Amstar Corp. v. Envirotech Corp.

823 F.2d 1538, 3 U.S.P.Q. 2d (BNA) 1412
CourtCourt of Appeals for the Federal Circuit
DecidedJuly 7, 1987
DocketAppeal Nos. 86-1340, 86-1360
StatusPublished
Cited by74 cases

This text of 823 F.2d 1538 (Amstar Corp. v. Envirotech Corp.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Federal Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Amstar Corp. v. Envirotech Corp., 823 F.2d 1538, 3 U.S.P.Q. 2d (BNA) 1412 (Fed. Cir. 1987).

Opinion

MARKEY, Chief Judge.

Appeal and cross-appeal from a judgment of the United States District Court for the District of Utah, No. C-79-0023-J, awarding Amstar Corporation and its exclusive U.S. licensee Enviro-Clear Company, Inc. (collectively Amstar) $4,801,869 in damages for patent infringement, but denying damages on certain transactions, refusing to find, willful infringement, and denying Amstar increased damages, attorney fees, and costs.

In Appeal No. 86-1340, Amstar appeals from orders: (1) refusing to consider evidence of the diminished value of a portion of Amstar’s business; (2) refusing to enjoin Energy Fuels Nuclear, Inc. (EFN) from infringing Amstar’s U.S. Patent No. 3,523,-889 (Eis patent); (3) denying Amstar’s motion to hold Envirotech Corporation (Envi-rotech) in contempt and to enjoin it from selling certain allegedly infringing devices; and (4) denying Amstar’s motion to enjoin Envirotech from proceeding with a request for reexamination of the Eis patent.

In Appeal No. 86-1360, Envirotech and EFN appeal from an order denying their motion under Fed.R.Civ.P. 60(b) to set aside the district court’s May 3, 1983 judgment that they had not established invalidity or unenforceability of Claims 1-10 of the Eis patent.

On June 2, 1987, the Patent and Trademark Office (PTO) issued a reexaminatidn certificate confirming claims 1 through 11 of the Eis patent. Accordingly, Amstar’s appeal from the denial of its motion to enjoin Envirotech from proceeding with its request for reexamination is dismissed as moot. We affirm the judgment in all other respects.

BACKGROUND

I. Proceedings Leading to This Appeal

On January 10, 1979, Amstar sued Envi-rotech and EFN for infringement of claims 1-10 of the Eis patent. Envirotech and EFN counterclaimed that the Eis patent was invalid under 35 U.S.C. § 103 and unenforceable for failure to disclose certain [1541]*1541prior art to the PTO. After a bench trial, the district court issued its May 3, 1983 judgment upholding the Eis patent as valid and enforceable, but finding it not infringed.

Amstar appealed from the judgment of noninfringement. Envirotech and EFN did not appeal. On March 27, 1984, this court reversed the judgment of noninfringement and remanded “for consideration of an injunction against further infringement by Envirotech and for an accounting of damages 'adequate to compensate’ Amstar for infringement [under] 35 U.S.C. § 284.” Amstar Corp. v. Envirotech Corp., 730 F.2d 1476, 1486, 221 U.S.P.Q. 649, 657 (Fed.Cir.), cert. denied, 469 U.S. 924, 105 S.Ct. 306, 83 L.Ed.2d 240 (1984).

After the trial, but before this court rendered its judgment on the appeal, Enviro-tech produced and sold a “modified” device.

The district court issued a December 20, 1984 order enjoining Envirotech from infringing claims 1-10 of the Eis patent, but specifically exempting EFN from the injunction.

Discovery proceeded on damages. On March 27, 1985, Envirotech and EFN moved under Fed.R.Civ.P. 60(b) to set aside the district court’s May 3, 1983 judgment of validity, citing newly discovered prior art. At the same time, citing the same prior art, Envirotech filed a request for reexamination of the Eis patent in the PTO. Amstar moved on July 1, 1985 to enjoin Envirotech from proceeding with its reexamination request and to cite it for contempt. The PTO agreed not to proceed with the reexamination until after the district court ruled on Envirotech’s Rule 60(b) motion. On January 3, 1986, the district court orally denied all motions, issuing written orders on May 15, 1986. The order refusing to enjoin Envirotech from proceeding with the reexamination request appears at 231 USPQ 320. On April 18, 1986, the PTO ordered that the reexamination proceeding be resumed. In re Eis, 1 Ú.S.P. Q.2d 1418 (Comm’r Pat. & Trademarks 1986).

After this court reversed the judgment of noninfringement, Envirotech produced a “redesigned device and began offering it for sale. On November-26, 1985, Amstar moved to enjoin the production and sale of the new design and to cite Envirotech for contempt. The district court orally denied the motion on January 3,1986, and issued a written order on May 15, 1986.

Between January 6 and 21, 1986, the district court conducted a trial on damages. On April 30, 1986, the court awarded $4,801,869 to Amstar, including $2,467,486 in prejudgment interest, plus interest accrued from January 1, 1986 to the date of final judgment. Saying the award is not “adequate to compensate” it under 35 U.S.C. § 284, Amstar appeals to this court once again.

II. The Invention

The Eis patent discloses a method and apparatus for separating liquids from solids. One step in many industrial processes is separating mixtures of water and fine particles into their liquid and solid components. Older methods rely mostly on gravity: water-solid mixtures stand in large settling tanks and the particles gradually fall to the bottom. Chemicals have occasionally been added to make the particles stick together and fall faster. Dense sludge flows from the bottom of the tank, and clarified liquid flows out the top. The equipment is called a “thickener” or a “clarifier” depending on whether its user wants the solids or the liquid.

In its unappealed May 3, 1983 judgment upholding validity, the district court found that the Eis method departs from the prior art by pumping fresh water-solid slurry directly into the dense sludge layer at the bottom of the tank instead of into the top. “Of particular significance,” said the court, is a flat baffle plate just beyond the mouth of the inlet tube that deflects the incoming slurry and spreads it out horizontally through the sludge. Added chemicals make the inflowing particles stick to those already in the sludge, while clarified liquid rises up from the sludge layer. The district court found that the Eis method works faster than older methods and requires less bulky equipment.

[1542]*1542III. The District Court’s April 30, 1986 Opinion

In an unreported 47-page April 30, 1986 opinion issued after the damages trial, the district court set forth a detailed and thoughtful analysis of the damage Amstar suffered, awarding Amstar lost profits for some transactions, a reasonable royalty for others, and no damages for the rest.

Finding that the thickener market “defies a blanket characterization,” and is not everywhere a two-supplier market, the court held that Amstar had the burden to show, in each transaction alleged as harmful, some infringing activity that caused its profits to diminish. For each transaction, the court individually analyzed the market situation to determine whether Amstar was entitled to damages and if so, whether to award lost profits or a reasonable royalty.

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Bluebook (online)
823 F.2d 1538, 3 U.S.P.Q. 2d (BNA) 1412, Counsel Stack Legal Research, https://law.counselstack.com/opinion/amstar-corp-v-envirotech-corp-cafc-1987.