Moleculon Research Corp. v. CBS, INC.

• Decision Date: 02 October 1984
• Docket Number: Civ. A. No. 82-289-WKS.
• Parties: MOLECULON RESEARCH CORPORATION, Plaintiff, v. CBS, INC., Defendant.
• Court: U.S. District Court — District of Delaware

594 F. Supp. 1420

MOLECULON RESEARCH CORPORATION, Plaintiff, v. CBS, INC., Defendant.

Civ. A. No. 82-289-WKS.

United States District Court, D. Delaware.

October 2, 1984.

COPYRIGHT MATERIAL OMITTED

Thomas S. Lodge, Connolly, Bove, Lodge & Hutz, Wilmington, Del., Robert X. Perry, Jr., J. Carter McKaig, Stephen H. Lorberbaum, Wilkes, Artis, Hedrick & Lane, Washington, D.C., W. Brown Morton, Jr., Warsaw, Va., for plaintiff.

Walter L. Pepperman, II, Morris, Nichols, Arsht & Tunnell, Wilmington, Del., Lewis H. Eslinger, Hugh C. Barrett, Eslinger & Pelton, New York City, Dean C. Dunlavey, Los Angeles, Cal., for defendant.

OPINION

STAPLETON, Chief Judge:

This is an action for patent infringement brought by the plaintiff, Moleculon Research Corporation ("Moleculon"), as assignee of U.S. Letters Patent No. 3,655,201 ("the '201 patent") from Larry D. Nichols, the inventor. Moleculon charges the defendant, CBS, Inc. ("CBS"), as the successor to the Ideal Toy Corporation ("Ideal"), with infringement of Claims 3, 4, 5, 6 and 9 of the '201 patent. The subject of the '201 patent, in its preferred embodiment, is a cube puzzle composed of eight smaller cublets that may be rotated in groups of four adjacent cubes, and a method by which the sets of cubes may be rotated, first to randomize, and then to restore a predetermined pattern on the six faces of the composite cube.

The issues relating to damages and other possible relief were severed and a trial was held on the issues of validity and infringement. This opinion constitutes my findings of fact and conclusions of law with respect to validity and infringement.

I. THE BACKGROUND FACTS

Nichols' interest in puzzles began at the age of five or six. His interest in the familiar "Sam Loyd 15" puzzle¹ evolved into a desire to improve on what he perceived to be its shortcomings. In particular he, considered various ways of eliminating the empty space, while allowing pieces to be moved.

During an evening stroll in the Summer of 1957, these thoughts and ideas suddenly fell into place in Nichols' mind and he conceived of a three-dimensional puzzle capable of rotational movement. Nichols quickly envisioned an assembly of eight cubes stacked in a 2 × 2 × 2 arrangement, with each of the six faces of the composite cube distinguished by a different color. He recognized that the smaller cubes would be rotated in sets of four around one of three mutually perpendicular axes. He felt immediate satisfaction at having arrived at this concept.

Nichols very quickly realized that magnets could be used to hold the cubes in assembled form yet allow rotational movement. His efforts to conceive of a feasible mechanical means of assembly proved more difficult; however, by the Fall of 1957, Nichols believed that a double tongue-in-groove arrangement could be made to work.

During the period 1957-1968, Nichols constructed several models of his puzzle, making cubes of heavy file-card type paper and affixing small magnets to the inside of the small cubes. These models confirmed the feasibility of Nichols' conception, but lacked durability. During this period he also attempted to explore mechanical alternatives, such as engaging the cubes through a tab-and-slot arrangement, but these experiments were not satisfactory.

Nichols spent the years 1959-62 as a graduate student in organic chemistry at Harvard. During this period, a few close friends, including two roommates and a colleague in the Chemistry Department, had occasion to see one of these paper models in Nichols' room and Nichols explained its operation to at least one of them.

In 1962, after completing the requirements for a Ph.D. in organic chemistry, Nichols accepted employment as a research scientist at Moleculon. In 1968, Nichols happened upon some small, strong and relatively inexpensive magnets in a retail store. Realizing that he now had access to machining equipment at work, he undertook to make a wood block prototype of his puzzle. Working after working hours, he drilled holes in the internal faces of eight small wooden blocks, inserted the magnets, properly oriented them, and glued them in. He then painted each of the six faces of the composite cube a different color. To his satisfaction, it held together nicely.

Nichols usually kept the puzzle at home, but on occasion brought it to his office to work on it or to play with it. In early January of 1969, Dr. Obermayer, the president of Moleculon, entered Nichols' office and happened to see the model sitting on his desk. He immediately expressed an interest in the puzzle, and in response, Nichols explained its workings. He asked to take it home and was given permission to do so. Obermayer asked whether Nichols intended to commercialize the puzzle. When Nichols answered in the negative, Obermayer suggested that Moleculon attempt to do so and Nichols expressed general agreement. In March of 1969, Nichols signed a written agreement assigning all his rights in the puzzle invention to Moleculon in return for a share of any proceeds of commercialization. Moleculon in turn assumed all expenses of commercializing the puzzle.

Shortly thereafter Moleculon undertook an extensive effort to commercialize the puzzle. Obermayer called Parker Brothers in February of 1969 to determine whether they had an interest in receiving for consideration puzzle ideas from outside inventors and, if so, how one should go about making a submission. Parker Brothers responded with a letter and booklet describing their general practice regarding puzzle and game submissions and on March 7, 1969, Moleculon sent Parker Brothers an actual model and a description of the cube puzzle. During the subsequent three year period, Moleculon contacted between fifty and sixty toy and game manufacturers. Among those contacted was Ideal. Moleculon sent Ideal only a generalized, non-specific description of the puzzle, and Ideal responded to the effect that it did not currently have an interest in marketing the puzzle. In fact, Moleculon did not succeed in marketing the Nichols cube.

Toward the end of 1969, Nichols began working on a patent application for his puzzle. After several drafts were exchanged between Nichols and his attorney, a patent application was filed on behalf of Moleculon on March 3, 1970. On April 11, 1972, the '201 patent covering Nichols' invention was issued.

In February or March of 1981, Obermayer first became aware of Ideal's Rubik's Cube through items in the press. Shortly thereafter, he purchased a Rubik's cube. Struck by the similarity to the Nichols' cube, Obermayer wrote to the president of Ideal calling his attention to the '201 patent. Ideal, through its patent attorney, responded that it had studied the prior art and believed that Rubik's Cube did not infringe any valid patent claims. In August 1981, Obermayer met with Ideal's chairman to discuss the possibility of Ideal licensing the '201 patent. At that meeting, Obermayer was given a copy of U.S. Letters Patent No. 3,081,089 issued to Gustafson on March 12, 1963 ("the Gustafson Patent"). When subsequent meetings between counsel for Moleculon and Ideal failed to produce an agreement, this suit was instituted. During the pendency of this litigation, Ideal was acquired by CBS.

It is not claimed that Ideal was aware of or in any way derived its Rubik's Cube from the '201 patent. On the contrary, the Rubik's Cube was first brought to Ideal's attention by an inventor's agent from England. Captivated by the puzzle, Ideal executives concluded a licensing agreement with the Hungarian state agency, Konsumex, and in February 1980, the Rubik's Cube was introduced to the trade at the International Toy Fair in New York City. The Rubik's Cube was patented in Hungary, but was marketed by Ideal in the United States without seeking the benefit of patent protection over the cube puzzle itself. Ideal did, however, obtain trademark protection for the "Rubik" name and certain of the internal mechanisms were patented.

II. THE PRESUMPTION OF VALIDITY

The '201 patent is presumed valid pursuant to 35 U.S.C. § 282. This presumption may be overcome only by evidence which demonstrates invalidity clearly and convincingly. Moreover, the Court of Appeals for the Federal Circuit has recently held that the presumption of validity is neither weakened nor destroyed by pertinent prior art not considered by the Patent and Trademark Office ("PTO"), and that 35 U.S.C. § 282 requires a court to presume that the patent is useful, novel and nonobvious as well as not subject to a statutory bar. Medtronic, Inc. v. Cardiac Pacemakers, Inc., 721 F.2d 1563, 220 U.S.P.Q. 97 (Fed.Cir.1983); Leinoff v. Louis Milona and Sons, Inc., 726 F.2d 734, at 738 (Fed. Cir.1984) citing Stratoflex, Inc. v. Aeroquip Corp., 713 F.2d 1530, 1534, 218 U.S. P.Q. 871 (Fed.Cir.1983); TP Laboratories v. Professional Positioners, 724 F.2d 965 (Fed.Cir.1984).

III. SECTION 102(b) BARS

The first defense raised by CBS is that the '201 patent is invalid because the Nichols cube puzzle was in public use and on sale more than one year prior to the date of the U.S. patent application. Section 102(b) provides in pertinent part that "a person shall be entitled to a patent unless —

the invention was ... in public use or on sale in this country, more than one year prior to the date of the application for patent in the United States."

The "public use" and "on sale" bars are two different defenses that must be considered separately; however, a determination of when the Nichols invention was reduced to practice is necessary in either case. The Section 102(b) bars come into play only after the invention has been reduced to practice: "An invention cannot be offered for sale until it is completed, which requires not merely its conception but its reduction to practice." Barmag Barmer Maschinenfabrik AG v. Murata Machinery, LTD, 731 F.2d 831, 838 (Fed. Cir.1984), citing Timely Products Corp. v. Arron, 523 F.2d 288, 302 (2d Cir.19...