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Berry Plastics Corp. v. Intertape Polymer Corp.

United States District Court, S.D. Indiana, Evansville Division

August 25, 2016

BERRY PLASTICS CORPORATION, Plaintiff,
v.
INTERTAPE POLYMER CORPORATION, Defendant.

FINDINGS OF FACT AND CONCLUSIONS OF LAW

          RICHARD L. YOUNG, CHIEF JUDGE.

         Plaintiff, Berry Plastics Corporation (“Berry”), is a direct competitor of Intertape Polymer Corporation (“Intertape”), in the manufacture and sale of a variety of tapes, including adhesive tapes. Intertape is the assignee of United States Patent No. 7, 476, 416 (“'416 patent”) which claims, inter alia, a manufacturing process for preparing an adhesive using a specially modified planetary roller extruder (“PRE”) that includes planetary mixing spindles with back-cut helical flights. On May 13, 2010, Berry filed a declaratory judgment action against Intertape, alleging that the ‘416 patent is invalid and unenforceable. Intertape filed a Counterclaim against Berry, alleging that Berry's PRE infringes independent Claims 1 and 21, and the associated dependent claims, of the ‘416 patent. The parties tried this case before a jury from November 3, 2014, to November 17, 2014. The jury found that, inter alia, Intertape's ‘416 patent was valid[1] and that Berry's PRE did not infringe the '416 patent. (See generally Verdict Form, Filing No. 378). Berry's inequitable conduct trial remained for adjudication.

         The parties tried Berry's inequitable conduct claim before the court on December 7-8, 2015. Following the trial, the parties filed proposed findings of fact and conclusions of law. Being duly advised, the court further finds that Berry failed to prove, by clear and convincing evidence, that the ‘416 patent is unenforceable due to inequitable conduct.

         The court now issues its findings of fact and conclusions of law pursuant to Federal Rule of Civil Procedure 52(a):

         I. FINDINGS OF FACT

         1. Intertape is the owner by assignment of the ‘416 patent issued on January 13, 2009. (ITX-66[2] (‘416 patent)). The asserted ‘416 patent describes and claims a continuous process for preparing adhesive tape from raw materials, including a non-thermoplastic elastomer (i.e., natural rubber) and tackifying resins, using a planetary roller extruder (“PRE”) that includes at least one double transversal mixing spindle comprising a plurality of back-cut helical flights. The double transversal spindles, known as “back-cut spindles, ” are designed to increase the residence time of raw materials in the extruder, which thereby increases mixing and mastication[3] of the materials. The process claimed in the ‘416 patent uses at least one back-cut spindle to reduce the viscosity of the adhesive mass so that the finished adhesive can be more easily coated on to a web-form material using conventional equipment. (Id. col. 4, ll:24-56; id. col. 7, ll:14-41).

         2. The named inventors are John Tynan, Jr., Richard St. Coeur, David Kovach, and Thomas Lombardo. (See id.; Filing No. 391, Tynan Tr. at 36). At the time the patent was issued, the inventors were employees of Intertape. (Id.).

         3. Mark Levy and John Kane prepared and prosecuted the 60/524, 505 provisional application and 10/997, 827 non-provisional patent application that resulted in the ‘416 patent. (Filing No. 493-6, Kane Dep. Tr. at 22).

         A. Intertape Learns of Planetary Roller Extruders

         4. In the early 2000s, Intertape compounded natural rubber through a Banbury or batch process, which compounds natural rubber one batch at a time. (Tynan Tr. at 20 (describing the batch process as “kind of like making a cake”)).

         5. In 2002, Intertape learned from a German patent publication that one of its competitors, Tesa AG (also known as “Beiersdorf”), had developed a continuous adhesive-making process using a PRE. (Tynan Tr. at 37). In April 2002, Kovach and a colleague prepared an English translation of the patent. (Kovach Tr. at 42-43; St. Coeur Tr. at 7-8).

         6. Intertape had never heard of a PRE before reading the Beiersdorf patent. (Tynan Tr. at 38).

         7. Intertape decided to explore this new method of compounding natural rubber. (Id. at 30).

         B. October 2002 European Trip

         1. Visit to Battenfeld Extrusionstechnik GmbH

         8. Through research, Intertape discovered that Battenfeld Extrusionstechnik GmbH, a German multi-national manufacturer of mixing equipment, designed and manufactured PREs. (Tynan Tr. at 39).

         9. Tynan, Lombardo, and St. Coeur traveled to Germany to meet with Battenfeld representatives on October 16, 2002. (ITX-5). During their 2002 meeting, Battenfeld showed the Inventors PowerPoint Presentations on PRE technology. (Id. at 6).

         10. Intertape learned that a PRE had “ten times the thermal-exchange capability of a twin-screw extruder . . ., so [Intertape] was intrigued.” (Tynan Tr. at 43; see also ITX-5 at 6 (noting the PRE's ability to “provide good mixing in materials that are shear sensitive” and “thermally sensitive”).

         11. Representatives of Battenfeld also introduced Intertape to different types of planetary spindles for use in a PRE. (St. Coeur Tr. at 56-57; see also ITX-5). Intertape learned from Battenfeld that “you can achieve different mixing effects when you go from a spindle, full-flight spindle without notches, to a spindle with notches.” (Tynan Tr. at 43-44). Tynan explained that “when you put notches in them, you get some back-slip of the material; you get some flow-back of the material. And the material that flows back stays in the compounding zone longer than the material that gets moved forward” resulting in “more mastication.” (Id. at 44; St. Coeur Tr. at 57 (“[T]hey said you can cut notches into the spindle for different mixing dynamics.”)).

         12. The Inventors were already familiar with back-cut mixing spindles from their work with twin-screw extruders. (See Filing No. 402, Kovach Tr. at 11 (“I used that style extensively in my work with the twin-screw extruders”). Kovach knew from his experience that the back-cut configuration is “designed to add more mixing and mastication.” (Id. at 54-55).

         13. Battenfeld encouraged Intertape to run a search for U.S. patents belonging to Beiersdorf that might impede the Inventors' efforts to develop their own adhesive compounding process in the U.S. (ITX-5 at 8).

         2. Maris

         14. Intertape's European trip also included a visit to Maris, an Italian manufacturer of twin-screw compounding extruders. (Id. at 2, 13-17; Tynan Tr. at 131). A twin-screw extruder has two connected barrels with two co-rotating screws. (Tynan Tr. at 31).

         15. Intertape wanted to meet with the Maris representatives “to identify the advancements Maris ha[d] made on the compounding of natural-rubber-based pressure-sensitive adhesives.” (ITX-6 at 1). The meeting with Maris representatives occurred on October 21, 2002. (ITX-5 at 13).

         16. Maris “[c]laimed to have developed a process that allows for continuous compounding of solvent-based adhesives in a twin screw compounder.” (ITX-5 at 2).

         17. Twin-screw extruders produce a lot of heat which can degrade the rubber. (Tynan Tr. at 34-35). Maris' “[p]rocess development focused on keeping temperatures from running away.” (ITX-5 at 16). Intertape noted, “Solid resin adds via sidefeeders dropped temperature.” (Id. at 16).

         18. The use of sidefeeders, solid resin, etc., “was known to [Intertape]” as a means to “cool[] the adhesive down.” (Tynan Tr. at 137).

         19. According to Berry, Intertape learned from the Maris continuous process disclosure that (i) introduction of solid materials in the compounding section has advantages, (ii) all solid materials do not have to be fed all at once in the feeding section, with downstream solids additions, (iii) the elastomer is given more time to be masticated before addition of other materials, (iv) solid resin is easier to mix with rubber because molten resin lubricates, and (v) the solid materials act as a heat sink to lower the process temperature. (ITX-5 at 15-16).

         20. Furthermore, Berry argues, the Inventors had not conceived of the above ideas prior to their meeting with Maris representatives.

         21. Berry did not plead this basis for inequitable conduct, nor was it disclosed or argued at the inequitable conduct court trial.

         C. The 3M Opposition to the Beiersdorf Patent

         22. Following their European trip, Tynan requested an extensive search for Beiersdorf patents as Battenfeld had suggested. (Tynan Tr. at 45-46, 151).

         23. Intertape learned that Beiersdorf had obtained a U.S. patent on its process of manufacturing an adhesive using a PRE. (Id. at 43-44). Beiersdorf's U.S. Patent No. 6, 506, 447 (“‘447 patent”) generally claims a continuous, solvent-free, and mastication-free process for producing a pressure-sensitive adhesive from a non-thermoplastic elastomer in a PRE. (ITX-7, claim 1). The ‘447 patent issued from a patent application filed in the PTO on August 17, 2000. (Id. at 1).

         24. Intertape also discovered Beiersdorf's European application was being opposed by 3M. (Tynan Tr. at 152-53).

         25. The 3M Opposition was dated February 20, 2003, and uncovered by Intertape sometime before May 5, 2003. (ITX-20; Tynan Tr. at 150-53; ITX-16 (“Where is Beiersdorf's rebuttal of 3M's contest of Beiersdorf's patent?”)).

         26. The 3M Opposition to the Beiersdorf patent application centered on the patent's assertions of ‘mastication-free' and asserted that such claims were invalid as not enabled. (See, e.g., ITX-20 at 3 (“According to this definition, the term ‘mastication-free' would mean that in the process of EP ‘584 there is no molecular weight breakdown of the elastomer at all.”); Tynan Tr. at 152-53; PTX-150; Levy Tr. at 52-55)). Specifically, the Beiersdorf application claimed that there was a difference between the mastication of elastomers and the degradation of elastomers. 3M argued this differentiation between mastication and degradation “is artificial and not a technically sound concept. How can a molecule which is broken down tell whether it was masticated or degraded? What difference does it make if the molecular weight breakdown of elastomers is referred to by two different terms; isn't it still the same process?” (ITX-20-3).

         27. At Intertape's request, Prosecution Counsel monitored the 3M Opposition in Germany quarterly. (Filing No. 529, Tynan Bench Trial Tr. at 55, 131; Filing No. 530, Levy Bench Trial Tr. at 9-14).

         28. Kane directly monitored the European prosecutions and provided selected documents to Levy when they appeared to be relevant. (Kane Dep. Tr. at 28-29, 36; Levy Tr. at 52; Levy Bench Trial Tr. at 12-13). Tynan primarily interacted with Levy, and thus any information from the 3M Opposition would have come from him. (Tynan Bench Trial Tr. at 27, 131-32).

         29. Kane could not recall any specific documents he submitted to Levy. (Kane Dep. Tr. at 29). Levy, in turn, could not recall any specific documents he received from Kane. (See Levy Tr. at 52 (testifying he did not recall reviewing a specific document)).

         30. There is insufficient evidence to determine which documents or information Tynan subsequently obtained. (Tynan Bench Trial Tr. at 52-53, 62-63).

         D. 2003 Trials at Battenfeld

         31. In April 2003, Tynan, St. Coeur, and Kovach traveled to Germany to fully explore the advantages of a PRE for compounding natural-rubber-based adhesives without the use of solvent. (Id. at 41, 62; Kovach Tr. at 14).

         32. One of Intertape's goals of the trials was to invalidate the ‘447 patent claims because mastication-free PRE compounding of rubber was not possible and Intertape regarded the patent as an “obstacle.” (Tynan Tr. at 56, 143-44, 200 (“Q: You did think that everyone knows, including Beiersdorf [, ] that it's impossible not to masticate on the PRE equipment; is that correct? A: I said that, yes.”); St. Coeur Tr. at 59).

         33. During the trials of Battenfeld's PRE, Intertape used Battenfeld's test set-up, which included only standard spindles. (St. Coeur Tr. 13, 55; Kovach Tr. at 55; Tynan Tr. at 64, 198). Kovach testified they went there “for a free trial they were gracious enough to offer us, and so we were going to let them demonstrate their equipment for us.” (Kovach Tr. at 56).

         34. Battenfeld discussed the types of planetary spindles available for PREs, including back-cut planetary spindles, and the Inventors took photographs of them. (Tynan Tr. at 63-64; Kovah Tr. at 19).

         35. Intertape discovered, as a result of the trials, that it “could take natural rubber, tackifying resin, extender, masticate the rubber in the PRE, produce an adhesive, and it had an exceptional balance of adhesion and cohesive strength.” (Tynan Tr. at 65).

         36. Intertape performed a molecular weight analysis of samples returned from the Battenfeld trials that confirmed mastication occurred. (ITX-18 at 2 (“There is significant molecular weight breakdown in adhesives compounded with the PRE.”)).

         37. Intertape shared the molecular weight data and conclusions with Prosecution Counsel Levy, and explained that “[t]his information refutes claims made in Beirsdorf [sic] patents.” (ITX-18 at 1).

         38. Following the Battendorf trials, Intertape determined that it was not infringing the Beiersdorf's “mastication-free” process, and “decided [to] move ahead with [its] better process.” (Tynan Tr. at 67).

         E. Entex Rust & Mitschke GmbH

         1. The DIK Paper

         39. Intertape identified Entex Rust & Mitschke GmbH as a manufacturer of PREs from the specification of the ‘447 patent. (Kovach Tr. at 21).

         40. In June 2003, St. Coeur, Kovach, and Lombardo attended a National Plastics Expo (“NPE”) in Chicago, Illinois, to find out whether Entex's processing lab could handle flammable solvents. (Tynan Bench Trial Tr. at 88-89).

         41. Of the three Inventors who attended the NPE, only Kovach and Lombardo met with Entex sales representative Michael Batton. (St. Coeur Bench Trial Tr. at 204).

         42. Batton testified that he handed Kovach and Lombardo a copy of a speech that he gave and distributed to the attendees of a DIK seminar in Hannover, Germany on March 23, 2003. (Filing No. 410, Batton Tr. at 26, 67, 72). The speech is titled “Rubber - the tailor-made material” and subtitled “Compounding of Elastomer Masses in a Planetary Roller Extruder.” (PTX-37 (“DIK Paper”)).

         43. The DIK Paper discloses that a PRE can be used to compound rubber-based formulations. (Id., Fig. 20; Rauwendaal Tr. at 170; Mount Tr. at 62). It also discloses an exemplary process diagram, (PTX-37 at 12), and states that a PRE can be fed with rubber, resin and other constituents simultaneously. It especially mentions that the modular PRE system allows “compounding of materials which are difficult to disperse or homogenize, as for example recycled materials, adhesives, caoutchoucs, etc.” (PTX-37 at 15; Rauwendaal Tr. at 171). And it discloses that such a system could be set up with spindles satisfying claim 1, such as the Noppenspindel. (PTX-37 at 16, Fig. 20; Mount Tr. at 68-69, 143; see also Rauwendaal Tr. at 171 (testifying that the DIK Paper discloses a PRE modular design to manufacture adhesives and discloses the claimed spindle)).

         44. Kovach testified that Batton did not give him a copy of the DIK Paper. (Kovach Tr. at 27).

         45. Kovach memorialized the Inventor's meeting with Batton in a memo he prepared and distributed a few days after the NPE. (ITX-22 (Kovach's memo); Kovach Tr. at 24-25, 82). The DIK Paper is not mentioned in the memo. Kovach testified that, if he had received the DIK Paper, it would have been issued a document number and filed along with the memo. (Kovach Tr. at 27, 82-83; see also Filing No. 493-8, Lombardo Dep. Tr. at 106 (confirming that “it [was] the practice of [the Inventors] to circulate information with each other that was relevant to the PRE work [they] were doing”); Tynan Bench Trial Tr. at 161 (same)).

         46. Lombardo does not recall receiving the DIK Paper from Batton. (Filing No. 493-7, Lombardo Dep. Tr. at 45-46).

         47. St. Coeur testified that he did not receive any materials from the Entex booth at the NPE, did not see any materials that were available for visitors to take from the Entex booth, and did not see any materials received by Lombardo or Kovach from the Entex booth. (St. Coeur Tr. at 15, 61-62). He further testified that it would have been “odd” if Lombardo or Kovach had received materials from Batton but did not share those materials with him. (St. Coeur Bench Trial Tr. at 205).

         48. Tynan and Prosecution Counsel testified that they never saw or had possession of the DIK Paper during prosecution of the ‘416 patent. (Tynan Bench Trial Tr. at 161; Filing No. 493-6, Kane Dep. Tr. at 80; Filing No. 401, Levy Tr. at 28-29). Furthermore, Intertape searched its files for the DIK Paper, but did not find it. (Tynan Bench Trial Tr. at 161-62).

         2. Entex Trials

         49. After discussions with Batton, Intertape learned that Entex had a lab-scale PRE that was capable of processing solvents. (Kovach Tr. at 25; St. Coeur Tr. at 15). The ability to use solvents was important to Intertape because Intertape used solvents in several of its manufacturing plants. (Kovach ...


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