Allen Engineering Corp. v. BARTELL INDUSTRIES

Citations: 46 F. Supp. 2d 867; 1999 U.S. Dist. LEXIS 5443; 1999 WL 223305Docket: J-C-95-143

Court: District Court, E.D. Arkansas; April 13, 1999; Federal District Court

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The United States District Court for the Eastern District of Arkansas ruled on April 13, 1999, in the case of Allen Engineering Corporation v. Bartell Industries, Inc. and Darragh Company. The court found that Bartell infringed Allen's U.S. Patent No. 5,108,220 (the 220 patent) related to riding trowels but did not infringe U.S. Patent No. Des. 323,510 (the 510 patent). Furthermore, the court concluded that the defendants did not violate the Lanham Act. 

Allen Engineering Corporation, based in Paragould, Arkansas, manufactures industrial concrete finishing equipment, including its Razorback line of riding trowels, which are innovative concrete finishing machines allowing operators to sit and steer while smoothing freshly poured concrete. Bartell Industries, a Canadian corporation, and Darragh Company, an Arkansas distributor for Bartell's products, were the defendants in this case. 

The court's findings established that Allen holds two patents for its riding trowels, with inventors being J. Dewayne Allen and Hugh L. Adams. The riding trowel industry is rooted in earlier patents held by Orville H. Holz, Sr. and Norbert J. Holz, which were licensed to multiple companies, including Bartell. Allen began developing its first model, the 'Red Rider,' in 1987, which aimed to attract market interest alongside its technical advancements.

Allen sold the Red Rider trowel from 1988 to early 1990, with over 100 units sold in the U.S., although the exact number is unknown. He had an agreement with market users to repair or replace units that were problematic, ensuring no delay in the productivity of concrete finishers. Following the completion of the inventions in the 220 patent, customers returned Red Rider units for replacements featuring those new designs. The Red Rider was essentially an experimental prototype, undergoing constant modifications based on field tests, making adequate research and development in a factory setting impractical.

The Red Rider is categorized as a 'front facing' trowel, where the operator sits on a forward-facing seat above the engine, with blades positioned to the sides, contrasting with 'straddle rider' trowels where the operator straddles the machine with blades positioned in front and behind. Steering is achieved through two control sticks that tilt the gearboxes and, in turn, the rotating blades, differing from the single steering stick in Holz patents. The Red Rider also employed a direct drive arrangement between gearboxes and used parallel lever arms for tilting, addressing issues found in the original Holz design.

In late summer 1989, Allen and Hugh Adams began developing an improved Red Rider prototype, which was tested in California in 1990 and showcased at the World of Concrete trade show in Las Vegas. Observers from Bartell inspected the prototype at this event. Allen applied for the 510 patent on May 21, 1990, and the 220 patent on July 13, 1990, with both patents issued in 1992. Notice of the pending applications was provided to third parties, despite a minor typographical error on the trowels that did not affect the notice requirement. Bartell had introduced its BTR series straddle riding trowel at the 1988 World of Concrete, utilizing a steering mechanism disclosed in a Holz patent.

Bartell identified inefficiencies in its initial BTR trowel design and subsequently introduced an improved model at the 1989 World of Concrete show. This updated BTR model utilized direct tilting of gearboxes for steering, replacing the previous 'torquing the rings' mechanism, and was sold throughout 1989. Two BTR models, the BTR 72 and BTR 88, are currently available, differing only in size. In January 1992, Bartell launched its first forward-facing ride-on trowel at the same show. Later, in December 1992, Allen alleged that Bartell infringed upon the 220 patent.

The design of the 510 patent features elements commonly found in previous riding trowel designs, such as an operator's seat above the engine and twin sticks for steering. The Court evaluated the Bartell riding trowel against the 510 patent using the visual similarity test for design patent infringement, concluding that they were not "substantially the same." Key differences identified included the placement and design of components such as the motor, lights, foot pedals, and operator platform. The Court determined that the Bartell trowel did not pass the ordinary observer test due to these distinct variations. Furthermore, the Bartell trowel was found not to incorporate any unique points of novelty that differentiate it from the 510 patent, which shares many features with prior art, including the layout of the operator's seat, motor, and supporting frame.

The Bartell trowel does not infringe on the 510 patent as it does not incorporate any novel aspects of the design. The 220 patent, however, centers on enhanced steering characteristics, specifically the unique use of an offset torque rod, which differentiates it from previous designs. The Bartell 1 trowel directly infringes on Claim 15 and its dependent claims of the 220 patent due to its use of this technology. Bartell 2, despite minor design modifications, functions as a structural and functional equivalent to the 220 patent, performing the same functions in a comparable manner.

The Court found no evidence that Allen failed to disclose relevant prior art or misled patent examiners during the 220 patent application. Although prior art is now known, there was no proof that the inventors were aware of it or concealed it from the examiner at the time. Allen demonstrated the need for injunctive relief against Bartell for ongoing patent infringement, warranting damages due to Bartell’s infringing actions.

Jurisdiction is established under various statutes, confirming personal jurisdiction over Bartell and Darragh, with appropriate venue in this district. The 510 patent's features are primarily functional, and the design cannot be patented if dictated by its utility. The Court applied a two-pronged test for design patent infringement, concluding that the Bartell trowel does not infringe the 510 patent. The 220 patent claims are presumed valid and enforceable, placing a burden of proof on those challenging its validity. Allen must demonstrate that the claims asserted against the Bartell trowel are present either literally or through equivalents.

The doctrine of equivalents permits a finding of patent infringement even when there is no literal infringement, as long as the differences between the patented invention and the accused product are not material. To prove infringement by equivalence, the accused product must perform substantially the same function in a similar manner to achieve a comparable result. The court must first interpret the claims asserted as infringed and compare these claims to the allegedly infringing product. Claims are construed in light of the specifications while aiming to preserve their validity. Secondary considerations in determining infringement may include the necessity for the invention, its commercial success, availability of alternatives, and evidence of copying.

The court found that Bartell's trowel 1 directly infringes the 220 patent, while trowel 2 infringes through equivalent means. The defendants' arguments against infringement, including failure to properly mark the trowels with patent identification and claims of inequitable conduct before the Patent and Trademark Office (PTO), were deemed unpersuasive. Although a typographical error was identified in the patent marking, it was not material, allowing for damages from the date Bartell copied Allen’s patented trowel and when Darragh began selling the infringing trowels.

Regarding the claim of unenforceability due to inequitable conduct, the defendants must prove by clear and convincing evidence that Allen intentionally misled the PTO by withholding material information, particularly prior art. A finding of deceptive intent requires more than mere inference or negligence; it necessitates a strong factual basis indicating intent to deceive, considering all evidence, including indications of good faith.

Defendants in Braun Inc. v. Dynamics Corp. of America argued that the responsibility for locating prior art lies solely with the patent applicant. The Court rejected this notion, asserting that it is inappropriate to rely on counsel's candor instead of the patent examiner's obligation to review claims. The Court affirmed that a proper examination occurred during the patent application process, supporting the patents' issuance. It determined that the "Red Rider" was an incomplete experimental model, which did not require disclosure as it was not material for obtaining patents 220 or 510. The Court stated that developments related to the Red Rider were not public due to their exploratory nature, placing the burden of proof on those challenging the patent's validity.

The Court also explained the on-sale bar under section 102(b), emphasizing that public use does not commence until an invention exits the experimental phase. It concluded that Defendants failed to demonstrate any deception by Allen during the patent application process.

Regarding the Lanham Act, the Court noted that it adheres to Eighth Circuit law on trade dress issues while retaining appellate jurisdiction over related claims due to their connection to patent law. The Court assessed whether Defendants' actions could cause confusion under section 43(a) of the Lanham Act but found that significant differences in color and labeling between products negated any likelihood of confusion, thus ruling out a violation.

The Court dismissed all other claims not addressed in the Plaintiff's post-trial brief. It ordered permanent injunctive relief against Defendants to prevent the distribution of infringing products and granted the Plaintiff damages under 35 U.S.C. §§ 284 and 289, including restoration of profits and potential treble damages due to Defendants' willful infringement. The computation of damages will be determined in a future hearing with Magistrate Judge Jerry W. Cavaneau, whose findings will be reviewed by the Court afterward.