Crane Co. v. Aeroquip Corporation

• Decision Date: 18 September 1973
• Docket Number: No. 72 C 1403,72 C 2755.,72 C 1403
• Citation: 364 F. Supp. 547
• Parties: CRANE CO., Plaintiff, v. AEROQUIP CORPORATION, Defendant.
• Court: U.S. District Court — Northern District of Illinois

364 F. Supp. 547

CRANE CO., Plaintiff, v. AEROQUIP CORPORATION, Defendant.

Nos. 72 C 1403, 72 C 2755.

United States District Court, N. D. Illinois, E. D.

September 18, 1973.

Henry L. Brinks, James B. Blanchard and Melvin F. Jager, Hume, Clement, Brinks, Willian, Olds & Cook, Ltd., Chicago, Ill., and Norman Pacun and Geo. S. Schwind, New York City, c/o Crane Co., for plaintiff.

William A. VanSanten, Hofgren, Wegner, Allen, Stellman & McCord, Chicago, Ill., Don K. Harness and Robert L. Boynton, Harness, Dickey & Pierce, Detroit, Mich., and Jerry K. Harness, Jackson, Mich., c/o Aeroquip Corp., for defendant.

MEMORANDUM OPINION

DECKER, District Judge.

These consolidated breach of contract and patent infringement actions arose out of a dispute between the owner of United States Letters Patent No. 2,933,333 ("the suit patent"), plaintiff, Crane Co., and the exclusive licensee under said patent, defendant, Aeroquip Corporation. Most of the relevant background facts are set forth in this court's memorandum opinion of March 13, 1973, which is reported in 356 F.Supp. 733, D.C. At that time plaintiff's motion for partial summary judgment as to royalties and termination of the license agreement and defendant's motion for a preliminary injunction enforcing the license agreement pending consideration of the issues of patent validity and infringement were denied.

The cases have now been tried before the court, and this memorandum opinion will stand as this court's findings of fact and conclusions of law pursuant to Rule 52(a) of the Federal Rules of Civil Procedure.

As this court stated in the March 13th opinion, "the overall importance of the patent validity and infringement issues to the ultimate resolution of the license-validity issue" necessitate consideration of those issues first. Hence, as it is axiomatic that validity must be established before there can be infringement, Walker's Deller on Patents § 588, Vol. 7, p. 425, the issue of validity will be considered first.

I. Validity

A. The Effect of the Consent Decree

In 1967, Crane brought a patent infringement action against Aeroquip in this Court (Civil Action 67C 988), alleging that Aeroquip's 5700 Series Coupling¹ infringed the Bredtschneider, et al., patent (the present suit patent). In settlement of the foregoing civil action, plaintiff and defendant negotiated an exclusive license agreement, by the terms of which Aeroquip became the exclusive licensee under the Bredtschneider patent. The license agreement became effective June 1, 1968, and in connection therewith, a consent judgment was entered on June 12, 1968.

The judgment ordered entered by Judge Marovitz states, inter alia:

"2. That United States Letters Patent No. 2,933,333, was duly and legally issued and is good and valid in law as between the parties to this action.

. . . . . .

"4. That no other relief is granted hereby, the parties representing to the Court that all other matters of relief requested in the pleadings having been settled by agreement of the parties."

Plaintiff argues that the aforesaid prior judgment decree of validity should be given full res judicata effect and govern the issue of validity in this case. Defendant contends that a consent judgment of validity does not prevent a licensee from subsequently contesting validity.

While the question might otherwise be a difficult one, it has already been decided in this Circuit and merits only brief discussion. It is now clear that a consent decree of validity will not bar subsequent assertions of invalidity by a party to the decree, Business Forms Finishing Service, Inc. v. Carson, 452 F.2d 70 (7th Cir. 1971); Butterfield v. Oculus Contact Lens Company, 332 F.Supp. 750, 760 (N.D.Ill.1971), especially where, as here, there was no finding of infringement.² Business Forms Finishing Service, Inc. v. Carson, supra, 452 F.2d at 75. See also, Broadview Chemical Corporation v. Loctite Corporation, 474 F.2d 1391, 1395 (2d Cir. 1973); Addressograph-Multigraph Corp. v. Cooper, 156 F.2d 483, 485 (2d Cir. 1946). Cf. Schnitger v. Canoga Elec. Corp., 462 F.2d 628 (9th Cir. 1972). The foregoing decisions are founded on the policy that the undesirability of having the public pay royalties to one who does not have a valid patent outweighs the desirability of encouraging settlement of lawsuits. Butterfield v. Oculus Contact Lens Company, supra, 332 F.Supp., at 760. Furthermore, the public policy importance of having patents actually adjudicated before foreclosing the issue of validity requires the result reached here. The cases relied upon by plaintiff are inapposite.³ Those cases involved criminal contempt proceedings wherein the defendant wilfully and knowingly violated a court order by selling an infringing product. Hence, the 1968 consent decree does not foreclose consideration of the merits of the validity question here.

B. The Suit Patent

The Bredtschneider, et al. Patent No. 2,933,333 "relates to a coupling for parts of a closed pressure fluid system, and more particularly to such a coupling for connection of such parts containing fluid under pressure and closed at the portions to be secured together." According to one of the inventors (Drewes), the couplings of the suit patent were conceived as a response to problems which had developed in connection with the field installation and repair of split system air conditioning. The need had developed for a connecting means which would reduce contamination and leakage, allow the system to be fully pre-charged at the factory and would be inexpensive and easy to install. The suit patent is allegedly the response to the problem, although plaintiff never actually made physical models of or manufactured any of the couplings shown in the suit patent.

In practice, at least one structure disclosed by the suit patent has been used for permanently connecting split-type air conditioning systems commonly employed for residential central air conditioning systems (Aeroquip 5700 Series coupling). The alleged invention employs a means whereby an unskilled installer, with the use of two wrenches, can couple the pipes leading to the condensor (which is generally placed outside the building) and the cooling coil (which is generally located inside the building) by simply turning a union nut which moves the coupling parts together. Because the pipes are most conveniently pre-charged with refrigerant fluid at the factory, the need for the difficult and costly practice of purging the system of air and contaminants at the installation site was sought to be avoided by developing a "quick-connect", "one-shot" coupling of hermetically sealed conduits. This is claimed to be accomplished by the suit patent with a means for temporarily sealing the connection as the diaphragms at the ends of the connecting pipes are disrupted by a cutter and permanently sealing the connection when the coupling is complete.

Plaintiff claims that the suit patent, as embodied in Aeroquip's 5700 Series coupling and the accused "parent metal seal" 5700 Series coupling, satisfies the aforesaid industry needs by a method properly qualified for patent protection.

There are nine claims presently in issue;⁴ Claims 1-4, 6, 9, 11, 14 and 15. Claim 1-4 emphasize the temporary and final seal aspect of the coupling means. Claim 1 is illustrative and reads as follows:

"A coupling for a closed fluid system, comprising⁵

(1) a pair of coupling parts movable relatively toward each other each having a passage therethrough,

(2) means for moving said parts toward each other in passage-aligning relation,

(3) a relatively thin metallic diaphragm in each part closing the passage therein (4) passaged cutting means disposed interiorly of the parts disrupting said diaphragms upon movement of the parts toward each other to open the passages to each other and defining a portion of the passage through the coupled parts,

(5) means sealing against leakage during movement of the parts to final position after diaphragm disruption, and

(6) gasket means sealing between the parts in final position thereof."

Claims 6, 9, 11, 14 and 15 emphasize the relationship between the diaphragms which close the passages in the coupling parts before they are assembled together and the cutter or piercing means which pierces the diaphragms when the two coupling parts are connected together. Claim 9 is illustrative and reads as follows:

"A coupling for a closed fluid-circulating system, comprising⁶

(1) a pair of passaged coupling parts relatively movable toward each other,

(2) means for moving said parts relatively toward each other in passage aligning relation,

(3) means in each part closing the passage therein,

(4) said closing means engaging against each other upon said movement of the parts and the closing means of one of the parts having separable securement therein for detachment and movement by the other closing means, and

(5) piercing means secured in said one part adjacent and inwardly of the closing means thereof engaging and penetrating said engaged closing means upon said movement thereof to open the passages to each other,

(6) said piercing means including means bearing against and displacing the penetrated closing means toward the wall of the passages to prevent flow obstruction thereby."⁷

C. Novelty

Defendant Aeroquip asserts that Claims 1-4 of the suit patent are invalid as "anticipated" by the invention disclosed in Morrison prior art United States Letters Patent No. 2,507,370 ("Morrison"). Plaintiff argues that Morrison does not function in the same way or achieve the same results as the invention of the suit patent and, therefore, does not "anticipate" it. In determining the question of anticipation, it is necessary to first examine the invention disclosed in Morrison and then consider the scope of the suit patent and its differences from Morrison.

The Morrison patent relates to an invention for a "demountable cold box" to be used for refrigeration purposes....