Aktiebolag v. E.J. Co.

• Decision Date: 06 August 1997
• Docket Number: No. 97-1168,97-1168
• Citation: 43 U.S.P.Q.2d 1620,121 F.3d 669
• Parties: Sandvik AKTIEBOLAG, Plaintiff-Appellant, v. E.J. COMPANY, Vira Hayes and Robert Hayes, Defendants-Appellees.
• Court: U.S. Court of Appeals — Federal Circuit

Page 669

121 F.3d 669

43 U.S.P.Q.2d 1620

Sandvik AKTIEBOLAG, Plaintiff-Appellant, v. E.J. COMPANY, Vira Hayes and Robert Hayes, Defendants-Appellees.

No. 97-1168.

United States Court of Appeals, Federal Circuit.

Aug. 6, 1997.

Rehearing Denied; Suggestion for Rehearing In Banc

Declined Oct. 16, 1997.

Ronald L. Grudziecki, Burns, Doane, Swecker & Mathis, LLP, Alexandria, VA, argued for plaintiff-appellant. With him on the brief was Allan Madis Soobert. Of counsel was I.C. Waddey, Jr., Waddey & Patterson, Nashville, TN.

Robert E. Pitts, Pitts & Brittian, P.C., Knoxville, TN, argued for defendants-appellees. With him on brief were R. Bradford Brittian, Melinda L. Doss, and Raymond E. Stephens. Of counsel on brief was Hal D. Hardin, Nashville, TN.

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

ARCHER, Chief Judge.

Sandvik Aktiebolag (Sandvik) appeals the order of the United States District Court for the Middle District of Tennessee, No. 3-94-1076, granting summary judgment of noninfringement in favor of defendant E.J. Company (E.J.). The district court held that United States Patent No. 4,222,690 (the '690 patent) and United States Patent No. 4,381,162 (the '162 patent) were not infringed because defendant's replacement of the carbide tip of the drill constituted a permissible repair. We reverse.

BACKGROUND

The facts in this case are not in dispute. The patents in suit are directed to a drill with a shank portion and a unique carbide tip geometry that has specially configured cutting edges resulting in a drill suitable for high-feed machining with improved cutting ability especially at its center portion. ¹ The drill tip is not separately patented.

NOTE: OPINION CONTAINS TABLE OR OTHER DATA THAT IS NOT VIEWABLE

--------

As illustrated in the above drawings from the '690 patent, the drill has a tip (1), shank portion (2), twisted grooves (3), projections (4) (these projections bend and break the chips to render them smoothly removable) and a conical end having a center point (11) at the apex of the cone and a pair of cutting edges (10). The drill shank (2) is made of medium carbon steel. The drill tip (1) is made of a more durable carbide and is brazed to the steel shank (2). Brazing is like soldering but with a much higher melting point. It requires a temperature of 1300 degrees Fahrenheit to join the carbide tip to the steel shank.

Sandvik manufactures a commercial embodiment of the patented drill. Although made of durable carbide, over time and use, the drill tip dulls and may require resharpening. Resharpening, also known as regrinding, involves putting a new edge on the drill tip. Normally, the drill can cut through about one thousand inches of material before needing resharpening, depending, of course, upon the hardness of the material being cut. Sandvik expects the drill tip to be resharpened and, in fact, issues guidelines explaining how to resharpen the tip so as to maintain the specially configured cutting edges. Sandvik does not contend that resharpening constitutes infringement.

E.J. offers a drill repair service which includes resharpening and retipping Sandvik drills. E.J. retips, at the request of its customers, when the tip cannot be sharpened because it chips, cracks or simply wears down after being resharpened several times. According to E.J's vice-president, Mr. Robert Hayes, some of E.J.'s customers elect not to have the drill retipped when it cannot be resharpened any longer. E.J. returns the drill to the customer or disposes of it at the customer's request. The parties agree that when the tip is damaged (i.e. chipped, cracked or sufficiently worn down so that it cannot be resharpened), the drill has reached the end of its useful life unless it is retipped.

E.J.'s retipping process includes removing the worn or damaged tip by heating the tip to 1300 degrees Fahrenheit using an acetylene torch. E.J. then brazes in a rectangular piece of new carbide onto the drill shank. After the piece of carbide has cooled, E.J Sandvik claims that E.J.'s retipping service constitutes an infringing reconstruction of its patented drills. Sandvik does not manufacture or sell replacement drill tips. It contends that it never intended for the drills to be retipped. E.J. contends that its retipping service is a lawful repair of the patented drills.

recreates the patented geometry of the cutting edges by machining the carbide. This process includes: (1) grinding the carbide to the proper outside diameter; (2) grinding the carbide to a point; (3) grinding the rake surfaces of the new point; (4) grinding the center of the new point; and (5) honing the edges. In the final steps of the machining process, E.J. creates the cutting edges by following Sandvik's instructions for tip resharpening.

On December 7, 1994, Sandvik filed a patent infringement suit in the United States District Court for the Middle District of Tennessee claiming that E.J.'s retipping service was an impermissible reconstruction of the patented drill and that E.J.'s actions, therefore, constituted an infringement of the '690 and '162 patents. On summary judgment, the district court held that E.J.'s retipping was a permissible repair, not a reconstruction of the drills.

DISCUSSION

I.

We review the district court's grant of summary judgment de novo, Conroy v. Reebok Int'l, Ltd., 14 F.3d 1570, 1575, 29 USPQ2d 1373, 1377 (Fed.Cir.1994), with all justifiable factual inferences being drawn in favor of the party opposing summary judgment, Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255, 106 S.Ct. 2505, 2513-14, 91 L.Ed.2d 202 (1986). Summary judgment is appropriate where there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c). Whether defendant's actions constitute a permissible repair or an infringing reconstruction is a question of law which we also review de novo. Dawson Chem. Co. v. Rohm & Haas Co., 448 U.S. 176, 217, 100 S.Ct. 2601, 2623-24, 65 L.Ed.2d 696 (1980) (holding that whether defendant's action constitutes a repair or a reconstruction is a "legal distinction"); Sage Prods., Inc. v. Devon Indus., Inc., 45 F.3d 1575, 1577, 33 USPQ2d 1765, 1766-67 (Fed.Cir.1995) (whether defendant's actions were a permissible repair or an infringing reconstruction is a question of law); FMC Corp. v. Up-Right, Inc., 21 F.3d 1073, 1078, 30 USPQ2d 1361, 1364 (Fed.Cir.1994) (the distinction between repair and reconstruction is a "legal standard").

II.

Direct infringement includes the making of a patented article without authority. 35 U.S.C. § 271(a) (1994). Sandvik contends that E.J. is reconstructing its patented drill and therefore infringing its '690 and '162 patents under § 271(a). However, when Sandvik sold its patented drills to its customers, it granted them an implied license to use the drill for its useful life, see Aro Mfg. Co. v. Convertible Top Replacement Co., 377 U.S. 476, 484, 84 S.Ct. 1526, 1531, 12 L.Ed.2d 457 (1964) ("Aro II "), and the implied license to use includes the right to repair the patented drill, see, e.g., Standard Havens Prods., Inc. v. Gencor Indus., Inc., 953 F.2d 1360, 1376, 21 USPQ2d 1321, 1333 (Fed.Cir.1991).

The Supreme Court has taken an expansive view of what constitutes a permissible repair. In Aro Mfg. Co. v. Convertible Top Replacement Co., 365 U.S. 336, 81 S.Ct. 599, 5 L.Ed.2d 592 (1961) ("Aro I "), the Court held that the replacement of the fabric portion of a convertible car top was a permissible repair, not an infringing reconstruction. 365 U.S. at 346, 81 S.Ct. at 604-05. The Court held: "No element, not itself separately patented, that constitutes one of the elements of a combination patent is entitled to patent monopoly, however essential it may be to the patented combination and no matter how costly or difficult replacement may be." Id. at 345, 81 S.Ct. at 604. Therefore, even if E.J.'s retipping service cost almost as much as the drill or if the replacement of the tip is difficult and time consuming, as in this case, these factors are not dispositive of reconstruction.

The Court also rejected the "heart of the invention test." See id. at 344-45, 81 S.Ct. at 603-04 (holding that replacement of the distinguishing part of the patented combination does not amount to a reconstruction because a patent covers the totality of the elements in a combination); see also Dawson Chem., 448 U.S. at 217, 100 S.Ct. at 2623-24 (This Court has "eschewed the suggestion that the legal distinction between 'reconstruction' and 'repair' should be affected by whether the element of the combination that has been replaced is an 'essential' or 'distinguishing' part of the invention.") (citing Aro I, 365 U.S. at 344, 81 S.Ct. at 603-04); Sage Prods., 45 F.3d at 1577, 33 USPQ2d at 1767 ("The size or relative importance of the replacement part to the patented combination is not relevant when determining whether conduct constitutes repair or replacement."). Therefore, the fact that E.J. may be replacing the novel features of the '690 patented invention is also not dispositive of reconstruction.

In Aro I, the Supreme Court further explained the test for what constitutes a reconstruction: "The decisions of this Court require the conclusion that reconstruction of a patented entity, comprised of unpatented elements, is limited to such a true reconstruction of the entity as to 'in fact make a new article,' after the entity, viewed as a whole, has become spent." 365 U.S. at 346, 81 S.Ct. at 604 (citations omitted). Although we question the district court's finding that the tip is, in fact, a separate part of the device, we need not reach this issue because the court nevertheless failed to analyze whether the replacement of this "part" constituted reconstruction consistent with Aro I.

There are a number of factors to consider in determining whether a defendant has made a new article, after the...