Amphenol Corporation v. General Time Corporation

• Decision Date: 10 June 1968
• Docket Number: No. 16524.,16524.
• Citation: 397 F.2d 431
• Parties: AMPHENOL CORPORATION, a corporation of Delaware, Plaintiff-Appellant, v. GENERAL TIME CORPORATION, a corporation of Delaware, Defendant-Appellee.
• Court: U.S. Court of Appeals — Seventh Circuit

397 F.2d 431 (1968)

AMPHENOL CORPORATION, a corporation of Delaware, Plaintiff-Appellant, v. GENERAL TIME CORPORATION, a corporation of Delaware, Defendant-Appellee.

No. 16524.

United States Court of Appeals Seventh Circuit.

June 10, 1968.

William E. Lucas, Erwin C. Heininger, Burton E. Glazov, Chicago, Ill., for plaintiff-appellant Amphenol Corp.; Mayer, Friedlich, Spiess, Tierney, Brown & Platt, Chicago, Ill., of counsel.

Richard Russell Wolfe, Phillip H. Mayer, John P. Bundock, Jr., Chicago, Ill., for defendant-appellee General Time Corp.; Wolfe, Hubbard, Voit & Osann, Chicago, Ill., of counsel.

Before SCHNACKENBERG and HASTINGS, Circuit Judges, and KNOCH, Senior Circuit Judge.

KNOCH, Senior Circuit Judge.

The plaintiff-appellant, Amphenol Corporation, brought suit to recover damages and to secure injunctive relief on the ground of alleged infringement of its patent No. 3,137,122 (Resilient Means for Driving Escape Wheel) by the defendant-appellee, General Time Corporation.

The plaintiff appeals from that part of the judgment dismissing the suit, aftter a bench trial, which held the patent in suit to be invalid and one of the accused devices (Form B) not to infringe. The District Court also held that the other accused device (Form A) would infringe if the patent in suit were valid. The District Court's opinion is published in 275 F.Supp. at page 903.

The plaintiff has a Borg Instruments Division and the defendant has a Westclox Division where clocks for automobiles are manufactured. It was stipulated that plaintiff and defendant compete in the sale of clocks for automobiles to automobile manufacturers.

The District Judge held that the patent in suit was invalid because the patented device was "on sale" more than one year prior to the filing of the application for the patent; the particular features which the plaintiff contended were patentable lacked utility and would have been obvious to one having ordinary skill in the clockmaking art; and such features as possessed utility were the subject of prior patents.

The patent application was filed January 4, 1962. It deals with the reduction of noise, particularly of the "tick" sound. The patent describes the invention as relating "to improvements in timepiece escape silencing."

As the District Judge found, the mainspring of the clocks involved here is wound by an electric motor which uses energy from the automobile battery. This mainspring drives a gear train (and the clock hands) at a rate determined by the rotation of an escape wheel which is alternately released and held by two pallet pins on a pallet swinging back and forth, controlled by an oscillating balance wheel. The balance wheel is intermittently impulsed in each direction by the escape wheel teeth which alternately strike the two pallet pins to swing the balance wheel back and forth at a rate controlled by a hairspring. The "tick" noise is caused by the escape wheel teeth hitting the pallet pins. The energy released by the collision of the pallet pins with the escape wheel teeth is transmitted to the frame plates which vibrate audibly. The noise of the electric winding mechanism is not involved in this case.

The escape wheel is connected to the gear train by a pinion on the same shaft as the wheel. In a "resilient" escapement the driving force from the pinion to the escape wheel is transmitted through a spring or other resilient member.

Both parties had been making and selling automobile clocks with "solid" escapements where the pinion and the wheel are rigidly fixed to the shaft and rotate in unison. The loud tick presented a problem which was considered to be acute by the engineers at the Cadillac Division of General Motors Corporation.

Patent applications must be filed within one year of placing the claimed subject matter "on sale." Title 35, U.S. C. § 102(b)¹. "On sale" does not mean an actual accomplished sale but activity by the inventor or his company in attempting to sell the patented idea. Armour Research Foundation v. C. K. Williams & Co., 7 Cir., 1960, 280 F.2d 499, 506; Magee v. Coca-Cola Co., 7 Cir., 1956, 232 F.2d 596, 600.

The facts bearing on the "on sale" issue are largely undisputed and substantially the subject of pretrial stipulation. The critical date is January 4, 1961.

The patent names Samuel Dinerstein and Harold K. Cummings as co-inventors by some mistake, conceded to be without deceptive intent, of the drafting attorney since deceased. Actually Harold Cummings independently conceived and reduced to practice the form of escapement shown in the figures one to four of the patent and Samuel Dinerstein later conceived the embodiment in figure five, as shown in plaintiff's exhibit No. 1 below.

The first escape wheel assembly made in accordance with the patent in suit was made by Mr. Cummings early in May 1960. By August, working in plaintiff's engineering model shop, and after full disclosure to Mr. Dinerstein, his immediate superior, the head of plaintiff's clock engineering, he completed a handmade group of six such escape wheel assemblies. He began supervision of the making of a sufficient number of such assemblies to iron out any manufacturing problems and became satisfied that the assembly could be mass produced. Engineering drawings which were not sketches but part number drawings had been prepared early in June 1960. A "deviation" release (as distinguished from a "production" release which concerns clocks made to a customer's order) was issued on June 3, 1960.

A deviation release is a routine form to authorize work on something which deviates from regular production items and concerns clocks made for any other purpose than to a customer's order. However the set of "deviation release" drawings, without intervening changes, was later incorporated into the first production release for the resilient escapement.

The plaintiff asserts that Mr. Cummings was not able to complete timekeeping and other tests; that Borg did not have a "cold box" to check operations at low temperatures. Mr. Dinerstein testified that Mr. Cummings had started timekeeping tests but that these were abandoned because the quality control man whom he asked to do the tests did not perform them. Mr. Dinerstein indicated that Mr. Cummings was making some of his own tests to satisfy certain doubts in his own mind but that Mr. Dinerstein did not know when that work was done.

Mr. Cummings, the actual inventor, was on the list of witnesses expected to be called. The defendant notes that he was in the courtroom at the time of the trial. But he did not testify and the record is silent as to what Mr. Cummings was doing after he began timekeeping tests in August 1960 and when he made additional assemblies to iron out problems.

On September 14, 1960, a handmade sample with the new escapement was sent to Cadillac and given to W. E. Barth, Cadillac's clock project engineer. Plaintiff asserts that this was an untested sample sent only to show Cadillac what efforts were being made to reduce noise and to secure the benefit of Cadillac's test program, although it was stipulated that Cadillac never gives technical suggestions as a result of its tests — only rejection or approval. Mr. Dinerstein testified that the submission's purpose would be to find out if the noise reduction was noticeable in cars and if it would pass Cadillac's acceptance test. Plaintiff notes that three other handmade clocks in Cadillac cases and unusable for other cars were delivered to Rolls Royce in Great Britain at no charge solely to obtain comparison on tick noise.

On September 20, 1960, Mr. Barth and other Cadillac engineers who installed the clock in a Cadillac automobile and listened to it in the quiet countryside were pleased with the tick noise reduction. Plaintiff contends that this could not be "approval" as held by the District Court. But R. C. Griffen, plaintiff's Detroit representative, wrote Mr. Dinerstein that the clock had been "o.k.'d" on the tick noise reduction although more work was required on the winding noise which is not an issue here. Plaintiff's engineering test record dated November 20, 1960, says the resilient escapement had been approved by Cadillac.

The District Judge found that Cadillac had taken a calculated risk in approving the feature for its clock before making all the tests. Cadillac ordered, at $10 each, ten clocks with two new features (one was the resilient escapement) which were made and delivered in October 1960 in the expectation that these would be paid for by Cadillac, which, however, did not pay and which was never pressed to do so as it was then buying production quantities of plaintiff's clocks. About half of the sum due for the ten clocks was charged off to a cost of sales account. The District Judge thought that this order and plainiff's delivery showed clocks with the resilient escapement were on sale in 1960. Plaintiff's position is that these ten were only test clocks and were so designated in plaintiff's contemporary internal memorandum.

There were further tests of the clock but the District Court found that these had nothing to do with Cadillac's engineering approval of the resilient escapement in September, 1960.

Customarily an automobile clock is placed "on sale" by submitting a sample with quoted price to the customer and production does not begin until a sale has been made.

On September 20, 1960, Cadillac's engineers sent the matter to the purchasing department. An Engineering Change Request was issued which, if approved by purchasing and management, would have been the basis for an order to plaintiff. Plaintiff asserts that usual procedures were not followed because of the urgency of the noise problem, and that issuance of the Engineering Change Request here only meant that both engineering and purchasing-management operations would function simultaneously in the expectation that the ECR could be canceled if tests were not satisfactory — as it was in fact...