Monsanto Company v. Rohm & Haas Company

• Decision Date: 12 January 1972
• Docket Number: No. 19132.,19132.
• Citation: 456 F.2d 592
• Parties: MONSANTO COMPANY, Appellant, v. ROHM & HAAS COMPANY.
• Court: U.S. Court of Appeals — Third Circuit

456 F.2d 592 (1972)

MONSANTO COMPANY, Appellant, v. ROHM & HAAS COMPANY.

No. 19132.

United States Court of Appeals, Third Circuit.

Argued May 3, 1971.

Decided January 12, 1972.

As Amended March 9, 1972.

COPYRIGHT MATERIAL OMITTED

C. Frederick Leydig, Wolfe, Hubbard, Leydig, Voit & Osann, Chicago, Ill. (Pepper, Hamilton & Sheetz, Philadelphia, Pa., John E. Rosenquist, Chicago, Ill., Arnold H. Cole, St. Louis, Mo., on the brief), for appellant.

Arthur G. Connolly, Sr., Connolly, Bove & Lodge, Wilmington, Del. (Werner H. Hutz, Rudolf E. Hutz, Wilmington, Del., on the brief), for defendant-appellee.

Before KALODNER, VAN DUSEN and ALDISERT, Circuit Judges.

OPINION OF THE COURT

ALDISERT, Circuit Judge.

Monsanto Company appeals from a judgment declaring invalid and unenforceable its U. S. Patent No. 3,382,280, known as the Huffman patent, issued May 7, 1968.¹ The action arose in an infringement proceeding Monsanto brought against Rohm and Haas Company, in which the defendant counterclaimed for a declaratory judgment of invalidity and for an injunction and damages for unfair competitive acts against defendant's allegedly infringing product.²

Preliminarily, we observe that Rohm and Haas, as a defendant in the proceedings below, had the right to challenge the validity of the patent on the ground that it was obtained by fraudulent misrepresentation.³ In Walker Process v. Food Machinery, 382 U.S. 172, 176, 86 S.Ct. 347, 350, 15 L.Ed.2d 247 (1965), the Court said:

Under the decisions of this Court a person sued for infringement may challenge the validity of the patent on various grounds, including fraudulent procurement. E. g., Precision Instrument Mfg. v. Automotive Maintenance Machinery Co., 324 U.S. 806 65 S.Ct. 993, 89 L.Ed. 1381 (1945); Hazel-Atlas Co. v. Hartford-Empire Co., 322 U.S. 238 64 S.Ct. 997, 88 L.Ed. 1256 (1944); Keystone Driller Co. v. General Excavator Co., 290 U.S. 240 54 S.Ct. 146, 78 L.Ed. 293 (1933). In fact, one need not await the filing of a threatened suit by the patentee; the validity of the patent may be tested under the Declaratory Judgment Act, 28 U.S.C. § 2201 (1964 ed.). See Kerotest Mfg. Co. v. C-O Two Fire Equipment Co., 342 U.S. 180, 185 72 S.Ct. 219, 222, 96 L.Ed. 200 (1952).

The patent in suit is for a chemical compound known as 3,4-dichloropropionanilide, hereinafter 3,4-DCPA or propanil. The 1967 patent application asserted that only 3,4-DCPA had unusual and valuable herbicidal activity and that this activity was "surprising" because "related compounds possess little or no herbicidal efficiency." The district court concluded that Monsanto intentionally withheld material facts in order to mislead the Patent Office, thereby making its application for a patent taken as a whole misleading; that Monsanto came into court with unclean hands; that it was guilty of laches in asserting any right to patent the compound; that 3,4-DCPA was obvious within the meaning of 35 U.S.C. § 102; and that the compound was "described in printed publications" within the meaning of 35 U.S.C. 102(a), (b) and was therefore anticipated.⁴ Monsanto Co. v. Rohm and Haas Co., 312 F.Supp. 778, 798-799 (E.D.Pa.1970).

In the view we take, it becomes necessary to reach only the misrepresentation issue. And to do this requires a discussion of the chemical compounds in question, those related to them, and the various properties associated with them. Closely related to 3,4-DCPA is the chemical compound 3,4-dichloroacetanilide (3,4-DCAA), differing in its structural formula solely by having one less CH2 group.

The first Monsanto (Huffman) application pertinent to these proceedings was filed May 27, 1957, and covered a class of 3,4-dichloroanilides comprising some one hundred compounds, including 3,4-DCPA and 3,4-DCAA, claiming herbicidal⁵ compositions of chemical compounds and the use of these compounds to destroy undesired plants.⁶ Huffman claimed that the members of the class possessed "unusual and valuable herbicidal activity," while related compounds possessed "little or no herbicidal efficiency." Huffman confirmed this "unusual and valuable herbicidal activity" of all the compounds included in the claim. The Patent Office, in four separate office actions, rejected all of Huffman's claims as unpatentable under prior art disclosures.

Monsanto, through Huffman, tried again on May 8, 1961. Its application disclosed another large class of 3,4-dihalogenated anilides, again including 3,4-DCPA and 3,4-DCAA. Urging anew that the class possessed "unusual and valuable herbicidal activity," the application averred that, in addition to 3, 4-DCPA, both 3'4'-dichloroisobutyranilide and 3'4'-dichloromethacrylylanilide were useful as selective post-emergent herbicides for rice.⁷ And again the Patent Office rejected the claim of the application as unduly broad and unpatentable over the prior art.

The patent in suit was the third Monsanto application filed on February 3, 1967. This time it was represented that only 3,4-DCPA had "unusual and valuable herbicidal activity" and that the activity of this compound was "surprising" because "related compounds possess little or no herbicidal efficiency." The examiner rejected the single compound claim as obvious under prior art disclosing homologs⁸ and isomers⁹ of 3,4-DCPA, including 3,4-DCAA and 2,4-dichloropropionanilide. The patent was issued, however, on May 7, 1968, after Monsanto submitted an affidavit of Dr. Robert F. Husted, based on tests performed by him on twenty plant species at three different rates of application per acre. The report as presented to the Patent Office asserted that 3,4-DCPA completely killed or severely injured nine of the eleven species and failed to have any effect on only two. Eight other compounds were reported to have no effect on any of the eleven plants and two other compounds, one of them 3,4-DCAA, either had very slight or no effect. Significantly, although the Husted tests entailed tests on twenty species, at three separate rates of application per acre, the Patent Office was informed of tests on only eleven species and only at one rate of application, two pounds per acre. In all, the affidavit showed less than 25 per cent of Husted's results; of 899 tests, only 110 were submitted.

The district court concluded that this close-cropping of Husted's findings amounted to misrepresentation.¹⁰ Moreover, Judge Masterson found misrepresentation in the inconsistency of Monsanto's 1967 representations of 3,4-DCPA's unique herbicidal efficiency, despite assertions in 1957 and 1961 that 3,4-DCAA and other 3,4-dichloroanalides also had activity as herbicides.

The concept of misrepresentation as applied to patent infringement cases admits to no fixed parameters and promulgates no specific dogma. At best it is an abbreviated expression of basic equitable maxims inherent in the law of patents; a recognition that a part of the quid pro quo for the acquisition of a patent monopoly is an insistence that the circumstances surrounding the application for the patent be "free from fraud and other inequitable conduct." Precision Co. v. Automotive Co., supra, 324 U.S. 806, 816, 65 S.Ct. 993, 998, 89 L.Ed. 1381 (1945).

We perceive the test to be that set forth by the Supreme Court in Precision: "The facts of a given case must accordingly be measured by both public and private standards of equity":

The guiding doctrine in this case is the equitable maxim that "he who comes into equity must come with clean hands." This maxim is far more than a mere banality. It is a self-imposed ordinance that closes the doors of a court of equity to one tainted with inequitableness or bad faith relative to the matter in which he seeks relief, however improper may have been the behavior of the defendant. That doctrine is rooted in the historical concept of court of equity as a vehicle for affirmatively enforcing the requirements of conscience and good faith. This presupposes a refusal on its part to be "the abettor of iniquity." Bein v. Heath, 6 How. 228, 247 47 U.S. 228, 12 L.Ed. 416. Thus while "equity does not demand that its suitors shall have led blameless lives," Loughran v. Loughran, 292 U.S. 216, 229 54 S.Ct. 684, 689, 78 L.Ed. 1219, as to other matters, it does require that they shall have acted fairly and without fraud or deceit as to the controversy in issue. Keystone Driller Co. v. General Excavator Co., 290 U.S. 240, 245 54 S.Ct. 146, 147, 78 L.Ed. 293; Johnson v. Yellow Cab Co., 321 U.S. 383, 387 64 S.Ct. 622, 624, 88 L.Ed. 814; 2 Pomeroy, Equity Jurisprudence (5th Ed.) §§ 397-399.

This maxim necessarily gives wide range to the equity court\'s use of discretion in refusing to aid the unclean litigant. It is "not bound by formula or restrained by any limitation that tends to trammel the free and just exercise of discretion." Keystone Driller Co. v. General Excavator Co., supra, 245, 246 54 S.Ct. 147, 148, 78 L.Ed. 293. Accordingly one\'s misconduct need not necessarily have been of such a nature as to be punishable as a crime or as to justify legal proceedings of any character. Any willful act concerning the cause of action which rightfully can be said to transgress equitable standards of conduct is sufficient cause for the invocation of the maxim by the chancellor.

Moreover, where a suit in equity concerns the public interest as well as the private interests of the litigants this doctrine assumes even wider and more significant proportions. For if an equity court properly uses the maxim to withhold its assistance in such a case it not only prevents a wrongdoer from enjoying the fruits of his transgression but averts an injury to the public. The determination of when the maxim should be applied to bar this type of suit thus becomes of vital significance. See Morton Salt Co. v. Suppiger Co., 314 U.S. 488, 492-494 788, 62 S.Ct. 402, 405, 406, 315 U.S. 788, 314 U.S. 488, 86 L.Ed. 363.

. . . The possession and assertion of patent rights are "issues of great moment to the

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