GAF Corp. v. Amchem Products, Inc.

• Decision Date: 13 May 1981
• Docket Number: Civ. A. No. 72-1994,75-1730.
• Citation: 514 F. Supp. 943
• Parties: GAF CORPORATION v. AMCHEM PRODUCTS, INC. GAF CORPORATION v. AMCHEM PRODUCTS, INC., Anson R. Cooke, Wilbur F. Evans and Charles D. Fritz.
• Court: U.S. District Court — Eastern District of Pennsylvania

514 F. Supp. 943

GAF CORPORATION v. AMCHEM PRODUCTS, INC.

GAF CORPORATION v. AMCHEM PRODUCTS, INC., Anson R. Cooke, Wilbur F. Evans and Charles D. Fritz.

Civ. A. Nos. 72-1994, 75-1730.

United States District Court, E. D. Pennsylvania.

May 13, 1981.

K. Robert Conrad, Pepper, Hamilton & Scheetz, Philadelphia, Pa., for plaintiff.

C. Frederick Leydig, Leydig, Voit, Osann, Mayer & Holt, Chicago, Ill., for defendants.

SUR PLEADINGS AND PROOF

LUONGO, District Judge.

This action consists of two complaints, one filed in 1972, and the other filed in 1975. A common issue in both is inventorship of the use of the chemical 2-chloroethylphosphonic acid as a plant growth regulator. Defendant, Amchem Products, Inc. (Amchem), is the current holder of numerous foreign and domestic patents stemming from the invention. Plaintiff, GAF Corporation (GAF), seeks, inter alia, in the 1972 action, 399 F.Supp. 647 (E.D.Pa.1975), reversed and remanded 570 F.2d 457 (3 Cir. 1978), to have Amchem declared a constructive trustee of all rights to foreign patents stemming from the invention. It claims that its employee, Dr. David I. Randall, invented the use of 2-chloroethylphosphonic acid as a plant growth regulator in 1966 and that Amchem misappropriated the invention through breach of a confidential relationship between the parties and derived its patent position from Dr. Randall's conceptions.

In 1975, GAF filed another suit, naming individual defendants in addition to Amchem. The 1975 suit, in part, requests similar relief in relation to United States Patent No. 3,879,188 (the '188 Patent). It also seeks a declaratory judgment of the invalidity of the '188 patent and states a claim under the antitrust laws. The 1975 action is affected by this trial only to the extent that GAF's claims in that action are predicated on its claim that Dr. Randall invented the plant growth regulating use of the acid.

Pursuant to my pretrial order dated April 17, 1979, the trial of this action is to be conducted in two phases: (1) the liability phase, in which will be determined the issues of (a) Dr. Randall's alleged discovery or inventorship of the plant growth regulating use of the acid, and (b) if Randall was an inventor of the use, whether GAF is barred by laches or estoppel from claiming it, and (2) the relief phase, in which will be tried the issues of the relationship between the uses for the acid claimed in the various foreign patents and U. S. '188 Patent and the alleged Randall discovery or inventorship.

The liability phase of the case was tried from December 1-11, 1980. Following completion of the evidence, consisting of about 1,500 pages of testimony and more than 360 exhibits, the parties submitted requests for findings of fact and conclusions of law together with memoranda of law. On pleadings, proof, and the written submissions of the parties, I make the following

I. FINDINGS OF FACT

A. The Parties

1. Plaintiff, GAF Corporation, is a Delaware corporation with its principal place of business in New York, New York.

2. Defendant, Amchem Products, Inc., was, at the time of the initiation of both the 1972 and 1975 actions, a Pennsylvania corporation with its principal place of business in Ambler, Pennsylvania. During the pendency of these proceedings, Amchem has been succeeded by Union Carbide Agricultural Products Company, Inc., a wholly owned subsidiary of Union Carbide Corporation. To obviate confusion, I will continue to refer to defendant as Amchem.

3. Dr. David I. Randall was an employee of GAF who, at all times relevant to this dispute, held the position of Senior Scientist (T 102).¹ Although not formally a party to this dispute, Dr. Randall is claimed by GAF to have been either the sole inventor or a joint-inventor of the use of 2-chloroethylphosphonic acid as a plant growth regulator. Dr. Randall died on December 20, 1979 (T 48).

4. Dr. Anson R. Cooke is currently, and was at all times relevant to this dispute, group leader of biological research in herbicides and plant growth regulators at Amchem (T 1028-1029). He is one of the named inventors of record of the use of 2-chloroethylphosphonic acid to achieve plant growth regulation.

5. Charles David Fritz (Fritz) is an employee of Amchem. During the years relevant to this dispute he conducted various tests on chemicals submitted to Amchem for testing by other companies including GAF (T 1314). He is also listed as an inventor of the invention being contested herein.

6. Wilbur Fell Evans (Evans) is an employee of Amchem. During the period relevant to this dispute he conducted primary screening tests on chemicals submitted to Amchem for testing by other companies including GAF (T 1404). He is also one of the inventors of record of the plant growth regulating use of 2-chloroethylphosphonic acid.

B. The GAF-Amchem Relationship

a. The Screening Agreement

7. GAF, a chemical producer, lacked facilities to test chemicals it produced for various end uses including biological activity on plants (T 1552). Prior to 1960, it employed a consultant to screen its chemicals for agricultural uses (T 104).

8. In 1960 GAF's management wanted to increase its research efforts in the area of screening chemicals for various end uses. Eventually GAF, dissatisfied with its consulting arrangement, explored the possibility of entering into a relationship with Amchem for the screening of its chemicals for agricultural purposes (T 104, TX 54). Amchem was in the business of developing agricultural chemicals and maintained facilities for screening chemicals developed by other companies for use as herbicides and plant growth regulators (TX 54).

GAF also entered into screening relationships with other companies for testing the utility of its compounds for other end uses (TX 20).

9. On September 5, 1961, GAF and Amchem entered into a screening agreement (TX 56) which was subsequently amended on June 29, 1966 (TX 311).

10. Under the terms of the screening agreement GAF would, from time to time, submit to Amchem lists of chemical compounds for possible screening. Amchem would then select from GAF's list the chemicals which it was willing to screen. GAF would then furnish Amchem with a sample of each chemical compound which Amchem had selected. Upon receipt of the samples, Amchem would promptly "initiate a program to evaluate and test each such selected chemical as a herbicide" (TX 56, ¶ 1-2). Amchem was contractually bound to submit reports to GAF at least twice a year indicating what chemicals were still being screened (TX 56, ¶ 2).

11. The screening agreement permitted GAF and Amchem to file patent applications covering their respective inventions (TX 56, ¶¶ 3-4). The agreement further provided for the licensing of such patent rights by each to the other at negotiated rates (TX 56, ¶ 8-9) and envisioned that, if possible, GAF would manufacture chemicals which Amchem developed under the agreement (TX 56, 196).

b. GAF's Procedures Under the Screening Agreement

12. Within GAF the responsibility for selecting the chemicals which had been synthesized by GAF at its Central Research Laboratory (CRL) in Easton, Pennsylvania, and other facilities for submission to Amchem and other screeners resided in Dr. Max Chiddix. During 1965-1966, Dr. Chiddix was the program manager at CRL for organic research (T 108).

13. Dr. Chiddix partially delegated the responsibility for selecting compounds for the screening programs to Joseph Copes (Copes) who was employed as a chemist by GAF at CRL (T 108, 758).

14. Copes' task was to select samples for the respective screening arrangements to which GAF was a party (T 758). For each compound he received from the various GAF laboratories nationwide, Copes prepared a compound sheet and assigned a number with the prefix CRL (T 765). The compound sheet had two sections. The top section had noted thereon the CRL number of the compound, its chemical structure and empirical formula, its concentration, and the initials of the chemist who synthesized it as well as a reference to the page of the chemist's notebook where the synthesis was recorded (T 767, TX 5, 20). The bottom section noted the screener to which the compound was sent and the results of that screener's testing. (TX 20).

15. For the Amchem screening agreement, Copes attempted to formulate a list of 40 compounds a month (T 769) which he would then submit to Dr. Chiddix for his perusal and approval (T 109).

16. Dr. Chiddix and Copes used very broad criteria in selecting the compounds which would go to Amchem, i. e., that surface active agents² such as detergents, and polymeric chemicals were rarely active as herbicides (T 114, 182), but any other type of chemical was viewed as a possible entrant into the Amchem screening program (T 114, 182). The only criterion that Copes developed on his own was to make a list consisting of structures as diversified as possible (T 769).

17. GAF had no express criteria for selecting compounds because it is virtually impossible to predict agricultural or biological activity on the basis of the chemical structure of a compound (T 184-185, T 1042, T 1542-43, TX 54 at 389).

18. Upon approval by Dr. Chiddix, the list was sent to GAF's Commercial Development Department (CDD) in New York (T 110) and was thereafter forwarded to Amchem (T 71, TX 69, TX 83).

19. Amchem did not accept all of the compounds submitted by GAF for testing (T 1040, TX 72, 86). When Amchem noted on a particular list the compounds it wished to screen, Copes would send samples of them to Amchem (T 852).

c. Amchem's Procedures under the Screening Program

20. The list prepared by GAF was sent to Dr. Cooke who selected those to be screened by Amchem. (See Finding 19). Like Dr. Chiddix at GAF, Dr. Cooke was unable to predict with any degree of certainty whether a new chemical compound would show activity (T 1042). The only guidelines which Cooke used were exclusionary ones. For example, he would not accept for screening...