484 F.2d 407 (6th Cir. 1973), 72-1892, Dunlop Co., Ltd. v. Kelsey-Hayes Co.

Docket Nº:72-1892, 72-1893.
Citation:484 F.2d 407, 179 U.S.P.Q. 129
Party Name:The DUNLOP COMPANY, LIMITED, Plaintiff-Appellant and Cross-Appellee, v. KELSEY-HAYES COMPANY, Defendant-Appellee and Cross-Appellant.
Case Date:August 24, 1973
Court:United States Courts of Appeals, Court of Appeals for the Sixth Circuit

Page 407

484 F.2d 407 (6th Cir. 1973)

179 U.S.P.Q. 129

The DUNLOP COMPANY, LIMITED, Plaintiff-Appellant and Cross-Appellee,


KELSEY-HAYES COMPANY, Defendant-Appellee and Cross-Appellant.

Nos. 72-1892, 72-1893.

United States Court of Appeals, Sixth Circuit.

Aug. 24, 1973

Argued April 9, 1973.

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John A. Young, Fort Wayne, Ind., and Ellsworth H. Mosher, Arlington, Va., for plaintiff-appellant-cross-appellee; Joseph J. Marshall, Helm, Marshall, Schumann & Vanker, Detroit, Mich., on brief for The Dunlop Co., Limited; Stevens, Davis, Miller & Mosher, Arlington, Va., of counsel.

Don K. Harness, Detroit, Mich., for defendant-appellee-cross-appellant; Hugh G. Harness, Harness, Dickey & Pierce, Detroit, Mich., on brief for Kelsey-Hayes Co.

Before PHILLIPS, Chief Judge, LIVELY, Circuit Judge, and O'SULLIVAN, Senior Circuit Judge.

LIVELY, Circuit Judge.

The subject matter of the two patents involved in this appeal is disc brakes. As originally filed, the complaint by Dunlop alleged that Kelsey-Hayes was infringing four Dunlop patents. Patent number 2,790,516 (hereafter "516) was issued to Dunlop by the United States Patent Office on April 30, 1957, application having been filed on January 22, 1951. In the application for this patent the invention was described as relating to disc brakes and disc brake assemblies for motor vehicles. It was stated that the object of the invention was to provide a disc-type brake for motor vehicles and to provide a wheel and disc brake assembly for motor vehicles. Patent number 2,921,650 (hereafter " 650) was

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issued to Dunlop by the United States Patent Office on January 19, 1960, application having been made on September 14, 1954. This application recited that the invention related to disc brakes, and more particularly to disc brakes for heavy vehicles, rolling stock, industrial machinery and the like.

In its answer Kelsey-Hayes asserted that the patents were invalid and denied infringement. It also pled a number of affirmative defenses under 35 U.S.C.§§ 102 and 103 and further charged Dunlop with inequitable conduct and violation of the antitrust laws of the United States. In addition to asking that the patents in suit be declared invalid and not infringed, Kelsey-Hayes sought treble damages against Dunlop and its attorneys' fees in the action.

Issues of validity and infringement with respect to all four patents were decided by the District Court, but the rulings with respect to the "516 and " 650 patents only have been appealed. The District Court held that "516 is invalid and has not been infringed, and that "650 is valid, but that it has not been infringed by Kelsey-Hayes. Although Dunlop has been a pioneer in the development of automotive disc brakes, neither of the patents in controversy relates to the primary invention of the disc brake. What is involved are certain features of so-called "fixed caliper disc brakes." Prior to World War II drum or shoe brakes were used almost universally on automobiles both in Europe and the United States. During the war disc brakes were developed for military aircraft and both Dunlop and Goodyear Aircraft Corporation, a subsidiary of Goodyear Tire and Rubber Company, were extensively involved in the production of disc brakes for this purpose. The wartime success with disc brakes on aircraft produced an interest in the adaptation of such brakes to automobiles. Dunlop was the leader in England in the development and production of disc brakes which were used on English and European sports cars. The Jaguar was equipped with disc brakes and Dunlop granted licenses to several European automobile manufacturers who equipped their products with Dunlop disc brakes. An exclusive license for automotive use in the United States was granted by Dunlop to Bendix Corporation and this applied to then existing as well as subsequently issued patents.

There was serious resistance to the use of disc brakes in the American automobile industry, based primarily on the fact that disc brakes then in production were designed for the generally lighter European cars and it was felt that they would not perform effectively on the heavier and more powerful cars produced in this country. In January 1961 at a convention of engineers in Detroit an official of Dunlop made a speech in which he discussed automotive disc brakes. Kelsey-Hayes was a leading manufacturer of automotive drum brakes in the United States, and following the Detroit speech, its officers made contact with officers of Dunlop concerning the possibility of further development of the disc brake industry in this country. There were a number of visits back and forth between the personnel of Kelsey-Hayes and Dunlop, and Dunlop released a large quantity of technical information about automotive disc brakes to Kelsey-Hayes. Because Bendix had an exclusive license in the United States from Dunlop, the only way that Kelsey-Hayes could enter the business using Dunlop patents was to obtain a sublicense. On or about July 1, 1963 Bendix did sublicense Kelsey-Hayes under the patents in litigation. Kelsey-Hayes canceled the sublicensing agreement on December 31, 1965, and Dunlop claims that it has been infringing continuously since that date.

The disc brakes and assemblies involved in the disputed patents may be described generally as consisting of a disc or rotor which is attached to the axle and turns with the wheel, and a housing which is fixed to a stationary portion of the vehicle and is of an inverted U-shaped design and positioned so that it envelops only a portion of the

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disc. The U-shaped housing consists of a bridge-like part which is set across the top of the disc and perpendicular to its plane and arms extending downward from either side of the bridge, with the disc rotating freely within this structure. Each arm has one or more chambers or cylinders in which pistons are fitted. These pistons are aligned transversely to the plane of the disc. Friction elements or asbestos brake pads, either with or without backing plates, are placed within the housing between the disc and the pistons. Hydraulic pressure is maintained at a level when the brakes are not activated which positions the friction pads within a few thousandths of an inch from the disc. When the brake pedal is depressed additional hydraulic fluid is forced into the cylinders and this moves the pistons toward the disc. The pistons on each side of the disc then push the friction pads against the disc. This pinching or squeezing of the pads against both sides of the disc simultaneously forces the disc to stop turning, which results in a stopping of the vehicle since the disc is attached to the same mechanism as the wheel. When the friction members engage the disc, hydraulic pressure causes them to be slightly compressed against the disc. When braking is completed and the pressurization relaxed, the friction members return to their original positions.

In any braking action the contact between stationary and rotating components produces heat. In the instance of drum brakes, this heat is trapped within the drum, and constant or "hard" braking results in a loss of braking power known as "brake fade." One of the chief advantages of disc brakes is that they permit rapid and relatively unhampered dissipation of heat, thereby reducing the incidence of brake fade. One witness in this case testified that a disc brake is a mechanism which converts the kinetic energy of a moving body into heat and then dissipates that heat. The particular disc brake assemblies involved in this appeal are referred to as "fixed caliper" brake assemblies. The term "caliper" refers to the housing of the brake. Both in "516 and "650 and in the accused Kelsey-Hayes brake the caliper or housing is stationary and the movement, which occurs when braking is initiated, is confined to the pistons, the friction elements, and their backings. There are, therefore, a number of similarities between the patented Dunlop brakes and the accused Kelsey-Hayes device in terms of design and operation.

The "516 Patent

The District Court held the "516 patent invalid, and we will consider this issue first. Kelsey-Hayes, in its answer, asserted that the patents in suit are invalid under the provisions of 35 U.S.C. §§ 102(a), 102(b), and 102(g), which read as follows:

§ 102. Conditions for patentability; novelty and loss of right to patent

A person shall be entitled to a patent unless-

(a) the invention was known or used by others in this country, or patented or described in a printed publication in this or a foreign country, before the invention thereof by the applicant for patent, or

(b) the invention was patented or described in a printed publication in this or a foreign country or in public use or on sale in this country, more than one year prior to the date of the...

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