Appendix — Swift Agricultural Chemicals Corp. v. Farmland Industries, Inc.

— 8288

FILED

No.

ALEXANDER tL. STEVAS,

CLERK

In the

Supreme Court of the United States

TABLE OF CONTENTS

PAGE

APPENDIX A la

APPENDIX B 18a

APPENDIX C oo.ccceccsssesveee. 44a

APPENDIX D — 96a

APPENDIX E ...... — - 1

=

APPENDIX A

11351] SWIFT AGRICULTURAL CHEMICALS COR-

PORATION, Delaware corporation,

Plaintiff- Appellant,

v.

FARMLAND INDUSTRIES, INC., a Kansas corpora-

tion and Farmers Chemical Company, a Kansas corpora-

tion,

Defendants-Appellees.

No. 80-2089.

United States Court of Appeals, Tenth Circuit.

March 25, 1982.

Patent holder brought action claiming that defendant

wilfully infringed patent which pertained to production

of liquid ammonium polyphosphate fertilizer from wet

phosphoric acid. The United States District Court for

the District of Kansas, Dale E. Saffels, J., 499 F.Supp.

1295, held that patent was invalid, and patent holder

appealed. The Court of Appeals held that patent No.

3,464,808, was invalid as level of ordinary skill in area

was sufficient that particulars of patent process were

obvious at time of its creation.

Affirmed.

Patents — 328(2)

Patent No. 3,464,808, a process patent which pertained

to production of liquid ammonium polyphosphate fer-

tilizer from wet process phosphoric acid, was invalid

as level of ordinary skill in area was sufficient so that

particular patent process were obvious at time of its

creation. 35 U.S. C. A. 102, 103.

8888

John W. Hofeldt, Haight, Hofeldt, Davis & Jambor,

Chicago, III. (Rolf O. Stadheim, Haight, Hofeldt, Davis

& Jambor, Chicago, III., and John E. Wilkinson, Topeka,

Kan., with him on the brief), for plaintiff-appellant.

Warren N. Williams, Schmidt, Johnson, Hovey &

Williams, Kansas City, Mo. (John M. Collins, Schmidt,

Johnson, Hovey & Williams, Joseph A. Crites, Kansas

City, Mo., and J. Donald Lysaught, Kansas City, Kan

with him on the brief), for defendants-appellees.

Before OW at and DOYLE, Circuit Judges, and

G. .

PER CURIAM.

The appeal herein is from a judgment entered by the

United States District Court [1352] Judge of the District

of Kansas which dismissed a complaint which charged

patent infringement. This action was brought by Swift

icultural Chemicals Corp. against Farmland Indus-

des, Inc., the appéllee herein, and Farmers Chemical

Co., a subsidiary of the Farmland corporation. The charge

was that Farmland willfully infringed the patent of

Swift No. 3,464,808, which was referred to as the 808 or

Kearns patent. This is a process patent which pertains

to the production of liquid ammonium polyphosphate fer-

tilizer from a wet process phosphoric acid.

The trial court ruled that the patent was invalid. The

crucial question in the case is whether the trial court

*Honorable Robert L. Kunzi Judge of the United

States Court of Claims, sitting by designation.

The Honorable Robert L. K tll Raglan

ments in the above entitled case.

subsequent to the arguments and before the within

recor fo he arguments and before te win pn

L. Kunzig passed away, on February 21, 1982. Thus,

he did not vat on — „ —.— within opinion.

members ve in

accordance with 28 U.S.C. Section 46(d). 9

ion i error i

invalid the claims other than those which were in

were in issue.) A third issue is whether the court

in holding that Farmland avoided infringement based

on its argument that (a) it used superphosphorio acid

r

more than one second.

In support of its claim that the trial court reached out

and adjudicated claims that were not in issue, it is pointed

out that the post-trial submissions of Swift charged

Farmland with willful infringement in claims 1, 2 and

patent which discloses a method for making liquid am-

monium polyphosphate fertilizer (referred to as APP.)

The fertilizer contains substantial amounts of nitrogen

and phosphorous, elements essential to plant nutrients.

The fertilizers are often sold in solid granulated form.

However, liquid fertilizers appear to be preferred because

of the ease of application in soluble form and its ready

availability to plants. But the liquid is not free of prob-

lems, as we will discuss.

APP, as the substance is commonly called, is ordinarily

made by the combination of phosphoric acid with am.

monia. What is referred to as the ordinary “wet process”

or orthophosphoric’ acid is low in phosphorus pentoxide.

The formula for this is P.Os. It tends to contain substan-

tial amounts of impurities which occur in the phosphate

rock from which the acid is made. These impurities are

The orthophosphoric aci

id significant

amount of water hydrated to the acid. Se

acid is heated to ive off the water a point is reached’

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merized form. Those phosphates sequester impurities in

solution and form stable compounds that do not precipi-

tate out of solution when the acid is neutralized with

ammonia. One of the weaknesses of this approach is its

high cost. Ordinarily wet process orthophosphorie acid

[1353] is cheaper and so most efforts have been directed

There is no dearth of prior art. All of the patents

deseribe a method which seeks to use the ingredients

so as to avoid the sludge problem.

Discussion of Kearns Patent

The Kearns patent, which is the patent in suit, de-

scribes the use of a pipe shaped jet reactor

**

ing with water to form a liquid APP fertilizer. Thus,

the orthophosphoric acid utilized in this process contains

54%-68% P. O, The process utilizes heat energy provided

during the reaction for the purpose of simultaneously

neutralizing and molecularly dehydrating the acid. At

least 20% of the acids orthophosphates are converted to

polyphosphates during the reaction and the resulting

product has self-sequestered properties. The impurities

present in the acid remain in solution in the APP instead

of precipitating out in the form of gelatinous sludge.

This process has been employed by Swift since 1967.

Its commercial success has not been extensive. The prob-

lems with the product limit its usefulness. Nevertheless,

Swift has prevailed in at least one infringement action

involving the Kearns patent. Its adversary was Usamex,

Inc. See Swift Chemical Co. v. Usamex Fertilizers Co.,

Inc., 197 US.Q. 10 (E.D.La. 1977) (Usamex I); Swift

Co. v. Usamex Fertilizers Co., Inc., 490 F. Su

1343 (E. D. La. 1980) (Usamex II), 47 d, 646 F.2d 1

(5th Cir. 1981).

The time span in which the chemicals come together

is disputed. Swift employs a steam residence’ calculation

for determining the mixing time of the acid and ammonia

and, as noted, calculates residence time at less than

one second. Farmland measures the time that the APP

melt“ itself remains in the reactor, resulting in a melt

residence time greater than three seconds.

The length of the trial was approximately eight Jays.

At its completion the trial court ruled in favor of the

defendants, concluding that the Kearns patent was neither

valid nor infringed by Farmland. The opinion of the

district judge is reported at 499 F.Supp. 1295 (D. Kan

1980).

* For an explanation of the steam residence calculation

see infra pp. 1357-1358.

»The “melt” is the product formed where the ammonia

and phosphoric acid combine.

nasil tis

On the subject of validity, the ruling of the trial court

was.that the patent was anticipated by prior art ond

that it was obvious. Before issuance of the Kearns patent

several other inventors had patented or applied for

patents in processes similar to the 808 patent. The court

focused in particular on methods developed by Young,

Getsinzer and Lutz and Rubio.

The trial court also ruled that even if the Kearns

patent were valid, the Farmland process did not infringe

upon it because the process used by Farmland utilized

superphosphoric acid (68% P.,.) instead of the wet

process orthophosphorie acid 54%-60% P.O; which was

called for by the Kearns patent. Further, the court con-

tinued, the doctrine of file wrapper estoppel was capable

of preventing Swift from claiming that a process in-

volving superphosphoric acid infringed upon the Kearns

process.

During patent prosecution Kearns had represented to

the patent office that the process was distinguishable

from the prior art because it utilized ordinary phosphoric

rather than superphosphoric acid. To be noted is the

fact that the Farmland process entails a residence time

of more than one second. The court found Farmland’s

melt residence method for caleuating residence [1354]

time scientifically more valid than Swift’s steam residence

formula. Based on this difference there was no showing

of infringement.

Swift has advanced five prior art processes which it

seeks to distinguish from the Kearns method; these in-

clude the following: 1) Young, U.S. patent No. 3,044,851;

2) Lutz and Rubio, Patent Application Serial Number

352,764; 3) Hignett, U.S. Patent No. 3,171,733; 4) Bookey,

U.S. Patent No. 3,375,063; and 5) Getsinger, U.S. Patent

No. 3,382,059. These are briefly described below.

The two most relevant inventions to our inquiry are

the Young patent and the Lutz and Rubio application.

The latter failed to receive a patent; the patent office

— 74 —

declared and interference and awarded the patent to

Bookey. Lute v. Bookey, 170 U.S. P.. 594 (Patent Board

of Interference 1971).

The Young Patent, filed 6/9/61, patented 7/17/62

In February 1957 Dr. Young, a chemist with a Ph.D.,

was employed by the Union Oil Company. He had entered

with a good many inventions to his credit. He personally

made a sketch of APP reactor apparatus, which was in

fact built and operated. This sketch depicts a continuous

tubular pipe apparatus and method wherein ammonia

and preheated merchant grade phosphoric acid are simul-

taneously injected into the pipe and produce APP by a

simultaneous neutralization and molecular dehydration

reaction; self-sequestering APP melt is then quenched

with water to yield a self-sequestering liquid fertilizer

product. In the Young process wet phosphoric acid is

first heated in a pressurized tank to dehydrate and con-

centrate it. The acid is then cooled and reacted with

ammonia to produce a self-sequestering liquid fertilizer.

The trial court found and concluded that the Young

method anticipated the current patent even with Young’s

recital of two steps instead of only one, because the

nature of Young’s method was fundamentally the same

as that of Kearns. The lower court found further that

using Swift’s method of calculating residence time the

Young process established a residence time of less than

one second.

The Young patent heats the wet process acid (35-55%

P:0s) prior to the addition of ammonia. The i

of ammonia can be brought about either during or after

the heating process. If ammonia is added during the

heating, it is a one step process because the exothermic

heat of reaction further concentrates the acid; if added

after, it is two steps. The heated acid is concentrated

so that up to 40% of the acid is in the acyelie poly-

phosphate form. This heating drives off water and vola-

tile impurities.

53

The patent was summarized by the trial court as

af

“5. The Young patent, 3,044,851, discloses a process

that is materially identical to that described in the

Kearns patent in suit, No. 3,464,808, in that it dis-

Getsinger filed 7/2/64, patented 5/7/68.

The trial court considered the Getsinger process to be

“materially identical” to Kearns. Getsinger uses wet

process acid with a P.O; content of between 30-54%.

The acid is put in a scruber vessel and partially neutral-

ized with ammonia at a temperature between 250-350

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Hignett, filed 9/8/61, patented 3/2/65.

72%-85% or “super H. PO. (electric furnace acid) or

wet process of 65% 75% is used. Apparently, the process

is marked by no pre-heating. This has been called a three-

then cooling equipment and finally through a screen.

The Hignett process has an agitator in the reactor vessel.

Though the Hignett process has general similarity to

the Swift process, it is much less similar than the methods

of Young, Getsinger and Lutz and Rubio.

tration of the — — form

When a vessel is used agitation is to occur. A

time of one hour was utilized in one of the patent's

examples.

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time. However, Young and Lutz-Rubio have a residence

time comparable to that of Kearns using the Kearns

Final Analysis

From a consideration of the Kearns patent in relation

to the others, we have concluded that Kearns’ use of

residence time is no more than a descriptive analysis of

goes on when the ammonia and acid are allowed

at one end of the pipe to create the melt and

and then uninhibitedly flow out the other end of

along with any unreacted ammonia. The par-

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Kearns hypothesis is incorrect. However, it doesn't

matter in considering the present problem. How the

process works is of importance. Whether the inventor

knows the theory is unimportant.

Deposition evidence at trial was that, based on Kearns’

method of calculating residence time, Young, Getsinger

and Lutz came up with a figure not greatly dissimilar

to the Kearns calculation. Apart from this restrospective

use of Kearns’ residence time formula, the record con-

tains a memo dated February 11, 1964 prepared at Dorr-

Oliver, Inc., Lutz’s employer, where a pipe reactor test

for APP melt occurred using a residence time of a frac-

tion of a second. Because the pipe reactor of the Kearns

process involves a “plug flow” wherein the reactants

are headed in the same direction, and the Kearns patent

does not teach any mechanically induced mixing, agita-

tion or hindering the melt from leaving the pipe of its

own accord, then, at least as to the Young and Lutz

processes, their residence measurements appear credible,

for both of these prior methods use similar pipe reactors,

temperature ranges, and types of acid.

We finally consider the ability to sequester or hold in

suspension, the impurities present in the wet process

acid. This is a crucial feature to the successful storage

and application of APP fertilizer. The sequestration is

best accomplished when the phosphoric acid is dehy-

drated to the point where acyciic polyphosphate forma-

tion occurs. The wet process acid is almost exclusively

orthophosphate when manufactured. Kearns claimed that

his process would achieve at least a twenty percent con-

version of the phosphate in the melt product to the non-

orthophosphate form. The prior art evidenced by Hig-

nett, Getsinger, Young and Bookey contains this desired

sequestration ability and the required polyphosphate

formation is well known. The Young patent and the

Lutz and Rubio application, the most similar processes

to the Kearns method, teach that their processes will

C

Under the Graham discussion, we have examined the

content of the prior art and the Kearns patent and made

the crucial comparisons. We find, as did the district

court, that considering the overlap among the prior art,

the gaps where Kearns has altered the prior art in

some fresh way are few and insignificant to the end

product of self-sequestering APP fertilizer. We agree

with the district court that because of the similarity be-

tween the prior art and the Kearns patent and the ex-

tensive research in this area, the level of ordinary skill

in this area was sufficient so that the particulars of the

Kearns process were obvious at the time of its creation.

have not tried this case de novo on appeal, for such is

nlite Lif

The judgment of the district court is affirmed.

15 n 11

499 F. Supp. 1295

[1295] SWIFT AGRICULTURAL CHEMICALS COR-

PORATION, A Delaware Corporation, Plaintiff,

V.

FARMLAND INDUSTRIES, INC., A Kansas Corpora

tion, and Farmers Chemical Company, A Kansas Corpo-

ration, Defendants,

Civ. A. No. 784153.

United States District Court, D. Kansas.

Sept. 15, 1980.

11296 MEMORANDUM & ORDER

SAFFELS, District Judge.

This is a patent infringement action brought pursuant

to the Patent Statute, 35 U.S.C. § 1, et seg. Plaintiff in

this action, Swift Agricultural Chemicals Corporation

(hereafter Swift) owns a patent for a process in which:

“Phosphoric acid having P:0; content of between

about 55%-65% is reacted with ammonia under con-

ditions that simultaneously neutralize and molecular-

ly dehydrate the acid whereby at least 20% of the

orthophosphate is converted to non-orthophosphate

(polyphosphate) and the resulting ammonium poly-

phosphate possesses self-sequestering properties.

The process, officially designated as U. S. Letters Pat-

ent No. 3,464,808, was invented by one Tommy Carter

ee Exhibit No. 1, Kearns Patent, Col. 1, 11.

13-19.

— 19a —

Kearns, a former. employee of Swift, and will be referred

to as the ser, 1000, A detailed todmtoal”explesation

nada, generally make such intensive use of their tillable

ts

Such fertilizers may be in either solid or liquid form,

and, in addition to their obvious advantages, tend to

share certain negative characteristics. These include a

high cost of manufacture (traditionally attributed to the

necessity of using top-grade phosphoric acid in the man-

ufacturing process), as well as a certain difficulty in ap-

plication, caused by the tendency of chemical impurities

present in the fertilizer to precipitate into a gelatinous

sludge that clogs [1297] storage tanks and applicator

nozzles. The process embodied in the 808 patent is an

attempt to resolve the problems usually attendant to the

manufacture of synthetic fertilizer, since it is designed

to produce in a relatively inexpensive manner a rich

product bearing the capacity to hold in suspension, or

sequester, those chemical impurities which would other-

wise coagulate to make application more difficult. Plain-

tiff claims that defendants have infringed the 808 or

Kearns patent by the unauthorized use of the process

described in the patent.

mmer

discovery by both parties. The parties introduced a very

large number of documents into evidence. The case in-

volves only two essential questions: whether the patent

is valid; and, if so, whether it has been infringed. These

questions, along with related issues, are discussed below.

— 2a —

Pindings of Fact. and Conclusions of Law are separately

stated.

L THE VALIDITY OF THE KEARNS PATENT

A. ANTICIPATION BY PRIOR ART

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Defendants argue that plaintiff’s patent has

ticipated in at least three separate instances.

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vessel No. 6 of the patent, at a preferred temperature

of 400°-500° F.

_ * Defendants’ Exhibit A-3, Young Patent, Col. 13, 11.

* Defendants’ Exhibit C-3.

patent contemplates a tank rather then a jet re-

actor is not a cognizable defense of patentability, since

„method rather than equipment is of crucial impor-

tance in a process patent. Leesona Corp. v. United States,

supra. And simply because reactor vessel No. 6 is not

necessarily depicted as a pipe or “‘jet’’ reactor does

not mean that such a device would be unsuitable to the

Getsinger invention, since the claims of a patent general-

ly are not strictly limited to a device described in the

specifications or depicted in a drawing. Arnold Pipe

Rentals Co. v. Engineering E ises, Inc., 350 F.2d

(5th 1965); Ziegler v. Phillips Petroleum Co.,

The fact that the Getsinger patent utilizes two vessels

which is crucial to the 808 patent occurs in reactor ves-

A third area of dispute between the parties as to the

Getsinger patent concerns the residence time attributable

to the process. The Getsinger patent states that the re-

it would seem clear that there could have been no anti-

cipation of Kearns by Getsinger. The Getsinger patent,

however, defines “retention’’ time in terms of the period

Id, at Col. 10, 11. 73-75.

phate, superheated steam and unreacted ammonia,

is in the reactor at temperatures of between about

450° F. and about 650° F.“

Plaintiff calculates this time period in the following

manner :

The internal volume of the reactor pipe is

rr.

product, principally steam and melt, are determined,

and the former is divided by the latter to give the

residence time.

In analyzing that work which they consider to have

been anticipatory of the Kearns patent, defendants have

Satie ae aden aoe he the

[1299] patent. Graham v. Joh Deore Coy 388, US. 1

36, 86 S. Ct. 684, 703, 15 L.Ed2d 545 (1966). Plaintiff

eontends that crucial elements such as a method for cal-

Id.; tion of J. G. Getsinger, Defendants Ex-

hibit M, I A. HI. Pp. 22 24 and Val I. p. 0.

Defendants Exhibit T-21, Answer to Interrogatory

No. 25.

* Defendants’ Exhibit U-21, p. 3.

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“A person shall be entitled to a patent unless

* Defendants’ Exhibit A, B-1 and C-1.

* Defendants’ Exhibit X-22.

„(g) before the applicant’s invention thereof the

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had not abandoned, suppressed, or concealed it.

[1300] ‘This language has been interpreted to mean

that an abandonment is irrelevant unless it occurred

„before the applicant's invention.“ Allen v. W. I.

Brady Co., 508 F.2d 64, 67 (7th Cir. 1974). In this case,

it is clear that the abandonment of the Lutz application

did not occur until after the Kearns process was pat-

ented. When this fact is considered in conjunction with

the technical similarities which characterize the Lutz ap-

plication and the Kearns patent, it is indeed reasonable

to conclude that the Lutz application constituted antici-

patory prior art with regard to the Kearns patent.

B. OBVIOUSNESS

If it is assumed, in spite of the foregoing discussion,

that the Kearns patent is vital enough to withstand an

attack on its validity based upon the concept of anticipa-

tion, the patent must still contend with the doctrine of

obviousness. The pertinent section of the patent statute,

35 U.S.C. § 103, states in part as follows:

“A patent may not be obtained. if the differ-

ences between the subject matter sought to be pat-

ented and the prior art are such that the subject

matter as a whole would have been obvious at the

time the invention was made to a person having or-

dinary skill in the art to which said subject matter

pertains... .”’

Defendants submit that the 808 patent fails the test

of obviousness for the reason that it is an ineffective

“combination”? patent. A combination patent is one

which draws together in a new format elements from

separate, older inventions. In order for such a combi-

nation of prior art to be patentable, it must be syner-

gistic, that is, resulting] in an effect greater than the

— 27a —

sum of the several effects taken separately. Auder-

son’s-Black Rock v. Pavement Co., 396 U.S. 57, 61, 90

S.Ct. 305, 308, 24 L.Ed.2d 258 (1969); see also, Sakraida

v. Ag Pro, Inc., ae gt wp page treme By very

784 (1976); Great A , P Tea Co. v. Supermarket we

340 U.S. 147, 71 S.Ct. 127, 95 L.Ed. 162 (1950).

question of obviousness is to be determined by the ap-

plication of a three-step analysis:

1. What is the scope and content of the prior art?

2. What differences exist between the prior art and

the claims at issue?

3. What is the level of ordinary skill in the pertinent

art?

See Graham v. John Deere Co., supra, 383 U.S. at 17,

86 S. Ct. at 693. Our previous discussion on the issue of

anticipation should be helpful to our analysis of these

points.

The prior art in this case is characterized by the

Young and Getsinger patents, as well as the Lutz appli-

cation. As we have seen, both the Young patent and the

Lutz application depict a pipe“ or jet reactor, and

although the Getsinger patent does not literally describe

such a vessel, it is not therefore precluded from the

adoption of such a device. Arnold Pipe Rentals Co. v.

Engineering Enterprises, Inc., swpra. There can be no

reasonable dispute as to the fact that essentially the

same chemical reaction takes place in all three of these

rere

times in question, measured by the standard of

patent. fall within a one-second limit. Each of

sential) claims of the Kearns patent, then, are to be

found in the

prior art.

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Court that the method or process claimed by Kearns

ithin the knowledge of the average artisan in the

field, a conclusion which mandates a finding that the

Kearns patent is invalid for obviousness. See Concrete

Appliances Co. v. Gomery, 269 U.. 177, 46 S.Ct. 42, 70

L.Ed. 222 (1925); Novo Industrial Corp. v. Standard

Screw Co., 374 F.2d 824 (7th Cir. 1967).

Il. INFRINGEMENT

Assuming arguendo that the Kearns patent is valid,

points in response to plaintiff’s charge: first, that de-

fendants’ process is to be distinguished from that of

plaintiff upon the ground that the former utilizes super-

phosphoric acid, while the latter restricts itself to the

use of phosphoric acid; second, that the residence time

of defendants’ process is greatly in excess of that

claimed by the 808 patent; and, third, that plaintiff is

to assert a claim of infringement in this action

by operation of the legal doctrine of file wrapper estop-

pel.

A. SUPERPHOSPHORIC ACID

The record in this case is replete with seemingly end-

less discourses on the mening of the terms ‘‘phospho-

rie“ and ‘“‘superphosphoric’’ acid, and on the question

of whether or not the residence time of defendants’ pro-

cess exceeds one second. To the uninitiated, such dis-

cussions would appear to have as much relevance as a

debate among medieval philosophers upon the question

many angels can fit on the head of a pin. In a

case such as this, however, such evidently trivial points

take on far-reaching significance,

phoric acid is made by further evaporation of 54%

P.O; phosphoric acid to about 70% P. O.. Superphos-

phorie acid, having a large percentage of its phos-

phate in the non-ortho form of which a large por-

tion is in the pyro form, can be neutralized with

ammonia in aqueous solutions without the metal ion

impurities precipitating. However, superphosphoric

acid is a premium chemical as [1302] large amounts

of free and molecularly combined water must be

evaporated from regular phosphoric acid. Further-

more, when superphosphoric acid is reacted with am-

monia, the reaction is quite exothermic and heat

must be subtracted from the system? [Emphasis

supplied. }

The patent goes on to declare that:

Still another object of this invention is the elimi-

nation of the costly step of making superphosphoric

acid in producing a non-precipitating liquid ammo-

' sium phosphate fertilieer. (Emphasis supplied.

ae Exhibit 1, Col. 2, 11. 42-57 (emphasis sup-

Id., Col. 3, 11, 13-16 (emphasis supplied).

*

Furthermore, throughout the patent, Kearns used the

adjective phosphorie to describe the acid used in his

process. Thus, the Abstract of the Disclosure states:

“Phosphoric acid having P.O, content of between

about 55%-65% is reacted with ammonia .. .’™

[Emphasis supplied.

And when listing the objects of the patent, Kearns

claims :

A further object of this invention is to provide

a method whereby liquid ammonium polyphosphates

of analysis higher than 10-34-0, and derived from

ee ne [Emphasis sup-

Finally, claim one of the patent declares:

A process for preparing ammonium polyphos-

phates having self-sequestering properties compris-

ing: e

actor; supplying a stream of phosphoric acid .. .’™

{Empbasis supplied. |

Apart from any considerations of estoppel, a matter

which will be dealt with below, the most reasonable con-

clusion to be reached from all of this is that Kearns

drew a definite distinction between “phosphoric’’ and

“superphosphoric”’ acid, and that having made such a

distinction, he wished to make it clear that his process

was designed to utilize phosphoric acid. Since that is the

case, defendants infringe the ‘806 patent only if they

teo use phosphoric acid.

How is ‘‘superphosphoric’’ acid to be defined The

evidence on the point is conflicting in this case. The

1 Id., ., Col. 1, 11. 13-14 (emphasis supplied).

Id., Col. 3, 11. 9-12 (emphasis supplied).

Id., Col. 8, 11. 15-18 (emphasis supplied).

The starting acid used by defendants therefore

pears to fit the superphosphorie“ definition, at least

as to polyphosphate content. What of the P.O; level of

the acid? Looking to the Kearns patent, once again, we

find that superphosphoric acid is defined as having a

P.O; content of about 70%.’ The evidence as to the

e term “about 70%’’ is naturally onfliet-

sense approach. [1303] Plaintiff has cited defendants’

acid as having a P.0; content of 68%.” This is docu-

mented by defendants’ company records, introduced in

* Defendants’ Exhibit F; Plaintiff’s Exhibit 1, Col. 3,

11. 25-27.

* Testimony of Ra 3 , 11. 17-18;

Testimony of W. E. Rushton, Tr. p. 382 11. 14

*Plaintiff's Exhibit 25.

* Plaintiff’s Post-Trial Reply Brief, p. 9.

* Plaintiff’s Exhibit 1, Col. 2, 11. 46-48.

* Plaintiff’s Post-Trial Reply Brief, p. 9.

117

B. RESIDENCE TIME

is 7270

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steam involved. One looks in vain for such a formula.

Secondly, although plaintiff now maintains that its defi-

nition of residence time has always been based on the

time required for adequate mixing of the reactants, and

that the residence period of the steam is simply the

best measure of that time, such a distinction, if there

be any, has not been made apparent to the Court.

7 F

when the question of residence time was the

ry, plaintiff's counsel persistently developed

theme that its method of measurement was correct,

according to its theory the melt was entrained

and traveled at the same speed. Such an

is only directed at refuting a contrary position

defendants; it does nothing to establish that

dence time is actually to be measured in terms of

the time necessary to adequately mix the reactants. Fi-

nally, plaintiff has been sharply critical of certain tests

made by defendants’ expert witness, Dr. Busot. Plain-

declared the tests to be inaccurate and unscien-

tests, conducted by Dr. Busot in order to de-

termine the residence time of the melt in defendants’

apparatus, showed generally that the residence time of

defendants’ process is longer than one second. But, al-

though plaintiff has criticized the method, assumptions

and conclusions of Dr. Busot, the fact remains that de-

fendants are the only parties in this suit to have con-

any tests relevant to the issues in the case. To

the knowledge of the Court, plaintiff conducted no such

tests of either defendants’ or its own equipment. Plain-

tiff’s only evidence on the question of residence time

consisted of calculations made by one of its experts, with-

out the benefit of any actual experimentation.

The Court has previously concluded, on the issue of

the validity of the Kearns patent, that more than one

viable method of measuring residence time is available

here. We believe that the same conclusion is applicable

to the question of infringement as well. Defendants’ pro-

cess does not infringe the 808 patent, because the resi-

4811

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— 882 —

dence time of the ammonium phosphate melt is more

than one second. Defendants’ experimental evidence as

to residence time indeed may [1304] have been scientifi.

cally weak; plaintiff, however, offered no experimental

evidence to refute that of defendants, and the * *

i ar

guments of plaintiff’s counsel or the testimony of plain-

tiff’s expert witness, grounded as that testimony was

upon abstract calculation and theory.

C. FILE WRAPPER ESTOPPEL

The doctrine of file wrapper estoppel may be stated in

the following manner: x

. . . the essence of the doctrine is that a patentee

may not expand his allowed claims by interpretation

to embrace features which he disclaimed in order to

overcome objections by the Patent Office on the basis

of prior art disclosures. ... ’’ McCullough Tool Co.

v. Well Surveys, Inc., 343 F. 2d 381, 403 (10th Cir.

1965).

File wrapper estoppel may arise from an applicant’s

conduct, including arguments made to the Patent Office,

during the prosecution of his patent application. CMI

Corp. v. Metropolitan Enterprises, Inc., 534 F.2d 874

(10th Cir. 1976). The doctrine comes into play in any

situation in which the patentee, as a consequence of the

fact that the accused process does not read directly upon

Sas ahalones off the. patel te, talk, to Ooveed ta tale ab Oe

doctrine of equivalents, an accused process may infringe

in spite of the fact that it does not read literally upon

the patent in suit, if it can be shown that it does the

same work as the patented invention in substantially the

same way and accomplishes the same result.

Plaintiff 's position on the question of file wrapper es-

toppel is that the doctrine has no application in_ this

case. Plaintiff holds firmly to the argument that:

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(C.C.P.A. 1978). [Emphasis supplied.)

See also, CMI Corp. v. Metropolitan Enterprises, Inc.,

supra.

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invalid, but also that even if it were valid there would

be no infringement of it by defendants’ process. The

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THE

14411

IV. — OF FACT and CONCLUSIONS OF

A. FINDINGS OF FACT

1. This Court has jurisdiction over this action for

t of a United States Patent, under 28 U.S.C.

§ 1338(a), and venue is proper under 28 U.S.C. 4 1400(a).

2. Plaintiff Swift Agricultural Chemicals Corporation

(now known as Estech General Chemicals Corporation)

IA en ee ee Pee Soe oe

business in Chicago, IIlinois.

3. Defendant Farmland Industries, Inc. is a Kansas

corporation having its principal place of business in

Kansas City, Missouri.

4. Defendant Farmers Chemical Company, a wholly

owned subsidiary of Farmland, is a Kansas corporation

having its principal place of business in Joplin, Missouri.

5. The Young patent, No. 3,044,851, discloses a pro-

cess that is materially identical to that described in the

Kearns patent in suit, No. 3,464,808, in that it discloses

a continuous reaction between phosphoric acid and am-

monia, in a tubular reactor, at a temperature of between

450° F and 650° F, with a residence time of less than

one second, involving simultaneous neutralization and

—éla—

7. The application of Lutz and Rubio, Serial No.

352,764, discloses a process that is materially identical

ing — 1

times rele-

L 8 = oe

ction, Thay letloks that tho chs anthonn io the COA

prior to the filing of the Kearns application, had suffi-

cient knowledge of his art to enable him to combine all

of the limitations claimed in the 808 patent.

9. The Kearns patent in suit disclaims the use of

ric acid as a starting acid, and makes clear

that said starting acid is composed of phosphoric acid.

One of the advantages claimed for the 808 patent is

stated to be the elimination of the expensive step of

making superphosphoric acid in the production of liquid

fertilizer.

10. The Kearns patent in suit claims a residence time

for the reactants in the reactor of less than one second.

The patent does not disclose how its contact period or

residence time of less than one second is to be measured.

[1307 11. As a result of statements in the patent

- l P

13. The method by which defendants measure the

residence time of the reactants in their process is based

on the notion that the products of the reaction move at

different speeds relative to each other. Defendants have

dence time of defendants’ process is more than one

second.

14. No evidence was introduced in this case which

would show that the method of measuring residence time

used by defendants in connection with their own reactor

was inappropriate to the reaction in question, or that

such method was unavailable to engineers, chemists,

physicists, patent attorneys and others skilled in the art

at the time of or prior to the filing of the Kearns ap-

plication.

15. Defendants utilized a definition of residence time

developed by plaintiff to measure the residence time of

certain other analogous processes for the manufacture

of ammonium phosphate fertilizer. There was no show-

cists, patent attorneys and others skilled in the art at

the time of the development of the analogous prior art

processes.

16. Defendants’ use of superphosphoric acid 1

side the scope of the claims found in the Kearns patent,

8

17. The residence time of the defendants’ process,

since it exceeds one second in duration, is beyond the

scope of the claims of the Kearns patent.

B. CONCLUSIONS OF LAW

1. Plaintiff is estopped to assert that the claims of

U.S. Patent No. 3,464,808 are broad enough to

encom-

pass the use of superphosphoric acid, swing to represen-

tations made to the Patent Office during the prosecution

of the application.

2. By reason of anticipation by the prior art, pur-

suant to 35 U.S.C. 5 102, all of the claims of U.S. Pat-

ent No. 3,464,808 are invalid.

3. By reason of obviousness, pursuant to 35 U.S.C.

§ 103, all of the claims of U.S. Patent No. 3,464,808 are

invalid.

4. If U.S. Patent No. 3,464,808 was a valid patent,

it is not infringed by defendants’ commercial processes,

in view of the fact that the residence time of the chemical

reaction in defendants’ commercial processes is more

than one second in duration, and therefore exceeds the

residence time claimed for U.S. Patent No. 3,464,808.

5. If U.S. Patent No. 3,464,808 was a valid patent, it

is not infringed by defendants’ commercial processes,

in view of the fact that defendants’ commercial processes

use superphosphoric acid, whereas U.S. Patent No. 3,464,-

808 is limited to the use of phosphoric acid.

Counsel for defendants are directed to prepare, cir-

aa ee

flect this Order.

IT IS SO ORDERED.

[10] 197 USPQ 10

District Court, E. D. Louisiana

Swift Chemical Company

v.

Usamex Fertilizers, Inc., et al.

No. 74-46 Decided Oct. 7, 1977

{12] Sear, District Judge.

This is an action for infringement of U.S. Patent 3,

464,808 (hereinafter referred to as the 808 patent), en-

titled ‘‘Manufacture of Ammonium Polyphosphate from

Wet Process Phosphoric Acid’’ owned by plaintiff Swift

Agricultural Chemical Company (Swift). Defendants

Usamex Fertilizers, Inc. (Usamex) and Fertilizantes

Fosfatados Mexicanos, S.A. (FFM) have denied infringe-

ment and have asserted as affirmative defenses, that the

patent is invalid on various grounds, and is unenforce-

able by reason of alleged fraud on the part cf plaintiff

during prosecution of the application which resulted in

the patent.

By counterclaim, and as affirmative defenses, defen-

dants further assert that the 808 patent is unenforce-

able because plaintiff has misused it as part of a plan

to illegally restrain trade in interstate commerce, and

has thereby or otherwise violated the antitrust laws of

the United States. Trial of these issues has been severed

and stayed pending determination of the infringement,

validity and fraud issues.

—

I. Jurisdiction

The suit arises under the patent laws of the United

States, 28 U.S.C 1338, and venue is proper in the East-

ern District of Louisiana.

monium polyphosphate (‘‘APP’’) made by the process

e eee e eee ge

II. The Patent

The invention of the 808 patent was made by Tomm

Gund of the Ugdd: Sustiiear —

* Plaintiff’s Exhibit 1.

the method involves a direct ammoniation of orthophos-

phorie acid in such a manner that the exothermic heat

of the reaction supplies the energy requirements to

molecularly dehydrate the acid, i.e., convert a substan-

tial portion of the orthophosphates to polyphosphates

without formation of appreciable quantities of highly in-

soluble iron tripolyphosphates and metaphosphates.

IV. The Basic Technology Involved

Fertilizer is normally characterized by an N-P-K anal-

ysis, i. e., the percentages of nitrogen, phosphorous (ex-

pressed as P,O;) and potassium (expressed as K.0) con-

tained in it. The 808 patent concerns the combining of

the first two of these plant nutrients. For example, the

nominal 10-34-0 product referred to in the patent would

contain about 10% nitrogen and about 34% phosphate.

The source of the nitrogen is ammonia (NH,). The

source of the phosphate is phosphoric acid (H. PO,).

Phosphoric acid is commercially available in three

forms. Each is derived from phosphate rock mined in

various locations throughout the world. The degree of

concentration of acid solution in each is normally ex-

pressed in terms of its phosphorous pentoxide (5.050

content.

The phosphate rock from which phosphoric acid is de-

rived contains impurities. These impurities inelude rela-

tively large amounts of iron oxide or its hydrates, as

well as aluminum and other metal salts and oxides. Total

i

E

f

ic

ail

He

nace is

T

virtually no metal impurities. It is very expensive and

— 47a —

this fact has deterred its use in the manufacture of fer-

tilizers.*

The second and third forms of industrial phosphoric

acid are produced by the so-called wet process“ meth-

od. Ordinary or merchant grade “wet process acid’’ is

usually concentrated to a P.O, content of about 54% of

the solution. By further concentration, through evapora-

tion of free water from the solution, the P:0, content

may be raised up to about 68%.

In the second form of industria) phosphoric acid,

wherein the wet process acid is concentrated to a P. 0.

content of about 54% to about 58%, the phosphates are

substantially in the non-polymerized or ortho form, and

there is little if any non-ortho or polyphosphate forma-

tion. Such acid is sometimes referred to as “orthophos-

phorie acid’’ and, because it is the least expensive of

the three forms, it is a desirable source of phosphorous

for the fertilizer industry.“

In the third form of industrial phosphorie acid, wet

process acid is subjected to high heat sufficient to eva-

porate water which is molecularly combined with the

acid. After such molecular dehydration, the P.O, con-

tent will be about 70% higher. And as a result of the

molecular dehydration, a substantial proportion of the

orthophosphates will polymerize or be converted into the

non-ortho or polyphosphate form. This acid is referred

to as superphosphorie acid’’. It is expensive.“

In wet process acid, whether orthophosphoric or super-

phosphoric acid, some of the metal impurities which erig-

inated in the phosphate rock remain dissolved in the

strongly acidic solution. So long as the acidity is main-

tained and the impurities remain in solution, they pre-

sent no significant problem. When wet process acid

* Uncontested fact 18.

: Uncontested facts 14-17.

Id.

a liquid plant food, however, the solubility of impurities

‘as iron and aluminum compounds is affected and

potential are presented. In neutral or near

neutral m, the iron and aluminum impurities tend

to come out of solution and form a gelatinous, sludge-

like precipitate. This precipitate will settle and clog the

c

the fertilizer solution.“

The desirability of liquid fertilizers, as opposed to

dry granulated products, has long been recognized. The

advantages of liquid fertilizers include (a) ease of dis-

tribution and application to crop lands through conven-

tional pumping and spraying methods, (b) better homo-

geneity of plant nutrients within the fertilizer product,

(e) elimination of difficulties due to dust and caking

which are characteristic of dry products, (d) more effi-

cient application to roots and foliage of the crop, (e) im-

proved solubility and availability to the plant, (f) im-

proved capability for blending with other fertilizer and

i chemicals such as micronutrients, pesticides

and herbicides, and (g) higher crop yields.“

The advantages of liquid over dry fertilizers could

not be fully realized unless the fertilizer solutions were

substantially free of gelatinous sludge-like precipitates

such as are formed by iron and aluminum impurities.

Moreover, the analysis of the fertilizer solutions should

be high, i.e., at least 10% nitrogen and 34% phosphorus,

and the cost of the liquid mixtures should be competi-

* Plaintiff’s Exhibits 3, 8, 22, 23, 27, 76; Testimony of

Raymond L. Waters. |

.* Plaintiff’s Exhibits 8, (3-4), 124 (627-628), 215 (19-

20) 5 Testimony of Raymond L. Waters and Everett N.

— 8a —

tive with comparable high analysis dry fertilizer mix-

precipi

Tennessee Valley Authority (TVA), which instituted a

National Fertilizer Development Center at Muscle

Shoals, Alabama in 1964. Between 1964 and 1968, TVA’s

efforts were confined to developing a two stage process

first described in U.S. Patent No. 3,382,059 issued to

J. G. Getsinger* (hereinafter referred to as the Getsinger

patent). The Getsinger patent describes a process

which wet process phosphoric acid is concentrated

ene eee SS ee eee

reacted with ammonia in a second stage tank. The com-

mercial development of the Getsinger process rocess was ham-

pered by the failure to effectively eliminate from the

process the formation of undesirable insoluble iron and

aluminum polyphosphate compounds.’

The 808 patent in suit developed by Kearns purports

to solve the problems of the TVA process. Its objectives

are:

2

. . . to produce an ammonium polyphosphate which

possesses metal iron sequestering ability when dis-

solved in an aqueous system.“

2 „ „ production of ammonium polyphosphate

* Plaintiff’s Exhibits 3, 8, 22, 23, 24, 80, 126, 127, 128A.

* Defendants’ exhibit 34.

* Plaintiff’s exhibits 126-128.

. the elimination of the costly step of making

superphosphoric acid in producing a non-precipita-

ting liquid ammonium phosphate fertilizer.’’”

The process is defined in the patent claims:

1. A process for preparing ammonium polyphos-

phates having r properties comprising :

content of between about 50% and about 69% to

said jet reactor and contracting said stream of am-

monia with said stream of phosphoric acid in said

reactor at temperatures of between about 450°F.

and about 650°F. for a period of less than one second

to form molten droplets of ammonium polyphos-

phate.

at The method of claim 1 wherein the droplets of

molten ammonium polyphosphate are subsequently

quenched.

**3. The process of claim 1 wherein the P. O, con-

tent of the acid is between about 60% and about

62%.’’

4. The process of claim 1 wherein at least 50%

of the orthophosphate in the acid is converted to

nonorthophosphate.

115 Tue process of the patent in suit enables the direct

ammoniation of wet process, orthophosphorie acid to

produce, in a single and virtually instantaneous reaction,

molten ammonium polyphosphate which when quenched

in water forms a stable high analysis fertilizer solution

having self-sequestering properties and which is free

from insoluble polyphosphate compounds such as iron

| and metaphosphate. The apparatus re-

quired to carry out the patented process is relatively

simple and inexpensive, and has long been known and

readily available to those working in the field.

„ Plaintiff’s exhibit 2, col. 3, lines 1-16.

“Td. (Col. 8, lines 14-41).

A signifies... feature of the process is that the am-

monia and phosphoric acid are contacted in a reactor at

a temperature of from about 450°F. to 650°F. for a

e

formation of undesirable insoluble iron and alumninum

polyphosphate compounds.

In order to provide for such extremely brief residence

time at high temperature, the patent requires the use of

an elongated, open-ended pipe in which to contact the

ammonia and phosphoric acid as opposed, for example,

to a tank or other such reaction vessel. The patent des-

cribes the reaction pipe as a jet or jet reactor’’, and

the process is sometimes referred to as a jet process

Kearns filed his application for the patent in suit on

August 18, 1965, and it was issued on September 2, 1969.

In 1967-68, Swift introduced on the market its high

analysis liquid ammonium polyphosphate fertilizer prod-

ucts and since that time, has successfully operated the

process at plants in Memphis, Tennessee, Mt. Pulaski,

4 Uncle Sam, Louisiana and, currently, at Bartow,

orida.”

The first description of the Kearns-Swift process of the

N

ber, 1967, when a Swift patent corresponding to

Kearns U.S. application was published in France.” —

oriptions of the process were first published in the United

States in the July, 1968 issue of Chemical Abstracts and

in September, 1968, in a TVA publication entitled Fer-

* Plaintiff’s exhibits 9, 11; testimony of Raymond L.

Waters.

* Plaintiff’s exhibit 12.

the intermediate step of ucing superphosphoric acid

and was monitoring the search efforts at TVA.“

In October, 1968, representatives of Ferguson attended

— to that described in the "808 patent.”

“ Uncontested fact 41; plaintiff’s exhibits 12, 15, 16.

“ Plaintiff's exhibits 127, 128.

“ Plaintiff’s exhibits 17, 18.

* Plaintiff’s exhibits 205, 211.

“ Plaintiff's exhibit 128.

” Plaintiff’s exhibit 20.

1

*

f

4

:

HME

i

17

4

1

F

5

In the initial stages of its production of the Poly Aetor

Phase IV process, it was Ferguson's intention to grant

licenses for use of the process to customers who purchased

Ferguson equipment. During the summer of 1969, how-

ever, these plans were abandoned. Ferguson became

aware of Swift’s French patent and, upon inquiry, learned

that the 808 patent was about to issue. Rather than

compete with Swift, Ferguson decided to sell outright

whatever rights it had to the process and the pending

Schenewerk patent.“ By November, 1969, Ferguson and

” Plaintiff’s exhibits 22, 23, 26, 27, 206, 210.

* Plaintiff’s exhibits 25, 28, 210, 221.

* Plaintiff’s exhibits 31, 93, 205, 208.

* Plaintiff’s exhibit 203.

* Plaintiff’s exhibits 34, 35.

* Plaintiff’s exhibits 32, 36, 206.

FFM were actively negotiating the sale of the process

and the pending patent application.“ Having been ad-

vised by Ferguson of the existence of the 808 patent,

FFM attempted through the employment of patent coun-

sel to determine whether the Ferguson process would

infringe it.”

While potential infringement was being investigated,

FFM proceeded with its plans to buy the process and

Having obtained a legal opinion that the PolyActor

Phase IV process would not infringe the Swift patent,

FFM proceeded with the purchase of the plant scale

equipment that Ferguson was erecting at Atchison, Kan-

sas and the Schenewerk patent application for $85,500.00

conditioned only on the success of the performance tests

at the Atchison plant.” To manufacture and market the

liquid fertilizer product, FFM formed Usamex as a wholly

owned United States subsidiary.” A site for the new

plant at St. Rose, Louisiana was chosen and Burns was

* Uncontested fact 47.

‘ * Plaintiff’s exhibits 40-44, 4649; defendants’ exhibit

* Plaintiff’s exhibits 53-56, 61-63, 66.

* Plaintiff’s exhibits 53, 61.

Plaintiff's exhibits 57-60.

.

f

He

25

|

ils

a3

equipment

rn to Usamex in exchange for Usamex’s com-

By January, 1971, the equiment was installed

t at St. Rose.“

11 Usamex abandoned the prosecution of

patent“ and a second application, similar

Schenewerk application, was filed in the name of

V. B * The Burns’ application was permitted

issued as U.S. Patent No. 3,734,708 on May 22 1973."

y March, 1971, the Burns process was in operation at

the St. Rose plant and has been used to manufacture

liquid fertilizer at the plant up to the present time.”

II

115

tt

F

|

ati :

V. Plaintiff’s Contentions

Swift contends that defendants use the steps of its

patented process in the production of a high analysis,

self-sequestering, liquid APP product, and thus operate

in substantially the same manner to obtain the same re-

sult as that disclosed and claimed by the 808 patent in

suit.

Swift further contends that defendants’ infringement

is willful, that defendants were aware of the patent at

the inception of infringement, and that defendants’ mod-

ification of its original jet reactor, by changing the posi-

tioning of the inlet tubes, was subterfuge.

Finally, Swift contends that Usamex and FFM are

joint tort feasors in the infringement, and jointly liable.

* Plaintiff’s exhibit 66.

* Plaintiff’s exhibits 58, 64, 65, 78, 81, 82.

* Plaintiff’s exhibit 89.

* Plaintiff’s exhibits 3, 4.

* Plaintiff’s exhibit 3.

„ Plaintiff’s exhibits 82, 87, 90, 203.

VI. Infringement

A. Literal Infringement and the Doctrine of Equive-

(17) Defendants do not contest the fact that the pro-

cess used at St. Rose is the same as that described in

the 808 patent.“ In the process at St. Rose, wet

cess phosphorie acid having a POs content of about 60%

|

is reacted with ammonia under conditions that

11

it

ui

5

i

i

5

St. Rose process employs the process steps reci

claims 1-4 of the 808 patent in suit. The ammonia

supplied to the closed end of the reactor pipe, the 60%

P.O; phosphoric acid is supplied to the same end, acid

and i

1

* K

polyphosphate melt in the reactor was longer than one

dants withdrew this defense and did not call a second

witness who also observed the ex parte test run.

„ Uncontested facts 19, 31.

* See note 40 supra.

“ Uncontested facts 21-29.

versal Film Mfg. Co., 1917, 37 S.Ct. 416, 418. The claims

of the patent in suit must therefore first be considered.

Claim 1 of the 808 patent describes the apparatus in

which Phosphoric acid and ammonia are contacted as &

“jet reactor.” There is, however, no pictorial representa-

tion of the device referred to, and the patent specifica-

tion must be looked to for further guidance. There are

two references to reactors in the specification. The first

that “the reaction is carried out in a jet reac-

tor such as that described in the U.S. application of T. C.

Kearns, S.N. 444,595, the disclosure of which is hereby

incorporated by reference.“ The patent application in-

ed by reference, now designated U.S. Patent No.

3,419,373," discloses a method of producing monoam-

monium phosphate, a solid fertilizer. The claims of that

patent describe the process reaction as occurring in a

“reaction zone.“ Also contained in the patent is a

pictorial representation“ of what the specification refers

to interchangeably as “a two fluid reactor,“ “a jet type

“ Plaintiff’s exhibit 6.

* Plaintiff’s exhibit 1 (col. 1, lines 47-50).

Id.

“Td. (col. 7, line 34).

“See Appendix A.

“ Plaintiff’s exhibit 6 (col. 3, line 34).

1

reactor, a two fluid nozzle jet-type reactor, “and a

“jet reactor The drawing shows a reactor (herein-

inafter the MAP reactor) consisting of a pipe with in-

lets for phosphoric acid and ammonia. The acid, H. PO.,

is fed into the pipe through a large inlet and the am-

monia NH:, is supplied through a smaller inlet con-

tained inside the larger inlet. At the point where both

chemicals are contacted in the reactor, they are mixed

by means of a vane having blades which impart a cen-

trifugal motion to the wid stream.

The second referee to a reactor in the 808 patent

specification describes the reactor more fully:

“The apparatus used may comprise an elongated

reactor pipe having a diameter less than its length

and generally uniform in cross section, said reactor

having an inlet end and outlet end. Inlet tubes are

provided at the inlet end of the pipe for feeding

ammonia and wet process acid into the pipe. These

inlet tubes are connected to a source of supply ex-

terior to the pipe. The inlet tubes can be positioned

in spaced apart relationship if desired or positioned

concentrically, one within the other. Usually, the

inlet tube is merely an open end tube but orifices

can be provided if desired, to obtain finer dissemina-

tion [18] of reactants. Also the inlet tube can be

provided with a plurality of spaced openings, i.e., a

manifold type.

One embodiment of an apparatus used to carry

out the process for production of ammonium poly-

phosphates comprises a two fluid jet-type reactor set

forth in the above-mentioned Kearns application.

Specifically, this jet reactor consists in most cases

of about 8 feet of ½ inch alloy 31688 pipe for the

phosphoric acid. The gaseous ammonia enters the

‘Id. (col. 3, line 56).

“Id. (col. 3, line 60).

“Id. (col. 4, line 31).

3

in a 1/8 inch pipe positioned inside the %

pipe. The length of the pipe was varied from

16 feet but no significant change in product was

Defendants argue that the explicit incorporation by ref-

erenc of the MAP reactor in the 808 specification nec-

essarily limits the scope of the 808 patent to a pro-

using that reactor.“ Defendants contend that, ex-

cept for th the reference to the MAP reactor, nothing in the

specification provides “clear support and antecedent basis

. 8o that the meaning of the terms in the claims may

be ascertainable by reference to the deseription.“ They

argue, therefore, that the meaning of “jet reactor” must

under the rules AH construction be limited to the MAP

patent. I disagree.

A careful reading of the 808 patent specification dem-

onstrates that although the MAP reactor is the preferred

with which to carry out the disclosed process,

it is not the only one. The passage of the specification

which first refers to the MAP reactor states that the

process is to be carried out in a jet reactor “such as”

the MAP reactor. Further along in the specification, the

MAP reactor is termed “one embodiment” of the ap-

* Plaintiff’s exhibit 1 (col. 4, lines 25-46).

* Defendants’ expert witnesses, Richard A. Wahl and

Robert Gottschalk, testified that the scope of the 808

patent was absolutely limited by the patent specification

to the MAP reactor. It was the opinion of men that

the description of a 8 with inlet tubes spaced

either concentrically or * * apart relationship at

column 4, lines 25-46 of specification referred not to

a “jet reactor”, but to to reactor. In

808 specification de-

scribed two reactors. Defendants’ other expert, Robert

r e

4, lines 25-46 of the specification did refer

* Patent Office Rule of Practice 75(d).

to a “jet

paratus. These references clearly indi that the MAP

reactor is not the only epparatus which may be used,

an needed.

38

f

7228 ag

Hitt

pees

1115

42

ait

5 7

a

115

155

bodiment of the jet reactor” mentioned in

1. The claims of a patent need not be limited solely

described in the specification or depicted in a

Ziegler v. Phillips Petroleum Company, 5 Cir.

F. 2d 858, 177 USPQ 481; Arnold Pipe Rentals,

v. Engineering Enterprises, Inc., 5 Cir. 1965, 350

885 146 USPQ 622; Penn Yan Boats, Inc. v. Sea

Boats, Inc., S.D.Fla. 1972, 359 F.Supp. 948, 175

260 affirmed, 5 Cir. 479 F.2d 1328, 178 USPQ 577,

denied, 94 S. Ct. 66, 179 USPQ 322.

Viewed against this background, therefore, the term

“jet reactor” as used in the 808 patent is descriptive

of a broad category of pipe reactors into which the re-

actants are introduced at great velocity, or “jetted.” To

limit its meaning solely to an apparatus such as the

MAP reactor as urged by defendants would place a re-

stviction on the patent not required by the claims or

specifications.

Even if I were to adopt the restrictive construction of

the 808 patent urged by defendants, I believe infringe-

ment would still exist under the judicially created doc-

trine of equivalents. Graver Tank Company v.

Air Products Company, 1950, 70 S.Ct. 854, 85

328; Laser Alignment, Inc. v. Woodruff & Sons, Inc.,

7 Cir. 1974, 491 F.2d 866, 180 USPQ 609; Ziegler v. Phil-

„See Appendix A.

3

1

— 6la —

lips Petroleum Company, 5 Cir. 1973, 483 F.2d 858, 177

USPQ 481; Phillips Petroleum Company v. Sid Richard-

son Carbon & Gasoline Company, 5 Cir. 1969, 416 F.2d

10, 168 USPQ 141; Great Lakes Carbon Corporation v.

Continental Oil Company, W.D.La. 1963, 219 F.Supp. 468,

138 USPQ 613, affirmed, 5 Cir., 345 F.3d 145, 149 USPQ

513, cert. denied, 86 S.Ct. 241, 147 USPQ 540.

The infringement of a process patent cannot be avoided

merely by making some minor variation in the apparatus

used. Smith v. Snow, 1935, 55 S.Ct. 279, 24 [19] USPQ

26; CMI Corporation v. Metropolitan Enterprises, Ine.,

10 ‘Cir. 1976, 934 F. 2d 874, 189 USPQ 770; Phillips Petro-

leum Company v. Sid Richardson Carbon & Gasoline

Company, supra. Defendants do not contest the fact that

the St. Rose process operates in the same manner under

the same ph~sical laws to produce the same result as the

808 patent. Rather, defendants argue that the crucial

difference between the two lies in the substitution of a

conventional tee reactor for the MAP reactor. The evi-

dence, however, is overwhelming that it makes no dif-

ference in the process whether a MAP reactor or a tee

reactor is used.“ The only requirement is that the reactor

used be of a type which will allow the short residence

time necessary to make the process work; i.e., one where

the reactants enter, and the reaction product exits,

at high velocity. I find that the MAP reactor and the

conventional tee reactor are equivalent apparatus and I

reject the defense based upon the substitution of the tee

reactor.

B. File Wrapper Estoppel

Defendants’ second defense to infringement rests on

another judicially created doctrine, file wrapper estoppel:

Research carried out by Ferguson and FFM demon-

oe oe De Se tiff’s exhibits 43, 45-49, 51,

1 2 * be supplied by the fact that

“|

1

“An invention is construed not only in the light of its

claim [and specification] but also with reference to its

file wrapper or prosecution history in the Patent Office.”

v. Phillips Petroleum Company, supra, 483 F.2d

at 870, 177 USPQ 488-489. Under the doctrine a patentee

who amends or otherwise limits his claims in response

to the objections of the patent office is estopped from

later re-asserting them. Ziegler v. Phillips Petroleum

Company, supra; Rosen v. Kahlenberg, supra. Defendants

claims of | the doctrine is applicable here to restrict the

of the 808 patent to the use of the MAP reactor.

agree that file wrapper estoppel is applicable here

to a hore abe extent, I find that it does not negate defen-

dants’ infringement.

The 808 file wrapper“ reveals that a series of amend-

ments to the application were made in response to ob-

jections of the Patent Office The original claims“ (claims

1 through 6) failed to specify any particular type of re-

action apparatus. Claims 1 through 3 and 6 speak only of

“reacting” phosphoric acid and ammonia, while claims

4 and 5 refer to a “reaction zone.” Compared to a prior

patent claims 1, 2 and 6 were rejected for lack of

novelty” and claims 3 through 5 were rejected for ob-

viousness.” In response to the rejection, Kearns’ patent

attorney filed an amendment which cancelled claims 1

through 6 and substituted new claims 7 through 12.

Claims 7 and 9 again refer only to “reacting” the acid

and ammonia, while claims 8 and 11 refer to a “restricted

reaction zone.” The term “jet reactor” appears for the

first time in claim 12. The remarks to the amendment con-

tain the following explanation:

Generally speaking, the reaction is carried out in

a jet reactor, not a reaction vessel of the Hignett

type. The jet reactor may be of the type disclosed

* Plaintiff’s exhibit 2.

“Id. (pages 15-16).

"35 U.S.C. 5102.

85 U.S.C. $103.

in Serial No. 444,595, which application was recently

been allowed and which disclosure has been incor-

. by reference at page 5 of the instant specifi-

In rejecting these new claims, the patent examined stated:

Claims 9-12 are rejected as unpatentable over Get-

singer under 35 U.S.C. 103. Getsinger discloses a

method similar to the one claimed except for the

limitations on the size and shape of the reaction

zone and the step of propelling the reaction product

through space. The size and shape of the reaction

zone are apparatus limitations and do not patentably

distinguish the process claims from the reference.”

In response to this objection a second amendment to

the application was filed. In this amendment, there is

no mention of a “jet reactor,” but new claims 13 and 14

state that the reaction occurs in a “restricted reaction

zone.“ In his remarks in support of the amendment,

Kearns’ attorney refers to the “instant pipe reactor’

Shortly after this second amendment was filed, the ap-

plicant filed a supplemental amendment“ containing new

claim 20, which became claim 1 of the patent. In sup-

port of the use of the term “jet reactor” in the claim,

the remarks to the supplemental amendment state that

the “[bJasis for the language jet reactor is [20] found

at page 5, lines 26-28.” Page 5, lines 26-28 reads: It Ihe

reaction is carried out in a jet reactor such as that dis-

closed in U.S. Application of T. C. Kearns, S.N. 444,595,

the disclosure of which is hereby incorporated by ref-

erence.”

„ Plaintiff’s exhibit 2 (page 26).

Id. (pages 27-28).

Id. (page 30-31).

Id. page 37).

“Id. (pages 39-43).

be

They argue that the file wrapper shows the limita-

in

iz

.

5

in

MAP reactor as a basis for the use of the term “jet

reactor” in claim 20 (claim 1 of the patent). In short,

they argue that the process “sold” to the Patent Office

was one carried out with the MAP reactor and that

Swift, having given up claim to a process using any re-

action apparatus other than the MAP reactor, is now

estopped from asserting that the 808 process could in-

clude the use of another type of reactor.

File wrapper estoppel does preclude Swift from arguing

that the scope of the 808 patent is broad enough to

encompass the use of the with any reactor

other than a “jet reactor.” As defendants observe the re-

acting step in the 808 process was progressively limited

from the general “reacting” to the more restrictive “re-

acting in a jet reactor.” Moreover, this narrowing of the

claim does appear indeed to have been undertaken in re-

sponse to the objections of the Patent Office that the

808 process was unpatentable over prior patents which

involved the use of tank or column reactors. Swift is

estopped from arguing that its patent cover the use of

these rs.

“ Defendants’ experts, Wahl and Gottschalk, testified

hierarchy of reactors can be classified in the

Reactor

Tank Reactor Pipe Reactor Column Reactor

) Jet Tee

Reactor Reactor

—

“See defendants’ exhibit 71.

in the 808 patent— a jet reactor—from the type used

Hignett— a tank reactor.” Furthermore, the

states that the jet reactor may be of the type disclosed

in the MAP patent application. This language merely

indicates that the MAP reactor is one of several possi-

ble embodiments of the “jet reactor;” nowhere does the

This statement TI. tes lope seed he

t

“ Plaintiff’s exhibit 2 (page 26). |

“U.S. Patent No. 3,171,733. Defendants’ exhibit 10.

kalte ss Gl ay Les ae Ps oe

1 % iu Ae

In ee ee ey

lb e e

all gests 3212735825 git Hels

11 ! 1411 epg 1 le

ib e e

ages e

ee e nGagl

227817175 Hyp, l e

satel ll lt

firmed, 5 Cir. 441, F 2a 631, cert. denied, 92 S.Ct. 288

An inducer of infringement under $271(b), must aid

the infringement. Ingersoll-Rand Company v.

International Corporation, S. D. Fla. 1976, 420

I find that FFM is liable under either theory. The evi.

dence is that FFM, from the time of its initial investiga-

of the Poly Actor Phase IV process to the time this

HK

Tom V. Burns, a consultan r

the Atchinson, Kansas pilot plant under instruetions to

observe the operation and take an active role in further

development of the process.“ Ferguson became aware that

its process might infringe the 808 patent and, rather

than face the possibility of litigation, decided to sell

the process outright to a buyer who would agree to

undertake the defense of the PolyActor Phase IV pro-

cess.” From the moment that FFM first expressed in-

terest in the process all information from the attorney

prosecuting the Schenewerk patent application was di-

rected to the attention of FFM, its chief executive officer

J. R. Zerbst, and its technical director Ronald Fogg.”

“ Plaintiff's exhibits 31, 93, 205, 208.

“ Plaintiff’s exhibits 34, 35, 203, 211.

* Plaintiff’s exhibits 32, 36, 206.

* Plaintiff's exhibits 41, 43, 44.

at A

F

the a

had evolved into two separate processes. Pro-

original Schenewerk process, utilized a “vapor

reactor.” Process B utilized a conventional tee reae-

Because Swift owned a major customer of FFM,

preferred to avoid litigation with Swift over

process.” Zerbst requested and obtained a report

Robert E. Isner, the attorney prosecuting the Schene-

application, stating that Process A might infringe

patent but that Process B would not.“

After obtaining Isner’s opinion, FFM joined with

APCO Farm Chemicals, Inc. to form AMEX Fertilizers,

a shell corporation set up merely to hold the pat-

ent on the Actor Phase IV process.“ AMEX agreed

the process from Ferguson.“ Thereafter, an agree-

ment was entered into by AMEX, APCO, FFM and

Ferguson“ specifying that AMEX would sell the rights

to the Ferguson process to APCO, which would then

grant the right to manufacture the equipment used in

the process to Ferguson. By the same instruments, FFM

agreed not to take action in conflict with Ferguson’s

rights. However, APCO Farm Chemicals was subsequently

sold by its parent company becoming Jon-T Chemical

the joint venture and formed Usamex. Zerbst became

Usamex’s president and the company’s board of direc-

tors was comprised entirely of FFM officers and direc-

tors.“ The agreement between Ferguson and Jon-T (as

APCO’s successor) was terminated” and FFM sold to

111

F

a

4215

* Plaintiff's exhibits 47-51.

* Plaintiff's exhibits 48, 49.

™ Plaintiff’s exhibit 201.

* Plaintiff's exhibit 53.

* Plaintiff’s exhibit 55.

* Plaintiff's exhibits 57, 59, 60.

* Plaintiff's exhibit 62.

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VII. 808 Patent’s Validity and Enforceability

To determine whether defendants have infringed the

patent in suit, the patent’s validity was assumed. I now

examine that assumption in addition to defendants’ charge

that the patent is unenforceable because it was obtained

by fraud on the Patent Office.

” Plaintiff's exhibit 64.

* Plaintiff’s exhibit 58.

* Plaintiff’s exhibit 81.

* Plaintiff’s exhibits 205, 208.

* Plaintiff's exhibits 66, 93, 99-101.

— 70 —

A. Validity of the Patent

“A patent shall be presumed valid . The burden

of establishing the invalidity of a patent or any claim

thereof shall rest on the party asserting it.” 35 35 USC.

$282. The presumption of validity “may be rebutted only

by a quantum of proof—whether it be called clear and

burden.” Harrington Manufacturing Company v. White,

supra, 475 F.2d at 794, 177 USPQ at 293.

Defendants attack the validity of the 808 patent on

two grounds. The first is the requirement of 35 U.S.C.

$103 that a patented invention not be obvious to a per-

son having “ordinary skill in the art.” The second is

that the claims of a patent point out distinctly and with

particularity what the patentee regards as his inven-

tion. 35 U.S.C. 6112.

1. Obviousness

Under 5 103, the scope and content of the prior

art are to be determined; differences between the

prior art and the claims at issue are to be ascer-

tained; and the level of ordinary skill in the per-

tinent art resolved. Against this background, the

obviousness or nonobviousness of the subject matter

is determined. Such secondary considerations as

commercial success, long felt but unsolved needs,

failure of others, etc., might be utilized to give light

to the circumstances surrounding the origin of the

subject matter sought to be patented. As indicia

of obviousness or nonobviousness, these inquiries

may have relevancy.

Graham v. John Deere Company of Kansas City, 1966,

86 S.Ct. 684, 148 USPQ 459, 467.

Before examining the prior art cited by defendants,

it will be helpful to narrow the search by ascertaining

. Rather, Swift claims to have found solation to

a problem which had been the subject of extensive re-

search for a number of years, ie., how to make high

which phosphoric acid with a P.O, content of between

54% and 68% is reacted with ammonia at a temperature

of between 450°F. and 650°F. for a period of less than

one second. Swift claims that the prescribed temperature

range and residence time are critical in order to produce

a high analysis, self-sequestering liquid fertilizer from

phosphoric acid of the concentration noted. The focus of

the examination of the prior art must be on these two

variables.

[23] Defendants cite a number of patents and a 1964

TVA demonstration of a direct APP process in support

of their contention that the 808 patent is invalid for ob-

viousness. Each of these must be examined in turn.

U.S. Patent No. 2,755,176" (the Pearce patent) is a

process and apparatus patent for the manufacture of dry

fertilizer. The process disclosed consists of three steps,

only one of which is relevant here. That step involves

the reaction of an acid (which may be phosphoric acid)

with ammonia in a 30 to 6 inch tee mixer and the pro-

pulsion by steam of the reaction product down a 10 foot

pipe connected to the mixer. According to this patent,

the fertilizer product and steam “may move through the

lines at speeds approaching 500 feet per second.“ Be-

* Plaintiff’s exhibit 7(d).

solution of between 45% and 55% P. 0.

271111

Es.

ret

i

281

Tue

14“.

en

Lake zl

Nr TIA

water vapor or steam. ‘‘Usually about 15 seconds

Geen Goan te ths tabs to ital.” Anvitiling to

patent specification, these last two steps (partial

771

re patent disclosing a method for the production of

therein rapidly and intimately mixing them at a tempera-

ture in the range from 55°F to about 125°F .. .”’ a high

analysis liquid fertilizer results without the formation of

precipitates. The patent specifies, however, that the tem-

perature ‘‘can go only a very little above 100°F when

* Plaintiff’s exhibit 7(e).

“ Defendants’ exhibit 26.

—73e—

stability for long periods is desired.’’ A sample of ferti-

lizer produced at a reaction temperature of 116°F. was

stable, i. e., the impurities remained sequestered, for about

In regard to the residence time of the

product within the reactor, the patent states: “We have

K

i

at

ring

7A ny ange — a oe 8 ap

centration of the wet process acid before reaction with

P

sure to a temperature of between 120°C and 400°C

[248°F. and 752°F.] to convert about 50% of orthophos-

phates in the acid to polyphosphates. The concentrated

acid is cooled ad then introduced into a pipe where it is

reacted with ammonia. As an alternative method, the

patent suggests a method which seems strikingly similar

to the 808 process.

If desired, the ammonium phosphate can be pre-

pared from the acid during or immediately after the

plies a portion of the heat to concentrate the acid.

To describe this alternative process more clearly, the pat-

tent refers to figure no. 8 in the specification,” which

depicts a pipe reactor into i

f

i:

a

* Plaintiff’s exhibit 7(g).

“See Appendix D.

3

through the other end of the pipe and is quenched with

water. The residence time of the reaction product in the

pips is uot epecified.

“U.S. Patent No. 3,171,733" and No. 3,288,752” (the Hig-

* patents) disclose a [24] method of producing liquid

r dry fertilizer from superphosphoric or highly con-

* wet process phosphoric acid. The process dis-

closed involves the reaction of the acid with ammonia

in a tank reactor with agitation “at elevated tempera-

tures and pressures. The pressures range between 10

and 1000 pounds per square inch.

The temperature in reactor 3 [a tank reactor]

may be maintained in the range from about 325° to

475°, with the preferred temperature range being

from about 350°F. Depending upon temperature and

other variables, the retention time in reactor vessel

3 may range from about 10 minutes to 3 hours, the

preferred retention time being in the range from

about 1 to 1.5 hours. We have found that increasing

the retention time increases the degree sf ammonia-

tion of the product.

It is apparent that there are several combinations

of pressure, temperature and retention time which

may be used to obtain a given degree of ammonia-

tion. To obtain the highest degree of ammoniation

high pressure, low temperature and long retention

time should be used.

U.S. Patent No. 3,375,063" (the Bookey patent) dis-

closes a method of producing dry fertilizer by reacting

wet process phosphoric acid and ammonia in a column

reactor. Ammonia gas and phosphoric acid containing be-

* Defendants’ exhibit 10.

* Defendants’ exhibit 33.

* Defendants’ exhibit 11.

—

tween 45% and 56% P.O; are fed into a column reactor

containing ammonium polyphosphate maintained at be-

tween 170°C and 250°C [338°F. and 482°F.]. The ferti-

lizer product is withdrawn from the bottom of the reac-

tor. The patent claims fail to specify a residence time

for the process, but in example 1, wheree 50% wet process

acid was reacted with ammonia at about 170°C [338°F.],

the residence time was one hour.

US. Patent No. 3,382,059" (the Getsinger patent), de-

action is used to concentrate the acid and convert ortho-

phosphates into polyphosphates. By using the heat of

reaction to concentrate the acid, this patent claims that

the previously required separate step of concentrating

said wed process phosphoric acid up to the range of su-

per phosphoric acid is entirely eliminated.“

Further, I have found that, in carrying out my

process for the manufacture of liquid . . . fertilizers

by the ammoniation of wet process phosphoric acid,

I can utilize the free heat of ammoniation of evapo-

rate water and thereby condense the acid rather than

require the use of expensive heat from fuel. My proc-

ess accomplishes the two functions of ammoniation

and concentration simultaneously instead of using two

Separate processes.

The Getsinger process utilizes three variables: tempera-

ture, retention time and pressure. The limits and prefer-

red ranges for these variables are listed in the patent

* Defendants’ exhibit 9.

* Plaintiff’s exhibit 128A.

n: Temperature limits are 300°F. to 600°F.,

1 — range of 400 F. to 500 F.; reten-

limits are 1 to 180 minutes, with a prefer.

with

site tiene

red range of 2 to 30 minutes; the pressure limits are 5 to

1

1

tay

th

rh

the amount of impurities (particularly iron and alumi-

Nee

1

ranged between 425°F. and 470.

Defendants argue that, in light of these patents, it was

obvious for Kearns to use a reaction temperature of be-

tween 450°F. and 650°F. and a residence time of less

than one second. They contend that the use of this tem-

perature range and residence time were disclosed in these

other patents and that Kearns’ accomplishment was mere-

ly to put together what others had already discovered.

While I agree that Kearns temperature range and resi-

dence time were used by others, I do not agree that it

was obvious for Kearns to combine the two variables

in the manner that he did to produce the results that he

achieved.

The prior art did teach that longer reaction residence

times were inimical to the effective sequestration of met-

~ “ Defendants’ exhibit 9; see also defendants’ exhibit 34.

“ Plaintiff’s exhibit 128A (page 40).

disagree. The Pearce patent involved only the produc-

of solid, not liquid, fertilizers. Moreover, none of the

3 5

i

:

i

|

;

application in 1952 and the patent issued

. Eight years later, however, Getsinger and TVA

115

N

K

b

i

J

to 30 minutes. Others working in the field were

r away from using residence times of

. The Hignett patent advised increasing

ion time to increase the degree of ammoniati

iplin patent ‘‘found that the reaction is

. - — 3

.

it

32

＋

Bh

8

l

J

dif

tele

apparently placed no importance at all on

the residence time, for neither of them a

of times.” Only Kerley, whose patent application was

filed in 1955, used a residence time even close to one

second. That patent specified that “[u]sually about 15

seconds residence time in the tube is sufficient.”

Only after TVA had obtained a copy of Swift’s French

patent on the Kearns process in 1968 did its focus switch

See pean Se. ae b Nr

produot eee ten foot pipe reactor at

approaching 500 fect per second.” 3

i

BES E.

ils

1

tis

35

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15

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1121 l EL

beet 1 Hur 1

aE 115

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rae 1411110 fil

product in which the impurities are effectively sequester-

ed. For example, in a 1970 publication, TVA reported

the following:

[26] P

Test Tee reactor content, % of

No. temp., F. total P. O.

230-4 412 27

237-4 446 41

237-3 456 45

238-1 465 as”

Id. (pages 9-10).

11 an

110

17

bigiats

4539982033

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1 ite 7

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112271 ele

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given by TVA that retention times

might be critical to the success of the process was con-

versatili

conn, TVA reported that “moet of the potential problems

cess, TVA

tained in the 1968 demonstration booklet.“ By this time,

A eat

Plaintiff’s exhibits 66, 70, 208, 215.

‘“* Plaintiff’s exhibit 128C.

Id. (page 54).

Id. (page 57).

Id. (page 71).

4

F

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i

i

il

il

achieved only after the original Schenewerk process

— Sp bate SG Se eG eS Cee

i

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228

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17

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38

2. Indefiniteness

The second paragraph of 35 U.S.C. 5112 provides:

The specification shall conclude with one or more

claims particularly pointing out and distinctly claim-

ing the subject mutter which the application regards

as his invention. A claim may be written in inde-

pendent or dependent form, and if in dependent

form, it shall be construed to include all the limita-

tions of the claim incorporated by reference into

the dependent claim.

Defendants contend that the claime of the 808 patent

are not set out with the specificity required by $112, and,

therefore, that the patent is invalid for indefinitences.

They argue that the claims are indefinite in two

first, the type of reactor to be used, and second, the time

the reactants remain in the reactor.

a. Type of Reactor

Defendants argue that the use of the term “jet reactor”

in claim 1 of the 808 patent is vague and ambiguous

* Plaintiff’s exhibits 208, 213, 215. Burns’ initial re-

to FFM on the plant scale operation at Atchinson

rere

™ Plaintiff’s exhibits 68-70, 75-77, 204A, 204B. 206, 213.

specification for a definition. Looking pets be go may on

they contend that the only definition re is the in-

corporation by reference of the MAP reactor. Therefore,

if, as I have found supra, the term “jet reactor” was

not intended to be limited solely to the MAP reactor,

failure to explicitly state this fact makes the use of the

term indefinite.

This argument is based on a false assumption. Con-

the reactor may have concentrically ge Baw inlet tubes,

use of

descriptive term “jet” is well established in the art

pipe reactors used to manufacture ammonium polyphos-

ee nee oe ee eee

therefore, is not so vague and ambiguous that one with

ordinary skill in the art of the manufacture of ammonium

polyphosphate fertilizer would be uncertain of the scope

of the patent.

b. Time in the Reactor

Defendants’ argue that the phrase ‘‘contacting said

stream of ammonia with said stream of phosphoric acid

. . for a period of less than one second” is unclear be-

cause the reaction of ammonia and phosphoric acid occurs

instantaneously. “In other words, in all the prior art pro-

— 3a —

cesses for the production of ammonium polyphosphates,

the ammonia and phosphoric acid always are in contact

for less than one second which is all the time needed to

complete reaction. How then does the defined contacting

time distinguish the claimed process from contacting time

of the prior art!

I find this argument to be totally without merit. It is

true that the reaction of a molecule ammonia with a

molecule of phosphoric acid can be considered to occur

instantaneously."* Prior art reveals, however, that the

“contacting” of the reactants for a period of less than

one second refers not to the speed of the molecular reac-

tion, but to the time reqiured to adequately mix the

reactants. For example, the Getsinger patent specifies a

retention time of 1 to 180 minutes in order to assure a

complete reaction between the ammonia and phosphoric

acid. The Kerley patent, which utilizes a tee reactor

that allows better mixing of the reactants in a shorter

period of time, specifies a residence time within the

reactor of only 15 seconds. Certainly, defendants do not

contend that these patents are invalid because they do

not define “retention time” or “residence time”. The ex-

tremely short residence time specified in the 808 patent

is one of the grounds upon which it is distinguished

from the prior art in the field of manufacturing liquid

ammonium polyphosphate fertilizers. The 808 patent

avoids the problem of unsequestered solids in the fer-

tilizer product caused by overheating by retaining the

product in the reactor for less than one second. Clearly,

the length of the retention or residence time wtihin the

reactor is a variable which was recognized in the prior

art and a valid basis for distinguishing the 808 patent.

J conclude, therefore, that the phrase “contacting said

stream of ammonia with said stream of phosphoric acid

for a period of less than one second” is sufficiently

™ Defendants’ Post-Trial Brief, page 81.

™* Testimony of Everett N. Mortenson.

3

definite to allow one with ordinary skill in the art of

manufacturing liquid ammonium polyphosphate fertilizers

to carry out the process disclosed in the patent without

undue experimentation. See Ansul Co. v. Uniroyal, Inc.,

2 Cir. 1971, 448 F. 2d 872, 169 USPQ 759, cert. denied,

92 S.Ct. 680, 172 USPQ 257.

B. Fraud on the Patent Office

Defendants charge that, in its prosecution of the 808

patent, Swift committed fraud on the Patent Office by

willfully withholding relevant prior art from the examiner,

in particular, by failure to cite the Pearce patent. If the

charge were substantiated, the patent would be invalid

and unenforceable. Park v. Motorola, Inc., 5 Cir. 1975,

524 F.2d 518, 188 USPQ 225; Beckman Instruments, Inc.

v. Chemtronies, Inc., 5 Cir. 1970, 439 F.2d 1369, 165

USPQ 355. I find, however, that defendants have failed

in their proof.

An applicant for a patent has an “uncompromising

duty” to disclose to the Patent Office all prior art which

the applicant has reason to believe may be material to

the patentability of his invention. Precision Instrument

Mfg. Co. v. Automotive Maintenance Machine Co., 1945,

65 S.Ct. 993. While the type of misconduct before the

Patent Office which will constitute fraud varies with the

facts of each case, there must be “some element of wrong-

fulness, willfulness, or bad faith .. .” Park v. Motorola,

Inc., supra, 524 F.2d at 535, 188 USPQ at 238-239.

Furthermore, it must be established that the patent

would not have issued but for the wrongful conduct.

Eltra Corp. v. Basic, Inc., N.D. Ohio 1977, 193 USPQ

426. Finally, the fraud must be established by clear

unequivocal and convincing evidence. Schnadig. Corp.

v. Gaines Mfg. Co., Inc., 6 Cir. 1974, 494 F.2d 383, 181

USPQ 417.

It is undisputed that Swift had knowledge of the Pearce

patent and did not cite it as prior art to the Patent

Office. The existence of fraud which would invalidate the

8

:

2.

reactor of less than one second. Defendants contend that,

because Pearce is the sole example of prior art which

involves the reaction of ammonia and phosphoric acid

in a pipe reactor for a period of less than one second,

ite relevance and materiality to the Patent Office’s con-

sideration of the patent in suit is undeniable. While I

agree that the Pearce patent is relevant to the 808 patent,

I find that Swifts’ failure to disclose the patent during

the prosecution of the 808 patent was not material to the

decision of the Patent Office to grant the 808 patent.

The relevance of Pearce to the 808 patent is clear

from the discussion of both patents on the issue of

obviousness. Both patents deal with the reaction of am-

monia and phosphoric acid in a pipe reactor to produce

fertilizer. Moreover, one of the factors upon which the

808 patent relies to distinguish it from the prior art, a

residence time within the reactor of less than one second,

is also disclosed in Pearce. I believe, therefore, that it

should have been cited to the Patent Office by Swift.

At the same time, however, I find that the failure of

Swift to cite the Pearce patent, had no material effect

on the decision of the Patent Office to grant the 808

patent because, even in light of Pearce, I find that the

808 patent is patentable over the prior art.

Apart from the issue of materiality, I find no evidence

that Swift’s failure to cite Pearce was motivated by an

“element of wrongfulness, willfulness, or bad faith.” For

example, in Beckman Instruments, Inc. v. Chemtronies,

r

the evidence in that case demonstrated that, although

the patentee recognized that a prior invention seriously

threatened the patentability of its own invention, it not

only failed to disclose the prior invention, but made

affirmative representations to the Patent Office that there

had been no previous inventions displaying the prop-

erties that the patented invention had in common with

the earlier invention. Here, the evidence at most shows

only that Swift failed to cite a prior patent which it

should have cited. While such conduct is not to be con-

doned, where it has no material effect on the decision

of the Patent Office and has not been shown to have

been done willfully or in bad faith, it does not constitute

grounds for invalidating the patent. Parker v. Motorola,

Inc., supra; Beckman Instruments, Inc. v. Chemtronics,

Inc., supra.

IX. Increased Damages And Attorneys’ Fees

A. Increased Damages

The award of damages for patent infringement is

governed by 35 U.S.C. 5284:

Upon finding for the claimant the court shall award

able royalty for the use made of the invention by

ringer, together with interests and costs as

— 20a —

The court may receive expert testimony as an aid

Although the issue of quantum has not yet been tried,

Swift urges the entry of a finding which would support

ran Sale Oe eee eee we

whatever damages are ultimately assessed

Damages may be increased under 6284 * senate

discretion where the infringement is found to be inten-

tional, willful and deliberate. Dow Chemical Co. v.

Chemical Cleaning, Inc., 5 Cir. 1970, 434 F.2d 1212, 167

USPQ 513, cert. denied, 91 S. Ct. 1621, 169 CSPQ 528.

The burden of proving conduct that would justify the

imposition of increased damages is on plaintiff. Colum-

bia Broadcasting System, Inc. v. Zenith Radio Corp., N.D.

III. 1975, 391 F.Supp. 780, 185 USPQ 662.

Swift contends that infringement of the 808 patent

was willful and intentional. Swift charges that FFM

agreed, through its subsidiary, AMEX, to purchase the

process before investigating infringement. Then, in or-

der to obtain a legal opinion of noninfringement, FFM

decided to use a tee reactor with opposed inlet tubes

rather than a reactor with concentric inlets. To obtain

the opinion, Swift claims that FFM led Robert Isner,

the patent attorney, to believe that the reactor was not

an elongated pipe, as described in the 808 patent and

that the residence time in the reactor was more than

one second. Therefore, Isner’s opinion of [30] nonin-

fringement was based upon misrepresentations by FFM.

a

FFM to admit, in the face of overwhelming evidence,

that it directed and controlled the infringing activities

of Usamex at St. 1 and defendants’ failure to ful-

fill their promise to produce considerable evidence at

pas in support of their convention that the 808 pat-

invalid and unenforceable.

hes I believe there is some evidence to support Swift’s

position that the infringement was intentional and will-

ful, I find that Swift has failed to show such bad faith

as would justify increasing the damages. Clearly, defen-

dants’ infringement was intentional in the sense that

they were aware that their attempt to distinguish their

process solely on the basis of the positioning of the re-

actor inlets was precarious. While defendants’ position

regarding the infringement issue was weak, I believe the

issues concerning the validity of the patent, especially

the question of obviousness, were open to debate. The

evidence of defendants’ conduct in connection with Is-

ner’s opinion of noninfringement also falls short of sup-

porting a finding of bad faith. The evidence does show

that FFM was anxious to obtain Isner’s opinion so that

it could present it to Swift and that when it was ob-

tained, little was done to ensure that it was correct.

However, I fail to find evidence which demonstrates that

FFM deliberately misrepresented the facts to Isner.

Swift’s complaints concerning defendants’ interjection

of a new and baseless defense at trial, their refusal to

admit, in response to pre-trial requests for admissions,

that FFM controlled the infringing activities of Usamex,

and their failure to produce considerable evidence regard-

ing the validity and enforceability of the patent in suit

do not go to the issue of increased damages. They may,

however, support other remedies, such as the awarding

of cost; under the Federal Rules of Civil Procedure and

gage aa of attorney fees under 35 U.S.C. 5285,

— 91a —

B. Attorney Fees

“The court in exception cases may award reasonable

attorney fees to the prevailing party.“ 35 U.S.C. $285.

Swift contends that this is an ‘‘exceptional case’’ which

justifies the award of fees.

While the imposition of increased damages under 4284

and the award of attorney fees under §285 do not raise

identical questions, Livesay Window Co. v. Livesay In-

dustries, 5 Cir. 1958, 251 F.2d 469, 116 USPQ 167, the

considerations underlying both remedies are similar. At-

torney fees can be assessed only upon a finding of un-

fairness, bad faith, or inequitable or unconscionable con-

duct. Unifiow Mfg. Co. v. King-Seeley Thermos Co., 6

Cir. 1970, 428 F.2d 335, 166 USPQ 70, cert. denied, 91

S.Ct. 245, 167 USPQ 705; Purer & Co. v. Aktiebolaget

Adde, 9 Cir. 1969, 410 F.2d 871, 161 USPQ 270, cert.

denied, 90 S. Ct. 90, 163 USPQ 704. Furthermore, the

offending conduct must be such that it would be grossly

unfair for the prevailing party to bear the burden of its

own attorney fees. Purer & Co. v. Aktiebolaget Adde,

supra. The award of attorney fees in patent litigation

is the exception, not the rule. Uniflow Mfg. Co. v. King-

Seeley Thermos Co., supra; Borden, Inc. v. Occidental

Petroleum Corp., S. D. Tex. 1974, 381 F.Supp. 1178, 182

USPQ 472.

I believe that this case is an “exceptional’’ one which

supports assessment of attorney fees against defendants.

Although the evidence does not clearly show that defen-

dants’ infringement of the 808 patent was deliberate

and in bad faith, it does establish some degree of in-

equitable conduct on their part.

First, defendants attempt at mid-trial to interject a

new defense which was not listed in the pre-trial order

was, at the least, unfair. The defense was based on an

ex parte experiment made by defendants’ witnesses,

F Mustian testi-

lessly [31] wasted the time of both plaintiff and the

X. Findings of Fact And Conclusions Of Law

A. Findings of Fact

disputed.

2. The process used by Usamex at St. Rose, Louisiana

is identical to the disclosed by claims 1-4 of U.S.

Patent No. and amounts to an infringement of

cg ghey a gee MRA A

teed in the manufacture of ammonium polyphosphate from

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liquid ammonium polyphosphate fertilizer.

8. Although both a reactor residence time of less

one second and a reaction temperature range of

to 650°F. were variables known in the prior art,

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3. Swift is not estopped to

BAS

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2. Claims 1-4 of the 808 patent are directly infringed

by operation at the Usamex plant located at St. Rose,

1. Jurisdiction exists under 28 U.S.C. 61338 and venue

per 35 U.S.C. §271(a).

B. Conclusions of Law

is proper in the Eastern District of Louisiana.

“3

to a person having ordinary skill i

pertains. 35 U.S.C. 5103.

10. During the prosecution of the 808 patent, the

- applicant did not perpetrate fraud on the Patent Office.

II. Because plaintiff failed to show that defendants’

infringement of the 808 patent was willful, deliberate

and in bad faith this is not an appropriate case in which

to increase plaintiff’s damages under 35 U.S.C. $284.

12. Plaintiff has shown that this is an exceptional

ease under 35 U.S.C. $285 and plaintiff will be awarded

reasonable attorney fees in accordance with that section

of the Patent Laws.

490 F.Supp. 1343

SWIFT CHEMICAL COMPANY

[1843]

vs.

USAMEX FERTILIZERS, INC. et al.

79-812 “G”.

June 6, 1980.

E. D. Louisiana.

United States District Court,

Civ. A. Nos. 74-76 “G

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I. Background

r

Kearns, who was employed in fertilizer

and development by Swift. The patent discloses a method

of producing a liquid ammonium polyphosphate fertilizer

Sueat te medion samen onl Geb chamhade aaa

7

Rec. Doc. No. 226. The — — inion is 9

Chemical Co. v. Usamex Fertilizers, Inc., et al.,

“eo 10 (E.D.La. 1977).

the

acid are sequestered or held in solution, in-

of precipitating out in the form of

prise that would hinder subsequent storege and handling

the liquid fertilizer product. More cone Bn bo oy the

—— involves a direct ammoniation of orthophosphorie

acid in such a manner that the exothermic heat of the

reaction supplies the energy requirements to molecularly

dehydrate the acid, i. e., convert a substantial portion

the orthophosphates to polyphosphates [1346] without

formation of appreciable quantities of highly insoluble

iron tripolyphosphates and metaphosphates.’

‘Kearns filed his application for the patent-in-suit on

August 8, 1965, and it was issued on September 2, 1969.

ne

—

actor; supplying a stream of phosphorie acid having

P.O, content of between about 54% and about 68%

to said jet reactor; and contacting said stream of

erer

reactor at temperatures of between about 450° F.

and about F. for a period of less than one

second to form moiten droplets of ammonium -

phosphate.

2. The method of claim 1 wherein the droplets

of molten ammonium polyphosphate are subsequently

quenched.

Rec Doe. No. 226 at 2; 197 ny at 13. The basic

technology involvel in the in Ree.Doe.

No. 226 at 2-9; 197 U.S. P.Q. a Ar

3. The process of claim 1 wherein the P.O, con-

tent of acid is between about 60% and about 62%.

4. The s of claim 1 wherein at least 50%

of the orthophosphate in the acid is converted to

nonorthophosphate.* —

A significant feature of the process is that the ammonia

and phosphoric acid are contacted in a reactor at a

temperature of from about 450° F. to 650° F. for a

duration of less than one second, after which the re-

action product is quenched or cooled. Such rapid re-

action at a high temperature, referred to as “residence

time,” was found by Kearns to produce a molten am-

monium polyphosphate (melt) in which a high per-

centage of the phosphate was in the non-ortho form,

yet with little or no formation of undesirable insoluble

iron and aluminum polyphosphate compounds.“

To provide for such extremely brief residence time

at high temperature, the patent requires the use of an.

elongated, open-ended pipe in which to contact the am-

monia and phosphoric acid, as opposed, for example,

to a tank or other such reaction vessel. The patent

describes the reaction pipe as a “jet” or “jet reactor,”

and the process is sometimes referred to as a “jet pro-

cess.“

The accused process employed by Usamex at its plant

in St. Rose, Louisiana by March 1971 involved a 12-ft

reactor pipe and was described in U.S. Letters Patent

No. 3,734,708 (hereinafter referred to as the 708 or

Burns patent), issued May 22, 1973 to Tom V. Burns,

an FFM employee.“ By July 1975, Usamex was employ-

ing a process for manufacturing liquid fertilizer gen-

— 226 at 5 and n.11; 197 U.S. P.. at 14 and

n.11.

Rec. Doc. No. 226 at 6; 197 U.S. P. O. at 15.

Id.

Rec. Doc. No. 226 at 9; 197 U.S. P. O. at 16.

erally described in U.S. Letters Patent No. 3,998,140

(hereinafter referred to as the 140 or Burns and Ortega

patent).“

II. Stipulated Facts

In the development of the Kearns process, which cul-

minated in the issuance of Swift's ‘808 patent, the melt

was observed as being suspended in steam and exiting

the reactor at a high velocity.“ Although neither the

Kearns ‘808 patent, the Burns ‘708 patent, nor the Burns

and Ortega 140 patent contains a statement that the

When Usamex first began developing its process for

the production of liquid ammonium polyphosphate, resi-

dence time in its 12-ft reactor was caleulated on the

basis of steam residence time. The actual flow char-

steam oc: melt exiting the reactor. It was assumed that

the melt traveled through the pipe at the same speed

as the steam. Burns did not [1347] know of any way

of determining residence time except by calculating steam

residence time, and was unaware that radioactive ma-

terial tests could be performed to determine the residence

time of the steam or melt. He did not spend a great

deal of time trying to find another way to calculate the

time.“ Caleulating steam residence time was a

orn convenient, and practical way to determine resi-

time; it was convenient for evaluating plant de-

sign and indicating retention time for purposes of poly-

phosphate conversion.”

Ree. Doc. No. 337, Stipulation No. 10.

Id. No. 4.

Id. Nos. 3, 5, 7.

“Id. No. 14.

Id. Nos. 11, 12, 15.

11

dence time of the liquid melt in its reactor pipes in the

design and development of its 12-ft and 33-ft processes.“

In preparation for the 1976 trial, Everett M. Morten-

son, Swift’s expert, calculated the residence time of the

the reactor at the same velocity as the steam; that

reaction created a froth that was carried along with a

large volume of steam and gushed through the pipe at a

relatively high velocity, sweeping everything out of the

reactor in a jet stream or gush of fluid, steam, and melt,

and discharging it in the form of droplets of melt; and

that the steam would represent about 98-99% of the

total volume of the material going through the Usamex

reactor.” The residence time of melt suspended in steam

in a pipe reactor is approximately that of the steam.“ Dr.

Id. Nos. 11, 12, 15.

Id. No. 13.

Id. No. 18.

Id. No. 16.

— 102a —

Graham Wallis, another Swift expert, testified that the

flow regime in a reactor of peculiar geometry, such as

Usamex’s, must be determined by actual tests, and that

caleulations would give clues, but are “very dangerous”

in attempting to determine the actual flow regime.”

The possibility that the liquid (melt) and gas (steam)

phases might separate in the Usamex reactor, and that

melt residence time might be greater than one second,

first was considered and investigated by Usamex’s ex-

perts, W. R. Mustian, Jr. and A. V. Slack, in March

1976, which was eight months prior to trial and three

months prior to submission of the pre-trial order. Usa-

mex hired both men to help prepare its defense to the

infringement allegation, and they were listed as “will

call” witnesses.“ Shortly before their March 1976 tests,

Mustian asked Usamex’s patent counsel, Walter Gillis,

whether the question of noninfringement due to a dif-

ferent residence time had been explored; Gillis said it

had. Gillis testified that “all the information we had

was that everything blew through the reactor because

of the generation of the steam,” and that when counsel

previously asked the client whether the residence time

might be increased to avoid infringement, the techni-

cal advice was that was not feasible. Gillis said that prior

to spring 1976, he “never dreamed” that the steam and

melt might separate in the reactor. He said the March

[1348] tests and the question of residence time were

under “constant discussion” up to the time of trial.”

Usamex admits its three March 1976 tests were crude

and not conducted under normal operating conditions

of the Usamex process, but contends they attempted to

simulate normal operating conditions. Usamex’s counsel

decided to stand on the opinion of Mustian and Slack

“that maybe there was phase separation confirmed, and

* Id. No. 19.

"Id. No. 22.

"Id. No. 23.

—108a —

that the tests, insofar as they were relevant to that

issue, confirmed it. They certainly did not preclude us

from introducing evidence of the opinion they had before

the tests.” Usamex did not include its theory of phase

separation and longer residence time in the pre-trial

order, and did not inform Swift of those theories until

ten days before trial. Swift first learned of the tests when

Mustian testified at trial. When Swift questioned the

theories and tests on cross-examination, defendants made

a tactical decision to withdraw the phase separation/

residence time noninfringement defense. They did not call

Slack to testify about the March 1976 tests, or Ronald

Fogg, FFM technical director, to testify about a melt

withdrawal he observed in Usamex’s reactor in 1971

and his opinions based on it.”

In October 1977, I found in favor of Swift, holding

the 808 patent valid, enforceable, and infringed by de-

fendants.“ I determined that Usamexs’ phase separation/

residence time defense was “obviously groundless,” and

its tardy assertion and subsequent withdrawal was one

of the bases upon which I awarded Swift attorney’s

fees.“ After entry of my judgment order of December

19, 1977, permanently enjoining defendants from further

infringement, and ordering an accounting to determine

damages, defendants moved to suspend the injunction

pending appeal. They did not inform Swift or the Court

that they had been employing the 33-ft reactor for sev-

eral months. I granted the motion and suspended the

injunction after defendants posted a $900,000 bond.” By

that time, defendants had spent $600,000 for attorney’s

and consultant’s fees and disbursements in preparation

kor the 1976 trial.“

„Id. Nos. 24, 25, 26, 27.

* Rec. Doc. No. 226.

* Id. at 35; 197 U.S. P.. at 30-31.

„Rec. Doc. No. 337, Stipulation Nos. 29, 30.

* Id. No. 28.

In late 1977, Mustian, then Usamex’s manager of pro-

er er ay gg cart cade Sng

of Usamex’s Assumption of a Position of Non-

t,“ recommending that competent experts be

confirm his phase separation/residence time

Usamex

to court to prove that neither the

process infringed Swift’s patent.”

rt was completed, defendants had de-

e friendly” in accordance with my find-

approached Swift to obtain a license under its

settle past infringement damages, costs,

Hosen gr hg fees. At the same time, Usamex intended

for another way to contest infringement, but

so inform Swift or the Court. Usamex took a

a Deh os Meee SOO Me tee Gan Ge

consent. The judgment awarded Swift dam-

on Usamex’s sales of the fertilizer prior to

1, 1978. Part of the sales included fertilizer pro-

since October 1977 using the 33-ft reactor, al-

Swift did not know it, nor did it know that

Usamex intended to continue using the 33-ft reactor

under the license.“

In April and May 1978, Mustian wrote a second re-

port entitled “A Review In Re Swift v. Usamez.” One

of its stated purposes was “to provide bases for de-

termining the merits of actions to be considered lead-

ing to termination and reversal of the penalties as-

Usamex.“ In July 1978, defendants con-

patent [1349] counsel for advice concerning

payment of royalties to Swift, and the attorneys ad-

vised that at least one impeccable technical expert should

be consulted to prove their position of noninfringement.”

Id. Nos. 31, 32, 33.

* Id. Nos. 34, 35, 36, 37.

* Id. No. 39.

Id. No. 40.

70

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16

In January 1979, Usamex made its quarterly royalty

payment covering the use of its process (in which Usamex

denies the validity of the tests, the conclusions drawn,

and their relevancy to these matters:

(a) The melt and steam produced in the Usamex re-

actors separate and do not flow through the reactors at

the same speed;

(b) Conversion to non-ortho polyphosphates is higher

at the end of the 33-ft reactor than at any preceding

test location ;

Id. Nos. 41, 42, 44.

Id. Nos. 43, 45, 47, 48.

— 106a —

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—— (5) and (6

another subsection, Rule 60(b)(6) cannot

for relief. Transit Cas. Co. v. }

F.2d 788 (Sth Cir. 1971). In this case, the ground

which relief is sought is contained in Rule 600(b) (2).

A motion for a new trial under Rule 60(b)(2) is an

extraordinary motion, and the requirements of the rule

must be [1351] strictly met. Ag Pro, Inc. v. Sakraida,

512 F.2d 141, 143 (5th Cir. 1975). The motion may not

be granted unless: (1) the new evi was discovered

following the trial; (2) the evidence is not merely eumu-

patent

and (2) does not appear to be disputed; however, I must

determine whether Usamex satisfies (3), (4) and (5).

A. Due Diligence

The cases cited by defendants where courts found due

diligence to discover new evidence simply are not very

helpful, as this is the type of determination that neces-

sarily turns on the facts in a particular case. For exam-

ee ee a Soe

atl fn

bull

12 ER

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ony 35 25

10 60 a i

7224 25

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11173 F 145

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1121141

3813

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1

Rec. Doc. No. 339 at 9.

— ita —

Even if Usamex exercised due diligence, its motion

for relief from judgment must be denied if it fails to

prove its newly discovered evidence is material. and is

such that a new trial would probably produce a: new

B. Materiality of evidence and question whether new

nr

produce a new result

Since Usamex does not now reurge the invalidity of

Swift’s patent, the only question here is, assuming the

new scientific evidence of Usamex on its yo “gare is

[1352] valid, does the process infringe the Swift patent?

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or no formation of

aluminum polyphosphate

that

said

acid

ii- it 161 ; 1111541125 3

11 1 i 1 f 1

Lak Fu 1 1112161 13 i

fl 4

he i

. 135 28 110 14

in wn l 1 i

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ital At 1111545

a le

N is particularly incongruous for Usamex to assert

that the residence times specified in the Swift patent and

the prior art are melt residence times, when it alleges in

its Rule (60(b) motion that no one knew of a way to ac

curately measure melt residence time. Indeed, Usamex

did not develop evidence of phase separation and a longer

melt residence time until late 1978 and early 1979, when

it ‘was attempting to avoid this court’s previous finding

of infringement. The new evidence has had no practical

use, as Usamex’s processes were perfected based on cal-

culations of steam residence time.

In deciding whether an accused device or composition

infringes a valid patent, resort is had in the first instance

to the words of the claim, and “[ijf accused matter falls

clearly within the claim, infringement is made out and

that is the end of it. Graver Tank d Mfg. Co. v. Linde

Air Products Co., 339 U.S. 605, 607, 70 S.Ct. 854, 855,

man Kodak Co., 616 F.2d 1315 (5th Cir. 1980). “In con-

sidering literal infringement, the patent’s claims must be

read in connection with [the] patent’s specification and

its file history, and the claims of [the] patent cannot be

given a construction broader than the teachings expressed

in the patent. Studiengesellschaft Kohle, supra, at 1324.

Accord, Marvin Glass d Assoc. v. Sears, Roebuck & Co.,

448 F.2d 60 (5th Cir. 1971). The 808 patent teaches that

favorable results can be obtained in the manufacture of

liquid ammonium polyphosphate when a stream of am-

monia and a stream of phosphoric acid having P.O; con-

tent of between about 54% and 68% are supplied to a

jet reactor and contacted at temperatures of 450°—650° F.

for less than one second. Because this is the process em-

ployed by Usamex, it literally infringes the 808 patent.

Even if the actual flow pattern and melt residence time

in the Usamex reactor were considered in determining

infringement, and it was found that there is phase separ-

ation and # more than one second melt residence time,

under the judicially created doctrine of equivalents, in-

from inventions that perform substantially the same

function in substantially the same way to obtain the same

result. Graver Tank, supra, 339 U.S. at 43, 70 S.Ct. at

13; Studiengesellschaft Kohle, supra, at 1324. What

|

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result as the Swift patented process. At

evidence would show that Swift was ignorant

ical laws at work inside the Usamex reactor,

even inside its own reactor, and could not accurately

termine the melt residence time by calculating tl

residence time. Yet the processes accomplish

r

time is determined according to the calculated steam

residence time. In perfecting both its 12-ft and 33-ft

processes, Usamex determined residence time according

to the calculated steam residence time.

Furthermore, a party cannot avoid a finding of infringe-

ment by relying on tests not known to the art at the

time of the application for the patent. In an infringement

action, Raybestos-Manhattan, Inc. v. Texon, Inc., 268 F.2d

839 (Ist Cir. 1959), the court held that a test not recog-

nized at the date of the patent application cannot be used

either to limit or extend the scope of the patent, as the

patent must be interpreted in light of the skill of the art

to which it pertains at the date of application. Id. at 842.

The patent-in-suit was for a method of produci

setting resin impregnated cellulose fibre web

terial. The claim element at issue called for a web, mois-

ture content of ‘‘about 4% to 8%,’’ which the district

11 5

127171

its

court construed as an absolute limitation. The patent was

silent as to any test for determining the claimed range

of water content; however, the court found that the

Karl Fischer test was the most accurate test, and it re-

lir

li

1

.

* 177

Bil

sulting from the process in question, by a person

skilled in the art to which the application pertained.

This is an objective standard and does not depend

on the subjective intent of the inventor. Moreover,

it does not cause the patent to mean one thing at the

time of its issuance and another at some later date

upon the discovery of a more accurate test.

Raybestos-Manhattan, supra, at 842.

Usamex cites Helene Curtis Industries v. Sales Affilt-

ates, 233 F.2d 148 (2d Cir. 1956), in support of its posi-

tion that post-application tesis may be considered. There,

plaintiffs sought a declaratory judgment that defendant’s

patent for a chemical composition suitable for permanent

hair waving was invalid. The defendant’s patent speci-

fied mercaptan as a waving agent, and the Second Circuit

construed the patent as teaching that a mercaptan pH

ceiling of 10 was a critical limitation, because with a

higher pH, hair destruction or injury might occur before

@ satisfactory wave was obtained. At trial, plaintiff of-

fered tests using the “direct application’’ method of hair

the prior art. But in determining the existence or

nonexistence of such physical phenomena as demon-

strate a critical advance over the prior art, we think

the court is entitled to such aid as derives from any

relevant technique,—even one not developed until af-

ter the invention at issue.

Helene Curtis, swpra, at 154-55. Its holding however, was

at 155. The language in Helene Curtis relied on by Uses

mex not only is dicta, but also addresses an issue not

[1355] disputed here. In this case, the validity of the

Swift patent, and hence the criticality of the less

one second residence time, is not challenged. Only

manner in which the residence time is determined is dis-

puted.

The record is clear that the test for determining resi-

other way to calculate residence time, but did not pro-

duce a convincing test. Their idea was not revived until

— 118a —

chemical and radioactive tracer tests were not perfected

until late 1978 and early 1979. In the interim, Usamex

designed, built, and utilized its 33-ft reactor, alhough a

test for calculatiny melt residence time still had not been

performed. Usamex concedes that such tests were un-

known to those working in the art: [The [new] evi-

dence . . . relates to two sampling techniques which were

previously unheard of in the field of fertilizer manufac-

turing and which took months to develop, successfully

run, and obtain complete results from.“ Consequently,

Usamex’s new evidence of melt residence time is legally

irrelevant, as reliance on it would “cause the patent to

mean one thing at the time of its issuance and another

at some later date.’’ Raybestos-Manhattan, swpra, at 842.

Usamex not only has failed to prove it exercised due

diligence in discovering its new evidence, but the evi-

dence, even if admitted at a new trial and found to be

credible, would not produce a different result, because

it is legally immaterial. Accordingly, Usamex’s Rule

60(b)(2) motion for relief from judgment is DENIED.

V. Declaratory Judgment Action

Just prior to the issuance of the October 1977 opinion

on the validity of the 808 patent and Usamex’s infringe-

ment through use of its 12-ft reactor, Usamex constructed

and began operating a 33-ft reactor. Subsequently, the

parties settled the amount of damage and attorney’s fees

Usamex was to pay Swift under the judgment on liabili-

ty, and a final consent judgment was entered March 3,

1978. The settlement included payments for periods when

Usamex produced fertilizer using not only the 12-ft reac-

tor, but also the 33-ft reactor, although Usamex did not

inform Swift or the court of the existence and operation

of the 33-ft reactor until many months later. The parties

also entered into a license agreement, which provided

that Usamex agreed to pay Swift a specified royalty for

* Rec.Doc.No. 269 at 7.

— 11932 —

ammonium polyphosphate Usamex manr‘actured and sold

under Swift’s Patent Rights,’’ and and that Swift md

use,

and process claimed and any process which by ap-

plication of the Doctrine of Equivalents comes with-

in the claims of U.S. Patent No. 3,464,808."

After Usamex obtained its new evidence of phase sepa-

ration and a longer melt residence time, it sought a de-

claratory judgment that its process employing the the 39-

Ar

mise and settlement, res judicata, and collateral estoppel.

A. The Settlement of Retrospective Damages

Ordinarily, compromises of disputed claims are favored

by the courts. Williams v. First Nat’l Bank, 216 U.S. 582,

30 S.Ct. 441, 54 L.Ed. 625 (1910). Where the parties, aet-

ing in good faith, settle a controversy, the courts will

enforce the compromise without regard to what the re-

sult might, or would, have been, had the parties [1356]

chosen to litigate rather than settle. Hennessy v. Bacon,

137 U.S. 78, 11 S.Ct. 17, 34 L.Ed. 605 (1890). Accord, J.

Kahn d Co. v. Clark, 178 F.2d 111 (5th Cir. 1949). Settle-

ments generally are viewed as binding, final, and as con-

clusive of rights as a judgment. Thomas v. State of Lou-

isiana, 534 F.2d 613 (5th Cir. 1976).

mann te te dnnn Gennes Oat die aml un Os

manner except in good faith in settling the amount of

damages and attorney’s fees owed by Usamex following

the finding of infringement. If either party acted in less

than good faith, it was Usamex, which did not reveal

License Agreement following Rec. Doc. No. 341.

1251145 362333

e

— 120

33-ft

—

is .

if 1. nae 2713

e

1312 int AT

— the jelisial determination of valid:

ity and infringement and the entry of a final judgment

Hise e spurte eHAy

Hitt; PP orig = 111147

Ht Hi i 10 i! i ii

A

ak l

e

tet i i

be identical to that in

y —4 Talcott, Inc. v. ace Da

(Sth Cir. 1971). The colla

10

ui 21

1181171 if

Tie eee

kin ‘| it Tate We

11231 313214 235 ae:

Te THE i ag

yet ee

%

e

111 181

i PH

1477

11

1

te

Wale

Corp., 474 F.2d 1391 (2d Cir. 1973); Wallace Clark 4

Co., Inc. v. Acheson Industries, Inc., 532 F.2d 846 (2d

Cir. 1976); see also Warner-J enkinson Co. v. Allied Chem.

ve

Although the Fifth Circuit, as other courts, has rec-

ognized that ‘‘[p]ublic policy, explicated in Lear, com-

mands us not to accord monopolies by contract,’’ Kaspar,

supra, at 542, the concerns of Lear are not present in

ithe 1

it

—

e

li

differences

ills

2893

Fault

325

— 125a —

APPENDIX E

646 F. 2d 1121

SWIFT CHEMICAL COMPANY,

Plaintiff-Appellee,

v.

USAMEX FERTILIZERS, INC., et al.,

Defendants-Appellants.

USAMEX FERTILIZERS, INC., et al.,

Plaintiffs-Appellants,

v.

SWIFT AGRICULTURAL CHEMICAL

CORPORATION, Defendant-Appellee.

No. 80-3560.

United States Court of Appeals,

Fifth Circuit.

Unit A

April 28, 1981.

Before THORNBERRY, COLEMAN and AINS-

WORTH, Circuit Judges.

PER CURIAM:

Affirmed on the basis of the opinion of

Morey L. Sear, 490 F.Supp. 1343 (E.D.La.1980).

AFFIRMED.