Mayview Corp. v. Rodstein

• Decision Date: 04 February 1980
• Docket Number: Nos. 77-3468,77-3481,s. 77-3468
• Citation: 205 USPQ 302,620 F.2d 1347
• Parties: , 205 U.S.P.Q. 302 MAYVIEW CORP., an Illinois Corporation, Plaintiff-Appellant, v. Harvey B. RODSTEIN, an Individual and Rodac Pneumatic Tools, Inc., a California Corporation, and Rodac International Corporation, a California Corporation, Defendants-Appellees. Harvey B. RODSTEIN, an Individual, and Rodac Pneumatic Tools, Inc., a California Corporation, and Rodac International Corporation, a California Corporation, Counterplaintiffs-Appellants, v. MAYVIEW CORP., an Illinois Corporation, Leonard Shapiro, Irving Fisher, Tom Sato and Shig Nakagiri, Individuals, Astrosound, a corporation, Astrosound, a Division of Marquette Appliance Co., a corporation, Marquette Appliances Co., a corporation, Autoquip Distributors, Western Skills, General Merchandising Co., Counterdefendants-Appellees.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 1347

620 F.2d 1347

62 A.L.R.Fed. 713, 205 U.S.P.Q. 302

MAYVIEW CORP., an Illinois Corporation, Plaintiff-Appellant, v. Harvey B. RODSTEIN, an Individual and Rodac Pneumatic Tools,

Inc., a California Corporation, and Rodac

International Corporation, a California

Corporation, Defendants-Appellees.

Harvey B. RODSTEIN, an Individual, and Rodac Pneumatic

Tools, Inc., a California Corporation, and Rodac

International Corporation, a California

Corporation, Counterplaintiffs-Appellants, v. MAYVIEW CORP., an Illinois Corporation, Leonard Shapiro, Irving Fisher, Tom Sato and Shig Nakagiri, Individuals,

Astrosound, a corporation, Astrosound, a Division of

Marquette Appliance Co., a corporation, Marquette Appliances

Co., a corporation, Autoquip Distributors, Western Skills,

General Merchandising Co., Counterdefendants-Appellees.

Nos. 77-3468, 77-3481.

United States Court of Appeals Ninth Circuit.

Feb. 4, 1980.

Rehearing Denied April 23, 1980.

Charles H. Schwartz, Roston & Schwartz, Los Angeles, Cal., for plaintiff-appellant.

Albert M. Herzig, Herzig & Walsh, Beverly Hills, Cal., on brief; Joseph R. Evanns, Beverly Hills, Cal., for defendants-appellees.

Appeal from the United States District Court for the Central District of California.

Before CHOY, ANDERSON and HUG, Circuit Judges.

CHOY, Circuit Judge:

The district court held a utility patent and three design patents invalid for a variety of reasons, including anticipation, obviousness and perpetration of frauds upon the Patent Office and the court. The court also held that this case was an "exceptional" one justifying an award of attorney's fees of $90,850. We affirm in part, and vacate and remand in part.

I. Statement of the Case

Rodac Pneumatic Tools, Inc., and Rodac International Corp. (collectively referred to as Rodac) are companies owned by Harvey B. Rodstein. Rodac manufactures, imports and sells certain air-powered tools, including hand-held sanders and drills.

Mayview Corporation (Mayview) was, at the time this suit began, owned by Leonard Shapiro, who is now deceased. Mayview also markets air-powered tools, including hand-held sanders and drills.

Mayview brought suit against Rodac and Rodstein in March 1971, seeking a declaration that Letters Patent No. 3,563,134 (the '134 patent) and Design Patents Nos. D-210,793, D-210,794 and D-210,086 (the '793, '794 and '086 patents or the design patents) are invalid. Mayview also sought a declaration that it had not infringed these patents and alleged that Rodac and Rodstein had violated the antitrust laws in procuring and attempting to enforce these patents. Mayview apparently filed this action in response to Rodstein's and Rodac's attempts to enforce these patents against Mayview and its customers.

Rodac and Rodstein counterclaimed against Mayview, Shapiro and Irving Fisher, an associate of Shapiro's formerly employed by Rodstein. Rodstein and Rodac alleged that the counter-defendants had willfully infringed the '134 and design patents, had infringed Rodac's trademark, had misappropriated trade secrets and had engaged in unfair competition against Rodac and Rodstein.

Mayview later amended its complaint to state an additional cause of action for malicious prosecution.

The district court issued a preliminary injunction enjoining Mayview, Shapiro and Fisher from infringing the '134 patent and the Rodac trademark. That decision was appealed to this court and we reversed, holding that the district court's failure first to find the patent valid precluded issuance of the injunction. We said the presumption of validity attaching to a patent issued by the Patent Office was "too slim a reed to support a preliminary injunction." Mayview Corp. v. Rodstein, 480 F.2d 714, 718 (9th Cir. 1973).

Trial was held and the district court concluded that (1) the '134 patent was invalid, (2) the design patents were invalid, (3) Rodstein and Rodac falsely marked sanders in violation of 35 U.S.C. § 292, (4) Mayview failed to carry its burden of proof on its antitrust claims, (5) Rodac and Rodstein did not engage in malicious prosecution by pursuing their counterclaims, (6) Mayview, Shapiro and Fisher did not infringe the '134 patent, and (7) Rodstein and Rodac's other counterclaims must be dismissed for failure to present any evidence. The court also held that the case was "exceptional" under 35 U.S.C. § 285 and awarded Mayview, Shapiro and Fisher $90,850 in attorney's fees.

Rodstein and Rodac appeal from the district court's final judgment. ¹ They contend the district court erred in holding that the patents were invalid, that they falsely marked certain sanders, and that they did not present sufficient evidence on their counterclaims. They also argue that the district court erred in awarding any attorney's fees to Mayview, Shapiro and Fisher, or, at the very least, that the amount awarded is excessive.

Mayview, Shapiro and Fisher filed a cross-appeal, contending that the district court's award of attorney's fees was insufficient and that the district court erred in failing to find that Rodstein and Rodac violated the antitrust laws and engaged in malicious prosecution.

II. Validity of the Patents

This case involves two distinct types of patents: (1) patents for "inventions," or so-called "utility" patents, which are issued for "any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof," and (2) design patents, which are issued for "any new, original and ornamental design for an article of manufacture." 35 U.S.C. §§ 101, 171. Although the two kinds of patents involved here are different, many of the conditions for issuance of either a utility patent or a design patent are the same. See 35 U.S.C. §§ 102-103, 171. Nonetheless, for the sake of clarity and convenience, we treat separately the utility patent and the design patents in this case.

A. The '134 Patent

The district court held the '134 patent invalid for three independent reasons: (1) the invention was anticipated by two previously issued patents and three previously known and disclosed sanders, 35 U.S.C. § 102; (2) it was obvious at the time it was "invented" to a person having ordinary skill in the art, given the prior art of the same two patents and three sanders that anticipated it, 35 U.S.C. § 103; and (3) Rodstein was not the sole inventor of the sander as he represented in the patent application, 35 U.S.C. § 111. ² Because we affirm the district court's conclusion of invalidity on the ground that the applicant was not the sole inventor, we need not address the other grounds relied upon by the district court.

Section 101 of title 35 provides:

Whoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefor, subject to the conditions and requirements of this title.

(Emphasis added.) Section 102 provides some of the conditions for obtaining a patent. Among them is the following: "A person shall be entitled to a patent unless . . . he did not himself invent the subject matter sought to be patented." 35 U.S.C. § 102(f). Section 111 echoes this disqualification ("Application for patent shall be made by the inventor"), as does § 115 ("applicant shall make oath that he believes himself to be the original and first inventor" of the subject matter sought to be patented).

The district court held that Rodstein violated § 111 (and §§ 101, 102(f) and 115) in applying for and receiving the '134 patent as the sole inventor of the subject matter. Such a conclusion, if not erroneous, would support a declaration that the '134 patent is invalid. For "it has been held repeatedly that a valid patent can only be granted to the real inventor, that the original and first inventor must make the application, and that, in the case of a patent which is a joint invention, a patent issued to one only of the inventors is void." Pointer v. Six Wheel Corp., 177 F.2d 153, 157 (9th Cir.), cert. denied, 339 U.S. 911, 70 S.Ct. 570, 94 L.Ed. 1338 (1949).

The district court's conclusion that Rodstein was not the sole inventor of the subject matter of the '134 patent raises two questions on review. The first is whether the district court's findings of fact relevant to the issue of inventorship are clearly erroneous. Fed.R.Civ.P. 52(a). The second is the legal question of whether, given the facts that the district court found, the court erred in concluding that Rodstein was not the sole inventor of the '134 subject matter.

1. Evidence of Inventorship

The district court found that (1) Sumida, an employee of Rodstein, "designed and developed, without any help from Rodstein, a sander"; (2) Sumida assembled the sander according to his design and made several alterations to it; (3) only after the sander was successfully tested did Sumida notify Rodstein of its existence; and (4) minor changes were made in the Sumida prototype prior to commercial production, but these changes were not reflected in the '134 patent application, and therefore, "the Sumida prototype became the '134 patent." Rodac and Rodstein challenge these findings on three grounds.

First, they contend that the district court erred in uncritically adopting the findings and conclusions prepared by counsel for Mayview, Shapiro and Fisher. In response to this contention, we quote a recent decision by another panel of this court:

Wholesale adoption of the prevailing party's proposed findings complicates the problems of appellate review. (Citations omitted.)

Although the practice has been disapproved, we have indicated that it may be permissible in cases "involving highly technical issues such as may be involved in patent cases and complex scientific problems." Industrial Bldg. Materials, Inc. v. Interchemical Corp., 437 F.2d 1336, 1339-40 (9th Cir. 1970) (, disapproved on other grounds, Kung v. FOM Investment Corp., 563 F.2d 1316, 1318-19 (9th Cir. 1977)).

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