Union Carbide Corp. v. Dow Chemical Co.

• Citation: 619 F. Supp. 1036
• Decision Date: 26 September 1985
• Docket Number: Civ. A. No. 83-208 MMS.
• Parties: UNION CARBIDE CORPORATION, Plaintiff, v. The DOW CHEMICAL COMPANY, Defendant.
• Court: U.S. District Court — District of Delaware

619 F. Supp. 1036

UNION CARBIDE CORPORATION, Plaintiff, v. The DOW CHEMICAL COMPANY, Defendant.

Civ. A. No. 83-208 MMS.

United States District Court, D. Delaware.

August 12, 1985.

Reargument Denied September 26, 1985.

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E. Norman Veasey, Richards, Layton & Finger, Wilmington, Del., Paul W. Leuzzi, III, Stamford, Conn., for plaintiff; C. Frederick Leydig, Gordon R. Coons, and Bruce M. Gagala, Leydig, Voit, Osann, Mayer & Holt, Ltd., Chicago, Ill., of counsel.

Douglas E. Whitney, and Mary B. Graham, Morris, Nichols, Arsht & Tunnell, Wilmington, Del., for defendant; Neal A. Waldrop, Neal A. Waldrop & Associates, P.C., Troy, Mich., of counsel.

OPINION

MURRAY M. SCHWARTZ, Chief Judge.

On April 15, 1983, Union Carbide Corporation ("Carbide") filed this action charging the Dow Chemical Company ("Dow") with infringement of U.S. Reissue Letters Patent No. Re. 28,715 and No. Re. 29,118, both relating to the production of elastic polyurethane products. In its amended answer and counterclaim, Dow has denied infringement of the patents and has challenged their validity on several grounds, including fraud and double patenting. (Defendant's Amended Answer and Counterclaims, Docket Item ("Dkt.") 34). Presently before the Court are two motions brought by Dow in relatively close succession. The first, a Motion to Compel the Production of Documents, seeks discovery of 262 allegedly privileged communications which Dow argues were prepared in furtherance of Carbide's fraud on the Patent Office or are otherwise non-privileged. The second, a Motion for Partial Summary Judgment, asserts the invalidity of Re. 28,715 on the basis of double patenting over Re. 29,118. For the reasons stated in this Opinion, Dow's Motion to Compel will be granted in part and denied in part, and its Motion for Partial Summary Judgment will be denied.

I. The Patents and Their Procurement

The patents in question relate to the preparation of polyurethane¹ by reacting an isocyanate² with a polymer³ polyol⁴ composition. In over-simplified terms, the reactive hydrogen group of the polymer/polyol composition reacts with the -N=C=0 radical of the isocyanate, producing polyurethane. The invention provides a relatively simple means of introducing a high molecular-weight, film-forming polymer into the production of polyurethane, thereby yielding a product with improved properties.

For purposes of Dow's motions, a critical aspect of the invention lies in the formation of the polymer/polyol composition by polymerizing an ethylenically unsaturated monomer⁵ "in situ," or within, a reactive polyol. (United States Patent No. Re. 29,118, col. 5, lines 1-37 (Appendix to Dow's Brief in Support of its Motion to Compel Production of Documents, Dkt. 36A at A382)). This in situ polymerization permits the inclusion of a monomer which itself contains no reactive hydrogen groups but which will become reactive upon polymerization in a reactive solvent. (Id.). The use of solely non-reactive monomers in the production of polyurethane appears to have been a significant departure from the prior art. Since the properties of the resulting polyurethane vary with the nature of the monomers forming its base, the invention facilitated the manufacture of polyurethanes bearing novel and enhanced qualities.

Dr. Paul Stamberger, head of a small chemical company in Baltimore, Maryland, obtained two patents on this invention. He, in turn, granted an exclusive licensing agreement to Carbide, which now asserts its rights under the patents. Patent No. Re. 28,715 secures protection on the method of manufacturing the polymer/polyol compositions and on the compositions themselves. (Dkt. 36A at A362). Patent No. Re. 29,118 covers the method of using those compositions in the production of polyurethane, as well as the improved polyurethane product. (Dkt. 36A at A379). The reissue patents represent the culmination of a series of applications and amendments filed with the patent office in connection with the polymer/polyol concept.⁶

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The first of these applications was filed by Stamberger on November 28, 1961. Shortly before that date, Stamberger had met with a Carbide sales representative and displayed the results of some experiments he had performed at his laboratory in Baltimore. Carbide expressed interest in the research, but encouraged Stamberger to file a patent application before divulging further details of his work. Thus, Stamberger filed Application No. 155,467 ("Stamberger I") entitled "Polyurethanes and Methods for Their Production." The scope of this application is in dispute in this litigation. Dow contends that the application covered the production of polymer/polyols using reactive monomers only. Carbide, on the other hand, maintains that Stamberger I pertained to a generic invention for the manufacture of polymer/polyols using either reactive or non-reactive monomers.

Soon after Stamberger I was filed, Stamberger met with Carbide officials to discuss his research further. On December 27, 1981, Stamberger and Dr. L. Newton, a Carbide executive, signed a letter agreement giving Carbide a one-month option to negotiate a license with Stamberger. (Dkt. 36A at A92-93). The agreement included a clause preserving Carbide's "right to institute or prosecute patent interferences involving said patent application or any part thereof." (Id. at A93).

Meanwhile, Carbide was apparently conducting its own experiments in the production of polyurethanes. Stamberger was put in contact with Dr. William Kuryla, a Carbide chemist working in Charleston, West Virginia, and the two scientists continued their research at their respective locations. Although the extent of the interdependence of their efforts is unclear, it is evident that Stamberger remained in frequent contact with Kuryla and other Carbide associates and that substantial data was exchanged between the two concerns. On February 28, 1962, Carbide and Stamberger entered into a second agreement whereby Carbide obtained an option to acquire an exclusive license on Stamberger's patent applications covering the manufacture of reactive polyols useful in the production of polyurethane plastics. (Appendix to Carbide's Brief in Opposition to Motion to Compel, Dkt. 42A at CA479).

By August, 1962, an issue of inventorship had arisen concerning, as Carbide has termed it, an "improvement" made by Kuryla on Stamberger's invention. (Carbide's Brief, Dkt. 42 at 19; Fazio Deposition, Dkt. 42A at CA284-88). The parties to this litigation dispute both the substance of the Stamberger-Carbide conflict and the manner of its resolution. It is clear, however, that on February 6, 1963, Stamberger and Kuryla filed separate applications with the patent office ("PTO")⁷ to protect their respective developments. Application No. 256,531 ("Stamberger II"), entitled "Polyurethanes, Reactive Solutions and Methods for their Production," was filed by Stamberger as a continuation-in-part ("C.I.P.") of Stamberger I. According to its specification, Stamberger II was broadly intended to teach "novel methods of forming polyurethanes which employ high molecular weight film-forming polymers in the polyurethane reaction." (Stamberger II at 4, lines 25-27 (Supplemental Appendix of Carbide File Wrappers, Dkt. 58A, Exh. C)). The invention was considered to have two essential aspects — the formulation of a novel reactive solution and the reaction of that solution with an isocyanate to form novel polyurethanes. (Id. at 6, lines 11-14). The reactive solution was itself to contain two critical components:

A relatively high molecular weight film-forming polymer having radicals which are reactive with the -N=C=O radicals of the isocyanate used to form the polyurethane and a reactive solvent which is a solvent or dispersing medium for said polymer, and which also contains radicals which are reactive with the isocyanate group.

(Id., lines 15-21). The Stamberger II application specifically explained that the film-forming polymer used in the invention could be formed from a monomer which contained an active hydrogen group that would react with the isocyanate group. (Id. at 9, lines 3-18). Alternatively, the polymer could be formed from a monomer which contained no active hydrogen, provided the monomer was polymerized in situ in the active-hydrogen-containing polyol. (Id. at 10, lines 4-7).

Kuryla's application, No. 256,529, entitled "Polyurethane Foams," was more narrowly focused. Like the Stamberger II application filed on the same day, it concerned the in situ polymerization of certain monomers to produce a polymer/polyol composition which was then capable of reacting with an isocyanate to produce polyurethane. (Application No. 526,529 (Dkt. 58A, Exh. B at 1)). However, Kuryla's invention used in the process only non-reactive monomers — "those which do not have a reactive hydrogen atom and/or are free of any groups which are reactive with the isocyanate radical of an organic isocyanate." (Id. at 2-3). According to the Kuryla specification, it was "surprising and unexpected that the polymer/polyol compositions would react with polyisocyanates to form polyurethanes, since it has not heretofore been considered possible to produce polyurethane compositions from starting materials containing high molecular weight polymers which did not have a reactive hydrogen atom." (Id. at 15).

As initially filed, the Kuryla application claimed a variety of polymer/polyol compositions including those formed with acrylonitrile, a compound which is used widely by Dow and which lies at the root of this litigation. On September 14, 1964, Kuryla filed an amendment to the application cancelling all claims to polymer/polyol compositions except those containing acrylonitrile. (Id. at 81). The Kuryla application further recommended that the hydroxyl range of the polyol be limited:

The polyols employed can have hydroxyl numbers which vary over a wide range. In

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