808 F.2d 1471 (Fed. Cir. 1986), 86-877, Akzo N.V. v. United States Intern. Trade Com'n
|Citation:||808 F.2d 1471|
|Party Name:||Cases 67,529, 1 U.S.P.Q.2d 1241, 5 Fed. Cir. (T) 52 AKZO N.V., Enka B.V., Aramide Maatschappij v.o.f. and Akzona Incorporated, Appellants, v. U.S. INTERNATIONAL TRADE COMMISSION, Appellee, E.I. duPont De Nemours and Co., Intervenor-Appellee.|
|Case Date:||December 22, 1986|
|Court:||United States Courts of Appeals, Court of Appeals for the Federal Circuit|
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Denis McInerney, Cahill Gordon & Reindel, of New York City, argued for appellants. With him on the brief were David R. Hyde, Laurence T. Sorkin, George Wailand and P. Kevin Castel. C. Frederick Leydig, Leydig, Voit & Mayer, LTD., of Chicago, Ill., argued for appellants. With him on the brief were Charles S. Oslakovic, John Kilyk, Jr., and Norval B. Galloway. Also on the brief were Robert H. Falk, Hubbard, Thurman, Turner & Tucker, of Dallas, Tex., Tom M. Schaumberg and Cecilia H.
Gonzalez, Plaia & Schaumberg, Chartered, of Washington, D.C.
Catherine Field, Office of the Gen. Counsel, U.S. Intern. Trade Com'n, of Washington, D.C., argued for appellee. With her on the brief was Michael P. Mabile, Asst. Gen. Counsel.
Daniel M. Gribbon, Covington & Burling, of Washington, D.C., argued for intervenor-appellee. With him on the brief were Harris Weinstein, James R. Atwood, Eugene D. Gulland, Dwight C. Smith, III and Stephen H. Marcus. Joseph M. Fitzpatrick, Fitzpatrick, Cella, Harper & Scinto, of New York City, argued for intervenor-appellee. With him on the brief were John A. O'Brien, Henry J. Renk, Charles P. Baker, Laura A. Bauer and Bruce C. Haas.
Before MARKEY, Chief Judge, DAVIS and NIES, Circuit Judges.
DAVIS, Circuit Judge.
This is an appeal by Akzo, N.V., Enka B.V., Aramide Maatschappij v.o.f. and Akzona Inc. (appellants or Akzo) from an exclusion order by the United States International Trade Commission (Commission or trial tribunal) pursuant to Secs. 337 and 337(a) of the Tariff Act of 1930, 19 U.S.C. Secs. 1337, 1337(a) (1982), prohibiting the importation into the United States of aramid fibers manufactured by Akzo in the Netherlands. We affirm.
I. Background; Issues; Scope of Review
A. Background. On April 18, 1984, E.I. du Pont de Nemours and Company (appellee or Du Pont) filed a complaint with the Commission under Sec. 337 of the Tariff Act of 1930 (19 U.S.C. Sec. 1337). 1 The complaint alleged that Akzo had engaged in unfair methods of competition and unfair acts including the importation, sale and marketing in the United States of certain aramid fibers 2 produced in the Netherlands by a process purportedly covered by the claims of Du Pont's U.S. Letters Patent No. 3,767,756 (the Blades or '756 patent). In addition, the complaint charged Akzo with attempting both to exploit applications of aramid fibers and to penetrate markets for aramid fibers created by Du Pont. Finally, the complaint alleged that the effect or tendency of the unfair methods of competition and unfair acts was to destroy or substantially injure an industry, efficiently and economically operated, in the United States.
After evaluating Du Pont's complaint, the Commission instituted an investigation pursuant to Sec. 337(b), 19 U.S.C. Sec. 1337(b), and an administrative law judge (ALJ) was assigned to preside over the investigation.
The major substantive question before the ALJ (and now before us) is the validity and enforceability of Du Pont's Blades patent. Those issues, and the related facts and circumstances, are set forth and discussed in Part II, infra. The major procedural issue is whether Akzo was denied due process because Du Pont's confidential documents were not disclosed to appellants' management. This problem (together with an alleged violation of treaty rights) is considered in Part III, infra. The other issues presented to us are dealt with in Part IV, infra.
Following 14 days of hearing, the ALJ issued an initial determination holding that
there was a violation of Sec. 337(a) of the Tariff Act of 1930 in the unlawful importation or sale of certain aramid fibers produced overseas by means of a process that if practiced in the United States would infringe the Blades '756 patent, and that importation has the tendency to injure substantially an efficiently and economically operated industry in the United States.
Akzo filed a petition for review of the ALJ's initial determination on June 3, 1985. On July 15, 1985, the Commission decided to review only those portions of the initial determination pertaining to anticipation and obviousness of the Blades '756 patent under 35 U.S.C. Secs. 102 and 103. Ultimately, the Commission affirmed the ALJ's findings and conclusions on anticipation and obviousness and determined that appellants had failed to prove the Blades '756 patent invalid. Having decided not to review the remainder of the initial determination, the Commission concluded that there was a violation of Sec. 337. Accordingly, on November 25, 1985, the Commission, after further consideration, entered an exclusion order limited to certain forms of aramid fibers produced by Akzo. The Commission's order became final on January 25, 1986 when the President declined to overrule it pursuant to Sec. 337(g).
B. Issues. On this appeal, Akzo raises a number of issues for us to resolve:
(1) whether the Commission's finding that claim 13 of the '756 patent was "not invalid" and "not unenforceable" is supported by substantial evidence; 3
(2) whether Akzo's due process and treaty rights were violated in the Commission proceeding;
(3) whether the Commission, as a non-Article III tribunal, is constitutionally prohibited from adjudicating the validity and enforceability of patents;
(4) whether the Commission's finding that Akzo's sales of aramid fibers in the United States would have a tendency to "destroy or substantially injure" an industry economically and efficiently operated is supported by substantial evidence;
(5) whether the Commission's conclusion that Du Pont's value-in-use pricing did not violate the antitrust laws is correct and supported by substantial evidence; and
(6) whether it is a defense to Du Pont's complaint that Du Pont employed a solvent included in a polymerization process patented by Akzo.
C. Scope of review. This court defined our scope of review in cases appealed from the Commission in Beloit Corp. v. Valmet OY, (Order), 742 F.2d 1421, 223 USPQ 193 (1984), cert. denied, 472 U.S. 1009, 105 S.Ct. 2706, 86 L.Ed.2d 721 (1985). There we held that the court "does not sit to review what the Commission has not decided." 742 F.2d at 1423, 223 USPQ at 194. Beloit is distinguishable from this case because there the Commission specifically adopted only a portion of the presiding official's initial decision. See, e.g., American Hospital Supply Corp. v. Travenol Laboratories, Inc., 745 F.2d 1, 5 n. 13, 223 USPQ 577, 580 n. 13 (Fed.Cir.1984). In contrast, in the current case, the Commission merely determined not to review the remainder of the initial decision, choosing to conduct its own Secs. 102 and 103 analysis. The Commission neither rejected any part of the initial determination nor did it say that it was taking no position on any part of it. Although the Commission limited its own review to patent validity under Secs. 102 and 103, the fact that it affirmed the conclusion of the ALJ that there was a Sec. 337 violation makes reviewable those conclusions of the ALJ necessary for the Commission to have determined (as it did) that there was a Sec. 337 violation. Accord Warner Brothers, Inc. v. U.S. International Trade Commission, 787 F.2d 562, 229 USPQ 126 (Fed.Cir.1986). This includes not only the Secs. 102 and 103 issues of anticipation and obviousness, but also whether there was inequitable conduct before
the Patent Office and the other issues decided by the Commission and the ALJ. 4
II. Validity and Enforceability of the Blades Patent
A. The Invention. 5 The Blades '756 patent, "Dry-Jet Wet Spinning Process," was issued on October 23, 1973 to Dr. Herbert Blades and immediately assigned to Du Pont. The patent describes a method that produces a high strength synthetic polyamide 6 fiber which Du Pont has marketed under the trade name Kevlar. This fiber has an extraordinary as-spun strength, five times stronger pound for pound than steel, as well as a modulus (stretch resistance) equal to glass, eight times as high as industrial grade polyester, and twenty-five times as high as industrial nylon. Kevlar is also much more heat resistant than industrial-grade nylon or polyester. These extraordinary physical properties, as well as Kevlar's light weight and rustproof character, have enabled Du Pont to market it for use in a variety of applications including, but not limited to, roping, spacecraft and airplane parts, bullet resistant clothing and armor, tires, and boat hulls. Depending upon its use, Kevlar has been used as a substitute for steel, aluminum, asbestos, nylon, rayon, polyester, cotton, or cotton fiber. Kevlar is available as either a continuous rope or filament, or alternatively as a staple or pulp. Staple consists of short filaments which can be spun into yarn. Pulp is ground fiber most often used as an asbestos substitute.
The procedure by which the synthetic fiber is manufactured involves dry spinning polyamides from coagulation solutions called dopes. In dry spinning, a specialized filter called a spinneret is placed a short distance from a bath of spinning dope that is extruded through a layer of gas and into an aqueous coagulation bath. 7 The dope used in the Blades '756 patent consists of para-positioned aromatic polyamides dissolved in highly concentrated sulfuric acid and heated to around 100?C. The polyamide used is a high molecular weight poly(p-phenylene terephthalamide) (PPD-T).
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