Quad Environmental Technologies Corp. v. Union Sanitary Dist.

• Decision Date: 08 October 1991
• Docket Number: No. 91-1027,91-1027
• Citation: 20 USPQ2d 1392,946 F.2d 870
• Parties: QUAD ENVIRONMENTAL TECHNOLOGIES CORPORATION, Plaintiff-Appellant, v. UNION SANITARY DISTRICT, and A.P.T., Inc., a California Corp. d/b/a Calvert Environmental, Inc., Defendants-Appellees.
• Court: U.S. Court of Appeals — Federal Circuit

Page 870

946 F.2d 870

20 U.S.P.Q.2d 1392

QUAD ENVIRONMENTAL TECHNOLOGIES CORPORATION, Plaintiff-Appellant, v. UNION SANITARY DISTRICT, and A.P.T., Inc., a California Corp. d/b/a Calvert Environmental, Inc. Defendants-Appellees.

No. 91-1027.

United States Court of Appeals, Federal Circuit.

Oct. 8, 1991.

Suggestion for Rehearing In Banc

Declined Dec. 13, 1991.

Alan E.J. Branigan, Griffin, Branigan & Butler, of Arlington, Virginia, argued for plaintiff-appellant. With him on the brief was George C. Kurtossy, Arlington, Va. Also on the brief were Neil A. Smith and Virginia S. Medlen, Limbach, Limbach & Sutton, San Francisco, Cal., of counsel.

Charles A. Laff, Laff, Whitesel, Conte & Saret, Chicago, Ill., argued for defendant-appellee. With him on the brief were Robert F.I. Conte, William P. Waters, Judith L. Grubner and John T. Gabrielides, Chicago, Ill. Also on the brief were Thomas O. Herbert and Richard P. Doyle, Flehr, Hohbach, Test, Albritton & Herbert, San Francisco, Cal., of counsel.

Before NEWMAN and PLAGER, Circuit Judges, and MILLER, Senior Circuit Judge.

PAULINE NEWMAN, Circuit Judge.

Quad Environmental Technologies Corporation appeals the summary judgment of the United States District Court for the Northern District of California, holding all the claims of the patent in suit invalid on the basis of obviousness. ¹ The district court did not reach the issues of infringement and inequitable conduct, deeming them mooted.

We conclude that summary judgment was improvidently granted, based on errors of law. Since material disputed facts require resolution, we reverse the grant of summary judgment and remand for trial.

Summary Judgment

The process of summary judgment is a salutary means of avoiding an unnecessary trial when the movant is clearly entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247, 106 S.Ct. 2505, 2509-10, 91 L.Ed.2d 202 (1986); Celotex Corp. v. Catrett, 477 U.S. 317, 322-23, 106 S.Ct. 2548, 2552, 91 L.Ed.2d 265 (1986). The burden of establishing entitlement to summary disposition is with the movant, with due consideration to the presumptions and burdens that characterize the issues in dispute. Anderson, 477 U.S. at 254, 106 S.Ct. at 2513; H.H. Robertson Co. v. United Steel Deck, Inc., 820 F.2d 384, 388, 2 USPQ2d 1926, 1928 (Fed.Cir.1987). The reviewing court must determine for itself whether the requirements for summary judgment were met. Id.

When the issue is patent invalidity due to obviousness, 35 U.S.C. § 103, the movant must overcome the statutory presumption of validity, 35 U.S.C. § 282, by proving obviousness by clear and convincing evidence based on undisputed facts. All factual inferences must be drawn in favor of the opponent of the motion. Anderson, 477 U.S. at 255, 106 S.Ct. at 2513; Cooper v. Ford Motor Co., 748 F.2d 677, 679, 223 USPQ 1286, 1288 (Fed.Cir.1984). Although patent issues are as amenable to summary resolution as other matters, when material facts are disputed, and testimonial, documentary, and expert evidence are needed for their resolution, summary adjudication is not indicated. Such is here the case.

The Reexamination Proceedings

United States Patent No. 4,238,461 (the '461 patent) was issued December 9, 1980 to inventor Egbert deVries, and assigned to Quad. The '461 patent describes and claims a method of removing odors from dry waste gas streams. Quad requested reexamination of the '461 patent and, concurrently, of an earlier-filed deVries patent on waste treatment, U.S. Patent No. 4,125,589 issued November 14, 1978 (the '589 patent). The '589 patent describes and claims a method of removing odors from wet waste gas streams.

The patent examiner granted Quad's reexamination request as to the '461 patent and denied the request as to the '589 patent. By granting reexamination the examiner determined, in the words of 35 U.S.C. § 303, that "a substantial new question of patentability" was raised. ² The Reexamination Order cited certain new references under 35 U.S.C. § 103. The Order also stated that the '589 patent was a reference against the '461 invention under 35 U.S.C. § 102(a) ³ and raised new questions under "both 35 U.S.C. 103 and the judicially-created doctrine of obvious [type] double patenting".

Quad responded to the Reexamination Order pursuant to 35 U.S.C. § 304, ⁴ and filed proposed amendments to some of the claims, to distinguish the newly cited references. Quad argued that the '461 invention was not obvious from the teachings of the '589 patent, pointing out technological differences. In order to "obviate" the issue of obvious-type double patenting Quad filed a terminal disclaimer, disclaiming that portion of the term of the '461 patent which extended beyond the expiration date of the '589 patent. ⁵

The examiner held that the terminal disclaimer resolved the issue of obvious-type double patenting. The examiner also stated that he had been in error in deeming the '589 patent to be prior art against the '461 invention, since the '589 patent was filed by the same inventor less than one year before the filing date of the '461 patent. See In re Katz, 687 F.2d 450, 454, 215 USPQ 14, 17 (CCPA 1982). The '589 patent thus had no further role in the reexamination. The merits of the question of obviousness of the '461 claimed invention over the '589 patent's teachings were not decided during the reexamination proceedings.

After additional exchanges between the applicant and the examiner, not here relevant, all objections were withdrawn. One claim of the '461 patent was cancelled and other claims were added or amended. A Reexamination Certificate was issued, affirming patentability of the claims in the form resulting from reexamination.

The District Court Proceedings

Quad sued Union Sanitary District and its supplier A.P.T., Inc. d/b/a Calvert Environmental, Inc. (collectively herein "Union") for direct and contributory infringement of the reexamined '461 patent. The district court granted Union's motion for summary judgment of invalidity for obviousness under 35 U.S.C. §§ 102(b)/103. The motion was based on Quad's pre-trial stipulation that the invention of the '589 patent was in commercial use at the Montfort Packing Company plant in 1977, and that this process ("the Montfort process") was prior art against the '461 patent.

The district court did not review whether the Montfort process made obvious the invention of the '461 patent. The court held, instead, that Quad's filing of the terminal disclaimer to obviate the double patenting issue was an admission that the '461 patent claims were obvious in view of the '589 patent disclosure. The court thus held that Quad was estopped from arguing that the '461 claims were unobvious in view of the Montfort process which, Quad had admitted, embodied the invention of the '589 patent.

The court erred in law, reflecting an apparent misperception of the reexamination proceedings, as well as the premises of a terminal disclaimer.

The Terminal Disclaimer

A rejection for obvious-type double patenting means that the claims of a later patent application are deemed obvious from the claims of an earlier patent. In re Longi, 759 F.2d 887, 893, 225 USPQ 645, 648 (Fed.Cir.1985); In re Braithwaite, 379 F.2d 594, 600, 54 CCPA 1589, 154 USPQ 29, 34 (CCPA 1967). Such situations may arise when developments and improvements are made as the inventor or persons associated with the inventor continue to work in the field of an invention. Voluntary limitation of the term of the later-issued patent is a convenient response to an obvious-type double patenting rejection, when the statutory requirement of common ownership is met. Any possible enlargement of the term of exclusivity is eliminated, while enabling some limited protection to a patentee's later developments.

Only the claims are compared in a rejection for double patenting. Such a rejection by the patent office does not mean that the first-filed patent is a prior art reference under § 102 against the later-filed application. In re Bowers, 359 F.2d 886, 887, 53 CCPA 1590, 149 USPQ 570, 572 (CCPA 1966). Thus the "obviation" of obvious-type double patenting by filing a terminal disclaimer has no effect on a rejection under § 103 based on the first-filed patent. Such a rejection can not be overcome by a terminal disclaimer. Bowers, 359 F.2d at 891 n. 7, 149 USPQ at 575 n. 7. ⁶ A reference patent that is not of common ownership, or a publication or public use or sale more than one year before the filing date of the later-filed application, can not be removed as prior art by the filing of a terminal disclaimer. In re Bartfeld, 925 F.2d 1450, 1453-54, 17 USPQ2d 1885, 1888 (Fed.Cir.1991); In re Fong, 378 F.2d 977, 979-80 n. 1, 54 CCPA 1482, 154 USPQ 25, 27 n. 1 (1967).

Thus, a terminal disclaimer is of circumscribed availability and effect. It is not an admission of obviousness of the later-filed claimed invention in light of the earlier-filed disclosure, for that is not the basis of the disclaimer.

The district court, explaining its decision, referred to two other district court decisions that arose on somewhat similar facts. In Gemveto Jewelry Co. v. Jeff Cooper, Inc., 568 F.Supp. 319, 219 USPQ 806 (S.D.N.Y.1983), on retrial, 694 F.Supp. 1085 (S.D.N.Y.1988), aff'd. mem. 884 F.2d 1399 (Fed.Cir.1989), the district court held that by filing the terminal disclaimer instead of contesting obviousness, the patentee was estopped from contesting obviousness when confronted with a prior sale of the same product that was described and claimed in the earlier-filed patent. The district court found that the prosecution history left "no room to doubt that plaintiff admitted the obviousness of the later patent". 568 F.Supp. at 327, 219 USPQ at 811. In a nonprecedential, unpublished memorandum opinion the Federal Circuit affirmed the district court's judgment. We stress that such unpublished opinions are not to be taken as...