Litton Systems, Inc. v. Whirlpool Corp.

• Court: U.S. Court of Appeals — Federal Circuit
• Writing for the Court: Before KASHIWA, Circuit Judge, NICHOLS, Senior Circuit Judge, and BENNETT; NICHOLS
• Citation: Litton Systems, Inc. v. Whirlpool Corp., 728 F.2d 1423, 221 USPQ 97 (Fed. Cir. 1984)
• Decision Date: 14 February 1984
• Docket Number: No. 83-1004,83-1004
• Parties: LITTON SYSTEMS, INC., Appellee, v. WHIRLPOOL CORPORATION, Appellant. Appeal

Page 1423

728 F.2d 1423

221 U.S.P.Q. 97

LITTON SYSTEMS, INC., Appellee, v. WHIRLPOOL CORPORATION, Appellant.

Appeal No. 83-1004.

United States Court of Appeals Federal Circuit.

Feb. 14, 1984.

Dugald S. McDougall, Chicago, Ill., argued, for appellant; Michael R. Cunningham, Minneapolis, Minn., of counsel, Gene A. Heth and Robert O. Rice, Benton Harbor, Mich., of counsel.

John D. Gould, Minneapolis, Minn., argued for appellee; with him on brief, was Earl D. Reiland, Minneapolis, Minn., Robert E. Lowe, Minneapolis, Minn., of counsel.

Before KASHIWA, Circuit Judge, NICHOLS, Senior Circuit Judge, and BENNETT, Circuit Judge.

NICHOLS, Senior Circuit Judge.

This is an appeal from a judgment entered on April 28, 1983, in which the United States District Court for the District of Minnesota, after a bench trial, held valid a United States utility patent and a United States design patent, both owned by Litton Systems. The district court also found that certain microwave ovens manufactured and sold by Whirlpool Corporation infringe these two patents, bear a false designation of origin as prohibited by Section 43(a) of the Trademark Act of 1946, 15 U.S.C. Sec. 1125-(a) (1982), and by the Minnesota Uniform Deceptive Trade Practices Act, Minn.Stat.Ann. Secs. 325D.43-.48 (West 1982), and unfairly compete with microwave ovens manufactured and sold by Litton Systems. The district court further held that Whirlpool Corporation's acts have caused damage to Litton Systems and the court enjoined Whirlpool Corporation from future infringement of Litton System's rights. Whirlpool's appeal involves only questions of liability. There has not been any decision as to accounting, but we have jurisdiction under 28 U.S.C. Sec. 1292(c)(1) (1982). We conclude that the Litton utility patent is invalid, the Litton design patent is valid but not infringed, Whirlpool has not violated 15 U.S.C. Sec. 1125(a), and Litton's state causes of action are not maintainable. Therefore, we reverse in part and affirm in part. Our holding as to invalidity of the utility patent turns on our holding that a product embodying the invention was on sale more than one year before the patent application's filing date, when such date is correctly determined.

I Background

Plaintiff-appellee Litton Systems, Inc. ("Litton"), a Delaware corporation having headquarters at Minneapolis, Minnesota, brought this action against defendant-appellant Whirlpool Corporation ("Whirlpool"), a Delaware corporation with headquarters in Benton Harbor, Michigan. Litton alleged that certain Whirlpool microwave ovens infringed two patents which Litton owns: U.S. Patent No. 3,843,859 ("the '859 patent") entitled "Microwave Oven Door Assembly"; and U.S. Design Patent No. D-226,990 ("the '990 patent"), entitled "Microwave Oven," and covering the appearance of Litton's 400-Series microwave ovens. Litton also made unfair competition claims which relate closely to its design patent infringement claim and which are premised on Whirlpool's alleged copying of the overall exterior product configuration of the Litton ovens. Litton contends that the Whirlpool ovens, which it believes copy the "Litton look," are likely to confuse, as to source, prospective purchasers of Litton microwave ovens.

Whirlpool denied at trial that it infringed either of Litton's patents, but has not argued the matter of infringement with respect to the '859 patent here. Whirlpool also contended that Litton's two patents were invalid for a number of reasons: the '859 patent because of obvious subject matter, fatal defects in Litton's Patent Office prosecution, actual invention by one not named in the patent, and fraud on the Patent Office in concealing from it the existence of an adverse claim; the '990 patent due to its obviousness in light of prior art. Finally, Whirlpool denied that it unfairly competed with Litton, arguing not only that it did not copy the appearance of Litton's ovens, but that since there is no "secondary meaning" in any of the nonfunctional features of Litton's ovens, there can be no confusion or likelihood of confusion between the Whirlpool and Litton ovens. This action was filed in 1977; four trial judges (and a magistrate) and a monumental record later, the trial court held for Litton on all counts, and enjoined Whirlpool from further infringement of Litton's rights.

A. The Relationship of the Parties.

Litton, a large, diversified company, makes a wide range of products which, through the 1960's, it sold to the armed forces and to industrial customers. These products included microwave ovens for sale to commercial purchasers such as restaurants and schools.

In 1969, Litton began selling microwave ovens for home use. Litton, which had never before marketed to consumers at retail, needed a distribution system through which it could reach the consuming public. In 1970, Litton entered into arrangements for the wholesale distribution of its microwave ovens with a number of Whirlpool's independent distributors and with some of Whirlpool's company-owned branches as well. Whirlpool, not then selling microwave ovens itself, had no objection to sharing its distribution facilities with Litton. It warned Litton, however, that Whirlpool might introduce its own line of microwave ovens in the future.

In 1972, Litton brought on the market the first models of its new 400-Series countertop microwave ovens. Litton marketed these ovens under its own brand name, "Litton." The 400-Series, intended for consumer use, met with good public acceptance. In order to protect the exterior design of the 400-Series oven, Litton, this same year, applied for and received the '990 design patent.

In large part due to the success of the 400-Series ovens, a number of other companies, including Sears and Whirlpool, inquired of Litton whether it would sell its 400-Series on a "private label" basis. Litton rejected all save one of these requests, but sold several thousand of its 400-Series ovens to McGraw-Edison Company for resale to the public in appliance stores and other retail outlets under the brand name "Modern Maid." The Modern Maid ovens were virtually identical to the 400-Series ovens. On their face, moreover, these Modern Maid ovens had no indication as to their Litton origin. The parties dispute, however, whether these ovens bore any notification anywhere of Litton manufacture.

About November 1973, Whirlpool began to develop its own line of countertop microwave ovens. A group of Whirlpool engineers undertook the mechanical and electrical development work on the new product. Litton's own Microwave Tube Division acted as technical consultant.

Whirlpool assigned the duties of creating its microwave oven's aesthetic design to Sundberg-Ferar, Inc., a well-known firm of industrial designers. Sundberg-Ferar's designers hoped to give the Whirlpool microwave oven a competitive, "contemporary" exterior design. They "comparison shopped" to acquaint themselves with the better-selling microwave ovens then on the market. In the course of their research, Sundberg-Ferar acquired from Whirlpool, and studied, a product specification sheet for the Litton model 416 oven.

The raison d'etre for this case is clear. Although other companies were manufacturing microwave ovens with a similar general "modernistic" appearance (noticeably Admiral and Roper), Litton worried most about Whirlpool's competition. Litton's past-president of its Microwave Cooking Products Division, for example, expressed Litton's great concern that Whirlpool would attempt to have the microwave oven distributors which Litton and Whirlpool had in common "sell Whirlpool and perhaps drop the Litton line."

Litton had, in fact, a well-grounded fear. Whirlpool, which considered its proposed countertop microwave oven a "me too" product to the Litton 400-Series ovens, regarded it critically important to "recapture" its former distributors with its own Whirlpool microwave oven line. ("[One of our] most important chores is to wean our distributors away from Litton." Whirlpool memo of April 1977.) To recapture its distributors, Whirlpool intended to put out a microwave oven which would directly compete with the Litton ovens. Numerous Whirlpool memoranda within the trial record discuss Litton and the Litton microwave oven. Some examples include: a memo of February 1974 in which Whirlpool states that "[s]ales indicated a need for two (2) countertop microwave ovens comperable [sic] to Litton's 200 & 400 series, * * *;" a memo of June 1975 in which Whirlpool expressed concern that "the interior cavity of our microwave gave the illusion of being much smaller than the Litton due to the design of the cover on the mixer;" and a memo of February 1976 in which Whirlpool stated that it would "offer 3 models in January, 1977, and a probe model within 60 days. Exactly what Litton offers our distributors today."

Whirlpool introduced its countertop microwave oven to the public in January 1977. Litton brought this action in July 1977. Since one picture is worth a thousand words, rather than attempt to describe microwave ovens then on the market, we provide photographs of several on the next few pages. In examining these photographs, the reader should pay particular attention to the shape of the doors, the layout of the control panels, and the location and type of manufacturer's identification.

NOTE: OPINION CONTAINS TABLE OR OTHER DATA THAT IS NOT VIEWABLE

NOTE: OPINION CONTAINS TABLE OR OTHER DATA THAT IS NOT VIEWABLE

NOTE: OPINION CONTAINS TABLE OR OTHER DATA THAT IS NOT VIEWABLE

NOTE: OPINION CONTAINS TABLE OR OTHER DATA THAT IS NOT VIEWABLE

NOTE: OPINION CONTAINS TABLE OR OTHER DATA THAT IS NOT VIEWABLE

NOTE: OPINION CONTAINS TABLE OR OTHER DATA THAT IS NOT VIEWABLE

B. Microwave Oven Doors

The utility patent in suit, '859, covers a single, but important, component of a microwave oven, the door. One of the problems facing microwave oven engineers ever since the introduction of...