Armour & Co. v. Wilson & Co.

• Decision Date: 14 January 1960
• Docket Number: No. 12595.,12595.
• Citation: 274 F.2d 143
• Parties: ARMOUR & CO., Plaintiff-Appellant, v. WILSON & CO., Inc., Defendant-Appellee.
• Court: U.S. Court of Appeals — Seventh Circuit

274 F.2d 143 (1960)

ARMOUR & CO., Plaintiff-Appellant, v. WILSON & CO., Inc., Defendant-Appellee.

No. 12595.

United States Court of Appeals Seventh Circuit.

January 14, 1960.

COPYRIGHT MATERIAL OMITTED

Casper W. Ooms, Herman Hersh, David L. Ladd, Horace Dawson, Timothy L. Tilton, Chicago, Ill., for appellant.

Roger T. McLean, New York City, R. Howard Goldsmith, Thomas Freeman, Chicago, Ill., for appellee.

Before HASTINGS, Chief Judge, and DUFFY, SCHNACKENBERG, PARKINSON,^* KNOCH and CASTLE, Circuit Judges.

DUFFY, Circuit Judge.

Armour brought this suit against Wilson for infringement of Thompson Patent No. 2,669,537 and Bunding Patent No. 2,669,536. The District Court held the Thompson patent invalid, and the Bunding patent invalid but not infringed. If the Thompson patent is valid, Wilson admittedly infringed it. The instant case was tried on defenses relating to the validity of the Thompson patent, and on this appeal we are concerned only with the Thompson patent. Claims I and II of the patent in suit are relied on by Armour.

The first paragraph of the patent in suit, succinctly, if not monosyllabically, describes the patent as follows: "This invention relates to an adrenocorticotrophin preparation suitable for intramuscular or subcutaneous injection and having an enhanced adrenocorticotrophic effect." The product with the jaw-breaking name of adrenocorticotrophin is widely known as ACTH. The patent covers Dr. Thompson's alleged invention of the pharmaceutical combination of gelatin and adrenocorticotrophin (ACTH).

Both Armour and Wilson manufacture and sell gelatin-ACTH preparations which are covered by Claims I and II of the patent. These products also include 0.5% phenol, a standard anti-bacterial agent. Gelatin-ACTH now constitutes more than 80% of all forms of ACTH products sold by Armour and Wilson. Other companies licensed under the Thompson patent also produce similar products.

In a human being, adrenocorticotrophin (ACTH) appears in the anterior lobe of the pituitary gland located at the base of the brain. When the human body is under stress or attacked by certain diseases, control centers in the brain excite the pituitary, and the pituitary secretes ACTH. In the blood stream the ACTH thus secreted is carried to the adrenal glands situated in the human body above the kidneys. As the ACTH hits the outer wall of the adrenal glands, it stimulates the adrenals to produce a set of chemical substances such as steroids, including the hormones, cortisone and hydrocortisone.

The cortisone hormones then act in the tissues of the body to suppress inflammations and allergic reactions. ACTH thus is used to relieve such conditions as rheumatoid arthritis and allergies. ACTH does not, itself, directly attack disease. However, it stimulates the adrenals which produce more than twenty-eight steroids, and these hormones attack the diseased tissues. When the human body itself does not supply sufficient ACTH, pharmaceutical ACTH can fill the gap.

Medical science has not been able to synthesize ACTH. However, this product suitable for human use can be obtained from the pituitaries of animals including hogs and cattle. Armour and Wilson base their production of ACTH on by-products of their meat-packing operations.

Although medical science knew that ACTH existed prior to 1942-1943, it was not until that time that good assay techniques were developed which facilitated purification. Wilson became interested at that time and obtained a method for preparing the pituitary extract from a Dr. Astwood.¹ Armour had shown an interest in ACTH at an even earlier date. By 1948 Armour had developed an ACTH material suitable for experimentation by clinicians.

In 1949, Dr. Hench and associates at the Mayo Clinic using Armour ACTH, discovered the substance was useful in the treatment of rheumatoid arthritis. The news of these experiments was widely disseminated, and a large scale commercial demand was created far beyond the facilities of the pharmaceutical industry to supply. The cost of animal glands used in the production of ACTH skyrocketed from $7.00 a pound to over $100.00 a pound, and even at that price, the supply was not adequate.

ACTH is destroyed in the human digestive system. Hence, two methods of administration were developed. One was intravenous (injection into the veins) and the other intramuscular or subcutaneous (injection into tissue).

The adrenals operate on a trigger principle in the production of cortisone, hydrocortisone and other steroids. Once the adrenals have been sufficiently stimulated to begin operation, they react fully and produce steroids at their maximum for a short interval. Larger doses of ACTH during that interval will not produce further response in quantity. For reasons not fully understood ACTH cannot survive long in the blood. Any quantity above the trigger amount is quickly destroyed and thus wasted. When injected into the tissues (intramuscular), ACTH, when unprotected, will not survive in muscular tissue any more than in the blood. If ACTH is given in large doses, much of it will not reach the adrenals and is consequently wasted. Dr. Forsham, an expert for plaintiff, testified one unit of ACTH injected intravenously by continuous drip over a period of eight hours produces the same results as forty units injected all at one time.

As ACTH could not be given intravenously in quantities, a method was devised for administering same by intravenous drip. A needle would be inserted in the patient's vein, taped in place, and kept there many hours to permit the ACTH to drip slowly and continuously into the vein. Such a method was cumbersome and necessarily immobilized the patient.

Plaintiff says what was needed was an ACTH preparation which could be administered in infrequent injections; would trigger the adrenals quickly into the production of steroids and sustain that production; would provide a maximum action with a minimum amount of ACTH, and would prevent waste of the valuable ACTH. Plaintiff claims the Thompson invention of gelatin-ACTH provided the answer.

Before September, 1949, Dr. Wolfson, a clinical investigator at Michael Reese Hospital, and Dr. Thompson and his associates at Armour, separately sought an ACTH preparation which would overcome the waste of ACTH. Dr. Wolfson tried two approaches which had met with some success in connection with insulin and penicillin, such as insolubilizing the ACTH and combining ACTH with a water repellent (hydrophobic) material. However, these experiments were not successful.

In June, 1949, Dr. Wolfson came to the Wilson laboratories and discussed with Dr. David Klein of Wilson, means to prolong the activity of ACTH. Gelatin was mentioned. On July 26, 1949, Wolfson wrote Dr. Klein and stated: "* * * I have tried a number of expedients to make ACTH with prolonged action, ranging from tannates to protamine-zinc derivatives and including suspending the material in sesame oil. * * * and the non-antigenic gelatin sounds to me to be a considerably better idea. Could you spare some of this material for me to putter with?" Dr. Klein did not send the gelatin until September 12, 1949.

As a part of Armour's crash program, Thompson had been trying to find a retardant for ACTH. He tried insolubilizing the ACTH and combining ACTH with a hydrophobic vehicle. Thompson had given some consideration to gelatin, but at first did not think it promising enough to pursue.

Wolfson believed he had found a long-acting ACTH — a combination of ACTH with aluminum phosphate which insolubilized the ACTH. But this did not prove satisfactory for clinical use. The sharp particles of the aluminum were irritating upon injection into the tissues. Thompson proposed to Wolfson that he add to the aluminum phosphate-ACTH, a viscous medium which would coat the aluminum phosphate particles and overcome local irritation which had thwarted Wolfson's experiments. On September 27, 1949, Wolfson injected an aluminum phosphate preparation with gelatin into a patient named Loidl at Michael Reese Hospital. Plaintiff claims the gelatin used in the Loidl test was supplied by Dr. Thompson. However, the preparation was found to be just as irritating as it was before the gelatin was added. The District Court found that this was the first clinical use of gelatin with ACTH.

Dr. Thompson's notebook reveals an entry under date of October 20, 1949: "Dr. Wolfson suggested combining all the known effective delaying agents, trying the combination clinically, and by elimination, try to arrive at an effective prepartion." The first written entry in the Thompson notebook suggesting the possible use of gelatin and ACTH appears under date of November 22, 1949.

By February, 1950, Dr. Thompson had arrived at a gelatin-ACTH preparation without using aluminum phosphate. First Armour, and a few months later, Wilson, were on the market with gelatin-ACTH. Both of these products included 0.5% phenol.

The District Court held the claims of the Thompson patent in suit invalid for a number of reasons including: 1) because the use of gelatin with ACTH was obvious to those skilled in the art; 2) the claims are invalid for lack of invention over the prior art; 3) because Thompson was not the first and original inventor.

The District Court also held the patent invalid because Armour sold ACTH in gelatin compositions in the fall of 1951, more than one year prior to the filing date of Thompson's continuation-in-part application filed December 27, 1952. The Court held this was a public use more than one year prior to Thompson's effective filing date.

The District Court found fraud on the part of Thompson in a number of respects. The Court found the Thompson patent was improperly prosecuted by furnishing the Patent Office with false and misleading information and statements. Reliance was placed upon Thompson's report to the Patent Office of the results of a test upon rats. It was also charged that complete disclosure...