720 F.Supp. 373 (D.Del. 1989), Civ. A. 81-508, E.I. Du Pont De Nemours & Co. v. Phillips Petroleum Co.

Docket NºCiv. A. 81-508
Citation720 F.Supp. 373
Party NameE.I. Du Pont De Nemours & Co. v. Phillips Petroleum Co.
Case DateAugust 16, 1989
CourtUnited States District Courts, 3th Circuit, District of Delaware

Page 373

720 F.Supp. 373 (D.Del. 1989)

12 U.S.P.Q.2d 1401

E.I. DU PONT DE NEMOURS & COMPANY, Plaintiff,

v.

PHILLIPS PETROLEUM COMPANY, Phillips 66 Company, and Phillips Driscopipe, Inc., Defendants.

Civ. A. No. 81-508-JLL.

United States District Court, D. Delaware.

Aug. 16, 1989

Page 374

William O. La Motte III of Morris, Nichols, Arsht & Tunnell, Wilmington, Del., and John O. Tramontine, Edward F. Mullowney, David J. Lee, Glenn A. Ousterhout, Thomas J. Vetter and Michael A. Messina of Fish & Neave, New York City, of counsel, for plaintiff.

Craig B. Smith and Robert J. Katzenstein of Lassen, Smith, Katzenstein & Furlow, Wilmington, Del., and Harry J. Roper, George S. Bosy, Raymond N. Nimrod, and Steven R. Trybus of Neuman, Williams, Anderson & Olson, Philip S. Beck and Philip C. Swain of Kirkland & Ellis, Chicago, Ill., of counsel, for defendants.

MEMORANDUM OPINION

LATCHUM, Senior District Judge.

I. INTRODUCTION

Plaintiff ("DuPont") has moved this Court for entry of a final judgment pursuant to Fed.R.Civ.P. 54(b) on defendants' ("Phillips") 1 counterclaim for a declaratory judgment in this patent infringement action. (Docket Item ["D.I."] 319.) This motion is the latest maneuver by the parties in this case to have their respective forum of choice pass first on the patent in suit, U.S. patent 4,076,698 (" '698"). Phillips wants the U.S. Patent and Trademark Office (the "Patent Office") to find it unpatentable, while DuPont wants this Court's decision on validity, enforceability and infringement to stand.

The chronology of events leading the Court and the parties to this point is somewhat complex. But, as set forth in detail below, DuPont applied to the Patent Office for reissue of the patent about a year before filing this suit. About 2 years into this litigation DuPont requested the Patent Office to stay the reissue pending a decision here. Then, about 4 years into this litigation Phillips ran into the Patent Office and requested reexamination of the patent, and the reissue and reexamination were merged. This Court went ahead with trial, and although the claims of the patent have been rejected several times by the Patent Office, there has not been, to this day, a binding decision by that agency. We are now, apparently, where we were nearly four years ago with respect to such a decision. But, nonetheless, Phillips now advances the "threat" of such a decision as a just reason to delay appeal of a final decision of this Court.

The question of who (this Court or the Patent Office) should "lead," if anyone should, has been on the back of the Court and the parties for nearly a decade. The question also has been complicated lately by a decision (or an interpretation) by the Court of Appeals for the Federal Circuit.

The Court turns now to a historical sketch of the facts here.

II. BACKGROUND

On October 20, 1980, DuPont filed an application with the Patent Office to reissue

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all of the claims of the '698 patent. Three companies, Phillips, Dow Chemical Company, and Mobil Oil Company filed protests to the reissue under 37 C.F.R. § 1.291, and were granted limited active participation.

DuPont filed its complaint in this action on November 13, 1981 (D.I. 1), and filed an amended complaint on February 26, 1982. (D.I. 22.) The amended complaint charged Phillips with infringement of the '698 patent, and prayed for damages, a declaratory judgment, and an injunction. (See id.)

Phillips filed its answer on December 10, 1981, entitled "Answer, Affirmative Defenses and Counterclaim." (D.I. 7.) An amended answer was filed on March 18, 1982. (D.I. 24.) The 13-page amended answer was divided, essentially, into 3 parts. The first (¶ ¶ 1-8) responded to the allegations of the amended complaint. The second (¶ ¶ 9-25) was captioned "Affirmative Defenses." The defenses were that the '698 patent was invalid on several grounds 2 and unenforceable because of misrepresentations or nondisclosures in the Patent Office, that DuPont was collaterally estopped from asserting an earlier filing date than that determined by an interference proceeding, and that Phillips' conduct did not infringe the '698 patent. The third (¶ ¶ 26-47) was captioned "Counterclaim." It alleged that as evidenced by the pleadings, an "actual justiciable controversy" existed between the parties with respect to the validity of the '698 patent and Phillips' liability for infringement of it, and that therefore this Court had "jurisdiction of this Counterclaim under the Federal Declaratory Judgments Act, 28 U.S.C. § 2201 and § 2202, and under the laws of the United States concerning actions relating to patents, 28 U.S.C. § 1338(a)." Phillips prayed for judgment upon its counterclaim that the '698 patent be declared not infringed and invalid, and that DuPont be declared estopped to enforce it. (D.I. 24 at 12.)

DuPont answered the counterclaim on March 29, 1982. (D.I. 29.) It prayed that the counterclaim be dismissed, and that it be awarded costs and expenses in defending the counterclaim. (Id. at 1-2.)

On February 19, 1982, the Patent Office rejected all of the claims in the reissue. Certain claims were amended on August 23, 1982, and all claims were again rejected on November 8, 1982. On July 15, 1983, pursuant to a request by DuPont, the Patent Office stayed the reissue in favor of the litigation in this Court.

Discovery continued by both parties. Then, on February 26, 1985, Phillips requested the Patent Office to reexamine the '698 patent pursuant to 37 C.F.R. § 1.510. Reexamination was ordered on April 26, 1985. On June 6, 1985, the stay of the '698 reissue proceedings was lifted, and on June 25, 1985, the Patent Office merged the reissue and reexamination proceedings.

On November 21, 1985, this Court entered an Order, stipulated to by the parties, that the issues of liability and damages would be bifurcated for separate trials, and scheduled trial on the liability issues to begin on June 2, 1986. (D.I. 161.) At a status conference which led to the order, the parties agreed that in order to speed the case along to trial on the liability issues, they would abort discovery on the damages issues. (See D.I. 160 at 3-10.) However, while agreeing that liability and damages should be tried separately, counsel for Phillips urged the opinion that an office action in the Patent Office proceeding was imminent, and that "the most efficient way to proceed" would be to wait for the examiner's decision and then "proceed with it" to the trial on liability. (D.I. 160 at 8-10.)

On May 12, 1986, the examiner issued a final rejection of all of the claims in the merged proceeding. On June 11, 1986, DuPont filed a notice of appeal of the rejection, and briefing of the issue was due August 11, 1986.

On June 20, 1986, Phillips moved here for summary judgment on the liability issues, arguing that in view of the Patent Office's rejection of all of the '698 claims, DuPont

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was collaterally estopped from litigating the issues here. (D.I. 210.) This Court deferred consideration of the motion until after trial.

Trial in this Court on the liability issues began on July 21, 1986. 3 That same day, DuPont filed a petition in the Patent Office requesting that the merged proceedings there be stayed pending this Court's decision. On August 6, 1986, the Patent Office stayed its proceedings pending a decision by this Court, and also stayed briefing of the appeal. Trial in this Court continued through August 21, 1986. The parties completed post-trial briefing on January 7, 1987. On February 26, 1987, this Court entered a judgment (1) denying Phillips' motion for summary judgment on the collateral estoppel issue; and holding that (2) Phillips had not met its burden of showing the '698 patent invalid as anticipated, obvious, or indefinite; (3) Phillips had not shown the patent to be unenforceable; (4) Dupont had proved infringement; and (5) DuPont had not proved that the infringement was willful. (D.I. 265.) The judgment also permanently enjoined further infringement, and ordered an accounting to determine damages for past infringement. (Id.) See E.I. DuPont de Nemours & Co. v. Phillips Petroleum Co., 656 F.Supp. 1343 (D.Del.1987), rev'd in part, 849 F.2d 1430 (Fed.Cir.1988), cert. denied, 488 U.S. 986, 109 S.Ct. 542, 102 L.Ed.2d 572 (1988).

On February 27, 1987, Phillips moved pursuant to Fed.R.Civ.P. 62(c) for this Court to stay the injunction pending its appeal of the judgment under 28 U.S.C. § 1292(c)(2). (D.I. 267.) The Court temporarily stayed the injunction to allow briefing by the parties. (D.I. 268.)

On March 4, 1987, DuPont filed a notice of this Court's decision with the Patent Office, and requested that the reexamination proceedings be vacated and the reissue application allowed. On March 16, 1987, Phillips filed a notice of appeal of this Court's judgment to the Court of Appeals for the Federal Circuit. (D.I. 275.)

This Court denied the motion to stay the injunction on April 6, 1987, and the injunction was reimposed. (D.I. 283.) See E.I. DuPont de Nemours & Co. v. Phillips Petroleum Co., 659 F.Supp. 92 (D.Del.1987). On April 22, 1987, the Patent Office vacated the reexamination proceedings, and continued the stay of the reissue. Phillips then moved the Federal Circuit for a stay of this Court's injunction, and the stay was granted on December 9, 1987. (D.I. 286.) See E.I. DuPont de Nemours & Co. v. Phillips Petroleum Co., 835 F.2d 277 (Fed.Cir.1987).

On June 15, 1988, the Federal Circuit reversed in part, affirmed in part, and vacated in part this Court's judgment on the liability issues. (D.I. 287.) See E.I. DuPont de Nemours & Co. v. Phillips Petroleum Co., 849 F.2d 1430 (Fed.Cir.1988), cert. denied, 488 U.S. 986, 109 S.Ct. 542, 102 L.Ed.2d...

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