Eutectic Corp. v. Metco, Inc.

• Decision Date: 14 July 1976
• Docket Number: No. 72 C 102.,72 C 102.
• Parties: EUTECTIC CORPORATION et al., Plaintiffs, v. METCO, INC., Defendant.
• Court: U.S. District Court — Eastern District of New York

418 F. Supp. 1186

EUTECTIC CORPORATION et al., Plaintiffs, v. METCO, INC., Defendant.

No. 72 C 102.

United States District Court, E. D. New York.

July 14, 1976.

Sandoe, Hopgood & Calimafde, New York City by John M. Calimafde, New York City (Eugene J. Kalil, Marvin N. Gordon, New York City, and G. Harry Kapralos, of counsel), for plaintiffs.

Burgess, Dinklage & Sprung, New York City by Arnold Sprung, New York City (Nathaniel D. Kramer, New York City, of counsel), for defendant.

MEMORANDUM OF DECISION

NEAHER, District Judge.

This action, which was tried by the court on the facts, involves questions of validity and infringement of United States Patent 3,322,515 (the '515 patent) and United States Patent 3,436,248 (the '248 patent) owned by defendant Metco, Inc. The action was begun by plaintiffs as a declaratory judgment action, requesting a declaration of noninfringement and invalidity of the patents. Defendant counterclaimed, charging infringement by each plaintiff. Jurisdiction is grounded on the patent laws of the United States, 28 U.S.C. § 1338.

Preliminary Statement

Plaintiff Eutectic Corporation ("Eutectic") and plaintiff New Metals Corporation ("New Metals"), its wholly-owned subsidiary, are New York corporations, having their principal place of business in Flushing, New York. Plaintiff Metallizing Company of America ("Metallizing"), a customer of Eutectic, is an Illinois corporation having its principal place of business in Chicago, Illinois. Defendant Metco, Inc. ("Metco") is a Delaware corporation having its principal place of business in Westbury, New York.

Eutectic, since its founding in 1940, has been engaged in developing, manufacturing and marketing special alloys, torch equipment and other consumable products utilized in the soldering, brazing and welding field. In 1970 Eutectic announced the development of a new exothermic nickel-aluminum powder tradenamed "Exotec," which would eliminate the need for a subsequent fusing operation in order to bond a metal coating using Eutectic's "Spram" process for spray welding applications in the glass mold industry. Subsequently, Eutectic developed its own "Roto-Tec" flame spray process based upon Exotec and added "Durotec" and "XuperBond" powders to its product line. All of these products are basically nickel-aluminum compositions.

Metco has been in the business of manufacturing and selling metallizing and flame spraying equipment and providing related materials and technical services since before 1938. It claims that Eutectic's Exotec, Durotec and XuperBond products are infringing copies of a series of nickel-aluminum self-bonding flame spray powders Metco had developed about 1960, and which it had begun successfully marketing in 1963, subsequent to the filing of the patent application that eventually led to the issuance of the '515 and '248 patents on the Metco powders and process.

Metco originally commenced this litigation in the Northern District of Illinois¹ against Metallizing because of the latter's sale of a product called "Moguloy M-55", which Metco claims also infringes the patents in suit. Metallizing has been in the flame spray field since the 1920's and had previously marketed a Metco-patented molybdenum flame spray material hereinafter mentioned. Moguloy M-55 was Metallizing's first venture into nickel-aluminum powder, a product manufactured by Eutectic which Metallizing purchased through Eutectic's subsidiary, New Metals.

Plaintiffs challenge the validity of the Metco patents on a variety of grounds: (1) the claimed invention was fully anticipated by prior patents; (2) the use of composite nickel-aluminum powder for flame spraying as described in the patents would have been obvious to one having ordinary skill in the art, and Metco's employees simply obtained a patent on coated powders purchased from a producer of such materials; and (3) the '515 patent claims merely an unpatentable new "use" for a known material, and the '248 patent an admittedly conventional process for spraying the material covered by the '515 patent. Plaintiffs also deny infringement, claiming that the Eutectic powders, including Moguloy M-55, are different from Metco's products and not covered by the literal terms of the patents.

The Industrial Art Involved

The patents in suit relate to the industrial technique of flame spraying, formerly known as metallizing. Flame spraying is a process for applying a metal, a ceramic (metal oxide), or a mixed metal/ceramic (cermet) coating in a molten state to another metal surface (also called substrate) to form a bond between the two that will permit the coated surface (or object) to undergo further finishing operations, resist corrosion, or withstand high temperatures or other wear and stress during use. The coating to be sprayed on the substrate is commonly referred to as "flame spray material." The flame spray material, which may be in rod, wire or powder form, is fed into a device called a "flame spray gun." As the flame spray material passes through the gun it is reduced by gas-oxygen or electric arc flame to a molten or semi-molten state and propelled in atomized form onto the surface to be coated, much as paint is sprayed.

From the original development of flame spraying about the turn of the century until the 1940's, the only practicable method of assuring some degree of adhesion (bond strength) between a flame spray coating and a metal surface was to mechanically roughen the surface by grit blasting, cutting threads and the like, so as to provide crevices or undercuts into which the sprayed molten particles would enter, forming a mechanical interlock. The first commercial utilizations of flame spraying were in connection with relatively low melting point metals sprayed through a wire gun in order to produce corrosion-resistant and decorative metal coatings. It was during this period that the process was known as "metallizing."

Although improvements were subsequently made in metallizing guns and materials and the mechanical treatment of surfaces, no significant commercial development occurred until the mid-1940's when Arthur P. Shepard, a Metco engineer and deceased co-patentee of the patents in suit, discovered the self-bonding properties of molybdenum as a flame spray material. He found that molybdenum, when prepared in wire form and sprayed onto a clean unroughened surface, would self-bond to form a base coating with a high bond strength (about 2,000 psi), to which subsequently applied flame spray materials would also tenaciously adhere. Shepard was granted U.S. Patent 2,588,421 on that discovery, and molybdenum wire remained the only known and widely used self-bonding material in the flame spray field for almost 15 years.

Molybdenum wire, despite its commercial success, had a number of disadvantages. It was difficult and messy to use; caused wear on equipment because of its hardness; could only be applied at a relatively slow spray rate; would not satisfactorily bond to copper, copper alloy, or nitrided surfaces; required a high degree of operator skill for satisfactory application; and could not be used where the part being sprayed would subsequently be subjected to use at temperatures above 600°. At such temperatures, the molybdenum would oxidize and deteriorate, destroying the bond. Efforts to overcome some of these problems by attempting to spray molybdenum in powder form were not successful.

It is Metco's claim in this action—sharply controverted by plaintiffs—that another Metco engineer, Ferdinand J. Dittrich, working under Shepard, made the next important advance in the art which resulted in the patents in suit. This took the form of a self-bonding flame spray powder of nickel-aluminum composite granules which Metco originally introduced as "Metco 404" in 1964, while the patent applications were pending. Metco asserts the new powder overcame practically all the disadvantages of molybdenum wire, was widely accepted in the flame spray field as replacing molybdenum to a large extent, and has enjoyed great commercial success.

The Patents and Claims in Issue

Metco's '515 patent issued to Dittrich and Shepard on May 30, 1967, on an application filed March 25, 1965 as a continuation-in-part of earlier applications dating back to November 22, 1960, and is directed to a product, a flame spray material in powder or wire form. The '248 patent to the same patentees issued on April 1, 1969 on an application filed May 26, 1966 as a division of the application resulting in the '515 patent. It is directed to a process of flame spraying the material disclosed in the '515 patent.² Both patents were later assigned to Metco by the patentees.

Claims 4 and 14 of the '515 patent and Claims 1 and 4 of the '248 patent, quoted in the margin, constitute the matter substantially in issue between the parties.³ Those claims teach the composition and process of spraying a flame spray powder of aluminum and nickel in composite form, which has the ability of generating additional heat in an exothermic reaction during spraying. It is that heat which is claimed to aid the resultant nickel aluminide coating to self-bond, i. e., adhere firmly, to smooth, clean metal surfaces as well as conventionally roughened surfaces.

A novel element claimed to contribute to the "unexpected" self-bonding results of the patented powder (or wire) is its "composite" form. The term "composite" in the patent designates not a mere mixture of powdered component metals but "a structurally integral unit" in which each granule of powder contains particles of nickel and aluminum bound in close contact with each other by a dry film binder.⁴ The patent also describes a simplified method of "cladding" the component metals so as to form the required composite.⁵

In sum, the patented invention under the claims in issue consists of the following elements: (a) a composite of powdered aluminum and nickel (b) each particle unit thereof comprising a nucleus of...