Great Lakes Carbon Corporation v. Continental Oil Company

• Decision Date: 21 June 1963
• Docket Number: Civ. A. No. 6946.
• Parties: GREAT LAKES CARBON CORPORATION v. CONTINENTAL OIL COMPANY, Lake Charles Chemical Corporation and Union Carbide Corporation.
• Court: U.S. District Court — Western District of Louisiana

219 F. Supp. 468

GREAT LAKES CARBON CORPORATION v. CONTINENTAL OIL COMPANY, Lake Charles Chemical Corporation and Union Carbide Corporation.

Civ. A. No. 6946.

United States District Court W. D. Louisiana, Lake Charles Division.

June 21, 1963.

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Earl Babcock, Duncan, Okl., Burns, Doane, Benedict, Swecker & Mathis, Washington, D. C., Carl Peters, Morton Grove, Ill., Plauche & Plauche, Lake Charles, La., for plaintiff.

Wolfe, Hubbard, Voit & Osann, Chicago, Ill., L. David Trapnell, Ponca City, Okl., John L. Hohmann, New York City, Liskow & Lewis, Lake Charles, La., for defendants.

HUNTER, Judge.

Plaintiff, Great Lakes Carbon Corporation, hereinafter called Great Lakes, is a very substantial, privately held corporation which is one of the world's leading purchasers of petroleum coke. It was in the business of buying and selling petroleum coke for many years before entering into the business of manufacturing graphite electrodes for the steel industry in about 1940. It was Great Lakes' activities in the manufacture of such electrodes which eventually led to its application for the patent here in suit and to the events which plaintiff contends gave rise to its causes of action. Defendants are Union Carbide Corporation, Continental Oil Company, and Lake Charles Chemical Corporation. Union Carbide Corporation is a very large publicly held corporation engaged primarily in the manufacture of chemicals and related products. A division of Union Carbide (National Carbon) has been engaged in the manufacturing and selling of graphite electrodes for use by the steel industry since 1928.

Continental Oil Company is a large petroleum refining and marketing company. It has refineries in a a number of locations at which crude oil is fractionated and refined into a multiplicity of products. One of the products — actually a more or less unwanted by-product — of Continental's refining operations is ordinary petroleum coke. Continental has conducted a coking operation at its Ponca City refinery since the 1920s. A coking unit was built and went on stream at its Lake Charles, Louisiana refinery on or about January 1, 1958. Defendant, Lake Charles Chemical Corporation, is a wholly owned subsidiary of Continental Oil and its acts are the acts of Continental.

Continental sells all of the coke produced at its Ponca City refinery to Great Lakes Corporation. Great Lakes has been getting all of that coke since at least 1947 and continues to do so.

Continental sells all of the coke produced at its Lake Charles refinery to National Carbon and has done so since the coking unit was built in 1958.

Continental produces two grades of coke in each of its coking units. One of the grades of coke produced in each refinery is called either Regular or No. 2 coke. The production of regular coke is not involved in this litigation. Produced in each refinery also is a second grade of coke called variously "No. 1," "special," "needle," or "premium" coke.

It is the manufacture of this "special" coke at the Lake Charles Refinery which brings about this law suit. Plaintiff claims with respect thereto that the process used at the location infringes its patent (SHEA — 2,775,549) and that its alleged trade secrets have been "stolen" by defendants in connection therewith.

Plaintiff does not contend that any apparatus (or "machine", as the statutes call it) is new. The claims of SHEA are directed to a process for making "needle coke" from the residues of more common crude oil.

Prior to the 1952 Patent Act, the statutes provided that any person who invented a new "art, machine, manufacture, or composition of matter," could obtain a patent. The 1952 Patent Act changed the word "art" to "process," and gave this definition to the word "process":

"(b) The term `process' means process, art or method, and includes a new use of a known process, machine, manufacture, composition of matter, or material." 35 U.S.Code, § 100.

Thus, the 1952 Act gave a new meaning to the word "process" in patent law. Rohm & Haas v. Roberts Chemicals, 245 F.2d 693, 4th Cir. The 1952 Act became effective January 1, 1953, but it applies to all patents, whether applied for before or after the effective date. Southern Saw Service v. Pittsburgh-Erie Saw Corp., 239 F.2d 339, 5th Cir.

SHEA does not purport to cover needle coke per se. What plaintiff contends is that SHEA teaches a change which enabled the use of recognized equipment for the specific purpose of making needle coke¹ out of asphalt base crude oils. The process consists of two steps. The first involves the preparation of a coking charge stock, and the second consists of coking that charged stock. The coking charge used in the accused process consists principally of thermal tar. There is nothing new about coking thermal tar to produce needle coke. This was done years before SHEA's invention by Kendall Refining Company at Bradford, Pennsylvania. Plaintiff asserts, however, that the process used by Kendall in preparing the thermal tar does not anticipate SHEA because the reduced crude used by Kendall was a paraffin base crude and did not contain "contaminants" which interfere with the formation of the needle structure, and hence could not have been removed therefrom as taught by SHEA. However, it is conceded that thermal tar is a residuum that was produced at Continental's Lake Charles Refinery from asphalt base crude oils (by a process that plaintiff claims as step (1) of its invention) for years before a coking unit was even considered for that refinery and is attributable in no way to Great Lakes or SHEA (plaintiff's answer to defendants' Interrogatory 26 on December 6, 1958). In fact, all agree that step (1) isolated is standard refinery procedure, but Great Lakes asserts in essence that SHEA taught that this tar, when coked under certain conditions in a delayed coker, makes "needle coke."

Defendants deny each and every allegation of wrongdoing. As to the SHEA patent, defendants assert that it is neither valid nor infringed, and outline the various defenses urged on the patent phase of this case in the simple chart which follows:

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Referring to this chart, defense counsel argues, "If you take a pair of scissors and think of these little boxes as on a string and if you find that we are right on what we say in a single box on either side, and clip it off, they Great Lakes have lost on the patent side of this case."

At the time of the trial, over seventy (70) runs had been made at Continental's refinery at Lake Charles making this "special" coke. Each run lasts about ten days and several thousand tons of coke are made during each run. The charge of infringement is based on what was done at Run 10 in October of 1958. Both plaintiff and defendants had their experts and attorneys present during Run 10, and many samples of feed stocks and coke were taken and tested by both sides during that run.

The system used for performing the process in making needle coke during Run 10 is shown on Exhibit PX-52. It is essentially the same system as that used by Continental to make needle coke for Great Lakes in Ponca City, Oklahoma since 1953, except that instead of using only the clean (Tank 68) residuum to make needle coke (as is done at Ponca City), Continental blends in twenty (20) per cent of dirty residuum from Tank 90 when making needle coke at Lake Charles.

Plaintiff has urged that Claims 1, 2, 9, 10 and 11 of SHEA are infringed by the accused process. The five claims are:

"1. A process for producing needle-like coke which comprises removing from a high boiling petroleum residuum those components which readily form an insoluble phase upon heating at 350°-550°C., and coking the remaining residuum in a quiescent pool."

"2. The process of Claim 1 further characterized in that the insoluble phase is removed by a step comprising distilling about 80 to 90% of said residuum and coking the overhead in a quiescent pool."

"9. A process for producing needle-like coke which comprises removing from a high boiling petroleum residuum those components which readily form an insoluble phase upon heating at about 350° to about 550°C., coking the resulting material in a coking operation comprising the steps of first heating a stream of the material to a coking temperature, then continuously passing it into a coking zone, maintaining a liquid body thereof in said zone at a coking temperature and converting it to coke, said material being heated and coked without agitation except that incident to the natural movement of the material and of vapors in said steps, and at a rate and under conditions of thermal homogeneity precluding sharp temperature gradients within the material during said heating and coking which would cause localized premature coking of minor portions of said material with resultant contamination of the body of material prior to its solidification, and recovering a coke of needle-like structure."

"10. The process of claim 9 wherein the components which readily form said insoluble phase are removed by forming a charging stock for catalytic cracking, subjecting said charging stock to catalytic cracking conditions of temperature and pressure, separating gas, gasoline, recycle stock and a high boiling aromatic residue, and coking said residue under the defined conditions."

"11. The process of Claim 9 wherein the components which readily form said insoluble phase are removed by forming a charging stock for catalytic cracking, subjecting said charging stock to catalytic cracking conditions of temperature and pressure, separating gas, gasoline and recycle stock, subjecting said recycle stock to thermal cracking to produce gas, gasoline, gas oil and a high boiling aromatic residue and coking said residue under the defined conditions."

HAS PLAINTIFF PROVED THAT SHEA WAS INFRINGED LITERALLY OR UNDER THE DOCTRINE OF EQUIVALENTS?

In determining whether an accused...