U.S. Court of Appeals, Federal Circuit
January 27, 1999
SASH CONTROLS, INCORPORATED, PLAINTIFF-APPELLANT,
TALON, L.L.C., ALLEN-STEVENS CORPORATION, REFLECTOLITE PRODUCTS COMPANY, INC. AND STERN & COMPANY, INC., DEFENDANTS-CROSS APPELLANTS.
Before Rich, Plager, and Rader, Circuit Judges.
The opinion of the court was delivered by: Per Curiam.
NOTE: Pursuant to Fed. Cir. R. 47.6, this Disposition is not citable as precedent. It is a public record. The Disposition will appear in tables published periodically.
Sash Controls, Incorporated (Sash) appeals from a judgment of the United States District Court for the Eastern District of Michigan on cross motions for summary judgment holding that Sash was estopped from contesting invalidity of its United States Design Patent No. 340,398 ('398 patent) as a result of a terminal disclaimer filed during prosecution of the '398 patent and Sash's position during the litigation that the '398 and its earlier issued U.S. Design Patent No. 320,334 ('334) were the same invention. The district court's judgment also held Sash's '398 patent invalid under 35 U.S.C. § 103. Talon, L.L.C., Allen- Stevens Corporation, Reflectolite Products Company, Inc., and Stern & Company, Inc. (collectively "Talon") cross-appeal from the district court's denial of Talon's motion for summary judgment of unenforceability of the '398 patent because of inequitable conduct. We vacate the district court's decision that the '398 patent is invalid as obvious and remand to the district court for admission and consideration of the secondary considerations of nonobviousness. We affirm the district court's denial of summary judgment of unenforceability of the '398 patent for inequitable conduct.
This case involves two design patents for sliding glass door handles involving a handle connected by risers to an escutcheon plate, which in turn attaches the handle to the door. Joseph Clancy (Clancy) filed a design patent application on July 27, 1989, embodying his Curio handle design. The '334 patent issued to plaintiff, Sash, as assignee. Figure 1 of the '334 patent is shown below. The Curio handle embodied in the design below was "on sale" for purposes of § 102(b) on September 29, 1989.
More than one year after the Curio design was "on sale," Clancy filed a second design patent application on April 1, 1991 embodying his Legacy design for door handles. The examiner, who was unaware of the sales of the Curio handle design, rejected the claimed Legacy design under obviousness-type double patenting in light of the '334 patent and two other designs. *fn1 The examiner reasoned that "it would have been obvious to modify the ends of the escutcheon of [Clancy's] prior patent ['334] by rounding and then beveling these ends as demonstrated by the Baldwin escutcheon and Butts, respectively." Clancy filed a terminal disclaimer to obviate the rejection, and the design patent on the Legacy handle issued as Des. 340,398 ('398 patent) to Sash as assignee. Figure 1 from the '398 design patent is shown below.
Sash filed suit against Talon for willful infringement of its two design patents. On cross motions for summary judgment, the district court made the following rulings in open court.
[In the] present case, the Court finds that this means that [Sash] is estopped from claiming the '398 design is not obvious in light of the Curio handle, unless it can show the terminal disclaimer on patent '334 was filed for some reason unconnected to the patent examiner's determination that the '398 design was obvious in light of [Sash's] '334 patent.
Attorney Don Wood, representing the plaintiff before the patent examiner, presented an affidavit from Mr. Wood. However, it says nothing about [Sash's] reason for filing the terminal disclaimer. . . .
The parties have provided the Court with copies of most of the patent file and there's no indication in that file that [Sash] ever refuted [the] examiner's finding of obviousness.
Moreover, [Sash's] counsel in the present matter indicated [Sash] agreed the two patents represent essentially the same designs [when it argued that Talon's 2995 handle infringed the '334 patent.]
The Court believes [Sash] has failed to rebut the presumption; that it agreed with the patent examiner that the design '398 was obvious in light of patent '334. . . .
Therefore, the Curio handle must serve as prior art, given that it was on sale more than one year before the application for patent '398, and plaintiff is estopped from arguing that '398 is not obvious in light of the Curio handle, which is the commercial embodiment of '334. Thus, the Court finds that plaintiff's '398 is invalid.
A. Parties' Arguments
Sash argues that the district court erred as a matter of law in granting summary judgment of invalidity under 35 U.S.C. § 103 because it improperly gave estoppel effect to a terminal disclaimer filed only as an expedient to prosecution. Because Sash merely filed a terminal disclaimer to obviate the examiner's obviousness type double-patenting rejection, the merits of the § 103 rejection were never reached. A terminal disclaimer, Sash argues, simply rectifies a potential patent term prolongation problem and does not establish anything as "prior art." Therefore, according to Sash, the terminal disclaimer cannot be used as an admission that it acquiesced in the § 103 obviousness rejection.
Sash argues that under the Graham factors, it has shown non- obviousness of the '398 claimed design. Sash argues that it clearly established the commercial success of the Legacy product and resolved all doubts as to whether that commercial success was the direct result of product design acceptance. Sash also alleged that it could show that Talon copied its claimed design. Sash seeks a reversal of the grant of summary judgment of invalidity and a remand of the case for trial.
Talon asserts that the district court properly estopped Sash from arguing nonobviounsess of its '398 patent in light of the teachings of its '334 patent because it filed a terminal disclaimer during prosecution of the '398 patent, acquiescing in such rejection, and argued repeatedly during this litigation that the claimed designs of the two patents were "so similar that a purchaser, ordinary lay observer, is going to think one is the other." Sash also asserted that the two patents "protected the same thing," and that the two design patents "were thought by the designer to represent variations on a common theme. . . . So what we really have here is one patent on two variations of the same invention." Therefore, the district court did not abuse its discretion in estopping Sash from arguing nonobviousness based not only on its behavior during prosecution, but based on its arguments during this pending litigation.
Talon also argues that even if Sash is not estopped from arguing nonobviousness, the district court properly found that that the claimed design of the '398 patent is obvious in light of the teachings of the '334 patent and the Baldwin reference. Although the Baldwin reference pictures a handle for a pivoting door not a sliding glass door, Talon argues that it is analogous art. Also, the "point of novelty" of both the '334 and the '398 designs is the handle, while the only difference between the two designs is the lack of scallops on the corners of the escutcheon plate on the '398 patent. This teaching of rounded corners is found in the Baldwin reference. Therefore, Talon argues, the claimed design of the '398 patent is obvious.
Summary judgment is properly rendered when "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed. R. Civ. P. 56(c); see also Johnston v. IVAC Corp., 885 F.2d 1574, 1576-77, 12 USPQ2d 1382, 1383 (Fed. Cir. 1989). In deciding whether a genuine issue of material fact exists, the evidence must be viewed in the light most favorable to the nonmoving party with doubts resolved in its favor. O.I. Corp. v. Tekmar Co., 115 F.3d 1576, 1580, 42 USPQ2d 1777, 1779 (Fed. Cir. 1997). A grant of summary judgment is reviewed de novo. Conroy v. Reebok Int'l, 14 F.3d 1570, 1575, 29 USPQ2d 1373, 1377 (Fed. Cir. 1994).
The district court erred in applying an estoppel to Sash's arguments concerning obviousness. In Quad Environmental Technologies, Corp. v. Union Sanitary District, we held that a terminal disclaimer "is not an admission of obviousness of the later-filed claimed invention in light of the earlier-filed disclosure." 946 F.2d 870, 874, 20 USPQ2d 1392, 1394 (Fed. Cir. 1991). "In legal principle, the filing of a terminal disclaimer simply serves the statutory function of removing the rejection of double patenting, and raises neither presumption nor estoppel on the merits of the rejection." Id. Sash's inconsistent positions during litigation also do not provide an estoppel. We have long recognized that an advocate may take or plead inconsistent positions in a suit. See Fed. R. Civ. P. 8(e) ("A party may also state as many separate claims or defenses as the party has regardless of consistency . . . ."). Therefore, we hold that the district court abused its discretion in estopping Sash from arguing that the claimed design of its '398 patent is not obvious.
A design, such as that of the Curio handle described in the `334 patent, that was on sale more than one year before the filing date of the later-filed application for the '398 patent, is not removed as prior art by the filing of a terminal disclaimer. See Quad, 946 F.2d at 874, 20 USPQ2d at 1394 (citations omitted). Sash admits that its Curio handle was on sale for more than one year prior to the filing date of the application for the '398 patent and that it embodied the design of the '334 patent. Therefore, the Curio handle is prior art under § 102(b).
"Section 102(b) may create a bar to patentability either alone, if the device placed on sale is an anticipation of the later claimed invention or, in conjunction with 35 U.S.C. § 103 (1988), if the claimed invention would have been obvious from the on-sale device in conjunction with the prior art. As stated in Baker Oil Tools v. Geo Vann, Inc., 828 F.2d 1558, 1563, 4 USPQ2d 1210, 1213 (Fed. Cir. 1987): "If a device was in public use or on sale before the critical date then that device becomes a reference under section 103 against the claimed invention." LaBounty Mfg. v. United States Int'l Trade Comm., 958 F.2d 1066, 1071, 22 USPQ2d 1025, 1028 (Fed. Cir. 1992) (citing In re Corcoran, 640 F.2d 1331, 1333, 208 USPQ 867, 869 (CCPA 1981)). Design patents must meet the same novelty and nonobvious requirements as utility patents. See Avia Group Int'l v. L.A. Gear California, Inc., 853 F.2d 1557, 1563, 7 USPQ2d 1548, 1553 (Fed. Cir. 1988).
The principal difference between the Curio handle design and the Legacy design of the '398 patent is the rounding of the ends of the escutcheon plate in the Legacy design. The Baldwin reference teaches such rounding for an escutcheon plate. Sash argues, however, that a designer of patio door handles would not look to Baldwin because it relates to a swing door handle requiring a twisting action, whereas a patio door handle requires a pulling action. The Baldwin design is shown below.
The Baldwin reference, however, provides a teaching of the rounding of the corners of the escutcheon plate, not a teaching involving the door handle itself. A person of ordinary skill for § 103 purposes in a design patent case is "the designer of ordinary capability who designs articles of the type presented in the applications." Litton Sys., Inc. v. Whirlpool Corp., 728 F.2d 1423, 1443, 221 USPQ 97, 109 (Fed. Cir. 1984) (quoting In re Nalbandian, 661 F.2d 1214, 211 USPQ 782 (CCPA 1981)). Both a patio door handle and a swing door handle require the mounting escutcheon plate. We find that the designer of ordinary capability of patio door handles would look to swing door handle art for such common features as the escutcheon plate. Therefore, Baldwin is analogous art and provides the missing teaching of the rounding of the corners of the escutcheon plate.
Sash, however, argues that as a result of the district court's erroneous estoppel, it was not allowed to present secondary considerations enunciated in Graham v. John Deere Co. of Kansas City, 383 U.S. 1, 148 USPQ 459 (1966), to overcome this obviousness determination. Sash submits that it has evidence of commercial success and copying by Talon; secondary considerations that it asserts overcome the obviousness rejection.
We have held that secondary considerations must always be considered in an obviousness determination, and it was error by the district court to exclude that evidence from consideration in making its obviousness determination. See Stratoflex, Inc. v. Aeroquip Corp., 713 F.2d 1530, 1538, 218 USPQ 871, 879 (Fed. Cir. 1983). Because the district court improperly estopped Sash from discovering and presenting its evidence of secondary considerations of nonobviousness, we vacate the district court's judgment holding Sash's `398 patent invalid and remand to the district court for admission and consideration of the evidence of secondary considerations.
3. Inequitable Conduct
Talon, on cross-appeal, challenges the district court's denial of summary judgment of unenforceability of the '398 patent for inequitable conduct. Talon asserts that Woods, the attorney who prosecuted both the '334 and '398 design patents, or Clancy, the inventor of both patents, should have disclosed the '334 patent to the examiner of the '398 patent application and should have disclosed the sales of the Curio handles more than one year before filing of the '398 patent application. Because neither were disclosed, Talon asserts that it is entitled to summary judgment that the '398 patent is unenforceable due to inequitable conduct.
The district court found that Sash conceded that both the '334 patent and the sales of the Curio handles were material. Noting that clear and convincing evidence is the standard, the district court concluded, however, that a genuine issue of material fact existed concerning "whether Mr. Wood knew of the Curio handle sales and whether Mr. Clancy was aware this information was required by the patent office." Sash Controls, Inc. v. Talon, Civ. Act. No. 96-CV-72517, slip op. at 5-6 (E.D. Mich. Nov. 24, 1997).
Inequitable conduct results from the failure to disclose material information with an intent to deceive or mislead the Patent and Trademark Office. Critikon, Inc. v. Beckton Dickinson Vascular Access, Inc., 120 F.3d 1253, 1256, 43 USPQ2d 1666, 1668 (Fed. Cir. 1997) (citation omitted), cert. denied, 118 S. Ct. 1510 and 1511 (1998). Talon has the burden of proving inequitable conduct by clear and convincing evidence. FMC Corp. v. Manitowoc Co., 835 F.2d 1411, 1417 n. 11, 5 USPQ 1112, 1117 n. 11 (Fed. Cir. 1987).
We agree with Sash that when a reference such as the '334 patent was before the examiner, by his own search or by disclosure by the applicant or his attorney, it is not withheld from the examiner. Scripps Clinic & Research Found. v. Genentech, Inc., 927 F.2d 1565, 1582, 18 USPQ2d 1001, 1015 (Fed. Cir. 1991). We agree with the district court, however, that a genuine issue of material fact exists concerning what Woods and Clancy knew or should have known regarding the sales of the Curio handles. With such facts in dispute, the district court could not carry out the balancing test to determine whether inequitable conduct occurred. Critikon, 120 F.3d at 1256, 43 USPQ2d at 1668.
For the reasons set forth herein, we vacate the district court's judgment that the '398 patent is invalid as obvious and remand to the district court for admission and consideration of secondary considerations of nonobviousness. We affirm the district court's denial of summary judgment of unenforceability of the '398 patent for inequitable conduct.