Smith International, Inc., Etc. v. Hughes Tool Company

759 F.2d 1572, 225 U.S.P.Q. (BNA) 889, 1985 U.S. App. LEXIS 14777
CourtCourt of Appeals for the Federal Circuit
DecidedApril 30, 1985
DocketAppeal 84-1094, 84-1767
StatusPublished
Cited by62 cases

This text of 759 F.2d 1572 (Smith International, Inc., Etc. v. Hughes Tool Company) 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
Smith International, Inc., Etc. v. Hughes Tool Company, 759 F.2d 1572, 225 U.S.P.Q. (BNA) 889, 1985 U.S. App. LEXIS 14777 (Fed. Cir. 1985).

Opinion

FRIEDMAN, Circuit Judge.

These consolidated appeals challenge orders of the United States District Court for the Central District of California that (1) refused to dissolve a preliminary injunction against patent infringement, (2) denied a motion for summary judgment that the patents are invalid because they had been procured by fraud on the Patent Office or are unenforceable because the patentee’s action before that Office constituted inequitable conduct, and (3) barred the infringer in the relief phase of the case from introducing any evidence relating to the latter contention. We affirm in part and dismiss the appeals in part.

I

A. The Prior Proceedings.

In 1972, the appellant, Smith International, Inc. (Smith), filed in the United States District Court for the Central District of California a complaint against the appellee, Hughes Tool Company (Hughes), seeking a declaratory judgment that Hughes’ U.S. Patent No. 3,397,928 (the ’928 patnent) was invalid. Hughes filed a counterclaim asserting that Smith had infringed both the ’928 patent and Hughes U.S. Patent No. 3,476,195 (the '195 patent). Both patents are directed to “rock bits,” which are earth-boring tools used in the drilling of oil and gas wells. Hughes’ counterclaim sought damages and injunctive relief.

In its answer and during pretrial proceedings, Smith admitted that devices it manufactured infringed certain claims of the two patents, but asserted that the patents were invalid and unenforceable.

*1574 Following the trial in 1977, the district court held in 1979 that the two patents were invalid and dismissed Hughes’ counterclaim. The court found that certain of Hughes’ “submittals” to the Patent Office “did not, in some material respects, meet the applicant’s uncompromising duty to make a full and fair disclosure of all facts which may affect the patentability of his invention” (finding 29). It found that the ’928 patent was invalid because, among other reasons, “(a) invalidating prior art ... [was] not before the examiner and (b) the failure by Hughes to make a fair and full disclosure materially prevented the examiner from properly interpreting the prior art which was before him” (finding 32). The court, however, eliminated from Smith’s proposed Conclusions of Law No. 3, which read:

Hughes[’] failure to make a full and fair disclosure to the Patent Office constituted fraud on the Patent Office and makes the claims of the seal [’928] patent invalid.

The Court of Appeals for the Ninth Circuit reversed, holding that Smith had failed to meet its burden of proving that either patent was invalid. Smith International, Inc. v. Hughes Tool Company, 664 F.2d 1373, 215 USPQ 592 (9th Cir.), cert. denied, 456 U.S. 976,102 S.Ct. 2242, 72 L.Ed.2d 851 (1982) (Smith I). The court noted that the district court had “adopted almost verbatim and used as its opinion the proposed findings of Smith International” and that “[t]he Ninth Circuit has repeatedly held that adopted findings require increased appellate scrutiny.” Id. at 1375, 215 USPQ at 593-94. The “Conclusion” of the court’s opinion read as follows:

The judgment is reversed, and Patents ’928 and ’195 are declared to be valid. The Hughes counterclaim for infringement is reinstated, and the cause is remanded for further proceedings on the counterclaim.

Id. at 1377, 215 USPQ at 595.

Following the remand, Hughes moved for entry of judgment in its favor, on the ground that Smith had admitted infringement of both patents. It also sought a preliminary injunction. The district court agreed that Smith had conceded infringement, but it declined to enter judgment for Hughes. It concluded that it was “appropriate, rather, to proceed to a determination of the nature and the scope of plaintiff’s infringement before entering judgment.” No. 72-1231 HLH (Order of Oct. 6, 1982), quoted in Smith International, Inc. v. Hughes Tool Company, 718 F.2d 1573, 1577, 219 USPQ 686, 689 (Fed.Cir.), cert. denied, — U.S. -, 104 S.Ct. 493, 78 L.Ed.2d 687 (1983) (Smith II). The court declined to enter a preliminary injunction, “because it considered Smith’s admission of infringement to be too general to meet the requirement of specificity for injunctive relief under Fed.R.Civ.P. 65(d).” Smith II, 718 F.2d at 1577, 219 USPQ at 689 (describing order of the district court). “[T]he court specifically rejected Smith’s argument that there had been no determination of infringement.” Id.

Hughes appealed the denial of the preliminary injunction to this court. We reversed and remanded the case “with instructions to issue an appropriate preliminary injunction enjoining Smith International, Inc. from infringing claim 1 of the ’928 patent on such terms as are deemed proper by the district court.” Id. at 1582, 219 USPQ at 693. We pointed out that “the validity of the Hughes patents has been adjudicated by a competent appellate court, which we assume considered all possible grounds for invalidating the patents, and yet it rejected them all,” id. at 1579, 219 USPQ at 691, and that “[t]he Ninth Circuit Court’s decision removed any question about the validity and enforceability of the patents,” id. at 1580, 219 USPQ at 691. In a footnote, we stated:

The reinstatement of the Hughes counterclaim by the Ninth Circuit Court, and its remand for further proceedings, in no way indicates that the court viewed the fact of infringement as an open question. In our view, the “further proceedings” provision in the remand order refers to an accounting proceeding and a consideration of the matter of a permanent injunction. No further proceedings are *1575 necessary on the issue of whether infringement occurred.

Id. at 1580, 219 USPQ at 692.

B. The Present Appeals.

After the district court entered the preliminary injunction pursuant to our mandate, Smith moved the court (1) to grant partial summary judgment in its favor or alternatively to order a separate trial, and (2) to dissolve the preliminary injunction. Both motions were based on the contention that Hughes committed fraud on the Patent Office in obtaining the ’928 patent. (Although, as discussed infra, p. 1578, this court has indicated that the term “inequitable conduct” is more appropriate than “fraud” in referring to proscribed conduct before the Patent and Trademark Office, in the interest of accuracy we use the term “fraud” in this opinion only where the court or the parties have used that term.) In April 1984, the district court denied the motions.

The court held that the law of the case barred Smith from now litigating the issue of fraud before the Patent Office.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Robinson v. McDonough
Federal Circuit, 2022
Haggart v. United States
131 Fed. Cl. 628 (Federal Claims, 2017)
Athey v. United States
123 Fed. Cl. 42 (Federal Claims, 2015)
Flexon v. PHC-Jasper, Inc.
776 S.E.2d 397 (Court of Appeals of South Carolina, 2015)
Chevron U.S.A., Inc. v. United States
116 Fed. Cl. 202 (Federal Claims, 2014)
Petro-Hunt, L.L.C. v. United States
108 Fed. Cl. 398 (Federal Claims, 2013)
Outside the Box Innovations, LLC v. Travel Caddy, Inc.
695 F.3d 1285 (Federal Circuit, 2012)
Banks v. United States
99 Fed. Cl. 622 (Federal Claims, 2011)
Taylor v. United States Patent & Trademark Office
385 F. App'x 980 (Federal Circuit, 2010)
American Federal Bank, FSB v. United States
74 Fed. Cl. 208 (Federal Claims, 2006)
Wolfchild v. United States
72 Fed. Cl. 511 (Federal Claims, 2006)
Kemin Foods, L.C. v. Pigmentos Vegetales Del Centro S.A.
357 F. Supp. 2d 1105 (S.D. Iowa, 2005)
Independence Park Apartments v. United States
61 Fed. Cl. 692 (Federal Claims, 2004)
Urologix, Inc. v. PROSTALUND AB
256 F. Supp. 2d 911 (E.D. Wisconsin, 2003)
Chesley v. Goldstein & Baron, Chartered
806 A.2d 296 (Court of Special Appeals of Maryland, 2002)

Cite This Page — Counsel Stack

Bluebook (online)
759 F.2d 1572, 225 U.S.P.Q. (BNA) 889, 1985 U.S. App. LEXIS 14777, Counsel Stack Legal Research, https://law.counselstack.com/opinion/smith-international-inc-etc-v-hughes-tool-company-cafc-1985.