Transco Products v. Performance Contracting, 89 C 8001.

Decision Date18 May 1993
Docket NumberNo. 89 C 8001.,89 C 8001.
Citation821 F. Supp. 537,28 USPQ 2d 1739
PartiesTRANSCO PRODUCTS INC., Plaintiff, v. PERFORMANCE CONTRACTING, INC. and Performance Contracting Group, Inc., Defendants.
CourtU.S. District Court — Northern District of Illinois

COPYRIGHT MATERIAL OMITTED

Robert E. Wagner, Roger H. Stein, Wallenstein, Wagner & Hattis, Ltd., Chicago, IL, for plaintiff.

John S. McCambridge, Charles S. Bergen, Darrell J. Graham, Grippo & Elden, Chicago, IL, Robert A. Vanderhye, Nixon & Vanderhye, P.C., Arlington, VA, for defendants.

MEMORANDUM OPINION AND ORDER

SHADUR, District Judge.

This Court has now been thrice blessed (?) with what have been labeled summary judgment motions in this action between Transco Products Inc. ("Transco") and Performance Contracting, Inc. and Performance Contracting Group, Inc. (collectively "Performance Contracting," treated as a singular noun). Although the first two sets of submissions did not lead to a definitive resolution of the lawsuit, this third time proves the charm.

Transco originally filed suit (1) seeking a declaratory judgment of invalidity, noninfringement and unenforceability of United States Patent No. 4,009,735 (the "Pinsky patent") owned by Performance Contracting, and (2) relatedly charging Performance Contracting with infringement of Transco's United States Patent No. 3,941,159 (the "Toll patent"). Performance Contracting counterclaimed, seeking a declaratory judgment of invalidity and unenforceability of the Toll patent and charging Transco with infringement of the Pinsky patent.

This Court's May 12, 1992 "Opinion 1" (792 F.Supp. 594) (1) denied Performance Contracting's motion for summary judgment on the issue of invalidity of the Toll patent and (2) granted Performance Contracting's motion for summary judgment as to its noninfringement of the Toll patent. Then the January 28, 1993 "Opinion 2" (813 F.Supp. 613) dealt with another set of cross-motions, this time respectively seeking a judgment of infringement or noninfringement of the Pinsky patent by Transco's products. Opinion 2 denied both those motions.1

In briefing that last set of motions, Transco raised but did not squarely address the possibility of the Pinsky patent's invalidity because of its noncompliance with 35 U.S.C. § 112 ("Section 112"): that is, whether inventor Pinsky had failed to disclose the best mode of practicing the invention. At this Court's request the parties have now confronted that issue in the form of Transco's motion for partial summary judgment under Fed.R.Civ.P. ("Rule") 56,2 asserting invalidity of the Pinsky patent on that ground. Their briefing has been more extensive than the three-memorandum pattern normally followed on any motion other than simultaneous cross-motions:

1. On February 10, 1993 each side submitted an initial memorandum: Transco's (cited "P. Mem. 1 at __") in support of its Rule 56 motion, and Performance Contracting's (its "D. Mem. 1") also addressing the best mode question.
2. On February 24 Performance Contracting filed its memorandum (cited "D. Mem. 2 at __") in opposition to Transco's summary judgment motion.3
3. On March 15 Transco filed its reply memorandum (cited "P. Mem. 2 at __") in support of its motion.
4. Finally, Performance Contracting requested and was granted leave to file a surreply memorandum, which it submitted on April 9.

Based on its consideration of all the parties' filings, this Court grants Transco's motion.

Rule 56 Standards

Rule 56 principles impose on the movant the burden of establishing the lack of a genuine issue of material fact (Celotex Corp. v. Catrett, 477 U.S. 317, 322-23, 106 S.Ct. 2548, 2552-53, 91 L.Ed.2d 265 (1986)). For that purpose this Court is "not required to draw every conceivable inference from the record — only those inferences that are reasonable" — in the light most favorable to the nonmovant (in this case Performance Contracting) (Bank Leumi Le-Israel, B.M. v. Lee, 928 F.2d 232, 236 (7th Cir.1991) (citations omitted)).

This District Court's General Rules 12(M) and 12(N) require factual statements in support of and in opposition to Rule 56 motions, and both sides have once again tendered such statements.4 Transco's statement in support of its motion is cited as "P. 12(m) __," while Performance Contracting's responsive statement is cited as "D. 12(n) ¶ __."

Facts

On October 2, 1974 Gordon Pinsky ("Pinsky") filed a continuation of his original October 24, 1973 application with the United States Patent Office covering a pipe insulation design (P. 12(m), D. 12(n) ¶¶ 4, 5). On March 1, 1977 the Pinsky "Thermal Insulation" patent (the "Pinsky patent") issued, containing these four claims (P.Ex. 35, col. 4):

1. Readily removable and replaceable rewettable thermal insulation for use on vessels and piping within reactor containment areas of nuclear power plants comprising high temperature resistant mineral fiber or glass fiber encapsulated within rewettable, high temperature resistant, asbestos free glass cloth held in place with a plurality of spaced quick release and engage fasteners, wherein the glass cloth can withstand repeated wettings from spray systems within the reactor containment areas of nuclear power plants and wherein the fasteners are two woven nylon, hook and loop mating strips, wherein the glass cloth has a finish of a leachable, organic silicate carried in a fatty and mineral oil vehicle.
2. Thermal insulation according to claim 1 wherein the encapsulated fiber is a fine fiber and is in the form of tangled or felted mats.
3. Thermal insulation according to claim 2 wherein the mats are quilted.
4. Thermal insulation according to claim 1 wherein the strips comprise a hook strip covered with stiff little hooks and a loop strip covered with tiny, soft loops.

Transco began marketing blanket-type insulation for nuclear power plant containment areas as early as 1982 (D.Ex.M). In three letters dated February 13, March 8 and September 11, 1989 (Complaint Exs. B, C, D) Performance Contracting notified Transco that it believed Transco was infringing the Pinsky patent. That led to Transco's October 25, 1989 Complaint in this action.

Best Mode

In exchange for the fixed term of monopoly rights granted by the patent laws, Section 112 requires that "the specification shall contain a written description of the invention ... and shall set forth the best mode contemplated by the inventor of carrying out his invention." Its "purpose ... is to restrain inventors from applying for a patent while at the same time concealing from the public preferred embodiments of their inventions which they have in fact conceived" (Wahl Instruments, Inc. v. Acvious, Inc., 950 F.2d 1575, 1579 (Fed.Cir.1991)). There are two steps to a best mode analysis (Chemcast Corp. v. Arco Industries Corp., 913 F.2d 923, 927-28 (Fed.Cir.1990)):

The first is whether, at the time the inventor filed his patent application, he knew of a mode of practicing his claimed invention that he considered to be better than any other. This part of the inquiry is wholly subjective, and resolves whether the inventor must disclose any facts in addition to those sufficient for enablement. If the inventor in fact contemplated such a preferred mode, the second part of the analysis compares what he knew with what he disclosed — is the disclosure adequate to enable one skilled in the art to practice the best mode or, in other words, has the inventor "concealed" his preferred mode from the "public"? Assessing the adequacy of the disclosure, as opposed to its necessity, is largely an objective inquiry that depends upon the scope of the claimed invention and the level of skill in the art.

Transco contends that the best mode requirement was violated by the Pinsky patent's failure to disclose several elements of Pinsky's preferred mode of practicing the invention:

1. Burlington Industries' cloth with what was called its "603A" finish (P. 12(m) ¶ 70);
2. placement of the fastener parallel to, rather than perpendicular to, the junction of the insulation (P. 12(m) ¶ 75);
3. a fabric flap carrying one of the mating strips over to meet the other (id.);
4. stainless steel hooks in the fastener strips (P. 12(m) ¶ 85); and
5. a fiberglass scrim placed between the glass wool batt and the glass cover (P. 12(m) ¶¶ 95-96).

Those elements are considered here in turn.

1. Burlington Industries' Cloth with 603A Finish

Transco asserts that before Pinsky filed the original October 23, 1973 application both he and his attorney knew that the fabric Pinsky preferred to use was Burlington Industries' glass cloth with a 603A finish (P. Mem. 1 at 5, citing several evidentiary sources). But instead of the patent specification naming the 603A cloth, it merely described glass cloth with "a finish of a leachable, organic silicate carried in a fatty and mineral oil vehicle" (P.Ex. 35, col. 4). Pinsky had arrived at that description by sending a sample to his employer Owens Corning's laboratories (P.Ex. 67, Pinsky 9-12-91 Dep. 261).

Pinsky acknowledged that when the original application was filed he thought that the Burlington Industries cloth with a 603A finish "was the product that had the greatest possibility of working" (P.Ex. 54, Pinsky 912-91 Dep. 371). When asked whether he knew of any other finish that would work, Pinsky replied (P.Ex. 67, Pinsky 9-12-91 Dep. 332):

I was not an expert in finishes. I didn't have any real particular thought. There may or may not have been other finishes or other things in the future that could work, or a combination or changes or verifications, but I didn't have any particular knowledge this one worked. This is the one we were going with.

Performance Contracting admits that the 603A fabric was Pinsky's best contemplated mode of practicing the invention (D. 12(n) ¶¶ 56-58). Nonetheless it insists that the second element of the best mode requirement was satisfied because the generic description of the finish ("a leachable, organic silicate carried in a fatty...

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