Standard Oil Co. (Indiana) v. Montedison, S.p.A.

Decision Date14 October 1981
Docket NumberNos. 80-1553,s. 80-1553
Citation212 USPQ 327,664 F.2d 356
PartiesSTANDARD OIL COMPANY (INDIANA) v. MONTEDISON, S.p.A., a corporation of Italy, Phillips Petroleum Company, acorporation of Delaware, and E.I. du Pont de Nemours and Company, a corporationof Delaware. Appeal of STANDARD OIL COMPANY (INDIANA). Appeal of E. I. du PONT de NEMOURS AND COMPANY. Appeal of MONTEDISON, S.p.A. to 80-1555.
CourtU.S. Court of Appeals — Third Circuit

John T. Kelton, Maxim H. Waldbaum, Darby & Darby, P.C., Thomas V. Heyman (argued), Dewey, Ballantine, Bushby, Palmer & Wood, William G. Todd, Watson, Leavenworth, Kelton & Taggart, New York City, for appellant Standard Oil Co.; George S. Spindler, Ralph C. Medhurst, Wallace L. Oliver, Chicago, Ill., Robert H. Richards, III, Richards, Layton & Finger, Wilmington, Del., Thomas F. Reddy, Jr., Gerald J. Flintoft, Stanton T. Lawrence, III, Pennie & Edmonds, New York City, Arthur G. Gilkes, Chicago, Ill., of counsel.

Earl L. Handley (argued), Legal Dept., E. I. du Pont de Nemours and Co., Wilmington, Del., for appellant du Pont; Roger A. Hines, Francis A. Paintin, Legal Dept., E. I. du Pont de Nemours and Co., Wilmington, Del., of counsel.

George B. Finnegan, Jr. (argued), Jerome G. Lee, Alfred P. Ewert, David H. Pfeffer, Stephen R. Smith, Richard C. Komson, Morgan, Finnegan, Pine, Foley & Lee, New York City, Edward S. Irons, Mary Helen Sears, Irons & Sears, Washington, D.C., Bernard M. Borish, Diane J. Sigmund, Wolf, Block, Schorr & Solis-Cohen, Philadelphia, Pa., for appellant Montedison, S.p.A.

Harry J. Roper (argued), Sidney Neuman, Chicago, Ill., for appellee Phillips Petroleum Co.; Kenneth R. Adamo, George S. Bosy, Nicholas A. Poulos, Neuman, Williams, Anderson & Olson, Chicago, Ill., C. Waggaman Berl, Jr., Wilmington, Del., Donald J. Quigg, Phillips Petroleum Co., Bartlesville, Okl., of counsel.

Before HUNTER, SLOVITER, Circuit Judges and MEANOR, District Judge *.

OPINION OF THE COURT

SLOVITER, Circuit Judge.

I. BACKGROUND

At issue in this case is the priority of invention of crystalline polypropylene, a plastic with considerable commercial utility and value. Among other attributes, crystalline polypropylene has a significantly higher melting point, tensile strength and heat resistance than prior products in the field. The antagonists, each claiming priority of invention of crystalline polypropylene for its assignor or assignors, are Phillips Petroleum Company (Phillips), Montedison, S.p.A. (Montedison), 1 E. I. du Pont de Nemours & Company (Du Pont) and Standard Oil Company of Indiana (Standard).

Following protracted litigation in the United States Patent Office, 2 the Board of Patent Interferences of the United States Montedison: June 8, 1954, based on the date of the filing of the Natta et al. Italian Application No. 24,227;

Patent Office (Board) 3 concluded that the Natta group, Montedison's assignors, were the first inventors and granted invention dates to the parties as follows:

Du Pont: August 19, 1954, based on the date of the filing of the Baxter et al. United States Application Ser. No. 451,064;

Standard: October 15, 1954, based on the date of the filing of Zletz's United States Application Ser. No. 462,480;

Phillips: January 11, 1956, based on the date of the filing of the Hogan et al. United States Application Ser. No. 558,530.

Thereafter, Montedison resumed ex parte prosecution in the Patent Office of the Natta group's claim to the invention of crystalline polypropylene in Application Ser. No. 514,099; on February 6, 1973, United States Patent No. 3,715,344 covering the invention was issued to Natta et al.

Each of the unsuccessful parties to the interference proceeding in the Patent Office filed civil actions in January 1972, pursuant to 35 U.S.C. § 146, challenging the Board's decision. 4 The actions, which were eventually consolidated for all purposes During the course of the 85-day trial conducted between September 19, 1977 and May 17, 1978, the district court received, in addition to the voluminous record compiled in the Patent Office, considerable new evidence including several thousand exhibits and the testimony of a number of experts in the area of physical and polymer chemistry. On January 11, 1980, the district court issued a detailed opinion which it supplemented on February 28, 1980 when it entered the order which is the subject of this appeal. Standard Oil Co. v. Montedison, S.p.A., 494 F.Supp. 370 (D.Del.1980).

                were assigned to Judge Caleb M. Wright.  5 They were then stayed pending resolution of earlier-filed patent infringement suits before the same judge arising out of a different patent owned by Montedison which covered a form of crystalline polypropylene not at issue here.  That litigation was settled in March 1975.  Thereafter, plaintiffs in this action sought to amend their complaints to make additional allegations against Montedison including charges of fraudulent activities in the Patent Office in the prosecution of the Natta group's patent application.  The denial of permission to amend was reversed by this court which held that in appropriate circumstances the district court may, in the exercise of a sound discretion, hear issues of fraud affecting the Board's decision on priority although such issues were not raised in the interference proceeding.  Standard Oil Co. v. Montedison, S.p.A., 540 F.2d 611 (3d Cir. 1976).  On remand, the district court permitted the amendment of the complaints to add claims that Montedison committed fraud on the Patent Office affecting the Board's decision on priority.  Standard Oil Co. v. Montedison, S.p.A., 431 F.Supp. 1064 (D.Del.1977).  The consolidated cases then advanced to trial of the issues
                

The court affirmed the Board's determination of the dates of invention for Montedison, Standard and Du Pont but concluded that Phillips was entitled to an invention date of no later than January 27, 1953. Thus the invention dates awarded by the district court were:

Phillips: January 27, 1953

Montedison: June 8, 1954

Du Pont: August 19, 1954

Standard: October 15, 1954

The district court also determined that Phillips had proved that Montedison fraudulently withheld information from Patent Office examiners, and that this fraud was detrimental to Phillips' case for priority of invention in the Patent Office. It held therefore that Phillips' burden of proof, which would ordinarily require it to adduce clear and convincing evidence to overcome the Board's findings regarding the priority date, was reduced to a preponderance of evidence standard. 494 F.Supp. at 375-76. The court concluded, nonetheless, that Phillips had in fact proven its case by clear and convincing evidence. 494 F.Supp. at 435. Finally, the district court sua sponte reached the issue of the patentability of Phillips' product and found that the crystalline polypropylene of the interference count was useful, novel and non-obvious, and therefore patentable to Phillips. 494 F.Supp. at 454-456, reaffirmed at 456-61. The court's judgment, entered February 28, 1980, authorized the Commissioner of Patents and Trademarks to issue letters patent to Hogan et al. and their assignee, Phillips.

II. ISSUE

None of the appellants claim an invention date earlier than January 27, 1953, the priority date the district court accorded to Phillips. Therefore, although each company vigorously asserts its own position and priority, our preliminary inquiry must be directed to the court's determination of Phillips' invention date. If that is sustained, we need not reach any of the other issues raised on appeal.

The district court found that Phillips was entitled to priority on either of two bases: (1) constructive reduction of the invention of crystalline polypropylene to practice by the filing of an application for a United States patent on January 27, 1953, or (2) actual reduction of the invention to practice by the Hogan group in 1951-1952. There is some variation in the challenges of the three appellants to the district court's conclusions, but considered together they argue that the court's determination as to actual reduction to practice by Phillips was erroneous because Phillips failed to prove by admissible evidence the utility required by the law for the four products Phillips produced in 1951-52 which it relies upon for actual reduction to practice. They also contend that the district court erred in finding that in 1951-1952 Phillips recognized those four products as the invention.

The appellants further contend that the district court erred in concluding that Phillips was entitled to a constructive reduction date of January 27, 1953 based on the application filed in the Patent Office by Hogan et al. on that date. They argue that the Phillips 1953 application does not contain an adequate disclosure of utility and that it does not either describe the invention of the interference count in the language of the count or inherently disclose the invention in equivalent language. They also contend that the invention claimed in the 1953 application is not the invention of the count, and that it is not the crystalline polypropylene claimed in the Hogan group's Application Ser. No. 558,530, filed January 11, 1956, which was the basis on which those inventors became parties to Interference No. 89,634. The appellants also challenge various of the district court's rulings on the fraud issues, and Montedison argues that the district court erred in deciding patentability as to Phillips.

After reviewing the record and considering all of the appellants' contentions, we conclude that the district court did not err in awarding priority to Phillips with respect to the invention of crystalline polypropylene based on an invention date of no later than January 27, 1953. Specifically, we affirm the district court's determination that Phillips constructively reduced the invention of crystalline polypropylene to practice on January 27,...

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