Iron Ore Co. of Canada v. Dow Chemical Co.

• Decision Date: 18 July 1974
• Docket Number: Nos. 73-1490 and 73-1491,s. 73-1490 and 73-1491
• Citation: 182 USPQ 520,500 F.2d 189
• Parties: IRON ORE COMPANY OF CANADA, a corporation, and Ireco Chemicals, a corporation, Plaintiffs-Appellants, v. The DOW CHEMICAL COMPANY, a corporation, Defendant-Appellee, and University of Utah, a body politic and corporate under Utah law, Intervenor-Appellee. IRON ORE COMPANY OF CANADA, a corporation, Plaintiff-Appellant, v. UNIVERSITY OF UTAH, a body politic and corporate under Utah law, Defendant-Appellee, v. Henry E. FARNAM, Jr., Defendant-Appellant by Joinder.
• Court: U.S. Court of Appeals — Tenth Circuit

Page 189

500 F.2d 189

182 U.S.P.Q. 520

IRON ORE COMPANY OF CANADA, a corporation, and Ireco

Chemicals, a corporation, Plaintiffs-Appellants, v. The DOW CHEMICAL COMPANY, a corporation, Defendant-Appellee, and University of Utah, a body politic and corporate under Utah law, Intervenor-Appellee.

IRON ORE COMPANY OF CANADA, a corporation, Plaintiff-Appellant,

v.

UNIVERSITY OF UTAH, a body politic and corporate under Utah

law, Defendant-Appellee, v. Henry E. FARNAM, Jr.,

Defendant-Appellant by Joinder.

Nos. 73-1490 and 73-1491.

United States Court of Appeals, Tenth Circuit.

Argued March 22, 1974.

Decided July 18, 1974.

William A. Marshall, Chicago, Ill. (Charles J. Merriam, Alvin D. Shulman, Merriam, Marshall, Shapiro & Klose, Chicago, Ill., Donald C. McKinlay, Holme, Roberts & Owen, Denver, Colo., on the brief), for plaintiff-appellant Ireco Chemicals.

Richard R. Trexler, Chicago, Ill. (Richard Bushnell, Olson, Trexler, Wolters, Bushnell & Fosse, Ltd., Chicago, Ill., and Hugh C. Garner, Salt Lake City, Utah, of counsel, on the brief), for defendant-appellee The Dow Chemical Co.

Before LEWIS, Chief Judge, and PICKETT and McWILLIAMS, Circuit Judges.

McWILLIAMS, Circuit Judge.

This is a patent case involving an explosive in slurry form, i.e., an explosive in a mixture form wherein the solid material is suspended in a liquid. The particular slurry type explosive here involved is composed of ammonium nitrate plus aluminum plus water (ANkA1kH(2)O) and is used in blasting operations in general, and in the mining industry in particular. In connection with its use in mining operations, a slurry explosive may be poured into a borehole and, being in a liquid form, it tends to fill the borehole fully. Such gives the slurry explosive an advantage over the traditional solid and packaged explosive, which tends to get snagged and thus fails to get to the bottom of a given borehole, the interior walls of a typical borehold being jagged and uneven.

As we understand it, the only real parties to this appeal at the present time are Ireco Chemicals, a Utah corporation, and Dow Cehmical, a Delaware corporation. The University of Utah, a body politic and corporate under Utah law, was a party to the proceedings in the trial court and was designated as a party on appeal. However, the University did not file a brief nor has it otherwise participated in this appeal and we are advised that the University and Ireco, and the latter's assignor, the Iron Ore Company of Canada, a Delaware corporation with its principal offices in Canada, have now settled their differences to the end that the present appeal boils down to a patent dispute between Ireco and Dow.

The present controversy arises from the fact that both Ireco and Dow hold patents for an explosive slurry composed of ammonium nitrate plus aluminum plus water. Ireco's United States Patent No. 25,695 (hereinafter referred to as the '695 patent), being a reissue of United States Patent No. 3,121,036 (hereinafter referred to as the '036 patent), is based on work done by Dr. Melvin A. Cook and one Henry E. Farnam. Dr. Cook was formerly employed in the research department of DuPont and more recently was employed by the University of Utah where he taught classes and directed an explosive research group. Farnam is a vice-president of the Iron Ore Company of Canada. The particular work of Cook and Farnam relied on by Ireco for its priority date was performed in 1957 and 1958. Dow's Patent Application, Serial No. 784,881 (hereinafter referred to as patent application '881) was based on work performed by two of its employees, Joseph R. Hradel and Harold E. Staadt, in the early 1950's and ending in 1955 and 1956. A bit of background concerning the patents here involved may be helpful.

Dr. Cook while teaching at the University of Utah performed certain experimental work under contract with the United States Navy beginning in the early 1950's, which work involved many different explosive compositions, one of which was a composition of ANkA1kH(2)O. This contract work was discontinued in about 1954. Sometime in the fall of 1956, Dr. Cook met Farnam, who was at that time operations manager for the Iron Ore Company of Canada. Discussion ensued concerning an explosive slurry which could be used in the mining industry and more particularly for use in boreholes in the blasting of ore bodies. Dr. Cook, with suggestions from Farnam, performed experimental work along the lines thus indicated in 1957 and 1958. As a result of Cook's and Farnam's work, the Iron Ore Company of Canada, Ireco's predecessor in interest, made application for a patent in October 1958. This application resulted in the issuance of patent '036, which, as indicated, is the predecessor to patent '695 upon which Ireco now relies.

Patent '036 contained five claims, as we understand it, and sometime in 1964 Ireco complained by letter to Dow that the latter was infringing on its patent, and more particularly on claim 5 thereof. Dow in turn informed Ireco that its (Dow's) explosive did not infringe on claim 5 because Dow's explosive did not incorporate the particle sizes or the densities specified in claim 5 of patent '036. Ireco apparently acquiesced in Dow's explanation. At least no formal proceeding of any type was instituted against Dow at that time. Instead, Ireco through Cook and Farnam sought a reissuance of its patent '036. In their application for reissuance Cook and Farnam claimed that through lack of communication between themselves and patent counsel, they had sought less in the original application than they had a right to claim. The patent thus reissued, here known as the '695 patent, in addition to the claims 1-5 in the original patent, includes additional claims referred to as claims 6 through 12.

In the early 1950's Dow had itself become interested in developing explosive compositions for a variety of earth moving and mining uses in addition to oil well uses. Dow's employees Hradel and Staadt tested many compositions including ANkA1kH(2)O during an experimental program which began in 1955 and was completed in October 1956. This testing program resulted in the discovery of a number of different explosive compositions which were subsequently covered by several patent applications. One of these is patent application '881 which later became involved in the interference proceedings in the Patent Office.

After the reissuance of the '695 patent to Ireco in 1964, Dow caused the United States Patent Office to institute an interference proceeding to determine whether the invention disclosed in the '695 patent, and more particularly whether that disclosed by claim 9 thereof, was first developed by the aforesaid Cook and Farnam, or by the two Dow employees Hradel and Staadt. After hearing, the Board of Patent Interferences awarded priority of invention to Dow on the basis that there was a reduction to practice of the count of interference by Dow through the work of Hradel and Staadt by the fall of 1956, such antedating the work of Cook and Farnam. It was in this general setting that Ireco went to court.

Ireco's complaint, containing two counts, named Dow as the sole defendant. The first count was an action brought pursuant to 35 U.S.C. 146, which is basically a de novo action in effect appealing the decision by the Board of Patent Interferences, which, as indicated, held that Dow's Hradel and Staadt were the prior inventors of certain explosive compositions claimed by Ireco in patent '695. The second count in Ireco's complaint charged Dow with infringement of claims 5 through 12 of patent '695.

As indicated above, the University of Utah intervened in the proceeding brought by Ireco against Dow. The basis for such intervention was the University's belief that the work done by Cook should have inured to the benefit of the University, and not Ireco, hence it made claim to the ownership of patent '695. Also as indicated above, it is our understanding that the University and Ireco have resolved their differences and that the only disputants in this appeal at this time are Ireco and Dow.

Trial of this matter to the court extended some two weeks and culminated in a judgment in favor of Dow. Specifically, in elaborate findings and conclusions, the trial court concluded that Hradel and Staadt were the first inventors of the subject matter of the patents here under consideration and affirmed the interference decision of the Patent Office awarding priority to Dow. In line with its resolution of count one of Ireco's complaint, the trial court also found for Dow on the infringement issue raised in count two of the complaint. Ireco now appeals.

The findings, conclusions and judgments of the trial court are reported in 177 U.S.P.Q. at pages 34 to 76. The length of the trial of this case, over two weeks, and the detailed findings and conclusions of the trial court, some forty-two pages in printed form in the United States Patent Quarterly, are eloquent proof that the trial judge gave this entire matter his most careful attention. Accordingly, there is no need to here recite the factual background out of which this controversy arises, as such is set forth fully in the findings of the trial court. We shall here confine ourselves to the one or two matters which we believe to be decisive of the appeal and which require an affirmance of the judgment entered by the trial court.

In our view, perhaps the crucial issue in this appeal concerns just what Ireco invented through the efforts of Cook and Farnam, and whether such was the same as, or different from, that which Dow invented through the efforts of Hradel and Staadt. In other words, is the subject matter...