DENNISON MANUFACTURING COMPANY, Petitioner, vs. PANDUIT CORP., Respondent.

No. 85-1150

February 5, 1995

ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE FEDERAL CIRCUIT

BRIEF FOR RESPONDENT

CHARLES F. PIGOTT, JR., Two North LaSalle Street, Suite 2010, Chicago, Illinois 60602, (312) 263-4350,

Attorney for Respondent

Of Counsel: CHARLES R. WENTZEL, Panduit Corp., 17301 Ridgeland Avenue, Tinely Park, Illinois 60477

 I. INTRODUCTION

This suit between two corporations is for infringement of three Panduit patents. There are a total of 28 claims at issue from the three patents, and Dennison has admitted infringement of all three patents and of every one of the 28 claims. The following facts were found by the trial court and relied upon by the Court of Appeals for the Federal Circuit.

Jack E. Caveney founded Panduit in the basement of his home in 1955, making a plastic wiring duct. In 1961, he began a research program to develop a one-piece plastic cable tie. That program lasted nine years and cost several million dollars. The result of that program was the three patents in suit. The commercial embodiment of those three patents was first sold by Panduit in October 1970, and by 1984 the patented one-piece cable tie accounted for $ 50 million in annual sales, one-half of Panduit's total sales, and over one-half the total profits of Panduit.

Beginning in 1968, Dennison put its staff of engineers and designers to work on a one-piece cable tie development program. It carried on that program at considerable expense for ten years, developing many ties and patenting some. None was successful. Having failed to succeed for over ten years with ties of its own design, Dennison achieved great success in 1978 by making a close copy from two of Panduit's patents shortly after they issued. As a result of its copying, Dennison became the second or third largest supplier of one-piece cable ties.

Among the many findings of the trial court as to the great success of Panduit's commercial embodiment of the patents in suit, and the close copying from those patents by Dennison, is the following:

"Plaintiff's commercial embodiment of the '538 patent appears to be the leader in the industry. As I have remarked at various times during the trial, the evidence is simply overwhelming that Dennison copied the '538 patent".

The Federal Circuit wrote a 47-page opinion, and approximately one-third of the opinion is devoted to an analysis of dozens of errors of law committed by the trial court both in its evaluation of the individual prior art patents and in its combining of those patents by using hindsight and with no teaching to combine them other than the patents in suit. The errors of law committed by the trial court are too numerous to discuss, but a reading of the detailed 47-page opinion by the Court of Appeals leaves no room for doubt that it would not be possible to reverse that decision without reversing the major patent decisions by this Court including Graham v. John Deere Co., 383 U.S. 1 (1965).

Because Dennison is faced with a ruling that it has infringed 28 valid claims from three different Panduit patents, it is understandably hard pressed to concoct reasons why the United States Supreme Court should review the entire judgment by the Court of Appeals as to all 28 claims in all three patents. While numerous attempts are made to reargue the entire case, Dennison has advanced two principal grounds in its petition that a writ of certiorari be issued.

With respect to two of the patents in suit, the Caveney et al. '869 patent and the Caveney et al. '538 patent, Dennison has contended that the decision by the Court of Appeals for the Federal Circuit conflicts with a 1974 decision by the Court of Appeals for the Seventh Circuit. That contention is easily disposed of for several reasons, including the fact that the Court of Appeals for the Seventh Circuit no longer has jurisdiction to review patent cases. In fact, one of the reasons for creation of the Court of Appeals for the Federal Circuit was to provide uniformity in patent decisions. Beyond that, the basis for suggesting that a conflict exists in the first place is preposterous.

As for the third patent in suit, the Caveney '146 patent, Dennison has advanced as a ground for issuance of a writ of certiorari the argument that the Court of Appeals for the Federal Circuit violated Rule 52(a) of the Federal Rules of Civil Procedure by refusing to accept a so-called critical fact finding as to a prior art Emery patent upon which Dennison relied in its attempt to invalidate the '146 patent. However, the record plainly shows that the trial court made several inconsistent fact findings with respect to the Emery patent, and in fact the trial court was so uncertain as to the law governing the manner of determining what the Emery patent and other prior art taught that it expressly requested review by the Court of Appeals on the point.

RULE 28.1 STATEMENT

Respondent, Panduit Corp., has no parent companies or subsidiaries apart from wholly-owned subsidiaries or affiliates.

II. THERE IS NO CONFLICT BETWEEN THE FEDERAL CIRCUIT AND THE SEVENTH CIRCUIT

Dennison knows that historically a conflict between the decisions of two or more United States Courts of Appeals has frequently been a ground upon which a writ of certiorari has been granted. Accordingly, in a lame attempt to fit that mold, and being unable to conceive of any other reason why the U.S. Supreme Court could possibly be interested in reviewing the judgment below as to the ten claims at issue in the '869 patent and the '538 patent, Dennison has resurrected a 1974 opinion from the Seventh Circuit where the Court of Appeals in a one-page opinion held that Eberhardt U.S. Patent 3,484,905 was invalid.

Dennison asserts the 1974 Seventh Circuit case is relevant because the Eberhardt patent was on a cable tie. Dennison is suggesting that because a cable tie patent was held invalid in All States Plastic Mfg. Co. v. Weckesser Company, 506 F.2d 465(7th Cir. 1974), and since two totally different patents on cable ties were held not to be invalid in the instant case, there is a conflict. Dennison makes the bizarre suggestion that the U.S. Supreme Court should rule once and for all whether a patent claiming an invention in a plastic cable tie is valid or invalid, without regard to the claims at issue or the prior art. Dennison has not explained how such a proposition can be reconciled with the procedures laid down in Graham v. John Deere Co., 383 U.S. 1 (1965), for determining patent validity.

In fact, the Caveney et al. '869 patent and the Caveney et al. '538 patent are entitled to an earlier date of invention than the Eberhardt '905 patent. As a result, the prior art in the 1974 case involving the Eberhardt '905 patent is substantially more extensive than the prior art available to Dennison in the instant case.

The test applied in the Graham v. John Deere case requires that the trial court determine the "differences between the prior art and the claims at issue". This is a further reason why the two cases are unrelated. The Eberhardt '905 invention is so different from the inventions claimed in the Caveney et al. '869 and '538 patents that the trial court in the instant case found that they teach opposite things.

Specifically, in the Seventh Circuit case the patentee Eberhardt claimed a pawl which was substantially rigid so that it would not pivot at or near its base. In contrast, every one of the ten claims at issue in the Caveney et al. '869 and '538 patents emphasizes that the pawl must be hingedly mounted so that it will pivot at or near its base. Thus, the Court of Appeals for the Seventh Circuit stated as follows concerning the Eberhardt '905 invention:

"It is contended that this combination provides needed rigidity to avoid slippage caused by partial pivoting of the pawl at or near its base..."

Recognizing that each of the claims at issue in the Caveney et al. '869 and '538 patents claims a combination totally different from Eberhardt, so as to provide for pivoting of the pawl rather than rigidity during insertion, the trial court in the instant case stated as follows in comparing the Eberhardt invention and the Caveney inventions:

"It sounds like they (Eberhardt '905) are claiing the exact oppostie kind of virtue from what is claimed in plaintiff's (Caveney) patent..." (bracketed matter added)

Recognizing that each of the claims at issue in the Caveney et al. '869 and '538 patents claims a combination totally different from eberhardt, so as to provide for pivoting of the pawl rather than rigidity during insertion, the trial court in the instant case stated as follows in comparing the Eberhardt invention and the Caveney inventions:

"It sounds like they (Eberhardt '905) are claiming the exact opposite kind of virtue from what is claimed in plaintiff's (Caveney) patent..." (bracketed matter added)

In a desperate attempt to show something in common between the Eberhardt '905 patent and the Caveney et al. '869 and '538 patents, Dennison made the irrelevant discovery that in all three patents the claimed invention includes a "ledge". Dennison admitted throughout the trial that the claims of the '538 patent set forth at least eight features in combination, so the fact that one of those features is a "ledge", and the Eberhardt cable tie also happens to include a "ledge", hardly establishes that the claimed Caveney invention, when viewed "as a whole" as required by 35 U.S.C. 103, is the same as the Eberhardt invention. The Court of Appeals repeatedly criticized Dennison throughout its 47-page opinion for just such superficial treatment of the prior art and the claimed inventions. The Court stated:

"On appeal, Dennison proffers only superficial characterizations of the claimed inventions and the references, as it did before the district court. At no point does Dennison treat any claimed invention or any reference as a whole. The meaningless one-word descriptions of the claimed inventions and reference structures in Dennison's brief are of no use or assistance to this court".

The petition of Dennison for review of the judgment below as to the '869 and '538 patents is so preposterous that they would have the U.S. Supreme Court rule for all time on whether a patent claim, if it includes a "ledge" as one element of the combination, is valid or invalid. Dennison fails to explain how such a position can be reconciled with the Graham v. John Deere decision, supra, which requires that in each case the trial court consider "the scope and content of the prior art" in that case and "the differences between the prior art and the claims at issue" in that case. Indeed, the statute, 35 U.S.C. 103, requires that the trial court consider the claimed "subject matter as a whole".

It is thus respectfully submitted that the one-page decision by the Court of Appeals for the Seventh Circuit in 1974 does not conflict with the 47-page decision by the Court of Appeals for the Federal Circuit in 1985. Moreover, since the Court of Appeals for the Seventh Circuit no longer has jurisdiction to review patent cases, and such jurisdiction rests exclusively with the Court of Appeals for the Federal Circuit, there is no conflict between circuits.

III. THERE IS NO MISAPPLICATION OF RULE 52(a)

Dennison argues an alleged misapplication of the "clearly erroneous" standard of Rule 52(a) by the Court of Appeals. However, the Court of Appeals opinion is clearly based upon errors of law by the trial court.

Indeed there is an entire section in the 47-page Court of Appeals opinion entitled "Misevaluation of the Prior Art" which deals with the errors of law committed by the trial court in evaluating the prior art patents. The Court of Appeals noted the "well established rule of law is that each prior art reference must be evaluated as a whole". Instead, the Court of Appeals found that the trial court misevaluated the Emery and other prior arts patents as follows:

"Three fundamental errors resulted from a disregard of the decisional parameters governing the proper evaluation of prior art. The first, as above indicated, was the picking and choosing of 'teeth', 'ledges', and 'hinges' either absent from the prior art references or there disclosed in entirely distinct form, characteristics, and relationships." (appendix 22a)

Dennison on page 5 of its petition quotes the following statement by the trial court, but leaves out the portion in italics:

"I conclude, therefore, that Emery is specific prior art for wedging the strap between the pawl and the abutment wall inside the head, and doing it in a secure manner so that the strap won't come loose. Now we are back where we started. It did tend to come loose because there was only one tooth."

The trial court and Dennison's counsel repeatedly commented on the serious problems with the cable tie design shown in Emery, and they both recognized that the Emery design would not work well and had to be reconstructed by adding and rearranging various elements if there was to be any secure holding of the strap in the head of the cable tie. As the trial court observed in considering the prior art with respect to the Caveney '146 patent:

"The closest prior art reference is Emery, but Emery had a problem. The strap of the cable tie protruded from the head when the cable tie was in tension, and this protruding strap caused difficulties in the various applications to which the tie was put.

The more specific problem with the protruding strap was that hte cable tie could become undone since there was only one tooth on the Emery tie and any pulling of the protruding end of the strap could easily disengage that one tooth.

So the problem presented by Emery was the so-called release problem. The one engaging tooth could be too easily disengaged by some casual entanglement of the protruding strap with a foreign object."

Dennison's counsel readily admitted at the trial and to the Court of Appeals that the Emery design was no good unless it was reconstructed to solve its serious problems. As Dennison stated in its brief to the Court of Appeals:

"...If the Emery strap were cut off flush with the outer surface of the frame, the chisel edge of the pawl would be gripping only a small portion of the strap increaseing the possibility of inadvertent release. The undesirable alternatives was to leave a portion of the strap projecting from the head".

The Court of Appeals further found that the trial court committed a serious error of law in the manner in which it evaluated the teachings of the individual prior art patents. As the Court of Appeals noted:

"The court did not, as the statute requires, view the prior art from the perspective of one skilled in the art and uninformed by that testimony" (the testimony by the inventor Jack Caveney over a period of several trial days) (bracketed matter added).n1

n1 The Court of Appeals further found that the trial court erred in interpreting the prior art in the following manner:

"And it was a refusal to consider 'how things work' that caused the court to cite isolated minutiae from various references while ignoring critically important structural distinctions that significantly affect the different achievements of which the references and the claimed structures are capable."

In addition, the Court of Appeals found it was a fatal error of law for the trial court to combine the Emery patent with Fein or Litwin, because there was nothing whatever to suggest such a combination except for the Caveney '146 patent in suit.

The trial court never held the Caveney '146 patent invalid over Emery. Instead, the court held it was invalid over the "problems" of Emery on the theory that these various problems could readily be solved. The trial court held that the '146 patent was "obvious in light of the problem presented by Emery". The court meant that it considered Emery's problems and their solution obvious. However, the Court of Appeals ruled as follows:

"The court made specific technical and legal errors in evaluating the individual prior art patents, none of which was even close to the claimed inventions. The court made a basic error under the influence of hindsight when it found in the prior art 'problems' which were not extant in that prior art, but which were problems inventor Caveney had seen and solved and told the court about".

Apart from the multiple errors the trial court made with respect to the Emery patent itself, the trial court made it clear that no prior art patent alone was close to the Caveney inventions. The trial court clearly stated:

"Obviously no previous patent showed the combination at issue here. I'm not persuaded that this invention is similar to any one piece of prior art. Clearly we have a combination that is at issue here, and the issue is whether it was obvious to make the combination."

However, with respect to the trial court's combining Emery with Fein and Litwin to correct the"problems" with Emery, the Court of Appeals held that making such a combination was error.

"Nowhere did the district court indicate where in the prior art there might be a suggestion for combining teachings of the individual references, or how, if there were such a suggestion, such a combination would equal any of those claimed in the patents in suit. There was here simply nothing in the prior art to rebut the presumption of validity to which the patents in suit are statutorily entitled."

If it were needed, the Court of Appeals also found that the manner in which the trial court substituted the DX 79 reconstruction of Emery prepared by Dennison's counsel for the real Emery patent using total hindsight was clearly erroneous and "plain error". The Court of Appeals held:

"The misevaluation applied here was of such a nature as to destroy any aptent. It was plain error."

IV. DENNISON'S ARGUMENT CONCERNING "THE DIFFERENCES" IS WITHOUT MERIT

As is typical of Dennison's presentation on other issues, it seeks to confuse the Court by deliberately misinterpreting the statute, 35 U.S.C.1 03, and the Supreme Court decision in the Graham v. John Deere case. The pertinent section of the statute reads as follows:

"A patent may not be obtained through the invention is not identically disclosed or described as set forth in seciton 102 of this title, if the differences between the subject matter sought to be patented and the prior art are such that the subject matter as a whole would have been obvious at the time the invention was made to a perosn having ordinary skill in the art to which said subject matter pertains." (emphasis added).

The statute requires that the trial judge consider "the differences" between "the subject matter sought to be patented" and the "prior art". The term "subject matter sought to be patented" is of course the claimed invention, which the Court in the Graham v. Deere case termed "the claims at issue". However, once those "differences" are ascertained, the statute dictates that in determining the legal question of obviousness, the subject matter sought to be patented, i.e., the claims at issue, must be considered "as a whole".

The words "as a whole" are critical. Thus, when a trial court is considering thelegal question of obviousness, it is required by the statute to consider the claims at issue "as a whole", and not some individual element it might erroneously conclude to be the "essence" of the invention.

In its 47-page opinion, the Court of Appeals explained how the trial court was led by Dennison's counsel to violate the requirement of the above statute by reducing each of the patents in suit to its so-called "essence", i.e., a "ledge" or a "hinge", when considering the ultimate legal question of obviousness. The Court of Appeals held that approach was error because the statute requires that the claimed invention be considered "as a whole" when determining whether or not the invention is obvious.

Dennison's attempt to confuse the Court in its petition by unduly focusing on the word "differences" in the statute and in the Graham v. Deere opinion is regrettably all too typical of its arguments throughout its petition. As the Court of Appeals correctly observed in noting the errors by the trial court in reducing each of the three patents to its so-called "essence":

"The district court here lost sight of the fundamental rule that 'it is the claims that measure the invention'" Aro Mfg. Co. Inc. v. Convertible Top Replacement Co., Inc., 365 U.S. 336, 339, 128 USPQ 354, 356-57 (1961); Bandag, Inc. v. Al Bolser's Tire Stores, Inc., 750 F.2d 903, 922, 223 USPQ 982, 996 (Fed. Cir. 1984); Jones v. Hardy, 727 F.2d 1524, 1528, 220 USPQ 1021, 1022 (Fed. Cir. 1984).

V. DENNISON'S MISREPRESENTATIONS

It is recognized that this brief is not the place to review the numerous misrepresentations which Dennison made both to the trial court and the Court of Appeals in the instant case. The misrepresentations made to the trial court are discussed throughout the 47-page opinion by the Court of Appeals, and a sampling of the misrepresentations made to the Court of Appeals are discussed in the last three pages of the Court of Appeals decision in a section entitled "Dennison's Presentation on Appeal". The Court of Appeals as a result awarded Panduit "double its costs on appeal". However, Panduit feels that a few words/on the foregoing subject are in order, because in its petition (p. 14, f.n.3) Dennison not only denies its own misrepresentations, but goes further and attacks the Court of Appeals for "publicly indicting Dennison's counsel".

We will take but a single example to make the point which we feel should be made. The Caveney et al. '538 patent describes repeatedly a pawl which is hingedly mounted on a hinge which when in compression is "rigid non-collapsible". The hinge is never described in any other way except as "rigid non-collapsible". However, during the prosecution of the '538 patent before the U.S. Patent and Trademark Office, Panduit attempted to add to the patent application a new and different embodiment where the hinge could in fact collapse.

The patent examiner refused to permit the new embodiment to be added because it was totally different from the invention described in the patent application as filed and thus constituted objectionable "new matter".

The Board of Appeals affirmed the decision by the Examiner, and that was the end of the matter. The new embodiment where the hinge could collapse was never added to the patent application.

In an attempt to confuse the Court of Appeals with respect to the '538 patent, Dennison contended in its brief:

"...there is collapse under heavy load".

The foregoing was a serious misrepresentation, because in every instance the patent specifies that the hinge when loaded in compression is "rigid non-collapsible". The Court of Appeals recognized the contention by Dennison was false, noting as follows:

"The quoted phrase related to an entirely different embodiment that was ruled new matter and never added to the '538 application."

Dennison now retaliates against the Court of Appeals in a long footnote on page 14 of its petition contending there was an "unfortunate error by the Federal Circuit" and vehemently denying that the embodiment having a collapsible hinge was a "different embodiment". Dennison contends that the Court of Appeals "compounded its error by publicly indicting Dennison's counsel".

There was a time early in the trial when Dennison felt less desperate and was more candid about the facts. At an early stage of the trial, Dennison not only admitted that the collapsible hinge was a different embodiment and was never added to the '538 patent, but their counsel even sought and obtained an admission of that fact from Panduit's counsel. In the following quotation from the trial record, Dennison's counsel was Mr. Ryther, Panduit's counsel was Mr. Pigott, and Mr. Caveney was the inventor of the '538 patent:

MR. CAVENEY: The specification clearly says non-collapsible.

MR. RYTHER: I agree with you on that.

****

MR. RYTHER: And perhaps Mr. Pigott would just agree that this attempt to amend the application was not permitted by the Patent Office. The issue went to the Board of Appeals,and the Board of Appeals agreed with the Examiner, and you weren't able to get this feature (the collapsible hinge) into the '538 patent." (bracketed matter added).

MR. PIGOTT: That's true.

THE COURT: This was not an attempt to substitute but to add.

MR. PIGOTT: To add another embodiment where under extraordinary loads, it could collapse. And they wouldn't permit it to be added because it was completely at odds with what was already disclosed.

* * * *

MR. RYTHER: Well with that extensive affirmative statement by Mr. Pigott, I'll go on.

The foregoing is believed appropriate to show by at least one example that Dennison's attempt to retaliate for the so-called indictment of its counsel by the Court of Appeals is simply further evidence of why the Court of Appeals found it necessary to devote three pages of its opinion to Dennison's misrepresentations in the first place. The foregoing further affords insight as to why the Court of Appeals felt compelled to hold:

"Dennison's presentation on appeal is disingenuous, containing mischaracterizations, misleading statements, and improper submissions."

CONCLUSION

The trial court closed its opinion with the following statement directed to the Court of Appeals for the Federal Circuit:

"I have been going back and forth on this thing in my mind throughout the trial. It gives me great comfort to know that I am just the first stop on this trip. Everything I have said here can be analyzed just as well by the Court of Appeals for the Federal Circuit. All the documents are here, the testimony is there for them to read, and if they come to a different conclusion than I, so be it. This is a case in which the credibility of the witnesses has really played a very small part. It is primarily it seems to me a matter of applying your experience to the undisputed facts. It is a matter of interpretation. What do these things teach? What would they teach a person of ordinary skill in the art?"

The Court of Appeals, in its 47-page decision, clearly applied the standards of patentability that were established by this Court in the Graham v. John Deere case. There is no reason for review of that decision and the Petition for Certiorari should therefore be denied.

Respectfully submitted,

CHARLES F. PIGOTT, Jr., Pigott & Gerstman, Ltd., Two North LaSalle Street, Suite 2010, Chicago, Illinois 60602