1247

E. I. du PONT de NEMOURS & COMPANY, Appellant, v.

BERKLEY AND COMPANY, INC., Appellee.

E. I. du PONT de NEMOURS & COMPANY, Appellee, v.

BERKLEY AND COMPANY, INC., Appellant.

Nos. 79-1219, 79-1231.

United States Court of Appeals, Eighth Circuit.

Submitted Sept. 12, 1979. Decided Feb. 13, 1980.

Rehearing and Rehearing En Bane Denied March 17, 1980.

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John 0. Tramontine, Fish & Neave, New York City (argued), Charles R. Wolle, Shull, Marshall & Marks, Sioux City, Iowa, Robert C. Morgan, and Christopher K. Hu, New York City, on brief, for E. I. du Pont, etc.

Dennis W. Johnson and David W. Belin, Des Moines, Iowa (argued), Orrin M. Haugen and Thomas Nikolai, Haugen & Nikolai, Minneapolis, Minn., Belin, Harris, Helmick & Lovrien, Des Moines, Iowa, and William J. Rawlings, Kindig, Beebe, McCluhan, Rawlings & Nieland, Sioux City/Iowa, on brief, for Berkley and Co., Inc.

Before BRIGHT and HENLEY, Circuit Judges, and MARKEY, Chief Judge ^{Footnote *} .

MARKEY, Chief Judge.

E. I. du Pont de Nemours & Company (DuPont) appeals from a judgment holding invalid its United States patent No. 3,063,189 (DuPont patent). Berkley & Company, Inc. (Berkley) appeals the dismissal of its antitrust counterclaim and denial of its motion for attorney's fees and costs. We reverse the judgment of invalidity, remand for a new trial on that issue, and affirm the dismissal of the counterclaim.^{Footnote 1}

Background

The patent in suit, like most patents, discloses a proposed solution for a problem. When colored fishing lines are used, to enable the fisherman to see them above water, the lines are thought to be visible underwater to the fish.^{Footnote 2} When transparent lines are used, to limit visibility to fish, the fisherman can't see the lines resulting in tangled lines when several are used from one boat.

The solution proposed by Ed Keller, DuPont's employee, was a fishing line containing fluorescent dye. The dye would be activated, i.e., the line would glow, in response to the ultraviolet component of daylight, making it "visible above water." At the same time, because water would absorb the dye-activating ultraviolet component of daylight, the line would be "relatively invisible" below the water. Thus one line would have the characteristics of high visibility above water and low visibility below water. Keller filed a U.S. patent application on January 2, 1962. DuPont introduced its fluorescent dyed line to the marketplace in August, 1962. The DuPont patent issued on November 13, 1962 ^{Footnote 3} to DuPont, Keller's assignee.

In November 1962, Berkley began making and selling a fluorescent fishing line, but ceased in 1968 when DuPont gave notice of infringement. Berkley's subsequent efforts to produce a "High Visibility" line that would not infringe were unsuccessful, its use of anthanilic acid producing a line half as bright as DuPont's. In December 1974, after unproductive licensing discussions with DuPont, Berkley again began making and selling a fluorescent fishing line.

On August 1, 1975, DuPont sued Berkley for willful infringement of claims 1, 2, 5, 6 and 8 of the DuPont patent. Berkley denied infringement throughout a three-year discovery period, asserting that its line contained an "optical brightener" in place of fluorescent dye. Two weeks before trial, Berkley admitted that claims 2, 5 and 6, if valid, were infringed by its product. DuPont thereupon deleted claims 1 and 8 from its charge of infringement.

For its defense, Berkley alleged (1) that the DuPont patent was invalid for lack of utility, novelty and nonobviousness, and (2) that the patent was rendered invalid by DuPont's fraudulent conduct before the U.S. Patent and Trademark Office (PTO).

For its counterclaim, Berkley alleged that DuPont violated Section 2 of the Sherman Act by procuring the patent through fraud and by attempting to enforce the patent with knowledge of its invalidity. ^{Footnote 4}

Over Berkley's objection, the trial court ordered a bifurcated trial, the first part to include the allegations that DuPont obtained the patent by fraud and enforced it believing it invalid. The second part, on the remaining elements of the antitrust claim, would be held if the jury found for Berkley on fraud or enforcement.

Following a three-week trial, the jury returned a general verdict for Berkley on DuPont's infringement claim. The jury answered these, and only these, special inB terrogatories: Q: Did plaintiff obtain the ... [DuPont] patent from the patent office by fraud? A: No.

Q: Did plaintiff assert its patent against Berkley knowing that it was invalid? A: No.

Q: Did you find for defendant solely because the patent was obvious? A: No.

The court entered judgment, holding the DuPont patent invalid and dismissing the complaint and counterclaim. Both parties filed, and the court denied, motions for judgment notwithstanding the verdict or for a new trial.

Issues Embittered in battle below, the parties request this court to resolve over 25 issues and subissues. The trial court is directly charged with 11 reversible errors. Couched in accusatory and turgid terminology, the briefs set forth numerous bits and pieces of conflicting testimony and documentary evidence, from which we are asked to draw a plethora of factual inferences. The effect is neither a prejudicing of this court,

against either side, nor a simplifying clarification. The result is a necessarily extended opinion, based on a searching review of an entire 4000 page record, and in which the issues treated will appear in section headings. ^{Footnote 6}

OPINION

I. Validity

A. Requirement for Retrial Absent error affecting the substantial rights of the parties, neither reversal nor a new trial is required. 28 U.S.C. § 2111 (1976); Fed.R.Civ.P. 61. ^{Footnote 7}

When the error misled the jury or had a probable effect on its verdict, reversal and a new trial are appropriate. International Merger & Acquisition Consultants, Inc. v. Armac Enterprises, Inc.,  531 F.2d 821, 823 (7th Cir. 1976); Conway v. Chemical Leaman Tank Lines, Inc.,  525 F.2d 927, 929-30 (5th Cir. 1976); Hoffman v. Sterling Drug, Inc.,  485 F.2d 132, 140 (3d Cir. 1973); See Kotteakos v. United States,  328 U.S. 750, 764-65. 66 S.Ct. 1239, 1247-1248, 90 L.Ed. 1557 (1946).

Respecting the issue of patent validity under the statute, the court asked the jury to state only whether it found for Berkley "solely" on obviousness. The jury's "No" answer means that there were six possible bases for its verdict: (1) the invention would have been obvious and was lacking in utility, (2) the invention would have been obvious and was lacking in novelty, (3) the invention would have been obvious and was lacking in both utility and novelty, (4) the invention would not have been obvious, but was lacking in utility, (5) the invention would not have been obvious, but was lacking in novelty, or (6) the invention would not have been obvious, but was lacking in novelty and utility.

If one or more substantial grounds for the verdict presented no jury question and should have been decided as a matter of law in DuPont's favor, reversal and a new trial are required, notwithstanding the presence of other grounds that could have supported the verdict. MorrisSey v. National Maritime Union,  544 F.2d 19, 26-27 (2d Cir. 1976); Albergo v. Reading Co.,  372 F.2d 83, 85-86 (3d Cir. 1966), cert, denied, 386 U.S. 983, 87 S.Ct. 1284, 18 L.Ed.2d 232 (1967); Fatovic v. Nederlandsch-Ameridaansche Stoomvaart,  275 F.2d 188, 190 (2d Cir. 1960); North American Graphite Corp. v. Allan, 87 U.S.App.D.C. 154, 156,  184 F.2d 387, 389 (D.C. Cir. 1950); Traveler's Insurance Co. v. Wilkes, 76 F.2d 701, 705 (5th Cir.), cert, denied', 296 U.S. 604, 56 S.Ct. 120, 80 L.Ed.2d 428 (1935); Patton v. Wells, 121 F. 337, 340 (8th Cir. 1903). See also Sunkist v. Winckler & Smith Co.,  370 U.S. 19, 29-30, 82 S.Ct. 1130, 1135-1136, 8 L.Ed.2d 305 (1962) (erroneous instruction); United Pilots Ass'n v. Halecki,  358 U.S. 613, 619, 79 S.Ct. 517, 520, 3 L.Ed.2d 541 (1959) (failure to submit jury question); Maryland v. Baldwin, 112 U.S. 490, 493, 5 S.Ct. 278, 279, 28 L.Ed. 822 (1884) (admission of evidence). The utility issue presented no jury question

and should have been decided as a matter of law in DuPont's favor. Its submission to the jury, in the circumstances of this case, requires a retrial of the validity issue. ^{Footnote 8}

Berkley concentrated its briefs and oral argument on non-utility, fraud, knowing enforcement of an invalid patent, gross negligence, inequitable conduct, and anticompetitive intent, believing, says Berkley, that that evidence shows the patent invalid. Havi