Monon v. Stoughton Trailers

• Citation: 57 USPQ2d 1699,239 F.3d 1253
• Parties: (Fed. Cir. 2001) MONON CORPORATION and ROSBY CORPORATION, Plaintiffs-Cross Appellants, v. STOUGHTON TRAILERS, INC., Defendant-Appellant. 00-1041, -1042 DECIDED:
• Decision Date: 07 February 2001
• Court: United States Courts of Appeals. United States Court of Appeals for the Federal Circuit

Page 1253

239 F.3d 1253 (Fed. Cir. 2001)

MONON CORPORATION and ROSBY CORPORATION, Plaintiffs-Cross Appellants, v. STOUGHTON TRAILERS, INC., Defendant-Appellant.

00-1041, -1042

United States Court of Appeals for the Federal Circuit

DECIDED: February 7, 2001

Appealed from: United States District Court for the Northernaukee,District of Illinois

Judge Ronald A. Guzman

Lee F. Grossman, Grossman & Grossman, of Chicago, Illinois, argued for plaintiff-cross-appellant. With him on the brief was Mark M. Grossman.

Jonathan H. Margolies, Michael, Best & Friedrich LLP, of Milwaukee, Wisconsin, argued for defendant-appellant.

Before MICHEL, RADER, and SCHALL, Circuit Judges.

MICHEL, Circuit Judge.

This appeal requires our determination of whether a patentee submitted sufficient evidence to preclude the grant of summary judgment of invalidity due to the on-sale bar. Oral argument was heard on October 3, 2000. Because we find that the patentee raised a genuine issue of material fact as to whether its sale of a tractor truck trailer prior to the critical date of its patent was primarily experimental, and thus was not a "commercial sale" for the purposes of 35 U.S.C. § 102(b), we reverse the trial court's grant of summary judgment and remand for further proceedings on validity and infringement consistent with this opinion. However, we affirm the trial court's judgment, following a bench trial, that the patentee did not engage in inequitable conduct before the PTO, because the judgment is based on a finding of lack of deceptive intent that is not clearly erroneous.

HISTORY OF THE CASE

On January 26, 1995, Monon Corporation and Rosby Corporation (collectively "Monon") filed suit against Stoughton Trailers, Inc. ("Stoughton") in the United States District Court for the Northern District of Illinois for infringement of their U.S. Patent No. 4,904,017 ("the '017 patent") for making and selling the patented trailer. Stoughton counterclaimed for declaratory judgments of invalidity, noninfringement, and unenforceability due to alleged inequitable conduct during the prosecution of the application that issued as the '017 patent.

Following discovery, the district court issued a memorandum opinion and order granting Stoughton summary declaratory judgment of invalidity. The court held that claims 1 through 4 of the '017 patent were invalid because, in violation of 35 U.S.C. § 102(b), Monon had sold a trailer embodying the claimed invention more than one year prior to February 26, 1985, the date on which Monon filed the patent application. Monon Corp. and Rosby Corp. v. Stoughton Trailers, Inc., No. 95-C-511 (N.D. Ill. Feb. 7, 1996) ("Monon I"). On February 16, 1996, Monon and Stoughton agreed on the record before the district court that the court's February 7, 1996 Order rendered Monon's infringement claim moot. The district court therefore did not adjudicate Monon's infringement claim, either pursuant to Stoughton's summary judgment motion or by trial. On March 7, 1996, the district court denied Monon's motion for reconsideration of the February 7, 1996 Order and also denied Monon's motion for leave to seek interlocutory appeal before this court.

After a bench trial, the district court denied relief on Stoughton's counterclaim for a declaratory judgment of unenforceability for inequitable conduct. Monon Corp. and Rosby Corp. v. Stoughton Trailers, Inc., No. 95-C- 511 (N.D. Ill. Sept. 27, 1999) ("Monon II"). On September 28, 1999, the district court entered final judgments, in favor of Stoughton on its invalidity counterclaim, and in favor of Monon on Stoughton's unenforceability counterclaim.

Stoughton appeals from the district court's adverse judgment on its unenforceability counterclaim. Monon cross-appeals the summary declaratory judgment of invalidity. Because Stoughton has failed to show that the district court committed clear error in finding that the inventor and his attorney had not acted with deceptive intent, on the appeal we affirm the district court's declaratory judgment of no inequitable conduct. However, because the district court impermissibly resolved genuinely disputed material issues of fact regarding alleged experimental use, on the cross- appeal we reverse the summary judgment of invalidity and remand for further proceedings.

BACKGROUND OF THE INVENTION

Monon and Stoughton both manufacture large enclosed trailers that are used to contain cargo as it is hauled over roads by large trucks, or "tractors." As disclosed in the '017 patent, the standard practice in the tractor- trailer shipping industry is to load the trailer with freight that has previously been secured upon standard-sized shipping pallets measuring 56" x 44". By pre-loading the freight onto pallets, the time required to load the trailer is reduced. When loaded into the trailer, the pallets are arranged in two rows running the length of the trailer.The internal width of prior art trailers was only large enough to accommodate two rows of standard pallets if the pallets were oriented so that their shorter dimension (44") was parallel to the trailer's width, and their longer dimension (56") was parallel to the trailer's length. Trailers constructed using the standard prior art design are referred to as "sheet and post" trailers because the structural integrity of the trailer body is provided by 1.5" thick vertical posts spaced along the sidewalls of the trailer at 24" intervals. These posts support the weight of the freight, provide support for the roof, and also for the 0.05" thick aluminum "sheets" that are joined to the posts to form the outer walls of the trailer. The thickness of the posts intrudes upon, and reduces, the width available for cargo space. As a result, the only way that two standard pallets will fit within the 98.5" wide cargo area of a standard sheet and post trailer is if they are both oriented with their shorter dimension running the width between the posts.

In 1983, Continental Can, a tractor-trailer transport company, approached several trailer manufacturers, requesting that a trailer be designed and built with a cargo area that had greater width so that one of the two rows of pallets could be loaded with the longer dimension of the pallets aligned with the trailer's width, i.e., with one of the two rows of pallets rotated 90 degrees relative to the standard loading arrangement. By doing so, such a trailer could accommodate 25 standard pallets, whereas prior art trailers were limited to 22. However, the outer width of a trailer cannot be increased due to governmental highway-use regulations, and therefore any increase in internal width had to be gained by reducing the thickness of the trailer's sidewalls or vertical support posts. Of the several trailer manufacturers that Continental approached, only Monon was willing to investigate a design lacking the thick side posts of prior art trailers. The other trailer manufacturers were unwilling to dispense with the thick side posts because they believed that without the support provided by the posts, a loaded trailer would probably "break in half."

Rodney P. Ehrlich, the inventor named on the '017 patent, was Monon's Vice President of Engineering when Continental asked Monon to design and build a trailer with a wider cargo area. In satisfying Continental's request, Ehrlich designed a trailer in which the thick side posts were eliminated, thereby increasing the width available for cargo. Ehrlich accomplished this by using thicker sidewall panels, 0.19" rather than 0.05", that are stressed along their entire width to provide support for the cargo and trailer body. These sidewalls of thicker spliced aluminum panels connect the trailer's roof to its undercarriage, provide the trailer's structural support, and eliminate the need for the thick posts of prior art designs. Ehrlich referred to this design as the "plate trailer" because its sidewalls are comprised of aluminum panels, approximately 0.19" thick, connected by splice plates, also approximately 0.19" thick. Thus, the sidewalls of Ehrlich's plate trailer are approximately 0.38" thick, while the sidewalls of a prior art sheet and post trailer are approximately 1.55" thick, including the posts. Ehrlich's design increased the interior width available for cargo to more than 101", sufficient to accommodate the wider dimension of one pallet, 56", plus the narrower dimension of the other of each side-by-side pair, 44". Continental's Douglas Werner, who was designated as a witness by Stoughton, acknowledged that Ehrlich's design was a "radical departure" from sheet and post trailers.

On December 19, 1983, Continental contracted with Monon to purchase one plate trailer for $18,490.00, with the intention of purchasing an additional 300 once the trailer's durability had been proven in actual, normal use in Continental's fleet of tractor-trailers. Monon constructed the first trailer in January and February of 1984. This sample trailer was delivered to Continental in April 1984, at a final price of $18,640.00. In December 1984, after the strength and durability of the plate trailer had been successfully proven, Continental ordered 300 plate trailers. Later, in February 1985, Monon received the first trailer back from Continental for inspection.

On February 26, 1985, the patent application that issued as the '017 patent was filed.

In 1985, Ehrlich and several other Monon employees left Monon in order to form Wabash National, a trailer manufacturer that has been competing directly with Monon since its inception. Wabash is not a party to this suit.

ANALYSIS

I. The On-Sale/Public Use Statutory Bar

A. Summary Judgment

Summary judgment is appropriate where "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed. R. Civ. P. 56(c)....