Petition — Continental Plastics of Oklahoma, Inc. v. Plastic Container Corp.

a f

JLY—49 (979 i

OcTOBER TERM, 1979 | ~<a

No. 19-78 0

CONTINENTAL PLASTICS OF OKLAHOMA, INC.,

Petitioner,

VERSUS

PLASTIC CONTAINER CORPORATION,

Respondent.

PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS

FOR THE TENTH CIRCUIT

William Reeves Laney

134 Robert S. Kerr Avenue

1401 Midland Center

Oklahoma City, Oklahoma 73102

(405) 232-5586 ee

Attorney for Petitioner

of Counsel:

Lucian Wayne Beavers

LANEY, DOUGHERTY, HESSIN & BEAVERS

134 Robert S. Kerr Avenue

1401 Midland Center

Oklahoma City, Oklahoma 73102

(405) 232-5586

November, 1979

tied

UTTERBACK TYPESETTING CO.— PHONE 235-0030 — 3740 S. HOLLIDAY AVE.— OKLA. CITY, OKLA. 73115

QUESTIONS PRESENTED ._

STATUTES INVOLVED ~__..---

SUBJECT INDEX

Co

POP ss CRE kt RT

STATEMENT OF THE CASE ~ eearanieae

REASONS FOR GRANTING THE WRIT

(1) The Court of Appeals Refusal to Hold That

Respondent Is Collaterally Estopped From As-

serting the Validity of the Claims of the Hall

Reissue Patent Is In Conflict With the Princi-

ples Laid Down By This Court in Blonder-

Tongue and Is In Conflict With Decisions of

a on or Ae

(2) The Court of Appeals Refusal to Consider

Factual Admissions in Respondent’s Briefs As

Binding On Respondent Is In Direct Conffict

With Prior Decisions of This Court and Other

Courts of Appeal Interpreting F.R.C.P. 56(c)_

(3) The Addition te An Invalid Apparatus Pat-

ent Claim, of a Functional Statement Reciting

Only An Inherent Manner of Operation of the

Claimed Structure Cannot Change the Scope

of the Claim So As to Make the Claim Valid.

tn -

CERTIFICATE OF SERVICE follows Petition.

10

12

15

APPENDIX

S eteeianentiieieetemeel

PAGE

Opinion of the United States Court of Appeals for the

Tenth Circuit, dated August 8, 1979

Order Denying Petition for Rehearing, dated Septem-

lingerie ce eee A-38

Order Staying Mandate, dated October 11, 1979

Order Vacating Stay of Mandate, dated October 26,

“sgn tk SSIS RE el OTE EME er Rea A-42

Order Granting Motion for Summary Judgment and

Judgment of the United States District Court for

the Western District of Oklahoma, dated August 5,

1977 ._ A-43

Judgment Order of United States District Court for

the Western District of Oklahoma in Civil Action

72-825, dated December 13, 1973 ene

Opinion of the United States Court of Appeals for

the Tenth Circuit in the Appeal of Civil Action 72-

825, dated October 30, 1974 A-46

ile

TABLE OF AUTHORITIES

Cases PAGE

-Blonder-Tongue Laboratories, Inc. v. University of

Illinois Foundation, 402 U.S. 313 (1971) —— 2,6, 7,8, 9, 14

Bourns, Inc. v. Allen-Bradley Co., 480 F.2d 123 (7th

ee: TN cleans ccseacntn caaeatene coneaiearaaicanpiarmeion 9

Bourns, Inc. v. United States, 537 F.2d 486 (U.S. Ct.

ei IE. crunsckctecnieitesomeguebadcennersnten hades ; a 9

In re Pearson, 494 F.2d 1399 (C.C.P.A. 1974) 10, 12

In re Swinehart, 439 F.2d 210 (C.C.P.A. 1971) _....._ 12

Mourning v. Family Publications Service, Inc., 411

Us. oe (te SR ARP ag SPD OIE TEAR 10

Technograph Printed Circuits, Ltd. v. Martin-Marietta

Corp., 474 F.2d 706 (4th Cir. 1973) —___ 9

Technograph Printed Circuits, Ltd. v. Methode Elec-

tronics, Inc., 484 F.2d 905 (7th Cir. 1973) 9

United States v. Dooley, 424 F.2d 1067 (5th Cir. 1970) 10

Westwood Chemical, Inc. v. Molded Fiber Glass Body

Co., 498 F.2d 1115 (6th Cir. 1974) - ie 9

Westwood Chemical, Inc. v. United States, 525 F.2d

Re RR. TE | oe cctencceeeesencnceeaewieke 9

Codes and Statutes

ee oe a, eee neenal 2

28 U.S.C. §1338 (a) mae 4

ahem adapters 3,4

Rules

Federal Rule of Civil Procedure 36 10, 14

Federal Rule of Civil Procedure 56(c) —__.. Zz, 3,6, 10,11, 14

Miscellaneous

6 Moore’s Federal Practice, pp. (56-286) - (56-287)

(1976) 11

Wright & Miller, 10 Federal Practice & Procedure,

82723, p. 490 (1973) —... pcs anacstankse 11

In the

Supreme Court of the United States

OcTOBER TERM, 1979

No.

CONTINENTAL PLASTICS OF OKLAHOMA, INC.,

Petitioner,

VERSUS

PLASTIC CONTAINER CORPORATION,

Respondent.

PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS

FOR THE TENTH CIRCUIT

The petitioner Continental Plastics of Oklahoma, Inc.

respectfully prays that a Writ of Certiorari issue to review

the opinion and judgment of the United States Court of

Appeals for the Tenth Circuit entered in this action on

August 8, 1979.

OPINIONS BELOW

The opinion of the Court of Appeals for the Tenth

Circuit, not yet reported, is set forth in the Appendix

(A-1). Judgment in the district court was rendered by the

court issuing an Order granting the petitioner’s motion for

summary judgment. This Order is also set forth in the

Appendix (A-43).

oe

JURISDICTION

The judgment of the Court of Appeals for the Tenth

Circuit was made and entered on August 8, 1979, reversing

the judgment of the district court in part and remanding

certein issues to the district court for further proceedings

therein. Petitioner timely filed a Petition for Rehearing

which was denied on September 25, 1979 (A-38). Subse-

quent to this denial, petitioner timely filed a Motion for

Stay of Mandate which was granted on October 11, 1979

(A-41), and later vacated on October 26, 1979 (A-42). The

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

§1254(1).

QUESTIONS PRESENTED

(1) Does the doctrine of collateral estoppel in patent

cases as set forth by this Court in Blonder-Tongue Labora-

tories, Inc. v. University of Illinois Foundation, 402 U.S.

313 (1971), estop a patent owner from asserting the va-

lidity, in a second suit, of non-adjudicated patent claims

which are identical in scope to claims previously adjudi-

cated invalid?

(2) Is an uncontradicted factual admission in a brief

of counsel an “admission on file’ which must be considered

under Federal Rule of Civil Procedure 56(c) in the deter-

mination of a motion for summary judgment?

(3) Can the addition, to an invalid apparatus patent

claim, of a functional statement admittedly reciting only

an inherent manner of operation of the claimed structure

change the scope of the claim so as to make the claim

valid?

ails

STATUTES INVOLVED

35 U.S.C. §251 provides:

“8951. Reissue of defective patents .

Whenever any patent is, through error without any

deceptive intention, deemed wholly or partly inoper-

ative or invalid, by reason of a defective specification

or drawing, or by reason of the patentee claiming more

or less than he had a right to claim in the patent, the

Commissioner shall, on the surrender of such patent

and the payment of the fee required by law, reissue

the patent for the invention disclosed in the original

patent, and in accordance with a new and amended

application, for the unexpired part of the term of the

original patent, No new matter shall be introduced into

the application\for reissue.

The Commissioner may issue several reissued pat-

ents for distinct and separate parts of the thing paten-

ted, upon demand \of the applicant, and upon payment

of the required fee\for a reissue for each of such re-

issued patents.

The provisions of this title relating to applications

for patent shall be applicable to applications for re-

issue of a patent, except that application for reissue

may be made and sworn to by the assignee of the en-

tire interest if the application does not seek to enlarge

the scope of the claims of the original patent.

No reissued patent shall be granted enlarging the

scope of the claims of the original patent unless ap-

plied for within two years from the grant of the origi-

nal patent.”

Federal Rule of Civil Procedure 56(c), regarding sum-

mary judgment, provides:

“(c) Motion and Proceedings Thereon. The motion

shall be served at least 10 days before the time fixed

eilbsin

for hearing. The adverse party prior to the day of hear-

ing may serve opposing affidavits. The judgment sought

shall be rendered forthwith if the pleadings, deposi-

tions, answers to interrogatories, and admissions on

file, together with the affidavits, if any, show that there

is no genuine issue as to any material fact and that

the moving party is entitled to a judgment as a matter

of law. A summary judgment, interlocutory in charac-

ter, may be rendered on the issue of liability alone

although there is a genuine issue as to the amount of

damages.”’

STATEMENT OF THE CASE

In 1972 respondent sued petitioner alleging infringe-

ment of U.S. Patent No. 3,473,681 to Hall. In that litigation

the trial court held that all claims of the Hall patent were

invalid on four separate grounds (A-44), and that judg-

ment was affirmed by the Court of Appeals for the Tenth

Circuit (A-46).

Thereafter respondent filed in the Patent and Trade-

mark Office an application to reissue the Hall patent, and

the patent was reissued as U.S. Patent No. Re. 28,861 pur-

suant to the provisions of 35 U.S.C. §251. Respondent then

filed the present action alleging infrigement of the Hall re-

issue patent, the jurisdictional basis for the action being 28

U.S.C. §1338 (a). |

In defense of the infringement action, petitioner moved

for summary judgment on the basis, inter alia, that the

scope of the claims of the Hall reissue patent was identical

to the scope of the claims of the original Hall patent, and

that therefore the issues presented by the Hall reissue

claims were identical to the issues previously adjudicated

wilfin

and that respondent was collaterally estopped from assert-

ing the validity of the claims of the Hall reissue patent.

In respondent’s brief in opposition to petitioner’s mo-

tion for summary judgment respondent stressed the fact

that the claims of the Hall reissue patent did not differ

from the claims of the original Hall patent previously ad-

judicated invalid except by the addition of a functional

statement reciting an inherent and necessary manner of

operation of the structure described in the original invalid

claims. Furthermore, respondent asserted, as does peti-

tioner, that the necessary conclusion of law which must

result from this admitted fact is that the claims are of

identical scope (Record, pp. 108-111). No evidence was be-

fore the trial court, on this fact of inherent manner of

operation, other than the briefs of the parties which con-

curred on this point and the conclusion of law which should

follow therefrom.

The trial court granted petitioner’s motion for sum-

mary judgment without making findings of fact and with-

out opinion (A-43).

In its brief on appeal, respondent repeated its ad-

missions regarding the identical scope of the Hall reissue

claims and the claims previously adjudicated invalid (Re-

spondent’s Brief on Appeal, pp. 13-15). The Court of Ap-

peals, however, refused to consider this admission or those

appearing in the summary judgment brief below to be

binding on the issue of the scope of the claims, and held

that the mere statement of inherent function added by

respondent, via the reissue of the patent, to the appartus

claims previously adjudicated invalid was sufficient to pre-

soon

vent the collateral estoppel doctrine of Blonder-Tongue

from being applicable to the present case.

The Court of Appeals reversed the granting of sum-

mary judgment to petitioner and remanded for. further

proceedings.

REASONS FOR GRANTING THE WRIT

The judgment of the Court of Appeals conflicts with

the principle set forth in Blonder-Tongue Laboratories, Inc.

v. University of Illinois Foundation, 402 U.S. 313 (1971),

that a patent owner is entitled to only one full and fair

opportunity for judicial resolution of the same issue, namely

validity of a patent claim where such resolution results in

a holding of invalidity. The judgment of the Court of Ap-

peals also conflicts in principle with decisions of the Courts

of Appeal for the Fourth, Sixth and Seventh Circuits and

the United States Court of Claims, all of which have inter-

preted Blonder-Tongue as requiring the application of the

doctrine of collateral estoppel espoused therein to bar ad-

judication in a second suit of a patent claim of the same

scope as a claim previously adjudicated invalid.

Furthermore, the decision of the Court of Appeals is

in direct conflict with decisions of this Court, the Court of

Appeals for the Fifth Circuit, and the Court of Customs

and Patent Appeals regarding whether “admissions on file”

under Federal Rule of Civil Procedure 56(c) includes ad-

missions of counsel in oral and written argument.

a

(1) The Court of Appeals Refusal to Hold That Respon-

dent Is Collaterally Estopped From Asserting the

Validity of the Claims of the Hall Reissue Patent Is

In Conflict With the Principles Laid Down By This

Court in Blonder-Tongue and Is In Conflict With

Decisions of Other Courts of Appeal. .

In Blonder-Tiongue this Court held that a patent owner

is entitled to only one full and fair opportunity for judicial

resolution of the issue of validity of a patent claim, where

such resolution results in a holding of invalidity. This Court

did not limit this doctrine to situations where the identical

claim is presented in both suits, but rather it extended the

doctrine to situations where the identical issue is presented

a second time. It follows that a patent claim which differs

in language from a claim previously adjudicated invalid,

in such a way that the scope of the claims is identical,

must fall under the principles set forth in Blonder-Tongue.

If the scope of the claims is identical then the issues pre-

sented are identical. If the first claim is fairly adjudicated

invalid, then the unadjudicated claim must also be invalid.

In the present case it is not contradicted that the trial

on the original Hall patent accorded respondent the full and

fair opportunity to litigate required by Blonder-Tongue,

and the respondent has admitted that the claims of its re-

issue patent differ from the previously adjudicated invalid

claims only by the addition of a functional statement which

merely recites an inherent manner of operation of the

claimed structure. Respondent has further asserted, as does

petitioner, that the necessary legal conclusion which must

follow from this fact is that the claims are of identical

scope.

a ee

In the face of these admissions, the Court of Appeals

has held that collateral estoppel does not apply in the

present case (A-21). Although the Court of Appeals has

acknowledged in form that Blonder-Tongue extends to non-

adjudicated claims, it has in substance emasculated Blonder-

Tongue in the Tenth Circuit with regard to its application

to non-adjudicated claims. If the Court of Appeals is not

going to apply collateral estoppel in a case where the claims

are admitted to be of identical scope, then where will it

possibly apply that doctrine?

In its decision on petitioner’s Petition for Rehearing

(A-38), the Court of Appeals justifies its action on the

basis that it is only reversing a grant of summary judg-

ment (A-39). It is submitted, however, that the application

of the collateral estoppel doctrine of Blonder-Tongue pre-

sents a situation where summary judgment is not only

proper, but indeed where summary judgment is the only

effective way to realize the economies and conservation of

judicial time which this Court intended to bestow on courts

and litigants alike when it handed down its landmark de-

cision in Blonder-Tongue.

The importance of the Court of Appeals’ decision to

patent litigants in the Tenth Circuit cannot be underesti-

mated. There are many situations where a patent owner

owns more than one claim, in a single or in several patents,

with such claims being of slightly different wording, but

of identical scope. If the decision of the Court of Appeals

is allowed to stand, it may well become standard practice

to obtain near duplicates of all claims, for any skilled pat-

ent solicitor can certainly achieve this result in almost any

given case. The situation which will result is that in the

par ee

Tenth Circuit we will have returned to the pre-Blonder-

Tongue days where the patentee may repeatedly litigate so

long as he has new defendants. Indeed, as the present case

shows, he may even continue the attack against the same

defendant in repeated suits so long as he can modify the

wording of the claims to emphasize some necessary and in-

herent functional attribute of a structure already adjudi-

cated as devoid of patentable novelty.

For these very reasons the Courts of Appeal for the

Fourth and Sixth Circuits and the United States Court of

Claims have each unequivocally held that the collateral

estoppel doctrine of Blonder-Tongue is applicable to un-

adjudicated claims which are identical in scope to previ-

ously adjudicated invalid claims. Technograph Printed Cir-

cuits, Ltd. v. Martin-Marietta Corp., 474 F.2d 798 (4th Cir.

1973); Westwood Chemical, Inc. v. Molded Fiber Glass Body

Co., 498 F.2d 1115 (6th Cir. 1974); Bourns, Inc. v. United

States, 537 F.2d 486 (U.S.Ct.Cl. 1976); Westwood Chemical,

Inc. v. United States, 525 F.2d 1367 (U.S.Ct.Cl. 1975).

The Seventh Circuit now appears to also be in line

with the Fourth and Sixth Circuits and the United States

Court of Claims, Technograph Printed Circuits, Ltd. v.

Methode Electronics, Inc., 484 F.2d 905 (7th Cir. 1973),

although an earlier decision initially appeared to place the

Seventh Circuit in a position more similar to that taken

in the present case by the Tenth Circuit, Bourns, Inc. v.

Allen-Bradley Co., 480 F.2d 123 (7th Cir. 1973).

In the absence of review by this Court, and a reversal

of the decision of the Court of Appeals, the Tenth Circuit

will become the choice of forum shoppers from far and

—10—

wide looking for a hospitable place in which to bring a

second action on claims no different in substance and scope

from previously adjudicated invalid claims.

(2) The Court of Appeals Refusal to Consider Factual ©

Admissions in Respondent’s Briefs as Binding on

Respondent Is In Direct Conflict With Prior De-

cisions of this Court and Other Courts of Appeal

Interpreting F.R.C.P. 56(c).

Federal Rule of Civil Procedure 56(c) provides that

one of the categories of evidentiary materials which is to

be considered on a motion for summary judgment is “ad-

missions on file.”

The term “admissions on file” is not limited to formal

admissions under Federal Rule of Civil Procedure 36, but

includes admissions made in briefs and oral argument of

counsel, and both this Court and the Court of Appeals for

the Fifth Circuit have so interpreted Rule 56(c), Mourn-

ing v. Family Publications Service, Inc., 411 U.S. 356, 362

n. 16 (1973) (Summary judgment was based upon admis-

sions contained in letters which the defendant admitted

sending to plaintiff, and defendant’s counsel’s statements

that there was no factual question remaining unresolved.) ;

United States v. Dooley, 424 F.2d 1067 (5th Cir. 1970)

(Summary judgment based upon counsel’s admission in

oral argument). Similar admissions have been considered

binding by the Court of Customs and Patent Appeals, al-

though not specifically in a summary judgment context due

to the different nature of the proceedings before that court,

In re Pearson, 494 F.2d 1399, 1402 (C.C.P.A. 1974) (State-

ment of counsel in brief).

a |

Furthermore, the two leading authorities on federal

procedure have taken the position that admissions of coun-

sel in oral or written argument are “admissions on file”

under Federal Rule of Civil Procedure 56(c). 6 Moore’s

Federal Practice, pp. (56-286) - (56-287) (1976) (“While ad-

missions should be ‘on file,’ they may be established in any

appropriate manner: .. . from statements of counsel made

in oral or written argument... .”); Wright & Miller, 10

Federal Practice & Procedure §2723, p. 490 (1973) (“How-

ever, admissions in the brief of the party opposing the

motion may be used in determining that there is no gen-

uine issue as to any material fact, since they are function-

ally equivalent to ‘admissions on file,’ which are expressly

mentioned in Rule 56(c) ... .”).

In the face of these authorities the Court of Appeals

has refused to consider admissions made by respondent’s

counsel in its briefs to both the trial court and the Court

of Appeals, even though respondent submitted no evidence

in the trial court to contravert those admissions. Indeed,

respondent submitted no evidence at all in response to pe-

titioner’s motion for summary judgment. In its Order on

petitioner’s Petition for Rehearing, the Court of Appeals

held that, “Briefs are not a part of the record, and in

those cases in which the statements in a brief were con-

sidered as admissions, it appears that the court did so as

a matter of discretion” (A-39).

It is submitted that consideration of such “admissions

on file” is not discretionary, but rather is mandated by

Federal Rule of Civil Procedure 56(c), and that the de-

cision of the Court of Appeals is in direct conflict with the

above noted prior decisions of this Court, the Fifth Circuit,

and the Court of Customs and Patent Appeals.

wcities

(3) The Addition, to an Invalid Apparatus Patent Claim,

of a Functional Statement Reciting Only an Inher-

ent Manner of Operation of the Claimed Structure

Cannot Change the Scope of the Claim so as to Make

the Claim Valid.

Although in certain circumstances an apparatus patent

claim may properly include functional language, which but-

tresses its patentability, the law is settled that the mere

recitation of an inherent and necessary function of an old

structure cannot make a claim to that old structure patent-

able. Such expressions of a necessary and clearly implied

function or characteristic add nothing to the scope of the

claim. In re Pearson, 494 F.2d 1399, 1403 (C.C.P.A. 1974)

(“These terms merely set forth the intended use for, or

a property inherent in, an otherwise old composition. As

the board pointed out, such terms do not differentiate the

claimed composition from those known to the prior art.”’);

In re Swinehart, 439 F.2d 210, 212-13 (C.C.P.A. 1971) (“[I]t

is elementary that the mere recitation of a newly discov-

ered function or property, inherently possessed by things

in the prior art, does not cause a claim drawn to those

things to distinguish over the prior art.”).

In respondent’s brief in opposition to petitioner’s mo-

tion for summary judgment (Record, pp. 108-111), and in

respondent’s brief on appeal to the Court of Appeals, re-

spondent has unequivocally stressed and admitted that the

function specified in Hall Reissue claims 5 and 8 (the only

two claims in the Hall reissue patent) is nothing more

than an inherent manner of operation of the structure pres-

ent in invalid original Hall patent claim 5. To quote from

respondent’s own brief to the Court of Appeals at pages

13-15:

oo

“Reissue Claim 5 of the Hall patent in suit differs

from original claim 5 solely by the addition of a so-

called —whereby— clause ... [T]he patent owner

returned to the United States Patent Office and pre-

sented in its Reissue application the same Claim 5 held

invalid by both the district court and this Court, with

the addition to it of a so-called —whereby— clause that

set forth the dual function. The patent owner also sub-

mitted a new claim, being Claim 8, with its Reissue

application. Claim 8 is of substantially the same scope

as claim 5.

* * * *

“.. . Here, as in General Plastics, the scope of a

reissue claim (reissue claim 5) is identical or substan-

tially identical to the scope of an original claim (origi-

nal claim 5). The only difference is the addition of

a —whereby— clause. The following language, taken

from the General Plastics decision is completely ap-

propriate for and applicable to the present situation.

There the Court stated:

‘When plaintiff added the description to the end

of claim 1 of the reissue, he was merely stating

what was already there by implication. Therefore,

claim 1 of the reissue is identical to the claim of

the Drogin patent. And if defendant has infringed

the claim of the latter, he has infringed claim 1 of

the reissue.’”’ (emphasis added)

It is submitted that the above passage from respon-

dent’s brief is an unequivocal admission by respondent of

the fact that the function called for in Hall Reissue claims

5 and 8 is merely an inherent manner of operation of the

structure present in invalid original Hall Patent claim 5.

It is noted that respondent’s counsel has even gone beyond

that admission of fact and has asserted, as does petitioner,

=

that the necessary conclusion of law which must result

from that fact is that the claims are of identical scope.

As discussed above, the factual admission made by re-

spondent’s counsel in its briefs that the function called for

in Hall Reissue claims 5 and 8 is merely an inherent man-

ner of operation of the structure present in invalid original

Hall Patent claim 5 is an “admission on file”, as that term

is used in Federal Rule of Civil Procedure 56(c), and is

properly considered on a motion for summary judgment.

That admission is as equally binding upon respondent as if

it had been made in response to a request for admission

under Federal Rule of Civil Procedure 36.

The legal conclusion which must necessarily follow

from this admitted fact is that the claims are of identical

scope. The necessary consequence of the claims being of

identical scope is that respondent must be collaterally estop-

ped from asserting the validity of those claims under the

principles set forth by this Court in Blonder-Tongue.

a

CONCLUSION

For the foregoing reasons, the petition for Writ of Cer-

tiorari should be granted.

Respectfully submitted,

William Reeves Laney

134 Robert S. Kerr Avenue

1401 Midland Center

Oklahoma City, Oklahoma 73102

(405) 232-5586

Attorney for Petitioner

of Counsel:

Lucian Wayne Beavers

LANEY, DOUGHERTY, HESSIN & BEAVERS

134 Robert S. Kerr Avenue

1401 Midland Center

Oklahoma City, Oklahoma 73102

(405) 232-5586

November, 1979

CERTIFICATE OF SERVICE

This is to certify that three copies of the foregoing

Petition for Writ of Certiorari were mailed with first class

postage prepaid to each of the attorneys for respondent,

namely, Thomas J. Greer, Jr., 707 23rd Street South, Ar-

lington, Virgina 22202; James A. Peabody, 1700 Liberty

Tower, 100 Broadway, Oklahoma City, Oklahoma 73102;

and Walter D. Ames, 1909 fad N.W., Washington,

D.C. 20006, this “C. day of Zier _, 1979.

William Reeves Laney

APPENDIX

UNITED STATES COURT OF APPEALS

TENTH CIRCUIT

{Filing Stamp omitted in printing}

No. 77-1753

PLASTIC CONTAINER

CORPORATION,

Plaintiff-Appellant,

Appeal from the

United States

District Court

for the

Western District

of Oklahoma

(D.C. No.

76-1011-C)

V.

CONTINENTAL PLASTICS

OF OKLAHOMA, INC.,

Defendant-Appellee.

Walter D. Ames, Watson, Cole, Grindle & Watson, Wash-

ington, D.C. (Thomas J. Greer, Jr., Diller, Brown, Ramik

& White, Arlington, Virginia, and James A. Peabody, Okla-

homa City, Oklahoma, on the brief) for Appellant.

William R. Laney, Laney, Dougherty & Hessin, Oklahoma

City, Oklahoma, for Appellee.

Before BARRETT and LOGAN, Circuit Judges, and MIL-

LER,* Judge.

MILLER, Judge.

Plastic Container Corporation (“Plastic”) appeals from

an adverse judgment in its patent infringement suit against

Continental Plastics of Oklahoma, Inc. (“Continental’’). In

an order of August 5, 1977, without opinion, the district

court denied Plastic’s cross-motion for summary judgment,

dismissed its complaint, entered judgment in favor of Con-

tinental, and awarded Continental costs and attorney fees.

We reverse and remand.

* The Honorable Jack R. Miller, Judge of the United States Court of

Customs and Patent Appeals, sitting by designation.

A-2

[APPENDIX]

The Subject Matter of the Patent in Issue

The infringement suit involves Reissue Patent No.

28,861 to Samuel Hall, Jr. (“Hall Reissue”).! The Hall

Reissue, obtained pursuant to 35 U.S.C. § 251,? is based on

Patent No. 3,473,681° (“Hall Patent”), which was held in-

valid in the prior litigation of Plastic Container Corp. v.

Continental Plastics of Oklahoma, Inc., Civil Action No. 72-

825 (W.D. Okla. December 13, 1973), affirmed in an un-

published opinion of this court, No. 74-1123, October 30,

1974. The subject matter of the Hall Reissue is a container

or vial employing a safety plug and a cover which snaps

on and off the container. Such containers are used by

pharmacists in dispensing medicaments, such as capsules

or tablets, as a precaution against access by young chil-

dren. Figure 1 of the Hall Reissue is illustrative of an

embodiment of the claimed invention:

1 The application for reissue, entitled “Safety Medicine Bottle Closure,”

was filed on May 23, 1975, and issued on June 15, 1976. During

prosecution of the Hall Reissue, no changes were made in the speci-

fication. However, claims 1-4 and 6-7 were cancelled; claim 5 was

amended; and new claim 8 was added.

* 35 US.C. § 251 reads in pertinent part:

§ 251. Reissue of defective patents

Whenever any patent is, through error without any deceptive

intention, deemed wholly or partly inoperative or invalid, by rea-

son of a defective specification or drawing, or by reason of the

patentee claiming more or less than he had a = to claim in

the patent, the Commissioner shall, on the surrender of such pat-

ent and the payment of the fee required by law, reissue the patent

for the invention disclosed in the origi tent, and in accord-

ance with a new and amended application, for the unexpired part

of the term of the original patent. No new matter shall be intro-

duced into the application for reissue.

3 This patent issued October 21, 1969, on an application filed Novem-

ber 21, 1968.

[APPENDIX]

In order to remove the safety plug (internal closure 20),

the external closure cap 36 (snap cover) is snapped off

container 10 using abutment key 44, which depends from

the side of the external closure cap. With the cap removed,

the abutment key is used to remove the safety plug by

inserting it into recess 28 of the safety plug and pulling

the plug out. Although such manipulations are relatively

simple for an adult, they are too complex for most young

children. Because the abutment key serves the dual func-

tion of a key and a thumb tab, the same external closure

cap may be used when there is no safety plug, thus pro-

viding the pharmacist with an option to omit the safety

plug for a “non-childproof” container.

Claims 5 and 8, the only two claims that remain in

the Hall Reissue, are illustrative: *

4 The portions of the claims in italics were added to the Hall Patent

during prosecution of the Hall Reissue.

A-4

(APPENDIX)

5. The safety container closure of claim 1° wherein

said external closure cap is provided with a peripheral

skirt, the lowermost part of said skirt carrying said

key, the interior of said skirt carrying an annular bead

which snaps over a complementary bead around an

outer periphery of the container opening, whereby the

key carried by the external cap functions as a tab

against which the thumb is pressed in a generally up-

ward direction to remove the external cap from the

container and functions additionally as a key for co-

operation with the key recess of the internal closure

to thereby permit the internal closure to be removed

from its position within the opening of the container.

8. A safety container closure assembly including,

(a) a container having an opening,

(b) an internal closure in the form of a plug

positioned within said opening, said closure

having a key recess therein,

(c) an outer closure in the form of an external

cap positioned over said opening,

(d) said external cap having a skirt integral

therewith and depending from the top of

5 Claim 1 (which was cancelled as an independent claim during the

reissue prosecution but, nevertheless, remains incorporated into claim

5) reads:

1. A safety container closure assembly including,

(a) a container having an opening,

(b) an internal closure positioned within said opening, said clos-

ure having a key recess therein,

(c) am external cap positioned over said opening,

(d) said external cap carrying a key at a location not coincident

with the location of said key recess,

(e) whereby said cap must be removed to insert the key into the

key recess and thereby remove the internal closure. ©

A-5 a

[LAPPENDIX)

said cap, the interior of said skirt carrying

an annular bead which snaps over a compli-

mentary bead on the outer periphery of con-

tainer opening,

(e) a combination thumb abutment-key integral

with and extending substantially horizon-

tally outwardly from said skirt at the lower

portion of the skirt, said thumb abutment-

key functioning as a tab against which the

thumb is pressed in a generally upwardly

direction to remove the said external cap

from the container and functioning addition-

ally as a key for cooperation with the said

key recess of said internal closure to thereby

permit said internal closure to be removed

from its position within the opening of said

container.

Background

An understanding of the previous litigation involving

the Hall Patent is necessary for consideration of the issues

presented by this appeal involving the Hall Reissue. In its

December 13, 1973, unpublished opinion, the district court

stated the following conclusions of law: (1) Claims 1-4 and

7 are invalid under 35 U.S.C. § 102 because they “define

structures which are devoid of novelty in that they are

clearly anticipated by the prior art.” (2) Claims 1-5 and 7

are invalid under 35 U.S.C. § 103 “as being directed to

structures which lack invention and were ‘obvious’.’’*® (3)

® We note that, since the 1952 codification of the patent laws, patent-

ability depends on nonobviousness under 35 U.S.C. § 103 rather than

on “invention.” An invention that is obvious is an unpatentable in-

vention. Graham Vv. John Deere Co. of Kansas City, 383 US. 1, 14-

15, 148 US.P.Q. 459, 465 (1966); In re Bergy, 596 F.2d 952, 959,

201 US.P.Q. 352, 361-62 (C.C.P.A. 1979); Rich, Laying the Ghost

A-6

[APPENDIX]

Claims 1-77 are invalid under (the second paragraph of)

35 U.S.C. § 1128 because they “fail to particulary point out

and distinctly claim the subject matter which the applicant

regarded as his invention.” The court somewhat amor-

phously stated that the invention is not distinctly claimed

if “the dictionary meanings of the term ‘coincident’ are

not used in construing the claims,” because the specification

fails “to explain or set forth the meaning of that term.”

(4) Claims 1-7 are invalid for being “in contravention of

® (Continued )

of the “Invention” Requirement, 1 Am. Pat. L. A. Q. 26, 40 (1972).

35 USC. § 103 reads:

§ 103. Conditions for patentability; non-obvious subject matter

__ A patent may not be obtained though the invention is not

identically disclosed or described as set forth in 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 obvious at the time the invention was

made to a person having ordinary skill in the art to which said

subject matter pertains. Patentability shall not be negatived by the

manner in which the invention was made.

* Although there are seven claims in the invalidated Hall Patent, Plastic

sued for infringement on only claims 1-5 and 7. Nevertheless, some

of the district court's conclusions of law apply to claim 6, because

Continental, by way of counterclaim, filed a » 0 Aaaaon judgment ac-

tion asking that all of the Hall Patent claims be held invalid.

§ 35 US.C. § 112 provides in pertinent part:

§ 112. Specification

The specification shall contain a written description of the in-

vention, and of the manner and process of making and using it,

in such full, clear, concise, and exact terms as to enable any per-

son skilled in the art to which it ins, or with which it is

most nearly connected, to make and use the same, and shall set

forth the best mode contemplated by the inventor of carrying out

his invention.

The specification shall conclude with one or more claims par-

ticularly pointing out and distinctly claiming the subject matter

which the applicant regards as his invention.

A-7

[APPENDIX]

the provisions of Rule 75(d) (1),” 37 C.F.R. § 1.75(d) (1),®

because all claims contain terms (“at a location not coinci-

dent with the location of the key recess,” “coincident,” and

“recess”) which do not find clear support or antecedent

basis in the description set forth in the specification. (5)

Claims 1-7 are invalid under 35 U.S.C. § 112, first para-

graph, for failure to set forth the best mode of carrying

out the invention (“to provide ribs on the skirt portion of

jthe stopper or internal closure”) as contemplated by the

inventor at the time of filing his application.

On appeal, this court stated in an unpublished opinion

(No. 74-1123, Oct. 30, 1974, at 7):

We hold that the Trial Court did not err in finding

that the entire patent was anticipated by the prior art.

We have considered Plastic’s contention raised in its

reply brief that the “prior art fails to show an element

that functions both as a key which enters a key recess

and as a thumb abutment.” We agree. However, such

an element, i.e., an abutment functioning as a key and

a thumb tab, was never claimed. [Emphasis added. |

The court discussed further testimony at trial and said

(supra at 9):

Applying the prior art of Velt and Mosteller, and the

differences between the prior art and Claim 5, consid-

ered together with the ordinary skill in the pertinent

9 37 CER. § 1.75(d)(1) reads:

The claim or claims must conform to the invention as set

forth. in the remainder of the specification and the terms and

phrases used in the claims must find clear support or antecedent

basis in the description so that the meaning of the terms in the

claims may be ascertainable by reference to thé description. (See

§ 1.58(a).)

Because Rule 75(d) (1) merely implements the description require-

ment of the first paragraph of 35 U.S.C. § 112 (supra note 8), we

consider § 112 to be the statutory basis for this conclusion of law.

A-8

(APPENDIX)

art, we hold that the Trial Court did not err in finding

‘681 [Hall Patent No. 3,473,681] invalid as obvious.

We have carefully considered the remaining allega-

tions of error advanced by Plastic.'° They are with-

out merit.

Thus, it is clear that this court affirmed the district court

in its conclusion that all claims were invalid under 35

U.S.C. § 103. The court particularly pointed out that the

claims failed to recite the limitation on which Plastic re-

lied as evidence of nonobviousness. Moreover, the state-

ment in section III of the opinion indicates that this court

intended to reject all of Plastic’s allegations of error and

to affirm each of the other bases for the district court’s

holding that the claims were invalid.!!

Acting on the above-quoted statement in this court’s

previous opinion, that “an abutment functioning as a key

and a thumb tab, was never obtained” in the Hall Pat-

ent, Plastic returned to the Patent and Trademark Office

(“PTO”) and filed an application for reissue. Following

issuance of the Hall Reissue, Plastic filed this action for

patent infringement against Continental.

‘0 These allegations of error were directed at all of the district court's

conclusions of law.

'l As discussed infra, the disposition of these other bases of invalidity

in the prior appeal is important to this appeal because collateral estop-

pel is one of the major issues. If this court, in its previous decision,

had merely affirmed on the basis of obviousness (35 U.S.C. § 103)

and had not disposed of the other bases of invalidity, there could be

collateral estoppel only on the obviousness issue in any subsequent

litigation. See Martin v. Henley, 452 F.2d 295, 300 (9th Cir. 1971);

International Refugee Organization V. Republic SS. Corp., 189 F.2d

858, 862 (4th Cir. 1951). See ere Restatement a Judgments

§ 68 comment n, § 69 comment b (1942); 1B Moore’s Federal Prac-

tice {| 0.416{2} at 2232 n.10 (1974), and cases cited therein; id. at

7 0.443{5]} at 3920-22.

A-9

[APPENDIX]

District Court Proceedings

In the district court,!2 Continental moved for summary

judgment and requested an award of costs and attorney

fees, arguing: (1) that as a result of the prior litigation

between the same parties, Plastic “is barred from relief as

a result of the application of one or more of the doctrines

of res judicata, collateral estoppel, estoppel by record and/

or law of the case”; (2) that the claims of the Hall Reissue

are invalid because Plastic did not discharge “the heavy

duty of complete good faith, and full and open disclosure

of all pertinent and material facts to the Patent Examiner

during the prosecution of the reissue application”; and (3)

even assuming, arguendo, that the Hall Reissue is infringed,

Continental “is vested with certain statutorily recognized

intervening rights [pursuant to 35 U.S.C. § 2521] which

immunize” Continental. Plastic cross-moved for summary

judgment: (1) on infringement because Continental had

admitted that its device is readable upon both claims 5 and

12 The Honorable Stephen Chandler, before whom the first trial was

conducted.

'$ 35 USC. § 252 reads in pertinent part:

No reissued patent shall abridge or affect the right of any

person or his successor in business who made, purchased or used

prior to the grant of a reissue anything patented by the reissued

patent, to ‘continue the use of, or to sell to others to be used or

sold, the specific thing so made, purchased or used, unless the

making, using or selling of such thing infringes a valid claim

of the reissued patent which was in the original patent. The court

before which such matter is in question may provide for the con-

tinued manufacture, use or sale of the thing made, purchased or

used as specified, or for the manufacture, use or sale of which

substantial preparation was made before the grant of the reissue,

and it may also provide for the continued practice of any process

patented by the reissue, practiced, or for the practice of which

substantial preparation was made, prior to the grant of the reissue,

to the extent and under such terms as the court deems equitable

for the protection of investments made or business commenced

before the grant of the reissue.

A-10

{[APPENDIX)

8 of the Hall Reissue; and (2) on validity because reissue

claims 5 and 8 are “now purged of the defect” noted in

the previous Tenth Circuit opinion.

As related earlier, the district court denied Plastic’s

motion for summary judgment, dismissed its complaint,

ranted Continental’s motion for summary judgment, and

awarded Continental costs and attorney fees.

OPINION

Because the district court did not indicate which of

Continental’s arguments it found persuasive,!4 this court

must consider each argument and, in order for the lower

court’s decision to be reversed, Plastic must prevail on each

issue.

(1) Collateral Estoppel Issue’

Continental argues that Plastic should be collaterally

estopped from asserting Hall Reissue claims 5 and 8 be-

cause “these claims substantively define the same inven-

tion as did the claims involved in the first suit.” It notes

that “the written specifications and the drawings of both

the original and reissue patents are identical” and suggests

' Although Plastic appears to cricicize the district court for failing to

specify the basis of its decision, we note that such failure is not error

in view of Fed. R. Civ. P. 52(a), which states that “{flindings of

fact and conclusions of law are unnecessary on decisions of motions

under Rules 12 and 56,” and in view of the fact that Fed. R. Civ.

P. 56 concerns motions for summary judgment. Nevertheless, in a

case such as this which involves numerous complex legal issues, had

the lower court stated its conclusions of law, no matter how briefly,

time in the consideration of this appeal would have been saved;

moreover, we would have the benefit of the lower court's views.

” The courts have not been consistent in the meanings assigned to the

terms “res judicata” and “collateral estoppel,” as well as “estoppel

by record” and “law of the case,” particularly when applied to patent

litigation. We choose the term “collateral estoppel” as the one most

appropriate under the facts of this case.

A-11

[APPENDIX)

that the two claims issued in the Hall Reissue are identical

to the claims of the Hall Patent “except for slight differ-

ences of wording.” Further, Continental asserts that the

basis for the Supreme Court’s decision in Blonder-Tongue

Laboratories, Inc. v. University of Illinois Foundation, 402

U.S. 313, 169 U.S.P.Q. 513 (1971), was “the policy that

the patentee should only be allowed one opportunity to

litigate any given issue, unless he can show that his first

opportunity was unfair procedurally, substantively or evi-

dentially”; and that the courts have applied this policy in

allowing collateral estoppel as a defense to an infringement

suit based on claims which, themselves, were not previously

adjudicated invalid.

Indeed, the Court in Blonder-Tongue, supra at 332-33,

169 U.S.P.Q. at 521, did speak in terms of “issues” and

“questions,” saying:

Moreover, we do not suggest, without legislative

guidance, that a plea of estoppel by an infringement

or royalty suit defendant must automatically be ac-

cepted once the defendant in support of his plea identi-

fies the issue in suit as the identical question finally

decided against the patentee or one of his privies in

previous litigation. Rather, the patentee-plaintiff must

be permitted to demonstrate, if he can, that he did not

have “a fair opportunity procedurally, substantively

and evidentially to pursue his claim the first time.”

[Emphasis added; footnote omitted. ]

Also, it is true that, because collateral estoppel is grounded

on public policy, particularly as it relates to judicial econ-

omy, some courts have not limited its application to adjudi-

cated claims only. See, e.g., Westwood Chemical, Inc. v.

Molded Fiber Glass Body Co., 498 F.2d 1115, 182 U.S.P.Q.

517 (6th Cir. 1974). The essential element of collateral

estoppel is substantial identity of the issue or issues in each

action. Partmar Corp. v. Paramount Pictures Theatres Corp.,

347 U.S. 89 (1954); Carter-Wallace, Inc. v. United States,

A-12

[APPENDIX]

496 F.2d 535, 182 U.S.P.Q. 172 (Ct. Cl. 1974). Thus, the pub-

lic interest in upholding valid patents, including reissued

patents, outweighs the public interest underlying collateral

estoppel where the issue or issues in each action are not

substantially identical. In re Russell, 58 C.C.P.A. 1081, 439

F.2d 1228, 169 U.S.P.Q. 426 (1971); In re Craig, 56 C.C.P.A.

1438, 411 F.2d 1333, 162 U.S.P.Q. 157 (1969).

Accordingly, we agree with Continental that collateral

estoppel may apply, under certain circumstances, to previ-

ously unadjudicated claims. However, it seeks to apply this

defense too broadly here.'® It is basic patent law doctrine

that claims of a patent define the invention and the “metes

and bounds” of the grant. See Brenner v. Manson, 383 U.S.

519, 534, 148 U.S.P.Q. 689, 695 (1966); Deyerle v. Wright

Manufacturing Co., 496 F.2d 45, 49, 181 U.S.P.Q. 685, 688

(6th Cir. 1974); Citizens Trust Co. v. Lear Jet Corp., 403

F.2d 956, 958, 160 U.S.P.Q. 11, 13 (10th Cir. 1968), cert.

denied, 394 U.S. 950, 161 U.S.P.Q. 832 (1969). Accordingly,

any determination of whether collateral estoppel applies

must be directed to the claimed invention, i.e., the invention

defined by the claims, rather than to a broader invention

that may be disclosed in the application. As the Sixth Cir-

cuit said in Westwood Chemical, Inc. v. Molded Fiber Glass

Body Co., supra at 1117, 182 U.S.P.Q. at 518:

[C]ollateral estoppel is available as a defense when un-

adjudicated claims present questions of fact identical

to the questions presented in the adjudicated claims;

when each unadjudicated claim merely restates, with-

‘6 Continental argues that “a suit on a reissue patent is barred by a

prior judgement between {sic} the same parties holding the original

patent, upon which the reissue is based, to be invalid, if the reissue

patent is for the same invention as the original patent.” However,

this argument is in conflict with the reissue statute (35 U.S.C.

§ 251), which provides that the PTO shall, upon compliance with

other provisions, “reissue the patent for the invention disclosed in

the original patent” when “any patent is. . . deemed wholly or

partly .. . invalid.”

A-13

[APPENDIX]

out significant difference, an adjudicated claim; and

when none of the unadjudicated claims defines an in-

vention separate and apart from the invention defined

in the adjudicated claims. [Emphasis added. ]

Accord, Westwood Chemical, Inc. v. United States, 525 F.2d

1367, 187 U.S.P.Q. 656 (Ct. Cl. 1975); In re Clark, 522 F.2d

623, 628, 187 U.S.P.Q. 209, 213 (C.C.P.A. 1975) (Miller, J.,

concurring); Bourns, Inc. v. United States, 187 U.S.P.Q. 174

(Ct. Cl. Trial Div. 1975), opinion adopted per curiam, 537

F.2d 486, 199 U.S.P.Q. 256 (Ct. Cl. 1976); see Technograph

Printed Circuits, Ltd. v. Methode Electronics, 484 F.2d 905,

908-09, 179 U.S.P.Q. 206, 208-09 (7th Cir. 1973). Moreover,

unlike the above-cited precedents, this appeal involves a

reissue patent which the PTO has reexamined and issued,

presumably after consideration of the prior art on which

the original patent was held invalid.!* Thus, to the reissued

claims, a presumption of validity has attached. 35 U.S.C.

§ 282. Recognizing that this court’s review must take into

account the differences between the claimed inventions of

the Hall Reissue and the Hall Patent, we now consider the

holdings of invalidity in the prior litigation.’*®

17 However, as discussed infra, Continental argues that there was no

consideration by the PTO of the prior decision of invalidity by the

district court.

18 We need not consider the holding of invalidity of Hall Patent claims

1-4 and 7 under 35 U.S.C. § 102, because those claims were cancelled

in the prosecution of the Hall Reissue;.and claim 5, which was nar-

rowed in the reissue prosecution, was not held invalid under that

section.

a

A-14

[APPENDIX]

A. Obviousness under 35 U.S.C. § 103

The Court of Claims in Westwood Chemical, Inc. v.

United States, supra at 1375,!® indicated how, when faced

with a prior holding of invalidity for obviousness, a court

should determine whether the unadjudicated claims are

substantially identical to the adjudicated claims:

In approaching that question, it should be noted that,

while it is convenient to refer to the “issue of patent

validity,” that can be misleading. Where obviousness

is the basis for the prior invalidity holding, an inquiry

into the identity of the validity issue is more properly

phrased in terms of the factual inquiries mandated by.

Graham v. John Deere Co., 383 U.S. 1, 17, 86 S.Ct.

684, 15 L.Ed.2d 545 [148 U.S.P.Q. 459, 466-467] (1966),

as a prerequisite to such a validity determination. Thus,

the inquiry should be whether the nonlitigated claims

present new issues as to the art pertinent to the non-

litigated claims; as to the scope and content of that

art; as to the differences between the prior art and

the nonlitigated claims; and as to the level of ordinary

skill in that art. If none of these inquiries raises any

new triable issues, then the obviousness determination

in the prior proceeding should be equally applicable to

the nonlitigated claims.

... If they are of identical scope, it readily follows

that no new issues bearing on the obviousness deter-

mination are presented. On the other hand, such a

comparison may reveal some differences of a substan-

tive nature. In that event, it will be necessary to go

a step further and determine whether those differ-

ences are of a kind that would have been itemized in a

Graham analysis as a difference between the claim and

19 Trial Judge Cooper's opinion, 186 US.P.Q. 383, 389 (1975), was

adopted per curiam.

A-15

[APPENDIX]

the prior art, or whether it was known in the prior

art and is only a part of the claimed combination as a

whole that provides the context in which the obvious-

ness determination is made. If it is only of the latter

character, i.e., it is known in the prior art and does

not alter the issue as to the differences between the

claimed subject matter and the prior art, it is still nec-

essary to assess the importance of the difference to the

combination as a whole since it is from that standpoint

that the obviousness determination must be made. [Ci-

tations omitted. }

The following limitation in Hall Reissue claim 5 is not

found in Hall Patent claim 5:

whereby the key carried by the external cap functions

as a tab against which the thumb is pressed in a gen-

erally upward direction to remove the external cap

from the container and functions additionally as a key

for cooperation with the key recess of the internal clos-

ure to thereby permit the internal closure to be re-

moved from its position within the opening of the

container.

Claim 8, which was added as a new, independent claim

during the reissue prosecution, contains comparable lan-

guage directed to the dual function of the abutment as a

key and a thumb tab. In the previous case, this court agreed

with Plastic that such a dual function was not shown in

the cited prior art, but held Plastic’s claims invalid for ob-

viousness because of Plastic’s failure to claim this dual

function and to thus distinguish its claims over the prior

art. From the opinion, Plastic could reasonably draw a

suggestion to further limit its claims by incorporating in

them this dual function feature. We are persuaded that

this feature in the unadjudicated Hall Reissue claims is of

such significance as to require a new analysis of these

claims as prescribed by Graham v. John Deere Co., supra.

A-16

(APPENDIX)

Therefore, we conclude that the claimed invention of the

Hall Reissue cannot be considered substantially identical to

the claimed invention of the Hall patent for purposes of

collateral estoppel.

B. Indefiniteness under 35 U.S.C. § 112, 2d paragraph

This section requires that there be claims “particularly

pointing out and distinctly claiming the subject matter

which the applicant regards as his invention.” It is essen-

tially a requirement for “precision and definiteness of claim

language.” In re Conley, 490 F.2d 972, 180 U.S.P.Q. 454

(C.C.P.A. 1974); see Hinde v. Hot Sulphur Springs, Colo-

rado, 482 F.2d 829, 837, 178 U.S.P.Q. 584, 588 (10th Cir.

1973). If the scope of the subject matter embraced by a

claim is clear and if the applicant has not otherwise indi-

cated that he intends the claim to be of a different scope,

the claim satisfies this requirement. In re Borkowski, 57

C.C.P.A. 946, 952, 422 F.2d 904, 909, 164 U.S.P.Q. 642, 645-

46 (1970). In other words, claims must make “clear the

subject matter from which they would preclude others.”

In re Hammack, 57 C.C.P.A. 1225, 1230-31, 427 F.2d 1378,

1382, 166 U.S.P.Q. 204, 208 (1970).?°

As related above, in the earlier district court opinion,

the court concluded that the term “coincident,” as used in

the claims (“said external cap carrying a key at a location

not coincident with the location of said key recess”) is in-

definite.2! However, we conclude that any ambiguity or

2° For purposes of section 112, 2d paragraph, only the claims are ex-

amined; it is improper for a court to the specification and come

to its own conclusion regarding what the applicant regards as his

invention. In re Ehrreich, 590 F.2d 902, 07, 200 USP.Q. 504,

508 (C.C.P.A. 1979); In re Borkowski, supra.

21 The court, noting the dictionary definition of “coincident” as “the

occupation of the same position in space,” found a “manifest tendency

toward ambiguity” in the quoted phrase because, in answer to an

~~,

A-17 |

[APPENDIX)

indefiniteness has been rectified in new claim 5.*2 With the

additional claim language, it is now clear that the abut-

ment key carried on the lowermost part of the skirt of the

external closure cap is located in such a position that it

can function “as a tab against which the thumb is pressed

in a generally upward direction to remove the external cap

from the container.” Such a position is necessarily removed

from the recess or aperture in the safety plug. Thus, the

ambiguity found by the district court has been eliminated.

Moreover, in light of the additional claim language, the

statements of Plastic and its expert witness (see supra note

21) appear consistent.

C. Lack of description under 35 U.S.C. § 112, Ist

paragraph

To satisfy the description requirement of this section

of the statute, an application must contain sufficient dis-

closure, expressly or inherently, to make it clear to one

skilled in the art that the patentee was in possession of the

claimed subject matter at the time of the filing of the ap-

plication. In re Mott, 539 F.2d 1291, 1296-97, 190 U.S.P.Q.

536, 541 (C.C.P.A. 1976); In re Smythe, 480 F.2d 1376, 1382,

178 U.S.P.Q. 279, 284 (C.C.P.A. 1973). For essentially the

same reasons that the language added to Hall Reissue claim

5 is sufficient to rectify any ambiguity or indefiniteness, we

conclude that it enables appellant’s specification to meet

the description requirement of 35 U.S.C. § 112, first para-

21 (Continued )

interrogatory, Plastic stated that this phrase means that “the recess

is at the top of the container assembly, while the key is at the side

of the container assembly”; whereas, at trial, Plastic’s expert testified

that the phrase means that the key is “axially offset from the key

— employing the vertical axis of the container as the reference

ine.

22 There is no problem of indefiniteness with claim 8 since that claim

does not include the term “coincident.”

A-18

(APPENDIX)

graph. We merely add that the additional claim language

demonstrates the correspondence wf the phrase in the claims

(“at a location not coincident with the location of the key

recess”) with statements in the specification (column 1,

jines 42-47): 73

The outer closure is provided with a tab or key, pref-

erably integral therewith and which is inserted into

a complementary aperture in the plug. The key is

slightly rotated and is then pulled thereby dislodging

the plug. . . . Specifically, the key tab is an integral

part of the outer closure to thereby preclude loss of

the key. Further, it not only performs the function

above described, but additionally serves as an abut-

ment against which the thumb of the user may be

placed to effect dislodgment of the closure from the

container.

So, too, with the summary of the subject matter of the ap-

plication in the abstract:

A safety container closure for small plastic medicine

bottles. A plug is inserted into the top or neck, in a

tight friction-fit. The plug carries a key recess, An

outer cap fits over the top of the container, and car-

ries a key molded to it. The key is placed into the

recess, and the plug engaged for withdrawal.

D. Failure to disclose the best mode under 35

U.S.C. § 112

This section requires the application to “set forth the

best mode contemplated by the inventor of carrying out

his invention.” Such a disclosure is calculated to insure

23 It is mot necessary that the language of the claims be described in

haec verba in the specification in order for the description require-

ment to be sailed Ts re Smith, 81 F.2d 910, 178 US.P.Q. 620

(C.C.P.A. 1973). ,

A-19

[APPENDIX]

that the public will receive the benefits intended in ex-

change for the grant to the patentee of limited economic

privileges. Union Carbide Corp. v. Borg-Warner Corp., 550

F.2d 355, 193 U.S.P.Q. 1 (6th Cir. 1977); Ziegler v. Phillips

Petroleum Co., 483 F.2d 858, 177 U.S.P.Q. 481 (5th Cir.),

cert. denied, 414 U.S. 1079, 180 U.S.P.Q. 1 (1973). There

is no requirement that the “best” mode disclosed in fact

be the optimum mode of carrying out the invention. “Even

if there is a better method, his [the patentee’s] failure to

disclose it will not invalidate his patent if he does not know

of it or if he does not appreciate that it is the best method.”

Benger Laboratories, Ltd. v. R.K. Laros Co., 209 F. Supp.

639, 644, 135 U.S.P.Q. 11, 15 (E.D. Pa. 1962), aff'd per

curiam, 317 F.2d 455, 1387 U.S.P.Q. 693 (3d Cir.), cert.

denied, 375 U.S. 833, 139 U.S.P.Q. 566 (1963).

In the previous litigation, the district court concluded

that the best mode of carrying out the invention claimed

in the Hall Patent was not set forth because the “inventor

Hall knew, at the time of filing his patent application which

ultimately matured to the patent here in suit, that it was

of advantage to provide ribs on the skirt portion of the

stopper or internal closure, and that this provided advan-

tage over internal closures carfying no such ribs.” Conti-

nental argues that, because “the specification and drawings

in the reissue application, and in the application which cul-

minated in the issuance of the original Hall patent, are

identical, the documents contain identical deficiencies which

were found fatal by the Trial Court in the initial litigation”;

that, therefore, collateral estoppel based on the prior hold-

ing of invalidity due to failure to set forth the best mode is

proper. The theory of Continental’s argument is that, ab-

sent a change in the specification or drawings of the original

patent during reissue prosecution, a holding that there was

a failure to set forth the best mode cannot be overcome.

However, this simply overlooks that it is the best mode of

carrying out the claimed invention that must be set forth

pursuant to section 112. Dale Electronics, Inc. v. R.C.L.

A-22

[APPENDLX)

... [Plastic’s “misleading presentation” to the PTO]

is, however, much compounded by the additional fact

that Plaintiff did not inform the Patent and Trademark

Office that the original patent had also been held in-

vilid on the grounds of obviousness, failure to disclose

the best mode and indefiniteness. [Emphasis in the

original. ]

It is true, of course, that fraud in the prosecution of

a patent (sometimes referred to as “inequitable conduct”

or “bad faith”) will, if established, result in the patent

being held invalid and/or unenforceable. See Precision In-

strument Manufacturing Co. v. Automotive Maintenance

Machinery Co., 324 U.S. 806, 65 U.S.P.Q. 133 (1945); Ad-

miral Corp. v. Zenith Radio Corp. 296 F.2d 708, 716, 131

U.S.P.Q. 456, 462 (10th Cir. 1961).25 For a defense founded

on fraud to succeed, both materiality and intent must be

established.

In determining materiality, the courts are not in agree-

ment on the test to be applied. Three different tests have

been used. The first is the objective “but for” test, i.e., the

misrepresentation was so material that, but for the misrep-

resentation, the patent not only would not have been issued

but should not have been issued.?® The second is the sub-

jective “but for” test, i.e., the misrepresentation caused the

examiner to approve the application for patent when he

would not otherwise have done so.** Thus, the subjective

25 See also Dunner, Gambrell, & Adelman, 3A Patent Law Perspectives

§§ G.1{1]-G.1[2} (1979); Miller, Fraud on the PTO, 58 J. Pat. Off.

Soc’y 271 (1976); Kayton, Lynch, & Stern, Fraud in Patent Procure-

ment: Genuine and Sham Charges, 43 Geo. Wash. L. Rev. 1 (1974).

26 Swift Chemical Co. v. Usamex Fertilizers, Inc., 197 US.P.Q. 10, 29

(E.D. La. 1977); Corning Glass Works v. Anchor Hocking Glass

Corp., 253 F. Supp. 461, 469, 149 US.P.Q. 99, 106 (D. Del. 1966),

modified, 374 F.2d 473, 153 US.P.Q. 1 (3d Cir.), cert. denied, 389

US. 826, 155 US.P.Q. 767 (1967).

27 American Cyanamid Co. V. FTC, 363 F.2d 757, 150 USP.Q. 135

(6th Cir. 1966); Waterman-Bic Pen Corp. v. W. A. Sheaffer Pen

Co., 267 F. Supp. 849, 856, 153 U.S.P.Q. 499, 504 (D. Del. 1967).

A-23

[APPENDIX)

test does not permit the reviewing court to conclude that,

notwithstanding the misrepresentation, the patent was

properly issued.*® The third test has been labeled the “but

it might have been” test, i.e., the misrepresentation in the

course of the patent prosecution might have influenced the

examiner. *®

Recently, this court in True Temper Corp. v. CF&I

Steel Corp., F.2d _.. Resins U.S.P.Q. _.., Nos. 76-2106,

76-2107 (10th Cir. May 31, 1979) (hereafter “True Tem-

per’) had occasion to consider the defense of fraud in the

prosecution of a patent application and made the following

statement regarding the element of materiality of fraud

(slip op. at 19-20): 3°

28 As the U.S. Court of Customs and Patent Appeals said in Norton v.

Curtiss, 57 C.C.P.A. 1384, 1405, 433 F.2d 779, 795, 167 US.P.Q.

532, 545 (1970):

It is our view that a proper interpretation of the “materiality”

element of fraud in this context must include therein considera-

tion of factors apart from the objective patentability of the claims

at issue, particularly (where possible) the subjective considerations

of the examiner and the applicant. Indications in the record that

the claims at issue would not have been allowed burt for the chal-

lenged misrepresentations must not be overlooked due to any cer-

tainty on the part of the reviewing tribunal that the claimed in-

vention, viewed objectively, should have been patented. If it can

be determined that the claims would not have been allowed but

for the misrepresentation, then the facts were material regardless

of their effect on the objective question of patentability. [Footnote

omitted; emphasis in original.}

29 Monsanto Co. v. Rohm & Haas Co., 456 F.2d 592, 172 US.P.Q. 323,

cert, denied, 407 US. 934, 174 US.P.Q. 129 (1972); Carter-Wallace

Inc. V. Davis-Edwards Pharmacal Corp., 443 F.2d 867, 169 US.P.Q.

625 (2d Cir. 1971); SCM Corp. v. Radio Corp. of America, 318

F. Supp. 433, 449, 167 U.S.P.Q. 196, 207-08 (S.D. N.Y. 1970).

3° The court (slip op. at 14) also concluded that denial of enforce-

ment of patents rests not only on intentional fraud on the PTO, but

also where “misrepresentations {are} made in an atmosphere of gross

negligence as to their truth.”

A-24

(APPENDIX)

True Temper argues that information is material...

only if the examiner would not have issued the patent

“but for” the applicant’s failure to disclose the infor-

mation in quesiion, and that this was not shown here.

We feel, however, that the Fee and Sutch affidavits

were clearly shown to be material to issuance of the

690 patent.'° We note that the trial judge found that

10 The Fee affidavit was submitted in an effort to overcome

the Patent Examiner's initial rejection of True Temper’s claims—

a rejection based largely on his view that the perceptible differ-

ences between the Channeloc anchor and the pre-existing Wil-

liams patent were “of no significance and a variation in design

within the realm of one skilled in the art.” (IV App. 314). Al-

though the patent was not granted immediately on receipt of

that affidavit, the Examiner did state that “a showing that the

{True Temper} anchor is more easily applied than prior art

structures but maintains the prior art’s holding character would

be influential in the determination of patentability” (Id. at 326,

emphasis added).

The Sutch affidavit was thereupon submitted together with re-

marks of counsel making reference to both the Fee and Sutch

affidavits (sd. 329, 343), and the subject patent was issued. I¢

is reasonable to conclude that, had he known that the reported

comparisons were inherently unreliable, the Examiner would have

again denied the patent—at the least requiring True Temper to

conduct more meaningful tests. {Emphasis added.}

“[p]laintiff failed to disclose material facts to the Pat-

ent Office and submitted evidence which was inaccur-

ate, incomplete and misleading.” And the court found

“the failure of plaintiff to disclose relevant informa-

tion to be substantial in nature.” Although the trial

judge here did not phrase his findings in strict terms

of “but-for” causality, see Norton v. Curtiss, supra, 433

F.2d at 795, we feel that the. findings and the record

here adequately support the denial of enforcement of

the patent. See Timely Products Corp. v. Arron, 523

F.2d 288, 297-98 [187 U.S:P.Q. 257, 263-64] (2d Cir.

[1975] ); SCM Corp. v. Radio Corporation of America,

318 F.Supp. 433, 449-50 [167 U.S.P.Q. 196, 207-08] (S.D.

A-25

(APPENDIX)

N.Y. [1970]). The withheld information was material

in that it was relevant and clearly significant to the

consideration of the application by the Patent Office.

See Monsanto Co. v. Rohm & Haas Co., supra, 456 F.2d

at 599-600 [172 U.S.P.Q. at 328-29]. [Emphasis added.]

The foregoing indicates that the True Temper court applied

the subjective “but for” test and clearly did not apply the

objective “but for” test. Although an argument can be

made for the “but it might have been” test, we conclude

that such a test is too speculative and that the more prac-

tical test is whether the examiner would have rejected

the claims had he known all of the facts.?! At the same

time, the subjective “but for” test holds a patent applicant

to the obligation of candor and good faith required because

of the “paramount [public] interest in seeing that patent

monopolies spring from backgrounds free from fraud or

other inequitable conduct.” Precision Instrument Manufac-

turing Co. v. Automotive Maintenance Machinery Co.,

supra at 816, 65 U.S.P.Q. at 138.

On the facts before us, we are not persuaded that

Plastic misrepresented to the PTO the previous holding

of invalidity of this court.** Continental’s argument that

this court’s holding in the previous litigation was not based

on a mere technicality (failure “to claim a combination

key-thumb abutment’) does not overcome the fact that

any representation by Plastic regarding this court’s opin-

ion was subject to an independent evaluation by the ex-

31 The subjective test does not differ greatly from the “but it might

have been” test. It looks to the reasonable probability that the mis-

representation caused the examiner to approve the claims; whereas

the latter looks to the posssbiléty that the misrepresentation would

have caused the examiner to approve the claims.

82 This case is readily distinguishable from those fraudulent prosecution

cases in which the existence of the relevant prior art was not even

known to the examiner, who was thus denied the opportunity for

an independent evaluation.

A-26

[APPENDIX]

aminer who, as related above, was furnished a copy of

that opinion.*?

Moreover, we are not persuaded that it was Plastic’s

duty, under penalty of invalidation or nonenforcement of

its reissue patent for fraudulent prosecution, to provide the

examiner with a copy of the district court’s decision. To

the extent that the district court’s findings of fact and con-

clusions of law were material to the prosecution of the

reissue application, we regard it as decisive that the ex-

aminer was put on notice of the district court’s opinion

by the copy of this court’s opinion and by Plastic’s specific

reference to the district court case during that prosecution.

The examiner could readily have obtained a copy of the

district court’s opinion, along with the briefs, record tran-

script, exhibits, and other documents associated with the

trial, from Plastic or from the district court itself. At the

same time, the record does not disclose a reasonable prob-

ability that the examiner would have rejected the claims

had a copy of the district court’s findings of fact and con-

clusions of law been submitted to him.** Accordingly, we

hold that the Hall Reissue was not fraudulently procured.

33 Continental's argument would effectively preclude an applicant from

interpreting in good faith any legal precedent or any piece of prior

art before the PTO.

34 Because the Hall Reissue claims are significantly different from those

of the Hall Patent, the necessity for making new factual determina-

tions (such as required by Graham v. John Deere Co., supra, on the

issue of obviousness) would have been apparent to the examiner.

Consequently, it is improbable that the examiner would have at-

tached any importance to the district court’s alternative holdings of

invalidity. This conclusion is reinforced by the fact that, although

the examiner was fully aware that there were alternative holdings of

invalidity by the district court (argued by Continental to be clear

from this court's previous opinion), he did not request further in-

formation.

A-27

(APPENDIX)

(3) Intervening Rights Issue

As related earlier, Continental argues that it has ac-

quired intervening rights under 35 U.S.C. § 25235 and, thus,

should not be held liable for damages for infringement of

the Hall Reissue claims, saying (brief at 45).

In the instant case, it would be a travesty of justice

and a denial of equity to hold that the Defendant

herein [Continental] should pay any damages or com-

pensation to this Plaintiff [Plastic] on the ground that

the Defendant has infringed the reissue patent of the

Plaintiff, when the Defendant made and sold only

the same structure after the date of issuance of the

reissue patent which it had been making and selling

for at least four years prior to the time that the Plain-

tiff obtained its reissue patent, and which structure,

in fairly and fully contested litigation between these

same parties, was held not to be an infringement of

the Plaintiff’s originally issued, subsequently held in-

valid patent upon which the reissue patent is based.

This raises the question of whether equity requires that

Continental be allowed to continue to make, use, and sell

the infringing goods “for the protection of investments

made or business commenced before the grant of the re-

35 Under 35 US.C. § 252, quoted in pertinent part in note 13, supra,

an infringer has the unqualified right to continue to use or sell those

infringing goods which were made, purchased, or used prior to the

reissue grant, unless he infringes a valid claim of the reissue patent

which was in the original patent. Also, the court may provide, to

the extent it deems equitable, for either the conditional or uncon-

ditional continuation of the making, using, and selling of the in-

fringing goods or process. We perceive Continental's argument to be

directed to its continued right to make, use, and sell the infringing

goods rather than its right to merely use or sell such goods made

prior to the grant of the reissue.

A-28

[APPEND!/X}

issue.” °*® Section 252 is an exception to the general grant

to the reissue patentee of the right to exclude others from

making, using, or selling the patented invention (35 U.S.C.

§$ 271) and, as such, may only be invoked when equity

requires.

The district court made no findings of fact on this

question, and, assuming, arguendo, the truth of Continen-

tal’s allegations, the record is insufficient for this court to

determine whether equity requires that Continental be

given the right to continue to infringe the Hall Reissue

Claims.*7 On the basis of an affidavit of the President of

Continental which wvas attached to its motion for summary

judgment, Continental alleges that it “embarked upon an

extensive market investigation, and investigation of various

types of safety closure,” beginning in 1970; that its first

‘“Med-Guard” safety closures?* were produced and sold

in August 1972, as were the Continental ‘“Med-Vials” (the

medicine containers); that, “[i]n the course of the market

research and product research and development, including

$6 In view of our decision on this question, it is unnecessary to reach

such questions as: (1) whether intervening rights can apply to

reissue Claims which are narrower in scope than the original patent

claims (compare Corometrics Medical Systems, Inc. v. Berkeley Bio-

claims (compage Corometrics Medical Systems, Inc. v. Berkeley Bio-

Engineering, Inc., 193 US.P.Q. 467, 478 (N.D. Cal. 1977), and

Wayne-Gossard Corp. Vv. Moretz Hosiery Mills, Inc., 384 F. Supp. 63,

74-75, 183 US.P.Q. 601, 609 (W.D. N.C. 1974), modified, 539 F.2d

986, 191 US.P.Q. 543 (4th Cir. 1976), with Wayne-Gossard Corp.

v. Sondra, Inc., 434 F. Supp. 1340, 1362-63, 195 U.S.P.Q. 777, 796-97

(E.D. Pa. 1977) and Wayne-Gossard Corp. v. Moretz Hosiery Mills,

Inc., 539 F.2d 986, 990-91, 191 US.P.Q. 543, 546-47 (4th Cir.,

1976) ); (2) what, if any, effect did the prior holding of invalidity

have upon Continental’s intervening rights.

37 We assume the validity of the Hail Reissue claims which will be

determined by the district court upon remand, as discussed infra.

38 The “Med-Guard” safety closure includes an internal plug which fits

in the mouth of the vial and an external cap which snaps over the

outside of the vial at the mouth thereof.

« A-29

(APPENDIX)

the patenting of certain other safety closure structures,

Continental Plastics expended an amount of approximately

$33,000”; that, “[i]n tooling up for the initial productiori

of the ‘Med-Guard’ safety closure structure, Continental

Plastics invested approximately $31,398”;5® that, in the

first year of production, it invested $9,872 in advertising

the “Med-Guard” safety closure structure;*® and that, as

of early 1977, its “total investment in tooling and equip--

ment necessary to manufacture, sort and ‘Sell the ‘Med-

Guard’ safety closure structure was $75,000.” *!

Continental seeks to continue to infringe the Hall Re-

issue and even expand its operations throughout the re-

mainder of the life of the Hall Reissue without royalty

fees or damages. This would effectively extinguish the

patentee’s rights under the guise of protecting the invest-

ment of an infringer. See Wayne-Gossard Corp. v. Sondra,

Inc., supra at 1363, 195 U.S.P.Q. at 797. Continental’s ac-

tivities in the safety closure field commenced subsequent

to issuance of the Hall Patent in 1969,4? and Continental

39 From the record, it is not clear whether all or part of this initially

“tooling up” figure is included in the cost of research and develop-

ment which also would have been incurred prior to initial production.

40 Advertising and sales for the subsequent four years were:

Year Advertising | “Med-Vial” Sales “Med-Guard” Sales

1973 $ 4,200.00 | $ 836596 | $75,680

1974 $ 3,000.00 | $ 797,567 $63,257

1975 | $ 3,000.00 | $ 987.989 $59,811

1976 | $17,000.00 | $1,088,153 | $49,740

41 It is the total investment “before the grant of the reissue” that may

be protected, as equity demands; thus, any investment subsequent to

June 15, 1976, is irrelevant to the consideration of intervening rights.

42 Continental has presented no evidence that its activities were con-

ducted in reliance upon the scope of the Hall Patent claims. See

Maxon Premix Burner Co. v. Msa-Continental Products Co., 279 F.

Supp. 164, 168, 155 US.P.Q.. 434, 445 (N.D. Ill. 1967). Absent

such evidence, we need not consider the validity of Continental's

argument that “a defendant who had acted upon the belief which

A-30

[APPENDIX]

has had the benefit of several years’ production for which

no damages can be assessed. During that time its sales

greatly increased, possibly resulting in profits sufficient to

recover what appears to have been a minimal investment.*%

Cf. Wayne-Gossard Corp. v. Sondra, Inc., supra. Moreover,

from the record it appears that other noninfringing goods

can be manufactured from the same equipment currently

being. used to manufacture the infringing goods, so that

not all of Continental’s investment would be lost if it were

precluded from infringing the Hall Reissue. Cf. Wayne-

Gossard Corp. v. Moretz Hosiery Mills, Inc., 447 F. Supp.

12, 16, 199 U.S.P.Q. 87, 89-90 (W.D. N.C. 1976), after re-

mand from 539 F.2d 986, 191 U.S.P.Q. 543 (4th Cir. 1976).

In view of the foregoing and assuming the Hall Re-

issue is valid, we hold that Continental has not acquired

intervening rights sufficient to justify continuing the man-

ufacture of the infringing goods; nevertheless, equity re-

quires that Continental be entitled to recoup its investment

and to offset, against any infringement damages, the rea-

sonable cost of converting or replacing its present equip-

ment in order to produce noninfringing goods. Id. Because

Continental’s investments, expenditures, and recoupment

through profits have not been proved with the requisite

precision, and, further, because the reasonable costs of

conversion have not been demonstrated, the case must be

remanded for further proceedings consistent with this

opinion with respect to these matters. Cf. Wayne-Gossard

42 (Continued )

_ was well founded that the original patent issued to the plaintiff was

invalid, and had proceeded to invest large amounts in connection

with the manufacture and sale of the accused device, thereby acquired

intervening rights with respect to the plaintiff's reissue patent, and

therefore could assert such defense against an infringement suit

brought on the reissue patent.” (Emphasis in original.)

*3 Continental's alleged investment figures include marketing research

as well as expenses incurred in obtaining patents on other devices.

A-31 wees

(APPENDIX)

v. Moretz Hosiery Mills, Inc., 539 F.2d 986, 991-92, 191

U.S.P.Q. 543, 547 (4th Cir. 1976); Rohm & Haas Co. v.

Chemical Insecticide Corp., 171 F. Supp. 426, 120 U.S.P.Q.

435 (D. Del. 1959).

(4) Plastic’s Cross-Motion for Summary Judgment

As noted supra in the proceedings before the district

court, Plastic cross-moved for summary judgment on in-

fringment and validity. Because we conclude that the dis-

trict court improperly granted Continental’s motion for

summary judgment, it is necessary to consider Plastic’s

motion.

A. Infringement

In “DEFENDANT’S ANSWER TO PLAINTIFF'S RE-

QUESTS FOR ADMISSIONS UNDER RULE 36 OF THE

RULES OF CIVIL PROCEDURE,” filed February 22, 1977,

Continental admitted that subsequent to June 15, 1976, it

made, used, and sold a container ensemble on which claims

5 and 8 of the Hall reissue can literally be read. It spe-

cifically admitted infringement of claim 8; and regarding

claim 5, it said: 44

The character of claim 5 of the reissue patent is not

susceptible to precise determination or understanding.

It is noted that claim 1 does not form any part of the

reissue patent, and yet it is further noted that claim 5

refers to “the safety closure of claim 1 wherein”, fol-

lowed by a description of certain structure. It is thus

not possible to determine to what structure claim 5

refers. It would appear that this claim is indefinite and

incomplete on its face, and in such respect it is not

possible to determine whether this claim “can literally

44 Almost verbatim admissions were made regarding use and sale of

infringing containers. | ,

A-32

[APPENDIX)

be read” upon any container ensemble which the De-

fendant has made subsequent to June 15, 1976.

If claim 5 be interpreted to include all of the struc-

tural limitations from claim 1 of the original Hall

patent, it is not-beliéved that this claim can literally

be read upon a container ensemble which the De-

fendant has made subsequent to June 15, 1976, if a key

recess is interpreted to mean a hole formed through

the internal closure in the manner that such recess is

illustrated and described in the Reissue patent 28,861.

Further, if the structural limitations and description

appearing in claim 1 of the original Hall patent be

construed as incorporated into claim 5 of the reissue

patent in suit, and if the second definition found in

Webster’s International Dictionary and the American

Heritage Dictionary of the English Language be taken

as the meaning of the word “coincident,” then De-

fendant denies that claim 5 of Plaintiff’s Reissue patent

28,861 can literally be read upon any container en-

semble which the Defendant has made subsequent to

June 15, 1976.

If the term “coincident,” as used in an integrated

combination of claim 1 of the original Hall patent and

claim 5 of the reissue patent, means that the recess

is at the top of the container assembly while the key

is at the side of the container assembly, such claim

cannot be literally read on any structure which the

Defendant has made since June 15, 1976.

If the term “coincident” appearing in claim 1, for

purposes of attempting to answer this request for ad-

missions, is assumed to mean “alongside” as it has

been previously defined by Mr. Hall, the inventor,

then claim 5 cannot literally be read upon any struc-

ture which has been manufactured or sold by the

Defendant since June 15, 1976.

If the term “coincident” as used in claim 1 of the

original Hall patent, assumed for purposes of attempt-

A-33

{APPENDIX}

ing to answer this request for admissions to be in-

corporated in claim 5, means “occupying the same po-

sition simultaneously,” and provided that all of the

limitations of claim 1 are so incorporated in claim 5,

then claim 5 of the reissue patent in suit can be liter-

ally read wpon container ensembles which have been

made by the Defendant since June 15, 1976. [Emphasis

added. ]

Since we concluded earlier that the language added to

claim 5 during the reissue prosecution corrected any am-

biguity regarding the definition of “coincident” and that

claim 1 is specifically incorporated into claim 5, it is clear

that infringement of clairn 5 is admitted and that the

district court should have entered summary judgment for

Plastic on the infringement issue.

B. Validity

Although we already have concluded that the adjudi-

cation of obviousness in the prior litigation has no col-

lateral estoppel effect upon Hall Reissue claims 5 and 8,

the question remains whether the subject matter as a whole

of these claims would have been obvious to one of ordinary

skill in the art at the time the invention was made. Plastic

correctly states that the Hall Reissue claims are presumed

valid (35 U.S.C. § 282); and this particularly so where the

PTO considered all of the prior art before the courts in

the previous litigation. See Scaramucci v. Dresser Indus-

tries, Inc., 427 F.2d 1309, 1313, 165 U.S.P.Q. 759, 762-63

(10th Cir. 1970). Nevertheless, Continental should have an

opportunity to show the obviousness of the Hall Reissue

claims by presenting to the district court additional prior

art (not before the PTO) which it considers pertinent. See

Solder Removal Co. v. United States International Trade

Commission, 582 F.2d 628, 632, 199 U.S.P.Q. 129, 133

(C.C.P.A. 1978). The obviousness or nonobviousness of the

Hall Reissue claims can then be determined in accordance

A-34

[APPENDIX)

with the analytical guidelines established by the Supreme

Court in Graham v. John Deere Co., supra.*® We note that

these guidelines do not require that, for a combination of

known elements*® to be nonobvious, the result achieved

by the combination must be synergistic.47 Champion Spark

Plug Co. v. Gyromat Corp., _... F.2d __ ia ee U.S.P.Q.

fr age , No. 78-7556, slip op. at 3598-99 (2d Cir. 1979);

Republic Industries, Inc. v. Schlage Lock Co., 592 F.2d 963,

970, 200 U.S.P.Q. 769, 777 (7th Cir. 1979).4§ “If the level

of skill of a person of ordinary skill in the pertinent art

45 This court’s opinion in the previous litigation merely stated that

because Plastic did not claim the dual function feature of the abut-

ment key upon which it was relying, the claims were obvious. Con-

trary to Plastic’s assertion, that opinion did not say that if the dual

function feature had been claimed, the claims would have been

nonobvious.

46 Most, if not all, inventions involve a combination of old or known

elements. Shaw v. E.B. & A.C. Whiting Co., 417 F.2d 1097, 1102,

163 US.P.Q. 580, 584 (2d Cir. 1969), cert. denied, 397 US. 1076,

165 US.P.Q. 417 (1970); Reiner v. I. Leon Co., 285 F.2d 501, 503,

128 US.P.Q. 25, 27 (2d Cir. 1960), cert. denied, 366 US. 929, 129

US.P.Q. 502 (1961).

47 Although the court in True Temper, supra, slip op. at 26, correctly

followed the Graham analytical guidelines, broad dictum in its opin-

ion suggests, without discussion, a requirement of synergism. See also

Deere & Co. v. Hesston Corp., 593 F.2d 956, 963, 201 US.P.Q. 444,

449 (10th Cir. 1979).

48 The court in Republic Industries said (supra at 971, 200 US.P.Q.

at 778): 7

In enacting section 103, Congress expressly mandated nonobvious-

ness, not synergism, as the sole test for the patentability of novel

and useful inventions: indeed, synergism is not even mentioned in

the Patent Act of 1952. Moreover, as section 103 applies to all

patent claims, there is no justification why patentability of a

combination patent should be measured by a different standard

than any other type of invention. .

More importantly, when using the synergism approach to

determine whether one element functions differently or whether

the whole somehow exceeds the parts, one is required to look

solely to he operation of the elements after they are combined.

This analysis suffers from two defects. First, a test which looks ex-

Brien

A-35

[APPENDIX)

is such that the differences between the subject matter

sought to be patented and the prior art would not have

been obvious to that person, the test for nonobviousness

is met.” Champion Spark Plug Co. v. Gyromat Corp., supra,

slip op. at 3599.

Accordingly, the case must be remanded for determi-

nation, consistent with this opinion, of the question of

obviousness of the subject matter as a whole of Hall Re-

issue claims 5 and 8.4

+8 (Continued}

clusively to the functioning of the individual components after

they are combined must necessarily be premised on the assumption

that it is always obvious to take known elements and combine

them. ...

The second and more basic defect with syngerism is that

section 103 sets as the standard of patentability the nonobvious-

ness of the invention “at the time the invention was made to a

person having ordinary skill in the art. . . .” This provision there-

fore compels the courts to view the invention from the vantage

point of the field of art at a specific point in time, s.¢., the time

the invention was made. See Rich, Principles of Patentability, 28

Geo.Wash.L.Rev. 393, 405-06 (1960). From this vantage point

the critical question becomes whether the level of skill in the

art was such that the combining uf the elements in the manner

claimed would have been obvious, not in retrospect, but at the

time it was done by the inventor. As the Supreme Court stated

in United States v. Adams, 383 US. 39, 50, 86 S.Ct. 708, 713,

15 LEd.2d 572 [148 US.P.Q. 479, 483} (1966), a companion

case to Graham:

Ic begs the question . . . to state merely that magnesium and

cuprous chloride were individually know battery components.

If such a combination is novel, the issue is whether bringing

them together as taught by [the inventor} was obvious in the

light of the prior art.

Syngerism, however, precludes this analysis. Because syngerism

centers exclusively on the performance of the elements after com-

bination and without regard to the obviousness or nonobviousness

of making the combination, synergism does not comport with the

Graham mandate to apply section 103.

42 "We recognize Continental's right to raise at trial other questions re-

garding the validity of the Hall Reissue which have not been disposed

of in this opinion.

A-36

[APPENDIX]

(5) Attorney Fees

In its August 5, 1977, order, the district court awarded

Continental its attorney fees, apparently in accordance with

35 U.S.C. § 285, which states that “[t]he court in excep-

tional cases may award reasonable attorney fees to the

prevailing party.” Entitlement to attorney fees arises from

“such misconduct upon the part of the losing party as to

constitute fraud on the Patent Office or [conduct] so unfair

and reckless as to make it unconscionable for the prevailing

party to sustain the expense of counsel.”®® Q-Panel Co. v.

Newfield, 482 F.2d 210, 211, 178 U.S.P.Q. 521, 522 (10th

Cir. 1973). The award of attorney fees under section 285

is compensatory rather than punitive. Halliburton Co. v.

Dow Chemical Co., 514 F.2d 377, 382, 185 U.S.P.Q. 769, 773

(10th Cir. 1975). Although the award of attorney fees is

discretionary with the trial court, such an award is proper

only when the case is exceptional. Id.; Iron Ore Co. of

Canada v. Dow Chemical Co., 500 F.2d 189, 195, 182

U.S.P.Q. 520, 524 (10th Cir. 1974).

It is apparent from the record that the district court

set forth no conclusion of law that this case was “excep-

50 In True Temper, supra, slip op. at 31-32, the court said:

where the plaintiff was aware of the obvious invalidity of his

patent at the time he brought suit, Tidewater Patent Development

Co. v. Kitchen, 371 F.2d 1004, 1013. [152 US.P.Q. 36, 656]

(4th Cir’ [1966]), cert. denied, 389 US. 821 [155 US.P.Q. 768

(1967 )}, or where the litigation once instituted was vexatious or

unduly protracted, Uarco Incorporated v. Moore Business Forms,

Inc., 440 F.2d 580, 586 [169 US.P.Q. 263} (7th Cir.), cert.

denied, 404 US. 873 [171 US.P.Q. 322 (1971)], the case may

be deemed ' ‘exceptional” within the statute so that the prevailing

defendant is ‘saved from the undue hardship of bearing his own

fees. See Parker v. Motorola, Inc., 524° F2d 518 [188 US.P.Q.

225} (Sth Cir. [1975]), cert. denied, 425 US. 975 {190 US.P.Q.

172 (1976)]}; Seismograph Service Corp. v. Offshore Raydist,

Inc., 263 F.2d 5 [119 US.P.Q. 146, pee Mh on rehearing, 263

F.2d 24, 120 US.P.Q. 244] (Sth Cir. [1959]);. see also L. F.

Strassheim Co. v. Gold Medal Folding Furniture Co., 477 F.2d

818 {177 US.P.Q. 673] (7th Cir. [1973}).

A-37

[APPENDIX)

tional” within the meaning of section 285; nor did the

court make any findings of fact that would support such

a conclusion.

This, coupled with our holdings and conclusions set

forth above, prompts us to hold that the district court’s

award of attorney fees to Continental was improper.

SUMMARY

The district court’s denial of Plastic’s cross-motion

for summary judgment is reversed on the issue of in-

fringement; its dismissal of Plastic’s complaint and entry

of summary judgment in favor of Continental are reversed;

its award to Continental of attorney fees is reversed; and

the case is remanded for further proceedings, consistent

with this opinion, on the question of validity of the Hall

Reissue and (in the event the presumption of validity

of the Hall Reissue is not overcome by Continental) on

the matters pertaining to Continental’s intervening rights,

discussed supra.

~* REVERSED and REMANDED

A-38

{APPENDIX}

UNITED STATES COURT OF APPEALS

TENTH CIRCUIT

{Filing Stamp omitted in printing}

Before Honorable Oliver Seth, Chief Judge, Honorable

Robert H. McWilliams, Honorable James E. Barrett, Hon-

orable William E. Doyle, Honorable Monroe G. McKay,

Honorable James K. Logan, Circuit Judges, and Honorable

pack R. Miller, Judge*

PLASTIC CONTAINER CORPORATION, _ )

Plaintiff-Appellant, )

)

Vv. ) No. 77-1753

)

CONTINENTAL PLASTICS OF )

OKLAHOMA, INC., )

Defendant-Appellee. )

ORDER

Appellee Continental Plastics of Oklahoma, Inc., has

filed a Petition for Rehearing with respect to this court’s

opinion filed August 8, 1979, which, among other matters,

reversed the district court’s dismissal of appellant Plastic

Container Corporation’s complaint and its entry of sum-

mary judgment in favor of appellee; and reversed the

district court’s denial of appellant’s cross-motion for sum-

mary judgment on the issue of infringement.

The petition is essentially grounded on this court’s

statement:

Therefore, we conclude that the claimed invention of

the Hall Reissue cannot be considered substantially

identical to the claimed invention of the Hall patent

for purposes of collateral estoppel.

* Of the United States Court of Customs and Patent Appeals

A-39

(APPENDIX)

Petitioner argues that appellant has made a “binding

factual admission” in its brief on appeal (Intervening

Rights Issue), stating:

Here .. . the scope of a reissue claim (reissue claim

5) is identical or substantially identical to the scope

of an original claim (original claim 5). The only dif-

ference is the addition of a —whereby— clause.

Petitioner also points out that appellant made the same

“admission” in its OPPOSITION TO DEFENDANT'S MO-

TION FOR SUMMARY JUDGMENT before the district

court. However, it is not apparent from the district court’s

order granting the motion of Continental Plastics for sum-

mary judgment that the court considered the “admission.”

Briefs are not a part of the record,! and in those cases

in which statements in a brief were considered as admis-

sions, it appears that the court did so as a matter of dis-

cretion. See Leslie v. Knight Soda Fountain Co., 55 F.2d

224, 225 (2d Cir. 1932); Young & Vann Supply Co. v. Gulf,

F. & A. Railway Co., 5 F.2d 421, 423 (5th Cir. 1925). More-

over, the alleged “admission” of appellant here appears to

be contrary to the argument in its brief (p. 9) that—

The claims here in issue, i.e., claims 5 and 8 of the

Reissue patent, were not in issue in the prior litigation

and were redrafted specifically to avoid the basis on

which this Court of Appeals held original Claim 5

invalid. . .. collateral estoppel . . . does not and cannot

apply to the validity of claims 5 and 8 of the Reissue

patent.

Considering that this case is on appeal from an order

granting summary judgment, the court has, in furtherance

of the proper administration of justice, decided the issue

of collateral estoppel on the merits of the case. In its

petition, appellee seeks to further argue the merits, point-

1 Cole v. Ross Coal Co., 150 F. Supp. 808, 809-10, and cases cited

(D.C. W. Va. 1957), aff'd 249 F.2d 600 (4th Cir. 1957).

A-40

[APPENDIX]

ing out that the language added to reissue claim 5 consists

of a “whereby” clause and asserting that such a clause

“cannot be anything more than a statement of an inherent

function of the structure defined prior to the ‘whereby’

clause” (citing In re Mason, 44 CCPA 937, 940, 244 F.2d

733, 735, 114 U.S.P.Q. 127, 129 (CCPA 1957)). However,

Mason does not stand for such a broad proposition; and

the idea that functional language ipso facto cannot pre-

cisely define novelty in structure was laid to rest in In re

Swinehart, 58 CCPA 1027, 439 F.2d 210, 169 U.S.P.Q. 226

(CCPA (1971).? It is clear that the added language in

reissue claim 5, “the key carried by the external cap func-

tions as a tab against which the thumb is pressed in a

generally upwarc direction to remove the external cap,”

defines and limits structure of the key carried by the ex-

ternal cap so that the thumb can be pressed in an wpward

direction. Such a structural limitation is not inherent in

original claim 5 (which, e.g., permits structure for a rota-

tional or downward direction for cap removal), as urged

by petitioner. See In re Mott, 557 F.2d 266, 194 U.S.P.Q.

305 (CCPA 1977).

In view of the foregoing, it is ORDERED: |

That the petition is granted to the extent that the

court has considered petitioner’s arguments and, in all

other respects, is hereby denied.

* Footnote 2 of the opinion in Im re Swinehart states:

Nevertheless, we are unable to see merit in any proposition which

would require the denial of a claim solely because of the type of

language used to define the subject matter for which patent pro-

tection is sought. Insofar as the opinion in Im re Fisher, 50 CCPA

1025, 307 F. 2d 948, 135 USPQ 22 (1962), cited and relied on

by the Patent Office here is inconsistent with the above statement,

it will no longer be followed. Any doubt whether claims con-

taining language such as that used in the Fisher case would be

patentable was laid to rest last term when this court reversed

the Patent Office position when the Fisher application came be-

fore us for a second time. See Im re Fisher, 57 CCPA 1099, 427

F.2d 833, 166 USPQ 18 (1970).

A-41

(APPENDIX)

UNITED STATES COURT OF APPEALS

TENTH CIRCUIT

SEPTEMBER TERM — OCTOBER 11, 1979

Before Honorable James E. Barrett, Honorable James K.

Logan, Circuit Judges, and Honorable Jack R. Miller,

Judge*

PLASTIC CONTAINER CORPORATION, _ ) 5

Plaintiff-Appellant, )

Vs. ) No. 77-1753

)

CONTINENTAL PLASTICS OF )

OKLAHOMA, INC., )

Defendant-Appellee. )

This matter comes on for consideration of appellee’s

motion for stay of mandate in the captioned cause pending

application to the Supreme Court for certiorari.

Upon consideration whereof, it is ordered that the

mandate shall be stayed until November 10, 1979, pending

certiorari and that on or before that date, there is filed

with the Clerk of the Court of Appeals a notice from the

Clerk of the Supreme Court of the United States that

appellee has timely filed a petition for writ of certiorari

in the Supreme Court, the stay shall continue until final

disposition by the Supreme Court.

Decision on whether a bond or other security is to

pe re-required is reserved pending a showing of a need

therefor by Plastic Container Corp., such showing to be

made within thirty days from the date of this order. Rule

41(b) of the Federal Rules of Appellate Procedure.

HOWARD K. PHILLIPS

Clerk

* Of the U.S. Customs and Patent Appeals, sitting by designation

A-42

(APPENDIX)

UNITED STATES COURT OF APPEALS

TENTH CIRCUIT

SEPTEMBER TERM — OCTOBER 26, 1979

Before Honorable James E. Barrett, Honorable James K.

Logan, Circuit Judges, and Honorable Jack R. Miller,

Judge, U. S. Court of Customs and Patent Appeals

PLASTIC CONTAINER CORPORATION, )

Plaintiff-Appellant, )

)

vs. ) No. 77-1753

)

CONTINENTAL PLASTICS OF )

OKLAHOMA, INC., )

Defendant-Appellee. )

This matter comes on for further consideration of the

Court’s order entered herein on October 11, 1979, in light

of the Plaintiff’s opposition to the Defendant’s motion for

stay of mandate.

Upon consideration whereof, the Court concludes that

the opposition is well taken.

It is ordered that the stay entered October 11, 1979,

is vacated.

It is further ordered that the mandate in the captioned

cause shall issue forthwith.

(s) Howard K. Phillips

HOWARD K. PHILLIPS

Clerk

A-43

(APPENDIX)

IN THE UNITED STATES DISTRICT COURT FOR THE

WESTERN DISTRICT OF OKLAHOMA

{Filing Stamp omitted in printing)

PLASTIC CONTAINER CORPORATION, _)

Plaintiff, )

VS. ) No. CIV-

) 76-1011-C

CONTINENTAL PLASTICS OF )

OKLAHOMA, INC. )

Defendant. )

ORDER GRANTING MOTION FOR SUMMARY

JUDGMENT AND JUDGMENT

Upon careful consideration of the motion of the de-

fendant for summary judgment and the cross-motion of

the plaintiff for summary judgment, and the Court being

fully advised,

The Court finds that the defendant, Continental Plas-

tics of Oklahoma, Inc., is entitled to summary judgment

as a matter of law.

IT IS THEREFORE ORDERED, ADJUDGED AND

DECREED that the defendant’s motion for summary judg-

ment be, and the same is hereby granted; that the plain-

tiff’s cross-motion for summary judgment be, and the same

is hereby denied; that the plaintiff’s complaint be, and the

same is hereby dismissed; that judgment be, and the same

is hereby entered in favor of defendant, Continental Plas-

tics of Oklahoma, Inc., and against plaintiff, Plastic Con-

tainer Corporation; and that the defendant recover its costs

and reasonable attorney’s fees herein.

DATED THIS 5TH DAY OF AUGUST, 1977.

(s) Stephen S. Chandler

UNITED STATES DISTRICT JUDGE

ENTERED IN JUDGMENT DOCKET ON 8-5-77

A-44

(APPENDIX)

IN THE UNITED STATES DISTRICT COURT

FOR THE WESTERN DISTRICT OF OKLAHOMA

[Filing Stamp omitted in printing}

PLASTIC CONTAINER CORP.,

)

Plaintiff, )

) Civil

VS. ) Action

) 72-825

CONTINENTAL PLASTICS OF )

OKLAHOMA, INC. )

Defendant. )

JUDGMENT ORDER

This matter has come before the Court upon the com-

plaint of the Plaintiff, based upon a charge of patent in-

fringement, under Title 35 United States Code, Section 271,

of United States Patent 3,473,681 entitled “Safety Medi-

cine Bottle Closure”, and further alleging willful infringe-

ment of said patent by the Defendant. The Defendant

answered, denying the charge of infringement alleged by

Plaintiff, and further denying that if such infringement

should be found by the Court, such infringement was will-

ful on the part of the Defendant. The Defendant asserted

a counterclaim against the Plaintiff alleging and charging

that U.S. Patent 3,473,681 was invalid and improperly is-

sued by the U.S. Patent Office.

Prior to the trial, the Plaintiff restricted its charges

of infringement of the patent in suit by the Defendant to

infringement of claims 1-5 and 7 of the patent.

The case came on for trial on November 14 and 15,

1973 by the Court sitting without a jury, the parties ap-

pearing in person and by counsel. The Court heard and

considered the oral testimony of witnesses, including ex-

pert witnesses presented by both parties, and the Court

read and considered the exhibits presented at the trial,

A-45

(APPENDIX)

all deposition testimony and exhibits, all interrogatories

and the answers made thereto and all requests for admis-

sions and responses made thereto. The Court also con-

sidered the trial briefs submitted in advance of the trial

by the parties.

Subsequently to the trial of this cause, the Court has

made Findings of Fact and reached Conclusions of Law.

On the basis of such Findings and Conclusions, IT IS NOW

HEREBY ORDERED, ADJUDGED AND DECREED as

follows:

1. The Court has jurisdiction of the parties and the

subject matter of this suit under the Patent Laws of the

United States.

2. The Plaintiff is the owner of all right, title and in-

terest in and to Hall United States Patent 3,473,681.

3. Each and all of the claims of United States Patent

3,473,681 are invalid.

4. The Complaint and all causes of action asserted hy

the Plaintiff are dismissed with prejudice.

5. Plaintiff shall pay to the Defendant, the Defendant’s

taxable costs.

6. The matter of whether the Defendant is entitled

under 35 U.S.C. 285 to an award of attorney’s fees may

be presented and considered separately at the time of set-

tling costs.

Dated this 13th day of December, 1973.

(s) Stephen S. Chandler

United States District Judge

A-46

[APPENDIX]

UNITED STATES COURT OF APPEALS

TENTH CIRCUIT

No. 74-1123

[Filing Stamp omitted in printing}

PLASTIC CONTAINER CORP.,

Plaintiff-Appellant,

) Appeal from the

) United States

) District Court

vs. ) for the

) Western District

) of Oklahoma

)

)

(D.C. No. 72-825)

CONTINENTAL PLASTICS OF

OKLAHOMA, INC.,

Defendant-Appellee.

Thomas J. Greer, Jr., Washington, D.C. (James A. Peabody,

Oklahoma City, Oklahoma, on the brief; Of Counsel: Walter

D. Ames) for Appellant.

William R. Laney, Oklahoma City, Oklahoma, for Appellee.

Before MURRAH, BARRETT and DOYLE, Circuit Judges.

BARRETT, Circuit Judge.

Plastic Container Corp., (Plastic), appeals from an ad-

verse judgment following trial to the Court in a patent in-

fringement action which it brought as assignee, against

Continental Plastics of Oklahoma, (Continental). The Trial

Court held the patent invalid.

United States Letters Patent No. 3,473,681, (’681), was

issued to Samuel Hall, Jr., on October 21, 1969, for a

“Safety Medicine Bottle Closure.” Letters were issued sub-

sequent to the first and only application which was granted

without modification or rejections. The bottle was devel-

oped during Hall’s employment with Plastic, at a time when

A-47

[APPENDIX]

Plastic desired to market a child-proof safety medicine bot-

tle prior to the passage of federal regulations governing

same.

Hall developed the safety bottle set forth in ’681 on

the predicate that it should be designed around the stan-

dard medicine bottle. As developed, the bottle included a

basic container with an opening; a snap cap; a modified

thumb tab or “key” attached to the snap cap; and a second

cap positioned in the container opening in the form of a

plug (safety closure) with a recess in the top. Medicine

could thus be extracted from the bottle by removing the

snap cap, inserting the modified thumb tab into the recess

of the inner plug, and thereafter pulling out the plug.

Substantial documentary evidence was presented by

both parties setting forth ’681, defendant’s accused infring-

ing container, and exhibits relating to the prior art which,

allegedly, had not been considered by the patent office in

its search. At the close of the evidence, the Court ruled

from the bench, in part noting: »

- - - It’s my opinion that the patent lacks novelty, and

was anticipated by the prior art, and I think there is

a complete lack of inventiveness. I think that under

those circumstances, that it is my duty to determine

the matter in favor of the defendant, and I think par-

ticularly that the Velt and the Mostoller, as the others,

too, show that everything here in this patent was an-

ticipated by the prior art.

After so holding, the Court advised Plastic ‘that if it filed

a Motion for New Trial that it would be considered very

carefully with an open mind. Plastic did not file the motion.

On appeal Plastic presents two issues for review: (1)

Is Claim 5 of the Hall patent valid or invalid; and (2)

What weight, if any, should be accorded Findings of Fact

under Rule 52(a), Fed.R.Civ.P., 28 U.S.C.A., where those

Findings have been prepared by counsel for the successful

A-48

[APPEN-DiX)

party and xerographically reproduced by the lower caurt,

which in part contradict and supplement the summary

opinion of the Court, and are based on documentary evi-

dence. These issues are treated in reverse order by Plastic

and Continental in their briefs. We shall proceed in the

same manner. p

I.

Plastic contends that the “clearly erroneous” standard

of Rule 52(a), Fed.R.Civ.P., 28 U.S.C.A., does not apply to

the Trial Court’s findings because of the substantial docu-

mentary evidence in evidence and because the findings were

not the product of the Trial Court.

In support of its contention that the “clearly errone-

ous” rule need not be followed where substantial docu-

mentary evidence is admitted, Plastic cites Deep Welding,

Inc. v. Sciaky Bros., Inc., 417 F.2d 1227 (7th Cir. 1969),

cert. denied 397 U.S. 1037 (1970), for the rule that:

In such situations, the Court of Appeals has the right

to interpret such evidence for itself and is equally

competent as the trial court to do so.

417 F.2d at 1229.

Continental contends that this rule has no application

to the case at bar because, in addition to the documentary

evidence, there was extensive testimony of expert witnes-

ses, including the inventor, Plastic’s President, and several

patent experts.

We have repeatedly held that the ultimate question of

patent validity is one of law for this court to decide upon

the record on appeal. Scaramucci v. Dresser Industries, Inc.,

427 F.2d 1309 (10th Cir. 1970); Blish, Mize and Silliman

Hardware Company v. Time Saver Tools, 236 F.2d 913 (10th

Cir. 1956), cert. denied 352 U.S. 1004 (1957). We have also

consistently held that findings and determinations of fac-

tual issues made by the trial court are reversible on appeal

A-49

[APPENDIX}

only if clearly erroneous. Scaramucci v. Dresser Industries,

Inc., supra; Eimco Corporation v. Peterson Filters and En-

gineering Company, 406 F.2d 431 (10th Cir. 1968), cert.

denied 395 U.S. 963 (1969); McCullough Tool Company v.

Well Surveys, Inc., 343 F.2d 381 (10th Cir. 1965), cert.

denied 383 U.S. 933 (1966); Admiral Corporation v. Zenith

Radio Corporation, 296 F.2d 708 (10th Cir. 1961). We have

carefully reviewed the whole of this voluminous record.

We hold that the Trial Court’s findings are not clearly

erroneous.

Plastic argues that the “clearly erroneous” rule should

not be followed when, as here, the Trial Court adopted and

accepted, verbatim, the proposed findings submitted to the

Court by Continental. To be sure, we do not condone such

practice. We recently criticized this practice in Edward B.

Marks Music Corporation v. Colorado Magnetics, Inc., 497

F.2d 285 (10th Cir. 1974). Even so, such practice by the

Trial Court is not to be considered clearly erroneous if

supported by sufficient evidence. United States v. El Paso

Natural Gas Co., 376 U.S. 651 (1964); United. States v.

Crescent Amusement Co., 323 U.S. 173 (1944); M. B. Skin-

ner Company v. Continental Industries, Inc., 346 F.2d 170

(10th Cir. 1965), cert. denied 383 U.S. 934 (1966). The

Trial Court’s adoption of the proposed findings herein was

therefore not clearly erroneous, especially when, as here,

specific findings as noted, supra, were also rendered by the

Trial Court from the bench at the close of the evidence.

We observe that the proposed findings submitted by Plastic

were most minimal for an involved patent, case and that

Plastic did not petition for a new trial or otherwise fault

the Trial Court’s findings prior to this appeal.

II.

Although seven claims are set forth within ’681, each

of which were declared invalid, Plastic opted, for purposes

of simplifying the issues, to appeal only from the Trial

Court’s holding that Claim 5 was invalid.

A-50

(APPENDIX)

Claim 5 provides:

The safety container closure of claim 11 wherein said

external closure cap is provided with a peripheral skirt,

the lowermost part of said skirt carrying said key, the

interior of said skirt carrying an annular bead which

snaps over a complementary bead around an outer

periphery of the container opening.

Plastic contends that Claim 5 is not anticipated and that

it does not lack novelty. Plastic argues that the Trial Court

did not understand the terms “novelty” and “anticipation”

when it found that “. .. this patent lacks novelty, and was

anticipated by the prior art .. .” The Trial Court specially

found, as previously observed, that ’681 was anticipated by

the prior art because of the Velt and Mostoller patents, and

“the others, too.”

Novelty in a patent can be disproved by showing an-

ticipation or aggregation. A. E. Staley Manufacturing Com-

pany v. Harvest Brand, Inc., 452 F.2d 735 (10th Cir. 1971),

cert. denied 406 U.S. 974 (1972); McCullough Tool Com-

pany v. Well Surveys, Inc., supra. Although the doctrine

of anticipation is a narrow one, Griswold v. Oil Capital

Valve Co., 375 F.2d 532 (10th Cir. 1966), it is established

in these cases where there is an aggregation of elements

old in the art which, when considered together, disclose

all of the claimed elements and when no new functional

1 Claim 1 provides:

A safety container closure assembly including,

(a) a container having an opening,

(b) an internal closure positioned within said opening, said closure

having a key recess therein,

(c) an external cap positioned over said opening,

(d) said external cap carrying a key at a location not coincident with

the location of said key recess,

(e) whereby said cap must be removed to insert the key into the

key recess and thereby remove the internal closure.

A-51

[APPENDIX1

relationship arises from their combination. Scaramucci v.

Dresser Industries, Inc., supra; Baum v. Jones & Laughlin

Supply Co., 233 F.2d 865 (10th Cir. 1956). The presump-

tion of validity of a patent is strengthened when all the

prior art has been considered. Scaramucci ‘v. Dresser In-

dustries, Inc., supra. However, where all the relevant prior

art has not been fully considered by the patent office, the

presumption of validity of the issued patent is weakened.

Philips Electronic and Pharmaceutical Industries Corp. v.

Thermal and Electronics Industries, Inc., 450 F.2d 1164 (3rd

Cir. 1971).

We hold that the Trial Court did not err in finding

that the entire patent was anticipated by the prior art. We

have considered Plastic’s contention raised in its reply brief

that the “prior art fails to show an element that functions

both as a key which enters a key recess and as a thumb

abutment.” We agree. However, such an element, i.e., an

abutment functioning as a key and a thumb tab, was never

claimed. Patents must be judged by claims made in their

applications. Ohio Citizens Trust Company v. Lear Jet Cor-

poration, 403 F.2d 956 (10th Cir. 1968), cert. denied 394

U.S. 960 (1969). Claims of the patent are the sole grant.

McCullough Tool Company v. Well Surveys, Inc., supra.

Products of mere mechanical skills are not patentable, Car-

son v. Bland, 398 F.2d 423 (10th Cir. 1968); Ohio Citizens

Trust Company v. Lear Jet Corporation, supra.

Plastic contends that Claim 5 was not obvious. Under

35 U.S.C.A. § 103, a patent will not issue if the “differ-

ences 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 . . . to a person having

ordinary skill in the art .. .” In interpreting Section 103,

the United States Supreme Court held in Graham v. John

Deere Co., 383 U.S. 1 (1966):

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

to be determined; differences between the prior art and

A-52

[APPENDIX]

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

of ordinary skill in the pertinent art resolved.

383 U.S. at 17.

Plastic’s own witnesses testified that the primary compon-

ents of ’681 were known to the art. Mr. Hall, the inventor,

testified that:

...I had the concept of why couldn’t we keep what

we had in the primary, basic file and cap and develop

a safety closure around that...

and that:

Q. Other than that one change in that thumb abut-

ment, as you call it, or tab which was there, the

only thing beyond that that you did to the existing

plastic vial and snap cap lid was place a plug in

it; is that right?

A. (Mr. Hall) That’s right.

Also, on cross-examination, Mr. Hoffman, Plastic’s Presi-

dent, when asked if the vial in ’681 was standard, testified:

A. ... You’re speaking of the vial only?

Q. That’s right.

A. Yes.

Q. Does this further refer to the snap cap as being

standard?

A. Standard as of that time?

Q. Yes.

A. Yes, sir.

Q

All right. And you have been making snap cap

lids and vials since the beginning of your company

in ’63; is that true?

Yes, sir.

>

A-53

(APPENDIX)

The issue of obviousness must be resolved on the basis

of factual inquiries, Hinde v. Hot Sulphur Springs, Colo-

rado, 482 F.2d 829 (10th Cir. 1973); Carson v. Bland, supra,

as of the time when solutions to problems are being sought,

King-Seeley Thermos Co. v. Refrigerated Dispensers, Inc.,

354 F.2d 533 (10th Cir. 1965). Applying the prior art of

Velt and Mostoller, and the differences between the prior

art and Claim 5, considered together with the ordinary skill

in the pertinent art, we hold that the Trial Court did not

err in finding ’681 invalid as obvious.

III.

We have carefully considered the remaining allega-

tions of error advanced by Plastic. They are without merit.

Each party shall bear its own costs in this appeal.

AFFIRMED.