641 F.2d 298 (5th Cir. 1981), 79-1158, I. U. Technology Corp. v. Research-Cottrell, Inc.

Docket Nº:79-1158.
Citation:641 F.2d 298
Party Name:209 U.S.P.Q. 545 I. U. TECHNOLOGY CORPORATION, Plaintiff-Appellant-Cross-Appellee, v. RESEARCH-COTTRELL, INC., Texas Utilities Generating Company and Texas Utilities Services, Inc., Defendants-Appellees-Cross-Appellants.
Case Date:April 02, 1981
Court:United States Courts of Appeals, Court of Appeals for the Fifth Circuit

Page 298

641 F.2d 298 (5th Cir. 1981)

209 U.S.P.Q. 545

I. U. TECHNOLOGY CORPORATION, Plaintiff-Appellant-Cross-Appellee,


RESEARCH-COTTRELL, INC., Texas Utilities Generating Company

and Texas Utilities Services, Inc.,


No. 79-1158.

Unit A

United States Court of Appeals, Fifth Circuit

April 2, 1981

Page 299

Arnold, White & Durkee, Tom Arnold, Bill Durkee, Houston, Tex., Baker, Glast, Riddle, Tuttle & Elliott, W. Randolph Elliott, Dallas, Tex., Miller & Prestia, Paul F. Prestia, Havarford, Pa., for plaintiff-appellant-cross-appellee.

Richards, Harris & Medlock, V. Bryan Medlock, Jr., Garland P. Andrews, Worsham, Forsythe & Sampels, G. Roland Love, Dallas, Tex., for defendants-appellees-cross-appellants.

Appeals From the United States District Court for the Northern District of Texas.

Before GOLDBERG, POLITZ and SAM D. JOHNSON, Circuit Judges.

POLITZ, Circuit Judge:

In this patent suit I.U. Technology Corporation (IUT) seeks a declaration that Research-Cottrell et al., are infringing and will further infringe U.S. Patent No. 3,785,840 ('840 patent) involving "Lime-Fly Ash-Sulfite Mixtures." Defendants counterclaim for a declaratory judgment that the '840 patent is invalid. The case was tried to a jury which returned six special verdicts: (1) defendants' operations at an existing plant have infringed the patent, (2) defendants' intended operation at another plant will infringe the patent, (3) the invention claimed by the patent was not new, (4) the invention was obvious, (5) the patent fails to point out and distinctly claim the invention, and (6) the patent has been misused. The court entered judgment consistent with the special verdicts, concluding that the patent is invalid under 35 U.S.C. § 102 (novelty), § 103 (obviousness) and § 112 (indefiniteness), unenforceable because of misuse, and infringed by defendants' activities with respect to Claims 3 and 5. 1 The court denied reciprocal motions for judgment n. o. v. We affirm the judgment declaring the patent invalid and vacate the judgment insofar as it relates to infringement. 2

I. The Problem

Congress enacted the Clean Air Act, 42 U.S.C. §§ 7401 et seq., in its efforts toward ecological enhancement of the ambient air. Strict controls were imposed on various entities and activities, notably including coal burning electric power companies. A consequence of the application of the Clean Air Act to those utilities provides the genesis of this patent litigation.

Charged with enforcement of the Clean Air Act, the Environmental Protection Agency focused much of its attention on what was considered to be a primary source of air pollution: flue gases from combustion

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equipment used in coal burning power generating plants. It was required, inter alia, that two components of the flue gases, fly ash and sulfur oxides, be removed. The first component, fly ash, is a finely divided particulate material which typically is removed by electrostatic precipitators. This fly ash, having the physical properties of a solid yet fluid-like dust or powder, had less than a 10% utility as recently as 1977, a year in which an estimated 45 million tons was produced as a by-product of generating electricity. Fly ash could be and was used in negligible amounts in combination with lime to produce a cementitious composition. It was not competitive, however, with the traditional form of cement, popularly known as portland cement, in part because it required a substantially longer setting up or hardening period.

The second environmentally undesirable component of flue gases, sulfur oxides (SO 2 and SO 3), are removable by a process known as "wet scrubbing." The technique involves scrubbing the combustion equipment flue gases with water and either the hydrate or carbonate form of an alkaline earth metal. In the more advanced desulfurization processes in use today, either hydrated lime (Ca(OH) 2), pulverized limestone (CaCO 3), or magnesium oxide or hydroxide (MgO or Mg(OH) 2) is employed as the reacting chemical agent. In each case the liming agent is fed through the boiler gas scrubbing operation as a slurry, capturing the sulfur oxides from the boiler gases and converting them primarily to calcium sulfite hydrate.

Wet scrubbers, although effective in eliminating atmospheric pollution caused by the release of sulfur oxides, generate a waste by-product referred to as sludge. The magnitude of the sludge disposal debacle facing power companies in 1974 was reflected by one company's estimate that over 70 million tons of the waste material would be produced in 1980. The virtual non-utility of sludge is primarily a result of its thixotropic propensity, i. e., it returns to a fluid state upon agitation. In its initial form sludge is approximately 9% solid, generally comprised of calcium sulfite. In addition it contains some fly ash not removed by the electrostatic precipitators, small quantities of calcium sulfate caused by oxidation (calcium sulfite (CaSO 3) k oxygen (O) = CaSO 4), and excess liming agent.

For years the efforts to dispose of fly ash were limited to collecting it into large ponds or mounds in immediate proximity to the power plant. Initial disposal efforts of scrubber sludge were similarly limited to pumping the waste into large ponds. This method merely substituted one form of pollution for another, however, because the scrubber liquid in the ponds frequently percolated into underlying aquifers or overflowed into surface waters. In addition, vast amounts of valuable acreage were diverted to disposal sites and thus removed from productive use.

II. The Solution

The urgency of developing a method of disposing of fly ash and scrubber sludge in an environmentally acceptable, economical and productive manner was universal and pervasive. Millions of dollars were expended by the government and the private sector in pursuit of a solution. One group of research chemists headed by Dr. Leonard John Minnick made significant progress in January 1971. 3 Their research ultimately led to the issuance of the '840 patent on January 15, 1974.

As set forth in footnote one, supra, Dr. Minnick's '840 patent claims a cementitious structural composition which is a water suspension comprising stated percentages of three ingredients: an alkaline earth metal hydroxide, e. g., calcium hydroxide (Ca(OH) 2) or magnesium hydroxide (Mg(OH) 2); an alkaline earth metal sulfite, e. g., calcium

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sulfite (CaSO 3); and fly ash. Simply stated, the patent teaches an environmentally acceptable method for stabilizing scrubber sludge and fly ash to make a cementitious material, i. e., one which will harden permanently so as not to reslurry when subjected to water and/or agitation and which is appropriate for land fill, embankment, road base and certain aggregate uses such as bricks.

III. The Actors

At the time of their research Dr. Minnick and his co-developers of the '840 patent were employees of the G. & W. H. Corson Company (Corson), a regional lime manufacturing and sales company in Pennsylvania. The patent was issued to Corson. In 1972 Corson became a subsidiary of IU International Corp. (International), and later assigned the '840 patent to another subsidiary of International, IU Conversion Systems (IUCS). On January 1, 1975, IUCS assigned the patent to still another International subsidiary, IUT, a patent research, development and holding company. IUT in turn granted a nonexclusive license to IUCS to practice the invention of the '840 patent.

Defendant Research-Cottrell is a major manufacturer of electrostatic precipitators and flue gas scrubbers. It contracted with defendant Texas Utilities Service, Inc. (TUSI), a sister subsidiary of defendant Texas Utilities Generating Company (TUGCO), to design, build and operate a pilot plant at TUGCO's Big Brown Station in Fairfield County, Texas. The contract was entered into with a view toward later designing and building scrubber and waste disposal facilities at the Martin Lake Station being operated by TUGCO in Rusk County, Texas. Research-Cottrell agreed to indemnify TUSI and TUGCO against certain liabilities incurred in connection with charges of patent infringement, including that brought by IUT under the '840 patent. By August 1974 the pilot plant at TUGCO's Big Brown Station was operational. At the time of trial the Martin Lake Station was not yet in operation. IUT's complaint sought a declaratory judgment that operation of the Big Brown Station was an existing infringement and that the Martin Lake Station would be an infringement when put into operation.

IV. Validity

When faced with dual issues of validity and infringement, this court has recognized the public importance of first addressing the former and not conveniently disposing of an appeal by only deciding the latter. See Continental Oil Co. v. Cole, 634 F.2d 188 (5th Cir. 1981), citing Sinclair Co. v...

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