Turbocare Div. Of Demag Delaval v. General Elec., Civ.A. 95-30069-MAP.

• Decision Date: 31 March 1999
• Docket Number: No. Civ.A. 95-30069-MAP.,Civ.A. 95-30069-MAP.
• Citation: 45 F.Supp.2d 110
• Parties: TURBOCARE DIVISION OF DEMAG DELAVAL TURBOMACHINERY CORPORATION, Plaintiff, v. GENERAL ELECTRIC COMPANY, Defendant.
• Court: U.S. District Court — District of Massachusetts

45 F.Supp.2d 110

TURBOCARE DIVISION OF DEMAG DELAVAL TURBOMACHINERY CORPORATION, Plaintiff, v. GENERAL ELECTRIC COMPANY, Defendant.

No. Civ.A. 95-30069-MAP.

United States District Court, D. Massachusetts.

March 31, 1999.

Catriona Collins, Francis J. Murphy, Alan H. Pollack, Kimberly S. Chotkowski,

Hopgood, Calimafde, Kalil, Blaustein & Judlowe, New York City, Michael J. Coyne, Bacon & Wilson, P.C., Springfield, MA, for Turbocare Division of Demag Delaval Turbomachinery Corporation, plaintiff.

Mark T. Banner, Christopher J. Renk, Allegretti & Witcoff, Chicago, IL, John P. Iwanicki, Sanjay Prasad, Banner & Allegretti, Ltd., Boston, MA, Thomas K. Pratt, Banner & Allegretti, Ltd., Chicago, IL, for General Electric Company, defendant.

C. Brian McDonald, Bulkley, Richardson & Gelinas, Springfield, MA, for Clifford G. Brock, movant.

ORDER

PONSOR, District Judge.

For the reasons stated in the accompanying Memorandum, the Report and Recommendation of Magistrate Judge Neiman is hereby adopted in toto. Defendant's motion for summary judgment for unenforceability is hereby DENIED, and defendant's motion for partial summary judgment for invalidity is ALLOWED. The clerk will set a date for a status conference to set a schedule for future proceedings.

MEMORANDUM REGARDING REPORT AND RECOMMENDATION ON DEFENDANT'S MOTION FOR PARTIAL SUMMARY JUDGMENT OF INVALIDITY AND FOR SUMMARY JUDGMENT OF UNENFORCEABILITY OF U.S. PATENT NO. 5,037,115

I. INTRODUCTION

This is an action seeking damages for infringement of two United States patents: Patent No. 4,436,311, entitled "Segmented Labyrinth-Type Shaft Sealing System for Fluid Turbines" (the "'311 patent") and Patent No. 5,037,115, entitled "Piston Ring Assemblies for High Temperature Seals" (the "'115 patent"). Some of the background facts are set forth in a previous opinion of this court on an earlier motion regarding plaintiff's first cause of action, raising the '311 patent.¹ See TurboCare Div. of Demag Delaval Turbomachinery Corp. v. General Elec. Co., 938 F.Supp. 83 (D.Mass.1996).

In this memorandum the court will address GE's motion directed at plaintiff's second cause of action. The motion seeks partial summary judgment regarding two of three claims in the '115 patent, on the ground of invalidity, and summary judgment on the entirety of the second cause of action because the incorrect patent fee was paid at the time of the patent's issuance in 1991.

GE's motion was referred to Magistrate Judge Kenneth P. Neiman, who has issued a Report and Recommendation to the effect that the motion asserting invalidity be allowed and the motion raising the failure to pay the proper fee be denied. Both parties have filed objections to the Report and Recommendation. Since this court's de novo review reveals that Magistrate Judge Neiman's analysis was entirely correct, the court will adopt his recommendation and rule in accordance with it. The detail and care exhibited by the Report and Recommendation, attached to this memorandum at Exhibit A, make lengthy discussion here unnecessary.

II. FACTUAL BACKGROUND

The pertinent facts of record are set forth in the Report and Recommendation at pages 3-10. They are essentially undisputed and need not be repeated here.

III. DISCUSSION

Disposition of the defendant's motion requires this court to address only two relatively straightforward questions. First, does the fact that the inventor of the '115 patent, Ronald E. Brandon, paid the "small entity" patent issuance fee of $525.00 when the patent issued in 1991, instead of the "large entity" fee of twice that amount, render the '115 patent unenforceable? Second, were the first two claims of the '115 patent "anticipated" by a patent application for an essentially identical apparatus, the so-called "Hitachi reference," made to the Japanese Patent Office in the late 1970s and disclosed to the public on November 29, 1977?

The answer to the first question is not difficult. As a preliminary matter, the law is far from settled that a simple error in payment of a fee amount will irretrievably extinguish an inventor's patent rights. The one opinion cited by the defendant in support of this rather draconian proposition, DH Technology, Inc. v. Synergystex International, Inc., 937 F.Supp. 902 (N.D.Cal.1996), even though it involved facts far more egregious than those presented here, has been reversed on appeal. See 154 F.3d 1333, 1342 (Fed.Cir.1998). More importantly, the record is undisputed that in 1991 Brandon, not the large corporate entity Imo, owned the patent. As it happens, Brandon owns the patent to this day. In fact, Imo did not even possess a formal license agreement permitting exploitation of the patent until 1994. The plain truth is that an informed applicant in Brandon's shoes, operating in good faith, would have paid the $525.00 fee in 1991. The most that could even be colorably (though unpersuasively) argued is that Brandon made a minor, good faith error, because Imo's possession of some sort of implied license made the higher fee more appropriate. The demand for such dire consequences for this mistake, if mistake there was, has no foundation.

The answer to the second question requires a slightly more complex analysis but in the end is equally manifest.

The court's inquiry will begin will the patented device itself, a solid ring assembly used to seal the steam input areas of steam turbines. The basic underlying engineering problem arises from the fact that where the pipe carrying steam passes through and into the turbine casing, some sort of seal must be provided to prevent steam leakage and resulting loss of turbine efficiency. The challenge to a designer of such a seal is prodigious, because the extremely hot steam coming in through the pipe, called the "snout" pipe, will cause both the pipe and the turbine casing to expand and move relative to each other. The seal has to allow for such movement while maintaining a tight fit.

Prior art assemblies employed to attack this problem used an array of alternating small and large piston rings. The small rings had an inner circumference nearly identical to the outer circumference of the snout pipe, and the larger rings had an outer circumference nearly identical to the inner circumference of the turbine casing. The small and large rings could slide in relation to each other, permitting some motion while providing a tight seal.

This solution had a serious drawback, which the Brandon patent attempted to address. The fit between the outer, larger rings and the turbine casing, and between the inner, smaller rings and the snout pipe was so snug that assembly of the seal was often difficult. Moreover, after years of exposure to high temperature steam, oxide coatings would develop on both sets of rings, tending to lock them into position and undermine their essential mission, which was to move and expand while maintaining the seal. In addition, the oxide layers made it difficult to disassemble the seal for normal maintenance without damaging the turbine casing, snout pipe or the rings themselves.

Claim 1 of the patent describes an assembly in which the large rings expand more than the surrounding casing when exposed to extreme heat (meaning, in technical terms, that they possess a greater "coefficient of thermal expansion") and the small rings expand less than the snout pipe. As a result, when the turbine is shut down, and therefore cool, the larger rings will fit more easily into position within the casing, and the smaller rings will slide more easily over the snout pipe. When the turbine resumes operation, and heats up, the larger rings will expand more than the surrounding casing, making a tight fit, and the smaller rings will expand less than the snout pipe, with the same result. Significantly, Claim 1 makes no mention of the actual material that might be used to manufacture the rings in order to insure the different rates of expansion. It only describes the basic mechanism.

Claim 2 is dependent on Claim 1 and includes all its limitations, but with one addition: that the small piston rings "are fabricated from materials selected from any of the martensitic stainless steels for use at elevated temperature." (Defendant's Exhibit. B, '115 Patent, Col. 6, Ins. 26-29)

The record is undisputed, and plaintiff does not appear to contest, that the Hitachi reference is virtually identical to Claims 1 and 2. As with the '115 patent, its operation depends on the differential expansion of the rings when exposed to heat. The only slight difference, which plaintiff concedes does not distinguish it from the '115 patent, is that the Hitachi reference specifies the material to be used for the small rings: 12 chrome steel, which is one form of martensitic stainless steel.

Like Claims 1 and 2 of the '115 patent, the Hitachi reference does not specify any material to be used in manufacturing the outer rings. It simply states that they should be of a material having a greater coefficient of thermal expansion than the casing. This deficiency, plaintiff claims, is crucial to the "anticipation" analysis.

Unlike the Hitachi reference, Claim 3 of the '115 patent adds a further limitation: that "... the [large] piston rings are fabricated from materials selected from any of the austenitic stainless steels and precipitation hardening alloys intended for high temperature applications...." (Defendant's Exhibit B, '115 Patent, Col. 6, Ins. 30-34) TurboCare does not contend that the materials specified in Claim 3 are the only materials usable for the large ring, or that the subject matter of Claim 3 is necessary in order to make Claim 1 work. Further, it is important to remember that Claim 3 is not the subject of this motion for summary judgment. In other words, GE does not contend that Claim 3 was anticipated by the Hitachi reference.

Having examined the patent, the court will now turn to the law.

35 U.S.C. § 102 prohibits entitlement to a patent where the...