JOHN R. BROWN, Circuit Judge:
A. B. Baumstimler, the holder of two letters patent on oil well clean-out tools, sued Kenneth Laughlin, Beuford Rankin, and John Barbee for infringement and, after a jury trial on liability, received a judgment against all defendants. Defendant Laughlin appeals, alleging a multitude of errors, including incorrect instructions to the jury, insufficient evidence of infringement, improper submission of the issue of validity to the jury, and improper determination of money damages by the District Judge at the later hearing on damages. Finding that the District Court erred in instructing the jury as to the defendant’s burden of proof required to overcome the presumption of validity of the patents, we reverse and remand.
I.
Facts
A.
The Patents
— Catching
Junk
In July 1967, Baumstimler filed an application for a patent for an oil well clean-out tool. Patent No. 3,406,757 (’757 patent), issued on October 22, 1968, is for a hydrostatic tool used to remove sand and debris from wells. Hydrostatic tools for retrieving junk or undesired objects from the bottom of a well had been available for several years prior to Baumstimler’s application for a patent. The basic principle upon which these tools operate involves inserting a hollow cylinder into the well until the cylinder is immersed in the well fluid. The cylinder contains a valve which controls the flow of fluid into the cylinder. The pressure of the fluid outside the cylinder is greater than that inside the cylinder. When the cylinder reaches the bottom of the well, the valve is opened and because of pressure differential, the fluid from the well moves into and through the cylinder, carrying debris, which is retained in the cylinder. The cylinder and debris are then extracted from the well. In layman’s terms, the clean-out tool operates like a drinking straw. Thus if one inserted a straw into a drink with the hole covered by a finger and then removed the finger, fluid would flow into the straw.
The flow rate in these hydrostatic tools is a function of the pressure differential between the well hole fluid and the pressure inside the cylinder, as well as the diameters of the passages within the well clean-out tool. Should the fluid rush into the tool too rapidly, the tool moves upward from the bottom and fails to pick up all debris. To avoid this problem of fluid surge, the patently obvious answer is to slow the entry of the fluid. That result can be achieved in several ways. Previously existing tools had used a system of chokes (an area of reduced cross-sectional area to restrict flow) or water cushions (a layer of water inside the cylinder over the valve which increases the pressure above the valve and thereby decreases the pressure differential). Baumstimler’s ’757 patent reduced the surge of fluid by varying the diameter of the passage through the use of a donut shaped ring, or orifice, whose size could be adjusted.
Essentially, then, Baumstimler’s patent, relying on prior art, added one new element, that of the orifice to control the flow.
In May 1969, Baumstimler received a second patent, Patent No. 3,446,283 (’283 patent), covering the same device as the ’757 patent but altered so as to be capable of simultaneously cleaning a well and removing a down hole tool or plug. Down hole plugs have long been used in oil field operations to isolate sections of a well in order to perform processes to facilitate oil recovery. The process may generate sand and other debris which fall on top of the plug. Thus to remove the plug, the debris must also be cleared from the path of the plug retriever. The ’283 patent, by attaching a clean-out tool to a plug retriever, both removes the debris and the plug in one trip. Baumstimler’s inspiration for this invention was a Mr. Carter, who had called Baumstimler to a job site and asked him if he could adapt his clean-out tool so that a retrieving head could be screwed onto the tool. Baumstimler cut off the bottom-most portion of a clean-out tool, threaded its end, and screwed a “Baker” retrieving head onto it, completing the invention on that very day.
The ’283 patent was a “continuation-in-part” of the ’757 patent and thus its patent-ability was partially dependent on the patentability of the ’757 clean-out tool.
B.
The Parties
Defendant Laughlin was hired by Baumstimler in 1973. Laughlin was familiar with hydrostatic well clean-out tools from his prior employment with Cavins Corporation, the manufacturer of several oil well clean-out tools, including the “multi-surge junk-snatcher”, a tool discussed in more detail below. In March 1975 Baumstimler fired Laughlin upon learning that Laughlin had plans to go into competition with him. After leaving the employment of Baumstimler, Laughlin began renting tools from Defendant Barbee until he subsequently purchased parts from Cavins and had his own tools manufactured. Defendant Rankin had also been employed previously by Cavins before working for Baumstimler. After his employment with Baumstimler terminated in 1975, Rankin worked as an independent contractor, leasing tools from Barbee and Laughlin. The tools used by all the defendants were allegedly similar to those of Baumstimler except that a drilled hole substituted for the interchangeable an
nular ring or orifice found in Baumstimler’s patents.
C.
The Litigation
Baumstimler and Basin Packer Co. (BPC) filed suit for infringement of both patents against Laughlin, Rankin, and Barbee.
In June 1978, three years after the filing of the complaint and approximately one year prior to the actual trial, Baumstimler filed a disclaimer under 35 U.S.C. § 253
with the Patent Office, disclaiming five of his seven claims in the ’757 patent.
The infringement claim was tried to a jury in May 1979 on the issue of liability only. The jury returned a verdict against all defendants for infringement of both patents ’757 and ’283.
Laughlin’s motion for j.n.o.v. was denied. In August 1979, the damage issue was tried to the Court, jury trial on this issue having been waived.
The District Court, after returning findings of fact and conclusions of law on the damage issue, assessed compensatory damages and exemplary damages for willful and wanton infringement. Laughlin’s motions for j.n.o.v., new trial, modification of the damage award, and dissolution of a temporary injunction entered prior to the award of damages, were all denied.
This appeal, prosecuted by Laughlin only, raises several issues, including challenges to the instructions and manner in which the issues were submitted to the jury, sufficiency of evidence, invalidity of the patents as obvious under 35 U.S.C. § 103, and improper determination of damages. Laughlin contends that the District Court erroneously instructed the jury that the burden of overcoming the presumption of validity of the patents was by “clear and convincing” proof rather than by a preponderance of the evidence, the standard that applies when the Patent Office in granting the patent has failed to consider prior art. The jury instructions are also questioned for improperly requiring that all defendants prove all their affirmative defenses in order to prevail. Laughlin also asserts that the District Court erred in using a general verdict form. As to the damage award, Laughlin contends that the District Court improperly used lost profits to determine the measure of damages, that Baumstimler did not prove his
damages sufficiently, that the damages should have been allocated to the value created by the patentable improvements, and that the District Court should not have awarded treble damages for willful and wanton infringement. Because we agree that the District Court improperly required Laughlin to establish invalidity of the patents only by satisfaction of the heavier “clear and convincing” burden of proof, rather than the less demanding “preponderance of the evidence” standard, we reverse and remand. Damage findings, being dependent on the determination of validity, fall automatically.
II.
Patent Invalidity
A.
Burden of Proof
Patents are presumed valid. 35 U.S.C. § 282.
See Arbrook, Inc. v. American Hospital Supply Corp.,
645 F.2d 273, 276 n.1 (5th Cir. 1981);
Ludlow Corp. v. Textile Rubber & Chemical Co.,
636 F.2d 1057, 1059 (5th Cir. 1981);
Continental Oil Co. v. Cole,
634 F.2d 188, 195 (5th Cir.),
cert. denied,
454 U.S. 830, 102 S.Ct. 124, 70 L.Ed.2d 106 (1981);
John Zink Co. v. National Airoil Burner Co.,
613 F.2d 547, 551 (5th Cir. 1980);
Harrington Manufacturing Co. v. White,
475 F.2d 788, 793-94 (5th Cir.),
cert. denied,
414 U.S. 1040, 94 S.Ct. 542, 38 L.Ed.2d 331 (1973);
Beckman Instruments, Inc. v. Chemtronics, Inc.,
428 F.2d 555, 560 (5th Cir.),
cert. denied,
400 U.S. 956, 91 S.Ct. 353, 27 L.Ed.2d 264 (1970). Thus the burden of establishing invalidity rests on the party asserting that invalidity, 35 U.S.C. § 282, and this burden is more than a mere preponderance of the evidence.
Ludlow Corp., supra
(discussing description of burden as “beyond a reasonable doubt” or “by clear and convincing evidence”);
John Zink Co., supra; Parker v. Motorola, Inc.,
524 F.2d 518, 521 (5th Cir. 1975),
cert. denied,
425 U.S. 975, 96 S.Ct. 2175, 48 L.Ed.2d 799 (1976);
Harrington Manufacturing Co. supra; Hobbs v. United States Energy Commission,
451 F.2d 849, 856 (5th Cir. 1971).
However, when the Patent Office has not considered all of the prior art in issuing the patent, this Circuit has made clear that the presumption of validity is weakened. “[W]e have made it clear that when a defendant in an infringement suit attacks the validity of a patent on the ground that it was issued without consideration by or presentation to the Patent Office of pertinent prior art, the reason for the presumption dissipates, and the presumption is weakened.”
Parker v. Motorola, Inc.,
524 F.2d at 521.
See Continental Oil Co. v. Cole,
634 F.2d at 195;
John Zink Co. v. National Airoil Burner Co.,
613 F.2d at 551;
Cathodic Protection Service v. American Smelting & Refining Co.,
594 F.2d 499, 505 (5th Cir.),
cert. denied,
444 U.S. 965, 100 S.Ct. 453, 62 L.Ed.2d 378 (1979);
Steelcase, Inc. v. Delwood Furniture Co.,
578 F.2d 74, 77 (5th Cir. 1978),
cert. denied,
440 U.S. 960, 99 S.Ct. 1503, 59 L.Ed.2d 774 (1979);
Harrington Manufacturing Co. v. White,
475 F.2d at 795;
American Seating Co. v. Southeastern Metals Co.,
412 F.2d 756, 760 (5th Cir. 1969). Where the validity of a patent is challenged for failure to consider prior art, the bases for the presumption of validity, the acknowledged experience and expertise of the Patent Office personnel and the recognition that patent approval is a species of administrative determination supported by evidence,
Parker v. Motorola, Inc.,
524 F.2d at 521, no longer exist and thus the challenger of the validity of the patent need no longer bear the heavy burden of establishing invalidity either “beyond a reasonable doubt” or “by clear and convincing evidence”.
B.
Prior Art
In the instant case, the patent and file wrapper on the ’757 patent indicate only three references, the Flury patent, the Hartsell patent and the Clark patent. In the case of the ’283 patent, the references cited include the same three as those in the ’757 application, as well as the ’757 patent itself. At trial, Laughlin introduced evidence that specific highly relevant prior art, in the form of hydrostatic tools manufactured by Cavins Corporation, had not been considered by the Patent Office. One of these tools, the Cavins MultiSurge Tool controlled surge through the use of a floating choke. At trial, Baumstimler in fact
admitted that he was familiar with Cavins tools from his prior employment by that company and that his invention for which he received the ’757 patent was essentially that of the Cavins tool except for the orifice.
In February 1971, an attorney acting for Baumstimler wrote to Free State Tool Corporation informing them that they were infringing Baumstimler’s patents ’757 and ’283. In response to this letter, the attorney for Free State Tool Corporation informed Baumstimler’s attorney that his client had been in business since August 1965 and had been using the apparatus in question since that date and that many companies, including the Cavins Corporation, had utilized such methods previously.
Despite Baumstimler’s admitted knowledge of the relationship of his tool to the Cavins tools and further indication of this knowledge through the February 1971 letter from Free State Tool Corporation, Baumstimler did not make the Patent Office aware of the prior art of the Cavins tool after the patent had issued. Nor did he bother to file a disclaimer with the Patent Office until 1978, more than three years after initiation of this lawsuit, at which time he disclaimed five of seven claims in the ’757 patent. From Baumstimler’s own testimony, it is clear that the Patent Office issued the ’757 patent without consideration of relevant prior art.
C.
The Jury Instructions
Given the introduction of evidence that the Patent Office failed to consider relevant prior art in the form of the Cavins tools, the standard of proof required of Laughlin to overcome the presumption of validity of the patents was not “clear and convincing” but simply a preponderance of the evidence. There is no doubt that the District Judge instructed the jury, and repeatedly so, that the defendant’s burden was to prove invalidity by “clear and convincing evidence”. This error resulted in imposing a heavier burden on the defendants than that required by the law of this Circuit. It is also clear that the District Judge meant to impose a heavier burden on the defendant than that on the plaintiff.
Now, as I have said, the burden of proof is on the Plaintiff to prove these elements of the case which I have given you by a preponderance of the evidence. ... As to the Defendant’s contention as to the affirmative defenses which I have just given to you, that is, the failure of the patent to be a valid patent, and lack of infringement, the
burden is somewhat stricter.
The Defendant must prove any one or a combination of those affirmative defenses by
clear and convincing evidence.
If you find that the Defendant has established any or a combination of these affirmative defenses by
clear and convincing evidence,
then you must find for the Defendant. . ..
Transcript 351 (emphasis added). Nor is this example an isolated incident but rather one of at least 11 instances in an approximately 40 page charge to the jury.
D.
Waiver
Baumstimler contends that even if the burden of proof was incorrect, Laughlin waived any objection to the charge. For support of this position, Baumstimler relies on the denial of the motion for j. n. o. v. In its order of September 28, 1979, the District Court stated:
Point of error 17 [that challenging the burden of proof and indicating that preponderance of evidence was the proper standard since the Patent Office did not consider pertinent prior art, especially the Cavins Corp. tools] is probably the most serious Point of Error raised by defendants. It states that the wrong burden of proof was assigned to the defendants to show by affirmative defenses that Patent ’757 was invalid. It is the Court’s opinion that this argument may be legally correct. However, it is also this Court’s opinion that the defendants have waived their objection to this portion of the Court’s charge in that they were afforded ample opportunity after the giving of the Charge to ask the Trial Judge to instruct the Jury in a different manner and they failed to so bring this error to the Court’s attention. Therefore, this point is also overruled.
We must disagree with the District Judge. The defendants did not waive their objection to the charge. From the record, it is clear that Laughlin’s counsel made timely objection to the charge, stating both what he objected to and why.
While it is true that the District Judge provided Laughlin’s counsel with an opportunity to provide a correct instruction, saying that he would be glad to accept a different way, Laughlin’s counsel, having specifically objected with adequate reasons stated, was not required to submit a new written formal instruction and his response that he didn’t know how to formulate the instruction is not fatal. Defendant’s counsel had previously submitted instructions with the correct standard indicated, instructions which were not given by the District Judge. F.R.Civ.P. 51 requires only that a party object timely, “stating distinctly the matter to which he objects and the grounds of his objection.” There can be no doubt that Laughlin’s attorney met the requirements of Rule 51 and thus did not waive any objection to the erroneous jury instructions.
Based on the erroneous instruction as to the defendants’ burden of proving invalidity, we reverse and remand. We therefore do not reach the other asserted errors, including the sufficiency of the evidence and as a matter of law the invalidity of the patent as obvious under 35 U.S.C. § 103.
III.
Cleaning Out the Well
Although not technically before us, the method of submission to the jury and the calculation of damages leave us with serious doubts about their propriety. While we need not reach the other alleged errors in the submission to the jury and the issue of validity, we wish to make clear that we in no way approve of the manner in which this case was submitted to the jury. First, the District Judge utilized two general verdict
forms, one for the plaintiff and one for the defendant. Although the verdict forms specifically allowed the jury to determine which of the several defendants infringed Baumstimler’s “alleged valid patent, if any”, the instructions require that the defendants sustain all of their defenses.
This is certainly in conflict with the actual requirement that any one defendant need only sustain one decisive defense, not all of them. This problem with the submission, like those discussed below, could largely have been solved through the use of special interrogatories under F.R.Civ.P. 49(a).
Second, from the instructions it is clear that the District Judge left the issue of validity of the patents to the jury. The instructions specifically stated that the disputed issue of the validity of the patents was left to the jury.
While the charge made clear that the elements of invention included novelty, utility, and nonobviousness, clearly factual issues, the ultimate legal issue of validity should have been determined by the judge, not the jury. “[T]he ultimate question of patent validity is one of law. .. . ”
Graham v. John Deere Co.,
383 U.S. 1, 17, 86 S.Ct. 684, 694, 15 L.Ed.2d 545, 556 (1966). This determination is based on certain factual inquiries which are properly resolved by the jury, including the scope and content of the prior art, differences between the prior art and the claims at issue, and the level of ordinary skill in the art.
Id.
Here the jury made no discernible factual determination concerning the prior art so that the District Judge could then determine obviousness, an issue to be determined by a judge, not a jury. Rather, the ultimate issue of validity, dependent on factual inquiries of prior art and legal criteria of obviousness, was left to the jury.
While we generally presume that disputed matters of fact have been resolved favorably to the prevailing party, this case presents a more serious problem than that raised in
Control Components, Inc. v. Valtek, Inc.,
609 F.2d 763 (5th Cir.),
rehearing denied,
616 F.2d 892,
cert. denied,
449 U.S. 1022, 101 S.Ct. 589, 66 L.Ed.2d 484 (1980). In
Valtek,
the District Court submitted to the jury the issue of obviousness without requiring separate special interrogatories on the factual inquiries underlying the obviousness question, the scope and content of prior art and the differences between that art. We held in that case that the interrogatory was not so broadly framed as to leave the ultimate determination of obviousness to the jury.
But see Valtek,
609 F.2d at 775 (Rubin, J., dissenting). We found implicit in the answer to the interrogatory the jury
findings on the three factual underpinnings to obviousness as indicated in
John Deere.
We then upheld the jury findings after reviewing to determine if there was substantial evidence to support these findings.
“Full review” in this context amounts to an inquiry whether the judge “correctly applies the law set out in
Graham.” . . .
Like the trial court, we are aided in our inquiry by the jury’s findings of fact. If supported by substantial evidence, these findings are apt to strengthen the trial court’s legal conclusion.
Valtek,
609 F.2d at 768.
See also Hammerquist
v.
Clarke's Sheet Metal, Inc.,
658 F.2d 1319, 1322-23 & n.5 (9th Cir. 1981).
In the instant case, the jury made no findings of fact on prior art and factual aspects of obviousness, nor did they make a finding on the issue of obviousness. The District Judge incorrectly allowed the jury to determine obviousness and validity, two issues which are clearly legal, not factual. There simply is no factual or legal determination that the patents are valid, given the general verdict form which deliberately left open the question of validity, using the phrase “valid patent, if any.”
In a cogent and convincing partial concurrence and partial dissent in
Valtek,
Judge Rubin reviews this Circuit’s response to the Supreme Court’s determination in
John Deere
that the ultimate question of patent validity is one of law. Specifically, he argues that a general verdict in a patent case deprives the appellate court of any meaningful review. If the reviewing court is to presume that disputed matters of fact have been resolved favorably to the prevailing party, then the only review is an analysis of the correctness of the jury charge and the existence of substantial evidence to support the verdict.
I think meaningful devotion to
Graham
requires a different course, unique to patent litigation. In this area where decisional responsibility is so clearly divided, the methods of reaching a decision must be more sharply defined; the path to this end is required jury verdicts on special interrogatories, as permitted by Fed.R. Civ.P. 49(a). . . . Moreover, that course [general verdict] has pragmatic difficulties: a relatively minor error in the charge may require a lengthy new trial. Submission on special interrogatories can avert that.
See
Brown, Federal Special Verdicts: The Doubt Eliminator, 1968, 44 F.R.D. 338.
Valtek,
609 F.2d at 775 (Rubin, J., dissenting).
Special interrogatories under Rule 49(a), whose songs of praise we have repeatedly sounded
, have especial value in a patent case tried to a jury. Their use is not only practical, facilitating appellate review and avoiding lengthy (as patent cases invariably are) retrial for even relatively minor errors in jury instructions, but accords with the inherent divisional lines between the roles of judge and jury, the boundaries of which are so easily transgressed in patent cases tried to juries. While the use of special interrogatories is left to the sound discretion of the trial judge, failure to utilize this method in a patent case places a
heavy burden of convincing the reviewing court that the trial judge did not abuse his discretion.
The fact is that one of the sometimes unexpected, but wholesome, results of special interrogatories jury submission is to emphasize the absolute necessity that there be first a clear understanding of the precise legal issues for jury resolution and then a translation of them into articulate questions which may be authoritatively answered by a simple categorical. In a general way this is to say that not only is it the jury’s imprecision which is hidden by the traditional general charge and verdict. Many juridical errors of omission and commission by court and counsel are likewise perpetually concealed.
R. B. Co. v. Aetna Insurance Co.,
299 F.2d 753, 756-57 (5th Cir. 1962).
In the instant case, had the burden of proof not been incorrect, the use of special interrogatories would have allowed us to determine if the judge correctly interpreted complicated aspects of the patent law and if the jury under the judge’s direction did not decide improperly, or at all, the legal question of validity of the patent. We would have specific factual findings to the three
John Deere
questions on obviousness to support a finding by the judge of validity. Further, interrogatories could have covered the willfulness of infringement to provide support for the award of the treble damages. The issue of fraud on the patent office so as to invalidate the patent would also be appropriate for special interrogatories on the factual issues of deliberate withholding and concealment. Judge, jury, and counsel would have been required to “stop, look, listen & think,” Brown, Federal Special Verdicts: The Doubt Eliminator, 44 F.R.D. 338, 351 (1968), and we would be provided with factual findings allowing meaningful appellate review. Like Cassandra of old, our prophecies of doom resulting from the use of a general verdict have too often been ignored.
Our final note of concern is with the issue of damages. We have serious doubt about whether the District Judge properly determined the basis for the award, While not technically before us, we wish to highlight some difficulties lest our silence be mistaken for approval. First there is the problem of whether lost profits are the correct measure of damages since Baumstimler’s corporation, BPC, was technically the user of the patent and yet held no proprietary interest in the patent,
see
note 3
supra,
Baumstimler having never gone through the formalities of licensing the patent to the company in which he and his wife were the sole shareholders. When actual damages are not proved, we have allowed the plaintiff to recover a “reasonable royalty”.
Hughes Tool Co. v. G. W. Murphy Industries, Inc.,
491 F.2d 923, 930 (5th Cir. 1973); 35 U.S.C. § 284. Since Baumstimler did not manufacture, sell or use the patented invention, but rather the invention was exploited by BPC, Baumstimler technically had no lost profits.
Even if the proper measure of damages was lost profits, it is uncertain whether Baumstimler proved “but for” the infringement he would have made the sales made by Laughlin.
See Livesay Window Co. v. Livesay Industries, Inc.,
251 F.2d 469 (5th Cir. 1958);
Hughes Tool Co., supra.
While lost profits need not be established by scientific accuracy, conjecture alone is not sufficient. In
Hughes Tool Co.,
we made clear that the plaintiff must demonstrate with “reasonable probability” the portion of defendant’s infringing sales it would have made and while not deciding whether proof of market share was sufficient for the reasonable probability test, we made clear that market share analysis requires an examination of substitutes, demand, manufacturing capability of the patentee, and the amount of profit that would have been made from these additional sales. In this case, the District Court determined that the competing tool, that sold by Cavins, held ten percent of the market. This alone is not sufficient to determine that Baumstimler would have received 90% of the market since possibly the infringers cut into not only Baumstimler’s market but that of Cavins as well.
The actual computation of damages also is questionable. There is little evidence of Baumstimler’s profit margin which appears to have been determined by the District Court purely on the basis of Laughlin’s profit margin. The measure of recovery is not the infringer’s profit but those profits lost to the patentee.
See Aro Manufacturing Co. v. Convertible Top Replacement Co.,
377 U.S. 476, 84 S.Ct. 1526, 12 L.Ed.2d 457 (1964). Also raised by Laughlin are the issues of whether Laughlin’s total billings, which included services sold with the tool, should properly have been used in determining damages and whether the damages should have been allocated so as to reflect that portion of the value of the tool attributable to the patented improvements as opposed to the value of the tool without the improvements. It appears that the District Judge did not allow the introduction of evidence showing that the entire rental fee of the tool represented two elements, a fee for the unpatented prior art portions of the tool and a fee for the patented improvements. While we do not decide whether allocation was proper or necessary, this argument is one that must be considered by the District Court in assessing damages.
Cf. Bigelow v. RKO Radio Pictures,
327 U.S. 251, 265, 66 S.Ct. 574, 580, 90 L.Ed. 652, 660 (1946).
Finally, we have strong reservations about whether the damage award should have been trebled. Such award is within the discretion of the District Court when the infringement is willful and wanton. The jury’s general verdict made no finding on willful or wanton infringement since the issue of damages was not tried to the jury and since the issue of liability was submitted in the form of a general verdict as discussed above. In fact, the District Judge who presided over the trial, having been assassinated, was replaced by another District Judge for the determination of damages. Moreover, we have much doubt that there is sufficient evidence of willful and wanton infringement to support such treble damages. This Court has held that where the issue of patentability is “close and litigated in good faith, the court should be more reluctant to impose punitive damages.”
Yoder Bros., Inc. v. California-Florida Plant Corp.,
537 F.2d 1347, 1383 (5th Cir. 1976),
cert. denied,
429 U.S. 1094, 97 S.Ct. 1108, 51 L.Ed.2d 540 (1977). Certainly the issue of validity is a close one here, depending largely on the issue of prior art, the Cavins Corp. tools. Laughlin’s device did not contain possibly the only patentable feature of Baumstimler’s tool, the interchangeable orifice. Laughlin also could have maintained a reasonable doubt as to the validity of the Baumstimler patent since he, Laughlin, was familiar with the Cavins tools. That his belief was reasonable is also illustrated by Baumstimler’s disclaimer, almost 10 years after the award of the patent, and three years after institution of this lawsuit, of five of the seven claims in one of the patents.
Upon retrial, we would urge the District Court to submit a special interrogatory on the issue of willful and wanton infringement and to provide a more thorough analysis of the relevant market and the evidence supporting the determination of Baumstimler’s lost profits, that is how the profit margin was determined, and what effect, if any, BPC’s lack of a license and relationship to Baumstimler has on the determination of damages.
With submission under proper instructions, along with special interrogatories under F.R.Civ.P. 49(a) and consideration of our perhaps too lengthy comments on the prior trial, should this case come before us again for review, the process will be much briefer.
REVERSED AND REMANDED.