Standard Brands v. Federal Yeast Corporation

• Decision Date: 10 February 1930
• Docket Number: No. 364.,364.
• Citation: 38 F.2d 314
• Parties: STANDARD BRANDS, Inc., v. FEDERAL YEAST CORPORATION.
• Court: U.S. District Court — District of Maryland

38 F.2d 314 (1930)

STANDARD BRANDS, Inc., v. FEDERAL YEAST CORPORATION.

No. 364.

District Court, D. Maryland.

February 10, 1930.

F. P. Warfield, L. A. Watson, and C. V. Johnson, all of New York City, and Warfield & Watson, of New York City, for plaintiff.

Howson & Howson, of Philadelphia, Pa., for defendant.

SOPER, District Judge.

United States patent 1,449,103 to Hayduck, covering a process for making bakers' yeast, having been held valid and infringed in this court and on appeal 8 F.(2d) 186; (C. C. A.) 13 F.(2d) 570, Raymond S. Williams was appointed special master at the request of the parties to ascertain the profits and damages payable by the defendant. Before the master's report was filed, a second suit by plaintiff against defendant was filed and heard upon three other patents involving yeast processes of the same inventor, to wit, United States patents 1,449,102, 1,449,105, and 1,449,106, referred to hereafter as patents 102, 105, and 106, respectively. The opinion of this court in the second suit is filed simultaneously herewith. 38 F.(2d) 329. Standard Brands, Incorporated, has been substituted as plaintiff in both suits. After the master's report in the first case was filed, exceptions thereto came on to be heard; and, in view of the kindred subject-matter of the two cases, it was stipulated that the evidence before the master in the first case, and that before the court in the second, might be used interchangeably in either case.

The evidence before the master was voluminous. It related, not merely to questions of damages and profits, but also to questions of infringement of considerable difficulty and complexity, which have been handled by the master with painstaking care and skill in a lengthy report of 200 pages. It is summarized with some discussion of the important controverted questions in the following opinion:

The accounting period runs from March 20, 1923, on which date patent 103 was issued, to July 26, 1926. The evidence at the trial of the case in the District Court showed that the defendant was making use of a mash for the production of yeast, described as an all-molasses mash, which comprised beet molasses, ammonium phosphate, an inorganic salt, and aqua ammonia, a neutralizing agent. On September 10, 1923, the defendant had filed answers to certain interrogatories which showed that the only process of the defendant in which molasses was employed in whole or in part was the all-molasses process thus described. Shortly thereafter, however, to wit, in the month of October, 1923, the defendant began the use of a mash of a different kind, which has been referred to in the accounting proceedings as a mixed mash, consisting partly of molasses and partly of grain, in addition to inorganic ammonium salts and a neutralizing agent. Subsequently, to wit, on February 4, 1924, the defendant began the use of an all-grain mash without any molasses, together with inorganic ammonium salts and a neutralizing agent. During the accounting period the defendant made approximately 2,000,000 pounds of yeast by the all-molasses process, 1,650,000 pounds of yeast by the mixed grain process, and 72,000 pounds of yeast by the all-grain process.

It thus appears that a considerable period elapsed between the adoption by the defendant of the mixed and the all-grain processes and the trial of the case before the District Court; but the employment of these two processes was not divulged at the trial. Consequently the attention of the court was limited to the all-molasses process, which was admitted by the defendant to infringe patent 103, and the controversy before the court was confined to the charge that the patent was invalid. Before the master, the defendant contended that patent 103 is limited in scope to mashes of raw or refined sugar or molasses, as sugar material, exclusive of grain, and that the mixed and all-grain mashes do not infringe. This was the first question which the master was called upon to decide. Although it was not a disputed point at the main trial, the court did give some consideration to the scope of the patent, as evidenced by the following quotation:

"It will be observed that patent 103 covers two main steps: (1) The employment of a nutrient solution containing essentially sugar material and yeast-nourishing inorganic salts; and (2) the neutralization of the excess of acidity during the period of propagation. As to the first step, it is clear that the claims of the patent are very broad. Molasses is mentioned in claims 12, 13, and 14, as a suitable source of sugar, and the specification, in its technical formula, includes salts of ammonium, phosphorus, potassium, calcium, and magnesium among inorganic salts to be used in the solution. It is clear, however, that the phrase `essentially sugar material' is not confined to molasses, but includes raw and refined sugar, and other sugar-containing materials, and that the phrase `yeast-nourishing inorganic salts' is comprehensive, and is not confined to the particular salts named." 8 F.(2d) 186, 189.

It is not necessary to decide whether, by reason of this decision, the question under discussion is res adjudicata. The master reached the conclusion that the scope of the patent is broad enough to include the mashes which have been described, and the court is of the opinion that this decision was correct for the reasons which will be now outlined.

Speaking broadly, the defendant's contentions are twofold: (1) That from the terms of patent 103, it is apparent that the inventor intended to limit the scope of the patent to mashes containing either sugar, as such, or molasses, and that the patent was granted by the Patent Office on this theory; (2) that there can be no infringement of the patent by mixed and all-grain mashes, because in the employment of this material, deleterious mineral acid is not created, and hence there is no occasion for the neutralization of excess mineral acidity during the period of propagation.

In order to sustain the first branch of its argument, defendant endeavored to show that the mash covered by patent 103 is the same as is contemplated in patent 102, that the latter mash is confined to raw or refined sugar, together with inorganic salts, and that the only difference between the patents is that patent 102 depends upon high dilution of the nutrient solution, whereas patent 103 depends upon neutralization to overcome the deleterious excess of acidity. The specification of patent 103 refers to the German patent 300,663, and the corresponding copending application in the United States Patent Office for patent 102, and declares that, in the production of yeast, in accordance with that process, there takes place in solutions of sugar and inorganic salts a considerable increase in the acid content. Specification 103 further declares, as its disclosure, that high yeast yields are obtained in the use of solutions containing sugar and mineral salts, in accordance with the process of patent 102, if the acid components set free are neutralized. From these expressions the defendant infers that Hayduck contemplated the same kind of wort in both patents, and then contends that in patent 102 Hayduck did not intend to cover cereal worts, but only such as contain raw or refined sugar, as such, as distinguished from the sugar from the saccharified starch of grain, supplying the deficiency of organic nitrogen by an addition of large amounts of inorganic ammonium salts.

In support of this argument, the defendant points out certain statements in the specification of patent 102 wherein Hayduck seemed to draw a contrast between the known practice of adding inorganic salts to cereal worts, on the one hand, and his discovery on the other that yeast might be made from raw or refined sugar; all other nourishment being of a purely inorganic character. Thus he said that it was well known that inorganic salts might be added to the usual cereal worts for the better nourishment of the yeast, that yeast had been made in the laboratory from solutions which contained, besides sugar, only inorganic salts as nutriment, and that it had also been proposed to make yeast industrially from waste sulphite liquor (obtained in the manufacture of cellulose), with an addition of inorganic salts as shown by the United States patent to Willcox No. 1,044,615. Moreover, Hayduck confined his illustrative examples in patent 102 to raw or refined sugar as sources of sugar material. The claim of the German patent, corresponding to patent 102, is restricted to a process of yeast manufacture "by the use of sugar and purely mineral nutritive salts." In short, the defendant contends that Hayduck intended by patent 102 to disclose that it was possible to vary the known processes which involved the use of grain as sources of both sugar and nitrogen, and to substitute therefor a mash in which sugar as such was used as an ingredient, while other necessary ingredients, nitrogen, phosphorus, etc., were supplied entirely from inorganic salts.

On the other hand, it is the plaintiff's opinion that patent 102 is not so restricted. The references in the specification to solutions consisting only of sugar and inorganic salts are said to represent the extreme case which tests the efficiency of the invention, and the patentee intended to say that, having solved this major difficulty, it was obvious that his process would work under the less severe conditions of a mash consisting partly of sugar and partly of grain. Sugar was not the only substance in addition to salts mentioned in the patent. Raw sugar was expressly specified, and this substance contains at least 15 per cent. of molasses. Furthermore, claim 3 of the patent expressly declared that the yeast nutrient solution should be exclusive of cereal material, and, since this excepting clause was omitted from the other claims, it is fair to infer that cereal material was included therein. All of the claims used the...