Colortronic Reinhard & Co. v. PLASTIC CONTROLS, Civ. A. No. 77-3094-A.

• Decision Date: 23 September 1980
• Docket Number: Civ. A. No. 77-3094-A.
• Citation: 496 F. Supp. 259
• Court: U.S. District Court — District of Massachusetts
• Parties: COLORTRONIC REINHARD & CO., K. G. & Colortronic Inc., Plaintiffs, v. PLASTIC CONTROLS, INC. and Bruce A. McLean, Defendants.

496 F. Supp. 259

COLORTRONIC REINHARD & CO., K. G. & Colortronic Inc., Plaintiffs, v. PLASTIC CONTROLS, INC. and Bruce A. McLean, Defendants.

Civ. A. No. 77-3094-A.

United States District Court, D. Massachusetts.

September 23, 1980.

Arthur F. Dionne, Chapin, Neal & Dempsey, Springfield, Mass., for plaintiffs.

Robert J. Schiller, Schiller & Pandiscio, Waltham, Mass., for defendants.

OPINION

ALDRICH, Senior Circuit Judge.^*

This is an action brought for the infringement of two patents for metering and mixing plastic ingredients, Tschritter, No. 3,814,296, June 4, 1974, and Jakob, No. 3,985,345, Oct. 12, 1976, by the owner, Colortronic Reinhard Co., K.G., (Colortronic), a German limited partnership of which one Reinhard is the chief executive officer, and Colortronic, Inc., a Washington corporation (Colortronic, U. S.), the United States representative. Colortronic owns 50% of Colortronic, U. S. One Meyer is head of the latter and Reinhard and he were hand in glove so far as this action is concerned. The defendants were Plastic Controls, Inc. (P.C.I.), and P.C.I.'s principal officer and owner, Bruce A. McLean. At the conclusion of the evidence the action against McLean was dismissed. Defendants counterclaimed, seeking a declaration of invalidity of the patents, and damages for violation of the Sherman Act, 15 U.S.C. § 2, and, by motion allowed after trial, for unfair competition. Because I find the action exceptional from the standpoint of attorneys' fees, some background is in order.

P.C.I. was at one time the exclusive sales and marketing agent for Colortronic, U. S. Following discharge and accusation of withholding funds, McLean sued for back pay and recovered a judgment. Plaintiffs instituted this action and appealed from McLean's judgment, but offered to settle their obligation for a small sum plus an admission by McLean of the validity of the patents. After rejection, they increased the dollar figure, but were again refused. McLean won the appeal and plaintiffs paid. Later they offered to drop the present suit, but not to admit invalidity of the patents, or to pay attorneys' fees. Defendants refused.

Defendants' total production for which the suit was brought were four machines, two of which plaintiffs assert did not function properly. Plaintiffs' total claim, apart from the requested tripling plus attorneys' fees, is $140. In addition to the paltriness of the dollar amount, P.C.I. was, according to plaintiffs' own contentions (although defendants dispute this), in such poor shape as to pose no future threat. Defendants assert that the suit was engendered out of ill feeling, to put P.C.I. out of business, and to combat McLean's justified suit for back pay. With this in mind, I turn to the merits.

In their responsive pleading, filed in November, 1977, defendants asserted that the patents were invalid, as having been obtained by fraud on the Patent Office. While such pleading is sometimes filed as a matter of course (in violation of the Rules), that was not this case with respect to Jakob, as plaintiffs assertedly discovered only on the eve of trial. In his 1974 application for the '345 patent Jakob, an employee of Colortronic, subscribed to the usual oath to the effect that the "invention had not been described in any printed publication in any country . . . or on sale in the United States more than one year prior to this application." In point of fact, Jakob himself had written two leaflets, one a very detailed description of the device, which had been extensively distributed at the Hanover Fair in 1970. He at least participated in publishing several articles in German technical journals the year following. One had been written by Reinhard. In addition, after being on sale in Germany in 1970, the '345 device was put on sale at the National Plastics Exposition in Chicago in 1971. Both Jakob and Reinhard were present.

With this background Colortronic prosecuted the application that Jakob had signed. Colortronic was anything but a neophyte in such matters. I am abundantly persuaded that Jakob's oath was false both to his and Reinhard's, and hence to Colortronic's, knowledge at the time it was made, and was falsified for the purpose of obtaining the patent.¹ Colortronic disclaimed on the eve of trial on advice of counsel and admitted the invalidity of the patent not because it had just learned the true facts, but because it had learned that Jakob was going to testify and counsel appreciated the predicament. I am aware of the heavy burden on defendants with respect to fraud. Norton Co. v. Carborundum Co., 1 Cir., 1976, 530 F.2d 435, 444. It is fully met.

The impropriety of suing defendants on the known invalid '345 patent under these circumstances should carry over to infect the concomittant claim under the '296 patent even were that patent valid and infringed. If legally proper I would so find and hold. However, that need not be determinative. P.C.I. did not infringe the '296 patent, and I find plaintiffs must have known it did not. Claims 12 and 16, which became claims 1 and dependent claim 5 upon which suit was brought, were added with "a cover plate covering the metering chamber . . . whereby during the metering a closed metering chamber is formed," as a result of the examiner's action and citation of Walker No. 1,664,802, April 3, 1928, and for the express purpose of avoiding it.² The P.C.I. device conspicuously lacks such a cover plate. It has a traverse bar supporting the gear (one of the functions of the cover plate, and equivalent to that extent), but the bar does not form a closed chamber. Partially closed is not the same thing as closed, cf. Shields-Jetco, Inc. v. Torti, 1 Cir., 1971, 436 F.2d 1061, particularly not in view of the estoppel.³ Anyone with any patent experience knows that one cannot blow hot to the Patent office and cold to the public. I find that where Colortronic, in processing the patent, saved itself by emphasizing its cover plate, it must have known that it had no claim for infringement against a party who employed none. This is an extraordinarily unprepossessing case.

Turning to defendants' requests for affirmative relief, the '345 patent having been disposed of by the disclaimer there remains the question of validity of the '296 patent. I accept, for present purposes, the distinction over Walker effected by the cover plate. Whether the total is invention, however, is another matter. The movement and, since the spacing is fixed and predetermined, inevitably and obviously the measurement, of the additive material are effected by two eccentrically-mounted meshing gears which accept the material on one side and discharge it through an aperture on the other. Before the evidence started the court alerted plaintiffs' counsel to the desirability of having an expert because devices in common use had come to its mind as it read the patent. Counsel declined. Thereafter, on completion of his testimony, the court asked plaint...