Leman v. Krentler-Arnold Hinge Last Co.
Headline: Patent-holder wins right to recover profits after company sold a banned shoe hinge, as Court affirms district court jurisdiction and enforces the permanent injunction nationwide.
Holding: The Court held that the district court could enforce its nationwide permanent injunction against the company for civil contempt and that the patent-holders could recover profits earned from the violating sales.
- Allows patent owners to recover profits from injunction violations.
- Prevents companies from escaping injunctions by leaving the district.
- Enables accounting and compensation for infringing sales and expenses.
Summary
Background
A Michigan company called Krentler-Arnold Hinge Last Company was permanently enjoined from making certain hinged shoe lasts after a prior infringement suit. The patent-holders had won a final decree in Massachusetts in March 1928 that barred the company from making, using, or selling the patented invention or close equivalents. The company later marketed a new “sliding link” hinge, and the patent-holders brought a contempt proceeding in June 1929 to enforce the injunction.
Reasoning
The Court considered two main questions: whether the Massachusetts court still had power to enforce its permanent injunction against the company, and whether the patent-holders could recover the profits from the violating sales. The Court held the decree bound the company everywhere and that civil contempt enforcement is part of the original suit, so the district court had jurisdiction. It also explained that civil contempt is remedial, not criminal, and that recovering profits is proper compensation for the injury caused by the violation.
Real world impact
The decision means that a company cannot avoid a permanent injunction simply by moving or doing the offending business outside the original district. Patent-holders can seek an accounting and recover the profits made from sales that violate an injunction, along with reasonable expenses. The Supreme Court reversed the appellate court’s limitation on recovery and affirmed the district court’s award of profits.
Dissents or concurrances
Justice McReynolds disagreed and would have dismissed the proceedings for lack of jurisdiction over the company.
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