Chemical Engineering Corp. v. Essef Industries, Inc.
| Decision Date | 03 July 1986 |
| Docket Number | Nos. 85-540,85-1516,s. 85-540 |
| Citation | 230 USPQ 385,795 F.2d 1565 |
| Parties | , 5 Fed.R.Serv.3d 638 CHEMICAL ENGINEERING CORPORATION and John O. McLean, Appellants, v. ESSEF INDUSTRIES, INC. and Willard Stutzman, et al., Appellees. Appeal |
| Court | U.S. Court of Appeals — Federal Circuit |
David A. Lundy, Lundy and Associates, Fort Wayne, Ind., argued, for appellants. With him on brief, was Robert Luke Walker.
William McCoy, Jr., Pearne, Gordon, Sessions, McCoy, Granger and Tilberry, Cleveland, Ohio, argued, for appellees. With him on brief, was Thomas P. Schiller.
Before MARKEY, Chief Judge, RICH and BALDWIN, Circuit Judges.
Chemical Engineering Corporation and John O. McLean (collectively, CE) appeal from orders of the United States District Court for the Northern District of Indiana: (1) granting summary judgment of non-infringement to Essef Industries, Inc., Willard Stutzman, et al. (collectively, Essef); and (2) awarding costs to Essef under Fed.R.Civ.P. 37(c). We affirm.
CE sued Essef on October 14, 1982, alleging willful infringement of U.S. Patent No. 3,649,532 to McLean (McLean Patent) and unfair competition "by copying well-known patented features of [CE's] method of treating water and by otherwise causing customer confusion."
The McLean patent relates to water treatment for removing natural acidity, soluble and insoluble iron, silt, particulate matter, and sulfur odors from domestic water supplies. Independent claim 1 reads:
1. A process of treating well water for purification thereof to improve palatability, remove iron and reduce aggressiveness due to the acidity of the water, comprising the steps of conducting impure water from a well, introducing and mixing a substantial amount of air in said water, the amount of air being insufficient to substantially precipitate the iron from the water or to raise the pH of the water to an alkaline level, venting excess air from said air and water so mixed while containing the same, and thereafter gradually raising the pH of the water to 7.0-7.5 while filtering iron hydroxide and other impurities therefrom by passing air and water so mixed while so contained directly through a mineral bed comprised of a mineral capable of raising the pH to 7.0-7.5 and being of particulate size sufficient to filter iron hydroxide and other solid impurities precipitated therefrom during said raising of the pH. [Emphasis added.]
Independent claim 4 reads:
4. A unitary water treating apparatus adapted to remove normal impurities comprising bad taste and odor, iron and aggressiveness due to acidity from well water consisting essentially of a single water tank containing a mineral filter bed in the lower portion thereof, means for conducting water from a well into said tank above and adjacent to said mineral bed, means for mixing air with said water in an amount insufficient to substantially oxidize and precipitate the iron from the water or to raise the pH of the water to an alkaline level prior to passage thru said mineral bed, and withdrawal conduit means located in the lower portion of said tank beneath at least a substantial part of said mineral bed for withdrawing water from said tank, said mineral bed being comprised of a mineral capable of raising the pH of said water as it is passed therethrough to 7.0-7.5 and being of particulate size sufficient to filter iron hydroxide and other solid impurities precipitated therefrom during said raising of the pH. [Emphasis added.]
Dependent claim 5 reads:
5. Apparatus as defined in claim 4, wherein said means for mixing air with said water is a device located in said water conducting means, and said tank is further provided with means for venting excess air and any entrained gases prior to passage of said water thru said mineral bed.
On December 6, 1982, Essef denied infringement and unfair competition and counterclaimed for a declaratory judgment of invalidity, non-infringement, and unfair competition for "filing of the Complaint ... while knowing full well that [Essef has] not manufactured or assisted or induced others in the manufacture of any device which could in any way be construed to be an infringement ..." Essef demanded costs, attorney fees, and treble damages for lost sales because of CE's alleged unfair competition.
On December 15, 1982, CE answered, denying Essef's counterclaim.
On July 25, 1983, Essef moved for summary judgment of non-infringement, saying its devices (1) "do not raise the pH of the water, which is a requirement of [the McLean patent]," and (2) "have internal processes which are entirely different from those of [the McLean patent]." It also moved to dismiss CE's unfair competition claim. 1
Essef submitted affidavits of Gerald Matisoff (Associate Professor of Geological Sciences at Case Institute of Technology) and Lowell L. Heinke (a patent attorney), and six exhibits: (1) copy of the McLean patent; (2) sketch attached to Matisoff affidavit; (3) chart of test results attached to Matisoff affidavit; (4) Matisoff's test report; (5) copy of U.S. Patent No. 2,237,882 to Lawlor (Lawlor); and (6) opinion of the Circuit Court, County of Lenawee, State of Michigan, in Laurene O. Paterson v. Chemical Engineering Corp., No. 82-10-1709 (June 10, 1983) (Lenawee opinion), stating that: (1) CE misappropriated trade secrets of Dr. Paterson (inventor-assignor of a water treatment patent to Essef); and, (2) CE's continued manufacture of its device violated that court's temporary restraining order. 2
Matisoff stated that on June 7 through June 9, 1983, he conducted tests on Essef devices installed in three homes in Northern Ohio to determine whether those devices raised the pH of water. Matisoff took samples of water from five locations: as it came out of the well before the micronizer (a pre-treatment chamber); immediately after the micronizer; before the pressure tank; immediately before the filter tank; and after the filter tank.
The June 7 test was attended by Robert Wilfong and David A. Lundy, President and Counsel respectively for CE. Wilfong and Lundy declined Essef's invitation to attend further tests on June 8 and June 9.
These test results were reported:
At the Isabella residence, the pH of the inflowing ground water dropped from 6.3 to about 6.1 during the tests. At the Long residence, it remained relatively constant at 6.6, and at the Speer residence, it remained relatively constant at 5.9. The water after the filter tank had a pH value less than that of the water flowing into the filter tank. At the Isabella residence, this pH drop was .2 to .3 pH units; at the Long residence it was .1 unit, and at the Speer residence it was .15 unit. 16 parts per million of iron were removed at the Isabella residence, 8 [parts per million] were removed at the Long residence, and 9 [parts per million] were removed at the Speer residence. At all three residences, the ESSEF iron removal system successfully removed iron down to the desired 0.3 parts per million level.
Matisoff also conducted tests to determine whether the filter media might have affected the pH. On completion of those tests, Matisoff reported that the pH at the Isabella and Speer residences remained constant, while pH actually dropped by about .07 units at the Long residence.
Matisoff then summarized his results:
The tests conclusively established that there is no increase in the pH across the mineral or filter bed of the device manufactured by ESSEF Industries, Inc. as installed and operated in a home or similar situation. The tests established a contrary proposition, namely, that there
is a slight decrease in the pH across the mineral or filter bed.
Heinke stated that: he had studied the prosecution history of the McLean patent; the Lawlor patent disclosed every significant feature of claim 1 except for "gradually raising the pH of the water to 7.0-7.5 ..."; in his opinion, Lawlor taught every significant feature of claims 4 and 5 except for "said mineral bed comprised of a mineral capable of raising the pH ... to 7.0-7.5; the quoted language formed "critical limitations" in claims 1, 4, and 5; he attended Matisoff's June 8 tests and observed that the Essef device did not raise the pH passing through the mineral bed; and the Essef device did not infringe claims 1, 4, or 5 because it did not raise the pH of the water as it passed through the mineral bed.
On August 24, 1983, CE submitted affidavits of Lundy (trial counsel) and Kinzer (a patent attorney), supplementing those affidavits with portions of the McLean prosecution history, letters between counsel for CE and Essef about Matisoff's tests, and a statement from the Lenawee opinion.
CE said its assertion of infringement, without more, raised genuine and material fact issues inappropriate to summary judgment. In a Memorandum, it argued that: (1) Essef had not proven that its device did not raise pH (i.e., did not literally infringe); and (2) assuming that were proven, Essef had not proven that its device did not infringe under the doctrine of equivalents.
CE attacked Matisoff's tests as "clearly ex parte" and thus non-probative: 3
Plaintiffs were invited only to attend tests conducted by Defendants' expert on units preselected by Defendants, operating under conditions predetermined by Defendants. Plaintiffs requested, but were forbidden, to have any "input" as regards those tests or from doing contemporaneous testing of their own on the same units or from disassembling and examining the units.... Plaintiffs have not had the opportunity to run tests on Defendants' same units. Plaintiffs have not had the opportunity to depose Gerald Matisoff as to the tests he conducted or as to his choice or [sic] iron removers to be tested.
CE also attacked the relevance of Matisoff's tests,...
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