## Facts

- Paper Converting owned U.S. Patent No. Re. 28,353 covering a high-speed “sequential” automatic rewinder for producing hard-wound industrial tissue and towel rolls.
- The patented system achieved higher-speed rewinding and improved handling of two-ply tissue compared to earlier rewinder designs.
- The patent remained in force until it expired in 1982.
- Magna-Graphics designed and sold automatic rewinder equipment found by the district court to embody the patented invention.
- Paper Converting sued in 1979 for infringement.
- A key transaction involved Magna-Graphics’ rewinder line sold to Fort Howard Paper Company: Magna-Graphics performed substantial construction and assembly before patent expiration, but the machine was not fully completed or operated until after expiration.
- Magna-Graphics asserted its pre-expiration work was permissible “preparation to compete” after the patent expired.
- The district court held the patent valid, found willful infringement, and awarded $893,064 (including enhanced damages and prejudgment interest), largely based on Paper Converting’s lost profits from two rewinder-line sales, including the Fort Howard sale.

## Issues

1. Whether partial pre-expiration construction and assembly of a patented combination, not yet operable and intended for post-expiration use, can constitute “making” under 35 U.S.C. § 271(a).
2. Whether Paper Converting could recover lost profits on the Fort Howard sale if the accused machine was not completed and operated until after patent expiration.
3. Whether the district court’s enhanced damages and interest award should stand.

## Decision

- The Federal Circuit affirmed liability, holding that Magna-Graphics infringed by “making” the patented invention before expiration through substantial pre-expiration assembly of the Fort Howard line.
- The court rejected a strict “operable assembly” requirement for “making” under § 271(a).
- The court affirmed inclusion of lost profits tied to the Fort Howard sale because the sale was enabled by infringing pre-expiration acts.
- The court agreed the infringement was willful, supporting enhanced damages.
- The judgment was affirmed in part and vacated in part to adjust aspects of the damages/interest computation.

## Legal Principles

- For a combination invention, “making” under 35 U.S.C. § 271(a) can occur before the device is fully operable if the accused infringer assembles essential elements into a substantially unified whole.
- A substantial partial assembly may constitute infringement when it has no substantial noninfringing use other than completion into the patented combination.
- Intent to use or sell only after patent expiration does not immunize pre-expiration acts that amount to “making” the patented invention during the patent term.
- Damages may include lost profits for sales enabled by pre-expiration infringing manufacture or assembly.
- Willful infringement may justify enhanced damages where the infringer knew of the patent and proceeded without adequate precautions or a good-faith noninfringement position.

## Conclusion

The Federal Circuit held that a competitor can infringe by “making” a patented combination through substantial pre-expiration assembly into a substantially unified whole with no substantial noninfringing use, even if final steps and operability occur after the patent expires; it therefore sustained liability and lost-profits recovery for a sale enabled by such pre-expiration activity, while modifying parts of the damages and interest award.


Paper Converting Mach. Co. v. Magna-Graphics Corp., 745 F.2d 11 (Fed. Cir. 1984)