Alco Standard Corp. v. Tennessee Valley Authority

• Decision Date: 22 October 1984
• Docket Number: No. 77-2513 H.,77-2513 H.
• Citation: 597 F. Supp. 133
• Parties: ALCO STANDARD CORPORATION, an Ohio Corporation, Plaintiff, v. TENNESSEE VALLEY AUTHORITY, a U.S. Corporation, Defendant, v. WESTINGHOUSE ELECTRIC CORP., a Delaware Corp., Third-Party Defendant.
• Court: U.S. District Court — Western District of Tennessee

597 F. Supp. 133

ALCO STANDARD CORPORATION, an Ohio Corporation, Plaintiff, v. TENNESSEE VALLEY AUTHORITY, a U.S. Corporation, Defendant, v. WESTINGHOUSE ELECTRIC CORP., a Delaware Corp., Third-Party Defendant.

No. 77-2513 H.

United States District Court, W.D. Tennessee, W.D.

October 22, 1984.

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

Roy Keathley, Memphis, Tenn., Edward A. Haight, Rolf O. Stadheim, Gomer W. Walton, Chicago, Ill., for Alco Standard Corp.

Herbert S. Sanger, Jr., Gen. Counsel, Justin M. Schwamm, Sr., Asst. Gen. Counsel, Don O. Whitehead, Nicholas A. Della Volpe, Tennessee Valley Authority, Knoxville, Tenn., for Tennessee Valley Authority.

Robert M. Johnson, Memphis, Tenn., John F. Lynch, Alan H. Gordon, Houston, Tex., for Westinghouse Elec. Corp.

OPINION

HORTON, District Judge.

This is an action for patent infringement brought by plaintiff, Alco Standard Corporation, against defendant, Tennessee Valley Authority (TVA), and third-party defendant Westinghouse Electric Corporation. TVA hired Westinghouse to inspect turbine rotors in TVA's generating plants. In performing such inspections for TVA, Westinghouse allegedly used a device that infringed U.S. patent 3,960,006 (006 patent). The 006 patent was issued for an ultrasonic inspection device invented by Robert Smith, an employee of Commercial Machine Works (CMW), which is a division of the plaintiff Alco Standard Corporation. Alco Standard Corporation is the assignor of the patent in suit. Under the Tennessee Valley Authority Act of 1933, TVA is entitled to use patented technology provided the patent owner is paid "reasonable compensation." 16 U.S.C. § 831r. Westinghouse is indemnifying TVA for any infringement resulting from these inspections, and although named as third-party defendant, Westinghouse has actively conducted the defense to this lawsuit.

The case was tried by the Court sitting without a jury. The trial was bifurcated and evidence was heard only on the issue of liability. Damages, if any, are to be determined at a later date.

Having considered all the evidence and the applicable law, the Court finds the 006 patent valid, finds defendants infringed the 006 patent, and renders judgment for the plaintiff on the issue of liability.

I. The parties

Alco Standard Corporation ("Alco") is an Ohio corporation, and its Commercial Machine Works ("CMW") division has its principal place of business in Elk Grove Village, Illinois.

Tennessee Valley Authority ("TVA") is a United States corporation with a regular and established place of business on Mitchell Road Extended, Memphis, Tennessee.

Westinghouse Electric Corporation ("Westinghouse") is a Pennsylvania corporation with a regular and established place of business at 5865 Ridgeway Parkway, Memphis, Tennessee.

II. Relationship of the parties

Alco originally brought this action under the Tennessee Valley Authority Act, 16 U.S.C. § 831r against TVA for patent infringement as defined by 35 U.S.C. § 271.

Alco also originally asserted a claim against Westinghouse for patent infringement as defined by 35 U.S.C. § 271 and for unfair competition.

Alco is the owner of a United States Letters Patent No. 3,960,006 (hereinafter sometimes referred to as "the patent in suit" or "006 patent") for an ultrasonic bore inspection method and apparatus and has the right to maintain this action. Pretrial Order, March 8, 1982. The method and apparatus are alleged to be useful in the detection of flaws in the large turbine rotors present in electric generating facilities.

On the motion of Westinghouse, this Court, Honorable Bailey Brown, Chief Judge, decided on April 4, 1978, that Alco's patent infringement claims against Westinghouse for ultrasonic bore inspections which were performed in conjunction with TVA should be dismissed for failure to state a claim upon which relief may be granted; Alco's remaining patent infringement claims against Westinghouse were dismissed for improper venue; and Alco's pendent unfair competition claims against Westinghouse were also dismissed. Alco Standard Corp. v. Tennessee Valley Authority, 448 F.Supp. 1175 (W.D.Tenn.1978).

Westinghouse has undertaken to indemnify and save TVA harmless as to any award of compensation arising out of the use by TVA of the patent in suit as alleged in the complaint.

Westinghouse remains in this case as a third-party defendant as indemnitor of TVA. TVA and Westinghouse sometimes will be referred to herein jointly as "Defendants."

III. The Invention

The application for the patent in suit was filed on December 3, 1973, by Robert D. Smith, who was at that time an employee of Commercial Machine Works. On June 1, 1976, U.S. Patent No. 3,960,006 "Non-Destructive Test Apparatus and Method for a Material Having a Cavity Therein" (hereinafter patent or 006) was issued to Mr. Smith who had assigned the patent to Alco Standard.

Patent 006 describes a device and method to be used in the inspection of the large turbine rotors used by utilities to generate power. These metal cylindrical rotors may be more than thirty feet in length and weigh from 25 tons to over 100 tons; they rotate at up to 3600 rpms and operate at temperatures up to 1000° F. The presence of a crack, flaw or inclusion of a material different from the metal of the rotor is a threat to the structural integrity of these rotors. Such cracks, flaws or inclusions (collectively termed "discontinuities") may cause a rotor to catastrophically explode, resulting in loss of human life and immense property damage. The patented invention purports to provide an improved method and apparatus to ultrasonically inspect a turbine rotor and detect any discontinuities that might lead to structural damage of the rotor. When a discontinuity is detected, personnel skilled in metallurgy and fracture mechanics analyze the data to determine whether the discontinuity poses a threat. If a discontinuity is near the central hollow core (the bore) of the rotor, then the diameter of this internal bore may be enlarged to remove the discontinuity. This overboring of the rotor bore (termed "bottle boring") allows the rotor to be safely returned to service. The detection of serious discontinuities may lead to condemnation of the rotor.

Because a forged turbine rotor has blades affixed to its external surface, the most effective way to examine the massive forging is to inspect the rotor via its central bore. The patented device employs a moveable head or carriage that is inserted into the rotor bore. One or more plexiglass shoes are mounted on the carriage; these shoes are shaped to fit the curvature of the rotor bore and are held against the rotor wall by a pneumatic pressure device. To reduce energy loss and minimize friction between the shoe and the wall of the bore, a couplant (such as water) is used. A source of ultrasonic signals, such as a transducer, is mounted on each shoe. To scan the rotor, the carriage rotates slowly as the transducers continuously transmit and receive ultrasonic signals. An indexing arrangement outside the rotor indicates the axial position (longitudinal penetration) and the rotational position (clock position) of the shoes inside the bore.

More than one transducer may be mounted on a single shoe, and these transducers transmit ultrasonic signals into the rotor forging. The patented device uses three modes of ultrasonic signals—longitudinal, shear and surface—to scan the rotor. As they are transmitted into the rotor, these ultrasonic waves are reflected by either discontinuities within the forging or by the outer surface of the rotor. The reflected ultrasonic waves are received by a pick-up device in the same or a companion transducer and this information is transmitted to a recording or display device.

Through use of this invention, the patent claims that "the precise position of any flaw in the rotor, the nature of the flaw and an accurate outline of the flaw can be achieved."

IV. Technical and historical background

From 1946 to 1956 ultrasonic tests were performed on turbine rotor forgings only from the outside of the rotor, not from the bore, and only on newly manufactured rotor forgings before they were placed in service. By 1957, Westinghouse had assembled a task force and given it the job of improving Westinghouse's ability to inspect rotors ultrasonically. Westinghouse subsequently learned that General Electric had developed a boresonic inspection device, and in 1959 Westinghouse abandoned its development program and purchased boresonic equipment from General Electric. This boresonic rotor inspection device, developed by General Electric and used by Westinghouse, consisted of a single search unit with two transducers, one in the transmitting mode and the other in the receiving mode. The General Electric device was introduced into the bore manually and rotated in a spiral action the full length of the bore. A spring-loaded arrangement held the search unit against the bore. No recording equipment was utilized with this General Electric boresonic inspection device. This boresonic inspection device was suitable only for inspecting newly manufactured turbine rotors before they left the manufacturer's plant; it was not suitable for inspecting rotors after they were placed in service. Westinghouse was still using this General Electric boresonic inspection device as late as 1972.

During the 1950's and 1960's the manufacturers of turbine rotors were acutely aware of the need for a means of inspecting rotors that had been placed into use at the site where they were being used. The available inspection systems necessitated dismantling the turbine and shipping the rotor back to the manufacturer's plant for reinspection. This created expensive delays for the utility companies since their generating capacity was seriously affected by loss of use of the turbine while inspection was conducted. In an attempt to solve this problem, the three major U.S. turbine and...