Griswold v. Oil Capital Valve Co.

• Decision Date: 22 May 1967
• Docket Number: No. 8194.,8194.
• Citation: 375 F.2d 532
• Parties: Donald G. GRISWOLD and Cla-Val Co., Inc., Appellants, v. OIL CAPITAL VALVE CO., Aeroparts Manufacturing Co., Robert E. Radford, and Dorothy Joyce Radford, as an individual and as Trustee for Joseph Britton Radford, Janice Joyce, Radford, Robert E. Radford, Jr., Appellees.
• Court: U.S. Court of Appeals — Tenth Circuit

375 F.2d 532 (1966)

Donald G. GRISWOLD and Cla-Val Co., Inc., Appellants, v. OIL CAPITAL VALVE CO., Aeroparts Manufacturing Co., Robert E. Radford, and Dorothy Joyce Radford, as an individual and as Trustee for Joseph Britton Radford, Janice Joyce, Radford, Robert E. Radford, Jr., Appellees.

No. 8194.

United States Court of Appeals Tenth Circuit.

December 19, 1966.

Rehearing Denied May 22, 1967.

Harry W. F. Glemser, of Bacon & Thomas, Washington, D. C. (John R. Richards, of Houston, Klein & Davidson, Tulsa, Okl., of counsel, with him on the brief), for appellants.

William S. Dorman, Tulsa, Okl. (James G. Davidson, Tulsa, Okl., with him on the brief), for appellees.

Before HILL, SETH and HICKEY, Circuit Judges.

SETH, Circuit Judge.

This appeal involves the validity of two patents. The appellants, plaintiffs below, brought an action for infringement of two patents against the appellees. The appellees, defendants below, then sought a declaratory judgment that appellants' patents were invalid and not infringed, and sought damages from the appellants for unfair competition and violation of the federal antitrust statutes.

The trial court found the patents invalid, and also concluded that appellants' use of the invalid patents constituted unfair competition and a violation of the antitrust statutes on appellees' counterclaim. The District Court retained jurisdiction of the action, pending this appeal, to determine the appellees' damages on the counterclaim.

The first patent to be considered is Griswold No. 2,609,099 (hereinafter "099"). Patent 099 is a device for separating two immiscible liquids, and the primary commercial use of patent 099 is the separation of water from gasoline it has contaminated. Patent 099 is a "combination" patent, and its components include a separator casing and three valves. Water separated from the fuel in the separator casing is collected in a chamber within the casing. A float is positioned to ride on the interface between the water and fuel. As the water level varies within the chamber, the movement of the float controls a pilot valve. The pilot valve in turn controls by hydraulic means a fuel discharge valve and a water drain valve. It is the purpose of the patented 099 system to provide a continuous flow of "clean" fuel through the separator, as would be required for fueling aircraft. The float-controlled pilot valve of patent 099 is thus designed to hold the fuel discharge valve open continuously, except when the separator's capacity is overwhelmed by an influx of water. The pilot valve is also designed to hold the water drain valve open continuously, except when the level of water in the collection chamber is very low. Thus the pilot valve, depending on the movement of the float in the collection chamber, permits both the fuel discharge valve and the water drain valve to be open at the same time, or closes one or the other, as described above.

The second patent in question is Griswold No. 2,888,032 (hereinafter "032"). Patent 032 is a rate-of-flow control device and it can be used in conjunction with the 099 fuel-water separation system to regulate the flow of "clean" fuel from the separator. Patent 032 is also a "combination" patent and its components include a main valve, a bypass pilot valve, a needle valve, and an orifice plate. The orifice place is located upstream of the main valve. Fuel passing through the orifice plate creates a pressure differential, which in turn actuates the bypass pilot valve. The pilot valve, by hydraulic means, controls operation of the main valve. It is the purpose of the patented 032 system to provide a uniform rate of flow for "clean" fuel passing through the main valve from the separator.

The application for patent 099 was filed December 9, 1944, and the patent was issued September 2, 1952. The application for patent 032 was filed October 27, 1952, and the patent was issued May 26, 1959.

Since late 1944 the appellants, or their predecessors, have manufactured the valve components of the 099 fuel-water separator. However, appellants did not manufacture the separator casing which is a component of the patented 099 system; the casing was manufactured by the Warner Lewis Company. The appellants supplied the valve components to Warner Lewis Company which attached the appellants' valves to Warner Lewis separator casings and sold the complete separator to Warner Lewis customers. Some time after October 1952 the appellants were also able to provide a rate-of-flow control device, when necessary, for use with their 099 valves on Warner Lewis separators. The rate-of-flow control device was that system covered by patent 032.

It appears that some time in 1960 the appellees offered to supply, and did supply, Warner Lewis Company with valve components for a fuel-water separator and a rate-of-flow control device. The appellees' valve components and rate-of-flow control device perform the same functions as the appellants' patented valve components and flow control device; the appellees' valves and control device are generally quite similar to those manufactured by the appellants under the 099 and 032 patents. The appellants and appellees were thus competing for the customers of the Warner Lewis Company, which sold the complete fuel-water separator.

Appellants learned that an important contract was to be let for Warner Lewis separators equipped with valves manufactured by appellees. The appellants directed letters to various parties advising that the appellees' valves infringed the appellants' 099 patent, and warned these parties of possible legal action. Thereafter the appellants filed suit, claiming infringement of their 099 and 032 patents. The appellants then sent letters to "the trade" telling of the pending litigation.

The Griswold Patent No. 2,609,099:

There is no doubt that the appellants' 099 patent has been a successful commercial device; apparently more than half of the water-fuel separators in use in this country are equipped with the appellants' valves. The valve system in question was first perfected by the appellants in early 1944, in response to requests by the Navy and the Army Air Corps. Presumably the need for a separation device like 099 was coincident with the increased military air activity. The record shows that in early 1944 the military conducted a series of tests with various types of separators and various "name brand" control valves, among which was a Warner Lewis separator equipped with a two-way Clayton pilot valve attached only to a fuel discharge valve. The Clayton valve used was a model 126 valve which appellants had manufactured since 1935. Other valves by other manufacturers tested at the same time were found not as satisfactory as the Clayton arrangement on the Warner Lewis separator. The appellants witnessed this test and were requested by the military to work out a design for the float-controlled pilot valve inside the separator casing and to provide a pilot valve that would also control a water drain valve as well as the fuel discharge valve. The report drawn up after these various tests indicates that the Clayton two-way pilot valve connected to a fuel discharge valve had the greatest possibility for providing what the military needed. The report also indicates that the other valves tested were less satisfactory. The report relates that by a "simple modification of its seat and disc" the Clayton 126 valve may be modified to control the water drain valve. Appellants returned to California and within at the most several weeks designed the pilot valve that is one element of the 099 patent, which connected and controlled both a fuel discharge valve and a water drain valve. An appendix to the report indicates that appellants' new system was tested on March 10, 1944, and was found satisfactory. The record also shows that appellants had manufactured water drain valves, fuel discharge valves, and pilot valves for some time, but that in early 1944 was the first time a system combining a float-controlled three-way pilot valve controlling both a water drain valve and a fuel discharge valve had been constructed by the appellants. This combination became patent 099.

The trial court found that 099 was not valid because it had been anticipated by two uncited patents known as the Thompson and the Walker patents which will be described in some detail hereinafter. Claim 2 of 099 is the broadest claim and the trial court compared it with the Thompson and Walker patents. Thus, with respect to Claim 2 of 099, and Claim 1 also, the trial court has found that these claims lack the fundamental criterion of patentability — "novelty" or "newness."

After disposing of 099's broadest claim (No. 2), the court in finding No. 11 goes on to find that the Thompson patent meets every substantial limitation of the remaining claims of 099 which are at issue. Also the trial court in findings Nos. 8 through 13 found that the uncited Thompson and Walker patents had "exhausted" the combination claimed by Griswold in patent 099. Although the court does not explain what an "exhausted combination" is, it appears that finding No. 8, which reads the broadest claim of the 099 patent against the disclosures of the Thompson patent, is meant to show that the 099 patent was fully anticipated by Thompson, and also fully anticipated by Walker as shown in finding No. 9.

The other findings of the trial court also demonstrate that the other claims of 099 did not reveal anything new or novel. Thus, the first eleven of the twelve claims of 099 were found to be anticipated by the Walker and Thompson patents. The trial court in its more general findings also refers to other patents antedating 099. Thus, as to the separation of two immiscible liquids the court refers to Pink, Samiran '543, Ryan et al, Samiran '757, Lewis, Spangler, and another Thompson patent. On the matter of valves or a valve operated by a float the court mentions the same group of patents;...