Atlas Powder Company v. Ireco Incorporated

United States Patent No. 4,111,727 (the Clay patent) and its reissue, U.S. Patent No. RE 33,788, claimed composite explosives made from the combination of ammonium nitrate and fuel oil (ANFO) blasting composition and an unsensitized water-in-oil emulsion. Both the Clay patent and its reissue claimed the same blasting composition. Claim one of the reissue patent stated that “sufficient aeration . . . entrapped to enhance sensitivity to a substantial degree” was required in the blasting composition. The sensitivity of a blasting composition referred to the ease of igniting the explosive. Atlas Powder Company (Atlas) (plaintiff) was a licensee under the Clay patent. In 1992, Atlas sued IRECO Incorporated (IRECO) (defendant) for infringement of the Clay patent. The district court concluded that both the original patent and its reissue were invalid as anticipated by either one or two prior art references, U.S. Patent No. 3,161,551 (Egly) or U.K. Patent No. 1,306,546 (Butterworth). Egly and Butterworth disclosed blasting compositions containing ANFO and a water-in-oil emulsion and ingredients identical to the Clay patent in overlapping amounts. The only element the Clay patent claimed that Egly and Butterworth did not was the sufficient-aeration requirement. The district court determined based on expert testimony and evidence from several tests that the emulsions described in both Egly and Butterworth would inevitably and inherently have interstitial air remaining in the mixture. The district court, therefore, concluded that sufficient aeration was an inherent element in the prior compositions. The district court found that none of the accused products infringed on Atlas’s asserted claims.