
Colo. School of Mines 542.00 495.85
Cia Minera Fundidora 4,700.00 3,838.59
Colo. School of Mines 697.50 713.13
Willow Creek Mines 1,665.23 1,785.64
W. R. Hall 950.00 579.48
Shop Cost.
The infringing machines were constructed in the shops of the General Iron Works at Denver in accordance with plans and specifications furnished by Stearns-Roger. General Iron Works supplied the labor and all material necessary which it carried in stock. Other material needed in the construction of such machines was supplied by Stearns-Roger. Upon completion of a machine, General Iron Works furnished Stearns-Roger with an invoice which included the cost of materials furnished it and a charge for labor. In arriving at cost, Stearns-Roger took the amount of this...
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