Plasser American Corp. v. Canron, Inc.

• Decision Date: 23 April 1980
• Docket Number: Civ. A. No. 75-1932-5.
• Citation: 546 F. Supp. 589
• Court: U.S. District Court — District of South Carolina
• Parties: PLASSER AMERICAN CORPORATION, Plaintiff, v. CANRON, INC., d/b/a Tamper, Defendant.

546 F. Supp. 589

PLASSER AMERICAN CORPORATION, Plaintiff, v. CANRON, INC., d/b/a Tamper, Defendant.

Civ. A. No. 75-1932-5.

United States District Court, D. South Carolina.

April 23, 1980.

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

John Gregg McMaster, Tompkins, McMaster & Thomas, Columbia, S.C., Alfred H. Plyer, Jr., Kinzer, Plyer, Dorn & McEachran, Chicago, Ill., for plaintiff.

Charles W. Knowlton, Boyd, Knowlton, Tate & Finlay, Columbia, S.C., Robert E. Clemency, Michael, Best & Friedrich, Milwaukee, Wis., for defendant.

FINDINGS OF FACT AND CONCLUSIONS OF LAW

HEMPHILL, District Judge.

This patent infringement action is lodged pursuant to the patent laws of the United States, and is before this court on the jurisdictional basis of Title 28, Section 1338(a).¹ Plaintiff filed the Complaint on July 30, 1975, seeking a permanent injunction against Defendant's alleged infringement of two of Plaintiff's patents, an accounting for damages from same, treble damages, and costs. Defendant has denied the allegations and seeks costs and attorneys' fees on grounds that Plaintiff's patents should be declared invalid and noninfringed. Trial in this matter was preceded by years of discovery and motions, but the case finally came before this court for a nonjury trial on June 18, 1979. The trial lasted one week, and the parties were asked, in lieu of final argument, to present proposed findings and conclusions to this court prior to oral argument. Oral arguments on this matter were held in Rock Hill February 5, 1980, and two demonstrations of commercial machines manufactured by the parties were held for the benefit of this court. The matter is now ripe for decision, and this court will consider, first, the validity of Plasser patents, and second, if necessary, whether they have been infringed. Damages need not be determined at this time as the court bifurcated the damages issue from that of liability. Accordingly, after hearing the testimony, reviewing the file, and considering the entire record, upon the credible evidence before it, this court publishes its findings of fact and conclusions of law.

BACKGROUND FACTS

Plaintiff, Plasser American Corporation (Plasser) is a Delaware corporation² which is related by common ownership to one or more Austrian companies, all of which carry the name `Plasser' (Plasser-Austria). Defendant, Canron, Inc. (Canron), is a New York corporation having a regular and established place of business in West Columbia, South Carolina.

Plasser is the owner of the two patents in suit which concern mobile track maintenance equipment which are capable of correcting railroad track by vertically leveling it to the desired height and horizontally aligning it to the desired positions. The first patent, No. 3,425,360, entitled, "Mobile Track Correcting Machine" was issued in the United States on February 4, 1969 after being filed on January 12, 1966, and is based upon two Austrian priority applications.³ The second U.S. patent, No. 3,494,297, is called a "Mobile Track Maintenance Machine" and was issued on February 10, 1970. It was originally filed in the United States on October 18, 1965 and is based upon three Austrian priority applications.⁴ The accused machines are known as Canron's "Torsion Beam Machine", first offered for sale in the United States in the fall of 1974, and the Mark III Machine which was first manufactured and/or offered for sale in the United States in March, 1977.

Plasser and Canron are world-wide competitors in railroad track maintenance equipment. Maintenance of the roadbeds in the U.S. has been sadly neglected in recent years and a great deal of money is being put into upgrading the quality of roadbed maintenance and the "accuracy" of the track. The parties are competitors in providing fast, efficient, fully automated maintenance equipment.

Normally railroad track gets out of line, both in a vertical and horizontal plane, due to traffic moving over it (Tr. 32, Ex. 153). Periodically the track must be corrected and brought back into proper vertical and horizontal alignment, otherwise the speed of moving traffic has to be reduced, which causes an increase in freight rates, etc. (Tr. 46-48). Plasser and Canron, among others, have been active in the development of new technology in this field for the last 25 years or so.

The subject matter of this controversy is concerned with railroad maintenance equipment, known as "Tampers", which force the "ballast" (stones) under the ties so that the ties, and therefore the track, will be fully supported (Tr. 30-34, Exs. 153, 154A). During the years of the early and mid-1960s, tampers had been automated to a point that they included devices for automatically leveling or grading the track in a vertical direction to bring the rails up to an accurate level (Tr. 38, Ex. 157). During these years it was conventional to follow the tamper with a separate aligning device which was constructed to correct deviations and curves of a horizontal nature in the track. The standard of reference for correcting the track was a horizontal reference line, usually an elongated wire extending down the track from the machine and connected at each end to buggies which control the track-moving device (Exs. 158, 159). At each deviation the track was brought back to a precise accurate relationship relative to the reference line. These track moving machines used one or more ballast-engaging shoes with spikes on the bottom thereof to dig down into the ballast for support, at which time a lateral thrust⁵ was applied against one rail or the other, by its cylinder that extended from the ballast-engaging shoe against the rail so that the aligning reaction was taken by the ballast through the shoe. This ballast-engaging shoe was referred to at trial as a "ballast anchor" (Ex. 158).

However, there were problems with this approach of having one machine follow another. The difficulty was that the aligning machine following behind tended to spoil the accurate level that the tamper ahead of it had just applied to the rails (or vice versa) (Tr. 46-48). If both the raising and aligning could be done at the same time, and the ties fixed while the rails were held in accurate position, both vertically and horizontally, the fixed position would be much more accurate than when the two operations were done separately. Also of benefit would be the savings in manpower and time of having one machine replace two. Furthermore, a primary objective was to produce work that was permanent, the theory being that once the track was fixed in a permanent position, its accuracy would last longer (Tr. 46, 47). The desirability of creating one machine to do this was apparent, but how to do it was another matter. In the 1960-64 period the inventor of the '360 and '297 patents in suit, Mr. Theurer, made several unsuccessful attempts to develop a combined machine to solve the problem (Tr. 50-58). In Theurer's first attempt he attached a frame to the rear of the standard leveling tamper. On this frame he placed tools which extended on each side of the track and were inserted into the ballast opposite the ends of the ties. The ballast was then compacted against the end of the ties to force the ties and the track sideways, while the reaction of the aligning force was taken by a ballast-engaging shoe positioned between the ties and rails (Exs. 21, 74, 98, 99, 160, Tr. 50-52). This first attempt was not successful because the aligning force was taken by the ballast through the ballast-engaging shoe. The shoe did not properly or adequately absorb the aligning force (Tr. 52).

On his second attempt, Theurer cantilevered the tools of the first attempt on a girder from the rear end of the leveling tamper so that a ballast shoe was not used (Tr. 53, Ex. 161). However, because the tools engaged the ballast instead of the rails, and because the cantilevered arrangement tended to twist or skew the frame of the leveling tamper on the rails, this attempt was also unsuccessful (Tr. 53). Mr. Theurer tried again by using cylinders on the tamper to pivot a boom extending from the rear of the leveling tamper. Cantilevered on this boom were a rail clamp and vibrator which moved the track left or right, when the boom was so pivoted (Exs. 3, 162, Tr. 54). However the aligning force applied to the track behind the tamper tended to turn or skew the tamper frame on the rails in this attempt also, thus it was unsuccessful (Tr. 55).

In his fourth attempt Theurer mounted a cantilevered boom in front of the tamper with rail clamps and aligning cylinder on the end thereof (Exs. 163, 234, Tr. 55). This fourth attempt was not successful because applying the aligning force on a cantilever in front of the machine tended to turn or skew the frame of the tamper (Tr. 56).

During this period the competition was also attempting to solve the problem of a combined machine. In 1964-1965, Canron introduced its "Autoliner" (Exs. 20, 162, 214, 214A, 215, 215A, 216, 260, 261), which was a combination of Canron's standard "Autojack" tamper with a lining cylinder and ballast-engaging shoes in front (Ex. 164, Tr. 58-59). The Autoliner had enlarged jack shoes especially constructed to transmit the lining reaction to the ballast rather than to the rails (Tr. 724, 725). The lifting reaction was also taken by the ballast-engaging shoes (Tr. 724, 725).⁶ The Autoliner had the disadvantage that the ballast-engaging shoes rested on the shoulder of the roadbed, the ballast, which made the machine unstable (Tr. 963-4). Because the ballast on the shoulder tended to be loose, the ballast-engaging shoes could not hold the machine frame still which caused the accurate lining to be lost. Also, at high elevations, the Autoliner tended to exert extreme force on the piston rods and also had a tendency to slide down when lining toward the outside of curves (Tr. 964). Further, the ballast shoes had to be reconstructed by the addition of downwardly...