Ruiz v. A.B. Chance Company

• Decision Date: 29 January 2004
• Docket Number: No. 03-1333.,03-1333.
• Citation: 357 F.3d 1270
• Parties: Richard Ruiz and Foundation Anchoring Systems, Inc., Plaintiffs-Appellees, v. A.B. Chance Company, Defendant-Appellant.
• Court: U.S. Court of Appeals — Federal Circuit

357 F.3d 1270

Richard Ruiz and Foundation Anchoring Systems, Inc., Plaintiffs-Appellees, v. A.B. Chance Company, Defendant-Appellant.

No. 03-1333.

United States Court of Appeals, Federal Circuit.

Decided January 29, 2004.

Matthew A. Rosenberg, Blumenfeld, Kaplan & Sandweiss, P.C., of St. Louis, Missouri, argued for plaintiffs-appellees.

John H. Quinn III, Armstrong Teasdale LLP, of St. Louis, Missouri, argued for defendant-appellant. With him on the brief was Andrew B. Mayfield.

Before NEWMAN, MICHEL, and RADER, Circuit Judges.

RADER, Circuit Judge.

On remand from this court's decision in Ruiz v. A.B. Chance Company, 234 F.3d 654 (Fed.Cir.2000), the United States District Court for the Eastern District of Missouri found defendant-appellant A.B. Chance Company's (Chance) patented underpinning system obvious under 35 U.S.C. § 103. Because the district court made no clear error in its factual determinations concerning the motivation to combine the prior art teachings and the merit of Chance's asserted secondary considerations, this court affirms.

I.

Since about 1970, Chance has manufactured screw anchors, also called helical piers, for use in supporting and stabilizing electrical transmission towers. Screw anchors are elongated shafts with an earth-boring (screw) tip and a transversely extending load-bearing member. In 1988, Chance extended its expertise in stabilizing slumping structures into the residential and commercial building markets. Chance used screw anchors with a metal bracket to underpin these building foundations. The Chance underpinning method places the screw anchor adjacent to the footing and rotates the screw anchor to bore beneath the footing. When resistance to rotation of the screw anchor reaches a specified point, Chance attaches a metal bracket (designated as 30 in the Figure below) to the slouching foundation to transfer the building load onto the screw anchor. The United States Patent and Trademark Office issued U.S. Patent Nos. 5,139,368 and 5,171,107 to Chance in 1992 covering this screw anchor system. Figure 5 in the '107 patent shows the technology:

NOTE: OPINION CONTAINING TABLE OR OTHER DATA THAT IS NOT VIEWABLE

Appellees Richard Ruiz and his company Foundation Anchoring Systems, Inc. (collectively "Ruiz") became distributors for Chance's underpinning system. During the early 1990s, Ruiz also formed various other anchoring companies and marketed systems that competed with the Chance system. In February 1997, Chance terminated Ruiz's distributorship. Thereafter, Ruiz began marketing an underpinning system with screw anchors and metal brackets. This new system used components from other manufacturers. Ruiz filed suit against Chance in August of that same year alleging various non-patent claims, including discrimination, breach of contract, tortious interference with contract and business relations, and breach of fiduciary duty of good faith and fair dealing. Ruiz also filed for a declaratory judgment that its new underpinning system does not infringe Chance's patents and that the patents are invalid. Chance filed a counterclaim for patent infringement.

The validity question focuses on several prior art references. During the late 1980s, Richard Fuller and Stan Rupiper used screw anchors for underpinning existing structural foundations. Fuller and Rupiper used a concrete haunch, not a metal bracket, to transfer the load of the foundation to the screw anchor (the "Fuller-Rupiper method"). Gregory's U.S. Patent Nos. 4,911,580 and 4,765,777 claim an apparatus and system for underpinning structural foundations using a push pier and a metal bracket. In the Gregory system, the metal bracket transfers the foundation load to the push pier, which is driven into the ground to supply the necessary foundational support. The push pier relies on soil friction to supply that support. Figure 6 of the '580 patent shows this technology:

NOTE: OPINION CONTAINING TABLE OR OTHER DATA THAT IS NOT VIEWABLE

The scope of the claims in this case is not at issue in this appeal, because the parties agree that the claims are infringed or invalidated by the use of a screw anchor in conjunction with a metal bracket to underpin a foundation. Additional information concerning the claims and the other aspects of this case appear in this court's opinion in Ruiz v. A.B. Chance Co., 234 F.3d 654 (Fed.Cir.2000). Examination of the prior art shows that the Fuller-Rupiper method discloses the screw anchor component of the claims; the Gregory system discloses the metal bracket component in the claims. Thus, this appeal is properly focused on the motivation to combine those teachings, as well as any secondary considerations that might inform the obviousness analysis.

The district court granted summary judgment in favor of Chance on all of Ruiz's non-patent claims in April 1999. On the patent claims, the district court held a Markman hearing to construe the claims and a bench trial to decide the issues of infringement and validity. At the time of trial, the scope of the case had narrowed to focus on claims 1-4 and 6-8 of the '368 patent and claims 1-4 and 6-8 of the '107 patent. After the trial, the district court entered its judgment from the bench that Ruiz's product infringes the patent claims to the tune of $540,000 in damages. Nonetheless, the trial court determined that the claims are invalid under 35 U.S.C. § 103 in light of the Gregory patents and the Fuller-Rupiper method.

This court heard the appeal from that judgment and affirmed every holding of the district court except the finding of obviousness. In Ruiz, 234 F.3d at 660, this court remanded the case to the district court for further examination of obviousness. This court issued the following instructions:

On remand, we instruct the district court to make specific Graham findings on: 1) the reason, suggestion, or motivation present in the prior art, in the knowledge of one of skill in the art, or in the problem of foundation settling which clearly and particularly would lead one of ordinary skill in the art to combine screw anchors with metal brackets; 2) the level of ordinary skill in the art; and 3) whether, and to what extent, evidence of secondary consideration, such as commercial success, long felt but unresolved need, failure of others, copying, and unexpected results, is probative in the obviousness analysis.

Id.

The district court invited additional briefing and oral argument on the remand issues. Having reconsidered the evidence of the case, the district court again found the relevant claims invalid as obvious and issued an opinion outlining its factual findings according to this court's instructions. Of particular significance, the district court found the motivation to combine the teachings of the Gregory patents and the Fuller-Rupiper method in the nature of the problem of underpinning foundations itself, explaining:

The Rupiper method and the Gregory patent can be combined in either of two ways to reach the same result as the method covered by the patents in issue here: by replacing the concrete haunch of the Rupiper method with the bracket of the Gregory patent, or by replacing the straight piling of the Gregory patent with the screw anchor of the Rupiper method. The evidence in this case showed that there was reason, suggestion or motivation to make these combinations.... The problem is the same: how to underpin an unstable foundation of an existing building.

The district court also discounted Chance's proffered objective evidence of commercial success and skepticism of experts as weak. Specifically, the district court found that the alleged skepticism of Chance's system by Rupiper was merely an acknowledgement that Rupiper's concrete haunch worked better than a metal bracket in seismic areas, such as California. The record indeed does not show that Rupiper doubted that Chance's system would work in general. In addition, the district court attributed Chance's commercial success to its background and experience in screw anchors rather than any inventive features of the screw anchor-metal bracket system as a whole.

Chance now appeals again, arguing that the district court, as it did in its original judgment, employed hindsight to find obviousness. Specifically, this appeal involves two challenges to the district court's obviousness determination: 1) whether the district court clearly erred in finding an implied motivation to combine the prior art teachings in the nature of the problem of underpinning existing foundations, and 2) whether the district court clearly erred in discounting Chance's evidence of secondary considerations. Jurisdiction over this appeal is proper under 28 U.S.C. § 1295.

II.

Section 103 of title 35 of the United States Code states:

A patent may not be obtained ... if the differences between the subject matter sought to be patented and the prior art are such that the subject matter as a whole would have been obvious at the time the invention was made to a person having ordinary skill in the art to which said subject matter pertains.

35 U.S.C. § 103(a) (2000).

In making the assessment of differences, section 103 specifically requires consideration of the claimed invention "as a whole." Inventions typically are new combinations of existing principles or features. Envtl. Designs, Ltd. v. Union Oil Co., 713 F.2d 693, 698 (Fed.Cir.1983) (noti...