684 F.2d 346 (6th Cir. 1982), 80-3170, Skil Corp. v. Lucerne Products, Inc.

Docket Nº:80-3170.
Citation:684 F.2d 346
Party Name:216 U.S.P.Q. 371 SKIL CORPORATION, Plaintiff-Appellee, v. LUCERNE PRODUCTS, INC., Defendant-Appellant.
Case Date:July 07, 1982
Court:United States Courts of Appeals, Court of Appeals for the Sixth Circuit
 
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Page 346

684 F.2d 346 (6th Cir. 1982)

216 U.S.P.Q. 371

SKIL CORPORATION, Plaintiff-Appellee,

v.

LUCERNE PRODUCTS, INC., Defendant-Appellant.

No. 80-3170.

United States Court of Appeals, Sixth Circuit

July 7, 1982

Argued Oct. 14, 1981.

Rehearing and Rehearing En Banc Denied Aug. 31, 1982.

Page 347

Richard J. Egan, Baldwin, Egan, Walling & Fetzner, Cleveland, Ohio, for defendant-appellant.

Marc L. Swartzbaugh, Jones, Day, Reavis & Pogue, Clarence J. Fleming, McDougal, Hersch & Scott, Cleveland, Ohio, for plaintiff-appellee.

Before MERRITT and JONES, Circuit Judges, and PHILLIPS, Senior Circuit Judge.

NATHANIEL R. JONES, Circuit Judge.

This is an appeal from a decision of the district court holding U.S. Patent No. 3,209,228 valid. The report of Magistrate Streepy and the opinion of District Judge Lambros are reported at 489 F.Supp. 1129 (N.D.Ohio 1980). We affirm.

I.

Background

For an extensive discussion of the facts of the case, reference is made to the magistrate's report. A summary of the pertinent facts will be stated in this opinion to the extent necessary to dispose of the issues presented on appeal.

Skil Corporation (Skil) is the owner of U.S. Patent No. 3,209,228 in the name of Alex F. Gawron (the Gawron patent). The

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Gawron patent claims a combination of elements which include (1) an electric motor, (2) a silicon controlled rectifier (SCR) speed control circuit, (3) a trigger, and (4) human feedback. These elements combine to produce an operator-controlled trigger to regulate the operating speed of a portable power tool, such as an electric drill.

The Gawron patent application was submitted on September 28, 1962. In early 1964, Lucerne Products, Inc. (Lucerne) exhibited a speed control device before Skil officials which, like the speed control device claimed in the Gawron patent application, employed an SCR speed control circuit and a trigger operated through human feedback. The Lucerne device also had an additional desirable feature in that it was available in a "retrofit package" which would permit the speed control device to be inserted in the handle of a portable tool. Although the Gawron patent application had noted that the speed control device claimed therein could be "mounted in a handle," the location or packaging of the speed control device was not an element of the combination patent, and the Gawron patent prototype did not have the speed control elements housed exclusively in the handle of the tool.

Skil and Lucerne entered into negotiations, and on March 2, 1964, Skil ordered 100,000 of the Lucerne speed control switches at $3.00 a unit. Since Lucerne lacked production facilities, Skil assisted Lucerne in their creation and advised Lucerne to make certain refinements in the speed control device.

On March 3, 1964, Skil amended its initial application by cancelling certain claims and adding two new claims. In the supporting remarks, Skil noted that the Gawron device "is small and compact and readily lends itself to mounting within the handle of the tool without causing heating of the handle." Skil further asserted that the Gawron device provided for the first time an extremely compact, trigger-operated control system which could be mounted in the handle of a power tool. On November 24, 1964, the patent examiner denied the amended claims of the Gawron patent application.

On March 26, 1964, Lucerne filed a patent application covering its speed control device. Like the Gawron patent application, none of the claims in the Lucerne patent application included the placing of the speed control circuitry into the handle of a power tool as an element of the claimed invention.

On March 9, 1965, Skil and Lucerne entered into an agreement which provided that counsel for the parties would make a mutual disclosure of their respective patent applications, determine whether there was common subject matter, and, if so, compare proofs as to the date of inventorship. In the event they could not agree as to which party was entitled to the claims, the Patent Office would be requested to set up an interference to determine the same. In the event a patent was issued to either Skil or Lucerne, the party owning the patent would grant to the other party a nonexclusive license to make the control switch units for a royalty of three percent, or lower in case another license was granted for a lower royalty.

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