# Appendix — Technograph, Inc. v. General Motors Corp. > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385018_0220%3A2 ## Record - **Collection:** Supreme Court brief - **Document type:** Appendix - **Published:** January 1, 1985 - **Citation:** 474 U.S. 819 ## Text ; : ) ie Sure Court, U.S, 84-1795 ial No. 84- MAY 8 1985 ™ a: i. STEWAS. CLERK (<> IN THE Supreme Court of the United States OCTOBER TERM, 1984 Devex CoR?PORATION, ET AL., Petitioners, Vv. GeneraL Morors CoRPoRATION, Respondent. APPENDIX TO PETITION FOR WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT Sripney BENDER Jantne L. BENDER 1205 Franklin Avenue Garden City, New York 11530 (516) 742-4250 Ropert K. Payson 350 Delaware Trust Building Wilmington, Delaware 19899 (302) 658-6771 Counsel for Petitioners BEST AVAILABLE COPY Gale TABLE OF CONTENTS PAGE Opinion of the Third Circuit Court of Appeals dated November 28, 1984, affirming the judgment ee Rey CII io os wins no Foc ee I MKRd Koei es la Order of the Third Circuit Court of Appeals amend- ing Slip Opinion dated December 5, 1984........ \7a Opinion of the District Court of Delaware as amended August 22, 1983, on postjudgment interest ....... 19a Order of the District Court of Delaware dated Sep- tember 9, 1983, awarding postjudgment interest 16% and denying damages for delay in payment of IE GIONY on 4.6.05 visewertsce ded pantera. 26a Order of the District Court of Delaware dated August ERED Oe aR Sa pera eer eg er ae wr 28a Order of the Third Circuit Court of Appeals dated June 30, 1982, granting Plaintiffs’ Motion requir- ing payment of reasonable royalty and postjudg- ee TUE Te Te eee ree ee 30a PUNE Wkaeisa ste Kk woh CaO Eee KO Kee Rs 32a Order of the District Court of Delaware dated July 8, AONE pe Pc ee near eer mea eee a 35a Order of the District Court of Delaware dated July 9, PE Chae hu CRSA ew ONG cle uNeas cUbeenetuew ens 37a Order of the District Court of Delaware dated Sep- WOME SE GE hak 66 o4 od kesh ikee Ui ie elias 38a Order of the District Court of Delaware dated Sep- tember 28, 1982, to stay execution for postjudgment “srry Peer ere Serr eee Te Tee Tee 40a il TABLE OF CONTENTS Order of the District Court of Delaware dated June G, 1GRD ads vavisatsdavescutdanbaceeeeeeneeee Order of the District Court of Delaware dated June BR, BOS os ic cc anae cas end cuaen wees eee Order of the District Court of Delaware dated June DBD noice cc nvn ea seo eeu nsasa ae eee Amended Judgment of the Third Circuit dated De- ormaber 5, 1D . cncccnccnsantcanwebewseGaeemees Order of the Third Circuit denying Rehearing dated February £2, 9500 i. isk cadctnckcudnantaneeennen Special Master’s report dated February 7, 1980, rec- ommending that judgment be entered against Gen- eral Motors in the amount of $5,731,455.80 plus interest of $6,496,482.66, or a total of $12,227,938.46, and denying a reasonable royalty for infringement OR MOM-DUmGIeT CATES 6 an so 5 en ks edn ban eeen eens Opinion of the Deiaware District Court (Wright, S.J.) dated August 22, 1980, modifying the recom- mendation of the Special Master and, inter alia, awarding a reasonable royalty on bumpers in the amount of $8,813,945.50, plus prejudgment interest in the amount of $11,022, 854.97, totaling $19,836.- 800.47, totaling $19,836.800.47, and denying a reason- able royalty for infringement on non-bumper parts Final Judgment of the District Court of Delaware Gnaee Coctaber 6, IGG0... osc kanessdvesnsseinenees Opinion of the Third Circuit Court of Appeals dated December 15, 1981, affirming the judgment OF Ce TUTE COMES on 0 0c sncdswcnesi tenes Judgment of the Third Circuit Court of Appeals desea December 15, 1968 2 ovccscvccccsasesctuess PAGE 42a 44a 46a 47a 49a 50a TABLE OF CONTENTS Denial of GM’s Petition for Rehearing En Banc CS Oe eee Denial of plaintiffs’ Petition for Rehearing to the Panel dated January 13, 1982 .............scee0. Opinion of the United States Supreme Court dated May 24, 1983, affirming the award of pre-judgment Citi Eka ehorencbar ae ncnecserwece 253a la UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT NOS. 83-1770, 83-1771, 83-1892, 84-5003, 84-50ll, 84-5139, and 84-5141 DEVEX CORPORATION, TECHNOGRAPH, INC., WILLIAM C. McCOY, THEODORE A. TeGROTHENHUIS, FREDERICK B. ZIESENHEIM, MARJORIE TeGROTENHUIS, WILLIAM C. McCOY, JR., and KATHERINE M. BASSETT, Plaintiffs-Appellants, Cross-Appellees Vv. GENERAL MOTORS CORPORATION Defendant-Appellee, Cross-Appellant Appeal from the United States District Court for the District of Delaware D.C. Docket No. 3058 Submitted Under Third Circuit Rule 12(6) September 13, 1984 Before: GIBBONS, GARTH, and ROSENN, Circuit Judges (Opinion Filed November 28, 1984) ROBERT K. PAYSON, ESQUIRE Potter, Anderson & Corroon 350 Delaware’ Trust Building Wilmington, Delaware 19899 2a SIDNEY BENDER, ESQUIRE AARON LEWITTES, ESQUIRE JANINE L. BENDER, ESQUIRE Leventritt, Lewittes & Bender 1205 Franklin Avenue Garden City, New York 11530 Attorneys for Plaintiffs- Appellants, Cross-Appellees ARTHUR G. CONNOLLY. ESQUIRE ARTHUR G. CONNOLLY. JR.. ESQ. Connolly, Bove, Lodge & Hutz i220 Market Building Wilmington, Delaware 19899 Attorneys for Defendant- Appellee, Cross-Appellant OF COUNSEL: William A. Scheutz, Esquire General Motors Corporation Detroit, Michigan 48232 George E. Frost, Esquire Barnes, Kisselle, Raisch, Choate, Whittemore & Hulbert Birmingham, Michigan 480ll OPINION OF THE COURT ROSENN, Circuit Judge. This appeal arising out of the final stages of a 28 year old lawsuit for patent infringement. involves questions pertaining to postjudgment interest and interest on costs. Defendant General Motors (GM) has been ordered to pay plaintiffs (collectively referred to 3a hereafter as Devex) reasonable royalties in the amount of approximately $8.8 million. prejudgment interest in the amount of approximately Sll million. and approximately S7 million in postjudgment interest. Disputes remain over the rate at which postjudgment interest should have been assessed: whether plaintiffs should have been awarded interest on postjudgment interest, and whether plaintiffs should have been awarded interest on costs. We affirm. I. Litigation History Plaintiffs are the owners and licensees of Re-issue Patent #24.017 (the Devex or Hendricks patent), which covered a lubricating process used in the cold forming of automobile parts under pressure, and which expired in 1969. The original complaint in this case was filed in :956 in the Northern District of Illinois. That court held in 1962 that the Devex patent was invalid. The United States Court of Appeals for the Seventh Circuit reversed and remanded to the district court. Devex Corp. v. General Motors Corp., 321 F.2d 234 (7th Cir. 1963). cert. denied, 375 U.S. 971 (7th Cir. 1963). At that juncture, GM successfully moved to have the case transferred to Delaware. Devex Corp. v. General Motors Corp.. 146 U.S.P.Q. 346 (N.D. Ill. 1965). After an unsuccessful motion for summary judgment by Devex, and the ensuing trial for patent infringement. the United States District Court for the District of Delaware ruled that General Motors had not infringed Devex’s patent. 316 F.Supp. 1376 (D. Del. 1970). Devex appealed to this court. which reversed. Devex Corp. v. General Motors Corp.. 467 F.2d 257 (3d Cir. 1972). cert. denied. 4ll U.S. 973 (1973). The district court ruled on the damages issue in 1980. basing its decision partly on the report of the Special Master. Devex Corp. v. General Motors Corp.. 4a 494 F. Supp. 1369 (D. Del.1980). The court awarded Devex a judgment of SI9,726,236.55. consisting of $8,.813.945.40 in royalties and $10,912.291.15 in prejudgment interest.' Postjudgment interest and costs in an undetermined sum were also awarded. GM appealed this determination to this court which affirmed the holding of the district court. Devex Corp. v. General Motors Corp., 667 F.2d 347 (3d Cir. 1981). In response to petitions of GM and Devex, the Supreme Court granted a writ of certiorari to GM on the issue of the applicable standard for determining whether prejudgment interest should be awarded. The Court affirmed the award of prejudgment interest. General Motors Corp. v. Devex Corp., 103 S.Ct. 2058 (1983). While the parties were preparing for the Supreme Court case, the plaintiffs obtained an order from this court ordering GM to pay the amount of the uncontested part of the judgment, royalties in the sum of $8,813,945.40. GM paid this amount on July 7, 1982. After the Supreme Court's decision, in June 1983. GM paid $ll,022.854.97. the amount of the prejudgment interest. Two months later, the district court ruled that the rate of postjudgment interest would be 16% per annum. It ordered General Motors to pay the sum of $7.170,344.39 in postjudgment interest on the original SIS million judgment. Devex Corp. v. General Motors Corp., Civ. Action No. 3058 (D. Dei. Sept. 9. 1983). GM contended, however. as it does now, that the correct rate of postjudgment interest was 6%. and paid 1. General Motors. in fact. paid $11.022.854.97 in prejudgment interest pursuant to the court's order of an additional $3.071.22 for each day after August 31. 1980. up to and including the date of entry of judgment. Devex Corp. v. General Motors Corp.. 569 F. Supp. 1354. 1365 n.i. (D. Del. 1983). 5a plaintiffs only $2.2 million approximately; the remainder was paid into court pending the outcome of this appeai. The district court also awarded plaintiffs interest on their costs, but denied Devex’s motion for “delay damages” -- interest on the postjudgment interest. GM appeals from the district court's ruling fixing the rate of postjudgment interest at 16% and from its award of interest on costs. Devex cross-appeals from the court's denial of its motion for interest on the _ postjudgment interest. | Il. The Rate of Postjudgment Interest GM argues that the district court erred in awarding postjudgment interest at the rate of 16%. In determining the rate under state law pursuant to 28 U.S.C. § 1961 (1976), the district court heid that, under 6 Delaware Code § 209l(a), the correct rate was 16% -- 5% over the Federal Reserve discount rate. Devex Corp. v. General Motors Corp., 569 F. Supp. at 1365-67. Section 230l(a) provides: Where there is no expressed contract rate, the legal rate of interest shall be 5% over the Federal Reserve discount rate including any surcharge as of the time from which interest is due, provided that where the time from which interest is due predates April l8, 1980, the legal rate shall remain as it was at that time. Del. Cade Ann. tit. 6. § 230I(a) (Cum. Supp. 1982) (emphasis added). GM emphasizes that in the instant case the complaint was filed in 1956, and damages amounting to payment of a reasonable royalty were calculated as of that date. Devex Corp. v. General Motors Corp., 667 F.2d at 363-364. Therefore, according to GM, the time from which interest is due predates 1980. and the 6a district court should have applied the legal rate as it was prior to 1980, which was 6%.” In support of this contention, GM cites Delaware cases and federal diversity cases decided under Delaware law, which hold that, where damages are calculated as of a time before April 18, 1980, the prejudgment interest on those damages will be calculated at 6%, and that the postjudgment interest should be calculated at the same rate as the prejudgment interest. Pack & Process, Inc. v. Nabisco, Inc., Civ. 78-285, slip op. at 2-5 (D. Del. Sept. 18, 1984); Helmut A. Papendick v. Robert Bosch GmbH, 562 Civ. 1977, letter op. at 3-5 (Del. Super. Ct. Aug. 4, 1981); affirmed No. 238, 1981 (Del. Aug. 4, 1981); Rollins Environmental Services, Inc. v. WSMW Industries, Inc., 426 A.2d 1363, 1367 (Del. Super. Ct. 1980). The district court found these cases to be inapposite, because they involved prejudgment interest which had been calculated at 6% according to Delaware law, and reflected a policy of the Delaware courts that the same rate be applied to prejudgment and postjudgment interest, in order to avoid segmentation of interest. We agree with the district court that the cases cited by GM do not apply to the instant case where the prejudgment interest was determined according to federal law, 35 U.S.C. 8 284.° 2. Del. Code Ann. tit. 6, § 230l(a) (1974) provided that “(tlhe legal rate of interest for the loan or use of money . . . shall oe 6 percent per annum... .” The statute was amended to its current form effective April 18, 1980. 3. 350U.S.C. § 284 (1982) provides for prejudgment interest in patent cases: “Upon finding for the claimant the court shall award the claimant damages adequate to compensate for the infringement, but in no event less than a reasonable royalty . . . together with interest and costs as fixed by the court.” The Supreme Court held in General Motors v. Devex. 108 S.Ct. at 2062. that the purpose of the statute was to afford patent owners “complete compensation.” 7a 28 U.S.C. § 1961 provides only that postjudgment interest shall be calculated from the date of the entry of the judgment, at the rate allowed by State law.” (Emphasis added.) We interpret this statute literally, and hold that the district court correctly borrowed from Delaware law only its current interest rate of 16%. But cf. Turner v. Japan Lines, Ltd., 702 F.2d 752. 757-58 (9th Cir. 1983) (court applied previous state interest rate, according to Oregon precedents which held that a change in the rate of statutory interest did not apply to judgments entered before rate change.) - This result best advances the policy underlying 28 U.S.C. § 1961: compensation of the wronged party for loss of the use of money, in a changing economy where changes in the state statutory interest rate reflect changes in the value of the use of money.‘ We therefore hold that the district court did not err in its determination that the correct postjudgment interest was 16% per annum. Ill. Interest on Postjudgment Interest We now turn to the questions of whether the plaintiffs should have been awarded “delay damages” -- interest on postjudgment interest -- and whether Delaware law or federal law applies to this determination. Both GM and the district court assumed that 28 U.S.C. § 1961 (1976) mandated the application of state law on the issue of delay damages. We disagree. 28 U.S.C. § 1961 provides: Interest shall be allowed on any money judgment in a Civil case recovered in a district court... . Such interest shall be calculated from the date of the entry of the judgment, at the rate allowed by State law. 4. See generally Note. Interest on Judgments in the Federal Courts, 64 Yale L.J. 1019. and cases cited therein. 8a 28 U.S.C. § 1961 (1981) (amended 1982) (emphasis added).* There is federal authority for the proposition that when a cause of action arises from a federal statute, the question of whether interest may be allowed, as distinguished from the rate, is governed solely by federal law. See Dependahl v. Falstaff Brewing Co., 653 F.2d 1208, 1219 (8th Cir), cert. denied 454 U.S. 968 (1981); Carpa v. Ward Foods, Inc., 567 F.2d 1316, 1321 (5th Cir. 1978), (overruled on other grounds, Copper Liquor v. Adolph Coors Brewing Co., 701 F.2d 542 (Sth Cir. in banc 1983)); Perkins v. Standard Oil of California, 487 F.2d 672, 675 (9th Cir. 1973). But see United States v. Hannon, 728 F.2d 142, 146 (2d Cir. 1984) (Newman, J., concurring). We therefore hold that federal law determines whether Devex should be allowed interest on the postjudgment interest awarded by the district court in 1980 and computed in 1983. With respect to delay damages -- or interest on interest -- we note, as a preliminary matter, that under normal circumstances, the United States rule would have applied to GM's payments on the judgment it owed Devex.® Under that rule, GM's July 7, 1982, 5. The current version of 28 U.S.C. $1961 provides that postjudgment interest shall be calculated at a rate equal to the coupon issue yield equivalent of the average auction price for the last auction of fifty-two week United States treasury bills. Section 196l(b) provides that postjudgment interest be compounded annually. 28 U.S.C. § 1961 (1982). 6. The United States rule. which providés that payments be applied first to accrued interest and then to principal. has been followed by the federal courts for almost a century and a half. See. e.g.. Story v. Livingston, 38 U.S. (13 Pet.) 359. 371 (1839): Whiteside v. Washington Loan & Trust Co.. 95 F.2d 83, 87 (D.C. Cir. 1937): Gamble v. Wimberly. 44 F.2d 329. 331 (4th Cir. 1930): Ohio Savings Bank & Trust Co. v. Willys Corp.. 8 F.2d 463. 466-68 (2d Cir. 1925): Torosian v. National Capital Bank of Washington. 4ll F. Supp. 167. 172-175 (D.D.C. 1976). 9a payment of $8,813,945.40 would have been applied first to the approximately $5 million of postjudgment interest which had accrued since October 6, 1980. on the S19,726,236.55 judgment, and second to the $19,726.236.55 judgment itself. The remainder of that judgment, approximately $16 million, would then have accrued about $2 million in interest until June 6, 1983. when GM made its second payment of SIl,022.854.97. That payment would have been applied first to the accrued interest, and then to the principal, leaving a balance due Devex of more than $7 million. That balance would, in turn, have accrued interest until August 30, 1983, when GM complied with the district court's order and made its third payment of $7,170,344. The United States rule provides, however, that payments are applied first to interest and then to principal, only “in the absence of a clearly expressed intention [by the parties] to handle allocation some other way.” Nat G. Harrison Overseas Corp. v. American Barge Sun Coaster, 475 F.2d 504, 507 (5th Cir. 1973). In the case at bar, the parties agreed, and the court ordered, that GM's first payment would be applied only to the royalty part of the judgment. Devex Corp. v. General Motors Corp., Civil Action No. 3058 (D. Del. July 8, 1982) (order directing clerk to enter satisfaction of the royalty part of the judgment). GM's second payment was applied to the prejudgment interest part of the judgment, rather than to the postjudgment interest which had accrued between July 7, 1982, and June 6, 1983, again pursuant to an agreement made by the parties and order of the court. Devex Corp. v. General Motors Corp.. Civil Action No. 3058 (D. Del. June 7, 19€3) (order directing clerk to enter satisfaction of the prejudgment interest portion of the judgment). Because it agreed to the allocation of these payments to principal rather. than to interest, 10a Devex is now precluded from the beneficial application of the United States rule.’ On appeal. Devex argues that it is entitled to interest on the postjudgment interest which accrued between July 7, 1982, and August 30, 1983. The district court refused to grant interest on the postjudgment interest. because Delaware law forbids the compounding of interest.® 7. The dissent asserts that the orders do not evidence the kind of clearly expressed intention to deviate from the United States. rule that was evident in Harrison Overseas. Dissenting opinion at 3. However, the plaintiffs did sign the consent orders directing the clerk to enter satisfaction of the royalty part of the judgment and the prejudgment interest part of the judgment, thus expressing a clear intention that the sums paid by General Motors be credited to the principal sums owed. and not to the postjudgment interest which had accrued thereon. Furthermore, the application of the United States rule was never raised or briefed by the plaintiffs. The dissent notes that the district court had not yet determined the rate of postjudgment interest as of the time the consent orders were signed. Dissenting opinion at 3. In fact, the district court's original order provided for postjudgment interest at the rate allowed by state law. Devex Corp. v. General Motors Corp., Civil Action No. 3058 (D. Del. Oct. 6. 1980) (final judgment ordering payment of prejudgment interest, damages. postjudgment interest. and costs). Thus. instead of agreeing to the terms of the consent order entered by the district court. the plaintiffs could have asked that General Motors’ payments be applied to this amount. The dissent also presupposes that General Motors’ appeals were primarily for delay. Dissenting opinion at 4. The issues raised on appeal by General Motors regarding pre- and postjudgment interest were genuine and not dilatory, and there is no reason to punish General Motors for raising them. 8. The district court also denied interest on postjudgment interest on the ground that “as of this time. the Court has not ordered the payment of postjudgment interest.” Devex Corp. v. General Motors Corp., 569 F. Supp. at 1368. The court apparently overlooked its final judgment dated October 6. 1980. ordering postjudgment interest at the rate allowed by state law. Devex Corp. lla Although we decide this issue under federal rather than state law, we agree with the district court that allowing interest on the postjudgment interest would amount to the compounding of interest, which “as a general rule, is not allowed to be computed on a debt.” Cherokee Nation v. United States, 270 U.S. 4.6, 490 (1925). See also Brooklyn Bank v. O'Neil, 324 U.S. 697, 715 (1945). In support of its contention that an award of interest on postjudgment interest would not constitute illegal compounding of interest, Devex cites cases in which a judgment granted interest on an amount resulting from an unsatisfied former judgment on which interest had accrued. See, e.g., United States v. Hannon, 728 F.2d at 145; Dorey v. Dorey, 609 F.2d 1128, 1133 (Sth Cir. 1980); Hellenic Lines Ltd. v. Gulf Oil Corp., 359 F.2d 403, 404 (2d Cir. 1966). In the case at bar, however, the postjudgment interest cannot be considered an unsatisfied former judgment, because the amount of the judgment itself was in dispute until the Supreme Cour’ decision in May 1983, and the rate of postjudgment inierest was not fixed until August 1983. National Bank of the Commonwealth ov. Mechanics National Bank, 94 U.S. 437 (1876), is not to the contrary. In that case, ihe Court allowed interest on an aggregate amount of unpaid installments of interest. The Court found in that case that the original claims for interest had been approved by the Comptroller, and thus were the equivalent of a judgment. Id. at 439-440. In the case at bar, the rate of postjudgment interest was not determined finally until August 1983, and the amount of principal was not even determined until May 1983. Thus, the amount of v. General Motors Corp.. Civil Action No. 3058 (D. Del. Oct. 6. 1980) (final judgment ordering payment of prejudgment interest, damages. postjudgment interest. and costs). l2a postjudgment interest cannot be said to have been a liquidated amount equivalent to a judgment. Compare Royal Indemnity Co. v. United States, 313 U.S. 289, 295-296 (1941) (interest allowed on liquidated amount of unpaid interest); Martin v. The Star Publishing Co.., 107 A.2d 795, 796-797 (Del. Super. 1954), modified 126 A.2d 283 (Del. 1956) (interest allowed on delinquent installments of interest which constitute liquidated demands for payment wrongfully withheld). Because we conclude that awarding interest on the postjudgment interest would amount to the compounding of interest, we hold that the district court did not err in denying Devex's claim for “delay damages.” IV. Interest on Costs GM contends that the district court erred in awarding interest on costs. It argues that the court should have followed the so-called “traditional rule” that interest is not to be awarded on costs. Devex Corp. v. General Motors Corp., Civ. Action No. 3058, slip. op. at 9 (D. Del. Dec. 1, 1983). The various courts of appeals, however, have in recent years approved awards of interests on costs under section 1961 in a variety of Situations. R.W.T. v. Dalton, 712 F.2d 1225, 1234-1235 (8th Cir.), cert. denied 104 S.Ct. 527 (1983): Copper Liquor, Inc. v. Adolph Coors Brewing Co.. 701 F.2d at 543-545.° GM argues that these were public interest, quasi-public interest, or private attorney general cases, and therefore are distinguishable. The rationale behind the modern trend toward awarding interest on costs is unrelated to the type of case involved. It 9. Other circuits that have also approved awards of interest on costs in: Mt. Hood Stages. Inc. v. Greyhound Corp.. 616 F.2d 394 (9th Cir.). cert. denied 449 U.S. 831 (1980): City of Detroit v. Grinnell. 575 F.2d 1009 (2d Cir. 1977): Harris v. Chicago & Great Western Railroad. 197 F.2d 829 (7th Cir. 1952). 13a developed instead from an awareness of the rising cost of money and of escalating and enormous costs in complex litigation. In this case, the agreed costs amount to $161,960.07. As the Fifth Circuit noted in Copper Liquor: The historical rule that costs do not bear interest, like many court rules, antedates the modern practice of applying economic and business principles to judicial administration .... It - developed at a time when interest rates were not so high nor costs so large as both now are, and when, therefore, the net effect of disallowance was smaller. Copper Liquor Inc. v. Adolph Coors Co., 701 F.2d at 544. We agree with the Fifth Circuit that allowing interest on costs better serves the purpose of awarding this expense to the prevailing party by more nearly compensating it for the litigation expenses. Id. Therefore, we conclude that the district court did not - err in awarding Devex interest on costs. V. Conclusion We hold that the district court did not err in determining the rate of postjudgment interest to be 16%, in denying Devex interest in postjudgment interest, and in awarding plaintiffs interest on costs. Accordingly. the judgment of the district court will be affirmed. GIBBONS, Circuit Judge. dissenting: I concur in the opinion of the Court insofar as it affirms the district court's award of postjudgment interest and the award of interest on costs. I would l4a reverse, however, the district court’s holding that Devex is not entitled to collect interest on the delinquent postjudgment and prejudgment interest payments. The United States rule, under which payments are applied first to accrued interest and then to principal, should govern this case unless the parties have “clearly expressed [an] intention to handle allocation in some other way.” Nat G. Harrison Overseas Corp. v. American Barge Sun Coaster, 475 F.2d 504, 507 (5th Cir. 1973). The majority infers such an agreement from two court orders. That inference is not supportable. The majority's position overextends the holding of Harrison Overseas. In Harrison Overseas, the fifth circuit held that the United States rule did not apply to a judgment on a note that clearly stated that each payment would constitute 1/71 of the principal due, and 1/71 of the interest due.' Id. The parties in Harrison Overseas ciearly intended payments to be applied ratably to interest and principal. No such clear intention to avoid the United States rule is evidenced here. The majority's conclusion that the parties did not intend the United States rule to apply is based on two district court orders. On July 8, 1982. before the postjudgment or prejudgment interest had been paid, the district court directed the clerk to enter satisfaction of the royalty portion of the judgment. On June 7, 1983, before the postjudgment interest had been paid, the district court directed the clerk to enter satisfaction of the prejudgment interest portion of the judgment. - The agreement in Harrison Overseas provided that the total interest due was “payable with each installment of principal. payable in seventy-one (71) equal monthly installments... .~ 475 F.2d at 506 n.4. 15a These orders do not evidence the kind of “clearly expressed intention” to deviate from the United States rule that was apparent in Harrison Overseas. A court order, even if obtained by motion of the parties, is fundamentally different from a freely negotiated contract. Even if these orders could be viewed as an agreement between the parties, there is no evidence that the parties or the court considered the possibility that the orders would later have an effect on interest payments. In July 1982, when Devex moved for an order directing General Motors to pay the reasonable royalty portion of the judgment, the prejudgment interest portion of the judgment was on appeal to the Supreme Court, and the district court had not yet determined the postjudgment interest rate. Since the royalty award was the only uncontested part of the judgment at that point, it was the only part that Devex could collect immediately. The plaintiffs were concerned only with collecting the royalty judgment without undue delay. See, Transcript of July 2, 1982 at 14. The district court gave no indication of an intention that this order relieve General Motors of future interest payments. In fact, the court indicated an intent to require General Motors to pay the judgment immediately so that the plaintiffs, and not Genera! Motors, would have the benefit of the use of the money while the remainder of the judgment awaited appeal. Tr. at 6. Thus neither the parties nor the court evidenced a clear intention to avoid application of the United States rule to the payments by Genera! Motors on the judgment owed to Devex. Finally, strong policy concerns militate against extending the Harrison Overseas exception to the circumstances of this case. The majority's holding allows General Motors to delay payment of long-overdue interest with impunity. if no interest is assessed, General Motors simply has no incentive to pay the judgments promptly. This appeai has allowed General l6a Motors to enjoy a further interest-free delay, during which time plaintiffs are not being compensated for the lost time-value of money due under the judgment in their favor. By allowing General Motors the interest-free use of delinquent payments, the court is depleting plaintiffs’ real recovery as surely as if it had simply reduced the amount of their award. It is, moreover, rewarding General Motors for resorting to this court on several occasions in the interest of delay. A True Copy: Teste: Clerk of the United States Court of Appeals Sor the Third Circuit i = 17a UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT NOS. 83-1770. 83-1771, 83-1799, 83-1892, 84-5003, 84-50ll. 84-5139, 84-5140, and 84-5]4i DEVEX CORPORATION, TECHNOGRAPH, INC., WILLIAM C. McCOY, THEODORE A. TeGROTHENHUIS, FREDERICK B. ZIESENHEIM, MARJORIE TeGROTENHUIS, WILLIAM C. McCOY, JR.. and KATHERINE M. BASSETT, | Plaintiffs-Appellants. Cross-Appellees v. GENERAL MOTORS CORPORATION Defendant-Appellee, Cross-Appellant Appeal from the United States District Court for the District of Delaware D.C. Docket No. 3058 Submitted Under Third Circuit Rule 12(6) September 13. 1984 Before: GIBBONS, GARTH, and ROSENN, Circuit Judges (Opinion Filed November 28, 1984) 18a ORDER AMENDING SLIP OPINION The slip opinion in the above-entitled case be and is hereby amended as follows: Page 13. part V, add to the paragraph the following: Each side to bear its own costs. BY THE COURT: /s/ Max Rosenn. Circuit Judge Dated: December 5. 1984 A True Copy: Teste: Clerk of the United States Court of Appeals for the Third Circuit 19a Opinion of the District Court, As Amended August 22, 1983 DEVEX CORPORATION, et al., Plaintiffs, Vv. GENERAL MOTORS CORPORATION, Defendant. Civ. A. No. 3058 United States District Court, D. of Delaware Aug. &, 1983. On Postjudgment Interest Aug. 22, 1983 As Amended Aug. 22, 1983. OPINION CALEB M. WRIGHT, Senioz# District Judge. ON POSTJUDGMENT INTEREST As it has so frequently in the past, this patent case once again dernands the Court’s attention. After nearly twenty- seven years of this litigation, one would think there would be nothing left to decide. Important issues, however, ' remain to be resolved. On October 6, 1980, this Court entered an Order in this action which provided, inter alia: 5. Defendant General Motors Corporation shall pay to plaintiff: (1) $8,813,945.50 plus pre-judgment interest in the amount of $10,912.291.05 (which represents interest through August 31, 1980) totalling $19,726,236.55; plus pre-judgment interest of $3,071.22 for each day thereafter up to and including the date of entry of this judgment; 20a (ii) plus post-judgment interest from the date of entry of this judgment at the rate allowed by State law as provided by 28 U.S.C. §1961. All aspects of this Court’s Order.were affirmed on appeal. See Devex Corp. v. General Motors Corp., 667 F.2d 347 (3d Cir. 1981), aff’d., U.S. , 103 S.Ct. 2058, 76 L.Ed.2d 211 (1983). General Motors paid the royalty award of $8,813,945.50 on July 7, 1982, and the pre-judgment interest award of $11,022,854.97' on June 6, 1983. Con- sequently, the Court must now resolve two issues. First, the court must determine the proper rate of post-judgment interest as provided for in Paragraph 5(ii) of the October 6, 1980 Order. Second, the Court must decide whether the plaintiffs are entitled to damages for delay in the payinent of post-judgment interest. These issues will be addressed seriatim. 28 U.S.C. §1961 governs the rate of post-judgment interest in this case. Section 1961 provides in relevant part: Interest shall be allowed on any money judgment in a civil case recovered in a district court. . . . Such interest shall be calculated from the date of the entry of judgment, at the rate allowed by State law.? ' This figure represents the final amount of pre-judgment interest due pursuant to the Court’s Order of October 6, 1980. 2 On April 2, 1982, Congress amended 28 U.S.C. § 1961. The amendment changes the basis for the rate of post-judgment interest from ‘‘the rate allowed by State law’’ to the “‘rate equal to the coupon issue yield equivalent (as determined by the Secretary of the Treasury) of the average accepted auction price for the last auction of fifty-two week United States Treasury bills setited immediately prior to the date of the judgment.” Act of April 2, 1982, Pub.L. No. 97-164, Sec. 302(a), 1982 U.S.Code Cong. & Ad.News (96 Stat.) 55-6. The amendment, however, does not impact upon this case because it did not take effect until October 1, 1982, well after judgment was entered. See id., Sec. 402 at (96 Stat.) 57. 2la Consequently, in resolving this matter the Court must award post-judgment interest at the rate permitted by Delaware law on the date judgment was entered, October 6, 1980. The rate of interest allowed on judgments in Delaware is the same as the “‘legal rate of interest’’ found in 6 Del.C. § 2301. Rollins Environmental Services, Inc. v. WSMW Industries, Inc., 426 A.2d 1363, 1367 (Del.Super.Ct. 1980). The amended 6 Del.C. § 2301(a), which became effective on April 18, 1980, provides in relevant part: Any lender may charge and collect from a borrower interest at any rate agreed upon in writing ifot in excess of 5% over the Federal Reserve discount rate including any surcharge thereon, and judgments en- tered after May 13, 1980, shall bear interest at the rate in the contract sued upon. Where there is no expressed contract rate, the legal rate of interest shall be 5% over the Federal Reserve discount rate including any sur- charge as of the time from which interest is due; provided, that where the time from which interest is due predates April 18, 1980, the legal rate shall remain as it was at such time. First, this case does not involve a contract which specifies an interest rate. Applying the remainder of this statutory provision; because judgment was entered on October 6, 1980, which is after April 18, 1980, the proviso is also inapplicable. Consequently, it seems obvious to the Court that 6 Del.C. § 2301(a) requires a post-judgment interest rate at 5 percent above the Federal Reserve discount rate in ’ Delaware Courts of Equity may fix interest rates above the legal rate found in 6 Del.C. § 2301 in the interests of fairness. See Lynch v. Vickers Energy Corp., 429 A.2d 497, 506 (Del. 1981). The plaintiff contends that as a patent court this Court is a court of equity, and can apply a rate of interest greater than that provided for in 6 Del.C. § 2301. The Court does not address this contention, however, because 6 Del.C. § 2301 provides an ade- quate rate of post-judgment interest in this case. 22a existence on October 6, 1980. The Federal Reserve discount rate on October 6, 1980 was 11 percent. Therefore, pursuant to Section 2301(a), the rate of post-judgment interest in this case must be set at 16 percent. General Motors, however, contends that the rate of post- judgment interest should be fixed at 6 percent, not 16 percent. General Motors bases its contention on the fact that pre-judgment interest was awarded from 1956 in this case, which is well before April 18, 1980. The “legal rate of interest’’ on judgments prior to April 18, 1980, was 6 percent. See Rollins Environmental Services, Inc., 426 A.2d at 1366. General Motors cites to several Delaware state court and federal court diversity cases which hold that when pre-judgment interest is due before April 18, 1980, the rate of pre-judgment interest should be fixed at 6 percent. See, e.g., Oliver B. Cannon and Son, Inc. v. Fidelity and Casualty Co. of New York, C.A. 79-129 (Dkt. Item 210), Slip Op. at 2-4 (D.Del. June 8, 1982); Rollins Environmental Services, Inc., 426 A.2d at 1368-69. These cases further hold that if prejudgment interest is fixed at 6 percent because it was due before April 18, 1980, post- judgment interest must also be fixed at 6 percent, even though final judgment was entered after April 18, 1980. Oliver B. Cannon and Son, Inc., Slip Op. at 4-5; Rollins Environmental Services, Inc., 426 A.2d at 1368. The ration- ale for these is that 6 Del.C. § 2301 has been construed not to allow for the segmentation of the rate of interest based upon the formal entry of judgment. See Papendick v. Robert Bosch GmbH, 562-CA-1977, Slip Op. at 4 (Del. Super.Ct. August 4, 1981), aff'd, No. 238 1981 (Del. March 11, 1982) (unreported opinion). General Motors in essence contends that post-judgment interest should be set at 6 percent because pre-judgment interest was awarded from a date prior to April 18, 1980. The Court cannot accept General Motors argument. The cases cited by General Motors are all state court cases or federal diversity cases where the law governing the 23a rate of both pre-judgment and post-judgment interest was the law of Delaware. See, e.g., Oliver B. Cannon and Son, Inc., Slip Op. at 1-2, 4-5. Pre-judgment interest in this patent litigation was awarded in the Court’s discretion solely as a matter of federal law pursuant to 35 U.S.C. § 284. See General Motors Corp. v. Devex Corp., 7.5. , 103 S.Ct. 2058, 2060, 76 L.Ed.2d 211 (1983). Therefore, the Court finds that the cases cited by General Motors are inapposite. State law had absolutely no bearing on the award of pre-judgment interest. The law of Delaware has application in this case only on interest awarded after October 16, 1980 pursuant to 28 U.S.C. § 1961. The fact that pre-judgment interest was awarded as a matter of federal law from a date prior to April 18, 1980, is com- pletely irrelevant in determining what the rate of post- judgment interest should be under 6 Del.C. § 2301 on a judgment entered after April 18, 1980. Consequently, the Court holds that the rate of post-judgment interest will be 16 percent.* The Court now turns to the plaintiffs’ claim pertaining to delay damages. The parties agree that post-judgment interest runs on the $8,813,945.50 royalty award from October 6, 1980, the date judgment was entered, to July 7, 1982, the date that General Motors paid the royalty * Even assuming arguendo that the decisions cited by General Motors were applicable to this case, the Court would still not fix the rate of post-judgment interest at 6 percent. The cases cited by General Motors hold that 6 Del.C. § 2301 does not allow for the entation of the rate of interest based upon the formal entry of judgment. See, e.g., Papendick, Slip Op. at 4. in other words, these decisions “have held that the rate of post- judgment interest should be the same as pre-judgment interest.” Oliver B. Cannon. and Son, Inc., Slip Op. at 5. In this case, pre-judgment interest was fixed at the Moody’s Average Corpo- rate Bond Rate. Consequently, this rate, which was approxi- mately 15 percent for the relevant time period, and not the 6 percent rate urged by General Motors, would be the proper rate of post-judgment interest if the precedent cited by General Motors was applicable to this case. 24a award. The parties further agree that post-judgment inter- est runs on the $11,022,824.97 pre-judgment interest award from October 6, 1980, the date the judgment was entered, to June 6, 1983, the date that General Motors paid the pre- judgment interest. The plaintiffs, however, make other claims for post-judgment interest that General Motors does not agree to. In addition to the post-judgment interest that the parties agree upon, the plaintiffs claim they are entitied to interest on the unpaid post-judgment interest that accrued on the $8,813,945.50 royalty award from October 6, 1980, the date of judgment, to July 7, 1982, the date of payment of the royalty award. Similarly, the plaintiffs claim they are entitled to interest on the unpaid post-judgment interest that accrued on the $11,022,824.97 pre-judgment interest award from October 6, 1980, the date of judgment, to June 6, 1983, the date of payment of the pre-judgment interest. The plaintiffs correctly point out that based upon a 16 percent interest rate, approximately $2,000,000 in post-judgment interest accrued on the $8,813,945.50 royalty award from October 6, 1980 to July 7, 1982. The plaintiffs seek 16 percent interest on this $2,000,000 from July 7, 1982, the date the plaintiffs claim this post-judgment interest should have been paid, until the date it is actually paid. The plaintiffs similarly point out that based upon a 16 percent interest rate, $4,701,474.05 in post-judgment interest accrued on the pre-judgment interest award from October 6, 1980 to June 6, 1983. The plaintiffs seek 16 percent interest on this $4,701,474.05 in post-judgment interest from June 6, 1983, the date the plaintiffs claim this post-judgment interest should have been paid, until the date it is actually paid. The plaintiffs claim they are entitled to this additional interest as ‘‘delay damages” because General Motors wrongfuliy withheld payment of post-judgment interest. The plaintiffs’ position is without merit. 25a As of this time, the Court has not ordered post-judgment interest to be paid. Therefore, the plaintiffs are incorrect when they maintain that post-judgment interest was due on the royalty award and the pre-judgment interest award on July 7, 1982 and June 6, 1983, respectively. Because the Court has not yet ordered the payment of post-judgment interest, General Motors has not delayed in the payment of that interest. Consequently, there can be no ‘‘delay dama- ges.”’ What the plaintiffs actually seek is interest on interest, i.e., compound interest, which is not permitted under Delaware law. See, e.g., Pack & Process, Inc. v. Nabisco, Inc., C.A. No. 78-285, Slip Op. at 6-7 (D.Del. September 18, 1981) (and authorities cited therein). Therefore, the plaintiffs claim ‘delay damages”’ will not be allowed. The Court requests the parties to calculate the interest due in accordance with this Opinion, and submit an Order within five days from the date of entry of this Opinion. 26a Order of the District Court, Dated September 9, 1983 IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF DELAWARE DEVEX CORPORATION, et al., Plaintiffs, v. GENERAL MOTORS CORPORATION, Defendant. Civil Action No. 3058 ORDER This 9th day of September, 1983, for the reasons set forth in this Court’s Opinion of August 22, 1983, and the Court having heard the arguments of counsel on Septem- ber 7, 1983, it is hereby ORDERED: 1. Postjudgment interest at the rate of 16% per annum is awarded in favor of plainuffs and against General Motors Corporation in the amount of $7,170,344.39. 2. Plaintiffs’ claim for damages for delay in the payment of postjudgment interest is denied. 3. The Clerk of the Court shall instruct Delaware Trust Company to forthwith transfer $2,204,880.90 (representing $2,688,879.15 conceded to be owed to plaintiffs by General Motors Corporation less $483,998.25 withheld by the Court in connection with the claims of the TeGrotenhuis and Ziesenheim plaintiffs for a share of the postjudgment interest) of the funds and investments held by Delaware Trust Company pursuant to this Court’s Order of August 30, 1983, to the Technograph-GM Fund Account at Dela- ware Trust Company (Account No. 123-929-5). 27a 4. Delaware Trust Company shall advise this Court, by letter, that it has complied with paragraph 3 of this Order. 5. The balance of the funds and investments held by Delaware Trust Company pursuant to this Court’s Order of August 30, 1983, shall continue to be held, invested, and reinvested pursuant to that Order until further Order of this Court to be entered after this Order becomes final by expiration of the tume for appeal or until final determina- tion of an appeal, if any. 6. The Court declines to enter this Order pursuant to Fed.R.Civ.P. 54(b). s/ Caleb M. Wright Senior Judge APPROVED AS TO FORM: POTTER ANDERSON & CORROON By /s/_ Robert K. Payson Robert K. Payson Attorneys for Technograph, Inc. MORRIS, NICHOLS, ARSHT & TUNNELL By /s/_ Dennis H. Hatch, Jr. William H. Sudell, Jr. Attorneys for TeGrotenhuis and Ziesenheim Plaintiffs CONNOLLY, BOVE, LODGE & HUTZ By /s/_ A.G. Connolly Jr. Arthur G. Connolly, Jr. Attorneys for Defendant, General Motors Corporation 28a Order of the District Court, Dated August 30, 1983 IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF DELAWARE DEVEX CORPORATION, et al., Plaintiffs, : V. GENERAL MOTORS CORPORATION, Defendant. Civil Action No. 3058 ORDER This 30th day of August, 1983, the Clerk of this Court now having in his possession a check of General Motors Corporation in the amount of $7,170,344.39 representing postjudgment interest calculated in accordance with this Court’s Opinion of August 22, 1983, NOW, THEREFORE, IT IS ORDERED: 1. The Clerk of the Court shall endorse the aforesaid check in the amount of $7,170,344.39 payable only to Delaware Trust Company, and deliver the same to Robert K. Payson, Esquire. The said Payson shall deliver said check to Delaware Trust Company, together with a con- formed copy of this Order. 2. Delaware Trust Company shall forthwith cause the aforesaid check to clear the issuing bank and it shall deposit the funds collected in an account to be opened in the name of the ‘Clerk of the Court of the United States District Court for the District of Delaware, Civil Action No. 3058,”’ and such funds, to the fullest extent possible, shall be invested in insured money market accounts or 29a United States Treasury Bills, at the option of Robert K. Payson, Esquire. 3. Delaware Trust Company shall advise this Court and undersigned counsel, by letter, as to how the funds in the account established pursuant to paragraph 2 hereof have been invested and reinvested. 4. No distributions shall be made from the account established pursuant to paragraph 2 hereof except upon further order of this Court. ' 5. The entry of this Order is without prejudice to any party’s right to appeal from the Order to be entered on this Court’s Opinion dated August 22, 1983, or any party’s arguments as to when, how, and how much of the aforesaid funds shali be distributed. /s/ Caleb M. Wright Senior Judge CONSENTED TO: POTTER ANDERSON & CORROON By /s/_ Robert K. Payson Robert K. Payson Attorneys for Plaintiffs MORRIS, NICHOLS, ARSHT & TUNNELL By /s/ William H. Sudell, Jr. William H. Sudell, Jr. Attorneys for TeGrotenhuis and Ziesenheim Plaintiffs CONNOLLY, BOVE, LODGE & HUTZ By /8/_ Arthur G. Connolly Jr. Arthur G. Connolly, Sr. Attorneys for Defendant, General Motors Corporation 30a Order of the Third Circuit Dated June 30, 1982 UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT June 9, 1982 Nos. 80-2550/51 DEVEX CORPORATION, et al., VS. GENERAL MOTORS CORPORATION Devex Corp., et al., Appellants in No. 80-2550 General Motors Corporation, Appellant in No. 80-2551 (D.C. Civil No. 3058) Present: GIBBONS and HUNTER, Circuit Judges; and STERN, District Judge.* 1. Motion by plaintiffs-appellants that the Clerk be di- rected to send down this Court’s judgment, in lieu of formal mandate (a) affirming the District Court's judgment in the amount of $8,813,945.50, constituting the reasonable royalty award part of the Judgment, plus postjudgment interest thereon from October 6, 1980, the date of entry thereof, at the rate allowed by State law as provided by 28 U.S.C. 1961, and (b) postponing mandate as to the balance of the District Court’s final judgmer pending Supreme Court review of pre- judgment interest; 2. On June 8, 1982, Lester Taufen, Esquire, counsel for appellee-cross-appellant, advised this office by tele- phone that an opposition to above motion will be filed on behalf of GMC; in the above-entitled cases. Any answer which would be due by June 17, 1982, will be forwarded upon receipt of same. 3la Respectfully, /s/ Sally Mrvos/mce Sally Mrvos, Clerk mmd Enc. The foregoing motion is granted. See Barnes v. United States, No. 82-5095, 3d Cir., May 10, 1982. By the Court, ‘S/ John J. Gibbons Judge Dated: June 30, 1982 *Sitting by designation 32a Order of the District Court, Dated July 7, 1982 IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF DELAWARE DEVEX CORPORATION, et al., Plaintiffs, v. GENERAL MOTORS CORPORATION, Defendant. Civil Action No. 3058 ORDER This 7th day of July, 1982, the Clerk of this Court now having in his possession a check in the amount of $8,813,- 945.50 from General Motors Corporation in partial satisfac- tion of the Final Judgment in favor of the plaintiffs dated October 6, 1980, in this case; and The Court having determined that said fund should be invested by Delaware Trust Company, Ninth and Market Streets, Wilmington, Delaware, for this Court; NOW, THEREFORE, IT IS ORDERED: 1. The Clerk of the Court shall endorse the aforesaid check in the amount of $8,813,945.50 payable only to Delaware Trust Company and deliver the same to Robert K. Payson, Esquire. The said Payson shall deliver said check to Delaware Trust Company, together with a conformed copy of this Order. 2. Upon receipt of said fund, it shall be deposited in an account to be opened in the name of “‘Clerk of the Court of the United States District Court for the District of Delaware, 33a Civil Action No. 3058” for the deposit of all moneys not otherwise invested as directed by this Order. 3. Delaware Trust Company shall invest and reinvest to the extent possible all of the moneys, including accrued interest, in United States Treasury Bills in the name of the Court or for the account of the Court, with a maturity date no more than thirty (30) days, and to retain possession of all such treasury bills and moneys subject to the further order of this Court. 4. Delaware Trust Company shall collect thirty-five dollars ($35.00) as its fee for its initial purchase of treasury bills. Delaware Trust Company shall be entitled to the same fee ($35.00) each time it reinvests in new treasury bills. The fees shall be collected from moneys in the savings account that are not invested in treasury bills. Delaware Trust Company and Robert K. Payson shall determine from to time the amount to be retained in said account and not invested in treasury bills. 5. Upon each investment or reinvestment, Delaware Trust Company shall inform this Court and undersigned counsel by letter the amount invested in treasury bills and the amount retained in the savings account. /s/ Caleb M. Wright United States District Court Judge CONSENTED TO: POTTER ANDERSON & CORROON By ‘s/_ Robert K. Payson Robert K. Payson Attorneys for Plaintiffs MORRIS, NICHOLS, ARSHT & TUNNELL By /s/ William H. Sudell, Jr. William H. Sudell, Jr. Attorneys for Certain Plaintiffs 34a CONNOLLY, BOVE & LODGE By S/ Lester J. Taufen Arthur G. Connolly, Sr. Attorneys for Defendant, General Motors Corporation 35a Order of the District Court, Dated July 8, 1982 IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF DELAWARE DEVEX CORPORATION, et al., Plaintiffs, v. GENERAL MOTORS CORPORATION, Defendant. Civil Action No. 3058 ORDER This 8th day of July, 1982, the defendant General Motors Corporation (‘“‘“GM’’) having paid $8,813,945.50 into the Court and GM’s check for this amount having been deposited into the Delaware Trust Company in accordance with the July 7, 1982 Order of this Court; and The aforesaid check having cleared the issuing bank on July 8, 1982 so that these funds are now available for investment by Delaware Trust Company; NOW, THEREFORE, IT IS ORDERED: 1. The Clerk of this Court is directed to enter satisfaction of the reasonable royalty portion of the judgment entered on October 6, 1980 in this case against GM in the principal amount of $8,813,945.50. 2. Post judgment interest at a rate to be determined will accrue on the satisfied judgment in this case against GM through, but not after, July 7, 1982. 36a CONSENTED TO: POTTER ANDERSON & CORROON By /s/ Robert K. Payson Attorneys for Plaintiffs MORRIS, NICHOLS, ARSHT & TUNNELL By /$/ William H. Sudell, Jr. Attorneys for Certain Plaintiffs CONNOLLY, BOVE & LODGE By /s/ Arthur G. Connolly Sr. Arthur G. Connolly, Sr. Attorneys for Defendant, General Motors Corporation ‘s/ Caleb M. Wright United States District Court Judge 37a Order of the District Court, Dated July 9, 1982 IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF DELAWARE DEVEX CORPORATION, et al., Plaintiffs, v. GENERAL MOTORS CORPORATION, Defendant. Civil Action No. 3058 PARTIAL SATISFACTION OF JUDGMENT Defendant General Motors Corporation (‘‘“GM’’) having complied with the July 7, 1982 Order of this Court by paying into the Court and having deposited into the Delaware Trust Co. the amount of $8,813,945.50; and The aforesaid compliance having been stated in the July 8, 1982 Order of this Court;. IT {S ORDERED that satisfaction of the reasonable royalty portion of the judgment entered on October 6, 1980 against GM in the principal amount of $8,813,945.50 is hereby entered. Dated: 7/9/82 John R. McAllister, Jr., Clerk By: /s/_ James J. Yacucci Chief Deputy Clerk 38a Order of the District Court, Dated September 10, 1982 IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF DELAWARE DEVEX CORPORATION, et al., Plaintiffs, v. GENERAL MOTORS CORPORATION, Defendant. Civil Action No. 3058 ORDER WHEREAS, on July 2, 1982, plaintiffs filed a motion requesting, inter alia, that this Court determine the appro- priate interest rate to be used in computing postjudgment interest on the reasonable royalty judgment of $8,813,945.50; and WHEREAS, defendant objected to plaintiffs’ motion on the ground, inter alia, that the requested relief was not ripe for decision because of the issues in this case now pending before the Supreme Court of the United States; and WHEREAS, the Court has considered the written sub- , missions of the parties and the arguments of counsel with | respect to defendant’s objection and has concluded that the motion was prematurely filed. NOW, THEREFORE, IT IS HEREBY ORDERED that the Court will not now determine the issues raised in plaintiffs’ motion. /s/ Caleb R. Wright Senior Judge 39a Dated: September 10, 1982 Approved as to form. /s/_ Robert K. Payson /s/_ Arthur G. Connolly, Sr. Robert K. Payson Arthur G. Connolly William H. Sudell Attorneys for Defendant Attorneys for Plaintiffs 40a Order of the District Court, Dated September 28, 1982 IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF DELAWARE _ DEVEX CORPORATION, et al., Plaintiffs, Vv. GENERAL MOTORS CORPORATION, Defendant. Civil Action No. 3058 ORDER TO STAY EXECUTION WHEREAS, on September 10, 1982 the Court ruled that it was premature to determine the rate of postsjudgment interest at that time; and WHEREAS, on September 22, 1982 plaintiffs (““Devex’’) sought a writ of execution with instructions to levy on defendant’s property in Delaware, and defendant (““GMC’’) filed a motion to deny or vacate this proposed execution; and WHEREAS, the Court has considered the written submis- sions and arguments of the parties and has concluded that this case is not now in a proper posture for a writ of execution, but that the parties should submit further briefs on the issue of postjudgment interest. NOW, THEREFORE, IT IS HEREBY ORDERED that Devex’s proposed writ of execution herein shall be stayed, and shall remain under seal, until further Order of the Court after further briefing on the issue of postjudgment interest. /s/ Caleb M. Wright Senior Judge 4la Dated: September 28, 1982 APPROVED AS TO FORM: POTTER ANDERSON & CORROON By: s/_ Richard E. Poole Richard E. Poole Attorneys for Plaintiffs MORRIS, NICHOLS, ARSHT & TUNNELL By: s/ William H. Sudell, Jr. William H. Sudell, Jr. Attorneys for Certain Plaintiifs CONNOLLY, BOVE & LODGE By: s/ Arthur G. Connolly, Sr. Arthur G. Connolly, Sr. Attorneys for Defendant 42a Order of the District Court, Dated June 6, 1983 IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF DELAWARE DEViEX CORPORATION, et al., Plaintiffs, v. GENERAL MOTORS CORPORATION, | Defendant. Civil Action No. 3058 ORDER This 6th day of June, 1983, the Clerk of this Court now having in his possession a check in the amount of $11,022,854.97 from General Motors Corporation in partial satisfaction of the Final Judgment in favor of the plaintiffs dated October 6, 1980, in this case; and The Court having determined that said fund should be held by Delaware Trust Company, Ninth and Market Streets, Wilmington, Delaware, for this Court: NOW, THEREFORE, IT IS ORDERED: 1. The Clerk of the Court shall endorse the aforesaid check in the amount of $11,022,854.97 payable only to Delaware Trust Company and deliver the same to Robert K. Payson, Esquire. The said Payson shall deliver said check to Delaware Trust Company, together with a conformed copy of this Order. 3 2. Upon receipt of said fund, it shall be deposited in an account to be opened in the name of “Clerk of the Court of the United States District Court for the District of Delaware, 43a Civil Action No. 3058’, subject to further Order of this Court. /s/_ Caleb M. Wright United States District Court Judge CONSENTED TO: POTTER ANDERSON & CORROON By /s/_ Robert K. Payson Robert K. Payson : Attorneys for Plaintiffs MORRIS, NICHOLS, ARSHT & TUNNELL By /s/_ William H. Sudell, Jr. William H. Sudell, Jr. Attorneys for Certain Plaintiffs CONNOLLY, BOVE, LODGE & HUTZ By /s/ Arthur G. Connolly Sr. Arthur G. Connolly, Sr. Attorneys for Defendant, General Motors Corporation 44a Order of the District Court, Dated June 7, 1983 IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF DELAWARE DEVEX CORPORATION, et al., Plaintiffs, v. GENERAL MOTORS CORPORATION, Defendant. Civil Action No. 3058 ORDER This 7th day of June, 1983, the defendant General Motors Corporation (‘““GM’’) having paid $11,022,854.97 into the Court and GM’s check for this amount having been deposited into the Delaware Trust Company in accordance with the June 6, 1983 Order of this Court; and The aforesaid check having cieared the issuing bank on June 6, 1983, so that such funds are now available to be held by Delaware Trust Company for this Court; NOW, THEREFORE, IT IS ORDERED: 1. The Clerk of this Court is directed to enter satisfaction of the pre-judgment interest portion of the judgment entered on October 6, 1980 in this case against GM in the principal amount of $11,022,854.97. 2. All issues concerning post-judgment interest and costs are hereby reserved for determination by this Court. /s/ Caleb M. Wright Senior Judge 45a CONSENTED TO: POTTER ANDERSON & CORROON By /s/_ Robert K. Payson Robert K. Payson Attorneys for Plaintiffs MORRIS, NICHOLS, ARSHT & TUNNELL By /s/_ William H. Sudell, Jr. William H. Sudell, Jr. - Attorneys for Certain Plaintuffs CONNOLLY, BOVE, LODGE & HUTZ By /s/ Arthur G. Connolly Sr. Arthur G. Connolly, Sr. Attorneys for Defendant, General Motors Corporation 46a Order of the District Court, Dated June 8, 1983 IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF DELAWARE DEVEX CORPORATION, et al., Plainuffs, < -®, GENERAL MOTORS CORPORATION, Defendant. Civil Action No. 3058 PRE-JUDGMENT INTEREST SATISFACTION OF JUDGMENT Defendant General Motors Corporation (‘““GM’’) having complied with the June 6, 1983 Order of this Court by paying into the Court and having deposited into the Delaware Trust Company the amount of $11,022,854.97; and The aforesaid compliance having been stated in the June 7, 1983 Order of this Court; IT IS ORDERED that satisfaction of the pre-Judgment interest portion of the Judgment entered on October 6, 1980 against GM in the principal amount of $11,022,854.97 is hereby entered. /s/ John R. McAllister, Jr. John R. McAllister, Jr., Clerk Dated: June 8, 1983 47a Amended Judgment of the Third Circuit, Dated December 5, 1984 UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT Nos. 83-1770, 83-1771, 83-1892, 84-5003 84-5011, 84-5139 and 84-5141 DEVEX CORPORATION, et al., Appellants, Cross-Appellees VS. GENERAL MOTORS CORPORATIGN, Appellees, Cross-Appellant (D.C. Civil No. 3058) On APPEAL FROM THE UNITED STATES District CouRT FOR THE ---------- DISTRICT OF DELAWARE Present: GrispBons, GARTH and ROSENN, Circuit Judges AMENDED JUDGMENT This cause came on to be heard on the record from the United States District Court for the ---------- District of Delaware and was submitted under Third Circuit Rule 12(6) on September 13, 1984. On consideration whereof, it is now here ordered and adjudged by this Court that the orders of the said District Court, entered September 9, 1983, and Decernber |, 1983, be, and the same are hereby affirmed. Each side to bear its own costs. ATTEST /s/ Sally Mrvos Clerk December 5, 1984 48a Certified as a true copy and issued in lieu of a formal mandate on February 20, 1985. Test: /s/ M. Elizabeth Ferguson Chief Deputy Clerk, U.S. Court of Appeals for the Third Circuit 49a Order of the Third Circuit Denying Rehearing, Dated February 12, 1985 UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT Nos. 83-1770/1, 83-1892, 84-5003 84-5011, 84-5139 and 84-5141 DEVEX CORPORATION, ET AL., Appellants/Czvoss-A ppellees v. GENERAL MOTORS CORPORATION, Appellees/Cross-A ppellants (D.C. Civil No. 3058) SUR PETITION FOR REHEARING PRESENT: ALpISsERT, Chief Judge, GisBoNs, HUNTER, WEIS, GARTH, SLOVITER, and BECKER, Circuit Judges, ROSENN, Senior Circuit Judge. The petition for rehearing filed by appellants/cross-appellees, Devex Corportion, et al., in the above-entitled case having been submitted to the judges who participated in the decision of this court, and to all the other available circuit judges of the circuit in regular active service, and no judge who concurred in the decision having asked for rehearing, and a majority of the circuit judges of the circuit in regular active service not having voted for rehearing by the court in banc, the petition for rehearing is denied. By the Court oseeeeeeeeee eee eeeeeeeeeeee DATED: February 12, 1985 Circuit Judge IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF DELAWARE DEVEX CORPORATION, ET AL. Plaintiffs, V. GENERAL Motors CORPORATION Defendant. REPORT OF SPECIAL MASTER PURSUANT TO F.R.C.P. 53(e) February 7, 1980 5la TABLE OF CONTENTS PAGE I. PROCEDURAL BACKGROUND ........... EE ee B. Design of the Decision .................. EES Te ee vines cies a scccccsccsese 1. It is the Law of the Case that Each of the Three Prior Trial Practices Infringe ..... 2. It is the Law of the Case that Cleanability in a Routine, Commercially Acceptable Way Satisfies the “Cleanability” Require- Eee 3. It is the Law of the Case that Lubricity Suf- ficient to Achieve Effective Production Satisfies the “Satisfactory Lubricity” Re- quirement of the Patent ............... B. Accused Practices Held to be Infringing .. . . 1. Accused Practices Which Must Be Held to Infringe as the Result of the Law of the Case (Bumper-Accused Practices 4, 5, 12, 13, 36, 48, 49, and 51; Non-Bumper- Accused Practices 7, 9, 16, 17, 22, 25 (in part), 26, 27, 28, 30, 31, 37, 38, 42, 47, 54, SSE OE 2. TKPP is a Borax Equivalent, and the Use of it by Defendant as a Borax Substitute in Bumper Making Infringes (Accused Prac- ‘tices 6, 14, 50, 52, and 58) TSP is also a ee I og ee aec es... Ill. C. Accused Practices Held to be Non-Infringing 1. Practices as to Which Little or No Clean- ing was Required do not Infringe (Accused Practices 2, 3, 10, 11, 15, 19, 20, 21, 25 (in part), 33, 34, 35, 39, 40, 41, 44, and 45) .. 2. Practices in Which Borax Rinses were Used as Neutralizers do not Infringe (Accused Practices 1, 2, 8, 18, 20, 23, 24, 32, 34, 35, = F £ e eeeree e rr rce §. Practice in which a Trisodium Phosphate Rinse was used as a Neutralizer does not Infringe (Accused Practice 29) .......... 4. Practices Determined net to Involve the Use of Borax (or (Equivalents) do not In- fringe (Accused Practices 1, 8, and 46) ... (a) Accused Practice 1 (After 1963)...... (b) Accused Practice8 ................ (c) Accused Practice 46 ............... D. Explanation and Table ................. S.. Tira 8 8 se SS aides B. Denial of Plaintiffs’ Claim to Multiple Damages and Attorneys’ Fees............. C. Standard to be Applied in Determining a Vee erre eer eee D. Resolution of Disputes as to Factors to be Considered in Fixing a es Perl Perrer By Se eed ee UG ace tibw os ic 53a PAGE 2. The Usefulness of the Henricks Process in OM Shady cacasacepecas (a) Oldsmobile Bumpers ............. (b) Chevrolet Bumpers............... (i) Chevrolet's Use of the Patented (u) The Shape of the Chevrolet Bumper Did Not. Make Essential the Use of the Henricks Process . . (Cp IIE ibs 6c be ddlis cscs. (d) Cadillac Bumpers................ (e) Fisher Body — Elyria Bumper Parts . 3. The Usefulness of the Henricks Process in the Making of Non-Bumper Extruded Ni hicdes tik cae othe wa Foc Ske ke 6 os (a) Chevrolet-Bay City............... (b) Chevrolet-Buffalo................ Oe (a) atom Miscwonsts..........22....5. Se NE 5. ossn we oredenda ce ee eo ioo'ein u's v'k'o es caw Ps be (g) Dhenel Requiomem ................ (h) Fisher Body-Columbus............ 6s ny a ecmce poe be Os eR ee ee 66 aaa asta en's aes welee oor » (1) Saginaw Steering ................ 4. Defendant Used Borax and TKPP in Bumper-Making to Improve the Lubri- cant, Not Because Those Substances Cost Less than Soap.......6.--eeeeee cece 5. Declination to Treat as Controlling in Fixing a Royalty Certain Transactions Relied on by Defendant ........-.-.--- (a) The Transfers of Interest in the Pat- ent in 1955 and 1965 ............. (b) The Value Put on the Patent by One of the Owners for Estate Tax Purposes (c) Settlements by Plaintiffs..........- (d) The Formea “License” ..........-- 6. The Royalty Base .........----+--++- 7. The 1964 Offer to License ............ S. Senet... ov ckanvsasaeeees ns baeeedeavs 1. Plantiffs are Entitled to Prejudgment In- terest on the Law as well as the Facts .... 2. The Interest Computation ............ G. Accounting ...........-seeeececcceeces eeprrerrerrs yr Peer eee See 6 é@°6 @ 2 ER BEE OES CS, 8-8 AS SS SS op wo NM g £. ae A 6. SeOMATY «cee w ee cawesane 55a I. PROCEDURAL BACKGROUND A. History of the Case In late 1956 and in 1957, plaintiffs filed lawsuits against General Motors Corporation and Houdaille Industries, Inc.., respectively, in the United States District Court for the North- ern District of Illinois, claiming in both actions that defen- dants had infringed Claim 4 of the Henricks Reissue Patent No. 24,017. The patent had been reissued on June 7, 1955, on Original Patent No. 2,588,234 dated March 4, 1952, as the result of an application filed October 31, 1950. The patent expired on March 4, 1969 (Princ. Doc.,* Tab 1, p. 1; Plain- tiffs’ Br. on Acctg., p. 1; Defendant's Br., p. I-16; APTO,** App. I, p. 2). The Houdaille and General Motors actions were thereafter consolidated (382 F.2d at 19). Following trial, by opinion dated February 1, 1962, implemented by a final judgment entered June 29, 1962, Claim 4 was held by the District Court (through District Judge Edwin A. Robson) to be invalid and void (Princ. Doc., Tab 2). From the finding of invalidity, plaintiffs appealed. The Court of Appeals reversed, Devex Corporation, et al. v. General Motors Corporation, et al., 321 F.2d 234 (7th Cir. 1963), cert. den., 375 U.S. 971 (1964), adjudicating the validity of Claim 4 of the Henricks patent. After remand plaintiffs’ action against General Motors was transferred to the District of Delaware. Devex Corporation v. General Motors Corporation, 146 U.S.P.Q. 346 (N.D. Ill. 1965). Houdaille Industries remained as a defendant in the * The reference is to a booklet entitled “Principal Documents on Ac- _ counting” put together by defendant, and filed with plaintiffs’ concur- rence. ** “APTO" refers to the Pretrial Order on Accounting. 56a Chicago case (263 F.Supp. at 20). After discovery both sides in the Houdaille case moved for summary judgment on the issue of infringement. Plaintiffs prevailed. Devex Corpora- tion, et al. v. Houdaille Industries, Inc., 148 U.S.P.Q. 74 (1965). The Court of Appeals again reversed, Devex Corpora- tion v. Houdaille Industries, Inc., 382 F.2d 17 (7th Cir. 1967), concluding that summary judgment was inap- propriate. Later the Devex-Houdaille controversies were resolved by settlement (467 F.2d at 258). Meantime, the Devex action against General Motors was transferred to the District of Delaware and assigned to then Chief (now Senior) Judge Caleb M. Wright. Plaintiffs moved for summary judgment. In opposition to the motion General Motors advanced a finely spun venue theory toward the pro- position that it was not bound by the validity holding of the Seventh Circuit in the Houdaille case. Rejecting this argu- ment, the Court held that the Seventh Circuit's holding of the validity of Claim 4 of the Henricks Reissue patent bound General Motors. But, on the infringement question, the Court (differing from the shortly-thereafter-reverseu ap- proach of the Chicago District Court) held summary judg- ment to be inappropriate. Devex Corperation, et al. v. General Motors Corporation, 263 F.Supp. 17 (D. Del. 1967). Validity having been resolved, and infringement not being susceptible of summary disposition, a trial on the infringe- ment issue was held before Judge Wright. The result was a determination that defendant had not infringed the Henricks patent.* Devex Corporation v. General Motors Corporation, * Pre-trial skirmishes gave birth to two additional reported decisions: Devex Corporation, et al. v. General Motors Corporation, 275 F.Supp. $10 (D. Del. 1967), sustaining defendant's objections to plaintiffs’ over- broad interrogatories, and Devex Corporatoin, et al. v. General Motors Corporation, 285 F. Supp. 109 (D. Del. 1968), granting plaintiffs’ mo- tion to amend their complaint so as to assert the doctrine of equivalents. 57a $16 F.Supp. 1376 (D. Del. 1970). Plaintiffs appealed. And the Court of Appeals reversed, concluding that the District Court had erred as a matter of law in failing to find that defendant had infringed the patent in suit. Devex Corpora- tion, et al. v. General Motors Corporation, 467 F.2d 257 (3d Cir. 1972), cert. den., 411 U.S. 973 (1973). On remand, on March 15, 1974 Judge Wright appointed the undersigned as special master to resolve the issues remain- ing between the parties in the accounting phase of the litiga- tion. Discovery proceeded, and included dozens of deposi- tions, hundreds of interrogatories and answers, and thou- sands of pages of document production. Where controversies developed between the parties, they were resolved by the spe- cial master. * The trial began October 30, 1978, and concluded February 14, 1979. It consumed fifty-three trial days, and generated hundreds of exhibits. The last brief, filed in accordance with a schedule settled between the parties, was submitted August 15, 1979. Oral argument was held November 14, 1979. And, seminally, this is the special master’s Report.** * In the years since the order of reference, none of the special master's decisions have been appealed. Hence, the Court will be looking at all aspects of the accounting phase of the case with a fresh eye when it reviews this Report. ** If there is a sigh in this sentence, it stems from the reminder of mor- tality which the long duration of this controversy has produced. On February 4, 1977, George Hibbens, Esquire, one of defendant's counsel, passed away. Walter Blenko, Esquire, a principal advocate for plaintiffs, expired in November, 1978. Although both sides continued to be represented by counsel of the highest quality, the loss of these singularly able, and gentlemanly lawyers, caused sadness to all involved in the case. 58a B. Design of the Decision The character of the controversies here is such that to restrict the exposition of the decision-making process to numbered paragraphs would be to leave it choppy and dis- jointed. I have, therefore, elected to frame the decision in narrative form, cf. Ass'n of Westinghouse Employees v. Westinghouse Corp., 283 F.2d 93 (3d Cir. 1960), hoping that this style will make for a smoother, and therefore, more understandable flow. Style to one side, my aim has been to produce a decision which is understandable, subject to meaningful review, and therefore likely to advance the final denouement of this twenty-odd year old judicial drama. Toward that purpose a strong effort has been made to fairly come to grips with the major contentions advanced by each side. The record is heavy. The parties’ post-trial presentations by themselves con- sist of perhaps a thousand pages of brieis, proposed findings, comments, and computations. While I have not explicitly dealt with each of the very large number of contentions made by the parties, most have been treated with in the decision and none has been ignored in the deliberations leading to it. Il. INFRINGEMENT A. Law of the Case 1. It is the Law of the Case that Each of the Three Prior Trial Practices Infringe Plaintiffs accuse sixty-one separate practices which were employed at various of General Motors, divisions as infringing the patent in suit. Three of these practices were sub judice before Judge Wright, and later before the Court of Appeals for the Third Circuit in the earlier infringement cases. What the Third Circuit decided provides controlling guidance on 59a the infringement question here. Not atypically the parties are at odds on the Third Circuit's adjudication. The background of the “law of the case” controversy may be described in this way. Claim 4 of the Henricks patent teaches a process for the lubrication of metals before cold forming, and covers: “The process of working ferrous metal which com- prises forming on the surface of the metal a phosphate coating and superimposing thereon a fixed film of a composition comprising of solid meltable organic binding material containing distributed therethrough a solid inorganic com- pound meltable at a temperature below the melting point of the ferrous metal phosphate of said coating and having a hardness not exceeding 5 on the Mohs’ hardness scale, and thereafter deforming the metal.” (Princ. Doc., Tab 1, p. 18.) The “organic binding material” contemplated by the patent is soap. The “inorganic compound” is borax, or some other inorganic substance meeting the patent's claims and perform- ing the same function as does the borax. In holding the patent invalid, Judge Robson adverted to the indefiniteness of Claim 4 in that it did not specify“ . . . the amounts and proportions of the compounds ...” (Princ. Doc., Tab 2, p. 260). One of the lubricants before Judge Rob- son was Bonderlube (“BL”) 235, a material produced by a company then known as Parker Rustproof Company. BL 235 is described by Juége Robson as containing about three per cent borax (/Jd., p. 221). The Seventh Circuit, in reversing Judge Robson and validating the patent, held the absence of quantitative borax- content measures not to be fatal. Devex Corporation v. General Motors Corporation, 321 F.2d 234 (7th Cir. 1963). It 60a reached this conclusion although the BL 235 lubricant had a much smaller borax content (three per cent) than was sug- gested by Example XIX (at least fifty-eight per cent borax and boric acid), and Example XX (eighty-five per cent borax) found at column 15 of the patent (Princ. Doc., Tab 1, p. 15). When the General Motors case was transferred from I]- linois to Delaware for trial on the infringement issue, three ac- cused practices or processes were presented to Judge Wright (APTO, App. I, p. 26). The first was used by Pontiac for the formation of bumpers, and involved the use of phosphate over Parker's BL 246, a lubricant with a fifteen per cent borax content. The other two processes entailed the use of BL 235 (described as containing three per cent borax as Judge Rob- son had earlier noted, along with two per cent sodium nitrite and ninety-five per cent soap), and were employed in the making of valve lifter plungers at defendant's Diesel Equip- ment Division and the making of rocket parts at Pontiac (316 F.Supp. at 1380-1383). Judge Wright held that none of the three processess infringed ($16 F.Supp. at 1390). The Court of Appeals reversed (467 F.2d 257). In its opinion the Third Circuit devoted specific attention to the accused Pontiac BL 246 process. Defendant urges that the reversal was restricted to that process, and that Judge Wright's non-infrigement findings as to the two BL 235 prac- tices were either left undisturbed, or that it was the intent of the Third Circuit to keep the slate clean for fresh considera- tion on remand as to the BL 235 practices. Plaintiffs argue that all three practices were before the District Court, and came before the Court of Appeals by their appeal of the judg- ment below. Thus is the issue joined. While only one of many issues be- tween the parties, it is the first because its disposition will pro- vide controlling guidance as to whether the many other BL 235 (and like-BL 235) processes accused here infringe. 6la I conclude that plaintiffs are correct, and that the Court of Appeals did adjudicate the infringement of the prior trial BL 235 processes. Most simply put, the Third Circuit had before it a judgment which contained a finding of non-infringement as to all three processes, and held “The judgment will be reversed” (467 F.2d at 262). What was regarded by the trial court to be non-infringing was therefore held by the Third Circuit to be infringing. Nothing in the Third Circuit's decision implies that the Court wished to regard the BL 235 processes separately or dif- ferently from BL 246 which undisputedly was found to be in- fringing. For example, no distinctions between the two lubricants are drawn by the decision, such as would support the view that as to one the Court intended to reverse and as to the other it did not. Further, while mainly discussing BL 246, the Opinion in its very first sentence refers to the District Court's holding as involving a process used by General Motors to facilitate “... the fashioning of metal into automobile bumpers and other manufacturers.” (Emphasis added. 467 F.2d at 257-258.) The only “other manufactures” before the Court of Appeals were the two BL 235>processes. While the discussion could stop at this point, the impor- tance of the issue and the argumentative energy which defen- dant has devoted to it have impelled a closer look at the ap- pellate papers to assure that they are consistent with what ap- pears to be clear adjudicating language in the Court of Ap- peals Opinion. They are. In its brief on appeal to the Third Circuit, defendant repeatedly made reference to the BL 235 process. See e.g., General Motors brief at pages 11, 28, 31, and 34. Indeed, a reading of defendant's brief inspires a sense of deja’ vu, since defendant advanced in the Court of Appeals the same conten- tions which it repeats now toward the point that its BL 235 processes did not infringe. 62a Following the Third Circuit’s decisions, defendant filed a petition for rehearing. One cannot read that petition without acquiring the conviction that defendant itself knew the deci- sion applied to both the BL 246 and BL 235 processes. Both are explicitly referred to in the petition (see, e.g., Pet. For Reh., pp. 4, 5, 6). And, tellingly, defendant, for reasons best known to it, did not urge the Court to change, or as defendant would suggest “clarify”, its decision to make it apply only to the BL 246 process. To the contrary, cleaning tests on BL 235 samples were described, and defendant only urged the Court to give the tests of defendant's witnesses “greater considera- tion” (Id., p. 5). The Court was invited to recognize (as am I) that the “no cleaning problem” provision in the pretrial order cited in the opinion as “[t]he most important single item” (467 F.2d at 261) related to the Bl 246 process and not the Bi 235 process (Pet. for Reh., p. 6). The Court of Appeals declined to in any way adjust its decision in response to defendant's im- precations. In its petition for certiorari to the United States Supreme Cour: defendant made no distinction between the BL 246 process which it concedes the Third Circuit intended to hold as infringing, and the BL 235 processes which it now says were left open by the Court of Appeals’ decision. Again the petizion dealt with all three processes. After describing the District Court's findings with respect to the BL 235 and BL 246 accused practices (Pet. for cert., p. 8, particularly fn. 23), defendant characterized the holding of the Court of Appeals thusly: “In effect, the Third Circuit ruled that where a proc- ess patent is given limited validity by a holding based solely on coaction not described in the claim, and to which the claim is not limited, the patentee may nevertheless enforce its patent monopoly against other processes within the claim’s unspecific language, even where such coaction has not been shown to occur.” Jd., p. 10. 63a The “other processes”, as to which the Third Circuit is sug- gested to have erroneously ruled, appear from the context of the petition for certiorari to be the accused BL 235 processes as well as the BL 246 process. Nowhere in its petition did defendant suggest that the only process passed on by the Court of Appeals, and therefore subject to review by the Supreme Court, was the BL 246 process. Finally defendant did not apply for a special form of man- date separating out the BL 235 uses from the BL 246 practice, as was its right (FRAP 36, 41). The mandate as actually entered “ ... reversed as to that portion of the said [District Court] judgment which held that the defendant had not in- fringed Claim 4 of the Reissue Patent No. 24,017, which holding is the subject of the principal appeal herein .. .” That defendant should not have moved for a special form of mandate is consistent with what seems to me to beitsclear . recognition that the Court of Appeals intended to hold all three processes before it as infringing. The mandate as entered puts the final nail in the coffin of defendant's law-of- the-case argument. But, argues defendant, there are nevertheless differences between the characteristics of BL 235 and BL 246 which can be taken into account now to hold the latter non-infringing even though the Court of Appeals may have concluded other- wise. I do not find that the cases on which defendant relies support that conclusion. Imperial Chemical Industries v. National Distillers and Chemical Corp., 354 F.2d 459 (2d Cir. 1965), is cited by defendant as “especially in point” toward the proposition that there remains latitude to argue that the BL 235 prior trial practice did not and does not infringe. In JCI, a trade secret case, the trial court originally denied plaintiff a preliminary injunction, and the Court of Appeals reversed and remanded. See 342 F.2d 737 (2d Cir. 1965). On remand interlocutory relief was again refused, this time because the trial court cor- rected a finding which it had made prior to the first appeal. Again plaintiff appealed. This time the Second Circuit declined to reverse, and in so doing, it emphasized two factors which are not present here. First, in JCJ the trial court itself found it had been in error and corrected the error. In the case at bar the Court of Appeals found the trial court in error, and by its mandate of reversal the Court of Appeals corrected the lower court's error. What defendant seeks in this case is for me to in effect find the Third Circuit in error and reinstate Judge Wright's findings. Neither JCJ nor any other authority per- mits that result. Second, in JC/ the trial court's findings were themselves only tentative because “ ... the findings of fact made upon the motion for preliminary injunction are not controlling ...” (354 F.2d at 463). See also, 1B Moore's Federal Practice, { 404[10], p. 572. Here, in contrast, the prior trial accused practices were sub judice before the Third Circuit on appeal from definitive post-trial findings upon which a final judgment on the infringement issue rested. The Court of Appeals’ judgment, as to which certiorari was sought and denied, was final with respect to all findings and conclu- sions which were before the Court. Defendant also relies upon Aro Manufacturing Co., Inc. v. Convertible Top Replacement Co., Inc., 377 U.S. 476 (1964), which affirmed in part and reversed in part a decision at 312 F.2d 52 (1st Cir. 1952). An earlier installment of the Aro litigation (“Aro I”) (365 U.S. 336 (1961), reh. den., 365 U.S. 890 (1961)) had resulted in a holding that replacement fabric auto convertible tops sold for use on vehicles manufac- tured by General Motors, a licensee under the patent in suit, were permissible “repair”. The Supreme Court concluded that by purchasing and furnishing the replacement fabric, GM customers and the manufacturer,. respectively, were not direct or contributory infringers. In a subsequent Aro case 65a (“Aro II"), the District Court interpreted the earlier Supreme Court decision to mean that replacement fabrics for vehicles produced by an unlicensed manufacturer (Ford) were similar- ly immune from claim by the patentee. The Court of Appeals concluded that the Supreme Court had intended its ex- culpatory decision to apply only to vehicles which were manufactured under license (312 F.2d 52). Or certiorari the Supreme Court agreed (377 U.S. 476). Both Aro II opinions ‘ carefully review the logic and language of the Aro I decision, leaving no doubt that the Supreme Court had intended to limit that decision. Here, by contrast, logic and analysis com- pel the conclusion that the Third Circuit did net intend to limit its decision, but rather intended its reversal to apply to all three alleged infringements which had been placed before it for review. Defendant also adverts to Standard Orl Company of California v. United States, 429 U.S. 17 (1976). That case held that the district court had the power to open a judgment under F.R.C.P. 60(b) without seeking leave of the appellate court which affirmed it. Neither the holding, nor the brief discussion which supports it, have the slightest connection with the law-of-the-case issue here. The other cases cited, but not much discussed by defendant are similarly unpersuasive. The governing law-of-the-case principle is (quoting from Re Sanford Ford & Tool Co., 160 U.S. 247, 255) as an- nounced in Jn re Potts, 166 U.S. 263, 266 (1897): “When a case has been once decided by this court on appeal, and remanded to the circuit court, whatever was before this court, and disposed of by its decree, is considered as finally settled. The cir- cuit court is bound by the decree as the law of the case; and must carry it into execution according to 66a the mandate. That court cannot vary it, or examine it, for any other purpose than execution; or give any other or further relief; or review it, even for ap- parent error, upon any matter decided on appeal; or intermeddle with it further than to settle so much as has been remanded. ...” The task on remand is to play the ball as it lies. There can be no rolling over to give one side or the other a better shot. Here that means acceptance by me as master of the no- longer-disputable premise that the prior trial accused proc- esses using BL 235 as well as BL 246 are infringing. It follows as a matter of law that any other accused practices which operate in substantially the same way as those prior trial prac- tices, and which produce substantially the same results must also be found to infringe. Flat Slab Patents Co. v. Turner, 285 F. 257, 273 (8th Cir. 1922). See, dealing with the analogously applicable doctrine of equivalents, Graver Tank & Mfg. Co. v. Linde Air Products Co., 339 U.S. 605, 608 (1950). 2. Itisthe Law of the Case that Cleanability ina Routine, Commercially Acceptable Way Satisfies the “Cleanability” Requirement of the Patent The decisions touching the patent require that the user achieve “easy cleanability”. For the reasons which follow, I find that this requirement is satisfied by any accused process which permits cleaning to be done in a routine, commercially acceptable way. In its second review of the Henricks patent in the Houdaille case, Devex Corporation v. Houdaille Industries, Inc., 382 F.2d 17 (7th Cir. 1967), the Seventh Circuit made it plain that plaintiffs could not prove infringement based solely upon a literal reading of Claim 4 of the patent. They had to prove, in addition, that by following the Henricks’ teaching a “new and 67a. unexpected result” ensued (383 F.2d at 23). But for this re- quirement, the Court strongly implied, the patent would not have survived attack since “ ... such a [literal] construction would monopolize the whole broad field of metal forming with any use of dry soap and borax over phosphate at any temperature or pressure, regardless of results.” (Jbzd.) Following the decision of the Seventh Circuit, Judge Wright found that the BL 235 and BL 246 processes literally tracked the teachings of Claim 4, but held that they did not infringe because they did not achieve the new and unexpected ‘results promised by the patent as construed. In reversing, the Third Circuit swept aside arguments as to how the results were achieved, and held that it was sufficient for plaintiff to prove that the accused process achieved “easy cleanability” in conjunction with “satisfactory lubricity” (467 F.2d at 261).* The Third Circuit in its decision further illuminated the cleanability requirement by referring to a “no cleaning prob- lem” stipulation as meeting the requirement in BL 246 Pon- tiac bumper practice. The stipulation was a part of the pre- trial order in the infringement case (APTO, App. I, p. 10). Defendant has sought to limit it, believing that without the stipulation it would have been exonerated of infringement. But I think the “no cleaning problem” stipulation gave away nothing. For what the stipulation meant, and what it * Eutectic Corp. v. Metco, Inc., 579 F.2d 1 (2d Cir. 1978), involved patents for a flame spray device designed to cause a self-bonding coat to be affixed to metal surfaces. Citing the Third Circuit's Devex decision, the Court held it of no legal consequence that the reactions giving rise to the desired results were even different from those the patentee had reported. 68a was taken to mean, is that metal coated in the way taught by the patent could be cleaned in a routine, commercially accept- able way. The record of the prior trial made it crystal clear that Pon- tiac bumpers required multi-step post-forming preparation prior to electroplating. See, e.g., the cleaning procedures described in Judge Wright's decision (316 F.Supp. at 1381). The Court of Appeals was not ignorant of this. The clear pur- port of the Court of Appeals’ ruling is that the need for clean- ing did not vitiate the application of the patent. To the con- trary, it vitalized the patent so long as the cleaning could be done in the regular course of production. This conclusion is consistent with (what I have found to be) the Third Circuit’s holding that BL 235 processes also in- fringed. The prior trial valve lift plungers were cleaned after forming in a drum washer with a mild acid spray for 2-3 minutes (316 F.Supp. at 1382) and the rocket parts were cleaned in a strong alkaline cleaner (316 F.Supp. at 1389). Again it was enough that cleaning could be accomplished in a commercially routine way. While finding it to be the law of the case that it is enough to prove commercial cleanability (as in the prior trial bumper use of BL 246 and non-bumper lubrication with BL 235) the cleanability point should not be left without giving recogni- tion to an argument which the defendant has strongly, and not unpersuasively, urged. Defendant's argument can be stated thusly: In sustaining the validity of the patent, the Seventh Circuit found it advantageous, cieanability-wise, by comparing the patent with the so-called “German process” which involved a coating of soap-only over borax over the workpiece accompanied by a long soaking period. It found that the German process had a “serious defect in .. . that the residual deposit was not water soluble and presented a dif- ficult cleaning problem especially if the workpiece was to be oe Ne Reread 69a electroplated” (321 F.2d at 236). The Seventh Circuit relied upon plaintiffs’ argument that the “difficult cleaning prob- lem” was ameliorated because the patented process formed “amorphous glassy materials” and with the further result that “the formation of insoluble organic materials is inhibited and there is no cleaning problem” (Jd. at 236-237). The Seventh Circuit emphasized this unexpected result in its opinion in the second Devex case (382 F.2d at 22-23). Defendant urges that in fact the selfsame water insoluble substance produced by the German process is produced by the accused BL 235-type processes. It submits that its items of manufacture, particularly those produced by processes like the prior trial BL 235 processes, are neither less nor more dif- ficult to clean than was the case under the German process. It urges that plaintiffs have failed to prove that the accused borax-containing lubricants create more cleaning difficulties than would have been the case were the borax omitted. Defendant concludes, therefore, that these processes cannot be held to infringe. This is not a frivolous argument. It was evidently persuasive to Judge Wright, whose decision finding non-infringement cited evidence showing that zinc stearate (the difficult-to- clean substance deposited by the German process) also ap- _peared when defendant practiced the accused patented proc- esses. E.g., Findings 12(a), (c), (d), (e), (f), (g), (hh), (i), Gj). (), and 13 (316 F.Supp. at 1586-1389). And the argument was again ably made to the Third Circuit in defendant's effort to secure an affirmance of the District Court's non-infringement findings. Indeed, an examination of its brief on appeal and its motion for reargument makes it plain that the bulk of defen- dant’s presentation on review was devoted to the proposition that plaintiffs had not shown that the patented process resulted in a cold-formed piece easier to clean that would have resulted under the pre-patent German process. 70a Were I writing on a clean slate I might (or might not) reach the same conclusion as did Judge Wright. But I am not. The Third Circuit has adjudicated (as I have found) that the prior trial BL 246 and BL 235 processes infringe. By so finding, it can only have intended to compare the success of the routine (“simple and easy”) commercial cleaning steps used in the prior GM trial practices with the “difficult cleaning problem” postulated as the principal vice of the German process. It is that comparison which the Court found was “(t]he relevant comparison” (467 F.2d at 261). To go at it a different way, defendant argued long and hard to the Third Circuit that Judge Wright was correct in holding that the prior trial practices (the BL 235 and BL 246 processes) produced the same water insoluble zinc stearate formed in the German process. (E.g., Defendant's Brief to the Third Circuit, pp. 30-32). The Court of Appeals found it un- neccessary to assay the chemical correctness of defendant's contention. Rather it emphasized that the accused practices accomplished the needed cleaning job with no problem, which I take to mean in a routine, commercial way. If it is assumed that the German process could not be cleaned except with extraordinary effort, the logic of this approach is self- evident. But logical or not, the zinc stearate battle fought before Judge Wright and in the Third Circuit is now over. The special master’s marching orders are to find as infringing those practices which (in addition to the other patent re- quirements) have the same routine, commercial cleanability characteristics as the prior trial practices. And that is the ap- proach which will be followed. 7la 3. Itis the Law of the Case that Lubricity Suffi- cient to Achieve Effective Production Satis- fies the “Satisfactory Lubricity” Require- ment of the Patent In addition to routine, commercial cleanability, the deci- sions touching the patent require that the user achieve “satisfactory lubricity” (e.g., 467 F.2d at 261). At the trial of this cause the parties devoted a very large amount of energy toward laboratory proofs of the effect of borax and other inorganic substances on lubricity. Plaintiffs offered as an expert Professor Ernest Rabinowicz, of the Massachusetts Institute of Technology, toward the point that in pin-on-metal tests the addition of borax and equivalents tended to reduce the coefficient of friction of the steel to which it was applied. Defendant supplied Professor Kenneth Ludema, of the University of Michigan, whose laboratory tests, using a somewhat different pin-on metal device, generated results diverging by a large degree from those reached by Dr. Rabinowicz. Predictably, each side probes the tests of the other in an ef- fort to expose the errors which led to what it sees as mistaken conclusions. Plaintiffs assail the alleged inexperience of defendant's personnel in preparing test samples, Dr. Ludema'’s supposed failure to have checked his results for in- ternal consistency or drift, the manner in which the cantilever was attached to the Ludema machine, the manner in which Ludema accounted for the stick-slip phenomenon, and out- oi-control results statistically arguable as to some of Dr. Ludema's tests. For its part, defendant attacks the Rabinowicz friction machine, the top limit of 252°C. reached by plaintiffs’ tests, the many allegedly subjective adjustments Dr. Rabinowicz felt himself obliged to make to his test results, the supposed lack of repeatability of the Rabinowicz results, 72a the fact that the Rabinowicz tests were made with foreknowledge of what was being tested rather than in the blind, etc. While the record does permit a decision on the question of which set of lubricants was more slippery in the pin-on-metal tests, in the context of the controversies here that is an un- necessary exercise.* For if arguments among chemists were thought by the Court of Appeals to be unimportant in the cleanability context (467 F.2d at 261), they are of even less use in resolving the issue of whether the accused practices achieve satisfactory lubricity. Judge Wright found from the record as a whole in the prior infringement trial that “ ... defendant's processes are effec- tive, beneficial and an improvement over earlier solutions to their lubricating problems .. .” (316 F.Supp. at 1378). The Court of Appeals observed that the record supported (“pro- perly found”) this conclusion (467 F.2d at 260). The central inquiry here is not which expert in the antisep- tic environment of a laboratory would be most likely to ac- curately predict whether a particular lubricant will or will not achieve satisfactory lubricity. Lubrication tests in a * In other phases of the case findings are made although not strictly necessary to the conclusion reached so as to try to make a record which will avoid the need for remand if there is found to be error in any par- ticular. In the matter of the lubricity tests | should say that I am not in doubt as to which of the two experts, by reason of experience and the reasoning underlying his views, | would trust were I to embark on a com- mercial venture in which laboratory information as to the slipperiness of metal variously coated. But although a choice could be made between the experts as to which set of tests to credit, it is clear that each was sin- cere and forthcoming. and believed in the reliability of his experiments. Under such circumstances it seems to me a gratuitously hurtful exercise to resolve what I have concluded to be an immaterial controversy. 73a laboratory are at best an imperfect barometer of what pro duction experience is likely to show. It is how the lubricant works in the production process that is the true test.* I find that borax-containing lubricants would not have been used in actual production if defendant did not believe they worked satisfactorily. Respecting this conclusion, defendant's references to in- stances in which borax-containing lubricants did not work are of interest: “Pontiac tried Pennsalt Drawcote 1044 on its pro- duction equipment. Tr 5018 (Herrmann); Def. Ex. A-28-2. This lubricant contained 74 percent borax and 25 percent sodium tallow soap. Def. Ex. A-25, Pennsalt tab, p. 3. The work so lubricated was broken in the test, and Pontiac did not use such lubricant in production. Def. Proposed Finding Tr D-5. “A decade later, Pontiac had trouble with Great Lakes Steel lubricated by Production Finishing with * At oral argument, defendant's counsel stated: “As I read the Court of Appeals decision at least, it seems to me that the Court is saying that if you use it and don’t have troubles, that is satisfactory lubricity.” (Tr., p. 68 of oral argument held November 14, 1979.) Plaintiffs put it most succinctly in their brief to the Third Circuit: “The practical man in the shop doesn't care about theories, he looks to results.” (DX A-22, Third Cir. Br., p. 19.) Defendant, after making its criticisms of the Rabinowicz tests, made the point“ .. . that none of the laboratory tests can do more than confirm production experience and provide some indication of why production observations occurred.” (Defendant's Comments on Plaintiffs’ Proposed Fact Findings 75-110. p. 28.) Both sides appear to agree that coefficient of friction, which was all the laboratory tests were designed to measure, is not necessarily control- ling in lubrication selection (Wojtowicz, Tr. Wee Herrmann, Tr. 5018). 74a Bruko D-122 (PF888), then 50 percent borax, 45 percent sodium tallow soap. Def. Ex. A-25, Bruce tab, pp. 2-3. The cure, as Pontiac found out, was to get rid of the borax, which was done. The resultant Bruko 27 soap-only lubricant worked fine and is still in use. Tr 6108-17 (Kopchick); Def. Proposed Find- ing No. D-4; Def. Ex. A-25, Bruce tab, pp. 1-2." (Defendant's Comment on Piaintiffs’ Proposed Fact Findings 75-110, p. 3.) From this defendant urges that the inference be drawn that borax in practice was an inferior lubricant. But the truth that emerges from defendant's example is not that borax in a lubricant made it universally less satisfactory. Rather it is that borax in a lubricant on occasion was unsatisfactory. The evidence shows that where borax-based lubricants were un- satisfactory, they were replaced. The correlative truth must be that where borax-containing lubricants were retained, or were substituted for lubricants not containing borax, it was because they did the job better. That is the inference toward which the evidence propels me. Accordingly, I find that it is the law of the case that borax- based lubricants selected for and used in actual production met the “satisfactory lubricity” requirement of the patent and the Circuit Court decisions construing it. B. Accused Practices Held to be Infringing 1. Accused Practices Which Must Be Held to Infringe as the Result of the Law of the Case (Bumper-Accused Practices 4, 5, 12, 13, 36, 48, 49, and 51; Non-Bumper-Accused Prac- tices 7, 9, 16, 17, 22, 25 (in part), 26, 27, 28, 30, 31, 37, 38, 42, 47, 54, and 56) th Pow, 75a Those practices which respond literally to Claim 4 and “achieve easy cleanability in conjunction with satisfactory lubricity” (467 F.2d at 261) comparable to the prior trial practices, must be held to infringe. On this basis I find as in- fringing, in addition to the already adjudicated prior trial bumper practice, the following bumper practices: Accused Practices 4 and 5 Accused Practices 12 and 18 Accused Practice 36 Accused Practices 48, 49, and 51 Cadillac's use of BL 246, 247, 247A or 249 (all soap and borax) during the 1959 and 1962 model years and thereafter (APTO, CAD:1) Chevrolet Livonia's use of Kearns 3833 and Pennwalt 1047 (both soap and borax) during the period 1958-1965 (APTO, CL:1) Fisher Body's use of Bruko D-122, Kearns DF-4800, or Pennwalt Drawcote 1044 (all soap and bo- rax) from 1957-1960 (APTO, ‘FBC:1) Pontiac's use of BL 246 (the prior trial lubricant but for bumper parts) from 1955-1959, and BL PTD 1239A and BL 249A (soap and borax) from late 1958-1963 (APTO, P:2) Without trying to describe them because they are nu- merous, varied and fully detailed in the pretrial order, I find that the following practices for the cold-forming of non- bumper parts are literally within the Henricks claim, and 76a produce the same combination of lubricity and cleanability characteristic of the prior trial BL 235 valve lifter and rocket practices: Accused Practice 7, APTO, CBC:1; Accused Prac- tice 9, APTO, CD:1, Accused Practice 16, APTO, CP:1; Accused Practice 17, APTO, CP:1;* Accused Practice 22, APTO, DE:1; Accused Practice 25 (in part,** APTO, DP:1; Accused Practice 26, APTO, DR:1; Accused Practice 27, APTO, DR:1; Accused Practice 28, APTO, DR:1; Accused Practice 30, APTO, DR:2; Accused Practice 31, APTO, DR:2; Accused Practice 37, APTO, ID:1; Accused Practice 38, APTO, ID:1; Accused Practice 42, APTO, 0:1; Accused Practice 47, APTO, P:1; Accused Practice 54, APTO. SSG:1; Accused Practice 56, APTO, SSG:1. 2. TKPP isa Borax Equivalent, and the Use of it by Defendant as a Borax Substitute in Bumper Making Infringes (Accused prac- tices 6, 14, 50, 52, and 53). TSP is also a Borax Equivalent. (a) TKPP : By way of background, prior to the original infringement trial defendant moved to amend its complaint, which * Accused Practice 17 is included in a distinctive grouping by plaintiffs because molybdenum disulfide was a part of the lubricating process, although it is not claimed that use of that substance read on the patent. I should note that, while convenient for some purposes, the view I take of the infringement issues has been such as to make it inconvenient, and sometimes confusing, to follow plaintiffs’ groupings. Hence I have at- tended upon their suggested categorizations in the reaching of the various decisions in this report, but do not separately advert to them in the writing of it. ** Accused Practice 25 involved the production of piston rods, studs and rings. For the reasons set forth at pages - , infra, the portion of the practice devoted to the production of piston rods has been held to be non-infringing. See particularly first footnote on page 77a theretofore accused only borax-containing lubricants, to in- clude non-borax equivalents. The amendment was allowed by Judge Wright, Devex Corporation v. General Motors Cor- poration, 285 F. Supp. 109 (D. Del. 1968), and a new com- plaint charging infringement by the use of borax substitutes was filed. See amended complaint, Princ. Doc., Tab 8d, 46. The five accused bumper-making practices now to be con- sidered involve the use of tetrapotassium pyrophosphate (TKPP) in the soap-basea coating. In addition to the defenses common to all charges (no proof of better lubricity, cleanability, etc.), General Motors defends against the “TKPP" charges with the contention that there is no infringe- ment because the melting point of TKPP is, contrary to the requirement of Claim 4, not “ . .. below the melting point of the ferrous metal phosphate of said [the lubricant] coating.” I view the question of whether the use of TKPP infringes to be of substantial importance. TKPP came to be used in bumper production, where I believe the Henricks invention had its major utility. It was introduced after the patent was held valid, in an attempt to avoid infringement by adding to the then used soap composition an inorganic substitute for the borax it previously contained. The pattern is clear. Accused Practice 6 came to be used at Cadillac in 1964 and afterwards and involved the use of Bonderlube 201 or 202 (25% TKPP) over phosphate. It was the successor to Infring- ing Practice 5 which involved Bonderlube 247 and 247A (46-50% borax), or Bonderlube 249 (30% borax) (APTO, CAD:1-5). Accused Practice 14 substituted Bonderlube 200 or 200A (20-25% TKPP) for the Kearns 3833 (45% borax) in Infring- ing Practice 12 at Chevrolet Livonia. The change came in early 1965 (APTO, CL:1-9). 78a Accused Practices 50, 52 and 53 used Bonderlube 200, 200A, 201, or 202 for bumper making at Pontiac and were the successors to a series of practices beginning with the prior trial bumper practice and ending with Infringing Practice 51 which had used Bonderlube 249A (30% borax). The TKPP use at Pontiac began with Accused Practice 52 about September 1963 (APTO, P:1-3, 6-17). There is no evidence that TKPP was used for any purpose other than as an integral part of the soap lubricant applica- tion. TKPP was put in as a borax substitute, to help the soap do the job of efficiently lubricating the workpiece. That is why the question of whether substitution of TKPP for borax avoids infringement in the five accused processes under con- sideration is of more than passing significance. If the use of soap with TKPP were held not to infringe, defendant would not only have defeated the attempt to charge the five accused TKPP processes. It would have established that, at least by late 1963, another non-infringing alternative was available in the bumper area. On the other hand, if the use of TKPP as a borax equivalent infringes, it will be deducible that defen- dant could not readily avoid the patent's clairns despite its recognition of their validity and its effort to find a non- infringing alternative. It may be thought the question of whether TKPP in defen- dant’s use was meltable at below the melting point of the fer- rous metal phosphate of the coating is susceptible of a quick, easy answer to a scientific certainty. It has not proved to be so. Like the lawyers for both sides who have asked them the ques- ’ tions, the well-credentialed scientists called by the parties have differed on the melting point question. For its part defendant points out that the handbook melting point of “ferrous [metal] phosphate” adverted to in the Henricks patent is 1050° C. (Princ. Doc., Tab 1, Col. 9, Line 9 of Table 1). The handbook melting point of anhydrous 79a TKPP is 1109° C.* Ergo, concludes defendant, TKPP is not meltable below the melting point of the ferrous metal phosphate, and its use does not preempt the patentee's rights. Plaintiffs reply that despite what the handbooks:say about the melting point of anhydrous TKPP, in practice the TKPP in the coatings as applied by defendant would melt before the ferrous metal phosphate. I think plaintiffs have the better of the argument. The patent does not speak of the melting point of ferrous metal phosphate in a crucible. Claim 4 adverts to “the ferrous metal phosphate of said coating.” Jn situ that would be close * While anhydrous TKPP’s melting point is 1109° C. (Van Wazer, Tr. 4680-4681), hydrated TKPP has a handbook melting point of 180° C. (Othmer, Tr. 766-768; DX A-20, p. 256). A distinguished expert witness for plaintiff testified that the aqueous character of the coating recipe for the application of the TKPP would cause it to become hydrated (Othmer, Tr. 868, 869, 873-876). On the other side an expert witness for defendant testified based on x-ray patterns that, despite the seeming logic of the view of plaintiffs’ expert, in fact the TKPP in defendant's coatings was not hydrated (Van Wazer, Tr. 4657-4670: DX A-24-4). Plaintiffs counter that x-ray tests detect crystal structures (Van Wazer, Tr. 4751-4752), but would be ineffective respecting the coatings here since, plaintiffs say, they are amorphous (Friedberg, App. 4, 1637-1638). Indication of loss of water vapor at relatively low temperatures in thermo-metric tests (DX A-31, p. 8; see also Van Wazer, Tr. 4657-4670), tends to support plaintiffs. If the TKPP in the coating were hydrated, the waters of hydration (or crystallization) would migrate from the chemical at 180° C. (Gthmer, Tr. 766-768). Plaintiffs argue that the melting point of the hydrated compound is the melting point of the TKPP within the meaning of the patent. Its expert supported this point of view (Othmer, Tr. 737-745), and so does the chemical hand- book (DX A-20. p. 256). Whether the TKPP as applied was hydrated, and whether the temperature level at which it would lose its waters of hydration is its melting point, are questions I need not decide since. in the view I take of it, plaintiffs must prevail even if the TKPP as applied were anhydrous. 80a to the melting point of the steel coated by the phosphate (Othmer, Tr. 747, 793-812, 825-828; PX A-73a), or in the area of 1525° C. (Friedberg, Tr. 2849-2964); PX A-74). It follows from this that the TKPP in the coating, even if anhydrous, would be meltable at a temperature below the fer- rous metal phosphate of the coating (1109° C. vs. close to 1525° C.). Experimentally, at the infringement trial plaintiffs’ expert, Mr. Friedberg, had taken a blank which had been coated with Bonderite 181X and Bonderlube 246 (15% borax) and placed it in a furnace. The temperature in the furnace was raised to 1000° C. He removed the blank from the furnace and found that all of the soap and borax had disappeared but the phosphate coating was still intact. From that test, Mr. Friedberg concluded that the borax melted before any melting of the phosphate including the zinc phosphate and the ferrous phosphate of the coating (Friedberg, App., Vol. 4,* 1572-1575; PX-79). A similar experiment was run by Friedberg for TKPP at the accounting trial. Mr. Friedberg formed a phosphate coating on a steel panel with Bonderite 114X and coated it with Bonderlube 202, which was used in certain of the accused practices and contains 24.8 percent TKPP. He placed the panel on top of an aluminum plate provided with a ther- mocouple and placed the aluminum plate on an electric hot plate. He heated the assembly up to 382°C. At 93° C., the lubricant coating was liquid and boiling. It turned brown at 149° C. At 288°C. it was a darker brown and at 382° C. it was sort of bluish (Friedberg, Tr. 536-537, 545-546, 555-558, 562; PX A-61b-1). From the liquification of the lubricant mix at that temperature, Mr. Friedberg concluded that the TKPP in * Refers to volume of appendix filed in the appeal to the Third Circuit. 8la this system was completely meltable at 93° C. (200° F.). This result is the same as the result which he had obtained for the borax-containing lubricant that he tested for the infringe- ment trial (Friedberg, Tr. 558, 562). Borax concededly fits the patent’s melting point requirement. Mr. Friedberg explained that when one mixes a first chemical compound with a second chemical compound, or with several compounds, the melting point of the pure material is changed. The mixture has a new melting point (Friedberg, Tr. 696-697). This is. consistent with the testimony of defendant's expert witness, Dr. Van Wazer, who explained mixtures using a chart of a TKPP and phosphorus pentoxide mixture (DX A-24, Tab b). The melting point of pure TKPP was given as 1109°C., but the melting point of the mixture was lowered as various amounts of phosphorus pen- toxide were added (Van Wazer, Tr. 4723-4725A). I find plaintiffs’ explanations persuasive. Further, I note that defendant did not introduce any evidence, apart from its handbook melting points of pure anhydrous TKPP and fer- rous metal phosphate, of the melting point of TKPP in the coating itself. Nor did it offer experimental proof to show that TKPP's “meltability” in the coating diverged materially from the melting point of borax as both related to the melting point of the ferrous metal phosphate. In reaching this conclusion I have taken note that in their case against Rockwell plaintiffs filed interrogatory answers pegging the melting point of the ferrous metal phosphate of the coating at 1050° C. (DX A-48, Item 14, P. 7 and DX A-2, Item D-3, p. 4). Defendant argues that this is a wobble, and that there has been other melting point vacillating by plain- uffs. 1 agree, and had the issue been closer this might have been enough to tilt the decision defendant's way. But, despite plaintiffs’ positional trembles, it seems to me that the evidence shows that once the ferrous metal phosphate was bonded to 82a the workpiece its true melting point would be higher than the 1050° C. handbook melting point, and that, at the other end, the melting point of the TKPP in mixture with soap would be lower than the 1109° C. attributed as the melting point of the pure anhydrous substance. But, defendant argues, what the Seventh Circuit saw as the “amorphous glass materials which contributed significantly to the lubricating value of the [borax-containing] coating” (321 F.2d 237), are not shown to be duplicated in TKPP-con- taining coating. While I agree that plaintiffs have not proved that TKPP behaves to produce the same materials as did borax, the Third Circuit recognized that variations were possible, and permissible. “Moreover, it may be that chemical reactions dif- fered in degree, and perhaps in kind as well, in dif- ferent applications of the Henricks process. . . . it is not claimed that in every Henricks mix under every temperature, chemical reaction and its products will be identical.” (467 F.2d 261-262). I conclude that the TKPP in Accused Practices 6, 14, 50, 52, and 53, as it existed in coating used by defendant, was meltable at a point below the melting point of the ferrous metal phosphate of said coating. The practices were used to accomplish the same results as the accused and infringing borax lubricated processes they replaced. That being so, and since as I have found they literally read on the patent, they are found to infringe. (b) TSP The use of Bonderlube 242, 242-O and 242-W, contain- ing from 11 percent to 53 percent trisodium phosph [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_IA40385018_0220%3A2. Public record. Not legal advice.