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Opinion of the Court.
used, and new valves were made and their full costs charged in the accounts of defendants. This item 7 is a claim for the cost of the destroyed valves (whether with or without an allowance for salvage I am unable to say) and should not be allowed.” In respect to this item, the defendant put in the following claim before the master: "Finding 8. The charge found in item 7, in heading IV of defendants' account filed with the master, is for the reconstruction and modification of safety-valves made by them. The work of this modification and reconstruction was in the direction of perfecting the characteristics of the safety-valves they were then producing. The result of such endeavor was that they produced a species of safety-valves, classified in the account as iron safety-valves, which was made and sold after that time by the defendants, the account of which has been fully rendered to the master, and on which he has computed profits in his consideration of them. In the labor and efforts of the defendants certain valves were rendered useless and were valueless except for junk, and certain parts of valves made for them and paid for were rejected, and the difference between the original cost and their value as old metal became a loss to the defendants. All these losses occasioned by the destruction of valves, by the replacing of valves in hands of buyers of valves by giving them new valves for old ones without additional charge, and by the destruction of parts of valves which could not be used because of the modification of the design, were a part of the expense suffered by the defendants in their valve business, in the producing and manufacture of a marketable safety-valve of the characteristics of the Crosby valve, and constituted a wastage in their business which their valve department suffered for the purpose of making more salable products. This loss was an item of expense which should be charged to the cost of valves as such, because it became a charge upon all the safety-valves thereafter made following the plan and models which resulted from such loss.
Upon inspection of the records of the master, the defendants do not find that they have filed specifications of such loss, and, trusting to the belief that their account, with the testimony, was sufficient and
Opinion of the Court.
proper in such respect, they evidently neglected so to do. Moreover, the examination of Mr. Crosby, the defendants' superintendent at that time, by the complainants, upon that item of their account, shows only the items of loss in part. This latter incomplete showing, which is now first noticed by the defendants, was evidently overlooked, and thus the facts making up the character of the loss were not properly and fully laid before the master for his consideration. On this account the defendants respectfully submit a statement of facts, and request that they may introduce testimony, if necessary, in proof thereof." Here follows the statement. “When
. ever valves have been accounted for as returned and the master has deducted the returned valves from the sales and costs the account then shows itself free from any profits on such valves. The cost to the defendants of such valves remains as a part of the expenses they have incurred in the making of valves, and which, when they were destroyed, became a direct loss to them and their business. It is for this actual loss so sustained, decreasing their profits, which they now ask to bare allowed. The loss is inseparable from their whole valve business and belongs to it."
To this view, the master replied as follows, in his report: “ It is clear, upon this statement, that no allowance should be made to defendants for the sixty-nine valves which they made and destroyed without selling or consigning them. The thirtyeight valves which were originally sold to Babcock & Wilcox were accounted for both in costs and sales, but when new valves were sent them to replace the returned valves, the new valves were not included in defendants' accounts, either in costs or sales. The twelve brass valves were returned and so treated in the account. The result, therefore, is substantially this, that the defendants made some one hundred and nineteen valves which they subsequently destroyed, with some castings which they concluded not to use. I find no sufficient reasons for modifying my former disallowance of item 7 in each case."
In regard to this item, the Circuit Court said: “ As for the objection to the findings of the master respecting expenses to be allowed for certain valves destroyed, which forms the sub
Opinion of the Court.
ject matter of the first exception, I think the master was right in the conclusion he reached. The defendants were not charged on valves which were subsequently destroyed, or, if so, they were not charged upon the new valves which replaced them. See master's note 29, page 43 of master's report. The master properly disallowed the cost of destroyed valves.”
Without going into details, it is sufficient to say that we concur in the conclusion that the defendant was not charged for valves which were subsequently destroyed, or, if so, it was not charged upon the new valves which replaced the destroyed valves.
As for the contention that the destroyed valves ought to form a credit against the profits actually realized by the defe ndant on other valves, it is sufficient to say that the only subject of inquiry is the profit made by the defendant on the articles which it sold at a profit, and for which it received pay. ment, and that losses incurred by the defendant through its wrongful invasion of the patent are not chargeable to the plaintiff, nor can their amount be deducted from the compen. sation which the plaintiff is entitled to receive. The Cawood Patent, 94 U. S. 695; Elizabeth v. Pavement Co., 97 U. S. 126, 138; Tilghman v. Proctor, 125 U. S. 136.
The Circuit Court allowed interest on the $40,344.59 from the date of the filing of the master's report. The defendant assigns this as error, and contends that interest should have been allowed only from the date of the decree. In support of this view, the case of Mowry v. Whitney, 14 Wall. 620, 653, is cited. But we regard it as established by the cases of Minois Central Railroad v. Turrill, 110 U. S. 301, 303, and Tilghman v. Proctor, 125 U. S. 136, 160, that the ruling as to interest made by the Circuit Court is proper. In the latter case, it is said: “By a uniform current of decisions of this court, beginning thirty years ago, the profits allowed in equity, for the injury that a patentee has sustained by the infringement of his patent, have been considered as a measure of unliquidated damages, which, as a general rule, and in the absence of special circumstances, do not bear interest until after their amount has been judicially ascertained; and the provision introduced
Opinion of the Court.
in the patent act of 1870, regulating the subject of profits and damages, made no mention of interest, and has not been understood to affect the rule as previously announced. Silsby v. Foote, 20 How. 378, 387; Mowry v. Whitney, 14 Wall. 620, 651; Littlefield v. Perry, 21 Wall. 205, 229; Act of July 8, 1870, c. 230, $ 55, 16 Stat. 206; Rev. Stat. $ 4921; Park: v. Booth, 102 U. S. 96, 106; Railway Co. v. Root, 105 U. S. 189,
, 198, 200, 204; Illinois Central Railroad v. Turrill, 110 C. S. 301, 303. Nothing is shown to take this case out of the general rule. At the time of the infringement, the fundamental questions of the validity and extent of Tilghman's patent were in earnest controversy and of uncertain issue. Interest should therefore be allowed as in Illinois Central Railroad v. Turrill, just cited, only from the day when the master's report was submitted to the court (which appears, by the terms of his report and of the decree below, to have been October 7, 1984) upon the amount shown to be due by that report and the accompanying evidence."
Delay caused by the court, or not attributable to the plaintiff, in coming to a conclusion on the master's report, where the amount found by that report is confirmed, ought not to deprive the plaintiff of interest on the amount found by the master. Under such circumstances, the account ought to be considered as liquidated on the day when the master's report is filed. This is in analogy to the allowance of interest on the amount of the verdict of a jury from the date of the verdict to the date of the judgment, in accordance with the statutes of many States, and among others of Massachusetts. Pub. Stats. c. 171, S 8. The decree of the Circuit Court is
The CHEF JUSTICE and Mr. JUSTICE Gray were not present at the argument, and took no part in the decision of this case.
Statement of the Case.
McCREARY v. PENNSYLVANIA CANAL COMPANY.
APPEAL FROM THE CIRCUIT COURT OF THE UNITED STATES FOR THE
EASTERN DISTRICT OF PENNSYLVANIA.
No. 54. Submitted October 22, 1891. - Decided November 9, 1891.
In estimating, in a suit for the infringement of letters patent, the profits
which the defendant has made by the use of the plaintiff's device, where such device is a mere improvement upon what was known before and was open to the defendant to use, the plaintiff is limited to such profits as have arisen from the use of the improvement over what the defendant might have made by the use of that or other devices without such improve
ment. An inventor took out letters patent for an invention intended to accomplish
a certain result. Subsequently he took out a second patent, covering the invention protected by the first, and accomplishing the same result by a further improvement. While holding both patents, he sued to recover damages for the infringement of the second, without claiming to recover damages for the infringement of the first. Held, that he could recover only for the injuries resulting from use of the further improvement covered by the second letters, and that if no such injury were shown the defendant would be entitled to judgment.
This was a bill in equity for the infringement of letters patent number 129,844, issued July 23, 1872, and reissued as number 5630, October 28, 1873, to the appellant, John McCreary, for an “improvement in coupling and steering apparatus.” In the specification of the reissue the patentee stated that his invention related" to certain improvements in devices for steering canal boats,” etc., described in letters patent granted to Elijah and John McCreary, April 16, 1872, number 125,684, by means of which two boats are coupled together, and navigated and steered as one boat by means of a single steeringwheel. The invention described in said letters patent consisted, principally, “in coupling two boats together by means of a chain or rope passing around a steering-wheel on one boat, and around a system of sheaves or pulleys, and attached to the other boat, for the purposes of steering said boats as well as of coupling them; and in centring said boats together and form