350 F. 2d 18 - Canadian Ingersoll-Rand Company v. Peterson Products of San Mateo Inc

In this patent infringement suit the district court entered judgment for defendant, determining that the two patents sued upon are invalid and, in any event, not infringed. The opinion of the district court leading to entry of this judgment is reported in 223 F.Supp. 803.

Plaintiffs appealed from that judgment. They thereafter moved in the district court, under Rule 60(b), Federal Rules of Civil Procedure, for a new trial on the ground of newly-discovered evidence pertaining to the asserted prior art patent of Richard C. Bradley (United States Patent No. 3,123,307). At the same time plaintiffs moved in the district court for an order indicating that it would entertain the motion for a new trial, if this court shall remand the case for that purpose. The latter motion was denied upon initial consideration, and again upon rehearing, and plaintiffs appealed from both of those orders.

These three consolidated appeals are now before us.1 The patents in suit are also involved in litigation elsewhere. On May 24, 1963, the United States District Court, Southern District of Florida, Miami Division, held the patents to be valid and infringed. Ibis Enterprises, Ltd. v. Spray-Bilt, Inc., 220 F.Supp. 65, now pending on appeal in the Fifth Circuit. A similar suit in Arkansas has not yet been tried, according to the latest advice received by this court.

One of the patents here sued upon is No. 2,933,125-- 'Method Of And Portable Apparatus For Depositing Reinforced Plastic' (main or '125 patent). David F. Anderson, the asserted inventor, applied for that patent on August 6, 1953, the date of the claimed invention being July, 1952. The patent was not issued until April 19, 1960. It contains six claims all relating to the method of forming reinforced plastic articles by cutting fibers, spraying the cut fibers with an atomized plastic in a fluid state and depositing the fibers on a mold to form a fiber reinforced plastic article, and to a hand-held machine for carrying out the method.

The other patent sued upon is No. 2,787,314-- 'Apparatus And Method For Forming A Fiber Reinforced Plastic Article' (improvement or '314 patent). Anderson applied for it on October 13, 1954. It was issued on April 2, 1957, which was three years prior to issuance of the main patent. The improvement patent, containing thirteen claims, is for specific improvements upon the apparatus and method of the main patent.

Anderson assigned the patent applications to Ingersoll-Rand Company, Ltd. (Ingersoll-Rand), which thereby became the owner of both patents when issued. That company, in turn, entered into an agreement with Rand Development Corporation (Development), under which the latter became, and still is, exclusive licensee under both patents.

On February 24, 1959, Ingersoll-Rand and Development instituted this action against Peterson Products of San Mateo, Inc., also known as Peterson Spray Gun Co., Inc. (Peterson Products) charging infringement of the improvement patent, the main patent having not yet been issued. Since September, 1958, Peterson Products has been manufacturing, using and selling both a resin spray gun and a fiberglass cutter. When these devices were used conjointly by Peterson Products, or by its customers according to the written instructions of Peterson Products, to manufacture fiberglass reinforced plastics, the combined devices constituted the accused apparatus and their use the accused method.

Following the issuance of the main patent Ingersoll-Rand assigned all of its interest in the two patents to Ibis Enterprises, Ltd. This company later became Ingersoll-Rand World Trade Ltd. (World Trade), by which name it will be referred to herein. On August 18, 1961, Ingersoll-Rand, Development and World Trade, filed a supplemental complaint against Peterson Products, bringing in issue the infringement of the main patent as well as the improvement patent.2

In its answer to the supplemental complaint, Peterson Products denied infringement and advanced several affirmative defenses. Among the defenses asserted were that both of the patents sued upon are invalid for a variety of reasons, and that plaintiffs are guilty of unclean hands and misuse of patent rights.3 Defendant counterclaimed for a judgment declaring the patents are invalid, unenforceable because of misuse of patent rights and, in any event, not infringed. The trial consumed thirty-one full trial days, including three days of opening statements and about three days of closing arguments.4

The district court held both patents invalid for several reasons, as summarized in the margin.5 In order to obtain a reversal, appellants must convince us that the trial court erred as to each and every ground relied upon by that court in holding the patents invalid and, in addition, that the trial court erred in holding that the patents have not been infringed.

In our opinion the trial court did not err in finding and concluding that, for each of the first four reasons stated in note 5, the main patent is invalid. Likewise, the trial court did not err in finding and concluding that, for the reasons set out in the last sentence of note 5, claim 11 of the improvement patent is invalid. As stated in note 2, above, this is the only claim of the improvement patent which was assertedly infringed.

As our basis for these determinations we adopt the discussion of these points in the thorough and scholarly opinion of the trial court, reported at 223 F.Supp. 803, with such modifications of that opinion as were effectuated by the subsequently entered findings of fact and conclusions of law. Our study of the record and briefs convinces us that the trial court opinion, as so modified, correctly analyzes and resolves the issues pertaining to these particular grounds of invalidity, and that the findings of fact upon which these legal conclusions are predicated are not clearly erroneous.

Perhaps this would be enough to say in support of the trial court findings and conclusions in question. However, we think it appropriate to discuss at some length what may perhaps be the primary ground on which the main patent was held to be invalid, indicating why we are in agreement with the trial court. We refer to the second reason set out in note 5, to the effect that the subject matter as a whole as set forth in the claims would have been obvious at the time the invention was made to a person having ordinary skill in the art to which the subject matter pertains. The statutory basis for this ground, as cited by the trial court, is 35 U.S.C. 103 (1958).6

Appellants challenge the findings of fact and legal conclusions upon which this ground of patent invalidity is based.

The general subject matter of the main patent is a method of making reinforced plastic articles utilizing polyester resins and fiberglass, and an apparatus for performing it. The resins used in all methods employed in making reinforced plastic articles consist of resin-catalyst mixtures and resin-accelerator (promoter) mixtures which, when combined together harden within a short time into a hard plastic structural material. In all such methods fiberglass is used with these resins for purposes of reinforcement. Fiberglass was first made available for this purpose in the form of woven glass cloth or a chopped fiberglass matting.

The manufacture of reinforced plastic articles, such as small pleasure boats, was initially accomplished by either the 'hand lay-up method' or the pre-form (matched metal die) method. The hand lay-up method consists in hand tailoring the glass fiber matting or cloth, or layers of both, fitting and draping the cut pieces to lay on or around the mold. The cloth and mat layers are then brushed or sprayed with a mixture of catalyzed and accelerated resin so that the fiberglass reinforced resins will harden to form a structural article or part which is subsequently removed from the mold.

The pre-form method consists in the use of pre-form equipment which includes a rotary cutter to chop or cut fiberglass rope or roving into small lengths which is then blown against a perforated mold. Simultaneously there is sprayed onto the chopped glass fibers a bonding resin. This molded pre-form of chopped bonded fibers is then placed between matched metal dies where additional bonding resin is poured onto the fibers to fully impregnate then. The dies are then closed and subjected to heat and pressure to compact and densify the fibers and to cause the bonding resin to quickly come into a hardened condition.

The method contemplated by the main patent is the simultaneous spraying of reinforcing fibers in conjunction with a liquid adhesive binder, whereby the liquid binder and fibers are deposited on a mold or other surface to build up a laminate or coating of reinforced plastic material of desired thickness. The apparatus for utilizing this method, as disclosed in the main patent, comprises essentially two component parts: (1) a pair of spray guns for simultaneous spraying usually a catalyzed resin through one gun and a promoter resin through a second gun for convergence at a point in the air in front of and close to the surface to be covered, and (2) a rotary cutter or chopper for cutting fiber roving into short fiber lengths and ejecting them into the converging resin sprays referred to above.7 The cutter or chopper is mounted in the center of a metal frame, and the two spray guns are mounted on opposite ends of the frame.

As indicated above, and as conceded by appellants, the use of fiberglass and polyester resin in the manufacture of reinforced plastic articles was old in the art at the time of Anderson's asserted invention in July, 1952.

The trial court found, in effect, that the use of a spray gun to receive liquid plastic and air and emit an atomized spray of liquid plastic, was old in the art. This finding has support in the specification of the main patent where it is stated that the spray guns may be of any type adapted to such a purpose '* * * such as the gun disclosed in United States Patent No. 2,059,706.'8

The trial court also found that the concept of simultaneously spraying a catalyzed resin through one spray gun and a promoter resin through another spray gun for externally mixing the two reactant adhesive components, was old in the art. This finding is confirmed by appellants' requested finding of fact No. 34.9

The trial court additionally found that the concept of using a rotary cutter or chopper to sever the fiberglass or other roving or rope-like strands of glass or other materials into shorter fiber lengths was old in the art. Among the prior patents establishing this, the court found, was the art evidenced by the Bacon patent (No. 2,702,261), Stotler patent (No. 2,719,336), Slayter patent (No. 2,618,817) and the Brenner and Turner pre-form cutters. All of these except the Slayter patent, were for bench cutters. The latter patent shows and describes a small hand-held glass cutter device.10

In our opinion, none of the findings referred to above is clearly erroneous. But appellants are not relying upon these individual elements as the apparatus claimed, or the way such elements are used as the method claimed. The main patent, they note, consists of the described combination of these elements as the apparatus claimed, and the described manner of using such combination as the method claimed.

The immediate question then, is whether the claimed combination of old elements and the claimed use of such combination is obvious within the meaning of section 103. As to this the trial court made several findings, some of which are quoted in the margin.11

Appellants argue that the trial court was led into error in making these findings of fact because it read the claims of the main patent too broadly. Instead of construing the claims solely in the light of the patent specifications, appellants assert, the court impermissibly referred to matters extraneous to the patent.

In finding of fact No. 21 the court found that the Anderson patents are not limited in scope specifically to the use of 'glass' fiber roving, as distinguished from other types of fiber roving, nor to 'polyester' plastics, as distinguished from other types of adhesive plastic binders. It was because of this broad reading of the claims in question, appellants argue, that the court was able to find that what was shown by the claims of the main patent was obvious from the prior art.

The so-called extraneous matters to which the district court referred in construing the scope of the main patent, are specifically referred to in its finding of fact No. 21.12 These materials tend to support finding No. 21.

It is questionable whether appellants are in a position to object to the action of the trial court in considering these sources of information, inasmuch as they have relied upon the same materials in proof of the date when Anderson imported his asserted invention from Canada to the United States (Anderson disclosure of July 22, 1953), and in proof of commercial success (license agreements). Moreover, there is substantial authority for the proposition that it is appropriate to consider the actions and statements against interest of the inventor or patent owner in construing the scope of a patent. See Jungersen v. Baden, 2 Cir., 166 F.2d 807, 809, aff'd 335 U.S. 560, 69 S.Ct. 269, 93 L.Ed. 235; Timken Detroit Axle Co. v. Cleveland Steel Prod. Corp., 6 Cir., 148 F.2d 267, 270.

But apart from these so-called extraneous materials the fact is, as the trial court stated in its finding of fact No. 21, that the only mention of fiberglass or polyester resin in either of the Anderson patents appears in its recital concerning the prior art. Neither the description of the alleged invention nor the claims of the patent are limited to either glass fibers or any particular type of bonding plastics. This circumstance alone is sufficient to support finding of fact No. 21. Thus, in determining the question of obviousness the court was not bound to restrict its review to prior art pertaining to glass fiber roving, as distinguished from other types of fiber roving, nor to polyester plastics, as distinguished from other types of adhesive plastic binders.

We conclude that the district court did not proceed improperly in construing the claims in question nor in reaching the conclusion that the main patent is not limited in scope as described in finding of fact No. 21.

Appellants argue that findings of fact relating to the question of obviousness are clearly erroneous in that they are not supported by substantial evidence.

In support of these findings there was some opinion testimony, primarily that of Dirks Foster, a patent attorney. Appellants think his testimony should not have been accorded much weight, but this was for the trial court to determine. The main support for these findings, however, comes from all of the evidence, testimony and exhibits bearing upon the state of the art prior to Anderson, and what he contributed to that art. As to some of the facts, the evidence is in conflict. But most of the evidence that is in conflict is susceptible of varying interpretations and evaluations and gives rise to a choice of inferences, all of which could reasonably appeal differently to one fact finder than to another.

Absent some plain signal that the trial court has gone far amiss, this court rarely finds reason for overturning findings so dependent upon such a process of appraisal. We perceive no such signal here. Nor, insofar as we can determine, did the trial court find the facts pertinent to this issue under the strictures of an erroneous view of the law. It did not, for example, find that the idea was obvious on the mistaken notion that all combinations of known elements are obvious.

Apart from such matters, the patience with which the court permitted full development of the facts at the trial, the care and analysis that went into its exhaustive reported opinion, the detail and completeness of the formal findings, formulated after thorough post-trial proceedings, bespeak our confidence in the findings stated.

It is therefore our view that the findings of fact relevant to the section 103 question are not clearly erroneous. We are also of the opinion that, given these facts, the trial court correctly applied the statutory proscription against the patenting of that which is obvious, as stated in that section.13

Having determined that the trial court, for each of the first four reasons stated in note 5, correctly found and concluded that the main patent is invalid, we need not consider the additional reasons which that court gave for invalidating that patent. Nor need we consider the question of whether the court erred in holding that the main patent had not been infringed.

As indicated above, we here also uphold the trial court determination that claim 11 of the improvement patent is invalid for each of the reasons stated in the last sentence of note 5. But the court also held all claims of the improvement patent invalid for the sixth and seventh reasons stated in note 5. Had it not been for the counterclaim, challenging the validity of all claims of the improvement patent, this determination would not have been necessary since only claim 11 of the improvement patent was assertedly infringed. But since the issue of the validity of these claims of the improvement patent was presented by the counterclaim and adjudicated by the trial court adversely to appellant, we must deal with it.

The trial court in support of its conclusions of law that all claims of the improvement patent are invalid for the sixth and seventh reasons stated in note 5, found that the patent failed to specifically set forth certain information which was necessary for a satisfactory spray-up formulation. The factors are all directed at the use of the equipment for making fiberglass reinforced plastics.

That court, on the other hand, found that the patent was not limited in the descriptions or claims of the patent or in practical use to a method for making fiberglass reinforced plastics. Its uses include, for example, the spraying of tar and asphalt binder in conjunction with fiberglass or other fiber or material. We therefore see no reason why the patent, to comply with the requirements of 35 U.S.C. 112, should single out and specify information used for making fiberglass reinforced plastics. Accordingly, we are of the opinion that the trial court erred in holding that the improvement patent is invalid for the sixth and seventh reasons stated in note 5.

This brings us to the second and third appeals referred to at the outset of this opinion. As previously stated, after appealing to this court from the judgment holding the patents invalid and not infringed, appellants moved in the district court, under Rule 60(b), Federal Rules of Civil Procedure, for a new trial on the ground of newly-discovered evidence pertaining to the asserted priority patent of Richard C. Bradley. At the same time, and to provide a basis for asking this court to remand the cause for the consideration of the Rule 60(b) motion, appellants moved in the district court for an order directing or indicating that it will 'entertain and consider' appellants' accompanying motion made under Rule 60(b).

The two motions were noted for hearing at the same time. In support of both motions, appellants filed an affidavit which presented factual and argumentative materials not only going to the merits of the Rule 60(b) motion, but also to the desirability of acting thereon prior to determination of the main appeal. In its memorandum filed in opposition to the motion for an order of the district court that it would 'consider' a motion under Rule 60(b), defendant argued that, on its face, the Rule 60(b) motion is not based on newly-discovered evidence and that therefore there was no need for the delay occasioned by a remand of the proceedings to the district court.

In denying the motion for an order directing or indicating that the court will entertain a motion under Rule 60(b), the district court gave as its reason that the assertedly newly-discovered evidence would not lead the court to a conclusion different than that originally reached. No order was entered denying the Rule 60(b) motion and, indeed, no such order could have been entered prior to a remand, since the district court would have been without jurisdiction to do so.

Apparently both counsel for appellants and the district court thought that the procedure being followed was that which was suggested in Creamette Company v. Merlino, 9 Cir., 289 F.2d 569, and Greear v. Greear, 9 Cir., 288 F.2d 466, since both counsel and the court cited those decisions as authority for the procedure being followed.

However in both of those cases, it was stated that where a Rule 60(b) motion is made during the pendency of the appeal, the district court should be asked to indicate whether it would 'grant' the motion, and if such an indication was given, the appellant should then move in the court of appeals for a remand.14

But, as indicated above, appellants did not ask the district court to indicate whether it would grant the Rule 60(b) motion, but only whether it would 'entertain' that motion. In denying that motion the district court did not state that it was denying, or would deny, the Rule 60(b) motion, but only that it would not entertain it at that time. It is true that the reason it gave for this action went to the merits of the Rule 60(b) motion, but the fact remains that the latter motion was not acted upon at all.

Thus the procedure actually followed in the district court, instead of being that suggested in Creamette and Greear, was the procedure, subsequently suggested in Smith and Corey v. United States, 9 Cir., 294 F.2d 771, and thereafter followed in Paddock v. United States, 9 Cir., 302 F.2d 514; and Morgan v. United States, 9 Cir., 303 F.2d 647. In each of those cases the appellant was told to apply to the district court for an order indicating that it would 'entertain' the motion for a new trial, and if such an order was entered, the appellant was advised to apply to the court of appeals for a remand.15

Since no order has been entered granting or denying the Rule 60(b) motion, but only orders of a procedural nature declining to direct or indicate that the district court will entertain and consider that motion during the pendency of the main appeal, such orders are interlocutory in nature and not final and appealable.16 But while the second and third appeals must for this reason be dismissed, this does not mean that appellants have been deprived of an adjudication of their Rule 60(b) motion. That motion was timely filed and if appellants find any virtue in pursuing it, having in view the several grounds on which we affirm, they are free to do so following the final disposition of this appeal.

Appellee's motion for the award of reasonable attorneys fees, pursuant to 35 U.S.C. 285 (1958) is denied.

The final judgment of January 6, 1964 is affirmed insofar as it determines that the main patent (No. 2,933,125) is invalid and that claim 11 of the improvement patent (No. 2,787,314) is invalid. It is reversed insofar as it determines that the other claims of the improvement patent are invalid. The appeals from the orders entered on June 5, 1964, and June 22, 1964, are dismissed.