Curtis Mfg. Co., Inc. v. Plasti-Clip Corp., PLASTI-CLIP

• Citation: 135 F.3d 778
• Decision Date: 06 February 1998
• Docket Number: PLASTI-CLIP,Nos. 96-1048,96-1059,96-1055,s. 96-1048
• Parties: NOTICE: Federal Circuit Local Rule 47.6(b) states that opinions and orders which are designated as not citable as precedent shall not be employed or cited as precedent. This does not preclude assertion of issues of claim preclusion, issue preclusion, judicial estoppel, law of the case or the like based on a decision of the Court rendered in a nonprecedential opinion or order. CURTIS MANUFACTURING COMPANY, INC., Plaintiff-Appellant, v.CORPORATION and Daniel Faneuf, Defendants-Cross Appellants.CORPORATION and Daniel Faneuf, Plaintiffs-Cross-Appellants, v. Thomas W. JUDD, Defendant-Appellant
• Court: United States Courts of Appeals. United States Court of Appeals for the Federal Circuit

Page 778

135 F.3d 778

NOTICE: Federal Circuit Local Rule 47.6(b) states that opinions and orders which are designated as not citable as precedent shall not be employed or cited as precedent. This does not preclude assertion of issues of claim preclusion, issue preclusion, judicial estoppel, law of the case or the like based on a decision of the Court rendered in a nonprecedential opinion or order.

CURTIS MANUFACTURING COMPANY, INC., Plaintiff-Appellant, v. PLASTI-CLIP CORPORATION and Daniel Faneuf, Defendants-Cross

Appellants.

PLASTI-CLIP CORPORATION and Daniel Faneuf, Plaintiffs-Cross-Appellants, v. Thomas W. JUDD, Defendant-Appellant.

Nos. 96-1048, 96-1055, 96-1059.

Feb. 6, 1998.

Before RICH, PLAGER, and CLEVENGER, Circuit Judges.

RICH, Circuit Judge.

Before us for resolution are three appeals in two suits, which were consolidated, involving two patents: U.S. Patent No. 4,277,863 ('863 patent), entitled "Identification Card Holder," issued to Daniel Faneuf (Faneuf) and U.S. Patent No. 4,902,078 ('078 patent), entitled "Document Holder Clip," naming Thomas W. Judd (Judd) as inventor, which issued to assignee Curtis Manufacturing Company, Inc. (Curtis). Briefly, the Faneuf patent describes a clip used to attach an identification badge to an item of clothing. The Curtis patent describes a clip for holding documents attached to the side of a word processor for viewing by the operator. DP On September 8, 1989, Curtis filed a declaratory judgment action against Plasti-Clip and Faneuf in the United States District Court for the District of New Hampshire, alleging that the Curtis clip does not infringe the '863 patent and that each claim of the '863 patent is invalid, void, and unenforceable. ¹ Based on Faneuf's claim that he actually invented the Curtis clip, Plasti-Clip and Faneuf counterclaimed for infringement of the '863 patent and/or Curtis's own '078 patent, fraudulent procurement of the '078 patent, violation of federal and New Hampshire antitrust laws, violation of New Hampshire prohibitions on unfair trade practices, as well as a common law claim for conversion/idea misappropriation. ² Plasti-Clip attempted to add Judd, the president of Curtis, as a third party defendant. After the district court denied this motion, Plasti-Clip brought a separate action against Judd, asserting claims similar to its claims against Curtis. Judd counterclaimed for a declaratory judgment of invalidity and noninfringement of the '863 patent. The two cases were consolidated for trial. The District Court of New Hampshire entered an amended judgment on October 12, 1995 on special jury verdicts returned on May 15, 1995 finding that:

(1) Curtis infringed claims 1, 4, and 5 of the '863 patent issued to Faneuf;

(2) The '863 patent is not invalid under 35 U.S.C. §§ 102 or 103;

(3) Curtis, with the assistance of Judd, had converted the '078 patent, issued to assignee Curtis listing Judd as the sole inventor, because the jury found Faneuf was the sole inventor of the '078 patent;

(4) Curtis misappropriated a confidential idea from Faneuf or Plasti-Clip Corporation, a small corporation owned by Faneuf; and

(5) Curtis engaged in unfair competition against Plasti-Clip or Faneuf.

After the district court entered judgment on the special jury verdicts, both parties brought several post-trial motions. Curtis and Judd both filed for judgment as a matter of law (JMOL), or alternatively, for new trials or to alter and amend judgment. In these motions, Curtis and Judd attacked the finding of infringement of the '863 patent. Neither attacked, however, the district court's instructions to the jury or the district court's interpretation of the claims of the '863 patent. On these post-trial motions, the district court ruled that the finding of infringement of the '863 patent was supported by sufficient corroborative evidence because the jury had before it a written disclosure, a mock prototype, and drawings which had been prepared by Faneuf. Curtis Mfg. Co. v. Plasti-Clip Corp., Civil No. 89-430-SD and 92-360-SD, slip op. at 14-15 (D.N.H. Sept. 14, 1995). The district court also found on post-trial motions that the doctrine of conversion was applicable to a patent; that there was sufficient evidence for the jury to find a confidential relationship between Faneuf and Curtis and misappropriation of confidential information; and that there was sufficient evidence to find unfair competition. ³

The district court gave Plasti-Clip and Faneuf a choice between assignment of the '078 patent and damages for such conversion because it found that the award of both constituted double damages. Plasti-Clip and Faneuf chose damages.

The district court awarded $645,961.30 plus interest at the rate of 6.28 percent against Judd for assistance in the conversion of the '078 patent, and awarded Plasti-Clip and Faneuf a total of $293,891.98, plus interest thereon, against Curtis: $79,809.48 for infringement of the '863 patent; $200,982.50 for conversion of the '078 patent; $13,000.00 for misappropriation of a confidential idea; and $100.00 for unfair competition.

We reverse.

Both parties appeal on myriad issues. Because we hold that Faneuf is not an inventor of the claimed subject matter of the '078 patent and the Curtis clip does not infringe the '863 patent, we need not reach many of the issues on which the parties appeal. Therefore, we will first address these two issues.

Background

To determine whether Faneuf is the sole or a co-inventor of the invention claimed in the '078 patent, we must examine Faneuf's invention as claimed in his '863 patent and the circumstances surrounding his interaction with Curtis and Judd during the development of the invention claimed in the Curtis-Judd '078 patent of which Faneuf claims to be the sole inventor. They are briefly summarized below.

Faneuf testified that he first conceived of the invention involving a clipping element used to attach an identification badge to an item of clothing as claimed in the '863 patent in late 1978. Figures 1 and 2 of the clip from the '863 patent are shown below:

Fig. 1 shows the clip in open position ready to receive a badge or the like and Fig. 2 shows it closed and in use. The plastic clip members 1 and 2 are integrally joined by a flexible web 3 which acts as a hinge. The jaws 4 are to grip the clothing 5 when the spring finger 7, 8 is pushed beneath the flange 6 on the end of member 1, closing the jaws 4 as shown in Fig. 2. Finger 7, 8 forms a loop which opens and closes and from which a card 11 with an opening 9 can be hung. It also acts as the spring which holds the jaws 4 closed, thus performing a dual function.

Faneuf asserts that a garment clip that he developed in the mid 1980's is covered by the claims of the '863 patent. It is this garment clip that Faneuf later provided to Curtis for use with the Curtis document holder, which forms the basis for his inventorship claim.

Curtis manufactures and sells computer accessory products. In the 1980's, Judd, one of the original founders of Curtis, originated the idea of a document holder and did the initial work on developing the product. Judd obtained a design patent on May 9, 1989, U.S. Patent No. Des. 301,044, which was assigned to Curtis, on his ornamental design for the adjustable document holder clip. The design is shown below:

In 1988, Judd realized that the Curtis clip would not always clamp sufficiently to hold only one or two sheets of paper. Judd instructed Mr. Edward Hames (Hames), Curtis's product development manager, to find a clip that would solve the problem. Judd testified that he asked for a double-sided clip that would slide along the length of the Curtis document arm and be wide enough to span the holes in the arm.

Hames originally showed a barrel clip to Judd around Christmas of 1988. Hames testified that Judd slid the barrel clip on the Curtis arm of the document holder, and stated that he wanted slidability of the clip on the entire arm so that the clipping element would be adjustable.

About a month after this conversation with Judd, one of Curtis's mold producers showed Faneuf's garment clip to Hames. Although Hames stated he was not interested, on May 5, 1989, he called Faneuf because he liked the garment clip's cost effective, one-piece construction. Hames sent Faneuf a sample of the Curtis document arm for which Curtis needed the improved clip. Hames showed the Faneuf garment clip to Judd who testified that he was impressed with the clip because of the spring technology and the one-piece construction.

Faneuf testified that after reviewing the Curtis document arm, he believed his garment clip would hold documents on the Curtis arm well. He testified that he attempted to slide the garment clip onto the arm, but the Curtis document arm was too large and spread his garment clip too wide, rendering it ineffective to hold paper. Therefore, Faneuf notched the Curtis arm to accommodate his garment clip by snapping it on.

On May 18, 1989, after Faneuf had been informed by Hames' secretary that Curtis was no longer interested in his clip, Faneuf sent Curtis a quote for the stock garment clip manufactured by Plasti-Clip and a second option for a custom design clip using "Plasti-clip's patented design." Faneuf testified that this May 18 presentation was the complete disclosure of his invention.

Faneuf testified that the May 18 quotation showed his garment clip mounted in slidable fashion on the Curtis document arm. Faneuf believed that the rail of the Curtis' arm just needed to be sized down to accommodate the clip. Faneuf agreed to meet with Hames the next day, May 19, 1989, and brought the sample Curtis arm modified with notches to accommodate his stock garment clip. Faneuf testified that at that meeting he showed Hames how his garment clip could be snapped on as well as slid onto the Curtis document arm. Hames testified, however, that he, and not Faneuf, brought up the concept of modifying the stock clip to...