Loctite Corp. v. Ultraseal Ltd., Nos. 84-1687

• Court: United States Courts of Appeals. United States Court of Appeals for the Federal Circuit
• Writing for the Court: Before DAVIS, BALDWIN, KASHIWA; BALDWIN
• Citation: 228 USPQ 90,781 F.2d 861
• Parties: , 228 U.S.P.Q. 90, 1986-1 Trade Cases 66,941 LOCTITE CORPORATION, Appellant/Cross-Appellee, v. ULTRASEAL LTD., et al., Appellees/Cross-Appellants. Appeal
• Docket Number: Nos. 84-1687,84-1737
• Decision Date: 17 December 1985

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781 F.2d 861 54 USLW 2380, 228 U.S.P.Q. 90, 1986-1
Trade Cases 66,941 LOCTITE CORPORATION, Appellant/Cross-Appellee,
v.
ULTRASEAL LTD., et al., Appellees/Cross-Appellants. Appeal Nos. 84-1687, 84-1737. United States Court of Appeals,
Federal Circuit. Dec. 17, 1985.

Arthur I. Newstadt, Oblon, Fisher, Spivak, McClelland & Maier, P.C., Arlington, Va., argued for appellees/cross-appellants. With him on the brief was Richard D. Kelly.

Before DAVIS, BALDWIN, KASHIWA, Circuit Judges.

BALDWIN, Circuit Judge.

Loctite Corporation (Loctite) appeals from a judgment of the United States District Court for the Eastern District of Wisconsin, 225 USPQ 67 (1984), which denied Loctite's claims that U.S. Patent No. 3,435,012 ('012), issued to Nordlander in 1969, and U.S. Patent No. 4,165,400 ('400), issued to DeMarco in 1979, were infringed, and which declared the '400 patent invalid. Loctite, the assignee of both patents, appeals the invalidity and noninfringement holdings with respect to claim 1 of the '400 patent and the noninfringement holding with respect to claims 1, 3-5, and 9-10 of the '012 patent. ¹

Ultraseal Ltd., Ultraseal America, Inc., Imprex, Inc., and Aluminum Casting and Engineering Co., Inc. (collectively, Ultraseal), the alleged infringers, cross appeal from the denials of their antitrust counterclaim and request for attorney fees.

We affirm in part, vacate in part, and remand for proceedings consistent with this opinion.

Background

A. The Technology

Porous articles, such as wood, ceramics, and particularly metal, frequently must be impregnated and sealed before use to fill

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the article's pores. The product used to fill the pores is called an "impregnant" or "sealant." The impregnation process generally involves immersing the porous article into a liquid sealant bath to permit the pores to fill, removing excess sealant from the article, and "curing" (i.e., polymerizing to a solid form) the sealant in the pores.

The patents at issue involve "anaerobic" curing compositions, a type of sealant dating back to the 1950's. Though the definition of "anaerobic" is at the heart of this litigation, the term generally relates to the ability to cure when oxygen is absent but not cure when oxygen is present.

B. The Patents

Claim 1 of the '012 patent is representative:

1. An anaerobic curing sealant composition adapted to remain in a liquid, nonpolymerizing state for prolonged periods of time while in contact with air and to polymerize to the solid state in the absence of air and upon contact with metal surfaces comprising a monomer and, by weight of the sealant composition, from .01 to 15 percent of a hydroperoxide catalyst for the monomer, said monomer being predominantly a monoacrylate ester having a single terminal group of the formula

NOTE: OPINION CONTAINS TABLE OR OTHER DATA THAT IS NOT VIEWABLE

wherein R1 is a member selected from the group consisting of hydrogen, halogen, and lower alkyl of 1-4 carbon atoms; said ester having on the alcoholic portion thereof a reactive center adapted for cross linking, said reactive center being selected from the group consisting of labile hydrogen, the hetero atom of a heterocyclic ring, hydroxy, alkyl substituted amino, cyano and halogen radicals.

The hydroperoxide catalyst, according to '012, is designed to promote the polymerization of the monomer upon exclusion of air.

Claim 1 of the '400 patent reads:

A process for impregnating and sealing a porous article comprising the steps of:

(a) impregnating the article with a self-emulsifiable anaerobic curing composition which comprises:

A. An anaerobically-curing acrylate monomer;

B. A peroxy initiator in sufficient concentration to initiate cure of the monomer upon exclusion of oxygen; and

C. about 0.25 to about 10.0% by weight of the total composition of an anionic or nonionic surfactant which is dissolved in the composition and which renders the composition self-emulsifying upon mixing with water;

(b) washing the surface of the article with water; and

(c) permitting the anaerobic sealant to cure.

The '400 patent emanated from a parent application containing claims to the process and the composition used therein. After a restriction requirement by the United States Patent and Trademark Office (PTO), a divisional application containing the process claim at issue was filed and that claim issued in the '400 patent. The composition claims issued in U.S. Patent No. 4,069,378 ('378), which was also assigned to Loctite. In February 1980, Loctite filed a reissue application for the composition claims of the '378 patent. A final rejection of the claims under 35 U.S.C. Sec. 103 was made, the PTO Board of Appeals (Board) affirmed the rejection, and this Court affirmed the Board. In re DeMarco, 714 F.2d 160 (Fed.Cir.1983) (unpublished opinion).

C. Dispute Between The Parties

The dispute arose in 1979, when the energy crisis forced major automobile manufacturers to use lighter metals such as aluminum. Those metals frequently contained numerous microscopic pores and cracks that required sealing.

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In April 1979, Loctite filed a complaint against Ultraseal in district court charging direct infringement under 35 U.S.C. Sec. 271(a), inducing infringement under Sec. 271(b), and contributory infringement under Sec. 271(c). The charges alleged (1) importation into the United States and sales of Ultraseal's product, PC504, with instructions for use, and (2) use of PC504 in an impregnation process.

Ultraseal denied infringement, asserted the invalidity of the patents as a defense, and counterclaimed that Loctite was trying to enforce its patents knowing that Ultraseal was not infringing--conduct allegedly an attempt to monopolize in violation of federal antitrust law, specifically section 2 of the Sherman Act. ² Ultraseal sought treble damages, costs, and attorney fees under the antitrust laws ³ and attorney fees under the patent laws. ⁴

In August, 1979, Loctite filed with the International Trade Commission (ITC) a complaint alleging unfair competition based on Ultraseal's infringement of the '378 patent. Eventually, Loctite moved to withdraw its ITC complaint on the basis that the pertinent '378 patent claims were invalid; the motion was granted and the complaint was dismissed with prejudice.

D. District Court Opinion

The only antitrust issue tried below was that of intent as it related to Ultraseal's allegation of bad faith enforcement of the patents. Earlier, the district court had severed damages relating to the patent claim and all economic issues relating to the antitrust counterclaim. 219 U.S.P.Q. 93 (E.D.Wisc.1982).

On August 8, 1984, the district court issued its opinion denying Loctite's infringement charges and holding the '400 patent invalid under 35 U.S.C. Sec. 103. The court upheld the validity of the '012 patent and denied Ultraseal's antitrust claim and request for attorney fees. Ultraseal does not challenge on appeal the district court's holding on the validity of the '012 patent.

Issues

1. Whether the district court clearly erred in finding that claim 1 of the '400 patent and claims 1, 3-5, and 7-9 of the '012 patent were not infringed;

2. Whether the district court erred in holding claim 1 of the '400 patent invalid;

3. Whether the district court erred in denying Ultraseal's antitrust counterclaim; and

4. Whether the district court abused its discretion in denying Ultraseal's request for attorney fees.

OPINION

A. Infringement

It is uncontested that Ultraseal's PC504 contains a monomer and an initiator selected from the monomers and initiators of the patent claims. Though PC504 also includes components not required by the claims, ⁵ such inclusion does not avoid infringement if the claims otherwise read on the accused product or process. See, e.g., Radio Steel & Mfg. Co. v. MTD Products, Inc., 731 F.2d 840, 848, 221 USPQ 657, 663-664 (Fed.Cir.), cert. denied, --- U.S. ----, 105 S.Ct. 119, 83 L.Ed.2d 62 (1984).

Thus, the dispute does not focus on the identity of the PC504 components. Instead, it focuses on whether PC504 is an

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"anaerobic" sealant composition. Ultraseal has carefully selected a monomer and initiator, and added other ingredients not required by the claims, to give it a composition and process which, it alleges, are not "anaerobic." The claimed inventions, however, require anaerobicity.

Although it appears in the preambles of the '012 patent claims, the term "anaerobic" breathes life and meaning into the claims and, hence, is a necessary limitation to them. See, e.g., Perkin-Elmer Corp. v. Computervision Corp., 732 F.2d 888, 896, 221 USPQ 669, 675-676 (Fed.Cir.), cert. denied, --- U.S. ----, 105 S.Ct. 187, 83 L.Ed.2d 120 (1984). It is also a limitation on process claim 1 of the '400 patent, which requires, inter alia, use of an "anaerobic-curing acrylate monomer," and "permitting the anaerobic sealant to cure." The specification, claims, and prosecution history of the '400 patent make clear that the "to cure" step, and the claim in general, require an "anaerobic" cure.

Henceforth in this opinion, "anaerobic" (with quotation marks) refers to the specific definition of that term in the claims, whereas cure(s) or curing anaerobically (without quotation marks) means the property of curing in the absence but not in the presence of oxygen. The district court interpreted "anaerobic" as a composition that rapidly and spontaneously cures anaerobically without the addition of an outside influence such as heat or a transition metal.

The district court found that Loctite's commercial embodiment, PMS10e, "cures at room temperature," that "Ultraseal's PC504 cures [only] after inducing 90?C. (195?F.) of heat into the composition," and that PC504 "appears to require the addition of an outside influence such as heat or contact with a substantial amount of a transition metal, such as copper, in order to cure." Hence, the district court determined that the...