Westinghouse Electric & Mfg. Co. v. Wagner Electric Mfg. Co.
| Decision Date | 21 January 1918 |
| Docket Number | 4457. |
| Citation | 248 F. 508 |
| Parties | WESTINGHOUSE ELECTRIC & MFG. CO. v. WAGNER ELECTRIC MFG. CO. |
| Court | U.S. District Court — Eastern District of Missouri |
Paul Bakewell, of St. Louis, Mo., and Thos. B. Kerr, of New York City, for complainant.
Melville Church, of Washington, D.C., and Edwin E. Huffman, of St Louis, Mo., for defendant.
The litigation in this case has extended over a period of more than 15 years, and has been before this court and the appellate courts several times. The original suit brought by the complainant against the defendant was a bill in equity alleging infringement of United States patent No. 366,362 granted to Westinghouse. The particular claim of the patent alleged to have been infringed was claim 4. That claim is as follows:
The claim having been therefore adjudicated in the Second Circuit ([C.C.] 112 F. 417, and 117 F. 495, 55 C.C.A. 230), a preliminary injunction was consented to by defendant here ([C.C.] 129 F. loc. cit. 609). The issue of infringement as to special types of construction, notably the Type M transformer, was vigorously contested upon a contempt proceeding (unreported opinion by Judge Amidon), and upon final hearing in the Circuit Court (129 F. 604), and upon appeal from accounting decree (173 F. 361, 97 C.C.A. 621). The case proceeded to an accounting in the Circuit Court, and the complainant electing to take profits in lieu of damages, the master, H.H. Denison, Esq., returned an award of $132,433.35. That report was disapproved by the court, and a decree for nominal damages and costs entered. That decree was affirmed by the Circuit Court of Appeals. 173 F. 361, 97 C.C.A. 621. Upon certiorari the Supreme Court (225 U.S. 604, 32 Sup.Ct. 391, 56 L.Ed. 1222) reversed and remanded the case for a hearing de novo upon accounting. The matter went again to the same master (Denison) who again found the profits to be $132,433.35. This court reduced the award to $10,000 (218 F. 646), and entered a decree for that amount. This decree was reversed by the Circuit Court of Appeals, as I understand it, for failure of the master to give due weight to the additional evidence offered by the defendant on that (second) accounting, and the case was again remanded for an additional report "showing the basis and constituents of the award which is recommended." This court then appointed James L. Hopkins, Esq., master, who has returned an award of $182,394.59.
To hold and sustain this report the complainant urges upon the court consideration of the rule that accords to the findings of a master the degree of weight and of conclusiveness which is carried by the special verdict of a jury. The attitude of the complainant in this particular must be somewhat embarrassing to it, in view of the claim made by it on the first accounting. Considering the prior course of this litigation, and the large monetary interests involved, the court will not permit its own judgment to be defeated by blindly adhering to the rule now so strenuously invoked by complainant. If such contention be allowed, it would amount to a positive mandate to judgment, regardless of the substantial equities of the cause. This court is not to be more irrevocably bound by the rule invoked than the appellate tribunals which have heard the same matters, particularly in view of the fact that the present master considered only the printed record, and none of the witnesses testified before him orally.
Finally, and somewhat by way of reductio ad absurdum, this court has had presented to it in the course of this very accounting three separate reports of profits. These reports emanate from two different masters; the first two by Mr. Denison, and the last one (now being considered) by Mr. Hopkins. In stating the amount of profits, there is a difference of $50,000. Such a difference is confusing, when the two results are ascertained from one and the same record.
It may be suggested that the master making the second report avowedly took no real cognizance of the new evidence offered at the time of the second hearing, but that the master (Denison) considered only the proofs of the first reference, and therefore naturally followed his findings made upon the first reference. Assuming this to be true, we are then confronted with a further marvel, namely, that the defendant, being the only party to introduce proofs on the second reference, has, as the fruits of such evidence, plunged itself from an award of $132,433.35 to an award of $182,394.59. It therefore devolves upon this court to carefully consider the entire record before entering a judgment.
It may be stated that the decisions above referred to conclusively adjudicate the validity of claim 4, and determine the fact of its infringement by oil-filled transformers having core spaces. Obviously, such validity carried with it a determination that the device possesses patentable utility. But the latter phrase may only be taken to imply that the device will function or operate, and is to be distinguished from commercial value; for it will be readily seen that the fact of the device being operable will not necessarily lend its practical commercial value in possible competition with noninfringing, but economically superior, constructions. Nor, upon the finding that the device does possibly possess some commercial value, does it follow that the entire value, and therefore the entire profits, are derived from and to be attributed to the infringement. The Circuit Court of Appeals has determined the scope of the invention to be that of "a limited, detailed claim"; and the opinion of the Supreme Court seems to recognize the probability that the great mechanical desideratum is keeping the coils, not the core, from overheating, and that possibly the commercial value of so narrow a claim as this one has been determined to be is therefore slight.
The issues raised upon the present accounting naturally resolve themselves into three inquiries, viz.: (1) What infringing transformers were sold by the defendant during the accounting period, and their value? (2) What profits were realized by defendant from such sales? (3) What portion of such profits were attributable to the infringement? These inquiries will be briefly considered in the order just stated.
I. It will be remembered that upon...
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