*986OPINION.
Littleton:The taxpayer contends that its earnings are attributable solely to certain patents owned by it and that it should be permitted to determine a value therefor as of March 1, 1913, by averaging its earnings for the five years immediately preceding the year 1913, and capitalizing the resultant on a 10 per cent basis; depreciating the value so determined over the period from March 1, 1913, to April 6, 1926, the date the patent of April 6, 1909, will expire. In its petition the taxpayer also raised the issue that the Commissioner erred in limiting the amount at which the patents could be included in invested capital to 25 per cent of the par value of the stock issued therefor, claiming that it should be permitted to restore to invested capital certain amounts by which it reduced its patent, surplus, and manufacturing account during the years 1907 to 1917, inclusive. At the hearing, however, the taxpayer’s counsel conceded that in any event the patents in question could not be included in invested capital at more than $15,000, which is 25 per cent of the par value of the total stock or shares of the corporation outstanding on March 3, 1917.
The evidence in this appeal discloses that the taxpayer corporation was organized with capital stock of the par value of $60,000, all of which was issued to Cheatham in exchange for his patents of 1895 and 1898, together with such other patents as might subsequently be granted to him as modifications or improvements upon the two patents mentioned. The corporation had no other assets. The patent of 1895 proved to be worthless. It is contended that the patent of 1898 covered a basic principle and that, therefore, the taxpayer’s possession and ownership of that patent, together with the possession and ownership of the patent of 1902, 1905, and 1909, covering improvements on the method of applying the basic principle involved in the patent of 1898, enabled the taxpayer to place on the market a switching device that ivas both salable and capable of successful operation, giving it thereby a practical monopoly in the field of automatic electric switches. Based upon the claim that the 1898 patent covered the basic principle, it is contended that the patent of 1909 covered the improvement that made the device successful and *987profitable, and, as tbe other patents issued in the interim, 1898-1909, had no real value except when used in conjunction with the patent of 1909, the value of the group of patents as of March 1, 1913, should be depreciated over the remaining life of the patent of 1909 although the other patents have expired.
The taxpayer cited in support of its contention that it possesses, and did possess after the issuance of the patent of 1909, a practical monopoly in its field, the cases of Transit Development Co. v. Cheatham Electric Switching Device Co., and Nassau Electric Railroad Co. v. Cheatham Electric Switching Device Co., 194 Fed. 963. In those cases which were tried before a jury, it was held that a device used by the Transit Development Company and the Nassau Railroad Company, known as “Type 14,” was an infringement of the device manufactured for and sold by the taxpayer under the Cheat-ham patents of 1898 and 1909. However, it appears from the later case of Cheatham Electric Switching Device Co. v. Brooklyn Rapid Transit Co., et al., 227 Fed. 613, which was not cited by the taxpayer, that the Brooklyn Rapid Transit Company, et al., were, in 1915, using a successful electric mechanical switch which was not an infringement of the device manufactured under the Cheatham patents. In that case, tried in 1915, and subsequently affirmed by the Circuit Court of Appeals for the Second Circuit, the taxpayer relied on the Cheatham patent of 1898, as covering a basic principle. The court, however, held that the patent of 1898 did not cover a basic principle but only a device, and that therefore the device used by the Rapid Transit Company and others and known as “Type 15,” while employing the same basic principle as the Cheatham device, did not infringe upon it. The District Court in deciding the case said in part:
But similarity of result and equivalency in function does not make the parts mentioned the equivalent, as a whole, of the specific device set forth in claim 3 and the specifications of the Cheatham patent; nor does the court consider that the so-called “ pioneer ” claim of Cheatham, for a practical working device, entitles him to the use of all other practical working devices performing equivalent results.
It appears incidentally that the Patent Office had granted a patent for the No. 15 switch to one Roy V. Collins upon the 7th day of September, 1915, under No. 1,152,791. An interference in the Patent Office between Mr. Collins and Mr. Cheatham was the occasion for an affidavit by Mr. Cheatham, claiming as an inventor the so-called invention of Mr. Collins. In this affidavit Mr. Cheat-ham stated that the invention was new.
While it is not necessary to hold that Mr. Cheatham has thereby intentionally disavowed a broad construction of the patent in suit, nevertheless the situation created by the affidavit of Mr. Cheatham and the subsequent issuance of a patent to Mr. Collins is so entirely consistent with the interpretation which the court is making of the patent in suit that Mr. Cheatham would seem to be unable to rebut the effect of his affidavit and the presumption of the Collins patent, and it must be held that Mr. Cheatham himself has looked upon the language of his original patent as an unsatisfactory statement of what he now considers his real invention.
In McClain v. Ortmayer, 141 U. S. 419, 12 Sup. Ct. 76, 35 L. Ed. 800, the patentee was held to have abandoned an idea which he had not included in an earlier patent and which he .had sought to cover by a second patent held invalid. The present ease leaves Mr. Cheatham in a similar situation. The evidence shows that he may have been the first to use an idea which by its application embodied a principle broader than the idea stated in his patent. It does not appear that he understood the application of the broad principle to be of itself an invention, nor that in describing his device he attempted to *988do more than to accurately state the mechanical means which he had in mind to produce the result which he realized was to be desired. He did not attempt to claim the idea of accomplishing this result by all possible mechanical means for so doing. He claimed as invention a limited physical embodiment of what might have been expressed in the form of a device for a general purpose, with every range of equivalents in its parts.
The Patent Office might have granted, if Mr. Cheatham had made the claim, a broader patent; but the court cannot now extend the scope of the present patent, and do for Mr. Cheatham what he did not do exactly 17 years ago, when he stated his own claim of his invention and of what he desired protection by a patent.
We are unable upon consideration of the evidence in this appeal to agree with the taxpayer that its earnings are and were attributable entirely to its patents. No one of its patents covered a basic principle, and other manufacturers were, and are, free to use the same principle used by Cheatham, so long as the devices manufactured by them do not infringe upon the Cheatham device. Other devices, capable of performing the same service, but not infringing upon the Cheatham device, were produced, marketed, and placed in operation, and we therefore conclude that the taxpayer’s earnings were not only due to the patents it owned, but largely to good management and the ability of its salesmen to market its product in the face of competition.
It is incumbent upon the taxpayer to produce facts sufficient to establish a value as of March 1, 1913, for its patents before it can be allowed deductions for exhaustion in subsequent years; also to establish a value for them as of the date that they were acquired, in order to determine the amount at which they may be included in invested capital. The taxpayer has attempted to establish a value as of March 1, 1913, upon the theory that all of its earnings were attributable to the patents and to nothing else. It however has failed so to do. The patents in question may have possessed some value on March 1, 1913, and at the dates they were acquired by the taxpayer, but if such value existed, it has not been established by evidence sufficient to enable this Board to arrive at the amount thereof. Since there is no evidence before the Board upon which it can determine, with any degree of satisfaction, a value for the patents, either on March 1, 1913, or at the dates the taxpayer acquired them from Cheatham, the determination of the Commissioner must be approved.