general business was unprofitable, it was the less so in consequence of their use of the plaintiff's property.”(*) In Elizabeth v. Pavement Co.,() the city had laid the plaintiff's patented pavement in some of its streets. The bill was filed against the city and the contractor who laid the pavement. The Supreme Court said:

"If an infringer of a patent has realized no profit from the use of the invention, he cannot be called upon to respond for profits. . . . . A patentee is entitled to recover the profits that have been actually realized from the use of his invention, although, from other causes, the general business of the defendant, in which the invention is employed, may not have resulted in profits. . . . . On the contrary, though the defendant's general business be ever so profitable, if the use of the invention has not contributed to the profits, none can be recovered. . . . . It may be added, that where no profits are shown to have accrued, a court of equity cannot give a decree for profits, by way of damages, or as a punishment for the infringement. . . . . The defendant will not be allowed to diminish the show of profits by putting in unconscionable claims for personal services."()

The court, after stating that these propositions were well established, held, that as the city was shown to have paid the same price to the infringers as was paid to the owners of the patent, it had made no profit, and the accounting could only be against the builders of the road. In Tremaine v. Hitchcock(") (The Tremolo Patent) the plaintiff's invention was a tremolo attachment to an organ. The defendants were organ manufacturers. was held that the master properly set off a proportional part of the expenses of the business, against the profits made by this attachment. In Troy Iron & Nail Factory v. Corning() it was held that where the defendants

(*) The Cawood Patent, 94 U. S. 695, 710.
()97 U. S. 126.

() Elizabeth v. Pavement Co., 97 U. S. 126, 138-139.
(4) 23 Wall. 518.

(*) 3 Fish. 497.

It

were manufacturers of the material from which the patented articles were made, small sales of the material to outsiders were not conclusive as to its cost, where by far the larger quantity was turned into their own factory. In Sanders v. Logan (*) and Livingston v. Jones () it was held that where the inventor's profit consists in a license fee, this is the measure of damages, and a bill for an accounting will not lie, as there is a complete remedy at law. That the only cases where profits can be recovered are where the inventor finds his profit in the exclusive manufacture and sale of some new machines, or of some new form of an old machine, which, as a distinct species, is more valuable or can be put into the market cheaper, so as to exclude other machines. By the act of 1870, adopted into the Revised Statutes, section 4921, damages as well as profits may be given in equity. Under this act it was held, in Marsh v. Seymour,(©) that damages of a compensatory character may be allowed. to a complainant in an equity suit, where it appears that the business of the infringer was so improvidently conducted that it did not yield any substantial profits." In Birdsall v. Coolidge () the court said: "Gains and profits are still the proper measure of damages in equity suits, except in cases where the injury sustained by the infringement is plainly greater than the aggregate of what was made by the respondent; in which event the provision is, that the complainant shall be entitled to recover, in addition to the profits to be accounted for by the respondent, the damages he has sustained thereby.'" In Mason v. Graham,() where it appeared that the arti(*) 2 Fish. 168.

(1) Ib., 207; cf. Sayles v. Richmond, F. & P. R.R. Co., 16 O. G. 43. (c) 97 U. S. 348.

(4) 93 U. S. 64, 69.

() 23 Wall. 261.

cle had been sold for a certain price when separated from the machine to which it formed an attachment, it was held that this formed a better estimate of profits than by taking a part of the profits bearing the same ratio to the whole profits as the cost of the attachment bore to the whole machine.

§ 1231. Present rule in equity.-The whole subject has been fully considered by the Supreme Court in several recent cases. In an equity suit praying for an injunction, profits, and damages, it appeared that the patent was for a process of manufacturing fat acids and glycerine from fatty bodies, by the action of water at a high temperature and pressure. The defendants contended that the plaintiff, having established license fees, was not entitled to any gains or profits accruing to the defendants in excess of those fees. The plaintiff contended that, as the profits exceeded the damages, he had the right to waive the damages found by the master, and have a decree for the profits. The court reviewed the cases, and showed that the rule allowing profits had its origin, not in the statutes, but in the general doctrines of equity. These principles, it said, regard the profits made by the infringer as belonging to the patentee. It is inconsistent with them either, on the one hand, to permit the wrong-doer to profit by his own wrong; or, on the other hand, to make no allowance for the costs and expenses of conducting his business, or to undertake to punish him by compelling him to pay more than a fair compensation to the person wronged. It follows from this that the infringer is liable for actual gains, not for what he might have made, or, in other words, "the fruits of the advantage which he derived from the use" of the plaintiff's 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," and this advantage is the measure of the profits to be accounted for, even if, from other causes, the business did not result in profits, for anything saved is regarded as a profit. And on these principles the profits were computed.(") This rule means that we must compare the device with what was known and open to the public at and before the date of the patent. When a subsequent patent is introduced, which is as effective and no more expensive than the first, the infringer cannot avoid the operation of the rule by obtaining a license to use the second patent, and then continuing to use the first. If such were the meaning of the rule, the claim of the prior patentee for profits realized from the actual use. of his invention might be defeated by showing that the infringer was at liberty to use, though he did not use, the subsequent invention.()

§ 1232. Origin of rule in equity.--The general rule in equity suits has been frequently based on the theory that the infringer is converted into a trustee for the owner of the patent; but it has been declared by the Supreme Court, upon an elaborate review of the authorities in this country and in England, that it is more strictly accu

(*) Tilghman v. Proctor, 125 U. S. 136; acc. Mowry v. Whitney, 14 Wall. 625; The Cawood Patent, 94 U. S. 710; Mevs v. Conover, 11 O. G. 1111; 125 U. S. 144, in notis; Elizabeth v. Pavement Co., 97 U. S. 138; Root v. Railway Co., 105 U. S. 202; Thomson v. Wooster, 114 U. S. 104; Knox 7. Great Western Q. M. Co., 6 Sawy. 430; Ingels v. Mast, 1 Flip. 424; Putman ข. Lomax, 10 Biss. 546; Fischer v. Hayes, 22 Fed. R. 529; Reed v. Lawrence, 29 F. R. 915; Same v. Chase, Ib.; Bell v. U. S. Stamping Co., 32 F. R. 549; McMurray v. Emerson, 36 F. R. 901; Coupe v. Weatherhead, 37 F. R. 16; Webster L. Co. v. Higgins, 39 F. R. 462; Celluloid Mfg. Co. v. Cellonite Mfg. Co., 40 F. R. 476.

() Turrill v. Illinois C. R.R. Co.; Same v. Michigan S. & N. I. R.R. Co., 20 Fed. R. 912; aff'd Illinois Cent. R.R. Co. v. Turrill; Michigan So. &. N. I. R.R. Co. v. Same, 110 U. S. 301; cf. National C. B. S. Co. v. Terre Haute C. & Mfg. Co., 19 Fed. Rep. 514.

rate to say that 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 an equivalent or substitute for legal damages, a compensation computed and meas. ured 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.(*)

The practical importance of these decisions is very great. Under them, a bill in equity for a naked account of profits and damages will not lie. The relief is ordinarily incidental to some other equity, which gives the patentee his standing in court; an injunction against continuance of the infringement being the most common case. But it is expressly laid down that other grounds may arise, as where the title is equitable merely, or there are impediments to remedies purely legal; and it may be even that the equity will arise out of the nature of the account itself, springing from circumstances which disable the patentee from a recovery at law altogether, or render his remedy in a legal tribunal difficult, inadequate, and incomplete, but any such case must rest upon its own special circumstances. Hence ordinarily, when the patent has expired, and the right to an injunction with it, there can be no accounting in equity.()

(*) Root v. Railway Co., 105 U. S. 189, 214, 215; Tilghman v. Proctor, 125 U. S. 136, 148.

() Root v. Railway Company, 105 U. S. 189, 215. This seems to overrule Gordon v. Anthony, 16 Blatch. 234, which held, on a review of the cases, that although the suit in equity is brought after the expiration of the patent, and the bill is not for discovery, the court has jurisdiction to direct an account of profits. Under the latest decisions of the Supreme Court, it would seem to be absolutely incumbent upon a plaintiff to make a standing in court for himself by showing some equity. Under the old view, the assumed trust relation was quite enough; but there being no trust relation, some other species of equity must be established.