Court Opinion

ID: 8633805
Source: CourtListenerOpinion
Date Created: 2022-11-24 19:41:52.370254+00
Date Added: 2024-06-11T16:55:51.763808
License: Public Domain

GRIER, Circuit Justice.
An examination of the facts and the principles of Seymour v. McCormick, 16 How. [57 U. S.] 480, relied on by both sides here, and a comparison of its facts with those presented by this case, will be necessary to a correct decision of the present controversy. The patent of the reaping machine of McCormick had expired, but McCormick had obtained a patent for a small addition or improvement to this machine (a raker’s seat). The machine with the raker’s seat did not, as a whole, constitute a new machine or manufactured article, giving an entire monopoly in the market to the patentee and his licensees. The patentee had not the exclusive right of making or selling the peculiar reaping machine as one invention. He’ could not supply the market with the machines with or without the addition of the raker’s seat. On the contrary, his price for a license to make and use this improvement on the machine was ten dollars. The wrong done McCormick was the non-payment of the license fee, which respondent had previously paid. The cornet below had instructed the jury that the measure of damages for infringing the patent for this addition or improvement, to a well known machine, should be the profit made on the whole machine. This was decided to be error. The court say that there can not, in the nature of things, be any one rule of damages which will apply to all cases, and the mode of ascertaining the damages must depend upon the peculiar nature of the monopoly granted.
If the inventor’s profit consists neither in the exclusive use of the thing invented, nor in the monopoly of making it for others to use, but in having a general use of it by all who are willing to pay him the price of his license, then the non-payment of the license fee by the infringer is the only wrong done to the patentee. The only eases in which the measure of the patentee’s damages is the amount of the infringer’s profit, are, when the invention is of some new machine, or a new form of any kind of known machine, which, as a distinct species of machine or manufacture, is more valuable, or can be put into market cheaper, so as to supersede or exclude other machines or manufactures of the same genus; and where the profit of the patentee consists in a complete monopoly of the right to make and vend the new machine or manufacture as a unit, and in the exclusion of all competition. In such a case, the only measure of damage in a court of equity is the amount of profits made by the infringer, and it is in such cases that the injured party should seek his remedy in a court of chancery, where he can have a decree for an account, and an injunction to protect his monopoly. But it is plain that a patentee, whose invention is only valuable because used by all who pay a license fee, and who suffers no other wrong than the detention of such *674fee, has fixed his own measure of compensation, and needs none of the remedies which it is the duty of the chancellor to give for his protection. An injunction would do him no good; an account is not wanted; and the only remedy to which he is entitled being a judgment for a given sum of money, with interest, a court of law is his proper resort, where also he may recover a penalty to the extent of treble damages, if the judge sees fit to inflict it.
An injunction is never granted vindictively, but only when it is necessary to protect the rights of the complainant. An account can not be required unless where a knowledge of the profits made by the infringer is necessary to a.just determination of the controversy.
Although the statute gives original cognizance of patent controversies equally to courts of equity as to courts of law, and consequently, the chancellor may decide a controversy as to infringement without requiring a previous verdict in a court of law, yet it does not follow, that all distinction, as to remedies granted by each tribunal, is to be abolished; a court of law can not issue an injunction, nor a court of equity take jurisdiction to enforce a penalty, or merely punitive damages. Each court will give the remedy peculiar to its own functions. The remedies of a court of chancery are by injunction and account: penalties and vindictive damages can be recovered only in courts of law. The case of Dean v. Mason, 20 How. [61 U. S.] 203, was one where the monopoly of use of a patented machine (a planing machine), in a particular county, had been infringed. It is said in such a case, that “the rule of damages is the amount of profits received by the unlawful use of the machines, as this, in general, is the damage done to the owner of the patent.” The court afterward say: “Generally this is sufficient to protect the rights of the owner. But where the wrong has been done under aggravated circumstances, the court has" the power, under the statute, to punish it adequately by an increase of the damages.” This is no doubt correct as a general proposition. But the question whether a chancellor would interfere to punish parties by assuming the functions of a common law court, and whether the remedies given in a court of chan-eery should not be such as are peculiar to that jurisdiction, was not before the court.
These remarks as to inflicting penal damages, though a little out of regular order, have been made in answer to an argument of the learned counsel in this case, in which he questions the correctness of our remarks on this subject in the case of Sanders v. Logan [Case No. 12,295].
The great question of the case now recurs: Is this Janus-faced lock a peculiar and distinct machine, introduced into market as a cheaper and better article, than other machines without the peculiar characteristic of the patented one? Does the value of the patent to its owners consist in the close monopoly of the right to make and sell this species of lock as one individual machine: Has it peculiar characteristics which distinguish it from other machines of the same genus, and which give it a peculiar value in market? If so, the complainants have a right to demand that the defendants, who have infringed their exclusive right to make and sell this peculiar machine or manufacture, are justly liable to refund all the net profits made by such infringement. If, on the contrary, the patent is for some addition or improvement on an old and well-known implement, or some separate part or device thereof of small importance compared with the whole — if the license to use the improvement or addition was sold as separate and distinct from the whole machine, the measure of damage would be the price of a license, and not the profit made by the exclusive right to make and sell the whole machine.
The history of this invention, Its object and results are fully stated in the case of Livingston v. Jones [Id. 8,413], between these same parties, when the originality of Sherwood’s invention was assailed.
The claim of the Sherwood patent was for “making the ease of door locks and latches double faced, or so finished that either side may be used for the outside.” The arrangements of the internal parts of the lock and devices necessary to such a lock, are set forth in the specification. They were rather complex, and required, in order to change the lock from a .right hand to a left hand lock, that it should be opened and some change made in the position and arrangements of the internal parts. For the purpose of the present discussion it is unnecessary to describe these devices. The name “Janus-faced” locks was given to this machine, to distinguish it from others which had not its peculiar qualities. Now, it is evident, that although the patent of Sherwood may be said to be for an improvement in the manufacture of locks, a well-known implement or machine, nevertheless, the lock contrived by him was a new and. different species, having certain qualities differing from all other locks; that the Janus-faced lock is a specific article (although of the genus lock), known in the market, having peculiar value; and that the value of the monopoly granted by the patent consisted in the exclusive right to manufacture this peculiar machine without any competition, and have all the profits of such monopoly. The respondents have made large gains by trespassing on the rights of the complainants. The profits they made by this trespass justly belong to the true owner. They have partaken equally with the complainants in the profits of the monopoly granted to them alone, without license and in defiance of their rights. The only measure of the redress to which the *675complainants are entitled is an account of the actual profits made by respondents. It has been argued that this is not full measure of compensation for the injury done to complainants, but it is all that can be made matter of account in equity; all that is specifically claimed in the bill, and all that comes properly within the sphere of the remedies administered by a chancellor.
[NOTE. For other cases involving this patent, see note to Living0^" - Tones, Case No. 8,413.
[NOTE. From this decree an appeal was taken by the defendant to the supreme court, which reversed the decree of the circuit court, rendering a decree for the eomulainant for the nominal sum of $1.00. Mr. Justice Miller delivered the opinion of the court, in which he said: “Sherwood claims that he is the inventor of three distinct parts going to make up his lock, which thus made up answers a certain purpose, namely: a lock capable of being applied indifferently to a door opening from the right or left. Two of these claims have been long since superseded by other improvements, and abandoned by everybody, and have never been used by the defendants. The other claim which they have used is found to be invalid for want of novelty. What is left of the Sherwood patent ? It is clear that no part of the patent which is valid has been used by defendants. and they cannot be made infringers by an argument that mingles the valid and invalid parts of a patent, and calls it a unit; and then claims that defendants are .ufringers because they have used one part of this unit, although it was a part as to which the patent is void. It, therefore, appears that, in point of fact, the defendants have not infringed the Sherwood patent, and if we were unembarrassed by the pleadings, we should dismiss the bill with costs.” In the court below the defendants in their answer had admitted that they made locks as described in Sherwood’s patent. It is upon this admission alone that the decree is allowed to stand even for the nominal damage. 1 Wall. (68 D. S.) 155.]
The machine being a unit, a specific article well known in the market, having peculiar value because of the patentee’s discovery or invention, the attempt to arbitrarily divide the profits of the monopoly of the whole machine among its parts is without precedent, and receives no countenance from the case of Seymour v. McCormick [supra].
Decree for $13,282.93.
As to the case of Adams v. Jones [Case No. 57], the court said: “The complainants are sole owners of the right to make this improved machine, either with or without the improvement invented by Adams. As equitable owners of their partner’s invention, and their claim being for the infringement of their exclusive right to make the machine with or without it, their damages can neither be apportioned nor increased, in consequence of the mistake of a separate suit on the Adams patent. A decree for profits on the whole machine to the partners jointly, will preclude any claim by any one of them for a particular part.” The court, therefore, in decreeing $13,282.93 to Livingston & Co., in the first case, render a decree for one cent in the case of Adams v. Jones [supra].