# Appendix — Chas. S. Tanner Co. v. Air Products & Chemicals, Inc.

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URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385010_3195%3A2

## Record

- **Collection:** Supreme Court brief
- **Document type:** Appendix
- **Published:** January 1, 1985
- **Citation:** 469 U.S. 1159

## Text

IN THE

Supreme Court of the Un

OCTOBER TERM, 1984

CHAS. S. TANNER CO. and
NATIONAL STARCH AND CHEMICAL
CORPORATION,

Petitioners,
v.

AIR PRODUCTS AND CHEMICALS, INC.,

Respondent.

ON WRIT OF CERTIORARI TO
THE UNITED STATES COURT OF APPEALS
FOR THE FEDERAL CIRCUIT

APPENDIX TO
PETITION FOR CERTIORARI

GEOFFREY C. HAZARD, JR. HERBERT F. SCHWARTZ

New Haven, Connecticut 875 Third Avenue
New York, New York 10022
Tel.: (212) 715-0600

Attorneys for Petitioners

Of Counsel:
FisH & NEAVE
875 Third Avenue
New York, New York 10022
Tel.: (212) 715-0600

October 23, 1984

a)

TABLE OF CONTENTS

Court of Appeals Decision, Filed June 29, 1984 20.00.0000...

District Court Order and Opinion, Including Findings of
Fact and Conclusions of Law, Filed May 2, 1983........

Court of Appeals Judgment, Filed August 28, 1984........
District Court Judgment, Filed May 12, 1983...........0......

District Court Order and Opinion Re Defendents’ Mo-
tion Under Rules 59(e) and 60(b), F.R.Civ.P., For
Alteration And/Or Relief From The Award Of At-
torneys’ Fees, Filed June 14, 1983. .................cc0c00scssece0es

Stipulated Order, Filed December 21, 1981 ......00000c...
Urey TUL TAGE TOMI ia oc snescscccnccissscsnsosnsnecaas

Constitutional Provision, Rules And Canon Involved .....

A-1
Court of Appeals Decision, Filed June 29, 1984

UNITED STATES COURT OF APPEALS
FOR THE FEDERAL CURCUIT

AIR PRODUCTS AND CHEMICALS, INC.,
Appellee,

v. Appeal No. 83-1230

CHAS. S. TANNER CO. and NATIONAL
STARCH & CHEMICAL CORP.,

Appellants.

DECIDED: June 29, 1984

Before FRIEDMAN, Circuit Judge, COWEN, Senior Cir-
cuit Judge, and SMITH, Circuit Judge.

SMITH, Circuit Judge.

DECISION

The judgment of the United States District Court for the
District of South Carolina, 219 USPQ 223, holding that the
Lindemann patent No. 3,708,388 (the ‘388 patent), assigned to
appellee Air Products and Chemicals, Inc. (Air Products), is
not invalid, is enforceable, and is infringed by the products of
appellants Chas. S. Tanner Co. and National Starch and
Chemical Corp. ( National), is affirmed.

OPINION

1. Obviousness

National stresses that the trial court, in differentiating
between the prior art and the claimed invention, failed to
realize that the ’388 patent in fact claims, or does not prohibit,
the use of surfactants in promoting the dispersion of vinyl
acetate and ethylene in water to produce the claimed adhesive

A-2
Court of Appeals Decision, Filed June 29, 1984

composition. National points both to example | of the '388
patent, which discloses the use of surfactants, and to the
language of claim 1 which does not on its face exclude
surfactants, as evidence of the trial court’s error in allegedly
finding what National terms a “no surfactant” limitation in the
‘388 patent.

The ‘388 patent, however, claims only the type of com-
position disclosed in example 8. 219 USPQ at 227. Expert
testimony established that the process claimed in claim | results
in the unique product described in example 8; that example
corresponds to Air Products’ and its licensee’s manufactured
adhesives as well as to National’s allegedly infringing products.
219 USPQ at 227, 229, 245-48. Our review of the record
indicates no clear error in the district court’s finding that the
‘388 patent claims only the type of composition exemplified by
example 8, and we so limit our analysis.

National’s second point that claim | does not expressly
exclude surfactants is correct on its face. However, claim | is
limited to “[a]n adhesive composition consisting essentially of
an aqueous vinyl acetate-ethylene copolymer emulsion * * *
copolymerized in the presence of a protective colloid * * *
consisting essentially of a polyvinyl alcohol and hydroxyethy|
cellulose.” 219 USPQ at 230. As the trial court noted, the
“consisting essentially of” language limits the use of additional
ingredients to those which would not change the invention’s
hasic character. 219 USPQ at 230. Hence any surfactants
employed in the claimed composition would be limited to those
used in amounts which would not alter the invention’s basic
characteristics. 219 USPQ at 234.

National’s specific contentions that the trial court failed to
appreciate the significance of the prior art focuses on four
references. Regarding three of these—the Air Products ’990
patent, the French ’382 patent, and the German ‘085 patent
—National emphasizes that the district court failed in dis-
tinguishing these from the claimed composition because of
what National terms the erroneous “no surfactant” limitation.
The lower court did carefully differentiate each of these refer-

A-3
Court of Appeals Decision, Filed June 29, 1984

ences from the claimed product, however, as regards both the
necessity for “copolymerization in the presence of a protective
colloid” and the degree to which surfactants were used.

For example, the ‘990 patent, while disclosing that a
protective colloid can be used, teaches as well that the colloid
should be kept “at the lowest level possible” and that several
surfactants should be used. 219 USPQ at 238. A similar
problem exists with the German ’085 patent, which teaches the
use of a protective colloid as a sort of afterthought to the use of
surfactants. 219 USPQ at 235-36. Likewise, the French ’382
patent teaches a process using a mixture of surfactants and
protective colloids such that the level of surfactants would
exceed the “consisting essentially of” limitation in the ’388
patent. 219 USPQ at 234. Regarding the fourth reference,
Daratak B, National’s argument that the claimed adhesive
constitutes nothing more than the obvious substitution of
ethylene for dibutyl maleate into Daratak B, founders on well-
known law: the “obvious to try” test is not appropriate under 35
U.S.C. § 103 (1982). 219 USPQ at 239.

Finally, National claims clear error as regards the lower
court’s findings on secondary considerations pertaining to
obviousness. The record is particularly strong, however, re-
garding the invention’s immediate and surprising commercial
success, due to its unexpected adhesive and cohesive properties.
219 USPQ at 240.

In sum, we find no clear error in the district court’s factual
findings regarding obviousness and accordingly hold that the
district court correctly held the patent not to be invalid.

2. Unenforceability

National contends that the court below erroneously styled
as fraud what was National’s inequitable conduct claim.
Regardless of which way the issue was analyzed, however,
National must at least have established that the prior art
allegedly withheld from the patent office was material.
Orthopedic Equipment Co. v. All Orthopedic Appliances, 707

A-4
Court of Appeals Decision, Filed June 29, 1984

F.2d 1376, 1383, 217 USPQ 1281, 1286 ( Fed. Cir. 1983). We
see insufficient evidence of materiality to find clear error on this
point. The French and German patents were merely cumula-
tive to the prior art, especially in view of the substantial
progress made by Lindemann as reflected in the ‘851 patent,
which was before the examiner. 219 USPQ at 242. Similarly,
although the court below did not discuss in detail why Daratak
B was not material prior art, the record and the court’s analysis
show that Daratak B employed the comonomer dibutyl maleate
instead of ethylene with the vinyl acetate and that the
copolymerization was carried out at atmospheric rather thas
elevated pressure. In addition, Daratak B was poor in cohesive
strength and creep resistance. 219 USPQ at 232, 239-40. In
sum, we hold that the trial court did not commit clear error in
finding the patent enforceable.

3. Infringement

National’s primary contention against infringement is that
its products are terpolymers, i.e., compositions containing third
monomers, added to improve adhesive properties, in addition
to the monomers vinyl acetate and ethylene—such that its
products are lifted outside the “consisting essentially of” lan-
guage of the ‘388 patent, claim |. The record established,
however, that these third monomers (acrylamide and others),
which were added in very small concentrations, were not such
as to change the basic and novel adhesive characteristics of the
claimed invention, for which National’s products directly
substituted. 219 USPQ 249-50, 245-48. National's advertising
and advice to customers did not tout the presence of the third
monomers, and in fact the addition of the acrylamide caused
manufacturing problems, so that it was replaced by another
third monomer. Having reviewed the record, we find no clear
error in the trial court’s finding that National's products
infringed Air Products’ composition, both directly and under
the doctrine of equivalents.

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Court of Appeais Decision, Filed June 29, 1984
4. Exceptional Case

As an initial matter, National contends that it was “sur-
prised” by the “exceptional case” issue because the trial court
did not permit the exchange of pretrial briefs. Later the trial
court excluded opinions of counsel from the record which
National belatedly offered in its defense on this issue. To the
extent National is raising a due process violation before this
court, we reject the contention, as the trial court required the
Parties to exchange extensive information before trial and
entered a pretrial “stipulated order” delineating the issues in
reference to the pleadings. Moreover, National's trial counsel
did not raise the exchange-of-pretrial-briefs issue until after
trial, and then only informally. While the trial court's practice
concerning pretrial briefs may not be the better one in this
situation, it does not constitute grounds for either denial of due
process or harmful error. Cf Photovest Corp. v. Fotomat Corp.,
606 F.2d 704, 708-11 (7th Cir. 1979), cert. denied, 445 US.
917 (1980). In any event, the district court did admit and
analyze the Wacker-Chemie opinions, the DuPont opinion, and
National’s 1973 opinion, and allowed unrebutted testimony
concerning the 1973 opinion. 219 USPQ at 241. Its exclusion
of additional opinions belatedly offered by National cannot be
considered error, and certainly not harmful error.

National attacks the lower court's finding that this is an
“exceptional case” under 35 U.S.C. § 285, such that National
must pay Air Products’ reasonable attorney fees. This court will
not overrule the district court’s finding on this issue unless we
see an abuse of discretion. Orthopedic Equipment Co., 707 F.2d
at 1384, 217 USPQ at 1287. National has failed to show such
abuse. For example, National's addition of third monomers to
its products constituted important evidence that National was
acting to avoid the ‘388 patent, especially since these additional
monomers added nothing to the nature of the product and in
fact caused process problems, as mentioned above. Additional
evidence was National's hiring one of the inventors, Linde-
mann, who instructed his chemist to copy example 8. The

A-6
Court of Appeals Decision, Filed June 29, 1984

probity of the most important opinion of counsel in evidence,
National’s 1973 opinion concluding that the ‘388 patent was
invalid, is undermined by National’s subsequent actions. It
negotiated with Air Products for a license and declined to
manufacture the claimed composition until 1980, when Nation-
al acquired Tanner, which had been manufacturing infringing
products. Considering all of this in the record below, we find
no abuse of discretion in the trial court's finding that this is an
“exceptional case,” and affirm the lower court’s holding in this
regard.

A-7

District Court Order And Opinion,
Including Findings Of Fact And
Conclusions Of Law, Filed May 2, 1983

IN THe UNrtep States District Court
For THE District OF SOUTH CAROLINA
GREENVILLE DIVISION

AIR PRODUCTS AND CHEMICALS, INC.,
Plaintiff,

v. CIVIL ACTION NO. 79-826

CHAS. S. TANNER CO. and NATIONAL
STARCH AND CHEMICAL CORP.,
Defenc ants.

ORDER AND OPINION, INCLUDING
FINDINGS OF FACT AND CONCLUSIONS OF LAW

I. INTRODUCTION

This is an action for patent infringement and mis-
appropriation of trade secrets. The plaintiff brought the patent
infringement action on May 2, 1979. On July 11, 1980, plaintiff
moved to amend the complaint to assert trade secret mis-
appropriation. After briefing and argument, the motion was
granted on February 24, 1981 and the amended complaint wa.
filed on that same day. Thirty days later, defendants filed their
amended answer denying infringement of the patent, challeng-
ing its validity, and denying any misappropriation of trade
secrets. In addition, defendants filed counterclaims contending
that the plaintiff had violated the antitrust laws. On December
21, 1981, the Court ordered a separate trial on the issues of
patent validity, patent infringement and the existence and
misappropriation of trade secrets. All other issues were severed
for separate trial. The trial on the patent and trade secret issues
commenced on November 29, 1982 and was completed on
December 15, 1982.

This order and opinion constitutes the Court’s findings of
fact and conclusions of law on those issues pursuant to Rule

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District Court Order And Opinion,
Including Findings Of Fact And
Conclusions Of Law, Filed May 2, 1983

52(a), Fed.R.Civ.P. The Court has considered the numerous
issues raised by both plaintiff and defendants in this action.
That some issues or arguments are not specifically mentioned or
addressed in this opinion indicates only that, after due consid-
eration, the Court found the issues or arguments to be without
merit or of no consequence to the outcome of the case. For the
reasons discussed herein, this Court finds for the plaintiff on the
patent issues and for the defendants on the trade secret issues.

Il. THE PARTIES

The plaintiff in this action is Air Products and Chemicals,
Inc. (hereinafter “Air Products’), a corporation organized and
existing under the laws of the State of Delaware, having its
principal place of business in Allentown, Pennsylvania.

The present defendants include National Starch and
Chemical Corporation (hereinafter “National Starch’), a cor-
poration organized and existing under the laws of the State of
Delaware, having its principal place of business in Bridgewater,
New Jersey. The original defendant in the case was Chas. S.
Tanner Co. (hereinafter “CST” ), a wholly-owned subsidiary of
Ciba-Geigy Corporation. CST was a Delaware corporation
with a regular and established place of business in the District
of South Carolina. On or about July 31, 1980, National Starch
purchased all the capital stock of defendant CST and subse-
quently merged CST into National Starch. National Starch and
CST are referred to herein as “the defendants.”

il. PATENT VALIDITY

A. The Patent-In-Suit

The patent-in-suit is U.S. 3,708,388 (hereinafter the
** 388” patent), entitled “Process of Laminating Using Vinyl
Acetate-Ethylene Copolymer Latex Adhesive Composition.”
The original application for the patent, application Serial No.

A-9

District Court Order And Opinion,
Including Findings Of Fact And
Conclusions Of Law, Filed May 2, 1983

622,412, was filed on March 13, 1967 in the names of Martin K.
Lindemann and John G. Iacoviello. A continuation application
was filed on May 6, 1970, application Serial No. 37,363, and
the patent issued to Air Products on January 2, 1973. (AX
ian”

Tire ’388 patent deals with adhesives used to manufacture
lamina: ., particularly laminates made from at least one flex-
ible material, such as polyvinyl chloride film (‘“‘vinyl”). Vinyl
laminates are used to make kitchen cabinets, simulated wood
grain furniture, picture frames, luggage, upholstery and other
articles. The adhesive of the ’388 patent is used in such
applications as well as in the packaging industry. (Tr (Erik-
son) 40-43, 46-47, 125, 127; Tr (Myrick) 156-58; Tr (Donald-
son) 176-77).

Although the ’388 patent describes several different adhe-
sive compositions, it claims only the kind of composition
exemplified by the patent’s Example 8. (AX 2, pp. 120-21).
The Example 8 adhesive corresponds to two adhesives used
commercially today, Airflex 400, manufactured by the plaintiff,
and Elvace 1875, manufactured by DuPont under a license
from the plaintiff. The same composition corresponds to the
defendants’ infringing products, as discussed in a subsequent
section of this opinion. (Tr (Erikson) 95-96; Tr ( Vanderhoff)
343-45, 398-99: AX 680; Tr (Wacome) 463; AX 98, pp. 20-21;
Tr (Lindemann) 609, 612-15; AX 3, p. 37 (Paper No. 9, p. 3);
Tr (lacoviello) 2696; Tr (Cordeiro) 708-10).

B. Defendants’ Invalidity Contentions

As of October |, 1982, the United States Court of Customs
and Patent Appeals (““CCPA”’) and the United States Court of
Claims were merged to form the United States Court of
Appeals for the Federal Circuit (““CAFC”’). The new court has
exclusive appellate jurisdiction of appeals in all patent in-
fringement actions. 28 USC § 1295(a)(1). In a recent

* The plaintiffs exhibits are referred to herein as “AX _.._”; the
defendants’ exhibits as “TX —_.”

A-10

District Court Order And Opinion,
Including Findings Of Fact And
Conclusions Of Law, Filed May 2, 1983

decision, South Corp. v. United States, 690 F.2d 1368, 1369
(Fed. Cir. 1982), the new court ruled that all decisions of its
predecessor courts will be considered binding as precedents
upon it. Those decisions are therefore controlling here. This
Court accordingly relies on CCPA and Court of Claims prece-
dents, and on other well-settled patent authority where CCPA
and Court of Claims authority does not exist.

A patent is presumed valid and the burden of establishing
the invalidity of any claim of a patent rests on the party
asserting invalidity. 35 USC § 282; Solder Removal Co. v.
International Trade Comm’n, 582 F.2d 628, 632-33 (CCPA
1978); General Motors Corp. v. International Trade Comm’n,
687 F.2d 476 (CCPA 1982); Stevenson v. International Trade
Comm’n, 612 F.2d 546, 551 (CCPA 1979). The mandate of
Section 282 is twofold: the party asserting invalidity bears both
the burden of going forward with the proofs and also the
burden of persuasion. E.J. du Pont de Nemours & Co. v. Berkley
& Co., 620 F.2d 1247, 1266 (8th Cir. 1980); Solder Removal,
582 F.2d at 632.

This presumption, as the Court said in Plasser American
Corp. v. Canron, Inc., 546 F.Supp. 589, 597 (D.S.C. 1980), is a
matter of “real substance and power.” The presumption flows
from a congressional assumption that the Patent and Trade-
mark Office (hereinafter the “Patent Office’) properly applies
its acknowledged experience and expertise in the examination
of applications. Solder Removal, 582 F.2d at 633 n.10; Plasser,
546 F.Supp. at 597. The Office’s experience and expertise are
to be accorded considerable weight where, as here, “intricate
questions of chemistry are involved, which are peculiarly within
the particular competence of the Patent Office.” Mobil Oil Corp.
v. W.R. Grace & Co., 367 F.Supp. 207, 225 (D.Conn. 1973).
To that end, the Patent Office carefully studies the application
and thoroughly searches the prior art to ensure that the
application complies with all of the applicable statutes and rules
before issuing the patent. E./J. du Pont de Nemours & Co., 620

~~

A-11

District Court Order And Opinion,
Including Findings Of Fact And
Conclusions Of Law, Filed May 2, 1983

F.2d at 1266. Those statutes include 35 USC §§ 102, 103, and
112, the same sections of the patent statute upon which the
defendants here now urge invalidity.

Specifically with regard to defenses based on prior art,
while this Court is aware of language in some opinions
suggesting that no presumption exists with respect to prior art
not cited by the Patent Office, the better rule, as adopted by the
CAFC, is that the presumption is not vitiated simply by reliance
on prior art which was not cited by the Patent Office. Solder
Removal Co. v. International Trade Comm’n, 582 F.2d 628,
632-33 (CCPA 1978). Where the party asserting invalidity
relies on prior art references that were cited to the Patent Office,
or are cumulative to those references, the presumption of
administrative correctness is necessarily more difficult to over-
come. Solder Removal, 582 F.2d at 633; Power Curbers, Inc. v.
E.D. Etnyre & Co., 298 F.2d 484, 493 (4th Cir. 1962); Marston
v. J.C. Penrzy Co., 353 F.2d 976, 982 (4th Cir. 1965); Plasser
American Corp. v. Canron, Inc., 546 F.Supp. 589, 597 (D.S.C.
1980).

Defendants contend that they have rebutted the presump-
tion and that the patent is accordingly invalid. They contend
they have proven: (a) that the composition was anticipated
under 35 USC § 102 by one or more prior art references; (b)
that even if it was not anticipated, it was obvious to persons
skilled in the art under 35 USC § 103; (c) that plaintiff
committed fraud in obtaining the patent; and (d) that the
patent does not comply with the requirements of 35 USC § 112
in that plaintiff did not make the full and complete disclosure
required by that statute and did not disclose the best mode
known to the inventors for making the adhesive composition.
(Tr 21-26).

In considering the defendants’ arguments on the validity
issue, the Court has evaluated the evidence presented in the
following areas: (1) the properties possessed by the adhesive

A-12

District Court Order And Opinion,
Including Findings Of Fact And
Conclusions Of Law, Filed May 2, 1983

composition of the ‘388 patent; (2) the chemical and physical
structure of the new composition and the process by which it is
made; (3) the claims of the patent and how they define the
invention at issue; (4) the scope and content of the prior art;
(5) the differences between the claimed adhesive composition
and the prior art, particularly the nine references relied upon by
the defendants; (6) whether the composition was obvious; (7)
the prosecution of the patent in the Patent Office; and (8) the
best mode and disclosure contentions of the defendants The
Court will address each of these areas separately.

1. The Adhesive Composition Of The ’388 Patent And
Its Properties

The disclosure of the ’388 patent and the state of the
adhesive art at the time of the invention at issue were described
by plaintiffs expert witness, Mr. Carl Erikson, who has been
active in the adhesives industry since 1939, serving much of his
career in adhesives research and manufacturing for the Adhe-
sives Division of the Borden Company, makers of Elmer’s Glue.
Mr. Erikson’s testimony stands unrebutted by the defendants.
He described the problems faced by the adhesives industry in
the mid-1960’s, particularly in regard to laminating, and how
the adhesive composition of the ’388 patent solved those
problems. Mr. Erikson identified six properties which were the
most sought after in the theretofore unavailable “ideal”
laminating adhesive. (Tr (Erikson) 31-37, 57-65, 78-79, 86,
93-95; AX 775, 801, AA).

As Mr. Erikson testified, the six important properties were:
(1) adhesion to difficult-to-bond surfaces, such as vinyl; (2)
cohesion or resistance to creep; (3) good aging; (4) flexibility;
(5) plasticizer tolerance; and (6) machining properties or ease
of mechanical application. The first of these properties,
adhesion, is the ability of the adhesive to bond to other
surfaces. Adhesion is measured by a “peel” test in which a
laminate of vinyl and cloth is pulled apart at a constant rate; the

i
1

A-13

District Court Order And Opinion,
Including Findings Of Fact And
Conclusions Of Law, Filed May 2, 1983

force required to achieve the delamination is called “peel
strength.” Cohesion is the ability of the adhesive itself to hold
together after setting; it is measured by a test in which a cloth-
to-cloth laminate is subjected to delaminating forces by a fixed
weight over a given period of time. The extent of delamination
is called “‘creep” and the ability of the adhesive to hold the
laminate together in such circumst. ces is called “creep resis-
tance.” An adhesive which has good creep resistance at ele-
vated temperatures is said to have good “heat resistance.”
Flexibility is the ability of the adhesive film to bend after
setting. It is important because laminating adhesives should not
crack when the laminate itself bends at normal temperatures of
use. Plasticizer tolerance is the ability of the adhesive to
perform well in the presence of plasticizers. It is important
because plasticizers are usually present in plastic films and are
frequently added to adhesives for various reasons. Plasticizer
tolerance is measured by adding plasticizer to the adhesive and
testing how it responds in peel tests. Machining properties
relate to viscosity, speed of set, wet tack and other character-
istics affecting how well the adhesive can be applied to the
laminating materials in a mechanical operation. (Tr (Erikson)
43-1€3; AX 791-93, 801, 806, 817, 821, 835, 839, 844-49, 858,
865).

As Mr. Erikson further testified—and again his testimony
stands unrebutted—these six properties are all disclosed in the
‘388 patent for the claimed composition of Example 8. That
composition has superior adhesion or peel strength, excellent
cohesion or resistance to creep even at elevated temperatures,
good retention of peel strength on aging, and good flexibility as
shown by its low “glass transition temperature” (0°C), the
temperature where it becomes brittle; it has excellent tolerance
to plasticizers without loss of peel strength, and good machining
properties in its combination of high solids, large average
particle size and stabilization with polyvinyl alcohol (here-
inafter ““PVOH’’). Mr. Erikson personally received one of the
first samples of Airflex 400, the commercial product corre-

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District Court Order And Opinion,
Including Findings Of Fact And
Conclusions Of Law, Filed May 2, 1983

sponding to Example 8, when he was at Borden and, as he
testified, he found it to be the first product to provide these six
properties long desired by the industry for a laminating adhe-
sive. (Tr (Erikson) 78-79, 83-103; AX AA, AX 798, 803, 806,
835, 839, 852, 858, 864; see Tr (Vanderhoff) 270-75).

2. The Structure Of The Product And How It Is Made

The chemistry behind the ’388 patent, particularly the
chemistry leading to the product of claim | as exemplified in
Example 8, was explained by Dr. John Vanderhoff, who
testified as an expert witness on behalf of the plaintiff. Dr.
Vanderhoff is a Professor of Chemistry and Co-Director of the
Emulsion Polymers Institute at Lehigh University. In 1965, Dr.
Vanderhoff received the Union Carbide award of the American
Chemical Society for his work in morphology of latex films. He
has over 144 publications and eight U.S. and thirty foreign
patents, mainly dealing with emulsion polymerization. (AX
851; Tr (Vanderhoff) 192-99). On these issues of the basic
chemistry involved with the ’388 patent, his testimony was
unrebutted.

According to the testimony given by Dr. Vanderhoff, which
the Court accepts as credible, the vinyl acetate-ethylene copoly-
mer called for by claim | of the ’388 patent is the product of a
chemical reaction, a polymerization, in which many units of the
two monomers, vinyl acetate and ethylene, link together to
form very large polymer molecules. This reaction occurs in a
water-based emulsion, or latex, which is stabilized with a
protective colloid, particularly PVOH, to keep the emulsion
from separating.

In this process, the initial ingredients—water, vinyl acetate,
polyvinyl alcohol and other ingredients—are charged to a
polymerization reactor. Ethylene, a gas, is then pumped into
the reactor and the reactor contents are stirred for a certain time
to dissolve some of the ethylene in the liquid. This is called the

PATA ISS OTS

PE EE Mes IRS Sr" PS ees ae

“a-15

District Court Order And Opinion,
Including Findings Of Fact And
Conclusions Of Law, Filed May 2, 1983

“equilibration” period. The reaction is then started, and
maintained, by adding an “initiator” to the reactor. An initiator
is part of a “redox catalyst” which causes the polymerization to
occur. The process is continued over a period of hours, during
which time ethylene is added to the reactor under pressure.
This process results in the unique composition described in
Example 8 and claimed in the claims of the ‘388 patent. (Tr
(Vanderhoff) 201-03, 227-39, 256-64). The vinyl acetate-
ethylene copolymer produced in this process is suspended in the
water as tiny particles and, with the PVOH, makes up what is
referred to as the “solids” of the latex. (Tr ( Erikson) 74-78; Tr
( Vanderhoff) 228, 271).

When vinyl acetate and ethylene are copolymerized in the
presence of a protective colloid, particularly PVOH, according
to the process disclosed in the ‘388 patent, two basic polymer
components, a “soluble fraction” and an “insoluble fraction,”
are produced in substantial quantities. The relative amounts of
these two fractions are measured by placing the copolymer in
benzene and measuring the amount that remains insoluble, that
being the insoluble fraction; the remainder constitutes the
soluble fraction. Solvents other than benzene, such as toluene,
can also be used for this measurement. (Tr ( Vanderhoff) 202-
03, 244-46, 273-75; AX 858; Tr (Erikson) 83-84).

The excellent adhesive and cohesive strengths of the ’388
composition are directly related to the presence of these two
fractions. (Tr ( Vanderhoff) 202-03, 244-46, 273-75; AX 858).
The soluble fraction contributes to the good adhesive, or peel,
strength of the adhesive composition because it can easily
“wet” and exercise its affinity for the surfaces of the substrates,
including vinyl, with which it is used. (Tr ( Vanderhoff) 202,
246; Tr (Erikson) 43). The insoluble fraction contributes to the
good cohesive strength, or creep resistance, of the adhesive
composition, because the molecules that make up the insoluble
fraction are strongly bound together. Just as the solvent cannot
dissolve this fraction by separating its molecules, the heat and

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stress encountered in adhesive applications do not separate
them; the result is high cohesive strength. (Tr ( Vanderhoff)
246-50; AX 852). The combination of soluble and insoluble
fractions in the ’388 composition, which contribute to good
adhesive and cohesive strengths, is an important factor in
distinguishing the product from the prior art, as discussed in
subsequent sections of this opinion.

3. The Claims Of The ’388 Patent

For purposes of both the validity and the infringement
issues, the Court must focus on the claims of the patent. The
claims define the metes and bounds of the patented invention
and are to be construed in light of the specification and the
proceedings in the Patent Office which led to the issuance of the
patent, all with the view of ascertaining the invention. United
States v. Adams, 383 U.S. 39, 48-49 (1966); Astra-Sjuco, A.B.
v. International Trade Comm’n, 629 F.2d 682, 686 (CCPA
1980); In re Myers, 410 F.2d 420, 425 (CCPA 1969).

The ’388 patent contains eleven claims, all of which are
asserted against defendants here, and all of which the defend-
ants contend are invalid over the prior art. The first three
claims define the adhesive composition itself. Claims 4 through
7 define a process for manufacturing a laminate using the
adhesive composition defined in claims | through 3. The last
four claims, claims 8 through 11, define the laminate produced
according to the processes of claims 4 through 7. (AX 1 (Col.
15-16) ).

Claim | reads:

1. An adhesive composition consisting essentially of an
agueous vinyl acetate-ethylene copolymer emulsion having
from about 5 to about 40 percent by weight ethylene, a
solids content of from 45 to about 60 percent by weight
and an intrinsic viscosity of from | to 2.5 dl/g as measured
in benzene at 30°C, the vinyl acetate and ethylene mono-
mers copolymerized in the presence of a protective colloid

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in an amount from about 0.05 to about 2 percent by weight
based upon the total weight of the emulsion, said protec-
tive colloid being selected from the group consisting essen-
tially of a polyvinyl alcohol and hydroxyethyl cellulose.

The claim begins with the preamble ‘‘an adhesive com-
position.” Read in light of the specification, this expression
focusses the claimed invention on adhesive compositions of the
kind dealt with by the patent, namely, adhesive compositions
useful for making flexible laminates. The claim, for example,
does not cover other kinds of emulsions such as latex paints,
paper coatings, textile binders and other products which might
incidentally possess some adhesive properties, but would not be
suitable as adhesive compositions, particularly for making
laminated articles. (Tr (Vanderhoff) 360-61, 2779-80; AX 1;
Tr (Lindemann) 1472).

The next element of claim | is the phrase “consisting
essentially of.” This term of patent art serves to limit or close
the claim to the inclusion of certain additional, nonrecited
ingredients, specifically those which, in nature and amount,
would change the basic and novel characteristics of the claimed
composition. It does not close the claim to other ingredients
which do not change the adhesive’s basic character. Ex parte
Davis, 80 USPQ 448, 450 (Bd. App. 1948); see Tr ( Wither-
spoon) 1070-71, 1077-78.

Claim | next recites ““an aqueous vinyl acetate-ethylene
copolymer emulsion.” This limitation deities the basic structure
as being a copolymer of vinyl acetate and ethylene. It also
defines the basic physical form as a water-based latex or
emulsion. (Tr ( Vanderhoff) 271; Tr ( Erikson) 65-78; AX 809-
12, 816, 818, Z; Tr (Lindemann) 1510-12).

Claim | also requires a certain percentage by weight of
copolymerized ethylene, 5 to 40%. The undisputed testimony is
that this ethylene content, as disclosed in the specification,
results in an adhesive that exhibits good flexibility. The

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flexibility facilitates use with flexible laminates and also con-
tributes to the adhesive’s ability to adhere to hard-to-stick vinyl
and other plastic substrates. While the claimed ethylene range
is from 5 to 40%, claim 3 narrows the range to above 15%, a
range which covers most of the products here at issue. (AX |
(Col. 15-16); Tr (Erikson) 84-85, 92-93; AX AA; Tr ( Van-
derhoff) 220-27, 272, AX 806, 835, 839, 858).

The claim also specifies the solids content of the adhesive
composition as being between 45 to 60%. This range of solids is
necessary for the adhesive composition to have good machining
properties and formulating characteristics. (Tr ( Vanderhoff)
272; Tr (Erikson) 76-77).

The claim requires a copolymer with an intrinsic viscosity
between | and 2.5. As Dr. Vanderhoff testified, this means, first
of all, that the copolymer must include a soluble fraction since,
by definition, only soluble polymers can have intrinsic vis-
cosities. It also indicates that the soluble fraction has a
relatively high molecular weight. This high molecular weight
soluble fraction permits the composition to wet and attain
intimate contact with the surface of the substrate and is, in large
part, responsibie for the superior peel strength of the com-
position. ( Tr ( Vanderhoff) 202, 210-16, 272-73, 300, 2792; AX
1 (Col. 5, 11. 12-15); AX 829-30, 853).

The cleix aiso includes what is in effect a process limita-
tion: the copolymerization of vinyl acetate and ethylene must be
carried out in the presence of a protective colloid, either PVOH
or hydroxyethyl cellulose. The patent discloses that the pre-
ferred protective colloid is PYVOH, which, in its partially
acetylated form as used in all the compositions here at issue, is
specifically called for in claim 2. As Dr. Vanderhoff explained,
it is the copolymerization in the presence of a protective colloid,
specifically the PVOH of Example 8, which produces a product
having the insoluble fraction found in the composition of claim
1 and in the commercial products involved in this action. The
insoluble fraction is, as noted above, responsible for the

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outstanding creep resistance properties and cohesive strength of
the adhesive composition. (Tr ( Vanderhoff) 202, 234-50, 273-
75; AX 815, 819, 825-26, 832, 838, 852, 858).

Claim | also defines the amount of protective colloid used
to obtain the results just discussed as being from about 0.05 to
about 2 weight percent.

4. The Applicable Law Regarding 35 USC §§ 102 and
103

Defendants contend that the patent is invalid under 35
USC §§ 102 (“anticipation”) and 103 (“obviousness”). The
law regarding § 102 is simply stated. Under 35 USC § 102, a
patent claim is anticipated only if the claimed subject matter is
identically disclosed in one piece of prior art. Jn re Marshall,
578 F.2d 301, 304 (CCPA 1978). Furthermore, a prior art
reference which contains a broad general disclosure requiring
guessing, testing, speculation or “picking and choosing” from
an encyclopedic disclosure will not anticipate. Jn re Arkley, 455
F.2d 586 (CCPA 1972); In re Samour, 571 F.2d 559, 562
(CCPA 1978); General Battery Corp. v. Gould, Inc., 545
F.Supp. 731, 740 (D.Del. 1982).

The law regarding § 103 is outlined by the Supreme Court
in Graham v. John Deere, 383 U.S. 1, 17 (1966). Following the
analytical procedures set out in that case, the Court here has
considered: (1) the scope and content of the prior art; (2) the
differences between the prior art and the claims in issue; (3) the
level of ordinary skill in the pertinent art; and (4) whether the
subject matter of the claimed invention, as a whole, is
unobvious in light of the differences. Objective considerations
such as commercial success. long-felt but unresoived needs and
the failure of others to arrive at the same result for solving those
needs are important considerations in evaluating the issue of
obviousness.

In determining the issue of obviousness of a chemical
composition, it must be kept in mind that section ° 3 requires

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consideration of the invention as a whole, and, as a matter of
law, a new chemical composition is considered inseparable
from all of its properties and from the manner of making it. Jn
re Papesch, 315 F.2d 381, 391 (CCPA 1963); Eli Lilly & Co. v.
Premo Pharmaceutical Laboratories, Inc., 630 F.2d 120, 126-33
(3rd Cir. 1980). Thus, the existence of novel or superior
unexpected properties, undisclosed by the prior art, weighs
heavily in favor of a conclusion that the claimed composition is
not obvious. Jn re Albrecht, 514 F.2d 1389, 1394-95 (CCPA
1975); In re Blondel, 499 F.2d 1311 (CCPA 1974); In re
Lunsford, 357 F.2d 380, 384-85 (CCPA 1966); In re May, 574
F.2d 1082, 1092-94 (CCPA 1978); Eli Lilly & Co., 630 F.2d at
126-33. And where the prior art teaches away from the claimed
invention, that is highly probative evidence that the invention is
nonoodvious. United States v. Adams, 383 U.S. 39 (1966); In re
Mercier, 515 F.2d 1161, 1165-66 (CCPA 1975); In re Rosen-
berger, 386 F.2d 1015, 1018 (CCPA 1967); American Original
Corp. v. Jenkins Food Corp., (696 F.2d 1053 (4th Cir. 1982)).

Another important consideration in evaluating obviousness
is that the Court does not apply an “obvious to try” test. In
other words, merely because one skilled in the art might “try”
to perform the claimed process or make the claimed product,
that does not mean that the invention is obvious within the
meaning of 35 USC § 103. In re Goodwin, 576 F.2d 375, 377
(CCPA 1978); In re Antonie, 559 F.2d 618, 620 (CCPA 1977);
Nova Industri A/S v. Travenol Laboratories, Inc., 677 F.2d
1202, 1208 (7th Cir. 1982); Trio Process Corp. v. L. Goldstein’s
Sons, Inc., 461 F.2d 66, 72 n.18a (3rd Cir. 1972). Similarly,
the Court should not use hindsight in evaluating obviousness.
Graham, 383 US. at 36; In re Nomiya, 509 F.2d 566 (CCPA
1975); Tights, Inc. v. Acme-McCrary Corp., 541 F.2d 1047,
1059-60 ( 4th Cir. 1976); Jamesbury Corp... United States, 183
USPQ 484, 491 (Ct. Cl. Tr. Div. 1974), aff'd per curium, 518
F.2d 1384 (Ct. Cl. 1975).

Objective manifestations of nonobviousness, sometimes
called secondary considerations, are important factors on this

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issue, particularly where the dangers of employing hindsight
are great. Black and Decker Mfg. Co. v. Sears Roebuck & Co.,
679 F.2d 1101, 1104 (4th Cir. 1982); Tights, 541 F.2d at 1059;
In re McLaughlin, 443 F.2d 1392, 1396 (CCPA 1971);
Shackelton v. J. Kaufman Iron Works, Inc., 689 F.2d 334, 340
n.4 (2nd Cir. 1982).

These objective indicia include commercial success, satis-
faction of a long felt need, and industry copying of the patented
invention. Jn re Meng, 492 F.2d 843, 846 (CCPA 1974); In re
Tiffin, 443 F.2d 394, 398 (CCPA 1971); In re Sernaker, No.
82-579 Slip Op. at 11 (Fed.Cir. February 28, 1983). Signifi-
cant commercial success makes it highly unlikely that the
invention was obvious, Black and Decker, 679 F.2d at 1103,
“because ... [commercial success] may be the only warning to
a judge that he is engaged in a backward vision when an
invention that seems obvious to him eluded those skilled in the
art at the time the invention was created despite ... the
possibility of significant commercial reward.” Shackelton, 689
F.2d at 340 n.4.

5. Scope And Content Of The Prior Art

There were substantial conflicts in testimony regarding the
disclosures of the prior art relied upon by the defendants; those
conflicts are discussed in the following section dealing with
differences between the prior art and the claimed invention. On
the issue of what particular references make up the prior art,
there was little dispute. The testimony established that the
relevant prior art can be divided into two general categories.
One is the adhesives art; the other is the vinyl acetate-ethylene
copolymerization art. Each of defendants’ nine principal
references, as well as the other prior art cited by defendants,
falls into one or the other of these groups.

With respect to the adhesives art, the record establishes
that there were latex adhesives known to the art before the

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invention at issue. The first of these was introduced to the
market in the 1940’s by DuPont and others. They were
homop«'ymers of vinyl acetate, that is, they contained no
como, mers. In use, they formed stiff, rigid films, and while
they were, and are, excellent for some paper-to-paper and
wood glue applications, they suffered serious deficiencies in
respect to general laminating applications. They had poor
adhesion to hard-to-bond surfaces, such as vinyl films, and they
were rigid, inflexible and brittle. (Tr (Erikson) 78-80, 82-84,
86-87, 94-95, 102-03; Tr (Lindemann) 1184-86; AX 272-74.

By the mid-1960’s, “copolymer” adhesives were in-
troduced in an attempt to soften the polymer by adding
“internal plasticizers.”” These products employed comonomers
with the vinyl acetate but, unlike the processes here at issue, the
copolymerizations did not employ ethylene and were carried
Out at atmospheric, rather than elevated, pressure. Gelva TS-
100, manufactured by the Monsanto Company, and Daratak B,
manufactured by Dewey and Almy (later, W.R. Grace & Co.),
were two such products. Both products had low insolubles and
exhibited poor cohesive strength and creep resistance. Neither
possessed the combination of the six properties which Mr.
Erikson established were the properties of an ideal laminating
adhesive. (Tr (Erikson) 78-79, 82-83, 95, 140-42; TX 34-36,
39; AX 272-74, 757, p. 470; Tr (Lindemann) 1166-69, 1510-
14).

The other area of prior art here involved relates to the
early processes used to make vinyl acetate-ethylene copolymers.
The most significant of this prior art is found among patents of
plaintiff's predecessor in interest, the Air Reduction Company
(hereinafter “Airco”) (AX 900). The record is undisputed that
in 1963, Airco undertook an extensive research program aimed
at using ethylene as a comonomer with vinyl acetate. The
program was conducted under Mr. Lindemann’s direction. (Tr
(Lindemann) 1211-12, 1217, 1225; TX 59, 61-65, 67). At the
time this research program was begun in 1943, Mr. Lindemann

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was aware of at least some of the earlier technologies for
copolymerizing vinyl acetate and ethylene at pressures low
enough to be commercially feasible. (Tr (Lindemann) 1194-
97, 1211-12; TX 58, pp. 3-4, 62, p. 10). The German company,
Farbwerke Hoechst, had published a patent application

’ Auslegeschrift No. 1,127,085, on this subject in 1962. (TX 3,

3A, 9). Another German company, BASF, had issued a French
patent, No. 1,226,382, on the same subject in February 1960.
(TX 6, 6B, 7, 8, 10). Other European companies, including
Wacker Chemie GmbH, were experimenting in these same
technological areas. (Tr (Lindemann) 1218-19, 1445-79; AX
224-35, 696-97, 755; TX 21, 22). Samples of some Wacker
experimental products, labeled T690 and T700, were for-
warded to Airco’s Mr. Jaffe in 1963. © AX 225). They were
evaluated in paint end-use application tests, found severely
wanting and thereafter ignored. (Tr (Lindemann) 1465-76;
TX 22; AX 226; Blades Dep. 61, 71-72, 103, 165-66, 178-80;
Jaffe Dep. 174-81, 193). Also, other American companies had
filed patent applications on various processes and products
relating to vinyl acetate-ethylene copolymerization. The Wor-
rall patent, U.S. 3,355,322, relates to this area and was filed by
the Monsanto Company in 1960. (TX 15; Tr (Lindemann)
1540).

From that background, the record shows Mr. Lindemann
worked toward a new process for copolymerizing vinyl acetate
and ethylene which led to a number of new products for which
the following patents were granted: paints (U.S. 3,404,113,
3,440,199 and 3,844,990); paper coatings (U.S. 3,404,112,
3,645,952 and 3,716,504); fabric coatings (U.S. 3,345,318,
3,440,200 and 3,526,540); and non-woven adhesive binders
(U.S. 3,380,851, 3,498,875 and 3,526,538). (AX 900; TX 19;
TX 78; Tr (Lindemann) 1288, 1293-1311, 1444, 1500-04; TX
92; Blades Dep. 98-99, 225-28, 238-39; Jaffe Dep. 256). All
these patents preceded the work leading to the invention at
issue and all are prior art here.

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6. The Differences Between The Prior Art And The
Claimed Adhesive Composition

In support of their argument that the adhesive composition
claimed in the ’388 patent was not new, defendants primarily
rely on nine different specific prior art references, as well as on
Daratak B and other early adhesive products.

Both parties presented the testimony of expert witnesses on
the teachings of these references to persons of ordinary skill in
the art in the relevant time period. The testimony of the experts
conflicted on virtually all major issues. The plaintiff's principal
expert witness on these issues was Dr. Vanderhoff, who is
described earlier in this opinion. The defendant’s principal
expert was Dr. Norman Gaylord, who, since 1961, has had his
own private research consulting company (Tr (Gaylord) 1701-
02). The Court found Dr. Vanderhoff to be a highly qualified
and objective expert whose opinions and related testimony
were based upon a thorough and careful study of the relevant
materials, as well as upon his in-depth experience in the
emulsion polymerization field. The Court a-cepts his testi-
mony, on the issues addressed below, as being far more
credible than Dr. Gaylord’s. Dr. Gaylord, to be sure, is a
highly qualified polymer scientist. (TX 610; Tr (Gaylord)
1701-04). However, his testimony did not reflect the consid-
ered study and objectiveness of Dr. Vanderhoff. On the
contrary, his testimony could be characterized more as advo-
cacy than as objectivity and the accuracy of his testimony, as
shown by the cross-examination, was frequently in doubt.
These observations, coupled with a tendency of Dr. Gaylord to
evade direct questions, led the Court to fully consider, but in
most cases reject, Dr. Gaylord’s testimony as being less credible
than Dr. Vanderhoff’s.

Defendants’ other expert, and fact, witness was Mr. Lind-
em an, one of the inventors of the ‘388 patent. While the Court
has fully considered and weighed Mr. Lindermann’s testimony,
the Court finds that his testimony does not impair the credibility

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of Dr. Vanderhoff’s testimony. This is especially true in view of
the fact that Mr. Lindemann cannot be considered to have the
same degree of objectivity as Dr. Vanderhoff; Mr. Lindemann
himself was instrumental in, if not responsible for, CST’s
infringing activities. For this same reason, the Court gives no
weight to the alleged statement made by Mr. Lindemann to Dr.
Ungefug, another CST employee, that Mr. Lindemann consid-
ered the patent to be invalid. (Tr (Ungefug) 517). Mr.
Lindemann, after all, did execute the declaration, required of
all patent applicants to be made under risk of perjury, that the
application leading to the patent did disclose and claim an
invention. (AX 2, pp. 31-32; Tr (Lindemann) 1538-39).

(a) The French ’382 Patent

Defendants rely on the French patent, No. 1,226,382,
issued to BASF on July 11, 1960. (TX 6, 6B, 7, 8, 10). The
patent discloses one of the early vinyl acetate-ethylene
copolymerization processes, and resulting products, known
before the basic work began at Airco in the early 1960’s. As
Dr. Vanderhoff testified, both the process and the resulting
products are unlike those of the ’388 patent. The basic
differences are apparent from two requirements set forth in the
‘388 patent’s claim 1.

First, claim | requires that the copolymer product have an
intrinsic viscosity of between | and 2.5. That means that the
copolymer must have a soluble fraction and that the soluble
fraction must have a relatively high molecular ‘veight. (Tr
(Vanderhoff) 2788, 2791-93). Second, claim | requires that |
the polymerization be conducted in the presence of a protective
colloid. As Dr. Vanderhoff testified, the French patent teaches
that these two requirements are inconsistent with each other. If
one carries out the polymerization of the French patent in the
presence of a protective colloid, specifically PVOH, as shown
only in Example 5 of the French patent, then there is no soluble
fraction at all. As the patent says, the product of Example 5
was “insoluble in cyclohexanone.” (TX 8, p. 7, ftn. (1); Tr

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( Vanderhoff) 2783-84, 2791-93). This is a basic and important
difference from the adhesive viewpoint, because the soluble
fraction, present in the ’388 composition but absent from the
French patent, gives rise to the high peel strengths of the ’388
adhesive composition. (Tr ( Vanderhoff) 202, 246).

In short, the testimony established that the French patent’s
products do not meet the two basic requirements of claim 1: (1)
copolymerization in the presence of a protective colloid and (2)
a soluble fraction with an intrinsic viscosity in the claimed
range. For that reason alone the French patent does not
anticipate the ’388 invention.

Defendants’ expert testified that the statement in the
French patent that the product of Example 5 was insoluble in
cyclohexanone was a mistake. (Tr (Gaylord) 1734-35, 1848-
55). He maintained that the technician who was responsible
for measuring the intrinsic viscosity and K-index on that
product perhaps did not wait long enough for the polymer to
dissolve, or simply assumed incorrectly that there was no
soluble fraction in the polymer. (Jd.). This testimony,
however, is nothing but unsupported speculation. There is no
reason to conclude that the product of Example 5 was anything
other than what the French patent said it was. This is
particularly so in view of Dr. Vanderhoff’s testimony that one of
the inventors of the French patent, Dr. Hans Fikentscher, is a
respected scientist and was himself the originator of the K-
index test to which the indicated insolubility relates. Dr.
Vanderhoff testified that the data reported in the table should
be read as written. (Tr (Vanderhoff) 2792-93; compare Tr
(Gaylord) 1853-55).

Other examples of the French patent relied upon by
defendants’ expert, specifically Examples 6, 7, 8 and 15, do not
aid their anticipation argument because they use substantial
amounts of surfactants in the emulsifying system. (Tr (Van-
derhoff) 2785-86; Tr (Lindemann) 1488-89; Tr (Gaylord)
1848-49). Consequently, those examples do not carry out the

2
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copolymerization “in the presence of a protective colloid” as
required by claim 1 of the ’388 patent; on the contrary, they use
a mixture of surfactants and protective colloids. Moreover, the
high level of surfactants used in those examples is not permitted
by the claim language “consisting essentially of’; the sur-
factants would change the basic and novel characteristics of the
adhesive compositions by deleteriously affecting any adhesive
properties the product might have, as defendants’ expert admit-

ted. (Tr (Gaylord) 1858; AX 3A (Col. 1, 11. 12-23)).

The claimed ’388 composition further requires a solids
content of between 45 and 60%. None of the relevant examples
of the French patent discloses solids in this range; the highest
solids of the examples using PVOH is Example 6, which has a
solids content of 38.5%, and whose product is insoluble in
cyclohexanone. (TX 8, p. 7; Tr ( Vanderhoff) 2781-83). While
the French patent suggests that the solids content may be
increased by blowing a stream of nitrogen over the emulsion
(TX 8, p. 6), Dr. Vanderhoff testified that it would be very
difficult to raise the solids content from this low value through
the nitrogen stream technique and would require a research
program in itself. Even if it could be done, it would inevitably
change the properties of the latex. (Tr (Vanderhoff) 2782).
The French patent does not teach what those changed proper-
ties would be if the solids were so raised to the claimed range.
Consequently, the French patent does not meet this limitation
of the claim.

The differences between the French patent’s products and
those at issue are further apparent from the French patent’s
disclosure of properties related to its products’ adhesiveness.
The French patent states that: “The products consisting of...
45 to 32% of ethylene are very adhesive, whereas those
containing . . . 20 to 5% ethylene adhere hardly at all... .” (TX
8, p. 5). All of the examples relied upon by the defendants
have ethylene contenis falling within the “20 to 5%” range,
where the French patent says they are non-adhesive. Yet the

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product of Example 8 of the ’388 patent, as well as the
commerical products corresponding thereto, have ethylene con-
tents in that same range, and they, obviously, are very adhesive,
indicating that the products must be quite different from those
of the French patent. (AX | (Example 8, Col. 13, 1. 18); Tr
( Vanderhoff) 272, 283, 287-89, 292-94; AX 220, 580). At trial
defendants attempted to avoid this conclusion that the French
patent is basically different from the ’388 patent by amending
the French patent’s translation. But the final amendment
offered by defendants, even if correct, does not change the basi

fact that the teachings of the French patent are very different
from those of the ‘388 patent. (TX 10, p. 5; Tr (Lindemann)
1267-74).

The differences in properties between the French patent
and the ’388 patent are due, as Dr. Vanderhoff testified, to the
differences in processes. Unlike the ’388 patent, the French
patent’s process does not employ an equilibration period to
permit the ethylene to dissolve in the other ingredients before
the reaction is initiated. (Tr ( Vanderhoff) 2789-90). More-
over, according to the French patent the process may be carried
out in either a batch or continuous manner, a choice which is
antithetical to the ‘388 patent’s teaching that the batch-
equilibration technique must be employed. (Tr ( Vanderhoff)
2790).

in addition, with respect to the French patent’s use of
PVOH in Example 5, the record shows that the thermal
polymerization, the non-redox catalyst, the high persulfate
catalyst concentration and the high reaction temperature—none
cf which are used in Example 8 of the ’388 patent—all led to
the extensive cross-linking and branching giving rise to com-
plete insolubility. (Daniels Dep. 313-16, 362-64). The particu-
lar catalyst of the French patent also inevitably leads to the
formation of surfactant-like products which contribute to poor
adhesive properties. (Daniels Dep. 311-12, 378-83, 386, 389).
Finally, the French patent teaches that the high solids necessary

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for adhesive applications are directly obtained only with a
surfactant-based system (specifically Example 10 of the French
patent), rather than the PVOH system of the ’388 patent. (Tr
( Vanderhoff) 2793-97). All these process differences lead to
the conclusion that the product of Example 5 of the French
patent could not have had the ideal adhesive properties pos-
sessed by the composition of the ‘’388 patent. (Tr
( Vanderhoff) 2785-86, 2788-89).

All in all, then, the French patent does not antscipate; on
the contrary, it “teaches away” from the invention of the ’388
patent. (Tr ( Vanderhoff) 2797). If a person skilled in the art
in 1967 set out to make a laminating adhesive, the French
patent would have led him in a direction opposite to that of the
‘388 patent. (Tr ( Vanderhoff) 2793-97).

(b) The German ‘085 Application

Defendants rely on the German patent application,
Auslegeschrift No. 1,127,085, which also relates to an early
vinyl acetate-ethylene copolymerization process. (TX 3, 3A,
9). While the product of this process has at least some adhesive
properties, the product is not a laminating adhesive and it does
not have the unique combination of properties of the claimed
product. (Tr ( Vanderhoff) 2797-98; AX 907/907A).

The thrust of the German application is directly contrary to
the ‘388 patent’s teaching that most, if not all, of the vinyl
acetate should be put into the reactor at the start of the reaction.
The German application teaches that only by adding vinyl
acetate to the reaction vessel continuously throughout the
polymerization (sometimes called “delayed addition”), can a
satisfactory product be produced. (Tr (Vanderhoff) 2798-
2801; TX 9, p. 5; Tr (Gaylord) 1893). This teaching is
contrary to what was discovered by the inventors of the ’388
patent and the resulting products are consequently different.
(Tr ( Vanderhoff) 203, 2798-99, 2803; AX 681, pp. 33-34).

A-30

District Court Order And Opinion,
Including Findings Of Fact And
Conclusions Of Law, Filed May 2, 1983

At least two basic differences are reflected by the claims of
the ‘388 patent as compared to the German application. First,
claim 1 requires an intrinsic viscosity of between | and 2.5.
There is no such disclosure in the German application, and
there is no teaching that the German application’s product has
a soluble fraction which the test for intrinsic viscosity requires.
(Tr (Vanderhoff) 2800-02). At trial, defendants’ witnesses
suggested that the German application’s dispersions would
have intrinsic viscosities in the claimed range because, they
argued, the “percent elongation at break” reported for the
German application’s polymers is consistent with the high
molecular weights indicated by the ’388 patent’s intrinsic
viscosity range. (Tr (Lindemann) 1204-05, 1430-34; Tr (Gay-
lord) 1749, 1895-1904). The basic error here is that percent
elongation—no matter what it says about molecular weight
—says nothing about intrinsic viscosity, a property which
requires the existence of a soluble fractien. (Tr ( Vanderhoff)
2800-02; Tr (Gaylord) 1749, 1883-84, 1887). Moreover, on
cross-examination, defendants’ experts were unable to cite any
reports or references directly relating the percent elongation to
molecular weight. (Tr (Lindemann) 1433-34; Tr (Gaylord)
1895-1904). At most, the elongation figures recited in the ‘085
application show a correlation between elongation at break and
percent ethylene, but the correlation cannot be extended to
molecular weight. (Tr (Vanderhoff) 2800-01; TX 60; AX
594).

Second, claim | requires copolymerization in the presence
of a protective colloid; there is no such teaching in the German
application. On the contrary, conventional surfactants are used
throughout. Thus, even though PVOH was a known emulsifier
at this time, as evidenced by the Goldberg patent (TX 28) and
other references, the German application taught that other
emulsifiers should be used instead. (Tr ( Vanderhoff) 2801-
02).

IEE Se a eee

A-31

District Court Order And Opinion,
Including Findings Of Fact And
Conclusions Of Law, Filed May 2, 1983

Defendants argue that the German application does teach
the use of a protective colloid and that the German appli-
cation’s discussion of the nature of the emulsification system to
be employed is mistranslated from the German into the English
version. (Tr (Lindemann) 1428-29). The German application
says “‘surface-active substances and, if required, of protective
colloids .. .” should be used. (TX 10, p. 3 (emphasis added ) ).
Defendants contend that “if required,” should be “if the
occasion arises” or “if the occasion warrants.” (Tr (Lin-
demann) 1429-30). Even if the Court were to accept defend-
ants’ translation of the German application, this does not
change this Court’s finding that the application prefers the use
of surfactants in the emulsification system “and,” alternatively,
provides for the use of protective colloids, but only in com-
bination with relatively high levels of surfactants.

In that regard, the Court notes that in the Canadian and
British equivalent patents of the German application, namely,
Canadian Patent No. 713,625 (TX 4, p. 4, 1. 10), and British
Patent No. 991,550 (TX 5, p. 2, 1. 39), the disputed phrase is
translated from the German to be “if necessary.” Accordingly,
this Court finds that the appropriate interpretation of the
German patent is that protective colloids may be added to the
surfactants “if necessary,” but that surfactants should always be
used.

In summary, the German application, like the French
patent, does not anticipate, but rather teaches away from the
‘388 invention. If one set out to make a laminating adhesive
and started with the German application, one would have used
continuous vinyl acetate addition, and would have used sur-
factants rather than PVOH. One skilled in the art would not
have been led to the basic discovery embodied in the ’388
invention. (Tr ( Vanderhoff) 2802-03).

(c) The Worrall ’322 Patent

United States Patent No. 3,355,322, issued to Worrall, is
another of the early patents dealing with the copolymerization

A-32

District Court Order And Opinion,
Including Findings Of Fact And
Conclusions Of Law, Filed May 2, 1983

of vinyl acetate and ethylene; it was filed by Monsanto in 1960.
(TX 15, ISA). Worrall is one of the references which was
considered by the Patent Office examiner during the prose-
cution of the application for the ‘388 patent-in-suit. (AX 1-2).

Defendants contend that Worrall anticipates the ‘388
invention. The Court, however, takes note of the fact that,
although this application was filed in 1960, Monsanto was still
marketing its non-ethylene-containing laminating adhesive,
Gelva TS-100, as late as 1966 when Airco’s inventors dis-
covered the ‘388 adhesive composition. (Tr (Jaffe) 525).
Moreover, when Monsanto did decide to market a vinyl
acetate-ethylene adhesive it purchased defendants’ E-200 prod-
uct and resold it as Gelva TS-125, rather than manufacture its
own product according to Worrall. (AX 128, 768, p. 11). If
Worrall anticipated the ‘388 invention as defendants contend,
Monsanto would, more probably than not, have had this
commercially-successful product out in the market in the very
early 1970's.

As Dr. Vanderhoff testified, Worrall relates generally to
compositions based on copolymers of ethylene and vinyl ace-
tate which are suitable for use in coating applications, particu-
larly for coating fibrous materials such as paper or textiles.
Such materials do have some adhesive properties, but Worrall
does not teach, nor do Worrall’s products possess, the proper-
ties or the laminating utility of the adhesive composition of the
‘388 patent. (Tr (Vanderhoff) 2804-05; AX 907/907A; Tr
(Gaylord) 1883-84).

While Worrall is more relevant to the ‘3°°% invention than
the French or German references, it does .0t teach basic
elements of claim |, namely copolymerizatior a the presence of
PVOH (to get the insoluble fraction) and an intrinsic viscosity
of between | to 2.5 (corresponding to the soluble fraction). As
to the first, Worrall’s examples all use substantial amounts of
emulsifiers and, while there is a general disclosure of PVOH,
there is no indication that, if used alone, superior properties

A-33

District Court Order And Opinion,
Including Findings Of Fact And
Conclusions Of Law, Filed May 2, 1983

would result. As to the second, there is no teaching of either a
soluble fraction or an intrinsic viscosity. (Tr ( Vanderhoff)
2805-08, 2810; Tr (Gaylord) 1883-84, 1905; AX 907/907A).

Defendants’ expert contended that the disclosure in Wor-
rall of a melt index is iadicative of high molecular weight, and
hence, high intrinsic viscosity. (Tr (Gaylord) 1763-64). But
Dr. Vanderhoff pointed out that this does not teach the
existence of a soluble fraction. (Tr (Vanderhoff) 2810).
Additionally, defendants offered no evidence of any actual
correlation between the melt index of vinyl acetate-ethylene
copolymers and molecular weight (Tr (Gaylord) 1905), and
the Court cannot find that the copolymers of Worrall had a
soluble fraction with an intrinsic viscosity within the range of
the claims of the ‘388 patent. (Tr (Vanderhoff) 2810).
Defendants’ expert also found teachings of good aging charac-
teristics in Worrall, but it is apparent that the properties
referred to relate only to discoloration, not to anything having
to do with adhesive performance. (Tr (Gaylord) 1774).

For these reasons, the Worrall patent, while more relevant
to the ‘388 invention than any of the other patents relating to
work earlier than the Airco work, does not anticipate. Like the
other references, it points in a direction away from the in-
vention. One would not have been led by Worrall to the use of
PVOH alone to get the desirable and unexpected properties of
the ‘388 patent. (Tr ( Vanderhoff) 2808-09).

(d) Lindemann And Volpe U.S. Patent No. 3,380,851

Defendants also rely on United States Patent No.
3,380,851, issued to Martin K. Lindemann and Rocco P. Velipe
on April 30, 1968, (TX 16/16A). This is another patent which
was before the Patent Office examiner during his examination
of the applications underlying the ‘388 patent-in-suit. (AX 1-
2). The Court finds that this patent is the most relevant of the
Airco patents predating the ‘388 invention because, as Dr.
Vanderhoff testified, it discloses both the equilibration process

A-34

District Court Order And Opinion,
Including Findings Of Fact And
Conclusions Of Law, Filea May 2, 1983

and adhesive uses. ( Tr ( Vanderboff) 2810-11). But it does not
disclose the ‘388 patent’s adhesive composition.

The ‘851 patent relates generally to adhesive binders for
non-woven fabrics. (Tr ( Vanderhoff) 2810). Such fabrics are
composed of loosely-assembled webs of fibers which are bound
together with the binder. {TX 16, Col. I, 11. 23-25). The
binder is a latex copolymer of vinyl acetate and ethylene, but a
third monomer, N-methylol acrylamide ( hereinafter referred to
as “NMA” ), has to be added to increase the binder’s cohesive
strength. (Tr ( Vanderhoff) 2811-12). While the ’851 patent’s
product has some adhesive properties, it is not the adhesive
composition of claim | and does not possess the properties
which that adhesive possesse. (Tr ( Vanderhoff) 2810; AX
™\7/907A; Tr (Gaylord) 188: 84).

The ’851 patent does nqgt teach copolymerization in the
presence of PVOH. (Tr ( Van@erhoff) 2813). The ’851 patent
teaches that an emulsifying ageX ts required, «nd it specifically
refers to various non-ionic emuhifying agents and a series of
surfactants. (Tr ( Vanderhoff) 2&3; TX 16 (Col. 3, 1. 40-Col.
5, 1. 35)). The ‘851 patent disco\¥rages the use of colloids; it
says, “it is preferred to maintain the\polloid concentration at the
lowest level possible.” (TX 16, Col X11. 17-18). In short, the
’851 patent shows no preference or yation that any
particular benefits can be derived through the of PVOH
alone. (Tr ( Vanderhoff) 2813-14). Thuis finding is reinforced
by the fact that in the sole working example, Example 1, no
protective colloiY whatsoever is employed, but instead three
surfactants, Igepal 887, Igepal 630, and sodium lauryl sulfate,
are used. (TX 16, Col. 8, 11. 62-73; Tr ( Vanderhoff) 2813; Tr
(Gaylord) 1916-17).

In summary, the basic teachings of the ‘851 patent and the
‘388 patent are diametrically opposed. The ‘85! patent teaches
that one must employ a cross-linking third monomer, NMA, to
get cohesive strength. It is a central aspect of the ‘388 invention

A-35

District Court Order And Opinion,
Including Findings Of Fact And
Conclusions Of Law, Filed May 2, 1983

that cross-linking third monomers need not be used, but that
when PVOH is used alone, as taught by Example 8, the right
balance of solubles and insolubles is obtained. Again, the ’851
patent does not anticipate; its teachings are in a direction
opposite to that of the invention at issue. (Tr ( Vanderhoff)
2814).

(e) Chapman, United States Patent No. 2,543,229

Defendants also rely on United States Patent No.
2,543,229, issued to Chapman on February 27, 1951, based on
an application filed April 27, 1948. (TX 25). Chapman does
relate generally to vinyl acetate-ethylene copolymers which are
described as useful for laminating polyethylene (Tr (Van-
derhoff) 2814-16), but it adds nothing to the prior art which
was before the Patent Office examiner during his consideration
of the patentability of the applications leading to the ’388
patent-in-suit.

The Chapman patent does not describe an emulsion
polymerization. It describes solution polymerizations which
result in products entirely different from the products here at
issue. (Tr ( Vanderhoff) 2816-17). Chapman does not disclose
any solids contents, nor does it give any indication of the
intrinsic viscosity of its products. (Tr ( Vanderhoff) 2817-18).
There is absolutely no suggestion that the polymerization
should be conducted in the presence of a protective colloid. (Tr
(Vanderhoff) 2818). In short, the product does not have the
properties defined by claim |. (Tr ( Vanderhoff) 2816).

The basic differences between Chapman and the ’388
patent are further apparent from the consideration that Chap-
man teaches that products having ethylene contents below 33%,
such as the commercial products here at issue, are not adhesive.
(Tr (Vanderhoff) 2817; TX 25, Col. 2, 11. 40-52; AX
907/907A). Accordingly, the Chapman patent does not antici-
pate; it leads the man skilled in the art away from the invention
described and claimed in the ‘388 patent. (Tr ( Vanderhoff)
2818-19).

A-36

District Court Order And Opinion,
Including Findings Of Fact And
Conclusions Of Law, Filed May 2, 1983

(f) Lindemann And Volpe U.S. Patent Nos.
3,716,504 and 3,844,990

Two additional references relied on by the defendants are
the Lindemann and Volpe ’990 and ’504 patents. (TX 12/12A,
11). Both the ‘990 and ’504 patents disclose products which
might have some adhesive properties, but the ’990 patent is
specific to paints and the ‘504 patent is specific to paper
coatings. (Tr (Vanderhoff) 2819-20, 2826). Like the ’851
patent, these patents grew out of the Airco research of the early
1960’s. Neither patent contains any teachings in addition to
those which were contained in the references which the exam-
iner considered, particularly the ’851 patent.

Neither of these patents teaches the polymerization of
vinyl acetate and ethylene in the presence of a protective
colloid, particularly PVOH. The examples’ of these patents
teach the use of three or four surfactants. The ’990 patent
teaches that the amount of protective colloid added should be
kept “at the lowest level possible.” The ‘504 patent contains no
teaching that protective colloids could or should be used. (Tr
( Vanderhoff) 2821-29; TX 11-12; AX 907/907A). In sum, the
‘990 and ’504 patents are, at best, merely cumulative of the
teachings of the ’851 patent; neither anticipates the invention at
issue

(g) The Jaffe Article

The Jaffe article relates to a presentation given by Mr.
Harold L. Jaffe, then manager of the Coating Polymers Depart-
ment of Airco, to the Adhesive and Sealant Council sometime
in the early part of March 1966. (TX 13; Tr (Jaffe )560-62).
The article itself is a “post print” of the Jaffe talk and contains
subject matter not actually mentioned by Mr. Jaffe during his
presentation. (Jaffe Dep. 304-06, 319).

The Jaffe article announces the introduction by Airco of a
new product, Aircoflex 500, a product made by Airco before the
invention of the ’388 patent. The article discloses that the

A-37

District Cour: Order And Opinion,
’ Including Findings Of Fact And
Conclusions Of Law, Filed May 2, 1983

Aircoflex 500 product is a vinyl acetate-ethylene copolymer
useful in the formation of laminates in which one of the
substrates is a difficult-to-bond surface, such as plastic film.
The composition was described as containing approximately
25% ethylene, and as having a solids content of 53%. (Tr
(Vanderhoff) 2830-32; Tr (Gaylord) 1810-11). The Jaffe
article itself, however, is silent on the remainder of the com-
position’s makeup.

The product, as the testimony showed, is the disclosed but
unclaimed product of Example 9 of the patent-in-suit. (AX
903; Tr (Lindemann) 1535-36; Tr (Vanderhoff) 2832; Tr
(Gaylord) 1934-35). Example 9, however, is not within the
scope of the claims at issue here for a number of reasons. Not
the least of these is that it employs surfactants rather than a
protective colloid, and also, like the ’851 patent, contains a
termonomer, namely, triallyl cyanurate, as well as sodium vinyl
sulfonate and maleic anhydride. (AX 903; Tr ( Vanderhoff)
2829-32; Tr (Lindemann) 1535-36; Tr (Gaylord) 1934).
Thus, neither the Aircoflex 500 product itself, nor the Jaffe
article, anticipates the claimed ’388 invention under any of the
various subsections of 35 USC § 102.

(h) Roedel United States Patent No. 2,703,794

The last of the nine references is Roedel, United States
Patent No. 2,703,794, issued March 8, 1955, based on an
application filed September 4, 1951. (TX 14). Roedel
discloses an ethylene-vinyl acetate polymer of general latex
utility, suc as for water-based paints, protective coatings and
adhesives. (Tr ( Vanderhoff) 2833; TX 14, Col. 5, 11.53-61).
Roedel also discloses that the copolymers of the compositions
described therein are in emulsion form and have from 25 to
90% by weight ethylene. (Tr. (Vanderhoff) 2834-35; Tr
(Gaylord) 1813).

Roedel does not anticipate because the solids contents of
his compositions, between about 7 to 24%, are too low; no

a iia i

A-38

District Court Order And Opinion,
Including Findings Of Fact And
Conclusions Of Law, Filed May 2, 1983

intrinsic viscosities are given for the polymer, and there is no
disclosure of the use of protective colloids during the polymeri-
zation. (Tr ( Vanderhoff) 2835-38). Moreover, since Roedel
does not suggest the use of a protective colloid, it is necessarily
silent as to any amount which is to be incorporated during the
polymerization reaction. (Tr (Vanderhoff) 2837; AX
907/907A).

Roedel discloses three different types of processes: the
batch addition of both the vinyl acetate and ethylene mono-
mers; the batch addition of vinyl acetate and the semi-
continuous addition of ethylene; and the semi-continuous addi-
tion of both vinyl acetate and ethylene. None of the processes
includes the equilibration step which was used to produce the
preduct of Example 8 of the ’388 patent-in-suit. (Tr ( Van-
derhoff) 2834; AX 907/907A).

Finally, Roedel fails to disclose that the compositions
described therein have the unique and novel combination of
unexpected properties which were found for the composition of
the ‘388 patent. (Tr (Vanderhoff) 2833-34; Tr (Gaylord)
1883-84). Accordingly, the Court finds that Roedel adds
nothing to the prior art which the Patent Office examiner
considered during the prosecution of the applications leading to
the ‘388 patent-in-suit.

(i) The Secondary References Relied On By De-
fendants Are Cumulative To The Art Which The
Patent Office Examiner Considered

Defendants also rely on an assortment of trade literature,
handbooks and brochures which extol the virtues of PVOH for
adhesive applications. ( See, e.g., TX 29-31, 37, 43). But none
of those references involves ethylene copolymerizations. The
prior art employing ethylene, for reasons discussed above,
taught away from the use of PVOH. (Tr ( Vanderhoff) 2801-
03, 2807-09, 2813-14, 2818-19, 2821-28, 2833-38).

Te

A-39

District Court Order And Opinion,
Including Findings Of Fact And
Conclusions Of Law, Filed May 2, 1983

In any event, the secondary references relied on by defen-
dants are merely cumulative to United States Patent No.
3,301,809, issued January 31, 1967 to Goldberg, based on an
application filed April 23, 1965. (TX 28). The Goldberg
patent was considered by the Patent Office examiner during the
‘388 prosecution (AX 1-2).

Neither Goldberg nor the other references relied upon
disclose or otherwise indicate that vinyl acetate-ethylene emul-
sions copolymerized in the presence of PVOH would have good
heat resistance, good machining properties, good flexibility,
high molecular weight, or any of the other characteristics which
make the product of the ’388 patent an outstanding laminating
adhesive. (Tr ( Vanderhoff) 2786, 2788, 2797-98, 2805, 2810,
2816, 2820, 2826, 2829, 2833-34; AX 907/907A; Tr ( Erikson)
83-98, 102-03; AX AA; Tr (Gaylord) 1883-84).

From the foregoing, it is apparent that the defendants have
cited no new references which add anything to the two most
pertinent references, Worrall and the ’851 patent, both of which
were before the Patent Office. Taken together, those two
references show: some adhesive properties, vinyl acetate-
ethylene copolymerization, the batch vinyl acetate/semi-
continuous ethylene with equilibration process, ethylene and
solids contents within the claimed range and polymer intrinsic
viscosity between | to 2.5. What they do not show is the
combination of all the foregoing properties together with both
copolymerization in the presence of a protective colloid,
particularly PVOH, and the existence of the soluble fraction
having the aforesaid intrinsic viscosity. Neither do they, nor
any of the other references relied upon by defendants, disclose
or suggest the combination of the six adhesive properties which
Mr. Erikson testified were disclosed for the first time by the ’388
patent. (Tr (Erikson) 102-03; Tr (Gaylord) 1883-84; AX AA,
907/907A). In short, defendants’ additiona! references are
merely cumulative to the references available to the Patent
Office. The Court concludes, therefore, that defendants have

A-40

District Court Order And Opinion,
Including Findings Of Fact And
Conclusior » Of Law, Filed May 2, 1983

not overcome the presumption of validity; none of the refer-
ences anticipates any of the eleven claims of the ’388 patent.

7. The Invention Of The ’388 Patent Was Not Obvious
To A Person Of Ordinary Skill In The Art At The
Time The Invention Was Made

As discussed in the preceding sections, the prior art which
was available before 1967 when the ’388 patent application was
filed does not point in the direction of the ’388 invention. On
the contrary, as Dr. Vanderhoff carefully explained, the prior
patents and applications teach away from the claimed adhesive
compositions. (Tr ( Vanderhoff) 2797, 2802-03, 2808-09, 2813-
14, 2818-19, 2822-24, 2828-29, 2832-33, 2837-38, 2840-41; AX
907/907”

For this reason, even if it is assumed that the level of
ordinary skill in this art was very high, the substantial differ-
ences between the claimed invention and the prior art are such
that the invention was not obvious.

On the obviousness issue, the defendants raise another
argument. They contend that since at least one known
laminating adhesive of the day, Daratak B, and various of the
earlier homopolymer adhesives such as Vinac XX, employed
PVOH, then it was obvious to use PVOH in the vinyl acetate-
ethylene work. This argument fails for three basic reasons.

First, this is no more than an argument that it would have
been “obvious to try” PVOH. But the law, as previously stated,
is that “obvious to try” is not the appropriate legal test of the
statute, 35 USC § 103. Second, it is by no means clear that it
would have been obvious to try the combination of PVOH with
a vinyl acetate-ethylene copolymer. Alone, PVOH had not
remedied the cohesive strength problem as shown in the poor
performance of Daratak B on this score. Third, in order to
satisfy the obviousness requirements of the statute, the ’388
products’ properties would have to be obvious as well. The

A-41

District Court Order And Opinion,
Including Findings Of Fact And
Conclusions Of Law, Filed May 2, 1983

evidence here is overwhelming that the properties of '388
adhesive were wholly unexpected. (Tr (Erikson) 83-84, 95; Tr
(Vanderhoff) 2786, 2788, 2797-98, 2805, 2810, 2816, 2820,
2826, 2829, 2833-34; Tr (Gaylord) 1883-84; Tr (Lindemann )
1512-14; AX 751, p.470, 907/907A, AA).

The unexpected properties of the new adhesive com-
position and the long felt need for the ideal laminating
adhesive, both discussed earlier in this opinion, were shown by
the unrebutted testimony of Mr. Erikson. (Tr (Erikson) 78-79,
102-03; AX AA). The early work at Airco also supports these
findings.

After several months of work and several unsuccessful
experiments, the Example 8 product was first produced in an
experimental run, P-335, on March 15, 1966. (TX 98-99, 105;
AX 622, 707; Tr (lIacoviello) 2696, 2698-99). That product
was tested for adhesive properties both by Mr. Iacoviello’s
group and by the full-scale adhesive testing laboratory headed
by Mr. Rosenblum. Mr. lacoviello’s tests showed good peel
strengths for some substrates, but gave meaningless results for
vinyl, because of the atypical material used. (TX 148/AX 279,
pp. 13, 38; Tr (Lindemann) 1522-25; Tr (lIacoviello) 2697-98,
2728-30; Iacoviello Dep. 51-57). The tests conducted in Mr.
Rosenbluin’s group, however, immediately showed that the
P-335 product had dramatically better peel strength, better
aging characteristics and better plasticizer response than the
commercial standard, Daratak B. (Tr (Lindemann) 1524-30;
Tr (Iacoviello ) 2698-99, 2734; AX 260/627, pp. 6 et seq., 629;
Rosenblum Dep. 23-24, 27-28; Blades Dep. 336-39; Iacoviello
Dep. 342-43, 373-77).

When the P-335 product was scaled up for pilot plant
production, tests on the resulting product, labeled “414-AS-
F4,” confirmed all the earlier results of the P-335 experiment.
(AX 639; Iacoviello Dep. 423 et seqg.). In addition to peel
strength, aging characteristics, and plasticizer response, Mr.
Rosenblum’s group measured the new product’s creep resis-

A-42

District Court Order And Opinion,
Including Findings Of Fact And
Conclusions Of Law, Filed May 2, 1983

tance (cohesive strength). Again, the results were dramatically
better than the industry standard, Daratak B. (AX 748, p. 113;
Iacoviello Dep. 323-24). As a consequence of these new
properties, the product was immediately accepted by the in-
dustry. (AX 642, 644, 748, p.113; Tr (Jaffe ) 525-26; Iacoviello
Dep. 323-24, 440-42, 447-49).

8. Commercial Success And Other Indicia Of
Nonobviousness

The foregoing conclusion of nonobviousness is reinforced
by recognized indicia of nonobviousness: (a) the product was
an immediate and substantial commercial success; (b) there is
evidence of acquiescence by others; and (c) defendants here
copied the ’388 adhesive composition rather than use any of the
compositions of the prior art.

Mr. Harold L. Jaffe, the Airco executive in charge of
marketing Airflex 400, testified to the commercial success of the
product. Mr. Jaffe’s comparison of the sales of Airflex 400 to
the sales of other relevant products shows the dramatic com-
mercial success of this new product.

As Mr. Jaffe pointed out, prior to the invention of the ‘388
patent, managers at Airco optimistically estimated that the
market for any vinyl acetate-ethylene adhesive would level out
at sales of not more than about 10 million pounds per year.
(AX 880; Tr (Jaffe) 529). Yet sales of Airflex 400 were
approximately 12 million pounds in 1968, about 23 million
pounds in 1970 and almost 40 million pounds in 1973, a sales
growth unprecedented n this field. (AX 879/879A; AX 785-
86; Tr (Jaffe) 536).

Compared to sales of other vinyl acetate-ethylene copoly-
mers marketed by Aira (between 4 and 12 million pounds),
Airfiex 400 is by far the greatest success (40 million pounds).
(Tr (Jaffe) 523; AX 879A; AX 787-89). When the sales
growth of Airflex 400 s compared to the sales growth of Air

A-43

District Court Order And Opinion,
Including Findings Of Fact And
Conclusions Of Law, Filed May 2, 1983

Products’ vinyl acetate homopolymer products (11% com-
pounded in 1968-1973, about the same as the industry wide
growth ), Airflex 400 again was the far greater performer (50%
compounded in those same years). (Tr (Jaffe) 532-33; AX
879/879A; AX 787-89).

The trial testimony establishes that the commercial success
of Airflex 400 was due to the unexpected properties it exhibited.
(Tr (Jaffe) 537). Mr. Erikson testified that when he received
his first sample of the new product, he determined that it was
the first product ever available to the adhesives industry which
combined the six important properties long desired by that
industry for a laminating adhesive. (Tr (Erikson) 78-79, 102-
03; AX 654, AA). Mr. Myrick, a former employee of H.B.
Stuck Adhesives, testified that Airflex 400 “‘made” Stuck Adhe-
sives’ Memphis, Tennessee plant; prior to the advent of Airflex
400, Stuck’s customers had not been able to laminate vinyl
successfully. (Tr (Myrick) 153-54, 158-60). Indeed, even CST
declared in proceedings before the Patent Office that Airflex
400 had an enormous commercial impact on the adhesives
industry, and that it was the largest selling polyvinyl alcohol-
protected adhesive. (AX 3, pp. 24, 27, 37).

Further confirmation of nonobviousness is shown by
acquiesence by others in the patent’s validity. Mr. Jaffe testified
that, in order to encourage sustained rapid growth in the
market for Airflex 400, Air Products, at its customers’ insist-
ence, sought to find a second source of supply. (Jaffe Dep. 467-
70). To that end, Air Products entered intw negotiations with
DuPont which culminated in DuPont’s agreement to accept a
license under the ’388 patent and become a “second supplier.”
DuPont Agreed to royalty payments approximately eight times
greater than its initial offer. (TX 217, 224, 225, 227, 238-39;
Jaffe Dep. 394-97, 474-75, 492-93, 499-500; Wolfson Dep. 29-
31, 42; Szanto Dep. 45-46, 54-55, 99-102).

DuPont agreed to these royalty terms even though it had
previously obtained a draft opinion concluding that the ’388

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District Court Order And Opinion,
Including Findings Of Fuct And
Conclusions Of Law, Filed May 2, 1983

patent was invalid. Given this, this Court can only conclude
that the draft opinion was prepared for negotiating purposes.
DuPont itself apparently never gave its opinion any weight;
indeed, the opinion was never formalized. (Wolfson Dep. 14,
22, 27-28; Szanto Dep. 69, 71-72, 107-09, 117-18; AX 840; see
Jaffe Dep. 489-91; Ellis Dep. 47-61 ).

During its negotiations with Air Products, DuPont also
raised arguments with respect to alleged grounds four avoiding
infringement. Among other things, DuPont argued that the
addition of an unnamed third monomer avoided infringement.
Yet DuPont agreed to the payment of royalties despite the
existence of these purported “non-infringement” arguments.
(AX 733; TX 219, 223-26, 230, 262; Jaffe Dep. 464-67, 483-85,
488-90; Rosenblum Dep. 79-81; Wolfson Dep. 33-34, 37, 40-
48; Szanto Dep. 31-33, 41-44, 49-53, 98).

Long before its purchase of CST, Nationa! Starch obtained
an opinion that the ’388 patent was invalid, but nevertheless
entered into licensing negotiations with Air Products to obtain a
license under the ’388 patent. (TX 263-64). National Starch
chose not to take a license and did not manufacture vinyi
acetate-ethylene copolymer emulsion products covered by the
’388 patent until it acquired CST. (Tr (Nadler) 1613-16). The
Court accordingly gives no weight to the National Starch
invalidity opinion.

>

The remaining indicia of nonobviousness is defendants
copying of plaintiff's patented product. That copying is detailed
in the infringement section of this opinion.

C. Defendants’ Othcr Defenses

The defendants have raised a number of other defenses in
an attempt to defeat the ’388 patent. The Court will take these
up separately.

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District Court Order And Opinion,
Including Findings Of Fact And
Conclusions Of Law, Filed May 2, 1983

1. The § 112 Defense

Defendants argue that Messrs. Lindemann and Iacoviello
failed to satisfy the disclosure requirements of 35 USC § 112,
and in particular that they failed to disclose the best mode
known to them for carrying out their invention. Section 112
requires that the patent specification contain a written descrip-
tion sufficient to teach one skilled in the art how to practice the
invention. It also requires that an inventor set forth the “best
mode contemplated by the inventor” for carrying out his
invention at the time the application is filed. What constitutes
the “best” mode is to be judged by the inventors, and it is
settled that the “best mode” need not be the actual commercial
mode ultimately employed. Jn re Gay, 309 F.2d 769, 773
(CCPA 1962).

Defendants’ argument appears to be that the inventors
were charged with the duty of disclosing to the Patent Office the
reaction control apparatus and agitation system of the 500
gallon semi-works reactor used by Airco in scaling up the
Example 8 composition for pilot plant production. They argue
that the scaled-up reactor produced a better product than the
experimental Example 8 product. Defendants’ best mode
argument fails for the following reasons.

As Mr. lacoviello testified, he felt that the best way for
carrying out the invention of the ’388 patent was his bench-
scale procedure described in Example 8. (Tr (Iacoviello) 2696,
2702-06, 2721, 2738). That procedure produced the best
product and it was the safest way to conduct the polymeriza-
tion. (Jd.). It is also telling on this issue that Mr. Lindemann,
defendants’ own expert, gave no testimony in support of the
defendants’ best mode defense.

The evidence of record also fails to show that the inventors
ever had any personal knowledge of the details of the reaction
control apparatus and system associated with the 500-gallon
semi-works reactor, or that they had any knowledge as to the

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District Court Order And Opinion,
Including Findings Of Fact And
Conclusions Of Law, Filed May 2, 1983

details of the agitation apparatus of that reactor. (Tr (laco-
viello) 2709).

The Court has considered defendants’ other so-called best
mode objections and found them meritless. The specification is
directed to a person skilled in the art; he would know precisely
how to carry out the process of Example 8 to get the product
there described. (Tr ( Vanderhoff) 256-59, 351-57: lacoviello
Dep. 544-47, 682-84).

Accordingly, the Court finds that the inventors of the ‘388
patent satisfied the requirements of 35 USC § 112.

2. Defendants’ Fraud Contentions

Defendants have charged plaintiff Air Products and its
predecessor in interest, Airco, with fraud in the prosecution of
the ‘388 patent. Defendants allege that Airco and Air Products
failed to disclose to the Patent Office certain prior art materials,
in particular the German application, the French patent and
information concerning Daratak B and Gelva TS-100. They
charge that plaintiffs attorney mischaracterized the Worrall
322 patent when he himself brought it to the Office’s attention.
And they charge that Airco and Air Products falsified or
misrepresented the data set out in Table | for Example 8, the
write-up of which is that of Run P-335. (See Tr (lacoviello)
2737-39).

The allegation of fraud on the Patent Office is a serious
charge and the courts have demanded a substantial quantum of
proof to establish the claim. Norton v. Curtiss, 433 F.2d 779,
797 (CCPA 1970); Oetiker v. Jurid Werke GmbH, 671 F.2d
$96, 600 (D.C. Cir. 1982); Tate Engineering, Inc. v. United
States, 477 F.2d 1336, 1345 (Ct. Cl. 1973). The defendants,
asserting fraud, carry a heavy burden of persuasion. Krenzer v.
Stojfel, 5S1 F.2d 1214, 1217 (CCPA 1977). Clear proof of
“specific intent” that Airco or Air Products “knowingly and
willfully” misrepresented facts to the Patent Office is also

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District Court Order And Opinion,
Including Findings Of Fact And
Conclusions Of Law, Filed May 2, 1983

required to establish a charge of fraud. O0etiker, 671 F.2d at
600.

In general, a finding of fraud requires proof of two specific
elements: (1) proof that information was, with bad faith intent,
withheld from or misrepresented to the Patent Office during the
prosecution of the patent; and (2) proof that the mis-
representation or Omission was material to the prosecution of
the patent, e.g., proof that the allowance of the patent was the
result of such bad faith conduct. Norton v. Curtiss, 433 F.2d at
793; 41MI Industries, Inc. v. E.A. Industries, Inc., 204 USPQ
568, 589 (W.D.N.C. 1979), aff'd, 644 F.2d 876 (4th Cir.
1981). Absent proof of each of these elements, no fraud can be
found.

(a) The Alleged Fraudulent Failure To Cite Prior
Art

With regard to the charge that a reference was fraudu-
lently withheld, the proof must, as a minimum, establish that
the reference is more relevant to the claimed invention than was
the art considered by the Patent Office, and that the failure to
disclose that reference to the Patent Office was deliberate and
intentional, together with proof that such bad faith conduct was
material to the allowance of the patent. Plasser American Corp.
v. Canron, Inc., 546 F. Supp. 589, 603 (D.S.C. 1980); Feed
Service Corporation v. Kent Feeds, Inc., 528 F.2d 756, 762-63
(7th Cir. 1976); General Battery Corp. v. Gould, Inc., 545
F Supp. 731, 740. (D. Del. 1982); Solvex Corp. v. Freeman, 199
USPQ 797, 800 (W.D. Va. 1976); Kelley Manufacturing Co. v.
Lilliston Corp., 200 USPQ 670, 692 (E.D.N.C. 1978), aff'd, 636
F.2d 919 (4th Cir. 1980).

The testimony in this case shows that Mr. Lindemann and
Mr. Stewart, the Airco patent attorney responsible for drafting
the application, knew of the French and German references
relied on by defendants. (TX 89). But from Mr. Stewart's
testimony it is clear that he did not believe that the German

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District Court Order And Opinion,
Including Findings Of Fact And
Conclusions Of Law, Filed May 2, 1983

‘085 application (TX 3, 3A, 9) or the French patent (TX 6B, 7)
were pertinent to the subject matter claimed in the application
either when it was originally filed on March 13, 1967 or when it
issued. (Stewart Dep. 135-38, 183-86, 243-44, 264-68, 297-98,
302-03; cf. Stewart Dep. 26-27; TX 250-51).

In the one instance where Mr. Stewart did consider the
German application relevant, in connection with the first pro-
cess patent application filed by Airco, he did bring it to the
Patent Office’s attention. (TX 19, 74A; Stewart Dep. 73-76,
196-97, 243-44, 265-66, 297-98, 302-03). Mr. Stewart’s con-
temporaneous belief that these patents were not relevant or
material prior art was confirmed at trial by Dr. Vanderhoff’s
testimony. (Tr ( Vanderhoff) 2778-2803; AX 907/907A). The
German application and the French patent are at best merely
cumulative to the art which was of record during the ‘388
prosecution. Defendants’ expert, Mr. Modance, agreed that
cumulative art need not be cited to the Patent Office. (Tr
(Modance) 2572).

Defendants point to an early Airco report (TX 67, 79),
which states that a composition of matter claim probably could
not be obtained because of the German application. As both
Mr. Lindemann and Mr. Modance admitted at trial, however,
that document was dated well over two years before the
claimed invention was made. (Tr (Lindemann) 1441-45; Tr
( Modance ) 2541-43).

Defendants also argue that the German application was
the “jumping-off” point for Airco’s entire vinyl acetate ethylene
program, and therefore should have been cited. (TX 62, 64-66,
89; Blades Dep. 130-31; Stewart Dep. 188-95). But that

~ starting point was two and one half years before the invention
of the ‘388 patent was made. By that time, the German
reference had become irrelevant in view of the substantial
progress made by Mr. Lindemann and his co-workers as
reflected by the ‘851 patent, which was considered by the

en

ee ere ee re nee

ee

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District Court Order And Opinion,
Including Findings Of Fact And
Conclusions Of Law, Filed May 2, 1983

examiner. (Tr (Lindemann) 1441-45; Tr (Modance) 254]-
43).

Defendants also point to the citation of the German
application and French patent during the prosecution of certain
foreign patent applications based on the application for the ‘388
patent. (AX 756; TX 287-98; Ellis Dep. 185 et seg.; Stewart
Dep. 283-90). The claims against which the foreign patent
authorities cited these patents do not appear in the record; that
failing, together with the difference in legal standards which
may pertain, of which defendants have adduced no proof,
prevents the Court from finding any fault with the failure to cite
these references.

In any event, Dr. Vanderhoff established at trial that these
two references, like the other prior art relied upon, actually
teach away from the claimed invention. (Tr ( Vanderhoff)
2795-97, 2802-03). There is no “fraud” where arguments
favorable to patentability might be but are not made to the

examiner.
y,

Furthermore, defendants adduced no proof of any deliber-
ate intent to withhold any information from the Patent Office,
by either the inventors or by their counsel, Mr. Stewart or Mr.
Ellis. Nor is there any evidence that counsel or the inventors
were guilty of gross negligence for failing to cite any materials.

(b) Defendants’ Contention That Plaintiff Committed
Fraud By “Mischaracterizing” The Worrall Refer-
ence

Defendants further maintain that Mr. Ellis, who took over
the prosecution of the patent application upon Air Products’
purchase of the business from Airco, committed fraud by
mischaracterizing the Worrall reference. Since the reference
was made available to the Patent Office examiner, thus per-
mitting the examiner to study and consider the reference and
make his own independent determination as to the accuracy of
the applicants’ arguments, it is difficult to understand defend-

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District Court Order And Opinion,
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Conclusions Of Law, Filed May 2, 1983

ants’ fraud charges. See Skil Corp. v. Lucerne Products, Inc.,
489 F.Supp. 1129, 1161 (N.D. Ohio 1980), aff'd, 684 F.2d 346
(6th Cir. 1982). The examiner had the patent before him, he is
assumed to understand it, and he presumably read it after it
was brought to his attention. Furthermore, as this Court has
already found, Worrall’s products are not taught as possessing
utility as laminating adhesives. Consequently Mr. Ellis’s state-
ment that the products do not possess such properties cannot be
fraud. Moreover, defendants have shown no intent to mislead
the examiner. (TX 47, 48; Ellis Dep. 31-37, 245-47).

(c) Defendants’ Allegation Of Fraud In Connection With
Certain Data Set Forth in Table I

Defendants also charge fraud concerning Example 8 and
the peel strength data set out in Table 1. It is settled law,
however, that all patent applicants are entitled to make, and are
expected to make, a good faith judgment as to what test results
are pertinent and require disclosure. Ne/son v. Bowler, 626 F.2d
853, 858 (CCPA 1980); Special Metals Corp. v. Teledyne
Industries, Inc., 215 USPQ 698, 707 (W.D.N.C. 1982); Mobil
Oil v. Filtrol Corp., 186 USPQ 252, 260 (C.D. Cal. 1975);
Rohm & Haas v. Owens-Corning Fiberglas Corp., 196 USPQ
726, 739 (N.D. Ala. 1977). In other words, the applicant is
obligated to present to the Office only those test results that
fairly and accurately represent the true scientific facts. Special
Metals Corp., 215 USPQ at 705-06; General Battery Corp., 215
USPQ at 1028.

The testimony shows that the source of the data reported in
Table 1 for Example 8 is the series of tests run by Messrs.
Iacoviello and Rosenblum in 1966. Most of the data in Table 1
came from Mr. Iacoviello’s original peel tests, which were run
at a peel rate of 5” per minute as reported in the patent. In
some instances, however, Mr. Rosenblum’s data was used
because Mr. Iacoviello’s tests had given meaningless results.
(Iacoviello Dep. 51-57, 314, 364-71). That was the case for the

St iy lt Tit a

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District Court Order And Opinion,
Including Findings Of Fact And
Conclusions Of Law, Filed May 2, 1983

Example 8 peel strength for vinyl film. Mr. lacoviello’s tests
with his atypical vinyl had shown essentially no peel strength
(i.e. “less than 0.1”) for the PVOH-protected products he
tested, P-335 and Daratak B, the latter being the commercial
bench mark of the time. Mr. Iacoviello’s own contemporaneous
report confirms that the data was insignificant. (AX 279, pp.
13, 38; Tr (Iacoviello) 2697-98, 2704-06, 2728-31; Tr (Lin-
demann) 1522-25; Iacoviello Dep. 120-23, 300-01, 303-09, 456
et seq., 517 et seq; Stewart Dep. 204-11, 217, 229-32, 234-35,
272-75, 308, 309-10, 315-16; Ellis Dep. 23-24, 26-27).

Mr. Iacoviello and Mr. Stewart consequently used the
representative data obtained by Mr. Rosenblum for both the
original P-335 product and the same product produced on a
larger scale in the 500 gallon reactor, Run 414-A5-F4. Mr.
Rosenblum’s tests had been run at peel rates of 2” per minute
and 20” per minute. For 2” per minute, he obtained values of
3.0 (unplasticized product) and 3.5 (plasticized product) for
the original P-335 product, and values of 3.8 (unplasticized )
and 4.0 (plasticized) for the scaled-up run. For the 20” per
minute tests, he obtained values of 5.5 for both the unplasti-
cized and plasticized original P-335 product and 6.0 for both
the unplasticized and plasticized scaled-up product. (AX 627-
29, 639). These results are in accord with the general rule that
as the peel rate increases, the measured peel strength also
increases. (Tr (Lindemann) 1528-29; Tr (Modance) 2594-
95).

In order to arrive at representative values for Example 8 at
the 5” per minute rate, which was used for the other data in
Table | of the ’388 patent, the higher of the 2” per minute
results were used. Because the 5S” per minute values would, if
anything, have been higher than the 2” per minute values, this
choice is entirely appropriate or even somewhat conservative.
In summary, the data set forth in Table | is a fair and accurate
representation of the properties of the Example 8 product. (Tr
(Iacoviello) 2704-06, 2721, 2724-25, 2738-39; Stewart Dep.

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District Court Order And Opinion,
Including Findings Of Fact And
Conclusions Of Law, Filed May 2, 1983

236, 272-75, 308-10, 315-16; Jaffe Dep. 379-82; AX 662, 665;
Rosenblum Dep. 63-64, 92-94; Blades Dep. 345-47).

To the extent defendants contend that it was inappropriate
to use the data from the scaled-up rather than the laboratory
scale product, their arguments are unsound. The testimony of
defendants’ expert, Dr. Gaylord, is itself dispositive, of this
fraud issue; he admitted that the differences in procedures for
the original and scaled-up runs would not have produced any
significantly different results in peel, i.e. adhesive, strength. (Tr
(Gaylord) 1831-32). Consequently, as to peel strength, there
could have been no misrepresentations. As to cohesive
strength, if there were any differences, the original P-335
product was, if anything, better than the scaled-up 414-A5-F4
product. P-335 had higher benzene insolubles; those higher
insolubles mean that the P-335 product had higher creep
resistance, and there is no dispute that the correct insolubles
were reported for Example 8. (Tr (Gaylord) 1831-32; Tr
(lacoviello) 2740-41; Tr (Lindemann) 1497-98; Rosenblum
Dep. 50-56).

Defendants have also raised questions about the cellulose
acetate data reported in Table | for Example 8. The cellulose
acetate use has never been an issue in this lawsuit or in the
Patent Office prosecution. Moreover, all of that data was
supplied to Mr. Stewart by deferdants’ own expert, Mr.
Lindemann. The cellulose acetate data used for Example 8 in
Table I was obtained from Table III of a memo sent by Mr.
Lindemann to Mr. Stewart in October of 1966. (TX 175). The
data, then, is data obtained in actual experiments and there has
been no showing that it was used in any way whatsoever to
mislead the Patent Office.

In summary, since defendants failed to prove any of the
elements required to substantiate their charges of fraud, on any
of the grounds alleged, the Court accordingly finds that there
was no fraud committed in the prosecution of the ‘388 patent.

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District Court Order And Opinion,
Including Findings Of Fact And
Conclusions Of Law, Filed May 2, 1983

D. The Court Concludes That The ’388 Patent Is Good And
Valid In Law

For the foregoing reasons, the Court finds that the defend-
ants have not satisfied their burden of rebutting the presump-
tion of validity which attaches to the ’388 patent and all its
claims, even by a preponderance of the evidence. The pre-
sumption therefore stands and, having considered all the
evidence, the Court finds the patent and its eleven claims are
valid.

IV. PATENT INFRINGEMENT

Plaintiff's charges of infringement are the following:

a. Defendants have directly infringed claims |
through 3 of the ’388 patent by making and selling four
adhesive products, Dur-O-Set E-200, E-216, E-220 and E-
230.

b. Defendants have directly infringed claims 4
through 11 of the ’388 patent by making and using
laminated articles using the same four adhesive products.

c. Defendants have induced infringement of claims |
through 6 and 8 through 10 by inducing their customers to
make laminates using defendants’ E-200, E-216, E-220 and
E-230 products.

The Court finds in favor of the plaintiff on each of these
three issues for the reasons set forth below.

A. Defendants Directly Infringe Claim 1

Plaintiff's first charge, direct infringement, may be proven
by showing either: (1) that defendants’ products literally fall
within the scope of the claims; or (2) to the extent they are not
literally within the scope of the claims, they are equivalent to
the claimed composition. In considering literal infringement,

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District Court Order And Opinion,
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Conclusions Of Law, Filed May 2, 1983

“resort must be had in the first instance to the words of the
claim.” If accused matter “falls clearly within the claim,
infringement is made out and that is the end of it.” Graver Tank
& Mfg. Co. v. Linde Air Products Co., 339 US 605, 607 (1950);
International Nickel Co. v. United States, 175 USPQ 209, 215
(Ct Cl. 1972); Ziegler v. Phillips Petroleum Co., 483 F.2d 858,
868 (Sth Cir. 1973).

Under the doctrine of equivalents, a patent claim is
infringed if the accused product performs substantially the
same function in substantially the same way to obtain substan-
tially the same result. Graver Tank & Mfg., 339 US at 608;
Autogiro Co v. United States, 384 F.2d 391, 400 (Ct. Cl. 1967).
Under this doctrine, an accused infringer cannot avoid in-
fringement by making minor changes in the accused product,
process, or article of manufacture. Ziegler, 483 F.2d at 868;
Plasser American Corp., 546 F.Supp. at 604.

Plaintiff has proved both literal infringement and in-
fringement under the doctrine of equivalents.

1. Defendants’ E-200 Product Directly Infringes Claim
1 Of The ’388 Patent

The origins of the defendants’ E-200 and the related ““E”
series products go back to 1970. By that time Mr. Lindemann
had left the employ of Airco and was Vice President of
Research and Deveiopment for defendant Chas. S. Tanner.
(Tr (Lindemann) 606-07, 1157).

While the ’388 pateut had not at that time been issued in
the United States, Mr. Lindemann knew that corresponding
foreign applications had been filed and published in various
foreign countries. He obtained a copy of the Dutch equivalent,
translated Example 8 into English, the same example corre-
sponding to plaintiffs commercial Airflex 400 product, and
used that example for the first experimental work at CST. (Tr
(Lindemann) 608-09, 1385-86; Tr (Wacome) 449-50; AX 11:
AX 13; Tr (Iacoviello) 2696; Tr (Cordeiro) 708-10).

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District Court Order And Opinion,
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Conclusions Of Law, Filed May 2, 1983

Mr. Lindemann instructed one of his research chemists,
Mr. Donald Wacome, to reproduce the Example 8 adhesive
composition. (Tr (Lindemann) 608-09, 1385-86; Tr (Wa-
come) 449-50; AX 11, 13). Mr. Wacome was immediately
successful. (Tr (Wacome) 456). This experiment then led to
subsequent reproductions, all of which were designed to pro-
duce a product which could compete in the market with
plaintiffs Airflex 400. (Tr (Wacome) 457-62; AX 53, pp. 61,
63; AX 57-58; AX 59, pp. 4, 15, 17, 27, 29, 31; AX 73; AX 507;
see AX 111; Sembert Dep. 93-97).

CST’s initial commercial efforts in the vinyl acetate-
ethylene field were directed to the manufacture of copolymers
useful in the textile, rather than the adhesives industry. By
1975, however, after CST had been acquired from its original
owners by the Ciba-Geigy Corporation, defendant CST com-
mitted itself to the commercial manufacture of the Airflex 400-
type product. (AX 70). After purchasing and installing the
necessary commercial equipment, CST commenced manufac-
ture of its new product, called “E-200”, in the fall of 1977.
(AX 768, pp. 12-13).

In September or October of 1978, Mr. Blakely, then
President of defendant CST, and Mr. Lindemann attempted to
sell E-200 to the Borden Company, one of plaintiffs major
customers for Airflex 400. Messrs. Blakely and Lindemann told
Mr. Erikson, who was then responsible for adhesives at Borden,
that E-200 was equivalent to Airflex 400 and that the E-200
product could be directly substituted for plaintiffs product.
Neither Mr. Blakely nor Mr. Lindemann suggested to Mr.
Erikson that E-200 was any better than, or different from,
Airflex 400. (Tr (Erikson) 105-07).

At about this same time, defendant CST also sold E-200 to
Mr. Larry Myrick of Universal Adhesives in Memphis, Ten-
nessee, as a direct replacement for Airflex 400. Mr. Myrick’s
company used E-200 as a replacement for Airflex 400 and, in
fact, after purchasing some of the E-200 product, Mr. Myrick

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District Court Order And Opinion,
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Conclusions Of Law, Filed May 2, 1983

placed it in the same storage tank he was then using for Airflex
400. (Tr (Myrick) 153-54, 162-63, 165, 169).

The evidence at trial also showed that defendant CST told
Mr. William Donaldson, the Executive Vice President and
Chief Operating Officer of Southeastern Adhesives, that E-200
was a direct replacement for Airflex 400. (Tr ( Donaldson )
175, 179-81). Defendant CST never stated or suggested that E-
200 was any different from Airflex 400. (Tr ( Donaldson )
181).

Even the defendant National Starch, who purchased CST
only July 31, 1980 ( Defendant’s Answer, J 3), evaluated the E-
200 product and found it comparable to Airflex 400. (TX 564-
66; Tr (Nadler) 1614-15, 1619-21, 1657-67, 1670, 1688 et seq.,
1694-95).

(a) Chemical Analyses Of The E-200 Product Estab-
lish Infringement

Prior to the commencement of this action, both the plain-
tiff, Air Products, and its licensee, DuPont, independently
analyzed defendant CST’s E-200 product; both concluded it
infringed the claims of the ’388 patent. Plaintiff concluded that
E-200 is a vinyl acetate-ethylene emulsion copolymer, having
almost the same performance properties as Airflex 400. (AX
680, 724, 725; Tr (Vanderhoff) 343-44; Rosenblum Dep. 70-
75, 82-89).

The DuPont report concluded that:

We have obtained three separate samples of the
acetate/ethylene emulsion produced by Tanner that clearly

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District Court Order And Opinion,
Including Findings Of Fact And
Conclusions Of Law, Filed May 2, 1983

place his product within Claim | of the subject patent. The
data is summarized below.

U.S. 3,708,388 cst
Copolymer, 5-40 17.2
% ethylene
Emulsion, 45-60 56.4
% solids
Intrinsic 1-2.5 1.18*
viscosity, dl/g
(in benzene,
30°C)

Protective 0.05-2.0 1.66
colloid, %

Type of PVA &/or HEC PVA
protective

colloid

* This value is the average of three samples obtained from three
separate sources and which we are assured are products from Charles S.
Tanner. Intrinsic viscosity values of 1.02, 1.17 and 1.34 were obtained
by acetone extraction. (AX 726; see TX 240, 243-44; Wolfson Dep. 50-
54).

Analyses conducted by Air Products subsequent to the com-
mencement of this action further confirm and support the
Court’s findings that defendants’ E-200 product (as well as
defendants’ E-216, E-220 and E-230 products) infringes the
claims of the ’388 patent. (AX 752).

The evidence adduced at trial showed that the Borden
Company received samples of defendants’ E-200 product in the
fall of 1978. (Tr (Erikson) 105-08). Borden tested the E-200
samples and determined that there were no significant differ-
ences between E-200 and Airflex 400. (Tr (Erikson) 107-08).

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District Court Order And Opinion,
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Conclusions Of Law, Filed May 2, 1983

(b) Defendants’ Records Show That Their E-200
Product Is Within The Scope Of Claim 1

Plaintiffs expert, Dr. Vanderhoff, studied defendants’ in-
ternal records and provided the Court with summaries which
were unchallenged. (AX 220, 566-82; Tr ( Vanderhoff) 275-
81). At the outset, the Court finds that, in accordance with Dr.
Vanderhoff’s testimony, the process used by defendants is the
same as the process disclosed by plaintiff in Example 8 of the
patent; in other words, defendants employ (1) a batch vinyl
acetate, semi-continuous ethylene process; (2) an equilibration
period; (3) a redox catalyst system; and (4) copoiymerization
in the presence of PVOH. That process leads to the product of
Example 8. (Tr ( Vanderhoff) 345-47, 351-57; AX 212, 582,
857; Schwirian Dep. 775).

Defendants’ formulation sheets show that E-200 is an
adhesive composition that consists essentially of an aqueous
vinyl acetate-ethylene copolymer emulsion as required by claim
1. (AX 566-70; Tr (Vanderhoff) 282-83, 297-99; Tr (Lin-
demann) 608; AX 160). On this point, there seems to have
been little, if any, dispute between the parties.

Dr. Vanderhoff reviewed 672 runs of the E-200 product.
The average ethylene content was 17%, thus placing the E-200
product squarely within the scope of claim |. There were two
anomalous runs outside the claims containing 3% and 4%
ethylene. (Tr ( Vanderhoff) 282-83; AX 220; see AX 580, p. 2,
Runs SG 205 and SG 222).

The solids conterts for nearly all of the 672 E-200 runs
were reported. All were very close to 55% solids, well within
the claimed range of 45 to 60% of claim 1. (AX 220, 574-76,
580-81; Tr ( Vanderhoff) 283-84).

The intrinsic viscosity measurements determined for the
products fell in the range of 0.47 to 1.47, the average intrinsic
viscosity being 0.92. Of these, all except one were inside the
range specified in claim 1. (Tr ( Vanderhoff) 284; AX 220; AX

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Including Findings Of Fact And
Conclusions Of Law, Filed May 2, 1983

580, p. 8, Run SL 216). The claimed range is “1 to 2.5.”
Scientifically, because the number “1” is stated to only one
significant figure, as opposed to 1.0, it includes values between

0.51 and 1.49; consequently all the intrinsic viscosity values «

except the anomalous 0.47 value are within the claim. (Tr
( Vanderhoff) 273, 437-38). This conclusion is borne out by the
Patent Office proceedings. Both the applicants’ attorney and
the Patent Office examiner considered the intrinsic viscosity
limitation to include Example 8, which has an intrinsic viscosity
of .83. (AX 2, pp. 120-21; Tr (Vanderhoff) 215-16, 273; Tr
( Witherspoon) 1069-70).

In an attempt to exclude some of the E-200 runs, defend-
ants contend that the claimed lower limit of “1” should be
interpreted as 1.0. While the Court rejects this argument in
view of Dr. Vanderhoff’s testimony, even if the claimed range
were so interpreted, the intrinsic viscosities of these products
infringe under the doctrine of equivalents. The defendants
themseives have established that equivalency by selling prod-
ucts having instrinsic viscusities above and below 1.0 as the
same product (AX 220,580), and defendants have offered no
evidence that there are any consequential differences. On the
contrary, plaintiffs expert, Dr. Vanderhoff, testified that the
intrinsic viscosities of all of these products showed they con-
tained soluble copolymer of high molecular weight. (Tr
( Vanderhoff) 216, 300-01 ).

All of the formulation data provided shows the protective
colloid was PVOH. (Tr ( Vanderhoff) 284-86; AX 566-70, 580-
81). The average concentration of PVOH was 2.10%, and the
range was from 1.17% to 2.36%. (Tr (Vanderhoff) 285).
Accordingly, the Court finds that all of these runs satisfy this
limitation of claim |. The upper end of the claimed range for
protective colloid is ‘“‘about 2,” clearly embracing, literally, any
concentration less than 2.5 under the proper scientific inter-
pretation. (Tr ( Vanderhoff) 301-02). The Court therefore

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Conclusions Of Law, Filed May 2, 1983

concludes that defendants’ products literally meet this limita-
tion and also infringe under the doctrine of equivalents.

,

Accordingly, the Court concludes that all of defendants
E-200 products except the anomalous products of Runs SG 205,
SG 222 and SL 216, infringe claim | of the ‘388 patent both
literally and under the doctrine of equivalents.

2. Defendants’ E-216 Product Infringes Claim 1 Of

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385010_3195%3A2. Public record. Not legal advice.