# Appendix — Bourns, Inc. v. Allen-Bradley Co. > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385607_1117%3A2 ## Record - **Collection:** Supreme Court brief - **Document type:** Appendix - **Published:** January 1, 1973 - **Citation:** 414 U.S. 1094 ## Text EI Ke AF 6 ODOR IE IOLRY LIA TCS III OI ASEAN NIE Al BOURNS, INC. and Marlan E. Bourns, Plaintiffs-Appellants and Cross Appellees, Vv. ALLEN-BRADLEY COMPANY et al., Defendants-Appellees and Cross-Appellants. Nos. 72-1222, 72-1223. United States Court of Appeals, Seventh Circuit. Argued April 5, 1973. Decided June 14, 1973. Rehearing En Banc Denied July 17, 1973. SPRECHER, Circuit Judges. CLARK, Associate Justice. wh BRA ABS ORT Ae BAER Retired, is sitting by designation. PS Se AO AD OC MeITS ESOP ER as RS Are BADAL LOIN OS Mae MT, ET Sa Le Before CLARK, Associate Justice,* and PELL and Appellants Bourns, Inc. and Marlan E. Bourns challenge the District Court’s application of the doctrine of collateral estoppel as applied in Blonder-Tongue Laboratories, Ine. v. University of Illinois Foundation, 402 U.S. 313, 91 S.Ct. 1434, 28 L.Ed.2d 788 (1971), to bar this patent infringement suit which was filed in the United States District Court for the Northern District of Illinois against Allen-Bradley Company et al., appellees. Appellants alleged infringement of their “leadscrew actuated potentiometer,” Patent No. 2,777,926 (the ’926 patent). Among the defenses appellees pleaded collateral estoppel based on the final judgment entered against appellants in Bourns, Inc. v. Dale Elec- tronics Inc., 308 F.Supp. 501 (D.Neb. 1969). After the Supreme Court handed down the Blonder-Tongue decision, appellees filed amended answers further alleging that * Associate Justice Tom C. Clark, United States Supreme Court, A2 appellants had voluntarily dismissed their appeal to the United States Court of Appeals for the Eighth Circuit on May 4, 1970, and moved for summary judgment. The Dis- trict: Court, 348 F.Supp. 554, granted appellees’ motion, holding that Blonder-Tongue governed this case and that the Dale decision had invalidated all claims embraced in the 926 patent. We agree that Blonder-Tongue bars appel- lants from relitigating the patent claims explicitly invali- dated in Dale, but reverse the judgment below insofar as it bars appellant from relitigating the remaining °926 claims. 1. The Dale Judgment. In the Dale pleadings Bourns had alleged infringement on the basis of its patent generally, i. e., without singling out specific claims. Likewise, the defendants in Dale had counterclaimed for a declaration that the entire patent was invalid. However, the Dale judgment stated in relevant part: “2. Claims 1, 2; 11, 14, 15, 16 and 20 of the United States Patent No. 2,777,926 are invalid * * * * 7. The Amended Complaint is dismissed with prej- udice, and the Amended Counterclaim is sustained to the extent indicated.” The District Court here found the Dale judgment ambig- uous in its application to the 926 claims not explicitly men- tioned therein. On the basis of several isolated statements in the Dale opinion (e. g., “. . . the 926 patent is held to be invalid.”) it concluded that the Dale court intended to hold the entire patent invalid. We disagree with the District Court’s interpretation and conclude that Dale is binding only as to the claims specifi- cally mentioned in its judgment. The opinion in that case begins: “Plaintiff relies upon claims 1, 2, 11, 14, 15, 16 and es, “ro A3 20 of the 926 patent.” Further-down in the opening para- graph the opinion continues: “In determining the validity of the patent this Court must ascertain the essence and scope of the patent as stated in the above-mentioned claims.” (Emphasis added.) Still further in the opinion the court says: “Commencing with the history and progress of this application through the patent office as finally em- bodied in claims 1, 2, 11, 14, 15, 16 and 20, it provides some insight into the scope of the patent.” And in the judgment the Dale court again sets out these claims as invalid. We think it clear from these references that where the court — referred to the 926 patent as being invalid, it was referring only to those claims specifically designated at the outset and re-stated in the final judgment. As Professor Moore teaches : [A prior judgment] operates as a collateral estoppel as to, but only as to, those matters or points which were in issue or contraverted and upon the deter- mination of which the initial judgment necessarily de- pended. [Emphasis added. ] 1B Moore’s Federal Practice 3777 (2d ed. 1965); and, as Judge Learned Hand explained almost forty years before, “... [eollateral] estoppel extends only to facts decided and necessary to the decision.” Irving Nat. Bank v. Law, 10 F.2d 721, 724 (2 Cir. 1926). Since the Dale court’s judg- ment by its terms did not depend on the invalidity of claims not specified in that judgment, appellants are not collater- ally estopped from asserting the remaining claims of the 926 patent. 2. Application of the Blonder-Tongue Collateral Estoppel Doctrine. Appellants also urge that collateral estoppel should not be applied to bar their raising the same patent claims that 2 ee ah itt A4 were declared invalid in Dale. They rely on the statement in Blonder-Tongue that “the patentee-plaintiff must be per- mitted to demonstrate, if he can, that he did not have ‘a fair ’ opportunity procedurally, substantively and evidentially to pursue his claim the first time.’” 402 U.S. at 333, 91 S.Ct. at 1445. Appellants argue that they lacked an incentive to fully litigate in Dale due to (1) an alleged anti-patent bias of the Eighth Circuit, (2) the relative insignificance of the Dale suit, (3) new procedural advantages made available since Dale was begun, (4) the alleged greater hospitality of the Seventh Circuit toward patents, and (5) their reli- ance on the pre-Blonder-Tongue case of Triplett v. Lowell, 297 U.S. 638, 56 S.Ct. 645, 80 L.Ed. 949 (1936), which re- quired mutuality of estoppel. We need not pause to discuss these claims. They are fully answered by the District Court, which correctly noted that appellants themselves chose the Nebraska forum; that the Dale court applied Supreme Court standards of patent validity as enunciated in Graham v. John Deere Co., 383 U.S. 1, 86 S.Ct. 684, 15 L.Ed.2d 545 (1966) ; that the Dale litigation involved a po- tential recovery by appellants of approximately $1,000,000, and that “most if not all” of the evidence alleged by appel- lants to have been newly discovered was in existence and discoverable during the Dale litigation. The District Court concluded that appellants lost in Dale after a full and fair hearing and that the equities fully justify the application of collateral estoppel against them. The District Court also concluded that the Supreme Court in Blonder-Tongue implicitly rejected reliance on its prior decision in Triplett v. Lowell, supra, as an adequate basis for avoiding the general rule fashioned in the later decision. See Monsanto Co. v. Dawson, Chemical Co., 443 F.2d 1035 (5 Cir. 1971), cert. denied 405 U.S. 974, 92 S.Ct. 1191, 31 L.Ed.2d 248 (1972). We agree. The Dale litigation was pending for seven years in a jurisdiction with no back- SON BORODIN TOME RE MR NI S98 OD ae OLA RED ITD WM sae Da A5 log; the trial itself lasted six days and produced a tran- script of 610 pages; and the potential recovery was over $1,000,000. Thus, appellants had ample incentive to litigate the case to the end. True, the Supreme Court held in Trip- lett that collateral estoppel did not preclude “relitigation of the validity of a patent claim previously held invalid in a suit against a different defendant.” Triplett v. Lowell, supra, at 644 of 297 U.S., 56 S.Ct. 645. However, in over- ruling Triplett, the Blonder-Tongue Court did not see fit to rule prospectively, though it has so limited recent rulings | in other contexts where retrospective application would work hardship and inequity. Phoenix v. Kolodziejski, 399 U.S. 204, 213-215, 90 S.Ct. 1990, 26 L.Ed.2d 523 (1970); Cipriano v. City of Houma, 395 U.S. 701, 706, 89 S.Ct. 1897, 23 L.Ed.2d 647 (1969). Indeed, it specifically commented that in the end the use of the collateral estoppel doctrine “will necessarily rest on the trial courts’ sense of justice 4 and equity.” 402 U.S. at 334, 91 S.Ct. at 1445. The District Court has carefully appraised the justice and equity of 7 applying the doctrine here and has held against appellants. ; We have examined the record and conclude that its findings are fully supported therein. Appellants dispute that they had full and fair judicial resolution of their claims. They suggest that they aban- doned the Dale appeal in reliance on the Triplett rule. It may be that in some situations reliance on Triplett should relieve a patentee from the consequences of the Blonder- Tongue decision’s new collateral estoppel rules. But the cir- cumstances surrounding the Dale litigation, particularly the large potential recovery and the time and effort already expended, convince us that appellants would have pursued their appeal regardless of the Triplett rule had they held any reasonable expectation of ultimate success. Since appellants abandoned their appeal because they saw no rea- sonable chance of prevailing on the merits, we believe it by PR SF MS ee PERS PES ee AG | equitable both as a general matter and specifically under | the Blonder-Tongue decision to apply the estoppel rule established in that decision. The judgment below is reversed insofar as it bars appel- Jants from asserting the patent claims other than those explicitly declared invalid in the Dale judgment. In other respects the judgment is affirmed. PELL, Circuit Judge (concurring in part and dissenting in part). I concur in the majority opinion insofar as it reverses that part of the judgment of the district court which barred appellants from asserting patent claims other than those explicitly declared invalid in the Dale judgment. However, I respectfully dissent from the balance of the majority opinion. In considering the contentions of the appellants that the judgment in the District Court of Nebraska does not collat- erally estop them as to any claims of the patent asserted in the Northern District of Illinois, the following significant chronology should be kept in mind. The decision in the Dale case, Bourns, Inc. v. Dale Elec- tronics Incorporated, 308 F.Supp. 501 (D.Neb.1969), was handed down on December 29, 1969. The original decision of this court in University of Illinois Foundation v. Blonder-Tongue Laboratories, Inc., 422 F.2d 769 (7th Cir. 1970), was issued on February 13, 1970, and was modified on denial of rehearing on April 2, 1970. The appellants dismissed their appeal from the Dale district court decision in the Kighth Circuit on May 4, 1970. The complaint which was the fountainhead of the present appeal was filed in the Northern District of Tlinois on August 11, 1970. bebeiibd ere ene MRNAS AUR ay = VDE YA menvne AT The opinion in the Blonder-Tongue case in the United States Supreme Court, Blonder-Tongue Laboratories, Inc. v. University of Illinois Foundation, 102 U.S. 313, 91 S.Ct. 1434, 28 L.Ed.2d 788, was handed down on May 3, 1971. The Supreme Court in Blonder-Tongue overruled a prec- edent which had been on the books since 1936, Triplett v. Lowell, 297 U.S. 638, 56 S.Ct. 645, 80 L. Ed. 949 (1936). Triplett indicated that “the rules of the common law appli- cable to successive litigations concerning the same subject- matter” did not preclude “relitigation of the validity of a patent claim previously held invalid in a suit against a dif- ferent defendant.” 297 U.S. at 644, 56 S.Ct. at 648. This court in its original Blonder-Tongue opinion, while observ- ing that it would seem sound judicial policy that the adjudi- cation of a patent validity issue against the plaintiff in one action where it was a party would provide a defense in any other action by the plaintiff for infringement of the same patent, nevertheless stated, “That, however, is not the law in this field.” 422 F.2d at 772. In essence, the majority opinion in the present appeal concludes that the district court carefully appraised the justice and equity of applying the Blonder-Tongue doctrine to the present case and upon so doing reached a correct result. I cannot agree with the initial premise for, as I read the district court’s opinion, it concluded that the “justice in this matter is pre-empted by the Blonder-Tongue decision itself,” and plaintiffs’ reliance on pre-Blonder- Tongue decisions when abandoning their appeal “is con- trary to the holding of that controlling decision which abrogated the prior law.” I do not read the controlling case so broadly. I note the following significant passages in the opinion of the Court. “The broader question is whether it is any longer tenable to afford a litigant more than one full and fair opportunity a Tt ater nant SPREE LRAT ND OA POOR yy > " ; § ; EE A EB ALIAES. D2 UH AMG) r Al4 | of nonretroactivity.’ Cipriano v. City of Houma, supra, 395 U.S. at 706 [89 S.Ct. at 1900]. In an analogous situation this court recently considered the question in Bendix Corporation v. Balax, Inc., 471 F.2d 149 (7th Cir. 1972), and concluded that the holding in Lear, Inc. v. Adkins, 395 U.S. 653 (1969), should not be applied retroactively. Bendix has particular significance here because in Lear the Court held that a licensee is not estopped to interpose the invalidity of the licensed patent as a defense to an action by the patentee-licensor to enforce the license agreement. The Court expressly overruled its 1950 holding to the contrary. The venerability of Triplett was fourteen years greater. Applying the tests of Chevron to the present case: (a) a new principle of law was established by overruling clear past precedent on which litigants not only may but did in fact rely; (b) since litigants who have instituted lawsuits in reliance upon Triplett prior to Blonder-Tongue must of necessity be relatively limited in numbers, retrospective application would scarcely seem to further the operation of the principle enunciated; and (c) there is an inherent inequitable result if the principle is applied retro- actively with injustice being avoided by a holding of nonretroactivity. It is to be noted that the Chevron test refers to a fore- shadowing of the result but does so only in relation to the decision of a case of first impression. If “writing on the wall” is operative in the situation of a change of law also, then, although the Triplett rule may have been questioned by decisions and commentators, I am unaware of any clear- cut indication from the Supreme Court on which a lawyer could advise his client to the effect that Triplett would be overruled. “Rumblings,” as the district court referred to foreshadowing, is a chimerical basis for advice to a com- PR ROI OR VEL SRE MOD EA ON OSA See LN IR pO 60 WE ORD Ald mercial client who in the conduct of his affairs requires predictabliity of as great certitude as possible if he is not to be exposed to unexpected and undesired expensive litigation. As to foreshadowing, the situation was analogous in Lear, upon which Judge Sprecher commented in Bendiz, 471 F.2d at 156, as follows: “In Lear, there was an express overruling of a past precedent. Although the Court noted that ‘[llong before Hazeltine was decided, the estoppel doctrine had been so eroded that it could no longer be considered the “general rule”’ (395 U.S. at 664, 89 S.Ct. at 1908), nevertheless in Hazeltine the Court characterized it as the general rule. Whether Hazeltine was ‘clear past precedent’ to the Supreme Court in 1971, the unquali- fied pronouncement in that case undoubtedly made the doctrine clear enough to parties relying upon it from 1950 to 1971.” [Footnote omitted.] If foreshadowing is pertinent in the change of law situa- tion, then it would appear to me that the present case presents a stronger basis for finding no clear and compel- ling presaging of the change than in the Lear situation, where there had already been substantial erosion of the set- aside doctrine in 1950 at the time the rule was recognized as the general rule, although it was not actually set aside for another 19 years. I have adverted to the matter of advice of counsel in the commercial field and, in ultimate analysis, I find that the most persuasive reason for not denying the plaintiffs here their full day in court. The reasons are more compelling than the ordinary deference to precedent stated by Justice : Cardozo, “Adherence to precedent must ... be the rule : rather than the exception if litigants are to have faith in ’ the even-handed administration of justice in the courts.” ; SRP SE RS EVORS 1The Nature of the Judicial Process 34 (1921). i Gj i ici i i a NPI AR ITI ION aR _|t Al6 The essentiality of definite predictability was recognized by Mr. Justice Frankfurter in his separte opinion in Mon- roe v. Pape, 365 U.S. 167, 221-222, 81 S.Ct. 473, 503, 5 L.Ed.2d 492 (1961), when, speaking of the civil rights case before the Court, he observed, “This is not an area of com- mercial law in which, presumably, individuals may have arranged their affairs in reliance on the expected stability of decision.” Here the plaintiffs did arrange their affairs on what counsel justifiably could have taken as well-estab- lished law, and they should not now suffer because of a sub- sequent change of that law. The principle of continuance of adherence to precedent was overridden in its significance by policy factors deemed of greater importance in Blonder-Tongue. The resultant change of law, however, in my opinion, should not be con- trolling on the relatively narrow issue here involved in the situation of commitments made in reliance upon the prior law, which commitments were made prior to the change in the law. _ Bie ou» 7 bid — oe SN ae PR a YL hes IE F/T Per Pe Al7 BOURNS, INC., and Marlan E. Bourns, Plaintiffs, Vv. ALLEN-BRADLEY COMPANY et al, Defendants. No. 70 C 1992. United States District Court, N. D. Illinois, E. D. Feb. 2, 1972. DECISION and ORDER McMILLEN, District Judge. This cause comes on to be heard on motion of the defend- ants for summary judgment on the ground of collateral estoppel under Blonder-Tongue Laboratories, Inc. v. Uni- versity of Illinois Foundation, 402 U.S. 313, 91 S.Ct. 1434, 28 L.Ed.2d 788 (May 3, 1971). The court concludes that the defendants’ Motion should be granted, with the result that a final judgment will be entered in their favor. The earlier motions filed by the defendants are thereby ren- dered obsolete. The Complaint in the case at bar was filed on August 11, 1970 by the owner and assignee of United States Patent No. 2,777,926 issued on January 19, 1957. Plaintiffs allege that six corporate defendants, as representatives of a class, had been infringing their patent for six years and would continue to do so unless enjoined. Defendants answered separately and alleged that the patent was invalid for obviousness and for other reasons. They also alleged that plaintiffs were estopped and barred from the instant action by virtue of a final judgment entered against them by the United States District Court for Nebraska in Bourns, Ince. v. Dale Electronics Inc., 308 F.Supp. 501 (D.Neb.1969). , x Fs t : f t 4 OGRE PIE A vee Were Al18 After the decision in Blonder-Tongue, supra, defendants filed amended answers in which they alleged further that plaintiffs had acquiesced in the Nebraska judgment by voluntarily dismissing their appeal to the United States Court of Appeals for the Kighth Circuit-on May 4, 1970. Defendants thereupon filed the instant motions for sum- mary judgment which in substance are motions for judg- ment on the pleadings under F.R.Civ.P. 12(c). The only question on such a motion is whether a genuine issue of material fact remains to be decided and, if not, whether the moving parties are entitled to judgment as a matter of law. Since plaintiffs did not move to strike or to file a reply to defendants’ affirmative defenses of es- toppel and res judicata, the pleadings do not spell out plain- tiffs’ position with respect to these defenses. The court has considered the contentions made in plaintiffs’ brief, however, in light of the defenses suggested by the Supreme Court’s decision in its unanimous Blonder-Tongue decision. Despite possible harshness on occasion, there can be no doubt that Blonder-Tongue applies retrospectively. Mon- santo Co. v. Dawson Chemical Co., 443 F.2d 1035 (5th Cir. 1971), petition for cert. filed, No. 71-787, 40 U.S.L.W. 3356. It is true that plaintiffs were not apprised of this particular decision when they abandoned their appeal to the Kighth Circuit, but there were rumblings of it (cf. 402 U.S. 313, 91 S.Ct. at p. 1453). The same unfortunate turn of events occurred in Blonder-Tongue when the University of Illinois Foundation unexpectedly became bound by an adverse decision of the Eighth Circuit in University of Illinois Foundation v. Winegard Co., 402 F.2d 125 (8 Cir. 1968), cert. den. 394 U.S. 917, 89 S.Ct. 1191, 22 L.Ed.2d 452 (1969). The Supreme Court could have softened the blow by ruling only prospectively in Blonder-Tongue, as it has done on several occasions. Cf. England v. Louisiana State Bd. of a RE ew ner RAM Aes) LBV eens Le 6 RRR SE eer eet ar Ald Med. Exam., 375 U.S. 411, 84 S.Ct. 461, 11 L.Ed.2d 440 (1964). But the court no doubt felt that the public policy which it was enunciating in Blonder-Tongue was sufficient to justify an all-embracing decision. Plaintiffs argue that the adverse decision by the federal court in Nebraska did not affect the entire patent but only certain of its claims. This argument is based primarily on that court’s judgment order, entered after the decision re- ported at 308 F.Supp. 501, which reads in part: “Claims 1, 2, 11, 14, 15, 16 and 20 of United States Patent No. 2,777,926 are invalid.” The court then dismissed the . Amended Complaint “with prejudice” and sustained the Amended Counterclaim “to the extent indicated.” The record in that case does not reveal whether the parties thereafter treated the patent as invalid, but the court’s published opinion makes clear that it found the entire pat- ent invalid. Among other things, the court’s decision says with respect to Patent No. 2,777,926: “... the 926 patent is held to be invalid.” 308 F.Supp. at 507. The pleadings in the Nebraska suit demonstrate that both the plaintiffs and the defendant were litigating the validity of the patent, not merely part of it. The Amended Complaint alleged that the patent was “duly and regularly issued” to the plaintiffs and that the defendant had been infringing it for six years. Plaintiffs sought an injunction, damages and attorneys fees “pursuant to the patent laws of the United States.” Defendant in its Amended Answer denied knowledge of whether the patent was duly and regu- larly issued and stated “Plaintiffs are left to their proofs.” Defendant also pleaded affirmative defenses and filed a counterclaim for declaratory judgment in which it alleged that the patent was invalid by reason of anticipation, obvi- ousness, and other grounds going to the entire patent. Nowhere in the pleadings are specific claims or partial invalidity alleged. A20 In the case at bar the Complaint and Answers likewise go to the validity of the entire patent, and no mention is made of specific claims. Plaintiffs now contend that they are relying herein on Claims Nos. 3, 4, 6, 7, 12, 19, 21 and 22, as well as the ones itemized by the Nebraska judgment order. Plaintiffs’ specification in the case at bar arises from their answers to interrogatories when the defendants inquired as to specific claims which their particular devices were allegedly infringing. Plaintiffs answered by listing most, if not all, of the 22 claims in their patent (Supple- mental Answer filed July 20, 1971), but they have never amended their complaint to allege that they were relying on the validity of those claims not specified by the Nebraska court. We conclude that the Nebraska judgment order is explained by the same procedures as explains this particular defense raised by the plaintiffs: the court was referring to the claims alleged to be infringed by a defend- ant’s product but had no intention of changing its decision of invalidity. Blonder-Tongue precludes us from relitigat- ing this decision. Even if Blonder-Tongue is potentially a bar to the entire complaint (as this court holds), plaintiffs seek to avail themselves of the exceptions left open to them by the Supreme Court’s decision, Plaintiffs argue that the Ne- braska court failed to grasp the issues of the controversy and in particular misapplied Graham yv. John Deere Co., 383 U.S. 1, 86 S.Ct. 684, 15 L.Ed.2d 545 (1966). The Su- preme Court cited this case as one example where a trial court might have completely failed to meet and decide the issues before it, therefore aborting estoppel. From an examination of the Nebraska court’s decision, however, it not only appears that the court cited and purported to follow Graham v. John Deere Co. (which is all the Supreme Court suggested it do), but also that the trial court did 0b Raga ONE OMAR AO RBENE Oe me “eine A21 grasp the issues and render a full and fair opinion on the merits. Any revision of that decision lay there or in the Court of Appeals, not here. Plaintiffs next argue that they lacked the requisite incen- tive to litigate to a finish in the Nebraska suit. They blame this partly on the allegedly myopic view of patents taken by the Eighth Circuit Court of Appeals as compared with the enlightened view of the Seventh Circuit. This court need not enter that debate because the Supreme Court itself discounts the argument: choice of forum militates against the plaintiffs wha made the choice, albeit without . realization that they would be universally bound by the result. As to plaintiffs’ alleged reliance on pre-Blonder- Tongue decisions when abandoning their appeal, that argu- ment is contrary to the holding of that controlling decision which abrogated the prior law. The subsequent proceedings in the Blonder-Tongue liti- gation are instructive, as reported in the University of Illinois Foundation v. Blonder-Tongue Laboratories, Inc., 334 F.Supp. 47 (N.D.IIl 1971), (pending in the Seventh Circuit Court of Appeals, No. 71-1829). Although Judge Hoffman in that case had initially upheld a patent which had been previously invalidated by an Iowa federal court, and although the Seventh Circuit had affirmed Judge Hoffman’s decision, upon remand he applied the Supreme Court’s decision and entered summary judgment for the defendant on the basis of the Iowa court’s prior judgment of invalidity. In doing so he rejected the argument that the second case involved different claims than the first one, considered the exceptions left open by the Supreme Court, and found them unsatisfied, as this court does in the case at bar. This result, incidentally, conformed to that reached by the Eighth Circuit Court of Appeals which had in the meantime affirmed the Iowa court. A22 Plaintiffs attach a number of affidavits to their brief to demonstrate a lack of crucial evidence and witnesses in the Nebraska litigation allegedly not due to the fault of the plaintiffs. What plaintiffs really argue is that the attorneys (and plaintiffs) in the Nebraska law suit did not uncover all of the existing evidence during the seven years that the suit was pending. Much of the information allegedly newly discovered from the defendants in this cause was a matter of public record or was otherwise known to plaintiffs, and most if not all of it was in existence and discoverable during the Nebraska litigation. If plaintiffs could demonstrate that the pending litigation was made possible by new facts or change of circumstances which did not exist at the time of the trial in 1969, their argument under this point might have merit. But as it is, the argument merely says that plaintiffs’ attorneys in the present suit believe they could do better by a second effort. To litigate this issue here would be a step backward toward trial by combat and is not what the Sup- reme Court intended. In the last analysis, the Supreme Court has told the federal judges to decide questions of collateral estoppel in patent cases on the basis of the trial court’s sense of justice and equity (402 U.S. 313, 91 S.Ct. at p. 1445). The justice in this matter is pre-empted by the Blonder-Tongue decision itself, together with the exceptions mentioned therein and this court’s determination that the decision is to be applied retrospectively. The equities in this matter militate heavily against the plaintiffs. They have had the benefit of their patent since 1957. They have filed several suits to enforce it, all of which were settled beneficially to the plaintiffs. They elected to file yet another suit in the Nebraska federal court. They left that suit pending for seven years in a jurisdiction which had no backlog. They had ample time for nationwide discovery and taking deposition testimony. They went to trial and lost on the merits after a full and fair wt inte sa CO PRTREY TF on be A23 hearing. They abandoned their appeal shortly before filing the case at bar in which they hoped, by a class action, to recover damages far in excess of the million dollars or so sought in Nebraska. They had enjoyed the benefits of a patent for almost thirteen years before their come-uppance. In the opinion of this court they had not been treated un- fairly by the law. It is therefore ordered, adjudged and decreed that defen- dant’s Motion for Summary Judgment is granted and judg- ment is entered on the Complaint in favor of the defendants. BOURNS, INC., a corporation, and Marlan E. Bourns, an individual, Plaintiffs, Vv. DALE ELECTRONICS INCORPORATED, a corporation, Defendant. Civ. No. 01432. United States District Court, D. Nebraska. Dee. 29, 1969. MEMORANDUM RICHARD E. ROBINSON, Chief Judge This matter was tried to the Court without a jury. The Court has been presented with testimony, documentary evidence, depositions and a series of briefs and is now ready to announce a decision, making the following findings of fact and conclusions of law. Jurisdiction is vested in this Court by virtue of 28 U.S.C.A. § 1338(a), plaintiff, Bourns, Inc., and Mr. Bourns individually being citizens of the State of California and AM defendant, Dale Electronics, Inc., being a citizen and having an established place of business in the State of Nebraska. Thisis an action for infringement of plaintiffs’ patents num- bered 2,777,926, 2,935,716, 2,953,763, 3,161,849 and 2,898,569. Defendant asserts by way of defense that the patents are invalid and non-infringed. It also defends by attempts to establish misuse, concealment during the formulation of military specifications and laches. Certain motions have been made since trial and should be disposed of prior to stating findings of fact and conclusions of law. Defendant filed a request for oral argument for the purpose of allowing the parties an opportunity to sum- marize their respective positions. Because this case has been thoroughly briefed by each side the Court saw no need for further argument and orally so notified the parties. For purposes of the record that motion is now overruled. Plaintiff has also filed two motions to reopen trial and to offer additional evidence. Plaintiff’s first motion relates to a pamphlet which plaintiff claims would state that teflon would be a material suited for use as a slider. Defendant states that should such case be reopened it would then have to attack the publication foundationally and then possibly present a countervailing opinion. The second motion relates to the admission into evidence of a letter which would be offered to show proof of the concept that compliance with military specifications does not require infringement. De- fendant again states a wish to attack foundationally as well as further reasons for cross-examination. Because, as will later appear in this opinion, the Court does not believe the material presented to be of such a controlling nature as would probably induce a different conclusion the motions will be overruled. Neither motion and the evidence which may be admitted would effect the decision as written and therefore no good purpose would be served by prolonging a matter in which a decision is long overdue. he is A25 It has also come to the Court’s attention that the entry into evidence of plaintiff’s exhibit 105 was not allowed after certain deletions were made. No objections were received after the deletions. For the record that exhibit should have been received and the record should now so indicate. Patent No. 2,777,926. Plaintiff relies upon claims 1, 2, 11, 14, 15, 16 and 20 of the 926 patent. Defendant’s primary thrust centers upon the validity of the ’926 patent. Defendant’s contention, among others, is that this patent is obvious. Non-obviousness is an element necessary for patentability under 35 U.S.C.A. § 103. The Court recognizes the presumption of validity as a result of allowance of the claims by the patent office and that the burden rests heavily upon the defendant to overcome that presumption in order to obtain a favorable decision. Su- perior Concrete Accessories, Inc. v. Richmond Screw An- chor Co., 246 F.Supp. 104 [W.D.Mo. 1965] aff’d 369 F.2d 353 [8th Cir. 1966]. However, this presumption will not stand in the face of compelling facts. “In such a case the court is not obliged to yield its judgment to a presumption which merely arises from the patent itself.” American Infra-Red Radiant Co. v. Lambert Industries, Inc., 360 F.2d 977 [8th Cir. 1966]. In determining the validity of the patent this Court must ascertain the essence and scope of the patent as stated in the above-mentioned claims. Once having determined its essence it is then necessary to estab- lish, among other elements, whether the patent, as defined, is obvious using the guidelines iaid down by the Supreme Court. Graham v. John Deere Co., 383 U.S. 1, 86 S.Ct. 684, 15 L.Ed.2d 545 [1966] and restated by the Eighth Circuit in National Connector Corp. v. Malco Mfg. Co., 392 F.2d 766 [8th Cir. 1968]. The basic instrument involved in this litigation is a lead- screw-adjusted potentiometer [LSAP] which has for its aN ibaa cilidinaseiaedeepantenientsictieesomecieareiaens A26 general purpose adjustments to tune a circuit to a desired result. The first question is then, what is the essence of the patent. A patent is limited to the invention described in the claims approved read in light of the specifications, Motion Picture Patents Co. v. Universal Film Mfg. Co., 243 U.S. 502, 37 S.Ct. 416, 61 L.Ed. 871 [1917]. The Eighth Circuit has further stated that: “[A] patent is not a mathematical measurement. It is a conception reached by consideration of the combined effect of the state of the art, the contributions as revealed in the language of the patent to one skilled in the art, and any limitations imposed and accepted during the progress of the application through the Patent Office.” General Motors Corp. v. Kesling, 164 F.2d 824, 832 [8th Cir. 1947]. It is helpful in order to fully understand the scope of the patent as well as its validity to state the factors which distinguish each claim from the others. Claims 1, 2, 14 and 15 all contain basic elements of a potentiometer. They all contain a housing member having two opposite, substan- tially flat sides, a resistance element, conductor [claim 1 only], a slider, a screw to move the slider with spring con- tact members on the slider and a means for making an external connection [Claims 1 and 2] through a side or end of the housing or an opening extending transversely through the housing to receive a mounting post. Claim 11 is similar to the above claims except that there is no housing stated and there is added “a pair of upstand- ing portions at opposite ends thereof.” It also contains a “means engaging said screw means to prevent longitudinal movement thereof while permitting rotation thereof”; also a “means restraining the slider against rotation.” Claim 20 has the basic elements found in 1, 2, 14, and 15 but adds to that, without mention of mounting holes, that pS EER IS me ee eee A27 the resistor is capable of being “adapted to be assembled in juxtaposition with other like resistors.” This description presumably explains the size, configuration and ability of the devices to be stacked or mounted easily either alongside or on top of each other. Claim 16, while also similar, includes language that the cover cooperated with the housing to form a conduit in one side of the housing. Throughout all except claims 16 and 20 reference is made, in addition to or in conjunction with what has been already stated, to the mounting holes or openings which generally extend transversely through said housing per- pendicular to the flat sides and is used to receive a mount- ing post in order to permit close and rapid assembly. Claims 1 and 2 are somewhat different in language in that there are holes both perpendicular and parallel to the flat side portions still having the same purpose of close and rapid assembly. Commencing with the history and progress of this appli- cation through the patent office as finally embodied in claims 1, 2, 11, 14, 15, 16 and 20, it provides some insight into the scope of the patent. Bourns initially submitted eighteen [18] claims all of which were rejected. The Patent Ex- aminer in so ruling relied primarily upon and cited patent number 2,357,433 [the Side Patent] stating that the Bourns 926 patent was unpatentable over the prior art. Of the original eighteen [18] claims Bourns amended two [origin- ally claims 2 and 3 and now claims 1 and 2]. These claims were amended to include mounting holes which were placed on adjoining sides to permit close and rapid assembly with other variable resistors. Also additional claim 22 [present claim 11] was submitted without any provision for mount- ing holes. Claims 2 and 3 were accepted [becoming claims 1 and 2] and original claim 22 was amended to include the A28 mounting holes. Also, new claims 29, 30, 31 and 38 which subsequently became 14, 15, 16 and 20 respectively were also submitted. Claims 29 and 30 included mounting holes but were different to the extent that not only was there an opening but that opening extended completely through the housing enabling the receipt of a mounting post. Original claims 22, 29 and 30 were accepted and became 11, 14 and 15. Claims 31 and 38 were rejected. Claim 31 [now claim 16] was then amended to include a housing and its cover which formed a conduit on one side of the housing. After the amendment that claim was also accepted. Claim 38 was also amended. It read closely upon the Anderson and Dietrich patents [see file wrapper of 926 patent] and after minor wording changes was also accepted. It originally contained functional language pertaining to the mounting holes. From a reading of the allowed claims and the history of the patent as it passed through the patent office it seems ap- parent that the mounting holes are the elements [excepting claim 16] of the patent which the Patent Examiner believed to be the essential feature which made the patent accept- able. The patent office cited the Side Patent as containing all of the elements of the Bourns ’926 patent until the amendment to include the mounting holes or a rearrange- ment of the parts to allow an opening extending completely through the housing. Whether the Patent Examiner be- lieved the mounting holes themselves to be unique or be- cause of the arrangement of the components of this specific device to allow room for the mounting holes it is not nec- essary to decide. This Court believes both interpretations require a decision rendering the patent invalid. Even if the history of the patent’s progress would not be sufficient to show that the essence was principally a rearrangement of components of a device, not in itself 2 anita eee j } 5 ; i : | H 5 ‘ ; i A29 patentable, which would allow for ease and flexibility in mounting, the statements of the inventor himself should further show beyond doubt that the device was not patent- able. An inventor’s own appraisal of what he considers to be the nature of a patent is of prime importance and is to be given great weight. Goodwin v. Borg-Warner, 157 F.2d 267, 269 [6th Cir. 1946]. See also Deller’s Walker on Pat- ents 2d ed., Vol 4, § 228 [Baker, Voorhis 1965]. The in- ventor, Mr. Bourns, stated during the course of the trial that, after returning from a business trip, where there were some objections to the means of mounting the device, ‘he caused the device’s components to be rearranged in order to allow for the mounting holes passing completely through the housing without altering the overall size. He further states, later in the record, that the essence of his invention and his contribution to the art was in “taking all these in- compatible parts and changing their size and proportion and bringing them together in a single embodiment” [Rec- ord pp. 138, 139]. A further remark should be made regarding the language of the patent claims and the history of the patent. Plaintiff has claimed that there are additional advantages or attrib- utes to the LSAP. He claims self-locking adjustment, im- munity from shock, and ease of adjustment combined with its miniaturization in order to conserve space. While these may be attributes they are not included in the claims. This situation is thus similar to that found in National Con- nector Corp. v. Maleo Mfg. Co., 392 F.2d 766, 769 [8th Cir. 1968] where the Court said that while such factors may be asserted to be attributes they are outside of the specific claims of the patent itself. The Circuit Court there stated that the scope of the patent must rest upon the claims as stated and accepted by the patent office. Even though it may have other inherent attributes, they are not within the A30 scope of the Patent. It should also be stated that Malco recognized that the use of “subtests”, such as are here con- cededly present [great commercial success and a need for such a device in the trade] are not persuasive “if prior art anticipates or otherwise makes obvious the attributes of the improvement involved”. National Connector Corp. v. Malco Oo., supra, at page 769. Once having discussed the language of the claims, and the evidence relating to the scope and essence of the patent as adduced from the history of its passage through the patent office, it now becomes necessary to pass to another area for consideration, namely, the state of the prior art at the time of the claimed invention. The evidence and facts below presented which relate to the prior art have been considered to determine if there is any reasonable construction which may be given to the patent claims which would allow the Court to declare it valid. The prior art is also considered to limit the scope of a patent if there are some grounds for declaring it valid. Defendant has presented numerous patents in addition to those cited by the patent examiner. In themselves the patents cited by the Examiner are persuasive as to what the limits of the 926 patent should be. However, with the limits defined, as deduced from the patent application, then defendant’s presentation of numerous additional patents, which read on the patent as defined and which have not been cited by the Patent Office, considerably weakens if not dissolves the presumption of validity. Bourns Model 115 CT. As testified by plaintiff’s witness, Mr. Hardison the Bourns 115 CT potentiometer was basically the same as the 926 patent [mounting holes excluded for the present] with the exception of the push-pull rod type of mechanism rather A31 than the leadscrew. This difference did provide, in the 926, greater measurement accuracy and resistance to vibration. However, even though plaintiff’s device shows greater ability to exact fine measurements and resistance to vibra- tion these are not factors contained in the claims and can- not therefore be considered as part of patent to be pro- tected. The Kiefaber Patent. This patent would seem to fill any gap in the state of the art because of the presence of the leadscrew rather than a push-pull rod. Mr. Hardison testified that the leadscrew in the Kiefaber patent had essentially the same purpose as the leadscrew in the 926 patent. In addition, this patent contained many of the elements contained in the 926 patent, namely, a base member, conductor, resistance element, screw means to prevent longitudinal movement, slider hav- ing threaded engagement with the screw, spring contact members on slider for wiping resistance element, means for restraining the slider against rotation and where the turn- ing of the screw causes spring contact members to travel over said resistance element and conductor. This patent then, with the exception of the mounting holes and possibly the size of the device, reads extremely close to the ’926 patent. Defendant has also entered in evidence the claims and characteristics of many other patents. The Thompson patent has similarities in that it has a housing resistance element, slider with spring contact members and a means for making external connections. This patent as well as those above cited and the many also presented bear a suffi- cient resemblance in purpose and design that there is no room in the art for any interpretation of the claims of the 926 to sustain its validity unless it may be found in the A32 reorganization of the components or in the mounting holes. The mounting holes would seem to be the only gap in the art where a nonobvious device could be held patentable. Now, regarding these mounting holes, defendant has shown that the Bourns 115 CT device has single holes which are made to receive mounting posts and screws which would secure the device to another instrument. These holes, however, as defined, do not allow for an opening extending transversely through the housing which would then be capable of receiving a mounting post. The labora- tory potentiometer entered as evidence to show similarity to the 926 has mounting holes which essentially amount to screwholes in the legs but this is a far cry from a hole passing entirely through the device and thus being capable of receiving mounting posts. The prior art here presented does not evidence that type of mounting hole passing en- tirely through the device. This is the case in some of the claims of the ’926 patent. Thus reviewing the limitations resulting from the amend- ments to applications made to the patent office after pre- vious rejections of claims, together with an interpretation of the language in the claims as stated by persons skilled in the art as they relate to the wealth of prior art in the field, it is clear that the 926 patent in order to be valid must be held to be specifically and narrowly defined and lim- ited by the claims. As stated, the evidence revealed readings on the prior art which were recognized by the patent exami- ner which resulted in their initial rejection. Subsequent amendment of claims, in order to escape rejection, as ear- lier outlined, then resulted in a limitation by amendment. See Deller’s Walker on Patents, 2d ed., Vol. 4 § 234 [Baker, Voorhis 1965]. The language of the claims reveals readings on the prior art in addition to that found by the patent examiner and if this patent is to be declared valid it must A33 be narrow, so narrow as to be limited by the later amend- ments and the state of the prior art. This Court believes that, by the limitations evidenced in prior rejections and the interpretation by experts of the language as it relates to the prior art, fortified by the statement of the inventor of what he believed the essence of the patent to be, the patent to be valid must rely upon its size or composition which allowed for rapid mounting with ease of adjustment and in some of the claims on ability of the device to be mounted in close proximity to others. The language of the claims which calls for a hole passing transversely through © the housing is related to size and composition. It is nothing more than a rearrangement to allow a pole to pass through. In itself it cannot be claimed that a hole for mounting with- out some other difficulty or definition is sufficient to rise to the dignity of a patent. The above remarks relate to all of the claims except 16 which is to be treated separately. Once having reached a conceptual rather than a mathe- matical formula type understanding of the nature of the patent, if we were to apply the test for obviousness as laid down by the Eighth Circuit in the Malco decision, assum- ing, as in that case, novelty and utility were established this patent could not be declared valid. The “scope and content of the prior art,” already indicated by the Thompson, i Kiefaber and Bell as well as others, prevents any broad ; construction. If the claims are given a limited and narrow construction as earlier stated which this Court believes to be the true construction plaintiff is precluded from relying upon a difference in configuration to allow mounting holes extending completely through the device or by stating the purpose of this configuration to allow rapid assembly or the devices to be placed in juxtaposition with each other. “Changes of mere form, proportions or size will not sustain patentability.” National Connector Corp. v. Maleo Mfg. Co., 392 F.2d 766 [8th Cir. 1967]; Gerner v. Moog Indus- tries, Inc., 383 F.2d 56 [8th Cir. 1967]. sallidsdestsccaace aaa A34 In regard to claim 16, it was continuously rejected by the patent office until the language of the claim was amended to include that a cover for the device cooperated with the housing to form a conduit in one side of the housing. Until this change the language is essentie!ly the same as that of the other claims less reference to mounting holes. In light of this history, this Court finds it hard to believe that the laying of wires in an open slot or their passing through a hole is such a unique design as to rise to the dignity of a patent. This writer would have to agree with the expert witness that the advantages of this aspect would be appar- ent to one skilled in the art of fabricating such devices. There is therefore no validity to claim 16 and the ’926 patent is held to be invalid. The 3,161,849 Patent. Originally plaintiff based its action upon claims 12, 15, 16 and 17 of the 849 patent. After trial plaintiff, in view of the trial testimony, concedes claims 15, 16 and 17 are not patentable after disclosure of the Bourns Patent #2,935,716. The only claim remaining therefore upon which to uphold the validity of the patent is claim 12. Defendant’s thrust at this claim of the patent also cen- ters on its invalidity. Defendant’s attack is fourfold. It claims obviousness in light of previous similar patents; prior use by virtue of testimony of a Mr. Elliot who allegedly manufactured and sold similar instruments prior to the conception of the ’849 patent; admissions of inva- lidity of claims 15, 16 and 17 should also be applied to claim 12, and finally laches. After a review of the evidence which shows the simi- larities between the ’849 patent and all of the prior patents and the devices allegedly manufactured and put into cirecu- lation prior to the ’849 patent, the validity of this patent ES EOS eee A35 hinges upon certain language in the Second Means of claim 12. It reads: “A terminal device comprised in said ter- minal means being constructed and arranged as a bearing to rotatably support the first end of said leadscrew and serving to conduct electrical current conducted by the lead- screw.” It is the plaintiff’s apparent claim that this is the factor which distinguishes his device from the prior art, that is, the performance of a double function of rotatable support and conducting electricity by the terminal means. Without an undue detailed statement of the evidence it is sufficient to state that the state of the prior art and the statements of individuals experienced in the field as to what would be obvious to someone knowledgeable in the field demonstrates striking similarities with the patent here claimed. The Semple and Kiefaber Patents, as explained by experts in the field together with designs and expert’s explanations of devices, conceptualized and reduced to writings and drawings prior to any conception of this pat- ent, compel the holding of the ’849 patent as invalid. There are Three Means which make up claim 12 but the First and Third Means contain nothing more than the standard elements of a leadscrew adjusted potentiometer and thus based upon findings as to this patent and the ’926 do not distinguish the devices there explained from the prior art. Discussion is therefore limited to the Second Means of claim 12. Defendant claims that when plaintiff declares claims 15, 16 and 17 to be invalid they then enter into the public do- main. Once they have entered it is his contention that nothing remains of claim 12 which is not contained in 15, 16 and 17 and is therefore invalid. The Court does not believe that this contention in itself is sufficient to render claim 12 invalid. A reading of the language of 15, 16 and 17 does not reveal the claim of a double function of the | A36 terminal device mentioned in claim 12. The Court does note however and as was noted by the Seventh Circuit Court of Appeals in Hoover Company v. Mitchell Manufacturing Company, 269 F.2d 795, 803 [1959] that “this is another ciroumstance which detracts from the contention relative to the meticulous care which was exercised in the Patent Office” and that therefore it will effect the presumption of validity. The next of defendant’s contentions relates to anticipa- tion as found in 35 U.S.C.A. § 102 [a]. Again it is apparent at the outset that there is a heavy burden upon the party attempting to establish prior use, FMC Corp. v. F. FE. Myers & Bro. Co., 384 F.2d 4, 10 [6th Cir, 1967]. In light of the publications with accompanying design charts and the testimony of the producer and other experts in the fleld the record is clear and the burden has been met. The claim of a prior use centers upon two potentiometers produced by a Mr. Elliot while associated with California based Wellan Corporation. Plaintiff admits conception and first drawing of its patent to be about February Ist, 1956, Defendant claims prior use during 1954 and 1955, The two potentiometers upon which this contention centers are de- scribed in the record as Exhibits A-78 and A-81. Plaintiff contends that while the drawings of the construction of A-78 device are sufficient to show the similarities of con- struction detail there is not sufficient evidence to meet the burden of proving prior manufacture and sale. The con- tentions regarding the A-81 device are just the opposite. Plaintiff does not contest ample evidence of prior use but contends that the evidence of construction similarity is not sufficient to meet the burden. The evidence relating to the construction of the A-81 de- sign centers upon freehand drawings by Mr. Elliot made from memory just prior to the trial. He also had available A387 detailed sketches of the A-78 design which contained basic similarities but to which were added certain improvements then embodied into the A-81, This Court determines that the testimony of Mr. Elliot and his memory sketches are sufficient to meet the burden of proving anticipation prior to the conception of the Bourns '849 patent. The evidence relating to the construction of the A-78 design is likewise suflicient. Both devices contain the basic potentiometer equipment, are sealed against humidity ete, have a “hot leadscrew” and have a terminal device which both rotatably supports the leadscrew and serves to conduct current from the leadsecrew. Regarding the prior use of these devices no question arises as to the A-81 as the plaintiff concedes, and the evidence amply supports, its prior use, Plaintiff con- tests, however, the prior use of the A-78. Mr. Elliot testi- fied that there were limited sales of the A-78 prior to the A-SI, he states that they were sold to at least four com- panies and that numerous samples were distributed. He states, with no evidence to the contrary, that it was the practice in the business to distribute some samples in order to generate interest in the product. Mr. Elliot further testified that he revealed the components and a description of the A-78 to a Mr. Butler prior to 1956. Mr. Butler testi- fied as to the time of a disclosure but could not specifically confirm or deny the exact potentiometer or its exact com- ponents other than that they were similar. The Court believes however that Mr, Elliot’s statements of prior sale and his statements regarding the disclosures to Butler con- firmed generally by Butler establish prior use even though records of sale were unable to be produced. Defendant has also claimed that the state of the art prior to th» ’849 patent establishes obviousness. As earlier stated the Kiefaber patent and the Semple patent, together with the testimony from Mr. Hardison relating to these patents and testimony from Mr. Carter as to what equipment or 4