Dow Chemical Co. v. Halliburton Co., Civ. A. No. GC 78-31-WK-P

• Decision Date: 07 June 1985
• Docket Number: GC 78-32-WK-P.,Civ. A. No. GC 78-31-WK-P
• Citation: 631 F. Supp. 666
• Parties: The DOW CHEMICAL COMPANY, Plaintiff, v. HALLIBURTON COMPANY, Defendant. The DOW CHEMICAL COMPANY, Plaintiff, v. MISSISSIPPI POWER & LIGHT COMPANY, Defendant.
• Court: U.S. District Court — Northern District of Mississippi

631 F. Supp. 666

The DOW CHEMICAL COMPANY, Plaintiff, v. HALLIBURTON COMPANY, Defendant.

The DOW CHEMICAL COMPANY, Plaintiff, v. MISSISSIPPI POWER & LIGHT COMPANY, Defendant.

Civ. A. Nos. GC 78-31-WK-P, GC 78-32-WK-P.

United States District Court, N.D. Mississippi, Greenville Division.

June 7, 1985.

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Debernd W. Sandt, Bruce M. Kanuch, The Dow Chemical Co., Midland, Mich., Neal A. Waldrop, Troy, Mich., Hainon A. Miller, Greenville, Miss., for plaintiff.

James E. Cockfield, Lahive & Cockfield, Boston, Mass., Thomas R. Weaver, Halliburton Services, Duncan, Okl., for defendant.

MEMORANDUM OPINION

KEADY, District Judge.

In these consolidated cases, the Dow Chemical Company sues Halliburton Company and Mississippi Power & Light Company for patent infringement. Both defendants deny infringement, asserting that the patents in suit are invalid and unenforceable and they seek a declaratory judgment of noninfringement, invalidity, and unenforceability as to each patent, together with an award of attorney's fees. After lengthy discovery and submission of a pretrial order, the court severed the issues of liability and reserved the question of damages. Following an evidentiary hearing, the court referred the transcript of testimony and exhibits to the United States Magistrate for preliminary review and recommendations. Upon receipt of the Report and Recommendations, both sides filed written objections. Upon careful review of the evidence and the objections taken to the magistrate's report, the court makes findings of fact and conclusions of law required by Fed.R.Civ.P. 52(a) as follows.

FINDINGS OF FACT

I. THE PARTIES

Plaintiff, The Dow Chemical Company (Dow), is a Delaware corporation having its principal office and place of business in Midland, Michigan.

Defendant, Halliburton Company (Halliburton), is a Delaware corporation, duly authorized to do business in Mississippi and having a place of business at Amory, Monroe County, Mississippi.

Defendant, Mississippi Power & Light Company (MP & L), is a Mississippi corporation, duly authorized to do business in Mississippi and having a place of business at Greenville, Washington County, Mississippi, within the Northern District of Mississippi.

Both Dow and Halliburton are regularly engaged in the business of industrial cleaning, among other things.

Mississippi Power & Light Company is an electric power utility corporation regularly engaged in the business of generation, transmission, and distribution of electric power.

II. THE PATENTS AT ISSUE

Dow is the owner of each of the patents in suit, i.e., the Lesinski patent, U.S. Patent 3,308,065 (Lesinski '065 patent), and U.S. Reissue Patent 30,796, the Teumac patent, U.S. Patent 3,413,160 (Teumac '160 patent), and the Harriman et al patent, U.S. Patent 3,438,811 and U.S. Reissue Patent 30,714 (Harriman '811 patent).

The Lesinski patent was issued to Dow on March 7, 1967. It was returned to the Patent and Trademark Office and replaced by Reissue Patent 30,796 on November 7, 1981. The application for reissue was filed September 14, 1978.

The Harriman patent was issued to Dow on April 15, 1969. It was returned to the Patent and Trademark Office and replaced by Reissue Patent 30,714 on August 18, 1981. The application for reissue was filed September 14, 1978.

The Teumac patent was issued to Dow on November 26, 1968.

III. CLAIMS

In GC 78-31-K-P, Dow charges infringement by Halliburton of claim 6 of the original and reissue Lesinski patent, infringement of claim 6 of the Harriman patent, now claim 10 of the Harriman reissue, and infringement of claims 4 and 10 of the Teumac patent, and further alleges that infringement by Halliburton has been willful and deliberate. In GC 78-32-K-P, Dow charges MP & L with infringement of the above-stated claims of two of these patents, i.e., Lesinski and Harriman.

IV. UTILITY BOILER TUBE SCALE BUILDUP AND REMOVAL, AND THE PROCESSES IN ISSUE AND THEIR GENERAL BACKGROUND

A. Steam Boiler Construction, and Tube Scale Formation and Its Effect on Power Generation

A utility power station's steam generating equipment makes steam in large boilers at high pressure to continuously drive turbines which generate electricity. Water circulates through hundreds of vertically extending small diameter steel tubes which form the shell of a large fire box, typically 40 to 50 feet wide and up to 90 feet deep. The tubes rise vertically up to 200 feet to a steam drum 3 to 5 feet in diameter and up to 90 feet long. With continuous use, the tubes develop internal wall scale, which is mostly iron oxide consisting of magnetite, Fe3o4, and hematite, Fe2o3, but which may contain some copper and water hardness deposits, such as calcium or magnesium compounds. These scales undesirably insulate the fire box heat from water inside the tubes. When the scale becomes sufficiently thick, tubes overheat, and will ultimately rupture, due to localized scale buildup and high internal pressure, typically 2,700 lbs. per square inch. A single tube rupture will cause shutdown of the entire boiler for time-consuming mechanical repair. The loss to a utility from boiler shutdown is about $60,000 per day per 100 megawatts of generating capacity. With typical commercial utility boilers of 300 to 1,300 megawatt capacity, the loss can range from $200,000 to $800,000 per day.

B. Scale Removal Methods Prior to the Process In Issue

Utility companies for many years have employed preventive maintenance to remove boiler scale buildup. Prior to World War II, cleaning was done mechanically by drilling scale out of the tubes. This procedure required such a long downtime that chemical cleaning was developed as a replacement.

Dow introduced the first utility boiler tube chemical cleaning method in 1939. This process employed a hydrochloric acid (HCL) solution to dissolve iron oxide scale. For boilers having copper content in the scale, Dow developed and used an ammonium bromate solution to dissolve copper in a second step separate from the iron oxide-dissolving step. These processes were used in the utility industry in this country from the early 1940's through the mid-1950's.

In the 1950's, citric acid was used for cleaning "once-through" boilers with light oxide scale deposits, and at the same time sodium nitrite was introduced for passivating iron surfaces, or rendering the surfaces rust resistant. Problems developed with citric acid precipitates in boilers containing heavy iron oxide scale deposits, and in the late 1950's, cleaning mixtures of citric acid and formic acid were used. In 1961, Dow offered a mixed formic acid-hydroxyacetic acid solution, called the L23 Process.

In the late 1950's, Dow modified its HCL process by adding a copper complexer to enable removal of iron oxide and copper with a single solution. This process became the volume workhorse of the utility boiler chemical cleaning industry. Cleaning solutions consisting of sodium etheylenediamine tetraacetic acid (EDTA) and added chemical reducing agents also were used during this time.

In 1961, Pfizer Corporation introduced a citric acid (CA) solution for dissolving both iron oxide and copper which employed an acid solution of ammoniated citric acid to dissolve iron oxide scale, and a sequential step using an alkaline ammoniated citric acid solution for copper removal; this was called the Citrosolv Process. This process employed an ammoniated chelate as a means of minimizing precipitation of iron compounds or alkaline pH.

C. Dow's Vertan 675 ACR Process

Using the teachings of the Lesinski patent, Dow developed the first aqueous alkaline solution of a single active constituent, ammonium EDTA, to dissolve iron oxide scale from a metal surface, and introduced that process to the utility industry in the United States in late 1961. Dow designated the process "Vertan 675 Process." In 1964, Dow modified its Vertan 675 Process to incorporate the teachings of the Harriman patent to enable removal of copper immediately following the completion of the iron oxide removal stage by oxidizing the single fill of the alkaline ammonium EDTA solution to dissolve copper. Dow designated this process the "Vertan 675 Alkaline Copper Removal (ACR) Process."

Dow's Vertan 675 Process for dissolving iron oxide scale in broad terms, consists of preparing an ammoniated EDTA concentrate of about 38%-39% EDTA at a pH between about 8 to 11, usually about 9, injecting that concentrate into the boiler to be cleaned to form a dilute water solution, raising the temperature of the solution to between 250° to 350° F., and circulating the solution through the boiler for a time sufficient to dissolve the iron oxide scale in the boiler. During the cleaning operation, the concentration of the iron EDTA chelate formed by the dissolving solution and the free EDTA is continuously monitored, and an excess of free EDTA is maintained to assure complete dissolution of the iron oxide. Iron oxide removal is deemed complete when successive chemical analyses show no further EDTA chelate formation. As originally practiced, after dissolving the iron oxide the boiler was drained and rinsed, and a passivated, or rust resistant, surface was obtained.

During late 1962 and 1963, Dow's Industrial Service Division successfully removed iron oxide scales from utility boilers in the United States using Vertan 675, and employed these early jobs to develop acceptable commercial embodiments of the '065 Lesinski process.

In 1963, Dow's Nesbitt conducted the first Vertan 675 boiler cleaning job outside the United States on a Sulzer boiler in Holland to remove iron oxide only; this job was successfully completed. In the Holland job, Nesbitt was assisted by Preston Engle, who was then a Dow employee in the Technical Department in Tulsa. After returning to Dow in the summer of 1963, Engle left Dow and was hired by Halliburton in the early fall of ...