616 F.2d 1315 (5th Cir. 1980), 77-3230, Studiengesellschaft Kohle mbH v. Eastman Kodak Co.

Docket Nº:77-3230.
Citation:616 F.2d 1315
Party Name:206 U.S.P.Q. 577 STUDIENGESELLSCHAFT KOHLE mbH, as Trustee for the Max-Planck-Institut fur Kohlenforschung, Plaintiff-Appellant, v. EASTMAN KODAK COMPANY, Defendant-Appellee.
Case Date:May 15, 1980
Court:United States Courts of Appeals, Court of Appeals for the Fifth Circuit
 
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616 F.2d 1315 (5th Cir. 1980)

206 U.S.P.Q. 577

STUDIENGESELLSCHAFT KOHLE mbH, as Trustee for the

Max-Planck-Institut fur Kohlenforschung, Plaintiff-Appellant,

v.

EASTMAN KODAK COMPANY, Defendant-Appellee.

No. 77-3230.

United States Court of Appeals, Fifth Circuit

May 15, 1980

Rehearing Denied July 8, 1980.

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Sprung, Felfe, Horn, Lynch & Kramer, Arnold Sprung, Nathaniel D. Kramer, New York City, for plaintiff-appellant.

Francis T. Carr, Alan T. Bowes, Kenneth E. Madsen, William J. Speranza, New York City, O. J. Weber, Beaumont, Tex., for defendant-appellee.

Appeal from the United States District Court for the Eastern District of Texas.

Before COLEMAN, Chief Judge, FRANK M. JOHNSON, Jr. and POLITZ, Circuit Judges.

COLEMAN, Chief Judge.

Opinion Outline

I. Background

A. The Chemistry Involved

B. The Legal Principles

II. Laches & Estoppel

A. The Legal Background

B. Application to the Facts

III. The '332 Patent

A. Estoppel

B. Scope of the '332 Patent

IV. The '792 Patent

A. Validity

1. Prior Art

2. Other Challenges

B. Infringement

Summary

Studiengesellschaft Kohle mbH (SGK) charged Eastman Kodak Company (Eastman) with infringement of patents obtained by Professor Karl Ziegler covering certain chemical catalysts useful in the polymerization of hydrocarbons. Acting as Trustee for the Max-Planck-Institut f ur Kohlenforschung, the predecessor in interest to the Ziegler patents, SGK accused Eastman of violating U.S. Letters Patent No. 3,113,115 ('115); No. 3,257,332 ('332); No. 3,231,515 ('515); No. 3,392,162 ('162); and No. 3,826,792 ('792). The alleged infringement took place at Eastman's Longview, Texas, plant, where Eastman used a special catalyst, known as its "409 catalyst" to produce polypropylene. SGK contends that Eastman's process and catalyst employ the teachings of the listed patents, resulting in infringement. Although SGK initially sought an injunction against Kodak's activity, it subsequently sought instead compensation for use by Kodak of SGK's patented invention.

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The patents cover catalysts and processes for polymerizing certain hydrocarbons. In essence the patents teach that by mixing certain organometal compounds, particularly an organoaluminum compound, with a compound of a metal of Group IVB, VB, or VIB of the Periodic System of Elements, such as a titanium salt, a polymerization catalyst would be produced that polymerized olefins much more effectively than was previously possible. SGK sought a broad reading to the patents and an equally large protection against the unlicensed use of the teachings of the patents.

Eastman's 409 process employs a catalyst composed of lithium butyl (LiBu), aluminum triethyl (AlEt 3), and hydrogen-reduced alpha titanium trichloride (H-d-TiCl 3) at a temperature of 160o C. and a pressure of 71 atmospheres to produce polypropylene. SGK contended that this process was directly covered by the patents.

Eastman denied infringement, asserting that it uses additional components not specified in the patents under different conditions to produce a different product. Eastman further asserted that various claims of the patents were invalid because of existing prior art. Finally Eastman argued that SGK's claims were barred by laches.

Prior to trial SGK sought to remove the '115 patent from suit, and the claims based upon it were dismissed with prejudice. Following a two-week trial, the District Court allowed the taking and filing of post-trial depositions and the submission of additional exhibits. It subsequently accepted substantial post-trial briefs and heard lengthy oral argument from both sides. At the conclusion of these extensive proceedings, the Court found that Eastman had not infringed the remaining patents, held that certain claims of the '792 patent were invalid, and concluded, alternatively, that SGK's claims were barred by laches. Studiengesellschaft Kohle v. Eastman Kodak, 450 F.Supp. 1211 (E.D.Tex.1977).

Although four patents were at issue in the District Court's opinion, SGK has appealed the trial court's determination on only the '332 and '792 patents. SGK urges on appeal that the District Court erred (1) in finding the action barred by laches, (2) in failing to find infringement of the '332 and '792 patents, (3) in finding claims 22 to 32 of the '792 patent anticipated by prior art, (4) in holding claims of the '792 patent invalid for failure to comply with various statutory disclosure requirements, (5) in failing to dismiss defendant's "unclean hands" and "inequitable conduct" defenses as not being properly pleaded and not properly before the Court, and (6) in arbitrarily and summarily ordering SGK to produce numerous documents previously held privileged by the Special Master.

After an extensive examination of the voluminous record, we find that the suit is not barred by laches, and we affirm the decision of the district court as to the infringement and reverse as to the validity issues. We dismiss SGK's procedural objections as being without merit.

I. BACKGROUND

  1. The Chemistry Involved

    We must begin with a general discussion of the chemistry underlying the patents at issue. The basic principles of the relevant organic chemistry were described in considerable detail in Ziegler v. Phillips Petroleum Co., 483 F.2d 858 (5th Cir.), cert. denied, 414 U.S. 1079, 94 S.Ct. 597, 38 L.Ed.2d 485 (1973). We review them briefly here.

    The simplest hydrocarbon molecule is a compound of one carbon atom and four hydrogen atoms and is commonly known as methane, represented by the chemical symbol CH 4. Because the molecule is bonded together exclusively by single pairs of electrons, methane is known as a saturated hydrocarbon. 1 The carbon atom in methane may form single bonds with additional carbon

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    atoms, forming other saturated hydrocarbons, such as ethane (C 2H 6), propane (C 3H 8), and butane (C 4H 10). These molecules are called members of a homologous series.

    NOTE: OPINION CONTAINS TABLE OR OTHER DATA THAT IS NOT VIEWABLE

    Carbon atoms may also bond to each other in double bonds, producing unsaturated hydrocarbons. The simplest of these is ethylene (C 2H 4). 2 The addition of other carbon atoms by single bonds produces another homologous series whose members include propylene (C 3H 6) and butylene (C 4H 8). This unsaturated series is known as the olefin series or as ethylenically unsaturated hydrocarbons. The double bond connecting the adjacent carbon atoms is known as an unsaturated or olefinic bond. In ethylene the double bond must be at the end, but in higher members of the series the unsaturated bond may appear at other locations within the hydrocarbon chain. Where the unsaturated bond occurs at the end of the hydrocarbon chain, the compound is called an alpha olefin. 3

    NOTE: OPINION CONTAINS TABLE OR OTHER DATA THAT IS NOT VIEWABLE

    NOTE: OPINION CONTAINS TABLE OR OTHER DATA THAT IS NOT VIEWABLE

    The patents in suit claim to teach chemical processes and catalysts which produce synthetic polymers of hydrocarbons. These products are formed by causing hydrocarbon molecules to link together in long chains, called polymers. Thus a synthetic polymer may be produced by causing individual molecules of, say, ethylene to link together into one long chain, called polyethylene. In this case the smaller molecule, ethylene, is called a monomer. Polyethylene is, of course, the polymer. Similar polymers may be produced from other members of the olefin series. The linking of the monomers is termed a polymerization reaction, and the polymerization catalyst is that which causes the monomers to link together to form polymers. A catalyst is defined as a substance which affects the rate or course of a given chemical reaction in some manner without becoming a significant part of the reaction product. Normally, catalysts are used in relatively small amounts as compared with the reactants.

    The patents at issue arise from the activities of Dr. Karl Ziegler, who was Director of the Max-Planck-Institut f ur Kohlenforschung. In 1953 Ziegler and three co-workers discovered that several combinations of an organo aluminum compound and a compound of a metal of Groups IVB, VB, or VIB of the Periodic System of Elements produced polymerization catalysts that polymerized ethylene much more effectively than was previously possible. The catalysts caused monomers to combine in a linear fashion, forming straight and not branched chains, without requiring the formation process to include high pressures or excessive temperatures. Although Ziegler experimented with a number of different compounds, the ones most relevant here are aluminum triethyl and a titanium chloride salt, particularly titanium tetrachloride.

    The development of these various polymerization catalysts was recognized as a great scientific achievement, and Ziegler and his co-workers were awarded the Nobel Prize for their accomplishment. Following his initial success, Ziegler pursued a policy of actively patenting and licensing his new catalyst. In late 1953, he filed German applications Z3799, Z3862, and Z3882 which are the predecessors to the '332 patent before us. In 1954 he filed additional German applications, Z4348, Z4375, Z4629. SGK relies in part on these to sustain the '792 patent.

    After his initial discovery, Ziegler continued his experiments with catalysts for a broad range of olefinic polymers. The news of Ziegler's success with polyethylene prompted vigorous research by scientists around the world, as they and...

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