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would be useless for its special purpose without the part covered by the complainant's patent; or where no other known article would answer that purpose well enough to find purchasers, all the profits which the infringer derived from making and selling the entire thing are clearly due to the patented part, and are therefore recoverable by the complainant.'

§ 723. Where the profits due to the infringing, and those due to the non-infringing, elements of a defendant's article of manufacture and sale, cannot be separated by any other rule; then the apportionment may be made by dividing the aggregate profits in proportion of the respective cost of the different parts. This method of making the division is based on the presumption that similar articles of merchandise are sold at a like percentage of profit on the cost of producing them. But this is not likely to be the fact where one of those articles is covered by a patent while the others are not so covered, because monopolies tend to enhance prices. This method of making the required division will therefore always be more favorable to the defendant than to the complainant, where no part of the article made and sold by the former is covered by a patent, except the part which is covered by the patent of the latter. The principle of this method was approved in Rubber Co. v. Goodyear,' though in that case it was applied to the work of dividing profits between things covered and other things not covered by the complainant's patent, instead of between parts of the same thing so covered, and other parts not so covered.

§ 724. Where the infringement consisted only in selling specimens of the article covered by the complainant's patent, the profits may be readily ascertained by deducting the cost of purchasing and selling the articles from the amount received from them when sold. Where the subject

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matter of the patent is a part of a larger article, and where a separate price is paid, and a separate price is obtained for it, the gross profit on the thing covered by the patent may be ascertained by deducting the former from the latter. But in such a case the complainant is not entitled to recover the whole of that gross profit. It must be charged with such a proportion of the expenses incurred in selling the entire article, as the aggregate money received from the infringing device bears to the aggregate received for the entire apparatus or machine.' The principle of this rule is also applicable where the infringer made the articles he sold instead of buying them; and the rules applicable to the latter class of cases, and heretofore set forth are applicable, with some reasonable modifications, to cases where the infringer bought the infringing articles which he sold, instead of making them himself.

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§ 725. Where unlawful using of a patented article or process constitutes the infringement involved in an action in equity, the infringer's profits are ascertained by a rule quite different from either of the foregoing. It is known as the rule in Mowry v. Whitney; though in that case it is formulated according to the special circumstances at bar, rather than in the more general terms which express its principle in general application. The exact language used by the Supreme Court was as follows: "The question to be determined in this case is, what advantage did the defendant derive from using the complainant's invention, over what he had in using other processes, then open to the public, and adequate to enable him to obtain an equally beneficial result? The fruits of that advantage are his profits." This statement has two qualifications which were suitable enough to the case at bar, but which do not appear to belong to the underlying principle of the rule. These are, that the standard of comparison must have been open to the public at the time of the infringement, and must have

The Tremolo Patent, 23 Wallace, 528, 1874.

Mowry v. Whitney, 14 Wallace, 651, 1871.

been adequate to enable the defendant to obtain a result equally beneficial with that of the patented invention.

§ 726. The first of these qualifications is not generally applicable to the rule, because the profits derived from the use of a patented invention depend upon its utility and cheapness as compared with other inventions for performing the same function; and that comparative cheapness and utility does not wholly depend upon whether those other inventions were given to the public, or were patented by those who invented them, or if the latter, upon whether those patents had expired at the time in question. If the invention which was next best to that of the complainant, was patented at the time of the infringement, and if the defendant had a license to use it, but instead of doing so, used that of the complainant; it is clear that the advantage he derived from his infringement is nearly measured by the difference between the respective utility of the two inventions. So, also, if he did not have a license to use the next best invention, but could have purchased one had he desired, then it is clear that the advantage he derived from his infringement is measured by the difference between the utility of the two inventions, plus whatever amount such a license would have cost. And if the defendant neither possessed nor could have purchased a license to use the next best invention, it is obvious that the advantage which he derived from his infringement, is measured by the difference between the utility of the two inventions, plus the money recovery which could have been obtained against him if he had used the next best invention without a license. If the patent covering the next best invention was in such a state that its owner could have enjoined the infringer from using it, then the infringer could have derived no benefit from its use, and it falls, for that reason, outside of the general rule. Thus this paragraph seems to show that there is no just necessity for the first qualification in the special statement, being applied to the general doctrine; and the next paragraph explains how such a qualification would often be affirmatively unjust.

Where, for example, A. B. has a patent for one apparatus, and where C. D. has a junior patent for another combination performing the same function, and infringing A. B.'s patent; and where E. F., who has used C. D.'s apparatus, is sued in equity by him, and compelled to account for infringer's profits, the infringer ought to be permitted to set up the apparatus of A. B. as a standard of comparison; for otherwise he will be compelled to pay over to C. D. the entire fruits of certain advantages, and still remain liable to A. B. for a portion of those fruits. Accordingly, in the case of Emigh v. Railroad Co.,' the defendant was permitted to set up a standard of comparison which was the subject of letters patent during the time of the infringement in suit, even though the defendant never had any license to use the invention thus allowed to be set up. These facts about the Hodge brake, which was the standard of comparison in that case, do not appear in the opinion of the judges, but they do appear in the records of the court.

§ 727. The second of the qualifications mentioned in Section 725 is not generally applicable to the doctrine of the rule in Mowry v. Whitney; because the difference between the utility of two inventions may arise from the fact that one performs the function common to both, with equal cheapness and greater excellence, or with greater cheapness and greater excellence, as well as from the fact that it performs that function with greater cheapness and equal excellence. The last of these sorts of superiority characterized the invention covered by the patent sued upon in Mowry v. Whitney; but the principle of the rule in that case is equally applicable to cases where the first or the second sort of superiority is possessed by the invention in suit, as compared with the prior invention set up as a standard of comparison.

§ 728. It appears from the foregoing three sections that the general principle involved in the rule of Mowry v. Whitney may be fully stated in the following form. The

Emigh v. Railroad Co. 6 Fed. Rep. 283, 1881.

fruits of the advantage which the defendant derived from using the complainant's invention, over what he could have derived from using any other process or thing then in existence, constitute the profits which the complainant is entitled to recover. The advantage referred to in this rule, may consist either in an affirmative gain, or in a saving from loss, or in both of these elements; and the fruits of that advantage constitute the recoverable profits in either event.

§ 729. The advantage consists in an affirmative gain in cases wherein the patented process or thing produces a valuable article from materials which otherwise would be useless, or, if useful at all, useful only for purposes of inferior value. The Goodyear process patent,' if it had been valid, would have been a patent of this sort, and would have been entitled to an account of profits ascertained according to the rule in Mowry v. Whitney. But as the only patent sustained in the Goodyear case was the patent for the product, and inasmuch as that patent was infringed by the defendant only in making and selling specimens of the invention it covered, the profits were ascertained on an entirely different plan.

§ 730. But the advantage consisted in saving from loss, in most of the cases which have been adjudicated under the rule in Mowry v. Whitney. In the case of the Cawood patent,' the saving was a saving of labor and of fuel realized from the use of the complainant's swage-block in mending the exfoliated ends of railroad rails, as compared with the labor and fuel it would have been necessary to expend in mending those rails upon a common anvil. In Mevs v. Conover,' the saving was a saving of labor in splitting kindling-wood, by means of the patented machine of the complainant, as compared with the labor which would have been required to split the same quantity of wood by hand, or by any other machine. The decision of the Supreme

1 Rubber Co. v. Goodyear, 9 Wal. lace, 794, 1869.

Cawood Patent, 94 U. S. 709,

1876.

3 Mevs v. Conover, 11 Off. Gaz. 1111, 1876.

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