Stewart-Warner Corporation, Cross-Appellee v. The City of Pontiac, Michigan, and American Sign & Indicator Corporation, Cross-Appellants

717 F.2d 269, 219 U.S.P.Q. (BNA) 1162, 1983 U.S. App. LEXIS 24283
CourtCourt of Appeals for the Sixth Circuit
DecidedSeptember 2, 1983
Docket81-1611, 81-1631
StatusPublished
Cited by12 cases

This text of 717 F.2d 269 (Stewart-Warner Corporation, Cross-Appellee v. The City of Pontiac, Michigan, and American Sign & Indicator Corporation, Cross-Appellants) is published on Counsel Stack Legal Research, covering Court of Appeals for the Sixth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Stewart-Warner Corporation, Cross-Appellee v. The City of Pontiac, Michigan, and American Sign & Indicator Corporation, Cross-Appellants, 717 F.2d 269, 219 U.S.P.Q. (BNA) 1162, 1983 U.S. App. LEXIS 24283 (6th Cir. 1983).

Opinions

MERRITT, Circuit Judge.

Plaintiff appeals from the District Court’s judgment granting defendants’ motion for directed verdict in this infringement suit involving two patents for large stadium scoreboards with matrices of light bulbs displaying moving images. The essential holding of the District Court was that the plaintiff lost its patent monopoly over the two inventions because it put the invention on the market more than a year before its two patent applications were filed. We agree with the District Court as to the first patent but disagree as to the second.

Stewart-Warner Corporation sued the City of Pontiac, Michigan and American Sign and Indicator Corporation (“American Sign”) claiming that the defendants had infringed two of its patents, known as the ’335 and ’926 patents, by constructing a scoreboard at the Pontiac Silverdome. Pontiac and American Sign defended by seeking to have the patents declared invalid, unenforceable or not infringed. At the close of plaintiff’s case, defendants moved for dismissal under Rule 41(b), Fed.R.Civ.P., on the grounds that on the facts and the law, Stewart-Warner was not entitled to relief. The motion raised the same issues which we must now address on appeal:

(1) Whether the ’335 patent was “on sale” in the form of Stewart-Warner’s Kansas City Scoreboard “for more than one year” before the patent application was filed and thus is invalid under 35 U.S.C. § 102(b).
(2) Whether the ’926 patent is invalid as anticipated by Stewart-Warner’s previous scoreboard installation, and thus also effectively on sale more than a year before the patent application was filed.

After defendants’ motion, the trial judge severed the 102(b) issues from the rest of the trial, and heard additional evidence from Stewart-Warner directed solely to those issues. After argument, the judge rendered two opinions from the bench, holding both of Stewart-Warner’s patents invalid under 102(b). In this appeal, we consider only the issues set forth above. We express no opinion on the issues of obviousness or infringement that were not reached by the court below.

The invention that Stewart-Warner has patented is a scoreboard display system for use primarily in sports arenas. The goal of the system is to display on stadium scoreboards a moving video image of a quality equivalent to that seen on a black and white television screen. The system has the capacity to receive moving photographic or video light signals and transform them into signals which display a likeness of the video image on a scoreboard consisting of a large matrix of light bulbs.

The system can receive video signals from a variety of different sources including video cameras, television broadcast signals, and video disc or tape memory. The video signal is formed by a camera repeatedly scanning its subject at a high rate of speed. The signal is an irregularly curved line, whose height at any point represents the intensity of light received by the camera at a particular instant in time during its scan.

The first part of the system, known as a “video-to-digital converter,” takes a reading [272]*272of the video signal in time frames representing millisecond intervals on the scan, and analyzes the light intensity at that particular point. In the case of the ’335 patent, the video time frame will be assigned one of four light intensity values. This information is converted into digital information bits — each of the four levels of light intensity being assigned a binary value — capable of being fed into a computer. Along with each digital light intensity value, the computer receives “addressing” information so that the correct intensity can be transmitted to the proper location on the matrix of light bulbs. Each light bulb has a separate address on the scoreboard.

After the video image is converted to digital values, this encoded digital information is fed into a data processor, which is not part of the invention claimed here. The computer stores the information at a place in the memory corresponding to. a particular scoreboard address, and provides the necessary synchronization of the process.

The remaining problem Stewart-Warner had to solve was how to use the digital signal to turn on different light bulbs to produce varying “shades of grey” in order to give the impression of a black and white television picture. Prior systems only signaled a bulb to turn on and stay on until an “off” signal with the same address was received. Achieving varying shades of intensity requires that a switch-like device called a “triac” be programmed to turn the light bulbs on and off rapidly, giving the human eye the impression of a constant source of varying light intensity. Since alternating current flows in cycles of a tiny fraction of a second, the bulb must be turned on for a portion of each cycle in order to obtain this effect. To achieve four shades of grey, the circuitry must be designed to turn the light bulbs on and off at intervals of a full cycle, a half cycle, one-quarter cycle, or not at all.

The display board itself is a large matrix of rows and columns of incandescent bulbs. In the particular scoreboard at issue here, there are 16,200 bulbs in the matrix, divided into 15 modules. The size and arrangement of the board can be varied by design, and the use of such a matrix is not new to this invention.

The ’926 patent at issue here describes a similar scoreboard system. The only difference in result is that it projects images in eight or more shades of grey instead of four, creating a higher quality picture. The video to digital converter of the ’335 patent could produce sufficient digital data to create eight shades of grey. But the computer-to-scoreboard circuitry had to be changed and improved to process the data fast enough to light the light bulbs for eight or more different fractions of the alternating current cycle in order to create eight or more shades of grey.

I. The ’335 Patent and the “On Sale” Bar

The statute that the District Court construed in finding the ’335 patent invalid, 35 U.S.C. § 102(b) provides, in pertinent part:

A person shall be entitled to a patent unless—
(b) the invention was patented or described in a printed publication in this or a foreign country or in public use or on sale in this country, more than one year prior to the date of the application for patent in the United States . .. (emphasis supplied).

Stewart-Warner filed applications for its ’335 patent on August 9, 1973. The critical question is thus whether the scoreboard which Stewart-Warner installed in the Kansas City stadium was “on sale” pri- or to August 9, 1972.

In this Circuit, a party challenging the validity of a patent based on the statutory bar of 102(b) carries the burden of making a prima facie showing that the invention was on sale by clear and convincing evidence. Once such a showing is made, the burden shifts to the patentee to prove that the device was not on sale because it was not functionally operative, or because it was used only for testing purposes. FMC Corp. v. Myers, 384 F.2d 4 (6th Cir.1967), cert. [273]*273denied, 390 U.S.

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717 F.2d 269, 219 U.S.P.Q. (BNA) 1162, 1983 U.S. App. LEXIS 24283, Counsel Stack Legal Research, https://law.counselstack.com/opinion/stewart-warner-corporation-cross-appellee-v-the-city-of-pontiac-ca6-1983.