FMC Corp. v. Manitowoc Co., Inc.

• Decision Date: 16 December 1987
• Docket Number: No. 87-1220,87-1220
• Citation: 5 USPQ2d 1112,835 F.2d 1411
• Parties: 1987-2 Trade Cases 67,816, 5 U.S.P.Q.2d 1112 FMC CORPORATION, Plaintiff-Appellant, v. The MANITOWOC COMPANY, INC., Defendant-Appellee.
• Court: U.S. Court of Appeals — Federal Circuit

Page 1411

835 F.2d 1411

1987-2 Trade Cases 67,816, 5 U.S.P.Q.2d 1112

FMC CORPORATION, Plaintiff-Appellant, v. The MANITOWOC COMPANY, INC., Defendant-Appellee.

No. 87-1220.

United States Court of Appeals, Federal Circuit.

Dec. 16, 1987.

Raymond P. Niro, Niro, Scavone, Haller & Niro, Ltd., Chicago, Ill., argued, for plaintiff-appellant. With him on the brief, were Timothy J. Haller and Robert A. Vitale, Jr. Also on the brief, were Richard B. Megley, and Ronald C. Kamp, and Paul E. Slater and Jerry M. Santangelo, Sperling, Slater & Spitz, P.C., Chicago, Ill.

Phillip H. Mayer, of Leydig, Voit & Mayer, and Richard S. Rhodes, Chadwell & Kayser, Ltd., Chicago, Ill., argued, for defendant-appellee. Also on the brief were Berton Scott Sheppard and Charles H. Mottier, Leydig, Voit & Mayer, and C. Lee Cook, Jr., Brian J. Redding, Marsha K. Hoover and Julia D. Mannix, of Chadwell & Kayser, Ltd., Chicago, Ill.

Before MARKEY, Chief Judge, BALDWIN, Senior Circuit Judge, and SMITH, Circuit Judge.

MARKEY, Chief Judge.

Appeal from a judgment of the United States District Court for the Northern District of Illinois, Eastern Division (Hart, J.), upholding the validity of U.S. Patent No. 3,485,383 ('383) owned by The Manitowoc Company, Inc. (Manitowoc), finding the '383 patent not infringed by FMC Corporation (FMC), and resolving the issues raised by FMC's claims of inequitable conduct, attorney fees, antitrust violation, and unfair competition in favor of Manitowoc. We affirm.

Background

On September 5, 1980, FMC sued for a judgment declaring that its heavy lift cranes did not infringe the '383 patent, that the patent was invalid and unenforceable, and that Manitowoc's maintenance and threatened enforcement of the patent constituted unfair competition because FMC was forced to "design around" the patent procured through inequitable conduct. Manitowoc then sued FMC for infringement and FMC counterclaimed, alleging violation of the antitrust laws. The two cases were not formally consolidated but were treated and tried together.

Proceedings encompassed over six years in the district court and involved participation for varying periods of two magistrates and four district judges. The case, including pretrial skirmishes, generated over 1000 entries on 80 docket pages. The record exceeded 17,000 pages.

On January 30, 1987, after conducting six weeks of trial, hearing numerous witnesses, and rendering many rulings, Judge Hart entered a comprehensive 60-

                page set of clearly stated findings and conclusions, in which he incorporated his evaluations of the evidence and his reasoning, and to which he appended drawings admitted as exhibits.    FMC Corp. v. Manitowoc Co., 654 F.Supp. 915, 2 USPQ2d 1969 (N.D.Ill.1987). 1   The invention, the issues, and the actions and contentions of the parties in this case are thoroughly set forth in the above-cited reports.  Familiarity therewith is presumed and discussion here is limited to facts involved in disposition of this appeal
                

Issues

(1) Whether the district court abused its discretion in denying attorney fees.

(2) Whether the district court erred in resolving the antitrust issues against FMC.

(3) Whether the district court erred in resolving the unfair competition issues against FMC.

OPINION

The Appeal

FMC says it appeals from the portions of the judgment that hold the '383 patent enforceable, deny its request for attorney fees, and reject its unfair competition and antitrust claims. Though FMC charges the district court with a Niagara of legal error on a plethora of issues, the appeal turns primarily on whether the district court correctly determined that Manitowoc was not guilty of inequitable conduct when it prosecuted its patent application twenty years ago.

Manitowoc did not appeal from the portion of the judgment based on the finding of noninfringement, and the '383 patent has expired. The validity and enforceability issues argued by the parties are thus twice mooted. ² As discussed below, FMC cannot prevail unless it can show that the district court erred in determining that it did not carry its burden of proving by clear and convincing evidence, J.P. Stevens & Co. v. Lex Tex, Ltd., 747 F.2d 1553, 1559, 223 USPQ 1089, 1092 (Fed.Cir.1984), cert. denied, 474 U.S. 822, 106 S.Ct. 73, 88 L.Ed.2d 60 (1985), facts requiring a determination that Manitowoc was guilty of inequitable conduct. ³

FMC's brief says "The record suggests that the district court had difficulty understanding both the technical and legal issues before it." A study of the full record, however, indicates that FMC simply failed to carry its burden of persuading the court to adopt the "understanding" FMC sought. ⁴

With no citation of applicable authority, FMC insists that Judge Hart was bound by earlier rulings of other judicial officers in the case relating to its charge of inequitable conduct. ⁵ FMC's initial brief calls those rulings "decisions" and "earlier findings and conclusions." Manitowoc's brief correctly points out that: (1) the rulings were on motions; (2) FMC's motion to have them declared "law of the case" was denied; (3) Judge Hart not only did not "ignore" the earlier rulings, as FMC says he did, but warned that the entire case would be tried de novo; (4) FMC succeeded in discovering documents but failed to carry its burdens of proof in live testimony at trial before an experienced judge; (5) FMC has not shown how the rulings on motions could be said to require another trial; (6) no final judgment having been entered before trial, Judge Hart would not be bound by any earlier rulings of any kind if he had made them himself; and (7) it would have been error to have treated discovery orders as summary judgments. In its reply brief, FMC simply ignores all that. FMC's argument is specious.

FMC attacks no finding as clearly erroneous under Rule 52(a), Fed.R.Civ.P. It demands a new trial because of alleged legal error in claim interpretation, in considering fewer than all the claims, in evaluating the materiality of documents FMC calls "the prior art," in applying variable standards of enablement, in finding the invention not on sale because it was not reduced to practice until after the critical date, and in failing to decide the issue of anticipation. FMC says it "asks for a new trial because there is prejudicial error in virtually every legal conclusion the district court reached," citing W.L. Gore & Associates, Inc. v. Garlock, Inc., 721 F.2d 1540, 1547, 220 USPQ 303, 308 (Fed.Cir.1983) (findings based on error of law may be set aside), cert. denied, 469 U.S. 851, 105 S.Ct. 172, 83 L.Ed.2d 107 (1984). FMC nowhere argues that it was denied full opportunity to try its case, or was impeded in presenting evidence, or was confronted with inadmissible evidence, or that the trial was in any other manner unfair.

Manitowoc says FMC distorts the record and the findings, cites only parts of the evidence, misrepresents other parts of the evidence, assumes facts favorable to FMC, mischaracterizes Judge Hart's findings and conclusions, does not even attempt to show that any error was prejudicial, fails to show that the evidence would justify a contrary result, and has from the beginning made numerous reckless charges (many now dropped and others continued without support in the record).

Having read and re-read the briefs and conducted the record research necessitated by the many issues raised and assertions made, this court is led to the realization that the sound and fury characterizing the briefs relates primarily to issues nondispositive of the appeal. Hence we need not lengthen this opinion with a discussion of those issues. Nor is it necessary that we determine on which if either side the angels reside.

(1) Attorney Fees

FMC does not mention the district court's discretion, but says its request for attorney fees should have been granted because (a) Manitowoc's infringement claim was frivolous; and (b) Manitowoc was guilty of inequitable conduct when it failed to disclose certain documents and information to the Patent and Trademark Office (PTO) during prosecution of the application that resulted in the '383 patent. Neither basis is supported by the record.

(a) Infringement Claim

Nothing in the record would have supported a finding that Manitowoc did not legitimately believe in the merits of its infringement allegation at trial. FMC's motion for partial summary judgment of noninfringement was denied on October 29, 1982, indicating that the issue was appropriate for trial. FMC's assertion that Manitowoc's infringement claim was frivolous is without merit.

(b) Inequitable Conduct

FMC vigorously attacks on what it calls "legal grounds" the district court's determinations that Manitowoc's own documents (Q-1064 proposal and Beduhn speech) were conceptual, incomplete, nonenabling ⁶ and thus not material, and that the claimed invention was not "on sale" before the critical date. Manitowoc cites the record in defense of those determinations. That dispute relates only to materiality and need not here be addressed in detail, for a determination of inequitable conduct requires findings on materiality and intent and the district court here found the intent element totally absent, "even if" the documents were regarded as pertinent prior art. ⁷

There is no evidence of any intent to withhold any information from the Patent Office or to withhold evidence known to be material and controlling, even if the documents are regarded as pertinent prior art. The record does not support a finding of inequitable conduct on the part of the inventor or any Manitowoc representative.

654 F.Supp. at 930, 2 USPQ2d at 1979. (Emphasis added.)

There is no basis for findings of "materiality," "gross negligence," or "intent to deceive" which would support a conclusion of inequitable conduct.

654 F.Supp. at 935, 2 USPQ2d at 1983.

"Inequitable conduct" is not, or should not be, a magic incantation to be asserted against every...