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$ 555. The pecuniary injury which a plaintiff incurs by reason of a defendant's infringement of his patent, is the generic measure of the damages which that plaintiff is entitled to recover on account of that infringement.' Such an injury is often called the plaintiff's loss,' and sometimes it is strictly that, but often it is a loss only in the sense that it is a failure to acquire a just and deserved gain. Whether the injury caused to a plaintiff by an infringement was a loss in one or the other of these senses, its magnitude must always be ascertained, in order to ascertain the amount of

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Goodyear 0. Bishop, 2 Fisher, 158. 1861 ; Graham v. Mfg. Co. 24 Fed. Rep. 643, 1881.

Blatch. 36, 1870; McComb o. Brodie, 1 Woods, 161, 1871 ; La Baw e. Ilawkins, 2 Bann. & Ard. 563, 1877.

? Suffolk Co. 0. Hayden, 3 Wal. lace, 315, 1865; Cowing o. Rumsey, 8

3 Hobbie o. Smith, 27 Fed. Rep. 662, 1886.

the damages which he is entitled to recover. The amount of the profits which the defendant derived from his infringement has no relevancy to the question of the plaintiff's damages; because these profits are sometimes much larger than the plaintiff's pecuniary injury;' and where they are smaller, that fact is no defence to the plaintiff's right to recover full damages for the pecuniary injury which the infringement caused him to incur.' But where a patentee has elected to recover the infringer's profits, instead of his own damages, in an action in equity, he cannot recover, for the same infringement, his damages in an action at law.'

To ascertain the extent of the pecuniary injury which a particular infringement caused a particular plaintiff, it is necessary to ascertain the difference between his pecuniary condition after that infringement, and what that condition would have been if that infringement had not occurred." That difference depends upon the way in which the plaintiff availed himself of the exclusive right infringed, at the time the infringement took place. If he so availed himself, by granting licenses to others to do the things which the defendant did without a license, then that difference consists in his not having received the royalty which such a license would have brought him.' If he so availed himself, by keeping his patent right a close monopoly and granting licenses to no one, then that difference consists of the money he would have realized from such a close monopoly if the defendant had not infringed, but which that infringement prevented him from receiving. Therefore, there are several methods of assessing damages for infringements of

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patents. One of those methods consists in using the plaintiff's established royalty as the measure of those damages; and another consists in ascertaining those damages by ascertaining what the defendant's interference with the plaintiff's close monopoly prevented the latter from deriving therefrom. It is convenient to consider these two criteria of damages separately, and in the order in which they have been stated.

$ 556. Royalties, as measures of damages, are sometimes objected to by defendants, and sometimes by plaintiffs. When invoked by a plaintiff, a royalty is liable to one class of tests, applied on behalf of the defendant; and when invoked by a defendant to limit the plaintiff's recovery, it is liable to another class of tests, applied on behalf of the plaintiff.

$ 557. A defendant may successfully object to a given royalty, as a measure of the plaintiff's damages, unless it was uniform, and was actually paid or secured before the defendant's infringement was committed, by a sufficient number of persons to show that people who have occasion to purchase a license under the patent can afford to pay that royalty.' The sale of a single license is not sufficient to establish a royalty;' because one purchaser may give a larger sum for a license than he or any other can afford to pay; whereas such a business error is not likely to be made by a considerable number of persons when buying licenses under the same patent. The unanimous opinion of twelve average men is thought to be the most reliable criterion of guilt or innocence; but no reasonable person would hold that view of the opinion of any one of the twelve. In like manner, the unanimous acquiescence of a considerable number of men in a particular royalty, is evidence of its substantial justice ; while the acquiescence of one only, of the same men, would have no convincing force.

1873; Yale Lock Co. v. Sargent, 117 U. S. 552, 1885; McComb v. Brodie, 1 Woods, 153, 1871.

1 Zane o. Peck, 13 Fed. Rep. 475, 1882.

9 Rude v. Westcott, 129 U. S.

1889; Adams v. Stamping Co. 28 Fed. Rep. 366, 1886.

3 Judson o. Bradford, 3 Bann. & Ard. 549, 1878; Vulcanite Paving Co. o. Pavement Co. 36 Fed. Rep. 378, 1888.

The amount of the royalty relied upon, must have been actually paid or secured by the licensees, in order to make it a measure of damages against other infringers. Were the rule otherwise, there would be no safeguard against collusion between patentees and licensees for the purpose of imposing on infringers and other third parties. It follows that the mere production of a quantity of licenses, purporting to have been granted at a certain rate, cannot establish a royalty at that rate. Somebody must make oath that the ostensible price of the licenses was their true price, before they can have that effect. The oath and not the license being the best evidence of the royalty, the royalty may be proved by the oath without the production of the license, even where the license is in writing.'

A royalty, in order to be binding on a defendant who was a stranger to the licenses which established it, must be a uniform royalty.' This rule does not imply that a patentee may not change the rate of his royalty as often as he can get a sufficient number of licensees to acquiesce in such a change;' but it does exclude from consideration, all such licenses as were given at variant rates, for no better reason than variant ability on the part of the licensees to negotiate for a license, or to resist a suit for infringement."

So also, a particular royalty may be successfully objected to by a defendant, if it was not established till after the infringement sued upon was committed. And it is probable that a defendant may avoid the application of a particular royalty, by showing that a different rate was established in

I Wooster 0. Simonson, 20 Fed. Rep. 316, 1884.

? Westcott o. Rude, 19 Fed. Rep. 833. 1884.

3 Asmus o. Freeman, 34 Fed. Rep. 902, 1888.

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the particular city, county, or State wherein he unlawfully availed himself of the patentee's invention.

$ 558. A plaintiff may successfully object to a particular royalty as a measure of his damages, where that royalty was established, and was intended to be established, within a particular territory only; or where it was changed or abandoned before the infringement in suit was committed. These two points rest upon obvious reasons. A patentee may wish to hold a close monopoly on his invention in Maine, while willing to grant licenses in Florida; or he may rightfully demand a much larger royalty in Minnesota, than that which he is willing to accept in Texas or in Oregon. In such a case, it is clear that his Oregon royalty is not to be forced upon him for infringement committed in Minnesota; and that his business in Maine is not to be ruined by infringers who have nothing worse to fear at the end of a suit than the payment of a royalty like that established in Florida. So also, it has often happened, and may happen again, that an inventor is forced by poverty, or other misfortune, to accept inadequate royalties during the earlier years of his exclusive right. In such a case, it is clear that he ought to be permitted to increase the rate whenever he can get licensees to consent thereto; or to abandon his royalty altogether and hold a close monopoly on his invention, as far as he can do so consistently with licenses outstanding.

$ 559. Money paid for infringement already committed does not establish nor tend to establish a royalty.' A price paid to compromise a pending action, or an existing right of action, may sometimes be larger, and sometimes be smaller, than a proper royalty would be. It may be larger, where the infringer is a person who is disinclined to litiga

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