Tights, Inc. v. Acme-McCrary Corp.

• Citation: 541 F.2d 1047,191 USPQ 305
• Decision Date: 12 July 1976
• Docket Number: No. 75-1103,ACME-M,75-1103
• Parties: TIGHTS, INC., Appellee, v.cCRARY CORPORATION et al., Appellants, and Orin R. York et al., Defendants.
• Court: United States Courts of Appeals. United States Court of Appeals (4th Circuit)

Page 1047

541 F.2d 1047

191 U.S.P.Q. 305

TIGHTS, INC., Appellee, v. ACME-McCRARY CORPORATION et al., Appellants and Orin R. York et al., Defendants.

No. 75-1103.

United States Court of Appeals Fourth Circuit.

Argued June 9, 1975.

Decided July 12, 1976.

Simon H. Rifkind, New York City, Paul B. Bell, Charlotte, N.C. (Floyd A. Gibson,

John L. Sullivan, Jr.; Parrott, Bell, Seltzer, Park & Gibson, Charlotte, N.C., Bernard Ouziel; Paul, Weiss, Rifkind, Wharton & Garrison, New York City, Thornton H. Brooks; Brooks, Pierce, McLendon, Humphrey & Leonard Greensboro, N.C., on brief), for appellants.

Jack W. Floyd, Greensboro, N.C. (Richard W. Ellis, James A. Medford, Smith, Moore, Smith, Schell & Hunter, Greensboro, N.C., on brief), for appellee.

Before RUSSELL, FIELD and WIDENER, Circuit Judges.

WIDENER, Circuit Judge:

This appeal concerns the validity of Rice Patent No. RE 25,360 covering unitary ladies' garments consisting of a pair of stockings formed together with a pair of underpants constructed so as to eliminate the need for garter attachments and belts. Tights, Inc., the owner of the challenged patent (hereinafter referred to as the Rice Patent), originally instituted this action against Acme-McCrary Corporation alleging patent infringement and seeking both damages and injunctive relief. Acme-McCrary, in its answer, denied infringement on the ground that the patent was invalid and consequently unenforceable. In addition, it counterclaimed for a declaration of invalidity under 28 U.S.C. §§ 2201 and 2202 and a permanent injunction against Tights restraining it from making any further allegations of infringement based upon the Rice Patent. The case was subsequently consolidated with two similar actions instituted by Tights against Kayser-Roth, a New York corporation, and Adams-Millis, a North Carolina corporation, each of which was alleged to have infringed upon the Rice Patent.

Prior to trial, the parties agreed that if the Rice Patent were upheld as valid, the defendants were guilty of infringement. Accordingly, the only questions submitted to the jury concerned the validity of the patent. Following a verdict in favor of Tights, the district court entered judgment against Acme-McCrary, Kayser-Roth, and Adams-Millis on the grounds that the Rice Patent was valid, enforceable and infringed. This appeal followed.

The appellant-defendants seek reversal on the grounds that the trial court erred in failing to rule the patent invalid as a matter of law, in submitting the question of obviousness to the jury, and in ruling as it did regarding the admissibility of certain evidence. We are of opinion the contentions are without merit and affirm the judgment of the district court.

THE RICE PATENT

Application for the Rice Patent was originally made on November 9, 1956. After being issued in 1958 with an inconsequential mistake in the claim, the patent was surrendered for re-examination prior to a second issue. On March 26, 1963, the patent was reissued as No. RE 25,360, the patent which the appellants challenge. Thus, the Rice Patent was examined by the Patent Office on two separate occasions prior to its final issuance.

The claim in the reissued Rice Patent described a combination panty and stocking formed from a circularly knit fabric which included the following elements: a pair of seamless stockings having foot, leg, and welt portions; the welt portions being knit of stretchable yarn and extending above the knee to the waist of the wearer; the stocking having a longitudinal slit and positioned so that the slits are adjacent each other; and a seam binding the corresponding front and rear edges formed by the longitudinal slits to form a U-shaped seam intermediate to a single enlarged welt and defining the panty.

While Rice spoke in terms of a "combination panty and stocking," as can be seen from the sketch below, he was, in fact, describing what has come to be known as panty hose.

(See following illustration)

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

This is not to say, however, that the Rice Patent purports to cover all such garments. To the contrary, the patent is restricted by its terms to those panty hose constructed with a single U-shaped seam running from front to back through the crotch area and having no intervening crotch-piece or gusset. That was decided in Morpul v. Glen Raven Knitting, Inc., 357 F.2d 732 (4th Cir. 1966), a suit concerning this same patent.

The significance of the unitary U seam described by Rice is reflected in the associated cost reduction in panty hose produced in this manner as opposed to those manufactured with a crotch-piece. According to witnesses appearing on behalf of Kayser- Roth, the use of the unitary U-shaped seam reduced production costs by 12 to 24 cents per dozen. Tights estimated the savings at between 20 and 25 cents per dozen. Such cost savings are substantial when considered in terms of total production. For example, in the case of Kayser-Roth, which produced an average of approximately 35,000 dozen panty hose per week in 1970, the elimination of the crotch-piece would have resulted in admitted cost savings of at least $4,200 and as much as $8,750 a week.

TRIAL COURT PROCEEDINGS

With the exception of the questions of patent validity, the parties and the court below resolved or otherwise eliminated from the trial all other issues, including the issue of infringement. Thus, the only substantive issues presented to the jury were whether the Rice Patent was anticipated by the prior art in the field and therefore not patentable under 35 U.S.C. §§ 101 and 102; whether the subject matter of the patent was obvious and consequently not patentable under 35 U.S.C. § 103; ¹ and whether fraud on the Patent Office had been committed.

The relevant statutory provisions with which the court was concerned then provide in part as follows:

§ 101. Inventions Patentable.

Whoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefor . . . .

§ 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 .. . .

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

A patent may not be obtained . . . if the difference 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. . . .

These sections establish novelty, usefulness and obviousness tests, all of which are relevant in determining the question of patentability. See Graham v. John Deere, 383 U.S. 1, 86 S.Ct. 684, 15 L.Ed.2d 545 (1965). The defendants argue that the Rice Patent does not describe any new or novel product since it was both anticipated by and obvious from the prior art in the field. Consequently, they contend that the patent was improvidently granted.

As to each of these points, however, the burden of proof is on the defendants, and the Rice Patent, having been issued by the Patent Office, is presumed valid. 35 U.S.C. § 282; Blohm & Voss AG v. Prudential Grace Lines, Inc., 489 F.2d 231, 244 (4th Cir. 1973), cert. den. 419 U.S. 840, 95 S.Ct. 70, 42 L.Ed.2d 67 (1974); White v. Mar-Bel, Inc., 509 F.2d 287, 391 (5th Cir. 1975); Moore v. Shultz, 491 F.2d 294, 298-9 (10th Cir. 1974), cert. den. 419 U.S. 390, 95 S.Ct. 203, 42 L.Ed.2d 161 (1974). The basis for this presumption was set out by the Second Circuit in Georgia-Pacific Corp. v. United States Plywood Corp., 258 F.2d 124 (2d Cir. 1958), cert. den. 358 U.S. 884, 79 S.Ct. 124, 3 L.Ed.2d 112 (1958), where the court stated: "Expertness and experience in passing upon patents lies primarily in the Patent Office and these important factors are only partially offset by the greater concentration and the additional relevant evidence which can be brought to bear in any particular patent litigation in the courts." Id. at 133. The jury, without objection, was told in the special verdict form it must find invalidity by clear and convincing evidence. Accord Moore, p. 299; see Gulf Smokeless Coal Co. v. Sutton, etc., 35 F.2d 433, 437 (4th Cir. 1929).

During the trial of the case, following some nine days of testimony, the defendants, at the close of all the testimony, moved for a directed verdict, contending the Rice Patent to be invalid. The basis for this motion was the contention that the evidence conclusively established that the patented product described in the Rice claim was fully anticipated under § 102 by the prior art in the field. ² This motion was denied and the case thereafter submitted to the jury, which was given eight interrogatories. These interrogatories inquired of the jury:

1. whether they found "the subject matter of the Rice Patent to be not new within the meaning of the word as used in the patent laws;"

2. whether they found "the subject matter of the claim of the patent was known or used by others in this country before the invention thereof by Rice;"

3. whether they found the "subject matter of the claim of the Rice Patent was patented or described in a printed publication in this or a foreign country more than one year prior to the date of the application for the patent in this suit, namely November 9, 1956;"

4. whether they found "the differences between the claim in the Rice Patent and the prior art (were) such that the subject matter of the claim as a whole would have been obvious, at the time the invention was made by Mr. Rice, to a person having ordinary skill in the art to which the subject matter of the claim pertained;"

5. whether they found...