Petition — Lahman Manufacturing Co. v. Farmhand, Inc.

Supreme Court brief1978

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Text

FILED

} APR 6 1978

MICHAEL RODAK, JR., CLERK |

IN THE <<

Supreme Court of the Hnited States |

OCTOBER TERM, 1977

No. a 142]

LAHMAN MANUFACTURING COMPANY, _INC.,

and ROBERT ANDERSON, d/b/a PLATTE IM-

PLEMENT,

Petitioners,

vs.

FARMHAND, INC.

Respondent.

PETITION FOR WRIT OF CERTIORARI TO

THE UNITED STATES COURT OF APPEALS

FOR THE EIGHTH CIRCUIT

Kenneth D. Siegfried

2340 IDS Center

Minneapolis, Minnesota 55402

Telephone: (612) 339-0116

Joe L. Maynes

P. O. Box 1127

Aberdeen, South Dakota 57401

Telephone: (605) 225-5771

Attorneys for Petitioner

Schroeder, Siegfried, Ryan,

Vidas & Steffey

and

Maynes, Tonner & Maynes

Of Counsel

1978—Northwest Brief Printing Co., 316 Chicago Avenue, Minneapolis 55415—338-5078

TABLE OF CONTENTS

Page

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APPENDIX INDEX

A District Court Opinion after trial 192 USPQ

Pe SEED le wh bebo n6 660405 os A-1

B_ Court of Appeals Opinion affirming trial Court

ee TE kn Whe dnb 5 Sed) bbs ches 000% A-47

H Clark Equipment Company, et al v. Louis J.

Keller et al, (8th Cir. 1978) (not yet reported) . A-57

Appendix (in separate volume):

C Boyd Schiltz Patent No. 3,298,550

D_ Selected Portions of the Record on Appeal to

the Eighth Circuit

E_ Bruce Patent No. 1,628,871

F Claim 10 compared with the structure of Bruce

Patent (two parts)

G_ Selected Portions of the District Court Record,

not part of the Record on Appeal to the Eighth

Circuit, but in the transcript

TABLE OF AUTHORITIES

Cases:

Aluminum Company of America et al. v. Amerola

Products Corporation et al., (3 Cir. 1977), 552 F.

BE TD 6.6 0.6:0-06054506000000000R Ren Nees o8

American Infra-Red Radiant Co. v. Lambert Indus-

tries, Inc., 360 F. 2d 977, 989 (1966) ..........

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

Inc., 396 US. ST (ISEB) .. wwe cccscccccseces 9,

Brush v. Condit, N.Y. 1889, 132 U.S. 39 ..........

Burland v. Trippe Manufacturing Company (7 Cir.

1976) S43 F. 2d SBS... wc ccc ccccccccccscces

Clark Equipment Co. et al v. Louis J. Keller et al (8th

Cle. 1978), —— P.26 me on cccccvcccccccccseses

Dann v. Johnston, 425 U.S. 219 (1976) ...........

Digitronics Corp. v. The New York Racing Associa-

tion, Inc. et al. (2d Cir. 1977), 553 F. 2d 740 ....

Fred Whitaker Company v. E. T. Barwick Industries,

Inc. (5 Cir. 1977), 551 F. 2d 622 .............

Great Atlantic and Pacific Tea Co. v. Supermarket

Equipment Corp., 340 U.S. 147, reh. den., 340

Cr We <n vawc ccay eu sundaeeeeheneneseee 11,

Graham v. John Deere Co., 383 U.S. 1, 12-14 (1966)

rer rrr iA St aes ey 9,

International Telephone and Telegraph Corporation v.

Raychem Corporation (1 Cir. 1976), 538 F. 2d 453

Kamei-Autokomfort et al. v. Eurasian Automotive

Products (9 Cir. 1977), 553 F. 2d 603 ..........

Kearney & Trecker Corporation v. Cincinnati Mila-

cron, Inc. et al. (6 Cir. 1977), 195 USPQ 402 ....

Lawther v. Hamilton, Wis. 1888, 124 U.S. 1 .......

Pederson v. Stewart-Warner Corporation (7 Cir. 1976)

a, 2 ED 6 0.6%0sb 000 vbkeueneabecensune

Reynolds Metal Company v. Acorn Building Com-

ponents, Inc. (6 Cir. 1977), 548 F. 2d 155 .......

Roanwell Corp. v. Plantronics, Inc., 97 S. Ct. 538

EE 6606 Guideline Cab en dd dinen es oa’ 5, 6,

Rosen et al. v. Lawson-Hemphill, Inc. ir.

FS be ee : Y — —

Rutter v. Williams (10 Cir. 1976), 541 F. 2d 878 ...

Sakraida v. Ag Pro, Inc., 425 U.S. 273 (1976) ....

a en es eaneenbus Harte 8. 9, 10, 11,

. | om v. Bemis Com :

(7 Cir. 1977), 549 F. 34 833 conor

Siemens v. Sellers, Pa. 1887, 123 U.S. 276 ........

Systematic Tool And Machine et al. v. Walter Kidde

& Company, Inc. (3 Cir. 1977), 555 F. 2d 342 ...

The Robbins Company v. Dresser Industries, Inc.

- (5 —_ 1977), 554 F. 2d 1289

nion -

——.

U.S. Philips Corp. v. National Micronetics, Inc. et al.,

i. e . & 1} |

Winans v. New York, etc., R. Co., N.Y. 1859, 21

ee eS UE oo ccc nducnksceccecses

Wollensak v. Sargent, Conn. 1894, 151 U.S. 221, ...

Statutes:

26 U.S.C. 1254(1)

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IN THE

Supreme Court of the Gnited States

OCTOBER TERM, 1977

No.

LAHMAN MANUFACTURING COMPANY, INC.,

and ROBERT ANDERSON, d/b/a PLATTE IM-

PLEMENT

Petitioners,

vs.

FARMHAND, INC.

Respondent.

PETITION FOR WRIT OF CERTIORARI TO

THE UNITED STATES COURT OF APPEALS

FOR THE EIGHTH CIRCUIT

Petitioners pray that a writ of certiorari issue to review

the judgment of the United States Court of Appeals for

the Eighth Circuit entered in this case on January 11, 1978.

CITATION TO OPINIONS BELOW

The District Court’s opinion in this case is reported

at 192 USPQ* 749 (1976) and appears as Appendix A

of the separate volume being submitted within this Peti-

tion, the opinion of the Court of Appeals is reported at

196 USPQ 597 (8 Cir. 1978), and appears at Appendix

B, herein.

*Not otherwise reported.

JURISDICTION

The jurisdiction of this Court is invoked under 28 U.S.C.

1254 (1), as to the judgment by the Court of Appeals en-

tered January 11, 1978.

QUESTIONS PRESENTED

The questions presented by this Petition are the fol-

lowing:

1. Whether an invention based upon a combination

of admittedly old elements is patentable where the test of

synergism is not met.

2. Whether the test of obviousness, to the exclusion of

synergism, is the “only” correct test to be applied in deter-

mining whether a new combination of admittedly old ele-

ments amounts to invention.

STATUTES INVOLVED

§102 Conditions For Patentability—Novelty And Loss

of Right to Patent—

A person shall be entitled to a patent unless—

(a) the invention was known or used by others in

this country, or patented or described in a

printed publication in this or a foreign country,

before the invention thereof by the applicant for

patent, or

(b) the invention was patented or described in a

printed publication in this or a foreign country

or in public use or on sale in this country, more

than one year prior to the date of the applica-

tion for patent in the United States, or * * *.

35 U.S.C. 102

§103 Conditions For Patentability; Nonobviousness

Subject Matter

A patent may not be obtained though an invention is

not identically disclosed or described as set forth in section

102 of this title, if the differences between the subject mat-

ter sought to be patented and the prior art are such that

the subject matter as a whole would have been obvious at

the time the invention was made to a person having or-

dinary skill in the art to which said subject matter pertains.

Patentability shall not be negatived in the manner in which

the invention was made.” 35 U.S.C. 103.

STATEMENT OF THE CASE

Prior Proceedings

This is a patent infringement suit based upon Claims

10 and 11 of Boyd Schiltz Patent No. 3,298,550 which

relates to haystack movers. Defendants Counterclaimed for

a Declaratory Judgment that the patent is invalid. Juris-

diction in the District Court was based upon 28 U.S.C.

§§1338(a) and 1400(b).

After the bench trial, the District Court held the patent

valid and found Claims 10 and 11 infringed. Defendants

appealed from the District Court’s decision.

Prior to trial, the District Court granted Defendants’

motion to sever a Counterclaim for violation of the anti-

trust laws and the resolution of the issue of damages was

severed, awaiting a decision on the issue of validity and

infringement.

The Court of Appeals ruled that the findings of the Dis-

trict Court were adequately supported by the evidence, that

the District Court did not err ‘a applying the law to the

facts, and affirmed the opinion below, without mentioning

the issue of anticipation of the Schiltz patent or the rule

of law to be applied for a combination of old elements.

Synergism, as it applied to a combination of admittedly

old elements was not mentioned in the decisions, either

at the Appellate Court level or District Court level, de-

spite arguments thereon by Defendants.

Schiltz Patent

The Schiltz patent in suit (Appendix C)* relates to a

truck mounted, or trailer drawn, mechanism for moving

haystacks or similar items. The haystack mover employs

six roller chains running lengthwise over beams on an

elongated truck or trailer bed. As the truck is backed into

a haystack, the load carrying surface is slightly inclined

and the roller chains serve as a conveyor pulling the hay-

stack onto the load surface. In loading a haystack with the

device, the mover is backed up to a haystack, the bed is

titled, and the mover is started back under the stack. At

this point, the rearward motion of the truck or tractor and

the forward motion of the chains on the bed act in concert

to lift the stack onto the bed as the bed simultaneously

moves further under the stack. Unloading the mover re-

quires a mere reversal of this process. (Appendix B, p. 599)

1. SYNERGISM — A REQUIREMENT

The District Court, although citing Sakraida v. Ag Pro,

Inc., 425 U.S. 273, (1976) erred in its determination by

failing to apply the synergistic test set forth by this Court

in Sakraida and consequently ruled that the Schiltz inven-

tion was not obvious. (Appendix A, p. 761) The synergism

test recently reiterated in Sakraida, in dealing with a com-

bination of admittedly old elements, requires the produc-

*Separate volume.

tion of something more than the sum of the pre-existing

elements, there must be a synergistic result that is itself

nonobvious. As set forth by Justice White in Roan-

well Corp. v. Plantronics, Inc., — U.S. —, 97 S. Ct. 538,

the District Court failed to make any finding that the com-

bination produced a synergistic result that is itself non-

obvious. Like the District Court in Roanwell, Judge Nichol

failed to make any findings that the combination of ele-

ments of Claim 10 of the patent in suit produced any

synergistic, unusual, or for that matter even any “striking”

result, although petitioners argued that such a determina-

tion of synergism must be made as mandated by this Court.

Roanwell sets the stage in showing the need for review

of this case, for several reasons:

1. Here, unlike Roanwell, all the prior art elements of

Claim 10 are disclosed in a single reference per-

forming the same functions, i.e. the Bruce patent.

In Roanwell the record clearly demonstrated “* * *

that all of the individual elements of the patented

headsets were used in the prior art, although no

single item * * * used the complete combination.”

2. Here, the full combination of Claim 10 is disclosed

in a single reference, i.e. the Bruce patent.

In Roanwell, “* * * no one had used the full com-

bination of all elements, [but] each element had

been combined with one or .ore of the others in a

variety of different headsets.”

3. Here, the District Court and the Eighth Circuit

Court of Appeals failed to apply the synergism test.

Since the Roanwell decision in December of 1976,

Courts of Appeals, other than the Eighth Circuit

have applied the test of synergism to combinations

of old elements to determine patentability.

As Justice White observed in Roanwell, and applying

that observation in this case, the lack of a finding of syner-

gism was not surprising, because—

“Rach element in the combination had previously

been used to perform the same function it now per-

forms in respondent’s device.”

This Court in Sakraida very clearly stated that a com-

bination of elements must produce something more than

the sum of the pre-existing elements; there must be a sny-

ergistic result that is itself nonobvious.

BRUCE PATENT NO. 1,628,871

The Bruce machine disclosed in Patent No. 1,628,871

(Appendix E)* is surprisingly like the Schiltz machine dis-

closed in the Schiltz Patent No. 3,298,550. (Appendix C)

The following description of the Boyd Schiltz machine is

that of the Trial Court (Appendix A, p. 753) in which the

elements of the Bruce machine have been added with

italics and by placing the Boyd Schiltz machine ele-

ment numerals in brackets.

The [Schiltz] Bruce invention provides for chains

[27] 30 (as shown in Figure 2) having upper and

lower flights [28 and 29 respectively]. Each chain

[27] 30 is mounted upon a different one of the

longitudinally extending beams [19] 12. The chains

[27] 30 provide the primary supporting sur-

face of the [hay] stack during the loading and

unloading operations. By driving the chains [27] 30

forwardly at a rate generally equal to the rate the

mover is going rearwardly, the upper flights of the

chains remain relatively fixed with respect to the

[hay] stack. The chains [27] 30 function to lift the

*Separate volume.

[hay] stack from the ground, providing a path for

the support beams [19] 72 to move under the [hay]

stack between the chains [27] 30 and the ground;

and the support beams [19] /2 function to guide

and support the chains as they are laid out under-

neath the [hay] stack. The result is that the chains,

beams and speed relationship of the forward motion

of the chains and rearward motion of the machine,

combine to lift the [hay] stack vertically onto the

mover bed without appreciable horizontal movement

and without disarrangement of the [hay] stack.

Now compare the above description with that of the

language from the Bruce patent.

As the platform is lowered to load a stack, the fingers

12 and arms 13 are engaged with the ground to pick

up material from the ground level. As the forward

movement of the platform continues, gear 16 mesh-

ing withygear 51 drives the chains so that their upper

runs travel toward the headrails 10 and anything rest-

ing upon the upper surface of the fingers will be

moved toward the rear end of the fingers. When the

device is fully engaged with the stack, the transmis-

sion is placed in neutral so that no movement of

chains 30 takes place to discharge the load from the

platform. The load is then transpored to its place of

unloading, and if it is desired to discharge the load

bodily, the transmission is placed in proper gear and

the upper run of the chains will move toward the

rear ends of the teeth to bodily unload the load which

is carried. (Appendix E, p. 2, lines 115-130; p. 3,

lines 1-27)

The Bruce structure responds to each element of Claim

10 of the Schiltz Patent. It should be noted that elements

(b), (d), and (h) are broad recitations to “means,” permit-

ting equivalents of the structure disclosed, to be used as

anticipating elements.

SEE APPENDIX F*, FOR A COMPARISON OF

EACH ELEMENT OF BRUCE TO CLAIM 10.

Any further question relating to the “means * * * for

tilting movements * * *,” element (d), was answered by

Defendant’s expert Mr. Wolfe on cross-examination where

he stated, by reference to the Bruce mechanism, “It doesn’t

describe it, but it shows it. I mean, the elements are there.”

(Appendix G*, T-756, 757, 759)

If there are any questions about being able to adjust

the speed of the chains, they were satisfied by Plaintiff's

expert, Mr. Strait who admitted that the change in speed

of the chains on the Bruce machine could be done by any

farmer. (Appendix D*, A. 758-759)

The District Court erred by ignoring Mr. Strait’s testi-

mony on cross-examination, in considering the issue of

validity or invalidity, when Mr. Strait described how the

speed relationship could be obtained with reference to the

infringement issue.

“Q. Let me ask you this, in timing and working on

these machines, does each tractor as they are

made by different companies, have a different

speed in reverse?

Yes, they do.

There is no standard in the industry, is there?

No, there is no industrial standard that they have

all of the same speed in reverse, that is correct.

And does Farmhand make an attempt, that you

know of, to try and gear their machine so that

it is generally equal to the forward movement

[T. 63] of the chains with respect to different

makes of tractors?

O POP

*Separate volume.

A. You don’t need to. The operator can accom-

plish this.” (Appendix D, A-292)

If the farm operator of the Schiltz machine can adjust

the speed to insure that the chains operate at the same

speed as the forward or rearward movement of the trailer

vehicle, that same farm operator is obviously capable of

adjusting the transmission in the Bruce machine to pro-

vide the same function.

Evaluation of each of the elements of the Boyd Schiltz

combination demonstrates that they have the same effect

which the prior art teaches in the Bruce patent, and thus

cannot be synergistic nor produce an advance in the art

in a synergistic manner to achieve a new result, however

desirable, efficient, or striking the result may be.

The decisions of this Court in Anderson’s Black Rock,

Inc. v. Pavement Salvage Co., Inc., 396 U.S. 57 (1969),

Sakraida (supra) and Dann v. Johnston, 425 U.S. 219,

(1976) set the controlling precedent in guiding the resolu-

tion of the question of validity which must include the

synergistic test.

Each of the Courts of Appeals finding a combination

of old elements valid since Sakraida, have followed the

synergistic test, with the exception of the Eighth Circuit,

which appears to limit the test to that enumerated in

Graham v. John Deere, 383 U.S. 1 (1966) rather than to

include the test of synergism. [Apparently the Fourth Cir-

cuit has not had the question before it.] That test, since

Sakraida, has been followed in International Telephone

And Telegraph Corporation v. Raychem Corporation, (1

Cir. 1976) 538 F. 2d 453, 191 USPQ 1, cert. den. 191

USPQ 409; Rosen et al. v. Lawson-Hemphill, Inc., (1 Cir.

1976) 549 F. 2d 205; Digitronics Corp. v. The New York

Racing Association, Inc. et al., (2 Cir. 1977) 553 F. 2d

740; U.S. Philips Corp. v. National Micronetics, Inc. et al.,

(2 Cir. 1977) 550 F. 2d 716; Systematic Tool And Ma-

chine Company et al. v. Walter Kidde & Company, Inc.,

(3 Cir. 1977) 555 F. 2d 342; Aluminum Company of

America, et al. v. Amerola Products Corporation et al.,

(3 Cir. 1977) 152 F. 2d 1020; Fred Whitaker Company v.

E. T. Barwick Industries, Inc., (5 Cir. 1977) 551 F. 2d

622; The Robbins Company v. Dresser Industries, Inc.,

(5 Cir. 1977) 554 F. 2d 1289; Reynolds Metal Company

v. Acorn Building Components, Inc., (6 Cir. 1977) 548

F. 2d 155; Kearney & Trecker Corporation v. Cincinnati

Milacron, Inc. et al., (6 Cir. 1977) 195 USPQ 402; Peder-

son v. Stewart-Warner Corporation, (7 Cir. 1976) 536 F.

2d 1179; Burland v. Trippe Manufacturing Company, (7

Cir. 1976) 543 F. 2d 588; St. Regis Paper Company v.

Bemis Company, Inc., (7 Cir. 1977) 549 F. 2d 833; Kam-

ei-Autokomfort, et al. v. Eurasian Automotive Products,

(9 Cir. 1977) 553 F. 2d 603; and Rutter v. Williams,

(10 Cir. 1976) 541 F. 2d 878.

If there was any doubt about what the Eighth Circuit

Court of Appeals thought of the test of synergism, it was

clearly and unambiguously enunciated in its decision

which came some 38 days after its decision in this case.

In the case of Clark Equipment Co., et al. v. Louis J.

Keller, et al., (8 Cir. 1978) — F. 2d — (not yet reported

but appearing in Appendix H herein), the Court first

chastised Clark for failure to request the District Court for

a synergism analysis, at or before, the trial in early 1975.

(slip op. at 4) Sakraida was not decided by this Court

until April 20, 1976. The Appellate Court did say:

“Because we find that the District Court did in fact

give adequate consideration to the effect of the com-

bination of elements in the 503 patent, we need not

address the question of whether or not a synergism

analysis was mandatory on the facts here.” [Em-

phasis added] (slip op. at 19)

The Appellate Court then rationalized the decision of

the District Court on the basis that the old elements in

Sakraida, Anderson’s-Black Rock, and Great Atlantic and

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

U.S. 147 reh. den., 340 U.S. 918 (1950), contained old

elements which were not as complex as the old elements of

the patent there in suit.

Ultimately, the Eighth Circuit Court of Appeals found

no wisdom in the use of a synergism analysis and stated:

“In the patent law context, ‘synergism’ has no talis-

manic power; synergism is merely one indication of

nonobviousness. What is required, when a synergism

analysis is appropriate, is simply a determination that

the combination of elements in a patent produces ‘an

effect greater than the sum of the several effects taken

separately.’ ", citing Anderson’s-Black Rock. (slip op.

at 20)

Patent litigants in at least eight out of ten circuits have

been granted the benefit of the prior decisions of this Court

on the issue of synergism. It is unfair that patent litigants

in the Eighth Circuit should be denied the benefit of this

Court’s prior rulings in this respect.

ll. OBVIOUSNESS — WITHOUT SYNERGISM

The Trial Court Concluded:

“As noted by the Eighth Circuit Court of Appeals,

the test of obviousness is the only correct test to be

applied in determining whether a new combination of

known elements amounts to invention.” (Appendix

A, p. 759)

The Appellate Court indicated its satisfaction with the

findings of the District Court, and the District Court's ap-

plication of the law to the facts. (Appendix B, p. 6) The

District Court was in error in applying the law under

35 U.S.C. §103 rather than §102, where the Bruce patent

clearly anticipates the claimed elements of Schiltz.

This Court in Great Atlantic And Pacific Tea Co. v.

Supermarket Equipment Corp., (supra) stated:

“The Court should scrutinize combination patent

claims with care proportioned to the difficulty and

improbability of finding invention in an assembly of

old elements, that the function of a patent was to

add to the sum of useful knowledge and that patents

could not be sustained when on the contrary their

effect was to subtract from former resources freely

available to skilled artisans.”

The District Court concluded that none of the prior art

patents alone taught the Schiltz invention as claimed, and

therefore, it was impossible to find the Schiltz invention ob-

vious. The District Court by implication inferred that the

various elements making up the Schiltz device can be

found only in “isolation” in the prior art. (Appendix A,

p. 758) Thus, the District Court erred in applying a “strict

identity” test in finding that the Bruce reference lacked

elements (d) and (h) of Claim 10. (Appendix A, p. 758)

The Court erred even further in finding that “None of

the cited prior art disclosed devices designed for moving

large haystacks, or similar objects, through the use of

chain conveyors.” [Emphasis added] (Appendix A, p.

761)

While there is not one word in the Boyd Schiltz patent

about the size of haystacks, it hardly requires an inventor

to perceive that a strawstack mover such as disclosed in

Bruce can be used to move haystacks, and if it is a large

haystack, the machine might have to be enlarged. Judge

Nichol’s finding is much like that of the District Court in

Roanwell (supra) with respect to which Justice White

pointed out in referring to the District Court, “* * * he

found that the requirement of nonobviousness was satis-

fied simply because no one had created the successful com-

bination before respondent secured his patent. In so doing,

the Court departed from the clear teachings of this Court’s

prior cases.”

Each of the elements forming the invention claimed in

the patent in suit was admittedly old and the Court so

found. (Appendix A, p. 758) In Plaintiff's opening state-

ment, counsel’s remarks for Plaintiff are right to the point:

“As far as the chains and beams and drive members

and so on, these aren’t new elements. As I’m re-

minded of someone that was talking about a com-

bination of elements and patents, and pointing out

in the prior art where this element was and that ele-

ment was, and his response was: I don’t need to go to

the prior art to find those; I can go to a hardware

store; you can go to a junkyard and find chains and

beams and frames, and so on, so there is no missing

ingredient.” (Appendix D, A-13)

As presented above, the Bruce patent anticipates Claim

10 under 35 U.S.C. §102, rather than rendering the patent

in suit Obvious under 35 U.S.C. §103, but if somehow

the Bruce prior art reference fails to satisfy the §102 test,

any such difference would be in minor matters only and

would suggest itself to one of ordinary skill in the art be-

cause the general aspects of the Bruce patent and the

patent in suit are the same.

It is axiomatic that an invention is not patentable if it

lacks novelty. 35 U.S.C. §102.

Statutory novelty requires that an invention be, in fact,

something “new.” Graham v. John Deere Co., (supra).

Essentially, there must be a determination made as to

whether there is “disclosure in the prior art of a thing sub-

stantially identical to the claimed invention.” This Court

appears never to have required an absolute “strict identity”

test for §102. That is, it is sufficient if the two devices are

substantially identical or equivalent, or if they perform the

same function in substantially the same way and accom-

plish substantially the same results: the fact they may dif-

fer in name and form is immaterial. Brusn v. Condit, N.Y.

1889, 132 U.S. 39. See, also, Winans v. New York, etc.,

R. Co., N.Y. 1859, 21 How. 88; Wollensak v. Sargent,

Conn. 1894, 151 U.S. 221; Lawther v. Hamilton, Wis.,

1888, 124 U.S. 1; Siemens v. Sellers, Pa. 1887, 123 U.S.

276; Union Paper-Bag Mach. Co. v. Murphy, Mo. 1878,

97 U.S. 102.

The Eighth Circuit Court of Appeals had no difficulty

in applying that test in American Infra-Red Radiant Co.

v. Lambert Industries, Inc., 360 F. 2d 977, 989 (1966),

but approved the Trial Court’s omission of it in this case.

In the face of the Bruce patent disclosure, the District

Court found that the Bruce patent could not be made to

perform substantially the same functions as the Schiltz in-

vention in substantially the same way, either as the patent

reads or with the addition of changes requiring only ordi-

nary mechanical skill. The Court concluded that the

Schiltz invention was novel under 35 U.S.C. §102. (Ap-

pendix A, p. 757) That conclusion was error.

CONCLUSION

Petitioner submits that the District Court erred in not

applying the test for synergism required by this Court for

a combination of admittedly old elements. The Eighth Cir-

cuit Court of Appeals, setting itself apart from the other

Circuit Courts of Appeals, compounded that error by also

disregarding the test of Sakraida.

For the foregoing reasons, the Petition For A Writ Of

Certiorari should be granted.

Respectfully submitted,

KENNETH D. SIEGFRIED

2340 IDS Center

Minneapolis, Minnesota 55402

Telephone (612) 339-0116

JOE L. MAYNES

P. O. Box 1127

Aberdeen, South Dakota 57401

Telephone: (605) 225-5772

Attorneys for Petitioner

Schroeder, Siegfried, Ryan,

Vidas & Steffey

and

Maynes, Tonner & Maynes

Of Counsel

Appendices

APPENDIX—A

[749]

District Court, D. South Dakota, Southern Div.

Farmhand, Inc.

v. Lahman Manufacturing Company, Inc.,

et al.

No. Civ. 73-4037

Decided Sept. 27, 1976

PATENTS

1. Patentability—In general (§51.01)

Requirements for patentability of invention are set out in

35 U.S.C. 101-103; to be patentable, invention must be

useful, novel, and nonobvious with respect to prior art; all

three of these requirements must be met by valid patent.

2. Pleading and practice in courts—Burden of proof—

Validity (§53.138)

Presumption from patent grant—In general (§55.1)

[750]

Presumption from patent grant—Weight of (§55.9)

All patents carry rebuttable presumption of validity when

issued, and burden of establishing invalidity rests on party

asserting it; invalidity of patent must be shown by substan-

tial evidence, not merely preponderance; party asserting

patent invalidity must not only overcome statutory presump-

tion of validity, but must also rebut whatever proof patentee

Offers in defense of validity of his claim.

A-2

3. Patentability—Anticipation—In general (§51.201)

Patentability—Anticipation—Prior knowledge, use or

sale (§51.223)

Unlike defense under Section 102(a) where prior knowl-

edge and use must be “public” at time patented invention

is made, prior invention under Section 102(g) requires only

that invention be complete, i.e., conceived and reduced to

practice, and not abandoned, suppressed or concealed.

4. Interference — Reduction to practice—In general

(§41.751)

Patentability—Anticipation—Experiments (§51.209)

Another’s experiment, imperfect and never perfected, will

not serve either as anticipation or as part of prior art, for

it has not served to enrich it; patented invention does not

become “known” by such use or sale, or by anything of

which art cannot take hold and make use as it stands;

reduction to practice contemplates actual and complete use

of particular invention for its intended purpose.

5. Abandonment—lIn general (§10.1)

Interference—Priority (§41.70)

Patentability—Anticipation—In general (§51.201)

Patentability—Anticipation—Prior knowledge, use or

sale (§51.223)

Section 102(g) requires that invention not be “aban-

doned, suppressed, or concealed”; invention, although com-

pleted is deemed abandoned, suppressed, or concealed if,

within reasonable time after completion, no steps are taken

to make invention publicly known.

Oe CPOE! ore

A-3

6. Patentability—Anticipation—Experiments (§51.209)

Patentability—Anticipation—Prior knowledge, use or

sale (§51.223)

Section 102(a) requires that any prior use must have

been “public”; experimental use is not public use within

meaning of this section.

7. Patentability—Anticipation—Experiments (§51.209)

Patentability—Anticipation—Prior knowledge, use or

sale (§51.223)

Mere fact that attempt to get device to work was not

concealed does not make use public within meaning of

Section 102(a).

8. Patentability—Anticipation—In general (§51.201)

Patentability—Invention—In general (§51.201)

All elements of invention or their equivalent must be

found in single description or structure where they do sub-

stantially same work in substantially same way, in order to

negative novelty or anticipate invention; while prior art

can be combined to demonstrate obviousness under Section

103, in order to anticipate under Section 102 single prior

reference must disclose invention in question.

9. Patentability—Aggregation or combination—Of old

elements (§51.159)

Patentability—Invention—In general (§51.501)

Fact that component elements are old in art is not alone

dispositive of obviousness issue.

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10. Patentability—Tests of —Skill of art (§51.707)

Level of ordinary skill in art is another initial determina-

tion that must be made under Graham v. John Deere Co.,

148 USPQ 459.

11. Patentability—Tests of —Skill of art (§51.707)

Ordinary skill in art relative to transporting haystacks

was low.

12. Patentability—Aggregation or combination—Of old

elements (§51.159)

Patentability—Anticipation—Combining _ references

(§51.205)

Patentability—Invention—In general (§51.501)

[751]

Patentability—Tests of—In general (§51.701)

Patent cannot be held valid for development that would

have been obvious to one of ordinary skill in art in light of

prior art; prior art may be combined for purposes of demon-

strating obviousness; obviousness test is only correct test to

be applied in determining whether new combination of

known elements amounts to invention.

13. Patentability—Aggregation or combination—Of old

elements (§51.159)

Patentability—Anticipation—Combining _ references

(§51.705)

Patentability—Invention—In general (§51.501)

Court must avoid slipping into use of hindsight when

determining obviousness; fact that all elements of claimed

A-5

invention may be disclosed in prior art does not, of itself,

negative patentability, as in retrospect many creative devel-

opments seem commonplace; critical question under Gra-

ham v. John Deere Co., 148 USPQ 459, is whether at time

of invention subject would have been obvious to one skilled

in art; when prior art references are combined to challenge

patentability, test to be applied is, does prior art suggest to

one ordinarily skilled in art doing what applicant has done.

14. Presumption from patent grant—Weight of (§55.9)

Patent is presumed valid when issued but presumption is

rebuttable, and must be overcome by substantial evidence

negating one of three requisites of patentability.

15. Presumption from patent grant—Patent Office con-

sideration of prior art (§55.5)

Presentation to court of prior art not disclosed to Patent

Office weakens or destroys presumption of validity; how-

ever, mere fact that patent was not cited should not be

sufficient to destroy presumption of validity.

16. Presumption from patent grant—Patent Office consid-

eration of prior art (§55.5)

Where Patent Office cites some prior art, but not other

equally relevant and similar prior art, presumption of valid-

ity is weakened only to extent that teaching of uncited art

is not disclosed in cited art.

17. Patentability—Evidence of—In general (§51.451)

Factors such as commercial success of invention, solution

to long felt needs, and failure of others to arrive at solution

Renee a Semtgneteas

A-6

may be considered as evidence of obviousness or unobvious-

ness of invention under Graham v. John Deere Co., 148

USPQ 459.

18. Patentability—Evidence of—Commercial success-—

Causes (§51.4555)

Factors such as stability of sales of prior art type device

may go to minimize argument of commercial success.

19. Patentability—Evidence of—Delay and failure of

others to produce invention (§51.459)

Another indicator of nonobviousness of invention was

solution of long-felt need for safer and more convenient

device; age and volume of prior art cited demonstrates

desire to improve art.

20. Patentability—Evidence of—Delay and failure of

others to produce invention (§51.459)

Additional indicator of nonobviousness is fact that all

elements needed to produce device were readily available;

fact that nothing unknown was needed to create invention,

and that invention was still not forthcoming, is evidence of

fact that invention was nonobvious, and required exercise

of inventive act.

21. Patentability—Evidence of—Delay and failure of

others to produce invention (§51.459)

Failure of others, attempting to improve upon prior art,

to arrive at solution comparable to invention is further

evidence of nonobviousness, and may serve to strengthen

presumption of patent validity.

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22. Patentability—Evidence of—Acquiescence in validity

(§51.453)

Fact that others in industry acquiesce in patent validity

at expense to themselves may be considered evidence of

nonobviousness and patent validity.

23. Patentability—Evidence of—Acquiescence in validity

(§51.453)

While fact that accused infringer chose to admit validity

of patent and proceed only on infringement issue may not

be strong evidence of patent validity, court must consider

it of at least some weight in support of validity.

[752]

24. Defense—Fraud (§30.05)

Failure to use full candor with Patent Office in prosecu-

tion of patent application may be raised as defense to

enforceability of patent.

25. Defenses—Fraud (§30.05)

Failure of applicant who did not draw examiners’ atten-

tion away from prior art patent and who mentioned prior

art devices, to disclose to Patent Office prior art patent that

was within classes examiners searched, and machine that

was thought to have no bearing on his patent and that was

abandoned experiment not part of prior art and was similar

to devices with which examiners were familiar, does not give

rise to unenforceability defense.

Particular patents—Haystack Transporting

3,298,550, Schiltz, Haystack Transporting Device, claims

10 and 11 infringed.

qe eee ern

A-8

Actions by Farmhand, Inc., against Lahman Manufac-

turing Company, Inc. and Robert Anderson, doing business

as Platte Implement, for patent infringement, in which de-

fendants counterclaim for declaratory judgment of patent

invalidity and for violations of antitrust laws, and by

Lahman Manufacturing Company, Inc., and against Boyd

D. Schiltz (third-party defendant) for violation of antitrust

laws.

Judgment for Farmhand, Inc.

Deming Smith, and Davenport, Evans, Hurwitz & Smith,

both of Sioux Falls, South Dakota, John D. Gould, and

Merchant & Gould, both of Minneapolis, Minn., for

Farmhand, Inc. and Boyd D. Schiltz.

Joe L. Maynes, and Maynes, Tonner & Maynes, both of

Aberdeen, South Dakota, and Kenneth D. Siegfried, and

Schroeder, Siegfried, Ryan & Vidas, both of Minneapolis,

Minn., for Lahman Manufacturing Company, Inc., and

Robert Anderson.

Nichol, Chief Judge.

This is an action for infringement of claims 10 and 11 of

United States Patent No. 3,298,550. This patent issued on

January 17, 1967, to Boyd D. Schiltz (Schiltz) for a

“Haystack Transporting Device.” Plaintiff, Farmhand, Inc.

(Farmhand ), is the owner of the patent by assignment from

Schiltz. Jurisdiction in this court is based upon 28 USC

sections 1338(a) and 1400(b). Venue is proper in this

division under 28 USC section 1393(b).

Farmhand is a Delaware corporation having its principal

place of business at 1011 South First Street, Hopkins,

Minnesota. Defendant Lahman Manufacturing Company,

A-9

Inc. (Lahman), is a South Dakota corporation, having its

principal place of business at Hecla, South Dakota. Lahman

manufactures and sells the alleged infringing haystack

movers. Defendant Robert Anderson is an individual doing

business as Platte Implement in Platte, South Dakota. It is

admitted that Anderson has sold the alleged infringing

haystack movers, which he purchased from Lahman.

Plaintiff has sued for an injunction restraining further

infringement by Defendants, and for damages. Defendants

have counterclaimed for a declaratory judgment that United

States Patent No. 3,298,550 is invalid. Defendants further

counterclaimed for violations of the antitrust laws, 15 USC

sections 1-15. Defendants have also filed a third party

complaint against Boyd D. Schiltz, patentee of the patent in

suit, under the antitrust laws, 15 USC sections 1-15. Upon

Defendants’ motion, Defendants’ counterclaim for antitrust

violations, and the third party complaint against Boyd D.

Schiltz were severed. The remaining issues were further

bifurcated, with the resolution of the issue of damages to

await the outcome of the issues of validity and infringement.

The Patent in Suit

The subject of this lawsuit is a “Haystack Transporting

Device” for which a patent was obtained by Schiltz. The

device described by the patent is commonly referred to as a

chain-type haystack mover. The specifications of the patent

disclose a device consisting of a mobile frame and tiltable

bed for the loading, transporting, and unloading of large

haystacks. The claims in issue teach:

10. A mobile machine for transporting haystacks and

comprising:

(a)

(b)

(c)

(d)

(e)

(f)

(g)

(h)

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an elongated frame,

drive means for imparting generally longitudinally

directed movement to said machine relative to the

ground,

an elongated bed assembly extending longitudinal-

ly of said frame,

means mounting said bed assembly on said frame

for tilting movements between an inclined position

wherein the bed assembly is adapted for movement

with said machine and under a haystack for load-

ing and unloading of a [753] haystack onto

said bed assembly, and a horizontal load trans-

porting position,

said bed assembly including a plurality of laterally

spaced longitudinally extending support members,

a plurality of laterally spaced endless conveyor ele-

ments one each mounted on a different one of at

least some of said support members, and each

having upper and lower flights, the upper flights

overlying their respective support members and

being adapted to carry hay onto and off of said

bed assembly as it is moved under a stack,

a plurality of longitudinally spaced hay-engaging

teeth on each of said conveyor elements.

and second drive means operative to impart con-

certed movement to the inclined upper flights of

said conveyor elements in a direction opposite to

the direction imparted to said machine by said

first-mentioned drive means and at a rate on the

A-11

incline such that said flights have a horizontal

component of movement generally equal to the

rate of machine movement.

11. The mobile machine defined in claim 10 in which

said bed assembly includes a bed frame, said support mem-

bers having upper surface disposed in a plane in overlying

spaced relation to said bed frame, said upper flights of the

conveyor elements being supported by said top surfaces of

the support members.

The operation of the device can be explained by reference

to the descriptions contained in the specifications and draw-

ings of the patent. The Schiltz invention provides for chains

27 having upper and lower flights 28 and 29 respectively.

Each chain 27 is mounted upon a different one of the

longitudinally extending beams 19. The chains 27 provide

the primary supporting surface for the haystack during the

loading and unloading operations. By driving the chains

27 forwardly at a rate generally equal to the rate the mover

is going rearwardly, the upper flights of the chains remain

relatively fixed with respect to the haystack. The chains 27

function to lift the haystack fre. the ground, providing a

path for the support beams 19 to move under the haystack

between the chains 27 and the ground; and the support

beams 19 function to guide and support the chains as they

are laid out underneath the haystack. The result is that the

chains, beams, and speed relationship of the forward motion

of the chains and the rearward motion of the machine,

combine to lift the haystack vertically onto the mover bed

without appreciable horizontal movement and without dis-

arrangement of the haystack.

Ree Oem

A-12

The Development of the Chain-Type Haystack Mover

Prior to the advent of the chain-type haystack mover,

the device primarily used for moving haystack was a cable-

type mover. Cable-type movers had been known in the art

for many years. The structure of the cable-type device con-

sisted of a frame supported by wheels; a tiltable bed on the

frame; a winch, cable, and sling to load haystacks onto the

bed; and a push-off to remove the stack.

When compared to the chain-type mover, operation of

the cable-type mover is relatively difficult. The operator

must back up to a haystack, tilt the bed of the mover, and

then back up further until the mover is tight against the

haystack. The operator must then get off the tractor or

other conveyance and take the cable sling to the back of

the stack. The winch cables are then pulled back and

attached to the sling. The operator then places the winch

in gear to wind the cables around the winch drums, which

act in concert to pull the mover under the stack and to pull

the stack onto the bed. To unload a haystack, the operator

must release the winch, disconnect the cables from the sling

at the back of the stack and remove the sling, hook the pull

cables from the winch into the eye of the push-off cables,

put the winch in gear, and start the power shaft. This will

tighten the cables and pull the push-off to the rear of the

mover to slide the stack off. After a stack is unloaded, the

mover is readied for the next loading by cleaning off any

residual hay, releasing the pull cables from the push-off,

and moving the push-off back to its forward position; by

hand in the earlier models, or by hydraulic means in the

newer ones.

The evidence presented at trial demonstrated numerous

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shortcomings in the cable-type movers. Many of the re-

quired operations are manual and require the operator to

leave his conveyance. This can be especially burdensome

in inclement weather. The sling, which must be manually

positioned, can weigh anywhere from 40 to 150 pounds.

Further, in normal operations, the sling can act to slice

off the bottom portion of a haystack, leaving part of it in

the field. To counter this result, testimony showed that the

Operator must sometimes stand on the sling to keep it in

a lower position. This gives rise to definite safety hazards.

Another drawback of this type of [754] mover are the

cables themselves. The cables can sliver, and have been

known to snap under tension. This also presents a definite

safety hazard.

The chain-type mover, it is conceded, has numerous ad-

vantages over the cable-type. In operating a chain-type

mover the operator need not leave the cab of his truck or

tractor during loading or unloading. The chain-type mover

eliminates the necessity of manual operations. To load a

haystack with the device, the mover is backed up to a hay-

stack, the bed is tilted, and the mover is started back under

the stack. At this point the rearward motion of the truck

or tractor and the forward motion of the chains on the

bed act in concert to lift the stack onto the bed as the bed

simultaneously moves further under the stack. Unloading

the mover requires a mere reversal of this process. The

operation of the chain-type mover is much quicker than

that of the cable-type, and enables an operator to load

and unload more stacks in a given period of time.

Validity

; Defendants allege in their counterclaim for declaratory

judgment that the Schiltz patent is invalid. They base their

A-14

attack on (1) lack of novelty, (2) oviousness of the in-

vention in light of the prior art, and (3) misconduct by

Schiltz and his attorneys in the prosecution of the appli-

cation before the Patent Office.

[1] The requirements for patentability of an invention

are set out in 35 USC sections 101-103. To be patentable,

the invention must be useful, novel, and nonobvious with

respect to the prior art. All three of these requirements

must be met by a valid patent. United States v. Adams,

383 U.S. 39, 148 USPQ 479 (1966); American Infra-Red

Radiant Co. v. Lambert Industries, Inc., 360 F.2d 977, 149

USPQ 722 (8th Cir. 1966); L & A Products, Inc. v. Britt

Tech Corp., 365 F.2d 83, 150 USPQ 770 (8th Cir. 1966).

[2] All patents carry a rebuttable presumption of va-

lidity when issued, and the burden of establishing invalidity

rests on the party asserting it. 35 USC section 282. Inva-

lidity of a patent must be shown by substantial evidence,

not merely a preponderance. L & A Products, Inc. v. Britt

Tech Corp., 365 F.2d 83 (8th Cir. 1966); Woodstream

Corp. v. Herter’s Inc., 446 F.2d 1143, 170 USPQ 380

(8th Cir. 1971). The party asserting the invalidity of a

patent must not only overcome the statutory presumption

of validity, but must also rebut whatever proof the patentee

offers in defense of the validity of his claim. Woodstream

Corp. v. Herter’s Inc., 446 F.2d 1143, 170 USPQ 380

(8th Cir. 1971).

The utility of the Schiltz invention is undisputed. Serious

questions are raised, however, as to its novelty and non-

obviousness. Both of the statutory requirements necessitate

an examination of the prior art with respect to haystack

moving.

A-15

A. Prior Art

A substantial amount of evidence was introduced at

trial to establish the state of the prior art related to the

Schiltz invention. In addition to the five prior art patents

cited by the Patent Office examiners,' Defendants intro-

duced nine additional patents as pertinent, unconsidered

prior art.* Of these latter nine, Defendants placed primary

reliance upon five: Rogers, No. 2,418,726; Wangsness, No.

1,106,171; Bruce, No. 1,628,871; Lahman, No. 2,761,577;

and Holcer, No. 3,120,887. Defendants also maintain that

there were four prior inventors of the subject matter in

suit,* and have concentrated on the machines allegedly

built and used by Robert S. Rogers, Jr., and James Sutton.

There is no serious dispute over the patents as evidence of

prior art for the subject matter of the Schiltz invention.

Plaintiff, however, seeks to reject the Sutton and Rogers

machines from consideration as elements or evidence of

the prior art. This court agrees that the Rogers and Sutton

machines cannot be considered prior art in this case.

1The patents cited by the Patent Office examiners, appearing in the file

wrapper of the Schiltz are: Suver vanes 2,156,438; oT

No. 2.4 2,408,862; Mc et al., No. 26,960; Hibbard, No.

2-951,578; Quint, No. 3,025,982. The ne Schiltz patent, No.

3,209,932, was removed as part of the prior art by a Rule 131 affidavit

*The nine additional prior art patents cited by Defendants are: Rogers,

No. 2,418,726; Lisota, No. 2,466,452; No. 1,106,161;

Bruce, No. 1,628,871; Martin, No. 1,258;351; Lahman, No. 2.761'577;

Bruce Schiltz, No. 3,209,932; Holcer, No. 3,120,887; French Patent

No. 644,220. In addition, at trial Defendants to introduce

additional art R was reserved

a patents. poe Aen as to admissibility.

vie isans peter eventers ane ames Sutton, I

= Ly FER Jr. In addition, Richard Richard i oe

hes; and George Engleman were alleged to have had prior knowledge

A-16

[755]

1. Rogers Machine

Defendants placed great emphasis at trial and in their

briefs on the Rogers machine. This device, a modification

of the structure shown in Rogers patent, No. 2-418,726,

was allegedly built and used by Mr. Rogers in the early

1940’s in connection with his cotton gin operation. The

alleged device, as built, differed substantially from the

structure disclosed in the patent. Defendants assert that the

machine, as allegedly constructed, was substantially the

same as the device disclosed by the Schiltz patent, both

in structure and in operation.

To prove the existence of the machine, Defendants rely

primarily on the oral testimony of Mr. Rogers. The alleged

machine was never disclosed in a patent application, nor

in any publication. Rogers was the only person who could

testify as to use of the machine. There were no photographs

or sketches of the device which portray it in its completed

form. Defendants did introduce numerous photographs of

certain elements of the machine as they now exist. These

photographs, however, show nothing more than the basic

frame of the device, a length of chain, and the remains of

certain components. The missing elements, and the parts

of the structure alleged to be most comparable to the Schiltz

invention, were filled in by the oral testimony of Mr. Rogers

and through illustrative sketches drawn by Mr. Rogers for

the purposes of this trial.

Unsupported oral testimony has long been considered

suspect in patent cases. The Supreme Court addressed this

problem in 1892.

We now have to deal with certain unpatented devices,

claimed to be complete anticipations of this patent,

A-17

the existence and use of which are proven only by

oral testimony. In view of the unsatisfactory charac-

ter of such testimony, arising from the forgetfulness

of witnesses, their liability to mistakes, their prone-

ness to recollect things as the party cal!’1g 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, satisfac-

tory and beyond a reasonable doubt. Witnesses whose

memories are prodded by the eagerness of interested

parties to elicit testimony favorable to themselves are

not usually to be depended upon for accurate infor-

mation. The very fact * * * that almost every impor-

tant patent, from the cotton gin of Whitney to the

one under consideration, has been attacked 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.

The Barbed Wire Patent, 143 U.S. 275, 284-85 (1892);

see also Inglett & Co., v. Everglades Fertilizer Co., 255

F.2d 342, 117 USPQ 236 (Sth Cir. 1958); United Parts

Mfg. Co. v. Lee Motor Products, Inc., 266 F.2d 20, 121

USPQ 206 (6th Cir. 1959); 1 Deller’s Walker on Patents

section 63 (2d ed. 1964).

Plaintiff has challenged both the memory and veracity

of Mr. Rogers. An examination of the testimony of Mr.

Rogers leads this court to the conclusion that his oral

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testimony, and the sketches based upon his recollection, can

be afforded little weight. This court finds that Defendants

have failed to meet their burden of proof of the existence

and use of the Rogers machine. It is therefore concluded

that the Rogers machine cannot be considered as prior art

under 35 USC sections 102 and 103.

2. Sutton Machine

The Sutton machine was built by Glen Stokes and James

Sutton in 1957 for the purpose of providing a more efficient

means for moving haystacks on Sutton’s ranch. It is undis-

puted that the machine, as originally built, never loaded a

haystack. There is some evidence that Sutton sought to get

the machine repaired after it broke down when he tried to

load a haystack with it, but the machine was never in fact

repaired. After the initial unsuccessful attempt to get the

machine to load a haystack, it was placed in various yards

on the Sutton ranch, where it reposed until it was resur-

rected for this trial.

There was no patent application filed for the Sutton

machine. The machine was never disclcsed in a publicly

disseminated document. Defendants contend, however, that

despite the fact that the Sutton machine did not load any

haystacks as originally constructed, it is still prior art un-

der 35 USC section 102.

[3] Defendants, although never expressly stating which

subsections of section 102 they are relying upon, apparently

base this assertion on either section 102(a) or section

102(g). Initially, the criteria of section 102(a) must be

distinguished from those of [756] section 102(g). As

the Court of Claims has noted:

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The distinction is important since, unlike a defense

under section 102(a) where prior knowledge and use

must be “public” at the time the patented invention

is made, prior invention under section 102(g) re-

quires only that the invention be complete, i.e., con-

ceived and seduced to practice, and not abandoned,

suppressed or concealed.

International Glass Co. v. United States, 408 F.2d 395,

402, 159 USPQ 434, 440 (Ct. Cl. 1969) (Citations omit-

ted). Bearing this distinction in mind, the issues concerning

the Sutton machine become: (1) was the machine “re-

duced to practice”, (2) whether the device was abandoned

within the meaning of section 102(g), and (3) whether

the machine was in prior public use within the require-

ments of section 102(a).

[4] The initial concern is whether the Sutton machine

was ever reduced to practice. It has long been held that a

device not reduced to practice cannot be considered as

part of the prior art. As the Supreme Court observed in

Coffin v. Ogden:

The invention or discovery relied upon as a defense,

must have been complete, and capable of producing

the result sought to be accomplished * * *. If the thing

were embryonic or inchoate; if it rested in speculation

or experiment; if the process pursued for its develop-

ment had failed to reach the point of consummation,

it cannot avail to defeat a patent * * *. Until his work

is done, the inventor has given nothing to the public.

Coffin v. Ogden, 85 U.S. (18 Wall.) 120, 124-25 (1873)

(emphasis in original). Judge Learned Hand has stated

the rule concisely:

—

ee ee ee es

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* * * another’s experiment, imperfect and never per-

fected, will not serve either as an anticipation or as

part of the prior art, for it has not served to enrich it.

The patented invention does not become “known” by

such use or sale, or by anything of which the art can-

not take hold and make use as it stands.

Picard v. United Aircraft Corp., 128 F.2d 632, 635, 53

USPQ 563, 565-566 (2d Cir. 1942). Reduction to practice

contemplates an actual and complete use of the particular

invention for its intended purpose. Corona Cord Tire Co. v.

Dovan Chemical Corp., 276 U.S. 358 (1928); see also

Illinois Tool Works, Inc. v. Continental Can Co., 273

F.Supp. 94, 154 USPQ 401 (N.D. Ill. 1967).

Defendants do not contend that the Sutton machine ever

loaded a haystack as the machine was originally built. They

argue strenuously, however, that the proper test to be ap-

plied for reduction to practice is that the machine was so

far developed that it could be made operable by the appli-

cation of ordinary mechanical skill by one skilled in the

art. An examination of the evidence in this case shows,

however, that this court need not reach the question of

whether this is the proper test to apply. Defendants have

failed to demonstrate that any modifications to the Sutton

machine were the result of the application of ordinary

mechanical skill.

The Sutton machine taught the use of powered and non-

powered rollers as the means of conveyance for a haystack

during the loading and unloading operations. As so con-

structed, the machine would not operate to load a haystack.

The machine was made operable only after numerous con-

veying chains were placed on top of the rollers. These chains

A-21

replaced the rollers both as the means of conveyance and as

the primary supporting surface for the haystack during load-

ing and unloading. Although there was conflicting evidence

on this point, this court finds that Plaintiff's expert was more

convincing. The modifications to the Sutton machine were

performed only after the Schiltz patent was well known to

those engaged in the art. This court is convinced after an

examination of the evidence concerning the Sutton machine

that the addition of the chains to the rollers was contrary to

the teachings of the Sutton machine, and represented a hind-

sight application of the teachings of Schiltz, obvious only

after the fact with relation to Sutton’s machine. It therefore

must be concluded that under either test the Sutton machine

was not reduced to practice as originally built. Even if this

court were to find a reduction to practice, however, the

Sutton machine would still fail to satisfy the criteria of sec-

tions 102(a) and 102(g) of Title 35.

[5] Section 102(g) requires that an invention not be

“abandoned, suppressed, or concealed.” The general rule

under this section was well stated in International Glass Co.,

Inc. v. United States, 159 USPQ 434 (Ct. Cl. 1968).

The courts have consistently held that an invention,

though completed, is deemed abandoned, suppressed,

or concealed if, within a reasonable time after comple-

tion, no steps are taken to make the invention publicly

known. Thus, failure to file a patent application; to

describe the invention in a publicly disseminated docu-

ment; [757] or to use the invention publicly, have

been held to constitute abandonment, suppression, or

concealment.

159 USPQ at 441 (Citations omitted). The Sutton machine

was built in 1957. Since that time the machine has never

A-22

been patented, nor has an application for patent been filed

therefor. The machine was never described in a public docu-

ment or publication. Although there is disagreement as to

public use of the machine, this question is more properly

considered with relation to section 102(a), which will be

discussed, infra. On the basis of these facts, however, this

court finds that even if the Sutton machine was reduced to

practice, it was abandoned within the meaning of section

102(g).

[6] The Sutton machine also fails to satisfy the criteria

of section 102(a) for consideration as prior art. As inter-

preted by the courts, this section requires that any prior use

must have been “public”. Simmons v. Hansen, 117 F.2d 49,

48 USPQ 345 (8th Cir. 1941). An experimental use is not a

public use within the meaning of this section. See generally |

Deller’s Walker on Patents section 59, at 259 n. 12.

[7] The evidence in this case clearly shows that the use

of the Sutton machine as originally built was merely an abor-

tive, experimental use. The mere fact that the attempt to get

the device to work was not concealed does not make the use

public within the meaning of section 102(a). To reiterate

the conclusions of Judge Hand, such use “will not serve either

as an anticipation or as part of the prior art, for it has not

served to enrich it.” Picard v. United Aircraft Corp., 128 F.2d

632, 635, 53 USPQ 563, 565-566 (2d Cir. 1942). The

Sutton machine does not satisfy the criteria of section

102(a) for consideration as prior art.

Novelty

As previously noted, it is uncontroverted that the Schiltz

invention has utility within the meaning of 35 USC section

101. In order for the invention to be patentable, however, it

must also possess novelty. 35 USC section 102.

A-23

[8] The general rule under this section is stated in

Deller’s Walker on Patents:

In order to negative novelty, or to anticipate an inven-

tion, it is necessary that all the elements of the invention

or their equivalents be found in one single description

or structure where they do substantially the same work

in substantially the same way.

1 Deller’s Walker on Patents section 57, at 242 (2d ed.

1964). Defendants have experienced some difficulty with the

distinction between the proof required by section 102, and

that required by section 103. The correct rule is that, while

prior art can be combined to demonstrate obviousness under

section 103, in order to anticipate under section 102 a single

prior reference must disclose the invention in question. See

Woodstream Corp. v. Herter’s Inc., 446 F.2d 1143, 1151,

170 USPQ 380, 385-386 (8th Cir. 1971).

Defendants asserted three prior anticipations of the Schiltz

invention: The Bruce patent, and the Sutton and Rogers ma-

chines. As previously discussed, the Sutton and Rogers ma-

chines cannot be considered prior art in this suit. Further-

more, although Defendants argue in their brief that the Bruce

patent is a complete anticipation of the invention in suit, in

the same brief they concede that Bruce lacks element (d) of

claim 10 of the patent in suit. This also is sufficient to nega-

tive anticipation. Defendants also failed to introduce evi-

dence to show that the Bruce patent could be made to

perform substantially the same functions as the Schiltz inve-

tion in substantially the same way, either as the patent reads

or with the addition of changes requiring only ordinary

mechanical skill.

ee ee ee

A-24

This court has examined all of the prior art patents in

evidence in this case. Based upon this examination, this

court finds that none of the patents is an anticipation of the

invention in suit. The Schiltz invention is novel under 35

USC section 102.

Nonobviousness

This court, having determined that the Schiltz invention is

both useful and novel, must now determine whether the

development would have been obvious to one of ordinary

skill in the art, in light of the prior art. 35 USC section 103.

Under (section) 103, the scope and content of the

prior art are to be determined; differences between the

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

and the level of ordinary skill in the partinent art re-

solved. Against this background, the obviousness or

nonobviousness of the subject matter is determined.

Graham v. John Deere Co., 383 U.S. 1, 17, 148 USPQ 459,

466-467 (1966).

[758]

A. Scope and Content of Prior Art

[9] It is conceded that the various mechanical compo-

nents that make up the Schiltz invention are present in the

prior art.

Courts should scrutinize combination patent claims

with a care proportioned to the difficulty and improb-

ability of finding invention in an assembly of old

elements.

A-25

A&P Tea Co. v. Supermarket Corp., 340 U.S. 147, 152, 87

USPQ 303, 305-306 (1950); see also Anderson’s-Black

Rock v. Pavement Co., 396 U.S. 57 (1960); Sakraida v.

Ag Pro, Inc., US. , 189 USPQ 449 (Apr. 20,

1976). The fact that the component elements are old in the

art, however, is not alone dispositive of the issue. As Judge

Learned Hand observed:

All machines are made up of the same elements; rods,

pawls, pitmans, journals, toggles, gears, cams, and the

like, all acting their parts as they always do and always

must * * *. But the elements are capable of an infinity

of permutations, and the selection of that group which

proves serviceable to a given need may require a high

degree of originality. It is that act of selection which is

the invention; and it must be beyond the capacity of

common-place imagination.

Woodstream Corp. v. Herter’s Inc., 446 F.2d 1143, 1156-

57, 170 USPQ 380, 389-391 (8th Cir. 1971), quoting

B. G. Corp. v. Walter Kidde & Co., 79 F.2d 20, 22, 26

USPQ 288, 289-290 (2d Cir. 1935). The issue to be deter-

mined, therefore, is whether the development of the Schiltz

invention was obvious; not whether the various elements

which make up the device can be found in isolation in the

prior art.

The evidence in this case discloses that, prior to the Schiltz

invention, the device used for moving haystacks was the

cable-type mover. It is not seriously disputed that the prior

art disclosed no chain-type device for moving haystacks. De-

fendants contend, however, that by combining prior art

references the Schiltz device can be created.

ae we

A-26

The prior art relied upon by Defendants for this purpose

consists primarily of the Lahman, Rogers, Wangsness, Hol-

cer, and Bruce patents. It is clear that no one of these patents

alone teaches the Schiltz invention.

The Lahman patent discloses the conventional cable-type

haystack mover. The primary use of this patent by Defendants

is to show the use of a long, wide, tiltable bed upon which a

haystack may be loaded. It is undisputed that the device

as claimed lacks elements (f), (g), and (h) of claim 10 of

the Schiltz patent.

The Rogers patent teaches a device adapted for the load-

ing and unloading of logs. A reading of the patent teaches

the use of “fingers” to place logs on the conveyor chains on

a tilted ramp leading to the bed assembly. The ramp was not

designed for supporting objects during transport.

The Wangsness patent shows a conveying loader to be

used in connection with wagons, carts, or other vehicles.

The specifications of the patent disclose the purpose of the

invention as “relating to loaders and more particularly to

devices including means for gathering and conveying hay

and grain in the field * * *.” Defendants admit that elements

(d) and (h) of claim 10 of the Schiltz patent are not dis-

closed by Wangsness.

The Holcer patent is relied upon as teaching the speed

relationship disclosed by claim 10(h) of the Schiltz patent.

Claim 1 of Holcer claims “means drivingly connecting said

drive means to said conveyor assemblies for driving said

flexible members at a speed approximately equal to the

ground speed of said frame.” It is undisputed that the

structure of the Holcer invention does not disclose the

Schiltz device.

The Bruce patent addresses a fertilizer or straw spreader

A-27

which may be pushed into a pile of this material to withdraw

a certain amount for spreading. Bruce lacks ciements (d)

and (h) of claim 10 of the Schiltz invention.

An examination of the patents primarily relied upon by

Defendants shows that none of the inventions disclosed by

the patents with the exception of the Lahman patent, relates

to the moving of haystacks. While some of the patents refer

to the moving of hay, this hay consists either of loose hay in

the field, or of bales of hay. The Defendants contend, how-

ever, that minor modifications of the prior art would have

produced the Schiltz invention. At this point, this court

merely finds that the prior art patents introduced in evidence

in this case show the scope and content of the prior art

related to the Schiltz invention.

B. Level of Ordinary Skill in the Art

{10} Another initial determination which must be made

under the holding in Graham is the level of ordinary skill in

the art.

A finite quantitative definition of this ordinarily skilled

person is difficult at best * * *. Rather the various prior

art approaches employed, the types of problems [759]

encountered in the art, the rapidity with which innova-

tions are made, the sophistication of the technology

involved, and the educational background of those

actively working in the field are among the factors

which will ofttimes aid in developing a picture of what

is the level of skill of the ordinary person in the art.

Jacobson Brothers, Inc. v. United States, 512 F.2d 1065,

1070-71, 184 USPQ 181, 184-186 (Ct. Cl. 1975). The

A-28

Jacobson court went on to note that commercial success and

failure of others may be useful as real-life indicia of the

level of ordinary skill in the art, as well as being secondary

proof of the validity of a patent. 512 F.2d, at 1071, 184

USPQ 185-186.

Defendants introduced little evidence specifically directed

to the issue of the level of ordinary skill in the art. Nonethe-

less, an examination of the evidence in toto discloses to this

court sufficient bases from which to make the required

finding.

[11] The evidence shows that the prior art approach to

haystack moving relied exclusively on the cable-type mover,

in one form or another, since 1897. While numerous ad-

vances had been made in the cable-type mover over the

years, Defendants could point to no successful variation on

that theme prior to the Schiltz invention. The prior attempts

of Sutton and Kopecky to automate haystack moving had

met with failure. The majority of people working in this area

were not technicians and engineers; rather, they were farm-

ers, ranchers, blacksmiths, and custom haystack movers.

The formal educational level of these persons was generally

low. An examination of all of the evidence in this case con-

vinces this court that the level of ordinary skill in the art was

relatively low.

C. Differences Between the Schiltz Invention and the Prior

Art

As previously discussed, there are easily apparent differ-

ences between the Schiltz invention and each of the individ-

ual prior art patents in evidence in this case. The only patent

directed to the problem of moving haystacks is the Lahman

patent. The differences between this device and the Schiltz

A-29

invention are clear, and have been thoroughly examined in

this opinion. The remainder of the inventions disclosed by

the patents relate to various types of conveyor systems for

use in loading and conveying things other than haystacks.

While there is conflicting expert testimony on the point,

this court finds Plaintiff's experts more convincing after in-

dependently examining the prior art. This court finds that,

with the exception of Lahman, none of the patents in evi-

dence discloses a device capable of automatically loading a

haystack without substantial modification.

Another difference between the Schiltz invention and the

prior art, upon which Plaintiff places great emphasis, is the

difference in frictional characteristics between the Schiltz

invention and the prior art cable-type movers. This difference

comes about because of the concerted action of the support

beams, conveying chains, and speed relationship disclosed

by the Schiltz patent. In simplified terms, the result of this

concerted action is that the primary support chains remain

relatively fixed with respect to the bottom of the haystack.

The result of this is that more of the haystack can be re-

moved from the field, and that the haystack will be disar-

ranged insubstantially during the loading and unloading

operation. This operation is in contrast to that of the cable-

type mover, where the haystack is pulled onto the bed of the

mover during loading and pushed off during unloading. This

action creates a sliding friction which tends to more seriously

disarrange the haystack. Plaintiff posits that this is a signifi-

cant advantage over the prior art movers, and was not shown

by any of the prior art patents.

eee ats - =

A-30

D. Conclusions on Obviousness

[12] It is well settled that a patent cannot be held valid

for a development which would have been obvious to one of

ordinary skill in the art in light of the prior art. Graham v.

John Deere Co., 383 U.S. 1, 148 USPQ 459 (1966); Ameri-

can Infra-Red Radiant Co. v. Lambert Industries, Inc., 360

F.2d 977, 149 USPQ 722 (8th Cir. 1966). Prior art may

be combined for purposes of demonstrating obviousness. As

noted by the Eighth Circuit Court of Appeals, the test of

obviousness is the only correct test to be applied in deter-

mining whether a new combination of known elements

amounts to invention. American Infra-Red Radiant Co. v.

Lambert Industries, Inc., 360 F.2d 977, 149 USPQ 722 (8th

Cir. 1966).

[13] Itis incumbent upon this court, however, when de-

termining the issue of obviousness, to avoid slipping into the

use of hindsight. Graham v. John Deere Co., 383 U.S. 1

(1966), 148 USPQ 459. The fact that all the elements of the

claimed invention may be disclosed in the prior art does not,

of itself, negative patentability. Dann v. Johnston, US.

,189 USPQ 257 [760] (Mar. 31, 1976); Deepsouth

Packing Co., Inc. v. Laitram Corp., 406 U.S. 518, 173

USPQ 769 (1972). As the court observed in Woodstrear:

In retrospect, many creative developments seem com-

monplace. The critical question under Graham is

whether at the time of the invention the subject would

have been obvious to one skilled in the art.

Woodstream Corp. v. Herter’s, Inc., 446 F.2d 1143, 1156,

170 USPQ 380, 389-390 (8th Cir. 1971) (emphasis add-

ed). Whe:. prior art references are combined to challenge

A-31

the patentability of an invention the test to be applied is:

Does the prior art suggest to one ordinarily skilled in the art

doing what the applicant has done? 2 Deller’s Walker on

Patents section 110, at 220 (2d ed. 1964); see also United

States v. Adams, 383 U.S. 39, 50, 148 USPQ 479, 483

(1966); Dann v. Johnston, US. , 189 USPQ 257

(Mar. 31, 1976).

Viewing the prior art as a whole, it cannot be said that

the prior art would have suggested to the ordinary man

skilled in the art the developments achieved by Schiltz. Al-

though there is conflict in the expert testimony on this point,

this court finds the testimony of Plaintiff's experts more con-

vincing. Indeed, two of Defendants’ experts gave testimony

which supports the finding of nonobviousness. Mr. Wolfe

and Mr. Lahman were actively engaged in research and de-

velopment in the haystack moving industry. At the time they

were working, all of the additional prior art patents cited by

Defendants were available. Nevertheless, neither of these

men developed a concept similar to that of Schiltz. Wolfe’s

last patent application, filed while he was working on hay-

stack mover development for Farmhand in 1957, was for a

cable-type mover. Lahman, even after seeing an operating

mover based on the Schiltz disclosures, misunderstood the

function of the chains on the device, and was unsuccessful

in his early attempts to develop a chain-type mover. Both

of these men were possessed of more than ordinary skill in

the art; yet the subject matter of the Schiltz invention was

not obvious to them.

Perhaps better evidence of the nonobviousness of the sub-

ject matter of the Schiltz invention to those of ordinary skill

in the art can be derived from the Sutton-Stokes attempt. The

Sutton machine was clearly an attempt to improve upon

A-32

cable-type movers. It was equally clearly a failure. Sutton

and Stokes failed to recognize the advantages of keeping the

surface of the conveying elements relatively fixed with re-

spect to the bottom of the haystack during a loading opera-

tion. As a result, the Sutton machine never loaded a hay-

stack, and the attempt was abandoned. It was only after the

teachings of Schiltz became well known that the Sutton

machine was made to function; and the modifications to this

machine to achieve success were obvious only after Schiltz.

Defendants have not demonstrated to this court that the

achievements of Schiltz were obvious in light of the prior art

patents in evidence in this case. Defendants introduced many

graphic illustrations to demonstrate how the prior art could

be combined to create the invention in suit. At no point,

however, did Defendants show that these combinations

would have been obvious. As noted above, the proper test

to be applied in a suit involving a combination of elements

known in the art is whether the prior art as a whole would

suggest doing what an applicant has done. Defendants have

offered no evidence to show how, short of the exercise of an

inventive faculty or of hindsight, one would determine which

of the various elements to combine to create a device for the

purpose addressed by the Schiltz patent.

[14] Even assuming the Defendants have introduced

credible evidence of obviousness, this court finds that they

have failed to introduce sufficient evidence to carry their bur-

den of proof. A patent is presumed valid when issued. 35

USC section 282. This presumption is rebuttable, but must

be overcome by substantial evidence negating one of the

three requisites of patentability. L&A Products v. Britt Tech

Corp., 365 F.2d 83, 150 USPQ 770 (8th Cir. 1966) ; Wood-

stream Corp. v. Herter’s Inc., 446 F.2d 1143, 170 USPQ

380 (8th Cir. 1971).

A-33

[15] Defendants rely on the rule that the presentation

to the court of prior art not disclosed to the Patent Office

weakens or destroys the presumption of validity. American

Infra-Red Radiant Co. v. Lambert Industries, Inc., 360

F.2d 977, 149 USPQ 722 (8th Cir. 1966). The cases zely-

ing on this reasoning, however, require that the uncited

prior art must be pertinent to the subject matter in issue.

Ralston Purina Co. v. General Foods Corp., 442 F.2d 389,

170 USPQ 202 (8th Cir. 1971). Furthermore, the mere

fact that a patent was not cited should not be sufficient to

destroy the presumption of validity. It has been held that a

search record is prima facie evidence that all patents con-

tained in the classes and subclasses searched were examined.

Deering Milliken Research Corp. v. Beaunit [761] Corp.,

382 F.Supp. 403, 182 USPQ 421 (W.D.N.C. 1974). The

evidence in this case shows that all the patents introduced

by Defendants as pertinent, unconsidered prior art were

contained in the classes searched by the Patent Office ex-

aminers. Defendants assert that these patents were over-

looked by the examiners. This court, considering the evi-

dence of the experience of the examiners involved, finds

that it is more likely that the examiners chuse not to cite

the patents, finding them no more illuminating than those

cited in the file wrapper of the patent in suit.

[16] Even if this court were to conclude that the exam-

iners overlooked these patents, this will not necessarily de-

stroy the presumption of validity. As the court observed in

Illinois Tool Works, Inc. v. Continental Can Co.:

Where the Patent Office cites some prior art, but not

other equally relevant and similar prior art, the pre-

sumption of validity is weakened only to the extent that

A-34

the teaching of the uncited art is not disclosed in the

cited art.

Illinois Tool Works, Inc. v. Continental Can Co., 273

F.Supp. 94, 111, 154 USPQ 401, 415-416 (N.D. Ill. 1967).

The Seventh Circuit has gone even further, holding that the

introduction of additional prior art similar to that considered

by the Patent Office examiners strengthens the presumption

of the validity of the patent. TSC Industries, Inc. v. Interna-

tional Harvester Co., 406 F.2d 53, 160 USPQ 34 (7th Cir.

1968). An examination of the patents cited by Defendants

convinces this court that they are no more pertinent to the

subject matter of the patent in suit than those cited by the

examiners. Defendants have failed to destroy the statutory

presumption of the validity of the patent through the intro-

duction of prior unconsidered art.

This court has carefully examined all of the prior art in

this case. On the basis of this examination, and considering

the testimony of the witnesses at trial, it must be concluded

that Defendants have failed to carry their burden of proving

the invalidity of the Schiltz patent by substantial evidence.

This court concludes that the subject matter of the Schiltz

invention was not obvious to one of ordinary skill in the art

at the time of invention. None of the cited prior art dis-

closed devices designed for moving large haystacks, or simi-

lar objects, through the use of chain conveyors. Defendants

have failed to show by substantial evidence that the prior

art disclosures could be combined and modified by one of

ordinary skill in the art to achieve the result of the Schiltz

patent.

A-35

E. Secondary Considerations

[17] The conclusion that the invention of Boyd Schiltz

was not obvious is buttressed by numerous secondary con-

siderations. The Court in Graham recognized that factors

such as commercial success of the invention, the solution to

long-felt needs by the invention, the failure of others to arrive

at the solution, among others, may be considered as indicia

of obviousness or nonobviousness.

1. Commercial Success

{18] Plaintiff has introduced evidence of the commer-

cial success it has enjoyed since it acquired the patent in

suit. Within five years of the date of invention, the chain-type

haystack mover was taking over the market, despite the fact

that it was more expensive than the cable-type mover. De-

fendant’s brief attempts to attribute this success to factors

other than the invention in suit. While certain factors such

as the stability of Lahman’s sales of the cable-type mover

may go to minimize the argument of commercial success,

most of the arguments advanced against the invention as

the cause of the commercial success of Farmhand are un-

convincing. This court cannot understand why even if the

economic factors were such that more farmers and ranchers

would buy more haystack movers, the purchasers would buy

the more expensive chain-type movers unless there was some

advantage to this device as compared to the cable-type. This

court is convinced that the reason for the commercial success

of the Schiltz device was its comparative advantages over the

cable-type mover.

A-36

2. Long-Felt Need

[19] Another indicia of the nonobviousness of the in-

vention was the solution to the long-felt need for a safer and

more convenient means for moving haystacks. The evidence

shows that Farmhand’s employees (including Defendants’

expert Mr. Wolfe), and Lahman, among others, had long

been attempting to develop improvements in the cable-type

haystack mover. The activities of Sutton and Kopecky also

bear witness to attempts to improve the art of haystack mov-

ing. The age and volume of the prior art cited in this case

also demonstrates the desire to improve the art. See Deering

Milliken Research Corp. v. Beaunit Corp., 382 F.Supp. 403,

182 USPQ 421 (W.D.N.C. 1974). The advent of the Schiltz

invention solved the needs felt by [762] persons work-

ing in this area. As Lahman himself admitted, the Schiltz

device provided a safe, quick, and efficient device whereby

one person could load and unload haystacks without leav-

ing the seat of his conveyance.

3. No-Unknown or Unavailable Element Required

[20] An additional indicator of the nonobviousness of

the invention in suit is the fact that all of the elements need-

ed to produce the device patented by Schiltz were readily

available. This factor has been recognized as bearing on

the obviousness of the invention. Lyon v. Bausch & Lomb

Optical Co., 224 F.2d 530, 106 USPQ 1 (2d Cir. 1955);

B. G. Corp. v. Walter Kidde & Co., 79 F.2d 20, 26 USPQ

288 (2d Cir. 1935). The fact that nothing unknown was

needed to create the invention, and that the invention was

still not forthcoming, is evidence of the fact that the inven-

tion was nonobvious, and required the exercise of an inven-

tive art.

A-37

4. Failure of Others

[21] Failure of others, attempting to improve upon the

prior art, to arrive at a solution comparable to the invention

in question is furt.ci evidence of the nonobviousness of the

invention, and may serve to strengthen the presumption of

validity of the patent. Reeves Instrument Corp. v. Beckman

Instruments, Inc., 444 F.2d 263, 170 USPQ 74 (8th Cir.

1971). This court has received evidence of two prior failures

of persons attempting to improve the art of haystack moving

by abandoning the use of cables. Kopecky attempted to build

a self-loading haystack mover. The device would not func-

tion, and he converted it into a cable-type mover. Sutton’s

attempt has been previously discussed. This device was also

an anbandoned failure. Defendants have been unable to

automate the haystack mover.

5. Asquiescence in Validity by Others

[22] The fact that others in the industry acquiesce in the

validity of the patent at expense to themselves may be con-

sidered evidence of nonobviousness and validity of the pat-

ent. Shaw v. 13.B. & A.C. Whiting Co., Inc., 417 F.2d 1097,

163 USPQ 580 (2d Cir. 1969). The evidence in this case

showed that Plaintiff has received in excess of $200,000 in

royalties from its licensing of the patent in suit. Perhaps

even more persuasive of the acquiescence in validity by

others is the fact that Craven never contested the validity of

the patent when sued for infringement. Farmhand, Inc. v.

Craven, 455 F.2d 609, 173 USPQ 1 (8th Cir. 1972).

[23] Defendants are correct in pointing out that there

may be sound economic reasons for paying royalties and

avoiding a costly patent suit, especially when someone else

A-38

is challenging the patent in the courts. They fail to success-

fully explain, however, why Craven, when confronted with

an infringement action, chose to admit the validity of the

patent and proceed only on the issue of infringement. While

this may not be strong evidence of the validity of the patent,

this court must consider it of at least some weight in support

of the validity of the patent.

F. Miscellaneous Defenses

Defendants have also alleged that the Schiltz patent should

be found invalid because of Plaintiff's alleged lack of candor

with the Patent Office during the prosecution of his applica-

tion. Specifically, it is alleged that Schiltz and his attorneys

failed to disclose the Lahman patent, the Sutton machine,

the alleged contributions of Bruce Schiltz and Ivyl Kopecky,

and the alleged best mode of the invention.

[24] It is well settled that failure to use full candor with

the Patent Office in the prosecution of an application for a

patent may be raised as a defense to the enforceability of the

patent. Precision Instrument Mfg. v. Automotive Mainte-

nance Machinery Co., 324 U.S. 806, 65 USPQ 133 (1945).

As this standard has been recently interpreted by the Eighth

Circuit Court of Appeals, however, more than a merely good

faith or innocent non-disclosure must be shown; intent to

deceive must be proved. Pfizer, Inc. v. International Rectifier

Corp., 538 F.2d 180, 190 USPQ 273 (8th Cir. 1976).

[25] This court finds that any non-disclosure of the

Lahman patent and the Sutton machine were in good faith,

and will not give rise to the defense. The evidence shows

that the Lahman patent was within the classes searched by

the Patent Office examiners, and that there was no showing

of an affirmative attempt to draw the examiners’ attention

A-39

away from the Lahman patent as part of the prior art. In

fact, the Schiltz patent application specifically mentions the

prior art cable-type movers and discusses their drawbacks.

The Sutton machine was not disclosed to the Patent Office

because Schiltz did not think the device had any bearing on

what he sought to patent. As previously discussed, the Sutton

machine was an abandoned experiment [763] which

cannot be considered part of the prior art. The deposition

testimony of the examiners discloses their familiarity with

devices similar to the Sutton machine. These facts lead this

court to the conclusion that failure to disclose the Lahman

patent and the Sutton machine will not give rise to the

unenforceability defense.

Defendants also urge that Schiltz and his attorneys failed

to disclose the contributions of Bruce Schiltz and Ivyl Ko-

pecky. Defendants have alleged that Bruce Schiltz and Ivyl

Kopecky are prior inventors of the subjective matter of the

patent in suit. They also allege that Kopecky is a co-inventor

by reason of the “Kopecky Drive” which was added to the

Schiltz device prior to the date when the patent was issued.

Finally, they contend that by failing to specifically note the

“Kopecky Drive” in his application, Schiltz failed to set

forth the best mode of operation for his invention.

The evidence presented by Defendants in support of their

allegations that Bruce Schiltz and Ivyl Kopecky were prior

inventors is unconvincing at best. The main emphasis of

Defendants’ argument is placed on the alleged prior concep-

tion of Bruce Schiltz. The only evidence which was offered to

prove the fact of prior conception or invention was the un-

supported deposition testimony of Bruce Schiltz. There were

no drawings of his alleged conception. There was no evi-

dence presented of any attempt to reduce this conception to

A-40

practice. This court finds that Defendants have failed to

prove that Bruce Schiltz was a prior inventor of the subject

matter of the invention in suit, and have failed to prove that

he made any contribution to the invention which should

have been disclosed to the Patent Office.

Defendants’ contentions relating to Ivyl Kopecky concern

the development and use of the “Kopecky Drive” on the

Schiltz device. From the evidence, this court finds that

Kopecky was neither a prior inventor nor a co-inventor of

the subject matter of the Schiltz invention. The addition of

the “Kopecky Drive” is part of the best mode of operation

of the Schiltz invention. 35 USC section 112 requires that:

The specification shall contain a written description

of the invention, and of the manner and process of

making and using it, in such full, clear, concise, and

exact terms as to enable any person skilled in the art to

which it pertains, or with which it is most clearly con-

nected, to make and use the same, and shall set forth

the best mode contemplated by the inventor of carry-

ing out his invention.

* * *

The Schiltz patent specifically provides:

Having noted that means must be provided in accord-

ance with the present invention for moving the convey-

or chains in unison on the support members 19, it will

be appreciated that various suitable driving arrange-

ments may be provided to accomplish such movements.

(emphasis added )

There has been no evidence introduced to show that the dis-

closure of the patent is insufficient to enable one skilled in

A-41

the art to reduce the invention to practice. Plaintiff's evidence

shows that Schiltz had successfully used his machine for

loading haystacks prior to the addition of the “Kopecky

Drive.” There is no evidence that Schiltz attempted to con-

ceal anything, or to deceive the Patent Office or the public by

failing to set forth the “Kopecky Drive” as the best mode for

his invention. See Flick-Reedy Corp. v. Hydro-Line Mfg.

Co., 351 F.2d 546, 550-51, 146 USPQ 694, 696-698 (7th

Cir. 1965). There is no convincing evidence to show that

the “Kopecky Drive” was in fact the best mode of operation

of the Schiltz invention. This court concludes that Defend-

ants’ arguments based on the Kopecky contributions must

fall as not being sustained by the evidence.

This court concludes that Defendants have failed to make

out a defense based on misconduct and lack of candor before

the Patent Office. Defendants have failed to carry their bur-

den of proof to show any contribution by Bruce Schiltz or

Ivyl Kopecky sufficient to invalidate the patent.

Defendants have also alleged that Boyd Schiltz filed a

knowingly inaccurate and incomplete affidavit under Rule

131 in the prosecution of his application before the Patent

Office. This defense is apparently based upon the assertion

that the Schiltz device had not been successfully reduced to

practice by August 12, 1963, as testified to in the affidavit.

Defendants have introduced no convincing evidence in sup-

port of this allegation. Plaintiff, on the other hand, has intro-

duced the deposition testimony of Ivyl Kopecky, who stated

that he witnessed a successful use of the Schiltz device on

approximately August 5-8, 1963, on the Bill Rodman farm.

After considering the evidence, this court finds that the

Schiltz [764] invention was successfully reduced to prac-

tice prior to August 12, 1963. It is therefore concluded

A-42

that Defendant’s assertion of bad faith in the Rule 131 af-

fidavit has not been proved.

Finally, Defendants moved for summary judgment im-

mediately prior to trial. This motion was based on Muncie

Gear Works, Inc. v. Outboard Marine & Mfg. Co., 315 U.S.

759, 53 USPQ 1 (1942), and 35 USC sections 102(b) and

112. The basis for Defendants’ motion was that the claims

in issue did not set forth the fact that the conveyor chains on

the Schiltz invention might move slower than the rearward

speed of the mover; and that the addition of the claims in

issue, which are allegedly broader than the original claims,

came after the Schiltz device had been in public use for more

than one year.

Defendants’ contentions are not well founded. After an

examination of the file wrapper of the Schiltz patent, this

court finds that claims 10 and 11 are supported by the

original specification filed with the Patent Office.

Claim 3(g) of the original application recited:

(g) second drive means connected to said first drive

means and operative to impart concerted movement to

the upper flights of said conveyor chains in a direction

opposite to the direction of the generally longitudinal

movement imparted to said machine by said first drive

means and also at a rate generally equal to said machine

movement.

This court agrees with the analysis applied by the court in

Farmhand, Inc. v. Craven, 455 F.2d 609, 173 USPQ 1 (8th

Cir. 1972):

Defendant posits the argument that if the horizontal

movement of the chain conveyor is to be generally

)

A-43

equal to the backward movement of the truck, then in

the inclined loading position the chains must go at a

faster rate than the truck. This reads the specification

to mean that the roller chains must move faster in order

to achieve exact mathematical equality between the

truck and the chains on the horizontal. The specifica-

tions do not require this.

455 F.2d, at 610 173 USPQ 2 (emphasis in original). As

interpreted by the court in Craven, this statement in the

original specification supports chain movement slightly

greater than or slightly slower than the backup speed of the

mover. This court concludes that Defendants’ sections

102(b) and 112 and Muncie Gear defenses must fall as un-

supported by the evidence.

Infringement

Having found United States Patent No. 3,298,550 valid

and enforceable, this court must now determine whether the

patent is infringed by the Lahman haystack movers. Defend-

ants admit that the Lahman movers have all the elements of

claim 10 of the Schiltz patent, with the exception of element

(h). They also admit that infringement under claim 11 will

turn on the finding as to claim 10. Defendants contend that

the Lahman movers do not infringe the Schiltz patent be-

cause they do not have, or need, element (h) of claim 10.

The tests for infringement were set out by the Supreme

Court in Graver Tank & Mfg. Co. v. Linde Air Products Co.,

339 U.S. 605, 85 USPQ 328 (1950):

In determining whether an accused device or composi-

tion infringed a valid patent, resort must be had in the

A-44

first instance to the words of the claim. If the accused

matter falls clearly within the claim, infringement is

made out and that is the end of it.

But courts have also recognized that to permit imi-

tation of a patented invention which does not copy

every literal detail would be to convert the protection

of the patent grant into a hollow and useless thing. Such

a limitation would leave room for—indeed encourage

—the unscrupulous copyist to make unimportant and

insubstantial changes and substitutions in the patent

which, though adding nothing, would be enough to

take the copied material outside the claim, and hence

outside the reach of law. One who seeks to pirate an

invention, like one who seeks to pirate a copyrighted

book or play, may be expected to introduce minor

variations to conceal and shelter the piracy. Outright

and forthright duplication is a dull and very rare typ-

of infringement. To prohibit no other would place the

inventor at the mercy of verbalism and would be sub-

ordinating substance to form. It would deprive him of

the benefit of his invention and would foster conceal-

ment rather than disclosure of inventions, which is one

of the primary purposes of the patent system.

339 U.S., at 607, 85 USPQ at 330. The test in the Eighth

Circuit was expressed in Craven, a case involving the patent

which is the subject of the instant action. Applying the

equivalency test in this circuit entails [765] making the

determination that, the infringing device must be substan-

tially indentical with the one alleged (> be infringed in (1)

the result attained; (2) the means of attaining that result;

and (3) the manner in which its different parts operate and

cooperate to produce that result.

A-45

455 F.2d, at 611, 173 USPQ at 2-3. (Citations omitted. )

Applying these tests to the facts in this case, it is the con-

clusion of this court that the Lahman haystack movers

infringe claims 10 and 11 of United States Patent No.

3,298,550. Defendants’ contention that the Lahman mover

lacks the first drive means of element (h) of claim 10 cannot

be accepted. Defendants’ evidence shows that in normal op-

eration of the Lahman mover a tractor or other means of

conveyance is essential. This is the essence of the first drive

means. To argue that the trailer-type mover does not use a

first drive means in the loading operations is to ignore the

realities of the situation. The evidence shows that the Lah-

man mover is sold to be used with a tractor or other convey-

ance. The operator’s manual for the Lahman mover discloses

the cooperative arrangement between the first drive means

conveyance and the trailer loader during the loading opera-

tion. This court finds that the Lahman mover in operation

has the first drive means and cooperative speed relationship

of element (h) of claim 10 of the Schiltz patent. It is con-

cluded that the Lahman mover literally infringes claims 10

and 11 of the Schiltz patent, No. 3,298,550.

Even if no literal infringement were found, the Lahman

mover must still be found to infringe the Schiltz patent under

the doctrine of equivalents. Graver Tank & Mfg. Co. v.

Linde Air Products Co., 339 U.S. 605, 85 USPQ 328

(1950). Defendants do not argue that the Lahman mover

differs from the Schiltz invention in the means used and the

results attained. Their argument centers on the way the

various parts function to attain the result. This was the same

argument advanced in Farmhand, Inc. v. Craven, 455 F.2d

609, 173 USPQ 1 (8th Cir. 1972). This court finds the

reasoning of the decision in that case applicable here. De-

A-46

fendants argue that element (h) of claim 10 is unnecessary

to the Lahman machine. This court finds that this conten-

tion misreads the claims of the patent in suit. The Lahman

haystack mover, as actually operated, makes full use of the

first drive means and speed relationship disclosed in claim

10(h). Defendants’ witness Mr. Eggleston, who owns and

operates a Lahman chain-type mover, testified on cross ex-

amination that in the loading process the conveyance is

driven backward to push the trailer under the haystack, and

that the speed relationship between the rearward movement

of the conveyance and the forward movement of the convey:

ing chains was approximately equal. This court has also ex-

amined films of the operation of these devices, and attended

a demonstration of their use. After considering all the evi-

dence, this court finds that the Lahman haystack mover does

the same work, in substantially the same way, to achieve the

same result, as the Schiltz mover. It must be concluded,

therefore, that the Lahman chain-type haystack mover in-

fringes United States Patent No. 3,298,550.

The foregoing memorandum decision constitutes the

court’s findings of fact and conclusions of law pursuant to

Rule 52 of the Rules of Civil Procedure.

A-47

APPENDIX—B

[597]

Court of Appeals, Eighth Circuit

Farmhand, Inc.

v. Lahman Manufacturing Company, Inc. et al.

No. 77-1072 Decided Jan. 11, 1978

As amended Jan. 20, 1978

PATENTS

1. Infringement—Substitution of equivalents—In general

(§39.751)

Equivalency test in Eighth Circuit entails making deter-

mination that accused device is substantially identical with

one alleged to be infringed in result attained, means of at-

taining that result, and manner in which its different parts

operate and cooper ite to produce that result.

2. Patentability—In general (§51.01)

Pleading and practice in courts—Burden of proof—

Validity (§53.138)

Presumption from patent grant—Weight of (§55.9)

Essentials of patentability are invention or discovery, use-

fulness, and novelty; patent is presumptively valid and bur-

den of proving invalidity of patent by at least substantial evi-

dence is on party who asserts it.

A-48

3. Defenses—In General (§30.01)

Presumption from patent grant—In general (§55.1)

35 U.S.C. 282 specifies that patent is presumptively valid

and sets out defenses generally available in patent infringe-

ment suits, which are non-infringement, lack of responsibility

for infringement or unenforceability, invalidity of patent or

of any particular claim in suit on any ground specified in

Part II of Patent Act as condition of patentability, invalidity

of patent or claim for noncompliance with 35 U.S.C. 112 or

251, and any other fact or act made defense under Patent

Act.

Particular patents—Haystack Transporting

3,298,550, Schiltz, Haystack Transporting Device, claims

10 and 11 infringed.

Appeal from District Court for District of South Dakota,

Nichol, Ch. J.; 192 USPQ 749.

Actions by Farmhand, Inc., against Lahman Manufactur-

ing Company, Inc., and Robert Anderson, doing business as

Platte Implement, for patent infringement, in which de-

fendants counterclaim for declaratory judgment of patent

invalidity and for violation of antitrust laws, and by Lahman

Manufacturing Company, Inc., against Boyd D. Schiltz

(third-party defendant) for violation of antitrust laws. From

judgment for plaintiff, defendants appeal. Affirmed.

Kenneth D. Siegfried, and Schroeder, Siegfried, Ryan &

Vidas, both of Minneapolis, Minn., and Joe L. Maynes,

and Maynes, Tonner & Maynes, both of Aberdeen, S.D.,

for appellants,

A-49

John D. Gould, Alan G. Carlson, and Merchant, Gould,

Smith, Edell, Welter & Schmidt, P.A., all of Minneapolis,

Minn., for appellee.

Before Bright, Webster, and Henley, Circuit Judges.

Henley, Circuit Judge.

[598] This patent infringement suit is before us on

appeal from the United States District Court for the District

of South Dakota.

Plaintiff, Farmhand, Inc., is a Delaware corporation with

its principal place of business in Hopkins, Minnesota. Plain-

tiff is engaged in the business of manufacturing and selling

farm implements and is the owner by assignment of United

States Letters Patent No. 3,298,550 issued in 1967 to Boyd

D. Schiltz. The patent describes and covers a device where-

by large haystacks can be loaded on trailers or trucks, trans-

ported to a desired destination, and then unloaded by the

use of a chain type hoisting apparatus.

Defendant, Lahman Manufacturing Company, Inc., is a

South Dakota corporation with its principal place of busi-

ness in Heckla, South Dakota. Like plaintiff, it is engaged

also in the manufacture of farm implements, including a

stack moving device which plaintiff contends infringes the

Schiltz patent.

The other defendant, Robert Anderson, is an individual

who does business as Platte Implement in Platte, South Da-

kota. During the suit period he sold allegedly infringing

machines which he had purchased from Lahman.

Claiming that the Lahman machine infringed Claims 10

and 11 of its patent, plaintiff commenced this action against

Lahman and Anderson in 1972. The defendants answered

and filed counterclaims against plaintiff seeking a declara-

A-50

tory judgment to the effect that the patent in suit is invalid

and seeking damages for alleged violations of the federal

antitrust laws, 15 U.S.C. §§1-15. A third party complaint

was also filed against the inventor, Schiltz. In due course

the antitrust claims of the defendants against plaintiff and

Schiltz were severed from the plaintiff's patent infringement

claims and were ultimately dismissed summarily. The sev-

ered claims are not involved in this appeal.

In its complaint Farmhand sought injunctive relief and

treble damages, together with an attorney’s fees and costs.

It appears that by agreement determination of the amount

of damages, if any, sustained by plaintiff was postponed

pending the district court’s decision on the underlying issues

of patent validity and infringement.

The case was the subject of a bench trial of eighteen days

duration which was conducted by Chief District Judge Fred

J. Nichol. On September 27, 1976 Judge Nichol filed a

memorandum opinion incorporating his findings of fact and

conclusions of law. Farmhand, Inc. v. Lahman Mfg. Co.,

192 USPQ 749 (1976). The district court found that Claims

10 and 11 of the patent in suit were valid and infringed, and

that plaintiff was entitled to injunctive relief and to damages.

However, no determination has yet been made as to the

amount of damages that plaintiff should recover. The district

court found that the case was not an “exceptional” one and

denied plaintiff's claim for an attorney’s fee. See 35 U.S.C.

§285. Plaintiff does not complain of that ruling.

Plaintiff's device was put on the market in 1963. Prior to

that time persons who had occasion mechanically to move

haystacks from one place to another did so by lashing the

stacks to tiltable truck or trailer beds by means of cables and

winches. A stack would then be transported to its destination

A-51

by truck or by tractor and would be unloaded by retilting the

bed or trailer and releasing the stack therefrom’.

Plaintiff's device also makes use of tiltable beds or trailers

which are part of or connected with trucks or trailers. How-

ever, plaintiff's device differs substantially from the old cable

type movers. In Farmhand, Inc. v. Craven. 455 F.2d 609,

173 USPQ 1 (8th Cir. 1972), the court described plain-

tiff’s device as follows:

Plaintiff's device employs six roller chain belts run-

ning lengthwise in beams’on an elongated truck or trail-

er bed. As the truck is backed into a haystack the load

carrying surface is slightly inclined and the roller chains

serve as a conveyor pulling the haystack onto the load

surface. ...

The operation of plaintiff's device was described by Judge

Nichol in this case as follows:

... To load a haystack with the device, the mover is

backed up to a [599] haystack, the bed is tilted,

and the mover is started back under the stack. At this

point the rearward motion of the truck or tractor and

the forward motion of the chains on the bed act in con-

cert to lift the stack onto the bed as the bed simultane-

ously moves further under the stack. Unloading the

mover requires a mere reversal of this process. .. .

1See Farmhand, Inc. v. Craven, 455 F.2d 609, 173 USPQ 1 (8th Cir.

1972). That suit was brought against Russell O. Craven of South

Dakota, a leading producer of cable-type movers. Plaintiff claimed

that Craven had infringed Claim 10(h) of the Schiltz patent. The

defendant conceded the validity of the patent but denied infringement.

Ee aeons gerne a ee et See ae. Y, Soanen,

324 F.Supp. , 169 USPQ 811 (D. So. Dak. 1971). The judgment

of this district court was reversed by this court which was of the view

that infringement had been shown.

A-52

192 USPQ at 754.

One significant feature of plaintiff's mover is that the for-

ward movement of the chain conveyor is at approximately

the same speed as that of the backward motion of the bed as

it is being pushed under the stack to be moved. See discus-

sion in Farmhand, Inc. vy. Craven, supra.”

There is no question that plaintiff's chain-type mover is

superior to the old cable-type movers in a number of ways.

The cable-type movers were slow and relatively inefficient;

some of the necessary operations had to be performed man-

ually and required the operator to dismount from his truck

or tractor which could be particularly burdensome in bad

weather; and the cable-type movers presented some safety

hazards. After pointing out some of the disadvantages of the

cable-type mover, the district court went on to say:

The chain-type mover, it is conceded, has numerous

advantages over the cable-type. In operating a chain-

type mover the operator need not leave the cab of his

truck or tractor during loading or unloading. The

chain-type mover eliminates the necessity of manual

operations . . . The operation of the chain-type mover

is much quicker than that of the cable-type, and en-

ables an operator to load and unload more stacks in a

given period of time.

192 USPQ at 754.

While conceding that plaintiff's device is a useful one and

is an improvement over the cable-type stack movers that

have been described, the defendants contended in the dis-

trict court and contend here that the patent in suit is invalid

or that, if valid, it has not been infringed.

2Claims 10 and 11 of the Schiltz patent are set out in full in the district

court's opinion and will not be copied here.

A-53

It is not our function to try this case de novo. We are re-

quired to accept the factual findings of the district court

unless clearly erroneous, Fed. R. Civ. P. 52(a), and if the

district court applied correct standards of law to the accept-

able facts of the case, its judgment must be affirmed.

From our consideration of the record, we are satisfied

that the factual findings of the district court are adequately

supported by the evidence, and that the district court did not

err in applying the law to the facts. Accordingly, we affirm

the district court’s judgment and do so principally on the

basis of the opinion of Judge Nichol which we consider to

be detailed, painstaking and well reasoned.

Looking first at the issue of infringement, plaintiff

claimed that the defendants had infringed Claim 10(h) and

Claim 11 of the patent, and it seems to have been conceded

that if Claim 10(h) had been infringed Claim 11 had also

been infringed.

[1] Citing the tests of infringement laid down in Graver

Tank & Mfg. Co. v. Linde Air Products Co., 339 U.S. 605,

607, 85 USPQ 328, 330 (1950), and in Farmhand, Inc. v.

Craven, supra, 455 F.2d at 611, 173 USPQ 2-3, the district

court found that the claims in question had been infringed

by equivalent if not literally. In Farmhand, supra, 455 F.2d

at 611, 173 USPQ 2-3, we said:

... Applying the equivalency test in this circuit entails

making the determination that, “ ‘the infringing device

must be substantially identical with the one alleged to

be infringed in (1) the result attained; (2) the means

of attaining that result; and (3) the manner in which

its different parts operate and cooperate to produce that

result.’ ” Montgomery Ward & Co. v. Clair, 123 F.2d

878, 881, 51 USPQ 499, 502-503 (8 Cir. 1941). See

A-54

Ralston Purina Co. v. General Foods Corp., 442 F.2d

389, 393, 170 USPQ 202, 205 (8 Cir. 1971); General

Bronze Corp. v. Cupples Products Corp., 189 F.2d

154, 159, 89 USPQ 355, 358-359 (8 Cir. 1951).

We agree that the district court correctly made the three-

fold determination in question.

It is clear from the opinion of the district court that it

viewed the issue of patent validity as much more serious than

the issue of infringement. And the great bulk of the opinion

is devoted to a discussion of the various aspects of the valid-

ity issue.

[2] At the outset the district judge recognized that the

essentials of patentability are invention or discovery, useful-

ness and novelty. 35 U.S.C. $101. It was also [600] rec-

ognized that a patent is presumptively valid, and that the

burden of proving invalidity of a patent by at least substan-

tial evidence is upon the party who asserts it. 35 U.S.C.

§282; Woodstream Corp. v. Herter’s Inc., 446 F.2d 1143,

1149-50, 170 USPQ 380, 384-385 (8th Cir. 1971); L. & A.

Products, Inc. v. Britt Tech Corp., 365 F.2d 83, 86, 150

USPQ 770, 772-773 (8th Cir. 1966).

[3] Section 282 of Title 35 not only specifies that a

patent is presumptively valid, it also sets out the defenses

that are generally available in suits for patent infringement.

Those defenses are: (1) Non-infringement, lack of responsi-

bility for infringement, or unenforceability; (2) invalidity

oi the patent or of any particular claim in suit on any ground

specified in Part II of the Patent Act as a condition of pat-

entability; (3) invalidity of the patent or claim for non-

compliance with §112 or §251 and (4) any other fact or

act made a defense under the Act. .

A-55

Basically, the position of the defendants is that the

Schiltz patent does not meet the conditions of patentability

set out in 35 U.S.C. §102(a) and (g) since the invention

was anticipated by the prior art; that the condition set out in

$103 was not met because the invention was “obvious” in the

light of the prior art; and that the specification of the patent

application did not set out the best mode for the carrying

out of the invention as required by §112. It is further con-

tended that the patent is invalid or unenforceable because

of acts or omissions of the applicant in the prosecution of the

application before the Patent Office. And still another con-

tention is that the patentee was not the true inventor of the

patented device.

All of these contentions, and perhaps others, were con-

sidered in detail by Judge Nichol and were rejected by him.

We can add nothing of substance to what he has said. We

agree with counsel for plaintiff that the questions before the

trial court were essentially factual, that the findings of the

trial judge iave adequate evidentiary support, and that he

divined correctly the governing legal principles.

The judgment of the district court is affirmed, and the

case is remanded for a determination of the amount of dam-

ages to which plaintiff is entitled.

A-57

APPENDIX H

UNITED STATES COURT OF APPEALS

FOR THE EIGHTH CIRCUIT

Nos. 76-1918 and 76-2009

Clark Equipment Company and Clark Equipment, A.G.,

Appellants-Appellees,

vs.

Louis J. Keller and Cyril N. Keller,

Appellees-Appellants.

Appeals from the United States District Court

for the District of North Dakota

Submitted: August 31, 1977

Filed: February 17, 1978

Before GIBSON, Chief Judge, HEANEY and WEBSTER,

Circuit Judges.

GIBSON, Chief Judge.

The two consolidated cases underlying the present ap-

peal and cross-appeal arise out of a patent license con-

tract whereunder Louis and Cyril Keller, residents of

North Dakota, granted exclusive licenses on three inter-

A-58

related patents to Clark Equipment Company, a corpora-

tion incorporated under the laws of Delaware and with its

principal place of business in Michigan. In a similar li-

cense agreement, the Kellers granted to Clark Equipment

A.G. (CEAG), a Swiss corporation which [S. 2] is a

wholly owned subsidiary of Clark, an exclusive license un-

der certain foreign patents corresponding to the licensed

patents in the agreement with Clark. The patents involved

relate to self-propelled, three and four-wheel skid steer

loader vehicles manufactured by Clark in Gwinner, North

Dakota. Patent 3,151,503 (503 patent) is a mechanical pat-

ent entitled “transmission system”; Patent 3,231,117 (117

patent) is a mechanical patent entitled “tractor vehicle and

drive therefor”; Patent 195,254 (254 patent) is a design

patent entitled “self-propelled loader.”

Civil Action 4875

In October 1972, Clark filed a civil action against the

Kellers pursuant to 28 U.S.C. §§2201 and 2202, seeking

a declaration of the rights and obligations of the parties

under their license agreement and alleging that because

the three patents forming the subject matter of the license

were invalid, the license contract was unenforceable. This

declaratory judgment action, which was filed in the West-

ern District of Michigan, was transferred to the District

of North Dakota in August 1973. In September 1973, the

Kellers filed an answer and counterclaim. The counter-

claim was for royalties allegedly due from Clark under its

license agreement with the Kellers and under certain non-

exclusive sublicense contracts between Clark and others.

In their counterclaim, the Kellers also alleged that Clark

A-59

or its predecessor in interest, the Melroe Company, had

been negligent in failing to comply with the requirements

of 35 U.S.C. §102(b) by neglecting to file a patent ap-

plication on the 117 patent within the one-year period

after the invention had been in public use or on sale.

In response to this negligence claim, Clark filed a third-

party complaint against the law firm of Williamson, Bains

and [S.3] Moore as third-party defendant. Clark alleged

tnat if there had been negligence in the filing of the applica-

tion for the 117 patent, it had been that of the third-party

defendant, who had represented Louis Keller and Clifford

Melroe, the joint inventors of the mechanism underlying

the 117 patent, and who had had a professional obligation

to investigate the facts and see that the application was

timely filed. The cases presently before this court ‘do not

include issues of negligence or possible liability for late

filing of the 117 patent application, for on April 29, 1974,

the District Court’ ordered that Clark’s third-party com-

plaint and that portion of the Keller’s counterclaim per-

taining to these issues be tried separately from and after

the present declaratory judgment action was tried.

Civil Action 4839

On July 25, 1973, the Kellers filed a separate action

against Clark in the District of North Dakota. This action,

which embodied the allegations in the answer and counter-

claim for royalties due filed in Civil Action 4875, named

CEAG as an additional defendant. The complaint alleged

that, pursuant to a license agreement with the Kellers,

CEAG was an exclusive licensee under certain foreign pa-

1The Honorable Paul Benson, Chief Judge, United States District Court

for the District of North Dakota.

A-60

tents corresponding to the licensed patents in the agree-

ment with Clark, and that CEAG had failed to account

for and pay royalties due therevnder. Jurisdiction was

based upon diversity of citizenship. This action was con-

solidated with Civil Action 4875 on December 21, 1973.

Consolidated Actions

CEAG responded to the complaint in Civil Action 4837

[S. 4] with motions to dismiss in which it alleged lack of

in personam jurisdiction, absence of proper service of pro-

cess and failure of proper jurisdictional amount. The Dis-

trict Court denied these motions, Keller v. Clark Equip-

ment Co., 367 F. Supp. 1350 (D.N.D. 1973); CEAG re-

asserted its jurisdictional defenses in its answer.

On July 18, 1974, the District Court ordered a separate

trial on the issue of the validity of the three patents. The

trial on this severed issue ran for some 33 days in early

1975. The 30-volume trial transcript includes the testi-

mony of 46 witnesses; 546 exhibits were also introduced

into evidence. Following the trial, the district judge filed a

lengthy, unpublished memorandum opinion in which he

ruled that the 503 and 254 patents were valid, and that

the 117 patent was invalid. Clark appeals the judgment of

the District Court on all three patents; the Kellers cross-

appeal on the 117 patent. CEAG appeals from the Dis-

trict Court’s rulings on its jurisdictional allegations and

defenses.

Jurisdictional Issues

Before addressing the merits of the patent issues raised

on this appeal and cross-appeal, we will consider CEAG’s

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jurisdictional contentions. The District Court initially. re-

jected CEAG’s jurisdictional defenses in a memorandum

opinion directed solely to this issue and entered prior to

trial. Keller v. Clark Equipment Co., 367 F. Supp. 1350

(D.N.D. 1973). CEAG has continued to assert a lack of

in personam jurisdiction. In its lengthy memorandum

opinion on the patent validity issues of this case, the Dis-

trict Court did not re-analyze CEAG’s jurisdictional [S. 5]

assertions. It simply took note of their continuing nature

and cited its previous opinion denying CEAu s jurisdiction-

ally based motion to dismiss.

In its initial consideration of CEAG’s motion to dismiss,

the District Court made the following findings of fact and

inferences therefrom relative to jurisdiction over CEAG.

CEAG, a corporation organized under the laws of Switz-

erland, is a wholly owned subsidiary of Clark, a Delaware

corporation doing business in North Dakota. The present

case concerns separate manufacturing licenses between

Clark and the Kellers, who are residents of North Dakota,

and CEAG and the Kellers. Each agreement was executed

on May 19, 1971. The Clark-Keller agreement was sub-

scribed by J. Becket (sic), as vice-president of Clark

Equipment Company. The CEAG-Keller agreement was

also signed by J. Becket (sic), this time in the capacity of

vice-president of CEAG. Both agreements give Clark’s

Buchanan, Michigan, address for purposes of notice to the

licensee and provide for continuing royalty payments to be

made to the Kellers, residents of North Dakota. In the

instant case, service on CEAG was inade pursuant to Fed.

R. Civ. P. 4(d)(7) by serving the summons and complaint

on an officer of Clark at its Melroe Division in Gwinner,

North Dakota. CEAG maintains a liaison engineering

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employee at the Melroe Division of Clark in North Da-

kota.

It can be reasonably inferred that CEAG became aware

of the patents through its close association with the Mel-

roe Division of Clark. Moreover, the factual situation here

supports the inference that CEAG, or someone from Clark

acting on behalf of CEAG, contacted the Kellers in North

Dakota about the foreign patents, in contemplation of se-

curing a European arrangement analogous to Clark’s

American arrangement exploiting the domestic patents in

question. Irrefragably, [S. 6] CEAG sought out the

Kellers in North Dakota, and the Clark-Keller and CEAG-

Keller licensing agreements were handled by Clark’s coun-

sel for both Clark and CEAG. In this transaction, it clearly

appears that Clark was acting for and on behalf of its whol-

ly owned subsidiary, CEAG, and that the same individual

signed both agreements on behalf of Clark and CEAG.

We have reviewed the record as a whole, giving par-

ticular attention to the documents from which the bulk

of the District Court’s jurisdictional findings and infer-

ences are derived, and we can find no basis for rejecting

these findings as clearly erroneous.’ Moreover, we believe

that they provide adequate support for the District Court's

conclusions that CEAG had “minimum contacts” with

North Dakota, which rendered in personam jurisdiction

proper, and that even though CEAG itself was not doing

business in North Dakota, CEAG and Clark were inex-

2CEAG takes particular exception to the District Court's finding that

CEAG had a liaison officer at the Melroe Division of Clark ua

Gwinner, North Dakota. We do not believe that this finding has been

shown to be clearly erroneous. Moreover, we note if i

assumed that there was no liaison officer in North Dakota, there

mains adequate factual support in the record for the District Court's

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tricably involved with the Kellers in the negotiations and

execution of the patenting licensing agreements.

CEAG attacks the District Court’s jurisdictional con-

clusion on several bases. We have considered its conten-

tions in light of the District Court’s careful analysis of this

issue and find them to be without merit. Presence by the

[S. 7] defendant in the forum state is*not a jurisdictional

prerequisite. McGee v. International Life Insurance Co.,

355 U.S. 220 222-23 (1957); Electro-Craft Corp. v. Max-

well Electronics Corp., 417 F. 2d 365, 369 (8th Cir. 1969).

It is only necessary that the defendant have sufficient mini-

mum contacts with the forum state so that requiring it to

defend itself there will not offend traditional notions of

fair play and substantial justice. International Shoe Co. v.

Washington, 326 U.S. 310, 316 (1945); Aaron Ferer &

Sons Co. v. Atlas Scrap Iron & Metal Co., 558 F. 2d 450,

454 (8th Cir. 1977). The District Court found that service

had been made in compliance with the law of North Da-

kota* and that there were minimum contacts between

CEAG and North Dakota in CEAG’s licensing agreement

with the Kellers, who are residents of North Dakota, and in

its extremely close relationship to its parent corporation,

Clark, which did business in North Dakota. The District

Court did not consider the mere existence of a parent-sub-

sidiary relationship adequate to establish minimum con-

tacts with North Dakota. This relationship was merely one

of several factors which added up to the requisite mini-

mum contacts for in personam jurisdiction. We find neither

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factual nor legal error in the District Court’s disposition

of CEAG’s jurisdictional defenses and agree that there is

in personam jurisdiction over CEAG.

Patent Issues

The complexity of this case compels individual analysis

[S. 8] of each patent. Certain facts are common to all

three patents, however, and we believe that their recitation

here will provide an appropriate general introduction to the

purposes and nuances of the individual patents.

The Kellers originally granted an exclusive license on

the three patents at issue here to Melroe Manufacturing

Company (Melroe) in 1964. In 1969, Clark acquired Mel-

roe and succeeded to its rights under the license agree-

ment with the Kellers. In 1971, Clark and the Kellers en-

tered into a new licensing agreement which superseded the

1964 Melroe-Keller agreement and which contained a

clause based upon Lear v. Adkins, 395 U.S. 653 (1969),

specifically permitting Clark to challenge the validity and

scope of the licensed patents.

The three patents in dispute in this litigation have been

involved in two previous lawsuits. In the first action, which

was filed and concluded before Clark acquired Melroe, the

Kellers and Melroe sued Universal Manufacturing Company

(Universal) in the Eastern District of Virginia for infringe-

ment of the 503, 117 and 254 patents. This suit was set-

tled out of court. Pursuant to a stipulation containing an

acknowledgment of the validity of the three patents, a

consent decree and judgment were entered. By this settle-

ment, Universal took a sub-license from Melroe on the

three patents and agreed to pay royalties to Melroe. J. I.

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Case Company subsequently purchased Universal and ac-

quired its rights under the Melroe-Universal license agree-

ment. .

In 1968, these patents engendered a second round of

litigation, when Owantonna Manufacturing Company

(Owantonna) sued Melroe and Cyril Keller in the District

of Minnesota [S. 9] in an effort to have the 503,117

and 254 patents declared invalid.‘ Clark was substituted as

party defendant after its acquisition of Melroe in 1969. This

suit also ended in a settlement which incorporated an

agreement whereby Owantonna was granted a sub-license

by Clark on the three patents.

503 patent

Louis Keller and his brother Cyril operated a general re-

pair and blacksmith shop in Rothsay, Minnesota, during

the 1950’s. In 1954, the Kellers became acquainted with

Eddie Velo, a local grain and turkey farmer. In the early

summer of 1956, Velo discussed with the Kellers the prob-

lems he had experienced in having manure accretions re-

moved from his turkey barns. The barns had to be cleaned

by hand, because their structure precluded the use of any

mechanical loaders or tractors then available to Velo. Velo

wanted to mechanize the cleaning process, and he envi-

sioned a light, highly maneuverable loader vehicle as a

desirable means of doing so. He described to the Kellers

the type of machine which he felt would be necessary,

citing as an example an Owantonna windrower he had

once owned, which, he believed, had had a separate re-

*See Owantonna Mfg. Co., Inc. v. Melroe Co., Gaus en i Titiow:

_— 1969), which pertains to the preliminary

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verse and forward belt drive on each side and a caster

wheel arrangement in the rear.

After conteiplating the Velo barn cleaning problem

during the summer of 1956, the Kellers presented a free-

hand sketch of a loader to Velo. Pursuant to an under-

standing [S. 10] that Velo would pay for materials and

compensate them for out-of-pocket costs and some of their

labor, the Kellers began building a self-propelled loader in

late October 1959. Because of their elementary design meth-

ods, the Kellers invented as they built. The Velo loader,

which took approximately three months to complete and

was delivered to Velo in February 1957, incorporated a

rear-mounted engine, a belt drive to two forward driving

wheels, and a single free-castering rear wheel. In March

1957, Velo paid the Kellers $1,349.00 as compensation

for parts, material and some of the labor that went into

building the loader.

The relationship between the Kellers and Velo was one

in which the Kellers were kept closely advised of the load-

er’s performance and were allowed unlimited access to the

machine. Between February 1957 and the summer of

1958, the Kellers modified and improved the Velo loader,

which manifested certain operational problems. The most

serious problem concerned the loader’s belt drive. The

shifting of the loader’s idier lever created friction and heat

which caused the drive belts on each side of the loader

to stretch. The stretching resulted in a loss of driving pow-

er in both forward and reverse. When the belt on one side

alone stretched, the loader would drive only im circles.

These problems prompted the Kellers to develop a clutch

system that would eliminate the belt drive. During the

spring of 1958, they constructed a test plate resembling

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the side plate of the Velo loader. Upon this plate, they be-

gan to develop the clutch assembly which ultimately be-

came the transmission system covered by the 503 patent.

Around the end of July 1958, the cam-actuated clutch

drive mechanism recited in cach of the four claims of the

503 patent was installed in the Velo loader. The cam-

actuated clutch drive provided [S. 11] more positive,

responsive and reliable steering, starting and stopping con-

trol.

Prior to December 1, 1957, the critical date under 35

U.S,C. §102(b)° with respect to the 503 patent, the Kellers

built no other loaders. In January or February 1958, they

built several loaders equipped with the belt drive used in

the original Velo loader rather than the cam-actuated

clutch drive assembly covered by the 503 patent. Three

of these loaders were delivered to Jenoff, Inc. of Fergus

Falls, Minnesota, in the spring of 1958, but the record

contains no evidence that the Kellers were in contact with

Jenoff about their loader prior to December 1, 1957.

The application for the 503 patent was filed on De-

cember 11, 1958. The 503 paient, entitled “transmission

system”, contains four independent claims, each of which

is specifically directed to a particular cam-actuated clutch

drive mechanism having independently rotatable propul-

sion wheels which may be independently actuated by the

drive mechanism for driving the vehicle backward or for-

ward and for steering it. The 503 patent, which is a me-

chanical patent of 17 years’ duration, was granted to the

Kellers by the Patent Office on October 6, 1964. The Dis-

trict Court sustained the validity of the 503 patent.

A-68

[S. 12] In arguing on appeal that the trial court erred

in holding the 503 patent valid, Clark impugns the correct-

ness of essentially every step in the exhaustive factual and

legal analysis made by the District Court. We will address

Clark’s contentions seriatim, after briefly introducing the

basic tenets of patent law that must be applied to deter-

mine the validity of all three of the patents at issue here.

In order to be patentable, an invention must be useful,

novel and nonobvious. The utility of the inventions pa-

tented here is not in question; the parties contest only the

issues of novelty, or compliance with the patent require-

ments of §102(b), and nonobviousness. The standards for

determining whether an invention possesses novelty are set

forth in 35 U.S.C. §102. For the purposes of this first in-

quiry, we are concerned only with that aspect of 35 U.S.C.

§102(b) which precludes patentability where an invention

has been in public use or on sale in this country more than

one year prior to the date of the application for patent in

the United States.

Insofar as the requirement of nonobviousness is con-

cerned, 35 U.S.C. §103 sets forth the standard for deter-

mining whether the subject matter of an invention is non-

obvious.

A patent may not be obtained though the invention

is not identically disclosed or described as set forth

in section 102 of this title, if the differences between

the subject matter sought to be patented and the prior

art are such that the subject matter as a whole would

have been obvious at the time the invention was

made to a person having ordinary skill in the art to

which said subject matter pertains. Patentability shall

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not be [S. 13} negatived by the manner in which

the invention was made.

35 U.S.C. §103. The Supreme Court has fleshed out the

skeletal framework of §103 by providing guidelines for

making an analysis of nonobviousness.

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

are to be determined; differences between the prior

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

the level of ordinary skill in the pertinent art resolved.

Against this background, the obviousness or non-ob-

viousness of the subject matter is determined. Such

secondary considerations as commercial success, long

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

be utilized to give light to the circumstances sur-

rounding the origin of the subject matter sought to

be patented. As indicia of obviousness or nonobvi-

ousness, these inquiries may have relevancy.

Graham v. John Deere Co., 383 U.S. 1, 17-18 (1966).

Clearly, the test for nonobviousness requires basic factual

as well as legal inquiries, Graham v. John Deere Co.,

supra at 17, and is one that must be resolved upon a case-

by-case analysis. Woodstream Corp. v. Herter’s, Inc., 446

F, 2d 1143, 1150 (8th Cir. 1971).

(1) scope of patent claims

The 503 patent is entitled “transmission system”. Clark

contends that the District Court misconstrued the scope of

the claims of the 503 patent by limiting them to a trans-

mission system only and ignoring their integral relation-

ship to a vehicle. A mere reading of the District Court’s

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[S. 14] construction of the scope of the 503 patent claims

belies this contention.

The 503 patent contains four independent claims.

Each claim is specifically directed to a particular cam

actuated clutch drive mechanism for a self propelled

vehicle having independently rotatable propulsion

wheels which may be independently actuated by the

aforesaid drive mechanism for driving the vehicle for-

ward and backward, and for steering it.

Clark Equipment Co. v. Keller, Nos. 4875 and 4839, slip

op. at 11 (D.N.D. Sept. 23, 1976). The District Court, in

delineating the scope of the claims of the 503 patent, ex-

plicitly recognized that the basic purpose of the cam-ac-

tuated clutch transmission system was the steering and

driving of a vehicle. Thus, the claims of the 503 patent

were in fact construed just as appellant Clark argues they

should have been, and Clark’s contention requires no fur-

ther consideration.

(2) exclusion of Velo loader from prior art

In order to make a determination of obviousness under

35 U.S.C. §103, there must be a consideration of the dif-

ferences between the invention and the prior art. Clark

contends that the District Court erroneously excluded the

Velo loader from the prior art and, therefore, made an

incorrect obviousness analysis on the 503 patent. The basis

of Clark’s contention is the premise that the Velo loader

was prior art under §103 because it was in public use or

on sale prior to December 1, 1957, the statutory bar date

A-71

under §102 for the 503 patent.* The trial court held that

[S. 15] the Velo loader was neither on sale nor in public

use prior to December 1, 1957, and that its use prior to that

date was experimental.’ Upon a thorough review of the

record, we are convinced that the trial court applied appro-

priate legal principles to reach these conclusions, and that

they are based upon correct findings of fact.

Moreover, even if the trial court erred in determining

that the Velo loader was not prior art, this error leaves

its obviousness analysis unvitiated, for despite its finding

that the Velo loader was experimental, the trial court went

on to assume arguendo that the Velo loader was prior art

and to analyze the obviousness of the 503 patent from

that standpoint. The belt-driven Velo loader, which was

not disclosed as prior art to the Patent Office, did not con-

tain the cam-actuated clutch mechanism on which all four

of the claims of the 503 patent were allowed. The trial

court found:

Even if the original Velo loader as it existed prior to

the critical date of [S. 16] December 1, 1957, is

considered prior art to the 503 patent as having been

in public use or on sale for more than one year before

the 503 application was filed, this loader is no better

*On appeal, soe Dae aay yee S> sepmaas Gat Si pe.

ported ic use or on-sale activity rendered 503 patent invalid

under § 102(b); it argues only that these activities caused the Velo

is obvious: it relies on § 102(6 for a deflation of prior art applicable

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prior art than the Loyd patent cited and relied upon by

the Examiner, with respect to the particular clutch

drive arrangement for a vehicle in combination with

the cam actuation mechanism on which all four

claims of the 503 patent were allowed. There are

more of the elements in Loyd in the combination

set forth in the claims of the 503 patent ** * than

there are in the Keller Velo loader * * *.

Clark Equipment Co. v. Keller, supra at 19. Clark does

not challenge the correctness of this finding;* nor does our

independent review of the record reveal any reason to be-

lieve that it is incorrect.

(3) exclusion of White patent from prior art

The White patent, which was not cited by the Patent Of-

fice, describes a windrower with a “steering structure for

farm implements and the like.” At trial and on appeal,

Clark has intimated that this was the machine mentioned

by Eddie Velo to the Kellers in the summer of 1956. On

this basis, Clark contends that the White patent was

prior art for the 503 patent and that the trial court erred

in refusing to consider the White patent as prior art in its

analysis of the obviousness of the 503 patent.

This contention is unconvincing for several reasons.

[S. 17] First, we note that its basis, the testimony of

Eddie Velo, is equivocal, for Velo could not testify with

certainty that the windrower he mentioned to the Kellers

was the machime described by the White patent. Even if we

assume an identity between the White patent and the wind-

5Indeed, Clark does not even acknowledge the existence of this finding,

which directly contradicts its contention that the trial court erred by

failing to consider the Velo loader as prior art for the 503 patent.

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rower with which Velo was acquainted, however, we can

perceive no error in the trial court’s exclusion of the White

patent from the prior art or, indeed, a basis for any other

disposition of this issue. It appears that Clark did not

choose to argue to the trial court that the White patent

was prior art for the 503 patent. No evidence whatso-

ever was submitted by Clark at trial to show how the

White patent, alone or in combination with any other pa-

tents, might be relied upon as prior art.

The District Court held that the Velo loader did not

incorporate the claimed features of the 503 patent and was

no better prior art than the Loyd patent cited and relied

on by the Patent Examiner. It concluded that the relevancy

of the White patent, which was at best a possible fore-

runner of the Velo loader, was limited, because the White

patent was more significant to the belt drive of the original

Velo loader than to the cam-actuated clutch drive of the

503 patent. We can find no error in the trial court’s dis-

position of this issue.

(4) differences between prior art and claims of the 503

patent

Graham v. John Deere Co., 333 U.S. 1 (1966), requires

that in making an obviousness analysis under §103, the

trial court determine the scope and content of the prior

art, ascertain the differences between the prior art and the

claims at issue and resolve the level of ordinary skill in

[S. 18] the pertinent art. On appeal Clark alleges, in whol-

ly conclusory fashion, that the trial court failed to ascertain

the differences between the prior art and the claims of the

503 patent. This contention flies in the face of the trial

court’s careful examination of the claims of the 503 patent

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vis-a-vis the Schreck, Hellwarth and Loyd patents, which

were the primary prior art patents relied on by the Patent

Office, and the Velo loader, which was assumed to be

applicable prior art for the purposes of an obviousness

analysis. Based on this examination,” the trial court con-

cluded:

Assuming arguendo that the Velo loader is prior art,

the deficiencies in that loader were easily recognized

by both the Kellers and Velo. The most significant

problem involved the heating, and subsequent ex-

panding and slippage of the belts which resulted in

the Itss of driving and steering control. Installation of

clutches was a solution, but there existed a gap in the

teaching of the prior art—Hellwarth and Schreck—

as to how to install clutches in such a way to be able

to actuate them to maintain steering and forward and

reverse control in a smooth [S. 19] and effective

manner from the operator’s compartment. The Keiler’s

conceived a new clutch drive mechanism which proved

to be highly effective and commercially successful.

The solution by the Kellers was not readily obvious

to one having ordinary skill in the pertinent art.

*We consider that a repetition of the detailed findi underlying the

differences ascertained by the district judge would serve no useful

purpose here. In order, however, to give some indication of the care-

ful and painstaking character of his analysis oo ae

set forth a mere part of his findings on the Schreck patent. Dis-

orict Court found, inter alia, that the Schreck patent disclosed

propelled dolly which is controlled by an operator walking in front of

the dolly. As disclosed by the drawings of the Schreck patent, steer-

a rotatable gripping handle 61. A linkage bar 63 connected to handle

61 servers to move a link bar for actuation of a ae Sa units

* * * through crank arms * * * connected to the opposite ends of

link 51.” Clark Equipment Co. v. Keller, supra, slip op. at 17. We note

that the findings which we have just cited r a mere fraction

of the District Court’s exhaustive analysis the prior art.

A-75

Clark Equipment Co. v. Keller, supra, slip op. at 28. We

believe that the trial court complied with the requirements

of Graham v. John Deere Co., supra, by ascertaining the

differences between the prior art and the claims of the

503 patent.

(5) synergistic effect of claimed transmission system

Clark argues that because the 503 patent is simply a

combination of old elements, the trial court had an obliga-

tion to determine whether this combination acted to pro-

duce a synergistic or unexpected effect. Clark’s allegation

of error is based upon two premises, viz that a synergism

analysis was required and that the District Court failed

to meet this requirement. Because we find that the Dis-

trict Court did in fact give adequate consideration to the

effect of the combination of elements in the 503 patent,

we need not address the question of whether or not a syn-

ergism analysis was mandatory on the facts here. In pass-

ing, we do note, however, major differences between the

basicness and simplicity of the old elements combined in

the cases cited as controlling by Clark and the more com-

plex elements of the 503 patent.” Moreover, it appears

that hindsight [S. 20] alone persuaded Clark of the ne-

cessity for a synergism analysis, for Clark first made men-

tion of this issue only in a post-trial reply brief, after failing

to raise any synergism claim at or before trial.

*Sakraida v. Ag Pro, Inc., 425 U.S. 273 (1976), involved an invention

for the cleaning of barns by means of flushing water down an

inclined surface. In Anderson’s-Black Rock, Inc. v. Pavement Salvage

Co., Inc., 396 U.S. 57 (1969), the invention consisted of hanging a

radiant burner on the side of a paving machine. The invention in-

volved in Great Atlantic & Pacific Tea Co. v. Supermarket Equip-

ment Corp., 340 U.S. 147 (1950), was nothing more than a U-shaped

frame capable of sliding items along a counter top.

A-76

The District Court’s memorandum opinion does not

contain an explicit analysis of synergism. In light of

Clark’s failure to raise a synergism argument prior to or

during trial, we find this lack of explicit reference by the

District Court unsurprising. In the patent law context,

“synergism” has no talismanic power; synergism is merely

one indication of nonobviousness. What is required, when

a synergism analysis is appropriate, is simply a determina-

tion that the combination of elements in a patent produces

“an effect greater than the sum of the several effects taken

separately.” Anderson’s-Black Rock, Inc., v. Pavement

Salvage Co., 396 U.S. 57, 61 (1969). A careful reading

of the District Court’s opinion reveals that determinations

of the novelty and unexpectedness of the combinative ef-

fect of the elements of the 503 patent underlie the District

Court’s entire analysis of obviousness under §103. Form

would triumph over substance were we to hold this analy-

sis inadequate for lack of specific reference to synergism,

particularly in view of Clark’s failure to place the issue of

synergistic effect into issue prior to or during trial.

(6) obviousness of the 503 patent

Nonobviousness is one condition of patent validity; the

subject matter sought to be patented must not be obvious

to a person having ordinary skill in the pertinent art. 35

U.S.C. §103. While the question of obviousness vel non is,

like the ultimate question of patent validity, a matter of

law rather than fact, Flour City Architectural Metals v.

Alpana [S.21] Aluminum Products, Inc., 454 F. 2d 98,

106 (8th Cir. 1972), the obviousness condition imposed by

§103 is one which “lends itself to several basic factual in-

quiries.” Graham v. John Deere Co., supra at 17. The basic

}

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factual inquiries required under §103 include a determina-

tion of the scope and content of the prior art, an ascertain-

ment of the differences between the prior art and the claims

at issue and a resolution of the level of ordinary skill in

the pertinent art. Graham v. John Deere Co., supra at 17.

The District Court made the factual findings required by

Graham v. John Deere Co., and nothing Clark has urged

on appeal convinces us that these findings are incorrect

or lack support in the record.

The court held that the 503 patent met the nonobvious-

ness requirement of §103. Clark raises two primary chal-

lenges to this conclusion of nonobviousness: first, that the

503 patent constitutes only an obvious improvement over

the Velo loader combined with the Schreck and Hellwarth

patents and, secondly, that the 503 patent constitutes only

an obvious improvement over the White patent combined

with the Schreck and Hellwarth patents. We conclude that

the District Court was correct in its determination of the

relevant prior art and in its rejection of Clark’s contentions

that the 503 patent was obvious in light of the original

Velt loader taken in combination with the Loyd, Schreck,

Hellwarth and White patents.

Assuming arguendo that the Velo loader was prior art,

the District Court found that it did not contain the claims

unique to the 503 patent and that it was no better prior

art than the Loyd patent cited and relied upon by the

Patent Examiner. The court also found that the White pa-

tent was more relevant as prior art to the belt-driven

Velo loader [S.22] than to the 503 patent and that the

most pertinent prior art consisted of the Schreck and Hell-

worth patents, which were cited, considered and rejected

by the Patent Office. On this basis, the court concluded that

A-78

Clark had failed to prove by substantial evidence how the

prior art could be combined to meet the claimed structure

of the 503 patent without hindsight.’ We have previously

rejected Clark’s piecemeal attacks made on the basis of

the trial court’s obviousness determination. A careful re-

view of the record convinces us that the District Court’s

conclusion that the 503 patent constitutes more than a

merely obvious improvement over the relevant prior art is

entirely correct. |

(7) candor to the Patent Office

Clark contends that the Kellers’ failure to disclose the

Velo loader as prior art to the Patent Office constituted a

lack of candor that necessitates invalidation of the 503

patent. A patent applicant has an uncompromising duty

toward the Patent Office to disclose all pertinent facts.

However, a party seeking to establish fraud on the Patent

Office because of a failure of full disclosure bears a heavy

burden of persuasion: fraud on the Patent Office must be

proved by clear, convincing and substantial evidence. Nor-

ton v. Curtiss, 433 F. 2d 779, 797 (C.C.P.A. 1970).

The trial court rejected Clark’s contention that the

[S. 23] Kellers’ nondisclosure of the Velo loader to the Pa-

tent Office constituted a breach of the duty of full disclo-

sure. The court held that because there is no duty on a pa-

tent applicant to disclose prior use where there is a bona

fide basis for believing the use was experimental, the Kel-

lers had no duty to disclose the experimental Velo loader.

114 patent which has survived the scrutiny of the Patent Office is pre-

sumed to be valid. and one attacking validity on the basis of obvious-

ness carries the burden of proof on this issue. Woodstream Corp. v.

Herter’s, Inc., 446 F.2d 1143, 1149 (8th Cir. 1971).

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Moreover, even assuming the Velo loader to be prior art,

the court had previously found that it was nonanticipatory.

Thus, the Velo loader was of such a nature that even if it

had been disclosed to the Patent Office, it would not have

had an impact on the issuance of the patent. Tate En-

gineering, Inc. v. United States, 477 F. 2d 1336, 1345

(Ct. Cl. 1973). Accordingly, nondisclosure of the Velo

loader did not constitute a breach of the duty of disclo-

sure.

We have previously expressed our agreement with the

trial court’s findings that the Velo loader was experimental

or, if considered prior art, was nonanticipatory of the 503

patent. These findings support the conclusion that the

Kellers breached no duty of disclosure to the Patent Of-

fice. At trial, Clark failed to prove a breach of the duty of

uncompromising disclosure to the Patent Office; on ap-

peal, Clark has failed to demonstrate that the trial court

erred in rejecting its unproved allegation of fraud.

117 patent

In May 1959, the Kellers and Melroe Manufacturing

Company (Melroe) entered into an agreement whereby

Melroe acquired an exclusive license under the 503 pa-

tent. In 1959 and 1960, Melroe manufactured and sold

several loader models, the M-60, M-200 and M-400, all

of which were equipped with the transmission drive system

covered by the 503 patent.” These loaders [S. 24] did not

prove to be especially profitable, and Melroe contemplated

loader had been modified by the addition of a rear axle and two

drive wheels, thus producing a four-wheel power driven skid

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leaving the loader market. Louis Keller insisted that Mel-

roe try to experiment with new loaders and, due at least

partially to his insistence, Melroe decided to experiment

rather than abandon the loader field. During the course of

this experimentation in 1961, four prototypical preproduc-

tion loaders, designated M-440’s, were built and the ma-

chine incorporating the elements of the 117 patent was

developed. Because the 18 claims of the 117 patent, en-

titled “tractor vehicle and drive therefor”, were reduced to

practice during the development of the four M-440 proto-

types, the individual histories of these machines bear con-

sideration. Application for the 117 patent was filed on

October 23, 1962, thus making October 23, 1961, the

critical statutory bar date. A mechanical patent of 17

years’ duration was granted to Louis Keller and Clifford

Melroe on January 15, 1966.

The first preproduction machine, known as the Clyde

Olson loader, was finished no later than the end of Febru-

ary 1961. Although it differed somewhat from earlier

models, it was equipped with slide cam type clutch actu-

ators identical to those employed in its predecessors. The

Clyde Olson loader, which contained few, if any, elements

of the 18 claims of the 117 patent, was never put into

production.

Between the date of completion of the Clyde Olson _[S.

25] machine and May 1961, a second prototype was con-

structed. This loader, known as the Gravel Pit loader, was

tested extensively by Louis Keller and employees of Melroe

in a gravel pit near Gwinner, North Dakota, as well as at

the home of Cyril Keller in Rothsay, Minnesota. The Grav-

el Pit loader differed from the Clyde Olson machine in sev-

eral major aspects, but not in clutch design. It contained

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cam type clutch actuators and did not embody all of the

elements of the 117 patent.

A third prototype was completed sometime after July

4, 1961, and probably before August 1, 1961. This proto-

type contained improvements on some of the weaknesses

revealed during the gravel pit testing of the third proto-

type. This testing had made it clear to Louis Keller that

there were serious limitations to the tapered clutch design.

In particular, the slide cam actuators tended to stick, which

would cause the machine to cant or jerk unexpectedly, in

a manner dangerous to the operator. Furthermore, the

clutches would oil can” and the side plates bow, causing

the clutches to slip. Nevertheless, the third prototype re-

tained the cam type clutch actuators characteristic of its

predecessors and, thus, did not reduce to practice the es-

sential elements of the 18 claims of the 117 patent.

Louis Keller and Clifford Melroe subsequently conceived

of and developed a threaded rotary actuator clutch, de-

signed to avoid the aforesaid problems experienced

with the slide [S. 25] cam type clutch. This threaded

rotary actuator clutch was placed into the fourth prototype,

a white loader with flat clutch plates known as the Cy Kel-

ler demo. Because of the flat clutch plates, there was diffi-

culty in obtaining good clutch power transmission. The

clutches tended to slip and could not be solidly engaged.

Bench tests revealed that these problems were caused by

the oil canning of the flat clutch plates. A new dome-

shaped clutch plate was subsequently designed to avoid

the oil canning problem. To provide for lubrication of the

130i] ing occurs when ied to a clutch

the center of the bottom of a round oil can.

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clutch linings, the design was also changed to provide oil

pickup slots on the input clutch, intended to pick up oil

thrown about inside the gear case by the chains.

After a period of testing, the decision was made to pro-

duce a new loader line, which was given the same M-440

designation that had been used for its prototypes. The

M-440, which was to be white, a color considered appeal-

ing to the fertilizer industry, was equipped with a threaded

rotary actuator clutch design. Production on the M-440,

for which the trade name “Bobcat” was adopted, began

in December 1961. The fourth prototype was built to

check out the final production tooling for the M-440. It

was the first machine to incorporate all of the elements

of the threaded clutch actuator eventually put into the

M-440. It also represented the first embodiment of all of

the elements of the 18 claims of the 117 patent and, ac-

cordingly, the date of its construction is crucial. Unfortu-

nately, the large amount of evidence submitted to date the

construction of the fourth prototype is contradictory. After

car

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