Dale Electronics, Inc. v. RCL Electronics, Inc.

Decision Date05 December 1973
Docket NumberNo. 73-1203,73-1204.,73-1203
Citation180 USPQ 225,488 F.2d 382
PartiesDALE ELECTRONICS, INC., Plaintiff, Appellant, v. R. C. L. ELECTRONICS, INC., Defendant, Appellee. DALE ELECTRONICS, INC., Plaintiff, Appellee, v. R. C. L. ELECTRONICS, INC., Defendant, Appellant.
CourtU.S. Court of Appeals — First Circuit

Donald H. Zarley, Des Moines, Iowa, with whom Martin L. Gross, Sulloway, Hollis, Godfrey & Soden, Concord, N. H., Michael G. Voorhees, Zarley, McKee, Thomte & Voorhees, Des Moines, Iowa, and James J. Holmberg, Columbus, Neb., were on brief, for Dale Electronics, Inc.

Arnold Sprung, New York City, with whom Nathaniel D. Kramer, and Burgess, Dinklage & Sprung, New York City, were on brief, for R.C.L. Electronics, Inc.

Before COFFIN, Chief Judge, MOORE* and McENTEE, Circuit Judges.

COFFIN, Chief Judge.

These cross appeals stem from a patent infringement action, involving five patents relating to electrical resistors, their structure, method of construction, and design.1 The proceedings also included a claim of unfair competition. The district court, after an extensive trial, made a number of rulings. Since these are cross appeals, we shall refer to plaintiff below in the major action, Dale Electronics, Inc., simply as Dale, the owner of the patents, and defendant, the original defendant and counterclaimant, R.C.L. Electronics, Inc., as R.C.L. Since we do not reach many of the rulings, we shall not list them here but shall indicate our holding under each heading and shall indicate the rulings in the court below which are not reached. At the conclusion of the opinion we shall summarize our holdings.

The electrical resistors involved in these patents consist of an initial resistor wire wound around a ceramic core. Their purpose is to conduct electricity in an electrical circuit while converting part of the electricity to heat. The quality of "resistance" is the ability of the wire to use up electricity. The function of the core, whether a tube or cylinder, is to support the coiled wire, without taking electricity from the wire. The core, in other words, must be an insulator. But, since much heat is associated with resistance, a resistor core also must be able to absorb and dispose of heat through terminals at its ends. In short, a core should not only be a good insulator; it should be a good conductor. Generally, a good conductor of heat is also a good conductor of electricity; and a poor conductor of electricity, i.e., a good insulator, is a poor conductor of heat. The ceramic known as beryllium oxide (BeO), has the distinction of being both a good electrical insulator and a good thermal conductor. Herein lies much of our story.

The '090 Patent

The district court, 356 F.Supp. 1117, characterized the essence of this patent as "the use of beryllium oxide of at least ninety percent purity as the core of the resistor." This is consistent with Dale's description in its brief: "The single claim of this patent sets forth the BeO core in combination with the conventional resistor components, and requires further that the BeO comprise at least 90 percent by weight of the core to insure that the requisites of certain load life test be met." The court fully acknowledged the fact that the use of BeO as a core in electrical resistors, first devised by Dale's assignor and employee, Hay, was eminently successful, enabling resistors, avoiding concentrated build-up of heat by BeO's high conductivity, to achieve longer life at higher temperatures than traditional ceramic cores and to be produced in smaller size, fitting "the miniaturization revolution". Nevertheless, the court held the patent invalid for obviousness.2

In so doing the court relied, in varying degrees, on several sources of prior art. The first, and the only prior art referred to in the file wrapper, consisted of two patents: the Von Wedel Patent (No. 2,075,876) granted April 6, 1937, which observed that BeO, when mixed with materials such as fluorides, made an admirable insulating coating for twisted wires operating at high temperatures; and the Lindenblad Patent (No. 2,734,344), granted February 14, 1956, which used BeO as rings or sleeves around banks of thermo-couples, because they were both thermally conductive but electrically insulating, thus giving excellent heat transfer from one bank of thermo-couples to another. The court cited these patents as bearing "directly on the issue", but did not rely heavily on them.

The court then referred, without further exegesis, to a number of scientific articles published in the 1950's explaining the use of BeO as a combination insulator and conductor.3 It then went on to what it termed more "crucial" aspects of the prior art which it said lay not in the patents or scientific articles but in the "manner" in which the inventor, Hay, came to use BeO. The court noted that Hay's acquaintance with BeO resulted from a conversation with a salesman of a company supplying ceramic cores to Dale, leading to an order for BeO which was never fulfilled. Next came Hay's visit to a trade show in August of 1961 where Hay ordered sample cores of BeO from National Beryllia Corporation. National Beryllia, the court observed, had, in 1959, advertised in a trade journal the availability in quantity of "Berlox" (pure BeO), "extremely high in thermal conductivity and electrical resistivity", in various shapes and forms for insulators and other uses.4 The court found that in 1961 Hay himself received a graph, prepared by National Beryllia, illustrating a dramatic exponential increase in thermal conductivity for materials comprising a BeO component of at least 90 per cent in weight. The court concluded that "the adaptation by Hay of beryllium oxide was obvious to him and would have been to anyone skilled in the art."

We agree. We begin with observing that the file wrapper history leaves us somewhat puzzled. The thrust of Dale's effort before us, and before the district court has been the uniqueness of using 90 per cent BeO as the core of a resistor. Yet this application required almost five years of siege before the Patent Examiner yielded. He had firmly, up to almost four years after filing, resisted a positive recommendation, saying knowledge of the properties of 90 per cent BeO was old in the art. Finally, the examiner, while rejecting all of the structural claims, stated that a new claim, describing the performance of the core at maximum temperature for a fixed period of time, specifying a maximum temperature and a minimum deviation in resistance value for the resistor, would be acceptable. Whereupon without explanation for the about-face, all the previously rejected structural descriptions, conjoined with the new performance assurance, gained a favorable decision.

We therefore face a Patent Office ruling that approaches the point where "we are at a loss to explain the Examiner's allowance on the basis of such a distinction." Graham v. John Deere Co., 383 U.S. 1, 34, 86 S.Ct. 684, 702, 15 L.Ed.2d 545 (1966). While the grant of a patent carries with it a presumption of validity, we tend to view the strength of the presumption in this case as minimal. See Hawley Products Co. v. United States Trunk Co., 259 F.2d 69, 72, 74 (1st Cir. 1958). On the other hand, we deal with a decision made by a district court in a field which lends itself to several "factual inquiries": "the scope and content of the prior art", the "difference between the prior art and the claims at issue", and "the level of ordinary skill in the pertinent art". 383 U.S. at 17, 86 S.Ct. at 694. These factual determinations are entitled to weight in our deliberations. See discussion infra.

Dale does not challenge reference to the VonWedel and Lindenblad patents and the scientific articles we have referred to in n. 3. As we have implied, these are more than insubstantial bases for a finding of obviousness, particularly when coupled with the 1959 National Beryllia advertisement.5 Dale concentrates its fire on the propriety of the court's heavy reliance on Hay's conversation with the salesman, his attendance at the trade show, and the National Beryllia graph. Preliminarily, Dale argues that none of these can constitute prior art because they are not or have not been proven to be "publications".6 Dale seems to be seizing on one category of prior art as exclusive. In Graham, supra, 383 U.S. at 15, 86 S.Ct. at 692, the Court refers to the Congressional reports in relation to § 103 defining the condition of obviousness as referring to "the difference between the subject matter sought to be patented and the prior art, meaning what was known before as described in section 102." Section 102 refers to the conditions which foreclose invention. Among them are that the invention was known . . . by others", § 102(a), and that the supposed inventor "did not himself invent the subject matter", § 102(f). Since § 102 is the referent for § 103, we draw the conclusion that if the facts that the whole of an invention was known to others or that none of the invention was created by the patent applicant bar entitlement under § 102, the condition of knowledge by others or the borrowing by the applicant of a sufficient body of lore to make the invention obvious bars entitlement under § 103. General Instruments Corp. v. Hughes Aircraft Co., 399 F.2d 373, 384 (1st Cir. 1968) (notebooks recording experimental work were accepted as evidence of prior art); see Colourpicture Publishers v. Mike Roberts Color Productions, 394 F.2d 431, 434-435 (1st Cir. 1968) (common objects were contemplated as eligible prior art).

Coming to the facts, the whole significance of Hay's conversation with the salesman is muted somewhat by the fact that Dale could not find a copy of Hay's letter to the salesman following the conversation. But enough remains. Hay testified that, had it not been for his conversation with the salesman, in which the latter suggested BeO as a core...

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