Opposition Brief — Nashua Corp. v. Ricoh Co.

‘No. 98-1872 WN 21 1999

CLERK

IN THE

Suprene Court of the nited States

>

NASHUA CORPORATION,

Petitioner,

—_V—

RICOH COMPANY, LTD., RICOH CORPORATION

and RICOH ELECTRONICS, INC.,

Respondents.

ON PETITION FOR A WRIT OF CERTIORARI TO THE UNITED STATES

COURT OF APPEALS FOR THE FEDERAL CIRCUIT

RESPONDENTS’ BRIEF IN OPPOSITION

Lawrence B. Friedman

Counsel of Record

Robert T. Greig

Joshua H. Rawson

Joon H. Kim

CLEARY, GOTTLIEB, STEEN & HAMILTON

One Liberty Plaza

New York, New York 10006

(212) 225-2000

Attorneys for Respondents

Ridden

i

QUESTION RESTATED

Whether the United States Court of Appeals for the Federal

Circuit properly construed federal patent law when it applied

35 U.S.C. § 120, governing patents based upon continuation

applications, precisely according to its terms and declined

Nashua’s request that the court take the unprecedented step of

affording to an infringer of a patent based upon a continuation

application the “intervening rights” that Congress has made

available only to qualifying infringers of Section 251 reissue

patents, given that the patent statute does not provide for such

rights with respect to patents based upon continuation appli-

cations issued under Section 120, when neither Congress nor

any court has ever suggested that intervening rights should be

available to infringers of such patents, when it would be bad

public policy to make such protection available to infringers

of such patents, and when, even if this Court were to create

for the first time intervening rights protection for infringers

of such patents, the trial court found as a matter of fact that

Nashua would not qualify for such protection.

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STATEMENT REQUIRED BY RULE 29.6

Respondent Ricoh Company, Ltd. is the corporate parent of

respondent Ricoh Corporation, which is the corporate parent

of respondent Ricoh Electronics, Inc. Respondent Ricoh Com-

pany, Ltd. has issued shares to the public.

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TABLE OF CONTENTS

PAGE

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STATEMENT REQUIRED BY RULE 29.6............ il

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REE GEE PRET EEED vce veccccccevevecvesveceeeeseve 2

STATEMENT OF THE CASE. ..........cccccccccsecess 4

REASONS FOR DENYING THE WRIT............... 11

i a ad bac bkwdeeeecheesectereens os 11

B. Nashua Has Not Satisfied The Requirements

For Obtaining This Court’s Discretionary

een Guus suns eebedeeeueNeaeevenss 13

1. The Federal Circuit’s Decision Does Not

Conflict With Any Relevant Prior Decisions

Of This Court Or Of Other Circuit Courts... 13

2. The Federal Circuit’s Decision Does Not

Raise An Important Question Of Federal

Law That Should Be Settled By This Court . 14

A. Nashua Is Improperly Blurring The

Distinction Between Reissue Patents

And Patents Based Upon Continuation

ihe sidinesud beekn cekueess<n 15

PAGE

B. There Is No Basis For Nashua’s

Argument That Ricoh Acted Improperly

In Obtaining The ’603 Patent........... 18

C. Only Congress Can Change The Law

Pee I bono a awe ccacicdctadies 22

D. There Is No Policy Reason To Change

PRRs acdcincivcercessvartencdetiecins 23

(1) Terminal Disclaimers.............. 23

(ii) File Wrapper Estoppel............. 25

(111) PTO Statement of Reasons for

FD Wan dneveieedatansinncwes« 26

E. Equity Does Not Support Nashua’s

Argument For Intervening Rights ...... 26

SIGs v's 0 Che ccenceddeddientowseconipnedacecased 28

TABLE OF AUTHORITIES

Cases PAGE

Gerber Garment Tech., Inc. v. Lectra Sys., Inc.,

FIG F.26 GES Gee. Coe. EDP) 2c cccccscovcvcevsess 23

In re Bennett, 766 F.2d 524 (Fed. Cir. 1985)

CD GE ic one vendnnenaesbcbeasscseussanesiceeen 16

In re Braithwaite, 379 F.2d 594 (C.C.P.A. 1967)...... 17, 24

In re Eckel, 393 F.2d 848 (C.C.P.A. 1968)......... 16-17, 24

In re Henriksen, 399 F.2d 253 (C.C.P.A. 1968) ....... 16, 23

In re Hogan, 559 F.2d 595 (C.C.P.A. 1977) ........... 15

In re Jentoft, 392 F.2d 633 (C.C.P.A. 1968)....... 17, 24, 26

In re Robeson, 331 F.2d 610 (C.C.P.A. 1964) ......... 24

In re Weiler, 790 F.2d 1576 (Fed. Cir. 1986) .......... 16

Kingsdown Med. Consultants, Ltd. v. Hollister, Inc.,

863 F.2d 867 (Fed. Cir. 1988), cert. denied,

Gt Gilde. SOOe Con heiasscsesssanexs see 14, 19

Ortho Pharmaceutical Corp. v. Smith, 959 F.2d 936

a WIPED vo ode eoulcn nade cud aaaee eeeen ee 24

Quad Environmental Tech. Corp. v. Union Sanitary

Dist., 946 F.2d 870 (Fed. Cir. 1991).............. 17, 24

Texas Instruments, Inc. v. United States Int’! Trade

Comm’n, 871 F.2d 1054 (Fed. Cir. 1989)......... 14, 19

Wayne Gossard Corp. v. Sondra, Inc., 434 F. Supp.

1340 (E.D. Pa. 1977), aff’d, 579 F.2d 41

CO Ga BPE Sno ds dnevakevenscbakecssecenveecnses: 27

vi

PAGE

White v. Fafnir Bearing Co., 263 F. Supp. 788

(D. Conn. 1966), aff'd, 389 F.2d 750

CBG, SOGGE vcd tvecscidcesssiccsierestenees 27

Statutes

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eee SP rere ee ee 13

es Sel Os GUID. nn. 00 0nrendesinceeseccescsseasssununueiens 15

Pub. L. 103-465, Title V, § 533(b)(2), 108 Stat. 4989

CRG, Bi Pe so Sevsanceveccévausescunsiceehendeses 22

Pub. L. 98-622, Title I, § 104(b), 98 Stat. 3385

CO Gi, Ge in vinacdccctacactevasesscassnceenbeas 22

Other Authorities

Manual of Patent Examining Procedure, 804.2

RUPEE +s vivnnsexude veaenecayecesesae eee 24-25

IN THE

Supreme Court of the United States

No. 98-1872

>

NASHUA CORPORATION,

Petitioner,

—against—

RICOH COMPANY, LTD., RICOH CORPORATION

and RICOH ELECTRONICS, INC.,

Respondents.

ON PETITION FOR A WRIT OF CERTIORARI TO THE UNITED STATES

COURT OF APPEALS FOR THE FEDERAL CIRCUIT

>

RESPONDENTS’ BRIEF IN OPPOSITION

Respondents Ricoh Company, Ltd. (“Ricoh Company”),

Ricoh Corporation and Ricoh Electronics, Inc. (collectively,

“Ricoh”), respectfully pray that the Petition by Nashua Cor-

poration (“Nashua”) for a Writ of Certiorari to the United

States Court of Appeals for the Federal Circuit be denied.

OPINION BELOW

The opinion of the United States Court of Appeals for the

Federal Circuit, dated February 18, 1999, is reported at 1999

U.S. App. LEXIS 2672. A copy is annexed to the Petition for

Writ of Certiorari (“Pet.”) at la-14a.'

. Record citations in this brief refer to the appendix to the peti-

tion.

JURISDICTION

Discretionary jurisdiction of this Court to review the Deci-

sion and Judgment of the United States Court of Appeals for

the Federal Circuit rests on 28 U.S.C. § 1254(1).

STATUTES INVOLVED

The petition urges this Court to engraft onto Section 120 of

Title 35 of the United States Code, governing patents based

upon continuation applications (which the patent at issue here

undisputably is), the type of “intervening rights” protection

for infringers of such patents that Congress has made avail-

able only to qualifying infringers of reissue patents (which

the patent at issue here indisputably is not) under Sections

251 and 252 of Title 35. These sections of the federal patent

statute provide as follows:

35 U.S.C. § 120 (patents based upon continuation appli-

cations)

An application for patent for an invention disclosed in

the manner provided by the first paragraph of Sec-

tion 112 of this title in an application previously filed in

the United States, or as provided by Section 363 of this

title, which is filed by an inventor or inventors named in

the previously filed application shall have the same

effect, as to such invention, as though filed on the date of

the prior application, if filed before the patenting or

abandonment of or termination of proceedings on the

first application or on an application similarly entitled to

the benefit of the filing date of the first application and

if it contains or is amended to contain a specific refer-

ence to the earlier filed application.

35 U.S.C. § 251 (reissue patents)

Whenever any patent is, through error without any

deceptive intention, deemed wholly or partly inoperative

or invalid, by reason of a defective specification or

drawing, or by reason of the patentee claiming more or

less than he had a right to claim in the patent, the Com-

missioner shall, on the surrender of such patent and the

payment of the fee required by law, reissue the patent for

the invention disclosed in the original patent, and in

accordance with a new and amended application, reissue

the patent for the invention disclosed in the original

patent, and in accordance with a new and amended appli-

cation, for the unexpired part of the term of the original

patent. No new matter shall be introduced into the appli-

cation for reissue.

* *

No reissued patent shall be granted enlarging the scope

of the claims of the original patent unless applied for

within two years from the grant of the original patent.

35 U.S.C. § 252 (intervening rights with respect to reis-

sue patents)

A reissued patent shall not abridge or affect the right of

any person or that person’s successors in business who,

prior to the grant of a reissue, made, purchased, offered

to sell, or used within the United States, or imported into

the United States, anything patented by the reissued

patent, to continue the use of, to offer to sell, or to sell to

others to be used, offered for sale, or sold, the specific

thing so made, purchased, offered for sale, used, or

imported unless the making, using, offering for sale, or

selling of such thing infringes a valid claim of the reis-

sued patent which was in the original patent. The court

before which such matter is in question may provide for

the continued manufacture, use, offer for sale, or sale of

the thing made, purchased, offered for sale, used or

imported as specified, or for the manufacture, use, offer

for sale, or sale in the United States of which substantial

preparation was made before the grant of the reissue, and

the court may also provide for the continued practice of

any process patented by the reissue that is practiced, or

for the practice of which substantial preparation was

made, before the grant of the reissue, to the extent and

under such terms as the court deems equitable for the

protection of investments made or business commenced

before the grant of the reissue.

(emphasis supplied).

STATEMENT OF THE CASE

This is a patent infringement lawsuit by Ricoh against

Nashua arising from Nashua’s manufacture and sale of

replacement toner cartridges for certain Ricoh photocopiers

which infringe U.S. Patent Number 4,878,603 (the “'603

Patent”), entitled TONER REPLENISHING DEVICE, which

the U.S. Patent and Trademark Office (the “PTO”) issued as

a patent based upon a continuation application pursuant to 35

U.S.C. § 120 on November 7, 1989. The ’603 Patent expires

on April 9, 2004. Ricoh also accused Nashua of infringing a

related and prior patent, U.S. Patent Number 4,611,730 (the

“*730 Patent”), but Ricoh withdrew that claim as unnecessary

and in the face of Nashua’s stated intention to seek that

claim’s dismissal.

As its defenses, Nashua asserted a long list of factual and

legal arguments: (a) that the "603 Patent is not infringed by

the Nashua cartridges; (b) that the "603 Patent is invalid:

(i) for failure to be enabling, (ii) for failure to disclose the

best mode for practicing the described invention, (iii) for con-

taining indefinite claims, (iv) for failing to contain a written

description of the claimed invention, (v) for lacking a sup-

plemental oath sworn by the inventors, and (vi) for obvious-

ness; (c) that Ricoh’s right to any recovery is barred by the

doctrine of equitable estoppel; (d) that Ricoh’s right to dam-

ages is barred by the doctrine of laches; (e) that Ricoh mis-

used the '603 Patent through tying by refusing to sell empty

patented toner cartridges to manufacturers such as Nashua

who wish to refill those cartridges with their own toner and

then resell them; (f) that Ricoh misused the '603 Patent

through its contracts with its authorized dealers of Ricoh

products; and (g) that even if the '603 Patent were validly

issued as a patent based upon a continuation application pur-

suant to 35 U.S.C. § 120, the court should treat it as a reissue

patent under 35 U.S.C. § 251, the court should afford Nashua

the type of “intervening rights” that courts can grant to qual-

ifying infringers of reissue patents pursuant to 35 U.S.C.

§ 252 where equity warrants such relief and, on that basis,

Nashua’s infringement of the 603 Patent should be excused.

After a two week bench trial, the district court issued a 77-

page Memorandum Decision, making detailed factual find-

ings, permanently enjoining Nashua from making, using or

selling the toner cartridges at issue, and scheduling further

proceedings concerning the calculation of damages.? Among

other things, the district court: (a) found that Nashua’s toner

cartridges infringe the '603 Patent, rejecting the claim con-

struction urged by Nashua; (b) rejected Nashua’s enablement

and written disclosure objections to the ’603 Patent’s valid-

ity; (c) found that the ’603 Patent satisfies the best mode dis-

closure requirement; (d) found that the ’603 Patent’s claims

are definite; (e) found that the invention described in the ’603

Patent is not obvious in light of the prior art cited by Nashua;

(f) rejected Nashua’s equitable estoppel and laches defenses;

(g) rejected Nashua’s argument that the ’603 Patent should be

treated as a reissue patent; and (h) rejected Nashua’s patent

misuse arguments.

The petition seeks this Court’s review only with respect to

the district court’s and the Federal Circuit’s rejection of

Nashua’s argument that, although the ’603 Patent is undis-

putably a patent based upon a continuation application that

é The district court subsequently awarded Ricoh damages in

excess of $15 million. Nashua’s appeal of that award is currently pend-

ing before the Federal Circuit.

was issued under Section 120, it should be treated as a Sec-

tion 251 reissue patent, and Nashua should be afforded “inter-

vening rights” protection against Nashua’s infringement as if

Nashua were infringing a reissue patent and Section 252, on

its face applicable only to reissue patents, were to apply.

Nashua’s argument in the district court and before the Fed-

eral Circuit, and now its argument in its petition, that the °603

Patent should be treated as a Section 251 reissue patent and

that Nashua should be afforded intervening rights to excuse

its infringement of the ’603 Patent is based upon the same set

of undisputed facts:

— Ricoh’s original April 1984 patent application dis-

closed Ricoh’s invention without the limitations of the

removability of the gear member that is disposed cir-

cumferentially around the cartridge for rotating the car-

tridge, and a spiral guide rib in the sidewall of the

cartridge;

— thereafter, Ricoh was issued the *730 Patent, which

contains claims including these two limitations, but

Ricoh’s original application for its invention, without

these limitations, remained pending while Ricoh pursued

additional patent claims within the scope of the disclo-

sure of Ricoh’s invention in its original application;

— during the time that Ricoh’s original application

remained pending in the PTO while Ricoh pursued addi-

tional claims based upon its original disclosure of its

invention as authorized under Section 120, and in the

course of meetings Ricoh had with Nashua to discuss

Nashua’s infringement of the ’730 Patent with an exist-

ing Nashua toner cartridge, Nashua showed to Ricoh a

toner cartridge Nashua was considering marketing that

Nashua argued did not have a removable gear or spiral

guide rib and thus, according to Nashua, did not literally

infringe the ’730 Patent claims; nonetheless, this car-

tridge fell within the scope of Ricoh’s original disclosure

of its invention in 1984, which was publicly available

and was reviewed by Nashua’s patent counsel when he

advised Nashua in connection with the design of Nashua’s

proposed cartridge;

— Nashua subsequently started making and selling

this second version of Ricoh’s invention, which is the

subject of this lawsuit;

— while Ricoh’s original application for its invention

was still pending in the PTO, Ricoh filed a continuation

application under Section 120, seeking patent claims that

did not include the two limitations in the ’730 Patent

claims;

— the ’603 Patent issued pursuant to this continuation

application, and following Ricoh’s agreement to a ter-

minal disclaimer subjecting the 603 Patent to the same

expiration date as the ’730 Patent;

— the ’603 Patent contains claims based on the dis-

closure of Ricoh’s invention that is contained in Ricoh’s

original April 1984 application, but without the two lim-

itations of the ’730 Patent claims; and

— given the absence of these limitations in the ’603

Patent, the second Nashua toner cartridge literally

infringes the ’603 Patent.

The district court specifically rejected Nashua’s contention

that the ’603 Patent is a circumvention of the mandates of the

reissue statute that entitles Nashua to intervening rights. The

district court found that the ’603 Patent is a valid patent based

upon a continuation application that complies with Sec-

tion 120 and the regulations governing such patents, and

rejected Nashua’s legal argument on the following grounds:

Nashua points to no legal or factual basis on which

this court could rest a decision that the ’603 [Patent] is

not the continuation patent that both Ricoh and the PTO

consider it to be. Rather, Nashua boldly contends that

“Ricoh should have and could have filed the reissue of

the original *730 Patent” (D. Post-Trial Mem. at 31)

instead of seeking a continuation patent and executing a

terminal disclaimer. In essence, Nashua seems to be cry-

ing “foul” because Ricoh applied for and received the

"603 Patent after viewing Nashua’s smooth-walled car-

tridge. Nashua’s allegation of inequitable conduct rings

hollow:

It should be made clear. . . that there is nothing

improper, illegal, or inequitable in filing a patent

application for the purpose of obtaining a right to

exclude a known competitor's product from the

market; nor is it in any manner improper to amend

or insert claims intended to cover a competitor's

product the applicant's attorney has learned about

during the prosecution of a patent application. Any

such amendment or insertion must comply with all

statutes and regulations, of course, but, if it does,

its genesis in the marketplace is simply irrelevant

and cannot of itself evidence deceitful intent.

Kingsdown Medical Consultants, Ltd. v. Hollister, Inc.,

863 F.2d 867, 874 (Fed. Cir. 1988), cert. denied, 490

U.S. 1067 (1989). This is precisely what Ricoh did in

applying for the "603 Patent, and Nashua has articulated

no argument, other than those rejected herein, that the

°603 continuation patent does not “comply with all

statutes and regulations.” /d. Therefore, the court rejects

Nashua’s intervening rights argument.

Pet. 6la-62a.

The Federal Circuit likewise rejected Nashua’s argument—

the same argument as Nashua asserts here—on the ground that

there is no basis for treating the 603 Patent as a Section 251

reissue patent when it is indisputably a patent based upon a

continuation applicaton pursuant to Section 120, and that

Nashua’s argument for intervening rights with respect to the

°603 Patent is completely contrary to the provisions of the

federal patent statute governing patents based upon continu-

ation applications, and therefore is properly directed to

Congress, not the courts:

Nashua contends that it is entitled to intervening rights

for the products it developed during the pendency of

[Ricoh’s continuation application] because the ‘603

Patent broadened the claims of the '730 Patent over two

years after the issuance of the parent patent by using a

continuation application, thus impermissibly circum-

venting the statutory mandates of a reissue proceeding.

Ricoh responds by stating that, in explicitly granting

intervening rights in the context of reissue patents in the

Patent Act and not in the context of continuing applica-

tions, Congress has at least implicitly rejected the notion

that these separate methods of broadening patent claims are

to be treated the same. Ricoh also points to the recent

amendments to Sections 120 and 252 as further evidence

that Congress could have provided for intervening rights in

the context of continuing applications if it wanted to do so.

We agree with Ricoh. Section 120, governing contin-

uation applications, does not contain any time limit on

an applicant seeking broadened claims. In contrast, Sec-

tion 251, governing reissue proceedings, does contain a

specific time limit of two years. Moreover, Congress

specifically provided for intervening rights in Sec-

tion 252 of the reissue statute, whereas Congress made

no such provision for intervening rights in the context of

continuation applications. “[A] limit upon continuation

applications [i.e., similar to the two-year limit in reissue

proceedings] is a matter of policy for Congress, not for

us.” In re Hogan, 559 F.2d 595, 604 n.13, 194 USPQ

527, 536 n.13 (CCPA 1977).

In addition, we have recognized the practice of filing

continuation applications containing claims broader than

10

those in a patent application, subject to double patenting

objections, in order to encompass a competitor’s product.

See, e.g., Texas Instruments Inc. v. United States Int'l

Trade Comm'n, 871 F.2d 1054, 1065, 10 USPQ 2d 1257,

-1265 (Fed. Cir. 1989) (citing Kingsdown, 863 F.2d at

874, 9 USPQ 2d at 1390). Accordingly, absent congres-

sional indication that intervening rights are to be applied

in the context of continuation applications, we reject

Nashua’s argument that we should judicially adapt equi-

table safeguards, in contravention of established prece-

dent, when Congress itself has declined to do so.

Pet. 5a-7a (footnotes omitted).

The Federal Circuit further noted that Congress has

recently adopted safeguards against certain perceived abuses

of continuation practice-—so-called “submarine patents”—but

tellingly these recent amendments do not include allowing an

infringer of a patent based upon a continuation application the

intervening rights that are available to qualifying infringers

of reissue patents:

In 1994, . . . Congress amended 35 U.S.C. § 154 to pro-

vide for a patent term of 20 years from the date of the

earliest filed priority application, rather than 17 years

from the date of issue of the patent. This amendment in

effect addressed the perceived problem of so-called

“submarine patents,” i.e., the use of continuation appli-

cations to claim previously disclosed but unclaimed fea-

tures of an invention many years after the filing of the

original patent application.

Pet. 6a-7a n.3. Thus, in considering the very perceived abuses

that Nashua cites here, Congress declined to change the patent

statute to provide for the relief that Nashua now asks this Court

to create.

1]

REASONS FOR DENYING THE WRIT

A. Summary

Nashua has not offered any valid reason, let alone a com-

pelling reason, for this Court to review the Federal Circuit's

rejection of Nashua’s argument that Nashua should be

afforded intervening rights to excuse its infringement of a

valid patent based upon a continuation application. Notably,

at the oral argument on Nashua’s appeal at the Federal Cir-

cuit, the presiding judge repeatedly asked Nashua’s counsel

if he was aware of any precedent whatsoever supporting

Nashua’s argument that the °603 Patent should be treated as

a reissue patent, and Nashua should be afforded “intervening

rights” to excuse its infringement of that patent. After this

question was repeated several times, finally Nashua’s coun-

sel conceded that he was aware of no precedent supporting

Nashua’s argument.

In its petition, Nashua has at least remained consistent in

that it has cited no precedent for its argument, and indeed

there is none, nor should there be. That is because Nashua’s

argument is contrary to the express terms of the federal patent

statute, which allows qualifying infringers intervening rights

with respect to Section 251 reissue patents, which are issued

by the PTO upon the surrender of an initial patent, but does

not allow infringers intervening rights with respect to patents

based upon continuation applications issued pursuant to Sec-

tion 120, which are wholly distinct from reissue patents.

Patents based upon continuation applications are issued by the

PTO with the effective date of a prior patent application often

when the inventor has been awarded a prior patent containing

narrower claims, but only if it is determined that he should be

awarded one or more additional claims that are within the

scope of his original disclosure of his invention in his origi-

nal patent application. This is perhaps the key substantive

restriction on patents based upon continuation applications

that Nashua’s argument repeatedly assumes away, especially

12

in its petition, in which Nashua mischaracterizes the *603

Patent as a “double patent,” as “recapturing claims” Ricoh

supposedly “surrendered” in its patent prosecution, as some-

how having been issued in the face of unidentified file wrap-

per estoppels, or as an undesirable evil. Nashua does not

dispute that the claims Ricoh was awarded in the ’603 Patent

are within the scope of Ricoh’s original disclosure of its

invention in its original patent application.

Thus, to allow Nashua intervening rights with respect to the

*603 Patent would be bad public policy. The claims of the

°603 Patent indisputably are within the scope of Ricoh’s orig-

inal 1984 patent disclosure, and thus the infringing cartridge

Nashua began selling with full knowledge of the contents of

Ricoh’s patent application truly is an embodiment of Ricoh’s

invention as Ricoh originally disclosed that invention.

More importantly, however, such relief would be directly

contrary to the statutory scheme, which affords the possibil-

ity of intervening rights relief with respect to reissue

patents—which the ’603 Patent indisputably is not—but not

patents based upon continuation applications—which the ’603

Patent indisputably is. Hence, in the guise of a petition for

certiorari review, Nashua is actually asking this Court to leg-

islate, to change well-settled rules of patent law and practice

in ways that Congress has eschewed.

Finally, even if Nashua were correct and the law should be

changed to permit Nashua to seek equitable intervening

rights, the district court found as a matter of fact that Nashua

did not act equitably in this matter, and thus would not be

entitled to intervening rights even if it could pursue them.

Pet. 59a-62a.

Nashua has not shown that this Court’s review is required

by any conflict between the Federal Circuit’s ruling and appo-

site precedents of this or any other court. This Court should

reject Nashua’s invitation to legislate and change patent law

and practice, and reject the petition as completely unwar-

13

ranted and unjustified. As the Federal Circuit properly told

Nashua, if Nashua desires a change in the law, Nashua’s

recourse is to Congress, not the courts, and certainly not this

Court.

B. Nashua Has Not Satisfied The Requirements For

Obtaining This Court’s Discretionary Review

Supreme Court Rule 10 provides that “[rJeview on a writ of

certiorari is not a matter of right, but of judicial discretion. A

petition for a writ of certiorari will be granted only for com-

pelling reasons.” The “character of the reasons” the Court

considers in determining whether to grant review include

whether the circuit court’s “decision [is] in conflict with the

decision of another circuit court on the same important mat-

ter,” the decision “has so far departed from the accepted and

usual course of judicial proceedings, or sanctioned such a

departure by a lower court, as to call for an exercise of this

Court’s supervisory power” or the circuit court “has decided

an important question of federal law that has not been, but

should be, settled by this Court, or has decided an important

federal question in a way that conflicts with relevant deci-

sions of this Court.” Sup. Ct. R. 10. None of these reasons for

granting review exists here.

1. The Federal Circuit’s Decision Does Not

Conflict With Any Relevant Prior Decisions

Of This Court Or Of Other Circuit Courts

The Federal Circuit’s decision in this case does not conflict

with decisions of other circuit courts or with relevant deci-

sions of this Court. Nashua attempts to create the appearance

of a conflict where none exists by, among other things,

improperly ignoring the distinction between patents based

upon continuation applications that are issued under Sec-

tion 120 and reissue patents issued under Section 251. Nashua

does not argue, because it cannot, that this Court or any cir-

cuit court has held that intervening rights exist with respect

14

to a validly issued patent based upon a continuation appli-

cation. Instead, Nashua cites numerous precedents involving

reissue patents, file wrapper estoppels and so-called “double

patents”—issues that, as set forth below, are not involved in

this case—and then concocts imaginary conflicts between

those precedents and the Federal Circuit's decision here.

The Federal Circuit's decision is consistent with the clear

and unequivocal language of Section 120 and with all relevant

prior precedents. See, e.g., Texas Instruments, Inc. v. United

States Int'l Trade Comm'n, 871 F.2d 1054, 1065 (Fed. Cir.

1989); Kingsdown Med. Consultants, Ltd. v. Hollister, Inc.,

863 F.2d 867, 874 (Fed. Cir. 1988), cert. denied, 490 U.S.

1067 (1989). Indeed, Nashua concedes the absence of any

prior conflicting precedents in its petition when it admits that

it “had hoped that this case would be yet ‘another day’ where

the Federal Circuit would provide the additional protection

that the CCPA predicted might be needed under a different set

of facts.” Pet. 14 (emphasis supplied). Nashua correctly notes

that neither Congress nor any court has provided the “addi-

tional protection” Nashua seeks here. Accordingly, the only

real conflict exists between the law as clearly stated in the

statute and well-settled precedents, and the law as Nashua

would like it to be. Nashua’s unrequited hope that the Federal

Circuit would legislate and provide “additional protection”

that is not provided for by Congress, or go beyond well-set-

tled precedents, does not constitute a “compelling reason” for

this Court to grant discretionary review.

2. The Federal Circuit’s Decision Does Not

Raise An Important Question Of Federal

Law That Should Be Settled By This Court

The Federal Circuit's decision in this case does not raise an

important question of federal law that has not been, but

should be, settled by this Court. The Federal Circuit merely

applied the clear and unequivocal language of the federal

patent statute and applied its provisions to allow for inter-

15

vening rights in the context of reissue patents, but not patents

based upon continuation applications. Congress could not

have been clearer on this issue, by providing in Section 120

that a patent based upon a continuation application shall have

the same effective date as the prior application to which it

relates, and by not providing for intervening rights with

respect to a patent based upon a continuation application

when Congress did provide for such rights with respect to

reissue patents.

Not surprisingly, Nashua fails to cite a single precedent that

has interpreted Section 120 differently. This Court need not

and should not review such a straightforward and uncontro-

verted interpretation of an unambiguous statute. Indeed, as

Nashua fails to note in its petition, the Federal Circuit des-

ignated its decision as not citable pursuant to Fed. Cir. R.

47.6, which provides that “[o]pinions and orders which are

designated as not citable as precedent are those unanimously

determined by the panel at the time of their issuance as not

adding significantly to the body of law.” Were this Court to

disagree with the distinction Congress drew with respect to

the availability of intervening rights for reissue patents, but

not patents based upon continuation applications, it would be

the role of Congress, not this court, to change it. See /n re

Hogan, 559 F.2d 595, 604 n.13 (C.C.P.A. 1977) (“[A] limit

upon continuing applications is a matter of policy for the

Congress, not for us.”).

A. Nashua Is Improperly Blurring The Distinction

Between Reissue Patents And Patents Based

Upon Continuation Applications

There is no basis for Nashua’s attempt to blur the distinc-

tion between Section 251 reissue patents and patents based

upon continuation applications that are issued under Section

120. The two are entirely different with entirely different

roles in patent law and practice. Section 251 provides a statu-

tory basis for correcting an “error” in a patent which renders

the patent “wholly or partly inoperative or invalid.” 35 U.S.C.

16

§ 251; see also, e.g., In re Bennett, 766 F.2d 524, 528 (Fed.

Cir. 1985) (en banc) (“The purpose of the reissue statute is to

remedy errors.”). Section 251 requires that when a reissue

patent is granted, the existing defective patent be surrendered.

One who seeks to invoke Section 251 to correct a patent must

demonstrate that he intended to claim what he now seeks to

obtain in the reissue patent, and that his failure to do so was

the result of “error” without any “deceptive intention.” See,

e.g., In re Weiler, 790 F.2d 1576, 1581-83 (Fed. Cir. 1986).

Thus, a patentee can seek a reissue patent when he did not

believe he had any reason to seek additional claim coverage

by, for example, adding or modifying claims or by appealing

the PTO’s denial of claims he had sought earlier, and there-

fore the patentee allowed the proceedings on his application

to terminate. If the applicant discovers later that he was

wrong, and failed to obtain the patent to which he was entitled,

Section 251 gives him an opportunity to correct the error.

A patentee relies upon Section 120 in seeking a patent

based upon a continuation application for completely differ-

ent reasons. Section 120 does not involve any issue of error,

or any requirement that the applicant show that a patent he

obtained earlier is defective or invalid because of a mistake.

Rather, Section 120 facilitates an inventor’s obtaining full

protection for his invention to the extent of his disclosure in

his original application by establishing an effective filing date

based on the date of the earliest application that disclosed the

invention.

Section 120 specifically contemplates that an inventor may

obtain more than one patent from his original application.

Indeed, Section 120 imposes no limit on the number of appli-

cations that may be filed. Jn re Henriksen, 399 F.2d 253, 255

(C.C.P.A. 1968). Section 120, unlike Section 251 for reissue

patents, imposes no requirement that earlier-obtained patents

be surrendered in order to obtain additional patents later.

An applicant of course cannot obtain two or more claims

that are precisely the same. Jn re Eckel, 393 F.2d 848, 856

17

(C.C.P.A. 1968). If a patent claim sought under Section 120

is not the same as an earlier-issued claim, but is an “obvious”

variation on the earlier claim, the applicant can obtain the

later patent by disclaiming the portion of the later patent’s

term that would extend beyond that of the earlier patent, as

Ricoh did here in disclaiming any additional period of pro-

tection under the ’603 Patent beyond the expiration date of

the earlier-issued ’730 Patent.

As discussed below, the Federal Circuit and its predecessor

have consistently observed that this terminal disclaimer prac-

tice is beneficial to the public. See, e.g., Quad Environmen-

tal Tech. Corp. v. Union Sanitary Dist., 946 F.2d 870, 873-75

(Fed. Cir. 1991); Eckel, 393 F.2d at 857; In re Jentoft , 392

F.2d 633, 641 (C.C.P.A. 1968); In re Braithwaite, 379 F.2d

594, 601 (C.C.P.A. 1967). It allows an applicant to obtain the

full protection to which he is entitled, albeit in different

patents, and allows the public to have the invention disclosed

earlier (in the first patent to be obtained) and (under the prior

version of Section 154, which provided for a patent term of

17 years from the date of issue) causes the term of the inven-

tor’s monopoly to begin and expire earlier.

If, for example, claims drawn to a specific embodiment of

an invention can be allowed more quickly than broader claims

that more fully cover the scope of the invention, the public

benefits from having the narrow claims issue early and the

broader claims issue later, so long as a terminal disclaimer is

filed for the later patent. The alternative would be to hold up

the entire case until both the narrow and the broader claims

can be evaluated and allowed, resulting in later disclosure to

the public and later expiration of the patent term.

Thus, Section 120 and Section 251 have different purposes,

different rationales and different requirements. Nashua’s

assertions that a valid patent based upon a continuation appli-

cation such as the ’603 Patent constitutes an impermissible or

pernicious “double patent” and that “a patentee may only

broaden the scope or coverage of an issued patent under the

18

Strict ‘reissue’ guidelines . . .”, Pet. 2, are contrary to the

express provision of the patent statute, and are—as the

absence of supporting citations suggests—sheer fabrications.

There is no basis for, and no wisdom in, Nashua’s proposal

that a patent based upon a continuation application be treated

as if it were instead a Section 251 reissue patent.

B. There Is No Basis For Nashua’s Argument That

Ricoh Acted Improperly In Obtaining The ’603

Patent

Nashua does not contend that Ricoh failed to comply with

Section 120’s requirements for patents based upon continu-

ation applications. Rather, Nashua attempts to impugn Ricoh

for obtaining such a valid patent in order to secure literal

claim coverage over the version of Ricoh’s invention that

Ricoh disclosed but did not literally claim in the ’730 Patent,

and that Nashua started making after Ricoh told Nashua that

Nashua’s prior cartridge infringed the ’730 Patent. It is undis-

puted that the invention claimed in the '603 Patent was dis-

closed in and supported by the original application from

which the '603 Patent issued. By abandoning the obviousness

attack on the '603 Patent that it made in the district court,

Nashua now also concedes that the invention claimed in the

°603 Patent was not obvious in view of the prior art.

Thus, what Nashua is trying to defend is its poaching of an

invention that Ricoh invented, publicly disclosed in its orig-

inal PTO application in 1984 and made the subject of a con-

tinuation application in 1988, all in accordance with well-

settled law and practice. As the district court remarked in

rejecting Nashua’s reissue argument below, “Nashua’s alle-

gation of inequitable conduct rings hollow.” Pet. 61a. Further,

as the Federal Circuit has noted:

[T)here is nothing improper, illegal or inequitable in fil-

ing a patent application for the purpose of obtaining a

right to exclude a known competitor’s product from the

market; nor is it in any manner improper to amend or

19

insert claims intended to cover a competitor's product

the applicant's attorney has learned about during the

prosecution of a patent application. Any such amend-

ment or insertion must comply with all statutes and reg-

ulations, of course, but, if it does, its genesis in the

marketplace is simply irrelevant and cannot of itself evi-

dence deceitful intent.

Kingsdown, 863 F.2d at 874 (citation omitted) (emphasis sup-

plied); see also Texas Instruments, 871 F.2d at 1065 (same).

Nashua also is mistaken in suggesting that Ricoh filed the

continuation application that matured into the 4,744,493

patent, which was issued after the ’730 Patent and before the

°603 Patent and covers the combination of the toner cartridge

and the structure in the copier that receives the cartridge, “to

serve as a place holder” and keep the patent application alive

so that Ricoh could file an application for claims to cover

Nashua’s version of the Ricoh invention. Pet. 5-6. Ricoh filed

this application in May 1986, before Nashua purportedly

attempted to design around the ’730 Patent, and, indeed,

before the ’730 Patent had even been issued. The proper

inference to draw from the fact that Ricoh had not terminated

the proceedings on its application is that Ricoh had not yet

obtained the full scope of patent protection to which it

believed it was entitled and, as the issuance of the ’603 Patent

demonstrates, to which Ricoh was entitled.

Nor is there any basis for Nashua’s argument that the ’603

Patent is somehow “a secret or ‘submarine’ patent applica-

tion” that “sandbag[s] the competition” because it undermines

the justifiable expectations of “those members of the public

who have developed non-infringing products in reliance upon

the scope of a first issued patent. . . .” Pet. 2-3, 14. Again,

the claims of the ’603 Patent are indisputably within the scope

of the disclosure of Ricoh’s invention in its original April

1984 patent application. Moreover, the statutory availability

of continuation practice to obtain additional claims within the

scope of an application’s original disclosure is a matter of

20

public record, and within the knowledge and understanding of

every capable patent law attorney. Ricoh’s original disclosure

of its invention was available to Nashua in the ’730 Patent

and that patent’s publicly available prosecution file, and

Nashua’s patent counsel reviewed these materials at the

request of Nashua before Nashua proposed the infringing car-

tridge at issue. This placed Nashua and its patent counsel on

notice when Nashua proposed its cartridge that Ricoh’s orig-

inal disclosure was broad enough to support a patent based

upon a continuation application with claims that would not

include the ’730 Patent limitations around which Nashua pur-

ported to design, and that such a patent would enjoy the same

effective date as the ’730 Patent. Hence, Nashua also was on

notice that its cartridge could be subject to an injunction for

infringing such a patent were one to issue. Again, this is as it

should be, because so long as Nashua’s cartridge is within the

scope of Ricoh’s original disclosure—as it indisputably is—it

embodies Ricoh’s invention.

Thus, at bottom, Ricoh’s publicly available initial disclo-

sure and the publicly-known availability of patents based

upon continuation applications contradict Nashua’s fanciful

notion that it “developed [a] non-infringing produc[t] in

reliance upon the scope of a first issued patent only to find

[itself] purportedly infringing a later issued ‘double patent’

based on a secret or ‘submarine’ patent application.” Pet. 2-3.

Equally baseless is Nashua’s repeated refrain that Ricoh

somehow effected a “recapture of material previously dedi- .

cated to the public” or circumvented a “file wrapper estoppel”

of what it “surrendered” during the prosecution of the *730

Patent. Pet. 3 & n.1. Again, the very existence of the statutory

procedures—with which Ricoh indisputably complied—con-

tradicts Nashua’s fallacious premises that Ricoh “surrendered”

anything when it allowed the ’730 Patent to issue with nar-

rower claims than those to which Ricoh believed it was enti-

tled based upon its original disclosure, that Ricoh “recaptured”

anything when it later obtained claims in the ’603 Patent that

|

21

are broader than those in the '730 Patent but still within the

scope of Ricoh’s original disclosure, or that Ricoh was

“estopped” from obtaining broader claims because it accepted

the narrower claims of the '730 Patent. As set forth above,

continuation practice—when combined with the terminal dis-

claimer practice that was also followed here—allows an appli-

cant to obtain the full protection to which he is entitled based

upon his initial disclosure, and benefits the public by pro-

viding for the earlier disclosure of the invention and, under the

prior statutory regime which fixed the patent term from the

date of issue, by causing the inventor’s monopoly to expire

earlier. So long as the second patent’s claims are within the

inventor’s original disclosure—as is indisputably the case

here—there is no “surrender,” nothing to “recapture” and no

inconsistent action to support an “estoppel.”

Nor should Nashua be heard to invoke the specter of the

“submarine” patent. See, e.g., Pet. 8. First, applications for

continuation patents are no more “submarine” than initial

applications, so long as they are timely made. If Nashua has

an objection to the secrecy of all patent applications, see, e.g.,

Pet. 6(“. . . Ricoh secretly filed the application leading to

the 603 [Patent]. . . .”), that objection also is for Congress,

not this Court. Further, as the Federal Court noted in this

case, in 1994 Congress adopted safeguards against perceived

abuses of continuation practice which tellingly did nor

include providing for intervening rights. See Pet. 7a n.3.

Moreover, even if this Court were to entertain Nashua’s

argument in theory, that argument would still be contradicted

by the facts. The factual premise of Nashua’s argument is that

Nashua modified its toner cartridge to fall outside the limi-

tations the PTO Examiner had identified as reasons for grant-

ing the ’730 Patent, reasoning that if Nashua fell outside

those limitations, it did not need to worry about a later patent

that did not include those limitations. Pet. 4-5. But in fact

Nashua eliminated only one of the two limitations the Exam-

22

iner had identified. In the Notice of Allowability of the °730

Patent, the Examiner stated:

The primary reasons for allowance of the claims are the

provisions for the gear toothed bearing member disposed

on the external surface of the cartridge for rotation of the

cartridge, and being removable and mateable with the

cartridge. These provisions are found in the claims and

not in the prior art.

Nashua did not eliminate the most important limitation iden-

tified by the Examiner, “the gear toothed bearing member dis-

posed on the external surface of the cartridge for rotation of the

cartridge””’ itself.

C. Only Congress Can Change The Law As Nashua

Urges

Even assuming arguendo that Nashua’s argument had any

merit, either theoretically or on the facts found below, the

relief Nashua seeks would require this Court to overrule

Congress by amending Section 120 to create intervening

rights for infringers such as Nashua. But Congress knows how

to provide for intervening rights if it chooses, having done so

with respect to reissue patents under certain circumstances.

See 35 U.S.C. § 252. Indeed, Congress amended both Section

252 (in 1994)? and Section 120 (in 1984),* but has not pro-

vided for intervening rights with respect to patents obtained

under Section 120.

Nashua unwittingly concedes that it is asking this Court to

legislate and circumscribe continuation practice in ways that

Congress has not chosen to adopt in this telling passage from

the petition:

See Pub. L. 103-465, Title V, § 533(b)(2), 108 Stat. 4989 (Dec.

8, 1994).

_ See Pub. L. 98-622, Title I, § 104(b), 98 Stat. 3385 (Nov. 8,

1984).

23

Although Ricoh argues otherwise, we do not challenge

here the continuation laws (35 U.S.C. § 120) in general,

but the abuse of these laws by the creation of “subma-

rine” “double patents” which are identical in effect to

reissue patents but which circumvent the stringent con-

| trols and public protection applied to reissues under 35

U.S.C. §§ 251-52.

Pet. 12 n.7. As noted above, Nashua’s charge that the °603

Patent is somehow a “submarine” or “double patent” is based

on wholly fictional premises. The key point here is that, in this

passage, Nashua concedes that it is asking this Court to subject

patents based upon continuation applications to the limitations

that Congress has prescribed only for reissue patents. There

could be no clearer indication that Nashua is asking this Court

to legislate, rather than adjudicate.

Finally, any such change in the law would be prospective,

of course, which also would be appropriate. To apply to Ricoh

a change in the law retroactively as Nashua proposes would

deprive Ricoh of rights upon which it has relied, and thus

would be grossly unfair. Cf. Henriksen, 399 F.2d at 261-62.

a sr te ala os ld

D. There Is No Policy Reason To Change The Law

The purported policy considerations Nashua advances in aid

of its argument are not supported by the law or patent pros-

ecution practice.

(i) Terminal Disclaimers

Nashua assumes that using a terminal disclaimer to over-

come a nonstatutory double patenting objection is improper

and to be mistrusted. That assumption is unfounded. First, ter-

minal disclaimers are permitted only to overcome an obvi-

ousness-type double patenting rejection, which—unlike the

same invention double patenting objection—is judicially cre-

ated rather than required by statute. Gerber Garment Tech.,

Inc. v. Lectra Sys., Inc., 916 F.2d 683, 686 (Fed. Cir. 1990);

eee

24

Ortho Pharmaceutical Corp. v. Smith, 959 F.2d 936, 940

(Fed. Cir. 1992).

Second, Congress contemplated the use of terminal dis-

claimers to overcome double patenting objections when it

enacted Section 253 of the Patent Act in 1952. See Com-

mentary of P. J. Federico, advisor to the Congressional sub-

committee that crafted the 1952 amendments to the statute,

during the hearings on H.R. 3763, later H.R. 7794, reprinted

in In re Robeson, 331 F.2d 610, 614 n.4 (C.C.P.A. 1964) (not-

ing that the proponents of Section 253 “contemplated that it

might be effective in some instances, in combating a defense

of double patenting, to permit the patentee to cut back the

term of a later issued patent so as to expire at the same time

as the earlier issued patent and thus eliminate any charge of

extension of monopoly”) (emphasis supplied).

Further, as noted above, the Federal Circuit and its prede-

cessors and the PTO have emphasized that terminal disclaimer

practice is in the public interest. See, e.g., Quad Environ-

mental, 946 F.2d at 873 (“Voluntary limitation of the term of

the later-issued patent is a convenient response to an obvious

[ness]-type double patenting rejection, when the statutory

requirement of common ownership is met. Any possible

enlargement of the term of exclusivity is eliminated, while

enabling some limited protection to a patentee’s later devel-

opments.”); Eckel, 393 F.2d at 857 (“the use of terminal dis-

claimers in such cases results in a clear benefit to the

public”); Jentoft, 392 F.2d at 641 (noting the “advantages to

the public” of terminal disclaimers); Braithwaite, 379 F.2d at

601 (noting that the applicant’s filing of a terminal disclaimer

to obtain a second patent “appears to us to have been to the

advantage of the public—rather than to himself”); Manual of

Patent Examining Procedure, 804.02, at 800-24 (July 1996)

(“The use of a terminal disclaimer in overcoming a non-

statutory double patenting rejection is in the public interest

because it encourages the disclosure of additional develop-

ments, the earlier filing of applications, and the earlier expi-

SS ee

25

ration of patents whereby the inventions covered become

freely available to the public.”).

Nashua’s proposed rule would mean that a patent applicant

could not utilize a terminal disclaimer without incurring a risk

that the patent he obtains would be held unenforceable against

infringers. The inevitable result would be that terminal dis-

claimer practice would be curtailed. Applicants would be

forced to fight nonstatutory double patenting rejections,

thereby wasting the resources of the PTO and the courts, and

applicants’ own resources, rather than simply overcoming the

rejection by dedicating to the public a portion of the appli-

cants’ requested patent term.

(ii) File Wrapper Estoppel

Nashua has attempted to raise the specter of terminal dis-

claimers being used to overcome file wrapper estoppel, allud-

ing repeatedly in its petition to Ricoh having avoided file

wrapper estoppels arising during the prosecution of its patent

applications. But there are no instances of file wrapper estop-

pel here—certainly Nashua has identified none—and, of

course, if there had been, Nashua could have made such an

estoppel argument to limit Ricoh’s rights. It did not do so on

a timely basis, and cannot do so here.°

Moreover, as Judge Rich explained in Jentoft, there is no

basis for concern that terminal disclaimers might be used to

overcome file wrapper estoppels, because the effect of a file

wrapper estoppel cannot be avoided by filing a second appli-

cation together with a terminal disclaimer. Rather, the claim

in the second patent will be held subject to file wrapper estop-

pel based on the prosecution of the application for the first

patent. Thus, the Jentoft court observed, the argument that

terminal disclaimers should be disfavored because they might

; Nashua’s argument that Ricoh conceded file wrapper estoppel at

the oral argument before the Federal Circuit, Pet. 6 n.4, is patently false.

26

be used to overcome file wrapper estoppel “is totally wanting

in substance.” 392 F.2d at 640-41.

(iii) PTO Statement Of Reasons For Allowance

Nashua’s argument also gives controlling significance to

the PTO’s Notice of Allowability of the ’730 Patent, and

specifically to the statement of reasons for allowance of that

patent. Nashua argues that this statement should definitively

limit the scope of any patent Ricoh could subsequently obtain

under Section 120. But each application for a patent stands

alone. This is demonstrated by the fact that in allowing the

"603 Patent, the Examiner identified as limitations that

patentably define over the art of record not only the “gear

driving means extending circumferentially of the body [for]

driving the cartridge” that previously had been identified in

allowing the ’730 Patent, but also “the provisions for the

mouth portion being in rotational and sealing engagement

within the cap shaped receptacle of the toner replenishing

device.”

Further, the same PTO Examiner (and Supervisory Patent

Examiner) allowed the ’730 and the ’603 Patents. If, as

Nashua suggests, the Examiner meant the statement of rea-

sons for allowance of the ’730 Patent to be exclusive, he

would not have later allowed the ’603 Patent, which does not

include one of these limitations. Because the same Examiner

allowed both patents, Ricoh cannot be suspected of using the

continuation process to obtain from a second examiner what

it could not obtain from an earlier one.

E. Equity Does Not Support Nashua’s Argument

For Intervening Rights

Finally, even if the ’603 Patent were treated as a reissue

patent, the “intervening rights” Nashua seeks are a matter of

discretion for the court, and are to be granted only “to the

extent and under such terms as the court deems equitable for

the protection of investments made or business commenced

before the grant of the reissue.” 35 U.S.C. § 252.

27

Courts have denied equitable intervening rights because the

investment by the infringer in the infringing products prior to

the reissue was insubstantial and offset by the profits the

infringer had realized. See Wayne Gossard Corp. v. Sondra,

Inc., 434 F. Supp. 1340, 1363 (E.D. Pa. 1977), aff’d, 579 F.2d

41 (3d Cir. 1978); White v. Fafnir Bearing Co., 263 F. Supp.

788, 811-12 (D. Conn. 1966), aff’d, 389 F.2d 750 (2d Cir.

1968). Here, before even the ’730 Patent issued, Nashua had

begun selling a toner cartridge which had a spiral guide rib in

the sidewall and a removable gear member. Nashua’s modi-

fication of this cartridge in 1987 to the smooth-walled car-

tridge with a purportedly non-removable gear involved a

change of molds, which cost Nashua $71,390. This invest-

ment is minimal in relation to the fact that, after the ’603

Patent issued, Nashua sold several million dollars worth of

infringing cartridges and caused Ricoh several million dollars

in damages.

Further, the district court specifically found as a matter of

fact that the equities do not favor Nashua:

Nashua is only entitled to the equitable defenses it

asserts if the equities of the case as a whole favor relief.

Here, Nashua appears to “have made a deliberate busi-

ness decision to ignore [a] warning, and to proceed as if

nothing had occurred.” Hemstreet v. Computer Entry Sys.

Corp., 972 F.2d 1290, 1294 (Fed. Cir. 1992). ...

Nashua’s claimed failure to recognize Ricoh’s intent to

enforce its rights under the ’603 Patent is, if sincere,

necessarily attributable to willful blindness on the part

of Nashua executives.

Pet. 59a-60a. The district court further noted that “the evidence

demonstrates that Nashua went forward with the smooth-walled

cartridge either in spite of or in conscious disregard of Ricoh’s

conduct; Nashua understood well the game being played and,

knowing the risks, consciously took them.” Pet. 59a.

28

CONCLUSION

For the foregoing reasons, Ricoh respectfully requests that

this Court deny the petition.

Dated: June 21, 1999

Respectfully submitted,

Lawrence B. Friedman

Counsel of Record

CLEARY, GOTTLIEB, STEEN & HAMILTON

One Liberty Plaza

New York, New York 10006

(212) 225-2000

Attorneys for Respondents

Of Counsel:

Robert T. Greig

Joshua H. Rawson

Joon H. Kim