Steelcase, Inc. v. Delwood Furniture Co., Inc.

• Decision Date: 08 August 1978
• Docket Number: Nos. 75-2170,76-3061,s. 75-2170
• Citation: 578 F.2d 74,199 U.S.P.Q. 69
• Parties: STEELCASE, INC., a corporation, Plaintiff-Appellant Cross-Appellee, v. DELWOOD FURNITURE CO., INC., a corporation, Defendant-Appellee Cross-Appellant. STEELCASE, INC., a corporation, Plaintiff-Appellant, v. DELWOOD FURNITURE COMPANY, INC., a corporation, Defendant-Appellee.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 74

578 F.2d 74

199 U.S.P.Q. 69

STEELCASE, INC., a corporation, Plaintiff-Appellant Cross-Appellee, v. DELWOOD FURNITURE CO., INC., a corporation,

Defendant-Appellee Cross-Appellant.

STEELCASE, INC., a corporation, Plaintiff-Appellant, v. DELWOOD FURNITURE COMPANY, INC., a corporation, Defendant-Appellee.

Nos. 75-2170, 76-3061.

United States Court of Appeals, Fifth Circuit.

Aug. 8, 1978.

James A. Mitchell, Lloyd A. Heneveld, Grand Rapids, Mich., for plaintiff-appellant in Nos. 75-2170 and 76-3061.

W. J. Sullivan, Jr., Birmingham, Ala., for plaintiff-appellant in No. 75-2170.

Hugh P. Carter, Birmingham, Ala., Garrett R. Tucker, Jr., Alan D. Rosenthal, Houston, Tex., for defendant-appellee in Nos. 75-2170 and 76-3061.

Frank B. Pugsley, Houston, Tex., for defendant-appellee in No. 76-3061.

Appeals from the United States District Court for the Northern District of Alabama.

Before SKELTON ^*, Senior Judge, and FAY and RUBIN, Circuit Judges.

ALVIN B. RUBIN, Circuit Judge:

A chair manufacturer who deliberately copied the highly successful chair being marketed by a competitor justifies his actions on the basis that the patents for the chair he copied were invalid. National policy encourages competition on the theory that the battle of the marketplace benefits consumers. Because every patent creates a monopoly, Congress has balanced the encouragement of inventions with its devotion to competition, ¹ and exacted standards for patent validity that deny patent protection even to some successful and innovative ideas. Thus, patentability requires that an invention be useful and novel, as defined in 35 U.S.C. §§ 101 and 102, and nonobvious. 35 U.S.C. § 103. Graham v. John Deere Co., 1966, 383 U.S. 1, 12, 86 S.Ct. 684, 691, 15 L.Ed.2d 545; Gaddis v. Calgon Corp., 5 Cir. 1975, 506 F.2d 880. The trial court found the patents invalid for their failure to meet the standard of nonobviousness. Finding his fact findings supported by the record and his legal conclusions correct, we affirm.

I.

Steelcase obtained a design patent (843) ² and a utility patent (499) ³ covering shell type office chairs consisting of a three-dimensional molded plastic shell with integral seat and back, reminiscent of an egg or claim shell, mounted on a pedestal type base. Steelcase marketed this as its 451 series. The chair was lower priced than competitive models and found a ready market. Indeed, it was perhaps the most successful model ever offered on the American market. Delwood Furniture noted Steelcase's success and copied the chair.

The asserted patentable distinction between the Steelcase 451 chair and prior shell chairs is that the 451 chair consists of two independent shells, the inner one providing support and the outer one designed for appearance or decorative effect. Although the two separate chairs appear to the user to be a single unit, they are attached to form what Steelcase calls a "chair within a chair." The inner chair is a structurally complete shell chair designed with sufficient thickness and rigidity to bear the entire load of the body of the user. It could, by itself, serve adequately as a chair. This shell is placed inside a non-load bearing decorative exterior shell having sufficient thickness and rigidity only to hold a desired configuration.

Because the outer chair carries no load, the designers can sculpture it so as to make it aesthetically pleasing, without regard to strength or conformity to the user's anatomy. The chair can be provided with arms, each arm being a continuous member connected at the back and seat of the chair in a concealed manner by notching the structural shell and by wrapping the arm members around to the rear of the structural shell and attaching it. (The arms are discussed more fully in Part V dealing with the design patent). Virtually every reader of this opinion will have seen one of these chairs in offices of contemporary design.

In the first trial, completed in July, 1974, the design patent (843) was held invalid as an obvious alteration, modification or combination of prior art. The trial court discussed each of the eighteen claims in the utility patent (499) and held eleven either invalid or not infringed but found seven claims valid and infringed. After a supplemental hearing in which the district court found no patent misuse, both parties appealed.

Delwood then discovered a Belgian patent that it contended was relevant and obtained permission to move for a rehearing before the district court. That court granted a rehearing limited to consideration of issues raised by discovery of the Belgian patent; it then reversed its earlier findings with respect to the seven claims in the utility patent and held them invalid as obvious. Although these claims of the utility patent were not anticipated by the express claims of the Belgian patent, the district court held, "(t)he process for manufacture, as reflected in the Belgian patent . . ." made obvious the development of the claims in the utility patent. It reached this conclusion by considering what was implicit in the claims of the Belgian patent although only explicit claims could be considered on the question of anticipation. See Reeves Bros., Inc. v. U. S. Laminating Corp., E.D.Pa.1968, 282 F.Supp. 118, 136, and authority cited therein. Steelcase appealed both the trial court's decision to grant a rehearing and the conclusions reached. We consider both appeals together.

II.

As a threshold matter, we determine that the trial court acted within the range of discretion imparted to him under Rule 60(b), Federal Rules of Civil Procedure, when he granted the motion to consider the Belgian patent on the ground that it was newly discovered evidence.

The court implicitly determined that Delwood's failure to locate the Belgian patent earlier was not the result of lack of due diligence. In this it was not clearly in error. Having reached this factual conclusion, it was an appropriate exercise of his sound discretion to grant the motion. Edwards v. Joyner, 5 Cir. 1978, 566 F.2d 960; First Wisconsin Nat. Bank of Milwaukee v. Grandlich Development Corp., 5 Cir. 1978, 565 F.2d 879.

III.

Although there is a statutory presumption of validity which attaches to patents passing the scrutiny of the patent office, 35 U.S.C. § 282, the failure of that office to consider pertinent prior art references will seriously weaken it. Parker v. Motorola, Inc., 5 Cir. 1975, 524 F.2d 518; Gaddis v. Calgon Corp., 5 Cir. 1975, 506 F.2d 880. It is undisputed that the patent office did not have Belgian Patent No. 724,771 before it when it issued the utility patent or the IV and Cosco chairs when it issued the design patent. The patents in this case will, therefore, be subject to greater scrutiny in our review.

Congress has enacted a statute entitled "Conditions for patentability; non-obvious subject matter." 35 U.S.C. § 103. The statute denies patentability for non-obviousness "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." ⁴

This doctrine is not new to us. We have considered its application many times, in some instances concluding that the patent lacked non-obviousness, Kaspar Wire Works, Inc. v. Leco Engineering and Machine, Inc., 5 Cir. 1978, 575 F.2d 530; Bird Provision Co. v. Owens Country Sausage, Inc., 5 Cir. 1978, 568 F.2d 369; Robbins Co. v. Dresser Industries, Inc., 5 Cir. 1977, 554 F.2d 1289; Fred Whitaker Co. v. E. T. Barwick Industries, Inc., 5 Cir. 1977, 551 F.2d 622; Parker v. Motorola, Inc., 5 Cir. 1975, 524 F.2d 518; Garrett Corp. v. American Safety Flight Systems, Inc., 5 Cir. 1974, 502 F.2d 9; Swofford v. B & W, Inc., 5 Cir. 1968, 395 F.2d 362; Zero Mfg. Co. v. Mississippi Milk Prod. Ass'n, 5 Cir. 1966, 358 F.2d 853, and in others concluding that it was valid, Yoder Bros., Inc. v. California-Florida Plant Corp., 5 Cir. 1976, 537 F.2d 1347; Gaddis v. Calgon Corp., 5 Cir. 1975, 506 F.2d 880; Hobbs v. United States Atomic Energy Comm'n, 5 Cir. 1971, 451 F.2d 849; Stockham Valves & Fittings, Inc. v. Arthur J. Schmitt Foundation, 5 Cir. 1968, 404 F.2d 13; Smith Industries International v. Hughes Tool Co., 5 Cir. 1968, 396 F.2d 735.

Directing how the statute should be applied, the Supreme Court in Graham v. John Deere Co., 1966, 383 U.S. 1, 86 S.Ct. 684, 15 L.Ed.2d 545, held that the ultimate question of patent validity is one of law, but application of the nonobviousness test depends upon several basic factual inquiries: the scope and content of the prior art, the differences between the prior art and the law at issue, and the level of ordinary skill in the pertinent art. Obviousness or nonobviousness is to be determined against this background. ⁵ See also Sakraida v. Ag Pro, Inc., 1976, 425 U.S. 273, 96 S.Ct. 1532, 47 L.Ed.2d 784; Kaspar Wire Works, Inc. v. Leco Engineering and Machine, Inc., supra. The trial court's findings on these basic factual inquiries are controlling unless they are clearly erroneous. Rule 52(a), Federal Rules of Civil Procedure; Kaspar Wire Works, Inc. v. Leco Engineering and Machine, Inc., supra; Bird Provision Co. v. Owens Country Sausage, Inc.,supra, 568 F.2d at 372; Parker v. Motorola, Inc., supra, 524 F.2d at 531; Garrett Corp. v. American Safety Flight Systems, Inc., supra, 502 F.2d at 14.

IV. The Utility Patent 499

The conclusion that the utility patent embodies a development that was obvious necessarily turns on the consideration given the Belgian patent. As we have noted, the trial court viewed the art embodied in the foreign patent more broadly in determining obviousness than in deciding anticipation. In doing so, he was correct.

The statute requires that, to be patentable, an invention must possess novelty of subject matter. 35 U.S.C. § 102. This requires consideration of the prior...