Carson Mfg. Co., Inc. v. Carsonite Intern. Corp., Inc.

• Decision Date: 13 October 1981
• Docket Number: No. 79-4474,79-4474
• Citation: 686 F.2d 665
• Parties: CARSON MANUFACTURING COMPANY, INC., a California Corporation, Plaintiff-Appellant, v. CARSONITE INTERNATIONAL CORPORATION, INC., and High Performance Composites, Inc., Nevada Corporations, Defendant-Appellees.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 665

686 F.2d 665

212 U.S.P.Q. 566

CARSON MANUFACTURING COMPANY, INC., a California Corporation, Plaintiff-Appellant, v. CARSONITE INTERNATIONAL CORPORATION, INC., and High Performance Composites, Inc., Nevada Corporations Defendant-Appellees.

No. 79-4474.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted April 14, 1981.

Decided Oct. 13, 1981.

Harris Zimmerman, Oakland, Cal., for plaintiff-appellant.

Vaughn W. North, Sandy, Utah, argued, for defendants-appellees; Thorpe, North, Western & Gold, Sandy, Utah, David D. Harrison, Feix & Harrison, Burlingame, Cal., on brief.

Before TRASK and BOOCHEVER, Circuit Judges, and CURTIS, ^* District Judge.

TRASK, Circuit Judge:

This appeal stems from a dispute over appellant Carson Manufacturing Co.'s manufacture and distribution of a highway marker which is very similar to a patented marker manufactured and distributed by appellee Carsonite International Corp. Appellant argues that the court below erred in awarding damage and injunctive relief for patent infringement, trademark infringement, and unfair competition based on a jury verdict of appellant's liability. We reverse.

I

Both parties identify Schmanski Patent 4,092,081 Claim 1, with dependent Claims 12, 13, 17, and 18; and Claim 20, with dependent Claims 24 and 25; as the claims relevant to the patent infringement issues. On this appeal, appellant contends that none of these claims is entitled to a presumption of validity because some prior art references were not cited to the patent examiner in the initial application. It also asserts that the patent is invalid and, in any event, not infringed. Appellee claims that it adequately disclosed the prior art, and that the jury verdict of infringement is supported by substantial evidence.

A

Although the ultimate question of patent validity is a legal one, Graham v. John Deere, 383 U.S. 1, 17, 86 S.Ct. 684, 693, 15 L.Ed.2d 545 (1966) (quoting A & P Tea Co. v. Supermarket Corp., 340 U.S. 147, 155, 71 S.Ct. 127, 131, 95 L.Ed. 162 (1950)), appellant raises two issues which are relevant to the degree of scrutiny that we should give to the judgment below: whether the Schmanski patent is entitled to a presumption of validity, and whether the patent is a so-called 'combination patent.'

Under 35 U.S.C. Sec. 282, a patent is presumed valid, and the burden of showing invalidity rests with the party challenging the patent. This presumption of validity can be rebutted only by clear and convincing evidence. Saf-Guard Prods., Inc. v. Service Pts., Inc., 532 F.2d 1266, 1271 (9th Cir. 1976), cert. denied, 429 U.S. 896, 97 S.Ct. 258, 50 L.Ed.2d 179; see St. Regis Paper Co. v. Bemis Co., 549 F.2d 833, 838 (7th Cir.), cert. denied, 434 U.S. 833, 98 S.Ct. 119, 54 L.Ed.2d 94 (1977). However, where the obviousness of a patent as compared to the prior art is in issue and the patent applicant fails to disclose relevant prior art, the presumption disappears. Hewlett-Packard Co. v. Tel-Design, Inc., 460 F.2d 625, 628 (9th Cir. 1972); see Kamei-Autokomfort v. Eurasian Automotive Prods., 553 F.2d 603, 605 (9th Cir.), cert. denied, 434 U.S. 860, 98 S.Ct. 186, 54 L.Ed.2d 133 (1977); Alcor Aviation, Inc. v. Radair, Inc., 527 F.2d 113, 115 (9th Cir. 1975), cert. denied, 426 U.S. 949, 96 S.Ct. 3170, 49 L.Ed.2d 1186 (1976). Nevertheless, the presumption remains intact if the undisclosed prior art is merely cumulative of the cited art. Saf-Guard Prods., Inc. v. Service Pts., Inc., 532 F.2d at 1271 (quoting Schnadig v. Gaines Mfg. Co., 494 F.2d 383, 391 (6th Cir. 1974)).

Claims 20, 24, and 25 are clearly not entitled to a presumption of validity, because they were declared invalid by the examiner during the reissue proceedings. Claims 1, 12, 13, 17, and 18, however, were declared valid even after presentation of previously uncited prior art references during those proceedings.

Only one prior art reference, the Trelleborg patent, was not cited to the examiner at any stage of the proceedings. However, there is nothing about this reference that is not suggested by one or more of the references that were eventually cited to the examiner at some point in the proceedings. Thus, the Trelleborg patent is merely cumulative of the cited art, and, therefore, Claims 1, 12, 13, 17, and 18 are entitled to a presumption of validity.

A combination patent is an invention totally composed of old elements which are combined in an unprecedented manner. See Sakraida v. Ag Pro, Inc., 425 U.S. 273 280-81, 96 S.Ct. 1532, 1536-37, 47 L.Ed.2d 784 (1976); M-C Inds. v. Precision Dynamics Corp., 634 F.2d 1211, 1213 (9th Cir. 1980); Herschensohn v. Hoffman, 593 F.2d 893, 895 (9th Cir.), cert. denied, 444 U.S. 842, 100 S.Ct. 84, 62 L.Ed.2d 55 (1977). Such patents are subject to a more rigorous test of validity: A combination patent will be upheld only if it produces an 'unusual' or 'surprising' result. M-C Inds. v. Precision Dynamics Corp., supra, 634 F.2d at 1213; Hewlett-Packard Co. v. Tel-Design, Inc., 460 F.2d 625, 629 (9th Cir. 1972); Regimbal v. Scymansky, 444 F.2d 333, 337-40 (9th Cir. 1971). ¹ The rationale for heightened scrutiny of combination patents is to ensure that knowledge is not withdrawn from the public domain into the protected monopoly of one whose invention has not really advanced the art. See A & P Tea Co. v. Supermarket Equip. Co., 340 U.S. 147, 152-53, 71 S.Ct. 127, 130-31, 95 L.Ed. 162 (1950). The issue here is whether each element of the Schmanski patent is old in the art.

It is evident from the record that each element of the patent is indeed old in the art. The fiberglass formula (Claim 1), the variable EI concept as it relates to driveability and flexibility (Claim 1), installation by means of driveable rigid-body casings (Claims 12 and 13), the marker's shape (Claims 17 and 18), and the longitudinal rib supports (Claim 18), are each suggested by one or more of Humphrey, Schmanski-Rose, Barnett, the German patent, and Trelleborg.

Nevertheless, appellee argues that the Schmanski patent should not be considered a combination patent, because it protects a unitary object and not a mechanical or other device composed of discrete component parts. According to appellee, only the latter fall within the definition of a combination patent.

The Schmanski marker does indeed consist of a single tangible element. Nevertheless, it does not follow that the patent cannot be considered a combination. The defining language used by the cases does not limit combination patents to devices composed of discrete component parts. See, e. g., Great A & P Tea Co. v. Supermarket Equip. Co., supra, 340 U.S. at 152, 71 S.Ct. at 130 ('an assembly of old elements,' 'unites old elements with no change in their respective functions'); Sakraida v. Ag Pro, Inc., supra, 425 U.S. at 280-81, 282, 96 S.Ct. at 1537 (combination of old elements); M-C Inds. v. Precision Dynamics Corp., supra, 634 F.2d at 1213 ('combines old elements in a different way'); Herschensohn v. Hoffman, supra, 593 F.2d at 895 ('All . . . elements are old in the art'). But see SSP Agricultural v. Orchard-Rite, Ltd., 592 F.2d 1096, 1101 (9th Cir. 1979) ('mechanical' combination of old elements). Moreover, Schmanski combines a number of abstract teachings and concepts which are individually old in the art. This court has long held that a patent need not be exclusively composed of tangible elements to be considered a combination. Hewlett-Packard Co. v. Tel-Design, Inc., supra, 460 F.2d at 629-30 & n.10; see Santa Fe-Pomeroy v. P & Z Co., 569 F.2d 1084, 1091 (9th Cir. 1978); Griffith Rubber Mills v. Hoffar, 313 F.2d 1, 3 (9th Cir. 1963).

The cases compel the conclusion that whether a patent is a combination patent depends, not on the unitary or component nature of the patented invention or on the tangibility of its elements, but instead on whether each element of the invention is old in the prior art. Under this analysis, we find the Schmanski patent to be a combination patent. Accordingly, we will uphold it only if we find that it produces an unusual or surprising result.

B

Appellant argues that the Schmanski patent is invalid because of obviousness, anticipation, overbreadth, and fraud. We find it necessary to consider only the first argument.

Nonobviousness is a statutory requirement of patentability. See 35 U.S.C. Sec. 103. The question of a patent's obviousness should be decided against the background of three factual determinations: (1) the scope and content of the prior art, (2) differences between the prior art and the claims at issue, and (3) the level of ordinary skill in the pertinent art. Graham v. John Deere Co., supra, 383 U.S. at 17, 86 S.Ct. at 693. ² These factors were drawn from language in the legislative history of section 103:

An invention which has been made, and which is new in the sense that the same thing has not been made before, may still not be patentable if the difference between the new thing and what was known before is not considered sufficiently great to warrant a patent.

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If this difference is such that the subject matter as a whole would have been obvious at the time to a person skilled in the art, then the subject matter cannot be patented.

Graham v. John Deere Co., supra, 383 U.S. at 14, 15, 86 S.Ct. at 692 (quoting S.Rep.No.1979, 82d Cong., 2d Sess. 6 (1952); H.R.Rep.No.1923, 82d Cong., 2d Sess. 7 (1952)). The finder of fact must ascertain the state of the prior art, the differences between the disputed patent and the prior art, and the level of ordinary skill in the art. The ultimate question, however, is one of law: Are the differences of such magnitude that they would not have been evident at the time of invention to one possessed of ordinary skill in the art?

The jury did not render a special verdict disclosing specific findings on the Graham inquiries, so we do not know how the jury arrived at its...