251 F.2d 671 (9th Cir. 1957), 15540, Welch v. Grindle

Docket Nº:15540.
Citation:251 F.2d 671, 116 U.S.P.Q. 236
Party Name:C. Martin WELCH, Appellant, v. Eugene L. GRINDLE, Appellee.
Case Date:December 31, 1957
Court:United States Courts of Appeals, Court of Appeals for the Ninth Circuit

Page 671

251 F.2d 671 (9th Cir. 1957)

116 U.S.P.Q. 236

C. Martin WELCH, Appellant,

v.

Eugene L. GRINDLE, Appellee.

No. 15540.

United States Court of Appeals, Ninth Circuit.

December 31, 1957

Naylor & Neal, James M. Naylor, Frank A. Neal, San Francisco, Cal., for appellant.

Flehr & Swain, Paul D. Flehr, John F. Swain, Harold C. Hohbach, San Francisco, Cal., for appellee.

Before STEPHENS, Chief Judge, and BARNES and HAMLEY, Circuit Judges.

Page 672

BARNES, Circuit Judge.

This is an appeal 1 from a judgment of the lower court that Patent No. 2, 534, 644 2 is invalid and void. The patented article is a 'Liquid Measuring Gauge, ' commonly known in the airline industry as a 'Fuel Tank Dipstick.' The trial court, having jurisdiction, 3 held the patent invalid because:

(1) the application for patent was not filed by the true inventor;

(2) the application for patent was filed more than one year after public use of the patented article; and

(3) the patented article does not teach invention over the prior art.

Plaintiff-appellee (hereinafter called Grindle) and defendant-appellant (hereinafter called Welch) sued below by an original complaint for declaratory relief, alleging a justiciable controversy, because he (Grindle) had demanded an assignment of the Letters Patent to him; that Welch had refused to assign, and had threatened Grindle with suit if Grindle undertook the manufacture and sale of dipsticks incorporating the subject matter of the Letters Patent. By amended complaint, filed by permission of the trial court at the conclusion of the evidence (Fed.Rules of Civ.Proc. 15(b), 28 U.S.C.A.), Grindle alleged the organization of Deterjet Corporation, a corporation, with adequate financial resources, and with cost studies, tools, jigs and quotations on components, and production models of the dipstick, and an existing manufacturing operation on at least one other product. Grindle charged that Welch had threatened infringement litigation seeking to enforce the Letters Patent.

Grindle prayed that the patent be declared invalid; that it be assigned to him; that Welch be estopped to deny the validity of the patent after assignment; that Welch be enjoined from further manufacture and sale of dipsticks; that Welch render an accounting to Grindle; for costs; and for attorney's fees.

The trial court after finding the patent invalid and void denied damages because the putative damages were not proven; denied the assignment requested because the patent was void and invalid; held that the defense of estoppel barring Grindle from raising the issue of invalidity was not good; denied counsel fees and costs to Grindle; but enjoined Welch: (a) requiring him to inform past and possible future customers that said dipstick, or the substantial equivalent thereof, is not patented; (b) from claiming on the same articles by markings any existing patent, or patent proceedings pending, or advertising or suggesting in any manner that the dipsticks are patented.

Leaving for later consideration the question of whether an actual judiciable controversy did exist between the parties (28 U.S.C.A. § 2201), we turn to the evidence.

I. The Facts

Rather than discuss the factual situation leading to the issuance of the patent in suit, we are tempted to rely on the testimony of Welch, given by deposition on file herein, and merely state that Welch confessed error; that he had invented nothing. 4 But the case below was not tried on that theory, and counsel for appellant assures us a mistake in transcription was made by the shorthand reporter. We therefore will briefly consider the facts.

We adopt here the language the trial court used in his Memorandum Order:

'In 1948 the plaintiff in the instant case, Grindle, an engineer employed

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by Pan American Airways, developed at the request of his employer a dipstick, or liquid fuel column gauge, which would render more satisfactory service than those then in use. Grindle developed, apparently without knowing of the Hyde and Schmitt patents, a stick which consisted essentially of several measuring tubes, rather than one, joined in a single assembly, and made of plastic. He then contacted the defendant, Welch, at that time a representative for a plastics products firm, and handed him detailed drawings and a mock-up sample of the stick he had designed, for the purpose of securing price quotations from the defendant's employer. Defendant's employer returned the plans with the report that the particular shapes of plastic required to accommodate the plaintiff's design would be too costly to manufacture, and sent along several items of standard plastic tubing, called 'extrusions', to inquire of plaintiff whether they would be adaptable to his needs. After some experimentation and consideration of various alternative expedients, plaintiff Grindle devised a dipstick incorporating standard plastic extrusion parts. In all essentials, the dipstick as finally submitted by plaintiff Grindle to defendant Welch and the latter's employer by means of a complete sketch and mock-up sample was the dipstick incorporated ultimately in Patent No. 2, 534, 644.

'At the time of submission of the plans and mock-up of the dipstick to Welch, Grindle had no thought of patenting the stick, and no desire to keep the device secret for purposes of personal commercial exploitation or for any other purpose. He understood that because of the development work done by his employer, Pan American, through himself, the employer would receive a favorable purchase price quotation from the ultimate producer of the stick, whether that producer was to be Welch's employer of Welch himself. There was no disclosure by Grindle to Welch of any confidential nature which could lead to a recompensable breach of trust on the part of Welch.

'It appears that during the period of final development of the dipstick, Welch had formed the plan to set himself up in the dipstick manufacturing business. He did so, and commenced to supply dipsticks in conformity with the plans drawn by Grindle. There were two minor variations in the stick as delivered and the stick as designed, and these variations (consisting of the substitution of radial grooves for square cut grooves in the wooden filler which spaced the two plastic measuring tubes inside the over-all square plastic housing tube, and of the substitution of plastic cement fill for the solid end plugs which Grindle had originally designed to shut off the ends of the square housing tube) were accepted by Grindle for Pan American because they had no appreciable effect on the functioning of the dipstick as designed by Grindle. They were minor details of construction or manufacture, 'bugs', that every manufacturer encounters in the construction of his products, and that are eliminated by altering minor details which leave the product as a whole unaffected. The same is true for the protrusion of the tubes beyond the end pieces. Any skilled mechanic, or any person who has had some experience in working with plastics, could have accomplished the substitution of the cement mass for the end plugs, and the radial grooves for the square cut grooves, as well as the protrusion of the tubes beyond the end seals.

'Welch commenced production of the sticks and made his first delivery to Pan American on August 12, 1948. That date marked the beginning of public use of the dipstick. Grindle was soon thereafter assigned

Page 674

to other duties and took no further interest in the dipstick. Thereafter, on August 17, 1949, Welch filed for a patent on the dipstick swearing that he was the true inventor.' (146 F.Supp. 46.)

II. The Validity of the Patent

Welch claims that the 'concept' expressed in the Letters Patent was entirely different from the 'concept' admittedly originally presented to him by Grindle. Welch states the difference lies in (a) the substitution of radial grooves (in the supporting inner wooden filler) for square cut grooves, housing the two inner plastic tubes; (b) the substitution of plastic and cement lamination fillers for solid end plugs; (c) the substitution of tubes protruding one-eighth of an inch beyond the upper edge of the top plug for tubes flush with the upper edge.

Upon oral argument, it was admitted that the concept of the radial grooves, rather than square grooves, for the support of the inner plastic tubes came not from Welch, but from one Kerr, in 1948 a vice-president of Plastic Process Company of Los Angeles, the company for whom Welch was the San Francisco salaried sales representative, in reply to a letter Welch had written Kerr on May 3, 1948, proposing a design for a dipstick.

The trial court found that this change from a right angle wooden support for the inner plastic tubes to a rounded or radial wooden support for the same plastic tubes was 'a minor change' between the dipstick as designed by Grindle (first placed on a drawing board on April 28, 1948), and as delivered by Welch, on August 12, 1948, and subsequently, that any skilled mechanic '* * * could have accomplished the substitution.' With this conclusion we agree. It therefore becomes unnecessary for us to determine, as counsel for Welch urges, whether, granting invention to Kerr rather than Welch, the co-inventor statute saves the situation. 35 U.S.C.A. § 256. If there was no invention, the necessity of determining co-invention disappears.

The trial court likewise found the two additional variations (plastic and cement laminations, and protrusion of the tubes beyond the upper edge) were minor changes, and capable of being accomplished by any skilled mechanic, 'or any person who has had some experience working with plastics.' Again we agree. The record...

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