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Carpenter Technology Corp v. Allegheny Technologies Inc.

August 2, 2011


The opinion of the court was delivered by: Stengel, J.


The parties in this case, Carpenter Technologies, Inc. ("Carpenter") and Allegheny Technologies Inc./ATI Properties ("ATI"), are business competitors in the manufacture and sale of specialty alloys. The defendant, ATI, is the owner of the "564 Patent, entitled "A Method for Producing Large Diameter Ingots of Nickel Base Alloys." Carpenter has moved for summary judgment of invalidity of Claims 1-11, 13, 14, 16-18, 21, and 27-31 of the patent, on the ground that the patent as issued was obvious. For the reasons set forth below, I will deny the motion.


The specialty alloy ingots made by Carpenter and ATI are primarily used in the aerospace and energy industries. Pl.‟s Statement of Material Fact in Supp. Of Motion for Summ. J. Based on 35 U.S.C. § 103(a) ("Carpenter SMF") ¶ 1.*fn1 The specialty alloys relevant to this motion are Alloy 706 and Alloy 718, nickel base alloys. Id. at ¶ 2. The ingots made using these alloys are, among other things, constituent disk parts in gas fired turbines used for power generation. Id. at ¶ 3. General Electric Power Systems Division ("GE") is the only consumer for the large disk forgings made by Carpenter and ATI. Id. at ¶ 6; see Defendants‟ Resp. to PL.‟s Statement of Material Fact in Support of Motion for Summary Judgment Based on 35 U.S.C. § 103(a) ("ATI SMF") ¶ 5.

The nickel base superalloy ingots required for use in gas fired turbines are made using special melting and casting techniques referred to generically as the "triple melt process." Carpenter SMF ¶¶ 8, 16. This process is comprised of three main steps: the first step is Vacuum Induction Melting ("VIM"), during which molten alloy is cast into a mold and solidifies, providing an ingot also termed an "ESR electrode." Id. at ¶ 9; see also ATI SMF" ¶ 9. The ESR electrode is used in the second step of the process, Electroslag Remelting ("ESR"), during which the electrode is remelted by the heat generated by the passage of electric current through a conductive slag. See id.; Parties‟ Joint Claim Construction and Pre-Hearing Statement ("Joint Claim Construction"), ECF Doc. No. 44. "As the electrode is advanced into the slag and begins to melt, droplets of molten material form and pass through the heated slag, which removes oxide inclusion and other impurities." Carpenter SMF at ¶ 9; Joint Claim Construction at 3, ("electroslag remelting the alloy"). After the ESR step is complete, the resultant ESR ingot is given further heat treatments to relieve stress in and homogenize the ingot. Carpenter SMF ¶ 10; ATI SMF ¶ 10. The third step of the triple melt process is Vacuum Arc Remelting ("VAR"), a metal refining process of progressively heating the VAR electrode (which is essentially the ESR ingot produced following the second step) in a water-cooled crucible under vacuum conditions using the heat generated by an electric arc "struck between the electrode tip and the surface of the ingot." Carpenter SMF ¶ 11; ATI SMF ¶ 11. The result of the triple melt process is a VAR ingot that may be cropped, grinded and inspected. Carpenter SMF at ¶ 12.

A. The '546 Patent

The parties do not dispute that the generic triple melt process comprised of the VIM, ESR, and VAR steps has been in use for many years. See Carpenter SMF at ¶ 15; ATI SMF at ¶ 15. The United States Patent and Trademark Office (APTO@) issued the "564 patent on July 9, 2002. U.S. Patent No. 6,416,564 (filed Mar. 8, 2001). It issued the "858 patent, entitled "Large Diameter Ingots of Nickel Base Alloys" on April 13, 2004. U.S. Patent No. 6,719,858 (filed Feb. 4, 2002). The "858 patent is a division of the "564 patent. Id. col. 2 l. 4-5. ATI is the assignee of the >858 patent.

The >564 patent‟s invention background explains that nickel base superalloys including both Alloy 706 and Alloy 718 "are subject to significant[] positive and negative segregation." "564 Patent col. 2 l. 7-8. Positive segregation is "an enriched concentration of an alloying element at a specific region" and negative segregation is "a decreased concentration of an alloying element at a specific region." Joint Claim Construction at 2. According to the patent, "freckles" are the most common manifestations of positive segregation and "white spots" result from negative segregation. "564 Patent col. 1 l. 44-53. Freckles and white spots represent weaknesses in ingots that can potentially lead to cracking. See id. at col. 1 l. 52-59. A cracked ingot is unsuitable for use. "Ingots substantially lacking positive and negative segregation and that are also free of freckles are referred to [within the patent] as "premium quality‟ ingots." Id. at col. 1 l. 60-63. As described in the patent, "an ingot "substantially lacks‟ positive and negative segregation when such types of segregation are wholly absent or are present only to an extent that does not make the ingot unsuitable for use in critical applications, such as use for fabrication into rotating components for aeronautical and land-based turbine applications." Id. at col. 2 l. 1-6. The background section goes on to explain that Alloys 706 and 718 are particularly segregation-prone during casting, especially when large diameter ingots are produced. See id. at col. 2 l. 7-9. It explains that the triple melt process existing at the time of patent application was unsuitable for the creation of Alloy 718 ingots in sizes necessary for "emerging applications." See id. at col. 2 l. 27-64. The procedures in place at the time of patenting allowed for creation of ingots up to twenty inches in diameter, with only limited production of ingots up to 28 inches. See id. at l. 53-56. Ingots in those smaller diameters "fall far short of the weights needed in emerging applications requiring premium quality nickel base superalloy material." Id. at col. 2 l. 55-64. "In order to address the above-described needs, the present invention provides a novel method of producing a nickel base superalloy" that "may be used to cast VAR ingots of premium quality from Alloy 718 in diameters greater than 30 inches[.]" Id. at col 2 l. 65-67, col.3 l. 1-9.

The summary of the invention describes numerous steps: first, "a nickel base superalloy" is cast in a mold using vacuum induction melting (VIM); second, the "[t]he cast ingot is . . . annealed*fn2 and overaged*fn3 by, heating the alloy at a furnace temperature of at least 1200 [degrees Fahrenheit] for at least 10 hours;" third, the ingot is transferred "to a heating surface within 4 hours of complete solidification" and subjected to a "post-electroslag remelting" ("ESR") heat treatment; and finally, it is vacuum arc remelted ("VAR") to produce a VAR ingot. Claim 1 of the patent is:

A method of producing a nickel base superalloy that is substantially free of positive and negative segregation, the method comprising: casting an alloy that is a nickel base superalloy within a casting mold; annealing and overaging the alloy by heating the alloy at at least 1200 F. (649 C.) for at least 10 hours; electroslag remelting the alloy at a melt rate of at least 8 lbs/min. (3.63 kg/min.); transferring the alloy to a heating furnace within 4 hours of complete solidification; holding the alloy within the heating furnace at a first temperature of 1600 F (316 C.) to 1800F (982 C.) for at least 10 hours; increasing the furnace temperature from the first temperature to a second temperature of at least 2125 F. (1163C.) in a manner to inhibit thermal stresses within the alloy; holding at the second temperature for at least ten hours; vacuum arc remelting a VAR electrode of the alloy at a melt rate of 8 to 11 lbs./minute (3.63 to 5 kg/minute) to provide a VAR ingot. "564 patent, col. 13 l. 60-67 -- col. 14 l. 34-48. Claims 2 through 7 are dependent on claim 1, and describe ingots of greater than 30 or 36 inches in diameter, and proscribe weights and alloy compositions. The remaining claims of the patent, for the most part, contain specific time and temperature requirements to be employed at specific times during the triple melt process, including heating, transferring, holding, cooling, annealing, and overaging.

B. Expert Report of Alec Mitchell

Carpenter relies heavily on the report of its expert, Alec Mitchell, in making its case for obviousness. Dr. Mitchell contends that Alloys 706 and 718 have been "standard metals for HPT (high pressure turbine) disks for many years" and notes that their "development is linked." Expert Report of Alec Mitchell, 5 (Carpenter Ex. L). Specifically, he states that: Over the past twenty years the designers of gas turbines for power generation have demanded larger disk forgings as the size of the turbo-machinery has become larger. In consequence a demand developed from [GE], first for large 706 forgings and subsequently for large 718 forgings to be used as [high pressure turbine] disks in land-based industrial gas turbines.

Id. He explains that both alloys "have specifications in which the composition is given as ranges of elements [such as carbon and niobium] rather than as precise values." Id. Alloy 718 is used in "highly exacting applications in aerospace for example" and has the "highest niobium content possible[.]" Id. at 6. He states:

Due to the segregation characteristics of the high-niobium (5.3 -- 5.4 [weight] %) [718] alloy and to other issues in the final VAR processing step, this composition limits the maximum size of ingot it is possible to manufacture (to the quality standards applicable to rotating part use in aerospace applications) through the triple melt process to 600 mm [23.62 inches].Id.

Dr. Mitchell argues that the compositions of both Alloy 706 and Alloy 718 can be manipulated in this way, and that when it was recognized that Alloy 706 was not adequate for use in the larger gas turbines manufactured by GE, "the logical extension of the technology was in the direction of lowering the niobium content of alloy 718 to make the manufacture of large forgings practical in this alloy." Id. at 7. He further opines that "the resulting change in niobium content in 718 was in the direction of making the alloy more closely resemble alloy 706." Id. at 7. He argues that this was a logical step in the technology in part because forgings of 706 ingots acceptable for use with land-based turbines had reached 1000 mm, as opposed to the 600 mm limitation of high niobium content Alloy 718 ingots. See id.

This comparison of Alloy 706 and Alloy 718 is key to Dr. Mitchell‟s opinion that the "568 patent was obvious because "[a] person skilled in the art would have had sufficient knowledge to manufacture the subject ingots based on his melting experience, published reports of relevant process procedures, software and available computational techniques." Mitchell Report, 8. With respect to Claim 1, he argues again that Alloys 706 and 718, both niobium-containing alloys, have similar mechanical properties, react similarly to thermal stresses, and have a similar need for "relief of the residual stresses produced by the non-uniform temperature existing during the heating or cooling of large ingots." Id. at 8. These similarities, he claims, have been understood for many years. Id. He opines that "[t]he melting rates given in [Claim 1 of the "564 Patent] for alloy 718 are those which are used for alloy 706 in the same process sequence and ingot sizes as those in the Claim and would have been readily predictable for the case of a similar-sized ingot of 718 due to the ...

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