Summary
The opinion addresses accounting and contempt issues arising from infringement of a patent for flat-slab reinforced-concrete flooring. It considers whether the plaintiff could recover profits or damages for periods before providing statutory notice of infringement under Revised Statutes § 4900, and whether profits are included within the statute’s reference to damages. The court also discusses the procedural treatment of interlocutory injunction and accounting orders.
Topics
Practice areas
Questions Presented
- Whether section 4900 of the Revised Statutes required the plaintiff to plead and prove marking or actual notice before recovering damages or profits for patent infringement.
- Whether the accounting could include infringement occurring before the August 23, 1911 notice letter.
- Whether prior art could be introduced for the first time during the accounting to modify or interpret the prior infringement adjudication.
- Whether the Nevins and New Spiral constructions fell within the construction previously adjudged to infringe the Norcross patent.
- What method should be used to apportion general expenses between infringing and noninfringing business.
- Whether profits from plans and steel for columns, column heads, footings, and other floor supports were recoverable when those items formed part of a unitary sale centered on the patented girderless floor construction.
- Whether the remedial contempt order was reviewable on appeal from the final judgment and whether it should stand.
- How the costs of the accounting and appeals should be allocated.
Holdings
- Section 4900's marking-or-notice requirement applies to both damages and profits, and the plaintiff bears the burden of pleading and proving compliance.
- No damages or profits could be recovered for infringement before August 23, 1911, the date of the proven notice of infringement.
- An accounting is limited to determining the amount due under the existing infringement decree; it cannot be used to relitigate the validity or scope of the patent.
- The Nevins and New Spiral constructions did not infringe the Norcross patent as construed by the prior infringement decree.
- General expenses should be apportioned between infringing and noninfringing business according to the relative gross monetary volume of the two categories, resulting in a 50.83 percent allocation to infringing business.
- When the patented girderless floor construction was the feature that generated the sale, the plaintiff could recover the entire profit from plans and steel for the floors and their necessary supports, including columns and column heads.
- A remedial contempt proceeding is part of the main case and is reviewable on appeal from the final judgment; because the Nevins construction was noninfringing, the contempt order had to be reversed and dismissed.
- The expense of the chartered accountant employed by the master should be assessed against Turner because his inaccurate business returns necessitated the expense.
Key quotations
“An accounting in a patent case is no different in this respect from an accounting in any other sort of action.” (at 272)
“The duty of the master is to apply, not to alter the decision of the court appointing him, and he is not aided in understanding that decision by facts which the court did not have in mind when it acted.” (at 273)
“Therefore, we find no infringement in the Nevins and New Spiral constructions.” (at 276)
“Where the infringing portion of the sales unit sells the article, the entire profit is recoverable.” (at 281)
Factual background
The litigation concerned infringement of Norcross patent No. 698,542 for flat-slab reinforced-concrete flooring. Turner had previously been found to infringe, after which he adopted the Nevins and New Spiral reinforcing constructions; the plaintiff claimed those constructions were merely colorable changes and also sought profits from earlier infringing business. The master divided the accounting into three periods and recommended substantial profits, while the district court substantially reduced the award and denied recovery for the first and third periods.
Procedural history
In an earlier proceeding, Turner was adjudged to have infringed claims 1, 3, and 4 of the Norcross patent, and an injunction and accounting were ordered. After Drum assigned the patent to Flat Slab Patents Co., the district court referred the accounting to a master. The master recommended substantial recovery, but the district court reduced the recovery to $6,983.81, excluded recovery for the first and third periods, and ruled that the Nevins construction infringed in the contempt proceeding. Both parties appealed, and the Eighth Circuit modified the accounting determinations, reversed and ordered dismissal of the contempt proceeding, and remanded.
Remand instructions
Reverse and dismiss the contempt proceeding; exclude recovery for the first and third accounting periods; deny damages for the second period; calculate and award profits for the second period using the master's first-report framework as modified by the court, including the specified expense and profit adjustments; assess the chartered accountant's expense against Turner; otherwise allocate costs as directed, with costs of the appeals divided equally.