D.L. Auld v. Chroma Graphics Karch

D.L. Auld Co. v. Chroma Graphics Corp., 714 F.2d 1144 (1983)

Patent 4100010

Waugh

ruled invalid

Background

a method of forming foil-backed inserts in the form of cast decorative emblems.

October 15, 1981, the D.L. Auld Company (Auld) sued Chroma Graphics Corp. (Chroma) in the Eastern District of Tennessee for infringement of Patent No. 4,100,010 (the Waugh patent) issued on a continuing application filed July 2, 1976 of an original application filed June 12, 1974.

Chroma moved for summary judgment on the ground that the invention had been “on sale” for more than one year before June 12, 1974

The involved emblems include a layer of clear plastic having a curved outer surface formed on a decoration-bearing base. Since 1965, Auld sold that type of emblem to the auto industry. The early emblems were made by the “Vitrolux” method, in which the base is a shallow cavity designed to receive a measured amount of liquid plastic, while the base was held horizontal. The quantity of plastic was greater than that required to fill the cavity, producing a curved upper surface. The plastic did not overflow the cavity walls because of its surface tension.

Invention

The involved emblems include a layer of clear plastic having a curved outer surface formed on a decoration-bearing base. Since 1965, Auld sold that type of emblem to the auto industry. The early emblems were made by the “Vitrolux” method, in which the base is a shallow cavity designed to receive a measured amount of liquid plastic, while the base was held horizontal. The quantity of plastic was greater than that required to fill the cavity, producing a curved upper surface. The plastic did not overflow the cavity walls because of its surface tension.

35 U.S.C. § 102(b)

"A person shall be entitled to a patent unless—the invention was patented or described in a printed publication in this or a foreign country or in public use or on sale in this country, more than one year prior to the date of the application for patent in the United States, or"

Argument

sales representatives, not the Research and Development people, carried these samples around in their briefcases and showed them to customers. Prices and delivery times were discussed. Mr. Waugh's deposition makes it abundantly clear that, over a period of about four years, the D.L. Auld Company attempted to obtain orders for emblems made according to the patented process. This is precisely the activity that Section 102(b) attempts to limit to one year.

Even the most indulgent reading of The D.L. Auld Company's business records and the deposition testimony of its Vice-President for Research and Development Robert E. Waugh precludes any other finding but that at least some sample products were made in the laboratory according to the Waugh patent and were offered for sale well outside of the statutorily protected year.

35 U.S.C. § 102(b), the intent of which is to preclude attempts by the inventor or his assignee to profit from commercial use of an invention for more than a year before an application for patent is filed.

the magistrate correctly applied the concept explicated in Metallizing, i.e. that a party's placing of the product of a method invention on sale more than a year before that party's application filing date must act as a forfeiture of any right to the grant of a valid patent on the method to that party if circumvention of the policy animating § 102(b) is to be avoided in respect of patents on method inventions.

Testimony

Waugh testified that sample emblems submitted to prospective customers before the critical date were made in the laboratory following each of the steps set forth in Claim 1 of the patent in suit. He further said that the claimed method was not followed on some samples and a “postforming” operation was required on those particular emblems because they curled.

Waugh testified that of the samples submitted before June 1973 by the Auld sales department to International Crest, to interest them in the product for the National Football and Hockey Leagues, some were not made by the claimed method, but that others were. Auld quoted pricing and delivery dates in writing, for an order of more than 150,000 emblems, to International Crest.

Defense of Auld

1. those emblems were made by a “laboratory” method; that a material issue exists on whether the offers fell within the “experimental” exception to the “on sale” bar of 35 U.S.C. § 102(b);
2. that whether the offers were for experimental purposes is a matter of Auld's intent and thus ill-suited to resolution by summary judgment;
3. that the magistrate improperly shifted the burden of proof by requiring Auld to show that the offer for sale was for experimental purposes;
4. that no sale was made to International Crest;
5. that some samples were not made by the claimed method;
6. that it was error to grant summary judgment without receiving the proffered testimony of Auld salesmen;
7. that the claimed method was for a manufacturing process involving a series of emblems, while in the “laboratory” method emblems were made one by one and that method was not demonstrated to be practical or readily reproducible;
8. that affidavits of Waugh, Tanner, and David Auld, filed to correct and clarify “ambiguities and inconsistencies” in Waugh's deposition, raise a material issue on whether the claimed method had been reduced to practice before June, 1973;
9. that those affidavits show that emblems provided Chrysler were not made by the patented method because they were not made in a manufacturing process involving a series of emblems, were not held flat, and had to be postformed.

Waugh's testimony establishes unequivocally that the “laboratory” method involved each step of the claimed method, and that each such step was performed in producing some early samples for International Crest.

the only asserted differences between the patented method and the “laboratory” method are the use of adhesive and holding the foil shapes flat. Waugh's testimony was unequivocal that those very steps were employed in making some samples by the “laboratory” method, and nothing in the affidavits contradicts that testimony.

Auld's attempt to establish a material issue of fact respecting the “experimental” exception to 35 U.S.C. § 102(b) is misdirected.

1. First, each of Auld's citations to evidence in the record relates to later experimentation on mass production by machine for commercialization in quantity, not to any experimentation on the earlier performed method itself. Land v. Regan, 342 F.2d 92, 52 CCPA 1048, 144 USPQ 661 (1965).
2. Second, Auld's reliance on the labeling of the sample emblems as “lab samples” submitted to customers for “evaluation” is irrelevant. The claim is for a method, not a product. That the method would produce the product was known. Submission of the emblems for sale if the customer liked them is not experimentation on the method.

The record establishes that the claimed method was successfully performed, albeit by hand, that it produced an emblem, and that the emblem was offered for sale.

if a mere allegation of experimental intent were sufficient, there would rarely if ever be room for summary judgment based on a true “on sale” defense under 35 U.S.C. § 102(b).

Nor did the magistrate effectively shift the burden to Auld on the experimentation issue.

1. Once evidence that an invention was on sale or, as here, that the product of a method invention was on sale, is presented, countervailing evidence establishing an experimental purpose must necessarily come from the patentee. To defeat a motion for summary judgment, a patentee need not prove an experimental purpose, but must submit facts indicating an ability to come forward with evidence that such proof is possible. See De Long Corp. v. Raymond International, Inc., 622 F.2d 1135, 206 USPQ 97 (3rd Cir.1980). The court in De Long pointed out that “the duty to come forward with possible contradiction of proof is the essence of Federal Rule of Procedure 56,”
2. That no sale was actually made to International Crest is irrelevant. An offer to sell is sufficient under the policy animating the statute, which proscribes not a sale, but a placing “on sale.” 35 U.S.C. § 102(b). General Electric Co. v. U.S., 654 F.2d 55, 211 USPQ 867 (Ct.Cl.1981).

Auld nitpicking

(2) Necessity For Oral Hearing

The magistrate apparently failed to note the last sentence in Auld's brief in opposition to the motion for summary judgment, in which sentence Auld requested an oral hearing, for the motion was granted without a hearing. That action, though doubtless inadvertent, was not in accord with the letter of Local Rule 12(c) of the District Court which provides for oral hearing on request on motions determinative of the case on the merits.

Auld, on receipt of the magistrate's decision, filed a motion to vacate the judgment and grant a hearing. The magistrate, saying he did so to preserve Auld's right to appeal, treated the motion as one filed under Rule 59(e), held a hearing, and denied the motion to vacate his judgment, issuing with his order a Memorandum.