Wales v. Waterbury Mfg. Co..
| Decision Date | 28 February 1900 |
| Docket Number | 11. |
| Citation | 101 F. 126 |
| Parties | WALES v. WATERBURY MFG. CO. |
| Court | U.S. Court of Appeals — Second Circuit |
Roger Foster and Roger S. Baldwin, for complainant.
John K Beach, for defendant.
Before WALLACE, LACOMBE, and SHIPMAN, Circuit Judges.
We agree with the conclusions of the learned judge who decided the cause in the court below as to the validity of claims 1 2, and 3 of the patent in suit, and deem it unnecessary to add anything to his very satisfactory opinion. 87 F. 920. We are unable, however, to agree with his conclusions in respect to the amount of profits which the complainant was entitled to recover.
The patent is for an improved lever buckle, adapted for use upon various articles of men's and women's wearing apparel. The buckle of claim 3, as appears from the demand which it eventually supplied in the trade, is especially adapted to the fastening device of a pencil holder, a metal case or frame shaped to receive a lead pencil, and pivoted upon the base of the buckle, and forming, with the buckle, a pencil carrier to be worn on the edge of the watch or side pocket of the vest. The pencil holder was devised by Mr Wales, one of the patentees and the inventor of the buckle who conceived that when it was attached to the buckle the integral device would be attractive and convenient, and would especially command the favor of the stationers' trade. He introduced the buckle and pencil holder to the notice of the defendant, and made arrangements with the defendant to become the sole manufacturer. Probably because the pencil holder alone was useless, and derived its whole value by being attached to the buckle, and the integral device could not be made or sold without infringing the buckle patent, Mr. Wales did not patent the combination. The patent having been in the meantime assigned to the complainant, the wife of the inventor, in 1880 she made a license agreement with the defendant, by the terms of which she granted to the defendant the exclusive right of making and selling the buckle, and the defendant agreed to pay a royalty varying from 10 to 25 cents a gross for the buckle alone (depending upon the sizes), and when sold with the pencil holder to pay a graded royalty amounting to $2.03 1/2 per gross when the sale price should be $5.08. In the following year the complainant revoked this license, alleging noncompliance by the defendant with the license; but the defendant, notwithstanding, continued to make and sell the buckles and pencil holders, and between that time and the date of the expiration of the patent sold 9,361 gross of the combined article, realizing therefrom as net profits admittedly the sum of $22,887, and, accepting as correct the findings of the master upon the accounting, a considerably larger sum. Upon the basis of the license the royalties upon these sales would amount to over $19,000. The court below awarded the complainant $4,483 for these profits, arriving at the amount by charging the defendant only with the difference between the cost of the buckles and the price they would have brought if they had been sold separately from the pencil holders. It is manifest that the defendant would not have sold the 9,361 gross of pencil holders if it had not attached them to the patented buckle, or to some other buckle which would have satisfactorily supplied its place as an adjunct of the holder. The proofs indicate that other buckles, which were open to public use, could have been attached to the holders, but the organized device would have been a clumsy and unattractive one, while the patented buckle was peculiarly adapted for the purpose, and was the part which commended the organized device to purchasers. The master found that the patented buckle was 'the best and only known buckle that could have sold pencil holders, and no part of the profits would have been made except for it. ' It is reasonable to suppose that the defendant's managers would not have exposed it to liability as an infringer if they had believed that some other buckle, which they were at liberty to use, would have answered the purpose of the patented buckle as an adjunct of the holders; and, notwithstanding some evidence to show that it would, and that the spring buckle plate, an unpatented feature added to the buckle, contributed to its popularity, we are satisfied upon the proofs that the master was correct in his finding, and that there would have been no appreciable demand for the holders if they had not been attached to the patented buckle. The license in fixing such a large royalty upon the buckle when sold with the holders points also to this conclusion. In his opinion disposing of the master's report, the learned judge in the court below did not discuss the finding of fact that, but for the use of the buckle, the buckle and holder would not have been a marketable device; but in his opinion rendered upon granting the interlocutory decree it is stated that the patented buckle was 'apparently the only practicable solution of the problem presented,' which was to devise a lever buckle having characteristics, among others adapting it to be used for carrying a pencil holder. In disallowing the profits upon the combined buckle and lever, he did so apparently in deference to the rule that, where the articles which have been made and sold by the infringer contain not the patented invention alone, but other inventions or improvements, the profits for which he is to account are not the total profits, but those only which are attributable to the presence of the patented invention. This has always been the rule, and it is manifestly a just one upon principle; but it is often difficult of practical application, and the courts have sometimes applied it so that it has not produced an equitable result. In many cases, where it is obvious that the patented invention has contributed a great part of the profits realized from selling the infringing article or apparatus embodying unpatented features, it is practically impossible for the complainant to establish affirmatively the proportionate part. The present case is an illustration. None of the patented buckles like those attached to the pencil holders, those of the third claim of the patent, were ever sold to an extent and under circumstances to establish satisfactorily their market price. No pencil holders detached from the...
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