Standard Oil Co. v. American Cyanamid Co.

• Decision Date: 25 September 1985
• Docket Number: 84-1552,Nos. 84-1519,s. 84-1519
• Parties: The STANDARD OIL COMPANY, Appellant/Cross-Appellee, v. AMERICAN CYANAMID COMPANY, Appellee/Cross-Appellant. Appeal
• Court: U.S. Court of Appeals — Federal Circuit

Page 448

774 F.2d 448

227 U.S.P.Q. 293

The STANDARD OIL COMPANY, Appellant/Cross-Appellee, v. AMERICAN CYANAMID COMPANY, Appellee/Cross-Appellant.

Appeal Nos. 84-1519, 84-1552.

United States Court of Appeals Federal Circuit.

Sept. 25, 1985.

Eben G. Crawford, Squire, Sanders & Dempsey, Cleveland, Ohio, argued for appellant/cross-appellee. With him on brief was Daniel R. Cherry, Cleveland, Ohio; Gary R. Plotecher, Standard Oil Co., Cleveland, Ohio, of counsel.

Jamie S. Smith, Allegretti, Newitt, Witcoff & McAndrews, Ltd., Chicago, Ill., argued for appellee/cross-appellant. With her on brief were Jon O. Nelson, Stephen F. Sherry and D. Dennis Allegretti, Chicago, Ill.; Gordon L. Hart, American Cyanamid Co., Stamford, Conn., of counsel.

Before RICH and DAVIS, Circuit Judges, and COWEN, Senior Circuit Judge.

RICH, Circuit Judge.

This appeal is from the final judgment of the United States District Court for the Eastern District of Louisiana, entered on May 31, 1984 ¹ dismissing the complaint and based on the holding that U.S. Reissue Patent No. 28,525, entitled "Process for Hydrolyzing Nitriles," assigned to plaintiff-appellant/cross-appellee The Standard Oil Co. (Sohio) by the inventors, Janice L. Greene and Murrel Godfrey, is invalid and, if valid, not infringed by defendant-appellee/cross-appellant American Cyanamid Company (Cyanamid). Cyanamid also cross-appeals from the district court's failure to award attorney fees and costs against Sohio under 35 U.S.C. Sec. 285. We affirm the district court's judgment and remand for affirmative action on attorney fees.

Background

This patent infringement action involves a catalytic process used primarily to manufacture acrylamide Acrylamide is a monomer, made by combining a molecule of water with a molecule of acrylonitrile. Prior to the 1960's, acrylamide was produced by a two-step process, using sulfuric acid and ammonia. The two-step process had several drawbacks, consuming large quantities of sulfuric acid and ammonia while producing a relatively low yield of acrylamide and also resulting in a by-product (ammonium sulfate) not always easily or profitably disposed of.

which is a valuable organic chemical with a growing list of important commercial applications. It has been described by the parties hereto as the precursor for compounds used in pollution control and energy development and as "a preferred starting material" for the production of polymers used in municipal and industrial water treatment, pulp and paper processing, textile treatment, food processing, and other applications. The production of acrylamide is now a major competitive business in the United States.

In June, 1965, two of Sohio's research chemists applied for a patent on a one-step process which produced acrylamide from acrylonitrile by using a copper catalyst. On April 30, 1968, U.S. Patent No. 3,381,034 (the "original Greene patent") was issued to Sohio as assignee of Dr. Janice Greene and Mr. Murrel Godfrey.

In September, 1973, John Jones, one of Sohio's patent attorneys who prepared and prosecuted the original Greene patent application, learned of a 1964 Japanese article by Dr. Kenichi Watanabe (the "Watanabe article") which he felt was relevant to the validity of the original Greene patent examiner. The Watanabe article related primarily to the use of metallic nickel as a catalyst but also disclosed a catalytic conversion of an aromatic nitrile, benzonitrile, to its corresponding amide, benzamide, by using a catalyst known as Urushibara copper.

After discussing the Watanabe article with Dr. Greene, who affirmed that she had not seen the article before she and Godfrey applied for the patent, Jones filed an application on behalf of Sohio to reissue the original Greene patent. The specification and claims of the reissue application were identical to the original Greene patent except for the removal of all references to the conversion of aromatic nitriles and benzonitrile, which the original patent had included within the invention disclosed and claimed, both generically and specifically. The examiner originally rejected all claims of the reissue application as being obvious in view of the Watanabe article. After a personal interview in which attorney Jones pointed out that the Watanabe article disclosed the use of Urushibara copper, which, he argued, is metallic copper and outside the scope of the claims in the reissue application, the examiner allowed the reissue application. The patent was reissued on August 19, 1975, as Reissue No. 28,525 (the "Greene reissue patent").

Claim 2 of the Greene reissue patent reads, in pertinent part,

The process for hydrolyzing a nitrile ... comprising contacting said nitrile with water ... in the presence of copper ion, said copper ion being at least partially soluble in water, the nitrile or in both water and nitrile and said copper ion being composed of copper in a combined valence state of Cu? + Cu ⁺, Cu? + Cu ⁺⁺, or Cu? + Cu ⁺ + Cu ⁺⁺....

Since the original Greene patent issued in 1968, numerous patents have issued on the basic process disclosed therein. Today, every known manufacturer of acrylamide throughout the world uses a one-step process employing a copper catalyst. In the United States, acrylamide is currently manufactured by Cyanamid, Dow Chemical Company, and Nalco Chemical Company.

Sohio manufactured acrylamide through its subsidiary Vistron from 1969 to 1975 but did so using the sulfuric acid/ammonia process. Sohio has not made acrylamide since June, 1975, and has never commercially manufactured an amide from a nitrile by the process claimed in the Greene reissue patent, nor has it marketed a catalyst or had a licensee under that patent.

The Cyanamid Process

Cyanamid manufactured acrylamide from acrylonitrile and water using the sulfuric In October, 1974, Sohio believed that Cyanamid might be using its patented process in its commercial acrylamide plant in Fortier, Louisiana. Although Sohio offered Cyanamid a license under the original Greene patent in December, 1974, Cyanamid took the position that it did not need a license, and there were no further negotiations between the parties. Sohio filed this suit on April 16, 1980, after reissuing its patent, seeking compensation for patent infringement in the form of a reasonable royalty and, in addition, seeking increased damages and attorney fees for willful infringement. Cyanamid denied infringement and counterclaimed for a declaration that the Greene reissue patent is invalid and unenforceable because of fraud and also sought an award of attorney fees against Sohio for bringing a "baseless infringement suit."

acid/ammonia process beginning in 1954, and discontinued use of that process in 1977. Beginning in August, 1968, Cyanamid undertook a project to develop a catalytic process for the selective conversion of acrylonitrile and water solely to acrylamide. Since September, 1973, Cyanamid has operated a process using a "metallic copper catalyst," to be distinguished from copper ion, to catalyze conversion of acrylonitrile to acrylamide. The catalyst used in Cyanamid's process is essentially pure metallic copper (Cu?, or zero valence copper), produced by passing hydrogen gas over pellets composed of copper compounds to reduce them to metallic copper. Although Cyanamid takes steps to insure that no copper ions (Cu ⁺ or Cu ⁺⁺, copper with a valence number of one or two) are introduced into the process, tests of Cyanamid's reactor effluent showed that it contained minute quantities of soluble copper ions, on the order of one or two parts per million, referred to by the trial judge as "minute."

The District Court's Opinion

Trial was to the court without a jury. Sohio asserted infringement of only claim 2 of the Greene reissue patent. We shall now briefly summarize the court's extensive opinion.

The district court held that the Greene reissue patent was not infringed by Cyanamid. While Sohio's patented process makes use of copper ions that are "at least partially soluble in water, the nitrile or in both water and nitrile," the court specifically found that the catalyst used by Cyanamid is not "at least partially soluble" and also found that the Cyanamid metallic copper catalyst was specifically disclaimed by Sohio in its reissue application.

The court also held that the Greene reissue patent was invalid because it did not satisfy the disclosure requirements of 35 U.S.C. Sec. 112 and because the claimed invention was obvious under 35 U.S.C. Sec. 103. The court found (with some confusion on its part discussed infra) that the term "at least partially soluble" as used in claim 2 did not meet the "full, clear, concise and exact" requisites of the first paragraph of Sec. 112 and also held that "partially soluble" was too vague to meet the requirement that the inventor shall particularly point out and distinctly claim the invention, as required by the second paragraph of Sec. 112.

The court went on to hold claim 2 invalid for obviousness under Sec. 103 based on two prior art references, U.S. Patent No. 1,891,055, issued in December, 1932, to Walter Reppe (the "Reppe patent") and the Watanabe article. After examining the disclosures in these references, the court concluded that, when read together, they rendered the invention of claim 2 obvious within the meaning of Sec. 103.

Finally, the court determined that the facts did not support a holding of "egregious conduct" or fraud committed by Sohio either in procuring its patent or in bringing the infringement suit. It was apparently on this basis that the court made no award of attorney fees to the prevailing party, Cyanamid.

The opinion having been filed, judgment was thereafter entered simply dismissing the complaint with prejudice.

OPINION

A. Infringement

A patent confers the right to exclude others from making, using, or selling the invention defined by the claims. 35 U.S.C. Sec. 154. A determination of patent infringement under ...