Mcelmurry v. Arkansas Power & Light Company

995 F.2d 1576 (1993)

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Nature of the Case

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Facts

D hired Bowman, the patentee, as a consultant to assist in the installation, maintenance, and operation of electrostatic precipitators. Prior to April of 1982, the precipitator hoppers employed a level detector system using a nuclear power source (K-ray system) to detect the level of fly ash in the hoppers. In the early part of 1982, Bowman discussed with D about replacing the K-ray system with a new level detector, an initial design of which they drew on a napkin. The idea was to create a simple vacuum gauge and by monitoring the vacuum gauge, one could determine whether the fly ash exceeded a certain level in the hopper. It proved successful and D ordered that the level detector be installed on a total of sixteen precipitator hoppers. Level detectors were installed both near the bottom and top of the hopper, thus allowing for the detection of the fly ash at two different levels in the hopper. D ordered that the level detectors be installed on the remaining one hundred and twelve precipitator hoppers. The entire project was paid for by D. Bowman formed White Rivers Technology, Inc. with P and a Mr. Johnny Mitchum, to market certain inventions on which Bowman held patents or was planning to seek patent protection. Bowman filed a patent application on the level detector on February 18, 1983, and the patent-in-suit issued on July 9, 1985. Bowman assigned his patent rights to WRT. P got a contract with D for another facility for the detectors but the gauges on the level detectors at this location were connected to a light signaling device and a computer located in the precipitator control room, thus allowing for remote detection of the fly ash level in the hoppers. D again contracted with P in 1985 for yet another project for the invention. P lost the bid but provided all the specifications for installation to the contract winner. D paid all costs associated with their installation. P brought suit against D for patent infringement. The district court granted summary judgment in favor of D on the basis that D had acquired a 'shop right' in the level detector claimed in the patent. P appealed.