Moore Business Forms, Inc. v. Minnesota Min. & Mfg. Co.

• Decision Date: 02 July 1974
• Docket Number: Civ. No. 1972-47.
• Citation: 384 F. Supp. 533
• Parties: MOORE BUSINESS FORMS, INC., Plaintiff, v. MINNESOTA MINING AND MANUFACTURING COMPANY, Defendant.
• Court: U.S. District Court — Western District of New York

384 F. Supp. 533

MOORE BUSINESS FORMS, INC., Plaintiff, v. MINNESOTA MINING AND MANUFACTURING COMPANY, Defendant.

Civ. No. 1972-47.

United States District Court, W. D. New York.

July 2, 1974.

Watson, Cole, Grindle & Watson, Washington, D. C. (Walter D. Ames and James H. Marsh, Jr., Washington, D. C., of counsel), and Cohen, Swados, Wright, Hanifin & Bradford, Buffalo, N. Y. (Thomas J. Hanifin, Jr. and David T. M. Murphy, Buffalo, N. Y., of counsel), for plaintiff.

Alexander, Sell, Steldt & DeLaHunt St. Paul, Minn. (Edward A. Haight, Chicago, Ill., Stanley G. DeLaHunt and Gary L. Griswold, St. Paul, Minn., of counsel), and Raichle, Banning, Weiss & Halpern, Buffalo, N. Y. (Ralph L. Halpern, Buffalo, N. Y., of counsel), for defendant.

CURTIN, Chief Judge.

Presently pending before the court is defendant's motion for summary judgment. Also pending are a number of motions by plaintiff to compel answers to interrogatories and a motion by defendant to stay discovery pending this court's decision on the motion for summary judgment. When the court first heard oral argument on these motions on August 2, 1973, the plaintiff represented that it could not answer defendant's motion for summary judgment because more discovery was needed. Since plaintiff had three motions to compel discovery pending, none of which had been answered by defendant, the court directed defendant to answer, brief the issues of law and return again for reargument.

On November 15, 1973 the parties returned and the court heard oral argument on the summary judgment motion and on the discovery motions. After counsel and the court discussed plaintiff's interrogatories and defendant's objections, the plaintiff agreed that many of its interrogatories were too broad and should be rephrased. Counsel for the defendant agreed that if the interrogatories were rephrased and narrowed, he would make a new attempt to provide plaintiff with the requested information. Because plaintiff argued that it could not answer defendant's motion for summary judgment without further discovery, the court withheld ruling on that motion to give plaintiff an opportunity to narrow its interrogatories and to proceed with discovery. At that time, counsel for plaintiff promised to file the modified interrogatories within one week.

On February 26, 1974 plaintiff filed a motion entitled "Motion to Dismiss Pending Motion for Summary Judgment" with affidavits of Robert E. Burns, a patent attorney, and William D. Swiercz, a research chemist with Moore Business Forms, attached. Plaintiff requested an argument because its discovery had "virtually ceased since the bringing of the motion for summary judgment by defendant on July 2, 1973 . . .." When the court heard argument on plaintiff's motion on March 11, 1974, it was difficult to determine plaintiff's position. Although plaintiff previously represented to the court that it could not answer defendant's motion for summary judgment without further discovery, and, on November 15, 1973, had agreed to narrow its interrogatories, plaintiff had not prepared the rephrased interrogatories. In fact, plaintiff had not attempted to secure any additional discovery between the court appearance of November 15, 1973 and that of March 11, 1974.

Considering this background, it appeared that plaintiff agreed that the motion for summary judgment was ripe for decision. However, to be certain that this was the case, at the March 11 argument the court asked plaintiff if it had submitted all it intended to submit in opposition to defendant's motion for summary judgment. Plaintiff responded that it might want to take the deposition of the patent examiner to explain the history and meaning of the Macaulay patent and agreed that by March 25, 1974 it would take one of three courses of action: First, to depose the patent examiner; secondly, to file additional affidavits in response to the motion for summary judgment, or thirdly, to stand on what had already been submitted. Instead of taking any one of these three steps, however, plaintiff, on March 19, 1974, noticed and took the deposition of James Custer, manager of the Nekoosa, Wisconsin plant of defendant. Plaintiff also filed additional interrogatories, a motion to compel production of certain manuals identified during the deposition of James Custer, a request for further answers to previously filed interrogatories and three briefs. On April 8, 1974 the court heard final arguments on defendant's motion for summary judgment.

Plaintiff's complaint alleges that defendant infringes its patent entitled "Recording Paper Coated with Microscopic Capsules of Coloring Material, Capsules and Method of Making" Patent No. 3,016,308 issued on January 9, 1962, hereinafter the Macaulay Patent. Defendant has denied infringement and challenges the validity and enforceability of the Macaulay patent. The court here notes that defendant has been producing carbonless paper by the process alleged here to infringe since 1962 and, over the years, has sold enormous quantities of that material to plaintiff. No legal action was taken by plaintiff until January of 1972, when this suit was filed.

Defendant's motion for summary judgment is based upon defendant's allegation that the Macaulay patent refers only to a process of producing microcapsules as a substantially dry, free-flowing powder, while the microcapsules produced for defendant's Type 200 paper, the product alleged to infringe, are produced and at all times handled in aqueous slurry form. This motion is concerned only with the Type 200 paper. Defendant states that at no time can its microcapsules be characterized as a free-flowing powder, and further contends that file wrapper estoppel precludes plaintiff from now arguing that producing microcapsules as a free-flowing powder is equivalent to producing them in aqueous slurry.

In support of the motion, defendant filed an affidavit of Dr. Dean A. Ostlie, Research Manager in defendant's paper products division, and an affidavit of Stanley G. DeLaHunt, counsel for defendant. Attached to these affidavits are copies of depositions, including those of Dr. Ostlie and Dr. Macaulay, copies of patents belonging to defendant, copies of answers to interrogatories, and a copy of the proceedings in the United States Patent Office upon which the Macaulay patent was granted hereinafter file wrapper. In opposition to that motion, plaintiff has submitted an affidavit of William D. Swiercz, Research Chemist in the Process Engineering Group of the Research Department of Moore Business Forms, Inc., and an affidavit of Robert E. Burns, a patent attorney.

The affidavit of Dr. Ostlie, dated June 29, 1973, states that defendant Minnesota Mining and Manufacturing Company manufactures and markets carbonless paper products designated as carbonless paper, Type 100, and carbonless paper, Type 200. In the case of the Type 200 paper, microscopic capsules containing an imaging fluid are coated on the surface of the paper. In the case of carbonless paper Type 100, microscopic capsules containing imaging fluid are combined within the paper itself. With each type of paper, when the sheets are impacted by a writing instrument the microscopic capsules are ruptured in the impacted areas, releasing the fluid, which reacts with other components to form an image in the impacted area. Because the capsules in Type 100 paper containing the imaging fluid combine with the other component to form an image within the paper matrix itself, the Type 100 paper does not need the presence of another sheet or companion structure to form an image.

However, with carbonless paper Type 200, two or more sheets are needed to create the image because the microcapsules in the Type 200 paper containing the imaging fluid are coated on the back of a sheet and the component with which the fluid reacts on release, through impacting of the capsules, is contained on the front surface of the underlying sheet. When the two sheets are together and impact occurs, an image is formed on the underlying sheet. The capsule layer in the Type 200 paper contains, in addition to the imaging microcapsules, a small quantity of relatively larger scuff microcapsules which serve as spacers to minimize contact between adjoining sheets in the Type 200 system, in order to avoid premature or inadvertent images.

Only three types of microcapsules are employed by defendant in the manufacture of carbonless paper. These are the imaging capsules employed in the Type 100 carbonless paper, the imaging capsules employed in the Type 200 paper and the larger scuff capsules employed in the Type 200 paper. All the microcapsules employed in defendant's commercial carbonless papers are formed in aqueous slurry, which slurry is of a pumpable consistency and contains more than one-half water. "While over the years there have been some slight changes in ingredients, amounts of ingredients and process conditions, at no time since the inception of 3M's carbonless paper products have these differences led to the formation of microcapsules other than in an aqueous slurry of pumpable consistency containing more than one-half water." (Ostlie affidavit of June 29, 1973, at 4.)

In the manufacture of the Type 200 carbonless paper, the aqueous slurry of imaging capsules is dumped into a tank and blended with the aqueous slurry of scuff capsules and this solution is then coated onto the paper. The Type 100 paper is made by mixing the aqueous slurry of capsules into the paper-making machine, blending it with the paper fibers and other ingredients. In any transportation or other steps taken in the manufacture prior to the final product formation, the microcapsules are handled as a slurry, always containing more than one-half water. This has been true since the beginning of 3M's manufacture of all its commercial carbonless papers. At no point from the formation of microcapsules to the production and packaging of the carbonless paper...