author: PER CURIAM: BERNHARDT, Commissioner:

text:
    Jay F. WILFONG, d/b/a Wilfong Poultry Farms v. The UNITED STATES.
    No. 691-71.
    United States Court of Claims.
    July 13, 1973.

      Marion Edwyn Harrison, Washington, D. C., attorney of recora, for plaintiff. E. Murray Tate, Jr., and Tate, Weathers & Young, Hickory, N. C., of counsel.
    J. Hank Meshorer, with whom was Asst. Atty. Gen. Wallace H. Johnson, for defendant.
    Before COWEN, Chief Judge, and DAVIS, SKELTON, NICHOLS, KUN-ZIG, and BENNETT, Judges.

      . Plaintiff alleges overflights from another training course route as well, Florence 46, but this route was too far from plaintiff’s farm to be realistically considered as a source of frequent overflights.

   OPINION

PER CURIAM:

This case comes before the court on defendant’s motion, filed June 13, 1973, requesting that the court adopt the recommended decision of Trial Commissioner C. Murray Bernhardt, filed April 20, 1973, pursuant to Rule 134(h), as the basis for its judgment in this ease since plaintiff has failed to file a notice of intention to except thereto and the time for so filing pursuant to the Rules of the court has expired. Upon consideration thereof, without oral argument, since the court agrees with the decision, as hereinafter set forth, it hereby affirms and adopts the same as the basis for its judgment in this case. Therefore, defendant’s motion of June 13, 1973, is granted, plaintiff is not entitled to recover and the petition is dismissed.

OPINION OF COMMISSIONER

BERNHARDT, Commissioner:

Plaintiff, the owner of a chicken farm in North Carolina complains that his property rights in the airspace superadjacent his farm, but below the 500-foot level above which a regulation authorized by 49 U.S.C. § 1301(24) (1970) has decreed to be the public’s free and navigable airspace, have been inversely condemned. Plaintiff asserts that this taking has been accomplished through overflights of military aircraft which crossed his property from October 3, 1969 to December 10, 1970, with sufficient frequency, noise and violence as to frighten and injure his flocks, disrupt and impair his commercial egg and poultry business, damage his henhouses, and thereby diminish the value of his ownership.

In principal, plaintiff’s case rests on United States v. Causby, 328 U.S. 256, 66'S.Ct. 1062, 90 L.Ed. 1206 (1946) and its collateral judicial heirs. It differs from Causby and all others in that as a ease of first impression it concerns level overflights originating from a distant source but on a fixed route readily subject to instant change, rather than the glide angle pattern of descent and ascent of aircraft arriving and departing from an adjacent permanent airport and thus crossing the land beyond the runway at varying but low elevations with inevitable certainty and frequency. The latter situation is discussed in Harvey, Landowners’ Rights in the Air Age: The Airport Dilemma, 56 Mich.L.Rev. 1313 (1958).

To state the problem is to solve it. Even after establishing with some adjustments the bulk of his factual contentions and demonstrating passably the nature of damages alleged in an amount subject to further proof, the plaintiff cannot recover for two principal reasons: (1) his case sounds principally in tort over which this court lacks jurisdiction ; and (2) his failure to prove timely complaints so that the Air Force could invoke its purported standard policy to abate the overflight nuisance by altering the trespassing route or raising the minimum flight altitudes.

The overflights in question were of Air Force reconnaissance jet aircraft operating from the Shaw Air Force Base near Sumter, South Carolina (many miles distant from plaintiff’s North Carolina farm) pursuing a low level, high speed training route having a code name of Florence 47. This route followed a roughly circular course over a broad geographical area of North and South Carolina. It was laid out to avoid crossing over congested areas, although, of course, it could not avoid passing over many habitations and farms. The route was plotted as a 10-mile wide corridor whose center line linked — in geometrically connected straight segments — simulated ground targets, so that the aircraft flew from target to target discharging their basic mission of training experienced pilots to take reconnaissance photographs of selected ground targets from low levels and at high speeds. Although the aircraft were supersonic types, there is no indication or charge that sonic booms are involved. The maximum speed permitted on the training flights was 552 m. p. h.

At the outset of the period of infringement the aircraft flew at heights ranging from 500 feet to 1,500 feet; however, in response to plaintiff’s complaints in March 1970, the 500-foot minimum altitude of the route leg crossing plaintiff’s farm was raised to 1,500 feet, and again on May 5, 1970, to 2,000 feet. Finally, due to plaintiff’s continued complaints, that leg of Florence 47 which crossed plaintiff’s farm was moved 15 miles away as to most of Shaw aircraft on May 13, 1970, and as to all of them on June 11,1970.

After June 11, 1970, it is reasonable to believe that the Air Force had completely abated the nuisance save for the possibility of a stray plane or two accidentally deviating from its revised route. Such deviations it is believed were de minimis, despite the plaintiff’s contentions that the frequency of overflights was only slightly reduced after the route change and did not terminate completely until December 10, 1970. Thus, we are effectively concerned with infringing overflights from October 16, 1969 to June 11, 1970.

The consequences of the overflights to plaintiff’s business during that shortened period are described in findings 20 through 23, infra. These findings are derived from the eye- and ear-witness testimony of persons in plaintiff’s hire whose rustic artlessness would have made successful dissembling unlikely and the effort detectable. Our quarrel is not with the reality of cause and effect, but with the matter of causative permanence, an element of inverse condemnation through aerial trespasses that is prerequisite to recovery. It is not enough to constitute a Fifth Amendment taking that aerial trespasses be sufficiently low, loud and frequent as to interfere with the enjoyment of private property; they must also subject such enjoyment to a liability of intermittent interference that is either permanent or at least of a prospective duration so indefinite as to be constructively permanent.

The necessity for permanence or its equivalence may be analogized from rulings in cases relating to the taking of riparian property rights by permanent or periodic flooding occasioned by Federal dam projects. In United States v. Cress, 243 U.S. 316, 37 S.Ct. 380, 61 L. Ed. 746 (1917), the altered flow of a river brought about by construction of a Federal dam caused plaintiff’s property to become permanently subject to frequent overflows, and a Fifth Amendment taking was consequently found. There have been a number of comparable cases including United States v. Lynah, 188 U.S. 445, 23 S.Ct. 349, 47 L.Ed. 539 (1903); Jacobs v. United States, 290 U.S. 13, 54 S.Ct. 26, 78 L.Ed. 142 (1933); United States v. Kansas City Life Ins. Co., 339 U.S. 799, 70 S.Ct. 885, 94 L.Ed. 1277 (1950).

The Cress line of authority is readily distinguishable from certain other flooding cases. The contrary cases involved generally a failure to prove the inevitability of recurrence of floods induced by a particular Federal project. In order for a taking to occur, the effect of such flooding must be permanent rather than simply a random event induced more by an extraordinary natural phenomenon than by Government interference. Thus, in National By-Products v. United States, 405 F.2d 1256, 1272, 186 Ct.Cl. 546, 575 (1969), the plaintiff failed to prove that floods which occurred in the late spring of 1964 would “inevitably recur.” 405 F.2d at 1274, 186 Ct.Cl. at 578.

In its three successive decisions in North Counties Hydro-Electric Co. v. United States, the Court of Claims denied plaintiff’s claim of taking by refusing to find that construction of a dam on the Illinois River near Ottawa, Illinois, permanently subjected plaintiff’s power plant to “intermittent but inevitably recurring overflows * * * ” (170 Ct.Cl. at 247); despite the fact that the dam was shown to have produced ice jams which caused the flooding of plaintiff’s power plant on three occasions between 1943 and 1960.

From these authorities we extract the principle that to support a Fifth Amendment taking via inverse condemnation there must be not only a Federal activity or project which is permanent in nature, but that such activity or project must impose on private property certain consequences which are themselves permanent, and that their recurrence is inevitable even if only intermittent. By “permanent” we include a servitude of indefinite duration.

The permanence factor establishing a Fifth Amendment taking is equally applicable to aerial invasions of private property by Federal action. In Portsmouth Harbor Land & Hotel Co. v. United States, 260 U.S. 327, 43 S.Ct. 135, 67 L.Ed. 287 (1922), the Supreme Court instructed this court that, if the construction of a gun battery and intermittent firing of such batteries over a period of years evidenced an “abiding purpose” by the Government to fire projectiles over plaintiff’s property whenever it saw fit, then the subordination of the property to such use would impose a servitude thereon constituting “an appropriation of property for which compensation should be made.” The case was returned to the Court of Claims to determine whether the facts supported the allegations in the petition, which the Supreme Court deemed to be sufficient as pleaded to constitute a cause of action not subject to demurrer.

Borrowing the philosophy of Portsmouth as to the compensability of Government appropriation of airspace above privately owned land, the Supreme Court in United States v. Causby, supra, agreed with the Court of Claims that “a servitude had been imposed upon the [plaintiff’s] land” by frequent, low level flights over it which diminished its value, but remanded the case to make certain determinations including the facts as to “whether the easement taken was temporary or permanent.” On remand the Court of Claims found there to be a compensable “temporary” taking for a 4½-year period (109 Ct.Cl. 768, 770 (1948)). The element of permanence is implicit if not expressly stated in many other avigation easement eases decided by this and other courts since Causby. Adaman Mutual Water Co. v. United States, 181 F.Supp. 658, 143 Ct.Cl. 921 (1958), based its finding that “The easements of flight taken by the defendant * * * are permanent in nature * * * ” on the fact that the adjacent Air Force Base was a permanent military airport from which low and frequent overflights “are to be expected for the indefinite future.” 181 F.Supp. at 660, 143 Ct.Cl. at 925. All discoverable avigation easement cases to date, except for those involving the sonic boom problem, are ones where the claimants lived near the end of a fixed runway of an established airport, so that arriving and departing aircraft would of necessity funnel across the claimants’ property with inevitable frequency and at low altitudes so long as the runway was in use.

There is no comparable element of permanent or indefinite servitude in the case under review. The route selected for Florence 47 was infinitely flexible with respect both to location and minimum altitude, and the policy of Shaw Air Force Base where the flights originated was to respond to complaints promptly by altering the route or the altitude so as to abate the nuisance. Existence of this policy at Shaw is established by word as well as deed in the form of changes in altitude and route when first it became aware of plaintiff’s complaints. Thus, where the trespass is terminable conveniently, quickly and at will, and the policy of prompt abatement is firm and followed in actual practice, even though there may be some damage it is consequential in nature and tortious in origin rather than a compensable taking under the Fifth Amendment.

It is also observed that the plaintiff failed to prove that he made complaints to the Air Force prior to March 1970, although the overflights commenced in mid-October 1969 and were quite clearly Air Force aircraft from Shaw. No recovery could be had without complaint and an opportunity given to the Air Force to abate the nuisance by removing its cause. We are puzzled by the plaintiff’s failure to prove that he made complaints prior to March 1970. The fact that plaintiff was not reluctant to complain is shown not only by his vociferous and repeated complaints after March 1970, but also by the proof that he complained vehemently in the fall of 1969 to the operator of a nearby civilian airport concerning civilian aircraft which were allegedly buzzing his farm. Plaintiff, however, failed to prove that he made similar complaints to the Air Force starting in October 1969. Air Force records do not reflect any complaints from plaintiff either by written notations or by actions in adjusting the altitude or routing of Florence 47 flights.

If the plaintiff did complain to the Air Force from 1969 on — and it seems incredible that he would not have done so given the Air Force overflight consequences which the record suggests in that earlier period — he should have been able to verify the complaints by reference to telephone toll call records, or in some other way beyond his own bare testimony. We cannot find that he did complain merely because he logically should have. The Air Force witnesses from Shaw who should have had knowledge of plaintiff’s verbal complaints if they had been made prior to March 1970, said emphatically that the first recorded complaints received from plaintiff were in March. We are inclined to accept that evidence in absence of better proof than the plaintiff supplied. The plaintiff’s actionable period of overflights thus shrinks to roughly 3 months from sometime in March 1970 to June 11, 1970, when the route was removed. This brief period of time during which the Air Force endeavored to accommodate plaintiff’s complaints represented nothing more than a tortious invasion of plaintiff’s airspace rather than a compensable taking in a Constitutional sense.

Thus, plaintiff’s claim on the separated issue of liability fails for the reasons assigned. The facts presented in considerable detail in the findings following this opinion go far beyond the requirements of the dispositive grounds in an excess of concern over plaintiff’s rights, but no matter how they are weighed they cannot be compensated here. The petition must be dismissed.

CONCLUSION OF LAW

Upon the findings of fact and the foregoing opinion, which are adopted by the court and made a part of the judgment herein, the court concludes as a matter of law that plaintiff is not entitled to recover, and the petition is dismissed.

       Whereas the court adopts the Commissioner’s separate findings of fact, which are set forth in his report filed April 30, 1973, they are not printed herein since such facts as are necessary to the decision are contained in his opinion.

      . 14 C.F.R. § 91.79(c) (Rev. January 1, 1967).

      . Inverse condemnation is a legal label for effective expropriation of private property, the sovereign acting indirectly without benefit of formal eminent domain proceedings in condemnation; thus, sovereign acts incompatible with an owner’s present enjoyment of his property rights.

      . North Counties Hydro-Electric Co. v. United States, 70 F.Supp. 900, 108 Ct.Cl. 470 (1947) ; North Counties Hydro-Electric Co. v. United States, 151 F.Supp. 322, 138 Ct.Cl. 380, cert. denied, 355 U.S. 882, 78 S.Ct. 149, 2 L.Ed.2d 112 (1957) ; North Counties Hydro-Electric Co. v. United States, 170 Ct.Cl. 241 (1965).


source: Caselaw Access Project

author: NICHOLS, Judge. DAVIS, Judge SKELTON and BENNETT, JJ.,

license: Public Domain

text:
    DRAVO CORPORATION v. The UNITED STATES.
    No. 39-72.
    United States Court of Claims.
    July 13, 1973.
    Davis, J., dissented and filed opinion in which Skelton and Bennett, JJ., joined.

      Alexander W. Dann, Jr., Memphis, Tenn., Attorney of record for plaintiff. D. Jack Smith, Jr., of counsel.
    Michael J. Rubin, Washington, D. C., with whom was Asst. Atty. Gen. Harlington Wood, Jr., for defendant.
    Before COWEN, Chief Judge, and DAVIS, SKELTON, NICHOLS, KASHIWA, KUNZIG and BENNETT, Judges.
   ON PLAINTIFF’S MOTION AND DEFENDANT’S CROSS MOTION FOR SUMMARY JUDGMENT

NICHOLS, Judge.

This case is before the court on plaintiff’s motion for summary judgment and defendant’s cross motion for summary judgment.

Plaintiff entered into a fixed price contract (No. DACWO 1-68-C-0088) with the Department of the Army on April 17, 1968, for the construction of the Jones Bluff Lock and Dam on the Alabama River in Alabama. Article 50 of the general provisions of the contract entitled “Value Engineering Incentive” provided that the contractor and the Government would share. in savings in the cost of performance of the contract which resulted from changes proposed by the contractor. On May 22, 1968, plaintiff submitted a proposal for a change in the design and construction of the cofferdam required by the contract along with a suggested adjustment in the contract price, not including any decrease in profit on the work originally included in the contract, which would now be deleted as the result of plaintiff’s proposal. On September 25, 1968, the contracting officer informed plaintiff that its proposal was acceptable but that the decrease in the contract price must also include a decrease in plaintiff’s anticipated profits. Plaintiff proceeded to do the work as changed, under protest. On May 9, 1969, the contracting officer rendered his final decision that a reduced profit must be reflected in the contract cost reduction. Plaintiff appealed this decision to the Corps of Engineers Board of Contract Appeals (The Board) on May 27, 1969. In a decision, Eng. BCA No. 3046, dated August 17, 1971, the Board upheld the decision of the contracting officer, stating that the decrease in costs under Article 50 was to be calculated as an equitable adjustment and thus elimination of some profits must be added to the eliminated cost to determine the adjusted price.

The parties are in agreement as to the facts of the case and the figures used in arriving at the cost reduction. They disagree only as to whether Article 50 calls for the calculation of profit as part of the cost savings. Thus, the controversy in this case centers around the varying interpretations of Article 50 of the contract, and therefore the court is faced with a pure question of law. We hold that the plaintiff is right, and the Board in error.

Plaintiff tells us that the language of Article 50 indicates that the amount of cost reduction must be calculated from the point of view of cost savings to the contractor. Therefore, profit should not be included in arriving at the amount saved. The court’s attention is invited to the pertinent regulations involved, and to the administrative history of those regulations, all of which the plaintiff says supports its position.

Defendant tells us, to the contrary, that the only reasonable meaning that can be given Article 50 is to read its provisions from the point of view of savings to the Government." Defendant argues that the pertinent regulations and their administrative history as they relate to fixed price contracts support its position. Finally, the defendant avers that the court should not depart from the usual method of calculating equitable adjustment under the circumstances of this case, and we are reminded that normally the calculation of equitable adjustment includes profit.

The objective in interpreting a contract is to determine the intention of the parties. The language of the contract must be given the meaning that would be understood by a reasonably intelligent person acquainted with the contemporary circumstances. Firestone Tire & Rubber Co. v. United States, 444 F.2d 547, 195 Ct.Cl. 21 (1971). All provisions of the contract should be read together and so as to make none inoperative, and specific provisions should be given precedence over general ones. Morrison-Knudsen Co. v. United States, 397 F.2d 826, 184 Ct.Cl. 661 (1968). If the contract is unambiguous its language should be implemented. Keco Industries v. United States, 364 F.2d 838, 176 Ct.Cl. 983 (1966), cert. denied, 386 U.S. 958, 87 S.Ct. 1027, 18 L.Ed.2d 105 (1967). As an aid to interpretation of the contract the pertinent ASPR should be inspected and the policy behind the promulgation of these regulations should be looked into. Firestone, Tire & Rubber, supra,. Such regulations are law, binding on the contract parties, where applicable. Newport News Shipbuilding & Dry Dock Co. v. United States, 374 F.2d 516, 179 Ct.Cl. 97 (1967); Chris Berg, Inc. v. United States, 192 Ct.Cl. 176, 426 F.2d 314 (1970).

That portion of the contract which is at the center of controversy in this case is Article 50 of the General Provisions of the contract. That Article reads in pertinent part:

* * •* * -X- -X-

50. VALUE ENGINEERING INCENTIVE (JUNE 1967) (Applicable to all contracts in excess of $100,000)

(a) (1) This clause applies to those cost reduction proposals initiated and developed by the Contractor for changing the drawings, designs, specifications, or other requirements of this contract. This clause does not, however, apply to any such proposal unless it is identified by the Contractor, at the time of its submission to the Contracting Officer, as a proposal submitted pursuant to this clause.

* * -X-

(2) The cost reduction proposals contemplated are those that:

(i) would require, in order to be applied to this contract, a change to this contract; and

(ii) would result in savings to the Government by providing a decrease in the cost of performance of this contract, without impairing any of the items’ essential functions and characteristics such as service life, reliability, economy of operation, ease of maintenance, and necessary standardized features.

(b) As a minimum, the following information shall be submitted by the Contractor with each proposal:

(i) a description of the difference between the existing contract requirement and the proposed change, and the comparative advantages and disadvantages of each;
(ii) an itemization of the requirements of the contract which must be changed if the proposal is adopted, and a recommendation as to how to make each such change (e. g., a suggested revision);
(iii) an estimate of the reduction in performance costs, if any, that will result from adoption of the proposal, taking into account the costs of development and implementation by the Contractor (including any amount attributable to subcontracts in accordance with paragraph (e) below) and the basis for the estimate;
(iv) a prediction of any effects the proposed change would have on collateral costs to the Government such as Government-furnished property costs, costs of related items, and costs of maintenance and operation ;
* •>:• # -x- * *

(c) (1) Cost reduction proposals shall be submitted to the Procuring Contracting Officer (PCO). * * *

(2) The Contracting Officer may accept, in whole or in part, either before or within a reasonable time after performance has been completed under this contract, any cost reduction proposal submitted pursuant to this clause by giving the Contractor written notice thereof reciting acceptance under this clause. Where performance under this contract has not yet been completed, this written notice may be given by issuance of a change order to this contract. Unless and until a change order applies a value engineering change proposal to this contract, the Contractor shall remain obligated to perform in accordance with the terms of the existing contract. If a proposal is accepted after performance under this contract has been completed, the adjustment required shall be effected by contract modification in accordance with this clause.

(3) If a cost reduction proposal submitted pursuant to this clause is accepted by the Government, the Contractor is entitled to share in instant contract savings, collateral savings, and future acquisition savings not as alternatives, but rather to the full extent provided for in this clause.

(4) Contract modifications made as a result of this clause will state that they are made pursuant to it.

(d) If a cost reduction proposal submitted pursuant to those clauses is accepted and applied to this contract, an equitable adjustment in the contract price and in any other affected provisions of this contract shall be made in Accordance with this clause and the “Termination for Convenience,” “Changes,” or other applicable clause of this contract. The equitable adjustment shall be established by determining the effect of the proposal on the Contractor’s cost of performance, taking into account the Contractor’s cost of developing the proposal, insofar as such is properly a direct charge not otherwise reimbursed under this contract, and the Contractor’s cost of implementing the change (including any amount attributable to subcontracts in accordance with paragraph (e) below). When the cost of performance of this contract is decreased as a result of the change, the contract price shall be reduced by the following amount: the total estimated decrease in the Contractor’s cost of performance less fifty percent (50%) of the difference between the amount of such total estimated decrease and any net increase in ascertainable collateral costs to the Government which must reasonably be incurred as a result of application of the cost reduction proposal to this contract. When the cost of performance of this contract is increased as a result of the change, the equitable adjustment increasing the contract price shall be in accordance with the “Changes” clause rather than under this clause, but the resulting contract modification shall state that it is made pursuant to this clause. (JUNE 1967) * * * (Emphasis supplied.)

•X- * -X -X- * #

Paragraphs (c)(2), (3), and (d) indicate that the Article is to be a mechanism by which the adjustment in price is to be implemented. Paragraph (d) clearly states that “an equitable adjustment in the contract price and in any other affected provisions of this contract shall be made in accordance with this clause and the ‘Termination for Convenience’, ‘Changes’, or other applicable clause of this contract”. If the paragraph stated that the adjustment should be made exclusively in accordance with the “Termination for Convenience” or the “Changes” clause then the rules which would apply to an equitable adjustment under those clauses would doubtless apply. However, here we are told that the adjustment shall be made in accordance with this clause as well as with the others, indicating that this adjustment in price is to be distinguished and different from one under those clauses. How it is to be distinguished is spelled out later in the same paragraph where it is stated that the adjustment be calculated as half “the total estimated decrease in the Contractor’s cost of performance”. This specific instruction how to calculate the adjustment preempts the usual general rules for computing equitable adjustments. It runs counter to an adjustment under other clauses of the contract which are based on the decrease in the Government’s cost in getting the job done and thus clearly include a decrease in the contractor’s profit. Paragraph (d) ends by setting out the procedure to be followed when there is an increase in the cost of performance as the result of the Article 50 change. In such circumstances “the equitable adjustment increasing the contract price shall be in accordance with the ‘Changes’ clause rather than under this clause”. Of course, a;50-50 cost sharing is not prescribed in case of a cost increase. However, the language used in stating this further reflects that the method used in computing a downward price adjustment is an animal peculair unto itself.

As stated above, when possible all language of the contract should be given an operative meaning and specific language should take precedence over general language. To apply only the “Changes” or “Termination for Convenience” procedures for adjustment would be to read out contract language of specific application to the question at issue, in favor of language of general application. Such an order of preference would be contrary to the rules of construction followed by this court. The defendant invites the court’s attention to the fact that “contractor’s cost” is a phrase which also appears in the standard Changes and Changed Conditions Clauses yet those clauses trigger the usual rules for calculating equitable adjustment. It is clear, however, from those clauses that a change in the contractor’s cost is only a condition precedent to their operation and not, as here, the stated basis of calculating what the adjustment should be. The comparison on the basis of the appearance of the phrase “contractor’s cost” is simply in-apposite.

The conclusion that the language of the Article in question spells out a method for adjustment which may differ from the usual equitable adjustment under the “Changes” or “Termination for Convenience” clauses of the contract and that this adjustment is to be based upon the contractor’s cost of performance and therefore will not include profit, is supported by the relevant regulations. These regulations read in pertinent part:

Armed Services Procurement Regulations Involved (32 C.F.R. (1968))

Subpart Q — Value Engineering § 1.1701 Policy.

(a) Value engineering is concerned with the elimination or modification of anything that contributes to the cost of a contract item or task but is not necessary for needed performance, quality, maintainability, reliability, or interchangeability. Specifically, value engineering as contemplated by this part constitutes a systematic and creative effort, not required by any other provision of the contract, directed toward analyzing each contract item or task to ensure that its essential function is provided at the lowest over-all cost. Over-all cost may include, but need not be limited to, the costs of acquiring, operating, and logistically supporting an item or system.

(b) In order to realize fully the cost reduction potential of value engineering, provisions which encourage or require value engineering shall be incorporated in all contracts, including letter contracts, of sufficient size and duration to offer reasonable likelihood for cost reduction. All such provisions shall offer the contractor a share in cost reductions ensuing from change proposals he submits under such contracts. While most proposals will result from the contractor’s value engineering efforts, any proposal submitted by the contractor which meets the documentation and other requirements of the value engineering clauses may be rewardable. In addition, the value engineering provisions are intended to induce major prime contractors to encourage subcontractors to utilize value engineering techniques. Finally, to realize the cost reduction potential of value engineering, it is imperative that value engineering change proposals be processed by all parties as expeditiously as possible.

(c) In addition to the value engineering potential noted above (cost reductions resulting from contract change proposals), it is recognized that a contractor may develop a value engineering-type proposal with regard to a weapon system or end item for which he does not have a current contract, e. g., where the contractor originally developed and produced a weapon system, it is now operational, and the contractor no longer has a production or other contract therefor. In such a case, the value engineering proposal would not come within the provisions of this subpart. Nevertheless, it is desirable that the potential cost reductions resulting from unsolicited proposals not within the scope of value engineering clauses under current contracts be realized by the Government. Accordingly, nothing in this subpart shall be construed to preclude the purchase of unsolicited proposals on a case-by-case basis or other special contractual arrangements, pursuant to Subpart B, Part 9 of this chapter, or 10 U.S.C. § 2386, which are necessary to induce contractors to develop such proposals and make them available to the Government.

§ 1.1702 Types of value engineering provisions.

§ 1.1702-1 Incentives.

(a) A Value Engineering Incentive clause permits the contractor to share in cost reductions that ensue from change proposals he submits. Many types of contracts, when properly used, provide the contractor with an incentive to control and reduce costs while performing within the specifications and other contract requirements. However, the practice of reducing the contract price (or fee in the case of cost-reimbursement type contracts) under the Changes clause tends to discourage contractors from submitting cost reduction proposals requiring a change to the specifications or other contract requirements even though such proposals could be beneficial to the Government. The objective of a value engineering incentive provision is to encourage the contractor to submit such cost reduction proposals. To be acceptable, a value engineering change proposal must involve some change in the contract specifications, purchase description, or statement of work; this may include the elimination or modification of any requirements found to be in excess of actual needs in the areas of, for example, design, components, materials, material processes, tolerances, packaging requirements, technical data requirements, or testing procedures and requirements, and consequent reduction in the contract cost. Furthermore, even when the contract cost may be increased, the incentive provisions encourage contractors to submit value engineering change proposals that are likely to lead to overall savings resulting from significant net reductions in collateral costs of Government-furnished property, operational requirements or logistic support requirements.

* * **--»*

§ 1.1703 Types of savings to be shared with the contractor.

§ 1.1703-1 General.

(a) One of the key problems in exploiting the very large cost reduction potential of value engineering is that of making contractual arrangements that give the contractor an effective incentive to perform value engineering successfully. An effective incentive arrangement must include three principal elements: first, the contractor must be assured of a fair proportion of any savings realized by the Government as a result of his change proposal; second, he must be assured that this proportion will be applied to a substantial base; and third, he must be assured of an objective evaluation and expeditious processing of his change proposal. Sections 1.1703-2 through 1.1703-4 explain the various types of savings to be shared with the contractor and the different incentive arrangements to accomplish such sharing. Normally, the value engineering clause in a particular contract will provide for the contractor to share in savings realized on the instant contract on future acquisitions within a specified period of time, and in the area of reduced collateral costs.

(b) In choosing an appropriate incentive arrangement, it is Department of Defense policy to provide the contractor with substantial financial incentives to undertake value engineering. This policy reflects the premises that the Government will benefit from any value engineering savings, that definitely assured savings from successful value engineering are likely to be only a part of the overall savings, and that a strong incentive tied to definitely assured savings will induce maximum contractor efforts to realize the full savings potential of value engineering. (Emphasis supplied.)

The above regulations demonstrate an intent on the part of the authors that the contractors be encouraged to come forward with proposals which would lead to cost savings. The adjustment in the contract price under Article 50 was to be an inducement to the contractor. By § 1.1702-1 (a) the Changes clause is rejected as a criterion to measure the price adjustment, and by § 1.1703(b) maximum incentives are the paramount consideration. It is consistent with this intent and policy that the contractor not be forced to accept a reduction in his expected profit partly offsetting his gain from sharing the cost-saving.

Of particular interest in respect to these regulations is that the authors of them were made aware of the fact that they could be construed to allow a contractor to retain all his expected profit. Prior to the enactment of the regulations they were submitted in draft form to various agencies for comment. The office of the Comptroller General in its comment stated that it appeared that under the regulations a contractor would be able to retain his expected profit on work that no longer would be done. It was recommended that further consideration be given to this point. The subcommittee which drafted the final language of the regulation considered this comment and explicitly stated in its memorandum to the ASPR Committee of February 13, 1967:

Subcommittee Conclusion: In light of the basic intent of DOD’s program to stimulate more aggressive value engineering-type efforts on defense contracts, this proposal of the C.G.— which, in effect, takes away part of one contractor payment (i. e., profit or fee) while at the same time making another (i. e., share in savings)- — -appears to be self-defeating. In addition, the C.G.’s characterization of the increased rate of fee or profit as “retention of profits unearned” is considered to be erroneous. The original profit agreed upon is a dollar figure designed to stimulate efficient contract performance; the contractor should not be penalized when he, in fact, demonstrates such efficiency by developing successful VE proposals. Recommendation rejected.

The subcommittee’s conclusion was thereafter adopted by the full ASPR Committee.

Defendant is quick to point out, and correctly, that the Comptroller General’s comment was directed to the Value Engineering Incentive Clause associated with Fixed-Price Incentive (Firm Target) Contracts and not the clause to be used in a Firm Fixed-Price Contract of the sort here at issue. However, it must be noted that the Comptroller General’s comment as to the retention of profits was pertinent to both forms of contracts. It is therefore clear, that at the least the subcommittee was made aware by the Comptroller General’s comment that the language criticized, which with variations was in the provisions proposed for several types of contracts, could be construed to allow retention of profit on work not done, and that it decided that it would be most consistent with the policy of the clause to reject the Comptroller General’s recommendation.

It is of course obvious when one thinks about it that it is inimical to the achievement of contractor economy and efficiency to allow the idea to dominate, that his profit must be in some fixed ratio to his cost, whether the latter be great or small. We are dealing with a contract clause which on its face indicates that profit should not be reduced because the contractor discovers how to make the job less costly. The policy which underlies the regulations promulgated in connection with the clause demonstrates an intent to induce the cooperation of the contractor by making such cooperation economically attractive. And we are shown that the authors of these regulations were aware that contractors might retain expected profit under the regulations and specifically accepted such practice. By all approaches to contract interpretation it would appear that the plaintiff is in a strong position on the question of retention of expected profits.

Defendant, in support of the opposite conclusion, asserts that the clause calls for an equitable adjustment made in accordance with the clause itself and the “Changes” or “Termination for Convenience” articles and that “equitable adjustment” is a term of art which contemplates the inclusion of profit. The court’s attention is invited to the discussion of equitable adjustment in General Builders Supply Co. v. United States, 409 F.2d 246, 187 Ct.Cl. 477 (1969). In General Builders, the court was faced with the provision of equitable adjustment in what was then a new default clause. Under the new clause, if the Government wrongfully terminated a contract the contractor could receive an equitable adjustment. The contractor in that case claimed the right to recover anticipated profits upon having a supply contract wrongfully terminated. In rejecting the contractor’s claim the court stated in part 409 F.2d at p. 250, 187 Ct.Cl. at p. 482:

* * * “equitable adjustment” has become a term of art (in federal contracts) with a commonly understood meaning in the aspect involved in this case (compare Ambrose-Augusterfer Corp. v. United States, 394 F.2d 536, 545, 184 Ct.Cl. 18, 33 (1968)), and that accepted content should be followed unless there are very strong counterbalancing reasons. Such a counterweight might be a marked alteration in context, but if the change is not significant and drastic it should not be sufficient to alter the established meaning of this specialized term. * * *

It is significant that in rejecting the contractors’ claim in General Builders the court allowed for the possibility that under certain circumstances equitable adjustment might be given a different meaning. In the ease at bar we have one of those circumstances, an alteration in context with a specific procedure telling how to determine the price adjustment based on the contractor’s cost.

Defendant says that an equitable adjustment must be a fair adjustment and it is not fair for a contractor to retain a profit on work he does not do. As a matter of contract interpretation, we have shown that the general principles of calculating an equitable adjustment are preempted here by the special provision stating how the computation is to be made. If defendant wants us to distort the plain meaning to effectuate our sense of fairness, or revise the contract because we deem it unconscionable, the answer is we cannot do these things to a contract legal when made; it is outside the judicial power. United States v. Bethlehem Steel Corp., 315 U.S. 289, 62 S.Ct. 581, 86 L.Ed. 855 (1942). That case is of special interest as it involves a “bonus for savings” in some ways similar to the clause here under review. Largely in response to this Bethlehem case, the Congress created the legislation to remedy the problem of excessive profits in defense contracting, now the Renegotiation Act of 1951, 50 U.S.C. App. § 1211 and ff. It could do so for this contract if so minded. Moreover, If it is in the eyes of some unfair to allow a profit on work not done, it may be replied that this sense of fairness leads to the calamitous cost plus a percentage of cost method of contracting, extensively discussed in the Bethlehem ease. In the eyes of others, it is fair that the rare contractor who discovers a way to do the job in a less expensive way is entitled to as much profit, maybe more, as the contractor who runs up the cost beyond all reason. In the instant case, the sharing of the cost saving, under a fixed price contract, results in a profit increase for diminished work, no matter how the instant dispute is decided.

Accordingly, the plaintiffs’ motion for summary judgment is allowed, and judgment is entered for the plaintiff in the stipulated amount of $5,696.00. Defendant’s cross motion for summary judgment is denied.

DAVIS, Judge

(dissenting):

As the court acknowledges at the end of its opinion, there is no question in this case of the plaintiff’s being left with less gain than if it had performed the contract without the value engineering incentive change. It is bound (if its costs run according to plan) to have a greater profit, with respect to the deleted items, than if there had been no modification. The sole issue here is the amount of that additional gain — over and above the sum the contractor expected to receive as profit on the omitted work — which the contractor may properly retain. Under both of the competing interpretations of the Value Engineering Incentive clause, plaintiff will be allowed to keep as profit a sum considerably greater than the amount of gain allocated to the deleted items; the controversy is over how much more profit plaintiff should have as a result of the cost-saving. The dispute, then, is simply between a greater and a somewhat smaller amount of a very considerable added profit.

I stress this factor for two connected reasons. The first is that the decision of the case cannot comfortably be turned on the comparative “equity” or “fairness”, from the monetary standpoint, of the contractor’s or the Government’s reading of the Engineering Incentive article. Under both, the contractor does very well, ending up with a much enlarged profit — and the increased expense to the Government from the contractor’s interpretation is likely to be marginal at most. The second reason for emphasizing that, under both views, the contractor is left with a very substantial increased gain is that, as I see it, there is little ground for picking one interpretation over the other in order to encourage contractors to submit cost-reduction proposals; there seems an adequate profit spur whichever position is taken. Rather, the question before us should be answered primarily in terms of the wording of the clause, its general purpose, context, and history, as well as the impact of the relevant regulations.

Unlike the court, I do not find paragraph (d) of the article to be a clear directive. It commences with a square reference to “equitable adjustment”, with that term’s traditional exclusion of profit on work not done (General Builders Supply Co. v. United States, 409 F.2d 246, 249-250, 187 Ct.Cl. 477, 482-488 (1969)). The paragraph also refers to the convenience-termination, changes, and other relief-granting clauses which use “equitable adjustment” in the same conventional sense the court now rejects. Like the changes and changed conditions articles, the second sentence of paragraph (d) links the “equitable adjustment” directly to the “Contractor’s cost of performance”, suggesting the comparability of the “equitable adjustment” under this clause with that authorized by the older provisions. This stress on “equitable adjustment” and the references to the other like clauses, in the first portion of paragraph (d), appear to me distinctly to braid this clause to the normal “equitable adjustment,” and thus to favor the defendant’s reading.

The only part of paragraph (d) supporting the contractor is the third sentence on which the court relies so heavily; without using “equitable adjustment”, that sentence says that the price shall be reduced, in effect, by 50 percent of the “total estimated decrease in the Contractor’s cost of performance.” Granting that there is a tension between that phraseology (reading it strictly and literally) and the rest of paragraph (d), I do not see that the third sentence is so specific and so unequivocal, in and of itself, that, without more, it must be understood as necessarily overriding the remainder of the paragraph. It is quite possible that this particular phrasing is merely an accident of draftsmanship, without special substantive significance. Further guidance must be sought from other sources outside of paragraph (d), which show the general purpose of the clause and the spirit in which it should be applied.

This was a fixed-price contract, let after formal advertising, and the dominant objective of the Value Engineering Incentive article in such an agreement is revealed by its paragraph (a)(2)(ii) which says that the cost reduction proposals contemplated are those that “would result in savings to the Government by providing a decrease in the cost of performance of this contract * * The emphasis is on the “savings to the Government” which can, of course, be accomplished only by a decrease in the initial fixed price. It is noteworthy, too, that the related reference is to the “cost of performance of this contract”, which can mean the cost to the Government of the contractor’s performance, not merely the contractor’s own costs in the strict sense. The saving to the defendant appears to be the fundamental element.

The same note is sounded in the pertinent Armed Services Procurement Regulations. 32 C.F.R. § 1.1702-1 (1972) (“Incentives”) says that to be acceptable a value engineering change proposal must invoke some modification with “consequent reduction in the contract cost”, and even when the contract cost may be increased by a value engineering change the mechanism becomes operative if there are “overall savings” resulting from significant net reductions in collateral costs of Government-furnished property, etc. And § 1.1703-1, in discussing the types of savings to be shared with the contractor, declares that a contractor must be assured of a fair proportion “of any savings realized by the Government as a result of his change proposal”, and also that the Defense Department policy reflects the premise that “the Government will benefit from any value engineering savings.” The aim is to maximize the savings to the Government without dulling the contractor’s incentive. That end is, I believe, reached by accepting the defendant’s interpretation which leaves the contractor with plenty of incentive (as pointed out above) and at the same time gives the Government a greater over-all savings.

Plaintiff rests upon, and the court invokes, a piece of “legislative” (or background) history which appears to be both too obscure for solid reliance and, as best I can understand it, wide of the mark. The clause involved in the relevant interchange between the Comptroller General and the ASPR committee was not the Value Engineering Incentive article for firm fixed-price agreements —the clause we have before us — but the separate articles for incentive-type contracts which contained quite different provisions for equitable adjustment for engineering incentive changes under those kinds of contracts. Those clauses called for increases in the target profit or the specified fees, and the General Accounting Office questioned whether those profits (and fees) should be increased even though the work was being reduced; in addition, the G.A.O. seems to have objected to the notion that the contractor should be allowed to retain any profit at all with respect to the work being deleted. The ASPR subcommittee rejected these G.A.O. criticisms in language I find quite cryptic but which, on any reading, indicates on its face that the group was then considering only the incentive-type contracts (not the fixed-price form).

The majority of the court feels that the Comptroller General’s comments are pertinent to the contract form we have here, as well as to the incentive type to which it was actually directed, but it is significant that the Comptroller General, though asked to comment on all the forms, did not make a similar observation as to the fixed-price clause now before us; apparently, he did not consider that provision to have the same vice. Conversely, the subcommittee’s ambiguous remarks can be read as restricted to the incentive-type forms, or, as the court prefers, extended more broadly. In any event, insofar as the G.A.O. may have been proposing the complete elimination of all profit on the deleted work, the subcommittee’s rejection would be consistent with the defendant’s position that half of the original profit should be retained. On the whole, I see this segment of the fixed-price Value Engineering Incentive article’s background as too tenuous and infirm to ground any sturdy conclusions, one way or the other. Help must come from the other aids to interpretation.

In the end I remain with and apply the standard we set in General Builders Supply Co., supra, 409 F.2d at 250, 187 Ct.Cl. at 482-483: that “equitable adjustment” has become a term of art in federal contracts, with a commonly understood meaning with respect to profits, and “that accepted content should be followed unless there are very strong counterbalancing reasons.” The only substantial “counterbalancing reason” I see here is the literal wording of the third sentence of paragraph (d) of the Value Engineering Incentive clause, and to my mind the impact of that phraseology is much diminished by the factors of, first, the wording of the rest of paragraph (d), second, the controlling purpose of the Value Engineering Incentive article to produce savings to the Government, and, third, the absence of any solid evidence that the drafters intended to depart from the normal understanding of “equitable adjustment.” My conclusion is that the third sentence is not a “strong counterbalancing reason” but, rather, an accident of draftsmanship which is best understood by reading “the total estimated decrease in the Contractor’s cost of performance” in slightly expanded form as “the total estimated decrease in the cost to the Government of performance by the Contractor.” That is not a difficult transposition and it seems to me to fit better than the strict and literal construction.

SKELTON and BENNETT, JJ.,

join in the foregoing dissenting opinion.

      . In this context I use the words “profit” and “gain” in their colloquial sense — an excess of receipts over costs and expenses. The ASPR Committee which drafted the various Value Engineering Incentive clauses made it clear that cost-savings payments to contractors under these provisions are to be excluded from the fee or profit paid under the contract for either statutory or administrative control purposes. They are payments for services in the same sense as profit is intended, partially, as compensation for the service of being efficient and reducing costs.

      . This is illustrated by the tables plaintiff itself uses in its brief: it is agreed the profit on the excised work would have been $11,392; according to defendant’s calculation, the cost-savings to the Government amounted to $191,80S (including the profit item) and Dravo is entitled to half ($95,904) ; the contractor’s computation is that the cost-savings to the contractor (excluding the profit) came to $1S0,028, of which plaintiff can retain half ($90,014) plus the originally-expected $11,392 profit (a total of $101,406). The simple comparison between $11,392, the profit Dravo would have made (on the deleted work) if the contract had been performed as originally written, and the competing figures of $101,406 or $95,904 shows that in either event plaintiff will have a very greatly enlarged profit allocable to the segment of the work cut out under the Value Engineering Incentive provision.

      . Of the four sentences in the paragraph, this is the only one not using “equitable adjustment”.

      . In this instance the parties have agreed upon the amount of profit allocable to the deleted work, but in the absence of such a stipulation there would be no more difficulty in calculating that amount than in an ordinary change decreasing work under the changes article.

      . For instance, the subcommittee seems to assume that there are two separate facets to distributing cost-savings to the contractor ((1) profit or fee; (2) share in savings) under the incentive-type clauses, but the texts of the provisions appear to contemplate that the contractor’s share of the cost-savings will be distributed to him only through increases in his fee or profit. The short answer to the Comptroller General’s objection is that, unless the profit (or fee) is increased, the contractor will not share at all .in the cost-savings under this type of contract.

      . The contra proferentem canon is inapplicable because there is no showing, and no reason to believe, that plaintiff relied to its detriment, before controversy arose, on the interpretation of the Value Engineering Incentive article now espoused. See Young Associates, Inc. v. United States, 200 Ct.Cl. —,-, 471 E.2d 618, 620-621 (Jan. 1973).


author: MARKEY, Chief Judge.

text:
    Application of Henry G. SCHIRMER.
    Pat. Appeal No. 9025.
    United States Court of Customs and Patent Appeals.
    July 19, 1973.

      William D. Lee, Jr., Edward J. Hanson, Jr., Duncan, S. C., William T. Bullinger, Washington, D. C., attorneys of record, for appellant. John J. Toney, Duncan, S. C., of counsel.
    S. Wm. Cochran, Washington, D. C., for the Commissioner of Patents. Fred E. McKelvey, Washington, D. C., of counsel.
    Before MARKEY, Chief Judge, RICH, BALDWIN and LANE, Judges, and ALMOND, Senior Judge.
   MARKEY, Chief Judge.

This appeal is from the decision of the Board of Appeals, adhered to on reconsideration, affirming the rejections under 35 U.S.C. § 103 of all the remaining claims of appellant’s application serial No. 768,955, filed September 23, 1968, for “Oriented Blends of Polypropylene and Polybutene-1.” We affirm in part and reverse in part.

The Invention

The invention relates to a process for heat sealing and heat shrinking blends of isotactic polypropylene and polybutene-1 at relatively low temperatures. Claim 1 is illustrative of the heat sealing process:

1. A process for heat sealing isotactic polypropylene comprising blending 30-90 weight parts of isotactic polypropylene with 10-70 weight parts of polybutene-1 to form a homogeneous blend, forming a film from said blend, biaxially orienting said film, juxtapositioning a portion of said film with a surface, and applying heat to said film at a temperature below the melting point of said polypropylene and below the melting point of said polybutene-1 and between 160 to 250° F. to seal said film.

Claim 2 adds the further step of heat shrinking at temperatures of 180° to 290° F. Claim 3 calls for simultaneous heat sealing and shrinking by submerging the film in boiling water. Claim 4 further restricts the blend composition and limits the heat sealing temperatures to 160 to 210° F and the heat shrinking temperatures to 190 to 230° F. Independent claim 6 recites orienting the film at temperatures between 180°-230° F as well as the heat sealing and heat shrinking steps of claims 1 and 2. Claims 11 and 12 are limited to the extrusion and orientation steps.

The Rejections

The following references were relied upon:

Schaffhausen U.S. 3,372,049 Mar. 1968

Blatz U.S. 3,246,061 Apr. 1966

Baird et al. U.S. 3,022,543 Feb. 1962

Esso British 809,484 Feb. 1959

Koppehele U.S. 3,014,234 Dec. 1961'

Schaffhausen discloses a blend of 50% isotactic polypropylene and 50% polybutene-1 which is extruded and then biaxially oriented at 290° F, resulting in a film “somewhat more soft and flexible” than a similar film made from a 1:1 polypropylene-polyethylene blend, but with a lower heat resistance. Blatz discloses a process for producing heat-seal-able biaxially oriented polypropylene films, the term “polypropylene films” being meant to include films prepared from blends of polypropylene with other polymers and “heat-sealable” indicating the ability to produce a seal at 200° C. Baird et al. teach the production of a biaxially oriented polypropylene film of high shrink energy which is useful as a shrinkable packaging material, said shrinking being done in 96° C water. The British patent (Esso) discloses blends of polyethylene and polyisoolefins which are similarly useful as heat shrinkable films for packaging food, this shrinking also being carried out by dipping the sealed film in boiling water. The Esso blends are an improvement over pure polyethylene in that the latter requires temperatures of 215 to 230° F to obtain adequate shrinking. Koppehele is relied upon merely for its description of conventional extrusion steps prior to orientation.

Claims 1 to 5 were rejected as unpatentable over Schaffhausen in combination with Blatz, Baird and Esso. It was considered obvious to subject the blends of Schaffhausen to the conventional techniques of heat sealing and heat shrinking, said operations being known to be applicable to other biaxially oriented polypropylene compositions. The particular temperatures employed in these steps were deemed to be “inherent” in the compositions. Claims 6 to 8 were rejected over this combination of references augmented by the teachings of Koppehele as to conventional extrusion steps. The temperature range for orientation recited in these claims was similarly considered inherent in the compositions. Claims 11 and 12, being restricted to the extrusion and orientation steps, were rejected over the combination of Schaffhausen and Koppehele.

In sustaining these rejections, the board held the particular temperatures employed for orientation, sealing and shrinking “a matter of routine determination capable of being performed by one of ordinary skill in the art * * *.” The absence of any disclosure of criticality for the recited parameters was also set forth as a determinative factor. A Rule 132 affidavit of the inventor wherein the preparation of 2:1 blends of polypropylene and polyethylene was described and the orientation temperatures averred to be “not significantly lower than those for polypropylene by itself and in some cases * * * actually increased” was found unpersuasive, no actual data or comparative showing with the most relevant blend of Schaffhausen having been presented.

OPINION

Appellant does not take issue with the conclusion that it would be obvious to subject the Schaffhausen blends to the general processes of orientation, heat sealing and heat shrinking. Instead he contends that it is the temperatures at which these processes are carried out that renders the present claims patentable over the cited prior art. It is urged that no reference teaches or even suggests the unexpectedly low temperatures at which these blends can be oriented, sealed and shrunk. Appellant’s contribution is said to be in the discovery that these blends could be subjected to such processes in the boiling water range, thus permitting the use of isotactic polypropylene in heretofore prohibited areas such as food packaging.

We cannot adopt the Patent Office’s position that since these temperatures could readily be determined, they cannot render patentable otherwise obvious steps. Nor can the fact that_these characteristics are inherent in the compositions negate patentability. The proper question is whether it would have been obvious to one of ordinary skill in the art that these particular blends could be subjected to these steps at the claimed temperatures. No reference teaches orientation of appellant’s blends at temperatures of 180°-230° F or heat sealing or shrinking at any temperature. Thus it is not a matter of the criticality of the recited ranges but of the obviousness of the applicability of said temperatures.

As pointed out by the board, claims 1 and 2 recite no specific orientation temperature: Furthermore, claim 1 encompasses heat sealing at a temperature of 250° F and claim 2 heat shrinking at 290° F. We would agree that it would have been obvious to subject a composition containing up to 70% of polybutene-1, which component melts at about 251° F, to heat sealing at 250° F. We also find nothing unexpected in heat shrinking at 290° F, Schaffhausen teaching orientation at 290° F and appellant himself having stated that “it is well known * * * that an oriented thermoplastic film will shrink at approximately the same temperature at which it is oriented.” Accordingly the 103 rejection of claims 1 and 2 must be affirmed.

Claims 3 to 5, on the other hand, reflect the advantage being stressed by appellant in that they are limited to heat sealing and shrinking at temperatures within the boiling water range, i.e. 160°-212° F or up to 230° F by the inclusion of additives. Although claims 3 and 5 encompass blends containing up to 90% isotactic polypropylene and claim 4 up to 50% of this component, we find no reasonable basis for concluding that these blends would behave similarly to the unmodified polypropylene (of unspecified structure) of Baird et al. or the polyethylene blends of Esso. The 103 rejection of claims 3 to 5 is reversed.

The remaining claims all include specific orientation temperatures, claims 6, 7 and 11 reciting the range of 180°-230° F and claims 8 and 12 the temperature of about 210° F. The solicitor argues that because, as appellant admits, the orientation temperature is usually slightly lower than the melt temperature of a polymer, the temperatures recited herein are the expected values. We cannot agree. In Figure 4 of the specification it is shown that the melting points of the present blends only gradually descend from the melting point of pure polypropylene (about 340° F). There is no evidence of a eutectic point. Hence we do not find it even prima facie obvious to employ maximum orientation temperatures of only 210°-230° F. Although we would agree with the board that the Schirmer affidavit adds little weight to the case for unobviousness, we do not consider any further evidence of the unexpected nature of appellant’s orientation temperatures necessary.

In summary, the 103 rejection of claims 1 and 2 is affirmed and of claims 3-5, 6-8,11 and 12 is reversed.

Modified.

      . A continuation of serial No. 355,522, filed March 18, 1964.


author: BALDWIN, Judge. MARKEY, Chief Judge.

text:
    Application of Kenneth W. RAREY and John B. Kennedy, Jr.
    Patent Appeal No. 8898.
    United States Court of Customs and Patent Appeals.
    July 19, 1973.

      Vincent L. Ramik, Diller, Brown, Ramik & Holt, Arlington, Va., attorneys of record, for appellants. William H. Holt, Arlington, Va., of counsel.
    S. Wm. Cochran, Washington, D. C., for the Commissioner of Patents. R. V. Lupo, Washington, D. C., of counsel.
    Before MARKEY, Chief Judge, RICH, BALDWIN and LANE, Judges, and ALMOND, Senior Judge.
   BALDWIN, Judge.

This appeal is from the decision of the Patent Office Board of Appeals, adhered to on reconsideration, sustaining the rejection of claims 10, and 12-16 in appellants’ application, on the basis of 35 U.S.C. § 103. Claims 1-9 and 11 have been allowed.

The Invention

The invention relates to an electrostatic printing apparatus which is adequately described with reference to Fig. la and 2, reproduced below, by a passage from appellants’ brief quoted thereafter:

As is shown in Figure la, a developer 10 is comprised of electrically conductive carrier particles 11 and electrically non-conductive toner particles 12. A layer of developer 10 is, in Figure 2, disposed upon an endless conductive belt base electrode 30 in which spaced relation below a stencil screen 16 which itself is spaced below a substrate 25 which is to have an image printed thereon by depositing the non-conductive toner 12 in an image as determined by openings in the stencil screen 16. A power source 52 has its positive side connected to the stencil screen 16 and its negative side to the base electrode 30 to create an electric field between the base electrode and the stencil screen for causing oscillation of the developer 10. During the printing operation, some of the toner 12 is deposited upon the substrate 25 and additional toner 12 becomes accumulated upon stencil screen 16 so that, after two or three prints, stencil screen 16 becomes so contaminated with electrically non-conductive toner that printing operations must be stopped and stencil screen 16 must be cleaned. In this type of printing environment, appellants’ invention resides in the feature of connecting stencil screen 16 to the negative side of a power source 53 and connecting base electrode 30 to the positive side of the power source 53. As a result, an electric field is established between the base electrode and stencil screen but the electrical field is oriented in the opposite direction from the direction of the electrical field which existed therebetween during the printing operation. The net effect of reversing the direction of the electric field causes no change in the oscillation of the carrier particles 11 between the base electrode and stencil screen; however, rather than a printing operation occurring, the toner particles 12 which had clogged the stencil screen 16 are returned to the base electrode 30 leaving the stencil screen 16 free of accumulated toner so that a subsequent printing operation of high quality printing can be immediately effected by once again reversing the direction of the existing electric field. It is preferable that the stencil screen 16 be cleaned between each printing operation * * *, the time actually used for cleaning typically being from 0.1 seconds to 0.4 seconds.

During the cleaning step, after the reversal of the electric field, appellant states that:

the developer particles oscillate vigorously between the screen and belt similarly to their motion during printing. * * The carrier particles mechanically dislodge accumulated toner from the screen when they strike it during the oscilations [sic]. Once dislodged, the electric field carries the toner away from the screen.

Claims 10, 12 and 14 are representative for the purposes of this appeal:

10. In an electrostatic printing apparatus, a base electrode and a stencil screen, a developer comprising electrically non-conductive toner particles and electrically conductive carrier particles, means for depositing said developer upon said base electrode, means for establishing an electric field between said base electrode and said stencil screen for causing said carrier particles to oscillate within said electric field between said base electrode and said stencil screen, and apparatus means for causing toner particles to be returned from said stencil screen to said base electrode subsequent to a printing operation.
12. In an electrostatic printing apparatus as defined in Claim 10 wherein said apparatus means comprises means for reversing the direction of said electric field and means for agitating said stencil screen for dislodging toner particles therefrom whereby the dislodged toner particles are carried by said reversed electric field to said base electrode.
14. In an electrostatic screen printing apparatus, first means for cleaning electrically non-eonduetive toner particles from a stencil screen subsequent to a printing operation, said first means including said stencil screen and a base electrode, a voltage source for establishing an electric field between said stencil screen and said base electrode, and second means for causing toner particles to be freed from said stencil screen and attracted toward said base electrode.

Claim 13 adds to claim 12 that the oscillating carrier particles agitate the stencil screen. Claim 15, dependent on claim 14, additionally recites that the “second means” includes a “third means for agitating” the stencil screen. Claim 16 adds to claim 15 that the “third means” comprises conductive particles for bombarding said stencil screen.

The Prior Art

Watson discloses a method of electrostatically depositing phosphor dots or strips as illustrated in Figure 2, reproduced below:

A picture tube face plate 12, coated with a thin film 14 of tacky material, is positioned above an aper'tured conductive masking plate 10, screen 30, and conductive base plate 16. The base plate is covered with phosphor particles 18. The patent states:

The present invention is based primarily on the tendency of a small particle to oscillate in the electrostatic field between two conductive plates. This takes place because the particle on striking one plate acquires a charge such that it is successively attracted to the other plate. If one plate has a hole in it the particle will eventually pass through the hole in a direction nearly normal to the plate.

The apertures in Watson’s masking plate 10 allow some particles to pass there-through to form dots 22 on the face plate. Watson recites that “[t]he primary function of * * * screen [30] is to break up any agglomerates which may be present in the phosphor.”

Gundlach discloses a xerographic “developer mixture” for use in “cascade” development of an image on a xerographic plate. The plate includes a photoeonductive insulating layer which overlies a conductive backing member. A pattern of electrical charges in the shape of the desired image is formed on the plate. The developer mixture is allowed to flow by gravity or “cascade” across the plate. The developer mixture is made up of generally spherical carrier particles, conductive cylindrical filaments, and non-conductive toner powder. The formation of the visual image results from the adherence of the toner powder to the charged portions of the plate. Our interest centers around the carrier particles which, like the filaments, bear the much smaller particles of toner material. The carrier particles may comprise:

* * * a granular carrier1 material which is of sufficient specific gravity such as glass, sand or steel beads to insure against adherence of the granular carrier material to the image bearing surface as the carrier cascades across the surface being developed. The granular carrier should also have a desired triboelectric relationship to the toner material and if it is not inherent in the carrier material it may be coated or encased in a suitable covering to impart thereto these necessary properties. Generally the particle size of the carrier material should be in the range of from 20 to 200 mesh and preferably between the range of 30 to 100 mesh.

The “desired triboelectric relationship” is clarified by a statement that the carrier material may be:

* * * either conducting or insulating, provided the particles of granular material when brought in close contact with the electroscopic powder particles acquire a charge having an opposite polarity to that of the electroscopic powder particles, such that the electroscopic powder particles adhered to and surround the granular carrier particles. The granular carrier material is selected so that the particles acquire a charge having the same polarity as that of the photoconductive insulating layer of the plate on which the electrostatic image is produced, and an electrical attraction for the electroscopic powder particles considerably less than that of the charged areas of the plate and somewhat greater than the discharged areas of the plate.

The purpose of the carrier particles, which is described in a patent to Wise, is to inhibit the toner powder from forming into balls that streak and smear the image. Gundlach adds the filaments to facilitate complete development (adherence of toner) of large solid areas of the image.

Schaffert discloses an electrostatic printing apparatus as illustrated in Figure 2 reproduced below:

Electrically nonconductive image layer 9 is mounted on an electrically conductive rotating drum 1. A positive charge pattern is formed upon portions of the image layer by corona discharge mechanisms 30-33 and 34-36 such that negatively charged developer powder cascading over the image layer from receptacle 11 adheres to the charged portions. Electrostatic charging means 34a, 35a applies a negative charge to the developer powder to increase the charge on the powder image. Paper 18 from supply roll 19 is passed over the drum in contact with the image layer 9 thereon with charging means 30, 31 applying a positive charge of a sufficient intensity to attract the powder away from the drum and thus transfer it to the paper. Thereafter stripping fingers 21 strip the paper from

the drum. After the paper is so stripped, charging means 44-46 of negative polarity act “to loosen” the excess toner adhering to the drum by “neutralizing the charge” on the power to insure that cleaning means 38 will remove excess powder. Schaffert states “the cleaning means 38 may consist of any suitable wiping instrumentality extending across the image layer of the drum, a suction device, brush, air blast, or other means that would be effective to remove adhering powder from the image layer before the latter is again subjected to a powder dusting operation.”

Childress et al. (Childress) discloses a method and apparatus for electrostatic screen printing which is shown in its simplest form in Figure 1, reproduced below:

Conductive stencil screen 10 is provided to transfer a desired image to the sheet of paper 12. The paper is backed by conductive plate 14. Roller 18 with a felt-like covering 19 is dipped in a toner powder and rolled on the outer surface of the stencil screen. The stencil screen and backing plate are oppositely charged to establish an electric field there-between. The. toner powder contacting the charged stencil screen acquires its charge and is repelled by it and attracted toward the oppositely charged backing plate. The toner collects on the interposed paper in the form of the unmasked area on the stencil screen. Concerning the toner, the patent states:

It has been found that some powder materials are polarity sensitive and will therefore produce better printing for one polarity of voltage on the printing screen. It is believed that the triboelectric charging of the particles is responsible for this effect. The effect seems more pronounced for larger particle sizes of highly insulating particles. However, any suitable pigment powder may be employed, such as, for example, carbon black, dry dye powders, and plastic toner. Particle size and degree of powder dispersion are factors in the charging and migration process. At the present time fine powders 1^10 micron diameter, solid particles are satisfactory with 500 mesh screen stencils.

The Rejection

The examiner considered that it would have been obvious to make the screen 30 and masking plate 10 of Watson integral, such a structure being shown by Childress, and to substitute a mixture of carrier particles and toner as exemplified by Gundlach for the phosphor powder of Watson. The examiner further held that it would have been obvious in view of Schaffert to provide a reverse charge “to any member which carries unwanted powder particles.” The board affirmed the ^examiner’s rejection and additionally stated that “it would be obvious to pass the pigment through the stencil in the Childress et al. device in the manner taught by Watson.” At oral argument appellant effectively conceded that if the combination of the teachings of Watson, Gundlach and Childress in the manner proposed by the Patent Office were valid, then the rejection of the instant claims over those references in view of Schaffert.would be sustainable,

Opinion

We are unable to sustain the rejection either as it was put forth by the examiner or in the alternative form suggested by the board. Whatever combination of the teachings of Watson and Childress is made, we find nothing in the record before us which indicates that it would have been obvious to substitute the relatively large and heavy carrier particles plus toner particles of Gundlach for the toner particles of Childress or phosphor particles of Watson. The smearing problem encountered in Gundlach’s gravity cascade system which induced him to utilize the large, heavy carrier particles obviously would not occur in any stencil apparatus obtained by the combination of the teachings of Watson and Childress. While we doubt that the Gundlach patent would qualify as being in a “non-analogous art” because of the difference in his method, there is certainly nothing in that patent which would suggest that his particles would be useful in a stencil method such as Watson’s or Childress’s. In both Watson and Childress the only particles in the system are those which are to be deposited on the printed surface, viz., the toner or phosphor particles. There is nothing to suggest that the addition of larger particles which never reach the printed surface would be desirable or even useful. In the absence of appellant’s own teachings, one skilled in the art would see no reason to go from a simple system in which only the toner particles need be accelerated, to a more complicated one in which the carrier particles have to be accelerated up to the screen with sufficient force to dislodge the toner particles they carry, which then must continue to travel until they reach the printing surface.

The examiner referred to the following reasoning concerning the rejection of slightly different claims in a previous appeal to the board in the application of which the present application is a streamlined continuation:

[T]he developer of the Watson patent is conductive as noted by applicant and is purely toner particles without any carrier particles. As specifically taught by Watson * * *, this developer will oscillate in an electric field. When a developer or toner is not conductive however, it is necessary to provide some additional means to cause oscillation. This is conventionally done by mixing conductive carrier particles with the toner particles to form a developer which is a combination of both carrier and toner.
To this appellants respond :
Appellants respectfully ask, “conventionally done!-by whom?” Not one of the patents of record teaches or suggests that a combination of conductive particles and non-conductive particles will oscillate in an electric field!

We find ourselves in agreement with appellants. In the first place, the particles in Watson are phosphor particles for deposition on picture tube faces, not toner particles in a printing system. If one were to adapt Watson’s process for a printing system, as by following the teachings in Childress, one would have to choose which type of toner particles to use. There is nothing in this record which would tell the skilled artisan that the toner particles must be conductive. Watson does not even mention whether or not his phosphor particles are conductive. The only desirable attribute the skilled artisan would obtain from the pertinent teachings in Watson, reproduced supra, is that the particles be small. The relevant portions of Childress, on the other hand, indicate a preference for nonconductive toner particles:

It has been found that some powder materials are polarity sensitive and? will therefore produce better printing for one polarity of voltage on the printing screen. It is believed that the triboelectric charging of the particles is responsible for this effect. The effect seems more pronounced for larger particle sizes of highly insulating particles. However, any suitable pigment powder may be employed, such as, for example, carbon black, dry dye powders, and plastic toner. Particle size and degree of powder dispersion are factors in the charging and migration process. At the present time fine powders 1-10 micron diameter, solid particles are satisfactory with®500 mesh screen stencils.

Thus it can be seen that the examiner’s reasoning was based on conjecture, unsupported by this record. Further, in order for the skilled artisan to obtain the system defined by appellant's claims, it would not only be necessary to find the nonexistent teaching that the toner particles must be conductive, but it would also be necessary, in the face of that teaching, to choose not to use conductive toner particles, but instead to use nonconductive toner particles, figuring some way to get them to act as if they were conductive toner particles, as by providing conductive carrier particles for them. If the skilled artisan would have followed this road and used the carrier/toner system of Gundlaeh, we must agree that he would have obtained a system which inherently would behave in the same manner as appellants’, if the voltage were switched between the stencil screen and the base plate. However, the question under the statute is whether it would have been obvious for one of ordinary skill in the art to do so, and on this' record we are convinced that it would not have been.

The decision of the board is reversed.

Reversed.

MARKEY, Chief Judge.

I concur in the result. The rejection on the cited combination of references is in error. No reference discloses means for returning the toner particles to a base electrode.

      . Serial No. 802,747, filed February 17, 1969, 'whieh is stated to be a continuation of Serial 599,822, filed December 7, 1966, now abandoned, as a division of Serial 396,060, filed September 14, 1964, now Patent No. 3,306,193.

      . Patent No. 2,940,864, issued June 14,1960.

      . Patent No. 2,965,573, issued December 20, 1960.

      . Patent No. 2,618,552, issued Nov. 18, 1952.

      . Patent No. 2,576,047, issued Nov. 20, 1951.

      . Patent No. 3,081,698, issued March 19,1963.