Overview
Case summary
This case involves a patent infringement suit over the Crosby and Kellogg patent No. 37,033 for a machine crimping textile materials. The plaintiff, as trustee, sued defendants for using infringing roller plaiting machines. The trial court found infringement of claims 2 and 4, ordered an accounting, but after a master's report, awarded only nominal damages. On appeal, the Circuit Court of Appeals affirmed infringement, holding defendants' machines used mechanical equivalents. On profits, the court held plaintiff entitled to savings over hand-plaiting, but allowed a deduction for an ironing improvement in defendants' machines. The court set profits at $40,000 based on the record, reversing the nominal award. The court also held defendants waived a notice defense under Rev. St. § 4900 by not raising it below.
Abstract
Plaintiff sued defendants for infringing specific claims of a patent on a machine for crimping textile materials using roller plaiting machines. Trial court found infringement and ordered an accounting, but awarded only nominal damages after a master's report; appellate court affirmed infringement based on mechanical equivalents, calculated defendants' profits at $40,000 with deductions for improvements, and reversed the nominal award. Supreme Court reversed the circuit court's decree, remanding to declare patent validity and infringement and award $40,000 in profits plus costs.
Opinion of the court
opinionSHIPMAN, Circuit Judgejoined by PECKHAM, Circuit Justice, LACOMBE, Circuit Judge
- Infringement found based on equivalence of defendants' machines
- Profits calculated as savings over hand-plaiting with apportionment for improvements
- Notice defense waived due to failure to raise in trial court
- Court set $40,000 profits to avoid further delay
Jurisdiction
not challenged- Suit in equity for patent infringement
- Appeal from Circuit Court of the United States for the Southern District of New York
Procedural posture
- Infringement of claims 2 and 4
- Accounting for profits
- Validity of patent
- Lack of notice under Rev. St. § 4900 (raised for first time on appeal)
- Notice requirement under Rev. St. § 4900 deemed waived
Subsequent history
Legal categories
Case record
Issues & holdings
De novo (legal issue of infringement)
Court found infringement as defendants' machines used substantial equivalents of patented elements
Issue preserved for review
De novo (legal issue of profit calculation)
Court allowed deduction for ironing improvement but rejected other claims; set profits at $40,000
Issue preserved for review
Plain error (unpreserved issue)
Issue waived as not raised in pleadings or trial court
Issue not preserved
Holdings of the court
Error analysis
- Circuit court's conclusion that hand-plaiting costs were prohibitive and marketable plaits could not be made by hand — evidentiary · error foundError affected profit calculation; court corrected by setting $40,000 based on record · not harmless
- Failure to allow apportionment for ironing improvement in defendants' machines — procedural · error foundCourt accounted for it in setting $40,000 profits · harmless
Statutory interpretation
1Burden of proof
- Defendants bore burden to prove portion of profits from improvements
Standards of review
- Infringement of patent claims — de novo Legal issue of infringement reviewed de novo
- Accounting for profits and apportionment — de novo Legal standards for profit calculation reviewed de novo
- Unpreserved notice issue — plain error Issue not raised below, reviewed for plain error
Timeline
Crosby and Kellogg patent No. 37,033 issued for a machine for crimping textile materials
Outcome: Patent granted
Foundation of the infringement suit
Plaintiff filed bill in equity alleging infringement and seeking injunction and accounting
Outcome: Temporary injunction granted
Initiation of lawsuit
Circuit court final decree adjudged infringement of claims 2 and 4 and directed accounting
Outcome: Infringement found, accounting ordered
Key trial court ruling on liability
Special master filed report assessing no damages but finding profits of $76,215.85 based on savings over hand-plaiting
Outcome: Report filed
Master's calculation of profits
Circuit Court of Appeals issued opinion reversing decree and remanding with instructions to award $40,000 in profits
Outcome: Decree reversed, $40,000 awarded
Appellate decision on profits and infringement
Facts & evidence
Incident
Key facts
6 facts- Crosby and Kellogg patent No. 37,033 for a machine for crimping textile materials issued December 2, 1862
- Plaintiff as trustee sued defendants for infringement in 1878
- Temporary injunction granted, final decree in 1884 found infringement of claims 2 and 4
- Special master reported profits of $76,215.85 based on savings over hand-plaiting
- Circuit court set aside report and awarded nominal damages (six cents)
- Both parties appealed
Disputed questions
- Whether defendants' machines infringed claims 2 and 4
- Amount of profits attributable to infringement
- Cost of hand-plaiting as baseline for profit calculation
- Effect of improvements in defendants' machines
Procedural history
5 steps- July 10, 1878: Bill in equity filed
- April 3, 1884: Final decree adjudging infringement and directing accounting
- August 26, 1893: Special master's report filed
- Circuit court set aside report and entered decree for nominal damages
- Appeals to Circuit Court of Appeals
Evidence in the record
- Testimony of witnesses on cost of hand-plaiting
- Master's report on profits
- Patented machine models
- Defendants' roller plaiting machines
- Witnesses Kürsheedt, Brown, Wooster on hand-plaiting costs
- Defendants' superintendent Smith on practicality of hand-plaiting
- Crosby and Kellogg patent specification
- Arnold and Pipo patent specifications
- Special master's report
- Comparison of defendants' machines to patented machine
- Evidence type: Witness estimates of hand-plaiting costs · Challenge basis: Inaccuracy and lack of experience · Trial court ruling: admitted · Reasoning: Court found estimates excessive and based on insufficient investigation · Challenged on appeal: true · Appellate outcome: modified
Objects of relevance
Policy considerations
- Need to avoid prolonged litigation in patent cases
- Equity considerations in profit accounting for inadvertent infringers
Authorities
Cited authorities (4)
Related cases (5)
Statutes
- Rev. St. § 4900 (notice requirement for patent damages)
Standards & doctrines
- Doctrine of equivalents
- Profit apportionment for improvements
- Waiver doctrine for unpreserved issues
Legal principles applied
- Infringer must account for entire profits unless improvements contribute
- Notice requirements under Rev. St. § 4900 can be waived
- Appellate courts may set profits to avoid further delay
Notable quotes
“If the infringer uses in his infringing machine the essential part of the patented machine, without which his infringing machine is worthless, it is not an adequate answer to the demand for the payment of his entire profits that his substituted equivalents improved the work of the corresponding elements of the infringed machine.”SHIPMAN, Circuit Judge — Discussion of profit accounting and apportionmentEstablishes principle that improvements do not negate liability for full profits if essential part taken
“It is too late to raise for the first time in an appellate court technical questions of pleading or proof which are not jurisdictional in their character, and which were not raised either in the pleadings or before the trial courts, where defects might have been remedied, and which must therefore be considered to have been waived.”SHIPMAN, Circuit Judge — Addressing unpreserved notice issue under Rev. St. § 4900Emphasizes waiver doctrine for issues not raised below