A. Stucki Co. v. Schwam

• Decision Date: 01 May 1986
• Docket Number: Civ. A. No. 83-5340.
• Citation: 634 F. Supp. 259
• Parties: A. STUCKI COMPANY v. Stuart A. SCHWAM and Worthington Industries, Inc.
• Court: U.S. District Court — Eastern District of Pennsylvania

634 F. Supp. 259

A. STUCKI COMPANY v. Stuart A. SCHWAM and Worthington Industries, Inc.

Civ. A. No. 83-5340.

United States District Court, E.D. Pennsylvania.

May 1, 1986.

Stephen J. Springer, LaBrum & Doak, Philadelphia, Pa., Raymond G. Hasley, Rose, Schmidt, Dixon & Hasley, E. Wallace Breisch, Pittsburgh, Pa., for plaintiff.

Richard D. Malmed, Philadelphia, Pa., for Stuart A. Schwam.

Charles C. Hileman, Philadelphia, Pa., for Worthington Industries, Inc.

MEMORANDUM

RAYMOND J. BRODERICK, Senior District Judge.

On August 25, 1981, this Court entered judgment against Railroad Dynamics, Inc. RDI for damages caused by RDI's infringement of U.S. Patent No. 3,837,292 owned by A. Stucki Company Stucki in a related case, C.A. 76-800. Railroad Dynamics, Inc. v. A. Stucki Company, 579 F.Supp. 353 (E.D.Pa.1983), aff'd 727 F.2d 1506 (Fed.Cir.), cert. denied, ___ U.S. ___, 105 S.Ct. 220, 83 L.Ed.2d 150 (1984). After Stucki was unable to recover the full amount of this judgment against RDI, Stucki commenced this lawsuit against defendants Stuart A. Schwam and Worthington Industries, Inc. Worthington, the two 50% stockholders of RDI. In the present case Stucki alleges that Mr. Schwam and Worthington are jointly liable to Stucki for RDI's infringement of the above named patent. Stucki has filed a motion for summary judgment as to defendant Stuart A. Schwam (count one) on the ground that the undisputed facts show that Mr. Schwam is jointly liable for patent infringement as a matter of law. This Court is mindful that summary judgment is proper only where the moving party shows by competent record evidence that there are no genuine issues of material fact and that he is entitled to judgment as a matter of law. For the reasons discussed below, this Court will enter summary judgment in favor of Stucki and against Mr. Schwam on count one of the complaint.

A brief summary of the proceedings in C.A. 76-800 serves as the background for this Court's consideration of Stucki's motion for summary judgment. RDI commenced C.A. 76-800, seeking a declaratory judgment that U.S. Patent No. 3,837,292, owned by Stucki, was invalid. Stucki counterclaimed, alleging that the manufacture and sale of RDI's "Control/Master" unit infringed the Stucki patent. The uncontroverted evidence at the trial of RDI v. Stucki is summarized below:

The patent in suit concerns the spaced placement of a hydraulic shock absorber or "snubber" in the spring group of a railroad freight car, between the bolster and the side frame, held in place by a biasing spring so that it is normally operative only when the car is loaded and is normally inoperative when the car is unloaded. A freight car has four side frames, each of which holds two of the car's eight wheels. A freight car also has two bolsters. A bolster is a metal rod which connects the two side frames at each end of the freight car. The spring group is a group of springs, usually eight to ten in number, located between the wheels in each side frame. Each end of a bolster is attached to and rests upon the springs in the spring group of a side frame....

The springs in the spring group operate in the same manner as springs in an automobile and absorb energy when the freight car is in motion. The energy absorption capacity of the springs is not sufficient, however, to control the movement of many large freight cars, particularly when such cars are being operated at higher speeds or on railroad track that is in poor condition. In such circumstances, these large freight cars begin to rock from side to side, a phenomenon known in the railroad industry as "rock and roll". Primarily on curved track, the rock and roll motion of a freight car can become so severe that the freight car body can be lifted off the center plate upon which it rests, and one or more wheels can actually be lifted off of the track for a fraction of a second. If the wheel does not return to the track, a derailment occurs. Though this problem previously existed in the industry it became particularly acute when 100-ton capacity freight cars, 25-30% larger than previously existing cars, were introduced around 1964. (N.T. 3.109).

In order to prevent derailments due to "rock and roll", the railroad industry developed shock absorbers, or "snubbers", designed to provide added energy absorption capacity to that already supplied by the springs in the spring group. A number of companies developed friction snubbers, designed to dissipate rock and roll energy in the form of heat by bringing two pieces of metal together while the freight car was in motion. In the mid to late 1960's RDI and Stucki manufactured hydraulic snubbers that absorbed excess energy by use of the principles of hydraulics. No snubber completely absorbs all of the energy created by the rock and roll motion of a freight car, but it is claimed that hydraulic snubbers absorb a greater amount of energy then friction snubbers. Only RDI and Stucki manufactured hydraulic snubbers which were accepted in the trade in the late 1960's.

The Stucki hydraulic snubber based on the patent in suit, known as the "HS-6" snubber, is located in the spring group and designed so that it does not become engaged, or begin to absorb energy, until a freight car is loaded with freight. The HS-6 is installed in a spring group by removing one of the outboard springs of the group and replacing it with the HS-6 unit. Since the HS-6 unit is not as long as the distance between the bolster and the side frame, the unit makes use of a "biasing" spring located between the side frame and the snubber which holds the snubber in place and away from the side frame when the freight car is empty. The snubber is pressed into contact with the side frame when the car is loaded and, once pressed into contact, can begin to absorb energy.

The patent in suit, number 3,837,292, was issued to Donald Wiebe on September 24, 1974. It was based on an application PX-3 filed April 15, 1971. This application was a continuation-in-part of application number 857,274, filed August 22, 1969 PX-6 ("the parent application"), which was itself a continuation-in-part of application number 709,142, filed February 28, 1968 and later abandoned PX-7 ("the grandfather application"). Figures 9-12 of the patent application, along with related specifications, were transferred without change to the patent in suit, becoming figures 5-8 of the patent in suit. The remainder of the parent application matured as United States Patent Number 3,595,350, issued to Donald Wiebe on January 27, 1971.

Plaintiff RDI has also marked an hydraulic snubber placed in the spring group, spaced so that it is engaged only when the freight car is loaded. This snubber is known as the "Control Master" (C/M) snubber. The C/M snubber was designed and built by RDI's president, Stuart Schwam, in three weeks in the fall of 1971 (N.T. 2.38). The C/M snubber is located in the spring group in place of the center spring of the group, and is attached to the side frame and spaced from the bolster by a spring lodged between the top of the snubber and the bolster. RDI has admitted that this device infringes the patent in suit should the patent in suit be found to be valid.

Railroad Dynamics Inc. v. A. Stucki Company, 579 F.Supp. at 359-60. (emphasis added). This Court held a trial on the liability issues in C.A. 76-800 from May 19, 1980 to June 10, 1980. The jury answered a series of interrogatories, rejecting RDI's contentions (1) that the invention claimed was obvious in view of the prior art at the time of the invention and hence not patentable under 35 U.S.C. § 103, (2) that the patent failed to disclose the best mode of installing and retaining the patented device and hence was invalid under 35 U.S.C. § 112, (3) that the claims on the patent were filed more than one year after sale and use of the claimed invention, rendering the patent invalid; (4) that no supplemental oath was filed in support of the added claims which ultimately were included in the claims of the patent, and that this omission rendered the patent invalid under 37 C.F.R. § 1.67, and (5) that RDI had acquired intervening rights under 35 U.S.C. § 252 to make and sell its infringing device. However, the jury found that RDI's infringement of the Stucki patent was not willful. After the jury's answers established the validity of Stucki's patent, the parties waived a jury trial in connection with damages. From February 9, 1981 to February 20, 1981, the damages issue was tried to this Court. On August 25, 1981, this Court issued a judgment in favor of Stucki in the amount of $1,960,700. On March 28, 1983, the Court amended this judgment nunc pro tunc to correct a clerical mistake, making the judgment in favor of Stucki $2,182,986. On February 14, 1984, the United States Court of Appeals for the Federal Circuit issued as a mandate its judgment affirming this Court's judgment. On March 8, 1984, this Court granted Stucki's motion for an injunction against RDI restraining RDI from making, having made on its behalf, or using or selling snubbers, as defined by the claims of United States Letters Patent 3,837,292 or for use in a dampened railway truck assembly as claimed in the same Letters Patent, and from actively inducing others to make, have made, use or sell such snubbers. On August 17, 1984, this Court entered an additional judgment of $607,730 in favor of Stucki representing additional damages for infringing sales between February 10, 1981 and March 9, 1984.

In this action Stucki has filed a motion for summary judgment against Stuart A. Schwam, president and 50% owner of RDI. Stucki contends that Mr. Schwam is collaterally estopped from relitigating the validity of Stucki's patent and RDI's infringement of that patent because Mr. Schwam controlled the litigation in C.A. 76-800 on behalf of RDI. Stucki further contends that the undisputed facts of record show that Mr. Schwam is jointly liable with RDI as a matter of law for...