Kolene Corporation v. Motor City Metal Treating, Inc.

• Decision Date: 07 May 1971
• Docket Number: No. 20107.,20107.
• Citation: 440 F.2d 77
• Parties: KOLENE CORPORATION, and Deutsche Gold-und-Silber Scheideanstalt Vormals Roessler, Plaintiffs-Appellees, v. MOTOR CITY METAL TREATING, INC., Defendant-Appellant.
• Court: U.S. Court of Appeals — Sixth Circuit

440 F.2d 77 (1971)

KOLENE CORPORATION, and Deutsche Gold-und-Silber Scheideanstalt Vormals Roessler, Plaintiffs-Appellees, v. MOTOR CITY METAL TREATING, INC., Defendant-Appellant.

No. 20107.

United States Court of Appeals, Sixth Circuit.

March 9, 1971.

Rehearing Denied May 7, 1971.

COPYRIGHT MATERIAL OMITTED

Martin J. Adelman, Birmingham. Mich., for defendant-appellant; Barnard, McGlynn & Reising, Gerald E. McGlynn, Jr., Birmingham, Mich., on brief; Feikens, Dice, Sweeney & Sullivan, Joseph Levin, Detroit, Mich., of counsel.

Bernard J. Cantor and Daniel G. Cullen, Detroit, Mich., for plaintiffs-appellees; Cullen, Settle, Sloman & Cantor, Richard D. Grauer, Detroit, Mich., on brief.

Before PHILLIPS, Chief Judge, and PECK and BROOKS, Circuit Judges.

PHILLIPS, Chief Judge.

This is an appeal from the order of the District Court holding a patent valid and infringed. We affirm.

For an extensive discussion of the facts of the case reference is made to the opinion of District Judge Talbot Smith, reported at 307 F.Supp. 1251 (E.D.Mich.). A summary of pertinent facts will be stated in this opinion to the extent necessary to dispose of the issues presented on appeal.

The Prior Art

The patent in suit, U. S. Letters Patent No. 3,022,204, concerns the treatment of metals to improve their strength and wear properties. At the time of the invention both inventors were employees of Deutsche Gold-und-Silber Scheideanstalt Vormals Roessler (hereinafter referred to by its tradename "Degussa"), a German corporation. Kolene is the exclusive licensee of the patent in the United States.

In the early 1950's, the treatment of metals to upgrade their strength and wear properties was carried out by two distinct conventional nitriding processes, "gas nitriding" and "liquid nitriding."

"Gas nitriding" is carried out by placing the steel part to be treated in a chamber at a temperature of about 520° C. and then passing into the chamber a current of ammonia gas for at least 24 hours.

"Liquid nitriding" is practiced by placing the steel part to be treated in an aged salt bath containing a cyanide salt at a temperature of 565° C. One of the effects of the aging is that, at the surface of the bath, a portion of the cyanide salt reacts with oxygen in the air to form cyanate, 2 CN (cyanide) + O2 (oxygen) = 2CNO (cyanate). This surface aeration creates a bath having 5-15% cyanate.

Both these processes operated to harden the surface of the treated part but they had serious side effects, one of which was causing the part to distort and become very brittle. The processes also took considerable time, were extremely expensive, and were limited to specific applications. They could not be used to nitride low carbon steels.

Around 1954 Dr. Muller, a metallurgist employed by Degussa, discovered that by operating a liquid nitriding process with a bath having a relatively high cyanate content (i.e., roughly 30%), the wear resistance of a treated workpiece was substantially improved without the previously attending brittleness. At least by 1958 Dr. Muller had discovered that a 30 per cent cyanate bath process also remarkably increased the fatigue resistance of low carbon steels. Both these discoveries became part of the prior art with respect to the patent in suit by virtue of Dr. Muller's publications acclaiming their merits. To describe the newly discovered process, Dr. Muller coined the phrase "soft nitriding," which contrasted the new process with the brittleness of workpieces treated by the old liquid and gas nitriding processes.

The original "soft nitriding" process saw considerable exploitation in Europe, but after some time it was found to have one fatal drawback — the lack of uniformity. As a result of this deficiency, use of the process was discontinued. Thus, as found by the District Judge, the original "soft nitriding" process was a commercial failure.

The Invention

In February of 1959, Dr. Muller, and Carl Albrecht, another Degussa technical employee, jointly conceived the idea of bubbling air up through the salt bath (a technique referred to as "sub-surface aeration" or simply "aeration"). Aeration of the 30 per cent cyanate bath proved to be the key to uniformity. Moreover, for some as yet unexplained reason, the quality of the process was improved. This improved process was also referred to as "soft nitriding" but was introduced in this country by Kolene under the servicemark "TUFFTRIDE."

The Prosecution History of the Patent

In October 1959, a patent application (Serial No. 844,382) was filed in the U. S. Patent Office in the name of Dr. Muller. This application was directed to the non-aerated process which employed a bath having at least 30 per cent cyanate. This application was abandoned in 1962.

In the meantime, on March 25, 1960, an application (Serial No. 17,541) had been filed on the process of the present invention. Claim 1 of this application read:

"1. A method of treating metals having a surface adapted for nitriding which comprises immersing such metals in a fused salt bath containing alkali metal cyanide and alkali metal cyanate maintained at a temperature between 500 to 600° C while passing a finely divided oxidizing gas through said fused salt bath."

This claim was rejected on the basis of a British patent disclosing a process for treating metals which included a bath having up to 15 per cent cyanate and with an ammonia gas bubbling up through the bath. A second rejection was made on the basis of the British patent in view of Dr. Muller's earlier U. S. patent No. 2,927,875, which disclosed the nonaerated bath of 30-40 per cent cyanate.

In response to this rejection, applicants' attorneys canceled claim 1 and substituted the following:

"12. A process comprising immersing a metal workpiece in a molten alkali metal salt bath comprising between about 25 and 40% cyanate, at least about 50% cyanide, the remainder being substantially carbonate, the said bath being free of sulfur, selenium and tellurium, while aerating the bath with an oxygen-containing gas introduced in well-distributed fine bubbles."

After a number of conferences with the Examiner and persuasive written argument (which we will consider later in this opinion), claim 12 was allowed. Claim 12 was then transferred to an application filed March 20, 1961, Serial No. 97,060, which application materialized into the patent in suit. Claim 12 was numbered as claim 1 in the latter application and in the patent, and that claim is the center of the present controversy.

The Alleged Infringement

Motor City, the appellant, is something of a spin-off of Commercial Steel Treating Corporation, another Detroit heat treating establishment which worked with Kolene in exploiting the invention in the early days of "TUFFTRIDING." Mr. Miel, the present controlling stockholder of Motor City, was president of Commercial at that time. When Commercial and Kolene had a parting of the way, Miel left Commercial and established Motor City for the purpose of heat treating metals under a process called "CYNATRIDE." The "CYNATRIDING" process of Motor City involves immersing a workpiece in an aerated salt bath having something between 46 and 50 per cent cyanate.

No improvement in the process results from using a bath with 46-50 per cent cyanate as compared to a bath with cyanate in the exact range of 35-40 per cent. This percentage of cyanate was selected, according to Miel, on advice of counsel to avoid infringement of the patent.

In response to the instant suit, Motor City defends on the grounds that: (1) The patent is invalid, (2) the accused process does not infringe, (3) the patent is unenforceable because of fraud on the Patent Office in its procurement, and (4) the patent is unenforceable because of plaintiff's misuse. We shall consider each of these defenses separately since the pertinent considerations differ for each.

Invalidity

Motor City admits that the patented process is new and novel, but contends that it is obvious within the meaning of that term in 35 U.S.C. § 103.

The question of "obviousness" in determining patent validity is a mixed question of both fact and law. Kaiser Industries v. McLouth Steel Corp., 400 F.2d 36, 41 (6th Cir.); National Filters, Inc. v. Research Products Corp., 384 F. 2d 516 (5th Cir.); Hensley Equipment Co. v. Esco Corp., 375 F.2d 432 (9th Cir.). In ruling on that question the Supreme Court said:

"(1) Under § 103, the scope and content of the prior art are to be determined;

"(2) Differences between the prior art and the claims at issue are to be ascertained;

"(3) And the level of ordinary skill in the pertinent art resolved.

"(4) Against this background, the obviousness or nonobviousness of the subject matter is determined.

"(5) Such secondary considerations as commercial success, long felt but unsolved needs, failure of others, etc., might be utilized to give light to the circumstances surrounding the origin of the subject matter sought to be patented. As indicia of obviousness or nonobviousness, these inquiries may have relevancy." Note: Clauses separated and numbered for convenience. Graham v. John Deere Co., 383 U.S. 1, 17, 86 S.Ct. 684, 694, 15 L.Ed.2d 545.

When the District Court determines items numbered 1, 2 and 3, it makes findings of fact which are binding on appeal unless the findings are clearly erroneous. Rule 52(a), Fed.R. Civ.P. It is the ultimate determination of the trial judge (item number 4 above) which is a conclusion of law with which this Court may disagree based on the established findings of fact. See Monroe Auto Equipment Co. v. Heckethorn Mfg. & Sup. Co., 332 F.2d 406 (6th Cir.), cert. denied, 379 U.S. 888, 85 S.Ct. 160, 13 L.Ed.2d 93.

We will not review Judge Smith's findings of fact except to point out that he found that nothing in the prior art suggests aeration of the 30 per cent cyanate bath. We are in complete agreement with that finding and his conclusion that the invention was not obvious at the...