Petition for Writ of Certiorari — Am. Home Products v. Lockwood MFG, Co.

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MICHAEL RODAK, JR CLERK

IN THE

Supreme Court of the Gnited States

OCTOBER TERM, 1973.

No. a 5 ra 8 2 5

AMERICAN HOME PRODUCTS CORPORATION,

Petitioner,

vs.

LOCKWOOD MANUFACTURING COMPANY,

Respondent.

PETITION FOR WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS

FOR THE SIXTH CIRCUIT.

GEORGE P. MCANDREws,

135 South LaSalle Street,

Chicago, Illinois 60603,

Attorney for Petitioner.

Of Counsel:

Timothy J. MALLoy,

VICTOR BELLINO,

ROBERT D. TEICHERT,

WILLIAM E. Goon,

ANDREW KAFKO.

Gunthorp-Warren Printing Company, Chicago @ 346-1717

CE PERT “ a

idl EO

INDEX.

PAGE

Citations to Opinions Below ....................... 1

RE Rand ee ee 2

Question Presented for Review ..................... 2

Constitutional Provision and Statutes Involved......... 3 :

eee 4 :

acetate cea Mls ae os ce x wae woo acoa Ce 11 :

Ee ee ee a ee 18 i

Appendix:

Opinion of the United States Court of Appeals for the :

ERIE ee a a a Al e

Opinion of the United States District Court for the f

Southern District of Ohio, Western Division...... All e

Opinion of the United States Court of Appeals for the

Seventh Circuit in Ekco Products Company v. Chi-

cago Metallic Manufacturing Company, 321 F. 2d

550 (7th Cir. 1963), cert. den., 375 U. S. 970

(1964); reh. den., 376 U. S. 929 (1964)....... A42

Opinion of the United States Court of Appeals for the

Seventh Circuit in Ekco Products Company v. Chi-

cago Metallic Manufacturing Company, 374 F. 2d

ER A53

Final Order of the District Court for the Northern '

District of Illinois terminating the Chicago Metallic

litigation (September 19, 1966) .............. A57

I ee i A58

NS YS

eee

TABLE OF CASES.

Anchor Stove v. Montgomery Ward & Co., 114 F. 2d 893

(Pte Cle. 198D) .. nc cc sccccccerccccccccscsess 13, 15

Avco Corp. v. Aero Lodge 735, 390 U. S. 557, 559 (1968) 10

Armstrong v. Motorola, Inc., 374 F. 2d 764 (7th Cir.

1967), cert. den. 389 U. S. 830, reh. den. 389 U. S.

ee ee eCekd sh keaNee FECES CREE LE ORES 9, 13,14

Baker Manufacturing Company v. Whitewater Manufac-

turing Company, 430 F. 2d 1008 (7th Cir. 1970), cert.

den. 401 U. S. 956 .....- eee ecc ec ec cecerecees 14, 15

Blonder-Tongue Laboratories, Inc. v. University of Illinois

Foundation, 402 U. S. 313, 91 S. Ct. 1434 (1971)....

sa ESLER SS al Oe are ee mace 2, 10, 11, 14, 17

Clair v. Kastar Inc., 148 F. 2d 644 (2d Cir. 1945), cert.

Pe: oe & - sereererrerr. freee 8, 10, 13, 17

Ekco Products Company v. Chicago Metallic Manufactur-

ing Company, 321 F. 2d 550 (7th Cir. 1963), cert. den.

375 U. S. 970 (1964), reh. den. 376 U. S. 929 (1964)

PRE Peer OO eee Tt ey eh ok eat 2, 6, 18

Ekco Products Company v. Chicago Metallic Manufactur-

ing Company, 347 F. 2d 453 (7th Cir. 1965). ..2, 6, 17, 18

General Electric v. Sciaky Bros., Inc., 187 F. Supp. 667,

675 (E. D. Mich. 1960) .....----ee secre eeeereee 13

Goldstein v. State of California, ........... Rae , 93S. Ct.

2303, 2316 (1973) ....- cece eee eccererercccces 19

France Mfg. Co. v. Jefferson Electric Co., 106 F. 2d 605

( (6 a: ) en een eee 13

Jenn-Air Corporation v. Penn Ventilator Co., Inc., 464

F. 2d 48 (3d Cir. 1972) .....-- sere eee reece 13, 16

iil

Kerotest Mfg. Co. v. C-O-Two Co., 342 U. S. at 185-186

ate ee te ae eee se ERAN Ne eee ae ne 12, 17

Maxon Premix Burner Company v. Eclipse Fuel Engineer-

ing Co., 471 F. 2d 308 (7th Cir. 1972)..-.----> 9, 13, 15

Montgomery Ward & Co. v. Clair, 123 F. 2d 878 (8th

ee NE ip cnk ha anee ese he eee eres Sa Re Ke 8, 13, 16

Northeastern National Bank v. United States, 387 U. S.

S60 SUF COIEE) .. «os oes nee cen nabsesstees tees 10

Plecker v. Poorman, 147 F. 528, 529 (C. C. S. D. Ohio,

NL say navn cook MeecaRD seer eseER Cys e 13

Remington Rand v. Acme Card System, 29 F. Supp. 192

CB. D. Gile W997) .~ 2 2 =e ee ee ceesvesereee® 13, 15

Sears, Roebuck & Co. v. Stiffel Company, 376 U. S. 225

COME Fo ue en as eee sv aa tee EN ORS SN RCEE SES 2, 10, 18

Triplett v. Lowell, 297 U. S. 638 (1936)....-- eee eres 11

United Brotherhood v. United States, 330 U. S. 395, 400

CE cc cacen bene ses canny ee eee tener se eee" 10

United States Mitis Co. v. Detroit Steel & Spring Co., 122

F. 863 (6th Cir. 1903) .....--ceereeccecrecreess 13

STATUTES.

U. S. Constitution, Art. I, Sec. 8, 1 8.--. +--+ seer reer 3

Title 35, United States Code § Oe. oka enaee saw ases 3

Title 35, United States Code § 271(a).-------++++000: 3

Title 35, United States Code § ad ee anes 3

Title 35, United States Code § 286.....-----eessrrres 4,13

Title 28, United States Code § 2201.....-----+++++5+> 2

IN THE

Supreme Court of the United States

OcTOBER TERM, 1973.

AMERICAN HOME PRODUCTS CORPORATION,

Petitioner,

vs.

LOCKWOOD MANUFACTURING COMPANY,

Respondent.

PETITION FOR WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS

FOR THE SIXTH CIRCUIT.

Petitioner prays that a writ of certiorari issue to review the

judgment of the United States Court of Appeals for the Sixth

Circuit, entered on August 28, 1973.

CITATIONS TO OPINIONS BELOW.

The District Court opinion is reported at ........ F. Supp.

__..., 173 U. S. P. Q. 486 (S. D. Ohio 1972). It is re-

printed in the Appendix hereto at pages All1-A41. The

opinion of the Court of Appeals is reported in .......... F, 2d

ee , 179 U. S. P. Q. 196 (6th Cir. 1973) and is reprinted

in the Appendix hereto at pages A1-A10.

CS ENS ARS LPT, OED

Werte

vias ad

Companion Cases.

The 1963 and 1965 opinions of the United States Court of

Appeals for the Seventh Circuit in the Ekco Products v. Chicago

Metallic Mfg. Co. litigation, upholding the validity of the

identical patents herein involved, and that are referred to and

are basic to the opinions below, are reprinted in the Appendix

hereto at pages A42-A-52 (321 F. 2d 550) and A53-A56

(347 F. 2d 453), respectively. The Final Order entered by

the District Court in the companion Seventh Circuit Chicago

Metallic litigation on September 29, 1966 is reprinted in the

Appendix hereto at page A57.

JURISDICTION.

The jurisdiction of this Court is invoked under 28 |e Se od

§ 1254(1).

QUESTION PRESENTED FOR REVIEW. -

In view of Congress’ and this Court’s expressed intent to

have “uniform federal standards” and “national uniformity in

patent . . . laws,” Sears v. Stiffel, 376 U. S. 225 (1964), and

the policy expressed in Blonder-Tongue v. University of Til.

Found., 402 U. S. 313 (1971), of limiting relitigation on patents

if once determined to be invalid, may the Sixth Circuit, contrary

to the position adopted by every other Circuit that has ruled on

the matter, refuse to recognize pending, ultimately successful,

litigation on the identical patents in another Circuit, substantially

coextensive in time with the asserted period of delay, as a bar

to the running of laches by retroactively imposing “notice”

requirements on the owner of the valid patents materially

different from, contrary to, and inconsistent with those required

by all other Circuits in identical situations?

CONSTITUTIONAL PROVISION AND

STATUTES INVOLVED.

U. &. Constitution, Art. 1, Sec. 8, 18

“The Congress shall have power. . . To promote the ;

progress of science and useful arts, by securing for limi-

ted times to authors and inventors the exclusive right to

their respective writings and discoveries. . . .

Title 35, United States Code § 154

§ 154. Contents and term of patent

Every patent shall contain a short title of the invention

and a grant to the patentee, his heirs or assigns, for the

term of seventeen years, subject to the payment of issue

fees as provided for in this title, of the right to exclude

others from making, using or selling the inventions through-

out the United States, referring to the specification for the

particulars thereof. A copy of the specification and draw-

ings shall be annexed to the patent and be a part thereof.

(Emphasis added.)

Title 35, United States Code § 271(a)

Except as otherwise provided in this title, whoever with-

out authority makes, uses or sells any patented invention,

within the United States during the term of the patent

therefor, infringes the patent. (Emphasis added.)

Title 35, United States Code § 284

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

for the use made of the invention by the infringer, to-

gether with interest and costs as fixed by the court.

When the damages are not found by a jury, the court

shall assess them. In either event the court may increase

the damages up to three times the amount found or as-

sessed.

The court may receive expert testimony as an aid to

the determination of damages or of what royalty would be

reasonable under the circumstances.

PSA YT RS pee:

“

bend

Sida teld

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Title 35, United States Code § 286

Except as otherwise provided by law, no recovery shall

be had for any infringement committed more than six

years prior to the filing of the complaint or counterclaim

for infringement in the action. (Emphasis added.)

Title 28, United States Code § 2201

Creation of remedy—In a case of actual controversy

within its jurisdiction except with respect to Federal taxes,

any court of the United States, upon the filing of an appro-

priate pleading, may declare the rights and other legal rela-

tions of any interested party seeking such declaration,

whether or not further relief is or could be sought. Any

such declaration shall have the force and effect of a final

judgment or decree and shall be reviewable as such.

STATEMENT OF THE CASE.

Summary of Statement.

This was a patent action under 28 U. S. C. § 1338(a) on

two patents previously held valid in the Seventh Circuit. Notice

of infringement was given to the Seventh Circuit defendant and

the Respondent at approximately the same time (1955-1956).

Negotiations for license broke down and Petitioner sued the

Seventh Circuit defendant in 1958. Litigation in the Seventh

Circuit continued until September 19, 1966, and Respondent

was aware of the litigation. This suit was filed against Re-

spondent in the Sixth Circuit on May 23, 1967. The patents

were found valid and deliberately infringed by Respondent, but

recovery was denied and the complaint dismissed for laches be-

cause, as the Sixth Circuit ruled, Petitioner “never asserted to

[Respondent] that it intended to file similar litigation against

it at the conclusion of the Chicago Metallic [Seventh Circuit]

litigation.” (App. p. A7.)

Petitioner relied, and herein relies, on the rule of law uni-

versally followed by the other Circuits that have ruled on the

Lae eal ee aad

matter (Second, Third, Seventh and Eighth), that “a suit pend-

ing to sustain the validity of a patent is notice to all infringers

of the insistence of the patentee upon his claimed rights,” and

that Respondent should have brought “an action for a declara-

tory judgment” if it had any doubts about its position during

the litigation in the Seventh Circuit.

Statement.

Petitioner's (American Home Products Corporation) prede-

cessor, Ekco Products Company (hereinafter AHPC and Ekco,

respectively), obtained a process patent for a method of pre-

darkening tin plate (No. 2,687,994) and a product patent for

the result of a particular use of the process to make a specifically

structured baking pan (No. 2,724,526). The process patent

issued on August 31, 1954 and the product patent on November

22, 1955.

Oral and written notices of infringement were immediately

given to Respondent, Lockwood Manufacturing Company (here-

inafter Lockwood) and to Chicago Metallic Mfg. Co. (here-

inafter Chicago Metallic)—both major competitors of Peti-

tioner (DX 42; R. 864, 897)—and both using substantially

identical processes to make very similar products. Negotiations

for licenses ensued with both competitors.

On October 24, 1956, Lockwood’s counsel wrote his client

regarding his meetings with Ekco:

“I reminded them that one thing Lockwood certainly

would insist on and that would be that Ekco Company

police the industry so that Lockwood would not be in a

position of paying royalties while others were going off

scot-free.” (DX 45, p. 3, R. 868, 897.)

On June 10, 1957, Lockwood's counsel informed Lockwood

that Lockwood infringed Ekco’s patent “if valid.” (DX 52, p. 1,

R. 873, 897.)

Negotiations for licenses broke down. Both Lockwood and

Chicago Metallic rejected Ekco’s charges of infringement.

On July 10, 1957, Ekco replied to Lockwood:

“We have received your letter of June 11, 1957 re-

garding our proposed license agreement relating to the

process of forming a heat absorptive oxide coating on tin

plated bake pans.

“Since your letter raises a legal question, I have re-

ferred this matter to our attorneys and have asked them for

their opinion regarding the position you have taken.”

(DX 54, R. 897.)

The Court found this to be the end of communications be-

tween Ekco and Lockwood until the instant suit was filed in

1967 (App. p. A3).’

Suit was instituted against Chicago Metallic within the Seventh

Circuit in May of 1958. The litigation was both extensive and

costly. The history of this related litigation is set out in the

Appendix hereto in Ekco Products Company v. Chicago Metal-

lic Manufacturing Company, 321 F. 2d 550 (7th Cir. 1963),

(App. pp. A42-A52), cert. den., 375 U. S. 970 (1964), reh.

den., 376 U. S. 929 (1964); and Ekco Products Company V.

Chicago Metallic Mfg. Co., 347 F. 2d 453 (7th Cir. 1965)

(App. pp. A53-A56).

In March of 1962, the Chicago District Court held that the

Ekco patents were invalid. In August of 1963, the Seventh Cir-

cuit reversed this judgment, holding the process patent valid.

321 F. 2d 550 (App. p. A52), cert. den., 375 U. S. 970

(1964), and remanded the case, stating:

“The findings concerning the three derivative patents

(including the product patent) . . . are extremely limited.

The judgment of the District Court respecting these three

derivative patents is reversed, and that portion of this case

is remanded for further consideration in the light of our

comments above.” (App. p. A52.) (Material in paren-

> There was rejected testimony that Ekco had orally informed

Lockwood “that we are not going to get involved with Lockwood

until we finish Chicago Metallic . . .” (Record p. 924.)

Upon remand, the District Court found the product patent

valid and infringed while the parties submitted the process patent

to a Master for an accounting. Chicago Metallic appealed the

District Court’s decision on the product patent and on June 17,

1965, the Seventh Circuit rendered another opinion “on the

legal scope of the claims in Patent ‘526’ ”°—the product patent

(App. p. A54). The Court specifically observed that “No

judgment was rendered in this Court with reference to the merits

of the [product patent]” in its 1963 opinion (App. p. A54).

The Seventh Circuit, in its June 17, 1965 opinion, ruled that

Chicago Metallic did not then infringe the product patent as

construed by it (App. p. A54).

During this time, the accounting before the Master on the

process patent had continued between Ekco and Chicago Metal-

lic, and it was terminated on September 19, 1966 by entry of a

Final Order in the United States District Court for the Northern

District of Illinois (App. p. A57).-

The instant suit was commenced on May 23, 1967, eight

months after termination of the Chicago Metallic litigation.

Lockwood closely followed the progess of the Chicago Metallic

litigation and received periodic reports thereon from its counsel

(DX 56, 57, 58, 59, 60; R. pp. 874-879, 897).

The Sixth Circuit herein, as did the Seventh Circuit, found

both of Ekco’s patents valid. Lockwood did not appeal the

District Court's finding that it infringed both patents and that

“following the introduction of Ekco’s ‘Bake-Prep’ process,

Lockwood immediately set out to copy, did everything it

could to copy, and after a great deal of time and a great

deal of effort, succeeded in doing it. The copying was will-

ful and deliberate.” (F. F. 71.)

The District Court, citing non-analogous law, held that, in

the litigation below, Petitioner had won every battle but the war

which it must lose because of laches (App. Pp. A41). It refused

to recognize the Chicago Metallic litigation as a bar to the

running of laches.

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On appeal, the Sixth Circuit acknowledged that Lockwood

had had full information regarding the pendency of the Chicago

Metallic litigation on the same patents, corrected some of the

District Court’s reasoning, but added a “notice” provision, retro-

actively binding on Petitioner, which differs from and is incon-

sistent with that applied by every other Circuit that has ever

treated the matter of existing litigation on the same patent(s)

during substantially the entire period of alleged delay as a bar

to the running of laches as against other infringers. The reason-

ing and ruling of the Sixth Circuit, which is contrary to that ap-

plied by the other Circuits, may best be summarized by the

following illustration wherein all parties-defendants had knowl-

edge of the other pending litigation on the identical patents

during the asserted period of delay:

Sixth Circuit. Eighth Circuit.

. (Montgomery Ward & Co. V.

___ instant Suit) Clair, 123 F. 2d 878 (8th Cir.

“First of all, we reject Ekco’s 1941) (delay of ten years after

suggestion that the existence of knowledge of infringement).

other litigation automatically — — ‘

excuses any delay in bringing “During the period of delay

suit against the second alleged [ten years] the record discloses

infringer.” (App. A4.) that the appellants were litigat-

mee ing in the courts the validity of

we b both the Dyer and the Camp-

This is not to imply that the pel] patents until within two

other litigation rule is appli-

cable only by agreement be-

tween the parties; clearly it is

not . . . But if Ekco had in-

tended to press its claim after

the Chicago litigation, it surely

would have (or should have)

found time to send Lockwood

a simple letter to that effect.”

(App. p. AS.) (Emphasis

added. )

* x *

aS cei pee GOEL ATE ION DELL SOIREE GENE ES ELLIE. LIE MEG

months of the commencing of

the present suits and that [de-

fendant] had knowledge of that

fact. An inventor is not re-

quired to litigate the validity of

his patent against every pos-

sible infringer. A suit pending

to sustain the validity of a

patent is notice to all infringers

of the insistence of the patentee

upon his claimed rights.” (Id.

at p. 883.) (Emphasis added. )

(Material in brackets sup-

plied.)

“Although multiple litigation

need not be maintained against

multiple infringers, we see no

reason why a patent owner need

not at least assert to the other

infringers its intention to bring

a subsequent action at the ter-

mination of the presently pend-

ing action.” (App. p. A6.)

(Emphasis added. )

* * *

“However, the knowledge [by

Lockwood] of the other litiga-

tion [Ekco v. Chicago Metallic]

is not the important factor; the

point is that Ekco never as-

serted to Lockwood that it in-

tended to file similar litigation

against it at the conclusion of

the Chicago litigation.” (App.

p. A7.) (Emphasis added.)

Second Circuit.

(Judge Learned Hand applied

the Eighth Circuit Clair ruling

in Clair v. Kastar, Inc., 148 F.

2d 644 (2d Cir. 1945) (the

party Clair was the same in

both cases).

“While a patentee is getting his

patent sustained he is not bound

to assert his claims to their

fullest scope by suing every

conceivable infringer. There

is today some reciprocity of

duty in this regard; if a manu-

facturer fears that he will be

charged to infringe, he can al-

ways inquire of the patentee,

and if the answer is unsatis-

factory, he can bring an action

for a declaratory judgment

The time has now passed when

a patentee may sit by and re-

fuse to show his hand. The de-

fendant’s putative uncertainties

seem to us to have been of its

own making.” Id. at p. 646.)

(Emphasis added. )

The Seventh Circuit, wherein Ekco has its principal offices

and manufacturing facilities, follows to the letter the reasoning

of the Eighth and Second Circuits. See Armstrong V. Motorola,

Inc., 374 F. 2d 764, 769 (7th Cir. 1967), cert. den. 389 U. S.

830 (1967); and Maxon Premix Burner Company, Inc. V.

Eclipse Fuel Engineering Co., Inc., 471 F. 2d 308 (7th Cir.

1972).

The Sixth Circuit in the instant suit has very clearly turned

the reasoning of the Second, Seventh and Eighth Circuits around.

The Sixth Circuit has refused to hold that the other litigation

Ls PEP LEA IIRL ISAS LARGE

on the same patents itself was notice to the world of Ekco’s

insistence on its rights, giving rise to Declaratory Judgment rights

on the part of Lockwood.”

As will be shown in the argument below, the Sixth Circuit

failed to apply the clear exposition of the “simultaneous litiga-

tion on the same patent(s) during substantially the entire period

of delay” rule of all the other Circuits that have considered the

subject, including the Second, Third, Seventh and Eighth, but

instead cited and applied non-analogous law involving (1)

laches generally, (2) non-patent, other litigation situations, or

(3) delay due to other litigation on patents other than the one

in suit situations.? The Sixth Circuit failed to understand the

fundamental “difference in kind” presented by the “simultaneous

litigation on the same patents” precedents. This misappre-

hension materially undermines the objective of “national

uniformity in patent” laws and administration suggested by this

Court in Sears v. Stiffel, 376 U. S. 225, 230 (1964) and carried

forward in Blonder Tongue v. University of Illinois F ound., 402

U. S. 313, 91 S. Ct. 1434 (1971).

The decision below rewards a deliberate wrongdoer at the

expense of the owner of two court tested patents. Such a result

materially diminishes the already blighted incentive to invention

that forms the basis for our constitutionally authorized and con-

gressionally instituted patent system.

This Court must bring the Sixth Circuit into consonance with

the Second, Third, Seventh and Eighth Circuits in this very

important area affecting federal law or authoritatively announce

the rule that is to govern all Circuits in the future. Avco Corp.

v. Aero Lodge 735, 390 U. S. 557, 559 (1968); Northeastern

National Bank v. United States, 387 U. S. 213, 217 (1967);

United Brotherhood v. United States, 330 U. S. 395, 400

(1947). Correction of the Sixth Circuit’s decision is essential if

owners of valuable patents are not to be substantially punished

we Ral a sColeand esa red sw

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2. See L. Hand in Clair v. Kastar, Inc., quoted supra, p. 9.

3. The misapplication of precedent by a Court of Appeals was

noted in Sears v. Stiffel, 376 U. S. 225, 227 (fn. 2) (1964).

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for having followed, over the past fifteen years, law consistently

and uniformly applied by all other Circuits that have treated

the issue.

ARGUMENT.

This case involves a clear cut conflict between the Circuits

in an area of vital importance to uniform administration of

the patent laws throughout the United States and to the elimina-

tion of unnecessary repetitive litigation in various district courts

until after the validity, invalidity, royalty parameters or scope

of a patent or patents has been judicially determined.

In Blonder Tongue Lab., Inc. v. University of Illinois Found.,

402 U. S. 313 (1971), this Court reviewed the heavy weight in

court time and litigant’s money expended in multiple suits on

patents once held invalid. The Court overruled Triplett v.

Lowell, 297 U. S. 638 (1936) to allow defendants to plead

estoppel in patent infringement cases where the patent has once

been declared invalid. The rationale for the decision in Blonder

Tongue was compelling, e.g.

“An examination of the economic consequences of con-

tinued adherence to Triplett has two branches. Both, how-

ever, begin with the acknowledged fact that patent litiga-

tion is a very costly process. Judge Frank observed in

1942 that ‘the expense of defending a patent suit is often

staggering to the small businessman.’ Picard v. United

Aircraft Corp., 128 F. 2d 632, 641 (CA 2 1942) (con-

curring opinion). In Lear, Inc. v. Adkins, 395 U. S. 653,

669, 89 S. Ct. 1902, 1910, 23 L. Ed. 2d 610 (1969), we

noted that one of the benefits accruing to a businessman

accepting a license from a patentee who was threatening

him with a suit was avoiding ‘the necessity of defending

an expensive infringement action during the period when he

may be least able to afford one.’ Similarly, in replying to

claims by alleged infringers that they have been guilty of

laches in suing on their patents, patentees have claimed

that the expenses of litigating forced them to postpone bring-

ing legal action. See, e.g., Baker Mfg. Co. v. Whitewater

Mfg. Co., 430 F. 2d 1008, 1014-1015 (CA 7 1970). In

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recent congressional hearings on revision of the patent laws,

a lawyer-businessman discussing a proposal of the American

Society of Inventors for government-sponsored insurance

to provide funds for litigation to individual inventors hold-

ing nonassigned patents stated: ‘We are advised that the

average cost of litigating a patent is about $50,000.’ ” (Id.

at 334-335.)

* * * * *

In testimony before the Senate subcommittee consider-

ing patent law revision in 1967, a member of the President’s

Commission on the Patent System discussed the financial

burden looming before one charged as a defendant in a

complex infringement action in terms of amounts that some-

times run to “hundreds of thousands of dollars.” (Jd. at

pp. 335-336.)

* * * *

The Commission stressed the competitive disadvantage

imposed on an alleged infringer who is unable or unwilling

to defend a suit on the patent, stating also that a ‘patentee,

having been afforded the opportunity to exhaust his remedy

of appeal from a holding of invalidity, has had his ‘day

in court’ and should not be allowed to harass others on

the basis of an invalid claim. There are few, if any, logical

grounds for permitting him to clutter crowded court dockets

and to subject others to costly litigation.’ (/d. at 339-

340.)

The Blonder Tongue Court re-emphasized the right of an

accused infringer to utilize the Declaratory Judgment Act to

challenge the validity of a patent or to remove an infringement

cloud on his operations:

A second group of authorities encourage authoritative

testing of patent validity. In 1952, the Court indicated

that a manufacturer of a device need not await the filing

of an infringement action in order to test the validity of

a competitor’s patent, but may institute his own suit

under the Declaratory Judgment Act. Kerotest Mfg. Co.

v. C-O-Two Co., 342 U. S., at 185-186, 72 S. Ct. at

222. Other decisions of this type involved removal of

restrictions on those who would challenge the validity of

patents.” (Id. at 344-345.)

While the Blonder-Tongue decision directly involved removal

of the mutuality of estoppel requirement when a patent was

once determined to be invalid, the economic and court conges-

tion arguments concerning simultaneous patent litigation against

numerous alleged infringers are equally pertinent until the

validity of a patent or patents has been determined and the

royalty for their tortious misuse determined.

Until the instant decision, the Courts (including those in the

Sixth Circuit) have always stayed the running of laches

during the pendency of other litigation on the identical

patent or patents. This has evolved as a rule of law peculiar

to patents and growing out of the unique nature of patents

and their impact on our national economy. See: Armstrong V.

Motorola, Inc., 374 F. 2d 764 (7th Cir. 1967); Maxon Premix

Burner Company, Inc. v. Eclipse Fuel Engineering Co., 471

F. 2d 308 (7th Cir. 1972); France Mfg. Co. v. Jefferson Elec-

tric Co., 106 F. 2d 605 (6th Cir. 1939), cert. den. 309 U. S.

657; reh. den. 309 U. S. 696; United States Mitis Co. V. De-

troit Steel & Spring Co., 122 F. 863 (6th Cir. 1903); General

Electric Company Vv. Sciaky Bros., Inc., 187 F. Supp. 667, 675

(E. D. Mich. 1960), aff'd other gds., 304 F. 2d 724 (6th Cir.

1962); Plecker v. Poorman, 147 F. 528, 529 (C. C. S. D.

Ohio, 1905); Jenn-Air Corporation Vv. Penn Ventilator Co.,

Inc., 464 F. 2d 48 (3d Cir. 1972); Clair v. Kastar, Inc., 148

F. 2d 644 (2d Cir. 1945), cert. den. 326 U. S. 762; and

Montgomery Ward & Co. V. Clair, 123 F. 2d 878, 883 (8th

Cir. 1941).

The rule with respect to patents which have been timely liti-

gated against one of several infringers is not and has never been

applicable in unfair competition actions (Anchor Stove & Range

Co. v. Montgomery Ward & Co., 114 F. 2d 893 (7th Cir. 1940)

(App. p. A5) nor to situations wherein there were in excess

of nine years of total inactivity on the patents,* between the

time infringement was first charged and the time the “other

litigation” on the patents commenced. Remington Rand Vv.

4. Far in excess of the applicable statute of limitations 35

U. S. C. § 286, supra, p. 4.

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Acme Card System, 29 F. Supp. 192 (S. D. Ohio 1937) (App.

p. A4). Finally, the rule was not even discussed in Baker v.

Whitewater, 430 F. 2d 1008 (7th Cir. 1970), referred to in

Blonder Tongue, supra p. 11, and stressed by the Sixth Cir-

cuit (App. p. A5). The patent in issue in Baker had never

been litigated against anyone at any time. The defense to

laches asserted was the expense of other litigation on a com-

pletely different patent. The fundamental rationale of having

a judicial reading on the patent(s) in suit was never, at any time,

present in the Baker v. Whitewater suit.

Although not mentioned by the Sixth Circuit in discussing

the Baker case, the Seventh Circuit itself has clearly distin-

guished the other litigation on other patents situation in Baker

from other litigation on identical patents situations. Baker was

decided by the Seventh Circuit in 1970. Prior thereto, in 1967,

the Seventh Circuit, in Armstrong v. Motorola, Inc., 374 F. 2d

164 (7th Cir. 1967), cert. den. 389 U. S. 830; reh. den. 389

U. S. 997, adopted the universally recognized rule from the

Eighth and Second Circuits:

“Moreover, Armstrong’s 1948 suit against RCA justified

Armstrong's refraining from suing Motorola simultaneous-

ly. As stated in Montgomery Ward & Co. v. Clair, 123

F. 2d 878, 888 (8th Cir. 1941):

An inventor is not required to litigate the validity

of his patent against every possible infringer. A suit

pending to sustain the validity of a patent is notice

to all infringers of the insistence of the patentee upon

his claimed rights.

Judge Learned Hand enunciated this same proposition in

Clair v. Kastar, Inc., 148 F. 2d 644, 646 (2nd Cir.

1945), certiorari denied, 326 U. S. 762, 66 S. Ct. 143,

90 L. Ed. 459, where he also pointed out that the “in-

fringer” should have brought an action for a declaratory

judgment. Here too Major Armstrong’s and his lawyer's

1941 correspondence with Motorola was sufficiently

threatening to give Motorola standing to seek a judgment

of non-infringement. Cf. Sticker Industrial Supply Corp.

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pomp oer

y. Blaw-Knox Co., 367 F. 2d 744 (7th Cir. 1966).”

[374 F. 2d at 769-770.] (Emphasis’ added. )

In 1972, following the completely non-analogous Baker de-

cision of 1970, the Seventh Circuit held firm in following the

universally accepted rule governing simultaneous litigation on

the same patents. In Maxon Premix Burner Company, Inc. V.

Eclipse Fuel Engineering Co., Inc., 471 F. 2d 308 (7th Cir.

1972), the Court said:

“This court held in Armstrong vy. Motorola, Inc., 374

F. 2d 764, 769 (7th Cir.), cert. denied, 389 U. S. 830

(1967), rehearing denied, 389 U. S. 997, that ‘[a] suit

pending to sustain the validity of a patent is notice to all

infringers of the insistence of the patentee upon his claimed

rights.’ Here, Eclipse had full notice that Maxon intended

to enforce its patent rights by reason of Maxon’s earlier

infringement action against Eclipse. Maxon was sub-

sequently involved in litigation to enforce its burner patent

against Mid-Continent Metal Products Company. This

suit was not concluded until September 22, 1967. See

Maxon Premix Burner Co. v. Mid-Continent Metal Prod-

ucts Co., 279 F. Supp. 164 (N. D. Ill. 1967). Maxon

gave Eclipse formal notice of infringement one month

later, on October 12, 1967. If Eclipse had any doubt as

to Maxon’s intentions and the effects of future Maxon

actions on its own interests, the proper course of action

would have been an action for declaratory judgment

against Maxon. Sufficient notice having been given

Eclipse, it can not now complain of the action filed against

it.” (417 F. 2d at 313.) (Emphasis added. )

The Seventh Circuit had no need to apply Baker because

Baker was inapplicable—there was no other litigation on the

same patents in Baker.

Consequently, the Sixth Circuit’s reliance on the completely

non-analogous cases of Baker v. Whitewater, Anchor Stove Vv.

Montgomery Ward, and Remington Rand v. Acme Card (App.

pp. A4-A5), is wrong as a matter of law. The misreliance

destroys a principle of law clearly and distinctly enunciated by all

of the other Circuits that have ruled on the issue.

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Finally, the Third Circuit in 1972 adopted the universally

recognized rule governing simultaneous litigation on the same

patents during substantially the full alleged period of delay.

In Jenn-Air Corporation v. Penn Ventilator Co., Inc., 464 F. 2d

48 (3d Cir. 1972), the Court said:

“There can be no mistake about the above governing

law on this question. The delay must be prejudicial to the

defendant. The fact which defendant wholly overlooks is

that plaintiff was protecting its 607 patent in a suit against

another infringer from November, 1963 to April 18, 1966.

Plaintiff in December, 1967 applied to bring its °607

patent into this litigation. Under these facts, it is sound

law as plaintiff urges that it is not necessarily bound to

take on more than one infringer at a time. As we have

seen, plaintiff was busy with its action against another in-

fringer from 1963 to April 18, 1966. In December, 1967

it did proceed against defendant. Again, as stated by plain-

tiff, there is no delay of nine years or even four years by

plaintiff sleeping on its rights.” (/d. at pp. 49-50.)

Clearly, the Sixth Circuit decision is erroneously premised

on non-analogous law. Moreover, the decision for which review

is sought, places the Sixth Circuit at loggerheads with the de-

cisions of the courts in the Second, Third, Seventh and Eighth

Circuits. The conflict is clearly pointed up by the inter-circuit

activity of Petitioner herein and of most patent owners.

In 1957 and 1958, when Petitioner's predecessor responded

to Lockwood’s denial of infringement by suing Chicago Metallic,

the law was clear:

“A suit pending to sustain the validity of a patent is

notice to all infringers of the insistence of the patentee

upon his claimed rights.” Montgomery Ward & Co. V.

Clair, 123 F. 2d 878 (8th Cir. 1941).

Legally sufficient notice having been given to Lockwood,

Petitioner thereafter focused its attention on successfully con-

cluding its litigation with Chicago Metallic to determine if its

two patents were valid, their scope, and the royalty parameters

WS ORRG RAR APA NEDO iy 8 ERS SLE PGSN NEG CEL IH LTE HOLL ID NEAL I IEG OIE ONLY PAN

for licensing them. Had Lockwood any problem with the 1956

unwithdrawn notice of infringement and the 1958 “notice” deriv-

ing from the Chicago Metallic suit, the law gave it a perfect

remedy:

“While a patentee is getting his patent sustained he is

not bound to assert his claims to their fullest scope by

suing every conceivable infringer. There is today some

reciprocity of duty in this regard; if a manufacturer fears

that he will be charged to infringe, he can always inquire

of the patentee, and if the answer is unsatisfactory, he can

bring an action for a declaratory judgment.” Judge

Learned Hand in Clair v. Kastar, Inc., 148 F. 2d 644, 646

(2d Cir. 1945), cert. den. 326 U. S. 762.

See also Blonder Tongue Lab., Inc. v. University of Illinois

Found., 402 U. S. 313, 344-345 (1971), and Kerotest Mfg.

Co. v. C-O-Two Co., 342 U. S. at 185-186.

The record is clear that Lockwood chose not to file a Declara-

tory Judgment action and to do nothing. It closely followed

the Chicago Metallic litigation, and continued to reap the bene-

fits of its willful and deliberate infringement. (FF 71.) The

reason it did nothing is obvious. Chicago Metallic had the

burden, risk and expense of successful or unsuccessful litigation

on the patents, and Lockwood's attorney had informed it that

Lockwood infringed “if valid”. (DX 52, R. 873, 897.)

The Sixth Circuit concluded that “the parties are not in

agreement as to the holding of the [1963 Seventh Circuit] case

concerning the °526 product patent.” (App. p. A3.) The

District Court held “with some trepidation” (App. p. A16)

that the 1963 opinion of the Seventh Circuit determined the

validity of the product patent. Both courts ignored the obvious.

The Seventh Circuit itself, in its second opinion in the Chicago

Metallic case rendered June 17, 1965, stated:

“No judgment was rendered in this Court [in 1963]

with reference to the merits of the three derivative [product]

patents.” (App. p. A54.) (Material in brackets supplied. )

A Rae eee elecae me ae NT eT TN

Even the principal “damage” or laches detriment” suffered by

Respondent and discussed by the Sixth Circuit (App. p. A7)

occurred on February 25, 1965, some four months before the

June 17, 1965 opinion of the Seventh Circuit on the product

patent and some fourteen months prior to the Final Order in

the Chicago Metallic case.

The opinions of the Seventh Circuit appended hereto (App.

pp. A42-52 and 53-56) and the District Court Order (App. p.

57) clearly show that Petitioner was consistently engaged in

litigation on the validity, scope and royalty parameters (see 35

U. S. C. § 284) of its patents until September 19, 1966. This

suit was filed in May of 1967—some eight months later. In this

there was no laches delay as a matter of law.

CONCLUSION.

The rule of law here involved relates exclusively to patent

cases wherein a patent owner is excused from bring suit, and

laches is tolled, by the existence of other litigation on the same

patents during substantially the entire period of delay.

In Sears v. Stiffel, 376 U. S. 225, at 230-231 (1964), this

Court stated:

“Thus the patent system is one in which uniform federal

standards are carefully used to promote invention while

at the same time preserving free competition.’

7. The purpose of Congress to have national uniform-

ity in patent and copyright laws can be inferred from such

statutes as that which vests exclusive jurisdiction to hear

patent and copyright cases in federal courts, 28 U. S. C.

§ 1338(a), and that section of the Copyright Act which

expressly saves state protection of unpublished writings but

does not include published writings, 17 U. S.C. § 2.”

The Sears admonition for a uniform national policy on patents

and copyrights was restricted to patents in the recent decision

5. A sale of assets.

of this Court in Goldstein v. State of California, —. U. S.

presen , 93 S. Ct. 2303, 2316 (1973).

Fair and expeditious administration of congested court dock-

ets burdened with patent matters; conservation of judicial

time and litigant’s money, and continuity, uniformity and pre-

dictability of the law argue for the laches tolling rule covering

other pending litigation on the same patents as long established

and followed in the Second, Third, Seventh and Eighth Circuits.

The novel and inconsistent decision of the Sixth Circuit based

on the misapplication of non-analogous law should be reversed.

The issue is important to all patent litigants and to the courts:

(a) As vividly demonstrated by the Eighth and Second

Circuits’ Clair decisions, the Third Circuit’s Jenn-Air deci-

sion, and the instant Sixth Circuit case, patent litigation

frequently consumes eight, ten or even twelve years or

more.

(b) The issue of laches is commonly raised by second-

party infringers sued after a prior determination of validity.

There have been four Circuit Court of Appeals decisions

on the issue since 1967 and three since 1972—all follow-

ing the traditional rule on notice except the Sixth Circuit

in the instant case.

and the predictability of common law in the past many

years and who have not sent formal, written notices (as

now required by the Sixth Circuit) to other infringers in

addition to the notice to other infringers resulting from the

other litigation on the same patents, as held sufficient by

all other Circuits that have treated the matter, will now

have to face laches defenses from willful, deliberate wrong-

doers. The patent owners will be punished, as is Petitioner.

for having followed established precedent and public policy

in not instituting multiple suits against various infringers

until after receiving a court reading on the validity, scope,

and royalty parameters of their patents.

Ps” eT .— s

It is respectfully requested that a Writ of Certiorari issue to

review the judgment of the United States Court of Appeals for

the Sixth Circuit.

Respectfully submitted,

GeorGE P. MCANDREws,

135 South LaSalle Street,

Chicago, Illinois 60603,

Attorney for Petitioner.

Of Counsel:

Timotny J. MALLOoy,

Victor BELLINO,

RosBerT D. TEICHERT,

WILLIAM E. Goon,

ANDREW KAFKO.

APPENDIX.

Nos. 72-2202 and 72-2203

UNITED STATES COURT OF APPEALS

For the Sixth Circuit

AMERICAN HOME PRODUCTS CorP.,

Plaintiff-A ppellant-

Cross-A ppellee,

vs.

Appeal from the

United States Dis-

trict Court for the

Southern District of

Lockwoop MANUFACTURING Co., .

Ohio.

Defendant-A ppellee-

Cross-A ppellant. }

Decided and Filed August 28, 1973.

Before: Epwarps, Peck and LIVELY, Circuit Judges.

Peck, Circuit Judge. This is an appeal and a cross-appeal

from a judgment of the District Court which found that the

two patents in suit were valid and infringed, but that the plain-

tiff was guilty of laches and therefore could not prosecute the

suit. The plaintiff appealed from the finding of laches, and

the defendant has cross-appealed from the findings of validi-

ty and infringement.

The predominant patent is a process patent (#2, 687,994)

which concerns a method of darkening tin by oxidizing it. The

second is a product patent (32,724,526) for a baking pan

having a steel base, an overlaying layer of iron-tin alloy, a

further layer of metallic tin, and a surface layer of olive-green

oxide. The second is a derivative of the first in that the pan is

» ¢

the end result of the process. These patents are fully discussed

in two opinions of the Seventh Circuit, Ekco Products v. Chi-

cago Metallic Mfg. Co., 321 F. 2d 550 (7th Cir. 1963), cert.

denied, 375 U. S. 970 (1964), and 347 F. 2d 453 (7th Cir.

1965), and in the opinion of the District Court, 173 U. S. P. Q.

486 (S. D. Ohio 1972), and the technical details need not be

repeated here.

LACHES.

The record discloses that there are only three major manu-

facturers of commercial baking pans in the United States. The

largest is Ekco, a subsidiary of the named plaintiff, American

Home Products; the second is Lockwood, the defendant; the

third, and smallest of the three, is Chicago Metallic Mfg. Co.,

against whom Ekco brought an infringement suit in 1958 for in-

fringement of the same patents which are the subject of this

suit.

In March of 1950, Ekco applied for the 994 patent, which

issued in 1954; in April of 1950, Ekco applied for the °526

patent, which issued in 1955. Ekco began to market baking

pans manufactured by the patented (pending) process in 1950.

In the fall of 1951, Lockwood began to market an identical

line of pans. In September of 1956, after both patents had

issued, Ekco notified Lockwood and Chicago Metallic that

Ekco felt that they were infringing Ekco’s patents. Both Lock-

wood and Chicago Metallic denied that they were infringing,

and both declined an offer to sign licensing agreements.

Following this reply from Lockwood, Ekco replied to Lock-

wood with a two paragraph letter, a document critical to this

case, which read in its entirety:

“We have received your letter of June 11th, 1957 re-

garding our proposed license agreement relating to the

process of forming a heat absorptive oxide coating on tin

plated bake pans.

Since your letter raises a legal question, I have referred

this matter to our attorneys and have asked them for their

opinion regarding the position you have taken.”

There was no further correspondence or other communication

between Ekco and Lockwood concerning these patents until

the filing of this suit in 1967. During this ten year interval,

however, Ekco was not idle.

In May of 1958, Ekco commenced patent infringement liti-

gation against Chicago Metallic in the Federal District Court

in Chicago (N. D. Ill.) for infringement of the dominant ’994

and the derivative "526 patent (and for infringement of two

other derivative patents not relevant to this case). In March

of 1962, the Chicago District Court held that the Ekco patents

were invalid. In August of 1963, the Seventh Circuit reversed

this judgment, holding that the 994 patent was valid, 211 F.

2d 550 (7th Cir. 1963), cert. denied, 375 U. S. 970 (1964);

the parties are not in agreement as to the holding of this case

concerning the ’526 patent.

Upon remand, the District Court found that the °526 patent

was valid and infringed (damages as to the 994 patent had

been settled). On June 17, 1964, the Seventh Circuit reversed

this judgment of the District Court and held that the defendant

in that case was not infringing patent °526 relating to the tin

plate baking pan because it had a thicker alloy layer than de-

scribed in the patent claims, 347 F. 2d 453 (7th Cir. 1964).

Upon remand, accountings were made and on September 19

1966, the parties settled the case and the District Court entered

a final order terminating all proceedings in the Chicago Metal- i

lic case. Eight months later, on May 23, 1967, Ekco brought ;

this action against Lockwood in the District Court for the South-

ern District of Ohio. As noted above, the District Court found

that the patents were valid and infringed, but dismissed the

complaint upon a finding of laches.

The parties do not dispute that the doctrine of laches is ap-

plicable to patent cases in which the plaintiff has “acquiesced

€

;

ahie th a th ee

;

for a long term of years in the infringement of the exclusive

right conferred by the patent, or [has] delayed, without legal

excuse, the prosecution of those who have openly violated it.”

Woodmanse & Hewitt Mfg. Co. v. Williams, 68 F. 489, 493

(6th Cir. 1895) quoting Kittle v. Hall, 29 F. 508, 511 (S. D.

N. Y. 1887); see also General Electric Co. v. Sciaky Bros., 304

F. 2d 724 (6th Cir. 1962).

Generally, laches requires that there be, in the light of all

the existing circumstances, an unreasonable delay resulting in

prejudice to the other party. Sobosle v. United States Steel

Corp., 359 F. 2d 7, 12 (3rd Cir. 1966). Ekco, however relies

upon the generally accepted principle that delay in suing an

infringer is not legal delay in a laches sense when the party

asserting the patent is engaged in other litigation against other

infringers. U. S. Mitis Co. v. Detroit Steel & Spring Co.,

122 F. 863, 866 (6th Cir. 1903); Jenn-Air Corp. v. Penn

Ventilator Co., 464 F. 2d 48, 50 (3rd Cir. 1972). This excep-

tion takes into account the fact that patent litigation is often

unusually complex, lengthy and expensive. It is an equitable

doctrine, and must be considered as one factor which would,

in appropriate circumstances, negate a defense of laches. There-

fore, we must assess the various factors which might tend

to negate a claim of unreasonable delay and must consider

all of the factors which contributed to this admittedly unique

situation.

First of all, we reject Ekco’s suggestion that the existence

of other litigation automatically excuses any delay in bring-

ing suit against a second alleged infringer. We do not find

that the cases support so rigid an application of this equitable

doctrine. For example, in Remington Rand v. Acme Card

System, 29 F. Supp. 192 (S. D. Ohio 1937), the earlier litigation

had been terminated favorably to the patent owner only four

weeks before the second suit was brought. Nevertheless, the

patent owner was precluded from maintaining the second suit

by the doctrine of laches because the plaintiff had lulled the

defendant into a sense of security and induced it to make

expenditures which otherwise would have been unnecessary.

The court rejected the plaintiffs argument that other litiga-

tion automatically excused the delay in bringing the action

against the defendant. 29 F. Supp. at 200.

Also, in Anchor Stove & Range Co. v. Montgomery Ward &

Co., 114 F. 2d 893 (7th Cir. 1940), the Court refused to

permit the action to be prosecuted even though the plaintiff was

engaged in other litigation during the period of alleged delay

principally because the defendant in the present suit may have

had no knowledge of the prior action. Similarly, in Baker

Mfg. Co. v. Whitewater Mfg. Co., 430 F. 2d 1008 (7th Cir.

1970), upon which the District Court relied heavily, the Seventh

Circuit rejected the “other litigation” defense to the laches

doctrine because the patent owner had not found time

during the five years prior to the instigation of the second

litigation to notify the defendant that it was going to press its

claim of infringement. 430 F. 2d at 1015.

In this respect, the admonition of the District Court is

precisely pertinent:

“The fact is there was no agreement [to delay a suit

against Lockwood pending the determination of validity

in the Chicago Metallic litigation]. If there had been,

these corporate entities and their counsel were fully capa-

ble of writing an appropriate one-page letter. No other

explanation is advanced by the delaying plaintiff.” 173

U.S. P. Q. at 497.

This is not to imply that the other litigation rule is applicable

only by agreement between the parties; clearly it is not. See:

2 Pat. L. Pers. § B.3 [2] at 10-11 (1972). But if Ekco had

intended to press its claim after the Chicago litigation, it

surely would have (or should have) found time to send Lock-

wood a simple letter to that effect.

This notification is important, partly because it puts the

accused infringer on notice that a suit will be filed against

DRT OE

9 OLY URE WHY AIE RAE RTY ET

PRN NE ro pte viene

him on this issue, and partly because it permits him to bring

a declaratory judgment action if the delay in waiting for a

judicial determination would be a burden upon his proposed

operation.

Although the “other litigation” exception does permit a patent

owner to sue multiple infringers consecutively, we are unable

to find any authority for the proposition that the existence

of “other litigation” is a complete bar to the assertion of a

laches defense. Although multiple litigation need not be main-

tained against multiple infringers, we see no reason why a patent

owner need not at least assert to the other infringers its intention

to bring a subsequent action at the termination of the presently

pending action.

The competing equities were set out by the Third Circuit in

Westco-Chippewa Pump Co. v. Delaware Electric & Supply Co.,

64 F. 2d 185 (3rd Cir. 1933):

“It is rather hard and seemingly unjust that any one should

be allowed to infringe a valid patent and deprive its

owner of royalty to which the patent entitles him. On

the other hand, it does not seem equitable for a person

with full knowledge to sleep on his rights for seven

years and thus lead another to think that he is safe in

following his counsel's advice that he may manufacture

a proposed device with impunity, and then, when he has

made large investments and built up a good business,

punish him and innocent investors for doing what might

have been prevented by timely action on the part of

the patentee.” 64 F. 2d at 186.

In addition to Ekco’s failure to assert its intentions to Lock-

wood in 1958, there is the additional failure of Ekco to bring

suit against Lockwood after the first opinion of the Seventh

Circuit in 1963. The interpretation of the “other litigation”

doctrine most favorable to Ekco would only excuse Ekco’s

inaction up to 1964. There is no excuse for the delay in

bringing suit after the first opinion of the Seventh Circuit.

That decision found unequivocally that the ’994 patent, the

dominant patent, was valid and infringed, and although the

case was remanded for further proceedings, no judgment could

have been rendered inconsistent with this holding, and Ekco

knew that it would prevail in this litigation. This became an

absolute certainty when the Supreme Court denied the appellee’s

petition for certiorari on January 6, 1964, 375 U. S. 970.

Ekco points out that Lockwood was aware of the Chicago

Metallic litigation, and it is not unreasonable to presume, in an

industry dominated by only three companies, that any one com-

pany would be aware of important patent litigation between the

other two. However, the knowledge of the other litigation is not

the important factor; the point is that Ekco never asserted to

Lockwood that it intended to file similar litigation against it at

the conclusion of the Chicago litigation. Had such notice been

made by Ekco at any time during the pendency of that litigation,

until 1963, the company would have been informed of the threat

of litigation on this process and this particular product, and the

company could have taken steps to mitigate any losses which

might result from an adverse result in such a suit.

The damage resulting to Lockwood by the failure of Ekco to

inform it of the threat of litigation is most clearly demonstrated

by an interim transaction. On February 25, 1965, all of the

assets of the Lockwood Company were sold to new owners. As

a part of this transaction, the sellers were requested by the pur-

chasers to list all pending and threatened law suits against the

company. Although various unrelated matters were listed, in-

cluding one involving Ekco, no mention of this patent dispute

was made. This failure to include this dispute in the list of

threatened litigation indicates the reliance which Lockwood had

placed upon Ekco’s failure to assert this cause of action against

it, even in the most informal manner. In reliance upon this

silence. the purchasers of the Lockwood Company were deprived

of the opportunity to consider the effect which this litigation

might have upon the company, and, unaware of any claim

against the company, built up the business by expanding the

AREA ODMR ARS ne anaes

operations of the company using the contested product and

process. See Anchor Stove & Range Co. v. Montgomery Ward

& Co., supra, at 895.

As an issue of fact, a finding of laches cannot be disturbed

unless it has been shown to be clearly erroneous, General Elec-

tric v. Sciaky Bros., supra; Rule 52(a) F. R. C. P., and as a

question addressed to the discretion of the District Court, it will

not be disturbed unless an abuse of discretion has been shown.

City of Erlanger v. Berkemeyer, 207 F. 2d 832 (6th Cir. 1953);

Baker v. Whitewater, supra, at 1009; Gillons v. Shell, 86 F. 2d

600, 611 (9th Cir. 1936). After a careful consideration of the

record before this Court, we conclude that the appellant has not

met this burden, and accordingly, the judgment of the District

Court on the issue of laches is affirmed.

II.

VALIDITY.

On cross-appeal, Lockwood contends that both patents in suit

are invalid for obviousness. The technical details of the patents

are set out in the opinions of the Seventh Circuit and in the

opinion of the District Court. Suffice it to note that, as detailed

in these prior opinions, the patented process is a two step proc-

ess: first, the pan is anodized to form an oxide coating on the

tin that is dark or blue-black in color; the second step involves

heating the pan to an elevated temperature from about 190°C

to 230°C to convert the oxide to green oxide of tin.

Initially we observe that the normal statutory presumption of

validity accorded to a patent (35 U. S. C. § 282) is greatly

enhanced when it has been held valid in a prior decision. A

prior adjudication of validity should be followed “unless the

court is convinced of a very palpable error in law or fact.” Cold

Metal Process Co. v. Republic Steel Corp., 233 F. 2d 828, 837

(6th Cir.) cert. denied, 352 U. S. 891 (1956), quoting Penfield

v.C&A Potts & Co., 126 F. 475, 478 (6th Cir. 1903).

Lockwood’s position, however, is that the prior decisions of

the Seventh Circuit should be reconsidered in light of new evi-

dence which was not presented to that Court in the Chicago

Metallic litigation. Lockwood contends that the Seventh Circuit

did not consider the argument that the patent is obvious because

the second step of the patent process is an inevitable result of

heating the pan, which would occur in ordinary baking. Lock-

wood argues that the heating incidental to baking causes the

color change because the claimed temperature range covers the

temperatures used in ordinary baking, and that therefore the

patents should be held invalid because the results flow naturally

or inevitably from the teachings of the prior art.

We agree with the District Court that the evidence presented

did not support this argument. The temperature specified in the

patent is just below the melting point of the tin. The evidence

showed that pans take many hours to convert the green oxide of

tin when bread dough is in them because the heat of vaporiza-

tion of the water in the dough causes the surface temperature of

the pan to drop too low for rapid conversion; before this con-

version could be completed the thick black oxide would flake off

and the pans would corrode. After hearing the testimony of the

inventor (Russell) and of experts in the field, and after hearing

the testimony of Lockwood’s technical experts, the District Court

made the following finding:

“This record demonstrates, however, that what the in-

ventor Russell did—simple as it was—defied the expert

research, not only of those possessing ‘ordinary skill’ but of

those who could be described as the most skilled. Even

after the result (i.e., product of what he had done) was in

the hands of Chicago Metallic, Lockwood, U. S. Steel, The

Batelle Memorial Institute, etc.—so, each of them had the

benefit of knowing what their objective was—it took Chi-

cago Metallic months and Lockwood more than a year to

solve what was concededly a definite ‘advance.’ That is

hardly obvious.” 173 U. S. P. Q. at 490.

‘

Al0

We conclude, after an examination of the record before this

Court, and after a careful consideration of the prior decisions of

the Seventh Circuit, that the District Court’s finding that the

additional evidence presented by Lockwood was insufficient to

overcome the enhanced presumption of validity which accom-

panies this patent.

The judgment of the District Court is affirmed.

All

UNITED STATES DisTRICT COURT

For the Southern District of Ohio

Western Division

AMERICAN HOME PRODUCTS _ )

CORPORATION,

Plaintiff,

= Civil Action

LockwooD MANUFACTURING COoM- No. 6429

PANY and WaASsSON RoaD Com-

PANY, et al.,

Defendants. )

FINDINGS, CONCLUSIONS, AND ORDER.

This is a patent infringement case—as usual, very multi-issue.

The “multi” includes validity—with multi subissues, infringe-

ment, a claim of introduction of “new matter” (35 U. S. C. 132)

in the Patent Office proceedings, file wrapper estoppel, wrong in-

ventorship, laches, patent misuse (in Janus), etc.

Two patents are involved:

No. 2,687,944 (applied for March 17, 1950, issued August

31, 1954, titled “Method of Forming an Oxide Coating on

Tin”) which will be referred to simply as “994.”

No. 2,724,526 (applied for April 18, 1950, issued November

22, 1955, titled “Tinplate Baking Pan”) which will be referred

to as “526.”

“994” is a process or method patent; “526” is a product

patent.

Generally speaking, the process patent dealt with the problem

of what to do in a cheap, fast, constant, and efficient manner

with a baking pan fashioned from tinplate, produced by the

steel manufacturer, so that the pan could be used for efficient

BA TE veseES 2

5 ae

BSE Ee AR a UE DW oP

Al2

baking upon its receipt by a baker. Generally speaking, the

product patent dealt with this problem: What baking pan, from

a content point of view (i.e., how much of this and how much

of that), is immediately usable by a commercial baker?

A probably over-simplistic—but at least introductory—posing

of the problem, a la 1950 and before, is this: One cannot

bake commercially and repetitively in pans made simply of a

dark metal, such as iron. Dough plus heat equals moisture,

which corrodes or rusts the dark metal. The answer to that

problem is to plate the metal with something which will stand

the heat (no reflection on Mr. Truman) but will not rust and

in the trade the answer to that has always been tin. Tin solves

the corrosion problem, but in itself raises another one, and did.

Tin reflects so much of the oven heat from its surface that the

temperature inside the pan never rises to the desired height and

in consequence, the bread bakes slowly and the crust, rather

than turning the desirable color, remains practically white. So,

the reflective quality of the tin had to be removed; or, stated

another way, the outside surface of the tin had to be darkened.

For many years this was accomplished by the baker in this man-

ner (called “burned out” or “burned in,” depending on one’s

point of view): The new tinplate baking pan as furnished by

the pan manufacturer would be put into an oven capable of

producing something like 400 or 400+-° F and heating it. The

purpose of all this was to oxidize the tin layer and hopefully the

outer portion of it. Tin melts at something around 425° F.

Obviously, the closer you got to it without hitting the 425°

mark, the shorter the burning time. If you got over it, the tin

melted and would expose the steel underneath and you were

right back where you started from. If you were too low, obvi-

ously it was a waste of time. The ordinary commercial oven

does not distribute its heat with mathematical accuracy. Given a

good sized one and a lot of pans, it is not difficult to visualize

the problems. It was not impossible to “burn in” in this fashion

and get the desired result at the end of the process; on the

Al3

other hand, it was not usual. Generally speaking, as a result of

some hours of “burning in”—and asuming the temperature of

a particular pan among a number was not too low (with no

result) or too high (with ruination)—you got a pan which had

a layer of tin oxide on the outside which still was not thick

enough. The commercial baking process itself did carry the

process forward, but in the meantime your pan would bake in a

subpar fashion (resulting from being too reflective) for the first

dozen or so bakes. Your product during the first week would be

subpar. At some point between ten and twenty bakes, the

layer would build up sufficiently so that the heat reflection would

“stop”—the buildup would stop too because, if you did it right,

you would have enough tin between the tin oxide and the iron

or steel tin alloy to accomplish the purpose for which the tin

was put on to begin with. This “just so” buildup was marked

by the tin oxide layer assuming a hue which, in the baking trade

and/or in the chemical trade, is referred to as “green” or “olive.”

A good commercial baking pan, going from outside to inside,

will consist of—if one would speak of the layers as separate—a

layer of green oxide of tin, a layer of tin, a layer of tin-metal

(iron or steel) alloy, and then what you started out to use as

the baking pan before you ran into all the various troubles.

The consistency, impact strength, and adherency of.each of

those three “covers” is important. Tin is an expensive item, and

that is important.

For many years prior to the late 1940's, the commercial

bakers enlisted the help of the pan manufacturers. One form

was a request that the pan manufacturers “burn in” their pans

and at least one of them made some effort along that line. Of

course, that did not solve the problems, but merely changed

the one who had them. The tinplate after the war did not seem

to be as susceptible to “burning in” as pre-war. The pan manu-

facturers brought the problem to the steel companies and they

were both conscious of it and working on it.

Al4

In the 1940’s and 1950's, and apparently even today, three

companies practically monopolize the manufacturing of baking

pans. One is a Chicago company, called Chicago Metalic.

Another was a Chicago company, called Ekco Products Com-

pany. Ekco was acquired by the plaintiff American Home

Products in 1965 and has continued to operate since then as

a division or subsidiary of the plaintiff. The third is the defend-

ant Lockwood.

This case was tried some months ago. At the conclusion of

the trial, one of the issues in the case, i.e., laches, was severed

and the case was otherwise submitted. The reason for the

severance was this: In 1965, what we have referred to as the

“Lockwood” Company sold all of its assets in a more or less

typical asset transaction to a new company. As part of the

transaction, the then existing “Lockwood” Company changed its

name to “Wasson Road” and a new company controlled by the

purchaser was incorporated, called “Lockwood.” Both the

old company and the new one were parties defendants to this

case. In 1969 the old company and the plaintiff settled what-

ever their differences were without prejudice to the claims of

the plaintiff against the new company and the fact and “non-

prejudice” of the settlement were stipulated into this record.

The case continued on against the new company. At the trial

of this case as between the plaintiff and the new company, the

new company sought to introduce into evidence the contract of

sale between the old company (Lockwood of Ohio) and the

new company (Lockwood of Delaware). This proposed ex-

hibit had not been listed by the defendant in its pretrial state-

ment, despite the fact that the standing order of this Court

requires the listing in a pretrial statement of every exhibit which

a party intends to use in chief, and despite the fact that laches

was not only an issue, but rather extensively briefed in that pre-

trial statement. Ordinarily this Court summarily sustains ob-

jections based on such a ground, lacking the exceptional

situations (such as the existence of the exhibit not being known

Al5

until trial time) or a situation in which the overall ends of justice

require the admission despite the disregard of a previous court

order. This exhibit seemed to fall into the latter category, as

we shall see, from a laches point of view.

This case would be materially different in this Court’s opinion

if in the sale contract there had been something to the effect that

the seller had disclosed that a patent infringement liability

against one of its processes and one of its products had been

asserted by Ekco and that the seller will be under no responsi-

bility to the buyer (if the buyer elects to continue the process

and continue making the product) (for any possible infringement

liability incurred by a buyer to Ekco.

On the other hand, from a justice point of view, such an

unanticipated exhibit should not be introduced until such time

as the adversary has full and complete discovery opportunities

with respect to it. A ruling on the admission was therefore re-

served, the issue severed, and the plaintiff given full discovery

opportunity.

That has led to this: The plaintiff has developed that a sub-

stantial portion of the purchase price, i.e., $2,000,000.00, or

something approaching a third, was paid via a subordinated non-

negotiable note due in 1977. The parties are agreed that if the

sales contract is admitted, the note should likewise be admitted.

The plaintiff does not desire to carry discovery further. The

defendant wants «nother trial on the issue.

It would be going pretty far even as a matter of discretion

and in the overall justice field to go into a second trial to pro-

duce evidence to bolster up an exhibit not listed in a pretrial ;

statement. :

Overall then, the exhibits in question, being the contract and

the note (Defense Exhibits 69 and 69-A) are admitted into

evidence; the plaintiffs motion to strike the defense of laches

is overruled; and the defendant’s motion for a further trial on

the severed issue is denied. It is noted that a protective order

appears to be desired if reference be made to these exhibits

SEE E TALI Re CATAL Si pen en Emenee

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Tee i! tory ‘

PAT ; sol pt a ooh eRe thao Bo AU OAML TEN ae

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Al6

herein. Reference will be made; therefore, counsel may present

a proposed order.

These patents have been extensively litigated between two

litigants ready, able and willing to litigate almost every issue

presented in this record—and the emphasis is on the “able.”

The litigants were Ekco (plaintiff's predecessor) and Chicago

Metalic. The litigation started in the Northern District of Illinois

in May of 1958. The District Court held both patents invalid

and not infringed. The Seventh Circuit, in August of 1963

(Ekco v. Chicago Metalic, 321 F. 2d 550) reversed the District,

concluded that “994” was both valid and infringed, and re-

manded with respect to “526” for further consideration by the

District in the light of the Circuit's comment on “994.” The

District Court in Illinois thereafter concluded that the “remarks”

made in the “previous opinion” of the Circuit left it with “no

latitude” and therefore concluded that “526” was both valid and

infringed. Evidently the District Court was half right. When

the case came before the Seventh Circuit the second time [347

F. 2d 453 (1965)] the Circuit said:

“* * * If we had intended to order a judgment that °526

was infringed, we would have said so as we did with the

°994 patent. We intended the District Court should make

an independent judicial determination on this point.”

With some trepidation—since the parties to this case do not

agree on what the Seventh Circuit did with “526”—we think

“this point” means “this point.” Or stated otherwise, that if the

Seventh Circuit meant that the District was free to consider

validity, it would have “said so.” In any event, Chicago Metalic

prevailed in the “526” litigation and it is of some import to

note that it prevailed on a file wrapper estoppel ground. The

measurements of one of its layers—and the critical layer—did

not come within the “526” measurements.

Parenthetically, one of the claims of misuse is this: When

Chicago Metalic obtained a license to use the process patent, it

Al7

also was licensed to use the product patent. The defendant

characterizes this as a sort of tie sale. That does not tally with

the facts—Chicago’s uncontradicted testimony is that Chicago

wanted the produce license and the evidence is that when the

plaintiff offered to tear up that part of the agreement which

dealt with the product license, Chicago would not hear of it.

Two notes: (1) As the Supreme Court said in Morton Salt Co.

v. Suppiger, 314 U. S. 488, “Equity may rightly withhold its

assistance * * * and should do so at least until it is made to

appear that the improper practice has been abandoned * * *.”

(2) One can well understand how an alleged infringer, saved by

file wrapper estoppel, might want to avoid the risks of the

variables of industrial practice or, indeed, might want to en-

croach the boundaries. That is evidently related to Chicago

Metalic’s desire for the license. In any event, this Court has no

difficulty in finding that Chicago Metalic was not “required”—

it got what it wanted.

To return to Ekco-Chicago Metalic litigation, the opinion

of the Seventh Circuit clearly discloses on its face a determina-

tion of the scope and content of the prior art; the differences be-

tween the prior art and the claims at issue in that case, as well

as the claims at issue in this case; the level of ordinary skill in

the pertinent art; the non-obviousness of the subject matter.

In addition, the secondary considerations, including commer-

cial success, long felt but unsolved needs, and the failure of

others, etc., were determined and utilized to give light to the

circumstances surrounding the origin of the subject matter.

Further, the secondary indicia were obviously treated as sec-

ondary. In other words, everything which the Supreme Court

dictated in Graham v. Deere, 383 U. S. 1, and which the Sixth

Circuit has, of course, repeated [Kolene v. Motor City, (1971);

Westwood v. Owens, (1971); Tapco v. Van Mark, (1971)—

to take a few examples] has been done in the federal judicial

process; not only that, but on every major question of fact,

district court findings of fact contra the patent owner on validity

met this in a circuit:

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sag satin EAC

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Al8

“We are not required to accept the findings of the

district court if they are not supported by the evidence or

are clearly erroneous.”

This, then, on the question of validity. We have carefully re-

viewed this record with this question in mind: Are there any

facts in this record relevant to validity which were not before

the Seventh Circuit? The answer, of course, is “yes,” since no

two cases try the same. But, while there is additional evidence

and there are additional facts, they are in the comme ci, comme

ca field. There is nothing new of import in this record.

In Cold Metal v. Republic, 233 F. 2d 828 (1956)—dealing

with a situation in which a validity issue arose between a paten-

tee and a different “infringer” in a district court in this Circuit

and with respect to a patent which had been litigated between a

patentee and different “infringers” in two other circuits, resulting

in an upholding of validity in each of those circuits—the Sixth

Circuit said at p. 837:

“* * * The prior decisions holding these patents valid

should be followed unless the court is convinced of a very

palpable error in law or fact.”

As a mixed finding and conclusion, there is nothing in the record

of this case which would lead this Court to a “conviction,” let

alone “very palpable.” On the contrary, our review of this

record leads us to the same conclusions arrived at in the Chicago

Metalic litigation.

We are fully aware that Blonder-Tongue V. University, 402

U. S. 313 (1971), deals with a completely different question

and that, under the present state of the law, a patent owner,

although his patent may have been found valid in a half dozen

circuits in able contests, still lays the question on the line in any

district in some other circuit if an infringement case is filed.

Surely many of the reasons for the Blonder rule are as applicable

to the one situation as the other. The mutuality requirement

ought to be, as the saying goes, “put to the torch,” but until it

has been, we have no alternative but to assume that the plowed

Al9

field has been completely rolled over and go plow again. We

have so done and the mechanics of “findings and conclusions”

in the context of this case is a little out of the ordinary.

In the first place, the ultimate findings and conclusions with

respect to the state of the art, skill, etc., are already in the books

—better said than we could say it—in the first opinion of the

Seventh Circuit above referred to. Secondly, a great deal of the

law applicable to this case has found its way in the books via

recent opinions of the Sixth Circuit above referred to. For in-

stance, Westwood describes the burden of proof with respect to

invalidity as a “heavy one.” And the same case emphasizes the

correct secondary consideration to be given to such matters as

commercial success, etc. What everybody agrees to have been

the “most pertinent prior art” was obviously considered by the

Patent Office in this case, without question in respect of the

process patent and certainly inferentially in respect of the prod-

uct patent; and Tapco teaches that, in such a situation, “the

presumption is clearly strengthened.” The same case deals with

another aspect of this one. Essentially what was new in this

case as applied to the process patent was to heat something at

high temperatures. It is urged that that would have occurred to

anybody, for one thing, and, secondly, whether it did or did not

occur to anyone, it would have actually been done in glazing.

(In the 1940's Dow Chemical produced a glaze which did away

with the necessity of “greasing,” and made the baked product

readily removable—this glaze was applied to the interior of a

pan and then cured, which involved a heating at about the same

temperature as one would heat, using the second step of “994.”)

As Tapco teaches, adopting the statement from Goodyear Vv.

Ray-O-Vac, 321 U. S. 275 —

“Viewed after the event, the means Anthony adopted seem

simple and such as should have been obvious to those who

worked in the field, but difference is not enough to negative

invention. * * *”

;

FRED ante

Ni IOI RR AEE EY Same EOL RES

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A20

This record demonstrates, however, that what the inventor

Russell did—simple as it was—defied the expert research, not

only of those possessing “ordinary skill” but of those who could

be described as the most skilled. Even after the result (i.e.,

product of what he had done) was in the hands of Chicago

Metalic, Lockwool, U. S. Steel, The Batelle Memorial Institute,

etc.—so, each of them had the benefit of knowing what their

objective was—it took Chicago Metalic months and Lockwood

more than a year to solve what was concededly a definite “ad-

vance.” That is hardly obvious. There is an indication that

during that time U. S. Steel once did just what Russell did—

after Russell did it—but did not get the desired result and never

tried again.

The third matter relevant to “mechanics” is this: Each of the

parties has filed proposed findings and proposed conclusions.

The fact proposals as filed are meticulously detailed, artistically

drafted, and aggregate 110 printed pages.

Since this Court regards the determinative question in this

case as the laches question, detailed consideration must be given

to the facts and the law involved in that. Sheer pragmatic con-

siderations require this mechanical disposition of the facts and

conclusions concerning the other issues to the extent they have

not been hereinabove dealt with.

This Court adopts as findings of fact plaintiff's proposed

findings numbered | through 71 and 73 through 76. This Court

likewise adopts the following findings of fact as proposed by the

defendants: 1 through 4, 6 through 14, 26, 34, 82 through 91,

95, 99, 100, 105, 106.

With respect to the proposed conclusion of law, this Court

adopts the following from the plaintiff's proposals: 1, 2, 3, 4, 5.

6, 7, 8, 9, 10, 11, 12, 13, 14. With respect to 5 and 6, it has

already been emphasized that those considerations are secondary.

Before dealing with the matter of laches, one final notation.

In the view of this Court, there is really no serious issue of in-

fringement. If either patent is valid, infringement has clearly

A21

been established and if it needs repeating, the conclusion of

validity in respect of each patent is arrived at first independently

and secondly since this Court sees nothing wrong, let alone

palpably wrong, with the previous adjudication in the Seventh

Circuit.

LACHES.

The facts are chronologically as follows:

March 17, 1950—The application on the “944” patent

was filed.

March, 1950—Ekco commenced commercialization with

considerable advertising, immediate acceptance and com-

mercial success, and immediate efforts by its two competi-

tors to find out what Ekco was doing and to copy it.

April 18, 1950—The “526” application was filed.

Fall, 1951—Lockwood commences commercialization

of its infringing process and product.

1952—Ekco was quite patent conscious in this whole

matter from the very beginning. It acquired the new

Lockwood pans and the new Chicago Metalic pans very

shortly after its two competitors began to produce them

commercially. It tested them and urged on the Patent

Office speed in the processing of its applications on the

ground that its then application-pending patents were being

infringed.

Aug. 31, 1954—“994” issued.

Nov. 22, 1955—“526” issued.

Sept. 24, 1956—Ekco notified Lockwood that it was

infringing both patents and suggested the parties meet to

discuss the matter. As an indication of how these two

companies were watching each other—in only two weeks

Lockwood wrote back, stating that their patent counsel

had reaffirmed his position that no infringement exists.

The possibility of patent problems had been in Lockwood’s

Sate AS Se actA Le aN aE

A22

mind since 1951, just as it had been in Ekco’s mind, and

they were both diligent enough watching what the other

one did to warrant this finding.

Sept. 1956—Ekco was generally familiar with the proc-

ess used by Lockwood and was fully familiar with the

measurements of the tiers of the layers.

Oct. 23, 1956—A meeting between the patent counsel

of the two firms took place. Ekco asserted liability and

Lockwood denied it and the upshot was that they both sort

of decided to find out what they were really arguing about

in terms of figures. So, the meeting ended on the note

that Ekco would submit a proposed license and Lockwood

would consider it.

March 28, 1957—Ekco transmitted the proposed license

to Lockwood. This matter was again submitted to Lock-

wood’s patent counsel and about a month and a half after-

ward counsel formally reported that in his opinion there

was no infringement and in his opinion the patents were

invalid, but that if Claim One of “994” was valid, Loek-

wood would be infringing that claim.

June 11, 1957—Lockwood informed Ekco in writing

that its counsel had advised no infringement and, there-

fore, the proposed licensing agreement was unsatisfactory

and would not be signed—the latter in effect.

July 10, 1957—Ekco acknowledged that, with this con-

clusion:

“Since your letter raises a legal question, I have re-

ferred this matter to our attorneys and have asked

them for their opinion regarding the position you have

taken.”

Nothing thereafter passed in writing between Ekco and

Lockwood and/or their successors, from that date, per-

taining to this controversy or to anybody’s position in this

controversy until this case was filed, for all practical pur-

poses, ten years later—May 23, 1967.

A23

The officers of these two companies, as well as their

lawyers, were not strangers; they competed heavily and

daily; they met at conventions and shows. Except for

one claimed passing telephone conversation, there is no

evidence in this case whatsoever that over a ten-year

period any Ekcoian ever even mentioned to any Lock-

woodian that you “ain’t doing right by us”; or stated

otherwise, that their lawyer did not agree with Lock-

wood’s.

1957—During the same period of time that Ekco was

discussing with Lockwood, it was discussing with Chicago

Metalic. The results were no different. It is claimed

that some time after July of 1957, one of the officers of

Ekco indicated in a telephone conversation, or perhaps

two conversations—one with Harold Lockwood, the presi-

dent, and the other with the then general counsel for that ;

concern—that should the Chicago Metalic negotiations ¢

completely break down, Ekco would sue Metalic first, since :

they were in the same city, in order to establish the validity

of their patents, their infringement, and the means of cal-

culating royalties; and then, assuming success eventually,

Lockwood would be called to an accounting meaning that

the patentee would go after one claimed infringer first :

and, if successful, would then go after the other claimed :

infringer. By the time this case was filed, both Mr. Lock-

wood and his general counsel were dead.

Under all the circumstances, it would be this Court's ‘

finding, if in the context of this case plaintiff has the

burden of establishing that conversation and it be im-

portant, that that burden has not been met. Since the

plaintiff is the first person to state that that conversation

took place under accepted rules and entirely apart from

patent law, it would seem pretty clear that plaintiff would

have the burden; so, this Court, as a fact finder, concludes 5

that there simply was nothing said or written by the pat- E

See

SRE ERO RT PORT RET EON IEE

A24

entee for almost ten years—in a period after initial noti-

fication of infringement.

It is as well to point out here as hereafter, that plain-

tiff does not even claim that anyone connected with the

defendant ever said, “That is fine,” or anything like it.

At best they just listened and to listen to anyone who is

telling you why he has not sued you certainly is not

acquiescence.

May 13, 1958—Ekco sues Chicago Metalic.

March 28, 1962—First Northern District of Illinois

opinion.

Sept. 24, 1962—The statutory six-year period (35

U. S. C. 285) beginning with the Ekco notice to Lock-

wood of infringement expired—or if one would say it an-

other way, started to toll infringement on a thereafter

daily basis.

Aug. 16, 1963—The first Seventh Circuit opinion. With-

out any doubt, this upheld the validity of the process

patent. If there was any doubt on whether it upheld the

validity of the product patent, it was a tiny one and that,

of course, was dispelled later on, as we have seen. Of

course, Lockwood knew of that holding very quickly after

it issued. That is not the point. The point is what did

Ekco do consistent with a present intention of asserting an

infringement responsibility against Lockwood? The an-

swer is, “Nothing.”

Jan. 6, 1964—The Supreme Court denied certiorari—

375 U.S. 970. The plaintiff on brief in this Court claims

that this is such an open and shut case on the issues of

validity and infringement that it comes within the “excep-

tional” language of 35 U. S. C. 285.

By January of 1964, the plaintiff knew everything, gen-

erally speaking, respecting invalidity and infringement that

it knew when this case was tried. There was simply no

A25

reason, consistent with intent to go ahead, for not at least

reasserting the claim in a one-paragraph letter in January

of 1964. It hardly needs statement, in the light of the

mere poundage weight of this record to recount this: From

the time Lockwood launched on its commercialization, it

built up the line, it built up a trademark related to the

line, it built up business related to the line, it made capital

improvements—the capital improvements and build-ups

cost substantial sums of money. The expenditures were

continuing—no one can say whether or to what extent

they would have been made if an infringement suit had

been seasonably filed. All of us rely on the inaction of

others in doing what we do—and so did Lockwood. Apart

from the one or two telephone conversations, the plaintiff's

argument is that it was waiting not only for validity and

infringement in Chicago, but also for damage determina-

tion before going after Lockwood. The most anyone could

call that is unilateral reasoning; the least it indicates is

that, even with the certiorari, the plaintiff still could not

make up its mind whether it had or had not abandoned its

claim.

Feb. 25, 1965—Lockwood, I, sells to Lockwood, II.

There is no doubt that Ekco knew about this sale at least

by the day after it closed and was announced in the press.

Once again, not one word to the buyer. We do not mean

to imply that Ekco knew whether the transaction was a

stock deal or an asset deal. It evidently did not have

enough interest to find out and warn the successor if it

was asserting a claim and that the successor might be

walking into it. More about the contract later.

1965—Ekco is sold to American Home Products.

May 23, 1967—This case was filed. Originally it in-

volved only Lockwood, II, as defendant. Lockwood, II,

had some officers who had beén officers of Lockwood, I,

and they certainly knew about what had happened between

TP DS MS

A26

Lockwood and Ekco in 1956 and 1957. The buyer,

° Lockwood, II, had no such independent knowledge what-

soever, either actual or imputed. It continued to operate

- the process involved and produce the product involved in

absolute good faith, without any knowledge at all that

Ekco either had a claim or intended to assert a claim until

the case was filed. As a matter of fact, the plaintiff did

not even know about Lockwood, II, as such, until this

litigation had been going on some time, when it found out

about the detail of the transaction and moved in this Court

to make Wasson (nee, Lockwood, I) a party.

One set of facts that does not lend itself to a chronological

statement has to do with the Lockwood purchase/sale contract

and what plaintiff calls “cover"—the subordinated non-negoti-

able, long-term (12% years) $2,000,000.00 note. The con-

tract is in the standard form of asset contract. It is dated

February 27, 1965, and, in accordance with its terms, the pur-

chase price was $7,000,000.00 gross, less a number of items—

the amounts of which are neither determinable from the evidence

in this record, nor important to this case. The sale agreement

covered all of the assets of the seller. The “free and clear” does

contain something slightly unusual, which is repetitive through-

out the contract in that there is excepted from the free and clear

“certain other restrictions which do not affect marketability.”

However, there is no evidence in this case based on which this

Court could tie that up with anything except a springboard to

speculation. There is nothing in the contract one way or another

dealing specifically with patents or infringement, or anything of

that nature (meaning that there is no warranty by the seller to

the effect that no process or product infringes on any patent).

The seller undertook to assume and be solely responsible for all

of its liabilities, except such as expressly assumed in a limited

paragraph which has no language in it applicable to this case.

In other words, under the contract the seller was responsible

for what it did before the closing and the buyer was responsible

A27

for what happened afterward. That is not to say that there is

no language in the contract which might not be the subject of

litigation between the buyer and the seller related to this case

if the buyer be held responsible in this case. There may well

be, but if one long drawn-out patent case bearing the characteris-

tics so well described in Blonder is detriment—as this Court

thinks it is —certainly a long drawn-out patent case and a long

drawn-out contract case is double detriment.

There is one paragraph of this contract quite relevant to this

case. The seller was called on to make the standard represen-

tation in respect of “actions or proceedings” pending and the

standard representation—“Nor are there, to the knowledge of the

seller, any such actions or proceedings threatened against it, or

any of its subsidiaries, other than the following: * * *.” Dis-

closure was made of three cases. We pause here, with this

question addressed to any reader:

“If, in 1965, you had been the responsible negotiating

officer of Lockwood, I, and knew everything in the record

of this case, how would you have described the situation in

respect of Ekco?”

and

“Is a letter-asserted claim, followed by a meeting and an-

other couple of letters and at the most two telephone calls

in 1957, when subsequently followed by eight years of

silence, what one would describe at the end of the eight

years a then-present ‘threatened action’?”

Lockwood, I, in context decided “No.” We agree. Others may

disagree, but the point is that if this claim had been asserted with

any degree of relationship to anything contemporaneous, Lock-

wood, I, may have and probably would have decided differently.

We can then only speculate what Lockwood, II, would have

done and/or whether they would have continued the process if

they had closed the transaction. That was their decision to be

made in 1965—not Ekco’s. Ekco, by its silence, lulled Lock-

wood, IT, into a situation where they might never have been but

RAR PR np 8 PPI EPO TY aS

wr eee

A28

for the long silence. That is detriment. In addition, of course,

on this record Lockwood, II, has continued to build up the busi-

ness, the process, the pet advertising name for the process, etc.,

etc.

LacHEs CONCLUSIONS.

The plaintiff makes a number of contentions in respect of the

laches defense. One of them hints that a patent infringement suit

is legal in nature and does not permit of a laches defense. An-

other claim is that once an infringement claim is asserted, the

defense is never thereafter available and the only time limit is

the statute of limitations. Another is that once litigation is

initiated by a patentee and other alleged infringers are informed

of that, coupled with a claim of infringement, the interval be-

tween the notice and final determination of the pending litigation

is not included as “sleeping time.” Another claim is that what-

ever the time involved, laches in the abstract is no defense, but

that the person asserting it must prove prejudice and has both

the burden of proof and the burden of going forward on that

score. Another, and we think the last, is this: That laches is a

personal defense; it does not permit the “tacking on” of sleeping

time vis-a-vis another legal entity, and that is particularly true

where some sort of settlement has been agreed upon between the

patentee and the predecessor entity.

Therefore, the plaintiff in this case could have been a “sleepy

time gal” only after February, 1965, or only for a period of some

20 months. It is a fact that Lockwood, I, was made a party to

this case after it was filed and it is a fact that some sort of agree-

ment was arrived at between the plaintiff and Lockwood, I,

which resulted in the dismissal of this case as against Lockwood,

I. in 1970—it was a dismissal without prejudice to the plaintiff's

claim as to Lockwood, II. The actual settlement agreement has

been proffered as a part of the defendant's proposed findings.

This Court is not aware of its detail, since it is considered irrele-

vant. It is certainly a very safe assumption that if it were any-

Ma Se een

ene |

<a ——

A29

thing other than a covenant not to sue, we would have heard

about it a long time before we did.

Since the problem arises in this case in what appears to be a

really unusual fact context, it would be in order to deal, at least

in short summary, with most of the pertinent cases, some of

which have been referred to by counsel and some of which have

not. That will be done, again chronologically in the main—

United States v. Detroit Steel, 122 F. 863 (6th Cir.,

1903). That case is authority for the proposition that

“pending litigation involving the validity and construction

of the patent was sufficient reason for not bringing other

suits of infringement until the patent should be finally

adjudicated.” In that case, however, there are two signifi-

cant differences—the time interval involved in the inter-

mediate litigation was three years and a few months. More

significantly, “less than six months after the patent was thus

adjudicated this suit was instituted.” If adjudication in a

circuit is “adjudication”—and we certainly think it is—the

interval here was three and one-half years, during which

time an important event took place. Because of those three

things, that case is not regarded as controlling.

France Mfg. Co. v. Jefferson, 106 F. 2d 605 (6th Cir.

1939). In this case the patent issued in 1930. The case

reached the Circuit in 1939. It is difficult to pin the other

relevant dates, although it appears that the notice of in-

fringement was given in 1931 and the suit was filed some

time within six years thereafter; that is to say, the patentee,

having once advanced his claim, did not permit the six-year

period established in then Section 20 and now 35 U. S. C.

286 to run by.

In the present case, the interval between advancement of

claim of infringement and litigation exceeded ten years.

The Sixth Circuit said this:

“* * * There is no evidence that the delay in instituting

suit resulted in injury or prejudice to appellant or that

WET Petrone

MOMMA |

A30.

there has been any change in circumstances as the

result of such delay as would render it inequitable for

appellee to be granted an injunction at this time with

damages for past infringement. The statute limits the

recovery of profits and damages to those arising from

infringement committed within six years prior to the

institution of suit (35 U. S. C. A. § 70) and we know

of no other period of limitation which may be invoked

by an infringer to bar recovery but where circum-

stances appear which render it inequitable for relief to

be granted because of delay in instituting suit, not-

withstanding the statute of limitations, relief may be

denied on the ground of laches or estoppel. No such

circumstances are shown here. It is well-settled that

mere delay short of the statutory period of limitation

is not sufficient of itself to bar relief. It is no defense

to a suit for an injunction and accounting for the con-

tinuing trespasses of an infringer that the latter has

been trespassing on the rights of the owner of the

patent for years with impunity, where he has admitted

knowledge of the existence of the patent and notice of

his wrong doing.”

The least that can be said of this case—and there is lan-

guage in it favorable to the plaintiff, of course—is that

unquestionably the defense is available in the standard

patent infringement case.

Anchor v. Montgomery Ward, 114 F. 2d 893 (7th Cir.

1940). In this case the plaintiff had previously initiated

litigation against a manufacturer of a stove—an unfair com-

petition case. The litigation took a long time and after it

terminated the plaintiff initiated the unfair competition case

against a retailer who had had something to do with caus-

ing the stoves to be manufactured in the first place. The

pendency of the first litigation was advanced contra a

laches defense in the second. The interval between the

activity of the defendant which brought on the case in the

first place and the filing of the case against the defendant

was eleven years. The Seventh Circuit said:

be nbredesenece AD

A31

“Defendant’s conduct of which plaintiff complains was

well known to the plaintiff at the time of bringing suit

against the manufacturer in Tennessee and no conduct

is asserted or claimed on the part of the defendant that

in any way excuses the plaintiff's delay in bringing the

present suit. * * * The mere fact of plaintiff's election

to proceed in the first instance against the manufac-

turer alone, followed by its long drawn-out litigation

against the manufacturer does not excuse the plaintiff

from seasonably asserting any cause of action that it

might have desired to assert against the present de-

fendant. It might now become quite inequitable for

the defendant to be called upon to make an accounting

for many transactions * * * throughout its various

branches after so many years delay.”

American Filter v. Air Maze, 45 F. Supp. 977 (N. D.

Ohio, 1940). This was a conventional patent infringement

case involving an interval of twelve years after notice of

infringement, a claim of laches or estoppel, plus a showing

by the defendant of actual damage. The tacking problem :

was neither raised nor decided. It was in the case on its ;

facts. Somewhere along the line the original claimed in- :

fringer became a corporate “predecessor” and the actual :

party defendant became a “successor.” It was in the cor-

porate area—'twether stock deal or asset deal does not

appear; nor do we think it makes a particle of difference.

The District Court did tack in fact. It said:

.“* * * the filter * * * has been continuously manufac- E

“tured by defendant and its predecessor and licensor

since 1925. In 1925 plaintiff's predecessor served

upon the defendant’s predecessor a notice of infringe-

ment. The defendant’s predecessor * * * denied in-

fringement, and suit was threatened by the attorney

for plaintiff's predecessor. No suit was filed, however,

and the Company continued its manufacture and sale

and it and the defendant invested large sums of money

in the business. The testimony reveals that approxi-

mately one million filters have been sold. On April

ATRIA IRE ea mM iE

Re te

A32

30, 1930, counsel for the owner of the patent in suit

again charged infringement against the defendant's

predecessor. The evidence shows that the charge was

dropped at that time because ‘they weren’t infringing.’

A third notice of infringement was given on April 26,

1935. This notice contained a definite accusation,

demand for accounting, and threat of suit. But the

present suit was not instituted until January 23, 1937,

nearly twelve years after the first notice of infringe-

ment. In view of this evidence, it seems to the court

that the defense of laches and estoppel is sustained.”

As a matter of fact, this case is authority for double tack-

ing—stated otherwise, a predecessor sleeper’s time may be

tacked on the plaintiff and a predecessor’s “un-sued” time

may be tacked on for the benefit of the defendant.

The last expression of the Sixth Circuit, with peculiar

applicability to this case, is General Electric v. Sciaky, 304

F. 2d 724 (1962). There is at least one important factual

difference between that and this case in that no notice of

infringement had ever been given until the lawsuit was filed.

The patents involved issued in 1943-45, the case started in

1958. However, there are some very important common

grounds and a great deal of the law based on which this

Court decides this case. The parties to the case, too, had

been “dealing with” each other for many years before the

case was filed; the six-year statute of limitations had run

as against some years of the activity claimed to constitute

infringement; the plaintiff knew, for a long time before suit

was filed, what the defendant was doing. In fact, there had

been some discussion between the parties regarding in-

fringement some ten years before the suit was filed—just

like the present case. The Sixth Circuit made these

pertinent expressions:

“* * * General Electric had knowledge of defend-

ant’s machines at least since 1948 and failed to bring

action for infringement until nearly ten years later.

= x x

‘wis a ere |

A33

“Where the unexplained delay exceeded the ap-

plicable period of the statute of limitations, injury to

the defendant is presumed. In a patent infringement

action equitable principles are applied. Equity will not

aid those who have slept on their rights. The failure

of General Electric to take action over the many years

constituted laches. * * *

“Whether or not General Electric was guilty of

laches was a question of fact to be determined by the

trial judge in the exercise of judicial discretion.”

Hughes Aircraft v. General Instrument Corp., 275 F.

Supp. 961 (R. I, 1967). The plaintiff relies on this case

for its “personal defense”’—no tacking principle. The

language is favorable, but the facts are considerably differ-

ent. The patents issued in the middle 1950’s. A company

named Radio Receptor began doing what it did, which

eventually led to the infringement case, in 1954. In 1957

that company became the predecessor of the defendant in

some kind of transaction. Neither the predecessor nor the

successor had any knowledge of the patent until 1961

and that came when the notice of infringement was given

to the defendant. The infringement case was filed in 1962,

less than a year after the notice. The defense sought to

tack on the pre-1957 infringement. The court said:

“* * * Defendant's infringement of the patent com-

menced when it acquired Radio Receptor Company in

1957. It is not so that defendant commenced in-

fringing the patent in 1954. The law does not permit

defendant to ‘tack on’ a period of infringement by

another party to bolster a claim of alleged laches—this

is a personal defense.”

The Pierce case cited by the Rhode Island court as support-

ing authority involved a situation in which one party, a

defendant utterly unrelated in all respects to another entity,

sought to avail itself of the infringing time of the other

unrelated entity. The Rhode Island case is nowhere near

SERRE GIN NER tac UE RONNIE PE

PIR

A34

the facts of this case in which the successor seeks to tack

the time of its predecessor—after notice of infringement to

its predecessor.

Photon, Inc. v. Eltra Corp., 308 F. Supp. 133, (Ill.,

1969). This case is also relied on by the plaintiff. Seven

years elapsed between the time the plaintiff learned of the

infringement and the institution of suit. For at least a

year, and probably longer, the parties were in negotiations

until breaking off. The case appears to be authority for

the proposition that once a notice of infringement is given,

laches departs. However, it was stated in the context—the

interval between the notice of infringement and the filing

of the suit; or more accurately stated, the interval between

the breakoff of negotiations which followed the notice of

infringement and the filing of the suit was less than the six-

year period. That period is important, since it seems to

affect, perhaps not the burden of proof, but certainly

the burden of going forward, since it interjects a presump-

tion.

Hopper v. Stanbio, 310 F. Supp. 30 (Texas, 1969).

In that case, the affidavit submitted to the Patent Office

during patent proceedings—which charged infringement

and therefore a necessity for hurry—was filed in December,

1959. The patent issued in 1961. The rejection of the

license after an assertion of infringement look place in

1963—that by the defendant's “predecessor.” Plaintiff did

nothing until 1966 when a license was again offered and

again rejected. As applied to whatever claim the plaintiff

might have ever had against the predecessor, and im-

portantly, this:

“The product marketed by the defendants was sold

prior to six years from the filing of this action; any

prior sale by the predecessor is barred by limitations.

«* * * Under the circumstances plaintiff is guilty

of laches in not diligently pursuing the matter * * yg

STA EA ny OR eI

A35

In that case only a five-year period elapsed between the

breakoff with the successor defendant and the filing of

the case.

The most recent case—and the authority based on which

this Court most relies in deciding this case—is Baker v.

Whitewater, 430 F. 2d 1008 (7th Cir., 1970). Several

things about this case are worth noting before getting into

it. One thing is the strong reliance on the Sixth Circuit

decision in General Electric v. Sciaky, supra. Another is

certiorari was denied. The third—the Supreme Court in

Blonder-Tongue, at page 335, refers to it, apparently with

approval in connection with its rejection of one of the

reasons advanced by the patentee in this case for explana-

tion of the time interval, i.e., “the expense of litigating.”

In Baker Manufacturing, the action was filed in 1965.

The District Court rejected the defense of laches. The

Seventh Circuit, as had the Sixth Circuit in General Elec-

tric, referred to “the firmly established rule that a decision

on such issue is addressed to the sound discretion of the

trial judge, which will not be disturbed * * * unless it is so

clearly wrong as to amount to an abuse of discretion.”

The language is not particularly encouraging in its factual

context, since the Seventh Circuit reversed on just that

ground. The interval in that case between notice of

infringement and suit was only nine years. The Seventh ;

Circuit said that in the light of such an interval “the

burden is on the patentee to excuse an unreasonable delay.

* * * there is a presumption that the alleged infringer has

been damaged * * *.” The Court continued:

““‘Although not bound by statutes of limitations :

relating to actions at law, courts of equity will gen- >

erally draw analogies to them. In patent cases, the :

“analogous” period is six years. [35 U. S. C. Sec. 286.]

After this length of time, the delay is presumed to

have injured defendant, unless the contrary can be

shown by plaintiff. * * * Reasonable diligence is a

Ne SO IEA pO eH NM eR SER aN ens ge

asa

A36

uisite to invoking the court’s aid in the assertion

of one’s rights. * * *

“‘In the present case we find an extended period

of apparent inactivity by plaintiff, running well beyond

the analogous statutory period. The burden is thus

cast upon plaintiff to justify the long delay.

“And—

“Nor has plaintiff satisfactorily explained this

absence of diligence. In fact the only excuse offered

is an alleged lack of funds. By the weight of authority,

lack of funds is no excuse for delay in bringing suit.’

s**t

“‘When delay in prosecuting a claim is so un-

usual as to carry with it the appearance of being

unreasonable, as in this case, there devolves upon a

plaintiff the burden of disclosing the impediments to

an earlier action; for showing, if ignorant of his rights,

how he had remained in ignorance so long; and of

revealing how and when he first came to a knowledge

of the matters on which he relies in his bill for relief.’

“* * * quoted from Westco-Chippewa (page 783):

“The evidence does not disclose any excuse justi-

fying this long delay. No case is an exact precedent

for another because the facts in no two cases are

exactly alike, but a uniform principle runs through all

the cases. They proceed on the theory that the plain-

tiff knows his rights and has had ample opportunity to

establish them in the proper forum; that, because of

delay, the defendant has good reason to think that

the plaintiff believes his asserted rights to be worthless

or that he has abandoned them. * * *

“‘The question of laches then assumes the aspect

of the plaintiff having stood by and having done

nothing to protect its rights for seven years while the

defendant was building up a business, which it thought

was legitimate, and spending money in constructing a

large plant.’ * * *

“Mere delay does not constitute laches but when

deferment of action to enforce claimed rights is pro-

;

NEE Se Ra i IO AEP IRS AO tat it IE = |

A37

longed and inexcusable and operates to defendant's

material prejudice, we find laches to be an effectual

bar, with the burden of satisfactory explanation de-

volving upon the plaintiff. Rome Grader & Machinery

Corp. v. J. D. Adams Mfg. Co., 7 Cir., 1943, 135

F. 2d 617, 619. Laches is an equitable doctrine not

fixed by any unyielding measure, but to be determined

in each case under its factual situation, and allowable

“ ‘where the enforcement of the asserted right would

work injustice.” Potash Co. of America v. Inter-

national Minerals & Chemical Corp., 10 Cir., 1954,

243 F. 28 833, 155 * * *.

“In our view, this reasoning erroneously places the

burden on Whitewater, the alleged infringer, to take

affirmative action which would rescue Baker from its

inexcusable neglect over a period of nine years, con-

trary to the decisions of this court previously discussed.

An alleged infringer acting in good faith is under no

obligation, so far as we are aware, to take affirmative

action relative to the alleged infringement. Of course,

it can proceed under the Federal Declaratory Judg-

ment Act, Title 28 U.S.C. A. Sec. 2201, for an adjudi-

cation of its rights, but this court has held that it is not

obligated to pursue this remedy. Brennan v. Hawley

Products Co., 7 Cir., 182 F. 2d 945, 949. The fact

that Baker did not suggest that it was abandoning its

claim of infringement is irrelevant. The important fact

is that at no time did it notify Whitewater in any

manner that it was pressing its claim. * * *

“As an additional excuse, not mentioned by the

district court, Baker on brief suggests that early in

1962 it was confronted with the immediate obligation

of defending two patent suits involving a very large

potential liability. It argues that due to the pressure

of this litigation it was unable to handle other patent

litigation until 1965, when the instant suit was filed.

We think this excuse without merit. It does not ex-

plain why Baker remained silent from 1957 to 1962,

a five-year period. It is unrealistic to believe that

Baker became so involved in other litigation that it

could not file a suit against Whitewater for infringe-

A38

ment and depend upon a court to give it such time to

prepare and try its case as circumstances might justify.

It certainly could have found time in 1962, as it could

have in any of the preceding five years, to notify

Whitewater that it was pressing its claim of infringe-

ment.”

Continental Coatings Corp. v. Metco, 325 F. Supp. 165

(Ill., 1971). In that case a summary judgment based on

the laches issue was granted. The patent issued in 1959.

The suit against the defendant was filed in 1968—-seven

years after notice of infringement. The trial court em-

phasized that while there was a period of notices and

renotices and license negotiation that, even accepting plain-

tiff's time table, the initial program of notice and lack of

perseverance was followed by a period of two or three

years of total silence until the suit was filed. The Court

said:

“Plaintiff has not satisfactorily met the burden to

assert a reasonable excuse for this delay. * * * the

initial delay was made to allow sufficient time to

achieve some commercial success. Several years later,

after the mass mailing campaign failed to produce

licensees, another decision to delay was made on

economic grounds * * *

“However, just as it was unreasonable for Baker

to delay pursuing his claimed patent rights until litiga-

tion would be worthwhile, so was it unreasonable for

IIT and Continental to have delayed their suit. * * *

plaintiff has not asserted that it was without means to

finance a lawsuit.

“* * * such unexcused delay raises a presumption

that an alleged infringer has been injured. * * * The

operating theory is that the alleged infringer, having

good reason to believe the patentee abandoned or at

least considered worthless its claims, worked to build

up his business. * * * This presumption has not been

met, much less overcome, by plaintiff.”

eit Aedes

A39

Laches is a defense in this type of case: When the interval

between notice of infringement and the filing of suit exceeds

the six-year statutory period, not only does the laches flag go up,

but it is accompanied by a presumption, and at least the burden

of going forward to satisfactorily explain a ten-year delay after

notice is on the patentee. The plaintiff points to the Chicago

Metalic litigation. If the defendant or its predecessor had agreed

that it was a good idea to delay pending determination of

validity there, that would probably be a pretty good reason—not

for a delay to 1967, but only for a delay until after the Seventh

Circuit opinion on validity in 1963. Furthermore, defendant's

predecessor made no such agreement. It listened and the plain-

tiff assumed. The fact is there was no agreement. If there had

been, these corporate entities and their counsel were fully capable

of writing an appropriate one-page letter. No other explanation

is advanced by the delaying plaintiff.

We are aware that this Court, in the early stages of this litiga-

tion, considered the reason advanced as a good one for adding

a party to the litigation. That is a different question from the

one being decided now. Nor is reliance on the “presumption”

or “going forward” the sole ground for sustaining the laches

defense. Both the predecessor of the defendant and Lockwood,

II, expended funds, capital wise and otherwise, in building up

the claimed infringing business. There is significant loss or

damage otherwise directly involving Lockwood, II, in at least

two respects.

First—The infringement claims of plaintiff, if they had really

not been abandoned and/or if they had been seasonably asserted,

would certainly have led to a disclosure in the negotiations

between Lockwood, I, and Lockwood, II. The officials of Lock-

wood, I, obviously relied on the marked silence of plaintiff

after the Seventh Circuit victory in 1963 in not including the

old (1956) infringement notice when, in 1965, Lockwood, I,

was called upon to disclose “proceedings threatened” to Lock-

wood, II, and did not include this abandoned 1956 notice. That

Brus enemas,

A40

deprived Lockwood, II, of a couple of things—a decision

whether to buy or not with knowledge of the threat, and/or a

decision to continue the claimed infringing process if they did

buy. Those were substantial losses and no greater tribute to that

statement is necessary than this case.

Secondly—if the plaintiff were victorious in this case, who will

say whether or not, under all the facts, the 1956 infringement

notice and the failure to disclose is or is not conclusorily a viola-

tion of the warranty in the Lockwood sales contract that “nor

are there to the knowledge of the seller any * * * actions or

proceedings threatened against it, other than the following * * *."

That is another lawsuit just as involved as this one and just

as detrimental.

The plaintiff claims that the long-term, non-negotiable note is

a “cover” for the defendant. That is another lawsuit. Under the

sales contract (Exhibit 69) the seller, speaking generally, agreed

to discharge all of its obligations incurred prior to the turnover

date and waranted that it would hold harmless the purchaser

against liabilities “of the seller.” The buyer is on its own and

we look with difficulty and with no success for anything in the

contractual arrangement which would authorize the buyer to

deduct from its note what it would have to pay the plaintiff for

a liability resulting from action of the buyer—the defendant.

Any such attempted deduction would certainly be another

lawsuit.

Nor does this Court regard the tacking problem as a very

serious one for two reasons. Under all the circumstances, the

delay vis-a-vis Lockwood, II, while it only involved a couple of

years, was and is significant under all the facts in this case.

Secondly, there never has been any magic in corporate entity.

Insofar as this case is concerned, Lockwood, I, and Lockwood,

II, are as one, as the plaintiff really regarded them in its obvious

and complete failure to even pay any attention to the transfer.

From an infringement, laches, discretion, or good conscience

. WA atte Paes Metal eal 0th talline eh i swe Reba

SN ee ie? wD

A4l

point of view, the insertion of “corporate entity” into this con-

troversy is not in the ends of justice. It is form-over-substance.

For the reasons indicated above, the complaint is dismissed

solely on the laches defense.

Costs are always a matter of discretion. Clearly this is not

a case in which attorneys fees should be awarded either party,

since one party has won every of numerous battles, except the

war, at this level. In addition, and on the other side of the coin,

there has been a lack of selectivity of issues which, in this Court’s

humble judgment, has substantially protracted this case. Under.

all the circumstances, costs will not be awarded to either party,

in either the attorney fee sense or the ordinary sense.

/s/ Trmotuy R. HoGAN

United States District Judge

A42

PLAINTIFF'S EXHIBIT 3.

IN THE UNITED STATES COURT OF APPEALS

For the Seventh Circuit.

No. 13770 September Term, 1962 April Session, 1963

Tue Exco Propucts Company, INC.,

Plaintiff-Appellant, | Appeal from the

_— United States Dis-

vs. q trict Court for the

North District

CHICAGO METALLIC MANUFACTURING of Sinois. Eastern

COMPANY, Division.

Defendant-Appellee. |

August 16, 1963.

Before DuFFy, KNocu, and KILEY, Circuit Judges.

Knocu, Circuit Judge. Plaintiff, The Ekco Products Com-

pany, Inc. ( hereinafter called “Ekco”), brought this action to

recover damages and injunctive relief for alleged infringement

by defendant, Chicago Metallic Manufacturing Company (here-

inafter called “Chicago Metallic”), of four United States pat-

ents owned by plaintiff. These patents are:

(a) No. 2,687,994, dated August 31, 1954, entitled

“Method of Forming an Oxide Coating on Tin.”

(b) No. 2,724,526, dated November 22, 1955, entitled

“Tin Plate Baking Pan.”

“Composite Metal and Articles Thereof.”

(d) No. 2,801,604, dated August 6, 1957, entitled

“Processed Drawn Implement.”

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A43

They will be referred to hereinafter respectively as the 994, 526,

817 and 604 patents.

Defendant denied infringement of the first three patents and

pleaded invalidity of all four. After trial by the District Court

without a jury, judgment was rendered for defendant, holding

all the patents invalid and the first three not infringed. This

appeal followed.

The history of commercial bread baking discloses an accepted

practice of many years known as “burning in” or “burning out”

whereby the highly reflective tin-plated steel of the pan is dark-

ened so that it will absorb sufficient heat for proper baking. This

practice was not uniformly successful and entailed loss of time

and labor, tying up equipment in non-productive work.

During the 1940's plaintiff continued its search for a solution.

Dr. John J. Russell, one of the patentees in each of the patents

in suit, was plaintiffs chief chemist during the period from 1945

to 1947, when he became plaintiff's Director of Research. His

notes on the events leading to the subject matter of the basic

patent in suit, 994, are part of the record before us. Plaintiff

had tried various methods and had achieved some success, but

only by the expensive method of hand rubbing the tin-plate to

roughen its surface prior to passing the pans through the ovens.

Chicago Metallic contends that it did solve the problem in

1947 with its “No-Burn” pan which it asserts it sold to the fullest

extent of its production capacity until the introduction of glaz-

ing about the end of 1949.

Chicago Metallic’s process consisted of painting the outer

surfaces of the pan and then heating it for one to two hours.

While this coating did not permanently darken the pan, Chicago

Metallic asserts it permitted immediate use of the pan while

gradual “burn-in” conditioning occurred as the painted coating

slowly wore off. Chicago Metallic argues that plaintiffs own

“Redi-Bake” pan infringed Chicago Metallic’s patented “No-

Burn” pans.

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Late in the 1940's the use of a release coating or “glazing”

replaced the traditional grease means of insuring that the baked

loaf would readily separate from the pan. The plastic “glaze”

must be replaced from time to time. The chemical used to strip

away old glaze also stripped away the “No-Burn” coating.

On February 7, 1950, John Crombie, a representative of

United States Steel, visited both Ekco and Chicago Metallic to

show their personnel a sample of anodically oxidized tin-plate,

and certain literature (of British publication) of the Interna-

tional Tin Research Council. Mr. Crombie did not testify at the

trial, but we have his deposition which is a part of the evidence

adduced at the trial by Chicago Metallic. Mr. Crombie did not

himself make, direct, or witness the making of the sample. He

had referred the United States Steel Research Laboratory to the

publications. Mr. Crombie described the sample as “not exactly

black, it was kind of a dark gray and it was very close to

the appearance of a bread pan when it was burned out in the

old fashioned way of doing it.”

Mr. Crombie made no suggestions for further heating. He

stated that British patents were pending. He took both the

sample and the literature away with him.

The scientific world had known about anodic oxidation of tin

and other metals, but nobody evidently had used the process to

pre-darken baking pans.

According to Dr. Russell's contemporaneous notes the litera-

ture exhibited by Mr. Crombie was the work called in this

litigation “the Kerr-Macnaughtan paper.” The British Patent

No. 486,752 carries Serial No. 3756 of 1936, the same serial

number referred to in the Kerr-Macnaughtan paper which dis-

closed the procedure mentioned by Mr. Crombie. All this ma-

terial was before the Patent Office when the patents in suit were

issued. This fact supports the presumption of validity normally

arising from grant of a patent by the Patent Office. Title 35,

U. S. C. § 282; Hazeltine Research v. Dage Electric Co., Inc.,

7 Cir., 1959, 271 F. 2d 218, 224; Amp, Inc. v. Vaco Products

Co., 7 Cir. 1960, 280 F. 2d 518, 521, cert. den. 364 U. S. 921.

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The sample which Mr. Crombie exhibited is described in Dr.

Russell’s notes as black. In the course of subsequent experi-

ments, Dr. Russell observed that heating a sheet of tin-plate

darkened by the anodic process of Kerr-Macnaughtan at a tem-

perature close to the melting point of tin changed the black film

thereby acquired (which the British Patent No. 486,752 stated

“cannot be dyed or otherwise changed in color”) into an olive

green. The Kerr-Macnaughtan paper entitled “The Production

of Black Anodic Coatings on Tin and Tin Alloys” discusses an

intense blue-black film on tin articles adaptable for decorative

purposes. The disclosure made by Mr. Crombie is the disclosure

of this Kerr-Macnaughtan paper. British Patent 486,752 also

discloses a process for obtaining a black or blue-black film

which, as previously indicated, “cannot be dyed or otherwise

changed in color.” Nobody suggests that the blue-black film of

Kerr-Macnaughtan is a satisfactory coating for baking pans. In

contrast to the black film which can be scratched and which

wears off in service, the converted olive green surface obtained

by Ekco’s heating step is permanent, adherent, uniform, highly

abrasion resistant, and possesses the desired heat-absorbing

characteristics of a bread baking pan which needs no “burning-

in.” Ekco thus developed its two-step process described by Ekco

as:

The basic patent in suit covers a simple two-step process.

The first step is the forming of a blackish anodic oxide coat-

ing on a tin article, and was admittedly old. This blackish

coating proved to be highly unstable and was never used

commercially on baked pans. .

The second step of Ekco’s process is the converting of

this unstable blackish coating by heating under prescribed

conditions to a desirably stable, tenacious, highly-resistant

coating. The remarkable improvement in the characteristics

of the coating was accompanied by a change in the color

from blackish to olive-green.

A46

Ekco began commercial use of its new process under the

trade name “Bake-Prep” early in 1950 (about March) with

prompt and widespread acceptance and commercial success,

which must be attributed to the process itself as there is no

evidence that any unusual advertising or other means was used.

Chicago Metallic argues (and the District Court agreed) that

the long-felt want for pans which could be used without pre-

liminary “burning-in” allegedly satisfied by Ekco’s product, was

in fact already satisfied by Chicago Metallic’s “No-Burn” pans;

that a short-duration want for pre-darkened pans which could

successfully withstand stripping of glaze arose in 1949 and was

shortly satisfied by John Crombie’s concept which he passed on

to the entire baking-pan industry.

We are not required to accept the findings of the District

Court if they are unsupported by the evidence or clearly errone-

ous. Federal Rules of Civil Procedure, Rule 52(a). Copease

Mfg. Co. v. American Photocopy Equipment Co., 7 Cir., 1961,

rehrg. den. 1962, 298 F. 2d 772, 781.

Experienced, expert baker witnesses, for both parties, agreed

that Ekco’s “Bake-Prep” (or the accused device of Chicago

Metallic) provided the solution to a long felt want in commercial

baking. Richard J. Livingston, Chicago Metallic’s expert baker

witness, described cleaning pans during the pre-glaze days when

grease had to be used. He testified that bakers were looking for

a detergent which would take the grease off without taking the

metal and the “burned-in” film off as well. In 1960, after this

suit had been filed, Chicago Metallic experimented with another

painted coating which proved a failure and was withdrawn from

the market.

The presumption of validity arising from grant of the patent

is strengthened by a showing that the invention filled a long

felt want. O’Brien v. O'Brien, 7 Cir., 1953, 202 F. 2d 254,

256.

In September, 1950, Chicago Metallic announced its accused

device “Sure Bake” pans, which are made by a two-step process

CON a a ye

A47

charged to infringe Ekco’s patents in suit. ° Chicago Metallic’s

position is that Dr. Russell’s research,

* * * on which the patents in suit are based, consisted

entirely of (a) procedures taught to Russell by John

Crombie, plus (b) a heating step, undertaken for conven-

tional reasons, that produced the conventional result taught

by prior literature.

Chicago Metallic attributes Ekco’s earlier manufacture of the

new pans to two factors: (1) Ekco had entered the glazing field

in the fall of 1949 and by February, 1950, was already con-

cerned with the attendant problems; and (2) Ekco was under

notice from Chicago Metallic that its “Redi-Bake” pans in-

fringed Chicago Metallic’s “No-Burn” patent.

Chicago Metallic did not begin glazing its pans until late in

May, 1950; hence Chicago Metallic asserts it had no need to

make its own adaptation of the procedures suggested by Mr.

Crombie until it, in turn, encountered glazing problems.

Chicago Metallic contends, and the District Judge so found,

that the claims of the basic patent 994 were anticipated by the

Crombie-Kerr-Macnaughtan prior art, and that the heating step

lacked invention. It is asserted that Ekco’s second step was a

mere conventional step, an inevitable corollary of Mr. Crombie’s

basic concept, and that it was a matter of mere common sense

to heat a baking pan, particularly in the light of prior knowledge

respecting heating oxide coatings to stabilize them.

The second step does now seem simple, natural and obvious,

but its apparent simplicity should not blind us to its merits.

Shumaker v. Gem Mfg. Co., 7 Cir., 1962, 311 F. 2d 273,

275-6. In June, 1950, it was evidently not obvious. When

Mr. Crombie called on Ekco he was accompanied by Mr.

J. M. Wood, also of United States Steel, who was present and

saw the exhibit of the black sample shown to Ekco. Yet even

after Ekco’s pan had been introduced commercially, a memo-

randum drawn by Mr. Wood on June 6, 1950, reads:

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A48

We have subsequently learned that Ekco has developed

a rapid oxidizing technique which they are currently using

on bread pans prior to glazing. Since Ekco is attempting

to patent their process, they are secretive concerning the

‘details; however, we have seen the finished pans which

carry a very uniform tan appearance. Dr. Russell has

promised to acquaint us with all details regarding this

treatment when conditions are suitable.

The same day, in another memorandum, Mr. Wood states of

Chicago Metallic, which also knew of the Crombie-Kerr-

Macnaughtan disclosures, that:

* * * this customer had expressed no interest in the Kerr-

McNaughton treatment until just recently. They exhibited

a pan treated with Ekco’s new process but were not aware

of the details as to how the color was obtained.

Evidently, Chicago Metallic was interested in the process but

was unable to deduce it solely with the aid of the prior art

and the generally known scientific principles to which it now

invites our attention. The presumption of validity of a patent

is strengthened by the unsuccessful efforts of others laboring

in the same field. Charles Peckat Mfg. Co. V. Jacobs, 7 Cir.,

1949, 178 F. 2d 794, 801, and cases therein cited.

It is also significant that in advertising in Bakers Weekly,

published as late as May 29, 1950, Chicago Metallic warned

against use of chemically treated pans, stating that chemical

treatment resulted in a finish which was not as wear resistant

as the true oxide gradually produced by oven heat. Chicago

Metallic’s skepticism supports Ekco’s contention that its process

was not obvious. McKee v. Graton & Knight Co., 4 Cir.,

1937, 87 F. 2d 262, 264.

The wide-spread success of the new process is not questioned.

After adopting it, Chicago Metallic discontinued other methods

or pretreating bright tin-plate baking pans.

Our attention is invited to the Kerr paper “Anodic Films

on Tin in Sodium Hydroxide Solutions (1938)” which was

A49

not before the Patent Office when the patents in suit were issued.

We have studied this document which discusses electroplating

or electro-deposition of tin, and which reports on various tests

made. It deals principally with yellow and brown films formed

during electroplating. We cannot agree that it is closer to the

basic 994 patent than the file wrapper references which were

before the Patent Office. There is no suggestion even that it is

desirable to form a heat-absorbing tin oxide coating on tin

articles. The Kerr article talks of removing the yellow or brown

film from the tin by cathodic treatment.

There was a long felt need. Others in the field had sought

to fill it. The first step—anodic oxidation to form a black film

was known. There was no prior art suggestion of the second

step—heating the tin coated with anodic film to convert the

anodic oxide film to green oxide of tin with all its superior

features of stability, tenacity and high resistance. Ekco’s in-

vention met prompt recognition and adoption as a solution.

The patent is not vague and indefinite, as charged by Chicago

Metallic. The heating step is defined in specific degrees. The

length of time is defined by the color change. Anyone skilled

in the art may follow the process with successful results. Binks

Mfg. Co. v. Ransburg Electro-Coating Corp., 7 Cir., 1960,

281 F. 2d 252, 256-7, cert. dismissed 366 U. S. 211. We must

conclude that the District Court’s findings of invalidity of the

basic patent 994 were clearly erroneous.

With respect to infringement of the basic patent 994, Chicago

Metallic argues that its teaching is limited to anodic oxidation

of tin articles in acid electrolytic baths or in midly alkaline elec-

trolytic baths with pH not exceeding a value in the neighbor-

hood of 8. The District Court found that Chicago Metallic’s

anodic oxidation was conducted in a highly alkaline bath of

pH 10, 100 times as alkaline as the most alkaline bath taught

in the basic 994 patent; that major ingredients of Chicago

Metallic’s alkaline bath were sodium hydroxide and sodium

dichromate, neither of which was mentioned in the patents in

AS50

suit. The District Court therefore concluded that Chicago

Metallic had not infringed the basic patent 994.

However, Ekco never contended that formation of a black

anodic coating was a novel feature; nor is this a case of file

wrapper estoppel. Nevertheless, the basic patent 994 does state

that successful results have been obtained under alkaline condi-

tions. We may not dispose of the question of infringement

merely by comparing the commercial processes of the respec-

tive parties, particularly with respect to the first step. Chicago

Metallic cannot avoid infringement by varying the details of the

apparatus by which it makes use of the disclosure patent.

Smith v. Snow (1935), 294 U. S. 1, 20. We must consider

the disclosure of the patent in suit. The record does clearly

indicate that Chicago Metallic follows Ekco’s novel second

step, heating the black anodic oxide to convert it to green oxide

of tin.

The District Court held the 526 patent invalid on findings

of fact that (1) the claims “read” on a well burned-in baking

pan of the prior art in the same manner and sense as on a bak-

ing pan oxidized by the anodic process, (2) that the numerical

limitations in the claims relative to layer thickness do not cor-

respond to any distinctive result or function—all that is required

being a layer of free tin “thick enough to provide effective re-

sistance to corrosion;” and (3) the patent was granted only

after the Patent Office examiners had been assured, possibly in

good faith, but in error, that oxide film on burned-in pans of

the prior art was not olive green in color and of “very poor

adherence.”

Our search of the record does not reveal support for these

findings. On the contrary the testimony did indicate that

normal burn-in procedures increase the thickness of the outer

layer of darkened tin oxide and the inner layer of iron-tin

alloy at the expense of the intermediate layer of free metallic

tin which is necessary to resist corrosion, and that Ekco’s basic

two-step process provides a relatively thick outer layer while

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restricting the growth of the inner layer. This structural com-

bination (claim 2 of the 526 patent) is not revealed in the

prior art.

The original thickness of the iron-tin alloy layer in Chicago

Metallic’s accused pans is greater than that described in the

526 patent, but that thickness is controlled by the steel mill from

which Chicago Metallic purchases its tin-plate. Chicago Metal-

lic’s pans otherwise respond identically to the combination of

claim 2 of the 526 patent and embody the substance of the

invention. The claim must be construed to cover the actual

invention and may not be limited by extraneous remarks in

argument unaccompanied by actual amendment of the claim.

Bassick Co. v. Faultless Caster Corp., 7 Cir., 1939, 105 F. 2d

228, 231. With further respect to the issue of infringement,

the District Court relied on the description in the 526 claims

of an “opaque” oxide coating and the fact that the coating on

Chicago Metallic’s pans was allegedly transparent. The testi-

mony on this point, however, indicates that the film was found

to be transparent after it was stripped off the pan. We are

satisfied from our reading of the claims that the use of the word

“opaque,” there refers to the outer oxide layer on the pan.

The 817 patent discloses application of a glaze release film

to the anodic coating prior to the second heating step, so that

the second heating conversion step simultaneously cures the

glaze and converts the anodic oxide to green oxide of tin, thus

effecting both economy and efficiency. The parties stipulated

that during production Chicago Metallic does deposit glaze on

an oxide layer on some of its pans and during later heating cures

the glaze and converts the anodic layer. Imperfect practice

of the patented process does not avoid infringement. Colgate-

Palmolive-Peet Co. v. Lever Bros. Co., 7 Cir., 1937, 90 F. 2d

178, 194, cert. den. 302 U. S. 729. The specific language of

the patent itself contradicts the findings as to the teaching of

patent 817.

AS52

The 604 patent defines a sequence of steps whereby scratches,

or draw marks, obtained after anodic oxidation and during a

metal deforming operation, unexpectedly disappear during the

last step of subjecting the drawn implement to the elevated tem-

perature for converting the anodic oxide of tin. Chicago

Metallic does not deny that it practices the steps of the claimed

process.

Again, we are unable to discern in the record before us any

support for the finding that the steps recited in the claims in

suit of patents 817 and 604 are old, yielding no new result.

The findings concerning the three derivative patents, 526,

817 and 604, which are only briefly mentioned by the District

Court (apparently because of the decision concerning the basic

994 patent) are extremely limited. The judgment of the Dis-

trict Court respecting these three derivative patents is reversed,

and that portion of this case is remanded for further considera-

tion in the light of our comments above.

The judgment respecting invalidity and non-infringement

of the basic 994 patent is reversed.

The cause is remanded for further proceedings consistent

with this opinion.

Other arguments advanced by the parties not specifically

mentioned in this opinion have been considered with care.

They do not alter the conclusions herein expressed.

REVERSED and REMANDED

WITH INSTRUCTIONS.

A true Copy:

Teste:

(Seal)

/s/ THOMAS F. STRUBBE, Chief Deputy

Clerk of the United States Court of

Appeals for the Seventh Circuit.

122 ee eet eR hel CET

AS3

IN THE UNITED STATES CouRT OF APPEALS

for the Seventh Circuit

SEPTEMBER TERM, 1964—ApPRIL SESSION, 1965

No. 14859 i

THE Ekco Propucts Company, INCc., Appeal from the United

Plaintiff-Appellee, | — States District Court

vs. for the Northern Dis-

CHICAGO METALLIC MANuFAcTuRING | _ ‘ict of Illinois, East-

ComPANY, ern Division.

Defendant-A ppellant. ;

June 17, 1965

Before DurFy and KNocu, Circuit Judges, and GRANT, Dis-

trict Judge.

DuFFyY, Circuit Judge. The instant suit involves the alleged

infringement of United States Patent No. 2,724,526 dated No-

vember 22, 1955, and entitled “Tin Plate Baking Pan.”

Suit was originally brought by plaintiff for alleged infringe-

ments by defendant of four patents, namely, (a) No. 2,687,994,

dated August 31, 1954, entitled “Method of Forming an Oxide

Coating on Tin”; (b) the patent in the instant case; (c) No.

2,773,817, dated December 11, 1956, entitled “Composite

Metal and Articles Thereof’, and (d) No. 2,801,604, dated

August 6, 1957, entitled “Processed Drawn Implement.” For

convenience and brevity, these patents will be referred to as

"994, ’526, ’817 and °604, respectively.

The District Court held that all four patents were invalid and

that Patents "994, 526 and ’817 were not infringed. An appeal

was taken. We reversed the findings of invalidity as to the basic

patent, 994, holding the patent was valid and infringed. Ekco

Products Co. v. Chicago Metallic Mig. Co., 321 F. 2d 550.

We also reversed the judgment as to the three derivative

patents, and remanded them to the District Court for further

consideration in view of the comments made in our opinion. No

judgment was rendered in this Court with reference to the merits

of the three derivative patents.

After remand, the parties agreed to a consent judgment which

was entered on March 16, 1964, adjudging that patents "817 and

°604 were valid and infringed, but awarding no damages thereon.

The District Court believed there was no infringement of the

patent in suit by defendant, but held that the remarks made in

our previous opinion left it with no latitude and, therefore, found

that Patent "526 which is involved in this appeal, was valid and

had been infringed. We think the District Court was in error

in this respect. If we had intended to order a judgment that "526

was infringed, we would have said so as we did with the "994

patent. We intended the District Court should make an inde-

pendent judicial determination on this point.

The question now before us on this appeal is whether Patent

°526 has been infringed by defendant's baking pans. That, in

turn, depends on the legal scope of the claims in Patent "526.

The structure of defendant's baking pans is not in issue.

The principal patent, "994, was directed to a method of coat-

ing a tin surface with an olive-green oxide. We held that method

was new and patentable. The instant patent does not relate to a

method, but rather to a product.

The record discloses that Ekco tried for years to secure such a

product patent. Despite four years of vigorous prosecution, in-

cluding several interviews with the Examiner, the application

stood finally rejected by the Patent Office. Until the final amend-

ment. Ekco had claimed its product broadly as a baking pan

having a steel base, an overlying layer of iron-tin alloy, a further

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layer of metallic tin, and a surface layer of olive-green tin oxide.

There had been no claim that called for any specific thickness of

iron-tin alloy. After the final rejection, Ekco cancelled its pre-

vious claims and substituted two claims which were eventually

granted in the patent. Therein, the patent monopoly was limited

to pans in which the thickness of the iron-tin alloy was “approxi-

mately 10 to 15 micro-inches.”

It is clear that the patent in suit issued only after Ekco had

substituted narrower claims which included an explicit narrow

range for the thickness of the alloy. It is, of course, fundamental,

that Ekco may not recapture by resort to the doctrine of equiva-

lents or otherwise, any part of what it surrendered by its amend-

ment to its claims.

We recognize that in a situation such as we have before us, a

file wrapper estoppel arises only through amendment and can-

cellation of claims to overcome rejection. We have held that the

Court will look no further than to learn whether the patentee

was forced to introduce such element to avoid rejection. Taylor-

Reed Corp. v. Mennen Food Products, Inc., 7 Cir., 324 F. 2d

108, 111.

The rule that governs the question before us is stated in /. T. S.

Rubber Co. v. Essex Rubber Co., 272 U. S. 429, at page 443:

“It is well settled that where an applicant for a patent to cover a

new combination is compelled by the rejection of his application

by the Patent Office to narrow his claim by the introduction of a

new element, he cannot after the issue of the patent broaden his

claim by dropping the element which he was compelled to in-

clude in order to secure his patent.”

Furthermore, a patentee that has narrowed his claim after

rejection to secure allowance, is held strictly to the letter of the

limited claims granted to him; by his amendment he recognizes

the difference between the old claims and the new, and proclaims

“his abandonment of all that is embraced in that difference.”

Union Carbide & Carbon Corp. v. Graver Tank & Mfg. Co., 7

Cir., 196 F. 2d 103, 107.

AS6

We think that the plaintiff's claims cannot be interpreted to

cover baking pans with thicker alloy layers than that recited in

its claims, because the proceedings before the Patent Office

coated by the anodic method of the "994 patent and those oxide-

coated by the prior art “burning-in” method, was a thicker alloy

layer in the burned-in pans. In truth, nothing in the "526 claims

distinguishes the patented invention from the burned-in pans of

the prior art except the recitation requiring the alloy layer to

have a thickness of “approximately 10 or 15 micro-inches.”

Plaintiff urges that our holding in Welsh Co. v. Chernivsky,

342 F. 2d 586, is controlling. However, in Welsh, the patentee

by amendment added a new element. We held that equivalents

were available to the patentee where the prior art showed no

single structure having all the claimed elements. By contrast,

here, the prior art burned-in pan was a structure wherein all of

the elements of the combination were present—the steel base, the

alloy layer, the tin layer and the oxide layer. It cannot be dis-

puted that the alloy layer was already included as an element in

rejected application claims 28 and 29.

When claims 28 and 29 were replaced with claims 31 and 32

which became claims 1 and 2 of the patent, the thickness of the

alloy layer was expressly delimited.

Holding as we do that defendant did not infringe Patent in

suit, No. 2,724,526, the judgment of the District Court to the

contrary must be and is

REVERSED.

A true Copy:

Teste:

/s/ THomas F. StruBBE, Chief Deputy

Clerk of the United States Court of

Appeals for the Seventh Circuit.

(Seal)

BAI RO 6 ne a ame —o

AS7

PLAINTIFF'S EXHIBIT NO. 109.

IN THE UNITED STATES District CouRT

For the Northern District of Illinois,

THE Exco Propucts CoMPANY, INC., )

Plaintiff,

vs. Civil Action

CHICAGO METALLIC MANUFACTURING No. 58 C 849

COMPANY,

Defendant. }

FINAL ORDER.

The parties having compromised and settled their differences

pursuant to agreement, the Court being advised in the premises,

the accounting and all further proceedings herein are hereby

terminated in conformity with the Judgment of March 16, 1964

and in satisfaction of paragraph 9 thereof, each party to bear

its own costs.

ENTER:

/s/ J. S. Perry,

United States District Judge.

Dated: Sept. 19, 1966.

Entry of the above order is agreed to and stipulated by the

Parties.

/s/ D. D. ALLEGRETTI,

D. D. Allegretti,

Attorney for Plaintiff.

/s/ DuGaLD S. McDouGALL,

Dugald S. McDougall,

Attorney for Defendant.

AS8

PROOF OF SERVICE.

Copies of the foregoing Petition for Writ of Certiorari and

i were served airmail, first class on Truman A. Herron,

Wood, Herron & Evans, 2700 Carew Tower, Cincinnati, Ohio

45202, attorneys for Respondent, this 23rd day of November,

1973.

GEORGE P. MCANDREWS,

Attorney for Petitioner.

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