Appendix — Swofford v. B & W, Inc.

la

da

— Anited States Court ot Annee

For tae Firrs Crcurr .

No. 23861

Marvin K. Sworrorp, Marron F.

Wricut anp Essex Corporation,

d/b/a Tue Patrurinper Company,

Appellants-A ppellees,

v.

B & W, Inxc.,

A ppellee-Appellant.

(AND REVERSE TITLE)

APPEALS FROM THE Unirep Srares Disraor Court

FOR THE SouTHERN Disraict or Texas ’

(May 29, 1968)

Before WISDOM and GOLDBERG, Circuit Judges, and

SEALS, District Judge.

- WISDOM, Circuit Judge: The plaintiffs (for conven-

' ience collectively referred to here as Swofford) brought

this patent infringement action in March 1961 against

B& W, Inc. The district court denied B & W’s motion

to strike Swofford’s jury demand. On an interlocutory

appeal .we affirmed the action of the district court and

held that Swofford was entitled to a jury trial on the

issues of validity and infringement. Swofford v. B ¢ W,

Inc., 5 Cir. 1964, 336 F. 2d 406, cert. denied, 379 U.S. 962,

85 S. Ct. 653, 13 L. Ed. 2d 557. On remand, at: the close

of the evidence the questions of novelty, utility, and- non-

obviousness were framed in several interrogatories which,

with the appropriate instructions by the court, were pro-

pounded to the jury. The jury found that the patent in

issue was for a novel, useful, and nonobvious* invention. -

These findings, however, were not “the end of the matter.’”®

1 The Plaintiffs in this action are Marvin K. Swofford and Marion

F. Wright, inventors of the patented device, and Essex Corpora-

tion d/b/a The Pathfinder Company, the latter being substituted

for the original exclusive licensee, Pathfinder Oil-Tool Company.

Swofford and Wright developed a. new cleaning tool to be used

in the oil industry for scraping the: walls of a well bore. Until

1954 all such tools were called “scratchers” because.of their pro-

truding metal fingers or bristles. June 4, 1954, Swofford filed

for a patent teaching a “wiper” — a new cleaning tool with cable

loops (both ends fixed) instead of bristles, which supposedly

eliminated certain problems caused by the “scratcher’’. Letters

Patent issued in 1958, but B & W, Inc., developed and sold a sim-

ilar “wiper” without Swofford’s permission. This infringement

action followed. "li .

2 The jury answered, for example, “We do” corresponding to each

claim of the patent in answer to the interrogatory (No. 21):

“Do you find that the combination defined in the claims of the.

plaintiffs’ patent in suit is a combination the structure of which °

was not obvious as of June 4, 1954, to a man of ordinary skill in

the art who had knowledge of all of the prior devices and refer-

ences?” 251 F. Supp. at 815. ; :

7° [U]pon adjudication in court, under the statute, when novelty,

_ utility and unobviousness as defined in section 103 are found to

exist, and provided there is no one-year statutory bar, then there

is patentability and that is the end of the matter.” Rich, The

Vv Concept of Invention as Replaced by Sec. 103 of the 1952

Patent Act, 46 J. Pat. Off. Soc’y 855, 866 (1964).

e

>

* et

3a ac

The district judge disregarded the express jury find-

ings concerning nonobviousness under the following ra-

tionale : : !

The ultimate issue of whether a: patent meets the ©

requisite standard of invention is a question of law

rather than one of fact... . However, while. invention

. is a question of law, what-the prior art was and what

the “ae did to improve upon it are questions of

fact... . 251 F. Supp. at 815.

The critical question now to be decided as a ibis Sok.

of law by this Court is whether what.Swofford and

Wright have done to improve upon the prior art as it

existed on June. ‘4, 1954 rises to the standard of inven-:

tion as_ defined by statute and in the. courts. The

answers of the jury to Interrogatories Nos. 1, 3 and 21

will have no influence upon this determination as they

are in response to the ultimate question of validity

itself, which I have found to be one of law rather than

of fact. 251 F. Supp. at 817.

The court went on to find the patent in issue invalid though

infringed. 251 F. Supp. 811. Swofford appeals from the

judgment of the district court, urging that obviousness is

a question of fact for the jury rather than a question of

law for the court; that the court, therefore, erred in sub-

stituting for the jury fact-finding of nonobviousness its own >

legal conclusion of obvious. B & W appeals from that por-

tion of the court’s decision holding that the patent was in-

‘fringed. We affirm.

- We agree with the district court that obviousness is a |

question of law, and we approve the court’s conclusion that

Swofford’s patent was obvious to a man of ordinary skill

in the art who had knowledge of all the prior devices and

4a

references. Because of our. “holding that the idbsiie ae

invalid, we do not reach the issue of infringement.

I.

_. The 1952 Patent Act sets out three conditions of patent-

ability: novelty, utility, and nonobviousness. 35. U.S.C.

§ 101-03. Novelty and utility are defined in sections 101

and 102; ‘these conditions track the 1874 codification of

patent. law and express the traditionally applied. “new and |

useful” tests. Novelty* and utility,’ clearly issues of: fact,

have existed in the statutory scheme of patentability since.

the Patent Act-of 1793. The term “nonobviousness”, how-

ever, appeared for the first time in’section 103 of the 1952

act. It expresses the third condition for patentability as

follows:

§ 1038. Conditions for Patentability; shat subject

matter

A pateik may not be. detaitind though the invention.

‘is not identically_disclosed or described as.set’ forth

in section 102 of this title, if the differences between

the subject matter sought to be patented and the prior.

art are such that the subject matter as a whole would

have been obvious at the time the invention was made

to a person having ordinary skill in the art to which

said subject matter pertains. Patentability shall not ©

be negatiyed by the manner in which the invention

was made.

' 4#.g., Graver Tank & Mfg. Co. v. Linde Air Prod. Co., 1950, 339 .

U.S. 605, 609, 70 S.Ct. 854, 94 L.Ed. 1097 ; Bischoff v. ‘Wethered,

1869, 76 U. S. (9 Wall.) 812, 814, 19 L. Ed. 829.

5K. g., Harley C. Loney Co. v. Ravenscroft, 7 Cir. 1947.162 F. 2d

703, 704; Gordon Form Lathe Co. v. Ford "Motor Co.; 6 Cir. 1943,

113 F. 2d 487, 496. °

=<;

5a :

‘In 1966, in its first patent decision in many years, the

Supreme Court extensively analyzed the background and

nature of section 103. Graham v. John Deere Co., 383

U.S. 1,86 S. Ct. 684, 15 L. Ed. 2d 545.° The Overt con-

cluded that while Congress focused upon “non-obvious-

ness” rather than “Inventioy,’ as characterizing the proper

standard,’ both terms “place emphasis on the pertinent art

existing at the time the invention was made and both are

implicitly ‘tied to. advances in the art. sil S83, US. at 14.

The court then observed:

- While: the ultimate question of patent validity is

one law, . . . the § 103 condition, which is but one

of three conditions, each of which must be satisfied,

lends itself to several basic factual inquiries. Under

§ 103, the scope and content of the prior art are -to

be dotereniana: differences between the prior art and

the claims at issue are to be ascertained; and the

level of ordinary skill in the pertinent art resolved.-

Against this background, the obviousness or. nonob-

viousness of the. subject matter is. determined. 383

U.S: at 17.

The question here presented for our resolution is: By

whom is the obviousness or nonobyioumese of the subject

~~ matter to be determined!

6 See generally Kitch, Graham v. John Deere Co.: New Standards

for Patents, 49 J. Pat. Off. Soc’y 237 (1967) ; Pugsley & Calvert,

The Patentability - of Inventions, 4 Hous. L. Rev. 467 (1966) ;

Note, 44 Texas L. Rev. 1405 (1966).

7“The Major distinction is that Congress has ileal ‘non-'

obviousness’ as the operative test of the section, rather than the

_less definite ‘invention’ language . . .” 383 U.S. at 14. In prior |

cases, however, the terms were often used interchangeably. E.g.,

- Monroe Auto Equip. Co. v. Heckethorn Mfg. & Supply Co., 6

Cir. 1964, 332 F od 406, 410 (“it may be said that invention is

synonymous with unobviousness”). 0

6a

- A.. The issue of nonobviousness or invention has, at

various times, been held to present a legal,® factual,® or

mixed’ question. The Supreme Court at first took the

position that the issue.was one of fact. In Keyes v. Grant,

_ 1886, 118 US. 25, 37, 6S. Ct. 974, 30 L. Ed. 54, the Court

stated:

: “It was Seilated by the § ciealiieas that no such ar-

rangement and combination were to be found [in the

prior art], and that the improvement which they con- |

stituted was not the result of mere méchanical skill,

but sprung from a ‘genuine effort of: invention; and

this view was supported by, the opinion of many ex-

:. - perts skilled in the art. In our opinion, this was a

question of fact, properly to be left for determination

to the jury, under suitable instructions from the court

upon rules of law which should guide them to their

verdict. °

» With one exception,” this view was followed until 1950. -

8 E.g., Cee-Bee Chem. Co. v. Delco Chaitin, Ine., 9 Cir. 1958, 63

F.:2d 150,153. - |

® E.g.,. Trico Prods. Corp. v. Delman Corp., 8 Cir. 1950, 180 2d

529, 530.

10 Bg. Hycon Mfg. Co. v. H. Koch & Sons,.9 Cir. 1955, 219 F. 2d

353, 35

11 Mahn v. Harwood, 1884, 112 U. S. 354, 5S. Ct. 174, 28 L.Ed. 665;

see Note, A Valid Patent — Graver v. Linde, 5 NY. U. Intra.

L. Rev. 70 (1950).

12.Graver Tank Mfg. Co. v. Linde Air Prods. Co., 1949, 336 U.S.

_ 271, 68 S.Ct: 535° 93 L.Ed. 672; Dow Chem. Co. Vv. Halliburton

“ Oil Well Cementing Co.,. 1945, 324 US. 320, 65 S.Ct. 647, 88

L.Ed. 973; Williams Mfg. Co. v. United Shoe Mach. Corp., 1942, :

316 U.S. 364; 62 S.Ct. 1179, 86 L.Ed. 1537; United Gas Public

’ Service Co. v. Texas, 1938, 303 U.S. 123, 58 S.Ct. 483,.82 L.Ed.

702; United States v. ‘Esnault-Pelterie, "1936, 299 U. S. 201, 57

S.Ct. 159, 81 L.Ed. 123; Thomson Spot Weider Co.’ v. Ford.

Motor Co., 1924, 265 US. 445,.44 S.Ct. 533, 67 L.Ed. 1098;

- Continental Paper Bag Co. v. Eastern Paper Bag Co., 1908, 210

US. 405, 28 §.Ct. 748, 52 L.Ed. 1122. The Supreme Court cases.

are discussed in Note, ‘Appellate Review of _——e of Invention,

- 20 Geo. ‘Wash. L. Rev. 605 (1952).

7a

In that year the Court decided Great Atl. & Pac. Tea Go.

v. Supermarket Equip. Corp., 340 U.S. 147, 71 S. Ct. 127,

95 L. Ed. 162. Although the relevant holding in that case is .-

- less than crystal clear,!* the Court has since cited the A&P

case as direct authority for the proposition that “the ‘ul-

timate question of patent validity is one of law.” Gra-

ham v. John Deere Co., 1966, 383 U.S. 1, 17, 86 S. Ct. 684,

|

— 15-L. Ed. 545, 556. —_ proposition has since stood un--———

~~ challenged.

B. Swofford argues that this statement in Graham is '

not inconsistent with the proposition that obviousness is

a fact question.’¢ One court has properly observed, how- —

"ever, that “it becomes apparent that the confusion arising

: from the attempt to phrase the proper standard govern-

ing the determination -of. patentable invention stems from

the indiscriminate use of mere labels, which in themselves

are not conclusive.” Armour & Co. v. Wilson & Co., 7 Cir.

1960, 274 F. 2d 143, 155. Deller suggests approaching this

confusion by “breaking the question of patentable inven-

tion down into its component parts: what the prior art

was and what. the patentee did to improve upon, it, and

then, whether what: the patentee did is - ‘properly to be.

— as an invention.” : -Delier’s Walker on Patents

18 See Comment, Appellate — of Stieniieitions of Patent- .

_ able Inventions, 29 U. Chi. L. Rev. 185, 187. (1961) ; Note, Appel-

late Review of Finding of aia tac 20 Geo. Wash. L. Rev. 605,-

621. (1952). :

14 The plaintiffs’ position is that invention (nonobviousness), nov-

-elty, and utility are fact questions, but the over-all conclusion to

- . be drawn from these is one of law. As phrased by one’commenta-

. tor: “In other words, it is a question of fact whether the device

ig an advance beyond mechanical skill over the prior art, whether

- it is original, and whether it possesses utility, but it is a conclu-

sion of law to be drawn by the courtwwhether all these add up to

_a patentable invention.” ‘As the author then answers: “It is sub-

mitted that this is not entirely pgical.” Note, Patentable Inven-

tion as a — of ie pei 43 Mi. Aan Rev. 535, 536 Pere

—*

—

ae

8a -

§105, at 67 (2d ed. 1964). The Seventh Circuit, sitting

en banc to consider the precise -question presented to

this Court in the instant case, regarded the “component

’ parts” of what constitutes inverition (or nonobviousness)

as follows:

The first part relates to the showing made by the

prior art before the patentee produces his invention.

This: is to be determined upon the basis of testimony

and documentary or physical exhibits. The testimony

relates to the-use made of the prior art, and the docu-

_ mentary and physical exhibits do not stand mute but

~ . speak for themselves. Upon review, these are facts sub-

ject to Rule 52(a) and the exception found in the “Docu-

mentary — : x

The next element is concerned with the nature of the .«

improvement the patentee has made over the prior art.

Has he taught anything that is different? If there is

no improvement, the patent is anticipated under Sec-

tion 102 of the Patent Act. If there is an improvement,

we look to Section‘103 to see whether there is a differ-

ence or to ascertain the nature of the improvement over

the prior art. The determination of this element of

“novelty” usually finds its genesis in expert testiriony

and as. such is a question of fact, and on appeal, is

within the scope of es 52(a).

. ° .

The final step involves the resolution of the meaning

Of Section 103 of the Patent Act to determine, from

the language of the statute, whether “the differences

' between the subject sought to be patented and the prior

art are such that the subject matter as a whole would

have been obvious at the time the invention was made

to a person having ordinary skill in the art to which

9a

said subject matter pertains.” This requires the appli-

cation of the correct legal criteria to the factual deter-

- mination made by the trial court. This calls for the

extrcise of a legal judgment and as such is subject to

review by an appellate tribunal as a question of law.

C. Swofford tells us, however, that the Fifth Circuit’s

decisions hold that invention-is a question of fact for the

jury. While there is,some truth in this statement, for the

most part it represents precisely the type of confusion that

arises from “the indiscriminate use of mere labels”. In-

deed, there are decisions of this Court- stating squarely:

“The question f invention was here, as it ordinarily is,

one of fact... .” E.g., Hahn & Clay v. A. O. Smith Corp.,

5 Cir, 1963, 320 F. 2d 166, 173. See also Reynolds-South-

western Corp. v. Dresser Indus., Inc., 5 Cir. 1967, 372 F. 2d

592, 595, Others merely affirm district court “findings of

fact” that certain patents rise to the level of “invention”

or are “nonobvious”, sometimes upholding these findings

as not clearly erroneous. E.g., Zero. Mfg. Co. v. Mississippi

Milk Prod. Ass’n, 5 Cir. 1966, 358 F. 2d 857; Lorene v.

General Steel Prods. Co., 5 Cir. 1964, 337 F. 2d 726, 728;

Italit, Inc. v. Johns-Manville Corp., 5 Cir. 1964, 331 F. 2d

663, 666. Still others vascillate between the poles: “Validity,

*while often a pure legal question, is frequently one of fact

for resolution by the trier, including a jury.” Hughes Tool

Co. v. Varel Mfg. Co., 5 Cir. 1964, 336 F. 2d 61, 62 n. 1.

On the other side, however, stand decisions proposing

that “the question whether a particular patent meets te

standard of invention is a fully reviewable question of law.”

Houston Oil Field Material Co. v. Claypool, 5 Cir. 1959,

269 F. 2d 134, 137; Frite W. Glitsch & Sons v. Wyatt Metal

é Boiler Works, 5 Cir. 1955, 224 F. 24 331, 335; Little Mule

Corp. v. The Lug All Co., 5 Cir. 1958, 254 F’. 2d 268, 275-76.

See also Butex Gas Co. vy. Southern Steel Co., 5 Cir. 1941,

—

J 10a

123 F. 2d 954, 955. Our most recent decisions point to

resolution of the apparent inconsistency similar to the Sev-

enth Circuit’s: “The question of patent validity is one of

law, but to be decided on the results of factual inquiries.”

National Filters, Inc. v. Research Prod. Corp., 5 Cir. 1967,

F.2d , (No. 23883, Oct. 11, 1967, p. 3); Sisko v.

Southern Resin & Fiberglass Corp., 5 Cir. 1967, 373 F. 2d

866, 868; Up-Right, Inc. v. Safway Prods. Inc., 5 Cir. 1966,

364 F. 2d 580, 582. See also Hensley Equip. Co. v. Esco

Corp., 5 Cir. 1967, F. 2d (No. 23723, Sept. 15) ;

Metal Arts Co. v. Fuller Co., 5 Cir. 1968, F. 2d (No.

24123, Feb. 6). _—

The Courts of Appeals in the Sixth and Ninth Circuits

_ have extensively reviewed their opinions in those circuits

and have concluded that nonobviousness is a question of

law. Monroe Auto Equip. Co. v. Heckethorn Mfg. & Supply

Co., 6 Cir. 1964, 332 F. 2d 406; Bergman v. Aluminum Lock

Shingle Corp., 9 Cir. 1958, 251 F. 2d 801, 809 (concurring

opinion). Those decisions and that of the Seventh Circuit

took different routes in synthesizing earlier decisions,'* but

15 Monroe Auto Equip. Co. v. Heckethorn Mfg. ae 6

Cir. 1964, 332 F. 406, 411: “To the extent that

Bergman v. Aluminum Lock Shingle Corp, 9 Cir. 1958, 251

F. 2d 801, 812 (concurring opinion) : It is my view that a study

of this court's decisions since the Great A. & P. Tea Co. case,

‘supra, which have stated that the question of invention is one

of fact, will demonstrate either that such statement in that un-

lla

all reached the same conclusion. We adopt the . position

_ taken in. these circuits. ”

Thus what we have in a or case are three steps:

First, a determination of what the prior art was; this

involves factual questions. Secondly, there is a deter-

mination of what, if any, improvement the patentee has

made over the prior art; this will usually turn on expert

testimony and therefore is a question of fact. The final

step is to determine whether the improvement would

have been obvious to one skilled in the. art. This re-

quires application of a legal criteria [sic] and there-

fore is a question of law, fully reviewable by the ap-

pellate court. Monroe Auto Equip. Co. v. Heckethorn

Mfg. & Supply Co., 6 Cir. 1964, 332 F. 2d 406, 411.

This position has been taken, without extensive discus-

sion, in at least four other circuits’’ (i.e. other than Sixth,

-Seventh, and Ninth). Commentators advocated it.’* We

find no recent detision holding otherwise.

16 See the discussion in Comment, Appellate Review of Determina-

tions of Patentable Inventions, Chi. L. Rev. 185, 192-198

(1961). ° ‘ 3

17 Second Circuit: E.g., Hygienic Specialties Co. v. H. G. Salzman,

Inc., 2 Cir. 1962, 302 F. 2d 614, 617 n. 6; Tatko Bros. Slate Co. v.

Hannon; 2 . 1959, 270 F..2d 571, 572. Third Circuit: Eg

Packwood v. riggs & Stratton Corp., 3 Cir. 1952, 195 F. 2d on,

973-74. Fourth "Circuit : E.g., Heyl & Patterson, Ine. v. McDowell

Co., 4 Cir. 1963, 317 F. 2d 719, 722. Tenth Circuit: Griswold v.

Oil Capital Valve Co., 10 Cir. 1966, 375 F. 2d 532, 538; Blish,

Mize & Silliman Hardware Co. v. Time Saver Tools, Inc., 10 Cir.

1956, 236 F. 2d 913, 916. Accord: In re Sporck, Ct. Cust. & Pat.

App. 1962, 310 F. 2d 686 ; In re Eller, Ct. Cust. & Pat. App. 1962,

299 F. 2d 272. Contra, D.C. Circuit: er v. Watson, D.C.

Cir. 1961, 288 F. 2d 144, 145; C. H. inger Sohn v. Watson,

D.C. Cir. 1958, 256 F. 2d 713.

18 E.g., Deller’s Walker on Patents § 105, at 67 (2d ed. 1964);

Comment, Appellate Review of Determinations of Patentable

Inventions, 29 U. Chi. L. Rev. 185, 197-99 (1961). ~

b: 12a

a

Our conclusion that the ultimate issue under section 103 :

is one of law carries our approyal of the district court’s

having withdrawn the issue from the jury and having

independently decided it. We need not repeat here the

facts as found in the court below; nor do we feel it nec-

essary to summarize the court’s application of the legal

standard of nonobviousness to those facts. The district

. Judge withheld his Memorandum and Order until after Gra-

ham was decided and’ reviewed his holding in its light. -

We find that his opinion correctly applies the law set out

in Graham. We therefore adopt the relevant portion of

the district court’s opinion. Swofford v. B & W, Inc., S.D.

Tex, 1966, 251 F. Supp. 811, 815-19.

Since we dispose of this appeal on the validity issue, it

is unnecessary for us to consider the question of infringe-

ment or to pass upon B & W’s defense that Swofford mis-

used the patent.

. The judgment of the district court that the plaintiff’s

patent is invalid is therefore AFFIRMED.

13a

_ UNITED STATES COURT OF APPEALS

For tHe Firtx Circuit

Octoser TERM, 1967

No. 23861.

D. C. Docket No. 13,564 — Civil Action _

Marvin K. Sworrorp, Marion F. Wricut

AND Essex Corporation, d/b/a

/ Tse Parurinper Company,

Appeilants- Appellees,

versus | ‘.

B & W, Ixc.,

Appellee-Appellant.

_ (And Reverse Title)

APPEAL FROM THE Unirep States District Court -

FOR THE SouTHERN District or Texas.

Before WISDOM and GOLDBERG, Circuit Judges, and

SEALS, District Judge.

JUDGMENT

- This cause came on to be heard on the transcript of the .

record from the United States District Court for the South-

ern District of Texas,. and was argued by counsel ;

ON CON SIDERATION WHERBOF, It is now here

ordered and adjudged by this Court that the judgment of

the said District Court in this cause be, and the same is

hereby, affirmed ;

It is further ordered and adjudged that the appellants-

appellees, Marvin K. Swofford, Marion F. Wright and

Essex Corporation, d/b/a The Pathfinder Company, be

‘ condemned, in solido, to pay the costs of this cause in this

Court for which execution may be issued out of the said

District Court. |

Issued as Mandate: * May 22,1968 © «