Scaramucci v. Dresser Industries, Inc.

• Decision Date: 28 August 1970
• Docket Number: No. 255-69.,255-69.
• Citation: 427 F.2d 1309
• Parties: Domer SCARAMUCCI and William A. Moore, Appellants, v. DRESSER INDUSTRIES, INC., Appellee.
• Court: U.S. Court of Appeals — Tenth Circuit

427 F.2d 1309 (1970)

Domer SCARAMUCCI and William A. Moore, Appellants, v. DRESSER INDUSTRIES, INC., Appellee.

No. 255-69.

United States Court of Appeals, Tenth Circuit.

June 5, 1970.

Rehearing Denied August 28, 1970.

Jerry J. Dunlap, Oklahoma City, Okl., for appellants.

Howard E. Moore, Dallas, Tex. (Crowe, Dunlevy, Thweatt, Johnson & Burdick, James A. Peabody, and Ben L. Burdick, Oklahoma City, Okl., on the brief), for appellee.

Before MURRAH, HILL and HICKEY, Circuit Judges.

HILL, Circuit Judge.

Domer Scaramucci, owner of patents 3,266,384 (hereinafter '384) and 3,266,386 (hereinafter '386) and William Moore, d/b/a Bell Rubber Company, exclusive licensee of Scaramucci under these patents, instituted this suit claiming that Dresser Industries has and continues to infringe the aforesaid patents. A second cause of action for unfair competition is based on allegations that Dresser Industries illegally delayed issuance of patents '384 and '386 by instituting interference proceedings subsequent to the latter's application for a patent on a similar device. Dresser answered denying (1) the validity of patents '384 and '386; (2) the infringement of those patents; (3) the claim of unfair competition; and further counterclaimed (1) for a declaratory judgment that '384 and '386 were invalid and not infringed; (2) for a judgment that appellants had infringed patent 3,352,212 (hereinafter '212) owned by Norman W. Read; and (3) for a judgment that appellants were acting in violation of the antitrust laws by attempting to enforce a fraudulently obtained patent.

The controversy was tried to the court without a jury. After entering extensive findings of fact the court concluded: (1) that the '384 and '386 patents were invalid and not infringed; (2) that the cause of action for unfair competition be dismissed; (3) that patent '212 was not infringed; and (4) that the cause of action for antitrust violations be dismissed. Scaramucci and Moore appeal from (1) and (2).

The '384, '386 and '212 patents in controversy all relate to what is known in the art as "all rubber" swab cups. These devices are used in swabbing tubing or casing of an oil or gas well when it is being completed or worked over. In its most rudimentary design, a swab cup consists of an annular piece of rubber mounted on a metal column. On the annular piece of rubber are resilient lips which are molded outward from the center piece to form a seal with the wall of the tubing. In the swab cups in controversy the annular piece of rubber is of just slightly lesser radial diameter than the sealing lips and forms a support for the respective sealing lip. Whether the swab cup is all rubber or has wire reinforced resilient lips, its fundamental operation is to elevate fluid out of a well. To accomplish this two or more swab cups are mounted on a fluted mandrel and the assembly is lowered on a cable into a well containing oil or gas. As the assembly is lowered through the liquid the swab cups slide upward on the mandrel, allowing the liquid to bypass up through the openings between the reinforcing portions of the swab cups and the flutes in the mandrel. A second method of providing for free passage of fluid as the devices are lowered is to use swab cups smaller in diameter than the inner dimension of the well tubing, thereby allowing the fluid to flow around the outer edge of the assembly. When the unit reaches the desired depth the cable is pulled taut and rewound, causing the swab cup assembly to ascend.

As the unit begins its ascent, the mandrel is raised a short distance through the swab cups and the lower swab cup seats on the lower end of the mandrel to close the flute opening. As the column of liquid above the assembly is raised, the sealing lips on the swab cups are forced down and out into a sealing configuration with the wall of the tubing. By lifting the oil or gas in such manner, a suction condition is created beneath the swab cup assembly which hopefully will cause the well to flow.

Due to varying geological conditions and completion techniques, a multitude of swab cups have been designed, patented and manufactured. The wire reinforced cups are desirable because of the heavy loads — from 1500 to 2000 feet of fluid — they will lift. Their strength and durability stems from the wires embedded in the sealing lips. Their weakness is in the tendency to lodge in coupling recesses, causing delays while they are "fished" out. All rubber cups are particularly desirable for the plastic and tubingless completions because, unlike wire reinforced cups, they present no problem if they are stripped off due to the excessive loads. Also, if the load is not too excessive they will "dump" or allow fluid to bypass until a maintainable load is reached. The disadvantage here is in the light lifting capacity which requires repeated trips to swab deep wells.

In the late 1950's, well operators began to demand a cup which combined the best features of the wire reinforced and all rubber cups. That is, they wanted an all rubber cup that would lift greater volumes of liquid. This customer demand was related to Bell Rubber Company and its swab cup designer, Scaramucci; to the Guiberson Corporation Dresser Industries' predecessor and Read, its swab cup designer; and to Oil States Rubber Company and its swab cup designer, Waldrop. The results produced by all three inventors are structurally and functionally akin. Each apparently used the basic design of the most popular all rubber cup and improved on it by providing a support beneath the sealing lip which would support the lip and prevent it from turning over and dumping fluid. Waldrop was the first to patent his version of the new concept. In March, 1961, Bell Rubber Company marketed Scaramucci's XEL cup. After the XEL cup was on the market, Read developed, tested and marketed the TA cup.

On November 24, 1961, Scaramucci filed an application for the '384 patent. In its basic design, the invention comprised an annular sleeve of resilient material bonded about a metal cylindrical member, and an annular, flexible lip of resilient material integrally formed with the sleeve at the upper end thereof and extending radically outward toward the tubing wall. The resilient sleeve has a thick, load-carrying portion of lesser diameter than the minimum internal diameter of the tubing string which is, functionally, a support for the flexible lip. The spacing of the flexible lip from the load-carrying support is such that when the swab assembly is fully loaded hydrostatically, the lip is biased into sealing engagement with the tubing wall, and is simultaneously placed in abutting contact with the load-carrying part of the resilient sleeve. The support body thus reinforces and supports the lip to prevent the flexible lip's inversion resulting in a dumping of fluid.

While the '384 application was pending, Waldrop's patent No. 3,023,062 (hereinafter the Waldrop Patent) was issued and was cited by the Examiner as a reference to reject the Scaramucci claims. Scaramucci copied the claims from the Waldrop Patent and requested declaration of an interference to determine priority of invention. Scaramucci was unsuccessful in the interference and Waldrop was awarded priority. Scaramucci then amended his claims to distinguish his device from the Waldrop Patent. The claim for novelty in '384¹ is the provision for a flexible sealing lip with a resilient support thereunder, which support is longer, when measured on the outer surface parallel to the tubing wall, than the radial width thereof, creating what Scaramucci calls a "column." It is claimed that the support reinforces the flexible sealing lip when under a load, and expands and "barrels" outward into sealing engagement to form a secondary seal with the pipe so as to prevent any dumping action. The only way to retrieve the mechanism when under excessive load is to strip off the sealing lip and support body.

Scaramucci's patent '386² is a claimed improvement over '384 and consists of manufacturing the swab cup so the sealing lip, when in a relaxed condition, is of less diameter than the inner diameter of the tubing.

While applications for patents '384 and '386 were pending, Read, on May 3, 1962, filed an application which eventually matured into '212. The Dresser TA cup (Read's claimed invention) and the XEL cup are very similar in design and function. The only apparent significant difference is that the support "columns" in the XEL cup are of substantially the same vertical length, whereas the support bodies in the TA cup are of increasing vertical length from the uppermost support to the lowermost support. The Patent Office cited the Scaramucci patents '384 and '386 as references to the Read claims and interferences were declared on patents '384, '386 and '212. Read sought dissolution on the grounds that Jenks Patent No. 214,919 and Crickmer Patent No. 2,358,908 read on Scaramucci's claims. Scaramucci's motion to dissolve urged that Read's claims were not disclosed in Figures I-XII of the original application and that none of the Scaramucci counts read on Read. The Examiner determined that two of the Scaramucci counts read on Read;³ that one of Scaramucci's counts was unpatentable over Waldrop;⁴ and that neither Jenks⁵ nor Crickmer⁶ read on the '384 claims. The Commissioner of Patents denied appellee's petition for review because there was no manifest error in the Examiner's decision.

The rules of law which govern the case are well settled in this Circuit. Although the ultimate question of patent validity is a legal question for the court to decide,⁷ it involves factual issues such as anticipation of prior art and obviousness.⁸ Those factual questions, when decided in findings by the trial court, are reversible on appeal only upon a finding of clear error.⁹ A regularly issued patent is presumed valid and where the Patent Office has considered prior art in accepting or rejecting an allegation...