Minnesota Min. and Mfg. Co. v. Blume
| Decision Date | 07 July 1982 |
| Docket Number | Nos. 80-3262,80-3293 and 80-3585,s. 80-3262 |
| Citation | 684 F.2d 1166,215 USPQ 585 |
| Parties | MINNESOTA MINING AND MANUFACTURING COMPANY, Plaintiff-Appellant, Plaintiff-Cross-Appellee, v. Walter S. BLUME and the Electrodyne Company, Inc., Defendants-Appellees, Defendants-Cross-Appellants. |
| Court | U.S. Court of Appeals — Sixth Circuit |
Charles G. Atkins, Cincinnati, Ohio, for Blume and the Electrodyne Co., Inc. in all cases.
C. R. Beirne, John S. Wirthlin, Cincinnati, Ohio, Stanley G. DeLaHunt, Terryl Qualey, St. Paul, Minn., for Minn. Min. and Mfg. Co.
Strauss, Troy & Ruehlmann, Cincinnati, Ohio, John D. Fairchild, Connolly, Bove & Lodge, Wilmington, Del., for Blume and the Electrodyne Co., Inc. in No. 80-3585.
Before BROWN * and JONES, Circuit Judges, and WHITE, District Judge. **
These consolidated appeals involve two patents, in the field of bonded magnets, owned by Minnesota Mining and Manufacturing Company (3M). Walter S. Blume and the Electrodyne Company (defendants) appeal from judgments holding that Blume infringed 3M's U. S. Patent No. 2,999,275 (275 patent) and thereby also breached an agreement not to compete (described by the district court as the "noncompete agreement"). 3M appeals from a judgment holding its U. S. Patent No. 3,235,675 (675 patent) invalid for obviousness. 1 We affirm the judgments.
Magnets may be divided into two broad classes, sintered (or cast), on the one hand, and bonded, on the other. Sintered magnets are formed by firing magnetic materials (e.g., aluminum, nickel and iron) at high temperatures into a single coherent body. Sintered magnets have high magnetic energy but tend to be hard, brittle, and thus extremely difficult to work or machine. Bonded magnets were first developed in the 1930's by mixing small particles of magnetic material with a binder material such as plastic or rubber. The resulting magnet could be easily worked and machined. By 1954 bonded magnets were commercially available, but their magnetic energy was low.
While bonded magnets were being developed, a group of scientists with the Philips Company were studying the qualities of a newly-discovered class of hard magnetic materials composed of an iron oxide sintered with barium, strontium or lead. In the early 1950's members of the Philips group secured a patent (the 778 patent) and published an article (the Philips article) describing a process in which this sintered material (hereinafter "barium ferrite") would be ground to fine particles, many as small as a single crystal. These particles would be placed in a mobile condition in a non-magnetic binder and subjected to a magnetic field which would orient the particles in substantially the same direction. The particles would be further oriented when they were again sintered into a coherent, dense body with exceptionally high magnetic energy.
Blume was aware of both existing bonded magnet technology and the then-recent research on the qualities of barium ferrite. During the mid-1950's he engaged in research which led to the development of a high-energy bonded magnet. In 1958 Blume filed a patent application which became the 275 patent when issued in 1961. This patent covered a process for mixing plate-like particles of barium ferrite with a non-magnetic binder, and orienting the magnetic particles by means of mechanical forces exerted on the material by rolling or extruding processes. Orientation of the plate-like particles produced a magnet with twice the magnetic energy of earlier bonded magnets. Although it was well known in the art to orient particles in a non-magnetic matrix by exposing the material to a magnetic field, the mechanical orientation taught by the 275 patent process proved to be the first commercially practicable method of orienting the particles. The high energy bonded magnet created by the 275 process became a great commercial success.
In an attempt to secure a patent which covered the product produced by the 275 process, Blume in 1962 added claims 8-10 to an existing patent application, which became the 675 patent when issued in 1966. 2 These claims provide as follows:
I claim:
8. A permanent magnet material comprising a dispersion of particles of a permanent magnet material in a non-magnetic matrix, a substantial portion of said particles having two substantially parallel opposed faces the distance between which is no greater than the dimension across said faces.
9. A permanent magnet material comprising a dispersion of small bodies of a permanent magnet material in a non-magnetic binder, said particles being in the form of right cylinders and having a length to width ratio of no more than about one.
10. A permanent magnet material comprising a dispersion of small discs of permanent magnet material in a non-magnetic molded binder, said discs having opposite faces lying in parallel planes and having a thickness no greater than the width of said faces.
These claims included within their description the plate-like particles of barium ferrite which, when oriented by the 275 process, produced a high-energy bonded magnet. However, the 675 patent product is not limited to the use of barium ferrite material, but rather encompasses any magnetic material which could be given the specified shape. Furthermore, although the advantages of orientation are discussed in the file wrapper, the 675 product claims are not limited to oriented particles of the specified shape. The file wrapper indicates that even unoriented particles of the specified shape will produce a better bonded magnet than would particles of random shape. A specific method for obtaining particles of the requisite shape does not form part of the claimed invention. Thus the scope of the 675 patent includes, but is broader than, the product of the 275 patent process.
3M subsequently acquired the rights in the two patents and entered into the noncompete agreement with Blume. The agreement provided that Blume would work for 3M for one year and would refrain from any participation in the magnet business for a five-year period beginning on the day Blume was last employed by 3M. Since Blume's last day of employment with 3M was on September 30, 1968, the noncompete agreement was due to expire on September 30, 1973.
In May 1971 Blume and 3M provisionally agreed to a modification of the noncompete agreement which would have allowed Blume to enter the sintered magnet business in exchange for an extension of the noncompete agreement in the bonded magnet business to May 1, 1976. 3 Blume, however decided not to enter the sintered magnet business, and therefore the May 1971 modification never took effect.
Blume then sought permission to reenter the bonded magnet business. After much discussion and correspondence, which the district court's opinion relates in full detail, 4 3M sent a letter-amendment dated June 26, 1972. This letter recited the noncompete agreement, released Blume to make sintered magnets and test equipment, and in the crucial clause, provided as follows:
This letter, which is a substitute for the letter of May 3, 1971, shall serve to release you to
B. Establish or acquire facilities for making and/or selling Matrix-bonded Permanent Magnets, with the express understanding that in making such Matrix-bonded Permanent Magnets you will not, prior to May 1, 1976 infringe any unexpired patent in your name which 3M obtained with its purchase of the Magnetic Division of Leyman Corporation, especially your U. S. Patent No. 2,999,275.
Blume agreed to the proposed amendment on July 5, 1972. He subsequently formed the Electrodyne Company and contracted for construction of a manufacturing facility. By June of 1975 Blume had begun to manufacture high-energy bonded magnets by a "trade secret process" which Blume contended did not infringe the 275 patent process. On February 6, 1976, 3M filed its complaint, which charged Blume with infringement of both the 275 and 675 patents, and breach of the amended noncompete agreement.
Blume denied infringement and breach of contract and alleged affirmative defenses based on contractual and estoppel grounds. Blume asserted that the June 1972 letter-amendment immediately released him to make high-energy bonded magnets provided only that he not employ the 275 patent process prior to May 1, 1976. After that date, Blume contended, the letter-amendment granted him a license to practice the 275 patent. 5
On Blume's motion, the district court bifurcated the trial and first tried the issues raised by Blume's affirmative defenses. The district court concluded that 3M was not estopped from bringing suit and that the amended noncompete agreement neither immediately released Blume to make high-energy bonded magnets nor granted Blume a license to practice the 275 patent after May 1, 1976, and Blume appealed.
Following the second portion of the bifurcated trial, the district court held that Blume's trade secret process infringed the 275 patent and thereby breached the amended noncompete agreement. Blume appeals from this holding. The district court further held that the 675 patent was invalid as obvious and therefore was not infringed, a holding which 3M appeals. All three appeals were consolidated and are now before this Court.
The district court held that the noncompete agreement, as amended by letter of June 26, 1972, neither immediately released Blume from the 675 patent nor granted Blume a license to practice 3M patents after May 1, 1976, the date the noncompete agreement expired. Blume now protests that the bifurcation of the trial, which Blume requested, in retrospect served only to obscure the issues. He therefore seeks on appeal "to present at one time the whole story" by means of a sixty-page appellate brief, which devotes 49 pages to a highly argumentative "Statement of the Case."
The arguments which Blume addresses to this Court evidence a...
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