Day-Brite Lighting, Inc. v. Sandee Manufacturing Co.

• Decision Date: 28 February 1961
• Docket Number: No. 13028.,13028.
• Citation: 286 F.2d 596
• Parties: DAY-BRITE LIGHTING, INC., Plaintiff-Appellee, v. SANDEE MANUFACTURING CO., Defendant-Appellant.
• Court: U.S. Court of Appeals — Seventh Circuit

286 F.2d 596 (1960)

DAY-BRITE LIGHTING, INC., Plaintiff-Appellee, v. SANDEE MANUFACTURING CO., Defendant-Appellant.

No. 13028.

United States Court of Appeals Seventh Circuit.

December 12, 1960.

Rehearing Denied February 28, 1961.

Charles B. Spangenberg, Sidney Wallenstein, Chicago, Ill., for defendant-appellant.

Owen J. Ooms, Chicago, Ill., Frederick M. Woodruff, St. Louis, Mo., Malcolm S. Bradway, Ooms, Welsh & Bradway, Chicago, Ill., for plaintiff-appellee; Gravely, Lieder & Woodruff, St. Louis, Mo., of counsel.

Before SCHNACKENBERG, KNOCH and MAJOR, Circuit Judges.

MAJOR, Circuit Judge.

This is an action for infringement of United States Patent No. Design 181,238, for a panel of lighting fixtures, which was issued October 15, 1957, on an application filed with the United States Patent Office on June 7, 1956, in which Leo G. Stalhut and Carl X. Meyer are named as inventors and of which plaintiff is now the owner. Plaintiff also charges unfair competition.

Plaintiff is in the business of manufacturing and selling lighting fixtures for commercial and industrial use. It does not manufacture or sell panels as such but purchases them for incorporation into its lighting fixtures, which it manufactures and sells under its own name. The sales of plaintiff's fixtures are made through its representatives and selected distributors to electrical contractors and large industrial users, such fixtures normally being specified by architectural engineers, installations being made by electrical contractors. It advertises its fixtures in trade journals and by direct mail to its own representatives, its distributors and their salesmen, to architects, engineers and certain large industrial users.

Plaintiff's panel is called "Cleartex" and was sold to it by KSH Plastics, Inc., for incorporation by plaintiff in its lighting fixtures. Plaintiff commenced the sale of its fixtures with said "Cleartex" panels therein about April 1956. Plaintiff is the owner of United States Trademark Registration No. 660,987 for the trademark "Cleartex," which was issued April 29, 1958, and which trademark plaintiff utilizes in connection with its extruded plastic panels shown in the design of the patent in suit.

Defendant is in the business of manufacturing and selling extruded plastics, including panels for lighting fixtures. Defendant does not manufacture or sell lighting fixtures but sells its panels to manufacturers who in turn incorporate such panels in their lighting fixtures and sell them, under their respective names, through electrical distributors and electrical contractors. Defendant sells its panels through its own salesmen direct to its lighting fixture manufacturer customers, and defendant's advertising is by direct mail to such customers.

Defendant's panels alleged to infringe were manufactured and sold under its trade name, "Horizon," with three designs referred to as "First Horizon," "Second Horizon" and "Third Horizon." Defendant contends that the patent is invalid in view of the prior art and for lack of invention, and denies infringement as well as the charge of unfair competition.

The District Court entered its findings of fact, from which it concluded that the patent was valid, that it was infringed by each of defendant's "Horizon" panels and that defendant was guilty of unfair competition. The Court in its findings did not describe the prior art relied upon by defendant. However, in the interim between the entry of its findings and conclusions, referring to such art the Court stated, "It is sufficient to say that on the basis of that evidence the question of patentable invention is a close one here," but "the statutory presumption of validity and especially marked commercial success, such as I have found * * * are sufficient to resolve the question here, and I conclude that the element of invention was present and that the patent is valid."

Defendant contends that the Court erred in utilizing these two generally recognized principles in sustaining validity. It argues that the presumption of validity does not apply because pertinent prior art was not considered by the Patent Office and that as against such art the presumption does not exist. This Court has frequently so held. Senco Products, Inc. v. Fastener Corp., 269 F.2d 33, 34; Hobbs v. Wisconsin Power & Light Co., 250 F.2d 100, 105; Johnson Laboratories, Inc. v. Meissner Mfg. Co., 98 F.2d 937, 943, and Boynton v. Chicago Hardware Foundry Co., 77 F.2d 799, 780.

Plaintiff does not dispute this exception to the presumption of validity rule but argues that it is applicable only where there is a showing that the prior art is more pertinent than that cited and ruled upon by the Patent Office, and that defendant made no such showing. None of the cited cases attach such a condition to the exception rule.

Defendant does not dispute the commercial success rule (that is, increased sales) but argues that it is applicable only where such success is attributable to the patent in suit as distinguished from other factors, and that in any event it cannot be utilized to resolve in favor of validity a doubtful or close question of invention.

The Court found that plaintiff in its advertising matter offered a choice of at least seven different panels, that within three years after its introduction the "Cleartex" panel was outselling all other panels offered by plaintiff and that it "has had marked commercial acceptance and success." The Court made no specific finding that such commercial success was due to the design of the patent rather than to other factors; in fact, it is doubtful if the evidence would support such a finding. There is testimony, apparently undisputed, that there were numerous factors other than the alleged uniqueness and distinctiveness of plaintiff's design which contributed to the increased sales of its "Cleartex" panels. Among such factors were plaintiff's advertising and sales promotion campaign, sale of lighting fixtures with its "Cleartex" panel at a lesser price than fixtures with other panels and an increased interest in plastic panels as distinguished from those of glass. It was also shown that the utilitarian and functional characteristic of plaintiff's lighting fixtures was a factor in the increased sales.

The trial judge, in relying upon marked commercial success, cited Spaulding v. Guardian Light Co., Inc., 7 Cir., 267 F.2d 111. It is true this Court in that case stated (at page 113), "We have held, and it is the general rule, that in a close case commercial success may tip the scales in determining whether an improvement amounts to an invention." At the same time, we approved of a finding of the District Court that plaintiff had failed to show that his asserted commercial success "was due to the design disclosed in the patent in suit as distinguished from the utility of the fixture, the sales efforts of plaintiff and other factors." In the more recent case of Amerock Corp. v. Aubrey Hardware Mfg., Inc., 275 F.2d 346, 348, this Court rejected the alleged commercial success in support of the validity of a design patent. In doing so, we stated, "The design in question proved to be its best seller and sold almost ten to one over a companion pull with a straight handle. How much these sales were induced by promotion, advertising or functional value we do not know."

In our view, the asserted commercial success under the showing before us carries no weight in support of the validity of plaintiff's patent.

The prior art chiefly relied upon by defendant are "Unilite" and "Twinlite" lens panels of Corning Glass Works, Rolph patent No. 2,280,160, and McPhail patent No. 2,474,317, each of which discloses designs for panels on fluorescent lighting...