Opposition — MacDermid, Inc. v. Southern California Chemical Co.

——

Supreme Cou, U. & {

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IN THE JUN 28 ISTT

Supreme Court of the United tabs, eooax. se, cum

October Term, 1976

No... ¥G- 169%

MaACDERMID INCORPORATED,

Petitioner,

vs.

SOUTHERN CALIFORNIA CHEMICAL CO., INC.,

Respondent.

RESPONDENT'S BRIEF IN OPPOSITION TO

PETITION FOR WRIT OF CERTIORARI.

R. WILLIAM JOHNSTON,

201 South Lake Avenue,

Pasadena, Calif. 91101,

(213) 795-5843,

Attorney for Respondent.

E. Roperick CLINE,

CuristTie, PARKER & HALE,

201 South Lake Avenue.

Pasadena, Calif. 91101,

Of Counsel.

Parker & Son, Inc., Law Printers, Los Angeles. Phone 724-6622

SUBJECT INDEX

Page

GG GG ee l

CP Fe ]

co 2

Reasons for Denying the Petition .......................... 4

The Result in This Case Would Be the Same on

Independent Grounds Separate From the Al-

leged Conflicts Asserted by Petitioner .............. 4

Conclusion

TABLE OF AUTHORITIES CITED

Cases Page

Cataphote Corp. v. DeSoto Chemical Coatings, Inc.,

356 F.2d 24 (9 Cir. 1966), cert. den. 385 U.S.

832 (1966) ......... siacinaiareniaestneiatieaimmesasiithieilialitiiins ti

City of Elizabeth v. American Nicholson Paving

££ 9 UU ee 6,

Egbert v. Lippmann, 104 U.S. 333 (1881) ........ 7,

Robbins Co. v. Lawrence Mfg. Co., 482 F.2d 426

EE ee ee 2,4

Sauquoit Fibers Co., Inc. v. Leesona Corp., 419

> Ne SOND ctinitennismnenteiendionns apunnieetnten

Yarn Processing Patent Validity Litigation, In re,

498 F.2d 271 (S Cir. 1974) 000. 2, 4,

Statutes

53 Statutes at Large, Chap. 450, Sec. 1, p. 1212 _..

United States Code, Title 35, Sec. 102(b) _... l,

>

v

“ON

ow iv

Supreme Court of the United States

October Term, 1976

MACDERMID INCORPORATED,

Petitioner,

vs.

SOUTHERN CALIFORNIA CHEMICAL Co., INC.,

Respondent.

RESPONDENT'S BRIEF IN OPPOSITION TO

PETITION FOR WRIT OF CERTIORARI.

Statement of the Case.

The Nature of the Case.

Petitioner seeks a review of the unanimous decision

by the Court of Appeals affirming the judgment of

the District Court, which, after a full and complete

trial, invalidated the Laue patent under 35 U.S.C.

§ 102(b) because the alleged invention was on sale

and in public use in this country more than one year

before the filing date of the application for the patent.

On petition for rehearing en banc, the full court for

the Ninth Circuit was advised of the en banc suggestion,

and no judge of the court requested a vote on it (la)*.

*Page la of appendix to petitioner's brief.

atin

The express purpose of 35 U.S.C. § 102(b) is

to prevent extension of the patent monopoly beyond

that permitted by the patent laws by requiring the

patentee to file a timely application so the patent

period might commence to run without undue delay.

Cataphote Corp. v. DeSoto Chemical Coatings, Inc.,

356 F.2d 24, 25 (9 Cir. 1966). Congress manifested

public concern about such undue delay by decreasing

the grace period for filing a patent application from

two years to one year (August 5, 1939, c. 450, §

1, 53 Stat. 1212).

Factual Background.

More than one year before the filing date of the

Laue patent application, petitioner sold or offered to

sell the patented solution to National Cash Register,

Steel Products Engineering Co. (SPECO), IBM,

Academy Plating Co., Eaton Mfg. Co., R&S Plating,

and Metropolitan Specialties (Findings of Fact 9-26;

18a-22a)*. In none of those transactions did the trial

court find that the use, sale or offering was made

primarily for experimental purpose. Accordingly, the

trial court properly held the Laue patent invalid under

35 US.C. § 102(b), following the rules set forth

in Cataphote Corp. v. DeSoto Chemical Coatings, Inc.,

356 F.2d 24 (9 Cir. 1966), cert. den. 385 US.

832 (1966); Robbins Co. v. Lawrence Mfg. Co., 482

F.2d 426 (9 Cir. 1973); and In re Yarn Processing

Patent Validity Litigation, 498 F.2d 271 (5 Cir. 1974),

*References herein to Findings of Fact by the District Court

are to the particular finding and the pertinent page of the

appendix accompanying petitioner's brief. References to the

Court of Appeals are to the appendix page only.

cullen

cert. den. sub nom. Sauquoit Fibers Co., Inc. v. Leesona

Corp., 419 U.S. 1057 (1974).

Petitioner offered no persuasive evidence at trial

that any of the transactions referred to above were

made for experimental use. To the contrary, the evi-

dence was overwhelming that petitioner sold and offered

to sell the patented solution without restriction. Petition-

er’s offers and deliveries of the patented solution to

petitioner's various customers before the critical date

of the Laue patent application placed the solution

beyond petitioner's control. Those transactions were

primarily, if not solely, for the purpose of persuading

customers to buy the product, and not for any experi-

mental purpose in developing or improving the product

(Finding of Fact 8 (17a)).

In short, petitioner did not offer any persuasive

evidence at trial that the petitioner's transactions with

its customers fell within the experimental exception

to 35 U.S.C. § 102(b).

—_

REASONS FOR DENYING THE PETITION.

The Result in This Case Would Be the Same on Inde-

pendent Grounds Separate From the Alleged Con-

flicts Asserted by Petitioner.

The alleged conflict which the petitioner asserts exists

between the Ninth and Fifth Circuits because of the

Robbins (482 F.2d 426) and the In re Yarn (498

F.2d 271) decisions is immaterial to the present case.

In Robbins, the Ninth Circuit directed the trial court

to enter summary judgment that the patent in suit

was invalid under 35 U.S.C. § 102(b) because of

a prior unconditional sale. The appellate court ruled

that the experimental use exception to 35 U.S.C. §

102(b) did not apply unless the sale or offering for

sale included at least a clearly implied condition of

experimentation (482 F.2d 434). The patentee did

not raise a genuine issue of material fact to show that

the sale:

1. Was conditional, i.e., reserved to the patentee

the right to experiment, substitute, or supervise with

respect to the patented product;

2. Required secrecy or reporting: or

3. Was of an incomplete device.

Under these circumstances the Ninth Circuit decided

there was no way in which the patentee could meet

the burden of showing that the sale was primarily for

experimental purposes.

In the In re Yar~ case, the Fifth Circuit reversed

the trial court summary judgment of patent invalidity

under 35 U.S.C. § 102(b) because the appellate court

found there were genuine issues of material fact which

precluded summary judgment, and because the trial

court may have confused “reduction to practice” with

oufinn

the end of possible experimental use (498 F.2d 280).

There, the inventors operated the patented machine

in secret, and representatives of the licensee signed

agreements to keep the machine secret (498 F.2d 274;

360 F.Supp. 100). Even under the Robbins rule, which

stated that if the contract or offer of sale “required

that the invention should be kept confidential or from

public view” (482 F.2d 433) “the sale or offering

would not ipso facto invalidate the patent nor preclude

further inquiry into the experimental nature of the

use . . .” (482 F.2d 433), the Jn re Yarn decision

would be the same. Moreover, the Fifth Circuit’s state-

ment that it declined to adopt the rule stated in Robbins

was not necessary to the decision, and therefore is

merely dicta. Thus, the alleged conflict between Rob-

bins and In re Yarn is more a matter of semantics than

substance.

In any event, the unanimous decision by the Court

of Appeals affirming the judgment of the District Court

in the present case would stand even if the Robbins

case had not been a precedent in the Ninth Circuit.

The petitioner had every opportunity at trial to intro-

duce evidence of a bona fide experimental intent in

connection with the transactions on which the District

Court and Court of Appeals decided that the patent

in suit was barred by 35 U.S.C. § 102(b). The petition

does not contend otherwise. The petition (p. 5) does

refer vaguely to “a considerable body of evidence”

offered to demonstrate experimentation, but the petition

does not refer to any example of such evidence.

Even after a complete trial, the best evidence on

which petitioner could rely in support of its argument

that the transactions were for an experimental purpose

was the use of the letter “X” on the product. This

ati»

contention failed both at trial and on appeal. As noted

by the Court of Appeals, one of plaintiff's customers

testified that he did not know what the “X” stood for,

and did not consider it as designating an experimental

product (9a).

Petitioner's reliance on City of Elizabeth v. American

Nicholson Paving Cc., 97 U.S. 126 (1887) is mis-

placed. Nicholson's six-year test (at his own expense)

of the wooden pavement on a street subject to heavy

public travel was the only way he could demonstrate

that his pavement had durability, a quality essential to

the invention (but not to the present petitioner's

patented Laue solution). It was also Nicholson’s first

and only experiment. During the test, Nicholson did not:

1. Extol the virtues of the product 10 prospective

customers ;*

2. Offer it for sale;*

3. Supply it to salesmen to offer to prospective

customers at a stated price;*

4. Allow others to use it;* or

5. Let it go beyond his control, or do anything

‘that indicated any intent to do so* (97 U.S. 126, 136).

Petitioner, on the other hand, demonstrated to its

own satisfaction that the patented Laue solution would

do the intended job, and then set out to get what

business it could by shipping, invoicing and pricing

the solution to its customers and prospective customers

° with Findings of Fact 14 and 15 (19a); 22 (21a);

and 26 (22a).

axffus

without any restriction on how it could be used (Find-

ings of Fact 9-15 (18a, 19a) ).

Petitioner's offers and deliveries of the patented so-

lution to various customers before the critical date

of the Laue patent application placed the solution

beyond petitioner's control, and were primarily, if not

solely, for the purpose of persuading customers to

buy the product (Finding of Fact 22 (21a) ).

Petitioner's unconditional transfer of the solutions to

its customers could not qualify as an experimental ex-

ception to § 102(b) even under City of Elizabeth, on

which petitioner relies, where the Court said:

“The use of an invention by the inventor himself,

or of any other person under his direction, by way

of experiment, and in order to bring the invention

to perfection, has never been regarded as such a

use” (97 U.S. 126, 134) (emphasis added).

The solutions the petitioner delivered unconditionally

to its customers were not used:

1. Under petitioner's direction;

2. By way of experiment; and

3. To perfect the invention (Finding of Fact

22 (2la)).

The trial and appellate courts in the present case

properly followed the logic in Egbert v. Lippmann,

104 U.S. 333 (1881). There, the Court stated at

page 336:

“If an inventor, having made his device, gives

or sells it to another to be used by the donee

or vendee, without limitation or restriction, or

The courts below found the same thing with respect

to the patented X-381 Laue solution petitioner offered,

gave and sold to its customers (Finding of Fact 22

(2la)).

Conclusion.

MacDermid’s petition merely seeks a review of a

factual matter, namely, whether MacDermid’s sales ac-

tivities were of sufficient experimental nature to quali-

fy as an exception to 35 U.S.C. § 102(b). Since

review of a factual matter would be important only

to the litigants, the petition should be denied.

Pasadena, California,

June 27, 1977.

Respectfully submitted,

R. WILLIAM JOHNSTON,

Attorney for Respondent.

E. RopeRIcK CLINE,

CurRIsTIE, PARKER & HALE,

Of Counsel.