Union Special Mach. Co. v. Maimin

ARCHEBALD, District Judge (specially assigned). The master has made an admirable report, justifying his conclusions by reference to the testimony, and correctly apprehending and applying the equitable principles involved. There is very little therefore to be said, except what may be necessary to show that the defendant’s arguments are appreciated, even if they do not prevail. The infringement of the defendant was deliberate, not to say flagrant, being persisted in after warning given by the filing of the bill. And it devolved on him therefore, in view of this, as well as the course pursued with regard to the making over of machines, to clear up any uncertainties_ growing out of what he did. He was a secondhand dealer, and it was his custom to buy up old machines of different kinds, and, after changing them about, and putting them in shape, to sell them again; those which are here particularly in issue being made [138] into and sold as twin needle A machines of the complainants’ make. To effectually do this, he resorted to every means necessary to that end. The parts, if any were marred, were sent out to be rejapanned, the name of .the complainants, at the same time, being regilded thereon; and, the numbers on the bodies of the machines having been filed off, new numbers were given them on the slide plates, to correspond with the class of machine into which they were respectively changed, a record of correct numbers, taken from genuine machines, being kept by the defendant in a book, so that there would be no mistake. The sales were also made, to complainants’ customers who wanted twin needle A machines, which were required for the particular work in which, as manufacturers, they were engaged; and essential to the identity, as well as the efficiency and salability of these machines, was the patented thread-controlling device in suit. There were 38 machines of this .character sold by the defendant after the bill was filed, for 37 of which, according to the master, he should account. And as to 11 of these there can be no doubt. These, according to the numbers on them, were not twin needle A machines when originally put out by the complainants, and, being equipped with the infringing device, when disposed of by the defendant, it was-for him to show, if that would extenuate him, that they came into his hands in that shape. 161 Fed. 748, 750. It is true that there is little dependence to be put on the numbers of machines sold by the defendant, in view of the juggling with them, which went on in his shop; but it does not lie in his mouth to set this up. If he has created the confusion, it is for him to clear it away. Neither can there be much question as to the six machines, not identified by number, but sold by the defendant as the same character of machine. There is no direct evidence as to just what these were when they were first .put out, whether equipped with the eyelet of the patent or, not But, except as they were so originally equipped, these, on their face, were infringing sales, and the ■ defendant must justify them, if he can. He knew that he had no right to sell machines embodying the patent unless this was in fact the case. And in buying up secondhand machines he took that risk, against which he was bound to protect himself, by looking up their record and producing it at this time, if it lets him off. He had no right to perpetuate an infringement by passing it on, and he was required to see therefore that he did not. No numbers being given, it is impossible for the complainants to say in what shape these machines were when they passed out of their hands. This knowledge, however, was within reach of the defendant, the numbers being plainly marked on the body of the machine, in each case, and the result of not having it at this time falls on him. As already stated, these sales, as made, were apparently infringing sales, and the defendant is therefore liable for them, unless he explains them away, which he has not done. There are five numbers duplicated in the record of the defendant’s sales, one of which, no doubt, was a resale of the same machine. But the attempt fails to show this as to the other four. And, as the complainants never repeat a number, it is clear that these four machines [139] are not numbered as they originally were. It is of no account, therefore, that the numbers on. these machines correspond with those of machines, which, according to the complainant’s record, were equipped by them at the start with the patented device. The effect ot this is dispelled by the changing of numbers that went on, as already stated, in the defendant’s shop. Nor is this in conflict with the position taken above, with regard to certain others sold by the defendant, which, if the numbers found on them were correct, were not originally twin needle A machines, as to which, as before intimated, the defendant cannot complain, if it is assumed, in the first instance, that this was the fact, leaving it to him to explain away the effect, if he can. As to the four duplicates now under consideration, however', the same reasoning applies as with regard to the group of six. When sold by the defendant, these machines were equipped with the patented device, and he was thus called on to relieve himself from the imputation, otherwise properly indulged, that these were infringing sales. Instead of doing this, however, the course taken by him with regard to making over and fitting out of secondhand machines, coupled with the duplication of numbers which appears, only serves the more firmly to fasten the charge. The same tiling, in substance, is to be said with regard to the remaining 16 machines. Judged by their numbers, these may not have been infringing machines, having apparently been originally equipped in the same way as wdien they were sold. But, as already pointed out, no significance is to be given to this, in view of what has been shown, and this is enforced by the record of where some of these machines turned up. No. 22,758, for instance, was disposed of by the defendant lo the Russell Manufacturing Company, of Alexander City. Ala.: while the genuine machine of the same number was found in Galt, Ontario, Canada. No. 34,127, also, which figures four different times on the defendant’s list, was additionally sold about the same time that it was sold to the National Underwear Company, of Spring City, Pa., to an entirely different party at a different place. The master has called attention to other remarkable experiences with regard to alleged resales of particular machines. But, without going further into the matter, it is sufficient to say that the conclusions which lie has reached on this branch of the case are fully sustained by the evidence, and are not to be disturbed. The only other question is as to the profits secured by the infringement. The master has allowed all that was obtained on the sales of madet-over machines. It is claimed that this goes far beyond anything contributed by the use of the patented device, to which the complainants are to be confined. But this contention fails to give effect to the part which the addition of the eyelet in question played in making sales. The profit derived from the infringement is not measured merely by the increased value of the machines with the eyelet on, above what they might possibly have sold for without it, which, in a way, was the same. The eyelet was the final touch in the transformation by the defendant of the secondhand machines, which he had picked up, into twin needle A. machines, as turned out and sold. And as the parties, to whom he disposed of these ma [140] chines, on account of the work for which they were particularly adapted, in which these parties were engaged, wanted this particular kind of machine or none at all, it was the patented combination that practically, in each instance, sold the machine. It is this difference in salability that determines the contribution made by the addition of the infringing feature, or the patented combinatoin, of which it was a. controlling part; and the case thus falls within the. familiar rule that, where the patented feature substantially effects the sale, the infringer must account for the entire profits made therefrom. Westinghouse v. New York Air Brake Co., 140 Fed. 545, 72 C. C. A. 61. The exceptions are overruled, and the report of the master is confirmed.