GAF Corp. v. Amchem Products, Inc., 76-2302
| Decision Date | 03 May 1977 |
| Docket Number | No. 76-2302,76-2302 |
| Citation | 570 F.2d 457 |
| Parties | GAF CORPORATION, Appellant, v. AMCHEM PRODUCTS, INC. |
| Court | U.S. Court of Appeals — Third Circuit |
K. Robert Conrad, Charles J. Bloom, Katherine K. Dodd, Pepper, Hamilton & Scheetz, Philadelphia, Pa., for GAF Corporation, appellant; Walter C. Kehm, GAF Corp., Wayne, N. J., Robert E. Kosinski, Watson, Leavenworth, Kelton & Taggart, New York City, Alan H. Bernstein, Stanley H. Cohen, Caesar, Rivise, Bernstein & Cohen, Philadelphia, Pa., William D. Breneman, Washington, D. C., Ernest G. Szoke, Amchem Products, Inc., Ambler, Pa., of counsel.
Carl G. Love, Cushman, Darby & Cushman, Jack L. Lahr, Arent, Fox, Kintner, Plotkin & Kahn, Washington, D. C., for appellee.
Before GIBBONS and HUNTER, Circuit Judges, and LAYTON, ** District Judge.
Plaintiff GAF Corporation, a Delaware corporation (GAF), appeals from the grant of summary judgment in favor of Amchem Products, Inc., a Pennsylvania corporation (Amchem). In this diversity action GAF seeks to have a constructive trust declared in its favor over certain foreign patents controlled by Amchem relating to a plant growth regulating acid called 2-chloroethyl phosphonic acid. The theory on which GAF claims that the foreign patents rightfully belong to it is that a GAF employee, Dr. David T. Randall, made the discovery that 2-chloroethyl phosphonic acid would regulate plant growth and disclosed the invention to employees of Amchem. Amchem filed a patent application covering use of the acid and related compounds as plant growth regulators in February, 1967. 1 The foreign patents here in issue are derivative of the American filing. The district court did not determine whether Dr. Randall was the inventor. Rather, the court held that, assuming he was the inventor, GAF was barred by estoppel and laches from seeking the imposition of a constructive trust on the invention in the hands of Amchem. 2 We conclude that there were disputes as to material facts and that these defenses could not be decided on a motion for summary judgment.
The facts, for purposes of summary judgment, are summarized below. GAF is a manufacturer of chemical compounds for use in industry and agriculture. Many of the compounds it markets result from its own research and development efforts. To test agricultural chemicals, nursery and greenhouse facilities are needed. GAF has customarily engaged outside companies having facilities for such testing, among them Amchem. Dr. Anson R. Cooke, Amchem's director of biological research, participated in screening agricultural chemicals for GAF and in preparing reports to GAF of the results.
On March 3, 1965, GAF gave a number of chemicals to Amchem for testing, including 2-chloroethyl phosphonic acid and an ester of that acid. On January 4, 1966, Dr. Cooke informed GAF personnel, including Dr. Randall, that the ester of the acid had shown the remarkable growth regulating property of controlling apical dominance in plants. Apical dominance is the characteristic of some plants to produce a single terminal bud which grows to maturity, inhibiting the growth of other buds and thereby limiting crop yields. A compound which would control apical dominance could dramatically increase such yields.
In the months following the January 4, 1966, meeting Dr. Randall analyzed the chemical structure of the ester compound. He became convinced that it was the acid rather than the ester (a combination of alcohol and acid) which was responsible for the control of apical dominance. Dr. Randall discussed this theory with Dr. Cooke, who rejected it because a sample of the acid had been tested as a plant growth regulator and found to be inactive. Dr. Randall, however, reasoned that the original acid sample might have been impure. When his tests confirmed such impurity, he synthesized a second acid sample and on March 6, 1966, delivered it to Amchem for testing. Amchem tested the second sample and on May 25, 1966, reported to GAF that the second acid sample regulated plant growth in a manner equal to the ester. This was significant, since the acid was less costly than the ester.
By September, 1966, Amchem decided to commercialize the acid. To do so it needed to neutralize the corrosive effect of the acid on spraying tanks and equipment. In attempting neutralization, however, Amchem found that a gas evolved which caused the entire mixture to bubble over. Dr. Cooke asked Dr. Randall to find a solution. In November, 1966, Dr. Randall identified the gas being released as ethylene gas. It was already known that ethylene gas possessed plant growth regulative properties. Dr. Randall concluded that the plant growth regulating properties of the acid could be explained because the acid caused the release of ethylene gas. He so informed Dr. Leon Katz, Vice President for Research and Development for GAF, who in turn informed Amchem. Both companies appreciated the significance of the discovery that the acid was an ethylene releasing agent, and both recognized that patent protection should be obtained for it and its related compounds.
Looking at the record evidence in the light most favorable to GAF, as on Amchem's motion for summary judgment we must, we note that Dr. Randall discovered between January and March of 1966 that the acid, not the ester, was the regulator, and so informed Dr. Cooke. It appears that in the fall of 1966 Dr. Randall discovered that the acid was an ethylene releasing agent and that Dr. Katz so informed Amchem. Thus it would appear that prior to February 23, 1967, when Amchem filed a United States patent application covering the use of the acid as a plant growth regulator, it had information that Dr. Randall had made the two critical discoveries as to such use.
In March of 1966, as a result of the initial interest shown in the ester, the GAF patent department researched the relevant patent law to determine who could file patent applications. They advised the GAF chemists that patent protection could be obtained for novel chemicals, for novel manufacturing processes to produce new or old chemicals, and for novel uses for known chemicals. They advised that, while GAF would normally file applications for new chemicals and new manufacturing processes, new uses ordinarily would be discovered,...
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