73 F.3d 379 (Fed. Cir. 1995), 95-1040, Carbide Blast Joints, Inc. v. Rickert Precision Industries, Inc.

Docket Nº:95-1040, 95-1059.
Citation:73 F.3d 379
Party Name:CARBIDE BLAST JOINTS, INC. and Vermont American Corporation, Plaintiffs-Appellants, v. RICKERT PRECISION INDUSTRIES, INC., Claycomb Engineering, Inc. and Robert Uherek, Sr., Defendants/Cross-Appellants.
Case Date:December 04, 1995
Court:United States Courts of Appeals, Court of Appeals for the Federal Circuit

Page 379

73 F.3d 379 (Fed. Cir. 1995)

CARBIDE BLAST JOINTS, INC. and Vermont American Corporation, Plaintiffs-Appellants,


RICKERT PRECISION INDUSTRIES, INC., Claycomb Engineering, Inc. and Robert Uherek, Sr., Defendants/Cross-Appellants.

Nos. 95-1040, 95-1059.

United States Court of Appeals, Federal Circuit

December 4, 1995

Editorial Note:

This opinion appears in the Federal reporter in a table titled "Table of Decisions Without Reported Opinions". (See FI CTAF Rule 47.6 and FI CTAF App. V, IOP 9 regarding use of unpublished opinions)



Before ARCHER, Chief Judge, MICHEL and RADER, Circuit Judges.

MICHEL, Circuit Judge.

Vermont American Corporation (Vermont) and Carbide Blast Joints (CBJ) appeal the September 23, 1994 judgment of the United States District Court for the Southern District of Texas, Docket No. H-88-4425, United States Magistrate Judge Nancy Johnson, finding U.S. Patent No. 4,211,440 (the '440 patent) not infringed either literally or under the doctrine of equivalents, holding the '440 patent unenforceable due to inequitable conduct, and awarding attorney fees, costs and expenses in the amount of $896,177.91 to defendants, Rickert Precision Industries, Inc. (RPI), Claycomb Engineering (Claycomb), and Robert Uherek. Magistrate Judge Johnson accepted the jury's verdict of no infringement of U.S. Patent No. 4,349,050 (the '050 patent) and no contributory infringement or infringement by inducement, and set aside the jury's verdicts of no inequitable conduct and infringement under the doctrine of equivalents of the '440 patent, considering the jury merely advisory on those issues. Because we conclude that the record is wholly devoid of evidence tending to show intent to deceive the Patent and Trademark Office (PTO) and therefore conclude that the magistrate judge's finding of the intent necessary for inequitable conduct. We also reverse her holding that prosecution history estoppel precludes infringement under the doctrine of equivalents. We conclude that equivalence was tried to the jury as a matter of right, and that there was substantial evidence supporting the jury's finding of infringement under the doctrine of equivalents, and we therefore reverse the magistrate judge's holding of no equivalent infringement of the '440 patent and direct that the jury's verdict of infringement be entered. Finally, wevacate the award of attorney fees that was based partly on the magistrate judge's erroneous finding that the patentee intended to deceive the PTO. The case is remanded for entry of the liability judgment as indicated and for trial on the quantum of damages.


The invention of the '440 patent is a blast joint, a device sometimes used in the production of oil and gas. Oil and gas typically are produced through production tubing in a well. The oil and gas pass into the well through perforations in the wall of the well and then flow to the surface through the production tubing. Oil companies use blast joints to shield the production tubing from sand that blasts holes into tubing necessitating the removal of the tubing from the well.

The blast joint of the '440 patent comprises production tubing covered by a protective sheath of tungsten carbide. The protective sheath is a series of "axially short," flat rings of tungsten carbide stacked on top of one another and held in place by two end retainers. The inventor, Bergstrom, conceived of using a stack of short tungsten carbide rings held together on the tubing by upper and lower retainers as an improvement over longer, longitudinal carbide shields that are brittle, crack, and cannot effectively bend. In 1974, Bergstrom convinced Sun Oil Company to try his design in their oil wells. On July 31, 1975, Bergstrom filed an application for this blast joint design, and that application resulted in U.S. Patent No. 3,414,386 (the '386 patent).

Bergstrom later improved on the '386 design by adding a compression spring to hold the carbide rings tightly together, preventing sand from entering between loose rings and avoiding cracking of rings when the tube bent to fit the well. Bergstrom filed a continuation-in-part (CIP) application for the improved invention adding the compression spring on January 3, 1977, and that application resulted in the issuance of the '440 patent on July 8, 1980. Bergstrom died in 1984, prior to the sales giving rise to this litigation.

Vermont, the exclusive licensee under the '440 and '050 patents and the parent of CBJ, manufactures tungsten carbide rings, which it sells to CBJ. CBJ includes these rings in blast joints it sells to the oil and gas industry. RPI began selling kits of components, including two inch tungsten carbide rings and compression springs, to customers for assembly into carbide blast joints, in competition with CBJ.

On December 29, 1988, CBJ filed suit alleging infringement by RPI and Claycomb of claim 1 of the '440 patent and the '050 patent, seeking damages and preliminary and permanent injunctions. Although District Judge Lynn Hughes set an initial expedited trial date, the case was transferred to District Judge John Rainey. After three additional years, in order to facilitate a more expedited trial, CBJ consented to trial before a magistrate judge.

The magistrate judge submitted all issues to the jury with the caveat to the parties that on equitable issues the jury verdicts would be advisory only. On July 21, 1993, the jury returned a verdict finding that RPI directly infringed claim 1 of the '440 patent under the doctrine of equivalents, that neither RPI, Claycomb, nor Uherek induced infringement, that RPI contributorily infringed claim 1, that the patent was not anticipated or obvious, and that the defendants had not proven inequitable conduct resulting from the alleged offer for sale of the '386 invention before July 31, 1974, one year prior to filing, or the alleged mail-out printed publication distributed before July 31, 1974. CBJ waited several months after the verdicts for the court to enter judgment on the verdicts, and then petitioned this court for a writ of mandamus to order entry of judgment. RPI responded arguing, inter alia, that the verdict on inequitable conduct was only advisory, based on an "on-record" discussion after the charge to the jury but prior to the jury verdict. This court denied the petition.

In her December 22, 1993 Memorandum and Order, the magistrate judge, ignoring the jury verdict, held that the '440 patent was unenforceable for inequitable conduct based on the inventor's failure to disclose the sale of the '386 invention more than one year prior to the filing of the '386 patent application. She also set aside the jury's finding of infringement under the doctrine of equivalents on the alternative legal grounds that either RPI's blast joint could not be an equivalent given a correct interpretation of claim 1, or that the patentee's statements during prosecution of the '440 patent estopped CBJ from contending that the term "axially short carbide rings" in claim 1 covered RPI's two inch long rings.

After the magistrate judge's decision of non-liability, RPI moved to have the case declared exceptional and for an award of attorney fees. On this issue, the court ordered CBJ to submit documents withheld throughout trial on the basis of a claim of privilege. Before trial, a special master had concluded, and District Judges Hughes had adopted his conclusion, that the crime-fraud exception to attorney-client privilege did not apply to allow discovery of...

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