Cody v. Aktiebolaget Flymo, 23575.

• Decision Date: 09 September 1971
• Docket Number: No. 23575.,23575.
• Citation: 452 F.2d 1274
• Parties: John F. CODY et al. v. AKTIEBOLAGET FLYMO et al., Appellants.
• Court: U.S. Court of Appeals — District of Columbia Circuit

452 F.2d 1274 (1971)

John F. CODY et al. v. AKTIEBOLAGET FLYMO et al., Appellants.

No. 23575.

United States Court of Appeals, District of Columbia Circuit.

Argued September 14, 1970.

Decided September 9, 1971.

Petition for Rehearing Denied November 2, 1971.

Certiorari Denied March 20, 1972.

Messrs. Laurence R. Brown, Washington, D. C., and John H. Lewis, Jr., Arlington, Va., for appellants.

Messrs. George M. Hopkins, Atlanta, Ga., and Edwin L. Reynolds, Washington, D. C., for appellees. Mr. Lawrence L. Colbert, Washington, D. C., also entered an appearance for appellees.

Before McGOWAN and ROBINSON, Circuit Judges, and CHRISTENSEN,^* United States District Judge, District of Utah.

Certiorari Denied March 20, 1972. See 92 S.Ct. 1254.

McGOWAN, Circuit Judge:

This is an appeal from a reversal by the District Court in a patent interference case of a ruling of the Board of Patent Interferences. We are confronted on this appeal with difficult questions regarding both the procedural propriety of the District Court's decision, and, given the applicable burden of proof and standard of review, the sufficiency of appellees' proof of reduction to practice. We are also called on by appellants to decide two issues, resolved neither in the Patent Office nor in the District Court, relating to the patentability of appellees' invention. For the reasons stated below, we affirm the judgment of the District Court, 306 F.Supp. 728.

I

Appellants are Aktiebolaget Flymo, a Swedish corporation, and Karl R. Dahlman, an inventor and himself a resident of Sweden. Appellees John Cody and George Sites are the inventors of one of the devices in question in this case. That invention, claimed by both parties, is a wheelless lawnmower sustained at the appropriate level above the ground on a thin cushion of air. Appellants filed their patent application on March 12, 1962 and, because they were the first to file on the device, took on the status of "senior party" in these proceedings. Appellees, the "junior party" herein, filed their application on November 7, 1962, some seven months after appellants' filing. On November 19, 1963, while the applications were co-pending, the Patent Office awarded a patent to appellants.

Several months thereafter, in conformance with applicable procedures for creating an interference, appellees amended their original application. Claiming that their device fitted the descriptions of appellants' invention, they copied thirteen claims from the recently issued patent and requested that interference proceedings be instituted. On March 18, 1965, following the additional filing by appellees of several necessary supplemental affidavits, the Examiner of Patent Interferences declared an interference as to three of the thirteen claims. Those claims, constituting the pertinent counts in interference, are reprinted in the margin.¹

The central issue between the parties, as in all patent interferences, was whether the one or the other was the original inventor of the grass-cutting machine. Resolution of that issue depends upon the determination as to which party first, in point of time, reduced his invention to practice. Appellants relied on March 16, 1961, the date on which their invention had been made the subject of a patent application in Sweden, as their earliest date of constructive reduction to practice.² Appellees, seeking to best appellant's showing, relied on tests conducted in the spring and fall of 1960 as evidencing a prior reduction to practice. It was upon the sufficiency of their showing on that score that the question of priority turned.

As the junior party in interference, appellees' burden before the Board of Patent Interferences was to establish their claim of prior reduction to practice by a preponderance of the evidence.³ Consistent with the standard practice in such proceedings, all of appellees' evidence was submitted in deposition and exhibit form. 37 C.F.R. §§ 1.251-57, 1.271-81 (1971). Although appellants submitted no direct evidence, their counsel was present when depositions were being taken and briefly cross-examined several of appellees' witnesses. After hearing oral argument, the Board of Patent Interferences held in appellants' favor on March 23, 1967. The Board's findings emphasized that appellees had failed to demonstrate that the lawnmower they built in 1960 operated in an acceptable manner for its intended purpose, i. e., they failed to meet their burden of proof on the question of priority. The Board reaffirmed its position two months later in a short opinion denying appellees' request for reconsideration.

Faced with the statutory alternatives of appealing the Board's ruling to the Court of Customs and Patent Appeals⁴ or bringing a civil action in the District Court,⁵ appellees elected to pursue the latter course. Following the filing of the law suit, and after the passage of nearly two years of preliminary sparring between the parties, appellees filed a motion for summary judgment. Appellants opposed the motion and file a summary judgment motion of their own, requesting, in the alternative, that the court either affirm the Board or, if it were to conclude that the junior party had met his burden before the agency, to consider appellants' two claims that the device in question was not patentable to appellees in any event. By Memorandum Opinion dated June 19, 1969 and Order of Judgment dated July 7, 1969, the District Court granted appellees' motion, reversed the Board, and remanded the case. The court refused to pass on the two patentability questions raised by appellants on the grounds that they had not been "developed in any detail before the Board" and that such matters were not within the scope of review of questions of priority of invention.⁶ This appeal followed.

II

Before addressing ourselves to the substantive issues — priority and patentability — in this case, we consider two preliminary questions. First, what measuring rod or standard of review has been established to guide the district courts in scrutinizing the Board's actions in these somewhat unusual de novo proceedings? Second, given that standard of review, can disposition, short of a full evidentiary hearing, by way of summary judgment ever be appropriate in a case in which the Board's conclusion is to be overturned?

A Supreme Court precedent, which has been consistently applied by the federal courts in reviewing the Board's interference rulings for over seventy years, provides the cornerstone for our consideration of the first question. In Morgan v. Daniels, 153 U.S. 120, 125, 14 S.Ct. 772, 773, 38 L.Ed. 657 (1894), the Court in a unanimous opinion held:

"Upon principle and authority, therefore, it must be laid down as a rule that, where the question decided in the patent office is one between contesting parties as to priority of invention, the decision there made must be accepted as controlling upon that question of fact in any subsequent suit between the same parties, unless the contrary is established by testimony which in character and amount carries thorough conviction."

(Emphasis supplied.) The applicability of this "thorough conviction" standard to the district court's deliberations in such cases can hardly be questioned.⁷ Appellants acknowledge that standard, and argue that it was not satisfied here, and indeed can never be satisfied in the absence of the presentation in the district court of new evidence not previously considered by the Board. Stated differently, the argument is that the Board's factual conclusions in an interference proceeding are conclusive on the district court if the dissatisfied party elects, as here, to rely on the record made before the Board.

The notion that a new-evidence test inheres in de novo review proceedings finds its source in the statutorily established alternate routes of appeal open to a party dissatisfied with a Patent Office decision. He may either appeal to the Court of Customs and Patent Appeals, 35 U.S.C. §§ 141-144, or file a civil action in the district court, 35 U.S.C. § 146. Should he do the former, the statute makes clear that the Court of Patent Appeals "shall hear and determine such appeal on the evidence produced before the Patent Office." 35 U.S.C. § 144 (emphasis supplied). When one chooses to proceed in the district court, however, his proof may carry him well beyond the confines of the administrative record.

It is this difference regarding the comparative scope of the matters the two tribunals may consider which meaningfully distinguishes the one from the other, and often is the determinative factor in the dissatisfied party's choice of forum. That this factor lies at the center of the differences between the two alternatives is evidenced by the Supreme Court's discussion in Hoover Co. v. Coe, 325 U.S. 79, 83, 65 S.Ct. 955, 957, 89 L.Ed. 1488 (1945):

"It is evident that alternative rights of review are accorded an applicant, — one by appeal to the United States Court of Customs and Patent Appeals, and the other by bill in equity filed in one of the federal district courts. In the first the hearing is summary and solely on the record made in the Patent Office; in the other a formal trial is afforded on proof which may include evidence not presented in the Patent Office." (Emphasis supplied.)

In its examination of the legislative history of these review statutes, the Court noted that in 1927 an effort was made in Congress to abolish one alternative or the other but that it proved unsuccessful, thus "saving to litigants the option of producing new evidence in a court, by retaining the equity procedure." Id. at 87, 65 S.Ct. at 959.

As a practical matter there would appear to be little incentive for a party to come into the district court unless he contemplated a further evidentiary presentation. Initially, as reflected in the following exchange between court and counsel at the summary judgment hearing, that consideration seems to have...