US Industries v. Otis Engineering Corporation

• Decision Date: 06 August 1958
• Docket Number: No. 16528.,16528.
• Citation: 254 F.2d 198
• Parties: U. S. INDUSTRIES, Inc., Appellant and Appellee, v. OTIS ENGINEERING CORPORATION and Otis Pressure Control, Inc., Appellees and Appellants. OTIS ENGINEERING CORPORATION and Otis Pressure Control, Inc., Appellees and Appellants, v. U. S. INDUSTRIES, Inc., Appellant and Appellee.
• Court: U.S. Court of Appeals — Fifth Circuit

254 F.2d 198 (1958)

U. S. INDUSTRIES, Inc., Appellant and Appellee, v. OTIS ENGINEERING CORPORATION and Otis Pressure Control, Inc., Appellees and Appellants.

OTIS ENGINEERING CORPORATION and Otis Pressure Control, Inc., Appellees and Appellants, v. U. S. INDUSTRIES, Inc., Appellant and Appellee.

No. 16528.

United States Court of Appeals Fifth Circuit.

April 8, 1958.

Rehearing Denied August 6, 1958.

James T. Wright, Houston, Tex., Thomas E. Scofield, Kansas City, Mo., William C. Dixon, Los Angeles, Cal., Dyche, Wheat & Thornton, Houston, Tex., for appellant and appellee, J. W. Hassel, Jr., Dallas, Tex., of counsel.

E. Hastings Ackley, Dallas, Tex., Oscar A. Mellin, Mellin, Hanscom & Hursh, San Francisco, Cal., for appellees and appellants.

Before RIVES, BROWN and WISDOM, Circuit Judges.

JOHN R. BROWN, Circuit Judge.

This appeal tests whether the District Court, on findings made after a trial at which there was considerable testimony, in person and by deposition, as well as the usual bulk of documents typical of this litigation, was correct in holding King patent No. 2,339,487 valid but not infringed. This clear-cut decision momentarily put an end to a complex controversy, since revived here, in which to Patentee's¹ claim of validity, infringement, and estoppel to deny validity, the alleged infringer² retorted in kind with the traditional fluid defenses of validity, noninfringement, monopolistic abuse of the patent monopoly and violation of federal anti-trust statutes.

This is another of the many suits³ reaching here involving the important field of gas-lift devices for oil well operations. More than that, it presents once again the same patent. King 487, dealt with in Bryan v. Garrett Oil Tools, Inc., 5 Cir., 245 F.2d 365, 371. Except for one claim (No. 11) which Patentee insists, but Otis denies, is also for a "valve" claim for a valve structure per se, and as such is infringed by the Cummings control valve, the controversy⁴ relates to the claims (5, 6, 7) describing the "system" of reverse loaded valves with surface control mechanism.

As we pointed out in our former decision, 245 F.2d at page 374, King 487 covers both "valve" and "system" claims. The valve is of little importance here, but in view of frequent parental boasting in its behalf, sometimes as though its presence is enough to convert old into new, ancient into novel, we mention it briefly. It is a flow valve structure to be affixed on the outside of the flow string (tubing). It is in the annular space between the casing and the tubing. When gas pressure in the annulus exceeds the set pressure of the valve, it opens allowing the escape of gas (or liquids) through the valve into and up the tubing. In place of a spring-loaded or weight-loaded valve, this structure was a gas pressure-charged valve. A predetermined charge of gas pressure was hermetically sealed behind a bellows which holds the valve member seated. It was, is, and has to be conceded that a gas pressure-charged valve was old in the art.

The "system" claims cover an apparatus by which flow control valves, whether gas pressure-charged, spring-loaded, or otherwise, and regardless of manufacturer are installed on the tubing in series. The flow control valve nearest the surface is set to open at the highest pressure and each succeeding valve from the top to bottom is set at a pressure somewhat lower than the valve immediately above. The purpose of this arrangement is to assure positive unloading of the liquid in the annulus (either altogether or to the static level) by sequential operation of the valves by gas pumped into the annulus from the surface in controlled amounts and at predetermined pressures. Once the well is unloaded, it may be produced by the gas-drive introduced from the annulus into the column of oil in the tubing at the particular selected valve of the series. For reasons which are more fully developed, the heart of King 487 is the disclosed methods by which gas in controlled amounts and at predetermined pressures is introduced.

The installations by Otis, or its customer-users, which are claimed to infringe have the series of control valves, here the Cummings type, set at successively lower pressures from top to bottom. The difference between the two is the arrangement at the surface. Where King 487 calls for both volume controller and intermitter, Otis uses but a timer. Whether that difference is a difference at all, is one in fact, or if in fact, is one in patent law, is a crucial one. The District Court held it was all three. Since infringement is a question of fact, Georgia Kaolin Co. v. Thiele Kaolin, 5 Cir., 228 F.2d 267; Fritz W. Glitsch & Sons, Inc., v. Wyatt Metal & Boiler Works, 5 Cir., 224 F.2d 331; Jeoffroy Mfg. Inc., v. Graham, 5 Cir., 206 F.2d 772; cf. Southern States Equipment Corp. v. USCO Power Equipment Corp., 5 Cir., 209 F.2d 111, that finding comes here with the buckler and shield of Fed.Rules Civ.Proc. rule 52(a), 28 U.S.C.A., Lumbermen's Mut. Casualty Co. v. Klotz, 5 Cir., 251 F.2d 499.

Unwilling to leave to patentee the role of pursuer, unsatisfied with a decree that exonerates it for the past, unsure what the adversary's licensing practices might do to it and its customers in the future, and undaunted that we have already spoken on the subject, Otis urges that we should declare the Judge to have been wrong in presumably heeding us, and here determine that King 487 is invalid.

In assaying validity (and infringement) of King 487, Otis asserts that the patent has a narrowly circumscribed field for several reasons. The use, for example, of a single flow control valve (that is, not in series) even with an intermitter would not be covered. Such an apparatus seems literally anticipated by Guiberson 2,188,656, and in any case, all of the claims here⁵ speak in terms of a series of valves. Likewise, a series of flow control valves set at reverse loading pressures but without an intermitter or surface volume control regulator mechanism would not be covered. This would be a literal application of Bryant 2,008,172.

This leads Otis to argue that (1) since it may use an intermitter on a single valve so that gas is intermittently introduced and (2) since it may install as many valves with reverse loading pressures as desired to operate under a continuous pressure supply of gas on the annulus, the effect of which would be to unload the well or lift the fluid in the tubing (even though there would be a waste of gas), there is no real novelty or invention in adding the old device of an intermitter to a series of flow control valves. While the matter is pertinent from the standpoint of infringement, we think, however, that this is not now open in view of Bryan v. Garrett Oil Tools, Inc., supra, in which validity was sustained.

It is plain from Bryan v. Garrett Oil Tools, Inc., 246 F.2d at page 371 et seq., that in sustaining the validity of the claims, note 5, supra, of King 487, we did so only by giving a carefully circumscribed construction to those claims. This was so because of the familiar rule that "the claim of a patent must be read in the light of the invention disclosed and cannot be given a construction broader than the teachings of the patent as shown by the drawings and specifications. Ford Motor Co. v. Gordon Form Lathe Co., 6 Cir., 87 F.2d 390, 392," Blanc v. Curtis, 6 Cir., 119 F.2d 395, 397, as well as to avoid anticipation. Both McEvoy 733 and Bryant 172 taught⁶ the principle of reverse pressure loading⁷ in which a series of valves were disposed with pressures set at progressively lower levels from top to bottom. We distinguished King 487 and thus avoided anticipation because neither of these, as does King, prescribed any mechanism for "the introduction of gas in controlled volumes and at predetermined pressures." Bryan v. Garrett Oil Tools, Inc., supra 245 F.2d at page 373. This was essential since only by "* * * a careful control of the amount of introduced gas was it possible to determine which of a series of spaced pressure sensitive valves should open" and only by "appropriate direct or indirect control of the gas pressure was it possible to keep the well operating at a particular valve or at progressively lower levels, in order to achieve the highest efficiency and optimum gas-oil ratios with given speeds of production and extraction." Id., 245 F.2d at page 372. The novel and patentable improvement over the prior art came from the use of the old concept of a reverse pressure installation with specified loaded valves "and a surface control for the admission of pressure gas to determine which valve is to be operated at a given time," id. at page 375, by "a method of supplying pressure gas in controlled amounts at predetermined pressures."⁸ Id. at page 373.

The disclosures of King 487, as thus construed, showed that this was to be accomplished by the use, in combination, at the surface of two general types of devices. These were (a) a timer, sometimes an intermitter and (b) a volume controller or, its substantial equivalent, a pressure regulator.

The timer-intermitter is substantially a clock-driven mechanism which opens the main valve from the pressure gas supply line to permit it to flow into the annulus. It can be adjusted in a variety of ways to permit the valve to open and close at given cycles and to remain open for specified times. It operates, however, wholly independent of the pressure built up in the annulus for gas does not enter the annulus even though the pressure is below the desired point, nor does the supply of gas to the annulus cease if the pressure is built up in it to a point beyond that desired. It is only if the pressure on the main gas supply line remains constant and conditions in the well itself, such as the rate or kind of flow out of the formation into the tubing, likewise remain unchanged, that, for any given time, the amount-volume and pressure would be predetermined through the use of such an...