Atlas Powder Co. v. Inreco Inc.
| Decision Date | 07 September 1999 |
| Citation | 51 USPQ2d 1943,190 F.3d 1342 |
| Parties | (Fed. Cir. 1999) ATLAS POWDER COMPANY, Plaintiff, and HANEX PRODUCTS, INC., Plaintiff-Appellant, v. IRECO INCORPORATED and ICI EXPLOSIVES USA, INC., Defendants-Appellees. 99-1041 DECIDED: |
| Court | U.S. Court of Appeals — Federal Circuit |
Appealed from: United States District Court for the District of Wyoming
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.
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 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 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 one of two prior art references, Egly or Butterworth. Egly and Butterworth each disclose blasting compositions containing a water-in-oil emulsion and ANFO with ingredients identical to those of the Clay patents in overlapping amounts. The following chart illustrates the overlap between the explosive compositions disclosed in the prior art patents and the Clay reissue patent:
ClayEgly Butterworth
Composition contents
Water-in-oil Emulsion10-40%20-67%30-50%
Solid Ammonium Nitrate60-90%33-80%50-70%
Emulsion contents
Ammonium Nitrate70-90%50-70%65-85%
Water about 3-15% about 15-about 35%7-27%
Fuel Oil about 2-15% about 5-about 20%2-27%
Emulsifier0.1-5%about 1-5%0.5-15%
The only element of the Clay patent claims which is arguably not present in the prior art compositions is "sufficient aeration . . . entrapped to enhance sensitivity to a substantial degree." The trial court determined that "sufficient aeration" was an inherent element in the prior art blasting compositions within the overlapping ranges. The district court also found that none of the accused products infringed any of the asserted claims. The 1992 judgment was not final, however, and specifically reserved a decision on the effect of the reissue patent for phase two of the case.
On September 22, 1993, the district court granted Hanex Products Inc.'s (Hanex) motion to intervene in the lawsuit. Hanex owns the two patents and had licensed them to Atlas. Hanex asserted the same claim of patent infringement against IRECO that Atlas had asserted, but also initiated a declaratory judgment action against ICI Explosives USA, Inc. (ICI), Atlas' successor-in-interest, seeking the sole right to control the litigation. In July 1994, the district court granted declaratory relief in favor of Hanex, against ICI, giving Hanex the sole right to control and direct the litigation on the two patents.
After the reissue patent issued, the district court conducted a second bench trial, in January 1996, on the issues of phase two. Specifically, the district court considered whether reissue affected its 1992 judgment. On September 25, 1998, the district court rendered its final judgment finding claims 1, 2, 3, 10, 12, 13, and 14 of the Clay reissue patent invalid as anticipated and finding that IRECO had not infringed any of the asserted claims. Despite the PTO's consideration of the Egly and Butterworth references during prosecution of the reissue, the district court concluded that IRECO had overcome the Clay reissue patent's presumption of validity under 35 U.S.C. § 282 (1994) by clear and convincing evidence. The district court noted that IRECO presented a great deal of testimonial and documentary evidence on inherent disclosures of the prior art that was not before the PTO in the reissue proceeding. Hanex appealed to this court from the 1998 final judgment.
This court reviews claim construction as a matter of law. See Cybor Corp. v. FAS Techs., Inc., 138 F.3d 1448, 1451, 46 USPQ2d 1169, 1173 (Fed. Cir. 1998) (en banc); Markman v. Westview Instruments, Inc., 52 F.3d 967, 979, 34 USPQ2d 1321, 1326 (Fed. Cir. 1995) (en banc). Anticipation is a question of fact, including whether or not an element is inherent in the prior art. See In re Schreiber, 128 F.3d 1473, 1477, 44 USPQ2d 1429, 1431 (Fed. Cir. 1997). Therefore, this court reviews a finding of anticipation under the clearly erroneous standard. See Gechter v. Davidson, 116 F.3d 1454, 1457, 43 USPQ2d 1030, 1032 (Fed. Cir. 1997).
"To anticipate a claim, a prior art reference must disclose every limitation of the claimed invention, either explicitly or inherently." In re Schreiber, 128 F.3d at 1477. Anticipation of a patent claim requires a finding that the claim at issue "reads on" a prior art reference. See Titanium Metals Corp. v. Banner, 778 F.2d 775, 781, 227 USPQ 773, 778 (Fed. Cir. 1985). In other words, if granting patent protection on the disputed claim would allow the patentee to exclude the public from practicing the prior art, then that claim is anticipated, regardless of whether it also covers subject matter not in the prior art. See id. at 781. Specifically, when a patent claims a chemical composition in terms of ranges of elements, any single prior art reference that falls within each...
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