Cincinnati Siemens-Lungren Co. v. Western Siemens Co. - 152 U.S. 200 (1894)
U.S. Supreme Court
Cincinnati Siemens-Lungren Co. v. Western Siemens Co., 152 U.S. 200 (1894)
Cincinnati Siemens-Lungren Gas Illuminating Company
v. Western Siemens-Lungren Company
Argued January 5, 8, 1894
Decided March 5, 1894
152 U.S. 200
The owner of an exclusive right to sell, place, and operate a patented invention within the limits of a state conveyed to another party the like exclusive right in certain specified counties in that state and agreed that during the period covered by the licenses and patents, the grantor would not knowingly sell or permit others to sell the patented goods within those counties, and further that the grantor would supply the patented articles to the grantee on specified terms and conditions. The contract also guaranteed that the patented articles so supplied should have a life service of five years, and the grantor agreed to defray the expense of incidental repairs necessary thereto. The grantor then assigned all its rights and interest in this contract to a third party. The grantee continued to order the patented articles, as wanted, from the grantor, and the assignee supplied the goods as ordered and they were accepted. The assignee sued the grantee to recover the value of the goods so delivered. The grantee denied all liability and set up as counterclaim a claim for damage by reason of sales of the patented article in the territory covered by the license.
(1) That the defendant, having accepted the goods from the plaintiff, was bound to pay for them.
(2) That his liability for them was to be measured by the contract price, and not by the market rate.
(3) That with reference to the sale of the patented articles in the licensed territory, the scienter was an essential part of the agreement, and, in the absence of proof of actual knowledge of the sale by the plaintiff, the defendant could not recover on his counterclaim.
(4) That as to sales which were shown to have been made with the plaintiff's knowledge, the measure of damages was the plaintiff's profits, and not the profits which the defendant might have made.
(5) That the defendant could recover, under the agreement as to the life service of the patented articles supplied to him only for such repairs as he had been obliged to make, and not for estimated repairs during the remainder of the period.
On February 25, 1889, the defendant in error, a corporation of the State of Illinois, commenced its action in the Circuit Court of the United States for the Southern District of Ohio to recover from the defendant, a corporation created under the laws of Ohio, the sum of $6,922.64 for goods and merchandise. The defendant appeared and filed an answer and cross-petition. A trial was had before a jury, which, on February 10, 1890, returned a verdict for the plaintiff in the sum of $5,752.34. This amount was reduced by the plaintiff, in accordance with the opinion of the court, by the sum of $127.90, and for the balance, with interest, a judgment was entered. To reverse such judgment, defendant sued out a writ of error from this Court.