Leinoff v. Louis Milona & Sons, Inc.

• Decision Date: 24 January 1984
• Docket Number: No. 83-814,83-814
• Citation: 220 USPQ 845,726 F.2d 734
• Parties: David LEINOFF, Appellee, v. LOUIS MILONA & SONS, INC., Appellant. Appeal
• Court: U.S. Court of Appeals — Federal Circuit

Page 734

726 F.2d 734

220 U.S.P.Q. 845

David LEINOFF, Appellee, v. LOUIS MILONA & SONS, INC., Appellant.

Appeal No. 83-814.

United States Court of Appeals,

Federal Circuit.

Jan. 24, 1984.

Michael J. Sweedler, New York City, argued, for appellant. With him on brief, was Terry J. Ilardi, New York City.

Pasquale A. Razzano, New York City, argued, for appellee.

Before KASHIWA, Circuit Judge, NICHOLS, ^* Senior Circuit Judge, and NIES, Circuit Judge.

NICHOLS, Senior Circuit Judge.

This appeal is from a final judgment of the United States District Court for the Southern District of New York, holding United States Patent No. 3,760,424 valid, 556 F.Supp. 273, 219 USPQ 1186 (S.D.N.Y.1982), and infringed and awarding treble damages, 556 F.Supp. 280 (S.D.N.Y.1983). We affirm in part, reverse in part, vacate in part, and remand.

Background

David Leinoff ("Leinoff"), the plaintiff-appellee, is the sole owner of a fur manufacturing and selling company, David Leinoff, Inc. He brings this action in his capacity as the owner of the patent in suit, U.S. Patent No. 3,760,424 ("the Leinoff patent," "the '424 patent") issued September 25, 1973. Leinoff is also the named inventor of the '424 patent, which is directed toward a composite fur pelt and the method for making the same. Louis Milona and Sons, Inc. ("Milona"), the defendant-appellant, is a New York corporation which manufactures and sells fur coats. Leinoff and Milona compete in the wholesale and retail fur coat business.

The invention relates to producing unique design effects in fur coats. An object is to create an "attractive stripe effect" in such coats, and to broaden the range of use of long-haired furs. One step of the patented method involves a technique commonly known to fur manufacturers as "leathering." Leathering involves inserting leather strips of a specified width in relation to the hairs of an animal pelt between cut strips of the animal pelt laid in a position unchanged from their ordinary relative positions in the uncut pelt. The use of this composite method causes a fur to look much longer and flatter than a fur in its natural state. Long-haired pelts, such as badger, were not ordinarily used in the manufacture of coats prior to leathering because they were considered relatively bulky.

Certain long-haired fur pelts are characteristically comprised of hairs which are light colored at the base, or "underground," and darker at the tip portion. (Some pelts, such as badger, may also have small portions of white at the extreme ends of the dark tip portions.) The underground portion is somewhat "wooly" in nature and is not generally visible in pelts in their natural state. Leinoff connects the fur strips and leather connector strips in such a way as to overlap the dark tips of the pelt hair and the lighter portion of the underground. In exposing the underground, Leinoff creates his composite pelt with a striped effect.

Leinoff wrote to Milona on January 8, 1974, informing Milona of the existence of the '424 patent and offering it a license. Milona ignored the letter and continued to manufacture coats using the allegedly infringing method. Leinoff did not approach Milona again about the '424 patent until December 9, 1980. In the intervening Leinoff filed the present action on February 25, 1981. The issues of validity and infringement were bifurcated for trial. The court held the patent valid and infringed and awarded treble damages.

                years, Leinoff instituted litigation in which the '424 patent was held valid.    Leinoff v. Valerie Furs, Ltd., 501 F.Supp. 720, 210 USPQ 835 (S.D.N.Y.1980)
                

Opinion

A. Validity

The trial court recognized that since a statutory presumption of patent validity exists, 35 U.S.C. Sec. 282, Milona bore the burden of establishing the patent's invalidity. To meet this burden, the court required that Milona establish not that it presented art materially different from that which the patent examiner cited when reviewing the patent application, but rather, that it presented art more pertinent than that which the court (in this case, the same judge) considered in Valerie Furs. The court found the new prior art which Milona introduced not materially different from art it had considered earlier and therefore insufficiently persuasive to rebut the presumption of validity. We have considered all prior art presented in either case, though Valerie Furs is not directly before us for appellate review.

Milona argues now that the court erred in applying any statutory presumption of validity to the '424 patent. Milona contends, it appears, that whenever the prior art that the alleged infringer introduces is more pertinent than that considered by the United States Patent and Trademark Office ("PTO"), the trial court should perform a de novo review of the facts underlying the question of obviousness, free of the presumption. Contrary to this contention, however, the introduction of prior art more pertinent than that which the examiner considers does not weaken or destroy the statutory presumption of validity. Stratoflex, Inc. v. Aeroquip Corp., 713 F.2d 1530, 1534, 218 USPQ 871, 875-76 (Fed.Cir.1983). Rather, where new pertinent art is introduced, the patent owner can, and often should, make a countervailing argument in support of validity; the more persuasive the opposer's prior art, the more convincing any rebuttal argument ought to be. See, e.g., American Hoist & Derrick Co. v. Sowa & Sons, Inc., 725 F.2d 1350 (Fed.Cir.1984). Regardless of the prior art Milona introduced in evidence at trial, therefore, the presumption of validity remains intact.

1. Section 102 defense

Milona argues that the '424 patent is invalid for lack of novelty under 35 U.S.C. Sec. 102. The district court found, however, that none of the eight prior art publications upon which Milona relied disclose all of the elements of the Leinoff claims in the identical fashion. In reaching this finding, the court followed the rule that "[t]o anticipate a claim, a prior art reference must show each and every element claimed." General Electric v. United States, 572 F.2d 745, 768, 215 Ct.Cl. 636, 198 USPQ 65, 85 (1978); In re Royka, 490 F.2d 981, 984, 180 USPQ 580, 583 (CCPA 1974).

Milona focuses on two references in its argument new to us. The German-language textbook, H. Schirmer, Die Technik Der Kuerschnerei (1928), states that "Japanese" badger may be leathered to lengthen a fur pelt. This reference is important, Milona tells us, because it contradicts Leinoff's statements that he was the first to leather badger and thus first to extend the use of this bulky fur to the manufacture of fur coats. The district court, however, noted the inability of Milona's expert to compare Japanese badger with American badger, to state what the coloration of a Japanese badger's hairs are, or to state whether the use of Japanese badger would produce a noticeable striped effect on the fur side of the pelt. This reference, alone, therefore, anticipates nothing but the well-known concept of "leathering."

Milona relies, in addition, on Rauchwarenherstellung und Pelzkonfektion 335-337 (VEB Fachbuchuerlag 1970). This German-language reference discloses a "gallooning" technique which can be used for "achieving fashion effects." (Gallooning is the equivalent Milona also placed in evidence a pelt with stripes which it allegedly made in accordance with the Rauchwarenherstellung reference's teaching. The evidence shows, however, and the district court so found, that Milona's witness could not and did not make this pelt according to the reference. The reference clearly states, specifically, that the undercoat "is not to be separated while cutting, sewing and tacking, * * *." That is, the hairs over the cut are to remain intermingled and held together by the wooly underground while the leather is sewn in. If the undercoat is not separated, however, the underground cannot be exposed and no striped effect can be produced. The Rauchwarenherstellung reference, therefore, does not anticipate the Leinoff invention.

                of leathering.)    The trial court found, however, that this reference, the most relevant one Milona cited, failed to produce or suggest producing the striped effect of the Leinoff invention
                

We have examined not only the two references upon which Milona particularly relies here, but all other references shown to the trial court as well. Milona has not convinced us that the trial court made any clearly erroneous findings as to anticipation. We disagree with the dissent's analysis, which takes the Schirmer reference, substitutes American badger fur for the Japanese badger fur for which Schirmer calls (a substitution, incidentally, which the district court found lacked a sufficient basis), separates the strips of this fur according to other references which indicate that some furs may have their fur strips physically separated, and then argues that all the elements or steps of the claimed invention are disclosed in one anticipatory reference. The '424 patent is not invalid under 35 U.S.C. Sec. 102.

2. Section 103 defense

Milona next argues that the district court erred in not finding the invention claimed in the '424 patent obvious and the patent invalid under 35 U.S.C. Sec. 103. The now well-established test for obviousness, which the district court carefully followed, requires resolution of at least three fact questions: "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." Graham v. John Deere Co., 383 U.S. 1, 17, 86 S.Ct. 684, 694, 15 L.Ed.2d 545, 148 USPQ 459, 467 (1966).

Milona and Leinoff agree that the claims in issue differ from the prior art in that the claims state that the inserted leather strips "expose said light portions of the pelt hairs and produce a striped effect." The dispute here lies in whether the method for creating...