Pfaff v. Wells Electronics, Inc., s. 96-1150

Citation124 F.3d 1429,43 USPQ2d 1928
Decision Date08 September 1997
Docket NumberNos. 96-1150,96-1187,s. 96-1150
Parties, 43 U.S.P.Q.2d 1928 Wayne K. PFAFF, Plaintiff/Cross-Appellant, v. WELLS ELECTRONICS, INC., Defendant-Appellant.
CourtUnited States Courts of Appeals. United States Court of Appeals for the Federal Circuit

Barry L. Grossman, Banner & Allegretti, Ltd. of Washington, DC, argued for plaintiff/cross-appellant. With him on brief were Pamela I. Banner, Adriana S. Luedke, and Bradley C. Wright.

James D. Hall, Baker & Daniels, South Bend, IN, argued for defendant-appellant. With him on brief were David C. Read and Robert D. Null. Of counsel on brief were David R. Melton and Gerard T. Gallagher, Barnes & Thornburg, South Bend, IN.

Before ARCHER, Chief Judge, PLAGER, and SCHALL, Circuit Judges.

ARCHER, Chief Judge.

Wells Electronics, Inc. (Wells) appeals the judgment of the United States District Court for the Northern District of Texas, No. 3:91-CV-1542-H, involving U.S. Patent No. 4,491,377 ('377 patent) owned by Wayne K. Pfaff (Pfaff). The district court held that claims 1 and 6 of the '377 patent are invalid for anticipation, 35 U.S.C. § 102(b) (1994), that claims 7, 10, 11, and 19 are not invalid and that Wells' sockets infringed such claims. Wells appeals the judgment as to infringement and validity. Pfaff cross-appeals the judgment of invalidity as to claims 1 and 6.

We hold that the invention disclosed in the '377 patent was on sale within the meaning of 35 U.S.C. § 102(b) or would have been obvious in view of that sale within the meaning of 35 U.S.C. §§ 102(b) and 103. Accordingly, the judgment of invalidity as to claims 1 and 6 is affirmed on other grounds and the validity judgment as to claims 7, 10, 11, and 19 is reversed.

BACKGROUND

The '377 patent relates to sockets for testing leadless chip carriers. Claim 1 is representative and reads:

1. Mounting means for a leadless chip carrier comprising:

(a) base support means having first and second oppositely disposed major faces;

(b) a plurality of axially elongated conductive pins passing transversely through said base support means substantially perpendicular to said first and second major faces, the opposed inner edges of the ends of said pins extending from said first major face arranged to define a cavity substantially conforming to at least two oppositely disposed lateral peripheral dimensions of said leadless chip carrier in a plane parallel with said first major face and the inner edges of said pins converging slightly inwardly with distance from said first major face; and

(c) unitary means operable independently of said leadless chip carrier reciprocally moveable axially with respect to said pins and coacting with said opposed inner edges of said pins for uniformly spreading the ends of said pins extending from said first major face to permit the insertion of a leadless chip carrier therebetween.

Figure 2 of the patent shows a sectional view of the socket:

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

The socket is comprised of three basic elements: a base support 15, a plurality of conductive pins 20, and a spreader 40. The chip carrier is placed in an opening in the spreader 40, which, when depressed, spreads apart the pins 20, by interaction of the lip 43 of the spreader 40 with the pins 20, to allow the carrier to fall into place between the pins 20 without applying any mechanical force to the carrier. When the spreader 40 is released, the pins 20 move back into their original positions, making electrical contact with the carrier and locking it into place. In order to release the carrier, the spreader 40 is depressed, spreading the pins 20 and allowing the carrier to fall out through the opening in the spreader 40 when the socket is inverted.

In November 1980, Texas Instruments (TI) contacted Pfaff and asked him to develop a socket for its carriers. In a later meeting with TI representatives, Pfaff made a sketch of his concept and afterwards made detailed engineering drawings of the socket. Pfaff sent his drawings to a company called Weiss-Aug for customized tooling and production in February or March of 1981. On April 8, 1981, Delta V., a company acting on behalf of TI, issued a purchase order to Pfaff's company, Plastronics, for 30,100 sockets, which were intended for production use. The purchase order confirmed an earlier, verbal order on March 17, 1981. Pfaff filed his patent application on April 19, 1982.

Pfaff subcontracted the Delta V. socket order to Weiss-Aug and received the manufactured sockets from Weiss-Aug in July of 1981. After testing some of the sockets in a mechanical cycling machine that cycled them 72,000 times and finding no noticeable wear, the sockets were shipped to and accepted by TI.

This case is the second time Pfaff has sued Wells for infringement of the '377 patent. The first was appealed to this court and we upheld a finding of noninfringment and vacated the district court's holding that the patent was not invalid. See Pfaff v. Wells Electronic, Inc., 884 F.2d 1399, 12 USPQ2d 1158 (Fed.Cir.1989) (Table).

Pfaff sued again after Wells modified its socket designs. The district court held on summary judgment that Wells' modified designs did not infringe the '377 patent. When that judgment was appealed to this court we reversed and remanded for further proceedings. See Pfaff v. Wells Electronics, Inc., 5 F.3d 514, 28 USPQ2d 1119 (Fed.Cir.1993). On remand, the district court referred the case to a Special Master for a non-jury trial. The Special Master's Findings of Fact and Conclusions of Law were adopted by the district court as its opinion. The court held that claims 1 and 6 were invalid under 35 U.S.C. § 102(b) (1994) as being anticipated by a prior art reference. The court also held the claimed invention was not on sale within the meaning of § 102(b). Finally, the district court held that various models of Wells' sockets infringed the remaining claims. Both parties have appealed.

DISCUSSION
I. SECTION 102(b)
ON-SALE BAR

Wells contends that claims 1, 6, 7, and 10 1 of the '377 patent are invalid because the invention claimed was on sale within the meaning of 35 U.S.C. § 102(b). That section provides that an inventor is not entitled to a patent if "the invention was ... on sale in this country more than one year prior to the date of the application for patent in the United States." The ultimate determination of whether an invention was on sale within the meaning of § 102 is a question of law that we review de novo. See Manville Sales Corp. v. Paramount Sys., Inc., 917 F.2d 544, 549, 16 USPQ2d 1587, 1591 (Fed.Cir.1990). We review the factual findings underlying the on-sale determination for clear error. Id. at The relevant inquiry is whether there was a definite sale or offer for sale of the claimed invention prior to the critical date, defined as one year prior to the U.S. filing date to which the application was entitled. See Envirotech Corp. v. Westech Eng'g Inc., 904 F.2d 1571, 1574, 15 USPQ2d 1230, 1232 (Fed.Cir.1990). The foremost purpose of the on-sale bar is to "prevent[ ] inventors from exploiting the commercial value of their inventions while deferring the beginning of the statutory term." Ferag AG v. Quipp Inc., 45 F.3d 1562, 1567-68, 33 USPQ2d 1512, 1515 (Fed.Cir.1995). Thus, in making the determination as to whether the invention was "on sale," " '[a]ll of the circumstances surrounding the sale or offer to sell, including the stage of development of the invention and the nature of the invention, must be considered and weighed against the policies underlying section 102(b).' " Micro Chem., Inc. v. Great Plains Chem. Co., 103 F.3d 1538, 1544, 41 USPQ2d 1238, 1243 (Fed.Cir.1997) (quoting UMC, 816 F.2d at 656, 2 USPQ2d at 1471-72).

                549, 917 F.2d 544, 16 USPQ2d at 1591.   In this case, there are no facts in dispute, leaving only the legal issue of whether the § 102(b) on-sale bar invalidates the patent.  See UMC Electronics Co. v. United States, 816 F.2d 647, 657, 2 USPQ2d 1465, 1472 (Fed.Cir.1987)
                

The undisputed facts in this case show that the invention claimed in the '377 patent was commercialized prior to the critical date of April 19, 1981. The district court found that a definite verbal and written purchase order for the later patented invention was received before the critical date. In a handwritten note on one of his engineering diagrams dated February 25, 1981, Pfaff indicated that the first order would be "for 500,000 springs (25,000 sockets)." On April 8, 1981, Pfaff's company received a written purchase order from Delta V. for 30,100 sockets for $91,155. The purchase order specified the materials to be used and the delivery date, and it noted that the order was a confirmation of a verbal order placed on March 17, 1981. See Buildex Inc. v. Kason Indus., 849 F.2d 1461, 1464, 7 USPQ2d 1325, 1327-28 (Fed.Cir.1988) (holding the existence of a sales contract or the signing of a purchase order is sufficient to demonstrate "on-sale" status).

Additionally, Pfaff acknowledged in his testimony that, as a result of his meetings with TI, he had a "go" situation and that they had a "deal" prior to the critical date. Pfaff further admitted that the arrangement with TI was purely commercial, with no experimentation or additional development involved. See UMC, 816 F.2d at 657, 2 USPQ2d at 1472 ("Countering the prima facie case, UMC offers only the purely technical objection that no complete embodiment of the invention existed at the time of the sale.... However, the contract was not a research and development contract, and UMC admits that the offer it made was for profit, not to conduct experimental work."). Thus, there is no issue of experimental use in this case.

Although the invention was commercialized, it had not been reduced to practice at the time of sale because there was no physical embodiment of the invention. It was for this reason alone that the district court did not apply the on-sale bar.

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