Case 16: D.L. Auld Co. v. Chroma Graphics Corp. (1983)

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Auld sued Chroma Graphics in 1981 for infringement of the Waugh patent, a patent for a method for producing foil-backed decorative emblem inserts. Chroma moved for summary judgment on the grounds that the patent had been available for public use for more than one year before the patent was filed. After some legal volleying, the magistrate granted the motion for summary judgment. What was before the CAFC to decide was (a) whether there were questions of material fact which would render a summary judgment void, and (b) whether or not an oral hearing is necessary to validate such a ruling.

It is clear that Auld had marketed sample inserts far in advance of filing for a patent. Even though the patent was for the method of production, if any products were fabricated and sold prior to one year before the application, then the patent rights are forfeited. Apparently, other inventors can patent a process if the original inventor forfeited his or her right to the patent by profiting from its use. In regards to the documents and testimony presented to the magistrate, no question of material fact was found in need of settling. It did not matter that the crests were made in what Auld termed a "laboratory;" the law doesn't care where it was made, only that it was made and used for profit.

Auld tried to defend itself in other ways. It claimed the sample crests were submitted to customers for evaluation. However, the patent was for the method, not the crests; submission to customers could not be considered experimental evaluation. Labeling the crests as "experimental" does not negate the fact that the method had been used to produce them. Auld did not have to prove that the crests were, in fact, experimental in order to dodge the summary judgment. It only had to indicate that such proof was available should the need arise; this in itself would necessitate a trial. In addition, the fact that no crests were sold is immaterial. The statute says placing an item "on sale" is sufficient for forfeiture of patent rights. Auld also claimed to have further improved on the method after the offering to customers by streamlining the production method so as to create a series of crests as opposed to one-by-one. But this does not make a new process; if Auld created crests before one at a time, then they could simply repeat this process until a series had been made.

The CAFC also determined that the summary judgment is not affected by whether or not an oral hearing has been granted as requested. Whatever local rules are about oral hearings do not affect the validity of the District Court's ruling. All decisions were affirmed.