FORMAN, District Judge.
Suit was brought by the plaintiff to enjoin the defendant from its patents No. 1,490,560 and 1,513,727 through the use of a lumber drying process and apparatus called a “Cyclspray,” allegedly invented by one Frederick W. Rubin, and manufactured and sold to the defendant by the Kiln Supply & Manufacturing Company. The plaintiff’s apparatus and process..was invented by Arthur E. Krick and is known as a Moistat. This was held to be infringed by the defendant in an opinion by Judge Bodine, then of this court, filed September 18, 1928, and affirmed in the opinion 34 F.(2d) 81 by Judge Buffington of the Third Circuit Court of Appeals filed July 24, 1929.
The cause was referred to Frederick Frelinghuysen, Esq., -as master, with instructions to take and state the amount of gains, profits and advantages derived, received, and made by the defendant by reason of the infringement, and to assess the damages sustained by the plaintiff. Testimony was taken before him and he filed his report on June 21, 1933. (The clerk’s file date appears as January 19, 1934.) The report is in two sections — a main report and a supplementary report. The main report indicates á finding upon the part of the master of $6,216.23 in favor of the plaintiff. In the supplementary report he found in favor of the plaintiff in the sum of $30,259.95 in the event of the use of an 'alternative method of calculation.
Defendant is engaged principally in the manufacture of automobile bodies and utilizes therein large quantities of seasoned lumber. Quoting from the master’s report “the seasoning is done by applying steam to green lumber in kilns to hasten the drying and at the same time to prevent warping. It had dried lumber by steam for a considerable time prior to the periods in question; several devices had been used with varying success and in October, 1926, in an effort to increase the efficiency of its kilns, it purchased a Cyclspray, which was installed in one of its twelve kilns. After operating for several months it was considered successful and in April, 1927, five more Cyclsprays were ordered. On June 1, 1927, plaintiff, through its attorneys, notified defendant that these Cyclsprays infringed its patents. Defendant, however, proceeded with their installation and on August 1, 1927, six of its twelve kilns were equipped with Cyclsprays and in operation. It continued to use them until October 23, 1928, when enjoined by £he interlocutory decree in this cause. There is, therefore, a period of twenty-four months during which the defendant operated Cyclsprays and for which the benefits realized by the defendant must be determined. For convenience, it has been divided into two periods, designated (by agreement of counsel) as Period I — November 1st, 1926 to July 31st, 1927, (the nine months during which one Cyclspray and eleven Non-Cyclsprays were operated), and Period II — August 1st, 1927 to October 31st, 1928, (the fifteen months during which six Cyclsprays and six NonCyclsprays were used).”
Plaintiff filed twenty-three exceptions to the report of the master mainly to the effect that the master did not accept its theory of accounting denominated by it the “Comparison by Inclusive Totals” (and by the master — the “Theory of Expectancy”). The plaintiff contends that under its theory it is entitled to damages in the sum of $69,427.36.
The defendant also excepted to the master’s report in that he had erred in [187]*187the application of its theory called the Theory of Comparative Efficiency and urges that a proper application of the same would have demonstrated that its Non-Cyclspray equipment was practically as efficient as the Cyclspray equipment, and hence no benefit or profit resulted to the defendant.
The defendant purchased and installed one of the infringing Cyclsprays on November 1, 1926. For nine months thereafter it continued to use this device in one of its kilns and then purchased five more of the same, and for the next fifteen months it operated six of its kilns equipped with Cyclsprays and six of them without such equipment. We will refer to the nine-month period as period I and the subsequent fifteen-month period as period II. During period I the defendant dried a total of 6,383,770 board feet of lumber, being 708,976 feet using one Cyclspray and 5,674,794 feet using eleven Non-Cyclspray units. During period II it dried 15,502,909 board feet, being 8,161,147 feet using six Cyclspray and 7,341,762 feet using six Non-Cyclspray units.
The cost of drying during period I was $24,868.00 and during period II it was $41,413.39.
It was necessary for defendant, from time to time during both periods, to contract to have its lumber dried outside of its own plant, and it is agreed that this was done at a cost of $10,815 per thousand board feet.
During period I the kilns were operated at 66 per cent, of capacity and in period IT they were operated at 83 per cent, of capacity.
The plaintiffs computation1 is contained in Exhibit P-11 A and is approach[188]*188ed by four methods, two arithmetical and two algebraical, but all of which arrive at a figure within a few cents of the sum of $60,427.36.
Plaintiff als'o submitted a computation by inclusive totals, with hours of steam supply (kiln hours) as the time element (Exhibit P-12), showing that under such [189]*189a theory it is entitled to the sum of $44,-604.94.2
The former method (note 1 supra) uses months as the time element, while the latter (note 2 supra) uses kiln hours as the time element. Plaintiff insists that the former is more accurate and fair.
The master rejected these methods of computation and made use of the defendant’s Theory of Comparative Efficiency, except as he modified it by his choice of factors, and in his main report, finds the gross benefit to the defendant to have been the sum of $10,451.38.3
[191]*191The master further finds that the excess operating costs of the Cyclsprays for both periods amounted to $4,235.154 and concludes that the net benefits to the defendant amounted to the sum of $6,216.23.
The master’s calculations of the amount to be deducted for the excess cost of operation of Cyclspray over the cost of Non-Cyclspray seem to be covered as shown in the master’s report (pp. 12, 13, note 4, supra), but the deduction should be made from the figure resulting from actual operations and not from a figure based on theoretic efficiency calculations.
I cannot agree with his use of these efficiency factors (report p. 10, see note 3), such as moisture removed, average thickness, etc., because the price of custom drying can be used as a standard cost per foot regardless of the moisture removed, average thickness, etc., factors, This price ($10,815 per M) included all such factors.
On page 11 of his report the master begins to deviate from facts and anticipates conclusions from certain assumptions. It is purely a coincidence that his figures so nearly approach the calculations of actual operations.
I agree with his finding that lumber drying is but one factor in the profit and loss of the entire business, and that the presentation of the profit and loss statement of the business would throw no light on the benefits or losses resulting from Cyclspray uses.
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FORMAN, District Judge.
Suit was brought by the plaintiff to enjoin the defendant from its patents No. 1,490,560 and 1,513,727 through the use of a lumber drying process and apparatus called a “Cyclspray,” allegedly invented by one Frederick W. Rubin, and manufactured and sold to the defendant by the Kiln Supply & Manufacturing Company. The plaintiff’s apparatus and process..was invented by Arthur E. Krick and is known as a Moistat. This was held to be infringed by the defendant in an opinion by Judge Bodine, then of this court, filed September 18, 1928, and affirmed in the opinion 34 F.(2d) 81 by Judge Buffington of the Third Circuit Court of Appeals filed July 24, 1929.
The cause was referred to Frederick Frelinghuysen, Esq., -as master, with instructions to take and state the amount of gains, profits and advantages derived, received, and made by the defendant by reason of the infringement, and to assess the damages sustained by the plaintiff. Testimony was taken before him and he filed his report on June 21, 1933. (The clerk’s file date appears as January 19, 1934.) The report is in two sections — a main report and a supplementary report. The main report indicates á finding upon the part of the master of $6,216.23 in favor of the plaintiff. In the supplementary report he found in favor of the plaintiff in the sum of $30,259.95 in the event of the use of an 'alternative method of calculation.
Defendant is engaged principally in the manufacture of automobile bodies and utilizes therein large quantities of seasoned lumber. Quoting from the master’s report “the seasoning is done by applying steam to green lumber in kilns to hasten the drying and at the same time to prevent warping. It had dried lumber by steam for a considerable time prior to the periods in question; several devices had been used with varying success and in October, 1926, in an effort to increase the efficiency of its kilns, it purchased a Cyclspray, which was installed in one of its twelve kilns. After operating for several months it was considered successful and in April, 1927, five more Cyclsprays were ordered. On June 1, 1927, plaintiff, through its attorneys, notified defendant that these Cyclsprays infringed its patents. Defendant, however, proceeded with their installation and on August 1, 1927, six of its twelve kilns were equipped with Cyclsprays and in operation. It continued to use them until October 23, 1928, when enjoined by £he interlocutory decree in this cause. There is, therefore, a period of twenty-four months during which the defendant operated Cyclsprays and for which the benefits realized by the defendant must be determined. For convenience, it has been divided into two periods, designated (by agreement of counsel) as Period I — November 1st, 1926 to July 31st, 1927, (the nine months during which one Cyclspray and eleven Non-Cyclsprays were operated), and Period II — August 1st, 1927 to October 31st, 1928, (the fifteen months during which six Cyclsprays and six NonCyclsprays were used).”
Plaintiff filed twenty-three exceptions to the report of the master mainly to the effect that the master did not accept its theory of accounting denominated by it the “Comparison by Inclusive Totals” (and by the master — the “Theory of Expectancy”). The plaintiff contends that under its theory it is entitled to damages in the sum of $69,427.36.
The defendant also excepted to the master’s report in that he had erred in [187]*187the application of its theory called the Theory of Comparative Efficiency and urges that a proper application of the same would have demonstrated that its Non-Cyclspray equipment was practically as efficient as the Cyclspray equipment, and hence no benefit or profit resulted to the defendant.
The defendant purchased and installed one of the infringing Cyclsprays on November 1, 1926. For nine months thereafter it continued to use this device in one of its kilns and then purchased five more of the same, and for the next fifteen months it operated six of its kilns equipped with Cyclsprays and six of them without such equipment. We will refer to the nine-month period as period I and the subsequent fifteen-month period as period II. During period I the defendant dried a total of 6,383,770 board feet of lumber, being 708,976 feet using one Cyclspray and 5,674,794 feet using eleven Non-Cyclspray units. During period II it dried 15,502,909 board feet, being 8,161,147 feet using six Cyclspray and 7,341,762 feet using six Non-Cyclspray units.
The cost of drying during period I was $24,868.00 and during period II it was $41,413.39.
It was necessary for defendant, from time to time during both periods, to contract to have its lumber dried outside of its own plant, and it is agreed that this was done at a cost of $10,815 per thousand board feet.
During period I the kilns were operated at 66 per cent, of capacity and in period IT they were operated at 83 per cent, of capacity.
The plaintiffs computation1 is contained in Exhibit P-11 A and is approach[188]*188ed by four methods, two arithmetical and two algebraical, but all of which arrive at a figure within a few cents of the sum of $60,427.36.
Plaintiff als'o submitted a computation by inclusive totals, with hours of steam supply (kiln hours) as the time element (Exhibit P-12), showing that under such [189]*189a theory it is entitled to the sum of $44,-604.94.2
The former method (note 1 supra) uses months as the time element, while the latter (note 2 supra) uses kiln hours as the time element. Plaintiff insists that the former is more accurate and fair.
The master rejected these methods of computation and made use of the defendant’s Theory of Comparative Efficiency, except as he modified it by his choice of factors, and in his main report, finds the gross benefit to the defendant to have been the sum of $10,451.38.3
[191]*191The master further finds that the excess operating costs of the Cyclsprays for both periods amounted to $4,235.154 and concludes that the net benefits to the defendant amounted to the sum of $6,216.23.
The master’s calculations of the amount to be deducted for the excess cost of operation of Cyclspray over the cost of Non-Cyclspray seem to be covered as shown in the master’s report (pp. 12, 13, note 4, supra), but the deduction should be made from the figure resulting from actual operations and not from a figure based on theoretic efficiency calculations.
I cannot agree with his use of these efficiency factors (report p. 10, see note 3), such as moisture removed, average thickness, etc., because the price of custom drying can be used as a standard cost per foot regardless of the moisture removed, average thickness, etc., factors, This price ($10,815 per M) included all such factors.
On page 11 of his report the master begins to deviate from facts and anticipates conclusions from certain assumptions. It is purely a coincidence that his figures so nearly approach the calculations of actual operations.
I agree with his finding that lumber drying is but one factor in the profit and loss of the entire business, and that the presentation of the profit and loss statement of the business would throw no light on the benefits or losses resulting from Cyclspray uses. I likewise agree with the master that there can be no calculation of the financial benefit due to the improved quality of the lumber because no real evidence supports any such calculation.
The question before the court resolves itself wholly into an inquiry as to the benefits derived by the defendant through the use of the device which this court has held to be an infringement.
[192]*192The following table shows figures culled from the record and master’s report which are relevant to the problem.
Period I (Nine months)
Dried ea. per mo. (bd. ft.) Dried ea. per 9 mo. (bd. ft.) Total dried by all in 9 mo. (bd. ft.) Operating cost ea. in 9 mo. % of capacity
1 Cyclspray 78,775 708,976 708,976 $2,403.84 66%
11 Non-Cyelsprays 57,321 515,890 5,674,794 1,622.75 66%
Total bd. ft. dried by all in Period I 6,383,770
Period II (Fifteen months)
Ea. Per Ea. 15 month months Total 15 Ea. 15 % of months months capacity
6 Cyclsprays 90,735 544,409 8,161,147 $3,017.47 83%
6 Non-Cyclsprays 81,575 489,451 7,341,762 2,441.793 83%
Total bd. ft. dried by all in Period II 15,502,909
Thus, the problem may be stated' as follows:
A manufacturer operated his drying kiln for two periods. During the first period he used one Cyclspray which dried 708,976 board feet and eleven Non-Cyclsprays which dried 5,674,794 board feet (an average of 515,890 board feet each). During this period the cost of operating one Cyclspray was $2,403.84 and the cost of operating one Non-Cyclspray was $1,-622.75. The kilns were operated 66 per cent, of capacity during this period.
During the second period (fifteen months) he used six Cyclsprays which dried 8,161,147 board feet and six NonCyclsprays which dried 7,341,762 board feet. During this period the cost of operating six Cyclsprays was $18,104.82 and the cost of operating six Non-Cyclsprays was $14,650.76. The kilns were operated 83 per cent, of capacity during this period.
It was the manufacturer’s usual practice to pay $10,815 per thousand board feet for custom drying of lumber he required in excess of his own drying capacity.
How much net benefit does he obtain by the use of Cyclsprays compared with using Non-Cyclsprays?
The answer is $6,714.72
Or
During Period I (Nine months)
Board ' Board
feet feet
One infringing machine dried....................................708,976
One non-infringing machine dried (1/11 of 5,674,794)..............515,890
Excess production from one infringing machine.................... 193,086
During Period II (Fifteen months)
Six infringing machines dried..................................8,161,147
Six non-infringing machines dried..............................7,341,762
Excess production from using six infringing machines............ 819,385
Total excess board footage obtained from use of infringing machines 1,012,471
Gross benefit valued at $10,815 per thousand bd. ft............... $10,949.87
Less extra cost of production (note 4).......................... 4,235.15
Net benefit $ 6,714.72
[193]*193All of the calculations based on so-called “efficiency factors,” “doctrines of comparison by inclusive totals,” and “theories of expectancy” are fallacious. Computations involving factors of efficiency relative to the physical properties of the lumber dried have no place in this case because it is an agreed fact that custom drying was available and utilized for drying lumber at the rate of $10,815 per thousand feet regardless of the thickness, moisture content, texture, kiln load, steam cost, depreciation, or any other factors. Further, the two periods under discussion have been shown to have been characterized by wide differences of production, hours of operation, boiler capacity, and steam consumption. These differences have been shown to be due not only to the use of Cyclsprays, but to other factors as well. It is therefore incorrect to calculate benefits by comparing the second period with the first one. The correct “doctrine of comparison” is to compare the two sets of kilns during the same infringing period and under the same operating conditions as to actual production and costs. Any theory is fallacious which is based on assumptions that the production during the second period would be the same as during the first period, and that the increased production in the second period was entirely due to the increased use of Cyclspray, and that all other conditions were the same. They clearly were not. The fact that operating costs per month were nearly identical during the two periods is simply a coincidence.
These fallacies creep into plaintiff’s calculations when it compares expected footage in the second period with actual footage of the first period, thus obtaining apparent excess footage to an amount which, multiplied by the cost of “outside drying” of $10,815, results in the claimed benefits of $69,427.36.
The following computation demonstrates the fallacy:
Non-Cyclspray.
Eleven Non-Cyclsprays did produce in 9 months......5,674,794 bd. ft.
or an overage for one Non-Cyclspray in 9 months...... 515.890 ” ”
or six Non-Cyelsprays did produce in 9 months........3,095,340 ” ”
At the same rate of production for 15 months expected production would be
15/9 x 3,095,340 = 5,158,900
actual production was..................7,341,762
or an excess (?) production of..........2,182,862 for 6 Non-Cyclsprays for the second
period or an average for one Non-Oydspray of excess production of......363,810 bd. ft.
Cyclspray.
Applying the same formula to production of Cyclspray, each one exceeded expected production by 178,577 board feet. This would seem to show that each NonCyclspray produced more efficiently than the Cyclsprays during the second period to the extent of 185,233 board feet or for six machines 1,111.398 board feet, which at $10,815 per thousand board feet would total $12,019.77 of “Inefficiency,” to which would have to be added extra cost.
The court has carefully considered these theories and assumptions both individually and in relation to one another and has rejected all theories and assumptions in favor of the facts in evidence. There can be no question but that the defendant, spurred on by the additional cost of “custom drying,” used every available means to increase his lumber drying capacity. The figures here show the contribution toward these efforts by the infringing machine and the monetary value of those benefits.
These figures are just what it succeeded in doing, not what it could have done or what it would have been expected to do.
One of the most pertinent of the agreed facts is that custom drying was available and utilized for the drying of lumber at the rate of $10,815 per thousand board feet, regardless of thickness, moisture content, or any other physical characteristic. The mutual acceptance of this fact compels the rejection as immaterial of all the calculations submitted which involve these factors, such as moisture and thickness, and greatly simplifies the procedure in reaching a conclusion.
Defendant did dry more lumber in infringing kilns than in noninfringing kilns, and as it was using every effort toward maximum capacity, the measure of its ben[194]*194efits is the excess board footage that was dried by infringing kilns, priced at the cost of custom drying, less the increased cost of production due to the use of the infringing appliances.
Plaintiff’s method cannot be sound, for it takes as a base the production of the first period working at 66 per cent, of available hours from which it builds up an expectancy production for the second period and concludes that all of the benefits of the excess production of the second period working at 83 per cent, of available hours is to be credited entirely to the use of five additional machines even though it does not admit the deduction of the greater operating cost of the infringing machine. Actually, the comparison between the infringing machines and non-infringing machines must be made within the same periods when production and conditions were similar.
No discussion of the master’s supplementary report is necessary under the conclusions reached in this memorandum.
Therefore, the exceptions of both plaintiff and defendant will be overruled. So much of the report of the master as is consistent with the facts and reasoning herein stated will be affirmed, and such as is inconsistent will be disapproved and a decree will accordingly be so entered, providing for damages to the plaintiff in the sum of $6,714.72, with costs to be paid by the defendant.
There has been an argument via mail concerning the date from which interest shall run. I do not see that the instant case presents a situation so glaring that I should depart from the usual rule that it should run from the date of the master’s report.
In view of the clerk’s file stamp on the same, viz., January 19, 1934, there may be some confusion as to the actual date. The last-mentioned date is obviously an error, as a lefter of correction by the master, attached to the report, and now filed therewith, is dated June 29, 1933, and refers therein to the fact that he filed the report on June 21. Further, the plaintiff’s and defendant’s exceptions were filed July 10, 1933. These could not have been filed prior to the submission of the report of the master. Interest will therefore run from June 21, 1933.