royalty on these twenty-six patents that were involved in their process of manufacture, that payment, of course, would have been an allowable deduction. We can see no distinction if they themselves happened to own the patents. We believe they should be entitled to a reasonable royalty allowance on account of their patents. The findings of the master in this regard are approved by the court.
(e) Special Cutting Losses. This special cutting loss allowed by the master arose from the adjustment necessary to translate the average profit on one-eighth inch plate glass into the specific profit realized by the Pittsburgh Plate Glass Company on its sales to the Duplate Corporation, as the master found. The glass furnished by the Pittsburgh Plate Glass Company to the Duplate Corporation for the manufacture of infringing glass resulted in unusual cutting losses in view of the fact that the orders of the Duplate Corporation were confined almost entirely to windshield size. We believe the master has correctly ruled on this phase of the controversy, because of the fact that the orders from the Duplate Corporation to the Pittsburgh Plate Glass Company were for quantities of glass of one size, with the result that there were additional cutting losses in cutting glass of this size out of the original sheets. We shall confirm the master in this ruling.
(f) Allowance for Federal Income Tax Actually Paid. The plaintiff argues that the income tax actually paid by the defendants should not be allowed, because the defendants were deliberate infringers. On this objection we have already ruled that the defendants are not deliberate infringers. The next argument advanced by the plaintiff against the allowance of this item is the fact that a special cutting loss and interest on the investment were not taken into consideration in the computation of the tax. We do not think we can properly go into that. The tax actually paid, whatever the method of computation by the government, enters into the determination of profits and losses. As Judge Woolley pointed out in MacBeth-Evans Glass Co. v. L.E. Smith Glass Co. (C.C.A.) 23 F.2d 459, 463, a book profit is not a profit actually made when the government takes a part of it as a tax. In this allowance, we concur in the master's ruling.
(g) Selling Commission. The infringing laminated glass was sold by the defendant, the Pettsburgh Plate Glass Company, at a commission of 5 per cent. on the sales in a period up to January 1, 1929, and 3 per cent. thereafter.These commissions computed at that rate amount to $220,742.95. The plaintiff's attack on the allowance of these commissions seems to be based on the theory that the Pittsburgh Plate Glass Company and the Duplate Corporation are one and the same corporation. Therefore, the Pittsburgh Plate Glass Company should not be allowed a commission. The facts of this case, as we view it, do not show that situation. The Duplate Corporation was the corporation engaged in the manufacture of this laminated glass. The glass that entered into the product was furnished by the Pittsburgh Plate Glass Company, which owned 50 per cent. of the capital stock of the Duplate Corporation. The DuPont Viscoloid Company furnished the pyralin that entered into the laminated product, and owned 50 per cent. of the capital stock of the Duplate Corporation. The Pittsburgh Plate Glass Company sold the finshed laminated product, and were very properly allowed the commission for that service. The amount seems to be reasonable, and the selling cost, we think, was a proper item entering into the computation of profits. If there were other sales agents, they would have had to spend that amount at least in the sale of the laminated profits. We shall approve the master's allowance.
(h) Interest on Investment. The question here involved is whether or not under the facts of this case the master was correct in his conclusions of law to the effect that the defendants are entitled to allowance for interest on investment. We think the facts of this case do not justify us in holding that the defendants have forfeited the right to interest on the investment. They were not deliberate infringers; and we believe that under the ruling authorities they are entitled to a reduction of profits by allowance of interest on invested capital. We confirm the master's ruling in this regard.
This disposes of all the objections and exceptions made by the plaintiff in regard to profits and losses in this case.
We now proceed to pass on the question of damages as allowed. Both parties are dissatisfied with the damage awarded by the special master. We have carefully reviewed the master's findings and the evidence upon the subject of general damage. We have come to the conclusion that he is right in his holdings as to the damage items. We confirm his award on his findings. It seems to us that the reasonable royalty found by the master is adequate and justified by the evidence.
On plaintiff's motion to assess costs and provide for interest on the award, the plaintiff having prevailed before the master, we are of opinion that as a matter of course the costs of the accounting must be assessed against the defendants. The decree will so provide.
On the subject of interest, we believe the correct and proper ruling would be to allow interest on the award of damages from the date that the infringement ceased. Motor Player Corporation v. Piano Motors Corporation (D.C.) 19 F.2d 993. The decree may so provide.
The exceptions, therefore, both of the plaintiff and of the defendants to the special master's report will be overruled, and the report confirmed absolutely. A decree in accordance with this opinion may be submitted.
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