Joslyn Corp. v. RTE Corp.

• Citation: 684 F. Supp. 967
• Decision Date: 16 March 1988
• Docket Number: No. 86 C 2319.,86 C 2319.
• Parties: JOSLYN CORPORATION, Plaintiff, v. RTE CORPORATION, Defendant.
• Court: U.S. District Court — Northern District of Illinois

684 F. Supp. 967

JOSLYN CORPORATION, Plaintiff, v. RTE CORPORATION, Defendant.

No. 86 C 2319.

United States District Court, N.D. Illinois, E.D.

March 16, 1988.

Walter E. Wyss, Timothy J. Vezeau, John S. Paniaguas, Mason, Kolehmainen, Rathburn & Wyss, Chicago, Ill., for plaintiff.

J. William Hayton, Larry L. Thompson, Bell, Boyd & Lloyd, Chicago, Ill., for defendant.

MEMORANDUM OPINION AND ORDER

ASPEN, District Judge:

Plaintiff Joslyn Corporation brings this action charging RTE Corporation with infringement of its patent No. 4,161,012 ("'012 Patent") on the Cunningham Device, a surge arrester which protects electrical equipment from sudden electrical surges. RTE now moves for summary judgment which, for the reasons stated herein, we deny.

I

On July 10, 1979, the United States Patent Office issued Francis Cunningham and, as assignee, Joslyn the '012 Patent for the Cunningham Device. At its simplest, the Cunningham Device consists of a series of cylindrical metal blocks called valve blocks inside a rubbery housing of dielectric material. Throughout the patent prosecution, Cunningham asserted that the prior art did not teach the elimination of the gap between the valve blocks and the housing in surge arresters of similar construction. The patent examiner ultimately granted Cunningham's gap elimination claim as Claim 46:

46. A method of manufacturing a surge arrester for providing overvoltage surge protection to a component of a high voltage electrical power circuit comprising the steps of

forming a valve element having an outer surface and including a plurality of valve blocks and

subsequently enclosing said valve element within an arrester housing formed from a dielectric material and having conductive material encircling at least a portion of said dielectric material, said enclosing step comprising the step of excluding substantially all of the air from said outer surface of said valve element.

'012 Patent, col. 21, lines 52-64. In February of 1986, six and one-half years after the '012 Patent issued, Joslyn disclaimed Claim 46 as too broad or invalid.

Claims 47 and 48 of the '012 Patent identified two different methods of placing the housing about the valve blocks:

47. A method of manufacturing a surge arrester ... comprising the steps of dilating said arrester housing by disposing said valve element therein.

48. A method of manufacturing as defined in claim 46 wherein said excluding step comprises the step of molding said dielectric material about said outer surface of said valve element.

Id., col. 21, lines 65-68, col. 22, lines 1-15.

In this action, Joslyn charges that RTE's surge arrester infringes the '012 Patent. In its motion for summary judgment, RTE contends that the '012 Patent is (1) unenforceable because Cunningham intentionally failed to disclose during the patent prosecution prior art that taught gap elimination and (2) invalid for obviousness. We find that Joslyn has created genuine issues of material fact as to each of RTE's challenges to the '012 Patent, and we accordingly deny the motion for summary judgment.

II

Summary judgment is appropriate when the moving party demonstrates that no genuine issue of material fact exists and that it is accordingly entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c). The moving party bears the burden of establishing the absence of a triable fact issue. Celotex Corp. v. Catrett, 477 U.S. 317, 106 S.Ct. 2548, 2553, 91 L.Ed.2d 265 (1986). Once the movant has set forth facts sufficient to support judgment in its favor, the opposing party must present some evidence that creates a genuine issue of material fact or show clearly that the moving party is not entitled to judgment on the undisputed facts. In using the former approach, the party opposing the motion "must point to an evidentiary conflict created on the record at least by a counter statement of a fact or facts set forth in detail in an affidavit by a knowledgeable affiant. Mere denials or conclusory statements are insufficient." Barmag Barmer Maschinenfabrik AG v. Murata Machinery, Ltd., 731 F.2d 831, 835-36 (Fed.Cir. 1984).

A. Inequitable Conduct

To establish that inequitable conduct by Cunningham, the patent applicant, renders the patent unenforceable, RTE must show by clear and convincing undisputed evidence that Cunningham failed to disclose material information to the patent examiner with the intent to mislead the examiner and thereby obtain the patent. J.P. Stevens & Co., Inc. v. Lex Tex, Ltd., 747 F.2d 1553, 1559 (Fed.Cir.1984), cert. denied, 474 U.S. 822, 106 S.Ct. 73, 88 L.Ed. 2d 60 (1985). The Federal Circuit analyzes inequitable conduct claims by determining (1) whether the undisclosed information is material, (2) whether the patent applicant intended to mislead the examiner and (3) upon balancing these two findings, "whether the scales tilt to a conclusion that inequitable conduct occurred." Id. at 1560; American Hoist & Derrick Co. v. Sowa & Sons, Inc., 725 F.2d 1350, 1364 (Fed.Cir.), cert. denied, 469 U.S. 821, 105 S.Ct. 95, 83 L.Ed.2d 41 (1984); N.V. Akzo v. E.I. DuPont de Nemours & Co., 810 F.2d 1148, 1153 (Fed.Cir.1987). We find that in its response and statement of disputed facts, Joslyn has created a genuine issue as to the second factual determination, whether Cunningham intended to mislead the patent examiner and accordingly deny summary judgment as to inequitable conduct without assessing the materiality of the undisclosed information.

Establishing a patent applicant's intent to deceive raises factual issues that are rarely undisputed. Albert v. Kevex Corp., 729 F.2d 757, 763 (Fed.Cir.1984). Summary judgment as to inequitable conduct is nevertheless appropriate when the moving party presents clear and convincing undisputed evidence that the patent applicant knew or should have known that a prior art reference was material. A.B. Dick Co. v. Burroughs Corp., 798 F.2d 1392, 1398 (Fed.Cir.1986); Aqua-Aerobic Systems, Inc. v. Richards of Rockford, Inc., 1 USPQ2d 1945, 1958 (N.D.Ill.1986), aff'd in part, 835 F.2d 871 (Fed.Cir.1987). A patent applicant's good faith belief that material prior art is immaterial to assertions made during the patent prosecution must be a reasonable belief to overcome an inequitable conduct claim. Argus Chemical Corp. v. Fibre Glass-Evercoat Co., 759 F.2d 10 (Fed.Cir.), cert. denied, 474 U.S. 903, 106 S.Ct. 231, 88 L.Ed.2d 230 (1985). Joslyn has identified evidence in the record that creates a genuine factual issue of the reasonableness of Cunningham's good faith belief that certain prior art was immaterial.

RTE contends that during the patent prosecution, Cunningham failed to disclose prior art tending to disprove his assertion that the prior art did not teach gap elimination. RTE identifies numerous instances throughout the patent prosecution in which Cunningham insisted that the prior art did not teach the elimination of the separation between the valve blocks and the rubbery housing. At the outset, we observe that in each instance, however, Cunningham was careful to qualify his assertion to apply only to surge arresters with the valve block structure. For example, in the Remarks section to an April 5, 1978 Amendment filed with the Patent and Trademark Office ("PTO"), Cunningham stated:

As disclosed in this application, a prior art surge arrester using an arrester element including one or more valve blocks formed from negative resistance material typically included a separation between the internal surface of the surge arrester insulating housing and the outer surface of the arrester element, i.e., the outer surfaces of the valve blocks ...

It is known that voltage stress is present across the separation referred to which may result in corona and in subsequent damage or destruction to the surge arrester. Prior art devices traditionally attempted to alleviate this voltage stress across the separation by surrounding the separation with an equipotential field..... Applicant has adopted a novel and radically different solution to this problem ... Applicant eliminates the separation between the arrester element and the internal surface of the arrester housing by forming an atmosphere excluding contact between the arrester element, i.e., the valve blocks and/or a gap element, and the internal surface of the arrester housing to thereby preclude the occurrence of corona at that interface. (Emphasis added).

In a November 21, 1978 Supplemental Amendment, Cunningham summarized a meeting with the patent examiner:

During the interview, several exhibits and/or models were shown to the Examiner generally for the purpose of demonstrating the separations typically present in prior art surge arresters between the inner surfaces of porcelain arrester housings and the outer surfaces of arrester elements, that is, the outer surfaces of valve blocks formed from negative resistance materials. (Emphasis added).

RTE next identifies eight surge arresters that Cunningham knew were in the prior art and knew or should have known were material to his assertion that the prior art did not teach gap elimination. Joslyn does not dispute that these surge arresters did indeed teach the exclusion of air from the gap or the filling of the gap with various substances. However, Joslyn does dispute the fact that all material characteristics of those surge arresters and the Cunningham Device are sufficiently similar to warrant the finding that Cunningham should have known that those references were material to his gap elimination claim. By providing evidence to support this position, Joslyn has satisfied its burden as the party opposing summary judgment.

Among the eight prior art surge arrester references that RTE identifies¹ are the '135, '577, '566 and '718 patents. As Cunningham points out in his affidavit, these...