By Jon Kinzenbaw, Founder, Kinze Manufacturing
The Blue Vs. Green BattleEditor’s Note: After reading Fifty Years of Disruptive Innovation over a recent weekend and reflecting on the many examples of innovation, passion and perseverance found in Jon Kinzenbaw’s story, No-Till Farmer requested permission to share an except of the book’s content with our subscribers.
What follows is one of the chapters from the recently released book, detailing a "make-or-break" moment in the company’s history and the battle over its innovative work with planters and other equipment.
Because of the fact that many of today’s growers are no-tilling with Kinze planters, we felt our subscribers would be keenly interested in this drawn-out “David and Goliath” legal battle.
The chapter appears here in its entirety, unedited, and in Kinzenbaw’s own words.
— Frank Lessiter, Editor, No-Till Farmer
Above Photo: Courtesy of Kinze Manufacturing
In 1975, a farmer from southern Iowa stopped by my shop and commented that somebody should figure out how to fold a big planter horizontally to make it easy to move from field to field. At that time, twelve-row planters were being introduced, but they folded upward, which resulted in seed and insecticide being spilled from their hoppers. Folding vertically simply wasn’t a good way to transport a planter, and planters larger than 12 rows were too tall and too wide to safely go down the road. Another method competitors used to move planters from field to field was the Donahue Trailer. However, this was extremely time consuming and required farmers to load the planter on a trailer, unhook from the planter, hook up to the trailer and then pull it down the road to the next farm. Once there, the process had to be reversed to resume planting. By the time the field was planted, inevitably the trailer would be in the way of the last pass. So the farmer would unhook from the planter, hook to the trailer and move it out of the way to finish planting, and then repeat the process of loading the planter back onto the trailer to transport it down the road.
The planter is the most important piece of equipment a farmer owns and it is critical to his livelihood. If the crop isn’t planted within the narrow springtime window of favorable weather conditions, the farmer will not have a crop and therefore won’t make any money. If a combine breaks down, the corn will remain standing until it can be harvested and another combine rented or borrowed. If a planter breaks down, the farmer cannot easily rent or borrow another one because every farmer typically configures their planter specifically for their operation.
So even though I had no buyer, I took it upon myself to build the first folding planter. By the fall of ’75, I had tested the first version of a folding 16-row planter. However, it was a semi-mounted version and I wanted it to be a pull-type planter, so I redesigned it during the winter of ’76. This was the design we used after 1976 to build hundreds of rear-fold planters in 8-row, 12-row, 16-row, and 24-row versions. There was clearly a need for a planter that a farmer could fold mechanically from the tractor seat, would be narrow enough to drive down the road to the next farm, and then mechanically unfold to planting position. Folding and transporting a planter this way took very little time and labor.
The rear view of a Kinze folding planter with John Deere row units, 1977.
The first planters were designed to accept International Harvester, Allis-Chalmers, and John Deere row units. All these companies priced their row units individually for sale through their dealers. After a couple of years, however, 96 percent of the rear-fold planters were being built with the new John Deere Max Emerge™ row units. The Max Emerge™ row unit had several features that were highly desirable: a double disc opener, gauge wheels with depth control, canted closing wheels, and the finger pickup meter. So we started buying the Deere row units by the dozens, and John Deere was happy to sell them to us. In the late 1960s and early 1970s it was not uncommon for John Deere management and engineers to stop by my shop in Ladora on their way from Waterloo to Moline. They observed me building Big Blue and watched me manufacture my rear-fold planters. They even encouraged me to paint my planter frame green to match the row units.
We were doing quite well until John Deere offered to pay me a royalty on my folding planter design. It also wanted me to build a prototype planter using their ideas and suggestions. Some of its managers took me out to lunch at the Veeley Restaurant in Moline and offered me $25 per folding bar. Well, that didn’t sound like much for a planter that was selling for $20,000 to $30,000. So I asked them for $100, but they said they couldn’t pay such an “exorbitant” rate.
“In the summer of ’77 we filed a lawsuit against Deere in Cedar Rapids, Iowa, based on the antitrust violations and contrived shortages…”
So Deere and I agreed to disagree, and I continued building planters with the Deere row units. A short time later, near the spring of ’77, there was a tremendous “shortage” of the row units. The John Deere dealer in Grinnell, Iowa, at that time, was one of the dealers providing me row units. It was having difficulty getting the 25 row units I ordered, so I drove over to Grinnell to see why. I sat down with the owner, Dave, and he pulled a copy of the order out of the file drawer. In the top right hand corner was a hand-written note: “Dave, cancel the order for 25 and do not reorder.” I asked for a copy of the paperwork and Dave was really nervous about giving it to me, so he folded the corner down and copied the invoice without the note. When I got out to my pickup, I rewrote the note in the corner as I had memorized it.
Customers were also trying to order row units, as it did not matter to me if they bought row units from dealers or I bought them. Shortly thereafter, Dean Gigot from Garden City, Kansas, a large cattle and irrigation row crop farmer, came to me and wanted four new 16-row planters. We made a deal, and both he and I tried to purchase row units for his planters. While Dean was in Iowa, he went on to Moline to tour the Deere factory and saw mounted planters sitting in the yard at the factory. A few weeks later, it became evident that we were not going to be able to get enough row units for his four planters. When I called him to discuss the situation, he told me about the completed, mounted planters he had seen in Moline. He said he would simply buy eight, 8-row mounted planters, remove the row units and store the frames in his shop until the shortage passed and then resell the mounted planters.
By this time, it was obvious that Deere was shutting off my supply of row units. My attorney, Jim Hill, told me it was a violation of the Sherman Antitrust Act to tie a patentable row unit (the John Deere row unit had five patents on it) to a non-patentable, non-folding toolbar in order to purchase it. In other words, Deere was forcing customers to buy an undesirable planter tool bar in order to get the highly desired row units. It was becoming obvious that things were not going to improve for the next season, so in the summer of ’77 we filed a lawsuit against Deere in Cedar Rapids, Iowa, based on the antitrust violations and contrived shortages. This was a stern reminder to Deere, and we bandied it through the court system for several months.
Deere finally realized it was in trouble, so it agreed to sell me the row units as long as I bought them at full retail prices through its dealerships. That meant I had to pay approximately $1,200 a row, but found I could get a 20 percent discount, which I then turned around and gave half of to the farmer, and used the other half to break even on my overhead costs and loan interest. Amazingly, we were building a folding planter for the same price as the John Deere non-folding, non-flexing 12-row, and that didn’t count the $2,500 the farmer would have had to pay for a trailer to transport the Deere planter. That’s how things went for a year.
I then found a Deere dealer in Roanoke, Illinois, Martin Brothers, which was located near my friend Bill Dietrich’s factory, DMI. For the ’78 season, Bill told me to order 1,000 row units from Martin Brothers and that he would co-sign the order since it was such a large number. He called me back shortly thereafter and said, “I think you can sell 2,000 row units, so let’s increase your order to 2,000 and I will co-sign.” That season we also relied on farmers to buy some of the row units. They bought 3,000 for a combined total of 5,000 row units for the 1978 season. In the summer of 1978, we ordered 3,000 row units and we hoped customers would be able to order 3,000 additional row units for the spring of 1979. As the spring planting season of 1979 approached, Deere sent me a letter saying it was canceling the last 1,000 row units I had ordered due to a shortage, and added, “By the way, there won’t be any row units for 1980.”
Fifty Years of Disruptive Innovation, By Jon Kinzenbaw, Kinze Manufacturing founder, president and CEO
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Around that same time, Deere released its own version of a front-folding bar to compete with mine. Deere forced every dealer to take two of its new planters equipped with Max Emerge™ row units. While Deere had about 5,000 row units for its new frames, it had none for us. I had approximately 150 unsold frames, center sections, wings and towers, but was short the last 1,000 row units for that season and was unable to sell them. For the 1980 season we were once again high and dry without row units, and farmers were going to be deprived of competition that would lower the price of planters.
In 1979, I had borrowed $3.5 million for the ’79 production season. We paid most of it back, but couldn’t pay it all back because of the 150 frames that could not be completed due to the row unit shortage. I went to my banker, John Mangold, at Merchant’s Bank in Cedar Rapids, Iowa, and asked him for another $3.5 million to finance the planter frame production for 1980. Then I announced we were going to tool up and build our own row unit and needed another $1 million for the tooling, dies, jigs and fixtures. In addition, I needed another $3.5 million to pay for the cost of building the new row unit. So, in total, I wanted to borrow well over $8 million with no co-signer or collateral other than the company and a small number of personal assets.
Some of the thousands of row units Kinze purchased from John Deere until the “shortage.”
To thicken the plot, if we failed in our attempt to build our own row unit, it could bankrupt us, and if John Deere prevailed in its lawsuit, that could also put us out of business. I remember telling John Mangold, “If I can get these row units built, I think I can make this happen, but by the way, we will most likely be in a lawsuit with John Deere. I really have no choice. Without any row units, I will be out of business.” Failing at either one of these would shut down the business and cause me to default on the loans. John went to his board of directors and a week and a half later, called me back. He said, “Go for it, we are behind you all the way!”
Years later, I asked John how in the world he justified sticking his neck out for me. Had we failed, it would have likely cost him his position at the bank. He simply grinned and said, “Jon, a banker gets his kicks out of being a part of something like this and seeing a company like yours prevail.” From 1974 until the late 1980s, when John passed away, I had borrowed many millions of dollars, but I doubt I was in the bank more than four times. John always came to the shop to do business because he enjoyed walking through the factory and feeling like he was a part of it. John was a no-nonsense kind of guy, and willing to take a risk on me. I felt God’s hand in this, because what he and his bank did was totally unheard of in the financial world.
“As the spring planting season of 1979 approached, Deere sent me a letter saying it was canceling the last 1,000 row units I had ordered due to a shortage, and added, “By the way, there won’t be any row units for 1980…”
My attorney, Jim Hill, suggested that I copy the Deere row unit in its entirety. He said, “Its patents are invalid and not enforceable due to inequitable conduct, so just copy it, every nut and bolt. Make it exactly the same and find someone with the expertise to help you do it.” So I went to Ron Peck, the general manager of Die-Matic in Montezuma, Iowa, which made automotive parts for Detroit, to help me manufacture the row unit. Ron took the Deere row unit apart in his home and laid out all the pieces on the carpet in his basement. He brought in managers from each of Die-Matic’s five locations and distributed work to all of them. It took 14 months from the time we got Deere’s “shortage” letter to get the row unit ready for the National Farm Machinery Show in Louisville, Kentucky, in February of 1980. It cost us $238 in components plus labor to build our row unit, while Deere was selling its row unit for $1200 list. The only thing we changed was the color — we painted our row units black since we didn’t need them to be green for them to sell.
Prior to showing the Kinze row unit at NFMS, we filed a lawsuit against Deere for its breach of agreement from the ’77 lawsuit. Deere saw our row unit at NFMS and shortly thereafter filed a countersuit against us for patent infringement. A short time later, because my row unit was not yet publicly available, a smooth talking dealer from Illinois showed up at my shop and convinced me he needed one of my row units right away to show at his upcoming open house. Since he was a dealer selling Kinze rear-fold planters, I gave him one and he put it in the trunk of his car. What I didn’t know until later, when it was disclosed during the court battle, was that he took it directly to Deere in Moline.
In late February, I learned that my supplier making the fiberglass row unit hoppers in Grinnell was not able to produce them, which was a very serious situation. We could not sell planters without these hoppers and were only about eight weeks away from planting season. I learned that MFG (Molded Fiber Glass Company), owned by Bob Morrison in Ashtabula, Ohio, made all the hoppers for Deere and International Harvester. This was a very specialized business and a sole supplier of these components for both competitors. MFG also made cab parts, fenders, doors, etc. for semi-trucks. I flew out to Ohio to visit MFG and see if it could build my hoppers.
John Deere’s row unit and the Kinze copy that led to a showdown in court.
Bob informed me that Deere owned the tooling, which cost $180,000 and took six months to build, and that he couldn’t use its tooling for my project. However, he had a new process that he had been using for truck doors that he said we could try. It included an aluminum mold that was quicker and was used for shorter batches. Bob instructed me to go down the road to the John Deere dealership and buy an insecticide hopper and seed hopper and then visit the nearby pattern maker. I did, and the pattern maker and I discussed a modified design for which he would make a reverse wooden pattern, and then MFG would use that pattern to make the temporary tooling for my hoppers. The pattern maker told me it would take him about a week to create the wooden patterns.
I returned to MFG and Bob took me across the street to see his new warehouse. I will never forget the rows and rows of John Deere seed and insecticide hoppers stacked face down on pallets. As I quickly counted the number of rows while asking him how many were on a pallet, I estimated there to be a total of about 40,000 of each type of hopper. Bob asked me why I didn’t buy these hoppers from John Deere and I told him that is what I tried to do. I explained the situation to him and he said, “No wonder we have our warehouses full of these undelivered hoppers. They are cutting production back so they don’t have row units.”
Before leaving at the end of that long day, I gave Bob a $50,000 down payment check to produce my seed hoppers and insecticide hoppers. By the time I got home from the airport that night, there was a message at the office from Bob’s secretary asking me to call him back.
I did and he told me that Deere contacted his sales representative that day and told him that a guy from Iowa might be coming out to visit him and he should not do anything to jeopardize their business relationship. So I gave Bob the phone number for Jim Hill, and asked him to talk to Jim and get a better understanding of the situation. He did, then called me back and said, “Jon, you and I agreed to do business and you wrote me a check. No one, including John Deere, is going to tell me who I can do business with.”
The quarter-scale model that Jon built to demonstrate his folding planter toolbar to the jury.
Amazingly, a few months later in mid-April, we received the completed hoppers. In the meantime, I had been shipping planters to farmers without hoppers, promising I would send them in a few weeks, and no one complained. Later, I asked several farmers why they paid for and took delivery of planters that were useless without the hoppers. Their answers were the same: they were all so tired of Deere creating shortages of tractors and other products to drive up prices, and they were more than happy to support me. For the 1980 season we ended up successfully building 350 planters.
It took three years to get our battle into the court system, but in the meantime, we were building thousands of row units and were selling all we could make. I was sourcing the same tires, rims, bearings and sprockets as Deere, and there were no issues with me getting these supplies, further proof that Deere was contriving the shortage of row units. In preparation for the trial, my attorney advised me to create a separate division of the company that built the row units to insulate the rest of the company, so if we lost, we wouldn’t lose everything. When he asked what I wanted to name it, I said, “Kinze Shortage Specialties Division.”
This was a difficult time in my life. My mom passed away in January of 1982 from a five-week battle with cancer. Ten months later, my dad passed away, also from cancer. The Deere trial started in March of 1983.
When we finally got into court in the spring of 1983, our judge ordered the two cases to be one trial. He said we would go first with our antitrust case, and then Deere would use the same court and jury to follow up with its patent case. Deere’s attorneys complained to the judge that they couldn’t get a fair trial on their patents if we went forward with our so-called “frivolous” antitrust suit. So the judge reversed the order, creating a two-part trial allowing the counter plaintiff (Deere) to go first.
The trial began and inside the courtroom sat our two row units, nose-to-nose. Deere had five patents on the Max Emerge™ row unit which included: depth gauge wheels, canted closing wheels, the finger pickup mechanism, an additional meter patent, and the clutch engaging the meter from the driveline. The trial stepped through each patent individually, going over the physical components, the claims, and reading each patent from beginning to end. One at a time, we presented our case against the patents and John Deere presented its claims against us for infringing its patents.
A gentleman named Waldo Pust, from Billings, Montana, had an invention for a gauge wheel where he moved it further to the rear from the center of the blade. That created a wiping action of the soil from the blade. Deere obtained the rights from Pust, for his thought-to-be invention and filed its patents. However, the original gauge wheel was an attachment for an Oliver planter dating back to the early 1950s. I was made aware of this by one of my employees, Dave Hartz, who had a neighbor with this gauge wheel attachment on an Oliver planter. Dave’s neighbor still had the operator’s manual for the planter which we gave to Jim Hill.
Once Jim was made aware of the gauge wheel attachment, he researched Deere’s patent history documents filed with the U.S. Patent Office. When Deere submitted its claims for this patent to the patent office, it did not mention or show that it was actually an Oliver row unit attachment. Deere led the patent office to believe that it was its experimental row unit because it was green (Oliver was green, too). It was also discovered that Deere cropped off the top half of the picture submitted to the patent office, which would have shown the Oliver decal on the hopper of the row unit.
The patent was invalidated in court due to non-disclosure of the prior Oliver invention. Oliver never patented the gauge wheel, so there was no history of it in the patent office. Even though Oliver didn’t get a patent, it was considered prior art, which invalidated Pust’s patent. Pust’s only contribution was moving the location of the gauge wheel two inches from the original Oliver location. Simply changing distance cannot be patented.
One of the first Kinze rear-fold planters equipped with Kinze row units.
Another issue with the John Deere/Pust patent on the gauge wheels was that it claimed the gauge tire needed to be smaller in diameter than the blade it ran adjacent to. The specific claim stated that the tire needed to be smaller. However, in actual Deere production, the wheel was bigger than the blade, so it wasn’t following the language of its own patent. The Kinze row unit used the same tire and blade, so neither did we infringe based on how the patent language was written.
The blade and tire were used as evidence in the courtroom. When we were done showing it, we laid the tire upside down on the floor by the jury box with the blade placed down inside the tire. This was unintentional, but we quickly saw that every time the jurors went in and out, they walked past this blade and tire and could see that the tire was larger. Based on the size of the wheel alone, the jury ruled that we did not infringe that patent.
In 1981, my dad told me that the Hays corn planter (circa 1930) also had large 30” canted, or tipped, wheels that pinch the seed trench closed in the same fashion as the Deere canted wheels. This was prior art that existed well before the Deere patent on this claim. Even though the Deere canted wheels were about 50 percent smaller in size, this made no difference. The concept had already been in prior use. The Hays corn planter was not disclosed to the patent office by Deere, and thus, that patent was invalidated by the court based on prior use and non-disclosure.
The seed meter was claimed to be Eugene Keeton’s invention. He was from Kentucky and took the concept to Deere in the late 1960s. Deere bought rights to it on a royalty basis and filed a patent. It gave Keeton 50 cents per row for his invention and it was limited to the first 50,000 rows. But in 1945, the Morrison Thesis was written, describing a finger-type pickup that would pick up seed and deposit it through the hole in the back of a seed plate, just like the Keeton claim. Deere chose to ignore the Morrison Thesis, claiming it didn’t know about it.
“There were approximately 20 attorneys plus extra clerks to help carry their documents. In contrast, I had two attorneys and helped carry my own documents. The difference between Kinze and Deere was plain for the jury to see…”
In reality, the patent file history showed Deere did, in fact, present the Morrison Thesis in the documents presented to the patent office, but did not use candor in explaining to the examiner that it was written some 20 years prior. A patent examiner doesn’t have time to research all documents, so they assume and rely on candid, honest disclosure. During the trial, we put the language of the Deere Keeton patent on the overhead that read, “Fingers like the hands of a clock, rotating vertically on a round plate and depositing the seeds through a window in the back of the plate to be dropped in the ground.” The Morrison Thesis was then placed on the overhead beside it and the language was exactly the same.
The court ruled this patent was invalid and fraudulently obtained, a willful and deliberate violation of patent law. In a trial, triple damages can be applied to actions that are willful and not merely an “oversight.”
Another Deere patent claim was for the mechanical clutch device that disengaged the drive shaft from the meter. This allowed the meter to be disengaged from planting seed, and also allowed for the easy removal of the meter from the drive shaft. Deere filed and received a patent, but again failed to disclose the prior art. This was an old idea that had been used on a planting mechanism equipped on a horse-drawn cultivator during the 1930s. The seed mechanism was engaged and disengaged while cultivating, so that seed would be dropped where a plant was missing in the row. Another Deere patent was declared invalid by the court.
A very important practice in securing patents is that an idea must be novel and the patent must be applied for within a year of a public disclosure — meaning it must be treated as confidential. Once an outside person sees it, the one-year countdown begins. The Max Emerge row unit was being tested in the early ’70s with farmers, but patents were not filed for another approximately two and a half years, after it was in the hands of dealers and customers to see how they liked it. John Deere failed to apply for its patents in a timely manner.
During the trial, there were numerous outbursts when witnesses were on the stand, and Deere’s attorneys and various Deere employees and supporters in the audience would try to coach those testifying by making loud whispers or comments. The judge would look up, but could never figure out who was doing it. About midway through the trial, it seemed the judge had enough of the coaching and word got out that he was going to reprimand John Deere for these outbursts. The next morning, apparently unsure of what was going to happen, one of John Deere’s more outspoken attorneys stayed in the hallway and wouldn’t enter the courtroom. We observed him from inside the courtroom, standing with his hands cupped around his face looking in through the glass doors. I figure he didn’t want to be embarrassed and put on the spot if the judge was going to call him on the carpet. It was very amusing to observe this of a man who thought he was so powerful.
The Oliver planter that led to one of Deere’s patents being ruled invalid.
The judge, the Honorable Edward McManus, who originally seemed more receptive to what the Deere attorneys wanted at the start of the trial, seemed more receptive to us after he heard how Deere had deceived the U.S. Patent Office. All of a sudden, if we wanted to get a document in, he allowed it. If we wanted to say something, he allowed us to speak. Deere would object and he would overrule.
The trial went on for four weeks, and day after day, Jim and I used a shipping cart to haul our stacks of documents the three blocks between the old Roosevelt Hotel where we were staying, and the courthouse. On one particularly cold morning in March, we were standing at the stoplight waiting to cross 1st Avenue toward the courthouse. On the other side of the street, the jury was being led to the courthouse by the bailiff. The jury stood diagonally across from us on the opposite street corner.
While we all waited for the lights to change, a black limo came down the street and drove between the jury and us and on up to the courthouse steps where many of Deere’s attorneys got out. There were approximately 20 attorneys plus extra clerks to help carry their documents. In contrast, I had two attorneys and helped carry my own documents. The difference between Kinze and Deere was plain for the jury to see.
At the end of the patent testimony, we went back to the hotel to wait for the verdict. It took the jury of eight Iowa citizens three days and 18 hours to reach a verdict. When the call came in, we were sitting in our hotel room. Jim had developed a chart with all of the questions, and when the magistrate called us and read them back to us, Jim could check each one off as either “yes” or “no” and instantly see how we were doing. Sometimes a “no” was to our favor and sometimes a “yes” was. For 13 reasons, the jury found Deere’s patents as unenforceable or invalid. We just about had to peel Jim off the ceiling. He exclaimed, “We got every one of them with multiple strikes! They have no patents!”
We didn’t realize that we could knock out every patent in that trial, and thought we were going to have to rely on the antitrust part of the lawsuit to avoid a verdict that we infringed the patents. We really didn’t need the antitrust part of the trial at this point. It was March 31, 1983 and Judge McManus called Jim and the Deere attorneys into his chambers and told Deere’s group, “Gentlemen, as you’re well aware, you have just lost validity for every one of your patents. Realizing it’s subject to appeals, I must remind you that tomorrow, we enter into the antitrust portion of this trial, Kinze’s day in court. Do you think that maybe you could get this thing settled and not waste another month of this jury’s and this court’s valuable time?” John Deere’s attorneys almost in unison said, “Yes, sir,” and Judge McManus gave them until four o’clock that afternoon to settle.
Jim came back to the hotel to talk about strategy. We had already come up with a dollar amount of damages for the two or three years that Deere refused to sell us row units. And I added, “I suggest that we double that number and, of course, they’ll want to negotiate. If we can get a 50 percent offer, we will be able to settle.” Jim took the numbers to Deere’s attorneys and they immediately countered with 50 percent of my number. Jim was shocked that Deere agreed so quickly, then wanted to know what my strategy was going to be; do we accept and move on, or do we continue to negotiate? I said, “No, let’s get a little frosting on the cake. Find out how much we have spent in attorneys’ fees and add that on.” Jim called his office and estimated the number was somewhere around $650,000. So we added that on top of their offer.
LEFT: Part of the folding sequence for the Kinze rear-fold planter. RIGHT: Some of the slides shown to the jury to demonstrate the trailering process for a John Deere planter. Thanks to the Driscoll Brothers of Williamsburg, Iowa.
They were reluctant to give me the attorney fees. They said they didn’t have the clearance to spend that extra money and Deere’s CEO was unreachable on an international flight. However, I knew it wasn’t the money. I believe Deere’s attorneys were more concerned with language and didn’t want the public to find out what the company had done. Jim told me, “You know, we really don’t need the newspapers blasting this all over, anyway.” So we left Deere a chance to save face, and offered a secret settlement. Deere also reserved the right to appeal its patents. But four o’clock came and went, and we were still talking about the language. They called the judge, who gave them four more hours. So, back and forth went the memos, and everybody was in a lather trying to get this thing hammered out.
It was awfully tempting to just settle right then and there, but it was a matter of principle, and it made me mad — madder than mad. Deere had excuse after excuse, and I finally said in disgust, “OK. You just keep your money and we’ll see you tomorrow morning in court.” Jim looked at me and said, “That’s a bold move.” “Well,” I said, “if we go in the courtroom, we also stand a chance of getting triple damages, and we’re off to a good start.”
The next day was April 1, 1983. April Fool’s Day. I got on the witness stand, and we began the antitrust portion of the trial. Same jury, same smiling faces, and I picked up a sense, without a word being said, that the jury had already given us the victory. There was friendly eye-to-eye contact back and forth. Jim began his case by asking me about the row unit. I told the jury why I built the row unit, why mine looked like theirs, except it was black and white; why mine had a decal on it that said “Shortage Specialties Division” — a tongue-in-cheek poke at Deere’s “shortage.”
Jim told the jury, “Here’s the deal. It’s obvious that we have copied this row unit. But we want you to see the real reason. We want to show you the Kinze invention. There is a patent — I might add, a valid patent,” he said, emphasizing “valid” for effect, “on this folding frame. And we’re going to show you how this works. But before we show you how this works, we want to show you the way that John Deere moves a planter to and from a field.”
So we showed about 15 minutes of slides in very labored detail of how the Deere planter had to be pulled onto a trailer, and then how the farmer had to:
“Jim Hill told me after the settlement: “This will go down in history as a colossal blunder in the agricultural industry…”
1) climb down and unhook the tractor from the planter,
2) climb back up on the tractor,
3) drive the tractor over to the trailer,
4) back up the tractor,
5) climb down and hook the trailer to the tractor,
6) climb back up on the tractor,
7) drive the trailer into the field near where the planter is sitting,
8) climb down and loosen bolts and chains to unfasten the axle from the trailer,
9) lock the mechanical brakes on the trailer axle,
10) climb back up on the tractor,
11) slide the trailer off its axle and lay it flat on the ground,
12) climb down, unhook the tractor,
13) climb back up on the tractor and back it up to the planter,
14) climb down and hitch the planter to the tractor,
15) climb back up on the tractor and drive across the trailer until the planter is crosswise to the elongated trailer,
16) get off the tractor and unhook the planter,
17) fold each half of the planter hitch around beside the planter frame to make it fit within the width of the trailer,
18) coil up hydraulic hoses and monitor cables for transport,
19) climb back up on the tractor and drive it around to the front of the trailer and back up,
As the Kinze-John Deere drama unfolded between 1977 and 1984, many newspapers and industry trade publications tracked the David vs. Goliath battle. Above is a news article from the Marengo, Iowa, Pioneer Republican, August 16, 1984.
20) get off the tractor and hook the trailer to the tractor again,
21) climb back up on the tractor and back the trailer bed up onto the trailer axle,
22) get off the tractor and fasten axle to the trailer, clamping it on with bolts and chains so it is fastened rigidly under the trailer,
23) release the mechanical brakes on the trailer axle (this sometimes required getting off and on the tractor multiple times),
24) tie down the planter to the trailer with log chains and binders so it doesn’t roll going down the road.
25) At last! You are ready to get back on the tractor and drive out of the gate to go
This entire process took about 30-45 minutes and then had to be reversed at the next field. Once the planter was unloaded from the trailer, you might think you’re ready to plant, but the trailer is parked in the middle of the field and has to be hooked up and moved before planting.
Then we showed a series of slides of how the Kinze rear-fold planter simply folded so the farmer only had to release two latches, then drive forward. I went down on the floor with a quarter-scale model of a 12-row planter and showed the jury how the wings folded and unfolded. I basically spent the whole day testifying or demonstrating. Near the end of the day, my attorney said, “Now, Mr. Kinzenbaw, this planter sells for, give or take, $20,000 for a 12-row. Is that correct?”
“Yes, that’s correct.”
“Now you said the row units were listing for around $1,200. You got a 20 percent discount when you bought these row units. So you’re talking about row units here to the tune of maybe $10,000 or a little more for 12 of them by the time you got them purchased.”
I said, “That’s correct.”
“So then would it be safe to say the bar was between $8,000 to $10,000 for a typical folding bar?”
“That’s correct,” I said.
“So the bar and the row units are priced about the same?”
Again, I said, “That’s correct.”
He said, “You indicated the folding planter is patented. Did Deere ever try to buy this patent from you?”
Well, that question brought guffaws, grunts and objections again from the gallery that were unbelievable. Deere’s attorneys objected and all the attorneys approached the bench. I was close enough — within six to eight feet of them — to hear as they were whispering to the judge why I should not be allowed to answer the patent question. My attorney argued, “This is a very relevant question.” The judge said, “He may answer.”
After they all took their seats, my attorney asked me the question again.
I said, “Yes, they did try to buy it.”
“What did they want to pay you for this $10,000 bar?”
“Twenty-five dollars,” I said.
My attorney said, “Twenty-five dollars?” He gave a bewildered look to the judge and the jury. The jury looked at us. The judge looked at us. Jim said, “That’s a pretty small amount — that is decimal point zero-zero-something percent royalty!”
I said, “Yes, it is.”
He said, “Was that an acceptable offer?”
“Well, then what happened?”
I said, “I counteroffered it to them for $100.”
He said, “A hundred dollars for a $10,000 bar; that’s still a pretty small royalty.”
He asked, “What happened then?”
“Well,” I said, “I’ve always said that’s the day two fools met.” (Not to mention this was April Fool’s Day.) Everybody perked up. I explained, “I’d have been a fool to take a hundred dollars, and they were sure fools not to give it to me.” The jury, even the judge — the whole courtroom — exploded in a roar of laughter. The judge banged on his gavel and said, “Order in the court!” When things calmed down, he said, “Since it is now four o’clock, we will adjourn for the day and reconvene tomorrow morning at nine o’clock.”
By then, John Deere had evidently had enough. That evening, Deere’s attorneys were more than happy to get the settlement finalized. The details of that final settlement were secret, but it did allow them to appeal the verdict finding their patents invalid. We were basically settled and the battle was won. Deere’s patent trial against Kinze lasted nearly a month, during which time we were able to prove that all five of the John Deere patents were invalid. They were either in prior-use, the statute of limitations had passed, or Deere hadn’t told the Patent Office all the facts. The only problem was that Deere appealed it all the way to the United States Supreme Court, so it took money, resources and time to beat Deere five times over seven years before we were finally rid of it.
After the trial, with the ongoing appeals, a lot of people, a lot of dealers, were misled into thinking that John Deere won. In fact, it lost this case hands down. But it was behind us and, ever since, we have built our own row units, and we continue to improve on and build better models of row units and planters.
“This was a pivotal time for our company — we had our backs against the wall and everything on the line — so we had no choice but to press forward…”
Jim Hill told me after the settlement: “This will go down in history as a colossal blunder in the agricultural industry.” Deere used roughly 20 attorneys. Based on the fact that Kinze had two attorneys and spent $650,000, it is safe to assume they spent 10 times this amount with their 20 attorneys that consisted of a mix of in-house attorneys and big name law firms, who didn’t work cheap.
Just based on attorney fees, Deere should have taken my $100 offer. Not only did they lose planter sales, but they lost the row unit sales, too. If Kinze had not been backed into a corner, we wouldn’t have discovered it was possible to manufacture a row unit, because, until then, we hadn’t done that precision type of manufacturing.
About a year after the trial, a local Cedar Rapids woman told us that she was not surprised when Deere lost because she was part of a mock jury trial that Deere conducted prior to the start of the actual trial. Deere wanted to see what its chances were to win this case with jurors from the Cedar Rapids area, so it had attorneys deliver both sides of the case in order to try and predict the actual outcome. Interestingly, the woman said that Deere lost during the mock trial and the jury ruled in Kinze’s favor. These mock jurors were sworn to secrecy, so this did not become public prior to the trial.
Since the big battle with John Deere, there have been other battles because our competitors would like to see us out of the planter business. In 2009, CNH sued Kinze over vacuum meter patents. The lawsuit went to trial in February, 2011, and Kinze proved that it did not infringe on any of CNH’s patents. In addition, we were able to discredit many of the key patent claims that rendered some of CNH’s patents invalid.
During the litigation with John Deere, we learned the value of perseverance. We were very fortunate and blessed to have so many individuals helping us with evidence, and countless other friends and family praying for our company throughout the trial and during the years of appeals that followed. This was a pivotal time for our company — we had our backs against the wall and everything on the line — so we had no choice but to press forward.