Sears prevails against Cargill over road de-icer patent
The Sears/Cargill case is instructive for small company patent holders. The most recent event was the award of attorneys fees ($3 million) which topped the actual patent award ($2.5 million). For small companies and smaller stakes, the amount expended to lawyers can exceed the potential amount to be won for infringement and smaller companies have to think about that. If Sears had not won attorneys fees in this case, Sears would have had a net loss, even though they won the case. Further, smaller companies also have to worry about being pre-empted by a declaratory judgment action, as happened here. Also, smaller companies frequently try to make deals with bigger companies, which attempts can go sour, as happened here.
In deciding to award attorneys fees in a WD NY action, U.S. District Judge David Peebles said the actions of the Minnesota-based Cargill were a "blatant attempt by a giant corporation to coerce a small company [Sears] with few resources to abandon its patent suit."
A jury ruled that Cargill infringed on Sears' patent for the de-icing solution, which used molasses to make the road salt thicker, more effective and better for the environment.
Sears claimed that Cargill officials stole its secret formula after officials from the two companies met in July 1999 to talk about a possible partnership.
Sears threatened to sue Cargill in 2001 for patent infringement, but Cargill beat the company to the punch, bringing a declaratory judgment action against Sears on the grounds that its patent was invalid because the formula wasn't new.
Sears has at least nine issued US patents in the de-icing area. The first granted is US 6,299,793, which issued October 9, 2001. It was filed January 5, 2001 [before Sears met with Cargill] but was based on earlier applications, being a continuation-in-part application of U.S. Ser. No. 09/224,906, filed Jan. 4, 1999, now abandoned, which claims the benefit of U.S. Provisional Application No. 60/070,636 filed Jan. 7, 1998. Thus, the small company Sears used almost the full year of its provisional, and ultimately obtained a patent not on the parent, but a cip thereof. Sears did not have an issued patent when it talked to Cargill.
The first claim of the '793 recites:
A de-icing and anti-icing composition comprising an aqueous solution which contains a low molecular weight carbohydrate and a chloride salt in which the constituents are present in the following concentration:
Weight %
Carbohydrate 3 to 60
Chloride Salt 5 to 35
Water Balance
and where said carbohydrate has a molecular weight in the range of about 180 to 1500, and is at least one selected from the group consisting of glucose, fructose and higher saccharides based on glucose and/or fructose and mixtures thereof.
The '793 is cited by 17 US patents.
The first citation is by US 6,416,684 (to Grain Processing), which first claim recites: A deicing composition comprising at least 20% by weight of desugared molasses and a second deicing component, said second deicing component being selected from the group consisting of ethylene glycol, di-ethylene glycol, soluble potassium salts, and the sodium, calcium, magnesium, and potassium salts of acetate, chloride, carbonate, and formate.
The second citation is by US 6,468,442 (to Minnesota Corn Processors), which first claim recites: A composition for reducing the buildup of snow and ice on a surface, comprising:
a sugar-water solution having approximately 15 to 80 percent by weight of a dissolved sugar solid, wherein the dissolved sugar solid contains approximately 2-60 percent by weight of a monosaccharide; and
a second substance selected from a salt, sand, cinders, abrasives, gravel, urea, lactic acid, glycerol, citric acid, acetic acid, a thickener or a corrosion inhibitor.
The '442 is relevant to the discussion of the inaccuracy of the Quillen/Webster patent grant numbers. The '442 is based is on a continuation of Application No. PCT/US00/20218, filed Jul. 25, 2000 and published Feb. 1, 2001 as International Publication No. WO/01/07532. This is thus a patent based on a continuation application which was NOT a repeat of earlier efforts to obtain the same claims (or any claims for that matter). Separately, the inventors here also used basically the full year of a provisional (U.S. Provisional Application No. 60/145,575, filed Jul. 26, 1999).
In terms of citation, about half the cites to Sears' 793 are self-cites.
-->In a comment on Bob Cote's article in Managing Intellectual Property, Philip Brooks writes:
As I read the article, I was struck with the complexity of the decision on whether to proceed to litigation when faced with a patent infringement suit or instead attempt to reach a settlement. The decision must reach beyond just the cost of the litigation (Mr. Cote indicates this can be in the range of $5 million) and the risk of losing and paying a large damage award. As he properly points out, a settlement can have large precedential value for your company and your industry. The same is true of a large damage award.
Note that Sears spent more money for the litigation ($3 million) than it received as a patent award ($2.5 million).
In deciding to award attorneys fees in a WD NY action, U.S. District Judge David Peebles said the actions of the Minnesota-based Cargill were a "blatant attempt by a giant corporation to coerce a small company [Sears] with few resources to abandon its patent suit."
A jury ruled that Cargill infringed on Sears' patent for the de-icing solution, which used molasses to make the road salt thicker, more effective and better for the environment.
Sears claimed that Cargill officials stole its secret formula after officials from the two companies met in July 1999 to talk about a possible partnership.
Sears threatened to sue Cargill in 2001 for patent infringement, but Cargill beat the company to the punch, bringing a declaratory judgment action against Sears on the grounds that its patent was invalid because the formula wasn't new.
Sears has at least nine issued US patents in the de-icing area. The first granted is US 6,299,793, which issued October 9, 2001. It was filed January 5, 2001 [before Sears met with Cargill] but was based on earlier applications, being a continuation-in-part application of U.S. Ser. No. 09/224,906, filed Jan. 4, 1999, now abandoned, which claims the benefit of U.S. Provisional Application No. 60/070,636 filed Jan. 7, 1998. Thus, the small company Sears used almost the full year of its provisional, and ultimately obtained a patent not on the parent, but a cip thereof. Sears did not have an issued patent when it talked to Cargill.
The first claim of the '793 recites:
A de-icing and anti-icing composition comprising an aqueous solution which contains a low molecular weight carbohydrate and a chloride salt in which the constituents are present in the following concentration:
Weight %
Carbohydrate 3 to 60
Chloride Salt 5 to 35
Water Balance
and where said carbohydrate has a molecular weight in the range of about 180 to 1500, and is at least one selected from the group consisting of glucose, fructose and higher saccharides based on glucose and/or fructose and mixtures thereof.
The '793 is cited by 17 US patents.
The first citation is by US 6,416,684 (to Grain Processing), which first claim recites: A deicing composition comprising at least 20% by weight of desugared molasses and a second deicing component, said second deicing component being selected from the group consisting of ethylene glycol, di-ethylene glycol, soluble potassium salts, and the sodium, calcium, magnesium, and potassium salts of acetate, chloride, carbonate, and formate.
The second citation is by US 6,468,442 (to Minnesota Corn Processors), which first claim recites: A composition for reducing the buildup of snow and ice on a surface, comprising:
a sugar-water solution having approximately 15 to 80 percent by weight of a dissolved sugar solid, wherein the dissolved sugar solid contains approximately 2-60 percent by weight of a monosaccharide; and
a second substance selected from a salt, sand, cinders, abrasives, gravel, urea, lactic acid, glycerol, citric acid, acetic acid, a thickener or a corrosion inhibitor.
The '442 is relevant to the discussion of the inaccuracy of the Quillen/Webster patent grant numbers. The '442 is based is on a continuation of Application No. PCT/US00/20218, filed Jul. 25, 2000 and published Feb. 1, 2001 as International Publication No. WO/01/07532. This is thus a patent based on a continuation application which was NOT a repeat of earlier efforts to obtain the same claims (or any claims for that matter). Separately, the inventors here also used basically the full year of a provisional (U.S. Provisional Application No. 60/145,575, filed Jul. 26, 1999).
In terms of citation, about half the cites to Sears' 793 are self-cites.
-->In a comment on Bob Cote's article in Managing Intellectual Property, Philip Brooks writes:
As I read the article, I was struck with the complexity of the decision on whether to proceed to litigation when faced with a patent infringement suit or instead attempt to reach a settlement. The decision must reach beyond just the cost of the litigation (Mr. Cote indicates this can be in the range of $5 million) and the risk of losing and paying a large damage award. As he properly points out, a settlement can have large precedential value for your company and your industry. The same is true of a large damage award.
Note that Sears spent more money for the litigation ($3 million) than it received as a patent award ($2.5 million).
posted by Lawrence B. Ebert at 5:17 AM
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