Standard Havens Products, Inc. v. Gencor Industries, Inc.
| Decision Date | 31 December 1991 |
| Docket Number | No. 90-1048,90-1048 |
| Citation | 953 F.2d 1360,21 USPQ2d 1321 |
| Parties | STANDARD HAVENS PRODUCTS, INC., Plaintiff-Appellee, v. GENCOR INDUSTRIES, INC., Defendant-Appellant. |
| Court | U.S. Court of Appeals — Federal Circuit |
Edmund J. Sease, of Zarley, McKee, Thomte, Voorhees & Sease, Des Moines, Iowa, argued, for plaintiff-appellee. With him on the brief were Donald H. Zarley and Kirk M. Hartung.
Donald R. Dunner, of Finnegan, Henderson, Farabow, Garrett & Dunner, Washington, D.C., argued, for defendant-appellant. With him on the brief were Thomas H. Jenkins, Barry W. Graham and Darrel C. Karl. James K. Hammond, of counsel.
Before ARCHER and MICHEL, Circuit Judges, and SENTER, Chief Judge. 1
Gencor Industries, Inc. (Gencor) appeals from a judgment of the United States District Court for the Western District of Missouri, No. 88-1209-CV-W-3, August 8, 1989, holding, inter alia, that: (1) U.S. Patent No. 4,787,938 ('938 patent) is not invalid and was infringed by Gencor; (2) Standard Havens Products, Inc. (Standard Havens) is entitled to damages for patent infringement of $5,931,000; and (3) Standard Havens is entitled to damages of $2,284,000 on its breach of contract claim. We affirm-in-part, vacate-in-part, and remand.
The '938 patent, issued to Michael R. Hawkins on November 29, 1988 and assigned to Standard Havens, is directed to a method of producing asphalt compositions.
Asphalt compositions were often produced in a large horizontal rotating drum. Water-laden aggregate (e.g., crushed rock) was introduced at one end of the drum, was heated and dried by a stream of hot gases produced by a burner flame. The dried aggregate was then combined with liquid asphalt, mineral binder or fines (i.e., crushed materials to impart thickness or body), and in some instances recycled asphaltic material removed from road surfaces, to produce an asphalt composition.
In one method, known as a co-current or parallel flow system, the hot gases produced by a burner flame flowed in the same direction as the aggregate and other ingredients to be mixed to the opposite end of the drum. In another method, styled counter-flow or countercurrent, the aggregate and other ingredients to be mixed flowed in a direction opposite that of the hot gas stream.
In those systems, the asphalt industry faced problems with pollution and product degradation. Exposing the liquid asphalt and recycled asphaltic material to excessive temperatures within the drum or in close
proximity to the burner flame caused serious product degradation and produced hazardous pollutants known as "blue smoke."
Hawkins, in his invention as disclosed in the '938 patent, attempted to solve the product degradation and pollution problems by isolating the liquid asphalt (and recycled asphaltic material, when used) from the radiant heat flux of the burner flame and from the hot gases produced therefrom. He did so by creating within the drum a zone for mixing the aggregate and liquid asphalt (and any other materials to be mixed) and keeping that zone away from the flame and its hot gases. An exterior view (Figure 1) and an interior view (Figure 3) of the Hawkins' drum mixer, as described in the patent specification, follow:
NOTE: OPINION CONTAINS TABLE OR OTHER DATA THAT IS NOT VIEWABLE
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Like much of the prior art, Hawkins' described embodiment uses a rotating, inclined drum for mixing the asphalt composition. Aggregate, delivered at a first end 22, rotates toward the opposite end 36 by force of gravity due to an incline. (The incline is not shown here.) Initially, the aggregate is heated and dried by hot gases in a first zone, to the left of the burner head 46. Then, the aggregate enters a second zone--the annular area to the right of the burner head, particularly past the recycle feed assembly 60 (which allows introduction of recycled asphalt material into the drum) and between the combustion assembly 40 and the drum cylinder 10. In the second zone, aggregate is mixed with hot liquid asphalt and any other needed materials. The hot, mixed asphalt composition is then discharged via a mouth 36.
A gas stream is heated at the burner head and flows in a countercurrent manner through the drum to the first end (where the aggregate is introduced). Figure 3 shows the burner head fed by fuel line 45. The burner head and fuel line are part of the combustion assembly. The combustion assembly also includes a secondary air tube 42 which surrounds the primary tube 44. Fuel and primary air forced by the blower 48 are sent through the primary tube to the burner head. Secondary air, in the space between the primary tube and the secondary air tube (see the arrows in Figure 3), supports combustion at the burner head.
The '938 patent has these four method claims:
1. A method for continuously producing an asphaltic composition from asphalt introducing aggregate material interiorly of a first end of an inclined, horizontal rotating drum to flow generally from said first end to the second end of said drum;
and aggregates, the steps of said method comprising:
generating a hot gas stream within said drum to flow through said drum to said first end in countercurrent relation to said aggregate material;
isolating a zone of said rotating drum from said hot gas stream;
delivering said heated and dried aggregate material to said zone isolated from said hot gas stream;
mixing said aggregate material with liquid asphalt within said zone isolated from said hot gas stream to produce an asphaltic composition; and
discharging said asphaltic composition from said rotating drum.
2. The method as set forth in claim 1, including the step of adding recycle asphalt material directly to said zone isolated from said hot gas stream.
3. The method as set forth in claim 1, including the steps of creating a curtain of falling aggregate material within said rotating drum and flowing said hot gas stream through said curtain of falling aggregate material.
4. The method as set forth in claim 1, including the step of blending a fine binder material with said liquid asphalt and aggregate material within said zone isolated from said hot gas stream.
The contract involved in this case is a nondisclosure agreement for consulting and technical services dated May 13, 1986. Prior thereto, Standard Havens had contacted General Combustion Corporation, a wholly owned subsidiary of Gencor, to obtain consulting services in the design and manufacture of a burner for Standard Havens' proposed counterflow asphalt plant based upon the method described in the Hawkins '938 patent. The nondisclosure agreement required Gencor to maintain as confidential the information obtained from Standard Havens.
Standard Havens initially sued Gencor for breach of the nondisclosure agreement. Gencor counterclaimed, seeking a declaratory judgment that the Hawkins patent was invalid. In response, Standard Havens charged Gencor with contributing to or inducing infringement of the '938 patent, particularly via production of its asphalt-producing "Ultraplant."
Trial was conducted for thirteen days before a jury. The jury answered a special verdict form, finding that the claimed invention was neither anticipated nor would have been obvious, see 35 U.S.C. §§ 102, 103 (1988), that Gencor had contributed to and induced infringement of the '938 patent, and that Standard Havens had been damaged by that infringement in the amount of $5,931,000 (covering sales of ten asphalt plants from the time the patent issued in 1988 until trial in 1989). Regarding the confidentiality agreement, the jury found that a valid contract existed between Standard Havens and Gencor, and that Standard Havens had fulfilled its obligations under the contract, but that Gencor had not fulfilled its obligations. The jury found Standard Havens damaged in the amount of $2,284,000 by breach of the contract, covering sales of five asphalt plants from May, 1986 until the patent issued and the value of lost profits from future parts sales. Judgment, including a permanent injunction, was entered against Gencor on August 8, 1989.
Gencor filed motions for judgment notwithstanding the verdict (JNOV) and alternatively for a new trial contending, inter alia, anticipation and obviousness of the invention in light of two Hepburn patents (U.S. Patent No. 1,774,649 (Hepburn '649) issued in 1930 and U.S. Patent No. 1,836,754 (Hepburn '754) issued in 1931) and contesting the infringement finding and the amount of damages (both patent and contract). In an order dated September 1, 1989, the district court denied both motions.
Shortly before commencement of trial, Standard Havens requested from the United States Patent & Trademark Office (PTO) a Certificate of Correction for the '938 patent. The Certificate was granted on the day trial began and was entered into evidence. It added twelve United States patents to the "References Cited" section of the '938 patent, including the two Hepburn patents mentioned above. After the jury verdict was rendered in the case but before the court acted on the post-trial motions, the Commissioner of Patents ordered that approval of the Certificate be withdrawn.
In its motion for a new trial, Gencor included arguments that the district court erred in (1) receiving as an exhibit the Certificate of Correction, and (2) refusing to declare a new trial after the PTO withdrew its Certificate. As indicated above, the motion was denied in all respects.
Gencor appealed the district court judgment on November 6, 1989. Gencor argues: (1) the '938 patent claims are invalid in view of Hepburn '649; (2) if the '938 patent claims are construed to maintain their validity, such claim construction...
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