Armour Research Foundation v. CK Williams & Co.

• Decision Date: 30 August 1960
• Docket Number: No. 12701-12706.,12701-12706.
• Citation: 280 F.2d 499
• Parties: ARMOUR RESEARCH FOUNDATION, etc. and Minnesota Mining and Manufacturing Company, Plaintiffs-Appellants and Cross-Appellees, v. C. K. WILLIAMS & CO., Inc., Defendant-Appellee and Cross-Appellant. ARMOUR RESEARCH FOUNDATION, etc., Plaintiff-Appellant and Cross-Appellee, v. TECHNICAL TAPE CORPORATION, Defendant-Appellee and Cross-Appellant.
• Court: U.S. Court of Appeals — Seventh Circuit

280 F.2d 499 (1960)

ARMOUR RESEARCH FOUNDATION, etc. and Minnesota Mining and Manufacturing Company, Plaintiffs-Appellants and Cross-Appellees, v. C. K. WILLIAMS & CO., Inc., Defendant-Appellee and Cross-Appellant.

ARMOUR RESEARCH FOUNDATION, etc., Plaintiff-Appellant and Cross-Appellee, v. TECHNICAL TAPE CORPORATION, Defendant-Appellee and Cross-Appellant.

Nos. 12701-12706.

United States Court of Appeals Seventh Circuit.

July 12, 1960.

On Petition for Rehearing August 30, 1960.

Carlton Hill, Edward A. Haight, Chicago, Ill., Charles E. Feirich, Carbondale, Ill., William H. Abbott, St. Paul, Minn., Benjamin H. Sherman, Chicago, Ill., for Armour Research Foundation.

Carl S. Lloyd, Chicago, Ill., Henry Driemeyer, E. St. Louis, Ill., Robert D. Spille, Albert C. Johnston, New York City, Marcus A. Hollabaugh, Washington, D. C., Samuel W. Kipnis, Chicago, Ill., for C. K. Williams & Co. and Technical Tape Corp.

Before HASTINGS, Chief Judge, DUFFY, Circuit Judge, and MERCER, District Judge.

DUFFY, Circuit Judge.

Plaintiffs claim infringement of Camras Patent No. 2,694,656 issued on November 16, 1954, on an application filed July 25, 1947. The patent relates to magnetic recording, popularly known as "tape recording." The first sentence of the patent states: "This invention relates to permanent magnet material and to a method of making the same." The patent explains this magnetic material is then impregnated or coated on a nonmagnetic carrier to produce a magnetic impulse record member.

The Camras patent in suit was issued to Armour Research Foundation of Illinois Institute of Technology (Armour). Plaintiff Minnesota Mining & Manufacturing Company (3M) is the licensee under the patent, and has the exclusive right to grant sub-licenses. Defendant C. K. Williams & Co., Inc. (Williams) produces oxides for magnetic recording tape. Defendant Technical Tape Corporation (Technical Tape) uses those oxides in its production of magnetic recording tape.

Six claims are relied upon by plaintiffs (3, 8, 10, 14, 25 and 26). Claims 8, 10 and 14 call for methods of making "permanent magnetic material" or "oxides." Claim 3 refers to a ferromagnetic iron oxide material adapted to form an element of a magnetic impulse record member. Claim 25 refers to ferromagnetic oxide selected from a group consisting of synthetic ferrosoferric oxide and of a synthetic gamma ferric oxide, adapted to form an element of a magnetic impulse record member. Claim 26 provides: "A magnetic impulse record member having a non-magnetic carrier and a coating adherently bonded thereto of a binder and magnetic material, said magnetic material being the ferromagnetic iron oxide defined in Claim 25, and having a Br versus H characteristic that rises most rapidly at fields between 200 and 600 oersteds and relatively slowly at fields between 0 and 200 oersteds and at fields above 600 oersteds."

It is interesting to note that there were no "record member" claims in the Camras application between November 29, 1948 when the first group of such claims was cancelled after rejection, and April 29, 1954, a period of about 5½ years.

Williams is charged with infringing claims 3, 8, 10, 14, 25, and contributory infringement of claim 26. Technical Tape is charged with infringement of claims 3, 25 and 26.

The District Court devoted four weeks to hearing and considering the extensive trial testimony. The oral testimony of sixteen witnesses was heard. The deposition testimony of ten other witnesses was considered. The trial court also had the advantage of courtroom demonstrations. The District Court prepared a detailed and carefully considered opinion which, with findings of fact and conclusions of law, may be found in 170 F. Supp. 871.

The Court found 1) that to a person skilled in the art, the magnetic iron oxide and method of producing it claimed in the patent were disclosed by several prior art references; 2) that all of the claims including the record member claims are lacking in invention, and the record member claims are not proper combination claims; and 3) that the claimed oxide was known, used and placed on sale in one instance, and the oxide was in public use in another, more than a year prior to the filing of the Camras application.

The Court dismissed the complaints in the consolidated actions. The Court also dismissed the two counterclaims of defendant Williams. One was for a declaratory judgment holding the patent invalid and not infringed. Although this counterclaim was dismissed, it was, in effect, sustained by the Court's holding of invalidity of the patent in suit. The second counterclaim alleged misuse of the patent and asserted violation of the antitrust laws. Williams has cross-appealed from the dismissal of its counterclaims, and both defendants cross-appealed from a part of the judgment offsetting costs and failing to award attorneys' fees.

The art of magnetic recording is based upon the fact that a magnetic member (magnetic impulse record member) may be varyingly magnetized to record a varying electric current signal, such as from a microphone, which is sent through the winding of an electromagnet when said member is moved across a pole of the magnet. For playback, the member so magnetized is, in turn, moved across the pole of an electromagnet to generate a varying electric current in the winding thereof, so the signal originally recorded may be reproduced. In order to suppress background noise and to produce a better response, a bias current is ordinarily employed to impress a bias field on the signal field.¹

Initially, commercial magnetic recorders in the United States used wire as a recording medium. As early as the 1930's magnetic recorders were used in Germany, where tape was used as the recording medium. The tape was coated or impregnated with magnetic iron oxide. Immediately following World War II, the Brush Development Company of Cleveland, started production of a magnetic recorder known as the "Soundmirror." It used a tape with a low coercive force magnetic oxide.

While the work on the Soundmirror was going on, Indiana Steel Products Company produced a tape recorder using a tape with high coercive force (about 250 oersteds) magnetic powder having particle sizes in the one micron range. After examining the Indiana Tape Recorder, Armour negotiated in an effort to obtain exclusive rights to the Indiana machine and medium. Indiana refused to commit itself to an exclusive arrangement. After the introduction of the Brush tape recorder, Armour set out to make a tape recorder of its own that "would use the same basic ideas as are now employed in our wire recorders" and planned to bring Indiana under an Armour's license agreement.

In 1945, Camras began extensive experimentation which plaintiffs claim led to the invention of the patent in suit. Plaintiffs say the patent in suit discloses and claims an improved magnetic recording tape; improved magnetic iron oxides which constitute the magnetic material of the tape; and methods assuring the production of such oxides embodying those magnetic and physical characteristics found by Camras to be necessary to achieve the improvements named.

All the twenty-six claims of the patent have one characteristic in common. They call for a "synthetic" magnetic iron oxide powder of the well-known classes of ferrosoferric oxide, Fe304, and gamma ferric oxide, Fe203, which is characterized as having a coercive force of at least 200 oersteds.² Although plaintiffs several times emphasized that the iron oxide powder was synthetic, the term "synthetic" was not incorporated into the claims until more than four years after the date of the patent application. The word "synthetic" is nowhere found in the specification.

Plaintiffs place great stress on what they call the "criteria" of the patent. They say that after Camras had made and tested a large number of tapes, certain magnetic criteria were developed which, combined with the pyhsical criteria as to particle, size and shapes of the oxides enabled Camras to show how to make a superior magnetic recording tape capable of faithfully recording and reproducing high frequency notes at slower tape speeds than previously used.

Plaintiffs assert important criteria of the patent are: 1) a relatively high coercive force of 200 to 550 oersteds; 2) gentle slope of the lower bend of the Br versus H curve³ to a point about 250 gauss where the curve begins to rise rapidly; 3) a rapid rise from 250 to 600 oersteds; 4) a high remanence of above 500 gauss, and a Bfm/Br ratio of less than 3 to 1; 5) a synthetic material comprised preferably of particles of less than 1.5 microns and not more than 6 mircons in maximum dimension and consisting of acicular or elongated particles.

The patent discloses the close interrelationship between the oxides and the recording mechanism. The District Court stated this situation very well in the following language: "There is practically an inseparable tie between the recording machine and the media to be used therewith. A magnetic recorder is not complete nor operative to give its intended performance until the mechanism is supplied with media having the same form and magnetic characteristics of the media it was designed to use. The machine is tailored to use a recording media having particular characteristics. The media are manufactured to provide those characteristics."

Plaintiffs claim that after the commercial introduction of the Camras tape by 3M in 1947, it proved a great commercial success and supplanted tapes previously used. The testimony showed that by 1957, 3M sales of the tape covered by the patent exceeded $8,000,000 in value.

Many of the findings of the District Court on the question of validity were, in large part, based on testimony before the Court by expert, technical and fact witnesses. The tests and demonstrations gave the Court a keen insight as to the claims and contentions of the parties. Under such circumstances, we...