# Appendix — Clark Equipment Co. v. Keller > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385011_0934%3A2 ## Record - **Collection:** Supreme Court brief - **Document type:** Appendix - **Published:** January 1, 1984 - **Citation:** 464 U.S. 1044 ## Text ~ Office supreme Court 83-777 | FILTD ei Noy 15 i963 IN THE - - STEVAS, Supreme Court of the United states October Term, 1983 CLARK EQUIPMENT COMPANY, Petitioner, VS. LOUIS J. KELLER and CYRIL N. KELLER, Respondents. APPENDIX TO PETITION FOR A WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE EIGHTH CIRCUIT JOHN D. KELLY NICHOLAS J. SPAETH Vogel, Brantner, Kelly, Knutson, Weir & Bye, Ltd. P.O. Box 1389 Fargo, North Dakota 58107 701-237-6983 FRED E. SCHULZ Wildman, Harrold, Allen & Dixon One IBM Plaza Chicago, Illinois 60611 Attorneys for Petitioner 1983—Northwest Brief Printing Co., 3010 2nd St. No., Minneapolis 55411—588-7506 APPENDIX INDEX Page Keller v. Clark Equipment Co., 715 F.2d 1281 (8th SON EEEY cc Uacienh bats oven de Oc span eee A-1 Keller v. Clark Equipment Co., 210 U.S.P.Q. 742 SEREGEE LOWED ob. ch ct cb evyecdeccktene ea mmee A-26 Louis J. KELLER and Cyril N. Keller, Appellees, v. CLARK EQUIPMENT COMPANY, and Clark Equipment, A.G., Appellants. CLARK EQUIPMENT COMPANY, Appellant, v. Louis J. KELLER and Cyril N. Keller, Appellees. No. 82-2066. United States Court of Appeals, Eighth Circuit. Submitted May 16, 1983. Decided Aug. 11, 1983. HEANEY, Circuit Judge. This case began as a challenge to the validity of three patents covering various aspects of a successful four wheel loader marketed initially by Melroe Manufacturing Com- pany (Melroe), and subsequently by Clark Equipment Com- pany (Clark), under the trade name “Bobcat.” The present appeal involves one of the three patents—a manufacturing patent entitled “tractor vehicle and drive therefore”—which this Court declared invalid under 35 U.S.C. § 102(b) be- cause the application for it was not filed within one year after the invention had been offered for sale. Clark Equip- ment Co. v. Keller, 197 U.S.P.Q. 209 (D.N.D.1976), aff'd, 570 F.2d 778 (8th Cir.), cert. denied, 439 U.S. 825, 99 S.Ct. 96, 58 L.Ed.2d 118 (1978). Clark now appeals from the district court’s holding that Melroe was liable to Cyril A-2 and Louis Keller—two of the owners of the manufacturing patent in question—for its negligent failure to file the pat- ent application in a timely manner and that Clark assumed that liability when it purchased Melroe in 1969. We affirm. I, FACTS A. THEPATENTS 1. The 503 Patent In 1956, Louis and Cyril Keller began building a self- propelled, three-wheel Joader. The Kellers completed the first loader in February, 1957, and throughout 1957 and 1958, they made various modifications to improve the ma- chine’s design. On December 1, 1958, the Kellers filed an application for a patent on the three-wheel loader. The Pat- ent Office issued U.S. Patent No. 3,151,503 (503 patent) on October 6, 1964. The 503 patent was a mechanical pat- ent entitled “transmission system” and its duration was for 17 years. 2. The254 Patent In about September, 1958, the Kellers became employed by Melroe. They continued to work on the development of their three-wheel loader, which Melroe was marketing with only limited success. In the summer of 1961, Louis Keller and Clifford Melroe, then president of Melroe, began experi- menting with a self-propelled four-wheel skid steer loader. During the experimentation in 1961, four prototypes of the four-wheel loader were produced. While still developing the prototypes, Melroe began demonstrating and promoting the new loader, which would be marketed under the trade A-3 name “Bobcat,” in August 1961. Shortly thereafter, Melroe offered the new loader for sale to Midland Cooperative on September 29, 1961, and to the Farmers Union Central Exchange one week later. In December, 1961, the company commenced commercial production of the Bobcat. On Jan- uary 4, 1962, it made its first commercial delivery. Because of the advertising and sales activity surrounding the Bobcat, Louis Keller began urging Clifford Melroe in September or October, 1961, to seek patent protection on the four-wheel loader. When Clifford expressed no interest, Louis obtained permission from Roger Melroe—the com- pany’s vice president and Clifford’s brother—to pursue patent protection for the four-wheel loader. In February, 1962, and then in early May, 1962, Louis Keller autho- rized his attorney to begin preparing applications for a design patent and mechanical patent respectively. At a meeting between the Kellers and the Melroes on May 31, 1962, Clifford Melroe learned for the first time of Louis Keller’s patent application efforts. Clifford ac- cused Louis of attempting to steal the patents for the four- wheel loader. Although Roger Melroe attempted to explain the circumstances to his brother, Clifford demanded that he be given all material relating to the mechanical patent and that the company’s attorney prepare the application for that patent. With respect to the design patent, Clifford agreed to permit the Kellers’ attorney to proceed with the patent application since it was nearly completed, and agreed that he, Louis and Cyril should be listed as co-inventors. Clifford, however, insisted that the design patent be assigned to the company. On June 21, 1962, the Kellers and Clifford Melroe signed the documents for the design patent application and A-4 the assignment of patent ownership to the company. The design patent application was filed on July 25, 1962, and subsequently was issued on May 21, 1963, as U.S. Patent No. D195,254 (254 patent) under the title “self-propelled loader.” 3. The 117 Patent On June 13, 1962, Clifford Melroe contacted the com- pany’s patent attorney, John Swindler, concerning a me- chanical patent for the new loader. In subsequent conver- sations, Clifford discussed assigning the mechanical patent to the company and stated that he and Louis Keller were to be named as inventors. Clifford also discussed the applica- tion deadline with Swindler. Clifford was generally familiar with the application requirements of the patent laws from his past experience with obtaining patents for Melroe products, and he knew that the four-wheel loader had been demon- strated in the summer or fall of 1961. Nonetheless, Clifford indicated to Swindler that the first loader was not placed on the market until January 4 or 5, 1962. Swindler, sent the completed patent application and as- signment of patent documents to Louis Keller and Clifford Melroe in October, 1962. Keller and Melre promptly signed the application and returned it to Swindler. They never exe- cuted or returned the document assigning the patent to the company, however. Swindler filed the application for the mechanical patent on the four-wheel loader on October 23, 1962—approximately three weeks after the one-year filing deadline. The patent office issued U.S. Patent No. 3,231,117 (117 patent) on January 15, 1966. It was a mechanical patent including eighteen claims which was entitled “tractor vehicle and drive therefor.” If the 117 patent had been timely filed, it would have expired on January 25, 1983. A-5 B. THE ROYALTY AGREEMENTS The respective rights and obligations of the Kellers and Melroe, and its successor Clark, with respect to the 503, 117 and 254 patents were governed by three agreements entered into by the parties. 1. The 1959 Agreement In May, 1959, the Kellers and Melroe entered into an agreement under which the Kellers granted Melroe an ex- clusive right to manufacture the three-wheel loader, and lifting and scraping devices, disclosed in the 503 patent ap- plication. In return, Melroe agreed to pay the Kellers a royalty fee of 2.5 percent of the sales price of each loader sold. 2. The 1963 Agreement On October 1, 1963, the Kellers executed an agreement with Melroe which superceded their 1959 agreement.’ The 1963 agreement contained two principal changes. First, the Kellers granted the company an exclusive right to make and sell loaders embodying the invention claimed in the 117 patent application, as well as the 503 patent referred to in the 1959 agreement. Second, Melroe agreed to pay royalties to the Kellers pursuant to a fixed rate, rather than the per- centage method utilized in the 1959 agreement.? Melroe 1Clark contends that this second agreement was not finalized until late 1964 or 1965. The contract which the parties signed, however, is dated October 1, 1963. 2The new fixed royalty schedule was $25 for each of the first 1000 Bob- cats sold on a yearly basis and $15 for each additional Bobcat sold during the year. This fixed rate schedule apparently resulted in lower royalty payments than the percentage formula utilized in the 1959 agreement. A-6 continued to pay royalties to the Kellers under the 1963 agreement until August, 1969. On August 11, 1969, Clark and Melroe entered into a purchase of assets agreement. The agreement provided that Melroe, in exchange for 475,000 shares of Clark’s voting common stock, would convey to Clark all of Melroe’s assets, except as specifically excluded in the agreement. The agree- ment further provided that Clark would assume all of Mel- roe’s liabilities, obligations, and covenants except as specifi- cally excluded in the agreement. Pursuant to this purchase agreement, Clark continued to pay the Kellers royalties under the 1963 Melroe agreement. 3. The 1971 Agreement In May, 1971, the Kellers and Clark entered into a license agreement which superceded the 1963 agreement. Again, the new agreement contained two principal changes. First, the 254 patent was covered for the first time, when the Kel- lers granted Clark an exclusive right to make, use and sell (with a right to grant sublicenses) the inventions claimed in the 503, 117 and 254 patents. Second, the royalty rate was changed, with Clark agreeing to pay the Kellers $15 for each Bobcat it sold and $10 per loader sold by a sublicensee. Clark continued to make royalty payments under the 1971 agreement until approximately the second quarter of 1972. C. INFRINGING ACTIVITY Shortly after Melroe began marketing the Bobcat loaver in 1961, competing loaders appeared on the scene. By 1966, at least five possible unlicensed infringers were in the mar- ket. In 1966, Melroe and the Kellers brought a patent en- forcement action against Universal Manufacturing to halt A-7 its infringing activities. Universal defended on the ground, inter alia, that the 117 patent was invalid because the appli- cation for it had been filed too late. In 1968, Owatonna Man- ufacturing Company, Inc., filed a declaratory judgment action against Melroe and the Kellers to have the 504, 117 and 254 patents declared invalid. Again, the 117 patent was challenged on the ground of late filing. Both the Universal and Owatonna lawsuits were settled without a determination of the validity of the patents. Subsequently, in 1970, Clark entered into sublicense agreements with Owatonna and J.I. Case Company to man- ufacture and sell loaders covered by the 503, 117 and 254 patents. Both license agreements obligated Clark to enforce its patent rights against infringers. Near the time of the signing of the 1971 Clark-Keller agreement, Owatonna and Case began threatening to cease their license payments if Clark did not take action against the unlicensed infringers in the market. In response, Clark stopped paying royalties to the Kellers near the end of the first quarter of 1972, and thereafter filed an action seeking a declaration that its 1971 royalty agreement with the Kel- lers was unenforceable because the three subject patents were invalid. This filing initiated the protracted legal battle summarized below. Il. PROCEDURAL BACKGROUND Clark filed its declaratory judgment action in October, 1972.* In August, 1973, the Kellers filed an answer and a *Clark initially filed suit in the Western District of Michigan, but the matter subsequently was transferred in August, 1973, to the District of North Dakota. A-8 counterclaim. The counterclaim (1) sought royalties due from Clark under the 1971 royalty agreement with the Kellers and under certain sublicense contracts between Clark and others, and (2) alleged that Clark or its prede- cessor in interest, Melroe, had negligently failed to comply with the requirements of 35 U.S.C. § 102(b) by neglecting to file a patent application for the 117 patent within the one-year period after the invention had been offered for sale. In response to this negligence counterclaim, Clark filed a third-party complaint against the law firm of Williamson, Bains and Moore. Clark alleged that the Williamson firm had represented Louis Keller and Clifford Melroe in prose- cuting the application for the 117 patent, and that it had breached its professional obligation to investigate the facts and to file the patent application in a timely manner. On July 25, 1973, the Kellers filed a separate action against Clark. The lawsuit alleged that Clark and its wholly- owned Swiss subsidiary, Clark Equipment A.G. (CEAG), had failed to account for and pay royalties due pursuant to a license agreement between the Kellers and CEAG, which named CEAG as an exclusive licensee under certaiu foreign patents corresponding to the licensed patents in the agree- ment with Clark. Thereafter, the district court consolidated the separate actions initiated by the Kellers and Clark. Then, in April, 1974, the district court ordered the issues of liability for the alleged late filing of the 117 patent severed from the declaratory judgment action concerning the parties’ rights and obligations under the various license agreements. In July, 1974, the district court ordered a separate trial on the issue of the validity of the three patents in question. After a lengthy trial, the district court held that the 503 and 254 A-9 patents were valid. Clark Equipment v. Keller, supra, 197 U.S.P.Q. at 94-98, 117-121. It further held that the 117 patent covered a patentable invention, but the patent was invalid under 35 U.S.C. § 102(b) because the patent appli- cation had been filed more than one year after the invention had been on sale. /d. at 109-114. On appeal, this court af- firmed the district court’s decision with respect to the 503 and 117 patents, but reversed its decision that the 254 pat- ent was valid. Clark Equipment Co. v. Keller, supra, 570 F.2d at 784-799. In a March 30, 1981, decision,* the district court held the 503 patent did not cover any product made or sold by Clark, and accordingly, conc.uced that Clark was not liable to the Kellers under the 1971 royalty agreement for any royalties with respect to that patent. On the Kellers’ negligence claim, however, the district court held that Melroe negligently failed to file the application for the 117 patent in a timely manner. The court concluded that pursuant to the purchase of assets agreement between Clark and Melroe, Clark ex- pressly assumed Melroe’s tort liability arising from the late filing of the 117 patent. Alternatively, the court held that Clark was liable for Melroe’s negligence under the de facto merger doctrine. Finally, the court concluded that the Kel- lers’ damages consisted of all the royalties they would have received if the 117 patent had not been adjudged invalid. Clark now appeals from this judgment. 4Prior to this decision, Clark voluntarily dismissed with prejudice its claim against the Williamson law firm, and the Kellers settled their separate action involving the foreign patents and CEAG. A-10 Ill. DISCUSSION A. STATUTE OF LIMITATIONS [1] Clark contends that the Kellers’ negligence action is barred by the applicable six-year statute of limitations established in N.D.Cent.Code § 28-01-16. Clark argues that the Kellers’ cause of action accrued on September 30, 1962, which was the last day on which the 117 patent application could have been timely filed, and thus the limitations period ran out on September 30, 1968—four years before the plain- tiffs filed suit in 1972. The district court rejected Clark’s position, holding that the Kellers initiated their claim within the limitations period because their cause of action did not accrue until 1972 when Clark ceased paying the royalties due under the parties’ 1971 agreement. We affirm. The district court succinctly summarized the controlling principles of North Dakota law: A cause of action accrues when the right to com- mence it comes into existence; when it can be brought in a court of law without being subject to dismissal for failure to state a claim. * * * [A]n essential element of every cause of action is that plaintiff has suffered an injury caused by defendant’s wrongful act. Injury is usually but not always contemporaneous with the wrongful act. It is the conjunction of darmmages and wrongful act that creates a cause of action for tort or contract, and there is no cause of action if either dam- age or wrong is wanting. Keller v. Clark Equipment Co., 474 F.Supp. 966, 969 (D.N.D.1979) (citations omitted). A-11 The district court found that although the wrongful act— the failure to timely file the patent application—occurred in 1962, the Kellers suffered no injury until 1972 when Clark stopped making royalty payments. Clark, relying principally upon Boehm v. Wheeler, 65 Wis.2d 668, 223 N.W.2d 536 (1974), argues that both the wrongful act and injury oc- curred in 1962 when the application deadline expired. In Wheeler, the Wisconsin Supreme Court held that a negligence cause of action accrued against an attorney who filed an untimely patent application on the last day that ap- plication could have been timely filed. 223 N.W.2d at 541. The court stated: It was in October or November, 1965 [when the one- year application deadline passed] that the plaintiffs lost their right to get a patent on the power unit. We think that the loss of the right to a patent is the loss of the right to exclude others and, therefore, the injury oc- curred on that date the right to a patent was lost. Pat- ents do have the attribute of personal property and are assignable. 35 U.S.C., Sec. 261. The right to exclude others is a valuable right, and the loss of it would be an injury which would commence the running of the statute of limitations. Therefore, the trial court was correct in holding the first cause of action accrued in 1965. Id. Relying on the reasoning in Wheeler, Clark urges that even though the Kellers continued to receive royalty payments into 1972, they were injured, and thus could have brought their negligence claim, in 1962 because they lost their pat- A-12 ent right to exclude when the application was not filed in time. The Wheeler case is distinguishable from this one. In that case, the Patent Office apparently never issued a patent be- cause of the untimely filing of the application, or if it did so, the plaintiffs never received any payment pursuant to the license agreement. Thus, the plaintiffs in Wheeler never re- ceived any of the royalties to which their patent entitled them, and their injury consequently was as immediate as it was obvious. In sharp contrast, in this case even though the Kellers technically lost their right to exclude others in 1962 when the patent was untimely filed, they continued to re- ceive royalty payments for ten years from first Melroe and then Clark. Thus, the Kellers theoretical loss of their right to exclude infringing competitors did not actually harm them. Clark, however, contends that the injury resulting from the loss of the right to exclude others was not merely theo- retical. Specifically, Clark claims that the Kellers did not vigorously seek to enforce their patent rights against infring- ers because they had learned in the 1966 infringement ac- tion against Universal that the 117 patent might be invalid due to late-filing. Additionally, Clark emphasizes that be- cause the Kellers had learned of the potential late-filing prob- lem in the 1966 litigation, they had sufficient notice to file a cross-claim against Melroe in the infringement action against Universal or otherwise initiate a declaratory judg- ment action prior to September 30, 1968. We find Clark’s position unpersuasive. Common sense dictates that the Kellers would have no reason to sue Melroe, their own employer, as long as it was continuing to pay the royalties due under the parties’ agreement. Moreover, if the A-13 Kellers had filed a negligence claim while they were still re- ceiving royalties, it almost surely would have been subject to dismissal. An essential element of any negligence action in North Dakota is damage which was proximately caused by the alleged breach of duty. See infra, at 1287. While the necessary proof of damage need not be exact, it cannot be mere speculation or conjecture. See Johnson v. Monsanto Co., 303 N.W.2d 86, 93 (N.D.1981); United Power Asso- ciation v. Heley, 277 N.W.2d 262, 268 (N.D.1979). Clark’s theory that the Kellers were damaged in some amount be- cause their knowledge of the late-filing problem allegedly caused them to not vigorously enforce their patent rights is at best speculative and conjectural. In any event, we are not convinced that the Kellers were less than vigilant in enforcing their patent rights. They, along with Melroe, brought infringement claims against Universal and Owatonna in 1966 and 1968, respectively. An inventor need not always litigate the validity of his or her patent against every possible infringer to retain his or her patent rights. See Jenn-Air Corp. v. Penn Ventilator Co., 464 F.2d 48, 50 (3rd Cir.1972); Montgomery Ward & Co. v. Clair, 123 F.2d 878, 883 (8th Cir.1941). Accordingly, the district court did not err in finding that the negligence action filed by the Kellers in 1973 did not accrue until 1972, and that it thus was not barred by the applicable six-year statute of limitations. B. THE NEGLIGENCE CAUSE OF ACTION [2] The elements of a negligence cause of action under North Dakota law are the existence of a duty, failure to dis- charge that duty and resulting injury which is proximately caused by the breach of duty. E.g., Brauer v. James J. Igoe A-14 & Sons Construction, Inc., 186 N.W.2d 459, 468 (N.D.- 1971). Clark contends that the Kellers are not entitled to relief in this case because they possessed no protectible in- terest in the 117 patent in 1962, and, therefore, Melroe owed them no duty to file the patent application in a timely manner. Specifically, Clark urges that even though Louis Keller® was named inventor in the 117 patent, Melroe was the exclusive owner of the patent because it had hired Louis to engage in inventive activities. Clark relies primarily on N.D.Cent.Code § 34-02-11, which states: Everything which an employee acquires by virtue of his employment, whether acquired lawfully or unlaw- fully or during or after the expiration of the term of his employment, except any compensation which is due him from his employer, belongs to the employer. Although there are no cases construing this North Dakota law, the prevailing view in the United States is that when a person is employed for the purpose of inventing, and he or she succeeds in that task during the period of employment, the employer is the equitable owner of the invention and the employee must assign to the employer any patent he or she may obtain on the invention. E.g., United States v. Dubilier Condenser Corp., 289 U.S. 178, 187, 53 S.Ct. 554, 557, 5The 117 patent names only Louis Keller and Clifford Melroe as the in- ventors of the subject claims. The 1963 royalty agreement, however, recognizes both Louis and Cyril Keller as the developers of “certain self-propelled vehicles * * * and a novel drive or transmission for driving said vehicles.” The 1971 agreement refers to Cyril and Louis Keller as “joint owners” of the 503, 117 and 254 ¢ patents. Be- cause Cyril Keller is expressly named in the 1963 and 1971 agreements, the district court properly denied Clark's summary judgment motion to dismiss Cyril as a plaintiff in the negligence action. Keller v. Clark Equipment Co., 474 F.Supp. 966, 969-970 (D.N.D. 1979). - 7 ~—n | | A-15 77 L.Ed. 695 (1933); Melin v. United States, 478 F.2d 1210, 1213 (Ct.Cl.1973). The district court found that Louis Keller was hired for his inventive abilities. Thus, absent any express or implied agreement by the parties to the contrary,” Melroe would have been the exclusive owner of the 117 patent under N.D.Cent.Code § 34-02-11. The district court, however, found that Melroe indeed agreed to recognize that the Kellers retained an ownership interest in the 117 patent and never claimed sole ownership. The court primarily based this find- ing on the 1963 agreement in which Melroe agreed to pay royalties to the Kellers on the 117 patent application in ex- change for an exclusive license. Clark challenges the district court’s reliance on the 1963 agreement, contending that the agreement constituted a compromise to resolve a dispute over who owned the 117 patent under which Melroe conveyed to the Kellers an in- terest in the 117 patent in exchange for a reduction in royal- ty fees due under the 1959 agreement. Clark also urges that the 1963 agreement was not actually finalized until 1965 after protected negotiations. Thus, Clark contends the 1963 agreement provides no evidence that the Kellers possessed an ownership interest in the 117 patent in 1962 which could give rise to a duty on the part of Melroe to timely file the patent application. Clark’s position is untenable. The plain language of the 1963 agreement provides that “the Kellers grant to Melroe the sole and exclusive right and license” to make and sell loaders embodying the 117 patent. (Emphasis added). It is clear that an employer may contract away—either expressly or im- gy egy patent rights it would possess absent such an agreement. .g., Aero Bolt & Screw Co. of California v. laia, 180 Cal.App.2d 728, 5 Cal. Rptr. 53 (1960). A-16 Moreover, the whereas clauses of the agreement explicitly recognize that “the Kellers have developed and invented certain self-propelled vehicles” and that “Melroe desires to obtain and the Kellers are willing to grant Melroe a license to make and sell such vehicles.” (Emphasis added). No- where in the agreement does Melroe agree to convey any- thing to the Kellers—except for a royalty fee in exchange for the exclusive license granted by the plaintiffs. As the district court recognized, if the Kellers possessed no owner- ship interest in the 117 patent prior to the 1963 agreement, they could not have granted a license to Melroe nor would the company have had to agree to pay them royalty fees. With regard to the effective date of the 1963 agreement, the document is dated October 1, 1963. The record, read as a whole, suggests that the agreement was effective as of that date even though some details remained to be finalized. In any event, even if the question of the Kellers’ ownership in- terest in the 117 patent was not resolved until 1965, the fact remains that in the agreement signed by the company, it recognized that the Kellers had developed various self-pro- pelled loaders, that they had a protectable interest in the 117 patent and that Melroe must pay royalty fees to obtain the Kellers’ permission to utilize that patent. The clear inference from this recognition in the 1963 agreement is that the Kel- lers held an ownership interest in the 117 patent in 1962 when Melroe failed to file the patent application in a timely manner.’ 7Clark also argues that Melroe evinced its intent in 1962 to exercise sole ownership over the 117 _— by sending, at the request of Clifford Melroe, an assignment of the patent to Louis Keller. court below rejected this argument because the assignment was never executed, Clifford could not recall why it had not been executed, and Louis did not remember ever being asked to sign the document. Under these cir- cumstances, we agree with the district court that the failure of the par- A-17 The district court also properly recognized that the 1971 agreement between Clark and Melrove provides evidence that the Kellers possessed an ownership interest in the 117 patent which created a duty to file the patent applications. That agreement expressly states that “the Kellers are joint owners” of the 503, 117 and 254 patents, and, like the 1963 agreement, provides that the Kellers “grant” an exclusive license to Clark in exchange for certain royalty payments. [3] In summary, the fact that Melroe, and subsequently Clark, paid royalties to the Kellers on the 117 patent for over nine years is inconsistent with Clark’s present claim that the Kellers did not have any ownership interest in that patent. Accordingly, the district court did not err in finding that the plaintiffs had such a protectable interest and that Melroe consequently had a duty to file the application for the 117 patent in a timely manner.* C. CLARK’S LIABILITY 1. Contractual Assumption [4] Asa general rule, when one company sells or other- wise transfers all of its assets to another company, the trans- ties to execute the assignment rebuts any inference of Melroc’s intent to claim sole ownership which purportedly results from the fact that the document was sent. Moreover, we agree with the district court that the argument that Melroe intended to claim sole ownership in all inventions developed by its employees tends to be rebutted by the fact that the company attorney prepared a contract in which all employees would agree to assign eid Cee arising from their employment, but the employees never signed the contract. When two people jointly make an invention, they must apply for a patent jointly and both must sign the application. 35 U.S.C. § 116. Thus, not- withstanding the Kellers’ interest in the 117 patent, neither Clifford Melroe nor the Melroe company would have had an obligation to file the patent ication to protect that interest. The district court, how- ever, held that Clifford Melroe, on behalf of the company, assumed that obligation by representing at the May 31, 1962, meeting that the company’s attorney would prosecute the application for the 117 patent. Clark does not appeal from this finding. A-18 feree is not liable for the debts and liabilities of the trans- feror. Armour-Dial, Inc, v. Alkar Engineering Corp., 469 F.Supp. 1198, 1201 (E.D.Wis.1979); J.F. Anderson Co. v. Myers, 269 Minn. 33, 206 N.W.2d 365, 368 (1973); Annot., 49 A.L.R.3d 881 (1973) (collected cases). That general rule is inapplicable, however, when the transferee expressly or impliedly agrees to assume the transferor’s debts and liabilities. /d.° [5] The district court found that in this case the plain terms of the 1969 purchase agreement between Clark and Melroe demonstrated Clark’s intent to assume the Keller liability. We agree with this determination. In the whereas portion of the purchase agreement, Clark agreed to “assume all the liabilities, obligations and cove- nants of Melroe, except as specifically excluded herein, all as hereinafter provided.” The written assumption attached to the purchase agreement pursuant to sections 3.1 and 3.2 of the agreement stated: [Clark] * * * assumes and agrees to pay * * * to the extent that they are existing and outstanding on the date hereof, * * * such liabilities of Melroe * * * as are to be assumed by Clark * * * under the terms of [the 1969 agreement]. The district court found that Clark assumed Melroe’s liability to the Kellers under the above-stated provisions of the purchase agreement. The court first found that the liabil- ity was a contingert one because although the negligent act occurred prior to the closing of the purchase agreement in *Although the North Dakota Supreme Court has not addressed this mat- ter, neither party contends that the court below erred in concluding thet these principles represent the law in North Dakota. A-19 1969, the injury to the Kellers—Clark’s cessation of the royalty payments—did not occur until after the closing. The court then found that, because Clark did not exclude this contingent liability from those obligations, it agreed to assume responsibility for Melroe’s liability to the Kellers. Clark contends that because the district court held that the Keller’s negligence claim did not accrue until 1972 for statute of limitations purposes, it must follow that the claim did not exist at all in 1969. Therefore, Clark argues that it could not have agreed to assume responsibility for the Kel- ler liability since it assumed only those obligations “existing and outstanding” on the date of the purchase agreement. We cannot agree. The district court properly recognized that in 1969 Mel- roe’s contingent liability to the Kellers was already in ex- istence because the negligent conduct had occurred in 1962. The 1969 purchase agreement demonstrates that Clark con- sidered such contingent liabilities to be “existing and out- standing” obligations since it lists several contingent debts which Clark agreed to pay if Melroe’s liability for them was established after the agreement was closed. Moreover, be- cause the Kellers were continuing to receive royalties at the time of the closing, and Melroe thus had no reason to believe that the Kellers would assert their contingent negligence claim, the failure of the 1969 purchase agreement to list the Kellers’ claim as a contingent liability evinces no intention to exclude that liability from those assumed by Clark. See infra, at 1289-1291. Clark alternatively urges that even if the Kellers’ claim existed in 1969, it was expressly excluded from the assump- tion agreement because Clark agreed to assume only those liabilities disciosed by Melroe, and Melroe did not disclose A-20 the Kellers’ claim. Specifically, Clark relies on section 3.1 of the agreement which stated that Clark did not assume “any liabilities arising out of tie breach of any representa- tion or warranty of Melroe contained herein” nor “any lia- bilities not disclosed due to any misrepresentation by Mel- roe herein.” Clarks contends that the Keller liability arises from Melroe’s misrepresentation in not disclosing the con- tingent negligence claim. The district court rejected Clark’s position, finding that Melroe had made no misrepresentations with respect to the Keller liability. The court reasoned: The only provisions of the Agreement in which Melroe warranted or represented anything which would relate to the late filing tort claim are sections 1.4, 1.8, 1.14 and 1.21. In these provisions, however, Melroe only represented that the disclosures were correct to its best knowledge. Since Melroe had no knowledge of the tort claim, its nondisclosure of the claim was not due to any misrepresentation contained in the agreement. Therefore, the late filing tort claim was not specifically excluded, and thus according to the terms of the Agreement was assumed by Clark. We agree with this analysis. In section 1.6 of the agreement, Melroe represented that the listed contingent liabilities—which did not include the Kellers’ claim—reflected all “known” claims, and that to the “best of its knowledge,” no legal action was threatened which would materially affect the company’s liabilities. Similarly, in section 1.8 of the agreement, Melroe warranted that “to the best of its knowledge” it was not engaged in or threatened with any legal action. A-21 The foregoing sections demonstrate that the “misrepre- sentations” which Clark excluded in section 3.1 from its general assumption of liability were only those knowingly made. Even though Melroe was aware of the late-filing prob- lem raised in the Universal and Owatonna litigation in 1966 and 1968, Melroe had no reason to believe in 1969 that the Kellers would assert any claim with respect to the 117 pat- ent. Melroe never failed to fulfill its contractual obligation to pay royalties to the Kellers for use of the 117 patent. In- deed, if Clark had not ceased making royalty payments in 1972, the Kellers’ contingent claim never would have be- come a present one and they would not have filed suit. Thus, Melroe’s failure to disclose the Kellers’ contingent claim did not constitute a “misrepresentation” within the meaning of section 3.1 of the purchase agreement, and Clark cannot rely on that section to urge that it excluded the Kellers’ claim from the liabilities it assumed in 1969. Notwithstanding the above analysis, Clark argues that Melroe’s failure to disclose its contingent liability constituted a misrepresentation within the meaning of section 1.21 of the agreement because it contains no “best knowledge” provisions.*° [6] The district court, however, held that in order to construe section 1.21 in harmony with the other warranty provisions in the agreement, an omission would be misleading only if it violated the specific disclosure require- ments contained in sections 1.4, 1.8 and 1.14. This construc- 10Section 1.21 stated: Section 1.21. No Mislecding Statements. Neither the financial state- ments of Melroe and Melroe, Ltd. * * * nor this Agreement contain any untrue statements of a material fact or omit to state a material fact necessary in order to make the statements contained therein or herein not misleading. A-22 tion was clearly proper under North Dakota law. The inten- tions of contracting parties must be determined from the in- strument as a whole, not from any isolated clause. Bjerken v. Ames Sand Gravel Co., 189 N.W.2d 366, 374 (N.D.- 1971). Moreover, a contract must be construed so as to harmonize its various parts whenever reasonabiy possible. Id.; N.D.Cent.Code § 9-07-06. Accordingly, because in 1969, Melroe did not know, nor have reason to know, of the contingent liability to the Kellers, it committed no misrep- resentations under the specific disclosure sections or section 1.21 of the purchase agreement.*? The District court, there- fore, did not err in finding that Clark assumed the Keller liability in the 1969 agreement. 2. DeFacto Merger [7] The district court alternatively held that Clark was liable for Melroe’s negligence under the de facto merger doctrine. We affirm. Although the North Dakota courts have not addressed de facto merger questions, the court below found that North Dakota would likely follow the majority view concerning the requirements and applicability of the doctrine. The dis- trict court concluded that to find a de facto merger, the fol- lowing elements must be present: (1) There is a continuation of the enterprise of the seller corporation, so that there is a continuity of management, personnel, physical location, assets, and general business operations. 11This construction also controls section 1.11 of the agreement in which Melroe warranted that it did not have “any indebtedness, contingent or otherwise, except as set forth in [its] balance sheets.” Melroe did not breach this warranty by not listing the Kellers’ negligence claim be- cause to the best of its knowledge the Kellers were going to continue receiving royalties and they were not intending to assert their claim. A-23 (2) There is a continuity of shareholders which results from the purchasing corporation paying for the acquired assets with shares of its own stock, this stock ultimately coming to be held by the shareholders of the seller corporation so that they become a constituent part of the purchasing corporation. (3) The seller corporation ceases its ordinary busi- ness operations, liquidates, and dissolves as soon as legally and practically possible. (4) The purchasing corporation assumes those liabilities and obligations of the seller ordinarily nec- essary for the uninterrupted continuation of normal business operations of the seller corporation. We find no error in this construction of the de facto merger test. See, e.g., Atlas Tool Co., Inc. v. Commissioner, 614 F.2d 860, 870-871 (3d Cir.), cert. denied, 449 U.S. 836, 101 S.Ct. 110, 66 L.Ed.2d 43 (1980); Ladjevardian v. Laidlaw-Coggeshall, Inc., 431 F.Supp. 834, 838-839 (S.D.N.Y.1977); Shannon v. Samuel Langston Co., 379 F.Supp. 797, 801 (W.D.Mich.1974). The district court found that each of these four factors was present in this case.’* Clark does not seriously dispute these findings. Instead, Clark contends a de facto merger did not occur here because two indispensable requirements of the doctrine are lacking: (1) the corporation selling its 12In the 1969 purchase agreement, Melroe transferred all its assets to Clark in exchange for 475,000 shares of Clark common stock worth approximately $15 million. The Melroe operations—including most management officials, employees and assets—became the Melroe Divi- sion of Clark. The former Melroe company, in turn, changed its name to Gwinner Holding Company. It agreed to cease business operations, liquidate and dissolve as soon as legally and practically possible. A-24 assets must not have been amenable to suit after the sale; and (2) the sale must have been performed to actually or constructively defraud the selling corporation’s creditors. Clark urges that the Kellers could have pursued their neg- ligence action under various provisions of North Dakota and Delaware law which purportedly permit creditors to sue a dissolving corporation which is winding up its affairs or to proceed against the former stockholders of a dissolved corporation to whom the assets were distributed. The dis- trict court rejected this claim, finding that the Kellers had no effective remedy ynder either Delaware or North Dakota law. We agree. Gwinner, the holding company which succeeded Melroe, never was anything but a corporate shell with essentially no assets or business activities. While Gwinner technically re- mained in business until 1974,** it effectively liquidated its assets pron.ptly after the closing of the 1969 purchase agree- ment by distributing the Clark common stock to the former Melroe shareholders. Gwinner’s remaining assets consisted of only $50,000, which the 1969 purchase agreement pro- vided for winding up expenses. It had no employees or bus- iness activities capable of producing income. Indeed, the former shareholders of Melroe had covenanted not to com- pete with Clark’s business activities. In addition, Clark has not demonstrated that the Kellers could have held the former Melroe shareholders personaily liable for the corporation’s negligence nor eveti that the Kellers in 1978, when they filed suit, could have traced the Clark stock to the former Melroe shareholders to whom the shares were distributed after the 1969 closing. 18Delaware revoked Gwinner’s corporate charter in 19° 4 for failure to file an annual report. A-25 Clark’s other primary contention is that the de facto merger doctrine is inapplicable here because there is no showing that the 1969 sale was consummated to defraud creditors. We cannot agree. While evidence of fraudulent intent may strengthen the case for finding a de facto merger, such evidence simply is not an indispensable requirement in every case. See supra, at 1291. Indeed, the existence of a fraudulent transfer in and of itself generally is considered to be an exception, in addi- tion to the de facto merger doctrine, to the general rule that a purchasing corporation is not liable for the debts and lia- bilities of the selling corporation. See Acheson v. Falstaff Brewing Corp., 423 F.2d 1327, 1329-1330 (9th Cir.1975), J.F. Anderson Lumber Co. v. Myers, supra, 206 N.W.2d at 368-369; Annot., supra, 49 A.L.R.3d at 883-890. Accordingly, we find no merit to Clark’s objections. The district court, therefore, did not err in finding Clark is liable to the Kellers for Melroe’s negligence under the de facto merger doctrine. A-26 IV. CONCLUSION For the reasons stated above, the decision of the district court is affirmed. District Court, D. North Dakota, S.E. Div. Kelier et al. v. Clark Equipment Company et a! Nos. 4839 and 4875 Decided Mar. 30, 1981 PATENTS 1. Construction of specification and claims—Claim defines invention (§22.30) Patent claims are measure of patentee’s rights. 2. Infringement—Tests of—In general (§39.801) Specific format employing two analytical techn jues is generally followed in determining infringement issue; if there is no literal infringement, there may be infringement under doctrine of equivalents. 3. Infringement — Tests of —- Comparison with claim (§39.803) Patent claims’ literal words constitute only the starting point in literal infringement determination. 4. Construction of specification and claims—By specifi- cation and drawings—lIn general (§22.251) Construction and claims — Claim defines invention (§22.30) A-27 Although patent claims are sole measure of protection and patent is not limited to preferred embodiments shown in specifications, claims are construed in light of specifica- tion and drawings and both are read with view of ascertain- ing invention to determine claim’s scope. 5. Construction of specification and claims—By Patent Office proceedings—In general (§22.151) Patent Office proceedings should be considered in deter- mining claims’ scope. 6. Construction of specification and claims—By prior art (§22.20) State of prior art is important factor in construing claim’s scope; prior art cited in file wrapper gives clues as to what claims cover, as claim must be construed to be limited so as to exclude prior art. 7. Infringement — Tests of — Comparison with claim (§39.803) It is not enough to constitute literal infringement that claim’s words read literally on accused device; this is only initial hurdle in establishing literal infringement. 8. Infringement—Claims infringed in terms only (§39.20) Infringement — Identity of function or operation (§39.50) Not only do claim’s words have to read on accused de- vice in order to sustain literal infringement charge, but ac- cused device must be substantially identical with one al- leged to be infringed in result attained, means of attaining that result, and manner in which its different parts operate to produce that result; literal infringement charge is not sus- A-28 tained as to accused device that is substantially different in either of these respects. 9. Infringement — Substitution of equivalents — In gen- eral (§39.753) Infringement —- Tests of — Comparison with claim (§39.803) Infringement is not necessarily ruled out in event patent clairn’s words do not read literally on accused structure; doctrine of equivalents prevents one from avoiding infringe- ment by making changes in patent that take copied matter outside claim’s literal language, but add nothing to inven- tion; in Eighth Circuit, application of equivalency test en- tails making determination that infringing device is substan- tially identical to one alleged to be infringed in result at- tained, means of attaining that result, and manner in which its different parts operate and cooperate to produce that result. 10. Infringement — Combinations — Omission of ele- ment (§39.257) It must be shown that every essential element of combina- tion claim or its equivalent is embodied in accused device, in determining possible infringement; absent such showing, infringement cannot be upheld. 11. Infringement—Additions and improvements (§39.05) Addition of element to patented structure, as general rule, does not avoid infringement; it is doubtful that addition of wheel on each side which does not substantially change pat- ented vehicle’s function and means employed to perform that function avoids infringement. A-29 12. Infringement—Substitution of equivalents—In gener- al (§39.751) Infringement — Tests of — Comparison with claim (§39.803) Patent law would reward literally skill and not mechani- cal creativity if infringement test were whether claim’s words read literally on accused device; since law is to benefit in- ventor’s genius and not scrivener’s talents, claims must not only read literally on accused structures, but also structure must do same work, in substantially same way, and accom- plish substantially same result. 13. Presumption from patent grant—Patent Office consid- eration of prior art (§55.5) It is presumed that examiner who searched class and sub- class in which particular prior art patent was cross-refer- enced considered that patent and discarded it as being no more pertinent than art cited by him. 14. Estoppel—In general (§35.01) Notice and marking patented (§46) Marking product with patent number, at least in some instances, may estop marking party from asserting that prod- uct is not covered by patent. 15. Estoppel—In general (§35.01) Notice and marking patented (§46) Kenyon v. Automatic Instrument Co., 87 USPQ 301, does not stand for proposition that patent marking estoppel doctrine is not applicable in case in which patent plate head- A-30 ing “covered by one or more of the following patents” is allegedly vague and allegedly does not convey to public that patent in suit, which is one of at least nine patents listed, was embodied in device in suit. 16. Estoppel—In general (§35.01) Notice and marking patented (§46) No statute requires one to mark device with patent num- ber that does not identify patent embodied in device. 17. Estoppel—In general ($35.01) Notice and marking patented (§46) Court is hesitant to apply patent marking estoppel doc- trine partially because of absence of its application in recent case law and partially because more recent cases have used it as alternative ground for their decisions. 18. Patentability-— Anticipation— Prior knowledge, use or sale (§51.223) Title—Employer and employee—In general ( §66.301) Use and sale—Sale (§69.8) Person who in course of his employment as company pres- ident and on behalf of company took upon himself to file patent, assumed duty toward inventor to exercise reasonable care in doing so; by failing to inform company patent attor- ney of demonstrations of patented device of which he was aware and sales activities relating to device that he should have discovered and could have discovered with reasonable inquiry, he failed to exercise reasonable care required by circumstances, causing patent application to be filed late, which resulted in damages sustained by inventors. A-31 19. Pleading and practice in courts—State law considered (§53.73) Title—Employer and employee—In general ( §66.301) Although there are no cases construing N.D. Cent. Code Section 34-03-11, there is general body of common law that governs rights between employer and employee as it relates to inventions and that may aid court in discovering what North Dakota law is; as general rule, law does not regard ordinary employment contract as including right on em- ployer’s part to products of employee’s inventive genius; rather, it depends upon particular employment contract’s terms. 20. Titlk—Employer and employee—Shop right ($66. 307) Employer is recipient of implied, nonexclusive, royalty- free license, or “shop right,” where employee makes and reduces to practice invention on his employer’s time, using his employer’s tools and other employees’ services. 21. Titl—Employer and employee— Assignment ($66. 301) Employer of person who is employed for express purpose of using his inventive faculty for his employer to make in- vention and who succeeds in accomplishing assigned task during period of employment is equitable owner of inven- tion; that employee is obligated by way of implied contract, to assign to employer any patent that may be obtained on invention, since employee has only produced that which he was employed to invent. A-32 22. Titlk—Employer and employee—In general (§66. 301) Respective rights and obligations of employee’s inven- tion arise from employment contract. 23. Title—Contracts—In general (§66.201) Title—Employer and employee— Assignment (§66.303 ) Any particular relevance of fact that employer prepared contract to be signed by all employees by which they would agree to assign all future patent rights arising from their employment may have toward ownership of patent is out- weighed by fact that contract was never signed; thus, it sup- ports no inference on employer’s part to claim sole ownership » in inventions developed by employees, but instead, fact that it was recommended by legal counsel and not done rebuts inference. 24. Title—Co-owners ($66.25) Titlke—Employer and employee—In general (§66.301) Title—Employer and employee— Assignment ( §66.303 ) Fact that employees-owners of one patent assigned their rights to their employer could, under ordinary circum- stances, be evidence of agreement to assign all inventions; this would perhaps be applicable had employer demanded assignment of patent in suit and owner refused; it cannot be inferred from company president’s failure to assign his own interest in patent until requested to do so in con- nection with law suit that company intended to claim sole ownership over patent prior to law suit. A-33 25. Titlkk—Employer and employee— In general (§66. 301) It is reasonable to infer from employer’s agreement to pay royalties that it recognized employee-inventor’s owner- ship interest in patent as co-inventor and never claimed sole ownership; notwithstanding any implied right employer may have to employee’s invention, parties may contract as they wish and employer may contract away implied right that would come into existence if parties had remained silent; thus, when patent owner and his employer have con- tracted on royalty basis, question of employer’s implied rights to patent is excluded; fact that employer and suc- cessor employer, pursuant to royalty license, paid employees royalties on patent for some nine years is inconsistent with employer’s contention that employees never had interest in patent. 26. Applicants for patent—In general (§14.1) Applicants for patent—Who may apply (§14.7) Two or more persons who jointly make invention must apply for patent jointly and each must sign application; law ordinarily imposes no duty upon co-inventor to file applica- tion to protect other co-inventor’s interest in patent. 27. Applicants for patent—In general (§14.1) First co-inventor has duty to exercise reasonable care in filing application so as to protect second co-inventor’s in- terests in invention under circumstances in which second co-inventor had taken steps to make application for patent, first co-inventor on employer’s behalf represented to second co-inventor that employer would use its own attorney to proceed on patent application, first co-inventor then took A-34 affirmative steps to secure patent protection, and second co-inventor relied on first’s efforts and not daring to interfere with those efforts did not take any further action on patent application. 28. Patentability — Anticipation — Prior knowledge, use or sale (§ 15.223) 35 U.S.C. 102(b) provides that person is not entitled to patent on invention that was in public use or on sale in this country more than one year prior to patent application’s date; failure to abide by Section 102(b) requirement results in destruction of inventor’s rights in what would otherwise be valuable patent. 29. Applicants for patent—In general ($14.1) Patentability — Anticipation — Prior knowledge, use or sale (§51.223) Pleading and practice in Patent Office — In general (§54.1) Reasonable care in filing patent application includes ex- ercising reasonable care in complying with Section 102(b) provisions; in certain cases, this would include exercising reasonable precaution in gathering necessary information and fully disclosing this information to patent attorney. 30. Accounting—Parties liable (§11.45) Applicants for patent—In general ($14.1) Patentability — Anticipation — Prior knowledge, use or sale (§51.223) Title—Employer and employee—In general ( §66.301 ) Reasonable care, in light of extreme importance of filing application within statutory time, requires that first co-in- A-35 ventor, who has taken from second co-inventor right to file patent application, who as company president had access to sales records, make such inquiry as would be necessary to inform himself and patent attorney of company’s sales activ- ities; failure to make simple inquiry at sales office that would have placed reasonable person in his position and responsi- bility on notice of sales activities is negligence; since he was acting in furtherance of, and in scope of his employment, his negligence is attributable to his employer. 31. Accounting—Damages—In general (§11.251) Accounting — Reasonable or established royalty (§11.65) Infringement damages are those that are adequate to com- pensate for infringement, but in no event less than reason- able royalty for infringer’s use of invention. Consolidated actions by Louis J. Keller and Cyril N. Keller, against Clark Equipment Company and Clark Equipment A.G., for royalties, negligence, and breach of contract, and by Clark Equipment Company, against Louis J. Keller and Cyril N. Keller, for declaration of patent in- validity and or rights and obligations under license agree- ment, in which defendants counterclaim for royalties, neg- ligence, and breach of contract (Williamson, Bains & Moore, third party defendant). Judgment that Clark Equip- ment Company is not liable under royalty agreement and that Clark Equipment Company is liable for damages re- sulting from late filing of patent. See also 197 USPQ 83, 197 USPQ 209, 200 USPQ 64, and 206 USPQ 478. Ry, A-36 Malcolm L. Moore, Herman H. Bains, and Williamson, Bains, Moore & Hansen, all of Minneapolis, Minn., and Alan Foss, and Van Osdel, Foss & Miller, both of Fargo, N.D., for Louis J. Keller and Cyril N. Keller. John D. Kelly, and Vogel, Brantner, Kelly, Knutson, Weir & Bye, both of Fargo, N.D., Thomas D. Allen, Fred E. Schulz, Wildman, Harrold, Allen & Dixon, James P. Ryther; and McDougall, Hersch & Scott, all of Chicago, Ill., and Harry G. Thibault, Buchanan, Mich., for Clark Equipment Company. Benson, Chief Judge. Procedural History The above entitled consolidated actions arise out of a pat- ent license agreement whereunder Louis and Cyril Keller, residents of North Dakota, granted exclusive licenses on three interrelated patents to Clark Equipment Company, a corporation incorporated under the laws of Delaware and with its principal place of business in Michigan. Also at issue was a similar agreement between the Kellers and Clark Equipment, A.G., a Swiss corporation which is a wholly owned subsidiary of Clark. Involved were United States Pat- ents 3,151,503 (hereinafter 503 patent), 3,231,117 (here- inafter 117 patent), and Design Patent 195,254 (hereinaf- ter 254 patent). The licensed patents relate to a self-propelled four wheel drive skid steer loader manufactured by Clark and others. Clark manufactures the loader at its Melroe Division, for- merly the Melroe Manufacturing Company, Gwinner, North Dakota, and sells it under the trace name “Bobcat.” A-37 Civil Action 4875 is a declaratory judgment action be- tween Clark, plaintiff, and the Kellers, defendants. The ac- tion was originally filed in the United States District Court for the Western District of Michigan on October 10, 1972, seeking in part, an adjudication of the licensed patents. Upon the Kellers’ motion, the action was transferred to the United States District Court for the District of North Da- kota on August 27, 1973. On September 19, 1973, the Kellers filed their answer and counterclaim. Their counterclaim in part is for royalties al- legedly due under their license agreement with Clark and for their share of royalties due from Owatonna Manufac- turing Company, Inc., and J. I. Case Company, nonexclusive sublicensees under the agreement. The counterclaim further alleges that Clark, as a succes- sor to the Melroe Company, had been negligent in failing to file the patent application on the 117 patent within the one year period after the invention had been in public use or on sale. 35 U.S.C. §102(b). In an amended pleading filed on January 31, 1979, the Kellers alleged additionally that Clark, as successor to the Melroe Company, had breached a contract with the Kellers to timely file the 117 patent application. In response to the negligence claim, Clark filed a third- party complaint against the law firm of Williamson, Bains & Moore as third party defendant, alleging that if there wa: negligence in filing the application for the 117 patent, the third party defendants, or predecessor partnerships or part- ners, who were representing the joint inventors, Louis J. Keller and Clifford E. Melroe, had a professional obligation to investigate the facts and see that the obligation was filed on time. It is alleged that should the 117 patent be found A-38 invalid under 35 U.S.C. §102(b), the third party defendants would be liable to Clark as successor of the Melroe interest. On April 29, 1974, the court bifurcated the portion of the counterclaim directed at Clark for late filing of the 117 pat- ent, and the third party action. Civil Action 4839 was originally filed by the Kellers in this court on July 25, 1973, against Clark, setting forth the corresponding allegations in the answer and counterclaim of Civil Action 4875, and naming as an additional defendant Clark Equipment, A.G. The complaint alleged that Clark Equipment A.G., pursuant to a similar license agreement with the Kellers, was an exclusive licensee under certain foreign patents corresponding to the licensed patents in the agreement with Clark, and had fuiled to account and pay for royalties allegedly due under this contract. This action was consolidated with Civil Action 4875 on December 21, 1973. On July 18, 1974, the court ordered a separate trial on the issue of validity of the three patents. After a lengthy trial to the court, in an unpublis!ied memorandum decision dated September 23, 1976, this court held the 503 patent and the 254 patent to be valid. The court found the subject matter of the 117 patent to be nonobvious to one possessing ordi- nary skill in the art, but concluded that the patent was in- valid pursuant to the provisions of 35 U.S.C. 102(b) be- cause a machine incorporating all the elements of the 117 patent was “on sale” more than one year prior to the filing of the patent application. On appeal, the Eighth Circuit Court of Appeals affirmed this court’s holding as to the 503 and 117 patents, but reversed this court’s holding that the 254 patent was valid. Clark Equipment Co. v. Keiler, 570 F.2d 778, 197 USPQ 209 (8th Cir. 1978), cert. denied. 439 U.S. 825, 200 USPQ 64 (1978). A-39 The third party complaint against the law firm of William- son, Bains & Moore has been voluntarily dismissed with prejudice. Furthermore, the Kellers’ claim against Clark Equipment, A.G., in Civil Action 4839, and the question of foreign patents has been settled and dismissed as an issue in this litigation. Clark moved for summary judgment on the 117 patent late filing issue, alleging the claim was barred by the statute of limitations and that Cyril Keller was not a proper party because he was not a named co-inventor on the 117 patent. The motions were denied. Keller v. Clark Equip- ment Co., 474 F.Supp. 966, 206 USPQ 478 (D.N.D. 1979)." Issues Remaining Several issues remain to tye decided. One of the unresolved issues in Civil Actions 4875 and 4839, is whether Clark is liable to the Kellers under their royalty agreement as it re- lates to the 503 patent. This requires a determination whether the structure claimed and disclosed in the 503 pat- ent is embodied in any, loader manufactured by Clark and its sublicensees from the time Clark ceased paving royalties to the Kellers. Another related issue is whether the doctrine of patent marking estoppel estops Clark from denying the incorporation of tne 503 patent structure in its skid steer loaders. A second unresolved issue is whether Clark is liable to the Kellers for damages resulting from the late filing of the 117 patent. This involves determining whether the Melroe Man- ufacturing Company breached either a contractual duty or +Fer a more detailed procedural history of this case, see this court's memorandum decision of September 23, 1976, and the Eighth Circuit's opinion on appeal, supra. A-40 tort duty owed to the Kellers by failing to diligently prepare and timely file the application for the 117 patent. In the event this issue is found in favor of the Kellers, the additional issue of whether Clark, as successor to the Melroe Manu- facturing Company, can be held liable for Melroe’s breach of duty, must be decided. Jurisdiction The court has jurisdiction in Civil Action 4875 under the Declaratory Judgment Act, 28 U.S.C. §2201 and 2202; the amount in controversy exceeds the sum of Ten Thousand Dollars ($10,000.00) exclusive of interests and costs; is between citizens of different states, 28 U.S.C. §1391 (a) and §1338, and venue lies in this judicial district pursuant to 28 U.S.C. §1391 (a). In Civil Action 4839, the court has jurisdiction over the subject matter under 28 U.S.C. $1332(a), there being di- versity of citizenship, the amount in controversy exceeds Ten Thousand Dollars ($10,000.00), and venue lies in this judicial district under 28 U.S.C. §1391(c). Royalty Liability Under the 503 Patent The Evidence, Findings, and Conclusions 1. U.S. Patent No. 3,151,503 was issued to Louis J. Keller and Cyril N. Keller on October 6, 1964. The 503 patent is entitled “TRANSMISSION SYSTEM.” 2. Clark is the successor in interest to the former Mel- roe Manufacturing Company, which was exclusively lic- ensed by the Kellers under the 503 and 117 patents pursuant to an October 1, 1963 written agreement. (Ex. 553). A-41 3. When Clark acquired the Melroe Company in 1969, the licenses as well as the other assets of Melroe were trans- ferred to Clark. After Clark acquired the Melroe Company, it continued to pay royalties to the Kellers pursuant to the October 1963 license agreement. 4. In May, 1971, Clark entered into its own license agreement with the Kellers which superceded the 1963 agreement. A copy of the agreement is in evidence as Ex- hibit 55i. By the terms of the license agreement, Clark ob- tained an exclusive license, with the right to grant sub- licenses, to make and sell self propelled loader vehicles embodying the inventions disclosed and claimed in the aforementioned 503, 117 and 254 patents. 5. Pursuant to the provisions of paragraph 4 of the license agreement, Clark agreed to pay the Kellers a royalty of Fifteen dollars ($15.00) for each licensed vehicle made and sold by Clark in a country where there is a licensed pat- ent and Ten Dollars ($10.00) for each licensed vehicle made or sold by a sublicensee of Clark in a country where there is a licensed patent. 6. In March 1970, Clark entered into a nonexclusive sublicense agreement relating to the three patents with J. I. Case Company. In December 1970, Clark entered into a similar agreement with Owatonna Manufacturing Company, Inc. (Exs. 554,555). 7. Clark paid royalties to the Kellers under their May 1971 agreement until early 1972. Shortly thereafter it filed the declaratory judgment action. 8. The application for the 503 patent was filed on De- cember 1, 1958. A copy of the patent was received into A-42 evidence as Exhibit 1, and is attached in the appendix to this Memorandum. Exhibit 8 is a copy of the Patent Office file wrapper of the 503 patent. Exhibit 613 is a blow up of the drawings of the 503 patent. 9. The 503 patent application disclosed a transmission system for self propelled vehicles having independently ro- tatable propulsion wheels. As disclosed by the drawings of the 503 patent, each of the two propulsion wheels W has a separate but identical transmission system consisting of a pair of clutch units 9 and 9’ rotating on stub shafts 12 and 12’ connected to plate P. Each clutch unit consists of a pair of clutch plates 11, 11’ and 10, 10° adapted for movement into radial frictional clutching engagement with one another when axial pressure is exerted on cam followers 17 and 17’. Mounted on plate P and interposed between plate P and cam followers 17 and 17’ is an elongate slideable shifting bar 18 tapered on each end to form cam elements 19 and 19° which can be selectively engaged with cam followers 17 and 17’ to move their respective clutches into driving en- gagement. The thinner middle portion of bar 18 allows both clutches to be simultaneously disengaged resulting in idling of wheel W. Chain belt 20 connects the source of power with sprockets 10a and 10a’ on the outer clutch plates 10 and 10 of both clutches, causing them to be ro- tated in the same direction. Chain 21 is trained over sprock- et 11a on inner clutch plate 11’ and under sprocket 11a of inner clutch plate 11 and around sprocket 23, which in turn is connected to the propulsion wheel W by chain 25. By training chain 21 under one sprocket wheel and over the other, the chain, as well as wheel W will be driven in oppo- site directions according to which clutching unit is engaged, ae A-43 thereby providing selective reverse and forward driving of the propulsion wheel W. This perimits the transmission sys- tem in cooperation with the propulsion wheels to perform the dual functions cf driving and steering the vehicle. 10. The 503 patent application originally contained 11 claims reciting a transmission system for a self propelled vehicle. (Ex. 8. File Wrapper of 503 patent, pages 8-13). 11. In Patent Office action on April 13, 1959, the exam- iner rejected all the claims. (Ex. 8 File Wrapper of 503 pat- ent, pages 16 and 17). Claims 1-7 and 9 and 10 were re- jected as fully anticipated by the Loyd patent. As described by the examiner, Loyd disclosed a self-propelled vehicle having independently rotatable propulsion wheels, a source of power, a belt driven mechanism for transmitting driving power to each wheel, a clutch assembly comprising a pair of clutches adapted to be moved into and out of clutching engagement, one of said clutches being connected to drive the propulsion wheel in a forward direction when engaged, the other clutch being connected to drive the propulsion wheel in a backward direction when engaged and shifting means adapted to selectively engage said clutches. 12. The examiner deemed claims 8 and 11 as unpat- entable over Loyd in view of the patent in Schreck. 13, The Schreck patent was introduced into evidence as Exhibit 230. Exhibits 224 and 225 are blowups of the patent drawings. In its memorandum decision of September 23, 1976 this court described the Schreck patent as follows: The Schreck patent discloses a self-propelled dolly which is controlled by an operator walking in front of the dolly. As disclosed by the drawings of the Schreck A-44 patent, steering and driving control is achieved through a draft tongue 6 having a rotatable gripping handle 61. A linkage bar 63 connected to handle 61 serves to move a link bar 51 (Fig. 6) for actuation of a pair of clutch units 21, 31 and 22 and 32 through crank arms 49, 50 connected to the opposite ends of link 51. The two clutch assemblies are mounted on upper and lower shafts 16, 17. Shiftable collars 39, 46 on the clutch shafts serve to engage the clutches in response to axial displacement of those collars by thrust pins 58 as the collars are rotated simultaneously by link 51 and crank arms 49, 50. The single dolly support wheel 5 of Schreck is rotationally mounted for steering action by swinging movement of the draft tongue 6. Upward movement of draft tongue 6 stops the vehicle by urg- ing brake shoe 68 against wheel 4. With the draft tongue 6 in an upward position, gripping handle 6 can- not be moved in such a way as to engage the clutches | for forward movement of the dolly. Power is trans- mitted from a motor 12 through a chain 29 to the in- put sprockets 26, 27 on the clutch shafts 16, 17. A | final drive chain 42 to the dolly wheel 4 has its inside | face wrapped around clutch output sprocket 36 and its outside face wrapped around lower clutch outside sprocket 37. Thus wheel 4 will be driven forwardly or rearwardly depending upon whether the upper or low- er clutch assembly is engaged by hand rotation of handle 61. 14. In reference to claims 8 and 11 the examiner was of the opinion that it would not constitute an invention to sub- stitute a forward and reverse drive means such as that shown A-45 by Schreck for the forward and reverse means of Loyd. This was felt to be an obvious step to one skilled in the art. The examiner also noted that the Schreck patent teaches the con- cept of training the driven belt over one driving sprocket and under the other driving sprocket, said sprockets driving in the same direction, so as to obtain a forward or reverse drive of the driven belt depending on which clutch is en- gaged. It was further noted that Schreck disclosed a single control means for simultaneous engagement of one clutch and disengagement of the other. (Ex. 8, page 17). 15. Original claim 11 had claimed the following combi- nation: In a self-propelled vehicle having independently ro- tatable propulsion wheels and a source of power for driving said wheels, a separate transmission system for propelling each of said wheels, each said transmission system comprising a pair of clutches, each suid clutch comprising a pair of rotatable, coaxially mounted clutch plates adapted for movement into and out of frictional clutching engagement with one another, belt drive means interconnecting one clutch plate of each clutch with each other and with the source of power and adapted to rotate said clutch plates simultaneously in the same direction, belt drive means interconnecting the other clutch plate of each clutch with each other and with the propulsion wheel, the connection between the belt drive and the clutch plates being such that each plate drives the belt and propulsion wheel in an oppo- site direction to provide forward and reverse drive for said wheel, and a movable shifting member adapted to selectively engage the clutches to transmit forward or A-46 reverse driving power to the propulsion wheel or simul- taneously disengage both clutches to permit idling of said wheel. 16. In response to the rejection by the examiner of its previous claims, the Kellers, through their patent attorney Thomas Lennon, filed an amended application of July 6, 1959. In it they cancelled claims 1, 2, 3, 4 and 10, amended claims 5, 6, 7, 8, 9 and 11 and added new claim 12. (Ex. 8, pages 18-23). 17. Claim 11 was amended by deleting language in the last four lines and adding language so that the last portion of the claim read as follows: * * * provide forward and reverse drive for said wheel, cam follower means associated with each of said clutches, and a movable shifting member having a cam- ming surface opposed to and contiguous with adjacent pairs of said cam follower means, said camming sur- face including a pair of drive promoting cam portions and an idling portion and means for moving said mem- ber to selectively engage one of said cam followers or with said idling portion to transfit forward or reverse driving power to said propulsion [sic] wheel or simul- taneously disengage both clutches to permit idling of said wheel. 18. Newclaim 12 had a substantially similar recitation, but more specific, of an elongate, slidable shifting member having a pair of longitudinally spaced apart protruding cam portions contiguously opposed to cam follower means car- ried by clutches in combination with a single operating mem- A-47 ber in the vehicle cab for reciprocating the slidable member across the cam followers to selectively engage one of the cam portions with one of the cam follower means to driv- ingly engage one of the clutches. (Ex. 8, page 20). 19. In remarks made by the Kellers’ attorney in the amendment, it was argued that it would not be obvious to one skilled in the art to substitute the drive system of Schreck in the structure of the Loyd patent. In addition he made the following argument: [T]he shifting mechanism disclosed by Schreck for op- tionally moving his clutches into and out of driving en- gagement is quite dissimilar from that shown by appli- cant and claimed by him, the shifting mechanism of the Schreck device being considerably more compli- cated and requiring a greater number of elements and a complicated linkage which is more likely to result in malfunctioning then [sic] is applicants [sic]. (Ex. 8, pages 22 and 23). 20. Amended claim 5 reads as follows: In a self propelled vehicle having independently ro- tatable propulsion wheels, and a source of power for driving said wheels, a transmission system for each wheels [sic] each said system comprising two pairs of clutching members, each of said pairs being adaptable for moving into and out of clutching engagement with one another, means connecting one clutching member of each pair with the source of power to drive said members, means connecting the other clutching mem- ber of each pair with the propulsion wheel in such fashion as to cause forward or reverse drive depending on which pair of clutching members are engaged, ) A-48 cam follwer [sic] means associated with each of said pairs of clutching members, and shifting means includ- ing a cam member adjacent said cam followers and selectively cammingly engaging one or the other of said cam followers to selectively move one or the other of said pairs of clutch members into clutching engage- ment so as to selectively drive the propulsion wheel forward or back as desired. 21. On November 10, 1959, the examiner made his second report which stated in part as follows: Claims 5 and 6 are rejected as unpatentable over the patent of record to Loyd in view of the patent of record to Schreck. It would be considered obvious to one skilled in the art and an unpatentable step to substitute the forward and reverse unit of Schreck for the forward and reverse unit at each: wheel of the Loyd device. Note that elements 39 of Schreck may be termed cam mem- bers and elements 58 may be termed cam follower means. Claims 7-9 were rejected as indefinite. The examiner al- lowed claims 11 and 12 which became claims | and 2 of the 503 patent. (Ex. 8, page 24). 22. In response to the second report of the examiners, the Kellers on March 30, 1960, further amended their appli- cation. They amended claims 5-9 and added new claims 13-21. (Ex. 8, pages 25-37). 23. On June 29, 1960, the examiner deemed the amend- ment to be incomplete, (Ex. 8, page 38), whereupon the Kellers again amended the application on July 19, 1960. (Ex. 8, pages 39-50). A-49 24. On April 25, 1961, the examiner, citing three new patents, including Hellwarth, rejected the amended claims as being unpatentable over the prior art. The Hellworth patent is Exhibit 229. 25. In response to the examiner’s actions, the Kellers amended their application on October 27, 1961. They can- celled claims 5, 6, 7, 9, 15, 16 and 20, amended claims 13, 14, 17 and 18, and added new claims 22 and 23. (Ex. 8, pages 54-63). 26. In remarks to the examiner, the Kellers’ attorney stated that new claim 22 was drawn along the same general lines as allowed claim 11 and differed therefiom only in the recitation of the directions in which the clutch plates are rotated. He further stated as to new claim 23 as follows: New claim 23 is drawn along the same lines as new claim 22 with the exception that the shifting means has been recited in different terms so as to provide appli- cant with a scope of protection different from that pro- vided by allowed claims 11, 12 and new claim 22. Since these new claims 22 and 23 are patterned along the same general lines as allowed claim 11, they are also bel'eved to be in allowable form. (Ex. 8, page 58). 27. As this court found in the validity portion of the trial (Memorandum decision of September 23, 1976, page 24), the same basic cam actuated clutch mechanism was again recited in application claims 22 and 23. This recitation included a movable shifting member with a pair of drive promoting cam portions and an idling portion and means A-50 for moving the shifting member to selectively engage one of the drive promoting cam portions with one of a pair of cam followers or with said idling portion to transmit forward or reverse driving power to a propulsion wheel or to simultane- ously disengage both clutches to permit idling of the wheel. Application claim 23 included a similar recitation of cam actuating means for the vehicle clutches, in slightly different form. 28. In action taken on February 2, 1962, the examiner allowed application claims 11, 12, 22 and 23, and rejected all others as being anticipated by the prior art. (Ex. 8, pages 64-67). Application claims 22 and 23 became claims 3 and 4 of the 503 patent. 29. The Kellers’ subsequent efforts to obtain patent pro- tection on the vehicle itself were unsuccessful, for it was the position of the examiner as well as the U.S. Patent Office Board of Appeals that the Hellwarth patent already disclosed a land vehicle with independently rotatable propulsion wheels which could be used for steering the vehicle. (Ex. 8, pages 131-33). 30. The accused device is a clutch driven skid steer loader manufactured by Clark and its two sublicensees J. I. Case and Owatonna Manufacturing Company. 31. Clark also manufactures hydrostatic driven skid steer loaders. They do not employ a clutching mechanism. A hydrostatic machine is depicted in parts manual, Exhibit 12. 32. The drive system of the clutch driven loaders is typ- ified by the drive of the Model 610 “Bobcat” loader manu- factured by Clark and which is depicted in parts manual, Exhibit 10. (Tr. Trans. Vol. I, page 152). The clutch drive A-51 is also depicted in the drawings of the 117 patent. (Tr. Trans. Vol. 1, page 74, testimony of Robert Gottschalk). Exhibit 3 is a copy of the 117 patent. 33. Exhibits 4, 5 and 6 are blowups of the drawing of the clutch mechanism disclosed in the 117 patent. Exhibit 617 is a blowup of page A-13 of Exhibit 10, a figure depict- ing the transmission system of the Model 610 “Bobcat” loader. 34. The clutch driven “Bobcat” is a small self-propelled loader having four propulsion wheels. Referring to the 117 patent drawing, Fig. 4, Exhibit 4, there are two propulsion wheels 11 on each side, which rotate independently from the two on the opposite side. Each side has separate but identical transmission systems. Referring to exhibit 618, each trans- mission system consists of two clutches. Each clutch has an input plate 15 and an output plate 18 rotated around a com- mon axis, shaft 12. The source of power is transferred to sprocket 27. A chain connecting sprocket 27 with the two outer clutch plates 18, drives the two clutch plates simultane- ously in the same direction. Chain 19 is trained over one of the inner clutch plates 15 and under the other inner clutch plate, and around sprocket 20, which in turn transfers power to the propulsion wheels. This over and under arrangement results in the two propulsion wheels being propelled in either a reverse or forward direction depending on which clutch is engaged. The shifting member for the clutches consists of items 5, 10, and 11 which are operated by lever 6. Items 11 are externally threaded collars and are fixed to shafts 12. Items 5 are internally threaded rotary actuators which are positioned on collars 11. Item 10 is a bar connecting the rotary actuators in such a manner that when it is moved for- A-52 ward or backward, the actuators are rotated. The threads on one actuator and its corresponding collar is right handed while the other actuator and the corresponding collar is left handed. Thus, rotation of actuators 5 causes those actuators to move axially on the fixed threaded collars 11. The op- posite threaded arrangement causes one of the actuators to move toward and exert pressure on thrust bearing 13 and washer 14, and the corresponding clutch plate, engaging that clutch. Simultaneously, the other actuator is moved axially away from the other clutch, disengaging it. Reverse move- ment of bar 10 will in turn reverse the movement of the ac- tutors and change the engagement of the clutches. The actu- ators can be positioned so as to put both clutches in a neutral position. 35. The 1971 exclusive license agreement between Clark and the Kellers provided that Clark shall apply to all devices embodying the inventions disclosed and claimed in the three patents, patent markings for the three patents in accordance with the applicable statutes. 36. On the “Bobcat” skid steer loaders manufactured by Clark, a patent marking plate has been utilized. 37. The marking plates contain the heading “COV- ERED BY ONE OR MORE OF THE FOLLOWING PATENTS.” Exhibit 777 is an example of a patent mark- ing decal appearing on the loaders in 1979. 38. The plates are revised periodically. The procedure followed is that Clark’s legal staff contacts the Engineer- ing Liaison Supervisor, advising him that a patent number should be added or deleted. The Supervisor in turn initiates an engineering change request which initiates the changes A-53 required. Exhibit 776 is an example of such an engineering change notice. 39. Since 1972, the plates have been amended several times and at various times have contained a listing of from 9 to 38 United States Patents. Exhibit 228 is a compilation of all the patents which were shown on the marking plates for the skid steer loaders since 1972. 40. Until about 1974, Clark applied a universal patent marking plate on both their farm implements and their skid steer loaders manufactured by their Melroe Division. After that time, the Melroe Division split into an Agri- cultural Implement Division and a Bobcat division. There- after, each division had its own patent plate. 41. The same patent plates appear on both the clutch driven and hydrostatic models of the Bobcat loaders. The patents listed include some applicable only to hydrostatic loaders. Patents are also listed which cover optional at- tachments for the Bobcat not sold with the basic units. 42. U.S. Patent No. 3-151,503 has been listed on all patent marking plates for all models of skid steer loaders manufactured and sold by Clark from January 1, 1972 to date. (Response of Clark to Kellers’ Requests for Admis- sions, Ex. 619). Conclusions of Law The court concludes on the basis of all the evidence that none of the skid steer loaders manufactured by Clark and its sublicensees embody the intention disclosed and claimed in the 503 patent. The court further concludes that Clark is not estopped A-54 by reason of its marking the 503 patent number on their skid steer loaders from denying royalty liability. Discussion of the Facts and Application of the Law [1,2] Itis well settled that the claims in a patent are the measure of the patentee’s rights. L. S. Donaldson Company v. LaMaur, Inc., 299 F.2d 412, 417, 132 USPQ 486, 490 (8th Cir. 1962). In determining the issue of infringement, a specific format employing two analytical techniques is generally followed. First, the court determines whether there is literal infringement. And if there is no literal in- fringement, there may be infringement under the doctrine of equivalents. See Parmelee Pharmaceutical Company v. Zink, 285 F.2d 465, 469, 128 USPQ 271, 274-275 (8th Cir. 1961). [3] As stated in Graver Mfg. Co. v. Linde Co., 339 U.S. 605, 607, 85 USPQ 328, 330 (1950), “In determin- ing whether an accused device or composition infringes a valid patent, resort must be had in the first instance to the words of the claim. If [the] accused matter falls clearly within the claim, infringement is made out and that is the end of it.” The literal words of the patent claim constitute, however, only the starting point in the determination of literal infringement. [4, 5, 6] Although the claims made in the patent are the sole measure of protection, Aro Mfg. Co. v. Convert- ible Top Co., 365 U.S. 336, 339, 128 USPQ 354, 356-357 (1961), and although a patent is not to be limited to the preferred embodiments shown in the specifications, Conti- nental Paper Bag Co. v. Eastern Bag Co., 210 U.S. 405, 419 (1908); Ziegler v. Phillips Petroleum Company, 483 A-55 F.2d 858, 869, 177 USPQ 481, 4874488 (Sth Cir. 1973), cert. denied, 414 U.S. 1079, 180 USPQ 1 (1973), to deter- mine their scope, the claims are to be construed in the light of the specifications and drawings and both are to be read with a view of ascertaining the invention. United States v. Adams, 383 U.S. 39, 49, 148 USPQ 479, 482-483 (1966); Studiengesellschaft Kohle v. Eastman Kodak Co., 616 F.2d 1315, 1324, 206 USPQ 577, 585-586 (Sth Cir. 1980); Ellipse Corporation v. Ford Motor Company, 452 F.2d 163, 167, 171 USPQ 513, 514-515 (7th Cir. 1971), cert. denied, 406 U.S. 948, 173 USPQ 705 (1972); Ethyl Cor- poration v. Borden, Inc., 427 F.2d 206, 209, 166 USPQ 97, 99 (3rd Cir. 1970); Illinois Tool Works, Inc. v. Brunsing, 389 F.2d 38, 40, 156 USPQ 610, 610-611 (9th Cir. 1968); Food Processes, Inc. v. Swift Company, 280 F.Supp. 353, 357, 155 USPQ 640, 643-644 (W.D. Mo. 1966); Rota- Carb Corporation v. Frye Manufacturing Company, 197 F.Supp. 54, 60, 130 \'SPQ 307, 312-313 (S.D. Iowa 1961), aff'd, 313 F.2d 443, 136 USPQ 507 (8th Cir. 1963). Ad- ditionally, proceedings before the patent office should be considered in determining the scope of the claims. Graham v. John Deere Co., 338 U.S. 1, 33, 148 USPQ 459, 472-473 (1966); Ingersoll-Rand Company v. Brunner & Lay, Inc., 474 F.2d 491, 498, 177 USPQ 112, 116-117 (Sth Cir. 1973), cert. denied, 414 U.S. 865, 179 USPQ 321 (1973); Autogiro Company of America v. United States, 384 F.2d 391, 398-99, 155 USPQ 697, 703-704 (Ct. Cl. 1967); Morpul, Inc. v. Glen Raven Knitting Mill, Inc., 357 F.2d 732, 734, 149 USPQ 1, 2-3 (4th Cir. 1965). Finally, the state of the prior art is an important factor in construing the scope of a claim. See Graham v. John Deere Co., supra; Decca Limited v. United States, 420 F.2d 1010, 1013, 164 A-56 USPQ 348, 350-351 (Ct. Cl. 1970), cert. denied, 400 U.S. 865, 167 USPQ 321 (1970); Morpul, Inc. v. Glen Raven Knitting Mill, Inc., supra; Hansen v. Siebring, 231 F.Supp. 634, 642, 142 USPQ 465, 471 (N.D.Iowa 1964), aff'd, 346 F.2d 474, 145 USPQ 634 (8th Cir. 1965), cert denied, 382 U.S. 943, 147 USPQ 541 (1965). The prior art cited in the file wrapper gives clues as to what the claims do not cover. Autogiro Company of America v. United States, supra at 399, 155 USPQ at 703-704, for it is axiomatic that a claim must be construed to be limited so as to exclude the prior art. Smith v. Mid Continent Inv. Co., 106 F.2d 622, 624, 43 USPQ 59, 60-61 (8th Cir. 1939). [7] Furthermore, to constitute literal infringement it is not enough that the words of the claim read literally on the accused device. This is only an initial hurdle in establishing literal infringement. In Westinghouse v. Boyden Power Brake Co,, 170 U.S. 537 (1898), the Court stated as follows: But even if it be conceded that the Boyden device cor- responds with the letter of the Westinghouse claims, that does not settle conclusively the question of in- fringement. We have repeatedly held that a charge of infringement is sometimes made out, though the letter of the claims be avoided. * * * The converse is equally true. The patentee may bring the defendant within the letter of his claims, but if the latter has so far changed the principle of the device that the claims of the patent, literally construed, have ceased to represent his actual invention, he is as little subject to be adjudged an in- fringer as one who has violated the letter of a statute has to be convicted, when he has done nothing in con- flict with its spirit and intent. A-57 Id. at 568 (citations omitted). [8] Therefore, in order to sustain a charge of literal in- fringement, not only do the words of the claim have to read on the accused device, but the accused device must be substantially identical with the one alleged to be infringed in the result attained, the means of attaining that result, and the manner in which its different parts operate to pro- duce that result. If the accused device is substantially differ- ent in either of these respects, the charge of literal infringe- ment is not sustained. Graver Mfg. Co. v. Linde Co., supra at 608-09, 85 USPQ at 330-331; Nat. Rolled Thread, Etc. v. E. W. Ferry Screw Prod., 541 F.2d 593, 599-600, 192 USPO 358, 363-364 (6th Cir. 1976); Business Forms Fin- ishing Service, Inc. v. Carson, 452 F.2d 70, 76, 171 USPQ 519, 523-524 (7th Cir. 1971); Decca Limited v. United States, supra, at 1014, 164 USPQ at 351-352; Autogiro Company of America v. United States, supra at 399-400, 155 USPQ at 703-705; Skirow v. Roberts Colonial House, Inc., 361 F.2d 388, 391, 149 USPQ 882, 884-885 (7th Cir. 1966); Pursche v. Atlas Scraper and Engineering Co., 300 F.2d 467, 482, 132 USPQ 104, 115-116 (9th Cir. 1962). See also Ronson Patents Corp. v. Sparklets Devices, 202 F.2d 87, 93, 96 USPQ 201, 205-206 (8th Cir. 1953); Montgomery Ward & Co. v. Clair, 123 F.2d 878, 881, 51 USPQ 499, 502-503 (8th Cir. 1941). [9] In the event the words of the patent claim do not read literally on the accused structure, infringement is not necessarily ruled out. The doctrine of equivalents prevents one from avoiding infringement by making changes in a patent which take the copied matter outside the literal lan- guage of the claim, but add nothing to the invention. Graver A-58 Mfg. Co. v. Linde Co., supra at 607, 85 USPQ at 330. In this circuit, applying the equivalency test entails making the determination that, “ ‘the infringing device [is] substantially identical with the one alleged to be infringed in (1) the result attained; (2) the means of attaining that result; and (3) the manner in which its different parts operate and co- operate to produce that result.’ ” Farmhand, Inc. v. Craven, 455 F.2d 609, 611; 173 USPQ 1, 2-3 (8th Cir. 1972). The relationship between literal infringement and infringement under the doctrine of equivalents has been described as fol- lows: “Equivalence is the obverse of the discounting of lit- eral overlap. The latter is to protect the accused; the former to protect the patentee.” Autogiro Company of America v. United States, supra at 400 155 USPQ at 704-705. [10] The parties are not agreed as to the scope of any of the four claims of the 503 patent but are agreed that if claim 4 does not cover the Bobcat loader, neither do the other three. (Tr. Trans. Vol. 11 page 88, cross-ex-examina- tion of John C. Barnes). Thus, the first step in determining whether there is literal infringement is reading the language of claim 4 of the 503 patent on the accused device, the clutch-driven Bobcat loaders. In determining possible in- fringement, it must be shown that every essential element of the combination claim, or its equivalent, is embodied in the accused device. Absent such a showing, infringement cannot be upheld. Scharmer v. Carollton Mfg. Co., 525 F.2d 95, 103, 187 USPQ 736, 742 (6th Cir. 1975). Claim 4 reads as follows: In a self-propelled vehicle having independently rotat- able propulsion wheels and a source of power for driv- ing said wheels, a separate transmission system for pro- A-59 pelling each of said wheels, each said transmission system comprising a pair of clutches, each of said clutches comprising a pair of rotatable, co-axially mounted clutch plates adapted for movement into and out of frictional clutching engagement with one an- other, first belt drive means interconnecting one clutch plate of each clutch with each other and with the source of power and adapted to rotate said clutch parts simul- taneously, second belt drive means interconnecting the other clutch plate of each clutch with each other and with the propulsion wheel, one of said belt drive means being wound in the same direction with respect to the plates engaged therewith whereby movement thereof in one dtn:ction causes rotation of said plates in the same direction, the other of said belt drive means being wound in opposite directions with respect to the plates engaged therewith whereby movement thereof in one direction causes rotation of said plates in the opposite directions with respect to each other, cam follower means cooperatively interconnected with each of the said clutches, and shifting means including single cam members interconnected by a single shiftable connect- ing member and contiguous with each of said cam fol- lower means and adapted to selectively cammingly engage one or the other of said cam follower means upon shifting movement of said connecting member for shifting movement of said connecting member for selectively engaging one or the other of said clutches or to simultaneously disengage both of them to permit idling of said wheel. The accused device is a self-propelled vehicle havirg a source of power for driving the propulsion wheels. It has A-60 four propulsion wheels, all of which are not independently rotatable. There is not a separate transmission system for each wheel. However, the two wheels on one side of the ve- hicle are independently rotatable from the two wheels on the other, and each side has a separate transmission system. Referring to Exhibit 618, each transmission system is comprised of a pair of clutches. Each clutch is comprised of a pair of rotatable, co-axially mounted clutch plates 15, 18, adapted for movement into and out of frictional clutch- ing engagement with one another. There is a belt drive means interconnecting one clutch plate. 18 of each clutch with each other and with the source of power, 27 to rotate the clutch plates simultaneously in the same direction. There is a second belt drive means, 19 interconnecting the other clutch plate, 15 of each clutch with each other and with the propulsion wheel. This second belt drive is wound in op- posite directions with respect to plates 15 whereby move- ment of the belt in one direction causes rotation of plates 15 © in opposite directions with respect to each other. There are cam follower means, 13, 14 cooperatively interconnected with each of said clutches. The accused device has shifting means, including single members 5, interconnected by a single shiftable connecting member 10 and contiguous with cam follower means 13, 14. The shifting means are adapted to selectively engage one or the other of the cam follower means upon shifting movement of connecting member 10, for selectively engaging one or the other of the clutches or to simultaneously disengage both clutches to permit idling. [11] In just reading the words of claim 4 on the accused device, it would appear that the clutch driven Bobcat em- bodies all the elements of the claim, except for the language describing a transmission system for each wheel. The ac- A-61 cused structure differs from the claim in this respect only in having an additional wheel on each side. As a general rule the addition of an element to a patented structure does not avoid infringement. See King-Seeley Thermas Co. v. Refrig- erated Dispensers, Inc., 354 F.2d 533, 540, 148 USPQ 114, 119-120 (10th Cir. 1965); Hayes Spray Gun Company v. E.C. Brown Company, 291 F.2d 319, 326, 129 USPQ 383, 389 (8th Cir. 1961); Aluminum Company of America v. Sperry Products, Inc., 285 F.2d 911, 924, 127 USPQ 394, 404-405 (6th Cir. 1960); Ronson Patents Corp. v. Sparklets Devices, 202 F.2d 87, 93, 96 USPQ 201, 205-206 (8th Cir. 1953). Here, the addition of a wheel on each side does not substantially change the function of the vehicle and the means employed to perform that function. Therefore, it is doubtful that that aspect of change would avoid infringe- ment. Of greater concern, however, and that which was the focus of this portion of .e lawsuit, is whether the accused device embodies the essence of the 503 patent, the cam actuated shifting means. From a reading of the file wrapper it is evident that in each of the four claims it was the portion describing the shifting means which constituted invention over the prior art. For example, when patent claims 1 and 2 were allowed, the examiner rejected others such as claim 5, which were similar in all respects but had a broader recitation of the shifting means. Furthermore, it was that portion of patent claim 1 describing the shifting means which was amended before it was allowed. The examiner was of the opinion that a vehicle having independently rotatable wheels was not invention. This concept was disclosed in the Loyd patent. Nor was it a novel idea to train the driven chain over one A-62 driving sprocket and under the other so as to obtain forward or reverse drive depending on which clutch was engaged. This concept was taught in Schreck. The examiner also stated that it would be considered obvious to one skilled in the art and an unpatentable step to substitute the forward and reverse unit of Schreck for the forward and reverse unit of each wheel of the Loyd vehicle. The examiner had not changed his position on any of these matters when he allowed claim 1 after it had been amended. In addition, at this state of the patent prosecution, it appears that the examiner considered Schreck to be the most pertinent prior art concerning the shifting means. (Ex. 8, pages 17 and 24). The Kellers’ attorney, in referring to the shifting means in his remarks to the examiner, argued that the shifting mechanism disclosed by Schreck was dissimilar from that shown in the applicants’ device in that the latter was less complicated. Therefore, it is evident that the examiner allowed claims 1 and 2 because he was of the opinion that the cam actuating shifting means disclosed in those claims was patentable over the prior art of Schreck. When patent claims 3 and 4 were allowed, the Kellers’ attorney had argued that they were drawn along the same general lines as previously allowed claims 1 and 2. The court adopted this characterization of those claims when it ad- dressed the validity of the patent. Memorandum of Decision and Order, September 23, 1976, page 24. It further found that with respect to the cam actuated clutch drive features claimed in all of the claims of the 503 patent, the patents to Schreck and Hellwarth were the most pertinent prior art. Id. page 17, finding 40. In concluding the 503 patent was valid, the court on page 28 of its Order stated as follows: = A-63 * * * but there existed a gap in the teaching of the prior art—Hellwarth and Schreck—as to how to in- stall clutches in such a way to be able to actuate them to maintain steering and forward and reverse control in a smooth and effective manner from the operator’s compartment. The Kellers conceived a new clutch drive mechanism, and in addition combined with it an effec- tive, positive cam actuated clutch mechanism which proved to be highly effective and commercially suc- cessful. The solution by the Kellers was not readily obvious to one having ordinary skill in the pertinent art. On the basis of the foregoing, the court concludes the invention in the 503 patent lies in that portion of each of the four claims which describes the cam actuated clutch mechanism. [12] Looking solely to the language of claim 4, it could be argued that the words describing the shifting means read literally on the accused device. However, if this was the test for infringement, the patent law would “reward literary skill and not mechanical creativity.” Autogiro Company of America v. United States, supra at 399, 155 USPQ at 703- 704. “And since the law is to benefit the inventor’s genius and not the scrivener’s talents, claims must not only read literally on the accused structures, but also the structures must ‘do the same work, in substantially the same way, and accomplish substantially the same result.’ ” Id. at 399-400, 155 USPQ at 703-705. In the 503 structure, referring to Exhibit 613, shifting bar, 18 has protruding camming portions 19 and 19’ on each end. This bar is adapted to slide horizontally along plate P. Longitudinal slot 19b encloses stub shafts, 12 and 12’ so A-64 as to keep the shifting member in a contiguous relation with the cam follower means. When the bar is shifted horizon- tally one or the other camming portion will exert axial pres- sure on cam follower means 17 or 17’, v. ich in turn will move their respective clutches into driving engagement. The non-protruding portion of the shifting bar is of sufficient length that it can be positioned to disengage both clutches simultaneously. Figures 4, 7 and 8 of the 117 patent shown on Exhibits 4, 5 and 6, depict the shifting mechanism for the transmis- sion in a clutch-driven Bobcat loader. Referring to those drawings, internally threaded rotary actuator members, rep- resented by the numbers 95, 99 and 100 and «olored pink, are threaded on externally threaded collars 96, which col- lars are fixed in a stationary position on shaft 71 by means of pins 97. Shifting member 101 connects the two actuators at points 102 in such a manner that moving the member forward or backward will cause the actuators to rotate. Ro- tation of the actuators causes them to screw in or out in relation to fixed collars 96. One actuator and its correspond- ing collar is right hand threaded and the other actuator and its corresponding collar is left hand threaded. Therefore, when connecting member 101 is moved forward one of the actuators will screw toward and exert axial pressure on thrust bearing 93 and the corresponding clutch plate, while the other actuator will simultaneously screw away from its corresponding thrust bearing and disengage the clutch. Moving the shifting member the opposite direction will re- verse the movement of the actuators. The member 101 can also be positioned so as to put both clutches in a neutral position. The shifting mechanism of the accused device is sub- A-65 stantially identical with the structure of the 503 patent in the result attained. Both achieve selective engagement of the clutches for reverse or forward driving power. However, the means by which they attain that result and the manner in which their different parts operate to produce that result are substantially different. The shifting bar in the 503 patent requires plate P to aid in the camming action. It provides the axial force of the camming protrusions on bar 18. In the 503 structure the connecting member also acts as the cam and is contiguous with the came followers. In the ac- cused structure, connecting member 101 merely connects the cam members and is not contiguous with thrust bearing 93. Furthermore, in the accused structure, the force re- quired for the camming action is not provided by any side plate, but rather is provided by the screwing action on the stationary collars, 96. The importance of this latter distinc- tion can be gleaned from Louis Kellers’ testimony concern- ing the development of the rotary actuators. (Tr. Trans. Vol. I pages 137-143, direct examination. ) He described that when the 440 series Bobcat loader, a forerunner to the present Bobcat loaders, was being devel- oped, the same slide bar actuated shifting mechanism dis- closed in the 503 patent was used. However, a manufactur- ing problem with the frame developed which upset the slide bar mechanism. On a side plate on the 440, comparable to plate P on the 503 structure, some welding was done be- tween the two clutches. This caused the plate to warp and create a high spot on which the slide bar could rock. The resulting problems were sticking of the clutches, jerking, and lack of control over the machine. This problem never existed in the 503 structure since there was no welding done in that location. The problem was severe. As Louis Keller described A-66 it, “Now when that was warped on the other side, that slick bar gives serious trouble, serious problem in the manufac- turing of the frame. There ws no straight way to straighten it. Anything you weld on the flat plate in the middle, it’s going to warp. There was no way we couid hold it without a serious cost.” (Tr. Trans. Vol. I page 141). As a result, the threaded rotary mechanism was developed. The prob- lem of the warped plate was solved because the plate had nothing to do anymore with the actuating of the clutches. [13] The threaded rotary actuators later were incorpo- rated in the 117 patent. This court has already made a find- ing that the principle features recited in certain claims of the 117 patent which contributed to their allowance were the pairs of rotary threaded actuators for actuating the clutches of the vehicle. (Memorandum of Decision and Order, Sep- tember 23, 1976, page 29, finding 3). The court also found that when the patent examiner allowed the claims in the 117 patent, he had searched the class and subclass in which the 503 patent was cross-referenced. Id. page 51, finding 129. It is therefore presumed that the examiner considered the 503 patent and discarded it as being no more pertinent than the art cited by him. See Panduit Corporation v. Burndy Cor- poration, 517 F.2d 535, 538 n.2, 186 USPQ 75, 77 n.2 (7th Cir. 1975), cert. denied, 423 U.S. 987, 188 USPQ 48 (1975). It is evident that the rotary actuating shifting mechanism of the clutch driven Bobcat loader is substantially different from the 503 structure in both the means by which it attains the desired result and the manner in which its different parts operate to produce that result. The Bobcat shifting mechan- ism was developed to overcome deficiencies in the 503 structure. It was not a mere improvement over the 503 A-67 structure, but rather was an innovative device employing different principles to more effectively achieve the desired result, and a device later found patentable over the dis- closures of the 503 patent. As previously stated, the prior art is helpful in determin- ing what the claims of the 505 patent does not cover. Auto- giro Company of America v. United States, supra. Both the examiner and this court treated Schreck as pertinent prior art. Schreck was cited by the examiner both for teach- ing the over and under belt means and the control means for engaging and disengaging the clutches. (Ex. 8, File Wrapper of 503 patent, page 17). It was by distinguishing the shifting means portion of patent claims 1 and 2 from that disclosed in Schreck which led to their being allowed by the examiner. Since claim 4 was drawn along the same lines, Schreck is also relevant prior art as to it. This being the case, claim 4 must be read so as to exclude the shifting means disclosure of Schreck. The Schreck structure is described in its patent drawings appearing on Exhibits 224 and 225. Shifting collars 39 and 40 have extending arms 49 and 50. Connecting member 51 connects the arms so that the collars are constrained to rotate simultaneously in the same direction. When the connecting member is moved up or down, the shifting collars are rotated on shafts 16 and 17 respectively and interposed between shifting collars 39 and 40 and inner supporting plate 18. The shifting collar 39 and adjacent stationary collar 52 on upper shaft 16 and the corresponding elements on lower shaft 17 have on their opposed faces circumferentially spaced recesses 56 and 57, which provide seats for opposite ends of thrust pins 58. The pins are regularly spaced around the axis of the collars at A-68 an incination to the opposed faces of the collar. The pins are so disposed that upon rotating movement of either col- lar 39 and 40 in one direction the pins move toward a posi- tion parallel with the axis and exert an axial thrust on the collar. The thrust pins engaging one shifting collar are in- clined opposite to the pins engaging the other shifting collar so that pressure is applied to one collar when it is turned in one direction and to the other collar when it is turned in the opposite direction. When axial pressure is applied to a col- lar, it exerts pressure on washer 34 and clutch plate 31, engaging the clutch. Thus by moving connecting member 51 up or down, one or the other of the clutches will be en- gaged, providing forward and reverse power. A neutral posi- tion is also provided. A literal reading of the language of claim 4 relating to the shifting means so as to read upon Bobcat structure would also describe the Schreck shifting mechanism. Schreck has shifting means including single cam numbers 39, 40, contiguous with cam follower means 34, connected by a single shiftable connecting member 51. The single cam members are adapted to selectively cammingly engage one or the other of the shifting of connecting member 51 for selectively engaging one or the other of the clutches or to simultaneously disengage both of them to permit idling. But this is an impermissible reading, for a claim must be con- strued to avoid the prior art. Looking beyond the literal language of the claim, it is evident that although the 503 shifting means attains the same result as the Schreck shifting means, the means by which they attain the result are vastly different. The 503 patent achieves the desired result by a positive cam actu- ated clutch mechanism, with far less parts and linkages than A-69 required by Schreck. The Schreck patent was also consid- ered by the examiner before he allowed the claims of the 117 patent. (Memorandum of Decision and Order, September 23, 1976, page 51, finding 131). The threaded actuators were patentable over the disclosure in Schreck. But if the shifting means portion of claim 4 is read to cover the trans- mission system in the Bobcat it would also read on the shift- ing means structure disclosed in Schreck. The file wrapper is clear that when the 503 claims were allowed, the examiner did not intend to give them that scope. Assuming arguendo that the language of claim 4 reads literally upon the Bobcat transmission system, the latter “has so far changed the principle of the device that the claims of the patent, literally construed, have ceased to rep- resent [the alleged infringer’s] invention.” Westinghouse v. Boyden Power Brake Co., supra at 568. Although the shift- ing mechanism of the Bobcat is substantially identical to the 503 mechanism in the result attained, the means by which they attain that result and the manner in which their differ- ent parts operate to produce that result are substantially different. There is no literal infringement on the 503 by the accused device. Since the court has assumed that the words of claim 4 read literally on the accused structure, the court has also disposed of the issue of the doctrine of equivalents. In find- ing that the accused structure employs substantially differ- ent means to attain the desired result and its parts operate in a substantially different manner than the 503 structure, ‘the court has found that the Bobcat transmission system is not equivalent to the 503 structure. Farmhand, Inc. v. Craven, 455 F.2d 609, 611, 173 USPQ 1, 2-3 (8th Cir. 1972). A-70 Having decided that the 503 patent is not infringed by the Bobcat structure, it is necessary to consider the legal effect of Clark’s marking its loaders with the patent number. The Kellers contend that because of the marking, Clark is estopped to deny that the clutch driven Bobcat loaders em- body the invention disclosed by the 503 patent. [14] Case law appears to establish that at least in some instances, marking a product with a patent number may estop the marking party from asserting that the product is not covered by the patent. See e.g., Gridiron Steel Co. v. James & Laughlin Steel Corp., 361 F.2d 791, 797, 149 USPQ 877, 881-882 (6th Cir. 1966); Collis Co. v. Consol- idated Machine Tool Corp., 41 F.2d 641, 645, 6 USPQ 109, 113 (8th Cir. 1930); Kant-Skore Piston Co. v. Sinclair Mfg. Corp., 32 F.2d 882,885, 2 USPQ 112, 115-116 (6th Cir. 1929), cert. denied, 281 U.S. 735 (1929); Crane Co. v. Aeroquip Corporation, 364 F.Supp. 547,560, 179 USPQ 596, 606-607 (N.D. Ill. 1973), modified, 504 F.2d 1086, 183 USPQ 577 (7th Cir. 1974); Canaan Products, Inc. v. Edward Don & Company, 273 F.Supp. 492,502 (N.D.IIl. 1966), aff'd, 388 F.2d 540 (7th Cir. 1968); Touchett v. EZ Paintr Corporation, 150 F.Supp. 384,391, 113 USPQ 16, 21-22 (E.D.Wis. 1957); Smiths America Corp. v. Ben- dix Aviation Corp., 140 F.Supp. 46, 52-53, 108 USPQ 302, 306-307 (D.C. 1956), aff'd, 248 F.2d 621, 114 USPQ 518 (D.C. Cir. 1957); Lathrop v. Rice & Adams Corporation, 17 F.Supp. 622,626, 33 USPQ 72, 75-76 (W.D. N.Y. 1936). [15] Clark contends, relying on Kenyon v. Automatic Instrument Co., 186 F.2d 752, 755-56, 88 USPQ 301, 303- 304 (6th Cir. 1951), that the doctrine is not applicable in A-71 the instant case since the patent plate heading, “Covered by one or more of the following patents,” is vague and did not convey to the public that the 503 patent, one of at least nine patents listed, was embodied in the Bobcat loader. The Ken- yon case, however, does not stand for that proposition. The court considered the patent plate heading as only one of the factors leading it not to apply patent marking estoppel. This was recognized in Smiths America Corp. v. Bendix Aviation Corp., supra, where the court distinguished Kenyon and de- fendant was estopped to deny infringement where it had marked its product with plaintiff's patent number on a plate containing five patent numbers under the phrase, “Manu- factured Under One or More of the Following Patents.” [16] Clark also argued that the contractual provision concerning patent marking prevents patent marking estop- pel. It implied that the contract required it to mark the 503 patent number on its skid steer loaders regardless of whether , it covered the machine. However, that provision required Clark to mark devices which embodied one of the three pat- ents, in accordance with the applicable statutes. The court is aware of no statute that requires one to mark a device with a patent number which does not identify a patent em- bodied in the device. Nor did the contract require this ac- tion. This alone is no defense to patent marking estoppel. See Gridiron Steel Co. v. James Laughlin Steel Corp., supra at 796-97, 149 USPO at 880-882. [17] The court, however, is hesitant to apply the doc- trine, partially because of absence of its application in re- cent case law and partially because the more recent cases which have applied it appear to have used it as an alterna- tive ground for its decision. In Gridiron, supra, the district A-72 court had found that defendant’s device embodied features of the patent in question but went on to find patent marking estoppel. Id. at 796, 149 USPQ at 880-881. In Smiths America Corp. v. Bendix Aviation Corp., supra, Canaan Products, Inc. v. Edward Don & Company, supra and Kant- Skore Piston Co. v. Sinclair Mfg. Corp., supra, the court did not use the patent marking estoppel doctrine as the sole ground for its decision. Either the court found infringement or considered additional factors not present here. The deci- sion in Collis v. Consolidated Machine Tool Corp., supra, was a suit for unfair competition in the use of a trade name. The court held the defendant was not guilty of laches since its delay had been induced by reliance on plaintiff's false public representations that certain articles were protected by plaintiff's patent which in fact had expired. 41 F.2d at 645, 6 USPQ at 113. In Crane Co. v. Aeroquip Corporation, supra, the district court found that the accused device did not infringe the patent. Despite its holding of non-infringe- ment the court held that by reason of marking the patent number on the device, the defendant was estopped from denying it was liable for royalties. On appeal, however, the Seventh Circuit Court of Appeals found there was infringe- ment. In referring to the district court’s treatment of mark- ing estoppel, the court state [Text truncated at 120,000 characters. The full text is on the page linked above.] --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385011_0934%3A2. Public record. Not legal advice.