Swofford v. B & W, INC.

• Decision Date: 22 May 1968
• Docket Number: No. 23861.,23861.
• Citation: 395 F.2d 362
• Parties: Marvin K. SWOFFORD, Marion F. Wright and Essex Corporation, d/b/a the Pathfinder Company, Appellants, v. B & W, INC., Appellee. B & W, INC., Appellant, v. Marvin K. SWOFFORD, Marion F. Wright and Essex Corporation, d/b/a the Pathfinder Company, Appellees.
• Court: U.S. Court of Appeals — Fifth Circuit

395 F.2d 362 (1968)

Marvin K. SWOFFORD, Marion F. Wright and Essex Corporation, d/b/a the Pathfinder Company, Appellants, v. B & W, INC., Appellee.

B & W, INC., Appellant, v. Marvin K. SWOFFORD, Marion F. Wright and Essex Corporation, d/b/a the Pathfinder Company, Appellees.

No. 23861.

United States Court of Appeals Fifth Circuit.

May 22, 1968

Jack W. Hayden, Coke Wilson, Hayden, Pravel, Wilson & Matthews, Carlos A. Torres, Houston, Tex., for plaintiffs-appellees.

Tom Arnold, Houston, Tex., R. Douglas Lyon, Lyon & Lyon, Conrad R. Solum, Jr., Los Angeles, Cal., Arnold, Roylance, Kruger & Durkee, Houston, Tex., for defendant-appellant.

Before WISDOM and GOLDBERG, Circuit Judges, and SEALS, District Judge.

WISDOM, Circuit Judge:

The plaintiffs (for convenience collectively referred to here as Swofford) brought this patent infringement action in March 1961 against B & W, Inc.¹ The district court denied B & W's motion to strike Swofford's jury demand. On an interlocutory appeal we affirmed the action of the district court and held that Swofford was entitled to a jury trial on the issues of validity and infringement. Swofford v. B & W, Inc., 5 Cir. 1964, 336 F.2d 406, cert. denied, 379 U.S. 962, 85 S.Ct. 653, 13 L.Ed.2d 557. On remand, at the close of the evidence the questions of novelty, utility, and nonobviousness were framed in several interrogatories which, with the appropriate instructions by the court, were propounded to the jury. The jury found that the patent in issue was for a novel, useful, and nonobvious² invention. These findings, however, were not "the end of the matter."³

The district judge disregarded the express jury findings concerning nonobviousness under the following rationale:

The ultimate issue of whether a patent meets the requisite standard of invention is a question of law rather than one of fact. * * * However, while invention is a question of law, what the prior art was and what the patentee did to improve upon it are questions of fact. * * * 251 F.Supp. at 815.

The critical question now to be decided as a matter of law by this Court is whether what Swofford and Wright have done to improve upon the prior art as it existed on June 4, 1954 rises to the standard of invention as defined by statute and in the courts. The answers of the jury to Interrogatories Nos. 1, 3 and 21 will have no influence upon this determination as they are in response to the ultimate question of validity, itself, which I have found to be one of law rather than of fact. 251 F.Supp. at 817.

The court went on to find the patent in issue invalid though infringed. 251 F. Supp. 811. Swofford appeals from the judgment of the district court, urging that obviousness is a question of fact for the jury rather than a question of law for the court; that the court, therefore, erred in substituting for the jury fact-finding of nonobviousness its own legal conclusion of obvious. B & W appeals from that portion of the court's decision holding that the patent was infringed. We affirm.

We agree with the district court that obviousness is a question of law, and we approve the court's conclusion that Swofford's patent was obvious to a man of ordinary skill in the art who had knowledge of all the prior devices and references. Because of our holding that the patent was invalid, we do not reach the issue of infringement.

I.

The 1952 Patent Act sets out three conditions of patentability: novelty, utility, and nonobviousness. 35 U.S.C. § 101-103. Novelty and utility are defined in sections 101 and 102; these conditions track the 1874 codification of patent law and express the traditionally applied "new and useful" tests. Novelty⁴ and utility,⁵ clearly issues of fact, have existed in the statutory scheme of patentability since the Patent Act of 1793. The term "nonobviousness", however, appeared for the first time in section 103 of the 1952 act. It expresses the third condition for patentability as follows:

§ 103. Conditions for patentability; non-obvious subject matter

A patent may not be obtained though the invention is not identically disclosed or described as set forth in section 102 of this title, 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. Patentability shall not be negatived by the manner in which the invention was made.

In 1966, in its first patent decision in many years, the Supreme Court extensively analyzed the background and nature of section 103. Graham v. John Deere Co., 383 U.S. 1, 86 S.Ct. 684, 15 L.Ed. 2d 545.⁶ The Court concluded that while Congress focused upon "non-obviousness" rather than "invention" as characterizing the proper standard, both terms "place emphasis on the pertinent art existing at the time invention was made and both are implicitly tied to advances in the art."⁷ 383 U.S. at 14, 86 S.Ct. at 692. The court then observed:

While the ultimate question of patent validity is one of law, * * * the § 103 condition, which is but one of three conditions, each of which must be satisfied, lends itself to several basic factual inquiries. Under § 103, the scope and content of the prior art are to be determined; differences between the prior art and the claims at issue are to be ascertained; and the level of ordinary skill in the pertinent art resolved. Against this background, the obviousness or nonobviousness of the subject matter is determined. 383 U.S. at 17, 86 S.Ct. at 694.

The question here presented for our resolution is: By whom is the obviousness or nonobviousness of the subject matter to be determined?

A. The issue of nonobviousness or invention has at various times, been held to present a legal,⁸ factual⁹ or mixed¹⁰ question. The Supreme Court at first took the position that the issue was one of fact. In Keyes v. Grant, 1886, 118 U.S. 25, 37, 6 S.Ct. 974, 981, 30 L.Ed. 54, the Court stated:

It was insisted by the patentees that no such arrangement and combination were to be found in the prior art, and that the improvement which they constituted was not the result of mere mechanical skill, but sprung from a genuine effort of invention; and this view was supported by the opinion of many experts skilled in the art. In our opinion, this was a question of fact, properly to be left for determination to the jury, under suitable instructions from the court upon rules of law which should guide them to their verdict.

With one exception,¹¹ this view was followed until 1950.¹² In that year the Court decided Great Atlantic & Pacific Tea Co. v. Supermarket Equip. Corp., 340 U.S. 147, 71 S.Ct. 127, 95 L.Ed. 162. Although the relevant holding in that case is less than crystal clear,¹³ the Court has since cited the A&P case as direct authority for the proposition that "the ultimate question of patent validity is one of law." Graham v. John Deere Co., 1966, 383 U.S. 1, 17, 86 S.Ct. 684, 694, 15 L.Ed.2d 545, 556. This proposition has since stood unchallenged.

B. Swofford argues that this statement in Graham is not inconsistent with the proposition that obviousness is a fact question.¹⁴ One court has properly observed, however, that "it becomes apparent that the confusion arising from the attempt to phrase the proper standard governing the determination of patentable invention stems from the indiscriminate use of mere labels, which in themselves are not conclusive." Armour & Co. v. Wilson & Co., 7 Cir. 1960, 274 F.2d 143, 155. Deller suggests approaching this confusion by "breaking the question of patentable invention down into its component parts: what the prior art was and what the patentee did to improve upon it and then whether what the patentee did is properly to be classified as an invention." Deller's Walker on Patents § 105, at 67 (2d ed. 1964). The Seventh Circuit, sitting en banc to consider the precise question presented to this Court in the instant case, regarded the "component parts" of what constitutes invention (or nonobviousness) as follows:

The first part relates to the showing made by the prior art before the patentee produces his invention. This is to be determined upon the basis of testimony and documentary or physical exhibits. The testimony relates to the use made of the prior art, and the documentary and physical exhibits do not stand mute but speak for themselves. Upon review, these are facts subject to Rule 52(a) and the exception found in the "Documentary Rule."

The next element is concerned with the nature of the improvement the patentee has made over the prior art. Has he taught anything that is different? If there is no improvement, the patent is anticipated under Section 102 of the Patent Act. If there is an improvement, we look to Section 103 to see whether there is a difference or to ascertain the nature of the improvement over the prior art. The determination of this element of "novelty" usually finds its genesis in expert testimony and as such is a question of fact, and on appeal, is within the scope of Rule 52(a).

* * * * * *

The final step involves the resolution of the meaning of Section 103 of the Patent Act to determine, from the language of the statute, whether "the differences between the subject 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." This requires the application of the correct legal criteria to the factual determination made by the trial court. This calls for the exercise of a legal judgment and as such is subject to review by an appellate tribunal as a question of law.

C. Swofford tells us, however, that the Fifth Circuit's decisions hold that invention is a question of fact for the jury. While there is some truth in this statement, for the most part...