Panduit Corp. v. Stahlin Bros. Fibre Works, Inc.

575 F.2d 1152 (1978)

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Nature of the Case

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Facts

P sued Stahlin (D) for infringement of patent '301, covering duct for wiring of electrical control systems. The district court found claim 5 valid and infringed by the 'Lok-Slot' and 'Web-Slot' ducts made and sold by D, enjoined D from further infringement, and ordered an accounting. Thereafter, the district court adjudged D in contempt of the court's injunction, because of D's making and selling the 'Tear Drop' duct, a colorable imitation of the infringing 'Lok-Slot.' That judgment was also affirmed on appeal. In 1971, the district court appointed a master to determine P's damages pursuant to §284. The district court adopted in toto the master's report. The court held that 'the master had correctly applied the law to the circumstances of this case.' It recommended $44,709.60 in damages, based on a royalty of 2 1/2% of gross sales price, the percentage being calculated on D's testimony that its normal profit on all of its products was 4.04% and the concept that a 'reasonable royalty' entailed some level of profit to the 'licensee.' P appealed. P argues that the district court erred (1) in denying P lost profits due to lost sales, or, in the alternative, a 35% reasonable royalty; and (2) in denying Pits lost profits from its own actual sales due to D's price cut. P seeks $808,003 as damages for lost profits on lost sales over the period March 6, 1962, the date of first infringement, to August 7, 1970, the effective date of the initial injunction; 2 or, alternatively, a 35% reasonable royalty rate yielding $625,940. In addition, P seeks $4,069,000 in profits lost on P's own sales because of D's price cut.