Beckman Instruments, Inc. v. Chemtronics, Inc.

• Citation: 428 F.2d 555
• Decision Date: 19 June 1970
• Docket Number: No. 27412.,27412.
• Parties: BECKMAN INSTRUMENTS, INC., and Leland C. Clark, Jr., Plaintiffs-Appellants-Cross Appellees, v. CHEMTRONICS, INC. and J. Ryan Neville, Defendants-Appellees-Cross Appellants.
• Court: United States Courts of Appeals. United States Court of Appeals (5th Circuit)

428 F.2d 555 (1970)

BECKMAN INSTRUMENTS, INC., and Leland C. Clark, Jr., Plaintiffs-Appellants-Cross Appellees, v. CHEMTRONICS, INC. and J. Ryan Neville, Defendants-Appellees-Cross Appellants.

No. 27412.

United States Court of Appeals, Fifth Circuit.

April 14, 1970.

Rehearing Denied and Rehearing Denied June 19, 1970.

Bernard Ladon, San Antonio, Tex., Kenway, Jenney & Hildreth, Herbert P. Kenway, L. William Bertelsen, Melvin R. Jenny, Boston, Mass., Frank B. Pugsley, Baker, Botts, Shepherd & Coates, Houston, Tex., Lawrence B. Biebel, Mario A. Martella, Joseph G. Nauman, Dayton, Ohio, for defendants-appellees-cross-appellants.

Bill Durkee, Tom Arnold, John F. Lynch, Houston, Tex., Patrick H. Swearingen, Jr., San Antonio, Tex., for plaintiffs-appellants cross-appellees.

Before GEWIN, THORNBERRY and AINSWORTH, Circuit Judges.

Rehearing Denied and Rehearing En Banc Denied June 19, 1970.

THORNBERRY, Circuit Judge.

This patent appeal concerns two inventions used in electrochemical analysis. Appellant Beckman sued appellee Chemtronics in the court below, requesting an injunction against continued infringement of its patent. Chemtronics replied by denying infringement, challenging the validity of Beckman's patent, raising issues as to ownership of the patent, charging patent misuse, accusing Beckman of fraud on the Patent Office, and counterclaiming for treble damages under both sections of the Sherman Act.¹ Confronted with this maze of issues, the district court held the patent valid but uninfringed. Consequently, it denied all relief requested by the parties.

Before considering the issues, we observe that the Supreme Court has indicated that this disposition of patent cases, even though it is usually the simplest way to deal with complex litigation, should be reviewed with care. In Sinclair & Carroll Co., Inc. v. Interchemical Corp., 1945, 325 U.S. 327, 65 S.Ct. 1143, 89 L.Ed. 1644, the Court observed that "there has been a tendency among the lower federal courts in infringement suits to dispose of them without going into the question of validity of the patent. * * * It has come to be recognized, however, that of the two questions, validity has the greater public importance."² The Court in Sinclair went on to reverse a circuit court's judgment of noninfringement and to hold the patent invalid. During the current term, the Court took similar action in Anderson's-Black Rock, Inc. v. Pavement Salvage Co., 1969, 396 U.S. 57, 90 S.Ct. 305, 24 L.Ed.2d 258, reversing an order of the Fourth Circuit holding a patent valid in an infringement suit. In the course of its opinion, the Court re-emphasized the public importance of the validity issue. The reason for the public interest in patent validity is clear: A patent confers a monopoly on its holder, and the law does not allow the granting of these valuable franchises to private individuals, with consequent public detriment, unless there is a concomitant public benefit.³

Against this background, we affirm the denial of relief against appellee, but on different grounds from those advanced by the district court. We disagree with the court's holding that the patent is valid. Because of this holding, we are not required to examine the court's finding of noninfringement.⁴ We are, however, required under our view of the case to consider appellees' anti-trust counterclaim, and we find that we must remand this part of the case to the district court for further proceedings.

I. BACKGROUND: THE INVENTIONS AT SUIT

Both inventions at issue are designed primarily to determine the concentration of oxygen in liquids or gases. Fast and accurate determination of this concentration can be done by electrical analysis. The basic principles of the type of electroanalysis used here have been known for a long time, but the application of these principles to practical problems is often extraordinarily difficult. The electrodes of the measuring device must come into contact with the sample that is being analyzed, and the most serious problems occur at this contact point when either (1) the substance used to make the electrodes reacts with, and pollutes, the sample, or (2) the sample fouls the electrodes by plating them. It is the solution of this problem that characterizes the inventions at suit.

The devices at issue here are both improvements on a principle of electrochemistry known as polarography. Polarography was invented in 1923 by a Czech scientist named Heyrovsky, who used what is known as a "dropping mercury electrode" for his negative electrical contact, the one that came into contact with the substance to be measured. Above the electrode was a reservoir of mercury, leading down into a dropper which had contact with the sample; a drop of mercury would form in the sample, make electrical contact, react with and become fouled by the sample and then drop harmlessly to the bottom of the tank, to be replaced by a new drop. Thus, although the electrode was continuously being fouled it was also continuously being renewed.

Heyrovsky created a voltage across the positive and negative electrodes of the device, varied the voltage, and observed the current that was produced by increasing voltages. At a certain voltage, depending on the composition of the sample, the current would suddenly jump from one relatively constant level to another. This was so because at that certain voltage the substance diffused from solution to the negative or measuring electrode, was forced by that electrode to take on electrons, and caused a current to flow. The current produced was proportional to the rate of diffusion, which in turn was proportional to the concentration of the sample in solution; this is the basic principle behind polarography. Heyrovsky's invention was valuable because the voltage at which the reaction occurred could be used to identify the components of the sample and the amperage of the current generated could be used to determine the concentration of these components. Thus polarography, loosely defined, is a method of electrochemical analysis which involves the use of a voltage across a sample solution to generate a measurable current, which is then used to determine concentration of components in a sample.⁵

Since 1923, there have been numerous improvements upon and new applications of the polarographic principle. It has been possible in many cases to replace the clumsy and limited dropping mercury electrode with solid electrodes that are easier to use; this replacement has sometimes involved protecting the electrode by a membrane selectively permeable to the substance to be measured. The membrane prevents both fouling and pollution while allowing the appropriate sample constituent to diffuse through to the measuring electrode.

In 1954, Dr. Richard Stow advanced the art of membrane electrochemistry by an elegantly simple invention that is part of the background to this litigation. The invention as he actually constructed it was not within the realm of polarography, but rather concerned a related field called potentiometric analysis. Stow placed both electrodes behind a single selectively permeable membrane, with one electrode surrounding the other concentrically, and was able to measure the concentration of carbon dioxide in blood, a measurement theretofore difficult to make. Stow did not patent his device, but disclosed it to the public by a published article and a public speech.

Beckman's licensor, Dr. Leland C. Clark, who is an appellant along with Beckman in this case, was also concerned with analysis of blood components. Specifically, he had been trying to find a way to measure blood oxygen content (in order to study respiratory diseases and the like), and had attempted to adapt polarographic techniques by covering one electrode with a membrane. Many others were attempting to make this same measurement; the problem had, in fact, confronted the scientific community for some time. One day the answer came to Clark all of a sudden: Instead of wrapping only one electrode in a membrane, he could put both electrodes behind the same membrane. This electrode arrangement, of course, was identical to the one Stow had invented. The cell Clark originally constructed had two concentric electrodes surrounded by a single selectively permeable membrane, and looked a great deal like the Stow device.⁶ It was successful in measuring oxygen in blood. Clark, who appears to have been somewhat more an entrepeneur than Stow, negotiated with Beckman, sold Beckman rights in his device, and assisted Beckman, in getting a patent on it. It is this patent upon which Beckman's suit in the instant case is premised. Since being patented, the Clark device has been refined considerably. Today, Beckman manufactures an instrument with the Clark cell miniaturized in the head of a needle so that it can be immersed in a patient's blood vessels to determine blood oxygen content while the blood is circulating in the body. Beckman has seventeen sublicensees and sales have run into the millions of dollars.

The allegedly infringing device manufactured by appellee Chemtronics is described in a patent secured by Dr. J. Ryan Neville, who is also an appellee. The purpose of the device is to sense the amount of oxygen inside aviators' masks. Neville apparently invented it without reference to Clark's invention, although he was aware of Clark's earlier work and the work of Stow.

II. THE VALIDITY OF THE PATENT SUED UPON

We find the patent sued upon in this case to be invalid for two independent reasons. The first is that the patent is anticipated by prior art. As written, its claims include only the invention of Stow, with no novel additions. The second is that Beckman, in securing the patent, failed to fulfill the "uncompromising duty" of disclosure of an applicant before the Patent Office, because Beckman, while possessed of information regarding Stow's invention and realizing its significance, omitted that information...