Rengo Co. Ltd. v. Molins Mach. Co.

• Decision Date: 20 July 1981
• Docket Number: 80-2557,Nos. 80-2556,No. 80-2556,No. 80-2557,80-2556,s. 80-2556
• Citation: 211 USPQ 303,657 F.2d 535
• Parties: , 211 U.S.P.Q. 303 RENGO CO. LTD. and Simon Container Machinery Limited, Appellants inv. MOLINS MACHINE COMPANY, INC., Appellant in
• Court: U.S. Court of Appeals — Third Circuit

Page 535

657 F.2d 535

60 A.L.R.Fed. 534, 211 U.S.P.Q. 303

RENGO CO. LTD. and Simon Container Machinery Limited, Appellants in No. 80-2556 v. MOLINS MACHINE COMPANY, INC., Appellant in No. 80-2557.

Nos. 80-2556, 80-2557.

United States Court of Appeals, Third Circuit.

Argued March 23, 1981.

Decided July 20, 1981.

John D. Nies (argued), LeBlanc, Nolan, Shur & Nies, Arlington, Va., for Rengo Co. Ltd. and Simon Container Machinery Limited.

Edward C. Gonda (argued), Michael P. Abbott, Seidel, Gonda, Goldhammer & Panitch, P.C., Philadelphia, Pa., for Molins Machine Company, Inc.

Before ADAMS and GARTH, Circuit Judges, and DUMBAULD, District Judge. ^*

OPINION OF THE COURT

ADAMS, Circuit Judge.

This appeal requires us to decide the proper role for the patent law concept of "synergism," the proposition that to serve as the subject of an enforceable patent a combination of known elements must somehow exceed the sum of its parts. Additionally, we are faced with questions regarding the priority to be accorded a foreign patent application and the scope of disclosure in a domestic application. Because we believe that the district court which decided that the patent in question was not enforceable erred in imposing a synergism requirement, we vacate and remand.

I.

On August 27, 1974, the United States Patent Office issued Patent No. 3,831,502 ("the '502 patent") to plaintiff Rengo Co., Ltd., as assignee of the named inventor, Masatero Tokuno. The patented apparatus includes portions of a "corrugator," a machine that manufactures the three-ply paperboard from which the familiar cardboard box is made.

Production of corrugated paperboard begins with the introduction of three webs of paper into the machine. The machine initially corrugates (i. e., flutes) one web, and the flutes of the opposite surfaces of this sheet are glued to the two flat webs of single-ply paper. The resulting three-ply web then passes over a heating bed where the glue is set and dried. The paperboard next travels to the "slitter-scorer" complex. This series of instruments first slits the web along the running direction into two or more bands of selected width, and then, in the operation known as "scoring," imposes longitudinal creases on each of these strips in order to facilitate the subsequent construction of the boxes. Finally, the web passes to a rotary shear that cuts across the paperboard, producing box blanks of predetermined length.

By changing the pattern of slitting and scoring, a single corrugator can manufacture cardboard boxes of various sizes and configurations. Moreover, a corrugator may be equipped with more than one slitter-scorer unit. As a result, while one unit is in operation the other is accessible for adjustment to accommodate the next run. Before the development of the subject invention, an operator of a corrugator who desired to effect an "order change," i. e., a change in the slitting and scoring pattern, would use the rotary shear to make a transverse cut in the paperboard web. The portion of the web downstream of the transverse cut would pass through the slitting and scoring rolls then in operation. When the old order was completed, the portion of the web behind the point of severance would proceed to the slitting and scoring rolls arranged in the desired new pattern. An order change effected by this method requires the operator to stop the corrugator completely, or at least to slow the running of the paperboard web through the machine. A decrease in the productivity of the machine thus inevitably attends an order change.

The subject matter of the patent in suit was designed to improve the efficiency of conventional corrugators by performing the slitting and scoring operation without suspending or reducing the running speed of the web during an order change. The patented apparatus comprises a conventional rotary shear, located upstream of two conventional slitter-scorer units. The combination also contains a movable feeding plate that can direct the web to an upper path, which leads to one of the slitter-scorer units, to a lower path, which leads to the other slitter-scorer unit, or to an intermediate path, which flows between the two slitter-scorer units. To effect an order change, the rotary shear makes a single transverse cut in the web, and the feeder plate instantaneously diverts the leading edge of the severed web to the slitter-scorer not previously in use. The difference in conception between conventional corrugators and corrugators equipped with the patented device can be put simply: In the conventional device, the paperboard web travels along a single pathway; during order change, a new slitter-scorer unit moves into the path of the board to engage the web. The patented device, by contrast, changes the path of the web to meet the new slitting and scoring unit.

Rengo initially developed a corrugator capable of instant order change in Japan. It installed machines employing the new patented apparatus at two of its Japanese plants in January 1972, and filed Japanese patent applications in February and April of the same year. Rengo filed its application for an American patent in January 1973.

During the middle 1970's, the Langston Division of defendant Molins Machine Company, in response to market pressures and consumer demands, set about to develop a corrugator capable of performing instant order change. In 1976, two representatives of Molins visited Japan and while there observed the operation of a Rengo corrugator. In December 1977, Langston began development of corrugator apparatus similar to the device which Rengo had already patented. Like the Rengo mechanism, the Langston version achieved instant order change by diverting the flow of paperboard from one set of slitters and scorers to another. The principal difference between the two devices is that Langston employs only two flow paths, or "board lines," whereas Rengo utilizes three. Langston offered its instant order change system for sale in early 1978, and installed a prototype later that year at the Louisville plant of the Mead Corporation. Another corrugator employing the Molins double board line system went into commercial operation in December 1979.

A.

In August 1978, Rengo filed a complaint in the District Court for the District of New Jersey, alleging that Molins had infringed claims 1 and 24 of the '502 patent. In its answer, Molins denied infringement and requested that the court declare the '502 patent invalid and, in any event, not infringed. In addition, Molins asserted by way of a counterclaim that Rengo had violated the antitrust laws.

After a four day trial, the district court, finding the '502 patent invalid, entered judgment in favor of Molins. The court recognized that an inquiry into validity requires comparison of the patented device with the state of the art before the invention. In this case, the district court, in order to make the comparison, had first to determine whether the Japanese filing date, as opposed to the American filing date, should be considered the date of invention. After resolving this issue in favor of Rengo, the court nonetheless went on to hold the '502 patent invalid. The court's disposition of this issue rested to a considerable extent on its finding that the patented device did not demonstrate a "synergistic result."

Although an invalid patent cannot be infringed, the court next considered Rengo's infringement claims, reasoning that a resolution of these questions might expedite final disposition of the case if the court of appeals reversed the district court's ruling on validity. Finding that the Molins and Rengo machines were equivalent in means, operation, and result, the court held that the '502 patent, if valid, was infringed. Finally, the court considered and dismissed Molins' antitrust claim.

Rengo appeals from the court's finding that the '502 patent is invalid, while Molins cross-appeals from the court's determination that the patent, if valid, was infringed.

II.

Initially, we confront a potential barrier to our jurisdiction. Rengo predicated its complaint on a theory of infringement, as that term is defined in 35 U.S.C. § 271(a): "Whoever without authority makes, uses or sells any patented invention, within the United States during the term therefor, infringes the patent." ¹ At the time Rengo filed its complaint, however, Molins had done no more than advertise and solicit orders for its new instant order change apparatus; it had not yet begun the manufacture or sale of the equipment. Molins contends that its conduct at the time Rengo instituted the lawsuit did not rise to the level of infringement within § 271(a). A jurisdictional prerequisite to the maintenance of the infringement action was therefore lacking, and, Molins asserts, both the district court and this Court lack authority to adjudicate Rengo's claim.

Without deciding whether the district court had jurisdiction over Rengo's original cause of action, ² we conclude that the court had power to consider the issues of patent validity and infringement. Regardless of deficiencies in the complaint, Molins' assertion of a counterclaim, in which it requested the court to declare that the '502 patent was invalid and that it was not infringed, conferred jurisdiction on the district court over both questions.

The actual manufacture, use, or sale of an allegedly infringing device is not a condition precedent to a suit seeking declaratory relief against the holder of the patent. In order to maintain an action, it is sufficient that the potential infringer have the "immediate intention and ability to practice the invention." ³ In Wembley, Inc. v. Superba Cravats, Inc., 315 F.2d 87 (2d Cir. 1963), the plaintiff requested a declaration that the defendant's patent was invalid or, alternatively, that plaintiff's proposed use would not infringe the patent. Although the plaintiff had not yet begun production, the Second Circuit held that this,...