Sandt Technology, Ltd. v. Resco Metal and Plastics Corporation (Also Known as Resco Metal Products Corp.) and Seven Ocean Enterprises, Inc.

264 F.3d 1344
CourtCourt of Appeals for the Federal Circuit
DecidedOctober 15, 2001
Docket00-1449
StatusPublished
Cited by129 cases

This text of 264 F.3d 1344 (Sandt Technology, Ltd. v. Resco Metal and Plastics Corporation (Also Known as Resco Metal Products Corp.) and Seven Ocean Enterprises, Inc.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Federal Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Sandt Technology, Ltd. v. Resco Metal and Plastics Corporation (Also Known as Resco Metal Products Corp.) and Seven Ocean Enterprises, Inc., 264 F.3d 1344 (Fed. Cir. 2001).

Opinions

MICHEL, Circuit Judge.

This is an action for patent infringement and declaratory judgment for patent invalidity. Sandt Technology, Ltd. (“Sandt”), the patentee, appeals the May 26, 2000 judgment of the United States District Court for the Southern District of New York which adopted the January 7, 2000 Report and Recommendation of a Magistrate Judge and granted Resco Metal and Plastics Corporation and Seven Oceans Enterprises, Inc.’s (“Resco”) motion for summary judgment that all claims, assert[1348]*1348ed and unasserted, of Sandt’s U.S. Patent No. 5,509,057 (“the '057 patent”) are invalid. Sandt also appeals the district court’s denial of its motion for summary judgment that Reseo’s security device for coin-operated pay telephones, the “Protector,” infringed the '057 patent. We heard oral argument on May 7, 2001, and have jurisdiction to hear this appeal under 28 U.S.C. § 1295(a)(1) (1994).

Because there was sufficient corroboration of the testimony of Resco President Frederick Zausner that he previously invented a security cover that qualified as prior art under 35 U.S.C. § 102(g)(2) (West.Supp.2000), and that it anticipated claim 1 of the '057 patent, we affirm the district court’s judgment that claim 1 is invalid. We also affirm the district court’s holding that the inventions of claims 3 and 19 would have been obvious in light of the prior art. However, because the district court did not independently consider the validity of the remaining 18 dependent claims (claims 2, 4-18, 20-21) in granting Resco’s motion for a declaratory summary judgment of invalidity, we reverse the holding of the district court insofar as it held those claims invalid, and remand for the district court to conduct an obviousness determination with respect to the remaining claims.

Background

Sandt and Resco both manufacture and distribute security devices for pay telephones. A standard pay telephone has two “housings” to handle coins. The “upper housing” contains the telephone’s electromechanical components and the slot into which the user deposits coins. The “lower housing” contains a vault or storage box, and the coin return. An unprotected telephone is prone to theft or tampering. In the typical method of theft, the thief drills a hole through the upper housing, and inserts a wire in order to interfere with the coin return mechanism. This method is often successful, because both the lower and upper housings are typically comprised of weak, easy-to-penetrate steel that allows the thief to “peelback” or cut through the sides of the housing to gain access to the phone’s coin bank. Thieves can also gain access to the coin bank through the “information pad.” The information pad is held in place by a shiny face plate that is typically made of zinc, a soft metal that allows the thief to pry off the plate with a screwdriver or other device and affect internal switches.

In order to combat the problem of theft and tampering, the employees of both Sandt and Resco invented devices which replaced the single, weak face plate with a two-plated stainless steel cover for the upper housing. Sandt invented the “Bodyguard,” the commercial embodiment of the device claimed in its '057 patent, which issued on April 16, 1996. As shown in the drawing, the stainless steel outer plate 32 has two rectangular openings for the information pad and the dial buttons. '057 patent, col. 5,11. 5-11. In order to protect the areas left vulnerable by the openings in the outer plate, the device has an inner or second stainless steel plate 42 mounted between the outer plate 32 and the upper housing 12. Id. at col. 5, 11. 16-19. This second plate prevents access to the upper housing if a thief tries to gain access through the information pad opening. For ease of mounting, plate 32 has studs 43 extending through the plate 42 and into openings in the upper housing 12. Id. at col. 5,11.19-25.

[1349]*1349[[Image here]]

Resco also developed a double-plated stainless steel cover for the upper housing which uses studs to mount the cover to the housing. Its device, the “Protector,” was introduced to the market in May 1997.

Sandt filed a patent infringement action against Resco on August 14, 1997. On June 12, 1998, Sandt moved for summary judgment that Resco’s Protector infringed claims 1, 8, and 19 of the '057 patent, and for a declaratory judgment that all of the other claims of the '057 patent were not invalid. On June 30, 1998, Resco filed a cross-motion for summary judgment seeking a declaratory judgment that all claims of the '057 patent were invalid. To support Resco’s invalidity argument, Zausner stated in an affidavit that in 1990, which was before the filing date of the '057 patent, he had built (and reduced to practice) a two-plated stainless steel upper housing cover that anticipated the invention of the '057 patent. An undated photograph, allegedly taken at the time of invention, accompanied Zausner’s declaration. Although it failed to obtain a patent on this device, Resco asserted that it submitted sufficient evidence, including its 1991 rejected patent application for a stainless steel housing, to corroborate Zausner’s testimony of the 1990 manufacture of the stainless steel cover for the upper housing.

On January 7, 2000, a U.S. Magistrate Judge issued his Report and Recommendation that the district court hold claims 1, 3, and 19 of the '057 patent invalid. The Magistrate Judge did not recommend ruling on infringement, because he determined that the invalidity ruling mooted the question of infringement of the '057 patent. On May 25, 2000, the district court adopted the Magistrate Judge’s Report, but instead of holding only claims 1, 3, and 19 invalid, it declared the '057 patent to be invalid. The court issued its judgment on May 26, 2000.

Sandt filed with the district court a timely notice of appeal to this court. Sandt argues that the district court erred in holding claims 1, 3, and 19 of the '057 patent invalid, because the Resco cover had not been established as prior art, and further that the district court had misconstrued the claim language. Sandt also argues that the district court erred in holding all of the other claims of the '057 patent invalid, because Resco had presented no argument or evidence establishing the invalidity of those claims. The other claims (claims 2, 4-18, 20-21) are all dependent claims and thus have one or more additional limitations than independent claims 1 and 19 on which they depend.

Discussion

A. Standard of Review

We review a district court’s grant of summary judgment de novo. Summary judgment is appropriate “if 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 judgment as a matter of law.” Fed.R.Civ.P. 56(c); see also Celotex Corp. v. Catrett, 411 [1350]*1350U.S. 317, 322-23, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986).

B. Anticipation of Claim 1 Under § 102(g)(2)

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264 F.3d 1344, Counsel Stack Legal Research, https://law.counselstack.com/opinion/sandt-technology-ltd-v-resco-metal-and-plastics-corporation-also-known-cafc-2001.