Hansen v. Safeway Stores, 14216.

• Decision Date: 24 October 1956
• Docket Number: No. 14216.,14216.
• Citation: Hansen v. Safeway Stores, 238 F.2d 336 (9th Cir. 1956)
• Parties: Alden HANSEN, Appellant, v. SAFEWAY STORES, Incorporated, a corporation, Appellee.
• Court: U.S. Court of Appeals — Ninth Circuit

238 F.2d 336 (1956)

Alden HANSEN, Appellant, v.SAFEWAY STORES, Incorporated, a corporation, Appellee.

No. 14216.

United States Court of Appeals Ninth Circuit.

June 27, 1956.

Rehearing Denied October 24, 1956.

Joseph L. Bortin, San Francisco, Cal., for appellant.

Paul D. Flehr, John F. Swain, George H. Johnston, San Francisco, Cal., for appellee.

Before POPE and FEE, Circuit Judges, and JAMES M. CARTER, District Judge.

JAMES ALGER FEE, Circuit Judge.

This is an action for damages for patent infringement.It was tried in the District Court with a jury.After the jury failed to agree, the trial judge granted a motion for directed verdict.Judgment for defendant was entered on the ground of invalidity of the patent which founded the claim.

The evidence at trial showed that Alden Hansen was employed by defendantSafeway Stores, Incorporated, for the more part in the inventory control and billing department, which received integrated statistical information from the individual stores to the number of approximately two hundred in the San Francisco zone area.He worked out a business record device, which forms the basis for his application for letters patent.The patent office in the first instance found that the device was not patentable.However, the United States Court of Customs and Patent Appeals reversed.In re Hansen, 154 F.2d 684, 33 C.C.P.A., Patents, 979.Upon this basis, letters patent issued as above noted.Before the issuance of the letters patent, Safeway accepted the device on a trial basis in the San Francisco zone office during June, 1942, and thereafter the use of similar forms was made according to stipulation in the following zone areas between the following dates:

  San Francisco           June,  1942, to
                                            March,  1947
                  Fresno, California      May,  1943,  to
                                            June, 1949
                  Butte, Montana          October,  1943
                                            to September
                                            1949
                  Dallas, Texas           January,  1945
                                            to     March
                                            1950
                  El Paso, Texas          January,  1942
                                            to June, 1949
                  Oklahoma City           January,  1943,
                                            to   January,
                                            1949
                  Phoenix, Arizona        July,  1943, to
                                            December,
                                            1949  

  Salt Lake City, Utah    Unknown    date
                                            in  1942  and
                                            still  in use
                                            December  17,
                                            1952
                  Omaha, Nebraska         September 1942,
                                            to  December,
                                            1948
                  Spokane, Washington     June,  1943, to
                                            December,
                                            1948
                  Seattle, Washington     October,  1941,
                                            to  December,
                                            1946
                  Tulsa, Oklahoma         September,
                                            1942, to December,
                                            1948
                  New York                July, 1942,  to
                                            December,
                                            1950
                

It must be noted that there is a hotly disputed issue as to whether these forms were identical with those described in the letters patent.

There was a pre-trial conference at which it was agreed that the issues to be tried were as follows:

"The parties hereto having, by their counsel, appeared before the Court on a pre-trial conference on Thursday, the 24th day of September, 1953, it is hereby ordered:

"1.That the only issues to be tried in this matter are whether the claims of the Hansen patent in suit are valid or invalid and whether the business records of the defendant infringe or do not infringe a valid claim, if any, of said patent.

"2.That in the event the claims of the patent in suit are found to be valid and infringed by the defendant, the plaintiff shall not be entitled to recover damages for infringement prior to June 18, 1946, the day upon which the Hansen patent was granted.

"3.That the plaintiff has made an election of remedies and is barred thereby from seeking recovery for either a breach of contract or for breach of confidential disclosure or relationship between the parties and therefore is not entitled to recover any damages arising from any alleged breach of contract or alleged breach of confidential disclosure or relationship."

It is to be noted that the trial ranged over a tremendous field and that innumerable issues not foreshadowed by the pre-trial order were debated before the jury and the court.

When we read the record, the distinct impression is borne in upon us that the trial of various collateral issues got the jury into difficulty.The question of whether Hansen was entitled to some compensation from Safeway by estoppel or some other means and the question of whether Safeway had a technical shop right to use the patent should have been disregarded under this order.But these and a great many extraneous issues were tried.This was a basic error.But neither party is here complaining of this deviation.However, this Court is convinced that, if the extraneous issues had not been injected and fiercely fought, there might have been a verdict which could have been supported.As it was, the jury were apparently confused as to what were the decisive issues and, since they failed to agree, were forthwith discharged.

At the close of the evidence, defendant had made a motion for directed verdict on the following grounds: (1) That the Hansen patent was invalid, since the claims of the patent do not define invention over the prior art; (2) that the device does not reveal the flash of creative genius; (3) that the business records used by defendant do not infringe the claims of the patent because they were a natural development of the prior art; (4) that defendant's business records are substantially the same as the prior art; (5) that the business records of defendant are substantially identical with those used by Pontiac Motor Car Company more than a year prior to December 14, 1942; (6) that the business records do not infringe because equivalent to those shown by Groby, Graham, Bach, Iseri and Wilford, all of which are patents prior to plaintiff's; (7) that defendant, with the knowledge and consent of plaintiff, constructed and used business forms prior to the application by plaintiff for his patent and therefore defendant has a right to use its business forms without liability to plaintiff; (8) that defendant had a shop right to use the invention.This motion was at the time held in abeyance.After the jury had disagreed and had been discharged, the trial court heard arguments as to whether the motion for directed verdict should have been granted and whether judgment should be entered for defendant.In its order, the trial court came back to the basic issue set up by the pretrial order.

In the memorandum for judgment, it is said the basis of the ruling is that "plaintiff's patent is invalid for lack of novelty, lack of invention or lack of both novelty and...