Opinion of the Court.

"The defendants use a boiler in which the charge of fat and other materials is placed and heated; and do not mix the fat and water in the manner pointed out in the specification of the patent, but, on the contrary, have inserted in the boiler a pump which forces the water, as it settles to the bottom, upwards to the top of the mass, and pours it upon the upper surface, whence it again finds its way down through the fat, thus keeping up a constant mixture." p. 730.

It was expressly decided that neither the form of the defendants' apparatus, nor the addition of lime, nor the use of steam, nor the applying of a lower degree of heat, prevented their process from being an infringement of the plaintiff's patent. pp. 730-733.

The court also said: "It is objected that the particular apparatus described in the patent for carrying the process into effect cannot be operated to produce any useful result. We have examined the evidence on this point, and are satisfied that it shows the objection to be unfounded. A recapitulation of this evidence is not necessary. The testimony of Tilghman himself, of Professor Booth, and of Mr. Wilson, is directly to the point." p. 730.

In accordance with the judgment and mandate of this court, the Circuit Court, in February, 1877, entered an interlocutory decree for the plaintiff, and referred the case to a master "to ascertain and tax and state and report to the court an account of the gains, profits, savings and advantages which the said defendants have received, or which have arisen or accrued to them, from infringing the said exclusive rights of the said complainant by the use of the process patented in the said letters patent, as well as the damages the said complainant has sustained thereby." The master filed his report in August, 1884.

As to damages, "the master finds from the evidence that the complainant has derived no profit from the invention involved in this suit, otherwise than by granting licenses to others to use the same. These licenses have been granted to all manufacturers desiring to use his process, at a substantially uniform fee of twenty cents for each hundred pounds of fat

Opinion of the Court.

treated, payable monthly. For several years, the respondents held such a license from the complainant, but terminated the same, refusing to pay the stipulated license fees, after May 1, 1870, although continuing to use the process until the expiration of the patent on January 8, 1875." The master further says: "The accompanying table A shows the quantity of fat treated by the respondents during each month of infringement, the license fees therefor, and interest thereon to October 7, the first day of October term, 1884, making the whole amount of the complainant's damages herein $79,566.91.”

As to the profits, gains, savings and advantages which had accrued to the defendants, the master finds that what was known as "the lime saponification process," which consisted in the manufacture of the fat into soap by the use of lime, and in the decomposition of that soap into fatty acids and glycerine by the aid of sulphuric acid, was more advantageous than any other process open to public use at the time in question; and reports the defendants' savings in lime and sulphuric acid, their gain in glycerine, their loss in fat acids produced, and their net gains and savings, as follows:

2,798,733 lbs. of lime, at $0.3526 per hundred.

$9,868 33

6,880,219 lbs. of sulphuric acid, at $2.527 per hundred

173,863 13

Deducting loss in fatty acids, being 54 cents per

In September, 1884, each party filed exceptions to the master's report. The Circuit Court, in February, 1886, overruled all the exceptions, and entered a final decree for the plaintiff for $79,566.91, the amount of damages reported by the master,

$114,991 76

$129,441 47

Opinion of the Court.

with simple interest added upon the license fees from October 7, 1884, to February 4, 1886, making in all $83,275.21, and costs. From this decree both parties appealed to this court.

At the hearing before the master, a brother of the plaintiff, called as a witness in his behalf, testified on cross-examination that before this suit was brought the witness had acquired an interest in all license fees and recoveries under the patent. No further question was asked, or evidence offered, by either party, as to the nature or amount of that interest. The defendants contended before the master, and at the argument here, that the plaintiff could recover in this suit no more than his own share, and, having failed to prove the extent of his interest, was entitled to nominal damages only. It is a sufficient answer to this objection, that it is not shown that any one but the plaintiff has any interest, legal or equitable, by assignment or otherwise, in the patent sued on; and that, as observed by Mr. Justice Strong, sitting in the Circuit Court, "an interest in the net proceeds of collections under a patent does not necessarily amount to legal ownership of the patent itself. It is plain, therefore, as the case appears, that there has been no want of joinder of the necessary parties." Jordan v. Dobson, 4 Fisher Pat. Cas. 232, 236.

The principal question of law now presented is as to the general rule that should govern the amount to be recovered. The defendants contend that the plaintiff, having established license fees for the use of his patent, is not entitled to any gains and profits accruing to the defendants, in excess of those fees. The plaintiff contends that, as the profits to be accounted for exceed the damages, he has the right, waiving the damages found by the master, to have a decree for profits. In an action at law for the infringement of a patent, the plaintiff can recover a verdict for only the actual damages which he has sustained; and the amount of such royalties or license fees as he has been accustomed to receive from third persons for the use of the invention, with interest thereon from the time when they should have been paid by the defendants, is generally, though not always, taken as the measure of his damages; but the court may, whenever the circumstances of

Opinion of the Court.

the case appear to require it, inflict vindictive or punitive damages, by rendering judgment for not more than thrice the amount of the verdict. Acts of July 4, 1836, c. 357, § 14, 5 Stat. 123; July 8, 1870, c. 230, § 59, 16 Stat. 207; Rev. Stat. § 4919; Seymour v. McCormick, 16 How. 480, 489; New York v. Ransom, 23 How. 487; Suffolk Co. v. Hayden, 3 Wall. 315; Philp v. Nock, 17 Wall. 460; Packet Co. v. Sickles, 19 Wall. 611, 617; Burdell v. Denig, 92 U. S. 716.

But upon a bill in equity by the owner against infringers of a patent, the plaintiff is entitled to recover the amount of gains and profits that the defendants have made by the use of his invention.

This rule was established by a series of decisions under the patent act of 1836, which simply conferred upon the courts of the United States general equity jurisdiction, with the power to grant injunctions, in cases arising under the patent laws. Act of July 4, 1836, c. 357, § 17, 5 Stat. 124; Livingston v. Woodworth, 15 How. 546; Dean v. Mason, 20 How. 198; Rubber Co. v. Goodyear, 9 Wall. 788; Mowry v. Whitney, 14 Wall. 620; Littlefield v. Perry, 21 Wall. 205, 229; Mason v. Graham, 23 Wall. 261; Tremolo Patent, 23 Wall. 518; Cawood Patent, 94 U. S. 695; Mevs v. Conover, October Term, 1876, 11 Pat. Off. Gaz. 11111; Elizabeth v. Pavement Co., 97 U. S. 126; Root v. Railway Co., 105 U. S. 189.

1 In Mevs v. Conover, which came from the Circuit Court of the United States for the Southern District of New York, and is reported at different stages below in 3 Fisher Pat. Cas. 386, 6 Fisher Pat. Cas. 506, and 11 Blatchford, 197, the opinion of this court, not published in its official reports, but printed in the edition of the Lawyers' Coöperative Publishing Company, (Bk. 23, p. 1008,) appears of record to have been delivered on March 13, 1877, by Mr. Justice Strong, as follows:

"The only errors assigned in this case are to the confirmation of the master's report, and they relate to the ascertainment of the profits which the defendant had made by his unauthorized use of the plaintiff's invention. That the machine employed by the defendant in splitting wood was an infringement of the plaintiff's patent is established by the decree which sent the case to the master, and no complaint is made of that, but it is contended the master erred in reporting there was saved to the defendant seventyfive cents per cord in the wood split by him and made into bundles.'

In the ascertainment of profits made by an infringer of a patented

Opinion of the Court.

The reasons that have 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 the profits made by the infringer of a patent belong to the patentee and not to the infringer; and that it is inconsistent with the ordinary principles and practice of courts of chancery, either, on the one hand, to permit the wrongdoer to profit by his own wrong,

invention, the rule is a plain one. The profits are not all he made in the business in which he used the invention, but they are the worth of the advantage he obtained by such use, or, in other words, they are the fruits of that advantage. Mowry v. Whitney, 14 Wall. 651. We are not convinced that the rule declared in that case was not followed in this. The patented invention infringed by the defendant was a new and improved machine for splitting kindling wood, and a distinguishing feature of it, perhaps the principal feature, was a device for the automatic feeding of the wood to the reciprocating splitting knives or cutters, by a movable platform or apron carried forward by an endless chain. That device the defendant used, though it is said he used it in another machine, known as Green's. The evidence is full and uncontradicted that an advantage is gained, in splitting kindling wood by a machine with that device, of at least seventyfive cents a cord over splitting it by hand or without that device. It was in harmony with this evidence the master reported and the court decreed.

"It is urged, however, that the Green machine, in which the defendant used the plaintiff's invention, was old and defective, and that no profits were actually received from such an use. But if such be the fact, if the defendant was a loser by splitting wood with the Green machine, his loss was less to the extent of seventy-five cents on each cord split, than it would have been had he not used the patented invention. Such a result was equivalent to an equal gain, and it was rightly estimated as a part of the profits for which the infringer was responsible.

"These observations are sufficient for the present case. We notice, however, a suggestion made on behalf of the appellant, that since the decree in the Circuit Court the patentee has surrendered the patent upon which the decree was founded, and obtained a reissue. This does not appear in the record, and if it did it would be immaterial. We have held that the surrender of a patent extinguishes it, and that, after its surrender, pending suits founded upon it fall with its extinguishment. The patent must remain unsurrendered, not only when a suit upon it is commenced, but at the time of trial and judgment. But a surrender after final judgment or decree can have no effect upon a right passed previously into judgment. After that, there is nothing open for litigation. The right of the patentee then rests on his judgment or decree, and not on his patent. The suggestion, therefore, cannot avail the appellant, and the decree of the Circuit Court must be affirmed. Decree affirmed."

VOL. CXXV-10