Eutectic Corp. v. Metco, Inc., s. 997

• Decision Date: 17 May 1978
• Docket Number: Nos. 997,1281,D,s. 997
• Citation: 197 USPQ 129,579 F.2d 1
• Parties: EUTECTIC CORPORATION, New Metals Corporation and Metallizing Company of America, Inc., Plaintiffs-Appellees and Cross-Appellants, v. METCO, INC., Defendant-Appellant and Cross-Appellee. ockets 76-7490, 76-7514.
• Court: U.S. Court of Appeals — Second Circuit

Page 1

579 F.2d 1

197 U.S.P.Q. 129

EUTECTIC CORPORATION, New Metals Corporation and Metallizing Company of America, Inc., Plaintiffs-Appellees and Cross-Appellants, v. METCO, INC., Defendant-Appellant and Cross-Appellee.

Nos. 997, 1281, Dockets 76-7490, 76-7514.

United States Court of Appeals Second Circuit.

Argued May 2, 1977.

Decided Feb. 6, 1978.

Rehearing Denied May 17, 1978.

John M. Calimafde, New York City (Hopgood, Calimafde, Kalil, Blaustein & Lieberman, Eugene J. Kalil and Marvin N. Gordon, New York City, on the brief), for plaintiffs-appellees and cross-appellants.

Arnold Sprung, New York City (Burgess, Dinklage & Sprung, Nathaniel D. Kramer, New York City, on the brief), for defendant-appellant and cross-appellee.

Before TIMBERS and VAN GRAAFEILAND, Circuit Judges, and OWEN, District Judge. ^*

OWEN, District Judge.

This is an appeal from a determination of the District Court for the Eastern District of New York, reported at 418 F.Supp. 1186 (1976), that certain patents are valid but not infringed. The patents are two and involve the art of spraying various bi-metallic composites from a flame spray gun onto a metal surface, much as paint is sprayed. United States Patent No. 3,322,515 (the '515 Patent) covers the flame spray materials in powder or wire form. ¹ No. 3,436,248 (the '248 Patent) covers the process of spraying the materials described in the '515 Patent.

The patents teach the artisan that various specified pairings of metals (E. g., nickel and aluminum) prepared and sprayed under appropriate circumstances, will cause a firm, self-bonding coating upon an unprepared metal surface. Essential to this result, the patents teach, is the generation of a certain minimum amount of additional heat during the spray flight. This is caused by the two metals already heated to a reaction point by the flame spray gun thereafter interreacting to form intermetallic compounds, and, in the process, giving off heat. The artisan, according to the patents, may vary the proportions in the various pairings according to what is desired as the coating, so long as the proportions selected produce the required additional heat in spray flight. There are standard metallurgical diagrams to which an artisan can refer to determine which proportions will produce the required heat and which will not, and the '515 Patent provides some examples.

Only one spray powder, consisting of essentially 95% Nickel and 5% Aluminum by weight, is involved here because of its substantial commercial success. Each particle of the fine powder has a nickel nucleus surrounded by even finer aluminum particles bound to the nucleus by resin. ²

Plaintiffs are the claimed infringers. They are the Eutectic Corporation and New Metals Corporation, manufacturers of products in this general field, and Metallizing Company of America, a manufacturer and seller of flame spraying equipment and a purchaser for resale of Eutectic's powders. Plaintiff Eutectic markets flame spraying powders under the trade names "ExoTec," "XuperBond," and "DuroTec." Plaintiff Metallizing markets Eutectic's powder as "Moguloy M-55."

Defendant Metco, Inc. is the owner of the patents in question, and markets its successful "Metco 450" thereunder. It is conceded that the Eutectic and Metallizing powders are nickel-aluminum compositions substantially identical to the "Metco 450" powder. ³

Plaintiffs in this action sought a declaratory judgment of non-infringement and invalidity of the patents. ⁴ Defendant Metco counterclaimed, charging infringement by each plaintiff. ⁵ The District Court found validity, but concluded the patents were not infringed. All parties have appealed.

The history of this field is instructive. Flame spraying of metal onto a metal surface is usually accomplished by placing flame spray material in either rod, wire or powder form into a flame spray gun in which, by gas-oxygen reduction or electric arc flame, it is reduced to a molten or semi-molten state and thereupon propelled onto the surface to be coated. From the turn of the century to the 1940's, the only practicable method of assuring some degree of bonding between the coating and the surface was to mechanically roughen the surface to provide crevices and undercuts into which the sprayed molten particles would enter, forming a mechanical interlock. In the mid-1940's, a substantial advance was achieved when one Arthur P. Shepard, a Metco engineer and deceased co-patentee of the patents in suit, discovered that molybdenum, when used as a flame spraying material, would self-bond on a clean unprepared surface. Shepard was granted a patent thereon.

For the next fifteen years molybdenum wire was the only widely-used material in the flame spray field, notwithstanding 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 As events would have it, this need was also met by a Metco engineer, Ferdinand J. Dittrich, who, working under Shepard, discovered the solution in a powder, each particle having a nickel core surrounded by finely divided aluminum particles bound together by a resin. This powder, when heated to a certain temperature in a flame spray gun, would thereafter exothermically react that is, each element would chemically react with the other, releasing additional heat during the spray's flight from the tip of the gun to the surface being coated. This heat-creation during flight, Dittrich discovered, would cause a secure bonding even to a smooth, clean, unprepared surface. To phrase it in the approximate language of one of the claims of the '515 Patent, the powder had the ability of generating heat during flame spraying which aided in bonding to the surface being sprayed. Clearly, the key to this generation of heat was to be found in the percentage relationship of the components and the arrangement of each particle.

would not satisfactorily bond to certain surfaces, required a high degree of operator skill, and could not be used where the part being sprayed would subsequently be subjected to use at temperatures above 600 degrees, at which the molybdenum would oxidize and deteriorate, destroying the bond. Thus, there remained during those years a clear need to be filled in the flame spraying art to overcome the problems associated with molybdenum.

The plaintiffs, at the outset, attack the District Court's conclusion of patentability. They claim that all the basic elements of the Metco patents are found in the prior art. Clearly, the prior art discloses a number of elements inherent in and essential to the Metco patents such as the principles of exothermic reaction and intermetallic compound formation between certain metals. A 1958 patent to one Mackiw discloses a method of coating particles of one metal with another. Mackiw's object, however, was essentially to develop an improved process for pressing or compacting metal powder into shapes difficult to manufacture by conventional casting methods, and, we note, the powders in suit were the product of Dittrich's specifications, not Mackiw's. A Gutzeit patent (1959) teaches the melting of a nickel-phosphorous composite in a flame spray gun but merely speaks of spraying "the resulting melt" upon a metal surface.

What the prior art does Not teach is how, with conventional flame spray equipment, a coating can be made to self-bond to a clean, smooth metal surface through the use of starting materials capable of causing an exothermic reaction in the spray stream releasing further heat to aid in the bonding. It is, therefore, the creation of certain additional heat in the spray flight that is unique and is at the heart of Dittrich's invention. Thus, the specific materials and their use as disclosed are clearly a "new and useful . . . composition of matter" in their distinctive arrangement, function and end result, and therefore patentable under 35 U.S.C. §§ 101, 102. The conclusion of the court below to this effect was thoroughly supported by the evidence. 418 F.Supp. at 1196-1201.

Plaintiffs next assert the "obviousness" of the alleged invention to defeat the patent. See 35 U.S.C. § 103. The court below, however, put the question well: "Would it have been obvious to those (skilled in the art of flame spraying) that the formation and flame spraying of nickel-aluminum powders as taught in the patents in suit would produce a self-bounding coating on a metal substrate that had not been heated or otherwise treated to receive it?" The court found that it was not, and we agree. After fifteen years of less than satisfactory experience with molybdenum, Dittrich was the first to recognize, develop and adapt the concept of coated or clad powder particles for use in flame spraying to achieve a self-bonded surface coating without prior preparation of the substrate. Further on the question of obviousness, the court below noted that "(t)he overriding purpose sought to be accomplished by the patentees was to develop a flame spray powder that would self-bond as sprayed, as did molybdenum We affirm the well-reasoned determination of the court below that the patents are valid.

                wire, (and) that would overcome the latter's disadvantages . . . ."  That this was in fact accomplished by Metco's powder was shown by its immediate commercial success upon introduction to the trade.  During the first year, over 50,000 pounds were sold and eventually it replaced molybdenum wire to a large extent.  6  The court below correctly concluded that the patent flame spray materials constituted a significant, unexpected and unobvious improvement in the art.  418 F.Supp. at 1201-07.  This finding is amply supported by the record.
                

We next turn to the District Court's conclusion of non-infringement. The court below held that Metco had not met its burden of proof on the issue of infringement, and this conclusion was clearly based on the court's factual finding that if the...