On Rehearing.
BINGHAM, Circuit Judge.Since our opinion in No. 2525 was handed down on March 10, 1931, the plaintiffs, appellees, have filed a petition for rehearing and a rehearing'has been had on the question whether we were right in overruling the action of the District Court in awarding to the plaintiffs in this contempt proceeding the profits which the defendant had made in the sale of its new infringing device.
Diligent search on the part of counsel and of this court has failed to discover any case in which this question has been directly *708raised and decided by a Court of Appeals or by tbe Supreme Court.
In Searls v. Worden, 13 F. 716, 717, Brown, District Judge, sitting in the Circuit Court for the Eastern District of Michigan, in 1882 had a similar question under consideration. That was an equity patent suit in which an interlocutory decree and injunction had been entered restraining the defendant from infringing the plaintiff’s patent for whip sockets. On the day the injunction issued, the defendant sold 62 gross of whip sockets in violation of the injunction. Contempt proceedings having been brought, the defendant was adjudged guilty of contempt, and the case was referred to a master to compute the amount of profit realized by the defendant, together with complainant’s costs and expenses. In the course of the opinion, the court stated: “The question now'arises as to the amount of fine to be imposed, and its distribution. The main question is whether the fine ought to be assessed at a gross sum, in the nature of a penalty, to be paid over to the government, as in an ordinary criminal proceeding, or whether it may be determined by the amount of profit realized by the defendant, and the costs and expenses incurred by the complainant, and the aggregate ordered to be paid over to the complainant in reimbursement of his damages.” And after some further observations in relation to the matter as to the practice in state courts under state statutes, the court further observed: “But I notice that in several eases the federal courts have adopted an analogous practice, and imposed a fine equivalent to the profits made by the defendants, and the costs and expenses of complainant, and directed the same to be paid over to the latter by way of reimbursement. In re Mullee, 7 Blatchf. 23 [Fed. Cas. No. 9,911]; Doubleday v. Sherman, 8 Blatchf. 45 [Fed. Cas. No. 4,020]. The validity of this practice is not discussed in these eases, and, without expressing any opinion of my own, I am disposed, with some hesitation, to follow them until corrected by a higher court.”
The profits from the sale of the whip sockets being found to be $682 and the complainant’s expenses incurred in the contempt proceeding $500, not including counsel fees, which were disallowed, the eourt imposed their aggregate amount of $1,182, as a fine for the violation of the injunction and ordered that that amount, when collected, be paid over to the complainant.
A final decree having been entered for the complainant, an appeal was taken to the Supreme Court. 121 U. S. 14, 7 S. Ct. 814, 30 L. Ed. 853. In the Supreme Court the final decree in the equity suit and the interlocutory decree in the contempt proceeding were reviewed. It was held that the complainant’s patent, upon which the suit was based, was invalid. As to the jurisdiction of the Supreme Court to review these contempt orders, the appellee contended that the contempt proceedings were criminal in character and therefore the court was without jurisdiction to review the orders. The eourt, however, pointed out that the contempt proceeding was brought in the equity suit and that the fine imposed was remedial in character, being made up of the profits of the defendant from the sale of the whip- sockets and the expenses incurred by the complainant in the contempt proceeding, and that the fine was directed to be paid to the complainant; and, such being the case, the interlocutory orders were subject to review on the appeal from the final decree in the suit. It then stated that the complainant’s right to the fine, if it existed at all, was founded on his right to the injunction, and that was founded on the validity of his patent; and, the patent having been found invalid, the preliminary injunction was unwarranted and the orders imposing the fine could not be upheld. In its decree it reversed the final decree and the contempt orders and remanded the case, with ' directions to dismiss the bill, but without prejudice to the power and right of the Circuit Court to punish the contempt referred to in those orders by a proper proceeding— meaning, no doubt, that the Circuit Court, on proceedings being instituted for criminal contempt, had the right to impose a fine payable to the United States for the contempt of eourt. It is evident that in this ease the Supreme Court did not deeide that, in a contempt proceeding, in a patent suit, profits made by a defendant through violating an injunction could be considered as an element in determining the amount-of the fine imposed by way of relief to the complainant. However, what was here spoken of as profits was nothing but damages which the plaintiff suffered by reason of the defendants selling the plaintiff’s patented whip sockets.
The only other patent case involving contempt orders before the Supreme Court which has been brought to our attention as having a possible bearing on the question is the Matter of Christensen Engineering Company, 194 U. S. 458, 24 S. Ct. 729, 48 L. Ed. 1072. This was an application to the Supreme Court for a writ of mandamus to re*709quire the Circuit Court of Appeals for the Second Circuit to reinstate and take jurisdiction of a writ of error for a review of an order of the Circuit Court finding the defendant guilty of contempt and fining it. In that ease it appeared that, after an injunction had issued restraining the defendant from infringing the plaintiff’s letters patent, the defendant was adjudged guilty of contempt in disobeying the injunction and was ordered to pay a fine of $1,000, one half to the United States and the other half to the complainant; that a writ of error to review this order was sued out and allowed, by the Circuit Court on March 25,1930, and a transcript of the proceedings certified to the Circuit Court of Appeals; and that, after a hearing on the writ of error, the Court of Appeals dismissed the writ.
The Supreme Court held that the fine payable to the United States was clearly punitive and in vindication of the authority of the court, and, being such, it dominated the proceeding and fixed its character; and that being punitive and not remedial, the method of review was by writ of error and the Circuit Court of Appeals should have taken jurisdiction, without waiting for an appeal from a final decree. This case, certainly, has no bearing upon the question of whether, where the proceedings in contempt are remedial in nature, profits, as such, may be taken into consideration in making up the fine.
McKee Glass Co. v. H. C. Fry Glass Co., 248 F. 125 (3d Circuit), was an equity patent suit in which contempt proceedings were instituted for the violation of a permanent injunction after final decree. In that case the trial court referred all matters of the complainants’ injuries and compensation to a master. The master reported, in round numbers, the following items: Net infringing profits realized by. defendants, $8,000; royalty at 6 per cent, on defendants’ entire sales of $41,713.97, $2.500; complainants’ expenses and costs, and master’s fee, $4,700; additional compensation for complainant’s injuries, $10,000. And the trial court imposed a penalty of $25,151.70. The assignments of error in that ease complained of all these items, except the one for $4,700. But at the argument counsel waived all their assignments except those relating to the item of $10,000 and the royalty item of $2,500. Consequently the question of whether the item of $8,000 profits was a proper allowance was not passed upon. The royalty item of $2,500 was passed upon and was plainly an item of damage. Whether the item of $8,000 represented damage suffered through the infringing sales cannot be gained from the record. At any rate, all objection to the allowance of this item was waived and the question was not considered.
Gordon et al. v. Turco-Halvah Co., Inc., et al. (2nd Circuit) 247 F. 487, is an equity patent suit in which, on March 4,1915, a final decree was entered by consent of both parties adjudging the plaintiffs sole owners and exclusive licensees under the two patents in suit; also adjudging that the defendants had infringed both patents; and enjoining them against making any candy containing the inventions in question, or either of them, or any candy or food products like or similar to those that they, or any of them, had hitherto made. November 8, 1915, the plaintiffs procured an order to show cause why the defendants should not be punished- for contempt. The District Court entered an order finding'the defendants in contempt for violating the provisions of the final decree of March 5, 1915, in respect to one of the patents, but not as to the other, and directed a reference to a special master to ascertain the candy so sold in violation of that decree and the profits obtained therefrom. The master found the defendant’s profits to be $2,129.70, to which he added the plaintiff’s charges and disbursements in the contempt proceeding of $700.92, together with a counsel fee of $750, making in all_ $3,580.62. The District Court confirmed these findings with a modification of the amount of the counsel fee, and an order was entered on February 19,1917, against the defendants, in the sum of $2,784.16, for which execution was directed to issue, and the defendants appealed therefrom.
The opinion in this case does not discuss the question, and it apparently was not raised, whether the District Court, after final decree in the original equity suit, could, in a summary eontempt proceeding, direct an accounting of profits made by the defendants from the infringing sales and take those profits into consideration in determining the amount of the fine to be imposed. No such question was raised or decided. The sum reported as profits was probably nothing but damages due to infringing sales.
Christensen Engineering Co. v. Westinghouse Air Brake Co. (2d Circuit) 135 F. 774, is the same case above referred to under the name of the Matter of Christensen Engineering Co. that was before the Supreme Cdurt, and involved the action of the Court of Appeals in two contempt proceedings which it was directed by the Supreme Court to review *710on writs of error. In this case the contempts consisted in violations of an interlocutory injunction restraining the defendant from infringing plaintiff’s letters patent. In both contempt proceedings decrees had been entered finding the defendant guilty of violating the interlocutory injunction. In the first contempt proceeding the order or decree fined the defendant $1,000 and directed one half the fine to be paid to the clerk for the use of the United States and the other half paid to the complainants in the suit. In the second contempt proceeding the order or decree fined the defendant $4,000 and directed a like disposition of the fine.
The Court of Appeals affirmed the orders of the District Court so far as they imposed penalties payable to the United States, but reversed the orders so far as they directed payments to be made to the complainant, as the ease did not disclose that the latter orders were “based upon any proved items of loss or expense”; that “a fine exceeding the indemnity to which the plaintiff is entitled is purely punitive”; and that, “when it is imposed by way of indemnity to the aggrieved party, it should not exceed his actual loss incurred by the violation of the injunction, including the expenses of the proceedings necessitated in presenting the offense for the judgment of the court.” And where such expense is not shown, the expense item should be limited to the taxable costs.’
1 Cheatham Electric Switching Device Co. r. Transit (Development Co. (2d Circuit) 261 F. 792, 796, was an appeal from a decree in a patent equity ease, in which review was "also sought of an interlocutory decree entered in a contempt proceeding. The plaintiff apparently complained that the District Court erred in refusing to make the punishment in the contempt proceeding larger than it did. In considering the matter Judge Hough, speaking for the Circuit Court of Appeals, said:
“Contempt is not to be regarded as a source of revenue or additional damages to a complainant. A civil contempt, such as this, may result in reimbursing complainant, not for infringements as to which he may seek damages and profits before a master, but for losses and expenses to which he is subjected by the offender’s contumacious conduct. This record shows no loss of any kind to plaintiffs by reason of defendant’s delay in disconnecting the aforesaid apparatus, and its expenses were reasonably covered by the $150.”
This decision of the Circuit Court of Appeals of the Seeond Circuit, like its other decision in Christensen Engineering Co. v. Westinghouse Air Brake Co., indicates that, in a civil contempt proceeding brought in an equity ease, the fine constituting the complainant’s reimbursement should consist of losses (damages) and expenses to which he has been subjected by the defendant’s contumacious conduct; and that it should not include profits made through infringing sales which did not damage the plaintiff.
This seems to be the attitude of the Court of Appeals in the Sixth Circuit, as will be seen from an examination of the case of Monroe Body Co. v. Herzog, 13 F.(2d) 705, 706. That was an appeal from a decree of the District Court in which it was sought to review an order or decree in a contempt proceeding instituted pending an accounting in the original ease in which it was filed. In the contempt proceeding a fine was imposed to be paid to the plaintiff on account of the defendant’s continuing infringements. In discussing the latter fine, the court said:
“The specific objection against the imposition of the private penalty is that it was made additional to the damages and profits that might be recovered in the pending accounting, and was not to have any effect upon such accounting. M)Fe see no objection to this. A private penalty of this kind is imposed, not to compensate for assessable damages and profits, but with reference to those items of damages which are not thus assessable.”
The Court of Appeals in this circuit in the case of Kreplik v. Couch Patents Co., 190 F. 565, 569 (1st Circuit), in a decision written by Judge Hale, reached a like conclusion. That was an equity patent suit in which proceedings for contempt were instituted against the defendant for breach of an injunction restraining him from infringing the plaintiff’s patent. He was found guilty of contempt and was ordered to pay a fine of $500 to the clerk of court for the use of the petitioner. In that case it was said:
“In Gompers v. Buck’s Stove & Range Co., 221 U. S. 418, 31 S. Ct. 492, 55 L. Ed. 797 [34 L. R. A. (N. S.) 874], the Supreme Court has lately passed upon this question. The court clearly draws the vital distinction between proceedings for civil contempt, which are between the original parties, and proceedings at law for criminal contempt, which are between the public and the defendant. The court holds that the proper remedial relief for a disobedience of an injunction *711in the equity cause before it would have been to have imposed a fine for the use of the complainant, measured in some degree by the pecuniary injury caused by the act of disobedience.
“The two aspects of contempt proceedings have often been before the Circuit Court in this circuit, where it has been clearly recognized that in an equity cause a fine for contempt imposed for the use of the petitioner is not a punitive fine, but merely indemnity to the petitioner for the loss occasioned to him by the offensive acts of the defendant.”
In Gompers v. Buck’s Stove & Range Co., 221 U. S. 418, at pages 443, 444, 31 S. Ct. 492, 499, 55 L. Ed. 797, 34 L. R. A. (N. S.) 874, the court said:
“In this case the alleged contempt did not consist in the defendant’s refusing to do any affirmative act required, but rather in doing that which had been prohibited. The only possible remedial relief for such disobedience would have been to impose a fine for the use of complainant, measured in some degree by the pecwniafy injury caused by the act of disobedience.”
The Gompers Case was not a patent case, but it was an equity case in which the contempt proceedings were brought. The .fact that it was not a patent case can make no difference as to the nature of the elements of which the penalty may consist. That case, the Kreplik Case, and the cases in the Second and Sixth Circuits, point out, if they point out anything, that a remedial fine in a contempt proceeding is to be based upon the pecuniary injury or damage, which the act of disobedience caused the complainant, and such reasonable expenses as the act of disobedience occasioned through the bringing of the proceeding. It is to compensate him for his damage thus occasioned. It is not an attempt to restore to him the profits which he might recover in an equity suit for discovery and accounting, where the sales were so conducted that the plaintiff could not be shown to have been thereby pecuniarily damaged.
If the plaintiffs in this case had been able to prove that the infringing sales, out of which the profits were realized, caused them to suffer pecuniary damage, or had been able to prove what would have been a reasonable royalty for the use of their patent and that they had lost the same through the defendant’s conduct, they could have established a case for the allowance of damages arising out of the infringing sales. But they failed by either of these methods to show that they were pecuniarily injured, and neither the master nor the court found that they suffered any damages.
This contempt proceeding in no way affects any equitable remedy which the plaintiffs have or may have had to recover profits, and the case of Root v. Railway, 105 U. S. 189, 26 L. Ed. 975, does not controvert this proposition. That ease proceeds upon the theory that, in the absence of some recognized ground of equity jurisdiction, the owner of an expired patent cannot maintain a bill in equity for profits; that a bill “for naked'ae-count of profits” will not suffice. In' this respect the plaintiffs’ equitable remedy, if they have any, does not stand differently from what it would if this court had no jurisdiction to entertain the contempt proceeding and had dismissed it.
In view of the conclusion we have reached, our previous order in this case is affirmed.