Lockwood v. Langendorf United Bakeries, Inc., 18159.

• Decision Date: 02 December 1963
• Docket Number: No. 18159.,18159.
• Citation: 324 F.2d 82
• Parties: Warren H. LOCKWOOD, and Mid-West Metallic Products, Inc., Appellants, v. LANGENDORF UNITED BAKERIES, INC., and Banner Metals, Inc., Appellees. LANGENDORF UNITED BAKERIES, INC., and Banner Metals, Inc., Appellants, v. Warren H. LOCKWOOD and Mid-West Metallic Products, Inc., Appellees.
• Court: U.S. Court of Appeals — Ninth Circuit

324 F.2d 82 (1963)

Warren H. LOCKWOOD, and Mid-West Metallic Products, Inc., Appellants, v. LANGENDORF UNITED BAKERIES, INC., and Banner Metals, Inc., Appellees.

LANGENDORF UNITED BAKERIES, INC., and Banner Metals, Inc., Appellants, v. Warren H. LOCKWOOD and Mid-West Metallic Products, Inc., Appellees.

No. 18159.

United States Court of Appeals Ninth Circuit.

October 28, 1963.

Rehearing Denied December 2, 1963.

Bronson, Bronson & McKinnon, and John F. Ward, San Francisco, Cal., Meyer, Baldwin, Doran & Egan, and George S. Baldwin, and Roudebush, Adrion, Brown, Corlett & Ulrich, and Myron W. Ulrich, Cleveland, Ohio, for appellants.

Boyken, Mohler & Foster, Dirks B. Foster, San Francisco, Cal., Keith D. Beecher, Los Angeles, Cal., Warren T. Jessup, Hollywood, Cal., and Fidler, Beardsley & Bradley, and Roy E. Petherbridge, Chicago, Ill., for appellees.

Before HAMLIN, JERTBERG and DUNIWAY, Circuit Judges.

DUNIWAY, Circuit Judge.

This is an action for patent infringement in which the defendants counterclaimed for declaratory relief. Both sides appeal and consequently we will refer to them as plaintiffs and defendants, rather than as appellants and appellees. Plaintiff Lockwood is a patentee of, and plaintiff Mid-West Metallic Products, Inc. is the licensee under, patent No. 2,931,535 (hereafter referred to as '535) issued April 5, 1960, and also reissue patent No. Re. 24731. The latter is a reissue of patent No. 2,782,936 (hereafter referred to as '936); the original patent '936 was issued on February 26, 1957 and the reissue on November 3, 1959.

In the complaint the plaintiffs charged that the defendant Langendorf United Bakeries, Inc, was infringing patent '535. Thereafter the defendant Banner Metals, Inc., the manufacturer of the device that was claimed to infringe, was permitted to intervene and was named as a defendant in the complaint. In their counterclaim for declaratory relief defendants asserted that plaintiffs claimed that they were also infringing Re. 24731 and asked for declaratory relief, both as to its validity and the validity of '535, and as to infringement of both patents.

In a written opinion, the court concluded that the defendants' device known as a Pal-a-teer, Exhibit 9, did not infringe patent '535, refused to hold that patent '535 is invalid, but did state that it should be narrowly limited, held that claim 7 of Re. 24731 is invalid and is not infringed by Exhibit 9, and that another device of the defendants, Exhibit O, does not infringe either patent '535 or Re. 24731. It made elaborate findings of fact in support of these conclusions and entered judgment accordingly.

Plaintiffs assert that patent '535 is valid and that the finding of no infringement is erroneous, that there was no justiciable issue as to possible infringement of '535 by Exhibit O or of Re. 24731 by Exhibit 9 or Exhibit O, that claim 7 of Re. 24731 is valid, that Exhibit 9 does infringe that claim, and that Exhibit O does infringe patent '535 and Re. 24731. Defendants assert that the court erred in not finding patent '535 invalid, particularly claims 19 and 20 of that patent, and in not finding the entire patent Re. 24731 invalid, but limiting its finding to claim 7 of that patent.

We conclude that the judgment must be affirmed. Much of this opinion is taken from the careful opinion of District Judge Sweigert, and those portions appear in quotation marks.

"BACKGROUND OF THIS SUIT.

"In 1952, plaintiff, Lockwood conceived an idea for metal wire receptacles or baskets suitable for the handling and display of bakery products and similar merchandise. These receptacles could be tiered in vertical position and, when not in use, could be nested one within the other in like vertical position. The tiering or nesting of the receptacles could be accomplished without need for any moving parts and, further, without need for `rotating\' one receptacle about the other to bring it into nesting position with the lower receptacle as required in some earlier types of tierable-nestable receptacles without moving parts. Lockwood applied for a patent which was finally issued in 1957 as Lockwood No. 2,782,936. * * *

"The eventual embodiment of Lockwood\'s application \'936 was Exhibit 1 herein — a receptacle manufactured and sold commercially by Mid-West in substantial quantity. This Exhibit 1 receptacle consists of two metal wire receptacles, or baskets, each so constructed that its bottom is slightly longer than its top dimensions. In tiered vertical position the bottom of an upper receptacle is supported by the top ends of a lower receptacle. To bring the two receptacles into nested position it is necessary to raise the top receptacle — and by means of a `lateral shift,\' followed by a `tilting motion\' — bring its ends under the top ends of the bottom receptacle and into clearway for nesting position with the latter. The characteristic of the receptacles is that they can be tiered or nested in vertical position without `rotation\' and with a so-called `tilting\' manipulation only.

"Subsequently, in 1956, Banner Metals, a competitor in the field, commenced the manufacture and sale of tierable-nestable receptacles, not in issue here, based upon an idea and design of their engineer, Wilson. Later, in 1957, Mid-West, claiming that those receptacles infringed Lockwood Patent \'936, which had been issued in 1957, commenced patent infringement litigation against Banner in Ohio. The litigation was subsequently broadened to include a further charge that these Banner receptacles also infringed a Lockwood Reissue Patent, No. 24731, a reissue of the original Lockwood \'936, which reissue had been granted to Lockwood in 1959. That litigation continued until eventually settled in October, 1960, in a manner hereafter described.

"In 1957, Lockwood, still working with Mid-West, conceived another idea which he considered to be better than the idea claimed in Lockwood \'936 as then embodied in Mid-West\'s Exhibit 1 receptacles. These new receptacles would be so constructed that the bottom of the upper receptacle * * *, could be brought from tiered into nested position without the `tilting\' motion implicit in Exhibit 1 and merely by raising the upper receptacle, and `shifting\' it slightly, horizontally and laterally, beyond, around and under support points and into clearway for nesting within the lower receptacle.

"On February 7, 1957, Lockwood filed an application for a patent on this last idea which patent was eventually issued April 5, 1960, as Lockwood 2,931,535 — the patent asserted by plaintiffs in this litigation. Lockwood, considering that he could have claimed this feature in his first patent, Lockwood \'936, also applied for on January 13, 1959, and was eventually granted, a reissue of \'936, being Re. 24,731 already mentioned — claim 7 thereof being a generic claim that purported to embrace both kinds of manipulation — the tilting motion implicit in the Exhibit 1 type receptacles produced by Mid-West and the lateral shift motion characteristic of his new idea. Neither Mid-West nor Lockwood ever produced for commercial use, any embodiments of this lateral shift manipulation — only the Exhibit 1 type tilting manipulation receptacle was in production by Mid-West. At the trial of this case, a model, claimed to be an embodiment of Lockwood \'535 and of Claim 7 of the Reissue Patent, and involving the lateral shift type manipulation, was introduced and is referred to herein as Exhibit 8.

"Meanwhile, Banner\'s engineer, Wilson, in February, 1959, also conceived another idea and in April, 1959, filed a still pending patent application for tierable-nestable receptacles which Banner embodied in a design, Exhibit 9 herein, the receptacle accused by Mid-West in this suit. This receptacle, like the embodiment, Exhibit 8, could be tiered and nested in vertical position by a similar lateral shift and without any need for a tilting motion.

"Banner\'s new, Exhibit 9 type receptacle, the accused herein, was discussed with a prospective customer, Langendorf, one of the defendants herein, in February and March, 1959, and later in 1959 it was sold in quantity for commercial use to both Langendorf and Safeway Stores. In early 1960 Banner made arrangements with Echo Products Co., for distribution of Banner Products, including Exhibit 9 type receptacles * * *.

"Lockwood actually saw some of these Exhibit 9 receptacles for the first time in April, 1959, and he then sent photographs and samples to Midwest which in turn forwarded them to its Cleveland, Ohio, patent attorney. After Lockwood\'s discovery of Banner\'s Exhibit 9 type receptacles, through his contact with Langendorf, he filed in May, 1959, an additional Claim 20 to his pending \'535 application and later, in November, 1959, he filed additional claims, 21-28. Through 1960, Midwest asserted infringement charges against Banner and its customers and on April 25, 1960, two weeks after the final issue of Lockwood \'535, commenced this suit against defendant Langendorf charging that Langendorf\'s continued use of Exhibit 9 type receptacles purchased by it in late 1959 constituted infringement of Lockwood \'535.

"Banner cancelled its distribution arrangements with Echo Products and intervened in this action on behalf of Langendorf. Whereupon plaintiffs amended their complaint to charge Banner, itself, with infringement.

"In October, 1960, during the pendency of this litigation, Banner made a settlement with Mid-West of the Cleveland, Ohio, litigation under which Banner agreed not to manufacture an early 1956 Wilson design — a design which, although it gave rise to the Cleveland litigation, is not here involved. Mid-West agreed not to assert its claims under Lockwood \'936 or the reissue thereof against receptacles sold by Banner prior to October, 1960. There was, however, no agreement by Banner not to manufacture Exhibit 9 type receptacles, i. e., the 1959 Wilson idea, nor was there any agreement by

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