Brown-Bridge Mills, Inc. v. Eastern Fine Paper, Inc.

• Decision Date: 18 February 1983
• Docket Number: Nos. 82-1598,BROWN-BRIDGE,82-1642,s. 82-1598
• Citation: 217 USPQ 651,700 F.2d 759
• Parties: TheMILLS, INC., et al., Plaintiffs, Appellees, v. EASTERN FINE PAPER, INC., Defendant, Appellant. TheMILLS, INC., Plaintiff, Appellee, v. EASTERN FINE PAPER, INC., Defendant, Appellee. Kimberly-Clark Corporation, Brown-Bridge Division, Plaintiff, Appellant.
• Court: U.S. Court of Appeals — First Circuit

Page 759

700 F.2d 759

217 U.S.P.Q. 651

The BROWN-BRIDGE MILLS, INC., et al., Plaintiffs, Appellees, v. EASTERN FINE PAPER, INC., Defendant, Appellant.

The BROWN-BRIDGE MILLS, INC., Plaintiff, Appellee, v. EASTERN FINE PAPER, INC., Defendant, Appellee.

Kimberly-Clark Corporation, Brown-Bridge Division,

Plaintiff, Appellant.

Nos. 82-1598, 82-1642.

United States Court of Appeals,

First Circuit.

Argued Dec. 10, 1982.

Decided Feb. 18, 1983.

Paul M. Brown and Robert E. Kosinski, New York City, with whom Whitman & Ransom, New York City, Arnold L. Veague, Eaton, Peabody, Bradford & Veague, Bangor, Me., and Hopgood, Calimafde, Kalil, Blaustein & Judlowe, New York City, were on brief, for Eastern Fine Paper, Inc.

Before COFFIN, Chief Judge, BOWNES, Circuit Judge, and SMITH, Senior District Judge. ^**

COFFIN, Chief Judge.

This appeal concerns United States patent no. 3,202,539 ("the Holt patent"), which was granted to Brown-Bridge Mills, Inc. on August 24, 1965 and is currently held by appellant, the Brown-Bridge division of Kimberly-Clark Corporation ("Brown-Bridge"). ¹ The Holt patent includes the disclosure of a dry gummed paper product with a water-insoluble binder. ² Brown-Bridge filed a complaint in May of 1975 alleging that appellee, Eastern Fine Paper ("Eastern") had infringed the Holt patent by making, using, and selling gummed paper within the patent's scope. Eastern counterclaimed that the patent was invalid and that it had been fraudulently obtained.

In December of 1977 Brown-Bridge, having concluded as the result of discovery that the binder formulation then used by Eastern did not infringe the Holt patent, moved to dismiss its own complaint and for partial summary judgment on Eastern's counterclaims. In May of 1978 the district court dismissed the complaint with prejudice to any claim of past infringement by Eastern and with prejudice to any claim that the Holt patent is infringed by a product with solubility characteristics greater than those of a specified binder compound. It denied summary judgment on Eastern's counterclaims.

Appellant filed a second complaint in April of 1979 alleging that appellee Eastern had recently changed its gummed paper products and was once again infringing the Holt patent. The complaint also alleged patent misuse, state and federal antitrust violations, and unfair trade practices. In a June 1979 pre-trial conference the district court ordered that action consolidated with the original action from which appellee's counterclaims remained pending. In February of 1980 the court granted appellant's motion for a separate trial of (1) the patent validity and infringement issues (including the counterclaim of fraudulent procurement) and (2) the patent misuse, unfair trade practice, and antitrust issues.

After trial of the patent validity and infringement issues in December of 1980, the court issued an opinion on September 14, 1981, holding that the patent was invalid and not infringed but that it was not procured by fraud. It also denied appellee's motion for attorneys' fees. On October 28, 1981 the court entered judgment with respect to the patent validity and infringement issues but declined to certify pursuant to Fed.R.Civ.P. 54(b) because of the remaining patent misuse, unfair trade practice, and antitrust claims. The parties having agreed to abandon their remaining claims and counterclaims with regard to those issues, final judgment was entered on July 8, 1982, and this appeal followed. We affirm the judgment of the district court.

I. Patent Validity

A patent is presumed to be valid, and the burden of establishing invalidity is on the party asserting it. 35 U.S.C. Sec. 282. Acknowledging the statutory presumption, the district court held the Holt patent invalid and therefore unenforceable because of prior invention under 35 U.S.C. Sec. 102(g) ³ and because it failed to meet the definiteness requirements of 35 U.S.C. Sec. 112. ⁴ The court rejected various other grounds for invalidity advanced by appellee.

The court found that the subject matter of the Holt patent--a remoistenable gummed paper using a binder by itself insoluble--was invented and reduced to practice by Nashua Corporation ("Nashua") before August 31, 1956, the earliest date that appellants claim reduction to practice. It therefore held the Holt patent invalid under Sec. 102(g) because anticipated.

Appellant argued, as it does on appeal, that Nashua's allegedly anticipatory invention--its "65-54" binder--is water-soluble within the meaning of the Holt patent and therefore did not anticipate it. In rejecting that argument the court relied on evidence showing that the 65-54 binder has 16.4 per cent water solubility. The court found that, "because of the position [appellant had] taken with respect to the solubility of 3RB-50 [the binder used by Eastern that appellant alleges infringes the Holt patent]", appellant was "estopped from arguing that a material that is 16.4 per cent water soluble is not insoluble within the meaning of the Holt patent."

"To anticipate under section 102, a prior art reference must disclose all the elements of the claimed invention or their equivalents functioning in essentially the same way." Shanklin Corp. v. Springfield Photo Mount Co., 521 F.2d 609, 616 (1st Cir.1975), cert. denied, 429 U.S. 914, 96 S.Ct. 1112, 47 L.Ed.2d 318 (1976); accord Carter-Wallace, Inc. v. Gillette, 675 F.2d 10, 15 (1st Cir.1982). Appellant argues that the district court was clearly in error, see Fed.R.Civ.P. 52(a), when it found Nashua's 65-54 binder sufficiently insoluble to be equivalent to the binder disclosed by the Holt patent. It points to evidence that, contrary to the court's finding, the 65-54 binder, when measured by the same solubility test, is significantly more soluble than 3RB-50, a binder later used by Nashua and Eastern which appellant alleges is within the scope of the Holt patent.

We find that appellant's contention is supported by the record. Both the 65-54 and 3RB-50 binders are copolymers of vinyl acetate ("PVA") and vinyl pyrolidone ("PVP"). Appellant asserts and appellee does not contest that the water solubility of these binders depends directly upon the ratio of PVA to PVP, since PVA is water-insoluble by itself while PVP is water-soluble by itself. This analysis was apparently accepted by the district court when it granted appellant's motion to dismiss its first infringement complaint. ⁵ The court dismissed the complaint "with prejudice to any claim that [the Holt patent] is infringed by [Eastern's] product or any other product having solubility characteristics above those of a compound having a PVA:PVP ratio of 75:25, provided the PVA:PVP reference material and the new material are tested for solubility by the same test."

Appellant argues that the 65-54 binder, which has a PVA:PVP ratio of 70:30 (and is therefore more water-soluble than a 75:25 compound), does not according to the "law of the case" infringe the Holt patent, and that it therefore also cannot be found to anticipate it. We do not agree that the order of another judge dismissing appellant's prior complaint upon terms agreed to by the parties established a "law of the case" binding upon the court at a later trial of a separate complaint, or that the judge issuing that order so intended. We are persuaded, however, that the court below erroneously compared solubility on the basis of different solubility tests and thus erroneously concluded that appellant's position with respect to the solubility of 3RB-50 estopped it from arguing that 65-54 was soluble within the meaning of the Holt patent. It is undisputed that 3RB-50 has a PVA:PVP ratio of 90:10. We find no evidence that, when measured by the same test, the 65-54 binder is less soluble than the 3RB-50 binder or than a binder with a 75:25 ratio.

The district court also held that the Holt patent was invalid under 35 U.S.C. Sec. 112 because it failed to provide a single test for measuring solubility. ⁶ Appellant argues that this is not a serious defect since any valid test for solubility will suffice to apprise one skilled in the art of the scope of the invention, so long as the same test is used to determine the solubility of the examples claimed in the Holt patent and to determine the solubility of any possibly infringing product. But even accepting that argument, we find that appellant has failed to demonstrate that water-insolubility is a sufficiently critical limitation to satisfy the requirements of Sec. 112.

Water solubility is an enunciated limitation of the Holt patent; indeed, it is the all important limitation at issue in appellant's infringement action against appellee. Appellant contends that the 65-54 binder, with a 70:30 PVA:PVP ratio, is water soluble and therefore did not anticipate (or infringe) the Holt patent. It also contends, however, that any PVA:PVP binder with a ratio higher than 75:25 is insoluble and therefore infringes the Holt patent.

A patent applicant who discloses in a claim that a limitation is critical has the further burden, in order to satisfy the specificity requirement of Sec. 112, of showing that the limitation is critical in fact. California Research Corp. v. Ladd, 356 F.2d 813, 819 (D.C.Cir.1966). To be critical, a limitation in a product claim must show an advance over prior products; "[a] mere location of optimum conditions and characteristics, however useful, is said not to warrant a patent monopoly." Id. at 820.

Appellant has nowhere demonstrated, either in the patent application process or in the long course of this litigation, that insolubility is a significant operative characteristic of a gummed paper binder resin or, even assuming the significance of insolubility, that the Holt patent has critically defined the limits of that characteristic.

"A patentee may not arbitrarily select a point in a progressive change and maintain a patent monopoly for all operations in that progressive change falling on one side...