Petition for Writ of Certiorari — Allen Group Inc. v. Modine Manufacturing Co.

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O0r1477 (ETS D

MAR 15 1991

In the Supreme Couk

OF THE CiLHA

OF THE

United States

OCTOBER TERM, 1890

THE ALLEN GRovuP INC., d/b/a

THE G&O MANUFACTURING COMPANY,

Petitioner,

VS.

MODINE MANUFACTURING COMPANY,

Respondent.

PETITION FOR WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE FEDERAL CIRCUIT

ALLAN N. LITTMAN

C. DouGLAS FLOYD

(Counsel of Record)

JOHN M. GRENFELL

JOHN QO. HORSLEY

225 Bush Street

Post Office Box 7880

San Francisco, CA 94120-7880

Telephone: (415) 983-1000

PAUL H. HELLER

MICHAEL J. LENNON

One Broadway

New York, NY 10004

Telephone: (212) 425-7200

Attorneys for Petitioner

PILLSBURY, MADISON & SUTRO

Of Counsel

KENYON & KENYON

Of Counsel

Bowne of San Francisco, Inc. ¢ 190 Ninth St. ¢ S.F., CA 94103 © (415) 284-2200

QUESTIONS PRESENTED

1. Whether the Federal Circuit Court of Appeals in this and

other cases is systematicaily ignoring the plain language of 35

U.S.C. section 103 and disobeying the decisions of this Court

which prevent the grant of patent monopolies for claimed inven-

tions that are obvious from prior art?

2. Whether, contrary to the decisions of this Court, a showing

that a claimed invention was obvious from prior publications can

be overcome by the commercial success of an embodiment of the

invention?

3. Whether the Federal Circuit has prevented meaningful

review of the application of the legal standard of obviousness by

combining and confusing secondary considerations, such as com-

mercial success, with the required comparison between the

claimed invention and the prior art?

LIST OF PARTIES AND SUBSIDIARIES

The parties to the proceeding beiow were respondent Modine

Manufacturing Company (“Modine”), which was the plaintiff,

appellee and cross-appellant, and petitioner The Allen Group Inc.

(“Allen”), which was the defendant, appellant and cross-appel-

lee. In the proceedings below, Allen was sometimes referred to by

the name of its division, The G&Q Manufacturing Company

(“G&O”). Allen’s stock is publicly traded, and Allen has the

following partially-owned subsidiaries: Grayson Electronics Com-

pany (a Virginia corporation); Sponmech Limited (a U.K. corpo-

ration); and Antenas Profesionales, S.A. (a Spanish corporation).

ill

TABLE OF CONTENTS

Page

QUESTIONS PRESENTED. .................cc0000: i

LIST GF PARTIES AND SUBSIDIARIES ........... ii

SS l

EAN ses pg hasscascarciocvecers 2

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RORUeeenee GOP BORE CAGE... cece cece ces 2

ss ceca ccncacensseuespaces 2

eck cca usisccacccscesaces 4

REASONS FOR GRANTING THE PETITION ....... 6

os GE 18

TABLE OF AUTHORITIES

Cases

Page

Alco Standard Corp. v. Tennessee Valley Auth., 808 F.2d

1490 (Fed.Cir. 1986), cert. dismissed, 483 U.S. 1052

Sais ad canehen LUKE Ws hARa Ren hadcekeas codes 10

Anderson’s-Black Rock, Inc. v. Pavement Salvage Co., 396

i ai0cibbteke Seeds oka te eee ben ead 6, 7,8

Ashland Oil, Inc. v. Delta Resins & Refractories, Inc., 776

F.2d 281 (Fed.Cir. 1985), cert. denied, 475 U.S. 1017

tga Pr pe Oe re pr ry arn eee 10

Custom Accessories, Inc. v. Jeffrey-Allan Indus., 807 F.2d

See MG, EE on 5 ca ose snnecaehboeeseccaveutas 10

Dann v. Johnston, 425 U.S. 219 (1976) ................ 6, 7

Demaco Corp. v. F. Von Langsdorff Licensing Ltd., 851 F.2d

1387 (Fed.Cir.), cert. denied, 488 U.S. 956 (1988) ...10, 15

Dennison Mfg. Co. v. Panduit Corp.,

ee ee dak aneeneventn 13-14

EWP Corp. v. Reliance Universal Inc., 755 F.2d 898

(Fed.Cir.), cert. denied, 474 U.S. 843 (1985) ......... ll

Fromson v. Advance Offset Plate, Inc., 755 F.2d 1549

i eo See eee te cee hetiekawdane 10

Gillette Co. v. S.C. Johnson & Son, Inc., 919 F.2d 720

Nee ee ewe 6 ew ee 10

Graham v. John Deere Co., 383 U.S. 1 (1966) ........ passim

Great Atl. & Pac. Tea Co. v. Supermarket Equip. Corp., 340

MP ee ere 8, 15

Hybritech Inc. v. Monoclonal Antibodies, Inc.,

802 F.2d 1367 (Fed.Cir. 1986), cert. denied,

De eebaa cas 10-11

In re Nilssen, 851 F.2d 1401 (Fed.Cir. 1988) ........... ll

In re Piasecki, 745 F.2d 1468 (Fed.Cir. 1984) ........... 10

In re Sernaker, 702 F.2d 989 (Fed.Cir. 1983) ........... 9,10

In re Wood, 599 F.2d 1032 (C.C.P.A. 1979) ............ ll

Jones v. Hardy, 727 F.2d 1524 (Fed.Cir. 1984).......... 10

Lindemann Maschinenfabrik GMBH v. American Hoist &

Derrick Co., 730 F.2d 1452 (Fed.Cir. 1984) .......... 10

TABLE OF AUTHORITIES

CASES

Page

Loctite Corp. v. Ultraseal Ltd., 781 F.2d 861 (Fed.Cir.

PPP TUTE E ESLER CT TOPE eee Pe eer ee ore 10

McClain v. Ortmayer, 141 U.S. 419 (1891) ............. 8,15

Medtronic Inc. v. Intermedics, Inc., 799 F.2d 734 (Fed.Cir.

1986), cert. denied, 479 U.S. 1033 (1987) ............ 14

Merck & Co. v. Biocraft Laboratories, Inc., 874 F.2d 804

Se GUE ccccss ehh bidasanases eer sneuscwses 1]

Newell Cos., Inc. v. Kenney Mfg. Co., 864 F.2d 757

(Fed.Cir. 1988), cert. denied, 110 S.Ct. 62 (1989) ..... 1]

Perkin-Elmer Corp. v. Computervision Corp., 732 F.2d 888

(Fed.Cir.), cert. denied, 469 U.S. 857 (1984) ......... 10

Sakraida v. Ag Pro, Inc., 425 U.S. 273 (1976) ......... 6, 7,8

Simmons Fastener Corp. v. Illinois Tool Works, 739 F.2d

1573 (Fed.Cir. 1984), cert. denied, 471 U.S. 1065 (1985) 10

Stevenson v. International Trade Comm’n, 612 F.2d 546

ee ee eT eo er rere rer a rr ee 8-9

Stratoflex v. Aeroquip Corp., 713 F.2d 1530

ED conc kc ceeeGuagweebabssechauses 5,9, 10

Toledo Pressed Steel Co. v. Standard Parts, Inc., 307 U.S.

EE Tiki cnansciccevdwoXk stead beets vcasntees 8

Truswal Systems Corp. v. Hydro-Air Eng’g, Inc., 813 F.2d

See EEN SE 6 6. n54 danas bURRASheaedcase 10

Uniroyal, Inc. v. Rudkin-Wiley Corp., 837 F.2d 1044

(Fed.Cir.), cert. denied, 488 U.S. 825 (1988) ......... 11

United States v. Adams, 383 U.S. 36 (1966)............ 7

W.L. Gore & Assocs., Inc. v. Garlock, Inc., 721 F.2d 1540

(Fed.Cir. 1983), cert. denied, 469 U.S. 851 (1984) ....9, 10

Constitutions

United States Constitution

Agtictes 1, epetiom ©, Gremee © conc ccc ccc cccccccccecss 15

TABLE OF AUTHORITIES

Statutes and Codes

Page

United States Code

PE IS UE og vc ivccccccnscessecsececden 2

ED oss kb be bc cbeeeedeesn awn 17

I RD. occ ccc cccesabauscdeeuceae 4

ota decane e aes tusk bea eer passim

Te ee 5,17

Other Authorities

Adelman, The New World of Patents Created by the Court

of Appeals for the Federal Circuit, 20 U.Mich.J.L.Reform

EE "hs bb 560 bane nena@akasdeeéheawen aus e as 10, 13

Alster, New Profits from Patents, Fortune, April 25, 1988,

PLC hcrecansactncdspndabsde ee aamhanee sees 17

Andresky, A Weapon at Last, Forbes, March 10, 1986, p. 46 16

Baldo, Juries Love the Patent Holder, Forbes, June 17, 1985,

ab ksas bacdeseces nnhes04nb ne sRehebeeeukas 17

Coolley, What the Federal Circuit Has Done and How

Often: Statistical Study of the CAFC Patent Decisions —

1982 to 1988, 71 J. Pat. & Trademark Off. Soc’y 385

PULLER CRA CDA Ss HRN SES OEE SE DRESSES EE ER RUSS 13

Corcoran, Likely Litigation; Companies Wield Lawsuits as a

Market-Development Tool, Sci. Am., March 1990, p. 76 16

Dunphy, Washington’s Propatent Court, Chemical Week,

ek Se Oh OD <i pb aneccnsantaveceasceccs 16

Foreign Patent Share Rise Levels Off, Inside R & D,

EY POs OA. DE cnnecccacceeasaccsecsascacis 17

Harris, The Emerging Primacy of “Secondary Considera-

tions” as Validity Ammunition: Has the Federa! Circuit

Gone Too Far?, 71 J. Pat. & Trademark Off. Soc’y 185

Sern rrr rr hs. ray err erer 16

Mack, A Change in the Legal Climate, Forbes, October 7,

SS ch ka hs hbbnh 66 SSA CSARRMREARA TAA REAROED 16

Merges, Commercial Success and Patent Standards: Eco-

nomic Perspectives on Innovation, 76 Calif.L.Rev. 803

I od 6005.60 6 4054660544 A 4 SASEANER SORE ORERAS 16

Vii

TABLE OF AUTHORITIES

OTHER AUTHORITIES

Morley & Wilkinson, The Repair of Aluminum Heat Ex-

changers, October 1978 Welding Journal 15...........

Note, A Critique of the Use of Secondary Considerations in

Applying the Section 103 Nonobviousness Test for Patent-

OT eee

Patriarca, Slaughter & Manly, Heat-Exchanger Fabrication,

December 1957 Welding Journal 1172 ...............

Pier, The Surprising Power of Patents, Fortune, June 23,

EE ab bh nan oh chuudees 54 hanesanean se Shasecss

Slaughter, Franco-Ferreira & Patriarca, Welding and Braz-

ing of High Temperature Radiators and Heat Exchangers,

January 1968 Welding Journal 15 ...................

Sobel, The Court of Appeals for the Federal Circuit: A Fifth

Anniversary Look at Its Impact on Patent Law and

Litigation, 37 Am.U.L.Rev. 1087 (1988) .............

Warner & Weltman, The Fluxless Brazing of Aluminum

Radiators, Society of Automotive Engineers Technical

PE I oo ie vu kdhnnc kaos ob0dbeeneees.

Weltman, Aluminum Radiators, March-April 1970 Auto-

TD Fe ID Din nc ccccccccccncecsecccceses

Wiegner, When the Going Gets Tough, the Tough Go To

Court, Forbes, December 28, 1987, p. 36 .............

Work, Inventors’ Just Rewards, U.S. News and World Rep.,

ER 8 FR erie rer ere cr are

No. 90-

In the Supreme Court

OF THE

United States

OCTOBER TERM, 1990

THE ALLEN Group INC., d/b/a

THe G&O MANUFACTURING COMPANY,

Petitioner,

VS.

MODINE MANUFACTURING COMPANY,

Respondent.

PETITION FOR WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE FEDERAL CIRCUIT

Petitioner respectfully requests that a writ of certiorari issue to

review the judgment and opinion of the United States Court of

Appeals for the Federal Circuit in this case.

OPINIONS BELOW

The opinion of the court of appeals is reported at 917 F.2d 538,

and is included in the Appendix at pp. A-1 to A-8. The order of

the court of appeals denying rehearing is included at p. A-10. The

order and opinion of the district court on the parties’ post-trial

motions is reported at 14 U.S.P.Q.2d 1210. That order and

opinion, and the district court’s judgment, are included in the

Appendix at pp. A-11 to A-39.

JURISDICTION

The opinion and judgment of the court of appeals was entered

on October 22, 1990. Allen’s timely petition for rehearing was

denied on December 17, 1990. The jurisdiction of this Court is

invoked pursuant to 28 U.S.C. section 1254(1).

STATUTES INVOLVED

Section 103 of 35 U.S.C. provides:

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

identically disclosed or described as set forth in section 102

of this title, if the differences between the subject matter

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

subject matter as a whole would have been obvious at the

time the invention was made to a person having ordinary skill

in the art to which said subject matter pertains. Patentability

shall not be negatived by the manner in which the invention

was made.”

STATEMENT OF THE CASE

A. The Patent in Suit.

United States Patent No. 4,529,034 (“the 034 patent”) was

issued to Modine as assignee of the “inventor,” Zalman Saper-

stein.’ The ’034 patent discloses nothing more than a vehicular

radiator having joints that are welded or brazed on one side (“the

liquid side’), and coated with solder or another sealant on the

opposite side (“the air side”).? App., pp. A-44 to A-46. The

'The patent is included in the Appendix at pp. A-40 to A-52.

"In radiators and other heat exchangers, a liquid coolant flows inside

tubes joined to a “header plate.” Air passes over the outside of the tubes

and cools the liquid. The joints between the tubes and the header plate

are called “tube-to-header joints.” The inner side of the tube-to-header

joint is “the liquid side,” and the outer side is “the air side.”

Soldering, brazing and welding are long-used methods for joining two

pieces of metal. Welding fuses two pieces of metal by heating them.

patent claims that the liquid-side weld or braze imparts strength

to the joints, while the air-side sealant coating closes leaks in the

weld or braze. App., p. A-43.

When Mr. Saperstein applied for the ’034 patent in 1979, there

was nothing new about welding or brazing radiator joints on the

liquid side for strength, or sealing joints on the air side to stop

leaks, or the combination of those two concepts. Nevertheless,

after five years and eight rejections, Mr. Saperstein and Modine

persuaded the Patent Examiner that their “invention” was patent-

able. They did not show the Examiner five published articles that

had previously disclosed the same “invention.”

The Patriarca articles,’ which were published in 1957 and 1968,

described welded joints sealed on the air side to prevent leaks —

the same construction that Saperstein claimed to have invented in

1979. Those articles discussed heat exchangers used in the nu-

clear industry, which have welded joints.‘ Patriarca wrote that

such joints, “although initially sound, are subject to cracking

during cyclic service at high temperatures.” Patriarca described

“[a]n obvious solution” to this problem:

“An obvious solution to the problem would be to relieve

the notched condition [in the joint] by the use of a suitable

back braze... *’ (December 1957 Welding Journal, at 1174)

(emphasis added).

Soldering and brazing form the joints by using a separate filler material

with a melting point below that of the metals to be joined. Soldering

differs from brazing in that soldering is done below, and brazing above,

800° F.

*Patriarca, Slaughter & Manly, Heat-Exchanger Fabrication, Decem-

ber 1957 Welding Journal 1172; Slaughter, Franco-Ferreira & Patriarca,

Welding and Brazing of High Temperature Radiators and Heat Ex-

changers, January 1968 Welding Journal 15. Copies of these articles and

the aluminum radiator articles (infra note 5) are included in the Joint

Appendix lodged with the court of appeals.

*A radiator is a type of heat exchanger. The '034 patent identifies two

patents in the nuclear field as being among “[t]he most pertinent prior

art of which I [Mr. Saperstein] am aware....” App., p. A-44.

—_——“A_method of circumventing this problem is to back-braze

the welded joint... "’ (January 1968 Welding Journal, at 17)

(emphasis added and footnote omitted).

By “back-braze,” Patriarca referred to brazing the welded

joints on the air side. /d., at 18, Fig. 6. Similarly, the ’034 patent

specifies brazing as one of the air-side sealants. App., p. A-45.

The Patriarca articles state that back-brazing has the additional

benefit of reinforcing the weld. Similarly, the ’034 patent states

that the air-side sealant serves a “secondar[y]” purpose of rein-

forcing the joint. App., pp. A-45 to A-46. In short, Sapestein’s

“invention” had been disclosed in 1957, when Patriarca wrote

that “the principle of welding and back brazing insures maximum

reliability ....” December 1957 Welding Journal, at 1172.-

The construction “invented” by Mr. Saperstein had also been

disclosed in three articles published in 1970 and 1978,° which

described the use of epoxy and solder to seal brazed joints in

aluminum radiators. These articles disclosed that such brazed

joints were “five to ten times stronger” than joints soldered on the

liquid side, and that the air-side sealant “work[{ed] extremely

well” as a means of repairing leaks.

In the early 1980’s, Modine developed a copper/brass truck

radiator called the “Beta-Weld,” which embodied Saperstein’s

“invention.” The Beta-Weld was introduced just as the market

was beginning to demand longer-lived trucks with more durable

radiators. As a result, the Beta-Weld was a commercial success.

B. Proceedings Below.

Shortly after the 034 patent issued in July 1985, Modine sued

Allen for infringement in the United States District Court for the

Northern District of California. Federal jurisdiction was based on

28 U.S.C. section 1338(a). A jury returned a verdict that the

*Weltman, Aluminum Radiators, March-April 1970 Automotive

Cooling Journal 6; Warner & Weltman, The Fluxiless Brazing of

Aluminum Radiators, Society of Automotive Engineers Technical Pa-

per Series (1978); Morley & Wilkinson, The Repair of Aluminum Heat

Exchangers, October 1978 Welding Journal 15.

patent was valid and had been willfully infringed, and assessed

damages of $55.6 million.®

Allen moved for judgment notwithstanding the verdict and for

a new tral on the ground (among others) that the patent was

invalid for obviousness in light of the published prior art. In

response, Modine’s only attempt to distinguish the Patriarca

articles was to argue that a person designing a truck radiator

would not look to heat exchangers used in the nuclear power

industry. Modine’s only attempt to distinguish the aluminum

radiator articles was to argue that they did not mention the

“flooding” of all joints with sea:ant, but only the “spot repair” of

individual joints.

The district court ruled that the relevant prior art (i.e., the art

that would have been-consulted by a person of ordinary skill)

included heat exchangers used in the nuclear industry, as well as

aluminum radiators and radiator repair techniques. App., p. A-16.

Nevertheless, the court denied Allen’s motion for judgment

notwithstanding the verdict, emphasizing that under Stratoflex v.

Aeroquip Corp., 713 F.2d 1530, 1538-39 (Fed.Cir. 1983), “secon-

dary considerations must, when present, be considered with all the

evidence in the determination cf obviousness, and not just when a

doubt remains after reviewing the prior art.” App., p. A-16.

Allen timely appealed, and the Court of Appeals for the

Federal Circuit affirmed. That court disposed of the issue of

obviousness as follows:

“Here, while considerable prior art existed at the time

Modine’s invention was made, reasonable jurors could con-

clude that the differences between the prior art and the

claimed invention were significant enough to render the

invention nonobvious to one of ordinary skill in the art.

Moreover, considerable objective evidence of nonobvious-

ness, in the form of long-felt but unmet need and resulting

commercial success, was presented in this case. We can

°Modine ultimately accepted a remittitur to $14 million. See App.,

pp. A-33 to A-34. The district court denied Modine’s motion to treble

the damages under 35 U.S.C. section 284. App., pp. A-24 to A-25.

therefore only conclude that the jury’s implied findings

relating to obviousness were supported by substantial evi-

dence.” App., p. A-3.

Neither the opinion of the district court, nor the opinion of the

court of appeals, contains any comparison between the published

prior art and the claimed invention. The only evidence identified

by either court as supporting the jury’s verdict on obviousness was

the commercial success of the Beta-Weld (and related “secon-

dary considerations”’).

Under 35 U.S.C. section 103 and Graham v. John Deere Co.,

383 U.S. 1 (1966), a court must determine as a matter of law,

based on a comparison between the relevant prior art and the

claimed invention, whether the invention would have been obvi-

ous to a person of ordinary skill in the art. If the courts below had

made that determination, they could have reached only one

conclusion: that the claimed invention was obvious from the

published prior art. But the courts below did not undertake the

analysis required by Graham and section 103. Instead, they

lumped the statutory criteria together with the commercial suc-

cess of the Beta-Weld, and cloaked the basis for their decisions

beneath “implied findings” of the jury.

REASONS FOR GRANTING THE PETITION

In this and all cases involving the issue of obviousness, the

Federal Circuit is ignoring 35 U.S.C. section 103 and disobeying

this Court’s landmark decisions construing that statute: Graham

v. John Deere Co., 383 U.S. 1 (1966); Anderson's-Black Rock,

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

Johnston, 425 U.S. 219 (1976); and Sakraida v. Ag Pro, Inc., 425

U.S. 273 (1976).

Section 103 (supra p. 2) sets forth the factors to be considered

in determining whether a claimed invention was obvious. It does

not mention commercial success. In Graham v. John Deere Co.,

383 U.S. 1 (1966), this Court summarized the statutory criteria

of obviousness as follows:

“Under § 103, the scope and content of the prior art are to be

determined; differences between the prior art and the claims

at issue are to be ascertained; and the level of ordinary skill

in the pertinent art resolved. Against this background, the

obviousness or nonobviousness of the subject matter is deter-

mined.” 383 U.S. at 17 (emphasis added).

In Anderson’s-Black Rock, Inc. v. Pavement Salvage Co., 396

U.S. 57, 62 (1969), this Court again admonished “strict obser-

vance” of the criteria of section 103. In Dann v. Johnston, 425

U.S. 219, 226 (1976), this Court described the statutory criteria

as “the central factors relevant to any inquiry into obviousness”

(emphasis added).

Graham also holds that, while section 103 entails several

factual inquiries, “the ultimate question of patent validity is one

of law... .” 383 U.S. at 17. The Graham Court carefully com-

pared both of the patents at issue with the prior art, and held both

of them invalid for obviousness. Jd. at 19-37.’ This Court under-

took similar analyses, with the same result, in Anderson’s-Black

Rock (396 U.S. at 58-60), Dann (425 U.S. at 220-22 and

226-30) and Sakraida v. Ag Pro, Inc., 425 U.S. 273, 275-77 and

280-82 (1976).

In contrast to the heavy weight that the Federal Circuit has

given to commercial success and other secondary considerations,

this Court in Graham sharply limited the relevance of such

evidence:

“Such secondary considerations as commercial success, long

felt but unresolved needs, failure of others, etc., might be

utilized to give light to the circumstances surrounding the

origin of the subject matter sought to be patented. As indicia

’Similarly, in Graham’s companion case, this Court determined on

the basis of a careful comparison that the prior art did not suggest the

patented invention, and only then referred to the secondary considera-

tion of skepticism. United States v. Adams, 383 U.S. 36, 48-52 (1966).

of obviousness, these inquiries may have relevancy. 383 U.S.

at 17-18 (emphasis added).

The limited role of commercial success in determinations of

obviousness had been established by this Court long before

section 103 was enacted in 1952.° See Great Atl. & Pac. Tea Co. v.

Supermarket Equip. Corp., 340 U.S. 147, 153 (1950) (“commer-

cial success without invention will not make patentability”);

Toledo Pressed Steel Co. v. Standard Parts, Inc., 307 U.S. 350,

356-57 (1939) (“similarly without significance on the question of

novelty is the fact that . . . utility resulted and commercial success

followed from what patentees did”); McClain v. Ortmayer, 141

U.S. 419, 427-29 (1891) (although “in a doubtful case the fact

that a patented article had gone into general use is evidence of its

utility, it is not conclusive even of that— much less of its

patentable novelty’).

This Court’s post-Graham decisions confirm that the “secon-

dary” considerations are just that — subordinate to the criteria

stated in section 103. See Anderson's-Black Rock, supra, 396 U.S.

at 61 (while “[u]se of the radiant-heat burner in this important

field marked a successful venture ..., more than that is needed

for invention”); Sakraida, supra, 425 U.S. at 282-83 (holding a

patent invalid for obviousness although it was “doubtless a matter

of great convenience, producing a desired result in a cheaper and

faster way, and enjoying commercial success’’).

Despite these precedents, the Federal Circuit, since its creation

in 1982, has elevated commercial success to a primary and often

decisive criterion of nonobviousness, and has permitted the jury’s

evaluation of that and other secondary considerations to override

the factors specified by Congress in section 103.°

*As Graham points out, section 103 “was intended merely as a

codification of judicial precedents ....” 383 U.S. at 17.

‘The precursor of the Federal Circuit’s doctrine was Stevenson v.

International Trade Commission, 612 F.2d 546 (C.C.P.A. 1980). In

that case, the court rejected decisions from other circuits holding that

commercial success “can only tip the scales in favor of patentability in

close cases.” 612 F.2d at 553. Instead, the court held that “it is

The Federal Circuit’s first decision in the area was In re

Sernaker, 702 F.2d 989 (Fed.Cir. 1983), an appeal from the

Patent and Trademark Office Board of Appeals. The court held

that “the board must always consider” available evidence of

secondary considerations, and that secondary considerations “‘re-

quire a finding of nonobviousness if the matter be otherwise

doubtful.” 702 F.2d at 996 (emphasis added). A few months

later, the Federal Circuit reiterated that “evidence rising out of

the so-called ‘secondary considerations’ must always when pre-

sent be considered en route to a determination of obviousness.”

Stratoflex, Inc. v. Aeroquip Corp., 713 F.2d 1530, 1538 (Fed.Cir.

1983). The court added:

“Indeed, evidence of secondary considerations may often be

the most probative and cogent evidence in the record. It may

often establish that an invention appearing to have been

obvious in light of the prior art was not. It is to be considered

as part of all the evidence, not just when the decisionmaker

remains in doubt after reviewing the art.” Jd. at 1538-39.

In W.L. Gore & Associates, Inc. v. Garlock, Inc., 721 F.2d 1540

(Fed.Cir. 1983), cert. denied, 469 U.S. 851 (1984), the Federal

Circuit applied Stratoflex to reverse a trial court’s holding that a

patent was invalid for obviousness. The court restated Graham as

follows:

“The objective evidence of nonobviousness [i.e., the sec-

ondary considerations] . .. may in a given case be entitled to

more weight or less, depending on its nature and its relation-

ship to the merits of the invention. It may be the most

pertinent, probative, and revealing evidence available to aid

in reaching a conclusion on the obvious/nonobvious issue. It

shoul’ when present always be considered as an integral part

of the analysis.” 721 F.2d at 1555.

The notion that secondary considerations should “always” be

“an integral part of the analysis” is flatly inconsistent with

Graham. There, such evidence was held to be “irrelevant” be-

cause the subject matter of the patent was “clearly evident from

necessary that such secondary considerations also be evaluated” in

determining obviousness. Jd. (emphasis added).

the prior art as it stood at the time of the invention.” 383 US. at

36. The notion that secondary considerations can ever be “the

most pertinent, probative, and revealing evidence” of nonobvious-

ness is even more inconsistent with Graham. See id. at 17-18,

35-36. Nevertheless, the erroneous teachings of Sernaker,

Stratoflex and Gore have become a virtual litany in the Federal

Circuit.'°

Later cases have completed the subversion of Graham by

upholding patents on the basis of commercial success even

though, “standing alone, the prior art provides significant support

for” a conclusion of obviousness. Alco Standard Corp. v. Tennes-

see Valley Auth., 808 F.2d 1490, 1499 (Fed.Cir. 1986), cert.

dismissed, 483 U.S. 1052 (1987).'' In the Federal Circuit,

commercial success “weigh[s] heavily in the determination of

obviousness,” id. at 1501, and has become, in many cases, the

decisive factor in that determination. See Simmons Fastener

Corp. v. Iilinois Tool Works, 739 F.2d 1573, 1575-76 (Fed.Cir.

1984), cert. denied, 471 U.S. 1065 (1985); Hybritech Inc. v.

Monoclonal Antibodies, Inc., 802 F.2d 1367, 1382-84 (Fed.Cir.

See, e.g., Jones v. Hardy, 727 F.2d 1524, 1530-31 (Fed.Cir. 1984);

Lindemann Maschinenfabrik GMBH v. American Hoist & Derrick Co.,

730 F.2d 1452, 1461 (Fed.Cir. 1984); Perkin-Elmer Corp. v. Com-

putervision Corp., 732 F.2d 888, 895-96 (Fed.Cir.), cert. denied, 469

U.S. 857 (1984); In re Piasecki, 745 F.2d 1468, 1471, 1475 (Fed.Cir.

1984); Fromson v. Advance Offset Plate, Inc., 755 F.2d 1549, 1556-58

(Fed.Cir. 1985); Ashland Oil, Inc. v. Delta Resins & Refractories, Inc.,

776 F.2d 281, 306 (Fed.Cir. 1985), cert. denied, 475 U.S. 1017 (1986);

Loctite Corp. v. Ultraseal Ltd., 781 F.2d 861, 873-74 (Fed.Cir. 1985);

Custom Accessories, Inc. v. Jeffrey-Allan Indus., 807 F.2d 955, 960-61

(Fed.Cir. 1986); Truswal Systems Corp. v. Hydro-Air Eng’g, Inc., 813

F.2d 1207, 1212 (Fed.Cir. 1987); Demaco Corp. v. F. Von Langsdorff

Licensing Lid., 851 F.2d 1387, 1391-92 (Fed.Cir.), cert. denied, 488

U.S. 956 (1988); Gillette Co. v. S.C. Johnson & Son, Inc., 919 F.2d 720,

725-26 (Fed.Cir. 1990).

''One commentator describes the patent in Alco Standard as “bla-

tantly invalid.” Adelman, The New World of Patents Created by the

Court of Appeals for the Federal Circuit, 20 U.Mich.J.L.Reform 979,

991 n.46 (1987).

1986), cert. denied, 480 U.S. 947 (1987); Uniroyal, Inc. v.

Rudkin-Wiley Corp., 837 F.2d 1044, 1053-54 (Fed.Cir.), cert.

denied, 488 U.S. 825 (1988)."

The Federal Circuit’s mistaken doctrine is well illustrated by

this case. Five published articles taught the claimed invention,

providing indisputable evidence of the content of the prior art. A

person of ordinary skill in the art would be charged with knowl-

edge of those articles.'* Modine’s argument that the Patriarca

articles were outside the scope of the relevant art was rejected by

the district court (App., p. A-16), and was refuted by the '034

patent itself, which includes heat exchanger technology for the

nuclear industry among “[t]he most pertinent prior art...”

(App., p. A-44). Modine also argued that heat exchangers used

in the nuclear industry have relatively thick tube sheets with no

flanges, and are much more dangerous than truck radiators if they

leak. These purported distinctions, however, have nothing to do

with the obviousness of the claimed invention: welding or brazing

one side of a joint for strength, and sealing the other side to

prevent leaks. The fact that Patriarca’s solution worked well — so

well that it was relied upon to prevent nuclear accidents — hardly

'2although a few panels of the Federal Circuit have held that the

patentee’s evidence of secondary considerations was insufficient to

overcome “very strong” cases of obviousness on the primary Graham

factors, those panels still held that secondary considerations must be

considered. See Newell Cos., Inc. v. Kenney Mfg. Co., 864 F.2d 757, 768-

69 (Fed.Cir. 1988), cert. denied, 110 S.Ct. 62 (1989); EWP Corp. v.

Reliance Universal Inc., 755 F.2d 898, 907-08 (Fed.Cir.), cert. denied,

474 U.S. 843 (1985); Merck & Co. v. Biocraft Laboratories, Inc., 874

F.2d 804, 809 n.* (Fed.Cir. 1989). In both Newel/ and Merck, there

were dissenting opinions arguing that secondary considerations should

have been given more weight. See Newell, 864 F.2d at 786-88 (New-

man, J., dissenting); Merck, 874 F.2d at 811 (Bissell, J., dissenting).

"In re Nilssen, 851 F.2d 1401, 1403 (Fed.Cir. 1988); In re Wood, 599

F.2d 1032, 1036 (C.C.P.A. 1979). Compare Graham, supra, 383 U.S.

at 19 (noting the remarkable rate of technological change over the

previous 50 years, and holding that patent applicants are “charged with

awareness of these changed conditions”).

made it /ess obvious as a means of preventing leaks in vehicular

radiators. '

Nevertheless, rather than decide the question of obviousness as

a matter of law, the trial court left that question to a general

verdict of the jury. The jury was instructed, in accordance with

the Federal Circuit’s rule, that it must consider “four factual

inquiries which factor into the test for obviousness” (i.e., the

three Graham factors plus secondary considerations). In ruling on

the post-trial motions, the district court did not apply the Graham

factors, except insofar as it rejected Modine’s arguments concern-

ing the scope of the relevant art. Rather, the district court

emphasized the importance of the secondary considerations

(App., p. A-16) and deferred to the jury:

“Considering the relevant field of prior art and al! objec-

tive evidence in a light most favorable to Modine, drawing all

reasonable inferences in favor of Modine, and abstaining

from substituting judicial judgment for that of the jury

regarding conflicting evidence, this Court is convinced that

reasonable jurors could have concluded that [ Allen] failed to

present clear and convincing evidence of obviousness.” App.,

pp. A-16 to A-17.

The Federal Circuit, in turn, upheld “the district court’s ruling

that a reasonable jury could conclude that the patent was not

“Modine argued that the aluminum radiator articles dealt with

methods of “repair,” as distinct from methods of manufacture, and

therefore were somehow irrelevant to the issue of obviousness. But the

district court correctly ruled as a matter of law that “the relevant pnor

art includes aluminum radiators...and radiator techniques.” App.,

p. A-16. Moreover, Modine’s argument ignored the fact that the ‘034

patent is for a construction, not a method or a process. The aluminum

radiator articles disclosed that construction, both as a result of the

original manufacturing process and as a result of repair. Likewise, the

‘034 patent refers to the use of a sealant to close leakage openings “that

occur either during the manufacturing process or in subsequent use.”

App., p. A-45 (emphasis added).

proven invalid by clear and convincing evidence.” App., p. A-3.'°

The Federal Circuit stated that, the “considerable prior art”

notwithstanding, “reasonable jurors could conclude” that the

invention was not obvious under the three criteria of section 103.

App., p. A-3. Under Graham, that issue should have been

determined by the court; but in any event, the jury was not asked

to apply the criteria of section 103 separately from commercial

success. The jury was instructed, as the law of the Federal Circuit

required, that the secondary considerations were a fourth factor

that it must weigh together with the statutory criteria.

Having held that the jury’s determination was conclusive, the

Federal Circuit also asserted, without elaboration, that “given

[the jury’s implied] findings,” the jury’s verdict was not incorrect

“even on de novo review.” App., p. A-3. But the court of appeals

did not identify the “implied findings” on which it relied, or

explain the nature of its “de novo review,” or indicate the weight

given to the secondary consideratiors in that review.'® The court

'*This was not an unusual disposition. From its creation in 1982

through 1988, the Federal Circuit affirmed three times as many jury

verdicts as it reversed. Coolley, What the Federal Circuit Has Done and

How Often: Statistical Study of the CAFC Patent Decisions — 1982 to

1988, 71 J. Pat. & Trademark Off. Soc’y 385, 397 (1989). When the

lower court decision upheld the validity of a patent, the Federal Circuit

in turn affirmed more than eight times as often as it reversed. /d. at 391.

One commentator described the situation as follows:

“There is a substantial risk that the combination of the nght to a

jury trial with the court’s [i.e., the Federal Circuit's] section 103

nonobviousness jurisprudence will enable patentees owning objec-

tively worthless patents to obtain large judgments from alleged

infringers. It would be tragic if the court’s desire to give patent law

the dignity it deserves should result in the subversion of the patent

system's goal — to encourage the creation and exploitation of

useful, new, and nonobvious inventions.”

Adelman, supra note 11, at 1006-07.

‘In Dennison Manufacturing Co. v. Panduit Corp. 475 U.S. 809

(1986) (per curiam), this Court granted certiorari, reaffirmed the

Graham test (id. at 810-11) and, “lack[ ing] the benefit of the Federal

Circuit's informed opinion on the complex issue of the degree to which

did not compare the indisputable disclosures of the published

prior art with the claims of the patent to determine whether the

“invention” would have been obvious to a person of ordinary skill

in the art. The closest the court came to analyzing the evidence

was to refer in passing to the “considerable prior art” which the

jury might have disregarded, and the “considerable objective [i.e.,

secondary] evidence” which the jury might have accepted.

Such obscurantism is not a proper discharge of the court’s

responsibilities under Graham. In no sense was the issue of

obviousness in this case resolved by the court as an issue of law.

Moreover, the Federal Circuit’s cursory disposition of this case

has a broader significance; it is the natural outcome of a rule that

elevates commercial success to a primary criterion of patentabil-

ity. By merging the purely factual and non-technical question of

commercial success with the predominantly legal questions posed

by section 103, the Federal Circuit has made the type of analysis

that this Court undertook in Graham obsolete.

The Federal Circuit’s doctrine of commercial success is not

merely contrary to the precedent of this Court; it is also based on

fallacious reasoning. The fact that some inventions are commer-

cially successful does not mean that commercial success denotes

invention. Inventions that are commercial failures may neverthe-

less be patentable.'’ Conversely, many “commercially successful”

products are neither novel nor patentabie; they owe their success

to obvious modifications of the prior art, or to considerations of

price, product quality, service, distribution channels, advertising,

the obviousness determination is one of fact,” remanded for further

proceedings (id. at 811). As demonstrated by the opinion below, that

“complex issue” is now completely obscured by the Federal Circuit's

doctrine of commercial success.

"Although it insists that commercial success is always evidence of

nonobviousness, the Federal Circuit inconsistently holds that the ab-

sence of commercial success or other secondary considerations is “a

neutral factor” — i.e., is never evidence of obviousness. Medtronic Inc. v.

Intermedics, Inc., 799 F.2d 734, 739 n.13 (Fed.Cir. 1986), cert. denied.

479 U.S. 1033 (1987).

consumer perception and the like.'* Such products may simply be

— as Mr. Saperstein said of his “invention” in this case — “at the

right place at the right time.” Indeed, if commercial success is to

become the touchstone of patentability, one may question why

patent rewards are needed to stimulate new inventions.'®

American patent law should not accept, as the criterion of

intellectually unique property, the mundane measure of commer-

cial success rather than the standard of scientific and technical

invention. Such a substitution would disregard the constitutional

component of patent law. As this Court said in Graham: “Innova-

tion, advancement, and things which add to the sum of useful

knowledge are inherent requisites in a patent system which by

constitutional command must ‘promote the Progress of . . . useful

Arts.’ ”” 383 U.S. at 6, quoting U.S.Const. art. I, § 8, cl. 8.

Commentators have sharply criticized the Federal Circuit's

reliance on secondary considerations, particularly commercial

success, to uphold patents that would otherwise fail the Graham

"See Great Atl. & Pac. Tea Co. v. Supermarket Equip. Corp., supra,

340 U.S. at 153 (“[t]o bring these devices together . . . was a good idea,

but scores of progressive ideas in business are not patentable .. .”’);

McClain v. Ortmayer, supra, 141 U.S. at 428 (noting that “the great

success” of the patentee’s products was “due, partly at least, to the fact

that he was the only one who made the manufacture of sweat pads a

specialty, that he made them of a superior quality, advertised them in

the most extensive and attractive manner, and adopted means of pushing

them upon the market. ..”).

"Recognizing that commercial success may be caused by factors

other than invention, the Federal Circuit has required a “nexus”

between the commercial success and the invention. See, e.g. Demaco

Corp. v. F. Von Langsdorff Licensing Lid. supra note 10, 851 F.2d at

1392. But this rule can lead only to speculation about what caused

customers to purchase the product, instead of the statutory considera-

tions of a comparison with prior art to determine whether the “inven-

tion” would have been obvious to persons of ordinary skill in the

pertinent art.

test.”° But the Federal Circuit’s deviation from the standards laid

down by this Court is no mere academic dispute. The results have

been a great increase in the number of patents upheld by the

courts;”’ many more patent infringement cases; huge patent

infringement judgments — from tens of millions of dollars to

See, e.g., Harris, The Emerging Primacy of “Secondary Considera-

tions” as Validity Ammunition: Has the Federal Circuit Gone Too Far?

71 J. Pat. & Trademark Off. Soc’y 185, passim, esp. 188-190, 195-197,

200-201 (1989) (Federal Circuit’s use of commercial success is directly

at odds with Graham); Merges, Commercial Success and Patent Stan-

dards: Economic Perspectives on Innovation, 76 Calif.L.Rev. 803, pas-

sim (1988) (arguing that the Federal Circuit’s “emphasis on

commercial success is fundamentally unsound” (at 806), and criticizing

the Federal Circuit’s use of a “spurious inferential bridge between

[commercial] success and significant invention” (at 874)); Sobel, The

Court of Appeals for the Federal Circuit: A Fifth Anniversary Look at Its

Impact on Patent Law and Litigation, 37 Am.U.L.Rev. 1087, 1089

(1988) (“circumstantial evidence of nonobviousness (such as commer-

cial success) has been elevated to possibly the most probative objective

indicia of nonobviousness, in contrast to the Supreme Court’s relegation

of such evidence to a ‘secondary’ category which ‘may be relevant’’”’);

Noie, A Critique of the Use of Secondary Considerations in Applying the

Section 103 Nonobviousness Test for Patentability, 28 B.C.L.Rev. 357,

359-360, 374-380 (1987) (commercial success “should never be given

any independent weight in evaluating nonobviousness” because it is not

relevant to the mind of one of ordinary skill in the art at the time of

invention).

*!See, e.g., Dunphy, Washington's Propatent Court, Chemical Week,

December 24, 1986, at 15; Andresky, A Weapon at Last, Forves,

March 10, 1986, at 46; Mack, A Change in the Legal Climate, Forbes,

October 7, 1985, at 41.

See, e.g., Sobel, supra note 20, at 1090; Corcoran, Likely Litigation;

Companies Wield Lawsuits as a Market-Development Tool, Sci. Am.,

March 1990 (vol. 262, no. 3), at 76.

almost $1 billion;”’ and vastly increased royalties.” In the case at

bar, the jury awarded Modine $56 million — the equivalent of a

112% royalty on sales — and Modine moved to treble that award

under 35 U.S.C. section 284. Even after being reduced by the trial

court, the damage award was the equivalent of a 28% royalty on

sales. These are staggering sums. Large, medium and small

corporations face financial disaster as a result of the loosened

standards for patent validity devised by the Federal Circuit.”

In Graham, this Court observed “a notorious difference be-

tween the standards applied by the Patent Office and by the

courts,” resulting in part from “the free rein often exercised by

the Examiners in their use of the concept of ‘invention.’”

383 U.S. at 18. Now as then, Patent Office proceedings are ex

parte. Some patents issue after a cursory examination, while

others (including the ’034 patent) issue on the basis of question-

able distinctions after repeated rejection. By its commercial

success doctrine, the Federal Circuit has itself adopted the

“relaxed standard” that Graham condemned (see 383 US. at

19), and crippled judicial review of patent monopolies.

Because the Federal Circuit has exclusive appellate jurisdiction

in patent cases, 28 U.S.C. § 1292(c), the corrective influence of

decisions from sister circuits has been absent. It is true that the

See, e.g., Work, Inventors’ Just Rewards, U.S. News and World

Rep., March 3, 1986, at 43; Baldo, Juries Love the Patent Holder,

Forbes, June 17, 1985, at 147.

*4Pier, The Surprising Power of Patents, Fortune, June 23, 1986, at 57.

In light of the Federal Circuit’s pro-patent record, an increase in

licensing and in the amount of royalties per license is explainable as an

attempt to minimize potential costs. See, e.g., Alster, New Profits from

Patents, Fortune, April 25, 1988, at 185; Wiegner, When the Going Gets

Tough, the Tough Go To Court, Forbes, December 28, 1987, at 36.

5Domestic enterprises are increasingly at risk. In fiscal years 1989

and 1990, foreigh applicants were issued approximately 46.6% of all

U.S. patents, with each of five Japanese companies outstripping any

U.S. company in the number of U.S. patents obtained in fiscal year

1990. Foreign Patent Share Rise Levels Off, Inside R & D, February 20,

1991, at 2.

Federal Circuit was created partly for the purpose of having

patent appeals decided by judges familiar with scientific and

technical concepts. But deference to the Federal Circuit as a

specialized tribunal is wholly inappropriate where that court has

failed to apply the scientific criteria of section 103, and substi-

tuted a nonscientific test of commercial success.

Only this Court can, and we submit that it should, stop the

systematic flouting of its own precedents. As to the merits of the

different positions of this Court and the Federal Circuit, while we

have submitted reasons why the Graham decision is correct and

the Federal Circuit is manifestly wrong, that question should be

decided by this Court.

CONCLUSION

For the reasons stated, the petition for a writ of certiorari

should be granted.

Respectfully submitted,

ALLAN N. LITTMAN

C. DOUGLAS FLOYD

(Counsel of Record)

JOHN M. GRENFELL

JOHN O. HORSLEY

PAUL H. HELLER

MICHAEL J. LENNON

Attorneys for Petitioner

PILLSBURY, MADISON & SUTRO

Of Counsel

KENYON & KENYON

Of Counsel

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A-1l

Appendix A

United States Court of Appeals

for the Federal Circuit

90-1204, -1210

MODINE MANUFACTURING COMPANY,

Plaintiff /Cross-Appellant,

THE ALLEN GROUP, INC., d/b/a

THE G & O MANUFACTURING COMPANY,

Defendant-Appellant.

DECIDED: October 22, 1990

Before MARKEY, Circuit Judge, MILLER, Senior Circuit

Judge, and MICHEL, Circuit Judge.

MICHEL, Circuit Judge.

This case involves consolidated appeals concerning a Janu-

ary 19, 1990 final judgment of the United States District Court

for the Northern District of California, No. C-85-6946, entered in

response to jury verdicts that The Allen Group, Inc. had willfully

infringed Modine Manufacturing Company’s U.S. Patent No.

4,529,034 (for a heat exchanger used in vehicle radiators), and

that the patent was not invalid or unenforceable. Modine Manu-

facturing Co. v. Allen Group, Inc., 14 USPQ2d 1210 (N.D.Cal.

1989) (denial of post-trial motions of both parties). Allen appeals

the district court’s refusal to overturn the jury’s verdicts. Modine

cross-appeals the denial of its motions for enhanced damages and

attorney fees. We affirm the rulings contested in both appeals.

BACKGROUND

Modine commenced this action in September, 1985 alleging

that Allen’s sales of the “Ultra-Fused” radiator infringed

Modine’s U.S. Patent No. 4,529,034, which claimed a vehicle

radiator having certain construction of welded tube-to-header

A-2

joints. Allen counterclaimed for a declaration of patent invalidity

and unenforceability, unfair competition, and violation of the

Sherman Act. In the spring of 1989 the case was tried to a jury,

which returned special verdicts finding that Allen had failed to

prove by clear and convincing evidence that the patent was

invalid, or that it was unenforceable for inequitable conduct. The

jury also found that Modine had proven by clear and convincing

evidence that Allen’s infringement had been willful, and in a

separate damages phase, returned a verdict of $55,634,153 in

favor of Modine.

Allen moved for judgment notwithstanding the verdict and for

a new trial, and Modine moved for increased damages, for

attorney fees and for prejudgment interest. The district court

denied Allen’s motion for JNOV, but held the damage award

excessive and ordered a new trial on damages unless Modine

accepted a remittitur to $14,000,000. Modine, 14 USPQ2d at

1221. The court awarded prejudgment interest to Modine, but

denied its motions for enhanced damages and for attorney fees.

Id. at 1217, 1222. Modine accepted the remittitur, and the court

entered final judgment on January 19, 1990.

The district court had jurisdiction to hear the complaint under

28 U.S.C. § 1338 (1988), and we have jurisdiction to hear both

appeals pursuant to 28 U.S.C. § 1295(a)(1) (1988).

DISCUSSION

Allen argues that the jury erred in finding Modine’s patent not

to be valid under 35 U.S.C. § 103 because at the time the

invention was made, the subject matter as a whole would have

been obvious to a person of ordinary skill in the art. Although

obviousness is a question of law, Panduit Corp. v. Dennison Mfg.

Co., 810 F.2d 1561, 1568, 1 USPQ2d 1593, 1597 (Fed. Cir.),

cert. denied, 481 U.S. 1052 (1987), it is based upon underlying

factual inquiries which are issues for the trier of fact. See Loctite

Corp. v. Ultraseal Litd., 781 F.2d 861, 872, 228 USPQ 90, 97

(Fed. Cir. 1985). These factual issues are: (1) the scope and

content of the prior art, (2) the differences between the most

A-3

pertinent prior art and the claimed invention, (3) the level of

ordinary skill in the art, and (4) the objective evidence of

secondary considerations of nonobviousness. Jd. at 872, 228

USPQ at 97.

Our review of a denial of JNOV is limited to whether the jury’s

factual determinations were supported by substantial evidence

and, if they were, whether “those findings cannot support the legal

conclusions which necessarily were drawn by the jury in forming

its verdict.” Verdegaal Bros., Inc. v. Union Oil Co., 814 F.2d 628,

631, 2 USPQ2d 1051, 1052 (Fed. Cir.), cert. denied, 484 U.S.

827 (1987). See Perkin-Elmer Corp. v. Computervision Corp.,

732 F.2d 888, 893, 221 USPQ 669, 673 (Fed. Cir.), cert. denied,

469 U.S. 857 (1984). Here, while considerable prior art existed at

the time Modine’s invention was made, reasonable jurors could

conclude that the differences between the prior art and the

claimed invention were significant enough to render the invention

nonobvious to one of ordinary skill in the art. Moreover, consider-

able objective evidence of nonobviousness, in the form of long-felt

but unmet need and resulting commercial success, was presented

in this case. We can therefore only conclude that the jury’s

implied findings relating to obviousness were supported by sub-

stantial evidence. See Newell Companies, Inc. v. Kenney Mfg. Co.,

864 F.2d 757, 765, 9 USPQ2d 1417, 1423 (Fed. Cir. 1988) (in

ruling on a motion for JNOV, “[j]udges must accept the factual

findings, presumed from a favorable jury verdict, which are

supported under the substantial evidence/reasonable juror

standard.”’).

Nor, given those findings, was its conclusion on obviousness

incorrect, even on de novo review. Id. at 764, 9 USPQ2d at 1423.

Accordingly, we hold that Allen has failed to demonstrate error as

a matter of law in the district court’s ruling that a reasonable jury

could conclude that the patent was not proven invalid by clear and

convincing evidence.

Allen also contends that the trial court erred in determining

that Modine’s patent was not unenforceable for inequitable con-

duct in the prosecution of the patent application. The ultimate

question of whether inequitable conduct occurred is equitable in

nature, committed to the discretion of the trial court, and will not

A-4

be overturned by this court unless it is clear that the determina-

tion is based upon a jury’s findings of fact that are unsupported by

substantial evidence or “a misapplication or misinterpretation of

applicable law or that the ruling evidences a clear error of

judgement on the part of the district court.” Kingsdown Medical

Consultants, Ltd . v. Hollister Inc., 863 F.2d 867, 876, 9 USPQ2d

1384, 1392 (Fed. Cir. 1988) (in banc), cert. denied, 109 S. Ct.

2068 (1989) (quoting PPG Indus. v. Celanese Polymer Special-

ties Co., 840 F.2d 1565, 1572, 6 USPQ2d 1010, 1016 (Fed. Cir.

1988) (Bissell, J., additional views) (discussing Seattle Box Co.

v. Industrial Crating & Packaging Inc., 756 F.2d 1574, 1581, 225

USPQ 357, 363 (Fed. Cir. 1985))). Establishing inequitable

conduct for submitting false information, or for failing to disclose

information to the Patent and Trademark Office (PTO) during

the prosecution of the patent application requires proof by clear

and convincing evidence of two facts: that the information was

material and that the patentee acted with intent to deceive.

Kingsdown, 863 F.2d at 872, 9 USPQ2d at 1389.

In this case Modine was accused of failing to disclose to the

PTO information as to its own prior art research in radiator design

and of concealing the fact that the named inventor, Mr. Saper-

stein, actually had the help of unnamed co-inventors. At trial,

Modine presented evidence tending to show that any failure to

disclose was inadvertent, and that in any case the inventor would

have had no motive to intentionally lie about inventorship because

the company would own any patent that might (and did) issue.

Moreover, the persons accused of inequitable conduct actually

testified as witnesses, and the jury’s assessment of their character

and credibility is entitled to great deference. Allen has failed to

demonstrate that the determination that it failed to prove inequi-

table conduct was an abuse of discretion.

Allen further argues that the jury instructions constituted

reversible error, first, because they submitted the issue of inequi-

table conduct to the jury, and second, because they contained an

incorrect legal test for determining whether inequitable conduct

had occurred (gross negligence is not enough for intent to

deceive). Allen, however, failed to object at trial to these instruc-

A-5

tions,' and “[nJo party may assign as error the giving or the

failure to give an instruction unless that party objects thereto

before the jury retires to consider its verdict.” Fed. R. Civ. P. 51

(emphasis added). Allen contends that an objection to the

instructions was unnecessary since it had made clear in prior

communications to the court its position that inequitable conduct

was not a jury issue. It cites Brown v. Avemco Inv. Corp., 603

F.2d 1367 (9th Cir. 1979) and Martinelli v. City of Beaumont,

820 F.2d 1491 (9th Cir. 1987), for the proposition that a formal

objection is not necessary when the trial court has been made

aware of a party’s position. Brown and Martinelli, however, are

inapposite.

In Brown and Martinelli, both parties had submitted contradic-

tory proposed jury instructions and the trial judge had explicitly

rejected one over the other. The Ninth Circuit judge held that in

such a situation an objection to an instruction was not necessary

under Rule 51 because the trial court had been made aware of the

losing party’s verbatim position as set forth in its contrary pro-

posed instruction, and an additional objection would not have

served to further focus the issue or change the court’s mind.

Brown, 603 F.2d at 1373; Martinelli, 820 F.2d at 1493-94. Here,

on the other hand, the jury instructions proposed by the parties

were not so diametrically opposed as to present Allen’s position

for the court. We simply do not believe the three earlier instances

in which Allen claims to have made the trial court generally

aware of its position constituted the sort of pattern of specific

objection throughout the course of the trial, including the jury

instruction phase, that was present in Brown and Martinelli. We

hold that Allen’s failure to object precludes it under Rule 51, Fed.

R. Civ. P., from now challenging the jury instructions, both as to

their submission of the ultimate question of inequitable conduct

to the jury and as to their content indicating that gross negligence

' The trial judge’s opinion notes that Allen’s only objection to the jury

instructions was to “a portion of the instruction on willfu! infringement.”

Modine, 14 USPQ2d at 1215.

A-6

was not sufficient to show intent.’ Therefore, we need not reach

the ments of Allen’s contentions.

Modine appeals the district court’s denial of its motion for

enhanced damages pursuant to 35 U.S.C. § 284 (1988). Section

284 provides that in a patent infringement case, a trial court “may

increase the damages up to three times the amount found or

assessed.” The decision to increase damages is committed to the

discretion of the trial judge and a district court's refusal to award

increased damages will not be overturned absent a clear showing

of abuse of discretion. Rite-Hite Corp. v. Kelley Co., 819 F.2d

1120, 1126, 2 USPQ2d 1915, 1919 (Fed. Cir. 1987).

Modine seeks to overcome the difficult abuse of discretion

standard of review by arguing that the trial judge’s decision not to

award enhanced damages disregards the jury’s factual determina-

tion that the infringement was willful. This argument conve-

niently ignores our clear precedent that a finding of willful

infringement merely authorizes, but does not mandate, an award

of increased damages. /d. at 1126. 2 USPQ2d at 1919; Kloster

Speedsteel AB v. Crucible Inc., 793 F.2d 1565, 1581, 230 USPQ

81, 91 (Fed. Cir. 1986), cert. denied, 479 U.S. 1034 (1987). Nor

is there merit to Modine’s contention that the trial judge’s

statement, that willfulness was “sufficiently close on the evi-

? Since Rule 51 requires an objection to the giving or failing to give an

instruction, and since an issue is only given to the jury via an instruction,

Rule 51 necessarily requires an objection to what issues are given to the

jury in the first place.

This result is also consistent with Rule 39(c), which allows a trial by

jury, even where not available as of right, when both parties consent. As

the district judge correctly observed, failure to object is treated as

consent: “If one party demands a jury, the other party does not object,

and the court orders trial to a jury, this will be regarded as trial by

consent. If there is trial to a jury by consent, the verdict has the same

effect as if trial by jury had been a matter of right and cannot be treated

as advisory only.” Modine, 14 USPQ2d at 1215 (quoting 9 C. Wright &

A. Miller, Federal Practice and Procedures § 2333 (1971)).

A-7

dence” that enhanced damages were not warranted, was inconsis-

tent with the verdict that willful infringement had been shown by

“clear and convincing evidence.” Far from ignoring the jury’s

verdict, Judge Jensen’s opinion demonstrated that he carefully

considered the finding of willful infringement in light of the

deterrent function of enhanced damages in reaching his determi-

nation that enhanced damages were not appropriate to this

particular case. Modine has utterly failed to demonstrate that this

determination was an abuse of discretion.’

With regard to Modine’s appeal of the denial of its motion for

attorney fees, a trial court has the authority to award attorney fees

in patent litigation to the prevailing party “in exceptional cases.”

35 U.S.C. § 285 (1988). An express finding of willful infringe-

ment is a sufficient basis for classifying a case as “exceptional,”

and indeed, when a trial court denies attorney fees in spite of a

finding of willful infringement, the court must explain why the

case is not “exceptional” within the meaning of the statute. S.C.

Johnson & Son, Inc. v. Carter-Wallace, Inc., 781 F.2d 198, 201,

228 USPQ 367, 369 (Fed. Cir. 1986). Nevertheless, the decision

whether or not to award fees is still committed to the discretion of

the trial judge, and “[e]ven an exceptional case does not require

in all circumstances the award of attorney fees.” Jd. at 201, 228

USPQ at 369.

Modine argues that the district court abused its discretion by

failing to act on the jury’s finding of willful infringement. How-

ever, consistent with our statement in S.C. Johnson that “[t]he

trial judge is in the best position to weigh considerations such as

the closeness of the case, the tactics of counsel, the conduct of the

* Modine also argues that the trial judge erred in not considering any

form of enhanced damages less than treble damages. This contention is

unpersuasive for three reasons: First, Modine itself specifically requested

treble damages in its motion, so it is natural that the opinion should

discuss trebling. Secondly, the fact that the court’s opinion focuses upon

treble damages does not necessarily mean that the judge failed to

consider lesser multiples of damages. Finally, Modine’s brief in support

of its motion for increased damages specifically advised the court that

willfulness could justify damages of up to three times lost profits or

reasonable royalty. Joint Appendix at 966.

A-8

parties, and any other factors that may contribute to a fair

allocation of the burdens of ligation [sic] as between winner and

loser,” Jd. at 201, 228 USPQ at 369, Judge Jensen expressly

articulated the basis of his determination that this case, though

“exceptional” under section 285, does not justify an award of

attorney fees. Modine, 14 USPQ2d at 1221 . This explanation was

both reasonable and specifically expressed, and Modine’s conten-

tion that it amounts to an abuse of discretion is completely

without foundation.

CONCLUSION

The judgment of the district court and its rulings on post-trial

motions are affirmed.

AFFIRMED

A-9

United States Court of Appeals

for the Federal Circuit

90-1204, 1210

MODINE MANUFACTURING COMPANY,

Plaintiff/Cross-Appellant,

Vv.

THE ALLEN GROUP, iNC., d/b/a

THE G & O MANUFACTURING COMPANY,

Defendant-Appellant.

JUDGMENT

On Appeal from the United States District Court for the

Northern District of California

in Case No(s). 85-6946

This CAUSE having been heard and considered, it is

ORDERED and ADJUDGED:

AFFIRMED.

ENTERED BY ORDER OF THE

COURT

FRANCIS X. GINDHART

Francis X. Gindhart, Clerk

DATED OCT. 22, 1990

ISSUED AS A MANDATE: December 26, 1990

A-10

Appendix B

United States Court of Appeals for the Federal Circuit

90-1204

MODINE MANUFACTURING COMPANY,

Plaintiff-Appellee,

THE ALLEN GROUP, INC., d/b/a

THE G & O MANUFACTURING COMPANY,

Defendant-Appellant.

ORDER

Before Markey, Circuit Judge, Miller, Senior Circuit Judge,

and Michel, Circuit Judge.

A petition for rehearing having been filed in this case, and a

response thereto having been invited by the court and filed,

UPON CONSIDERATION THEREOF, it is

ORDERED that the petition for rehearing be, and the same

hereby is, denied.

The mandate will issued [sic] on December 26, 1990.

FOR THE COURT,

Dated: December 17, 1990

FRANCIS X. GINDHART

Francis X. Gindhart

Clerk

A-11

Appendix C

United States District Court

Northern District of California

MODINE MANUFACTURING CO.,

Plaintiff,

Vv.

THE ALLEN GROUP, INC., d/b/a

THE G & O MANUFACTURING CO.,

Defendant.

C-85-6946-DLJ

ORDER

On August 24, 1989, this Court heard defendant’s motion for

judgment notwithstanding the verdict (“JNOV’”) or new trial on

liability and damages, and plaintiff's motion for increased dam-

ages, attorneys’ fees, and prejudgment interest. Michael J. Len-

non, Charles R. Ragan, Allan N. Littman, John M. Grenfell, Pau!

H. Heller, Thomas Hickey, and John Horsley appeared for

defendant. Richard J. Hoskins, George M. Schwab, Lee F.

Grossman, and Walter E. Pavlick appeared for plaintiff.

For the following reasons, this Court: (1) DENIES defendant’s

motion for JNOV; (2) GRANTS defendant’s motion for new

trial, but only on the issue of damages and only on the condition

that a remittitur is not accepted; (3) DENIES plaintiff's motion

for increased damages and attorneys’ fees; and (4) GRANTS

plaintiff's motion for prejudgment interest.

I. INTRODUCTION

On July 16, 1985, the United States Patent and Trademark

Office issued patent number 4,529,034 (“the ‘034 patent”), for

vehicle radiators, which covered construction of tube-to-header

joints in a radiator by means of welding on the water side of the

joint and soldering on the air side of the joint. Modine, the owner

of the patent, manufactured and sold a “Beta-Weld” radiator

based on this patent. On September 13, 1985, Modine filed suit

A-12

against G & O, a division of the Allen Group, claiming that

G &O infringed its patent by making and selling its “Ultra-

Fused” radiator and that the infringement was willful.

The trial commenced on March 13, 1989, with separate liability

and damages phases. At the liability phase, the jury was presented

with two core issues: (1) whether G & O proved by clear and

convincing evidence that Modine’s patent is invalid; and (2) if the

patent is valid, whether Modine proved by clear and convincing

evidence that G & O’s infringement was willful. General and

special verdicts on these issues were presented to the jury.

On April 21, 1989, after a six-week trial on liability, the jury

returned special verdicts finding the patent valid and enforceable.

The jury found that G & O had failed to prove by clear and

convincing evidence: (1) that each claim of the ’034 patent was

anticipated by a single piece of prior art; (2) that the subject

matter of the ’034 patent, taken as a whole, would have been

obvious to a person of ordinary skill in the art at the time the

patent was made; (3) that Modine’s inventor, Phil Saperstein,

knew he was not the inventor of all the claims of the patent and

that he intended to deceive the Patent Office when he signed the

original oath as sole inventor and when he obtained the Certificate

of Correction; (4) that Modine offered to sell the radiator

described in the claim of the patent more than one year before it

applied for the patent; and (5) that during the prosecution of the

patent, Modine’s agents intentionally or recklessly misrepre-

sented, or intentionally or recklessly failed to disclose, to the

Patent Examiner any information known to be material regarding

the patent in suit. The jury further found that Modine had proved

by clear and convincing evidence that G & O’s infringement of

the ’034 patent was willful.

On May 8, 1989, at the conclusion of the damages phase of the

trial, the jury returned special verdicts finding that Modine had

proved by a preponderance of the evidence: (1) that it would have

sold 95 percent of the infringing G & O radiators, which were sold

by G & O after the ’034 patent was issued; (2) that G & O is to

compensate Modine for lost profits in the amount of $54,864,730;

and (3) that a royalty rate of 28 percent is to be assessed against

A-13

G & O manufacturing as a reasonable royalty during the period of

infringement.

On June 15, 1989, defendant’s filed a motion for JNOV cr,

alternatively, a motion for a new trial, on grounds that the patent

is invalid and unenforceable. Defendant argues the patent is

invalid because Modine’s invention was obvious, because it was

offered for sale more than one year before the patent application,

and because Modine engaged in inequitable conduct before the

Patent Office. Defendant argues the patent is unenforceable

because the jury’s finding of willfulness is not supported by

substantial evidence. In addition, defendant asks this Court to set

aside the total damage award of $55,634,153 on grounds that it is

speculative and grossly excessive.

On June 6, 1989, plaintiff filed a motion for increased damages,

attorneys’ fees, and prejudgment interest. On August 22, 1989,

plaintiff filed a motion for immediate entry of judgment. This

Court entered judgment under seal on August 28, 1989, but

stayed execution of the judgment.

Il. STANDARD OF REVIEW

A. JNOV Motion

A JNOV is proper if “the evidence permits only one reasonable

conclusion as to the verdict....It is improper if reasonable

minds could differ over the verdict.” Sjolund v. Musland, 847

F.2d 1573, 1577 (Fed. Cir. 1988). In considering a motion for

JNOV, the trial court must: (1) consider all evidence presented

at trial; (2) in a light most favorable to the nonmoving party;

(3) draw all reasonable inferences in favor of the nonmoving

party; (4) without determining the credibility of witnesses; and

(5) without substituting its choice for that of the jury as between

conflicting evidence. Verdegaal Bros. Inc. v. Union Oil Co. of

California, 814 F.2d 628, 631 (Fed. Cir. 1987). The trial court

must adhere to the verdict of the jury unless, after applying these

constraints, it is firmly convinced that reasonable persons could

not have reached the verdict returned by the jury. Perkin-Elmer

A-14

Corp. v. Computervision Corp., 732 F.2d 888, 893 (Fed. Cir.

1984).

B. New Trial Motion

If there has been sufficient evidence, as described above,

presented at trial to create an issue for the jury to decide, the trial

court may not grant a JNOV. However, the existence of evidence

sufficient to deny a JNOV motion does not prevent the court from

granting a new trial, “if the verdict is contrary to the clear weight

of the evidence, or is based upon evidence which is false, or to

prevent, in the sound discretion of the trial judge, a miscarriage of

justice.” Richardson v. Suzuki Motor Co., Ltd., 868 F.2d 1226,

1245 (Fed. Cir. 1989) (quoting Hanson v. Shell Oil Co., 541 F.2d

1352, 1359 (9th Cir. 1976), cert. denied, 429 U.S. 1974 (1977)).

Although the judge may weigh the evidence and assess the

credibility of witnesses, and need not view the evidence in a light

most favorable to the moving party, “a decent respect for the

collective wisdom of the jury, and for the function entrusted to it

in our system, certainly suggests that in most cases the judge

should accept the findings of the jury, regardless of his own

doubts in the matter.” Landes Constr. Co., Inc. v. Royal Bank of

Canada, 833 F.2d 1365, 1371 (9th Cir. 1987) (quoting 11 C.

Wright & A. Miller, Federal Practice and Procedure § 2806 at 48-

49 (1973)). If, on the other hand, having given full respect to the

jury’s findings and reviewed the entire evidence, the judge “‘is left

with the definite and firm conviction that a mistake has been

committed,” a new trial should be granted. Jd. at 1372 (quoting

11 C. Wright & A. Miller, supra, § 2806 at 48-49).

III. DEFENDANT’S MOTION FOR JNOV OR NEW

TRIAL ON LIABILITY

A. Obviousness

On April 21, 1989, the jury returned a special verdict on the

issue of obviousness and found that G & O had failed to prove by

clear and convincing evidence that the subject matter of the 034

patent, taken as a whole, would have been obvious to a person of

ordinary skill in the art at the time the patent was made.

A-15

G & O contends that it is entitled to a JNOV or new trial on

the issue of obviousness. Urging this Court to avoid taking a

restrictive view of what constitutes relevant prior art, Graham v.

John Deere Co., 383 U.S. | (1966), G & O argues it has

produced evidence of specific prior art, within the relevant field of

art, which renders Modine’s patent obvious and therefore invalid.

This evidence includes brazed or welded aluminum automotive

radiators, heat exchangers used in nuclear plants, oil coolers and

filler necks that are welded on one side and soldered on the other,

and repair techniques used to seal leaks in tube-to-header joints in

heat exchangers. G & O further argues that the secondary

considerations of “long felt need” and “commercial success,”

supported by evidence introduced by Modine, do not overcome

the obviousness of Modine’s patent. Newell Companies Inc. v.

Kenney Mfg. Co., 864 F.2d 757 (Fed. Cir. 1988).

Modine argues in response that G & O’s entire discussion of

obviousness is nothing more than a selection of certain evidence

and a reargument of its significance, in isolation from other,

contradictory evidence. Modine complains that G & O is asking

the Court to review de novo an issue as to which it failed to

sustain its burden of proof by clear and convincing evidence at

trial.

Modine relies on several arguments to rebut G & O’s claim that

the following categories of prior art are relevant and render the

patent obvious. First, Modine contends that the testimony pro-

vided by Mr. Weltman on aluminum heat exchangers was uncor-

roborated, obviously not believed by the jury, and cannot provide

the basis for a JNOV because it calls upon the Court to make an

impermissible credibility assessment. Second, Modine contends

that the evidence at trial established that one involved in develop-

ing a stronger heavy-duty truck radiator would not reasonably

look to heat exchangers in nuclear reactors for relevant solutions,

given the differences in materials used, financial constraints, types

of heat exchangers manufactured, and safety considerations.

Third, Modine contends that because G & O presented no proof

that the oil coolers in quesuon were sold in the United States,

they cannot be considered prior art, as G & O itself acknowledged

in an in limine motion. Fourth, Modine contends that filler necks

A-16

are not relevant prior art because they are significantly different

from the Beta-Weld radiators produced by Modine.

Modine also contends that G & O’s argument on long felt need

and commercial success misinterprets the law. Modine argues

that the objective considerations, or secondary considerations,

must be considered in all cases regardless of the evidence of prior

art presented. Stratoflex, Inc. v. Aeroquip Corp., 713 F.2d 1530,

1538-39 (Fed. Cir. 1983).

Modine further contends that G & O’s argument avoids ad-

dressing the abundant evidence on these points. Modine notes

that the record amply supports: (1) the long felt need in the

industry for a highly durable and dependable radiator, with a life

span of 50,000 to 100,000 miles; (2) the commercial success of

the Modine Beta-Weld radiator and the G&O Ultra-Fused

radiator, and (3) the nexus between the commercial success of

the Beta-Weld radiator and the meeting of the long felt need.

Modine adds that the evidence of copying, unexpected results,

skepticism about the invention, and laudatory statements by

G &O, all objective indicia of nonobviousness which G & O

chooses to ignore, strongly suggests that the invention was not

obvious.

Based on Stratoflex, this Court agrees with plaintiff that secon-

dary considerations must, when present, be considered with all the

evidence in the determination of obviousness, and noi just when a

doubt remains after reviewing the prior art. 713 F.2d at 1538-39.

On the other hand, this Court agrees with defendant that

restricting the scope of the applicable prior art to the heavy truck

industry or to copper/brass welding and soldering is not justified

by the case law and the scientific context of the invention. The

Court further agrees that the relevant prior art includes aluminum

radiators, heat exchangers in the nuclear industry, oil coolers,

filler necks, and repair techniques. However, in the opinion of the

Court this prior art simply defines the relevant field of inquiry and

leaves open the question of whether any particular piece of prior

art teaches or suggests the invention.

Considering the relevant field of prior art and all objective

evidence in a light most favorable to Modine, drawing all reason-

ani,

A-17

able inferences in favor of Modine, and abstaining from substitut-

ing judicial judgment for that of the jury regarding conflicting

evidence, this Court is convinced that reasonable jurors could

have concluded that G & O failed to present clear and convincing

evidence of obviousness. Accordingly, G & O’s motion for JNOV

on the issue of obviousness is DENIED. G & O’s motion for a

new trial is also DENIED on grounds that the verdict is not

contrary to the clear weight of evidence.

A. On Sale

The jury also returned a special verdict regarding the on sale

issue and found that G & O had failed to prove by clear and

convincing evidence that Modine placed the radiator described in

the claim of the patent on sale more than one year before it

applied for the patent.

G & O contends that the ’034 patent is invalid because Modine

placed its Ferrofuse stainless steel radiator, which used tube-to-

header joints welded on one side with epoxy sealant on the other

side, “on sale” to the Ford Motor Company in the summer of

1977. Specifically, G & O maintains that as part of a radiator

design contest for Ford’s 1980 model truck program, Modine

submitted a proposed copper/brass radiator after: (1) price

guidelines were internally established by Modine; (2) Modine

had given Ford estimated prices; (3) Modine had proposed an

initial delivery of 40 radiators in the first month; (4) Ford had

asked for a firm proposal; and (5) Modine had provided Ford

with test data for three field-tested stainless steel radiators re-

paired with epoxy. G & O concludes that this evidence demon-

strates the radiators were offered for sale to Ford, were in a

sufficiently tangible form to fulfill their intended purpose, and

were therefore “reduced to practice.” General Electric Co. v.

United States, 654 F.2d 55, 62 (Ct. Cl. 1981).

Modine argues that the stainless steel radiator was not on sale

because Modine never developed it to a stage where it would work

or could be considered an acceptable radiator. UMC Electronics

Co. v. United States, 816 F.2d 647, 656 (Fed. Cir. 1987). Modine

maintains that the project was a failure because it could never get

a leak-tight weld and, when Modine ined repairing leaks with

ae F

A-18

epoxy, the epoxy delaminated and would not adhere to the

stainless steel.

In addition, Modine argues that there was no sale to Ford

because Modine proposed only to sell conventional soldered

copper/brass radiators. The stainless steel concept was appended

to the proposal as a possible alternate design, but this represented

merely a research idea. Indeed, the stainless steel project, which

disappeared when Ford granted Modine a contract for the con-

ventional soldered copper/brass radiator, never passed any level of

Ford Engineering’s three test levels, never received a Ford Engi-

neering release, was never presented to Ford Purchasing for a

release, and thus never reached the stage of order solicitation by

Ford to Modine. Modine further notes that the “price and cost”

information in the proposal only suggested ballpark costs, and did

not constitute a quoted selling price, because, as testimony at trial

revealed, “price and costs are one and the same as far as Ford is

concerned.”

Considering this evidence in a light most favorable to Modine,

drawing all reasonable inferences favorable to Modine, and with-

out making any credibility determinations, this Court is convinced

that reasonable jurors could have found in light of the evidence

that G&O failed to prove its “on-sale” claim by clear and

convincing evidence. Accordingly, G & O’s motion for JNOV

regarding the on sale issue is DENIED. G & O’s motion for a

new trial is also DENIED on grounds that the verdict is not

contrary to the clear weight of the evidence. Having weighed the

evidence and assessed the credibility of witnesses, this Court is

not left with the definite and firm conviction that a mistake has

been committed.

B. Inequitable Conduct

The jury also returned a special verdict on the issue of inequita-

ble conduct and found that G & O had failed to prove by clear

aid convincing evidence that during the prosecution of the patent,

Modine’s agents intentionally or recklessly misrepresented, or

intentionally or recklessly failed to disclose, to the Patent Exam-

iner any information known to be material regarding the patent in

suit.

A-19

As an initial matter, G & O argues that a JNOV or new trial is

warranted because the jury was not properly instructed with

respect to the state of mind required for a finding of inequitable

conduct under Kingsdown Medical Consultants, Ltd. v. Hollister

Inc., 863 F.2d 867 (Fed. Cir. 1988) (en banc) and Hewlett-

Packard Co. v. Bausch & Lomb Inc., 882 F.2d 867 (Fed. Cir.

1989). Pursuant to its reading of Kingsdown, the Court instructed

the jury that in order to find inequitable conduct the jury must

find that the conduct at issue was carried out intentionally or

recklessly.

In Kingsdown, the court considered the issue of the requisite

state of mind for inequitable conduct and held that

a finding that particular conduct amounts to ‘gross negli-

gence’ does not of itself justify an inference of intent to

deceive; the involved conduct, viewed in light of all the

evidence, including evidence indicative of good faith, must

indicate sufficient culpability to require a finding of intent to

deceive. -

863 F.2d at 876. It is apparent to this Court that Kingsdown

eliminates gross negligence as a sufficiently culpable state of mind

to support a finding of inequitable conduct. To the extent that

prior law held a finding of gross negligence sufficient to support a

finding of inequitable conduct, that law is reversed by Kingsdown.

After Kingsdown, a person prosecuting a patent application,

owing a duty of candor to the Patent Office, who is grossly

negligent in misrepresenting or omitting to disclose a material fact

to the Patent Office is not guilty of inequitable conduct. Culpable

conduct must be accompanied by a state of mind, on the contin-

uum from accident to intent, that is higher than gross nesligence.

In the opinion of this Court, Kingsdown does not limit that state

of mind to a specific intent to deceive, but rather reaches a state

of mind that is equivalent to intentional conduct by recognizing

that conduct which indicates “sufficient culpability to require a

finding of intent to deceive” may support a finding of inequitable

conduct. In traditional analysis, recklessness is seen as the

equivalent of intent where an equivalent is recognized. This Court

therefore concludes that after Kingsdown the requisite state of

A-20

mind is either intent or recklessness, and that gross negligence is

not sufficient.

The Court rejects defendant’s position that gross negligence

survives Kingsdown and Hewlett-Packard as a sufficient mental!

state for inequitable conduct. Acknowledging that “gross neghi-

gence” covers a wide range of culpable conduct, the court in

Hewlett-Packard opined that although circumstantial evidence of

gross negligence may, based on the totality of circumstance,

permit an inference of intent, inequitable conduct ultimately

requires a finding of intent to mislead or deceive. Thus, contrary

to defendant’s contention, Hewlett-Packard does not require this

Court to alter its reading of Kingsdown. Like Kingsdown, the

court in Hewlett-Packard makes clear that something more than a

finding of gross negligence is required for inequitable conduct.

This Court concludes that at minimum a finding of recklessness is

required.

Next, G & O argues that although it would be entitled to a

JNOV or new trial on the issue of inequitable conduct, the jury

verdict is only advisory and the issue of inequitable conduct is for

the Court to decide. This Court expressed its view at a hearing on

April 25, 1989 that G & O is bound by the jury’s verdict because

it failed to object to giving a nonadvisory verdict to the jury.

G &O maintains this view is incorrect, arguing that it has

contended throughout this litigation that the issue of inequitable

conduct is exclusively for the Court to decide.

Although G & O did initially object to the jury determining the

ultimate legal conclusion of inequitable conduct, G & O conceded

that the factual underpinnings must be decided by the jury.

Additionally, when given its last opportunity to object to the jury

instructions and special verdict forms at the final conference on

jury instructions, G & O only objected to a portion of the instruc-

tion on willful infringement. Significantly, G & O did not object

to the actual submission of inequitable conduct to the jury. As

two noted commentators make clear, G & O’s failure to object

precludes them from arguing now that the verdict was merely

advisory and not binding:

A-21

If one party demands a jury, the other party does jot object,

and the court orders trial to a jury, this will be regarded as

trial by consent. If there is trial to a jury by consent, the

verdict has the same effect as if trial by the jury had been a

matter of right and cannot be treated as advisory only.

9 C. Wright & A. Miller, Federal Practice and Procedure, § 2333.

Defendant now asks this Court to conduct a bench trial on the

issue of inequitable conduct by reviewing the trial evidence de

novo and by treating the jury verdict as merely advisory. Assum-

ing the Court has the power to decide the factual and legal issues

related to inequitable conduct, even though other issues are

contemporaneously submitted to a jury, such an exercise of power

is not appropriate here. In this case, the issue of inequitable

conduct was in fact submitted to the jury, and the jury did make

factual findings that G&O failed to establish by clear and

convincing evidence the materiality and intent thresholds neces-

sary for inequitable conduct.

This Court therefore reviews the jury’s findings in the context

of motions for JNOV and for new trial, not de novo, and will

accept the jury veraict unless the Court finds that reasonable

jurors could not have concluded that G & O failed to overcome

that burden. Perkin-Elmer Corp. v. Computervision Corp., 732

F.2d 888, 893 (Fed. Cir. 1984).

The inequitable conduct of which G & O complains relates to

the use of the sealant epoxy on the air side of a welded tube-to-

header joint in a radiator. G&O argues that the invention

includes epoxy sealant embodiments and that Mr. Saperstein’s

failure to disclose the epoxy work of others at Modine constitutes

1 failure to disclose material prior art. Specifically, G & O argues:

(1) that when filing his patent application and signing an oath

stating that he was the sole and original inventor of what was

claimed in the application, Mr. Saperstein failed to disclose that

Robert Miller and Russell Awe of Modine had already conceived

of the epoxy sealant process in the Ferrofuse project; (2) that

during a July 1984 interview with the Patent Examiner, Mr.

Saperstein stated that epoxy flooding the opposite side of the weld

was new, in response to the Examiner’s concern that the use of

A-22

sealant coating rendered the claims obvious; and (3) that when

he signed the application for the patent and for the Certificate of

Correction, Mr. Saperstein failed to disclose that he did not

invent the epoxy embodiment.

Apparently conceding the materiality of the withheld informa-

tion, Modine argues that Mr. Saperstein lacked the requisite

deceptive intent. First, in signing the original oatb of invention, he

believed he was signing a patent application for the Beta-Weld,

which was his invention, and did not consider Miller’s work to be

an invention because it did not work. Therefore, Miller’s work did

not warrant disclosure to the Examiner. Second, in discussions

with the Patent Office, epoxy only arose in connection with an

aluminum radiator developed after Mr. Saperstein filed the appli-

cation, and not in connection with the stainless steel radiators

worked on before Mr. Saperstein joined Modine. Third, Mr.

Saperstein had no reason to deceive the Patent Office because the

patent had been assigned to Modine and not to him individuaily.

Therefore, his name on the patent was not connected with

internal promotions or compensation.

Modine concludes that, where the defendant has the burden of

proving deceptive intent by clear and convincing evidence and the

jury finds that it failed to do so, the Court should not extend the

doctrine of inequitable conduct to encompass any failure, on the

part of the originally named inventor, to disclose internal research

done pursuant to the omitted co-inventor’s invention.

This Court may enter JNOV only if it is firmly convinced that

reasonable persons could not have reached the verdict that was

reached. Furthermore, this Court must view the evidence and all

reasonable inferences from it in a light favorable to Modine.

Given these standards, this Court DENIES defendant’s motion

for JNOV on grounds that reasonable jurors could have con-

cluced, in light of the evidence, that G & O failed to establish by

clear and convincing evidence that those who prosecuted the

patent for Modine intentionally or recklessly misrepresented or

failed to disclose material information regarding the patent to the

Patent Examiner.

A-23

This Court also DENIES defendant’s motion for a new trial on

grounds that the verdict is not against the clear weight of the

evidence and that a new trial is not necessary to prevent a

miscarriage of justice. Although the credibility of Mr. Saper-

stein’s testimony was Clearly at issue, particularly with respect to

whether or not he was aware that the actual patent application

covered not only his “Beta-Weld” embodiment of the tube-to-

header joint but also Mr. Miller’s and Mr. Awe’s epoxy embodi-

ment of such joints, and with respect to his failure to disclose such

a material fact to the Examiner, the jury did have more than

adequate opportunity to consider both sides of the issue. A decent

respect for the collective wisdom of the jury warrants deference to

their finding. This Court cannot confidently conclude that a

mistake has been committed and that a new trial is therefore

appropnate.

C. Willful Infringement

Lastly, the jury returned a special verdict during the trial’s

liability phase on the issue of willful infringement and found that

Modine had proved by clear and convincing evidence that

G & O’s infringement of the ’034 patent was willful.

G & O contends it did not willfully infringe the °034 patent

based on the legal opinions it solicited from competent outside

patent counsel. These opinions arguably provided G & O with a

reasonable basis to believe in good faith that Modine’s patent was

invalid or not infringed. Paper Converting Machine Co. v. Magna-

Graphics Corp., 745 F.2d 11, 20 (Fed. Cir. 1984). G & O further

contends that its efforts to obtain more than one legal opinion

evidences that it exercised due care to determine whether or not it

was infringing the "034 patent.

Modine responds that the success of the Beta-Weld and the

possibility of losing some of its biggest customers to Modine put

enormous pressure on G & O to manufacture, as G & O’s Rich-

ard Crook acknowledged at trial, a competing product of equal

performance. Modine contends that in an effort to remain com-

petitive, G & O obtained a Beta-Weld radiator and intentionally

copied it. G & O’s letters to Modine denying infringement and its

A-24

claim of reliance on outside legal opinions are thus merely a sham

designed to conceal the willfulness of the infringement.

Considering this evidence in a light most favorable to Modine,

drawing all reasonable inferences from testimony and exhibits in

its favor, and deferring to the verdict where the evidence conflicts,

this Court finds that reasonable minds could differ over the

verdict and therefore DENIES defendant’s motion for JNOV.

This conclusion is especially warranted in light of the Court’s

instruction to the jury that they must look to the totality of the

circumstances in determining willfulness and that reliance upon

an attorney’s advice does not alone dictate a finding that the

infringement was not willful. The Court also DENIES defen-

dant’s motion for a new trial on grounds that the verdict is not

contrary to the clear weight of evidence.

I. PLAINTIFF’S MOTION FOR INCREASED DAMAGES

AND DEFENDANT’S MOTION FOR JNOV OR NEW

TRIAL ON DAMAGES

On May 8, 1989, the jury returned special verdicts awarding

Modine $54,864,730 in lost profits on 95 percent of lost sales, and

a royalty rate of 28 percent on the remaining five percent of

G &O sales. Modine now moves for increased damages, and

G & O moves for JNOV or new trial on the issue of damages.

A. Motion for Increased Damages

In its motion for increased damages, Modine asks this Court to

treble the jury’s damage award in order to compensate them fully

for the egregious and willful infringement of their patent and to

deter future willful conduct by G&O. Because the issue of

patentability was close and litigated in good faith, see Yodor Bros.,

Inc. v. California-Florida Plant Corp., 537 F.2d 1347, 1383 (Sth

Cir. 1976), cert. denied, 429 U.S. 1094 (1977), this Court

exercises its complete discretion and DENIES plaintiff's motion

for increased damages, despite the finding of willful infringement.

See Rite-Hite Corp. v. Kelley Co., Inc. 819 F.2d 1120, 1126 (Fed.

Cir. 1987); S.C. Johnson & Son, Inc. v. Carter-Wallace, Inc., 781

F.2d 198, 201-02 (Fed. Cir. 1986), on remand, 231 U.S.P.Q. 668,

670 (S.D.N.Y. 1986) (denying increased damages, despite find-

A-25

ing or willful infringement, where defendant raised a substantial

challenge to plaintiff's patent claims).

This Court finds that a contrary conclusion would thwart efforts

to challenge patents believed in good faith to be invalid. Kloster

Speedsteel AB v. Crucible, Inc., 793 F.2d 1565, 1581 (Fed. Cir.

1986), cert. denied, 107 S. Ct. 882 (1987). As the cited cases

recognize, treble damage awards, which were created by statute,

do not automatically follow upon a finding of willful infringement.

It is apparent to this Court that treble damages represent the

functional equivalent of punitive damages and that a court decid-

ing this issue should consider the conduct of the willful infringer

in light of the need for punishment and the need for deterrence.

In this case Modine’s request for an additional $100 million

dollars by trebling the jury’s damage award is simply not justified

on punishment or deterrence grounds by the evidence. This

conclusion holds even if the Court were to accept Modine’s

argument that this issue is simply one of fixing the appropriate

level of compensation damages rather than one implicating the

award of punitive damages. The willfulness issue in this case is

sufficiently close on the evidence that the decision to award treble

damages cannot be based on any rational view of the evidence and

could provide misplaced incentives in litigating the merits of the

willfulness issue in other patent infringement cases.

B. Motion for JNOV on Damages

On May 8, 1989, the jury returned special verdicts that

awarded Modine approximately $56 million in damages based on

three findings. First, the jury determined that Modine would have

sold 95 percent of the infringing G & O radiators in the absence of

patent infringement. Second, the jury found that Modine is

entitled to $54,864,730 in lost profits. Third, the jury fixed the

reasonable royalty rate, to which Modine is entitled on any

infringing units sold by G & O which wouid not have been sold by

Modine, at 28 percent. The jury therefore found that Modine is

entitled to 28 percent royalties on the five percent of G & O sales

that Modine would not have accounted for in the absence of

patent infringement.

A-26

The special verdicts indicate that the jury adopted Modine’s

theories on lost profits and royalty rates with only slight

modification.

Modine’s theory of lost profits is based on two “streams.”

Under stream one, Modine seeks lost profits related to the sales of

Beta-Weld radiators during the period of infringement, July 1985

to May 1989, based on the contention that it would have been

able to charge higher prices during that time but for the presence

of G & O’s infringing product in the market. Assuming that

Modine could have sold each radiator unit at a price markup of

21.9 percent during the relevant period, stream one lost profits

equal $27.4 million.

Under stream two, Modine seeks lost profits related to sales of

G & O Ultra-Fused radiators from July 1985 to May 1989, based

on its contention that Modine would have accounted for those

sales but for the presence of the infringing G & O product in the

market. Assuming that Modine would have accounted for 100

percent of the G&O Ultra-Fused radiator sales and that the

profit margin on these sales would have reflected the 21.9 percent

price markup, stream two lost profits equal $28.9 million.

Modine arrives at its price increase figure of 21.9 percent by

relying on two concepts. First, Modine contends that the presence

of G & O in the radiator market caused a price “erosion.” Modine

presented expert testimony to show that the profit margins on the

sale of its Beta-Weld radiators was depressed by 6.9 percent after

the infringement, based on a statistical analysis that compared the

profit margins on Modine’s radiators before and after G&O

radiators entered the market. Second, Modine contends that

G & O’s infringement denied Modine the opportunity to charge a

price “premium.” Modine offered the testimony of its president,

Alex Simpson, that it would have increased its radiator price by

15 to 20 percent in the absence of competition from G & O.

Modine’s theory of a reasonable royalty rate is based on the

testimony of its licensing expert, Mr. Johnston. He presented

three different techniques for computing a reasonable royalty, all

of which yielded a royalty at or close to the 28 percent figure

__ determined by the jury. Mr. Johnston based his royalty computa-

A-27

tions on the assumption that G & O earned an incremental or

marginal profit of 32 percent on its sale of Ultra-Fused Radiators,

and that G & O could have paid a royalty rate at or close to 28

percent, given the four percent average profit of G & O’s entire

product line in 1985.

G & O moves for a JNOV or a new trial on the jury’s verdicts

regarding damages on the grounds that the award is not supported

by substantial evidence, is contrary to the evidence, and is a

miscarriage of justice. G & O advances three arguments in sup-

port of its motion, all of which attack the assumptions underlying

the lost profits and reasonable royalty theories put forward by

Modine.

G & O first argues there is no evidence that Modine could have

raised the price of the Beta-Weld by 21.9 percent but for the

alleged infringement. G & O notes that Modine’s only evidence

supporting the 21.9 percent premium was the testimony of its

president, which was not based on an analysis of conditions in the

radiator or truck market, nor on the past experience of Modine or

its competitors, nor on a written projection or any other documen-

tary evidence. G & O contends that contrary evidence brought out

at trial further undermines Modine’s theory regarding a 21.9

percent premium: Modine introduced the Beta-Weld at essen-

tially the same price as its soldered radiators, and Modine did not

obtain a substantial premium for two other product

improvements.

Modine counters that G & O’s attack on its damage award

overlooks several crucial bodies of relevant evidence that amply

support the verdict. The Beta-Weld radiator increased the life and

durability of heavy duty truck radiators, and therefore customers

were willing to pay more for the enhanced value. The 21.9 percent

price increase also amounted to far less than actual dollars saved

in repair costs, and both fleet owners and truck purchasers were

willing to pay a premium for eliminated repair and replacements

costs. In addition, before the Ultra-Fused’s entry into the market

became a significant pricing factor one customer paid Modine a

premium of 28 percent. Finally, an industry trade publication

reported in May 1983 that the “Beta-Weld core at that time

A-28

would carry a premium of only a 10-12 percent premium over a

convention core.”

G & O’s second argument in support of its motion for JNOV or

new trial is that the overwhelming weight of evidence disproves

Modine’s claim that, given a price increase of 21.9 percent, they

could have sold the same number of Beta-Weld radiators and also

captured 95 percent of G&O’s Ultra-Fused sales. Modine’s

claim suggests that no customer placing such an order, or as the

jury found, no more than five percent of those customers, would

have accepted an alternative to Modine’s welded radiator, regard-

less of the hypothetical 21.9 percent price increase and regardless

of other customer needs or preferences. G & O maintains that the

jury’s verdict ignores the contrary evidence that: (1) truck manu-

facturers base their purchase on a wide range of factors, including

price, delivery, engineering capability, past relationships, and a

preference for dual sources of supply; (2) many customers to

whom G&O sold the Ultra-Fused had no existing business

relationship with Modine, and yet Modine’s expert assumed that

such customers would shift orders for more than 67,000 radiators;

and (3) customers had available for purchase several acceptable,

noninfringing alternatives to the Beta-Weld and the Ultra-Fused.

Modine counters that the evidence at trial demonstrated that

the heavy duty truck market was demanding a Beta-Weld type

radiator because it solved a significant problem of tube-to-header

joint erosion cailed “solder bloom” and the related problems of

field repair costs and downtime caused by radiator failure at these

joints. Modine notes that its heavy truck radiator sales went from

100 percent conventional soldered to 99 percent Beta-Weld from

1985 to 1988. Modine concludes that the Beta-Weld would have

been, but for G & O’s infringing radiator, the only radiator to

satisfy those customers who had chosen to purchase the Ultra-

Fused radiator. Modine reasons that this conclusion can be

inferred simply from the fact that Modine and G & O were the

only two suppliers selling the revolutionary welded and solder

backfilled radiators during the relevant period.

Third, G & O argues that Modine presented no direct evidence

regarding G & O’s actual incremental or marginal profit. G & O

reasons that the jury based its award of a 28 percent royalty solely

A-29

on Mr. Johnston’s testimony, which fixed G & O’s marginal profit

at 32 percent based entirely on the margina! profit rate earned at

the Modine plant which manufactured Beta-Welds in

Pemberville, Ohio. G & O further criticizes Johnston’s testimony

for assuming that a licensee will seil an indefinite volume of his

licensed product in addition to current volumes of his existing

product, with the latter absorbing overhead. The problem, G & O

argues, is that the licensee may sell the licensed product in place

of his existing product, especially if the former is really superior,

and will therefore have to use revenues from the licensed product

to cover overhead as well as variable costs and the royalty. G & O

argues that Mr. Johnston’s calculations are inconsistent with such

uses of licensed product revenues by the licensee, especially if the

licensee’s normal net profit is low to begin with. G & O also notes

that the specific formula used by Mr. Johnston to arrive at the 28

percent royalty was rejected in Smith Intl., Inc. v. Hughes Tool

Co., 229 U.S.P.Q. 81, 93 (C.D. Cal. 198u), vacated by stip., 839

F.2d 663 (Fed. Cir. 1988) (judgment vacated because case

settled after appeal).

G & O argues that all probative evidence points to the conclu-

sion that a reasonable royalty would be less than five percent.

G & O urges this Court to adopt the approach suggested by Mr.

Johnston and split the difference between Modine’s and G & O’s

pretax profits in 1985, which would result in a royalty between 4.3

percent and 3.5 percent. G & O further notes that according to

Mr. Johnston’s testimony, the typical royalty (2 about five percent

of the sales price.

Modine counters that the jury’s 28 percent figure is supported

by the evidence because the three different techniques use by its

expert to compute a reasonable royalty each yielded a royalty

figure at or close to 28 percent. Mr. Johnston arrived at a figure of

23.5 percent by assuming that the incremental profit would be

shared equally, 28 percent by subtracting the expected net profit

from the incremental profit, and 28 percent by using the analytical

approach of TWM Manufacturing Co. v. Dura Corp., 789 F.2d

895, 899 (Fed. Cir. 1986). Modine concludes that a review of

reasonable royalty rates awarded in cases roughly similar to this

bahia

A-30

one demonstrates that the jury’s 28 percent is in line with

established precedent.

Modine adds that a lower royalty rate ignores the realities of

the marketplace, ignores the extraordinary usefulness and unique

commercial value of the Beta-Weld, and ignores its penetration of

the market. Modine points out that, as a revolutionary product,

the Beta-Weld would never be licensed in the real world, and the

reasonable royalty figure arrived at in the hypothetical world

should therefore be higher than the rates typically negotiated.

To recover lost profits, the patent owner must prove the cause

and the amount of the loss as facts, without resorting to specula-

tion. Water Technologies Corp. v. Calco, Ltd., 850 F.2d 660, 671-

73 (Fed. Cir. 1988). Although the amount of lost profits need not

be proven with unerring precision, lost profits cannot be awarded

based on speculation. Bio-Rad Laboratories v. Nicolet Instrument

Corp., 739 F.2d 604, 616 (Fed. Cir. 1984).

Where lost profits cannot be proved with reasonable certainty, a

royalty measure of damages is appropriate. Hanson v. Alpine

Valley Ski Area, Inc., 718 F.2d 1075, 1078 (Fed. Cir. 1983).

Although the calculation of lost profits is a fact-based analysis,

the determination of a reasonable royalty, which rests on a legal

fiction, occurs in a purely hypothetical setting. Panduit Corp. v.

Stahlin Bros. Fibre Works, 575 F.2d 1152, 1158 (6th Cir. 1978).

The determination of a reasonable royalty, however, like the lost

profits calculation, must be based on evidence and not conjecture.

4 D. Chisum, Patents § 20.03[3][i] (1989).

In considering G & O’s motion for JNOV, the Court must

consider the evidence in a light most favorable to Modine and

give Modine the benefit of all reasonable inferences. Verdegaal

Bros., 814 F.2d at 631. In light of this rigorous standard, the

Court DENIES the motion for JNOV on the issue of lost profits

and reasonable royalty rates.

Indulging Modine with every reasonable inference from the

evidence, the Court concludes that there is sufficient evidence for

the jury’s verdict that, but for the competition of G & O’s infring-

ing product, Modine would have been able to charge a 21.9

percent premium on Beta-Weld sales. The jury presumably con-

A-31

cluded that the value added to the life and quality of the radiators

warranted the 21.9 percent premium. Although Mr. Simpson’s

testimony supplied the only basis for the range of the price

premium, he testified three times during the trial and was sub-

jected to thorough cross examination. The jury had every oppor-

tunity to assess his judgment and measure his credibility. This

Court cannot reassess Mr. Simpson’s credibility or substitute its

own judgment for that of the jury on a motion for JNOV.

The Court further concludes, by indulging every reasonable

inference from the evidence, that the jury’s award of lost profits

on 95 percent of G & O sales, at a premium of 21.9 percent, was

also supported by evidence sufficient to withstand a JNOV. The

jury could have reasonably reached this conclusion on the evi-

dence that Modine and G & O were the only two suppliers of a

revolutionary radiator, the demand for which approached near

inelastic levels.

Accordingly, this Court DENIES G & O’s motion for JNOV

on the issue of lost profits.

The Court also concludes that there is sufficient evidence for

the jury’s award of a 28 percent royalty on five percent of G & O

sales. Considering the expert testimony in a light most favorable

to Modine, drawing all reasonable inferences from the testimony

and exhibits in its favor, and deferring to the verdict where the

evidence conflicts, this Court finds that reasonable minds could

differ over the verdict and therefore DENIES the motion for

JNOV on the issue of a reasonable royalty.

C. Motion for New Trial on Damages

Although this Court finds that Modine presented sufficient

evidence at trial to create an issue of damages for the jury to

decide, the mere existence of sufficient evidence to withstand a

JNOV motion does not prevent this Court from granting G & Oa

new trial on the issue of lost profits and a reasonable royalty. In

the opinion of the Court, the jury’s verdict that Modine could

~have realized a 21.9 percent price increase on all Beta-Weld sales

and on 95 percent of G & O’s sales, as well as a 28% royalty on

the remaining five percent of G & O’s sales, during the relevant

A-32

period of infringement is based on speculation, contrary to the

clear weight of evidence, and a miscarriage of justice.

As G &O correctly notes, Mr. Simpson’s testimony was the

only evidence of the 21.9 percent premium offered by Modine.

This testimony was not based on an analysis of radiator or truck

market conditions, the past experience of. Modine or its competi-

tors, or any written projection or other documentary evidence. Mr.

Simpson’s informed opinion therefore relies on evidence which is

itself based more or less on speculation.

Moreover, the clear weight of evidence fails to support this

speculation. Although Modine was producing and selling the

Beta-Weld during the prosecution of the patent application, the

evidence shows that Modine introduced the Beta-Weld at essen-

tially the same price as its soldered radiators and did not obtain

any significant price increase. While there may be some merit to

Modine’s claim that customer skepticism depressed prices ini-

tially, this argument fails to convince the Court that such skepti-

cism continued to depress prices up to July 1985, when G& O

entered the market with the Ultra-Fused. This Court cannot

accept Modine’s claim tbat the price of the Beta-Weld would

have jumped 21.9 percent overnight but for the Ultra-Fused’s

introduction. The evidence, rather, leads to the conclusion that

the market would have continued from June to July 1985, as it

continues, right now, without sky-rocketing prices.

The jury’s award of a 28 percent royalty on the remaining five

percent of G & O sales is also based on speculation and contrary

to the clear weight of the evidence. As G & O correctly notes, Mr.

Johnston’s testimony was the only evidence of the 28 percent

royalty rate offered by Modine. Mr. Johnston himself admits,

however, that in 35 years of practice and more than 100 licensing

negotiations, he has never negotiated a royalty higher than 15

percent. The evidentiary weight of Mr. Johnston’s royalty compu-

tations are further diminished by the fact that ati of his calcula-

tions are based on the unfounded and unsubstantiated assumption

that G & O’s incremental or marginal profit was 32 percent.

Modine offered no evidence regarding G & O’s incremental or

marginal profit.

ne acai

A-33

In contrast to this speculation, the evidence supports a conclu-

sion that no rational licensee would agree to a royalty based on the

incremental or marginal profit approach utilized by Mr. Johnston.

Such an approach was expressly disapproved in Georgia Pacific

Corp. v. United States Plywood Corp., 318 F. Supp. 1116

(S.D.N.Y. 1970), modified sub. nom., Georgia-Pacific Corp. v.

United States Plywood-Champion Papers, Inc., 446 F.2d 295 (2d

Cir. 1971), cert. denied, 404 U.S. 295 (1971).

A new trial on damages is further warranted on grounds that

the $55.6 million verdict is a miscarriage of justice. The award

exceeds G & O’s gross revenues from all sales of the Ultra-Fused

radiators during the period of the alleged infringement. The award

also exceeds of the cumulative profits for the last ten years of

G & O’s parent company, the Allen Group. It cannot, therefore,

be justified as compensation for infringement under 35 U.S.C.

section 284. Rather, the Court finds that the award, which

transfers to Modine the full amount of all of G & O sales, is an

unprecedented verdict and a miscarriage of justice. Although

Modine is entitled to fair compensation, it is not entitled to a

windfall.

Having given full respect to the jury’s findings and reviewed the

entire evidence concerning damages, this Court is of the firm

conviction that the jury’s award of $55.6 million in damages is

excessive. Accordingly, this Court may either grant defendant’s

motion for a new trial on the issue of damages or deny the motion

conditional upon Modine’s acceptance of a remittitur. Fenner v.

Dependable Trucking Co., Inc., 716 F.2d 598, 603 (9th Cir. 1983)

(citations omitted); see also Linn v. United Plant Guard Workers

of Amer., Local 114, 383 U.S. 53, 65-66, 86 S. Ct. 657, 664

(1966). This Court chooses the latter course. Modine thus has

the option of either submitting to a new trial on the damages issue

or of accepting a lesser amount of damages which this Court

considers justified. Fenner, 716 F.2d at 603.

This Court is of the opinion that the evidence presented in this

case justifies an award of $14 million in damages. This amount is

consistent with (1) a price increase by Modine of five percent on

its Beta-Weld radiators, (2) sales by Modine of 50 percent of

A-34

G & O’s Ultra-Fused radiator sales, and (3) a royalty rate of 15

percent on the remaining radiators sold by G & O.

For all the foregoing reasons, this Court GRANTS defendant’s

motion for a new trial on the issue of damages. However, a new

trial limited to damages is granted only ON THE CONDITION

that Modine does not accept a remittitur in the amount of $14

million.

PLAINTIFF’S MOTION FOR ATTORNEYS’ FEES AND

PREJUDGMENT INTEREST

A. Attorneys’ Fees

This court has the authority to award reasonable attorney fees

to the prevailing party in patent litigation, but such attorney fees

may only be awarded “in exceptional cases.” 35 U.S.C. § 285.

As a general rule, an express finding of willful infringement of a

patent provides sufficient basis for finding exceptional circum-

stance within the meaning of the siatute. When faced with such a

finding, it is incumbent on the district court to explain why the

case is not an “exceptional case” warranting an award of attor-

neys’ fees under section 285. S.C. Johnson & Son, Inc. v. Carter-

Wallace, Inc., 781 F.2d 198, 200-201 (Fed. Cir. 1986). Signifi-

cantly, “[e]ven an exceptional case does not require in all

circumstances the award of attorney fees.” Jd. at 201.

Although the trial court retains broad discretion to award or

deny attorneys’ fees, “[t]he court’s choice of discretionary ruling

should be in furtherance of the policies of the laws that are being

enforced, as informed by the court’s familiarity with the matter in

litigation and the interests of justice.” Jd. (citations omitted). In

exercising its discretion, the trial court may weigh such considera-

tions as “the closeness of the case, the tactics of counsel, the

conduct of the parties, and any other factor that may contribute to

a fair allocation of the burdens of litigation as between winner and

loser.” Id.

A-35

The jury’s finding in this case of willful infringement by G & O

makes this an exceptional case within the meaning of the statute

and authorizes the court to grant Modine attorney fees. Modine

contends that G & O’s pretrial conduct and conduct during trial

also mandates an attorney fee award. The Court finds this last

argument unconvincing.

Despite the jury’s finding of willful infringement, this Court, in

exercising its broad discretion, DENIES plaintiff's motion for

attorneys’ fees on grounds that: (1) many substantial defenses

were available to G & O because of the lengthy and contested

nature of the patent’s history; (2) G&O raised a substantial

challenge to Modine’s patent claims; (3) the law suit was con-

ducted fairly, vigorously, and in good faith by both G & O and

Modine; and (4) an award of fees would thwart efforts to

challenge the validity of patents believed in good faith to be

invalid.

B. Prejudgment Interest

Modine seeks prejudgment interest based on its cost of funds,

compounded annually, applied to its damages as incurred during

the period of the infringement. Specifically, Modine seeks interest

in the amount of $9,611,133 effective August 1, 1989, and that

further interest be awarded in the amount of 9.29 percent of the

accumulated damages and interest from August 1, 1989, until the

date that judgment is entered. Modine provides an alternative

calculation based on the annual prime rate for comparison pur-

poses, the prime rate being slightly greater than Modine’s cost of

funds.

Modine argues that the compensatory nature of prejudgment

interest dictates that Modine’s cost of funds be used to calculate

the rate at which prejudgment interest is to be assessed. That is,

Modine contends that a commercial interest rate should be

utilized, rather than a statutory rate, to reflect actual compensa-

tion due to Modine under 35 U.S.C. section 284.

G &O contends that Modine is not entitled to any prejudg-

ment interest. However, should the Court find otherwise, G & O

argues that the Court (1) should award prejudgment interest on

A-36

reasonable royalty damages only, and (2) should award such

interest not at the commercial rate proposed by Modine, but

rather at the statutory rate of seven percent simple interest per

annum. G & O contends that nothing more than seven percent

interest on a reasonable royalty is necessary to place Modine in as

good a position as it would have been in had G & O entered into a

reasonably royalty agreement, because the total damage award of

$55,634,135 exceeded G & O’s gross revenues of $54,958,814 on

all sales of the infringing radiator.

G & O’s argument that prejudgment interest should be limited

to reasonable royalty damages is wrong on the law. In Gyromat

Corp. Champion Spark Plug Co., 735 F.2d 549, 556 (Fed. Cir.

1984), the court made clear that prejudgment interest should

ordinarily be awarded on both the lost profit and reasonable

royalty portions of the damages award for patent infringement.

Consequently, the sole question before this Court is whether

prejudgment interest should be awarded at the statutory rate or at

a commercial rate compounded annually.

In Bio-Rad Laboratories, the court acknowledged that “the

rate of prejudgment interest and whether it should be com-

pounded are matters left largely to the discretion of the district

court.” 807 F.2d at 969. As Modine correctly notes, however, in

exercising its discretion the court must be guided by the purpose

of prejudgment interest, which is to compensate the patent holder

for its “forgone use of money [the royalty payments} between the

time of the infringement and the date of the judgment.” /d.

(quoting General Motors Corp. v. Devex Corp., 103 S. Ct. 2058,

2062 (1983)). The merits of the infringer’s challenges to the

patent or to an unduly high damage award are immateria! to the

determination of prejudgment interest. Bio-Rad Laboratories, 807

F.2d at 969-70.

Based on the Devex and Bio-Rad decisions, this Court awards

Modine prejudgment interest on all damages incurred during the

period of the infringement at the compounded commercial rate,

that is, Modine’s cost of funds compounded annually.

A-37

Ill

CONCLUSION

For all of the foregoing reasons, this Court hereby ORDERS

the following:

(1) Defendant’s motion for JNOV is DENIED; (2) defen-

dant’s motion for new trial is GRANTED, but only on the issue

of damages and only on the condition that plaintiff does not

accept a remittitur in the amount of $14 million; (3) plaintiff's

motion for increased damages and attorneys’ fees is DENIED;

and (4) plaintiffs motion for prejudgment interest is

GRANTED.

Plaintiff is further ORDERED to inform this Court of its

decision regarding the re mittitur, and to submit a proposed form

of judgment consistent with the terms of this Order, with twenty

(20) days of the date of this Order. In the event it accepts the

remittitur, plaintiff's proposed form of judgment should include

an appropriate amount for damages and prejudgment interest.

IT IS SO ORDERED.

DATED: November 30, 1989.

D. LOWELL JENSEN

D. Lowell Jensen

United States District Judge

A-38

Appendix —

United States District Court

Northern District of California

MODINE MANUFACTURING COMPANY,

Plaintiff,

THE ALLEN GROUP, INC., d/b/a

THE G & O MANUFACTURING CO.,

Defendant.

C-85-6946-DLJ

FINAL JUDGMENT

This action having come before the Court for a trial by jury, the

issues having been tried and the jury having rendered its verdicts

as to liability and damages, the Court having ruled on the post-

trial motions of the parties, and the Court having offered plaintiff

a Remittitur which has been accepted:

It is hereby ORDERED, ADJUDGED AND DECREED as

follows:

1. United States Patent No. 4,529,034 is valid and enforce-

able; and it has been willfully infringed by defendant. The Court

therefore ENTERS JUDGMENT in favor of plaintiff and against

defendant on all issues presented in the First Amended Com-

plaint and in the Counterclaim.

2. Plaintiff is entitled to damages in the amount of Fourteen

Million Dollars ($14,000,000) as compensation for the infringe-

ment by defendant, plus prejudgment interest in the amount of

$3,213,013.60, for a total award of $17,213,013.60.

3. Plaintiffs motion for increased damages, and plaintiff's

motion for attorneys’ fees, are DENIED.

4. Defendant THE ALLEN GROUP, INC., including each

division, subsidiary or business unit thereof (including but not

limited to THE G & 0 MANUFACTURING COMPANY), its

successors and assigns in whole or in part, its officers, agents,

A-39

representatives, employees, servants, attorneys, and all persons in

active concert or participation with them, are hereby permanently

enjoined and restrained, during the full life of United States

Patent No. 4,529,034, from engaging in any activities which

infringe or would infringe one or more claims of said Patent, and

are specifically enjoined from making radiators of the type repre-

sented by Plaintiff's Trial Exhibit 30. Plaintiff's Trial Exhibit 30

depicts the type of Ultra-Fused radiator commercial made prior

to January 1989 in G & O’s Jackson plant, and prior to May 1989

in G & O’s New Haven plant, in which tube-to-header joints were

welded on the liquid coolant side and had solder applied from the

air side as a coating opposite each welded joint. THE ALLEN

GROUP is directed to provide actual notice of this injunction to

any successors or assigns, in whole or in part, of THE G&O

MANUFACTURING COMPANY.

5. Plaintiff is awarded its costs, to be taxed by the Clerk of the

Court.

6. No adjudication has been made in this case with respect to

any issue of liability of THE ALLEN GROUP related to its so-

called Ultra-Fused II radiator, in which sealant is applied from

the coolant side of the tube-to-header joint.

7. The judgment entered under seal by this Court on Au-

gust 28, 1989 is hereby vacated.

IT IS SO ORDERED.

DATED: January 19, 1990.

D. LOWELL JENSEN

D. Lowell Jensen

United States District Court

————————xx< ——-

A-40

Appendix D

United States Patent 119)

Saperstein

($4) HEAT EXCHANGER HAVING A HEADER

PLATE

[75] Inventor: Zalman P. Saperstein. Racine. Wis.

[73] Assignee: Modime Manufacturing Company,

Racine, Wis.

(21) Appl. No.: 287,217

(22) Filed: Jal. 27, 1981

Related U.S. Application Dats

[63] Contmmuanon of Ser. No. 105.626. Dec. 20. 1979. aban-

doned.

BOE) BR GF cecceccscenccsescecsosccnseoesonnnasvnsencenens F28F 9/16

ye Oe Sf - See 165/134 R; 29/157.4;

165/173; 165/175; 165/178; 285/189; 283/286.

285/287

[$8) Field of Searcs ......... 165/173, 178. 178. DIG. 9,

165/134 R: 28$/137 R. 189, 286. 287: 29/157.4

{56} References Cited

U.S. PATENT DCCUMENTS

ES 285/381

3.027.142 3/1962 Albers et a. ..... . 165/DIG. 9

3.229.760 1/1966 Hurter e1 al. .................. 165/134 R

3.245.46$ 6/1966 Young ...-...--2.0--.----. 165/173 X

3.266.567 8/1966 Oddy e: al. . 1657151

3.472.316 10/1969 Couch. Jr. . . 165/178 X

A-41

(11) Patent Number: 4,529,034

(4s) Date of Patent: Jul. 16, 1985

3.496.629 2/1970 Mariuce: et al. .............. 29/157.4 X

3.787.945 1/1976 Pasek et al. .......... ce. 168/175 X

4.066.861 1/1978 Broodmasr ....................... 165/173 X

4.221.263 9/1980 Meyer ou... ceceeeceecenees 169/173

4.305.459 12/1981 Nonnenmann ei a/. ............ 165/173

FOREIGN PATENT DOCUMENTS

1$44006 10/1968 France .

890896 3/1962 Unsted Kingdom .

1332777 10/1973 United Kingdom ............... 29/1574

1445598 8/1976 Unned Kingdom .

422836 9/1974 U.S.S.R. .

Primary Examiner—Sheldon J. Richter

Atworney, Agent. or Firm—Wood, Dalton, Phillips.

Mason & Rowe

(37) ABSTRACT

A fluid-to-fluid such as a liquid-to-eir heat exchanger

and a method of making such a heat exchanger im whch

there is provided a header plate. a plucality of Liquid

coolant tubes each extending mto a hol: m the header

plate, a primary load bearing joint subject to the forme-

ton of leakage openings m the jou jomumng each tube to

the beader plate at ms tube openimg, and a thm sealant

sealing against leakage any leakage openmgs thet may

be present or tha! may occur.

6 Ciaiens, 3 Drawing Figures

j ;

A~43

HEAT EXCHANGER HAVING A HEADER PLATE

This is @ continuation of application Ser. No. 105.626

filed Dec. 20. 1979, now abandoned.

BACKGROUND OF THE INVENTION

In heat exchangers of the type considered herein

there 1s usuaily provided a par of spaced header piates

between which extend spaced tubes for conveying a

first fluid such as a liquid between spaced tanks of

which the header pilates are parts. A second fluid such

as air is then forced over and between the tubes and

usually tin contact with serpentine fins for cooling the

liquid flowing through the tubes. An automotive radia-

tor 1s a good example of such an exemplary heat ex-

changer.

Many of these heat exchangers particularily where the

headers and tubes are constructed of brass and the inter-

connecting fins of copper are deficient in strength be-

cause the joints are customariuy solider and have poor

creep and fatigue propernes. This invention both in

structure and method avoxds these difficulues by pro-

viding a pmmary load bearmng joint such as weid metal

joining the tubes to the headers at their areas of contact

or of close proximity and then a thin sealant sealing

against leakage any small leakage openings such as

cracks. fissures. pin holes or the like that may be pres

ent.

A-44

The most pertinent pnor art of which I am aware are

the follomng U.S. Pat. Nos. 2.270.864; 2.914.346,

3.078.551: 3.349.464: 3.496.629: 3.633.660, 3.689.941:

3,710,473; 3.730.747 and 3.763.536. Although many of

these patents Ulustrate the problems of cracks. fissures

and sumular leaks in welded joints. none of them teach

the solution to this problem of providing in the hear

exchanger combtnauon a thin sealant.

BRIEF DESCRIPTION OF THE DRAWINGS

FIG. 1 is a plan view of an automouve radiator ex-

bodying the invennon.

FIG. 2 is a fragmentary partial perspective view of

the elements of the radiator of FIG. 1.

FIG. 3 is an enlarged fragmentary secnonal view

taken substannally along line 3--3 of FIG. 2

DESCRIPTION OF THE PREFERRED

EMBODIMENT

The fluid-to-fluid heat exchanger, embodied in the

radiator 10 as illustrared in FIG. 1. comprises an upper

tank 11. a lower tank 12 speced therefrom. spaced tubes

13 of oval or flattened cross secuon spaced from each

other with adjecent tubes being interconnected by ser-

pentime fins 14 having their crests 15 attached to the

tebes 13 im the customary manner as by welding, braz-

ing. soldering or the like.

The tanks 11 and 12 have as component parts upper

16 and lower 17 header pistes through which the tube

ends 18 extend as shown in relation to the upper plate 16

of FIG. 2 The plates 16 and 17 each are provided with

an ourwardly extending flange as illustrated at 21 is

FIG. 3 as a part of the lower piate 17. These flanges 21

describe 3 hole 22 into which the tube end 25 extends

This tube end 23 is attached to the plate flange 21 by

a pnmary loed bearing joint 24. This jomt is in two parts

with the first part being the welded joint 24 and the

second part being 2 solider coanng 25 on the air sade

between the tube 13 and flange 21.

nn hieteitnl

A-45

Where the heat exchanger 1s constructed of metal the

load bearing joint 24 1s preferably of weided consiruc-

uon. The term “weid™ is used in its broadest sense and

is usually formed with metal parts by heating and allow-

5 img metais to flow together. Where the parts are of

plastic. and this heat exchanger can be constructed of

strong plastic parts. these parts are united in a similar

manner hy heating to form the weld.

After the pmmary load beanng joint 24 is formed

10 there is added the second part of the jomnt: the soider

coating or laver 2S completely covemnng the outer sur-

face side of joint 24. This outer surface side 1s shown

generally at 3S in FIG. 3.

The main part of the load between the headers 16 and

'3 17 and the tubes 13 is taken up by the pmmary load

bearing joint 24. The sealant 2S. particulariy where it 1s

solder or brazing on a weided joint. also has a load

beanng funcuon. However, its main purpose ss (0 seal

up and close leakage openings such as fissures. cracks.

| pin poms and the like thar occur either dumng the

| manufactumng process or in subsequent use. In any

| event. although the pmmary purpose of the sealant 25 ss

tO prevent immediate or after developed leakage prod-

lems. it does function to distmbute some of the forces

between the tubes 13 and the header pilates 16 and 17

and peruculariy those caused by internal pressure and

temserature changes of the liquid on the intenor 33 of

the tubes.

With the usual flanened tubes 13 of the customary

automotve radiator. and especially when these tubes

compnse brass. internal pressure changes of the coolant.

normally water, within the tubes causes the ades 34 of

the tubes to tend to expand away froen each other under

y5 wternal pressure and contract back toward each other

to the position shown im FIG. 2. for exampie. under

these internal pressure as weil as temperature changes

The primary joint 24 successfully absorts these loads

caused by pressure and temperature expansion and con-

traction.

A-46

Although this invennon is most useful in conjunction

with beat exchangers made of metal parts. it is also

useful in hea: exchangers made of remforced plasnc-

and these are coming imto increasing use. Whether of

plastic or metal, the joint 24 is a primary loed bearing

jomt The sealant 25 in all these embodiments functions

mainly as a sealant but is also, secondarily, a load dis-

tribuang member.

Having described my invention as related to the em-

bodiment shown in the accompanying drawings, it is

my intention tha: the invention be no limited by any of

the details of descripnon. unless otherwise specified. but

rather be construed broadly within its spirit and scope

as set Out in the appended claims

I clasm: |

1. A radiator for a vehicle for exchanging heat be-

tween a liquid engine coolant and air, comprising:

a header plate having an inner surface exposed to said

liquid coolant and an outer surface exposed to said

air, said plate containing a plurality of spaced tube

| 3

bearing jomts being subject to the formation of

leakage openings therein: and

a connnuouws, solid sealant coating on said plate at

said holes on sasd Outer surface completely cover-

ing the outer surface side of said load bearing joints

and thereby sea/ing said load beanng joints agains:

any leakage through any leakage openings:

suid load bearing joints compnsing weid metal and

said sealant coating compnsing solider.

~ 2. A radiator for a vehicle for exchanging heat be-

tween a liquid engine coolant and ar. compnsing:

| a header piate having an inner surtace exposed to said

liquid coolant and an outer surface exposed to said

ar. sasd plate contauung a plurality of spaced tube

receiving holes each surrounded by a pempheral

flange on said inner surface.

a plurality of liquid coolant receiving tubes. with

each said tube extending into a separate said hole.

brazed or weided load bearing joints at sasd inner

surface joining at least some or all of said tubes to

said plate at the flanges about sasd holes and ex- ‘

posed to said liquid at said inner surface. said load

bearing joints being subject to the formanon of

leakage openings therein: and

a continuous, solid sealant coanng on said plate at

sasd holes on said outer surface completely cover-

ing the outer surface side of said load bearing joints

and thereby sealing said load beanng joints agains:

any leakage through any leakage openings:

said load bearing joints compnising brazing metal and

said sealant coating compnising solder.

3. A radiator for a vehicie including upper and lower

tanks. each of said tanks having 3 header piate provided

with a senes of tube holes. the header plates being in

facing but spaced relanon and each having opposed

sides. a first of said ssdes being within the associated

tank and having flanges surrounding said cube holes.

and the second of said sides being reianvely flat. a piu-

rality of tubes extending in generally parallel reilanon

between said header piates and having opposed ends

disposed in respectrve ones of said tube holes in respec-

tive ones of said header pilates. both ends of at least some

| -

A-48

or all of sasd tubes being welded about their periphery

to the adjacent one of the flanges on said header plates

on said first side thereof to thereby form bonded pn-

mary load bearing joints which are nomunally sealed but

are subject to the formanon of leakage openings. and a

thin solid sealant coatung on the second sides of both

said header plates opposite sad first sides and com-

pletely covenng sasd joints Oppositely of said weided

ends thereby sealing said joints agasns: leakage through

any of said leakage Openings that might exuar.

4. A radiator for a vehicie including two spaced es.

gine coolant receiving tanks. each of said tanks having

$ a header plate provided with a senes of tube holes each

surrounded by flanges only on the side of the associated

plate within the tank. the header plates being in facing

but spaced relation and each having a coolant contact.

ing surface within the associated tank and an opposed

10 aif contacting surface. a plurality of tubes extending in

generally parallel relation between said header plates

and having opposed énds disposed in respective ones of

said tube holes in respective ones of said header pilates.

both ends of at least some or all of said tubes being

1$ welded or brazed to the flanges on the adjacent one of

said header plates at said coolant contacting surface to

thereby form bonded primary load bearing joints which

are subject to the formauon of leakage openings. and a

solid sealant costing on the air contacting surface of

20 both said header plates completely covenng said joints

oppositely of said brazed or welded ends thereby seai-

ing sasd joincs against leakage through any of said leak-

age Openings thar might exzst.

A-49

eiES

its

sealant solder couting on the air side of both sad

plates completely covermg said pmmary loed

jomts opposite of said brazed or weided ends

sealing said jomts against leakage through any

of said leakage openings that might exist.

radiator of claim § wherein said both ends of

tubes are weided or brazed.

e cs s s 9

pagete

A-50

A-51

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.