# Petition — Taylor Industries, Inc. v. Panduit Corp. > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385004_2228%3A1 ## Record - **Collection:** Supreme Court brief - **Document type:** Petition - **Published:** January 1, 1977 - **Citation:** 434 U.S. 857 ## Text i Fi oe Q JUL 18 WV ~ IN THE " welll: Supreme Court of the United Siates OCTOBER TERM, 1977 + gy-92 TAYLOR INDUSTRIES, INC., Petitioner, v. PANDUIT CORPORATION, Respondent. | —_* oa PETITION FOR A WRIT OF CERTIORARI To the United States Court of Appeals for the Sixth Circuit Lp. vv JOHN A. ARTZ Attorney for Petitioner 1500 North Woodward Avenue Birmingham, Michigan 48011 Of Counsel JOHN A. BLAIR LYMAN R. LYON HARNESS, DICKEY & PIERCE 1500 North Woodward Avenue Birmingham, Michigan 48011 "ieterstate Beiel 6 Record Co.. 1615 Michigan 48216 962-8745 5 rl A ; TABLE OF CONTENTS Page I. SS eh gi de De Ue a ale we ss l Sh. Se. Rae he CbeGReNadibcsueesedcdccececes 2 III. Questions Presented for Review ................. 2 IV. Constitutional Provisions and Federal Statutes DEE SG Sebd eh ecebee luce ccnsees doves cic 3 A. Constitutional Provisions .................. 3 eT ae a a 3 Vv EEE os oven tuscece sete neuctevic 5 VI. Reasons for Granting the Petition ................ 8 en BR a ee eee 5 B. Course of Proceedings and Disposition Below 5 C. Statement of Pertinent Facts ............... 6 VI. Reasons for Granting the Petition ................ ® Ne ee teens 8 B. Second and Third Questions ............... 8 Vil. Argument as to the First Question ............... 9 VIII. Argument as to the Second and Third Questions .. 12 EE ea Te Oe Pe ee 16 Court of Appeals’ Order — April 19, 1977 ........ 17 District Court’s Preliminary Injunction — August £8, WR sv ccccscccvescstncsdduneeacensnenneanal 18 Judge Fox’s Ruling From Bench — August 4, 1976 21 Motion for Preliminary Injunction — March 31, POTD ccncccccenciteceudncedivetsceasenn 26 Compiniat — Boag 85, S5GD on cvcckesictaspuvanes 27 Affidavit of Phillip W. Taylor — September 1, DOUG. . veer yevecsciccseicesesuceiensineneen 30 Summary of Pertinent Portions of Transcript of Amaat 4, FS TERMED os cccccctvtvecsquuhesesas 33 Comparison of Claim 5 of Patent in Suit with Prior Art Western Electric Fanning Strip .............. 35 Panduit Brochure Showing its Patented Fanning GUD on cvccscedéctcastbucunecesns anpenennel 36 “** TABLE OF AUTHORITIES Cases: Page Gamewell Fire Alarm Telegraph Co. v. Star Electric is Es MEME ccccccccccccceeus 15 Garlock, Inc. v. United Seal, Inc., 404 F. 2d 256 (6th NE LEIS LO SE 13 George Cutter Co. v. Metropolitan Electric Mfg. Co.., MD Cols cot cecdcececceceeees 9.10 Granny Goose Foods, Inc. v. Teamsters, 415 U.S. 423, 39 L.Ed.2d 435, 94 S.Ct. 1113 (1974) .............. 13 Hieger v. Ford Motor Co., 516 F.2d 1324 (6th Cir. ES ASS TE 10,15 Mercoid Corp. v. Mid-Continent Investment Co., 320 U.S. 661, 88 L.Ed. 376 (1944) .................... 10 National Electric Products Corp. v. Grossman, 70 F.2d Den cc ce eanbechccsecseccs 9 Nuclear-Chicago Corp. v. Nuclear Data, Inc., 173 U.S.P.Q. 326 (N.D. Iil. 1971), rev'd, 465 F.2d 428 a in cc cccdhbcbeesacpeevcéetees 14 Panduit Corp. v. Stahlin Bros. Fibre Works, Inc., 298 F.Supp. 435 (W.D. Mich. 1969), aff'd., 430 F.2d 221 EE a 7,8,11 iV Page Philips Electronic & Pharmaceutical Industries Corp., v. Thermal & Electronics Industries, Inc., 450 F.2d CORSE Ga STD. on ns tudkcasKulhest eet diweiteesse 10 Uniroyal, Inc. v. Daly-Herring Co., 294 F.Supp. 754 GRAS e. TE cacsacvibeecdel sedusvcddndisstss 15 United Nickel Co. v. New Home Sewing Machine Co.., So F, PPOs GEE GN OMe secsucecdpec case 14 Constitution of the United States: Article I, Section 8, Clauses 3 and 8 ................. 3 Statutes: Patent Act of 1952 Fe SE nec ekenckswedeussenensensdanetnenenns 3 RT PPT eee re ee 3,4 SD ls GE Cadeccuccdcdevctcess cqawesttecheigne 4 PO aha nee cb dv kc. ve kécctececheedsemabees 4 Jurisdictional Statutes SD Ses ME, Raosescavacecedancodbencntaeneebees 5 Se Se GENE Sc abbdebvacnadcbdnbed pss eeneekousel 2,4 ep CD % ncedadscdencdtQesncdeasceaeedees 5 Treatises: 11 Wright & Miller, Federal Practice and Procedure: See ae, GPS in hicedosceeccigvaddesdetes 13 IN THE Supreme Court of the United States OCTOBER TERM, 1977 No. *e 28© @ a. ._s TAYLOR INDUSTRIES, INC., Petitioner, v. PANDUIT CORPORATION, Respondent. = = a PETITION FOR A WRIT OF CERTIORARI To the United States Court of Appeals for the Sixth Circuit . A Now comes petitioner Taylor Industries, Inc. (hereinafter Taylor) and prays that this Court review a judgment of The United States Court of Appeals for the Sixth Circuit, affirming a judgment of the United States District Court for the Eastern District of Michigan. I. OPINIONS BELOW The opinions of the courts below have not yet been reported but are appended hereto. Il. JURISDICTION The judgment of the Court of Appeals of the Sixth Circuit sought to be reviewed was filed April 19, 1977. No order respecting a rehearing or an extension of tirfle within which to petition for certiorari has been filed. Jurisdiction to review said judgment by writ of certiorari is conferred by 28 USC 1254 (1). Ill. QUESTIONS PRESENTED FOR REVIEW A. First Question Whether a preliminary injunction can be granted in a patent infringement action without a consideration of prior art cited by the accused party which invalidates the patent in suit. B. Second Question Whether a preliminary injunction can be granted in a patent infringement action without any evidence on or a consideration of irreparable harm or any of the other necessary equitable considerations. C. Third Question Whether a preliminary injunction can be granted seven years after an action was commenced without there being any change in the situation between the parties during that period of time. IV. CONSTITUTIONAL PROVISIONS AND FEDERAL STATUTES INVOLVED A. Constitutional Provisions Article 1, Section 8. ‘‘The Congress shall have Power * * * (Clause 3) ‘‘To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes; * * * (Clause 8) ‘‘To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries; * * *”’ B. Statutes (1) Pertinent Portions of the Patent Act of 1952. 35 USC 101: ‘“‘Whoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefor, subject to the conditions and requirements of this title”’ 35 USC 102(b): ‘*A person shall be entitled to a patent unless— * * ke KK K * 4 ‘(b) the invention was patented or described in a printed publication in this or a foreign country or in public use or on sale in this country, more than one year prior to the date of the application for patent in the United States, or...” 35 USC 103: ‘‘A patent may not be obtained though the invention is not identically disclosed or described as set forth in section 102 of this title, if the differences between the subject matter sought to be patented and the prior art are such that the subject matter as a whole would have been obvious at the time the invention was made to a person having ordinary skill in the art to which said subject matter pertains. Patentability shall not be negatived by the manner in which the invention was made.”’ 35 USC 283: ‘*‘The several courts having jurisdiction of cases under this title may grant injunctions in accordance with the principles of equity to prevent the violation of any right secured by patent, on such terms as the court deems reasonable.”’ (2) Jurisdictional Statutes: 28 USC 12541): ‘*Cases in the courts of appeals may be reviewed by the Supreme Court by the following methods: ‘(1) By writ of certiorari granted upon the petition of any party to any civil or criminal case, before or after rendition of judgment or decree;* * *” 28 USC 1338): ‘‘Patents, copyrights, trade-marks, and unfair competition. (a) The district courts shall have original jurisdiction of any civil action arising under any Act of Congress relating to patents, copyrights and trade-marks. Such jurisdiction shall be exclusive of the courts of the states in patent and copyright cases. * * *”’ 1S USC 1121: ‘The district and territorial courts of the United States shall have original jurisdiction and the courts of appeal of the United States shall have appellate jurisdiction, of all actions arising under this chapter, without regard to the amount in controversy or to diversity or lack of diversity of the citizienship of the parties.”’ | V. STATEMENT OF THE CASE A. Nature of the Case This is an action for patent infringement under the Patent Act, Title 35, United States Code. One claim of one United States patent is involved, claim 5 of Walch Patent 3,024,301 for ‘*Wiring Grille’. The patent is owned by Panduit Corporation (hereinafter Panduit) and | Taylor makes four types of accused wiring ducts. B. Course of Proceedings and Disposition Below The present action was commenced on May 15, 1969 (Appendix 5). On March 31, 1976, almost seven years 6 after the suit was filed, Panduit brought a motion for a preliminary injunction to enjoin Taylor’s manufacture and sale of the accused products (Appendix 4). On August 4, 1976, that motion was granted by District Judge Noel P. Fox, and a preliminary injunction was issued on August 11, 1976 (Appendix 2,3). An appeal of the preliminary injunction was made to the Court of Appeals for the Sixth Circuit. In a summary opinion and order dated April 19, 1977, the Court of Appeals affirmed the granting of the preliminary injunction (Appendix 1). C. Statement of Pertinent Facts Panduit is a Delaware corporation having its principal office and place of business in Tinley Park, Illinois. Taylor is a Michigan corporation having its principal place of business in Marble Falls, Texas. This action was commenced in May, 1969, when Panduit filed a Complaint against Taylor for patent infringement (Appendix 5). The Walch patent in suit, U.S. No. 3,024,301, issued on March 6, 1962 from an application filed on October 5, 1955. In 1972, Panduit filed an Amended Complaint which limited its allegation of infringement to a single claim (claim 5) of the Walch patent. All of Taylor’s responsive pleadings in the case denied Panduit’s allegations and further positively averred that the patent in suit was invalid and not infringed. Both Panduit and Taylor make wiring ducts for use by the electronics industry and in machine tools and are direct competitors in the marketplace. Taylor makes four 7 types of ducts which are alleged to infringe the patent in suit. Taylor started manufacturing and marketing two of these types of wiring ducts in the mid-1950’s and began manufacturing and selling the other two types in early 1969. The Walch patent in suit was enforced earlier against a party completely unrelated to Taylor: Panduit Corp v. Stahlin Bros. Fibre Works, Inc., 298 F. Supp. 435 (W.D. Mich. 1969), affd., 430 F.2d 221 (6th Cir. 1970) hereinafter the ‘‘Stahlin Bros.’’ case). Taylor and Panduit actively. engaged in discovery efforts throughout the period from 1969 to 1976. Through its efforts, Taylor turned up a number of prior art references which were more pertinent than the references relied upon in the earlier Stahlin Bros. case and which invalidate the Walch patent. On March 22, 1976, almost seven years after the suit was filed, Panduit brought a motion for a preliminary injunction (Appendix 4). On August 4, 1976, an oral hearing was held on that motion after which Judge Fox — orally from the Bench — granted the relief requested (Appendix 3). At the hearing, the only evidence presented by Panduit related to the issue of infringement. No evidence was presented relative to the validity issue, nor to any of the factors which must be reviewed in ruling on a motion for preliminary injunction, such as irreparable harm and maintenance of the status quo. As to the patent issues, the District Court treated the validity issue as stare decises in view of the earlier Stahlin Bros. case and 8 refused to let Taylor introduce any evidence thereon, including the prior art that Taylor had discovered and that was not presented or considered in the Stahlin Bros. case (Appendix 7). In one instance, Judge Fox held that the decision in the Stahlin Bros. case was ‘‘res judicata’’ against Taylor. As a result of its decision, the District Court, on August 11, 1976, issued a Preliminary Injunction Order which enjoined Taylor from further manufacture and sale of all of the accused wiring ducts, as well as any ‘‘colorable imitation or equivalent thereof’’ (Appendix 2). A timely appeal was made to the Sixth Circuit Court of Appeals and that Court, on April 19, 1977, affirmed the decision of the Lower Court (Appendix 1). VI. REASONS FOR GRANTING THE PETITION A. First Question 1. The decisions below conflict with the federal policy enunciated by decisions of this Court against enforcement of invalid patent monopolies. 2. Notwithstanding a previous holding of validity of a patent, a preliminary injunction should not be granted against a new party without a consideration of all new invalidity defenses. 3. The question is one of importance and is fraught with public interest. B. Second and Third Questions 1. The decisions of the courts below are erroneous and conflict with Section 283 of the Patent Act which requires that injunctions be granted in patent cases only ‘“*in accordance with the principles of equity.”’ VII. ARGUMENT AS TO THE FIRST QUESTION Whether a preliminary injunction can be granted in a patent infringement action without a consideration of prior art cited by the accused party which invalidates the patent in suit. The courts below concluded that because the patent in suit had been held valid in a prior suit against another party, it was unnecessary to consider any new evidence of invalidity offered by Taylor before issuing a preliminary injunction. This was clearly erroneous. It is well established that in considering motions for preliminary injunctions, prior validity adjudications carry little if any weight in the face of more pertinent prior art that was not considered in the prior litigation. National Electric Products Corp. v. Grossman, 70 F.2d 257, 258 (2d Cir. 1934), George Cutter Co. v. Metropolitan Electric Mfg. Co., 275 F.158, 164 (2d Cir. 1921). As stated in Metropolitan Electric: ‘*But where a preliminary injunction is sought, the burden is upon the plaintiff to establish a prima facie case free from reasonable doubt. The presumption flowing from the grant of the patent alone does not entitle the inventor to his preliminary injunction. The appellee recognizes this rule, but relies upon 224 Fed. 717, 140 C.C.A. 257, as its support. However, the decision in this case did not prevent the appellant setting up such new matters as it has done here. A prior adjudication is not a finality. It is limited to the relativity to the decision and facts in the prior case. A prior decision does not prevail in a subsequent case where the facts are different 10 from those in the prior case or in addition to those of the prior case in respect of matters that establish a new state of facts. Cons. Valve Co. v. Safety Valve Co. 113, U.S. 157, 5 Sup. Ct. 513, 28 L.Ed. 939; Paul Steam System Co. v. Paul (C.C.) 129 Fed. 757; Hall Signal Co. v. Genl. Ry. Signal Co., 153 Fed. 907, 82 C.C.A. 653. (Emphasis Added.) See also, Philips Electronic & Pharmaceutical Industries Corp. v. Thermal & Electronics Industries, Inc., 450 F.2d 1164 (3rd Cir. 1971), in which the Third Circuit Court of Appeals said, at page 1176: ‘‘(W]here relevant prior art was not before the court [upholding the validity of the patent], its decision has little precedential value. Judge Shaw was not bound to follow the Massachusetts court, not only because the parties were not the same, but also in the light of new and _ persuasive evidence regarding the prior art.”’ Thus, where new prior art is cited, it is erroneous to issue a preliminary injunction without a finding that the new prior art is no more pertinent than that previously considered. To issue a preliminary injunction without considering newly cited prior art also violates the well established principle that the public interest in striking down invalid patents overrides the private interests of litigants. Mercoid Corp. v. Mid-Continent Investment Co., 320 U.S. 661, 665, 670, 88 L.Ed. 376 (1944), Hieger v. Ford Motor Co., 516 F.2d 1324, 1327 (6th Cir. 1975). Several of Taylor’s newly cited prior art references standing alone invalidate the patent in suit. If this prior art had been considered in either the Patent Office or the Stahlin Bros. case, the Walch patent would never have been issued or upheld. For example, the “prior art Western Electric fanning strip looks and functions exactly the same as the wiring wall called for by Walch claims. It was not considered either by the Patent Office or in the Stahlin Bros. case. An analysis of Walch’s claim 5 showing its complete anticipation by the Western Electric plastic fanning strip is attached hereto (Appendix 8). Moreover, Panduit has tacitly admitted that the Western Electric fanning strips are covered by the Walch patent as evidenced by Panduit’s marking of its own same fanning strips with the number of the Walch patent, and by Panduit’s own published brochure illustrating and describing its fanning strip as ‘‘patented’’ (Appendix 9). The fanning strip by Western Electric alone is sufficient for a finding that the only claim in suit of the Walch patent is invalid. Thus, if the Courts below had not treated the earlier Stahlin Bros. case as controlling, but instead had reviewed the prior art that Taylor repeatedly attempted to put before them, there would have been no basis for issuing the preliminary injunction. Taylor Has Been Denied Due Process As a result of a summary proceeding in which the Stahlin Bros. case against an unrelated company was erroneously treated as controlling and in which proper legal standards were neither taken into account nor applied, Taylor has been forced to terminaie sales of approximately sixty percent (60%) of its product line. Delay incident to design and retooling of a new product line inherently entails loss of customers as well as loss of substantial goodwill and reputation in the marketplace. 12 Although there has not been a full and fair hearing nor a trial on the merits of this case, Taylor has been put into the position of a losing party with all of the harmful and prejudicial implications and effects which go along with that position. Panduit has now forced its only competitor out of the market and has secured an improper and unwarranted monopoly allowing it to rise its prices substantially — which it has done to the detriment of the public. Also, the preliminary injunction now in force enjoins Taylor from making the accused products specifically in suit, as well as ‘“‘any colorable imitation or equivalent thereof." This puts Taylor in a very tenuous and prejudicial position; any equivalent or generally similar wiring it makes in the future will be subject to a charge of contempt — whether it actually infringes the patent in suit or not. Further, notwithstanding prior art patents which anticipate the patent in suit, Taylor is also put in the absurd position of being subject to contempt proceedings if it makes a product in accordance with any of these nrior art patents and that product is an equivalent of its ‘ormer product. VIII. ARGUMENT AS TO THE SECOND AND THIRD QUESTIONS Whether a preliminary injunction can be granted in a patent infringement action without any evidence on or a consideration of irreparable harm or any of the other necessary equitable considerations. Whether a preliminary injunction can be granted seven years after an action was commenced without there being any change in the situation between the parties during that period of time. a 13 Preliminary injunctions are extraordinary and drastic remedies which are to be granted only where the need is Clearly shown. Because of the seriousness of such relief, certain standards and tests have been developed which are universally taken into account before such drastic relief is granted. Section 283 of the Patent Act incorporates these standards as it requires that injunctions in patent cases be granted only ‘‘in accordance with principles of equity.’’ The courts below failed to follow the proper and requisite standards and erroneously issued the preliminary injunction against Taylor. The equitable considerations which must be reviewed in ruling on a motion for preliminary injunction are set forth in numerous sources. Garlock, Inc. v. United Seal, Inc., 404 F.2d 256, 257 (6th Cir. 1968), Granny Goose Foods, Inc. v. Teamsters, 415 U.S. 423, 441, 39 L.Ed.2d 435, 94 S. Ct. 1113 (1974), and //] Wright & Miller, Federal Practice and Procedure: Civil 2948, pp. 430-431. These considerations are: (1) Possible irreparable harm to the plaintiff if the injunction is not granted; (2) Injury to the defendant if the injunction is granted; (3) Balance of the equities and rights of the parties; (4) Ability of the defendant to compensate the plaintiff in money damages; (5) Probability of success at trial on the merits; (6) Maintenance of the status quo; and (7) The public interest. 14 If these considerations had been reviewed, they overwhelmingly would have led to the denial of Panduit’s motion. For example, there was no evidence submitted or a finding made by the courts below that a preliminary injunction was necessary to prevent irreparable injury to Panduit. In fact, Panduit did not even bring its motion until seven years after filing this suit and this conclusively shows that it could not have been suffering irreparable injury. United Nickel Co. v. New Home Sewing Machine Co., 17 F. 528 (S.D.N.Y. 1883). Moreover, Taylor's ability to compensate Panduit in money damages precludes a finding of irreparable injury. Preliminary injunctions cannot be granted if the movant can secure adequate rectification of his grievance by an award of damages. Nuclear-Chicago Corp. v. Nuclear Data, Inc., 173 U.S.P.Q. 326 (N.D. Ill. 1971), rev'd, 465 F.2d 428 (7th Cir. 1972). Preliminary injunctions also are not to be granted where they would upset the status quo. In direct conflict to these principles, the decisions of the courts in this case completely upset the status quo by eliminating Taylor from over fifteen years of competition in the product lines in question. On the other side of the coin, a preliminary injunction would cause substantial and irreparable damage to Taylor. This is brought out in the affidavit of Phillip W. Taylor, President of Taylor (Appendix 6). Taylor would be forced to partially close its plant and lay off the majority of its employees while expensive new tooling was obtained and installed. It also would have to warehouse its present inventory of accused wiring ducts or scrap and recycle it. Taylor further would lose a substantial part of its business in wiring ducts and also 15 lose the goodwill of many of its customers. Such irreparable harm to Taylor by itself fully justifies the reversal of the preliminary injunction. Uniroyal, Inc. v. Daly-Herring Co., 294 F. Supp. 754, 759 (E.D.N.C. 1968), Gamewell Fire Alarm Telegraph Co. v. Star Electric Co., 199 F. 185, 186-187 (N.D.N.Y. 1912). In this appeal, Panduit has taken the position that the term of the Walch patent is due to expire in a few years and that it has never had the chance to monopolize the marketplace. This is a fanciful argument and does not constitute sufficient ground for granting of the preliminary injunction. Gamewell Fire Alarm Telegraph Co. v. Star Electric Co., 199 F. 185 (N.D.N.Y. 1912). Panduit’s right to exclude all of its competitors and monopolize the marketplace is simply not a basis on which a preliminary injunction can be based — particularly since its patent is invalid in view of Taylor’s newly cited prior art. Moreover, Panduit’s interests are far outweighed by the interests of the public in striking down invalid patents. As stated in Hieger v. Ford Motor Co., 516 F.2d 1324, 1327 (6th Cir. 1975): ‘““[Ajn invalid patent is a blight on ‘the important public interest in permitting full and free competition in the use of ideas which are in reality a part of the public domain’, Lear, Inc. v. Adkins, 395 U.S. 653, 670 (1969).”’ If Panduit’s position were given any credence, it would cause patent owners to delay as long as possible (in order to make the harm more and more “‘irreparable’’) before moving for injunctive relief. This is directly contrary to long settled equitable principles, particularly those relating to the doctrine of laches which penalizes litigants who have waited too long to take action. 16 IX. CONCLUSION It is submitted that few cases have resulted in the forcing of a defendant into a corner — as has been done to Taylor in this case — without the benefit of a full and fair consideration of the legal and equitable rights of the parties. Taylor has been denied due process and Panduit has been given an unwarranted monopoly in the marketplace. Granting of certiorari is necessary to prevent manifest injustice. July 15, 1977 JOHN A. ARTZ 1500 North Woodward Avenue Birmingham, Michigan 48011 (313) 642-7000 Attorney for Petitioner Of Counsel JOHN A. BLAIR LYMAN R. LYON HARNESS, DICKEY & PIERCE 1500 North Woodward Avenue Birmingham, Michigan 48011 (313) 642-7000 APPENDIX 17 APPENDIX 1 ORDER (Panduit Corporation, Plaintiff-Apellee v. Taylor Industries, Inc., Defendant-Appellant) (United States Court of Appeals For the Sixth Circuit) (Filed April 19, 1977) Before: Phillips, Chief Judge; Peck, Circuit Judge, and Green, District Judge.* This appeal, perfected from an order of the district court dated August 11, 1976, issuing a _ preliminary injunction has been submitted on the record on appeal and on the briefs and oral arguments of counsel. Being fully advised in the premises, the Court concludes that the district court did not abuse its discretion in entering said order, and therefore, It Is Ordered that the order of the district court issuing a preliminary injunction be and it hereby is affirmed; and it is further ordered that the order of this Court dated September 10, 1976, staying the preliminary injunction be and it hereby is vacated. Entered By Order Of The Court /s/ John P. Hehman Clerk of Court * Honorable Ben C. Green, Senior Judge, United States District Court for the Northern District of Ohio, sitting by designation. 18 APPENDIX 2 PRELIMINARY INJUNCTION (United States of America In the District Court of the United States For the Eastern District of Michigan) (Filed August 11, 1976) Pursuant to the decision of this court, rendered August 4, 1976, due notice having been given and the court being apprised in the premises hereof: It Is Ordered, Adjudged And Decreed that a preliminary injunction be and the same is hereby granted. As used herein the term “‘infringing product’’ means any product covered by claim 5 or the United States Letters Patent No. 3,024,301, any colorable imitation or equivalent thereof, and in particular but without limiting the foregoing, the products identified in the captioned case as defendant’s Type *‘O’’, ‘‘OA’’ (presently referred to by defendant in its catalog as ‘“‘Open Slot’’), ‘‘W’’, and ‘‘WA”’ (presently referred to by defendant in its catalog as ‘‘Closed Slot’’) wiring ducts. It Is Further Ordered, Adjudged And Decreed that an immediate, preliminary injunction, to take effect immediately, is hereby issued against defendant, its divisions, subsidiaries, related companies, directors, officers, agents, servants, employees, attorneys, successors and assigns, and all those in active concert or participation with them, herein called defendant, as follows: 19 1. Defendant is enjoined from: (a) Making. having made, selling, using, offering for sale or leasing any infringing product, or from soliciting orders in any manner from customers, potential customers, or others for any infringing product. (b) From utilizing, selling, assigning, licensing, lending, leasing, renting or otherwise transferring to another, any tools or dies especially adapted for producing infringing products, located in any of the facilities of the defendant, or located elsewhere and under the control or direction of defendant. (c) From using any past, current or future literature, price sheets or promotional material in possession of defendant which illustrates or refers in any manner to any infringing product or any infringing product manufactured, sold or offered for sale by defendant in the past. (d) From accepting or completing any agreement, contract or order, either existing or future and whether solicited or unsolicited, from any person, firm or corporation which identifies the product or products to be supplied thereunder as an infringing product or which requires, calls for or threatens to require or call for, the making and/or selling of any infringing product. (e) From packaging to fill orders, from filling orders, from shipping in accordance with orders, or in any manner whatsoever completing any orders heretofore or hereafter submitted to the defendant for any infringing product. (f) From referring existing or future orders, contracts, agreements, or work, contracts, leads. 20 customers, potential customers or others requesting supply of or information about an infringing product to another person, firm, or corporation, except plaintiff, for the purpose of having infringing products supplied by others. (g) From assisting, directly or indirectly, any Other party in the infringement of claim 5 of United States Letters Patent No. 3,024,301. III. The defendant shall immediately notify all sales personnel, sales representatives, distributors, and dealers of defendant that such sales personnel, sales representatives, disributors and dealers cannot: (a) Solicit, accept, complete or fill any orders for any of defendant’s infringing products, and (b) Cannot use any of defendant’s literature, price sheets or other promotional material, showing, describing or referring to defendant's infringing products. III. The defendant shall recall all literature, price sheets, or other promotional material, illustrating, describing, or referring to any of defendant’s infringing products, from its personnel, distributors, sales representatives, and dealers and shall recall all infringing products, from the possession or control of customers, sales representatives, distributors or dealers, the title to which infringing products and literature has not passed from defendant. So Ordered. Dated: August 11, 1976. /s/ Noel P. Fox Chief District Judge 21 APPENDIX 3 COURT’S OPINION FROM THE BENCH (In the United States District Court For the Eastern District of Michigan Southern Division) (Filed August 4, 1976) Before the The Honorable Noel P. Fox, U.S. District Judge, Western District of Michigan Preliminary Injunction Proceedings, Federal Court, Detroit, Michigan, Wednesday, August 4, 1976 Appearances: Petherbridge, Lindgren & Gilhooly. Chartered, by Roy E. Petherbridge, Esq., 53 West Jackson Boulevard, Chicago, Illinois 60604, and Charles R. Wentzel, Esq., Patent Counsel, Panduit Corp., 17301 Ridgeland Avenue, Tinley Park, Illinois 60477, on behalf of the Plaintiff; Hauke & Patalidis, by Claude A. Patalidis, Esq., and Allard A. Braddock, Esq., 26400 Southfield Road, Lathrup Village. Michigan 48076, on behalf of the Defendant. The Court: Plaintiff moves for a_ preliminary injunction against further infringement by the Defendant upon Plaintiff's patent. To obtain a preliminary injunction, Plaintiff need show that there was a prior adjudication in favor of the validity of the patent which has a scope sufficient to include the accused constructions. Gordon Johnson Company versus Hunt, 109 Fed. Supp. 571 (Northern District of Ohio 1952). That here has been a full, complete adjudication in favor of the validity of the patent before the Court cannot 22 be denied. Panduit Corporation versus Stahlin Brothers Fibre Works, Inc., 298 Fed. Supp. 435 (Western District of Michigan, 1969); affirmed 430 Fed. 2nd 221 (Sixth Circuit, 1970.) The Defendant Stahlin Brothers was later found in contempt because its modified structure was the equivalent of the original in its relation to the patent in the earlier suit. Panduit versus Stahlin Brothers, 338 Fed. Supp. 1240 (Western District of Michigan, 1972); and affirmed 476 Fed. 2nd 1286 from the Sixth Circuit in 1973. Therefore, Plaintiff need show only that the Defendant’s construction is within the scope of the patent held valid in the above cases. I have already ruled on the question of laches, and I incorporate my ruling earlier today in that regard from the bench opinion. The reasoning of this Court in the earlier contempt proceedings against Stahlin Brothers is helpful. In considering whether the structures in question are within the scope of the patent previously adjudicated valid, the Court must necessarily read the claim in the light of the decision finding the claim valid. In the earlier contempt proceeding, it was found that the Walch patent, which is here in question, U.S. Patent Number 3,024,301, was designed to achieve the following functions or results: A) Easy insertion of wires in the duct. B) Prevention of accidental removal of wires from the duct. 23 C) Provision of maximum useful space for bringing wires from the duct. And, D) Facilitation of intentional removal of wires from the duct. 338 F. Supp. at 1243. Claim 5 of Walch patent was also reproduced in the opinion of 338 F. Supp. 1243. Plaintiff herein asserts that Claim 5 of the Walch patent reads literally on Defendant's type OA and type WA ducts or that the structures achieve the functions or results of the Walch patent as above stated. Defendant claims that that part of Claim 5 which reads, quote, ‘‘and defining substantially parallel edges on longitudinally spaced fingers,"’ does not read on the Taylor Type OA and Type WA ducts. This Court presently holds that the finger edges of the Taylor Type OA duct are substantially parallel within the meaning of the Walch patent. The finger edges are not mathematically parallel. Claim 5, however, requires only substantial parallelism. The word ‘‘substantial’’ is derived from the word ‘‘substance’’ and means “‘consisting of, relating to, sharing the nature of, or constituting substance: existing as or in substance.’’ Webster’s Third New International Dictionary (1963). In substance, the finger edges of the Type OA duct are parallel. They are certainly parallel enough to define, quote, ‘‘longitudinally spaced substantially parallel slits.”’ The edges clearly define, quote, ‘‘fingers,”’ which achieve the functional results of the Walch patent, and therefore are substantially parallel. 24 In the words of Claim 5, the fingers of the Type OA duct are narrow at ‘‘the outer ends of the slits and provide restricted passages for the wires between the finger ends and thereby prevent accidental removal of the wires in between the fingers,’ and ‘‘said fingers are flexible to permit their deflection and provide wider finger spacing at the free ends to facilitate positioning and removal of wires between said fingers.” In this Court’s original opinion, it stated: *“‘But even with the words of the claim read precisely on Defendant's product, that is not quite ‘the end of it.’ Infringement is not a mere matter of words. General Electric Company versus Allis-Chalmers Company, 178 Fed. 273, 276, the Third Circuit, I guess it is — (Third Circuit, 1910); Westinghouse versus Boyden Power Break Company, 170 U.S. 537, 18 S. Ct. 707, 42 Lawyers Edition 1136 (1898); Linde Air Products Company versus Morse Dry Dock and Repair Company, 246 Fed. 834, 838 (Second Circuit, 1917). “The question of infringement involves considerations of practical utility and substantial identity, and therefore must be quantitative as well as qualitative.’ Goodyear Shoe Machine Company versus Spaulding, 101 F. 990, 994 (C.C. 1900). ‘The doctrine of equivalents has been used to extend the protection of the patent to an equivalent which ‘performs substantially the same function in substantially the same way to obtain the same result.’ Graver Tank and Manufacturing Company versus Linde Air Products Company, supra (339 U.S. 605) at 608, (70 S. Ct. 854, 94 Lawyers Edition 1097) 298 Fed. Supp. at 448. ‘Unquestionably the Type OA duct is the equivalent of Claim 5, of the Walch patent. It accomplishes the same function or result through the use of substantially the a _———— ewe 2-5" ane «een 25 same mechanism — the only possibie point of contention being the slope of finger edges. The Type OA duct accomplishes all four of the functional advantages of the Walch patent set forth above. It does so by a device in all respects identical to the device described in Claim 5.” This Court is presently of the opinion the Type OA duct is the equivalent of the Walch device and, hence, is within the scope of the Plaintiff's patent. Taylor also claims that its Type WA duct is not within the scope of the Walch patent. This WA Type duct is identical to the Type OA duct, except for the fact that the finger ends are joined rather than open. Defendant is referred to the earlier decisions of the Court in Panduit I and Panduit II which found such closed-slot ducts to be ‘‘direct infringements’’ of the Walch patent. Supra, 298 Fed. Supp. at 449; Supra, 338 F. Supp. at 1245. Type WA is the equivalent of the structures there held to infringe and achieves the functions and results of the Walch patent. Therefore it presently appears to this Court that the Taylor OA and Type WA ducts are within the scope of the patent owned by the Plaintiff and previously adjudicated valid. For these stated reasons, I find the preliminary injunction is now in order. I will consider this proposed p: euminary injunction and let each of you, if you have any objections to it, to the form — to the form, not the substance, or if — I haven't read it, so I will let you also comment on the substance. Get this to me within the next five days, if you can, and I will -.nsider it and make a decision whether — a decision on how the preliminary injunction should read. All right. 26 APPENDIX 4 MOTION FOR PRELIMINARY INJUNCTION UNDER F.R.Civ.P. 65 (In the United States District Court Eastern District of Michigan, Southern Division) (Filed March 31, 1976) Plaintiff, Panduit Corp., by its attorney, hereby moves this court to issue a preliminary injunction enjoining the Defendant from making, having made, selling, using, or offering for sale, any product covered by Claim 5 of U.S. Patent No. 3,024,301, any colorable imitation or equivalent thereof, and in particular, but without limiting the foregoing products identified as Defendant's, Taylor Industries, Inc.’s, wiring duct types *‘O"’, *‘W’’, ““OA”’, and *“‘WA”’. Concurrence for the relief sought was requested from Counsel for Defendant, Mr. Claude A. Patalidis, who indicated on March 22, 1976 that the Defendant would not stipulate to the relief sought. Plaintiff's supporting memorandum and the Affidavits of Roy E. Petherbridge and Roy A. Moody are filed herewith. In accordance with Rule IX of the United States District Court for the Eastern District of Michigan, the date for hearing on the above motion is set for Monday, May 17, 1976 at 10:00 A.M. Respectfully submitted: By: /s/ Roy E. Petherbridge, Esq. Attorney for Plaintiff Petherbridge, Lindgren & Gilhooly Chartered 53 West Jackson Blvd. Chicago, Illinois 60604 (312) 922-1018 ae 27 APPENDIX 5 COMPLAINT (In the United States District Court Eastern District of Michigan Southern Division) (Panduit Corporation, Plaintiff v. Taylor Electric, Inc., and Taylor Plastic Corporation, Defendants.) Civil Action No. 32796 Complaint For Infringement Of United States Letters Patent No. 3 024 301 (Filed May 15, 1969) To the Honorable Judge of the United States District Court, Eastern District of Michigan, Southern Division: Plaintiff complains of the Defendants and alleges: (1) That Plaintiff Panduit Corporation, is a Delaware corporation having its office at 1730! Ridgeland Avenue, Tinley Park, Illinois. (2) That Defendants, Taylor Electric, Inc. and Taylor Plastic Corporation, are corporations duly incorporated in the State of Michigan and have regular and established places of business at Fisher Road, Howell, Michigan in this Southern Division of this Eastern District. (3) That this is a suit for infringement by Defendants of United States Letters Patent No. 3 024 301, granted March 6, 1962 and that Plaintiff is the owner of said Patent No. 3 024 301. That this action is being brought under the patent laws of the United States 28 (35 U.S.C. 281) for which original jurisdiction is vested in the Federal District Courts under 28 U.S.C. 1338(a). (4) That on or before October 5, 1955, the patentee Kurt R. Walch did conceive and invent certain improvements in a ‘‘Wiring Grille’’ and upon that date applied for a United States Letters Patent covering the same, said patent having been issued and granted as aforesaid, on March 6, 1962, under No. 3 024 301: that Plaintiff, Panduit Corporation, was assigned said patent prior to its date of grant and has been the owner of said patent since said grant. (5) That, since the date of grant of said patent, Defendants, jointly and severally, have been making, selling, and have sold and advocated the use of articles and products responding to and coming within the scope of the disclosure and claims of the said patent and have thereby infringed the claims of said patent within this Southern Division of this Eastern District of Michigan and elsewhere in the United States, willfully and without the consent of Plaintiff. (6) Plaintiff has applied the statutory notice as required by 35 U.S.C. 287 on all Wiring Grilles manufactured and sold by it under said patent. (7) That Defendants, jointly and severally, have made unlawful gains and profits from such infringement and Plaintiff, due to Defendants’ unlawful infringement, has been deprived of rights and profits which would ee ee. eae Se os 29 otherwise have come to Plaintiff but for such infringement and has thereby caused Plaintiff irreparable damages and threatens to continue to cause Plaintiff additional damages. Wherefore, Plaintiff demands an injunction against further infringement by Defendants and those controlled by Defendants, an accounting for profits and damages, an award of damages, and an assessment of costs and attorney’s fees against Defendants, and such other relief as the Court may deem just. PRICE, HENEVELD, HUIZENGA & COOPER By: /s/ Peter P. Price Preld Building 2336 Eastern Avenue, S.E. Grand Rapids, Michigan 49507 (616) 452-6911 Attorneys for Plaintiff Of Counsel: Petherbridge, O’ Neill & Lindgren 53 West Jackson Boulevard Chicago, Illinois 60604 (312) 922-1018 30 APPENDIX 6 AFFIDAVIT OF PHILIP W. TAYLOR (In the United States District Court Eastern District of Michigan Southern Division) (Filed September 1, 1976) State of Michigan County of Oakland—ss. I, Philip W. Taylor, being duly sworn depose and state as follows: 1. That I am a citizen of the United States residing at Burnet, R.R. #1, 112A Texas 78611. 2. That I am the President of Taylor Industries, Inc., defendant in the above captioned civil action. 3. That Taylor Industries, Inc. has already suffered and will continue to suffer irreparable damages unless the oreliminary injunction in date of August 11, 1976 against said Taylor Industries, Inc., is stayed pending appeal of the order granting said preliminary injunction. Said Taylor Industries, Inc., will suffer irreparable injury for the following reasons: a. Taylor Industries, Inc. is daily losing sales and the good will of its customers by being prevented from delivering orders already accepted and will subject itself to a multiplicity of law suits for breach of contract; b. Panduit Corporation is engaged in a crash customer Stealing campaign and at the same time attempting to delay the consideration of a stay by asking for an extension of time in which to brief the court. (see attached Panduit literature) Dy me sh les 31 c. Such loss of sales and of customer good will will be impossible to recapture even in the event that the Court’s decree and order granting Plaintiff a preliminary injunction is revcrsed on appeal; d. There is a strong likelihood that upon a plenary trial on the merits with full proofs and admission of pertinent prior art the patent in suit will be declared invalid and that Taylor Industries, Inc., will not be permanently enjoined, in which event Taylor Industries, Inc., will nevertheless have suffered considerable irreparable injury as a result of the loss of its customer good will. Taylor Industries, Inc. is in the position of being presumed guilty without having been able to present a defense at trial; e. Taylor Industries, Inc., will be forced to partially close its plants and thus to lay off the majority of its employees while appropriate new tooling is obtained for the purpose of producing new designs of wiring ducts, the manufacture and sale of which is not enjoined by said decree and order in date of August 11, 1976; and f. Irreparable injury will be caused to Taylor Industries, Inc., as a result of being forced to warehouse its present inventory of wiring ducts whose sale has been preliminarily enjoined or, in the alternative, in scrapping and recycling such inventory until the preliminary injunction is lifted by the Court of Appeals for the Sixth Circuit, or the patent in suit is found invalid on a plenary trial on full proof or until the expiration of the term of the patent in suit, March 6, 1979, resulting in a considerable economic waste which is against public policy at the time when conservation of energy is of prime importance to this nation. 32 4. That the consuming public will suffer considerable injury as a result of Plaintiff, Panduit Corporation, having been able to eliminate from the industry all products directly competitive with its own wiring duct and to remain the sole producer in the United States of so-called “open Slot’’ wiring ducts after having been successful in eliminating from the marketplace Stahlin Brothers Fibre Works, Inc., Jody Manufacturing, Inc., ECP Corporation and now Taylor Industries, Inc., thus permitting Plaintiff, Panduit Corporation, to dictate and impose its own prices to the consuming public. 5. I cannot overemphasize the urgency in this matter as the lead times for delivery of this product are very short. Irreparable injury occurred almost immediately upon our being enjoined and will continue daily until we will no longer be a viable wiring duct manufacturer even though we have not had our ‘‘day in court’’. 6. The attached Panduit literature has caused many of our customers to conclude that we can only supply ducts with round side holes. Sales are being lost daily because of this erroneous impression. Philip W. Taylor Subscribed and sworn to before me this 28th day of August, 1976. /s/ Ruth Heffington Notary Public Burnet County, Texas My commission expires June 1, 1977 33 APPENDIX 7 Summary of Pertinent Portions of the Transcript of the Hearing of August 4, 1976 It is clear from the transcript that the District Judge refused to consider any prior art, whether it had been considered in the prior litigation or not. This subject is discussed in particular at pages 62-68, 102, and 112-116 of the transcript of the August 4, 1976 Hearing. When counsel for Taylor sought to introduce in evidence a specimen of the prior art Taylor duct that was considered in the Stahlin Bros. case for the purpose of showing the limited scope of the patent in suit, the District Judge sustained plaintiff's objection thereto, saying: ‘The issue is closed. I decided it in the principal case. That Exhibit was before me in the principal case. I made the final judgment in it. It is closed. It is res judicata.’’ (Tr. 62-64) Next, counsel for defendant sought to introduce testimony regarding the Davis patent, U.S. No. 667,195 (Tr. 65-68). The District Judge sustained plaintiff's objection saying (Tr. 68): ‘*Well, I am not prepared and I don’t intend to retry prior arts in this preliminary injunction hearing, and any claim or any prior art that was before me in the original Panduit trial I will not consider in this preliminary injunctive proceeding.’’* * Actually it does not appear from the published decisions that the Davis patent was considered by the Court. However, it was considered by the Patent Office in connection with claims other than patent claim 5, in suit. 34 Later, the Court sustained an objection to an offer of a model of the Davis patent (Tr. 102) and further sustained objections to questions regarding it (Tr. 112-116). At Tr. 102, Taylor’s counsel had marked as exhibits a copy of Carlson patent, U.S. No. 2,507,886, and a model of the Carlson device. The Court sustained plaintiff's objection to this as prior art. (Note: there was no claim made that this prior art had been considered or that anything like it had been considered and counsel for defendant pointed this out to the Court, but to no avail. Tr. 102-103). At pages 115-116, the following exchange occurred: ‘*Mr. Patalidis: Oh, I have no desire, your Honor to retry the Stahlin case all over again. We have newly discovered prior art that goes to the heart of the presumption of validity of the Walch patent, which your Honor will not let us introduce. And if I understand your Honor’s ruling, your Honor doesn’t want any evidence to be introduced into this Court which relates to prior art. I think I may not have understood your Honor this morning when you said relates to the prior art, meaning the prior art that was before the Court in the Stahlin case, but — x* * * * Mr. Patalidis: I think this is very relevant. The Court: I have already ruled on propositions of prior art. I am not going to retry that case at this time. I may consider it on the principal case.”’ 3. 4. 35 APPENDIX 8 Claim 5 of Walch Patent 3,024,301 Compared With Prior Art Western Electric Fanning Strip Walch Cluim 5 A wall for supporting and ; ae : orienting wires comprising: A side wall ‘ having longitudinally spaced sub- stantially perallel slits ” i open at one edge of said wall and defining substantially parallel cdges on longitudinal] spaced fingers the free ends of suid fingers ~ being enlarged * DEPOSITION EXHIBIT to narrow the outer ends of the slits and provide restricted passages for the wires Létween the finger ends and thereby pre- 4 vent accidental removal of the wires from between the pe said fingers being flexible to . FANNING STRIP permit their deflection and pro- vide wider finger spacing at . y their free ends to facilitate positioning and removal of wires between said fingers 36 APPENDIX 9 Panduit Brochure Illustrating Its Fanning Strip Covered By Walch Patent 5,024,301. ae Pea? welch cloin § , ; 08 BOND abGEsbOrES BR wall for suprertin9 — HARE t/. waa + 7 , . : non sida CC Patenicd Fanning Sirip renmaventiy tsovares wall eg es e ‘—_ a = -CONRLLI OS INLPROPTI POSITION having longitudinelly agecad sand -@ “mat ee eee stantially porelicl slits rn me nd teem Se ‘ <= et nate wot nn he ae open at one edgr © 5 cen - seh : ee ee ee ee tr hi Veceat and ecfining sub.tentially - Fee on | erect fete Le ant pea peralie! edges ee eat we begs $4 mgs hi SAULT \\ . : speced finyers re pao ore 4 ml Nab | the free ends of eaid fingers ; Sunes uned's - agp) y+ ames © < eebs Geeta, v0 0 enses-en being cnlerged : ad 1 eee Rad Es oo aiiss sate + 3 to narrow the outer ents of the 5 heAst. _: 4 fy eee © ee elit: and provide serteicted ee nl f: en = f7 pessege: for the wires between i of oe vite the finger ends ond thereby pre- - a. 28 6 Sactindnienranastentinemtieterteseant vent accidental 1 rovel of the wstai PAEETEF of OFF errs Danmeng Sire, Ct ty preper tength, smepe tn holver wires from between the fingers fanniiy tole &. ts mOnites mare of Ge Romane ere enegged Ge Ge temn~y tow vou ° fk oll D3 Atirr © 1 Vee hawe been beserie t temccened ond cot of eo o FAUT nT said fi ra being flexible to “qa, ‘ Cottons Voot, Cre comple k buns a8 btees freee 08 908 Rote He pa ase én‘lection and pro- C So Fo Sep Reeves “ei en eet we oy a 6 -- beers o- ht rer beter = ~~ wide wider fingsr Spacing at On her beard, cents tor tr weet beemens nag — - their free endis to facilitate positioning and removal of wires retween said fingers v1 s “* ~~ . ash 00 ee, te ewer FM oe ' Broom {itch Accessory PANDWIT en ae te a efi PANIIT HON 6 be epacers tenbows tt we tite. bemelie Deeg a0e ate wt bet. Carly chap BeocCHUeE Bag Bere te rr Be rte Om Laren Shag te Comme ctor . During ar em er are Ot te te ened beeph Pontet Stunted Cathe be om Oo oe te The tt @n Gre end of enh opaeer, and Dre tp ee ee tem re Lee Meet te Catt be bbe ged around Gee beer fer re ee ee ie eee ate ot co gre Tew ihe Sp Oe Pe he ete he te ee mees Cate Tee te nt ont tee Tee te ght ed ett hh | coer 2 hem mead apeeneny bernie Vie oy Cee Ot at me Ot ony rh Notere myton es C fe te shed tect ie he J Svocoovcvvoousnoouunnoaan © mee mee nee ne eet oe eso -24- --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385004_2228%3A1. Public record. Not legal advice.