Preuss v. General Electric Co.

• Decision Date: 14 March 1968
• Docket Number: No. 174,Docket 31507.,174
• Parties: M. Rudolph PREUSS, Trustee in Bankruptcy of Crosby Teletronics Corp., Plaintiff-Appellee, v. GENERAL ELECTRIC CO., Inc., Defendant-Appellant.
• Court: U.S. Court of Appeals — Second Circuit

392 F.2d 29 (1968)

M. Rudolph PREUSS, Trustee in Bankruptcy of Crosby Teletronics Corp., Plaintiff-Appellee, v. GENERAL ELECTRIC CO., Inc., Defendant-Appellant.

No. 174, Docket 31507.

United States Court of Appeals Second Circuit.

Argued January 2, 1968.

Decided March 14, 1968.

John Hoxie, New York City (William S. Wolfe, Utica, N. Y., Davis, Hoxie, Faithfull & Hapgood, James W. Bock, Stephen B. Judlowe, New York City, of counsel), for defendant-appellant.

Hugh A. Chapin, New York City (Kenyon & Kenyon, Lloyd McAulay, New York City, of counsel), for plaintiff-appellee.

Before LUMBARD, Chief Judge, and MOORE and FRIENDLY, Circuit Judges.

MOORE, Circuit Judge:

The Parties

Plaintiff is the trustee in bankruptcy of Crosby Teletronics Corp., the sole owner of the patent at issue. Defendant is General Electric Co., Inc., a New York corporation.

The Issue

This is an action for infringement of United States Patent No. 2,851,532 issued to Murray Crosby on September 9, 1958 on an application filed with the Patent Office on April 21, 1953. The patent relates to a method of FM stereo radio transmitting and receiving. Plaintiff alleged that General Electric manufactured and sold FM stereo receiving, transmitting, and adapting equipment using devices and methods embodied in Crosby's patented invention. Defendant waived the defense of non-infringement by pre-trial stipulation. Thus, the only defense before the trial court, and now before us, was patent invalidity. The trial court found the patent valid. We reverse on the ground that Crosby's invention would have been obvious at the time of invention to a person of ordinary skill in the radio art. 35 U.S.C. § 103. As the Supreme Court has directed, we focus on several factual inquiries:

"* * * The scope and content of the prior art are to be determined; differences between the prior art and the claims at issue are to be ascertained; and the level of ordinary skill in the pertinent art resolved. * * *" Graham v. John Deere Co. of Kansas City, 383 U.S. 1, 17, 86 S.Ct. 684, 694, 15 L.Ed.2d 545 (1966).

The Patent at Issue

Stereophonic sound is now familiar to all music listeners. In substance, two microphones record the performance, one from each side of the stage. The music is reproduced through two speakers spaced some distance apart — the left-hand speaker reproducing what has been picked up by the left-hand microphone, the right-hand speaker that which has been picked up by the right-hand microphone. This use of separate left (L) and right (R) channels makes the music produced at any particular point on the concert stage appear to emanate from a corresponding point in the listener's living room, creating a spatial or depth illusion — the live quality of the music.

Crosby taught a technique for full fidelity FM¹ stereo radio which was monophonically compatible. This means that while the listener with the stereo receiver hears the L channel from one speaker and the R channel from the other, the listener with only a monaural (non-stereo) receiver hears a balanced mixture of the two channels — the same sound he would hear if the program were being broadcast monophonically. Without this compatibility, the monaural listener would hear only one channel (either L or R), with its unbalanced emphasis on the music being produced on only one side of the stage.

Crosby achieved this compatibility by the use of a sum-and-difference matrixing, which he believed he had invented. This method electronically combines (matrixes) the L and R channels in such a way as to produce two new signals, the (L + R) signal and the (L - R) signal. The (L + R) signal is then broadcast in the usual fashion. The (L - R) signal is broadcast over a subcarrier superimposed on the same carrier wave. This is termed "subcarrier" multiplexing.² If the receiver is monaural, it only reproduces the (L + R) signal. However, in a stereophonic receiver the (L - R) signal on the subcarrier is also used. The two signals are put through a matrix, providing for the L signal for the left speaker and the R signal for the right speaker.³

An advantage of the sum-and-difference matrixing as used by Crosby is that it equalized the signal/noise ratio of the left and right channels. A certain volume of noise is inherent in all radio transmission; this can be particularly distracting where, as in non-matrix stereo systems, different amounts of noise can be heard in the two speakers. Crosby's invention balanced the noise. Furthermore, although it was not initially emphasized, the Crosby patent resulted in complete separation of channels over the full audio range. Only the L channel would be heard from the left-hand speaker, only the R channel from the other. Other systems, which, to conserve band width, as was certainly necessary in the AM field (e. g., the Boelens patent), restricted the audio range of one of the signals, yielded a mixed or monophonic sound over the audio range in which only one channel was broadcast. For example, if (L + R) was broadcast with an audio range of from 0 to 15,000 and if (L - R) was broadcast with an audio range of from only 0 to 5,000, then the channels would be separate from 0-5,000; from 5,000 to 15,000 (L + R) would be heard from both speakers.⁴

Scope and Content of the Prior Art

Implicit in the trial judge's opinion and findings of fact and law is the scope of the prior art — the field of radio communication. In establishing the content of this area, defendant introduced a number of patents. To constitute prior art, they must teach the invention with clarity and explicitness. Technical Tape Corp. v. Minnesota Mining & Mfg. Co., 143 F.Supp. 429, 435-436 (S.D.N.Y. 1956), aff'd 247 F.2d 343 (2 Cir. 1957). We need to discuss only three of the patents offered in evidence. The trial judge found their teachings clear enough for us to rely on them.

The German Patent No. 861,884 to Griese, applied for in 1950 and issued in 1953, taught a "subcarrier" type of multiplexing for FM stereo radio. No matrixing was used, however, and therefore there was no compatibility. By 1953, this "subcarrier" method was standard for transmitting two FM signals over the same radio wave. The British Patent No. 540, 185 issued in 1941 to Standard Telephones & Cables, Ltd. It taught the sum-and-difference matrixing to provide for monophonic compatibility in standard narrow channel AM broadcasting. Since the patent was for the AM field, the band widths were restricted, thereby providing less than full fidelity. However, the audio ranges transmitted over the two channels were equal. A "hybrid" style multiplexing was used. The United States Patent No. 2,698,379, based on a Netherlands parent application filed in 1951, issued to Boelens in 1954. Similar to the Standard Telephones patent, its teachings are more pertinent and comprehensive. Among other things, it taught the same matrix circuitry that would later be used in the Crosby patent. However, as with other AM patents, it restricted the frequency range on the second channel,⁵ naturally resulting see fns. 1, 4 and 8 in less than full fidelity, an unbalanced signal/ noise ratio, and incomplete separation of signals.

Level of Ordinary Skill

35 U.S.C. § 103 provides for a specialized reasonable man test for obviousness. In our case, this reasonable man follows a fortiori from the definition of the scope of the prior art; he is the man with ordinary skill in radio communication. Thus, our question: what would have been obvious to a reasonable radio engineer who, among other things, had the Griese, Standard Telephones, and Boelens patents in mind when he endeavored to solve the problem of how to achieve monophonic compatibility on FM stereo radio? Formal Fashions, Inc. v. Braiman Bows, Inc., 369 F.2d 536 (2 Cir. 1966).

Patent Validity

The trial judge found the invention nonobvious. We are aware of the dangers of slipping into the use of hindsight and of reading into the prior art the teachings of the invention. Graham v. John Deere Co. of Kansas City, supra at 383 U.S. 36, 86 S.Ct. 684. Nevertheless, the question of patentability is one of law. Graham v. John Deere Co., supra at 17, 86 S.Ct. 684; Great Atlantic & Pacific Tea Co. v. Supermarket Equipment Corp., 340 U.S. 147, 155, 71 S.Ct. 127, 95 L.Ed. 162 (1940). We have considered the Patent Office's determination, Ling-Temco-Vought, Inc. v. Kollsman Instrument Corp., 372 F.2d 263, 268 (2 Cir. 1967) and the trial judge's conclusion. Nevertheless, we find that the invention would have been evident to an engineer of ordinary skill in the radio field in 1953.

The trial judge placed great emphasis on the secondary, supporting issues. He did not focus on the inventive process so much as the after-the-discovery results and occurrences. He concluded that Crosby's results filled a real need in the industry. He bolstered this finding by emphasizing the acclaim accorded Crosby and the resultant commercial success of his invention. Although the issues the trial judge relied on may be appropriate for consideration, Ling-Temco-Vought, Inc. v. Kollsman Instrument Corp., supra at 269, they are not to carry too heavy a burden. Graham v. John Deere Co. of Kansas City, supra at 383 U.S. 29-30, 36, 86 S.Ct. 684. We place primary reliance on the technical facts of the inventive process; we think that the secondary issues relied on by the trial judge to reach an opposite conclusion either support our determination or are simply inconclusive.

(I)

Even if the problem which the trial judge thought Crosby had solved — how to achieve monophonically compatible stereo FM radio with full separation over the full audio range — was the problem see part III the industry needed solved see part II, Crosby's combination of known radio features would have been obvious to a skilled radio engineer in 1953. Crosby merely updated and upgraded the presently existing FM stereo system by adding the already developed (although he did not know it)...