Dickey-John Corporation, Cross-Appellant v. International Tapetronics Corporation and Field Electronics, Inc., Cross-Appellees

710 F.2d 329
CourtCourt of Appeals for the Seventh Circuit
DecidedJune 14, 1983
Docket81-2022, 81-2085
StatusPublished
Cited by13 cases

This text of 710 F.2d 329 (Dickey-John Corporation, Cross-Appellant v. International Tapetronics Corporation and Field Electronics, Inc., Cross-Appellees) is published on Counsel Stack Legal Research, covering Court of Appeals for the Seventh Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Dickey-John Corporation, Cross-Appellant v. International Tapetronics Corporation and Field Electronics, Inc., Cross-Appellees, 710 F.2d 329 (7th Cir. 1983).

Opinions

ESCHBACH, Circuit Judge.

The parties cross-appeal from the district court’s judgment in this patent infringement suit. In No. 81-2085, plaintiff Dickey-john Corporation, the assignee of the three patents in suit — United States Patent No. 3,537,091 (Schenkenberg ’091), United States Patent No. 3,723,989 (Fathauer ’989), and United States Patent No. 3,928,751 (Fa-thauer ’751) — appeals the district court’s judgment declaring claims, 3, 4, and 6 of the Fathauer ’989 patent and claims 1, 2, and 7 of the Fathauer ’751 patent invalid. In No. 81-2022, defendants International Tapetronics Corporation and Field Electronics, Inc. appeal the district court’s judgment declaring valid, in part, the Schenken-berg ’091 patent and holding that defendants willfully and wantonly infringed on that patent. We note jurisdiction under 28 U.S.C. § 1292(a)(4),1 and for the reasons which follow, we affirm in part and reverse in part.

Background

Uniform and unbroken rows of crops, disappearing into the horizon, are a familiar sight in this circuit, which encompasses the heart of the cornbelt of our nation. During the planting season another familiar sight is the farmer on his tractor pulling a complex-looking contraption, relentlessly racing against the sun and the weather to sow his seeds into acre after acre of rich, black earth.

Farmers, like everyone else, would prefer not to have to cover the same ground twice. [332]*332For many years, however, they were forced to do just that when their planters would malfunction and fail to dispense seeds properly. In order to discover such a malfunction,1 farmers would occasionally have to stop their tractors and make spot checks to assure that seeds were in fact being dispensed; temporary malfunctions not discovered by spot checks would result in gaps in the rows.

Robert Dickey was one such farmer in the 1960’s. He believed there was money to be made in developing and marketing a device which would monitor the dispensing of seed and alert the farmer when a malfunction occurred. He consulted an engineering firm regarding the matter, and the firm developed a planter monitor which employed a mechanical switch to be inserted into the planter seed chute, and obtained a patent on the device. Dickey, along with an associate, John Littlejohn, formed the Dickey-john Corporation in 1966 for the purpose of marketing this device and Dickey-john was assigned the patent on it.

The mechanism looked fine on the drawing board, but in the field it proved unreliable. Among the reasons for the uneven performance of the mechanical monitor were the hostile environmental conditions under which it had to perform. Aside from the dirt, dust, and moisture from the ground, the sensitive mechanism had to contend with a variety of substances normally mixed in with the seeds during planting, including herbicides, insecticides, and graphite. The mechanical monitor was adjudged worthless by the verdict of the marketplace: Dickey-john was near bankruptcy, and while tinkering with the monitor yielded some improvement, by 1968 it was unable to interest the major planter manufacturers in the product.

Just when things looked their bleakest for Dickey-john, George Fathauer, an engineer, approached the company in 1969 and demonstrated a prototype of a planter monitor which he had developed. Rather than employing a mechanical switch, Fathauer’s monitor used a photoelectric cell for detecting the seeds as they fell through the chute. Dickey-john purchased the patent rights to the device and began marketing the device; a patent application was filed February 12, 1970. On March 27, 1973, the Fathauer monitor was granted United States Patent No. 3,723,989 (Fathauer ’989).

The Fathauer ’989 patent in suit, however, was not the first patent on a seed planter monitor using a photoelectric cell. At the time the Fathauer ’989 patent application was filed, another patent application for such a system was pending before the Patent Office. Dickey-john purchased the patent on that system shortly after it learned of the patent’s issuance. With the acquisition of that patent, United States Patent No. 3,537,091 (Sehenkenberg ’091), issued October 27, 1970, Dickey-john owned the only two patents granted for photoelectric seed planter monitors.

Fathauer continued work on planter monitors, particularly with respect to the mode of displaying information about the rate of seed dispersal. This work became embodied in United States Patent No. 3,928,751 (Fa-thauer ’751), issued December 23, 1975, which was also assigned to Dickey-john.

Dickey-john prospered by marketing the devices covered by the three patents in suit. Gross sales figures on the monitors increased from $280,000 in 1970 to $12,000,000 in 1979.

International Tapetronics Corporation manufactures taperecording and broadcast equipment. In 1978, the company decided to enter the planter monitor field. In creating a prototype monitor, a Dickey-john monitor was taken apart with the help of a new employee who had previously worked for Dickey-john. When Dickey-john learned of International Tapetronic’s plans to market its planter monitor, Dickey-john’s attorney sent the company a notice of infringement letter in July 1978. Within two weeks after receipt of the letter, International Tapetronics created Field Electronics, Inc., a wholly owned subsidiary with minimal capitalization, which then proceeded with manufacturing the monitors. In a conclusory opinion of counsel letter dated two days before the date of Field Electron[333]*333ic’s first invoice for a planter monitor sale, defendants’ counsel expressed the opinion that defendants’ devices did not infringe on any valid claim of Dickey-john’s planter monitor patents.

Proceedings Below

Dickey-john commenced this action for patent infringement in the United States District Court for the Central District of Illinois on September 5, 1979, alleging that defendants had willfully and wantonly infringed on several claims of the Schenken-berg ’091 patent, the Pathauer ’989 patent, and the Pathauer ’751 patent. In a bench trial conducted in 1981, defendants asserted the invalidity of the three patents in suit on the ground of obviousness under 35 U.S.C. § 103. Defendants essentially conceded infringement, but contested that the infringement was willful and wanton.

The district court held that the basic claim of the Schenkenberg ’091 patent — the use of a photoelectric cell for monitoring seeds in a field planter — was valid and willfully and wantonly infringed by defendants, though it held the claimed use of auxiliary chutes invalid for obviousness based on its comparison of that claim with prior art. This latter holding is not an issue in this appeal; defendants appeal from the former holdings. The district court also held that the claims in issue regarding the Pathauer ’989 patent and the Fathauer ’751 patent were invalid on obviousness grounds. Plaintiff appeals from these holdings.

The district court reached its conclusions regarding the validity of the claims in issue in the analytical framework set forth in Graham v. John Deere Co., 383 U.S. 1, 17, 86 S.Ct. 684, 693-94, 15 L.Ed.2d 545 (1966).

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Bluebook (online)
710 F.2d 329, Counsel Stack Legal Research, https://law.counselstack.com/opinion/dickey-john-corporation-cross-appellant-v-international-tapetronics-ca7-1983.