Grefco, Inc. v. Kewanee Industries, Inc.

Decision Date12 September 1980
Docket NumberCiv. A. No. 77-327.
Citation208 USPQ 218,499 F. Supp. 844
PartiesGREFCO, INC., Plaintiff, v. KEWANEE INDUSTRIES, INC., Defendant.
CourtU.S. District Court — District of Delaware

William Prickett, Prickett, Jones, Elliott & Kristol, Wilmington, Del., for plaintiff; Tipton D. Jennings, Stephen L. Peterson, and Bruce C. Zotter, Finnegan, Henderson, Farabow, Garrett & Dunner, Washington, D. C., of counsel.

Douglas E. Whitney, and George Pazuniak, Morris, Nichols, Arsht & Tunnell, Wilmington, Del., for defendant.

OPINION

MURRAY M. SCHWARTZ, District Judge.

This is an action for patent infringement of United States Patent No. 3,510,391 brought by plaintiff Grefco, Inc. ("Grefco") against defendant Kewanee Industries, Inc. ("Kewanee"). Kewanee has counterclaimed for a declaratory judgment of patent invalidity, unenforceability and non-infringement.1 Jurisdiction and venue are conferred on this Court by 28 U.S.C. ?? 1338(a), 1391(b). Trial in this matter began on March 31, 1980 and concluded on April 28, 1980. Post-trial briefing and argument was completed on June 6, 1980. This Opinion constitutes the Court's findings of facts and conclusions of law required by Rule 52(a), F.R.Civ.P.

I. BACKGROUND FACTS

Grefco, a Delaware corporation and a wholly owned subsidiary of General Refractories Co., was formerly the Mining and Mineral Products Division of Great Lakes Carbon Corp. ("GLC") and was acquired by General Refractories on or about May 16, 1966. (Stip. No. 1).2 Although at the time of many of the events discussed throughout this Opinion plaintiff was operating as a division of GLC, it will be referred to as "Grefco" unless otherwise indicated.

Kewanee is a Delaware corporation into which Apache Foam Products ("Apache") was merged effective February 3, 1976. Historically, Apache was purchased by the Millmaster-Onyx Corporation on September 29, 1967 from Air Products and Chemical Company. It was a division of Millmaster-Onyx Corporation until September, 1974, when it was incorporated as a wholly-owned subsidiary of Millmaster-Onyx Corporation. In 1976, Apache was merged into Kewanee and Millmaster-Onyx became an independent financial group within Kewanee. (Stip. No. 2).

U.S. Patent Application Serial No. 638,629 ("Bolster application") (PX-1) was filed on May 15, 1967 in the United States Patent and Trademark Office ("PTO") on behalf of Lyle R. Bolster ("Bolster"), Harlan E. Tarbell ("Tarbell") and Donald W. Mogg ("Mogg"). Armand McMillan ("McMillan"), then assistant patent counsel for GLC, prepared and filed the Bolster application with the knowledge and consent of General Refractories. On September 23, 1969, Patent Examiner William J. VanBalen ("Examiner") issued an Office Action indicating that all claims of the application would be allowable if amended. The minor changes suggested by the Examiner were then made and the patent issued on May 5, 1970. (PX-1; Stip. No. 32). Grefco owns the Bolster patent.

The Bolster patent is entitled "Perlite Board Bonded to Organic Plastic Foam." The claims in suit are as follows:

1. A composite board having a U value of not more than 0.2, which comprises
(a) a rigid organic plastic foam layer having a K factor not greater than about 0.4, covered on at least one of its surfaces by
(b) a perlite board having a minimum thickness of 0.6 inch, a K factor not greater than 0.45, a minimum perlite content of at least about 30% by weight and a combustible fiber and sizing content of not more than about 35% by weight, said layer being adhered to said board.
2. The board of claim 1 wherein the other surface of the foam layer is covered by a material selected from the group consisting of perlite board, roofing felt and paper.
3. The board of claim 1 wherein the rigid foam material is selected from the thermosetting and thermoplastic materials within the class consisting of polyvinyl chloride, polyurethane, polystyrene and epoxy resins.
4. The board of claim 1 wherein the rigid foam layer has a thickness within the range of ? to 2 inches.
5. The board of claim 1 wherein the perlite board has a perlite content of 50 to 90% by weight.
6. The board of claim 5 wherein the thickness of the perlite board is within the range of ? to 1 inch.
7. A composite structure in the form of a sandwich consisting of
(a) a ? to 1 inch thick base layer of perlite board having a perlite content of about 50 to 90% by weight and a combustible fiber and sizing content of not more than about 30% by weight:
(b) a rigid polyurethane foam layer of ? to 2 inches having a density of about 1.5 to 3.5 pounds per cubic foot, and
(c) a top layer selected from the class consisting of perlite board, roofing felt and paper, said base layer and said board layer being adhered to said foam layer.
8. Not asserted by Grefco
9. Not asserted by Grefco
10. The composite structure of claim 7 wherein the rigid foam layer is foamed in place.

(PX-2 at 7/19-8/28).3

The objects of the Bolster patent, as set forth in the patent, are "to provide an insulating structure which overcomes the mechanical and physical disadvantages of plastic foam boards ... , to provide a combustion resistant structure based on urethane foam ... and to provide an insulating structure of sufficiently low heat conductance so that it can find application in conventional roof building systems, even when an unusually low U value the overall coefficient of heat transmission through a complete roof assembly (Stip. No. 36c) is required." (PX-2 at 2/38-45).

Kewanee manufactures a product known as Millox (DX-A; PX-370). Although its infringement of the Bolster patent was an issue at the start of the trial, Kewanee admitted infringement midway through the trial. See Tr. 1647. Thus, the issues remaining for disposition are the validity of the Bolster patent and whether Grefco's conduct before the PTO was fraudulent.4

II. VALIDITY
A. Presumption of Validity

"The starting point in analyzing a challenge to the validity of a patent is the presumption that the patent is valid, with the burden of demonstrating invalidity by clear and convincing proof resting on the party asserting it." Aluminum Co. of America v. Amerola Products Corp., 552 F.2d 1020, 1024 (3d Cir. 1977); see also 35 U.S.C. ? 282; Tokyo Shibaura Electric Co. v. Zenith Radio Corp., 548 F.2d 88, 93 (3d Cir. 1977); Universal Athletic Sales Co. v. American Gym, Recreational & Athletic Equipment Corp., 546 F.2d 530, 540 (3d Cir. 1976), cert. denied, 430 U.S. 984, 97 S.Ct. 1681, 52 L.Ed.2d 378 (1977). When relevant prior art has not been considered by the PTO, however, the presumption of validity is weakened or overcome. Aluminum Co. of America, supra; Hadco Products, Inc. v. Walter Kidde & Co., 462 F.2d 1265, 1272 n.33 (3d Cir.), cert. denied, 409 U.S. 1023, 93 S.Ct. 464, 34 L.Ed.2d 315 (1972); PIC, Inc. v. Prescon Corp., 485 F.Supp. 1302, 1312 (D.Del.1980); Azoplate Corp. v. Silverlith, 367 F.Supp. 711, 717 (D.Del.1973), aff'd mem., 506 F.2d 1050 (3d Cir. 1974), cert. denied, 421 U.S. 914, 95 S.Ct. 1572, 43 L.Ed.2d 780 (1975). "The degree by which the presumption is weakened depends on a balancing of the pertinence of the newly cited art against the pertinence of the art actually considered by the Patent Office." Aluminum Co. of America, supra, 552 F.2d at 1025.

Kewanee asserts that the most relevant art was not considered by the Examiner and that therefore the presumption of validity has been overcome. Grefco, on the other hand, contends that the art cited by Kewanee was before the Examiner during his consideration of the Bolster application, or alternatively is no more relevant than the art considered by the Examiner. The Court finds that several important items of prior art under 35 U.S.C. ? 102 were not considered by the Examiner and therefore the presumption of validity has been substantially weakened. Specifically, an article in the Journal of Cellular Plastics ("JCP") (DX-GA)5 and the Apache brochure (DX-HA),6 both not before the Examiner, add significantly to the prior art considered by disclosing a combination of urethane and perlite as roofing insulation.7

B. Anticipation

Under 35 U.S.C. ? 102, a patent is invalid if the invention was "anticipated" by the prior art. Under section 102(b), a patent is invalid if "the invention was patented or described in a printed publication in this or a foreign country or in public use or on sale in this country, more than one year prior to the date of the application for patent in the United States." In addition, section 102(a) renders a patent invalid if "the invention was known or used by others in this country, or patented or described in a printed publication in this or a foreign country, before the invention thereof by the applicant for patent." Thus, the critical inquiries in the determination of anticipation are the date of invention of the patent and an analysis of the pertinent art available prior to invention or more than one year before the application filing date.

1. Date of Invention

The date of invention is deemed to be the date of the filing of the patent application. U. S. Expansion Bolt Co. v. Jordan Industries, Inc., 488 F.2d 566, 568 n.3 (3d Cir. 1973). The burden rests with the inventor to demonstrate an invention or reduction to practice prior to the time of filing. See generally Rex Chainbelt Inc. v. Borg-Warner Corp., 477 F.2d 481, 487 (7th Cir. 1973); 1 Chisum, Patents ? 3.083 (1980); 37 C.F.R. ? 1.131. This burden is a relatively heavy one, comparable to the burden imposed upon an alleged infringer to demonstrate prior use under ? 102(a). 1 Chisum, Patents ? 3.083; United Shoe Machine Corp. v. Brooklyn Wood Heel Corp., 77 F.2d 263 (2d Cir. 1935). Moreover, the uncorroborated and undocumented testimony of the patentee is insufficient to prove invention date. See Bell Telephone Laboratories, Inc. v. Hughes Aircraft Co., 564 F.2d 654, 657 (3d Cir. 1977), cert. denied, 435 U.S. 924, 98 S.Ct. 1489, 55 L.Ed.2d 518 (1978); Kardulas v....

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