Lamb-Weston, Inc. v. McCain Foods, Ltd.
| Decision Date | 29 February 1996 |
| Docket Number | INC,94-1225,Nos. 93-1536,LAMB-WESTO,s. 93-1536 |
| Citation | 78 F.3d 540,37 USPQ2d 1856 |
| Parties | , Plaintiff-Appellant, v. McCAIN FOODS, LTD. and McCain Foods, Inc., Defendants-Appellees. |
| Court | U.S. Court of Appeals — Federal Circuit |
Robert E. Rohde, Bogle & Gates, Seattle, Washington, argued for plaintiff-appellant. With him on the brief were Al Van Kampen and Ramsey M. Al-Salam. Of counsel was Karen M. McGaffey.
Alan L. Unikel, Seyfarth, Shaw, Fairweather & Geraldson, Chicago, Illinois, argued for defendants-appellees.
Before PAULINE NEWMAN, MICHEL, and RADER, Circuit Judges.
Opinion of the court filed PER CURIAM, dissenting opinion filed by Circuit Judge Pauline Newman.
The United States District Court for the Eastern District of Washington held Lamb-Weston, Inc.'s U.S. Patent No. 4,937,084 (the '084 patent) invalid and unenforceable. Because prior art renders the '084 patent obvious, this court affirms the judgment on invalidity and vacates the judgment on inequitable conduct.
Lamb-Weston is a food processing company that sells frozen potato products. The defendants, McCain Foods companies (McCain), compete with Lamb-Weston in the frozen potato products industry. Both Lamb-Weston and McCain make partially fried (parfried) and frozen potato products. Fierce competition in the frozen potato products market spurs development of new products. This litigation centers around Lamb-Weston's development of frozen, parfried lattice-shaped french fries called "waffle fries."
In October 1979, an independent inventor, Mr. Matsler, offered to confidentially disclose his waffle fry slicing apparatus to Lamb-Weston. In January 1980, Mr. Matsler demonstrated his slicing apparatus, but 98% of the waffle fry slices were unusable. Nevertheless, Lamb-Weston began negotiations with Mr. Matsler's patent attorney to license the technology. Instead of contracting with Lamb-Weston, Mr. Matsler licensed his invention to a Lamb-Weston competitor, J.R. Simplot Company.
In December 1979, Mr. Matsler demonstrated his cutting machine to a J.R. Simplot representative. Mr. Matsler fried some of his potato slices and distributed them to customers at a local Dairy Queen Restaurant in Dallas, Oregon.
In February 1980, Lamb-Weston received a letter from Mr. Jayne, another inventor, offering to confidentially disclose his waffle fry cutting apparatus. In March 1980, Lamb-Weston evaluated Mr. Jayne's machine, but found it unacceptable. Lamb-Weston terminated communications with Mr. Jayne. Lamb-Weston then began developing its own machine, starting with a commercial machine for making waffle-style potato chips and adapting it to make waffle fries.
Lamb-Weston started testing its waffle fries in 1980 and began selling them in late 1983 under the trademark "CrissCut." In August 1983, Lamb-Weston filed a patent application in the United States Patent and Trademark Office (PTO) on the waffle-cut potato product, the slicing apparatus, and the process for making the product. The patent application had Serial No. 06/525,115 (the '115 application).
The PTO initially rejected the application because it encompassed more than one invention. 37 C.F.R. § 1.141 (1995). Lamb-Weston elected to proceed solely on the cutting apparatus claims, which issued as U.S. Patent No. 4,523,503 (the '503 patent). This patent is not at issue in this case.
Lamb-Weston separated the process claims out of the '115 application. The patent examiner initially rejected this divisional application, Serial No. 06/682,366 (the '366 application), as obvious over references disclosed on the face of the patent, namely Canada Patent No. 898,057 (Starke), U.S. Patent No. 678,514 (Regnier), U.S. Patent No. 2,612,453 (Stahmer), U.S. Patent No. 2,767,752 (Stahmer II), U.S. Patent No. 1,937,049 (Toland, et al.), U.S. Patent No. 3,139,130 (Urschel), and U.S. Patent No. 1,506,166 (Boon). Boon discloses a method for preparing frozen, partially cooked french fries. The other references disclose waffle-shaped potato products and slicing apparatus. The examiner determined that one of ordinary skill in the art would have found it obvious to freeze the waffle-cut potato products disclosed in the other references as Boon suggests.
To escape this rejection, Lamb-Weston amended the '366 application. Lamb-Weston emphasized that the prior art disclosed waffle-cut potato chips having a thickness of 1/8 inch or less, unlike the Lamb-Weston invention with a thickness of about 4/16 to 10/16 inch. Despite the amendments, the examiner finally rejected the '366 application on January 23, 1986.
Lamb-Weston appealed the final rejection to the PTO Board of Patent Appeals and Interferences (Board). In January 1990, the Board reversed the examiner's rejection. The '366 application issued as the '084 patent, the patent in dispute in this case.
The '084 patent claims a parfried, frozen potato slice. Claims 1 through 4 of the '084 patent read:
1. A parfried potato product, suitable for reconstitution by cooking, comprising:
a frozen, sliced potato section having a substantially ellipsoidal shape and a variable thickness, including a peak to peak thickness within the range of about 4/16 to 10/16 inch;
the section including opposed first and second sides, each side having longitudinal ridges and grooves therebetween, the ridges and grooves of the first side extending angularly to the ridges and grooves of the second side;
the grooves of the first and second sides having a depth sufficient to intersect one another to form a grid of openings in the potato section the section, before reconstitution, having an oil content of about 6-20%, by weight, and a solids content of about 32-40%, by weight;
whereby the product, upon reconstitution by cooking, is characterized by very thin, crisp portions of locally increased oil flavor adjacent the openings, relatively thick portions defined by intersecting ridges having an internal mealy texture and strong potato flavor similar to thick-cut french fried potato strips, and portions of intermediate thickness whose characteristics are similar to french fried shoe string potato strips.
2. The product of claim 1 wherein the section has an oil content of about 16-20%, by weight, and a solids content of about 55-65%, by weight, after oil fry reconstitution at a temperature within the range of about 350? F to 360? F for about 135-165 seconds.
3. The product of claim 1 wherein the section has an oil content of about 16-20%, by weight, and a solids content of about 55-65%, by weight, after reconstitution, whereby the thickest portions of the product have characteristics akin to thick-cut french fried potato strips, thinnest portions have characteristics akin to potato chips and other portions have characteristics akin to french fried shoe string potato strips.
4. The product of claim 1 wherein the peak-to-peak thickness is about 7/16 inch.
In 1985, McCain began making and selling frozen, parfried waffle fries. Lamb-Weston sued McCain for patent infringement, trademark infringement, unfair competition, and trademark dilution. McCain counterclaimed for a declaratory judgment of patent invalidity and unenforceability, and for damages under the antitrust laws. McCain later withdrew the antitrust claims.
The district court decided the issues of infringement, enablement, indefiniteness, and inventorship in Lamb-Weston's favor. The parties did not appeal these issues. The district court decided the trademark and unfair competition claims in McCain's favor. The parties also did not appeal these issues.
During the district court proceedings, Lamb-Weston conceded that waffle-cut potato products were known since the early 1900s. The district court found that waffle fries were available at restaurants before Lamb-Weston developed its CrissCut fry. For example, as early as 1935 and 1936 the Gem Cafe in Plainsville, Texas served waffle fries as a staple item. In 1979, the Plaza Restaurant in Quincy, Illinois sold waffle fries. In 1981, General Slicing/Red Goat Disposers sold a commercial, electric slicing machine capable of slicing 5/16 inch thick waffle fry slices.
In addition, the district court examined U.S. Patent No. 3,397,993 (the Strong patent) and found it relevant to obviousness under 35 U.S.C. § 103 (1994). The Strong patent describes a parfry process where potato slices are steam-blanched, air-dried, parfried, and then frozen. Lamb-Weston, as well as other potato processing companies, uses the Strong patent parfry process to prepare frozen, parfried french fries and reconstituted fries having all the textural limitations of the '084 patent. The district court held that this process would have been familiar to a person of ordinary skill in the art at the time of Lamb-Weston's waffle fry invention.
The district court, however, did not find that the prior waffle fry uses and sales in the 1930s, and the Strong patent process, provided the motivation to combine the waffle-cut potato chips with the known parfried potato technology. The district court said, however, that the Matsler and Jayne devices provided that motivation. The district court held the '084 patent claims invalid as obvious in light of the Matsler and Jayne devices in combination with the prior parfried frozen potato technology, including the Strong patent. The district court also found Lamb-Weston's '084 patent unenforceable due to inequitable conduct. Lamb-Weston appeals obviousness and inequitable conduct determinations to this court.
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