The opinion of the court was delivered by: TAYLOR
Plaintiff instituted two lawsuits against the defendant. Action No. 3514 was filed on February 24, 1959, and, as amended, charges the defendant with having infringed three United States patents owned by the plaintiff. Action No. 3574 was filed on February 1, 1960, and is based on an alleged breach of contract and on the alternative theory of unjust enrichment. By stipulation of the parties the two suits were consolidated and they came on for trial before the Court on January 8, 1962, solely for the purpose of determining the question of defendant's liability, if any. Plaintiff's damages will be determined at a subsequent hearing, if the same shall become necessary after a final determination of all of the issues now under consideration.
Plaintiff is a British corporation and is owned principally by Robert A. S. Templeton and his wife. Templeton is the chairman of the board and its managing director. Defendant is a corporation of the State of Navada and has a principal place of business in the City of Boise, State of Idaho. This Court has jurisdiction under Sections 1332, 1338(a) and 1400(b), Title 28, U.S.C.A.
The facts and circumstances of the two lawsuits are closely related. Each suit involves a process for making a dehydrated potato powder which will, when combined with warm milk or water, readily reconstitute into a palatable dish of mashed potatoes comparable with that made by the common method using the fresh raw potato. Defendant is one of the leading manufacturers of this product in the United States. Plaintiff is the owner of three patents, each of which discloses a process for making said product, and it contends that the defendant's process infringes certain claims of each patent: namely, claims 1, 2, 4, 5, 6, 7 and 8 of United States Patent No. 2,119,155, issued to Arnold Faitelwitz and Marcos Bunimovitch on May 31, 1938; claims 3 and 7 of United States Patent No. 2,352,670, issued to Zelmanas Volpertas on July 4, 1944; and claims 16 and 17 of United States Patent No. 2,520,891, issued to Eugene Joel Rivoche on August 29, 1950.
The evidence discloses that prior to the discoveries represented by the above patents the world had a long-felt need for a process which would produce an instant mash potato powder. Both World Wars especially created a demand for this dehydrated product as well as others. Its minimum bulk and keeping properties make it suitable for storage and, yet when combined with warm milk or water it instantly makes an acceptable food. The common potato is particularly adaptable for such a product because it contains approximately 80 per cent water by weight and 20 per cent solids, primarily starch. Many inventors recognized this fact, but until the 1930's none had been able to discover a process which would produce an acceptable food. Prior thereto inventors had been able to discover processes only for drying potato pieces or strips, or for making potato flour which could be used indirectly in the preparation of foods. However, in attempting to develop an instant mash potato product, two problems always plagued them: first, they had to prevent the starch cells from rupturing while being processed, or otherwise the reconstituted product would be pasty and unpalatable; second, they had to overcome scorching or, in other words, prevent the outer layer cells from hardening when drying, in order to render them reconstitutable when combined with warm milk or water. This is sometimes referred to as 'case-hardening'.
The first substantial contribution to the art of processing an instant mash potato powder was made by Arnold Faitelowitz, in Paris, France, in the 1930's. He discovered that the starch cells of most starch-containing vegetables could be separated without rupturing them if the vegetable was first partially dried to a moist powder which had lost at the most about 60 per cent by weight of its original water content before it was put through a second drying stage to reduce it to an acceptable product containing only 10 to 15 per cent of its original water content. Each of said drying stages was accomplished by means of heat applied to the cooked vegetable, which had been cut into small pieces. Faitelowitz applied for a patent in Great Britain on June 10, 1936, which application serves as the basis for his United States patent.
Volpertas and Rivoche were associated with Faitelowitz in France. Volpertas determined that the initial drying stage of the Faitelowitz process could be accomplished merely by adding some of the fully dried product to the cooked potatoes and allowing absorption to take place to reduce the moisture content of the entire mixture. When the moisture content equalized it could then be further dried by the application of heat. By this means the risk of case-hardening was substantially decreased because drying by heat during the first stage of the process was eliminated, making the entire process more economical, less difficult to perform and more certain to produce an acceptable product. Volpertas' improvement on the Faitelowitz process is referred to herein as the add-back method or step. This method is old in the art of food dehydration, but Volpertas was the first to apply it to a process for making an instant mash potato powder. Volpertas, whose name is now Zelman Volpert, applied for a patent in Great Britain on October 14, 1937, which application serves as the basis for his United States patent. His patented process will be more fully examined hereinafter.
Rivoche is given credit for an improvement which prescribes limitations within which the Volpertas process can always be successfully performed. Whereas Volpertas teaches that the add-back method should be used in the first drying stage until the moisture content of the mixture has been reduced by about one-half, Rivoche teaches that said method should be employed until the mixture contains not more than about one-half of its original moisture content. When the initial drying stage is conducted to that point or below, the then moist powder can be dried by heat without substantial risk of case-hardening. The British application which serves as the basis for Rivoche's United States patent was filed on September 16, 1939.
These processes were first introduced to Templeton by Rivoche in Great Britain in 1939. For several years Templeton had been interested in the vegetable drying industry and had made studies in Europe to determine if a successful process for manufacturing an instant mash potato powder had been discovered. Rivoche was the first to show him an acceptable product and to disclose a feasible process for making the same. A year later Templeton obtained exclusive licenses to the processes in question in behalf of Farmers' Marketing & Supply Company, plaintiff's predecessor. During World War II an instant mash potato drying industry arose in Great Britain based upon these same or similar processes.
Meanwhile in the United States the defendant was engaged in fruitless efforts to discover or obtain a successful process to fill the needs of our government. Defendant met with no success despite the fact that it had adequate facilities, finances, and skilled men in the art. Its expert witness, Ray W. Kueneman, had been employed by the Department of Agriculture during World War II. He had visited dehydration plants abroad to gather information for our government, and had seen and made diagrams of plant operations in Great Britain which were using processes similar to the ones in suit. After the war the defendant employed his services, but for the next five years a successful process still eluded it. Templeton visited the United States in 1945 and became acquainted with defendant's efforts. Defendant's officers professed an interest in plaintiff's processes; however, at this time plaintiff had not perfected its rights thereto in this country.
Templeton returned to the United States in 1949. Having acquired to his satisfaction the exclusive world-wide rights to the above processes, he made another visit to the State of Idaho to confer with the officials of the defendant company. They expressed an interest in joining forces to develop the product in this country. On March 4, 1949, Templeton conducted a series of demonstrations at the defendant's plant in Caldwell, Idaho, during which he disclosed what he considered to be the basic teachings of the patents in suit. The record discloses that defendant was highly impressed by, and interested in, the processes. The parties reached an informal understanding in regard to developing the processes and the industry in this country, which was to be formalized later subject to the approval of their respective legal counsel. The terms of said agreement were left to future negotiations which, as events transpired, were very extended, and the parties ultimately failed to reach an understanding. The nature and extent of their dealings is more pertinent to plaintiff's contract action. Suffice it to say here that while said negotiations were being conducted the Korean War occurred and defendant went into production to help fill the needs of our government. Defendant made no attempt at the trial to explain this sudden transition from failure to success in processing an instant mash potato powder. The conclusion is inescapable that it adopted the teachings of said patents for its own operations.
The parties are in substantial agreement on what defendant's process is, and has been, since it began production. Its process is illustrated by Plaintiff's Exhibits No. 6 and No. 14, each of which was thoroughly explained by witness Ray W. Kueneman, director of research and development for the food processing division of the defendant company. It uses the Faitelowitz two-stage drying principle, but instead of drying by heat in the first stage as Faitelowitz teaches, defendant uses the add-back method. By this method defendant has always reduced the moisture content of the mixture to between 30 and 40 per cent before beginning the second drying stage. Defendant conducts the second drying stage by means of heat, or a stream of hot air, using dryers which operate under a slightly subatmospheric pressure. This drying system reduces the moisture content of the mixture to approximately 12 to 14 per cent. Thereafter the moist powder is sifted and put through another system which reduces it to a finished product containing not more than about 6 to 7 per cent of its original moisture.
Plaintiff submits that what takes place in defendant's process after the sifting step is not relevant to the question of infringement (Tr. 117), and defendant does not quarrel with this contention. Nor does defendant argue that the various apparatus used in its process from time to time or the minor changes made in the steps of the process in any manner changed the basic nature thereof, and the Court finds this to be the fact.
CASE NO. 3514 PATENT INFRINGEMENT
In considering the issues raised by plaintiff's patent infringement suit, the Court is mindful that the usual practice is to determine the question of the validity of the patent before passing on the question of infringement. However, it appears that there is an exception to this rule where non-infringement is apparent and the patent involved is not clearly invalid or merely a paper patent. Kierulff v. Metropolitan Stevedore Company, 300 F.2d 614 (9th Cir. 1962); Kemart Corp. v. Printing Arts Research Laboratories, 201 F.2d 624 (9th Cir. 1953). Under those circumstances the issue of validity is considered academic as, of course, are the other defenses raised by the alleged infringer, which are numerous in most patent infringement cases. The Faitelowitz and Volpertas patents in suit are most susceptible of disposition in the above manner, for the Court finds that defendant's process clearly does not infringe any of the claims of said patents.
'A method of reducing potatoes and other starch-containing vegetables to the form of a dry powder in which the starch is preserved in its initial form which comprises cooking the vegetables at a temperature which must not substantially exceed 100 degrees C., cutting the cooked vegetables into small pieces, partially drying the pieces, at a temperature which also must not substantially exceed 100 degrees C. until they have lost at the most about 60% By weight of their initial water-content, reducing the partially dried pieces to the form of a moist powder, at further drying the moist powder, at a temperature which must not greatly exceed 80 degrees C., until it has a water-content of approximately 10-15% By weight.' (Plaintiff's Exhibit No. 1).
Each of the remaining claims of the Faitelowitz patent is dependent on claim 1. Hence, each is based on a process which accomplishes the all-important initial drying stage by means of heat which must not substantially exceed 100 degrees C. In comparing defendant's process with these claims, it is obvious that defendant accomplishes this stage by using the add-back method which does not involve, and is contrary to, the method employed by Faitelowitz. Add-back is the improvement attributed to Volpertas and which is specifically disclosed in claims 16 and 17 of the Rivoche patent. Plaintiff urges that the doctrine of equivalents is applicable, but does not attempt ...