Record and brief — General Motors Corp. v. Devex Corp.

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RECTED CaP ee. . D Viv.

81-1661 WAR 9 1902

No.

ALEXANDER L. ST EVAS,

In the Supreme Court of the Anited States

OCTOBER TERM, 1981

GENERAL Motors CORPORATION,

Petitioner,

vs.

Devex CORPORATION, ET AL.,

Respondents.

PETITION FOR WRIT OF CERTIORARI TO

THE UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

Georce E. Frost ArTHUR G. CONNOLLY

3044 W. Grand Boulevard Farmers Bank Bldg.

Detroit, Michigan 48202 Wilmington, Delaware 19899

313-556-3586 302-658-9141

Counsel for Petitioner, General Motors Corporation

RENAISSANCE PRINTING COMPANY, 76 W. ADAMS

9TH FLOOR, DETROIT, MICHIGAN 4€226 — (313) 964-3185

QUESTIONS PRESENTED

1. Does 35 USC 284 require the award of prejudgment in-

terest on unliquidated reasonable rovalty patent infringe-

ment damages where there has been no finding of bad

faith or other exceptional circumstances against the in-

fringer but rather a finding (approved by the court below)

that the infringer “acted in good faith and not recklessly”?

This is the holding of the Third Circuit in this case and it is

in direct conflict with decisions in the Seventh, First, Ninth

and Sixth Circuits.

2. Where the master found as a fact that a universally re-

jected royalty rate sought by the patent owner after the

patent was held valid was “too high”, and he further imznd

on the record that a lower rate was the reasonable royalty,

may the reviewing courts reject the master’s royalty fact

finding as too speculative and adopt in its place the re-

jected royalty found to be “too high” and therefore

unreasonable? This is the holding of the Third Circuit in

this case which substitutes reviewing court conjecture for a

contrary solid fact finding of the master and also conflicts

with the Second Circuit.

3. Where the literal language of a patent claim is met by the

prior art but a federal court of appeals has validated the

claim by narrowing it in reliance upon proofs of a vitaliz-

ing ingredient causing an unexpected coaction under cer-

tain process conditions to produce unique end-results,

may another federal court of appeals in the same case

subsequently ignore the proofs required by the first court

and hold infringement by, (a) processes which do not use

the vitalizing ingredient, or, (b) processes not shown to

have the same coaction, or (c) processes not producing the

unique end-results? Can the claim, when so expanded

beyond its earlier narrowed, judicial construction, “par-

ticularly point out and distinctly claim” the invention as 35

USC 112 requires?

TABLE OF CONTENTS'

PAGE(S)

QUESTIONS PRESENTED .................. i

CGE vac tereuhstwonccerssnecesss i

tS PPT TIV ESTE Cre L Tere i

CINE Dic vc ke cctécceedeeveessvesecs i

ET occ cc obo bceceesccatensees 2

PT TTI E TET URU ETE CETTE TCT 2

STATUTES INVOLVED ..............500000- 2

STATEMENT OF THECASE................. 3

The Seventh Circuit Non-Literal Validating

i Pree 4

The Seventh Circuit Borax Bumper Process

Noninfringement Ruling ................. 6

The Interlocutory Third Circuit Borax Infringe-

| POPPI TTTTTIT TTT Tee 7

bckadanedeaes ak edna sees

EE occ cciwdesacvesdeestesaves 9

The Reasonable Royalty ................. 11

Prejadgmoent Interest .... 2.2.2.2 .0ccceees 13

' This plaintiffs in this case are: Devex Corporation, an Qhio Corpora-

tion; Technograph, Inc., a North Carolina corporation; Theodore A.

TeGrotenhuis, an Ohio resident; Frederick B. Ziesenheim, a Pennsyl-

vania resident; Marjorie E. TeGrotenhuis, an Ohio resident; William C.

McCoy, Jr., an Ohio resident; and Katharine M. Bassett, a Connecticut

resident. The sole defendant is General Motors Corporation.

GM's Rule 28.1 listing is Exhibit I, p. 27, below.

PAGES)

TET TL OLALT SEX LT LETS TT eee 14

This Court Should Resolve the Several Conflicts

Between the Courts of Appeal on Whether 35

USC 284 Requires Prejudgment Interest Awards

Where the Defendant Has Acted in Good Faith

and Its Position on Validity and Infringement

Has Been Held Meritorious ................. 14

This Court Should Resolve the Conflicting Views

Between the Second Circuit and the Third Cir-

cuit on the Evidentiary Significance of Exorbi-

tant License Offers Rejected by All Potential

RR 0c Candee chdlsccrcstblinghswe'es 18

This Court Should Articulate the Guidelines for

Compliance With 35 USC 112 in Enforcing

Judicially Modified Claims.................. 20

EEE GauveCuebecavniasGuseeecsetes 26

TABLE OF CASES

Aro Mfg. Co. Inc. v. Convertible Top Replace-

ment Co. Inc. 377 U.S. 476, 505-6 (1964) ....

CBS v. Zenith Radio Corp. 537 F(2d) 896, 897-8

SR I ee en. oda a het ss bak

Crosby Steam Gage and Valve Co. v. Con-

solidated Safety Valve Co. 141 U.S. 441, 457

SEE SSSA sede Stcbcdvowbeeccebaseese

Dixie Cup Co. v. Paper Container Mfg. Co. 169

F(2d) 645, 651 (7th Cir., 1948).............

Duplate Corp. v. Triplex Safety Glass Co. 298

Dee Sy SEINE cocci ewe weseaveedence

Ellipse Corporation v. Ford Motor Company 614

F(2d) 775 (7th Cir., 1979)... .........2005.

Exhibit Supply Co. v. Ace Patents Corp., 315

a CHE PEND wnssodsevcenvicereves

Foster v. American Machine & Foundry Com-

pany 492 F(2d) 1317, 1321-4 (2d. Cir., 1974)

(cert. den. 419 U.S. 833; reh. den. 419 U.S.

Ss REG dione dP 6 ae ueks Bhas peek icv es

General Electric Co. v. Sciaky Bros., Inc. 415

F (2d) 1068, 1076 (6th Cir., 1969) ..........

General Electric Co. v. Wabash Appliance Corp.

$04 U.S. 364, 368, 374(1938)..............

Georgia-Pacific Corp. v. U.S. Plywood-Champi-

on Papers, Inc. 446 F(2d) 295, 302 (2d Cir.,

1971) (cert. den. 404 U.S. 870).............

Graver Tank & Mfg. Co. Inc. v. Linde Air Prod-

ucts Co. 339 U.S. 605, 607-9(1950) .........

PAGE(S)

16, 17

17, 18

20, 24

16, 17

21, 22,

24, 25

Lear, Inc. v. Adkins 395 U.S. 653, 670 (1969) . . .

Maloney-Crawford Tank Corp. v. Sauder Tank

Co., Inc. 511 F(2d) 10, 13-14 (10th Cir.,

SPUD 4650 0.00 véckaecdegnencteieecesctecs

Marvel Specialty Co. v. Bell Hosiery Mills, Inc.

386 F(2d) 287, 290 (fn. 3) (4th Cir., 1967)

(cert. Gem. SIDU.S. 1GBG). 0. cccvccvscess

Motion Picture Patents Co. v. Universal Film

Mfg. Co. 243 U.S. 502, 510(1917)..........

H. K. Porter Co. Inc. v. Goodyear Tire and Rub-

ber Co. 536 F(2d) 1115, 1124 (6th Cir., 1976) .

Radiator Specialty Co. v. Micek 395 F(2d) 763,

eer

Russell Box Co. v. Grant Paper Box Co. 203

F(2d) 177, 180-81 (1st Cir., 1953) (cert. den.

346 U.S. 821; reh. den. 346 U.S. 905) .......

Standard Industries Inc. v. Tigret Industries,

ee ee ree

Tilghman v. Proctor 125 U.S. 136, 160(1888) ..

Union Carbide Corp. v. Graver Tank & Mfg. Co.

282 F(2d) 653,. 676-7 (7th Cir., 1960) (cert.

Gam. TEP GB, GERD. 6 ve tividiascndewes cusens

United Carbon Co. v. Binney & Smith Co. 317

DE. FR SR 00 6s v thc boned sec evens

United States v. Adams 383 U.S. 39, 48-9

Ee as: OMT Se 8

United States Industries v. Otis Eng. Corp. 277

F(2d) 282, 287 (5th Cir., 1960).............

Wahl v. Carrier Mfg. Co., Inc. 511 F(2d) 209,

OO DEP lis HUUGD 0s divs vnck UN pecsda

PAGES)

Vii

PAGE(S)

Westinghouse v. Boyden Power Brake Co. 170

Terrier 24

Wm. Bros. Boiler & Mfg. Co. v. Gibson-Stewart

Co. 312 F(2d) 385, 387 (6th Cir., 1963) ...... 15, 17

TABLE OF STATUTES

Teta cu bidKindeaeaea ds vee e000 $, 20, 22,

24, 25

EE ee ee 2, 14, 15,

EE: evden ddbuuvesedbubehs st. 22

No.

In the Supreme Court of the Gnited States

OCTOBER TERM, 1981

GENERAL Motors CORPORATION,

Petitioner,

vs.

Devex CORPORATION, ET AL.,

Respondents.

PETITION FOR WRIT OF CERTIORARI TO

THE UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

Petitioner, General Motors Corporation, respectfully prays

that a writ of certiorari issue to review the judgment entered

on December 15, 1981 by the United States Court of Appeals

for the Third Circuit.

OPINIONS BELOW

The accounting opinion of the Court of Appeals for the

Third Circuit immediately preceding this petition is reported

at F(2d) ___.. (Joint App., 304a). The District Court

opinion on the accounting is reported at 494 Fed. Supp. 1369.

(Joint App., 280a).

The initial opinion of the Court of Appeals for the Seventh

Circuit holding the judicially redrafted and restricted claim

valid in the consolidated case of Devex v. General Motors and

Houdaille Industries is reported at 321 F(2d) 234 (cert. den.

$75 U.S. 971). (Joint App., 61a). The explanatory opinion by

the Seventh Circuit in Devex v. Houdaille Industries, is

reported at 382 F(2d) 17. (Joint App., 85a).

The opinion, findings of fact, and conclusions of law of the

District Court for the District of Delaware holding no in-

fringement by any then-accused process in this case are

reported at 316 Fed. Supp. 1376 (Joint App., 105a). The par-

tial reversal of this noninfringement decision by the Court of

Appeals for the Third Circuit is reported at 467 F(2d) 257

(cert. den. 411 U.S. 973) (Joint App., 138a).

JURISDICTION

The Judgment of the Court of Appeals is dated and was

entered December 15, 1981. A timely petition for rehearing

was denied January 13, 1982, and this petition for a Writ of

Certiorari was filed within 90 days of that date. The jurisdic-

tion of this Court is invoked under 28 USC 1254(1).

STATUTES INVOLVED

Questions one and two involve 35 USC 284, which provides

in ite pertinent portions that the court shall award “damages

adequate to compensate for the infringement. . . together with

interest and costs as fixed by the court.” Joint App., 1 a.

Question three involves 35 USC 112. In its pertinent por-

tion, it requires patent claims “particularly pointing out and

distinctly claiming the subject matter the applicant regards as

his invention.” Joint App., la.

STATEMENT OF TH. CASE"

Jurisdiction of the courts below rests on 28 USC 1338(a)

and 28 USC 1291.

Claim 4', the only claim here at issue, concerns an old proc-

ess of coating steel with a lubricant prior to cold forming to a

useful shape such as an automobile bumper. The distin-

guishing feature of the process is the inclusion of borax as the

inorganic compound in the lubricant. Otherwise identical

processes not using borax in the iubricant and held to be non-

* This Petition is based on error of law by the Court of Appeals for the

Third Circuit involving irreconcilable conflicts with other federal courts

of appeal and misapplication of controlling statutes and decisions. Only

a minute portion of the joint appendix requires consideration on this

Petition. Footnotes herein quote this portion of the rulings below, mak-

The claim reads:

“The process of working ferrous metal which comprises

forming on the surface of the metal a phosphate coating and

superimposing thereon a fixed film of a composition com-

prising a solid meltable organic binding material containing

distributed there through a solid inorganic compound

meltable at a temperature below the melting point of the fer-

rous metal phosphate of said coating and having a hardness

not exceeding 5 on the Mohs’ hardness scale, and thereafter

infringing were satisfactorialy used by GM throughout the

patent period to make bumpers. The borax-including proc-

ess, under some conditions, achieves a chemical coaction be-

tween borax and the other ingredients which is said to provide

increased die life and ease of cleaning of the work after draw-

ing. There has been no proof that such coaction occurs in any

accused bumper making process, or that die life and cleaning

were different than in the absence of borax, or alleged

equivalent.

The Seventh Circuit Non-Literal Validating Claim

Construction

This case was initially filed in the Northern District of Il-

linois, where it was consolidated on plaintiffs’ motion for trial

on the common issue of patent validity with a related infringe-

ment action filed by plaintiffs against Houdaille Industries.

After a lengthy trial, the District Court found that the claim

was invalid over the prior art.?

The Court of Appeals confirmed the lower court's finding

that the claim, if literally construed, is invalid over the prior

art. But it accepted the representations of plaintiffs and vali-

daied the claim by redrafting and restricting it to particular

process conditions which produced coaction products having

unique properties.’ These coaction products were alleged by

*“The British patent 494,830 therefore contains disclosure of a

lubricating composition for drawing and deforming ferrous metal within

the broad terminology employed in claim 4 of the patent in suit.” Find-

ing of Fact No. 6(a). Nos. 56 C1912 and 57 C892, N.D. Ill., June 29,

1962. (Joint App., 33a, 34a).

* Devex v. General Motors, Devex v. Houdaille Ind., Opn. July 12, 1963

Court of Appeals for the Seventh Circuit (Joint App., 61a, 66a).

plaintiffs to be essential.* Specifically, the court of appeals

relied upon plaintiffs’ laboratory evidence that, under the

high pressures and temperatures of the test process, and with

the high borax lubricant used, “new compounds are formed;

the formation of insoluble organic compounds is inhibited,

and the abrasive phosphate is transformed into a glassy amor-

phous compound having highly effective lubricating proper-

ties.” This surprising coaction, which was attributed to the

borax ingredient added to the prior art soap lubricant, was

considered to be a patentable improvement.’ The borax

chemical coaction relied upon is not described in the patent.®

The Court of Appeals also gave emphasis to testimony that

greatly increased die life was achieved.’

* “Plaintiffs alleged at trial that compounds other than zinc phosphate

and the borax are formed by chemical reaction of borax with soap and

the zinc phosphate of the phosphate coating, and are essential to the suc-

cessful operation of the process described in claim 4 of the patent in

suit.” Fact Finding No. 12. Nos. 56 C1912 and 57 C892, N.D. Ill., June

29, 1962. (Joint App., 43a).

* See Para. 3, opinion Court of Appeals, Third Circuit dated Dec. 15,

1981. (Joint App., 305a).

* “The patent in suit does not describe any chemical reactions in the

drawing operations with soap-borax applied over phosphate coatings

which produce or require the production of any other compounds to be

essential to successful drawing operations; claim 4 of the patent in suit

contains no reference to or requirement of the presence of such other

compounds in the operation of the process defined by the claim.”

Finding of Fact No. 12. Nos. 56 C1912 and 57 C892, N.D. Ill., June 29,

1962. (Joint App., 43a).

yas Testimony showed tool and die life was increased one thousand

fold so that for given tools, three or four hundred thousand pieces were

run where previously only three or four hundred pieces could be run.

The Henricks’ process made it possible to manufacture articles of

superior quality at a much lower cost, the advantage being so marked in

some cases as to spell the difference between success and failure on heavy

reductions and difficult extrusions.”

(Joint App., 67a).

The Seventh Circuit Borax Bumper Process

Noninfringement Ruling

This case was then transferred on plaintiffs’ motion to the

District of Delaware for an infringement trial. But the related

Houdaille case remained in the Northern District of Illinois.

In the Houdaille case, plaintiffs moved for summary judg-

ment of infringement on the sole ground that Houdaille’s

manufacture of bumpers using soap and borax lubricant ap-

plied over phosphate literally infringed. The motion was

granted in reliance upon the broad literal claim language,

which clearly covered the process.* The Court of Appeals re-

versed, stating that “It is difficult to discern how plaintiffs can

contend with any plausibility that defendant is an infringer,

based upon a literal reading of the claim”, for in the “previous

case plaintiffs urged as a ground for sustaining validity a nar-

row and restricted application of the ‘specific embodiment of

claim 4.""* The Court of Appeals then quoted plaintiffs’

representation on the chemical coaction of soap, borax, and

phosphate that it had adopted in its reversed earlier validity

decision.’ The Court then noted that “having obtained a

decision of validity on a narrow and restricted basis” plaintiffs

“now contend, inconsistently we think, that the claim must be

applied literally to defendant's alleged infringing process.”"'

The Court of Appeals held that “. . .if a literal reading of

the claim had been relied upon, we would have affirmed the

* Opin., Devex v. Houdaille, 57 C892, N.D. Ill., Dec. 15, 1965. (Joint

App., 76a, 84a).

* Opn. July 12, 1967, Cour: of Appeals for the Seventh Circuit (Joint

App., 93a).

Id.

"Id.

District Court in its holding of invalidity in view of the prior

art... .”.'® Holding that the claim, as previously restricted by

it, does not even cover all processes with borax in the lubri-

cant, the Court rejected any claim construction that:

“... would monopolize the whole broad field of

metal forming with any use of a dry soap and borax

over phosphate at any temperature or pressure, re-

gardless of the results.”

The Interlocutory Third Circuit Borax Infringement

Ruling

This case was tried on infringement in the District of

Delaware. Plaintiffs accused three processes, each using

borax in the lubricant. Plaintiffs introduced evidence on

alleged borax coaction similar to that relied upon in the

Seventh Circuit validity decision. GM introduced contrary

evidence. The District Court found that:'*

There is no preponderance of the evidence in

favor of plaintiffs that in the accused processes (a)

there is a new coaction between the soap, borax and

phosphate, (b) new compounds or glassy amor-

phous compounds are formed, (c) the formation of

water insoluble organic compounds is inhibited, (d)

tool and die life is greatly increased, and (e) there is

no cleaning problem, or that any of these results is

achieved. The credible evidence is to the contrary

and preponderates in favor of defendant.

"2 Id. at 95a

* Id. at 93a-94a

** Conclusion of Law No. 5 (No. 3058, D. of Del., Sept. 8, 1970, Joint

App., 132a).

Since this disposed of the evidence relied upon by the Seventh

Circuit in holding validity, judgment of noninfringment was

entered for GM."®

The Court of Appeals for the Third Circuit reversed. It

states in its final, 1981, opinion that “we concluded that the

accused practices led to satisfactory lubricity and cleanability,

which meant that those practices infringed.”'*

The Accounting

Accounting proceedings followed, and led to the final

Third Circuit judgment here sought to be reviewed. Plaintiffs

accused a total of 61 processes as infringements. The judg-

ment awards reasonable royalty damages on 14 of these pro-

cesses, all bumper processes.

5 Joint App. 137a.

16 “*** We rejected the district court conclusion “that infringement was

not proved because Devex failed to establish that General Motors

achieved the unexpected results that made the Henricks combination

patentable.” 467 F.2d at 260. After examining the materials before us,

we concluded that the accused practices led to satisfactory lubricity and

cleanability, which meant that those practices infringed. We specifically

rejected General Motors’ contention that, because the chemical reac-

tions involved were arguably different from those taught by the Henricks

patent, the General Motors practices did not infringe.

Thus, because the results produced by the accused practices were iden-

tical to those produced by the Devex patent, the accused practices infr-

inged. The differences between the specific chemical processes of the

Devex patent and those of the accused practices were not determinative,

so long as the results were identical.” Para. 6, Opn. Dec. 15, 1981. (Joint

App., 306a-307a). :

The Court of Appeals confirmed the master’s findings that

the patent process was not essential to GM and that viable

non-infringing alternatives were available.'’

Infringement

The Court of Appeals held that the eight accused bumper

processes using borax lubricants infringed, notwithstanding

the infringement trial fact findings that the borax coaction

was not proved and the absence of any proofs of coaction on

the accounting.'* The Court stated that its earlier in-

terlocutory infringement holding concluded that such prac-

tices led to satisfactory lubricity and cleanability, “which

meant that these practices infringed.”'®

In one accused bumper practice the only borax-usage was

in a neutralizing rinse prior to the application of a nonborax

lubricant. The master had found that the only purpose of the

borax was to neutralize and that the technique was old and

well known.”* The District Court reversed the master’s ruling

17 “23. The Special Master's factual finding as to infringement in

bumper making, in sum, is that the three major infringing divisions

(Pontiac, Chevrolet and Cadillac) used the Henricks process because it

was better than non-infringing alternatives, but not because it was essen-

tial or because there were no commercially viable non-infringing alter-

natives available. Indeed, Oldsmobile’s experience proves the availabili-

ty of practicable alternatives. There were periods when one or more of

the infringing divisions used nonaccused or non-infringing practices.

***” Para, 23, Opn. Dec. 15, 1981 (Joint App., 313a, 321a).

* fn. 16, p. 8, supra.

9 Id.

*¢ “j) There was no evidence that borax (or equivalent) rinses were used

to lubricate the metal or to aid in cleaning. ... . ii) The borax was used

solely to neutralize acid carryover resulting from the phosphate bath.

.... iii) ....Moreover, Henricks testified that ‘neutralizing rinses were

continued on next page

of noninfringement because the history of the litigation shows

it was immaterial “why Claim 4 specifies the use of borax.”*'

The decisive infringement-creating act, which the court con-

sidered to be judicially written into the claim, was that the

work be cleaned after formation. The Court of Appeals af-

firmed .**

continued from previous page

old and well known.’ . . . . iv) Henricks did not invent the use of borax as

a neutralizing rinse . . . . v) Defendant thought it was using borax rinses

to neutralize acid, and not for lubrication or cleanabiiity. Defendant

used non-accused rinses as well as accused rinses, and easily shifted back

and forth.....” Para. 11, Opn. Dec. 15, 1981 (Joint App., 320a).

“(e) The evidence is uniform to the point that defendant thought it

was using borax rinses to neutralize acidity, and not to get added lubrici-

ty or cleanability. There are also good indications that defendant did not

in fact achieve better lubricity or cleanability from the use of borax

rinses.” Section II C 2, Report of Special Master dated Feb. 7, 1980.

(Joint App., 194a).

*! Opn. August 22, 1980 (Joint App. 289a).

ae PUTTERS TE The trial court interpreted prior decisions in the Devex

litigation as “holding that Claim 4 requires cleaning as an integral step of

its process.” ..... The court stated:

‘The primary importance of Devex's process was not that

the addition of borax somehow enhanced lubricity. Rather,

the addition of borax inhibited the formation of zinc stearate

resulting in products that could be easily cleaned. [In the

validity phase of this litigation], Devex ... relied upon the

ease of cleaning to defend the validity of what would other-

wise have been an overly broad claim.’

“30. The trial court then turned to the issue of whether borax rinses

infringed the Devex process. He ruled that the borax rinses did infringe

the patent, but only where the parts formed after the rinse was applied

were cleaned. In other words, if the rinse performed the same role as the

lubricant, it infringed the patent.” Para. 29-30, Opn. Dec. 15, 1981

(Joint App., 336a).

Five of the bumper making processes used TKPP lubri-

cants, but no borax.**® These were held to infringe. Despite

the undisputed evidence that TKPP is a chemical compound

not described in the patent and differing from borax, TKPP

cannot have the same chemical reactions as borax and has not

been shown to undergo any chemical reactions. The Third

Circuit relied upon this Court's ruling in Graver Tank & Mfg.

Co. v. Linde Air Products, 339 U.S. 605 (1950) and lower

court decisions on “equivalents” which only involved claims

not previously judicially construed.**

The Reasonable Royalty

Plaintiffs’ evidence on the reasonable royalty was based on

the incorrect factual premise that no viable alternatives ex-

isted. The master rejected their proposed royalty rate. He

then determined the reasonable royalty wnder the ceiling

defined by the 0.75% rate in the proposed but unacceptable

license offers widely circulated by plaintiffs which he in effect

found to be an unreasonable royalty.*® Largely because the

** TKPP is tetrapotassium pyrophosphate (K4P907). Borax is sodium

tetraborate (NagB,O7). Oxygen is the only common element.

** Opn. Dec. 15, 1981 (Joint App., 324a).

#8 “Starting in November 1964, plaintiffs submitted a proposed form of

license (DX A-66a), to each and every company it thought was using the

teaching of the Henricks patent (Shortt, Tr. 2144, 2413-2415). The

license offer provided for a royalty based on three-fourths of one percent

(.75%) of the net purchasing or sale price of the item so produced, or one

per cent (1%) of manufactured cost (DX A-66(a)).

The importance of plaintiffs’ offer to license is underscored by its tim-

ing. The offer was made in November 1964, and came just ten months

after the validation of the patent by the declination of the United States

Supreme Court to grant review. (Certiorari was denied on January 6,

1964. 375 U.S. 971). Plaintiffs were then on top. . . .” Section IIID7,

Report of Special Master, Feb. 7, 1980 (Joint App., 251la).

proffered licenses were uniformly rejected, the master found

the proposed rate was “too high.”** He then considered, on

the evidence, what lower royalty would be reasonabie, and

found that two thirds of the unacceptable rate, or 0.50%, was

the reasonable royalty.*’

The District Court found that none of the master’s fact

findings were clearly erroneous.** But he nevertheless re-

versed the master on the ground that the master’s 0.50%

figure was unduly speculative and substituted for it the

universally rejected 0.75% royalty rate the master had found

** “E. The Hypothetical Negotiations

* > *

4. The parties would agree that .36 per cent was too high. It is the

same, taking into account the reduction for the use of defendant's dealer

price figures recognized by plaintiffs’ experts at trial, the .75 per cent of-

fer which was agreeable to no user of the process even after the patent

was validated, when it might have been expected that a reasonable offer

to license would have at least provoked the interest of industry. But the

negotiators would find that it was bringing them closer to agreement.”

Section IIIE, Report of Special Master, Feb. 7, 1980 (Joint App., 256a).

27 As the Court of Appeals stated: “25. The Special Master decided to

base the reasonable royalty on an offer made by plaintiffs in 1964 to

license the patent for three quarters of one percent (.75%) of the sale

price of the bumpers. The Special Master postulated hypothetical

negotiations, stressed the availability of viable alternatives to the Devex

patent, added that Oldsmobile produced bumpers without the Devex

process but that Chevrolet, Pontiac and Cadillac were loyal to the Devex

process, noted that the Devex process did have a considerable value, and

ultimately reduced the .75% figure — which he decided would have

been plaintiffs’ opening offer — by approximately one-third.” Para. 25,

Opn. Dec. 15, 1981 (Joint App., 315a). See also, Joint App., 250a-256a.

** Para. 39, Opn., Court of Appeals for the Third Circuit, Dec. 15, 1981

(Joint App. 322a).

to be “too high.”*® The Court of Appeals also confirmed all of

the master’s fact findings, but even so it affirmed the District

Court 0.75% royalty rate.*°

Prejudgment Interest

The court below held that the master properly awarded

prejudgment interest. Its stated justification is the generalized

observation, applicable to every case, that “To do otherwise

. . . would give defendant a windfall in the form of the use of

the royalty money it should have paid to plaintiffs,” and

“would encourage other defendants to draw out litigation for

as long a period as possible.”*' The Court did not refer to the

master’s approved finding that GM had “acted in good faith

and not recklessly”**, or to the two district court judgments

after lengthy trials which had upheld GM's position on patent

invalidity and its position on noninfringement.** The Court

conceded that its ruling on prejudgment interest is inconsis-

tent with the law in the Seventh Circuit, which refuses to per-

mit prejudgment interest in the absence of a finding of bad

faith or other exceptional circumstances.™*

** Open Aug. 22, 1980, Joint App. 294a.

*° Para. 39 and 65, Opn. Dec. 15, 1981 (Joint App., 322a and 3$34a).

** Para. 70, Opn. Dec. 15, 1981 (Joint App., 336a).

*? “Having considered plaintiffs’ various submissions, the history of the

case and the record in its entirety impel me to conclude that defendant

acted in good faith and not recklessly. There will be no punitive award in

the shape of multiple damages. And plaintiffs will pay their own counsel

fees.” Section IIIB, Report of Special Master, Feb. 7, 1980 (Joint App.,

209a).

5% Joint App., 60a, 137a.

% “76. The result reached here is inconsistent with that reached in Wahi

v. Carrier Manufacturing Co., 511 F.2d 209 (7th Cir. 1975), where the

continued on next page

ARGUMENT

This Court Should Resolve the Several Conflicts

Between the Courts of Appeal on Whether 35

USC 284 Requires Prejudgment Interest Awards

Where the Defendant Has Acted in Good Faith

and Its Pe-ition on Validity and Infringement

Has Been Held Meritorious

The patent statutes were silent on prejudgment interest un-

til the August 1, 1946 revisions eliminated profits of the in-

fringer as an element of recovery and provided for “general

damages. . . not less than a reasonable royalty . . . together

with such costs, and interest, as may be fixed by the court.”**

This language is consistent with decisions under the preceding

statutes, since prejudgment interest had been awarded on

unliquidated reasonable royalty damages only where there

was a finding that the infringer had acted in bad faith.

Duplate Corp. v. Triplex Safety Glass Co., 298 U.S. 448, 459

(1936), and cases cited therein.

Despite Duplat:, a clear and irreconcilable split now exists

among the courts of appeal on whether 35 USC 284 and its

1946 predecessor changed the prior law on prejudgment in-

terest. Most decisions hold that the 1946 Act codified — but

did not change the continuing authority of — Duplate and

similar decisions** which forbid prejudgment interest in the

continued from previous page

court uled that ‘interest should run from the date damages are li-

quidated.’ 511 F.2d at 215. ****” Para. 76, Opn. Dec. 15, 1981 (Joint

App., 339a).

** Section 4921, R.S. Joint App. 2a.

% Tilghman v. Proctor, 125 U.S. 136, 160 (1888); Crosby Steam Gage v.

Consolidated Safety-Valve, 141 U.S. 441, 457 (1891).

absence of “special circumstances.” There are decisions to this

effect in the Seventh Circuit, extending from 1948 to 1979,

and decisions to the same effect in the First, Sixth and Ninth

Circuits.*” They require findings of “special circumstances”

based on reckless or bad faith conduct of the infringer before

the court is permitted to exercise its discretion and award pre.

judgment interest on unliquidated reasonable royalty

damages.

The Third Circuit in the present case, and perhaps the

Fourth Circuit,** follow a conflicting view providing prejudg-

ment interest under 35 USC 284 to compensate the plaintiff

for delayed royalties and to deter other defendants from

drawing out litigation as long as possible, even though it has

been found that the defendant has “acted in good faith and

not recklessly”** and two trial courts found the defense

meritorious.*® This view requires no special circumstances

because the justifying reasons are present in any case, thus

making prejudgment interest mandatory — not discretion-

*? Seventh Circuit: Dixie Cup Co. v. Paper Container Mfg. Co., 169

F(2d) 645, 651 (1948); Union Carbide Corp. v. Graver Tank Co., 282

F(2d) 653, 676-7 (1960) (cert. den. 365 U.S. 812); Wahl v. Carrier Mfg.

Co., Inc., 511 F(2d) 209, 214-5 (1975); CBS v. Zenith Radio Corp., 537

F(2d) 896, 897-8 (1976); Ellipse Corp. v. Ford Motor Co., 614 F(2d) 775

(1979); First Circuit: Russell Box Co., v. Grant Paper Box Co., 203 F(2d)

177, 180-81 (1953), (cert. den. 346 U.S. 821; reh. den. 346 U.S. 905).

Sixth Circuit: Wm. Bros. Boiler Mfg. Co. v. Gibson-Stewart Co., 312

F(2d) 385, 387 (1963). Ninth Circuit: Radiator Specialty Co. v. Micek,

395 F(2d) 763, 764-5 (1968). See also H. K. Porter Co. v. Goodyear Tire

& Rubber Co., 536 F(2d) 1115, 1124 (6th Cir. 1976).

%* Marvel Specialty Co. v. Bell Hosiery Mills, Inc., 386 F(2d) 287, 290

(fn. 3) (1967). (cert. den. 390 U.S. 1030).

* fn. $2, p. 13, supra.

* Joint App., 60a, 137a.

ary. As a result, it punishes the good faith defendant even if

the plaintiff has unduly prolonged the case or engaged in

other reprehensible conduct.

In Georgia-Pacific Corp. v. U.S Plywood-Champion

Papers, Inc., 446 F(2d) 295, 302 (1971), the Second Circuit

indicated in a dictum that “Although the question is not free

from doubt,” the 1946 Act was “intended to grant the trial

court its traditional discretionary power in equity.” The deci-

sion affirmed an award of prejudgment interest from the date

of last infringement because of the reckless conduct of the in-

fringer, consistently with Duplate and the subsequent deci-

sions by various courts of appeal construing 35 USC 284 as a

codification of Duplate.

A further conflict exists between the Courts of Appeal on

the controlling significance of this Court’s quotation in Aro

Mfg. Co. Inc. v. Convertible Top Replacement Co., Inc., 377

U.S. 476, 505-506 (1964), that:

“The object of the bill is to make the basis cf

recovery in patent-infringement suits general

damages, that is, any damages the complainant can

prove, not less than a reasonable royalty, together

with interest from the time infringement oc-

curred, rather than profits and damages.” H.R.

Rep. No. 1587 79th Cong., 2nd Sess. (1946), to ac-

company H.R. 5311, at 1-2;S. Rep. No. 1503, 79th

Cong., 2d Sess. (1946), to accompany H.R. 5311 at

2.” (emphasis added)

The Second, Sixth, Seventh and Tenth Circuits have each

concluded that the quotation emphasized above was in-

advertently taken from language in an earlier version of the

bill which was objected to and deleted from the statute before

it became law, and is not a controlling holding by this

Court.*' As such, it negates rather than supports prejudgment

_ interest in the absence of “special circumstances.” The Third

Circuit has taken a contrary view in the present case — and

treats the stricken prejudgment interest language as though it

were present in 35 USC 284 and controlling .** Only this Court

can settle the status and effect of its own Aro v. Convertible

quotation.

The 35 years since the 1946 Act, and the 18 years since this

Court's statement in Aro v. Convertible, supra, have led to

conflict rather than consens:s by the courts of appeal on pre-

*' Second Circuit: Georgia-Pacific Corp. v. U.S. Plywood-Champion

Papers, Inc. 446 F(2d) 295, (2d Cir., 1971) (cert. den. 404 U.S. 870);

Foster v. American Machine & Foundry Co., 492 F(2d) 1317, 1324 (2d

Cir., 1974) (cert den. 419 U.S. 833, 1eh. den. 419 U.S. 1061); Wm. Bros.

Boiler & Mfg. Co. v. Gibson-Stewart Co., 312 F(2d) $85, 387 (6th Cir.

1963); General Electric Co. v. Sciaky Bros., Inc. 415 F(2d) 1068 (6th Cir.

1969); Wahl v. Carrier Mfg. Co., Inc., 511 F(2d)209 (7th Cir., 1975);

Maloney-Crawford Tank Corp. v. Sauder Tank Co., Inc., 511 F(2d) 10,

18-14 (10th Cir., 1975).

*2 “69. . . We are not, however, entirely without guidance on this ques-

tion. In Aro Manufacturing Co. v. Convertible Top Co., 377 U.S. 476

(1964), the Supreme Court examined the 1946 amendment to 35 U.S.C.

§284, pursuant to which a claimant became entitled to recover damages

instead of damages plus profits:

‘The purpose of the change was precisely to eliminate the

recovery of profits as such and allow recovery of damages only.

“The object of the bill is to make the basis of recovery in patent-

infringement suits general damages, that is, any damages the

complainant can prove, not less than a reasonable royalty, together

with interest from the time infringement occurred, rather than pro-

fits and damages.” H.R. Rep. No. 1587 79th Cong., 2nd Sess.

(1946), to accompany H.R. 5311, at 1-2; S.Rep. No. 1503, 79th

Cong., 2d Sess. (1946), to accompany H.R. 5311 at 2.’

377 U.S. at 505-06 (footnote omitted). Thus, in Aro the Supreme

Court identified the purpose of the amendment, and stated that it was

part of that purpose that damages in the amount of a reasonable royalty

plus interest “from the time infringement occurred” be recoverable.”

Para. 69, Opn. Dec. 15, 1981 (Joint App., $35a).

judgment interest under 35 USC 284. As the decisions now

stand, no court can make a ruling on prejudgment interest

under the statute without conflicting with at least one and

perhaps several courts of appeal. The matter is of substantial

importance because patent cases are almost always protracted

and prejudgment interest is generally as large as the reason-

able royalty damage award. It is more than half of the judg-

ment in this case.

Had this case remained in the Seventh Circuit as did the

Houdaille case, there would be no award of prejudgment in-

terest on damages, and the judgment would be less by more

than $11 million.

Prejudgment interest was awarded here despite (a) an ex-

plicit finding of good faith, nonreckless conduct, (b) favor-

able decisions for GM by both the Illinois and Delaware trial

courts, and (c) decisions adverse to plaintiffs on 47 of 61

charged processes. This case induces patent owners to unduly

prolong litigation to multiply prejudgment interest and it will

seriously deter future challenges to weak or narrowly

restricted patents, even though such challenges are an impor-

tant public service, and should not be “muzzled.” Lear, Inc.

v. Adkins, 395 U.S. 653, 670 (1969).

This Court Should Resolve the Conflicting

Views Between the Second Circuit and the Third

Circuit on the Evidentiary Significance of Exor-

bitant License Offers Rejected by All Potential

Licensees

The master in this case faithfully followed the approach of

the Second Circuit in Foster v. American Machine and Foun-

dry Co., 492 F(2d) 1317, 1321-2 (1974), a case involving a

patent to a pipe welding system. The master in that case re-

jected a running, or throughput, royalty based on the value of

the welded pipes produced by the mill operators in their in-

fringing usage of the patent, finding that the operators were

unwilling to pay on such basis. He accordingly turned to the

hypothetical negotiations between the patent owner and the

vendor of the equipment, assessed the evidence of patent

value, and based the royalty on the cost of the equipment.

This royalty figure, much lower than the “throughput”

royalty unsuccessfully sought by the patentee, was confirmed

by the District Court and affirmed on appeal. It was held that

the unacceptability of throughput royalty precluded any

award on this basis and that the master’s alternative, despite

the estimate involved, was not clearly erroneous because

“There is no mathematical formula for the determination of a

reasonable royalty.” 492 F(2d) at p. 1323.

Here the master found that the 0.75% royalty sought by

plaintiffs in their industry-wide 1964 license offers was “too

high”** largely because it had been rejected by every potential

licensee. The master found that “plaintiffs were then on top”,

because the patent had then been validated and the Seventh

Circuit noninfringement holding had not been made.** The

master therefore rejected this unreasonable “too high” offer

and turned to other evidence showing the economic value of

the patented process as applied to bumpers. He then

estimated the reasonable royalty figure by conducting the

hypothetical negotiations approved by the Second Circuit in

Foster. The end-result of these steps, he found, was a royalty

rate of 0.50%, or two-thirds of the figure he had found to be

“too high.”’**

* fn. 26 p. 12, supra.

* fn. 25 p. 11, supra.

** fn. 27 p. 12, supra.

Although the District Court here confirmed the findings of

the master, it inconsistently rejected his 0.50% reasonable

royalty rate and adopted in its place the discredited and

unreasonable 0.75% rate which was supported only by con-

jecture — not evidence.** Instead of asking 0.75% for a

license in 1964, the plaintiffs could have requested 7.5% — or

75% — and the results would have been the same, every

potential licensee would have rejected it. By the reasoning of

the court below, such unconscionable royalty would never-

theless become the adjudicated reasonable royalty although it

is nothing but conjecture.

A clear conflict exists between the ruling below that the

0.75% uniformly rejected figure is the reasonable royalty,

and the ruling of the Second Circuit in the Foster case. In the

Second Circuit, proposed but rejected licenses require the fact

finder to turn to evidence rather than conjecture to ascertain

the reasonable royalty. In the Third Circuit, the uniformly re-

jected figure may be conjectured as satisfactory proof of the

ceasonable royalty in place of the fact finder’s contrary deter-

mination on the evidence.

This Court Should Articulate the Guidelines for

Compliance with 35 USC 112 in Enforcing

Judicially Modified Claims.

$5 USC 112 requires patent claims “particularly pointing

out and distinctly claiming” the invention. Claims, as issued,

must “clearly circumscribe what is foreclosed from future

enterprise.” United Carbon Co. v. Binney & Smith Co., 317

U.S. 228, 236 (1942). The claims must identify the invention,

not just the result achieved, and they cannot normally be

saved by reading matter into them. General Electric Co. v.

* fn. 28 p. 12, supra.

Wabash Appliance Corp., 304 U.S. 364, 374 (1938). The vast

majority of this Court's rulings strictly adhere to the literal

claim language, and treat claims like “the description in a

deed, which sets the bounds to the grant which it contains.”

Motion Picture Patents Co. v. Universal Film Mfg. Co., 243

U.S. 502, 510 (1917).

In Graver Tank & Mfg. Co., Inc. v. Linde Air Products

Co., 339 U.S. 605, 607-9 (1950), however, this Court in-

structed the lower courts to consider the “doctrine of equiv-

alents” whenever literal patent claim infringement is not

made out. To avoid “fraud on a patent” (339 U.S. at p. 608),

that decision encourages the lower federal courts to broaden

patent claims by departure from expressed language so as to

cover more than what the literal words state. This Court also

emphasized that claims may be similarly narrowed in relation

to their literal scope by application of the “doctrine of

equivalents.” 339 U.S. at pp. 608-9. In United States v.

Adams, 383 U.S. 39, 48-9 (1966), this Court sustained claim

validity because of water activation described in the specifica-

tion, even though the claims in question made no reference to

water.

Judicially-created variations from literal patent claim

language are now commonplace. As one Court of Appeals

stated, “. . .seldom may the question be determined on the

literal words of the claim. ...”*’ Some cases involve only

slight departure from claim language in the nature of inter-

pretation. In other instances, such as the Seventh Circuit

validity holding in this case, the claim is effectively rewritten

by a major departure from the as-issued language.

*? United States Industries v. Otis Eng. Corp. 277 F(2d) 282, 287 (5th

Cir., 1960).

Whether the deviation is small or large, the patent

coverage is necessarily altered. Despite the importance of con-

tinued adherence to the statute, we are unaware of any case

holding that the judicially modified claim must particularly

point out and distinctly claim the invention. This is doubtless

due to this Court’s opinion in Graver Tank v. Linde, supra,

which is silent on R.S. 4888 (now 35 USC 112).** Only the dis-

senting opinion of Justices Black and Douglas makes reference

to the statute. 339 U.S. at pp. 613-4. This Court's opinion in

U.S. v. Adams, supra, is likewise silent on the statutory re-

quirement. A ruling in Standard Industries v. Tigret Ind.,

Inc., 397 U.S. 586 (1970), might have articulated the

statutory limitation, but was precluded by a four to four split

in this Court.

This case shows what can happen when 35 USC 112 is ig-

nored. The trial court here found the claim invalid over the

prior art. But the Court of Appeals for the Seventh Circuit

reconstructed the patent claim to distinguish the art and sus-

tain validity in reliance on the showing that chemical coaction

of soap, borax, and phosphate gave new results under certain

process conditions. The coaction is not in the claim language,

or even described in the specification, and applies only to par-

ticular conditions within the broad, otherwise invalid, claim

scope.

Thereafter, the scope of Claim 4 could only be ascertained

from the text of the Seventh Circuit opinion and plaintiffs’

representations upon which it was based. The Seventh Circuit

opinion stressed the borax coaction. Plaintiffs had repre-

sented it to be “essential to the successful operation of the

** Joint App., 2a.

process.”*® GM justifiably and in good faitn treated the borax

coaction as the touchstone and considered processes not having

such coaction to be outside the patent claim, as recon-

structed. This objective measure of patent scope enables

infringement to be determined by tests or by chemical know-

ledge. The soundness of the GM position was confirmed by

the Seventh Circuit Houdaille ruling in 1967, where that

Court again stressed the borax coaction and held that success-

ful usage of the bumper processes with a borax lubricant —

but no showing of borax coaction — was insufficient to show

infringement.*°

Heeding the Houdaille noninfringement holding, plaintiffs

attempted in the infringement trial of this case to prove the

borax coaction with the soap and borax lubricants there in-

volved. They failed.

The Court of Appeals for the Third Circuit has now cast

aside the “law of the case” which was fixed by the Seventh Cir-

cuit to save patent validity. It has held infringement by borax

bumper processes for which proofs of the borax coaction are

nonexistent, or have failed.*' On the neutralizing rinse proc-

esses only an unintentional and unkncwn amount of borax

could have stayed on the work-piece.** Bu: having discarded

demonstrated borax coaction as an infringement proof re-

quirement, the court had no way to distinguish the amount of

borax and the process conditions that infringe and the

amount of borax and process conditions that do not. Hence

* fn. 4, p. 5, supra.

* fn. 13, p. 7, supra.

*' Para. 43, Opn. Dec. 15, 1981 (Joint App., 324a).

** Section IIC2, Report of Special Master February 7, 1980 (Joint App.,

191a).

the holding of patent infringement despite the master’s ap-

proved findings that the neutralizing rinses were old and were

not intended to, and did not, bring about the end results of

lubricity and cleanability that the court itself had previously

relied upon.

When it considered the TKPP bumper processes, the court

below relied upon this Court’s Graver Tank opinion, supra®’,

as well as other federal appellate decisions broadly sanction-

ing the application of equivalents to enlarge claims.** None of

the opinions involved a patent previously held invalid over the

prior art in the form issued by the Patent Office. None men-

tioned 35 USC 112.

Referring to these cases, but in violation of 35 USC 112, the

court below applied “equivalents” without first requiring pro-

of of the borax coaction and despite uncontested evidence

that TKPP cannot undergo the same chemical reactions as

borax. Were the claim, as written, so elastic that it could be

read as limited to the unexpected borax coaction and

therefore valid over the prior art, and at the same time be

readable so as not to require such coaction on infringement, it

would be invalid on its face for non-compliance with 35 USC

112. General Electric Co. v. Wabash Appliance Corp., 304

U.S. 364, 368 (1938). Moreover, the court’s reliance solely

upon similiarity of end-results — without considering

whether both the means and the mode of operation are

“substantially the same” — was a “flagrant abuse of the term

‘equivalents’”. Westinghouse v. Boyden Power Brake Co.,

170 U.S. 537, 568 (1897). To the same effect is Graver Tank

v. Linde Air Prod., supra, at p. 608.

5* Para. 44, Opn. Dec. 15,1981 (Joint App., 324a).

* Para. 45-6, Opn. Dec. 15, 1981 (Joint App., 325a-327a).

Had this case remained in the Seventh Circuit for a deter-

mination of infringement, as did the Houdaille case, proof of

the borax coaction would be required. Plaintiffs’ failure to

prove such coaction would have been fatal. But this case was

transferred, and the conflicting view of the Third Circuit has

led to a double standard and a miscarriage of justice.

There is an urgent need for a ruling by this Court that

judicial interpretation and application of pateat claims must

comply with 35 USC 112. Specifically, this Court should grant

the writ and, on the undisputed evidence and found facts in

this case, rule that:

1. The claim as validated by the narrow and

restricted construction applied by the Seventh Cir-

cuit cannot now be expanded by the doctrine of

equivalents to cover the TKPP lubricants. Cf: Ex-

hibit Supply Co. v. Ace Patents Corp., 315 U.S.

126, 136 (1941).

2. Borax neutralizers used to neutralize and not to

improve lubricity or cleanability, and not having

such effect, cannot infringe the claim as narrowed

to save validity.

3. The claim as validated because of the borax

coaction cannot be infringed by any process not

shown to achieve the borax coaction.

Such holdings will properly caution the lower courts against

misinterpreting this Court’s silence on 35 USC 112 in Graver

Tank v. Linde, supra, and U.S. v. Adams, supra, and assure

adherence to the statute at all times.

CONCLUSION

For the reasons stated, this Petition for Certiorari should be

granted.

Respectfully submitted,

George E. Frost Arthur G. Connolly

3044 W. Grand Blv'd. Farmers Bank Bld’g.

Detroit, Michigan 48202 Wilmington, Delaware 19899

313-556-3586 | 302-658-9141

Counsel for Petitioner,

General Motors Corporation

March 9, 1982

The following information is provided by General Motors

Corporation pursuant to Supreme Court Rule 28.1: All U.S.

and Canadian subsidiaries of General Motors Corporation are

wholly owned with the exception of Motor Enterprises, Inc.,

which is partly owned by the U.S. Small Business Administra-

tion.

Foreign subsidiaries in which a private person could have a

EXHIBIT I

financial interest are as follows:

Fabrica Colombiana de Automotores S.A.

Gemeinnutzige Opel Wohnbaugesellschaft Mit

Beschrankter Haftung

General Motors Acceptance Corporation,

Nederland N.V.

General Motors de Colombia S.A.

General Motors Iran Limited

General Motors Kenya Limited Industrial

Commercial Development Corporation

. General Motors Korea Co., Ltd.

. General Motors Pilipinas, Inc.

. GM Allison Japan Limited

. Industrija Delova Automobila, Kikinda

. Isuzu Motors Limited

. Isuzu Motors Finance Co., Ltd.

. Saudi American Machinery Maintenance

Company (SAMMCO)

14. Packard Electric Ireland Limited

15. RADIO FIDUCIAIRE, S.A.

16. Saehan Motor Company, Limited

17. Transfin (Proprietary) Limited

Some of the processes accused as infringements were per-

formed by Defendant using materials purchased under in-

demnity agreements with one or more of the following:

1. Amchem Products, Inc.

Bethlehem Steel Corporation

Braun Engineering Company

Colt Industries, Inc.

LTV Corporation

National Steel Corporation

Occidental Petroleum Corporation

Pennwalt Corporation

Republic Steel Corporation

United States Steel Corporation

rr FF FP FP PP PP

—

L. -

xipuaddy yulop

Office - Supreme Cour, U.>. |

FILED

LO i962

ipeR L STEVAS,

Staies |

No. 81-1661

In the Supreme Court of the 4

‘

OCTOBER TERM, 198"

GENERAL Motors CorporatTION,

Petitioner,

VS.

Devex CorPORATION, ET AL.,

Respondents.

ON WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

JOINT APPENDIX — VOLUME I

Artuur G. Conno.iy Georce E. Frost

Farmers Bank Building 3044 W. Grand Boulevard

P.O. Box 2207 Detroit, Michigan 48202

Wilmington, Delaware 19899 313-556-3586

302-658-9141

Counsel for General Motors Corporation

Sipney BENDER Freperick B. ZieseNHEIM

Aaron LewiTTes 301 5th Avenue

585 Stewart Avenue Pittsburgh, Pennsylvania 15222

Suite L-16 412-471-1590

Garden City, New York 11530

516-222-0147

Counsel for Devex Corporation, et al.

(Continued on inside front cover)

mr ee i er

RENAISSANCE PRINTING COMPANY, 76 W. ADAMS

9TH FLOOR, DETROIT, MICHIGAN 48226 — (313) 964-3185

Petition for Certiorari filed March 9, 1982

Certiorari granted May 24, 1982

Davin F. ANDERSON Wuuiam C. McCoy, Jr.

350 Delaware Trust Building 1200 Leader Building

P.O. Box 951 Cleveland, Ohio 44114

Wilimgton, Delaware 19899 216-579-1700

302-658-6771

Lynn ALSTADT

301 5th Avenue

Pittsburgh, Pennsylvania 15222

412-471-1590

Of Counsel for Devex Corporation, et al.

TABLE OF CONTENTS

PAGE

Title 35, U.S. Code, Section 112 ................. la

Title 35, U.S. Code, Section 264 ................. la

Section 4888, R.S. (Repealed and Codified by Act of

DY BE, SOR, GOMER. TEED oc cccccsvnvcssccces 2a

Section 4921, R.S. (Repealed and Codified by Act of

DE BD, Bees SPU. TOD oc ccccsccseccsesess 2a

Consolidated Cases (Devex Corp. v. Houdaille In-

dustries, No. 57 C 892, and Devex Corp. v.

General Motors Corp., No. 56 C 1912, Northern

District of Illinois)

Decision on Invalidity by the District Court

GROG GUD. 8, BERD cc ccsccccssiccossecees 3a

Findings of Fact aiid Conclusions of Law by the

District Court on Invalidity dated June 29,

PN 6. 66b sald ntnceveneseesestsad eneaska 26a

Final Judgment by District Court on Invalidity

GES SE wide becedevedvecesévis 59a

Opinion on Validity, United States Court of Ap-

pealls for the Seventh Circuit dated July 12,

1963 (321 F (2d) 234, cert. den. 375U.S.971) = 6la

Mandate of U.S. Court of Appeals for the

Seventh Circuit dated January 17, 1964 ..... 74a

Denial of Petition for Writ of Certiorari by the

United States Supreme Court dated Jan. 6,

DS Fos bwin cacdeungi ers tabwemsee cee aee 76a

Devex v. Houdaille Industries

Decision of District Court granting plaintiffs’ mo-

tion for summary judgment on infringement

against Houdaille Industries, Inc. dated

NED DO, BOD 5 ccc cccovesdecesvecens

Opinion of Seventh Circuit Court of Appeals

dated July 12, 1967 in Devex Corp. et al v.

Houdaille Industries, Inc. reversing the judg-

ment of the District Court.................

Devex et al. v. General Motors

Opinion of the District Court of Delaware grant-

ing leave to amend the complaint to assert doc-

trine of equivalents dated May 23, 1968......

Opinion, findings of fact and conclusions of law

of the District Court of Delaware on non-

infringement dated September 8, 1970 ......

Memorandum Opinion of Judge Wright dated

gg TTT rer TT tre

Final Judgment of the Delaware District Court

finding non-infringement by defendant

General Motors Corp. and dismissing the

amended complaint with prejudice dated

SN Ts GES o 0 0k cer stone ons bpnsrcess

The Opinion of the Court of Appeals for the

Third Circuit reversing the District Court's

Judgment of non-infringement dated Septem-

SPU NOE F000 0ds cckeneVadibe assed ct os

Judgment of the Third Circuit Court of Appeals

dated September 26, 1972 ................

Denial of GM's Petition for Rehearing dated

PRT, GOO 6 cin. sccnc'cike en vanvease

76a

85a

10la

105a

133a

136a

Denial of GM's Petition for Writ of Certiorari by

United States Supreme Court (1973) ........

Special Master’s report dated February 7, 1980

recommending that judgment be entered

against General Motors in the amount of

$5,731,455.80, plus interest of $6,496,482.66,

or a total of $12,227,938.46 ...............

Opinion of the Delaware District Court (Wright,

S.J.) dated on August 22, 1980 modifying the

recommendation of the Special Master and,

inter alia, awarding a reasonable royalty on

bumpers in the amount of $8,813,945.50, plus

prejudgment interest in the amount of

$11,022,854.97, totaling $19,836,800.47 ....

Final Judgment of the District Court of Delaware

dated October 6, 1980 ...........-.00545:

Opinion of the Third Circuit Court of Appeals

dated December 15, 1981 affirming the judg-

ment of the District Court.................

Judgment of the Third Circuit Court of Appeals

dated December 15, 1981 ...............5.

Denial of GM's Petition for Rehearing En Banc

GING BB, GEE 6 oc cctccccscevesss

Denial of plaintiffs’ Petition for Rehearing to the

Panel dated January 13, 1982..............

l5la

153a

280a

300a

303a

34la

343a

UNITED STATES CODE

TITLE 35 — PATENTS

* = *

§ 112. Specification

Lhe specification shall contain a written description of

the invention, and of the manner and process of making and

using it, in such full, clear, concise, and exact terms as to

enable any person skilled in the art to which it pertains, or

with which it is most nearly connected, to make and use the

same, and shall set forth the best mode contemplated by the

inventor of carrying out his invention.

The specification shall conclude with one or more claims

particularly pointing out and distinctly claaming the subject

matter which the applicant regards as his invention. A claim

may be written in independent or dependent form, and if in

dependent form, it shall be construed to include all the limi-

tations of the claim incorporated by reference into the depen-

dent claim.

An element in a claim for a combination may be expressed

as a means or step for performing a specified function without

the recital of structure, material, or acts in support thereof,

and such claim shall be construed to cover the corresponding

structure, material, or acts described in the specification and

equivalents thereof. (Amended July 24, 1965, Public Law

89-83, sec. 9, 79 Stat. 261.)

§ 284. Damages

Upon finding for the claimant the court shall award the

claimant damages adequate to compensate for the infringe-

ment but in no event less than a reasonable royalty for the

use made of the invention by the infringer, together with

interest and costs as fixed by the court.

When the damages are not found by a jury, the court shall

assess them. In either event the court may increase the dam-

ages up to three times the amount found or assessed.

The court may receive expert testimony as an aid to the de-

termination of damages or of what royalty would be reason-

able under the circumstances.

Patent Statutes as Repealed and Codified by Act of July 19,

1952 (66 Stat. 792)

Before any inventor or discoverer shall receive a patent for

his invention or discovery, he shall make application

therefor, in writing to the Commissioner of Patents, and

shall file in the Patent-Office a written description of the

same, and of the manner and process of making, con-

structing, compounding, and using it, in such full, clear,

concise, and exact terms as to enable any person skilled in

the art or science to which it appertains, or with which it is

most nearly connected, to make, construct, compound and

use the same; and in case of a machine, he shall explain the

principle thereof, and the best mode in which he has

contemplated applying that principle, so as to distinguish it

from other inventions; and he shall particularly point out

and distinctly claim, the part, improvement, or combina-

tion which he claims as his invention or discovery. (Section

4888, R.S.)

The several courts vested with jurisdiction of cases arising

under the patent laws shall have power to grant injunctions

according to the course and principles of courts of equity, to

prevent the violation of any right secured by patent, on such

terms as the court may deem reasonable; and upon a judg-

ment being rendered in any case for an infringement the

complainant shail be entitled to recover general damages

which shall be due compensation for making, using, or selling

the invention, not less than a reasonable royalty therefor,

together with such costs, and interest, as may be fixed by the

court. The court may in its discretion award reasonable attor-

ney’s fees to the prevailing party upon the entry of judgment

on any patent case. (Section 4921, R.S., as amended by Act of

Aug. 1, 1946, 60 Stat. 778.)

CONSOLIDATED CASES

Devex Corp. v. Houdaille Industries, No. 57 C 892

Devex Corp. v. General Motors Corp., No. 56 C 1912

(Judge Edwin A. Robson, N.D. Illinois, February 1, 1962)

DECISION ON MERITS ON VALIDITY OF CLAIM 4

OF REISSUE NO. 24,017.

An order of November 19, 1949, in these two causes, con-

solidated for trial, the common issue of validity’ of Claim 4 of

Reissue Patent No. 24,017 to John A. Henricks, reissued June

7, 1955, on original Patent No. 2,588,234, dated March 4,

1952, on application filed October 31, 1950.?

Suit No. 56 C 1912 was filed November 13, 1956, and [369]

No. 57 C 892 on May 17, 1957. The patent concerns a

“Method of Coating and Drawing Metal and Composition

Therefor.” Claim 4 thereof is as follows:

' But not otherwise.

* On April 29, 1946, Henricks had filed patent application No. 665,905,

which was abandoned.

“The process of working ferrous metal which

comprises forming on the surface of the metal a

phosphate coating and superimposing thereon a

fixed film of a composition comprising a solid

meltable organic binding material containing

distributed therethrough a solid inorganic com-

pound meltable at a temperature below the melting

point of the ferrous metal phosphate of said coating

and having a hardness not exceeding 5 on the Mohs’

hardness scale, and thereafter deforming the

metal.”

The patent was assigned to plaintiffs in 1955.

It is the Court’s conclusion that Claim 4 of the reissue pa-

tent is invalid as anticipated by prior patents, prior use, and

prior publications. The United States patents to Singer, Oroz-

co and Whitbeck, the British patents, the 1943 runs at Briggs

Manufacturing Company, and the German publications con-

sidered together reveal the phosphate coatings on metals to be

drawn, in conjunction with lubricants, some co-acting with

the phosphate coating. While it is arguable that the precise

combination and co-action indicated by the patent are not

found verbatim in the prior art, one armed with the

knowledge of a worker skilled in that field could, the Court

believes, have achieved the result covered by Claim 4 of the

reissue patent. Furthermore, the breadth and indefiniteness

of proportions of the elements of that claim® preclude a

holding of its validity in view of the knowledgeable prior art,*

in [370] view of the disclosures of the specifications, and un-

* The specifications state that borax is to be used in the portions of two

to five times the amount of soap.

* There is no specification, disclosure or limitation in Claim 4 of the

amount or proportions of solid inorganic compound (borax) or solid

meltable organic binding material (soap).

warranted monopolizing of the field of use of borax and

soap.°

Plaintiffs state the invention is concerned with the lubrica-

tion of metal surfaces under the extreme conditions en-

countered in the drawing and deforming of metals which are

difficult to work, such as steel. They rely, as is to be expected,

upon the statutory presumption of validity (35 U. S. C. §282),

especially as buttressed by the issuance of the patent over

similarly cited prior art® and because the facts supportive of

validity are gleaned from defendants’ witnesses.’ Defendants,

however, assert this presumption is of no avail because “the

true state of the prior art was not considered by the Patent Of-

fice."* It is explained that in the drawing of metal to

transform a flat blank into another desired shape, there is

necessarily some relative movement between the surface of the

workpiece and the surface of the die, and a generaticn of high

pressures and temperatures. Unless suitable provision for

lubricating the surfaces is made, tearing of the metal or gall-

ing of the dies results, and the problem, plaintiffs state, is

most acute where difficult draws of ferrous metal are in-

* O'Reilly, et al. v. Morse, et al., 56 U.S. 65 (1853); Holland Furniture

Company v. Perkins Glue Company, 277 U.S. 245 (1928); The Incandes-

cent Lamp Patent, 159 U.S. 465 (1895); General Electric Co. v. Wabash

Appliance Corp., et al., 304 U.S. 364 (1938); United Carbon v. Binney &

Smith Co., 317 U.S. 228 (1942).

* Anderson Company v. Sears Roebuck and Co., et al., 265 F. 24 755

(7th Cir., 1957); The University of Illinois Foundation v. Block Drug

Co., et al., 241 F. 2d 6 (7th Cir. 1957).

’ Eibel Process Company v. Minnesota & Ontario Paper Company, 261

U.S. 45, 53 (1923).

* Moran, et al., v. Protective Equipment, Inc., et al. 84 F. 24 927 (7th

Cir. 1936); Hobbs v. Wisconsin Power & Light Co., et al., 250 F. 2d 100

(7th Cir. 1957).

volved. The prior art revealed the use of various lubricating

schemes including ordinary lubricating oils [$71] or

lubricants containing infusible pigments, such as clay, lime,

mica or graphite — “wet film” lubricants, not fixed on the

surface of the workpiece during the drawing operation. The

function of the infusible pigments was to separate the die and

the workpiece at the points of extreme deformation to prevent

the squeezing-out of the lubricants, and simultaneously to act

as a sponge for the lubricants. Although the functioning of

the pigmented compositions was better than the others, the

result was not too desirable in that minute particles of the

pigments became embedded in the work drawn leaving it with

a dull finish. Patentee, plaintiffs claim, requires a fixed soap-

and-borax film, not just any ordinary wet film or grease lubri-

cant.

It is defendants” contention that Claim 4 is invalid because

(1) of lack of patentable invention in view of the prior art

known and practiced on April 29, 1946, the date of the aban-

doned application; (2) the process was known and used by

others before the date of invention; (3) the patentee did not

invent the process but simply adopted a process which was ob-

vious to persons skilled in the art; (4) it is an aggregation of old

steps which when com- [372] bined produces no new result;'®

(5) it is beyond the disclosure of the specifications; (6) it fails

* Defendant Houdaille adopted defendant General Motors Corpora-

tion's reply brief and filed no “separate brief.”

‘© Phosphate coatings were known to be improvement and aid in draw-

ing and deforming operations and would increase life of drawing tools

and reduce number of drawing operations (British patents Nos. 494, 830

(1938), 496, 866 (1938), 1941 publication Korrosion and Metallwirt-

schaft, 1938 U.S. Singer patent No. 2,105,015), and that they would

provide a barrier to prevent scoring of metal being drawn or galling of

dies. Defendants cite Great Atlantic & Pacific Tea Co. v. Supermarket

continued on next page

to specify amounts and proportions of ingredients;'' (7) it

covers prior art materials of soap and borax not disclosed in

the specifications, which materials are used contrary to the

purposes patentee contemplated.

[373] Defendants contend that a patentee may not compel

independent experimentation by others to ascertain the

bounds of the claims'* and a patentee may not be claiming a

method broadly in terms of a result or function, foreclose all

means and ways of practically obtaining such result or objec-

tive.'® Substitution of one material for another of the same

class in an old combination does not constitute invention.'*

continued from previous page

Equipment Corp., 340 U.S. 147 (1950); Hollister, Collector v. Benedict

& Burnham Manufacturing Company, 113 U.S. 59 (1885); Atlantic

Works v. Brady, 107 U.S. 192 (1882); Smith v. Nichols, 88 U.S. 112

(1874), Hotchhill, et al. v. Greenwood, et al., 11 Howard 248; Armour &

Co. v. Wilson & Co., Inc., 274 F. 2d 148 (7th Cir. 1960); Armour

Research Foundation, etc. et al. v. C.K. Williams & Co., Inc., 280 F. 2d

499 (7th Cir. 1960); Dow Chemical Co. v. Halliburton Oil Well Cemen-

ting Co., 324 U.S. 320 (1945); Jungersen v. Ostby & Barton Co., et al.,

$35 U.S. 560 (1949); Emery Industries, Inc. v. Schumann, et al., 111 F.

2d 209 (7th Cir. 1940); Himmel Bros. Co. v. Serrick Corporation, 122 F.

2d 740 (7th Cir. 1941).

* $5 U.S.C. § 112; Johns-Manville Corporation v. Johnson @ Co. v.

Hillman’s, 135 F. 2d 955 (7th Cir. 1948); Frust Treating Corporation, et

al. v. Food Machinery Corporation, 112 F. 2d 119 (5th Cir. 1940); The

Incandescent Lamp Patent, 159 U.S. 465 (1895); General Electric Co. v.

Wabash Appliance Corp., et al., 304 U.S. 364 (1938); United Carbon

Co., et al. v. Binney & Smith Co., 317 U.S. 228 (1942); Graver Tank @

Mfg. Co. Inc., et al. v. Linde Air Products Co., 336 U.S. 271 (1949).

'2 Standard Oil Company of California v. Tide Water Associated Oil

Co., 154 F. 2d 579 (3rd Cir. 1946).

'S National Carbon Co., Inc. v. Western Shade Cloth Co., 93 F. 2d 94

(7th Cir. 1937).

'* Johnson Laboratories, Inc. v. Meissner, 98 F. 2d 937 (7th Cir. 1938).

That broadness of a claim such as Claim 4, defendants assert,

has long been condemned. '*

On the other hand, patentable invention is claimed by

plaintiffs in that it is asserted that Henricks’ patented process,

although using old elements, achieves new and surprising

results, or, stated differently, the whole exceeds the sum of the

parts. 16

[374] They frankly concede that all the elements of the

Henricks’ invention were old, but urge they were put together

in a new way, resulting in new and unpredictable results and

reactions. They emphasize that Claim 4 uses a phosphate

coating (the abrasive coating of the Singer process), seemingly

a retrogression in the art; a fixed overlying film of which the

solid meltable inorganic consistent is soap and a meltable in-

organic compound (Borax) distributed therethrough,

meltable at a temperature below the melting point of the

abrasive phosphate coating and having a hardness not more

than 5 on the Mohs’ scale.

The “amazingly efficient” and “remarkable” results

claimed by plaintiffs from the Henricks’ patented process is

that “the surface of the product is improved, product dimen-

'® O'Reilly, et al. v. Morse, et al., 56 U.S. 61 (1853); Holland Furniture

Company v. Perkins Glue Company, 277 U.S. 245 (1928); The Incandes-

cent Lamp Patent, 159 U.S. 465 (1895); General Electric Co. v. Wabash

Appliance Corp., et al., 304 U.S. 364 (1938); United Carbon Co. v. Bin-

ney & Smith Co., 317 U.S. 228 (1924).

'® Great Atlantic &@ Pacific Tea Co. v. Supermarket Equipment Corp.,

340 U.S. 147 (1950); Lewyt Corporation v. Health-Mor, Inc., et al., 181

F. 2d 855 (7th Cir. 1950); Blaw-Knox Company v. I.D. Lain Company,

Inc., 230 F. 2d 373 (7th Cir. 1956); The Mojonnier Dawson Company v.

U.S. Dairies Sales Corporation, 251 F. 2d 345 (7th Cir. 1958); Armour &

Co. v. Wilson & Co., Inc., 274 2d 143 (7th Cir. 1960); Donner v. Sheer

Pharmacal Corporation, 64 F. 2d 217 (8th Cir. 1933).

sions are maintained with consistency, tool life is lengthened,

and the practical limits of the shaping operation are extend-

ed.” Further, the “formation of insoluble or difficultly-soluble

deposits on the drawn metal is inhibited, such as zinc stearate.

Instead of the phosphate coating reacting with the soap to

form insoluble abrasive compounds, the phosphate reacts

with the borax to form amorphous, glassy materials which

contribute significantly to the lubricating value of the coating

and assist in the drawing operation and yet, amazingly do not

present any problem of cleaning.” The process results in ar-

ticles of “superior quality at lower cost.” Defendants, on the

other hand, deny any unexpected or surprising co-action or

results by the use of soap-borax lubricants over phosphate.

They note that there is no substantial difference in the rods in-

troduced in evidence, drawn only with phosphate coating and

with soap, and with soap and borax.

[375] Plaintiffs adduced expert testimony of X-ray diffrac-

tion analyses asserted to prove the glassiness of the worked sur-

face. Defendants belittle the X-ray diffraction tests, as not

identifying with any certainty the quantitative values or

amounts of the compounds alleged to have been formed by

the chemical reaction of the borax, or that they were present

in any substantial quantity or had any controlling or signifi-

cant effect in the drawing operations to which the sample rods

were subjected.

Plaintiffs contend that the prior art other than that cited

before the Patent Office is without weight as not disclosing

anything not covered by the prior art that was before the Pat-

ent Office, and therefore is not significant as not disclosing

anything substantial not considered by the Patent Office.'’

They readily acknowledge prior art use of soap and borax dry

? Otto v. Koppers Company, Inc., 246 F. 2d 789, 801 (4th Cir. 1957).

10a

film lubrication over bare metal, patentee having so stated in

the specifications of the patent in suit. They confidently point

to the fact that defendants relied on thirty-one references at

the trial, which plaintiffs deign a per se indication that there

is no single anticipating reference, and the fact that so many

references were cited means that none of them anticipates.'*

Plaintiffs further maintain that defendants have the burden

of proving invalidity on the ground of prior public use, which

must be established beyond a reasonable doubt,'* and oral

[376] testimony unsupported by contemporaneous documen-

tary or physical evidence is not enough.*® They dispatch with

alacrity the alleged prior public uses as having been very brief

episodes during World War II, and none of the presently ac-

cused processes stems from those uses, and “Whatever was

done in those plants was history — long since dead and buried

and resurrected only for the defense of this case.”

Defendants point out that the Patent Office did not have

before it at the time of the issuance of the Henricks’ patent, the

Singer patent, the Orozco patent No. 1,982,065, or the British

patent No. 494,830, or several material publications.*' The

Patent Office was not advised that lubricated phosphate

Ric-Wil Co. v. E.B. Kaiser Co., 179 F. 2d 401, 404 (7th Cir. 1950),

cert. den. 329 U.S. 958.

'* Coffin v. Ogden, 85 U.S. 120 (1874); Eibel Process Company v. Min-

nesota & Ontario Paper Company, 261 U.S. 45 (1923); Smith v. Hall,

$01 U.S. 216 (1937).

% Miner v. T.H. Symington Company, 250 U.S. 383 (1919); Smith v.

Hall, 301 U.S. 216 (1937); Cline Electric Mfg. Co. v. Kohler, 27 F. 2d

638; Cold Metal Produc.s Company v. E.W. Bliss Company, 285 F. 2d

244 (1960).

*! Transactions of American Society for Steel Treating, 1933; Wire &

Wire Products, October, 1931; Korrosion & Metallschutz, 1941;

Metallwirtschaft, 1942; Stahl and Eisen, 1942.

lla

coatings were in common public use in 1945 in drawing metal;

or that Gilron Products Company's Drawcote soap-borax

lubricants disclosed in the Orozco No. 2,469,473 and Henricks

No. 2,530,837 patents, and Whitbeck patent No. 2,470,062

were in common public use in 1943. The Orozco patent at-

tributes the lengthening of die life** to the use of soap-borax

lubricants which were in public use in 1943.

The Singer patent No. 2,105,015,”* issued January 11,

1938, on application of May 14, 1936, pertained to

“Mechanically Working Metal Article,” having for its [377]

object the reduction or elimination of difficulties theretofore

encountered through contact of the metal article and the

working tool, particularly in the field of ferrous metals,

specifically, steel, where drawing dies were found to tend to

bite into or seize the metal, thereby interfering with the prop-

er drawing or reducing operation. It is noted by plaintiffs that

theretofore lubricants, principally oil, had been utilized, but

were found insufficient at high speed or high deformation

rates. They further cite the advantages and disadvantages of

the art of liming or soft metal coatings which had been used.

The patent disclosed that the difficulties could be materially

reduced or overcome by providing the surface, of the article

worked on, with a “thin crystalline coherent coating of a

metallic oxide or salt, with crystals of which are in

heterogeneous crystalline joint with the metal base and are

tightly grown together with the latter. ***” It disclosed that

while the coating could be considered a lubricant, it was not a

lubricant in the ordinary sense for the reason that the present

methods of lubrication “may also be used in conjunction with

*2 Stated in the patent to be thirty per cent.

** Not before the Patent Office as prior art, but defendants state that

British Patent No. 496,866 was cited and it discloses a process similar to

the Singer process.

l2a

the practice of the present process, and in many instances will

be an essential factor in obtaining proper results.” (Emphasis

ours).

This Singer patent recommends the use for treating

“coatings of iron or complex iron phosphates or oxalates.”

“There is formed on the article a dense thin crystalline

coherent and tightly adherent coating of salts of phosphoric

or oxalic acid which combines both chemically and physically

with the metal of the base.” Singer further states that “such a

coating adapts the article admirable to [378] mechanically

working and reduces or eliminates the troubles arising from

the contact of the article with the working element.” He also

specifies that “In many instances no further removal of the

coating is necessary after working, either because it has been

substantially removed during the working operation or that

portion which remains does not interfere with the use to which

the article is subsequently applied.”

Defendants point out that the 1938 Singer patent is

specifically directed to the process of drawing steel, to the use

of phosphate coatings, to prevent metal-to-tool contact in the

drawing process, and recommends that the phosphate

coatings be lubricated with known methods of lubrication,

which process permits severe reduction rates. They further

maintain all patentee did was follow Singer's teachings exact-

ly, using well-known prior art methods of lubrication, Gilron

soap-borax, to Singer's phosphate coating.

Plaintiffs differentiate Singer's contribution as forming a

sponge-like coating on the surface of the workpiece, the

coating being adherent to it and not displaceable and

necessarily moving with the surface of the workpiece into the

high pressure zone, and being sponge-like would carry lubri-

cant with it. The sponge of Singer was a metallic phosphate of

zinc or iron. Plaintiffs state the phosphate coatings were old

and had no lubricating value per se, but on the contrary were

13a

abrasive. The limitations of the Singer process were that it left

an oily film upon the surface of the workpiece which film was

difficult and expensive to remove, especially where elec-

troplating was contemplated, which required a clean surface.

Plaintiffs [379] contend that Singer nowhere teaches or sug-

gests the use over phosphate of a fixed film comprising an

organic binding material with meltable inorganic compounds

distributed through it, such as soap and borax, and so clearly

does not anticipate Claim 4.

It is defendants’ contention that patentee knew in 1943**

that Gilron Drawcote soap-borax lubricants could be used

over phosphate coatings in accordance with Singer's teachings

but it was to Whitbeck’s interest to promote the sale of

Drawcote at the better price he could obtain if used without

the phosphate coating. If any superiority arises in the use of

the Gilron Products it is due to the patented features of the

Orozco patents 2,469,473 and 2,530,837, and Whitbeck pat-

ent 2,470,062, and the instant patent is but an effort to re-

patent the Singer process and the patented Gilron soap-borax

lubricants.

Another of the cited prior art is U.S. Patent No. 2,469,473

to Orozco and Henricks, dated May 10, 1949,*° on a “Method

of Lubricating Metal Surfaces During Cold Working.” The

patented invention utilizes a planned succession of endother-

mic reactions initiated by the frictional heat that not only

cools the frictional surfaces by absorbing heat but which pro-

duces nascent fluid lubricants at points of extreme heat and

pressure. “The preferred procedure uses both fusible organic

and fusible inorganic mate- [380] rials to produce such suc-

cession of reactions.” This patent further stated that it

** Henricks assisted Whitbeck, his employer, at the Briggs Company.

** Applied for in 1943.

l4a

“utilized inorganic compounds to achieve the essen-

tial cooling and lubrication of the ‘sliding’ surfaces

at the elevated temperatures existing when com-

. bustible organic lubricants are ordinarily no longer

capable of functioning; but, in addition, we utilize

properties of the inorganic materials to increase the

thermal stability of the preferred organic lubricants

Defendants cite this patent as disclosing increased die life

from the use of prior art Gilron Products’ soap-borax

lubricants. They cite Orozco Patent No. 1,982,065 of

November 27, 1934, as showing that it was known that soap

and borax were a good lubricant for use in deforming steel by

cold rolling to prevent sticking of the work and prevent scarf-

ing of the work.

The 1938 British Patent No. 494,830 was not considered by

the Patent Office. Defendants claim that this patent discloses

in all essential respects the process broadly claimed by Claim 4

of the patent in suit. This British patent taught the treating of

iron pipes, prior to drawing, with fats or oils, or to precipitate

deposits thereon in order to soften the surface and to reduce

the wear on the drawing tools. It stated that it also has been

“the practice to mix the oil or fat with pulverulent substances,

such as talc or litharge, for the purpose of increasing its effi-

ciency.” Defendants point out that fats are known to include

tallows which are solid at room temperature; that tallows are

one of the oldest and most extensively used ingredients in

drawing compounds, and it was known to mix drawing com-

pounds with fillers including borax. They also state that

borax, aluminum stearate and litharge are within the

classification of the “solid inorganic com- [381] pound” in

Claim 4, that each has a melting point below that of ferrous

phosphate; and each has a hardness not exceeding 5 on the

Mohs’ hardness scale. All are recommended in the patent in

l5a

suit as solid inorganic compounds to be included in the “solid

meltable organic binding materials,” which is claimed and

alleged in the patent in suit to include sodium stearate or

sodium tallow soap.

The British patent further states that

“in place of using lubricants, to provide the surface

of the iron, *** by means of a phosphate treatment,

with a crystalline skin of oxides or salts, the crystals

of which coalesced firmly with the foundations,

such crystals being intended to lessen the wear on

the drawing dies.”

It further states:

“(T]he layers applied by specific surface-treatment

processes exhibit a porous, absorbent structure, and

that the combination of such a surface treatment

with a lubricating oil or fat, furnishes favorable

results. *** [S]juch chemical processes as are

capable of depositing a crystalline layer possessing

active capillary properties on the surface of the

workpiece and coalescing firmly with the founda-

tion, said crystalline layer being also adapted, by

reason of its absorbent capacity, to retain oils and

fats. The phosphatising processes, and also the

known treatment with oxalates and tannates, are

specifically suitable for iron and steel.”

The three prior public uses relied upon are (1) at the Briggs

Body Company plant at Detroit; (2) the Buick Motor Com-

pany plant at Flint, and (3) the Northern Engraving Com-

pany plant at LaCrosse. Plaintiffs claim that the processes

used were phosphate coating applied to shell casing blanks on

which were applied wet film lubricants, in accordance with

the Singer process. The wet film lubricant was abandoned,

plaintiffs state, and the dry film soap and borax system

l6a

substituted for it to eliminate the phosphate. The phosphate

coating compounds were sup- [382] plied by Parker Rust

Proof Company. Plaintiffs cite the fact that no field reports

were produced for two of the three purported public uses

which they interpret as indicative that if produced they would

have refuted and not aided the defense.*® These uses, if exis-

tent at all, plaintiffs claim, were so fleeting as to be of no legal

significance, “accidental results, not intended and not ap-

preciated” and not constituting anticipation.*’

Defendants, however, refute the weight to be accorded to

the lack of field reports on the ground Parker Rust Proof

Company in 1943 was not concerned with particular lubri-

cants used over phosphates, and was not so interested until

1949 when it entered upon the development of Bonderlube

235.

Plaintiffs’ version of the Briggs Body Company’s prior use is

that it was done at the beginning of experimental testing in

changing over from the Singer process to Gilron, and

amounted to less than two hundred blanks which had a soap

and borax coating over the phosphate, the blanks having

been subjected to six consecutive forming operations. These

blanks were lost track of in the big flow of material. The inci-

dent is said to have no technical or commercial significance,

and is not an invalidating prior use.** Plaintiffs further point

out that at the Briggs’ [383] plant the phosphate tank was

moth Oil Co. v. United States, 275 U.S. 13 (1927).

*” Eibel Process Company v. Minnesota & Ontario Paper Company, 261

U.S. 45, 66 (1923).

** Miner v. T.H. Symington Company, 250 U.S. 383 (1919); Ebel Pro-

cess Company v. Minnesota & Ontario Paper Company, 261 U.S. 45, 53

(1923).

lia

emptied and refilled with Gilron material so that the tank was

no longer available for phosphating, and there never could

have been a simultaneous use of Gilron over phosphate.

Defendants, on the contrary, claim that these operations at

Briggs were not limited to a few baskets of shells but that there

continued to be drawn through the summer, shells with

phosphate coatings applied, and with the Gilron Drawcote.

They stressed the fact that full knowledge of successful runs at

the Briggs plant was had by patentee, Whitbeck (superior of

patentee at Briggs Company), Tousley, and Gilron Company,

and that proof of the knowledge was sufficient under the law*®

and the use was neither embryonic nor incomplete. Defen-

dants also maintain the proof of prior use may be by parol

testimony.*°

In scotching as anticipatory the purported prior use at the

Buick plant, plaintiffs point out that a wet film lubricant with

scratchy, infusible pigments was employed as opposed to the

fixed film with meltable inorganic compounds of Claim 4.

There was said to be no fixed film organic binder and no solid

inorganic compound meltable at a temperature below the

melting point of the ferrous metal phosphate, or that the

drawing compound used at Buick formed a fixed film over

the phosphate or was anything other than a conventional wet

film lubricant. There is no certainty of proof that sulphur was

used, but even if it were used it is an element and not an in-

organic compound within Claim 4.

*® Coffin v. Ogden, 85 U.S. 120 (1873).

” Coffin v. Ogden, supra; Becker v. Electric Service Supplies Co., 98 F.

2d 366 (7th Cir. 1938); Hobbs Patent Co. v. Atlas Specialty Mfg. Co.,

244 Fed. 176 (7th Cir. 1917); Kaser Process Pie Co., et al. v. Pie Bakeries

of America, Inc., 50 F. 2d 414 (D.C. Ill. 1931).

18a

[$84] Defendants claim, however, the Buick plant was in

large production of steel shell cases using lubricated

phosphate coatings.

Plaintiffs also eschew the activities at Northern Engraving

as a prior use on the basis that there was no fixed film used

there and no meltable inorganic compounds in it. The Fer-

rolube used was not dry but plastic; in the drawing operation

it was wiped off. Further, plaintiffs claim that inasmuch as

the cost of the constituents of Ferrolube — stearic acid,

sodium stearate, and sulphur — substantially exceed the

price of Ferrolube, the story concerning Ferrolube is wholly

incredible. ,

Defendants contend, on the other hand, this Company was

in large production of lubricated phosphate castings, and

that while Ferrolube*' was not a fixed film and had no

meltable inorganic compound in it, it did provide a film

which stayed fixed with the phosphate coating through the

drawing operation where both were substantially removed; it

was a successful drawing lubricant and operation. Defendants

note Claim 4 only requires that the film remain fixed with the

phosphate coating in the drawing operation.

Defendants cite the publication, Wire & Wire Products, of

October, 1931, as showing that tallow soap combined with

aluminum stearate was a good drawing lubricant. They cite

the June, 1941, publication of Korrosion & Mettalschutz as

disclosing the use of zinc phosphate coatings in cold forming,

lubricated with boring oil emulsion, as lengthening the life of

drawing tools, reducing friction in the [385] forming process,

increasing the reduction and drawing speeds, and reducing

*! There was a dispute raised by plaintiffs over the contents of Ferrolube

asserting that according to the cost of the constituents it was being sold

for less than cost price but defendants point out that much of the con-

tents was water, thus reducing the product cost per pound.

19a

the number of drawing operations; the 1942 publications of

Mettalwirtschaft and Stahl und Eisen as also teaching zinc

phosphate coatings, lubricated with soap thereby providing

water insoluble soap films on the coatings. Defendants point

out that nothing was said in the patent in suit about increas-

ing the die life or the life of the drawing tools with the soap-

borax lubricants applied over phosphate coatings.

The plantiffs state of the prior art development of the

“Gilron” dry run film lubricant (called Drawcote) that it was a

reversion to the early idea of using a finely divided solid

material as a lubricant which was applied wet and permitted

to dry out to a dry fixed film. One of the formulas consisted of

soap and borax. The dry soap film formed on the workpiece

served as a carrier for the borax somewhat analogous to the

phosphate coating in the Singer process, except that the soap

film had inherent lubricating value, and did away with the

abrasive phosphate coating of the Singer process. When a

soap film was used instead of the lubricating oil contemplated

by Singer, the problem of residual deposit on the surface of

the workpiece remained. The soap film when first applied was

water soluble but after drawing was insoluble, because the

soap was one made of animal fat, which chemically is sodium

stearate, and when placed cover a zinc phosphate coating and

the work drawn, a chemical reaction results in the formation

of zinc stearate, which is also a soap but a water-insoluble one,

difficult to remove even with alkaline cleansing agents.

[386] Defendants cite as well known in 1943, more than two

years prior to April 29, 1946, the date of the original applica-

tion, the processes of drawing lubricants including tallow and

tallow soaps with fillers or pigments including borax,

aluminum stearate and litharge, compounds meltable below

the melting point of ferrous phosphate and having a hardness

not exceeding 5 on the Mohs’ hardness scale; iron, zinc and

manganese phosphate coatings lubricated with known

20a

lubricants, or with soap, providing water insoluble soap films;

Gilron Drawcote soap-borax fixed film drawing lubricants

were known and in wide public use, and it was known it could

be used successfully on zinc phosphate coated steel.

Plaintiffs, however, understandably argue that the fact

that defendants follow the teachings of the patent in suit

rather than the prior art is indicative of the presence of inven-

tion.*?

It is plaintiffs’ position that Henricks’ invention was not ob-

vious, as is manifested by the number of citations of an-

ticipating patents and uses;** the unobviousness of Henricks’

invention is shown by the history of Parker Rust Proof Com-

pany, a leader in the field. In 1949, it had decided to

manufacture lubricating compounds for use over phosphate.

It made a search of the literature which should have furnished

them knowledge of the wet film lubricants for use with the

Singer process and the dry film soap and borax lubricants, ex-

emplified by Whitbeck [387] U.S. Patent No. 2,470,062.

Plaintiffs point out that “Parker Rust Proof had spent

thousands of dollars and years of effort to arrive at the results

which Henricks had intuitively reached years beforehand.

The personnel at Parker Rust Proof had far more than or-

dinary skill in the art and yet the invention of the Henricks’

patent was not obvious.” Plaintiffs also note that Parker Rust

Proof is holding General Motors Corporation harmless as to

all phosphate coating materials and lubricating compositions

purchased from it.

5? Goodyear Tire &@ Rubber Co., Inc., el al. v. Ray-O-Vac Company,

$21 U.S. 275 (1944), affg. 136 F.2d 159 (7th Cir. 1943); similarly

William A. Murray Spring Co. v. Fort Pitt Bedding Co., 23 F.2d 559

(3rd Cir. 1928); Kurtz, et. al. v. Beel Hat Lining Co., Inc., 280 Fed. 277

(2nd Cir. 1922).

%° Ric-Wil Co. v. E.B. Kaiser Co., 179 F.2d 401 (7th Cir. 1950); Hoeltk<

v. C. M. Kemp Mfg. Co., 80 F.2d 912 (4th Cir. 1935).

2la

Defendants on the other hand, say patentee adopted an ob-

vious, analogous and previously known use for soap borax*

and that Parker Rust Proof Company must have had

knowledge of the soap borax dry film system. After much ex-

perimentation, they had the idea of using a soap and borax

dry film lubricant over phosphate, the “Bonderlube series.”

Defendants point out that the patent says nothing about in-

creasing the die life with soap-borax lubricants applied over

phosphate coatings. Furthermore, inventors are conclusively

presumed to know the prior art,** and that it took no inven-

tion to achieve the patented process but only ordinary skill,

with all the prior art and knowledge before him, to apply the

Gilron soap-borax lubricants to phosphate coated steel.

Defendants further maintain the presumption of validity of

an issued patent falls where the true state of the prior art was

not [388] considered by the Patent Office.**

Defendants dispute the history of “Bonderlube” as being

evidence of the unobviousness of the alleged patented inven-

tion, and on the contrary assert it demonstrates the invalidity

of Claim 4. They cite the pamphlets “Bonderite as an Aid in

Cold Forming” and “Bonderite and Bonderlube as Aids in

Cold Forming,” of Parker Rust Proof Company, stating the

Bonderite coating (a phosphate coating) integral with the

** Similarly to the patentee’s position in Armour @ Co. v. Wilson & Co.,

Inc., 274 F. 2d 143 (7th Cir. 1960).

** Zephyr American Corporation v. Bates Mfg. Co., et al., 128 F. 24 380

(3rd Cir. 1942); Adams, et al. v. Galion Iron Works & Mfg. Co., 42 F. 2d

395 (6th Cir. 1930); Allied Wheel Products, Inc. v. Rude, 206 F. 2d 752

(6th Cir. 1953); Application of Thayer, 143 F. 2d 996 (C.C.P.A. 1944);

Applications oj Adams and Free, 284 F. 2d 525 (C.C.P.A. 1960);

General Time Corp. v. Hansen Mfg. Co., 199 F. 2d 259 (7th Cir. 1952).

** Moran, et al. v. Protective Equipment, Inc., et al., 84 F. 2d 927 (7th

Cir. 1936); Hobbs v. Wisconsin Power & Light Company, 250 F. 2d 100

(7th Cir. 1957).

22a

metal surface reacts with the lubricating solution (Bonder-

lube) to form a water-insoluble soap which in itself becomes

an integral part of the Bonderite coating. The 1942 publica-

tion, Metallwirtschaft, stated similarly. Their expert, Dr.

Gibson, stated Bonderlube 235 was derived from the German

practice, described in the 1942 publication, Mettallwirt-

schaft, of providing a water insoluble soap film on the

phosphate coating to serve as the lubricant, by long soaking.

Parker Rust Proof Company developed a similar coating

more speedily by including a small amount of borax, approx-

imately three percent of the soap, to control the pH (the acidi-

ty or alkalinity), thereby obtaining the formation of the water

insoluble soap (zinc stearate) as an integral part of the

phosphate coating, in a few minutes. Defendants contend the

small amount of borax provides its long-known buffering

function, which controls and maintains the aqueous soap

solution within the narrow range of alkalinity that enables the

water insoluble soap (zinc stearate) to form quickly on and

with the zinc of the phos- [389] phate coating. They maintain

that this is a use for borax which is neither suggested nor con-

templated by the patent in suit, which rather contemplates

the use of a large amount of borax to act as a meltable pig- ~

ment to provide a glass-like lubricant.

Defendants state that Henricks, in his testimony, resorted

to guessing and speculation respecting the amount of borax

required for the Claim 4 process when soap borax lubricants

are used over phosphate coatings, requiring an amount of

borax sufficient to prevent formation of water insoluble soap;

he was quoting the general cosmetic formulary of 1-5%,

which amount is sufficient to prevent the insoluble soap, such

as zinc stearate, from forming, but if it does form, the borax

emulsifies it, cleansing it. His claimed invention was to pre-

vent the formation of the water insoluble soap film, not for

the contrary purpose of providing the insoluble soap film in-

23a

tegral with the phosphate coating as the principal and chief

lubricating agent. In Bonderlube 235, the small amount of

borax, approximately three percent, the defendants cite as

providing a buffer in the aqueous soap solution for the pur-

pose of controlling the alkalinity of that solution within the

range that promotes the forming of the water insoluble soap,

zinc stearate, as an integral part of the phosphate coating,

which is not disclosed by the patent, and contrary to Henricks’

testimony. Bonderlube 235, developed prior to 1951, was

prior to the issuance of either the original patent in 1952, or

the reissue in 1955, making it further clear that the history of

Bonderlube 235 does not afford proof that the patent achiev-

ed the unobvious.

The Court has no doubt whatsoever that Henricks’ test-

imony respecting the amount of borax required in the [390]

patented process was pure speculation and guesswork, finding

no accurate foundation in the specifications or disclosures of

the claim of the patent, but made with the desperate hope of

saving an extremely broad claim.

The Court concludes that Claim 4 of the Reissue Patent

No. 24,017 is invalid for several reasons. The all-encompas-

sing breadth of the claim with a lack of specificity of propor-

tions, coupled with the informative state of the prior art, both

patented and published, as well as the prior public uses of

which patentee was cognizant, impel a holding that patentee’s

stride forward in the art was not sufficient to merit a patent

monopoly. Were it only for the breadth of the claim's scope,

the Court might be hesitant, in view of Binks Mfg. Co. v.

Ransburg Electro-Coating Corp., 281 F. 2d 252 (1960) (Cer.

Gr. 364 U.S. 926, Dismissed per curiam, 366 U.S. 211), to

hold Claim 4 invalid. This Circuit's Court of Appeals (Judge

Castle writing the opinion) there said at p. 257:

“There is no requirement that quantitative values

for such factors as voltage, spacing and liquid

24a

characteristics be recited. The fact that experimen-

tation or the exercise of judgment is necessary to

adapt a patented process to particular material or

to obtain the particular results desired does not im-

pair validity of the patent. Lever Bros. Co. v. Proc-

ter 8 Gamble Mfg. Co., 4 Cir., 139 F. 2d 633-639.”

But when that broad scope of the patent claim is con-

sidered in conjunction with the prior use at Briggs Body Com-

pany’s plant, which prior use was participated in by patentee

and so part of his awareness; and in conjunction with the

disclosures of the Singer and Orozco patents (with the latter of

whom Henricks was in one patent a co-patentee), the British

patents, and the German publications, it appears to the Court

that patentee is seeking unjustifiably to grasp for his own

patented monopoly [391] that which was apparent or know-

ledgeable under the existing state of the art. The claim does

not specify the kind of phosphate coating, the kind of

meltable organic binding, and the kind of solid inorganic

compound to be utilized, as well as not specifying the amounts

and relative proportions of any such items. As defendants’

proof showed, some processes could be conceived of ingre-

dients of those classes which would not be workable. Several

prior patents, some very old, and some cited publications,

disclose borax as a lubricant. The fillers, such as borax, were

said to be unctuous in their nature or slippery to touch. The

prior patents also teach that phosphate coatings on metal are

an aid in drawing, and, additionally, teach the lubrication of

the coatings. Prior patents teach the use of soap for drawing

metals. British and United States’ patents teach the use of a

dry film, the former with an organic binder with inorganic

pigment. A prior publication taught that the addition of a

filler such as borax could add to the film strength of a drawing

lubricant, including soap. A British patent discloses that wear

on tools is reduced by adding a pulverulent substance such as

talc or litharge to the fat or oil lubricant. Talc is a pigment

25a

which is the softest material on Mohs’ scale, having a rating of

one. Litharge is mentioned in the patent in suit as one of the

meltable or fusible pigments. Borax was known prior to the

time of the patent, as a buffer, and its specific pH values are

indicated in chemical reference and handbooks. A British

patent disclosed that it had been customary to use oils or fats

and to mix them with certain substances such as talc or

litharge for the purpose of increasing their efficiency; tallow is

in the classification of such fats and [392] it is one of the oldest

so known, and it was noted it solidifies at room temperature.

There can be no question that there can be patentable in-

vention in the combination of known elements which effect an

unexpected and useful result. Thus it was recently said in

Minneapolis-Honeywell Regulator Company v. Midwestern

Instruments, Inc., decided November 29, 1961, by the

Seventh Circuit Court of Appeals (Judge Duffy):

“This Court has often applied the well-

established rule of law that a novel combination of

elements, whether all new, or all old, or partly new

and partly old, which so cooperate as to produce a

new and useful result or a substantial increase ‘n ef-

ficiency, is patentable.”

The result of the aggregation in the instant cause, however,

does not to this Court give rise to the degree of novelty or un-

foreseeable result that was to be found in that case, although

the feature of utility might possible be present. Both

phosphate coating and the use of borax or its equivalent, and

the use of soap were individually known in the drawing of

metals. Their combined use is indicated to give even greater

efficiency and ease in performing the same drawing opera-

tions they were theretofore used separately to perform (and in

the prior public uses, used conjointly to perform).

26a

The Court therefore holds Claim 4 of the Reissue Patent

No. 24,017 invalid.

/s/ Edwin A. Robson,

Judge.

February 1, 1962.

[396] IN THE DISTRICT COURT

OF THE UNITED STATES.

* * (Captions — 56-C-1912 — 57-C-892) * *

FINDINGS OF FACT AND CONCLUSIONS OF LAW

[397] 1. (a) The above entitled suits were brought by

plaintiffs for alleged infringement of United States patent Re.

24,017, dated June 7, 1955, for Method of Coating and Draw-

ing Metal and Composition Therefor.

(b) By order of the Court dated November 19, 1959, the

above entitled suits have been consolidated for trial upon the

issue of the validity of claim 4 of the patent in suit, which is the

only claiu of the patent alleged in either suit to be infringed.

ventor, John A. Henricks, on an application filed and pro-

secuted by William Freeman, a patent attorney of Akron,

Ohio. The patent was later assigned to the present plaintiff,

Devex Corporation, of which the inventor Henricks is presi-

dent, and then assigned by Devex Corporation to the plain-

tiffs, McCoy and TeGrotenhuis, the patent attorneys for

Henricks and Devex Corporation, by conditional assignment

subject to certain reversionary rights in Devex Corporation,

for the purpose of enforcing the patent. This assignment was

made after Henricks had tried personally to license the patent

in the industry to no avail (R. 514).

27a

[398] 2. (a) The patent in suit Re. 24,017 including claim

4 in issue is the outcome of an application, Serial 665,905,

filed April 29, 1946, by the applicant and patentee, Henricks,

for Metal Treatment and Composition for Same, which was

abandoned in favor of a continuation-in-part application

filed October 31, 1950, upon which later issued United States

patent 2,588,234 dated March 4, 1952, and for which appli-

cation for reissue was filed March 1, 1954, resulting in patent

Re. 24,017 dated June 7, 1955, now in suit.

(b) The patent in suit is directed to lubrication of metal

surfaces in cold drawing and deforming metal such as steel to

desired form and shape by means of dies, representing the

size, form and shape to be produced in the metal being

worked. The use of lubricant between the contacting surfaces

of the die and the metal being worked is necessary to reduce

friction and prevent intimate contact between the die and the

surface of the metal being worked to avoid scoring and tear-

ing of the metal or galling of the dies, and prevent develop-

ment by friction of sufficient neat at the place of contact or

engagement to cause welding and seizure to occur between

the die and the work.

materials for lubricating the dies and the work have long been

known and used.

[399] 3. The particular alleged improvement in issue in

these cases which the patent defines in claim 4 in issue, is as

follows:

“The process of working ferrous metal which com-

prises forming on the surface of the metal a

phosphate coating and superimposing thereon a

fixed film of a composition comprising a solid melt-

able organic binding material containing distrib-

uted therethrough a solid inorganic compound melt-

28a

able at a temperature below the melting point of the

ferrous metal phosphate of said coating and having

a hardness not exceeding 5 on the Mohs’ hardness

scale, and thereafter deforming the metal.”

[400] 4. The particular practice at issue in this suit which

claim 4 is contended to represent and cover is the practice of

providing a zinc phosphate coating on the surface of the steel

to be deformed; applying to that phosphate coating an

aquecus solution or emulsion of sodium tallow soap and

borax; drying or allowing to dry on the phosphate coating the

sodium tallow soap containing borax until it forms a fixed

film, and thereafter drawing or deforming the steel.

It is alleged with respect to this practice that the sodium

tallow soap provides the solid meltable organic material of the

claim for binding in place the borax, which is alleged to be

the solid inorganic compound of the claim meltable at a

temperature below the melting point of the ferrous metal

phosphate of the phosphate coating and having a hardness

not exceeding 5 on Mohs’ hardness scale.

Mohs’ hardness scale is a known standard for indicating the

relative hardness of materials. It is used in the claim as a

specification that the “solid inorganic compound” of the

claim shall not be hard enough to scratch the steel being

drawn.

[401] 5. Processes and methods of drawing and deforming

metal and lubricating compounds for use therein, shown by

the prior art in evidence to have Yeen known prior to the pat-

ent in suit, are as follows:

(a) Salts such as sodium borate or sodium meta phosphate

applied to the drawing dies where the wire to be drawn enters

the die so that during the drawing operation on the wire

heated to fairly high temperature, the sodium borate or

sodium meta phosphate melts to a viscous state and lubricates

29a

the die aperture and the wire, or by leading the tungsten wire

to be drawn through a bath of said substances, or by dusting

the wire with said substances in the form of a powder so that in

the subsequent heating of the wire the adhering substances

are softened and are conducted together with the wire toward

the die (Defendant's Exhibit 35, British Patent 11,439 of 1912

for Process of Hot Drawing Tungsten Wire).

The sodium borate and sodium meta phosphate are in-

organic compounds meltable at a temperature below the

melting point of ferrous metal phosphate and having a hard-

ness not exceeding 5 on Mohs’ hardness scale, as specified in

claim 4 of the patent in suit.

(b) Water soluble soap compounds made by saponifying

vegetable oils such as coconut oil, olive oil and palm oil, ap-

plied to the surface of the steel (sheet metal) at a temperature

of 150° F. and allowed to dry out to form [402] a coating

which will adhere to the metal during shaping or forming.

The same or similar compound is used to lubricate the dies

when the metal is being pressed to the desired shape (Defen-

dant’s Exhibit 36, Hopkins United States patent 1,769,577 of

July 1, 1930). This soap is within the category of solid

meltable organic material described in claim 4.

ture of wires and tubing, a lubricant coating for the metal

consisting of aluminum powder and nitro-cellulose suspended

in a volatile liquid such as amy] acetate is applied to the sur-

face of the metal to be drawn and dried thereon by evapo-

rating the volatile solvent amyl acetate so that a fixed film or

coating of nitro-cellulose containing the aluminum powder

distributed therethrough is provided on the metal to serve as a

lubricant during the drawing operation (Defendant's Exhibit

37, British Patent 367,198 of 1932).

In this coating the nitro-cellulose constitutes the solid

meltable organic binding material containing distributed

30a

therethrough the aluminum powder which is an element and

provides an inorganic pigment meltable at a temperature

below the melting point of ferrous metal and having a hard-

ness not exceeding 5 wn Mohs’ hardness scale, within the

specifications for melting temperature and hardness required

by the patent in suit (Gibson R. 595-599).

(d) Tallow in its raw state, or combined in the form of soap

with certain metals, such as calcium, sodium, potassium,

lead, aluminum and zinc, with mineral oil and containing

filler materials or pigments like chalk, soap- [403] stone,

mica, rosin, graphite, fireclay, potters clay, borax, etc., were

published as known drawing compounds (Defendant's Ex-

hibit 38, Transactions of American Society for Steel Treating,

Volume XXI, January 1933 — December 1933, p. 187, para-

graph 1 — Tallow; p. 188, paragraph 4 — Fillers).

Tallow or tallow soap with the filler material borax is

within the definition of claim 4 specifying a solid meltable or-

ganic binding material containing distributed therethrough a

sclid inorganic compound meltable at a temperature below

the melting point of ferrous metal and having a hardness not

exceeding 5 on Mohs’ hardness scale.

(e) Tallow or palm oil soap alone or combined with

aluminum stearate were published as known drawing com-

pounds for drawing wire, are meltable at a temperature

below the melting point of ferrous metal and have a hardness

not exceeding 5 on Mohs’ hardness scale, within ihe definition

of the corresponding language employed in claim 4 of the pat-

ent in suit (Gibson R. 665-669) (Defendant's Exhibit 54,

publication Wire & Wire Products, issue of October 1931,

pp. 393 and 394).

The tallow and palm oil soaps disclosed are within the

definition of solid organic binding material in claim 4 of the

patent in suit, and the aluminum stearate when combined

$la

therewith would constitute a fusible pigment (patent in suit,

column 9, Table 1 — Fusible Pigments) distributed there-

through.

[404] (f) In deforming steel by cold rolling, it was known to

provide a lubricant between the rolling die and the steel being

rolled and deformed to the desired shape, to prevent over-

heating of the dies, sticking of the metal and the dies, and

scarfing or roughening of the surfaces of the metal. The

material was made by preparing a dry mixture comprising

90% borax, 5% tri-sodium phosphate and 5% tallow soap

dissolved in water in the proportion of 8 ounces of the dry

mixture to each gallon of the solution, and applied either on

the rolls or the metal stock or both, before or during the form-

ing operation, so that during the forming operation the sur-

faces are sufficiently coated. This material was used in place

of oils and greases and aqueous emulsions of oils and greases

which are expensive and difficult to remove from the work

after forming (Defendant's Exhibit 32, Orozco United States

patent 1,982,065 dated November 27, 1934).

This material comprising borax and soap is substantially

identical with the soap and borax materials disclosed in the

patent in suit for use as a fixed film lubricant over phosphate

coatings.

(g) Drawing lubricants made up to fat, such as tallow or

palm oil, 75-85% saponified to provide soap, combined in the

proportion of 20-35 parts by weight with mineral oil 30-50

parts by weight, and water 10-40 parts by weight, mixed to

make up a paste having a consistency ranging from mayon-

naise to heavy greases with which filler materials may be

mixed to prevent metal-to-metal contact under [405] high

pressures cncountered in forging, stamping, drawing and the

like, are disclosed in Defendant’s Exhibit 45, Zimmer United

States patent 2,258,309 dated October 7, 1941, column 1,

lines 44-55, column 2, lines 1-17.

$2a

It is recommended (column 1, lines 8-44) that in place of

filler materials of the type of talc, chalk, calcium carbonate

and the like, filler materials such as salts of the phosphates,

sulfides and borates of calcium, zinc, lead or tin be used to en-

dow the lubricating compound with the ability to withstand

higher pressures without metal failure, seizure or scoring and

to reduce friction, facilitate the flow of metal into the die re-

cesses and reduce the power requirements for the fabricating

operations; and also to give the work an attractive burnished

appearance which is not obtained by the well-known inert

fillers, and reduce the frequency of splits, cracks or other

blemishes in the drawings, forgings or stampings.

The saponified tallow disclosed in this patent is an organic

binding material (namely, soap) corresponding to the organic

binding material referred to in claim 4 of the patent in suit,

and the fillers disclosed to be mixed in and used with it (name-

ly, the zinc phosphate and the borates of calcium, zinc and

lead) are solid inorganic compounds meltable at a tempera-

ture below the melting point of ferrous metal and having a

hardness not exceeding 5 on Mohs’ hardness scale, referred to

in claim 4 of the patent in suit, and listed as such in the patent

in suit in Table I — Fusible Pigments, column 9.

[406] 6. (a) It was well known in the art prior to the patent

in suit on April 29, 1946, that it was a definite improvement

and aid in cold drawing and deforming steel to provide the

surface of the steel with integral phosphate coatings and apply

lubricants over such coatings.

(b) The use of zinc phosphate coatings to which oil is ap-

plied as a lubricant in drawing and deforming steel tubes is

disclosed in Defendant’s Exhibit 42, British patent 496,866 of

1938.

manganese phosphate coatings impregnated with oil or fat or

33a

a mixture of oil and fat as a lubricant is disclosed in Defen-

dant’s Exhibit 41, British patent 494,830 of 1938.

With respect to lubricants that had been known for use in

drawing operations, this patent also discloses (column 1, lines

14-22):

“It is known to treat iron pipes, in particular, prior

to a drawing process, with fats or oils, or to precipi-

tate deposits thereon, in order to soften the surface

and to reduce the wear on the drawing tools. It has

also been the practice to mix the oil or fat with pul-

verulent substances, such as talc or litharge, for the

purpose of increasing its efficiency.”

The fats disclosed in this patent include fats such as tallows,

of which many are known to be solid at room temperature,

and the litharge (lead oxide), which the patent states it had

been the practice to mix with the oil or fat for the purpose of

increasing its efficiency. There is thus disclosed a composition

providing a solid meltable organic binding material (namely,

fats known to be solid at [407] room temperature) containing

distributed therethrough a solid inorganic compound (name-

ly, the litharge) meltable at a temperature below the mel::ing

point of ferrous metal and having a hardness not exceediag 5

on Mohs’ hardness scale, all within the definition of the cor-

responding language employed in claim 4 of the patent in

suit. Lead oxide (litharge) is specifically listed in the patent in

suit, column 9, Table I, under fusible pigments suitable for

use as a solid inorganic compound meltable at a temperature

below the melting point of ferrous metal phosphate and hav-

ing a hardness not exceeding 5 on Mohs’ hardness scale, called

for by the corresponding language in claim 4 of the patent in

suit (Gibson R. 617-623).

The British patent 494,830 therefore contains disclosure of

a lubricating composition for drawing and deforming ferrous

34a

metal within the broad terminology employed in claim 4 of

the patent in suit.

(d) Defendant's Exhibit 39, United States patent 2,105,015

to Singer, dated January 11, 1938, particularly discloses and

recommends the use of phosphate coatings on the steel to be

drawn lubricated with known methods of lubrication as a

definite improvement and aid in drawing and deforming fer-

rous metal such as steel. It states, column 2, lines 53-55; page

2, column 1, lines 1-14:

“Satisfactory processes for applying such coatings

are well known in the art, such for example as the

so- (page 2, column 1, lines 1-14) called Parkerizing

process. They comprise trez.ment of the article with

a heated dilute aqueous solution of phosphoric or

oxalic acid which may or may not contain phos-

phates {408} or oxalates of iron, manganese, zinc or

other metals in solution. Thereby there is formed on

the article a dense thin crystalline coherent and

tightly adherent coating of salts of phosphoric or

oxalic acid which combines both chemically and

physically with the metal of the base. Such a coating

adapts the article admirably to mechanically work-

ing and reduces or eliminates the troubles arising

from the contact of the article with the working

element.”

It also states, page 1, column 2, lines 22-33:

“Although the coating thus formed may properly be

considered a lubricant, as contrasted with a coating

applied for some other purpose, as for example, in-

creasing the rust or corrosion resisting properties of

the metal, it should be fully understood that it is not

a lubricant in the customary or ordinary sense, for

the reason that the well known, present day

35a

methods of lubrication may also be used in conjunc-

tion with the practice of the present process, and in

many instances will be an essential factor in obtain-

ing proper results.”

The patent also states, page 2, column 1, line 51, and column

2, lines 1 et seq.:

“The use of coatings of the kind herein described

(column 2, lines 1 et seq.) permits what might be

termed deep, severe or even almost excessive reduc-

tion rates, as well as a series of normal reductions

without the customary intermediate annealing

operations.

“In the practice of the invention at least those sur-

faces of the article which are to be in contact with

the working element are provided with a coating of

the type described, and the article is then worked in

the customary manner, no change in procedure or

tools being necessary. Such coatings are considera-

bly cheaper than the coatings of soft metals

heretofore applied, and if not already removed dur-

ing the working operation they can be removed

completely much more readily than the metallic

coatings, as for [409] example, by simple pickling

operations. In many instances no further removal of

the coating is necessary after working, either

because it has been substantially removed during

the working operation or that portion which re-

mains does not interfere with the use to which the

article is subsequently applied.”

(e) The efficacy of lubricated phosphate coatings as a

definite improvement and aid in drawing and deforming steel

is further evidenced and made known in the prior art.

36a

Defendant's Exhibit 51, the publication Korrosion Und

Metallschutz of June 1941, and translation, discloses the use

of zinc phosphate coatings (pp. 3-4) lubricated with boring oil

emulsions (p. 4) as lengthening the life of the drawing tools,

reducing friction in the forming process, increasing the

reduction and drawing speeds, and reducing the number of

drawing operations (p. 7).

Defendant's Exhibit 52, the publication Metallwirtschaft of

1942, and translation, discloses (p. 11) improvements in

drawing and deforming operations on iron and steel coated

with zinc phosphate coatings which are lubricated by having

formed thereon water insoluble soap films.

This is also disclosed in Defendant's Exhibit 53, the

publication Stahl Und Eisen of 1942, and translation (p. 7).

[410] 7. Lubricated zinc phosphate coatings on steel were

known and used as a successful aid in drawing and deforming

steel cartridge cases in this country in 1942 and 1943. An

operation of this kind was carried on by the Buick Motor Divi-

sion of General Motors Corporation in 1942 and 1943 and was

described and published in Defendant's Exhibit 48, American

Machinist issue of May 13, 1943 (Shultz R. 644-650).

A similar operation was carried on in drawing and deform-

ing steel to make steel cartridge cases by Briggs Manufactur-

ing Company at Detroit, Michigan, in 1943, where zinc

phosphate coating was applied to the steel to be drawn and a

grease was applied as a lubricant over the zinc phosphate

coating (Tousley Deposition, pp. 31-32; Henricks Deposition,

pp. 22-23).

Northern Engraving & Manufacturing Company of La

Crosse, Wisconsin, in 1943 manufactured 20-mm. steel car-

tridge casés or shells by drawing and deforming zinc

phosphate coated steel over which was applied a lubricant

made up of sodium stearate, stearic acid and water with

37a

sulfur distributed therethrough (Depositions of Wayne G.

Dickinson and Lew F. Scott). As received, the lubricant

material was semiliquid, not liquid enough to pour. It was ap-

plied hot. It did not become a hard solid after drying, but

formed a waxy type of film on the phosphate coating which

was plastic and easily movable with the finger (Depositions of

Wayne G. Dickinson and Lew f. Scott, pp. 19-20, 24-25, 27,

37, 54, 59-60).

[411] 8. In 1942 and 1943 the Gilron Products Company of

Cleveland, Ohio, with whom the patentee of the patent in

suit, Henricks, was associated, first as consultant in 1942 and

then as an employee from 1943 to 1945, manufactured and

marketed lubricant compositions under the trade name

Drawcote, for use in drawing and deforming steel, and which

were extensively sold and used in 1942 and 1943 and subse-

quently, in drawing and deforming steel.

These lubricant compusitions consisted principally of

sodium soaps formed from tallow and palm oil, and of borax.

The soap comprised from 10-33% by weight and the borax

comprised from 67-90% by weight, of the compositions.

This material was produced in the form of a dry powder

based upon and derived from the knowledge and previous ex-

perience of Gilbert H. Orozco, who with one Roland

Whitbeck comprised the partnership under the name of

Gilron Products Company, which was later incorporated

under the same name as an Ohio corporation.

Gilbert H. Orozco is the patentee of United States patent

1,982,065 dated November 27, 1934, Defendant's Exhibit 32,

which discloses the use of a dry mixture comprising borax

90%, trisodium phosphate 5% and tallow soap 5%, applied

in aqueous solution in the operation of deforming steel by

cold rolling to provide a lubricant coating between the rolling

die and the surface of the metal being rolled and deformed to

38a

prevent overheating of the dies and consequent sticking of the

material being rolled and the [412] dies, and to prevent scar f-

ing or roughening of the surface of the metal Leing worked

upon.

The compositions that were manufactured and sold by

Gilron Products Company in 1942 and 1943 and subsequently

under the trade name Drawcote were in the form of dry

powder composed principally of sodium soap and borax in

the proportions by weight of 10-33% soap to 67-90% borax.

This dry powder was applied by the user in drawing metal

by making a heated emulsion or solution of the soap-borax

powder in water, applying it hot to the surface of the metal to

be drawn, and either drying or allowing it to dry as a fixed

film on the surface of the metal by evaporation of the water

therefrom.

Drawcote was extensively sold and successfully used in 1942

and 1943 in the cold drawing and deforming of steel, and

especially in the cold drawing and deforming of steel in the

manufacture of steel cartridge cases (Henricks R. 338-363).

[413] 9. Prior to filing the first application for the patent in

suit on April 29, 1946, and while still employed by Gilron Pro-

ducts Company, the patentee of the patent here in suit,

Henricks, jointly with Gilbert H. Orozco of Gilron Products

Company, filed application for United States patent on

August 2, 1943, Serial 497,117, which resulted in the grant of

United States patent 2,469,473 on May 10, 1949 (Defendant's

Exhibit 1) and in the grant upon a division of the same ap-

plication of United States patent 2,530,837 dated November

21, 1950 (Defendant's Exhibit 2). These applications and

patents were assigned to Gilron Products Company.

These applications and the patents disclose and claim as in-

vention both the use of soap-borax lubricants in drawing

steel, and soap-borax lubricant as a composition, which were

39a

being sold by Gilron Products Company in 1943 under the

trade name Drawcote and used extensively by the public in

the year 1943 and subsequently in drawing and deforming

ferrous metal. As the subject matter of invention it was

claimed in these patents that the soap-borax lubricants pro-

vide what is termed stepwise lubrication in the process of

drawing and deforming ferrous metal. That is to say, the

soap-borax composition applied as a dry film to the surface of

the ferrous metal to be drawn and deformed provided lubri-

cating materials having different melting points so that in the

process of drawing, the soap of the composition, having the

lower melting point, would, by melting first under the

pressure and heat generated in the drawing operation, pro-

vide initial lubrication between the metal being drawn and

the drawing die, and when [414] temperatures were reached

in the drawing operation at which soap would cease to provide

lubrication, the borax, having the higher melting point,

would remain as a barrier preventing contact between the die

and the metal being worked and would eventually melt and

provide a fluid or plastic glasslike film of borax to continue to

provide a barrier between the die and the metal being worked

and a lubricant during the higher and ultimate temperatures

reached in the drawing operation.

The purpose, object and operation are identically de-

scribed in both patents, in patent 2,469,473 in column 3, lines

59-74, and in patent 2,530,837 in column 3, lines 40-55, as

follows:

“A specific object of the invention is to provide an

improved method of treating metals preparatory to

the cold drawing or forming thereof in order to in-

sure both stepwise cooling and stepwise lubrication

of the metal. That object is accomplished, for ex-

ample, by coating the surface of the metal to be

worked with a composition, the ingredients of

40a

which will act progressively and successively both as

coolants and as lubricants when the coat'ng is sub-

jected to the extreme pressures incident to drawing

or forming operations and temperatures approach-

ing the melting point of the worked metal or, in the

case of a non-metallic tool or die, the point at which

such working element might be damaged by work-

ing that particular metal.”

It is further stated in these patents, in patent 2,469,473 in col-

umn 9, lines 12-32, and in patent 2,530,837 in column 8, lines

71-75, and column 9, lines 1-16:

“Further to explain the operation of the process it

will be seen that by the incorporation of sodium

tetraborate (borax) with high titre soap we have a

naturally [415] slippery composition, the borax of

which melts at 75° C., gives up its water of

crystallization at 200° C. and intumesces at that

temperature to form an impalpable powder. The

powder so formed after intumescence could be con-

sidered analogous to a solid filler in known types of

lubricant; but said powder has, in addition, an im-

portant physical property. At 741° C. the intu-

mesced borax becomes fluid and thereby serves to

lubricate the metal being worked. Similarly the

higher secondary melting point glass forming

substances, following dehydration and intume-

scence, become fluid lubricants at respective in-

creased temperatures and those added ingredients

and the proportions thereof are selected so as to fill

in any gaps that may occur, that is to bridge over

from one temperature range to another.”

These patents also state, in patent 2,469,473, column 6,

lines 72-75, and column 7, lines 1-3, and in patent 2,530,837,

in colunn 6, lines 54-60, as follows:

4la

“We have noted particularly that when boric acid

or borax are used in the composition the hydrated

colloids remain on the worked metal as an amber

colored soluble substance which remains slippery to

the touch and has no appearance of having been

carbonized or polymerized and is readily removed

in H,O.”

These patents also attribute greatly increased die life to the

soap-borax lubricants where they state, in patent 2,469,473,

column 8, lines 71-75, column 9, lines 1-6, and in patent

2,530,837, in column 8, lines 55-65:

“As an instance of the efficiency of the present pro-

cess, finishing dies for drawing stainless steel wire

containing chromium, nickel and titanium and

formerly producing a maximum of twenty-five

pounds of wire, by the use of the present composi-

tion, were able to [416] produce from 180 to 250

pounds. We might mention that we produced with

the present process a 30% increase in die life in the

drawing of steel she!l casings where a copper

coating had previously been used in order to protect

the dies.”

[417] 10. Henricks, the patentee of the patent in suit Re.

24,017, in 1945 left the employ of the Gilron Products Com-

pany where he had participated in and was familiar (1) with

the sale of the soap-borax lubricants described in the patents

2,469,473 and 2,530,837 and (2) with the public use of those

lubricants in drawing and deforming steel in the year 1943

and subsequently, and (3) knew also in 1943 that lubricated

phosphate coatings were in public use in drawing and defor-

ming steel. On April 29, 1946, Henricks as sole inventor filed

the first of his applications which resulted in the patent in suit

Re. 24,017. This was two years and eight months after August

2, 1943, when he had joined as co-inventor with Gilbert Oroz-

42a

co in filing the application which resulted in patent 2,469,473

and 2,530,837, which were assigned to Gilron Products Com-

pany.

The patent in suit proposes the use of the self-same stepwise

lubrication (in column 8, lines 45-75, and column 9, lines

1-18) with the identical soap and borax lubricants which are

disclosed in the prior patents 2,469,473 and 2,530,837 Fhe—-——- -

patent in suit in column 15, lines 51-52, recommends the type

of lubricant disclosed in patent 2,469,473, and at line 66

recommends the type of lubrication disclosed in the Whitbeck

patent 2,470,062, both of which are admitted to have been

widely sold and in public use in 1943 (Henricks R. 357-358,

362-363, 376-377, 381-382).

The alleged improvement of the patents in suit is to apply

these Drawcote lubricants upon steel provided with known

iron or zinc phosphate coatings (patent in suit, column 8,

lines 55-75, column 9, lines 1-15, column 7, lines 40-45 and

55-75).

[418] 11. In answer to defendant's interrogatories 17-21

prior to trial respecting what plaintiffs’ contention would be

at the trial concerning chemical reaction or reactions (a) be-

tween the phosphate coating and the soap; (b) between the

phosphate coating and the borax; (c) between the phosphate

coating, the soap and the borax; (d) other than the reactions

identified in answer to (a), (b) and (c), plaintiffs stated in

their answer to interrogatory 21:

“The X-Ray diffraction tests indicate that certain

known compounds are formed. They also indicate

by peaks that certain other unknown or uniden-

tified compounds are formed. Plaintiffs will,

therefore, contend that chemical reactions do occur

but are unable to specifically describe them and will

not contend, at the trial of this cause, that any

specific chemical reactions occur.”

43a

[419] 12. Plaintiffs alleged at trial that compounds other

than zinc phosphate and the borax are formed by chemical

reaction of borax with soap and the zinc phosphate of the

phosphate coating, and are essential to the successful opera-

tion of the process described in claim 4 of the patent in suit.

The patent in suit does not describe any chemical reactions

in the drawing operations with soap-borax applied over

phosphate coatings which produce or require the production

of any other compounds to be essential to successful drawing

operations; claim 4 of the patent in suit contains no reference

to or requirement of the presence of such other compounds in

the operation of the process defined by the claim.

The other compounds alleged to be produced by a

chemical reaction of the borax in the coating and the

phosphate of the coating were not identified with certainty by

or in the X-ray diffraction patterns produced. Plaintiffs’ Ex-

hibits 22, 23, 24 and 25 (R. 191-210, 543-558).

It was admitted that no quantitative values or amounts of

the compounds alleged to have been formed by chemical

reaction of the borax and alieged to be present could be deter-

mined from the X-ray diffraction patterns (R. 243-245).

There is no evidence that the compounds alleged to have been

formed by chemical reaction of the borax and to have been

present in the samples tested were present in any significant

quantity or had any controlling or significant effect in the

drawing operations.

[420] 13. Henricks in his testimony at the trial (R. 416-421)

attempts to predicate the invention of the patent in suit upon

the borax in the soap-borax lubricant as mineralizing the

phosphate of the coating, likening it to mineralization and

metamorphosis in mineralogy by which coarse stone like

limestone under the heat and pressure becomes marble or a

carbonaceous deposit becomes graphite or a pyroxene rock

44a

becomes mica; that the conception of the patent was to make

this metamorphosis get rid of the highly abrasive phosphate;

that the metamorphosis and the mineralizing approach is

what he centered upon, to put in the lubricant film a flux

agent, so that it is no longer a hard, abrasive, sandpaper bed,

but one that will melt and flow into a glass, that that is inven-

tion he swore the oath to.

He admits that nothing of this alleged theory and teaching

is contained in the patent in suit Re. 24,017 (R. 447,

503-504).

It appears that there was no subject matter relating to al-

leged metamorphism, fluxing and mineralizing in Henrick’s

original application Serial 665,905, filed April 29, 1946

(Plaintiffs’ Exhibit 2); that such subject matter first appeared

in Henrick’s second application Serial 193,290, filed October

31, 1950 (Plaintiffs’ Exhibit 3), at pages 27-31 of that applica-

tion; and that all of this subject matter and the claims relating

thereto was cancelled out of the application by supplemental

amendment made October 25, 1951 (Plaintiffs’ Exhibit 3,

page 100) where page 27 of the application from line 10

through and including [421] line 23 of page 31 of the applica-

tion was cancelled.

At page 104 the claims of the application relating to the

alleged metamorphism, fluxing and mineralizing were

cancelled, and at pages 104-105 of Plaintiffs’ Exhibit 3, appli-

cant’s attorney stated (page 104):

“At the interview of September 17, applicant's at-

torney understood that the Examiner's position was

as follows: * * *”

and at page 105:

“5. Claims 13-20 relating to applicant's mineralizer

flux concept for lower melting eutectic mixtures was

a separate invention and should be divided out of

this application.”

45a

and at page 108:

“Applicant has also cancelled without prejudice

subject to a continuation-in-part application refer-

ences in the specification to his metamorphism and

mineralizer invention.”

Nothing appears in the application for the reissue patent in

suit Re. 24,017 (Defendant’s Exhibit 65) relating to or con-

cerning this alleged metamorphism, fluxing and minerali-

zing, and nothing appears in the patent in suit Re. 24,017

regarding it.

It thus appears that if the applicant Henricks made any in-

vention predicated or based upon alleged metamorphism,

fluxing and mineralizing, it has been removed and forms no

part of the alleged invention disclosed in the patent in suit or

claimed in claim 4 in issue here.

[422] 14. In the early part of 1943 the Briggs Manufactur-

ing Company in Detroit, Michigan, was manufacturing

75-mm. steel shell cases by drawing and deforming operations

using zinc phosphate coated steel with grease applied as a

lubricant over the zinc phosphate coatings.

About June 1943, Whitbeck of Gilron Products Company

sold the Gilron Products soap-borax Drawcote lubricant to

the Briggs Manufacturing Company for use in drawing and

deforming the steel shell cases.

Briggs Manufacturing Company used the soap-borax

Drawcote lubricants during the summer and fall of 1943 in

the production of steel shell cases.

In the shell case drawing operations at Briggs Manufactur-

ing Company there were six drawing and deforming opera-

tions performed on each shell case to produce the final form.

Prior to each of four of these drawing operations a zinc

phosphate coating was applied to the shell case, and the shell

46a

cases were then lubricated at the drawing press by applying

grease to the phosphate coatings.

In using the Gilron Products soap-borax Drawcote

lubricants the Briggs Manufacturing Company began by ap-

plying the Drawcote lubricant upon the phosphate coatings,

in place of the grease previously used, prior to each of the four

drawing operations and found it to operate successfully.

During the course of the summer of 1943 the four opera-

tions of phosphate coating the steel shell cases before [423] ap-

plying the Drawcote lubricant were eliminated by gradually

reducing the number of phosphate coating operations

employed, until finally all four phusphate coating operations

on the steel shell cases had been eliminated and the Drawcote

lubricant was thereafter applied to the bare steel shell cases.

During this interval of gradually eliminating the phosphate

coatings and while the Drawcote lubricant was being used

over phosphate coatings, shell cases were being produced at

the rate of 5 or 6 thousand cases per day.

The phosphate coating operations were eliminated for the

purpose of speeding up the production of the shell cases and

reducing cost of the drawing operations, and not because the

steel shell cases were not being successfully drawn with the

phosphate coatings and with the soap-borax Drawcote

lubricants applied to the phosphate coatings (Francis M.

Tousley deposition; Harold F. Brown deposition).

[424] 15. Claim 4 of the patent in suit describes and claims

no more than was known and successfully demonstrated and

used by the Briggs Manufacturing Company in 1943 in using

the Drawcote soap and borax lubricants, namely, the process

of working ferrous metal (the steel being made into shell cases

by drawing and- deforming at Briggs Manufacturing Com-

pany in 1943) which comprises forming on the surface of the

metal a phosphate coating (the zinc phosphate coating ap-

47a

plied on the surface of the steel being made into shell cases by

Briggs Manufacturing Company in 1943) and superimposing

thereon a solid meltable organic binding material (the Gilron

Products Drawcote lubricant which contained sodium tallow

soap) containing distributed therethrough a solid inorganic

compound (the borax contained in the Drawcote lubricant

applied to the zinc phosphate coated steel shell cases at Briggs

Manufacturing Company in 1943) meltable at a temperature

below the melting point of the ferrous metal phosphate (and

also below the melting point of the zinc phosphate, which is

below the melting point of ferrous phosphate, patent in suit,

column 9, Table I) of said coating and having a hardness not

exceeding 5 on Mohs’ hardness scale, and thereafter deform-

ing the metal.

[425] 16. The date of invention relied upon by Henricks

and plaintiffs for claim 4 of the patent in suit in issue is April

29, 1946, the date of the filing of the first application Serial

665,905 by the applicant and patentee Henricks, plaintiffs’

answer to defendant General Motors’ interrogatory 13, as

follows:

(Defendant's Interrogatory 13):

“State the date upon which plaintiffs will rely at

the trial of this cause for the making of the alleged

invention described in claim 4 of the United States

Letters Patent Reissue No. 24,017, dated June 7,

1955, by the applicant for said patent, John A.

Henricks.”

(Plaintiffs’ Answer to Interrogatory 13):

“Assuming that no additional prior art or prior

uses will be cited against Reissue Patent 24,017,

plaintiffs will rely upon April 29, 1946 as the date

upon which the invention of Patent 24,017 was

made.”

48a

[426] 17. The plaintiffs and Henricks admit that at Briggs

Manufacturing Company in Detroit, Michigan, in 1943, in

the manufacture of 75-mm. steel cartridge cases by drawing

and deforming steel, the Gilron Products soap and borax

lubricant Drawcote was used over phosphate coated steel, and

do not deny that such use occurred before the invention of

claim 4 of the patent in suit Reissue 24,017 by the applicant

Henricks (Defendant's Interrogatory 8; Plaintiffs’ Answer to

Interrogatory 8; Defendant's Interrogatory 11; Plaintiffs’

Answer to Interrogatory 11):

(Defendant's Interrogatory 8):

“Do plaintiffs deny that in the year 1943 Briggs

Manufacturing Company at Detroit, Michigan,

manufactured steel cartridge cases for the United

States Government by drawing and deforming the

steel material into the form of 75-mm. cartridge

cases; that in the said manufacturing operations the

surface of the steel material, prior to being drawn

and deformed, was provided with a phosphate

coating, and that there was superimposed on said

phosphate coating a lubricant composition com-

prising by weight: soap 15%, borax 40%, boric acid

20%, potassium carbonate 25%, which formed a

fixed film on said phosphate coating comprising a

solid meltable organic binding material (namely,

soap) containing distributed therethrough a solid

inorganic compound (namely, borax) meltable at a

temperature below the melting point of the ferrous

metal phosphate of said coating and having a hard-

ness not exceeding 5 on Mohs’ hardness scale, and

that the said coated steel material wes drawn and

deformed to produce 75-mm shell cases?”

49a

(Plaintiffs’ Answer to Interrogatory 8):

“Plaintiffs admit that, at Briggs Manufacturing

Company at Detroit, Michigan, in 1943 in the

manu- [427] facture of 75 mm. cartridge cases,

there was a casual fortuitous use of a soap and borax

lubricant over a phosphate coating in connection

with the manufacture of a small number of car-

tridge cases. No one at Briggs Manufacturing Com-

pany or anywhere else learned anything from this

activity. Plaintiffs deny anything beyond ‘his point

and specifically deny that this activity constituted a

prior public use within the meaning of 35 U.S.C.

102 (b).”

(Defendant's Interrogatory 11):

“Do plaintiffs deny that the operations at Briggs

Manufacturing Company in the year 1943, stated in

interrogatory 8 above, occurred before the alleged

invention described in claim 4 of the United States

Letters Patent Reissue No. 24,017, dated June 7,

1955, by the applicant for said patent, John A.

Henricks?”

(Plaintiffs’ Answer to Interrogatory 11):

“No.”

[428] 18. The evidence shows that Whitbeck of Gilron

Products Company and the applicant for the patent in suit in

demonstrating the utility of the Gilron Products soap-borax

Drawcote lubricants and in promoting use over bare steel

without undercoatings, followed a procedure of first

demonstrating that such lubricants would operate successful-

ly when applied to the undercoatings, such as copper under-

coatings and phosphate undercoatings (Henricks deposition

prior to trial, pp. 18, 19, 21, 22, 23; testimony at trial, R.

387-390).

50a

[429] 19. The evidence further shows that in 1943 and dur-

ing the time of the employment there of Henricks, the appli-

cant for the patent in suit, Gilron Products Company regarded

it to be to its financial interest and benefit in promoting the

sale and use of the soap-borax Drawcote lubricants to also

promote and advocate the elimination of the use therewith of

phosphate undercoatings, which were then known to be in use

with other lubricants applied thereto in drawing and deform-

ing steel (Henricks deposition prior to trial, pp. 45 and 48).

[430] 20. The evidence of record establishes that the

Drawcote soap-borax lubricants were used successfully in

drawing the zinc phosphate coated steel shell cases at Briggs

Manufacturing Company in 1943. That the use was known to

the Briggs Manufacturing Company personnel and was

public and was known to and participated in by Whitbeck of

Gilron Products Company and by Henricks, the patentee of

the patent in suit, who was then in the employ of Gilron Prod-

ucts Company. That the use was in and during the normal

course of production of the steel shell cases and continued for

a substantial period. That the Briggs Manufacturing Com-

pany established successful use of the Drawcote soap-borax

lubricants when applied over the phosphate coatings in the

normal course of production of steel shell cases before it

established that the Drawcote soap-borax lubricants could be

used in production successfully without the phosphate

coatings.

[431] 21. The Northern Engraving & Manufacturing

Company of La Crosse, Wisconsin, from about the end of

1942 until past the middle of 1943, manufactured 20-mm.

steel cartridge cases or shells by drawing and deforming zinc

phosphate coated steel over which was applied a wax-like

lubricant made up of sodium stearate and stearic acid with

sulfur distributed therethrough, as described in Finding 7.

This production obtained a magnitude of approximately

5la

50,000 cartridge cases per day (Depositions of Wayne G.

Dickinson and Lew F. Scott).

Sulfur is one of the fusible pigments listed in the patent in

suit Re. 24,017, column 9, Table I — Fusible Pigments. The

patentee, Henricks, considers sulfur to be an inorganic pig-

ment within the terminology of claim 4 of the patent in suit

(Henricks, R. 513-514).

[432] 22. Of the prior art patents and publications

referred to heretofore in Findings 5 and 6, the Patent Office

had called to its attention and considered during the course of

the prosecution in the Patent Office of the various applica-

tions which resulted in the patent in suit and in the allowance

of claim 4 thereof in issue, the following:

The prior British patent 367,198 of 1932, Defendant's Ex-

hibit 37, which discloses the use in drawing and deforming

steel of a fixed lubricant film of nitro-cellulose with powdered

aluminum distributed therethrough;

The United States patent to Zimmer 2,258,309 of Octo-

ber 7, 1941, the Defendant's Exhibit 45, which discloses

lubricants for drawing and deforming steel composed of a

paste comprising soap, mineral oil and water, and that fillers,

such as zinc and calcium phosphate and the borates of

calcium, zinc and lead, may be used therein;

The British patent 496,866 of 1938, Defendant’s Exhibit

42, which discloses the use in drawing and deforming steel of a

zinc phosphate coating applied to the surface of the steel and

lubricated wich oil;

The Orozco and Henricks United States patent 2,469,473,

application filed August 2, 1943, patent granted May 10,

1949, Defendant's Exhibit 1, which discloses the use of soap-

borax lubricants referred to and recommended for use by the

patent in suit Re. 24,017, applied as fixed film on the surface

of steel, in drawing and deforming steel.

52a

[433] The Patent Office is not shown to have had called to

its attention or to have considered:

The Transactions of the American Society of Steel

Treating, Volume XXI, January 1933-December 1933,

Defendant's Exhibit 38, disclosing that lubricants composed

of tallow soap having mixed therewith filler materials, among

which borax is named, were known as lubricants for use in

drawing and deforming steel;

The publication Wire & Wire Products issue of October

1931, Defendant's Exhibit 54, disclosing that it was known to

use tallow or palm oil soap combined with aluminum stearate

as a drawing compound in drawing wire;

The British patent 494,830 of 1938, Defendant's Exhibit

41, disclosing that it was known in drawing and deforming

steel to coat the steel with manganese phosphate coatings and

to lubricate the phosphate coating with oil or fat, and disclos-

ing that it was also known to mix the oil or fat with litharge (a

lead oxide listed in the patent in suit Re. 24,017, column 9,

Table I, as a fusible pigment suitable for use in the lubricant

materials of the patent in suit) for the purpose of increasing

its efficiency;

The United States patent 2,105,015 to Singer, Defendant's

Exhibit 39, disclosing and recommending the use in drawing

and deforming steel of phosphate coatings, including zinc

phosphate, and recommending that the known methods of

lubrication be used therewith;

[434] The publication Korrosion und Metallschutz of June

1941, Defendant's Exhibit 51, disclosing that it was known

that the use of lubricated zinc phosphate coatings was a

definite aid and improvement in drawing and deformiing steel

as lengthening the life of the drawing tools, reducing friction

in the forming process, increasing the reduction and drawing

speeds, and reducing the number of drawing operations;

53a

The publication Metallwirtschaft of 1942, Defendant's Ex-

hibit 52, disclosing improvements in drawing and deforming

on iron and steel coated with zinc phosphate coatings

lubricated by having water insoluble soap films formed

thereon.

It is not shown to have been known to the Patent Office that

the process of drawing and deforming steel coated with a zinc

phosphate coating with the soap and borax Drawcote

lubricants applied thereto was known and used successfully in

1943 by the Briggs Manufacturing Company.

It is not shown to have been known to the Patent Office that

the process of drawing and deforming steel provided with a

zinc phosphate coating and having applied thereto a waxlike

film of sodium stearate and stearic acid with sulfur

distributed therethrough was known and used successfully in

1942-48 by the Northern Engraving & Manufacturing Com-

pany of La Crosse, Wisconsin.

[435] 23. The function of a phosphate coating in drawing

operations is to form on the metal surface a dense, thin,

crystalline, coherent and tightly adhering coating of salts of

phosphoric acid which will provide barrier material to

separate the drawing die from the metal being worked and

prevent scoring and galling engagement between the die and

the metal being worked, and will provide a surface for retain-

ing in place the lubricant applied to it (United States patent to

Singer 2,105,015, Defendant's Exhibit 39; British patent

494,830, Defendant's Exhibit 41; British patent 496,866,

Defendaat’s Exhibit 42).

[436] 24. The function of a dry film lubricant in drawing

operations is the same whetl.er the dry film lubricant is ap-

plied directly to the surface of the ferrous metal or is applied

over a phosphate coating on the ferrous metal (Houdaille Re-

quest for Admission 10, filed November 7, 1960, which stands

54a

unanswered and therefore is admitted by plaintiffs; and

Henricks deposition, p. 50).

[437] 25. The use of lubricated phosphate coatings in

drawing and deforming metal was clearly taught and dis-

closed in the British patent 496,866 of 1938, Defendant's Ex-

hibit 42, and in the British patent 494,830 of 1938, Defen-

dant’s Exhibit 41.

The combination of a phosphate undercoating with the

then “present day methods of lubrication” was taught and

described by the Singer United States patent 2,105,015 of

January 11, 1938 (Defendant's Exhibit 39).

The soap-borax Drawcote dry film type of lubricant was

one of the methods of lubrication well known and in public

use in 1943, more than two years prior to April 29, 1946, the

date of filing of the application for the patent in suit

(Henricks R. 338-363). Its combination with a phosphate

undercoating for providing lubrication and further protec-

tion to the surfaces of the work and the dies was therefore ob-

vious to a person having ordinary skill in the metal drawing

art in view of the teachings and disclosures of the above prior

art in 1943, more than two years prior to the time, April 29,

1946, that the plaintiffs rely upon for the making of the al-

leged invention of claim 4 of the patent in suit.

[438] 26. The patent in suit, in so far as the alleged usesof

the soap-borax lubricants by defendants in the cases at bar

are concerned, contains no disclesure or teaching other than

(column 15, lines 50-52, lines 67-68, and column 9, lines 1-15)

to apply to phosphate coatings the soap-borax lubricants

disclosed in the Orozco and Hemricks matent 2,469,473

(Defendant's Exhibit 1) and the soap-borax lubricants dis-

closed in the Whitbeck patent 2,470,062 (Defendant's Exhibit

3), admittedly in prior public use in 1943, more than two

years prior to the filimg of the first application for the patent

55a

in suit. This use was admittedly demonstrated and successfui-

ly made at and by the Briggs Manufacturing Company in

1943. This use of the soap-borax lubricants was successful,

and while now alleged by plaintiffs to have been experimen-

tal, there is no evidence that any further experiment was

necessary or required to successfully perform and utilize the

process defined in claim 4 in issue, which in so far as the pro-

cess alleged to be employed by defendants in these cases is

concerned, is simply to provide a phosphate coating on steel

and to apply to it the soap-borax lubricants on sale and in

public use in 1943 and known and available and demon-

strated as effective drawing lubricants in 1943 both when ap-

plied to phosphate coated steel and to steel without the

phosphate undercoating.

[439] 27. The evidence establishes that in 1943 and for

more than two years prior to the time, April 29, 1946, the

date relied upon by plaintiffs in this case for the making of the

invention of claim 4 of the patent in suit, the differences be-

tween the subject matter sought to be patented in claim 4 and

the prior art were such that the subject matter as a whole

would have been and was obvious to persons having ordinary

skill in the art of drawing and deforming steel.

[440] 28. Claim 4 of the patent in suit is indefinite and fails

to particularly point out and distinctly claim, as required by

the Patent Act, 35 U.S.C. S

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