Coal Processing Equipment, Inc. v. Campbell

Decision Date07 August 1981
Docket NumberNo. C-1-78-0161.,C-1-78-0161.
PartiesCOAL PROCESSING EQUIPMENT, INC., Plaintiff, v. Bobby C. CAMPBELL, Defendant.
CourtU.S. District Court — Southern District of Ohio

COPYRIGHT MATERIAL OMITTED

Donald M. Lerner, Cincinnati, Ohio, Harvey B. Jacobson, Jr., Washington, D.C., for plaintiff.

Lawrence A. Johnson, Tulsa, Okl., Frank J. Thermes, Dayton, Ohio, William S. Dorman, Tulsa, Okl., for defendant.

OPINION

DAVID S. PORTER, Senior District Judge:

PROCEDURAL POSTURE

This action concerns United States Patent No. 3,926,787 the "Gay patent", now owned by defendant Bobby C. Campbell. Plaintiff Coal Processing Equipment, Inc. "CPE" filed this action on March 24, 1978, asking in its complaint (doc. 1) for a declaratory judgment that the Gay patent is invalid and uninfringed, for damages on a claim of common law unfair competition, and for attorney fees pursuant to 35 U.S.C. § 285. Along with its complaint CPE filed a petition for a temporary order (doc. 2) enjoining Campbell from interfering with CPE's business activities, and from filing an infringement action based on the Gay patent. A consent order (doc. 3) enjoining Campbell from interfering with CPE's customer relations and from filing a separate infringement action was filed April 7, 1978. On May 4, 1978 Campbell filed an answer denying the substance of CPE's complaint and entered a counterclaim alleging devices manufactured and sold by CPE infringed the Gay patent.

Subject matter jurisdiction for this action is predicated on 28 U.S.C. § 1338(a) and (b). Personal jurisdiction is not contested.

In a pretrial order dated January 17, 1980 (doc. 34) this Court directed that Campbell be given an opportunity to observe a CPE device in operation. In a pretrial order dated December 17, 1980 (doc. 48) this Court severed for later trial the issue of damages arising from any liability determination. The issues of infringement, validity, unfair competition, and attorney fee liability were tried to the Court on January 6, 7, 8, 21, 22, 23, and February 4, 5, 6, 11, 12, 1981. At the conclusion of Campbell's case the Court directed a verdict against him on his infringement allegations as to the last three claims (6, 7, 8) of the Gay patent. At the conclusion of final argument the Court indicated that it would hold that Campbell had not sustained his burden of proof on his infringement allegations as to the first five claims of the Gay patent.

After thorough consideration of the testimony and other evidence adduced at trial, as well as the argument and memoranda of counsel, the Court enters the following findings of fact and conclusions of law.

FINDINGS OF FACT

The Gay patent describes a "method and apparatus for reducing sulphur and ash content of a solid material containing coal ..." (px 1, p. 1). In general, it sets out a means of separating commercially saleable coal from surface mining refuse piles (called "gob" piles) that contain coal and other earthen material. The first step in the process is to crush and screen the gob into particles no larger than 1¼ inches in diameter. The particles are then combined with a high pressure (65 p.s.i.) stream of water in a round tank called a mixing chamber. The mixing of solids and water actually takes place in a hollow cylinder, called a mixing zone, which is described as swinging freely by chains within the mixing chamber. The solids-water mixture is pushed along the bottom of the mixing chamber by a second, low pressure (2 to 5 p.s.i.), stream of water toward an outlet pipe. This second stream of water prevents the buildup of material on the bottom of the mixing chamber. From the mixing chamber outlet pipe the solids-water mixture is pumped into a cyclone separator which has an adjustable vortex finder extending vertically upward out of the cyclone separator and also has, adjacent to its bottom, an outlet made up of three cones of successively decreasing angles—68°, 53°, 7°. The operation of the cyclone separator is such that usable coal along with some water exits through the vortex finder at the top while refuse material and remaining water is then separated from the coal and refuse and recycled (px 1).

The file wrapper of the Gay patent prosecution (px 3) indicates that the application was filed on March 3, 1973 in the name of Larry T. Gay. Of the seven claims tendered in the initial application claims 1 through 6 were rejected (id. at 35). The examiner indicated that claims 1, 3, 4 and 6 were rejected because they were obvious in light of prior art under 35 U.S.C. § 103. For these claims patents identified as Visman I (RE 26,720) (px 3L), which described a cyclone separator, and Eichhorn (2,918,263) (px 3H), which describes a means of mixing solid particles with a high pressure water stream in a hollow cylinder, were specifically cited as prior art references (px 2 at 35). The examiner indicated that claims 2 and 5 were also rejected because they were obvious in light of prior art under 35 U.S.C. § 103. For these claims the Visman I and Eichhorn patents along with a patent described as Visman II (3,487,923) (px 3M), which describes an apparatus for separating mixtures of solid particles and liquid by means of pumping the solids-liquid mixture from a tank into a cyclone separator, were specifically cited as prior art references (px 2 at 35). The examiner further indicated that claims 1 through 6 were also invalid because the application did not adequately specify the manner and process of making and using the invention as required by 35 U.S.C. § 112. The examiner also cited the following patents as pertinent prior art:

                Gaddis         RE 27,681    (px 3P)
                Pardee         1,149,463    (px 3A)
                Krijsman       2,701,641    (px 3D)
                Fontein II     2,819,795    (px 3F)
                French patent    815,247
                

as required by 35 U.S.C. § 112.

Pursuant to a successful petition to revive (px 2 at 55), the application was amended and resubmitted. Claim 6 was deleted, claims 1, 4, 5 and 7 were amended, and two new claims, 8 and 9, were added (id. at 37-43). The remarks accompanying the amendments contested the examiner's determination that independent claims 1 and 4 were obvious in view of the Eichhorn and Visman I patents. Specific elements of the Gay system that were emphasized as distinct from the teachings of Eichhorn and Visman I included: (1) a mixing zone centrally located within a mixing chamber (id. at 45, 47), (2) the step of introducing a high pressure stream of water downwardly and centrally into the mixing zone (id.), (3) a second stream of water into the mixing chamber adjacent to the bottom of the mixing chamber (id.), and (4) a second hydrocyclone cone angle of 53° (id. at 46, 48). These elements were not added by the amendments, but rather were described in the claims presented in the initial application.

The examiner apparently acceded to the representations made in the remarks accompanying the amendments because in passing on the amended application he rejected claims 1 through 5 but noted that they would be allowed with minor amendment (id. at 64-65). The suggested amendments were duly made and the patent was granted on December 16, 1975 (id. at 66-75). In the patent as issued claim 7 in the application, which was allowed initially, was renumbered as claim 6. Claims 8 and 9 in the amended application were renumbered, respectively, as claims 7 and 8. Claims 1, 4, 6, 7 and 8 are independent claims; claims 2, 3, and 5 are dependent claims. All eight claims of the Gay patent are set out in the appendix of this opinion.

The equipment accused of infringing on the Gay patent is the coal washing apparatus manufactured by CPE called the "CPE Hydromatic Modular, Multimedia Coal Washer" (doc. 48, p. 2; px 4). The purpose of the CPE coal washer is essentially the same as that of the Gay system, it separates saleable coal from solid particles containing coal and other earthen material. The first step in the CPE process is to crush the solid material into particles no larger than ¾ of an inch in diameter. The particles are then combined with water and dumped into a water-filled rectangular slurry tank. The solids-water combination that goes into the CPE slurry tank is not under pressure, though it does go in at some velocity and the particles undoubtedly bounce off each other as they fall toward an outlet pipe at the bottom of the tank. There is no device within the CPE slurry tank for the purpose of inducing or maintaining a churning action. Rather, the CPE tank is designed to minimize the agitation of the particles. Also, particles build up on the bottom and along the sides of the CPE tank; this buildup serves the purpose of preventing damage to the tank by the abrasive effect of particles colliding with the tank sides. There is no stream of water at the bottom of the tank pushing the particles toward the outlet pipe. From the outlet pipe the particles, along with some water, are pumped into a set of identical cyclone separators each of which has an adjustable vortex finder extending vertically upward out of the cyclone separator and an outlet adjacent to its bottom made up of three cones of successively decreasing angles—67½°, 37½°, 5-10°. The operation of a CPE cyclone separator is the same as that of the Gay cyclone separator, usable coal along with some water exits through the vortex finder while refuse material and the remaining water exits through the bottom. The refuse is then put into a secondary slurry tank from which it is pumped through another set of cyclone separators for the purpose of separating out more coal. The water is eventually separated from the coal and refuse and recycled (px 4, 35a, 35b).

CPE is an Ohio corporation incorporated in 1973. Its majority stockholder and chief operating officer is Walter T. McCartney. In 1969 McCartney and two friends, James Loughner and Russ Campbell, discussed the possibility of recovering saleable coal from gob piles by using a coal washing process that...

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