Carter-Wallace, Inc. v. Riverton Laboratories, Inc.

• Decision Date: 09 November 1970
• Docket Number: No. 43,Docket 34718.,43
• Citation: Carter-Wallace, Inc. v. Riverton Laboratories, Inc., 433 F.2d 1034, 167 USPQ 656 (2nd Cir. 1970)
• Parties: CARTER-WALLACE, INC., Appellee, v. RIVERTON LABORATORIES, INC., Appellant.
• Court: U.S. Court of Appeals — Second Circuit

167 USPQ 656, 433 F.2d 1034 (1970)

CARTER-WALLACE, INC., Appellee, v. RIVERTON LABORATORIES, INC., Appellant.

No. 43, Docket 34718.

United States Court of Appeals, Second Circuit.

Argued September 22, 1970.

Decided November 9, 1970.

Zachary T. Wobensmith, 2nd, Philadelphia, Pa. (Louis C. Jones, Jones, Jenkins & Warden, Brooklyn, N. Y., and Zachary T. Wobensmith, 3rd, Philadelphia, Pa., on the brief), for appellant.

William D. Denson, New York City (Morgan, Finnegan, Durham & Pine, George B. Finnegan, Jr., and John D. Foley, New York City, on the brief), for appellee.

Before ANDERSON and FEINBERG, Circuit Judges, and WEINFELD, District Judge.^*

ANDERSON, Circuit Judge:

This is an appeal from the district court's determination that the patent of the appellee, Carter-Wallace, Inc., for a certain pharmaceutical compound, generically known as meprobamate, was valid, and, as the appellant, Riverton Laboratories, Inc., had conceded infringement, that Carter-Wallace was entitled to injective relief, an accounting and damages.¹ We affirm.

United States Letters Patent No. 2,724,720 was issued on November 22, 1955 to Carter Products, Inc., predecessor of Carter-Wallace, Inc., upon the application of Dr. Frank M. Berger and Dr. Bernard J. Ludwig. The patent covers three organic compounds in the class of 2, 2-disubstituted-1, 3-propanediol dicarbamates, one of which is the compound "2-methyl-2-n-propyl-1, 3-propanediol dicarbamate," generically known as meprobamate and marketed under certain trade names, of which "Miltown" and "Equanil" are the most common. Riverton Laboratories produced and sold meprobamate under its generic name and argued that Carter-Wallace's patent encompassing meprobamate was invalid. The parties are in substantial agreement as to most of the relevant facts and dispute only the effect to be given them.

In 1949 Dr. Berger joined Carter-Wallace as director of research and began experimenting to find a compound that would have properties similar to but with a longer duration than a chemical compound, which he had discovered in 1947, known as mephenesin and used both as a tranquilizer and for the treatment of muscle spasms. Dr. Berger believed that if such a drug could be found it could have therapeutic value. In 1950 Dr. Berger's colleague, Dr. Ludwig, synthesized meprobamate; and on July 29, 1950, Drs. Berger and Ludwig filed an application for a patent on the compounds, asserting that the compounds possessed "marked anticonvulsant properties * * * possessing an action of considerable duration and intensity."

The application was rejected on February 9, 1951, on the ground, inter alia, that the discovery did not involve "invention" over a compound described in a prior patent. After an amendment and argument were filed on July 25, 1951 the application was again rejected on January 11, 1952, but Dr. Berger filed an affidavit on July 9, 1952 in support of a request for reconsideration in which he described tests conducted on mice to determine the anticonvulsant properties possessed by the compounds.² He concluded that the results conclusively demonstrated that "many of the carbamates are distinctly better than their parent compounds * * * *" On March 12, 1953 the application was again rejected by the Patent Office because the Examiner still entertained doubts that the compounds involved invention.

On August 3, 1953 Drs. Berger and Ludwig filed a second patent application on the same chemical compounds as a continuation in part of the first application. In the specifications to the application Drs. Berger and Ludwig claimed that all three compounds possessed a marked anti-convulsant property of considerable duration and that one of the compounds, meprobamate, possessed a marked paralyzing action. The claim of anticonvulsant properties was supported by reference to tests conducted on mice and the claim of a paralyzing action by reference to pharmacological studies on unnamed animals, and the results of these tests showed that the paralyzing capability of meprobamate was superior to that of mephenesin. The patent was finally granted on November 22, 1955 after the Patent Office was satisfied that the claims in the Berger-Ludwig application did show "invention."³

During the period of time that the patent application was making its way through Patent Office procedures, meprobamate and the related compounds were tested on humans, and on December 9, 1954, Dr. Berger submitted a New Drug Application to the Food and Drug Administration (FDA), which was granted on April 28, 1955. The first sale of meprobamate was made on May 9, 1955, some two and one-half months prior to Carter-Wallace's receipt of the patent.

The New Drug application disclosed that in 1951 tests of meprobamate were conducted on mice, dogs, rabbits and cats and that beginning in May 1952, clinical tests on humans were conducted. The tests on animals apparently followed a routine method of evaluating new chemical compounds for potential use. The district court fully described the procedures in its opinion and it is unnecessary to repeat that description, except to state that the basic purposes of the tests are to determine the effective dose and the lethal dose of the chemical compound. Once these dosages are determined, tests on humans may begin. These are conducted in three stages with three different objectives: the first is to determine lack of toxicity, tolerance and safety; the second is to establish clinical effectiveness through repeated usage; and the third is to determine the addictive qualities of the drug. The only factual issue challenged on appeal relates to the stage at which the clinical tests had arrived by August 3, 1953, the date on which the applicants filed the continuation in part application. Although the appellant claims that the tests had reached stage two or stage three by January, 1953, the trial court found that at the time of the filing of the continuation in part application, clinical tests had reached only stage one. Substantial evidence exists to support this finding, and there is no reason for this court to disturb it.

Riverton Laboratories makes a three pronged attack on the judgment below: (1) that the patent applications failed to disclose sufficient utility to satisfy the statutory requirement of utility, 35 U. S.C. § 101, as interpreted by the Supreme Court in Brenner v. Manson, 383 U.S. 519, 86 S.Ct. 1033, 16 L.Ed.2d 69 (1966); (2) that by failing to disclose to the Patent Office that the patentees intended the drug primarily for the treatment of humans and that clinical tests had been and were being conducted on humans, the patentees did not comply with the statutory requirement that the patentees disclose the best mode contemplated by the inventor for carrying out his invention, 35 U.S.C. § 112; and (3) that by failing to disclose to the Patent Office that the patentees intended that the drug be used primarily for the treatment of humans and that clinical tests on humans had been and were being conducted, the patentees committed a fraud on the Patent Office. For these reasons, the appellant claims that Carter-Wallace forfeited its right to the protection of the patent laws and urges that the judgment below be reversed.

What are now presented as three distinct claims have developed through gradual distillation from Riverton Laboratories' single, broadly stated defense, in the trial court, of fraud by Carter-Wallace on the Patent Office. The discussion of the issues should, therefore, begin with the broader issues of fraud and disclosure of the best mode, and conclude with the utility requirements as expounded in Manson.

Although at the trial, Riverton Laboratories based its claims of fraud on a number of grounds, including Carter-Wallace's alleged false representations as to the beneficial effects of meprobamate, on appeal Riverton Laboratories' claims rest solely on Carter-Wallace's failure to reveal to the Patent Office the results of its tests on humans.

Fraud in the procurement of a patent is a defense to an action for infringement. Walker Process Equipment, Inc. v. Food Machinery & Chemical Corp., 382 U.S. 172, 86 S.Ct. 347, 15 L.Ed.2d 247 (1965); Precision Instrument Manufacturing Co. v. Automotive Maintenance Machinery Co., 324 U.S. 806, 65 S.Ct. 993, 89 L.Ed. 1381 (1945). While this concept of fraud clearly encompasses making a false representation of fact in the application or supporting affidavits (Id.), there is little or no substantiation in the present case for the charge that the patentees made misrepresentations to the Patent Office. The court below specifically found that all representations made by the patentees were made in good faith with no intent to deceive, and the appellant does not seriously challenge this finding. Appellant argues, however, that the defense of fraud also encompasses instances in which the inventor has failed to disclose information which he was under an obligation to reveal, such as the results of Carter-Wallace's clinical tests on humans or similar matters "grounded on the confidential relation of the inventor with the Patent Office and in the statutory obligation to `set forth the best mode contemplated by the inventor of carrying out his invention.'"

While appellant's arguments might possess merit in a case where the inventor has concealed the results of tests on humans when the Patent Office has specifically requested test material to support the claims made in the application, that is not true of the present case. Under present practice, submission of test information to the Patent Office in support of the claims made in an application is not required, unless the asserted utility of a compound is not believable on its face to persons skilled in the art in view of the contemporary knowledge in the art.⁴ There is nothing to indicate that this present practice represents a departure from the prior mode of procedure, and since no request was made...