AO Smith Corporation v. Petroleum Iron Works Co.

• Decision Date: 10 November 1934
• Docket Number: No. 6330,6331.,6330
• Citation: 73 F.2d 531
• Parties: A. O. SMITH CORPORATION v. PETROLEUM IRON WORKS CO. OF OHIO. PETROLEUM IRON WORKS CO. OF OHIO v. A. O. SMITH CORPORATION.
• Court: U.S. Court of Appeals — Sixth Circuit

73 F.2d 531 (1934)

A. O. SMITH CORPORATION v. PETROLEUM IRON WORKS CO. OF OHIO.^*

PETROLEUM IRON WORKS CO. OF OHIO v. A. O. SMITH CORPORATION.

Nos. 6330, 6331.

Circuit Court of Appeals, Sixth Circuit.

November 10, 1934.

COPYRIGHT MATERIAL OMITTED

George I. Haight, of Chicago, Ill., and A. C. Paul, of Minneapolis, Minn. (Maxwell & Ramsey, of Cincinnati, Ohio, Paul, Paul & Moore, of Minneapolis, Minn., E. A. Andrus and P. O. Dunham, both of Milwaukee, Wis., and M. K. Hobbs, of Chicago, Ill., on the brief), for A. O. Smith Corporation.

A. B. Stoughton, of Philadelphia, Pa. (John Walsh, James A. Richmond, and Louis A. Spiess, all of Washington, D. C., L. B. Coppinger, of Sharon, Pa., and Day & Day, of Cleveland, Ohio, on the brief), for Petroleum Iron Works Co.

Before MOORMAN, SIMONS, and ALLEN, Circuit Judges.

SIMONS, Circuit Judge.

Two causes of action were incorporated in one suit, begun below by the A. O. Smith Corporation. The first was a patent infringement suit alleging infringement of Smith reissue patent, No. 16,865, for an "oil refining still and method of making the same by electric welding." The second was based upon wrongful and fraudulent appropriation of certain secret processes in the field of electric are welding alleged to be owned by the plaintiff, and useful in the fabrication of oil pressure vessels of the kind described in the patent. The second cause of action was, on the defendant's motion, dismissed, for the reason that the two causes were inconsistent. The original suit went forward as a patent suit, and the secret process case was reinstituted by independent bill. The two causes were, however, heard together, and both were referred to a master, who filed a separate report in each. The master held the patent invalid, but, if valid, so limited as not to be infringed. His report was confirmed by the court with respect to the finding of invalidity. From the decree the plaintiff has appealed. In the secret process suit, certain of the processes relied upon were reported by the master to be the property of the plaintiff and wrongfully appropriated by the defendant. Other processes were held not entitled to protection because within the realm of mechanical skill and so within the public domain. The court sustained those findings of the master which were adverse to the defendant, but granted a decree which included relief for infringement of processes rejected by the master. From this decree the defendant appeals.

Both appeals were heard together, though separately briefed, and will be decided by this single opinion. 6330 is the appeal in the patent infringement suit; 6331 is the appeal in the secret process suit.

The Patent Case.

The original patent is No. 1,577,410, dated March 16, 1926. The reissue application was filed November 26, 1927, and the reissue patent granted January 31, 1928. In the language of the specification the invention "relates to stills employed in refining crude oils, and to a method by the practice of the steps of which it is now rendered possible to construct stills embodying the invention in its concrete form." The claims in suit are 3, 5, 6, 14, and 16, and are printed in the margin.¹

To understand the plaintiff's relation to the oil industry and its alleged contribution thereto, whether under the ægis of the patent or otherwise, a brief review of the industry's evolution is required. For some years prior to 1920 there had developed a demand for gasoline far greater than could be economically supplied by atmospheric or low pressure distillation from crude oil. The so-called cracking processes then came to be an important feature of refinery operation. By such processes the heavier oils were resolved into lighter products through the removal of carbon, with the result that a much greater amount of gasoline could be recovered from a given quantity of oil than by distillation. The cracking processes, however, required the crude oil to be subjected both to high temperatures and high pressure, and this in turn created a demand for vessels or stills which could successfully withstand both and be of unusually large capacity.

Prior to the development of the plaintiff's still, the low pressure vessels employed in the oil industry were either of riveted or hammer-welded construction, and the relatively new high pressure vessels which were used were forged. Hammer-welded vessels were limited in wall thickness to 1 5/8 inches because of the nature of the process by which they were manufactured. The riveted structures lacked integrality, failed to react to pressure or heat as a single piece of metal, and the failure of the welded seams often resulted in dangerous fires and explosions. Forged vessels, that is, those made in one piece by hammering out a single steel ingot, were very little used because expensive to produce and because extremely limited in their size by the magnitude of the equipment required in their production.

The Smith conception was of a vessel constructed from a plurality of plates much longer and thicker than had ever been used before, and so joined as to create a single integral tubular structure of great size; the plates being fused at their meeting edges by an electric are, and the vessel free from such circumferential seams as constituted objections in prior construction. That the plaintiff succeeded in the materialization of the Smith concept, supplied a long-felt need in the oil industry, and built up a profitable business of great magnitude in the production of large cracking stills, is beyond controversy upon this record.

The problem that confronts us is to determine whether the patent denotes invention, whether the inventive step is disclosed with such particularity as is required by the patent law and its limits fixed by the terms of the grant. It will be noted that of the claims in suit 3 and 5 are for an article of manufacture, while 6, 14, and 16 are for a method by which the article is produced. The relationship and interdependence of coincident method, machine, and product inventions are clearly pointed out in Reo Motor Car Company v. Gear Grinding Machine Co. (C. C. A.) 42 F.(2d) 965, at pages 967, 968. It was there indicated by Judge Denison, correctly, we think, that the underlying inventive thought will usually be found in one of the three, and the other two will be relatively collateral. It is clear from the language of the article claims that here, as in the Reo Case, the method dominates the result. The still described and claimed in claims 3 and 5 is a still made according to the method substantially as set forth in claims 6, 14, and 16. It is sufficient, therefore, in our view, to discuss the method claims. If they fail, the patent fails. Cf. Judge Hickenlooper's discussion in Nestle-Le Mur Company v. Eugene, Ltd., (C. C. A.) 55 F.(2d) 854.

It will perhaps be sufficient to analyze claim 6, the first of the method claims. The steps in the method there disclosed for the manufacture of stills of extreme dimensions in their sequence are: (1) Forming thick plates of great length into longitudinal troughlike sections; (2) assembling a plurality of such sections in circular order with their edges in register; (3) fusing such sections in the meeting line of their edges by an electric are to constitute an integral tubular structure without circumferential joints. Electric are welding was old. The assembly of plates or bars with their edges in register so that they may be fused is a step in such welding both old and obvious. No method of forming thick plates or shaping them into troughlike sections is disclosed. There is neither novelty nor invention in the forming of a tubular body by placing such sections in register in circular order. We are therefore forced to seek for novelty and to discover invention in the utilization of plates of greater thickness and length than had been used before, in the achievement of an integral tubular structure in the sense disclosed in the specifications, and in its production without circumferential joints.

While we recognize that the fabrication of structures of unusual dimensions may often present problems not present in smaller structures and not within the reach of the skilled mechanic, and that in their solution the inventive genius may be exercised, yet it has become sufficiently axiomatic to warrant dispensing with citation that a mere change in proportions, without more, does not amount to invention. The patentee points out very clearly in his specification the limitation upon the size of prior art stills made with curved plates welded together by the hammer or forge method. He then describes his improved method, which is the fusing of the plates along their meeting edges by an electric are, whereby successive layers of welding metal flowing from a fusible weldrod are deposited in a previously prepared welding groove so that thorough amalgamation of the metal takes place and an integral structure, free from any joints, is assured. We search the specification, however, in vain for any step in a method of electric are welding not known to the art. Electric are welding was not the discovery nor the invention of the patentee. Steam boilers and other pressure vessels had been so made, though not of course of the wall thickness, diameter, or length described in the patent. The precise difficulty involved in applying electric welding to plates of greater length and thickness than had been fused before at their meeting edges by an electric are is not pointed out in the specification, nor are the steps that are new in the alleged improved method of are welding indicated. As the master in his report has well said, "The size of the vessel which the patentee envisioned was new in the industry, and nothing else was new in any way so far as the claims cover any process or structure."

So far as achieving an integral structure apart from the claimed novel method, the inventor was certainly not the...