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Page Number: 13

10 

LIU v. SEC 

Opinion of the Court 

wrongdoing, not against multiple wrongdoers under a joint-
and-several  liability  theory.    See  Ambler  v.  Whipple,  20 
Wall.  546,  559  (1874)  (ordering  an  accounting  against  a
partner  who  had  “knowingly  connected  himself  with  and 
aided in . . . fraud”).  In Elizabeth v. Pavement Co., 97 U. S. 
126  (1878),  for  example,  a  city  engaged  contractors  to  in-
stall pavement in a manner that infringed a third party’s 
patent.  The  patent  holder  brought  a  suit  in  equity  to  re-
cover  profits  from  both  the  city  and  its  contractors.    The 
Court  held  that  only  the  contractors  (the  only  parties  to 
make  a  profit)  were  responsible,  even  though  the  parties 
answered jointly.  Id., at 140; see also ibid. (rejecting liabil-
ity for an individual officer who merely acted as an agent of 
the defendant and received a salary for his work).  The rule 
against joint-and-several liability for profits that have ac-
crued to another appears throughout equity cases awarding
profits.  See,  e.g.,  Belknap  v.  Schild,  161  U. S.  10,  25–26 
(1896) (“The defendants, in any such suit, are therefore lia-
ble to account for such profits only as have accrued to them-
selves from the use of the invention, and not for those which 
have accrued to another, and in which they have no partic-
ipation”);  Keystone  Mfg.  Co.  v.  Adams,  151  U. S.  139,  148 
(1894) (reversing profits award that was based not on what
defendant had made from infringement but on what third 
persons had made from the use of the invention); Jennings 
v. Carson, 4 Cranch 2, 21 (1807) (holding that an order re-
quiring restitution could not apply to “those who were not 
in possession of the thing to be restored” and “had no power 
over  it”)  (citing  Penhallow  v.  Doane’s  Administrators,  3 
Dall. 54 (1795) (reversing a restitution award in admiralty 
that ordered joint damages in excess of what each defend-
ant received)).

Finally,  courts  limited  awards  to  the  net  profits  from
wrongdoing, that is, “the gain made upon any business or 
investment,  when  both  the  receipts  and  payments  are
taken into the account.”  Rubber Co. v. Goodyear, 9 Wall.