Brennan v. Dowagiac Mfg. Co.

162 F. 472, 1908 U.S. App. LEXIS 4469
CourtCourt of Appeals for the Sixth Circuit
DecidedJune 18, 1908
DocketNo. 1,737-43
StatusPublished
Cited by24 cases

This text of 162 F. 472 (Brennan v. Dowagiac Mfg. Co.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Sixth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Brennan v. Dowagiac Mfg. Co., 162 F. 472, 1908 U.S. App. LEXIS 4469 (6th Cir. 1908).

Opinion

SEVERENS, Circuit Judge.

This case comes here on an appeal and a cross-appeal from a decree rendered by the court below on an accounting for profits and damages sustained by the plaintiff, the appellant in the second of the above entitlings, resulting from the infringement of letters patent No. 446,230, granted to Hoyt February 10, 1891. The patent was sustained in respect to the claims relied upon by this court at the original hearing in 1903 (127 Fed. 143, 62 C. C. A. 257, reaffirming a like decision made in the case of Same Plaintiff v. McSherry Mfg. Co., 101 Fed. 716, 41 C. C. A. 627). We expressed the opinion that the patent embodied a highly meritorious invention, and, finding that the defendant had infringed it, decreed accordingly and remanded the cause for an accounting for the profits and damages accruing from the infringement, which appeared to have been going on for several years. The court below, on entering the decree directed by this court, ordered a reference to the master to take proofs and report in the matter of profits and damages. The proceedings before the master were very much protracted, and a large volume of evidence taken, much of which the court below thought was useless; all which, to counsel, seemingly had some bearing upon the subject was brought in. The result is that the master has reported, and the court has decreed, that the plaintiff is not entitled to recover anything beyond nominal damages. This seems an untoward ending of an apparently good cause. Congress has exercised much solicitude in securing to patentees the reward which it bestows for useful inventions. It has awarded a remedy for the profits made by an infringer, as well as the damages sustained by the patentee; and it has further provided that, in cases where the court thinks the facts warrant it, the actual damages may be increased to the extent of threefold. Rev. St. §§ 4919, 4921 (U. S. Comp. St. 1901, pp. 3394, 3395); Walker on Patents (4th Ed.) § 568.

The question wc have to consider is whether the result is such as the law and the circumstances require. The master made an elaborate report, especially in regard to the law which he conceived to be applicable. With regard to the facts he states that, in response to an order made by him for a report in respect of the matter of the accounting, the usual course of proceeding (2 Bates Fed. Eq. Pro. § 759), the defendant reported, and its chief officer testified:

“That during the infringing period, in addition to the manufacture of shoe grain drills, it was engaged in the manufacture of numerous other agricultural implements and farm machinery; that the cost of production of the infringing shoe grain drills was so interwoven and intermingled with the cost of manufacture of said other farm implements and machinery that it would be impossible to separate the one from the other; that it kept no separate cost account or expense record as to its shoe grain drill business, and it would be an impossibility for any one to ascertain from its books the profits, if any, derived from the sale of the shoe grain drills which employed complainant’s device.”

[474]*474He thereupon further reports as follows:

“No statement of profits or loss being produced by the defendant, the complainant placed its own expert, Mr. Hart, at work upon the defendant’s books, and he has produced, and filed as a part of his deposition, a statement showing that during the infringing period, viz., from August, 1894, to March, 1903, the defendant manufactured and sold 9,406 shoe grain drills, embodying complainant’s patent, for the gross sum of $304,094.20, and upon which it realized a net profit of $10,992.55. The methods employed by complainant’s expert in arriving at his results have been criticised by defendant’s counsel, aud they have endeavored to point out many fundamental errors in his work. The defendant, however, not only declined to undertake this task when urged so to do, but has absolutely failed to indicate any other method than that pursued by Mr. Hart which -would have arrived at a more nearly exact result; nor has it undertaken to have its books reviewed by its own expert, for the purpose of showing that the profits indicated are excessive. Absolutely mathematical exactness in work of this character is not to be expected. I am of the opinion that the method pursued by the expert was in the main correct, that his work was carefully and honestly performed, and that from the evidence presented we must accept his result, viz., $10,992.35, as the net profit accruing to defendant from the sale of infringing shoe grain drills during the period of the accounting.”

With respect to profits, he states the contentions made before him by the parties thus:

“The complainant claims that it is entitled to the entire profit thus derived, and bases its contention, as I understand it, on two grounds: (a) That the 1-Ioyt patent is not a patent for a portion of a grain drill only, but embraces the machine in its entirety, (b) That, if the patent should be construed as not sufficiently broad to cover the entire machine, then it is of such paramount importance that the entire market value of the grain drill is legally and properly attributable to the addition of complainant’s patented features. Both of these propositions are strongly controverted by the defendant, and they contend that the complainant, having failed to give evidence tending to apportion the profit derived from the whole grain drill and that derived from the use of the infringing device, is entitled to recover only nominal damages.”

He then proceeds to discuss the law touching the recovery of profits, and upon his conclusion of law in that regard, that the plaintiff was bound to distinguish the extent to which the Hoyt invention enhanced the profits made by the defendant in the manufacture and sale of the infringing drills, and his further statement that the plaintiff had failed to do this, he reported that there could be only a nominal recovery. The master seems to have appreciated the injustice of this result, for he says:

“That defendant derived some advantage from the use of complainant’s device is evidenced by its prolonged infringement. That complainant should not be compensated for the appropriation of its property does not accord with our ideas of justice.' To award the entire profits would be to disregard the law and the evidence as I find it; and, no satisfactory basis for an apportionment of the profits being indicated, the complainant is relegated to nominal damages, which I fix at the sum of $1.”

And, as some atonement, he finds at the conclusion of his report as follows:

“Being of the opinion that defendant has profited by the infringement, but that the means of ascertaining the quantum are not presented by the record, I find that all items properly taxable as costs should be paid by it.”

The fundamental proposition on which the report in respect to the profits rests is that the whole of Hoyt’s invention and patent resides [475]*475in the spring pressure device and does not extend to other parts ol the drill. From this he concludes that only this particular of the drill can be considered in estimating the profits, and that all the other parts might be lawfully made and sold by the defendant without any responsibility to the plaintiff. This is a specious argument; but it is not in accord with the established principles of law regarding patents on claims for combinations of several elements, and, when applied to this case, results in a radical error.

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Bluebook (online)
162 F. 472, 1908 U.S. App. LEXIS 4469, Counsel Stack Legal Research, https://law.counselstack.com/opinion/brennan-v-dowagiac-mfg-co-ca6-1908.