Duplate Corp. v. Triplex Safety Glass Co.

Background

A patent owner sued two manufacturers for copying a process to make laminated “safety” glass used in automobile windshields. One defendant (Duplate) made the finished product and the other (Pittsburgh Plate Glass) supplied thin glass to Duplate. A master examined the companies’ books after an earlier decree found infringement, and the courts addressed how much the infringers must pay in profits and damages, given that the companies said they acted in good faith and sometimes ran sales at a loss.

Reasoning

The Court addressed how to measure what the infringers must turn over. It approved letting the infringers deduct the ordinary, unavoidable costs of manufacturing—like broken or spoiled sheets that were necessary to produce the good pieces. But it rejected credits for sales that proved futile (returned goods) and refused to let an infringer value internally supplied thin glass at inflated market prices or claim savings from using its own patents. The Court explained that a patent owner may choose the transactions that help its claim and reject those that harm it, and that average-cost accounting is acceptable when precise apportionment is impractical. The Court also said interest on royalty-style damages should run only from the date the damages are liquidated.

Real world impact

Patent owners and manufacturers must follow the Court’s accounting rules: makers can deduct normal production waste but cannot erase liability by claiming returns credits, market markups on intrafirm supplies, or savings from their own patents. If actual profits cannot be proved, reasonable royalties may be used and interest starts when damages are fixed. The master may reconsider book inspection requests on remand if still necessary.