Rehearing and Rehearing En Banc Denied March 17, 1980.
MARKEY, Chief Judge.
E. I. du Pont de Nemours & Company (DuPont) appeals from a judgment holding invalid its United States patent No. 3,063,189 (DuPont patent). Berkley & Company, Inc. (Berkley) appeals the dismissal of its antitrust counterclaim and denial of its motion for attorney's fees and costs. We reverse the judgment of invalidity, remand for a new trial on that issue, and affirm the dismissal of the counterclaim.
The patent in suit, like most patents, discloses a proposed solution for a problem. When colored fishing lines are used, to enable the fisherman to see them above water, the lines are thought to be visible underwater to the fish.
The solution proposed by Ed Keller, DuPont's employee, was a fishing line containing fluorescent dye. The dye would be activated, i.e., the line would glow, in response to the ultraviolet component of daylight, making it "visible above water." At the same time, because water would absorb the dye-activating ultraviolet component of daylight, the line would be "relatively invisible" below the water. Thus one line would have the characteristics of high visibility above water and low visibility below water. Keller filed a U.S. patent application on January 2, 1962. DuPont introduced its fluorescent dyed line to the marketplace in August, 1962. The DuPont patent issued on November 13, 1962
On August 1, 1975, DuPont sued Berkley for willful infringement of claims 1, 2, 5, 6 and 8 of the DuPont patent. Berkley denied infringement throughout a three-year discovery period, asserting that its line contained an "optical brightener" in place of fluorescent dye. Two weeks before trial, Berkley admitted that claims 2, 5 and 6, if valid, were infringed by its product. DuPont thereupon deleted claims 1 and 8 from its charge of infringement.
For its defense, Berkley alleged (1) that the DuPont patent was invalid for lack of utility, novelty and nonobviousness, and (2) that the patent was rendered invalid by DuPont's fraudulent conduct before the U.S. Patent and Trademark Office (PTO).
For its counterclaim, Berkley alleged that DuPont violated Section 2 of the Sherman Act by procuring the patent through fraud and by attempting to enforce the patent with knowledge of its invalidity.
Over Berkley's objection, the trial court ordered a bifurcated trial, the first part to include the allegations that DuPont obtained the patent by fraud and enforced it believing it invalid. The second part, on the remaining elements of the antitrust claim, would be held if the jury found for Berkley on fraud or enforcement.
Following a three-week trial, the jury returned a general verdict for Berkley on DuPont's infringement claim. The jury answered these, and only these, special interrogatories:
The court entered judgment, holding the DuPont patent invalid and dismissing the complaint and counterclaim. Both parties filed, and the court denied, motions for judgment notwithstanding the verdict or for a new trial.
Embittered in battle below, the parties request this court to resolve over 25 issues and subissues. The trial court is directly charged with 11 reversible errors. Couched in accusatory and turgid terminology, the briefs set forth numerous bits and pieces of conflicting testimony and documentary evidence, from which we are asked to draw a plethora of factual inferences. The effect is neither a prejudicing of this court,
A. Requirement for Retrial
Absent error affecting the substantial rights of the parties, neither reversal nor a new trial is required. 28 U.S.C. § 2111 (1976); Fed.R.Civ.P. 61.
Respecting the issue of patent validity under the statute, the court asked the jury to state only whether it found for Berkley "solely" on obviousness. The jury's "No" answer means that there were six possible bases for its verdict: (1) the invention would have been obvious and was lacking in utility, (2) the invention would have been obvious and was lacking in novelty, (3) the invention would have been obvious and was lacking in both utility and novelty, (4) the invention would not have been obvious, but was lacking in utility, (5) the invention would not have been obvious, but was lacking in novelty, or (6) the invention would not have been obvious, but was lacking in novelty and utility.
If one or more substantial grounds for the verdict presented no jury question and should have been decided as a matter of law in DuPont's favor, reversal and a new trial are required, notwithstanding the presence of other grounds that could have supported the verdict. Morrissey v. National Maritime Union, 544 F.2d 19, 26-27 (2d Cir. 1976); Albergo v. Reading Co., 372 F.2d 83, 85-86 (3d Cir. 1966), cert. denied, 386 U.S. 983, 87 S.Ct. 1284, 18 L.Ed.2d 232 (1967); Fatovic v. Nederlandsch-Ameridaansche Stoomvaart, 275 F.2d 188, 190 (2d Cir. 1960); North American Graphite Corp. v. Allan, 87 U.S.App.D.C. 154, 156, 184 F.2d 387, 389 (D.C. Cir. 1950); Traveler's Insurance Co. v. Wilkes, 76 F.2d 701, 705 (5th Cir.), cert. denied, 296 U.S. 604, 56 S.Ct. 120, 80 L.Ed.2d 428 (1935); Patton v. Wells, 121 F. 337, 340 (8th Cir. 1903). See also Sunkist v. Winckler & Smith Co., 370 U.S. 19, 29-30, 82 S.Ct. 1130, 1135-1136, 8 L.Ed.2d 305 (1962) (erroneous instruction); United Pilots Ass'n v. Halecki, 358 U.S. 613, 619, 79 S.Ct. 517, 520, 3 L.Ed.2d 541 (1959) (failure to submit jury question); Maryland v. Baldwin, 112 U.S. 490, 493, 5 S.Ct. 278, 279, 28 L.Ed. 822 (1884) (admission of evidence). The utility issue presented no jury question
Berkley concentrated its briefs and oral argument on non-utility, fraud, knowing enforcement of an invalid patent, gross negligence, inequitable conduct, and anticompetitive intent, believing, says Berkley, that that evidence shows the patent invalid. Having viewed all of the evidence on validity most favorably to Berkley, and having given Berkley the benefit of every reasonable inference, Davis v. Burlington Northern, Inc., 541 F.2d 182, 186 (8th Cir.), cert. denied, 429 U.S. 1002, 97 S.Ct. 533, 50 L.Ed.2d 613 (1976), we cannot say on this record, and in view of the errors occurring below, that Berkley carried its burden of proving the DuPont patent invalid.
Though the trial court instructed the jury that an invention must "operate or function in the manner claimed," and also that an invention "need not work perfectly in order to be useful," the treatment of the utility issue at trial, beyond any error in instructions thereon,
The complaint originally asserted infringement of five claims:
It is axiomatic that "one who appropriates the teachings of a patent may not deny the utility of the invention." Tapco Products Co. v. Van Mark Products Corp., 446 F.2d 420, 428 (6th Cir.), cert. denied, 404 U.S. 986, 92 S.Ct. 451, 30 L.Ed.2d 370 (1971); Monogram Manufacturing Co. v. Glemby, 136 F.2d 961, 963 (2d Cir.), cert. denied, 320 U.S. 778, 64 S.Ct. 93, 88 L.Ed. 467 (1943); Kansas City Southern Railway v. Silica Products Co., 48 F.2d 503, 505 (8th Cir.), cert. denied, 284 U.S. 626, 52 S.Ct. 11, 76 L.Ed. 533 (1931). Hence, the first flaw was the failure to recognize that Berkley's admission, that its fishing line fell within
The second flaw was the failure to recognize that the presumption of utility created by issuance of the patent, 35 U.S.C. § 282, Dashiell v. Grosvenor, 162 U.S. 425, 432, 16 S.Ct. 805, 807, 40 L.Ed. 1025 (1896); Strong-Scott Manufacturing Co. v. Weller, 112 F.2d 389, 394 (8th Cir. 1940); Metropolitan Engineering Co. v. Coe, 64 App.D.C. 315, 317, 78 F.2d 199, 201 (D.C. Cir. 1935); Superior Hay Stacker Manufacturing Co. v. Dain Manufacturing Co., 208 F. 549, 557 (8th Cir. 1913), is strengthened when others, as Berkley did here, have copied the invention, Superior Hay Stacker Manufacturing Co. v. Dain Manufacturing Co., id. at 557, and when, as it did here in both DuPont's and Berkley's hands, the invention has achieved commercial success, Western Electric Co. v. LaRue, 139 U.S. 601, 608, 11 S.Ct. 670, 672, 35 L.Ed. 294 (1891); Continental Can Co. v. Anchor Hocking Glass Corp., 362 F.2d 123, 124 (7th Cir. 1966); Panduit Corp. v. Stahlin Bros. Fibre Works, Inc., 298 F.Supp. 435, 442 (W.D.Mich.1969), aff'd, 430 F.2d 221 (6th Cir. 1970), cert. denied, 401 U.S. 939, 91 S.Ct. 932, 28 L.Ed.2d 218 (1971).
Berkley, for the first time on appeal, says its non-utility position relates to the "ceases to glow" language of withdrawn claims 1 and 8.
The assertion of non-utility rests on the limited excitability of fluorescent dyes by the "visible" component of sunlight; hence, says Berkley, DuPont's line does not entirely cease to glow as long as visible light is present. Berkley then defines relative invisibility under water as less visibility than non-fluorescent line, and says DuPont's line fails that objective because sufficient visible light penetrates clear water to excite the fluorescent dye in the line.
Berkley introduced photographs taken in clear water (the Crystal River and the Bermuda Triangle), and purportedly showing DuPont's line more visible than non-fluorescent lines at depths as great as 100 feet,
DuPont countered with the Johnson report, comparing the relative visibility of DuPont's fluorescent line and a similar but non-fluorescent nylon monofilament line in six different types of water, and with witnesses Shields and Cullerton, who said DuPont's line lost fluorescence inches below the surface of Lake McBride. Johnson's
Non-utility of the invention is not established by the recitation in claims 1 and 8 that the dye "rapidly ceases to glow upon removal of ultraviolet light," when the claims are read, as they must be read, in their entirety.
Perfection under all conditions is not required,
It is instructive on the issue of utility that any imperfections respecting some continued glow under visible light in clear water did not deter Berkley from copying
Thus, the issue of whether the patent was invalid for lack of utility should not have gone to the jury and should have been decided as a matter of law in DuPont's favor. Its submission, for any purpose, constituted prejudicial error.
A patent is invalid under 35 U.S.C. §§ 102(a)-102(b)
Oral testimony alone has been held insufficient to prove a prior use, Zachos v. Sherwin-Williams Co., 177 F.2d 762, 763 (5th Cir. 1949). The more widespread view, however, is that unsupported oral testimony can be sufficient but must be regarded with suspicion and subjected to close scrutiny. Miner v. T. H. Symington Co., 250 U.S. 383, 386, 39 S.Ct. 542, 543, 63 L.Ed. 1045 (1919); Deering v. Winona Harvester Works, 155 U.S. 286, 300, 15 S.Ct. 118, 123, 39 L.Ed. 153 (1894); Jones Knitting Corp. v. Morgan, 361 F.2d 451, 455 (3d Cir. 1966); Becker v. Electric Service Supplies Co., 98 F.2d 366, 368 (7th Cir. 1938); Farmhand, Inc. v. Lahman Manufacturing Co., 192 U.S. P.Q. 749, 755 (D.S.D.1976), aff'd, 568 F.2d 112 (8th Cir.), cert. denied, 436 U.S. 913, 98 S.Ct. 2254, 56 L.Ed.2d 414 (1978); See The Barbed Wire Patent, supra, at 284-85, 12 S.Ct. at 447; Eibel Process Co. v. Minnesota & Ontario Paper Co., 261 U.S. 45, 60, 43 S.Ct. 322, 327, 67 L.Ed. 523 (1923).
(1) The McCoy Line
In 1964, DuPont learned of a chartreuse fluorescent "Glo-Line" being sold by John McCoy in Seattle. McCoy told Greenwood, a DuPont salesman sent to investigate, that DuPont's 1949 records should contain inquiries from McCoy respecting fluorescent dyes useful in nylon. Greenwood found a sample of DuPont fluorescent dye, dated December 1949, in McCoy's possession. Greenwood's call reports reflect McCoy's allegations of having dyed nylon for over 15 years. McCoy said he had dyed yarn for lures since 1924. In a 1964 letter, McCoy said he had processed his Glo-Line since
Five witnesses (3 live, 2 by deposition) said they had seen or sold McCoy's fluorescent chartreuse fishing line at least once in the mid-1950's. Kawahara said he sold it in his Seattle store before the 1958 introduction of DuPont's non-fluorescent line. Severeid said he saw McCoy's chartreuse line in Kawahara's store before transferring to his new office in August 1958. Sivertsen said he saw McCoy's chartreuse line before moving into his new store in 1957. Schalkle said he saw McCoy's chartreuse line before his transfer to a new job in 1954. Earling said he saw McCoy's chartreuse line about the time he was married in 1954.
Thus five witnesses claiming to have seen McCoy's chartreuse fishing line testified from memory to events of twenty years past. Though accompanied by reference to concurrent events, their testimony was inconsistent with the evidence produced by McCoy, the alleged prior user, whose one consistent indication was that his earliest claimed use of chartreuse fishing line was after Keller's invention, and who in 1964 possessed no chartreuse dye manufactured prior to 1963. Severeid, Sivertsen, Schalkle and Earling had no corroborating documentary or physical evidence. All five witnesses said they saw only McCoy's chartreuse line, and though all said they saw it between 1954 and 1958, Berkley declined to review McCoy's available and offered sales records for 1952 through 1958. McCoy identified a 1964 invoice (two years after the DuPont patent issued) as representing one of his first sales of fluorescent line. McCoy's 1954 ad did not mention fluorescent fishing line, and his 1949 dye sample does not evidence use of fluorescent dye in a fishing line. The only physical evidence produced was a spool of line Kawahara said was one of the first he had purchased, and DuPont's unchallenged tests proved that line had not been made prior to 1962.
Berkley thus failed as a matter of law to carry its burden of proving prior use by McCoy. The attempt rests solely on uncorroborated oral testimony concerning events of long ago, contradicted by McCoy himself and by unchallenged results of scientific tests. Judged by appropriate legal standards, that testimony had insufficient probative value to make out a case of prior use that a jury could have found clear and convincing. Thus prejudicial error occurred in the instruction to the jury that it could find the DuPont patent invalid as anticipated by the McCoy line.
(2) The Cohantic Line
A spool of "Cohantic" line was allegedly discovered by Berkley in a fishing line "morgue" of the Cortland Line Company in New York. Placed under a strong artificial ultraviolet light, the line gave off a faint glow, about 3% of that of DuPont's patented line. The glow was a little more in portions of the spool that had been covered for years by a rubber band and thus protected from light and oxidation. The Cohantic line did not glow in sunlight.
Berkley's expert Stearns compared the glow of the Cohantic line to the inherent glow of a piece of undyed, relatively stiff, fishing leader of unknown composition. Finding a difference in spectra and intensity, Stearns concluded that the glow in the Cohantic line was caused by the presence of a "brightener," by which he apparently meant a fluorescent dye.
DuPont's expert Jenkins found that the glow spectra of the Cohantic line and the inherent glow of undyed line made of the same nylon were substantially identical.
DuPont's request that we find fluorescent dye absent from the Cohantic line, and Berkley's request that we find it present,
The trial court correctly submitted the evidence of the Cohantic line to the jury. The absence of indication that the jury found the patent invalid because of the Cohantic line, the gaps and conflicts in the Cohantic line evidence, and the prejudicial errors in submission of the non-utility and McCoy line matters, all preclude a sustaining here of the jury's invalidity verdict on the basis of the Cohantic line evidence.
As this court noted in Woodstream Corp. v. Herter's, Inc., 446 F.2d 1143, 1149 (8th Cir. 1971), application of 35 U.S.C. § 103
Though the ultimate question of obviousness is subject to evaluation on appeal, Flour City Architectural Met. v. Alpana Aluminum Products, Inc., 454 F.2d 98, 106 (8th Cir. 1972); see Sakraida v. Ag Pro, Inc., 425 U.S. 273, 280, 96 S.Ct. 1532, 1536, 47 L.Ed.2d 784 (1976); Graham v. John Deere Co., supra at 17, 86 S.Ct. at 693, we decline an independent evaluation on the present record. In the ordinary case, the appellate court has the benefit of the factfinder's conclusion that the invention would or would not have been obvious, and the facts and reasons underlying the conclusion. Here the jury announced no conclusion, either way. There are no findings of fact, and the trial court said it was making no determination of the question.
Even in non-jury cases, where the trial court made no findings or conclusions on obviousness, appellate courts have declined
See also Kockum Industries, Inc. v. Salem Equipment, Inc., 467 F.2d 61, 64 (9th Cir. 1972), cert. denied, 411 U.S. 964, 93 S.Ct. 2140, 36 L.Ed.2d 684 (1973); Sutherland Paper Co. v. Grant Paper Box Co., 183 F.2d 926, 935-36 (3d Cir.), cert. denied, 340 U.S. 906, 71 S.Ct. 281, 95 L.Ed. 655 (1950).
As the Supreme Court said in Graham, the obviousness-nonobviousness conclusion rests on factual inquiries, which were to have been resolved in the first instance in this case by a jury. The record reflects extensive conflicts in testimony, and no indication as to how, if at all, the jury resolved those conflicts. These considerations, coupled with errors which appear to have deprived the jury of a true picture of the issue, dictate the avoidance of potential injustice inhering in an attempted resolution of the required factual inquiries on the basis of the cold paper record before us.
Having resolved the factual inquiries necessitated by the evidence presented to it, the jury at retrial must, if so requested, then reach a final conclusion respecting obviousness.
The parties are entitled to a consideration in the first instance of all the facts touching the obviousness issue, by a factfinder who sees and hears the witnesses, and to that consideration free of the errors that occurred below.
(1) The French Line Error
A fishing line manufactured and sold in France in the 1950's and allegedly identical to DuPont's invention was allowed into evidence. DuPont challenged its admissibility, arguing that the jury would erroneously treat it as evidence of prior art.
A prior use or sale constitutes "prior art" only if it occurs "in this country." 35 U.S.C. § 102. Hence prior use in a foreign country is not prior art for the purpose of determining obviousness under section 103, and evidence respecting the French line was inadmissible to prove prior art, the line having never been used or sold in this country.
In admitting the evidence, the court instructed the jury to consider it "solely as it bears on the state of the art and as it relates to the ultimate question of obviousness." (Emphasis ours). That instruction supplied no guidance from which the jury could be expected to have distinguished the French line from the prior art. The court's instruction, considered as a whole, was thus misleading and erroneous.
Berkley's brief mistakenly tells us that the court phrased its instruction in terms of "the skill in the art."
Evidence demonstrating contemporaneous foreign invention by another has been considered even though it does not qualify as prior art. Stamicarbon, N. V. v. Escambia Chemical Corp., supra note 28; Reeves Bros., Inc. v. U. S. Laminating Corp., 417 F.2d 869, 872 (2d Cir. 1969). The similarity between contemporaneous invention and prior art dictates, however, that evidence of the former be cautiously admitted in a jury trial. The trial judge must carefully instruct the jury that the evidence is merely one possible indicium of obviousness. See Reeves Bros., Inc. v. U. S. Laminating Corp., id., at 872. That the same invention was contemporaneously made elsewhere may or may not, in the light of all the circumstances, be some indication that the invention would have been obvious, as the statute requires, to "one of ordinary skill in the art." Nothing should be more clear in the law of patents than the concept that the same patentable invention may be contemporaneously made by more than one inventor.
(2) The Presumption of Validity Error
Because the French and Cuculo patents were classified in files searched by the examiner, DuPont sought this instruction:
Berkley objected, and the court omitted the requested statement.
The statutory presumption of validity
The PTO's function entails a thorough scrutiny of prior art references.
Assuming, arguendo, that Berkley's expert is correct in his generalized assertion at trial that references may occasionally be missing from the files, Congress, in enacting the presumption of validity, chose to assume prima facie that an oversight of relevant prior art did not occur. In view of the hundreds of patents in a single class or subclass, a requirement that the examiner cite every patent inspected would unreasonably retard the examination process. Thus, absent contrary evidence, it is improper to conclude that references not specifically cited by the examiner, but classified in areas he searched, were not considered by him. Cf. Hobbs v. United States, 451 F.2d 849, 863-64 (5th Cir. 1971).
The trial court's instruction that the "presumption does not extend or exist as to prior art patents or publications which do not appear from the record of the file wrapper," and the refusal to give DuPont's requested instruction, left the jury unapprised of the full extent of the statutory presumption of validity.
II. Fraud and Antitrust
The crux of Berkley's antitrust counterclaim was that DuPont knew, or in the exercise of due care should have known, of information that rendered its invention unpatentable but chose to fraudulently conceal that information from the examiner during prosecution of its patent application and further chose to ignore even more such information and enforce the patent, all in a scheme to maintain a monopoly in the fluorescent monofilament fishing line market in violation of Section 2 of the Sherman Act.
Because the jury returned its verdict for DuPont on Berkley's allegations of fraud and patent enforcement, the trial court immediately dismissed the counterclaim, finding the second part of the trial unnecessary.
A. Gross Negligence
Accusing DuPont of "gross negligence" in its investigation of facts allegedly placing it on notice that one or more claims of its patent might be invalid, Berkley charges error in the trial court's refusal to instruct and submit to the jury an interrogatory respecting DuPont's gross negligence prior to issuance and enforcement of its patent. The accusation rests on DuPont's conduct respecting the McCoy line, the Starlite line, and reports on underwater visibility of DuPont's fluorescent line product.
In 1964, two years after its patent issued, when DuPont learned of McCoy's Glo-Line product, its investigation of the McCoy story was immediate and thorough. Resulting information concerning the nature and timing of McCoy's use of fluorescent dye was decidedly vague and indefinite. McCoy's statements were inconsistent. No physical or documentary evidence establishing McCoy as a prior user of fluorescent monofilament fishing line ever appeared.
Under all the circumstances, DuPont was not guilty of gross negligence in concluding that McCoy's original vague and inconsistent implication of a prior use was groundless. To require patentees to do more than was here done, when faced with such unsubstantiated allegations, would put them at the mercy of every crank and charlatan who suddenly "remembers" a prior use of the patentee's invention after the patent is issued.
In 1962, Sunset, the company manufacturing Starlite line, was a sales agent for DuPont fishing line. When DuPont's patent issued, a copy went to all sales agents. Sunset received its copy on December 14, 1962, and on December 18, its president Agnew wrote DuPont:
On January 4, 1963, Tyner of DuPont thought the Starlite line might affect validity of the DuPont patent. Consequently, in early 1963, Keller was sent to investigate Agnew's assertion. Agnew said the Starlite line was a phosphorescent fly line, charged up with a flashlight and used at night, to glow continuously for 10 or 15 minutes after the light was removed, above and under water.
Though DuPont might have tested the Starlite line for the presence or absence of fluorescent dye,
At DuPont's direction, Dr. Johnson had completed his tests and a report on underwater visibility of DuPont's fluorescent line on March 14, 1962, several months before issuance of the DuPont patent. Johnson tested the line under a wide variety of conditions and concluded that it worked as described in the patent application and was useful. Berkley's expert Stearns said Johnson had prepared "a very good scientific reliability report" of which "any scientific lab would be proud," and that Dr. Johnson's tests were all that was necessary to determine how the fishing line would work.
The report's suggestion that visibility of the line bore an inverse relationship to clarity of the water does not contradict or otherwise invalidate Johnson's conclusion. Nor was his conclusion contradicted by reports of Roberts and Lau to DuPont before suit. Roberts said only that the line did not completely disappear underwater and Lau's statement was based solely on observations made in crystal clear water and thus was not inconsistent with Johnson's report. Johnson's conclusions were corroborated by McNally, a scuba diver hired by DuPont to make underwater observations of its line.
Citing no specific conduct by DuPont, Berkley adds this vague allegation:
The notion that DuPont could be found guilty of gross negligence for failure to anticipate a jury's verdict is meritless. Moreover, the jury's verdict may have rested on non-utility, with no basis in the prior art. None of the prior art or other information known to DuPont, in any event, so plainly rendered its invention unpatentable that DuPont could be held guilty of gross negligence in accepting its patent and exercising its right to seek legal enforcement in the courts.
There being no evidence warranting submission of a gross negligence issue to the jury, the trial court committed no error in refusing to give Berkley's requested instruction and interrogatory.
B. Jury Instructions on Withholding the Johnson Report
Focusing exclusively upon one paragraph of an 8 paragraph instruction (No. 21), Berkley maintains that the court erroneously permitted the jury to find fraud only if DuPont willfully withheld "prior art" from the PTO. The challenged paragraph describes Berkley's burden of proof and speaks only of withholding "prior art." Thus, says Berkley, if the jury found that DuPont withheld scientific data, i. e., the Johnson report, but had not withheld "prior art," it could have erred in finding DuPont not guilty of fraud.
Jury instructions must be viewed in their entireties and verdicts will not be overturned by picking and choosing words from an instruction without regard to the realities of the trial. Fields v. Chicago Rock Island and Pacific Railroad, 532 F.2d 1211, 1213-14 (8th Cir. 1976); Jiffy Markets, Inc. v. Vogel, 340 F.2d 495, 500 (8th Cir. 1965).
Instruction No. 21, read as a whole, emphasizes the requirement for "[a]bsolute honesty and good faith disclosure," the prohibition of "suppression of pertinent facts," and the "rule of absolute candor with the Patent Office." It states that an "omission of material facts" may constitute "fraud" rendering a "patent invalid even if the fraud pertains to only one claim." Thus the instruction as a whole clearly conveys the concept that the withholding of any relevant material, described in the instruction as "prior art," "facts," and "information," may form the basis for a finding of fraud. Berkley at trial stressed the withholding of the Johnson report. There was no real possibility that the jury was misled into believing that it could not consider the withholding of the Johnson report in reaching its decision on fraud.
C. Interrogatories 2 and 3 42
Berkley contends that the court erred in phrasing Special Interrogatory 2 as "Did plaintiff obtain the . . . [DuPont] patent from the patent office by fraud?," and Special Interrogatory 3 as "Did plaintiff assert its patent against Berkley knowing that it was invalid?"
Berkley sought interrogatories asking whether DuPont had obtained by fraud or enforced, knowing to be invalid, "any one or more claims," arguing that fraudulent conduct respecting one claim renders the entire patent invalid, and that enforcement of one claim knowing it to be invalid renders the patentee liable under the antitrust laws even if the remaining claims asserted are valid.
The submission and form of interrogatories to the jury are matters within the sound discretion of the trial court, and review is confined to a determination of whether there was an abuse of discretion. Tights, Inc. v. Acme-McCrary Corp., 541 F.2d 1047, 1060 (4th Cir.), cert. denied, 429 U.S. 980, 97 S.Ct. 493, 50 L.Ed.2d 589 (1976); Dreiling v. General Electric Co., 511 F.2d 768, 774 (5th Cir. 1975); McDonnell v. Timmerman, 269 F.2d 54, 58 (8th Cir. 1959).
Jury Instruction No. 21 included:
Being so instructed, the jury, in giving its "no" answer to Interrogatory No. 2, had before it the concept that DuPont had to have procured every claim of its patent free of fraud. The contested issue having thus been adequately presented to the jury, it cannot be said that the court abused its discretion in phrasing Interrogatory 2.
Concerning Interrogatory No. 3, Berkley speculates that:
D. Exclusion of "Intent" Evidence
Berkley contends that the court erred in excluding evidence allegedly demonstrating that DuPont enforced its patent with intent to destroy competition.
A trial judge can and should exclude evidence when convinced that it will create a danger of prejudice outweighing its probative value.
Berkley offered the deposition of Hilberg, a DuPont patent attorney, to prove that DuPont asserted its patent against Scientific Anglers, a company that had been conducting fluorescent fly line demonstrations, thus admitting that its patent encompassed the prior art fly lines of Olson and Wood and was therefore invalid.
Hilberg's deposition was decidedly imprecise, uncertain, and seriously lacking in probative value. The two Hilberg sentences quoted by Berkley were contradicted by DuPont, which consistently maintained that it never asserted its patent against Scientific Anglers, and by Scientific Anglers itself when it told Berkley that DuPont had never asserted the patent against it.
The trial court excluded Hilberg's deposition, correctly finding it "shakey at best, its probity and relevance dubious, and potential for prejudicing DuPont's case substantial." No abuse of discretion occurred in that exclusion.
Berkley offered three exhibits from the deposition of Harry Haon, a DuPont employee. D-7 was a pre-suit Haon memorandum stating that Berkley was infringing, comparing the potential loss from that infringement with the cost of litigation, recommending that a legal opinion be obtained on enforceability of the patent, and, if that opinion be favorable, that suit be filed before Berkley introduced its line at a trade show and became entrenched in its infringement. E-7 was a draft of a letter to the DuPont Executive Committee, about the proposal to sue Berkley, estimating the loss from infringement, referring to a legal opinion, and viewing the cost of suit, if lost, as justified by its impact on Berkley. F-7 was a DuPont press release announcing the suit against Berkley.
The exhibits contain no indication that DuPont believed its patent was invalid.
By definition, every good faith effort to enforce a patent involves a legitimate anticompetitive intent.
The trial court did not abuse its discretion in excluding the Haon evidence under Fed.R.Evid. 403, on the ground that it was "prejudicial" and "not sufficiently probative."
E. Inequitable Conduct
Defining "inequitable conduct" as an intentional misrepresentation or non-disclosure to the PTO
Berkley's attempt to base its antitrust counterclaim on "inequitable conduct" has no basis in law.
A patent procured by fraud by definition would not have issued but for the misrepresentation or non-disclosure. The patent is invalid as improperly issued and the patentee has illegally received exclusionary rights he would not otherwise have. In those circumstances, as the Supreme Court held in Walker Process, the severe sanctions of the Sherman Act may be warranted.
However, where the patent was not procured through non-disclosure, the patent would properly issue and the patentee would receive no exclusionary rights to which he was not legally entitled under the patent laws. Hence, no basis exists for a charge of illegal monopolization or attempt to monopolize. Refusal to enforce the patent has been considered adequate sanction. Mueller Brass Co. v. Reading Industries, Inc., 352 F.Supp. 1357, 1371 (E.D.Pa.1972), aff'd, 487 F.2d 1395 (3d Cir. 1973); SCM Corp. v. Radio Corporation of America, 318 F.Supp. 433, 472 (S.D.N.Y.1970); Corning Glass Works v. Anchor Hocking Glass Corp., supra note 52, at 470.
Berkley further argues, citing no authority, that if inequitable conduct standing alone is an insufficient basis for an antitrust cause of action, it is such a basis when combined with an anticompetitive intent in bringing suit on the patent. We disagree. Berkley cites excluded exhibits D-7, E-7, and F-7. But those exhibits focus exclusively on events occurring after issuance of the patent. They bear no relation to DuPont's conduct before the PTO and, if they had been admissible, they could not bootstrap that non-fraudulent conduct, not otherwise actionable under the antitrust laws, into the more egregious Walker Process type conduct.
The trial court gave no reasons for denying Berkley's requested instruction on inequitable conduct as a defense of non-enforceability.
DuPont's contention that Berkley never pled an inequitable conduct defense is without merit. Berkley's inequitable conduct theory differs from its expressly pled allegation of fraud only in the degree of materiality of the information allegedly withheld from the PTO. The pleadings placed DuPont on notice of the type of conduct that would be litigated, and that is all that is required. See Conley v. Gibson, 355 U.S. 41, 47, 78 S.Ct. 99, 102, 2 L.Ed.2d 80 (1957).
This circuit has recognized that inequitable conduct short of fraud can be a defense in a patent infringement suit. Pfizer, Inc. v. International Rectifier Corp., 538 F.2d 180, 185 (8th Cir. 1976), cert. denied, 429 U.S. 1040, 97 S.Ct. 738, 50 L.Ed.2d 751 (1977). To make out a case of inequitable conduct Berkley must prove, by "clear, unequivocal and convincing evidence," Pfizer, Inc. v. International Rectifier Corp., id. at 187, that DuPont's conduct made it impossible for the PTO to fairly assess the patent application against the prevailing statutory criteria, In re Multidistrict Litigation Involving Frost Patent, 540 F.2d 601, 604 n. 9 (3d Cir. 1976), and that it involved "some element of wrongfulness, willfulness or bad faith." Pfizer, Inc. v. International Rectifier Corp., supra at 186. If the information be irrelevant, its innocent or negligent misrepresentation or non-disclosure, whether or not intentional, does not amount to inequitable conduct. Pfizer, Inc. v. International Rectifier Corp., supra, at 186;
A strong caveat was raised by this court in Pfizer, Inc. v. International Rectifier Corp., supra at 196:
Thus Berkley may face a heavy burden in establishing inequitable conduct on the evidence concerning non-disclosures to the PTO. Nonetheless, absent the trial court's determination that that evidence was legally inadequate, or more prejudicial than probative, Berkley had a right to jury determination of whether the information not disclosed was sufficiently relevant to meet the inequitable conduct standard of materiality but not sufficiently relevant to meet the fraud standard of materiality.
F. Dismissal of the Antitrust Counterclaim
Berkley says it didn't get its day in court on its counterclaim. We disagree.
Berkley sought to prove two species of antitrust violation, one based on fraudulent conduct before the PTO, the other based on bringing suit with knowledge that the patent was invalid. Proof of one of those threshold allegations was essential to Berkley's antitrust cause of action.
The court gave Berkley a full and fair trial on both threshold questions and submitted them specially to the jury in Interrogatories 2 and 3.
As indicated supra, Berkley's allegations of gross negligence were unsupported by the evidence. Its allegations of inequitable conduct and anticompetitive intent will not support its antitrust counterclaim.
The jury having been presented with substantial evidence on utility, that issue having been one of the predominant matters litigated, it is probable if not certain that the jury based its verdict for Berkley on a belief that DuPont's invention lacked utility. Consequently, the error of submitting the utility issue to the jury was so highly prejudicial to DuPont as to warrant a new trial on the issue of patent validity.
The error in submitting to the jury the lack-of-novelty defense based on the McCoy line, that issue having also received extensive treatment at trial, would, standing alone, warrant a new trial on patent validity.
The combination of the utility and McCoy line prejudicial errors renders the need for a new trial compelling on patent validity.
The lack-of-novelty defense based on the Cohantic Line, and the obviousness defense, present proper jury questions. On retrial, the court need litigate only those issues respecting the validity of the DuPont patent.
The trial court committed no reversible error in (1) refusing an instruction and interrogatory on gross negligence; (2) instructing on fraud; (3) phrasing Interrogatories 2 and 3; (4) excluding the Hilberg deposition and Haon exhibits; (5) refusing an instruction on inequitable conduct as a basis for an antitrust violation; and (6) dismissing the antitrust counterclaim.
The jury's findings that DuPont did not obtain the patent by fraud and did not enforce the patent knowing it to be invalid were supported by the evidence.
The trial court erred in refusing to instruct the jury on inequitable conduct as a defense of unenforceability to DuPont's patent infringement suit.
The dismissal of Berkley's antitrust counterclaim is affirmed.
The judgment holding the DuPont patent invalid is vacated, and the case is remanded for a new trial on the issues of validity and enforceability of the DuPont patent. Three defenses appear appropriate, namely, that (1) the invention was anticipated by the Cohantic Line; (2) the invention would have been obvious to one skilled in the art at the time it was made; and (3) the patent was rendered unenforceable by DuPont's inequitable conduct before the PTO.
Whatever the considerations and concerns involved in current discussions of juries in complex litigation, use of interrogatories and special verdicts, from which the parties and an appellate court may glean the basis for the verdict, would appear to alleviate at least some of those concerns in some cases. The trial court's denial of DuPont's request for special verdicts in this case, for example, has forced this court to review every possible basis for the jury's verdict.
Fed.R.Civ.P. 61 provides:
The reference to obviousness in the instruction compounds the error. Preceded by "and", it at best tells the jury it may choose to consider the French line as evidence of the state of the art as distinguished from evidence of obviousness.
Under 35 U.S.C. § 282, a patent is presumed valid and the burden of establishing invalidity rests on the party asserting it. Blonder-Tongue Laboratories, Inc. v. University of Illinois Foundation, 402 U.S. 313, 335, 91 S.Ct. 1434, 1446, 28 L.Ed.2d 788 (1971); Woodstream Corp. v. Herter's, Inc., supra at 1149. The mandate of section 282 is twofold, requiring "that a party asserting invalidity bear not only the presumption-generated burden of going forward with proof but also the burden of persuasion on that issue." Solder Removal Co. v. International Trade Commission, 582 F.2d 628, 632 n.8, 65 CCPA 120, 126 n.8 (1978). The latter burden remains upon the party asserting invalidity whether relevant prior art was or was not considered by the examiner during prosecution of the patent application before the PTO. Solder Removal Co. v. International Trade Commission, id. at 632-33, 65 CCPA at 125-27; Woodstream Corp. v. Herter's, Inc., supra at 1156; see Champion Spark Plug Co. v. The Gyromat Corp., 603 F.2d 361, 366-67 (2d Cir. 1979). The presumption is fully rebutted only when the party asserting invalidity meets the burden of persuasion, i. e., relies on evidence that does in truth render the claimed invention invalid, though rebuttal may be easier when the prior art relied on is more relevant than that considered by the examiner. Solder Removal Co. v. International Trade Commission, supra at 632-33, Woodstream Corp. v. Herter's Inc., supra at 1156.
M.P.E.P. § 707.05 (1978) provides in relevant part:
DuPont says Berkley did not plead gross negligence. But Berkley pled "fraudulent maintenance," and ambiguous pleadings are to be construed liberally in favor of the pleader. Hanson v. Hunt Oil Co., 398 F.2d 578, 581 (8th Cir. 1968). Berkley cites dicta in Norton v. Curtiss, 433 F.2d 779, 794-96, 57 CCPA 1384, 1404-06 (1970), indicating that a patent application may be struck by the PTO if a misrepresentation is made to it with knowledge of falsity or in an "atmosphere" of gross negligence as to truth.
At his deposition, taken by DuPont in July of 1977, McCoy, who was 79 by then, produced his invoices for the years 1954-1958 and after 1964. He no longer had invoices for the years 1959-1963. McCoy's explanation for the missing 1959-1963 invoices was:
DuPont asserts that those same 1959-1963 invoices were missing when its representatives visited McCoy in September of 1975.
Agnew and Keller dispute the fact of a 1962 conversation. If it occurred, DuPont's failure to act on it did not constitute gross negligence.
Berkley asserts that DuPont failed to disclose to the PTO its dye booklet and its experiments with dye in nylon powders. We are not told, nor do we see, how those matters are more pertinent than the 16 items disclosed by DuPont to the PTO and the 8 patents cited by the examiner.
DuPont argues the evidence was not probative of inequitable conduct, because the information not disclosed was irrelevant or less relevant than that which was disclosed, and points to an absence of evidence of bad faith. These are matters, however, for the trial court in the first instance, or, if the evidence be admitted, for a jury following proper instructions.
DuPont does not specifically argue absence of error in refusing an instruction on enforceability. It says the only question to which inequitable conduct may relate is Berkley's demand for attorneys' fees, denied by the trial court because DuPont's acts in pursuing and asserting its patent were not so "reckless or fraudulent" as to make this an exceptional case. But that is a different question from whether Berkley had a right to have its nondisclosure evidence go to the jury.
The jury did not answer the interrogatories submitted to it on DuPont's damages and Berkley's intentional infringement. Though vigorously argued here, these issues are not ripe for resolution on this appeal. They may be presented at retrial.