Source: https://supreme.justia.com/cases/federal/us/145/29/
Timestamp: 2019-04-25 17:50:43+00:00

Document:
An assignee in bankruptcy is not bound to accept the title to a patent for an invention, vested in the bankrupt at the time of the bankruptcy if in his opinion it is worthless, or may prove to be burdensome and unprofitable; and his neglect for a year, during which he winds up the estate, to assume the ownership of such property, and his statement to a person desiring to purchase it that he has no power to do anything with it and that the bankrupt is the only one who can give title, are convincing proof of an election not to accept it.
It does not lie in the mouth of an alleged infringer of a patent to set up the right of an assignee in bankruptcy to the patent as against a title acquired from the bankrupt with the consent of the assignee.
"whenever, through inadvertence, accident, or mistake, and without any fraudulent or deceptive intention, a patentee has claimed more than that of which he was the original or first inventor or discoverer,"
"make disclaimer of such parts of the thing patented as he shall not choose to claim or hold by virtue of the patent or assignment, stating therein the extent of his interest in such patent,"
is broad enough to cover disclaimers made to avoid the effect of having included in a patent more devices than can properly be made the subject of a single patent.
The power of a patentee to disclaim is a beneficial power, and ought not to be denied except when resorted to for a fraudulent and deceptive purpose.
The effect of delay by a patentee to make a disclaimer under Rev.Stat. § 4917 until after the commencement of an action for the infringement of his patent goes only to the recovery of costs.
Where the Revised Statutes adopt language of a previous statute which had been construed by this court, Congress must be considered as adopting that construction.
patent No. 163,828, dated April 10, 1870, both issued to Anthony V. Romadka.
The pioneer in an art, who discovers a principle which goes into almost universal use, is entitled to a liberal construction of his claim.
When a patented invention is infringed by its use upon another article of which it forms an inconsiderable part, taking the place of something previously serving the same uses, and there is no established royalty by which to measure the damages, they may be ascertained by finding the difference between the cost of the patented article and the cost of the article which it displaces; but this rule may be modified, if law and justice seem to require it.
When it is doubtful from the evidence whether the word "patented" could be affixed to a manufactured article or whether a label should be attached with a notice of the patent, under the provisions of Rev. Stat. § 4900, the judgment of the patentees is entitled to weight in determining the question.
A defendant in a suit for the infringement of letters patent, who relies upon a want of knowledge on his part of the actual existence of the patent, should aver the same in his answer.
When an assignee in bankruptcy refuses to accept a transfer of a right of action existing in the bankrupt at the time of the bankruptcy, and abandons it to the bankrupt before the expiration of the time within which an assignee in bankruptcy could bring suit upon it, the right of action of the bankrupt and of a purchaser from him are governed by the general statute of limitations, and not by the rule prescribed for an assignee in bankruptcy.
This was a bill in equity by the appellant Sessions for the infringement of letters patent No. 128,925, issued July 9, 1872, to Charles A. Taylor, for an improvement in trunks.
straps for fastening it down, I attach to its front two spring catches, I, and to the top two tangs or plates, J, which lock into and are held by the catches. Each catch consists of a metal socket, e, provided with a hinged latch or hook, f, and with a flat spring, g, which bears against the lower end of the latch and keeps its upper end pressed inward against the socket. The upper end of the latch or hook is provided with a prong, i, which extends through into the socket as shown in Fig. 4; the upper side of the prong being beveled off, as shown. The tangs on the top or lid are provided with beveled ends and with holes or openings, as shown. When the top is pressed down, the tangs slide down into the sockets, and the prongs, i, of the latches, lock through them in the manner shown in Fig. 4, so as to hold the top or lid down securely. In order to unlock latches, it is only necessary to turn back the upper ends of the hooks or laches so as to draw the prongs out of the tangs. After the latches are turned back a certain distance. the springs hold them in position, as shown in Fig. 1, and in dotted lines in Fig. 4, so that it is only necessary to attend to one of them at a time."
"3. The spring catches, I, constructed and applied to the front of the body, as described, in combination with the tongues or hasps, J, on the top, when arranged to operate as set forth."
The answer denied the validity of the patent and infringement of the same. After the testimony had been taken, the plaintiff entered with the Commissioner of Patents a disclaimer of all the claims of the patent except the one in suit, and upon the hearing upon pleadings and proofs, the court adjudged the patent to be valid, and that the defendants had infringed, and referred the case to a master to ascertain and report to the court the number of trunk fasteners made, used, and sold by defendants, and the profits which they had received and which had accrued to them since December 12, 1874, from their infringement, together with all damages in excess of such profits sustained by plaintiff and his assignor since that date.
"at the date of the granting of the patent to Taylor, the only known device for accomplishing the results produced by the trunk fastener was the ordinary trunk strap used in conjunction with the simple dowel pin. It seems, therefore, that the profits for which the defendants must account to complainant under the decree of this case are to be found by arriving at the cost of making and applying the strap and dowels and deducting therefrom the cost of making and applying the infringing trunk fastener manufactured and sold by the defendants."
for the infringement. 21 F. 124. Both parties appealed from this decree to this Court.
vested. It seems, however, that Poinier did not include this patent in his schedule of assets, upon the ground, as he said, of its being unproductive property and of no value. Indeed, all that he seems to have done with the patent was to make a lot of trunk fasteners in 1872, which proved to be failures, and which appear to have been the cause of his insolvency. He made no others for the three years before he went into bankruptcy. On May 15, 1877, he received his discharge, and on November 27th of the same year his assignee was discharged. On June 12, 1878, thirteen months after Poinier had received his discharge, and six months after his assignee had been discharged, Sessions bought a shop right of Poinier, for which he paid him $500, and in the same year purchased the patent itself, for which he paid him $1,000 additional. Mr. Shepard, who acted as the agent of the plaintiff in making this purchase, testifies that he went to Newark on the morning of June 6, 1878, and inquired for Henry W. Poinier.
"I was informed that one Mr. Miller was his assignee, and that I could learn of his affairs by seeing him. I then went to the office of Mr. Miller, and found him there, introduced myself, and told him that I had come to see him about a patent for a trunk fastener which was owned by Henry W. Poinier, and under which said Poinier had been making trunk fasteners, and I asked Mr. Miller if he would sell me said patent, or give me a shop right thereunder, as the assignee of Mr. Poinier. Mr. Miller replied that he could not do so; that the estate was all settled up; he had made his return to the court, and had been discharged as assignee, and he had no power to do anything in the matter. I asked him what I could do, and he said the only thing was to go to Mr. Poinier; that Poinier was the only one who could give me any title. . . . I learned that Mr. Poinier was in Rochester."
Rochester and found him there. The first assignment from Poinier was executed August 16, 1878, and conveyed only the title to the patent itself, but a second assignment, bearing date September 24, included also all rights of action for infringement from the date that Poinier himself acquired the title to it.
While, under the provisions of the bankrupt law, the title to this patent undoubtedly passed to the assignee in bankruptcy of Poinier, it passed subject to an election on his part not to accept it if in his opinion it was worthless or would prove to be burdensome and unprofitable, and he was entitled to a reasonable time to elect whether he would accept it or not. American File Co. v. Garrett, 110 U. S. 288, 110 U. S. 295; Sparhawk v. Yerkes, 142 U. S. 1; Amory v. Lawrence, 3 Cliff. 523, 535.
In this case, the assignee had taken a year to wind up the estate, and had given no sign of his wish to assume this property, if indeed he knew of its existence. On being asked with reference to it by the proposed purchaser, he replied that the estate was all settled up, that he had no power to do anything in the matter, and that Poinier was the only one who could give a title. A plainer election not to accept can hardly be imagined. Granting that up to that time he had known nothing about the patent, it was his duty to inquire into the matter if he had any thought of accepting it, and not to mislead the plaintiff's agent by referring him to the bankrupt as the proper person to apply to. Under the circumstances, plaintiff could do nothing but purchase of Poinier. Bearing in mind that no claim to this property is now made by the assignee, but that his alleged title to it is set up by a third person, who confessedly has no interest in it himself, it is entirely clear that the defendants ought not to prevail as against a purchaser who bought it of the bankrupt after the assignee had disclaimed any interest in it.
might reopen the case, and vacate the discharge for that purpose. Clark v. Clark, 17 How. 315. But it does not lie in the mouth of an alleged infringer to set up the right of the assignee as against a title from the bankrupt acquired with the consent of such assignee. It is quite evident from the facts stated that this patent, which seems to have been the cause of Poinier's insolvency, was thought to be of little or no value, that the assignee so regarded it, and that its real value was only discovered when the plaintiff had brought to bear upon the manufacture of the device his own skill and enterprise.
"make disclaimer of such parts of the thing patented as he shall not choose to claim or hold by virtue of the patent or assignment, stating therein the extent of his interest in such patent."
"usually and properly employed for the surrender of a separate claim in a patent, or some other distinct and separable matter, which can be exscinded without mutilating or changing what is left standing."
"no such disclaimer shall affect any action pending at the time of its being filed, except so far as may relate to the question of unreasonable neglect or delay in filing it."
v. Meyers, 94 U. S. 187, 94 U. S. 193. Under section 4922, the effect of delaying a disclaimer until after the commencement of the suit goes only to the recovery of costs. We adhere to that construction. Congress, having in the Revised Statutes adopted the language used in the act of 1837, must be considered to have adopted also the construction given by this Court to this sentence, and made it a part of the enactment.
3. The essential feature of the Taylor patent consists of a plate attached to the body of the trunk, which contains a socket and hinged catch, and a double acting spring whose function is to hold the catch either open or shut, and a tang fastened to the lid, which, as the lid is closed, drops into the socket hole in the catch, which, when closed, holds the lid firmly in place. It also acts as a dowel to keep the cover from racking.
Of the alleged anticipating devices the patent to Gaylord of 1861 is a trunk lock, not, as in this case, a fastener, designed to supplement the lock, and differing from the old-fashioned and well known trunk lock principally in discarding the hinged hasp, and using a rigid tang attached to the cover, which sinks into the socket in the body of the trunk, prepared to receive it, and is there self-locked, but is unlocked only with an ordinary key. It was not designed at all to supersede the buckle and strap, but was only a substitute for, and an improvement upon, the ordinary lock. In short, it is a modification of the spring lock previously used upon trunks.
The Roulstone patent of 1866 is for an improvement in traveling bags, and shows a spring-locking device for securing the two parts of the bag firmly together. It has no features in common with the trunk fastener of Taylor, and is not adapted to hold the lid of a trunk firmly to the body. It has no means for holding the catch out of engagement when desired, and is wholly unlike the modern trunk fastener.
fasten and hold together the box and the cover of the trunk, but the means provided for accomplishing this are so different from those employed by Taylor that they can hardly be compared. Besides, the device is evidently of no utility.
The patent to Cutter of 1868 was also for an improvement in trunk locks, especially adapted for security against an unauthorized opening of the trunk, and operated only by an independent and detachable key. It appears to be self-locking, and does not differ materially from the ordinary spring lock. It is not a trunk fastener, as distinguished from a lock, and is not designed to be used as a substitute for the strap and buckle.
The patent to Locke of 1871 consists of straps made of hoop iron, steel, or brass, or other metals which yield readily, their upper ends resting loosely in caps or escutcheons, so as to have a slight degree of lateral play, the lower ends being formed dovetailed, and adapted to engage with catches attached to the body of the trunk. The lower ends of the straps ride over the lugs of the catches until the cover is fully closed, when the inclines of the straps and the lugs coincide, and the straps then drop into place and remain locked. This device is undoubtedly a fastener, as distinguished from a lock; but it lacks the rigid tang, the hinged catch, the spring -- in short, all the essential features of the Taylor invention.
The Hillebrand patent is also for a trunk lock, and, like the others, is operated by an independent key, and also lacks the features of the Taylor patent.
The Ransom patent is for a trunk fastener consisting of two parts, one of which is attached to the body of the trunk and the other to the lid. It does not, however, contain the socket open at the top, and designed to receive a rigid tang, nor does it contain the other mechanism of the Taylor patent. While intended to accomplish the same purpose, the means used are so different that it is far from being an anticipation.
styles of trunk fasteners now in use, it contains the underlying principle of all of them. In short, we find no difficulty in holding that there is patentable novelty in the Taylor fastener, and that it is not anticipated by any of the devices put in evidence. If there were any doubt of this, in view of the fact that Taylor seems to have been the first to invent a practical trunk fastener to take the place of the old-fashioned strap and buckle, and that, improved upon, as it undoubtedly has been, it has completely taken the place of the earlier devices, we should be inclined to resolve this doubt in favor of the patentee.
operation, and design, though the trunk fasteners now in ordinary use resemble the Taylor more than the Romadka patent. In view of the fact that Taylor was a pioneer in the art of making a practical metallic trunk fastener, and invented a principle which has gone into almost universal use in this country, we think he is entitled to a liberal construction of his claim, and that the Romadka device, containing, as it does, all the elements of his combination, should be held an infringement, though there are superficial dissimilarities in their construction.
5. It only remains to consider the question of damages. Before the invention of these fasteners, straps and buckles were universally used to hold the lid of the trunk fast to the body, in aid of the lock, and dowels appear to have been in common use to prevent a lateral movement of the lid. Trunks with straps to support the lock were considered imperfect and unserviceable, and the dowels had become a recognized necessity except where strength and durability were of no consequence. In this connection, the master allowed the difference between the cost of trunk fasteners and the straps, buckles, and dowels previously in use for the same purpose, and the court overruled the measure of damages thus adopted, and entered a decree for nominal damages only.
patent. Thus, in Mowry v. Whitney, 14 Wall. 620, 81 U. S. 649, it was said by Mr. Justice Strong that "it is the additional advantage the defendant derived from the process -- advantage beyond what he had without it -- for which he must account." In that case, the master reported the difference between the cost of certain car wheels and the price for which they were sold as the profits realized by the defendant, thus charging him the profit obtained from the entire wheel, instead of that resulting from the use of the patentee's invention in a part of the manufacture. It was held not to be a legitimate construction of the findings that the benefit which the defendant derived from the use of the complainant's invention was equal to the aggregate of profits he obtained from the manufacture and sale of the wheels as entireties, after they had been completed, but that the question to be determined was what advantage did the defendant derive from using the complainant's invention over what he had in using other processes then open to the public, and adequate to enable him to obtain an equally beneficial result? The same principle was applied in the case of the Cawood Patent, 94 U. S. 695, 94 U. S. 710, in which the defendant made use of an infringing swage block for the purpose of reforming the ends of railroad rails which had become exfoliated by wear, and it was held that the gain in mending these rails by the use of the plaintiff's device, compared with the cost of mending on the common anvil, and the saving in fuel and labor, were the proper measure of damages.
"They had the choice of repairing them on the common anvil or on the complainant's machine. By selecting the latter, they saved a large part of what they must have expended in the use of the former. To that extent, they had a positive advantage growing out of their invasion of complainant's patent."
process of manufacturing fat acids and glycerine from fatty bodies by the action of water at a high temperature and pressure. In his report of damages, the master found that the complainant derived no profit from the invention otherwise than by granting licenses to others to use the same, but that the defendant had derived large profits and savings by the use of the plaintiff's patented process, which plaintiff sought to recover in the suit. It was held by this Court that when a bill in equity is filed by the owner against the infringers of a patent, the plaintiff is entitled to recover the amount of gains and profits the defendant has made by the use of his invention, not those he might reasonably have made, but those which he did make; or, in other words, the fruits of the advantage which he derived from the use of that invention, over what he would have had in using other means then open to the public and adequate to enable him to obtain an equally beneficial result.
"expressly gives to the plaintiff, on a recovery in a suit in equity for an infringement, 'the profits' to be accounted for by the defendant. . . . The defendant made its election when it infringed and subjected itself to a suit in equity, and the plaintiff is entitled to the result of the choice he made of suing in equity and not at law. The plaintiff made his inventions for the purpose of enabling anyone using them to successfully burn kerosene oil in lamps for locomotive headlights, and to obtain the full advantage of its great light-producing capacity. The defendant used them for that purpose and with that result, and must pay the profits or savings made thereby. "
We see no reason why this measure of damages should not be applied to this case. The only argument to the contrary is that the instances in which this Court has applied this rule are confined to those wherein the defendant has made use of the complainant's invention in the operation and conduct of his business, and that it ought not to be extended to cases in which the defendant manufactures and sells the devices. Without questioning at this time the soundness of this contention, we think this case falls within the former, rather than within the latter category. The defendants do not manufacture and sell trunk fasteners as such, but they do make and use them in the business of manufacturing trunks, and the difference between such use of them and the use of the old-fashioned strap and buckle represents their profits. If the defendants manufactured and sold trunk fasteners to be attached to trunks by their vendees, it might be justly claimed that they did not use them; but if they manufacture them solely to be attached to trunks made and sold by themselves, it is nonetheless a use of them than if they had used the trunk to which they were attached for their own purposes. If, to put an analogous case, a person made a business of manufacturing and selling steam engines to which he attached a patented lubricator, it could hardly be claimed that he was a manufacturer and seller of lubricators; but he would clearly be liable as a user of them.
between a patentee and an infringer of the patent, the question is not what profits the latter has made in his business or from his manner of conducting it, but what advantage has he derived from his use of the patented invention?"
See also Tilghman v. Proctor, 125 U. S. 136.
The master apparently computed the profits received by the defendants from the infringement upon the basis of the interlocutory decree referring the case to him to ascertain and report the number of fasteners made and used by the defendants, and the gains, profits, and advantages they received from the infringement, etc., and as, in the view we have taken of this case, there was nothing inequitable in this measure of damages, we see no reason for disturbing the report of the master in that particular.
"is patented, either by affixing thereon the word 'Patented,' together with the day and year the patent was granted, or when, from the character of the article, this cannot be done, by fixing to it, or to the package wherein one or more of them is enclosed, a label containing the like notice, and in any suit for infringement, by the party failing so to mark, no damages shall be recovered by the plaintiff except on proof that the defendant was duly notified of the infringement, and continued, after such notice, to make, use, or vend the article so patented."
"that great numbers of trunk catches containing and embodying the said invention . . . have been manufactured by your orator and the previous owners of said letters patent, which said catches were marked with the word 'patent,' and with the year and day of the month of the date of said letters patent; that the public generally have acknowledged the validity of said letters patent, and have generally acquiesced in the right aforesaid of your orator."
smaller sizes, on account of the difficulty of marking them in such way that the mark would be legible when the catches were japanned or tinned. It is not altogether clear that the stamp could not have been made upon the smaller sizes; but, in a doubtful case, something must be left to the judgment of the patentee, who appears in this case to have complied with the alternative provision of the act in affixing a label to the packages in which the fasteners were shipped and sold. He testified in this connection that, with the two small sizes, it was impracticable to cast the stamp upon the castings, but that he always marked the packages "Patented." The fact that this device was patented could hardly have escaped the notice of Romadka, since the earliest fasteners made under the patent, which were manufactured and sold by Poinier, were duly stamped, and Romadka had dealt with him, bought bags of him, and said to Sessions that he could have bought the patent for a low price. Although there is an averment in the answer that the defendants have no knowledge or information save from said bill of complaint whether the catches were marked with the word "Patented," etc., and therefore deny the same, there is no denial of their knowledge that the Taylor device was patented, and in view of the fact that all letters patent are recorded, with their specifications, in the Patent Office, a record which is notice to all the world, it is not an unreasonable requirement that the defendant, who relies upon a want of knowledge upon his part of the actual existence of the patent, should aver the same in his answer, that the plaintiff may be duly advised of the defense. Rubber Co. v. Goodyear, 9 Wall. 788, 76 U. S. 801; Allen v. Deacon, 21 F. 122.
he abandoned them subject to the limitation of two years within which he was himself obliged to bring suit, and that Poinier himself, and the plaintiff, his assignee, took them subject to that limitation. In this connection, the defendant relies upon the case of Kenyon v. Wrisley, 147 Mass. 476. In this case, the assignee abandoned to the bankrupt the right to sue upon a promissory note which he considered worthless, and the plaintiff brought suit upon the same nine years after the adjudication and assignment. It was held that the plaintiff had no right to recover, but the decision was placed upon the express ground that the assignee did not elect to abandon the claim, and did not consent to a suit upon it by the plaintiff until after his right of action was barred by the statute, and it was held that, as the right of suit upon the note was barred while in the hands of the assignee, it was not revived by the election of the assignee to abandon it to the plaintiff. In Gifford v. Helms, 98 U. S. 248, and in Wisner v. Brown, 122 U. S. 214, it was held by this Court that purchasers of property from an assignee in bankruptcy could not maintain a suit in equity against third persons claiming adverse interests in such property if at the time of the purchase from the assignee, his right of action was, under the Bankruptcy Act, barred by the lapse of time.
In Greene v. Taylor, 132 U. S. 415, 132 U. S. 443, the Court went a step further and held that if at the time of the purchase from the assignee, the statute had begun to run against the claim or right in the hands of such assignee, the purchaser took the right subject to the statutory limitation, and to the consequence that when sufficient additional time should have run against it in the hands of the purchaser to make up the entire two years the claim or right would be wholly barred.
"No initiation of a new period of limitation under any statute begins to run in favor of the purchaser at the time of his purchase, whether the two years wholly elapsed or only a part thereof elapsed, while the claim was owned by the assignee."
relates back to the commencement of the proceedings in bankruptcy, and the title stands as if no assignment had been made. Such abandonment is not so much a transfer of an existing interest in the assignee as an election on his part to treat the assignment as having never included that claim. We do not find it necessary to express an opinion whether the same rule would apply if, as held in Kenyon v. Wrisley, the statutory limitation were a bar to an action by the assignee when the abandonment was made.
In the case under consideration, Poinier was adjudicated a bankrupt September 12, 1876, the assignee was appointed October 17, 1876, and the abandonment took place, according to the testimony of Mr. Shepard, early in June, 1878, less than two years from the time the cause of action accrued to the assignee. As Poinier recovered the right to sue infringers by abandonment from the assignee before that right had become barred by the statute in his hands, we think he should be considered as receiving it unaffected by the statute, and that he and the plaintiff, his assignee, were entitled to bring this suit as if the assignment had not been made.
Reversed, and the case remanded with directions for further proceedings in conformity with the opinion of this Court, with authority, however, to the circuit court, if in its opinion law and justice shall so require, to modify the total amount of damages as found by the master.

References: § 4917
 V. 
 § 4900
 v. 
 v. 
 v. 
 v. 

v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v.