64 F.3d 1570 (Fed. Cir. 1995), 93-1407, Allied Colloids Inc. v. American Cyanamid Co.

Docket Nº:93-1407.
Citation:64 F.3d 1570
Party Name:35 U.S.P.Q.2d 1840 ALLIED COLLOIDS INC. and Allied Colloids Limited, Plaintiffs-Appellants, v. AMERICAN CYANAMID COMPANY, Defendant-Appellee.
Case Date:September 01, 1995
Court:United States Courts of Appeals, Court of Appeals for the Federal Circuit
 
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64 F.3d 1570 (Fed. Cir. 1995)

35 U.S.P.Q.2d 1840

ALLIED COLLOIDS INC. and Allied Colloids Limited,

Plaintiffs-Appellants,

v.

AMERICAN CYANAMID COMPANY, Defendant-Appellee.

No. 93-1407.

United States Court of Appeals, Federal Circuit

September 1, 1995

Rehearing Denied; Suggestion for Rehearing In Banc Declined

Oct. 25, 1995.

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[Copyrighted Material Omitted]

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Gary M. Hoffman, Dickstein, Shapiro & Morin, Washington, DC, argued for plaintiffs-appellants. With him on the brief were Woody N. Peterson, James W. Brady, Jr. and James J. Trussell.

Berj A. Terzian, Pennie & Edmonds, New York City, argued for defendant-appellee. With him on the brief were Isaac Jarkovsky, Robert M. Kunstadt, Victor N. Balancia, Steven I. Wallach, and Margaret M. Coyne; Lyle K. Kimms and Peter D. Vogl, of counsel.

Before ARCHER, Chief Judge, NEWMAN and LOURIE, Circuit Judges.

PAULINE NEWMAN, Circuit Judge.

In this patent infringement action tried to a jury, the district court directed the grant of judgment as a matter of law in favor of the defendant American Cyanamid Company ("Cyanamid"), upon completion of the case in chief presented by the plaintiffs Allied Colloids Inc. and Allied Colloids Ltd. (collectively "Colloids"). 1 The court held that a reasonable jury could reach only the verdict that the patents in suit, United States Patents Nos. 4,720,346 and 4,943,378, were invalid based on the public use bar of 35 U.S.C. Sec. 102(b). The principal issue on appeal is the correctness of that judgment. An additional issue is the correctness of the district court's ruling that Colloids' patents are unenforceable for inequitable conduct because Colloids did not tell the Patent and Trademark Office ("PTO") about this public use.

I

THE PUBLIC USE BAR

In granting judgment as a matter of law after presentation of the plaintiff's case, the plaintiff's facts must be accepted as established and all reasonable inferences from those facts must be drawn in the plaintiff's favor. Rule 50(a)(1), Fed.R.Civ.P., provides that if

a party has been fully heard on an issue and there is no legally sufficient evidentiary basis for a reasonable jury to find for that party on that issue, the court may determine the issue against that party and may grant a motion for judgment as a

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matter of law against that party with respect to a claim or defense that cannot under the controlling law be maintained or defeated without a favorable finding on that issue.

See generally Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986) (comparing criteria for directed verdict and summary judgment).

The grant of a Rule 50(a) motion is given plenary review on appeal. Parker v. Prudential Ins. Co., 900 F.2d 772, 776 (4th Cir.1990); see Jamesbury Corp. v. Litton Indus. Prods., Inc., 756 F.2d 1556, 1561, 225 USPQ 253, 257 (Fed.Cir.1985). The appellate court, like the trial court, determines whether, "viewing the evidence in the light most favorable to the non-moving party," and giving the plaintiff "the benefit of all reasonable inferences," there is sufficient evidence of record to support a jury verdict in favor of the plaintiff. Herold v. Hajoca Corp., 864 F.2d 317, 319 (4th Cir.1988), cert. denied, 490 U.S. 1107, 109 S.Ct. 3159, 104 L.Ed.2d 1022 (1989). The court must construe the evidence in the light most favorable to the party against whom the directed verdict motion is made. Parker, 900 F.2d at 776. In reviewing the propriety of the directed verdict the appellate court does not weigh the evidence, consider the credibility of witnesses, or decide disputed facts. Gairola v. Virginia Dep't of Gen. Servs., 753 F.2d 1281, 1285 (4th Cir.1985). The test is whether " 'there can be but one conclusion as to the verdict that reasonable jurors could have reached.' " Gairola, 753 F.2d at 1285 (quoting Wheatley v. Gladden, 660 F.2d 1024, 1027 (4th Cir.1981)).

Thus the verdict may be directed after the plaintiff's case is presented, when it is clear that completion of the trial is unnecessary in that the only sustainable verdict could be in favor of the defendant. There is, however, practical weight in favor of completing the trial, lest the directed verdict not be sustained on appeal; as noted in Dace v. ACF Indus., Inc.:

This case illustrates again that it is usually better practice for a district court, faced with a motion for directed verdict, to allow the case to go to the jury, and address the issue by way of judgment n.o.v. if necessary. The jury may find for the moving party, in which case the issue disappears. If the verdict is against the moving party, and if judgment n.o.v. is granted, and if this Court decides on appeal that it should have been denied, the verdict can simply be reinstated, and no new trial is necessary.

722 F.2d 374, 379-80 n. 9 (8th Cir.1983), quoted in U.S. Philips Corp. v. Windmere Corp., 861 F.2d 695, 705, 8 USPQ2d 1885, 1892 (Fed.Cir.1988), cert. denied, 490 U.S. 1068, 109 S.Ct. 2070, 104 L.Ed.2d 635 (1989).

A

The occurrence of the events on which the district court's judgment rested is not in dispute. However, the factual inferences and legal conclusions that the court drew from these events are challenged. In brief outline:

Colloids is a purveyor of sewage treatment materials. The patents in suit are directed to certain polymeric flocculents and the method of treating sewage with these materials. Colloids told officials of the City of Detroit that these materials, which were developed in England, might be useful in treating Detroit municipal waste. Colloids had previously treated Detroit waste, but had lost the business. At Colloids' invitation samples of Detroit sludge were sent to England for testing. After some favorable test results in England, about twenty samples of Colloids' sewage treatment materials were brought to Detroit for testing on fresh Detroit sewage. These samples were about two to four ounces in size. They were tested on April 16-17, 1985, in a laboratory located at a Detroit sewage treatment plant. The tests showed promising results for some of Colloids' products. Additional laboratory tests were conducted in Detroit in July 1985, and plant-scale trials were conducted in Detroit in December 1985. Colloids' patent application was filed in the United States on April 23, 1986; thus only the first series of tests is relevant to the asserted public use bar, i.e. the April 16-17, 1985 tests.

The district court held, after the plaintiff's case, that the tests on April 16-17 were an

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invalidating public use as a matter of law, on the principal grounds that the tests had a "commercial objective" and were not performed under a confidentiality agreement with the City of Detroit. Colloids argued that the tests were of an experimental nature. The...

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