# Record and brief — General Motors Corp. v. Devex Corp. > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385008_2009%3A0 ## Record - **Collection:** Supreme Court brief - **Document type:** Record and brief - **Published:** January 1, 1983 - **Citation:** 461 U.S. 648 ## Text 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 i 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 15 14 15 14 15 25 17, 18 17 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) 18 17 15 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, 17 EE: evden ddbuuvesedbubehs st. 22 1 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 10 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). ll 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). 12 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). 13 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 14 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). 15 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. 16 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 17 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). 18 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- 19 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. 21 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. 23 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). 24 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). 25 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. 26 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 27 EXHIBIT I financial interest are as follows: 1, 2. 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) 28 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 la 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, 3a 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. 4a “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). 5a 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). 6a 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 Ja 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). 8a 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). Ga 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 *© H. Mueller Mfg. Co. v. Glauber, 184 Fed. 609 (7th Cir. 1910); Mam- 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); Hoeltk4Appeal from the Plaintiffs-Appellants,| United States Dis- v. trict Court for the General Motors Corporation ee orthern District et al., of Illinois, Eastern Defendants-Appellees.j) Division. July 12, 1963 Before Duffy and Swygert, Circuit Judges, and Major, Senior Circuit Judge. Duffy, Circuit Judge. These are two civil suits for in- fringement of Henricks’ Reissue Patent No. 24,017 which were consolidated for trial on the common issue of validity. Claim 4 is the only claim at issue.’ The District Court held Claim 4 of the patent in suit to be invalid in view of the indefiniteness of the claim, the prior art and prior public use. 1. Claim 4 reads: ‘“*4. 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 com- position comprising a solid meltable organic binding ma- terial containing distributed therethrough a solid inorganic compound meltable at a temperature below the melting = of the ferrous metal phosphate of said coating and ving a hardness not exceeding 5 on the Mohs’ hardness scale, and thereafter deforming the metal.’’ 62a The patent in suit relates to lubrication of metal sur- faces in cold drawing and deforming operations in shaping steel to desired forms by dies, to reduce friction between the steel workpiece being drawn or shaped and the die, toe avoid scoring and tearing of the metal being drawn and to avoid injury to the surface of the dies. la The patent in suit is the outcome of an application, Serial No. 665,905, filed April 29, 1946 by the patentee Henricks, which was abandoned in favor of a continuation- in-part application filed October 31, 1950, upon which was issued United States Patent No. 2,588,234, dated March 4, 1952, for which application for reissue was filed March 1, 1954, upon which Re. Patent No. 24,017 now in suit issued on June 7, 1955. Claim 4, the only claim in issue, is identical to Claim 45 as allowed by the Patent Office in the 1946 application. April 29, 1946, the date when the 1946 application was filed, is therefore the record date of invention to which the pat- entee is entitled. The patent in suit relates particularly to the lubrication of metal for drawing and forming operations. It concerns cold forming operations as opposed to hot forming opera- tions. When metal is drawn or deformed, to transform a blank or workpiece into another desired shape, there is necessarily some movement between the surface of the blank and the surface of the die, and an accompanying generation of high pressures and temperatures. Adequate lubrication is essential. Unless suitable provision for lubri- cating the surfaces is made, tearing of the metal or galling of the dies results. The problem is most acute where diffi- cult draws of ferrous metals are involved. - Drawing opera- tions require costly tools and dies. It follows that wear and abrasion are very important considerations in tool and die work. | Among the suggestions. contained in the patent in suit 63a is that of providing upon the surface of the work to be drawn, an integral phosphate coating and applying thereto a film of sodium tallow soap having borax distributed therein. It is contended that a solid meltable organic bind- ing material mentioned in Claim 4 includes sodium tallow soap and that a solid inorganic compound mentioned in the claim includes borax. Mohs’ hardness scale is a known standard for indicating the relative hardness of materials. It is used in Claim 4 as a specification that the ‘‘solid inorganic compound”’ of the claim should not be hard enough to scratch the steel being drawn. The prior art disclosed a number of lubricating schemes. These included the use of ordinary lubricating oils or lubri- sants containing finely divided infusible pigments such 2 as clay, lime, mica or graphite. Most of such schemes were classified as ‘‘wet-film’’ lubricants which were wet and oily to the touch. Later followed what is known as Singer’s process, evolved in Germany and described in Singer United States Patent No. 2,105,015. Singer’s scheme was to form a sponge-like coating, such as a phosphate, on the surface of the workpiece. The coating was not wet or flowable but was integral with the workpiece and could not be squeezed out in the drawing operation. Phosphate coatings had been in use as early as 1914. These coatings had no lubricating value per se. They were, in fact, abrasive and caused tool and die wear even through superposed lubricants. The reason they were used in lubri- cating schemes was due to their ability to absorb and carry lubricant into a high pressure zone. The next step forward in the art after the Singer process, was the development of the Gilron ‘‘Dry-Film”’ soap and borax lubricant. In this process, soap and borax were mixed with water and applied as an aqueous solution to 64a the surface of the workpiece. The soap and borax coating. was then dried by heat lamps or the like onto the surface of the workpiece. As drawn, it was a hard fixed film and stayed with the workpiece in the high pressure zones. No other Inbricant was used. The Gilron soap-borax coating on bare metal being trans- parent, permitted inspection of the workpiece and elimi- nated the abrasive phosphate. The Gilron process sup- planted the Singer process in the shell case program of the United States Government during World War IL. In 1942 and thereafter until 1945, Henricks, the patentee of the patent in suit, was employed by Gilron Products Company and was familiar with the uses of soap-borax lubricants described in patents No. 2,469,473 and 2,530,837. The Gilron lubricating product for use in drawing steel was sold under the tradename ‘‘Drawcote’’ and was com- posed principally of sodium soap formed from tallow and palm oil, and of borax in proportion by weight of 10-33% soap to 67-90% borax. Drawcote was sold in the form of a dry powder. Gilron Products Company obtained patents on Drawcote and its use. United States Patents No. 2,469,473 dated May 10, 1949, and No. 2,530,837 dated November 29, 1950, were 3 obtained upon the joint application of Gilbert H. Orozco, a partner of Gilron Products Company and his employee Henricks, the patentee of the patent in suit. Drawcote was extensively sold and used in 1942 and 1943 in cold drawing of steel cartridge cases. In those years during World War II, there was a shortage of copper for making brass shel] cases for the ammunition used in mili- tary and small arms weapons. The Government required manufacturers of shell cases to make them from steel by cold drawing and deforming. This manufacture of steel shell cases occurred largely during the period 1942-1944, after which copper again became available. 65a In the manufacture of shell cases, Gilron’s Drawcote was able to replace the use of other lubricants such as lubri- cated copper coatings for steel and lubricated phosphate coating for steel. In 1943, among those using a lubricated phosphate coat- ing on steel in the operation of cold drawing steel 75 mm. shell cases, was Briggs Manufacturing Company, Detroit. That Company was then providing zinc phosphate coatings on steel blanks and applying thereover a sulphurized grease as a lubricant. About June 1943, Whitbeck of Gilron Products Company sold Drawcote to Briggs. By experi- mentation, Briggs found it could successfully carry out its cold drawing operation with the Drawcote soap-borax lubricant applied directly to the surface of the steel with- out the phosphate coating. Plaintiffs admit the Gilron borax coating solved many drawing problems existing at that time and that even today, it is satisfactory for many draws. However, plaintiffs claim the process has its limitations and cannot do what’ the Henricks process does. The Patent Office was fully advised of the nature and advantages of the Gilron process. Patent No. 2,469,473 was a file wrapper reference. Several references are made in the briefs to the ‘‘German Process.’”” This was developed prior to 1942. In this process, a phosphated workpiece is soaked as long as fifteen hours in an aqueous soap solution to form thereon by chemical interaction between the phosphate and soap, a water-insoluble soap film. A serious defect in this scheme was that the residual deposit was not water soluble and presented a difficult cleaning problem especially if the work- piece was to be electroplated. 4 Plaintiffs concede all of the elements which Henricks employed in Claim 4 in the patent in suit were old per se or in other combinations and have been available in 66a the art for some years. However, plaintiffs contend that the elements which Henricks selected were put together in a new way and achieved a new and unexpected result. Plaintiffs claim that in the specific embodiment of Claim 4, the ‘‘phosphate coating’’ is the abrasive coating of the Singer process—a seeming retrogression in the art. The overlying film is a fixed one and the ‘‘solid meltable or- ganic’’ constituent thereof is soap, the use of which had previously been found undesirable because of the cleaning problem. The ‘‘solid meltable inorganic compound’’ dis- tributed therethrough, meltable at a temperature below the melting point of the abrasive phosphate coating and hav- ing a hardness not more than 5 on the Mohs’ scale, is borax. Plaintiffs argue that new and unexpected results flow from the conjunction of elements defined in the drawing process of the Henricks’ patent; that tool and die life is greatly increased and severe drawing operations can now be performed which were previously impossible. Plain- tiffs say there is a coaction during the high temperatures and pressures whereby the abrasive phosphate coating re- acts with the borax to form amorphous glassy materials which contribute significantly to the lubricating value of the coating; that the formation of insoluble organic ma- terials is inhibited and there is no cleaning problem. There is substantial evidence in the record to prove that a new coaction between the soap, borax and phosphate occurred during the drawing process. Friedberg’s tests showed that in the Henricks’ process, new compounds are formed; the formation of insoluble organic compounds is inhibited, and the abrasive phosphate is transformed into a glassy amorphous compound having highly effective lubricating properties. . There was also proof based upon commercial use and experience. Metal Forming & Coining Corporation tried a number of the prior art schemes including oils, waxes 67a and drawing compounds, but the testimony showed that the only process that enabled this Company to cold form or coin small parts commercially is the combination in the Henricks’ patent in suit. Testimony showed tool and die life was increased one thousand fold so that for given 5 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. - Defendants have engendered a great interest in an en- deavor to have the Henricks’ patent in suit declared in- valid. The defense of this action has been conducted pri- marily by the attorneys for the Parker Rust Proof Company of Detroit. Parker supplies phosphate and lubricating materials to defendant General Motors, and is holding Gen- eral Motors harmless. Parker solicited financial and legal help in this lawsuit from a number of its own competitors, and at least three of these competitors in manufacturing and selling phosphate and lubricating material, have given assistance in this case. Of course, these competitors had the right to give such assistance. However, such interest does indicate that the process covered in Claim 4 of the patent in suit is something of special value and merit and of great importance to those working in the field of cold drawing and deforming operations. The trial court held Claim 4 too broad and lacking in specificity. The court stated the claim did not specify the kind of phosphate coating, the kind of organic binding, the kind of solid inorganic compound, as well as not specify- ing the amounts and relative proportions of any such items. Pertinent on this point is a recent case before this Court, Binks Manufacturing Company vy. Ransburg Electro-Coat- 68a ing Corporation, 281 F. 2d 252. In that case, the claim was made that the method claims of the patent there in suit did not satisfy the requirements of the patent statute (35 U. S. C. §112) due to failure to specify voltage, spac- ing and liquids to which they are applicable. In over- ruling this argument we said at page 256: ‘‘The process claims define the specific steps of procedure and the speci- fications being addressed to those skilled in the art .. . need not recite details.’” We further stated at page 257: ‘*There is no requirement that quantitative values for such factors as voltage, spacing and liquid characteristics be recited. The fact that experimentetion or the exercise of judgment is necessary to adapt a patented process to 6 particular material or to obtain the particular results desired does not impair validity of the patent.’’ The fact that Claim 4 distinguishes from thirty-one refer- ences in a mature art, none of which anticipate, quite clearly establishes that the claim is not too broad and indefinite. - Patent claims should be generic in character and do not necessarily have to be specific. It is entirely proper to refer in Claim 4 to ‘‘a phosphate coating’’ without speci- fying which ‘‘phosphate coating.’’ The examples stated in the patent in suit and the speci- fication teach the use of soap and borax over phosphate. They give formulas for the soap and borax and they identify the phosphate coating baths so that one skilled in the art could make them. The trial court was in error in holding that Claim 4 in the patent in suit was too broad and lacking in specificity. It is fundamental that a patent is presumed to be valid and the burden of establishing invalidity rests on the party asserting it (35 U.S.C. § 282). It is well established the presumption of validity is not overcome except by clear and cogent evidence. Radio Corporation of America v. Radio Engineering Laboratories, Inc., 293 U. 8. 1, 7; Hazel- 69a tine Research, Inc. v. Dage Electric Company, Inc., 7 Cir., 271 F. 2d 218, 224. Defendants claim the Patent Office did not consider Singer Patent No. 2,105,015 nor British Patent No. 494,830 of 1938, and also several publications. However, the Singer process is described in British Patent No. 496,866 which was relied upon by the Patent Office during prosecution of the patent. Soap and borax dry-film lubricants are de- scribed in Patents No. 2,469,473 and 2,470,062. The former wasz relied upon as a reference in the Patent Office and the latter is referred to in the body of the specification of the Henricks’ patent in suit. The Patent Examiner had before him as prior art, all of the elements of Henricks’ combination and found pat- entable invention in the combining of these elements. In fact, the Patent Office twice found invention over the prior art, first, when the original patent was granted, and second, when the reissue patent was granted. There is no showing in this case that the most pertinent prior art was not 7 considered by the Patent Office. On the contrary, we think the most pertinent art wae cited and was found insufficient to negative patentability. We cannot sustain the conclusion of !aw of the trial court that Henricks merely adopted the process which, in view of the prior art, was obvious to persons skilled in the art. The history of Parker Rust Proof Company demonstrates the process was not obvious. Parker Rust Proof has been a self-proclaimed leader in this field since 1914, but Parker remained uncertain as to how the problem should be solved until some considerable time after the Henricks’ invention date. Dr. Gibson was Technical Director for Parker in 1949 when they decided to develop a lubrication system. Dr. Gibson is now a professor of chemistry and qualified as one ‘skilled in the art.’’ Parker, in 1949, was operating in 70a the light of the prior art. Dr. Gibson was in charge of this development. They started in ‘‘basically with a litera- ture search.’’ They then worked with wet-film lubricants because, as Dr. Gibson testified, ‘‘We hadn’t realized the true value of drying that particular film.’’ Parker experi- mented with the formation of an organic film with phos- phate as mentioned in the German references. Finally, Parker came to the Henricks’ combination which it extolled in its literature as a new development of Parker. The literature references which Parker now points to as teaching the invention, taught Parker nothing. Neither did the practices at Briggs Manufacturing Company. The substitution of soap and borax dry-film for the wet lubri- cant in the Singer process was, in fact, not obvious to Parker. The Henricks’ process was not, in fact, obvious to the defendants and the others now associated with them in the defense of this suit. None of them made the substitution of elements in the Singer process which, by hindsight, now ” appears to them to have been ‘‘obvions.”’ | Although the learned trial judge found Claim 4 of the patent in suit to be invalid on all suggested grounds, we are of the view that the closest question in the case is the finding and conclusion of the trial court as to public use. This, in turn, refers to use at Briggs Manufacturing Com- pany in 1943. All of the evidence on this point, except patentee’s own evidence, is contained in depositions. It 8 is apparent from Finding 14 that the Court relied upon the testimony of Tousley and Brown which appeared in depositions. ' As the evidence relied on appears in depositions, we are in as good a position as the trial court to examine it and determine for ourselves whether the use at Briggs Mantfacturing Company was a public use. Kiwi Coders Corporation v. Acro Tool é Die Works, 7 Cir., 250 F. 2d 7la 562, 568; Lewyt Corporation v. Health-Mor, Inc., 7 Cir., 181 F. 2d 855, 857. The trial court did not hold the combination claimed in the patent in suit was publicly used in its entirety ox that the valuable new result flowing from the combination was understood or achieved at Briggs. What the trial court decided was: ‘‘ While it is arguable that the precise com- bination and coaction 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.’’ The trial court further recognized that the pat- entee in the patent in suit did make a stride forward in the art but apparently thought it was not sufficient to merit a patent monopoly. There exists a well established rule that to invalidate a patent on the ground of public use, the prior public use must be established by clear and convincing proof. - “ In Smith v. Hall, 301 U. 8. 216, 233, the Court refers to the rule as ‘‘. . . the heavy burden of persuasion which rests upon one who seeks to negative novelty in a patent by showing prior use.’ In Radio Corporation of America v. Radio Engineering Laboratories, Inc., 293 U. S. 1, 7, the Court cites with approval a number of cases for the prop- osition, the burden of proof is upon the party setting it up and ‘‘every reasonable doubt should be resolved against him.’’ Indeed, the late Chief Judge Learned Hand stated the rule in even more emphatic language in Block v. Nathan Anklet Support Co., Inc., 2 Cir., 9 F. 2d 311, 313, ‘*. . . but in such cases prcbability, even extreme probability, i is not enough. The proof must be as absolute as in a criminal conviction; indeed, the rule comes nearly to this, that one must have contemporaneous records, verbal or strnctural.’’ In June 1943, when Henricks came to the Briggs Manu- facturing Company in behalf of the Gilron Products Draw- 72a cote, a number of experiments were conducted which led 9 to the changeover from the Singer process to Gilron. Each blank tested was subjected to six consecutive forming operations. Henricks experimentally ran two bas- kets of blanks with a phosphate undercoat. There were approximately one hundred test pieces in the two baskets, a very small amount considering the large volume being handled. No further notice was taken of the pieces them- selves, and they were enveloped in the big flow of material that was in process. The success of the process was in no way there demonstrated. This rather minor incident. at Briggs did not lead to the use of the patented combination by Briggs. In fact, Briggs abandoned the use of phosphate entirely. The temporary and almost casual experiment with soap and borax went into the discard. After the decision in this case by the trial court, Henricks received information that the United States Government Arsenal at Joliet, might have a report which would show the true facts as to the Briggs operation. Inquiry there revealed nothing. The inquiry was forwarded to Frank- fort Arsenal. Nothing was found there, but when the inquiry was forwarded to the Record Files in Missouri, a report was located. Henricks was permitted to read the report and make extracts therefrom. Plaintiffs filed a motion to amend the findings of fact and for a new trial. The Court denied the motion. This was understandable where the Court considered the patent to be invalid on all grounds urged. However, as our view is that the turning point of this case is the question of alleged public use at Briggs, we think the report should have been considered, especially that part which deals with the initial experimentation with the Gilron process. It would appear reasonable that if there had been any signifi- cant or more than experimental use of soap and borax over phosphate in cartridge-case manufacture at Briggs, 73a it would surely have appeared in the report which the Briggs officials made to the army ordnance. Another convincing argument in favor of plaintiffs’ contention is that if soap and borax had been applied over phosphate in regular production, there would necessarily have been a tank for phosphate solution and a separate tank for the soap and borax solution arranged in series so that the baskets containing the blanks or workpieces would move successively through the two solutions. There is no claim that any such procedure was followed. 10 We hold there is no sufficient showing of prior public use and that Claim 4 of the patent in suit is valid. The case will, therefore, be remanded to the District Court for further proceedings consistent with this opinion, as the question of validity only was passed upon in the previous trial. Reversed. 74a {11] UNITED STATES OF AMERICA, ss. The President of the United States of America. (Seal) To the Honorable the Judges of the United States District Court for the Northern District of Illinois, Eastern Division, Greeting: Whereas, lately in the United States District Court for the Northern District of Illinois, Eastern Division before you, or some of you, in a cause between Devex Corporation, et al., Plaintiffs, and General Motors Corporation, et al., Defen- dant: District Court Nos. 56-C-1912 and 57-C-892, a judg- ment was entered on the twenty-ninth [12] day of June, 1962, as by the inspection of the transcript of the record of the said District Court, which was brought into the United States Court of Appeals for the Seventh Circuit by virtue of an ap- peal by Devex Corporation, et al. agreeably to the act of Con- gress, in such case made and provided, fully and at large appears. [13] And Whereas, in the term of September, in the year of our Lord one thousand nine hundred and sixty-two, the said cause came on to be heard before the said United States Court of Appeals for the Seventh Circuit, on the said transcript of record, and was argued by counsel. On Consideration Whereof, it is ordered and adjudged by this Court that the judgment of the said District Court in this cause appealed from be, and the same is hereby, Reversed, with costs, and that this cause be, and it is hereby Remanded to the said District Court for further proceedings consistent with the opinion of this Court filed this day, as the question of validity only was passed upon in the previous trial. 75a Friday, July 12, 1963. And afterwards, to-wit, on the twenty-sixth day of July, 1963, there was filed in the office of the Clerk of this Court a petition for rehearing, which said petition for rehearing was denied on the fourth day of September, 1963, and further that Plaintiffs-Appellants, Devex Corporation, et al. recover against the Defendants-Appellees, General Motors Corpora- tion, et al. the sum of one thousand, six hundred fifteen and sixty-eight/100ths Dollars ($1,640.68) for docketing and printing costs herein expended with direction to award execu- tion thereof. [14] You therefore are hereby commanded that such fur- ther proceedings be had in said cause, as according to right and justice and the laws of the United States, aught to be had, the said judgment notwithstanding. Witness, the Honorable Earl Warren, Chief Justice, of the United States, the sixteenth day of January, in the year of our Lord one thousand [Text truncated at 120,000 characters. The full text is on the page linked above.] --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385008_2009%3A0. Public record. Not legal advice.