United States Frumentum Co. v. Lauhoff

• Decision Date: 30 June 1914
• Docket Number: 2406.,2405
• Citation: 216 F. 610
• Parties: UNITED STATES FRUMENTUM CO. v. LAUHOFF et al.
• Court: U.S. Court of Appeals — Sixth Circuit

216 F. 610

UNITED STATES FRUMENTUM CO. v. LAUHOFF et al.

Nos. 2405, 2406.

United States Court of Appeals, Sixth Circuit.

June 30, 1914

3. The herein described process of producing films from corn consisting in first crushing the cereal in its normally dry condition to granules and subsequently subjecting said granules, in their normally dry condition, to a drawing compression, substantially as described.'

It is conceded that the patented product and (except for the drawing step) the patented process differed from the earlier ones of Gent (who called his product 'cerealine') only in that the 'grits' or granules produced by crushing the hulled and germ-freed kernels were, by Gent steam-soaked and cooked before they were rolled into films while Lauhoff retained these grits in their 'normally dry' condition. Doubts as to the patentability of this change or step omission at once suggest themselves, but it has been conceded from the beginning of the case that Frank Lauhoff as patentee, and the other defendants by virtue of his relations to their joint enterprise, are estopped to deny the patent's validity; so that infringement and damages have been and are the only questions in dispute. To make its prima facie case, plaintiff produced an expert witness who testified that certain flakes, confessedly produced by defendants, were the product called for by the second claim and had necessarily been made by the process of the third claim of the patent; more specifically, that these flakes could not have been produced if the grits had been effectively steamed before rolling. Defendants met this proof only by an expert who said that the flakes might have been steamed before rolling and still have all their existing characteristics. The District Judge accepted plaintiff's theory, thought the proof of infringement was sufficient, and made the usual interlocutory decree for injunction and accounting.

The Frumentum Company brought against the Lauhoff Bros. the usual infringement bill, based upon patent No. 440,866, of November 18, 1890. This patent was issued to Frank Lauhoff, who was instrumental in organizing the plaintiff corporation and assigned the patent to it, but later ceased his connection with the Frumentum Company and, it is said, caused the defendant partnership, of which he was a member, to engage in infringing. The patent contained three claims, of which the first two are, for the purposes of this case, equivalent. Claims 2 and 3 are as follows: The defendants continued to manufacture, pending accounting. The master's report was not made until 2 1/2 years after the interlocutory decree, and both parties took evidence before the master upon the question of infringement during his period. The master found that the infringement had continued; that the defendants had made no profits; that plaintiff's profits, if it had made the sales which defendants made, would have been $13,000; and that plaintiff was damaged in this amount. The defendant took exceptions, and on final decree the District Court affirmed the master's finding that the infringement had continued throughout the accounting period, and to the total amount stated; but concluded that plaintiff's proof was insufficient to support the conclusion that, except for the infringement, it would have made the sales. A final decree was therefore entered in favor of plaintiff, but for nominal damages only. The parties bring these cross-appeals.

R. A. Parker, of Detroit, Mich., for the United States Frumentum company.

James Whittemore, of Detroit, Mich., for Lauhoff and others.

Before WARRINGTON and DENISON, Circuit Judges, and DAY, District judge. ^[1]

DENISON Circuit Judge (after stating the facts as above).

The first substantial question is whether defendants, upon the accounting, were at liberty to deny infringement during the accounting period. The argument is that since they were necessarily, while before the master, bound by the interlocutory decree to the effect that what they had been doing was infringement, and that since they claimed to be doing the same thing after the decree as before, the issue was necessarily foreclosed, also, as to the second period. Of course, a master may not re-examine questions adjudicated by the decree and order of reference, but that rule does not reach the peculiar circumstances of this case. The defendants' apparatus, as described by them, contained a chamber in which the grits might be steamed in their progress to the rolls, and contained steam pipes and valves permitting this chamber to be so used. Whether infringement was thereby avoided depended on whether the defendants opened the valves and put steam into this chamber and how much steam was admitted and at what temperature and how long the grits were exposed thereto. It might be quite true that the defendants infringed up to the date of the interlocutory decree, and thereafter, although using the same apparatus, did not infringe. Under these conditions, the issue of fact regarding infringement pending accounting was open to defendants, and it was right for both parties, as they did, to produce testimony directed to that issue. Only in connection with a finding that the manipulation of the apparatus by the defendants was the same after the interlocutory decree as before could the decree operate to foreclose the question of later infringement.

We are not satisfied on this record to disturb the finding of infringement contained in the interlocutory decree or the finding of later infringement made by the master and affirmed by the final decree. Not only is it the settled rule that such concurrent findings, where the issue is one of fact, will not be set aside unless plainly wrong; but we think the lower tribunals drew the proper inference from the entire record. While a patentee-assignor may, when made a defendant, litigate the scope of his patent and have it judicially construed according to its true extent (Noonan v. Chester Co. (C.C.A. 6) 99 F. 91, 39 C.C.A. 426; Smith v. Ridgley (C.C.A. 6) 103 F. 875, 43 C.C.A. 365), the courts surely will not, unnecessarily, construe it so narrowly as to make it worthless. See Alvin Co. v. Scharling, by Judge Gray (C.C.) 100 F. 87. They will be inclined, so far as the record permits, to make its exclusive right a real and valuable thing. Ordinary equitable considerations must require this point of view, and the resulting liberality of construction. The substantial validity which this patent imports may well rest on the distinction between, on the one hand, sufficient soaking or cooking to swell or burst the starch cells and tend to create a pasty mass, and, on the other, the absence of any moistening which would prevent the grits from coming to the rolls in raw, normal condition. There can be no absolute standard of 'normal' moisture in a grain. The record seems to show an approximate standard for corn thoroughly matured and dried; but this varies considerably in the published tables, and must vary with weather and other conditions. Granting validity to the patent, it can hardly be that it would be infringed by manufacturing last year's corn normally containing 11 or 12 per cent. of moisture and would not be infringed by manufacturing, by the same process, this year's imperfectly matured corn containing 16 to 18 per cent. of moisture; yet this extra 4 to 7 per cent. of moisture is about what defendants claim to have added in their process. When we consider the indefinite limitation of the claim, the small amount of moisture which defendants say they added in the tests which they describe, the facts that there is no definite testimony as to how much steam they used in their process, that whether they used any was a matter of choice, that an experienced and disinterested manufacturer was sure the patented process must have been used in the product, and the further fact that defendants continually and repeatedly refused to permit any examination of their process or apparatus, we are better satisfied with the result reached below on this point than we could be with the contrary result.

It is clear that, as the case was presented to the master, his ultimate finding of damages must rest on the premise, proved or presumed, that the plaintiff would have made the sales in question if the defendants had not made them. Obviously where plaintiff seeks damages on the theory of lost sales, this premise is an essential step. There was here no direct proof. It was shown (and we assume sufficiently) that plaintiff had factory facilities for manufacturing the additional amount and so could have filled the orders; but the proof stopped there. There was no testimony that defendants' customers had formerly bought from plaintiff, nor that they were in negotiation with plaintiff or in a territory in which plaintiff was selling, nor of others of those circumstances sometimes held sufficient and sometimes held insufficient to raise the presumption that plaintiff would have made the sales. This presumption is not one of law. Dobson v. Dornan, 118 U.S. 10, 17, 6 Sup.Ct. 946, 30 L.Ed. 63; McSherry v. Dowagiac (C.C.A. 6) 160 F. 948, 89 C.C.A. 26. If it exists, it must be raised by the proofs as one of fact. No doubt this presumption may sometimes follows from the mere fact that some one buys or uses the infringing article, as in the cases of which Gould v. Cowing, 105 U.S. 253, 26 L.Ed. 987, is typical; but in that case, and in those cases generally, the infringing article was a special piece of apparatus, and it did not appear that anything else accomplishing the same purpose or generally similar was on the market. In the present case, the record is clear that plaintiff supplied only a small part of the market demand for the general product consisting of raw or...