Townsend Company v. MSL INDUSTRIES

• Decision Date: 02 May 1966
• Docket Number: No. 15068.,15068.
• Citation: 359 F.2d 814
• Parties: TOWNSEND COMPANY et al., Plaintiffs-Appellants, v. M.S.L. INDUSTRIES and Universal Screw Company, Defendants-Appellees.
• Court: U.S. Court of Appeals — Seventh Circuit

359 F.2d 814 (1966)

TOWNSEND COMPANY et al., Plaintiffs-Appellants, v. M.S.L. INDUSTRIES and Universal Screw Company, Defendants-Appellees.

No. 15068.

United States Court of Appeals Seventh Circuit.

April 7, 1966.

Rehearing Denied May 2, 1966.

Edwin S. Booth, Chicago, Ill., Elmer S. Utzler and William H. Parmelee, Pittsburgh, Pa., for appellants.

Eli Mullin and Irwin C. Alter, Chicago, Ill., for appellees.

Before SCHNACKENBERG, KNOCH and SWYGERT, Circuit Judges.

KNOCH, Circuit Judge.

Plaintiff, Townsend Company, is the exclusive licensee under patent number 2,761,347, "Fastener and Composite Sealing Washer Having a Deflectable Lip," issued September 4, 1956, to John R. McKee, Jr., now deceased, who assigned half of his interest in the patent to his brother, George. They granted an exclusive license to Fabricated Products Co., the name under which they engaged in business as a partnership, which later was changed to a corporation owned by them equally. That corporation in turn transferred its license along with its entire business to Townsend. Townsend joined George W. McKee and the heirs of John R. McKee, Jr., as plaintiffs in bringing action in the District Court seeking injunction and damages for infringement, plus attorneys' fees and costs.

On the basis of answers to interrogatories, depositions, documentary and physical exhibits, defendants, M.S.L. Industries and Universal Screw Company, moved for and were granted summary judgment from which this appeal is taken.

The District Judge noted in his findings of fact¹ that Exhibit 3, a washer offered and received in evidence without objection, was admittedly manufactured by Townsend, or its predecessor Fabricated Products, more than one year before the filing of the patent in suit. Exhibit 4, another washer offered and received in evidence without objection, is admittedly a specimen of the washer manufactured by Townsend or Fabricated Products in accordance with the claims of the patent in suit.

These physical exhibits are now before us. Our own examination leads us to the same conclusion reached by the District Court that, with minor inconsequential variations, Exhibit 3 is exactly like the washer defined in Claim 1 of the patent and anticipates it, and that Exhibit 4 differs in no material respect from Exhibit 3.

The District Court also found² that the U. S. Patent Office did not have Exhibit 3 before it although such Exhibit 3 was properly a part of the prior art, and that plaintiffs brought this action in bad faith.

Plaintiffs argue that although the witness George A. Bentley, an officer of Townsend, previously associated with Fabricated Products from 1962, admitted that Exhibit 3 was made and sold more than one year prior to the filing date of the patent in suit, he denied that it embodied the structure claimed in the patent, and that there is therefore a genuine issue as to a material fact. George W. McKee also stated at one point that Exhibit 3 did not embody the tapered deflectable lip claimed in the patent in suit. He also testified that both Exhibits 3 and 4 were made on "progressive" dies and later said that such dies were not developed by him until 1952 with the first washers produced from those dies sometime in July of 1952. Yet Exhibit 3 was admittedly manufactured more than one year prior to the filing date.

The structures involved here are very simple. We need no experts to explain their operation. The District Court examined the physical exhibits. So did we. Notwithstanding the opinions of plaintiffs' witnesses to the contrary, it is clear to us, as it was to the District Court, that Exhibit 4 manufactured in accordance with the claims of the patent in suit differs in no material respect from Exhibit 3 which completely anticipates the patent in suit but which was never brought to the attention of the Patent Office, thus destroying the presumption of validity of the patent. Hobbs v. Wisconsin Power & Light Co., 7 Cir., 1957, 250 F.2d 100, 105. Even Mr. McKee was unable to distinguish between Exhibits 3 and 4 when their identifying labels were covered from view.

Washers of which Exhibit 3 was representative were sold as early as 1949 with markings "Patent Applied For." Mr. McKee testified that no patent had been applied for until 1952, but he and his brother were under a misapprehension as to the use of that terminology and so chose to use it until advised by company and patent counsel to discontinue doing so.

Under all the admitted circumstances, there was a basis for the District Court's determination that plaintiffs could have had no reasonable belief in the validity of the patent when they brought this suit.

We see no genuine issue as to a material fact. Summary judgment was appropriate in the circumstances of this case. Magee v....