Panther Pumps & Equipment Co., Inc. v. Hydrocraft, Inc.

• Decision Date: 24 October 1972
• Docket Number: No. 71-1125.,71-1125.
• Citation: 468 F.2d 225
• Parties: PANTHER PUMPS & EQUIPMENT CO., INC., Plaintiff-Appellee, v. HYDROCRAFT, INC., et al., Defendants-Appellants.
• Court: U.S. Court of Appeals — Seventh Circuit

468 F.2d 225 (1972)

PANTHER PUMPS & EQUIPMENT CO., INC., Plaintiff-Appellee, v. HYDROCRAFT, INC., et al., Defendants-Appellants.

No. 71-1125.

United States Court of Appeals, Seventh Circuit.

Argued September 15, 1972.

Decided October 24, 1972.

Rehearing Denied November 16, 1972.

Arthur T. Susman, Alvin D. Shulman, Chicago, Ill., for defendants-appellants.

Roy E. Petherbridge, John M. O'Neill, Edward D. Gilhooly, Chicago, Ill., for plaintiff-appellee.

Before HASTINGS, Senior Circuit Judge, and PELL and STEVENS, Circuit Judges.

STEVENS, Circuit Judge.

A jury found one claim in each of two patents¹ owned by plaintiff valid and infringed by defendants' paint spray unit and awarded damages of $150,000 against the corporate defendant and $5,000 against each of the two individual defendants.

This appeal raises six separate issues: (1) whether the court erred as a matter of law or abused its discretion by refusing to submit 32 special interrogatories to the jury; (2) whether the court permitted the jury to find infringement of a dependent claim after ruling that the claim from which it depends is not infringed; (3) whether a claim on an apparatus designed to avoid overheating by means of "cavitation cooling" can be infringed by a pump which operates at an increased temperature on standby; (4) whether the fact that one of plaintiff's licensees agreed not to contest the validity of the patent is a "misuse" which forecloses any relief against infringers; (5) whether the damage award against the corporate defendant is excessive; and (6) whether separate recovery against the individual defendants is proper. Except for the last point, we find no merit in defendants' appeal. Only a brief statement of the facts is necessary as a preface to our discussion of the issues.

The claims describe a hydraulic pump used to operate a paint spray gun. Spray painting normally is an intermittent operation; frequently, instead of turning off the entire unit when spraying is discontinued, the pump continues to operate on "standby." The patented invention improves the efficiency of standby operation.

The apparatus contains one chamber housing the "driving fluid" and another containing the paint, or "pumped fluid." The standby operation is designed to permit the immediate resumption of spraying without permitting the continued operation of the power source in the driving fluid chamber to cause a substantial buildup of pressure or temperature when the gun is not spraying paint. In the prior art, overheating of the driving fluid was avoided by recirculation of that fluid through bulky auxiliary equipment which included heat exchange apparatus such as a relatively large cooling tank. Much of that auxiliary equipment may be eliminated by the use of the patented invention which takes advantage of the cooling effect which occurs when liquid is evaporated. By creating a partial vacuum, or "cavitation," in the driving liquid chamber, some of the liquid vaporizes and produces "cavitation cooling." Some of the bulk and inefficiency of prior art pumps is thereby obviated.

Schlosser and Drath, the two individual defendants, are former employees of the plaintiff. Schlosser conceived the patented invention and assigned it to plaintiff while still in plaintiff's employ. Subsequently, he, Drath, and a third party organized the defendant corporation and in due course developed the infringing models which are manufactured and sold by the corporate defendant. This simple history, stressed repeatedly during the trial, may explain plaintiff's unusual decision to demand a jury trial in a patent case.

I.

Defendants challenge the manner in which the case was submitted to the jury. Defendants do not argue that it was error to submit either the entire case or any specific issue to the jury.² The contention is not that the jury was permitted to decide questions of law; rather, it is argued that in view of the way the jury verdict was reached, it is impossible for a reviewing court to determine whether the three-step analysis required by Graham v. John Deere Co., 383 U.S. 1, 17, 86 S.Ct. 684, 15 L.Ed.2d 545, was properly made.

As defendants phrase their argument, "The Legal Conclusion On Patent Validity Must Be Reversed For Failure To Give Verbal Expression To The Required Factual Determinations."³ Defendants argue that "without such findings, there is no way for a reviewing court to determine whether the correct legal standard was applied."⁴

Unquestionably, the issue of validity is a question of law. Moreover, as this court squarely held after considering the matter en banc, the issue of obviousness is also a question of law. Armour & Co. v. Wilson & Co., 274 F.2d 143, 151-157 (7th Cir. 1960). But we also concluded in Armour that "the rules governing the trial of patent cases are no different than in other types of civil litigation, and further, that the scope of our review on appeal follows the same pattern." Id. at 157.⁵

In a patent case, as in any other case tried to a jury, questions of law are for the court and questions of fact are for the jury.⁶ Our rules do not contemplate that a jury may be asked to make the kind of detailed findings of fact which Rule 52(a) of the Federal Rules of Civil Procedure requires of a judge who sits without a jury. Therefore, if defendants are, in effect, arguing that such findings must be made by a jury in a patent case, the argument is unacceptable.

In the normal jury trial, allocation between judge and jury of their respective decisional responsibilities may be accomplished by the use of special interrogatories or special verdicts, or by the court's instructions to the jury before it returns a general verdict. Which method is appropriate in a particular case is a matter to be determined by the wise discretion of the trial court in the circumstances of the particular litigation before it. When only two or three narrow issues of fact, such as the date of invention or perhaps the date of first public sale, determine the issue of patent validity, it may be entirely appropriate to submit special interrogatories to the jury. But if, as in this case, one party contends that as many as 32 separate fact questions must be resolved, the trial judge certainly may consider it inappropriate to use the special interrogatory procedure.⁷

In this case, the trial judge was not required, as a matter of law, to submit special interrogatories to the jury, and we hold that he did not abuse his discretion in refusing to do so.

This holding does not mean, as defendants contend, that the legal conclusion on patent validity may not be reviewed under the John Deere guidelines whenever a jury returns a general verdict. As in any other jury trial, the court's rulings on questions of law are subject to review. If the ultimate issue of validity depends on subsidiary fact questions, it is the court's duty to instruct the jury that it should return one verdict if the facts are found one way and a different verdict if the facts are found otherwise.⁸ In such event, as in other cases tried to a jury, the reviewing court will presume that the disputed matters of fact have been resolved favorably to the prevailing party in accordance with the trial judge's instructions.

The task of giving error-free instructions in a patent case may indeed be extremely difficult.⁹ But we are not asked in this case to consider whether the instructions to the jury were improper in any respect. We therefore have no occasion to express any opinion about the adequacy of the instructions as a whole, or any specific instruction which may have been given over the objection of the losing party.¹⁰

We therefore find no merit in the attack which appellants have made on the procedure followed by the trial judge in submitting this case to the jury.

II.

Each of the infringed claims depends from a broader claim. Thus, claim 23 of the '845 patent reads:

"23. A fluid power transfer apparatus substantially as set forth in claim 22, said prime mover being a pump, and said variable load material being a paint spray gun."

Claim 22, in turn, depends from claim 1 of the '845 patent,¹¹ and claim 19 of the '270 patent depends from claim 12.¹² It is clear as defendants argue, that a product which did not infringe claim 22 of the '845 patent could not infringe claim 23. Thus, if the court made a final adjudication of noninfringement of claims 1 and 22 of the '845 patent and claim 12 of the '270 patent, such an adjudication would foreclose recovery for infringement of the claims in suit.

Defendants contend that the district court's direction of a verdict against plaintiff on all claims except 23 of '845 and 19 of '270 should be so construed. The record clearly establishes, however, that the trial judge merely intended to preclude recovery on any claim except insofar as it was incorporated by reference in claims 23 and 19. Thus, to the extent that infringement of claims 1 and 22 of the '845 patent was an essential element of plaintiff's proof of infringement of claim 23, the judge's ruling was not intended to foreclose that element of plaintiff's case. We do not construe the judge's action, as explained in the colloquies which preceded his direction of a verdict on all claims except 23 and 19, portions of which are set forth in the margin, as an adjudication of noninfringement of the broader claims incorporated by reference in the infringed claim.¹³

If the defendants' interpretation of the court's directed verdict were correct, there would have been no occasion for defendants to spend an entire week of trial putting in their defense. They would have asked for and received a directed verdict on claims 23 and 19. That they did not lends support to our conclusion. We find no merit in defendants' argument on appeal that the judge's direction of a verdict on all claims except 23 and 19 should foreclose recovery for infringement of the two claims he obviously intended to preserve.

III.

D...