Petition — Hughes Aircraft Co. v. Bell Telephone Laboratories, Inc.

——— rr ttst—‘i‘S;C~

77-1040 |

Supreme Court, U. S.

FILED

JAN 23 1978

MICHAEL RODAK, JR., CLERK

——— -

IN THE

Supreme Court of the United States

OCTOBER TERM, 1977

No. 77-

HUGHES AIRCRAFT COMPANY,

Petitioner,

V.

BELL TELEPHONE LABORATORIES, INCORPORATED,

Respondent.

PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS FOR THE

THIRD CIRCUIT

E. BARRETT PRETTYMAN, JR.

ALLEN R. SNYDER

ROYAL DANIEL

WALTER A. SMITH, JR.

815 Connecticut Avenue, N.W.

Washington, D.C. 20006

DUGALD S. MCDOUGALL

MELVIN M. GOLDENBERG

135 South LaSalle Street

Chicago, Illinois 60603

ROBERT THOMPSON

Hughes Aircraft Company

5150 West Century Boulevard

Los Angeles, California 90009

Attorneys for Petitioner

WILSON - EPES PRINTING Co., INC. - RE 7-6002 - WASHINGTON. D. C. 20001

TABLE OF CONTENTS

Page

OPINIONS BELOW ............. . iadiliieaaiadiihiatitiasied ateailiaals 1

JURISDICTION ............... On ae btiiciciiatiiel ail aisles 1

ON a ececetccctesecrccnnssncenssnmsstinctsiiilaiin 2

STATUTES INVOLVED ....................... va 2

EERE eae ee eT eR 3

REASONS FOR GRANTING THE WRIT .................... 6

Introduction -................. A ae eS ae Cn 6

1. The Circuit Court’s holding that reasonable dili-

gence may consist of work unrelated to reduc-

tion to practice conflicts with the rule in other

Circuits and with fundamental principles of

cea ee oe ee 8

2. The Circuit Court’s decision relying on noncon-

temporaneous evidence from inventors to prove

“reasonable diligence” conflicts with the rule in

other Circuits and violates public policy —.......... 17

A. There is a conflict in the Circuits 0... 17

B. Under such facts as are present here, public

policy requires a rule prohibiting any consid-

eration of inventors’ noncontemporaneous

evidence as proof of “reasonable diligence” __.. 20

ee anemenesnamnaiommidammnsieeuiagatiaitn 26

ii

TABLE OF AUTHORITIES

CASES: Page

Abbott v. Shepherd, 1385 F.2d 769 (D.C. Cir.

I aa a 10, 12

Allen v. Blaisdell, 196 F.2d 527 (C.C.P.A. 1952)... 17

Application of Anthony, 414 F.2d 1883 (C.C.P.A.

I scidiinensichdaiecieieilgaetts ii lacie A da ce 9

Bailey v. Kawasaki-Kisten, K.K., 455 F.2d 392

i “25

Barbed Wire Patent, The, 148 U.S. 275 (1892) _..... 23

Bergdoll v. Pollock, 95 U.S. 337 (1877) -................. 24

Brenner Vv. Manson, 383 U.S. 519 (1966)... 8

Breuer Vv. De Marinis, 558 F.2d 22 (C.C.P.A.

TETIIEIED snicinesastsissuedelapipincenansnetiebenteniciddudaniishidasmeimananasiente 19

Brown Vv. Financial Service Corp. Int’l, 489 F.2d

I I 25

Burns V. Curtis, 172 F.2d 588 (C.C.P.A. 1949) -.... 11

Campbell v. Spectrum Automation Co., 513 F.2d

I 19

Cleeton Vv. Hewlett-Packard Co., 343 F. Supp. 1215

(D. Md. 1972), aff'd, 475 F.2d 1399 (4th Cir.

I sinprsiehidacthbischtichedcteilea acetal lita ad 18

Cochran V. Kresock, 580 F.2d 385 (C.C.P.A. 1976) .. 9

Cody v. Aktiebolaget Flymo, 452 F.2d 1274 (D.C.

Cir. 1971), cert. denied, 405 U.S. 900 (1972)... 9

Crane Vv. Carlson, 125 F.2d 709 (C.C.P.A. 1942) .... 18

Deering v. Winona Harvester Works, 155 U.S.

a 23

Douglas v. United States, 510 F.2d 364 (Ct. Cl.),

cert. denied, 423 U.S. 825 (1975) -....................- 9

Eclipse Mach. Co. v. E. Krieger & Son, Inc., 78

i wg UM 10, 12

Farrand Optical Co. v. United States, 325 F.2d

I ea 9

Fitzgerald v. Arbib, 268 F.2d 768 (C.C.P.A.

IIIT cdiedeniabseninnsinebsitiatansaniadeitinaialinbacabeieibinetiteaktiidiiatiidiaiaiaiieas 10-11

Fleming Vv. Bosch, 181 U.S.P.Q. 761 (Bd. Pat.

I 9,11

Globe-Union, Inc. v. Chicago Telephone Supply

Co., 108 F.2d 722 (7th Cir. 1989) -.........02.. 18

iii

TABLE OF AUTHORITIES—Continued

Page

Gortatowsky v. Anwar, 442 F.2d 970 (C.C.P.A.

xe aes 18

Gould v. Schawlow, 363 F. 2a 908 (C. C. P. A. 1966) . 15, 18

Graham Vv. John Deere Co., 383 U.S. 1 (1966)... 10

Gunn V. Bosch, 181 US.P.Q. 758 (Bd. Pat. Intf.

0 RSE RE Ls a 9, 11, 12

Hildreth v. Mastoras, 257 U.S. oT (1921) cataeamiabts 9

Hodgson V. Humphries, 454 F.2d 1279 (10th Cir.

RAPIER EERE SR AO a 24

Kardulas v. Florida Machine Products Co., 488

of pe ae ee 9

Kewanee Oil Co. v. Bicron Corp., 416 U.S. 470

Ee TE Ot Se Se 8, 10

Laminex, Inc. Vv. Fritz, 389 F. Supp. 369 (N.D.

Ree Oe Oe 18

Litchfield v. Figen, 535 F.2d 72 (C.C.P.A. 1976).. 10, 11

Lockheed Aircraft Corp. v. United States, 553 F.2d

5 Ree een ae 18

Mapp. v. Ohio, 367 U.S. 648 (1961) -...................... 25

Mattor v. Coolegem, 530 F.2d 1391 annie

RCRA aOR Le Gereoner omen 9

Mikus v. Wachtel, 542 F.2d 1157 (C.C.P.A. 1976) 19

Potter Instruments Co. v. ODEC Computer Sys-

tems, Inc., 370 F. Supp. 198 (D.R.I1.), aff’d, 499

F.2d 209 (ist Cir. 1974) . 18

Rex Chainbelt, Inc. v. Borg-Warner Corp., 477 F.

I es 18

Riche v. Permutit Co., 185 F.2d 922 (3d Cir.

1943), aff’g 47 F.Supp. 275 (D. Del. 1942) _...... 9

Ritter v. Rohm & Haas Co., 271 F. Supp. 313

EE ee ee ae ee 19

Senkus v. Johnston, 166 F.2d 597 (C.C.P.A.

ee 18

Smith v. Hayward, 176 F.2d 914 (C.C.P.A. 1949).. 11, 12

S&S Corrugated Paper Mach. Co. v. George W.

Swift, Jr., Inc., 176 F.2d 358 (3d Cir. 1949)... 9

Sutter Products Co. v. Pettibone Mulliken Corp.,

428 F.2d 639 (7th Cir. 1970) . - 9

iv

TABLE OF AUTHORITIES—Continued

Page

Telephone Cases, The, 126 U.S. 1 (1888) -.............. 9

Thompson V. Dunn, 166 F.2d 443 (C.C.P.A. 1948) .. 11,

12,13

Thurston v. Wulff, 164 F.2d 612 (C.C.P.A. 1947) .. 18

United Shoe Machinery Corp. v. Brooklyn Wood

Heel Corp., 77 F.2d 263 (2d Cir. 1985)_.......... 19

United States v. Georgia-Pacific Co., 421 F.2d 92

CE GE. TGED scccsnteniemeetemeaas 25

Vockie v. General Motors Corp., 66 F.R.D. 57

(E.D. Pa.), aff’d, 523 F.2d 1052 (3d Cir. 1975) .. 25

CONSTITUTIONAL PROVISION :

Wl GUE, BOR. Ty Bh ie © cnccssecnsscteniemesminann 9

STATUTES:

ST g | ern lero 1

RE Reet tt Ae 2, 4, 5, 7, 8, 10

I A 11

8 | a SS 2,4

ADMINISTRATIVE MATERIALS:

United States Department of Commerce, Bureau

of the Census, Annual Survey of Manufactures

CEU GD acesnennintiieminbintitienee 24

United States Department of Commerce, Bureau

of the Census, Census of Manufactures (1967) .... 24

United States Department of Commerce, Bureau

of Economic Analysis, Survey of Current Busi-

Ree Pe a ER 24

United States Department of Commerce, Bureau of

Economic Analysis, Survey of Current Business

COUR, TRG UD cicteinccsncsssinsitalbiistinstitssaiiiiea 24

United States Department of Commerce, Patent

& Trademark Office, Annual Report of the Com-

missioner of Patents (1975) ........ 21

Vv

TABLE OF AUTHORITIES—Continued

United States Department of Commerce, Patent &

Trademark Office, Annual Report of the Com-

missioner of Patents (i976) ........

United States Department of Commerce, Patent

& Trademark Office, Office of Technology As-

sessment & Forecast, Seventh Annual Report

EEE

United States Department of Commerce, Patent

& Trademark Office, Office of Technology As-

sessment & Forecast, Special Report on SGFE

EE

United States Department of Commerce, Patent

& Trademark Office, Office of Technology As-

sessment & Forecast, Special Report on Color

Televisions (1977)

let ee ed

Page

21

21

IN THE

Supreme Court of the United States

OCTOBER TERM, 1977

—

No. 77-

HUGHES AIRCRAFT COMPANY,

‘ Petitioner,

BELL TELEPHONE LABORATORIES, INCORPORATED,

Respondent.

PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS FOR THE

THIRD CIRCUIT

Hughes Aircraft Company respectfully petitions for

a writ of certiorari to review the judgment of the United

States Court of Appeals for the Third Circuit in the

above-entitled case.

OPINIONS BELOW

The opinion of the Court of Appeals (App. 25a-30a)

is reported at 564 F.2d 654 (3d Cir. 1977). The opinion

of the District Court (App. 1la-24a) is reported at 422

F. Supp. 372 (D. Del. 1976). ~

JURISDICTION

The judgment of the Court of Appeals was entered

on October 25, 1977. The jurisdiction of this Court is

invoked under 28 U.S.C. § 1254(1).

2

QUESTIONS PRESENTED

1. Whether the court below erred in holding, contrary

to the rule in other Circuit Courts and in the Court of

Customs and Patent Appeals, that experimentation which

is directed solely to enhancing the commercial desir-

ability and utility of a particular invention, but which

is not necessary for the invention’s successful reduction

to practice, nevertheless constitutes “reasonable dili-

gence” in reducing that invention to practice, as re-

quired by 35 U.S.C. § 102(g).

2. Whether the court below erred in holding, con-

trary to the rule in other Circuit Courts and in viola-

tion of important principles of public policy, that in-

ventors may meet their burden of proving “reasonable

diligence” through their own uncorroborated, undocu-

mented oral testimony and other noncontemporaneous

evidence, particularly in cases where they were aware

of the need for full contemporaneous documentation,

where they created no such documentation, and where

they even destroyed some of the requisite documents.

STATUTES INVOLVED

35 U.S.C. § 291. Interfering Patents

The owner of an interfering patent may have re-

lief against the owner of another by civil action, and

the court may adjudge the question of the validity

of any of the interfering patents, in whole or in

part. * * @

35 U.S.C. § 102(g). Conditions for Patentability;

Novelty and Loss of Right to

Patent

A person shall be entitled to a patent unless—

3

(g) before the applicant’s invention thereof the

invention was made in this country by another who

had not abandoned, suppressed, or concealed it. In

determining priority of invention there shall be con-

sidered not only the respective dates of conception

and reduction to practice of the invention, but also

the reasonable diligence of one who is first to con-

ceive and last to reduce to practice, from a time

prior to conception by the other.

STATEMENT

In May of 1966, Hans Dill, an employee of Hughes

Aircraft Company (“Hughes”), invented a novel and

useful method of making very small transistors from

semiconductor material. Much effort was expended at

Hughes over the next five months to establish the feasi-

bility of Dill’s invention, and a patent on it was applied

for by Hughes on October 26, 1966.

Dill’s invention was the process of making a “silicon-

gate field effect transistor” (“SGFET”), a type of elec-

tronic amplifier for integrated circuitry. Because such

devices are so small (several thousand per square inch),

they are especially valuable for use in computers and

sophisticated calculators. The United States Patent and

Trademark Office subsequently issued Hughes a patent

on this invention.

On March 27, 1967-—over one year after it had con-

ceived the invention and five months after Hughes filed

its patent application—Bell Telephone Laboratories, Inc.

(“Bell”), applied for a patent on a process substantially

identical to the Hughes invention, and the Patent Office

also issued a patent to Bell."

1In the proceedings below, the Bell patent was referred to as the

“Kerwin patent,” after the first named inventor in the patent appli-

cation. In like manner, the name of the Hughes inventor, Dill, was

used to identify the Hughes patent.

4

Nearly four years after it had learned of the existence

of the Hughes patent (J.A. 11),’ Bell brought this ac-

tion against Hughes in the United States District Court

for the District of Delaware, alleging that the Hughes

patent interfered with Bell’s patent, and that Bell should

be declared the prior inventor, pursuant to 35 U.S.C.

§ 291.°

* At trial, the existence of an interference was not dis-

puted, and so priority of invention was the major legal

question. Under 35 U.S.C. § 102(g), the law presumes

that the first inventor to reduce the invention to practice

(in this case, Hughes) has priority, unless the rival in-

ventor can prove that he was first to conceive the inven-

tion and that in preparing his patent application or other-

wise reducing his invention to practice, he exercised

“reasonable diligence” from prior to the time the other

inventor conceived the same idea.

The parties stipulated (J.A. 12) that Hughes em-

ployee Dill conceived the disputed invention on May 1,

1966, and reduced it to practice by filing a patent ap-

plication on October 26, 1966. After noting the stipula-

tion (App. 4a), the District Court found that Bell em-

ployees conceived the invention in February or March

1966—prior to Hughes—but had not reduced it to prac-

tice until well after Hughes—sometime in December

1966 or January 1967. App. 17a. Thus, under 35 U.S.C.

§ 102(g), the issue before the lower courts was whether

Bell could meet its burden of proving that it exercised

“reasonable diligence” in reducing its conception to prac-

2 Record citations throughout this Petition will be to the Joint

Appendix (“J.A.”) filed by the parties in the Third Circuit. “App.,”

on the other hand, refers to the Appendix to this Petition.

3 Bell made the same claim in the District Court against the

General Instrument Corporation (“GI”), alleging that GI’s patent

also interfered with the Bell patent. In a separate lawsuit, however,

Hughes had successfully established its seniority over GI, and hence

GI withdrew from this litigation, allowing a default judgment to be

entered against it.

5

tice during the entire period between May 1, 1966, the

date Hughes conceived this invention, and approximately

January of 1967, the time Bell reduced the invention to

practice.

At trial Bell’s employees testified that they were ab-

' sorbed through June in trying to make a workable de-

vice. They then postponed completion of testable devices

in favor of experimentation directed at collateral goals.

One of the inventors conceded that they could have com-

pleted the devices at any time after June, using conven-

tional techniques (J.A. 108-109), and the court so found.

App. 10a. Instead, the inventor testified that Bell’s goal

from July forward was “to make the transistor more

optimum.” J.A. 161. One desired improvement was the

elimination of hysteresis, a form of electrical instability

which, as the trial court found, would not prevent the

invention from being reduced to practice, but which

would make it somewhat less desirable commercially.

App. lla. During the early fall, the only one of Bell’s

inventors who was then working on the silicon-gate project

concentrated exclusively on that hysteresis problem. App.

10a; J.A. 495-501.

Hughes contended that since the work cn hysteresis

was directed to commercial enhancement, rather than re-

duction to practice, such work could not, as a matter of

law, be deemed “reasonable diligence” under 35 U.S.C.

§ 102(g). The District Court, however, rejected that con-

tention and held, contrary to the legal rule in the cases

cited by Hughes, that Bell’s “work on problems inhibit-

ing commercial utilization of the process should be deemed

reasonable diligence * * *.” App. 19a n.19.

In trying to show its reasonable diligence for the

rest of the fall and early winter of 1966, Bell relied

almost exclusively on the oral testimony of the inventors,

in view of a lack of documentation covering the period

at issue. One especially noteworthy gap in the documenta-

6

tion concerns the laboratory notebook of Mr. Sarace

(Plaintiff’s Exhibit 16), covering a period when he was

the only Bell employee working on the project full-time.

His entries occurred almost daily and were quite detailed

for the months of September and part of October, but they

stopped abruptly and without explanation on October 17,

1966. The entries commenced again with a note for

January 17, 1967. To reconstruct the events of the period

between October 17 and some time in December, when the

trial court held that reduction to practice may have oc-

curred, Bell relied upon the almost ten-year-old recol-

lections of the Bell inventors themselves, and of their

co-workers, without the benefit of any written chronicle -

of Bell’s activities.

The trial court required no further proof of effort,

and held on the basis of that evidence that Bell had

met its burden to prove reasonable diligence, even in the

absence of contemporaneous documentation on the point.

Judgment was entered in favor of Bell.

The Court of Appeals held that the trial court had

used the proper legal standards in considering these is-

sues, that the findings of fact were not “clearly errone-

ous,” and that the judgment should be affirmed. App.

28a-30a.

REASONS FOR GRANTING THE WRIT

Introduction

One of the fundamental principles of our patent system

is that whenever there are two separate, independent in-

ventors of a single invention, the law will presume that

the first to file a patent application was the prior in-

ventor. That presumption is designed to reward the one

who promptly discloses for the benefit of the public the

new thing that has been invented. The inventor who files

7

second generally receives no such reward because he has

brought no additional benefit to the public. However, the

second to file may nevertheless be accorded priority if

he can prove that (a) he was first to conceive the in-

vention, and (b) even though he was second to file his

application or otherwise reduce the invention to practice,

he did exercise “reasonable diligence” in accomplishing

such reduction to practice. 35 U.S.C. § 102(g).

Until the decision of the Third Circuit in this case,

the law had been well-settled—and all inventors had

plainly been on notice—regarding two critical aspects

of the “reasonable diligence” standard. The first was

that the requisite diligence related solely to those activities

specifically directed toward reducing the invention to

practice; in other words, delay in filing for a patent

could not be justified by time and efforts expended either

in enhancing the commercial utility of the invention

or in improving auxiliary features not directly related

to the goal of reducing the invention to practice. And

the other established tenet in the law of diligence was

that an inventor claiming priority by virtue of an as-

serted earlier conception and reasonably diligent reduc-

tion to practice bore a heavy burden of proof in estab-

lishing such a claim—a burden that could not be sus-

tained by self-serving testimony or noncontemporaneous

documents of the inventor himself, without independent

corroboration. |

As discussed more fully hereinafter, the decision of

the courts below is contrary to both those settled prin-

ciples. It creates serious uncertainty and instability

as to matters of far-reaching importance, affecting both

the conduct of potential inventors and the hoped-for bene-

fits to the public, and it conflicts with the hitherto un-

questioned decisions of other Circuits and the Court of

Customs and Patent Appeals. Such a conflict is particu-

larly troublesome in the field of patent law, where the

8

parties involved are frequently amenable to suit in many

different jurisdictions, and the risk is therefore great

that the considerable public and private interests in-

volved will be settled by means of forum-shopping. Thus,

the decision below warrants review by this Court. See

Kewanee Oil Co. v. Bicron Corp., 416 U.S. 470, 472

(1973); Brenner v. Manson, 383 U.S. 519, 522 & n.4

(1966). ‘

Furthermore, a second threat is posed by the lower

courts’ opinions in this case—one which standing alone

is of sufficient public concern to merit this Court’s at-

tention. The courts below have approved the use of in-

terested parties’ uncorroborated oral recollections as a

basis for resolving a multi-million dollar patent dispute.

They have so ruled in a case in which the prevailing

party is a sophisticated, patent-wise corporation that

failed to record some vital parts of the contemporaneous

invention history and destroyed the records originally

made respecting other parts. This unprecedented decision

threatens to foster litigation, and to invite perjury and

destruction of evidence, in an area of law where the

public interest is so great that no such risk should be

tolerated.

1. The Circuit Court’s holding that reasonable diligence

may consist of work unrelated to reduction to practice

conflicts with the rule in other Circuits and with funda-

mental principles of patent law.

The Third Circuit and the District Court have held

in this case that inventors’ work on problems related

solely to commercial utilization, and not to reduction to

practice, can be deemed “reasonable diligence” in reduc-

ing an invention to practice within the meaning of 35

U.S.C. § 102(g). That holding is in direct conflict with

the well-established position of the United States Court of

er ee

eee

9

Customs and Patent Appeals, as well as with the position

of every other Circuit Court that has considered this

issue.*

It has long been the law that “a discoverer or inventor,

in order to get a patent for a process, [need not] have

succeeded in bringing his art to the highest degree of

perfection.” The Telephone Cases, 126 U.S. 1, 536

(1888). Indeed, so long as the invention “performs,

though only in a crude way, the important function by

which it makes the substantial change claimed for it in

the art, it is enough.” Hildreth v. Mastoras, 257 U.S. 27,

34 (1921). As a consequence of this basic principle,

it has been universally recognized that developing the

commercialization or marketability of an invention is

neither a part of its reduction to practice nor a pre

requisite to its patentability.°

Any other rule would have been at war with the

underlying purposes of our patent system, which is con-

*The Third Circuit itself previously agreed with the position

urged by Petitioner here. Judges Biggs, Goodrich, Kalodner, Ma-

gruder and Maris so held in two previous cases. S€S Corrugated

Paper Mach. Co. v. George W. Swift, Jr., Inc., 176 F.2d 358 (3d Cir.

1949); Riche v. Permutit Co., 1385 F.2d 922 (3d Cir. 1943), aff’g

47 F. Supp. 275 (D. Del. 1942). The instant case necessarily over-

rules these 30-year-old rulings.

5E.g., Cody v. Aktiebolaget Flymo, 452 F.2d 1274, 1283 (D.C.

Cir. 1971), cert. denied, 405 U.S. 990 (1972); Kardulas v. Florida

Machine Products Co., 438 F.2d 1118, 1121 (5th Cir. 1971); Sutter

Products Co. v. Pettibone Mulliken Corp., 428 F.2d 639, 647 (7th

Cir. 1970) ; Farrand Optical Co. v. United States, 325 F.2d 328, 332-

833 (2d Cir. 1963); Douglas v. United States, 510 F.2d 364, 366

(Ct. Cl.), cert. denied, 423 U.S. 825 (1975); Mattor v. Coolegem,

530 F.2d 1391, 1395 (C.C.P.A. 1976) ; Cochran v. Kresock, 530 F.2d

385, 391 (C.C.P.A. 1976); Application of Anthony, 414 F.2d 1383,

1396 (C.C.P.A. 1969) ; Fleming v. Bosch, 181 U.S.P.Q. 761 (Bd. Pat.

Intf. 1973) ; Gunn v. Bosch, 181 U.S.P.Q. 758 (Bd. Pat. Intf. 1973).

The Board of Patent Interferences is the important adminis-

trative tribunal that has day-to-day responsibility for carrying out

the dictates of the statute. 35 U.S.C. § 135.

10

stitutionally required to “promote the Progress of Sci-

ence and useful Arts * * *.” U.S. Const. Art. I, § 8, el. 8.

It does so by securing to an inventor the exclusive right

to exploit his advancement of human knowledge for a

limited time. Such a grant is not designed to secure to

the inventor any natural property right in his discoveries,

but rather to induce him to disclose fully his new knowl-

edge for the public benefit. Graham v. John Deere Co.,

383 U.S. 1, 9 (1966). It is through that full disclosure

that the system “stimulates ideas and the eventual de-

velopment of further significant advances in the art.”

Kewanee Oil Co. v. Bicron Corp., supra, 416 U.S. at 481.

Thus, achievement of the constitutionally-envisioned

“Progress of Science and useful Arts” depends on prompt

reduction to practice and disclosure to the public of that

which is new and useful. The constitutional goal of

“Progress” would not be attained if inventors could with

impunity withhold their discoveries from the eyes of

others while these discoveries are being refined and per-

- fected for commercial exploitation before reduction to

practice.

That is why the law denies priority to any inventor

who was not the first to reduce the disputed invention to

practice unless (a) he can prove that he was the first

to conceive the invention, and (b) he can also prove that

he was “reasonably diligent” in reducing the invention to

practice. 35 U.S.C. § 102(g). And until the present case,

the courts unanimously have measured the second in-

ventor’s diligence only by the work he did that was ac-

tually directed to reducing the invention to practice. Thus,

except for the decision of the Third Circuit in this case,

the rule in every other tribunal which has considered the

matter is that work which advances an invention-project

overall, but which is not directed to reducing to practice

TT ee enn

11

the specific invention for which the patent is claimed,

necessarily cannot be considered “reasonable diligence.” °

The rulings below are in square conflict with these

cases.’

*°E.9., Abbott v. Shepherd, 135 F.2d 769, 779 (D.C. Cir. 1942) ;

Eclipse Mach. Co. v. E. Krieger & Son, Inc., 78 F.2d 755 (2d Cir.

1937); Litchfield v. Eigen, 535 F.2d 72, 76 (C.C.P.A. 1976); Fitz-

gerald v. Arbib, 268 F.2d 763, 766 (C.C.P.A. 1959); Smith v. Hay-

ward, 176 F.2d 914 (C.C.P.A. 1949); Burns v. Curtis, 172 F.2d

588, 591 (C.C.P.A. 1949); Thompson v. Dunn, 166 F.2d 443, 446-

447 (C.C.P.A. 1948); Fleming v. Bosch, supra; Gunn v. Bosch,

supra.

7 The following language is typical of the proposition in the cases

cited above that it is not enough for the first conceiving party to

have spent its time clearing up technical or troublesome details

that did not go to the basic premise of the invention, or to have

worked on the potential commercial utilization of the invention:

They admit that [during the period at issue], they did not test

glutaraldehyde in vivo; in other words, during that period, none

of their activity was directed toward reducing their invention

to practice. It is of no avail to them that their activities were

continuously “directed to the project” of testing numerous com-

pounds for anti-caries activity * * *. [Litchfield v. Eigen, supra,

535 F.2d at 76.]

[Whatever had been done by [Smith] towards promoting the

commercial exploitation of the device during that period does

not constitute a matter to be considered on the issue of appel-

lant’s diligence * * *. [Smith v. Hayward, supra, 176 F.2d at

922.]

* * *

[P]reparation of samples of specimens which exhibit the Gunn

effect, experiments relating to the characteristics exhibited by

the samples, and construction of equipment used in the experi-

ments on the samples * * * does not indicate reasonable dili-

gence * * *, [Gunn Vv. Bosch, supra, 181 U.S.P.Q. at 761.]

» * *

Similarly, these tribunals have used quite specific and uniformly

adamant language to the effect that the first conceiving party, in

order to meet the “reasonable diligence” test under the statute,

had to have been working toward a reduction to practice of the in-

vention at hand (or toward filing an application for the patent) :

Diligence consists in reasonable effort directed toward em-

bodiment of an invention in physical form or toward filing

12

The decisions in two of the cases cited above, Abbott

Vv. Shepherd and Thompson v. Dunn, both supra note 6,

illustrate the direct conflict now existing between the

District of Columbia Circuit and the Court of Customs

and Patent Appeals, on the one hand, and the Third Cir-

cuit on the other.

Abbott presented a situation almost identical to the

present case. There, two inventors competed for a patent

on a process for weaving flexible yarn into cloth. The

party with the burden of proving “reasonable diligence”

had experimentally demonstrated that his process was

workable. However, instead of immediately thereafter

performing the practical weaving tests necessary for ac-

tual reduction to practice, the inventor spent the next

nine months refining a particular facet of the formula

which was not part of the invention and was not essen-

tial for reduction to practice. The District of Columbia

Circuit declared that, as a matter of law, such activity

was not reasonable diligence:

However necessary and convincing that activity

might have been if the invention claimed had been

in the specific formula it finally developed, in re-

lation to the invention in issue it was at most an

artisan’s sidetrack where the inventor had no busi-

ness to be when others were coming along the main

line. Perfection of utility is to be encouraged. But

delay, while one is engaged only in what is already

an application for the patent. [Eclipse Mach. Co. v. E. Krieger

& Son, Inc., supra, 87 F.2d at 757.]

* * *

[A]ppellant’s activity relative to other devices was of no

assistance to him in reducing [his invention] to practice * * *.

[Smith v. Hayward, supra, 176 F.2d at 922.]

* + *

The work relied on must be directed to attaining a reduc-

tion to practice of the subject matter of the counts. [Gunn v.

Bosch, supra, 181 U.S.P.Q. at 761.]

ee

13

known to the art after the essential idea has been

proved, is not that diligence which is required to

secure priority in invention. [135 F.2d at 779;

footnote omitted. ]

Thompson v. Dunn presents the same situation. There,

the priority contest was over a fruit handling machine

which, among other things, could be used for more effec-

tively peeling fruit. However, the invention itself con-

tained no peeling mechanism, but only devices for feeding

and impaling the fruit. During the period when reason-

able diligence was required, the inventor seeking priority

had spent time “attempting to develop a pear peeling

mechanism which, it was thought, would operate more

satisfactorily from a commercial standpoint in conjunc-

tion with his conception of the invention * * *.” 166 F.2d

at 446; emphasis in the original. The Court of Customs

and Patent Appeals concluded that such efforts relating

to “commercial expediency” could not, as a matter of law,

constitute diligence:

It is evident from the board’s decision that it was

of opinion that work done on any part of the com-

pleted machine, although not on the elements de-

fined by the involved counts, constituted diligence by

appellee in reducing to practice the invention here

involved. We are not of that opinion. It is ap-

parent from the record that appellee and his asso-

ciates contemplated modifications in their peeling

mechanism and proceeded to perfect such a mecha-

nism before appellee attempted to reduce to practice

the feeding and impaling mechanism called for by

the counts in issue. In so doing, appellee, of course,

is not open to criticism. It is well settled, however,

that diligence will not wait upon commercial ex-

pediency. [166 F.2d at 446.]

Though the instant case involves the same issue ad-

dressed by the District of Columbia Circuit and the Court

of Customs and Patent Appeals, the Third Circuit has

14

resolved it in precisely the opposite way. The District

Court in this case concluded that only one Bell inventor

(Sarace) worked on the transistor process during the

second half of 1966, and that from some time in late

August until some time in late November he was primar-

ily experimenting with an electrical instability (hyster-

esis) problem.* The judge further determined that al-

though hysteresis was a “deficiency which it was desirable

to overcome,” it “would not have precluded a successful

reduction to practice.” App. lla (emphasis added).’

Hughes contended before the District Court and again

before the Court of Appeals that, on such facts, time spent

pursuing a solution to the hysteresis problem could not

be credited as reasonable diligence in reducing the inven-

tion to practice. The District Court nevertheless held

that:

In this Court’s view, the silicon gate process, as it

existed in the fall of 1966, cannot be readily sub-

jected to rigid compartmentalization. Accordingly,

Sarace’s work on problems inhibiting commercial

utilization of the process should be deemed reason-

able diligence, whether that work encompassed the

whole of the process, one step in the process, or an

ultimately abandoned step. [App. 19a n.19.]

The trial court thus determined that efforts unrelated

to reducing the invention to practice can be deemed “rea-

sonable diligence” within the meaning of the patent laws,

® As will be subsequently discussed, there is no way of determining

what was being done or when and by whom it was being done dur-

ing much of this period because there were no objective, contempo-

raneous documents produced on the matter. However, solely for

purposes of the present discussion, we do not challenge the District

Court’s findings as to what actually occurred.

® Bell conceded as much. It stated on page 31 of its main brief

filed with the District Court that “the hysteresis effect found in

transistors * * * has nothing to do with the success or failure of

the process used to fabricate the transistors” (emphasis added).

15

so long as those efforts somehow were connected to the

project as a whole or were directed to enhancing the com-

mercial utility of the invention.° The Third Circuit af-

firmed the District Court’s departure from established

legal standards, and upheld its findings of fact made

under the more expansive standard. App. 28a." The

lower courts’ decisions are completely at odds with the

previously discussed principles of patent law and with

every other tribunal that has considered the issue.

10 The court’s statement that the various efforts relating to the

overall invention-project could not be “readily subjected to rigid

compartmentalization” is immaterial to the legal issue Petitioner

is raising before this Court. The only “compartmentalization” at

issue is the separation of these efforts which were directed to re-

ducing the invention to practice from those that were not. The court

itself performed such a compartmentalization to the extent of

finding that efforts devoted to the hysteresis problem were not

directed to reduction to practice. App. lla. It thus erred as a mat-

ter of law in nevertheless treating those efforts as part of the

“reasonable diligence” requirement.

Even if the District Court’s “compartmentalization” reference

were relevant—which it is not—it ignores the rule of law estab-

lished without exception that the party attempting to prove “rea-

sonable diligence” itself carries the burden of proving such diligence

by a preponderance of the evidence, and if its own proof cannot

compartmentalize the relevant time period, so that each piece of

work and each time sequence can be accounted for, such party

fails in its proof. E.g., Gould v. Schawlow, 363 F.2d 908, 916 n.6,

918, 921 (C.C.P.A. 1966), and cases cited supra notes 5 and 6. “The

party chargeable with diligence must account for the entire period

during which diligence is required.” Gould v. Schawlow, supra,

363 F.2d at 919.

11 On appeal, the Third Circuit rejected Hughes’ contention that

the efforts directed toward solving the hysteresis problem had to be

excluded from “reasonable diligence” consideration as a matter of

law. Notwithstanding the District Court’s factual determination

that the hysteresis-related work was not necessary to reducing the

invention to practice, the Third Circuit nevertheless affirmed the

District Court’s decision by finding such work “sufficiently within

that area [of reduction to practice] to constitute reasonable dili-

gence.” App. 28a. The court therefore did not simply affirm findings

of fact; it necessarily approved the broader, unprecedented legal

standard of “reasonable diligence” as adopted by the District Court.

16

In addition to presenting a conflict between Circuits

—with all its attendant potential for forum-shopping and

confusion in the application of a federal statute—the

Third Circuit decision threatens serious harm to our basic

patent system of encouraging technological advancement

for the public good. If an inventor who is first to conceive

an advancement were assured that he could not be fore-

closed from a patent by those who thereafter enter the

field, he has, inherently, less incentive to reduce to prac-

tice and eventually to disclose his invention in a patent.

Indeed, so long as work related to the invention-project is

in some manner continued, even though disassociated from

the patentable improvement, an inventor under such a

rule of law could effectively monopolize an inventive area

for as long as he chose. He would not be subject to the

policy of the patent law encouraging swift disclosure; he

would not need to share his advancement so that others

might be stimulated to advance the art still further; and

he would be able to extend almost indefinitely the expira-

tion date of his statutory patent term. The public would

be the loser.”

12 Obviously, the rate of progress of technological development

would be greatly impeded if inventors could deny the fruits of

their work to colleagues. The technological area of the SGFET

itself presents a good example of the need for rapid interchange of

ideas to spur technological growth. According to the Patent Office,

some 2181 patents have been granted to inventors in the narrow

technological field in which the SGFET invention is classified. Of

these, 75% (1531) were issued on applications filed after Hughes

made its application in late 1966. Thereafter, around 160 applica-

tions that ultimately matured into patents were filed each year

through 1974. Quite clearly, the rapid progress of this art depended

upon prompt disclosure of prior innovations to others and the

diligence of inventors in filing their applications. United States

Department of Commerce, Patent & Trademark Office, Office of Tech-

nology Assessment & Forecast [hereafter OTAF], Special Report

on SGFE Transistors 6 (1978).

RE AE ER ER RO ere

17

2. The Circuit Court’s decision relying on noncontempo-

raneous evidence from inventors to prove “reasonable

diligence” conflicts with the rule in other Circuits and

violates public policy.

A. There is a conflict in the Circuits.

The Third Circuit acknowledged in its opinion below

the general rule that “uncorroborated testimony of an

inventor on essential issues of priority is highly suspect

and such testimony should, therefore, generally be sup-

ported by corroborating evidence * * *.” App. 29a. What

the appellate court ignored, however—and indeed com-

pounded—is the considerable confusion that exists in this

area of law as a result of the conflict between the differ-

ent Circuit Courts concerning the type of corroboration

required by this rule.

As the Court of Customs and Patent Appeals has sum-

marized the basic principle, “in interference cases a claim-

ant, no matter how honest and truthful he may be, can-

not prevail upon the basis of his own oral testimony

standing alone. The rule which requires corroborating

evidence is inviolable * * *.” Allen v. Blaisdell, 196 F.2d

527, 529 (C.C.P.A. 1952). The interpretation and appli-

cation of this general principle, however, have produced

widely divergent rules in the various Circuits.

Some courts—including those in the First and Fourth

Circuits, the Court of Claims, and, in some instances,

the Court of Customs and Patent Appeals—hold that an

inventor’s own documentary evidence will not suffice as

“independent” corroboration for his oral testimony. These

courts reason that such evidence is self-serving in the

same way that the inventor’s oral testimony is self- ©

serving, that it suffers from the same infirmities that

rake such oral testimony unreliable, and that it there-

18

fore cannot be characterized as being the requisite in-

dependent corroboration.

Likewise insufficient under this approach is oral testi-

mony either by the inventor’s co-workers, Rex Chainbelt,

Inc. V. Borg-Warner Corp., 477 F.2d 481, 490-491 (7th

Cir. 1973), or by witnesses who possess no independent

knowledge regarding the inventor’s alleged activities but

who simply relied on what the inventor previously had

told them.**

The Court of Claims, in its recent decision in Lock-

heed Aircraft Corp. v. Uniied States, supra, summarized

the rule in these cases:

{I]t is well established that the burden of proof

of an inventor’s alleged conception and reduction

to practice is a heavy one requiring full corrobora-

tion by other than the inventor’s own self-serving

testimony or records. In fact, this court has held

that oral recollections of long past events, unsup-

ported by contemporaneous documentary evidence,

are insufficient to meet the strict burden of proof

required. [553 F.2d at 74; emphasis added; citations

omitted. ]

However, other courts, namely those in the Second

and Sixth Circuits, and, on occasion, the Court of Cus-

18 E.g., Potter Instruments Co. v. ODEC Computer Systems, Inc.,

370 F. Supp. 198, 206 (D.R.I.), aff'd, 499 F.2d 209 (1st Cir. 1974);

Cleeton Vv. Hewlett-Packard Co., 343 F. Supp. 1215, 1221 (D. Md.

1972), aff'd, 475 F.2d 1399 (4th Cir. 1973) ; Lockheed Aircraft Corp.

v. United States, 553 F.2d 69, 74 (Ct. Cl. 1977) ; Senkus v. Johns-

ton, 166 F.2d 597, 599 (C.C.P.A. 1948); Thurston v. Wulff, 164

F.2d 612, 617 (C.C.P.A. 1947) ; Crane v. Carlson, 125 F.2d 709, 712-

713 (C.C.P.A. 1942).

% Laminez, Inc. V. Fritz, 389 F. Supp. 369, 383 (N.D. Ill. 1974);

Gortatowsky v. Anwar, 442 F.2d 970, 971-972 (C.C.P.A. 1971);

Gould v. Schawlow, supra, 363 F.2d at 919-920; see Globe-Union,

Ine. V. Chicago Telephone Supply Co., 103 F.2d 722, 730 (7th Cir.

1939).

19

toms and Patent Appeals, have concluded that an in-

ventor’s contemporaneous documentary evidence may be

legally sufficient to corroborate his oral recollections, and

that such evidence should be judged by a “rule of rea-

son.” ** Illustrative of this approach is the following

language from the court’s opinion in Ritter v. Rohm &

Haas Co., supra:

When the validity of a patent turns on the exact

date a certain event occurred, or discovery was made,

there is an inherent risk of perjury if after-the-fact

oral testimony by the most interested party, the al-

leged inventor, can carry the invention date back

beyond the filing date.

* * * [The inventor’s] notebook, a document of

uncontested authenticity, is a contemporaneous rec-

ord of his thoughts and actions. It is hard to imagine

what more reliable corroborative evidence could be

found.

* ee &

Memories are fallible, particularly in trying to re-

call the precise date of long forgotten events whose

importance is only subsequently created by the By-

zantine nuances of litigation. To rule out [the in-

ventor’s] notebook on the ground that it is “self-

serving” is to exalt labels over reason. [271 F. Supp.

at 320, 321; footnote omitted. ]

Faced with these directly conflicting interpretations

of the corroborative evidence rule, the Third Circuit in

the instant case took still another approach. Declaring

that “corroborating evidence need not take any particu-

lar form” (App. 29a), the appellate court affirmed the

15 Campbell v. Spectrum Automation Co., 513 F.2d 932, 937-938

(6th Cir. 1975); United Shoe Machinery Corp. v. Brooklyn Wood

Heel Corp., 77 F.2d 263 (2d Cir. 1935) ; Ritter v. Rohm & Haas Co.,

271 F. Supp. 313, 320-321 (S.D.N.Y. 1967); Brewer v. De Marinis,

558 F.2d 22, 29 (C.C.P.A. 1977) ; Mikus v. Wachtel, 542 F.2d 1157,

1159-60 (C.C.P.A. 1976).

20

trial judge’s holding that oral testimony of inventors

is sufficiently corroborated if supported by oral testi-

mony of co-inventors and by noncontemporaneous docu-

ments prepared by the inventors themselves.”

By concluding that such evidence was legally sufficient

to prove Bell’s case, the Third Circuit not only has taken

a stance in conflict with the per se rule in the First and

Fourth Circuits and the Court of Claims, but it Kas

confirmed a case far outside the “rule of reason” ap-

proach of the Second and Sixth Circuits. In so doing,

the Third Circuit has unacceptably lowered the stand-

ards the law should require, and it has injected still

more uncertainty into a critical area that can ill afford

such ambiguity.

B. Under facts such as are present here, public policy

requires a rule prohibiting any consideration of in-

ventors’ noncontemporaneous evidence as proof of

“reasonable diligence”.

The instant case demonstrates graphically the need for

a new rule which will prevent large corporations, with

extensive patent experience and expertise, from calling

upon the courts to evaluate inherently unsatisfactory oral

testimony from inventors in order to resolve complex,

multi-million dollar controversies over patent priority.”

** The District Court’s “corroborative evidence” included solely

testimony from inventors (Sarace and Kerwin) and a co-worker

(Edwards), plus two exhibits, both authored by the inventors. App.

12a n.13. One exhibit was a set of viewgraph slides of a talk

given by Sarace in December 1966, and the other was a January 1967

intra-company memorandum. The first merely described the device

and the second was a report on the status of work as of January.

Neither exhibit related at all to the key question of what, if any,

effort Bell expended on the project in the late fall of 1966.

** Such controversies are increasing. In 1976, the United States

Patent and Trademark Office received over 100,000 applications

for patents on mechanical, electrical, or chemical inventions, as

compared with 76,500 in 1958. United States Department of Com-

21

Petitioner submits that the public interest in efficient

and just administration of the patent laws requires that

the current, conflictipg versions of the corroborative evi-

dence rule be modified so as to require that only con-

temporaneous, documentary evidence will suffice to prove

prior inventive efforts, at least in cases, such as the

instant controversy between Bell and Hughes, where

the following three factors are present:

1. A large, patent-wise corporation—Bell is a sophisti-

cated and experienced inventor. It employs hundreds of

highly skilled scientists whose sole job is to create new

devices and reduce them to practice."* Unlike the un-

tutored technician working in his basement on his first

invention, Bell and its employees are well aware from

long experience of the necessity to document in detail

every step in the inventive process. The company has

been involved in numerous administrative and judicial

battles over disputed inventions and is thus fully cognizant

of the applicable requirements for proving inventive

priority, reduction to practice and reasonable diligence.

merce, Patent & Trademark Office, Annual Report of the Commis-

sioner of Patents 10 (1976). Approximately 9 per cent of such

patents become involved in public protests, and a smaller number,

around 1 per cent, become involved in interferences. United States

Department of Commerce, Patent & Trademark Office, Annual Re-

port of the Commissioner of Patents 1 (1975).

18 The Patent Office reports that even in the narrow area covered

by the patent in this case, Bell owns 96 patents, issued between

1963 and 1976. Only six other corporations have as many, including

IBM, RCA and foreign-owned electronics companies. The patent in

this case was only one of 15 that Bell received from applications filed

on the SGFET technology in 1967. In 1969, when SGFET-related

patents were first issued, Bell received 16, second only to IBM’s 18.

Bell consistently ranks at or very near the top in the nation for the

number of patents owned in broader or related fields, such as Color

Television (second after RCA), semiconductor computer memories

(shares second place with others), and magnetic bubble computer

memories (first with 48% of all patents). OTAF, Special Report

on SGFE Transistors 6, 8 (1978); OTAF, Special Report on Color

Televisions 8 (1977); OTAF, Seventh Annual Report 96, 118, 126,

144 (1977).

22

It not only admits but is proud of this fact. Accord-

ing to its own policy announcements, Bell is a careful

keeper of records. Defendant’s Exhibits 12, 13. This

attention to detail is attested to by the fact that it did

keep elaborate records of its work on this patent until

October 17, 1966. J.A. 504.

2. A gap in the documentation—The District Court

held that Bell presented to the court no contemporaneous

documentation at all on its activities covering the im-

portant “reasonable diligence” period from October 17,

1966, until at least December 1966. App. 12a.

3. Destruction of records—It is undisputed pursuant

to Bell’s own evidence that important documents relat-

ing to the “reasonable diligence” period were destroyed

and thus never presented in court. E.g., J.A. 173-174,

242."

Petitioner submits that when an inventor is aware

of the necessity of keeping records, when it then totally

fails to keep such records for a substantial amount of

“reasonable diligence” time, and when the inventor later

goes so far as to destroy records covering this crucial

time period, public policy demands that no noncontempo-

raneous evidence of any kind be allowed to fill the “rea-

sonable diligence” void. To hold otherwise would be to

invite both perjury and the destruction of adverse docu-

ments.”

1® For present purposes it makes no difference why the documents

were destroyed; the key point is that they were in fact done away

with. However, it is interesting that while Bell at first claimed that

its documents were destroyed pursuant to its “document retention

policy” (J.A. 242), it was then proven that the destruction was in

fact in defiance of that policy. Bell’s General Executive Instructions

concerning the preservation of records (Defendant’s Exhibit 12)

required that laboratory notebooks be maintained for 30 years after

the last entry, that laboratory reports be kept for 20 years, and that

technical memoranda be kept permanently.

2° Even in the absence of the special circumstances referred to

above, this Court has repeatedly emphasized the unsatisfactory

oe

23

We do not charge that fraud occurred in this case.

Rather, the rule we seek simply takes account of the

realities of the situation in which the witness, not sub-

ject to contradiction by contemporaneous documents, finds

himself.** The point is that a rule allowing valuable—

nature of oral testimony from an inventor trying to prove, years

after the event, that he had effectively reduced to practice an inven-

tion for which another held a prior patent. See The Barbed Wire

Patent, 143 U.S. 275, 284-285 (1892) :

In view of the unsatisfactory character of such testimony, aris-

ing from the forgetfulness of witnesses, their liability to mis-

takes, their proneness to recollect things as the party calling

them would have them recollect them, aside from the temptation

to actual perjury, courts have not only imposed upon defendants

the burden of proving such devices, but have required that the

proof shall be clear, satisfactory and beyond a reasonable doubt.

* * *

The very fact, which courts as well as the public have not failed

to recognize, that almost every important patent, from the cotton

gin of Whitney to the one under consideration, has been at-

tacked by the testimony of witnesses who imagined they had

made similar discoveries long before the patentee had claimed

to have invented his device, has tended to throw a certain

amount of discredit upon all that class of evidence, and to

demand that it be subjected to the closest scrutiny.

21 See Deering Vv. Winona Harvester Works, 155 U.S. 286, 300-301

(1894) :

As we have had occasion before to observe, oral testimony, un-

supported by patents or exhibits, tending to show prior use of

a device regularly patented is, in the nature of the case, open

to grave suspicion. The Barbed Wire Patent, 143 U.S. 275.

Granting the witnesses to be of the highest character, and never

so conscientious in their desire to tell only the truth, the possi-

bility of their being mistaken as to the exact device used,

which, though bearing a general resemblance to the one

patented, may differ from it in the very particular which makes

it patentable, are such as to render oral testimony peculiarly

untrustworthy; particularly so if the testimony be taken after

the lapse of years from the time the alleged anticipating device

was used. If there be added to this a personal bias, or an

incentive to color the testimony in the interest of the party

calling the witness, to say nothing of downright perjury, its

value is, of course, still more seriously impaired.

24

sometimes astronomically valuable *—patent rights to

turn on vague, uncertain and speculative evidence pro-

duced years after the event invites litigation, raises at

least the spectre of possible fraud, perjury or destruc-

tion of documents, and thus casts doubt on the whole

adjudicative process.

Just as this Court and lower courts have not hesitated

in other cases to bar evidence or to set standards on

grounds of public policy because of the possibility of mis-

conduct,** so here the Court should announce clearly and

22 The dollar value of a patent is difficult to determine because

owners keep the data confidential and because the calculations pre-

sent many accounting problems. However, figures arc available on

the manufacture of all semiconductor devices, and the tremendous

growth and dollar volume they disclose are good measures of the

economic importance of the technological developments disputed

here. In 1958, semiconductor devices were a $250 million industry.

Nine years later, when Bell filed its patent application, the industry

had more than quadrupled to $1.14 billion. By the time judgment

was rendered in this case nine years later, the industry had almost

quadrupled again, to $4.47 billion, or about a quarter of one per cent

of the whole economy. During the period from 1958 to 1976, semi-

conductor manufacturing grew 1687 per cent, six times faster than

the economy as a whole. United States Department of Commerce,

Bureau of the Census, Census of Manufactures, Industry Series

Table la for SIC 3674 (1967); United States Department of Com-

merce, Bureau of the Census, Annual Survey of Manufactures,

Industry Series Table la for SIC 3674 (1976); United States De-

partment of Commerce, Bureau of Economic Analysis, Survey of

Current Business, Table 1 (Dec. 1959) ; United States Department

of Commerce, Bureau of Economic Analysis, Survey of Current

Business, Table 1 (Dec. 1977). In this field, patent priority disputes

are of great importance both because of the amount of money cur-

rently at issue and because of potential profit growth.

28 For example, in Hodgson v. Humphries, 454 F.2d 1279 (10th

Cir. 1972), an enforcement action under the Fair Labor Standards

Act, testimony in lieu of legally required documents was held inade-

quate and inadmissible, where the employer had failed to create the

documents. See also Bergdoll v. Pollock, 95 U.S. 337, 341 (1877)

(“Certainly the law does not contemplate that [the defendant] may

relieve himself from the effect of insufficient or improper [book-

keeping] entries by a resort primarily to the uncertain recollection

or knowledge of witnesses * * *”). Various other exclusionary rules

—

25

strongly that an inventor in the position of Bell cannot

carry its burden of proof by other tnan contemporane-

ous evidence. Given such a rule, companies like Bell

would be more careful to create and maintain contem-

poraneous records (rather than just professing to do so,

as Bell does now), and the task of the lower courts in

future interference cases would be greatly simplified.

Petitioner has shown in Section A, above, that the

lower courts are in hopeless conflict over the proper rule

in this area. We submit that this Court should grant

certiorari here in order to resolve that conflict and, at

the same time, to establish a new rule that would limit

large, patent-wise corporations to contemporaneous, docu-

mentary evidence in their efforts to establish priority of

inventive efforts. Such a rule would implement the con-

gressional intent and the public policies that underlie

the patent field, and would streamline judicial adminis-

tration in this important and frequently litigated area

of the law.

exist either to protect the reliability of the trial process or to ensure

some greater public benefit or avert some greater harm. See, e.g,

Mapp v. Ohio, 367 U.S. 643 (1961); Brown v. Financial Service

Corp. Int’l, 489 F.2d 144 (5th Cir. 1974); Bailey v. Kawasaki-

Kisten, K.K., 455 F.2d 392, 395-396 (5th Cir. 1972) ; United States

v. Georgia-Pacific Co., 421 F.2d 92 (9th Cir. 1970); Vockie v.

General Motors Corp., 66 F.R.D. 57 (E.D. Pa.), aff'd, 523 F.2d

1052 (3d Cir. 1975).

26

CONCLUSION

We respectfully urge the Court, for all of the reasons

set forth above, to grant certiorari and to reverse the

decision below.

Respectfully submitted,

E. BARRETT PRETTYMAN, JR. \

ALLEN R. SNYDER ,

ROYAL DANIEL

WALTER A. SMITH, JR.

815 Connecticut Avenue, N.W.

Washington, D.C. 20006

DuUGALD S. MCDOUGALL

MELVIN M. GOLDENBERG

135 South LaSalle Street

Chicago, Illinois 60603

ROBERT THOMPSON ’ A Pp p E N D | X

Hughes Aircraft Company

5150 West Century Boulevard

Los Angeles, California 90009

Attorneys for Petitioner

la

UNITED STATES DISTRICT COURT

D. DELAWARE

Civ. A. No. 74-238

BELL TELEPHONE LABORATORIES, INCORPORATED,

Plaintiff,

Vv.

HUGHES AIRCRAFT COMPANY and

GENERAL INSTRUMENT CORPORATION,

Defendants.

July 19, 1976

Richard F. Corroon, and Peter M. Siegloff, of Potter,

Anderson & Corroon, Wilmington, Del. (Albert E. Fey,

and Robert C. Morgan, of Fish & Neave, Edward Drey-

fus, New York City, Peter V. D. Wilde, Murray Hill,

N.J., of counsel), for plaintiff.

Thomas §. Lodge, of Connolly, Bove & Lodge, Wil-

mington, Del., Dugald S. McDougall, and Melvin M.

Goldenberg, of McDougall, Hersh & Scott, Chicago, IIl.

(Robert Thompson, Los Angeles, Cal., of counsel), for

defendant Hughes Aircraft Co.

2a

OPINION

(Filed July 19, 1976)

Wright, Senior Judge.

Plaintiff, Bell Telephone Laboratories, Inc. (“BTL”),

seeks relief under 35 U.S.C. Sec. 291° against defendants

Hughes Aircraft Co. (“Hughes”) and General Instru-

ments Corp. (“G.I.”). BTL alleges that an interferenée

exists between its United States Letters Patent Number

3,475,234 (the Kerwin patent), and United States Let-

ters Patent Numbers 3,544,399 (the Dill patent) and

3,576,478 (the Watkins patent), owned by Hughes and

G.I. respectively. BTL seeks an adjudication of that in-

ference and a declaration that it is the sole owner of the

patent rights in interference.

This Court has jurisdiction under 28 U.S.C. Sec. 1338

(a). Since plaintiff, BTL, is a New York corporation

and both defendants are Delaware corporations venue is

proper under 28 U.S.C. Sec. 1391(c). Cf., Standard

Oil Co. v. Montecatini Edison, S.p.A, 342 F.Supp. 124

(D.Del. 1972). ~

Previously this Court has entertained a suit in which

Hughes charged General Instruments with infringement

of the Dill patent. General Instruments defended on the

grounds, inter alia, that the Dill patent was invalid by

reason of Watkins’ prior invention. After separate trial

on this priority issue, this Court held that although

Watkins had conceived the invention in March of 1965,

Watkins did not reduce the invention to practice until the

filing of a patent application on November 17, 1966.

135 U.S.C. Sec. 291 provides :

The owner of an interfering patent may have relief against the

owner of another by civil action, and the court may adjudge the

question of the validity of any of the interfering patents, in whole

or in part. The provisions of the second paragraph of section 146

of this title shall apply to actions brought under this section.

3a

Dill, however, was found to have conceived on May 1,

1966, and to have reduced to practice constructively by

the filing of a patent application on October 26, 1966.

Since Watkins was the first to conceive but the last to

reduce to practice, his diligence from Dill’s conception

until his own filing was necessary to a finding that he

was the prior inventor. No such diligence was found and

Hughes prevailed. See Hughes Aircraft Co. v. General

Instruments Corp., 374 F.Supp. 1166 (D.Del. 1974). Be-

fore further proceedings on the remaining validity and

infringement issues in that case occurred, the present

suit was filed by BTL.

At an early stage in these proceedings, Hughes moved

for dismissal on the ground that no interference existed.

This Court was unwilling to hold on the record then

extant that the patents were non-interfering. Accordingly

that motion was denied. 185 U.S.P.Q. 660. G.I. partici-

pated in the briefing of that motion and urged that a

three-way interference existed. However, as a result

of a settlement agreement with Hughes, G.I. ceased

participating in these proceedings prior to the argument

on the Hughes’ motion. See 185 U.S.P.Q at 661.

Following denial of the dismissal motion, Hughes

dropped its position that the Kerwin and Dill patents

were non-interfering and the case proceeded to trial on

the merits. The matter is now ready for decision.

The purpose of a suit under 35 U.S.C. Sec. 291 is to

establish priority of invention as between patentees. Pri-

ority is determined by the standard found in 35 U.S.C.

Sec. 102(g):

. . . In determining priority of invention, there

shall be considered not only the respective dates of

conception and reduction to practice, but also the

reasonable diligence of one who was first to conceive

and last to reduce to practice, from a time prior

to conception by the other.

da

In the instant suit, the parties have stipulated to the

Hughes dates determined by this Court in the Hughes

v. General Instrument infringement action.? The parties

therefore presented this Court with proofs only respect-

ing BTL’s dates of conception and reduction to practice.

In the event that the Cuurt were to determine that the

Kerwin invention was conceived prior to May, 1966, and

reduced to practice after November 17, 1966, BTL also

sought to show that the Kerwin inventors exercised dili-

gence from prior to May, 1966 until such time as they

had achieved a reduction to practice.*

The invention in the priority contest is directed to a

semi-conductor device known as a “silicon-gate field

effect transistor”. (“SGFET’). A field effect transistor

(“FET”) is a three-electrode electronic amplifier formed

in a small semi-conductor. The semi-conductor is usually

silicon and is referred to as a “slice”, “chip”, or “wafer”.

The three electrodes are known as the “source”, “drain”,

and “gate”. The source and the drain electrodes are

formed in the silicon wafer by “doping” selected portions

of the wafer with selected impurities. The area separat-

ing the source and drain is known as the “channel”, and

normally will resist the flow of current. However, in an

FET, the channel is overlayed with an insulating layer,

and the gate electrode is formed on top of that layer.

2 The Dill invention was conceived on May 1, 1966, and reduced

to practice with the filing of the patent application on Novem-

ber 17, 1966.

’ BTL did not attempt to prove a date of conception prior to

March of 1965, the date of conception awarded to G.I. 374 F.Supp.

1171. However, since BTL was not a party to the prior suit, it is

not bound by any of this Court’s findings in that action. Further,

there was no attempt here to establish G.I.’s March 1965 date.

Accordingly, this Court need not address the issue of whether,

under 35 U.S.C. Sec. 102(g), a March 1965 conception by G.I.

would moot the issue of BTL’s diligence, assuming BTI. conceived

before Hughes, but after March 1965, and reduced to practice after

November 17, 1966.

5a

When an appropriate voltage is applied to this gate, cur-

rent is able to flow along the previously resistant path

between the source and drain. Further, variations in the

voltage applied to the gate will result in variations in

the current flowing between the source and drain.

Prior to the development of the invention in suit, a

major problem in fabricating these devices was the posi-

tioning (or alignment) of the gate electrode. The devices

are of very small dimensions and it was desirable to

make them even smaller. It accordingly was very difficult

to align precisely a strip of metal (usually aluminum)

on top of the insulator which overlaid the channel sep-

arating the source and drain.

The SGFET avoided this alignment problem completely

by virtue of its se-called “self-alignment” feature. To

effect self-alignment, a silicon layer is positioned over

the insulating layer covering the channel on the chip

prior to forming the source and drain regions. The dop-

ing or diffusion step which results in formation of the

source and drain is then performed. The silicon acts as

a “mask” during this step and prevents doping of the

channel region. The source and drain are thus formed

precisely at the edges of the silicon gate, and the gate

itself becomes sufficiently doped to become a conductor

and thus act as an electrode.

This sequence, performing the diffusion step after

placment of the gate electrode, had been impossible using

the prior art, for the metal gates, usually aluminum,

would melt at the temperatures required for diffusion.

The Work At Bell Telephone Laboratories.

Work on a SGFET by the Kerwin‘ group can be

traced to a meeting held at BTL in February, 1966. The

* The named inventors on the BTL patent are Robert E. Kerwin,

Donald L. Klein and John C. Sarace. At all relevant times, Klein

was supervisor of the group which included Kerwin and Sarace.

(PX-3; T-43-44, 275, 680) Since Kerwin was the first-named in-

ventor, the Court as a matter of convenience uses the terms “Kerwin

group” and “Kerwin invention”.

6a

meeting was called by Donald Klein, and was attended by

members of his research group, as well as by other BTL

technical personnel. Kerwin and Sarace were among those

attending the meeting. (T-49, 278, 680)

The purpose of the meeting was to discuss problems

which arose in making integrated circuits composed of

large numbers of solid state devices. A significant prob-

lem respecting “yields” was always present in the manu-

facture of the circuits in a multi-step process. Even when

each step in a process was highly efficient and resulted

individually in a high yield, after a sequence of many

such steps had been performed on a given device array,

the percentage of operative devices in the area would

be unsatisfactorily low. To overcome this problem, Klein

honed that his group would be able to come up with a so-

called “go, no-go” sequence of device fabrication steps.

A sequence of “go, no-go” process steps could approach

100% efficiency for it envisaged the use of materials

which either would or would not be subject to reaction

in a given chemical process step. (T-45-47; 49-50)

During the course of this meeting, at which a variety

of potential process steps were discussed, Kerwin came

to the key realization that placement of a thermally re-

sistant gate prior to doping of the source and drain

regions would eliminate the problems encountered in

aligning the gate electrode. (T-280-85) Silicon, a ma-

terial with which the group had experience, was the

thermally resistance material chosen. (T-286) The

SGFET fabrication process which resulted from this

meeting was recorded by Klein (PX-10). Somewhat later,

in early March, following discussion between Klein and

his superior Hugh M. Cleveland, the latter developed a

chart detailing the work assignments that would be in-

volved in carrying out the project. (PX-15; T-576-77) In

Ta

summary, the fabrication sequence involved the following

steps: °

1, Preparation of a silicon chip. This step, while

rather involved and time consuming, is only the prepa-

ration of starting materials. It does not relate directly to

the invention.

2. Deposition of an insulating layer on the upper

surface of the chip. The parties disagree on which in-

sulating materials were initially embraced by the Kerwin

group. Without question, silicon nitride was the insulator

of choice by those at the February meeting. The con-

temporaneous evidence, however, convinces this Court

that silicon nitride was not the only insulator considered.

Reference to silicon nitride was somewhat equivocable,

e.g., Klein’s notes (PX-10) in reference to this insulating

layer, contains the notation “(Si,N,?)” and Cleveland’s

notes (PX-15) expressly indicate that an alternative to

silicon nitride was considered. This alternative insulator

was a layer of silicon oxide over the silicon, followed by

a layer of silicon nitride. This two layer insulating medi-

um is referred to as a “sandwich”. See Fig. 1, Appendix.

8. Deposition of a layer of silicon oxide on top of the

insulating layer. See Fig. 2, Appendix.

4. The selective etching away of the silicon oxide layer

from the surface of the chip. This etching was to be

effectuated by a so-called photoresist technique. The pho-

toresist technique is used to place a plastic film over

a portion of the surface of the device.* The plastic film

5’ The following enumeration of steps is somewhat arbitrary.

Further, the list is not all inclusive; steps of minor relevance to

the discussion have been deleted. This fabrication sequence is also

found in the Kerwin patent. (PX-1)

* This technique, old in the art, involves coating the entire sur-

face of the chip with a plastic material having photochemical

properties. A photographic “mask” containing appropriate apper-

tures could then be placed over the surface. The masked chip is

8a

then functions as an etch mask for the subsequent re-

moval of undesired portions of the underlying silicon

oxide layer. See Fig. 3(A), Appendix. This is possible

because certain agents which will dissolve silicon oxide,

e.g., ammonium bifluoride, will be unreactive to the

plastic film. Further, the ammonium bifluoride will have

little effect on the underlying silicon nitride layer—thus

in the jargon of the BTL group, the etch process would

be “go, no-go”—go as to the silicon oxide and no-go as to

the silicon nitride.

The remaining portions of the photoresist material are

then removed. See Fig. 3(B), Appendix.

5. Deposition of a silicon layer across the entire sur-

face. See Fig. 4, Appendix.

6. Placement of a plastic film by photoresist procedure

over selected portions of the silicon layer, followed by

etching away of a portion of the silicon layer with a

mixture of hydrofluoric, nitric and acetic acids satu-

rated with iodine. This mixture has little effect on the

layers underlying the silicon. Subsequently the plastic

film is removed by suitable solvent. See Fig. 5, Appendix.

7. Removal of exposed silicon oxide by use of ammon-

ium bifluoride which will remove exposed SIO, but have

little effect on silicon or silicon nitride. See Fig. 6, Appen-

dix.

8. Removal of the silicon nitride layer by use of hot

phosphoric acid, a solvent to which the underlying silicon

or, in the case of the sandwich, silicon oxide, is impervi-

ous. In the case of the sandwich, underlying silicon oxide

must then also be removed, again using ammonium bi-

then exposed to light, the light being allowed to strike only those

areas of the chip on which it is desired to have the plastic film

remain. Following exposure to light, the unexposed portions of the

plastic film are removed with an appropriate organic solvent, with

the exposed portions of the plastic film remaining intact.

9a

fluoride. In these etch steps, the silicon gate functions

as an etch mask over the underlying insulator. These

etch steps are followed by the diffusion or “doping”

step, which results in formation of the source and drain

electrodes. During this latter procedure, the silicon gate

acts as a diffusion mask. See Fig. 7.

9. Metallization. This step involves placement of metal

on the electrode surface. This is required in order to

facilitate attachment of wires to the device.

Following the February meeting, BTL investigators

immediately began to try to produce field effect tran-

sistors using the newly devised fabrication sequence.

Many of the individual steps in the process, however,

were time-consuming, though routine. Accordingly, the

first semi-completed devices were not tested until late

May or early June of 1966. The devices which were then

tested employed a single silicon nitride layer, and not the

sandwich, as a gate insulator. Further, these devices

were not “metallized”. That is, the devices did not have

metal covering the electrode surfaces for the attachment

of wire leads.

Accordingly, the devices were tested using a so-called

probe test.

A probe test involves the physical placement of wires

against the electrode surfaces—the physical placement

being facilitated by holding the device array in a clamp

and moving wire probes with a micrometer-like screw

down onto the appropriate surface locations. The oper-

ator performing the test peers through a microscope

while making contact to ascertain that the wires are

being held against the desired electrode. (T-194-99)

The late May-early June probe tests of the nitride de-

vices were clearly successful. The tests showed a “tran-

sistor effect”, i.e., they showed drain-to-source current

as a function of drain-to-source voltage for different ap-

10a

plied gate voltages, which curves were within a commer-

cially accepted range; and the tests showed this result

was true for a high proportion of the devices tested.

(PX-24)

After the probe tests were performed, Sarace at-

tempted to metallize the devices. The conventional pro-

cedure would have been to use a so-called “aluminization”

process. The parties agree that such a process would have

been routine and its effectuation would have been within

the purview of one of ordinary skill in the art.’ Sarace,

however, elected to perform a “platinization” procedure.*

This procedure was somewhat experimental but was also

a more rapid and convenient procedure. (T-81, 151).° Un-

fortunately for Sarace, the platinization procedure, which

was performed in late June 1966, produced only “short-

ed” devices. (PX-16 at 56; T-741-42)

Up until this time, work on the silicon gate project

had required the efforts of several individuals. From

this time on, however, Sarace was the only BTL employee

to be assigned essentially full-time to the project. (T-703-

03, 732, 788) Following the failure with platinization,

7 Although Dietrich A. Jenny, testifying for Hughes, agreed that

the process itself would have been routine, he testified, in effect,

that the outcome could not have been predicted with certainty.

(T-880-81, 888)

* Sarace did not actually perform the platinization step himself.

That procedure was performed by others at BTL at his request.

(See Dx-16 at 16; T-691-92.) Similarly, an aluminization would

have been performed by others. (T-714)

®*The platinization procedure in essence involved the vacuum

deposition of metallic platinum over the surface of the device fol-

lowed by a heat treatment. The heat would convert any platinum

over silicon into platinum silicide, a conductor. Following this

formation of platinum silicide over exposed silicon, the wafer

could be washed with aqua regia to remove unreacted platinum.

(T-79-81, 347-48) In contrast, an aluminization procedure would be

more time consuming for it would involve photolithographic mask-

ing operations.

lla

Sarace did not immediately switch to a conventional

metallization procedure. Rather, he performed a micro-

scopic examination of the shorted device in an effort to

determine the source of the shorts. This examination

failed to reveal the source of the shorts, but it did dis-

close an over-etching step. (PX-16 at 56) Although this

over-etching had apparently not been exemplified in prior

tests of the electrical characteristics of the devices, Sarace

proceeded with a series of tests aimed at developing more

precise etching-step parameters. This phase of Sarace’s

work continued into August of 1966. In addition, Sarace

worked on several other problems affecting the devices.”

During the course of his work on these problems, Sar-

ace became aware of a further problem, a hysteresis ef-

fect on the devices having a silicon-to-silicon nitride

interface.”

Hysteresis can be considered a type of electrical in-

stability."* While hysteresis did not make these devices

totally unsatisfactory, it was a deficiency which it was

desirable to overcome. Accordingly, Sarace directed his

efforts to overcoming the hysteresis problem. A solution

to the hysteresis problem was somewhat elusive. Sarace’s

10 These problems included, inter alia: (1) overly high “P-channel

threshholds” initially thought to be caused by improper cleaning

techniques, but which were solved by use of a hydrogen anneal

(T-710-11) ; and (2) the failure of the photoresist material to adhere

properly to silicon. (T-709)

11 Sarace explored this hysteresis effect using capacitors rather

than SGFET’s as a test vehicle. This was because capacitors con-

taining a silicon-to-silicon nitride interface were easier to fabricate

than were SGFET’s, and tests of the electrical properties of such

capacitors could be extrapolated to SGFET’s. (T-712, 773-74)

12 The hysteresis was exemplified by a displacement in plots of

gate capacity vs. gate voltage which was observed when a plot that

had been made while increasing voltages was compared with a plot

made immediately thereafter, while decreasing voltages. See, e.g.,

PX-42 at 7.

12a

notebook (PX-16) indicates that up until October 17, 1966

no solution to the hysteresis problem had been found.

There are no entries from October 17, 1966 until Janu-

ary 17, 1967 in the laboratory notebook of Sarace, the

only BTL employee then devoting full-time to the SGFET

project. The activities at BTL during this period are not

recorded on a day-to-day basis and, therefore, must be

gleaned from (1) the testimony of Sarace and others;™

and (2) certain other supporting documents. The earliest

dated documents showing a solution to the hysteresis

problem are in form of viewgraph slides (PX-42) which

were prepared in conjunction with a talk that Sarace

gave at a meeting with another group of BTL workers

in Allentown, Pennsylvania. This meeting was held De-

cember 9, 1966 (T-793), and the viewgraphs were pre-

sumably prepared shortly before that date. These view-

graphs slides show that sometime prior to December 9,

Sarace had employed the so-called “sandwich” construc-

tion and that this construction had resulted in elimina-

tion of the hysteresis problem.

Another document which supports a November date

of completion for a SGFET utilizing the sandwich con-

struction is a memorandum dated January 5, 1967 (PX-

48) sent from Mr. Biondi, the director of the electron

device laboratory to Mr. Cave of the BTL Patent De

partment. Although the memorandum is over Mr. Bi-

ondi’s signature, it was actually written by Kerwin. (T-

326) This memorandum indicates that subsequent to a

prior memorandum dated November 15, 1966 (PX-35),

the “sandwich” process was employed; that the sandwich

13 Klein testified to contact with Sarace during the period in which

Sarace was the only BTL inventor working full-time on the silicon

gate project. (T-166, 174) There was also testimony by other work-

ers at BTL who had some minor recollection of contact with Sarace

in connection with the SGFET project in the fall of 1966. See, e.g.,

testimony of Roger Edwards. (T-503 D-504)

13a

process improved electrical stability; and that sandwich-

containing devices were undergoing life tests.

In life tests, the devices are subject to stress condi-

tions, e.g., elevated temperatures, and periodically data

is gathered from the devices to check for changing elec-

trical characteristics; that is, the devices are placed in

a furnace and removed at given intervals for electrical

testing, then returned to the furnace for a further time

interval. These life tests are used to indicate the “sta-

bility” and “reliability” of the devices. (T-152, 321-22)

Also they would show whether a device would “last long

enough to be useful”. (T-231) These tests required, as

a practical matter, that the devices first be metallized.

(T-152, 714)

Not until January 1967 did the Patent Department at

BTL commence preparation of a patent application di-

rected to the Kerwin invention. The application was filed

March 27, 1967.

The Existence Of An Interference

Although Hughes at one time acceded to BTL’s posi-

tion that an interference existed, the Court expressed

reluctance to accept a stipulation on this question. Since

the question of whether an interference exists may, in

a Sec. 291 suit, be characterized as going to the Court’s

subject matter jurisdiction, the Court deemed it inap-

propriate for the parties to stipulate to the matter. The

Court asked the parties to address themselves anew to

the question of the existence of an interference in their

post-trial briefs.

Hughes again contends that no interference exists, but

the Court is of the view that the evidence in the record

unequivocally supports the existence of an interference.

As this Court noted in denying Hughes’ dismissal mo-

tion, the allegedly interfering claims of the Dill and the

l4a

Kerwin patents differ in only one respect—the process

claimed in the Dill patent recites a step of “etching

away the exposed portions of said insulating layer”,

while the corresponding step in the Kerwin patent reads

“etching away the exposed portions of said insulating

layer using said silicon layer as a mask”. (emphasis

added). See 185 U.S.P.Q. at 661.

However, in Dill’s original Invention Disclosure which

he submitted to the Hughes’ Patent Department, he re-

ferred to the use of the “Si layer as a mask”. (Pretrial

Order Par. 27). Further, the parties agree that Dill cor-

rectly testified before this Court in the Hughes v. Gen-

eral Instruments trial that his invention did not require

a separate masking step and that those skilled in the

art would recognize that the silicon gate itself acted as

an etch mask. (Pretrial Order Par. 33). Thus, this Court

is satisfied that Claim 1 of the BTL patent and Claim

5 of the Hughes patent are, in fact, interfering.

After trial, Hughes advanced two additional arguments

in support of the view that the patents were not inter-

fering. First, Hughes contended that if the Dill process

were modified to include the deposition of metal on

top of the silicon gate, then that metal, and not the sili-

con, would act as an etch mask. There is no testimony

or suggestion in the record, however, that indicates the

Dill process has never been so practiced. Further, it

is not evident to this Court that even if the process

were so practiced that the metal would perform as the

mask to the exclusion of the underlying silicon. Sec-

ond, Hughes contended that the use of silicon as an etch

mask in the Kerwin process refers to the use of silicon

as a mask for the field oxide layer, which layer is

lacking in the Dill process. Again, since the issue was

raised after trial, the Court has no testimony in sup-

port of this view. However, as this Court understands

the Kerwin process, the fact that silicon may act as

15a

an etch mask for the field oxide does not diminish the

fact that the silicon gate also inevitably serves as an

etch mask with respect to the gate insulator. According-

ly, the Court finds that an interference for purposes of

Sec. 291 does, in fact, exist.

Conception.

A “conception is the mental part of the process in ar-

riving at invention”. Electro-Metallurgical Co. v. Krupp

Nirosta Co., 122 F.2d 314, 318 (8rd Cir. 1941). Concep-

tion is not, however, merely “the perception or realization

of the desirability of producing a certain result; rather

it is the perception or realization of the means by which

the result can be produced.” 1 Rivise and Caesar, Inter-

ference Law and Practice Sec. 110 (1940). Further, this

mental possession of the means must be such that comple-

tion or effectuation of the invention requires no more than

routine skill. Accordingly, the need for extensive subse-

quent research will negate an earlier asserted date of con-

ception. See Alpert v. Slatin, 305 F.2d 891, 894 (C.C.

P.A. 1962). It is clear that at their February 1966 meet-

ing, the BTL group did more than merely recognize a

problem. Hughes argues, however, that the February

conception was incomplete in that extensive research was

required to reduce the February conception to practice.

The BTL inventors acknowledged that at the time of the

February meeting, they were uncertain of their ability

to carry out certain of the process steps envisaged in

their conception. See, eg., T-287. Viewing the events

after the fact, however, this Court is convinced that

BTL inventors faced no problems in pursuing a reduction

to practice which required the use of inventive skill.

That is, while it was impossible in February 1966 to state

with certainty that the BTL process would work, events

would show that the process did work. Further, while the

process of reducing the invention to practice was lengthy,

16a

this was not primarily the result of extensive experi-

mentation required for a successful reduction to practice.

Many of the individual process steps, though old in the

art, were quite time consuming. Further, much of the

experimentation was directed to solving the hysteresis

problem, a problem which in itself would not have pre-

cluded a successful reduction to practice.* Accordingly,

this Court is convinced that BTL has met its burden pf

proof ** respecting its entitlement to a February-March

conception date.

Reduction To Practice.

“A process is said to be reduced to practice when the

series of steps constituting the process are carried out in

such a manner as to demonstrate the practicability of the

process.” Rivise & Caesar, supra, Sec. 131 (citing Corona

Cord Tire Co. v. Dovan Chemical Corp., 276 U.S. 358

(1928)). Further, in the case of a product-producing

process, a reduction to practice requires the establishment

of utility for the products produced by the process. See,

e.g., Tennessee Valley Authority v. Monsanto Chemical

Co., 383 F.2d 973, 977 (5th Cir. 1957). Accordingly, the

date of BTL’s reduction to practice is the date on which

BTL can show that it produced a useful field-effect

transistor using the silicon gate process.

1¢ Hughes also argued that the February concept‘on was deficient

in that it did not envisage the use of the sandwich construction,

which construction was ultimately used by BTL in their completed

devices. As is clear from the discussion of facts supra, however,

this Court is of the view that the sandwich construction is amply

demonstrated in the documents that came out of the February

meeting.

15 The Kerwin inventors, who filed their application five months

after Dill, would be the junior party in the Patent Office and thus

have borne the burden of proof. 37 C.F.R. Sec. 1.257. Although it is

not clear that the burden should always be so allocated in a Sec. 291

proceeding, where as here the junior party is also plaintiff, this

Court has no burden concluding that such party should bear the

burden of proof.

17a

BTL contends that such a reduction to practice was

shown by the probe tests in the period of late May to

early June 1966. Hughes contends that the probe tests

involved less than completed devices and, as such, they

were insufficient to demonstrate a reduction to practice.’

There are a multiplicity of opinions dealing with the

question of whether or not a given laboratory or bench

test constitutes a reduction to practice in a particular

case. See, e.g., Rivise & Caesar, supra, Sec. 143 and

Sec. 144. The frequently stated rule is that “a test under

service conditions is necessary in those cases, and in

those only, in which persons qualified in the art would

require such a test before they are willing to manufac-

ture and sell the invention, as it stands.” Sinko Tool

& Manufacturing Co. v. Automatic Devices Corp., 157

F.2d 974, 977 (2d Cir. 1946).

While this Court is convinced that the May-June 1966

probe tests constituted a successful intermediate experi-

ment, BTL has failed to establish that those tests demon-

strated that the devices possessed the utility required for

a reduction to practice. The testimony of BTL’s own

inventors was that life tests of completed devices were

necessary in order to demonstrate that the devices were

reliable and useful."’ These life tests establishing a reduc-

tion to practice were not completed until December 1966-

January 1967.

16 Tt is Hughes’ position that a metallized device is a prerequisite

to reduction to practice, notwithstanding the fact that the claims of

the Kerwin patent do not encompass a metallization step, and that

metallization was an established art.

17 BTL urges that this Court’s opinion in Hughes Aircraft Co. v.

General Instruments, Inc., 374 F.Supp. 1166, implies that successful,

corroborated probe tests of an SGFET will suffice for a reduction to

practice. This Court does not, however, read its prior opinion as so

holding.

18a

Diligence.

Since BTL has established a date of conception prior

to Dill’s date of conception but has established a date

of reduction to practice subsequent to Dill’s date of re-

duction to practice, BTL can prevail only if the Kerwin

group is found to have exercised reasonable diligence from

just prior to Dill’s conception up until their reduction to

practice in December 1966-January 1967.

“The party chargeable with diligence must account

for the entire period during which diligence is required.”

Gould v. Schawlow, 363 F.2d 908, 919 (C.C.P.A. 1966).

Further, in making such account, the testimony of the

inventor alone is usually deemed insufficient. Id. at 919;

Sletzinger v. Lincoln, 410 F.2d 808, 812 (C.C.P.A. 1969).

There is no question that the Kerwin inventors were

diligent from the time of their February-March 1966 con-

ception up until the time of the probe tests in May-June

1966. In the second half of 1966, however, Sarace was

the only inventor devoting full time to the project and

his records show a substantial void, from October 17,

1966 until January 17, 1967. Sarace testified that it was

in this period that he returned to the “sandwich” con-

ception. 2nd constructed and tested such a device, though

his notes do not reflect this. However, certain other evi-

dence does corroborate Sarace’s testimony of fulltime

efforts on the SGFET.

On December 9, Sarace presented viewgraphs with

test data from sandwich devices to a meeting at Allen-

town, and this indicated that BTL workers had com-

pleted fabrication of these devices by late November

1966."* Further, the January 5, 1967 Biondi memoran-

18 Such date would be required in order for Sarace to test the

devices and prepare for the December 9 presentation. As indicated

by the November 15, 1966 and January 5, 1967 Biondi memorandum

(PX-35 and 48), sandwich devices had not been constructed before

mid-November 1966.

19a

dum (PX-48) indicates that the time-consuming life tests

were then underway.

While a day-to-day corroboration of Sarace’s testimony

regarding his activity during the fall of 1966 would be

desirable, this Court concludes that its absence is not

fatal to BTL’s case. It is sufficient that BTL has estab-

lished by competent evidence an inference more reason-

able than not that work on the silicon gate process con-

tinued uninterrupted from prior to Dill’s date of con-

ception until completion of the life tests which consti-

tuted a reduction to practice. The Court thus finds that

BTL has met its burden of proof regarding the exercise

of reasonable diligence.’

Accordingly, BTL is declared to be prior inventor of

that subject matter common to the Dill and Kerwin pat-

ents.

Submit order.

1° Hughes argued vigorously that the time spent by Sarace pur-

suing a solution to the hysterisis problem should not be credited

toward reasonable diligence. This Court does not agree. Although

there is authority in support of the view that diligence respecting

one element of a combination is not diligence respecting the use of

that element in combination with another, Riche v. Permutit Co.,

47 F.Supp. 275 (D.Del. 1942), that authority is not applicable here.

In this Court’s view, the silicon gate process, as it existed in the

fall of 1966, cannot be readily subjected to rigid compartmentaliza-

tion. Accordingly, Sarace’s work on problems inhibiting commer-

cial utilization of the process should be deemed reasonable dili-

gence, whether that work encompassed the whole of the process,

one step in the process, or an ultimately abandoned step.

20a

APPENDIX

FIGURE 1

WYGLEL Li tt me My

A B e

Schematic representation of (A), silicon (Si) chip on

which a silicon nitride (Si,N,) layer has been deposited

and (B), silicon chip on which a silicon oxide (SiO,)

layer has first been deposited, followed by a silicon nit-

ride layer. Figure 1B represents the so-called sandwich

construction. It is that construction which is depicted

in all of the following figures.

FIGURE 2

SiO.

SSS eT

SE WELLL LAS

$i

Schematic representation of device following completion

of step 3.

FIGURE 38

SA Cs. SSSA yt

\GB TEDL. LTT ~ 1, MELEE

A B

2la

FIGURE 4

$i

SSO SSSSE St,

CLA lWEDEEZEZZEE a

Schematic representation of device following step 5.

FIGURE 5

s ¢

PRES} (— ee se

— oe

WELLL LEB

$s:

Schematic representation of device following step 6.

FIGURE 6

se $:

eee Os

\ OPT

Schematic representation of device following step 7.

FIGURE 7

| wa ee ge

Ss W7N ——. i: SS — S3Ny

YTB Wr Wh i,

drain

Sevrce

Schematic representation of device following step 8.

22a

Schematic representation of (A) device following photo-

resist step and (B) device following etching of SiO, and

removal of photoresist.

FINAL JUDGMENT

(entered November 16, 1976)

This action under 35 U.S.C. Sec. 291 was filed Novem-

ber 11, 1974. At a hearing on March 17, 1975, defendant

General Instrument Corporation represented in open

Court that it was, in effect, giving up its Watkins Patent

3,576,478 involved in this interfering patents case. There-

after General Instrument Corporation did not participate

in the trial of this action and did not offer any evidence

either to establish invention dates in favor of its own

patentee or to challenge the invention dates of plaintiff’s

patentees.

The case was tried to the Court without a jury on

November 17 to 21, 1975, fully briefed, and argued on

March 16, 1976. The Court delivered its Opinion on July

19, 1976, setting forth its findings of fact and conclusions

of law.

By motion filed September 7, 1976, General Instrument

Corporation moved to reopen the case for the purpose

of entering evidence of the conception and reduction to

practice dates of the Watkins invention. The Court de-

nied General Instrument Corporation’; motion in its

Opinion delivered October 26, 19'76.

Now Therefore It Is Hereby Ordered, Adjudged And

Decreed That:

1. Plaintiff Bell Telephone Laboratories, Incorporated

is owner of United States Patent 3,475,234.

2. Defendant Hughes Aircraft Company is owner of

United States Patent 3,544,399.

_—

23a

8. Defendant General Instrument Corporation is own-

er of United States Patent 3,576,478, General Instrument

Corporation having admitted such ownership in its plead-

ings.

4. This Court has jurisdiction over the parties to this

action.

5. This Court has jurisdiction over the subject matter

of this action as between Bell Telephone Laboratories,

Incorporated and Hughes Aircraft Company.

6. United States Patent 3,475,234 and United States

Patent 3,544,399 are interfering patents within the mean-

ing of 35 U.S.C. Sec. 291.

7. Robert E. Kerwin, Donald L. Klein and John C.

Sarace the patentees of United States Patent 3,475,234,

are prior inventors over the patentee of United States

Patent 3,544,399 of that subject matter common to those

two patents.

8. This judgment is a final judgment on priority of

invention adverse to the patentee of United States Pat-

ent 3,544,399.

9. This Court has jurisdiction over the subject matter

of this action as between Bell Telephone Laboratories,

Incorporated and General Instrument Corporation, and

United States Patent 3,475,234 and United States Patent

3,576,478 are interfering patents within the meaning of

35 U.S.C. Sec. 291, General Instrument Corporation hav-

ing admitted such jurisdiction and interference in its

pleadings.

10. General Instrument Corporation having failed to

present a defense to this action, judgment against it

by default, and not based upon any findings of fact re-

specting the dates of conception and reduction to prac-

tice of the invention of United States patent 3,576,478,

is entered herein pursuant to Rule 55(b) (2) F.R.Civ.P.

24a

11. This default judgment is a final judgment adverse

to the patentee of United States Patent 3,576,478 as to

both affirmative and defensive use of that patent.

12. Plaintiff shall recover its costs in an amount to

be determined, such costs to be borne equally by de-

fendants for the period to and including March 17, 1975

and to be borne by Hughes Aircraft Company for ”

period after March 17, 1975.

So Ordered this 16th day of November, 1976.

Enter: November 16, 1976

/s/Caleb M. Wright

Senior Judge

NOTICE OF APPEAL

(Filed December 2, 1976)

Notice is hereby given that Hughes Aircraft Company,

one of the defendants in the above-captioned action,

hereby appeals to the United States Court of Appeals

For The Third Circuit from the Final Judgment entered

in this action on the 16th day of November, 1976.

Connolly, Bove & Lodge

By

Farmers Bank Building

10th and Market Streets

Wilmington, Delaware 19899

Attorneys for Defendant

Of Counsel: Hughes Aircraft Company

Dugald S. McDougall

Melvin M. Goldenberg

135 South LaSalle Street

Chicago, Illinois 60603

Robert Thompson

5250 West Century Boulevard

Los Angeles, California 90009

25a

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

No. 77-1061

BELL TELEPHONE LABORATORIES, INC.

Vv.

HUGHES AIRCRAFT COMPANY and GENERAL

INSTRUMENT CORPORATION

HUGHES AIRCRAFT COMPANY,

Appellant

APPEAL FROM THE UNITED STATES DISTRICT COURT FOR

THE DISTRICT OF DELAWARE

(District Court Civil Action No. 74-238)

Argued September 6, 1977

Before SEITZ, Chief Judge, MARIS and C!8BONS,

Circuit Judges

Dugald S. McDougall

Melvin M. Goldenberg

Chicago, II.

Thomas S. Lodge

Wilmington, Del,

Robert Thompson

Los Angeles, Cal.

Attorneys for Appellant

26a

Albert E. Fey

Robert C. Morgan

Fish & Neave

New York, N.Y.

Edward Dreyfus

New York, N.Y.

Richard F. Corroon

Potter, Anderson & Corroon

Wilmington, Del.

Peter V. D. Wilde

Murray Hill, N.J.

Attorneys for Appellee

OPINION OF THE COURT

(Filed October 25, 1977)

Maris, Circuit Judge

This is an appeal by Hughes Aircraft Corporation

(herein “Hughes”) from a final judgment of the district

court in favor of the plaintiff in an action brought by

Bell Telephone Laboratories, Inc. (herein “Bell”) against

Hughes and General Instrument Corporation to establish

priority of invention as among their conflicting patents.

Judgment by default having been entered against General

Instrument Corporation, it is no longer involved in the

case. Bell and Hughes hold interfering patents claiming

the same invention, the Bell patent being Patent No.

3,475,234 applied for March 27, 1967 by Robert E. Ker-

win, Donald L. Klein and John C. Sarace and issued Oc-

tober 28, 1969 to Bell as assignee, and the Hughes patent

being Patent No. 3,544,399 applied for October 26, 1966

by Hans G. Dill and issued December 1, 1970 to Hughes

as assignee. The judgment of the district court awarded

27a

priority of invention to Bell over Hughes and it is that

determination which Hughes attacks on this appeal.

The invention involves a process for manufacturing a

type of electronic amplifying device commonly known as

a silicon gate field effect transistor. Hughes concedes,

and the district court found, that the invention was con-

ceived by Bell’s inventors in the period February-March

1966 and that Dill, the Hughes inventor, did not conceive

the invention until May of that year. However, the parties

also agree and the district court found that reduction to

practice of Dill’s invention took place not later than Oc-

tober 26, 1966 when he filed his patent application, where-

as Hughes contended and the court found that reduction

to practice of the Kerwin, Klein and Sarace invention did

not take place until the period December 1966-January

1967. Therefore, in order to establish its claim to priority

Bell sought to prove that it had exercised reasonable dili-

gence in reducing the invention to practice.’ The district

court after considering the voluminous evidence offered on

this issue found as a fact that Bell had exercised reason-

able diligence in this regard during the significant period

of time, May to December 1963, and awarded priority of

invention to Bell. A more detailed description of the facts

is contained in the opinion filed by Judge Wright in the

district court, 422 F. Supp. 372, and need not be repeated

here. Whether the finding of reasonable diligence was

135 U.S.C. § 102 provides:

A person shall be entitled to a patent unless—

(g) before the applicant’s invention thereof the invention

was made in this country by another who had not abandoned,

suppressed, or concealed it. In determining priority of inven-

tion there shall be considered not only the respective dates of

conception and reduction to practice of the invention, but also

the reasonable diligence of one who was first to conceive and

last to reduce to practice, from a time prior to conception by

the other.

28a

erroneous is the specific issue which Hughes raises on this

appeal.

The appellant accepts, as it must, the fact that Rule

52(a) F.R.C.P. requires this court to affirm the findings

of fact of the district court unless we can say that they

are clearly erroneous. Whether reasonable diligence has

been exercised is a question of fact. Electro-Metallurgical

Co. v. Krupp Nirosta Co., 122 F.2d 314, 317 (3d Gir.

1941), cert. denied, 314 U.S. 699 (1942). Hughes con-

tends, however, that the application of Rule 52(a) must

be modified in this case and presents three arguments in

support of that contention. First, it argues that the dis-

trict court misconceived and misapplied the applicable

legal standard as to what work constitutes reasonable

diligence in such a situation. It is doubtless true that

work quite unconnected with the reduction of an inven-

tion to practice cannot be considered.* But whether par-

ticular work is sufficiently connected with the invention

to be considered to be in the area of reducing it to prac-

tice must be determined in the light of the particular

circumstances of the case which may be as varied as the

mind of man can conceive. It is thus peculiarly a question

of fact for the finder of the facts to determine in the

light of those circumstances. Here the district court found

that the work performed by Bell was sufficiently within

that area to constitute reasonable diligence. Our consid-

eration of the record satisfies us that this finding was

not erroneous, let alone clearly so.

The appellant next urges that as a matter of law Bell

should not be found diligent in view of the fact that after

June 1966 it cut back the number of staff members as-

signed to work on the invention. As to this, the record

shows, and the district court found, that probe testing in

2 Riche v. Permutit Co., 47 F. Supp. 275 (D. Del. 1942), affirmed

per curiam, 135 F.2d 922 (3d Cir. 1943), upon which the appellant

relies, was such a case.

29a

June 1966 indicated that the device produced by the proc-

ess of the invention functioned successfully. What re-

mained was the work of develeping the process to a point

where it would produce a commercially usable device, a

task which did not necessarily require the work of as

many staff members. Here again the question was one of

fact for determination by the fact finder. We see no er-

ror in the district court’s resolution of it.

Finally, the appellant urges that the district court

should not have considered as evidence of reasonable dili-

gence the oral recollection of the inventors uncorroborated

by documentary evidence. While it has been held that the

uncorroborated testimony of an inventor on essential is-

sues of priority is highly suspect and such testimony

should, therefore, generally be supported by corroborating

evidence, Campbell v. Spectrum Automation Co., 513 F.2d

932, 937-938 (6th Cir. 1975); Gould v. Schawlow, 363

F.2d 908, 919 (CCPA 1966), the corroborating evidence

need not take any particular form, MacMullen v. Santelli,

326 F.2d 1008, 1013 (CCPA 1964), but may be either

documentary or oral, Allen v. Blaisdell, 196 F.2d 527, 529,

531 (CCPA 1952). Since the function of the corroborating

evidence is to assist the fact finder in deciding whether

the inventor’s testimony is credible, the question whether

its amount and quality is adequate for that purpose is

peculiarly for the fact finder to pass upon in the light of

the circumstances of the case. Mathieson Alkali Works v.

Crowley, 1388 F.2d 281, 282 (D.C. Cir. 1943) ; Bennett v.

Serota, 477 F.2d 1385, 1390-91 (CCPA 1973). Here the

district court found that the testimony of the Bell invent-

ors as to their work in reducing their invention to prac-

tice was sufficiently supported by corroborating evidence

to be credited. We find no error in this regard.

In sum, we conclude from our examination of the

record in this case that the district court did not err in

its finding that Bell was reasonably diligent in reducing

30a

its invention to practice. Accordingly, its determination

that Bell as first inventor is entitled to priority for its

patent must be sustained. Our conclusion makes it un-

necessary for us to consider Bell’s alternative contention

in support of affirmance that it reduced its invention to

practice in June 1966 when it made its successful probe

tests, a date prior to Hughes’ reduction to practice.

The judgment of the district court will be affirmed.

A True Copy:

Teste:

Clerk of the United States

Court of Appeals for the

Third Circuit.