Hooker Chemical Corp. v. Velsicol Chemical Corp.

• Citation: 235 F. Supp. 412
• Decision Date: 18 September 1964
• Docket Number: Civ. No. 4412.
• Parties: HOOKER CHEMICAL CORPORATION v. VELSICOL CHEMICAL CORPORATION.
• Court: U.S. District Court — Western District of Tennessee

235 F. Supp. 412

HOOKER CHEMICAL CORPORATION v. VELSICOL CHEMICAL CORPORATION.

Civ. No. 4412.

United States District Court W. D. Tennessee, W. D.

September 18, 1964.

COPYRIGHT MATERIAL OMITTED

Dean Laurence, Herbert I. Sherman, Washington, D. C., S. Shepherd Tate, Memphis, Tenn., Lon P. MacFarland, Columbia, Tenn., for plaintiff.

Albert E. Jenner, Jr., Philip W. Tone, Donald R. Harris, Chicago, Ill., Frank J. Glankler, Jr., Donald W. Pemberton, Memphis, Tenn., for defendant.

BAILEY BROWN, District Judge.

Nature of Action

This is an action on a written licensing agreement seeking to recover royalties and seeking other relief. Under this Agreement, entered into in 1951, Hooker Chemical Corp. (Hooker) licensed to Velsicol Chemical Corp. (Velsicol) the "Know-How of Hooker" and "Licensed Patent Rights" of Hooker to make hexachlorocyclopentadiene. (Hexachlorocyclopentadiene is frequently referred to in the record and will be referred to in this memorandum decision as "hex" or "C56", C56 being a trade name of Hooker.) It is the contention of the plaintiff, Hooker, that the defendant, Velsicol, is using the "Know-How of Hooker" and the "Licensed Patent Rights of Hooker" in its Memphis hex plant constructed in 1960. It is the contention of Velsicol that it is not using such Know-How and is not using such Licensed Patent Rights.

Pre-Trial Proceedings and the Trial

Prior to the trial of this action, two pre-trial conferences were held. The first such conference resulted in an order granting Hooker full discovery as to the Velsicol hex operation at Memphis but limiting the persons who might participate in the discovery and protecting the secrecy of the information ascertained. The second such conference resulted in an order narrowing the substantive issues. Also, prior to the trial, both parties filed memoranda covering their factual and legal contentions.

This action then came on for trial, without a jury, and consumed six very full weeks. The transcript of the testimony contains approximately ten thousand pages, and there are over five hundred exhibits. Much of the testimony came from experts in chemistry and chemical engineering. Subsequent to the trial, both parties filed full briefs, reviewing the evidence and setting out their factual and legal contentions.

Chemistry Involved

As some knowledge of the chemistry involved is necessary for an understanding of the issues and this opinion, we will first make a brief excursion into the chemistry. We will assume that the reader of this memorandum decision is, as was this Court prior to the beginning of this action, without knowledge in the field of chemistry. What we have to say about the chemistry is taken from the briefs of and is undisputed by the parties, and therefore, at least for purposes of this action, is true.

All matter is made up of various elements, and all atoms of a particular element are the same. A molecule is made up of two or more atoms. In this case, we will be dealing with only three elements: carbon (C), hydrogen (H), and chlorine (Cl).

The atoms of each element have a characteristic number of valence bonds. Valence bonds are the points of attachment between atoms, and it is by this attachment of atoms that molecules are formed. Carbon has four valence bonds, hydrogen has one, and chlorine has one. To illustrate, a molecule of methane, containing one carbon atom and four hydrogen atoms, can be shown, in structural formula, as follows:

The lines between the atoms indicate valence bonds. The four valence bonds of the carbon atom are satisfied by the single bond of each hydrogen atom.

A carbon atom may be double bonded. That is, two of its valence bonds may be satisfied by bonding with two valence bonds of another atom. For example, two adjacent carbon atoms may be attached by double bonds, and their remaining valence bonds satisfied by other atoms. This can be illustrated by a molecule containing two carbon atoms, double bonded, and four hydrogen atoms, the structural formula being:

When the atoms in a molecule are all single bonded, the molecule is said to be saturated; if there is a double bond in the molecule, it is said to be unsaturated.

Both Hooker and Velsicol use a five-carbon-atom hydrocarbon as a starting material. Hooker's starting material is called normal pentane, so called because the carbon atoms are in a straight chain and there are five of them. The structural formula for normal pentane may be shown as follows:

Velsicol's starting material is called cyclopentadiene ("cyclo"), and here we introduce still another concept, which is that the carbon atoms in the molecule may present a ring structure rather than a straight chain structure. The structural formula of this starting material is:

Again, the name cyclopentadiene is descriptive: "cyclo" indicates the ring structure, "penta" indicates that there are five carbon atoms, "ene" indicates the double-bonded, or unsaturated, character of the molecule, and the preceding syllable "di" indicates that the molecule is unsaturated twice.

The end product, hexachlorocyclopentadiene (C5 Cl 6) is a cyclic molecule and has five carbon atoms, no hydrogen, and six chlorine ("hexachloro") atoms and contains two double bonds. Its structural formula is:

Making hex therefore involves, for both parties, the elimination of all hydrogen from their five-carbon-atom hydrocarbon starting materials and the introduction of six chlorine atoms in these molecules. This latter process is called chlorination.

Description of Hooker and of Velsicol Processes

Having covered the basic chemistry involved here, it would be well next to describe, in general, the process for making hex used by Hooker and made available to Velsicol under the Agreement licensing Know-How and Patent Rights and then to describe the process for making hex used by Velsicol at its Memphis plant.

As stated, Hooker starts with normal pentane (usually referred to simply as "pentane"), which it introduces as a gas into and dissolves in liquid partially chlorinated pentane or polychloropentane (PCP). At the same time it introduces into and dissolves gaseous chlorine in this liquid, and a reaction between the pentane and chlorine takes place, which results in the elimination of some of the hydrogen atoms of the pentane molecules and their replacement by chlorine atoms. This is called chlorination in the liquid phase. The reaction product is more liquid PCP. This reaction is carried out at a relatively low temperature and is photochemically catalyzed by ultraviolet light which is present in the reactor. From this reaction chamber, liquid PCP of suitable specific gravity for further chlorination at high temperature in vapor phase is continuously drawn off and is sent on for this further chlorination. A small amount of this reaction product, which is under-chlorinated, is sent through a photochemical after-chlorinator for further chlorination, but the Hooker liquid-phase, low-temperature chlorination is essentially in one step.

The liquid PCP thus produced in the first step chlorination, and which is to be further chlorinated in vapor phase at high temperatures, is passed, together with excess chlorine not consumed in this first reaction, into a vaporizer and the PCP is by heat vaporized. The vaporized PCP and chlorine are then introduced, as a second step in the chlorination, into a thermocatalytic chlorinator, wherein the PCP and chlorine are subjected to heat and a packed fuller's earth catalyst, further chlorination takes place, and the structure of the molecules becomes cyclical. Here about 90% of Hooker's hex is made. This second step of chlorination in the Hooker process is the first of two steps in the Hooker high-temperature, vapor-phase zone.

The gaseous effluent from this "cat" chlorinator contains not only, as stated, a large amount of hex but also contains a substantial amount of octachlorocyclopentene (C 5 Cl 8), or "octa," the structural formula of which is:

Hooker then, as a third step, passes the vapors from the cat chlorinator through a unit which consists of a group of parallel nickel-alloy tubes heated inside a shell, where, at still higher temperatures, the "octa" is cracked to hex. Hooker calls this unit a "cracker" because of its primary function. It will also sometimes be referred to hereafter as a "hot tubes" reactor. This cracking involves eliminating two chlorine atoms and introducing a second double bond in the octa molecule. Hooker contends that the nickel present in these tubes acts as a catalyst in dechlorinating octa to hex.

The gaseous effluent from the cracker, which contains a high percentage of crude hex, is quickly cooled by being brought into contact with liquid crude hex. The unreacted chlorine and the hydrogen chloride in the effluent are separated from the crude hex and crude hex is further purified by distillation.

Velsicol's process also makes use of a relatively low-temperature, liquid-phase chlorination followed by a high-temperature, vapor-phase chlorination. Velsicol's liquid-phase chlorination, however, is in two steps and its vapor-phase is in one step, while, as has been seen, Hooker's liquid-phase chlorination is one step and its vapor-phase is in two steps.

Velsicol introduces and dissolves liquid cyclo, its starting material, into a reaction chamber containing liquid partially chlorinated cyclopentane or polychlorocyclopentane (PCCP). At the same time it introduces and dissolves gaseous chlorine into this PCCP. The chlorine and the cyclo then react, not in the presence of light, to form more PCCP. The aim of this first step of liquid-phase chlorination is to produce a PCCP of a degree of chlorination approximating tetrachlorocyclopentane, which has a structural formula:

This involves saturating both double bonds of the cyclo molecule by adding four chlorine atoms, leaving the six hydrogen atoms in the molecule. Velsicol calls the product of the first step of the...