La Maur, Inc. v. LS Donaldson Company

• Decision Date: 23 January 1961
• Docket Number: No. 4-59-Civ-170.,4-59-Civ-170.
• Citation: 190 F. Supp. 771
• Parties: LA MAUR, INC., Plaintiff, v. L. S. DONALDSON COMPANY and G. Barr & Company, Defendants.
• Court: U.S. District Court — District of Minnesota

190 F. Supp. 771

LA MAUR, INC., Plaintiff, v. L. S. DONALDSON COMPANY and G. Barr & Company, Defendants.

No. 4-59-Civ-170.

United States District Court D. Minnesota, Fourth Division.

January 23, 1961.

Harold D. Field, Jr., and Sidney Barrows, Minneapolis, Minn., for plaintiff.

Dean Laurence and Herbert I. Sherman, Washington, D. C., and Edward A. Danforth, Minneapolis, Minn., for defendants.

DEVITT, Chief Judge.

This is an action for the infringement of plaintiff's United States Patent No. 2,871,161, and for the misappropriation of a claimed trade secret belonging to plaintiff. Both the patent and the trade secret relate to an aerosol hair spray composed essentially of Freon, alcohol and polyvinylpyrrolidone (PVP).

The Basic Facts

Plaintiff La Maur is a Minnesota corporation engaged in the manufacture of cosmetic products. Its president is M. L. Spiegel, who patented the invention and assigned it to La Maur. Defendant L. S. Donaldson Company is a Minnesota corporation which operates a department store. Donaldson is charged with patent infringement, but is not named in the trade secret cause of action. Defendant G. Barr & Company (Barr) is an Illinois corporation engaged in the loading (i. e. manufacturing) of aerosol products for a number of major companies in the cosmetic field, including Max Factor, Toni, Colgate, Hazel Bishop and others. Barr intervened in this case, carried the defense as to both defendants, and is a defendant as to both the patent count and the trade secret count.

Polyvinylpyrrolidone, commonly abbreviated PVP, is a member of a special class of chemicals called polymers. Although PVP has been known since it was synthesized in Germany in the 1930's, the only commercial application of the material prior to Spiegel's claimed invention was in the pharmaceutical field, especially as a blood plasma extender. Aerosol hair sprays had been manufactured and were in use for some time prior to Spiegel's claimed invention, but they were made with shellac-type materials which are not polymers and have no chemical similarity to PVP.

Spiegel is a chemist and, learning through trade bulletins of the manufacture of PVP by the General Aniline & Film Corp. (GAF) in the summer of 1951, started experiments with it for use in the cosmetic field. He dissolved PVP in alcohol and sent the solution to Barr in Chicago for loading with Freon in pressurized containers for the purpose of determining the compatibility of the ingredients. They were compatible, and the resulting hair spray turned out to be superior to any then known.

Early in 1952 plaintiff made arrangements to have its new hair spray manufactured by Barr. Plaintiff furnished the necessary PVP to Barr, identified only by the code name "resin LM." In March of 1952 plaintiff received his first shipments of aerosol PVP hair spray and has since been selling it under the trade name "Style", with marked success.

At about the same time, it is claimed by plaintiff, Barr made unsuccessful efforts to identify plaintiff's resin LM, both by attempted chemical analysis in its laboratory and by seeking the technical assistance of the Catalin Corporation of America and the American Cyanamid Company. The resin LM could not be identified. Plaintiff claims that in June of 1952 Barr identified resin LM when it succeeded in surreptitiously uncovering a GAF label which plaintiff had concealed with dark ink and another label on a container shipped to Barr. The GAF label revealed that resin LM was PVP. It is further claimed that Barr immediately began experimenting with PVP hair spray for its own benefit, and took some of plaintiff's production stock of resin LM for that purpose.

On July 31, 1952 Spiegel filed his patent application. In November, 1952 plaintiff shifted his loading business from Barr to another company. Plaintiff maintains that during all of this time he kept the identity of his resin LM secret and that Barr knew that it was to be kept secret.

Meanwhile, the plaintiff had disclosed his secret to GAF in confidence. In November of 1952 GAF, allegedly taking advantage of the confidence, started to promote the use of PVP hair sprays throughout the industry, principally through one Edwin P. Hay, a salesman. Hay then told Barr about PVP hair spray.

It does not appear from the evidence that Barr at any time disclosed his previously acquired knowledge as to the real nature of resin LM. In December, 1952, GAF, through salesman Hay, and Barr, started the promotion of aerosol PVP hair spray using Spiegel's formula. GAF intended to sell the PVP, it being the only manufacturer of it, and Barr intended to get the loading business, it being the principal company engaged in that business. Subsequently, most of the major cosmetic companies put out PVP hair spray using, it is claimed, the Spiegel formula.

Between 1953 and 1956 the aerosol hair spray industry expanded tremendously, the majority of products being of the PVP type.

On March 27, 1953, one Martinelli, a GAF chemist, filed a patent application for PVP hair spray. On February 21, 1957 the Patent Office formally declared an interference proceeding between the Spiegel application owned by the plaintiff and the Martinelli application owned by GAF. This interference proceeding, which was actually a contest between La Maur and GAF, eventually terminated on January 27, 1959 in favor of Spiegel and the patent in suit was issued to plaintiff.

Subsequently plaintiff sought to issue licenses under the patent in suit to the entire trade. Some companies, e. g. Breck, took licenses, but most of the trade refused. The defendant Barr indemnified his customers against liability for infringement of the patent. By this time the aerosol hair spray business was running at a volume of approximately a million dollars a year, largely PVP sprays, which, it is claimed, infringe on plaintiff's patent.

In their answer to the patent infringement cause of action, the defendants claim principally that the patent is invalid because it lacks novelty and was anticipated by the prior art, and that the claimed patent does not comply with the requirements of 35 U.S.C.A. § 103 in that the claimed invention was one which would have been obvious, at the time the invention was allegedly made, to a person having skill in the art. They argue that plaintiff's claims are not stated in the full, clear, concise, and exact terms required by 35 U.S.C.A. § 112.

The defendants also claim that even assuming that the patent is valid and complies with the requirements of 35 U.S.C.A. §§ 102 and 103, and with § 112, there has been no infringement because the hair spray loaded by Barr does not fall within any of the 9 claims of plaintiff's invention, and that it is a different product from Spiegel's, composed of copolymers of vinylpyrrolidone with vinyl acetate rather than of homopolymers of vinylpyrrolidone, as is Spiegel's.

As to the trade secret count, the defendant denies that La Maur had any trade secret, and asserts that it did nothing wrong and infringed none of plaintiff's rights in determining the true nature of plaintiff's resin LM or in experimenting with it or with PVP. At all events, it claims that if it did learn a trade secret, it did not violate a confidence, either by using it or telling others about it. Barr claims that the secret, if any there be, was publicized to the trade by GAF through salesman Hay, and then became public knowledge.

The Chemistry

A consideration of the issue presented requires some explanation of the principles of polymer chemistry which are involved. The plaintiff's principal witness in this regard was Dr. Herman Mark, Director of the Polymer Research Institute at the Polytechnic Institute of Brooklyn. It appears that Dr. Mark is one of the world's foremost authorities in the field of polymer chemistry. He testified at great length about the principles involved and their application to the present case. Two other distinguished polymer chemists, Dr. Courtland Agre, a Professor from Augsburg College in Minneapolis (called by defendants) and Dr. Edward J. Meehan, a Professor from the University of Minnesota (called by the plaintiff) also testified on this subject. With the exception of the semantic issue hereinafter referred to, there appears to be no substantial disagreement between these three polymer chemists with respect to the following general aspects of the field.

Polymer chemistry covers a field where very large molecules have molecular weights which may be thousands of times greater than the molecular weights of other substances. A polymer molecule may be likened to a string of beads, with each individual bead being called a monomer or monomeric unit. If the beads are all alike, the material is called a homopolymer; if there are two different kinds of beads (illustrated by beads of two different colors), the material is called a copolymer. In what appears to be the orthodox definition, the word polymer embraces both homopolymers and copolymers, but it also appears that the word polymer in context is sometimes used in the more restrictive sense of homopolymer.

In the type of copolymers with which we are here concerned, the two different color beads (or monomeric units) occur in more or less random order within any given molecule, and copolymers can be prepared with any desired proportions of the respective constituents.

It also appears that polymer molecules, unlike molecules of other substances, are not all alike. Thus, with respect to molecular weight, for example, a polymer consists of a number of chain molecules of varying length. The molecular weight of a polymer, therefore, is expressed as an average. Because polymer molecules are so large, polymers have been found to possess physical strength which makes them useful as films and coatings, and also as fibers. Nylon, for example, is a polymer; so is synthetic rubber.

In this case, we are concerned with vinyl polymers. In addition to...