Moore v. Shultz

• Decision Date: 23 January 1974
• Docket Number: No. 72-1845.,72-1845.
• Parties: Elton M. MOORE, Appellant, v. Walt SHULTZ, d/b/a Walt Shultz Equipment Company, and McGraw-Edison Company, Appellees.
• Court: U.S. Court of Appeals — Tenth Circuit

491 F.2d 294 (1974)

Elton M. MOORE, Appellant, v. Walt SHULTZ, d/b/a Walt Shultz Equipment Company, and McGraw-Edison Company, Appellees.

No. 72-1845.

United States Court of Appeals, Tenth Circuit.

Argued and Submitted May 24, 1973.

Decided January 23, 1974.

Rehearing Denied March 13, 1974.

William S. Dorman, Tulsa, Okl. (James R. Eagleton, Tulsa, Okl., of counsel, with him on the brief), for appellant.

Jerry J. Dunlap, of Dunlap, Laney, Hessin & Dougherty, Oklahoma City, Okl. (Charles F. Lind and Charles A. Prudell, Elgin, Ill., of counsel, with him on the brief), for appellees.

Before SETH and HOLLOWAY, Circuit Judges, and LARAMORE, Senior Judge, United States Court of Claims.^*

SETH, Circuit Judge (By reassignment from Holloway, Circuit Judge).

This is an action for an injunction and damages for infringement of plaintiff's patent. Defendant, McGraw-Edison Company, manufactures the allegedly infringing machine, and defendant, Walt Shultz, sells it.

Defendants deny infringement, and raise the defenses of invalidity of plaintiff's patent and of laches.

The case was submitted to the jury on ten interrogatories covering plaintiff's cause of action and the defenses. The jury found for the plaintiff in its answers to each of the ten interrogatories. However, some time later, the court entered judgment notwithstanding the verdict in favor of defendants, and ordered that in the event the judgment n. o. v. was reversed on appeal, there would be a new trial.

The devices involved in this action are known in the dry cleaning business as "pants toppers," and are used for finishing and pressing the upper portions of men's trousers after they have been dry-cleaned. The operation generally involves fitting the waistband of the trousers around an adjustable form and applying steam and hot air in sequence to remove the wrinkles. The legs of the trousers are then pressed in a second operation.

Some time in the late 1940's plaintiff Moore began to formulate a plan for an improved pants topper. It was not until 1953, however, that he felt that he had developed the model for a successful machine. In April of that year he contacted a patent attorney and his application was filed on December 9, 1953. He obtained a patent approximately two years later in November 1955 (No. 2,723,785). While his application was pending, he began negotiations for the manufacture and sale of his machine under a license, and in January 1956 a licensing agreement with P & H Industries, Inc. was executed. In the following seventeen months P & H Industries manufactured approximately 440 machines and paid Mr. Moore royalties of about $11,000.00. The agreement was terminated at the request of P & H Industries in May 1957.

After terminating the agreement with plaintiff, P & H Industries continued to manufacture a pants topping machine. Defendant McGraw-Edison entered the field under an agreement with P & H Industries in 1961 which allowed a subsidiary to manufacture the P & H machine. Although this agreement has since terminated, McGraw-Edison has continued to manufacture its modified version of the P & H machine. This is the Ajax machine asserted to infringe upon plaintiff's patent.

Plaintiff apparently knew that P & H continued manufacturing topping machines after it had terminated the licensing agreement with him, but he relied on assurances that his patent was no longer involved. He first saw the McGraw-Edison topper in June 1967, although he had seen it advertised previously. Soon thereafter he contacted his attorneys who promptly notified McGraw-Edison of the possible infringement. Suit was not filed, however, until 1970, apparently because Mr. Moore was occupied in other litigation involving his patent.

The Moore Pants Topper:

The controversy focuses on claim 1 of plaintiff's patent, the Moore patent, which reads:

"A machine for finishing the top portion of trousers comprising a frame member having a plurality of reciprocable slide members mounted thereon, a foraminous bag carried by said frame member and surrounding said reciprocable slide members, means for moving the slide members outwardly to expand the bag member into engagement with the inner surface of the trousers top, a perforated tube assembly supported by said frame member and centrally disposed thereof, means for supplying steam to said tube assembly, and means supplying heated dry air to the trousers top."

We are particularly concerned with the combination and cooperative effect of the foraminous (porous) bag, the slide members, of which there were four shown in the Moore patent diagrams, and the means for causing the slide members to move outwardly, thus expanding the bag and engaging the waistband of the trousers. In the Moore patent diagram the slide members were controlled by a spring mechanism operated by a foot pedal. It should also be noted at this point that Mr. Moore does not assert that any of the elements of his invention taken individually was unknown in the prior art or would be patentable by itself. Rather, he asserts that his invention is a patentable combination of elements, which, although known previously individually, produce new or improved results in concert.

The Prior Art:

Three prior patents were cited by the examiner in the course of processing plaintiff's application. Newhouse patent No. 2,469,742 is a device for pressing the sleeves of coats, jackets, and other garments after cleaning.

Although not incorporated in the patented device, use of a fabric bag is discussed in connection with the prior art and discarded as having unfavorable limitations. Bader et al. patent No. 2,531,599 is called a pants stretcher and is designed to restore the size of shrunken pants or trousers. It basically consists of two bucks over which each leg of a pair of pants would be drawn. Both the Newhouse and the Bader patents contemplate the application of steam or hot air. Finally, Rosenthal patent No. 2,658,649 was also cited. This is a pants pressing machine designed to perform a similar function to the Moore machine only with respect to laundered rather than dry-cleaned pants. It involves an expandable, heated center form over which the upper portion of a pair of pants could be placed for drying and pressing. The patent indicates the form can be used to suspend the pants either horizontally or vertically.

In addition to the patents cited by the examiner, defendants introduced three uncited prior patents with the intent of thereby demonstrating the obviousness of or lack of novelty in the Moore device. These patents are Egleston No. 176,172, Bowen No. 2,428,484, and Littell No. 2,521,297. The Egleston device is an apparatus for shaping trousers and suggests the use of a wire form over which the trousers would be placed. Both the Bowen and the Littell machines are specifically designed as pants toppers. Both envision the application of steam and hot air, and both employ an adjustable means for engaging the upper portion of the trousers. The Bowen device suspends the trousers vertically although certain manual operations are required initially. It does not envision the use of either the reciprocable slide mechanism or the foraminous bag taught by the Moore patent. The Littell device holds the trousers horizontally and uses the force of the hot air to further expand the upper portion. It also does not employ a reciprocable slide mechanism to engage the waistband, and although the patent discusses the possible use of a foraminous bag, it rejects it as having many undesirable effects.

The O'Boyle Machine:

At approximately the same time that Mr. Moore was developing his pants topper, Kenneth O'Boyle in Albuquerque, New Mexico, was also working on a device to perform a similar function. Mr. O'Boyle filed his patent application approximately four months prior to Mr. Moore's, but received his patent approximately three weeks after Mr. Moore's had been granted. Both applications were processed by the same examiner.

Mr. O'Boyle had constructed experimental prototypes of his machine and used them in the dry-cleaning establishment in which he worked as early as 1951. He did not, however, realize a model which worked to his satisfaction until early 1953. Although one of the distinctive features of the O'Boyle machine as described in the patent is its ability to process two garments simultaneously, its design and operation bear some resemblance to the Moore topper. Perhaps the most obvious similarity is the use of a porous bag over which the trousers are drawn, and the fact that the bag can be collapsed or expanded by an adjustable mechanism. However, rather than the four slide members shown in the Moore patent which are moved back and forth mechanically by a spring mechanism to expand and collapse the bag, the O'Boyle topper employs a lever mechanism pivoted by hand, which moves in relation to a stationary buck. Such a mechanism would of course move in a circular rather than a reciprocable fashion.

The record also indicates that Mr. O'Boyle made certain disclosures regarding his machine to American Laundry Machinery Company, a McGraw-Edison subsidiary, while his machine was still in experimental stages. These disclosures apparently suggested the possible use of a slide mechanism rather than the lever device to expand the foraminous bag. American Laundry retained these disclosures in its files and they were never published nor was any machine ever constructed pursuant to the drawings which they contained.

The Ajax Press:

With some modifications, the American Laundry Machinery Company, a subsidiary of McGraw-Edison, has continuously manufactured the Ajax topper since 1961 when it entered the agreement with P & H Industries, Inc. Although its outward appearance bears little resemblance to the drawings contained in the Moore patent, it incorporates the essential features of the Moore claim. There are, however, two principal features which defendants insist distinguish it...