United States v. E. L. Markham, Jr.

537 F.2d 187, 1976 U.S. App. LEXIS 7509
CourtCourt of Appeals for the Fifth Circuit
DecidedAugust 18, 1976
Docket75-3839
StatusPublished
Cited by65 cases

This text of 537 F.2d 187 (United States v. E. L. Markham, Jr.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Fifth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
United States v. E. L. Markham, Jr., 537 F.2d 187, 1976 U.S. App. LEXIS 7509 (5th Cir. 1976).

Opinion

SIMPSON, Circuit Judge:

The appellant, E. L. Markham, Jr., was convicted after jury trial under an indictment charging him in a single count with violation of Title 18, U.S.C., Section 1001. The indictment was based upon the prosecution by appellant of a patent application before the United States Patent Office, the charge being essentially that Markham attempted to conceal from the Patent Office *189 the true inventor of the process for which a patent was sought.

Three purported errors of the trial court are urged on appeal. Markham asserts that the court erred (1) in denying defendant’s motion to dismiss the indictment as facially insufficient, (2) in denying his motion for judgment of acquittal because of insufficiency of the evidence, and (3) in prejudicially limiting the scope of defense counsel’s cross-examination of certain witnesses. We find each point raised to lack merit, and accordingly affirm.

FACTS

Viewing the evidence at trial in the light most favorable to the government, Glasser v. United States, 1942, 315 U.S. 60, 80, 62 S.Ct. 457, 469, 86 L.Ed. 680, 704; United States v. Warner, 5 Cir. 1971, 441 F.2d 821, 831, we note the following relevant facts.

In 1957 Orlando F. Klein patented a building process for construction of buildings by using corrugated asbestos panels with insulation sandwiched between them. Appellant invested in this process, and was an assignee of an interest in the patent. One house was built using this process and a second was partially completed. The project ran out of funds so that the process was never commercially exploited. Appellant and his fellow investors never received a return on their investment.

Between 1963 and 1968 Klein developed another building process he termed the “Drycore” system which differed substantially from the patented system. The new concept, simply described, called for the use of horizontally corrugated asbestos panels with insulation sandwiched between them, to be erected prior to the pouring of the slab and foundation of the building, with the asbestos panels serving as walls. Insulated heating and cooling ducts were formed, and steel reinforcing rods were set lacing through the asbestos walls throughout the area for the foundation and floors. Thus when the foundation and floor slab were poured in concrete, the walls, floor foundation, and heating and cooling ducts all became one integrated unit. The roof, constructed of the same material, was to be similarly tied to the structure by reinforcing bars and concrete, resulting in an extremely well insulated building designed to be economically and quickly built.

Between 1965 and 1969, Orlando Klein and Markham met several times to discuss the system. In 1968 Klein had an architectural firm draw up a set of house plans utilizing the Drycore program. These plans clearly identified Klein as developer of the system by means of a printed legend. Copies of the plans were distributed in 1968 to appellant and several other persons. In January, 1969, Klein and several investors to whom he had sold franchises in the Dry-core system began construction of a model home in Grand Prairie, Texas, using Klein’s plans. Markham was not an investor, although he was attorney for the project, which was to be incorporated. He appeared to believe that his percentage of the prior patent gave him a similar interest in the Drycore process. The Grand Prairie house took nine months to complete rather than the anticipated 21 days. The investors, the actual builders of the house, blamed their difficulties on Klein. Markham did not see the house until it was nearly complete. At that time signs around the house prominently stated that the construction technique had been developed by Klein.

Klein and his wife went to Markham’s office on September 19, 1969, to sign articles of incorporation for the Drycore project. When they saw the final documents they expressed doubts and stated their desire to obtain another legal opinion before they signed. Appellant became angry and ordered the Kleins from his office, which marked the end of their attorney/client relationship. The following day Klein wrote Markham that it was important for the process to be incorporated to avoid a “deterioration” of the total concept, which he described as “entirely foreign” to the method patented in 1957.

Klein’s relationship with the investors and purported franchisees rapidly deteriorated after the Grand Prairie model home was completed. Those investors realized *190 that they were in danger of losing their money due to Klein’s inability or refusal to take any action to market or distribute his process. Klein, aside from not having yet incorporated his project, as he had promised, had misled the investors by stating that his construction process was covered “by patents granted and pending”. The only existing patent was that of 1957. Klein’s concept of patent pending was merely that he had placed documents with his patent lawyer in anticipation of filing an application. Klein also failed to carry out a promise to build a model home in Houston prior to a major builder’s conference there in early 1970.

Several disgruntled investors, including Messrs. Roberts, Shipley, and Crowson, met with Markham in December 1969 to discuss means of protecting their investments. A decision was reached to construct a Houston demonstration home without Klein’s participation, but using the plans and knowledge they had obtained from constructing the Grand Prairie home. The group planned also to sell franchises for the building method. To this end a corporation, “Dry-Therm”, was formed, with Markham as president. Tentative plans were made to escrow a percentage of Dry-Therm profits for the Kleins. Shipley, Roberts, and Crow-son assigned to Dry-Therm the rights Klein had sold them under franchise agreements. Markham assigned to Dry-Therm his supposed interest under the old patent. Markham also furnished the major portion of the funds required to build the Houston house. This house was built, primarily by Shipley and Roberts, very quickly in January of 1970. With the exception of minor variations and innovations, the Houston house was substantially identical to the Grand Prairie model house. Appellant and Roberts prepared an advertising brochure from the Grand Prairie plans and prior advertising material of Klein.

Klein had not filed for a patent on his building process. The investors feared they would lose their investments because one year after the completion of the Grand Prairie model home the concepts of Drycore would become prior art and a part of the public domain, and therefore unpatentable. 1 Markham arranged a meeting between Shipley, Roberts, Crowson, and his patent attorney, Howard Moore. Roberts, for one, asserted at trial that he understood that a patent application was to be filed on behalf of Klein, and that Moore had said such action was possible. Markham asked Roberts and Shipley whether they thought they had any patentable ideas. Each man suggested relatively small design modifications of the Klein process, and sketched these ideas for the benefit of the patent attorney.

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Bluebook (online)
537 F.2d 187, 1976 U.S. App. LEXIS 7509, Counsel Stack Legal Research, https://law.counselstack.com/opinion/united-states-v-e-l-markham-jr-ca5-1976.