Borden, Inc. v. Occidental Petroleum Corporation

• Decision Date: 19 June 1974
• Docket Number: Civ. A. No. 70-H-149.
• Citation: 381 F. Supp. 1178
• Parties: BORDEN, INC., Plaintiff, v. OCCIDENTAL PETROLEUM CORPORATION and Occidental Chemical Company, Defendants.
• Court: U.S. District Court — Southern District of Texas

381 F. Supp. 1178

BORDEN, INC., Plaintiff, v. OCCIDENTAL PETROLEUM CORPORATION and Occidental Chemical Company, Defendants.

Civ. A. No. 70-H-149.

United States District Court, S. D. Texas, Houston Division.

June 19, 1974.

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Bill Durkee, Arnold, White & Durkee, Houston, Tex., Stanton T. Lawrence, Jr., Pennie, Edmonds, Morton, Taylor & Adams, New York City, for plaintiff.

Jefferson D. Giller, Fulbright & Crooker, Houston, Tex., Andrew J. Belansky, Christie, Parker & Hale, Pasadena, Cal., for defendants.

MEMORANDUM AND OPINION

CARL O. BUE, Jr., District Judge.

This is a highly complex patent infringement suit involving what is alleged by plaintiff to be a "specifically claimed method of defluorinating phosphate rock" which is a "significant improvement of an earlier commercial process". The products of both processes are used as phosphatic fertilizers and animal feed supplements.

Plaintiff Borden, Inc., (hereinafter referred to as "Borden") is the owner of United States Patent 2,995,437 Hollingsworth, filed 1959, granted 1961 (hereinafter referred to as the '437 patent) which was obtained by its inventor, and Borden's principal trial witness, Clinton A. Hollingsworth. The plaintiff complains of infringement by defendant Occidental Petroleum Corporation and its wholly owned subsidiary/division Occidental Chemical Company (both of which are collectively referred to hereinafter as "Occidental").

The Complaint, filed in 1969, has two counts, one alleging that the operation of defendant's plant at Galena Park, near Houston, Texas, has infringed the '437 patent. The other count alleges that the operation of a plant of defendant then under construction (and since operational) at White Springs, Florida, would infringe the same patent.

Defendant Occidental alleges noninfringement and also contends that the '437 patent is invalid on each of the following separate grounds:

(1) The patented subject matter was described in printed publications, both before the date of the purported invention and more than one year before the application was filed, contrary to 35 U.S.C. §§ 102(a) and (b);

(2) The patented subject matter was known and used by others in this country before the date of the purported invention, contrary to 35 U.S.C. § 102(a);

(3) Products made by the patented process were sold by Borden more than one year prior to the filing of the '437 application on April 23, 1959, contrary to 35 U.S.C. § 102(b);

(4) The applicant did not himself invent the subject matter which was patented, contrary to 35 U.S. C. § 102(f);

(5) The patented subject matter was described in patents granted on applications filed by others in this country before the date of the purported invention, contrary to 35 U.S.C. § 102(e);

(6) The subject matter sought to be patented was obvious at the time the purported invention was made, contrary to 35 U.S.C. § 103;

(7) The claims fail to particularly point out and distinctly claim the purported invention, contrary to 35 U.S.C. § 112; and

(8) The applicant was guilty of unclean hands and practiced fraud on the U.S. Patent Office in its procurement.

As the following Findings of Fact and Conclusions of Law indicate, it is the opinion of this Court that the '437 patent of Borden is invalid and that as a consequence there has been no infringement of that patent by Occidental.

FINDINGS OF FACT

General Background

1. Borden is a corporation organized and existing under the laws of the State of New Jersey, with its principal place of business in New York City, New York, and is the owner of the '437 patent with the right to sue for and obtain injunctive relief and damages for past infringement, if appropriate.

Borden has been involved in the industry of defluorinating phosphate rock for fertilizers and animal feed supplements (hereinafter referred to as the defluor industry) since 1964 when it acquired the Smith-Douglass Company, Inc. (hereinafter referred to as "Smith-Douglass), a Virginia corporation, which operated facilities at Lakeland, Florida. Smith-Douglass entered the defluor industry in 1952 when it acquired Coronet Phosphate Company (hereinafter referred to as "Coronet"), a New York corporation, which also operated the Lakeland facilities.

2. Occidental is a corporation organized and existing under the laws of the State of California with its principal place of business in Los Angeles, California. Occidental Chemical Company is a division of Occidental Petroleum Corporation with its principal place of business in Houston, Texas.

Occidental has two facilities pertinent to this case which were or are involved in the defluor industry. One is located in Galena Park, near Houston, Texas. This facility began operations in the early 1950's as Butler Chemical Company ("Butler"), which merged into Hooker Chemical Corporation ("Hooker") in 1959, and was acquired by Occidental in 1968. This facility was shut down in 1970. Occidental's other facility was constructed at White Springs, Florida, and began operations in 1970.

3. The names of two other companies involved in the defluor industry appear in this litigation. One is International Minerals & Chemical Corporation ("IMC") which began operations in the 1930's and ultimately had several plants in operation. Of concern here are a plant located at Wales, Tennessee, which shut down operations in 1965, and an experimental station located at Mulberry, Florida. The other company is Rocky Mountain Phosphate which was formed in 1959 and was subsequently licensed by plaintiff Borden in 1967 to operate under the '437 patent.

4. Phosphate rock is a naturally-occurring complex substance of which phosphorus, sodium, silica and calcium are the most significant elements insofar as this litigation is concerned. The calcium and phosphorus are valuable in plant food, fertilizers and mineral supplements for livestock and poultry feeds. If properly processed, they may be converted to biological forms which may be easily assimilated. Phosphate rock in its natural state contains approximately 4% fluoride by weight which is toxic to animals, although not to plants.

Some of the minor constituents found in phosphate rock include magnesium, iron and aluminum. In some phosphate rocks, such as those generally located in Tennessee, these minor elements are contained in substantially greater amounts than are found in other phosphate rock sources, such as those in Florida.

5. Throughout this opinion, the various constituents are referred to by their chemical abbreviations. Phosphorus, the chemical symbol for which is "P", is generally referred to as P2O5, the molecular chemical formula for phosphorus pentoxide. The term is generally used in the fertilizer industry to denote the phosphorus content of a material or product. Sodium, the chemical symbol for which is "Na", is generally referred to as Na2O, the molecular chemical formula for sodium oxide. Calcium, the chemical symbol for which is "Ca", is generally referred to by its molecular chemical formula as CaO or calcium oxide, more commonly known as lime. Silica commonly appears as silicon dioxide, the molecular chemical formula of which is SiO2. Magnesium appears as MgO, iron as Fe 2O3, and aluminum as Al2O3.

The above molecular chemical formulas refer to the weight of a molecule of the particular particle, the weight being the sum of the weights of the constituent atoms of the elements involved. This opinion refers to various molecular ratios ("mol ratios") and mol ratio formulas used by various parties in the defluor industry over the years. Mol ratios generally pertain to the molecular weight composition of the final fertilizer or feed supplement product and are used as a means for checking the effectiveness of the defluor processes.

6. One of the principal processes of the defluor industry involves the calcination of the natural rock. Calcination is a process for heating materials to a high temperature, but without substantial fusing or melting of the mixture. Temperatures involved in calcination processes generally were in the 2000-2700° F range.

A principal purpose of calcination is to remove the toxic fluorine from products to be used for animal feed supplements. This is often referred to as defluorination. The defluor industry has established the specification that feed supplements will contain less than 1% fluorine compared to the weight of the phosphorus in the final product; this is commonly expressed as having a phosphorus to fluorine weight ratio greater than 100, or a "P/F greater than 100".

7. Calcination also causes chemical reactions to occur between the components of phosphate rock and the various additives with which it may be mixed prior to being fed into the calcination vessel.

Over the years the feed mixture, often called the feed charge, has included silica, water, phosphoric acid ("H3PO4", commonly identified hereinafter as "P2O5" because of its role in increasing the phosphorus content of the final product), and a soda compound such as sodium hydroxide ("NaOH"), or sodium carbonate ("Na2CO3"). The role of these additives to this litigation is explained in certain of the findings set forth hereafter.

8. Over the years calcination has occurred in various types of equipment. During the 1940's and into the late 1960's, the most common equipment involved rotary kilns. The kiln is a large steel tube several feet in diameter; some described in the record are 8 feet in diameter and 180 feet long. Others are much smaller. The kilns are lined with a refractory brick approximately six inches thick which can withstand the high temperatures involved. The kiln is supported on tires or riding rings so as to allow a rotation speed of several revolutions per minute. Some were operated at 3-4 rpm, although the speed could be varied. The kilns are mounted with one end higher than the other, and in some the mounting angle...