Appendix — Chemical Cleaning, Inc. v. Dow Chemical Co.

U; 8. DISTRICT COURT FOR THE .

’ EASTERN DISTRICT OF LOPISIANA . ~

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Dow CHemicaL Co.

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CHEMICAL Cizaxtna, Inne: 5 9G

‘Order of Injunction

(Number and title ofnitted) (Filed: December 7, 1961)

The above-entitled action having. been brought by- The

| Dow Chemical Company for: infringements by Chemical

Cleaning, Inc., John H. Rusch and George Lewis of United . .

States, Letters” Patent 2,959,555 and the following -having

been stipulated ‘and: agreed by and between the yarns

‘hereto, by- their respective counsel,

Iv Is Onpenzp, Apsupekp AND ‘Drcreep:

1. That this court has jurisdiciton over the parties hereto

and the subject matter hereof. ~»_ |

2: That United States Letters Patent 2,959, 555, iene

. November 8, 1960, is valid; and that plaintiff, The Dow —

‘Chemical Company, is the lawful owner of the entire right,

- title and interest in and to said Letters Patent and the in- |

ventions thereof and has been such owner thereof since

its date of issuance.

| 3. That defendants; Chemical Cleaning, Inc., J cha i.

ou Rusch and George Lewis, have infringed said Letters Pat-

ent 2,959,555 by using or causing to be used methods of *

said Letters Patent and by making, causing to be made,

using or causing to be used, selling or causing to-be sold

_ products of said Letters, Patent. .

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4. That as a result of alld itaaaiinina by Chemical

Cleaning, Inc.,’ John H. Rusch and George Lewis of said

Letters Patent, plaintiff, The Dow Chemical Company, has

incurred, since the date. of issuance of said Letters Patent,

_ damages according to law.

5. That .a Writ of Injunction issue oon of and under the

' seal of this court directed to defendants, Chemical Clean- .

' ing, Inc., John H. Rusch and ‘George Lewis, their officers, ~

agents, servants, attorneys, employees, assdciates and

privies and those persons in active concert and participa-

tion with them, enjoining and restricting them and each of.

them from directly or indirectly infringing United ‘States

Letters Patent. 2,959,555 from offering or advertising

‘so to do, and from aiding or abetting i in any way contribut-

ing to the arena of any of the claimsof said Letters .

Patent. -. . (9) ‘ ,

6. In lieu of an: n accounting, counsel for the respective

= parties have agreed upon damagés, the payment and Te-

_ceipt of which is acknowledged. ©

s/ J. Sxetty Wricut

Umited States District Judge .

Daren: December 7th, 1961, ;

rg es | _ Conclusions.of Law.

1.: This Court has. statutory authority to grant relief and

to award damages, costs, attorneys’ fees and expenses,

e ‘against defendants, for violation of an injunction in a.

patent infringement case. 35 U.S.C., §§ 283, 284 and 285. .

2. Ina contempt proceeding for violation of an injunc--

tion against infringement, the questipn is whether the modi-

fied composition 1 is equivalent to t original in relation to

the patent in the suit. Patton_v. Stone, (5th Cir., 1949),

178 F.2d 515, 517; E-I-M- Co. v. Philadelphia Gear Works

(5th Cir, » 1985), 293 F. 2d 36, 40.

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3. The validity” of the. plafntiff’s patent 2,959,555 has

_ been determined between the parties and —_ issues are

res judicata.

°4. The modified solution employed by t the defendants in

their boiler cleaning operations is fully equivalent to the -

original adjudicated solution in relation to the’ patent in

suit, and does the same work and accomplishes substantially

the same result as thiourea. Graver Tank & M fg. Co. Ine.

v. Linde Air Products Co., 1950, 339 U.S. 605, 608, 609,

70 8. Ct. 854, 94 L. Ed. 1097. ee

5 The use of Sequestrol 60 by defendants ‘violated the

injunction and constituted infringement of plaintiff’s Pat-

ent No 2,959,555. ¢

6. Deferidants knowingly and wilfully violated the in-

junetion order of December 4, 1961, and are > guilty of civil

contempt.

New — Louisiana, December 30, 1965.

s/ Herperr W. CunisTawaEnny

United States District Judge

v

Sic Judgment | |

. (Number and title omitted) (Filed: January 7, 1966)

In accordance with the Findings of Fact and Conclusions

of Law made and entered this date; the Court now makes

and enters the. following J udgment:

It i is, for cause -shown, ORDERED, ADJUDGED AND Dcazsp

that. the said defendants Cu Cieanine, Inc., a cor-

poration, Joun H. Ruscu, individually, and Groce Lewis,

individually, are guilty ‘of wilful civil contempt of this

_ Court for having failed and refused to obey its Final Judg-

- ment and Injunction of December 7, 1961. Pr

1. That defendants purge themselves of their i cotton

of this Court by ages | the following action:

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(a) Fully comply with all of the provisions of the Court’s

hy, Final Judgment and Injunction of December 7, 1961;

* -(b) That defendants cease and desist from making, using,

selling or offering for sale, in any manner, whatsoever, said *

Sequestrol 60, and any other solution substantially equiva-

lent thereto or. in any manner whatsoever embodying the

inventions disclosed and claimed in said Letters Patent No.

2,959,555, or from infringing upon said patents in any other .

way, for the respective life of said patent. ite

(c) That defendants pay to plaintiff. general mene i in |

the -sum of .$1, 00.00; rr with all costs of this prose-

cution.” ‘

New Orleans, Louisiana, December 30, 1965.

s/ Herstrr W. CuristenBERRY

United States District Judge

IN THE UNITED STATES COURT OF APPEALS ..

FOR TEN SIgTE CIRCUIT

No. 23498 \

CuHemicaL CLEanInG, Inc., Jonn H..RuscH and |

GEORGE Len, Appellants-Appellees, °

v.

THE — CuEemicaL CoMPANy, Appellee-Appellant.

(And Reverse Title)

Agoedie from the United States District Court for the

4 Eastern District of Louisiana.

as ' (June 15, 1967)

Before Hurcueson, Gewin and Dyer, Circuit Judges.

HurcHesoy,. Cireuit J udge: This appeal is from a judg-

ment of the district court holding Chemical Cleaning, Inc.

. (CCT) guilty of civil contempt i in that it knowingly and wae

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fully violated an order which had enjoined it from further

infringing a patent held by Dow Chemical. We affirm on

the issue of contempt, but remand for a hearing on the

issue of damages and costs..

On November 8, 1960, Dow obtained Patent No. 2,959,550 -

(hereafter Patent 555) which claims a chemical process to

be used in the cleaning of industrial steam generating

boilers. Such boilers accumulate on their metal sides in-

crustations of copper and iron dxide. The cleaning of the .

boilers involves the periodic removal of the incrustations.

The cleaning job is made difficult by the fact that the

copper, once removed, has a tendency to become redeposited

on the metal surfaces before°it can be flushed from the

“boiler. Patent 555 avoids that difficulty by the use of

thiourea, a urea derivative, which acts as a Sequestering )

agent to hold the copper within the cleaning solution until

the whole solution can. be flushed out of the boiler.

CCI also cleans industrial boilers by use of chemicals.

Pursuant to a suit brought by Dow against OCI for in-

‘fringement of Patent 555, the United States District Court

' for the Eastern District of Louisiana entered an order on-

' December 7, 1961, that Dow’s patent was valid and had

. been infringed in ‘that OCI had employed thiourea in its °

boiler cleaning operations. An injunction was issued

against OCI ordering that it refrain from further infringe-

ments of the patent. | | co .*

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_ OCI then began using another chemical compound, nmono-

methylolthiourea, which it called Sequéstrol 6 Dow filed

the instant contempt action alleging that the use of the new

solution. constituted a violation of the injunction since

- Sequestrol 60 was merely thiourea to’ which formaldehyde

had been added, and which, when used, disassociated to

produce significant amounts of thiourea. The court below

found that Sequestrol 60 was indeed the equivalent of

_ thiourea and held COI in civil contempt of the injunction.

It is the issue of equivalency which we first consider.

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In recognition of the fact that a patent, would be virtually

worthless if it did not protect against devices which incor-

porate only unimportant variations of the patented device,

the doctrine of equivalents provides that a later-developed

device will be regarded as the equivalent of the patented .

. device if, although different in form or shape, it ‘‘performs

substantially, the same function in substantially the same

way to obtain the same result.’’ -Sanitary Refrigerator

Co. v. Winters, 280 U.S. 30, 42 (1929). In. its early de-

velopment, the doctrine generally was applied in cases in-

volving the equivalence of devices having mechanical com-

ponents. Today, however, the same principles are applied

to compositions where there is equivalence between ¢hemi-

cal ingredients. Graver Mfg. Co. v. Linde Co., 339 U.S.

605, 609 (1955).

In Graver, the Supreme Court spoke to the problem. of

determining what constitutes equivalency : \

‘‘Consideration must be given to thé purpose for

which an ingredient i is used in a patent, the qualities _

it has when com with the other ingredients, and

the function which it.is intended to pérform.”’

‘*A finding of equivalence is a determination of fact. -

Proof can be made in any form: through testimony of

experts or others versed in the technology by; docu-

- ments, including texts and\ treatises; and, of course, by

.the disclosure of the prior art. Like any other issue

of fact, final determination requires a balancing of

credibility, persuasiveness and weight of~evidence. It

is to be decided by the-trial court and that court’s de-

‘. ¢@ision, under general principles of appellate review,

should not’ be disturbed unless clearly erroneous. Par-

ticularly is this so in a field where so much depends

upon familiarity with specific scientific problems and

principles ‘not. usually contained in the general store-

house. of knowledge and experience. _ Id, at 609-610.

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The district court sitting without a jury made-full and |

complete findings of fact after considering expert testi-

mony and the results of various experiments offered by :

both parties. Because there is little dispute as to the cor- . ....

rectness of these findings, they need. not ‘be repeated in ~

specific detail here. A brief summary will suffice. Seques-

_ trol 601s prepared by compounding thiourea and formalde-

hyde under alkaline conditions. The process is reversible,

and the trial court found that under the boiler treating

conditions employed by’CCI, Sequestrol 60 disassociates to.

produce about 90% by weight of thiourea in the free or

uncombined form, and some formaldehyde. The court de-.

termined that Sequestrol 60 does the same work, is em-:

_ ployed in the same way, and accomplishes the same Yesult

' . as thiourea in-€unctioning as a copper sequestering agent. ’

Sequestrol 60 was held to be the equivalent of the thiourea

‘solution protected by Patent 555. Hence,-it was decided —

that CCI had violated the injunction because it had further

infringed Dow’s patent by the use of Sequestrol 60; more-

over, the violation was considered deliberate and ‘wiilful.

_ OCI apparently does not attack the factual findings of

the district court, but challenges only the ‘conclusions to

be drawn from such findings. . CCI contends that the factual °* ~

finding of equivalency will not support the conclusion of

what it terms ‘‘legal equivalency’’ because the court erron-

eously failed to consider an expired patent, by denying its

admission into evidence, which CCI claimed it, was practic-

ing. As pointed out in the Graver case, however, a finding

of equivalency is a determination of fact. Furthermore,

proof that CCI was practicing an expired patent should

have been adduced at the original infringement proceed-

ing. OCI’s contentions on this point must be rejected, and

we conclude that the district.court’s finding of equivalency, |

which is supported by considerable evidence, . must be

affirmed. Bh Mig ae

Dow filed a cross-appeal alleging that the district court

erred in failing to provide‘a separate hearing on the issue

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of damages and costs, including attorneys’ fees, ‘following

the decision on the merits. The contempt action was filed

by Dow on April 2, 1962, on: the basis of ‘CCI’s cleaning

activities at the Riverbend Station of the Duke Light &

~Power-Company. Due to the failure of a court reporter

to transcribe the first hearing, a-delay of two years 0c-

curred before a recorded hearing was obtained, since the

Riverbend cleaning operation was the only contemptuous

activity known to Dow at the time this action was filed,

Dow alleged damages of only $1,000 which were awarded it

by the district court. Dow claims, however, that CCI had

committed other contemptuous acts during the two-year

period which the court should have considered; but did not,

in its award of damages. Dow says no evidence going to

prove increased damages was presented in the trial court

pursuant to an express agreement between Dow’s counsel

and the trial court that the issues of liability and damages

would be separated. The agreement was as follows: ‘

‘‘Your Honor, I would like to clarify one thing, if I

could. At the previous hearing it. was my understand-

ing that we would separate the issues of liability and

damages and we would not go into proof of damages

at this time. If that is still Your Honor’ 8 intention,

vienna rests.’’ -

“AN right’’, answered. the judge. ‘We feel that Dow’s

counsel was inadvertently lulled into the belief that the

issue of damages would be left to be considered separately.

Yet damages were awarded without a further hearing for .

Dow to present its evidence thereon. CCI does not point to

any part of the record which shows that this agreement sub-

sequently was altered, nor do we have any reason to be-

lieve that it -was.

_ The judgment holding CCT in civil contempt is affirmed.

The award of $1,000 is reversed, and the case is remanded

for a consideration of an award of damages and attorneys’

Sa

_ fees, if any. In view of this disposition of the case, the

motion by Dow to dismiss CCI’s appeal is denied.

AFFIRMED In Part; Reversep AND REMANDED In Part. |

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July 31, 1967

Per Curiam -: fe

‘The petition for rehearing is denied and no member of

this panel nor judge in regular active service on the Court

having requested that the Court be polled on rehearing en

~ bane, Rule 25(a), subpar. (b), ayntin for rehearing en

bane is denied.

Judgment

This cause came on to be heard on the transcript of the

record from the United States District Court for the East-

ern District of Louisiana, and was argued by counsel;

: On ConsiperaTion WuHeEREOF, It is now here ordered and

~ adjudged by this Court that the judgment of the said Dis-

' trict Court in this cause be, and the same is hereby, affirmed —

in part, and reversed in part, and that this cause be, and

the same is hereby remanded to the said District Court;

It i is fu: ther ordered and adjudged that the appellants-

appellees, Chémical Cleaning, Inc., John H.-:Rusch and ~

George Lewis, be condemned, in ‘golido, to pay the costs

of this cause in this Court for which execution may be.

issued out of the.said District Court,

June 15, 1967"

Issued as Mandate: Aug. 10,1967. — |

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UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF LOUISIANA

Minute Entry. June 19, 1963, Christenberry, J.

Division’ A’ No. 11665.

Cwil Action

‘Tae Dow CHEMICAL Company =

Vv.

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Camican Cunannio, INo., BT AL:

‘ This cause came on this day for hearing on motion of

defendants to dismiss ‘order to show cause and plaintiff’s

motion, for contempt judgment; and motion of defendants

te stay request for admissions. |

Present: Charles Merriam, Esq.

Attorney for Plaintiff

Ted Raptes, Esq. .

. Attorney for Defendants

Argument. |

In Is Onperep that motion a defendante to dismiss order

to-show cause and plaintiff ’s motion for contempt judg-

ment be, and the same is hereby, Deniep.

Ir Is FurtHer Orverep that motion of Defendants to stay

— request for admission be, and the same is hereby, DeniED,

and defendants have 20 days to answer. requests for ad-

missions. 4

Ju une 21, 1963

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