Thomson Industries, Inc. v. Nippon Thompson Co.

• Decision Date: 14 November 1968
• Docket Number: No. 63-C-1311.,63-C-1311.
• Citation: 298 F. Supp. 466
• Parties: THOMSON INDUSTRIES, INC., Plaintiff, v. NIPPON THOMPSON CO., Ltd. and H. Teramachi, Defendants.
• Court: U.S. District Court — Eastern District of New York

298 F. Supp. 466

THOMSON INDUSTRIES, INC., Plaintiff, v. NIPPON THOMPSON CO., Ltd. and H. Teramachi, Defendants.

No. 63-C-1311.

United States District Court E. D. New York.

November 14, 1968.

COPYRIGHT MATERIAL OMITTED

Morgan, Finnegan, Durham & Pine, New York City, for plaintiff Hobart N. Durham, New York City, of counsel.

Hopgood & Calimafde, New York City, for defendant, John M. Calimafde, New York City, of counsel.

Memorandum of Decision and Order

MISHLER, District Judge.

The complaint recites one claim for patent infringement and a second claim for trademark infringement and unfair competition. The answer denies the material allegations of the complaint and affirmatively prays for a judgment declaring the patent in suit to be invalid. The action was tried to the court without a jury.

Background

The plaintiff in this action is Thomson Industries, Inc., a corporation organized under the laws of the State of New York. John Thomson is the president and sole stockholder of the corporation. Plaintiff began doing business under its present name in 1944. Prior to that time, it was known as Zimmer-Thomson, Inc. Until about 1945, it was engaged in the manufacture of medical equipment and aircraft propellers. Since then, it has been involved in the production of drilling heads and bearings, including linear motion bearings. Linear motion bearings are designed to support relatively frictionless linear travel along a shaft and are used in machines, products, and tools where a reciprocating movement is required.

Plaintiff corporation has enjoyed considerable commercial success. Its business has increased steadily and since about 1958, it has had gross sales in excess of $1,000,000 per year, of which approximately 65% to 75% is attributable to the sale of linear motion bearings. For the past 21 years, plaintiff has associated the name "Thomson" with its bearings and has stamped or etched the name wherever practical on the bearings. Moreover, it has spent well in excess of $100,000 per year for the past 10 years advertising the "Thomson" bearing to the trade. About 60% of this figure has been devoted to linear motion bearings. All "Thomson" bearings are packed in distinctive cartons carrying the "Thomson" name and registered mark. The trademark consists of the individual letters of the name "Thomson" with each letter set in a contrasting circle as follows:

An application for registration of the mark was made by plaintiff on March 2, 1964, subsequent to the commencement of this action. The mark was registered on the principal register in the office of the U. S. Patent Office on May 18, 1965.

Plaintiff's first excursion into the linear motion bearing field came in 1945 when it began manufacturing such bearings under a Ferger patent. The Ferger bearing was produced through the use of expensive machine tooling and was not suitable for commercial exploitation. Plaintiff, therefore, sought a cheaper method of manufacturing a linear bearing. In furtherance of this endeavor, patents were filed by Thomson¹ and by Robert C. Magee,² currently the vice-president of Thomson Industries. Both men envisaged the use of punch-pressing or metal-deforming as a replacement for the costlier machining techniques. The Magee patent is the patent in suit. Plaintiff has manufactured bearings under it since the filing of the patent application in 1947. It has granted licenses under the patent to a German and an English factory.

The defendants in this action are the Nippon Thompson Co., Ltd. (hereinafter Nippon), a Japanese corporation, and Hiroshi Teramachi, the president of the corporation. Nippon began doing business under that name in 1963, shortly before the commencement of the action. Before that, it was known as Daiichi Kogyo Co., Ltd., and acted as distributor for the Nippon Thompson Bearing Co., also a Japanese company. Nippon continued in this capacity until it acquired the Nippon Thompson Bearing Co. early in 1964. Prior to the merger, defendant Teramachi was both the principal stockholder of Nippon and a stockholder of the Nippon Thompson Bearing Co.

In the fall of 1963, before the official consummation of the merger, Teramachi came to the United States to establish outlets for his bearing business. He brought with him about twenty copies of a catalogue issued in Japan by Nippon Thompson Bearing Co., Ltd., which prominently displayed the names "Thompson" and "Iko-Thompson" and samples of needle and linear motion bearings. One type of linear motion bearing had indentations on the outer sleeve; the other had a smooth surface. The indented bearing, trademarked "Ease", was of Japanese manufacture unrelated to the Nippon Thompson Bearing Co. Teramachi submitted a sample of the "Ease" bearing to Microtol Industries, one of defendant's distributors, in 1963. No other distributions or sales of the "Ease" bearings were ever made by the defendants in the United States. The smooth-surfaced bearing was manufactured by the Nippon Thompson Bearing Co. Defendant corporation has continued to sell this type of bearing in the United States.

Nippon enjoys a world-wide market with respect to the various types of bearings which it manufactures. It sold approximately $30,000 worth of bearings in the United States last year; of that sum, only about $3,000 was attributable to linear motion bearings.

Prior to the institution of this action, defendant corporation etched the name "Thompson" on its bearings. Since then, however, it has identified the bearings by marking both the trade name "Iko" and their country of origin, Japan, on them. The cartons in which the individual bearings are packed are orange and black and have the trade name "Iko" as well as the name of the manufacturer and place of manufacture clearly indicated on them.³ In addition, the stock number placed on each carton has the prefix "LMB", indicating linear motion bearing. The catalogues listing defendant's bearings are similarly identified. The plaintiff's bearings are advertised and sold with the "Thomson" trademark in individual cartons colored in yellow and brown. Plaintiff describes his bearings in advertising and packaging as "ball bushings."

The Patent

The subject matter of the patent in suit is a bearing designed for relatively frictionless linear motion along a shaft. It has four essential elements:

1. An outer sleeve having indentations at spaced intervals about the periphery of its external surface and corresponding raised portions on its internal surface, which raised portions serve as working tracks for balls under load as shown in paragraph 2;

2. An inner or ball-retaining sleeve in which longitudinally extending oval tracks have been formed which tracks extend substantially the length of the sleeve. Each track is slotted along half its length in such a way that the slots register with the raised portions on the outer sleeve. The balls filling the slotted halves of the tracks have bearing contact with the shaft. The other half of each track is recessed so that the balls filling that half may move freely out of contact with the shaft;

3. Balls substantially filling the tracks;

4. End rings pressed radially against the ends of the inner sleeve to maintain the relative position of the inner sleeve to the outer sleeve.

The Patent Office Procedure

Robert C. Magee filed an application for letters patent on an invention he described as "Anti-Friction Bearing for Linear Motion and Method of Manufacturing the Same" on April 28, 1947 (Serial No. 744,314). The specification conceded that "* * * the operative principle of the bearing is not new * * *" but indicated that "* * * the earlier structural designs embodying this principle have been too difficult and expensive to manufacture for commercial production. * * *" The specification continued:

"In the design here presented where a series of individual ball-circuits are spaced at regular intervals around the shaft, the entire structure consists essentially of a one-piece pressure-deformed outer sleeve, a one-piece press-formed inner sleeve, two end rings securing the outer and inner sleeves together, and the necessary balls to fill the circuits. A primary object of the invention has been so to design the bearing that substantially all of the forming operations can be done in a punch-press, thereby eliminating expensive machining and tedious handfitting work heretofore necessary."

The patent examiner directed division of the claims into article and method claims. Pursuant to the direction, Magee cancelled the article claims and continued to prosecute the method claims. This effort, however, initially met with failure. The examiner observed with respect to these method claims that, "A process is not patentable merely because it is applied to a different article." (Paper No. 7) The applicant, therefore, added claims 31 and 32, which covered a method of applying pressure to the external surface of the metal tubing to form indentations and raised portions on its internal surface. He argued that because of the need for precise alignment between the working tracks and the balls under load, this claim presented an obvious advance in the art. In the meantime, the Board of Patent Appeals held that French patent No. 755,957 (dated September 18, 1933) did not bar Ferger (Ex parte Hulbert K. Ferger, Appeal No. 22081, decided October 30, 1950) from a patent claim where Ferger's claim resulted "in great advantages to the manufacture of the linear motion bearing and this is obvious especially in view of the accuracy necessary in making the grooves for ball bearings." Magee urged the examiner to regard this decision as strong authority for the allowance of his claims. Apparently persuaded by the reference to Ferger, the examiner held claims 31 and 32 "* * * allowable as at present advised." (Paper No. 13, August 25, 1952) The application, however, was abandoned.

On March 15, 1949, Magee filed a second application. Incorporated into...