Clock Spring, L.P. v. Wrapmaster, Inc.

• Decision Date: 25 March 2009
• Docket Number: No. 2008-1332.,2008-1332.
• Citation: 560 F.3d 1317
• Parties: CLOCK SPRING, L.P., Plaintiff-Appellant, v. WRAPMASTER, INC., Applied Consultants, Inc., and Glenn Davis (personally and including his marital estate), Defendants-Appellees.
• Court: U.S. Court of Appeals — Federal Circuit

560 F.3d 1317

CLOCK SPRING, L.P., Plaintiff-Appellant, v. WRAPMASTER, INC., Applied Consultants, Inc., and Glenn Davis (personally and including his marital estate), Defendants-Appellees.

No. 2008-1332.

United States Court of Appeals, Federal Circuit.

March 25, 2009.

Tim Headley, Law Offices of Tim Headley, of Houston, TX, argued for plaintiff-appellant.

William L. Prickett, Seyfarth Shaw LLP, of Boston, MA, argued for the defendants-appellees. With him on the brief was Jason J. Jarvis of counsel on the brief were William G. Arnot, III and Ira P. Domnitz, Winstead Attorneys, of Houston, TX.

Before BRYSON and DYK, Circuit Judges, and PATEL, District Judge.^*

DYK, Circuit Judge.

Clock Spring, L.P. ("Clock Spring") brought suit alleging that Wrapmaster, Inc. ("Wrapmaster") infringed the claims of U.S. Patent No. 5,632,307 ("'307 Patent") and violated section 43(a) of the Lanham Act, 15 U.S.C. § 1125(a)(1)(A). The '307 Patent claims methods for repairing damaged high-pressure gas pipes. On summary judgment the United States District Court for the Southern District of Texas held that the claims of the '307 Patent were invalid due to obviousness and that the Lanham Act claim was without merit. We affirm the summary judgment of invalidity because we conclude that the claims of the '307 Patent are invalid as a matter of law, due to prior public use. We do not reach the issue of invalidity due to obviousness. Additionally, we affirm the district court's summary judgment determination that the false advertising claim is without merit.

BACKGROUND

Both Clock Spring and Wrapmaster are high-pressure gas pipeline repair companies. Clock Spring is the exclusive licensee of the '307 Patent. The '307 Patent has five independent claims and thirty-eight dependent claims. All are method claims. Claim 1 of the '307 Patent reads as follows:

A method for repairing a pipe adapted to carry an internal load directed radially outward therefrom, said pipe having a defective region defined by at least one cavity extending from an outer surface of said pipe toward the center of said pipe but not extending completely through the wall of said pipe, said method comprising the steps of:

providing a filler material having a workable uncured state and a rigid cured state,

filling said cavity to at least said outer surface of said pipe with said filler material in said workable state, providing at least one band having a plurality of elastic convolutions of high tensile strength material,

while said filler material is in said workable state, wrapping said plurality of convolutions of said high tensile strength material about said pipe to form a coil overlying stud filler material[,]

tightening said coil about said pipe so that said filler material completely fills that portion of said cavity underlying said coil[,] securing at least one of said convolutions to an adjacent one of said convolutions, and

permitting said filler material to cure to said rigid state, whereby a load carried by said pipe is transferred substantially instantaneously from said pipe to said coil.

'307 Patent col.12 ll.9-34 (emphases added). The parties appeared to agree, or at least not contest, that the main distinctive feature over the prior art is wrapping the pipe while the filler is in an uncured state so as to ensure smooth and continuous contact between the wrap and the pipe. The other independent claims (claims 38, 39, 42, and 43) also require wrapping in an uncured state, but address different types of defects and repair methods. The various dependent claims add further limitations for the properties of the materials used in the individual steps of the method (e.g., requiring that the filler's "rigid cured state has a compressive strength of at least about 9,000 psi"). '307 Patent col.12 ll.59-60.

In 2005 Clock Spring filed an infringement suit against Wrapmaster alleging infringement of all the claims of the '307 Patent. It also filed a separate Lanham Act suit alleging that Wrapmaster "used in commerce a false and misleading description of fact, and false and misleading representation of fact, which in commercial advertising or promotion, misrepresents the nature, characteristics and qualities of [Clock Spring's] goods, services, and commercial activities." Pl.-Appellant's Compl. at 30, Clock Spring, L.P. v. Wrapmaster, Inc., No. 4:05-CV-01388, 2005 WL 1244210 (S.D.Tex. April 20, 2005). The two suits were consolidated.

After discovery, Wrapmaster filed a summary judgment motion of invalidity of all the claims of the '307 Patent and a separate summary judgment motion on the Lanham Act claim. Somewhat surprisingly, neither motion was supported by expert affidavits. We treat the two motions separately.

The invalidity summary judgment motion argued that the claims were invalid due to a prior public use under 35 U.S.C. § 102(b) in October 1989, in Cuero, Texas, more than one year before the patent application was filed in 1992. The motion was supported by a 1994 Gas Research Institute ("GRI") report (hereinafter "1994 GRI report") regarding the demonstration made by named inventor Norman C. Fawley ("Fawley").¹ GRI, since renamed the Gas Technology Institute, is a non-profit research and development organization which was entitled to receive royalty payments from Clock Spring on the '307 Patent. The motion also urged that the claims were invalid on grounds of obviousness based on a number of prior art patents.²

Clock Spring opposed the motion. Clock Spring did not dispute that the 1989 demonstration was public, or that it involved the limitations of the patent with one exception. Clock Spring apparently urged that the 1989 demonstration had not involved the application of the wrap with an uncured filler, and that the use had been experimental. Clock Spring also urged that the patent claims were not obvious.

The district court referred the motion to a magistrate judge for recommendations. The magistrate judge recommended that the district court grant summary judgment of invalidity with respect to the claims of the '307 Patent.

The magistrate judge first addressed Wrapmaster's contention that the '307 Patent is invalid due to prior public use. The magistrate judge concluded that the 1994 GRI report proved that there was no genuine issue of material fact regarding whether the filler compound was uncured when the wrap was applied to the pipe. The magistrate judge also rejected Clock Spring's argument that the use was experimental. Based on this, the magistrate judge recommended finding that the 1989 demonstration triggered the public use bar under 35 U.S.C. § 102(b). Clock Spring, L.P. v. Wrapmaster, Inc., No. 4:05-CV-00082, slip op. at 11-12 (S.D.Tex. Dec. 19, 2007).

The magistrate judge then addressed Wrapmaster's contention that the claims of the '307 Patent are invalid due to obviousness. In her analysis, the magistrate judge primarily relied upon the combination of the '524 Patent with the '337 Patent. The '524 Patent's claims closely follow most of the claims for methods of repairing a pipe from the '307 Patent with the notable exception of any limitation requiring wrapping the pipe while the filler material is still in its uncured state. Although directed at low-pressure pipelines, the '337 Patent teaches a method of repairing a pipe by applying a sealing tape, the first layer of which is a "conformable, tacky pressure-sensitive composition" that partially fills the hole in the pipe and then wrapping a curable resin-impregnated fabric over the patch. '337 Patent col.1 ll.59-60; id. at col.2 ll.10-11; id. at fig. 6. The magistrate judge concluded that the '337 Patent thus taught the technique for wrapping a pipe while the filler is in its "uncured state." Evidently finding a motivation to combine, the magistrate stated that the '337 Patent technique would be known to those having ordinary skill in the art, and that it would have been obvious to try on a high-pressure gas line. The magistrate judge recommended that the '307 Patent claims were invalid due to obviousness over prior art patents. Clock Spring, No. 4:05-CV-00082, slip op. at 18-20.

On review in the district court Clock Spring objected to the magistrate judge's recommendations, now arguing that three limitations of the claims were not present in the 1989 demonstration—the uncured state limitation, the requirement that the pipe have a "cavity," and the requirement that the "filler" be applied to the "cavity." The "defective region" with a "cavity" is described in the specification as "pits," "crevices," "gouging," and "denting." '307 Patent col.1 ll.34-37; id. at col.5 ll.5-6. The district court did not address whether the 1989 demonstration included all claim limitations. In support of its argument on experimental use to the district court, Clock Spring submitted new evidence including additional GRI reports (some of which mentioned the 1989 demonstration) and a 28-page report by NCF Industries, Inc.³ ("NCF report") concerning the 1989 demonstration. Though characterizing the late submission of these documents as "clearly improper," the district court considered them and concluded that Clock Spring had "raise[d] a fact question about whether the 1989 installation was experimental," relying on the NCF report, a 1993 GRI report, and a 1998 GRI report.⁴ The district court did not explain why these reports raised a genuine issue of material fact. Clock Spring, No. 4:05-CV-00082, slip op. at 2 (S.D.Tex. Mar. 31, 2008). The district court thus rejected the magistrate's recommendation concerning the public use bar. id. However, the district judge agreed with the magistrate judge as to obviousness and granted summary judgment of invalidity due to obviousness. id.

The proceedings with respect to the Lanham Act claim also involved a summary judgment motion and a referral to the magistrate judge. Clock Spring's Lanham Act complaint seemed to allege that Wrapmaster had made false statements...