Westinghouse Electric & Mfg. Co. v. Wagner Electric & Mfg. Co.

SANBORN, Circuit Judge

(dissenting). A clear conception of the desideratum, and of the root, principle, or mode of operation of an invention devised to attain it, is indispensable to a correct decision of a question of infringement, because that device or combination is the mechanical equivalent of another under the law of patents which accomplishes the desideratum in substantially the same way, although the devices differ in name, form, location, or shape. Machine Company v. Murphy, 97 U. S. 120, 125, 24 L. Ed. 935; Winans v. Denmead, 15 How. 330, 342, 14 L. Ed. 717; Blandy v. Griffith, 3 Fish. Pat. Cas. 609, 616, 3 Fed. Cas. 675,678. The claim of the invention involved in this case is:

“The combination, substantially as described, of an electric converter constructed with open spaces in its core, an inclosing case, and a nonconducting fluid or gas in said case adapted to circulate through said spaces and about the converter.”

.The specification of a patent, which forms a part of the same application as its claim, must be read and construed with it, to ascertain the true meaning and actual intent of the parties to the contract which the specification and the claim evidence, for the purpose of determining what the principle or mode of operation was which the parties intended to secure to the patentee. Seymour v. Osborne, 11 Wall. 516, 547, 20 L. Ed. 33; O. H. Jewell Filter Co. v. Jackson, 72 C. C. A. 304, 308, 140 Fed. 340, 344. Prior to the invention under consideration it had been impracticable to use converters cooled by the natural circulation of air which had a capacity of more than 10 kilowatts. But by the use of the patentee’s combination, by means of which a circulation of oil through and around the converter in an inclosed case was effected, converters with a capacity of 500 kilowatts became serviceable and merchantable. The following terms of the specification show the object and the principle or mode of operation of the invention: •

“The object of this invention is to provide a simple and efficient converter, which will not become overheated when employed for a long time in transforming currents of high electromotive force. * * * The core is preferably composed of thin plates of soft iron, a, a. * * * The plates are preferably constructed with two rectangular openings, ei and es, through which the'wires pass. * * « Each group of — say five or six — plates thus applied is preferably separated from the succeeding group by air spaces. These may be produced by passing tubes, fi, fi, which may be of soft iron or other metal, or of vulcanized fiber, along the lengths of the plates. It may be sufficient in other instances to block the groups of plates apart at intervals, instead of extending *371tho Lanes tho entire length. * * * Preferably, also, the primary and .secondary coils, (X (X J(ro separated from each other in a similar manlier. * * * It may bo preferred in some instances to surround the convertor with some oil or paraffine, or other suitable material, which will assist in preserving insulation and will not lie injured by beating. This material, when in a liquid form, circulates through Hie Lilies and the intervening spaces of the coils and plates, and preserves tho insulation, excludes the moisture, and cools the converter. The en1 ire convertor may be sealed into an inclosing case.'’

The claim under consideration is restricted to the invention of the combination, substantially as described in this specification, of an electric converter with open spaces in its core, an inclosing case, and a nonconducting fluid or gas in the case adapted to circulate through the spaces in and about the converter. What was the object of this invention? The prevention of the overheating of the converter, and of every part of it. Wliat was the root. 1he principle, or mode of operation whereby this object ivas to be attained? The circulation of oil in a sealed case over increased radiating surfaces “through the tubes and the intervening spaces of the coils and plates,” whereby the converter is cooled, insulation is preserved, and moisture is excluded. In my opinion the principle of the invention patented under claim 4 is not either the rectangular openings across the planes of the iron plates, nor the tubes between the plates, nor the blocked spaces between them, nor the openings between the coils, nor any of the elements of the combination, all of which are described in the specification as preferably employed, but it is the circulation of the oil over increased radiating surfaces by, means of the combination patented through open spaces in and about the converter, and what Westinghouse secured by this claim was, not the particular openings he specified as preferably made in the core or in the converter, but, as held by the Circuit Court of Appeals of the Second Circuit, in the decision upon which this and other suits for the infringement of this patent rest — ■

“tho means by which the external and internal surface of the heat-producing parts of a converter were cooled by such an arrangement and separation of parts as would permit the circulation about them of oil, and the means for the retention of said oil within and about said surface's whereby the heat from the oil radiated to the surrounding air.” Westinghouse Electric & Mfg. Co. v. Union Carbide Co., 117 Fed. 495, 498, 55 C. C. A. 230.

The defendant first made and sold a converter with open rectangular spaces in the soft iron plates in which the coils were inserted, with open spaces between the plates, and with, open spaces between the coils, and it was adjudged an infringement. It then made and sold a converter, called “Type M,” with all the open spaces specified by the patentee except those between the plates, and with spaces between the coils and the plates, and it seeks to escape infringement because it has secured the requisite increased radiating surface by substituting the open spaces between the plates and the coils for the open spaces between the plates described by Westinghouse, while it retains all the other open spaces and details of his description. But the substance of this invention is the circulation of oil around and through increased radiating surfaces in a converter inclosed in a sealed case, and the locality in which the increased surfaces are placed and the forms in which they are embodied are immaterial upon the question of infringement, *372because the principle or mode of operation is the same, whether the surfaces are exposed by openings between the iron plates through which the oil circulates to and along the coils from without or by openings between the iron plates and the coils through which the oil may pass. In either case the object of the invention is attained by the circulation of the oil over the increased radiating surfaces of a converter in a sealed case.

It is contended that the spaces between the coils and the plates are more efficient in cooling the coils which are more likely to become overheated than the plates. But in my opinion the evidence fails to sustain this contention, and if it were sustained the defendant could not escape infringement by appropriating and then improving the patented combination of the complainant. The spaces between the coils and the plates are the plain mechanical equivalents of the spaces between the plates, because they do the same work in the same way. They cool the cpnverter by the circulation of the oil through them and over increased radiating surfaces in a closed case, and—

“if two devices do the same work in substantially the same way and accomplish the same result they are the same, even though they differ in name, form, or shape.” Machine Company v. Murphy, 97 U. S. 120, 125, 24 L. Ed. 935.
“Where the whole substance of the invention may be copied in a different form, it is the duty of courts and juries to look through the form to the substance of the invention for that which entitled the inventor to his patent and which the patent was designed to secure. When that is found there is an infringement, and it is not a defense that it is embodied in a form not described and in terms claimed by the patentee.” Winans v. Denmead, 15 How. 330, 342, 14 L. Ed. 717.

Because the open spaces between the coils and the plates, which the defendant substituted for the open spaces between the plates, were the mechanical equivalents of the latter, and because the defendant’s type M was a copy of the whole substance of the complainant’s invention, that converter seems to me to constitute an infringement of the fourth claim of the Westinghouse patent. Moreover, the limitation of the words “open spaces in the core” in this fourth claim to the open spaces between the plates of the core seems to me to be unwarranted by the claim and specification (1) because the spaces between the plates are the subject of a specific claim, No. 2 in this patent, and therefore these spaces are presumably not covered by the general claim of the combination which is here in suit; and (2) because the specification describes three other classes of open spaces in the core, to wit, “two rectangular openings, e1 and e3, through which the wires pass,” “tubes, f1, f1, which may be of soft iron or other metal, or of vulcanized fiber, along the lengths of the plates,” and the spaces between the coils, which “are separated from each other in a similar manner” — that is to say, by tubes or blocks between them. Not only this, but the open spaces between the plates are not claimed to be, and are not, an essential element of the combination of the fourth claim, but are expressly stated in the specification to be a mere preferable method of constructing the converter, so as to give it increased radiating surface. On this subject the specification reads :

“Each group of — say five or six — plates thus applied is preferably separated from the succeeding group by air spaces. These may be produced by tubes, *373fi, fi. * * * It may be sufficient in ether instances to block the group of plates apart at intervals, instead of extending the tubes the entire length.”

The statute requires that the inventor shall point out the principle of his invention—

“and the best mode in which he has contemplated applying that principle, so as to distinguish it from other inventions; and he shall particularly point out and distinctly claim the part, improvement, or combination which he claims as his invention or discovery.” U. S. Comp. St. 1901, § 4888.

A patent for a combination claimed secures the association of the elements specified, but does not claim or patent any of the elements or details of the specification. They are but a part of the preferable method pointed out, and one who takes and uses the principle and the whole substance of an invention, as the defendant has in its type M, may not escape infringement by the mere substitution of other obviously equivalent means or details for some of the means described by the patentee as a part of his preferable mode of applying his principle. Paper Bag Patent Case, 210 U. S. 405, 418, 28 Sup. Ct. 748, 52 L. Ed. 1122; Deering v. Harvester Works, 155 U. S. 286, 302, 15 Sup. Ct. 118, 39 L. Ed. 153; City of Boston v. Allen, 91 Fed. 248, 249, 33 C. C. A. 485, 486; Reece Button Hole Ma. Co. v. Globe Button Hole Ma. Co.. 61 Fed. 958, 964, 10 C. C. A. 194, 200; Brammer v. Schroeder, 106 Fed. 918, 928, 930, 46 C. C. A. 41.

Turning to the question of damages for the infringement by the manufacture and sale of defendant’s first converter, we are met by the claims that the complainant was entitled to no recovery because the defendant improved the patentee’s combination by adding open spaces between the plates and the coils, and no evidence was produced which separated the profits attributable to that improvement from those derived from the patented combination, and because the defendant did not stand in the relation of a trustee of the profits for the patentee, and owed it no duty to keep them separate, or to account for them. There is some testimony in the record that the coils became more overheated than the plates, and that the open spaces between the coils and the plates tend to cool the former more efficiently than the spaces between the plates. But the spaces between the plates permit the oil to circulate between the plates against and around the coils, and the evidence of the superiority of the spaces between the coils and the plates fails to persuade my mind that the latter constituted any real improvement upon the mode described by the patentee. On the other hand, it leads me to believe that these new spaces and this theory concerning them constituted a mere subterfuge of the defendant, conceived to avoid a just liability for its infringement.

Moreover, the measure of the complainant’s damages was not the difference between the profits the defendant would have derived from the complainant’s combination and those it did derive from its form of it. It was the difference between the profits wihch the defendant derived from the use of the complainant’s combination and those it might have derived from the use of any other combination then known and open to the public which would have produced an equally beneficial result. Tilghman v. Proctor, 125 U. S. 136, 146, 8 Sup. Ct. 894, 31 *374L. Ed. 664. And as there was no such combination or converter the alleged improvement was immaterial. ' The indisputable facts that converters that have a capacity between 10 kilowatts and 500 kilowatts were first made serviceable and merchantable by the complainant’s combination, and that all the 'converters made and sold by the defendant were of this capacity and embodied the complainant’s combination, lie conceded at the foundation of this case. Without the complainant’s, combination, whereby the oil was circulated in a sealed case through the intervening spaces of the coils and plates and around the converter, the defendant never could have used or sold one of its infringing transformers. In the light of these facts the master found that the entire commercial value of the infringing converters manufactured and sold by the defendant during the time concerfied in the^accounting was due to the complainant’s combination. “The conclusions of the master, depending upon the weighing of conflicting testimony, have every reasonable presumption in their favor, and are not to be set aside or modified, unless there clearly appears to have been error or mistake on his part.” Tilghman v. Proctor, 125 U. S. 136, 150, 8 Sup. Ct. 894, 31 L. Ed. 664; Metsker v. Bonebrake, 108 U. S. 66, 2 Sup. Ct. 351, 27 L. Ed. 654. And the evidence not only fails to disclose to my mind any error or mistake in the findings of the master, but compels my assent to his conclusion.

Is the complainant barred from the recovery of any of the profits the defendant derived from its infringement because it failed to separate those derived from its combination from those which the defendant otherwise derived from the infringement? It is settled rule that:

“TTpon a bill 111 equity by the owner against infringers of a patent, tlie plaintiff is entitled to recover the amount .of gains and profits that the defendants have made by tbe use of bis invention. * * !? Tlie reasons tbati liave led to the adoption of this rule are that it comes nearer than any other to doing complete justice between the parties; that in equity profits made by tbe infringer belong to tlie patentee, and not to tbe infringer; and that it is inconsistent with tbe ordinary principles and practice of courts of chancery, either, on the one band, to permit tbe wrougdoer to profit by bis own wrong, or, on tbe other hand, to make no allowance for tbe cost and expense of conducting his business, or to undertake to punish him by obliging him to pay more than a fair compensation to tbe person wronged. Tbe infringer is liable for actual, not for possible, gains. Tbe profits, therefore, which be must account for, are not those which he might reasonably have made, but those which he did make, by the use of the plaintiff’s invention; or, in other words, the fruits of the advantage which he derived from the use of that invention over what he would have had in using other means then open to the public and adequate to enable him to obtain an equally beneficial result. * * * A court of equity which has acquired, upon some equitable ground, jurisdiction of a suit for the infringement of a patent, will not send the plaintiff to a court of law to recover damages, but will itself administer full relief by awarding, as a substitute for legal damages, a compensation computed and measured by the same rule that courts of equity apply to the cáse of a trustee who has wrongfully used the trust property to his own advantage. Root v. Railway Company, 105 U. S. 189, 214, 215, 26 L. Ed. 975.” Tilghman v. Proctor, 125 U. S. 136, 144, 145, 146, 148, 8 Sup. Ct. 894, 31 L. Ed. 664.

Let us apply these rules to this case. The complainant is entitled to> the fruits of the advantage which the defendant derived over what it would have had in using any other known converter then open to the *375public and adequate to enable it to obtain an equally beneficial result. There was no other known converter open to the public which could be used to produce the result obtained by complainant’s combination. The complainant was consequently entitled to all the profits and all the advantages derived from the defendant’s use of the infringing machine. Crosby Steam Gage Valve Company v. Consolidated Safety Valve Company, 141 U. S. 141, 418, 449, 12 Sup. Ct. 49, 35 L. Ed. 809 ; Manufacturing Company v. Cowing, 105 U. S. 253, 26 L. Ed. 987.

The decisions present two classes of cases, each governed by its own measure of profits recoverable for an infringement. Where the patented device is a slight improvement upon an existing and operative machine, which accomplished the same result without as with the patented improvement, as in Garretson v. Clark, 111 U. S. 120, 4 Sup. Ct. 291, 28 L. Ed. 371, where the patented improvement was a slight change in the jaw of a well-known and operative mop head, Keystone Mfg. Co. v. Adams, 151 U. S. 139. 14 Sup. Ct. 295, 38 L. Ed. 103), where the improvement patented was a revolving winged shaft attached to an old operative and successful corn sheller to facilitate the movement of the corn into the sheller, and in Seymour v. McCormick, 16 How. 480, 14 L. Ed. 1024, where the improvement was a driver’s seat upon an operative and successful harvesting machine, the profits from the sale or use of the entire machine, the entire mop head, the entire corn sheller, or the entire harvesting machine may not be recovered by the patentee; hut his recovery is limited to the profits derived from the patented improvement to the operative machine only. And when a complainant has a patent upon improvements to a machine, parts of which are patented to others under prior grants, as in Blake v. Robertson, 91 U. S. 728, 24 L. Ed. 215, the recovery is likewise limited to the profits derived from the complainant’s patented improvement separated from those derived from the improvements patented to others. But where the complainant’s patent secures a new combination, or a new machine, which accomplishes a result never attained before it was invented, the entire profits derived from the infringing device are recoverable; for, since no combination or device existed before the invention by which the desired object could be attained, there is no combination or device but the inventor’s to which the profits can be lawfully attributed. Crosby Steam Valve Company v. Safety Valve Company, 141 U. S. 441, 448, 449, 454, 12 Sup. Ct. 49, 35 L. Ed. 809; Brennan & Company v. Dowagiac Mfg. Co., 162 Fed. 472, 475, 89 C. C. A. 392, 395; Dowagiac Mfg. Co. v. Superior Drill Company, 162 Fed. 479, 481, 89 C. C. A. 399; Elizabeth v. Pavement Company, 97 U. S. 126, 24 L. Ed. 1000; Manufacturing Company v. Cowing, 105 U. S. 253, 26 L. Ed. 987; Hurlbut v. Schillinger, 130 U. S. 456, 9 Sup. Ct. 584. 32 L. Ed. 1011 ; Warren v. Keep, 155 U. S. 265, 15 Sup. Ct. 83. 39 L. Ed. 144; Ruggles v. Eddy, 20 Fed. Cas. No. 12,116; Zane v. Peck (C. C.) 13 Fed. 475; Fifield v. Whittemore (C. C.) 33 Fed. 835; Creamer v. Bowers (C. C.) 35 Fed. 206; Orr & Lockett Hdwe. Co. v. Murray, 163 Fed. 54, 56, 89 C. C. A. 492.

I am unable to escape the conviction that the case in hand falls *376under the latter rule. The claim upon which this suit is founded is for a patented combination of old elements. It is not restricted to the open spaces between the plates, or to the inclosing case or to anything but the association of all the elements described and claimed. Neither the open spaces between the plates, nor the tubes, nor the plates, nor the coils, nor the oil, nor the spaces between the coils, nor any other detail of the combination, is patented by this fourth claim of the patent. Any one may use, without infringing this claim, not only these details, but also any one, or all but one, of the essential elements of the combination. The thing patented is one, single and entire. It is the combination of all the essential elements into the entire new converter which the combination produces. No one can infringe this claim of the patent who does not appropriate this entire new combination and this machine which that combination produces. And as this new combination and the converter it produces accomplished a result never attained before, a result that no known device or combination open to the public while the infringement here in controversy was continuing-would produce, this case is not governed by the rule applicable to slight improvements on old machines which accomplished the same result, before as after the patented improvement, illustrated by Garretson v. Clark, 111 U. S. 120, 4 Sup. Ct. 291, 28 L. Ed. 371, and other cases-of that class; but the complainant is entitled to all the profits which the infringer derived from the appropriation of the new combination and machine. Brennan & Company v. Dowagiac Mfg. Company, 162 Fed. 472, 475, 89 C. C. A. 392; Yesbera v. Hardesty Mfg. Co. (C. C. A.) 166 Fed. 120, 125, and cases of that class cited above.

It appears to me, therefore, that the complainant was the owner of all the profits which the defendant derived from the manufacture and sale of the infringing converter, and that the defendant was in equity a trustee of those profits for the complainant. The Supreme Court declares that it is the established rule of the nation that in a case of this nature a court of equity will administer full relief by awarding “a compensation computed and measured by the same rule that courts of equity apply to the case of a trustee who has wrongfully used the trust-property to his own advantage.” Tilghman v. Proctor, 125 U. S. 136, 148, 8 Sup. Ct. 894, 31 L. Ed. 664. What is that rule ? Chancellor Kent stated it in Hart v. Ten Eyck, 2 Johns. Ch. (N. Y.) 62, 108, in these words:

“The rule of law and equity is strict and severe on sucli occasions. If a party, having charge of the property of others, so confuse it with his own that the line of distinction cannot be traced, all the inconvenience of the confusion is thrown upon the party who produces it, and it is for him to distinguish his own property or lose it.”

The Supreme Court approved this statement of the rule in The Idaho, 93 U. S. 575, 576, 23 L. Ed. 978.

The primary duty of a trustee is to keep the property of his cestui que tcust separate from his own, to keep an account of it, and to deliver it to the cestui que trust. This infringer kept no account of these profits, but mingled them with the profits of its general business, so that it was impossible for it, or for any one, to accurately separate them. *377But the record contains persuasive evidence of the entire amount which the defendant received from the sale of the infringing converters, and that it customarily added to the cost of manufacture and sale a profit: of 25 per cent, to make up its selling price. There is also persuasive evidence of the total amount received by the defendant- from all its business during its infringing years and of the total profits derived from its business during these years. These are ample facts upon which to base a just and equitable finding of the amount of profits which the defendant derived from the sale of these infringing machines. The master has made a finding after a careful consideration of all the evidence upon the subject, and that finding is presumptively right. The indisputable facts that for years the defendant continued to infringe, until it had made and sold infringing machines from which it realized more than $800,000, are sufficient to satisfy the mind that its appropriation of the complainant’s combination was profitable, and when to this is added the evidence that 25 per cent, of the cost was ordinarily added by it to make its selling price, it seems to me to be inequitable to permit the defendant to keep this property of the complainant, because it mingled it with its own, and thus allow it to take advantage of its own, wrong. Of such a defense Lord Chancellor Brougham said in Docker v. Somes, 2 Myl. & Keene, 674:

“When did a court of justice, whether administered according to the rules of equity or law, ever listen to a wrongdoer’s argument to stay the arm of justice grounded on the steps he himself had successfully taken to prevent his iniquity from being traced? Itather, let me ask, when did any wrongdoer ever yet possess the hardihood to plead, in aid of his escape from justice, the extreme difficulties he had contrived to throw in the way of pursuit and detection, saying: ‘You had better not make the attempt, for you will find I have made the search very troublesome?’ The answer Is: ‘The court will try.’ ”

The defendant cites again the cases of Garretson v. Clark, 111 U. S. 120, 4 Sup. Ct. 291, 28 L. Ed. 371, Seymour v. McCormick, 57 U. S. 480, 14 L. Ed. 1024, and Keystone Mfg. Co. v. Adams, 151 U. S. 139, 14 Sup. Ct. 295, 38 L. Ed. 103, in defense of its course; but they are inapplicable, because in such cases of slight improvements on operative machines it is often impossible for the infringer to know the portion of the profit attributable to the improvement, and hence its duty to keep that part separate is not so imperative. But where, as in the case in hand, the complainant is entitled to the entire profits from the infringing devices of the defendant, the duty is imperative, and the failure to discharge it, or the failure to distinguish subsequently such profits from its own, subjects, and ought to subject, the infringer, and not its victim, to any unavoidable loss that results from the inaccuracy either of the defendant’s disclosure of its profits or of the complainant’s proof, when there is any substantial evidence upon which to base an estimate of the profits derived from the infringing devices.

In like cases, upon evidence similar, but far less accurate and convincing than that in this record, infringers have been refused permission to take advantage of their own wrong, and have been required to pay the estimated profits they derived from the infringing devices by the Circuit Court of Appeals of the Sixth Circuit in Brennan & Company v. Dowagiac Mfg. Company, 89 C. C. A. 392, 396, 162 Fed. *378472, 476, Dowagiac Mfg. Company v. Superior Drill Company, 89 C. C. A. 399, 400, 162 Fed. 479, 480, and P. P. Mast & Company v. Superior Drill Company, 154 Fed. 45, 57, 83 C. C. A. 157, and by the Circuit Court of Appeals in the Second Circuit in Wales v. Waterbury Mfg. Co., 101 Fed. 126, 130, 41 C. C. A. 250, 253, 254, and I am of the opinion that this court ought to pursue the same course in the case before us.

For the reasons which have been stated, I am triable to concur in the view of the majority that the decree of the court below should be affirmed; and I think it should be reversed, and a decree should be rendered for the complainant.