Petition — AB Turn-O-Matic v. Tveter
Supreme Court brief1981
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STEVAS,
CLERK
In the Supreme Court of the
United States
Oocroser TrRM, 1980
AB Turn-O-Martio,
Petitioner,
vs.
Sven TVETER, !
Respo.dent. |
|
Petition for Writ of Certiorari to the
United States Court of Appeals
for the Ninth Circuit
New. A. Smirx#
Grorce C. Limpacn
Liusacn, Limsace & Sutton
2001 Ferry Building
San Francisco, CA 94111
(415) 433-4150
Counsel for Petitioner
=== —————__ =
SORG PRINTING COMPANY OF CALIFORNIA, 346 FIRST STREET, SAN FRANCISCO 94109
SUBJECT INDEX
Page
Opinions Below 1
Jurisdiction 2
Question Presented , ; 2
Sistutore Provision Involved.............. 2
Statement of the Case 2
A. The Issue .. 2
B. The Opinions Below 3
Reason for Granting the Writ | 3
_A. Summary 3
B. The Conflict ie “ie
Conclusion : 8
Appendix A. Opinion Tveter v. AB Turn-O-Matic.
Cite as 633 G.2d 831 (9th Cir. 1980) App. p. 1
Appendix B. United States Code, Title 35 Patents. 18
a Appendix C. Opinion AB Turn-O-Matie v. Tveter
(N.D. Cal. 1977) 19
TABLE OF AUTHORITIES
CasEs Pages
American Seating Co. v. National Seating Co., 586
F.2d 611 (6th Cir. 1978) 000... 5
Amp Ine. v. Bunker Ramo Corp., 604 F.2d 24 (7th Cir.
1979) 6
Anderson’s-Black Rock Inc. v. Pavement Salvage Goi, %
ge «ME 2S. 5 SBR anc aMMROD i UCTS OS A 4,7 and 8
Astro Music Inc. v, Eastham, 564 F.2d 1236 (9th Cir.
1977) SEPM OSE N BRIE CTS he OTE 6
Bowser, Inc. v. United States, 388 F.2d 346 (Ct.Cls.
ESE ERIE AMO 2S SEL Ny PL OER 7
Brennan v. Mr. Hanger, Inc., 479 F.Supp. 1215 (S.D.
N.Y. 1979) a 8
Champion Spark Plug Co. v. Gyromat Corp., 603 F.2d
361 (2nd Cir. 1979)................... 5
Clark Equipment Co. v. Keller, 570 F.2d 778 (8th Cir.
1978) ta 6
Deere and Co. v. Hesston Corp., 593 F.2d 956 (10th
Cir. 1979) sila aia sageelininiickeisekeSisedehsansasieoacsighibbeda ue 7
Digitronics Corp. v. New York Racing Ass’n Inc., 553
nae cep (a0 Cir, 1977) 5
Graham v. John Deere Co., 383 U.S. 1 (1966)................ 3, 4
Hanson v. Alpine Valley Ski Area, Inc., 611 F.2d 156
6th Cir. 1979) : 6
Herschensohn v. Hoffman, 593 F.2d 893 (9th Cir.
1979) 6
International Tel. & Tel. Corp. v. Raychem Corp., 538
F.2d 453 (1st Cir. 1976) ..................:...... 4
>
TABLE OF AUTHORITIES
ed
iii
Pages
John Zink Co. v. National Airoil Burner Co., 613 F.2d
547 (5th Cir. 1980)
Leinoff v. Valerie Furs Ltd., 501 F.Supp. 720 (S.D.
N.Y. 1980)
Norfin, Inc, v. International Business Machines, 625
F.2d 357 (10th Cir. 1980).....
Palmer v. Orthokinetics Inc., 611 F.2d 316 (9th Cir.
1980)
Parker v. Motorola, Inc., 524 F.2d 518 (5th Cir. 1975)
Penn Internationa] Industries v. Pennington Corp.,
583 F.2d 1078 (9th Cir. 1978)
Plastic Container Corp. v. Continental Plastics, 607
F.2d 885 (10th Cir. 1979)
Reinke Mfg. Co. Inc. v. Sidney Mfg. Corp., 594 F.2d
644 (8th Cir. 1979 )
Republic Industries, Inc. v. Schlage Lock Co., 592 F.2d
963 (7th Cir. 1979)
Reynolds Metals Co. v. Acorn Bldg. Components, Ine,
548 F.2d 155 (6th Cir. 1977)
Roanwell Corp. v. Plantronics, Inc., 429 U.S. 1004
1976)
Sakraida v. Ag Pro, Inc., 425 U.S. 273 (1976) ............
Sims v. Mack Truck Corp., 608 F.2d 87 (3rd Cir. 1979)
Smith v. ACME General Corp., 614 F.2d 1086 (6th
Cir. 1980)
Sponnoble, In re, 405 F.2d 578 (CCPA 1969)................
True Temper Corp. v. C F & I Steel Corp., 601 F.2d 495
(10th Cir. 1979) 22... pra Sten cheatin hah
5
4,7
5
iv TABLE oF AUTHORITIES
MISCELLANEOUS Pages
Conner, Some Highly Personal Reflections on Section
103,5 APLA Journal 2, pp. 77-86 (1977) 8
Markey, The Synergism Virus: Cause and Cure, 2
Bull. L.A. Pat, La Assoc. 2 (Oct. 6, 1980) .................. 8
Miller, Factors of Synergism and Ordinary Skill in
the Pertinent Art in Section 103 Determinations, 8
APLA Journal 4, pp. 321-332 (1980) 8
Rich, Escaping the Tyranny of Words—Is Evolution
im Legal Thinking Impossible? 60 JPOS 5, pp. 271-
303 (1978) 8
STATUTES
Patent Act of 1952, Sec. 103 (35 USC 103) ............ 2, 3, 4, 6, 8
United States Code, Title 28, Sec. 1254(1) we , 2
| ERE
In the Supreme Court of the
United States
Ocroser Term, 1980
AB Turn-O-Matio,
Petitioner,
vs.
Sven TVETER,
Respondent.
Petition for Writ of Certiorari to the
United States Court of Appeals
for the Ninth Circuit
Petitioner, AB Turn-O-Matic, prays that a Writ of Cer-
tiorari issue to review the judgment of the United States
Court of Appeals for the Ninth Circuit.
OPINIONS BELOW
The opinion of the Court of Appeals is reported at 633
F.2d 831 and is reprinted as Appendix A to this Petition.
The opinion of the District Court for the Northern District
of California which is unreported is reprinted as Appendix
C prefaced by final amendments thereto and including the
supporting record references.
2
JURISDICTION
The judgmcnt of the Court of Appeals. was filed Decem-
ber 4, 1980. The jurisdiction of this Court is invoked under
28 USC 1254(1).
QUESTION PRESENTED
Is “synergism” a requirement for unobviousness of in-
ventions under 35 USC 103 despite the fact the statute says
nothing about synergism?
STATUTORY PROVISION INVOKED
This case involves Section 103 of the Patent Act of 1952,
35 USC 103. (Appendix B).
_ STATEMENT OF THE CASE
A. The Issue.
Petitioner, AB Turn-O-Matic, seeks review of the deci-
sion of the Court of Appeals for the Ninth Circuit reversing
in part the judgment of the District Court and holding
Petitioner’s ticket dispenser patent invalid by failing to
meet the non-statutory, post-invention, factual test of
“synergism”—i.e., only when the whole in some way exceeds
the sum of its parts is the accumulation of old elements
patentable.
Turn-O-Matic is the owner of United States Letters
Patent No. 3,885,724 issued in 1977 on a ticket dispenser
for a waiting customer numbering system. Turn-O-Matie
brought an action against Respondent, Sven Tveter, who
had duplicated the Turn-O-Matic ticket dispenser. The ac-
tion was for patent infringement, trademark infringement,
and unfair competition. The District Court held that the
patent on the ticket dispenser was valid and infringed, that
the trademark in question was valid and infringed and that
Tveter had unfairly competed with Turn-O-Matic. While
3
affirming the District Court’s decision of trademark in-
fringement and unfair competition, the Court of Appeals
reversed the trial court and held the patent invalid under
35 USC 103.
B. The Opinions Below.
The trial court made detailed factual determinations for
a decision of obviousness under 35 USC 103 by the test
established by this Court in Graham.’ The District Court
concluded from its factual determinations that the ticket
dispenser would not have been obvious to one skilled in the
art and was, therefore, patentable. The District Court made
a determination if such was required under the law that the
ticket dispenser of the patent produces a synergistic result.
The Court of Appeals seized upon a four sentence ex-
cerpt from the eleven-day trial as supposedly the sole basis
for the trial court’s determination of a synergistic result
and suggested that the synergistic resuli stated there would
accurately describe a simple cellophane tape dispenser.
With its own offhand unsupported determination that the
patented ticket dispenser would not produce a synergistic
result, the Court of Appeals held that lacking a necessary
synergistic result the patent was invalid for obviousness.
REASON FOR GRANTING THE WRIT
A. Summary. ;
Petitioner respectfully submits that this Court should
review the present case to eliminate the conflict among the
Circuits as to the effect of synergism on patentability.
B. The Conflict.
By Section 103 of Title 35 enacted in 1952, Congress has
specified that an inventor is entitled to a patent for his
invention unless that invention would have been obvious,
1. Graham v. John Deere Co., 383 U.S. 1 (1966).
+
at the time the invention was made, to a person of ordinary
skill in the art. This Court in construing Section 103. in
Graham recognized the difficulty for courts in interpreting
what would be “obvious,” and the need for a practical test
for patentability.
Accordingly, this Court set out in Graham? the following
test for determination of patentability in terms of obvious-
ness:
“Under Section 103 the scope and content of the prior
art are to be determined; differences between the
prior art and the claims at issue are to be ascertained;
and the level of ordinary skill in the pertinent art
resolved. Against this background, the obviousness or
nonobviousness of the subject matter is determined.”
Nothing in Section 103 or the test specified in Graham
says anything about synergism or even mentions “syner-
gism.”
Subsequent to Graham, this Court decided Anderson’s—
Black Rock * and Sakraidat While both of these subsequent
decisions mention “synergism,” neither decision states
that synergism is necessary or sufficient to establish non-
obviousness and thus patentability.
There is a split among the Circuits, and even within
certain circuits, as to the effect of “synergism” on a de-
termination of obviousness. Some courts says “synergism”
is necessary to establish patentability; some say “syner-
gism” is unnecessary to establish patentability; and some
say “synergism” is sufficient to establish patentability.
The First Circuit in International Tel. & Tel. Corp. v.
Raychem Corp.’ held that a synergistic effect was the rele-
2. Id. at page 17.
3. yw rhe. ’s-Black Rock v. Pavement Salvage Co., 396 U.S. 57,
(1969).
4. Sakraida v. Ag Pro, Inc., 425 U.S. 273 (1976).
5. 538 F.2d 453, 457 (1st Cir. 1976).
5
vant legal standard for determining patentability and that
the findings established “a sufficient synergistic effect” be-
tween the materials of the article to cross the border line
to constitute patentable invention.
The Second Cireuit impliedly, but not specifically, re-
jected the theory that synergism is necessary to establish
patentability in Champion Spark Plug v. Gyromat Corp.,°
but that Circuit has held that synergism is a sufficient
condition to establish patentability. Digitronics Corp. v.
New York Racing Ass’n Inc.?
The Third Circuit in evaluating synergism as a require-
ment noted the split among the circuits and declined to
rule that synergism is a precondition to patent validity
in all cases. Sims v. Mack Truck Corp.® 3
The Fifth Cireuit on the one hand has stated that only
where there is a synergistic result is the device patentable.
Parker v. Motorola, Inc.® On the other hand, that same
Fifth Cireuit has recited the requirement of a synergistic
result as one of three alternative conditions for determining
patentability. John Zink Co. v. National Airoil Burner Co.”
The Sixth Circuit requires synergism to constitute pat-
entability. Reynolds Metals Co. v. Acorn Bldg. Components,
Inc.™ and American Seating Co. v. National Seating Co.
In its most recent pronouncement in Smith v. ACME Gen-
eral Corp.™ the Sixth Circuit discussed various applica-
6. 603 F.2d 361, 372 (2nd Cir. 1979).
7. 533 F.2d 740, 747 (2nd Cir. 1977) and recently followed in
Leinoff v. Valerie Furs Ltd., 501 F.Supp. 720, 725 (S.D.N.Y. 1980).
8. 608 F.2d 87, 93 (3rd Cir. 1979).
9. 524 F.2d 518, 531-532 (5th Cir. 1975).
10. 613 F.2d 547, 551 (5th Cir. 1980).
11. 548 F.2d 155, 166 (6th Cir. 1977).
12. 586 F.2d 611, 620 (6th Cir. 1978).
18. 614 F.2d 1086, 1093-1095 (6th Cir. 1980).
tions of the synergism test and again applied it-as a re-
quirement for patentability. This circuit also has held
that synergism is a sufficient condition for APR Rees
Hanson v. Alpine Valley Ski Area, Inc.™
The Seventh Circuit rejects the requirement of syner-
gism for establishing patentability. In Republic Industries,
Inc. v. Schlage Lock Co2* the Seventh Circuit made a de-
tailed analysis of the background and application of the
“synergism” test including Anderson’s-Black Rock and
Sakraida before concluding that “synergism” does not com-
port with the Graham mandate to apply Section 103. In
accord: Amp Inc. v. Bunker Ramo Corp.*
While the Eighth Circuit held in Clark Equipment Co. v.
Keller that “synergism” has no talismanic power and is
merely one indication of nonobviousness, that same Court
has more recently held that synergism is one of the require-
ments that the court must look for in determining whether
patents meet the Section 103 requirements of patentability.
Reinke Mfg. Co. Inc. v. Sidney Mfg. Corp.®
The Court in the Ninth Circuit where the present case
arose has required synergism. Astro Music Inc. v. East-
ham,” Penn International Industries v. Pennington Corp.,”
and Herschensohn v. Hoffman.” In a decision just eleven
months before the decision in the present case the Ninth
Circuit examined the split among the Circuits regarding
14. 611 F.2d 156, 160 (6th Cir. 1979).
15. 592 F.2d 963, 971 (7th Cir. 1979).
16. 604 F.2d 24 (7th Cir. 1979).
17. 570 F.2d 778, 789 (8th Cir. 1978).
18. 594 F.2d 644, 648 (8th Cir. 1979).
19. 564 F.2d 1236, 1238 (9th Cir. 1977).
20. 583 F.2d 1078, 1081 (9th Cir. 1978).
21. 593 F.2d 893, 896 (9th Cir. 1979).
-
any requirement of synergism and then sidestepped’ the
issue. Palmer v. Orthokinetics Inc.” |
In the Tenth Circuit the Court in Deere and Co. v.
Hesston Corp.™ and True Temper Corp. v. C F & I Steel
Corp.™ stated that synergism must exist for a valid patent
but in Plastic Container Corp. v. Continental Plastics*™
stated that synergism is not a requirement. In Norfin, Inc.
v. International Business Machines* the Tenth Circuit
acknowledged the conflict within its own circuit but left reso-
lution of the conflict “for a later day.”
The Court of Customs and Patent Appeals in In re
Sponnoble*™ rejected a requirement of synergism for pat-
entability as did the Court of Claims in Bowser, Ine. v.
United States.
From the conflicts even within certain of the Circuits
it is apparent that it is not even possible to make an ac-
curate summary of which Circuits require and which reject
synergism.
Views from Justices of this Court have added to the
conflict. In the published dissent to the denial of certiorari
in Roanwell Corp. v. Plantronics, Inc2* Justice . White,
joined by Justice Brennan, stated that for patentability
“there must be a synergistic result that is itself unobvious,”
citing Anderson’s-Black Rock and Sakraida. This statement
is in sharp contrast with the Seventh Circuit which noted
611 F.2d 316, 324 (9th Cir. 1980).
593 F.2d 956, 962 (10th Cir. 1979).
601 F.2d 495, 506 (10th Cir. 1979).
607 F.2d 885, 904 (10th Cir. 1979).
624 F.2d 357, 365 (10th Cir. 1980).
405 F.2d 578, 585 (CCPA 1969).
. 888 F.2d 346, 349-350 (Ct.Cls. 1967).
429 U.S. 1004, 1006 (1976).
BENEBRER
8
in Republic” that nowhere in Anderson’s-Black Rock or in
Sakraida did this Court hold a synergistic effect to be a
necessary condition of patentability. |
Federal Judges Howard T. Markey,™ Giles S. Rich,”
Jack R. Miller® and William C. Conner. all of whom have
had extensive exposure to patent cases, have written ar-
ticles criticizing a requirement that synergism exist to
establish patentability.
Application of a synergism test suffers right from an
attempt to define the term. “Synergism” is only a figure of
speech and in the literal sense never has existed and never
can exist in mechanical inventions when the term is defined
as a whole result greater than the sum of its constituent
parts.
A more fundamental flaw with the synergism test is that
the test reflects on “obviousness” after the invention was
made rather than “at the time the invention was made” as
specified in Section 103.
This Court is aware of the need for reducing the number
and duration of Federal court cases. Until this Court acts
to clear up the morass surrounding “synergism” as applied
30. Republic Industries inc. v. Schlage Lock Co., 592 F.2d 963,
969 (7th Cir. 1979).
31. Markey, The Synergism Virus: Cause and Cure, 2 Bull.
L.A. Pat. Law Assoc. 2, (Oct. 6, 1980).
32. Rich, Escaping the Tyranny of Words—Is Evolution in
Legal Thinking Impossible?, 60 JPOS 5, pp 271-303 (1978).
33. Miller, Factors of Synergism and Level of Ordinary Skill in
the Pertinent Art in Section 103 Determinations, 8 APLA Journal
4, pp 321-332 (1980). Judge Miller wrote the decisions in the
Champion Case, note 6 supra, and the Plastic case, note 25 supra.
34. Conner, Some Highly Personal Reflections on Section 103,
5 APLA Journal 2, pp 77-86 (1977). Judge Conner stated in his
recent opinion in Brennan v. Mr. Hanger, Inc., 479 F. 1215,
1225 (S.D.N.Y. 1979) that left any choice he would
join the Courts of Appeal for the Seventh and Tenth Cireuits in
expressly repudiating the synergism requirement.
9
in patent cases, the number of lengthy, complex patent
trials and appeals revolving on the application of “syner-
gism” will increase. And it appears clear that sooner or
later this Court will have to speak on this issue.
In order to bring consistent predictability to this branch
of the law and resolve the conflict between the Circuits, we
urge that Petitioner’s Writ be granted and that this Court
strike synergism as a requirement for patentability.
CON ©LUSION
For the reasons stated, a Writ of Certiorari should issue
to review the judgment and opinion of the United States
Court of Appeals for the Ninth Circuit.
Respectfully submitted,
Lrusac#, Limpacn & Surron
By New A. Suir
Attorneys for the Petitioner
Appendix A
Filed December 4, 1980
Richard H. Deane, Clerk, U.S. Court of Appeals
United States Court of Appeals
for the Ninth Circuit
No. 77-2299
D.C. No. C 75 1097 RHS
SVEN TVETER, an individual,
doing business as SGT Enterprises,
Defendant-A ppellant,
Vv.
AB TURN-O-MATIC, a Swedish
corporation, and SCANDUS, INC.,
a California corporation,
Plaintiff s-Appellees.
OPINION
Appeal from the United States District Court
for the Northern District of California
Cecil F. Poole, District Judge, Presiding
Argued and submitted March 13, 1979
Before: BROWNING, Chief Judge, WALLACE, Circuit
Judge, and CURTIS,* District Judge
BROWNING, Chief Judge:
Appellant Tveter produces and distributes “Take-A-
Turn,” a device for dispensing numbered tickets to persons
awaiting service, Appellee AB Turn-O-Matic produces
“Turn-O-Matic,” a similar device performing the same func-
tion. The “Turn-O-Matic” device is distributed in the United
*Honorable Jesse W. Curtis, Senior Judge, United States District
Court for the Central District of California, sitting by designation.
2 Appendix
States by appellee Scandus, Inc. It was first on the market.
The district court held that appellant had infringed appei-
lees’ patent and trademark rights, and that appellant had
unfairly competed with appellees by simulating the appear-
ance of the “Turn-O-Matic” and “palming off” appellant’s
goods as those of appellees.
We reverse in part and affirm in part, concluding that
the “Turn-O Matic” device is unpatentable for obviousness,
but that appellant violated appellees’ trademark rights and
engaged in unfair competition in the marketing of “Take-
A-Turn.”
I.
Appellees’ “Turn-O-Matic” is a commercial embodiment
of Ehrlund U.S. Patent No. 3,885,724, issued May 27, 1975,
for a “Device for Tearing Off Pieces of a Certain Length
from a Strip.” Appellant contends the Ehrlund patent was
invalid under 55 U.S.C. § 103, which permits a patent to
be issued only
if the differences between the subject matter sought to
be patented and the prior art are such that the subject
matter as a whole would have been obvious at the time
the invention was made to a person having ordinary
skill in the art to which said subject matter pertains.
The district court made findings on the factual issues
identified in Graham v. John Deere Co., 383 U.S. 1, 17
(1966), as relevant to the determination of obviousness
under section 103: (1) the scope and content of the prior
art; (2) the differences between the prior art and the
claims at issue; and (3) the level of ordinary skill in the
pertinent art.
The district court concluded that the device disclosed by
the Ehrlund patent would not have been obvious to one
Appendiz 3
skilled in the art and was therefore patentable—a conclu-
sion of law. Sakraida v. Ag Pro Inc., 425 U.S. 273, 280
(1976).
In defending the court’s findings and conclusion, appel-
lees argue that because of the statutory presumption of
validity, 35 U.S.C. § 282, appellant bore “the heavy burden
of persuasion by ‘clear and convincing’ proof of the alleged
obviousness of the patented invention.”
The presumption of non-obviousness over the prior art
rests upon the assumption that the patent examiner com-
pared the claims with the prior art. The examiner did not
have before him Ingram No. 1,704,044, Burr & Davis No.
843,579, Osborn Nos. 3,173,601 and 3,229,876, Williams No.
3,098,594, Belouc. No. 2,361,528, Kingsbury No. 1,983,463,
and Suk No. 1,575,081. As indicated below, these prior pat-
ents contain disclosures closer to Ehrlund’s device than
those found in the patents considered by the examiner. This
circumstance dissipated the presumption of validity. The
burden of proof with respect to non-obviousness remained
with appellees as claimants under the patent. Photo Elec-
tronics Corp. v. England, 581 F.2d 772, 775 (9th Cir. 1978) ;
Deere & Co. v. Sperry Rand Corp., 513 F.2d 1131, 1132 (9th
Cir. 1975) ; Hewlett Packard Co. v. Tel-Design Inc., 460 F.2d
625, 628 (9th Cir. 1972).
The district court’s findings as to the content of the prior
art are not in question. The court treated all of the prior
patents relied upon by appellant as pertinent prior art.
The district court’s findings as to the differences between
the prior art and the patented device consist primarily of
listings of one or more respects in which a particular device
disclosed in a particular prior art patent, separately con-
1. See note 6, infra.
> |
4 Appendix
sidered, differed from the device disclosed in the Ehrlund
patent. The differences are largely semantic—often relating
more to the label attached to a particular element than to
its function.? In any event, the fact that each prior patented
device differed in one or more respects from the Ehrlund
device establishes only that the latter was not “identically
disclosed or described” in previous patents, thus satisfying
section 102 of Title 35. This is not enough to satisfy the
requirement of section 103 that a patentable device disclose
a non-obvious advance over the whole of the pertinent prior
art.
Nor is the non-obviousness requirement satisfied simply
because the article sought to be patented differs from the
pertinent prior art taken as a whole. “[T]he mere existence
of differences between the prior art and an invention does
not establish the invention’s nonobviousness. The gap be-
tween the prior art and [the invention must be sufficiently]
great as to render the system nonobvious to one reasonably
skilled in the art.” Dann v. Johnston, 425 U.S. 219, 230
(1976).
The district court found that the “skill of the average
man in this art includes mechanical knowledge, knowledge
of materials, and properties of materials, a mechanical abil-
ity to see how things fit together, and probably exposure to
earlier model dispensers.” (Emphasis added). The empha-
sized phrase suggests a misapprehension of the law. There
can be no doubt that the test for patentable invention is
whether the innovation would have been obvious to a person
of ordinary skill charged with complete knowledge of all
pertinent prior developments, however much universal
knowledge might exceed the knowledge actually possessed
by the ordinary workman in the art. Walker v. General
2. See note 7, infra.
;
Appendix 5
Motors Corp., 362 F.2d 56, 60 n.3 (9th Vir. 1966). Since.
such compendious knowledge is at best unlikely, in the usual
case the inquiry must be hypothetical.
The district court’s findings recite testimony by the
alleged inventor and by two experts that the patented device
would not have been obvious either to them or to a person
of average skill in the art even had they known of the
prior art cited by appellant. Such testimony is of little value.
“Obviousness” is not a simple factual conclusion drawn
from the subsidiary findings of fact as a matter of ineluc-
table logic. “Obviousness” is a question of law, Sakraida v.
Ag Pro Inc., swpra, 425 U.S. at 280, a legal concept embody-
ing the constitutional standard of invention.
An innovation is not necessarily patentable because it
results in greater convenience and utility. To be patentable,
an innovation must embody “invention”; and “invention”
excludes adjustments, alterations, and improvements that
could be expected to result from the exercise of the skill
and ingenuity of a mechanic charged with knowledge of all
that is: disclosed in prior art. This is the exclusion expressed
in section 103’s requirement that the innovation must not
be “obvious” to such a person. Sakraida v. Ag Pro Inc.,
supra, 425 U.S. at 279.
The level of innovation required for patentability is
especially high where the device is a combination of old
elements, as here. Such a “mechanical combination must
utilize a new principle or achieve a new result to cause it
to rise to the status of invention.” SSP Agricultural Equip-
ment, Inc. v. Orchard-Rite Ltd., 592 F.2d 1096, 1101 (9th
Cir. 1979). “The conjunction or concert of known elements
must contribute something; only when the whole in some
way exceeds the sum of its parts is the accumulation of old
devices patentable.” Great Atlantic & Pacific Tea Co. v.
6 Appendiz
Supermarket Equipment Corp., supra, 340 U.S. at 152.
There must be “unusual or surprising consequences from
the unification of the elements”; the old elements must per-
form an “additional or different function in the combina-
tion than they perform out of it.” Jd. As we have repeatedly
said, this is a “severe test.” See, e.g., Rigimbal v. Scyman-
sky, 444 F.2d 333, 339 (9th Cir. 1971); Santa Anita Manu-
facturing Corp. v. Lugash, 369 F.2d 964, 967 (9th Cir. 1966) ;
Bentley v. Sunset House Distributing Corp., 359 F.2d 140,
144 (9th Cir. 1966). “Mechanical patents covering a combi-
nation of old elements must be scrutinized with care, since
it is unlikely that such combinations will amount to patent-
able invention.” SSP Agricultural Equipment, Inc. v. Or-
chard-Rite Ltd., swpra, 592 F.2d at 1101.
The Ehrlund “Turn-O-Matic” contains a roll of paper
tickets numbered consecutively. The tickets are divided by
a punched or perforated line across most of the width of
the strip, leaving an uncut margin on both sides. The per-
forated or punched line is curved or angled toward the
user at midpoint. As a ticket is pulled, it passes over a
projecting flange having the same width as the flap or
tongue. Downward pressure on the tape brings the uncut,
unperforated margins of the tape in contact with cutting
edges at each side of the flange, separating the ticket. The
flap or tongue of the succeeding ticket, held level by the
flange, projects from the dispenser for the next user to
grasp.
Appellees’ claim of inventive difference in the Ehrlund
device “is the guidance structure that cooperates without
moving parts with the forwardly directed ticket tongue or
flap to dispense intended tickets in a one-hand, one-step pull-
ing operation in which the end ticket is separated from
the roll leaving the ticket tongue of the succeeding ticket
Appendix 7
protruding from the dispenser ready to pull the next tic-
ket.” Appellees’ Brief, page 16.
Devices for severing and dispensing sheet material in
predetermined lengths are old.’ Such devices commonly dis-
close means for guiding the material over a cutting edge
for separation.* Several employ a one-hand, one-step oper-
ation and have no moving parts.®
In the final analysis, appellees’ argument for patentability
over the prior art rests upon the interaction between the pro-
jecting flange and a ticket strip having flaps or tongues
pointed in the feeding direction of the strip. Brief for Ap-
pellees, page 31. This development is not inventive over
Burr & Davis, No. 843,579 (1907), in light of Beloud No.
2,361,528 (1944), or over the so-called “Baggie” patents, Os-
born Nos. 3,173,601 (1965) and 3,229,876 (1966) and Wil-
liamson No, 3,098,594 (1963).°
3. Burr & Davis No. 843,579 (“Means For Holding and Detach-
ing Ribbon Strip Labels”) (1907); Ingram No. 1,704,044 (“Dis-
pensing and Severing Device for Rolled Strip Material’) (1929);
Beloud No. 2,361,528 (“Device to Sever Paper Sales Tax Slips’’)
(1944); Williamson No. 3,098,594 (“Container For Shipping,
Storing and Dispensing Sheet Material in Predetermined Lengths”)
(1963) ; Osborn No. 3,173,601 (“Dispensing Sheet Material in Pre-
determined Lengths”) (1965); Osborn No. 3,229,876 (“Dispensing
Sheet Material in Predetermined Lengths”) (1966).
4. Burr & Davis No. 843,579; Ingram No. 1,704,044; Beloud
No. 2,361,528.
5. Burr & Davis No. 848,579; Williamson No. 3,098,594;
Osborn No. 3,173,601; Osborn No. 3,229,876.
6. None of these references was cited by the examiner, who
relied instead upon four less pertinent patents. Borden No.
2,221,213 (1940) discloses a dispenser permitting the user to tear
off a piece of any length desired from a roll of adhesive tape. Burez
No. 3,007,619 (1961) discloses a similar dispenser for thick tapes
that are difficult to tear, such as plastic electricians’ tape. Kunsch
No. 3,088,640 (1963) is a variation of the standard aluminum foil
box, having several large teeth on the cutting edge so that foil may
8 Appendix
Burr & Davis No. 843,579 (“Means for Holding and De-
taching Ribbon Strip Labels”) discloses a rolled ribbon,
divided into individual labels by perforated lines, wound
inside the machine. The perforated cloth strip is pulled out
and down over a frame or flange causing the perforations
to tear, beginning in the center of the perforation, until a
single label is separated.” The outer casing or cover of the
device has an inward curve over the flange that exnoses a
tongue-shaped portion of the succeeding label resting on the
flange. By pulling this exposed tongue out and down over
the flange, the next user ms, detach a label with a single
motion. Burr & Davis cuts fxom the «enter rather tnan at
the sides, and the next ticket, though exposed, does not pro-
trude. But cutting at the sides and protrusion are found in
Beloud No. 2,361,528, a dispenser described as
leaving a portion of the next section of the material
visible and accessible, in order to allow the operator
to withdraw the material to the desired position which
will permit a section to be separated from the main
body of the material and to repeat the operation at
will.
Under the “Baggie” patents, a rolled sheet of bags or
plastic, divided by perforations, is drawn from a container
be either torn off or perforated, or both, at any intervals desired.
German Application Disclosure No. 1,218,492 (German Federal
Republic 1966) discloses a device for separating punched data
processing tape and at the same time marking the direction in
which the tape is traveling.
7. The district court found that Burr & Davis No. 843,579
“does not disclose a flange for temporarily arresting movement of
the ticket tongue that is directed in the feeding of the strip as
specified in’ the Ehrlund patent. Whether or not any portion of
the projecting separation edge of the Burr & Davis device is called
a “flange,” the Burr & Davis patent discloses a guiding means
that arrests the tape, allowing separation. Similar semantic dis-
tinction clouded the district court “erp as to Beloud No.
2,361,528 and the “Baggie” patents, all of which disclose arresting
mechanisms.
Appendix ‘9
across a cutting edge having a vertically projecting section
at the center. When the perforated line is pulled over this
projection or flange, the perforations tear and the forward
motion of the next bag is arrested by the flange. Continued
pulling completes the separation. The patent description
specifies that after each bag is removed its successor pro-
trudes:
During the act of severance, some small distortion of
the sheet material takes place whereby the severed
portions thereof on opposite sides of the arresting tab
extend outwardly and the corner extremities are sup-
ported upon the angular edges of the guide tabs and
thus restrained against dropping within the container
and out of reach. In this manner the material of the
roll (or otherwise packaged material) remains avail-
able for convenient grasping whereby withdrawal and
severance of the next successive length may be accom-
plished.
Appellant argues that the Baggie device requires the
user to lift the next bag over the projecting flange before
it can be removed. This problem could be solved by qurving
or angling the line of perforations between bags to/produce
one or more tabs or tongues. Appellant recognizes that
“Ta] major difference between this prior art and the claims
of the Turn-O-Matiec patent is the construction of the ticket
strip recited in the Turn-O-Matic claim.”
_ Because the description of the ticket strip is found in the
preamble rather than in the body of the claims of the
Ehrlund patent,® the parties debate whether it is an element
8. Claim 1 of the Ehrlund patent, for example, reads:
A device for tearing off pieces of the same predetermined
length from a roll of fed flexible strip, said strip having
punched lines forming tongues equally spaced along said strip
with their spacing equal to said predetermined length and
10 Appendiz
of the combination claimed by Ehrlund.® It is unnecessary
to resolve the issue. Based on the record before us, the
essentials of the strip’s construction are in any event old
in the art. Suk No. 1,575,081 (1926) claims:
A record strip comprising a signal [sic] oblong
length of flexible fibrous material having equally
spaced portions thereof scored transversely to pro-
vide a series of detachable sections, the scoring be-
tween adjacent sections extending along an irregular
shaped line so that each section upon detachment will
have at one end a projecting tongue.
Appellees contend the Ehrlund device meets the not
“obvious” standard because the combination of old elements
is “synergistic”, i.e., “result{[s] in an effect greater than
directed in the feeding direction for said strip, whereby the
portion of each tongue which is firmly connected to the re-
mainder of the strip is perpendicular to the longitudinal
direction of the strip, said device comprising a casing for said
strip roll, said casing having side walls and an open top, a
cover pivotally connected to said casing and closing said top,
said cover having an outwardly extending portion, another
portion integral with the first-mentioned portion and extend-
ing in a downwardly direction relatively to the cover, said
casing having a portion extending substantially parallel to the
first-mentioned portion but spaced therefrom to form a gap
for the passage of the strip out of the casing, a flange for
temporarily arresting movement of said tongue in with
the third-mentioned portion and extending close to the second-
mentioned portion but spaced therefrom to form a gap for the
continuing passage of the remainder of the strip, and tear-off
portions on either side of said flange connecting the base of
said flange to the side walls of the casing arranged for the
cut-off to the remainder of the strip.
(Emphasis added.)
9. Marston v. J. C. Penney Co., 353 F.2d 976, 986 (4th Cir.
1965); Stradar v. Watson, 244 F.2d 737, 741 (D.C. Cir. 1957);
Kropa v. Robie, 187 F.2d 150 (C.C.P.A. 1951). Appellant comes
close to arguing that the tape is part of the claimed combination for
the purpose of determining validity but not for the purpose of
determining infringement, a position forced upon them by the fact
that appellees did not manufacture or distribute the tape itself.
*>
Appendix ll
the sum of the several effects taken separately.” Anderson’s
Black Rock v. Pavement Co., 396 U.S. 57, 61 (1976). Appel-
lees cite the following exchange with their expert witness:
Q. In your opinion, does the device of the patent
produce a synergistic result?
A. Yes, it does, indeed. As I have already described
it, it permits several things to happen at the same time.
That is it permits a ticket, a single ticket, to be dis-
pensed with one hand without moving parts other than
the ticket strip itself in the casing, and in such a way
that the next ticket is not touched by the person who
pulls off the previous ticket, or anyone else for that
matter.”
This description accurately mirrors Borden’s 1940 patent
(No, 2,221,213) for a simple cellophane tape dispenser,
cited as prior art by the patent examiner.
The Ehrlund combination is an improvement over pre-
vious devices in this field, “perhaps producing a more strik-
ing result,” Sakraida v. Ag Pro Inc., supra, 425 U.S. at 282.
But it does not reflect the application of a new principle
or the achievement of a surprising or unexpected result
required to satisfy the severe test for patentability of a
new combination of elements old in the art.
The projecting flange temporarily arrests the movement
of the tape, separates the tongue from the tape, and guides
the tongue horizontally toward the user as in Burr & Davis,
the cutting edge severs the tape at the sides as in Beloud,
the tongue of the succeeding ticket serves as a handle for
the next user to grasp as in Suk, the elements combine to
permit a single segment of the tape to be dispensed with a
one-step pulling operation, without moving parts, as in
Burr & Davis and the Baggie structure.
As we said in Kamic-Autokomfort v. Curasian Automo-
bile Products, swpra, 553 F.2d at 609, quoting our earlier
12 Appendiz
decision in Rex Chaindelt Inc. v. Harco Products, Inc., 512
F.2d 993, 1000 (9th Cir. 1975): “What we have here is:
‘an improved product but not an innovatively different one
. » » [W]e see the development and refinement of an old
concept . . . but not an inventive or new approach to the
problem.’ ”
The commercial success of the Ehrlund device “cannot
fill the gap.” Exer-Genie, Inc. v. McDonald, 453 F.2d 132
(9th Cir. 1971). See SSP Agricultural Equipment, Inc. v.
Orchard-Rite, Ltd., supra, 592 F.2d at 1101.
II.
Trademark Infringement and Unfair Competition
The district court’s holding that appellant’s use of the
name Take-A-Turn infringed appellees’ registered Turn-Q-
Matic trademark and that appellant had engaged in unfair
competition by “palming” off appellant’s dispenser as that
produced by appellee are factually and legally unassailable.
Appellant was a distributor of appellees’ Turn-O-Matic
ticket dispenser in an assigned territory for over seven
years. He became dissatisfied with the relationship. When
appellee introduced its new dispenser based upon the
Ehrlund patent, appellant set about to copy it. In less than
a month he had obtained quotations for the manufacture
of a like dispenser from a producer of plastic products, He
continued to distribute appellees’ Turn-O-Matic until his
dispenser became available. About a year later appellant
began distributing his dispenser under the name Take-A-
Turn. Appellant’s dispenser is virtually identical with ap-
pellees’ Turn-O-Matic in operation, and is almost indistin-
guishable in appearance, even to the distinctive red color
and the location and type-style of the trade name. Appel-
Appendiz 13
lant’s advertising brochure for Take-A-Turn was copied
from appellees’ Turn-O-Matie brochure. Appellant em-
ployed the same stock number he had previously used in the
sale of Turn-O-Matic dispenser and parts. He sold the
Take-A-Turn dispenser in the same territory in which he
had previously sold the Turn-O-Matic, and to the same cus-
tomers. Customers ordered Turn-O-Matie by name but
were delivered Take-A-Turn.
Appellees’ evidence fully supported the district court’s
findings that appellant’s Take-A-Turn trademark was
likely to and did cause confusion, mistake, and deception as
to the origin of the dispenser, that the appearance of ap-
pellees’ dispenser, copied by appellant, had acquired a sec-
ondary meaning identifying appellant as its source, and
that appellant deliberately intended to pass his goods off
as those of appellee. As a matter of hornbook law, these
facts established both trademark infringement and unfair
competition.
Appellant argues that “Turn-O-Matie” is descriptive of
the use of appellees’ dispenser and is therefore a “weak”
mark. Appellees respond that the mark has become “incon-
testable” under 15 U.S.C. § 1065, and therefore cannot be
challenged on the ground that it is descriptive, Appellant
answers that he is not challenging the validity of appellees’
mark but is asserting that because of the weakness of the
mark there is no likelihood of confusion. The short answer
is that even if this factor had the probative tendeney appel-
lant suggests, it was overwhelmed by appellees’ evidence
that confusion was likely, intended, and occurred.
Appellant argues that because the name “SGT Enter-
prises” (under which Tveter conducted business) was
printed on appellant’s dispenser there could have been no
confusion as to source. Although proper labeling will usu-
14 Appendiz
ally preclude confusion, see American Rolex Watch Corpo-
ration v. Ricoh Time Corp., 491 F.2d 877, 879 (2d Cir. 1974) ;
Bose Corp. v. Linear Design Labs, Inc., 467 F.2d 304, 310
(2d Cir. 1972), the overwhelming evidence in this instance
is that confusion did occur. Appellant cites West Point
Manufacturing Co. v. Detroit Stamping Co., 222 F.2d 581
(6th Cir. 1955), but in that case the court found the label-
ing was in fact sufficient “to avoid confusing the public as
to the producer or the source of the product.” Id. at 596.
The court recognized that “when the imitation is likely to
deceive prospective customers who care about source...
the imitator is guilty of unfair competition.” Id,
Appellant was known in the trade as a distributor of
appellees’ product. Under such circumstances, the addition
of his own label “is an aggravation and not a justification.”
Menedez v. Holt, 128 U.S. 514, 521 (1888); see A. T. Cross
Co. v. Jonathan Bradley Pens, Inc., 470 F.2d 689, 692 (2d
Cir. 1972).
There was evidence that appellees used the mark ‘Turn-
O-Matic” on their earlier dispenser together with the words
“Patent Pending” when no patent application on this dis-
penser was in fact pending. Appellant argues that this
misuse bars judicial enforcement of appellees’ trademark
rights. But “misconduct in the abstract, unrelated to the
claim to which it is asserted as a defense, does not consti-
tute unclean hands.” Republic Molding Corp. v. B.W. Photo
Utilities, 319 F.2d 347, 349 (9th Cir. 1963). “What is ma-
terial is not that plaintiff’s hands are dirty, but that he
dirtied them in acquiring the rights he now asserts, or
that the manner of dirtying renders inequitable the asser-
tion of such rights against the defendant.” Ibid. No rela-
tionship is suggested between appellees’ asserted misuse
and the acquisition of appellees’ trademark rights; no other
Appendix 15
reason, arising out of the misuse, is advanced that would
make it inequitable to enforce those rights.
Appellant argues that since appellees’ dispenser was not
patentable, appellant had a right to copy it in light of
Sears, Roebuck & Co. v. Stiffel Co., 376 U.S. 225 (1964) ;
and Compco Corp. v. Day-Brite Lighting, Inc., 376 U.S.
234 (1964). Under the rule of these decisions, ‘however,
copying may constitute evidence which, when accompanied
by proof of confusion as to source or deliberate palming
off, as in this case, may support a cause of action for unfair
competition upon which appropriate relief may be founded.
Compco Corp., supra, 376 U.S. at 238.
TTT.
Remedy
The judgment and the injunction issued pursuant to the
judgment must be modified in light of our decision that
the Ehrlund United States Patent 3,885,724 is invalid; that
the trademark “Turn-O-Matic” is valid and infringed by
the mark “Take-A-Turn”; that the configuration of appel-
lees’ dispenser has acquired a secondary meaning reflective
of its source, and that appellant has engaged in unfair
competition by passing off appellant’s dispenser as orig-
inating from the same source as appellees’ dispenser.
These adjustments are best left initially to the district
court, but it may be helpful to comment upon two matters.
First, it is clear from the decisions in Sears, Roebuck &
Co. v. Stiffel Co., swpra, and Compco Corp. v. Day Brite
Lighting, Inc., swpra, that an injunction against copying
the configuration of appellees’ dispenser cannot be based
upon California unfair competition law. This does not, .
however, preclude an injunction under state law that will.
"16 | Appendix
prevent the palming off of appellant’s product as that of
appellees, nor an injunction requiring that appellant’s
product “be labeled or that other precautionary steps be
taken to prevent customers from being misled as to the
source.” Sears, Roebuck & Co., supra, 376 U.S. at 232. See
generally, Cal. Civ. Code § 3369, Tomlin v. Walt Disney
Productions, 18 Cal. App. 3d, 226, 231-235, 96 Cal. Rptr.
118, 120-123 (Ct. App. 1971); Components for Research,
Inc. v. Isolation Products, Inc., 241 Cal. App. 2d 726, 730-
731, 50 Cal. Rptr. 829, 832 (Ct. App. 1966).
The more difficult question is whether Sears and Compco
preclude an injunction based upon § 43(a) of the Lanham
Act, 15 U.S.C. § 1125(a) against copying the exterior de-
sign insofar as it incorporates nonfunctional features and
has acquired a secondary meaning. See Truck Equipment
Service Co. v. Freuhauf Corp., 536 F.2d 1210 (8th Cir.
1976) ; American Rolex Watch Corp. v. Ricoh Time Corp.,
supra, 491 F.2d at 879. The district court should recon-
sider this question free of the distracting assumption that
an injunction against copying appellees’ device was in any
event justified because of infringment of the Ehrlund
patent. Even if such an injunction would not be barred
by Sears and Compco, it could not be so broadly drawn as
to preclude appellant from using a circular casing to en-
close the circular roll of tickets, a common and essentially
utilitarian feature of tape dispenser designs. See Applica-
tion of Honeywell, Inc., 5382 F.2d 180, 182-83 (USCCPA
1976).
Second, the provision: of the injunction requiring appel-
lant to deliver up for impoundment and destruction device
\and materials infringing the Ehrlund patent or the “Turn-
O-Matic” trademark will require reconsideration and
ee modification for the same reasons. In addition, however,
ry Lat
\ ‘ipeee “f°
Appendiz 17
appellant contends this provision exceeds the pretrial stip-
ulation of the parties that “[o]nly the remedy of injunction
is sought.” Appellant objects on similar grounds to the
requirement that appellant notify future customers that
he does not sell products under the marks “Turn-O-Matic”
and “Take-A-Turn.” But orders for impoundment or de-
struction and for issuing remedial notices are no less in-
junctive because they impose affirmative requirements to
act. Neither provision imposes liability “for damages,
costs, and attorney’s fees” in contravention of the parties’
agreement.
U.S. Letters Patent No. 3,885,724 is declared invalid.
The judgment and injunction are vacated and the cause
remanded for further proceedings consistent with this
opinion. .
“y
18 Appendix.
Appendix B
United States Code, Title 35—Patents
‘Section 103. Conditions for patentability; non-obvious
. subject matter. 3 3
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 mat-
ter sought to be patented and the prior art are such that
the subject matter as a-whole would have been obvious at
the time the invention was made to a person having or-
dinary skill inthe art to which said subject matter pertains.
Patentability-shall not be negatived by the manner in which
the invention was made.
APPENDIX C. 19
Opinion.
United States District Court, Northern
District of California.
AB Turn-o-matic & Scandus, Inc., Plain-
tiffs, v. Sven Tveter & SGT Enterprises,
Defendants. Civil Action No. C-75-1097CFP.
AB Turn-o-matic, Plaintiffs, v. Henry
Nakagawa, et al, Defendants. Civil Action
No. C~75~-1844CFP.
Filed: April 29, 1977.
Magistrate's Determination and Order.
. Defendants' Objections to Magistrate's
Findings and Recommendations, having been
referred to Magistrate Woodruff in view of
the Order Setting Trial filed October 28,
1976 which was stipulated to by the par-
ties and which provides that the find-
ings and conclusions reached by Magistrate
Woodruff shall be the findings and con-
clusions of this court and shall be adopted
by this court and having come on for hear-
ing before the Magistrate April 26, 1977
and the Magistrate having been apprised
of the matter and having considered the
briefs and argument of counsel for both
parties, it is
Recommended :
Defendant's Objections to Magistrate's
Findings and Recommendations be denied
with the exception that:
-l. Finding of Fact #92 be deleted;
2. Conclusion of Law #85 shall be
so ' < manufacture, use or sale
| RR dispens¢r. found to be
20 Appendix
3. Conclusion of Law #86 shall be
changed so that subparagraphs "(a)" and
"(b)" shall read:
"a) defendants be required to de-
liver up to the U.S. Marshall of
this court for impounding under
the court's control all of the
devices infringing U.S. Patent No.
et dispensers and the molds there-
4 for and then for destruction upon
the judgment in this case becoming
final. If the court of last resort
determines that any or all of the
impounded goods shall be returned
to defendants, the Marshall shall
return the goods to defendants
as so determined; otherwise, on
notification through the attorneys
for both parties that the judgment
is final, the Marshall shall des-
troy the goods."
"b) defendants be required to de-
liver up to the U.S. Marshall of
this court for impounding all de-
vices, literature, advertising
and other material bearing the
TAKE-A-TURN mark or any trademark
which closely simulates pilaintiffs'
mark TURN-O-MATIC, or which other-
wise unfairly compete with plain-
tiffs and then for destruction upon
the judgment in this case becoming
final. If the court of last re- —
sort determines that any or all of
the impounded goods shall be re- ”
turned to defendants, the Marshall
shall return the goods to de-
fendants as so determined; other-
wise, on notification through the
—
we
Appendix 21
attorneys for both par-
ties that the judgment is
final, the Marshall shall
destroy the goods."
April 29, 1977.
OWEN E. WOODRUFF, JR.
United States Magistrate
22 Appendix
United States District Court, Northern
District of California.
AB Turn-o-matic, et al, Plaintiffs v.
Sven Tveter, et al, Defendants. No. C-75-
1097 CFP. (& companion action C-75-1844 CFP).
Date Lodged: March 8, 1977.
Magistrate's Findings.
These two related cases which were con-
solidated for trail have been referred to
the Magistrate's Court by the Hon. Cecil F.
Poole to conduct an evidentiary hearing as
to all issues and at the completion there-
of to make recommendations as to appropri-
ate findings of fact and conclusions of
law.
_Trail commenced on Monday, November 29,
1976 and continued intermittently through
Wednesday, January 26, 1977.
The Magistrate having heard the evi-
dence in the case and having reviewed the
files makes the following general obser-
vations:
The device in question is a machine
which enables the user to pull a numbered
ticket from a container and in this fashion
establish his position in sequence. There
are a variety of machines working on sev-
eral different principles which enable the
user to take a single ticket with a num-
ber on it. Some devices have a handle
that cuts the ticket off, others have a
pull and tear procedure.
Plaintiff invented a machine of the
latter variety which he called the TURN-
O-MATIC. The defendant Sven Tveter worked
as a sales representative for the plaintiff
selling plaintiffs’ patented device in an
area generally west of the Mississippi
River.
In the course of events plaintiff and
> =
Appendix 23
defendant came to a parting of the ways
and within approximately thirty days there-
after the defendant brought out on the
market a competing machine which he gave
the name TAKE-A-TURN.
From my study of the evidence and after
hearing the witnesses testify I am satis-
fied that the defendant Sven Tveter went
to Henry Nakagawa and had Nakagawa dupli-
cate the plaintiff's machine. Thereafter
defendant Sven Tveter openly sold this
. copy as his own all to the detriment of
the plaintiff.
In brief summary this is what the case
is all about and this is the way I see
the evidence. I directed counsel for
both sides to prepare findings of fact and
conclusions of law supported by record
references to the transcript. Having
heard their final arguments and having
reviewed their proposed findings and con-
clusions, I recommend that the Court
adopt the proposed findings of fact and
conclusions of law as submitted by the
plaintiff. (TAB A) Defendant's pro-
posed findings and conclusions which I
reject are attached. (TAB B)
Respectfully submitted,
OWEN E. WOODRUFF, JR.
United States Magistrate
Dated: March 8, 1977.
24 Appendix
United States District Court, Northern
District of California.
AB Turn-O-Matic, et al, plsinki een. Vv.
Sven Tveter, et al, Defendants. No. C=-75-
1097 CFP.
AB Turn-O-Matic, Plaintiff, v. Henry
Nakagawa, et al, Defendants. No. C-75-
1844 CFP.
Findings of Fact and Conclusions of Law.
This action having been tried upon the
facts by the Court without a jury, the
Court does hereby find the facts and
states its conclusions of law thereon,
as follows:
FINDINGS OF FACT.
A. Nature of the Actions.
1. The first of these actions was
brought by plaintiff AB Turn-O-Matic and
Scandus Inc. charging Sven Tveter and SGT
Enterprises among other things with
infringement of U.S. Letters Patent No.
3,885,724; infringement of the trademark
“TURN-O-MATIC" registered with the United
States Patent Office, No. 776,575 and
registered with the Secretary of State of
the State of California, No. 53020 and
unfair competition under Federal and
California law. Defendants answered de-
nying infringement and unfair competition
and asserted affirmative defenses and a
counterclaim. (PT. 0. pg. 2=3)*.
an
Reference will be made to the record by
page as "pg.", by line as "ln.", by para-
graph as "4", as "PT.O." for the Pre
Trial Order, by the witness' name followed
by the page of the trial transcript for
recorded testimony, as "Pl. Ex." for
plaintiffs’ exhibit and as "Def. Ex." for
defendants' exhibit.
Appendix 25
2. Subsequently, plaintiff AB Turn-0-
Matic brought an action against Henry
Nakagawa and Industrial Plastic Products,
Inc. for infringement of U.S. Letters
Patent 3,885,724. These defendants an-
swered denying infringement and asserted
affirmative defenses (PT. 0. pg. 4).
3. The separately filed actions were
consolidated for trial by stipulation.
The parties amended the pleadings to dis-
miss with prejudice causes of action and
counterclaims other than those referred to
above, and prayers for damages, costs and
attorney fees. As a result, the trial
was limited to the issues of patent
validity and infringement, trademark
validity and infringement and unfair com-
petition, and only the remedy of injunc-
tion was sought. (Pt. 0. pg. 4).
B. The Parties
4. Of the plaintiffs, AB Turn-O-Matic
is a Swedish corporation having its prin-
cipal place of business in Sundbyberg,
Sweden, and Scandus, Inc., is a California
corporation having its principal place of
business in Mountain View, California
(hereinafter sometimes "Scandus").
(Pt.O.pg. 5 qs 2-3). Turn-O-Matic has a
Swedish subsidiary, export corporation,
AB Scandus (Ericson pg. 577 lns. 7-16).
5. Of the defendants, Sven Tveter is
an individual residing in Saratoga, Cal-
ifornia, and is doing business as SGT
Enterprises in Santa Clara, California
(hereinafter sometimes "Tveter"), and
Henry Nakagawa (hereinafter sometimes
"Nakagawa") is an individual residing in
San Carlos, California, and is President
of Industrial Plastic Products, Inc., a
California corporation having its prin-
cipal place of business in San Carlos,
wt 3S
Cat
26 Appendi:
California which is doing business as Pro-
deco (hereinafter sometimes "Prodeco").
(Pt.0. ps. 5, qs 4-5).
C. Marketing of the TURN-O-MATIC
Products.
6. Plaintiff, AB Turn-O-Matic has,
since at least the early 1960's, been, and
presently remains, in the business of mar-
keting in the United States a waiting cus-
tomer numbering system. (Ericson, pgs.
576-577).
7. Between 1963 and January, 1973, AB
Scandus was the marketing arm for the
products of AB Turn-O-Matic in the United
States. -(Pt.0. pg. 5 4 6). In January,
1973, Scandus, Inc. became exclusive mar-
keting agent and representative of AB
Scandus and thus AB Turn-O-Matic in the
United States. Stig Ericson, who had
served as a consultant to AB Scandus from
1963 to 1973, is President of Scandus, Inc.
(Pt.O. pg. 6 ¥ 7; Ericson, pg. 576 ln. 28-
pg. 577. in. 13).
8. The waiting customer numbering sys-
tems of AB Turn-O-Matic are designed for
use at sales and service counters to dis-
pense sequentially numbered tickets to
customers to determine the order of ser-
vice of the customer. The products of
this numbering system include the ticket
dispensers, strip rolls of sequentially
numbered tickets, and a number indicator
for showing the number of the customer
being waited on. (Ericson pg. 577 ln. 7-
21; Pl. Exs. 7B, 8, 10, 13, 23B, 42, 42A).
9. In its customer numbering system
from 1963 up to 1974, AB. Turn-O-Matic was
marketing first through AB Scandus and
then through Scandus, Inc. a ticket dis-
penser which is now designated the
Appendix 27
"Classic" model dispenser. (Pt.0. pgs. 6
q8; Pl. Ex. 7B). The "Classic" ticket dis-
penser was and is regarded as a reliable
ticket dispenser; there are more TURN-O-
MATIC "Classic" model dispensers on the
market than any of the other hand oper-
ated ticket dispensers. (Ericson, pg.
585 ln. 15 - pg. 586 ln. 18; Graham, pg.
417 lns. 8-19). However, the "Classic"
was constructed of a rather larger number
of parts, i.e., forty-six different plas-
tic and metal parts. (Ericson, pg. 595,
lns. 1-6). Also, when "Classic" model
tickets were used in that dispenser,
jamming of the tickets occasionally
occurred as they were pulled from the dis-
penser. (Ehrlund, pg. 105 lns. 5-10).
The construction of the "Classic" ticket
dispenser is disclosed in British Patent
No. 841,034. (Ehrlund, pg. 115, ln. 20 -
pg. 116, ln. 3).
10. In the use of the TURN-O-MATIC
"Classic" customer numbering system, the
customer grasped an exposed portion of
the leading ticket of a roll of tickets
contained in the dispenser. On the roll
transverse perforations equally spaced
along the length of the strip roll de-
fined the separate tickets. (Ehrlund,
pg. 231 Ins. 1-15). A notch at the
corner of each ticket cooperated with a
latch mechanism in the "Classic" dis-
penser so that after each ticket had
been pulled from the dispenser, the latch
mechanism would hold back the ticket strip
beginning with the next ticket so that
continued pulling action on the lead
ticket would cause the ticket to tear
from the remaining strip. (Ehrlund, pg.
104 Ins. 7-10, pg. 231 ln. 16 = pg. 232
ln. 2; Pl. Exs. 7B, 8, 106). The number
on the torn ticket in the sequence of
28 Appendix ai
numbers on the tickets in the roll would
establish the order of service or the cus-
tomer. As service for each customer at
the counter was completed, the service
person would advance the number showing
on the number indicator, usually hanging
on the wall, thereby indicating the num-
ber of the person next in order for
service. (Ericson, pg. 579 ln. 7 = p. 580
ln. 7; Pl. Exs. 8, 42, 42A).
ll. AB Turn-O-Matic has identified its
business and products to the public by
the trade name and trademark "TURN-O-
MATIC", and AB Turn-O-Matic presently so
identifies itself and its products.
(Ericson, pg. 577 ln. 22 - pg. 578 ln. 22,
Pl. Exs. 7B, 10, 10B, 11, 12, 13, 42, 42A,
12, The "Classic: model ticket dis-
penser, the tickets for the "Classic"
model dispenser and the indicator used
with the "Classic" model dispenser were
all sold and distributed under the trade-
mark “TURN-O-MATIC". The trademark
"“TURN-O-MATIC" is actually embossed on
the front of the "Classic" ticket dis-
penser, is printed on the tickets for
the "Classic" dispenser and is printed on
the face of the number indicator. (Pt.0O.
pg- 6 ¥ 9; Ericson pg. 577 1n.22 = pg. 578
ln. 22; Tveter pg. 826 Ins. 9-12; Pl. Exs.
7B, 106, 42, 42A).
13. AB Turn-O-Matic and Scandus, Inc.
through continuous sales of customer num-
bering systems for over ten years and pro-
moting the sales and advertising of their
products including the ticket dispensers,
ticket strips, and number indicators at
trade shows have made the trademark and
trade name known to the public. (PT.0.
pg. 6 qs 8-9); Ericson pg. 589 ln. 2 =
pg. 590 ln. 8). As a result, "TURN-O-
Appendix 29
MATIC" has become distinctive of AB
Turn-O-Matic's goods in commerce within
the United States and commerce within
California, and has come to be understood
and is understood to refer to ticket dis-
pensers, indicators, and ticket strips
therefor originating with AB Turn-O-Matic
as distinguished from goods’ from other
sources. (Ericson, pg. 600 Ins. 12-23;
Graham pg. 417 lns. 8-19; Baxter, pg. 973
lns. 13-16). Several customers associated
the "TURN-O-MATIC" trademark and products
with Sweden and Scandus (Graham, pg. 414
ln. 28 - pg. 415 ln. 2; Robb, pg. 313 lns.
7-15).
14. Plaintiff AB Turn-O-Matic first
registerd the "TURN-O-MATIC" trademark in
the United States on September 8, 1964
when United States Trademark Registration
NO. 776,575 issued on "TURN-O-MATIC"” for
apparatus for dispensing tags. This mark
is valid, uncancelled and has not been
_ abandoned. The provisions of 15 USC §1051
et seq. have been fully met for the es-
tablishment of incontestable rights in
the trademark "TURN-O-MATIC". (Pl. Ex. 2).
AB Turn-O-Matic also obtained United
States Trademark Registration No.
1,051,234 for “TURN-O-MATIC" as applied
to tickets. (Pl. Ex. 155). AB Turn-0O-
Matic has also registered its trademark
"TURN-O-MATIC" in the State of California
as No. 53020 issued April 14, 1975 for
tickets. (Pl. Ex. 3; PT.0. pg. 8 qs 20-
21).
15. Beginning in about 1963, first as
an employee and then as a shareholder,
Tveter was associated with a distributor
of AB Scandus for the sale and distribu-
tion in part of the United States of
TURN-O-MATIC products, namely the
30 Appendix
"Classic" model ticket dispensers, the
ticket strips therefor, and number indi-
cators. (Pt.0O. pg. 6 ¥ 10).
16. In about 1967, Sven Tveter, doing
business as SGT Enterprises, began on his
own behalf to distribute the TURN-O-MATIC
"Classic" model dispensers, ticket strips
therefor and number indicators for AB
Scandus, and on September 12, 1967 a Dis-
tributorship Agreement was entered into
between AB Scandus and Tveter wherein
and whereby Tveter became an exclusive
distributor of TURN-O-MATIC ticket dis-
pensers, number indicators and tickets in
a specified territory. (PT.O. pg. 6 ¥ ll).
17. Sven Tveter continued to act as
distributor for TURN-O-MATIC customer num- ¥
bering systems in the Western United
States from 1967 until he terminated his
distributorship agreement by a letter
dated January 8, 1975 sent to AB Turn-
O-Matic in Sweden, indicating that the
distributorship agreement was terminated
effective January 10, 1975. (Tveter, pg.
712 1lns. 17-21, p. 727 Ins. 16-19).
18. During the period of 1965 to Janu-
ary, 1975, the TURN-O-MATIC products were
handled in the United States by a few
national distributors (Ericson, pg. 580
ln. 8 - pg. 581 ln. 8) who typically sold
the TURN-O-MATIC products by sales to
sub-distributors and direct sales to re-
tail customers including retail store
outlets of nationwide chain stores where
the products were used, such as Baskin-
Robbins Ice Cream Stores, Sears Roebuck &
Company, Montgomery Ward, and independent
retail stores such as bakeries, hardware
and auto supply stores. (Ericson, pg.
586 lns. 9-18, p. 589 In. 18 =- pg. 591
ln. 8).
Appendix 31
19. Sven Tveter included the trademark
"“TURN-O-MATIC" in the heading on his price
lists and invoices and listed his business
Phone in the white pages of the telephone
book under the name "TURN-O-MATIC Tickets
and Equipment". (Ericson, pg. 586 ln. 19 -
Pg. 587 In. 16; Pl. Exhs. 156, 136, 138).
20. MTveter's customer/distributor
Vern Baxter as well as purchase orders
themselves show that customers would or-
der tickets by referring to the "TURN-0O-
MATIC" trademark (Baxter, pg. 977 ln. 27 -
Pg- 978 ln. 3; Pl. Exs. 129-D, E, G, H, I,
prises had long been distributors of "TURN-
O-MATIC" products, users of these products
were accustomed to contact SGT for service
and supplies for "TURN-O-MATIC" numbering
Systems. (Emanuel, pg. 291 lns. 5-13, pg.
297 Ins. 17-24; Robb, pg. 390, lns. 16-19,
Pg- 395 In. 18-24; pg. 398 Ins. 13-16).
D. Development and Introduction of
the Mark II Dispenser and Tickets.
21. In late summer 1971, Ake Ehrlund,
an independent designer of point of sale
display products in Sweden (Ehrlund, pg.
89 ln. 11 - pg. 92 ln. 12), invented an
improved ticket dispenser device and
ticket strip therefor incorporating novel
and unique features. (Ehrlund, pg. 103
Matic later acquired rights to this in-
vention (Ehrlund, pg. 154 ln. 15 = pg. 155,
In. 10; Pl. Exs. 34, 36) which was placed
in a uniquely shaped housing (Ehrlund, pg.
122 In. 14 = pg. 124 ln. 24; Pl. Ex. 35,
90D, 10), and AB Turn-0-Matic subsequently
introduced the product in the United States
as its improved TURN-O-MATIC dispenser.
Plaintiff has referred to this dispenser as
the "Mark II" model. (Ericson, pgs. 592-
32 Appendix
593; Pl. Exs. 10, 130, 131).
22. While waiting in a shop in Sweden,
Ake Ehrlund had observed the operation of —
a TURN=O=-MATIC “Classic” model ticket
dispenser, and noticed the dispenser jam
on several occasions when patrons appeared
to be pulling tne ticket to the right as
the ticket was being pulled from the dis-
penser. Upon returning home, Ake Ehrlund
began experimenting with different ticket
strips and strip dispensing mechanism in
order to design a better ticket dispenser
than the "Classic" model. (Ehrlund, pg.
100 ln. 2 = pg. 101 ln. 3, pg. 103 ln.
24 = pg. 109 ln. 18).
23. Ake Ehrlund began with a ticket
strip provided with a central hole or cut-
out to engage a stopping mechanism for the
remainder of the ticket strip. (Ehrlund,
pg- 105 lns. 10-27; Pl. Ex. 88B). To
avoid the necessity and problems attendant
to actually removing a portion of the
ticket to make an opening for a stopping
mechanism, he experimented with a ticket
where a central portion or flap was
punched out but not removed. (Ehrlund,
pg. 105 ln. 21 = pg. 106 ln. 6; Pl. Ex.
88C). The intended direction of travel
for the strip was with the free end of the
punched out portion or flap trailing so
that the ticket portion adjacent the
trailing end of the flap would engage the
stopping mechanism. (Ehrlund, pg. 106
ins. 1-16; Pl. Ex. 88C). In experimenting
with the latter ticket construction and
by accident, he happened to run the ticket
strip backward over the edge of a table,
and in doing so, he noticed how the
punched portion continued in the original
direction before it was forced to follow
the new direction. (Ehrlund, pg. 106 ln.
OS ee ee eae i ate ee een + me ee pees +
Appendix
21 - pg. 107 In. 3). He pulled the strik, :
backwards over the corner of a table \ |
found he could have the lead flap or \
ticket hanging under the succeeding flap)
or ticket, and as he continued to pull
downwards, the lead ticket would be torn
off. (Ehrlund, pg. 107 lns. 4-15). He
realized that in his dispenser he would
have to guide the succeeding flap down-
~ wards, or people using his dispenser would
pull the strip out straight where it would
not tear off. (Ehrlund, pg. 107 In. 23 -
pg. 108 ln. 2). He then realized he had
discovered something totally new for a
ticket dispensing structure with no
moving parts. (Ehrlund, pg. 106 ln. 14 -
pg. 107 ln. 19, pg. 115 Ins. 5-ll, pg. lll
lns. 1-12). He worked out a guidance
structure with a casing tongue member and &
a downwardly extending cover protion to ;
cooperate with the sequential ticket
tongues on the strip roll to dispense »
individual tickets in a one hand, one step
pulling operation in which the end ticket
is separated from the strip roll leaving
the ticket tongue of the succeeding ticket
protruding from the dispenser ready to
pull the next ticket. (Ehrlund, pg. 107
In. 20 - pg. 108 ln. 2, pg. 109 In. 1 —- pg.
110 ln. 15).
24. Ake Ehrlund built a number of work-
ing models of ticket dispensers incorpor-
ating the new punched ticket strip and
dispensing structure (Ehrlund, pg. 107 ln.
20 - pg. 110 ln. 22; Pl. Ex. 89) and then
initiated a patent application in Sweden
which was filed January 26, 1972.
(Ehrlund, pg. 116 lns. 9-19; Pl. Ex. 1A;
Pt.0O. pg. 7 412). Figures 1 and 2 of the
application actually illustrate one of Mr.
Ehrlund's models which operated to dis-
pense tickets (Ehrlund, pg. 109 lns. 1-18;
34 Appendix
Pl. Exs. 1, 1A, 89).
25. Mr. Ehrlund made additional models
of his dispenser and ticket strip (Ehrlund,
pg. 110 ln. 25 = pg. 111 In. 17, pg. 112
ln. 16 - pg. 114 ln. 10, pg. 114 ln. 22 -
Pg. 115 ln. 4, Pg. 119 ln. 2 nae Pg. 120
ln. 11; Pl. Exs. 89, 37-41) and began
negotiations with AB Turn-O-Matic for
marketing his invention. (Ehrlund, pg.
118 lns. 16-23). Before completing an
arrangement with AB Turn-O-Matic, Mr.
Ehrlund contracted with a design firm
named A&E Design to finalize the aesthetic
design of the ticket dispenser and to
provide him with a drawing and solid
model showing how the final product should
look. (PT.O. pg. 7 413; Ehrlund, pg.123
ln., 14 = pg. 124 ln. 21; Pl. Exs. 35,
90D). Mr. Ehrlund had already built at
least eight different models embodying
his invention, all generally box-shaped.
(Pl. Exs. 89, 40). After entering the
contract with A&E Design, Mr. Ehrlund
contracted with AB Turn-O-Matic giving
them an option to acquire the Swedish and
world-wide patent rights on this new
ticket dispenser. (Ehrlund, pg. 124 ln.
working prototype incorporating the look
suggested by A&E Design was completed for
Mr. Ehrlund by a model maker in Stockholm
and presented by Mr. Ehrlund to AB Turn-
O-Matic. The external appearance of the
prototype, later incorporated in produc-
tion versions, did not look like any of
Ehrlund's models or any other dispenser.
The appearance is not functional.
3-4; Pl. Ex. 90). After receiving the
working prototype, AB Turn-0-Matic
acquired the world-wide rights and pro-
ceeded with production and marketing of
Appendix 35
the new product. (Ehrlund, pg. 154 ln.
15 - pg. 115 ln. 9; Pl. Ex. 34,36).
26. From the prototype (Pl. Ex. 90,
90A) to the first production version of
the "Mark II" (Pl. Ex. 140), changes were
made (1) in the latch (Ehrlund, pg. 132
lns. 11-17), and (2) in one front angled
side surface of the casing (Ehrlund,
pg. 132 lbs. 2-10). From the first pro-
duction version (Pl. Ex. 140) to the
final production version (Pl. Ex. 10)
additional changes were made (3) by adding
a web or ridge to the cover (Pl. Ex. 140,
10, 72), (4) by adding two tabs to the
cover, and (5) by adding a mating semi-
cylindrical projection and recess on one
side of the casing and cover, respective-
ly. (Ehrlund, pg. 134 lns. 7-17; Pl.
Exs. 72, 90A, 90C; Def. Exs. Q2, Q4).
27. A metal clip is provided on the
casing flange in the "Mark II” to pre-
vent the wearing away of the plastic by
the paper ticket strip. (Ehrlund, pg.
130 Ins. 6-15). At the tear-off por-
tions on either side of the casing
flange, the metal clip is about even or
below the edge of the plastic. (Tveter,
pg. 914 lns. 1-27; Def. Ex. Q4).
28. In early 1974, AB Turn-O-Matic
through Scandus, Inc. introduced the new
"Mark II" ticket dispenser into the
United States market. (PT.O. pg. 7 415).
The first models of this dispenser were
dispatched to both Scandus, Inc. and
Tveter separate from a letter of announce-
ment by AB Scandus dated January 17, 1974,
(Erickson, pg. 592 ln. 9 - pg. 593 ln.
27; Pl. Exs. 10, 11, 130, 131) and
successful operation of the "Mark II"
dispenser and ticket strip rolls was
witnessed by Erickson and Tveter in a
i
36 Appendix
retail establishment in late January,
1974 (Erickson, pg. 595 ln. 19 = pg. 596
ln. 1; Tveter, pg. 716 ln. 15 = pg. 171
ln. 12).
29. In 1974, Tveter purchased the
new "Mark II" dispensers and tickets
therefor from Scandus, Inc. and resold
these products. (PT.O. pg. 7 416). For
years he had used a parts numbering sys-
tem for the components of the "TURN-O-
MATIC" customer service system (Tveter,
Og. 712, in. 22 .< pg. 713 in. il; Pi.
Ex. 136) and he adopted the same part
number for the "TURN-O-MATIC""Mark II"
dispenser as he had used for the "TURN-O-
MATIC" "Classic" dispenser (Tveter, pg.
713 lns. 3-19).
30. The function of the "TURN-O-
MATIC" "Mark II" ticket dispenser is to
dispense individual tickets to customers.
The essential functional elements of the
dispenser, those claimed in the Ehrlund
patent, are inside the machine and not
apparent in its outward appearance. The
exterior shape, design and color of the
"TURN-O-MATIC" "Mark II" ticket dispen-
ser are factors which do not contribute to.
its performance as a machine for dis-
pensing tickets, and thus are not func-
tional but rather a mere arbitrary
embellishment, a form of dress for the
goods primarily adopted for the purposes
of identification and individually.
31. The appearance of the "TURN-O-
MATIC" "Mark II" dispenser is completely
dissimilar from any other ticket dis-
penser on the market at the time of its
introduction into the marketplace. (Pl.
Exs. 7B, 44B, 45B, 68A, 93). Also, the
appearance of the "TURN-O-MATIC" "MARK II"
°°.
AR tet cet eee a Men pene seen mee
Appendix 37
dispenser is distinctively different
from the appearance of the products
illustrated in defendants prior art
patents including the Waterman U.S.
Patent 2,622,815 (Def. Ex. CD) alleged
by defendants to have a similar appear-
ance (Pl. Exs. 10, 95-103).
32. The appearance of plaintiff's
TURN-O-MATIC" "Mark II" ticket dispenser
has acquired a secondary meaning in the
marketplace. Customers, users, dealers,
distributors, and the general public
have come to associate the visual appear-
ance of the "Mark II" ticket dispenser
with "TURN-O-MATIC" and plaintiff's
products, particularly with the "Classic"
ticket dispenser which has been sold for
many years and has had an excellent rep-
utation among its users. (Emanuel, pg.
287 ln. 1 - pg. 289 ln. 18; Burgess, pg.
300 ln. 22 - pg. 304 ln. 18; Lassen, Pl.
Ex. 108, pg. 14 In. 5 = pg. 19 ln. l,
pg. 19 ln. 22 = pg. 20 ln. 20, pg. 26
lns. 9-17; Ex. 23-B, Bogue, Pl. Ex. 116,
pg. 9 ln. 6 - pg. ll in. 14, pg. 12
in. 1 - pg. 13 in. 12).
33. Both from the "Pat. Pending”
notice on the TURN-O-MATIC” "Mark II"
dispenser box and a letter dated
February 12, 1974 from Scandus, Inc.,
_Tveter was aware that a patent applica-
tion was pending on the "Mark II" dispen-
ser. (Ericson, pg. 593 ln. 16 - pg. 594
ln. 21, pg. 597 Ins. 1-10; Tveter pg.
171 ln. 3 = pg. 718 in...10; Pl. Exs. li,
47) *
34. The “Mark II" ticket dispenser,
since its introduction on the market,
has enjoyed almost instantaneous commer-
cial success (Ericson, pg. 596 lns. 5-1ll,
pg. 597 ln. 24-26; Pl. Ex. 116 pgs. 8-23).
38 Appendix
It has also received universal acclaim
for its unique design and construction.
It received the 1974 Design Award from
the Swedish Society of Industrial De-
signers. (Ehrlund, pg. 158 ln. 28 =- pg.
159 ln. 6; Pl. Exs. 14, 15). It has also
been featured in numerous industrial
design publications (Pl. Exs. 16-20, 20A-
20C; Def. Ex. CI). The TURN-O-MATIC
"Mark II" style dispenser and its tickets
have virtually completely replaced the
TURN-O-MATIC "Classic" model dispenser
and tickets. (Ericson, pg. 597 ln. 27 -
pg. 598 ln. 7; Tveter, pg. 748 lns. 13-
28).
35. On one instance first dis-
covered by Tveter, TURN-O-MATIC "Mark II"
tickets were shipped into the United
States bearing the word “Patented”.
Mr. Ericson telephoned Sweden and AB Turn-
O-Matic could not believe such tickets
had reached the United States. As de-
cided, Ericson told Tveter not to sell
those tickets. (Ericson, pg. 600 ln. 25 -
pg. 602 ln. 10). Tveter's sub-distribu-
tor was told that.under no circumstances
were these tickets to be sold (Wagner,
pg. 962 lns. 13-14). Tickets that were
received in New York and San Francisco
are still in storage (Ericson, pg. 636
ln. 14 - pg. 637 In. 23). It was not
established that plaintiffs marked
their products with a patent notice for
the purpose of deceiving the public or
deceiving anyone and it was not shown
that actual harm was caused to defend-
ants or the public interest by that one
shipment of tickets. The segregation of
the product from channels of distribution
and instructions not to sell the product
actually show a lack of intent to
deceive.
Appendix 39
E. Ehrlund United States
Patent Application and Patent
36. On January 24, 1973, the United
States Patent application on Mr. Ehrlund's
invention was filed. The application con-
tained everything disclosed and illustra-
ted in the original Swedish application
and claimed priority to the original
: Swedish filing date under 35 U.S.C. §119
¢ (Def. Ex. B). Mr. Ehrlund's plexiglass
ticket dispenser (Pl. Ex. 39, 40) was
also described and illustrated in Fig. 6.
This structure was to the same invention
as originally described and each claim
in the original application and the U.S.
application reads as well on the struc-
ture of Figures 1-5 as it woes on the
structure of Figure 6 (Ehrlund, pg. 119
ln. 24 - pg. 122 In. 13; Pl. Exs. 1, 1A;
Def. Exs. 2, Vl). On February 20, 1974,
a claim directed specifically to the
ticket strip roll was in the application,
but by requirement of the Patent Office
Examiner on May 2, 1974, that claim had
to be pursued in a separate application
and no claim just to the ticket strip
roll issued in the patent in suit. (Pl.
Exs. 1, 32 pg. 26, 29, 31, 32). On
: May 27, 1975, the first application
issued as United States Letters Patent
No. 3,885,727 entitled "Device for
Tearing Off Pieces of a Certain Length
from a Strip", and since the latter date,
AB Turn-O-Matic has been the owner of
said Letters Patent. (PT.O. pg. 7 414).
37. The ticket dispenser in accord-
ance with the Ehrlund invention and
patent is constructed to dispense the
end ticket from a strip roll that has
punched lines equally spaced apart along
the length of the strip forming flaps
OO
40 Appendix
or ticket tongues directed forward in the
feeding direction for the strip. The
dispenser has a casing provided with a
portion or second guidance means to guide
the strip, a flange or separation unit
also called a casing tongue, and tear-
off or cut-off means on both sides of
the casing tongue connecting the base of
the flange or separation unit to the
side walls of the casing. A cover
connected to the casing is provided with
a first guidance means in the form of an
outwardly extending first portion and a
downwardly extending second portion with
the cover first guidance means spaced
from the casing second guidance means to
pass the strip. The flange or separation
unit has a trapezoid shape corresponding
to the shape of the bottom part of the
ticket tongue. The ticket strip comes
off the roll, is guided over the casing
tongue in contact with the side connec-
ting means and extends downward between
the end of the flange and downwardly
extending portion. A pull on the ex-
posed flap or ticket tongue at the end of
the ticket strip advances the ticket
strip along a predetermined path such
that the lead portion of the succeeding
ticket is carried out and down and then
the succeeding ticket tongue is guided
along one path and the remainder of the
leading ticket along another path so
that the pulled ticket is torn off at the
sides of the flange or casing tongue
leaving the flap or ticket tongue of the
succeeding ticket carried beyond the end
of the casing tongue or flange and down
ready to be pulled for the next ticket.
(Ehrlund, pg. 143 ln. 26 - pg. 154 ln. 23;
Chilton, pg. 461 ln. 1 - pg. 463 ln. 10;
Pl. Exs. 1, 10, 69A-69C, 70). The in-
Appendix 41
vention of the Ehrlund dispenser pro-
duces a synergistic result. (Chilton,
pg. 468 Ins. 8-18).
38. The flange in the Ehrlund in-
vention performs several functions. It
serves as a guidance means for the
ticket strip; it serves as a separation
or redirecting unit to separate or
redirect the succeeding ticket tongue
along one path while the remainder of
the preceeding ticket moves along ano-
ther path; and it serves for temporarily
arresting movement of the succeeding
ticket tongue. (Ehrlund, pg. 148 ln. 2 -
pg. 151 ln. 23).
39. The words "cut” and “tear” are
used interchangeably in the Ehrlund
patent to mean "sever" or "divide into
segments”. (Ehrlund, pg. 214 lns. 20-
24; Chilton, pg. 493 ln. 3 - pg. 494 ln.
3; Myronuk, pg. 1066 ln. 27 - pg. 1067
ln. 4; Pl. Exs. 1, 105). While the
patent specification does not specifi-
cally use the words "flange” and "sepa-
ration unit", the specification and
drawings clearly define the structure
to which these words refer. (Chilton, pg.
488 ln. 28 - pg. 489 ln. 7, pg. 490
lns. 13-23, pg. 491 lns. 6-18).
40. The ticket strip in the Ehrlund
patent can unroll off the top or off the
bottom of the roll (Pl. Ex. 1). In the
"Classic" model, the strip comes off the
bottom of the roll. (Pl. Ex. 8). When
Ehrlund filed his Swedish application,
he was aware of the "Classic" model and
aware that if the strip is pulled off
the top of the roll, structure can be
provided to prevent the free end of the
strip from going back in the dispenser,
a a i i lm ai Cd, aa
ee seem oom
42 Appendix
and the patent provides an explanation
of appropriate structure. (Ehrlund,
pg. 121 Ins. 2-24; Pl. Ex. 1, Col. 3
Ins. 3-8).
41. The patent specifies that in the
position in which the dispenser is used
the cover is lowered on the casing (Pl.
Ex. 1, Col. 2 ln. 17);. Ehrlund, pg. 141
ln. 12 - pg. 142 ln. 1). If the cover
were heavy enough, such as made of
heavy steel, or were closely fitting,
the device in Ehrlund patent would
operate without a latch. (Chilton, pg.
513 lns. 1-7; Myronuk, pg. 1068 ln. 19 -
pg. 1070 ln. 16). A latch is illustrated
in Figure 6, but not described. (Chiiton,
Pg. 485 lns. 14-27). Mr. Ehrlund's first
device (Pl. Ex. 89, Model A) illustrated
in Figures 1 and 2 of the Ehrlund patent
did operate for the dispensing of tickets
(Ehrlund, pg. 109 lns. 1-18), and de-
fendants' TAKE-A-TURN dispenser operates
with the latch open (Myronuk, pg. 1072
lns. 1025). Also, a person skilled in
the art reading the Ehrlund patent would
know that the cover should be latched
down if it is not heavy. (Myronuk, pg.
1071 Ins. 12-25; Pl. Ex. 99). The
Ehrlund patent is not defective for
failing specifically to describe and
illustrate a. latch.
42. Neither plaintiff AB Turn-0-
Matic nor the inventor Ake Ehrlund inten-
tionally withheld any material prior art,
such as the "Classic" model dispenser or
the British patent thereon, from the
Patent Examiner.
43. All of the claims of the
Ehrlund patent particularly point out
and distinctly claim the subject matter
which Mr. Ehrlund regarded as his inven-
Appendix 43
tion. All of the claims clearly recite
the structural elements of the dispenser
described and illustrated in the Ehrlund
patent. (Ehrlund, pg. 175 ln. 19 = pg.
178 ln. 17; Chilton, pg. 463 ln. 25 -
pg. 468 ln. 2; Pl. Exs. 69A-69C, 70, 70A).
44. The most unique aspect of the
Ehrlund invention is the guidance struc-
ture that cooperates without moving parts
with the forwardly directed ticket tongue
or flap to dispense individual tickets in
a one hand, one step pulling operation
in which the end ticket is separated from
the strip roll leaving the ticket tongue
of the succeeding ticket protruding from
the dispenser ready to pull the next
ticket (Chilton, pg. 461 ln. 1 - pg. 463
ln. 10, pg.. 483 lns. 3-10, pg. 524 lns.
13-24).
45. While the claims of the Ehrlund
U.S. patent do not specify how the user
pulls the ticket or what forces hold the
ticket back, the claims need not recite
the complete functional operation of
the structural elements.
46. The claims of the Ehrlund
patent a) recite the tongue structure of
the ticket which the patent describes as
pulled (Pl. Ex. 1, Claims 1-5, Col. 4 lns.
14 & 44, Col. 2 lns. 24-26), b) recite
the casing flange which guides the
succeeding ticket tongue which the paterit
describes as ready next to be pulled
(Pl. Ex. 1, Claim 1, Col. 4.l1n. 30, Col.
2 Ins. 26-34), c) recite the downwardly
extending portion spaced from the flange
to form a gap for passage of the strip
which the patent describes as important
for conferring on the flat its vertical
orientation (Pl. Ex. 1, Claim 1, Col. 4
lIns. 25-28 & 32-34; Col. 2 lns. 37-48);
a) recite the guidance structure which
the patent describes as guiding the
44 Appendix
ticket strip until the end ticket is torn
off (Pl. Ex. 1, Claims 2-5, Col. 4 lns.
51-63, Col. 2 Ins. 26-34); and recite a
wall spaced from and extending to a
point below a separation unit which the
patent describes as important for
conferring on the flap its vertical orien-
tation (Pl. Ex. 5, Claim 5, Col. 2 lns.
37-48).
47. The structure of the ticket strip
recited in the preamble of the Ehrlund
claims is part of Ehrlund's invention that
defines the construction and the manner
of use of the dispenser which is speci-
fically claimed. (Ehrlund, pg. 334, ln.
28 - pg. 335 ln. 5; Chilton, pg. 463
ln. 25 - pg. 468 ln. 2, pg. 483 lns. 3-
10, pg. 524 lns. 13-24).
48. In claim 1, the guidance means
is defined for passage of the strip; the
flange is defined for temporarily arres-
ting movement of the ticket tongue and
shaped for continued passage of the
remainder of the strip; and tear-off por-
tions are defined for tear-off of the
remainder of the strip. (Pl. Exs. l
Claim 1, 69A). In claims 2-5, the guid-
ance means is defined by a separation
unit corresponding in shape to that of
the bottom part of the ticket tongues
for guidance of respective parts of the
strip along respective paths one of
which leads to the tear-off means for
tearing off the remainder portion of the
strip. (Pl. Exs. 1 claims 2-5, 69B,
69C). The structural configuration of
the Ehrlund ticket strip and its
tongues recited in the claims of the
Ehrlund patent give life, meaning and
vitality to all the claims.
ON. 8s ey ee ae ar mmm
Appendix 45
F. Validity and Enforceability of
Ehrlund Patent
49. The disclosure contained in the
Ehrlund patent is sufficient to enable
a man of ordinary skill in the art of
the material dispensers to make and use
the Ehrlund invention. (Chilton, pg. 468
lns. 4-7; Myronuk, pg. 1071 Ins. 12-25).
50. When Mr. Ehrulund signed the dec-
laration to the United States Patent
Office, he did not read English well
enough fully to understand the applica-
tion; his attorney explained to him what
he was signing (Ehrlund, pg. 142 ln. 6 -
pg. 143 ln. 19). His United States
application was for the same invention as
his prior Swedish application; the
description and drawings were the same
with the addition of Figure 6 and the
description thereof. The addition of
Figure 6 did not change the invention
as disclosed or described. It was not
established that Mr. Ehrlund made any
material misrepresentation to the United
States Patent Office.
51. The introduction to the Ehrlund
patent refers to known appliances used
primarily for issuing queuing tickets
from a strip that has perforations or
punched lines, which strip is fed
forward by and torn off by a pull at the
end (Pl. Ex. 1, Col. 1 lns. 3-11). The
"Classic" dispenser was of this type.
The construction of the ticket dispenser
in the Ehrlund patent and the "Mark II"
was distinctively different from the
"Classic" and other than having a roll
of tickets with an exposed end ticket
that you take one at a time, Ehrulund did
not think the "Classic" model related in
any way to his invention. (Ehrlund, pg.
- eee — emg —<—s
eet eed = ee em rey =
ee wwe
46 Appendix
115 ln. 23, pg. 116 ln. 8). Defendants
did not establish or even allege that
the "Classic" dispenser anticipated or
made the Ehrlund invention obvious.
52. No supplemental oath or declara-
tion was required of Mr. Ehrlund in the
application which issued as the litiga-
ted patent. The invention of the patent
claims was the same invention originally
described and claimed when the U.S.
patent application was filed, as well as
when the Ehrlund Swedish application was
filed. The Examiner never asked for a
Supplemental Oath and never argued that
new matter was being added (Pl. Ex. 32).
53. Typical prior art devices inclu-
ded such things as a two-step sprocket
feed operation employing positive con-
trol of the ticket strip (Ericson, pg.
582 ln. 3 - pg. 585 ln. 14; Chilton, pg.
468 ln. 17 - pg. 479 ln. 23; Pl. Exs.
44B, 45B, 68A, 93) or a positive stop
using a latch mechanism such as the TURN-
O-MATIC "Classic model or an engageable
opening extending straight across the
strip requiring additional manipulation
of the ticket strip material. (Chilton,
pg. 475 lns. 1-22, pg. 476 ln. 1l =- pg.
477 ln. 3).
54. In the two-step sprocket feed
operation, it is necessary to depress a
handle or lever to advance the ticket
strip and actuate a shearing mechanism.
Many individuals are adverse to using
these devices for sanitary reasons
because everyone who operates the unit
touches the same handle or lever.
(Chilton, pg. 468 ln. 17-pg. 470 ln. 23;
Ericson, pg. 585 ln. 24 - pg. 586 ln. 8;
Pl. Exs. 44B, 45B, 68A, 93).
Appendix 47
55. In the prior art devices using a
positive stop operation, the additional
manipulation of the ticket amounts to a
two-step operation and sometimes requires
a two-hand operation. (Chilton, pg. 475
Ins. 1-22, pg. 476 ln. 11 - pg. 477 ln. 3;
Pl. Exs. 44B, 45B, 68A, 93, 99, 100).
56. All models and prior art devices
dispense the strip material tangentially
from a roll and have an outward appearance
unlike that of the "Mark II". (Pl. Exs.
7B, 33A-33D, 40, 44B, 45B, 68A, 89, 93,
95-103; Def. Ex.. CD).
57. The Burr et al patent, No.
843,579 (Pl. Ex. 98) discloses a strip
with transverse perforations and a
channel that is curved both longitudinally
and transversely to cause the perfora-
tion to rupture in the middle and extend
sideways (Ehrlund, pg. 204 ln. 2 —- pg.
205a ln. 7; Chilton, pg. 473 ln. 21 -
pg. 474 ln. 14). It does not disclose a
flange for temporarily arresting move-
ment of the ticket tongue that is direc-
ted in the feeding of the strip as speci-
fied in Claim 1 (Ehrlund, pg. 322 ln. 24 -
pg. 323 ln. 9, pg. 328 lns. 108); it does
not disclose a downwardly extending por-
tion forming a gap with a flange (Ehrlund,
pg. 348 lns. 13-25) and does not disclose
side tear-off portions (Ehrlund, pg. 348
Ins. 26-28, pg. 349 Ins. 11-17; and it
does not disclose a separation unit of
trapezoid shape to guide different por-
tions of the strip along different parts
(Ehrlund, pg. 353 ln. 12 - pg. 354 ln. 1;
Chilton, pg. 521 ln. 18 - pg. 522 ln. 8).
58. The Ingram patent No. 1,704,044
(Pl. Ex. 99) scloses a dispenser with
a strip roll having transverse slots
(Ehrlund, pg. 356 lns. 18-23); Chilton,
pg. 538 lns. 15-25, pg. 539 lns. 1-11).
48 | Appendix
It discloses a spring urging the strip
against the cover so a two step opera-
tion is required. First the strip is
pushed in and down until it is abruptly
stopped and next, the end is grasped and
torn off (Chilton, pg. 475 lns. 1-22;
Myronuk, pg. 1085 Ins. 13-25). It does
not disclose a downwardly extending portion
and a separate flange for temporarily
arresting movement of the ticket tongue,
both the downwardly extending portion
and flange forming a gap to guide the
ticket strip as specified in Claim l.
(Ehrlund, pg. 361 ln. 4 - pg. 362 ln. 2;
Chilton, pg. 538 Ins. 15-28, pg. 539
in. 21 - page 540 ln. 5). Additionally,
it does not disclose guidance means
having a separation unit for guiding
different portions of the strip along
different paths as specified in claims
2-5 (Chilton, pg. 539 lns. 1-20).
59. The Osborne patents Nos.
3,173,601 and 3,229,876 (Pl. Exs. 95, 96),
the Williamson patent No. 3,098,594
(Pl. Ex. 97), and the "Baggies" box
(Def. Ex. L) illustrated therein provide
a container from which a film is pulled
until a tab penetrates transverse perfora-
tions in the film to bring the film to an
abrupt complete stop after which con-
tinued pull on the film tears off the
end bag. (Chilton, pg. 471, ln. 24 -
pg. 472, ln. 20). Besides the lack of
disclosure of strip tongues (Chilton, pg.
533, Ins. 1-11), these prior art items do
not disclose outwardly and downwardly
extending portions to form a gap with a
flange for temporarily arresting move-
ment of the ticket tongue and side tear
off portions as specified in Claim l.
(Ehrlund, pg. 366, ln. 22 - pg. 370,
1In.-15). They do not disclose a separa-
Appendix 49
tion unit to guide different portions of
the strip along different paths (Ehrlund,
Oe. Sia): Ls 40e:48 * Bg. 373, Inc: 33
Chilton, pg. 534, lns. 1-12; Pl. Ex. 114
pg. 22-24, 27) and before you can pull
the succeeding bag you must lift the bag
Material out from behind the projection
which has stopped the material. (Myronuk,
pg. 1094, lns. 17-24).
60. The Beloud patent No. 2,361,528
4 (Pl. Ex. 100) discloses a strip with
transverse perforations and a separately
movable pawl that engages and stops the
strip different from the Ehrlund inven-
tion. (Ehrlund, pg. 208, ln. 19 - pg. 209,
ln. 12; Chilton, pg. 476, ln. 1l - pg. 477,
ln. 15). Besides not disclosing tongues
on the strip (Chilton, pg. 544, lns.
1-10), the Beloud patent does not dis-
close a structure that could be charac-
terized as a casing flange or separation
unit and a separate downwardly extending
portion to form a gap with the casing
flange. (Myronuk, pg. 1091, ln. 24-28).
In the same respect as the Ingram and
Osborne patents, the Beloud patent does
not disclose a guidance means for guiding
different portions of the strip along
different paths (Chilton, pg. 539, lns.
; 1-20, pg. 534, lns. 1-12; Pl. Ex. 114,
pgs. 22-24, 27).
61. The Kingsbury patents Nos.
1,91",261 and 1,983,463 (Pl. Exs. 101,
102) disclose a complex machine with
wheels going different speeds to fold his
strip and tear off the lead portion.
These patents, not principally relied
upon by defendants, lack disclosure of
various elements in Claims 1-5. (Ehrlund,
pg. 209, ln. 20 - pg. 210, In. 5; Chil-
ton, pg. 477, lns. 16-27).
ee Se A a ae Po Ok NY ROR On oemneE- emmn
50 Appendix
62. The Suk patent No. 1,575,081
(Pl. Ex. 103) discloses a machine pro-
vided with a recording strip which
receives orders. in succession. The
strip is forwarded in the machine and
preserved until taken out of the end of
the day or whenever desired (Pl. Ex. 103,
pg. 2, lns. 50-59). The Suk patent dis-
closes no structure for guiding or sepa-
rating portions of the strip. (Ehrlund,
pg. 210, lns. 6-25).
63. It was not established that the
"Meny" bag dispenser was prior art (i.e.,
coming either before Ehrlund's invention
Or more than one year prior to either
Ehrlund's Swedish or U.S. filing dates.
Even so the "Meny" bag dispenser is
like the "Baggie" dispenser and dis-
tinct from the Ehrlund invention in the
same manner as is the "Baggie” dispen-
ser. In the "Meny" bag dispenser, trans-
versely perforated plastic film is
lifted up over an arresting tab and
pulled until the tab goes through (pene-
trates) the middle of the perforation
and permanently stops the film until you
lift it again. Continued pull will tear
off the first bag. It is a two-step -
operation. (Ehrlund, pg. 202, ln. 24 -
pg. 204, ln. 1).
64. The construction of a device as
set forth in the claims of the Ehrlund
Patent No. 3,885,724 is not described or
anticipated by the disclosures of the
following patents:
U.S. 843,579 to Burr et al.
S. 1,575,081 to Suk
S. 1,704,044 to Ingram
S. 1,983,463 to Kingsbury
S. 2,351,528 to Beloud
S. 3,098,594 to Williamson
_
Appendix ; 51
U.S. 3,173,601 to Osborne, Jr.
U.S. 3,229,876 to Osborne, Jr.
British 841,034 to AB-Turn-O-Matic
and the invention of the Ehrlund inven-
tion would not. have been obvious to a
person having ordinary skill in the art
to which this invention relates at the
time the invention was made in view of
the aforementioned paterts.
65. Ehrlund did not believe that his
invention was disclosed or described in
the Osborne and Williamson patents or
the Baggies or that the Meny dispenser
operates in accordance with his inven-
tion. (Ehrlund, pg. 202, ln. 4 - pg. 204,
in. &}.
66. The dispenser described in the
principal prior art relied upon by
defendants, namely Osborne (Pl. Exs. 95,
96), Burr et al. (Pl. Ex. 98), Ingram
(Pl. Ex. 99), Beloud (Pl. Ex. 100) and
Kingsbury (Pl. Ex. 101, are of different
construction and operate in a different
way to produce a different result from
the Ehrlund invention. (Chilton, pg.
472, ln. 21 - pg. 473, ln. 15, pg. 474,
Ins. 15-28, pg. 475, ln. 23 - pg. 473,
ln. 8, pg. 477, Ins. 4-15, pg. 447, ln.
28 - pg. 478, ln. 12).
67. The introduction to the Ehrlund
patent refers to known appliances used
primarily for issuing quequing tickets
from a strip that has perforations or
punched lines, which strip is fed for-
ward by and torn off by a pull at the
end. (P. Ex. 1, Col. 1, Ins. 3-11).
The defendants prior art Burr et al.
Ingram, Beloud and Kingsbury are all of
this type. Osborne is a bag dispenser.
None of these prior art items disclose a
ticket flap or tongue and the dispensing
structure therefor. (Findings 7-61).
52 Appendix
68. Every one of the references made
of record by the Patent Examiner during
the prosecution of the Ehrlund patent
discloses tongues or flaps produced on
strip material. (P. Ex. 33A-33D). Of all
the prior art, the German patent (Pl. Ex.
33D) which was cited (Pl. Ex. 1, pg. 1)
by the Patent Office Examiner during the
prosecution of the Ehrlund patent is the
only dispenser with a triangular shaped
flap. (Ehrlund, pg. 207, ln. 18 - pg. 208,
ln. 13). With respect to the important
limitations in the Ehrlund claims to the
ticket strip having tongues directed in
the feeding direction of the strip, this
German patent is more pertinent than the
prior art relied upon by defendant.
69. Other than to agree that Ake
Ehrlund was a person skilled in the art
of dispensing packaging material (Ehr-
lund, pg. 96, ln. 8, pg. 96, ln. 2)
defendants introduced no evidence to
establish the level of ordinary skill
in the pertinent art to which the
Ehriund patent pertains.
70. The construction of the inven-
tion set forth in the claims of United
States Patent No. 3,885,724 was partly
discovered by Ake Ehrlund by accident,
and Ake Ehrlund was a person skilled in
the mechanical arts of packaging, dis-
play and dispensing devices at the time
he made his invention. (Ehrlund, pg. 89,
In. 11 - pg. 99, In. 16; Chilton, pg.
480, ln. 1 - pg. 484, ln. 7).
71. Before inventing his ticket dis-
penser Mr. Ehrlund had designed a
machine for dispensing edge glued paper
in bag form of any desired length
(Ehrlund, pg. 98, ln. 2 ir pg. 94, ln. 9)
Appendix 33
and a device for dispensing sweetener
(Ehrlund, pg. 98, ln. 9 - pg. 99, ln. 3;
Pl. Ex. 74).
72. At the time of his investigation
of a ticket dispenser, the later
patented dispenser structure was not
obvious to Ehrlund. It would not have
been obvious to him even if he had been
aware of the defendants alleged prior
art (Ehrlund, pg. 214, lns. 7-19).
73. Professor Chilton did not believe
the Ehrlund invention would have been
obvious at the time the invention was
made to a person whom he characterized as
skilled in the art to which the invention
relates, in view of any one or all of the
prior art references; Osborne, Burr et
al., Ingram, Beloud or Kingsbury. (Chil-
ton, pg. 482, ln. 22 - pg. 484, ln. 7).
74. Professor Chilton characterized
the art to which the Ehrlund invention
pertains as the packaging and dispensing
art. The skill of the average man in
this art includes mechanical knowledge,
knowledge of materials and properties of
materials, a mechanical ability to see
how things fit together and probably
exposure to earlier model dispensers.
(Ch-lton, pg. 480, ln. 1 - pg. 481,
ln. 17) °
75. Paul Osborne, an inventor and
developer of the product sold under the
trademark "“BAGGIES" and named as an
inventor in patents alleged by defend-
ants to anticipate and/or make Ehrlund's
invention obvious, testified that he
believes the construction of the device
embodied in the Ehrlund patent would not
have been obvious to him in 1971 or
obvious to a person of average skill in
54 Appendix
the art of packaging in view of the con-
struction of the "Baggie” box. (Pl. Ex.
114, pg. 12, ln. 21 = pg. 13, ln. 7).
John Williamson, another inventor in the
development of the "BAGGIES" product
relied upon as prior art, testified that
knowledge of the "BAGGIES" product would
not have helped him much in inventing the
Ehrlund ticket dispenser. (P. Ex. 115,
pg. 21, lns. 8-11). Mr. Williamson also
testified that the "Baggies" box would
not operate with knife edges on either
side of the projection tab as suggested
by defendants’ expert. (Pl. Ex. 115,
Pg. 36; Myronuk, pg. 1041, Ins. 3-25).
76. While Professor Myronuk testified
as to certain things that would be ob-
vious to him or obvious "to a person
skilled in the art", he gave no reference
to what art he was referring to, what
the skill of the ordinary man in the
particular unnamed art was or any parti-
cular knowledge he had about the art of
designing ticket dispensers at the time
the Ehrlund invention was made to corre-
late his statement of obviousness "to a
person skilled in the art" to the ob-
viousness to a person having ordinary
skill in the art to which Mr. Ehrlund's
invention pertains. Professor Myronuk,
being an expert, cannot be equated with
the “person having ordinary skill in the
art" contemplated by 35 U.S.C. 103.
Additionally, Professor Myronuk neither
made nor tried to make a dispenser of
the type of the Ehrlund invention (Myronuk,
pg. 1067, Ins. 11-16).
77. None of the defendants' prior
art became public between the filing
dates of the Ehrlund Swedish application
and the Ehrlund U.S. application. There-
fore, the validity of the U.S. patent
‘ Appendix 55
is not effected whether or not the subject
matter of Figure 6 is accorded the bene-
fit of the original Swedish filing date.
78. The TURN-O-MATIC Mark II is a
dispenser in accordance with the inven-
tion of the Ehrlund patent. (Ehrlund,
pg. 129, ln. 1 - pg: 135, In. 3; Pl.
Exs. 90, 140, 10).
79. While many attempts have been
made to provide a simple ticket dispenser,
easy to construct and easy to operate
with one hand as evidenced by the various
prior art patents and devices produced
at trial, none has provided the simple
dispensing operation with no moving parts
from which a single ticket partially
projecting therefrom can be grasped with
one hand and pulled in one direction to
tear off a single ticket and leave the
next ticket protruding as in the Ehrlund
patent and in the TURN-O-MATIC Mark II.
(Ericson, pg. 582, ln. 3- pg. 585, ln. 14,
Pg. 595, ln. 27 ‘ae Pg. 596, ln. RAP o
80. Defendant Tveter himself who was
marketing the TURN-O-MATIC unit for many
years and unhappy with his dealings with
the plaintiffs for many reasons never
came up with an alternative device until
the TURN-O-MATIC Mark II design was
introduced.
81. John Bogue, a Baskin-Robbins Ice
Cream Store owner in Houston, Texas had
waited for a better unit than the TURN-
O-MATIC Classic model from before 1967
until the Mark II was introduced. (Pl. -
Ex. 116, pp. 7-22, pg. 48). He charac-
terizes the TURN-O-MATIC Mark II ticket
dispenser as the best piece of equip-
ment he has in the store. (P. Ex. 116,
pp. 8-23).
ae
56 Appendix
82. Extensive sales were made of
both plaintiffs and defendants dis-
pensers embodying the invention. (Pl.
Exs. 10, 25). Th: sales of the "Mark II"
dispenser which was the only type of
dispenser sold by Scandus, Inc. in 1975
(Ericson, pg. 633, Ins. 15-28; Pl. Ex.
151) and of the TAKE-A-TURN dispenser
(Pl. Ex. 135) were far more than double
all the TURN-O-MATIC dispensers sold in
1974.
83. Considering the scope and con-
tent of the prior art, the differences
between the subject matter claimed in
the Ehrlund patent and the prior art and
the level of ordinary skill in the art
claimed in the Ehrlund patent and the
prior art t> which the invention per-
tains, the Ehrlund invention would not
have been obvious to the person of
ordinary skill in that art at the time
Ehrlund made his invention or on the
filing dates of either the Swedish or
United States patent application of
Ehrlund. The Ehrlund invention of the
litigated patent and embodied in defen-
dants' ticket dispenser was not an obvious
development in the material dispensing
technology. Moreover, it is apparent
that the material dispensing industry
with all its progress and expertiese
had not solved the particular problem
which the Ehrlund patent solved.
G. Origin and Introduction of
Defendants' TAKE-A-TURN
Products
84. Immediately upon introduction of
the TURN-O-MATIC Mark II ticket dispen-
ser and tickets, Tveter secretly under-
. took efforts to copy these products.
Defendant Tveter met with defendant
A Sah
‘era
Appendix 57
Nakagawa, and with a TURN-O-MATIC Mark II
dispenser defendant Nakagawa formulated
the design drawings for a ticket dispen-
ser to be marketed by Tveter. (Tveter,
pg. 720, lns. 9-22; Nakagawa, pg. 933,
ins. 3-73 Pl. Re. 157, pg. 47). On
February 14, 1974, less than a month after
the date of the announcement of the Mark
II dispenser to Tveter from Sweden, Naka-
gawa's company Prodeco made a quotation
to Tveter of $23,862.00 for the tooling
to make the ticket dispenser for Tveter
and of $1,825.00 for the parts of one
thousand dispensers. (Tveter, pg. 719,
ln. 17 = pg. 720, ln. 8; Nakagawa, pg. 930,
Ins. 20-27; Pl. Ex. 49).
85. On May 14, 1974, Tveter entered
into a contract with one John Ostrowski
to print and provide to Tveter tickets
of an old style to fit TURN-O-MATIC
"Classic" dispensers then presently in
operation and a new style to fit Tveter's
copy of the TURN-O-MATIC Mark II dispen-
ser, the latter tickets virtually iden-
tical to the TURN-O-MATIC tickets of
plaintiffs then being sold by Tveter
for the TURN-O-MATIC "Mark II" dispenser.
(Tveter, pg. 721, ln. 1 - pg. 722, ln. 5;
Pl. Ex. 106).
86. On May 28, 1974, Tveter issued
a purchase order to a company, Total
Technology, for 1,000 indicators.
(Tveter, pg. 722, lns. 6-24; Pl. Ex. 43,
43A).
87. On June 1l, 1974, Tveter issued
a purchase order to Prodeco for the
tooling for the ticket dispenser for an
amount of $23,880.00. (Tveter, pg. 723,
lns. 1-12; Pl. Ex. 52). The purchase.
order was accepted by Nakagawa the same
day and within the next two days the
58 Appendix
arrangement was finalized by first the
- Prodeco quotation of $23,312.80 for the
tooling and sales tax and then Tveter's
down payment. (Tveter, pg. 723, lns.
13-24; Pl. Ex. 53). These molds were
not completed until December, 1974. No
model or prototype of a ticket dispenser
designed by Nakagawa for Tveter was
made prior to actually assembling dis-
penser parts made from the completed
molds purchased by Tveter from Nakagawa.
(Tveter, pg. 727, In. 25 - pg. 728, ln.
5; pg. 724, Ins. 3-9).
88. Defendant Tveter started selling
his own number indicator on about Nov-
ember 12, 1974 under the name TAKE-A-
TURN. (Tveter, pg. 722, lns. 12-28;
Pl. Ex. 154). Although this indicator
displayed the number by lights instead
of the mechanically rotating numbers in
the TURN-O-MATIC unit, the TAKE-A-TURN
indicator is substantially the same size
as the TURN-O-MATIC indicator, includes
the same words "Now Serving" above the
indicator number and includes the name
"TAKE-A-TURN" in the same location
below the indicator numbers as the
trademaz.. "TURN-O-MATIC" appearing on
plaintiff's indicator. (Ericson, pg. 578,
lns. 16-22; Tveter, pg. 722, lns. 10-28;
Pl. Exs. 23B, 42, 42A, 43, 43A).
89. In or about December 16, 1974
defendant Tveter first offered for sale
and sold his TAKE-A-TURN tickets. (Pre-
trial 0. pg. 10, 427; Pl. Ex. 1297). By
January 3, 1975, to the same customers
to whom he had been selling TURN-O-MATIC
products, defendant TIveter was selling
his tickets virtually identical to the
"Classic" and “Mark II" tickets, but
including the name "TAKE-A-TURN" instead
of "TURN-O-MATIC". (Pre-Trial 0. pg. 10,
tee
ms
ie
Appendix 59
426; Tveter, pg. 725, lns. 6-15; pg. 813,
‘Ins. 8-12; Pl. Exs. 106, 153).
90. When he had his TAKE-A-TURN dis-
penser, an illustrative brochure and TAKE-
A-TURN tickets ready, defendant Tveter,
by letter dated January 8, 1975, termina-
ted his distributorship agreement with
AB Scandus and. Scandus, Inc. with the
stated effective termination date of
January 10, 1975. (Tveter, pg. 727, ln.
16 - pg. 729, In. 16; Pl. Exs. 21, 24).
91. On the termination date of
January 10, 1975, Tveter appeared in the
offices of the purchasing agent for
Baskin-Robbins, one of the largest users
of TURN-O-MATIC equipment, and displayed
for sale his TAKE-A-TURN dispenser and
tickets. (Tveter, pg. 729, ln. 17 -
pg. 731, ln. 25). From his meeting at
Baskin-Robbins Tveter went on to pre-
sent proposals to other companies such
as Sears, Roebuck & Co., Montgomery
Ward and other customer-distributors to
whom he had been selling TURN-O-MATIC
products. (Tveter, pg. 732, lns. 1-19;
Pl. Ex. 61A-61D).
92. On the termination date of
January 10, 1975, Tveter appeared in the
offices of the purchasing agent for
Baskin-Robbins, one of the largest
users of TURN-O-MATIC equipment, and dis-
played for sale his TAKE~-A-TURN dispen-
ser and tickets. (Tveter, pg. 729, ln. 17
pg. 731, ln. 25). From his meeting at
Baskin-Robbins Tveter went on to present
proposals to other companies such as
Sears, Roebuch & Co., Montgomery Ward and
- other customer-distributors to whom he
had been selling TURN-O-MATIC products.
(Tveter, pg. 732, lns. 1-19; Pl. Ex.
61A-61D).
7e
60 Appendix
93. The first models of the TAKE-A-
-TURN dispenser were virtually identical
to the TURN-O-MATIC Mark II dispenser
right down to the almost identical color.
(P. Exs. 10, 21). Later, other colors
were used (Tveter, pg. 819, In. 28 - pg.
820, ln. 14), but the only differences
were slight changes from the exterior
appearance of the TURN-O-MATIC Mark II
dispenser, such as the deletion of the
rounding of certain surfaces and the dele-
tion of the ribs at the rear mounting
portion. (Pl. Exs. 10, 21, 25, 70-60C).
The TAKE-A-TURN ticket dispenser holding
cavity and ticket strip rolls were
therefore slightly narrower than the TURN-
O-MATIC Mark II dispenser cavity and
ticket strip rolls, and the casing tongue
in the first TAKE-A-TURN dispensers (P.
Ex. 21) was substantially narrower than
the casing tongue in the TURN-O-MATIC
Gispenser. (Chilton, pg. 458, lns. 22-28,
pg. 740, lns. 1-7; Pl. Ex. 21, 25, 106).
It is difficult to tell which dispenser
is which even with the two dispensers
positioned side-by-sid«c. (Pl. Exs. 10,
25, 70-70C, 90C, 157 pp. 33-34).
94. The TAKE-A-TURN dispenser is
such an exact copy of the TURN-O-MATIC
dispenser that even the structural
changes between the TURN-O-MATIC proto-
type (Pl. Ex. 90) and final production
version (Pl. Ex. 10) are incorporated
in the TAKE-A-TURN dispenser (Pl. Ex. 25),
namely, 1) the cooperating ridges of
cover and latch, 2) one front angled side
surface of the casing, 3) the ridge
inside the cover, 4) the two tabs on the
cover, and 5) the semi-cylindrical mating
projection and recess on one side of the
casing and cover respectively. (Ehrlund,
F
:
Appendix 61
pg. 169, ln. 1 - pg. 170, ln. 20; Honeker,
Exs. 72, 90D; Def. Exs. Q2, Q3, Q4).
While making the drawings on which Naka-
gawa later presented his quotation on
February 14, 1974, Nakagawa had a TURN-O-
MATIC Mark II dispenser to work from.
(Nakagawa, pg. 933, Ins. 3-7; Pl. Ex. 157,
pg. 47). Nakagawa presented his drawing
and a TURN-O-MATIC dispenser to a mold
maker, Klaus Honeker, to obtain a quote
on making the mold for the TAKE-A-TURN
dispenser. (Honeker, pg. 1154, ln. 16 -
pg. 1155, in. 15). In order for Mr.
Honeker to make the mold for the TAKE-A-
TURN, he would have had to have a drawing
or a mold or his customer's request that
detailed those individual features of the
TURN-O-MATIC Mark II dispenser that were
incorporated into the TAKE-A-TURN dispen-
ser. (Honeker, pg. 1159, ln. 9 - pg. 1160,
ine: 33S)
95. Even Fred Wagner, Tveter's own
customer-distributor first for TURN-O-
MATIC products and later for TAKE-A-
TURN products, believed the TAKE~-A-TURN
dispenser had been copied from the
TURN-O-MATIC Mark II dispenser. (Wagner,
pg. 965, lns. 10-28; Pl. Ex. 65; Tveter,
pg. 746, ln. 3 = pg. 747, in. 21).
96. The evidence presented at trial
establishes that defendants Tveter and
Prodeco copied plaintiffs' patented
product. (Tveter, pg. 719, ln. 17 - pg.
720, In. 223 pg. 738, ln. 33 pg. 741,
ln. 12; Nakagawa, pg. 933, Ins. 3-7, 12-
14; Ehrlund, pg. 169, in. pA bad pg. 170,
ln. 20; Honeker, pg. 1154, ln. 16 - pg.
1162, In. 17; Wagner, pg. 965, ins. 10-
28; Pl. Ex.s. 10, 25, 70, 7OA, 72, 73A,
90, 140, 157 pg. 47; Def. Ex. Q2, Q3, Q4).
etd
62 Appendix
97. The TURN-O-MATIC Mark II was
easier and less expensive for Tveter to
copy. (Pl. Ex. 157, pg. 12, in. 16 =
pg. i3,. in. 6, pg. 14).
. 98. Within four months after Tveter
began the sale and distribution of his
TAKE~A-TURN customer numbering system
including the sale of "Classic" style
tickets to fit "“TURN-O-MATIC" "Classic"
ticket dispensers, he discontinued the
sale of "Classic" style tickets because
it was easier and cheaper to give away one
of his TAKE-A-TURN ticket dispensers
copied from the TURN-O-MATIC Mark II dis-
penser with the sale of new style TAKE-A-
TURN tickets copied from the TURN-O-MATIC
Mark II tickets than to repair or ser-
vice an old style TURN-O-MATIC "Classic"
model dispenser. (Tveter, pg. 747, In. 28 -
pg. 748, ln. 23).
99. The original and all subse-
quent models of the TAKE-A-TURN dispen-
ser have included the mark "TAKE-A-TURN"
embossed on the closing latch on the
front of the dispenser in the same loca-
tion, style and lettering as the TURN-O-
MATIC Mark appears on the front of the
TURN-O-MATIC dispenser. (Tveter, pg.
743, Ins. 13-20; Pl. Exs. 21, 25, 73,
90C).
100. The bulk of Tveter's imitation
dispensers, even today employ virtually
an identical color scheme; the body and
cover are red in color like the TURN-0O-
MATIC Mark II, the hinge pins connecting
the cover to the casing, the mounting
bracket, and the closing latch cn the
front of the TAKE-A-TURN dispenser are
black in color like the TURN-O-MATIC
Mark II.
Appendix 63
101. For the front of his first bro-
chure, Tveter used the same format and
text with minor caption changes from a
brochure (Pl. Exs. 23B, 132) which he had
used for the distribution of the TURN-O-
MATIC Mark II dispenser and which had
been paid for in large measure by Scandus,
Inc. and the other TURN-O-MATIC national
distributor. (Tveter, pg. 870, lns. 17-
20, pg. 918,. ln. 12 - pg. 919, ln. 18; Pl.
Ex. 156). MTveter merely substituted for
the photograph of the TURN-O-MATIC dis-
penser a photograph of the TAKE~A-TURN
dispenser taken at a similar angle and
distance and changed the words TURN-O-
MATIC to TAKE~A-TURN wherever they
appeared. The picture's format and
language are arranged in such a way
that one cannot easily distinguish the
two brochures or the products they
exhibit. (Pl. Exs. 23B, 24, 143; Ericson
pg. 616, ln. 12 - pg. 617, ln. 22; Tveter,
pg. 719, lns. 5-16). The identity of the
dispenser illustrated in Tveter's seco i
brochure is even harder to distinguish.
(Ericson, pg. 617, lns. 23- pg. 618,
ln. 13; Pl. Ex. 63).
102. The Tveter initation ticket dis-
penser is operated in exactly the same
manner as the Ehrlund patented invention
and the TURN-O-MATIC Mark II dispenser
to dispense in a one-hand, one-step opera-
tion the end ticket from a strip roll that
has punched lines equally spaced apart
along the length of the strip forming
flaps directed forward in the feeding
direction of the strip. (Ehrlund, pg.
214, In. 25 = pg. 215, ln. 8; Chilton,
pg. 494, ln. 19 - pg. 495, ln. 3).
103. At least some of the TAKE-A-
TURN ticket dispensers exhibited opera-
Seow:
ty.
ee pee nner ~
—— —- +
64 Appendix
tional difficulties, such as more than
one ticket being dispensed at a time.
(Pratt, pg. 277, ln. 27 - pg. 278, in.
14; Burgess, pg. 311, lns. 1-10; Robb,
pg. 400, Ins. 12-19; Graham, pg. 416,
ln. 20 - pg. 417, ln. 3; Tweter, pg. 734,
in. LF =pgs. 735,.In. 63; Bricson, pg.
679, ln. 23 - pg. 680, In. 1; Pl. Exs.
21, - 6, 116 pp. 12-16,.& Ex. JB-3).
Tveter attempted to solve problems by
modifying dispensers, sometimes in
the field, by grinding off part of the
cover between the depending tabs and
by adding tape on the casing tongue.
(Tveter, pg. 743, In. 18 - pg. 746, ln.
2; Pl. Ex. 143). In order to experiment
with possible changes in the TAKE-A-TURN
dispenser, Tveter had the bottom front
portion of one of his dispensers con-
taining the narrow casing tongue removed
and replaced with a plastic part inclu-
ding a wider casing tongue portion sub-
stantially the same width as the casing
tongue portion of the TURN-O-MATIC dis-
penser. (Tveter, pg. 738, ln. 3 ppg. 741,
ln..23 Pl. Exs. 21, 25, 913). In about
April, 1975 the molds for the TAKE-A-
TURN ticket dispenser were modified to
provide an increased width to the casing
tongue portion of the TAKE-A-TURN.
dispenser to be substantially the same
width as the casing tongue of the TURN-O-
MATIC dispenser. (Tveter, pg. 740, ln. l-
pg. 741., ln. 5). Also on subsequent
units, a bar was added to the lower front
portion of the TAKE-A-TURN dispenser.
(Tveter, pg. 737, Ins. 22-25).
104. Prodeco sells the TAKE-A-TURN
dispenser to Tveter without cover and
casing assembled and without the bar.
(Tveter, pg. 742 lns. 24-27).
»*-*
Appendix 65
105. Often Tveter ships his TAKE-A-
TURN dispenser and tickets together
(Tveter, pg. 821, lns. 1-4) and often the
dispenser and tickets are part of the
same transaction (Pl. Exs. 129D, H, T, 61B,
116 Pg. 37, 117BB-3, Emanual, pg. 287 lns.
104).
106. The first time Mr. Ericson saw
a TAKE-A-TURN dispenser was in late
February, 1975 in a Baskin-Robbins store
in New Orleans. The store owner Wayne
Lassen had ordered a TURN-O-MATIC Mark II
dispenser from a TURN-O-MATIC brochure
provided by Tveter's Texas distributor.
Lassen received a TAKE-A-TURN dispenser,
and Mr. Ericson was first to inform
Mr. Lassen that they had not received a
YTURN-O-MATIC dispenser. Mr. Ericson
acquired that TAKE-A-TURN dispenser.
(Ericson, pg. 603 In. 28 - pg. 607 ln. 21;
Pl. Exs. 21, 22, 23A-D, 108).
107. After discovery and examination
of the Tveter TAKE-A-TURN dispenser,
plaintiffs informed certain parties that
a patent application was pending on the
TURN-O-MATIC Mark II dispenser. By a
copy of a letter from plaintiffs’ —
attorneys, parties were informed of the
patent rights plaintiffs expected to have
when the patent issued. Plaintiffs
informed certain parties only that legal
action would be taken once the patent
issued. (Ericson, pg. 645 ln. l - pg.
647 ln. 17 = pg. 708 ln. 3 - pg. 709
ln. 1; Pl. Ex. 65; Def. Ex. AW). After
the patent issued and suit had been
brought against Tveter, but before the
hearing on plaintiffs' motion for pre-
liminary injunction when Fred Wagner was
selling the TAKE-A-TURN dispenser, plain-
tiffs' attorneys put Fred Wagner on
66 Appendix
notice of the pending motion. (Wagner,
pg. 95 ln. 27 - pg. 953 In. 28; Def.
Ex. AE). Also after the patent issued
plaintiffs’ attorneys put Nakagawa on
notice that he would be sued, and he was
in fact sued. (Def. Ex. AD). It was
not established that plaintiffs intimi-
dated anyone either in the United States
or elsewhere by threat of bringing in-
fringement action before the patent
issued May 27, 1975 or in a foreign
country.
H. Infringement of the Ehrlund
Patent by the TAKE-A-TURN
Dispenser
108. The TAKE-A-TURN dispenser, like
the TURN-O-MATIC Mark II dispenser and
the invention of the Ehrlund patent,
has a casing with a second guidance
means to guide the strip, a flange or
separation unit, and means on both sides
of the flange or separation unit connec-
ting the base of the flange or separa-
tion unit to the side walls of the casing.
The ticket strip has lines forming
equally spaced apart tongues directed in
the feeding direction for the strip. The
cover of the dispenser connected to the
casing is provided with a first guidance
means in the form of an outwardly
extending first portion and a downwardly
extending second portion with the cover
first guidance means spaced from the
casing second guidance means to pass the
strip. The flange or separation unit
has a trapezoid shape corresponding to
the shape of the bottom part of the
ticket tongue. The ticket strip comes
off the roll, is guided over the casing
tongue in contact with the side connec-
ting means, and extends downward between
Appendix 67
the end of the flange and downwardly
extending portion. A pull on the exposed
flap or ticket tongue at the end of the
ticket strip advances the ticket strip
along a predetermined path such that the
lead portion of the succeeding ticket is
carried out and down and then the
succeeding ticket tongue is guided along
One path and the remainder of the leading
ticket along another path so that the
pulled ticket is torn off at the sides
of the flange or casing tongue leaving
the flap of the succeeding ticket car-
ried beyond the end of the casing flange
and down ready to be pulled for the next
ticket. (Ehrlund pg. 183 ln. 21 - pg. 190
ln. 17; pg. 192 ln. 22 = pg. 198 ln. 24,
Chilton pg. 485 ln. 23 - pg. 493 ln. 2;
Pln. Exs. 1, 25 69A1-69Cl, 70).
109. In the operation of the TAKE-A-
TURN dispenser the ticket strip contacts
the edges on either side of the casing
flange or separation unit. (Chilton,
pg. 506 ln. 5 - pg. 508 ln. 1; Myronuk,
pg. 1004 ln. 24 - pg. 1005 ln. 2 —- pg.
1074 In. 26 - pg. 1077 In. 9; Def. Ex.
BO). Wear on these edges would indicate
contact of the ticket strip there (My-
ronuk, pg. 1076 ln. 25 = pg. 1077 ln. 9 -
pg. 1183 ln. 13 - pg. 1184 ln. 15), and
there was wear on such edges of a TAKE-
A-TURN dispenser that had been in use
in a retail store. (Myronuk, pg. 1187
ln. 22 a Pg. 1189 ln. 5; Pl. Ex. 143).
Defendants' own artist's drawing of the
operation of defendants' device shows
the ticket strip of the TAKE-A-TURN
device in contact with the tear off
edges. (Def. Ex. BO view CC; Myronuk,
pg. 997 ln. 13 = pg. 998, In. 15 — pg.
1076 ln. 16 = pg. 1076 In. 24).
_ --
peu
68 Appendix
110. In the defendants' TAKE-A-TURN
ticket dispenser the free end of the
ticket. strip is not torn solely by virtue
of the frangibility of the paper. When
the end of a string of tickets extending
from the TAKE-A-TURN ticket roll sepa-
rate from the TAKE-A-TURN dispenser is
pulled, the single end ticket tears off.
When the end of a string of tickets
extending from the TAKE-A-TURN ticket
roll and protruding out the exit opening
of defendants’ TAKE-A-TURN dispenser is
pulled, the whole string of tickets tears
off at the casing flange of the dispenser.
In the latter case if the ticket strip
tore solely by virtue of the frangibility
of the paper, the single end ticket
rather than the whole string would tear
off. (Ehrlund pg. 215 ln. 11 - pg. 217
ln. 14; Pl. Ex. 142; Chilton, pg. 571
in. 10 - pg. 572 ln. 14; Pl. Ex. 148).
lll. In the defendants’ TAKE-A-TURN
device the ticket tears in the vacinity
of the base of the casing tongue due to
the stress concentration in the paper.
(Chilton, pg. 506 ln. 5 = pg. 508 ln. 17).
112. The defendants' TAKE-A-TURN dis-
penser incorporates all the structural
limitations recited in the claims of the
Ehrlund patent. (Ehrlund, pg. 183 ln. 21 -
pg. 190 ln. 17 - pg. 192 ln. 22 = pg. 198
ln. 24; Chilton, pg. 485 ln. 23 - pg. 493
ln. 2; Pl. Exs. 25, 69A1-69Cl, 70).
113. Even defendants’ expert, Pro-
fessor Myronuk, agrees that the TAKE-A-
TURN dispenser (Pl. Ex. 25) has the
structure of the Ehrlund claims with the
exception that he would not character-
ize the portions or means on either
side of the flange or guidance means
(Pl. Ex. 1, Claims 1 & 2) as “tear-off"
portions or "cutting off" means and
Appendix | 69
would not characterize the flange as
"temporarily arresting movement of the
ticket tongue". (Myronuk, pg. 1115,
ln. 11 - pg. 1125 ln. 25).
114. Besides the structure recited
in the claims of the Ehrlund patent,
the TAKE-A-TURN dispenser has two tabs
projecting inwardly from the down-
wardly projecting portion of the cover
and a bar below the flange of the
casing. (Ehrlund, pg. 225 ln. 26 -
pg. 226 ln. 2; Chilton, pg. 497 lns. 19-
26; Pl. Exs. 25, 72). The tabs and bar
do not eliminate from the TAKE-A~-TURN
dispenser the structure therein corres-
ponding to the structure recited in
the Ehrlund claims. The tabs operate
in guiding the ticket tongue in the
downward direction amd limiting the space
between the downwardly directed portion
of the cover and the casing flange.
(Chilton, pg. 498 lns. 10-17). The
projecting tabs in both the TURN-O-MATIC
Mark II and the TAKE-A-TURN dispensers
do not change the operation of the inven-
tion from that described and illustrated
in the patent, because the entire
succeeding ticket tongue can be removed
and the first ticket will still tear
off. (Ehrlund, pg. 266 ln. 10 = pg. 268
ln. 13). The bar was added to prevent
the user from pulling ticket straight
Tveter, pg. 916 lns. 15-25). It is
possible to pull tickets out of the
TAKE-A-TURN dispenser without touching
the bar. (Tveter, pg. 916 ln. 26 - pg.
917 ln. 14; Myronuk, pg. 1061 lns. 17-
21). Additionally, the addition of the
bar has no bearing on infringement by
Prodeco because Prodeco sells the dis-
penser to Tveter without the bar.
70 Appendix
(Tveter, pg. 742 Ins. 24-27). While a
bunching action of the ticket tongue
may take place in the defendants’ TAKE-
A-TURN dispenser (Myronuk, pg. 1073 lns.
9-20), a bunching action can also take
place in the device in the Ehrlund patent.
(Myronuk, pg. 1074 lns. 4025). The claims
of the Ehrlund patent do not specify
structure or operation that would ex-
clude the use of the bar, the depending
tabs or a bunching action. (Pl. Exs. l,
69A-69C).
115. The TAKE-A-TURN dispenser made
and/or sold by Prodeco and Nakagawa and
made and/or sold by Tveter and SGT, and
the dispenser embodied in the invention
Claimed in Ehrlund U.S. Patent No.
3,885,724 are constructed substantially
the same and operate in substantially
the same way to produce substantially
the same result. (Chilton, pg. 494 ln. 19 -
pg. 495 ln. 3).
116. The TAKE-A-TURN dispenser as
made and/or sold by Nakagawa and Prodeco
embodies the invention claimed in
Ehrlund U.S. Patent No. 3,885,724.
117. The TAKE-A-TURN dispenser as
made and/or sold by Tveter and SGT em-
bodies the invention claimed in Ehrlund
U.S. Patent 3,885,724.
I. Ma*keting of the TAKE-A-TURN
Products
118. Tveter sells his TAKE-A-TURN
ticket dispensers, tickets and/or
number indicators to the same type of
customers and to the very same customers
to whom he formerly sold TURN-O-MATIC
ticket dispensers, tickets and/or number
indicators. (Tveter, pg. 750 ln. 27 -
pg. 751 ln. 24).
Appendix | 71
119. MTveter sells his components
for his TAKE-A-TURN customer numbering
system, including his ticket dispenser
and number indicator, under the same
part numbers under which he sold the
components for the TURN-O-MATIC customer
numbering system, and sales of TAKE-A-
TURN products are made to identical cus-
tomers to whom Tveter formerly sold
TURN-O-MATIC products under identical
part mimbers. (Tveter, pg. 713 ln. 3 -
pg. 714 ln. ll: pg. 750 ln. 27 = pg.
751 ln. 24; Pl. Exs. 136, 61A-61D).
120. Tveter has included on one
side of certain of his dispensers a
silver label that includes the trade-
mark TAKE-A-TURN in the manner and
style in which the TURN-O-MATIC trade-
mark is used and the name SGT Enter-
prises. (Tveter, pg. 822 lns. 13-26;
Def. Ex. 0)
121. Tveter uses the word "TAKE-A-
TURN” as a trademark and has filed an
application to register the trademark
TAKE-A-TURN. There is no evidence in
the record of the prosecution of the
trademark application before the Trade-
mark Office that the Office was aware
of either the use or registration of the
TURN-O-MATIC trademark by plaintiff for
identical goods sold to the same type of
customers or that Tveter had called
attention to such use or registration
or to the fac’: that plaintiffs had
sued Tveter for trademark infringement
of the TURN-O-MATIC trademark by his use
of the trademark TAKE-A-TURN. (Pl. Ex. 154;
Tveter, Pg. 765 In. 27 ~. Pg. 766 ln. 2).
122. MTveter's customers associated
him with TURN-O-MATIC products and con-
tinued to order TURN-O-MATIC brand
72 Appendix
products from him after he terminated his
distributorship agreement. (P. Exs. 129-0,
129-R, 129-K, 129-V, 129-G, 129-H, 129-I,
129-E, 129-D, 129-P, 127-Q).
123. On his invoices Tve’ zr used
the word “ours” to refer to tickets
Tveter made, as opposed to tickets made
by plaintiffs. The decision to do this
was made by defendant Tveter. (Tveter,
pg. 787 ln. 6°8). He also used the
designation "TAT" or "T.A.T." to desig-
nate the sale of TAKE-A-TURN brand pro-
ducts as distinguished from the same of
TURN-O-MATIC brand products. (Pl. Exs.
129-H, 129-I, 129-P, 129-Q). MTveter
used the designation "(old) (ours)" on
his internally generated purchase
orders and invoices to indicate when.
he sold TAKE-A-TURN tickets of
his own manufacture designed to
fit the TURN-O-MATIC Classic ticket dis-
penser. (Tveter, pg. 780 ln. 23 -
pg. 781 ln. 6, pg. 786 ln. 7 - pg. 787
ln. 29). Tveter used the design " (new)
(ours)" on his internally generated
purchase orders and invoices to indicate
when he was. selling TAKE-A-TURN tickets
designed to fit the TAKE-A-TURN dispen-
ser or TURN-O-MATIC Mark II dispenser
of his own manufacture, and not those
tickets made by plaintiffs. Tveter
used the designation "(Swedish)" on in-
ternally generated purchase orders and
invoices to identify his sale of
plaintiff's TURN-O-MATIC brand tickets.
(Tveter, pg. 805 lns. 28-25; Pl. Ex. 129-G).
124. Tveter would sell plaintiffs'
"Classic" model TURN-O-MATIC tickets
and his own "Classic" model TAKE-A-TURN
tickets for the same price. (Tveter,
pg. 794 ln. 11 - pg. 796 ln. 11). In
such cases the customer did not save
money by receiving TAKE-A-TURN tickets
°°.
Appendix 73
rather than TURN-O-MATIC tickets.
125. Contrary to defendant Tveter's
assertion that price is an important
factor in the purchase of ticket dis-
pensers and tickets, many customers
stated that the price was not as impor-
tant as proper operation or service.
(Graham, pg. 422 ln. 14 - pg. 423 ln. 4;
Baxter, pg. 971 ln. 23 - pg. 972 ln. 25;
Burgess, pg. 304 lns. 19-25; Mar, Pl.
Ex. 123 pg. 14 lns. 5-12; Wagner, pg.
950 lns. 18-24).
126. Tveter uses the name and mark
TAKE-A-TURN on his price list and
invoices in the same location, manner
and style in which he formerly used
the name and mark TURN-O-MATIC. (Pl.
Exs. 136, 61-A, 61-C, 153, 129-I).
J. Trademark Infringement,
Production Simulation and
Palming Off
127. The marks TURN-O-MATIC and
TAKE-A-TURN are similar in sound, in
appearance and in meaning. Both begin
with the same sound, have short
beginning and ending words hyphenated
against a single middle letter and are
used in identical ways and locations on
the products of plaintiffs and defendants.
Both contain as a dominant part the work
"TURN". The following are rubbings made
directly from the identical location on
plaintiffs' and defendants’ dispensers
showing the respective marks of the
parties as used on sng oe
Son ~~ oO meagre <eeme-w-—e + nine £- Gene a tnpartecubarennsge eee
=, ; 4
74 Appendix
128. Tveter's TAKE-A-TURN products
(ticket dispensers, tickets and number
indicators) are identical to plaintiffs'
TURN-O-MATIC products in function and
appearance. (Pl. Exs. 10, 25, 42A, 43A,
106).
129. The evidence from many witnesses
and exhibits establishes trademark infringe-
ment, product simulation and passing off.
130. William Graham, the hard-
ware buyer for Truitt and White Lumber Co.
in Berkeley, California, defendants'
customer, is responsible for the purchase
of tickets, indicators and ticket dispen-
sers for that store. (Graham pg. 412 ln.
10-19). He received the TAKE-A-TURN
ticket dispenser after making a call to
SGT Enterprises to buy more tickets for
the Classic dispenser (like Pl. Ex. 7-B).
He was told that the tickets for the
original dispenser no longer were avail-
able to SGT Enterprises because of an
increase in the cost of paper and that
a salesman would be by to exchange the
Classic for a new dispenser that would
handle a new form of ticket at a lower
cost. (Graham pg. 413 ln. 16-27). The
new dispenser was supplied at no charge
to the customer (Pl. Ex. 122 WG-3).
Neither the salesman nor the person with
whom Graham talked on the phone at
SGT Enterprises ever told him that the
new dispenser was not a TURN-O-MATIC or
that SGT Enterprises now sold TAKE-A-
TURN and not TURN-O-MATIC. (Graham
pg. 413 ln. 28 - pg. 415 ln. 13).
131. Tveter's customer Graham believed
that the brand name of the TAKE-A-TURN
dispenser he received was TURN-O-MATIC
since he was familiar with the indica-
tor and Classic dispenser as being
Appendix 75
TURN-O-MATIC brand, and neither his
conversations or written communications
with SGT Enterprises, nor the labeling
of the TAKE-A-TURN dispenser, did any-
thing to disspell that belief. (Graham
pg. 414 ln. 16 - pg. 415 ln. 20, pg.
425 ln. 13 = pg. 426 ln. 2).
132. Defendants' customer Graham
assumed that the TAKE-A-TURN ticket dis-
penser was probably made in Sweden, since
he was familiar with TURN-O-MATIC pro-
ducts and knew that they were made in
Sweden. (Graham pg. 414 ln. 28 - pg.
415 ln. 2). |
133. The TAKE-A-TURN ticket dis-
penser operated poorly at Truitt and
White Lumber Co. Instead of dispensing
tickets one at a time, they came out in
a continuous stream. Truitt and White
found that the Classic TURN-O-MATIC
ticket dispenser had operated better
than the TAKE-A-TURN ticket dispenser,
and even tried to get the Classic model
back from SGT Enterprises, but was told
that they did not handle the Classic
anymore. (Pg. 46 ln. 20 - pg. 417 In. 24).
Truitt and White called SGT Enterprises
and mentioned the failing of the TAKE-A-
TURN ticket dispenser probably three
times. SGT Enterprises did eventually
come out and put some red cloth tape
on the tongue at the bottom of the dis-
penser which helped it to work a little
bit better. (Graham pg. 417 ln. 25 = pg.
439° 18.20).
134. The most important factor in
the choice of a ticket dispenser to
defendants’ customer Graham is that the
ticket dispenser work properly so that a
single ticket comes out each time.
Price is not an important factor to him
i
76 Appendix
or to Truitt and White, and in fact they
would pay a higher price for something
that would give them good service as
they did in purchasing a TURN-O-MATIC
Mark II ticket dispenser, to replace the
free TAKE-A-TURN ticket dispenser. (Gra-
ham pg. 419 ln. 21 - pg. 420 ln. 12,
pg. 422 ln. 14 - pg. 423 ln. 9).
135. The TAKE-A-TURN and Mark II
TURN-O-MATIC ticket dispensers looked
confusingly similar in appearance to
defendants’ customer Graham. At a
quick glance he could not really tell
them apart until he took a detailed
look at them. (Graham pg. 420 ln. 20 -
pg. 421 ln. 11). Defendants' customer
William Graham testified that the marks
TAKE-A-TURN and TURN-O-MATIC were simi-
lar to him in appearance, (Graham,
pg. 416 ln. 10-16, pg. 424 In. 22 - pg.
425 ln. 1), in sound (Graham, pg. 416
ln. 17-18), and in meaning (Graham,
pg. 416 ln. 19). Although color made
a difference to Mr. Graham, he pur-
chased a red ticket dispenser, the color
which both the TURN-O-MATIC and the
TAKE-A-TURN came in. (Graham pg. 426
ln. 9-16, Pl. Ex. 25, Pl. Ex. 10).
136. Wayne Lassen, the owner of a
Baskin-Robbins store in New Orleans,
Louisiana, ordered a TURN-O-MATIC Mark
II ticket dispenser from a brochure
(Pl. Ex. 108, pg. 14 ln. 5 = pg. 15,
ln. 24). Tveter's customer/distributor,
TURN-O-MATIC of Texas, sent Mr. Lassen
a TAKE-A-TURN dispenser in response to
his order from the TURN-O-MATIC brochure
(Pl. Bx. 21; Pl. Be. 108, pg. 15 ln. 25 -
pg. 19 ln. 1). Although Mr. Lassen
thought the dispenser looked cheap com-
pared to the dispenser shown in the
picture in the brochure (Pl. Ex. 108,
ee oe ee
eee te
Appendix 77
pg. 12 ln. 12-21) he was unaware that
the unit he received in response to his
order for a TURN-O-MATIC dispenser was
in fact defendants' TAKE-A-TURN dispenser
until Mr. Ericson visited him in his
store. (Pl. Ex. 108, pg. 19 In. 22 -
pg. 20 ln. 20, pg. 26 ln. 9-17).
137. After Mr. Lassen received the
TAKE-A-TURN dispenser in response to
his order for TURN-O-MATIC dispenser he
was confused by the similarity between
what he ordered and what he received (Pl.
Ex. 118, pg. 21 ln. 5 = pg. 22 ln. 16;
Def. Ex. BA-1 pg. 64 ln. 1-13).
138. The only difference Mr. Lassen
noticed between the TAKE-A-TURN dispenser
which he received (Pl. Ex. 21) and the
TURN-O-MATIC ticket dispenser which he
ordered (Pl. Ex. 23-B) was that the
color of the TAKE-A-TURN dispenser looked
a duller red, (Pl. Ex. 108, pg. 27 ln.
1-10, pg. 36, In. 4 = pg. 37 ln. 18) but
this difference was insufficient to make
him realize that he was not shipped what
he had ordered (Pl. Ex. 108).
139. Baskin-Robbins in New Orleans
was forced to purchase a new ticket dis-
penser because it was told that tickets
were no longer available for the TURN-
O-MATIC Classic ticket dispenser which
had come with the store's purchase.
Mr. Lassen had expected that he would be
able. to get tickets for that dispenser
and be able to continue using it. He
was displeased when he found out that
he had to buy a new ticket dispenser
because tickets were unavailable for
the TURN-O-MATIC Classic. (Pl. Ex. 108,
pg. 15 ln. 7-19) Lassen had a choice
between a TURN-O-MATIC dispenser and a
TAKE-A-TAB dispenser (Pl. Ex. 44-B) for
°°.
78 Appendix
. the same price and selected the TURN-O-
MATIC dispenser. (Pl. Ex. 23-A, Pl. Ex.
108, pg. 11 In. 10-11, pg. 15 ln. 20-24).
Baskin-Robbins in New Orleans did not
receive a free exchange of the TAKE-A-
TURN dispenser for the Classic TURN-O-
MATIC dispenser, but was charged $15
for the new dispenser. (Pl. Ex. 23-D,
Pl. Ex. 108, pg. 15 ln. 20 - pg. 18
In. 14)
140. The TURN-O-MATIC of Texas letter
to customers (Pl. Ex. 23-A) effected pas-
sing off of Tveter's TAKE-A-TURN dispen-
ser as plaintiff's TURN-O-MATIC Mark II
dispenser by implying that the manufac-
turer of "TURN-O-MATIC dispenser and
tickets" was "our supplier [who is]
setting up domestic production with a
newly designed dispenser and tickets."
(text of Pl. Ex. 23-A)
141. Tveter's customer/distributor,
TURN-O-MATIC of Texas, was able to pass
off upon its customer, Baskin-Robbins in
New Orleans, Louisiana, a TAKE-A-TURN dis-
penser as a TURN-O-MATIC Mark II ticket
dispenser because of the similarity in
appearance between the TURN-O-MATIC
Mark II dispenser portrayed in the bro-
chure and the TAKE-A-TURN dispenser
which Lassen received. (Pl. Ex. 108;
Ex. 23-B, Ex. 25 and Ex. 10)
142. The owner and manager of the
Baskin-Robbins ice cream store in
Houston, Texas was. shown and demonstrated
a TURN-O-MATIC Mark II ticket dispenser
‘by a customer/distributor of Tveter, Ed
Cole of TURN-O-MATIC of Texas. (Pl. Ex.
116, pg. 9 In. 6 = pg. 11 In. 5) On
seeing the success of the operation of
the TURN-O-MATIC Mark II dispenser, Mr.
Bogue ordered the TURN-O-MATIC dispen-
ser from the distributor (Pl. Ex. 116,
Appendix 79
pg. 11 In. 4-14). The distributor sent
Mr. Bogue one of defendants’ TAKE-A-TURN
ticket dispensers. Only after the TAKE-
A-TURN dispenser failed to operate .
satisfactorily, did Mr. Bogue discover
that he had been sold a TAKE-A-TURN
dispenser instead of the TURN-O-MATIC
brand dispenser which had been demonstra-
ted to him and which he had ordered (Pl.
Ex. 116,: pg. 14: In.:1 = pg. s3: in. 12)
143. Mr. Bogue expressed his dissa-
tisfaction to Tveter's customer/distribu-
cor with the TAKE-A-TURN dispenser and
the distributor sent Mr. Bogue another
TAKE-A-TURN dispenser, this time with
a bar. This dispenser operated as poorly
as the first TAKE-A-TURN dispenser he
received. (Pl. Ex. 116, pg. 14 ln. 19 -
pg. 15 ln. 14) Mr. Bogue then got
the address of defendant SGT Enterprises
in California and wrote them specifically
asking for the TURN-O-MATIC ticket dis-
penser. He specifically underlined
TURN-O-MATIC (pg. 63 ln. 25 = pg. 64 ln. 1)
and asked them to send him a TURN-O-MATIC
or let him know who was handling the
TURN-O-MATIC equipment. (Pl. Ex. 116, pg.
13 In. 14-25, pg. 34 ln. 11-23, pg. 36
ln. 4-13) Mr. Bogue never received any
written reply to his letter (Pl. Ex. 116,
pg. 19-24), but did receive a third TAKE-
A-TURN ticket dispenser from SGT Enterpri-
ses (Pl. Ex. 116, pg. 14 ln. 1-6, pg. 36
ln. 24 - pg. 37 In. 22). By this time
Mr. Bogue was aware that it was the same
type of dispenser as the two he had
previously received from Ed Cole. (Pl.
Ex. 116, pg. 14 ln. 7-9, pg. 37 ln. 3-7)
144. Knowing that the TAKE-A-TURN
dispenser which he received from SGT
Enterprises was not the TURN-O-MATIC unit
which had been demonstrated to him,
80 Appendix
Mr. Bogue then called the regional office
of Baskin-Robbins, which called SGT
Enterprises, and SGT Enterprises then
called Mr.. Bogue. The woman who called
from SGT Enterprises did not say a word
about TURN-O-MATIC. She did not tell
Mr. Bogue they were not handling TURN-
O-MATIC. When Mr. Bogue asked if she
was the TURN-O-MATIC dealer she did not
Say anything. When Mr. Bogue asked for
a TURN-O-MATIC dispenser and tickets,
she did not reply but hung up the phone
on him. (Pl. Ex. 116, pg. 16, ln. 8 -
pg. 17 ln. 4, pg. 61 In. 14 - pg. 62
ln. 19)
145. Then Mr. Bogue wrote a letter
to Mr. Gary Staiti at Baskin-Robbins'
headquarters in Burbank, California (Pl.
Ex. 116, pg. 17 ln. 18-24). Mr. Bogue
asked Mr. Staiti to supply him with the
name of the distributor for the TURN-
O-MATIC products. He explained that a
new type of dispenser had been demon-
strated to him in Texas, that he had
ordered it, and that he had received a
useless substitute rather than the
machine he had ordered. He explained how
he then wrote to SGT Enterprises in
San Jose to inquire about TURN-O-MATIC
equipment and they shipped him the same
phony dispenser which, again, was not the
one which had been demonstrated to him.
(Pl. Ex. 116, pg. 17 ln. 18 = pg. 20
ln. 1; Pl. Ex. 116-JB-3)
146. Mr. Bogue was completely
dissatisfied with the operation of the
TAKE-A-TURN dispenser. He described
the tickets as coming out of it like
toilet paper (Pl. Ex. 116, pg. 15 ln.
12-14). Mr. Bogue characterized the
TAKE-A-TURN. dispenser as “the phoniest
thing they've ever put on the market."
men a em em me ° . 2+ eee
*
weet
Se ed _- _
a
Appendix 81
Bogue said. that the TAKE-A-TURN dispenser
worked so poorly that a customer could
get 10 or 12 numbers at a time and it
wouldn't dispense at all when the tickets
got down to half a roll. (Pl. Ex. 116,
pg. 43 ln. 8-16, pg. 44 In. 13-22)
147. Defendants' customer/distributor,
TURN-O-MATIC of Texas, was able to pass
off upon Baskin-Robbins of Houston,
Texas, a TAKE-A-TURN dispenser as a
TURN-O-MATIC dispenser because of the
similarity between the two dispensers.
(Pl. Ex. 25 and Pl. Ex. 10, Finding 142)
148. As a result of his corres-
pondence with Mr. Staiti (Pl. Ex. 116-JB-3)
Mr. Bogue received a TURN-O-MATIC Mark II
ticket dispenser from plaintiff, Scandus,
Inc. (Pl. Ex. 116, pg. 32 ln. 14 = pg. 33
ln. 11) He characterized the TURN-O-
MATIC Mark II ticket dispenser as the
"grandest piece of equipment” he ever
had. He said that with it there is
"never a mishap" and each time a
customer pulls it, it dispenses one
ticket at a time. He said "it's
like having another employee” and that
it's "the best piece of equipment" he
has in the place. (Pl. Ex. 116, pg. 9
in. 2-§,° pe. 22 in. 20 :> pee 2s in. 18)
149. Mr. Bogue was familiar with the
TURN-O-MATIC trademark and knew that
the Classic ticket dispenser he had in
the store when it bought it was a
“URN-O-MATIC ticket dispenser (Pl. Ex.
116, pg. 4 in. 13 ae $ ln. 3)
150. A working ticket dispenser
which functions to dispense a single
ticket to each customer is very essen-
tial in an ice cream store (Pl. Ex. 116,
pg. 8 ln. 12 - pg. 9 ln. 5) The brand
a?
ae
82 Appendix
of ticket dispenser which Mr. Bogue had
was extremely important to him. TURN-O-
MATIC products had a good reputation
with him and he did not feel that the
TAKE-A-TURN unit shipped to him lived up
to the quality of TURN-O-MATIC products.
(Pl. Ex. 116, pg. 24 In. 7-9, pg. 23
ln. 19-21)
151. After Mr. Bogue came to under-
stand that the TAKE-A-TURN ticket dis-
penser had been substituted for the
TURN-O-MATIC ticket dispenser he had
ordered, he believed that he had been
"taken" by Tveter's customer/distributor,
Ed Cole, who was also a personal friend
of Mr. Bogue. (Pl. Ex. 116, pg. 25 ln.
4-18, pg. 41 ln. 8-14, pg. 44 ln. 14-22,
pg. 54 ln. 9-13)
152. Mr. Bogue was actually con-
fused by the similarity in appearance
between the TAKE-A-TURN received and
TURN-O-MATIC Mark II ticket dispenser
demonstrated. (Pl. Ex. 116, pg. 25
ln. 16-25, pg. 6 In. 15-17, pg. 10 ln. 11 -
pg. ll ln. x Pg. 12 ln. 15-16, Pg. 13
153. Defendants’ customer Burgess,
owner of the Baskin-Robbins store in
Walnut Creek, California, (Burgess
pg. 299 ln. 22-25) was solicited by
SGT Enterprises over the telephone to
purchase the TAKE-A-TURN ticket dispen-
ser. The customer described to the
caller from SGT Enterprises the dispen-
ser he wanted as the round red, modern-
looking one, believing that he had
described the TURN-O-MATIC Mark II dis-
penser which he had seen in another
Baskin-Robbins store on Clayton Road.
(Pl. Ex. 117-BB-4) Burgess indicated
that he might have even made reference
Appendix 83
to that store in his conversation with
the man from SGT Enterprises, and was
clearly thinking of the TURN-O-MATIC
Mark II ticket dispenser in that store
when he ordered the ticket dispenser
from SGT.(pg. 300 ln. 22 - pg. 302 ln. 6)
154. Even after purchasing and
- receiving the TAKE-A-TURN machine from
ae ttn alia arate adn ieee tenet eee
SGT Enterprises, Burgess believed that
he had a TURN-O-MATIC brand ticket dis-
penser, that the ticket dispenser he had
was made by the same manufacturer as the
TURN-O-MATIC Classic ticket dispenser,
and that the TAKE-A-TURN ticket dispen-
ser he had was made by the same company
that made the TURN-O-MATIC wall indicator.
(Burgess pg. 302 In. 3-6, pg. 302 ln. 22 -
pg. 303 ln. 6)
155. After defendants’ customer
Burgess learned that he had been passed
off a TAKE-A-TURN dispenser for the
TURN-O-MATIC dispenser which he thought
he was getting, he knew that what he wan-
ted was a TURN-O-MATIC machine. (Burgess
pg. 305 ln. 17-25)
156. Tveter's invoicing, packaging
and labeling never made it clear to his
customer Burgess that the ticket
dispenser he was sélling was not a TURN-
O-MATIC. Even where Tveter crossed out
the trademark TURN-O-MATIC on his
invoice the TURN-O-MATIC still came
through very clearly to Tveter's cus-
tomers. (Burgess pg. 306 ln. 6 - pg. 308
ln. 8)
157. The TAKE-A-TURN ticket dispenser
at Burgess' Baskin-Robbins worked very
poorly. It would dispense several
tickets at a time, sometimes 10 or 20,
or as long as the customer wanted to
°° — <a = Gana. a oe
ve
CC ANI ee
84 Appendix
continue to pull it and was a problem.
(Burgess pg. 311 ln. 1-11)
158. Witness Burgess testified
that he had been actually confused by
the similarity in appearance between
the defendants’ TAKE-A-TURN ticket
dispenser and plaintiff's Mark II TURN-
O-MATI.© ticket dispenser. (Burgess pg.
303 ln. 24 - pg. 304 In. 4)
159. Defendants' customer Burgess
has stumbled over and actually confused
the marks TAKE-A-TURN and TURN-O-MATIC.
When he looks at the two marks ’on the
face of a ticket dispenser he confuses
them. (Burgess pg. 309 ln. 28 - pg. 310
ln. 18) The TAKE-A-TURN and TURN-O-
MATIC marks are similar because, as he
described it, they are both three-word
phrases, hyphenated, and the word TURN
appears in both of them. (Burgess
pg. 304 ln. 15-18)
160. The most important factor to
Burgess in purchasing a ticket dispen-
ser was that it operate as it was
designed to, that is, that the customer
should get one ticket and one ticket
only when he pulls on it. This was even
more important. to them than the cost
of operating the ticket dispenser.( pg.
304 ln. 19-25)
161. Mr. Burgess was familiar with
the style and appearance of the Mark II
ticket dispenser, recognized it as
distinctive and indicating the Mark II
ticket dispenser, and found the shape
and so peng pleasing and desirable.
(Burgess pg. 301 ln. 7-22)
162. Mrs. Jame Emanuel is the owner/
manager of a Baskin-Robbins store in
Pleasant Hill, California. (pg. 285 ln.
Appendix 85
20°- pg. 286 ln. 1) She had previously
seen the TURN-O-MATIC Mark II ticket
dispenser in another Baskin-Robbins store
and, knowing it to be the one that
Baskin-Robbins was now installing in
ice cream stores, ordered what. she
believed was a TURN-O-MATIC dispenser
from Tveter's brochure. (Pg. 287 ln. l -
pg. 289 ln. 5) Even after receiving the
TAKE-A-TURN dispenser in Tveter's packa-
ging and labeling and seeing it and
Tveter's invoice,. she still believed that
she had the TURN-O-MATIC brand ticket
dispenser which he had seen in the other
Baskin-Robbins store on Clayton Road.
(pg. 291 ln. 5-16, pg. 288 ln. 3 -
pg. 289 ln. 5, pg. 290 ln. 2-7) Mrs.
Emanuel believed the TAKE-A-TURN dis-
penser she received was made by the
same company that made her store's TURN-
O-MATIC indicator. (pg. 288 ln. 3-9)
Neither Tveter nor any of his r?presenta-
tives ever told Mrs. Emanuel that the
TAKE-A-TURN dispenser being sold by
defendants was not a TURN-O-MATIC.
(Emanuel pg. 291 ln. 5-16)
163. Mrs. Emanuel was actually
confused by the similarity between the
Mark II TURN-O-MATIC and the TAKE-A-TURN
ticket dispensers (pg. 290 ln. 25 =- pg.
291 In. 4, pg. 288 ln. 3-7, 12-13, pg.
289 ln. 10-18) The shape and configura-
tion of the Mark II TURN-O-MATIC ticket
dispenser had acquired a secondary mean-
ing to witness Emanuel, who had seen it
elsewhere, remembered it, and associated
its appearance with plaintiff's pro-
ducts. (pg. 287 ln. 1 - pg. 289 ln. 18)
164. Defendants' customer Emanuel
actually confused the marks TAKE-A-TURN
and TURN-O-MATIC. (pg. 290 ln. 25 -
pg. 291 ln. 1, pg. 291 ln. 28 - pg. 292
oo A ne at cee ene cee
86 Appendix
ln. 1) Witness Emanuel found the marks
TAKE-~A-TURN and TURN-O-MATIC. similar in
both sound and meaning. (Emanuel pg.
292 in. 2-12, ln. 17-28, pg. 293 ln.
1-3)
165. Tveter's literature and rep-
resentations, coupled with the similarity
between his ticket dispenser and that of
plaintiffs, caused Mrs. Emanuel to order
the TAKE-A-TURN. dispenser when she de-
sired and believed she was ordering the
TURN-O-MATIC dispenser. (Emanuel pg.
287 ln. 1 - pg. 289 ln. 18)
166. Victor Mar, President and
General Manager of Center Auto Parts,
defendants’ customer, is responsible
for the purchase of ticket dispensing
equipment. (Ex. 122, pg. 3 ln. 28 -
pg. 4 ln. 8) Mar optained a free (see
no charge invoice, Pl. Ex. 122-VM5)
TAKE-A-TURN dispenser after calling SGT
Enterprises to buy more tickets for his
TURN-O-MATIC Classic dispenser. Over
the phone, Mr. Tveter advised Mr. Mar
that there was a new machine out with
tickets that were nearly half the
price of the old ones. (Pl. Ex. 122, pg.
7 ina. 15 = pg. 8 in. 6, po. 24 In. 19 -
pg. 25 ln. 2)
167. Mar assumed that the TAKE-A-
TURN machine was made by the same com-
pany that made the Classic TURN-O-MATIC
machine and the wall indicator. Mr.
Mar had an indicator in his Center
Auto Parts for a minimum of six or seven
years and knew it was a TURN-O-MATIC
mechanical indicator. (Pl. Ex. 122, pg.
21 In. 7-12) He had not been told by
Mr. Tveter that SGT Enterprises no
longer carried TURN-O-MATIC. (Pl. Ex.
’.
se
Appendix 87
122, pg. 17 In. 12-20, pg. 25 ln. 3-14,
pg. 6 ln. 17-22)
168. The price of the tickets for
the ticket dispenser was not a big deter-
ming factor for Center Auto Parts in the
choice of a ticket dispenser. (Pl. Ex.
122, pg. 14 ln. 5-12) If, at the time
he acquired the TAKE-A-TURN dispenser
in March of 1975, he was given the
opportunity to purchase a new ticket
dispenser made by the company who made
the Classic, or a new machine made by a
different company, all other things being
equal, including price, Mar would stick
with the old manufacturer. (Pl. Ex. 122,
pg. 16 ln. 4 - pg. 17 ln. 1) Center
Auto Parts trys to adhere to national
brands against unknown or independent
brands in purchasing a ticket dispenser.
(Pl. Ex. 122, pg. 29 ln. 20-26)
169. Center Auto Parts interchange-
ably used the terms TURN-O-MATIC and
TAKE-A-TURN. Mr. Mar testified that
phonetically they nearly sound the same
so they never paid much attention to
them. (Pl. Ex. 122, pg. 5 ln. 1-9)
170. When asked to compare a TAKE-
A-TURN and a Mark II TURN-O-MATIC ticket
dispenser tc identify which machine he
now had, Mr. Mar stated that to him,
both the TAKE-A-TURN and Mark II TURN-O-
MATIC dispensers looked practically iden-
tical. It was only because of the pre-
sence of the metal clip on the lower lip
of the TURN-O-MATIC that he was able to
identify the TURN-O-MATIC machine which
he had in his store. (Pl. Ex. 122, pg. 12
in. 14 = pg. 13 ln. 9)
88 Appendix
171. Witness Robb, Assistant
Manager of the food operation at the San
Francisco Woolworth's, the highest volume
food operation in the Woolworth's store
chain, testified that those who had
responsibility for ordering ticket dis-
pensers, indicators and tickets, reported
to him, and that he had inquired of every-
one in the department who would have
anything to do with the ticket dispensers,
but could not determine how Woolworth's
Classic TURN-O-MATIC ticket dispenser was
replaced by defendants’ TAKE-A-TURN
ticket dispenser. Mr. Robb testified
that all these persons said that no one
had approached them about putting in a
new or different ticket dispenser, or
anything. (Robb, pg. 389 ln. 23 - pg.
390 ln. 19 - pg. 392 lns. 9-16, pg. 404
ln. 23 - pg. 405 ln. 23, pg. 410 lns.
2-14).
172. When defendants' TAKE-A-TURN
ticket dispenser was in Woolworth's,
Mr. Robb believed that the brand name of
the ticket dispenser was TURN-O-MATIC and
he had no-~reason to believe that the
TAKE-A-TURN ticket dispenser was made by
any other company than Scandus. He
further believed that the TAKE-A-TURN
ticket dispenser was made by the same
company that made the Classic TURN-O- ,
MATIC ticket dispenser and was. an
improvement of the Classic dispenser in
design and looks. (Robb, pg. 395 lns.
13-15, pg. 396 1lns. 7-1l, pg. 399 lns.
13-19).
173. To defendants' customer Robb
the TURN-O-MATIC Mark II and TAKE-A-TURN
ticket dispensers are very similar to
each other having only a difference in
the bracket that holds the dispenser onto
the counter and some internal differences
such as a bar and metal clip at the point
Appendix : 89
where the ticket is removed. (Robb, pg.
406 ln. 17 - pg. 407 ln. 17).
174. Mr. Robb associated the trade-
mark TURN-O-MATIC with products made by
Scandus, and in particular, with the
TURN-O-MATIC Classic machine, which had
been installed in his store from four to
six years earlier. (Robb, pg. 393 lns.
2-14, pg. 396 lns. 2-11, pg. 411 ln. 4-6,
pg. 390 lns. 15-19).
175. Tveter's customer Robb actu-
ally confused the marks TAKE-A-TURN and
TURN-O-MATIC in speech. (Robb, pg. 396
lns. 9-11, 15-26). To witness Robb the
marks TAKE-A-TURN and TURN-O-MATIC are
similar because they have almost the same
words and almost the same number of
letters, both having four letters, a
hyphen, a letter, and another’ hyphen.
The witness stated that the marks are
similar ina@pearance such that if you
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