Bergstrom v. Sears, Roebuck and Co., Civil 3-75-248.

• Decision Date: 17 July 1980
• Docket Number: No. Civil 3-75-248.,Civil 3-75-248.
• Citation: 496 F. Supp. 476
• Parties: Theodore R. BERGSTROM, Plaintiff, v. SEARS, ROEBUCK AND CO. and Cardinal American Corporation, Defendants.
• Court: U.S. District Court — District of Minnesota

496 F. Supp. 476

Theodore R. BERGSTROM, Plaintiff, v. SEARS, ROEBUCK AND CO. and Cardinal American Corporation, Defendants.

No. Civil 3-75-248.

United States District Court, D. Minnesota, Third Division.

July 17, 1980.

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

John D. Gould and Douglas J. Williams, Merchant, Gould, Smith, Edell, Welter & Schmidt, P.A., Minneapolis, Minn., for plaintiff.

Jon O. Nelson, Timothy J. Malloy and Mark T. Banner, Allegretti, Newitt, Witcoff

& McAndrews, Chicago, Ill., Charles E. Steffey, Schroeder, Siegfried, Ryan, Vidas, Steffey & Arrett, P.A., Minneapolis, Minn., and Gerald S. Schur, Arnstein, Gluck, Weitzenfeld & Minow, Chicago, Ill. (of counsel for Sears, Roebuck & Co.), for defendants.

MEMORANDUM AND ORDER INCORPORATING FINDINGS OF FACT AND CONCLUSIONS OF LAW

MacLAUGHLIN, District Judge.

This patent infringement action was initiated by plaintiff in 1975 against defendants Sears, Roebuck and Co. and Cardinal American Corporation. In 1978, after defendants requested a separate trial on the validity of the Bergstrom patent under 35 U.S.C. § 102(b), this Court and the Court of Appeals concluded that the patent was not invalid under that particular statute. Bergstrom v. Sears, Roebuck and Co., 457 F.Supp. 213 (D.Minn.1978), aff'd, 599 F.2d 62 (8th Cir. 1979). Prior to trial, Thermograte Enterprises, Inc., a business entity owned by plaintiff and his family and a non-exclusive licensee under the plaintiff's patent, was dismissed as a plaintiff, as were a number of counts which alleged that defendants were liable for unfair competition. Thus, the only remaining theory is one of patent infringement, and the issues before the Court concern the validity of the patent, whether the patent has been infringed and if so, what relief is appropriate. The following memorandum constitutes the Court's findings of fact and conclusions of law as required by Federal Rule of Civil Procedure 52(a).

The Parties

Plaintiff Theodore R. Bergstrom, a St. Paul, Minnesota resident, is the owner of U.S. Design Patent No. 228,728, which relates to the design of a tubular steel fireplace grate. Bergstrom applied for his patent on December 14, 1971, and the patent was issued on October 23, 1973, for a term of fourteen years. Bergstrom's tubular fireplace grate, known as the "Thermograte," functions as both a grate and a heater, as cool air is drawn into the bottom of the tube which is then heated by the fire and expelled from the top of the tube at an elevated temperature.

Defendant Cardinal American Corporation (Cardinal) is a corporation with its principal place of business in Cleveland, Ohio, and was formerly known as Cardinal Production Experts, Inc. Cardinal American Corporation is also the parent corporation of Production Experts, Inc., and the Cardinal Home Products Division. The predecessor of Cardinal American Corporation was also the parent corporation of the Cardinal Foundry & Supply Company, Tel-O-Post, and Wolfe Steel. Cardinal, through its various divisions, began manufacturing and selling a line of tubular fireplace grates known as the Firebird in 1974. The plaintiff has alleged that the Cardinal grate which is known as the Firebird I infringes U.S. Design Patent No. 228,728.

Defendant Sears, Roebuck and Co. (Sears) is a New York corporation which has, since 1975, purchased Firebird I units from Cardinal for resale to consumers. Plaintiff contends that Sears is also liable as an infringer of the Bergstrom patent.

The Development of the Thermograte

During the late 1960's, Bergstrom was employed as a metallurgical engineer at the 3M Company in St. Paul, Minnesota. Bergstrom had considered the problem of the inefficiency of fireplaces for several years. In late 1969 or early 1970 he bent an electrical conduit into the configuration of the letter "C" and wired this tube to a standard fireplace grate in his basement fireplace. Bergstrom observed and tested this structure and determined that cool air was drawn into the bottom of the tube, was heated by the fire, and was then expelled from the top of the tube at higher temperatures into the room. Subsequently, Bergstrom prepared a sketch of a single bend "C" shape tube design, and ordered ten tubes from a local firm. On or about March 1, 1970, Bergstrom assembled a prototype unit. The prototype was comprised of five bent tubes and utilized a separate steel strap which was attached to the lower portion of the grate in order to prevent the logs from rolling out of the grate. Bergstrom tested the prototype and concluded that it functioned very well.

Although the initial prototype satisfactorily performed the objective of forcing and circulating hot air into the room, Bergstrom was not satisfied with the appearance or design of the grate. In the latter part of March, 1970, Bergstrom prepared two drawings of different tube configurations, ordered the tubes, and constructed two new structures shortly thereafter. After testing these two experimental structures, Bergstrom concluded that they too functioned very well, and that none of the three structures performed any better than another.

Bergstrom chose one of the two designs developed in March and April of 1970 as his preferred design. The design selected was comprised of six tubes fastened together by a top strap and two horizontal bottom straps which ultimately turn into the legs of the grate. The tube itself is bent into the general shape of a "C," yet utilizes three bends. The tube configuration adopted by Bergstrom includes a relatively straight section serving as the top tube, a bend, a back section which slants forward slightly, another bend, a horizontal section, and a bend which tilts upward slightly and which serves as the air intake portion. Later in 1970, Bergstrom determined that his structure should be welded rather than using U-bolts.

As the fireplace in our culture generally serves as an aesthetic focal point of the home, Bergstrom's selection of a design was premised to a substantial extent on the appearance of the tubular grate. Bergstrom's choice of design was also premised in part on functional considerations.

In 1971, Bergstrom began advertising and selling Thermogrates on a mail order basis through Thermograte Enterprises, Inc. on both a wholesale and retail level. The response to Bergstrom's product was generally favorable, and the then unique product generated substantial free publicity during the early 1970's as a result of its perceived newsworthiness. Sales of the Thermograte increased significantly so that in 1974, Bergstrom left his employment at 3M to devote full time to his family mail order business. Ultimately, Bergstrom expanded the variety of tubular fireplace grates available in terms of size and the number of tubes.

The Development of the Firebird Heating System

In November of 1973, Robert Kearns, Executive Vice President for sales in one of Cardinal's corporate divisions, purportedly learned of the idea of a tubular fireplace grate at a business seminar on new products. After discussions with Donald Boyd, a vice president of manufacturing for the same Cardinal division, Kearns concluded that as Cardinal was in the business of bending pipe, the idea of a tubular fireplace grate seemed to be a natural product for Cardinal to develop, particularly in light of the looming energy shortage. Thereafter, Kearns took some preliminary steps to analyze the competition and the market for such a product. On January 28, 1974, J. Wesley Sroub commenced working for Cardinal as its product development manager. The principal decisions in connection with the development of the Firebird heating system were made collectively by Kearns, Boyd and Sroub.

On December 12, 1973, Kearns wrote a letter to Thermograte Enterprises, Inc., requesting that a Thermograte be sent to him by mail or that information be furnished as to where a Thermograte could be purchased. Kearns' letter¹ noted that the purpose for the purchase was because "we have a small office with a fire place, and we felt that this might be able to help our heating problem." As Kearns later admitted, he had no fireplace in his office, nor did he have a heating problem. After some delay, Cardinal received a Thermograte on January 30, 1974.

Shortly thereafter, on February 9, 1974, Cardinal officials, including Kearns, Boyd and Sroub, attended a new product meeting at Cardinal which dealt for the most part with Cardinal's proposed tubular fireplace grate. At some point prior to February 9, 1974, Sroub and possibly other Cardinal employees had constructed a prototype of a tubular fireplace grate. This prototype was never produced, and the memories of Cardinal officials are curiously incomplete with respect to the existence and design of the prototype, as well as other circumstances surrounding the creation of the Firebird I. At the February 9th meeting, Cardinal officials compared their prototype with the Thermograte and another model known as the Heat-A-Grate. The minutes of this meeting reflect that Cardinal personnel concluded that the Thermograte was the best model on the market. Prior to the meeting, Sroub prepared a chart which contains illustrations and measurements with respect to the Thermograte, Heat-A-Grate, and Cardinal prototype. This chart depicts the Cardinal prototype in an illustration as having a "C" shaped single bend design resembling the Heat-A-Grate, and as having 1½ inch tubes.

At the meeting, Cardinal principals determined that the design of their tubular grate should be changed to utilize 2 inch 15 gauge tubes as opposed to the initial 1½ inch 16 gauge tubing. The change in tubing size led to some delay in production. The standard Thermograte possessed by Cardinal had 1 7/8 inch 14 gauge tubing. It was also determined that Cardinal should market the product in an unassembled condition for cost purposes. Presumably, as the chart prepared for the new product meeting illustrates the...