# Petition for Writ of Certiorari — Westinghouse Co. v. Wagner Mfg. Co.

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Petition for Writ of Certiorari
- **Published:** January 1, 1912
- **Citation:** 225 U.S. 604

## Text

OCTOBER TERM, 1909. [guise seyeme Coet, U

DEC 28 1909

In Equity.
JAMES H. McKENNE
i‘ cL

WESTINGHOUSE ELECTRIC & MANUFACTURING
COMPANY, PETITIONER,

vs. s
WAGNER ELECTRIC MANUFACTURING COMPANY,
RESPONDENT.

Petition for Writ of Certiorari

FROM THE
SUPREME COURT OF THE UNITED STATES

TO THB
UNITED STATES CIRCUIT COURT OF APPEALS
FOR THE EIGHTH CIRCUIT.

7

THOMAS B. KERR, —

PAUL WELL,
Solicitors and of Counsel for Petitioner,
Westinghouse Electric & Manufacturing
Company.

Supreme Court of the United States

OCTOBER TERM, 1909.

In Equity.

WESTINGHOUSE ELECTRIC & MANUFACTURING
COMPANY, PETITIONER,
VS.
WAGNER ELECTRIC MANUFACTURING COMPANY,
RESPONDENT.

PETITION FOR WRIT OF CERTIORARI FROM THE SUPREME Cour?

OF THE UNITED STATES TO THE UNITED STATES CIRCUIT
Court OF APPEALS FOR THE EIGHTH CIRCUIT.

———

To the Honorable the Chief Justice and Associate Justices
of the Supreme Court of the United States:
Westinghouse Electric & Manufacturing

Your petitioner,
respectfully repre-

Company, 2 Pennsvivania corporation,

sents :
That the following rules of law voverning the profits which

a complainant in a suit in equity for infringement of letters

a we

patent is entitled to recover from a defendant, under sec.
tion 4921 of the Revised Statutes of the United States, where
the defendant has made and sold a patented invention in yio.
lation of complainant's rights, have been established by the
decisions of this Court:

(1) Where the patented invention is for “a complete
thing, consisting of a certain combination of elements,” re.
sulting in a new or improved machine or manufacture, and
the defendant, in violation of complainant's rights under the
patent, has made and sold machines or manufactures which
embody in their construction such invention, “the whole of
it,” thereby having been guilty of making and selling the
patented machine or manufacture; in such a case the com-
plainant is entitled to recover al] the profits made by the de-
fendant in the manufacture and sale of such infringing
machines or manufactures, Elizabeth vy. Pavement Co., 97
U.S. 126, 141; Hurlbut v. Schillinger, 130 U. 8. 456, 472;
Crosby Valve Company vy. Safety Valve Co., 141 U. §. 441,
453, 454.

(2) In such a case, if it appear that the defendant, in the
manufacture of such infrir

iging machines or manufactures,
has also embodied

in them some addition or improvement,
the burden of proof is on the defendant to show what pro-
portion of the profits made on said infringing machines or

manufactures was due to such addition or improvement: and

if the defendant fail to produce data from which the Master
may ascertain what proportion of the profits made by the
defendant were due to such addition or improvement on the
patented invention, then the complainant is entitled to re-
cover all the profits made by the defendant in the manu-
facture and sale of the infringing machines or manufactures,

Elizabeth vy. Pavement Company, 97 U. 8. 126, 141; Crosby

=

=

Valve Company v. Safety Valve Co., 141 U. S. 441, 444; Rub-
ber Co. v. Goodyear, 9 Wall., 802, 803, 804.

The above rules, established by this Court in the cases
above cited and in other cases referred to in this petition, are
especially applicable, where, from the record, it affirmatively
appears—-as it does in the case at bar by matters found and
decreed antecedently to the particular case at bar, in
respect to which matters this Respondent is legally and ad-
mittedly bound—that:

The invention of the patent was a distinct advance in the
art, recognized as such by the public when the patented in-
vention was first introduced, and where the infringing ma-
chines were sold as units or complete things, each consisting
of the certain combination of elements claimed by the patent,
each of the infringing machines constituting in itself a sepa-
rate unit or entirety, embodying, as an entirety, the complete
machine or manufacture claimed as an entirety in the patent
in suit.

The above rules of law, established by this Court in its
construction of Section 4921 R. 8. U. S., have been set aside
by the majority opinien of the U.S. Cireuit Court of Appeals
for the Eighth Cireuit in the case at bar (although said
majority opinion was dissented from by Sanborn, Circuit
Judge, in his separate opinion in this case), as we shall now
proceed to particularly point out.

That heretofore, to-wit, on August 19, 1909, in an opinion
delivered by Riner, Distriet Judge, concurred in by Van
Devanter, Circuit Judge, but dissented from in a separate
opinion of the same date delivered by Sanborn, Circuit Judge,
on appeal from the Circuit Court of the United States for the
Eastern Division of the Eastern Judicial District of Mis-

4

ails

—-—

souri, in case No. 2857 in the said U. S. Court of Appeals for
the Eighth Circuit, in which case your Petitioner was ap-
peilant and this Respondent was appellee, a certain final
decree, found between pages 699 and 703 of the transcript
of the record in this case, entered by the Circuit Court on the
5th day of March, 1908, was affirmed.

In affirming the said decree in and by its said opinion filed
August 16, 1909, the said Majority of the United States
Court of Appeals affirmed the following propositions:

That letters patent of the United States (being the letters
patent involved in this suit and reproduced between pages 244
and 246 of the record) issued to George Westinghouse, Jr.,
for Electrical Converter, dated July 12, 1887, and numbered
366,362 were good and valid in ‘aw, particularly as to the
fourth claim thereof, and that your setitioner, was the owner
of said letters patent and of all righ.s thereunder.

That George Westinghouse, Jr. was the first, true and
original inventor of the inventions and iimprovements de-
scribed and claimed in claim 4 of said letters patent.

That the Respondent herein, Wagner Electric Manu-
facturing Company, had infringed claim 4 of said letters
patent and the exclusive rights of your Petitioner under the
sume, by inaking, using and selling electrical converters or
transformers embodying in their construction and principle
of speration the combination, substantially as deseribed in
said Westinghouse patent, of an electrical converter or trans-
former constructed with open spaces in its core, an inclosing
case, and non-conducting fluid in said case adapted to cir-
culate through said spaces and about the converter or trans-
former.

That the report of the Special Master, Henry H. Denison,
Esq., to whom this cause had been referred by the interlocu-

ieee:

_

tory decree entered in this cause on February 16, 1904, by the
Cireuit Court, (Record pp. 345-347), to take and state an ac-
count of damages and profits (for the report of said Master,
see Record, pages 349 and 401), be disapproved and the excep-
tions thereto sustained, and it was ordered that your Peti-
tioner was “entitled to nominal damages only on account of
the infringing devices.”

The said Special Master had found (Record 401) that
your Petitioner was entitled to recover from this Respondent,
on account of the manufacture and sale of the infringing
transformers, as profits made by this Respondent, by reason
of said infringement, the sum of $132,433.35.

In the confirmation of this judgment or decree by the ma-
jority of the Court of Appeals, not only has your Petitioner
been deprived of $182,483.55, awarded to your Petitioner by
the Master’s finding, and also interest thereon from the date
of the filing of the said Master’s report (July 29, 1907), but a
precedent has been established in the United States Circuit
Court of Appeals for the Eighth Circuit which is in direct
conflict with the decisions of the Supreme Court of the
United States in analogous cases and is also in conflict with
the decisions of the United States Circuit Courts of Appeal
in other circuits of the United States——a precedent which, if
allowed to stand, will eventually and necessarily destroy
rights of property of inestimable value.

This petition is made not only because the question arising
thereunder is one of great gravity and importance, affecting
valuable rights of property, but chiefly “in the interest of uni-
formity of decision,” the conclusions of the opinion of the
majority of the Circuit Court of Appeals for the Righth Cir-
cuit in this case, as well as the reasons given in the said
opinion for the said conclusions, being, as above stated and

7

as we shall now proceed to demonstrate, in this petition and in
the brief accompanying the same, in direct conflict with well
settled principles and rules of law established by this Court
and followed by Circuit Courts of Appeal in other circuits
of the United States.

The letters pateat involved in this suit relate to an
electrical transformer or converter. The said letters patent
are found in the record in this case, between pages 244 and
246. Claim 4 in suit is in the following words:

“4. The combination, substantially as described, of
an electric converter constructed with open spaces in its
core, an inclosing case, and a non-conducting fluid or
gas in said case adapted to circulate through said spaces
and about the converter.”

The bill was filed on June 24, 1902. Before the bill was
filed a contest had been had between your Petitioner and Ke-
spondent’s Vendee, the Union Carbide Company, in the See-
ond Circuit, with respect to these very identical letters patent
and this identical claim 4. Less than one month before the
bill in this ease was filed, that is to say, on May 29, 1902, that
contest culminated in an opinion rendered by the Cirenit
Court of Appeals for the Second Cirenit, which opinien, as Tre-
ported in the 117th Federal Reporter, between pages 495 and
DOL thereof, was stipulated into this case at page 443 of the
record. In and by that opinion the UL 8. Cirenit Court of Ap-
peals for the Second Circuit affirmed the decree and opinion
of the U. 8. Circuit Court for the Western District of New
York. which latter opinion is reported in 112th Federal Re-
porter between pages 417 and 431, that is to say: In the case
of your Petitioner against Union Carbide Company, in
which case the Circuit Court for the Western District of
New York, on November 11, 1901, rendered an opinion and
ordered a decree sustaining said letters patent No. 366,362

a

and finding that said Union Carbide Company, Respondent’s
vendee, in the use of certain transformers which said Union
Carbide Company had purchased from this Respondent, said
Unien Carbide Company bad infringed the above-recited
claim 4 of the said letters patent No. 366,362, the Circuit
Court in that case stating, at page 418 of 112 Fed.: “The
Waguer Electric Manufacturing Company of St. Louis,
Missouri” (which is this Respondent), “furnished the alleged
infringing transformers to the defendant and it may therefore
be regarded as the real defendant in each case”.

In the opinion of the Court of Appeals for Second Cirenit in
the Union Carbide case (117 Fed. 497, 501), rendered May 29,
1902, the Court, referring to the opinion of the Court below
as found in 112 Fed. £17 (see LIT Fed. 495), also found that
the said letters patent were good and valid, sustained the
same, found that the Union Carbide Company had infringed
claim 4 thereof, and affirmed the decree of the Cireuit Court
as to said patent No. 366.562 (see 117 Fed. 501).

The form and construction of the infringing trausformer
made and sold by this Respondent to said Union Carbide
Company, and the defendant's infringing transformer re-
ferred to in the opinions of the Cireuit Court aud Circuit
Court of Appeals in the said case against the Union Carbide
Company, is illustrated af page 168 of the record in the case
at bar. As to tht construction of transformer, found to
have infringed claim 4 of the patent in suit, it is admitted
on this record that, between the date of the filing of the bill
(June 24, 1902) and six years prior thereto, this Re-
spondent has made and sold, ineluding the transformers
sold te) Carbide Co. Go24 infringing transformers
for which it received the sum of $955,271.76. The
answer in this case (in Paragraph IX thereof, at

TAL

willie

page 13 of the Record), admits that this Respondent
had been duly notified of the grant of the letters
patent in suit and of its infringement thereof; and said para-
eraph of the answer contains the following admission in re-
gard to the construction of Respondent's infringing trans
formers :

“And this defendant admits that it has, since the
12th day of July, 1887, and subsequent to the as-
signment to the complainant, within the Eastern Dis-
trict of Missouri and elsewhere throughout the United
States, made, used and sold devices or apparatus which
embody the invention or discovery claimed in claim 4
of said letters patent.”

Furthermore, with specitic reference to the construction
of transformer illustrated at page 168 of this record, after
the pleadings in the case at bar were made up and in
connection with the complainant’s proofs-in-chief, the follow-
ing stipulation was made and appears at page 19 of the
record :

“Pirst, That the defendant prior to the filing of the
bill of complaint herein, did manufacture and sell elec-
trical transformers constructed and intended to be used
as shown and described in figure 24 of an article which
appeared in the issne of the “American Electrician’ for
January, 1900, on page 18 thereof, said ilHustration show-
ing a transformer having parallel primary and second-
ary coils and a core composed of thin plates of soft
iron arranged in groups, said groups being separated
from each other by blocks, thus providing spaces be-
tween the groups of plates; and the coils and core he-
ing enclosed in a metal case containing a non-conducting
fluid which circulates through the open spaces in the
laminated core.”

It further appears on this record that on the accounting
before the Master, Mr. Layman, the General Manager and

Sere: : -

= =

Treasurer of the Respondent company, admitted (Record
105, 106) that since June 24, 1896, which was six years be-
fore the filing of the bill, up to the date of the filing of the
bill, this Respondent had manufactured and sold at) least
6524 transformers similar in construction to the one illus-
trated at page 168 of the record, and each and all of which,
in accordance with the admission in the answer hereinbefore
recited and the stipulation hereinbefore recited, embodied
in their construction the invention claimed by claim 4 of the
Westinghouse patent in suit,

As the opinions of the U.S. Cireuit) Court and U. 8&8.
Court of Appeals in the suit against Uuien Carbide Co, show
isee 112 Fed. 417 and 117 Fed. 195), and as the patent
in suit. itself shows, claim 4 of the said patent hereinbefore
recited is the only claim which covers the converter or trans-
former deseribed in the said letters patent in its complete
form and as an entirely,

Therefore it stands admitted on this record and proved
beyond question —a fact not questioned by the majerity
opinion of the U.S. Cirenit Court of Appeals in the ease at
bar—that on the accounting before the Master if) was es-
tablished that between June 1896 and the filing of the bill
of complaint herein, with full knowledge of your Petitioner's
rights under the letters patent in suit, this Respondent had
manufactured and sold at St. Louis, Missouri, 6524 infring-
ing transformers, each and every one of which embodied,
as an entire and complete transformer, precisely that in-
vention the subject-matter of claim 4 of the patent in suit
which had been passed apon and found infringed by the
U.S. Circuit Court for the Western District of New York,
in the ease of your Petitioner against the Union Carbide
Company, and by the U. 8. Circuit Court of Appeals for
the Second Circuit, in the same case, on appeal.

alibi

When your Petitioner filed its bill in the case at bar, it
recited in Paragraph VI thereof the history of the litigation
in the case against the Union Carbide Company, Respondent's
vendee, and charged:

“That the devices involved in the said suit, and whieh
were used by the Union Carbide Company, the defend-
ant therein, were manufactured and sold by the Wag-
ner Electric Manufacturing Company, the defendant
herein, and that said suit against the Union Carbide
Company was defended by said Wagner Electric Manu-
facturing Company and was argued by its counsel, and
that. the matters and thines found and decreed in the
said suit against the Union Carbide Company are rex
adjudicata against the said Wagner Electric Manufac-
turing Company.” (See Record 4, 5.)

In its answer the Respondent (in Paragraph VI and VII
thereof) specifically and in detail admitted the allegations
of the bill in respect to the prior litigation under this pat-
ent in the suit against the Union Carbide Company, and then
stated in Paragraph VITL of the Answer (pages 12 and 13
of the record) as follows:

“This defendant admits that the device involved in
said snit and used by the Union Carbide Company, the
defendant therein, was manufactured and sold by this
defendant, and that said suit against the said Union
Carbide Company was defended by this defendant and
wes argued by its counsel, and that the matters and
things found and decreed in said suit against the Union
Carbide Company are res adjudicatae against this de-
fendant.”

There was no contest in the Circuit Court nor in the Cir-
cuit Court of Appeals in the case at bar on the question as to
whether or not these Union Carbide transformers and the
6524 infringing transformers accounted for before the Mas-
ter infringed claim 4. That fact is conceded and has been

conceded throughout the litigation in this case. The only
contest in the case at bar, prior to the interlocutory decree,
found at page 745 of the record, was in regard to a certain
“Type M° transformer made and sold by this Respondent
after the decree in the Carbide suit. One question on the
appeal to the U. 8. Court of Appeals for the Bighth Circuit
ed to that “Type M” transformer. On this peti-
tion we are not concerned with that “Type M” transformer.
The Cirenit Court found that said “Type M” transformer
did not infringe claim 4. Therefore, when your Petitioner
appealed the whole case, after the entry of the final decree,
eve of the questions before the U. 8. Circuit Court of Ap-
peals for the Eighth Circuit related to that “Type M” trans-
former. In the interlocutory decree in this case, (Record
p. 345-347) entered February 16, 1904, by Adams, Cireuit
Judge, it was expressly found that respondent’s original
type or construction of transformer illustrated at page 168
of this record was an infringement of claim 4 of the patent
e decree directed an accounting accordingly.
On that accounting your Petitioner sought to recover, not
damages, but the projits which this Respondent had made,
or which it could be estimated that the Respondent had
sale of said infringing trans-

also relat

in suit and th

made, by the manufacture and
formers.

On the accounting the Respondent's position was that the
profits made on these 6524 infringing transformers were
sy intermingled with the eeneral profits of its business that
they could not be separated therefvons although Respondent
eyoss amounts received by it from the sale of said
each year covered by the
the total sum thus re-

wave the
infringing transformers during
accounting (Record, pp. b. and f12),
ceived by Respondent from the sale of these infringing trans-
formers accounted for, between the vears IS86 and the

filing of the bill, being $955,271.76. (Record 442).

— =

The Treasurer and General Manager of the Respondent
company contended, at one phase of the proofs, before the
Master, that although he could give the number of infring-
ing transformers and the price at which each of the said
transformers was sold (a thing which he did), he could not,
from the books of the Respondent Company “or otherwise”
tell the cost of manufacture of these infringing transformers
respectively, nor the profits made on the transformer busi-
ness as distinguished from the other and general business
of the Respondent. Your Petitioner, on the other hand,
produced as witnesses persons who had been in the employ
of the Respondent company during the time covered by the
accounting, and showed from their testimony and from a
sample blue print reproduced at page 726 of the record, that
it had been the practice of the Respondent company, during
the six years covered by the inquiry before the Master and
up to the filing of the bill in this case, or at least up to the
date of the decision in the case against the Union Carbide
Company in November 1901, to make and keep most aceu-
‘ate detailed, written estimates of the cost of every item
entering into the manufacture of these infringing trans.
formers, including even the boxing and packing of the same
for shipment.

It also appeared from the proofs before the Master, when
the same witness, Layman, Treasurer and General Manager
of the Respondent company, was called as a witness for the
Respondent, that he admitted that the «: fendant had in its
vaults inventories made annually or sciiiannuially in respect
to these infringing transformers, yet the Respondent omitted
to produce the same in evidence (Record G15-616), a faet
found and referred to by the Master in his fourteenth find-
ings of facts (Ree, 376-7.)

As a result, the Master found that the profits of the Re-
spondent in the manufacture of the infringing transformers,

otitinn

as nearly as could be reached through estimates, comparisons
and apportionment, was approximately 259% on the net
amount of the sales of the infringing transformers (Record
374-377), and recommended a judgmen: in favor of your Peti-
tioner for the sum of $132,433.55, as the profits made by the
Respondent from the manufacture and sale of the infringing
transformers.

In overruling the findings of the Master on this point the
majority of the Court of Appeals ignored completely the rule
recognized and established by this Court in the cases of:

Crosby Valve Co. vy. Safety Valve Co., 141 U.S. 447;
Rubber Co. v. Goodyear, 9 Wall. 802, 803, 804;
Manufacturing Co. v. Cowing, 105 U.S. 257-8;
Tilghman y. Proctor, 125 U.S. 148;
National Bank vy. Insurance Co., 104 U. S. 54;
and other leading decisions of this Court, particularly pointed
out in the brief in support of this petition, that:

1. Under circumstances such as those which appear in the
record in this case, where the complainant seeks to recover
the profits made by the defendant by reason of the infringe-
ment, the profits may be estimated by the Master on the data
before him, especially where the Respondent has confused
the profits with the profits of his general business, or has
sought to conceal the profits actually made by him.

2 ‘That in ascertaining profits made by an infringer a
compensation is granted, “computed and measured by the
sume rules that Courts of Equity apply to a case of a trustee
who has wrongfully used the trust property for his own ad-
rantage.” (Tilghman vy. Proctor, 125 U.S. 148.)

3. And failed to pay that respect to the findings of a Spe-
cial Master in this case which this Court has repeatedly de-
cided must be paid to a Master's report, it being the law that

—14—

“the conclusions of the Master, depending upon the weighing
of conflicting testimony, have every reasonable presumption
in their favor and are not to be set aside or modified unless
there clearly appears to have been error or mistake on his
part.” Tilghman y, Proctor, 125 U.S. 136-149; Callaghan y.
Myers, 128 U.S. 617, 666; Kimberly vy. Arms Co., 129 U.S.
512-525; Crawford y. Neal, 144 U.S. 585; Furrer y. Ferris,
145 U.S. 132.

But the cardinal and most flagrant instance, in the light
of the actual facts in the case at bar, of failing to recognize
the rule established by this Court, and which seems to have
been the controlling reason resulting in the matjority opinion
herein, holding that your Petitioner was not entitled to re-
cover anything but nominal damages on account of the in-
fringing transformers accounted for before the Master, is
thus stated in the opinion of the majority of the Court.

“Tt must of course be conceded that while appellant's
combination, Claim 4, although really designed to keep
the core from becoming overheated, also tended to keep
the coils from becoming overheated, but the appellee's
transformer much more efficiently accomplished the re-
sult desired by providing for a circulation of oil or other
cooling medium through the open spaces between the
coils and between the core and the coils, as well as
through the open spaces in the core. We conclude, there-
fore, that the master was in error in finding that the en-
tire commercial value of the infringing transformers
inanufactured and sold by the appellee during the time
concerned in the accounting was due to the combination
described in Claim Four of appellant's patent.” * * *
“The patented device covered by Claim Four, being, as
we view it, a limited detailed claim and not being gener-
ally for a circulatory system throughout the heat pro-
ducing parts of the transformer, and the appellee’s in-
fringing transformer embracing something of value not
covered by that claim, viz: open spaces between the coils

= =

and between the coils and the core, we are of opinion that
the appellant, whose patent covered only part of the in-
fringing device, is net entitled to recover all the profits
made by the sypellee, but only such as resulted from the
patented invention.”

In other words, assuming that the majority of the Court of
Appeals is right in its facts involved in these statements (we
are prepared to show from reference to the patent in suit that
as to some of the facets here stated the opinion is wrong), it
would follow, contrary to the opinions of this Court in
Blizabeth v. Pavement Co, 97 U.S. 141, and contrary to
other decisions to which we have more specifically referred
in the brief in support of this petition, that: Where a patent
is for a combination of devices forming an entirety or unit,
and where the defendant has used that combination, adding
thereto certain features which may be an improvement
thereon, the burden of proof is on the complainant, not on
the defendant, to show what proportion of the profits received
by the defendant in the sale of these infringing transformers
was due to the alleged improvements found in the infringing
structure,

We respectfully submit) that under the decisions of this
Court in cases more particularly referred to in our brief inp
support of this petition, notably in the cases of Elizabeth v.

avernent Co., OT US. Tal, Hurlbut v. Schillinger, 130 0.8.
163, Crosby Valve Co, vy. Safety Valve Co, 141 U, S. 441,
where the complainant's invention is for a complete thing—
a combination of elements as an entirety or unity—and the
defendant has made and sold that combination, even if in
the defendant's structure the defendant has superadded some
improvements, (he burden of proof ts on the defendant to
show what proportion of the profits received by the defend-
ant from the sale of the infringing devices were due to such

a"

alleged, real or imaginary, improvements, and the burden of
proof in this respect is not upon the complainant.

Therefore, under the decisions of this tribunal, followed,
as We show in our brief in support of this petition, by similar
decisions by other Circuit Courts of Appeal in other circuits,
it is utterly immaterial whether or not the Master was right
or wrong in finding (as we believe he was entirely warranted
in finding) that the entire commercial value of the
infringing — transformers manufactured and sold by the
Respondent was due to the invention claimed — by
claim 4 of the patent in’ suit. The answer in this
case, by Paragraph IX, (found at page 15 of the record) and
the stipulation as to the Respondent's infringing trans.
formers found at page 19 of the record, as well as the proofs
before the Master, show that every one of the Respondent's
infringing transformers, in construction, was like the struc-
ture illustrated at page 168 of the record, and that every one
of Respondent’s more than six thousand infringing trans-
formers embodied the invention claimed by claim 4 of the
patent in suit, and was therefore for a converter constructed
as described in claim 4 and with an inclosing case and oil in
the inclosing case. These facts being established, and. it
having been established that the Respondent has manufae-
tured and sold more than six thousand of these infringing
transformers, even if said infringing transformers did con-
tain features which were improvements thereon, the burden
of proof (under the decisions of this Court), was on the re-
spondent to show exactly what proportion of the profits re-
ceived by the Respondent were due to those improvements as
distinguished from the precise, particular and improved in-
vention claimed by claim 4 of the patent in suit,

In a case such as this one is, where the patented) trans-
former is “a complete combination in itself, differing from

itn

every other” (transformer), “and the profit made by the de-
fendant was a single profit, derived from the construetion
of the” (transformer) “an an entirety.” the defendant having
made and sold the said patented invention (the complete
thing), “as such —the ichole of it prima facie the entire
“single profil” thus made by the defendant is due to the
thing patented (Elizabeth v. Pavement Co. OF UL S. 141;
Hurlbut v. Schillinger, 130 UL 8., 472). Tn such a case, if
the Respondent in “fhe form in which it clothed the” (pat-
ented) “inrention.” to paraphrase the language of this Court
in Crosby Valve Co. vy. Safety Valve Co., 11 UU. S.
444, 454, has improved on the form of embodiment of the
invention as shown in the patent, nevertheless the Com-
plainant is entitled to recover that “single profit’ derived
from the coustruction of the’ (invention) “as an entirely,”
unless the Respondent can show and does show (and the
burden is on the Respondent to do so) what proportion of
the “single profit™ made on each of such infringing trans-
formers was due to such improvement——was due to “the form
in ahich” (Respondent) “clothed the (patented) “Tree
lion’—so that such proportion of the profits can be sepa-
rated out of the “single profit” obtained by the Respondent
on the sale of each infringing transformer,

This is the law, clearly laid down by this Court in Eliza-
beth v. Pavement Co., 97 U.S. 141; Turibut v. Schillinger,
180 U.S. 456, 472; Croshy Valve Co. vy. Safety Valve Co.,
141 U. S. 444-454: and Rubber Co. vy. Goodyear, 9 Wall. S02,
803. 804. Tt is also the law as daid down by other U. 8.
Courts of Appeal in other cireaits, and the law as laid down
in the case at bar by the dissenting opinion of Judge San-
born.

—1&—

In the case of Rubber Co. vy. Goodyear, 9 Wall. 802, 803.
this Court expressly held, not only that the defendant's
profits on the infringing structures may be estimated by the
Master where the defendant has confused the profits due to
the infringement with the profits of iis general business,
but, referring to the Master's finding, says, at page S083 of
9 Wall:

“Tie refused to allow the profits due to elements not
patented, which entered into the composition of the pat-
ented article. There may be cases in whieh such an
allowance would be proper. This is not one of them.
The manner in which the books of the Provident Com-
pany were kept rendered such an accounting impossible
as to the business done in their name.”

In other words, under the aforesaid decisions, even if. it
had been possible to have shown what proportion of the
profits made by this Respondent on its infringing trans-
formers was due to the form in which the Respondent clothed
the invention of claim 4 of the Westinghouse patent in its
infringing transformers, due to the alleged inyprovement
therein, the burden of proof was on the Respondent and not
on your Petitioner to show what proportion of the “single
profit” derived by Respondent from the sale of its infringing

transformers was due to such improvement,

Furthermore, the majority of the Court of Appeals in its
opinion, in the parts which we have just quoted in this peti-
tion, is wrong, as a matter of fact, in two important respects:
It is wrong in saying or implying that there was any depar-
ture from the patent in suit in the fact that the Respondent's
infringing transformers had “open spaces betircen the coils”.
for this feature of open spaces between the coils is not only
illustrated in Figure 2 of the patent in suit but the specitica-

—i9—~—

tion of the patent in snit distinctly says, at page 1, beginning
at line 65, of column 2, “Preferably also the primary and
secondary coils C! C* are separated from each other it a sine
ilar manner’, this sentence ‘immediately following the pre-
vious sentence of the same patent beginning at line 62, which
says: “Lh may be sufficient in other instances lo bleck the
group of plates apart al intercals instead. of ertending the
tnbes the entire length.”

The majority opinion of (he Court of Appeals is also wrong
in stating in this ease, in the last sentence of its opinion
hereinbefore quoted, that the invention of claim 4 of the
patent in suit: is not generally for a circulatory system
throughout the heat producing parts of the transformer. On
this record and in view of the estoppel arising on the record,
on account of the things found and decreed in the Carbide
ease, by which the answer admits the Respondent: is bound,
the U.S. Cirenit Court of Appeals for Second Cireuit in
the Carbide case had found (see pages 197 and 498 of 117
Fed.) that:

“Phis claim’ (claim £ of the Westinghouse patent in
suit) “covers such an inclosing case as will confine the
non-conducting fluid, and such open spaces in the core
as will permit the cirentation of the liquid through them.
Westinghouse, then, wes the first to patent such an air:
tight, closed mne” * + * * “me these circum.
stances, the patentee seems to he entitled to claim the
means by which the external and internal surfaces of
the heat-producing parts of a converter were cooled, by
such an arrangement and separation of parts as would
permit the eirenlation about them of oil, and the means
for the retention of said oil within and about said sur-
faces, whereby the heat from the oil radiated to the
surrounding air.”

The decision of the majority of the Court of Appeals in
this respect pays little heed to the rule laid down by this

etd

lion

Court in respect to combination claims and thus stated in
Cantrell vy. Wallick, 117 U.S. 694:

“The first defense is based on the theory that a patent
cannot be valid unless it is new in all its elements as
well as in the combination, if it is for a combination.
But this theory cannot be maintained. If it were sound
no patent for an improvement on a known contrivance
or preeess could be valid. And yet the great majority
of patents are for improvements in old and well known
devices, or on patented inventions, Changes in the con-
struction of an old machine which increase its usefulness
are patentable. Sevmoure v. Osborne, 11 Wall. 316. So
anew combination of known devices, whereby the effeet-
iveness of a machine is increased, may be the subjeet
ofa patent. Loom Co, y. Higgins, 105 U.S. 580."

It also would seem to ignore completely the binding force
and effect of the things found and decreed by the Cirenit
Court and Court of Appeals in the Carbide case, by whieh
the Answer in this case specifically admits that this Re-
spondent is hound.

“The matters and things found and decreed in said suit
against the Union Carbide Company” (which) “are res ad.
judicatac against this defendant.” as Paragraph VII of the
Respondent's answer in the ease at ba ‘admits (Reeord 12-13),
are the following:

(1) That the letters patent in suit are goml and valid.

(2) That George Westinghouse, Jr. was the inventor of
the invention claimed by claim 4 of said letters patent.

(3) That the defendant in that case. which had used trans-
formers precisely like the one illustrated at page 168 of the
record in this case, made and sold to if by Waener Electric
Manufacturing Company (this Respondent), had infringed
claim 4 of said patent.

— =

(4) That by reason of this invention “hy the arrangement
of various known elements, to wit, dividing the iren into sec-
tions and separating the coils, thereby increasing the surface
ever which heat dissipation in the core and coils may he ear-
ried on, aided by oil as an insulating material, and adding
an inclosing case, a new combination, producing a new and
beneficial result, not before attained, is” (was) “contributed
to the art’, by Mr. Westinghouse. “By this arrangement
of the parts” (the combination claimed by claim 4) “a su-
periority was undoubtedly obtained, in durability, efficieney
and cheapness over prior transformer devices.”

(5) That said “invention of Mr. Westinghouse, consist-
ing of a combination of elements, is” (was) “a distinctive step
forward in the progress ¢° electrology, in the light of the tir-
mediate recognition which it received by the public.” (Italics
ours.)

(6). That the public instantly recognized the merit of the
invention the subject-matter of said claim 4 as an improeve-
ment in the prior art.

(7). That “the proofs show that the maximum of large-
size, dry transformers— transformers without sectional open-
ings in the core and witheut the use of oil as an insulating
material—is 10 kilowatts. or 18 te Tf herse power, while
that of the large-size transformers of the Westinghouse pat-
ent in suit is 500 kilowatts, or from 650 to TOO horse power,”
all this being due to the invention claimed by claim 4 of the
patent in suit.

(8) That in none of the devices of the prior art “is found
the combination of clements couteined in the We stinqhouse
patent in suit” and claimed by claim 4 thereof.

(The above are among the essential things found and de-
ereed by the Circuit Court in the Carbide case. The follow-

—29—

ing are among the things found by the U. 8. Court of Appeals
for the Second Circuit in the Carbide case, confirming the
things fond and decreed by the Circuit Court in that case.)

(9) That “the claim here in suit (claim 4) was filed with
the original application, and it was never cancelled or
modified.”

(10) That said claim 4 is for a new and most useful in-
vention.

(11) “This claim covers such an inclosing case as will
confine the non-conducting fluid, and such open spaces. in
the core as will permit the circulation of the liquid through
them. Westinghouse, then, was the first to patent such an
air-tight, closed converter.”

(12) “It embodies at least a combination radically modi-
fied from those of the prior art, in order to adapt it to a novel
purpose,”

(13) “In these circumstances the patentee seems to be
entitled to claim the means by which the external and _ in-
ternal surfaces of the heat-producing parts of a converter
were cooled, by such an arrangement and separation of parts
as would permit the circulation about them of oil, and the
means for the retention of said oil within and about said sur-
faces, whereby the heat from the oil radiated to the surround-
ing air.”

(14) “The practical result of the invention in suit” * * *
“was to so increase the capacity of the couverters that, while
a dry converter, cooled by the natural circulation of air, is
limited to 10 kilowatts, the oil-insulated converters of the
patent in suit are commercially serviceable up to 500° kilo-
watts.”

—

(15) “The decree” (of U.S. Cirenit Court in the Carbide
suit) “is affirmed as to patent No, 366,362" (the Westinghouse
patent in suit).

Now, the only diiference between the Respondent's infring-
ing transformer accounted for before the Master and the in-
vention actually claimed by claim 4 of the patent in suit
(that difference being a slight modification adopted long after
the date of the patent in suit) is, that in addition to having
the open spaces in the core and everything else called for by
claim 4, Respondent's infringing transformers also had some
space between the inner surface of the core and the outer
surfaces of the coils, through which space additional op-
portunity was given for the circulation of oil in and about
the parts, thus carrying out, perhaps to a greater degree than
by the identical means specitied in claim 4, the very object of
the invention claimed by claim 4. The patent in suit: states
(page 1, lines 16, ete.) that the object of the invention is “Ce
provide a simple and efficient conrerter which will not be-
come overheated 2 and also (page 1, lines 80, ete.) that the
liquid cireulates through “l/r intervening spaces of the coils
and plates.” Furthermore, the fact that the Respondent in
its infringing transformers also had the additional feature of
having spaces between the coils and the cove, if said feature
was really an improvement on the invention claimed by claim
4. such a construction was cortainly in harmony with that
invention as defined by the (6° Court of Appeals for the
Second Circuit in the Carbide case, at page 498 of 117 Fed.,
as follows:

“In these circumstances, the patentee seenis to he en-
titled to claim the means by which the external and in-
ternal surfaces of the heat-producing parts of the con
verter were cooled, by such an arrangement and separa-
tion of parts as would permit the circulation about them
of vil, and the means for the retention of said oil within

—24—

and about said surfaces, whereby the heat from the oil
radiated to the surrounding air.”

Clearly, then, the burden of showing what if any of the
profits made by the Respondent in the sale of its said infring-
ing transformers were due to this modification (improvement,
if you will) of the invention claimed by claim 4 of the patent
in suit was on the Respondent and not on your Petitioner, as
pointed out by the decisions particularly referred to in our
brief accompanying this petition, notably the decision of this
Court in Elizabeth v. Pavement Co., 97 U.S. 141.

The vice in the majority opinion of the U.S. Court of Ap-
peals for the Eighth Circuit and which vice conflicts with the
settled rule in analogous cases laid down by the decisions of
this Court and followed by the U.S. Courts of Appeal in
other Circuits, as pointed out more particularly in our ae-
companying brief, lay:

(a) In holding that this slight modification in the in-
fringing transformers (which transformers admittedly other-
wise embodied the entire invention claimed by claim 4 of the
patent in suit) was not, after all, within the invention of
claim 4 as defined by the U.S. Court of Appeals for the
Second Circuit in the Carbide case.

(b) That even if it be granted that that modified form of
your Petitioner’s patented invention was a betterment or in-
provement, nevertheless the burden of proof was not on your
Petitioner but on the contrary on the Respondent to show
what part of the Respondent's profits made on those infring-
ing transformers was due to that improvement; and it was
fer this Respondent to separate out those profits due to that
addition or betterment (if it was an addition or betterment)
from the general profits made by Respondent on the infring=
ing transformers accounted for before the Master. This
thing, however, Respondent did not even pretend to do.

—25—

This cardinal error is the basis of the conclusion by virtue
of which the majority of the Court of Appeals for the Kighth
Circnit held that the Master's report and finding should be
set aside.

But for these errors in its premises and consequently in
its conclusion, it is manifest that the majority of the U. 8.
Court of Appeals for the Eighth Cireuit would have agreed
with Sanborn, Circuit Judge, reversed the decree of the Cir-
cuit Court as to the accounting, and confirmed the Master’s
report, thus giving your Petitioner a decree for $132,433.35,
as recommended by the Master in his report filed July 29,
1907, plus interest from the date of said report, in accord:
ance with the decision of this Court in Tilghman vy. Proctor,
125 U.S. 136, 161.

Therefore your Petitioner believes that the aforesaid
majority opinion of the U.S. Court of Appeals for the Eighth
Cirenit aflirming the decree of the U.S. Circuit Court for the
Eastern Division of the Eastern Judicial District of Missouri,
thus depriving your Petitioner of a substantial reeovery on aec-
count of the profits made by the Respondent in the manu-
facture nnd sale of its infringing transformers accounted for
before the Master, is erroneous and in conflict with the deei-
sions of this Court in analogous eases, as well as in conflict
with the decisions of the U.S. Circuit Courts of Appeal in
other Cirenuits; and has resulted in depriving your Petitioner
of property rights granted to it by the Statutes of the United
States; and that the patent laws, as construed in the case at
bar by the majority opinion of the UL Ss. Conre of Appeals for
the Eighth Cireuit, contrary to the opinion of this Court
rendered by Chief Justice Marshall in the case of Grant v.

Raymond, 6 Peters *

P42) have not been construed so as “to
execute the contract” (the patent) “fairly on the part of the
United States.”

= =

We also respectfully submit, for the reasons. stated
in this petition for certiorari and more fully amplified
in our brief in support of the same, that the majority opinion
of the Court of Appeals for the Eighth Circuit in the ease at
bar, in a matter of gravity, where a large amount is involved,
establishes a precedent which must necessarily aifect almost
incaleulable values in the way of property rights under letters
patent for inventions,

Wherefore your Petitioner respectfully prays: That a writ
of certiorari may be issued out of and under the seal of this
Court, directed to the United States Circuit Court of Appeals
for the Eighth Circuit, commanding the said Court to certify
and send to this Court, on a certain day to be therein desig-
nated, a full and complete transeript of the record of all pro-
ceedings of the said Court of Appeals in the said case therein,
entitled Westinghouse Electric & Manufacturing Company,
Appellant, v. Wagner Electric Manufacturing Company,
Appellee, in Equity No, 2857, to the end that the said case
may be reviewed and determined by this Court as provided in
Section 6 of the Act of Congress entitled “An Act to establish
Circuit Courts of Appeal and detine and regulate in certain
cases the jurisdiction of the Courts of the United States. and
for other purposes, approved Mareh 3, 1901.7 and that your
Petitioner may have such other or further relief or remedy
in the premises as to this Court may seem appropriate and in
conformity with the said Act.

And your petitioner will ever pray.

THOMAS B. KERR,

PAUL BAKEWELL,
Solicitors and of Counsel for Petitioner,
Westinghouse Electric & Manufacturing
Company.

ain

CERTIFICATE OF COUNSEL.

I certify that I am Solicitor and of counsel for the Peti-
tioner herein, Westinghouse Electric and Manufacturing
Company; that in accordance with the request of said Peti-
tioner the foregoing petition has been prepared; that the
allegations contained in said petition are true, to the best of
my knowledge and belief; and that said petition is, in my
opinion, well-founded in law as well as in fact.

PAUL BAKEWELL.

No. 8 179°

Supreme Court of the United States,

OCTOBER TERM, 1909.

In Equity. JAMES H. McK

WESTINGHOUSE ELECTRIC & MANUFACTURING
COMPANY, PETITIONER,
vs.
WAGNER ELECTRIC MANUFACTURING COMPANY,
RESPONDENT.

Baier ON BEHALF OF PETITIONER FOR WRIT OF CERTIORARI TO
THE UNITED STATES CiRCcUIT COURT OF APPEALS
FOR THE EIGHTH CIRCUIT.

THOMAS B. KERR,

PAUL BAKEWELL,
Solicitors and of Counsel for Petitioner,
Westinghouse Electric & Manufacturing

Company.

Supreme Court of the United States.

OCTOBER TERM, 1909.

In Equity.

WESTINGHOUSE ELECTRIC & MANUFACTURING
COMPANY, PETITIONER,
VS.
WAGNER ELECTRIC MANUFACTURING COMPANY,
RESPONDENT.

BRIEF ON BEHALF OF PETITIONER FOR WRIT OF CERTIORARI TO
THE UNITED STATES CIRCUIT COURT OF APPEALS
FOR THE EreutTu Circuit.

The patent in suit, No. 366,362, dated July 12, 1887, is for
“Electrical Converter.” Claim 4 of said patent is the only
claim which is for the electrical converter combined with an
inclosing case and a non-conducting fluid, such as oil; it is
as follows:

“4. The combination, substantially as described, of
an electric converter constructed with open spaces in
its core, an inclosing case, and a non-conducting fluid or

ead

5 een Bp SO a!

-_

gas in said case adapted to circulate through said spaces
and about the converter.”

This claim is for a new combination of elements which per-.
formed a function and produced a result never before ac-
complished, making it possible to increase the capacity of the
electrical transformer (converter) from 10 kilowatts, or 13
to 14 horse power, to 500 kilowatts, or 650 to 700 horse power,
These results were due to the invention claimed by said claim
4, because that invention, for the first time in the art to which
it relates, set forth and claimed the means by which the ex-
ternal and interna! surfaces of the heat-producing parts of
the transformer (converter) were cooled, by such an arrange-
ment and separation of parts as would permit the circula-
tion about them of oil, and the means for the retention of the
oil within and about said surfaces, whereby the heat from
the oil radiated to the surrounding air. In the language of
this Court in Elizabeth v. Pavement Company, at page 141
of 97 UL S., this invention “iras a complete thing, consisting
of a certain combination of elements, and the defendant” (in
the infringing transformers accounted for) “used it as such—
the whole of it.”

As is well-settled, claims in letters patent are each “in-
dependent inventions and in the nature of separate and
cistinet patents.” Leeds & Catlin v. Victor Talking Machine
Co., ; U.S. 319; Russell v. Place, 94 U.S. 609.

The present suit, as well as the suit against Respondent's
vendee, the Union Carbide Company (112 Fed. 417 and 117
Fed. 496), related only to sal claim 4 of the said Westing-
house patent.

Paragraph VI of the Bill in this case (Record pp. 3-4)
pleads the history of the suit against the Union Carbide Com-
pany, and that the U. S. Cireuit Court for the Northern

=

District of New York found claim 4 valid and infringed, and
that the U. S. Circuit Court of Appeals for the Second Cir-
cuit, composed of Hon. William J. Wallace, Hon. E. Henry
Lacombe, and Hon. William K. Townsend, Circuit Judges,
affirmed the said findings and decree of the Circuit Court;
and Section VI. of the Bill (Record, pp. 4-5) concludes as
follows:

“That the devices involved in the said suit, and which
were used by the Union Carbide Company, the defend-
ant therein, were manufactured and sold by the Wagner
Electric Manufacturing Company, the defendant herein,
and that said suit against the Union Carbide Company
was defended by said Wagner Electric Manufacturing
Company and was areued by its counsel, and that the
matters and things found and decreed in the said suit
against the Union Carbide Company are res adjudicata
ageinst the said Wagner Electric Manufacturing Com-
pany.”

The Respondent’s Answer, in sections VI. and VII.
(Record pp. 11-12), specifically admits the charges in para-
graph VI. of the Bill, and paragraph VIII of the answer
(Ree. pp. 12-13) is in the following words:

“This defendant admits that the device involved in
said suit and used by the Union Carbide Company, the
defendant therein, was manufactured and sold by this
defendant, and that said suit against the said Union
Carbide Company was defended by this defendant and
was argued by its counsel, and that the matters and
things found and decreed in said suit against the Union
Carbide Company are res adjudicatae against this de-
fendant.” (Italics ours.)

The record in the Carbide case, including the opinion of
Judge Hazel in the Cireuit Court, which opinion is also re-
ported in 112 Ped. 417-423, was offered in evidence by Re-

oan

spondent (Record, p. 30); and by stipulation in this case
(Record, p. 443) the opinion of the U. 8. Court of Appeals
for Second Circuit, as the same is reported in 117 Fed. 495-
ov1, is before this Court.

The said decree, taken from said Union Carbide record
which was offered in evidence by respondent (Ree. q. 30), is
in the following words:

“At a Stated Term of the United States Cirenit Court
for the Western District of New York, held in the United
States Court and Post Office Building in the City of
Buffalo, on the 22nd day of November, 1901,

Present—Hon. John R. Hazel, Judge.

Westinghouse Electric and Manufacturing Company,
Complainant,
No. 6854. vs, In Equity.
Union Carbide Company, Defendant.

This cause having been commenced by the filing of the
bill of complaint and by service of subpoena upon the de-
fendant; and the said defendant having duly appeared
and having answered the said bill of complaint ; and issue
kaving been joined; and said cause having come on for
final hearing upon the pleadings and upon proofs taken
on behalf of both parties; and argument having been
made by Thomas B. Kerr, Esy., for the complainant, and
by A. C. Fowler, Esq., for the defendant, and due con-
sideration having been taken of said arguments, plead-
ings and proofs, and of briefs filed on behalf of both par-
ties,

Now, therefore, on motion of Kerr, Page & Cooper, so-
licitors for the complainant, it is

Ordered, adjudged and decreed that claim 4 of Letters
Patent of the United States, No. 366.362, granted to
George Westinghouse, Jr., on July 12, 1887, is good and
valid in the law; that the said George Westinghouse was

bf

ens

the original, true and first inventor of the improvements
set forth in said claim 4; that the complainant, Westing-
house Electric and Manufacturing Company, a corpor-
ation organized and existing under and by virtue of the
laws of the State of Pennsylvania, is entitled to the ex-
clusive right in and to the said Letters Patent, and in
and to the invention described and claimed in claim 4
thereof; that the defendant, Union Carbide Company,
a corporation organized and existing under the laws of
the State of West Virginia, and having a regular and
established place of business within this district, has
within this district infringed upon claim 4 of Letters
Patent No. 366,362; that the said defendant has violated
the exclusive rights of the complainant under said claim
4 of Letters Patent No. 366,362; that the complainant do
recover out of the said defendant the gains and profits
by it made and the damages sustained by the complain-
ant by reason of such infringement, as well as the costs
and charges of this suit to be duly taxed; that it be re-
ferred to “Harry L. Taylor, Esq., residing ‘at Buffalo, N.
Y., Master of this Court, to ascertain the : amount of such
eains and profits and the damages sustained by said com-
plainant by reason of such infringement ; and

It is further ordered, adjudged and decreed, that the
complainant on such accounting have the right to cause
an examination to be made of the defendant, Union Car-
bide Company, and any of its officers, agents, servants,
attorneys, workmen and employees, ore tenus or other-
wise, and also to cause the production of the books, vouch-
ers and documents of the said defendant, and that the
said defendant attend by its officers, agents, servants, at-
torneys and employees, before the Master from time to
time within this district as the said Master shall direct ;
and

It is further ordered, adjudged and decreed that an
injunction be issued in due form of law against the
defendant Union Carbide Company, permanently _ re-
straining it, its officers, agents, servants, attorneys, work-

—

men and employees, and each and every of them, from
making, constructing, vending, using or putting into
practice the said invention or improvement recited or
specified in Claim 4 of Letters Patent No, 366,362, or in
any manner infringing upon the claims of said patent,
or any of them, or upon the rights of the complainant
thereunder.

JOHN R. HAZEL,
U.S. Judge.

Approved: ee? a

= =

not know anything about them.” The Master then replied
on the record: “I see of course that will be necessary.”

However, although those inventories were evidently in the
possession of the respondent and accessible to the witness,
ihe subject was dropped there by the respondent's counsel,
and the inventories were never produced.

It was under these circumstances and with these diffi-
culties that the Master was compelled to resort to estimates
of respondent's profits; and it may be noted here that the
Master expressly finds in his findings of fact, at pages 376
and 377 of the record:

“Phat the defendants admitted in the evidence of the
witness, Layman, p. 334” (the Master here refers to the
typewritten pages of the testimony then before him,
and the reference now should be Record 615 and 616)
“that it had in its vaults inventories made annually or
semi-annually, referred to in the testimony of Johan-
nesen, aud omitted to produce the same in evidence.”

In view of this record and the findings of the Master we
are at a loss to understand how the majority opinion con-
tains this statement:

“We do not think the mere failure to keep separate
the profits derived from the infringing device, under
the circumstances disclosed by the record, warrants the
application of the equity rule, that where one wrong-
fully mingles his goods with those of another so that
they are indistinguishable from the mass, the party in-
jured is entitled to take the whole.”

This is in marked contrast to the unanimous decision of
the U. 8. Court of Appeals for the Sixth Circuit in the case
of Dowagiac Mfg. Co. v. Superior Drill Co., 162 Fed. 479,
481, where the rule laid down by this Court in Rubber Co.
vy. Goodyear, 9 Wall. 802, 808, 804, Callaghan v. Myers, 128

a ae

U. 8S. 617, and other similar cases, is applied, the U. §,
Court of Appeals for the Sixth Circuit in that case holding,
in conformity with the decisions of this Court, that where
the infringement was deliberate and intentional the defend.
ant cannot avoid liability for profits by so confusing the
profits made on the infringing business with the profits made
on its general business that the profits made on the infring-
ing articles could not be separated from the profits on its
entire business.

It must also be remembered that the Answer in the case at
bar (Record 13) expressly admits that respondent had been
notified of your petitioner's letters patent and of the infringe.
ment, and that nevertheless it had infringed by making, using
and selling devices or apparatus embodying the invention
or discovery claimed by claim 4 of the letters patent in suit.

Under the evidence before the Master and the findings
of the Master and the decisions of this court in the cases
hereinbefore cited, the Master was clearly warranted, under
the circumstances detailed above, in estimating the respond-
ent’s profits on the data furnished him by the witnesses
Johannesen and Foster, in view of the attitude taken by
the respondent's Treasurer and General Manager, Mr. Lay-
man; and, therefore, we are not able to understand the
following sentence in the opinion of the majority of the
Court of Appeals, in view of the record in this case:

“There is no evidence tending to show that the appel-
lant’s failure to show how much of the appellee’s profii
resulted from the infringed combination and how much
from the presence of the other elements of the infring-
ing transformer, was due to any refractory or deceit-
ful conduct on the part of the appellee, such as destruc-
tion or hiding of the books, or refusal to produce them
for the use of the appellant.” (Italies ours.)

_ =

We have already shown, under the decisions of this Court,
that even if the infringing transformers did have open spaces
between the coils and the core, in addition to having the
precise combination called for by claim 4 of the patent in
suit, the burden of proof was on the respondent and not on
your petitioner to show what proportion of the profits made
by the respondent was due to this difference. See Elizabeth
y. Pavement Co., 97 U. S. 141. But the trouble was that
the deceitful and refractory conduct on the part of the wit-
ness Layman and the whole attitude of the respondent on
this accounting, as the record shows and as the Master found,
proved clearly that the respondent sought to prevent all the
facts as to the profits made by the respondent on
these infringing transformers being adduced before the
Master; and that Layman stated most positively that the
profits made by the respondent on the infringing trans-
formers could not be separated from the profits made in its
general business. Therefore, under such circumstances, the
Master was left to estimate the profits on the data before
him.

THE MAJORITY OF THE COURT OF APPEALS DID
NOT ATTACH SUFFICIENT WEIGHT TO THE
FINDINGS OF THE MASTER, AND FAILS UT-
TERLY TO SHOW THAT THE FINDINGS OF
FACT MADE BY THE MASTER, AS WELL AS
HIS CONCLUSIONS OF LAW, ARE ERRONEOUS.

This of itself is in direct conflict with leading decisions
of this Court. In the case of Warren v. Keep, 155 U. §. 265,
this Court affirmed the decision in Keep v. Fuller, reported
in 42 Fed. 897, in which case Judge Coxe, Circuit Judge,
said :

“Tt is wise to remember at the outset that the Court
is not now to decide de novo the various questions pre-

—_ oN

sented on the accounting. The present investigation
is contined simply to the question—Did the Master
make any mistake which requires the setting aside of
his report? He stands as the representative of the
Court, and is better able by far, than one who only reads
the testimony froma printed book, to tell what witnesses
are entitled to credit, and where the truth lies in the
controversy before him. His findings are prima facie
correct, and the burden of showing error is upon the
party who excepts. If the proof is ‘suflici lent to sustain
the Master's findings it is enough. The investigation
terminates at this point, even though the Court, sitting
in the Master's place, might, upon similar evidence,
reach a different result. The conelusions of the Mas.
ter, depending upon the weighing of conflicting testi-
mony, have every reasonable presumption in their favor,
und are not to be set aside or modified unless there
clearly appears to have been error or mistake on his
part.’ Tilghman v. Proctor, 125 U. S. 136, 149, 8 Sup.
Ct. Rep. 894; Callaghan v. Myers, 128 U. 8, es 666,
9 Sup. Ct. Rep. 177; Kimberly v. Arms, 129 U. 8. 512,
525, 9 Sup. Ct. Rep. 355; Central T. Co. v. Texas R. Co.,
52 Fed. Rep. 448; Welling v. La Ban, 34 Fed. Rep. 41,
and cases cited. "Tested by the rule of these cases, it
cannot be said that the Master's findings of fact are er-
roneous, except, perhaps, in a few particulars which
will be referred to hereafter.”

A Master appointed to take an accounting is a judicial
officer, representing the Court in this work, and his findings
are and should be entitled to the greatest weight; they are
not to be lightly set aside and will not be set aside except in
the case of a very clear mistake. In regard to any doubtful
matters the presumption will be in favor of the Master's re-
port. The courts recognize that the findings of a Master are
entitled to even greater weight than the findings of a jury.
In the case at bar, the Special Master appointed by the Court
is not only a lawyer, but a man of very extensive experience

= =

as a Master in Chancery in considering and weighing evi-
dence; and he has had an advantage which the Court cannot
have, for he has seen the witnesses and had an opportunity of
observing their appearance, attitude and manner on the stand,
of hearing their testimony and of interrogating each witness
himself.

As to the weight which should be given to the Master's re-
port in such a case as this, this Court says in Tilghman v.
Proctor, 125 U. 8. 149-150:

“We are then brought to a consideration of the excep-
tions taken to the Master's report in matters of fact,
affecting the accuracy of his conclusions in respect to the
amount of those profits, gains and savings. In dealing
with these exceptions, the conclusions of the Master, de-
pending upon the weighing of conflicting testimony, have
every reasonable presumption in their favor, and xre not
to be set aside or modified unless there clearly appears
to have been error or mistake on his part. Medsker v.
Bonebrake, 108 U. 8. 66; Donnell v. Columbian Ins. Co.,
2 Sumner, 366, 371; Mason v. Crosby, 3 Woodb. & Min.
258, 269; Paddock v. Commercial Ins. Co., 104 Mass.
521, 5381; Richards v. Todd, 127 Mass. 167, 172.”

In Crawford v. Neal, 144 U. 8. 585, this Court holds as
follows:

“The findings and conclusions of a Master upon con-
flicting testimony are to be taken as presumptively cor-
rect, and unless some obvious error in the application
of the law has intervened, or some serious or important
mistake has been made in the consideration of the evi-
dence the decree should stand.”

To the same effect is Furrer v. Ferris, 145 U. 8. 132, citing
Kimberly v. Arms, 129 U. 8. 512.

In the case at bar the record shows that the master had
abundant warrant for his findings of fact, while the decisions

—

of this Court support him in his conclusions of law and show
that the majority opinion of the Court of Appeals for the
Eighth Circuit in the case at bar is in conflict with the deci-
sions of this Court in analogous cases.

GARRETSON V. CLARK, 111 U. S. 120.

This case, utterly inapplicable to the facts in the case at
bar, is cited by the majority opinion of the Court below on
the following proposition:

“The patentee must in every case give evidence tending
to separate or apportion the defendant’s profits and the
patentee’s between the patented feature and the un-
patented features, and such evidence must be reliable
and tangible, and not conjectural or speculative.”

The trouble is that that proposition, while sound, does not
apply to the facts in the case at bar. In the case at bar, un-
like the case of Garretson y. Clark, where the patent was for
a mere feature in the mop head, the invention is for a com-
plete combination in itself—for a wholly new thing as an
entirety—, which combination, as an entirety, the defendant
has used. This tribunal has repeatedly construed its decision
in the case of Garretson y. Clark and held that the rule there
laid down does not apply to a case like the one at bar, where
the invention in question is, as an entirety, “a complete com-
bination in itself.”

In the case of Hurlbut v. Schillinger, at page 472 of 130
U. 8., this court says:

“In Elizabeth v. Nicholson Pavement Co., 97 U. 8.
126, 139, it is said that ‘when the entire profit of a busi-
ness or undertaking results from the use of the invention,
the patentee will be entitled to recover the entire profits,
if he elects that remedy.’ This language was quoted
with approval in Root v. Railway Co., 105 U.S. 189, 203.
As in the case of the Nicholson patent, so in the case of

—59—

the Schillinger patent, the pavement was a complete com-
bination in itself, differing from every other pavement,
and the profit made by the defendant was a single profit
derived from the construmtion of the pavement as an en-
tirety. Callaghan v. Myers, 128 U. S. 617, 665, 666.

Within the decision in Garretson Vv. Clark, 111 U. 58.
120, the proof in this case is satisfactory, that the entire
value of the defendant’s pavement, as a marketable ar-
ticle, was properly and legally attributable to the in-
vention of Schillinger.

The decree of the Circuit Court is affirmed.”

So, in the case of Crosby Valve Co. vy. Safety Valve Co.,
where the claim was on the improved valve as an entirety,
and where the defendant had used that valve plus some
features which he claimed as improvements, this Court says,
at page 453 of 141 U. S.:

“In regard to the holding by the master and the court
that all the profits of the defendant from the valves it
made and sold were to be attributed to the employment
by it of the improvement covered by the patent of 1866,
we hold that, in view of what was determined in the
former opinion of this court, and on the whole case, the
safety-valves known to the art and open to be used by
the defendant would not do the same work as the Richard-
son invention covered by the patent of 1866, or have any
commercial value; and that, within the case of Garret-
son vy. Clark, 111 U. S. 120, it appears, by reliable and
satisfactory evidence, that the profits made by the de-
fendant are to be caleulated in reference to the entire
valve made and sold by it, for the reason that the entire
value of that valve, as a marketable article, is properly
and legally attributable to the patented feature of the
patent of 1866.”

Thus this Court by its own decisions has distinguished
eases like the one at bar from cases such as Garretson Vv.
Clark.

onal

In the case at bar, however, as had been antecedently found
by the U. 8. Circuit Court and Court of Appeals for the
Second Circuit in the Carbide case, the invention the sub-
ject-matter of claim 4 was for a new converter, which ae-
complished marvelously improved results and resulis which
had never been accomplished by anything in the prior art.

Furthermore, the Master in this case expressly found
(Ree., 375), in harmony with the things found and decreed
in the Carbide case, that the invention of claim 4 constituted
an entirely new transformer, complete in itself; that this
entirely new transformer, complete in itself, was infringed,
in its entirety, by the respondent, in all of its infringing
transformers; and that the entire commercial value of the
infringing transformers so manufactured and sold by the re-
spondent, at and during the time covered by the accounting,
was due to this invention.

In the case of Seymour y. MeCormick, 16 Howard 4890, a
rule similar to that laid down in Garretson vy. Clark, 111 U.
S. 120, was stated, because in the case of Seymour v. Me-
Cormick the patent was only on the driver's seat of the mow-
ing machine, while the Master had allowed profits on the en-
tire mowing machine including the driver’s seat.

In the case at bar, however, as in the case of Hurlbut v.
Schillinger, 130 U. S. 471, 472, Elizabeth v. Pavement Co.,
97 U.S. 126, and Crosby Valve Co. v. Safety Valve Co., 141
U. S. 453, the invention in question is for an improved
structure as an entirety or unit and the defendant had used
that entirety or unit, and therefore the complainant was en-
titled to recover all the profits which the defendant had
made by using this invention as an entirety, or what might
be reasonably estimated as the profits made by the defendant.

a

In the case at bar, Judge Sanborn, Circuit Judge, in his
dissenting opinion recognizes this very distinction and that
the rule laid down by this Court in Garretson v. Clark,
Seymour Vv. McCormick, and similar cases has no appliea-
tion to the case at bar; but that on the contrary the rule laid
down by this Court in Crosby Valve Co. v. Safety Valve Co.,
141 U. S. 448-449-454, and Hurlbut vy. Schillinger, 130 U. 8.
456, and similar cases, is applicable.

The Westinghouse invention wis i remarkable achieve-
ment. The progress of the electric art was seriously impeded
by the failure of the converter to keep up with the develop-
ment in size and capacity of the generator on one side and
that of the motor on the other. The capacity of generators
and motors had reached into hundreds of kilowatts, but the
maximum capacity of commercial converters was 10 kilo-
watts. This limitation was the result of a natural law which
seemed to interpose an insurmountable barrier to further ad-
vance, It ix well stated in the opinion of the Court of Ap-
peals in the Union Carbide case (117 F. R. 498), as follows:

‘But when the art began to call for converters eX-
ceeding 10 kilowatts in capacity, it was found, as stated
by the expert for complainant, ‘that the capacity of the
transformer increased as the cube of the linear dimen-
sions, and the heat, if the amount of loss was held sta-
tionary, would increase in like proportion, while the
radiating surface would inerease only as the square of
the linear dimensions.’ ”

The effect of the heat thus produced was to burn out the
insulation between the coils in interior of the core and
short cireuit the coils, thereby destroying the converter:
while a prolonged high temperature, although not sufficient
to burn the insulation, would eradually impair if and pro-
duce ageing of the iron core and thereby reduce the efficiency
of the converter and materially shorten its life.

sili.

Prior attempts to solve the problem had been directed to
the prevention of the generation of heat, but Mr. Westing-
house recognizing that this was inevitable in the use of large
converters with heavy currents, turned his face the other way
and sought for means by which the heat developed, whatever
its amount, would be dissipated without injury to the con-
verter. This he did by constructing the converter with open
spaces in or inside the massive iron core and inclosing the
converter so constructed in a tight metallic case filled with
oil, whereby the oil obtained access to the coils and inner sur-
faces of the core, s> that upon the development of heat the
convection currents set up in the oil by a natural law should
extract the heat from the heated inner surfaces and convey
it to the external case which was of sufficient capacity to
radiate it to the atmosphere.

The result of the invention was to increase the capacity of
commercial converters from 10 kilowatts up to 500. kilo-
watts. It was therefore an invention of high grade, an ab-
solutely new combination, performing a new function, mak-
ing a distinct advance in the art, and was useful only in its
entirety. It belonged to the same class as the inventions
in Loom Co. vy. Higgins, Elizabeth v. Pavement Co., Hurl-
but v. Schillinger and Crosby Valve Co. y. Safety Valve
Co., and not to that of the invention in Garretson v. Clark,
and is entitled to the broad rules governing the construction
of claims and determination of damages in cases relating
to inventions of its class.

That the rule laid down by this Court in Garretson y.
Clark, 111 U. 8. 120, does not apply in a case like the one
at bar, or in cases like Elizabeth v. Pavement Co.. 97 U. §.
126, Hurlbut v. Schillinger, 130 U. S. 471, 472, Crosby Valve
Co, v. Valve Co., 141 U. 8. 453, where the invention claimed

aes

—

is for a combination as a unit or as an entirety, in which
the parts co-operate, thus producing a new or improved re-
sult, resulting in an ideal, patentable combination w ithia
the meaning of this Court’s decisions in Cantrell v. W allick,
117 U. S. 694, 695, and Leeds & Catlin v. Victor Talking
Machine Co., 213 U. 8. 319, is also the rule recognized and
applied by U. S. Courts of Appeals in other circuits, ap-
pears from the following cases:

In Yesbera v. Hardesty Mfg. Co., 166 Fed. 124, which in
its facts is similar to the case at bar, the Court of Appeals
for the Sixth Circuit, after referring to the case of Garretson
v. Clark, 111 U. 8S. 120, says:

“The unanimity with which infringers seek the shelter
of that case is something remarkable,”

and then, following the — inte down by this Court in Hurl-
but v. Schillinger, 180 U. 471 and the other cases above
cited, decides:

“The rule that, where a patent is for an improvement,
to authorize the recovery of profits from an infringer,
the owner must separate or apportion the profits made
by defendant between the patented feature and the un-
patented feature, docs not apply to a patent for a com-
bination as a unit in which the parts co-operate.” (Ttal-
ies ours.)

So, also, in the Third Circuit, in Brookfield v. Novelty
Glass Co., the Cireuit Court holds (170 Fed. 830):

“Where the claim of a patent infringed is for a
combination of old elements, the iirention consisting
in the combination, the infringer is liable for all the
profits made by the use of the combination.”

So. in the case of Brennan Co. v. Dowagiac Mfg. Co,, 162
Fed. 472, the U. 8. Court of Appeals for the Sixth Circuit

— am

holds that where the invention is for a combination of ele-
ments, to accomplish an improved result, in which each ele-
ment, whether new or old, is an essential part of the inven-
tion, the infringer who has appropriated the combination as
a whole (the exact facts in the case at bar) is liable for the
profits made on the entire machine.

To the same effect is the decision of the U. S. Circuit
Court of Appeals for the Seventh Circuit in Orr & Locket
Co. v. Murray, 163 Fed. 54.

To the same effect is the decision of the U. S. Court of
Appeals for the Sixth Circuit in Dowagiace Mfg. Co. y. Su-
perior Drill Co., 162 Fed. 479.

To the same effect is the decision of the U. S. Court of
Appeals in the Second Cireuit in Wales y. Waterbury Co.,
101 Fed. 129.

So that the application, by the majority opinion of the
U.S. Court of Appeals for the Eighth Circuit in the case at
bar, of the doctrine in Garretson v. Clark to facts such as
exist in the case at bar is not only in conflict with the rule
laid down by this Court, in earlier and later decisions, where
the facts were similar to the facts in the case at bar, but is
in conflict with the rnle laid down by various U. 8. Courts
of Appeals in other circuits. Judge Sanborn’s dissenting
opinion states the rule anplicable to the facts in the case at
bar and is in harmony with the decisions of this Court in
similar cases, as well as in harmony with the rule established
in other circuits.

The dissenting opinion of Sanborn, Circuit Judge, in the
case at bar, so far as that dissenting opinion relates to the
question on the accounting, and, therefore, the questien pre-
sented by this petition for certiorari, is as follows:

=

DISSENTING OPINION OF SANBORN, CIRCUIT
JUDGE, ON THE ACCOUNTING FEATURE OF
THE CASE AT BAR.

“Turning to the question of damages for the infringement
by the manufacture and sale of defendant’s first converter
we are met by the claims that the complainant was entitled
to no recovery because the defendant improved the patentee’s
combination by adding open spaces between the plates and
the coils and no evidence was produced which separated
the profits attributable to that improvement from those de-
rived from the patented combination and because the de-
fendant did not stand in the relation of a trustee of the prof-
its for the patentee and owed it no duty to keep them sep-
arate or to account for them. There is some testimony in
the record that the coils became more overheated than the
plates and that the open spaces between the coils and the
plates tend to cool the former more efficiently than the
spaces between the plates. But the spaces between the
plates permit the oil to circulate between the plates against
and around the coils and the evidence of the superiority of
the spaces between the coils and the plates fails to per-
suade my mind that the latter constituted any real improve-
ment upon the mode described by the patentee. On the
other hand it leads me to believe that these new spaces and
this theory concerning them constituted a mere subterfuge
of the defendant conceived to avoid a just liability for its
infringement.

“Moreover, the measure of the complainant’s damages
was not the difference between the profits the defendant
would have derived from the complainant’s combination
and those it did derive from its form of it. It was the dif-
ference between the profits which the defendant derived

=

from the use of the complainant’s combination and those it
might have derived from the use of any other combination
then known and open to the public which would have pro-
duced an equally beneficial result, Tilghman v. Proctor, 125
U. S. 136, 146, and as there was no such combination or con-
verter the alleged improvement was immaterial.

“The indisputable facts that converters that have a capac-
ity between 10 kilowaits and 500 kilowatts were first made
serviceable and merchantable by the complainant’s combina-
tion and that all the converters made and sold by the de-
fendant were of this capacity and embodied the complain-
ant’s combination lie conceded at the foundation of this
case, Without the complainant’s combination whereby the
oil was circulated in a sealed case through the intervening
spaces of the coils and plates and around the converter the
defendant never could have used or sold one of its infring-
ing transformers. In the light of these facts the master
found that the entire commercial value of the infringing con-
verters manufactured and sold by the defendant during the
time concerned in the accounting was due to the complain-
ant’s combination. ‘The conclusions of the master, depending
upon the weighing of conflicting testimony, have every rea-
sonable presumption in their favor and are not to be set
aside or modified unless there clearly appears to have been
error or mistake on his part.’ Tilghman v. Proctor, 125
U. S. 136, 150; Medsker v. Bonebrake, 108 U. S. 66. And
the evidence not only fails to disclose to my mind any error
or mistake in the findings of the master, but compels my as-
sent to his conclusion.

“Is the complainant barred from the recovery of any of
the profits the defendant derived from its infringement be-
cause it failed to separate those derived from its combination

a

from those which the defendant otherwise derived from the
infringement?

“Jt is settled rule that ‘Upon a bill in equity by the owner
against infringers of a patent, the plaintiff is entitled to
recover the amount of gains and profits that the defendants
have made by the use of his ‘invention. * * * * The rea-
sons that have led to the adoption of this rule are, that it
comes nearer than any other to doing complete justice he-
tween the parties; that in equity profits made by the in-
fringer belong to the patentee and not to the infringer, and
that it is inconsistent with the ordinary principles and
practice of courts of chancery, either, on the one hand, to
permit the wrongdoer to profit by his own wrong, or, on the
other hand, to make no allowance for the cost and expense
of conducting his business, or to undertake to punish him
by obliging him to pay more than a fair compensation to the
person wronged. The infringer is liable for actual, not for
possible, gains. The profits therefore which he must ac-
count for are not those which he might reasonably have
made, but those which he did make, by the use of the plain-
tiff’s invention; or, in other words, the fruits of the advan-
tage which he derived from the use of that invention over
what he would have had in using other means then open to
the public and adequate to enable him to obtain an equally
uencficial result, * * * * A court of equity whieh has
acquired, upon some equitable ground, jurisdiction of a suit
for the infringement of a patent, will not send the plaintiff
to a court of law to recover damages, but will itself adminis-
ter full relief by awarding, as a substitute for legal damages,
a compensation computed and measured by the same rule
that courts of equity apply to the case of a trustee who has
wrongfully used the trust property to his own advantage.
Root vy. Railway Company, 105 U. S. 189, 214, 215.2 Tilgh-

— a

man v. Proctor, 125 U. S. 136, 144, 145, 146, 148. Let us
apply these rules to this case. The complainant is entitled
to the fruits of the advantage which the defendant derived
over what it would have had in using any other known con-
verter then open to the public and adequate to enable it to
obtain an equally beneficial result. There was no other
known converter open to the pubic which could be used to
produce the result obtained by complainant’s combination.
The complainant was consequently entitled to all the prof.
its and all the advantages derived from the defendant’s use
of the infringing machine. Crosby Steam Gauge Valve Com-
pany v. Consolidated Safety Valve Company, 141 U. 8. 441,
448, 449; Manufacturing Company v. Cowing, 105 U. 8.
253.

“The decisions present two classes of cases each governed
by its own measure of profits recoverable for an infringe-
ment. Where the patented device is a slight improvement
upon an existing and operative machine which accomplished
the same result without as with the patented improvement,
as in Garretson v. Clark, 111 U. 8. 120: where the patented
improvement was a slight change in the jaw of a well known
and operative mop-head, Keystone Mfq. Co. v. Adams, 151
U. S. 139; where the improvement patented was a revolving
winged shaft attached to an old operative and successful
corn-sheller to facilitate the movement of the corn into the
sheller, and in Seymour v. McCormick, 16 How. 480, where
the improvement was a driver’s seat upon an operative and
successful harvesting machine, the profits from the sale or
use of the entire machine, the entire mop-head, the entire
corn-sheller, or the entire harvesting machine, may not he
recovered by the patentee, but his recovery is limited to the
profits derived from the patented improvement to the oper-
ative machine only. And when a complainant has a patent
upon improvements to a machine parts of which are patented

—_— =

to others under prior grants, as in Blake v. Robertson, 94
U. 8. 728, the recovery is likewise limited to the profits de-
rived from the complainant’s patented improvement sep-
arated from those derived from the improvements patented
to others.

“But where the complainant’s patent secures a new combi-
nation or a new machine which accomplishes a result never
attained before it was invented, the entire profits derived
from the infringing device are recoverable, for, since no
combination or device existed before the invention by which
the desired object could be. attained, there is no combination
or device but the inventor’s to which the profits can be law-
fully attributed. Crosby Steam Valve Company Vv. Safety
Valve Company, 141 U. S., 441, 448, 449, 454; Brennan &
Company v. Dowagiac Mfg. Co., 162 Fed. 472, 475, 89 C. C. A.
392, 395; Dowagiac Mfg. Co. 7%. Superior Drill Company,
162 Fed. 479, 481; Elizabeth v. Pavement Company, 97 U.
S. 126; Manufacturing Company Vv. Cowing, 105 U.S. 2538;
Hurlbut y. Nchillinger, 130 U. 8. 456; Warren vy. Keep, 155
U.S. 265; Ruggles vy. Nddy, 20 Fed. Cases, No. 12, 116; Zane
y. Peck, 13 Fed. 475; Fifield v. Whittemore, 33 Fed. 835;
Creamer y. Bowers, 35 Fed. 206; Orr & Lockett Hdwe Co. V.
Murray, 163 Fed, 54, 56. [I am unable to escape the con-
viction that the case in hand falls under the latter rule. The
claim upon which this suit is founded is for a patented com-
bination of old elements. It is not restricted to the open
spaces between the plates or to the inclosing case, or to
anything but the association of all the elements described
and claimed. Neither the open spaces between the plates,
nor the tubes, nor the plates, nor the coils, nor the oil, nor
the spaces between the coils, nor any other detail of the com-
bination is patented by this fourth claim of the patent. Any
one may use without infringing this claim not only these

= a

details, but also any one or all but one of the essential ele.
ments of the combination. The thing patented is one, single
and entire. It is the combination of all the essential ele.
ments into the entire new converter which the combination
produces. No one can infringe this claim of the patent who
does not appropriate this entire new combination and this
machine which that combination produces. And as this new
combination and the converter it produces accomplished a
result never attained before, a result that no known device
or combination open to the public while the infringement
here in controversy was continuing, would produce, this
case is not governed by the rule applicable to slight improve-
ments on old machines which accomplished the same result
before as after the patented improvement illustrated by
Garretson v. Clark, 111 U. 8. 120, and other cases of that
class, but the complainant is entitled to all the profits which
the infringer derived from the appropriation of the new
combination and machine. Brennan & Company v. Dowagiac
Mfg. Company, 162 Fed. 472, 475; Yesbera v. H ardesty Mfg.
Co., 166 Fed. 120, 125, and cases of that class cited above.

“It appears to me therefore that the complainant was the
owner of all the profits which the defendant derived from
the manufacture and sale of the infringing converter and
that the defendant was in equity a trustee of those profits
for the complainant. The Supreme Court declares that it is
the established rule of the nation that in a case of this nature
a court of equity will administer full relief by awarding ‘a
compensation computed and measured by the same rule that
courts of equity apply to the case of a trustee who has wrong:
fully used the trust property to his own advantage. T'ilgh-
man v. Proctor, 125 U. 8S. 136, 148. What is that rule?
Chancellor Kent stated it in Hart v. Ten Eyck, 2 Johnson’s
Chancery Reports (N. Y.) 62, 108, in these words: ‘The

= =

trict and severe on such occasions.
of the property of others, so con-
fuse it with his own, that the line of distinction cannot be
traced, all the inconvenience of the confusion is thrown upon
the party who produces it, and it is for him to distinguish
his own property or lose it. The Supreme Court approved
this statement of the rule in ‘The Idaho,’ 93 U. 8. 575, 576.
“The primary duty of a trustee is to keep the property of
his cestui que trust separate from his own, to keep an ac-
count of it and to deliver it to the cestui que trust. This in-
fringer kept no account of these profits but mingled them
with the profits of its general business so that it was impos-
sible for it or for any one to accurately separate them. But
the record contains persuasive evidence of the entire amount
which the defendant received from the sale of the infringing
converters and that it customarily added to the cost of manu-
facture and sale a profit of 25% to make up its selling price.
There is also persuasive evidence of the total amount re-

ceived by the defendant from all its business during its in-
total profits derived from its bus-

These are ample facts upon which
to base a just and equitable finding of the amount of profits
which the defendant derived from the sale of these infring-
ing machines. The master has made a finding after a care-
ful consideration of all the evidence upon the subject and
that finding is presumptively right. The indisputable facts
that for years the defendant continued to infringe until it
had made and sold infringing machines from which it
realized more than $800,000.00, are sufficient to satisfy the
mind that its appropriation of the complainant’s combina-
tion was profitable and when to this is added the evidence
that 25% of the cost was ordinarily added by it to make its
selling price it seems to me to be inequitable to permit the

rule of law and equity is s
If a party having charge

fringing years and of the
iness during these years.

= =

defendant to keep this property of the complainant because
it mingled it with its own and thus allow it to take advan-
tage of its own wrong. Of such a defense Lord Chancellor
Brougham said in Docker v. Somes, 2 Myl. & Keene, 674:

“When did a court of justice, whether administered
according to the rules of equity or law, ever listen to
a Wrongdoer’s argument to stay the arm of justice
grounded on the steps he himself had successfully taken
to prevent his iniquity from being traced? Rather, let
me ask, when did any wrongdoer ever yet possess the
harcihood to plead in aid of his escape from justice the
extreme difficulties he had contrived to throw in the
way of pursuit and detection, saying, ‘You had better
not make the attempt, for you will tind I have made
the search very troublesome” The answer is, “The
Court will try.”

“The defendant cites again the cases of (iarretsoa vy. Clark,
111 U. 8. 120; Seymour v. McCorm ick, 57 U.S. 479 and Acy-
stone Mfg. Co. v. Adams, 151 U. 8. 139, in defense of its
course, but they are inapplicable because in such cases of
slight improvements on operative machines it is often im-
possible for the infringer to know the portion of the profit
attributable to the improvement and hence its duty te keep
that part separate is not so imperative. Lut where, as in the
case in hand, the complainant is entitled to the entire prof-
its from the infringing devices of the defendant the duty is
imperative and the failure to discharge it or the failure to
distinguish subsequently such profits from its own, subjects,
and ought to subject, the infringer and not its vietum to any
unavoidable loss that results from the inaccuracy either of
the defendant's disclosure of its profits or of the complain-
ant’s proof when there is iny substantial evidence upon
which to base an estimate of the profits derived from the
infringing devices,

“In like cases upon evidence similar, but far less aceurate
and convincing than that in this record, infringers have been
refused permission to take advantage of their own wrong and

=_ =

have been required to pay the estimated profits they derived
from the infringing devices by the Cireuit Court of Appeals
of the Sixth Circuit in Brennan & Company v. Dowagice
Mfg. Company, 89 ©. C. A. 392, 396, 162 Fed. 472, 476;
Dowagiac Mfg. Company Vv. Nuperior Drill Company, gg C.
(:. A. 399, 400, 162 Fed. 479, 48%, and P. P. Mast & Company
y. Superior Drill Company, 154 Fed. 45, 57, and by the Cir-
cuit Court of Appeals in the Second Circuit in Wales Vv.
Waterbury Mfg. Co., 101 Fed. 126, 130, 41 €. C. A. 250, 253,
254, and I am of the opinion that this court ought to pursue
the same course in the case before us.

“For the reasons which have been stated I am unable to

eoncur in the view of the majority that the decree of the

court below should be affirmed, and I think it should be re-

versed and a decree should be rendered for the complainant.”

CONCLUSION.

We respectfully submit that the question raised by this

petition for certiorari is one of general interest, gravity and
importance; and we also and especially, earnestly and most
respectfully submit, that we have shown that the opinion of
the majority of the Court of Appeals in the case at bar con-
firming, as it does, the final decree in this case and holding
that your petitioner is entitled to nominal damages ( nominal
profits) only on account of the infringing devices accounted
for before the Master, is contrary to the decisions of this
Court and of the Courts of Appeal in other cireuits. There-
fore, we respectfully ask, “in the interest of uniformity of
decision,” that the writ ef certiorari prayed for by your
petitioner be granted.

Respectfully submitted,

THOMAS B. KERR,

PAUL BAKEWELL,
Solicitors and of Counsel for Petitioner,
Westinghouse Electric & Mannfacturing
Company.

cae Y
or
‘
‘
—
|

JAN 11 1912

JAMES H. McKENNEY,

CLERK
a

Supreme Court of the United States.

No. 179.

WESTINGHOUSE ELECTRIC & MANUFACTURING Ce.,
Petitioner,
US.

WAGNER ELECTRIC MANUFACTURING CO.,
Respondent.

BRIEF FOR PETITIONER.

PAUL BAKEWELL,
THOMAS B. KERR,
Counsel for Petitioner.

C. G. Bureornn, 72 to 7% Spring Street. New York,

Supreme Court of the United States.

OCTOBER TERM, 1911.

No. 179.

WESTINGHOUSE ELECTRIC & MANUFACTURING CO.,
Petitioner,

US.

WAGNER ELECTRIC MANUFACTURING CO.,
Respondent.

PAUL BAKEWELL,
THOMAS B. KERR,
Counsel for Petitioner.

Prior litigation.....----------.----------------------
The static converter or transformer- -------------------
‘he problem. ..-----------------------------~-------
The patent in suit....-------------------------------
The claim in euit.._. .......---4- .. --2------------2--
The claim not limited by its terms--------------------
The claim not limited by the prior art._----.----------
tespondent’s Type M Converter-----. -- iwad wepekaeees
Estoppel by prior adjudication in the Carbide case. --. --
Opinion of Judge Hazel in the Carbide case-_----------
Opinion of the Court of Appeals in the Carbide case-----
The matters and things found and decreed in the Carbide

Pe eNO ARE APO EE Le
The Respondent is estopped to contend that claim 4 in

suit is a limited detailed one--.-.-------.-.---------
The accounting-..-...--------------------------------

Petitioner entitled to recover Respondent’s entire profits
on the infringing converters ----~---.---------------
The burden of proof was on Respondent to show what
profits, if any, were due to the additional spaces- .---
Confusion of profits... ---.----------------------------
The testimony before the Master----------------------
Respondent’s admissions and suppression of evidence. -- -
The Master’s estimation of profits. ..-------.----------
Respondent's evidence of lack of utility of the invention
fe GOB. ..-cccascccceee thine te hkehiesennadeans
The opinion of the Court of Appeals as to confusion of
profits....-.--.--- --------------. ---------------
The Court of Appeals did not attach sufficient weight to
the findings of the Master _---.--------------------
Garretson vs. Clark. .......-.-------------------------
Petitioner's tentative statement of claim. ---------------
Petitioner entitled to interest from the date of Master's
report ...-.------------------- ------------------
Dissenting opinion of Judge Sanborn as to recovery of
tespondent’s entire profits -----------------.-------
Gomdlatie® 2. to the transverse openings in the core, as distin-
guished from that due to the longitudinal openings in the core.

14

It may be said, therefore, that the language of the claim is
susceptible of two constructions, which brings the case within
the rule laid down by this Court in McClain vs. Ortmayer,
141 U. S., 419, 425, “ that, in case of doubt, where the claim
is fairly susceptible of two constructions, that one will be
adopted which will preserve to the patentee his actual inven-
tion.”

The Claim is not Limited by the Prior Art.

There is nothing in the prior art which requires the claim
to be limited to open spaces in the core plates.

The Court of Appeals in the case at bar, after referring to
the previous decisions, said (Ree., p. 584) :

“Inthe foregoing cases it was decided that most, if not
all, of the elements of the combination of claim four were old
in the art, but the combination being new it was held patent-
able, and in this view we concur.”

In the Carbide case the Court of Appeals of the Second
Cireuit, discussing the question of patentable novelty (117
Fed. Rep. 496), said :

“ Converters having open spaces in the core to avoid heat-
ing were old. In the Hindley & Buffham patent of 1882 (No.
266,290), for a generator, is disclosed the arrangement of wires
‘ whereby openings or spaces are provided for the free circula-
tion of air’ in order ‘to overcome in a great degree the gener-
ation of heat;’ and the patentees describe the winding of the
coils ‘in separate groups, so that air can freely circulate
through them.’ And in this patentee’s earlier patent No.
342,553, of 1886, he stated that its object was to ‘ construct
the converter in such manner that there shall be but itt/e loss
of energy through heating the iron,’ and described a core com-
posed of thin plates ‘ separated from each other by intervening
washers or plates of non-magnetic material, such as vulcanized
fibre, and an air space may be left, if desirable, between each
two plates.’ The use of oil or other non conducting fluid to
reduce the conductivity of the wire coils of a dynamo when
driven at a high speed and thus reduce the heat is described
in the Millar patent No. 270,457, of 1883.

“ Defendant’s counsel chiefly rely on the Stanley patent
No. 349,612, of 1886, for an induction coil, in which, they say,
they ‘have the identical combination of the fourth claim of
the Westinghouse patent.’ This patent is for a converter.

—

15

The plates of the core are so stamped as to form interior and
exterior teeth. Of the plates the specification says:

“+*They are placed upon each other, the positions
of the teeth coinciding ; but they are insulated or sepa-
rated from each other by paper, cloth, asbestus, oil silk
or other well-known insulating material, and they are
firmly bolted or otherwise secured together.’

“ The specification further says :

“©The coil is preferably protected by being placed
within a suitable case consisting of a base F, to which
there is seecnred a removable cover F’. In the cover
there are preferably formed perforations 7 7”

“ Although the drawings do not show open spaces in the
core, and defendant's expert assumes that there are no such
spaces, yet it appears from the foregoing description that
the patentee conceived the idea of a separation of the
plates either so as to admit air or to provide for the
insertion of some fabric for purposes of énsudation. The
description and drawings of the Stanley patent show a
base plate and perforated cover adapted to ventilate the con-
verter and to protect it from physical injury. We have, then,
in the prior art every element of the combination claimed, and
a physical combination of the same elements, except that the
separations in Stanley are not adapted to, and the construc-
tion of the inclosing case is prohibitive of, the purposes of the
claim in suit, This claim covers such an inclosing case as will
eonfine the noncondueting fluid, and such open spaces in the
core as will permit the circulation of the liquid through them.
Westinghouse, then, was the first to patent such an air-tight,
closed converter. Does the combination covered by the claim
in suit show patentable invention? If the idea of ventilation
be rejected, and the patent be confined to the statement of and
elaim for the inclosed construction, it embodies at least a com-
bination radically modified from those of the prior art, in
order to adapt it to a novel purpose. The primitive telegraph
coils of the Brooks patent of 1878, were immersed in oil ‘to
protect them from the influence of the damp atmosphere’ ;
and the Miller dynamo without open spaces in its core, had
its coils suspended in a tank of oil. But the construction of
these devices exeluded the novel idea of oil which would ‘ cir-
culate through the tubes and intervening spaces of the coils
and plates.” And while the assumed or suggested separations
between the plates of the Stanley patent would be sufficient
for insulation only, and not for circulation, its inclosing case is
not sealed so as to contain the circulating oil, and the use of
oil is not suggested. In these circumstances, the patentee
seems to be entitled to claim the means by which the external
and internal surfaces of the heat-producing parts of a converter
were cooled by such an arrangement and separation of parts

16

as would permit the circulation about them of oil, and the
means for the retention of said oil within and about said sur-
faces whereby the heat from the oil radiated to the surrounding
air. Lf there is any doubt upon the question of patentability,
the practical and commercial results of this improvement must
resolve such doubt in its favor.”

As to the practical result of the invention, the Court of
Appeals in the Carbide case, said (117 F. R., 498) :

“The practical result of the invention in suit, as testified
to by complainant’s experts, was to so increase the capacity of
conveiters that, while a dry converter, cooled by the natural
circulation of air, is limited to 10 kilowatts, the oil insulated
converters of the patent in suit are commercially serviceable up
to 600 kilowatts.”

The limitation to 500 kilowatts was a commercial one im-
posed by the size of the inclosing case, and the large quantity of
oil necessary, when the capacity of the converter exceeded 500
kilowatts, since it led to the prohibition by the fire insurance
companies of the use of such converters inside of buildings.
The Thomson patent, which was also passed upon by the
Court of Appeals in the Carbide case, met this dificalty by
cooling the oil in the Westinghouse converter by means of a
pipe of running water, and thereby made it possible to use any
capacity of Westinghouse converter with a permissible quantity
of oil. The Thomson patent was held to be lacking in patent-
able novelty, in view of the common use of water cooling for
analogous purposes, but the expedient removed the commercial
limit to the use of the Westinghouse invention, so that as the
opinion shows (p. 499) “ converters with a capacity of about
2,000 kilowatts have been constructed, and the limit has not
yet been reached.”

There is, therefore, nothing either in the terms of the claim
in suit or in prior state of the art, which requires the patent
to be limited to open spaces formed in or between the core
plates, as distinguished from open spaces formed in the core
between the coils, or between the coils and the inner edges of
the core plates.

The invention being “one of such novelty and importance
as to mark a distinct step in the progress of the art, as distin-
guished from a mere improvement or perfection of what had

bit ated 7 3 35 ae pas mae aed enh. 8 7
oe .

Westinghouse Converter,

Case — black.

Core — blue.

Coils — red.

Oil Spaces — white.

Respondent’s Converter,

Basnandanda Ti... 8A AU.

17

gone before” (Westinghouse vs. Boyden, 170 U.&., 562), the

patentee was entitled to a broad construction of the claim,

and an application of the doctrine of equivalents commen-

surate with the importance of the improvement in the art.

Paper Bag Patent Case, 210 U. S., 415.

Hobbs vs. Beach, 180 U.S., 401.

Hoyt vs. Horne, 145 U.S., 309.

Consolidated Valve Co. vs. Crosby Valve Co., 113
U. S., 178.

Loom Co. vs. Higgins, 105 U. 8., 598.

Elizabeth vs. Pavement Co., 97 U.S., 137.

Ives vs. Hamilton, 92 U. S., 430.

Winans vs. Denmead, 15th Howard, 343.

The Court of Appeals held that the claim in suit was a
limited detailed claim covering only one part of the infringing
device. In order that the construction of the infringing de-
vice and its relation to the invention claimed in the combina-
tion of claim 4 in suit may be fully understood, we show on the
opposite page, diagrammatic illustrations in longitudinal section
and cross-section of the two devices in so far as is material to
the present issue, and for the information of the Court we
also show like views of Respondent's Type M converter,
although the questions of infringement and recovery, so far as
it is concerned, were not included in the petition for the writ
of certiorari, and are not now urged by Petitioner.

It will be seen that the open spaces between the coils, and
between the coils and core, in the Respondent’s converter are
quite small, the testimony (Rec., p. 101, Q. 3) showing that the
space between, the coils was about three-eighths of an inch, and
between the coils and core one-tenth of an inch. The Court of
Appeals held that these spaces were not covered by the claim
in suit, and that the failure of Petitioner to apportion Respond-
ent’s profits between them and the substantial transverse
spaces to which it held the claim to be limited, was the
ground upon which it set aside the Master's finding and
awarded nominal damages. The testimony referred to is that
of Mr. Beam, who measured one of the Union Carbide tranas-
formers, which were included in the account, and
Mr. Beam on cross-examination (Rec., p. 102, x-Q. 9) said
that owing to the bulging of the insulation the space between the
coils was much less than three-eighths of an inch. There is no

:

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18

other testimony in regard to the size of the open spaces between
the coils and between the coils and core in Respondent’s infring-
ing converter, and while a great deal was said on this subject
in the Master’s report, and in the opinion of the Court of
Appeals, yet Respondent gave no evidence as to the size of
these open spaces, but contented itself with a mere assertion
of their existence. It is obvious, however, that they were
merely an extension, or carrying forward, of the Westing-
house idea of opening up the internal or heat-producing parts
of the converter to afford access of the oil thereto, and that
the difference in operation, if any, is merely one of degree,
Respondent has no patent on this feature.

Respondent's Type M Converter.

When, after the decision in the Court of Appeals in the
Carbide case, Respondent changed its construction to that of
Type M by withdrawing the spacing strips from between the
groups of laminae and closing up the transverse openings in
the core, it made large open spaces longitudinally through the
core by placing the spacing strips between the coils, and be-
tween the coils and the core, as illustrated in Respondent's
Catalogue (Rec., pp. 117, 144). In regard to the latter, the
Catalogue says (Rec., p. 138) :

“ The cross-section of al5 K. W. transformer, on page 10
(Ree., p. 144), illustrates very clearly the excellent provision
which has been made for cooling primary and secondary coils,
and iron, by keeping up a natural cireulation of oil. "This is
one of the most important advantages of the shell type trans-
former. These oil ducts are so proportioned and so placed,
that while they keep all parts of the transformer cool, and
thus prevent deterioration of insulation and reduce aging of
iron to a minimum, they cause a minimum loss in efficiency.”

These three converters, namely, the Westinghouse, Re-
spondent’s infringing converter, and Respondent's Type M
converter, all operate in precisely the same way, producing
the same result. The oil, as set forth in the patent in suit
(Rec., p. 171, lines 80-82), circulates through “ the intervening
spaces of the coils and plates, and preserves the insulation,
excludes the moisture, and cools the converter,” and they are
therefore equivalent structures.

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19

We discuss this question with reference to Respondent’s
Type M transformer, because in the evidence before the
Master, Respondent made some comparative tests between its
infringing converter and its Type M, and on the basis that the
patent was limited to the transverse openings between the groups
of core plates, claimed that as there was no difference in the
operation of the two structures, there was no utility in the
invention, and that, therefore, Petitioner was entitled to nom-
inal damages only. Our answer to this point will be made in
our argument on the accounting feature, our present point
being that Type M is a subsequent and equivalent construc-
tion, and that no argument against Petitioner’s right to a
recovery can properly be based upon its performance, for the
reason that as an equivalent it is clearly within the claim in
suit upon any liberal reading of the same.

Hoyt vs. Horne, 145 U. 5., 308-9.
Winans vs. Denmead, 15 Howard, 340-1.

ESTOPPEL BY PRIOR ADJUDICATION IN
THE CARBIDE CASE.

The bill pleads the history of the Carbide Case (Rec., pp.
5, 6) as follows :

“VI. That on or about the 10th day of May, 1900, a bill
of complaint was filed in the United States Circuit Court for
the Northern District of New York by the complainant herein
against Union Carbide Company, which said Union Carbide
Co. was a user of electrical converters manufactured and sold
by the Wagner Electric Manufacturing Company ; that on or
about the 15th day of June, 1900, the said cause against the
Union Carbide Co. was certified and transferred to the West-
ern District of New York, which Western District had, subse-
quently to the 10th day of May, and prior to the 15th day of
June, 1900, been created by Act of Congress and duly organ-
ized ; that on the 2d day of July, 1900, an answer to the said
bill was duly filed by Union Carbide Company, and on or
about the 6th day of August, 1900, complainant's replication
was filed. That testimony was thereafter taken by the respect-
ive parties and filed in the Clerk’s office of said United States
Cirenit Court for the Western District of New York, and that
thereafter and ov or about the 24th day of May, 1901, the said

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20

cause came on for final hearing before the Honorable Jony R.
Hazet, sitting as a Judge of the Circuit Court at Buffalo,
within the said Western District, and was argued by counsel
upon the pleadings and proofs ; that on the 22d day of No-
vember, 1901, the decree was entered therein, in which it was
adjudged, among other things, that Letters Patent of the
United States No. 366,362, granted on July 12, 1887 (being
the same letters patent hereinbefore referred to in this bill),
are good and valid in the law ; that the complainant, Westing-
house Electric and Manufacturing Company, is entitled to the
exclusive right to the said letters patent and in and to the in-
vention thereof, and that the defendant Union Carbide Com-
pany (using, as above mentioned, the electrical converters
manufactured by Wagner Electric Manufacturing Company)
had infringed upon the fourth claim of Letters Patent No.
366,362 and had violated the exclusive rights of the complain-
ant thereunder.

“ That thereupon, to wit, on December 19, 1901, the Union
Carbide Company appealed from the decree of the Circuit
Court of the United States Circuit Court of Appeals for the
Second Circuit, and, proper proceedings being had, the said
appeal was argued before the said court of appeals composed
of the Honorables Wiiu1aM J. Wauttace, E. Henry Lacompe
and Wituam K. Townsenp, Circuit Judges, on the 27th day
of February, 1902, and on April 29th, 1902, the said Court of
Appeals filed an opinion affirming the decision of the Circuit
Court with costs to your orator.

“ That the devices involved in the said suit, and which
were used by the Union Carbide Company, the defen:ant
therein, were manufactured and sold by the Wagner Electric
Manufacturing Company, the defendant herein, and that said
suit agaiust the Union Carbide Company was defended by
said Wagner Electric Manufacturing Company and was argued
by its counsel, and that the matters and things found and de-
creed in the said suit against the Union Carbide Company are
res adjudicata against the said Waguer Electric Manufactur-
ing Company.

“VII. That the said defendant has well known all the
facts hereinbefore set forth, and has been duly notified of the
grant and date of your orator’s said patent and of its infringe-
ments thereof, but nevertheless, contriving to injure your
orator and to deprive it of its profits, benefits and advantages
which might and otherwise would have accrued to your orator
from the said rateni, the said defendant has, since the 12th
day of July, 1887, and subsequent to the said assignment to
your orator, within the Eastern District of Missouri and _else-
where throughout the United States, made, used and sold, and
caused others to make, use and sell without the license of
your orator, and against your orator’s will and in violation of

21

your orator’s rights, and does now continue to make, use
and sell, and cause others to make, use and sell devices
or apparatus which embody the invention or discovery
claimed in your orator’s said patent, the exclusive right
to make, use and sell which is by law vested in your orator
as aforesaid; and the said defendant refuses to pay to
your orator any of the profits which it has made by such
unlawful manufacture, use and sale, or to desist from the
further infringement of said patent; all of which acts are in
violation of the rights vested in your orator, and are contrary
to equity and good conscience and tend to the manifest injury
of your orator in the premises.”

The answer (Record, pp. 10-11) admits fully all the allega-
tions of the bill in regard to the Carbide case, as follows:

“ VI. This defendant admits that on or about the 10th day
of May, 1900, a bill of complaint was filed in the United States
Circuit Court for the Northern District of New York, by the
complainant in this suit, against the Union Carbide Co., whick
said Union Carbide Company was a user of electrical conver-
ters manufactured and sold by this defendant; that on or
about the 15th day of June, 1900, the said cause against the
Union Carbide Company was certified and transferred to the
Western District of New York; that on the 2d day of July,
1900, an answer was filed in said suit by the Union Carbide
Company, and on or about the 6th day of August, 1900, repli-
cation was filed ; that testimony was thereafter taken by the
respective parties and filed in the Clerk’s office of the United
States Cireuit Court for the Western District of New York;
and that thereafter and on or about the 24th day of May,
1900, said cause came on for final hearing before the Honor-
able John R. Hazel, sitting as Judge of the Circuit Court at
Buffalo within the said Western District, and was argued by
couusel upon the pleadings and proofs ; that on the 22d day of
November, 1901, a decree was entered therein, in which it ad-
judged that the fourth claim of said United States Letters
Patent No. 366,362 of July 12, 1887, was a good and valid
claim in the law ; that the complainant herein was entitled to
the exclusive right to said letters patent and in and to the in-
ventions described and claimed in claim 4 thereof; that the
Union Carbide Company had infringed upon the said fourth
claim of said letters patent and had violated the exclusive
rights of the complainant under said fourth clain. But this
defendant denies that by the said decree it was adjudged that
any of the other claims of said Letters Patent No. 366,562
were good and valid in the law, or that the complainant
was entitled to the exclusive right in and to the invention
claimed in any of the other claims of said letters patent;

a AE BOVE oe SEO sere ee nn ca te

22

an] this defendant further denies that the Union Carbide
Co. was adjudged by said decree to have infringed upon
any other claim of said Letters Patent No. 366,362. And
this defendant alleges that after the filing of the said bill of
complaint against the said Union Carbide Company, as_ above
set forth, and before the said final hearing before the Honor-
able Joun KR. Hazen, above mentioned, claims 1, 2, 3 and 5
being all of the remaining claims of said Letters Patent No.
366,362, were withdrawn by the complainant from the consid-
eration of the Court aud were not included in said decree.

“ VII. This defendant further answering admits that on
the 19th day of December, 19U1, the said Union Carbide
Company appealed from said decree of the Circuit Court to
the United States Circuit Court of Appeals for the Second
Circuit and that proper proceedings were held, and that said
appeal was argued before the said Court of Appeals, com-

osed of the Honorables Wittiam J. Watiace, E. Henny

ACOMBE and WituiamM K. Townsenp, Cirenit J udges, on the
27th day of February, 1902, and that on April 29, 1902, the
sail Court of Appeals filed an opinion confirming the decision
of the Circuit Court with costs to the complainant.

“ VIII. This defendant admits that the device involved in
said suit and used by the Union Carbide Company, the de-
fendant therein, was manufactured and sold by this defendant,
and that said suit against the said Union Carbide Company
was defended by this defendant and was argued by its coun-
sel, and that the matters and th ings found and decreed in said
suit against the Union Carbide Co

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386001_0533%3A2. Public record. Not legal advice.