Court Opinion

ID: 8776719
Source: CourtListenerOpinion
Date Created: 2022-11-26 13:04:37.377645+00
Date Added: 2024-06-11T17:02:36.720974
License: Public Domain

ARCHBARD, District Judge
(specially assigned). The complainants, according to the master, are entitled to nothing on this accounting, either by way of profits or damages, and must be content, as the result of the litigation, with the establishment of their patent, and the deterrent effect on othérs, for the time being, so secured. That profits were made by the respondents is not disputed, and there is evidence of damages as well. But for one reason or another the master has put both of them aside, and the question is whether they should not have been allowed.
In all cases where infringement is. established, the infringing party is accountable' in equity for the profits which he has made out of it. Where the owner of the patent has granted exclusive licenses, this accountability may be a divided one, the infringer being liable to the owner for a part, and to the .licensees' for another part, according as the profits from- the infringement may have been taken from the one or the other. In the present instance, there are numerous exclusive licensees, and, according to -the master, in order to entitle the complainants to any of the profits made by the respondents, the licensees should have been joined in the bill. But this is based on a misconception. The licensees, under their agency contracts, were entitled to the profits made on the equipment of buildings/but, except as’ to Mr. Bredin, this is not what is being proceeded for now. They had nothing to do, however, with the profits of manufacture, which belong to the complainants, as owners of the patent, and for these the respondents must account to- the complainants, if they are accountable at all. The right to manufacture and sell for the equipment of windows elsewhere-than ■ ⅛ buildings, was express^ ly . reserved to the complainants, in- the-'license agreements, and, the *661respondents, in manufacturing, having infringed on this right, the profits which they derived from it belong to the complainants, whose was the right so infringed. There is nothing to the contrary in Bredin v. Solmson (C. C.) 145 Fed. 944, assuming that it controls. The right to manufacturers’ profits in that case was expressly disclaimed, the profits and damages outside of that being all that was sought, and the installation profits being all that were proved. These, of course, belonged 'to the licensee in whose territory they were obtained, and with whose trade they had interfered. And it was rightly held, in consequence, that the agent of the respondents, who was installing the infringing strips, was not liable to the complainants for the' profits on installation sales which he had made. But that does not touch the question here. The liability to the complainants for manufacturers’ profits was not involved, and, under the reserved right to manufacture and sell, that liability in the present instance is clear. The profits derived by the respondents, from the manufacture of the patented article, w'ere in direct breach of the complainants’ rights, as owners of the patent, and are regarded, in equity, as belonging to them, and are therefore properly.brought into this account. During the period covered by the accounting, the respondents admittedly manufactured and sold 908,258 feet of infringing weather strips, at a manufacturer’s profit, according to the master, of a cent a foot, making $9,082.58, to which extent, at least, they are liable to the complainants in this suit.
Profits on installation sales in Pittsburg are also claimed. This territory was let to Mr. James Bredin, one of the owners of the patent, and a complainant here. Being joined as a party, the condition deemed requisite by the master was apparently fulfilled. But the right to recover anything on his account was, nevertheless, denied, the master being of opinion that he ought to have been formally joined as licensee, and a claim on his behalf specifically made in the bill. But the bill proceeds primarily for the establishment of the patent, and the accounting follows as a consequence of its being sustained and infringement found. The decree, in conformity with this, is that the respondents account for the gains, profits, and advantages which have been so secured, which is broad enough to include those which belong to the complainants jointly, as well as those which are due to one of their number, by reason of the special relation which he has to the rest. A general prayer for an accounting is thus enough. The particular matters, as to which a recovery is sought, do not have to be set out, these being developed as the accounting proceeds. There may be reasons at times for bringing in a licensee, where anything is to be claimed on his behalf, so that the respondents may be advised of that fact. Brookfield v. Novelty Glass Manufacturing Company, 170 Fed. 960, 96 C. C. A. 127. But that does not apply here. The licensee is, himself, one of the complainants in the bill, and the rights peculiar to himself, which are sought to be enforced, are germane to the common end for which the bill was brought, of which the respondents have sufficient notice in the double relation which he sustains. Nor is it contended that they have been deprived, for want of it, of any *662defense which they might otherwise have made; and the suggestion that they could be called to account for these profits in another bill is altogether unsound. Moreover, if it were essential, an amendment to meet the situation could be made and would be allowed. In the Pittsburg- district, controlled by Mr. Bredin, 6,389 windows were equipped, and the profit per window was 19 cents, making $1,213.91, for which the respondents must therefore further account. The claim of 30 cents profit per window is refused.
Damages, in addition to profits, are also claimed, but, except as the one exceeds the other, it is not contended that the complainants are entitled to both. • The only damages, not covered by the profits for which the respondents have already been held accountable, are the additional sums, if any, which the complainants would have made if the respondents had not been in the field. As already stated, 908,258 feet of infringing weather strips were sold by the respondents, and of these, by their direct solicitation, '¡'1,643 feet were disposed of to the complainants’ agents, 56,132 feet being what was known as Columbia strip, an exact duplication of the one in suit. The agents, to whom these sales were made, were under contract to buy exclusively of the complainants, and what they were thus persuaded to buy of the respondents, in breach of their contracts, took just that much froril the sales which the complainants, beyond question, would otherwise have made. The complainants were therefore damaged by sales lost; and the profits which they would have made on them, at a cent and a half a foot, would amount to $1,074.51. But .they have already been allowed a cent a foot, manufacturers’ profits, on these sales, and are therefore only entitled to half a cent more, which makes the damages on this account $358.17. The infringement here, however, was of a flagrant character, and should not be passed by with this simple amount. Not content with the ordinary competition, the respondents sent around to complainants’ agents the Columbia strip, which was identical in form with that which the complainants supplied, offering it at two cents a foot, where the complainants’ agents were charged and had agreed'to buy for three, representing that it was manufactured under a British patent, which had expired. This attempt to discredit the patent and undermine the complainants’ rights, the agents being induced to break the contracts by which they were bound, so aggravated the infringement that treble damages should be allowed; and this item will therefore be increased to $1,074.51.
The right to damages, for the rest of the total' number of feet sold, depends on whether, if the respondents had not sold it, the complainants would;' as to which, ■ in Pittsburg, at least, there can be little doubt. The complainants, through Mr. Bredin, had a monopoly of the field in that vicinity, when Mr. Bricker, the president of the respondent company, who had been Mr. Bredin?s ageñt, started in to sell; and having the advántage of knowing the trade, it is fair to assume that •the sales he.made were taken out of those which the complainants, through Mr.- Bredin, would- otherwise have secured. These sales amounted to" 2-95¡065 féet, which, at half a cent' a foot, the profits which the complainants would have made above that already allowed, makes $1,475.32, for which the' respondents must .also account.
*663But it is reasonably probable that the rest of the respondents’ sales were also taken from those which the complainants, if not interfered with, would have made. The complainants were pioneers in the tongue and grove metal weather strip art, and were fully equipped at all times to supply the trade. It is true that there were other weather strips in vogue, but the complainants and respondents were the only two of this particular type, and were in direct competition throughout the entire field. The-Golden strip was quite different, and competition with it not at all the same. There are, of course, elements in the problem which make it impossible to say, with absolute certainty, that what the one party got the other would have secured if left alone. But, having regard to the peculiar character and close similarity of the two devices in suit, and the fact that they were competing side by side, as well as the direct attack made by the respondents on the complainants’ established trade, it is fair to assume that in all probability the complainants’ loss comprised the respondents’ gain, which is enough for our purpose here. Kinner v. Shepard (C. C.) 107 Red. 952. The complainants are therefore entitled to half a cent on the rest of the whole amount sold.
Summing up the case, the respondents must accordingly account for:
1. Manufacturers’ profits on £>08,258 feet at 1 cent a foot. $9,082.58
2. Profits on installations in tlie Pittsburg district, of which James Bredin was licensee, 6,389 windows at 19 cents each. 1,213.91
3. Damages in excess of profits on sales to complainants’ agents, 71,634 feet at half a cent a foot, $358.17, trebled on account of the aggravated character of the infringement. 1,074.51
4. Damages in excess of profits in the Pittsburg district on 295,065 feet at half a cent a foot, which the complainants would otherwise have sold. 1,475.32
5. Damages in excess of profits at the same rate on the rest of the weather strips sold by the respondents throughout the entire field . 2,707.79
Total . $15,554.11
Ret a decree be entered in favor of the complainants for this amount.