501 F.2d 282 (9th Cir. 1974), 71-2512, Mobil Oil Corp. v. Filtrol Corp.

Docket Nº:71-2512, 71-2559, 71-2534, 71-2560.
Citation:501 F.2d 282, 182 U.S.P.Q. 641
Party Name:MOBIL OIL CORPORATION, Plaintiff-Appellant, v. FILTROL CORPORATION and Texaco Inc., Defendants-Appellees. MOBIL OIL CORPORATION, Plaintiff-Appellee, v. FILTROL CORPORATION and Texaco Inc., Defendants-Appellants.
Case Date:July 22, 1974
Court:United States Courts of Appeals, Court of Appeals for the Ninth Circuit

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501 F.2d 282 (9th Cir. 1974)

182 U.S.P.Q. 641

MOBIL OIL CORPORATION, Plaintiff-Appellant,


FILTROL CORPORATION and Texaco Inc., Defendants-Appellees.

MOBIL OIL CORPORATION, Plaintiff-Appellee,


FILTROL CORPORATION and Texaco Inc., Defendants-Appellants.

Nos. 71-2512, 71-2559, 71-2534, 71-2560.

United States Court of Appeals, Ninth Circuit.

July 22, 1974

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William K. Kerr, Herbert F. Schwartz, Eric C. Woglom, William J. Hone, Fish & Neave Hulit L. Madinger, New York City, John G. Flett, Thelen, Marrin, Johnson & Bridges, Los Angeles, Cal., for appellees.


Before CHAMBERS, CARTER and GOODWIN, Circuit Judges.

JAMES M. CARTER. Circuit Judge:

In this patent case the district court held that certain claims of Mobil's U.S. Patents 3,210,267, 3,436,357 and 3,459,680 were valid and not infringed by either Filtrol or Texaco, and dismissed Filtrol's counterclaim for misuse of patents and damages.

Mobil has abandoned its appeal from the judgment of non-infringement as to Patent 3,210,267 (hereafter #'267) and as to claim 1 of Patent 3,436,357 (hereafter #'357). There remains Mobil's appeal from the judgment of non-infringement as to claims 17 and 24 of #'357 and claims 10, 11 and 12 of Patent 3,459,680 (hereafter #'680).

In Appeal No. 71-2559, Mobil appeals from the amended judgment of August 17, 1971, holding Patents #'357 and #'680 not infringed.

In Appeal No. 71-2560, Filtrol and Texaco cross-appeal from the amended judgment of August 17, 1971, holding #'267, #'357 and #'680 valid; and Filtrol cross-appeals from the amended judgment of August 17, 1971, dismissing with prejudice its counterclaim for patent misuse and damages. 1

The questions presented are:

1. Appeal No. 71-2559: Did the district court err in holding the patents not infringed?

2. Appeal No. 71-2560: Did the district court err in finding the patents valid, since it held them not infringed?

3. Appeal No. 71-2560: Did the district court err in dismissing Filtrol's counterclaim for misuse of patents and damages?

Three sets of findings of fact and conclusions of law were filed covering (1) non-infringement, (2) validity, and (3) misuse of patents. At argument here, the question was raised of possible conflicts in the findings of validity in sets (1) and (2) of the findings.

We are informed that the district court directed the prevailing party to prepare the findings on each of the three questions, which explains the conflict. The findings prepared by Mobil on validity broadly construed the patents. The findings prepared by Filtrol and Texaco on infringement narrowly construed the patents and then held them non-infringed.

It is better practice not to permit a prevailing party substantially to control the findings. Here, however, we believe that the immensity of the task of preparing findings, owing to the size of the record and the complicated problems involved, dictated the course adopted by the district court.

The question whether the district court erred in holding the patents both

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valid and non-infringed is one of law. The non-infringement question is largely one of fact. We find no insurmountable problem regarding the conflicts.

We affirm the district court on the holding of non-infringement and reverse the district court on its holding of validity. We affirm the district court on its dismissal of the counterclaim for patent misuse and damages.


Mobil's patents were not infringed

We noted above the possible conflict between the findings on validity (prepared by Mobil), construing the patents broadly, and the findings on infringement (prepared by Filtrol and Texaco), construing the patents narrowly.

In the findings on infringement the trial court was following the well-known principle of patent law that where claims are close to the prior art, often they cannot be construed broadly enough to be infringed without also being so broad as to be invalid. See National Screw & Mfg. Co. v. Voi-Shan Industries, Inc. (9 Cir. 1965) 347 F.2d 1, 3; Air Devices, Inc. v. Air Factors, Inc. (9th Cir. 1954) 210 F.2d 481, 482, cert. denied, 348 U.S. 825, 75 S.Ct. 41, 99 L.Ed. 651; Nye & Nissen v. Kasser Egg Process Co. (9 Cir. 1938) 96 F.2d 420, 424-425.

The trial court concluded:

'15. If, in order to avoid prior art and sustain the validity of a patent, a claim is construed as narrow in scope, this scope cannot be discarded to establish infringement. Mackay Co. v. Radio Corp., 306 U.S. 86, 102 (59 S.Ct. 427, 83 L.Ed. 506) (1939); Crown Machine & Tool Co. v. D. & S. Industries, Inc., 409 F.2d 1307, 1309 (9 Cir. 1969) (cert. denied, 396 U.S. 824, 90 S.Ct. 66, 24 L.Ed.2d 75). Claims 10-12 of patent 3,459,680, claim 20 of patent 3,210,267 and claims 1, 17 and 24 of patent 3,436,357 cannot be construed broadly enough to be infringed by Filtrol 700, 800, 900 and 810 as made, offered for sale and sold by Filtrol and used by its customers, including Texaco, and still be valid over the prior art.'

Mobil attempts to rely on the findings on validity (prepared by Mobil) to attack the findings on non-infringement (prepared by Filtrol and Texaco) which were adverse to Mobil. Mobil states in its opening brief:

'In attempting to resolve the issue of infringement, however, Judge Ferguson failed to give effect to his findings (on validity) that the inventions of the claims on appeal constitute a breakthrough in the art. Instead he imposed limitations on the claims . . ..

'But for the restriction erroneously imposed on those claims . . . they . . . have been infringed.'

But since we decide in Part II that the part of the judgment holding the claims valid and enforceable was erroneous and reverse that portion of the judgment, we need not consider the findings underlying that portion of the judgment.

Therefore, Mobil, to prevail, must demonstrate that the trial court committed reversible error on the issue of noninfringement.

Mobil's patents in suit are in a very crowded field. The specifications and claims are highly technical. We hold that the findings of fact on infringement made below were not clearly wrong. Accordingly, we refer only in summary form to some of the scientific terminology and the claims of the patent.

1. In general

The hydrocarbon conversion catalysts of Mobil's patents have two principal components: a crystalline zeolite component is distributed or placed in a second component, a matrix.

The crystalline zeolites, also called crystalline aluminosilicates, are synthetic. Zeolite X is described in Union Carbide's Patent No. 2,882,244 and zeolite Y in Union Carbide's Patent No. 3,130,007.

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They were first synthesized by Union Carbide Corp.

The matrix component can be inorganic oxide gels (e.g., silica alumina) or specially treated clay. Both of these, alone or with components, have been widely used as 'cracking' catalysts since the 1940s.

'Cracking' with catalysts is an oil refining process by which most gasoline, for commercial purposes, is made. In the process the gas oil, out of crude petroleum, is heated to form a vapor. The hot vapor is brought into contact with finely divided particles of the material known as a catalyst which has been dispersed in the matrix. For reasons still unknown this contract results in 'cracking' or the breaking up of large molecules to produce gasoline sized molecules.

The crystalline zeolites have three primary chemical elements: aluminum, silicon and oxygen. In addition, they usually have associated with them some metal, such as sodium, magnesium or a rare earth metal in the form of electrically-charged ions. Such ions, when positively charged, are also called 'cations.'

By an old and conventional technique called 'Base Exchange' the ions of a particular metal associated with the zeolites may be replaced or exchanged with ions of another metal or non-metal (such as ammonium). By use of the 'Base Exchange' technique, sodium ions organically associated with a crystalline zeolite may be replaced in whole or in part by magnesium ions, ammonium ions or rare earth ions, or by a combination of such ions.

2. The Disclosure and Claims of Patent #'680, Generally

Patent #'680 relates to a two-component composite catalyst made up of a low sodium, rare earth-exchanged synthetic crystalline zeolite (either zeolite X or zeolite Y) component, distributed in and diluted by an inorganic oxide matrix.

The zeolite component is a crystalline aluminosilicate, characterized as a 'high activity component having an ordered structure of rigid three-dimensional networks characterized by pores and having openings of nearly uniform diameter in the range of greater than 4 and less than 15 angstrom units.' The particularly preferred zeolites are the faujasites, including the synthetic materials such as zeolite X (Union Carbide's U.S. Patent '244) and zeolite Y (Union Carbide's U.S. Patent '007) as well as other crystalline aluminosilicate zeolites having pore openings of between 6 and 15 angstroms.

With respect to the zeolite component, the #'680 specification points out that zeolites X and Y, as synthesized, contain alkali metal (e.g., sodium) cations, and that the presence of such cations make these zeolites unstable and unselective catalysts. To alleviate these shortcomings, the zeolites are base-exchanged to replace the sodium cations with non-alkali metal cations. A substantial portion of the replacement cations must be rare earth cations.

Put in numerical terms, the residual sodium content of the zeolite component of the #'680 catalyst after base exchange is 'preferably less...

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