190 F.3d 1342 (Fed. Cir. 1999), 99-1041, Atlas Powder Co. v Inreco Inc.

Docket Nº:99-1041
Citation:190 F.3d 1342
Party Name:ATLAS POWDER COMPANY, Plaintiff, and HANEX PRODUCTS, INC., Plaintiff-Appellant, v. IRECO INCORPORATED and ICI EXPLOSIVES USA, INC., Defendants-Appellees.
Case Date:September 07, 1999
Court:United States Courts of Appeals, Court of Appeals for the Federal Circuit

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190 F.3d 1342 (Fed. Cir. 1999)

ATLAS POWDER COMPANY, Plaintiff, and HANEX PRODUCTS, INC., Plaintiff-Appellant,




United States Court of Appeals, Federal Circuit

September 7, 1999

Appealed from: United States District Court for the District of Wyoming

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Chief Judge Alan B. Johnson

Stanford B. Owen, Fabian & Clendenin, of Salt Lake City, Utah, argued for plaintiff-appellant, Hanex Products, Inc. With him on the brief were W. Cullen Battle, Robert A. Garda, Jr., and Jon C. Martinson.

Gordon L. Roberts, Parsons Behle & Latimer, of Salt Lake City, Utah, argued for defendant-appellee, IRECO Incorporated and ICI Explosives USA, Inc. Of counsel on the brief was C. Kevin Speirs.

Before MAYER, Chief Judge, MICHEL and RADER, Circuit Judges.

RADER, Circuit Judge.

The United States District Court for the District of Wyoming determined that U.S. Patent No. 4,111,727 (the Clay patent) and its reissue, U.S. Patent No. RE 33,788 (the reissue patent) were invalid. Atlas Powder Company (Atlas), a licensee under those patents, sued IRECO Incorporated (IRECO) for infringement of the Clay patent. Following two bench trials, the district court concluded that both the original Clay patent and the reissue patent were invalid as anticipated by either U.S. Patent No. 3,161,551 (Egly) or U.K. Patent No. 1,306,546 (Butterworth). Because the district court correctly interpreted the claims and applied the law of anticipation, this court affirms the finding of invalidity.


The Clay patent and its reissue both claim explosive compositions. To detonate,

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explosives require both fuel and oxidizers. The oxidizer rapidly reacts with the fuel to produce expanding gases and heat - an explosion. Composite explosives mix various sources of fuel and oxygen. The most widely used and economical composite explosive is ammonium nitrate and fuel oil (ANFO). ANFO explosives mix about 94% by weight of ammonium nitrate (AN), the oxidizer, with 6% by weight of fuel oil (FO). The AN may include porous prills, dense prills, Stengel flakes, or crystalline AN. ANFO explosives have two primary disadvantages. First, wet conditions dissolve the AN and make the explosive unusable in damp settings. Second, ANFO is a relatively weak explosive because interstitial air occupies considerable space in the mixture, thereby decreasing the amount of explosive material per unit of volume.

To address these shortcomings, explosive experts developed water-in-oil emulsions. These emulsions dissolved the oxidizer into water and then dispersed the solution in oil. Because oil surrounds the oxidizer, it is resistant to moisture, thus solving one of the problems with ANFO. Emulsions also increased the explosive's bulk strength by increasing the density of explosive material in the mixture. Emulsions, however, also have a disadvantage. Emulsions will not detonate unless sensitized. Sensitivity of a blasting composition refers to the ease of igniting its explosion. Experts generally sensitize emulsions by using gassing agents or adding microballoons throughout the mixture. The gassing agents or microballoons provide tiny gas or air bubbles throughout the mixture. Upon detonation, the gas pockets compress and heat up, thereby igniting the fuel around them. In other words, the tiny gas or air bubbles act as "hot spots" to propagate the explosion.

The Clay patent and its reissue both claim composite explosives made from the combination of an ANFO blasting composition and an unsensitized water-in-oil emulsion. Both patents claim essentially the same blasting composition. Claim one of the reissue patent recites:

1. A blasting composition consisting essentially of 10 to 40% by weight of a greasy water-in-oil emulsion and 60 to 90% of a substantially undissolved particulate solid oxidizer salt constituent, wherein the emulsion comprises about 3 to 15% by weight of water, about 2 to 15% of oil, 70 to 90% of powerful oxidizer salt comprising ammonium nitrate which may include other powerful oxidizer salts, wherein the solid constituent comprises ammonium nitrate and in which sufficient aeration is entrapped to enhance sensitivity to a substantial degree, and wherein the emulsion component is emulsified by inclusion of 0.1 to 5% by weight, based on the total composition, of an [oil-in-water] water-in-oil emulsifier to hold the aqueous content in the disperse or internal phase.

(Underline added.)

When this lawsuit began, Atlas was the exclusive licensee under the Clay patent in the continental U.S. and Hawaii. Atlas commenced this lawsuit against IRECO in 1986, alleging infringement of the Clay patent. During the course of litigation, Dr. Robert Clay, the inventor, filed a reissue petition with the United States Patent and Trademark Office (PTO). Atlas then moved to stay the litigation pending resolution of the reissue application. The district court denied that motion and conducted a first bench trial on the issues of validity and infringement of the Clay patent in October 1986. Dr. Clay then requested suspension of prosecution of the reissue application by the PTO in February 1987. After waiting several years for a decision from the district court, Dr. Clay requested that the PTO reinstate the reissue proceedings in 1990. In January 1992, the Clay reissue patent issued upon surrender of the original patent. Later that

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year, the district court rendered its findings and judgment regarding the validity and infringement of the Clay patent.

In its 1992 judgment, the district court found claims 1, 2, 3, 10, 12, 13, and 14 of the Clay patent invalid as anticipated by either...

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