The opinion of the court was delivered by: MCVICAR
After hearing, the Court makes the following findings of fact and conclusions of law:
1. This is an action to recover damages and for injunctive relief by reason of alleged infringement by defendant of Kathner method patent 1,810,612 and Kathner Reissue patent 17,413.
2. Plaintiff, the Duraloy Company, is a corporation and citizen of the State of Delaware. The defendant, the Carnegie-Illinois Steel Company (successor to the American Sheet & Tin Plate Company) is a corporation of the State of New Jersey.
Kathner Patent 1,810,612.
3. Arthur T. Kathner filed his application in the office of the Commissioner of Patents of the United States, February 9, 1929, for a method of heat treating metal. June 16, 1931, patent 1,810,612 was granted to said Kathner.
4. The process of Kathner Patent 1,810,612 embodies steps for normalizing low carbon sheet. The process produces a double refinement of the grains of the steel by recrystallizing the steel into austenite during heating and recrystallizing the austenite into ferrite and eutectoid on cooling develops ductility and softness suitable for deep drawing operations without further treatment; develops a high degree of uniformity in ductility, softness and grain size throughout each sheet and throughout successive sheets treated; frees the steel of transformation stresses and prevents supersaturation of carbon in the ferrite, thereby avoiding quench aging or the loss of ductility and softness with the passage of time.
5. This patent had a limited commercial success.
6. July 23, 1929, Kathner, in writing, granted to the Duraloy Company, plaintiff, the exclusive license to make, use and sell apparatus embodying and to practice the inventions and improvements described in patent 1,810,612, also, in his Reissue patent No. 17,413, with the right to the Duraloy Company to sue and collect for infringement of said patents. This action was brought January 28, 1937.
7. Patent No. 1,810,612 contains three claims. Claim 2 is an example claim and reads as follows:
"The herein described method of heat treating steel which resides in passing low carbon steel continuously and in the presence of non-oxidizing gases through communicating heating and cooling zones of a furnace, heating the steel in the heating zone to a temperature above the upper critical temperature range of the steel and between about 1600 degrees F., and 1950 degrees F., cooling the steel in the cooling zone to about a dull red heat, discharging the steel from the furnace at such a temperature that the steel will have reached about a black heat when discharged into the open air, and controlling the speed of travel of the steel thru the said zones so that the time consumed by the steel in passing thru the cooling zone is approximately one half of the time consumed in passing thru the furnace."
8. The Weirton Steel Company built a furnace according to Kathner's design and method, which was put into commercial operation by that Company on or about January 1, 1927, more than two years prior to the filing date (February 9, 1929) of the Kathner patent 1,810,612 in suit. The method of normalizing low carbon steel sheets as claimed in patent 1,810,612, was publicly and commercially used in the normalizing of several hundred tons of low carbon steel sheets prior to February 9, 1927.
9. "Normalizing" low carbon steel sheets consists in heating them above the upper critical temperature (about 1620 degrees F.), holding at this temperature for a time and then cooling fairly rapidly. Normalizing low carbon steel sheets to produce a tough, fine grain steel for deep drawing purposes had been known and practiced for many years prior to the application of Kathner for the above patent.
10. Scaling of heated steel sheets could be prevented by cooling the sheets in a non-oxidizing atmosphere to a non-scaling temperature of about a dull red or black heat before discharging them into the open air.
11. Prior to about 1924, low carbon sheets for deep drawing purposes were normalized in normalizing furnaces from which they were discharged into the open air. While this produced some scaling of the surfaces, such sheets met the requirements of the art at that time.
12. In about 1924 or 1925, the automobile industry began demanding not only a tough deep drawing steel sheet but also one having a smooth finish. This demand was met prior to the Kathner patents by steel manufacturers, by adding to the old normalizing furnaces cooling chambers in which the steel sheets were cooled in a non-oxidizing atmosphere to a non-scaling temperature (dull red or black heat) before the sheets were discharged into the open air.
13. In 1925 Otis Steel Company constructed a normalizing furnace known as the No. 1 furnace having aligned, communicating heating and cooling chambers of approximately the same length. This furnace was used commercially for the normalizing of low carbon steel sheets substantially continuously from July 1925 until November 1928. Such sheets were passed continuously and in the presence of non-oxidizing gases through the heating and cooling chambers and were heated to above the upper critical temperature in the heating chamber and cooled in the cooling chamber and discharged therefrom at about a black heat and at times at a very dull red heat. The speed of travel of the sheets was the same in the heating and cooling zones so that they were in the cooling chamber slightly longer than in the heating chamber. The sheets as discharged from the furnace were pack cooled.
14. The product of the No. 1 Otis furnace was normalized sheets having fine grain, good drawing qualities and uniformity of physical characteristics and these sheets were used in the automobile trade for deep drawing and extra deep drawing purposes and met the requirements of the trade.
16. In 1924, the Sharon Steel Hoop Company used commercially in the normalizing of low carbon steel sheets, a furnace having a 30 foot heating chamber and an enclosed cooling chamber formed by covering the run-out table at the end of the heating chamber. This cooling chamber was about 45 feet long. This furnace had a fire wall and an adjustable door between the heating and cooling chambers and conveying mechanism in both. The sheets were passed continuously and in the presence of non-oxidizing gases through the heating and cooling chambers, were heated above the upper critical temperature, and discharged from the cooling chamber at temperatures ranging from a black to a dull red heat. The sheets were pack cooled.
17. In January 1925, the furnace was modified to provide both the heating and colling chambers within the furnace proper. The length of the cooling zone was varied by shutting off some of the burners at the discharge end thereof. In some regular commercial operations they were shut off so that the heating and cooling zones were of substantially equal lengths. In regular commercial production in 1925 and subsequently, low carbon sheets were passed continuously and in the presence of non-oxidizing gases through the heating and cooling zones, were heated above the upper critical temperature, and were discharged at temperatures varying from a black to a dull red heat. The sheets were pack cooled.
18. A furnace known as the No. 6 furnace was built by Sharon Steel Hoop Company and placed in operation in May, 1926. This furnace was used thereafter both for normalizing and for annealing low carbon sheets for deep drawing purposes. The burners on this furnace were manipulated to shorten the heating chamber and lengthen the cooling chamber in normalizing operations. The sheets were discharged from this furnace somewhat hotter than on the lengthened furnace. The sheets were pack cooled.
19. Swindell Brothers & Company, in 1925, built a furnace for Pittsburgh Cold Rolled Steel Company, in which low carbon steel strip was normalized. A copper coating was applied to the strip which was passed through the heating chamber and the copper coating was fused to the strip, and the strip was normalized by being heated above the upper critical temperature. The strip was then cooled in a closed cooling chamber while still subjected to a non-oxidizing atmosphere to a dead black heat.
20. The Ruder patent 1,156,496 discloses a furnace for heat treating steel sheets in a non-oxidizing atmosphere and having a cooling chamber approximately of the same length as the heating chamber. The heating temperature specified by Ruder is definitely a normalizing temperature. The Ruder patent discloses the application of his furnace to the heat treating of silicon steel sheets. Silicon steel sheets and low carbon steel sheets "are not so different in contents or properties that its prior use on one of them is not a valid reference against patentability in its application to the other."
21. The Marsh & Cochran patent 1,610,567 discloses two processes: (1) a process of normalizing steel sheets in which the sheets are passed through heating and cooling zones of a furnace, are heated in the heating zone to a temperature above the upper critical point, and are cooled in the cooling zone to a non-scaling or dull red heat at a temperature of 1200 to 1400 degrees F., discharged into the open air, piled in packs and allowed to cool slowly in packs; (2) essentially the same process but the cooling time in the furnace is prolonged so that the sheets issue into the air at a dead black heat of approximately 400 degrees F.
22. The March & Cochran patent No. 1,610,567 was the principal prior art reference relied upon by the Patent Office in the prosecution of the application for the Kathner patent No. 1,810,612, and the claims in suit were allowed over Marsh & Cochran by a Board of Appeals in the Patent Office, consisting of an assistant commissioner and two examiners in chief.