Court Opinion

ID: 9442691
Source: CourtListenerOpinion
Date Created: 2023-08-03 18:56:05.341348+00
Date Added: 2024-06-11T17:25:09.223988
License: Public Domain

MURRAH, Circuit Judge
(concurring m part and dissenting in part).
Within the narrow limits which I shall undertake to delineate, I agree with the majority that the Scott and Garfield Patent is valid, but I agree with Judge Huxman that the retipping operation infringes nothing that is patentable or patented. Because one can infringe only that which is patentable and protected, it seems important to define the scope of the invention in the light of the highly crowded and adjudicated prior art.
Patent No. 1,480,014, issued to Scott in 1924, was directed to conical-shaped cutters with interfitting teeth. The object of the invention, so we have said, was to provide a plurality of cutters, so shaped and mounted as to cooperate to clear each other of material, which would otherwise tend to adhere thereto and clog the cutting action of the bit. The embodiment of the invention illustrated in the patent drawings employed two cutters, although the patent was not limited in this respect and the more common practice of the day was to employ three cutters. Williams Iron Works Co. v. Hughes Tool Co., 10 Cir., 109 F.2d 500, 502.
Patent No. 1,647,753, issued to Scott and Wellensiek in 1927, was directed to long, narrow chisel-shaped penetrating teeth, arranged in circumferential rows around the cones, with their adjacent sides substantially parallel, spaced apart to provide clearance. Considering the two patents in their patentable relationship to each other, we limited the Scott Patent to a structure having interfitting teeth, and sustained the Scott and Wellensiek Patent on the size and shape of the teeth as arranged in circumferential rows around the cone to in-terfit. See Chicago Pneumatic Tool Co. v. Hughes Tool Co., 10 Cir., 97 F.2d 945. In this state of the art, we held that the restoration of the worn teeth and the furnishing of new bushings and retaining rings in the bearings of bits which had been sold for junk amounted to a furnishing of “parts which are specifically covered by the patents”. We held that this operation was “well outside the domain of permissible *288repair and restoration, and plainly constitutes infringement.” Southwestern Tool Co. v. Hughes Tool Co., 10 Cir., 98 F.2d 42, 45. See also Hughes Tool Co. v. United Machine Co., D.C., 35 F.Supp. 879.
The Fletcher Patent in suit, No. 1,856,-627, issued May 3, 1932, and now expired, also related to the roller cutters on the rotary drills, and was particularly directed to the relative size and location of the teeth on the cutters. It described the arrangement of the teeth in circumferential rows around the cutters, staggered longitudinally’ of the cutters so that the teeth were longitudinally out of alignment with the teeth in the rows adjacent thereto. Each row of teeth had a lesser number of teeth than the outer adjacent row. The teeth were chisel-shaped, approximately uniform in size and pitch, except that the outer row might be slightly longer than the others. We accorded patentability to this particular interfitting arrangement of the teeth as a combination of old elements, whereby a new and useful result was obtained, or whereby an old result was obtained in a more facile, economical and efficient way. Williams Iron Works Co. v. Hughes Tool Co., 109 F.2d 500, 506.
In Hughes Tool Co. v. Owen, 5 Cir., 123 F.2d 950, 953, it was claimed that the retipping of the teeth infringed both the Scott and Wellensiek and the Fletcher Patents. The trial court took the view that the retipping was only a permissible repair. The appellate court, however, sustained Hughes’ contention that “the teeth themselves, in their relation to each other, are the entire patented device, and it is impossible to rebuild them without reconstructing the patent as a whole”.
Since all of these patents have now expired, their teachings belong to the public, and Hughes can no longer claim protection against the practice of their disclosures.
Scott and Garfield Patent No. 1,983,316, the patent in suit and a late comer in the art, also relates to the interfitting arrangement of the teeth on the cutters of three-cone rotary drill bits. Like its forerunners, the teeth are so arranged to interfit to clean each other without tracking at the bottom of the hole. This patent was sustained in Robertson Bit Co. v. Hughes Tool Co., 5 Cir., 176 F.2d 783, 789, as the first successful “interfitting workable three cone bit”. The popular acceptance of this bit in the trade attested to its advancement of the art, and its patentability was sustained primarily 'because of its preference over the prior art. The device is undoubtedly new and useful to the industry in its hazardous search for oil and gas at constantly increasing depths below the surface. The record shows this bit drills approximately one-third more hole in two-thirds of the time required by two-cone bits, and hence conserves much valuable time consumed in pulling the pipe out of the hole to change the bits. It is the product of constant and intensive research in the art. In the face of the considered rulings of the Patent 'Office, the judgment of the Fifth Circuit, and its almost universal acceptance as a distinct advancement in the art, I ‘ am unable to say that it does not involve invention.
But, at most, it is a new combination of old elements to improve a preexisting combination, and we should be at pains not to extend its scope beyond that which is actually invented. Halliburton Oil Well Cementing Co. v. Walker, 329 U.S. 1, 10, 67 S.Ct. 6, 91 L.Ed. 3. The only possible claim for novelty or to a “substantial innovation” in the prior art is the interfit-ting arrangement of the three-cone over the interfitting arrangement of the two-cone bit as disclosed in Scott, Scott and Wellensiek and Fletcher. And, the importance of this innovation must be discounted in the light of what we said in Williams Iron Works Co. v. Hughes Tool Co., supra, in describing the plurality of cutters disclosed in Scott. Certainly it can no longer lay claim to protection for the size and shape of the teeth as it did in Southwestern Tool Co. v. Hughes Tool Co., supra.
The majority holds that by the restoration of the worn teeth to their “original form, size and position”, Williams “reconstructs and replaces that element of each patent wherein lies the novel features *289of the combination”, and that such operation constitutes infringing reconstruction. To so hold is to accord Scott and Garfield a monopoly on the size and shape of the teeth on the bit as a patentable element of the invention. And, to so hold, in my judgment, extends the scope of the invention beyond anything that is claimed in the patent or on this record. Indeed, Hughes makes no claim in this court to protection of the size and shape of the teeth, or for that matter, that their reproduction as such constitutes infringement. It is only when the teeth become worn to the extent that they no longer perform the patentable function of interfitting with each other that Hughes claims protection against restoration to their original size and shape. It is said that the bit is constructed as a unit to wear together, and when the original teeth or bearings have served their useful life, the bit is no longer useable.
The majority treats the retipping operation as if it were performed on teeth which no longer perform their interfitting function. If I could agree to this premise, I should have no difficulty agreeing that the restoration of the teeth by retipping constitutes an infringing reconstruction. But the record shows without dispute that in some instances, depending upon the formation encountered, the bearings in the bits become worn and unsafe, while the teeth on the bits are yet capable of further service, while in other instances, the teeth become worn and lose their penetrative effectiveness, while the bearings and other parts are yet capable of useful service. It is these latter bits which are carefully selected for retipping. Moreover, if as suggested, all parts are intended to wear together, it seems unlikely that the original bearings would outlast the teeth to the extent that their restoration would amount to an infringing reconstruction.
In our case, unlike Southwestern Tool Co. v. Hughes Tool Co., supra, the bits involved have not been discarded for junk, the customer claiming no further right to use them. Instead, they have asserted continued useability and a further right to their use, releasing them only temporarily for the restoration of a constituent but nonpatentable part. Believing as I do that the only patentable element of the device lies in the novelty of the three-cone inter-fitting arrangement of the teeth on the bits, I cannot believe that the reshaping of the teeth on the cutters after the bits have lost their penetrative effectiveness, is any more than the prolonging of the useful life of that for which the customer has bargained. Otherwise stated, it is “no more than the exercise of that right of care which everyone may use to give duration to that which he owns or has a right to use as a whole.” Wilson v. Simpson, 9 How. 109, 50 U.S. 109, 13 L.Ed. 66. In the words of Mr. Justice Holmes, it is “the construction of a bargain on principles of common sense applied to specific facts.”
This brings us to the validity of the leasing contract. If I could agree with the majority that the retipping operation constituted an infringement, I should have no difficulty agreeing to the validity of the contract, for it would do no more than prevent infringement. Indeed, it becomes superfluous, for the patent itself affords its own measure of protection. But Hughes takes the position that the lease is valid to prevent retipping whether it be construed as repair or reconstruction. It contends in effect that it has the contractual right to limit the right of the use of its product as to time and space, and that it may therefore legitimately say when and on what conditions it shall be let for use. By Williams we are urged to construe the language of the lease contract as specifying the surrender of the bits upon contingencies indicating a passing of title as well as possession. Our attention is called to the fact that Hughes treats the invoices of the bits on its books as a sale for inventory and tax purposes, and that the reclaimed bits are eventually sold for junk. But, I do not believe that this contract should be so captiously construed.
Even though the contract be said to be a contract for the useful life of the bits, Williams strenuously denies that by its terms or legal effect it does preclude re-tipping as a noninfringing repair. The argument is to the effect that the purpose of the agreement is to let the bit to the *290lessees for its full and complete economic life, and that the right to demand its return does not accrue until its economic usefulness has been exhausted; that the lessee is therefore free to perform any needful repair to prolong his bargain.
While denying that the prevention of retipping is the primary object of the leasing agreement, Hughes contends that it has the legal effect of doing so. It takes the position that when either the original teeth or bearings have served their useful life, the bit is no longer safe for drilling operations, and in the interest of safety and efficiency, the bit should not be used again. It would justify the restriction as an appropriate means of retaining exclusive control of its product for experimental and development purposes, and for the protection of its integrity and reputation.
If the parties intended that the lessee should have the full economic benefits of the bit, the lease is susceptible of Williams’ construction, and I could agree with Judge Huxman’s conclusions in that respect. But I do not believe that such are the terms or legal effect of the contract. In the first place, the contract plainly obligates the lessee to surrender the bit, upon request, when the original cutter teeth and/or bearings have served their useful life, not when both contingencies have accrued, as Williams suggests. To me, this language clearly indicates that the lease was intended to let something less than the full economic life of the bit. My determination that retipping constitutes noninfringing repair is necessarily based upon the postulate that the economic life of the bit has not been completely exhausted when it is retipped.
When, therefore, the contract is fairly construed within its four corners in the light of its purposes and the conduct of the parties, it has, in my judgment, the legal effect of preventing retipping of original teeth after they have served their useful life. In other words, the contract has the effect of prohibiting that which the patent does not. I haven’t any doubt of the right of Hughes to lease its patented bits on terms reasonably appropriate to the effect-uation of its business policies. Lease contracts for the use of machinery, patented or unpatented, are not unusual in industry. Nor should they be suspect unless they may be said to be “disguised restraints of free competition”. International Salt Co. v. United States, 322 U.S. 392, 398, 68 S.Ct. 12, 16, 92 L.Ed. 20.
But, since the contract lies outside of the patent monopoly, it can claim no immunity from laws prohibiting contracts which unreasonably restrain interstate trade or commerce, or which tend to create monopolies. United States v. Line Material Co., 333 U.S. 287, 68 S.Ct. 550, 92 L.Ed. 701; United States v. U. S. Gypsum Co., 333 U.S. 364, 68 S.Ct. 525, 92 L.Ed. 746.
Undoubtedly, the leasing arrangement, when construed to prevent retipping, will have the effect of restraining interstate trade and commerce in the bits to the extent at least that the retipped bits are excluded from the market. And, competition in the bits will thus 'be lessened to the same extent. But not all contracts in restraint of trade are prohibited by Sections 1 and 2 of the Sherman Act, 26 Stat. 209, 15 U.S.C.A. § 1. Since Standard Oil Co. v. United States, 221 U.S. 1, 31 S.Ct. 502, 55 L.Ed. 619, and United States v. American Tobacco Co., 221 U.S. 106, 31 S.Ct. 632, 55 L.Ed. 663, only those contracts which unreasonably restrain trade as defined at common law are forbidden by the Sherman Act. Dr. Miles Medical Co. v. Park & Sons Co., 220 U.S. 373, 31 S.Ct. 376, 55 L.Ed. 502; United States v. Gypsum Co., supra, 333 U.S. at page 400, 68, S.Ct. 525; United States v. Aluminum Co. of America, 2 Cir., 148 F.2d 416. Nor can I say on this record or in this posture of the case that the contract is unreasonable per se. We are not dealing with a price-fixing combination as in Standard Sanitary Mfg. Co. v. United States, 226 U.S. 20, 33 S.Ct. 9, 57 L.Ed. 107; United States v. Socony-Vacuum Oil Co., 310 U.S. 150, 60 S.Ct. 811, 84 L.Ed. 1129; United States v. Line Material Co., supra; United States v. U. S. Gypsum Co., supra; and Mandeville Farms v. American Crystal Sugar Co., 334 U.S. 219, 68 S.Ct. 996, 92 L.Ed. 1328; nor a conspiracy to monopolize as in United States v. American Tobacco Co., supra.
*291Section 3 of the Clayton Act, 38 Stat. 730, 15 U.S.C.A. § 14, proscribes all contracts for the sale or lease of machinery, patented or unpatented, on condition that the lessee will not purchase or use the machinery of a competitor of the lessor, where the effect of such contract or understanding is to substantially lessen competition, or tends to create a monopoly in any line of commerce. And such contracts are unreasonable per se. Fashion Originators Guild v. Federal Trade Commission, 312 U.S. 457, 61 S.Ct. 703, 85 L.Ed. 949; International Salt Co. v. United States, 332 U.S. 392, 68 S.Ct. 12, 92 L.Ed. 20. Cf. Standard Oil Co. v. United States, 337 U.S. 293, 69 S.Ct. 1051, 93 L.Ed. 1371.
But this Section of the Clayton Act was intended to prohibit specific practices of a seller or lessor affecting his competitor or competitors, and I am unable to say that the noninfringing repairmen are competitors within the meaning and prohibition of Section 3 of the Clayton Act. Certainly they are not competitors in the sense that they make, vend, use or lease the same article of trade, otherwise they would be infringers. They compete only by prolonging the life of the article. But even though they be called competitors within the meaning of the Act, I cannot say on this record and in this posture of the case whether the effect of the retipping operations is to substantially lessen competition or create a monopoly, i.e. Standard Oil Co. v. United States, supra.
The trial court sustained the lease as an “established practice in the industry”, and concluded that neither the original lessee nor anyone else had the right to retip or rebuild the teeth without consent of the lessor. The leasing method was also approved as “practical, reasonable, and completely fair” in Robertson Rock Bit Co. v. Hughes Tool Co., 5 Cir., 176 F.2d 783, 785 But in both instances the judgment was based upon the postulate that retipping activities amounted to an infringement, and that the leasing agreement was therefore effectual to prevent it. In neither case did the court judge the contract as a restraint upon a noninfringing operation. In the view the trial court took of our case, it had no occasion to consider the impact of the antitrust laws on the contract insofar as it prohibited noninfringing retipping. I think that question involves both law and fact which should be decided in the first instance by the trial court.
I would hold the patent valid but non-infringed by the retipping operation; that the contract is a lease, having the legal effect of precluding retipping operations, the validity of which must be judged without reference to the patent or patent law. I would leave the question whether the contract can be squared with the antitrust laws to the consideration and decision of the trial court in the first instance.