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August 31, 1993

AL-SITE CORP., Plaintiff,
OPTI-RAY, INC., Defendant.

The opinion of the court was delivered by: I. LEO GLASSER

 GLASSER, United States District Judge.

 Plaintiff Al-Site Corp. ("Al-Site") commenced this patent infringement action against defendant Opti-Ray, Inc. ("Opti-Ray"), alleging that Opti-Ray was a direct and contributory infringer of Al-Site's patented hanger mechanism for displaying eyeglasses, U.S. Patent No. 5,144,345 (the "'345 patent"). This case was initially randomly assigned to Judge Arthur D. Spatt, but was reassigned to this Court as related to Al-Site Corp. v. Opti-Ray, Inc., No. CV-91-1770 (ILG). The first action involved an earlier version of the '345 patent: U.S. Patent No. 4,976,532 (the "'532 patent").

 On February 1, 1993, Al-Site moved this Court for a preliminary injunction or, in the alternative, for an expedited trial solely on the issue of patent infringement of the '345 patent. *fn1" This Court scheduled an expedited trial for February 16, 1993, mooting plaintiff's request for preliminary injunctive relief. Tr. of Feb. 1, 1993 Hrng. at 2-4. A three-day bench trial was subsequently held on February 16, 17, 18, 1993. *fn2" In accordance with Rule 52(a) of the Federal Rules of Civil Procedure, this Court makes the following findings of fact and conclusions of law.


 Plaintiff Al-Site

 Al-Site is a Delaware Corporation which manufactures, markets and distributes magnification products, including non-prescription reading glasses, hand-held magnifying glasses and associated accessories. Tr. 140. Al-Site markets its reading glasses under the trade name "Magnivision." PX3, PX4, PX6. Reading glasses are similar to standard eyeglasses but are sold over-the-counter without a prescription. Presently, all fifty states allow over-the-counter sales of reading glasses. Tr. 162. Reading glasses, like standard eyeglasses, are comprised of two lenses for magnification and an eyeglass frame. The eyeglass frame includes two eyeglass rims surrounding the lenses, a nose bridge to connect those rims, and two eyeglass temples perpendicular to the rest of the eyeglass frame to be placed on the ears of the wearer.

 Traditionally, reading glasses were displayed either by placing the eyeglass temples through holes cut into a display case or by folding the temples and placing a single pair of glasses in a cubbyhole or on a hook. Tr. 170; PX3; Tr. of Deposition of Jerome Berliner, dated December 31, 1992, at 23-24. A customer could then choose a pair of glasses at random, try it on and attempt to read an eyesight chart approximately 14 inches away. If the magnification power was satisfactory, the customer could purchase the glasses. Tr. 140-41. However, this individual-stacking system stultified growth of the over-the-counter reading glasses market because a customer could only purchase one pair of glasses of the desired magnification strength at a time. In addition, once a pair of glasses was purchased, another customer would not be able to purchase a pair of glasses of similar magnification strength until the retailer re-stocked the cubbyhole or the hook. Tr. 142-43, 145.

 To solve this marketing problem, Al-Site initially attempted to stack multiple pairs of glasses on a display stand by placing the glasses in plastic packs or blister packs and hanging them from a cantilever. A plastic tray, adjacent to the display stand, contained six sample pairs of eyeglasses, which were attached to the tray with a chain. A consumer could try on a sample by lifting it off the tray until the chain was taut. See PX4. Once the desired magnification strength was discovered, the consumer could select one or more pairs of glasses from the array of blister packs. However, customers were averse to purchasing glasses in blister packs which could not be tried on beforehand. Tr. 146-147.

 To correct the limitations of these earlier marketing systems, Al-Site designed a means for hanging multiple pairs of reading glasses of the same magnification strength in a row which would enable retailers to sell multiple pairs of glasses without replenishing stock and which would allow consumers to try on each pair of glasses prior to purchase. Tr. 149-50.

 On December 11, 1990, the Patent and Trademark Office ("PTO") issued the '532 patent to Al-Site for an invention entitled "Hanger for Displaying Eyeglasses." Subsequently, on September 1, 1992, the PTO issued the '345 patent to Al-Site as a continuation patent of the '532 patent. The '345 patent is identical to the '532 patent except for the claims recited therein. The patent claims of the '345 patent involve a hanger card to be affixed to a pair of reading eyeglasses. The hanger card is a flat piece of relatively stiff plastic with a means for securing it to an eyeglass frame. There is an aperture near the top of the hanger card which enables the card to be shifted along a cantilever, i.e., a horizontal rod extending from a vertical display case. Once a hanger card is affixed to an eyeglass frame, the pair of glasses may be hung from the cantilever, enabling multiple pairs of glasses of the same magnification strength to be stacked and shifted along a single cantilever. In addition, the hanger card contains relevant information pertaining to the style, magnification strength and retail price of the pair of eyeglasses.

 Al-Site began using and distributing the hanger card system in 1988. It has invested $ 3 million to develop that system, to replace existing display racks in retail stores, and to affix hanger cards to existing inventory in retail stores. Tr. 150, 168.

 Defendant Opti-Ray

 Opti-Ray is a New York corporation which markets sunglasses, clip-on sunglasses and reading glasses to retailers in the United States and Canada. Tr. 212. Opti-Ray sells some of its reading glasses under the trade name Optivision. Tr. 217. It also manufactures and distributes glasses under licenses from Mattel, Inc. and Revlon, Inc. Tr. 220-21, 227-28, 233.

 The structure accused of infringing the '345 patent is a hanger card which Opti-Ray uses to display its glasses in its display racks. See PX11A and PX11B. Like Al-Site's hanger card, Opti-Ray's version slides along a cantilever extending from a vertical display. However, unlike Al-Site's hanger card which loops around the bridge of the eyeglass frame, Opti-Ray's hanger card is affixed to a pair of eyeglasses by inserting an eyeglass temple through a slot cut into a wide extension positioned below the Opti-Ray hanger card and then by placing two resilient stickers over the slot. Tr. 216.

 Prior Art

 Cool Ray Catalogs and Physical Specimens

 Until 1976, American Optical Company was the exclusive licensee of a lens developed by the Polaroid Corporation (the "polaroid lens"). American Optical, through its wholly-owned subsidiary Cool Ray, produced and marketed sunglasses using the polaroid lens under the name "Cool Ray Polaroid" sunglasses. Tr. 199. In 1976, American Optical ceased to be the exclusive licensee of the polaroid lens and Cool Ray renamed its sunglasses "Cool Ray Polarized" sunglasses. Tr. 199. Cool Ray then ceased production in 1979 and went out of business in 1980. Tr. 201.

 DX16, DX18 and DX80 are physical exhibits of Cool Ray sunglasses with a patented Seaver pilfer-resistant tag attached. All three of those sunglasses do not have eyeglass temples: they are simply accessories to be attached to a regular pair of eyeglasses. The Cool Ray physical specimens were identified at trial by Clifford Pontbriand, who began working for Cool Ray in 1959 and who was promoted to vice-president and director of Cool Ray around 1966-1967 and continued in that capacity until approximately 1978. Tr. 194-195. He testified that Cool Ray modified the Seaver patent by punching a hole in the pilfer-proof tag, which allowed Cool Ray products to be supported by a cantilever. Tr. 197, 205. Pontbriand also testified that the aperture could be placed above or below the bridge of the sunglasses. Tr. 205-06. His testimony was informative and credible. However, he conceded that none of the catalogs which were disseminated to the public displayed the Cool Ray tag above the bridge of the eyeglasses. Tr. 209.

 DX8 through DX13 are copies of various Cool Ray catalogs. DX8 is a copy of the 1975 Cool Ray catalog and DX9 are selected pages of that catalog. DX10 is a copy of the 1976 Cool Ray catalog and DX11 are selected pages of that catalog. DX12 is a copy of the 1977 Cool Ray catalog and DX13 are selected pages of that catalog. DX14 is a 1980 Cool Ray pricing sheet which depicts four display systems for Cool Ray glasses and one display system for Cool Ray clip-on sunglasses. DX15 is a blow-up of the display rack for clip-on sunglasses and DX48 is an enhanced blow-up of that display rack. Notwithstanding the ...

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