Environmental Instruments, Inc. v. Sutron Co.

• Decision Date: 19 May 1988
• Docket Number: Civ. A. No. 87-577-A.
• Citation: 688 F. Supp. 206
• Court: U.S. District Court — Eastern District of Virginia
• Parties: ENVIRONMENTAL INSTRUMENTS, INC., Plaintiff, v. The SUTRON COMPANY, Defendant.

688 F. Supp. 206

ENVIRONMENTAL INSTRUMENTS, INC., Plaintiff, v. The SUTRON COMPANY, Defendant.

Civ. A. No. 87-577-A.

United States District Court, E.D. Virginia. Alexandria Division.

May 19, 1988.

COPYRIGHT MATERIAL OMITTED

James H. Laughlin, Jr., Benoit, Smith & Laughlin, Arlington, Va., for plaintiff.

John S. Hale, J.W. Gipple, Gipple & Hale, McLean, Va., for defendant.

MEMORANDUM OPINION

ELLIS, District Judge.

INTRODUCTION

Plaintiff, Environmental Instruments, Inc. (EII), brings suit alleging patent infringement by the defendant, Sutron Company (Sutron). Specifically, EII asserts that Sutron infringed upon EII's patent for a "Thermal Directional Fluid Flow Transducer," United States Patent No. 3,900,819 (hereinafter the '819 patent). Sutron responds that the '819 patent is void, and seeks to have it, as well as EII's patent for a "Directional Fluid Flow Transducer," United States Patent No. 3,995,481 (hereinafter the '481 patent), declared invalid. Moreover, Sutron asserts that EII committed fraud upon, and engaged in inequitable conduct before, the Patent Office in obtaining the '481 patent, and seeks treble damages and injunctive relief for unfair competition and antitrust violations.

The Court holds that the '819 patent is valid, but that there has been no infringement by Sutron. In addition, the Court holds that the '481 patent is invalid because the prior art rendered it obvious. Finally, the Court finds that EII did not commit fraud upon, or engage in inequitable conduct before, the Patent Office in obtaining '481 patent, nor did EII commit any acts constituting antitrust violations or unfair competition. This Memorandum Opinion records the Court's findings of fact and conclusions of law, pursuant to Rule 52, Fed.R.Civ.P.

As this suit arises under the patent laws of the United States, jurisdiction is properly premised on 28 U.S.C. § 1331 (Federal question), and 28 U.S.C. § 1338 (patents). Venue is appropriate under 28 U.S.C. § 1400(b).

FINDINGS OF FACT¹

A. The Parties

EII is engaged in the design, manufacture and sale of directional wind-sensing equipment that has a variety of applications, including use in battle tank fire-control systems. Sutron is engaged in the design, manufacture and sale of environmental monitoring systems, and competes with EII for the sale of systems that employ directional wind sensing equipment. This case concerns two patents, the '819 patent and the '481 patent, both of which are relevant to the design and manufacture of wind-sensing equipment.

The named inventor of the inventions claimed in the '819 and '481 patents is Robert Djorup. In 1971, when the inventions were being developed, Djorup was associated with Environmental Instruments Group (EIG), a predecessor of EII. Djorup was a founder of EII in late 1971, and was EEI's technical director until he left the company in 1975. Djorup assigned to EII both his patent application number 330,400, which subsequently issued as the '819 patent, and his divisional application, which ultimately issued as the '481 patent.

Since 1977, Djorup has been an independent consultant and a licensor of hot film anemometry technology² to Cossonay, a Swiss competitor of EII.³ Djorup has granted licenses to Cossonay under which Djorup receives income from sales of certain wind sensors alleged by EII to infringe Djorup's '819 patent.⁴ It is uncontested that Sutron has purchased approximately sixty wind sensing probe heads from Cossonay. EII asserts that these probe heads contain sensing elements with a configuration that infringes Claim 1 of the '819 patent. In order to determine whether there has been any infringement, the Court must make findings regarding the scope and interpretation of the '819 patent claim as well as the design of the Cossonay probe heads. The Court must also make findings with respect to the validity of the '481 patent.

B. The '819 Patent

The '819 patent was issued August 19, 1975, and covers a directional mass fluid sensor with electrical conductors separated from each other by an insulated bridge that prevents fluid flow around one conductor independent of the other conductor. The overall cross-sectional shape of the sensor is a figure eight:

The '819 patent contains only one claim.⁵ This single claim was allowed only after extensive negotiations between Djorup and the Patent Office. The original '819 application contained fifty-five claims, none of which described the overall shape of the sensor as being a "figure eight" in cross-section.⁶ The Patent Examiner, Elliot Goldberg, rejected all fifty-five original claims. Importantly, Claim 1 was rejected as being anticipated under 35 U.S.C. § 102 by the Hayakawa '085 patent.⁷ The prosecution history⁸ of the '819 patent establishes that Djorup then amended Claim 1 in order to escape the Hayakawa patent. Specifically, the amendments (i) defined the overall shape of the sensor as being a "figure eight" in cross-section, with the conductors being exposed to ventilation over at least a majority of their surface, and (ii) included additional structural limitations defining the sensor conductors as hollow, refractory cylindrical substrate supporting bodies extending the length of the conductor and on which is adhered a conductive resistance film having a non-zero temperature coefficient over the length of the substrate body. As amended, Claim 1 was the sole '819 claim ultimately allowed by the Patent Examiner.

The '819 patent application was filed on February 7, 1973. Prior to the filing of the application, however, Djorup was in contact with a number of companies interested in wind-sensing equipment for use in battle tanks.⁹ For example, from approximately 1968 to 1972, Djorup attempted to develop for Hughes Aircraft Company a cross-wind probe for use in a tank fire-control system. Djorup collaborated in the development of this probe with SABCA, a Belgian licensee of the Hughes fire control system, which was designing a similar system for use in Belgian Army tanks. EIG, which later became EII, was under contract to both Hughes and SABCA to develop and supply the cross-wind probes.

Between 1968 and 1971 Djorup developed and supplied to both Hughes and SABCA experimental prototype "double bridge" probes.¹⁰ These probes were not successful. In April or May of 1971, however, Djorup discovered that the double bridge probes could be improved and half the electronics eliminated by forming a single bridge probe. Djorup thereafter supplied to Hughes and SABCA, free of charge, experimental prototype single bridge probes for evaluation and testing. In early 1972, Djorup delivered to Hughes a prototype single bridge probe for evaluation. In February 1972, Hughes evaluated the probe and prepared to return it to Djorup. Ultimately Hughes chose not to return the probe, and instead sent a check, dated February 9, 1972, to pay for the probe.¹¹ Hughes then submitted a purchase order, dated May 3, 1972, to EII for eleven single bridge cross-wind sensors. With respect to SABCA, Djorup testified that a single bridge probe was sent "on consignment with no consideration" in August 1971.¹² Djorup first claimed that he put no restrictions on the use of the probe sent to SABCA, but subsequently testified that he told SABCA the probe would be the subject of a patent application and requested that SABCA "not openly disclose the probe to people who shouldn't know about it." (TR 235).

In addition to its dealings with Hughes and SABCA, EII had contacts regarding its cross-wind probes with Martin-Marietta Corporation, General Electric, the Frankfort Arsenal, which is a United States agency related to the U.S. Army tank program, and the British Embassy. None of these contacts is properly characterized as an offer for sale. Djorup testified that in November 1971 he provided a probe to Martin-Marietta similar to that described in the 819 patent for possible use in the Mars Landing Program. Yet Djorup testified that he gave the probe to Martin-Marietta for testing, and that "this was something that EII regarded as its property and that Martin-Marietta was to be careful in their disclosure of it to recognize EII's claim of ownership." (TR 241). With respect to General Electric, Djorup testified that he communicated with GE regarding the development of a windsensing probe for installation on a helicopter. On cross-examination, however, Djorup testified that his recollection was "hazy" and he could not remember which type of EEI probe was shipped to General Electric. Also, deposition testimony was introduced in which Djorup stated that although single element probes were shipped to GE, they were not of the type described in the '819 or '481 patents. Djorup also testified that in March 1970, he took a purchase order from the Frankfort Arsenal for a single bridge probe unit. Yet Djorup had previously testified that the '819 invention was not even conceived until April or May of 1971, at least one year after the purported, undocumented proposal and sale to the Frankfort Arsenal. Finally, with respect to the British Embassy, Djorup testified that in 1971 he submitted price quotations for both double bridge and single bridge ('819) probes. The only documents introduced, however, show the delivery of two double bridge units to the British Embassy in 1970. Accordingly, the defendant has failed to prove an offer for sale by EEI of any probe covered by the '819 patent one year prior to the filing of the patent application.

C. The Sutron Sensors

Close inspection of the Cossonay sensors sold by Sutron reveals that they have a "racetrack," or oval, configuration, depicted as follows:¹³

In addition, the RTV material that bonds the elements runs across the diameter of the circle of each conductor element so that the conductors are not exposed to ventilation over a majority of their surface. This is in sharp contrast to the elements in the '819 patent, which are almost entirely exposed.

D. The '481...