Eltech Systems Corp. v. PPG Industries, Inc.
| Decision Date | 10 May 1990 |
| Docket Number | No. 89-1681,89-1681 |
| Citation | 903 F.2d 805,14 USPQ2d 1965 |
| Parties | ELTECH SYSTEMS CORPORATION and Oxytech Systems, Inc., Plaintiffs-Appellants, v. PPG INDUSTRIES, INC., Defendant-Appellee. |
| Court | U.S. Court of Appeals — Federal Circuit |
Robert L. Beachtold, Fitzpatrick, Cella, Harper & Scinto, of New York City, argued for plaintiffs-appellants. With him on the brief were John A. O'Brien, Robert H. Fischer, Bruce C. Haas and Charles W. Almer, New York City. Also on the brief were John D. Foley, Israel Blum, David M. Carter and Peter DeLuca, Morgan & Finnegan, of New York City.
Edward M. O'Toole, Marshall, O'Toole, Gerstein, Murray & Bicknall, of Chicago, Ill., argued for defendant-appellee. With him on the brief was Christine A. Dudzik, Chicago, Ill. Also on the brief was Mark Levin, PPG Industries, Inc., Pittsburgh, Pa., of counsel.
Before MARKEY, Chief Judge, MAYER, Circuit Judge, and KELLEHER, District Judge. *
Eltech Systems Corp. and OxyTech Systems, Inc. (collectively OxyTech) appeal from that part of a judgment of the United States District Court for the Western District of Louisiana (Veron, J.), Eltech Systems Corp. v. PPG Industries, Inc., 710 F.Supp. 622, 11 USPQ2d 1174 (W.D.La.1988), in favor of PPG Industries, Inc. (PPG) based on a finding that Claims 6 and 9 of United States Patent No. 4,489,025 ('025) are not infringed. OxyTech further challenges the award of attorney fees to PPG. We affirm the judgment and the award, and we award to PPG its attorney fees and double the costs it incurred in connection with this appeal.
A. The Patents and Accused Devices
On June 4, 1985, OxyTech sued PPG for infringement of claims 1-4, 10-11, 13-14, 18, 20, 22 of United States Patent No. 4,410,411 ('411) and claims 6 and 9 of the '025 patent. Both patents are directed to methods for preparing dimensionally stable asbestos diaphragms used in chlor-alkali cells in which chlorine and sodium hydroxide are produced by the electrolysis of salt solution (brine). Diaphragm technology and the chlor-alkali cell process were described by the district court in its comprehensive, thorough, and detailed opinion, 710 F.Supp. 622, 11 USPQ2d 1174, and need not be again described here.
OxyTech appeals from only the part of the judgment that rests on the finding that claims 6 and 9 of the '025 patent are not infringed. 1 Claim 6 of the '025 patent reads:
In a method of preparing an asbestos diaphragm containing a thermoplastic resin which method comprises forming a fibrous asbestos mat having the resin therein and thereafter heating the mat to melt said resin, the improvement wherein the method comprises depositing said asbestos diaphragm from an aqueous slurry consisting essentially of (1) water, brine or cell liquor or mixture thereof and (2) from about 5 to 30 grams per liter of total asbestos and resin, wherein the resin is about 1.0-70% by weight, of the total asbestos and resin and wherein the resin is selected from the group consisting of:
A. hydrocarbon resins;
B. halocarbon homopolymers containing chlorine, fluorine or their mixtures; and C. copolymers having hydrocarbon and halocarbon moieties wherein the halocarbon moieties contain fluorine, chlorine or their mixtures
(emphasis added). 2
PPG's original process (high bake method) included heating to 512?F its diaphragms containing the polymer, Halar TM. During settlement negotiations, PPG informed OxyTech that it had changed to a low bake method, heating the diaphragms to only 425?F, or almost 40? below Halar's TM published melting point of 464?F. PPG gave OxyTech a complete description and a demonstration of its low bake method. On November 24, 1987, all issues relating to the high bake method were settled, and on January 12, 1988, OxyTech filed an amended complaint asserting infringement of both patents by PPG's low bake method. The district court found neither patent infringed and, having found OxyTech's case so meritless as to be exceptional, awarded PPG its attorney fees.
We repeat here the highlights of the district court's opinion only to make more plain the meritless and thus frivolous nature of OxyTech's attack on the judgment.
At trial, Oxytech sought to prove infringement of claim 6 by showing that PPG so heated its diaphragms as to "melt" the Halar TM polymer. In light of the prosecution history of both patents, OxyTech's answers to interrogatories, and the testimony of Fenn (coinventor of the inventions claimed in both patents), the court interpreted "melt" as corresponding to "allow the polymer to fuse and flow," and as meaning a change in phase from solid to liquid form which allows the polymer to discontinuously coat adjacent asbestos fibers with a fused polymer layer and thus achieve dimensional stability obtained by binding the asbestos fibers. The court noted that OxyTech was precluded (by arguments it made in the Patent and Trademark Office to distinguish prior art) from asserting that "melt" is met by "mere adherence" of Halar TM particles to asbestos fibers.
The district court based its finding of noninfringement on the total lack of evidence that Halar TM melted as required by the claim during PPG's low bake method. The court rejected OxyTech's differential scanning calorimetry 3 (DSC) evidence because: (1) it indicated no physical evidence of melting; (2) it did not indicate the temperature at which Halar's TM amorphous portion 4 melted; (3) it conflicted with the DSC evidence of Allied Chemical, Halar's TM manufacturer; and (4) if an internal structural change starts below 425?F, that change would not meet the "melt" limitation as it must be interpreted. It rejected OxyTech's melt tests (heating Halar TM powder alone in aluminum dishes) because: (1) pressure was applied to the samples, a step expressly precluded by the '411 claims; (2) the tests did not follow PPG's baking cycle; and (3) the 425?F sample was effortlessly reduced to powder between the fingers. It rejected OxyTech's swell tests 5 (intended to show dimensional stability and fiber binding) because: (1) OxyTech's diaphragms were not prepared according to PPG's bake cycle; (2) no measurements of the diaphragm widths were made from which accurate percent swelling could be calculated; and (3) no swell tests (or any other tests) were conducted under operating cell conditions. 6
Having found OxyTech's other evidence equally unpersuasive, the court remarked that OxyTech had never tested physical samples from PPG's actual commercial diaphragms, had employed no means for determining "whether Halar TM particles in PPG's actual commercial diaphragms were melted or fused," and had performed no tests under operating cell conditions.
Because OxyTech had woefully failed to carry its burden of proving infringement, the court could have stopped there. In a step helpful on review, however, the court went on to note that it found the testimony of PPG's experts to be "more credible, competent, and convincing;" that PPG's evidence showed that its Halar TM 5004 powder did not melt or fuse at 425?F; that PPG's scanning electron microscopy 7 (SEM) test established that after heating to 425?F, the particles showed no change in physical shape or surface morphology when magnified 5000 times; that PPG's melt test employing its bake cycle resulted in no melting or softening and allowed the Halar TM particles to retain their powdery form; and that caustic reaction, not Halar TM, cemented the asbestos fibers of PPG's diaphragms. 8
The district court found the case exceptional pursuant to 35 U.S.C. Sec. 285 and awarded attorney fees because the amended complaint asserting infringement by PPG's low bake method was meritless as filed and maintained. The court based that ultimate finding on numerous subsidiary findings: (1) OxyTech's expert Dr. Fenn performed no tests, yet concluded that PPG infringed; (2) before May, 1988, all tests were done with a grade of Halar TM not used by PPG; (3) OxyTech did not even attempt to reproduce PPG's procedures, or to evaluate diaphragms produced according to those procedures, or to evaluate diaphragms supplied by PPG, or to evaluate any diaphragms at all under operating cell conditions; (4) OxyTech performed no tests showing sufficient adherence to cause dimensional stability; (5) Dr. Fenn's written report of his evaluation addressed to an OxyTech board member and provided to OxyTech counsel was withheld as privileged and not produced during discovery nor offered into evidence at trial, supporting an inference that it was not favorable to OxyTech; and (6) OxyTech's attempt to excuse its conduct on the basis that it was acting on oral advice of counsel while revealing no technical or legal basis for such advice, was inadequate.
1. Did the district court clearly err in finding noninfringement?
2. Did the district court clearly err in finding the case exceptional on the basis of meritlessness?
OxyTech meretriciously asserts that the district court erred in interpreting "melt" as a claim limitation to visible liquification. It does so by focusing on a phrase the court used in discussing one piece of evidence. A plain reading of the court's opinion unequivocally reveals that the court did not do what OxyTech says it did. On the contrary, it interpreted "melt" as described above: a change in phase from solid to liquid form which allows the Halar TM (or other thermoplastic polymer) particles to flow out to discontinuously coat adjacent asbestos fibers with a fused polymer layer. Equally disingenuous is OxyTech's assertion that error occurred in interpreting "melt" as including the achievement of dimensional stability by binding the asbestos fibers as described in the specification of the '411 patent.
OxyTech's assertions respecting claim interpretation on this appeal are at best difficult to...
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