Standard Brands v. National Grain Yeast Corp.

• Decision Date: 01 February 1939
• Docket Number: No. 6651,6670.,6651
• Citation: 101 F.2d 814
• Parties: STANDARD BRANDS, Inc., v. NATIONAL GRAIN YEAST CORPORATION. NATIONAL GRAIN YEAST CORPORATION v. STANDARD BRANDS, Inc.
• Court: U.S. Court of Appeals — Third Circuit

101 F.2d 814 (1939)

STANDARD BRANDS, Inc., v. NATIONAL GRAIN YEAST CORPORATION.^* NATIONAL GRAIN YEAST CORPORATION v. STANDARD BRANDS, Inc.

Nos. 6651, 6670.

Circuit Court of Appeals, Third Circuit.

February 1, 1939.

Watson, Bristol, Johnson & Leavenworth, of New York City (L. A. Watson and C. V. Johnson, both of New York City, of counsel), for plaintiff-appellant.

Stephen H. Philbin and Paul R. Ames, both of New York City, and Walter G. Winne, of Hackensack, N. J., for defendant-appellant.

Before BIGGS, Circuit Judge, and DICKINSON and MARIS, District Judges.

BIGGS, Circuit Judge.

There are two appeals in the case at bar. The original suit was brought by Standard Brands, Incorporated, plaintiff-appellant in No. 6651 and plaintiff-appellee in No. 6670, vs. National Grain Yeast Corporation, defendant-appellee in No. 6651 and defendant-appellant in No. 6670. For the sake of clarity in this opinion we will not make use of the words appellant and appellee but will refer to Standard Brands, Incorporated, and National Grain Yeast Corporation. The bill of complaint alleges that Friedrich Hayduck was the first, original and sole inventor of certain new and useful improvements in the process for the manufacture of compressed yeast and the product described and claimed in United States Patent No. 1,449,103, issued March 20, 1923, and that he was also the inventor of certain new and useful improvements in a low-alcohol yeast process described and claimed in United States Patents Nos. 1,449,105, 1,449,106 and 1,449,109, issued upon March 20, 1923; that Robert L. Corby and Wilhelm H. Bührig were the first, original and joint inventors of certain new and useful improvements in a process for the manufacture of yeast described and claimed by them in United States Patent No. 1,673,735, issued upon June 12, 1928; that all the rights of the named individuals in these respective patents were assigned to Standard Brands, Incorporated; and that National Grain Yeast Corporation has infringed and is now infringing these patents.

To the bill of complaint National Grain Yeast Corporation filed an answer denying the validity of the patents and denying infringement. We conceive that the questions presented may be disposed of most expeditiously by treating the patents separately, but before embarking upon this separate treatment we think that we should state that the learned District Judge found Hayduck Patent No. 1,449,103 to be valid and found it to be infringed by one of the processes used by National Grain Yeast Corporation which may be described for the sake of brevity as the aqua ammonia process. The District Judge found that Hayduck Patent No. 1,449,105 was invalid because of indefiniteness and therefore made no finding as to its infringement. He found that Hayduck Patent No. 1,449,106 was invalid because it consisted of a combination of the processes disclosed by Hayduck No. 1,449,103 with Hayduck No. 1,449,105, and that since the latter patent was invalid its combination with a valid patent added nothing to the art of making yeast. The District Court made no finding as to infringement in respect to the patent last named. The District Judge also held that Hayduck Patent No. 1,449,109 was invalid in that it added nothing to the art beyond Hayduck No. 1,449,103, but made no finding as to the infringement of this patent. He held Corby and Bührig Patent No. 1,673,735 invalid for want of patentable novelty and made no finding as to its infringement.

Standard Brands, Incorporated, appeals from a decree of the District Court embodying the findings set forth in the previous paragraph of this opinion, except in so far as it holds Hayduck Patent No. 1,449,103 valid and infringed, grants an injunction and directs an accounting. National Grain Yeast Corporation appeals from that part of the decree of the District Court holding the claims in controversy of Hayduck Patent No. 1,449,103 to be valid and infringed, granting an injunction and directing an accounting and a recovery by Standard Brands, Incorporated. These appeals frame the issues before us.

For the purpose of brevity we will refer to the Hayduck patents hereafter by the last three numerals of the respective patent numbers. Hayduck -103 was held valid and infringed by the District Court of Maryland in Fleischmann Yeast Co. v. Federal Yeast Corporation, 8 F.2d 186, and this holding was affirmed by the Circuit Court of Appeals for the Fourth Circuit in 13 F.2d 570. Hayduck Patents -105 and -106 were held valid and infringed by the District Court of Maryland in Standard Brands, Incorporated, v. Federal Yeast Corporation, 38 F.2d 329. No appeal was taken to the Circuit Court of Appeals for the Fourth Circuit in the cited case.

Though these decisions are entitled to great weight the adjudications contained therein on the matters here in controversy are not binding upon us, and our decision, as was that of the District Judge below, must be based upon our independent judgment upon the questions, presented. New York Scaffolding Co. v. Liebel-Binney Co., 254 U.S. 24, 41 S.Ct. 18, 65 L.Ed. 112; Mast, Foos & Co. v. Stover Manufacturing Co., 177 U.S. 485, 20 S.Ct. 708, 44 L. Ed. 856; Sanitary Refrigerator Co. v. Winters, 280 U.S. 30, 50 S.Ct. 9, 74 L.Ed. 147.

As to Hayduck Patent No. 1,449,103.

Claims 1 to 4, inclusive, and 7 to 15, inclusive, of this patent are alleged to be infringed by National Grain Yeast Corporation. As we have stated, the learned District Judge held all of the claims referred to as valid. If they are valid one of the processes used by the National Grain Yeast Corporation, viz., the process which we have described heretofore as the aqua ammonia process, infringes the patent. The court below, referring to the decisions of the District Court of Maryland and that of the Circuit Court of Appeals for the Fourth Circuit, supra, stated, "A study of the opinions in the foregoing cases, coupled with a study of the prior state of the art, including the additional matter introduced here, again leads to the conclusion that this patent is valid for the reasons set forth in the aforesaid opinions, and nothing which has been introduced here tends to change that result." 21 F.Supp. 46.

At this point we deem it necessary to make a brief statement of certain matters relating to the prior art. The art of manufacturing yeast is a very old one. Stating its principle in simplest terms, it consists of putting seed yeast into a nutrient solution which it devours and in which it propagates itself by budding. Yeast feeds upon sugar, making use of the carbon, nitrogen and other elements contained therein. Originally nutrient solutions were prepared by souring cereals with water in souring tanks, such cereals including corn, rye, barley and malt, all of which are organic materials as distinguished from inorganic materials. As the souring process continued in the souring tank and the materials contained therein tended to become homogeneous, the solution became slightly acid by reason of the creation of lactic acid. When the souring process had continued sufficiently, the nutrient solution or wort thus attained was drained off and put with the seed yeast into the fermenting tank where the actual propagation of yeast from the seed yeast took place. In later years, particularly during the course of the World War which required conservation of grains, molasses was used as the source of sugar in the making of nutrient solutions in lieu of cereals. In 1919 inorganic salts capable of nourishing yeast were used in place of organic nitrogenous materials. This forward step in the art properly may be described as revolutionary. Judge Soper, in Fleischmann Yeast Co. v. Federal Yeast Corporation, supra, so described it. With comparatively immaterial changes this method of producing nutrient solutions is substantially that used today.

We should state that the patent under discussion does not claim the method of producing nutrient solutions by the use of molasses and yeast nourishing inorganic materials. There is no patentable novelty in making use of such materials for the creation of nutrient solutions. Hayduck does not make such a claim.

The prior art makes plain that nutrient solutions must be slightly acid in order to stimulate the growth of the yeast and to prevent the formation of harmful bacteria or fungi. Nutrient solutions must not be too acid, however. The "new" process (called such to distinguish it from that which was very old in the art) of using inorganic yeast nourishing materials, such as ammonium sulphate, heightens the problem of acidity. If ammonium sulphate is used with molasses in a nutrient solution, as the yeast eats into it sulphuric acid is released and causes harmful acidity in the nutrient solution itself. Neither the problem of acidity nor its solution, as we will show hereafter, was new to the art. Nor did acidity result only when inorganic yeast nourishing salts were employed in the nutrient solution. As we have stated, when organic materials such as cereals were soured in the souring tank lactic acid was formed. An examination of the record, however, convinces us that the problem of excessive acidity caused comparatively little concern to manufacturers of yeast prior to the use of inorganic yeast nourishing salts which increased that acidity.

In the specification of the patent under consideration Hayduck states, "I have now discovered that unexpectedly high yeast yields are obtained when conducting the nutrition of the yeast with the use of solutions containing sugar and yeast-nutrient inorganic salts * * * if the acid components referred to as being set free during the yeast propagation and growth are neutralized either entirely or to such an extent that they no longer affect the yeast unfavorably. For such neutralization of the acid components, calcium carbonate may suitably be employed, but other basic or antacid substances such as antacid substances containing...