Full opinion text
FINDINGS OF FACT AND CONCLUSIONS OF LAW PHILIP PRATT, District Judge. Plaintiff Johns-Manville Corporation, a New York corporation (hereinafter J-M), which is involved through its operating subsidiaries in the development and production of fiberglass insulation, has sued defendant Guardian Industries Corporation, a Delaware corporation, and several former J-M employees who have assisted defendant Guardian with its entry into fiberglass production. J-M alleges that defendant has appropriated both patented and unpatented technology developed by J-M for the commercial production of fiberglass insulation that consists of fibers which are less than 7 microns (M) in diameter. At the heart of plaintiffs development is a process for directly centrifuging fibers 7 M or less in diameter through holes less than 18 mils in diameter which eliminates the need for a production process known as hot gas blast attenuation. The elimination of this energy intensive step in the production of insulation-quality staple fibers was a significant technological break-through in the field. Implementation of this new process of fiberization required many alterations and adaptations to the existing fiberglass insulation production line and techniques used by Johns-Manville. As will be elaborated below, the new process was given the acronym HERM, which represents Horizontal laminar collection of the staple fibers, Electric kettle melting of the glass, Hotary fiberization through a spinner containing holes of less than 18 mils, and Modular line. The research, development, and resulting technology will be referred to generally as HERM, unless the context requires greater specificity. The HERM process has been commercialized and is on line at J-M facilities in Willows, California; Winder, Georgia; Richmond, Indiana; McPherson, Kansas; Innisfail, Alberta, Canada; and St. Avoid, France. I. THE PARTIES A. The Corporate Parties Both J-M and Guardian manufacture fiberglass insulation. J-M, the original plaintiff herein, is a holding company which functions through various wholly-owned operating subsidiaries. At the inception of the HERM project, its employees worked for either J-M Fiberglass Inc. or J-M Products. Corporation. At some time, unspecified in the record, the corporate structure was reorganized and the HERM development project and its team came under the auspices of J-M Sales Corporation. The personnel records of Church, employed January 1976 by J-M Products, and Limberg, employed March 1977 by J-M Sales, support the inference that the transaction occurred in that interval. Although the identity of the operating subsidiaries may have changed, the entity for which an employee worked had no bearing on his assignments or his obligations to both the subsidiary and the parent, J-M Corporation. Plaintiffs nonchalance about its corporate structure has made for an untidy and confusing record, but does not deprive the parent of its right to relief because a subsidiary was not joined as a party. The Court is satisfied that individuals considered themselves to be J-M employees, regardless of the intervening subsidiary’s identity, and that any obligations arising from their employment were owed to the parent corporation, and were unaffected by transfer from one subsidiary to another. Thus the Court finds no merit in defendants’ claim that J-M has failed to join its subsidiaries as indispensable parties. Plaintiff J-M and its successor, Man-ville Corporation, to which all of J-M's rights have been assigned, are the only parties necessary to pursue all the claims before the Court. J-M began research and development (R & D) in fiberglass insulation in 1956 and entered commercial production by purchasing both the facilities and technology, including the patents of a competitor, Libby Owens Ford. Prior to that time, J-M had been involved in both research, development and production of mineral or rock wool insulation. J-M remains commercially active in both fields of insulation production. Defendant Guardian is primarily a manufacturer of glass plates for automotive and architectural windows, and secondarily is involved in photo finishing. Defendant purchased a factory in Huntington, Indiana, for the production of rock wool insulation in 1977, and in November 1979 acquired a glass plant in Albion, Michigan, where the production line, which is the subject matter of this dispute, is located. Defendant began commercial production of fiberglass at its Albion facility in November 1980. To date, defendant has hired 15 former J-M employees, at least 9 of whom were directly involved with the development of the new fiberglass insulation technology which is the subject matter of this suit. B. Individual Defendants The following are former J-M employees who are employed by Guardian at the Albion fiberglass insulation plant, as well as being named individual defendants. They are listed in order of their importance to both J-M and the HERM project and the start-up of Guardian’s Albion line. Duane Faulkner joined J-M’s HERM team in June 1972, as an employee of J-M Fiberglass Inc., and was resident manager of the HERM project at the Richmond, Indiana plant. He developed a theoretical model which described the new fiberization process, was a named inventor on the patent in suit, which disclosed that model and claimed the process, and supervised development of the supporting technology necessary to commercialize the production of fiberglassing, the new fiberization process. Faulkner left J-M in October 1977 and, after a brief interval at Midland Glass during October and November 1977, joined Guardian. He was first employed at Guardian’s Rock Wool plant in Huntington, Indiana, but became and remains Director of Operations of Guardian’s Insulation Division, after defendant had committed to convert the Albion facility for fiberglass production in November 1979. Defendant James Schairer was employed by J-M Fiberglass Inc. in May 1971, where he designed electronic fiberglass equipment controls, and was responsible for the onsite development work prior to Faulkner’s arrival. For his last two years, Schairer reported to Duane Faulkner directly as Senior Process Engineer. He left J-M in January 1978 and began his employment at Guardian’s Huntington Rock Wool plant in February 1978, as an engineering manager who assisted in bringing that facility on line by May 1978. He began purchasing equipment for the Albion fiberglass line in mid-February 1980, and is currently responsible for electrical designs. Defendant Steven Sanford was employed by J-M Products Corporation in October 1969 and transferred to the HERM project in August 1972, where he designed and procured mechanical parts for the pilot line. He left J-M’s employ in February 1980, and joined Guardian. He was employed at the Huntington Rock Wool plant for one month and transferred to Albion in April 1980 as a mechanical engineer in charge of the mechanical design for the fiberglass line. Defendant Vaughn Charles Chenoweth was first employed by J-M Products Corporation in 1971 and transferred to the HERM development project in 1972 where he was involved with operation of the HERM equipment. He left J-M in October 1978 to work at the defendant’s Huntington Rock Wool plant and ultimately transferred to the Albion fiberglass insulation plant where he is a manager of process and quality control. These four employees constituted plaintiff’s HERM development cadre. Defendant Kenneth Limberg was employed by J-M Sales Corporation in March 1977 as an hourly worker and advanced to become a research technologist, process technician, and a supervisor of operations on the HERM line. He also acted as a troubleshooter for the start up of commercial HERM lines and trained operating personnel at the Willows, Winder and Innisfail plants. Limberg left J-M in October 1980 and joined Guardian at its Albion facility where he is a production shift manager. Defendant Robert Nishwitz was first employed by J-M Products Corporation in November 1974 as a draftsman and project engineer for the HERM line. In April 1978, he left J-M and worked as a project expediter for J.C. Beasley, Inc., for a five month interval. In October 1978, Nishwitz joined Guardian at the Huntington plant and transferred to the Albion operation in November 1979 where he is a maintenance supervisor. Two other individual defendants who were named in the original complaint have since been dismissed from the suit by plaintiff: John Mikulak, an employee of J-M Fiberglass Inc., dismissed October 6, 1981, and Joseph Church, an employee of J-M Products Corporation, dismissed January 28, 1982. Each individual defendant, regardless of the subsidiary which initially employed him, executed an employee agreement which provided: That any and all inventions, discoveries or developments, whether sole or joint, relating to, or capable of use in conjunction with, the business of the Company or of Johns-Manville Corporation or of any subsidiary of Johns-Manville Corporation which the undersigned employee may either conceive, complete or first reduce to practice during the period of said employment, together with any and all models, descriptions, drawings and records relating thereto and any and all applications for Letters Patent and Letters Patent based thereon, are to be and become the property of Johns-Manville Corporation or its nominee; That except as required in his duties to the Company, the undersigned employee shall not disclose or use at any time, either during or subsequent to the said employment, any secret or confidential information of the Company or of JohnsManville Corporation or any subsidiary of Johns-Manville Corporation (whether or not developed by the undersigned employee) unless he shall first secure the Company's written consent; That the undersigned employee understands that any information, formula, procedure, drawing, device or compilation of data which is used in the Company’s business or that of Johns-Manville Corporation or of any subsidiary of Johns-Manville Corporation and which gives any of them an opportunity to obtain an advantage over competitors who do not know or use it, may constitute secret or confidential information. * * * * * * The undersigned employee further agrees that in the event of the transfer of his employment from the Company to any subsidiary, parent, or affiliated company thereof, his employment shall continue to be subject to each and all of the terms and conditions hereof, except as modified as herein provided for, and thereupon “the Company”, as used in this agreement shall mean such subsidiary, parent or affiliated company____ II. OVERVIEW The gist of plaintiff’s complaint against defendants Guardian and its named employees is that Guardian, with no prior background in the field, would have been unable to begin production of fiberglass insulation in so short a period of time without appropriating both plaintiff’s patented fiberization process and the other techniques developed by J-M, and also the expertise of former J-M employees, including the individual defendants. In sum, plaintiff is accusing defendant of industrial piracy, and the Court is persuaded that the record sustains plaintiff’s accusation. Specifically, plaintiff has alleged appropriation of its trade secrets, unfair competition, breach of employment contracts and of fiduciary duty by the individual defendants, and infringement of the patent in suit. Although plaintiff has not sustained its burden of proof as to every detail of its claims, plaintiff has established by the preponderance of the evidence that the patent in suit is valid, that defendant has infringed it, and that defendant appropriated numerous techniques and refinements which plaintiff has developed in connection with its commercialization of the fiberization process embodied in the patent in suit. Furthermore, plaintiff has established that certain of these techniques qualify for trade secret protection under Michigan law, and that the appropriation of those that do not creates a pattern of unfair competition. Finally, the Court is persuaded that certain former J-M employees have breached both their fiduciary duty to and their employment contracts with the plaintiff J-M. A. Procedural History Plaintiff’s suit initially did not include the patent infringement claim, but based on the other claims plaintiff moved for a preliminary injunction which was so far-reaching that, if granted, would have been tantamount to the grant of a permanent injunction. It was, therefore, agreed by counsel and the Court that discovery and other pre-trial procedures would be accelerated and the matter heard on the merits as soon as practicable. Plaintiff, on May 5, 1981, filed an amended complaint alleging infringement of the patent in suit. During the course of pretrial procedures, defendant filed various counterclaims, all of which have been dismissed by stipulation with the exception of those dealing with the validity of the patent and its infringement. The non-jury trial commenced on October 19, 1981 and consumed 34 days of trial. The trial transcript consists of 4143 pages and 283 exhibits were introduced. The parties subsequently submitted proposed findings of fact and post-trial briefs. Final arguments were heard on June 10, 1982. This Memorandum Opinion constitutes the Court’s Findings of Fact and Conclusions of Law as to liability, and as to plaintiff’s motion for injunctive relief pursuant to Rule 52, F.R.C.P., it having been stipulated that the liability and damage issues would be bifurcated. B. Credibility Many of the Court’s findings of fact rest on the Court’s underlying determination of witness credibility. The factual issues in this case have been numerous, and nearly every issue has been hotly contested. Furthermore, the technical complexity has necessitated the Court’s heavy reliance on expert testimony. Since plaintiff’s expert Don Simmers, and defendants’ expert, Duane Faulkner, have presented the Court with markedly differing versions of how the patented and accused processes work, the Court has been required to make an intuitive judgment as to the credibility of each witness, and abide by that where it has lacked the technical explanations to find its own way. The Court finds Don Simmers to have been a credible witness, whose testimony never lacked consistency, and was verifiable by empirical evidence. He conscientiously acquitted his duty to inform and educate the Court. On the other hand, Duane Faulkner was frequently a less than credible witness. Answers were often self-serving, evasive or in conflict with prior testimony. Specific incidents which support this conclusion have been detailed at appropriate places throughout the opinion. As a prefatory example, Faulkner’s explanation as to the function of the accused Albion fiberizer was in direct conflict with the explanation in the patent application, No. 226,362 (filed January 19, 1981), on which he and Chenoweth were named co-inventors. His attempts to resolve the conflict were unpersuasive. Furthermore, the other two defendants who also appeared as witnesses gave conflicting testimony as to matters of record. Steven Sanford, when asked about his solicitation for employment at Guardian, testified that Schairer initiated the contact. This conflicts with Faulkner’s testimony that it was Sanford who made the initial contact. Schairer did not testify and, therefore, the conflict was not resolved. Sanford also sought to minimize his role in the development work to that of mere draftsman. His status as inventor on three J-M patents belies that assertion. Likewise Chenoweth was unable to recall the sequence of events which led to his employment at Guardian, or the contents of the HERM operating manual, which he coauthored while at J-M. (Plaintiff's Exhibit 26). His explanation of the Albion fiberizer tracks Faulkner’s explanation, which the Court has not found credible. On the whole, he was a poor witness with a weak memory and multiple conflicts in his testimony. Sczesny, president of defendant Guardian Corporation, likewise suffered from lapses of memory concerning Guardian’s intentions about fiberglass entry and early contacts with Faulkner. Plaintiff’s counsel highlighted these discrepancies during his cross examination. Suffice it to say, the Court finds that plaintiff’s witnesses, on the whole, were more credible than were defendants’ witnesses. III. FORMATION OF MINERAL FIBER INSULATION This suit evolves from the course of JM’s development of a new method of producing fiberglass insulation fibers. Although the focus of this litigation is fiberglass technology — more specifically the techniques of rotary fiberization — some knowledge of rock wool insulation processes is necessary to an understanding of the claims in this law suit. The purpose of insulation is to prevent the mixture of air that has been heated or cooled to a desired temperature with air which has not been so conditioned in order to conserve the energy necessary to maintain the desired temperature. Mineral fiber insulation creates a dead air space by providing a matrix of short fine fibers which reduces the rate of exchange of air at the desired temperature with air of an undesired temperature range. Insulation fiber’s effectiveness at reducing conduction increases as the diameter of the fiber is reduced. Optimal insulation properties exist when the mineral fibers are less than 7 M in diameter and less than 1 inch or so in length. Production of mineral fiber insulation involves several steps common to both fiberglass and rock wool. The raw material or “batch” must be melted, turned into individual fibers of the appropriate diameter and length (the process known as fiberization), collected and packaged as either bats, long strips for roll insulation, or chopped into small pieces for blowing. The melting and fiberization processes constitute what is known in the trade as the “hot end”. The collection and packaging processes are known as the “cold end”. Both the patent and the trade secrets in dispute involve Guardian’s alleged appropriation of J-M’s developmental work regarding the “hot end”. A. Rock Wool Insulation Insulation fibers are formed by first melting the raw ingredients and then by some means transposing the melt into individual fibers. In rock wool production, the raw ingredients, such as rock or slag, are introduced into a melter and the resultant melt is drained through a bottom orifice and delivered to a fiberizing apparatus by a refractory lined trough. The melt may be turned into fiber by, for example, blasting it with high-pressure steam or pouring it onto a stacked set of rapidly rotating horizontal rollers. In each method, the primary product is composed of a head and a tail, in rough analogy, a comet with a tail. The tails are usable for insulation purposes while the heads or shots are not. These processes are commonly referred to as the shot propulsion method of fiberization. B. Fiberglass Insulation Traditionally the formation of fiberglass insulation involves melting a premixed combination of minerals, primarily silica (the proportions depending on the desired properties), in a conventional melter, a large ceramic pot fired by fossil fuel. The batch is typically delivered by an auger feed on the side wall, and the resulting melt is delivered to a forehearth where its temperature is controlled until delivery to the fiberizing apparatus. The fibers are formed by positioning a stream (or streams) of molten glass in the path of a highly kinetic and high temperature stream of combustion gases. In the flame attenuation process (known in J-M’s vernacular as “pot and marble”), glass pellets, rough formed marbles, are loaded into a melter pot with quarter inch diameter bottom outlet orifices through which the molten glass exudes. The glass is soft, or plastic, at the orifices where the primary filaments (primaries) are formed. The primaries must go through two steps of “attenuation” — the process of stretching a glass fiber or rod at its plastic temperature to reduce its diameter. The plastic primaries are first attenuated mechanically by a pull roller. Pulling cools as well as stretches the fibers, so they are further attenuated to the appropriate diameter for insulation purposes (less than 7 M) by “flame attenuation”, i.e. the partially attenuated primaries pass through the exhaust stream produced by a high impact jet of combustible gas and air. The high temperature stream resoftens the fibers and the high kinetic energy of the stream stretches the fibers to the appropriate diameter. The “pot and marble” method was the state of the art technology when J-M entered the commercial production of fiberglass insulation by acquiring Libby Owens Ford Glass Fibers, Inc., and purchasing all rights to LOF’s technology, including patents. This acquisition augmented the research and development work which Donald Simmers, plaintiffs expert witness on glass fiberization in this suit, began for J-M in 1956. The next step in the evolution of fiberglass technology at J-M involved Rotary Fiberization, or the ' S-X process — its in-house designation at J-M which stands for “Simmers — Experimental”. In this conventional rotary process, the batch is melted, the molten glass is stored in a temperature controlled forehearth and from there is introduced to the interior of a rotating disc, also known as a spinner, fiberizer or rotor. In the S-X process, the spinner rotates at a relatively high rate of speed and, under the influence of centrifugal force, the molten material is diverted radially outward to the spinner walls, or peripheral bands, and through the holes in those bands. The holes on an S-X spinner are on the order of 25 thousandths of an inch (25 mils) or more. The centrifuged glass forms primary or centrifuged fibers on the order of 10 M or more in diameter, too large for use as insulation. Heat from a hot gas chamber keeps the centrifuged fibers plastic, and the high temperature kinetic gas in the form of a gas blast from a high velocity blower attenuates the centrifuged fibers to product diameter less than 7 microns, and breaks them into staple fibers approximately IV2" long, a desirable length to form a mat of fibers. Both the heat and kinetic blast are necessary to accomplish what is termed “hot gas blast attenuation”. The heat and high energy blast may come from a single or separate orifice. In the absence of this secondary HGBA, fibers produced by centrifuging or rotary fiberization through an S-X or other conventional rotor alone are too coarse to be used for insulation. J-M began developing its S-X Rotary Fiberization method in 1962, and still uses it for commercial production today. J-M’s competitors in the field of fiberglass insulation, Owens Corning Fiberglass (OCF), Certain-teed St. Gobain (CSG), and Knauf also use rotary fiberization. Knauf is a licensee of certain J-M technology. OCF and CSG are the owners of multiple patents in the field. The technology contained in the patent in suit, and the trade secrets which are at the heart of this litigation, encompass the next phase of J-M’s developmental work in rotary fiberization: an attempt to produce insulation quality fibers less than 7 M in diameter by directly centrifuging glass fibers through holes of sufficiently small diameters that no further external attenuation was necessary. To assist in the experimentation, a pilot line was set up at J-M’s Richmond, Indiana plant to develop a new manufacturing process involving both hot and cold end innovations. Throughout the course of this seven week trial, the hot end innovations were spoken of generically as HERM, although of HERM’s four elements only Electric Melting and Rotary Fiberization are at issue in this suit. Furthermore, both witnesses and, to some extent, counsel used the acronym HERM to include alleged trade secrets relating to the hot end which were not directly related to either melting or fiberizing. Although the designation HERM in some contexts lacks precision, its usage is ingrained, and the Court will use it to designate J-M’s developmental work that began in 1970. The term includes the patent in suit, and the alleged trade secrets, and was ultimately implemented for full scale commercial production at six J-M facilities. The obstacles to and triumphs of the HERM development process can not be fully appreciated without some basic understanding of the raw material to be fiberized molten glass. C. Glass The basic element in fiberglass insulation is, of course, glass. Glass is made from a mixture of various minerals, of which silica is the major ingredient. The industry is constantly experimenting with different formulae to achieve the best combination of ingredients for glass fiberization. The ultimate goal is a molten glass which will meet quality standards and avoid such problems as devitrification or crystalization which would block the spinner; high viscosity which, since more heat is required, shortens spinner life, causes equipment failure and demands more in fuel consumption; and erosiveness, which causes the spinner’s holes to enlarge rapidly, thus shortening their useful life. Although only a peripheral issue in this suit, an inordinate amount of evidence was introduced on the subject of glass and its complexities. The Court sees no profit in any prolonged discussion regarding glass in these pages. However, the evidence does provide an example relating to the wholesale appropriation by defendant of J-M’s processes and techniques, and influences the Court in its assessment of Faulkner’s credibility. The patent in suit discloses a formula (J-M’s 862-C) for “softer glass” particularly appropriate to the process therein described. Subsequent research by J-M (at Faulkner’s request) led to the development of another formula (# 901) which, with the addition of zinc oxide, provided improved fiber durability and resistance to deterioration under humid conditions. The new formula is disclosed in Patent 4,177,077. The latter formula was developed by substantial research and by trial and error during the development of the HERM project by J-M and was well known to Faulkner. Guardian began its operation at Albion with a glass that is strikingly similar to J-M’s # 901. Faulkner testified that in starting defendant Albion’s production he had intended to use the formula described in the patent in suit, but that he had inadvertently included zinc oxide (ZO2) instead of potash (K2O) in his formulation. It is not credible that Faulkner, with a doctorate in physics, over five years of intimate contact with the chemistry of molten fiberizable minerals and his direct involvement in the HERM project would “confuse” zinc oxide with potash. In fact, Faulkner had authored a report concerning HERM glass in which he used the chemical symbols of the formula in the patent in suit (Memo # PDCM99, March 20, 1974, Plaintiff’s Exhibit 23) and, of course, the patent in suit, in which he was named as a co-inventor, discloses the formula he allegedly intended to use. Strangely zinc oxide is not included as an ingredient at all in that formula nor in his report. It appears obvious to this Court that there was a knowing and deliberate appropriation of J-M’s most current developmental work in glass formulation. IV. HERM DEVELOPMENT The HERM development project was under the auspices of J-M’s Project and Development staff. C. Donald Simmers headed the project development group responsible for rotary fiberization at the inception of the HERM project and reported directly to James S. Yonk. Yonk was production engineer of J-M’s Fiberglass Division at the inception of the HERM project and, from 1972 to date, has been Director of Engineering for the Fiberglass Division. Both Simmers and Yonk were key witnesses for plaintiff concerning fiberization in general, as well as the specifics of HERM’s development. Faulkner, who joined J-M in 1972, assumed onsite responsibility for the HERM team in 1975, reporting directly to Yonk until leaving J-M in October 1977. A. The Invention of the Patent In Suit HERM had its genesis when Harvell Smith, who was assigned to S-X development, proposed using holes considerably smaller than 25 mils, the optimal size for the S-X process, so as to centrifuge directly fibers of less than 7 M and eliminate the need for external attenuation. Smith’s idea to use small holes to get small fibers, although apparently obvious to a lay person, was met with great skepticism by those skilled in the art. Simmers’ previous experiments with that idea in 1969-70 had ended in failure when the molten glass refused to be centrifuged through holes that small, and the spinner “froze”. Likewise an earlier patent teaches that mineral mixtures with a viscosity in excess of 40 to 45 poises cannot be fiberized through small holes. The viscosity of glass at the optimal temperature for fiberization is in excess of 300 poises. See U.S. Patent No. 3,485,611 (hereinafter the “Blaze patent”, after its inventor). Nevertheless, Smith was permitted to experiment and succeeded in centrifuging the melt at 4000 rpm (revolutions per minute) through 12 mil holes to produce fibers of less than 7 M without the use of hot gas blast attenuation, as had been required with the S-X process. Smith’s laboratory notes indicate that he experimented with the size of holes in the spinner, the number of holes and their configuration in rows, the number of revolutions per minute, the quantity of molten glass fed into the spinner per hour, i.e. “through-put”, the viscosity and temperature of the glass and the temperature of the spinner itself (Exhibit 31, Smith’s laboratory notes from November 1971 to April 1972). Fiberizing glass through holes less than 25 mils worked because Smith drastically raised the spinner temperature and the rpm’s so that the glass was more fluid and the increased centrifugal energy forced it through the smaller openings, which have one quarter the area of the holes in the S-X spinner. Smith also greatly increased the number of holes so that the total area of orifice openings was the same as the S-X spinner, which has fewer larger holes, with the result that the rate of through-put was unreduced. In December 1971, Smith was able to produce 5 M continuous glass fibers by centrifuging S-X formula glass through a disc with 41 rows of 12 mil laser pierced holes, with the disc heated to 1680° Fahrenheit by an internal burner and rotating at 3700 rpm. The glass was introduced at a through-put rate of 1100 lbs. per hour. The only problem with the fiber that Smith produced was that it was continuous and therefore unuseable for insulation; in the absence of the high velocity blast of the hot gas blast attenuation process, there was nothing to break the fibers into staple length for proper matting. Smith eventually concluded that he lacked the educational and technical background to pursue his discovery further. He selected Duane Faulkner as his replacement because of Faulkner’s educational background in physics (Ph.D.) and his technical skill derived in part from practical experience in other fields. Duane Faulkner joined J-M’s Product and Development team in June 1972 and proceeded to reduce Smith’s empirical findings to a theoretical mathematical model which described the interrelationship among the parameters, and how the different variables could be controlled to produce consistently fibers of the desired diameter without the use of external hot gas blast attenuation as was required in the S-X process. At the same time, Larry Howard was assigned the task of developing a method for breaking the continuous fibers into staple length. Howard was the process and development technician responsible for assisting Smith and setting up the equipment for the latter’s experimental work with 12 mil holes. Faulkner and Howard first tried to use an annular (completely around the circumference) air ring similar to one on the S-X system to deflect the attenuated fibers downward for collection. The annular air ring provided a continuous curtain of low pressure air, but did not break the fibers. Howard then tried interspersing four jets of compressed air in the annular air ring below the spinner. Although the jets did break the fibers, they fused together and were unuseable as insulation. By late 1972, through experimentation, Howard concluded that the air jets needed to be closer to the spinner to prevent fusing, with multiple jets circumferentially spaced evenly around the single manifold of the air ring. With the jets operating at pressures of 30-35 psi (pounds per square inch), the fibers were broken or shredded as they passed through the column of air. Due to the placement and spacing between jets, “quiescent” zones are created. As a fiber is formed, it passes into the region of alternating air streams and quiescent zones. An individual fiber will grow under the influence of centrifugal force until it is broken off by an air jet and blown down for collection. After the hole from which the fiber was extruded passes the jet and enters the next quiescent zone, new fiber begins to grow. The streams from the air ring are ambient and low pressure so that no attenuation occurs other than that caused by the centrifugal force imparted by the rotating rotor. There is no hot gas blast attenuation in the stream. Howard fabricated the first air ring himself, using Vi" pipe nipples rather than commercially fabricated jets in the fall of 1972. Early in 1973, he squashed some nipples as a forerunner to the “vee” jets ultimately used in combination with straight jets on the commercialized HERM spinner. The development of the spinner with 12 mil holes, the theoretical model which explained the interrelationships of the various parameters necessary to sustain fiberization through such small holes, and the air ring forcing the fibers into staple length for insulation was just the first step in the long process to a commercial HERM line. The spinner, formula and the air ring were the basis for J-M’s patent application filed December 22, 1972, which ultimately matured into the patent in suit, U.S. Patent No. 4,058,386 issued November 15, 1977. B. Development of the Alleged Trade Secrets The history of the entire HERM development process has been one of problem solving and refining the ancillary technology essential to successful commercialization of the method and apparatus disclosed in the patent application. The team discovered and solved problems in the areas of glass melting and transfer, spinner design and temperature maintenance, fiber breaking and collection. Duane Faulkner had direct oversight responsibility for all of the solutions and refinements. He was assisted chiefly by Schairer, Chenoweth, and Sanford, and had a support staff of technicians which included Limberg and Nishwitz. The initial experiments in the HERM development program were hampered because it was required to use a producing S-X line. Eventually, however, the team was permitted to construct its own pilot line, which included an electric kettle melter, and the development proceeded more rapidly. Earlier in 1971, J-M had purchased a Debusey-Pochet melter, which has been used for glass textile fibers, and refractory insulation fibers, but not glass insulation fibers. The electric kettle melter was slated to be operational by October 1, 1972. Once installed, however, it was necessary to adapt it to the needs of HERM fiberization. PLEASE NOTE THAT PAGES 28 THROUGH 35 HAVE BEEN REMOVED FROM THE OPINION AND FILED SEPARATELY UNDER SEAL. V. GUARDIAN’S ENTRY INTO FIBERGLASS INSULATION A. The Transfer of the HERM Team from J-M to Guardian Reynold Nebel, a former J-M executive, invited Duane Faulkner to join Midland Glass in the area of quality control and research and development, at a fiberglass installation in Shelbyville, Indiana, which Midland was attempting to acquire from Certainteed St. Gobain, an established fiberglass insulation competitor. Faulkner left J-M in October 1977, and was thereafter employed by Midland Glass for two months. Because Midland did not acquire the fiberglass plant in Shelbyville as anticipated, Duane Faulkner left its employ and joined Guardian Glass, again at the invitation of Reynold Nebel, who was then employed by Guardian. At the time of the invitation, Guardian was not yet in the insulation business. Guardian had also bid unsuccessfully for the CSG plant at Shelbyville. In December 1977, Guardian acquired a rock wool plant in Huntington, Indiana, and Duane Faulkner joined Guardian, with an eye towards eventual entry into production of fiberglass when the opportunity presented itself. (Faulkner, Tr. 1502). At the same time Guardian hired Faulkner from Midland Glass, it also hired John Mikulak, former plant manager of J-M’s Richmond plant, the facility in which the HERM team worked, and John McCague, former Director of Production and Engineering Development at J-M until 1977. It appears that these four individuals — Nebel, Faulkner, Mikulak and McCague — left J-M as a unit intending to assist some company not yet involved in fiberglass insulation to enter that industry. When Midland Glass was unable to expand from the production of glass containers into the fiberglass business, the four person team, led by Reynold Nebel, picked the next most likely firm: Guardian Industries. (Sczesny, Tr. 3750). James Schairer was the next former HERM team member to join Guardian. Schairer had written Faulkner an informal congratulatory note, dated September 29, 1977, in which he asked to be considered for a position in Faulkner’s new venture, and followed this up with a formal letter of application, dated December 22, 1977, for the position of plant manager at Huntington. In January 1978, Schairer joined Guardian at its Huntington plant and helped bring the mineral wool line into production by May 1978. He began designing and acquiring equipment for the fiberglass line at Albion in February 1980. Robert Nishwitz left J-M in April 1978 and worked for another employer prior to joining Guardian at its Huntington plant where he worked on project engineering from October 1978 to November 1979. Pri- or to Faulkner’s departure from J-M in October 1977, Nishwitz had written Faulkner a letter suggesting that he would be interested in working with Faulkner again. Faulkner testified that he did not solicit the letter, but he did contact Nishwitz during his interim employment at J.C. Beasley between April and September of 1978 about doing design drafting for the Huntington mineral wool plant. Nishwitz transferred to the Albion site and, in November 1979, began conducting studies on plans and initial costs for the conversion of the Albion plant for fiberglass production. Nishwitz is currently a supervisor responsible for maintaining the production equipment at Albion. Vaughn Charles Chenoweth stayed on with J-M’s HERM team as an equipment operator until October 1978 when he joined Guardian at its rock wool plant in Huntington as process and quality control manager. In December 1977, Chenoweth had written Faulkner and asked to be considered for future job opportunities with his “new organization”, i.e. Guardian, but he has no clear recollection of the actual sequence of solicitation of a job for hire with Guardian. According to Faulkner’s testimony, however, Faulkner contacted Chenoweth in late 1978. (Tr. 3075). As early as March 1979, Chenoweth heard “talk” that Guardian was planning to enter fiberglass production. Although the record contains little about his specific responsibilities at Albion, he was named as a co-inventor, along with Faulkner, on Guardian’s patent application No. 226, 362, filed January 19, 1981. (Plaintiff’s Exhibit 7). The application relating to a glass fiberizer was rejected September 4, 1981, and no patent has ever issued. This patent application was related to the subject matter of the invention disclosure Faulkner and Chenoweth proposed while at J-M on October 27, 1975, supra. (Plaintiff’s Exhibit 70). By inference it appears, then, that Chenoweth assumed for Guardian duties similar to those he had performed at J-M. Testimony reflects that Steven Sanford was initially contacted by James Schairer about possible employment with Guardian, and thereafter Sanford followed up by seeking employment from Faulkner. Sanford left J-M’s employ in February 1980. Although initially recruited to work at the Huntington plant to solve spinner motor mechanical problems, he was there only about a month before he transferred to Albion to assist with the mechanical design of the line and plant start up. Some prior mechanical designs, including the air ring, had been done by outside consultant, Nowicki, before Sanford joined Guardian in March 1980. (Tr. 4135). The actual operating air ring on the Albion line, however, conforms to designs done by Sanford, and is similar to that air ring which he designed for J-M, indicating that Nowieki’s designs were, at the very least, altered after Sanford joined Guardian. Sanford also designed, at Faulkner’s direction, a melt furnace orifice, a tube trough, a spinner cover, and the exterior fuel air ring. Kenneth Limberg, who left J-M in October 1980 to join Guardian that same month, just in time for the start up of the Albion line, was the last named defendant to move from J-M to Guardian’s fiberglass development team. Limberg had no role in the development at Albion, apparently because that work was completed for the most part prior to his advent at Guardian. He did discuss J-M’s new 901 glass with Faulkner after joining Guardian. (Tr. 1490). He was also privy to information concerning J-M’s development of a fuel air ring. (Tr. 1488). He was and still is employed in the capacity as production shift manager. PLEASE NOTE THAT PAGES 40 THROUGH 50 HAVE BEEN REMOVED FROM THE OPINION AND FILED SEPARATELY UNDER SEAL. VI. THE PATENT ISSUES Plaintiff has accused defendant of infringing claims 1 and 6 of U.S. Patent No. 4,058,386. Defendant has denied that its method of manufacturing fiberglass infringes plaintiffs patent and has counterclaimed for a declaratory judgment that the patent is invalid for various reasons, detailed below. A patent is a 17 year monopoly on an invention which meets three statutory standards for patentability: utility, 35 U.S.C. § 101; novelty, 35 U.S.C. § 102; and non-obviousness, 35 U.S.C. § 103. In return for the grant of exclusive use of the patented invention for 17 years, the inventor is obligated to disclose his claimed invention in sufficient detail so that the public at large may utilize the invention upon expiration of the patent. The inventor is also obligated to disclose the best mode of implementing the invention. See 35 U.S.C. § 112. A court is unable to apply these standards to determine the validity of the patent in suit, without understanding the scope of the invention, what the inventor claims, and what the patent discloses. In patent law, the terms “claims” and “discloses” are words of art. The claim is the bare specification of the invention found at the end of the patent. If the alleged infringer’s apparatus, process or product “reads on”, i.e. copies or duplicates, the claimed invention, “literal” infringement is established. Hanson v. Alpine Valley Ski Area, Inc., 611 F.2d 156, 161 (6th Cir.1979). The balance of a patent is devoted to a detailed description of how the invention works. Utilization of information disclosed elsewhere in the patent, but not in the claims, does not give rise to a claim for infringement as long as the accused device does not read on the claims. A. File Wrapper Estoppel The extent of the claims cannot be determined from the four corners of the patent alone, however. Claims must be read in the context of the patent’s file wrapper history, i.e. the steps the patentee pursued in the prosecution of the application. Claims as allowed must be read and interpreted with reference to rejected ones and to the state of the prior art; and claims that have been narrowed in order to obtain the issuance of a patent by distinguishing the prior art cannot be sustained to cover that which was previously by limitation eliminated from the patent. Graham v. John Deere Co., 383 U.S. 1, 33, 86 S.Ct. 684, 702, 15 L.Ed.2d 545 (1966). This doctrine is known as file wrapper estoppel. The prosecution of a patent involves give and take between the patent office examiner and the applicant. As the examiner rejects claims for not meeting the standards of utility, novelty or nonobviousness, or for shortcomings in setting forth the best mode, the applicant submits successive amendments, explanations and arguments to convince the examiner that the invention deserves patent protection. Claims and disclosures are modified to pass muster with the examiner. The doctrine of file wrapper estoppel prevents a patentee from later relying on what was surrendered to secure the patent. Normally file wrapper estoppel will prevent the patentee from enlarging the scope of his claim in an infringement suit to include an aspect of the invention which had been abandoned in an earlier claim and then asserting that the infringer’s operation is equivalent. Dollar Electric Co. v. Synderco, 205 U.S.P.Q. 949, 961 (E.D.Mich.1979) “[Abandonment is established if a phrase used in an abandoned or rejected claim is not used in a later accepted claim.” Kaiser Industries Corp. v. McLouth Steel Corp., 400 F.2d 36, 55 (6th Cir.1968), cert. denied, 393 U.S. 1119, 89 S.Ct. 992, 22 L.Ed.2d 124 (1969). File wrapper estoppel also applies in the opposite situation, where the patentee seeks to narrow the scope of what was claimed in the specifications to avoid a finding of obviousness. See e.g., Dollar Electric, supra, 205 U.S.P.Q. at 961. Where the patent office rejected the narrower claim and accepted the broader, the patentee is estopped from relying on the narrower, rejected claim when the patent’s validity is challenged. In those circumstances, the underlying factual determinations are more difficult. See Kaiser, supra, 400 F.2d at 55. This latter type of file wrapper estoppel (narrow claim rejected; broader claim accepted) is instrumental in determining the effect of plaintiff’s original disclosure of “a method for eliminating any conventional attenuating means”, which was later changed to “a method and apparatus for eliminating hot gas blast attenuation”. Assuming arguendo that the patent in suit is valid, whether it covers the elimination of all external attenuation or only hot gas blast attenuation is crucial to determining both the obviousness vel non of the patented invention and whether Guardian’s fiberizing process infringed it. B. The File Wrapper History J-M filed the parent application on December 12, 1972, No. 317,557. J-M sought to patent Smith’s fiberizer discovery for the production of continuous filaments as well as for the production of staple fibers for insulation. Successive versions of the original claims were rejected in light of the prior art and inadequate disclosure of how a large quantity of very small holes could function to centrifuge molten glass into fibers when previously such small holes had not worked. After multiple rejections, J-M abandoned the parent application. J-M subsequently filed two continuation-in-part applications (hereinafter referred to as CIP) on January 27, 1975. A CIP is the original application plus new subject matter in the claims and specifications. The application relates back to the filing date of the parent application only as to those matters within the original application. New matters are covered under the CIP’s more recent filing date. J-M’s CIP 544,097 claimed only a method and apparatus for the production of staple fibers, not continuous filaments. The wording of the specifications in the above application varies little from the final version of the patent in suit. Plaintiff disclosed the fiberizer with less than 18 mil holes, the theoretical model of the process which explained the interrelations of the parameters, and the air ring for breaking the fibers, and initially claimed all three elements. After continued difficulty in persuading the examiner, J-M filed Continuation 725,-072 on September 20, 1976, which was a continuation application of No. 544,097, and ultimately matured into the patent in suit. The abstract and specifications were virtually unchanged. J-M’s claims were virtually those accepted and then abandoned in CIP 544,097, which included claims for the theoretical model and parameter manipulation. Plaintiff subsequently cancelled, without prejudice, all those claims (Plaintiff’s Exhibit, p. 60) and added by amendment claims similar to those found in the patent in suit with two variations: (1) J-M claimed the use of a “fluid” stream for breaking fibers where the patent in suit claims a “gas” stream; and (2) J-M omitted the claim of a series of quiescent zones from the continuation’s claim 28. All claims were rejected. Subsequently, plaintiff renumbered the claims to the present state, replaced the word “fluid” throughout the claims with “gas”, and again answered the examiner’s concern of obviousness in light of the prior art. All claims were subsequently allowed, and the patent in suit issued in its present form on November 15, 1977. J-M’s applications included both independent and dependent claims. An independent claim stands on its own without any reference to any preceding claims. In the patent in suit, claims 1 and 6 are independent. A dependent claim incorporates by reference the prior independent claim, as well as claiming additional details. In the patent in suit claims, 2-5 and 7-10 are dependent. While the claim of the parent application and the patent in suit are, as can be expected, basically similar, substantial refinement and concessions were required to be made. The chief distinction between the parent application and the patent in suit is that the latter claims only a method and apparatus for producing less than 7 micron staple fibers without hot gas blast attenuation, and omits any reference to continuous filament production. Nor does the patent in suit claim the theoretical model with its interrelated parameters, although the patent does disclose it. But the critical distinction for determining the infringement question is the transition from the parent application’s claim that the fibers are formed without any external attenuation to the patent in suit’s claim that the method operates without hot gas blast attenuation. When J-M focused on eliminating all external attenuation in the production of continuous filaments, the patent application was rejected. When J-M focused only on eliminating hot gas blast attenuation in the production of staple fibers, however, the patent was granted. The net effect of the examiner’s acceptance of the latter and rejection of the former is that any fiberizing method which uses a rotor with holes less than 18 mils to form staple fibers less than 7 M infringes the patent in suit even though an additional external attenuation method is used, unless that method is hot gas blast attenuation. The patent claims relating to the air ring developed under the same give and take procedure. The examiner rejected as obvious that portion of the claim concerning breaking streams until J-M amended the claim to state that the streams were separated by “relatively quiescent zones”. Having thus narrowed its description of the air ring to secure the patent, J-M is es-topped from claiming that a process that uses an air ring without quiescent zones infringes the patent. In sum, according to classic file wrapper estoppel, due to various changes in claims and disclosures during the prosecution of the patent, J-M is also estopped from claiming (1) that its invention covers continuous filaments as well as staple length fibers; (2) that use of Faulkner’s model and parameters is an infringement of the patent; (3) that the air ring operates with a continuous stream of air (and the absence of quiescent zones); and (4) that the breaker streams may consist of “fluids”, because the patent in suit reduced its claim to cover only “gas”. J-M is entitled, however, to claim any process which directly centrifuges fibers less than 1 M in average diameter through holes 18 mils or smaller, as long as it does not use hot gas blast attenuation after extrusion. In this instance, file wrapper estoppel works to allow a broader claim because the narrower was originally rejected. “The claims that were finally allowed were broader than if the omitted claim had been included.” Kaiser Industries Corp. v. McLouth Steel Corp., 400 F.2d 36, 55 (6th Cir.1968), cert. denied, 393 U.S. 1119, 89 S.Ct. 992, 22 L.Ed.2d 124 (1969). C. Validity Defendant raises multiple defenses to plaintiff’s claim of patent infringement, with two main themes: (1) the patent is invalid, and (2) even if the patent were valid, defendant’s production methods and apparatus at Albion do not infringe. If plaintiff’s patent is found to be invalid, there is no need to reach the question of infringement. American Seating Co. v. National Seating Co., 586 F.2d 611, 622 (6th Cir.1978), cert. denied, 441 U.S. 907, 99 S.Ct. 1999, 60 L.Ed.2d 377 (1979). To be valid, a patent must be useful, novel and nonobvious. In evaluating whether these criteria are met, the Court must bear in mind that a patent has issued, and therefore carries a presumption of validity. American Seating, supra, at 615. The accused infringer may, of course, rebut that presumption, but in the case at bar defendant has failed to do so. The record as a whole supports the validity of the patent in suit, for the reasons set forth below. 1. Utility Defendant does not contest the utility of the patent. Indeed defendant’s unsuccessful attempt to secure a patent on a modification of the patent in suit adds weight to the validity of the challenged patent. See Ling-Temco-Vought, Inc. v. Kollsman Instrument Corp., 372 F.2d 263, 269 (2d Cir.1967). Because the burden of proof of invalidity for any reason is on the defendant, Eltra Corp. v. Basic Inc., 599 F.2d 745, 750 (6th Cir.1979), and Guardian has failed to prove the invention’s in-utility, the invention of the patent in suit is deemed useful, under the standards of 35 U.S.C. § 101. 2. Novelty An invention lacks novelty and is therefore unpatentable “only where the invention was identically disclosed in the prior art”. Ling-Temco-Vought, supra, at 267. See also, American Seating, supra, 586 F.2d at 618. An invention is not novel if it was anticipated by the prior art; however, “[t]he standards of anticipation are strict. The invention must be disclosed within the four corners of a single reference.” General Tire & Rubber Co. v. Firestone Tire & Rubber Co., 349 F.Supp. 345, 356, modified, 351 F.Supp. 872 (N.D.Ohio 1972), modified, 489 F.2d 1105 (6th Cir.1973), cert. denied, 417 U.S. 932, 94 S.Ct. 2643, 41 L.Ed.2d 235 (1974). Guardian makes a convoluted two-step argument that J-M’s invention lacks novelty. Defendant cites its rejected patent application No. 226,362, which covers essentially the same method of fiberizing as the patent in suit, and asserts it was rejected for lack of novelty. Defendant then asserts that since defendant’s method lacks novelty, if it is found to infringe the patent in suit, it has established that J-M’s invention also lacks novelty. A review of the file wrapper of Guardian’s rejected application (plaintiff’s exhibit 7) demonstrates that rejection was due to its obviousness, not lack of novelty. (Plaintiffs Exhibit 7 at document number 401223). Because defendant's argument is based on an erroneous assumption, the entire argument must fail. Defendant has cited no prior art which reveals all elements of plaintiff’s invention in a single patent, and therefore the Court must conclude that the invention is novel. 3. Obviousness The crucial standard, and the most difficult to apply, is obviousness. 35 U.S.C. § 103. “Essentially nonobviousness is the statutory equivalent of the requirement of invention”, derived from the Supreme Court’s decision in Hotchkiss v. Greenwood, 52 U.S. (11 How.) 248, 13 L.Ed. 683 (1851); Eltra Corp., supra, 599 F.2d at 751. The leading case construing the obviousness test in § 103 is Graham v. John Deere Co., 383 U.S. 1, 86 S.Ct. 684, 15 L.Ed.2d 545 (1966), wherein the Supreme Court stated: While the ultimate question of patent validity is one of law, Great A. & P. Tea Co. v. Supermarket Corp., supra, at 155 [71 S.Ct. [127] at 131] [340 U.S. 147, 71 S.Ct. 127, 95 L.Ed. 162 (1950)], the § 103 condition, which is but one of three conditions, each of which must be satisfied, lends itself to several basic factual inquiries. Under § 103, the scope and content of the prior art are to be determined; differences between the prior art and the claims at issue are to be ascertained; and the level of ordinary skill in the pertinent art resolved. Against this background, the obviousness or nonobviousness of the subject matter is determined. Such secondary considerations as commercial success, long felt but unsolved needs, failure of others, etc., might be utilized to give light to the circumstances surrounding the origin of the subject matter sought to be patented. As indicia of obviousness or nonobviousness, these inquiries may have relevancy. Graham v. John Deere Co., supra at 17-18, 86 S.Ct. at 694. [3] This Circuit has developed a three-step method of determining whether a patent is invalid for obviousness: 1) a factual determination of the prior art; 2) a factual determination of what improvement the patentee has made over the prior art; and 3) a legal determination of whether the improvement would have been obvious to one skilled in the art. Westwood Chemical, Inc. v. Owens-Corning Fiberglas Corp., 445 F.2d 911, 914 (6th Cir.1971), cert. denied, 405 U.S. 917, 92 S.Ct. 941, 30 L.Ed.2d 786 (1972); Monroe Auto Equipment Co. v. Heckethom Mfg. & Supply Co., 332 F.2d 406, 411 (6th Cir.), cert. denied, 379 U.S. 888, 85 S.Ct. 160, 13 L.Ed.2d 93 (1964). Lucerne Products, Inc. v. Cutler-Hammer, Inc., 568 F.2d 784, 796 (6th Cir.1977). a. Prior Art Generally i. Scope The review of the contents of the pertinent prior art is tedious and determining its scope can be difficult. “[T]he prior art that is relevant in evaluating a claim of obviousness is defined by the nature of the problem confronting the would be inventor.” Smith v. Acme General Corp., 614 F.2d 1086, 1093 fn. 11 (6th Cir.1980), citing, Republic Industries, Inc. v. Schlage Lock Co., 592 F.2d 963 (7th Cir.1979). From the sum of J-M’s argument, the Court infers that J-M interprets the scope of the prior art to include all patents on the topic of rotary fiberization. Defendant, on the other hand, clearly defines its interpretation of the scope to include fiber formation from molten mineral material without regard to the presence or absence of a rotary process. The patent examiner elected to be guided by a patent which discloses the rotary fiberization of a viscous ceramic solution (albeit not molten) through 20 mil holes to form fibers within the same M range as the patent in suit. U.S. Patent No. 3,485,611 issued to Blaze, December 23, 1969 (hereinafter referred to as “Blaze”). The Blaze patent teaches the difficulty of fiberizing material with a viscosity of more than 40-45 poises through holes less than 20 mils, and the patent examiner relied on its teaching in rejecting J-M’s application regarding continuous filaments. The problem that J-M’s inventors solved was how to form fibers by centrifuging a viscous material through very small holes, and breaking it into staple length fibers. The scope of the art as defendant would have the