ment.' Where the disobedience is less excusable, the defendant may be compelled to pay all the expenses and counsel fees incurred by the complainant in relation to the motion. Where the particular defendant in contempt derived no benefit from his disobedience, the penalty should not extend to a decree for the damages which the complainant incurred on account of the violation.' Where such a decree is entered, it will not justify a permanent imprisonment of the defendant, on account of his inability and consequent failure to pay its amount;' and such a decree may be reviewed and reversed in the Supreme Court. But where disobedience of an injunction is excuseless and defiant, the penalty may be a reasonable fine and a reasonable imprisonment. 1 Carsteadt v. Corset Co. 13 Blatch. 371, 1876; Strobridge v. Lindsay, 6 Fed. Rep. 510, 1881. * Doubleday v. Sherman, 4 Fisher, 253, 1870; Schillinger v. Gunther, 2 Bann. & Ard. 545, 1877. 5 Phillips v. Detroit, 3 Bann. & Ard. 155, 1877. 4 Hendryx v. Fitzpatrick, 19 Fed. Rep. 810, 1884. Worden v. Searls, 121 U. S. 24, 1886. CHAPTER XXII. PROFITS. 711. The infringer's profits recover able in equity. 712. In cases of joint infringement. 713. In cases of infringement partly unprofitable. 714. What spaces of time an account of profits may cover. 715. The generic rule for ascertaining infringer's profits. 716. Complainant's damages no cri terion of defendant's profits. 717. Defendant's profits in cases of unlawfully making and selling articles covered by the complainant's patent. 718. Method of ascertaining cost of making and selling infringing articles. 719. Burden of proof when it is necessary to separate profits due to patented features, from profits due to other features, of an infringing article. 720. Method of making the separation where defendant made and sold the patented invention separately, as well as in connection with other things. 721. Method where defendant pays royalty for right to make and sell the features not covered by the patent in suit. 722. Cases where no separation is required or allowed. 723. Method of making the separation by the criterion of comparative cost. 724. Defendant's profits in cases of unlawfully selling articles partly or wholly covered by complainant's patent. 725. Defendant's profits in cases of unlawful using of patented processes or things, ascertained by the rule in Mowry v. Whitney. 726. Standards of comparison in respect of being open to the public. 727. In respect of being adequate to accomplish an equally beneficial result. 728. Recoverable profits may result from affirmative gains, or from saving from loss. 729. Affirmative gain. 730. Saving from loss. 731. Affirmative gain and saving from loss. 732. Standards of comparison need not have been used by the infringer. 733. A standard of comparison must have been known at the time of the infringement, but need not have been in existence at any earlier period. 734. Method of selecting the proper standard of comparison. 735. The rule in Mowry . Whitney has no application to cases of infringement by making or by selling. 736. Questions of interest on infringers' profits, considered in the light of Supreme Court precedents. 743. Questions relevant to different sorts of defendant's alleged infringement. 744. Master's reports. 737. Considered in the light of Cir- 745. Exceptions to master's report. cuit Court precedents. 738. Considered in the light of equitable doctrines and principles. 739. Proceedings before masters. 740. Evidence before masters. 741. Objections to evidence before masters. 746. Defendant's exceptions master's reports. to 747. Defendant's affirmative exceptions to master's reports. 748. Defendant's negative excep tions to master's reports. 749. Complainant's exceptions to master's reports. 742. Questions of the extent of the 750. Outline of practice relevant to defendant's infringement. master's findings. § 711. THE profits which are recoverable in equity for the infringement of a patent, are those which the defendant made from that infringement.' They are the profits which he actually made; not those which with reasonable diligence or different management he might have made.' Where a particular infringer realized no profit from his infringement none can be recovered from him; but where he did make such a profit, it can be recovered, whether the general business, of which the infringement formed a part, was profitable to him or not.' The recoverable profits are those which resulted directly, and do not include any which resulted indirectly, from the infringement. The case just cited is an excellent example of this distinction. The difference between the amount of money for which the defendants sold their preserved fish, and the aggregate cost of that fish and of preserving it by the patented apparatus, was there held to be direct profit. But it appeared that the defendants were also dealers in fresh fish, and that they sold a large amount of such fish at higher prices than they Rubber Co. v. Goodyear, 9 Wallace, 801, 1869; Tilghman v. Proctor, 125 U. S. 144, 1888. Livingston v. Woodworth, 15 Howard, 546, 1853; Dean v. Mason, 20 Howard, 203, 1857; Munson v. New York, 16 Fed. Rep. 560, 1883. 3 Elizabeth v. Pavement Co. 97 U. S. 138, 1877; Tilghman v. Proctor, 125 U. S. 146, 1888. Piper v. Brown, 1 Holmes, 198, 1873. could have done, had they not reduced the supply in the market by means of preserving fish in the patented apparatus. The increase in the price of fresh fish, which was thus caused by the defendants' infringement, was one and one half cents per pound; and the consequent profits made by the defendants amounted to more than six thousand dollars. But the court held that those profits could not be recovered by the patentee, because they did not directly result from the infringement of his patent. § 712. Where several defendants were joint infringers of a patent, but where all the resulting profits were received by part of the wrong-doers, the decree for profits will be rendered only against those defendants who realized them.' Where all of the defendants realized profits during a portion of the time covered by the infringement in suit, and where a part of them realized profits during the residue of that time, the respective profits may be recovered accordingly, and a decree be entered against all of the defendants for the profits in which all participated, and against a part of the defendants for the profits which that part alone realized.' § 713. Where a part of the infringement of a defendant resulted in profits, and the residue resulted in losses, the complainant is entitled to recover those profits without any deduction on account of those losses. Each infringement is treated by itself. If it resulted in profit, that profit belongs to the patentee. If it resulted in loss, that loss must be borne by the infringer. It cannot be set off against the patentee's right of action for the profitable infringement, any more than it could be made the basis of a right of action against the patentee if no infringement had been profitable. 1 Elizabeth v. Pavement Co. 97 U. S. 140, 1877. 2 Tatham v. Lowber, 4 Blatch. 87, 1857; Herring v. Gage, 3 Bann. & Ard. 402, 1878. 3 Callaghan v. Myers, 128 U. S. 664, 1888; Graham v. Mason, 1 Holmes, 90, 1872; Steam Stone Cutter Co. v. Mfg. Co. 17 Blatch. 27, 1879. § 714. An account of profits cannot be had where none arose before the action was begun,' but such an account is not confined to those profits, nor indeed to those which accrued before the interlocutory decree was entered; but may be made to include all profits realized by the defendant from infringing the complainant's right, at any time prior to the closing of the account.' § 715. The generic rule for ascertaining the amount of the profits recoverable in equity for the infringement of a patent, is that of treating the infringer as though he were a trustee for the patentee in respect of the profits which he realized from his infringement. The specific rules by means of which this generic rule is administered, are somewhat numerous and somewhat elastic. They are adapted to the varying natures of patented inventions and to the varying circumstances under which the patents for those inventions are respectively infringed. They all require the best evidence, of which the nature of each particular case, to which they may be respectively applied, will reasonably admit; and that evidence must be reasonably convincing." § 716. The patentee's royalty is no measure of the defendant's profits,' even in a case where the patentee habitually exercised his exclusive right by granting licenses to others. Nor are any other facts which relate to the measure of the complainant's damages, material to inquiries touching the amount of the defendant's profits." 5 717. The difference between the amount it cost the de 1 Marsh v. Nichols, 128 U. S. 616, 1888. 2 Rubber Co. v. Goodyear, 9 Wallace, 800, 1869; Knox v. Quicksilver Mining Co. 6 Sawyer, 435, 1878; Creamer v. Bowers, 35 Fed. Rep. 209, 1888. 3 Root v. Railway Co. 105 U. S. 214, 1881; Tilghman v. Proctor, 125 U. S. 148, 1888. 4 Wetherill v. Zinc Co. 1 Bann. & Ard. 486, 1874. Herring v. Gage, 3 Bann. & Ard. 399, 1878; Emigh v. Railroad Co. 6 Fed. Rep. 283, 1881. Locomotive Safety Truck Co. v. Railroad Co. 2 Fed. Rep. 681, 1880. Knox v. Quicksilver Mining Co. 6 Sawyer, 430, 1878. Tilghman v. Proctor, 125 U. S. 143, 1888; Wooster v. Taylor, 14 Blatch. 403, 1878. • Elizabeth v. Pavement Co. 97 U. S. 143, 1877. |