Railex Corporation v. Speed Check Co.

• Decision Date: 10 April 1972
• Docket Number: No. 71-1558.,71-1558.
• Citation: Railex Corporation v. Speed Check Co., 457 F.2d 1040, 173 U.S.P.Q. 513 (5th Cir. 1972)
• Parties: RAILEX CORPORATION, Plaintiff-Appellant, v. The SPEED CHECK CO., Inc., Defendant-Appellee.
• Court: U.S. Court of Appeals — Fifth Circuit

457 F.2d 1040 (1972)

RAILEX CORPORATION, Plaintiff-Appellant, v.The SPEED CHECK CO., Inc., Defendant-Appellee.

No. 71-1558.

United States Court of Appeals, Fifth Circuit.

April 10, 1972.

Charles M. Kidd, Atlanta, Ga., John M. Calimafde, Sandoe, Hopgood & Calimafde, Marvin N. Gordon, New York City, for plaintiff-appellant.

Henry M. Hatcher, Jr., Hatcher, Meyerson, Oxford & Irvin, Atlanta, Ga., for defendant-appellee.

Before WISDOM, COLEMAN, and SIMPSON, Circuit Judges.

WISDOM, Circuit Judge:

Plaintiff-appellantRailex Corporation and defendant-appelleeThe Speed Check Company, Inc. are competitors in the business of manufacturing conveyors for the textile industry.Railex sued Speed Check for the alleged infringement of Railex's patent on a conveyor used for the selective dispatching of garments.From the district court's decision holding the patent invalid and not infringed, this appeal results.We affirm.

I.

Railex holds PatentNo. 3,118,531.¹The patent describes a system for conveying and dispatching garments or laundry selectively to any one of several stations located throughout a plant.In a laundry or dry cleaning plant several distinct operations may be performed on a garment during the process of cleaning.Similarly, different fabrics may be cleaned by distinct methods or with various cleaning agents.Each operation will take place at a different location within a single plant.The patented system facilitates the transporting of garments to appropriate locations within the plant and the selective discharge of the garments at the appropriate location.

The patented conveyor-dispatcher consists of a chain of links, all substantially identical in shape.Each link is flat and elongated.The links are connected to each other to form an endless moving belt.The lower part of the link consists of a series of hook-like fingers at graduated levels used for the carrying of garments.Each hook level represents a specific station within the plant.At each station there is a rod mounted at the precise level of the appropriate hook which dispatches the garments for that station.Each link is approximately one foot long and has hooks to serve six stations.A worker can place a garment on a hook and cause the garment to be conveyed to a particular station in the plant and automatically dispatched at that station.The operator always has a link in front of him, since the links are interconnected and form the conveyor belt, and can easily choose the correct hook which corresponds with the desired station.

On October 7, 1964, Railex sued Speed Check for the alleged infringement by Speed Check of the conveyor-dispatcher patent.Speed Check denied infringement and asserted that the Railex patent was invalid in view of the prior art and because Speed Check's president was allegedly the inventor of the patented system.The action was tried from October 14 through October 17, 1969.On December 11, 1970, the district court issued an "Order", including findings of fact and conclusions of law, holding the patent invalid and the patent not infringed.Railex appealed.

II.

At the outset, we meet Railex's contention that the district court's finding should not be reviewed under the clearly erroneous standard of Rule 52.²Railex points out that the district judge waited until fourteen months after the conclusion of the trial to issue his ruling.The district judge's findings were adopted, almost verbatim, from proposed findings submitted by Speed Check at the request of the judge.Railex argues that in these circumstancesthe district court's findings "should not be accorded that respect normally accorded findings under Rule 52".

The clearly erroneous standard of review is applicable to findings of fact in a patent case.SeePhillip's Petroleum Co. v. Sid Richardson Carbon & Gasoline Co., 5 Cir.1969, 416 F.2d 10, 12;American Seating Co. v. Southeastern Metals Co., 5 Cir.1969, 412 F.2d 756, 758.Although, as we have stated, "findings and conclusions which represent the independent judicial labors and study of the district judge are more helpful to this Court", Kinnear-Weed Corp. v. Humble Oil & Refining Co., 5 Cir.1958, 259 F.2d 398, 401, "nevertheless, the same test is applied to findings, whether the court prepared them or adopted those submitted by counsel".Edward Valves v. Cameron Iron Works, 5 Cir.1961, 289 F.2d 355, 356.In Louis Dreyfus & C. I. E. v. Panama Canal Co., 5 Cir.1962, 298 F.2d 733, we discussed, at length, the contention that findings adopted by the court from proposed findings submitted by the parties should not be reviewed under the clearly erroneous standard.Noting that "in analyzing the significance that should be attached to the adoption by the trial judge of findings drafted by one of the litigants, common sense may be a better guide than ideal decision-making", we concluded:

We disapprove of the practice of a trial judge\'s uncritically accepting proposed findings, but this unfortunate practice does not erase the "clearly erroneous" rule. . . .When substantial evidence supports a finding it will not be found clearly erroneous merely because the expression of the finding was adopted from a proposal by counsel.

See alsoLorenz v. General Steel Products Co., 5 Cir.1964, 337 F.2d 726; 2B Barron & Holtzoff, Federal Practice & Procedure, Rules Ed., § 1124, p. 494;6 Moore's Federal Practice¶ 52.063, pp. 2664-2665.The Supreme Court is in accord."Findings, though not the product of the workings of the district judge's mind, are formally his; they are not to be rejected out-of-hand, and they will stand if supported by evidence."United States v. El Paso Natural Gas Co., 1964, 376 U.S. 651, 656, 84 S.Ct. 1044, 1047, 12 L.Ed.2d 12, 17.

On this record, we find no reason to discredit the district judge's assertion that his ruling was made "after considering . . . the issues and the evidence" and that he"considered the pleadings, briefs, proposed findings of fact, proposed conclusions of law and arguments of both parties" before issuing his order.Nor can we say that various errors in the rulings indicate a lack of understanding of the case on the part of the district judge.Although, as we stated in Edward Valves,we disapprove of the practice of unconditionally adopting findings submitted by one of the parties to the litigation, we affirm our holdings that the findings must be tested by the standard of review mandated by Rule 52.

III.

Federal statutes delineate specific requirements for patentability.Relevant to the present case are the requirements that the patented invention be "new and useful"³ and "non-obvious".⁴In addition, a statutory presumption governs this Court's review of patent validity."A patent shall be presumed valid.The burden of establishing invalidity of a patent shall rest on a party asserting it."35 U.S.C. § 282.⁵The presumption of patent validity is rebuttable.See35 U.S.C. § 282;Radio Corp. of America v. Radio Engineering Laboratories, 1934, 293 U.S. 1, 55 S.Ct. 928, 79 L.Ed. 163.

The courts, however, have not distinguished themselves for consistency in their determination of the quantum of proof necessary to rebut the presumption.⁶ . . .We do not attempt to resolve this apparent inconsistency.Rather, we state that the presumption of patent validity may be rebutted only by a quantum of proof—whether it be called clear and convincing or beyond a reasonable doubt—which is greater than a mere preponderance of the evidence.One who seeks to rebut the presumption bears a heavy burden.

Hobbs v. United States, 5 Cir.1971, 451 F.2d 849, 856.

The district court held that the Railex patent was invalid because (1) the patented system was anticipated by the prior art, see35 U.S.C. §§ 101-102, (2) the patented system did not result from "invention", see35 U.S.C. § 103, and (3) the patented system was not invented by the patent holder, see35 U.S.C. § 102.

Railex argues that the conveyor-dispatcher system represents a significant improvement over the prior art and is, thus, patentable under the statutory standards.The most pertinent prior art is, according to Railex, the chain-hook dispatcher, a motor-driven chain carrying depending hooks spaced several feet apart.Railex contends that this device is noisy because of many moving parts, limited in its capacity because of the spacing between hooks, difficult to load because the relationship between hook and station is difficult to discern, and inefficient because of the wasted time inherent in the gaps between hooks.The system patented by Railex, because of alleged improvements on prior art, is not noisy, allows for increased capacity, is easily loaded, and is more efficient.This is so, Railex argues, because of the duality of function performed by the links—each link embodies a complete set of fingers and constitutes part of the chain—and the interconnection of the links.The noise is reduced because there are fewer moving parts; capacity is increased because there are more, closely-spaced hooks; loading is easy because the operator can easily discern the hook corresponding to the desired station; and efficiency is increased because the operator always has one of the interconnected hooks before him.As appellant—correctly, we think—asserts:

The heart of the patented invention is in the configuration of the links and the interconnection between them.The links perform the dual function of constituting the chain, as there is no interconnecting member between them, nor are the links carried by any other member; the links also serve the function of carrying the garments on one of the fingers to the particular station identified by the level of that finger.The link is free of any moving parts and is, therefore, noiseless.

Further, by reason of its unique shape, each link includes a complete series of fingers which can be readily apprehended by the operator at a single glance.The operator is thus provided

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