National Rolled Thread Die Co. v. E. W. Ferry Screw Products, Inc., s. 75-2010

Citation541 F.2d 593,192 USPQ 358
Decision Date12 October 1976
Docket Number75-2011,Nos. 75-2010,s. 75-2010
PartiesThe NATIONAL ROLLED THREAD DIE COMPANY, Plaintiff-Appellant, v. E. W. FERRY SCREW PRODUCTS, INC., et al., Defendants-Appellees. The NATIONAL ROLLED THREAD DIE COMPANY, Plaintiff-Cross-Appellee. v. E. W. FERRY SCREW PRODUCTS, INC., et al., Defendants-Cross-Appellants.
CourtUnited States Courts of Appeals. United States Court of Appeals (6th Circuit)

William C. McCoy, Jr., Bosworth, Sessions & McCoy, Stephen A. Hill, Cleveland, Ohio, for National Roller Thread Die Co.

William A. Gail, McNenny, Farrington, Pearne & Gordon, Charles B. Gordon, Cleveland, Ohio, for E. W. Ferry Screw Products, Inc., et al.

Before PHILLIPS, Chief Judge, and LIVELY and ENGEL, Circuit Judges.

PHILLIPS, Chief Judge.

National Rolled Thread Die Company (National), the assignee of reissue Patent No. 26,518, brought this action against Colt Industries Operating Corp. (Colt) and several customers of Colt for infringement. Colt raised the affirmative defense that the reissue patent was invalid and unenforceable. The District Court held the reissue claims in suit to be valid, but that National failed to meet its burden of establishing infringement by a preponderance of the evidence. We affirm.

I.

The patent discloses self-pointing dies which are used in the production of gimlet point screws a threaded sharp pointed screw. The patented dies consist of a moving die and a stationary die. The moving die reciprocates back and forth with cylindrical work blanks being fed into the thread rolling machine in a vertical plane past the stationary die. The headed cylindrical work blanks, which are fed between the dies at the start of the stroke, are turned into pointed screws by the complimentary interacting surfaces of the dies. The excess blank material comes off as a twisted slug.

"Old-fashioned" dies utilized pre-pointed blanks. These blanks were necessarily formed prior to the thread rolling process by manually reducing the blanks to the desired screw length and manually forming a point on the shortened blank. The self-pointing die, which the patent discloses, utilizes cylindrical blanks without the need for manually establishing a point before the thread rolling function is performed. The thread rolling function rolls the screw thread into the blank, rolls a threaded sharp point, and severs the blank at the desired screw length.

In 1954, Sterling Die Company (Sterling), a division of Colt, began marketing a self-pointing die, the 7399 die, which would not require pre-pointed blanks. Subsequently, Reed Rolled Thread Company (Reed) also introduced a self-pointing die, the BPT die. National became aware of the development of self-pointing dies and commenced efforts to design such a die. National experimented with several variations of the self-pointing die and arrived at a viable design, the Style X die represented by the patent-in-suit.

On January 13, 1958, an application for patent, assigned to National, was filed on the Style X die and the patent issued on April 6, 1965 (No. 3,176,491). Subsequently, in light of negotiations with potential infringers, National was informed by Sterling and Reed that the 7399 and BPT dies were known and in public use before the patent filing date, and that they anticipated several claims of the patent. Consequently, National filed an application for a reissue patent on April 5, 1967, under 35 U.S.C. § 251 1 in an attempt to obtain claims which distinguish over the purported prior art dies. During prosecution of the reissue application, the examiner requested samples of the purported prior art dies before the first office action. After several objections and rejections were made by the examiner, and amendments submitted by National, the reissue patent was granted on January 14, 1969. The Patent Office retained several of the old claims and allowed ten new claims.

On September 12, 1972, National filed suit against Colt and several indemnified customers of Colt alleging infringement of claims 18, 20, 29, 30, and 31 of its reissue patent by the use of the Sterling Cut-Off die. 2 Relying on the prior art status of the 7399 and BPT dies, Colt defended on the ground of invalidity by anticipation (35 U.S.C. § 102) and obviousness (35 U.S.C. § 103). Colt also contended that claims 18 and 20 were indefinite under 35 U.S.C. § 112. Moreover, Colt alleged that National deliberately concealed from the Patent Office the prior uses of "self-pointing" dies by Reed and Sterling. They argue that the patent should be unenforceable based upon fraud or "deceptive intention" under 35 U.S.C. § 251.

Although the District Court found the 7399 and BPT dies to be prior art, the court held the reissue patent to be neither anticipated by the prior art under 35 U.S.C. § 102 nor obvious in view of the prior art under 35 U.S.C. § 103. Furthermore, the court held that claims 18 and 20 satisfied the requirements of 35 U.S.C. § 112. The court held, however, that National failed to meet its burden of establishing infringement by Colt's use of the Sterling Cut-Off die. The patented die was found to have a mode of operation which differs from the operation of the accused die. The District Court failed to make any findings of unenforceability based upon fraud or "deceptive intention." This was considered to be unnecessary in view of the court's finding of non-infringement.

II.

Colt argues that the District Court erred in finding the reissue patent to be valid. Colt makes what Chief Judge Howard T. Markey of the Court of Customs and Patent Appeals describes as a "shotgun" approach by raising practically every issue known to patent law having a bearing on validity. Special Problems In Patent Cases, 66 F.R.D. 529, 541 (1975). All of these contentions have been considered and found to be without merit.

The alleged primary errors as to validity are as follows: 1) the Court failed to consider the 7399 and BPT dies as "prior art" for purposes of establishing obviousness under 35 U.S.C. § 103; 2) the Court failed to make express factual findings of non-obviousness as required by Hieger v. Ford Motor Co., 516 F.2d 1324 (6th Cir. 1975), cert. denied, 423 U.S. 1056, 96 S.Ct. 788, 46 L.Ed.2d 645 (1976); and, 3) the Court allowed the reissue patent a presumption of validity over the 7399 and BPT dies.

Colt had a heavy burden of establishing the prior art status 3 of the unpatented 7399 and BPT dies by clear and convincing evidence, Dickstein v. Seventy Corp., 522 F.2d 1294, 1296 (6th Cir. 1975), cert. denied, 423 U.S. 1055, 96 S.Ct. 787, 46 L.Ed.2d 644 (1976); Dunlop Co. v. Kelsey Hayes Co., 484 F.2d 407, 412-13 (6th Cir. 1973), cert. denied, 415 U.S. 917, 94 S.Ct. 1414, 39 L.Ed.2d 471 (1974); Cold Metal Products Co. v. E. W. Bliss Co., 285 F.2d 244, 247 (6th Cir. 1960); United Parts Mfg. Co. v. Lee Motor Products, Inc., 266 F.2d 20, 24 (6th Cir. 1959). In view of the substantial evidence presented, we agree with the conclusion of the District Court that this burden was met. National argues that the 7399 and BPT dies cannot be considered prior art since they operated in an unsatisfactory manner; we have held, however, that an otherwise operative device can constitute prior art even if it has "imperfections and encounters commercial difficulties". Dunlop, supra, 484 F.2d at 413.

Notwithstanding the prior art status of the 7399 and BPT dies, Colt had the additional burden of establishing invalidity under either 35 U.S.C. § 102 (anticipation) or 35 U.S.C. § 103 (obviousness) in view of these prior art dies. The District Court's opinion indicates that both prior art dies were considered by the Court in arriving at its conclusion that Colt failed to meet its burden of establishing invalidity under either of these two sections. The court stated:

The principal defense in this action is that the patent in suit is anticipated by the Sterling 7399 die, and that the claimed invention was obvious in light of the 7399 die. 35 U.S.C. § 102. To a lesser degree, the same arguments are based upon the Reed BPT die. (Emphasis added.)

Accordingly, we reject Colt's argument that neither the 7399 die nor the BPT die was considered by the District Court for purposes of establishing obviousness under 35 U.S.C. § 103.

There can be no doubt that a District Court should make express factual findings when the question of obviousness is raised, before proceeding to the conclusions of law. Graham v. John Deere Co., 383 U.S. 1, 17, 86 S.Ct. 684, 15 L.Ed.2d 545 (1966); Hieger, supra, 516 F.2d at 1327. These findings should comprise the "scope and content of the prior art", the " differences between the prior art and the claims at issue", and the "level of ordinary skill in the pertinent art". Id. In the instant case, the District Court made several factual inquiries which meet the requirements of Hieger. Accordingly, we reject Colt's second argument. 4 The Court's findings are as follows:

1) the only pertinent prior art, whether patented or unpatented, is the 7399 and BPT dies; 2) the differences between the patented die and the prior art dies consist mainly in the Z angle and the point of separation of the slug and the forming screw; and, 3) the level of ordinary skill in the die design art embraces many fine points of design variation which produce material operational differences. We cannot say that these findings are clearly erroneous. We agree with the court's ultimate conclusion that these differences would be unobvious to a person skilled in the die design art.

Furthermore, we note several unobvious differences not expressly considered by the court below: the patented die's blue flat taper surface has a distinctly different shape and outline from the gold surface on the 7399 die; the patented die is relieved in front of the black flat taper surface, whereas the comparable surface on the 7399 die is threaded and located at the same level as the yellow surface; the...

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