US INDUSTRIAL CHEMICALS v. CARBIDE & CARB. CHEM. CORP.

• Decision Date: 15 May 1946
• Citation: 67 F. Supp. 895
• Parties: U. S. INDUSTRIAL CHEMICALS, Inc., v. CARBIDE & CARBON CHEMICALS CORPORATION.
• Court: U.S. District Court — Southern District of New York

67 F. Supp. 895

U. S. INDUSTRIAL CHEMICALS, Inc., v. CARBIDE & CARBON CHEMICALS CORPORATION.

District Court, S. D. New York.

May 15, 1946.

Pennie, Davis, Marvin & Edmonds, of New York City (Dean S. Edmonds, Frank E. Barrows, and Roger T. McLean, all of New York City, of counsel), for plaintiff.

Watson, Bristol, Johnson & Leavenworth, of New York City (L. A. Watson, C. V. Johnson, and T. R. V. Fike, all of New York City, of counsel), for defendant.

COXE, District Judge.

This is a suit for a declaratory judgment decreeing that the Lefort reissue patent, No. 22,241, issued December 29, 1942, for a process for the production of ethylene oxide, owned by the defendant, is invalid and void as to all claims and not infringed by the plaintiff.

The plaintiff is the owner of a large plant at Baltimore, Maryland, which, for a considerable period prior to November 1942, was engaged in the production of ethylene oxide according to a process now asserted by the defendant to be an infringement of the patent. This plant was shut down in November 1942, because of conditions resulting from the war, and has since been out of commission. It is, however, the intention of the plaintiff to resume operations at the plant as soon as these conditions permit, using the same process for the production of ethylene oxide as formerly employed. The defendant has notified the plaintiff that any operation using this process will be considered an infringement of the patent, and the present suit for a declaratory judgment has been brought by the plaintiff to determine the controversy between the parties.

The complaint alleges that an actual controversy exists between the parties with respect to the patent, and specifies various grounds for the relief sought. Included in these grounds are the usual patent defenses of anticipation, lack of invention and non-infringement, together with a number of other defenses such as insufficient specification, patent office estoppel, failure to disclaim, and intervening rights.

The answer challenges the jurisdiction of the court to entertain the suit for a declaratory judgment, sets up a counterclaim alleging infringement of claims 2 and 3 of the patent, and prays for an injunction against infringement and further threat of infringement.

The patent is a second reissue of the original Lefort patent, No. 1,998,878, issued April 23, 1935, on an application filed March 22, 1932. This original patent had seven claims, and the application was based on earlier French patents applied for and obtained by a French corporation known as Societe Francaise De Catalyse Generalisee, with which Lefort was connected. The United States patent was purchased by the defendant in April 1936, and assigned to that company on August 18, 1936. On September 25, 1936, Lefort, at the instigation of the defendant, applied for a reissue, and on May 18, 1937, the first reissue, No. 20,370, was granted. This reissue contained a rewritten specification, and added two new claims, Nos. 8 and 9, to the seven claims of the original patent.

The first reissue was the subject of a prior suit between the parties in the District Court in Maryland, involving the operations then being conducted by the plaintiff at its plant in Baltimore. In this suit, the two new claims of the reissue, Nos. 8 and 9, alone were in issue. The suit was tried at Baltimore in June 1940, and resulted in an interlocutory decree adjudging claims 8 and 9 of the reissue valid and infringed. Carbide & Carbon Chemicals Corp. v. U. S. Industrial Chemicals, D.C., 34 F.Supp. 813. This decree was affirmed by the Circuit Court of Appeals for the Fourth Circuit, United States Industrial Chemicals v. Carbide & Carbon Chemicals Corp. 121 F.2d 665, but was later reversed by the Supreme Court on the ground that the reissue was not for the same invention described and claimed and intended to be secured by the original patent. U. S. Industrial Chemicals Co. v. Carbide & Carbon Chemicals Corp., 315 U.S. 668, 62 S.Ct. 839, 86 L.Ed. 1105. A final judgment on the mandate of the Supreme Court was accordingly entered by the District Court in Maryland on May 18, 1942, vacating the previous interlocutory decree, adjudging claims 8 and 9 of the reissue invalid, and dismissing the complaint.

On May 14, 1942, the defendant filed a disclaimer of claims 8 and 9 of the reissue, stating that it was filing simultaneously an application for a second reissue with claims as therein specified. Some delay was thereafter encountered in obtaining the signature and oath of Lefort to the application for the further reissue, and it was not until September 18, 1942, that the papers were accepted for filing by the Patent Office. The second reissue was granted on December 29, 1942, with a specification similar to that of the original patent, and containing three claims designed to meet the criticisms of the Supreme Court with respect to the first reissue.

In the meantime, the plaintiff's Baltimore plant had been shut down, and it was thought that some foundation for the institution of the present suit should be laid by the actual practice of the accused process after the issuance of the second reissue. The plaintiff accordingly set up a small unit for the production of ethylene oxide at its plant at Stamford, Connecticut, and during a period of seven or eight days in February, 1943, this unit was operated, and produced between four and eight gallons of the product, using the same process theretofore employed in the Baltimore operations. A sale of a gallon of the product was subsequently made in regular course through the plaintiff's New York office prior to the commencement of the suit.

The following is a brief description of the three United States Lefort patents:

Original patent No. 1,998,878:

The original patent disclosed a Catalytic process for the direct oxidation of ethylene, which consisted generally in passing a mixture of ethylene, oxygen and water over a prescribed catalyst in a confined reaction chamber at a temperature between 150 and 400 degrees C to produce ethylene oxide. It was also disclosed that as an incident to the operation of the process there was a side reaction in which a portion of the ethylene was converted into water and carbon dioxide. The specification mentioned a large number of metals, including silver, and their mixtures, for use as alternative catalysts, but silver alone was suggested as the catalyst in two of the three modi operandi given as examples. In its analysis of the patent in the prior suit, the Supreme Court referred to various parts of the specification and claims relating to the introduction of water as an essential step in the process, and these references need not be repeated. The court held that the voluntary introduction of water into the reaction chamber was mandatorily required by the patent, and that this was so notwithstanding the presence of water in the reaction chamber resulting from the side reaction producing water and carbon dioxide.

First reissue No. 20,370:

The first reissue in its rewritten specification stated that the process "can be conveniently conducted by passing a mixture containing air and ethylene through a tube * * *"; it treated the voluntary introduction of water into the reaction chamber as merely permissive. The catalyst was described as a "surface catalyst * * * composed of silver in finely divided form"; but it was stated that "other metals such as bismuth and antimony may be used," and, further, that "experiments have also indicated that the catalyst may be silver activated by the addition of small amounts of gold or copper or iron." The use of the various other metals (including gold, copper and iron), as alternative catalysts mentioned in the original patent, was expressly disclaimed by Lefort in his supplemental oath to the application for the reissue verified March 30, 1937. The new claims, Nos. 8 and 9, called for "a mixture containing ethylene and molecular oxygen," but said nothing about the voluntary introduction of water as a necessary step in the process. The Supreme Court held that these claims were invalid because they omitted the voluntary introduction of water as required by the original patent

Second reissue No. 22,241:

The second reissue now in suit contains a specification substantially identical with the specification of the original patent, except that it eliminates the various metals as alternative catalysts disclaimed by Lefort in his supplemental oath of March 30, 1937. The three claims of the reissue are as follows:

"1. A process for the production of ethylene oxide, consisting in subjecting ethylene to the simultaneous action of oxygen and water at a temperature between 150 degrees and 400 degrees C. in the presence of a catalyst composed of silver activated by small quantities of a metal selected from a group consisting of gold, copper and iron.

"2. A process for the production of ethylene oxide, consisting in subjecting ethylene to the simultaneous action of oxygen and water at a temperature between 150 degrees and 400 degrees C. in the presence of a catalyst composed essentially of silver to form ethylene oxide substantially without aldehydes.

"3. The process of making ethylene oxide by the direct chemical combination of oxygen with ethylene in the proportions of one atom of oxygen to one molecule of ethylene, which comprises introducing a mixture containing ethylene, molecular oxygen and water into a reaction vessel wherein the ethylene is subjected to the simultaneous action of the oxygen and the water; conducting said mixture through a reaction zone; controlling the temperature of said zone to maintain said mixture therein at a temperature between about 150 degrees and 400 degrees C.; subjecting said mixture in said zone to intimate contact with an active surface catalyst material composed essentially of silver which favors the direct oxidation of said ethylene in said mixture by said...