Petition — National Micronetics, Inc. v. U. S. Philips Corp.

tf, Supreme Court, U. §,

UV, ais!

JUL 23 1977

‘

‘

1s Tas : | wie RODAK, JR., CLERK

Supreme Court of the Unite

October Term, 1976

No. A-/93/

NATIONAL MICRONETICS INC.,

Petitioner,

U.S. PHILIPS CORP.,

NORTH AMERICAN PHILIPS CORP.,

N. V. PHILIPS GLOEILAMPENFABRIEKEN,

Respondents.

— — —

——_— —— -— - —

PETITION FOR WRIT OF CERTIORARI TO

THE UNITED STATES COURT OF APPEALS

FOR THE SECOND CIRCUIT

——- ——

———-

AbBB FortTas JoHN M. CaLIMAFDE

SrerHen B. JupDLOWE

Fortas & Koven

1200 29th Street N.W. Hopcoop, CaLIMAFDE, Ka tit,

Washington, D.C. BuausTeIn & LizBERMAN

Of Counsel 60 East 42nd Street

New York, New York 10017

Counsel for Petitioner

te

TABLE OF CONTENTS

PAGE

Opinons Below camera RT ORE 1

Jurisdiction aE? SRY IEE acalcbagtedtteas actin 2

Questions Presented ie ree 2

Constitutional and Statutory Provisions Involved .... 3

Statement of the Case eae ahah diedds 3

A. The Issues Presented Te asa 3

The Facts . Le hatadeueh tious aimaatienton i)

B. Opinions Below 8

The District Court ............ 8

i I ae. os céllinoiorwesoninnctnicteens . Ae

Reasons for Granting the Writ .......................:ceeeee. . a

A. In Summary ce aheiptalsablanh-benedinidaag) i" a

B. Sammary Argement ..........................:...000003. ae

1. Conflict with Decisions of this Court . 13

2. Conflict with Other Circuits 0S 17

Conclusion ........ abst cies RO IT

Appendices:

A—Opinion of the United States Court of Appeals

for the Second Circuit .... LA ON TDs lie RN Sg

¢

B—Opinion of United States District Court Judge

Robert Ward ate SLE te eRe A24

C—Section 8, Clause 8. Patents and Copyrights A66

D—<i03. Conditions for Patentability; Non-Ob-

vious Subject Matter ..................... acideath eae A66

TET EA SENT IT A66

II

TABLE OF AUTHORITIES

Cases:

PAGE

American Infra-Red Radiant Co. v. Lambert In?us-

id i dni snticercnimesannoptanee 19

Anderson’s-Black Rock, Inc. v. Pavement Salvage Co.,

Bg Te Is HD CIID ride cnevgapsiasanscncessnssenses 11n, 14, 15

Ashcroft v. Paper Mate Mfg. Co., 434 F.2d 910 (1970) 20

Dow Chemical v. Halliburton, 65 S.Ct. 647 (1945) ...4n, 13n

14, 15, 16

Dann v. Johnston, 96 §.Ct. 1393 (1976) 0.000000... 14, 15

Dunbar v. Myers, 94 U.S. 187, 14 L.Ed. 34 ....... ae a

Eastern Plastics Corp. v. Ronci, 396 F.2d 890 (1970) 18

Graham v. John Deere, 86 S.Ct. 684 (1966) ._....4n, 8n, 13n,

14, 15, 16, 17, 19

Great Atlantic and Pacific Tea Co. v. Supermarket

Equipment Corp., 71 S.Ct. 127 (1950) 9n, 14, 15, 16, 17

General Electric Co. v. Wabash Co., 58 S.Ct. 899

(1938) TBR AE TE ee IOLA FAD Cole 17

Hadfield v. Ryan Equipment Co., 456 F.2d 1218 (1972) 19

Hotchkiss v. Greenwood, 11 How. 248 (1851) ......... 14,18

Higley v. Brenner, 387 F.2d 855 (1967) 00... o. aan

Kaiser Industries Corp. v. McLouth Steel Corp., 400

_y | i: AR cnn ition tesiee arco 19

Lincoln Engineering Co. v. Stewart-Warner Corp.,

303 U.S. 545, 58 S.Ct. 662 (1938) . = 17

Lyon v. Bausch & Lomb Optical Co., 204 F. 24 550 Q

Cir. 1955) . LEE SERRE De POOR aS IO ak

Paramount Publix Corp. v. American Tri-Ergon

Corp., 55 S.Ct, 449 (1935) ooo. 4n, 14, 16

Panduit Corp. v. Burndy Corp., 517 F.2d 535 (1975) . 19

Philips Electronic and Pharmaceutical Industries

Corp. v. Thermal and Electronic Industries, Inc.,

I a ME ID soc ecicsesaves cbsescéascevnseumseemseceve occ, 18

PAGE

Proler Steel Corp., Inc. v. Luria Brothers & Co., Inc.,

I odo cba ben tap contin sastienuscsecenaneveness 19

Reiner v. I. Leon Co., 285 F.2d 501 (2 Cir. 1960)... 18

Roanwell Corp. v. Plantronics, 97 S.Ct. 538 (Decem-

ber 6, 1976),aff’d per curiam, 535 F.2d 1397 ..... . 4,18

Sakraida v. Ag Pro, Inc., 96 S.Ct. 1532 (1976) ... 11n, 14, 1o

Shaw v. E. B. & A. C. Whiting Co., 417 F.2d 1097, (2

Cir. 1969) 7s 18

Speakman Company v. W ater Save er Faucet Co., ‘Ine. 7

497 F.2d 410 (1974) ; .

Smith v. Nichols, 21 Wall. 112, 22 L. Ed. 566. ees

Technograph Printed Circuits, Ltd. v. Martin Marietta

Corp., 474 F.2d 798 (1972) 19

Timely Electronics & Systems, Inc. v. Optical Recog-

nitions Systems, Inc., 493 F.2d 1222 (1973) a)

Timely Products Corporation v. Arron, 523 F.2d 288

(2 Cir. 1975) ..... sb seuisian hen ++. 9, 11, 17, 18

United Carbon Co. v. Binney & Smith Co., 63 S.Ct. 165

(1942) = 16

Waldon, Ine, v. Alexander Mfg. Co., 423 F.2d 91

a | ee

Westwood Chemical, Inc. v. Owens-Corning Fiber-

glass Corp., 445 F.2d 911 (1971) Eo a Saban ee 19

Other Authorities:

28 U.S.C.

Section 1254(1) 2

Section 1338(a) 3

35 U.S.C.

Section 103 .... a ? 3

Section 112 .. | > uv 2,3

United States Constitution

Article I, Section 8, Clause 8 2000... 3, 12

IN THE

Supreme Court of the United States

October Term, 1976

Nationa Micronetics Inc.,

Petitioner,

v.

U.S. Puts Corp.,

NortuH American Puiuips Corp.,

N. V. Puiuips GLOEMLAMPENFABRIEKEN,

Respondents.

PETITION FOR WRIT OF CERTIORARI TO

THE UNITED STATES COURT OF APPEALS

FOR THE SECOND CIRCUIT

Petitioner, National Micronetics Inc., prays that a Writ

of Certiorari issue to review the jndginent of the United

States Court of Appeals for the Second Circuit.

Opinions Below

The opinion of the Court of Appeals :s reported at 550

F.2d 716, and is reprinted as Appendix A to this Petition.

The opinion of the District Court for the Southern District

of New York is reported at 410 F.Supp. 449 and is reprinted

as Appendix B.

Jurisdiction

The judgment of the Court of Appeals was entered on

January 12,1977. A timely petition for rehearing and sug-

gestion for rehearing en banc were denied on March 25,

1977. An application to this Court for an extension of time

to file this Petition was granted on June 8, 1977, allowing

petitioner until July 23, 1977. The jurisdiction of this

Court is invoked under 28 U.S.C. Section 1254(1).

Questions Presented

1. Is the Second Circuit’s decision in conflict with this

Court’s decisions construing the patent clause of the Consti-

tution and Sections 103 and 112 of the Patent Act setting

the standards for determining the validity of patents?

2. Did the Second Circuit err in holding that ‘‘a com-

bination of existing elements’’ (550 F.2d 722) constituted a

patentable invention where nothing novel was added and

no synergistic effect was obtained?

3. Did the Second Circuit err in holding that the patent

at issue was not invalid for obviousness (35 U.S.C. 103),

despite the conceded absence of any novel conception, on

the asserted grounds that it solved a problem, despite the

holdings of this Court?

4. Did the Second Circuit err in relying upon the as-

serted precision obtained by the process where no such

claim was made by the patent (35 U.S.C. 112)?

Constitutional and Statutory Provisions Involved

This case involves Art. I, Section 8, Clause 8 of the

Constitution (App. C); and Sections 103 and 112 of the

Patent Act of 1952, 35 U.S.C. 103, 112 (App. D).

Statement of the Case

A. The Issues Presented

This action for patent infringement and for an injunc-

tion and damages was brought on March 2, 1971, by re-

spondent, U.S. Philips Corp., in the United States District

Court for the Southern District of New York. Judisdiction

was founded on 28 U.S.C. 1338(a). Petitioner seeks review

of the decision of the Court of Appeals for the Second Cir-

cuit which, by a 2-1 vote, affirmed the judgment of the Dis-

trict Court holding valid and infringed certain claims of

U.S. Patent No. 3,246,383 (hereinafter the Peloschek pat-

ent).

The Peloschek patent is directed to the manufacture of

magnetic recording heads, particularly for electronic com-

puters. It is a combination of known steps, none of which

is novel. The particular factor relied on for patenta-

bility—the use of capillary action—is ancient and is known

to schoolboy-scientists. (550 F.2d at 724.) The District

Court recognized that the validity of the Peloschek pat-

ent was far from clear, and that the question of obvi-

ousness ‘‘is a close one’’ (A 65a).' The majority of the

Second Cireuit’s panel acknowledged that ‘‘the elements of

the Peloschek patent existed in the prior art of manufac-

1. Reference is to the printed Appendix filed with the Court of

Appeals. Statement also appears at 410 F.Supp. at 446.

4

turing electronic and magnetic devices’’ (550 F.2d at 723),

but rejected petitioner’s argument of ‘‘obviousness’’ on

the grounds that a particular result achieved, although not

specified in the patent’s claims, had been ‘‘long sought.’’

This standard has been repeatedly and specifically rejected

by this Court: e.g., Paramount-Publiaz?; Dow*; Graham.‘

The issue which petitioner seeks to present to this Court

is limited to the validity of the patent. The decision below

is in direct conflict with the unbroken line of decisions of

this Court and with other Circuits. It is, however, in

keeping with a line of decisions of various panels of the

Second Circuit (see cases cited, infra, and cf., Roanwell

Corp. v. Plantronics, 97 S.Ct. 538 (December 6, 1976) (dis-

sent by White and Brennan, JJ., from denial of certiorari

to review Second Circuit affirmance of patentability)). The

specific issues presented are the constitutional criterion of

‘*invention’’; the standards for determining obviousness;

the weight to be given to ‘‘secondary indicia’’; and the

legality of deciding the validity of a patent on a basis not

stated in the claims.

The Peloschek patent is one of a number of patents re-

lating to the manufacture of magnetic recording heads,

used primarily in electronic computers, which are owned by

N. V. Philips Gloeilampenfabrieken and affiliates. Each of

the Philips patents claims some improvement or change

over its predecessors. Each, of course, was intended to and

did extend the attempted Philips monopoly for 17 years.

2. Paramount Publix Corp. v. American Tri-Ergon Corp., 55

S.Ct. 449, 453 (1935).

3. Dow Chemical v. Halliburton, 65 S.Ct. 647, 651 (1945).

4. Graham v. John Deere, 86 S.Ct. 684, 703 (1966).

5)

The Peloschek patent was filed in 1963 and issued in 1966.

It would have the effect, if valid, of extending the Philips

monopoly until 1983.

Together, IBM and Ferroxcube, a Philips affiliate, man-

ufacture more than 90% of the heads in issue. Micronetics

is a relatively small manufacturer of such heads. IBM and

Philips have a ‘‘field of the Art’’ agreement under which

1,500 Philips patents are available, including the Peloschek

and other Philips patents for magnetic recording heads.

The record does not, however, show that IBM is using the

Peloschek process. As the Trial Court found, ‘‘There is

fonly] some testimony indicating that IBM made use of

the process at least until 1969’’ (A 68a), and there is no

evidence that anyone contracted to pay for use of the Pelo-

schek patent. Accordingly, the Trial Court ‘‘has not at-

tached great weight to the proof offered of commercial

success’’ (A 68a). For reasons which are totally obscure,

the majority of the Second Circuit’s panel disregarded

these facts, and relied upon the alleged existence of a prob-

lem which Peloschek solved in a ‘‘flash of brilliance’’!

The Facts

Magnetic recording heads are used in the recording and

playback of electronic signals. Familiar examples are in-

struments for recording voice or music, but the principal

use for magnetic recording heads is in electronic computers.

The operative part of the head is a core composed of two

magnetic pieces separated by a ‘‘gap’’ of minute dimen-

sions which is filled with a non-magnetic material (glass).

The core serves electronically to imprint information on

magnetic tape, film or disc, which is moved under it.

6

The only issue in this case relates to the method of

Ning the ‘‘gap’’ between the two pieces of magnetic ma-

terial (ferrite) with glass. The glass, in molten or liquid

form, serves to bond the magnetic parts of the core.

There is no dispute that all of this including the iden-

tical glass-bonded ferrite core was well-known and prac-

ticed prior to Peloschek. Magnetic recording is admittedly

an old art; the size of the gap is regulated by the insertion

of ‘‘shims’’ or spacers, which is concededly prior art in

making magnetic recording heads; and filling the ‘‘gap”’

with glass by a variety of alternative means, the glass also

serving to ‘‘bond’’ the magnetic pieces, is also well-known

art. All of these are taught and disclosed by patents, the

major ones (the Duinker patents) being owned by Philips.°®

The asserted contribution made by Peloschek, relied

upon by the Courts below, is to use the ancient principle of

‘‘capillary’’ action to insert the glass in the gap: That is,

to locate the glass outside and adjacent to the gap, and

then to heat it so that it ‘‘flows’’ into the gap. Alternative

methods in use, prior to Peloschek as well as currently,

involve inserting the glass or a glass film in the gap or

applying a glass coating to the magnetic pieces and then

subjecting the core to heat and pressure so that the glass

fills the gap and bonds the magnetic pieces.

Peloschek does not claim that he invented the capillary

process. Capillary action to fill a minute gap is an old and

well-known art. As the dissenting judge in the Court of

Appeals stated, the ‘‘capillary’’ procedure is nothing more

5. See 550 F.2d at 725 for citation of specific patents.

7

thai ‘‘an adaption of a physical process familiar to every

embryonic schoolboy scientist who has watched his blotter

absorb ink’’ (550 F.2d at 724).° Its use in the electronic

and magnetic arts is well-established and a number of pat-

ents, prior to Peloschek, teach the use of the capillary pro-

cedure in those arts for filling minute gaps with a variety

of materials. As the Trial Court found: ‘‘The prior art

indicates the widespread use of capillary action to fill

minute gaps * * *.’’ (A 64a).

One of these earlier patents, a German patent, as the

Trial Court found, relates specifically to the manufacture

of magnetic recording heads (A 60a). The majority below

ignores this fact and finding and, without explanation,

makes the surprising statement that ‘‘capillarity [is] an

element previously unused in the art of manufacturing

magnetic recording heads.’’ (550 F.2d at 725). Another,

the Grant patent, teaches the use of the capillary process

in terms that are indistinguishable from the Peloschek

claims, or in the words of the Trial Judge, ‘‘read most

directly on’’ the Peloschek patent (A 63a). Grant dis-

closes ‘‘a structure consisting of two magnetic parts sep-

arated by a minute permanent non-magnetic gap, which

also bonds the two together, created by flowing non-magnetic

material between the two parts by capillary action’? (410

F.Supp. at 463). ‘‘The function of the claimed invention,’’

according to Grant, ‘‘is to connect said magnetizable mem-

bers together and to form therebetween a permanent non-

magnetic gap of fixed dimensions.’’ (A 61a). (Emphasis

6. The dissenting judge in the Court of Appeals said :

“The schoolboy scientist, were he willing to spend five minutes

on research, would have learned that capillarity works most

effectively in narrow spaces.” (550 F.2d at 724).

8

supplied.)’ (The majority below discusses Grant at some

length, but disposes of it, citing previous Second Circuit

decisions,® on the grounds that éven if Grant and others

demonstrate that capillarity is part of the prior art, the

‘‘problem”’ of achieving precision in the gap-filling process

was solved by Peloschek. In fact, there was no such prob-

lem; the Peloschek patent, in its 15 claims, does not assert

that its contribution is the solution of any such problem;

and the decisions of this Court establish that problem-

solving, without ‘‘invention’’ does not sustain patentabil-

ity.)

None of the prior patents or other prior art relating to

the use of the capillary process was before the Patent Ex-

aminer or cited by him. For this reason, the District Court

expressly ruled that the usual statutory presumption of

validity of a granted patent was ‘‘weakened”’ (A 52a).

B. Opinions Below

The District Court

The Trial Judge expressed doubts as to obviousness;

he found that the evidence of ‘‘secondary”’ indicia of non-

obviousness was meager; and he was unimpressed by the

‘‘meager’’ evidence of commercial success. He neverthe-

less upheld the validity of the Peloschek patent on the basis

7. Grant and the German patent speak of the use of materials

other than glass for filling the tiny gaps by capillary action, but this

is of no significance: (1) There is no dispute that glass has long

been known to be subject to capillary action; (2) only three of the

15 claims of the Peloschek patent specify glass; and (3) it is well-

established that relevant prior art includes “closely related arts.”

Graham at pp. 702-703.

8. 550 F.2d at 722.

9

of the Second Circuit’s Timely Products® opinion which,

contrary to this Court’s decisions (see mfra) asserts that

the solution of a problem which others have considered and

failed to solve, negates obviousness.

Tke Trial Judge did not expressly address himself to

the question whether the alleged Peloschek contribution to

the art satisfied the constitutional requirement for an inven-

tion or whether, as the dissent in the Court of Appeals con-

cluded, ‘‘His invention did not push back the frontiers of

scientific knowledge’’ (citing this Court’s decision in the

AP case).”° The Trial Judge recognized that prior to

Peloschek, there was ‘‘widespread use of capillary action

to fill minute gaps’’; he recognized that prior art, spe-

cifically the Duinker Philips patent No. 3,117,367, taught

the use of shims or spacers to fix the size of the gap. He

admitted that prior art (the Grant patent in particular)

used capillary action successfully to fill a gap of ‘‘fixed

dimensions’’ (A 61a); he acknowledged that the German

patent taught the use of capillarity with specific reference

to magnetic recording heads (410 F.Supp. at 463). In his

view, however, the Peloschek contribution is patentable

because, by the use of capillary action, it achieved a result

which other ‘‘skilled workers in the field’’ had not reached:

Namely, to insert or inject the glass so as to fill the gap

‘*precisely’’. Other facts and findings of the Trial Judge,

however, at least cast doubt upon the premise that Pelo-

schek found an answer to a serious problem (even if that

premise would support patentability which it does not

under the decisions of this Court—see infra) :

9. Timely Products Corporation v. Arron, 523 F.2d 288, 294

(2 Cir. 1975).

10. Great Atlantic and Pacific Tea Co. v. Supermarket Equip-

ment Corp., 71 S.Ct. 127 (1950).

10

1. Peloschek and his co-worker were not even instructed

by Philips to seek a method of more precisely filling the

gap. They were asked to find a more economical manu-

facturing method for gap-filling; and within a few months

they came up with the use of the capillary procedure. (As

the dissenting judge in the Court of Appeals stated, ‘‘ There

was no crying industrial demand for the process, either

prior to the alleged invention or within a reasonable time

thereafter’’ (550 F.2d at 725).)

2. Nota single one of the 15 claims in Peloschek recites

or specifies the achievement of greater precision.

3. As the Trial Judge found, after publication of the

Peloschek method, there is no evidence of substantial com-

mercial use—if there had been a need which Peloschek

satisfied, presumably manufacturers would have turned to

the use of his patent and would have taken licenses from

Philips.

4. On the contrary, the Trial Court found little use of

Peloschek except by Philips itself and petitioner Micro-

netics, and he concluded that, ‘‘In light of the record, the

Court has not attached great weight to the proof offered

of commercial success.”’

The Second Circuit

Without acknowledging or even referring to the Trial

Court’s finding that the German patent had been directed

to the use of capillary action in filling gaps in magnetic

recording heads, the majority of the Second Circuit panel

concluded that ‘‘capillarity’’ was ‘‘an element previously

unused in the art of manufacturing magnetic recording

11

heads’’ (550 F.2d 721). This is clearly erroneous. They,

however, held that in the present case, Peloschek ‘‘found

a solution, however simple, by departing from the norm’’

of prior practice, to ‘‘the industry’s search for a process

which would accurately reproduce minute gap dimensions

{and which] had been the subject of continuing experimen-

tation for nearly a decade’’ (550 F.2d at 722). On this

basis, quoting prior Second Circuit statements in Timely

Products Corporation v. Arron, 523 F.2d 288, 294 (1975),

the majority held that the Peloschek patent was not void

for obviousness.

Even if we assume, as the majority says, that Peloschek

succeeded where others failed, decisions of this Court, as

we have noted, make it plain that this fact would not estab-

iish patentability.’ But there is no evidence in this record

of a demand, unsatisfied by the prior art, for a process

having the characteristics of the Peloschek patent. On the

contrary, not a single company agreed to pay the price for

a license under the Peloschek patent. As the Trial Court

found (A 68a) only Philips and Micronetics use the capil-

lary process. IBM made some use of the process at least

until 1969, but this was under a general ‘‘field of use’’

license under which they have available about 1,500 Philips

patents. As the Trial Court further found, ‘‘the court has

not attached great weight to the proof offered of commer-

cial suecess’’, and ‘‘admittedly the evidence of the ‘second-

ary’ indicia of non-obviousness is meager.”’

The plain fact of the matter is that the decision below

secures to N. V. Philips and its affiliates a monopoly of

11. Anderson’s-Black Rock, Inc. v. Pavement Salvage Co., Inc.,

90 S.Ct. 305 (1969); Sakraida v. Ag Pro, Inc., 96 S.Ct. 1532

(1976).

12

indeterminable scope and incalculable effect, embracing the

use of the old ‘‘capillary’’ process in the art of glass and

glass-bonding, based upon a patent which is clearly in vio-

lation of this Court’s standards.

Reasons for Granting the Writ

A. In Summary

Petitioner respectfully submits that this Court should

review the present case:

1. The decision is clearly in conflict with the rulings of

this Court with respect to the construction of the patents

clause of the Constitution (Art. I, §8, cl. 8); the standards

for determining the existence of an ‘‘invention’’ sufficient

to sustain the grant of a patent monopoly; and the determi-

nation of ‘‘obviousness’’ within Section 103 of the Patent

Act.

2. The decision below is in conflict with decisions of

other Courts of Appeals on the questions of invention and

patentability, obviousness, and the limitation of the patent

to its specific claims, for purposes of determining validity.

The result is widespread ‘‘forum-shopping’’ in patent

cases.

3. The decision below validates a patent on a basis

which is not specified or disclosed in the claims or specifi-

cation of the patent. This decision is in conflict with the

conclusions of other Circuits and of this Court, and it opens

a potentially explosive area of patent adjudication.

13

4. The issues are of great importance to the adminis-

tration of the patent laws and to the national interest in

the preservation of an open, competitive society in which

access to the fund of knowledge is not interfered with be-

yond the strict limits of the Constitution as construed by

this Court; in which competing entrepreneurs, inventors

and innovators are encouraged and are not blocked from

the use and development of technical, scientific and produc-

tion information; and in which competition and innovation

generally, and particularly in the high-technology fields,

are not constricted by the unwarranted use of monopolies

based upon invalid patents.

B. Summary Argument

1. Conflict with Decisions of this Court

a. Viewed in light of this Court’s prior decisions, the

Peloschek patent is invalid for lack of invention und for

obviousness.

(1) Peloschek does not add to the sum of useful knowl-

edge, but seeks to withdraw known processes from public

use. It is a combination of prior art. No component or

process new to the arts of magnetics or electronics was

claimed or disclosed. ‘‘No new mental or physical opera-

tion’’ is involved.”

The courts below ignored this Court’s repeated admo-

nition that a patent, to be valid, ‘“‘must add to the sum of

useful knowledge, not subtract from it’:

12. Graham, 86 S.Ct. at 688; Dow, 65 S.Ct. at 649.

14

‘‘Congress may not constitutionally enlarge the patent

monopoly without regard to the innovation, advance-

ment or social benefit gained thereby. Moreover, Con-

gress may not authorize the issuance of patents whose

effects are to remove existent knowledge from the pub-

lie domain, or to restrict free access to materials al-

ready available. Innovation, advancement, and things

which add to the sum of useful knowledge are herent

requisites in a patent system which by constitutional

command must ‘promote the Progress of * * * useful

Arts.’ This is the standard expressed in the Constitu-

tion, it may not be ignored.’’ Graham v. John Deere,

86 S.Ct 688. (Emphasis supplied.)

A&P, 71 8.Ct. at 130; Hotchkiss v. Greenwood, 11 How. 248

(1851); Dann v. Johnston, 96 S.Ct. 1393 (1976); Dow, 65

S.Ct. at 649.

(2) The decisions of this Court establish that the

achievement of betler results, even if proved, does not

sustain a patent in the absence of true ‘‘invention’’. ‘It is

elemental that the mere substitution of equivalents which

do substantially the same thing in the same way, even

though better results may be produced, is not such an inven-

tion as will sustain a patent. Dunbar v. Myers, 94 US. 187,

199, 24 L.Ed. 34; Smith v. Nichols, 21 Wall. 112, 119, 22

L.Ed. 566.’’ Dow, 65 S.Ct. at 651. Greater utility does not

establish novelty. Paramount, 55 8.Ct. at 453-4. ‘It is

relevant to commercial success, not to invention.’’ Ander-

son’s-Black Rock, 90 S.Ct. at 307. ‘‘Greater convenience,

cheaper, faster, commercial success prove nothing.’’ Sak-

raida, 96 S.Ct. at 1537. The asserted improvement does not

sustain patentability where it ‘‘is the work of a skillful

mechanic, not an inventor.’’ Sakraida (1976), quoting

Hotchkiss (1851); see also Dow, 65 S.Ct. 647, 650, ‘‘mere

15

application of an old process to a new and analogous use’’

is not patentable.

(3) Combination patents are suspect. As this Court

has held, they must meet a “‘severe test.’? A&P, 71 S.Ct.

at 130. This Court has at the present term reaffirmed the

following basic principle, quoting from A&P: ‘Courts

should scrutinize combination patent claims with a care

proportioned to the difficulty and improbability of finding

invention in an assembly of old elements.... A patent for

a combination which only unites old elements with no change

in their respective functions .. . obviously withdraws what

already is known into the field of its monopoly and dimin-

ishes the resources available to skillful men. . . .’’—Sak-

raida, 96 S.Ct. at 1537.

‘Strict observance’? of the requirements for patent-

ability is essential. Graham, 86 S.Ct. at 694.

(4) At most, the differences between Peloschek and the

art m use is not enough to justify the grant of a patent

monopoly. Small differences between the new thing and

what we have known before are not enough. Dann v.

Johnston, 96 S.Ct. 1393 (1976); Dow, 65 S.Ct. at 651;

Graham, 86 S.Ct. at 692 and 703.

(5) The Peloschek combination does not produce a syn-

ergistic result, essential to the validity of combination pat-

ents. Sakraida, 96 S.Ct. 1532; Anderson’s-Black Rock, 90

S.Ct. 305.

(6) The basis of the decision in this and other Second

Circuit cases—that the patent solved a problem—even if

16

that statement were warranted here, does not sustaim va-

lidity, as this Court has frequently held. The failure of

others to come forward with the new use of am oid art is

not enough. A claim of long-felt need is not enough in the

absence of ‘‘true invention.’’ Dow at 651; Graham at 703.

Long search for a solution is not enough. Paramount, 294

U.S. at 476. The fact that other inventors failed to resort

to a method proves nothing; it is ‘‘wholly irrelevant’’.

Graham at 703. The problem test is ‘‘wholly irrelevant’’.

Graham at 703. In Dow, this Court expressly ruled that the

fact that no one thought of the new use is not enough.

‘‘He who is merely the first to utilize the existing fund

of public knowledge for new and obvious purposes must

be satisfied with whatever fame, personal satisfaction

or commercial success he may be able to achieve. Pat-

ent monopolies, with all their significant economic and

social consequences, are not reserved for those who

contribute so insubstantially to that fund of pubiic

knowledge.’’ 65 S.Ct. 647. Dow at 650.

(7) The Peloschek process was obvious. The inventor

must be charged with knowledge of the technology. Dann,

96 S.Ct. 1393. Relevant prior art includes ‘‘closely related

art.’’ Graham, 86 S.Ct. at 702-703.

b. The lower court sustained the validity of Peloschek

on the basis of its ‘‘ precise’’ recults—which is not asserted

in any of its claims. A patent may not be validated by

features not specified in the claims. 35 U.S.C. 112; A&P,

71 S.Ct. 127 at 129; United Carbon Co. v. Binney & Smith

Co., 63 S.Ct. 165, 170 (1942). The scope of protection

granted by a patent is defined by the language of its claims,

and it is the ‘‘claims which define the boundaries of a patent

17

monopoly.’’ AdéP at 128. It is the claims and only the

claims which ‘‘measure the invention.’’ General Electric

Co. v. Wabash Co., 58 S.Ct. 899, 902 (1938).

Moreover, such an ‘‘afterthought’’ cannot sustain va-

lidity ; if ‘‘precision’’ of the gap were ‘‘so vital an element

in the functioning of the apparatus, it is strange that all

mention of it was omitted.’’ Graham, 86 S.Ct. at 697 ; quot-

ing Lincoln Engineering Co. v. Stewart-Warner Corp., 303

U.S. 545, 58 S.Ct. 662 (1938); A&P, 71 S.Ct. at 129.

2. Conflict with Other Circuits

We respectfully submit that a reading of opinions in

other Courts of Appeals involving questions of patenta-

bility underscores the need for this Court to review the

present case, and to affirm and reaffirm the constitutional

and statutory standards which should be applied in all pat-

ent adjudications. The present case presents these issues

clearly and sharply; and the need is imperative for clear

guidance and direction to all circuits as well as to the Sec-

ond Circuit where the novel and impermissible ‘‘existence

of a problem’’ test has been enshrined in disregard of this

Court’s prior decisions.”*

For examples of the Second Circuit’s departure from

this Court’s precepts, see Timely Products Corporation v.

Arron, 523 F.2d 288 (2 Cir. 1975), which gave rise to the

‘*problem’’ test of patentability in dictum reading: ‘‘We

can conceive of no better way to determine whether an

invention would have been obvious’’ than to apply the

‘*problem’’ test. This Court had since the A¢dP ease in

13. Even within the Second Circuit, various panels have reached

conflicting results.

18

1950 prescribed the better way, and in Graham, in 1966,

specifically articulated the primary tests as the better way.

The Timely opinion was authored by Judge Conner. In

the Roanwell case, supra, criticized by Justices White and

Brennan, Judge Conner as the Trial Judge held a patent

valid because of the existence of an unsolved problem and

relied for authority on his dictum in the Timely case (403

F.Supp. 138, 148). The Roanwell decision was affirmed per

curiam, 535 F.2d 1397, thus converting the ‘‘problem’’ test

dictum to the rule of the Cireuit. The present case ex-

pressly followed the dictum of Timely both at the trial and

appellate levels in total disregard of the ‘‘long standing

principles of patent law’’ mandated by this Court since

Hotchkiss in 1851; Roanwell, 50 L. Ed.2d 619.

Long prior to the dictum in Timely, the Second Circuit

conspicuously, among all of the federal appellate courts,

has based decisions of patent validity upon ‘‘secondary

considerations’’ which this Court has repeatedly warned

against. See, e.g., Reiner v. I. Leon Co., 285 F.2d 501 (2

Cir. 1960); Lyon v. Bausch € Lomb Optical Co., 224 F.2d

550, 535 (2 Cir. 1955); Shaw v. E. B. d A. C. Whiting Co.,

417 F.2d 1097, 1104 (2 Cir. 1969).

Examples of contrary decisions in other circuits are:

1. In the First Circuit, Eastern Plastics Corp. v.

Ronci, 396 F.2d 890 (1970).

2. Inthe Third Circuit, Philips Electronic and Pharm-

aceutical Industries Corp. v. Thermal and Electron-

ic Industries, Inc., 450 F.2d 1164 (1971), involving

another Philips affiliate and a patent relating to a

glass-to-metal seal. The Third Circuit in that ease

19

faithfully followed the rule of Graham and found

the patent invalid for obviousness although, like the

Peloschek patent, it assertedly solved a long felt

need and achieved commercial success.

. In the Fourth Cireuit, Technograph Printed Cir-

cuits, Ltd. v. Martin Marietta Corp., 474 F.2d 798

(1972); Timely Electronics & Systems, Inc. v. Op-

tical Recognitions Systems, Inc., 493 F.2d 1222

(1973).

. Inthe Fifth Cireuit, Waldon, Inc. v. Alexander M f9.

Co., 423 F.2d 91 (1970).

. In the Sixth Circuit, Westwood Chemical, Inc. v.

Owens-Corning Fiberglass Corp., 445 F.2d 911

(1971); Kaiser Industries Corp. v. McLouth Steel

Corp., 400 F.2d 36 (1968); Speakman Company v.

Water Saver Faucet Co., Inc., 497 F.2d 410 (1974).

- In the Seventh Circuit, Panduit Corp. v. Burndy

Corp., 517 F.2d 535 (1975), involved a strap binding

tool which was directed to a combination of elements

and assertedly solved a long felt want. The Sev-

enth Circuit reversed the trial court and found the

patent invalid on the ground of obviousness. The

Court found the patent invalid by strict application

of the Graham tests.

. In the Eighth Circuit, American Infra-Red Radiant

Co. v. Lambert Industries, 360 F.2d 977 (1966) ;

Hadfield v. Ryan Equipment Co., 456 F.2d 1218,

1221 (1972).

. In the Ninth Cireuit, Proler Steel Corp., Ine. vy.

Luria Brothers & Co., Inc., 417 F.2d 272 (1972);

20

Ashcroft v. Paper Mate Mfg. Co.,, 434 F.2d 910

(1970).

9. In the District of Columbia Circuit, Higley v. Bren-

ner, 387 F.2d 855 (1967).

We respectfully submit that the Court should put an end

to the forum-shopping which these conflicts have invited,

and should terminate the situation in which patent validity,

access to knowledge, and the survival of competitors to the

great patent-engrossers like Philips depends upon Philips

choice of forum and the luck of the draw of the panel.

Conclusion

For the reasons stated, a writ of certiorari should

issue to review the judgment and opinion of the United

States Court of Appeals for the Second Circuit.

Respectfully submitted,

Ase Fortas JoHN M. CALIMAFDE

Fortas & Koven STEPHEN B. JupLowz

1200 29th Street N.W. Hopcoop, CaLimaFpE, Katit,

Washington, D.C. Buausters & LizseRMAN

Of Counsel 60 East 42nd Street

New York, New York 10017

Counsel for Petitioner

APPENDICES

Appendix A

UNITED STATES COURT OF APPEALS

Seconp Circuit

I

U. S. Puips Corp.,

Plaintiff-Appellee,

v.

Nationa Micronetics Inc., et al.,

Defendants-A ppellants,

v.

Nortu AMERICAN Puruips Corporation and

N. V. Pururrs GLOEILAMPENFABRIEKEN,

Counter-Defendants.

No. 209, Docket 76-7134.

Argued Nov. 22, 1976.

Decided Jan. 12, 1977.

ES

Before MAansFIELD, VAN GRAAFEILAND and MEsKILL,

Circuit Judges.

MansFIELD, Circuit Judge:

National Micronetics, Ine. (‘‘National’’) appeals that

portion of a judgment of the District Court for the South-

ern District of New York, Robert J. Ward, Juage, holding

valid certain claims of U.S. Patent No 3,246,383 (‘‘the

Peloschek Patent’’). Appellant does not challenge the dis-

trict court’s additional finding that it infringed the patent.

A2

Appendix A

The plaintiff, U.S. Philips Corporation, commenced this

action against National on March 2, 1971, seeking damages

and injunctive relief as assignee of three allegedly infringed

patents. National denied infringement, challenged the

validity of all three patents, and asserted counterclaims

for patent misuse and antitrust violations against plaintiff

and its assignors, North American Philips and N.V. Philips

Gloeilampenfabrieken. Prior to trial plaintiff withdrew one

infringement claim and Judge Ward severed and stayed the

counterclaims pending the outcome of the infringement

action.

On January 27, 1976, after a trial without a jury, the

district court issued a 50-page opinion finding one of the

patents invalid and that claims 1-4, 6 and 8-11 of the

Peloschek patent were valid and infringed. National’s

appeal is limited to the issue of the validity of the Peloschek

patent under 35 U.S.C. §103, which states that:

‘*A patent may not be obtained .. . 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.’’

The Peloschek Patent

The Peloschek patent’s subject matter is a process for

the manufacture of a magnetic recording head, which is

that part of a tape recorder or computer that translates

electrical impulses into magnetic patterns on a tape for the

purposes of storage. In reverse, the recording head can

MMMth es

A3

Appendix A

‘‘read’’ the magnetic patterns from the tape, meaning that

it retranslates them into electrical impulses which then

become sounds, pictures, or a computer printout.

A magnetic recording head consists of two basic parts,

the first constructed of magnetic material and the second of

a non-magnetic material bonded to the first as a ‘‘gap”’

which permits the electrical impulses flowing through the

recording head to create magnetized patterns on the tape

opposite the gap. The magnetic heads at issue in this case

generally have a magnetic portion constructed of two

ferrite pieces, bonded together by a non-magnetic portion,

usually of a glass-type material. (See Exhibit A hereto).

The process for which the Peloschek patent was obtained

describes a method of bonding the two ferrite pieces and

the gap material to create a single-piece magnetic head with

a minute non-magnetic gap.

The recording head and the gap in it must be of near-

microscopic dimensions in order to maximize the amount of

information which can be stored on a given portion of

tape. The gap, which determines the size of the magnetized

spot on the tape, generally measures no more than 50 to 100

microinches or millionths of an inch. (An average sheet of

paper is about 3,000 microinches thick.) The evidence

shows that for a given recording head to be able accurately

to read or retranslate information which has originally been

stored on a tape through use of a different recording head,

the gap dimensions in each head must be virtually identical,

with allowable deviations or tolerances of no more than

10 to 20 millionths of an inch for the larger heads, and

much less in smaller recording heads. Since numerous re-

A4

Appendia A

cording heads are used in a single computer disc file, it is of

vital importance to have all heads conform to prescribed

gap dimensions within a few millionths of an inch. Other-

wise some of the essential recording heads will not function

as the system requires.

For nearly a decade prior to the issuance of the Pelo-

schek patent the recorder-manufacturing industry was con-

cerned over the inability to produce glass-bonded heads

which would uniformly meet the precise specifications and

conform to the narrow tolerances that were essential to suc-

cessful performance and interchangeability. The Peloschek

patent addresses itself to this problem. Filed May 3, 1963,

and issued April 19, 1966, the patent states its objective

as follows:

‘Magnetic heads with very short gaps having lengths

between 1 and 20 microns are difficult to manufacture

since close tolerances are usually imposed on the length

of the gap and the non-magnetic material in the gap

must have a good resistance to detrition and must be

capable of being readily processed; in addition, the

process of manufacture should be as economical and

simple as possible. The gap material also must be as

homogeneous as possible. It is the primary object of

the invention to provide a method of manufacturing

magnetic heads with very short gap lengths which is

comparatively simple to perform while achieving close

tolerances for gap length.’’ (Emphasis added).

The claims which were sustained by the district court are:

“1. A method of manufacturing portions of mag-

netic heads composed of two magnetic circuit parts

consisting of sintered oxidic ferromagnetic material

A5

Appendix A

and having confronting gap surfaces with a gap there-

between filled with a nonmagnetic material bonding the

circuit parts together, comprising: placing spacing

members having a thickness equal to the desired gap

length at opposite ends of a first polished gap surface

of one circuit part, placing a corresponding polished

gap surface of a second circuit part on said spacing

members in confronting relationship with said first

surface thereby forming a gap between said surfaces,

placing a quantity of nonmagnetic material adjacent to

the gap, said nonmagnetic material having a melting

temperature below that of said ferromagnetic material,

and heating the resulting assembly to the melting tem-

perature of said nonmagnetic material, whereby said

nonmagnetic material melts, fills the gap by capillary

action, and bonds the circuit parts together.

‘‘2. A method according to claim 1, wherein said

nonmagnetic material is glass.

‘¢3. A method according to claim 1, wherein said

magnetic material is enamel.

‘‘4. A method according to claim 1, wherein pres-

sure is applied to the assembly during the heating

step.’’

Claims 6 and 8 describe the use of the process in making a

multiple of recording heads, and claims 10-11 omit the use

of spacing members in the process.

The claimed manufacturing process for the bonding of

the magnetic and nonmagnetic portions of the recording

heads may be summarized as: (1) presetting the gap or

space between two ferrite pieces at a desired length by

placing the surfaces of the ferrite pieces opposite each

other, inserting spacing members or shims of precise given

A6

Appendix A

dimensions between them, and bringing the ferrite surfaces

firmly together against the spacers or shims, which serve

to fix the gap length at a predetermined distance; (2) plac-

ing the nonmagnetic material (e. g., glass) adjacent to the

space between the ferrite pieces; (3) heating the assembly

to the melting puint of the nonmagnetic material (glass) ;

and (4) permitting the melted nonmagnetic material (glass)

to flow into and fill up the gap, with the result that the two

ferrite pieces are bonded together by nonmagnetic material

of a predetermined thickness. The flowing action is created

by capillarity, a principle of physics which is defined by

Webster’s New Collegiate Dictionary (7th ed.) as ‘‘The

action by which the surface of a liquid where it is in contact

with a solid is elevated or depressed depending on the

relative attraction of the molecules of the liquid for each

other and for those of the solid.’’

The district court, in a well-reasoned decision, held that

the subject matter of the Peloschek patent would not have

been obvious to one skilled in the art of glass bonding at the

time it was made, observing

‘*The crucial feature ... is the use of capillary action

to fill a preset gap of precise, reproducible dimensions.

Nowhere in the prior art ... is there any disclosure

which would make it clear to one skilled in the art that

such an application of capillary action would be suc-

cessful.’’

The district court refused to accord weight to National’s

showing that capillary action had been disclosed in patents

in the electronics and recording industry. ‘‘The prior art

indicates the widespread use of capillary action to fill min-

A7

Appendix A

ute gaps, but in none is the precise size of the gap of great

importance or predetermined.”’

Appellant claims that the capillary process was ‘‘ob-

vious’’ under 28 U.S.C. §103 and that the district court

erred in inferring from the evidence that the Peloschek

patent claimed a level of gap precision and uniformity

greater than that found in the prior art. We disagree, and

affirm the district court’s finding of validity.

Scope of Review

To resolve the issue whether the invention was obvious

within the meaning of 35 U.S.C. §103, we must examine the

scope and content of the prior art, the differences between

the prior art and the claims at issue, and the level of

ordinary skill in the pertinent art. Graham v. John Deere

Co., 383 U.S. 1, 17, 86 S.Ct. 684, 15 L.Ed.2d 545 (1966).

In doing so, we recognize that the ultimate issue of the

validity of a patent is a question of law, and that the

district court’s findings of fact will not be disturbed unless

clearly erroneous, except that where they are based on un-

disputed facts or documentary evidence, we may -ubstitute

our own inferences and conclusions for those of the district

judge. Maclaren v. B-I-W Group, Inc., 535 F.2d 1367, 1371

(2d Cir.), petition for cert. filed, —— U.S. ——, 97 S.Ct. 531,

50 L.Ed.2d —— (1976).

1. The Supreme Court also made it clear in Graham that long-felt

need in th industry and commercial success may also be considered,

383 U.S. at 35-36, 86 S.Ct. 684, although these “criteria are of sec-

ondary i rtance,” see Julie Research Laboratories, Inc. v. Guide-

line Inst. Inc., 501 F.2d 1131, 1135 (2d Cir. 1974).

A8

Appendix A

The Prior Art

Prior art processes for the manufacture of magnetic

recording heads were aimed principally at the discovery or

development of a manufacturing process which would pro-

duce uniformity in the non-magnetic gap lengths within

the tolerances or permitted ranges of deviation that are

essential to the proper functioning of recording heads.

Another aim was to insure that the non-magnetic material

used to fill the gap would not suffer from irregularities,

such as bubbles or other defects that would impair the

magnetic effectiveness of the ferrite pieces or core. The

prior art history, as disclosed in a series of patents issued

during the period 1954 to 1962, is one of repeated efforts

to solve these problems, which were for the most part un-

successful. Although some improvements were achieved in

the quality of the recording heads produced, the processes

generally resulted in low yields of acceptable heads, ranging

from 5% to 50%.

The earliest of the patents for manufacture of magnetic

recording heads introduced at trial was No. 2,919,312, issued

to Georg Rosenberger, et al., on December 29, 1959, on an

application filed March 16, 1954. It claimed a process of

manufacturing such heads with a ‘‘limited and well defined

very narrow working gap,’’ through the cementing of non-

magnetic filler material between the ferrite pieces. In 1956,

seven years prior to the filing of the Peloschek patent,

Simon Duinker and Jules Bos filed a patent application

entitled ‘‘Glass Gap Spacer for Magnetic Heads.’’ This

application, for which patent No. 3,024,318 (Duinker ’318)

was issued in 1962, accurately disclosed the state of the art

AQ

Appendix A

of manufacturing magnetic recording heads at the time.

The patent substituted a glass foil material in place of

other gap materials. In discussing ‘‘the requirements to

be satisfied by the width of the gap,’” the application

stated that ‘‘in the present state of the art with respect to

magnetic recordings, these requirements have become com-

paratively exacting ard the disadvantages attendant on

the use of such [foil spacing plates] during manufac-

ture are becoming increasingly marked.’’ Duinker 318,

by its own terms, sought to achieve the ‘‘correct gap

width’’ by placing a thin glass foil between the ferrite sur-

faces, heating the assembly, and applying pressure to bond

the ferrite and the glass, forming the gap. This process

became known colloquially as the ‘‘sandwich’’ technique,

as distinguished from Rosenberger, which simply used

cement.

In patent No. 3,094,772 (Duinker ’772), entitled ‘‘ Method

of Producing Magnetic Heads with Accurately Predeter-

mined Gap Heights,’’ Duinker once again sought to attain

a ‘‘well-defined’’ gap through revision of the technique

employed in ’318. He criticized the prior art on the grounds

that ‘‘the gap height . . . cannot be determined within

narrow limits’’ and stated ‘‘[i]t is also difficult if not im-

possible to produce small gap widths.’’ Essentially Duinker

‘772 claimed that it improved the accuracy of the gap

lengths through use of more accurately placed and finished

ferrite pieces.

2. In the various reports and patent applications, the term “gap

width,” “gap length,” and “gap dimensions” are used interchangeably

to describe the measurement of the distance between the two ferrite

(magnetic material) pieces, which is filled with a glass bonding ma-

terial (non-magnetic ).

Al0

Appendix A

In 1963 patent No. 3,079,470, for which application had

been made in 1959, was issued to Marvin Camras of the

Armour Research Foundation of the Illinois Institute of

Technology. The object of this process, as with its pred-

ecessors, was to construct a magnetic recording head hav-

ing ‘‘a very precise stable gap structure capable of main-

taining precise gap dimensions.’’ This time, the inventor

introduced a low melting point gap material and proposed

the use of an ‘‘evaporated film’’ as a preliminary gap

spacer in the process. The bonding procedure under this

patent continued to employ a sandwich-like pressure of the

heated gap materials to the ferrite.

In 1959 Duinker, still trying to find a way of solving

the problem of producing uniform gaps of non-magnetic

material, applied for a patent which further refined but

failed to depart from the sandwich technique. Duinker now

proposed to add ‘‘shims’’ or spacers made of mica to help

attain a ‘‘correct gap length.’’ In discussing the disadvan-

tages of the prior art, the application, for which patent

No. 3,117,367 was issued on January 14, 1964, stated that

‘*the adjustment of the gap length to the correct value is

not possible when the glass flows away.’ However, the

spacers were largely ineffective in achieving their objective

because the glass foil inserted between the faces of the

ferrite pieces was thicker than the shims so that when heat

and pressure were applied, the gap length was sometimes

3. Duinker’s objective of finding a process for achieving ac-

curate gap dimensions is further evidenced by a report he authored

shortly after applying for Duinker '367. In “Durable High-Resolu-

tion Ferrite Transducer Heads Employing Bonding Glass Spacers,”

he stated that for extremely small gap lengths “mica spacers are

necessary to ensure predetermined values.”

All

Appendix A

altered by the presence of glass between the ferrite and the

spacers or by the movement of the spacers.

A patent issued to Robert Pfost of the Ampex Corpora-

tion on November 8, 1966, on an application filed April 17,

1961, sought a process for the manufacture of ‘‘ferrite core

heads having accurate gap dimensions.’’ It described the

prior art techuiques as ‘‘tedious, time-consuming, and un-

economical because [the heads] must be manufactured in-

dividually to provide proper gap dimensions.’’ The claimed

process in this patent consisted essentially of placing spacer

strips on one of the ferrite surfaces, a layer of glass on the

other surface, and joining them together under high tem-

perature and pressure.

Finally, in an application filed in July, 1962, less than

a year prior to the filing of the Peloschek patent, James S.

Hanson, an employee of I.B.M., claimed the invention of a

process capable of producing a ‘‘more predictable gap,”’

and ‘‘permitting manufacture of gaps which are uniform

throughout the entire dimension thereof.’’ Hanson’s pat-

ent, No. 3,217,305, sought to improve the distribution of

the glass bonding material within the gap by employing

grooves in the ferrite surface. His basic process, like those

of his predecessors, was the sandwich technique.

Thus the picture of the art of manufacturing magnetic

recording heads prior to Peloschek is one in which, although

there were some advancements, each of the processes im-

mediately preceding Peloschek employed variations on a

method which bonded the magnetic and non-magnetic mate-

rials through the use of heat and application of pressure in

a sandwich configuration, with several of the methods using

A12

Appendix A

spacers and shims in an effort to set the desired gap size.

Each patent criticized the prior art as unable to attain the

reproducibility of uniformly accurate gap dimensions.

None of these prior art processes, moreover, was able

uniformly to meet the stringent gap-length tolerances re-

quired by manufacturers of magnetic recording heads.

Due to the higher pressures used in the sandwich method

the ferrite gap surfaces moved toward one another, result-

ing in variations in the gap. Although spacers or shims

were used in an effort to hold the ferrite faces apart, the

spacers could not uniformly control the gap length because

ihe glass foil inserted between the ferrite faces was thicker

than the spacers and the pressure applied to -he ferrite

pieces varied. As a result, viscous glass would sometimes

enter between the spacers and the ferrite pieces or the

spacers would move outward rather than remain in place,

causing unacceptable variations in the gap length.

The Peloschek patent differs significantly from these

prior art processes used to manufacture recording heads.

First, the Peloschek patent places the glass bonding mate-

rial outside of the pre-set gap rather than between the

pieces of ferrite. Second, it departs from the use of

pressure to accomplish bonding* and relies instead upon the

force of capillarity, an element previously unused in the

art of manufacturing magnetic recording heads. Addi-

tionally, undisputed testimony by plaintiff’s expert witness

and by the co-inventor of the Peloschek process established

4. The only pressure used by Peloschek is slight pressure de-

signed solely to hold the spacers in place as distinguished from the

high pressure used by prior art process to bond the glass to the ferrite

faces. In Peloschek the bonding is achieved exclusively by capillarity.

Al3

Appendix A

that, for the first time, yields of 90% accurate gap dimen-

sions were obtained in an economically feasible production

process, as compared to only 5% to 50% under prior art

processes,

As might be expected of one challenging the validity of

a patent on grounds of obviousness under §103, National

seeks to broaden the scope of the prior art beyond processes

for the manufacture of recording heads to those using the

principle of capillarity for other manufacturing purposes,

such as to cause molten metal or liquid epoxy cement to

flow into random irregular spaces or into voids between

metal parts held in contact with one another. National

contends that these processes show that the use of capillar-

ity was predictable and obvious to one ordinarily skilled in

the art of manufacturing recording heads.

Whether these latter processes, which do not involve use

of glass or ferrite and are not aimed at creating minute non-

magnetic gaps of precise, predetermined size, are pertinent

prior art for present purposes is extremely doubtful. How-

ever, we need not resolve that issue for the reason that even

if these processes are considered to be prior art, the proof

is overwhelming that they do not suggest to one ordinarily

skilled in the development of processes for the manufac-

ture of magnetic recording heads that capillarity might be

used in combination with existing processes as a means of

producing very minute gap dimensions within the narrow

tolerances demanded by the trade. The patent issued to

Grant (No. 2,500,748), for instance, is heavily relied on by

National because it claims the use of capillary action to

form non-magnetic gaps in a magnetic structure. Despite

Al4

Appendix A

the superficial similarity of Grant to Peloschek, however,

the differences between the two patents make it readily

apparent that the capillarity concept would not have been

apparent to one searching for a means of filling a pre-set

gap of precise, very minute, dimensions.

Grant was merely concerned with filling random metal

voids with epoxy or metal, not with near-microscopic manu-

facture of exactly reproducible gap lengths of fixed dimen-

sions, with only a few millionths of an inch variance. In-

deed, in Grant there is no such thing as pre-fixed spacing

or an effort to create a predetermined gap, much less one

of specific dimensions. Moreover, the prior art (Zinke,

‘*Technologie der Glas Verschurelzungen’’) taught that

molten glass was unsuitable for capillary action because

it tended to remain at the area of application and not to

flow into narrow interstices. The apparent inappropriate-

ness of capillary action as a means of solving the problem

faced by Peloschek and his predecessors is further evi-

denced by the fact that, although Grant was issued in 1947,

and numerous persons skilled in the art of recording head

manufacture, including Duinker, had sought over a period

of more than ten years to solve the problem of creating

reproducible minute non-magnetic gaps of precise pre-

determined size, there is no evidence that any attempt was

made to use capillarity.

DISCUSSION

As we recently said in Timely Products Corporation v.

Arron, 523 F.2d 288, 294 (2d Cir. 1975):

‘*We can conceive of no better way to determine

whether an invention would have been obvious to per-

I

Al5

Appendix A

sons of ordinary skill in the art at the time than to

see what such persons actually did or failed to do

when they were confronted with the problem in the

course of their work. If the evidence shows that a

number of skilled technicians actually attempted, over

a substantial period, to solve the specific problem

which the invention overcame and failed to do so, not-

withstanding the availability of all the necessary ma-

terials, it is difficult to see how a court could conclude

that the invention was ‘obvious’ to such persons at the

time.’’

In Timely Products we found that ‘‘no such evidence

exists.’’ Here, in contrast, the evidence clearly demon-

strates that the industry’s search for a process which would

accurately reproduce minute gap dimensions had been the

subject of continuing experimentation for nearly a decade,

and that the object was successfully accomplished only

when Peloschek abandoned the sandwich techniques in

favor of the use of capillarity. Moreover, in contrast to

Macla:en v. B-I-W Group, Inc., supra, this innovation

was rot foreshadowed by any of the preceding patents for

the manufacture of recording heads.

Accordingly, we conclude that the Peloschek patent is

significantly different from the prior art and represents a

distinct advancement in the level of skill in the art. The

district court’s conclusion that the Peloschek claims were

not obvious is therefore correct. Moreover, it is consistent

with the terms of 35 U.S.C. §103 and the cases interpreting

its provisions. Even assuming that patents disclosing capil-

lary action, such as Grant, were deemed part of the perti-

nent prior art, so that the Peloschek patent would represent

Al6

Appendix A

a combination of existing elements rather than a pure inno-

vation,® the invention would still satisfy the ‘‘rigorous’’

standards of §103. Lemelson v. Topper Corp., 450 F.2d 845,

848 (2d Cir. 1971); Maclaren v. B-I-W Group, Inc., supra.

The existence of an important problem in the art which

has remained unsolved for a long period, despite continued

efforts and a series of refinements of the art, until a new

combination of concepts produces a solution, is evidence

that the combination was not obvious. Shaw v. E. B. &

A. C. Whiting Co., 417 F.2d 1097, 1104 (2d Cir. 1969), cert.

denied, 397 U.S. 1076, 90 S.Ct. 1518, 25 L.Ed.2d 811 (1970).

This case falls under the rule that

‘‘fi]f those skilled in the art are working in a given

field and have failed after repeated efforts to discover

a particular new and useful improvement, the person

who first makes the discovery does more than make the

obvious improvement which would suggest itself to a

mechanic skilled in the art, and is entitled to protection

as an inventor.’’ McCullough Tool v. Well Surveys,

Inc., 343 F.2d 381, 399 (10th Cir. 1965), cert. denied,

383 U.S. 933, 86 S.Ct. 1061, 15 L.Ed.2d 851 (1966).

See also A. E. Staley Manufacturing Co. v. Harvest Brand,

Inc., 452 F.2d 735, 738 (10th Cir. 1971), cert. denied, 406 U.S.

974, 92 S.Ct. 2415, 32 L.Ed.2d 674 (1972).

The cases upon which appellant relies are clearly dis-

tinguishable. In Anderson’s Black Rock, Inc. v. Pavement

Salvage Co., Inc., 396 U.S. 57, 60, 90 S.Ct. 305, 24 L.Ed.2d

5. In Reiner v. I. Leon Co., 285 F.2d 501, 503 (2d Cir. 1960),

Learned Hand wrote that, “It is idle to say that combinations oi old

elements cannot be inventions; substantially every invention is for

such a ‘combination’: that is to say, it consists of former elements in

a new assemblage.”

Al7

Appendia A

258 (1969), the Supreme Court rejected a combination of

old elements to solve a problem in ‘‘blacktop’’ paving

processes on the grounds that the combination was ‘‘not

critical or essential’’ to curing the problem and did not

produce a ‘‘new or different function.’? The Court rested

its recent decision in Sakraida v. Ag Pro, Inc., 425 U.S. 273,

96 S.Ct. 1532, 47 L.Ed.2d 784 (1976), on this same finding

with respect to a barn-cleaning combination patent. In con-

trast to those cases, the evidence in the present case is un-

rebutted that the Peloschek patent produced a result unob-

tainable with the prior processes. For the first time a proc-

ess functioned to produce high yields of accurate gap dimen-

sions, curing a problem in the art.

In Dann vy. Johnston, 425 U.S. 219, 96 S.Ct. 1393, 47

L.Ed.2d 692 (1976), the Court found that the gap between

the prior art and the claimed invention in systems used to

record a breakdown of banking customers’ transactions by

the nature of the transaction was not great enough to jus-

tify patentability of the respondent’s system because it

failed to meet the non-obviousness standard. There, all

systems sorted out the transactions, albeit by slightly dif-

ferent methods. In the present case, on the other hand,

the gap between the prior art and the Peloschek patent is

enormous—the difference between success and failure. In

lieu of an unsuccessful re-refinement of an existing process,

Peloschek reveals a flash of brillance which found a solu-

tion, however simple, by departing from the norm. It is

this type of advancement that has traditionally been

rewarded with patent rights, and to deny those rights here

A18

Appendix A

might unjustifiably deter industry members from seeking

to invest, innovate and experiment.®

In its most favorable light, National’s evidence merely

shows that the elements of the Peloschek patent existed in

the prior art of manufacturing electronic and magnetic

devices. We have consistently held that such a showing

alone is inadequate to demonstrate obviousness when the

combination of those pre-existing elements results in novel,

unanticipated or long-sought results. See Koppers Co.,

Inc., v. S &€ S Corrugated Paper Machinery Co., Inc., 517

F.2d 1182, 1188 (2d Cir. 1975) ; Carter-Wallace v. Otte, 474

F.2d 529, 539-40 (2d Cir. 1972), cert. denied, 412 U.S. 929,

93 S.Ct. 2753, 37 L.Ed.2d 156 (1973) ; Reimer v. I. Leon Co.,

285 F.2d 501, 503 (2d Cir. 1960).

The judgment of the district court is therefore affirmed.

6. Defendant’s reliance on Dow v. Halliburton, 324 U.S. 320,

65 S.Ct. 647, 89 L.Ed. 973 (1944), a case predating the 1952 revision

of $103, is similarly misplaced. In that case the Supreme Court re-

jected a patent which claimed protection of the addition of an inhibit-

ing agent to acid used in a previously known process for disintegrating

limestone in order to attain more crude oil in drilling operations while

protecting the metal pipes from corrosion. The Court upheld the

lower court finding of invalidity because both the acid process and the

use of an inhibiting agent in cleaning the pipes were already in use in

the industry. The Court stated that the fact that inhibitors had not

been previously used in the process for drilling was inadequate, “Es-

pecially . . . since there is no evidence of anyone trying unsuccessfully

to inhibit hydrochloric acid for such purposes.” In the present case

the evidence is overwhelming that the industry had been consistently

trying to gain precisely predetermined gaps without success.

A1g

Appendix A

EXHIBIT A

DrawIneG oF Parts oF

PeLoscHEK Macnetic Recorpine Heap,

Suown 1n Biock Form,

BerorE BonpDinG AND SLICING

CROSS - SLICES

Saas

GLASS ROD /_ 2 ena flere amen 2

f

C-BAR- : GAP

q | MEMBER

GAP rae GLASS ROD

SPACER MEMBER \/\cenar -WISE

I-@AR SLICE

Van GRaaFEILAND, Circuit Judge, dissenting:

Reduced to its bare bones, the ‘‘invention’’, for which

appellees have been granted a 17-year monopoly, consists of

filling a narrow space between two pieces of metal with a

melted non-magnetic material such as glass through capil-

lary action. The majority say this was conceived in a

‘‘flash of brilliance’’. I find it to be simply an adaptation

of a physical process familiar to every embrionic schoolboy

scientist who has watched his blotter absorb ink.’ At the

very least, I agree with the District Court’s finding that

1. The schoolboy scientist, were he willing to spend five minutes

on research,-would have learned that capillarity works most effectively

in narrow spaces. See, e.g., J. Bikerman, Surface Chemistry 361

(1958).

A20

Appendix A

‘‘the prior art indicates the widespread use of capillary

action to fill minute gaps.’”

The importance which my colleagues attach to the fact

that the gap in this case is preset escapes me completely.

Every gap between two intentionally placed objects is pre-

set. The use of shims to determine the width of the setting

was less than novel and was clearly part of the prior art.*

Of course, for capillarity to operate, the liquid involved

must be of a type which ‘‘wets’’ the material which sur-

rounds it, in order that the molecules of the liquid cling

together on the face of the material and pull the liquid with

it. However, the prior art clearly showed that molten glass

‘‘wets’’ ferrite,* so that capillary action was an obvious

and expected result of a combination of the two.°

2. Earlier patents disclosing the use of capillarity included

German patent No. 10546, used in manufacturing magnetic recording

heads, the Grant patent, No. 2,500,748, the DeJean patent, No.

3,304,358, the Feinberg patent, No. 3,341,939 in the magnetics field

and the Reichenbaum patent, No. 3,029,505, in the electronics field.

[A] patent claiming a device that has already been put to use, albeit

in a different manner, is invalid; in order to be valid over the prior

art, it must claim not novel use, but novel conception.” Beckman

Instruments, Inc. v. Chemtronics, Inc., 439 F.2d 1369, 1375 (5th

i ee denied, 400 U.S. 956, 91 S.Ct. 353, 27 L.Ed.2d 264

3. Duinker, No. 3,117,367.

4. Duinker, No. 3,094,772 and Pfost No. 3,283,396.

5. Despite the majority’s reference to Zinke, as authoritive prior

art, one hour’s research in the library would have taught the inventors

that, at a temperature of 1,000 degrees, the differences in the mobili-

ties of different glasses are very large, see J. Bikerman, supra, note 1,

at 152, and that, although glass is a “slow motion” liquid, it has flow

properties on an extended time scale similar to those of ordinary

liquids. See G. Jones, Glass 8 (1956). Moreover, the Hill patent,

No. 3,065,571, filed for in 1957, clearly utilized the capillarity of

molten glass in the manufacture of electrical discharge devices and

electrical contacts. In any event, respondent’s patent does not limit

its claims to molten glass, claim No. 1 specifying simply the use of

a “non-magnetic material”.

A21

Appendia A

I do not read the record below to indicate that the capil-

lary process was the culmination of years of research aimed

at solving a pressing problem. There was no crying in-

dustrial demand for the process, either prior to the alleged

invention or within a reasonable time thereafter. As the

District Court stated, secondary indicia of nonobviousness

were meager. Proof that, between 1954 and 1969, four pat-

ent applications were filed for the manufacture of magnetic

heads to be used in the infant field of tape recorders and

computers falls far short of establishing the decade of

‘continuing experimentation’’ which my brothers say took

place and does not give rise to the inference of invention.

Paramount Publix Corp. v. American Tri-Ergon Corp., 294

U.S. 464, 476, 55 S.Ct. 449, 79 L.Ed. 997 (1935). Even as-

suming the existence of a long-felt want and the failure of

others to meet that want, this is relevant only as a secondary

test for obviousness and does not create patentability where

invention is lacking. Anderson’s-Black Rock, Inc. v. Pave-

ment Salvage Co., 396 U.S. 57, 61, 90 S.Ct. 305, 24 L.Ed.2d

258 (1969) ; Hadfield v. Ryan Equipment Co., 456 F.2d 1218,

1221 (8th Cir. 1972). According to the testimony of Matthijs

Vrolijks, one of the inventors, a committee was formed in

1960 or 1961 at N.V. Philips to ‘‘optimize’’ the Duinker

procedure by improving its productive yield. Within a

matter of months, this result was achieved by using the

well-recognized capillary process.

In applying the §103 test for obviousness, one should

picture the inventors working in their shop with the prior

art references hanging on the walls around them. Esso

Research & Engwmeering Co. v. Kahn & Co., 379 F.Supp.

A22

Appendix A

205, 211 (D. Conn. 1974), aff’d per curiam on the opinion

below, 513 F.2d 1341 (2d Cir. 1975). On the wall directly

before them would be inscribed the long-known and well-

understood physical yrinciples of ecapillarity which, like

Boyle’s Law and Dalton’s Law in Esso Research, supra,

the inventors must be regarded as knowing. On the walls

to their left would be the patents utilizing the capillary fill

process, including German patent, No. 10546, used in man-

ufacturing magnetic recording heads, the Grant patent,

No. 2,500,748,° the DeJean patent, No. 3,304,358, the Fein-

berg patent, No. 3,341,939 in the closely related magnetics

field and the Reichenbaum patent, No. 3,029,505 in the elec-

tronics field. Also on that wall would be the readily

available learning concerning the flowing properties of

molten glass, the Duinker patent, No. 3,094,772, and the

Pfost patent, No. 3,283,396, showing that molten glass will

wet ferrite, and the Hill patent, No. 3,065,571 showing the

use of capillarity for the insertion of molten glass in the

gaps of electrical discharge devices. On their right would

be the Duinker patent, No. 3,117,367, showing the use of

shims or spacers to preset the gap into which capillarity

would draw the molten glass.

A glance around the room would disclose ‘‘all the ele-

ments of [Vrolijks’] device, both individually and in com-

bination’’. Esso Research & Engineering Co. v. Kahn

& Co., supra, 513 F.2d at 1341. His invention did not push

back the frontiers of scientific knowledge, Great Atlantic &

6. The District Court described Grant in the following language:

- In plain English, the patent discloses a structure “corisisting of

two magnetic parts separated by a minute permanent non-mag-

netic gap, which also bonds the two together, created by flowing

non-magnetic material between the two parts by capillary action.

A23

Appendix A

Pacific Tea Co. v. Supermarket Equipment Corp., 340 U.S.

147, 154-55, 71 S.Ct. 127, 95 L.Ed. 162 (1950) (Douglas, /.,

concurring), but merely utilized the existing fund of public

knowledge for a new and obvious purpose. Dow Chemical

Co. v. Halliburton Oil Well Cementing Co., 324 U.S. 320,

326-28, 65 S.Ct. 647, 89 L.Ed. 973 (1945). I believe that the

private monopoly granted herein is ‘‘at odds with the in-

herent free nature of disclosed ideas’’ and has been too

freely given. Graham v. John Deere Co. of Kansas City,

383 U.S. 1, 9, 86 S.Ct. 684, 689, 15 L.Ed.2d 545 (1966).

I would reverse.

A24

Appendix B

UNITED STATES DISTRICT COURT

S. D. New York

—e ee

U. S. Puimips Corporation,

Plaintiff,

v.

Nationan Micronetics, Inc., and

Nep W. BuvoyMastTER,

Defendants,

Vv.

Nortu American Puriuips Corporation, and

N. V. Pumps GLoEILAMPENFABRIEKEN,

Counter-Defendants.

No. 71 Civ. 921.

Jan. 27, 1976.

i

OPINION

Warp, District Judge.

This is an action alleging infringement of U. S. Patent

No. 3,024,318 to Duinker et al. for a ‘‘Glass Gap Spacer for

Magnetic Heads”’ (hereinafter the ‘‘ Duinker patent’’) and

U.S. Patent No. 3,246,383 to Peloschek et al. for a ‘‘ Method

of Manufacturing Magnetic Heads with Bonding Gap—

A25

Appendic B

Filling Materials’ (hereinafter the ‘‘Peloschek patent’’).

For the reasons hereinafter stated, the Court holds the

Duinker patent invalid and the Peloschek patent valid and

infringed.

I. The Parties, Jurisdiction and Venue

Plaintiff U. S. Philips Corporation (hereinafter ‘‘Phil-

ips’’) is a Delaware corporation with its principal place of

business in New York City whose primary business is licens-

ing patents. It owns the rights to the two patents in suit

through assignment from N. V. Philips Gloeilampenfab-

rieken (hereinafter ‘‘N.V. Philips’’), whose employees de-

veloped the inventions which are the subject of the patents.

Defendant National Microneties Inc. (hereinafter ‘‘ Mi-

cronetics’’) is a New York corporation with its principal

place of business at West Hurley, New York. It is in the

business of manufacturing glass bonded ferrite cores for

use in magnetic recording heads. Defendant Ned W. Buoy-

master is one of the founders and President of Micronetics.

He resides in Woodstock, New York.

This Court has jurisdiction of the parties and the sub-

ject matter of this action and venue is properly laid in this

district.

II. The Pleadings

The complaint filed on March 2, 1971 originally charged

defendants with infringement of three patents owned by

plaintiff. Prior to trial, plaintiff withdrew the infringe-

ment claim relating to one of these patents. As to the in-

fringement of the two remaining patents, plaintiff seeks a

A26

Appendix B

declaratory judgment, an injunction and damages. The

defendants, by their answer, deny infringement and chal-

lenge the validity of both patents on the grounds of obvi-

ousiness and indefiniteness. In addition, defendants have

counterclaimed against plaintiff and additional defendants

on the counterclaim, N. V. Philips and North American

Philips Corporation, for patent misuse and violation of the

antitrust laws. The counterclaims were severed and stayed

pending the outcome of the patent infringement action

which was tried to the Court.

Ill. Background

Magnetic recording heads are devices used to record

(‘‘write’’) signals representing sound or information on a

moving magnetic medium such as a tape, belt, or dise or to

pick up (‘‘read’’) such recorded signals. A magnetic re-

cording head consists of a nearly closed ring of magnetic

material with a minute non-magnetic gap around which ring

a coil of wire is wrapped. The ring and gap structure com-

prise the core of the head which is the focus of this litiga-

tion. An electric current, when passed through the head,

will create a small magnetized spot on the magnetic medium

opposite the gap. This spot represents the recorded in-

formation. As the medium moves, successive, discrete

spots will be magnetized. The smaller the spots and the

closer they are spaced, the more information can be stored

in the least amount of magnetic medium. This may be re-

ferred to as ‘‘high resolution’’ or ‘‘high bit density.’’ The

achievement of increasingly higher resolution or bit den-

sity depends to a great extent on various qualities of the

recording head, including the size of the gap and the ma-

A27

Appendix B

terial of which the head is made. The shorter the gap, the

smaller the magnetized spot. Ideally, the head material

has low electrical conductivity to minimize the losses; that

is, the least amount of electrical current introduced into the

head will be lost to the generation of heat.

Magnetic recording is an old art but did not become com-

mercially significant until World War II. Although tue

device has many applications, the principal use 0: voncern

in this litigation has been in computers.

IV. The Duinker Patent

The Duinker patent, issued March 6, 1962 on an applica-

tion filed September 11, 1956, concerns a magnetic recording

head having a core formed of sintered ferro-magnetic oxide

material, or ferrite,’ with a glass filled gap. The patent

addresses itself to the problem of chipping of the gap edges

in heads composed of ferrite. It teaches that if the co-

efficients of expansion (hereinafter ‘‘CTE’s’’)? of the glass

and ferrite are matched to a degree closer than that nec-

essary merely to assure a good bond, chipping of the ferrite

edges in use will be eliminated.

The patent contains four claims each of which is as-

serted by plaintiff as infringed by defendants’ products.

1. Ferrites are non-metal magnetic materials composed of zinc

oxide, iron oxide, etc., mixed in powdered form and sg sengeny and

heated at high temperatures so that the separate particles fuse to form

one solid body.

2. Sometimes referred to as the coefficient of thermal expansion,

this term refers to the expansibility of a material upon change in

temperature, measured as the change in length for a given tempera-

ture change divided by the total length.

A28

Appendia B

These claims are set out in full in the margin.* The first

and second claims differ only in that the former indicates

the CTE’s of the ferrite core and the glass gap-filler are

substantially equal at the termperature of use whereas the

latter indicates the CTE’s are substantially equal in the

entire temperature range from the temperature of use to the

softening point of the glass. The third and fourth claims

add to the first and second a glass fillet, a small additional

portion of glass within the loop formed by the ferrite parts.

3. The claims of the Duinker patent are:

1. An annular magnetic recorder head for recording or re-

producing magnetic recordings comprising at least two circuit

parts of sintered ferromagnetic oxide material with an effective

gap between said circuit parts, said gap being filled entirely with

a glass material mechanically joining and bonding to each other

said circuit parts, said glass material being the sole bonding agent

between said circuit parts, said glass material having a coefficient

of expansion substantially equal to the coefficient of expansion

of said sintered ferromagnetic oxide material at the temperature

at which the magnetic recorder head is used.

2. An annular magnetic recorder head for recording or re-

producing magnetic recordings comprising at least two circuit

parts of sintered ferromagnetic oxide material with an effective

gap between said circuit parts, said gap being filled entirely with

a glass material mechanically joining and bonding to each other

said circuit parts, said glass material being the sole bonding agent

between said circuit parts, said glass material having a softening

temperature, said glass material also having a coefficient of ex-

pansion substantially equal to the coefficient of expansion of said

sintered ferromagnetic oxide material throughout the entire tem-

perature range lying between the temperature at which the mag-

netic recorder head is used and the temperature at which the glass

begins to soften.

3. An annular magnetic recorder head for recording or re-

producing magnetic recordings comprising at least two circuit

parts of sintered ferromagnetic oxide material having inner and

outer surfaces with an effective gap between said circuit parts,

(footnote continued on next page)

A29

Appendia B

Defendant Micronetics has admitted that its products

contain every feature of the claims with the exception of

the matched CTE’s. Inasmuch as the equality of the CTE’s

is a limitation of each claim, defendants assert they do not

infringe. Additionally, they assert that the patent is in-

valid because the term ‘‘substantially equal’’ is indefinite

and because matching of CTE’s is obvious in view of the

prior art.

A. Infringement

To determine whether an accused device infringes a pat-

ent, resort mnst be had to the claims. Infringement is

said gap being filled entirely with a glass material mechanically

joining and bonding to each other said circuit parts, said glass

material being the sole bonding agent between said circuit parts,

said glass material and said circuit parts forming a closed annu-

lar space, part of said glass material extending into said space in

contact with the inner surfaces of said ferromagnetic oxide ma-

terial, said glass material having a coefficient of expansion sub-

stantially equal to the coefficient of expansion of said ferromag-

netic oxide material at the temperature at which the magnetic

recorder head is used.

4. An annular magnetic recorder head for recording or re-

producing magnetic recordings comprising at least two circuit

parts of sintered ferromagnetic oxide material having inner and

outer surfaces with an effective gap between said circuit parts,

said gap being filled entirely with a glass material mechanically

joining and bonding to each other said circuit parts, said glass

material being the sole bonding agent between said circuit parts,

said glass material having a softening temperature, said glass

material and said circuit parts forming a closed annular space,

part of said glass material extending into said space in contact

with the inner surfaces of said ferromagnetic oxide material,

said glass material having a coefficient of expansion substantially

equal to the coefficient of expansion of said ferromagnetic oxide

material throughout the entire temperature range lying between

the temperature at which the magnetic recorder is used and the

temperature at which the glass begins to soften.

A30

Appendix B

made out when the accused product falls clearly within the

claim. Graver Tank & Mfg. Co. v. Linde Air Products Co.,

339 U.S. 605, 607, 70 S.Ct. 854, 94 L.Ed. 1097 (1950).

Each of the claims specifies that the CTE’s of the glass

and the ferrite should be substantially equal. Turning to

the Micronetics products, the following table indicates the

CTE’s of the glasses and ferrites at the temperature of

use and the percentages by which they differ in different

cores:

Glass Glass Ferrite Ferrite %o

Part No. Type CTE Type CTE Diff.

35058 2109 7.4X 10° LM211 7.2X 10° 2.7

30239 2107 7.4X 10° M211 7.3X10° 2.7

30152 1303 7.7X 10° M211 7.3X10° 5.5

30331 1303 7.7X 10° LM211 7.2X10° 6.5

30134, 1303 7.7X 10° M210 7.1X 10° 8.5

30245,

30156

30005 1201 6.3 X 10°° M210 7.1X10° 11.3

30037 2205 6.0 X 10° M210 7.1X10° 15.5

30085 2205 6.0 X 10° M211 7.3X10° 178

30064 2104 5.1 X 10° M211 7.3X10° 30.1

As can be seen, the variation in the CTE’s ranges from

2.7% to 30.1%. Plaintiff asserts that all of these products

infringe claim one with respect to the CTE limitation.

To determine whether Micronetics products infringe the

patent, we must construe the limitation in the claims that

the CTE’s of the glass and ferrite be ‘‘substantially

equal.”’

In order to construe this term, resort must be had to the

specifications for it is axiomatic that claims are to be con-

strued in light of the specifications. United States v.

Adams, 383 U.S. 39, 49, 86 S.Ct. 708, 15 L.Ed.2d 572 (1966) ;

Schriber-Schroth Co. v. Cleveland Trust Co., 311 U.S. 211,

A3l

Appendix B

217, 61 S.Ct. 235, 85 L.Ed. 132 (1940). The specifications

contain the following description of the invention:

‘When the coefficients of expansion are equal to one

another at the temperature at which the magnetic

recorder head is used (with a tolerance of 5%), the

tensions occurring in the glass are small thus prevent-

ing the production of strains in the ferrite which would

also tend to facilitate chipping of the ferrite edges of

the gap by the mechanical forces exerted by the opera-

tion of the magnetic recording earrier;....’’

The interpretation that must be placed on this language

is that to practice the inven ion one must make the CTE’s

as equal as possible with a maximum allowable difference

of 5%. The examples of suitable matches given by the in-

ventor are all well within this 5% limit. ‘hus, the term

substantially equal, as used in the claims, should be given

the meaning ‘‘matched within 5%.’’

Turning to the accused devices, only two Microneties

heads fall clearly within the range claimed by the patent,

parts numbered 35058 and 30239 and could be said to in-

fringe.

Plaintiff argues that all the cores manufactured by

Micronetics infringe under the doctrine of equivalents.

Courts have recognized that infringement may be made out

even though the accused device does not duplicate every

literal detail of the patented invention. The test of in-

fringement under the doctrine of equivalents is whether

the device ‘‘ ‘performs substantially the same function in

substantially the same way to obtain the same result.’ ’’

Graver Tank & Mfg. Co. v. Linde Air Products Co., supra,

339 U.S. at 608, 70 S.Ct. at 856. The range of equivalents to

A32

Appendiz B

&

be accorded a patent varies with the circumstances of the

particular case. A primary, or pioneer, invention may be

accorded a broad range of equivalents whereas an improve-

ment patent is not entitiled to such a broad range of protec-

tion. 4A. Deller, Deller’s Walker on Patents, §232, at 82-83

(2d ed. 1965). Basically, the inquiry is whether the inven-

tive principle has been appropriated and the changes made

insubstantial.

The sole claimed invention in Duinker is the discovery

that ferrite gap edge-chipping may be avoided by matching

the CTE’s of the glass and ferrite within a tolerance of

5% at the temperature of use and 10% over the range from

room temperature to the softening point of the glass. The

prior art concerning magnetic recording heads is crowded

and the claimed invention is narrow. To construe the range

of equivalents to be accorded the Duinker patent to em-

brace all of the Micronetics cores would render the term

‘‘substantially equal’? meaningless and “vould have the

effect of reading it out of the patent altogether. This term

is an express limitation pertaining to the inventive step and

implies, in effect, that anything beyond the limitation will

not produce equivalent results. Inasmuch as the inventor

has declared combinations, such as those found in the ac-

cused devices, not equivalent, we cannot treat them other-

wise to find infringement. See Dow Chemical Co. v.

Skinner, 197 F.2d 807, 810 (6th Cir.), cert. denied, 344

U.S. 856, 73 S.Ct. 94, 97 L.Ed. 664 (1952); Preformed Line

Products Co. v. Fanner Manufacturing Co., 225 F.Supp. 762,

774 (N.D. Ohio 1962), aff’d, 328 F.2d 265 (6th Cir.), cert.

denied, 379 U.S. 846, 85 S.Ct. 56, 13 L.Ed.2d 51 (1964).

A33

Appendix B

Nor can a change in the match of the CTE’s be consid-

ered an insubstantial alteration in the practice of the inven-

tion. The whole inventive principle in the patent lies in

the match of the CTE’s. When the CTE’s are not matched

in the manner specified the inventive principle is not ap-

propriated. Thus, although the accused devices accomplish

the same result; that is, they are commercially acceptable

cores free from undue chipping, they do so in a different

manner. First, as plaintiff’s expert testified, improve-

ments in ferrites have to some extent reduced the chipping

problem to which Duinker is directed. Second, Micronetics

devices follow a different teaching. Micronetics cores are

produced according to the principle that glass is strongest

under compression and, thus, ferrite of a higher CTE than

the glass is used. This is nowhere taught by Duinker.

Therefore, it cannot be said that all the Micronetics

cores infringe plaintiff’s patent under the doctrine of equiv-

alents. The Court has examined plaintiff’s other arguments

in support of a finding of infringement and finds them to be

without merit. Accordingly, the Court finds that only

Microneties parts numbered 35058 and 30239 infringe the

Duinker patent.

B. Indefiniteness

Defendants argue that the Duinker patent is invalid

because it lacks the definiteness of description required by

35 U.S.C. §112. They contend that the term ‘‘substantially

equal,’’ as used to describe the degree of CTE match, is

vague and indefinite. Further, they contend that there is no

such thing as a CTE at the temperature of use and that this

A34

Appendix B

meaningless relationship compounds the indefiniteness of

the claims and specifications.

Although the statute requires an exact description of

the invention, it does not require description in terms of

exact measurement. All that is required is that the claims,

when read in light of the specifications, inform those skilled

in the art how to practice the invention and how infringe-

ment may be avoided. Libel Process Co. v. Minnesota &

Ontario Paper Co., 261 U.S. 45, 65, 43 S.Ct. 322, 67 L.Ed. 523

(1923); Georgia-Pacific Corp. v. United States Plywood

Corp., 258 F.2d 124, 136 (2d Cir.), cert. denied, 358 U.S.

884, 79 S.Ct. 124, 3 L.Ed.2d 112 (1958). Whether a given

claim has the requisite definiteness depends upon the facts

in each ease. Georgia-Pacific Corp. v. United States Ply-

wood Corp., supra.

Applying these standards to the facts of the instant

case, the Court finds that the specifications and claims are

sufficiently definite to meet the statutory standard of 35

U.S.C. §112. There are many instances where claims with

adverbs such as ‘‘substantially’’ have been upheld against

a challenge of indefiniteness. See, e. g., Eibel Process Co.

v. Minnesota & Ontario Paper Co., supra; Borg-Warner

Corp. v. Paragon Gear Works, Inc., 355 F.2d 400 (1st Cir.

1965), petition for cert. dismissed, 384 U.S. 935, 86 S.Ct.

1461, 16 L.Ed.2d 536 (1966); Arnold Pipe Rentals Co. v.

Engineering Enterprises, Inc., 350 F.2d 885 (5th Cir. 1965) ;

H. H. Robertson Co. v. Klauer Mfg. Co., 98 F.2d 150 (8th

Cir. 1938). Thus, such terminology is certainly not in-

definite as a matter of law.

Defendants rely on expert testimony, arguing that

neither side’s expert could precisely define what was meant

A35

Appendia B

by ‘‘substantially equal’’ as used in the claims. However,

the Court does not view the testimony of either expert as

persuasive on this particular point. Rather, the patent

speaks for itself.

The Court finds that the term ‘‘substantially equal’’

as used in each claim of the patent is not so indefinite as

to render the patent invalid. '

Nor does the discussion of matching CTE’s at the tem-

perature of use, when added to the imprecision of the term

‘‘substantially equal’’ render the patent invalid under §112.

The premise underlying Duinker’s invention is that edge-

chipping results from the heat generated by the movement

of the recording head over the magnetic medium. Defend-

ants’ expert testified that the CTE at any given tempera-

ture was meaningless, that one needed a range between one

temperature and another. Although the patent speaks of

the ‘‘temperature of use,’’ or room temperature, it is clear

from the patent as a whole, particularly the examples

given, that this refers to the range of temperature between

0°C and 40°C. Thus, the claims dealing with the CTE’s

of the glass and ferrite at the temperature of use are not

meaningless.

C. Obviousness

The principal question raised with respect to the validity

of the Duinker patent is whether the invention would have

been obvious at the time it was made to a person having

ordinary skill in the art. 35 U.S.C. §103. Resolution of

the question requires application of the procedure set out in

Graham v. John Deere Co., 383 U.S. 1, 86 S.Ct. 684, 15

L.Ed.2d 545 (1966). That is:

A36

Appendia B

Under §103, the scope and content of the prior art are

to be determined; differences between the prior art

and the claims at issue are to be ascertained; and the

level of ordinary skill in the pertinent art resolved.

Against this background, the obviousness or nonob-

vieusness of the subject matter is determined. Such

secondary considerations as commercial success, long

felt but unsolved needs, failure of others, ete., might

be utilized to give light to the circumstances surround-

ing the origin of the subject matter sought to be pat-

ented. As indicia of obviousness or nonobviousness,

these inquiries may have relevancy.

Id. at 17-18, 86 S.Ct. at 694.

The parties agree that this is the standard to be applied.

They disagree, however, on what constitutes the pertinent

prior art and on the conclusion this Court should reach in

applying the agreed standard to the prior art.

1. Scope and Content of the Prior Art

Defendants cite as pertinent prior art U.S. Patent Nos.

2,071,196 to Burger et al.; 2,167,482 to Hull et al.; 2,371,627

to Kingston; an article by Chynoweth, dated August, 1955

and a German publication entitiled ‘‘The Methods of Fus-

ing Ceramics to Glass and Metal,’’ dated 1942. They argue

that these authorities fully disclose that which Duinker

claimed as his invention. Plaintiff, on the other hand, con-

tends that each of these authorities is merely concerned

with achieving good bonding and that none discoses in-

formation which would make it obvious to one skilled in the

art to match CTE’s of the glass and ferrite to an extent

closer than that needed to achieve good bonding in order to

A387

Appendia B

alleviate ferrite gap edge chipping. A closer examination

of each of the cited items is necessary.

The Burger Patent

This patent, issued in 1937, concerns glass-to-metal-seals

in general. It is directed at resolving the problem posed by

failure of the seal in use, although a good seal may have

been initially created. According to the patent, differences

in the CTE’s of the glass and metal introduce strains in

the seal which result in fissures or cracks in the glass. In

the language of the patent,

In the prior seals, the glass and metal members, even

though they may have had substantially the same co-

efficients of expansion at room temperature, have had

different thermal expansions at the different tempera-

tures involved in the process of making the seals and

these members have undergone individual expansions

and contractions in size during the heating and cooling

cycles. Consequently, such seals have involved strains

introduced at the higher temperatures which were car-

ried through to the lower temperatures. Even though

these residual strains may not have been greater than

the elastic limit or breaking strength of the glass,

depending upon the amount and kind of metal em-

ployed, at the time the seal was made, there has always

been the possibility that the seal might eventually fail

due to aging of the glass and the reduction of its elastic

limit over a period of time, and many failures may be

attributed to this cause. In view of these considera-

tions, it is evident that none of the seals of the prior

art has been entirely free from strain over the whole

temperature range between room temperature and the

softening temperature of the glass.

A38

Appendix B

Even though this strain is not sufficient to produce

eracks or fissures at the time the seal is made, the

glass is weakened at the joint and the seal is much more

liable to failure, when the tube is operated at elevated

temperatures, or even when it is idle and at room

temperature. It is apparent that when an electric dis-

charge tube of which the seal constitutes a part of the

envelope is heated during operation, the temperature

reached may be one of those temperatures at which

there is a substantial difference in the respective

thermal expansion coefficients of the glass and metal.

This difference of expansion may serve to accentuate

the residual strain or perhaps introduce additional

strains.

As a solution to the problem of strain in glass-to-

metal seals, the patent discloses that the CTE’s of the

glass and metal should ‘‘substantially coincide’’ at room

temperature and through the temperature range to the

softening point of the glass. The patent discloses a metal

alloy and a glass having this characteristic. The graph

which illustrates the invention shows the CTE’s of these

materials as matched to a degree of equality even closer

than that disclosed by Duinker.

The Hull Patent

This patent, issued in 1939, on an application filed in

1936, is for an improvement in the glass-to-metal seal

disclosed by Burger. It discloses new metal alloys and

glasses which when combined in a seal will have ‘‘substan-

tially corresponding’? CTE’s. The CTE graphs which il-

lustrate the invention show a CTE match approaching iden-

tity and closer than that disclosed by Duinker.

A39

Appendiz B

The Kingston Patent

Issued in 1945, on an application filed in 1939, this pat-

ent relates to metal alloys and glasses for use in forming

vacuum tight seals over long periods and over a wide tem-

perature range. It likewise discloses the importance of

matching the CTE’s of the glass and metal up to the soften-

ing point of the glass.

The Chynoweth Article

Entitled ‘‘Ferrite Heads for Recording in the Megacycle

Range,’’ this article appeared in the August, 1955 issue of

Tele-Tech & Electronic Industries. The article reports on

research conducted with ferrite recording heads. Specifical-

ly, it concerns the wearing quality of ferrite heads with

short gap lengths used in contact with a magnetic medium.

According to the article, the gap edges chipped in use and

this poor wearing quality represented a serious deficiency in

ferrite heads. The article then discloses that:

A technique which holds some promise, [for decreas-

ing this gap edge erosion] is to fill in the gap with a

glaze material which is non-magnetic, bonds well to the

gap faces and is hard.

According to the article such a head was constructed and

the glazing technique was successful in increasing the

head’s resistance to wear.

The German Article

This article, concerning the methods of fusing ceramics

to glass and metal, appeared in the German publication

A40

Appendiz B

Keramische Rundschau in 1942. The article discloses that

when bonding glass and ceramic, ‘‘no stresses will exist

between the two materials only if the expansion curves

have exactly the same course.’’ Since this ideal is not

practically attainable, the author suggests using a ceramic

with a higher CTE than the glass.

2. Differences Between the Prior Art

and the Claimed Invention

From the above recitation, it is apparent that all the

individual elements claimed in the Duinker patent are

shown by the prior art. However, no single item of the

prior art shows the whole Duinker invention.

Defendants contend that the German article when read

with the Chynoweth article fully discloses the Duinker in-

vention. Plaintiff argues, on the other hand, that the

German article was published before the development of

ferrites and, thus, does not apply to ferrites. Further,

plaintiff argues that Chynoweth does not disclose a gap

completely filled with glass but merely glazed gap surfaces.

Above all, plaintiff argues that none of the prior art refer-

ences discloses that ferrite head edge-chipping is caused

by unequal CTE’s and that the solution lies in matching

the CTE’s to a degree closer than that necessary to attain

a good bond.

Comparing the prior art with the claimed invention, as

the Court must, the Court finds the following differences

between the Duinker patent and the prior art: The patents

to Burger, Hull, and Kingston disclose the importance of

matching CTE’s very closely to obtain strain-free glass-to-

metal bonds. However, none of these patents deal with

A41

Appendia B

ferrites. Although they disclose that failure of the bond

will result from use, if CTE’s are not matched to substantial

equality, in practical application the failure results in

cracking of the glass in glass-to-metal bonds. Thus, they

do not read exactly on the problem faced by Duinker.

The German article is concerned with bonding glass to

ceramics, generally. It discloses that ideally CTE’s should

be equally matched to achieve a good bond. It is true that

the article was written prior to the development of ferrites;

however, it is undisputed that ferrite is a ceramic. Given

this agreed fact and the article’s concern with ceramics in

general, the German article reads directly on the Duinker

invention insofar as it indicates the desirability of matching

CTE’s in glass-to-ceramiec bonds. It does not, however,

disclose the more particular app.ication of this principle

claimed by Duinker.

The Chynoweth arti le does disclose glazing in the gap

as a solution for improving the wearing problems in ferrite

core gap edges. It is silent, however, on the CTE’s of the

materials used.

Plaintiff seeks to make much of these differences. As

noted above, no one item of prior art fully discloses the

Duinker invention. However, the proper standard to be

applied is not whether the prior art fully discloses the

precise invention claimed, but rather whether, in light of

this prior art, the claimed Duinker invention would be ob-

vious to one skilled in the art. See, e. g., Koppers Co. v.

S & S Corrugated Paper Machinery Co., 517 F.2d 1182

(2d Cir. 1975); Julie Research Laboratories, Inc. v. Guild-

line Instruments, Inc., 501 F.2d 1131 (2d Cir. 1974) ; Formal

A42

Appendix B

Fashions, Inc. v. Braiman Bows, Inc., 369 F.2d 536 (2d Cir.

1966).

Applying this standard to the facts of this case, the

Court holds that the Duinker patent is invalid for obvious-

ness in light of the prior art. First, Burger fully discloses

that in glass-to-metal bonds failure occurs in use, even

though a good bond is achieved in manufacture, if the

CTE’s of the glass and metal are not nearly equal, not

only at room temperature but throughout the entire tem-

perature range from room temperature through the soften-

ing point of the glass. Burger fully discloses that the heat

generated in use elevates the temperature sufficiently to

result in failure of the bond unless the CTE’s are so

matched. The prior art in making glass-to-metal bonds

demonstrates that it was well known that CTE’s should be

closely matched to achieve good wearing qualities in use.

Plaintiff argues that the problems posed by glass-to-

metal bonds are not analogous to those encountered by

Duinker and these items should not be considered prior art.

Plaintiff stresses that in glass-to-metal bonding the concern

is with the glass whereas the glass is not a problem in

bonding glass to ferrite.

Prior to the introduction of ferrites, magnetic recording

heads were constructed of metal, often metal laminations.

In the Duinker patent file wrapper, the Court finds at least

one instance where glass was bonded to the metal pole

pieces of such a metal head in order to join the two pole

pieces. Thus, it appears that bonding glass to the metal

heads was known in the magnetic recording head field.

Also, in light of the German article it would have been

obvious that there were no significant differences with

2 evactaat. ——

A43

Appendix B

regard to the role of CTE’s between ceramic-to-glass

bonds and metal-to-glass bonds.

The patent examiner considered glass-to-metal bonds

to be prior art in considering the patentability of the

Duinker invention. The Court is constrained to likewise

consider it. The only testimony presented at trial on the

question is found in the conflicting opinions of the experts

who testified on behalf of the respective parties. The Court

is unpersuaded that the problem of ferrite gap edge chip-

ping is completely different from the problem of glass

breakage. Both are caused by strains in the bond. In

glass-to-metal bonds the metal is not likely to crack or chip,

therefore, it is the glass which suffers the effect of the

strains. The inherent granularity of ferrite was well known

and it seems obvious that the strains known to be in the

bond would cause the ferrite to chip.

Thus, when one considers the disclosures of Burger to-

gether with the teaching of the German article, it would be

obvious that making the CTE’s substantially equal would

alleviate chipping of the ferrite. When these references

are read together with the Chynoweth article, the invention

claimed by Duinker becomes an obvious solution to the

problem of making ferrite cores for recording heads with

good wearing qualities.

Plaintiff relies on the presumption of validity accorded

a patent. In the Second Circuit the presumption of validity

is weakened when the patent examiner did not consider all

of the pertinent prior art. See, e. g., Julie Research Lab-

oratories, Inc. v. Guildlime Instruments, Inc., supra;

Formal Fashions, Inc. v. Braiman Bows, Inc., supra. In

the instant case, the patent examiner did not consider the

A44

Appendix B

Burger patent or, most important, the German article.

Thus, the presumption of validity to be accorded the

Duinker patent is considerably weakened.

In addition, plaintiff relies on the secondary considera-

tions enunciated in Graham v. John Deere Co., supra as

indicia of the non-obviousness of the Duinker invention.

Because of the danger of slipping into hindsight and read-

ing into the prior art the teachings of the Duinker inven-

tion, the Court has considered the evidence of commercial

success and long-felt but unsolved need. This inquiry has

served only to reinforce the Court’s judgment that the

Duinker patent is obvious in view of the prior art.

First, plaintiff introduced no evidence of contemporane-

ous commercial success. The only evidence introduced rel-

evant to this issue concerns the use at the time of the action

of the Duinker invention by Ferroxcube Corporation, a

wholly-owned subsidiary of North American Philips Cor-

poration which manufactures glass bonded ferrite recording

heads, and Micronetics. However, none of the cores pro-

duced by Ferroxcube utilize the Duinker invention, accord-

ing to the Court’s construction of the patent, and the

majority of Micronetics’ product, also, fall outside the

invention.

Likewise, there is no evidence of any long-felt want.

Ferrites were first introduced around 1950 and Duinker

first filed for his patent in 1955. The evidence indicates that

this was a crowded art with considerable activity during

this period. The witnesses who testified painted a picture

of a milieu where as soon as one group of researchers dis-

covered a problem others set about solving it. Cf., Julie

amen ist nal AD

A45

Appendiz B

Research Laboratories, Inc. v. Guildline Instruments, Inc.,

supra; Indiana General Corp. v. Krystinel Corp., 421 F.2d

1023, 1030-31 (2d Cir.), cert. denied, 398 U.S. 928, 90 S.Ct.

1820, 26 L.Ed.2d 91 (1970).

In sum, the Court holds that the Duinker patent is in-

valid for obviousness in light of the prior art. There may

be some novelty in the Duinker invention but novelty is in-

sufficient to meet the non-obvious requirement of §103 when

the novel element would have been obvious to a person

skilled in the art. See Lemelson v. Topper Corp., 450 F.2d

845 (2d Cir. 1971), cert. denied, 405 U.S. 989, 92 S.Ct. 1253,

31 L.Ed.2d 456 (1972).

Next, the Court turns to the Peloschek patent.

V. The Peloschek Patent

The Peloschek patent, issued April 19, 1966 on an appli-

cation filed May 3, 1963, is directed to a process for man-

ufacturing bonded magnetic recording heads of a kind

described by Duinker. The patent addresses itself to the

problems of manufacturing magnetic recording heads with

very short gap lengths, simply, and achieving close gap

length tolerances. The patent teaches that if the gap is pre-

set by placing the two magnetic pole pieces in a confronting

relationship with the interposition of a shim, or spacing

member, equal to the desired gap length and the glass is

placed adjacent to the pre-set gap and the assembly is

heated, the glass will flow into the gap by capillary action

4. “Close tolerance” refers to the small degree of deviation from

the desired gap length or the slight “margin of error.” Inasmuch as

the patent speaks of gap lengths of 1 to 20 microns, the acceptable

deviation, or tolerance, is very slight.

A46

Appendix B

and fill it, thus, producing a core with the desired gap

length.

The patent contains fifteen claims. With the exception

of claims 7, 12 and 13, all are assertedly infringed by de-

fendants. The claims in issue are set out in full in the

margin.” The several claims differ from each other only

in minor respects. Claim 10 is the broadest claim and

comprises a method whereby the two confronting circuit

parts or pole pieces are separated by a space equal to the

desired gap length, the non-magnetic material is placed ad-

jacent to the gap, and the assembly is heated to the melting

3.

1. A method of manufacturing portions of magnetic heads

composed of two magnetic circuit parts consisting of sintered

oxidic ferromagnetic material and having confronting gap sur-

faces with a gap therebetween filled with a nonmagnetic material

bonding the circuit parts together, comprising: placing spacing

members having a thickness equal to the desired gap length at

opposite ends of a first polished gap surface of one circuit part,

placing a corresponding polished gap surface of a second circuit

part on said spacing members in confronting relationship with

said first surfaces, thereby forming a gap between said surfaces,

placing a quantity of nonmagnetic material adjacent to the gap,

said nonmagnetic material having a melting temperature below

that of said ferromagnetic material, and heating the resulting

~ assembly to the melting temperature of said nonmagnetic ma-

terial, whereby said nonmagnetic material melts, fills the gap by

capillary action, and bonds the circuit parts together.

2. A method according to claim 1, wherein said nonmagnetic

material is glass.

3. A method according to claim 1, wherein said nonmagnetic

material is enamel.

4. A method according to claim 1, wherein pressure is ap-

plied to the asseiably during the heating step.

5. A method of manufacturing portions of magnetic heads

composed of two circuit parts consisting of sintered oxidic ferro-

(footnote continued on next page)

adz

Appendix B

temperature of the glass so that the gap is filled by capillary

action. Claim 1 differs from claim 10 only in that it recites

that the unfilled gap is pre-fixed by the placing of a spac-

ing member or shim between the confrgnting pole pieces.

Claim 5 adds to claim 1 the step of thermally etching the

circuit parts before they are placed in a confronting rela-

tionship. Claim 6 is like claim 1 with the addition that the

finished assembly is cut perpendicularly to form a plurality

of cores. The remaining claims variously recite that the

non-magnetic material is either glass or enamel or that

pressure is applied during heating.

Defendant Micronetics admits that its products contain

every feature of the claims with the exception of the gap

magnetic material and having gap surfaces with a gap therebe-

tween filled with a nonmagnetic material bonding the circuit

parts together, comprising: heating the two circuit parts, cooling

the two circuit parts, placing spacing members having a thickness

equal to the desired gap length at opposite ends of the first pol-

ished gap surface of one circuit part, placing a corresponding

polished gap surface of a second circuit part on said spacing

members in confronting relationship with said first surface there-

by forming a gap between said surfaces, placing a quantity of

nonmagnetic material adjacent to the gap, said nonmagnetic ma-

terial having a melting temperature below that of said ferro-

magnetic material, and heating the resulting assembly to the

melting temperature of said nonmagnetic material, whereby said

nonmagnetic material melts, fills the gap by capillary action, and

bonds the circuit parts together.

6. A method of manufacturing portions of magnetic heads

composed of two circuit parts consisting of sintered oxidic ferro-

magnetic material and having gap surfaces with a gap therebe-

tween filled with a nonmagnetic material bonding the circuit

parts together, comprising: placing spacing members having a

thickness equal to the desired gap length at opposite ends of at

least two polished gap surfaces of one circuit part, placing the

corresponding polished gap surfaces of a second circuit part on

said spacing members in confronting relationship with the gap

(footnote continued on next page)

A48

Appendia B

space or spacer being equal to the desired gap length and

the thermal etching step. Inasmuch as the equality of the

shim and the desired gap length is a limitation of each claim,

defendants assert they do not infringe. Additionally, they

assert that the patent is invalid because the term ‘‘equal to”’

is indefinite and because the claimed invention is obvious

in view of the prior art.

A. Indefiniteness

As with the Duinker patent, defendants argue that the

Peloschek patent is invalid because it lacks the definiteness

of description required by 35 U.S.C. §112. They contend

surfaces of said one circuit part thereby forming gaps between

said surfaces, placing a quantity of nonmagnetic material adja-

cent to the gaps, said nonmagnetic material having a melting

temperature below that of said ferromagnetic material, and heat-

ing the resulting assembly to the melting temperature of said

nonmagnetic material, whereby said nonmagnetic material melts,

fills the gaps by capillary action, and bonds the circuit parts to-

gether, cooling the assembly, and then cutting the assembly

mutually perpendicular axes to form a plurality of head portions.

* * *

8. A method according to claim 6, wherein said nonmagnetic

material is glass.

9. A method according to claim 6, wherein said nonmagnetic

material is enamel.

10. A method of manufacturing portions of magnetic heads

composed of two circuit parts consisting of sintered oxidic ferro-

magnetic material and having confronting gap surfaces with a

gap therebetween filled with a nonmagnetic material bonding the

circuit parts together, comprising: placing a polished gap surface

of one circuit part in confronting relationship with a correspond-

ing polished gap surface of a second circuit part, said surfaces

being separated by a gap equal to the desired gap length, placing

a quantity of nonmagnetic material adjacent to the gap, said

nonmagnetic material having a melting temperature below that

(footnote continued on next page)

lute wok

ett ow

ee ee ee ee er Eo ee a at a

A49

Appendix B

that the term ‘‘equal to’’ as used to describe the relationship

between the spacer and the desired gap length is without

ascertainable meaning.

The Court finds that the specifications and claims are

sufficiently definite to meet the statutory standard. As

of said ferromagnetic material, and heating the resulting assembly

to the melting temperature of said nonmagnetic material, where-

by said nonmagnetic material melts, fills the gap by capillary

action, and bonds the circuit parts together.

11. A method according to claim 10, wherein said nonmag-

netic material is glass.

- 2! *@

14. A method of manufacturing portions of magnetic heads

composed of two circuit parts consisting of sintered oxidic ferro-

magnetic material and having confronting gap surfaces with a

gap therebetween filled with a nonmagnetic material bonding the

circuit parts together, comprising: heating the circuit parts, cool-

ing the circuit parts, placing a polished gap surface of one circuit

part in confronting elationship with a corresponding polished

gap surface of another circuit part, said surfaces being separated

by a gap equal to the desired gap length, placing a quantity of

nonmagnetic material adjacent to the gap, said nonmagnetic ma-

terial having a melting temperature below that of said ferromag-

netic material, and heating the resulting assembly to the melting

temperature of said nonmagnetic material, whereby said non-

magnetic material melts, fills the gap by capillary action, and

bonds the circuit parts together.

15. A method of manufacturing portions of magnetic heads

composed of two circuit parts consisting of sintered oxidic ferro-

magnetic material and having confronting gap surfaces with a

gap therebetween filled with a nonmagnetic material bonding the

circuit parts together, comprising: thermally etching the gap

surfaces of the two circuit parts, placing a polished gap surface

of one circuit part in confronting relationship with a correspond-

ing polished gap surface of another circuit part, said surfaces

being separated by a gap equal to the desired gap length, placing

a quantity of nonmagnetic material adjacent to the gap, said

nonmagnetic material having a melting temperature below that of

said ferromagnetic material, and heating the resulting assembly

to the melting temperature of said nonmagnetic material, whereby

and bonds the circuit parts together.

A50

Appendia B

already noted, the gap dimensions are exceedingly small

and absolute precision in measurement cannot ‘always \be

achieved. Just as a certain tolerance is acceptable in terms

of the final core, an equivalent tolerance should be per-

mitted with regard to the shim. The claims, when read with

the specifications more than adequately inform those skilled

in the art how to practice the invention and how to avoid

infringement.

B. Obviousness

As with the Duinker patent, the principal challenge

raised by defendants to the validity of the Peloschek patent

is that the invention would have been obvious at the time

it was made to a person having ordinary skill in the art.

Thus, it is necessary to examine the scope and content of

the prior art and the differences between the prior art and

the Peloschek claims.

1. Scope and Content of the Prior Art ™,

Defendants cite as pertinent prior art U.S. Patent Nos.

2,900,748 to Grant; 3,024,318 to Duinker et al.; 3,029,505 to

Reichenbaum ; 3,094,772 to Duinker; 3,117,367 to Duinker

et al.; 3,283,396 to Pfost; 3,304,358 to De Jean et al.;

3,341,939 to Feinberg et al.; 3,065,571 to Hill; German pat-

ent 10546; and two German articles. Defendants contend

that in light of this prior art the use of capillary action to

manufacture glass bonded ferrite cores would have been

obvious and represented merely routine engineering. Plain-

tiff, on the other hand, contends that all the cited prior art

which is relevant to the problem points toward the non-

eee =

A5d1

Appendix B

obviousness of the patented invention and that none shows

the capillary process in the recording head industry.

The Three Duinker Patents

Duinker ’318 is the patent here in suit and discussed

above. The method of manufacturing the invention dis-

closed by the patent consists of placing a glass foil which

exceeds in size the ultimately desired gap width by a few

percent between two confronting polished ferrite gap sur-

faces. This assembly is then heated to a temperature

within the softening range of the glass and pressure is

applied until the correct gap-width is reached. This can

be referred to as the ‘‘sandwich’’ technique. Relevant,

also, is a method of manufacturing the glass fillet consisting

of placing a glass rod inside the ferrite loop near the gap so

that during heating the glass spreads to form the fillet.

Duinker °722, issued June 25, 1963 on an application

filed June 26, 1957, discloses merely a further refinement

and expanded discussion of the manufacturing technique

disclosed in the first Duinker patent. Additionally, it in-

cludes the disclosure of slicing the ferrite glass assembly

to form a multiplicity of cores.

( Duinker ’367, issued January 14, 1964 on an application

filed June 15, 1959, discloses a further refinement of the

sandwich technique by the addition of shims or spacers,

‘‘the thickness of these spacers being substantially equal to

the finally desired gap lenth.’’ The description explains

that the spacers were intended to alleviate the problem of

glass flowing away in heads with a gap length of greater

than 10 microns. The function of the spacers is to fix the

A52

Appendia B

gap length. They are placed at the ends of the sheet of

glass and between the ferrite bars prior to the heating and

compression steps and are then ground away after cooking.

The Pfost Patent

This patent, issued November 8, 1966 on an application

filed April 17, 1961, exemplifies another variation of the

sandwich technique. The method disclosed consists of

depositing spacer strips on one ferrite surface and a thin

layer of glass on the other ferrite surface, placing the two

ferrite surfaces in a confronting relationship, and heating

the assembly to a temperature of 550-900 degrees centigrade

under high pressure. The patent, also, discloses heating

the ferrite blocks to a temperature of 600 degrees centigrade

prior to coating with either glass or spacer in order to

remove contaminants. Of significance to this litigation is

the disclosure in the specifications that at temperatures be-

tween 550-900 degrees centigrade, glass will wet the ferrite.

The Hul Patent

This patent, issued on November 27, 1962 on an applica-

tion filed October 10, 1957, concerns a composite material

of platinum alloy and glass for use in making glass-to-

metal seals. The parties are in dispute as to what this

patent discloses. Defendants contend that the patent dis-

closes that capillary action is a customary method for bond-

ing glass and metal. Plaintiff argues capillarity is dis-

cussed in general terms. The Court finds that capillary

action is discussed in general terms as the physical prin-

ciple which is the foundation for the invention. The patent

eo cl

Ad3

_ Appendia B

discloses that glass is a liquid and will behave as a liquid

insofar as capillary action is concerned. Thus, in order to

achieve a good glass-to-metal bond, the patent claims an

alloy which exhibits superior wetting action.

Prior Art Processes Utilizing the Principle

of Capillary Action

A group of defendants’ prior art references may be

conveniently categorized as illustrations of the use of capil-

lary action in connection with manufacturing processes with

materials other than glass and ferrite.

The patent to Reichenbaum, issued April 17, 1962 on an

application filed September 29, 1958, falls into this category.

It discloses the process of bonding a semiconductor to a

metal base, a heat sink, by means of flowing solder between

the two parts by capillary action. A small quantity of

solder is placed adjacent to the empty space between the

two materials and on melting flows into the space.

The patents to De Jean, Feinberg, and the German pat-

ent all disclose the process of manufacturing a laminated

magnetic core by flowing non-magnetic resins into the

minute space between the laminations by capillary action.

The German patent, in particular, is for manufacturing

metal laminated recording head cores.

The Grant patent, issued March 14, 1950 on an applica-

tion filed November 21, 1947, concerns a method for manu-

facturing magnetic structures consisting of two or more

magnetizable members separated by a non-magnetic gap.

According to the claims, the invention comprises:

A54

Appendia B

2. In a magnetic structure, a first magnetizable

member provided with a mortise, a second magnetizable

member having a projection thereon forming a tenon,

said two magnetizable members being interfitted to

form a mortise and tenon joint, a washer of low melt-

ing point non-magnetizable material brazed between

said members adjacent said joint, and a capillary film

of said non-magnetizable material brazed between con-

tiguous surfaces of said mortise and tenon, thereby

rigidly to connect said magnetizable members together

and to form therebetween a permanent non-magnetic

gap of fixed dimensions.

In plain English, the patent discloses a structure consisting

of two magnetic parts separated by a minute permanent

non-magnetic gap, which also bonds the two together, cre-

ated by flowing non-magnetic material between the two

parts by capillary action.

2. Differences Between the Prior Art

and the Claimed Invention

From the preceding recitation, it is apparent that no one

item of prior art discloses the whole of the Peloschek proc-

ess. Defendants contend, however, that the use of capillary

action to fill spaces was well known and that it was an ob-

vious solution to the problem of filling the non-magnetic

gap in ferrite recording head cores. They contend that

when the prior art disclosures concerning capillary action

are read together with the disclosures of the Duinker pat-

ents, Peloschek results.

The most apparent difference from the Duinker patents

process is that Duinker uses pressure to fill the gap rather

than capillary action. Consequently, Duinker places the

glass inside the gap rather than adjacent to it. However,

4 cote lea ri te all Ne :

A55

Appendix B

Duinker does disclose the use of shims to determine the

final gap length. Plaintiff makes much of the difference it

perceives between the use of the shims in connection with

setting the gap prior to the introduction of the glass in

Peloschek and the use of the shims to keep the ferrite slabs

apart during compression in Duinker. The Court finds

this to be a difference without substance. In both patents

the shims are equal or substantially equal to the ultimately

desired gap length, they are placed between the two ferrite

pieces to keep them a fixed distance apart.

Duinker, also, discloses that glass will wet ferrite. If

one looks at the diagram in Duinker ’772, one can clearly

see the miniscus formed by the glass fillet. Wetting action

of this sort is necessary for capillary action and the degree

of surface tension as indicated by the miniscus and the

wetting angle formed by the miniscus are crucial variables

in determining the extent of capillary flow.®

The Pfost patent, so far as is relevant Lore, does not

materially differ from the Duinker process. It, also, uses

pressure to fill the gap with glass and spacers to determine

the gap length. It does not speak to the use of capillary

action to fill the gap, except that it notes that glass will

wet ferrite at temperatures ranging from 550-900 degrees

centigrade. It discloses a preliminary step of heating the

ferrite ty a temperature of 600 degrees solely to eliminate

contaminants. However, this step cannot be equated with

the thermal etching step at significantly higher temperature

disclosed by Peloschek.

6. The formula for determining the extent of capillary flow is:

* h=2Tcos¢

r.p

where T = surface tension; ¢ = wetting angle; r = 1% the width

of the channel ; and p = the density of the liquid.

A56

Appendia B

The Hill patent does not speak to a process of manufac-

turing magnetic recording heads. The only relevance it has

to this litigation is its disclosure that glass is a liquid and

will behave in accordance with the principles of capillary

action.

The capillary action prior art, De Jean, Feinberg, and

the German patent, differ from the Peloschek invention in

that in each the precision and reproducibility of the gap

length is not critical. Rather, the spaces to be filled are

random. The substance of the Peloschek invention, in con-

trast, is directed at attaining reproducible minute gaps

within close tolerances.

The claims of the Grant patent seem to read most di-

rectly on the Peloschek method. The two distinguishing

features are the circular configuration of the magnetic

members and the apparent irrelevance of the size of the

gap. Although in Grant the space between the magnetic

members is fixed in size at the conclusion of the process,

there is no attempt to attain a predetermined gap size.

Thus, it is apparent that none of the prior art shows all

the elements of the Peloschek process. The differences be-

tween the Duinker ‘‘sandwich’’ process and the Peloschek

process are that the glass is moved from inside the gap

to just adjacent to it and that instead of only one ferrite

face being in contact with the shims both are. In the

former, pressure is used to force the glass to fill the gap

whereas in the latter capillary action does the job. The

prior art indicates the widespread use of capillary action

to fill minute gaps but in none is the precise size of the gap

of great importance or predetermined. The question, how-

' A57

Appendix B

ever, is not whether the precise invention is disclosed by the

prior art, for then there would be novelty, but rather

whether in light of the prior art the invention as a whole

would be obvious to one skilled in the art. Graham v. John

Deere & Co., supra; Koppers Co., Inc. v. S € S Corrugated

Paper Machinery Co., supra; Julie Research Laboratories,

Inc. v. Guildline Instruments, Inc., supra; Formal Fashwns,

Inc. v. Braiman Bows, Inc., supra.

In order to apply this standard, the level of skill in the

pertinent art must be ascertained. Plaintiff contends that

the pertinent art is that of magnetic recording, particularly

ferrite recording heads. Defendants, on the other hand,

contend that the pertinent art is the glass or glass and

ceramic bonding technology. The Court finds that the per-

tinent art is the glass and glass bonding art. The problem

to which the Peloschek patent is directed is that of manufac-

turing rather than high frequency recording technology.

The problems posed by developing an economical method

of manufacture were mechanical problems of working with

glass and bonding glass to ferrite. Recording head eff-

ciency jand design were not the immediate concern of the

Peloschek patent and the patent contains no disclosures

direeted toward improving ferrite recording head efficiency

and design. Accordingly, the most pertinent art to the

problem posed is that of glass bonding technology.

Although the question is a close one, the Court holds

that the Peloschek invention would not have been obvicus to

one skilled in the art at the time it was made. The crucial

feature, in the Court’s view, is the use of capillary action

to fill a preset gap of precise, reproducible dimensions. No-

where in the prior art references cited to the Court is there

A58

Appendi« B

any disclosure which would make it clear to one skilled in

the art that such an application of capillary action would

be successful. All of the prior art references disclose the

use of capillary action to fill random voids. In none were

the dimensions of the void of great importance. The

mechanical skill of the calling consists, then, in using

capillary action to fill voids the precise dimensions of which

are unimportant. Inasmuch as the primary concern of the

Peloschek invention is filling a gap whose precise dimen-

sions are significant, it cannot be said that Peloschek is

obvious within the standard of 35 U.S.C. §103.

Defendants had the burden of establishing their defense

of patent invalidity for obviousness. After reviewing all

the evidence, the Court concludes they have failed to sustain

their burden. It is easy to argue, as defendants do, with

the always perfect vision of hindsight that the Peloschek

invention is fully anticipated by the prior art. For ex-

ample, once one concludes that capillary action, as disclosed

by Grant, can be successfully applied, it is obvious to take

Duinker and merely move the glass outside the gap and

place the ferrite pole pieces in a confronting relationship.

However, the fact remains that the prior art does not

suggest that capillary action would successfully produce

gaps of precise predetermined size with reproducibility.

Indeed, the Grant patent was issued in 1950 and presumably

this prior art was available to Duinker and the others

who sought a method for manufacturing ferrite recording

heads. Nonetheless, approximately seven years passed

from the filing of Duinker’s original patent application to

the filing of Peloschek’s patent application. During that

period, the record discloses four patents for manufacturing

A59

Appendix B

glass bonded ferrite recording heads: the two later Duinker

patents and the Pfost patent discussed above and a patent

to M. Camras, U.S. Patent No. 3,079,470 filed December 21,

1959 and issued February 26, 1963, cited by the patent exam-

iner.* Each of these patents utilizes the ‘‘sandwich”’ proc-

ess of introducing the glass into the gap by pressure. None

suggests employing capillary action. Thus, as simple as the

invention now appears, the Court cannot conclude that it

was obvious to persons skilled in the art when the record

discloses that these others endeavored during the seven

year period to solve the problem unsuccessfully. As the

court in Timely Products Corp. v. Stamley Arron, 523 F.2d

288, 294 (2d Cir. 1975) said:

We can conceive of no better way to determine

whether an invention would have been obvious to per-

sons of ordinary skill in the art at the time than to see

what such persons actually did or failed to do when

they were confronted with the prob'em in the course

of their work. If the evidence shows that a number

of skilled technicians actually attempted, over a sub-

stantial period, to solve the specific problem which the

invention overcame and failed to do so, notwithstanding

the availability of all the necessary materials, it is dif-

7. In addition, plaintiff introduced two patents, cited by neither

the patent examiner nor the defendants, concerning methods of manu-

facturing ferrite recording heads. Patent No. 3,217,305 to Hanson,

issued November 19, 1965 on an application filed July 19, 1962, dis-

closes a slight variation of the sandwich process consisting of groov-

ing the ferrite faces. Patent No. 3,188,400 to Vilensky, issued June

18, 1965 on an application filed January 9, 1961, discloses a different

manufacturing method. It teaches the coating of the ferrite faces

with a glass and ferrite compound and, then, heating to fuse the two

te pieces. Including plaintiff's cited prior art, there are in fact

6 different patents in the trial record concerning ferrite head manufac-

ture prior to the Peloschek patent.

A60 A61

Appendia B Appendix B

ficult to see how a court could conclude that the inven-

Micronetics products, the following table indicates the

tion was ‘‘obvious’’ to such persons at the time.

relationship between the shim heights and the gap length

; , ae various Mi i rt

Admittedly, the evidence of the “secon dary” indicia desired by the customer for the various Microneties pa

. ? we bers:

of non-obviousness is meager. Plaintiff presented some arene

evidence which would tend to indicate that the Peloschek A B C m ~ 63 E

. ustrative

process has enjoyed a degree of contemporaneous commer- Shim Desired Gap liiustratwe Bonded Bar 1-Bar

cial success. For example, as will appear more fully below, Height Length Part No. No. No.

both Micronetics and Ferroxcube use the capillary process. .0029’’-.063” .0024”-.0036” 30124 30162

N. V. Phili h 1 pee . ‘ 114-118u’”8 80-115u’” 30093 30104 40003°

* / Ips, whose employees developed the invention, 114-118” 80-120u” 30316 30104 40003

also, makes some use of the process. There is, also, some ee ell roo ao pre -

testimony indicating that IBM made use of the process at 114-1180” 90-120u” 30005 30101 40003

least until 1969. In light of the record, the t t 115-1171” 85-115u” $0023 30107 40017

ary oe ee - 115-117” 90-1101” 30064 30107 40017

attached great weight to the proof offered of commercial 115-117” 90-120u” 30060 30103 40025

success. Nonetheless, the failure of other ski 158-164u” 130-160u” 30280 $0182 40074

; Ay Ser Se Seve. Copan WOE 542-5620” 450-550u” 30245 30309 40086

in the field has persuaded the Court to resolve any lingering (Write Gap)

doubt in favor of upholding the validity of the patent. ed .- yl 100-150u” $0245 0309 40086

Accordingly, the Court holds that the Peloschek patent (00 SGOa , 400-600u” 30156 30155 40037

is valid and non-obvious under $103. 60-64u” 45-65u” 35012 35021 45014 (C-Bar)

C. Infringement

As with the Duinker patent, the Court must look to the

claims of the Peloschek patent and deterraine whether the

Microneties process falls clearly within the claims in order

to decide whether Micronetics infringes the patent. Graver

Tank & Mfg. Co. v. Linde Air Products Co., supra, 339 U.S.

ut 607, 70 S.Ct. 854. Defendants contend only that the

Micronetics process does not include the thermal etching

step and shims ‘‘equal to’’ the desired gap length.

Each of the claims recites that the spacing members

‘fare equal to’’ the desired gap length. Turning to the

Column B in the table represents the gap length desired by

the customer. As can be seen, all of the specified customer

gap lengths are given as a range.

ment at these minute dimensions is not possible.

Precision of measure-

Thus,

there is always a certain tolerance, or permissible deviation,

from any precise numerical value.

Column A, all the Micronetics products fall within the

specified range or outside the range by a few micro-inches.

The only possible exception to this may be the ‘‘write gap”’

As ean be seen from

8. The symbol u” as used in the table stands for micro-inches.

9. The shims are deposited on the I-bar ferrite piece.

A62

Appendix B

of part number 30245 in which the upper range of the shim

height exceeds the upper range of the gap desired by 12

micro-inches. In light of the allowances which must be

made for the imprecision of measurement, the shim height

must be deemed equal to the desired gap length when it falls

within the customer's specifiea range or outside the range

by only a few micro-inches.

Defendants contend that the heighy of the shims exceeds

the desired gap length and that the shime are compressed

during the manufacturing process. Even if the Court could

agree with this contention, which it does not, it would still

be constrained to conclude that the Micronetics shims are

equal to the desired gap because they fall within or close to

the specified range. Accordingly, the Court holds that the

Micronetics manufacturing process infringes claims 1

through 4, 6, and 8 through 11 of the Peloschek patent.

Insofar as the ‘‘write gap’’ of part number 30245 may not

be deemed as falling literally within or close to the desired

gap length range, the Court holds that the deviation is so

insubstantial as to_be the equivalent of the Peloschek inven-

tion and thus infringes under the doctrine of equivalents.

Graver Tank & Mfg. Co. v. Linde Air Products Co., swpra.

Claims 5, 14 and 15 contain, as a further limitation, the

preliminary step of thermally etching the ferrite bars prior

to assembly. Thermal etching as used in the patent is the

process whereby the ferrite bars are heated to a tempera-

ture of between 800 and 1000 degrees centigrade for a period

of time and then allowed to cool producing ferrite grain

boundaries which are visible with the assistance of the prop-

er equipment. Defendants employ a preliminary ‘‘bake

——

A63

Appendix B

out’’ step for a combination of temperature and time which

is less than that which produces visible grain boundaries.

They contend that their ‘‘bake out”’ step is merely to re-

move contaminants and does not constitute thermal etching.

The Court finds that plaintiff has failed to sustain its

burden of proof of infringement of those claims which in-

clude the thermal etching step. One of the co-inventors

testified that thermal etching as used in the patent refers

to producing visible ferrite grain boundaries, Photographs

of Micronetics’ ferrites after the ‘‘bake out’ step were

introduced into evidence and they do not exhibit the grain

boundaries visible in thermally etched cores. Additionally,

the Pfost patent discloses a pre-heating step such as that

performed by Microneties for the purpose of removing con-

taminants. Accordingly, the Court concludes that the Mic-

ronetics process does not include the thermal etching step

and that claims 5, 14 and 15 of the Peloschek patent are not

infringed.

VI. Liability of Ned W. Buoymaster

Defendant Buoymaster is president of Micronetics and

one of the four founders of the corporation. Plaintiff con-

tends that Buoymaster actively induced the infringement

of the two patents in suit and is personally liable as an

infringer.

A corporate officer is generally not personally liable for

an infringement when he acts solely within his duties as

an officer and director. Powder Power Tool Corp. v. Powder

Actuated Tool Co., 230 F.2d 409, 414 (7th Cir. 1956);

Claude Neon Lights, Inc. v. American Neon Light Corp.,

A64

Appendix B

39 F.2d 548 (2d Cir. 1930) ; Upjohn Co. v. Italian Drugs Im-

porting Co., 190 F.Supp. 361 (S.D.N.Y. 1961).

However, where a corporate officer exceeds his ex-

ecutive duties and deliberately organizes a corporation

for the purpose of infringing a patent, or where he

otherwise acts as the moving, active, conscious force

behind an infringement, he may be held personally

liable. Upjohn Co. v. Italian Drugs Importimg Co.,

supra at 367.

See also, Marks v. Polaroid Corp., 237 F.2d 428, 435 (1st

Cir. 1956).

Buoymaster founded Micronetics, along with three

others, in April, 1969. The evidence establishes that the

corporation was formed to produce materials, including

ferrites, for use in highly technical electronics applications.

There is no evidence to suggest that Micronetics was

formed with the specific intent to manufacture glass-bonded

ferrite recording heads. Nonetheless, soon after the forma-

tion of the corporation, it entered the market for glass-

bonded ferrite cores.

Buoymaster is a large shareholder in Micronetics, al-

though by no means a majority shareholder, and serves on

the four man Board of Directors which manages the cor-

poration.

Plaintiff has failed to sustain its burden of proving that

Buoymaster acted in excess of his authority as an officer

and director of Micronetics. The evidence shows only that

Buoymaster was the chief administrative officer of the

corporation. As such he was involved in the business

aspects of corporate affairs and not in the technical produc-

A65

Appendix B

tion phase. He may have made the decision to offer for

sale glass-bonded ferrite heads but he was familiar with

the manufacturing process only in a general way. He in

no way directed or instigated the infringing method of

manufacture. Compare Marks v. Polaroid, supra; Dean

Rubber Mfg. Co. v. Killian, 106 F.2d 316, 320 (8th Cir. 1939),

cert. denied, 308 U.S. 624, 60 S.Ct. 380, 84 L.Ed. 521 (1940).

There is no evidence to suggest that Buoymaster willfully

participated in the infringement of plaintiff’s patent. Ac-

cordingly, the Court holds that Buoymaster is not personal-

ly liable for infringement.

VII. Conclusion

In sum, plaintiff is entitled to judgment declaring

Peloschek patent claims 1, 2, 3, 4, 6, 8, 9, 10 and 11 valid

and infringed, and claims 5, 14 and 15 valid but not in-

fringed. Additionally, plaintiff is entitled to a permanent

injunction prohibiting infringement of the Peloschek patent.

Defendants are entitled to a judgment declaring the Duin-

ker patent invalid. The stay of the counterclaims is vacated

and the parties are directed to proceed to the adjudication

of the counterclaims and the issue of damages.

The foregoing constitutes the findings of fact and con-

clusions of law of the Court for the purposes of Rule 52,

Fed.R.Civ.P.

Settle judgment on notice.

A66

Appendix C

Section 8, Clause 8. Patents and Copyrights

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 Discov-

eries;

Appendix D

§103. Conditions for Patentability; Non-Obvious

Subject Matter

A patent may not be obtained though the invention is

not identically disclosed or described as set forth in sec-

tion 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 or-

dinary skill in the art to which said subject matter pertains.

Patentability shall not be negatived by the manner in

which the invention was made. July 19, 1952, c. 950, §1,

66 Stat. 798.

§112. Specification

The specification shall contain a written description of

the invention, and of the manner and process of making and

using it, in such full, clear, concise, and exact terms as to

enable any person skilled in the art to which it pertains, or

with which it is most nearly connected, to make and use

A67

Appendia D

the same, and shall set forth the best mode contemplated

by the inventor of carrying out his invention.

The specification shall conclude with one or more claims

particularly pointing out and distinctly claiming the subject

matter which the applicant regards as his invention.

An element in a claim for a combination may be ex-

pressed as a means or step for performing a specified

function without the recital of structure, material, or acts in

support thereof, and such claim shall be construed to cover

the corresponding structure, material, or acts described in

the specification and equivalents thereof. July 19, 1952,

c. 950, §1, 66 Stat. 798.