Consolidated Aluminum Corp. v. Foseco International Ltd.

910 F.2d 804, 1990 WL 109138
CourtCourt of Appeals for the Federal Circuit
DecidedJuly 19, 1990
DocketNos. 89-1637, 89-1643
StatusPublished
Cited by13 cases

This text of 910 F.2d 804 (Consolidated Aluminum Corp. v. Foseco International Ltd.) 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
Consolidated Aluminum Corp. v. Foseco International Ltd., 910 F.2d 804, 1990 WL 109138 (Fed. Cir. 1990).

Opinion

MARKEY, Circuit Judge.

Consolidated Aluminum Corporation (Consolidated) appeals from a judgment of the United States District Court for the Northern District of Illinois (Will, S.J.) holding its patents unenforceable and invalid. Foseco International Limited (FIL), Fo-seco Incorporated (Foseco), Alumax Incorporated (Alumax) and Trialco Incorporated (Trialco) cross-appeal the district court’s denial of their motion for attorney fees. We affirm.

BACKGROUND

We presume familiarity with the “Memorandum Opinion” of the district court, 716 F.Supp. 316, 11 USPQ2d 1817 (N.D.Ill.1989), and the “Report and Recommendation” of the special master,1 10 USPQ2d 1143 (N.D.Ill.1988). Hence we set forth only those facts that underlie issues dispos-itive of this appeal.

On May 4, 1982 Consolidated sued four parties (Foseco, Alumax, Trialco, and FIL) charging violations of its rights under six United States patents (Nos. 3,893,917 (’917), 3,962,081 (’081), 4,024,056 (’056), 4,081,371 (’371), 4,024,212 (’212) and 4,075,-303 (’303)) relating to the manufacture and use of ceramic foam filters for molten metal, particularly aluminum. All of the charged violations relate to Foseco’s SI-VEX ceramic filter. Foseco is charged with joint, contributory, or induced infringement of the ’917 patent in making and selling the SIVEX; Alumax and Trial-co are charged with direct infringement of the ’917 patent in using the SIVEX; FIL is charged with inducing infringement of the '917 by encouraging Foseco to commercialize and teaching Foseco how to make the SIVEX; Foseco is charged with direct and contributory infringement of the ’081 patent in making and selling the SIVEX; Alumax and Trialco are charged with direct infringement of the ’081 patent in using the SIVEX; FIL is charged with contributory or induced infringement of the ’081 in encouraging Foseco to commercialize and teaching Foseco how to make the SIVEX; Foseco is charged with contributory infringement of the ’056 and ’371 patents in using the SIVEX; Alumax and Trialco are charged with direct infringement of the ’056 and ’371 patents in using the SI-VEX; FIL is charged with contributory or induced infringement of the ’212 and ’303 patents in encouraging Foseco to commercialize and helping and teaching Foseco to make the SIVEX.2 Defendants filed counterclaims alleging antitrust violations.

On October 31, 1988, after a six-week trial involving more than 2000 exhibits and testimony from 27 witnesses in court and 70 witnesses by deposition, the special master issued a 94 page “report and recommendation” holding: (1) claims 1-2 and 4-9 of the ’917 patent, claims 2, 7, 8, 10, and 14 of the ’081 patent, the ’056 patent, the ’371 patent, claims 15, 20, and 24 of the ’212 patent, and claims 3, 7, 15, and 20 of the ’303 patent invalid in view of the prior art, 35 U.S.C. §§ 102, 103; (2) the ’917 patent invalid for failure to disclose the best mode, 35 U.S.C. § 112; (3) the ’917 patent unenforceable because Consolidated’s intentional withholding of the best mode and disclosure of a fictitious, inoperative mode constituted inequitable conduct; (4) claims 1, 4, 5, and 9 of the ’081 patent, claims 1, 2, and 18 of the ’212 patent, and claim 1 of the ’303 patent not invalid and willfully infringed by Foseco and FIL; (5) claims 1, 4, 5, and 9 of the ’081 patent infringed by Trialco and Alumax; (6) that [807]*807Consolidated had not committed antitrust violations; (7) that further infringement should be permanently enjoined; (8) that Consolidated’s request to change inventor-ship of the ’917 and ’081 patents be denied, see 35 U.S.C. § 256; and (9) that “Yarwood and Preuss were improperly added as named inventors of the ’363 patent.” 3

The parties submitted objections to the special master’s report and recommendation pursuant to Rule 53(e)(2), Fed.R.Civ.P. On June 15,1989, the district court issued a 46 page “Memorandum Opinion” affirming the determinations that (1) the ’917, ’371, and ’056 patents were invalid; (2) the ’917 patent was invalid for failure to disclose the best mode; and (3) the '917 patent was unenforceable because of Consolidated’s inequitable conduct in concealing the best and disclosing a fictitious mode in the ’917 patent. The court also: (4) held the ’917 patent unenforceable because Consolidated’s intentional failure to disclose prior art constituted inequitable conduct; (5) held the ’081, ’212, and ’303 patents unenforceable because of Consolidated’s “broad pattern of inequitable conduct”; (6) rejected the determinations that the ’081, ’212, and ’303 patents were not invalid and were infringed; (7) affirmed the dismissal of the antitrust counterclaims; and (8) vacated the injunction against further infringement. The district court adopted all findings of the special master not specifically rejected.

Judgment was entered on June 21, 1989. On July 6, 1989, the district court denied Foseco’s motion for attorney fees.

ISSUES

1. Whether the district court abused its discretion in holding the ’917, ’081, ’212, and ’303 patents unenforceable.

2. Whether the district court erred in holding the inventions claimed in the ’056 and ’371 unpatentable under 35 U.S.C. § 103.

3.Whether the district court’s failure to list reasons for its refusal to find this an exceptional case requires a remand.4

OPINION

Inequitable Conduct Renders the ’917 Patent Unenforceable

The special master found that Consolidated committed inequitable conduct by intentionally withholding the best mode contemplated by the inventors for practicing the invention of the ’917 patent and by disclosing a fictitious, inoperable mode:

The evidence shows that the best mode known at the time of the filing of the ’917 patent was the “CS1-B” slurry containing aluminum oxide, chromium oxide, kaolin, bentonite, aluminum ortho-phosphate, and water which is later disclosed and claimed in the ’363 patent. Instead of disclosing the actual slurry used to make the filters tested and reported in the patent, a fictitious inoperable slurry was disclosed as Example 1 that omitted key ingredients such as the thixotropic clays kaolin, bentonite, and the aluminum orthophosphate binder necessary to hold the ceramic together. Dr. Pryor [one of the inventors] admitted that the ’363 patent represents the undisclosed “best mode” of the ’917 patent. The evidence shows that both Dr. Pryor and Dr. Gray [the other inventor] knew that Example 1 of the ’917 patent was inoperative and not the best mode, and that the “CS1-B” slurry as disclosed in the ’363 patent was the best mode used to make the filters that were actually tested as reported in the ’917 patent. The testimony of Dr. Pryor also shows that he knew that the “CSl-B” slurry was not going to be disclosed in the application because he instructed the patent attorney, Mr. Bachman, to add the sentence at Col. 3, In. 39-40, “Additives may be employed in the slurry such as binders.” Inclusion of this sentence would have been unnecessary if the [808]*808“CS1-B” slurry which contained a binder was going to be disclosed.

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Bluebook (online)
910 F.2d 804, 1990 WL 109138, Counsel Stack Legal Research, https://law.counselstack.com/opinion/consolidated-aluminum-corp-v-foseco-international-ltd-cafc-1990.