233 F.2d 828 (6th Cir. 1956), 12363, Cold Metal Process Co. v. Republic Steel Corp.

Docket Nº:12363, 12364.
Citation:233 F.2d 828, 109 U.S.P.Q. 185, 109 U.S.P.Q. 448
Party Name:The COLD METAL PROCESS COMPANY and The Union National Bank of Youngstown, Ohio, Trustee, Appellants, v. REPUBLIC STEEL CORPORATION, Appellee. REPUBLIC STEEL CORPORATION, Appellant, v. The COLD METAL PROCESS COMPANY and The Union National Bank of Youngstown, Ohio, Trustee, Appellees.
Case Date:April 10, 1956
Court:United States Courts of Appeals, Court of Appeals for the Sixth Circuit
 
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Page 828

233 F.2d 828 (6th Cir. 1956)

109 U.S.P.Q. 185, 109 U.S.P.Q. 448

The COLD METAL PROCESS COMPANY and The Union National Bank of Youngstown, Ohio, Trustee, Appellants,

v.

REPUBLIC STEEL CORPORATION, Appellee.

REPUBLIC STEEL CORPORATION, Appellant,

v.

The COLD METAL PROCESS COMPANY and The Union National Bank of Youngstown, Ohio, Trustee, Appellees.

Nos. 12363, 12364.

United States Court of Appeals, Sixth Circuit.

April 10, 1956

As Modified on Denial of Rehearing June 8, 1956.

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[Copyrighted Material Omitted]

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against defendant licensee and patent holder had not given defendant reason to plead immunity under license contract.

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William H. Webb, Pittsburgh, Pa. (William H. Webb, Howard F. Burns, Pittsburgh, Pa., Clarence B. Zewadski, Detroit, Mich., Morton Burden, Jr., Joseph R. Robinson, Jr., Webb, Mackey & Burden, Pittsburgh, Pa., Whittemore, Hulbert & Belknap, Detroit, Mich., Baker, Hostetler & Patterson, Cleveland, Ohio, on the brief), for Cold Metal Process Co. and another.

John N. Cooper, New York City (T. F. Patton, Cleveland, Ohio, Drury W. Cooper, John N. Cooper, Robert E. Isner, Cooper, Dunham, Keith & Dearborn, New York City, on the brief), for Republic Steel Corp.

Before SIMONS, Chief Judge, and ALLEN and McALLISTER, Circuit Judges.

ALLEN, Circuit Judge.

These appeals arise out of an action for injunction and accounting for infringement of Patents Nos. 1, 744, 016 and 1, 779, 195 for improvements in rolling mills, referred to hereinafter as Patents '016 and '195, issued to Abram P. Steckel. The patents relate to mills and methods of rolling steel in thin strip form. The action was brought by The Cold Metal Process Company, hereinafter called 'Cold Metal, ' an Ohio corporation, assignee of the patents, against Republic Steel Corporation, hereinafter called 'Republic, ' a New Jersey corporation doing business in Ohio. The principal defenses were invalidity of both patents, noninfringement, and immunity from infringement under a certain license hereinafter described. The patents were assigned by Cold Metal to Union National Bank of Youngstown, Ohio, as Trustee, which joined the action as party plaintiff. Both patents expired prior to the trial of this suit.

The two patents grew out of an application filed June 30, 1923, by Abram P. Steckel. At the direction of the Patent Office a division was made. Patent '016 issued January 14, 1930, on the original application; Patent '195 issued October 21, 1930, on the divisional application filed December 9, 1929.

In the District Court the case was referred to a Special Master, who heard the evidence and in a detailed report found that all of the claims of '195 were invalid for lack of novelty and invention but that, if the apparatus claims were valid, Republic infringed them by operation of eight of the accused mills. The Master found Claim 5 of '016 lacked novelty and patentable invention. All other claims of '016 in suit he considered valid.

The District Court found the method claims of Patent '195 invalid, but held that the apparatus claims presented patentable novelty and that these claims were infringed by six of Republic's mills. As to Patent '016, the District Court found that the claims in suit, with the exception of Claim 5, were valid and that five of Republic's mills infringed certain of these claims. Both the Master and the District Court concluded that as to all of the accused mills Republic was immune from any claim of infringement of either patent by virtue of a license agreement of June 20, 1927, between Cold Metal and United, from which Republic claims to have purchased all of the accused mills. The complaint was dismissed without costs to either party.

As to many points at issue the findings of fact of the Master and the District Court were concurrent. This court is bound by these concurrent findings unless they are clearly erroneous. The Master heard the witnesses for some four months. The District Court personally inspected the accused mills and the mills claimed to anticipate. The concurrent findings of fact are amply sustained by the record. The principal questions as to findings not concurrent concern the validity of the conclusions drawn from the facts. While every point urged has been carefully considered,

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we deem it unnecessary to encumber the books with a restatement of all the details clearly shown below and for amplification of the discussion upon the less important points we refer to the carefully drawn opinion of the District Court, 123 F.Supp. 525.

In general the facts are not in controversy. Cold Metal concedes that every element in the structure of the patented mills is old, that the structural proportions described are old, and that, prior to issuance of '016, tension had been used in strip rolling for winding up the strip and guiding it through the rolls.

The elaborate findings of fact of the Master and District Court in the main agree as to the physical characteristics of the patented mills, their methods of operation, the problems in the steel industry sought to be solved, the failure of the prior art mills to solve these problems, and the achievements of the Steckel teaching. Even as to Patent '195, which the Master found invalid in its entirety for lack of invention, the evidential findings of the Master in general are not contradictory to the detailed findings of the District Court.

The patents in suit relate to mills and processes for the reduction of blooms or slabs of steel into thin sheet-like metal in strip form or into commercial tin plate. Steckel uses a 4-high mill, which consists of four rolls placed one above the other. In the 4-high mill the middle rolls are the 'working rolls' and top and bottom rolls are the 'backing rolls.' The purpose of the backing rolls is to stiffen the working rolls against the deformation caused by reduction of the material rolled. In the 4-high mill the material is passed between the two work rolls, which are usually smaller in diameter than the backing rolls. Prior to Steckel the 4-high mills were generally employed only for rolling thick and heavy products, and the 2-high mills, which consist of two rolls positioned one above the other, were the most common type in use for hot and cold rolling of steel plates, sheets, and strips.

With the advent of the automobile industry steel sheets became increasingly useful and important. They are used in such equipment as automobile bodies, fenders, hoods, tops, hub caps, and also in refrigerators, metal furniture, washing machines, door and window frames, and various metal stampings. Sheets run in gauge from .1379 inches to .0123 inches and require a high surface finish. Tin plate is usually thinner than sheets, is coated with tin, and is generally rolled to between .010 inches and .0079 inches in thickness. As the reduction in thickness progresses, the difficulty of rolling steel into thin sheets or strips is intensified. In ratio of width to thickness 400 to 1 is accepted as the dividing line between low-ratio and high-ratio material. Tin plate is high-ratio material.

The Master found and the record shows that the rolling of thin material in strip form is a specialized art, involving problems not presented in rolling plates, bars, billets, and the heavier steel products. Extremely high standards of accuracy are required in rolling strip. If the operation is off gauge a part may be cracked. The Master found in effect, and it is undisputed, that in rolling strip, variations of thickness measurable only in ten-thousandths of an inch will cause irregularities which render the material unfit for commerce, while no such requirements as to accuracy of gauge exist for the reduction of steel billets.

Long before the patents in suit were issued there had been a demand, completely unsolved, for high-ratio material of high quality and low price. The District Court called the demand for less expensive thin metal strip 'insistent' and stated that the industry appeared to be helpless over a period of many years to overcome the 'technological block' in the cold rolling of thin strip. In the three methods of strip and tin plate rolling used before Steckel, hot pack rolling, hot strip rolling, and cold strip rolling, as found by the District Court, the industry had never been able to secure speed of operation, accuracy of gauge, a minimum

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of scrap, and the elimination of expensive and time-consuming annealing. In the not pack rolling, for instance, a manual process which Judge McVicar, in Cold Metal Process Co. v. United Engineering & Foundry Co., D.C., 3 F.Supp. 120, 122, called 'a man-killing job', 240 feet per minute was the maximum speed. In the hot strip rolling heating of the roll caused the strip to buckle and riffle, the lengths produced were short, and the width was around 24 to 28 inches. The ratio of width to thickness was approximately 200 to 1. In cold strip rolling while a better product was secured with smoother finish and greater length than in hot strip rolling, and widths up to 28 inches were possible, it was usually necessary from time to time to suspend the operation and anneal the steel to allow further cold rolling. Otherwise, the reduction could not continue. From one to seven annealings were usually required, and the process often took four weeks. As the former General Works Manager of a leading steel company testified, in reducing a low carbon strip 12 inches wide and .109 inches thick to a final thickness of .015 inches, the practice would be as follows:

'We would reduce from .109 to .070 and anneal. From .070 to .048 and anneal. From .048 to .030 and anneal. . 030 to .020 and anneal. And from .020 to .015; making a a total of four anneals.'

100 to 165...

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