UNTERMEYER f1. FREUND.,
I
77
granted in Europe a.nd the United States, who sells the patented article in Europe with restrictions against importation into the United States, can treat as an infringer one who uses or sells that article in this country. This question is reB judicata in this court. On the motion for a preliminary injunction it -was held that" the right of the complainant to treat the defendants as infringers hinges upon the question of fact whether Domeier paid or sent his check for the benzo-purpurine * * * before he received the invoice whic·h gave notice that the patented article was sold on condition that it was not to be used or sold in the United States." Dickerson v. Matheson, 47 Fed. Rep. 319. In other words, it was decided that the restriction would follow the goods to this 00untry if the original sale was made subject to the restriction, and that the sale was so made if the goods were paid Jor after or at the time the notice on the invoice was received. To the same effect, by implication, is the case of Holiday v. MattheBon,24 Fed. Rep. 185. If the defendants were bona fide purchasers led inadvertently into the attitude of infringers thu court might, perhaps, be more zealous to protect them, but the impression cannot be avoided that they do not occupy such a position. The complainant is entitled to a decree.
UNTERMEYER
v.
FREUNDet
al.
(Oircuit 1.
court, S. D. New
York. , April 18, 1899.)
DESIGN PATENTS-INFRINGEMENT-CO)lSTITUTIONAL LAW.
Act Congo Feb. 4, 1887, creating a iiability of $250 against the infringer of a design patent, was a valid exercise of the authority granted by Const. U. S. art. 1, i 1, to secure to inventors for a limited time the exclusive use of their inventions. As the act declared that "hereafter, during the term of letters patent for a design, it shall be unlawful," etc., its proVisions applied to existing, as well as to future, suits for infringement.
,2.
SAME-CONSTRUCTION OF STATUTE.
'tt
SAME-MEASURE OF DAMAGES.
As the act declares that the infringer shall also be liable for any excess of profits over the arising from the sale "of the article or articles" to which the has been applied, the courts cannot restrict the recovery merely to the profits arISing from the inorease of value imparted by the design.
In Equity. Suit by Henry Untermeyer against Max Freund et al. for infringement of a patent. Heard on exceptions to the master's report. Overruled. This action was. begun December 30, 1886, for the infringement of letters patent No. 15,121, granted to complainant July 1, 1884, for a .design for a watch-case. A decision sustaining the patent was filed .January 15, 1889. 37 Fed. Rep. 342. An interlocutory decree adjudging that the complainant recover damages and profits" together with any penalty incurred, "and referring it to a master to take the account, was entered Janllary 24, 1889. On the 6th of May, 1891, the master :filed his report in which he found damages, and, ,no profits
78
FEDEBALREPORTEB t
vol. 50.
prior to February '4, 1887 date ofi the act relating to design patents. 24 St. at Large,p. 3:87. He did find, however, that the complainantwas entitled to recover $2.50 as provided by said act and the profits iLl excess of $250 since February 4,1887. on each watch-case,to whick "the design was applied, amounting to $889.02. In brief, the master holds that the act of February, 1887, applies to this cause and under it the complainant is entitled to recover $250 and $889.02. If the act does not apply the complainant, under the rule of the Carpet fuses, 114 U. S. 439, 5 Sup. Ot. Rep. 945j 118U. S.10, 6 Sup. Ot. Rep. 946, would be entitled to nominal damages only. 1'he defimdants filed exceptions to the report, amI' now urge the following propositions: First, tha t the act of February, 1887, is UnCOli'3titutional because it imposes a penalty without due process of law illl contravention of article 3, § 2, c1. 3,oHhe constitution and also of the 5th, 6th, 7th al1l18th amendments. Second, that the aot does not apply for the reason that this suit was commenced one month and five days before the act was approved. Third, that congress did not intend to change the rule as laid down in the Carpet at8es" the, object of the act beillg,to give the patentee $250 in every case and the profits, in excess of that sum, if he can prove them under the rules established by the supreme court. Rowland Cox, for complainant. Frederic H. Betts and Samuel R. Bett8, for defendants. OOXE, District Judge., The act of 1887 is constitutional. Article 1, § 8. of the constitution gives congress the power "to promote the progby secp.ring filr limited {imes to authors ress of science ,and and inventors the exclusive right to their respective writings and dis'. The of the decision in Dobson v. Carpet Co., 114 U. S. 439, 5 S,up. Ot. Rep.' 945, (decided Apl'i120, 1885,) was to deprive' the owner of a design patent of all redress against infringers. The of congress being called to this condition of affairs the act ·of 1887 was pllssedtorernedy what seemed to the law-makers 1\ Kross injustice. Oongrpss evitlently thought that existing In \V was inadequate to secm;eto inventors of designs the exclusive right to their discoveries. The which the actpernJits the .01Vner of the patent to recover is in the nature of a penalty, it,ls true"but so are the provisio'ns permitting punitive damages in sections 4919 and 4921 of the Revised Statutes. It seeins 'clear that congress'mad power, under the constitutional provision quoted, to protpcta meritorious inventor from the depredations of an intentional infringer even to the extent of designating a fixed sum 'which,atthe expense o( ,per.lect accuracY',"l1as trequently been denom,inated"'liquidated In other words, congress had the power to Say to the wrong-doer." You have, with full knowletlge of the patentee'srights, appropriated hie and. caused him injury; hitherto you ha\le escaped,becnuse he could not show the: extent of his loss. This shall not continU8j,We know he' has. su1i'ered damage by your act and: if you continlle:it6 use hi8 property you must pay him at least to 4,1887, the inventoiwas
79 remedilese.l;t was the purpose ofcQngress to afford him some :relief and nothing short of the provisions of the act in question seemed adequate for this purpose. But even though the court should entertain d01-1bt upon the question of constitutionality it would still be its duty to .reselvethe doubt in favor oftha validity of the law. Ill- this connection it may not be inappropriate to quote the language used when.a similar argument was addressed to this court. In Barony v. Lithographic Co., 17 Fed. Rep. 591, it was said: "The court should hesitate long and be convinced beyond a reasonable doubt before pronouncing the invalidity of an act of congress. The argument should amount almost to a demonstration. If doubt exists the act should. be sustained. The presumption is in favor of its validity. This has long been therule,-a rule applicable to all tribunals, and particularly to courts sitting at nisi prius. Were it otherwise, endless complications would result; and a law which, in one circuit, was declared unconstitutional and void, might. in another. be enforced as valid';'
The point that the act ofl8,S7 does not apply, because the action ·was commenced belore the approval of the act, is not well taken. The language of the first section is unmistakable. It saysi "that hereafter, during theterm of letters patent for a design, it shall be unlawful," etc. There it! nQexception regarding existing suits. As plainly as language can state it congress has declared that after February 4, lS87, the prothe act shall apply for d('signs. The master has carefully restricted the recovery to infringements occurring after the approvalof the ·act. The ,defendants have no valid complaint in this regard. Theremaining question relates to the proper construction of the act. It is argued that it was not the intention of congress to give to the owner ofa design patent the entire profits made from the manufacture or sale pf the article to which· the design has been unlawfully applied.. the act flays that the owner is 'entitled to these profits cannot be der" There is no ambiguity in the language employed, but it is that the court is at liberty to place a construction upon the act which will prevent results thought to be unjust and absurd. The act pr07 ..., "And in case the total profit made bybim [the from the manu· factjlre or sale. as aforesaid. of the article or articles to which the desIgn, or imitation thereof, has been appli('d. the sum of two arid fifty dollars, he shall be further liable for the excess of such profit over and above the saill sum of two hundred and fifty dollars."
Nothing can be plainer than this. It is the profit on the sale of the article for which the infringer must account, and not alone the profit which can be demonstrated as due to the design. Having ascert'llined what the law means the duty of the court seems clear; it must be enforced. Whether the law is wise or unwise is not a question for the court. Arguments of this character should be addressed to the legisla. tive and not to the judicial branch of the government. Discussion might well stop the moment the plain meaning of the law is ascertained.
80
I'ED:ERAL REPORTER,
But if we go a step further and examine the situation the time the law was passed the conclusion cannot be resisted that the law says precisely what congress intended to say and accomplishes precisely what congress intended to accomplish,-'no more and no less. As has been seen the task to which the law-makers were addressing themselves was to find some remedy for a consummated infringement. Without legislation the rights O'f! owners of design patents were null. If the recovery against infringers were confined to profits due to the design the patentee was With01.lt redress. It was to remedy this well-recognized evil that the act was passed. Is it likely that congress expected to remedy the evil by re-enacting the rule of damage which produced the evil? If it were that the pl'ofits should be confined to the value imparted by the design no legislation was necessary. The paragraph above quoted might well have been omitted. The report of the committee and the debates in congress are all in consonance with this view.' The precise objection now urged sharply pointed out in congress, and, with full aride3;lj.ct knowledge of the radical change which it would produce, the bill was passed. Suppositive cases hayc been for the purpose of showing how the act may produce unjust results requiring the payment of large profits in no way due to the design, but actually due to other and, perhaps, patented features. On the other hand, the hardship to the patentee of the situation' as it existed prior to the act has been enlarged upon. With full knowledge of the situation pro and con 'congress attempted to solve the problem. The act proceeds upon the idea that a willful infringer is not entitled to the same consideration as a meritorious inventor. That if one or the other must suffer it shall be he who by his wrongful act 11as produced the situation in which exact justice is impossible. By analogy to a well-known principle of equity the theory of the law seems to be that where an infringer intentionally appropriates the design and so mixes up the patentee's profits with his own that it is impossible to apportion them the loss must fall upon the guilty and not upon the innocent party. The exceptions must. be overruled and the report of the master confirmed. If the foregoing views are correct it follows that the defend8!:1ts must pay the master's fees. The master has done his work ably and weIland it is ,hoped that tberewi1l be no difficulty in arriving at a satisfactory cbm'pensation. Any difference on the subject may, perhaps, be adjustedbya reference to. DOtf,ghty v.Manufacturing, 00.,8 &atchf. 107.
at