Procter & Gamble Co. v. Paragon Trade Brands, Inc.

• Decision Date: 31 July 1998
• Docket Number: Civil Action No. 94-16 LON.
• Citation: 15 F.Supp.2d 406
• Parties: The PROCTER & GAMBLE COMPANY, Plaintiff and Counterclaim Defendant, v. PARAGON TRADE BRANDS, INC., Defendant and Counterclaimant.
• Court: U.S. District Court — District of Delaware

15 F.Supp.2d 406

The PROCTER & GAMBLE COMPANY, Plaintiff and Counterclaim Defendant, v. PARAGON TRADE BRANDS, INC., Defendant and Counterclaimant.

Civil Action No. 94-16 LON.

United States District Court, D. Delaware.

July 31, 1998.

COPYRIGHT MATERIAL OMITTED

Robert H. Richards, III, of Richards, Layton & Finger, Wilmington, DE; of counsel: John F. Sweeney, James W. Gould, Richard C. Komson, Seth J. Atlas, of Morgan & Finnegan, New York City; Charles E. Buffon, Timothy C. Hester, Salvatore G. Rotella, Jr., of Covington & Burling, Washington, D.C.; for The Procter & Gamble Company.

James M. Mulligan, Jr., of Connolly Bove, Lodge & Hutz, Wilmington, DE; of counsel: Stephen B. Judlowe, Dennis J. Mondolino, Porter F. Fleming, Michael F. Hurley, of Hopgood, Calimafde, Kalil & Judlowe, New York City; Alan J. Hruska, Richard W. Clary, of Cravath, Swaine & Moore, New York City, for Paragon Trade Brands, Inc.

OPINION

LONGOBARDI, Senior District Judge.

Plaintiff and counterclaim defendant The Procter & Gamble Company, ("P & G"), commenced this action on January 20, 1994, alleging that defendant and counterclaim plaintiff Paragon Trade Brands, ("Paragon"), infringed two P & G patents, Lawson U.S. Patent No. 4,695,278 (the "Lawson" patent) and Dragoo U.S. Patent No. 4,795,454 (the "Dragoo" patent). Paragon answered and denied that its products infringe the Lawson and Dragoo patents and sought a declaratory judgment that these patents are invalid, unenforceable, and not infringed. Paragon also asserted counterclaims for violations of federal antitrust law and the Washington Consumer Protection Act (the "antitrust counterclaim") and for infringement of Pieniak U.S. Patent No. 5,098,423 (the "Pieniak" patent). P & G denied liability for both the antitrust counterclaim and the counterclaim for infringement of the Pieniak patent, and sought a declaratory judgment that the Pieniak patent is invalid, unenforceable, and not infringed.

In a Memorandum Opinion and Order dated March 28, 1996, this Court granted P & G's motion for summary judgment and dismissed the antitrust counterclaim. The Court conducted a bench trial on the other claims and counterclaims from February 3, 1997 through February 20, 1997. In an Opinion and Judgment Order dated December 30, 1997, the Court ruled that Paragon infringed both the Lawson and Dragoo patents; that Paragon failed to establish by clear and convincing evidence that the Lawson and Dragoo patents are invalid; that P & G did not infringe the Pieniak patent; and that P & G demonstrated that the Pieniak claims at issue are invalid as anticipated and obvious, and unenforceable as a result of inequitable conduct. The Court therefore awarded P & G damages on its claims that Paragon infringed the Lawson and Dragoo patents.

Presently before the Court is Paragon's motion for a new trial or to alter or amend the judgment, pursuant to Rule 59 of the Federal Rules of Civil Procedure. In this motion, Paragon raises three grounds on which its asserts it is entitled to relief from the judgment in this case. First, Paragon contends that it is entitled to a modification of the judgment or a new trial because the Lawson patent is invalid in light of newly discovered evidence. Second, it argues that newly discovered evidence creates a material issue of fact as to its antitrust counterclaim. Finally, Paragon asserts that this Court should set aside its ruling on the validity of the Lawson patent based on evidence that was inadvertently omitted from the record in this case.

I.

Rule 59(a) of the Federal Rules of Civil Procedure permits a party to seek relief from a judgment after its entry via a motion for a new trial or a motion to alter or amend the judgment. The decision on whether or not to grant Rule 59 relief rests within the sound discretion of the trial court. See, e.g., Allied Chem. Corp. v. Daiflon, Inc., 449 U.S. 33, 36, 101 S.Ct. 188, 66 L.Ed.2d 193 (1980). There is no fixed standard that applies to review a Rule 59 motion. 12 James Wm. Moore, Moore's Federal Practice § 59.13[1] (3d ed.1998). The standard instead varies depending upon the grounds on which Rule 59 relief is sought. Id.

The grounds for granting a motion for new trial or to alter or amend the judgment include the availability of newly discovered evidence and the need to correct clear error of law or to prevent manifest injustice. Compass Tech., Inc. v. Tseng Laboratories, Inc., 71 F.3d 1125, 1130 (3d Cir.1995); North River Ins. Co. v. CIGNA Reinsurance Co., 52 F.3d 1194, 1218 (3d Cir.1995); Mobil Oil Corp. v. Amoco Chemicals Corp., 915 F.Supp. 1333, 1377 (D.Del.1994). When a Rule 59 motion for a new trial is premised on newly discovered evidence, the burden is on the movant to demonstrate that the new evidence (1) is material and not merely cumulative; (2) could not have been discovered before trial through the exercise of reasonable diligence and (3) would probably have changed the outcome of the trial. Compass Tech., 71 F.3d at 1130.¹

A Rule 59 motion may not be used as a vehicle to advance additional arguments that a party could have made before judgment but neglected to do so. Mobil, 915 F.Supp. at 1377. As this Court opined:

Unless the court finds that it would be unjust to enforce the decision rendered, a party will not be permitted to reopen a case for the purpose of introducing evidence to meet the issues raised at trial, when that evidence was available and known to the party at the time of trial. Similarly, a party which has litigated the case under one legal theory generally should not be permitted to reopen in order to introduce evidence in support of another legal theory, or in support of issues not raised by that party at trial. If the party had an opportunity to litigate those issues, but chose not to, it should not be permitted to prolong the litigation any further. Otherwise, no litigation would end, so long as a creative attorney could develop alternative theories of relief.

Bell Tel. Laboratories, Inc. v. Hughes Aircraft Co., 73 F.R.D. 16, 20 (D.Del.1976) (citations omitted), aff'd 564 F.2d 654 (3d Cir. 1977).

II.

A.

In its first argument in support of its motion, Paragon asserts that the Court should reconsider its conclusion that the Lawson patent is not invalid pursuant to 35 U.S.C. § 102(g), in light of newly discovered evidence. At trial, Paragon contended that a patent application and invention disclosure of Kenneth Enloe, an inventor working for a competitor of the parties, constitutes a prior invention which anticipates the Lawson patent under section 102(g).² The Court held that Paragon failed to establish anticipation by prior invention, finding that Paragon had not demonstrated by clear and convincing evidence that Mr. Enloe did not abandon, suppress, or conceal his prior invention. Paragon asserts that this conclusion is rendered fundamentally flawed by the issuance of Enloe United States Patent No. 5,599,338 (the "'338 patent") on February 4, 1997, the second day of the trial in this action. Paragon argues that the Court should modify its judgment or grant a new trial on this issue because the '338 patent refutes the conclusion that Mr. Enloe abandoned, suppressed, or concealed his prior invention.

The Lawson patent, entitled "Absorbent Article Having Dual Cuffs," describes an integral or unitary disposable absorbent article, such as a diaper, consisting of five elements, a liquid pervious topsheet, a liquid impervious backsheet, an absorbent core, an elastically contractible gasketing cuff, and a barrier leg cuff ("BLC"). Procter & Gamble Co. v. Paragon Trade Brands, 989 F.Supp. 547, 563 (D.Del.1997) [hereinafter P & G].³ The concept of using a second leg cuff, the BLC, to enhance the containment characteristics of a diaper forms the basis of the Lawson patent. Id. at 562. The specification of the Lawson patent describes a variety of materials that can be used for the BLC, but indicates that, in its preferred form, the BLC is made using a "liquid impermeable" material. Id. at 564. Each of the Lawson claims at issue requires the BLCs to be liquid impermeable. Id.

As the Court noted in its December 30, 1997 Opinion in this case, Mr. Lawson was not alone in deciding to use a second barrier cuff to improve the containment properties of a diaper. Kenneth Enloe also experimented with adding a BLC. Unlike Mr. Lawson, however, Mr. Enloe opted to use a liquid pervious material to form the BLCs and obtained United States Patent No. 4,704,116 (the "'116 patent") for this innovation. See id. at 583-84. There is no dispute that the '116 patent constitutes prior art and discloses each of the elements contained in the Lawson claims at issue, with the exception of the liquid impermeable limitation on the material used to form the BLCs.

Mr. Enloe obtained the '116 patent on his second patent application. See [Plaintiff's Trial Exhibit ("PTX") 28]. Paragon premises its section 102(g) argument on Mr. Enloe's initial patent application and initial invention disclosure. In his initial invention disclosure, Mr. Enloe indicated that a liquid impervious material could be used to form the BLC, even though other types of materials are preferred. See P & G, at 584. Although Mr. Enloe's initial patent application did not claim a specific embodiment employing liquid impermeable BLCs, it did contain a generic BLC claim, i.e., a claim which did not limit the type of material to be used to form the BLCs. See id. at 584-85. The patent examiner rejected this claim, as well as several others, as being anticipated by U.S. Patent No. 4,490,148 to Beckestrom. See id.

Upon rejection of these claims, Mr. Enloe abandoned his initial patent application, opting not to appeal his case or argue the rejection, or amend the rejected claims. See id. at 585. Mr. Enloe instead filed a new patent application, which ultimately resulted in the issuance of the '116 patent. See id. Mr. Enloe's new application did not include a generic...