Supplement. ]
Mar. 29, 1911] THE ILLUSTRATED OFFICIAL JOUR~AL (PATENTS).
Vol. XXVIII.]
REPORTS OF PATENT, DESIGN, AND TRADE MARK CASES.
157
[No.8.
Meters Ld. v. J.l:letropolitan Gas Meters Ld.
IN
THE COURT OF ApPEAL.
Be/ore THE MASTER OF THE ROLLS AND LORDS .JUSTICES FLETCHER
MOULTON AND BUCKLEY.
February Ist and 2nd, 1911.
METERS LD.
u,
METROPOLITAN GAS METERS Ln.
Patents for improvements in prepayment gas meters.-Action for infringement.-Judgment for Plaintiffs by cons·ent.-Inq1,f;iry as to damages.-Master's
Uertificate finding atnount.-S'ulnlnons to vary.-Increctse in Plaintiffs' sales
but for infringelnent.-Loss of profit on actual sales.-Injringing parts
10 essential.-Evidence that purchases of meters were not made on account of the
patented lJCtrts.-Evidence that customers would not have purchased Plaintiffs
meters.-Jfaster's Certificate varied by the J'udge.-Appeal to Court of Appeal
dismissed.
The Defendants in an action for infringement having, in 1906 and the first
15 half of 1906, infringed the Plaintiffs' Patents for improvements in prepaument
ga8 meters, consented to judgment for an injunction and an Order for an
inquiry as to the damaqes which the Plaintiffs had sustained by the infringemerit. The .1lfaster certified that 6000 more meters ioould have been sold by the
Plaintiffs but for the Defendants' sales, and, assessing the damages for loss of
20 profit at 18s. 4d. per meter, awarded the Plaintiffs 8888l. 6s. sa. under this head
and 1500l. (together 4888l. 6s. 8d.) for loss of profit on actual sales in consequence of a reduction they made on their prices. The Defendants applied to
vary the ;.l1aster's Certificate by substituting nominal damages. The number
of the infring'il1,g meters was agreed at 19,500, and the profits on the infringing
25 parts represented about 1/44th of the whole l Jr ojit on a meter. It was held by
Eve J., distinguishing Clement Talbot Ld. v. Wilson (26 R.P.C. 467), that the
Master had rightly held that the profit on the whole meter was the proper factor
to take J:n calculating the profit on the meters, and that. the Master had rightly
.
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158 THE ILLUSTRATED OFFICIAL JOURNAL (PATENTS). [Mar. 29,1911
REPORTS OF PATENT, DESIGN, AND TRADE MARK CASES.
Meters Ld. v. Metropolitan Gas Meters Ld.
fixed the profit on the 5000 meters at 18s. 4d. per meter. But, there being
evidence as to 14,085 out of the 19,600 meters that, had the Defendants' meters
not been purchased, the Plaintiffs uiould not helve obtained the orders for them,
and having regard to the other facts of the. case, includinq the Defendants'
position in the gas meter market, the figure of 5000 ought to be reduced to 5
8600 and the damages to 2888l. 6s. 8d. Held, further, that as on the evidence
the Plaintiffs were, during the time of the infringement, forced to sell at lower
prices, the Master's finding that the Plaintiffs' loss on actual sales was 1500l.
would not be disturbed; and, further, that the amounts fourui by the Master's
Certificaie having been substantially reduced the Plaintiffs must pay the cost of 10
the Summons to vary.
The Defendants appealed to the Court of Appeal, a'f!'d contended that the
Plaintiffs had suffered nominal damages only by reason of the Defendants'
infringements.
Held, that the matter to be ascertained was the pecuniary equivalent of the 15
inj'ltry which the Plaintiffs had sustained by the uironqful acts done by the
Defendants, and that the Judge had assessed the damaqes on a right principle
and in a manner consistent with the evidence before him.
The appeal was diemissed with costs.
This was an appeal from the judgment of Eve J. varying the Certificate of 20
the Master and reducing the damages awarded by him on an Inquiry in the
above-mentioned action. The action was for infringement of the Plaintiffs'
two Patents for" penny-in-the-slot," or prepayment, gas meters-Nos. 9771 of
1893 and 15,740· of 1893, and on the 25th of October 1906, judgment was given
by consent (24 R.P.C. 508) restraining the Defendants, their servants or agents, 25
from infringing the Plaintiffs' two Patents, and further ordering the Defendants
to pay the Plaintiffs' taxed costs of action up to, and including, that Order, and
directing an Inquiry to be made what damage (if any) the Plaintiffs had
sustained by the Defendants' infringements. The costs of the Inquiry were
reserved. with liberty to apply as advised.
30
The Master, having held his Inquiry on the 11th, 12th, 14th, 21st and 24th of
April 1910, certified, on the 4th of May 1910, that the result of the Inquiry
pursuant to the Order was that the Plaintiffs had sustained 4833l. 6s. 8d. damage'
by the Defendants' infringement, his reasons being stated as follows :-" I think
" the case of Olement Talbot Ld.v. Wilson (26 R. P.C. 467) does not govern this 35
" case, and that the profit lost must be considered to be the profit on the sale of
" the whole of each meter. I am of opinion that 5000 more meters would have
" been sold by the Plaintiffs but for the Defendants' sale of infringing meters,
" and I assess the damages for loss of profit under this head (including additional
"profit by reason of establishment charges being already sufficient to have 40
" made the 5000 more meters) at 13s. 4d. per meter, 3333l. 6s. 8d" and for loss
" of profit on actual sales by Plaintiffs in consequence of reduction in prices
" from Defendants' competition, 1500l.; total damage 4833l. 6s. 8d."
The Defendants applied by Summons to vary the Master's Certificate, and
asked that the Certificate might be varied by giving the Plaintiffs only 45
nominal damages, The Plaintiffs applied to var~ the Certificate by increasing
8upplemen'.}
Mar. 29,1911] THE ILLUSTRATED OFFICIAt JOURNAL (PATENTS).
REPORTS OF PATENT, DESIGN, AND TRADE
~K
159
CASES.
Meters Ld. v, Metropolitan Gas Meters Ld.
the damages, but this Summons was dismissed, and the Plaintiffs did not
appeal.
The Plaintiffs in their action complained of the use by the Defendants in
prepayment gas meters of the "crown wheel " described in the Specification of
5 Patent No. 9771 of 1893, and of the "cam" or inclined face or its equivalent,
described in the second Claim in the amended Specification of Patent No.
15,740* of 1893, for closing the gas-supply valve and opening the valve by
means of a spring as described. 'I'he Defendants, the Writ in the infringement
action having been issued on the 30th of September 1905~ altered one part of
10 their machine in respect of the matters complained of as they alleged, in
January 1906 and the other part in June 1906.
The cross adjourned Summonses to vary the Master's Certificate were heard
before Mr. Justice Eve on the 19th of October 1910. [Particulars of the affidavit
. evidence used at the hearing will be found set out in 27 R.P.C. pages 722 to
15 726.J The learned Judge held, distinguishing Clement Talbot Ld. v. Wilson
(26 R.P.C. 467), that the Master had rightly held that the profit on the whole
meter was the proper factor to take in calculating the profit on the meters, and
that the Master had rightly fixed the profit on the 5000 meters at 13s. 4d. per
meter. But, there being evidence in the case of 14,085 of .the 19,500 meters that,
20 had the Defendants' meters not been purchased the Plaintiffs would not have
obtained the orders for them, and having regard to other facts of the case,
including the Defendants' position in the gas meter market, the figure of 5000
ought to be reduced to 3500 and the damages to 2333l. 6s. 8d. It was also held
that as, on the evidence, the Plaintiffs were, during the time of the infringe25 merits, forced to sell at lower prices, the Master's finding that the Plaintiffs'loss
of profits on actual sales was 1500l. would not be disturbed, and also that the
amounts found by the Master's Certificate having been substantially reduced
the Plaintiffs must pay the cost of the Summons to vary (27 R.P~C. 721).
The Defendants appealed and asked for an Order that the Certificate might
30 be varied by assessing the Plaintiffs' damages at not more than 500l. in respect
of the Defendants' infringement. The Plaintiffs did not appeal from the
judgment so far as it dismissed their Summons.
The appeal came on for hearing on the 1st of February 1911.
Bousfield K.O. and J. Hunter Gray (instructed by Faitlifull and Owen)
35 appeared for the Appellants, the Defendants; and Walter K.a. and H. A. Cole..
fax (instructed by Jaques&: 00.) for the Respondents, the Plaintiffs.
Bousfield K.C. and Gray for the Appellants.-Mr. Justice Eve reduced
the Respondents' damages in respect of their loss of sales by reason of the
Appellants' infringements by 1000l., but it is submitted that the damages
40 ought to be nominal only. The Appellants had only a very small fraction
of the total meter trade. [Counsel described the nature of the machines
embodying the cam and crown wheel, the subjects of the Respondents'
Patents, and explained the ambit of such Patents.] It is shown by the
evidence that if the Appellants' customers had not bought their meters from
45 the Appellants they would not have bought the Respondents' meters. Further,
there is the question of competition, 1500l. being given to the Respondents in
respect of lowering their prices; 5000 is much too high a figure by which to
multiply 13s. 4d., even when the result of that multiplication is reduced as it
was by Eve J., in endeavouring to estimate the Respondents' loss of profit on
50 meters they would have sold but for the infringements. It is not right to give
damages by way of penalty. [FLETCHER MOULTON L.J.-There has been a
decision in this Oourt that where a patentee has lost his sale damages must be
given.] The Respondents have chosen to ask for damages instead of an account
of profits, but no substantial damage has been suffered because the customers
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160 1.'HE ILLUSTRATED OFFICIAL JOURNAL (PArrENTS). [Mar. 29,1911
REPORTS 01' PATENT, DESIGN, AND TRADE MARK CASES.
Meters Ld. v, Metropolitan Gas Meters Ld.
would not in any case have bought from the Respondents. The Appellants had
no difficulty in adopting equivalents for the crown wheel and cam which were
more reliable than these parts. At the most the Respondents, who commanded
only 10 per cent. of the total trade, would have obtained that percentage of the
5/±15 meters which remained after our customers, who say they would not have
bought from them, are subtracted. 8060 of the 19,500 meters infringed one
only of the Patents. About 400 infringing meters were sold to dispose of
Appellants' stock after the 20th of June 1906, when the manufacture of meters
with the crown wheel ceased. 'I'he Respondents had granted licences, at
royalties, to make and sell the crown wheel and pinion to James Milne &; Son
Ld, and W. and B. Oowan Ld. The burden of proof of damages must lie on
the Respondents. [FLETCHER MOULTON L.J.-Prin~a facie the Appellants
have obtained their profits by the infringements, and it is for you to cut down
the Respondents' estimate of damage.J The cam and crown wheel are trifling
parts of the Respondents' meters. [FLETCHER MOULTON L.J.-The decision
in Clement Talbot Ld. v, Wilson (26 R.P.C. 467) turned upon the special facts
in that case.] The cases show that the question to be answered is howmany
meters the Respondents would have supplied but for the infringements.
[COZENS-HARDY M.R. referred to Penn v. Jack (L.R. 5 Eq. 81, per Wood V.C.
at page 88.J [FLETCHER MOULTON L.J.-An infringer cannot say to the
patentee: "You would not have got one of the orders for the article because
"I got them first."] The learned Judge's estimate of three-fifths of "the
" orders which were outstanding" as likely to have come to the Respondents
is too high in the absence of evidence as to where the 280 customers, who
bought the meters beyond the 14,085, would have purchased them. The
damage awarded must be only that which resulted as a direct consequence of
the Appellants' acts. With regard to the reduction in price of the Respondents.
What Cotton L.J. is reported to have said in American Braided Wire OomjJany
v, Tholnson & Co. (7 R.P.C. 152 at pages 159,160; L.R.44 C.D. 24, per Cotton
L.J. at pages 289, 290) does not minimise the force of the words used in the
House of Lords in United Horse- Shoe and Nail OomlJany Ld. v. John Stewart ~
Co. (5 R.P.C. 290; L.R. 13 App, Cas. 401). The Respondents must prove, not
necessarily with mathematical precision, to what damages they are entitled.
Infringement of a patentee's rights may be a wrong sine injuria (fJavioli et
Oie v. Shepherd 17 R.P.C. 157; Pneumatic Tyre Comparu] Ld. v, Puncture
Proof Pneumatic Tyre Oompany Ld. 16 R.P.C. 209, per Lord Russell C.J. at
pages 212, 214, 215, and Collins L.J. at page 216).
Walter K.C. and Oolefax (for the Respondents) were not called upon.
COZENS-HARDY 1Jf.R.-I am much obliged to Mr. Gray for the very clear
way in which he has put his points before us in this case, and I am none the less
obliged to him because I do not feel myself able to arrive at the conclusion to
which he desires to bring me.
The facts of the case' may be stated briefly. The Plaintiffs are Patentees.
Their Patent is admittedly good, and the invention is admittedly useful.
The Defendants are rival manufacturers, and they have sold 30,000l. worth
of infringing instruments in the course of less than t\VO years : in fact,
in not much more than one year. We are asked to say 'that there is no
inference of any damage resulting from that because the Plaintiffs' Patent
was not for the whole article, but merely for something quite trivial and
unimportant, which the Defendants might easily have got round by a slight
substitution, as in fact they have got round it now, and obtained something
better. That seems to me to be a wholly irrelevant consideration. The fact,
admitted and proved, is that this very large sum of money has been received in
respect of infringing instruments, and I am entirely unable to accept the view
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REPORTS OF PATENT, DESIGN, AND
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TRADE MARK CASES.
Meters Ld. v. Metropolitan Gas Meters
u:
that this invention was of little importance, even if that had been a relevant
fact, because the Defendants, who had a meter known as the" Plunger" meter,
deliberately abandoned that, and deliberately took to making the new meter,
called the" Simplex" meter, which has been established to be an infringement
5 of the Plaintiffs' Patent. On the consent judgment there was an inquiry as to
what damages, if any, had been sustained. I am far from saying that it is
at all an easy matter to assess damages in a case of this kind. 1 do not think
I can do better than read two passages from a judgment of Vice-Chancellor
Page Wood which state what I understand to be the law as accurately as it can
10 be stated. In Penn v. Jack (L..R. 5 Equity 81) he said :-" Then the third branch
" of relief is that which is granted in the shape of damages for the loss which the
" plaintiff has actually sustained by the conduct of the defendants, irrespective
" of the vexation and expense of a lawsuit. With reference to this I have to
" ask myself', what would have been the condition of the plaintiff if the defend15 "ants had acted properly instead of acting improperly? That condition, if it
" can be ascertained, will, I apprehend, be the proper measure of the plaintiff's
"loss. Now if the plaintiff's case had been one of a patentee who had never
" granted a licence, and had always remained his own manufacturer, the ques" tion, as I observed in Betts v. De Vitre (34 L.J. Ch. 289), would have been
20 "one of great difficulty, and I do not hesitate to say that I should not have
" attempted to grapple with it, but I should have sent it to a jury to settle the
" amount of damages." Referring to what he had said in Betts v. De Vitre, in
34 Law Journal at page 290, he said :-" I confess it appears to me that, if the
" damages are to be assessed, it would be proper- to take the identical course
25 "that was taken in H1:lZS v. Evans (31 L.J. Ch. 457) for this reason, that
" damages of this description, namely, damages for the infringement of a Patent
" where there has been no licence granted at any time for the use of that Patent,
" can only be ascertained on those very vague and guess-like data upon which
" it appears juries have been obliged to act in ascertaining what the actual loss
30 "has been that has occurred to a patentee by the user by some wrongdoer of
" his patent right." Therefore, in a case such as the present, where licences
are not granted to anyone who asks for them for a fixed SUID, it is a matter
which is to be dealt with in the rough-d.oing the best one can, not attempting
or professing to be minutely accurate-having regard to all the circum35 stances of the case, and saying what upon the whole is the fair thing. to
be done. Mr. Gray says, and no doubt says forcibly, that the Plaintiffs
lUUSt at least induce the Court to come to the conclusion that they have suffered
some loss. The inference, to my mind, is absolutely irresistable here. To say that
the sale by the Defendants of 30,OOOl. worth of infringing articles-the whole out40 put of their factory during the period in question - did not involve any loss to-the
Plaintiffs, rival manufacturers selling in the same market, seems to me to be entirely inconceivable. I think it is fair to assume-I am using the words of Lord
Russell C.J. in Pneumatic Tyre Oompany Ld. v. Puncture Proof Pneumatic
Tyre Go. Ld.(16 R.P.C. 209 at page 215)-that it would have" affected their
45 "business-to some degree at all events," but there is positive evidence, I think,
that it did affect their business to some extent. With regard to the case of the
men from Leeds who gave evidence, whose affidavit I do not propose to read,
but which has been often referred to, that seems to me sufficient, if that be
necessary, to show that there was some direct loss incurred by reason of the
50 infringing instruments. If that be so, we are really in the position of a jury,
and we must arrive at a conclusion as best we can, not tying ourselves down by
any hard and fast rule, not requiring the Plaintiffs to establish before us that
any definite number of retailers would have come to the Plaintiffs if the
Defendants had not supplied infringing instruments, but dealing with the
S1J,"l'Z~nt.]
162 THE ILLUSTRATED OFFICIAL JOURNAL (PATENTS). [Mar. 29,1911
REPORTS OF PATENT, DESIGN, AND TRADE M.A.ll.K CA.SES.
Meter» Ld, v, Metropoiitan. Gas Meters Ld,
matter broadly, and as best we can as men of common sense. That is the view
which has been taken by the learned Judge in the Court below, On this
part of the case he has been rather more favourable to the Defendants than
perhaps I should, at one part of the case, have been disposed to be. I am not
satisfied from the nature of the materials on the present appeal that he was right
in excluding the 14,000 meters as to which it is said that particular purchasers
from the Defendants would not have gone to the Plaintiffs, but would probably
have gone to somebody else; but, even assuming that, the learned Judge said
that there is a very considerable balance of 5500 meters as to which that
explanation does not arise, and he said :-" Upon the whole I think the Master
" took rather too liberal a view when he was dealing with the matter; I shall
" deal with it in the rough; I shall say that probably one-third of that, which
" amounts to about one-sixth of the whole sale, is what may reasonably be said
" to be the loss in respect of that infringement, and I give you the profit which
" you would have got in respect of that." That is one item of damage.
The other item of damage seems to me to be one which presents very little
difficulty, and one which Mr. Gray in his able argument dealt with very
slightly. The Defendants, who were in this very large way infringing, issued
advertisements, which we have had before, .us, offering to supply the infringing
instrument-of course they do not call it an infringing instrument-at ~4s.,
while the Plaintiffs were supplying theirs at 36s. tid., or whatever it may be.
Mr. Manning, one of the officials of the Plaintiff Company, said, that, what
again seems to me to be the inevitable consequence, the effect of that
advertisement was that their travellers came and said :-" We must reduce
"our prices; the Defendants are selling- meters the same as ours in their
"essential features, and our customers will not pay our prices"; and they
had to reduce their price. That seems to me to be a plain head of loss by
competition. Then it is said-" Oh, there were so many of these meters." I do
not think that there is any evidence as to the number of tbe meters which had
this particular device, which I will take it was a meritorious device, and which
certainly the Defendants thought to be a meritorious device, and to say that
because people would be willing to buy the" Plunger" rueter because it might
have been cheaper than this improved one, or may have been willing to buy
some inferior articles because they were cheaper, is a relevant matter as between
two makers of the improved patented article, seems to me I confess to be quite
clearly erroneous. The learned judge has allowed 1500l. for the effect of the
competition. It is not for me to say whether I should have arrived at quite the
same figure, be it more or be it less. Mr. Bousfield and Mr. Grray have not
satisfied me that the learned judge has proceeded upon any wrong principle;
they have not satisfied me that the sums which the learned judge has awarded
are wrong. I therefore think that this appeal must be dismissed with costs.
FLETCHER MOULTON L.~T.-I am of the same opinion. I agree completely
with the judgment which has just been given, and I should have contented myself
with agreeing formally, if it were not that an important point has been raised
in the course of the case with regard to the duty of the Court in assessing
damages in the case of infringement of Patent rights.
The facts, to which I need refer for the purpose of dealing with this point,
are very short. There are in this meter two devices playing an important
part in the. behaviour of the meter, which by the admission of the Defendants
are patented inventions of the Plaintiffs, and which the Defendants have used
on infringing instruments to a very large extent. It appears that they began so
to do in February 1905. In September they were served with a writ. They
proceeded to sell on a much larger scale in the next year, and in October of that
year they consented to judgment against them for an injunction, and an Order
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Meters Ld, v. Metropolitan Gas Meters Ld.
for damages. I consider that the behaviour of the Defendants in this case proves
incontestably that they attach importance to the use of these patented inventions, for, although they now say that in a few minutes they could have
invented something just as good, which would have been outside the Patents,
5 yet I find they that went on supplying these instruments after they knew
they would be liable to pay" damages in respect of them if they failed in
the action.
There is, therefore, no case made out here of its being a trivial matter. We must
take it as being, as between these two parties, a substantial matter. The Plaintiffs
10 have, I think, done their duty to the Court in putting forward all the elements
which enable the Court to judge of the magnitude and nature of the infringement. I take it that this is all they can be required to do. The Defendants
seek to diminish the damages by a variety of affidavits intended to show that
the particular purchasers for whom they manufactured these infring-ements
15 were customers who would not have purchased from the Plaintiffs if they had
not purchased from them. I am not for a moment going to say. that
evidence of that kind may not be relevant, but the argument based upon it
was, that where a plaintiff proves the sale of infringing instruments by the
defendants he does not establish any right to damages unless he shows how many
20 of those particular instruments would have been purchased from him if the
defendant had not sold them; and the Counsel for the Defendants were bold
enough to say that in this case of infringement on a large scale there ought to
be only nominal damages. The estimation of damages in cases of breach of
- contract, or cases of tort, is often necessarily a most difficult matter. In some
25 cases of contract, as is the case of the sale of articles capable of being purchased
in the open market, there is, under ordinary circumstances, a method so obviously
excellent of measuring the damages-measuring the injury done to the plaintiff
by the breach of contract-that that method of estimating them has almost
become a rule of the law. As soon as you leave that type of case the assessment
30 of damages depends upon circumstances so various that in most instances there
is no rule of law other than the very idea and principle of damages-that is an
equivalent for the wrong done to the plaintiff. It is very dangerous to allow
secondary rules to come in and be treated as rules of law unless you are certain
that, whatever be the particular circumstances of the case, the nature of the
35 breach, or the nature of the wrong is such that these secondary rules will
always do justice between the parties. The Defendants have set up here-the
burden of proof is on them-that there is this secondary rule of law, that
where a defendant has sold infringing articles the plaintiff can only recover
damages in respect of those which he can show would have been bought from
40 him, if the defendant had not infringed. In my opinion there is no such
secondary rule. I am quite aware that a good practical method of arriving at a
fair estimate of the wrong done may, in some cases, be by forming a conception
of how many sales of a particular article would have been made by the plajntiff
and then giving him the full manufacturing profit for that proportion, but ther~
45 is no rule of law which requires the Court to do that in all circumstances, and
there are innumerable cases in which such a rule of law would be quite inapplicable. I put some of those cases in argument to .the learned Oounsel for the
Appellants. Take this case,-An invention for improvements in engines comes
out. According to the proposition of law contended for by the Defendants
50 every man who is manufacturing engines could with impunity, so far as damages
are concerned, apply this invention to all the engines he had on order, because as
they were on order ex concessis those orders could not have gone to the plaintiffs.
Another case I suggested was this-the case of a person who has a Patent for the
totality of an instrument, All of us remember when the telephone came out.
Supplemen'. ~
164 THE ILLUSTRATED OFFICIAL JOURNAL (PATENTS). [Mar. 29,1911
REPORTS OF PATENT, DESIGN, AND TRADE MARK CA.SES.
Meters Ld. v. Metropolitan Gas .Z!lelers Ld.
There was a fundamental Patent for the telephone which left telephones in the
hands of one Company for the whole period of that Patent. Supposing a person
invented an improvement upon that Patent and that the telephone Company
applied it to all its instruments.' Could it then turn round and say:-" We make
" these instruments for ourselves; therefore you would not have had the
" making of them and could not have put your invention on the market in
"rivalry to ours, for you could not have made it without our Iieense ' ;
01"-" We buy these instruments from so and so, and under no circum..
"stances should we have bought them from you, and therefore we can
"take your invention and not be liable for damages." There are still
more obvious cases.
Persons may deliberately combine to manufacture
surreptitiously and to sell to other persons, the whole object being not to go
to the plaintiff, and not to become purchasers from him. Not one of those
manufactured articles would have been pnrchased frOID, or manufactured by
the plaintiff, because the very object of the wrongful acts was to avoid that.
Could it be suggested that this might be done with impunity? There
may ba cases; again, where a man manufactures and sells at a price so low
that the patentee would unquestionably not have sold at the price, and does
damage to the patentee all the greater because the price is so unreasonably low.
According to the contention, that there is a fixed rule of law that you can only
recover in respect of those articles which you can prove would have come from
you, all those things could be done with impunity. I quite agree with
what the MASTER OF THE ROLLS has said: that the dicta of Vice-Chancellor
Page Wood lay down the sound principles, which ought to govern the Courts.
In the assessment of damages every instrument that is manufactured or sold,
which infringes the rights of the patentee, is a wrong to him, and I do not think
that there is any case, nor do I think that there is any rule of law which says that
the patentee is not entitled to recover in respect of each one of those wrongs. The
mode of assessing damages, which I adrnit is sometimes very convenient,
whereby you calculate how many of the orders the plaintiff probably would
have got, and then take the full manufacturing profit on each article, and
multiply the two together, does not contradict what I have said. You may
estimate the damage by taking the whole of the infringing articles, and
making an allowance in respect of each one, or you may consider how many he
would have sold, and make a full allowance in regard to those. They are both,
in proper cases, reasonable methods of ascertaining what he has lost. The latter
is certainly only a rough practical method which in some cases may be efficient.
It rests on no theoretical basis, because in the eye of the law each article is a
wrong.
There is one case in which I think the manner of assessing damages in the
case of sales of infringing articles has almost become a rule of law, and that is
where the patentee grants permission to make the infringing article at a fixed
price-in other words, where he grants licences at a certain figure. Everyone
of the infringing articles might then have been rendered a non-infringing article
by applying for and getting that permission. 'I'he Court then takes the number
of infringing articles, and multiplies that by the sum that would have had to be
paid in order to make the manufacture of that article lawful, and that is the
measure of the damage that has been done by the infringement. The existence
of such a rule shows that the Courts consider that every single one of the
infringements was a wrong, and that it is fair-where the facts of the case allow
the Court to get at the damages in that ,yay-to allow pecuniary damages in
respect of everyone of them. I am inclined to thin k that the Court might in
some cases, where there did not exist a quoted figure for a licence, estimate the
damages in a way closely analogous to this. It is the duty of the defendant to
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SU·1J1Jlement. J
Mar. 29,1911] THE ILLUSTRATED OFFICIAL JOURNAL (PATENTS). 165
REPORTS OF PATENT, DESIGN, AND TRADE MARK
CAS~S.,
. .7J1.eters Lei. v, Metropolitan Gas J.l:leters 'Ld;
respect the monopoly rights of the plaintiff. The reward to a patentee for his,
invention is that he shall have the exclusive right to use the invention, and if
you want to use it your duty is to obtain his permission. I am inclined to think
that it would be right for the Court to consider what would have been the price
5 whieh-s-although no price was actually quoted-could have reasonably been
charged for that permission, and estimate the damage in that way. Indeed, .I
think that in many cases that would be the safest and best way to arrive at a
sound conclusion as to the proper figure. But I am not going to say a word
'vhich will tie down future judges and prevent them from exercising their] udgto ment, as best they can in all the circumstances of the case, so as to arrive at that
which the plaintiff has lost byreason of the defendant doing certain acts
wrongfully instead of either abstaining from doing them, or getting permission
to do them rightfully. All I say is that there is no such rule of law as
that which has been contended for by the Defendants here. In thepresent case,
15 therefore, I think that the learned Judge went .too far in wholly refusing to
consider the 14,OUO infringing instruments, which were sold to regular customers
of the Defendants. If such a principle existed then you could infringe with
impunity if you only sold to relations or settled customers. I think on the
whole that the total sum, which he has awarded, is not a bit too much, taking
20 the whole of the evidence in the case; and though perhaps I should not have
reasoned it out in the same ,vay as he did-certainly I should not have excluded
entirely from my consideration the 14,000 instruments that were sold to regular
customers of the Defendants-I am satisfied that there is nothing in his decision
as to. amount, 'v hich I ought to change in favour of the Defendants, and therefore
25 I think that this Appeal should be dismissed with costs.
BUCKLEY L.J.-I will address myself in the first instance to the question
whether the learned judge has proceeded on any erroneous principle. In my
opinion he has not. The matter to be ascertained is the pecuniary equivalent
of the injury which the Plaintiffs have sustained by the wrongful acts done by
30 the Defendants. In ascertaining that, we are not to include every injury,
however remote; we have to find the pecuniary equivalent of the injury
resulting as the natural consequence of the acts done by the Defendants.
In order to answer that inquiry the proper mode is, I think, to ascertain,
as far upon the evidence -as it is possible to judge, the extent to which
35 the trade of the Plaintiffs has been interfered with by the acts of the
Defendants-what number of meters did they sell less by reason of the acts.
of the Defendants? Then, having ascertained the number, find out what
was the profit that they would have made upon each meter. Then you have a
multiplication sum, and you arrive at a result. Now that is the principle which,
40 it appears to me, the learned judge has followed. It has been agreed between
the parties that the total number of meters is to be taken at 19,500-1 will call
it 19,000 for brevity,-of which ]4,000 have been the subject of evidence
addressed to show that the persons who bought those from the Defendants would
not, if they had not found what they wanted there, have gone to the Plaintiffs
45 for them. The learned judge has ruled this out altogether, and there remain
5000. Mr. Grcty has addressed to us a forcible argument, the basis of which,
I think, is this :-He said that 14,000 would not have come to the Plaintiffs
in any case, and the Plaintiffs have failed to show that the 5000 would have
come; assume that the 5000 would not have come either, then there is no
!iO evidence of damage. I will make the assumption that he asks us -eo make,
and assume that the 5000 would not have come either. That does not, to my
mind, prove necessarily, that there is no damage. Suppose that the whole
19,000 were sold to people who under no circumstances would have bought
from the Plaintiffs, but suppose that the fact is that the effect of the
p
Supplement.]
166 THE ILLUSTRATED OFFICIAL JOURSAL (PATENTS). [Mar. 29,1911
REPORTS OF PATENT, DESIGN, AND TRADE MARK CA.SES.
Meters Ld. v, Metropolitan
GctS
Meters Ld.
advertisement of the infringing meter at this price has been to bring
down the Plaintiffs' price, and instead of getting 36s. they have to take 34s.,_
that 'is evidence of damage. I cannot see that the matter can be reduced to
nominaldamages. It is plain 011 the evidence that the action of theDefend.. .
ants had brought down the Plaintiffs' price. . That is not nominal damages;
the figure to be ascertained is how much has it brought down their price, and
how much injury did the Plaintiffs suffer by its being brought down. Then if
it is not a case of nominal damages you are confronted, I agree, with a difficult
problem. If you rule out the 14,000 there remain the 5000, and the next
inquiry is, to what extent would the Plaintiffs have obtained the benefit of the
custom of buyers of the 5000 if the Defendants had not offered those buyers
the infringing article.
I think that, upon. the evidence, the buyers of that article presumably wanted
what I will call the patented machine, whether made by the infringers or not.
For some reason or other, the Defendants dropped their "Plunger," and adopted
the " Simplex," the "Simplex" being the infringing one, and they chose to keep
011, or at any rate they had this trad e-and upon this part of the case I think it is
material, on the rest of it I do not think it is relevant at all-and after the Writ was
issued they went on manufacturing. I do not think that aggravates the damages,
but it is material to show that, after the Defendants were confronted with the
proposition.e-." You are infringing the Patent," it was worth their while to
run the risk of a Patent action, and to go on making and selling the alleged
infringing article. Why did they do it? Because it must have attracted customers. As it seems to me that is the fair inference on this state of facts. It
seems to me to be established on the evidence that this patented article did
attract customers. It was a thing that was wanted, and, for some reason or
another, people were willing to buy it, and.did buy it; and if they could not
have bought it from the Defendants the inference is that presumably they
would have got it from the Plaintiffs-some of them would at any rate. Now,
110'V many?
That, of course, is a matter npon which you cannot proceed with
any exactitude at all, and my only doubt and difficulty in the case is one
to which I cannot give effect. If I had been the judge trying this case as a
judge of first instance I do not think I should have gone so far as seventenths, which the learned Judge has done, but that will not do for the purpose
of an appeal. The Appellants must show that the learned Judge, who assessed
the amount on what I hold to be a right principle, and upon materials which
led to some proportion. or another-though what proportion is uncertain-is
wrong. I do not think they show that he is wrong. He has given seven-tenths
of the 5,000 odd meters, and he gave a certain figure, which is not very accurate,
but is admitted before us, of 138. 4d. in respect of each meter. That only leaves
the other sum which was given for the effects of competition. The result of
the Defendants' acts was to bring down the Plaintiffs' prices to their customers,
and. the learned J udge has arrived at an amount which I cannot say is wrong,
though the whole subject-matter is one that is not capable of being mathematically ascertained by any exact figure. It is an amount upon which minds
will differ, but I think that the learned Judge has decided upon a right principle,
and-In a manner consistent with the evidence before him. .On that ground 1
think that it is not for us to disturb the judgment, and that this appeal should
be dismissed.
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On the Defendants undertaking not to alter their position by granting a 50debenture, execution was stayed for a month, but no stay was granted as to
costs.