Ex-Cell-O Corp. v. Litton Ind. Products, Inc.

• Decision Date: 26 September 1979
• Docket Number: No. 5-71654.,5-71654.
• Citation: Ex-Cell-O Corp. v. Litton Ind. Products, Inc., 479 F.Supp. 671, 205 USPQ 612 (W.D. Mich. 1979)
• Parties: EX-CELL-O CORPORATION, Plaintiff, v. LITTON INDUSTRIAL PRODUCTS, INC., et al., Defendants.
• Court: U.S. District Court — Western District of Michigan

479 F. Supp. 671

205 USPQ 612

EX-CELL-O CORPORATION, Plaintiff, v.LITTON INDUSTRIAL PRODUCTS, INC., et al., Defendants.

No. 5-71654.

United States District Court, E. D. Michigan, S. D.

September 26, 1979.

COPYRIGHT MATERIAL OMITTED

Edward W. Osann, Jr., Chicago, Ill., and James H. Bower, Troy, Mich., for plaintiff.

B. C. Foussianes, Detroit, Mich., for defendant.

MEMORANDUM OPINION

RALPH M. FREEMAN, District Judge.

This action was commenced on August 25, 1975, by plaintiffEx-Cell-O Corporation which seeks a declaratory judgment that United States Letters Patent 3,709,623 is invalid and unenforceable.The defendants in this action, Litton Industries, Inc., and its wholly owned subsidiary, Litton Industrial Products, Inc., the latter being the current owner of the patent in suit, have filed a counterclaim for preliminary and final injunctive relief against the infringement of this patent by the plaintiff.

Following extensive discovery, the plaintiff made a motion for a summary judgment contending that the patent in suit was invalid under 35 U.S.C. § 102(b) because the invention was "on sale" more than one year prior to filing of the patent application.In the alternative, the plaintiff maintained that several claims of the patent were invalid for late claiming.In response to this motion, the defendants also moved for a summary judgment that the patent in suit was not invalid on the basis of the "on sale" and late claiming defenses.On October 10, 1978, the Court entered an order denying both of these motions.The Court did, however, grant the plaintiff's motion pursuant to F.R.C.P. 42(b) for a prior and separate trial of the "on sale" and late claiming issues.This opinion represents the Court's findings of fact and conclusions of law based upon the evidence presented at that prior and separate trial.

I.INTRODUCTION

The patent in suit issued on January 9, 1973, on the application of Hollis N. Stephan and Leslie C. Seager.This application, SerialNo. 46,401, is a continuation of abandoned parent application SerialNo. 25,118 originally filed on April 27, 1960.At the time of the original application Stephan, now deceased, was an employee of the Lucas Machine Division of The New Britain Machine Company, Inc. and Seager was an employee of one of Lucas' customers, the Eimco Corporation of Salt Lake City, Utah.Both the original and the continuation applications were assigned to New Britain which was later acquired by defendant Litton Industrial Products.

The patent in suit relates to a conventional, automatically controlled boring, drilling and milling machine with automatic tool changing capability.The machine as described in the preferred embodiment set forth in the patent has a column mounted on a bed.Attached to the column is a vertically movable spindlehead, which includes a power driven rotatable spindle.Also mounted on the bed is a saddle capable of relative movement toward and away from the spindle or column.Mounted on the saddle is a work table capable of movement transversely of the axis of rotation of the spindle.

The machine has a tool rack or magazine with an assortment of tools which is mounted on the work table.Electronically controlled power drives move the spindle, spindlehead, saddle and work table relative to one another and this existing relative movement is utilized to effect a tool change.The machine changes tools by stopping the spindle in a single predetermined angular position, moving the magazine horizontally and the spindle vertically to align the spindle with a tool holding aperture in the magazine, and then moving the spindle axially to engage or disengage a tool in the magazine.

The movements of the spindlehead, work table and saddle are generally referred to in the trade as movements along a particular axis.For example, in a horizontal machine such as that set forth as the preferred embodiment of the patent in suit, the vertical movement of the spindlehead is referred to as movement along the Y axis; the movement of the saddle toward and away from the column or spindle is referred to as movement along the Z axis; and the movement of the work table transversely of the axis of rotation of the spindle is referred to as movement along the X axis.

These relative movements are produced in the machine described in the patent in suit by a system known as numerical control.¹In such a system instructions for the movement of the machine parts and the performance of machining operations is written or punched on tape or cards.These instructions are then read mechanically and transmitted to the machining center.As a result, the machining center is able to automatically complete a number of operations requiring different tools.

Numerical control systems can be used to produce movements along any number of axes.Consequently, the number of axes of relative movement is often used as a modifier of the control system.For example, a control system producing three axes of movement would be referred to as a three-axis numerical control system.

It is clear to the Court that the ability to change tools automatically through the use of a system of numerical control was old in the art as of the date of the original application for the patent in suit.It is also clear that the plaintiff had been producing machines which had the ability to stop the spindle in a predetermined angular position long before Stephan et al. applied for their patent.One of the principal differences between the machining center described in the patent in suit and those described in the prior art is that the machine described in the patent in suit is able to change keyed tools (tools which have keys designed to fit into keyways in the spindle and which are used to transmit the driving power of the spindle to the tool) automatically by repeatedly inserting the tool into the spindle in the same predetermined angular position.The ability to repeatedly insert the tool in the same angular position with respect to the spindle assures consistency and accuracy in machining operations, not obtainable when tools are inserted in the spindle in a random position.

This distinction between the machine described in the patent in suit and other machines produced in the 1950's is clear from an examination of other patents submitted by the parties.For example, it is clear that prior to the application of Stephan et al. means had been devised for changing keyed tools automatically.However, these means could not insure that a tool would be placed in the spindle in the same predetermined angular position each time.Similarly, some machines possessed the capability of placing a particular tool in the spindle in such a way that the torque (produced by the turning action of the spindle) required to free the tool from whatever tool storing mechanism was employed would insure that the angular position of the tool in the spindle remained virtually the same for repeated uses.These machines, however, were incapable of changing keyed tools automatically.

With this brief introduction, the Court will now consider the merits of the case along with the various positions advanced by the parties.

II.ON SALE

The facts relevant to the "on sale" defense may be broadly grouped into two categories.The first category consists of those facts surrounding a transaction between Lucas, the defendants' predecessor, and the Eimco Corporation of Salt Lake City, Utah which transaction is alleged by the plaintiff to constitute a sale of the invention.²The second category consists of positions taken by Stephan et al. in proceedings before the Board of Patent Interferences and the Patent Office with respect to the legal significance of this transaction and the facts surrounding it.The evidence relevant to these two factual categories comes almost exclusively from testimony taken in a mid-1960's interference proceeding where Stephan et al. was one of the parties.In addition, the parties rely on certain documents later submitted to the Patent Office and depositions taken in this action.

Prior to the filing of the original application for the patent in suit, the Eimco Corporation, a long-time customer of Lucas, was in the business of manufacturing crawler tractors and underground mining equipment and had designed a housing for such tractors.All of the machining required to produce these housings was performed by a conventional boring and milling machine, the tools of which were changed manually.Since this was a time consuming process, Eimco was looking for a way to increase its productivity through the purchase of a new boring machine.

Leslie C. Seager, Eimco's chief production engineer at that time, concluded that Eimco was in need of a fully automatic boring mill which could change tools automatically.Seager contacted many machine tool companies but none were able to provide him with a satisfactory proposal for a fully automatic machining center.One of the major hangups appears to have been the reluctance of the companies contacted to meet Seager's requirement that the tooling for the machine was to have the No. 50 National Machine Tool Builders taper driven through keys.As a result of Seager's inability to secure a proposal for the type of machine he felt was needed, Eimco verbally ordered a conventional boring mill from a Lucas competitor, the Bullard Company.The reason that the Bullard Company, rather than Lucas, received this order is that Eimco had become increasingly dissatisfied with Lucas' tools and service and had decided to look elsewhere for its new machine.

In mid-summer 1958, R. E. DuBoc, a distributor for Lucas, learned of Eimco's dissatisfaction and relayed the information to A. J. LeBrun, Lucas' sales manager.On August 8, 1958, LeBrun met with Seager in an attempt to improve Lucas' service and also to convince Eimco to place an order with Lucas.At that meeting, Seager made known his desire for a fully automatic...