Procter & Gamble Mfg. Co. v. Refining, 5027.

• Decision Date: 21 May 1943
• Docket Number: No. 5027.,5027.
• Citation: 135 F.2d 900
• Parties: PROCTER & GAMBLE MFG. CO. v. REFINING, Inc.
• Court: U.S. Court of Appeals — Fourth Circuit

135 F.2d 900 (1943)

PROCTER & GAMBLE MFG. CO. v. REFINING, Inc.

No. 5027.

Circuit Court of Appeals, Fourth Circuit.

May 21, 1943.

Drury W. Cooper, of New York City (Marston Allen and Erastus S. Allen, both of Cincinnati, Ohio, and George M. Lanning, of Norfolk, Va., on the brief), for appellant.

Charles M. Thomas, of Washington, D. C. (William F. Hall, of Washington, D. C., and Barron F. Black, of Norfolk, Va., on the brief), for appellee.

Before PARKER, SOPER, and DOBIE, Circuit Judges.

SOPER, Circuit Judge.

The subject matter of this suit is United States patent No. 2,100,274 issued to Benjamin Clayton and others on November 23, 1937 upon an application filed May 2, 1931. The invention relates, as the specification states, to an improved process for refining oils, more particularly vegetable and animal oils capable of separation and refining. The invention was designed particularly for the refinement of cotton seed and similar oils, consisting principally of neutral oil, the major and more valuable component, and fatty acids together with certain impurities such as resin, gum and dye stuff. The principal objects of the invention were to reduce the time consumed in the separation of these constituents and to recover more completely the more valuable ones; and these objects were actually attained in so striking a manner that after an exhaustive trial the District Judge made the finding upon abundant evidence that Clayton had made a discovery which substantially revolutionized the art of refining vegetable oils.

The Batch or Kettle Process.

For a half century prior to the advent of Clayton, the industry employed the batch or kettle process of refining vegetable and animal oils, especially cotton seed oils. In this process crude oil and a solution of caustic soda flow by gravity from separate storage tanks into a kettle large enough to hold 60,000 pounds of the oil and 3,600 pounds of the lye, and the contents of the kettle are vigorously agitated by horizontal power driven blades so as to mix the ingredients. The quantity of caustic soda is determined after chemical analysis of the oil and is made sufficient to cause the separation of the free fatty acids and other undesirable constituents in the oils. The agitation continues until a "break" in the mixture occurs and the "foots" or soap stock begin to separate from the neutral oil. Heat is then applied by steam passed through coils in the mixture and through a steam jacket in the bottom of the kettle and the agitation is continued until a definite break between the oil and the soap stock takes place, usually at a temperature from 100 to 140° Fahrenheit. Then the agitation stops and the soap stock settles to the bottom. After the settling has reached the proper stage, the refined neutral oil is drawn off through a decanting pipe at different layers because the upper layers are freer from the soap stock; and finally the soap stock is allowed to fall by gravity into a tank below the kettle. The process is not continuous, but is applied to separate batches of oil.

Normally from 8,000 to 8,400 pounds of soap stock are collected from a batch of oil of 60,000 pounds. The soap stock, however, consists, to the extent of 30% or 2,500 pounds in weight, of entrapped neutral oil, which is the more valuable product, and in addition a substantial amount of neutral oil is lost through saponification caused by the exposure of the oil to the caustic during the long application of heat. Attempts were made in the industry to salvage a part of the entrapped neutral oil but they were abandoned in the 1920's as commercially impracticable.

The time ordinarily consumed in refining a batch of 60,000 pounds of neutral oils runs ordinarily from 12 to 24 hours, although the process has been performed in 8 or 9, according to some witnesses. The amount of oil lost and the time consumed in the process were recognized as defects characteristic of the method, and efforts were made to correct them.

Clayton Process.

Clayton declared in his application for the patent that his object was to solve these problems and that he had done so by employing a continuous process which was accomplished in a few minutes without substantial loss of the neutral oil in the foots or soap stock. Instead of a large batch of oil, as in the kettle process, small quantities of crude oil and caustic solution are mixed in a tank and the mixture is caused to pass through a pump where further mixing occurs; and then the moving stream passes through a heated coil wherein the refining and conditioning reactions are completed and the emulsion is made ready for separation in a centrifuge to which it is then conducted. The whole operation is continuous and is completed in a few minutes as compared with the "hours or days" required in the kettle process.

The streams of oil and caustic are measured and mixed in predetermined quantities and synchronized so that each increment of oil in the continuous process receives the proper increment of caustic and the uniformity of the admixture is assured before the heater is reached. The result is that the free fatty acids are neutralized with substantial completeness and the foots or soap stock is produced before the conditioning in the heater takes place. The emulsion continues to flow uninterruptedly under pressure from the mixing zone to the heating or conditioning coil, and then passes through the coil in which the temperature progressively rises, and the refining reactions are completed.

The patent states that coordination should be maintained between the constant volume of input, output and the volume of heat applied so as to establish the proper velocity and turbulence of the oil in order to ensure the diffusion of the alkaline solution and the action thereof upon every particle and globule of the oil. By these means, the experts explain, the chemical processes begun in the mixing zone are brought to completion in the coil. The emulsion is broken and the material is conditioned for the subsequent centrifugal separation because the particles are made larger by agglomeration. The viscosity of the oil is reduced and the foots are softened so that they can flow together. Claim 2 of the patent directs that the mixture be passed through a heated conduit to raise the temperature to a degree which will facilitate centrifugal separation, and the evidence shows, as the District Judge found, that sufficient information is found in the patent to guide one skilled in the art to adopt the process to the different grades and qualities of oil encountered in commercial refining, precisely as is done in the kettle process in which higher temperatures are usually employed.

The final step in the process consists in propelling the mixture under pressure at a uniform rate of feed into a centrifuge where the neutral oil is separated from the foots or soap stock precipitated by the alkali treatment in the coils.

Commercial Success.

The District Judge found from the evidence that when the Clayton process is used in the commercial refinement of vegetable oils, the total time is reduced from the hours consumed in the kettle process to minutes, and that a saving is made of 20 to 30 per cent of the neutral oil entrapped and lost in the soap stock in the kettle process. Naturally the process has met with great favor in the trade. The majority of the cotton seed oil refiners, including Swift & Company, Armour & Company, Lever Bros. Co., Simonin's Sons, Inc., Best Foods, Inc., Corn Products Refining Company and other important manufacturers have taken licenses and paid substantial royalties under the patent.

Interference Proceeding between Clayton and James.

The Procter & Gamble Manufacturing Company, the defendant-appellant in the pending case, has also paid tribute to the new process by adopting it and using it continuously since June, 1932, after an experimental or demonstration unit, installed in its plant by the Sharples Specialty Company, showed a saving of 30 per cent as compared with the batch or kettle process. At that time the defendant seems to have assumed that the invention had been made by Edward M. James and took a license from Sharples, his employer and assignee. James had in fact hit upon the process as the result of study and experiments performed in Sharples' employ, and had filed an application for a patent on October 6, 1931, six months after Clayton's filing date. As a result the Patent Office placed the two applications in interference in the summer of 1932 and there ensued a long and active contest lasting five years in which the leading attorney for the defendant in the pending case represented the James' interests. The Patent Office tribunal, and finally, the Court of Customs and Patent Appeals in a decision rendered June 21, 1937 (James v. Clayton, 90 F.2d 337, 24 C.C.P.A., Patents, 1329), awarded priority to Clayton. It was held that James was the first to conceive the invention, but Clayton was the first to reduce it to practice.

Clayton notified the defendant of the interference proceeding and offered the defendant a license under the patent in January, 1933, subject to the payment of a running royalty. The defendant was familiar with the Clayton process from an examination that took place in the plaintiff's laboratory in December, 1932, but refused the offer of a license and chose instead to purchase equipment for practicing the process from Sharples and to accept from Sharples in May, 1933, a license without payment of royalty to operate any of Sharples' existing patents or any patents that might thereafter be acquired. The Sharples equipment and process closely approximated the Clayton method. In 1938, a year after the issuance of the Clayton patent, the defendant, upon the advice of counsel, modified its equipment in a minor particular but retained the substance of the Clayton invention. The District Judge found that both of the accused processes, called...