Control Components, Inc., and Richard E. Self v. Valtek, Inc. And Alpha Engineering Company

ALVIN B. RUBIN, Circuit Judge,

concurring in part and dissenting in part:

I.

In discussing the validity of the patent, the majority opinion demonstrates complete understanding of the issues. Because I think the result my brethren reach is correct, I concur. However, while the approach they take pursues a line indicated by prior jurisprudence, I think it takes us a step further into the Serbonian bog that threatens to engulf patent litigation. A different method of trial appears to me to be the only firm ground for traversing the terrain of obviousness in a manner consistent with the Supreme Court’s determination in Graham v. John Deere Co., 1966, 383 U.S. 1, 17 , 86 S.Ct. 684, 694 , 15 L.Ed.2d 545, 556 , that “the ultimate question of patent validity is one of law.”

Patent validity and nonobviousness are not separate questions; validity embraces nonobviousness for it can be established only by proving that indispensable ingredient. In Swofford v. B & W, Inc., 5 Cir. 1968, 395 F.2d 362 , cert. denied, 393 U.S. 935 , 89 S.Ct. 296 , 21 L.Ed.2d 272 , Judge Wisdom, implementing Graham for a panel of this court, attempted to provide a path to follow in determining the respective roles of judge and jury in deciding the obviousness issue. Noting the inconsistent trails we had previously followed, Swofford determined that obviousness is itself a question of law for the judge to decide. The decision is reached in three steps. First, what was the prior art? — a factual question. Second, what, if any, improvement has the patentee made over the prior art? — a question of fact that will usually turn on expert testimony. Third, would the improvement have been obvious to one skilled in the art? — a question of law, fully reviewable by the appellate court.

The Supreme Court apparently takes the same view of the obviousness issue, see Sakraida v. Ag Pro, Inc., 1976, 425 U.S. 273 , 96 S.Ct. 1532 , 47 L.Ed.2d 784 ; and we have since attempted consistently to adhere to the approach in Swofford. See, e. g., Robbins Co. v. Dresser Industries, Inc., 5 Cir. 1977, 554 F.2d 1289, 1290 ; Gaddis v. Calgon Corp., 5 Cir. 1975, 506 F.2d 880, 884 ; Garret Corp. v. American Safety Flight Systems, Inc., 5 Cir. 1974, 502 F.2d 9, 14 .

In White v. Mar-Bel, Inc., 5 Cir. 1975, 509 F.2d 287 , we took another step on the Swof-ford course, stating:

[I]f the ultimate issue of validity depends on subsidiary fact questions, it is the court’s duty to instruct the jury that it should return one verdict if the facts are found one way and a different verdict if the facts are found otherwise. In such event, as in other cases tried to a jury, the reviewing court will presume that the disputed matters of fact have been resolved favorably to the prevailing party in accordance with the trial judge’s instructions. (Emphasis supplied.)

Id. at 290-91 . We thus adopted the view of the Seventh Circuit in Panther Pumps & Equipment Co. v. Hydrocraft, Inc., 7 Cir. 1972, 468 F.2d 225, 228 , cert. denied, 411 U.S. 965 , 93 S.Ct. 2143 , 36 L.Ed.2d 685 , an opinion by Judge (now Justice) Stevens.

*775 I respectfully submit that the path laid out in Panther Pumps and followed in Mar-Bel does not and cannot satisfy the Graham mandate. Both opinions rely on the thesis that, because the judge may, in other civil jury cases, instruct the jury to render a general verdict, he may (or should) also do so in patent validity cases. Under that view, the problem in patent cases is merely to instruct the jury adequately about the factual determinations that would point one way or the other; an instruction perhaps more complex than in other jury cases but different only in slight degree.

The verdict reached by the jury on such a charge escapes appellate review save for analysis of the correctness of the jury charge. Graham , I respectfully submit, commands not only how and by whom issues are to be decided at trial but how they are to be reviewed on appeal. The basic issue before us is how we, as an appellate court, review a general jury verdict that concludes merely (and categorically) that the subject matter of the patent was not obvious. My brethren, following Mar-Bel, conclude that there are implicit factual findings in the general verdict that are subject to review based only on the substantial evidence test.

I think meaningful devotion to Graham requires a different course, unique to patent litigation. In this area where decisional responsibility is so clearly divided, the methods of reaching a decision must be more sharply defined; the path to this end is to require jury verdicts on special interrogatories, as permitted by Fed.R.Civ.P. 49(a). See generally Guidry v. Kem Manufacturing Co., 5 Cir. 1979, 598 F.2d 402 . If we do not do so, the result will be that validity will

effectively become a question for the jury, not one of law for the judge. If every special verdict on validity leads to implicit findings on non-obviousness, then the trial court cannot review either the verdict or the underlying findings unless the standard for judgment notwithstanding the verdict is used.

Ropski, Constitutional and Procedural Aspects of the Use of Juries in Patent Litigation, 58 J.Pat.Off.Soc’y 609, 685 (1976). Moreover that course has pragmatic difficulties: a relatively minor error in the charge may require a lengthy new trial. Submission on special interrogatories can avert that. See Brown, Federal Special Verdicts: The Doubt Eliminator, 1968, 44 F.R.D. 338 .

Even if I thought Mar-Bel terra firma, I do not think the judge followed its guidance here. The jury was explicitly instructed, “You are to determine the question of obviousness. . .” This imperative was qualified merely by identifying the underlying factual inquiries of the Graham test as “factors to consider” when the jury was resolving the question. The jury, not the judge, determined obviousness; and not even the less than fully satisfactory Panther Pumps procedure was followed. That case would at least have required an instruction of the on-the-one-hand and on-the-other-hand variety.

Appellants, however, do not challenge the instructions to the jury. Their attack is levelled against the conclusion that the patented invention was nonobvious. Because, in addressing the motion for a judgment notwithstanding the verdict, the district judge necessarily considered and rejected appellants’ contention that the invention was obvious as a matter of law, and because, as my brethren ably demonstrate, there is adequate evidence in the record to support the conclusion of nonobviousness under the Graham standard, I concur in the affirmance of the judgment that the patent was valid and infringed. Moreover, in ruling on the motion the district judge indicated that his conclusion on the obviousness of the invention would not differ from the jury verdict. In view of the district judge’s correct statement of the Graham standard in his instructions to the jury, and the substantial evidence of facts establishing non-obviousness under that standard, I cannot conclude that the district judge’s holding was erroneous as to either facts or law. See Fed.R.Civ.P. 52(a); United States v. United States Gypsum Co., 1948, 333 U.S. 364, 395 , 68 S.Ct. 525, 542 , 92 L.Ed. 746, 765 ; *776 W.R.B. Corp. v. Geer, 5 Cir. 1963, 313 F.2d 750 , 753, cert. denied, 1964, 379 U.S. 841 , 85 S.Ct. 78 , 13 L.Ed.2d 47 .

II.

Turning to the trademark issue, I cannot conclude that the evidence shows any possibility of confusion by the customers for these devices. See Roto-Rooter Corp. v. O’Neal, 5 Cir. 1975, 513 F.2d 44 . That statement may simply reflect my personal perversity, for the jury apparently found such a possibility, and the able trial judge and two of my colleagues consider the evidence sufficient to warrant its verdict. The jury found that the trademark was intentionally copied, and I not only consider this supported by substantial evidence; I agree. The product was, however, as the majority show, sold only to sophisticated purchasers. 1 The valve controls are expensive advance-order items, generally specially engineered for a particular application. The marks themselves — DRAG and DRAGON-TOOTH — are similar only in the use of the syllable “drag”. I do not find substantial evidence that the industrial purchasing agents who were the real customers would have been misled even had the imitator chosen the mark Drag II in a deliberate effort to imitate. In this market, there was neither real confusion nor likelihood of confusion.

The evidence overwhelmingly suggests the opposite: past purchasers of these valves were aware and future purchasers likely would be equally aware of the existence of two valves, two manufacturers and two trademarks, distinguishing between them with accuracy. No doubt Valtek’s use of the trademark DRAGONTOOTH aided in it alerting the marketplace to the existence of competition to the DRAG valve, as did its sales through the sales representative previously used by Control Components. But such ploys to advise purchasers of the nature and availability of one’s product are not the palming off of one’s goods as those of a competitor required for trademark infringement. See B. H. Bunn Co. v. AAA Replacement Parts Co., 5 Cir. 1971, 451 F.2d 1254,1261 . The evidence does not suffice to demonstrate that the purchasers of these valves would be led by Valtek’s trademark DRAGONTOOTH to purchase the Valtek valve in the erroneous belief that it is actually produced by Control Components. Valtek trades not on the good will attached to its competitor’s trademark, but on the market’s desire for the particular type of product previously produced only by Control Components. The latter appropriation of the market is the essence of free competition. If it has any limits, they are provided by the patent law. In my opinion the facts in the record and all reasonable inferences from those facts can support only one conclusion: there was no evidence of confusion among the purchasers of these valves as to the source of the Valtek valve. See Boeing Co. v. Shipman, 5 Cir. 1969, 411 F.2d 365 . I therefore respectfully dissent from that portion of the court’s opinion upholding judgment of the trademark infringement.

. Trademark infringement must rest upon a finding that the allegedly infringing mark is likely to confuse the product’s “typical buyer”. Armstrong Cork Co. v. World Carpets, Inc., 5 Cir. 1979, 597 F.2d 496 , 500 n. 5; Kentucky Fried Chicken Corp. v. Diversified Packaging Corp., 5 Cir. 1977, 549 F.2d 368 , 389 n. 26. The evidence of the sophistication of the normal purchaser and the care involved in the decisions leading to the purchase of the product is the touchstone for determining the likelihood of confusion. 3 R. Callmann, The Law of Unfair Competition, Trademarks and Monopolies § 81.2 (3d ed. 1969).