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Total Containment, Inc. v. Intelpro Corp.

September 15, 1999

TOTAL CONTAINMENT, INC., PLAINTIFF,
v.
INTELPRO CORPORATION, PLAINTIFF-APPELLANT,
v.
ENVIRON PRODUCTS, INC., DEFENDANT-APPELLEE.



Before Michel, Clevenger, and Schall, Circuit Judges.

The opinion of the court was delivered by: Michel, Circuit Judge.

Plaintiff-Appellant Intelpro Corporation ("Intelpro") appeals from the September 29, 1998 declaratory judgment of the United States District Court for the Eastern District of Pennsylvania granting Defendant-Appellee Environ Products, Inc.'s ("Environ's") motion for summary judgment and declaring the claims of United States Patent Nos. 5,553,971 ("the '971 patent"), 5,567,083 ("the '083 patent"), and 5,590,981 ("the '981 patent) (collectively the "Osborne patents," or "patents-in-suit") invalid either as anticipated under 35 U.S.C. § 102, or as obvious under 35 U.S.C. § 103. Summary declaratory judgment of invalidity of the claims of the '981 patent was also based on an insufficient written description. See 35 U.S.C. § 112, ¶ 1. Finally, the trial court also granted summary judgment of noninfringement of the `981 patent, the only patent on which summary judgment was moved for, by Environ's GeoFlex product, pursuant to Environ's declaratory judgment action. See Environ Products, Inc. v. Intelpro Corp., No. 97-707 (E.D. Pa. Sept. 29, 1998) consolidated with Total Containment, Inc. v. Environ Products, Inc., No. 97-1020 (E.D. Pa. Sept. 29, 1998).

In the trial court Environ filed for declaratory judgment of invalidity of the three patents-in-suit in Civil Action No. 97-707 and plaintiff-appellee Total Containment, Inc. ("TCI") filed for injunctive relief and damages due to infringement by Environ of all three patents-in-suit in Civil Action No. 97-1020. The actions were consolidated below and this consolidated appeal arises from the cross-motions for summary judgment filed by the parties of infringement by Environ of the '981 patent only and from Environ's motion for summary judgment of invalidity of the patents-in-suit.

Keith Osborne is the owner of Intelpro. Osborne applied for, and was issued, the three patents-in-suit. The patents-in-suit were assigned to Intelpro. Intelpro granted TCI a license to the patents-in-suit. Intelpro, however, retained the right to practice the invention and to sell the retained rights and the patents.

At the time of the filing of the instant case, Intelpro was the assignee of the patents-in-suit. After the filing, and before judgment was issued, Intelpro assigned them to OPW/Buffalo Acquisition, Inc., now known as Pisces by OPW ("OPW"). OPW was not joined in the district court action, and has not joined the appeal to this court. TCI is the exclusive licensee under the patents-in-suit, as first assigned to Intelpro and now assigned to OPW, and was Intelpro's co-party in the district court actions. TCI, however, did not file a brief in this appeal, nor appear for oral argument.

The appeal was submitted for our decision following oral argument on August 6, 1999. We hold Intelpro has standing to maintain this appeal. We further hold that the district court erred in granting each of the summary judgments and, therefore, we vacate and remand for trial or for further fact-finding as the district court sees fit.

BACKGROUND

The three patents-in-suit are directed to secondarily-contained flexible piping systems that include a flexible inner supply pipe and an outer secondary containment pipe. Such piping systems have particular applicability to gasoline filling stations, allowing them to transport gasoline safely from an underground storage tank to an above ground gasoline dispenser. These systems use flexible piping to greatly reduce the required number of pipe joints, potential sources of leaks in prior art rigid piping systems. Furthermore, the systems house the remaining joints in fluid-tight chambers to protect them, facilitate their inspection and repair, and to contain any leaks.

TCI and Intelpro are the exclusive licensee and original assignee, respectively, of the Osborne Patents. TCI and Environ *fn1 sell secondarily-contained flexible piping systems suitable for underground transportation of hazardous fluids like gasoline. At the time the applications for the patents-in-suit were filed, the underground piping industry was using rigid piping sections, such as steel and fiberglass sections, joined together with fittings and connectors. Those systems were prone to leaks, particularly at the joints formed by the fittings and connectors joining the sections.

Osborne filed a patent application in the United States Patent and Trademark Office ("PTO") on December 20, 1988. This application disclosed an underground secondarily-contained, flexible piping system designed to prevent release of the fluid into the environment should there be a leak from the flexible inner supply pipe. Osborne's invention eliminated pipe fittings and connectors normally required at the various bends, turns and section joints of rigid piping systems, thereby reducing these sources of leaks. Further, Osborne's invention housed all primary pipe fittings and connectors in chambers to enable ready access and to capture any leakage resulting from a defect in the system.

Two days after Osborne filed his 1988 application, another group of inventors, including Michael Webb, then of TCI, and Thomas Wilson, of Exxon Company, filed a patent application for a removable double containment flexible piping system, resulting in U.S. Patent No. 4,971,477 ("the '477 patent"). An interference resulted which Osborne eventually won. However, to avoid a possible appeal by TCI, TCI and Osborne entered into a settlement agreement in December 1994 through which TCI became the exclusive licensee of the inventions disclosed in Osborne's 1988 application and Osborne retained the right to practice the inventions. These inventions included two disclosed in continuation applications filed by Osborne before the 1988 application issued as the '971 patent. These continuation applications issued as the '083 and '981 patents. These three patents are the patents-in-suit.

Environ once had a license to use the patented technology. When Osborne later made TCI the exclusive licensee of the technology, Environ's license was revoked. Environ sued TCI and Intelpro to set aside their settlement agreement, and in 1996, a jury ruled in favor of TCI and Intelpro, upholding the settlement agreement and TCI's exclusive license.

Intelpro was the assignee of the Osborne patents when this action began. Shortly before the litigation began in January 1997, however, Intelpro entered into a litigation agreement with TCI which assigned to TCI the right to initiate and maintain an action against Environ for infringement of the Osborne Patents.

On January 17, 1997, TCI, in its name alone, filed a complaint against Environ in the United States District Court for the Eastern District of Virginia for infringement of the Osborne Patents. Environ moved to dismiss the complaint for lack of standing, for failure to join Intelpro, an indispensable party.

On January 31, 1997, Environ filed in the United States District Court for the Eastern District of Pennsylvania a declaratory judgment action against Intelpro and TCI seeking to invalidate the Osborne patents. Environ then moved to transfer TCI's Virginia action to the Pennsylvania district court. The actions ...


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