Atlas Powder Co. v. E.I. du Pont De Nemours & Co.

• Citation: 224 USPQ 409,750 F.2d 1569
• Decision Date: 27 December 1984
• Docket Number: No. 84-504,84-504
• Parties: ATLAS POWDER COMPANY, Appellee, v. E.I. DU PONT DE NEMOURS & COMPANY and Alamo Explosives Company, Inc., Appellants. Appeal
• Court: United States Courts of Appeals. United States Court of Appeals for the Federal Circuit

Page 1569

750 F.2d 1569

224 U.S.P.Q. 409

ATLAS POWDER COMPANY, Appellee, v. E.I. DU PONT DE NEMOURS & COMPANY and Alamo Explosives

Company, Inc., Appellants.

Appeal No. 84-504.

United States Court of Appeals, Federal Circuit.

Dec. 27, 1984.

Lawrence F. Scinto, Fitzpatrick, Cella, Harper & Scinto, New York City, argued for appellants. With him on the brief were Joseph M. Fitzpatrick, David F. Ryan, Nels T. Lippert and Laura A. Bauer, New York City, of counsel.

Robert C. Kline and James R. Morrison, Wilminton, Del., and Stanley E. Neely, Locke, Purnell, Boren, Laney & Neely, Dallas, Tex., were on the brief, for appellant.

Garland P. Andrews, Richards, Harris & Medlock, Dallas, Tex., argued for appellee. With him on the brief were Roy W. Hardin and David L. Hitchcock, Dallas, Tex.

Before MARKEY, Chief Judge, and BALDWIN and MILLER, Circuit Judges.

BALDWIN, Circuit Judge.

This is an appeal by E.I. du Pont De Nemours & Co. and its customer Alamo Explosives Co., Inc. (collectively, "Du Pont"). The appeal is from a final judgment of the United States District Court for the Northern District of Texas holding product claims 1-5, 7, 12-14, and 16-17 of U.S. Patent No. 3,447,978 ('978 patent), issued to Harold Bluhm on June 3, 1969 and assigned to the Atlas Powder Co. ("Atlas"), not invalid under 35 U.S.C. Secs. 102, 103, and 112, not fraudulently procured, and infringed. We affirm.

Background

The district court opinion, reported at 588 F.Supp. 1455, 221 USPQ 426 (1983), contains a detailed description of the facts, familiarity of which is presumed herein.

Briefly, the '978 patent relates to blasting agents, i.e., chemical mixtures that are relatively insensitive to normal modes of detonation but can be made to detonate with a high strength explosive primer. By the mid-1960's, blasting agents consisted of two major types: "ANFO" and "water-containing".

An "ANFO" blasting agent comprised a mixture of particulate ammonium nitrate, usually in the form of small round aggregates known as "prills", and fuel oil (e.g., diesel fuel). They were widely used in mining and construction because of their low cost, ease of handling, and ability to be mixed at the blast site rather than prepackaged at the plant. However, to work properly they could be used only in "dry" holes (without water) because water desensitized the mixture, rendering it nondetonable.

A "water-containing" blasting agent, which was water resistant, generally comprised a slurry of particulate ammonium nitrate (or other oxidizing salt), a solid or liquid fuel, at least 5 percent water, and, as a sensitizer to increase explosive power, either a high explosive such as TNT or a chemical such as nitric acid. Often, a gelling agent was added, particularly in the chemical sensitized slurries, to prevent the separation of sensitizers from slurry by Before the '978 invention, Atlas manufactured a gelled slurry blasting agent called Aquanite, based on U.S. Patent No. 3,164,503, issued to Gehrig and assigned to Atlas. Aquanite used as a sensitizer nitric acid, which was highly caustic to skin and clothing and tended to separate out of the product even in the presence of a gelling agent, thereby reducing the product's stability and shelf life. Also, Aquanite was "hypergolic", i.e., it ignited wood, coal and various chemicals upon contact, which was suspected of causing the blasting agent to detonate prematurely.

forming a gel (a colloid in which the disperse phase has combined with the continuous phase to produce a viscous, jelly-like product). The use of sensitizers in water-containing blasting agents made preparation and handling more difficult and dangerous and, hence, more costly.

The Invention

In 1965, Atlas assigned Harold Bluhm to investigate stabilizing its Aquanite gel. Bluhm experimented with various "emulsions" that did not contain nitric acid or a gelling agent. (An emulsion is a stable mixture of two immiscible liquids; a "water-in-oil" emulsion has a continuous oil and discontinuous aqueous phase; an "oil-in-water" emulsion is the reverse.) In early 1966, Bluhm formulated an intimately mixed water-in-oil, water resistant emulsion blasting agent. The product was sensitized with entrapped air rather than high explosives or chemicals and is the subject matter of the claims at issue. Representative is Claim 1:

1. An emulsion blasting agent consisting essentially of:

an aqueous solution of ammonium nitrate forming a discontinuous emulsion phase;

a carbonaceous fuel forming a continuous emulsion phase;

an occluded gas dispersed within said emulsion and comprising at least 4% by volume, thereof at 70?F. and atmospheric pressure; and

a water-in-oil type emulsifying agent;

said carbonaceous fuel having a consistency such that said occluded gas is held in said emulsion at a temperature of 70?F.

Claim 1 is the only independent claim in suit. The other, dependent claims describe various ingredients, such as microspheres for the occluded gas, additional fuels (e.g., aluminum), specific ranges of ingredients, and various properties of the blasting agent.

Du Pont's Activities

Du Pont sold a gelled slurry blasting agent until the latter part of the 1970's. In 1976, Du Pont formed a team to study the feasibility of an emulsion blasting agent. The team succeeded in making a water-in-oil emulsion blasting agent which Du Pont began making and selling in August 1978. Atlas sued for infringement in December 1979.

The District Court Proceedings

A non-jury trial was held between January 28 and February 2, 1982. Du Pont asserted invalidity of the '978 patent under sections 102(a), 103, and 112, "fraud" on the Patent and Trademark Office (PTO), and noninfringement. The district court rejected those assertions for the product claims at issue, holding that: (1) the claimed invention was not anticipated by the prior art; (2) the claimed invention would not have been obvious in view of the prior art; (3) the claims were not invalid for the patent's failure to comply with the "best mode", enablement, and "overclaiming" requirements of 35 U.S.C. Sec. 112; (4) the patent was not procured by "fraud" on the PTO; and (5) Du Pont's products infringed the claims under the doctrine of equivalence. On appeal, Du Pont contests those holdings, except for the one on best mode.

The district court denied Atlas increased damages and attorney fees because Du Pont had not willfully infringed the '978 patent claims and the case was not "exceptional". The district court also held that product claims 6, 13, and 15 were not infringed and that process claims 18-30 were invalid. Atlas has not appealed those holdings.

Issues

(1) Whether the district court was clearly erroneous in finding the invention of the patent claims at issue not anticipated by the prior art.

(2) Whether the district court erred in holding that the invention of the patent claims at issue would not have been obvious.

(3) Whether the district court erred in holding the patent claims at issue not invalid because of nonenablement.

(4) Whether the district court erred in holding no "fraud" on the PTO, i.e., no inequitable conduct.

(5) Whether the district court was clearly erroneous in finding that Du Pont's products infringed the '978 claims under the doctrine of equivalents.

OPINION

I. Standard of Review

The burden is on Du Pont, as appellant, to establish that the district court's ultimate fact findings (e.g., anticipation, infringement) were clearly erroneous, that the district court's legal conclusions (e.g., Sec. 103 obviousness, Sec. 112 enablement) were erroneous, or that the findings underlying the ultimate findings or conclusions were clearly erroneous. The "clearly erroneous" standard is satisfied if we are left with the firm conviction that error has been committed. See, e.g., Raytheon Co. v. Roper Corp., 724 F.2d 951, 956, 220 USPQ 592, 596 (Fed.Cir.1983), cert. denied, --- U.S. ----, 105 S.Ct. 127, 83 L.Ed.2d 69 (1984).

II. Presumption of Validity

Under 35 U.S.C. Sec. 282, a patent is presumed valid, and the one attacking validity has the burden of proving invalidity by clear and convincing evidence. See, e.g., American Hoist & Derrick Co. v. Sowa & Sons, Inc., 725 F.2d 1350, 1360, 220 USPQ 763, 770 (Fed.Cir.1984), cert. denied, --- U.S. ----, 105 S.Ct. 95, 83 L.Ed.2d 41 (1984). In that regard, the district court committed an error.

After correctly stating that the presumption of validity must be overcome with clear and convincing evidence, the district court stated that, if pertinent prior art were not cited to the PTO, as was the case here, the presumption is weakened and Du Pont must prove invalidity by only a preponderance of the evidence. That is incorrect. Though the introduction of prior art not before the PTO may facilitate meeting the challenger's ability to meet the burden of proof on invalidity, the presumption remains intact, the burden of persuasion remains on the challenger, and the "clear and convincing" standard does not change. See, e.g., Jervis B. Webb Co. v. Southern Systems, Inc., 742 F.2d 1388, 1392 & n. 4, 222 USPQ 943, 945 & n. 4 (Fed.Cir.1984); Stratoflex, Inc. v. Aeroquip Corp., 713 F.2d 1530, 1534, 218 USPQ 871, 875 (Fed.Cir.1983).

The error, however, was harmless. Indeed, it helped Du Pont at trial by lowering the standard of proof needed to prove its case. Even with the lower standard, Du Pont was unable to succeed.

III. Anticipation

The district court's determination of no anticipation was a factual one that should be reversed only if appellant shows that it was clearly erroneous. See, e.g., Lindemann Maschinenfabrik GMBH v. American Hoist & Derrick Co., 730 F.2d 1452, 1458, 221 USPQ 481, 485 (Fed.Cir.1984). Du Pont attempts to satisfy its burden by arguing that U.S. Patent No. 3,161,551, to Egly, et al., anticipated the claimed invention. We conclude, however, that the district court's finding of no anticipation was not clearly erroneous.

Egly, which Du Pont...