Panduit Corporation v. Dennison Manufacturing Co.

Appeal from a judgment of the United States District Court for the Northern District of Illinois, Eastern Division, holding claims 1-4, 7, 10, 12, 14-22 and 24-27 of United States Patent No. 3,537,146 (‘146 patent), claims 1, 10 and 12 of United States Patent No. 3,660,869 (‘869 patent), and claims 1, 2, 5, 6, 11, 17, and 21 of United States Patent No. 3,965,538 (‘538 patent) invalid on the ground of obviousness, and the same claims of the ‘538 patent invalid on the ground of double patenting. We reverse.

Background

(1) The Art

One-piece cable ties are used to bind a bundle of cables or insulated wires. Looped around the bundle, a strap has one end passed through an opening in a frame at the other end. Teeth on the strap engage with a locking device at the frame. The strap and device operate to permit tensioning of the strap end to prevent its loosening or withdrawal.

Prior art cable ties with rigid locking devices had a desired high strap withdrawal force, but an undesired high strap insertion force. Conversely, those with flexible locking devices had an undesired low withdrawal force and a desired low insertion force.

(2) The Real World Story

As stated in Rosemount, Inc. v. Beckman Instruments, Inc., 727 F.2d 1540, 1544, 221 USPQ 1, 5 (Fed.Cir.1984), many patent suits “arise out of the affairs of people, real people facing real problems.” That is true of the present suit.

Jack E. Caveney founded Panduit in the basement of his home in 1955, making first a plastic wiring duct. In 1958, he developed and began selling a two-piece plastic cable tie. In 1961, he began a research program to develop a one-piece plastic cable tie. That program lasted nine years and cost several million dollars. The end *1085 result of that program is the tie of the ’538 patent, which includes the features of all three patents in suit. Primary among its advantages are the minimal force required to deflect the locking member when the strap is inserted through the frame and the high force required to withdraw the strap from the frame. Jack Caveney was the first to envision and achieve a cable tie having a higher ratio of low strap insertion force and high strap withdrawal force than anyone else had ever achieved or thought possible. Panduit’s commercial embodiment of the patents in suit achieves an insertion force of one-half pound and a withdrawal force of 80 pounds.

First sold in 1970, the tie of the ’538 patent had by 1984 achieved annual sales of $50 million, and was accounting for half of Panduit’s total profits and 80 percent of its cable tie sales.

Beginning in 1968, Dennison Manufacturing Corporation (Dennison) put its staff of engineers and designers to work on a one-piece cable tie development program. It carried that program on at considerable expense for ten years, developing many ties and patenting some. None was successful. With the ’869 patent before it, Dennison copied the tie claimed in that patent in 1976. When the ’538 patent issued in 1976, Dennison thereupon copied the tie claimed in that patent. Having failed to succeed for over ten years with ties of its own design, Dennison achieved such success with its copy of the ’538 tie as to make Dennison the second or third largest supplier of one-piece cable ties.

(3) The Patents in Suit 1

The ’146 patent issued November 3, 1970 on an application filed August 6, 1968. Figure 7 is representative:

The ’869 patent issued May 9, 1972 on an application filed May 1, 1969. Figure 9 is representative:

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