author: MILLER, Judge.

text:
    The UNITED STATES, Appellant, v. DOUGLAS AIRCRAFT CO., Appellee.
    Customs Appeal No. 74-26.
    United States Court of Customs and Patent Appeals.
    Feb. 20, 1975.

      Carla A. Hills, Asst. Atty. Gen., Andrew P. Vance, Chief, Customs Section, Bernard J. Babb, New York City, for the United States.
    Glad, Tuttle & White, Los Angeles, Cal., attys. of record, for appellee. Edward N. Glad, Los Angeles, Cal., of counsel.
    Before MARKEY, Chief Judge, and RICH, BALDWIN, LANE and MILLER, Associate Judges.
   MILLER, Judge.

This appeal is from the judgment of the United States Customs Court, 72 Cust.Ct. 10, C.D. 4498, 370 F.Supp. 1404 (1974), denying appellant’s motion for judgment on the pleadings and granting appellee-importer’s motion for summary judgment, involving appraisement of the processing subject to duty of a wing assembly and tail assembly (for a DC 9 airplane) which were exported from the United States to Canada for further processing and then returned to the United States for further processing. We reverse.

PROCEEDINGS BELOW

The district director at the port of Detroit found the value of the processing in Canada subject to duty to be $285,552 under item 806.30 of the Tariff Schedules of the United States in accordance with headnote 2, Subpart B, Part 1, Schedule 8. Appropriate extracts from the law are quoted below.

Schedule 8. — Special Classification Provisions Part 1. Articles Exported and Returned
Subpart B. Articles Advanced or Improved Abroad
Subpart B headnotes:
2. Articles repaired, altered, processed, or otherwise changed in condition abroad. — The
following provisions apply only to items 806.10, 806.20, and 806.30:
(a) The value of repairs, alterations, processing, or other change in condition outside the United States shall be—
(i) the cost to the importer of such change; or
(ii) if no charge is made, the value of such change,
as set out in the invoice and entry papers; except that, if the appraiser concludes that the amount so set out does not represent a reasonable cost or value, then the value of the change shall be determined in accordance with section 402 or 402a of this Act.
Articles returned to the United States after having been exported to be advanced in value or improved in condition by any process of manufacture or other means: ******
806.30 Any article of metal (except precious metal) manufactured in the United States or subjected to a process of manufacture In the United States, if exported for further processing, and if the exported article as processed outside the United States, or the article which results from the processing outside the United-States, is returned to the United States for further processing......A duty upon the value of such processing outside the United States (see headnote 2 of this subpart).

Included in the $285,552 value determined by the Customs Service for the processing in Canada was the amount of $49,972, representing the pro rata share * of the cost of Canadian-made tooling, which appellee-importer contended it furnished the Canadian processor. Appellee-importer argues that none of the cost of such tooling should be included in the value of the processing subject to duty.

The Customs Court considered the circumstances of this case to be directly analogous to those in so-called “separable” appraisements and stated that the sole question was the propriety of including the disputed separable amount of $49,972 in the value determined by the Customs Service. In holding that such inclusion was not proper, the Customs Court concluded that, in the absence of extraordinary circumstances, the value of processing is the “cost to the importer,” as provided by headnote 2(a)(i), and that this simply means the amount charged by the processor. It reasoned that the immediately following reference in headnote 2(a)(ii) to the possible circumstance “if no charge is made” reinforced its conclusion. And it relied on the Customs Court’s decision in National Tube Co. v. United States, 28 Cust.Ct. 603, Reap.Dec. 8107 (1952), for its further conclusion that a distinction between tooling expenses incurred in the United States and those incurred outside the United States is unjustified. Although recognizing that the present statutory language (value of “processing”) differs from the language involved in the National Tube case (value of “repairs or alterations”), it said that the transition to the present language was “a natural one without . . . any new distinctions or meanings . . .”

OPINION

The key phrase in the Tariff Schedules on which this case turns is “value of . processing . . . outside the United States.” This was immediately derived from subparagraph 1615(g)(4) of the Tariff Act of 1930, ch. 497, Pub.L. No. 361, 46 Stat. 674, which was added by the Customs Simplification Act of 1954, ch. 1213, Pub.L. No. 768, 68 Stat. 1137. As originally enacted in the Tariff Act of 1930, paragraph 1615 provided for duty free treatment of—

Articles the growth, produce or manufacture of the United States, when returned after having been exported, without having been advanced in value or improved in condition by any process of manufacture or other means if imported by or for the account of the person who exported them from the United States .

and further:

articles exported from the United States for repairs may be returned upon payment of a duty upon the value of the repairs at the rate at which the article itself would be subject if imported .

The above portions of paragraph 1615 were substantially incorporated into sub-paragraphs 1615(a) and 1615(g), respectively, by the Customs Administrative Act of 1938, ch. 679, Pub.L. No. 721, 52 Stat. 1092. Subparagraph 1615(g) then read as follows:

(g) Any article exported from the United States for repairs or alterations may be returned upon the payment of a duty upon the value of the repairs or alterations at the rate or rates which would apply to the article itself in its repaired or altered condition .

Thus, it is seen that the words “or alterations” were added to “repairs” by the 1938 Act.

Prior to the amendment by the Customs Simplification Act of 1954 which added “processing” to “repairs” and “alterations” in subparagraph 1615(g)(4), it appears that, in the case of articles sent by U.S. manufacturers along the Canadian border to Canada for processing and return to the United States for additional processing, duty was imposed on not only the value of the Canadian processing but also on the value of the article in its original exported form. Such treatment was based on subparagraph 1615(g) of the Tariff Act of 1930, as amended by the 1938 Act, with interpretation by the Customs Service of “repairs” and “alterations” being limited chiefly to those of a mechanical nature on equipment such as locomotives and buses. It was objected that imposing duty on the value of the article in its original exported form constituted a duty on American material and American labor. Hearings on H.R. 5106 Before the House Comm, on Ways and Means, 83d Cong., 1st Sess., 199-200 (1953).

Although addition of the word “processing” appears to have been designed to alleviate hardship to U.S. manufacturers arising from the narrow interpretation of “repairs” and “alterations,” there is nothing in the legislative history to indicate that, when Congress provided, commencing with the 1954 Act, for “cost” or “reasonable cost” in determining the “value” of processing, there was any intention that “cost” be interpreted other than according to sound business accounting practice. Thus, cost of processing would include both direct and indirect costs. Indirect costs include factory overhead, which is normally added during the entire processing operation. S. Davidson, Handbook of Modern Accounting 38-16 (1970). Factory overhead is all manufacturing costs other than direct materials and direct labor and includes depreciation of the factory buildings and equipment. G. Johnson & J. Gentry, Finney and Miller’s Principles of Accounting 413 (Introductory 7th ed. 1970). Longer-life tools are- set up as an asset and depreciated at an appropriate average rate; tools with a short life may be handled in a variety of ways, including charging their cost to production cost. R. Wixon, W. Kell, & N. Bedford, Accountants Handbook 16-34 (5th ed. 1970). When amortization rather than depreciation is used, a “customary” approach is to divide the amount to be amortized by units of expected work volume in order to obtain comparative costs per unit of work produced. W. Fiske & J. Beckett, Industrial Accountant’s Handbook 377 (1954). Needless to say, only the costs allocable to a particular job order or contract are chargeable thereto. American Propeller & Mfg. Co. v. United States, 17 F.Supp. 215, 83 Ct.Cls. 100 (1936); Missile Systems Corp., ASBCA No. 8153, 64 BCA par. 4398 (1964).

Appellant states that the disputed charges in the National Tube case “essentially were for charges on articles designed and produced in the United States and sent to Canada, whereas the tooling in dispute herein was Canadian-made.” However, it appears that the disputed charges in National Tube were for special equipment (designed in the United States) which was manufactured in Canada. See National Tube Co. v. United States, 26 Cust.Ct. 461, 462, Reap.Dec. 7923 (1950). This identity between National Tube and the case at bar was emphasized by the Customs Court, when it stated: “As here, the supplied tooling [in National Tube] was made in Canada.”

Appellant argues that section 10.8(1) of Customs Regulations (19 C.F.R. § 10.8(1) (1966)) does not exclude expenses for tooling incurred in its production in a foreign country; that if the regulation were meant to exclude foreign tooling, it would have stated that all expenses for tooling, no matter where incurred, are to be excluded from the value of processing done abroad. The substance of this regulation was first promulgated as T.D. 54192 on September 22, 1956 (21 Fed.Reg. 7212), and the language specifically excluding any of the expenses in this country (including tools for doing the processing) has continued ever since. 19 C.F.R. § 10.9(1) (1974). It is to be presumed that Congress was familiar with and sanctioned the regulation when, in 1962 (Pub.L. No. 87-456, 76 Stat. 72), it authorized promulgation (without change in the key phrase interpreted by the regulation) of the Tariff Schedules of the United States, as set forth in the Tariff Classification Study of November 15, 1960. Helvering v. Winmill, 305 U.S. 79, 83, 59 5. Ct. 45, 83 L.Ed. 52 (1938). See United States v. Bartram Bros., 131 F. 833, 837 (2d Cir. 1904). Compliance with this regulation is required. Keeler v. United States, 45 CCPA 67, C.A.D. 675 (1958). See New York Dept. of Social Services v. Dublino, 413 U.S. 405, 421, 93 S.Ct. 2507, 37 L.Ed.2d 638 (1973). Also, the plain meaning of the regulation is that only expenses in this country are excluded — a meaning supported by the maxim ex-pressio unius est exclusio alterius.

Appellee argues that the interpretation by the Appellate Term of the Customs Court in the 1952 National Tube opinion properly reflects Congressional intent that foreign-made tooling is no more a part of “the value of such processing outside the United States” than is the tooling made in the United States and supplied to the foreign processor, because the primary statutory language of value of “alterations” or value of “processing” remained unchanged during subsequent amendment to the Tariff Act of 1930 by the Customs Simplification Act of 1954 and enactment of the Tariff Schedules of the United States. It cites United States v. D. H. Grant & Co., 47 CCPA 20, 27, C.A.D. 723 (1959) for the presumption in legislative interpretation that reenactment of a statutory provision by Congress without significant change indicates the correctness of prior judicial interpretation of that provision.

First, the presumption argued for by appellee “is only an aid in statutory construction.” Helvering v. Reynolds, 313 U.S. 428, 432, 61 S.Ct. 971, 973, 85 L.Ed. 1438 (1941). It arises only when the statutory language has remained unchanged or substantially unchanged. The National Tube case involved interpretation of “value of the repairs or alterations” in paragraph 1615(g) of the Tariff Act of 1930, as amended, prior to addition of the word “processing” by the Customs Simplification Act of 1954 and, as pointed out above, this change in the statutory language was prompted by the narrow interpretation which had been given “repairs” and “alterations.” Perhaps the change was a “natural one,” but we cannot agree with the Customs Court that it was without “any new distinctions or meanings.” It was a substantial change.

Second, we have been unable to find, and appellee has not pointed out, any indication in the legislative history of the Customs Simplification Act of 1954 and of the Tariff Schedules of the United States, including the pertinent Tariff Classification Studies and Tariff Commission Reports, that the National Tube case was considered by Congress. This is not surprising in view of the Supreme Court’s statement: “One decision construing an act does not approach the dignity of a well settled interpretation.” United States v. Raynor, 302 U.S. 540, 552, 58 S.Ct. 353, 358, 82 L.Ed. 413 (1938). We note that United States v. D. H. Grant & Co., supra, cited by appellee for the above-stated presumption, in turn cited United States v. Bassichis Co., 16 Ct.Cust.App. 410, T.D. 43133 (1928), and James P. Smith & Co. v. United States, 21 CCPA 514, T.D. 46971 (1934). In the latter, the court referred to “this long line of uniform judicial holdings” by the Board of General Appraisers, and in the former the court stated the presumption on the basis of a holding by the Board of General Appraisers followed by reenactment of “the identical language” which had been interpreted.

Indeed, we read the 1952 National Tube opinion as supporting the proposition that foreign-made tooling should be taken into account in determining the value of processing outside the United States. To the extent that it might be interpreted otherwise, it would not reflect the law.

The Customs Court, in determining that the amount charged by the processor is the “cost to the importer” and that this is the “value” of the processing for purposes of headnote 2(a), apparently ignored the exception provided in headnote 2(a), namely:

except that, if the appraiser concludes that the amount so set out [in the invoice and entry papers] does not represent a reasonable, cost or value, then the value of the change shall be determined in accordance with section 402 or 402a of this Act.

At least the Customs Court determined that the failure to include any costs attributable to the tooling was not such an “extraordinary circumstance” that the method provided for by the exception was triggered. The statute does not require an “extraordinary circumstance,” but only the appraiser’s conclusion (albeit not an arbitrary one) that reasonable cost or value has not been set out. We conclude that appellee’s failure to take into account the Canadian-made tooling would have been a reasonable and proper basis for the appraiser to determine the value of the processing in accordance with section 402 or 402a.

Inasmuch as the separability rule is applicable to cases involving the determination of “value” under sections 402 and 402a of the Tariff Act of 1930, as amended by the Customs Simplification Act of 1956, ch. 887, Pub.L. No. 927, 70 Stat. 943, we agree with the Customs Court that the sole question to be decided is the propriety of including the disputed separable amount of $49,972 in the appraised value. On this point appelleeimporter had the burden of proof. It elected to stand on its contention that no part of the Canadian-made tooling costs is to be taken into account in determining value. We hold that the statute requires to the contrary. Accordingly, the appraiser’s determination must stand.

In view of the foregoing, the judgment of the Customs Court is reversed.

      . At oral hearing on the appeal it was brought out that “pro rata share” means the total cost of the tooling divided by the number of assemblies undergoing the processing in Canada.

      . Par. 1615(g) of the Tariff Act of 1930, ch. 497, Pub.L. No. 361, 46 Stat. 674, as amended by the Customs Administrative Act of 1938, ch. 679, Pub.L. No. 721, 52 Stat. 1092.

      . “Processing” means a process of manufacture. Intelex Systems v. United States, 59 CCPA 138, C.A.D. 1055, 460 F.2d 1083 (1972).

      . (1) Collectors shall require at the time of entry a deposit of estimated duties based upon the full cost or fair market value, as the case may be, of the repairs, alterations, or processing. The cost or fair market value, as the case may be, of the repairs, alterations, or processing outside the United States which is to be set forth in the invoice and entry papers as the basis for the assessment of duty under item 806.20 or 806.30, shall be limited to the cost or value of the repairs, alterations, or processing actually performed abroad and shall not include any of the expenses incurred in this country, whether by way of engineering costs, preparation of plans or specifications, furnishing of tools or equipment for doing the repairs, alterations or processing abroad or otherwise.

      . Basic authority to issue appropriate regulations was granted the Secretary of the Treasury by section 624 of the Tariff Act of 1930, 46 Stat. 759 (19 U.S.C. § 1624). See also 19 U.S.C. § 66.

      . At oral hearing, counsel for appellee made it clear that “not one penny” relating to the Canadian-made tooling is included in its contended-for value of $235,580 ($285,552 minus the disputed amount of $49,972).

      . This court has often held that reenactment by Congress of a customs law gives rise to a presumption that a judicial interpretation thereof was correct when such interpretation was specifically brought to the attention of Congress. United States v. Olavarria & Co., 37 CCPA 40, C.A.D. 417 (1949); United States v. Colonial Bead Co., 36 CCPA 78, C.A.D. 401 (1949); United States v. Water Treatment Co. of America, 33 CCPA 174, C.A.D. 332 (1946).

      . We note that the presumption for which appellee contends is usually stated in terms of interpretation by courts of last resort. 82 C.J.S. Statutes § 370b(l); 73 Am.Jur.2d, Statutes § 322. See New York v. Saper, 336 U.S. 328, 69 S.Ct. 554, 93 L.Ed. 710 (1949). No such hierarchical distinction is present in the case of regulations promulgated by the Treasury Department.


source: Caselaw Access Project

author: RICH, Judge.

license: Public Domain

text:
    RACHELLE LABORATORIES, INC., Appellant, v. The UNITED STATES, Appellee.
    Customs Appeal No. 5537.
    United States Court of Customs and Patent Appeals.
    Feb. 20, 1975.

      Edward N. Glad, Los Angeles, Cal. (Glad, Tuttle & White, Los Angeles, Cal.), atty. of record, for appellant.
    Carla A. Hills, Asst. Atty. Gen., Andrew P. Vance, Chief, Customs Section, Joseph I. Liebman, New York City, for the United States.
    Before MARKEY, Chief Judge, and RICH, BALDWIN, LANE and MILLER, Associate Judges.
   RICH, Judge.

This appeal is from the judgment of the United States Customs Court, 70 Cust.Ct. 114, C.D. 4416, 358 F.Supp. 1292 (1973), dismissing, after a full trial, these consolidated reappraisement actions for failure of proof. We affirm.

On four occasions between July 28 and September 5, 1968, appellant imported from West Germany the merchandise at bar, described in the complaint as Dthreo-para-nitrophenyl-2-amino-propane 1,3 diol, which was stipulated to be used solely as an intermediate in the manufacture of chloramphenicol, an antibiotic, also known by the proprietary name Chloromycetin. The imported merchandise is known in the trade as “levo base” and will be so referred to herein. When entered, it was advisorily classified under Item 407.85 TSUS, and charged with duty thereunder in accordance with an appraisal on the basis of American selling price, 19 U.S.C. § 1401a(e), pursuant to Part 1, headnote 4 of Schedule 4. The merchandise is not on the Final List of the Secretary of the Treasury, 93 Treas.Dec. 14, T.D. 54521, thus American selling price (alternative), 19 U.S.C. § 1402(g), is not applicable.

The merchandise was appraised at $150.00 per kilogram, net packed. Appellant appealed to the Customs Court for reappraisement, alleging that there was neither an American selling price nor a United States value, 19 U.S.C. § 1401a(c), for the merchandise and that it was entitled to have the merchandise appraised on the basis of export value, 19 U.S.C. § 1401a(b), at $25.00 per kilogram, net packed. Further factual details appear in the opinion of the trial court. All the evidence relevant to our decision is set forth below.

Customs Court Proceedings

Although appellant and the Customs, Court considered the sole issue to be whether appellant’s evidence proved a prima facie case, the precise nature of the Customs Court’s judgment (as distinguished from its opinion), from which this appeal is taken under 28- U.S.C. § 2601, is not entirely clear to us from the record.

At the close of appellant’s case-in-chief the following colloquy ensued:

Mr. Liebman [Government counsel]: Your Honor, at this point the Government has a motion to make, and that is pursuant to rule 8.3(c) of the rules of this court for a dismissal of this case on the grounds that on the facts and the law the plaintiff has failed to prove a prima facie case.
Us * * * *
Therefore, I submit on the law and the facts in this case the judgment should be entered for the Government dismissing the appeals for reappraisement in this case.
Judge Richardson: The court will reserve ruling on this motion until all the evidence is in.
Mr. Liebman: Your Honor, it’s 11:30 at this point. I don’t think that if I do present any witnesses that we will run beyond the luncheon recess. Therefore, I would like a short recess if your Honor will permit.
Judge Richardson: All right, I will recess this trial.
[A brief recess was taken.]
Mr. Liebman: Your Honor, can I ask for a further clarification of your ruling on my motion to dismiss, whether that was a ruling on the burden of going forward in this case?
Judge Richardson: I said I would postpone the ruling on the dismissal until the other evidence was in. In other words, I am not granting it; it will not be granted at this time.

It would appear that this ruling was not in accordance with the rule of the Customs Court under which' the motion of defendant was made, which is as follows:

Rule 8.3 Dismissal of Actions.
sis * * * * *
(c) Insufficiency of Evidence: After the plaintiff has completed the presentation of his evidence, the defendant may, by motion, ask for a dismissal of the action on the ground that on the facts and the law plaintiff has failed to prove a prima facie case. The court shall immediately thereafter rule on the motion before permitting any further proceedings. If the court renders judgment on the merits against the plaintiff, the judgment shall be supported by either a statement of findings of fact and conclusions of law or an opinion stating the reasons and facts upon which the judgment is based. The motion shall be without prejudice to the right of the defendant to present evidence if the motion is denied. [Emphasis ours.]

The trial proceeded and the Government put in its case, at the close of which the record shows:

Mr. Liebman: Your Honor, I have no further witnesses. The defense does rest. However, I would like to renew my motion made at the conclusion of the plaintiff’s case.
Mr. Glad [appellant’s counsel]: I would like to call a rebuttal witness, your Honor.
Judge Richardson: All right.
Mr. Glad: Mr. Koris
Mr. Liebman: Have you ruled on my motion or reserved ruling?
Judge Richardson: I am not going to rule on the motion until you file your briefs. In other words, if you want me to rule on it it’s denied.

In its opinion the court did not address the Government’s evidence and concluded:

The court fully agrees with defendant that plaintiff has not made out a prima facie case. Defendant’s motion to dismiss is granted, and the consolidated actions herein are dismissed for failure of proof.

Judgment will be entered herein accordingly. The formal judgment, however, does not refer to the Government’s motion, saying only:

This case having been duly submitted for decision and this Court, after due deliberation, having rendered a decision herein; now, in conformity with said decision,
IT IS HEREBY ORDERED, ADJUDGED, and DECREED that the consolidated actions herein be, and the same hereby are, dismissed for failure of proof.

As we have pointed out before, an opinion is not a decision, but is only the court’s statement of the reasons underlying its decision.

According to its own Rule 8.3(c) the court should have ruled conclusively on the Government’s motion when it was timely made at the close of appellant’s case-in-chief, “before permitting any further proceedings.” Rule 8.3(c), unlike analogous Federal Rule of Civil Procedure 41(b), does not provide that the court may decline to render judgment until all evidence has been received; the command of Rule 8.3(e) is clearly that a motion to dismiss for plaintiff’s failure to prove a prima facie case must be decided when made, at the close of plaintiff’s case. The judgment was entered, however, after a full hearing, and it is that judgment, dismissing appellant’s actions “for failure of proof,” which we are reviewing here.

OPINION

Since this case was tried after October 1, 1970, we have appellate jurisdiction to review questions of both fact and law in this reappraisement case. 28 U.S.C. § 1541, as amended by Pub.L. 91 — 271, Title I, § 102, 84 Stat. 274 (1970).

In view of its holding that appellant had failed to present a prima facie case negating the existence of an American selling price, the Customs Court declined to make findings as to appellant’s export value claim. Appellant presented evidence on export value at trial and the parties have briefed before us the sufficiency of that evidence. This evidence is entirely documentary, so there is no question of credibility of witnesses which the trial court is peculiarly situated to resolve. Assuming arguendo, that appellant negated both an American selling price and a United States value for the levo base during the period of importation, we see no need to remand this case to the Customs Court for its views on export value. We hold that appellant’s evidence of export value did not fulfill the second part of its dual burden of proof and affirm the judgment of the Customs Court on that ground.

The sole evidence of export value appears in appellant’s Exhibit 2, which is the affidavit of the foreign sales manager of Boehringer Mannheim GMBH, appellant’s German supplier of levo base. It states in material part:

That after the expiration of relevant patents Boehringer Mannheim GMBH has freely offered [levo base] to any one who would care to buy for export to the United States. However, to the best of my knowledge there is no other party in the United States interested in or engaged in the purchase or processing of [levo base] except Rachelle Laboratories.
That at all times the price at which my firm is freely offering the [levo base] in question is the same as that offered and sold to Rachelle Laboratories, provided the company buying is of the same importance and trustworthiness as Rachelle Laboratories.
We supplied Rachelle Laboratories the [levo base] on the basis of F.O.B. Frankfurt/Main Airport at DM 92,-/kg net, packed, which was equivalent to approximately US$ 25,-/kg at the time of selling.

The Government criticizes the sufficiency of the affidavit because of the phrase “provided the company is of the same importance and trustworthiness as Rachelle Laboratories.” It says it is evidence that Boehringer Mannheim GMBH did not freely sell levo base to those desiring to purchase it, contrary to the requirements of 19 U.S.C. § 1401a(b) for export value. Appellant had the affirmative burden of establishing that levo base was freely sold or offered for sale at the price proposed by it as the export value. Inter-Maritime Forwarding Co. v. United States, 454 F.2d 1197, 1200, 88-89, C.A.D. 1044, 59 CCPA 84, (1972); see 19 U.S.C. § 1401a(f)(l). The affidavit, quoted supra, does not affirmatively show that the levo base was freely sold. Construed in the light most favorable to appellant, the affidavit shows nothing more than the willingness of Boehringer Mannheim GMBH to sell to buyers whom it deems suitable recipients for its levo base. The affidavit on its face limits the class of customers to which Boehringer Mannheim GMBH will sell levo base to those of repute greater than or equal to that of appellant. The restricted nature of the offer to sell described in the affidavit precludes the use of the price offered as the export value. Inter-Maritime Forwarding Co., supra.

Appellant has not submitted the minimum of evidence which shows that all those who care to buy levo base in the usual wholesale quantities and in the ordinary course of trade have an equal opportunity to buy the usual wholesale quantities in the ordinary course of trade from Boehringer Mannheim GMBH under equal terms and conditions. Rico, Inc. v. United States, 44 Cust.Ct. 788, 793, A.R.D. 121 (1960), affirmed, 48 CCPA 110, C.A.D. 773 (1961). The judgment dismissing this action for appellant’s failure to sustain its burden of proof was correct.

      . Schedule 4. Chemicals And Related Products
      Part 1. Benzenoid Chemicals And Products Part 1 headnotes:

      ******
      4. The ad valorem rates provided in this part shall be based upon the American selling price, * * *. If there is no similar competitive article manufactured or produced in the United States then the ad valorem rate shall be based upon the United States value * * *.

        Subpart C. Finished Organic Chemical

      ******
      Products suitable for medicinal use, and drugs:
      Obtained, derived, or manufactured in whole or in part from any product provided for in subpart A [organic chemical crudes] or B [industrial organic chemicals] of this part:
      ******
      Drugs:
      407.85 Other.

      . Rule 41. Dismissal of Actions

      * # * * * *
      (b) Involuntary Dismissal: Effect Thereof. For failure of the plaintiff to prosecute or to comply with these rules or any order of court, a defendant may move for dismissal of an action or of any claim against him. After the plaintiff, in an action tried by the court without a jury, has completed the presentation of his evidence, the defendant, without waiving his right to offer evidence in the event the motion is not granted, may move for a dismissal on the ground that upon the facts and the law the plaintiff has shown no right to relief. The court as trier of the facts may then determine them and render judgment against the plaintiff or may decline to render any judgment until the close of all the evidence. If the court renders judgment on the merits against the plaintiff, the court shall make findings as provided in Rule 52(a). Unless the court in its order for dismissal otherwise specifies, a dismissal under this subdivision and any dismissal not provided for in this rule, other than a dismissal for lack of jurisdiction, for improper venue, or for failure to join a party under Rule 19, operates as an adjudication upon the merits. [Emphasis ours.]

      . Section 402(b), Tariff Act of 1930, 19 U.S.C. § 1401a(b):
      (b) Export value. — For the purposes of this section, the export value of imported merchandise shall be the price, at the time of exportation to the United States of the merchandise undergoing appraisement, at which such or similar merchandise is freely sold or, in the absence of sales, offered for sale in the principal markets of the country of exportation, in the usual wholesale quantities and in the ordinary course of trade, for exportation to the United States, plus, when not included in such price, the cost of all containers and coverings of whatever nature and all other expenses incidental to placing the merchandise in condition, packed ready for shipment to the United States. [Emphasis ours.]


author: BALDWIN, Judge.

text:
    Application of Robert J. SLOCOMBE.
    Patent Appeal No. 74-603.
    United States Court of Customs and Patent Appeals.
    Feb. 20, 1975.
    Robert W. Furlong, Fish & Richardson, Boston, Mass., attorney of record for appellant. Ernest K. Bean, Assts. Gen. Counsel, Akron, Ohio, of counsel.
    Joseph F. Nakamura, Washington, D. C., for the Commissioner of Patents. Fred E. McKelvey, Washington, D. C., of counsel.
    Before MARKEY, Chief Judge, RICH, BALDWIN, LANE, Associate Judges, and PHILIP NICHOLS, Associate Judge, United States Court of Claims.
   BALDWIN, Judge.

This is an appeal from the decision of the Patent Office Board of Appeals affirming the examiner’s rejection of claims 27 and 28 of appellant’s application entitled “Low Temperature Synthetic Rubber and Method of Making Same.” We reverse.

The Invention

Appellant claims a method or process for producing a vulcanizable polybutadiene disclosed as having improved flexibility at low- temperatures. The claims on appeal are as follows:

27. A method for polymerizing 1,3-butadiene which comprises contacting said 1,3-butadiene with a catalyst consisting essentially of (a) a compound corresponding to the formula R3AI, wherein R is alkyl radical having 2 to 4 carbon atoms and (b) titanium tetraiodide.
28. A process for producing rubbery vulcanizable polybutadiene which is characterized by improved flexibility at low temperatures, which process comprises polymerizing butadiene-1,3 in an inert hydrocarbon medium in the presence of a catalyst resulting from the interaction in said medium of (a) a trialkyl aluminum of the formula R3AI wherein R is an alkyl radical containing 2 to 8 carbon atoms and (b) titanium tetraiodide, the mol ratio of aluminum to titanium being from 0.3 to 1 to 15 to 1.

Prosecution History

Appellant’s application, as originally filed on April 18, 1955, contained 13 claims directed toward methods of making polybutadiene, polyisoprene copolymers of butadiene and isoprene and the products polybutadiene and polyisoprene prepared by polymerizing their respective monomers in the presence of specific catalysts. The catalysts were broadly recited as the interaction product of (1) an aluminum compound of the formula R2AIX, wherein R is an alkyl, cycloalkyl, or acyl radical, and, X a hydrogen, halogen, alkyl, cycloalkyl, or aryl radial, with (2) a metal halide selected from the group consisting of the chlorides, bromides and iodides of titanium and zirconium.

On October 9, 1961, two interferences, Nos. 92,258 and 92,259 were declared; appellant being senior party in the former and junior party in the latter. The counts were process claims involving, respectively, polymerization of butadiene with the interaction product of an aluminum trialkyl and titanium tetrachloride, and polymerization of isoprene with the interaction product from the same reactants, and also requiring, in each case, specific and different molar ratios of titanium to aluminum.

Priority was awarded against appellant in both interferences. The winning party in Interference No. 92,259 obtained U.S. Patent No. 3,114,743 (Horne) while the count of Interference No. 92,258 became claim 5 of U.S. Patent No. 3,657,-209 (Carlson et al.); both of which will be further discussed, infra.

Subsequent to a decision by the Patent Office Board of Appeals on April 8, 1964, holding that appellant’s specification supported process claims directed to polymerization of butadiene and employing as a catalyst the interaction products of AIR3 and TÍI4, wherein R is an alkyl radical containing 2 to 8 carbon atoms, an interference was declared with instant claim 27 as the count. Appellant was awarded priority as to claim 27. The examiner rejected both claims 27 and 28 on prior art.

References

Horne 8,114,743 December 17, 1963 (filed December 2,1954)

Robinson et al. 3,118,864 January 21, 1964 (filed November 22, 1954)

Crawford et al. 215,043 (Australia) November 1, 1956

Stewart et al. 627,741 (Canada) September 19, 1961

Short et al., Rubber Chemistry and Technology, Vol. 30 (1957), pages 1118-1141.

Short et al., Rubber Chemistry and Technology, Vol. 32 (1959), pages 614-627.

Moyer et al., Journal of Polymer Science, Part A, Vol. 3 (1965), pages 217-229.

Additional prior art consists of claim 5 of U.S. Patent No. 3,657,209 (Carlson et al.), lost by appellant in Interference No. 92,258. Claim 5 of Carlson et al. is as follows:

The method which comprises polymerizing a monomeric material consisting essentially of monomeric butadiene-1,3 in an inert liquid hydrocarbon medium in the presence of a polymerization catalyst prepared by mixing (a) titanium tetrachloride with (b) a trialkyl aluminum compound, the proportions of (a) and (b) being such as to provide a molar ratio of titanium to aluminum of about 1.5 to 1.0 to 3.0 to 1.0.

U.S. Patent No. 3,114,743 (hereinafter Horne) discloses the preparation of polyisoprene by the polymerization of the monomer isoprene. The catalyst employed is the reaction product of equimolar proportions of (1) a compound- containing a heavy metal occurring in the 4th to 6th positions of the long periods of the periodic table and (2) an organoaluminum compound. Viewed in a light most favorable to the Patent Office, the catalyst employed by Horne is the reaction product of a titanium halide, the chloride being most preferred, and an aluminum trialkyl.

U.S. Patent No. 3,118,864 (hereinafter Robinson et al.) discloses the preparation of homopolymers and copolymers of conjugated alkadienes such as butadiene, isoprene and chloroprene. The catalyst employed in carrying out the polymerization is the reaction product of titanium tetrachloride and a lithium-aluminum tetraalkyl.

The Rejection

The board affirmed the examiner’s rejection of claims 27 and 28 as being unpatentable (35 U.S.C. § 103) over Horne in view of Robinson et al. and over the count of Interference No. 92,258 (Claim 5, of Carlson et al.), in view of Robinson et al. or Horne. It was the board’s position that

Robinson et al. disclose the similarity of butadiene and .its homologue, isoprene, in a polymerization closely related to that herein claimed. In view of this disclosure, we agree with the Examiner that it would be obvious to substitute butadiene for the isoprene in the process of Horne, thus to anticipate appellant’s claimed process, noting particularly the teaching in Horne (sentence bridging columns 2 and 3) of iodides as substitutes for chloridés of metals such as titanium in the catalyst combination.

The board found it unnecessary to specifically commit upon the rejection of claims 27 and 28 as being unpatentable (35 U.S.C. § 103) over claim 5 of Carlson et al. in view of Robinson et al. or Horne. We thus look to the examiner’s answer to find the specifics of this rejection. It was the examiner’s position that

[t]he count ... is directed to polymerizing butadiene with a Ti CI4 -AIR3 (R is alkyl) catalyst using a Ti/Al ratio of 1.5/1 to 3/1 (Al/Ti of 0.67/1 to 0.33/1). Since Horne teaches the equivalence of the Ti I4-AIR3 and Ti CI4-AIR3 catalysts when polymerizing another conjugated diolefin, i. e., isoprene, a homolog of butadiene, it would be obvious to use Ti I4 in place of Ti CI4 to polymerize butadiene as recited by the count. From the disclosure of Robinson et al, one would expect either butadiene or isoprene to form solid useful polymers using a titanium tetrahalide-AlR3 catalysts in view of its generic teaching of organometallic reducing agents.

In response, to these rejections, appellant submitted to the Patent Office three Rules 132 affidavits. The first, by Minchak, reports the Gehman Freeze Point of various polybutadienes and polyisoprenes, made in accordance with the prior art and the claimed process. Although the affidavit showed superior low temperature properties for butadienes prepared according to the claimed process as compared to polybutadienes of Robinson et al. or the count of Interfer-' ence No. 92,258 or the polyisoprene of Horne, the examiner refused to consider the results on two grounds:

[Tjhere is no basis in this specification for any differences of any kind including low temperature properties between polybutadienes or polyisoprenes produced with a TÍI4-AIR3 catalyst as compared to a TÍCI4-AIR3 catalyst. This specification, as far as the properties of the polybutadienes and polyisoprenes are concerned, teaches the equivalence of the catalysts formed from titanuem [sic] tetrahalides and a wide variety of organoaluminum compounds .
With the above in mind it is also believed that the affidavit provides insufficient evidence that the low temperature properties of polybutadienes produced within the bounds of claims 27 and 28 will inherently have better low temperature properties than those of Robinson et al. The specification does not teach that they do and in view of the difference produced between the two titanium tetrahalides, there is no reasons [sic] to presume they will. Moreover, it is a fact that the structure of the polybutadiene produced with a TÍI4-AIR3 catalyst in dependent upon the Al/Ti ratio, the catalyst concentration and the solvent as shown by Moyer et al. and Stewart et al. The two Short et al. articles show how the properties of the polybutadienes are affected by its structure. The Crawford et al. reference also shows how structure and properties are affected by different Ziegler-type catalysts.

The second affidavit, by Macey, indicates that the Gehman Low Temperature Torsion Test is a measure of the potential use of a rubber at low temperatures, such as might be found in arctic regions. Macey further expressed his opinion that a difference on the order of as little as 10 °C in the Gehman temperature has a pronounced influence on the practical application of a rubber.

The third affidavit, again by Minchak, was submitted to respond to numerous criticisms raised by the examiner with regard to the first Minchak affidavit. It would serve no purpose to discuss this affidavit in detail since the examiner found it convincing and withdrew his objection which was that Minchak’s prior affidavit failed to accurately reproduce examples 6 and 7 of Robinson et al. for comparison with appellant’s polybutadiene.

Opinion

At the outset, we find that the three affidavits submitted under Rule 132, and particularly the first Minchak affidavit, are commensurate in scope with the claims. In an attempt to demonstrate otherwise, the examiner cited Canadian Patent No. 627,741 (Stewart et al.) and the Moyer et al. article to show that the cis-1,4 content of polybutadiene, made by employing tri-isobutyl aluminum/titanium tetraiodide as the catalyst, varies with the mole ratio of aluminum to titanium. However, as appellant points out, Stewart et al. shows no cis-1,4 content below 40% while Moyer et al. shows no cis-1,4 content below about 50% for any titanium tetraiodide catalyst. This is particularly illuminating,when one notes that the Short et al. article (Vol. 30) shows that the Gehman Freeze Point never rises above -85 °C until the cis-1,4 content drops to 36%.

The examiner further cited Australian Patent Specification No. 215,043 (Crawford et al.) to show that the ratio of aluminum to titanium affects the structure of polybutadienes. However, Crawford et al. employs only trialkyl aluminum/titanium tetrachloride catalysts and thus has no bearing upon the affidavit and claims directed to the use of trialkyl aluminum/titanium tetraiodide catalysts.

In a further attempt to demonstrate that the first Minchak affidavit was not commensurate in scope with the claims, the Moyer et al. article was again pointed to by the examiner for its alleged showing that the catalyst to solvent ratio has an effect upon the structure of polybutadiene made from trialkyl aluminum/titanium tetraiodide catalysts. However, as appellant correctly indicated, Moyer et al. describes the effect of variations in the catalyst to monomer ratio; while the lowest cis-1,4 content reported by Moyer et al. for polymers made using titanium tetraiodide in the catalyst is about 55%.

We, therefore, hold that neither the Short, et al. or Moyer et al. articles, Stewart et al., or Crawford et al. support the examiner’s position that the affidavit evidence is not commensurate in scope with the claims on appeal. We thus find it unnecessary to comment upon the availability of these references which have effective dates subsequent to the filing date of appellant’s application.

Both the examiner and board gave the affidavit evidence little, if any, weight. As stated by the board:

Appellant’s arguments and data attempting to distinguish between the iodides and the chlorides are completely at variance with appellant’s specification, which does not support such distinction. It also supports no distinction between butadiene and isoprene. The Rule 132 affidavits, therefore, find inadequate support and are not persuasive. Directly in point is In re Davies et al., (CCPA), 475 F.2d 667.

We do not find that the Davies case supports the board’s position. In Davies, an attempt was made to demonstrate the unobviousness of claims directed to a composition, a major proportion of which was polystyrene further containing a butadiene/styrene copolymer as a toughening agent. In the specification, there was no disclosure that the claimed invention possessed the unexpected properties of improved gloss, transparency and processability. The specification merely pointed out that the toughened polystyrene had improved mechanical properties such as impact strength and the like. Thus, in Davies, we agreed that the examiner was justified in his refusal to consider affidavits showing improved gloss, etc. for the reason that the properties were not disclosed in the application.

The instant specification, on the other hand, is replete with statements to the effect that the entire thrust of appellant’s invention is the production of certain polymers which possess superior low temperature properties, such as improved flexibility at very low temperatures. The first Minchak affidavit shows just such superior low temperature properties possessed by polybutadienes prepared according to the claimed process. More specifically, the affidavit compares the Gehman Freeze Point Temperatures for a number of polybutadienes prepared according to the claims on appeal with (1) a polymer prepared according to the count of Interference No. 92 — 258; (2) examples 6 and 7 of Robinson et al.; and (3) the teachings of Horne. We hold that the specification supports such an affidavit. There is no requirement that superiority over prior art be disclosed in the application; it is enough if the basic property or utility in which the advantage resides is disclosed. In re Lorenz, 333 F.2d 908, 51 CCPA 1522 (1964).

We recognize that appellant’s application previously contained claims directed toward methods of making polyisoprene, polybutadiene and butadiene-isoprene copolymers, employing as a catalyst, the product derived by the interaction of (1) an aluminum compound of the general formula R2AIX, wherein R is an alkyl, cycloalkyl or aryl radical and X a hydrogen, a halogen, dr an alkyl, cycloalkyl or aryl radical, with (2) a metal halide selected from the group consisting of the chlorides, bromides and iodides of titanium and zirconium. We further recognize that such claims would be clearly anticipated by the art of record, particularly by the count of Interference No. 92,258 and the Horne patent. However, appellant’s affidavit evidence may not be disregarded simply because of the broad scope of the claims in the original application. In re Saunders, 444 F.2d 599, 58 CCPA 1316 (1971).

The specification discloses that butadiene is the preferred monomer useful in practicing appellant’s invention. Although the specification discloses no particular preference between catalysts containing titanium tetraiodide and titanium tetrachloride, this should not become the basis for disregarding affidavit evidence demonstrating the superiority of the resulting claimed process employing titanium tetraiodide in a catalyst over processes of the prior art which employ titanium tetrachloride. As we stated in In re Ruff, 256 F.2d 590, 596, 45 CCPA 1037, 1047 (1958):

[Tjhere is a basic difference between (a) a showing by an applicant for patent of what the art knows to be equivalents or what means taken from the art he can use indiscriminately without affecting his invention in carrying it out, and (b), a showing that he has found, as a part of his discovery or inventive process, that certain things may be used to achieve the same result. These findings are his property and he does not lose all of them just because of his showing when it turns out that others have earlier discovered one or more of them.

Although the board stated that In re Ruff, supra, did not apply to the rejection involved herein “since the Examiner is not relying upon an equivalence set forth only in appellant’s specification but upon the specific teachings of Robinson et al. and Horne,” both the examiner and the board refused to give weight to the affidavits submitted by appellant because “data attempting to distinguish between the iodides and the chlorides are completely at variance with appellant’s specification, which does not support such distinction.” We find no substantive difference between this position and that found to have been erroneous in In re Ruff, supra.

Appellant is correct in his assertion that catalytic effects are a particularly unpredictable aspect of the art of chemistry. For example, see Corona Co. v. Dovan Corp., 276 U.S. 358, 48 S.Ct. 380, 72 L.Ed. 610 (1928); In re Doumani, 281 F.2d 215, 47 CCPA 1120 (1960). But we are of the opinion that a prima facie case of obviousness has been established by the Patent Office. However, appellant has submitted credible affidavit evidence showing unexpected properties possessed by polymers prepared according to his now claimed invention. This evidence can be employed to rebut the Patent Office’s prima facie case. In re Papesch, 315 F.2d 381, 50 CCPA 1084 (1963).

After a careful review of all of the art of record including the evidence submitted by appellant, we are of the view that the prima facie case of obviousness has been successfully rebutted. Accordingly, the decision of the board is reversed.

Reversed.

      . Serial No. 502,189, filed April 18, 1955.

      . The board further stated that appellant lacked support for claims 23 and 24 which possessed the limitations that the polybutadiene products contain at least 85% of the cis-1,4 polymer and that 1 to 15 moles of trialkylaluminum are employed for each mole of titanium tetraiodide. This portion of the board’s opinion is not considered relevant to the issues presented in the instant appeal to this court.

      . Interference No. 94,426. See Smith v. Horne, 59 CCPA 712, 450 F.2d 1401 (1971).

      . The following represents a summary of data set forth in the Minchak affidavit:
      Polymer Catalyst Al/Ti Gehman Molar Freeze _Ratio Point (°C)
      Prior Art Polymers Polybutadiene LiAKC^/TICU - —25, -39 (Robinson et al.)
      Polyisoprene AKCsig/TiCU - -60.5 (Horne)
      Polybutadiene - - -74 (Emulsion)
      Polybutadiene AI(C2)3/TiCl4 0.67:1 -79, -78.5 (Appellant's Example & Count of Interference No. 92,258)
      Polymers Made by Claimed Method
      12:1 -91 Polybutadiene (Run 44A) AI(C2)3/TiI4
      6:1 -92 Polybutadiene (Run 44B) do
      3:1 -91 Polybutadiene (Run 440 do
      1.5:1 -90 Polybutadiene (Run 44D) do
      3:1 -88 Polybutadiene (Run 46A) AI(C4)3/Tll4
      3.2:1 -86 Polybutadiene (Run 48A) do
      0.3:1 -86.5 Polybutadiene (Run 62A) AI(C2)3/Tll4
      15:1 -88 Polybutadiene do


author: FAIRCHILD, Chief Judge.

text:
    UNITED STATES of America, Plaintiff-Appellee, v. Rafael LOZANO, Defendant-Appellant.
    No. 74-1053.
    United States Court of Appeals, Seventh Circuit.
    Argued Sept. 23, 1974.
    Decided Feb. 18, 1975.
    Rehearing Denied April 7, 1975.

      Jose R. Vazquez, Ralph M. Schelly, Chicago, 111., for defendant-appellant.
    James R. Thompson, U. S. Atty., Gary L. Starkman and Donald G. Newman,

      Asst. U. S. Attys., Chicago, 111., for plaintiff-appellee.
    Before FAIRCHILD, Chief Judge, and HASTIE  and CASTLE, Senior Circuit Judges.

       Senior Circuit Judge William H. Hastie of the United States Court of Appeals for the Third Circuit is sitting by designation.

   FAIRCHILD, Chief Judge.

Three defendants, appellant Lozano, Goulart, and Leyva, were indicted for offenses arising out of an alleged scheme to arrange a marriage in order fraudulently to obtain permanent resident alien status for Priciliano Pantoja, a Mexican national. Appellant was convicted on Counts 1, 2, 3, 4 and 6, and sentenced to 18 months imprisonment on Count 1 and concurrent terms of probation on other counts.

CONSPIRACY COUNT

Count 1 charged the three defendants with conspiring with Carmen Colon (Irma Otero), Pantoja and others to commit offenses: (1) knowingly and willfully concealing and covering up by trick, scheme, and device a material fact in a matter within the jurisdiction of the Immigration and Naturalization Service (18 U.S.C. § 1001); (2) knowingly making under oath a false statement with respect to a material fact in a document required by immigration laws and regulations prescribed thereunder (18 U.S.C. § 1546); (3) knowingly presenting such document containing a false statement (18 U.S.C. § 1546); and (4) knowingly obtaining, accepting, receiving, possessing and using an Immigrant Visa, knowing the same to have been procured by means of false claims, false statements, and by fraud (18 U.S.C. § 1546).

It was alleged that as part of the conspiracy, defendants would arrange for Pantoja to participate in a marriage ceremony with Carmen Colon; that the parties would never live together and the marriage would not be consummated; that a petition would be executed, based on the ceremony, and filed so that if approved, Pantoja would obtain an immigrant visa and re-enter and reside in the United States as a permanent resident alien; and that he and Carmen Colon would-be divorced.

Considering the evidence in the light most favorable to supporting the verdict, it demonstrates that Pantoja, an alien illegally here, was a boarder at Lozano’s. In the fall of 1970, Pantoja and Colon (though the latter used other names) went through two Illinois marriage ceremonies, the second being necessary because of a problem about the name used by Colon the first time. The marriage was not consummated, the parties did not live together, Colon was paid, and there was ample evidence from which the jury could find that Lozano put Pantoja in touch with Goulart; that both were active in arranging the marriage; that all knew the purpose was only to obtain a change in Pantoja’s immigration status; and that Lozano knew they could be jailed if the scheme became known.

On March 4, 1971, Colon signed, swore to, and filed a “Petition to classify status of alien relative for issuance of immigrant visa,” (Form 1-130). By filling in responses in various blanks, she represented that Pantoja was married, and was her husband; that the date and place of her present marriage was November 23, 1970, Chicago, Illinois; and that she and her spouse resided together at 505 South Sixth Avenue, Maywood, Illinois, from November 23, 1970 to the present. The address was Lozano’s, and she indicated in other blanks that it was her residence as well as Pantoja’s.

The petition was approved. Pantoja went to Mexico, obtained his visa and re-entered the United States.

Appellant argues that under Illinois law the marriage, although its purpose was limited to obtaining immigration benefits for Pantoja, was not void on that account. The claim appears to be correct. DeVries v. DeVries, 195 Ill. App. 4 (1915); Burrell v. Burrell, 12 Ill. App.2d 471, 139 N.E.2d 850 (1957); Bratkovich v. Bratkovich, 34 Ill.App.2d 122, 126, 180 N.E.2d 716 (1962).

We shall reserve for later our consideration of whether the legal status of the marriage affects the substantive false statement and concealment counts. The objects of the conspiracy charged in Count 1 included not only the offense of making and using false statements, and concealment of a material fact, but also of obtaining and using a visa, knowing it to have been procured by fraud. The Supreme Court sustained a conviction on a conspiracy count essentially indistinguishable and held that the validity of the similarly limited marriages in that case was immaterial. Lutwak v. United States, 344 U.S. 604, 611, 73 S.Ct. 481, 97 L.Ed. 593 (1953). The Court considered that in making certain immigration benefits depend on marriage, Congress must have intended a relationship not limited as in the case at bar. The Court said:

“The common understanding of a marriage, which Congress must have had in mind when it made provision for ‘alien spouses’ in the War Brides Act, is that the two parties have undertaken to establish a life together and assume certain duties and obligations. Such was not the case here, or so the jury might reasonably have found. Thus, when one of the aliens stated that he was married, and omitted to explain the true nature of his marital relationship, his statement did, and was intended to, carry with it implications of a state of facts which were not in fact true.” pp. 611-612, 73 S.Ct. p. 486.

Conviction on a similar conspiracy count (accompanied by a count charging concealment) was upheld in Johl v. United States, 370 F.2d 174 (9th Cir. 1966).

CONCEALMENT COUNT

Count 2 charged the three defendants with aiding and abetting Colon in filing the petition “concealing from said Agency the fact that she, Carmen Colon, had gone through a marriage ceremony with Prieiliano Pantoja solely for the purpose of obtaining status for the said Prieiliano Pantoja as a permanent resident alien, with the understanding that she and Priciliano Pantoja would not live together as man and wife.” (18 U.S.C. § 1001).

The theory underlying the concealment charge is that the intention of the parties to the marriage to limit their relationship is a material fact under the immigration law. Here there was not only an assertion that Pantoja was the husband of Colon, and an omission of the material fact of the intended limitation, but the concealment was bolstered by the false statement that the parties had been residing together at the same address.

Lutwak establishes that Congress did not intend to grant favored treatment on the basis of marriage to those persons whose marriages were designed with this limited purpose in mind. Thus the intended limitation was a material fact.

Lutwak has been interpreted as relying upon the concealment theory. United States v. Diogo, 320 F.2d 898, 904 (2d Cir. 1963). The Ninth Circuit affirmed a conviction of concealment under § 1001 (as well as conspiracy) in a comparable case. Johl v. United States, 370 F.2d 174 (9th Cir. 1966). Interpreting Lutwak, the court said, at page 177:

“Lutwak clearly means at least this much: The immigration law, in granting advantages to those who have married American citizens, is not talking about ceremony or legality — the taking of those steps which enable a couple lawfully to live together in a marital relationship. It is talking about the marital relationship itself— an actual joining together as husband and wife. Separation is wholly inconsistent with such a relationship. It is a departure from it and a severing of it, and may even, by agreement or court decree, constitute a status distinct from it. Here, and in Lutwak, the very ceremony was accompanied by an agreement of separation. While the parties could lawfully have done so, they never at any time joined together as husband and wife. Here, then, the Government’s concern with purpose did not relate to such troublesome questions as the normality of a marital relationship, but with the parties’ purpose in going through a ceremony where no such relationship was comtemplated or ever begun.”

Appellant Lozano was not present when Colon filled in the petition form, and there is no direct proof that he was aware of the specific information called for or the exact responses she would make. Nevertheless it was easily foreseeable that she would affirmatively inform the INS of the marriage and conceal its limited nature, and such representation and concealment were essential to the success of the plan. Proof of Lozano’s active and intentional participation in the earlier steps of the transaction is a proper base for conviction by reason of aiding and abetting.

FALSE STATEMENT COUNTS

Count 3 charged the three defendants with aiding and abetting Colon in knowingly making, under oath, a false statement in the petition by stating that she was married to Pantoja, knowing that “the purported marriage was a false and fraudulent relationship, entered into for the sole purpose . 27” of affecting Pantoja’s immigrant status. Count 4 charged them with aiding and abetting her in presenting the petition containing such false statement. (18 U.S.C. § 1546). Although it was clearly false to say that the parties had resided together at Lozano’s address since the date of the marriage, the indictment did not make that charge. Thus these counts turn on whether it was a false statement to say that petitioner was married to Pantoja (actually that Pantoja was her “husband”).

In a comparable case the Second Circuit reversed convictions of making false statements (18 U.S.C. §§ 1001 and 1546). United States v. Diogo, 320 F.2d 898, 909 (1963). After discussing the theory of Lutwak, the court concluded that the meaning of the parties’ representation that they were “married” must be the meaning intended by the parties; that it is as reasonable to suppose they made it with the state law in mind as that they made it with the meaning ascribed by Congress for the purpose of the immigration law; and therefore there was a failure of proof of falsity.

Although it seems plausible that in representing that Pantoja was the husband of Colon, Colon was asserting (and Lozano intended that she assert) that there was a marriage in the sense acceptable for immigration purposes, we choose to follow the reasoning of the Second Circuit and to vacate the judgment and sentence on these two counts.

We note that the reluctance in Diogo to find a knowing false statement where the challenged assertion may be literally true, even if false by implication or omission, is consistent with the Supreme Court’s recent construction of the federal perjury statute, 18 U.S.C. § 1621, in Bronston v. United States, 409 U.S. 352, 360, 93 S.Ct. 595, 34 L.Ed.2d 568 (1973) and cases cited therein.

OBSTRUCTION COUNTS

Count 5 charged Lozano and Goulart with willfully endeavoring by means of misrepresentation, intimidation, and threats of force to obstruct, delay and prevent the communication by Pantoja of information relating to criminal violations to authorized investigators. Count 6 charged them with similarly (including by bribery) endeavoring to prevent such communication by Carmen Colon.

On September 5, 1972 Lozano learned that Pantoja had been investigated by INS agents and had made statements to them. There was evidence that Lozano forced or persuaded Pantoja to accompany Goulart and himself to the office of a lawyer and to make a false deposition concerning the marital relationship.

Goulart met separately with Colon and paid her to make a false deposition to the same attorney. There is no direct evidence linking Lozano to Goulart’s efforts with Colon. Only the similarity of the transactions, and an inference therefrom that there was a conspiracy between Lozano and Goulart to bring them both about, could provide a basis for the verdict of guilt as to Lozano on Count 6. We deem the inference too speculative, and the judgment and sentence will be vacated on this count.

FAIR TRIAL CLAIMS

Lozano argues that certain occurrences during his trial were inherently prejudicial. He first asserts that the interpreters who translated Pantoja’s testimony were not properly qualified; were biased in that they were employed by the Immigration and Naturalization Service; and mistranslated an important phrase. We find these claims to be without merit. No objection was made by the defendant to the qualifications or possible bias of any of the interpreters during trial. Mere employment by a governmental agency, absent a showing of actual bias or misconduct, is not sufficient to establish prejudice. Chee v. United States, 449 F.2d 747 (9th Cir. 1971). Similarly, no objection was made to the interpretation of the phrase which defendant now attacks. The record shows the trial judge’s concern that Lozano, who apparently speaks both English and Spanish, be able to hear both the testimony of Pantoja and the interpreter’s translation. Under these circumstances, failure to interpose a timely objection constitutes a waiver of the objection on appeal.

Lozano also argues that the government counsels’ behavior throughout the trial was highly improper and prejudicial. We agree that there were indeed instances of improper conduct. On several occasions, over repeatedly sustained objections, the government persisted in propounding questions concerning unrelated impropriety or illegal activity by Lozano. Such conduct illustrates a disturbing lack of respect for the rights of the accused and of the trial court’s authority, and must be condemned. Assessing prejudice, however, requires a delicate balancing. We have examined the entire record carefully and have determined that an experienced trial judge ably responded to the misconduct, sustaining objections, reprimanding the attorneys and instructing the jury to disregard the questions. Under these circumstances, while certainly expressing disapproval of the improper conduct evidenced, we conclude that Lozano was not thereby deprived of a fair trial.

MERGER OF THE SUBSTANTIVE COUNTS INTO THE CONSPIRACY COUNT

Lozano finally contends that the substantive § 1001 and § 1546 violations charged in Counts 2, 3 and 4 merged into the conspiracy count because all of the offenses charged arose from the same scheme. We disagree. The commission of the substantive offense and a conspiracy to commit it are separate and distinct offenses. Pinkerton v. United States, 328 U.S. 640, 643— 644, 66 S.Ct. 1180, 90 L.Ed. 1489 (1946); United States v. Fellabaum, 408 F.2d 220, 223 (7th Cir. 1969), cert. denied, 396 U.S. 858, 90 S.Ct. 125, 24 L.Ed.2d 109. In the instant case, while the conspiracy and substantive counts were closely related factually, the elements of proof necessary to sustain a conviction for aiding and abetting, on the one hand, and of conspiracy on the other, are substantially different.

The judgment of guilt and the sentences on Counts 3, 4 and 6 are vacated and, upon remand, these counts are to be dismissed. In all other respects the judgment and sentences are affirmed.

      . Actually the marriage was void for a different reason; Colon had previously been married and the marriage had not been dissolved. Because there is nothing to show that Lozano was aware of this fact, we disregard it.


author: JOHN W. PECK, Circuit Judge.

text:
    UNITED STATES of America, Plaintiff-Appellee, v. Paul DUHART, Defendant-Appellant. Paul DUHART, Plaintiff-Appellant, v. UNITED STATES of America, Defendant-Appellee.
    Nos. 74-1869, 74-1870.
    United States Court of Appeals, Sixth Circuit.
    Feb. 11, 1975.
    Certiorari Dismissed June 4, 1975.
    See 95 S.Ct. 2409.
    Cary Rodman Cooper, Toledo, Ohio, for defendant-appellant.
    Frederick M. Coleman, U. S. Atty., Erie D. Chapman, III, Toledo, Ohio, for plaintiff-appellee.
    Before WEICK, PECK and LIVELY, Circuit Judges.
   JOHN W. PECK, Circuit Judge.

Appellant Paul Duhart was jury convicted in 1965 of committing an assault with a deadly weapon while robbing a federally insured savings institution in violation of 18 U.S.C. § 2113(d). A sentence of 25 years was imposed. Appellant failed to perfect a timely direct appeal, but moved, in 1969, for relief under 28 U.S.C. § 2255. The district court denied the motion without an evidentiary hearing. This court reversed and remanded the case for the purpose of determining (1) whether appellant had been deprived of the effective right to appeal, and (2) if certain search and seizure issues raised by appellant had merit. Duhart v. United States, 476 F.2d 597 (6th Cir. 1973).

The district court conducted the required hearing, found that appellant had been denied effective right of appeal, and modified his sentence so as to allow a direct appeal from the 1965 conviction. However, noting that search and seizure questions could be raised on direct appeal and that an appeal is the preferred method of proceeding, the district court declined to pass upon the legality of his arrest and the admissibility of evidence secured as a result thereof. Appellant duly perfected a direct appeal (No. 74-1869), and an appeal from the district court’s refusal to consider the search and seizure issues (No. 74 — 1870).

Appellant’s sole complaint with regard to the district court’s failure to consider the search and seizure issues is that certain testimony adduced at the evidentiary hearing may be needed to fully decide these issues. We conclude, however, that the court acted properly. In the first place, “The normal and customary method of correcting errors of the trial is by appeal.” Sunal v. Large, 332 U.S. 174, 177, 67 S.Ct. 1588, 1590, 91 L.Ed. 1982 (1947). Moreover, “It is well settled in this circuit that a motion to vacate is not a substitute for appeal.” DiPiazza v. United States, 471 F.2d 719, 720 (6th Cir. 1973). Finally, the search and seizure issues are fully presented by the record before us.

Appellant’s principal contention is that the district court unreasonably limited appellant’s cross-examination of a government witness, thereby depriving him of the right of confrontation. The witness, Michael Alums, testified on direct that he had known appellant for about one year, and that he had talked to appellant on May 13, 1965 (the day of the robbery), on May 14, 1965, and again on May 15, 1965. Alums further testified that appellant had confided that he (appellant) had robbed the savings and loan.

During cross-examination of Alums, appellant’s trial counsel was precluded by the trial judge from asking Alums if he had ever been arrested and convicted of crimes in the State of Ohio. Counsel proffered that Alums had been previously convicted of petty larceny, and further that Alums had, in a statement made to the FBI in relation to this case, admitted that he had been arrested and charged with petty larceny, shoplifting, drunk and disorderly conduct, and gambling. Similarly, counsel was not permitted to inquire as to whether Alums was “under the shadow of some suspicion and asking somebody to ease up the pressure” on him.

The government concedes, as we think it must, that a witness may be impeached by questions which show the commission of a felony or a crime involving moral turpitude. United States v. Lloyd, 400 F.2d 414 (6th Cir. 1968); United States v. Johnson, 345 F.2d 457 (6th Cir.), cert. denied, 382 U.S. 836, 86 S.Ct. 83, 15 L.Ed.2d 79 (1965). Likewise, the government recognizes that an accused is entitled to show by cross-examination that the testimony of a witness may be affected by fear or favor growing out of the disposition of pending criminal matters, Alford v. United States, 282 U.S. 687, 51 S.Ct. 218, 75 L.Ed. 624 (1931), or that the witness has a particular motive for testifying. Spaeth v. United States, 232 F.2d 776 (6th Cir. 1956). Indeed, there can be no doubt that the district court improperly limited the cross-examination of Alums. The government urges, however, and we agree, that the error was harmless in view of the fact that the testimony of a critical witness was not involved and because the direct evidence of guilt was overwhelming.

The record shows that the government introduced the testimony of three employees of the victimized institution who were eye-witnesses to the robbery. All three witnesses positively and unequivocally identified the appellant as the man who perpetrated the robbery. They all testified that the robber wore no mask and was clearly visible to them for a considerable period of time. Extensive cross-examination only served to buttress the certainty of the identification evidence.

In addition, the government produced photographic evidence of the robbery which clearly showed the robber placing his hands on the teller’s counter and vaulting over the counter into the area where the money drawers were located. A government expert then testified that the palm and fingerprints taken from the top of the teller’s counter where the robber had placed his hands matched those taken from the defendant following his arrest.

Alums was the last of 13 witnesses introduced by the government. Although his testimony on direct predictably aided the prosecution, defense counsel was able to cast considerable doubt on Alums’ ability to remember the events subsequent to the robbery. Furthermore, counsel succeeded in inducing the witness to contradict much of the testimony given on direct examination.

Appellant cites a number of cases for the proposition that the complete denial of access to an area which is properly the subject of cross-examination is constitutional error of the first magnitude and as such cannot be considered harmless. Davis v. Alaska, 415 U.S. 308, 94 S.Ct. 1105, 39 L.Ed.2d 347 (1974); Smith v. Illinois, 390 U.S. 129, 88 S.Ct. 748, 19 L.Ed.2d 956 (1968); Brookhart v. Janis, 384 U.S. 1, 86 S.Ct. 1245, 16 L.Ed.2d 314 (1966); Alford v. United States, 282 U.S. 687, 51 S.Ct. 218, 75 L.Ed. 624 (1931); United States v. Jackson, 482 F.2d 1167 (10th Cir.), cert. denied, 414 U.S. 1159, 94 S.Ct. 918, 39 L.Ed.2d 111 (1973); United States v. Jorgenson, 451 F.2d 516 (10th Cir. 1971). These cases, with the exception of Alford v. United States, written over 40 years ago, while supportive of appellant’s position, can be distinguished factually.

In Davis, the Supreme Court noted that “[t]he accuracy and truthfulness of [the witness’s] testimony [were] key elements] of the State’s case”. 415 U.S. 317, 94 S.Ct. 1111. The Smith case involved the testimony of a “principal” prosecution witness. 390 U.S. at 131, 88 S.Ct. 748. The constitutional violation in Brookhart arose from the fact that the defendant “was denied the right to cross-examine at all any witness who testified against him.” 384 U.S. at 4, 86 S.Ct. at 1247. In Alford, Jackson and Jorgenson it does not appear whether the witnesses involved were critical, and in addition, both Jackson and Jorgenson relied heavily on Smith v. Illinois, distinguished above.

Appellant has not cited, and we are unable to find, a single case where reversal was based upon the trial court’s erroneous refusal to allow cross-examination of a merely buttressing prosecution witness. There are, on the other hand, a number of cases in which various courts have been confronted with improper limitations of cross-examination and found that the error was harmless. United States v. McKinley, 493 F.2d 547, 550-551, n. 6 (5th Cir. 1974); United States v. Brown, 482 F.2d 1226 (8th Cir. 1973); United States v. Davila-Nater, 474 F.2d 270 (5th Cir. 1973); United States v. Sidman, 470 F.2d 1158 (9th Cir. 1972), cert. denied, 409 U.S. 1127, 93 S.Ct. 948, 35 L.Ed.2d 260 (1973); Longmire v. United States, 404 F.2d 326 (5th Cir. 1968), cert. denied, 395 U.S. 912, 89 S.Ct. 1757, 23 L.Ed.2d 225 (1969). The common holding in these cases is that reversal is required only where there has been a clear abuse of discretion and an adequate showing of prejudice. For example, in United States v. Brown, supra, 482 F.2d at 1229, the Eighth Circuit observed that even if the defendant in that ease had been allowed to further test the credibility of the witness and had such further questioning impugned the credibility of the witness, the conviction could stand because “the Government’s case in chief did not rest upon the credibility of this witness alone.” The defendant in United States v. Sidman was not permitted to elicit the bias of a witness by showing that the witness expected leniency. The Ninth Circuit allowed that the district court should have permitted that line of cross-examination, but held that the error was harmless because “the evidence was so overwhelming against Sidman.” 470 F.2d at 1165.

In light of the above, we conclude that in the circumstances here presented, the failure to allow cross-examination of Alums as to his previous criminal record and motive for testifying was harmless error beyond a reasonable doubt. Rule 52(a), Fed.R.Crim.P. Further, the fact that the error was of constitutional magnitude does not rule out the application of the harmless error rule. See Milton v. Wainwright, 407 U.S. 371, 92 S.Ct. 2174, 33 L.Ed.2d 1 (1972); Schneble v. Florida, 405 U.S. 427, 92 S.Ct. 1056, 31 L.Ed.2d 340 (1972); Chapman v. California, 386 U.S. 18, 87 S.Ct. 824, 17 L.Ed.2d 705 (1967).

We have carefully examined appellant’s claim that his arrest was illegal and found it to be without merit. Since the arrest was legal, there is no basis for appellant’s assertion that evidence seized incident thereto should not have been admitted.

Appellant argues that he was denied a fair trial by virtue of improper remarks made by the prosecutor during his closing argument. The government, while admitting the intemperance of some of the prosecutor’s remarks, notes that they were made in response to arguments made by appellant. The record supports the government’s position. In addition, there is no showing that appellant was convicted other than on the evidence. United States v. White, 486 F.2d 204 (2d Cir. 1973), cert. denied, 415 U.S. 980, 94 S.Ct. 1569, 39 L.Ed.2d 876 (1974).

Finally, appellant attacks the district court’s instruction requiring the jury to unanimously find appellant not guilty before it considered guilt or innocence on a lesser included offense. The complained of instruction was taken from Federal Jury Practice and Instructions, Vol. 1, § 17.11, approved by an extensive line of Supreme Court cases.

In accord with the aforesaid, the judgments in cases Nos. 74-1869 and 74-1870 are affirmed.


author: BARRETT, Circuit Judge.

text:
    MALONEY-CRAWFORD TANK CORPORATION and The Fish Investment Corporation et al., Plaintiffs-Appellants, v. SAUDER TANK COMPANY, INC., Defendant-Appellee.
    No. 74-1357.
    United States Court of Appeals, Tenth Circuit.
    Argued Jan. 22, 1975.
    Decided Feb. 24, 1975.

      James R. Head, Tulsa, Okl., for plaintiffs-appellants.
    Robert A. White, Houston, Tex. (David L. McGuire, Houston, Tex., on the briefs), for defendant-appellee.
    Before BREITENSTEIN, HILL and BARRETT, Circuit Judges.
   BARRETT, Circuit Judge.

This is a “sister” case to a patent infringement action we previously decided. Maloney-Crawford Tank Corporation v. Sauder Tank Company, 465 F.2d 1356 (10th Cir. 1972). We there upheld the validity of three patents relating to the dehydration of natural gas, and remanded for a determination of damages. Upon remand, after trial to the court, Maloney-Crawford Tank Corporation and The Fish Investment Corporation (hereinafter collectively referred to as “appellants”), were awarded $27,000.00 damages against Sauder Tank Corporation (Sauder). Appellants challenge the adequacy of the damage award.

At trial it was established that Sauder had sold a total of 28 infringing units between July 31, 1962 and April 29, 1968; that the total sales price of the infringing units was $118,936.90; and that the accessories sold with the units totaled $18,555.10. It was also established that Rolo was the exclusive licensee between February, 1958 and December, 1966; that as the exclusive licensee it paid a royalty of 3% of net sales on a minimum of 60 units per year from February, 1958 through December, 1966; and 3% of net sales with a minimum guarantee of $9,000.00 per year thereafter; and that from 1958 to 1965 it sold a total of 665 units and paid a total of $84,923.83 in royalties. Rolo therefore paid an average unit royalty during this period of $127.70 ($84,923.93 - 665). In the 1962 to 1968 period, Sauder, on the other hand, sold 28 infringing units and was assessed a “reasonable royalty” (damages) by the Trial Court of $964.28 per unit ($27,000.00 -s- 28).

In awarding damages to Appellants, the Trial Court found that: damages could be assessed against Sauder for the infringement of all three patents; Maloney-Crawford Tank Corporation had a right to recover damages as a successor in interest to Rolo as patent licensee; that the infringement by Sauder caused Appellants actual, pecuniary loss; that a “reasonable royalty” would be adequate to compensate for the infringements; that a reasonable royalty would have been 3% of Sauder’s sales for the six year period or $4,500.00 per year, whichever was greater; that since the percentage royalty based on sales would be less than $4,500.00 per year, “the royalty owed by Sauder for the manufacture and sale of the infringing units is $4,500.00 per year for the years 1962 through 1968, excluding 1965, or $27,-000.00”; and that the $27,000.00 in damages represented “full and complete satisfaction for any form of infringement within the meaning of 35 U.S.C.A. § 271 by Sauder or any one of the purchasers of the infringing units.”

The Trial Court also found that the $27,000.00 reasonable royalty would be complete satisfaction for the harm caused; that Sauder entered production of its infringing units after consulting with counsel, with the good faith belief that its units did not infringe; that Sauder acted in good faith even when litigation was inevitable; that the record contains no basis for increased damages; and that this was not an “exceptional” case that would warrant the awarding of attorney fees pursuant to 35 U.S.C.A. § 285.

On appeal Appellants contend that the Trial Court erred in: (1) determining that the present action precluded collateral actions in Colorado against Sauder’s customers; (2) not awarding actual damages of $94,992.48; (3) not allowing interest from the time of infringement; (4) holding that Sauder did not act in bad faith; and (5) in denying attorney fees.

I.

Appellants contend that the Trial Court erred in determining that the present action precluded their collateral actions in Colorado against Sauder’s customers, specifically Rocky Mountain Natural Gas Co., who purchased the majority of the infringing units. Appellants contend that Sauder infringed only one of the patents by manufacturing and selling the infringing units, whereas Sauder’s customers, by using the units, infringed the two companion process patents. Accordingly, Appellants argue that they were therefore entitled to separate actions against both Sauder and its customers.

In rejecting this argument the Trial Court found that: (1) “the units manufactured and sold by Sauder were designed to accomplish all of the contested claims of all three patents”; (2) Aro Manufacturing Co., Inc. v. Convertible Top Replacement Co., Inc., 377 U.S. 476, 84 S.Ct. 1526, 12 L.Ed.2d 457 (1964), is not supportive of Appellants’ allegations of error; (3) Sauder had given its customers a “save harmless” agreement and that whatever harm was caused, “Sauder is liable for the full amount under this agreement”; and (4) that the ’940 and ’941 patents did not have a “separate value” and that “all three inventions were incorporated into one calcium chloride dehydrator.”

Supportive of the Trial Court’s determinations of the interrelationship of the three patents is this stipulation at the trial:

The only compensation received by Maloney-Crawford as a result of the sale of dehydrators manufactured under the patents in suit is the initial purchase price, there being no separate or additional compensation for the rights to operate under the patents covering such apparatus or its methods of use.

These findings are not specifically attacked or rebutted by Appellants. The appellate court must affirm the decision of a trial court if the findings are not clearly erroneous. Maloney-Crawford Tank Corporation v. Sauder Tank Company, supra; Boutell v. Volk, 449 F.2d 673 (10th Cir. 1971). We hold that the findings of the Trial Court as set forth above are not clearly erroneous.

Our affirmance of the Trial Court damage award is consistent with Aro Manufacturing Co. v. Convertible Top Replacement Co., Inc., supra:

Hence we think that after a patentee has collected from or on behalf of a direct infringer damages sufficient to put him in the position he would have occupied had there been no infringement, he cannot thereafter collect actual damages from a person liable only for contributing to the same infringement. This principle is but an application of the rule that full satisfaction received from one tort-feasor prevents further recovery from another.
377 U.S. at 512, 84 S.Ct. at 1545.

II.

Appellants contend that $27,000.00 was an inadequate damage recovery and that they should have recovered actual damages of $94,992.48.

In contending that the $27,000.00 was inadequate, Appellants argue that the damages should be, at a minimum, equal to the annual royalty fee of $9,000.00 for each of the seven years involved or $63,-000.00 and that, in the alternative, a more correct assessment would be an award of $94,922.48, representing the gross profit they would have allegedly received from the sale of the infringing units.

35 U.S.C.A. § 284 affords the trial court broad discretion in assessing damages:

Upon finding for the claimant the court shall award the claimant damages adequate to compensate for the infringement, but in no event less than a reasonable royalty . . . together with interest and costs as fixed by the court. (Emphasis added).

As noted, supra, during 1958 to 1965, Rolo sold 665 units and paid a total of $84,923.83 in royalties, for an average royalty per unit of $127.70. Nothing in the record indicates that this was anything but a “reasonable royalty.” On the other hand, as previously observed, Sauder sold 28 infringing units and was assessed damages, in the form of a “reasonable royalty” of $27,000.00, for an average royalty per unit of $964.28. Appreciating that a “reasonable royalty” to Rolo over a seven year period was $127.70 per unit, we cannot accept Appellants’ contention that the court awarded royalty of $964.28 per unit was inadequate. In view of the royalty awarded, and the evidence that Rolo’s net income before taxes was 3.6% of sales in 1963 and 7.9% of sales in 1964, we hold that the Trial Court did not err in refusing to award the damages requested by Appellants. As the Trial Court noted, had Rolo actually sublicensed licensee rights to Sauder, it is doubtful that Rolo would have passed on “to the sublicensee all of the royalties imposed by the patent owner.”

III.

Appellants contend that the Trial Court erred in not assessing interest from the date of infringement. We are in basic sympathy with this contention. Prior to its enactment, both House and Senate versions of 35 U.S.C.A. § 284 required “interest from the time the infringement occurred”. This language was deleted, however, and as adopted, 35 U.S.C.A. § 284 provided for “interest and costs as fixed by the court.” Under these circumstances, we cannot hold that the Trial Court erred in denying interest from the time that the infringement occurred in this case. Georgia-Pacific Corporation v. U. S. Plywood-Champion Papers, Inc., 446 F.2d 295 (2nd Cir. 1971); General Electric Company v. Sciaky Bros., Inc., 415 F.2d 1068 (6th Cir. 1969). Considerable latitude is to be afforded trial courts in assessing damages in patent infringement actions. Allen v. W. H. O. Alfalfa Milling Co., 272 F.2d 98 (10th Cir. 1959).

IV. and V.

Appellants contend that the Trial Court erred in holding that Sauder did not act in bad faith and in denying their attorney fees. Appellants contend that the Trial Court abused its discretion in finding that Sauder acted in good faith. Appellants also contend that “The evidence tends toward some ‘hanky-panky’ between Sauder and Oliver Fowler of Rocky Mountain.” We are unimpressed by these contentions. We hold that the Trial Court, under the facts in this record, properly denied increased damages and attorney fees.

In determining that Sauder acted in good faith, the Trial Court cited with approval the following language from Union Carbide Corporation v. Graver Tank & Mfg. Co., 282 F.2d 653 (7th Cir. 1960), cert. denied 365 U.S. 812, 81 S.Ct. 692, 5 L.Ed.2d 691 (1961), which we deem appropriate here:

Bad faith should not be attributed to [the infringer] because it contested and lost on the issue of infringement. Many a legal battle has been fought honestly and in good faith, but lost. Neither do we think on this record that [the infringer] can properly be charged with bad faith or characterized as a conscious and wilful infringer when it acted upon the advice of equally experienced and competent counsel.
282 F.2d at 662, 663.

The predicates upon which Appellants attempted to justify increased damages were fully presented to the Trial Court. We cannot substitute our judgment for that of the Trial Court, absent clear error. We find none here. An appellate court cannot try a ease de novo. Hinde v. Hot Sulphur Springs, Colorado, 482 F.2d 829 (10th Cir. 1973); Scaramucci v. Dresser Industries, Inc., 427 F.2d 1309 (10th Cir. 1970).

Although Appellants contend that the Trial Court erred in failing to award their attorney fees, this argument is advanced in a summary, token manner, void of factual clarification and recital of any cogent authority. In Q-Panel Company v. Newfield, 482 F.2d 210 (10th Cir. 1973), we held that the prevailing party in a patent infringement action is not entitled to attorney fees as a matter of law, and “[E]ven less that candid conduct will not dictate the award.” Under the Q-Panel standard, which we reaffirm here, attorney fees are to be awarded only in “exceptional cases” subject to the “primary discretion of the trial court.” Furthermore, we have held that the grant of attorney fees is erroneous where no evidence is presented relative to the incurring or the reasonableness of the fees connected to the value of the services performed. Irwin v. West End Development Company, 481 F.2d 34 (10th Cir. 1973), cert. denied 414 U.S. 1158, 94 S.Ct. 915, 39 L.Ed.2d 110 (1974); Del Rey Air v. Expressway Airpark, Inc., 468 F.2d 187 (10th Cir. 1972). The Trial Court did not err in refusing to increase the damages and award attorney fees.

VI.

The Trial Court fully discharged the dictates of our remand in an exemplary manner.

Affirmed.

      . Exclusive licensee of patents owned by The Fish Investment Corporation.

      . Predecessor Licensee of the patents.

      . It is noteworthy that the “reasonable royalties” assessed by the Court in the form of damages were approximately 23% ($27,000.00 -s- $118,936.90) of Sauder’s gross sales.

      . H.R.Rep.No. 1587, 79th Cong., 2d Session 1 (1946), U.S.Code Cong. Serv., p. 1387. (1946); S.Rep.No.1503, 79th Cong., 2d Session 2