Sims v. MACK TRUCK CORP., ETC.

• Decision Date: 16 October 1979
• Docket Number: No. 78-2516-78-2520.,78-2516-78-2520.
• Citation: 608 F.2d 87
• Parties: R. W. SIMS, Trustee and R. W. Sims Trust, Appellants in Nos. 78-2517/18/19/20, v. MACK TRUCK CORPORATION Mack Trucks, Inc., Appellant in No. 78-2516.
• Court: U.S. Court of Appeals — Third Circuit

608 F.2d 87

R. W. SIMS, Trustee and R. W. Sims Trust, Appellants in Nos. 78-2517/18/19/20, v. MACK TRUCK CORPORATION Mack Trucks, Inc., Appellant in No. 78-2516.

Nos. 78-2516-78-2520.

United States Court of Appeals, Third Circuit.

Argued August 8, 1979.

Decided October 16, 1979.

Jon A. Baughman (argued), Deborah F. Cohen, Stephen J. Sundheim, Pepper, Hamilton & Scheetz, Philadelphia, Pa., for appellant in No. 78-2516 and appellee in Nos. 78-2517-78-2520.

John A. Young (argued), Fort Wayne, Ind., for appellees in No. 78-2516 and appellants in Nos. 78-2517-78-2520; Stanley B. Kita, Howson & Howson, Philadelphia, Pa., co-counsel.

Before ALDISERT and WEIS, Circuit Judges, and DIAMOND, District Judge.^*

OPINION OF THE COURT

WEIS, Circuit Judge.

Changing the discharge point of a concrete mixer from the rear to the front of the truck results in definite advantages but does not raze the roadblock of nonobviousness required for patentability. We therefore reverse a district court finding of patent validity. We find jurisdiction also to review a companion count alleging conversion of trade secrets related to the construction of concrete mixers. Because that claim contains disputed matters of fact, we vacate a summary judgment entered in favor of the defendant.

By virtue of an assignment in 1965, plaintiffs R. W. Sims, Trustee, and the R. W. Sims Trust hold U.S. Patent No. 2,859,949 issued in 1958 to J. Jack Willard for a front-discharge concrete mixer. The pending action is based on allegations of infringement by defendant and an additional count of unfair competition. The district court entered summary judgment in favor of the defendant on the unfair competition count on February 9, 1978.¹

After a bench trial, the district judge upheld the patent, found that the defendant had infringed, and awarded double damages to the plaintiff, but denied attorneys' fees. The defendant appeals the infringement issues under 28 U.S.C. § 1292(a)(4). Plaintiffs cross-appeal the denial of the attorneys' fees and seek review of the summary judgment on the unfair competition claim.

The Willard patent describes a concrete mixer mounted on a truck chassis and used to deliver premixed concrete to a construction site. The more common truck in general use unloads the concrete from the rear. The Willard design, however, reverses the mixing drum so that its narrow discharge end is at the front rather than the rear of the truck. The drum is inclined upward toward the front so that the pour end is above the driver's cab. A portable chute is used to move the concrete from the drum to the particular spot where the construction is in progress.

The great advantage of the front-end discharge is that it allows the truck to be driven directly to the place where the concrete is to be poured without the necessity of backing into the area, as is required with vehicles of conventional configuration. Thus, the dangers of backing to the unloading site are eliminated, and by maneuvering the truck the driver can assist in the actual pouring of the concrete. In a modification added by plaintiff Sims, the driver may sit in the cab and shift the chute by means of hydraulic controls.

Willard first applied for the patent on July 18, 1955, but it was not granted until 1958. On November 14, 1955, Evan S. Pritchard filed an application for a front-discharge mixer of similar construction. In 1958 plaintiff Sims also considered applying but decided against it when he learned of Willard's patent. At first, the Willard truck met with little commercial success, and in 1965 it was assigned to the Sims Trust. Thereafter, plaintiffs successfully marketed licenses to a number of manufacturers.

Defendant considered the possibility of manufacturing front-end discharge trucks in 1963 and met with Sims at that time to discuss a possible licensing arrangement. Although Sims was not at that time the holder of the Willard patent, Mack's interest in him was aroused by his development of one of the first technically and commercially feasible front-discharge mixers. After some study, however, defendant decided not to enter the market. In late 1972, defendant conducted a new market survey and concluded that it should reevaluate its position. The following year, defendant modified an existing chassis to accommodate a front-discharge mixer and in the next four years sold a number of chassis, some with the mixer attached. Although the record does not establish when those transactions took place, it does reveal that defendant exhibited a front-discharge mixer in two trade shows before the patent expired in 1975.

In a detailed and scholarly opinion,² the district judge concluded that the defendant had failed to prove obviousness. Recognizing that the front-discharge mixer concept was a combination of known components, the court nevertheless determined that because of the combination's "synergistic" effect, the patent survived the required close judicial scrutiny. In response to defendant's contention that there was no infringement because the mixer drums mounted atop the Mack truck chassis were purchased from a licensee, the court ruled that Mack had waived the license defense by not pleading it in its answer. Double damages were determined to be appropriate because the defendant willfully infringed, but since the defenses of invalidity and noninfringement were colorable and nonfrivolous, counsel fees were denied the plaintiffs.

VALIDITY

As its principal defense, Mack contends that the Willard patent was invalid on the ground of obviousness, 35 U.S.C. § 103. We turn to that issue first.

The courts have long adhered to the principle that patents are not to be issued for every device effecting some improvement, but only for those that may be called "inventions." The problem of separating the two was recognized early by Jefferson, whose duties as Secretary of State included administration of the patent system. It was his belief that the limited monopoly sanctioned by the Constitution should be construed narrowly: "Only inventions and discoveries which furthered human knowledge, and were new and useful, justified the special inducement of a limited private monopoly." Graham v. John Deere Co., 383 U.S. 1, 9, 86 S.Ct. 684, 689, 15 L.Ed.2d 545 (1966) (discussing Jefferson's views).

In Hotchkiss v. Greenwood, 11 How. 248, 52 U.S. 248, 13 L.Ed. 683 (1850), the Supreme Court, in one of its first expressions of this sentiment, said that if "that degree of skill and ingenuity which constitute essential elements of every invention" were absent, the improvement would be only the "work of the skilful mechanic, not that of the inventor." Id. at 267. Attempts over the next hundred years, however, were unsuccessful in producing a workable definition of invention, and in the 1952 Patent Act, Congress attempted to resolve the issue by enacting § 103, which reads in pertinent part:

A patent may not be obtained . . . if the differences between the subject matter sought to be patented and the prior art are such that the subject matter as a whole would have been obvious at the time the invention was made to a person having ordinary skill in the art to which said subject matter pertains. Patentability shall not be negatived by the manner in which the invention was made.

Some years passed before the Court had occasion to review this standard, but it finally did so in Graham v. John Deere Co., supra, articulating the three factual inquiries that underlie a determination of obviousness:

Under § 103, 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. Against this background, the obviousness or nonobviousness of the subject matter is determined. Id. at 17, 86 S.Ct. at 694.

In addition, the Court indicated that secondary considerations might have relevancy in determining obviousness and listed such matters as the commercial success of the device, long felt but unresolved needs, and the failure of others. Id. But these factors "cannot, by themselves, support a finding of nonobviousness if it is otherwise established that a patent's disclosures are obvious in light of the prior art." Tokyo Shibaura Electric Co. v. Zenith Radio Corp., 548 F.2d 88, 94-95 (3d Cir. 1977).

The patent bar read Graham as adopting a more liberal view toward patentability, and as moving away from the invention concept treated in Hotchkiss v. Greenwood, supra, and Great Atlantic & Pacific Tea Co. v. Supermarket Equipment Corp., 340 U.S. 147, 71 S.Ct. 127, 95 L.Ed. 162 (1950). In two later cases, however, Anderson's-Black Rock, Inc. v. Pavement Salvage Co., 396 U.S. 57, 61, 90 S.Ct. 305, 24 L.Ed.2d 258 (1969), and Sakraida v. Ag Pro, Inc., 425 U.S. 273, 279, 96 S.Ct. 1532, 47 L.Ed.2d 784 (1976), the Court reiterated that constitutional limitations, which find expression in the invention concept, restrict patentability. The Court also had some special words about patents utilizing a combination of elements known in the prior art:

`Courts should scrutinize combination patent claims with a care proportioned to the difficulty and improbability of finding invention in an assembly of old elements. . . . A patent for a combination which only unites old elements with no change in their functions . . . obviously withdraws what already is known into the field of its monopoly and diminishes the resources available to skillful men. . . .' Sakraida v. Ag Pro, Inc., supra at 281, 96 S.Ct. at 1537, quoting Great Atlantic & Pacific Tea Co. v. Supermarket Equipment Corp., supra at 152-53, 71 S.Ct. 127.³

Thus, the courts, in determining obviousness in a combination patent, must undertake the tripartite Graham inquiry without losing sight of the necessity to determine whether the device performs its function in an innovative fashion.

There was little dispute among the parties as to the scope of...