Crucible, Inc. v. STORA KOPPARBERGS

• Decision Date: 19 September 1984
• Docket Number: Civ. A. No. 74-917,74-1062.
• Parties: CRUCIBLE, INC., a Delaware corporation, Plaintiff, v. STORA KOPPARBERGS BERGSLAGS AB, a Swedish corporation, and Uddeholms AB, a Swedish corporation, Defendants. STORA KOPPARBERG CORPORATION, a New York corporation, and Uddeholm Steel Corporation, a New York corporation, Plaintiffs, v. CRUCIBLE, INC. a Delaware corporation, Defendant.
• Court: U.S. District Court — Eastern District of Pennsylvania

594 F. Supp. 1249

CRUCIBLE, INC., a Delaware corporation, Plaintiff, v. STORA KOPPARBERGS BERGSLAGS AB, a Swedish corporation, and Uddeholms AB, a Swedish corporation, Defendants.

STORA KOPPARBERG CORPORATION, a New York corporation, and Uddeholm Steel Corporation, a New York corporation, Plaintiffs, v. CRUCIBLE, INC. a Delaware corporation, Defendant.

Civ. A. Nos. 74-917, 74-1062.

United States District Court, W.D. Pennsylvania.

September 19, 1984.

Ford F. Farabow, Jr., Laurence R. Hefter, Michael C. Elmer, Allen M. Sokal, Finnegan, Henderson, Farabow, Garret & Dunner, Washington, D.C., Frederick J. Francis, Meyer, Unkovic & Scott, Pittsburgh, Pa., for plaintiff Crucible, Inc.

Stuart A. White, Crutis, Morris & Safford, New York City, John M. Webb, Webb, Burden, Robinson & Webb, Paul J. Leventon, Leventon & Leventon, Pittsburgh, Pa., for defendants.

OPINION

DIAMOND, District Judge.

In these consolidated suits, plaintiff Crucible, Inc. (hereafter "plaintiff" or "Crucible") seeks to enforce claim 30 of U.S. Patent No. 3,746,518 (hereafter sometimes "the Holtz patent") and claim 4 of U.S. Patent No. 3,561,934 (hereafter sometimes "the Steven patent") against a group of corporately related defendants, Stora Kopparberg Corporation, Uddeholm Steel Corporation, Stora Kopparbergs Bergslags AB and Uddeholms AB (hereafter collectively referred to as "defendants" or "Stora/Uddeholm" or "Stora"). Crucible seeks an injunction against sales of Stora/Uddeholm's infringing products (hereafter "ASP" products) and a determination of willful and intentional infringement. Related antitrust and damage issues have been severed for a later trial.

The Holtz and Steven patents protect powder metallurgy cutting tool products. Crucible contends that Holtz represents a powder metallurgy cutting tool breakthrough because Holtz allegedly achieved both full density and a superior microstructure including a uniform distribution of ultrafine carbides less than 3 microns in size, which combination plaintiff alleges had eluded all prior art investigators. Steven teaches a so-called hob having superior size change uniformity, a long-standing problem in the hob industry, according to the plaintiff.

There are four general issues that must be decided with respect to Holtz claim 30:

1. Is it valid?

2. Is it infringed?

3. Is its infringement willful and intentional?

4. Was fraud committed during prosecution of the Holtz patent?

The defendants contend that the specific issues, which they refer to as the "four dominant issues," are:

1) Is claim 30 restricted to cutting tools?

2) Is 3 microns a critical carbide size?

3) Are ASP powders a supersaturated solid solution?

4) Is HIPing equivalent to hot-working?

With respect to validity, this litigation was stayed for almost six years so that the United States Patent and Trademark Office (hereafter sometimes "PTO") could rule on virtually the same validity issues in connection with a subsequent related Holtz application, which was contested by Stora/Uddeholm in inter partes proceedings before the PTO. At trial, Stora/Uddeholm agreed that the PTO Board of Appeals decision on patentability should be accorded "great weight." Agreed Finding 9. In addition, our ruling on the fraud issue has been delayed pending a decision of the PTO Board of Appeals, where the parties to the case sub judice litigated, inter alia, the issue of fraud or gross negligence in the prosecution of the Holtz patent. The PTO Board of Appeals rendered its decision on April 25, 1984, finding insufficient evidence of fraud or of culpability under 37 C.F.R. 1.56 (1983). Ex Parte Frederick C. Holtz, Jr., Appeal No. 551-61 (PTO Board of Appeals, April 25, 1984).

The only issue with respect to Steven claim 4 is its validity, because all other issues, including infringement, have been admitted by defendants.¹

For the reasons set forth below, the court concludes that both patents are valid and have been infringed by defendants.^1A

I.

Holtz Patent

Claim 30 of the Holtz patent states:

A consolidated integral alloy body which is substantially fully dense formed of a hot worked supersaturated solid solution of an inherently alloying composition said alloy body consisting essentially of a continuous metallurgical phase with a uniformly disbursed hard phase of minute dispersed hard phase particle sizes that are substantially entirely less than three microns in maximum dimension said alloying composition consisting essentially by weight from about .5% to about 5% carbon at least 10% of a hard phased forming element selected from the group consisting of Cr, W, Mo, Ti, Ta, Cb, Zr, Hf, V, and Al, and mixtures thereof, and the remainder base metal and incidental impurities, wherein said base metal is selected from the group consisting of cobalt, iron and nickel, and wherein the total amount of base metal is at least 30%.

Plaintiff contends that Mr. Holtz by virtue of this claim had invented a revolutionary process of producing cutting tool steel in that through this process he was able to achieve an alloy which had full density and fine carbide size, the combination of which substantially improved the overall toughness, hardness, fabricability, grindability and wear resistance of high-speed cutting tools made from that alloy.

The defendants attack the Holtz invention on several grounds. First, the defendants claim that the Holtz invention is unpatentable for the reason that it was anticipated by an article entitled "Progress Report on Hot Forging Pre-Alloyed Metal Powders" published in 1952 in the publication Precision Metal Molding, Vol. 10, Nov. 10, 1952, by Lawrence Mott ("Mott") and by the Reen I invention, U.S. Patent No. 3,150,444, issued September 29, 1964. Second, that the claim description in claim 30 is invalid under 35 U.S.C. § 112 (1982) and cannot be restrictively interpreted to be limited to cutting tools. Third, the defendants contend that the Holtz patent was obvious in light of the prior art and, therefore, invalid under 35 U.S.C. § 103 (1982). Finally, the defendants contend that the Holtz invention is invalid because it constitutes double patenting. With respect to infringement, defendants have stipulated, with two exceptions, to infringement of the elements of Holtz claim 30 by their ASPsteel products, contesting only that their products are formed by hot working and from a supersaturated solid solution.²

A.

Validity

Presumption of Validity

Under 35 U.S.C. § 282 (1982), a patent is afforded a presumption of validity. Trio Process Corp. v. L. Goldstein's Sons, Inc., 461 F.2d 66, 70 (3d Cir.), cert. denied 409 U.S. 997, 93 S.Ct. 319, 34 L.Ed.2d 262 (1972), cert. denied 449 U.S. 827, 101 S.Ct. 91, 66 L.Ed.2d 30 (1980); L.D. Schreiber Cheese Company v. Clearfield Cheese Company, 540 F.Supp. 1128, 1134 (W.D.Pa. 1982), aff'd 716 F.2d 891 (3d Cir.1983). One who challenges validity has the burden of proving invalidity by a standard of clear and convincing proof. Id.; Northern Engineering and Plastics Corp. v. Eddy, 652 F.2d 333 (3d Cir.1981), cert. denied 454 U.S. 1146, 102 S.Ct. 1009, 71 L.Ed.2d 299 (1982); Universal Athletic Sales Co. v. American Gym, Recreational and Athletic Co., 546 F.2d 530 (3d Cir.1976), cert. denied 430 U.S. 984, 97 S.Ct. 1681, 52 L.Ed.2d 378 (1977).

The plaintiff here contends that the statutory presumption of validity is strengthened where the Patent Office specifically has considered the prior art relied upon by the party challenging the patentability in a court action, Universal, 546 F.2d at 540 n. 28; where it cannot be demonstrated that any uncited prior art was more pertinent than that cited by the patent examiner, General Battery Corp. v. Gould, Inc., 545 F.Supp. 731, 740 (D.Del.1982); see also Otto v. Koppers Company, 246 F.2d 789 (4th Cir.1957), cert. denied 355 U.S. 939, 78 S.Ct. 427, 2 L.Ed.2d 420 (1958); where the party who challenges validity participated fully in an inter partes proceeding before the PTO and raised virtually the same contentions and prior art before the PTO that the party asserts in the court proceedings; and where the patent claims have been reviewed and affirmed by the PTO Board of Appeals. CMI Corp. v. Metropolitan Enterprises, Inc., 534 F.2d 874, 880 (10th Cir.1976).

However, as defendants correctly note, the statutory presumption of validity attaching to an issued patent may be weakened where it can be shown to the court that relevant prior art was not examined by the PTO. Allegheny Drop Forge Company v. Portec, Inc., 541 F.2d 383, 384 n. 3 (3d Cir.1976); Black & Decker Manufacturing Company v. Disston, Inc., 436 F.Supp. 1175, 1179 (W.D.Pa.1977); Schreiber Cheese, 540 F.Supp. at 1134. This weakening of the statutory presumption of validity may be ameliorated where the prior art which was omitted is not as relevant or pertinent as that which was examined by the PTO and where it is clear that the PTO was aware of the alleged omission of the prior art. See generally Aluminum Co. of America v. Amerola Products Corp., 552 F.2d 1020, 1024-5 (3d Cir.1977).

The proceedings in the PTO pertaining to this case were long and tortuous. The Holtz patent application was filed on February 26, 1965, and was issued on July 17, 1973. During the course of this litigation, plaintiff alerted defendants to a pending patent application for a continuation on the Holtz invention (the Holtz grandchild application) and invited defendants to participate in an inter partes PTO proceeding to contest the issuance of the continuation patent. The defendants filed a protest against the continuation grandchild application on December 1, 1976, and since that time have participated fully and completely in PTO protest proceedings.³

The Holtz grandchild patent application was originally rejected by a patent examiner. On August 6, 1981, a panel of the PTO Board of Appeals reversed that ruling and ruled that the patent application was valid and that the patent should be issued. Subsequently, a...