Zumbro, Inc. v. Merck and Co., Inc., No. 90 C 2507.

• Decision Date: 04 March 1993
• Docket Number: No. 90 C 2507.
• Citation: 819 F. Supp. 1387
• Parties: ZUMBRO, INC., a Minnesota corporation, Plaintiff, v. MERCK AND CO., INC., a New Jersey corporation, Defendant.
• Court: U.S. District Court — Northern District of Illinois

819 F. Supp. 1387

ZUMBRO, INC., a Minnesota corporation, Plaintiff, v. MERCK AND CO., INC., a New Jersey corporation, Defendant.

No. 90 C 2507.

United States District Court, N.D. Illinois, E.D.

March 4, 1993.

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George Pellegrin McAndrews, McAndrews, Held & Malloy, P.C., Chicago, IL and Edward W. Murray, Merck & Co., Inc., Rahway, NJ, for defendant/counterclaimant.

Paul William O'Malley, Jr., Walsh, Case, Coale & Brown, and Ralph Everett Brown and Judith L. Borden, Schuyler, Roche & Zwirner, Chicago, IL, for plaintiff/counterdefendant.

ORDER

NORGLE, District Judge.

Before the court is Magistrate Judge Rebecca R. Pallmeyer's 83-page Report and Recommendation (the "Report"), dated November 13, 1992, which recommends: (1) granting Merck's motion for summary judgment asserting that all claims of Zumbro's patent are invalid on account of the inventors' failure to comply with the best mode requirement of 35 U.S.C. § 112; (2) or alternatively, granting Merck's motion for summary judgment asserting that all claims of Zumbro's patent are invalid on account of the inventors' pre-critical date commercial activity (the Unifiber sale) under 35 U.S.C. § 102(b); and (3) denying Zumbro's motion for summary judgment asserting that its patent is presumptively valid and has been infringed.

The court has made a de novo review of the Report, 28 U.S.C. § 636(b)(1), and finds it to be thorough, accurate, and the decision proper. Furthermore, neither party has filed any objections to the Report, and consequently, such failure to object constitutes a waiver of the right to appeal this decision. Egert v. Connecticut General Life Ins. Co., 900 F.2d 1032, 1039 (7th Cir.1990). Accordingly, the Court adopts and incorporates Magistrate Judge Pallmeyer's Report pursuant to 28 U.S.C. § 636(b)(1) with the following modification.

The Report correctly states that if the court adopts the Magistrate Judge's first recommendation, granting summary judgment in favor of Merck on the "best mode" grounds, it need not consider issues relating to the other motions because granting summary judgment is dispositive of this case. However, because the Report is thorough, accurate, and supported by the record, the court adopts the Report's recommendations as to each issue decided by Magistrate Judge Pallmeyer. Therefore, Merck's two summary judgment motions as to the validity of the patent claim in question are granted, and Zumbro's summary judgment motion is denied.

The court is aware that Merck had filed an additional motion for summary judgment of non-infringement. Although the Report states that "Merck has presented substantial support for a summary judgment in its favor on this issue," it nevertheless fails to make a "firm recommendation regarding this motion." Because the Report lacks a recommendation as to this issue, and because the court adopts the recommendation that summary judgment be granted in favor of Merck on other bases, Merck's motion for summary judgment on non-infringement is denied as moot.

                                                TABLE OF CONTENTS
                Standard for Summary Judgment in a Patent Case ......................................... 1395
                Factual Background ..................................................................... 1395
                  The Patented Process ................................................................. 1395
                  The Parties .......................................................................... 1396
                Merck's Motion for Summary Judgment on Grounds of "Best Mode" Violation ................ 1397
                  A. Facts Relating to Best Mode ....................................................... 1397
                  B. Analysis of "Best Mode" Motion .................................................... 1399
                     1. Standards for Proving Violations of Best Mode .................................. 1399
                     2. Analysis of the '938 Patent .................................................... 1400
                        a. Failure to Disclose Operating Parameters of the Glatt WSG 120 ............... 1402
                        b. Whether Zumbro Has Shown a Genuine Dispute of Material Fact ................. 1405
                  Recommendation ....................................................................... 1407
                Merck's Motion for Summary Judgment on Grounds of Violation of "On Sale" Bar of
                  35 U.S.C. § 102(b) .............................................................. 1407
                  A. Facts Relating to "On Sale" Motion ................................................ 1407
                     1. Run No. H132001 ................................................................ 1408
                     2. The Unifiber Product ........................................................... 1409
                  B. Analysis of "On Sale" Motion ...................................................... 1409
                     1. Standards for Proof of "On Sale" Activity ...................................... 1409
                     2. Analysis of Defendant's Claim that Sander and Cook Violated the "On
                         Sale" Bar of 35 U.S.C. § 102(b) .......................................... 1410
                        a. Did IFP Offer Its Custom Processing for Sale by Providing Kelco
                            with a Sample of the Product of Run No. H132001? ........................... 1411
                        b. Was Run No. H220801 (Unifiber) Produced by the Method of Claims
                            1 and 15 of the '938 Patent? ............................................... 1413
                           (i) ¶ 27 of Merck's Local Rule 12(m) On Sale Statement ................. 1415
                           (ii) ¶ 28 of Merck's Rule 12(m) On Sale Statement ...................... 1416
                  Recommendation ....................................................................... 1416
                Motions For Summary Judgment of Validity, Infringement and Non-Infringement ............ 1416
                  A. Facts Relating to Validity and Infringement ....................................... 1417
                  B. Analysis of Zumbro's Motion for Summary Judgment of Validity ...................... 1417
                

                      1. Pertinent Prior Art Patents Not Considered by the Patent Examiner ............. 1418
                      2. Invalidity of Claims 26 and 27 Based on Uncited Pertinent Prior Art ........... 1419
                      3. IFP's Agglomeration for T.J. Lipton Prior to the Critical Date ................ 1419
                  Recommendation ....................................................................... 1420
                  C.  Analysis of Zumbro's Motion for Summary Judgment of Infringement ................. 1420
                      1.  Standards for Summary Judgment of Infringement ............................... 1420
                          a. Literal Infringement ...................................................... 1420
                          b. Claim Interpretation ...................................................... 1420
                             (i) The Meaning of "Intermittent Spraying" ................................ 1421
                             (ii) Internal Operation of the WSG Process and the GPCG Process ........... 1422
                             (iii) Absence of Particulate Carrier in Keltrol RD ........................ 1422
                  D.  Analysis of Merck's Motion for Summary Judgment of Non-Infringement .............. 1423
                      1. Whether Zumbro's Claims Require Both a "Vegetable Gum" and a
                           Separate "Food Grade Particulate Carrier" ................................... 1423
                      2. The Specification's Differentiation of "Particulate Carrier" and "Vegetable
                           Gum" ........................................................................ 1424
                         a. Definition of "Food Grade Particulate Carrier".............................. 1424
                         b. Function of the Food Grade Particulate Carrier ............................. 1425
                         c. May Limitations Be Read into the Claims? ................................... 1425
                      3. The Inventors' Admissions Concerning the Specification's Silence about
                           "Vegetable Gum" Constituting a "Particulate Carrier" ........................ 1426
                      4. The Prosecution History of Claims 26 and 27 ................................... 1427
                      5. Cancelled Claim 17 ............................................................ 1428
                  Recommendation ....................................................................... 1429
                CONCLUSION ............................................................................. 1429
                

REPORT AND RECOMMENDATION

PALLMEYER, United States Magistrate Judge.

Plaintiff Zumbro, Inc. ("Zumbro") filed its complaint on May 1, 1990, pursuant to 28 U.S.C. §§ 1338(a) and 1400(b) to recover compensation for use of its patented invention by Defendant Merck and Co., Inc. ("Merck"). Zumbro is the owner of U.S. Patent No. 4,557,938 (the '938 patent), entitled "Product and Process for Improving the Dispersion of a Vegetable Gum in Water," and issued December 10, 1985 by assignment from the co-inventors of the patent, Eugene H. Sander and Douglas R. Cook. On June 5, 1990, Defendant filed its answer, affirmative defenses, and counterclaim. Plaintiff filed its reply to the counterclaim on June 26, 1990. Plaintiff amended its complaint on September 14, 1990.

Merck has filed three motions for summary judgment. Two of the motions assert that Zumbro's patent was rendered invalid by acts or omissions of the inventors prior to applying for the patent. One of these motions argues that the inventors' failure to disclose the "best mode" of carrying out the invention, as required by 35 U.S.C. § 112, renders the patent invalid and unenforceable. In a second motion, Merck seeks summary judgment of invalidity of the '938 patent on the ground that the method of that patent was allegedly commercially exploited prior to the statutory one-year grace period set forth in 35 U.S.C. § 102(b). The third motion asserts that, even if the patent is valid, Merck has not infringed any of the allowed claims of the patent. Plaintiff Zumbro has filed its own motion for summary judgment, asserting that its patent is presumptively valid and has been infringed.

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