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tion or where he has some reason to fear a judgment for triple damages, or where the compromise releases him, not only from damages, but also from all rights of action for infringer's profits. It may be smaller, where the infringer is presumably insolvent, or where the amount involved is too small to justify the expense incident to its collection by an action at law.
$ 560. A royalty which is reserved as the whole or a part of the purchase price of a patent, is not a proper one to measure damages as against an infringer. It may be too large, or it may be too small for that purpose. It will be too large, when the patent is of such a nature that the buyer can afford to pay more for a close monopoly, than for a license to compete with other licensees.' It will be too small, where it is for the interest of the owners of the patent to subdivide the right to practise the invention. In the latter class of cases, the buyer, in order to get paid for introducing the invention and retailing the licenses, must sell them at a higher rate than that which he pays to the patentee.
$ 561. A royalty provided for in licenses to make and use, is no measure of damages for an infringement which consisted of making and selling the patented thing; nor is a royalty which was established by licenses to make and sell specimens of the invention covered by a patent, any criterion of the injury which may have been inflicted on the pecuniary interests of the owner, by unlawfully making and using such specimens. These rules rest upon undeniable reasons. The value of some patents resides almost entirely in the exclusive right to make and sell, while that of others consists almost wholly in the exclusive right to make and use, the inventions which they respectively cover.
$ 562. In measuring damages with a royalty, due regard must be had to proportion. Where an infringement was
· La Baw o. Hawkins, 2 Bann. & Ard. 564, 1877.
Colgate o. Mfg. Co. 28 Fed. Rep.
3 Colgate v. Mfg.Co. 28 Fed. Rep. 147, 1886.
smaller in extent, or shorter in duration, than the corresponding doings which were authorized by the licenses which established the royalty, it is but just that the damages should be assessed at a correspondingly smaller sum, unless there are special facts in the case which render the particular extent of the infringement immaterial to the plaintiff.' In like manner, damages will amount to a sum correspondingly larger than the royalty which constitutes their criterion, when the infringement in suit was larger or was longer than the doings authorized by the licenses which established the royalty. So also, where only part of the inventions covered by a particular patent, are unlawfully appropriated by an infringer, he is liable for only an equitable proportion of the royalty which has been established for all of those inventions jointly ;' and where a royalty has been established for the joint employment of all of the inventions covered by several patents, damages for the infringement of part of those patents may be equitably assessed by dividing that royalty into portions proportionate to the value of the several inventions covered by those patents."
$ 563. Where no established royalty is applicable as a measure of the damages caused by a particular infringement, those damages may sometimes be ascertained by the second method : that is, by finding what the plaintiff would have derived from his monopoly if the defendant had not interfered, but which he failed to realize because of that interference with his rights. Where the owner of a patent is able to supply the whole demand for the thing it covers or produces, and where the whole demand would go to him if not diverted by some infringer, it is clear that the injury
1 Birdsall v. Coolidge, 93 U. S. 70, 1876; Judson v. Bradford, 3 Bann. & Ard. 549, 1878; Wooster v. Simonson, 16 Fed. Rep. 680, 1883; Westcott o. Rude, 19 Fed. Rep. 834, 1884; Bates v. Railroad Co. 32 Fed. Rep. 628, 1887.
? Willimantic Thread Co. o. Clark Thread Co. 27 Fed. Rep. 865, 1886: Asmus 0. Freeman, 34 Fed. Rep. 903. 1888.
3 Porter Needle Co. o. Needle Co. 22 Fed. Rep. 829, 1885.
caused by a particular infringer can be ascertained by finding what pecuniary advantage the owner of the patent would have derived if he had supplied that portion of the demand which was supplied by that infringer. The two conditions of this rule are prerequisites of its applicability. The highest authority has announced that: “ What a patentee would have made if the infringer had not interfered with his rights, is a question of fact, and not a judgment of law.” In order to show that a patentee would in fact have made a particular profit, if an infringer had not forestalled his sales, it is necessary to show that he would, but for that infringer, have made those sales ;? and to that end it is necessary to show that he could have supplied the articles wanted, and that the persons wanting those articles would have bought them of him had no infringer interfered.' But these points may be sufficiently established without being demonstrated; because demonstration would generally be impossible, and because every reasonable doubt relevant thereto, is to be resolved in favor of the plaintiff.* Where these facts are proved, the damages of the patentee will consist of the profits which he would have derived from the sales made by the infringer, if the patentee had made those sales; supplemented by the amount of whatever reduction of prices the patentee was compelled, by the defendant's competing infringement, to make even upon the goods which he did sell. Where it does not appear that the owner of a patent could and would have supplied the demand which was supplied by an infringer, even if no infringer had interfered, these last mentioned elements of damages may still be proved, and a verdict be founded upon
Douglas, 2 Fisher, 340, 1863; Sargent o. Mfg. Co. 17 Blatch. 247, 1879; Hall 0. Stern, 20 Fed. Rep. 788, 1884.
? Dobson v. Dornan, 118 U. S. 18, 1885; Roemer 0. Simon, 31 Fed. Rep, 41, 1887; Bell v. Stamping Co. 32 Fed. Rep. 551, 1887.
3 Goodyear v. Bishop, 2 Fisher, 161, 1861 ; Magic Ruffle Co. v.
* Creamer v. Bowers, 35 Fed. Rep. 208, 1888.
• Fitch v. Bragg, 16 Fed. Rep. 247, 1883; Hobbie o. Smith, 27 Fed. Rep. 662, 1886.
either or both of them alone. But in order to constitute either a part or the whole of the foundation of a verdict, proof of hurtful competition must include evidence that it was the defendant's infringement that caused the reduction of prices, and also evidence of the extent of the reduction so caused.
Where damages cannot be assessed on the basis of a royalty, nor on that of lost sales, nor on that of hurtful competition, the proper method of assessing them is to ascertain what would have been a reasonable royalty for the infringer to have paid.' In determining this point, the utility and cheapness of the patented thing, as compared with other things known at the time of the infringement, and capable of doing similar work, will always be the leading guides.
$ 564. Damages for infringement by making, without unlawfully selling or using, specimens of a patented thing will be nominal only,' unless there is an established royalty for such making, or unless such making is followed by using or selling in a foreign country, or is followed by using or selling in this country after the expiration of the patent. Where an infringer made specimens of a thing covered by a patent, and afterward sold or used them in a foreign country, the measure of damages is whatever royalty has been established for a license to make and use such specimens for such a purpose. Where no royalty of the kind has been established, there is generally no way of assessing damages in such a case other than to determine what a reasonable royalty would have been. Damages can seldom be assessed in such a case on any theory that the infringer's doings interfered with the patentee's sales; because it will
1 Yale Lock Co. v. Sargent, 117 U. S. 552, 1885; Creamer v. Bowers, 35 Fed. Rep. 207, 1888.
Ingersoll v. Musgrove, 3 Bann. & Ard. 304, 1878.
Co. 37 Fed. Rep. 654, 1889.
4 Whittemore o. Cutter, 1 Gallison, 483, 1813; Carter o. Baker, 4 Fisher, 419, 1871.
3 McKeever v. United States, 23 Off. Gaz, 1528,1879; Royer o. Coupe, 29 Fed. Rep. 371, 1886; Cary v. Mfg.
5 Ketchum Harvester Co. o. Jobnson Harvester Co. 8 Fed. Rep. 586, 1881.
generally be impossible to prove that the foreign demand would otherwise have come to the patentee. These considerations seem also to apply to cases where the infringement consisted of making specimens of a patented thing shortly before the expiration of the patent, with a view to using or selling them shortly after that event. Such a scheme of proceeding is undoubtedly injurious to a patentee, for if persons wait till after the expiration of a patent before making the articles it covers, they will not be able to use or sell those articles till some time still later, and during the interval the patentee may nearly or quite maintain his former command of the market.
$ 565. The evidence of damages must be reasonably definite,' in order to justify a jury in finding a verdict for more than a nominal amount. Conjecture will not perform the office of proof, nor can imagination take the place of calculation in this behalf. But this rule is not to be used to defeat the ends of justice. It may happen that a plaintiff can prove the measure of his damages with precision, while unable to prove the real extent of the defendant's infringement. In such a case, the defendant usually can remove the uncertainty, because he is likely to know or be able to ascertain what and how much he has done. If by omitting to supply the information, a defendant could avert à verdict for proper damages, he could easily defeat a meritorious cause. But the law will not allow itself to be thus circumvented. On the contrary, it is the rule, that where a plaintiff introduces evidence to show that the damages were large, and to show the amount of those damages as accurately as the nature of the case permits him to do, and where the defendant offers no evidence upon the subject, it becomes the function of the jury to estimate those damages as best they can on the basis of the plaintiff's evidence.' In making such an estimate a jury ought
Creamer v. Bowers, 35 Fed. Rep. 208, 1888.
? New York o. Ransom, 23 How
ard, 487, 1859.
3 Stephens v. Felt, 2 Blatch. 38, 1846.