Cataphote Corporation v. DeSoto Chemical Coatings, Inc.

• Decision Date: 19 May 1964
• Docket Number: No. 40985.,40985.
• Parties: CATAPHOTE CORPORATION, Plaintiff, v. DeSOTO CHEMICAL COATINGS, INC., Defendant.
• Court: U.S. District Court — Northern District of California

235 F. Supp. 931

CATAPHOTE CORPORATION, Plaintiff, v. DeSOTO CHEMICAL COATINGS, INC., Defendant.

No. 40985.

United States District Court N. D. California, S. D.

May 19, 1964.

Merriam, Smith & Marshall, Chicago, Ill., and Lerer & Moltzen, San Francisco, Cal., for plaintiff.

McDougall, Hersh & Scott, Chicago, Ill., and Hoppe & Mitchell, San Francisco, Cal., for defendant.

SWEIGERT, District Judge.

The issue presently before the Court in this patent litigation is raised by defendant's motion for a separate trial (Rule 42b, Fed.R.Civ.P., 28 U.S.C.) on the issue whether plaintiff's alleged invention is invalid because placed in public use or on sale in this country more than one year prior to the date of application for said patent within the meaning of 35 U.S.C. § 102(b).

Defendant's motion is based upon Plaintiff's Answers to Interrogatories of Defendant filed November 20, 1962 and January 31, 1963; Plaintiff's Answers to Defendant's Request for Admissions, filed March 7, 1963; Defendant's Motion and Points and Authorities, filed December 23, 1963; defendant's Points and Authorities filed January 31, 1964; and depositions of Poole, Christie, W. H. Searight and C. E. Searight, which have been lodged but not filed with the Court, and defendant's Closing Brief, filed February 26, 1964. Plaintiff filed briefs in opposition January 15, 1964 and February 10, 1964.

In support of its motion, defendant states that its discovery thus far has established the following facts:

In September, 1955, plaintiff Cataphote employed the Arthur D. Little Company of Cambridge, Massachusetts, to engage in research looking to the development of a light-reflective, thermoplastic composition to be used in marking highways. The Arthur D. Little Company employed John A. Poole to work on the project. During the remainder of 1955 and prior to November 12, 1956, the Arthur D. Little Company on several occasions sent to Cataphote large quantities of a thermoplastic composition which embodied a formula developed by Poole. Cataphote arranged to have several hundred pounds of said composition laid down on public highways in various cities throughout the United States.

The patent at issue consists of the above-mentioned Poole thermoplastic composition and its method of application.

On three specific occasions, in May and June, 1956, Cataphote sold the Poole composition to the cities of Grand Rapids, Lansing and Jackson, Michigan. In connection with said sales, Cataphote issued regular invoices and received payments. In addition, Cataphote paid its salesman Reed a commission for said sales.

Thomas B. Christie, former manager of sales and promotions for Cataphote, installed the patented combinations in the three above-mentioned cities. He testified at his deposition taken November 19, 1963, that the installations were "demonstrations" and "experimental" applications in order to determine how the Poole combination would stand up under normal public use. However, Christie also testified that he did not make a subsequent re-examination of the installations he had laid down and that he did not know if anyone from Cataphote had made such a subsequent examination. Further, William H. Searight, who was president of Cataphote at that time, testified in his deposition taken November 19, 1963, that he did not directly inspect the traffic lines after their installation in Grand Rapids, Lansing or Jackson.

However, Charles E. Searight, presently the president of Cataphote, testified at his deposition taken November 19, 1963, that he received oral reports concerning the installations in Grand Rapids and Lansing. As a result of said reports, Cataphote replaced one installation at no cost and gave a credit for the charge incurred in the other installation, which was not replaced. Charles E. Searight further testified that Cataphote communicated the information obtained from these reports to Poole by forwarding said information to the Arthur D. Little Company. Charles E. Searight also testified that there was no follow-up after the Jackson installation.

Poole testified at his deposition taken November 18, 1963 that he did not know of any installations of his invention in Grand Rapids, Jackson or Lansing.

Under 35 U.S.C. § 102(b) a person is not entitled to a patent where the invention was in public use or on sale in this country more than one year prior to the date of the application for patent in the United States. Defendant concedes for the purposes of its motion that the date of plaintiff's application was November 12, 1957. However, defendant contends that the evidence which it has discovered is to the effect that plaintiff's patent was on sale or in public use prior to November 12, 1956. In addition to the Lansing, Grand Rapids and Jackson sales set forth in defendant's depositions, defendant relies on other sales and conduct of plaintiff (e. g., fact that Cataphote on July 23, 1956, filed its application for the trademark "Thermaline" for the Poole combination, in which application Cataphote claimed that the combination had been in continuous use since June 14, 1956) which is not set forth by affidavit, deposition or otherwise factually in the record presently before the Court.

Plaintiff contends that any use or sale of the patented combination prior to November 12, 1956 was experimental. An exception to the requirement of seasonable disclosure of new inventions set forth in 35 U.S.C. § 102(b) occurs in those situations in which the use in question is of an experimental nature. An inventor, once he has conceived his invention, is accorded sufficient time to perfect his invention. During this period, the time that elapses is not computed as part of the one year requirement of 35 U.S.C. § 102(b). City of Elizabeth v. American Nicholson Pavement Co., 97 U. S. 126, 24 L.Ed. 1000 (1878); Electric Storage Battery Co. v. Shimadzu, 307 U. S. 5, 613, 616, 59 S.Ct. 675, 83 L.Ed. 1071 (1939); Atlas v. Eastern Air Lines, Inc., 311 F.2d 156 (1st Cir. 1962), cert. den. 373 U.S. 904, 83 S.Ct. 1290, 10 L.Ed.2d 199 (1962); Ushakoff v. United States, 327 F.2d 669 (Ct.Cl.1964). This exception applies even where the experimental use results in an incidental profit to the inventor. However, the exception does not apply where the use is mainly for the purposes of trade and profit, and the experiment is merely incidental to that end. Smith & Griggs Mfg. Co. v. Sprague, 123 U.S. 249, 256, 8 S.Ct. 122, 31 L.Ed. 141 (1887).

Defendant contends that plaintiff's conduct does not come within the exception for experimental use. Defendant points out that the president of Cataphote conceded that there was no follow-up to the Jackson installation. Defendant contends that Cataphote treated the Grand Rapids and Lansing sales as complete by replacing one defective marking and giving credit for another. None of the contemporaneous invoices executed by Cataphote in the Lansing, Grand Rapids and Jackson sales used the word "experimental" or "proforma" to indicate that the sale was not an ordinary business transaction. Cataphote did not directly inform Poole of the installations or the test results of said installations, notwithstanding the fact that the justification for the experimental use exception is to allow the inventor to perfect his invention.

Thus, should the Court grant a separate trial, the issue before the Court would be whether Cataphote placed the patented combination on sale or in public use in Grand Rapids, Lansing or Jackson, Michigan, or in any other area, prior to November 12, 1956, and, if so, whether such sales or uses qualify under the experimental use exception.

Under Rule 42(b), Fed.R.Civ.P., 28 U.S.C., the Court in furtherance of convenience or to avoid prejudice may order a separate trial of any issue. Generally, a separate trial should not be granted unless the issue is clearly severable from the other issues in the case and does not involve the same evidence. 5 Moore, Federal Practice, Sec. 4203 at 1217 (2d ed. 1951).

Plain...