Southern Clay Products, Inc. v. United Catalysts, Inc.

43 F. App'x 379
CourtCourt of Appeals for the Federal Circuit
DecidedJuly 26, 2002
DocketNo. 01-1382
StatusPublished
Cited by5 cases

This text of 43 F. App'x 379 (Southern Clay Products, Inc. v. United Catalysts, Inc.) 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
Southern Clay Products, Inc. v. United Catalysts, Inc., 43 F. App'x 379 (Fed. Cir. 2002).

Opinion

United Catalysts, Inc. (“United”) appeals a district court grant of judgment as a matter of law (“JMOL”) that two patents owned by Southern Clay Products, Inc. (“Southern Clay”), are valid, enforceable and infringed. Southern Clay Prods., Inc. v. United Catalysts, Inc., No. H-98-1756 [380]*380(S.D.Tex. Feb.2, 2001) (order granting JMOL). With respect to U.S. Patent No. 4,664,842 (“the ’842 patent”) this court holds that the district court erred as a matter of law, and the patent is invalid as a matter of law because it is anticipated. With respect to U.S. Patent No. 5,110,501 (“the ’501 patent”) we vacate the district court’s grant of JMOL for Southern Clay that the patent is not invalid and infringed and remand to the district court for further proceedings. Therefore we reverse-in-part, vacate-in-part and remand.

BACKGROUND

The ’842 and ’501 patents, relate to organophilic clays, known as “organoelays.” Since the 1950s the process for making organoelays has involved slurrying a hydrophilic, smectite-type clay in water, treating the slurry to remove impurities, reacting the slurry with a quaternary ammonium compound, and finally separating the resulting organophilie clay and drying it. The effect of the reaction with the quaternary ammonium compound is to change the clay so that it is compatible with organic solvents. In order to improve the reaction with the quaternary ammonium compound, it is beneficial to reduce the particle size of the clays prior to reacting them.

This size reduction benefit has been the subject of many patents. In 1976, a British patent GB1439828 (“Laporte”) was published, disclosing a process for manufacturing organoelays with a reduced particle size by subjecting the clay to “high shear” conditions before reacting it with the quaternary ammonium compound. In addition, U.S. Patent No. 3,951,850 (“Clocker”) issued in 1976, teaches the dispersion of clay particles. The Clocker patent cites to U.S. Patent No. 3,348,778 (“Cohn”) that teaches the use of a Man-ton-Gaulin mill/homogenizer (“Manton-Gaulin”) as a method for breaking down the particles.

Southern Clay filed- a patent application claiming improvements in the manufacture of organoelays through the use of a Man-ton-Gaulin to process the clay before it is reacted with the quaternary ammonium compound. The ’842 and ’501 patents are the progeny of that now-abandoned application. The ’842 patent claims the use of the Manton-Gaulin in functional terms, while the ’501 patent claims it specifically. Southern Clay asserted five of the six claims of the ’842 patent against United. The asserted claims of the ’842 patent recite:

1. In a process for manufacture or [sic] an organoclay by reacting a smectiti[sic]-type clay with a higher alkylcontaining quaternary ammonium compound; the improvement enabling enhancement of the gelling properties of said clay, comprising:
subjecting the clay as a pumpable slurry, to high speed fluid shear and substantial average particle size reduction, prior to the said reaction thereof with said ammonium compound, by passing said slurry through a narrow gap across which a pressure differential is maintained causing the slurry at high pressure entering the gap to undergo a rapid increase in velocity with a corresponding decrease in pressure, followed by cavitation as the velocity decreases beyond the gap.
2. A method in accordance with claim 1, further including impacting the clay at a high velocity beyond said gap, against a hard surface to effect further shearing and comminution of said clay particles.
3. A method in accordance with claim 1, wherein the said pressure differential is in the range of 1,000 to 8,000 psig.
[381]*3815. A method in accordance with claim 1, wherein said shearing and impacting is effected in a homogenizing mill.
6. A method in accordance with claim 1, wherein said pumpable slurry includes less than 25% by weight of solids.

Claims 1 and 2 of the ’501 patent read:

1. A process for preparing an organophilic clay gellant comprising:
(a) subjecting a slurry of smectite-type clay having a cation exchange capacity of at least 75 milliequivalents per 100 grams of clay to high shear conditions achieved by passing the slurry at least one time through a Man-ton-Gaulin homogenizer whereby clay agglomerates are separated, said smectite-type clay having been previously treated to remove non-clay impurities;
(b) reacting the smectite-type clay with organic cation whereby at least some of the cation exchange sites of the smectite-type clay are substituted with organic cation thereby forming an organophilic clay gellant;
(c) separating the organophilic clay gellant; and
(d) drying the organophilic clay gellant.
2. The process of claim 1 in which the high shear conditions are achieved by passing the slurry at least one time through a Manton-Gaulin homogenizer operating at from 1000 to 8000 psig.

Southern Clay brought suit against United alleging infringement of claims 1-3, 5 and 6 of the ’842 patent and claims 1 and 2 of the ’501 patent. United asserted that the patents were invalid and unenforceable. United also counterclaimed alleging violations of antitrust and state laws. United’s organoclay manufacturing process uses a Manton-Gaulin, but only after it breaks up the clay particles by steam-treating the slurry, as taught by Clocker.

United moved for partial summary judgment regarding infringement, invalidity and unenforceability and Southern Clay moved for partial summary judgment regarding infringement. Although the magistrate judge recommended that the motions for summary judgment be denied because there were triable genuine issues of material fact, the district court judge did not rule on those motions.

During the pre-trial stage the parties filed motions regarding claim construction. The parties stipulated that two claim limitations were at issue: the language in the ’842 patent “substantial average particle size reduction,” and the language in the ’501 patent “whereby day agglomerates are separated.” Only the construction of the first term is challenged on appeal. The district court agreed with Southern Clay that “substantial average particle size reduction” means a reduction in average particle size sufficient to accomplish an enhancement of the gelling properties of the organoclays. Southern Clay Prods., Inc. v. United Catalysts, Inc., No. H-98-1756, slip op. at 5-9 (S.D.Tex. May 9, 2000) (claim construction order).

Before trial, the parties submitted a joint pretrial order outlining the issues for trial. They agreed that disputed issues of material fact remained with respect to infringement, invalidity and unenforceability.

The disputed issues of fact included whether the Clocker patent anticipated the claims of the patents at issue. United argued that Clocker incorporated the use of the Manton-Gaulin through its reference to Cohn, and in the alternative that Clocker inherently disclosed the Manton-Gaulin. A second disputed issue of fact was whether any of the claims at issue would have been obvious based on a combination of the Clocker, Cohn and Laporte patents as well as an article by Simon et al. entitled “Effects of Processing on the

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Bluebook (online)
43 F. App'x 379, Counsel Stack Legal Research, https://law.counselstack.com/opinion/southern-clay-products-inc-v-united-catalysts-inc-cafc-2002.