Thyssen Edelstahlwerke AG v. Turbine Components Corp.
| Decision Date | 30 June 1987 |
| Docket Number | Civ. No. N-84-452 (PCD). |
| Citation | 663 F. Supp. 900 |
| Court | U.S. District Court — District of Connecticut |
| Parties | THYSSEN EDELSTAHLWERKE AG v. TURBINE COMPONENTS CORP. |
George E. O'Brien, Jr., Leonard Boyle, Tyler Cooper & Alcorn, New Haven, Conn., Richard L. Mayer, Arthur D. Gray, Richard L. DeLucia, Michael A. Gollin, Kenyon & Kenyon, New York City, Kevin McCann, Tyler, Cooper & Alcorn, Hartford, Conn., for plaintiff.
Bradford J. Reiger, Melvin Ditman, Ditman and Hershman, New Haven, Conn., Eugene F. Buell, Thomas R. Shaffer, Buell, Ziesenheimn, Beck & Alstadt, Pittsburgh, Pa., for defendant.
RULING ON MOTION FOR SUMMARY JUDGMENT
Plaintiff, a corporation organized and existing under the laws of the Federal Republic of Germany, instituted this action against defendant, a corporation organized and existing under the laws of the State of Connecticut, alleging that defendant infringed Patents 3,677,789 ("789") and 3,819,338 ("338").1 Patent 789 claims pioneering technology in the metallurgical arts, to wit—a method for producing "high-temperature corrosion and scale-resistant protective diffusion layers on parts made of high-temperature nickel and/or cobalt-based alloys ... by diffusing into the surfaces of the parts that are to be protected aluminum and one or more metals of the platinum group of elements." U.S. Patent 789, at col. 1 (Patented July 18, 1972). Patent 338 relates to the object to which the 789 coating invention has been applied.2 U.S. Patent 338, at col. 4 (Patented June 25, 1974). Both patents were designed for worldwide commercial use to protect turbine components against corrosive gases and high temperatures which typically shorten the life span of turbine parts. Defendant moves for summary judgment, Fed.R.Civ.P. 56, arguing that the 789 and 338 patents are unenforceable because of the inequitable conduct practiced on the PTO by plaintiff in the prosecution of the two patents. For the following reasons, defendant's motion is denied.
Summary judgment may properly be granted where there is no dispute as to the material facts and it is clear that the movant is entitled to judgment as a matter of law. Fed.R.Civ.P. 56. A court is not authorized to resolve factual questions on such a motion; rather, its task is to determine if any such factual questions exist. If such questions exist, and if they are material to the claims in issue, then the nonmoving party has met its burden and summary judgment is improper. Palumbo v. Don-Joy Co., 762 F.2d 969, 973-74 (Fed. Cir.1985); Lemelson v. TRW, Inc., 760 F.2d 1254, 1260-61 (Fed.Cir.1985). "Further, as an additional precaution against denying a party its chance to prove a worthy case, any doubt as to the presence or absence of disputed issues of material fact must be resolved in favor of the presence of disputed issues, or in other words in favor of the party opposing summary judgment." Lemelson, 760 F.2d at 1261. The onus placed upon a movant for summary judgment on a claim of inequitable conduct is especially heavy, as the claim necessarily involves determinations as to the intent of the party accused of practicing the fraud and the materiality of his alleged misrepresentations or omissions—issues which are typically not appropriate for resolution in a summary fashion. Kangaroos U.S.A., Inc. v. Caldor, Inc., 778 F.2d 1571, 1573-74, 1577 (Fed.Cir.1985) ().
Under 35 U.S.C. § 282, patents are presumed valid. Roper Corp. v. Litton Systems, Inc., 757 F.2d 1266, 1270 (Fed.Cir. 1985). However, this presumption may be rebutted by "clear, unequivocal, and convincing evidence of an intentional misrepresentation or withholding of a material fact from the PTO." Driscoll v. Cebalo, 731 F.2d 878, 884 (Fed.Cir.1984); Orthopedic Equip. Co. v. All Orthopedic Appliances, Inc., 707 F.2d 1376, 1383 (Fed.Cir.1983). More specifically, "the defense of inequitable conduct requires proof of: (1) an act of misrepresentation, (2) which was material, (3) involving information that was known or should have been known to the patentee, and (4) which was committed with the requisite intent. N.V. Akzo, Aramide Maatschappij v. E.I. Dupont De Nemours, 810 F.2d 1148, 1153 (Fed.Cir.1987); A.B. Dick Co. v. Burroughs Corp., 798 F.2d 1392, 1396-99 (Fed.Cir.1986). The materiality prong of the defense "can be established by any of four tests: (1) objective `but for'; (2) subjective `but for'; (3) `but it may have been'; and (4) 37 C.F.R. § 1.56(a), i.e. whether there is a substantial likelihood that a reasonable examiner would have considered the omission of false information important in deciding whether to allow the application to issue as a patent." See generally Atlas Powder Co. v. E.I. Dupont De Nemours, 750 F.2d 1569, 1578 (Fed.Cir.1984). The intent prong of the defense need not be proven with direct evidence; rather, such may be inferred by the acts of the patent prosecutor. J.P. Stevens & Co. v. Lex Tex Ltd., 747 F.2d 1553, 1560 (Fed.Cir.1984) (citations omitted), cert. denied, 474 U.S. 822, 106 S.Ct. 73, 88 L.Ed.2d 60 (1985). "Once the threshold of materiality and intent are established as facts, the court must balance them and determine as a matter of law whether the scales compel a conclusion that inequitable conduct occurred." Atlas Powder, 750 F.2d at 1578. Akzo, 810 F.2d at 1153. If inequitable conduct occurred, the patent is unenforceable.
Defendant argues that it has sustained its burden by showing that: (1) plaintiff failed to disclose to the PTO a prior art reference—United States Patent No. 3,107,175 ("175"), issued to Coast Metals, Inc. on October 15, 1963, and its French counterpart, French Patent 1,369,892 ("French 892"),—even though it knew that French 892 was material, having been the basis for the initial rejection of the equivalent of patent 789 prosecuted by plaintiff before the West German PTO; (2) plaintiff misrepresented other facts concerning patent 175, French 892, and United States Patent 3,494,748 ("748"); and (3) plaintiff only selectively disclosed some of the facts revealed in its testing of the prior art references.
Defendant's chief claim of inequitable conduct concerns plaintiff's alleged failure to disclose patent 175. The record reveals that, while plaintiff's applications were pending before the PTO, it was simultaneously prosecuting an equivalent application in West Germany. The West German Patent Office rejected the application on November 6, 1970, partly because under French 892 "the embedding of articles of superalloys, provided with thin platinum coatings, in a powder mixture containing metallic aluminum and thus depositing layers of aluminum on the platinized articles are already known." West German Patent Office File No. P 17 96 175.0-45, at 2, (November 6, 1970). On November 27, 1970, the applicants objected to the West German PTO's reference to the French 892, arguing that that patent called for merely "an overlay of aluminum as well as nickel, chromium and/or cobalt" and did not provide for a "protective diffusion layer." Id., Letter of November 27, 1970. Claim One of the application was modified accordingly and on further review by the West German Patent Office the distinction was apparently noted. Id., Memorandum of January 18, 1971.
Coincidentally on January 18, 1971, plaintiff's 789 patent was rejected by the United States PTO partly on the basis of 748 which disclosed PTO Serial No. 856,539, Memorandum of January 18, 1971, at 2-3. Neither patent 175 nor French 892 were cited by the PTO. On May 18, 1971, plaintiff amended its application to meet the deficiencies noted by the PTO and to distinguish its claims from patent 748. It did not reference 175, French 892, nor the citation of such patent by the West German PTO. Plaintiff also failed to mention this information in its supplemental filing with the PTO on May 18, 1971, July 13, 1971, during the interview on August 12, 1971, and in its filings of August 13, 1971. On September 7, 1971, the PTO allowed all of the elected claims. This action was reversed on October 15, 1971, however, when the PTO discovered patent 175. Plaintiff's Claims 10-12 were rejected Id., Memorandum of October 15, 1971, at 2-3. Plaintiff moved for reconsideration on November 29, 1971, requesting that the PTO further consider the status of patent 175 as prior art. Plaintiff noted that its corresponding West Germany application...
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