Pentec, Inc. v. Graphic Controls Corp.

• Decision Date: 01 November 1985
• Docket Number: No. 85-1565,85-1565
• Citation: 776 F.2d 309,227 USPQ 766
• Parties: , 227 U.S.P.Q. 766 PENTEC, INC., and Bob Allen, Appellees, v. GRAPHIC CONTROLS CORP., Appellant. Appeal
• Court: U.S. Court of Appeals — Federal Circuit

Page 309

776 F.2d 309

54 USLW 2315, 227 U.S.P.Q. 766

PENTEC, INC., and Bob Allen, Appellees, v. GRAPHIC CONTROLS CORP., Appellant.

Appeal No. 85-1565.

United States Court of Appeals Federal Circuit.

Nov. 1, 1985.

Paul F. Prestia, Ratner & Prestia, Valley Forge, Pa., for appellant. With him on the brief was Lawrence A. Husick, Valley Forge, Pa., LeRoy T. Rahn, Christie, Parker & Hale, of Pasadena, Cal., of counsel.

Paul L. Gardner, Spensley, Horn, Jubas & Lubitz, Los Angeles, Cal., for appellees.

Before MARKEY, Chief Judge, BENNETT, Circuit Judge, and HARVEY ^*, Senior District Judge.

MARKEY, Chief Judge.

Appeal from a judgment of the United States District Court for the Central District of California declaring claims 1-4 of U.S. Patent No. 3,983,569 to James Hubbard and Charles Erdman ('569 patent) invalid for obviousness and not infringed and dismissing the counterclaims of Graphic Controls, Inc. (GC) for infringement and unfair competition. -(3)224 USPQ 976 (C.D.Cal. 1984). We affirm.

Background

Pentec, Inc. and Bob Allen (Pentec) sued for a declaration of invalidity and noninfringement of the '569 patent. GC, as assignee of the patent, counterclaimed for infringement of claims 1-4 and for unfair competition. After a nonjury trial, the district court adopted in full the findings and conclusions submitted by Pentec, and declared the claims in suit invalid and not infringed. The district court further held that Pentec did not compete unfairly under the Lanham Act, 15 U.S.C. Sec. 1125(a), or under California law.

A. Prior Technology

The recording instruments here involved are formed of thin, very light, and small elements. Before 1970, recording instruments included metal "bucket" pens, each affixed permanently to a pen arm, with refillable liquid ink supplies. Users experienced difficulties in maintaining ink flow and refilling.

During the 1970's, the industry developed disposable pens with fibrous ink reservoirs, solving the flow and refill problems. However, frequent replacement of the disposable pen risked upsetting or damaging the delicate pen arm. During the early 1970's, GC and its competitors used folded-over metal tabs to attach the pen.

In 1973, GC introduced its first disposable "Series 10" pen for use on round chart recorders. That pen had the same fastening means as GC's earlier "MARK-TROL" pen. The Sanford Corporation (Sanford) On September 28, 1976, the '569 patent issued from a continuation-in-part application to Hubbard and Erdman who assigned it to GC. The date of the original application, January 10, 1975, has been stipulated to have been the date of invention.

sought to develop disposable pens with a better fastening means. Sanford's efforts produced U.S. Patent No. 3,893,130 to Charles Browning and Gilbert Perrigo (Browning) which issued July 1, 1975. That patent disclosed a plastic channel on the pen as a means for attaching it to the arm. However, that means proved insecure. An improved version was disclosed in U.S. Patent No. 3,934,255 to Guy Taylor (Taylor) which issued January 20, 1976 on an application filed June 3, 1974.

B. The '569 Patent

In 1977, GC introduced to the market its "Series 39" pen, which embodied the Hubbard invention disclosed in the '569 patent. The Hubbard invention includes a pen arm having an "integrally molded hinge member" for folding over against the pen body. Claim 1, the only independent claim in issue and from which claims 2-4 depend, is in Jepson form. It reads:

In an instrument marker pen body including an ink reservoir and means for receiving a writing tip, the improvement comprising a pen arm holding means consisting of an integrally molded hinged member adapted to fold against a surface of the pen body and to be locked against said surface by engageable locking means and to receive and secure in place against said surface a pen arm when said hinged member is in its folded and locked position.

Claim 2 adds ridges on the hinge to grip the arm. Claim 3 adds a channel on the pen body to hold the arm on each side. Claim 4 adds a disposable pen having a fibrous body containing ink.

GC successfully marketed under its "Series 39" designation many models of its "snap-on" recording instrument pens embodying the inventions claimed in the '569 patent.

C. Pentec's Actions

Shortly after setting up his wholly owned Pentec corporation in 1979, Allen requested, and GC refused, a license under the '569 patent.

Pentec tried to compete with its first "Series 390" pen. However, Pentec withdrew that pen from the market because it did not mount securely to the arm.

In 1982, Pentec introduced a second "Series 390" pen. It has a hinged clasp attached to the side of the pen and is the product accused as an infringement in GC's counterclaim. It differs from the invention claimed in '569 patent solely in that its hinged clasp is separately molded and ultrasonically welded in a separate process rather than being "integrally molded" in one step.

Pentec introduced the accused pen without advice of counsel. Bob Allen testified that he believed the '569 patent to be invalid and that Pentec's pen did not infringe it. When GC charged it with infringement of the '569 patent, Pentec sought counsel and initiated this declaratory judgment action in 1983.

D. District Court Proceedings

Trial was held on June 5, 7, 8, 11, 12, and 13, 1984. On November 13, 1984, the district court issued judgment in favor of Pentec. The record indicates that the court crossed out "proposed" from the title page of the findings and conclusions submitted by Pentec and adopted them verbatim.

The adopted findings and conclusions relating to validity say: (1) Pentec rebutted the presumption of validity by clear and convincing evidence; (2) the '569 patent was invalid in light of the prior art because the Hubbard invention would have been obvious to one of ordinary skill in the art; (3) GC had not clearly established a nexus between the commercial success of its patented pen and the claimed invention; and (4) GC had not shown existence of a long felt need for a hinged fastener.

The district court found Pentec not guilty of unfair competition because its "Series 390" merely designated the pen

model, not the source of its manufacture, a conclusion bolstered by an absence of actual confusion, an absence caused by the marking of "Pentec" on its pens.

Issues Presented

Whether the district court erred in: (1) declaring claims 1-4 invalid for obviousness under Sec. 103; ¹ (2) finding non-infringement; (3) dismissing GC's counterclaim for unfair competition.

OPINION

A. Standard of Review

This court reviews factual findings underlying a conclusion of obviousness and a finding of infringement under the clearly erroneous standard. Fed.R.Civ.P. 52(a). A finding is clearly erroneous when the reviewing court is left with a firm conviction that a mistake has been made, notwithstanding the presence of evidence that may support it. United States v. U.S. Gypsum Co., 333 U.S. 364, 395, 68 S.Ct. 525, 541, 92 L.Ed. 746, 76 U.S.P.Q. 430, 444 (1948). Though adoption of proposed findings verbatim may increase wariness on review, the clearly erroneous standard is not thereby rendered inapplicable. Anderson v. City of Bessemer City, N.C., --- U.S. ----, ----, 105 S.Ct. 1504, 1511, 84 L.Ed.2d 518 (1985); Rosemount, Inc. v. Beckman Instruments, Inc., 727 F.2d 1540, 1544 n. 4, 221 USPQ 1, 5 n. 4 (Fed.Cir.1984). The ultimate obviousness determination is a conclusion of law not subject to the clearly erroneous standard.

GC, as appellant, bears the burden of persuading us that the district court committed reversible legal error in its determination that the invention would have been obvious, or that its probative findings underlying that determination were clearly erroneous. Atlas Powder Co. v. E.I. DuPont DeNemours, 750 F.2d 1569, 1573, 224 USPQ 409, 411 (Fed.Cir.1984).

B. Obviousness

GC contends that the district court erred in its findings on: (1) the scope and content of the prior art; (2) the level of ordinary skill; (3) the differences between the prior art and the claimed invention; (4) the objective evidence of nonobviousness; and erred (5) in applying a special "combination patent" rule of law.

(1) Scope and Content of the Prior Art

Section 103, as construed by the Supreme Court in Graham v. John Deere, 383 U.S. 1, 17, 86 S.Ct. 684, 693, 15 L.Ed.2d 545, 148 USPQ 459, 467 (1966), makes the factual inquiry into the scope and content of the prior art the initial step in determining the obviousness of a claimed invention. At the outset, GC contends there is nothing in the record suggesting that one of ordinary skill in the pen art would have looked to the plastic hinge and fastener art without prior knowledge of the Hubbard invention. GC thus argues that the hinge and fastener art was "non-analogous", i.e., that it was improperly looked to by the district court in determining whether the Hubbard invention would or would not have been obvious.

Those of ordinary skill in the art may be presumed to have knowledge of arts "reasonably pertinent to the particular problem with which the inventor was involved." In re Wood, 599 F.2d 1032, 1036, 202 USPQ 171, 174 (CCPA 1979). However, that prior art may not be gathered with the claimed invention in mind. In re Antle, 444 F.2d 1168, 1171, 170 USPQ 285, 287 (CCPA 1971).

The problem confronting Hubbard was the need for a simple holding means to enable frequent, secure attachment and easy removal of a marker pen to and from a pen arm. Nothing in the record indicates that one trying to solve that problem would not have looked to the fastener and hinge art. See Stratoflex, Inc. v. Aeroquip Corp., 713 F.2d 1530, 1535, 218 USPQ 871, 876 (Fed.Cir.1983). In fact, Hubbard testified at a deposition read into the record at trial that what he did, in effect, was to select a plastic hinge from the literature he had read and incorporate it into a plastic bucket pen for securing it...