Rohm & Haas Co. v. Crystal Chemical Co.

• Citation: 722 F.2d 1556,220 USPQ 289
• Decision Date: 07 December 1983
• Docket Number: No. 83-599,83-599
• Parties: ROHM AND HAAS COMPANY, Appellee, v. CRYSTAL CHEMICAL COMPANY and Joe C. Eller, Appellants. Appeal
• Court: U.S. Court of Appeals — Federal Circuit

Page 1556

722 F.2d 1556

220 U.S.P.Q. 289

ROHM AND HAAS COMPANY, Appellee, v. CRYSTAL CHEMICAL COMPANY and Joe C. Eller, Appellants.

Appeal No. 83-599.

United States Court of Appeals, Federal Circuit.

Dec. 7, 1983.

Ned L. Conley, Houston, Tex., argued for appellants; With him on brief were William E. Shull, Jon E. Hokanson and Jeffrey W. Tayon, Houston, Tex.

Rudolph E. Hutz, Wilmington, Del., argued for appellee; With him on brief were Januar D. Bove, Jr., F.L. Peter Stone and Jeffrey B. Bove, Wilmington, Del.; George W.F. Simmons, Philadelphia, Pa., of counsel.

Before RICH, KASHIWA, MILLER, SMITH, and NIES, Circuit Judges.

RICH, Circuit Judge.

This patent appeal is from the October 27, 1982, judgment of the United States District Court for the Southern District of Texas. Sitting without a jury, it held claims 1-3, 6, and 8-12 of U.S. Patent No. 3,816,092 (RH patent or Wilson patent), issued June 11, 1974, to Rohm and Haas (RH or R & H) as assignee of the inventors, for "Herbicidal 3,1-dichloroanilides," valid and infringed by Crystal Chemical Co. and Joe C. Eller (collectively Crystal). ¹ Because R & H intentionally made material misrepresentations to the U.S. Patent and Trademark Office (PTO) the effects of which were not eliminated prior to issuance, we reverse the district court's holding that there was no fraud and remand the case for reconsideration in light of our decision that the Wilson patent is invalid.

The extensive opinion of the district court is reported at 557 F.Supp. 739-85, 217 USPQ 515-603 and familiarity with the procedural history and substantive background of this dispute as therein set forth will be presumed. We find it necessary at this juncture to discuss only the issue of fraud as it affects patent validity.

The Fraud Issue

A. Disposition by the District Court

Of 220 Findings of Fact, the district court made the following 19 findings with respect to Crystal's claim that the RH patent was procured with affidavits furnished to the PTO containing misleading, falsified, and misrepresented data. Each of these findings appears under the district court's subheading "6. Renewed Prosecution of the 1961 Application." 557 F.Supp. at 774, 217 USPQ at 541. We summarize them as follows, adding some pertinent comments and giving their USPQ locations and finding of fact numbers:

1. On February 16, 1973, RH held an "extensive interview" with patent examiner Thomas, after intensive preparation "to identify areas of potential interest to the patent examiner and to collect and organize documents in logical sequence." Representatives of both the Department of Justice 2. Thomas had been responsible for declaring Interference 93,751 among Monsanto, RH, and Bayer, and rendered the decisions on motions during the motion period. Finding 109 at 557 F.Supp. 775, 217 USPQ 542.

which was investigating Monsanto in connection with Monsanto's fraud in the PTO, and the PTO Solicitor's Office, were invited to attend, as was Mr. Irving Marcus who was chief of the examining group. Only Thomas was present throughout the interview. Marcus was present at the beginning and remained available for consultation if serious questions arose. Finding 108 at 557 F.Supp. at 775, 217 USPQ 541-42. In its brief, RH stated that, on calling Mr. Marcus to arrange an interview, "Mr. Marcus suggested that the Solicitor's Office might wish to attend the interview, and invitations were extended to the Solicitor's Office, the Justice Department, and Mr. Marcus."

3. At the time of renewed prosecution, Thomas was a primary examiner. Since 1956 he had examined applications dealing with herbicides, he was the recognized PTO herbicide expert, in 1973 he had 8 or 10 other pending applications dealing with the same subject matter as RH's 1961 application, he was well aware of the herbicidal activity of propanil and related compounds, he was familiar with the review and interpretation of herbicidal data sheets, and he was familiar with the prior art. Finding 110 at 557 F.Supp. at 775, 217 USPQ 542.

4. During the interview, documents were spread out for ease of reference on conference room tables. Thomas brought the RH prosecution files with him and indicated that he had reviewed them prior to the interview. Finding 111 at 557 F.Supp. 775-76, 217 USPQ 542.

5. During the interview, RH summarized and explained key events of prior proceedings including, but not limited to, the interference and the Monsanto litigation. RH left Thomas copies of trial court and appellate opinions, RH's appellate brief, and all four volumes of the appendix before the Third Circuit in the Monsanto case (the appendix being marked for items that might be of particular interest to Thomas). Thomas stated that he intended to review these items after the interview. Finding 112 at 557 F.Supp. 776, 217 USPQ 542.

6. On returning these documents several weeks later, Thomas stated that he had reviewed the pertinent parts. Finding 113 at 557 F.Supp. 776, 217 USPQ 542.

7. RH's discussion of the Monsanto litigation and its disclosure of Monsanto's contention that RH had withheld herbicidal data from the PTO, together with its counsel's notation to Thomas of the trial court's comment that "Monsanto and Rohm and Haas were equally disingenuous with respect to the comparison of the herbicidal effects of DCAA and DCPA in their applications to the Patent Office," alerted Thomas to the importance of the comparative data. Only the testimony of McRae, one of the inventors, and of Hutz, RH's lead counsel, is cited in support of this finding. Finding 114 at 557 F.Supp. 776, 217 USPQ 543.

8. Hutz and McRae also brought a "substantial number of documents" called the "500,000 series" documents. The court found that although Hutz repeatedly offered to file the documents with the PTO, Thomas elected to have them remain with RH. Finding 115 at 557 F.Supp. 776, 217 USPQ 543.

9. RH also discussed with Thomas the prior art that had been raised during prosecution of the RH applications, the prior art relied on by RH in the Monsanto litigation, and the prior art that had been cited against Monsanto during prosecution of its application. Finding 116 at 557 F.Supp. 776-77, 217 USPQ 543.

10. In preparation for the interview, RH collected all records available to it reflecting herbicidal test data on propanil and related compounds regardless of whether the related compounds were prior art. These were the "500,000 series" documents. The identity of the compounds for which data existed was brought to Thomas' attention. Finding 117 at 557 F.Supp. 777, 217 USPQ 544.

11. These data were used to prepare several affidavits that had been filed in the PTO 12. Thomas was told that RH had been unable to locate all the test data in its records corresponding to data recited in the affidavits filed with the PTO, and that there were data in its records that had not been initially reported to the PTO during the prior prosecution. Finding 119, at 557 F.Supp. 778, 217 USPQ 544.

                during prosecution of the 1958, 1960, and 1961 applications.  "To the extent that such base records could be reconstructed, they were identified, keyed to the prior affidavits, compared side by side with each of the affidavits and discussed with" Thomas.  RH "did not limit its disclosures to [Thomas] to tests from which affidavit data had been taken.  Instead, it supplied all data available to it on related compounds."    Finding 118 at 557 F.Supp. 778, 217 USPQ 544
                

13. Test data specifically identified and discussed indicated that propanil was not unique as a pre-emergence or general herbicide, that propanil damages some crops, that related compounds displayed relatively high herbicidal activity, and that related compounds like DCAA and DCMVA possessed some selective, post-emergence herbicidal activity. Finding 120, at 557 F.Supp. 778, 217 USPQ 544.

14. Even though all data on propanil's herbicidal activity were not discovered by RH, "a search for all of such data was conducted." Finding 121, at 557 F.Supp. at 778, 217 USPQ at 544.

15. The interview lasted about 2 1/2 hours, which is "considerably longer than normal interviews." Finding 123 at 557 F.Supp. 778, 217 USPQ 545.

16. Following the interview, RH filed an amendment summarizing the interview. It offered again to supply more information and copies of any document discussed. Finding 124, at 557 F.Supp. at 778-79, 217 USPQ at 545.

17. At the conclusion of the interview, RH was of the good faith belief that Thomas appreciated the information supplied and its implications. He was again reminded of these disclosures at a subsequent interview, and he told RH that he was fully satisfied and required no further information. Finding 125, at 557 F.Supp. 779, 217 USPQ 545.

18. Regarding the affidavits relied on by RH during prosecution: "As defendants argued and as plaintiff has admitted, at the time the six allegedly defective affidavits were submitted on the Patent Office, all of the test data were not disclosed in the affidavits." The employee who prosecuted the application and decided which data to submit died before its issuance, and "the reason behind his actions were not disclosed during the trial * * * and it has been represented to this Court that such motives, if any, are not known." Although not wholly a finding of fact, the court also here stated: "What is important to this Court's inquiry into the validity of Rohm and Haas' patent in light of defendants' fraud allegations is the fact that McRae, the person who executed but did not prepare the affidavits, believed such affidavits and the assertions contained in such affidavits to be accurate." ² RH informed Thomas of the omissions of test data from the affidavits and supplied to the extent possible the omitted data and all other herbicidal data in RH's possession. "Consequently, the Court is of the belief that all of the deficiencies which existed in the prosecution of the three Rohm and Haas patent applications...