Airwick Industries, Inc. v. Sterling Drug Inc.

720 F. Supp. 409, 1989 U.S. Dist. LEXIS 19235, 1989 WL 102639
District Court, D. New Jersey·Decided July 14, 1989·No. Civ. A. 80-187·Published·Cited by 2 cases

Opinion

ADJUDICATION

CLIFFORD SCOTT GREEN, District Judge.

After a non-jury trial 1 on Sterling’s request for attorney fees, and on its First, *410 Third, Fourth, and Fifth Counterclaims, I make 2 the following:

FINDINGS OF FACT

A. Re: Background

1. Plaintiff, Airwick Industries, Inc. (“Airwick”) is a New Jersey corporation, with its principal place of business located in Carlstadt, New Jersey. At the commencement of this action, Airwick was a wholly-owned subsidiary of Ciba-Geigy Corporation. Airwick has since been acquired by Reckitt & Coleman, PLC.

2. Defendant, Sterling Drug, Inc., d/b/a Lehn & Fink Products Company (“Sterling”), is a corporation of the State of Delaware, and has a place of business in Montvale, New Jersey.

3. James A. Smith, an additional defendant on the counterclaim, was employed by Sterling Drug’s Lehn & Fink Products Group from 1967 until September of 1975. He began with Lehn & Fink as a research chemist, and was later transferred to the marketing department. Mr. Smith began his employment at Airwick on May 10,1976 as Director of Research and Development. He was employed in that capacity until March 3, 1978.

4. Airwick manufactures and sells products under the trademarks CARPET FRESH and GLAMORENE RUG FRESH.

5. Sterling manufactures and sells a product under the trademark LOVE MY CARPET.

6. The involved products are rug and room deodorizers — powdered carpet treating compositions which may be applied to a carpet by sprinkling or shaking, and later vacuumed up. The compositions contain a perfume which serves to deodorize the carpet, and which, when vacuumed from the rug using a conventional vacuum cleaner, imparts a fragrance into the air.

7. Airwick and Sterling are in direct competition in the State of New Jersey, and throughout the United States, in the manufacture and sale of the aforementioned rug and room deodorizers.

8. United States Patent No. 4,161,449 (“the ’449 Patent”) was issued on July 17, 1979 on patent application (serial no. 830,-238) filed in the United States Patent and Trademark Office on September 2, 1977 in the names of James A. Smith and James H. McLaughlin entitled “Powdered Carpet Composition.” The '449 Patent application was prosecuted by Harry Falber, attorney for Ciba-Geigy.

9. At all relevant times, Airwick owned the ’449 Patent.

10. This lawsuit was commenced on January 22, 1980 as a patent infringement action in which Airwick accused Sterling of infringing the ’449 Patent.

11. Subsequent to the institution of this action, Airwick filed an application in the United States Patent and Trademark Office (“PTO”) for a reissue of the '449 Patent. On July 29, 1980, the patent infringement action was stayed, by Order of the District Court, pending resolution of Airwick’s reissue application.

12. Sterling participated in the reissue patent proceedings as a Protestor. It submitted several briefs in support of its position that the reissue patent application claims were unpatentable.

13. The Examiner made certain findings including, inter alia, that the St. Louis test was “experimental,” and that certain claims were not patentable under 35 U.S.C. § 102(f).

14. Airwick appealed to the Patent Office Board of Appeals. The appeal was heard by the Board on January 27, 1982.

15. The PTO Board of Appeals made the following findings:

a) The appealed reissue claims were un-patentable under 35 U.S.C. § 102(f);

*411 b) All claims were unpatentable under 35 U.S.C. § 102(g), and 35 U.S.C. § 103, because their subject matter was anticipated, or rendered obvious, by the prior McLaughlin/CNPD compositions;

c) The St. Louis testing activities constituted “public use” of the invention, and thus rendered the ’449 Patent unpatentable under 35 U.S.C. § 102(b);

d) The composition claims of the reissue application were unpatentable under 35 U.S.C. § 103 because they were directed to subject matter which was obvious over the prior art U.S. Patents of Dumbrell, Bask-erville, and Storm and other secondary references; and

e) Claims 11-13, 18, 23, and 25 were found to be unpatentable for failure to comply with the reissue statute, 35 U.S.C. § 251, because they contained subject matter intentionally concealed during the prosecution of the ’449 Patent which could not be recaptured by reissue.

16. On March 22, 1982, Airwick petitioned the Board of Appeals to reconsider its decision. The Board granted the petition, but declined to change its decision.

17. Airwick appealed the decision of the PTO Board of Appeals to the Court of Appeals for the Federal Circuit (“the Federal Circuit”). The court held that the appealed reissue patent application claims were all unpatentable under 35 U.S.C. § 102(b), since the product was in “public use,” via the St. Louis testing activities, more than one year prior to the patent application. The Federal Circuit did not address the other grounds of rejection made by the Board of Appeals. The Federal Circuit’s opinion is set forth in In re Smith and McLaughlin, 714 F.2d 1127 (Fed.Cir.1983).

18. Airwick’s request for a rehearing was denied by the Federal Circuit on August 30, 1983.

19. Airwick abandoned its reissue application, and disclaimed the ’449 Patent on January 30, 1984. Accordingly, the issues raised by Airwick’s Complaint are moot.

20. Sterling now seeks an award of attorney fees based upon (a) Airwick’s alleged fraudulent and inequitable conduct before the PTO, and (b) Airwick’s alleged bad faith institution, prosecution, and maintenance of this lawsuit.

21. In its First Counterclaim, Sterling asserts a claim for unjust enrichment for Mr. Smith’s/Airwick’s alleged misappropriation, and use, of trade secret information belonging to Sterling relating to carpet maintenance product technology and marketing.

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Airwick Industries, Inc. v. Sterling Drug Inc., 720 F. Supp. 409, 1989 U.S. Dist. LEXIS 19235, 1989 WL 102639 (D.N.J. 1989).

720 F. Supp. 409 (Airwick Industries, Inc. v. Sterling Drug Inc.) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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