Crosby Steam Gage & Valve Co. v. Consolidated Safety Valve Co.

delivered the opinion of the court.

On the 27th of May, 1879, the Consolidated Safety Valve Company, a Connecticut corporation, brought a suit in equity in the Circuit Court of the United States for the District of Massachusetts, against the Crosby Steam Gage and Valve Company, a Massachusetts corporation, for the infringement of letters patent No. 58,294, granted to George W. Richardson, September 25, 1866, for an improvement in steam safety-valves. The claim of that patent was as follows: “What I claim as my improvement, and desire to secure by letters patent, is — A safety-valve with the circular or annular flange or lip o c, constructed in the manner, or substantially in the manner, shown, so as to operate as and for the purpose herein described.”

On the 2d of June, 1879, the same plaintiff brought a suit in equity in the same court against the same defendant, for the infringement of letters patent No. 85,963, granted to the same George W. Richardson, January 19,1869, for an improvement in safety-valves for steam boilers or generators. The claim of that patent was as follows: “ What I claim as new, and desire to secure by letters patent, is the combination of the surface beyond the seat of the safety-valve, with the means herein described for regulating or adjusting the area of the passage for the escape of steam, substantially as and for the purpose described.”

In the answers: in the two suits, the defence of want of novelty was set up, and alleged anticipating patents were referred to; infringement was denied; and it was averred that the valves made and sold by the defendant were the inventions of George II. Crosby, and were described in two patents granted to him and owned by the defendant, one, No. 159,157,

The same proofs were taken in the two suits, and they were heard together in the Circuit Court; in each suit a decree was made dismissing the bill ( 7 Fed. Rep. 768 ); and from each decree the plaintiff appealed to this court. Non-infringement was found by the Circuit Court. This court ( 113 U. S. 157 ) reversed the decree in each case, and directed the Circuit Court to enter a decree in each case sustaining the validity of the, patent, decreeing infringement and awarding an account of profits and damages.

On receiving the mandate of this court in the suit on the patent of 1866, the Circuit Court, on the 18th of- May, 1885,,, entered a decree in conformity therewith and for a recovery by the plaintiff of profits-and damages from February 15, 1879, and ordered a reference to a master to take an account of such profits and damages. A like decree was made on the mandate in the suit on the patent of 1869. The date of February 15, 1879, was taken because that was the time when the title to each of the patents became vested in the plaintiff.

The master took voluminous proofs, and filed his • report on the 5th of August, 1889, covering both of the suits. The report of the master found that the total profits which the defendant had derived from its manufacture and sale of steam safety-valves containing the improvement described and claimed in the patent of 1866, from February 15, 1879, to September 25, 1883, the date of the expiration of the patent, amounted to $40,344.59. Both parties filed exceptions to the report; and on the 11th of October, 1890, the Circuit Court entered a decree overruling both sets of exceptions and awarding to the plaintiff a recovery for the $40,344.59, with interest thereon from August 5, 1889, the daté of the filing of the masters report, and the costs of the suit. From this decree the defendant has appealed. The opinion of the Circuit Court is reported in 44 Fed. Rep. 66 .

The master says, in his report in the case,- in respect to the patent of 1866, Which he calls No. 1184, that, for the period from February 15, 1879, to September 25, 1883,- he attributes

. The specifications and drawings of the two patents of' Richardson are set forth at length in the report of the cases in 113 U. S. 157 . The opinion of this court said (p. 178): “ There is one.structural difference between the two valves, which is now to be mentioned. In the Richardson valve, all the steam which escapes into the open air escapes from the huddling chamber, through a stricture which is smaller than the aper

. In respect to this point, one of the briefs for.-the appellant, now submitted, says: “The appellant’s valve, in this case, known as the Crosby valve and made in accordance with the Crosby patents, is so constructed that it has two ground joints. When the valve rises, by reason of increased pressure, part of the steam escapes-through- one ground joint directly into the open air, and part of the steam escapes through the other ground joint into a huddling chamber, and thence into the air through .orifices which form an aperture less than the ground joint orifice through which it enters said huddling chamber. Although the relief to the boiler caused by the blowing off of the valve was, in consequence of this double mode of escape for the steam, due to the combined effect of its escape through the huddling chamber and its escape through the second ground joint, yet, as all that part of the steam which entered the huddling chamber passed through the strictured opening, the court held that the valve contained the Richardson dévice, and was, therefore, an infringement.”

The master further.says, in his report: “The defendant^ claimed before me.that the complainants,-in the accounting in 1184, which relates only to the Richardson patent of 186.6, should prove specifically the value of the invention secured to them under that patent as used by the defendants, and* that, as it was claimed by complainants (and the Supreme Court has so decided) that defendants used also Richardson’s invention of 1869, the value of the invention secured to. the com

The master also found that the plaintiff had suffered no damages in addition to the profits to be assessed against the defendant, in regard to the patent of 1866.

The defendant’s exceptions to the master’s report cover the following points: (1), The disallowance to the defendant of the sum of $1978.34; (2) the finding that the Richardson valve sold by the plaintiff contained the invention set forth in the patent of 1866; (3) the finding that the entire commercial value .of the valves made and sold by the defendant, between February 15, 1879, and September 25, 1883, was due to the improvement covéred by the patent of 1866; (4) the failure to find that the plaintiff was entitled to recover only for the ascertained value of the improvements covered by the two patents over and above the value of previous safety-valves known to the art and open to be used by the defendant; (5) the failure to require the plaintiff to show what in fact was

The Circuit Court, held by Judge Colt, says in its opinion: “ In judging of the correctness of the method pursued by the master in his estimation of defendants’ profits, the construction put upon the Bichardson 1866 patent, and the language used in respect thereto, as embodied in the opinion of the Supreme Court, cannot be disregarded. It was clearly the duty of .the master in his findings, as it is also the duty of the court at the present time, to give full force and effect to the opinion of the Supreme Court. If the contention of the defendants is sound, that the Supreme Court, in their interpretation of the Bichardson 1866 patent, gave too much prominence to the feature known as the ‘ huddling chamber with a strictured orifice,’ it is for them, upon appeal, to obtain some modification of that opinion; but so long as it stands as the 'opinion of that court, the views therein expressed should be strictly carried out. The position, therefore, taken by the .defendants, that the complainants are only entitled to nominal damages, because, as they say, the Bichardson valve of commerce does not contain the huddling chamber with a strictured orifice, or, in other words, a huddling chamber with an aperture for the exit of the steam into the open air which is of' smaller area than the aperture at the ground joint, I cannot regard as sound, in view of the opinion of the Supreme Court. That court construed the Bichardson patents, and it held that defendants’ valve was within those patents, and it gave a broad construction to the Bichardson 1866 patent.”

The opinion then says that the court approves and adopts

In the former opinion of this court, at 113 U. S. 170 , it was said: “In the present case the defendant has introduced in evidence the before-named English patents to Ritchie, "Webster and Hartley, and the English patent to William Naylor, No. 1830, granted July 1, 1863; and also letters patent- of the United States, No. 10,243, granted to Henry Waterman, November 15, 1853, and the reissue of the same, No. 2675, granted to him July 9, 1867. In view of all these patents, and of the state of the art, it appears that Richardson was the first person who described and introduced into use a safety-valve which, while it automatically relieved the pressure of steam in the boiler, did not, in effecting that result, reduce the pressure to such an extent as to make the use of the relieving apparatus practically impossible, because of the expenditure of time and fuel necessary to bring up the steam again to the proper working standard. His valve, while it automatically gives relief before the pressure becomes dangerously great, according to the point at which the valve is set to blow off, operates so as to automatically arrest with promptness the reduction of pressure when the boiler is relieved. His patent of 1866 gave a moderate range of pressure, as the result of the proportions there specified, and his patent of 1869 furnished a means of regulating that range of pressure, by a screw-ring, within those narrow limits which are essential in the use of so subtle an agent as steam. In regard to all the above patents adduced against Richardson’s patent of 1866, it may be generally said that they never were, in -their day, and before the date of that'"patent, or of Richardson’s invention, known or recognized as producing any such result as his apparatus of that patent produces, as above defined. Likenesses in them, in physical structure, to the apparatus of Richardson, in important particulars, may be pointed out, but it is only as the anatomy of a corpse resembles that of the living being. The prior structures never effected the kind of result attained by Richardson’s apparatus, because they lacked the thing which gave success. They did not have the retarding stric

The opinion also said: “ It appears to have been easy enough to make a safety-valve which would relieve the boiler, but the problem was to make one which, while it opened with increasing power in the steam against the increasing resistance of a spring, would’ close suddenly and not gradually by the pressure of the same spring against the steam. This was a problem of the reconciliation of antagonisms, which so often occurs in mechanics, and without which practically successful results are not • attained. What was needed was a narrow stricture to hold back the escaping steam, add secure its expansive force inside of the lip, and thus aid the direct pressure of the steam from the boiler in lifting the valve against the increasing tension of the spring,, with the result that, after •only a small, but a sufficient, reduction in the boiler pressure, the compressed spring would, by its very compression, obtain the mastery and close the valve quickly. This problem was

The opinion then considers the , prior patents of Ritchie, Webster and Hartley, and holds that they did not anticipate Richardson’s invention of 1866. In regard to the Webster patent, it says: “ The Webster patent shows a huddling chamber and a stricture. But the evidence shows that valves made with the proportions shown in the drawing of Webster work with so large a loss of boiler pressure, before closing, as to be practically and economically worthless. Webster’s patent describes a means of making the area for the escape of steam adjustable, consisting in adjusting up and down, on a smooth valve-stem, a sliding collar or flange, and fixing it in place by a set-screw. But it .does not show the screw-ring of Richardson, with its minute delicacy of adjustment and action.” Further it says: “ Richardson is, therefore, entitled to cover, by the claim of his patent of 1866, under the language, ‘a safety-valve with the circular or annular flange or lip c c, constructed in the manner, or substantially in the manner, shown,

It is contended by the defendant that the proof shows that a valve made in the required proportions of the patent of 1866 and in accordance with its drawing and description, without the improvement of 1869, and with the area of escape at the outlet smaller than the area of entrance at the ‘ground joint, is not as economical or as good in action as the earlier Webster valve; that a valve constructed in accordance with the patent, of 1866 is not an economical valve, but operates with a large loss of steam; that the valves sold by the plaintiff as Richardson valves, being the same in pattern as those sold by it since it began business, are not constructed so that the area of escape from the huddling chamber is smaller than the area of entrance from the ground joint, but on the contrary, it is-about twice as large; and that the plaintiff has never put a valve on the market with the orifice of escape from the huddling chamber smaller than the orifice of entrance into that chamber.

We see no reason, in the record, for disturbing the conclusions of the master and the Circuit Court, that the entire commercial valúe of the valves made and sold by the defendant Was due to the improvement covered by the patent of 1866,. and that the plaintiff’s valves of commerce all of them contain' the improvements covered by the patent of. 1866. Moreover, the master reports profits only, and finds that the plaintiff has-suffered no damages' in addition to the profits to be assessed against the defendant. If there had been an award of damages, and the loss of trade by the plaintiff, in consequence of the competition by the defendant, had been an element entering into those damages, it would have been a material . fact to Be'Shown by the plaintiff that it was putting on the market, goods embodying the Richardson invention ; but, as the plain- ■ tiff recovers only the profits made by the defendant in using in its business the Richardson invention, it is immaterial whether' or not the plaintiff itself employed' that invention. The-

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 Richardson invention covered by the patent of 1S66, or have any commercial value ; and that, within the case of Garretson v. Clark, 111 U. S. 120 , it appears, by reliable and satisfactory evidence, that the profits made by the defendant are to be calculated 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.

• As to the assignment of error that the master did not ascertain what part of the profits derived by the defendant was due to the patented improvements covered by the two patents to Crosby, the master said, in his report, as before quoted: “ The defendants claim that some of the profits which they have made are due to the peculiar form of their valves, but the form which they used in making their valves, was the form in which they clothed the Richardson invention, the- life of their valves, and without that life the Crosby form is worthless.” The defendant contends, that the master ought to have found, upon the evidence, that, with the exception of an ■allowance of a nominal sum for profits on account of the Richardson invention, the profits of the defendant accrued from its employment of the Crosby inventions. This contention was made before the master, .and was overruled by him. There was some evidence before the master relating to the form of the Crosby valve, to the effect that it had an encased spring, and was readily attached and adjusted, and that those

It appearing that the defendant’s valve derived its entire value from the use of the Richardson invention covered by the patent of 1866, and that the entire value of the defendant’s valve, as a marketable article, was properly and legally attributable to that invention of- Richardson, the plaintiff is entitled to recover the entire profit of the manufacture and sale of the valves. Elizabeth v. Pavement Company, 97 U. S. 126 , 139; Root v. Railway Company, 105 U. S. 189 , 203; Garretson v. Clark, 111 U. S. 120 ; Callaghan v. Myers, 128 U. S. 617 , 665, 666; Hurlbut v. Schillinger, 130 U. S. 456 , 471, 472.

The defendant contends that the master and the Circuit Court erred in disallowing as a credit to the defendant in diminution of the profits reported, the sum of $1978.34, it being, contended that that was an expense suffered by the defendant in modifying and reconstructing certain valves to render them more perfect and more salable. These were valves made by the defendant and destroyed by it before sale, or after a sale and an exchange for other valves: which destroyed valves did. not appear in the account on either side, thus becoming unsold valves. • The expense thus referred to is one incurred in making experimental and.defective valves.

In regard to this item, the master said in his report: “ Item 7 is for modification and reconstruction of iron valves. The costs of the reconstructed valves have already been charged in the costs of valves for the periods in which the reconstruction,-so called, took place. The old valves were destroyed and, a salvage made of such parts as were of value or could be-

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 thirty-eight 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 [n 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

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 defendant 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 payment, 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 compensation 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 Illinois 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 interés^ until after their amount has-been judicially.ascertained"; and the provision introduced

: 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 mastér. 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, § 8.

The'decree of the Circuit Court is

Affirmed.

The Chief Justice and Me. Justice Gray were not present . at the argument, and took no part in the decision of this case,