Hewlett-Packard Company v. Tel-Design, Inc.

• Decision Date: 10 July 1972
• Docket Number: No. 25373.,25373.
• Citation: 460 F.2d 625
• Parties: HEWLETT-PACKARD COMPANY, Plaintiff-Appellant, v. TEL-DESIGN, INC., Defendant-Appellee.
• Court: U.S. Court of Appeals — Ninth Circuit

460 F.2d 625 (1972)

HEWLETT-PACKARD COMPANY, Plaintiff-Appellant, v. TEL-DESIGN, INC., Defendant-Appellee.

No. 25373.

United States Court of Appeals. Ninth Circuit.

May 16, 1972.

Rehearing Denied July 10, 1972.

Jean C. Chognard (argued), Albert C. Smith, Roland I. Griffin, Palo Alto, Cal., Benjamin C. Howard, Baltimore, Md., for plaintiff-appellant.

Jack M. Wiseman (argued), Milton D. Rosenberg, of Rosenberg & Wiseman, San Jose, Cal., for defendant-appellee.

Before MADDEN, Judge of the Court of Claims,^* and HAMLEY and TRASK, Circuit Judges.

TRASK, Circuit Judge:

Hewlett-Packard Company appeals from a judgment of the district court holding U. S. Patent No. 3,290,586, claims 1 through 5, valid and infringed by the manufacture and sale of an Open Cable Pair Locator by the appellant.¹ The district court had jurisdiction under 28 U.S.C. § 1338(a), this being an action arising out of the patent laws of the United States. Our jurisdiction is based on 28 U.S.C. § 1291.

U. S. Patent No. 3,290,586 (hereinafter the "Anderson patent"), known as an "open fault locator" was issued to Robert E. Anderson on December 6, 1966, who in turn assigned all rights in the patent to appellee Tel-Design, Inc. The open fault locator device is used by telephone craftsmen to locate breaks in telephone cables. It relies on the physical fact that the capacity of a telephone cable is proportional to its length. Standard telephone cable is manufactured to have a capacity of .083 microfarad per mile within each pair of wires. Thus, if a capacity measurement from a test point shows that a cable pair has a capacity of .083 microfarad, the cable pair ends (that is, the break occurs) one mile from the test point.

The instrument in question measures capacity by means of the charge sharing method. A known voltage is applied to the cable at a selected test point. The amount of charge stored in the cable is proportional to the distance between the test point and the point of cable break. The voltage source is then switched off the cable, leaving it with the known voltage. A capacitor of known capacity is then connected to the cable. Some electrical charge on the cable is shared with the known capacitor. The proportion of sharing between the cable and the known capacitor is determined by the relative capacity of the known capacitor and of the cable. The voltage on the known capacitor is related to the amount of charge initially stored on the cable, which in turn is related to the distance to the break in the cable. This voltage is measured by the instrument. The scale on the instrument is calibrated to read in units of length and gives the distance to the fault directly in feet or miles.

In its findings of fact and conclusions of law and a carefully prepared opinion, the trial court held that claims 1 through 5 of the patent were valid and infringed but that claims 8 through 11 and 15 were not. Hewlett-Packard Company appeals from the decision finding claims 1 through 5 valid. No cross-appeal by Tel-Design, Inc. was taken.

The appellant contends that the Anderson patent claims at issue on this appeal are invalid for obviousness under 35 U.S.C. § 103.² Our examination of this contention must begin with the standard set forth in Graham v. John Deere Co., 383 U.S. 1, 86 S.Ct. 684, 15 L.Ed.2d 545 (1966):

"Under § 103, the scope and content of the prior art are to be determined; differences between the prior art and the claims at issue are to be ascertained; and the level of ordinary skill in the pertinent art resolved. Against this background, the obviousness or nonobviousness of the subject matter is determined." 383 U.S. at 17, 86 S.Ct. at 694.

In the present case, neither party contests the district court's findings as to the scope and content of the prior art. Golding (1940) teaches that the position of a cable break may be found by a capacity test, the capacity of the cable being proportional to its length.³ The prior art also provides several charge sharing methods and indicates that the method can be used for measuring small capacities such as the capacity of telephone cables. Michels (1941) illustrates a method of determining an unknown capacitance by comparing it with a known capacitance and taking voltage readings with an electrometer. Thus, a known capacitor is charged by battery and then connected to the unknown capacitor for sharing of the charge. Voltage readings taken from the known capacitor both before and after sharing with the known capacitor give the values necessary for determining the unknown capacitance by a particular formula.

Karapetoff (1912) and Thompson (1914) describe similar charge sharing methods. Thompson's instruction is as follows:

"Electrometer Method.—Charge the condenser of unknown capacity to a certain potential; then make it share its charge with the condenser of known capacity, and measure the potential to which the charge sinks; then calculate the original capacity, which will bear the same ratio to the joint capacity of the two as the final potential bears to the original potential."

Karapetoff teaches a charge sharing method of measuring capacitance which differs from the Thompson method in that the known capacitor is charged first and then shared with the unknown capacitor.

The final aspect of the prior art found by the district court and uncontested by the parties, is Lamont (1962). His patent points out:

"This invention relates to measuring devices and particularly to a method of, and apparatus for locating faults in multi-conductor cable.

* * * * *

"It is, therefore, an object to this invention to provide a method of, and apparatus for the location of faults in cable which is direct reading, accurate and simple and convenient to use.

"In accordance with the general features of this invention, a voltage is applied to a first conductor in a cable, the magnitude thereof being decimally related to the length of the cable. The voltage from one end of the first conductor to one opposite end of a second conductor in the cable is then measured, the fault being located between the first and second conductors. The voltage reading obtained gives the location to the fault directly in units of length."⁴

Although several types of apparatus were generally employed prior to the introduction of the Anderson patent,⁵ there was no convenient means for locating open faults or breaks. The methods used were either more time consuming or not as accurate as the Anderson patent. Sometimes, faulty cables were replaced by new cables to avoid the need for locating the fault.

The district court concluded that:

"The combined application of the teachings of Golding, Michels, Thompson, Karapetoff, and Lamont in producing the final product of a convenient instrument for locating the distance to a fault in a transmission cable by use of the capacitance charge-sharing technique, is not obvious to persons skilled in the art in view of the prior art." Finding of Fact No. 27.⁶

Appellant urges that this conclusion is erroneous and inadequate under controlling decisions. We agree.

At the outset we must reject appellee's reliance upon the statutory presumption of validity which it contends attaches to the grant of the Anderson patent.⁷ Where the element of patentability being considered is the obviousness of the subject matter when weighed against the prior art, the presumption dissipates in the face of a showing that the prior art was not brought to the attention of the examiners. Here four of the five references to prior art relied upon by the district court in its discussion of obviousness were not before the Patent Office.⁸ We have previously held that this presumption of validity arising from the issuance of the patent by the Patent Office is insufficient in the face of pertinent prior art not before the patent examiners. Westinghouse Electric Corp. v. Titanium Metals Corp. of America, 454 F.2d 515 (9th Cir. 1971); Exer-Genie, Inc. v. McDonald, 453 F.2d 132 (9th Cir. 1971); Pressteel Co. v. Halo Lighting Products, Inc., 314 F.2d 695, 697 (9th Cir. 1963). Although the district court did not find that the prior art references which it relied upon were more pertinent than those considered by the Patent Office, Neff Instrument Corp. v. Cohu Electronics, Inc., 298 F.2d 82 (9th Cir. 1961), it is clear that the district court's conclusions on the question of obviousness were based on the prior art references outlined above.

This is apparent from the express finding that it was "the combined application of the teachings of Golding, Michels, Thompson, Karapetoff, and Lamont which produced the final product." However, the court in its opinion stated that it could not determine from the file exactly what the Patent Examiner based his allowance on because the file did not clearly support or oppose the trial court's conclusion that the combined application was "not obvious." The trial court concluded that for this reason it had treated the issue of obviousness "on a de novo basis." Under these circumstances it is manifest that no support may be gained by appellee from the statutory presumptions resulting from the determination of the Patent Office.

Having found that the patent in question was a combination patent we look to the decisions of the Supreme Court and of this court to determine the criteria for determining patentability.

Until the Act of 1952 these criteria were novelty and utility. In 1952 Congress added Section 103 which required nonobviousiness. See note 2 supra. It is with this requirement that we are concerned. Furthermore, when the patent sought is one which combines the teachings of the prior art, special strictness must be applied to be certain that the new claims satisfy all of the requisites of patentability, and particularly Section 103. Jeddeloh Brothers Tweed Mills, Inc. v. Coe Manufacturing Co., 375 F.2d 85, 89 (9th Cir.), cert. denied, 389 U.S. 823, 88 S.Ct. 57, 19 L.Ed.2d 76 (1967). Old elements which...