Huron Mach. Products, Inc. v. A. and E. Warbern, Inc.

Decision Date08 April 1980
Docket NumberNo. 78-1063,78-1063
Citation615 F.2d 222
PartiesHURON MACHINE PRODUCTS, INC., Plaintiff-Appellant, v. A. AND E. WARBERN, INC., formerly known as Warbern Packaging Industries, Inc. and Warbern Packaging Industries, Inc. of Florida, Inc., Defendants-Appellees.
CourtU.S. Court of Appeals — Fifth Circuit

Barry L. Haley, Fort Lauderdale, Fla., for plaintiff-appellant.

Blum, Moscovitz, Friedman & Kaplan, James K. Silberman, New York City, for defendants-appellees.

Appeal from the United States District Court for the Southern District of Florida.

Before TUTTLE, BROWN and TATE, Circuit Judges.

TUTTLE, Circuit Judge:

We have here for consideration the validity of a patent which has expired during the course of this litigation. If valid, we then review the district court's finding of infringement.

The patent, No. 3,047,196 (Phillips and Levine), was issued on July 31, 1962. It expired on July 31, 1979. It covers a molded plastic clothes hanger. This hanger is inexpensive, selling for five cents at time of trial, yet it is designed to grip articles of clothing, generally skirts, firmly enough to be affixed at the factory to be left in place for shipping, to be used by the retailer, and to be passed on to the ultimate customer. The gripping mechanism consists of three plastic fingers at each end of the plastic holder (all cast in a single mold). These fingers are so formed and positioned that the line formed by the top of the garment is in a plane with the holder. The two outer fingers of each set of three are straight, but the middle finger is formed so that a part of it projects across the plane. Thus, a garment pulled up between the two outer and the inner finger tends to be held by friction. This tendency is greatly increased by the shape of the fingers. Each of them has a shoulder molded in at the lower end, so that a garment will naturally rest upon these shoulders, which, however, are sufficiently rounded so that the garment can be pulled off without effort. These shoulders are called "spoon shaped ends" in the patent.

The challenged (Huron) hanger is identical with the patented (Warbern) hanger with two exceptions: (1) the two outer fingers in the former are joined by a plastic loop which passes under, but is not connected with, the middle finger. In both structures, the middle finger is shorter than the two outer fingers. (2) The suit patent is constructed so that the outer fingers are placed on the opposite side from the middle finger, leaving the garment to hang in a plane with the hanger holder or web. The two fingers of the accused hanger are extended in the axial plane of the web, leaving the third finger to one side of the plane. The trial court found that this structure would cause the garment to hang slightly crooked, but would not otherwise have any significance.

The accused hanger was designed and made by the appellant, Huron, after acquiring a copy of the Phillips-Levine patent. Upon receiving notice that the owners of the patent, Warbern, claimed infringement, Huron filed a complaint for a declaratory judgment that the patent was invalid and not infringed. Warbern denied the material allegations of the complaint and counterclaimed for patent infringement, seeking an injunction and an accounting for damages.

The trial court made numerous findings of fact, many of which are not protected by the clearly erroneous standard of review, because they involve analysis and interpretation of the suit patent and other patents noted by the examiner and some not taken into consideration by him. However, there are some findings of fact that must stand, absent our determination that they were clearly erroneous. Among these, not even challenged by appellant, are the following:

(8) Huron and Warbern deal in, among other things, plastic garment hangers known in the trade as ship-on hangers. A ship-on hanger is one which is purchased by a garment manufacturer who hangs his garment on the hanger and ships it to his customer, usually the retail store, on the hanger. The retailer displays the garment for sale by hanging it from a display rack on the same hanger. When the garment is purchased by the consumer, it is usually delivered with the hanger still on it. From the time the hanger is applied by the garment manufacturer it is not removed until a consumer wants to try-on or wear the garment. Ship-on hangers are generally inexpensive. They may be reused by the consumer but are not designed or constructed to have an indefinite life.

(13) In the late 1950's and early 1960's the garment hanger industry was selling molded plastic garment hangers. The plastic hangers were functionally the same as the wooden and wire hangers which they replaced. Plastic ship-on hangers were used on a small scale for skirts, blouses and dresses.

(14) Garments with waistbands and no shoulders such as skirts, slacks, shorts, bathing trunks and like goods were not shipped on ship-on hangers at that time. Such garments were either folded and packed for shipment or were pinned onto wire hangers like those used today by dry cleaners or were pinned onto cardboard hangers and shipped to the retailers hung on the wire or cardboard hangers.

(15) The wire and cardboard hangers were neither suitable nor attractive for use by retailers to display their goods and it was necessary for each garment to be either unpacked or unpinned from the hanger and put on a permanent type hanger known as a store fixture hanger. These hangers were intended for reuse by the retailer and the wire or cardboard hangers were discarded.

(16) Substantial labor was required at the retail level to remove garments from temporary hangers and mount them on store fixture hangers and this also delayed the garments in their travel from receiving to the sales floor.

(17) The wire and cardboard hangers cost the garment manufacturers in the neighborhood of one cent each while the store fixture hangers cost the retailer ten cents and sometimes substantially more.

(24) The growth in sales of the patented hanger was remarkable. In the years 1962 and 1963 Warbern had only one style of patented hanger and sold about 300,000 units in each year. By 1964, the number of units sold of the single style had jumped to over one million. In 1965, a second style was added and close to three million units were sold.

(25) The patented hanger became a staple in the industry and continues to enjoy such status, over 15 years after it was first introduced. Substantially every brand name garment manufacturer uses the patented hanger manufactured by Warbern or a licensee of Warbern when it ships skirts, slacks, shorts and like goods on a hanger.

(26) Warbern now has about 10 styles of patented hangers in its line and in 1976 Warbern sold about 30 million units of the patented hanger. While records for several years are incomplete, since 1962 Warbern has sold over 250 million patented hangers.

(27) The success of the patented hanger was so unprecedented that copies abounded. Warbern took vigorous steps to prevent violation of its patent. In five actions in different jurisdictions judgments were entered by consent holding the patent valid and infringed. In one case, a cross license agreement was entered into. In another case an infringer paid a substantial sum for a paid up license. In two cases, the costly molds used for producing the infringing hangers were delivered to Warbern. In all other instances, including infringements that were resolved without resort to litigation, the infringements were discontinued.

The trial court carefully analyzed the state of the art by reference to patents cited to the examiner and to seven others not noted by him. The court found the patent was not obvious, that it was valid and infringed. The parties are not in disagreement over the principle that ordinarily a strong presumption of validity aids the patentee when his patent is attacked, or that this presumption is greatly weakened if prior art, more similar to the patent, was not submitted to the patent examiner. Cathodic Protections Service v. American Smelting and...

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