Robertson Rock Bit Co. v. Hughes Tool Co., 12690.

• Decision Date: 27 September 1949
• Docket Number: No. 12690.,12690.
• Citation: 176 F.2d 783
• Parties: ROBERTSON ROCK BIT CO., Inc., et al. v. HUGHES TOOL CO.
• Court: U.S. Court of Appeals — Fifth Circuit

176 F.2d 783 (1949)

ROBERTSON ROCK BIT CO., Inc., et al. v. HUGHES TOOL CO.

No. 12690.

United States Court of Appeals Fifth Circuit.

August 13, 1949.

Rehearing Denied September 22, 1949.

As Amended September 27, 1949.

R. C. Milling, New Orleans, La., Floyd H. Crews, New York City, Harvey W. Mortimer, New York City, for appellants.

Robert F. Campbell, Houston, Tex., Geo. I. Haight, Chicago, Ill., Edward A. Haight, Chicago, Ill., John Humphrey, Wichita Falls, Tex., for appellee.

Before HUTCHESON, SIBLEY and WALLER, Circuit Judges.

HUTCHESON, Circuit Judge.

Appellee, Hughes Tool Company, plaintiff below, manufactures and for many years has manufactured and sold by the tens of thousands rotary drilling bits used extensively in the drilling of oil wells.

Appellant, Industrial Manufacturing & Tool Co., was organized, by Colin T. Robbertson, in March, 1947, and, until going out of business a few months afterwards, because sued by Hughes, it manufactured about 200 bits of like kind with those Hughes now manufactures.

Appellant, Robertson Rock Bit Company, Inc., organized by Robertson after, and because of, Industrial's going out of business, also engaged in the manufacture of a like bit, making about 250 of them in all.

Defendant, Colin T. Robertson, has been the prime directing force behind the activities of both of the defendant companies, particularly as regards the practices claimed as infringing.

Plaintiff, alleging that the manufacture by defendants of this type bit infringed designated claims of four patents¹ owned by it, and that defendants had converted, and were continuing to convert, some of the bits, sued for patent infringement and conversion, and for an injunction restraining both.

The court finding validity, infringement, and conversion and against the defenses of want of title, misuse of patents and unclean hands, held valid and infringed all of the claims in suit, granted an injunction against further infringement and conversion, found unnecessary the appointment of a master to assess damages, and gave judgment² accordingly.

Here, presenting a sweeping attack upon the trier and the judgment, appellants assail the trial as inadequate and the judgment as erroneous in that: plaintiff's title to three of the patents, Fletcher, Scott, and Garfield and Scott, is insufficient; all of the patents are invalid for complete anticipation by, or want of, invention over named patents; there was a general misuse of patents; and there was noninfringement as to most of the claims in suit; and nonconversion of any of plaintiff's bits.

Urging upon us that Hughes has obtained many successive patents for the same thing, has filed many unfounded infringement suits,³ has pretended to lease instead of sell its bits, and then threatened and sued for conversion persons who were merely exercising their right to repair them, appellants insist that Hughes has thereby acquired and, for many years, has obtained and continued an illegal and oppressive patent monopoly.

Citing as anticipation of the patents in suit, many patents, including some issued to Hughes, and calling to our attention many suits brought by Hughes under its patents, appellants insist that the time has come to declare invalid the patents sued on and thus to call a halt to these unjust and monopolistic practices.

Turning first to the general defenses applicable to all of the patents, misuse thereof and unclean hands, and of insufficient title applicable to all of them except Scott & Garfield, the three cone bit patent, we have no difficulty in reaching the conclusion that these defenses are without merit.

As to the leasing agreements and the practices of recovering used bits under them, the district court properly held them valid.

Aside from the fact that they have been, and are being used extensively by other manufacturers for handling products such as the plaintiff's, the evidence presented by Hughes shows that the method is practical, reasonable, and completely fair. In areas where drilling is being carried on and where the Hughes bits are used, field crews pick up all used bits and all worn out bits and examine them to see if there is any wear or unique feature in them which would require their being returned to the Houston laboratory. Many of these bits were returned to the Houston laboratory and were then examined in order that future bits might be designed in such manner that flaws appearing in the used bits would not again occur.

As to the claim of alleged misuse of patents in previous litigation, we find no more in it than the district judge found. It is quite plain that if it were sustained, it would amount to a holding that persons making bona fide claims against other per sons for violation of their property rights in patented articles could not, by suit and threats of suit, obtain relief from those violations.

We agree, too, with the district court, that the claim that plaintiff failed to show title to patents No. 2011084 and No. 2030442 is completely without substance. If appellants were right in their claim that the legal title was not properly vested in plaintiff, this would not avail them, for the record leaves in no doubt that plaintiff was the real, the beneficial, owner. But the record does not sustain appellants, even on this technicality, for the instruments in evidence clearly disclose that under Texas law the legal, as well as the equitable, title became vested in plaintiff. Burkburnett Refining Co. v. Ilseng, et al., 116 Tex. 366, 292 S.W. 179; Oklahoma Construction Co. v. Comm., 5 Cir., 153 F.2d 770.

We thus come to the issues of infringement and validity.

As to infringement, there is neither a frank admission, nor a frank denial, by all of the defendants, but a sort of "You said it, you prove it", half hearted denial by some of the defendants as to all of the claims, and by some of them as to some of the claims of all of the patents. That there was, however, infringement of some of the claims of some of the patents by some of the defendants is not seriously denied.

Defendant Robertson's testimony as to his knowledge of, and acquaintance with, Hughes' patents, and that the structures made under his direction and procurement were deliberately and carefully made with the intention of competing with Hughes, upon the advice of unnamed counsel that these structures were not covered by valid patents, when taken with the vigor of his defenses of anticipation of and lack of novelty and invention in the patents in suit, makes it clear that the twin like resemblances between plaintiff's and defendants' structures was not accidental. Indeed, the points of difference relied on by appellants as saving their structure from infringement are so finely drawn, so immaterial, so lacking in substance, such hair splitting as to be no more than camouflage to conceal or soften the starkness of appellants' deliberately planned piracy in the event the legal opinion on which they acted was not correct and it should turn out that the copied structures were not in the public domain.

Concerning ourselves, therefore, no further with the issues of infringement, we turn to the vital issues in the case, whether the patents are invalid for anticipation and want of invention.

The manufactured structures of both plaintiff and defendants may here be described generally as being rotary drilling bits having a base section from which three strong metal arms extend downward and outward. From the ends of these arms, shafts depart at an angle, still in a downward direction but in a path so that the three shafts, if extended, would converge at the center line of the bit. Rotating on these shafts are three cone-shaped cutters having teeth set in circumferential pattern. These cutters run on the shafts with the aid of bearings which serve to fix the cones on the shaft and also to take both lateral and cross stress. While at one time the bearings were lubricated by means of a special oil lubricator, the patent on which has been the subject of much litigation, the bearings on the structures in suit are lubricated by drilling fluid which is continually passed through the hole. The teeth on the several cutters are so placed that they interfit with the teeth of each of the other cutters without touching. Thus, in the drilling operation, as one portion of each cutter is scraping or chipping along the bottom of the hole, other portions are interfitting with the other cutters.

One of the patents in this litigation, Scott & Garfield, No. 1983316, 12-4-34, is for the interfitting three-cone rotary drilling bit. The structure of this bit is identical with that described as the manufactured structure in the foregoing paragraph except that this patent does not cover the bearing features. It covers a device the three cutters of which will chip or scrape along the bottom of the hole without tracking except for the outer row of teeth of each cutter. It also provides, through the interfitting feature, for self-cleaning teeth. The three cones make a uniform base for distribution of the weight in drilling, reducing bounce and lengthening the cutting life of the individual bit.

When the three-cone bit with interfitting teeth was first used, fixed-bushing type bearings were employed on the cutter shafts. Arrangements of rolling bearings with and without built-in lubricators have also been employed in various stages of development of drilling bits. These efforts proving not entirely successful, in 1935 and 1936, two of the three patents now remaining in suit, F. L. Scott, No. 2011084, 8-13-35, and Scott & Garfield, No. 2030442, 2-11-36, were granted. These patents were combination patents, describing and claiming particular structural arrangements deemed most advantageous in the art of deep drilling, including the use of rolling bearings, both ball and cylindrical. The later of these patents had as its object improvements on the the earlier Scott patent,⁴ No. 2,011,084....