Talk:Atlas Powder v. E.I. du Pont de Nemours, 750 F2d 1569 (1984)

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Courtney

Patent infringement action was brought. The United States District Court for the Northern District of Texas, Patrick E. Higginbotham, J., 588 F.Supp. 1455, found the patent at issue valid and infringed, and appeal was taken. The Court of Appeals, Baldwin, Circuit Judge, held that product claims 1-5, 7, 12-14, and 16-17 of U.S. Patent No. 3,447,978, relating to blasting agent, chemical mixtures that are relatively insensitive to normal modes of detonation but can be made to detonate with high strength explosive primers, were valid and infringed.

The District Court Proceedings A non-jury trial was held between January 28 and February 2, 1982. Du Pont asserted invalidity of the '978 patent under sections 102(a), 103, and 112, “fraud” on the Patent and Trademark Office (PTO), and noninfringement. The district court rejected those assertions for the product claims at issue, holding that: (1) the claimed invention was not anticipated by the prior art; (2) the claimed invention would not have been obvious in view of the prior art; (3) the claims were not invalid for the patent's failure to comply with the “best mode”, enablement, and “overclaiming” requirements of 35 U.S.C. § 112; (4) the patent was not procured by “fraud” on the PTO; and (5) Du Pont's products infringed the claims under the doctrine of equivalence. On appeal, Du Pont contests those holdings, except for the one on best mode.

The district court denied Atlas increased damages and attorney fees because Du Pont had not willfully infringed the '978 patent claims and the case was not “exceptional”. The district court also held that product claims 6, 13, and 15 were not infringed and that process claims 18-30 were invalid. Atlas has not appealed those holdings.

Issues (1) Whether the district court was clearly erroneous in finding the invention of the patent claims at issue not anticipated by the prior art.

(2) Whether the district court erred in holding that the invention of the patent claims at issue would not have been obvious.

(3) Whether the district court erred in holding the patent claims at issue not invalid because of nonenablement.

(4) Whether the district court erred in holding no “fraud” on the PTO, i.e., no inequitable conduct.

(5) Whether the district court was clearly erroneous in finding that Du Pont's products infringed the '978 claims under the doctrine of equivalents.

Under 35 U.S.C. § 282, a patent is presumed valid, and the one attacking validity has the burden of proving invalidity by clear and convincing evidence.

Du Pont argues that, because its emulsion product was patented after the '978 patent issued, its product avoids infringement by equivalence. According to Du Pont, “ so long as direct infringement is lacking, the grant of a patent to an accused infringer constitutes a prima facie determination of non-equivalence and, accordingly, of non-infringement” (Du Pont's emphasis). Atlas disagrees. So do we.

Du Pont concedes that, if Atlas patents A + B + C and Du Pont then patents the improvement A + B + C + D, Du Pont is liable to Atlas for any manufacture, use, or sale of A + B + C + D because the latter directly infringes claims to A + B + C. Du Pont urges, however, that it is not liable for manufacture, use, or sale of patented improvement A + B + C', even though A + B + C' is “equivalent” to A + B + C. We reject Du Pont's attempted distinction. Whether Du Pont makes A + B + C + D or A + B + C', Du Pont has used the gist of Atlas' invention to devise a patentable composition. There is no compelling reason to hold Du Pont liable for infringement in one instance but not the other.[3]

A patent is not the grant of a right to make or use or sell. It does not, directly or indirectly, imply any such right. It grants only the right to exclude others. The supposition that a right to make is created by the patent grant is obviously inconsistent with the established distinctions between generic and specific patents, and with the well-known fact that a very considerable portion of the patents *1581 granted are in a field covered by a former relatively generic or basic patent, are tributary to such earlier patent, and cannot be practiced unless by license thereunder.

Having considered all of Du Pont's arguments, the district court's decision that the '978 patent claims on appeal (1-5, 7, 12-14, and 16-17) are not invalid under 35 U.S.C. §§ 102, 103, and 112, that there was no inequitable conduct before the PTO, and that the claims on appeal were infringed, is affirmed.

Kevin

Issues (1) Whether the district court was clearly erroneous in finding the invention of the patent claims at issue not anticipated by the prior art. (2) Whether the district court erred in holding that the invention of the patent claims at issue would not have been obvious. (3) Whether the district court erred in holding the patent claims at issue not invalid because of nonenablement. (4) Whether the district court erred in holding no “fraud” on the PTO, i.e., no inequitable conduct. (5) Whether the district court was clearly erroneous in finding that Du Pont's products infringed the '978 claims under the doctrine of equivalents.

That is incorrect. Though the introduction of prior art not before the PTO may facilitate meeting the challenger's ability to meet the burden of proof on invalidity, the presumption remains intact, the burden of persuasion remains on the challenger, and the “clear and convincing” standard does not change. See, e.g., Jervis B. Webb Co. v. Southern Systems, Inc., 742 F.2d 1388, 1392 & n. 4, 222 USPQ 943, 945 & n. 4 (Fed.Cir.1984);

IV. Obviousness Though an invention is not anticipated by 35 U.S.C. § 102, a patent should not issue if the differences between the claimed invention and prior art are such that the invention as a whole would have been obvious to one of ordinary skill in the art at the time the invention was made. 35 U.S.C. § 103. In assessing nonobviousness a court should answer certain factual inquiries: (1) the scope and content of the prior art; (2) the level of ordinary skill in the art; (3) the differences between the claimed invention and the prior art; and (4) so-called “secondary” considerations, e.g., long felt need, unexpected results, commercial success. See, e.g., Stratoflex, Inc. v. Aeroquip Corp., 713 F.2d at 1538, 218 USPQ at 876; Simmons Fastener Corp. v. Illinois Tool Works, Inc., 739 F.2d 1573, 1575, 222 USPQ 743, 746 (Fed.Cir.1984). The “secondary” considerations, when present, may assist the court in determining nonobviousness without falling prey to hindsight reasoning.

To be enabling under § 112, a patent must contain a description that enables one skilled in the art to make and use the claimed invention. Raytheon Co. v. Roper Corp., 724 F.2d at 960, 220 USPQ at 599. That some experimentation is necessary does not preclude enablement; the amount of experimentation, however, must not be unduly extensive. See, e.g., W.L. Gore & Associates, Inc. v. Garlock, Inc., 721 F.2d 1540, 1557, 220 USPQ 303, 316 (Fed.Cir.1983), cert. denied, --- U.S. ----, 105 S.Ct. 172, 83 L.Ed.2d 107 (1984); In re Angstadt, 537 F.2d 498, 503, 190 USPQ 214, 218 (CCPA 1976). Determining enablement is a question of law. Raytheon Co. v. Roper Corp., 724 F.2d at 959-60, 220 USPQ at 599.

Du Pont contends that, because the '978 examples are “merely prophetic”, they do not aid one skilled in the art in making the invention.[1] Because they are prophetic, argues Du Pont, there can be no guarantee that the examples would actually work. Use of prophetic examples, however, does not automatically make a patent non-enabling. The burden is on one challenging validity to show by clear and convincing evidence that the prophetic examples together with other parts of the specification are not enabling. Du Pont did not meet that burden here. To the contrary, the district court found that the “prophetic” examples of the specification were based on actual experiments that were slightly modified in the patent to reflect what the inventor believed to be optimum, and hence, they would be helpful in enabling someone to make the invention.

VI. Inequitable Conduct This court has held “inequitable conduct” in the PTO to be a more appropriate label than “fraud”. J.P. Stevens & Co. v. Lex Tex Ltd., 747 F.2d 1553 at 1559 (Fed.Cir.1984). Hence, this opinion will use the phrase “inequitable conduct” rather than “fraud”. Inequitable conduct requires proof by clear and convincing evidence of a threshold degree of materiality of the nondisclosed*1578 or false information. That threshold can be established by any of four tests: (1) objective “but for”; (2) subjective “but for”; (3) “but it may have been”; and (4) 37 C.F.R. § 1.56(a), i.e., whether there is a substantial likelihood that a reasonable examiner would have considered the omitted or false information important in deciding whether to allow the application to issue as a patent. Slip op. at 10. The PTO standard is the appropriate starting point because it is the broadest and most closely aligns with how one ought to conduct business with the PTO. Id. Inequitable conduct also requires proof of a threshold intent. That intent need not be proven with direct evidence. It may be proven by showing acts the natural consequences of which are presumably intended by the actor. Id. Proof of deliberate scheming is not needed; gross negligence is sufficient. Gross negligence is present when the actor knew or should have known of the materiality of a withheld reference. Id. at 1560. On the other hand, simple negligence, oversight or an erroneous judgment made in good faith is insufficient. Id. Once the thresholds of materiality and intent are established as facts, the court must balance them and determine as a matter of law whether the scales compel a conclusion that inequitable conduct occurred. Id. If the court reaches that conclusion, it must hold the patent claims at issue unenforceable.

Doctrine of Equivalents A product that does not literally infringe can infringe under the doctrine of equivalents. Designed to protect a patentee from an infringer who appropriates the invention but avoids the literal language of the claims, the doctrine allows a finding of infringement when the accused product and claimed invention perform substantially the same function in substantially the same way to yield substantially the same result. Graver Tank & Mfg. Co. v. Linde Air Products Co., 339 U.S. 605, 608-09, 70 S.Ct. 854, 856, 94 L.Ed. 1097 (1950); Perkin-Elmer Corp. v. Computervision Corp., 732 F.2d 888, 900, 221 USPQ 669, 679 (Fed.Cir.1984), cert. denied, --- U.S. ----, 105 S.Ct. 187, 83 L.Ed.2d 120 (1984). The district court found that the Du Pont products and the claimed invention are equivalent, and Du Pont has not shown that finding to be clearly erroneous.

Such consideration makes sense. Where, as here, the accused product avoids literal infringement by changing one ingredient*1580 of a claimed composition, it is appropriate for a court to consider in assessing equivalence whether the changed ingredient has the same purpose, quality, and function as the claimed ingredient. If it does, the accused and claimed products should meet the Graver Tank tripartite test of “function, way, and result”. That the district court focused on the function, quality, and purpose of the emulsifying agents does not mean it ignored the basic tripartite test which it expressly referred to in the opinion. We infer from that express reference, and from the opinion as a whole, that the district court did in fact find that the “function, way, and result” test was satisfied. See ACS Systems, Inc. v. Montefiore Hospital, 732 F.2d 1572, 1582, 221 USPQ 929, 936 (Fed.Cir.1984) (this court will infer findings that were obviously necessary to the court's opinion).

Du Pont concedes that, if Atlas patents A + B + C and Du Pont then patents the improvement A + B + C + D, Du Pont is liable to Atlas for any manufacture, use, or sale of A + B + C + D because the latter directly infringes claims to A + B + C. Du Pont urges, however, that it is not liable for manufacture, use, or sale of patented improvement A + B + C', even though A + B + C' is “equivalent” to A + B + C. We reject Du Pont's attempted distinction. Whether Du Pont makes A + B + C + D or A + B + C', Du Pont has used the gist of Atlas' invention to devise a patentable composition. There is no compelling reason to hold Du Pont liable for infringement in one instance but not the other.[3] We agree with Bendix Corp. v. United States, 199 USPQ 203 (Ct.Cl. Trial Div.1978), aff'd, 600 F.2d 1364, 220 Ct.Cl. 507, 204 USPQ 617 (1979). There the trial judge said that where defendant has appropriated the material features of the patent in suit, infringement will be found “even when those features have been supplemented and modified to such an extent that the defendant may be entitled to a patent for the improvement.” 199 USPQ at 221-22. Though Du Pont argues that cases from other courts support a contrary result, we are not bound by those cases and in any event find them unpersuasive.[4]

A patent is not the grant of a right to make or use or sell. It does not, directly or indirectly, imply any such right. It grants only the right to exclude others. The supposition that a right to make is created by the patent grant is obviously inconsistent with the established distinctions between generic and specific patents, and with the well-known fact that a very considerable portion of the patents *1581 granted are in a field covered by a former relatively generic or basic patent, are tributary to such earlier patent, and cannot be practiced unless by license thereunder. Another reason sometimes advanced for supposing that the structure of the second does not infringe the claim of the first patent is that the Patent Office has declared that a patentable difference exists. The premise is sound, but not the conclusion. In examining the second application, the Patent Office has no concern with the scope of the claim of the first, and does not and must not pay any attention thereto. It is concerned only with the early disclosure by the specification and drawings. Patentable difference does not of itself tend to negative infringement. It may just as well be based upon infringement, plus improvement; and improvement may lie in addition, simplification, or variance.

Du Pont further contends that the district court erred in considering the “heart of the invention” in its infringement analysis. We disagree. Although there is no legally recognized “essence” or “heart” of the invention in determining validity, W.L. Gore & Associates, Inc. v. Garlock, Inc., 721 F.2d 1540, 220 USPQ 303 (Fed.Cir.1983), cert. denied, --- U.S. ----, 105 S.Ct. 172, 83 L.Ed.2d 107 (1984), it can be applicable in a determination of infringement under the doctrine of equivalents. Medtronic, Inc. v. Cardiac Pacemakers, Inc., 721 F.2d 1563, 1567, 220 USPQ 97, 101 (Fed.Cir.1983). Moreover, the district court's “heart of the invention” analysis was supplemental to its finding that the Graver Tank tripartite test was satisfied.

Maura

The District Court Proceedings A non-jury trial was held between January 28 and February 2, 1982. Du Pont asserted invalidity of the '978 patent under sections 102(a), 103, and 112, “fraud” on the Patent and Trademark Office (PTO), and noninfringement. The district court rejected those assertions for the product claims at issue, holding that: (1) the claimed invention was not anticipated by the prior art; (2) the claimed invention would not have been obvious in view of the prior art; (3) the claims were not invalid for the patent's failure to comply with the “best mode”, enablement, and “overclaiming” requirements of 35 U.S.C. § 112; (4) the patent was not procured by “fraud” on the PTO; and (5) Du Pont's products infringed the claims under the doctrine of equivalence. On appeal, Du Pont contests those holdings, except for the one on best mode.

Presumption of Validity Under 35 U.S.C. § 282, a patent is presumed valid, and the one attacking validity has the burden of proving invalidity by clear and convincing evidence.

After correctly stating that the presumption of validity must be overcome with clear and convincing evidence, the district court stated that, if pertinent prior art were not cited to the PTO, as was the case here, the presumption is weakened and Du Pont must prove invalidity by only a preponderance of the evidence. That is incorrect. Though the introduction of prior art not before the PTO may facilitate meeting the challenger's ability to meet the burden of proof on invalidity, the presumption remains intact, the burden of persuasion remains on the challenger, and the “clear and convincing” standard does not change.

Hence, there is no anticipation under § 102, because the exclusion of a claimed element from a prior art reference is enough to negate anticipation by that reference

Du Pont asserts that Bluhm conceded in answer to an interrogatory that the first reduction to practice of the claimed invention was on January 14, 1966, and that Mr. Bluhm's notebook shows the composition prepared on that date to be identical to Egly's, i.e., an emulsion without occluded air. Because the first reduction to practice was identical to Egly's product, Du Pont argues, the claimed invention is anticipated by Egly. Atlas argues that the notebook entry reveals that occluded air was present in the composition prepared on January 14, 1966, and hence, the first reduction to practice was not identical to Egly's composition. Atlas appears to be correct but, in any event, the district court's anticipation analysis properly focused on the claimed invention, which includes occluded air, not on Atlas' characterization of the January 14, 1966 experiment as the first reduction to practice. IV. Obviousness Though an invention is not anticipated by 35 U.S.C. § 102, a patent should not issue if the differences between the claimed invention and prior art are such that the invention as a whole would have been obvious to one of ordinary skill in the art at the time the invention was made. 35 U.S.C. § 103. In assessing nonobviousness a court should answer certain factual inquiries: (1) the scope and content of the prior art; (2) the level of ordinary skill in the art; (3) the differences between the claimed invention and the prior art; and (4) so-called “secondary” considerations, e.g., long felt need, unexpected results, commercial success. See, e.g., Stratoflex, Inc. v. Aeroquip Corp., 713 F.2d at 1538, 218 USPQ at 876; Simmons Fastener Corp. v. Illinois Tool Works, Inc., 739 F.2d 1573, 1575, 222 USPQ 743, 746 (Fed.Cir.1984). The “secondary” considerations, when present, may assist the court in determining nonobviousness without falling prey to hindsight reasoning.

Level of Skill In The Art The district court found that the person of ordinary skill in the art would be one skilled in the art of explosives formulation, having knowledge of and experience with the chemical and physical properties of explosives. The person should be a chemist or chemical engineer with at least a bachelor's degree and several years of practical experience. Also, he or she should have a working knowledge of the principles of emulsion chemistry as applied to explosives formulation.

Conclusion on Nonobviousness In light of the differences between the claimed invention and prior art, the '978 solution to a troublesome problem, and the unexpected result that a water-in-oil emulsion of ammonium nitrate, fuel oil, and a water-in-oil emulsifying agent can serve as a blasting agent in the presence of occluded air, we agree with the district court's conclusion of nonobviousness.

V. Enablement The district court rejected Du Pont's arguments of “overly broad”, “overclaiming”, and “non- enablement”, and its argument that the broad scope of the claims is not supported by the limited disclosure present. In essence, those arguments are one: the '978 disclosure does not enable one of ordinary skill in the art to make and use the claimed invention, and hence, the claimed invention is invalid under 35 U.S.C. § 112, ¶ 1. To be enabling under § 112, a patent must contain a description that enables one skilled in the art to make and use the claimed invention. Raytheon Co. v. Roper Corp., 724 F.2d at 960, 220 USPQ at 599. That some experimentation is necessary does not preclude enablement; the amount of experimentation, however, must not be unduly extensive. See, e.g., W.L. Gore & Associates, Inc. v. Garlock, Inc., 721 F.2d 1540, 1557, 220 USPQ 303, 316 (Fed.Cir.1983), cert. denied, --- U.S. ----, 105 S.Ct. 172, 83 L.Ed.2d 107 (1984); In re Angstadt, 537 F.2d 498, 503, 190 USPQ 214, 218 (CCPA 1976). Determining enablement is a question of law. Raytheon Co. v. Roper Corp., 724 F.2d at 959-60, 220 USPQ at 599. Du Pont argues that the patent disclosure lists numerous salts, fuels, and emulsifiers that could form thousands of emulsions but there is no commensurate teaching as to which combination would work. The disclosure, according to Du Pont, is nothing more than “a list of candidate ingredients” from which one skilled in the art would have to select and experiment unduly to find an operable emulsion.

We agree with the district court's conclusion on enablement. Even if some of the claimed combinations were inoperative, the claims are not necessarily invalid. “It is not a function of the claims to specifically exclude ... possible inoperative substances....” In re Dinh-Nguyen, 492 F.2d 856, 858-59, 181 USPQ 46, 48 (CCPA 1974) (emphasis omitted). Accord, In re Geerdes, 491 F.2d 1260, 1265, 180 USPQ 789, 793 (CCPA 1974); In re Anderson, 471 F.2d 1237, 1242, 176 USPQ 331, 334-35 (CCPA 1973). Of course, if the number of inoperative combinations becomes significant, and in effect forces one of ordinary skill in the art to experiment unduly in order to practice the claimed invention, the *1577 claims might indeed be invalid. See, e.g., In re Cook, 439 F.2d 730, 735, 58 CCPA 1049, 169 USPQ 298, 302 (1971). That, however, has not been shown to be the case here. Du Pont contends that, because the '978 examples are “merely prophetic”, they do not aid one skilled in the art in making the invention.[1] Because they are prophetic, argues Du Pont, there can be no guarantee that the examples would actually work. Use of prophetic examples, however, does not automatically make a patent non-enabling. The burden is on one challenging validity to show by clear and convincing evidence that the prophetic examples together with other parts of the specification are not enabling. Du Pont did not meet that burden here. To the contrary, the district court found that the “prophetic” examples of the specification were based on actual experiments that were slightly modified in the patent to reflect what the inventor believed to be optimum, and hence, they would be helpful in enabling someone to make the invention.

The district court agreed that Atlas' records showed 40 percent “failed”, but found that Atlas' listing of an experiment as a “failure” or “unsatisfactory” was misleading. Experiments were designated “failures”, the district court found, in essence because they were not optimal under all conditions, but such optimality is not required for a valid patent. Decca Ltd. v. United States, 544 F.2d 1070, 1077, 210 Ct.Cl. 546, 191 USPQ 439, 444-45 (1976). Accord, E.I. du Pont de Nemours & Co. v. Berkley & Co., 620 F.2d 1247, 1260, 205 USPQ 5, 10 (8th Cir.1980). Cf. Raytheon Co. v. Roper Co., 724 F.2d at 958, 220 USPQ at 598. The district court also found that one skilled in the art would know how to modify slightly many of those “failures” to form a better emulsion.

In sum, we conclude that Du Pont has failed to show that the district court erred in determining enablement.

Inequitable conduct requires proof by clear and convincing evidence of a threshold degree of materiality of the nondisclosed*1578 or false information. That threshold can be established by any of four tests: (1) objective “but for”; (2) subjective “but for”; (3) “but it may have been”; and (4) 37 C.F.R. § 1.56(a), i.e., whether there is a substantial likelihood that a reasonable examiner would have considered the omitted or false information important in deciding whether to allow the application to issue as a patent. Slip op. at 10. The PTO standard is the appropriate starting point because it is the broadest and most closely aligns with how one ought to conduct business with the PTO. Id. Inequitable conduct also requires proof of a threshold intent. That intent need not be proven with direct evidence. It may be proven by showing acts the natural consequences of which are presumably intended by the actor. Id. Proof of deliberate scheming is not needed; gross negligence is sufficient. Gross negligence is present when the actor knew or should have known of the materiality of a withheld reference. Id. at 1560. On the other hand, simple negligence, oversight or an erroneous judgment made in good faith is insufficient. Id. Once the thresholds of materiality and intent are established as facts, the court must balance them and determine as a matter of law whether the scales compel a conclusion that inequitable conduct occurred. Id. If the court reaches that conclusion, it must hold the patent claims at issue unenforceable.

Doctrine of Equivalents A product that does not literally infringe can infringe under the doctrine of equivalents. Designed to protect a patentee from an infringer who appropriates the invention but avoids the literal language of the claims, the doctrine allows a finding of infringement when the accused product and claimed invention perform substantially the same function in substantially the same way to yield substantially the same result.

“Consideration must be given to the purpose for which an ingredient is used in a patent, the qualities it has when combined with the other ingredients, and the function which it is intended to perform.”

Du Pont argues that, because its emulsion product was patented after the '978 patent issued, its product avoids infringement by equivalence. According to Du Pont, “ so long as direct infringement is lacking, the grant of a patent to an accused infringer constitutes a prima facie determination of non-equivalence and, accordingly, of non-infringement” (Du Pont's emphasis). Atlas disagrees. So do we.

A patent is not the grant of a right to make or use or sell. It does not, directly or indirectly, imply any such right. It grants only the right to exclude others. The supposition that a right to make is created by the patent grant is obviously inconsistent with the established distinctions between generic and specific patents, and with the well-known fact that a very considerable portion of the patents *1581 granted are in a field covered by a former relatively generic or basic patent, are tributary to such earlier patent, and cannot be practiced unless by license thereunder.

First, finding equivalence is not inconsistent with a patentee's unsuccessful attempt to make the accused product. The focus in assessing equivalence is on whether the accused product performs substantially the same as the claimed product in function, way and result-it is not on the patentee's ability to devise a product equivalent to the patented product. Indeed, the patentee's incentive to devise an equivalent product is often less than a competitor's, which alone may account for the competitor's success and the patentee's failure in devising the equivalent product. See, e.g., Leesona Corp. v. Varta Batteries, Inc., 522 F.Supp. 1304, 1328, 213 USPQ 222, 241 (S.D.N.Y.1981).

Du Pont further contends that the district court erred in considering the “heart of the invention” in its infringement analysis. We disagree. Although there is no legally recognized “essence” or “heart” of the invention in determining validity, W.L. Gore & Associates, Inc. v. Garlock, Inc., 721 F.2d 1540, 220 USPQ 303 (Fed.Cir.1983), cert. denied, --- U.S. ----, 105 S.Ct. 172, 83 L.Ed.2d 107 (1984), it can be applicable in a determination of infringement under the doctrine of equivalents. Medtronic, Inc. v. Cardiac Pacemakers, Inc., 721 F.2d 1563, 1567, 220 USPQ 97, 101 (Fed.Cir.1983). Moreover, the district court's “heart of the invention” analysis was supplemental to its finding that the Graver Tank tripartite test was satisfied.

Having considered all of Du Pont's arguments, the district court's decision that the '978 patent claims on appeal (1-5, 7, 12-14, and 16-17) are not invalid under 35 U.S.C. §§ 102, 103, and 112, that there was no inequitable conduct before the PTO, and that the claims on appeal were infringed, is affirmed.