Full opinion text
OPINION LATCHUM,' Senior District Judge. I. INTRODUCTION This aged and hardfought patent infringement action, unlike most such cases, developed into an emotionally charged and controversial piece of civil litigation. As the case unfolded before trial, during reissue proceedings before the United States Patent and Trademark Office (“PTO”), during discovery, and at trial, the evidence exposed some of the unattractive sides of human nature. It was unique in this respect. This action was originally brought on May 22, 1977, by the plaintiff, Scott Paper Company (“Scott”), against the defendant, Moore Business Forms, Inc. (“Moore”). (Docket Item [“D.I.”] 1.) The original complaint alleged that: (a) Scott- owned U.S. Patents 3,193,404 (“the 404 patent”) and 3,278,327 (“the 327 patent”) (collectively called the “Davis patents”); (b) Scott in 1972 at Moore.’s request granted a royalty bearing license to Moore under the two Davis patents; (c) Moore paid substantial royalties to Scott for four years until mid-1976; (d) Moore “effectively terminated” the license agreement in 1976; (e) Moore continued to practice the Davis inventions as an unlicensed infringer; and (f) Moore’s infringement of the patents since mid-1976 was wilful and wanton. (Id.) Moore answered the original complaint and alleged that the Davis patents' were invalid and unenforceable. (D.I. 7.) In November 1977, Scott filed applications to reissue the Davis patents (TX 300, 301). The reissue proceedings before the PTO lasted for four years. (Id.) Moore actively participated as a protester throughout the reissue proceedings, contending that the Davis inventions were not patentable and that Davis had been guilty of fraud and inequitable conduct. (Id.) After a most comprehensive examination, the PTO rejected Moore’s protests and Reissue Patents 30,797 (the “404/797 patent”) and 30,803 (the “327/803 patent”) were granted to Scott respectively on November 16, 1981 and November 24, 1981 (TX 1090, 1091). Both reissued patents expired in mid-1982. Scott filed an Amended and Supplemental Complaint on November 24, 1981, asserting two alternative theories for recovery. Count I sought compensatory and punitive damages and interest based on Moore’s failure to pay royalties under the License Agreement between Scott and Moore relating to the Davis patents. Count II sought treble damages, attorneys’ fees and costs based on Moore’s wilful infringement of the Davis patents and reissue patents. (D.I. 32.) On May 19, 1982, Davis was permitted to file a complaint in intervention in which he asserted rights against Moore and Scott on the basis of an “equitable interest” in the patents arising out of a 1965 contract between Scott and Davis (TX 307). Answering the Scott and Davis complaints, Moore’ asserted defenses that the Davis patents (1) were invalid because (a) the inventions were obvious, and (b) that the inventions were “on sale” in this country more than one year prior to their effective filing dates, (2) were unenforceable because of Davis’ unequitable conduct before the PTO in procuring the patents, (3) were not infringed by Moore, and that Davis had no cause of action against Moore. (D.I. 34 at 46.) Following the reissue proceedings and intervention of Davis, the parties engaged in extensive discovery. A twelve-day trial to the Court sitting without a jury took place between February 6-22, 1984. After carefully considering the sufficiency, weight and credibility of the testimony of the witnesses, their demeanor on the stand, the documentary evidence admitted at trial, and the post-trial briefs of the parties, the Court enters the following findings of fact and conclusions of law which are embodied in this opinion as permitted by Rule 52(a), Fed.R.Civ.P. II. THE FACTS A. The Inventions In Issue The inventions in issue involve carbon-less recording paper having a colorless dye precursor coated on the back side (coated back or “CB” sheet). To make a business form, the CB sheet is laid atop a second sheet having a clay coating on its front side (coated front or “CF” sheet). When the top surface of the CB sheet is impressed with a pencil or by a typewriter key, the corresponding dye precursor coated on the CB sheet is transferred to the second CF sheet where, upon contact with the clay, it becomes colored and reproduces the impressed image. To make a multi-part or multi-leaved business form, several additional sheets may be placed between the top CB sheet and the bottom CF sheet. These are called CFB sheets, because they each have clay coated on the front, and colorless dye precursor coated on the back. The pressure of an image impressed on the top surface of the CB sheet is transmitted through the several CFB sheets to the CF sheet, producing the colored image on the front (clay coated) surface of each. (D.I. 113, § 3, Ml 12-13; Tr. 59-61, 1178-79 & 1306-07; TX 2.) Carbonless recording paper of this general type was disclosed in the patent literature by the 1930’s, and was first developed commercially by National Cash Register, now NCR, in the early 1950’s. NCR used a two component colorless dye precursor system in carbonless paper, namely, a combination of CVL (Crystal Violet Lactone) and BLMB (Benzoyl Leuco Methylene Blue) (Tr. 62-64, 664, 1200 & 1999). Chester Davis, the inventor, worked for NCR from 1947 to 1952, following receipt of his Bachelor of Science Degree in chemistry from Indiana University in 1944 and a Master of Science Degree in organic chemistry from the University of Wisconsin in 1945 (Tr. 52-55). In 1954, Davis returned to Indiana University as a research associate and post-doctorate fellow (Tr. 57-58). While in this position, Davis recognized that the recently introduced NCR business forms had many deficiencies, and he decided to try to develop a recording paper which would avoid those deficiencies and be superior (Tr. 61-69). At Indiana University, Davis lectured during the. day but had the use of a chemistry laboratory in the evening for his own purposes (Tr. 69-73). Davis initially developed a theory involving Crystal Violet, a triphenylmethane dye, which was the most intense color former then known to dye chemists. The molecular structure of Crystal Violet includes a central carbon atom, and Davis proposed to “hook something” onto the central carbon atom which would convert colored Crystal Violet to a colorless form. This would be different from the NCR approach of chemically modifying one or more of the three phenyl groups of the Crystal Violet molecule, which produced CVL (Tr. 69-73). Davis knew that Crystal Violet Base itself was too unstable to be used in a carbonless system, changing to blue-violet too easily, and staining the skin. He also knew that Crystal Violet Cyanide, another Crystal Violet derivative, could be made in a colorless form, but it was too stable and “you couldn’t get the color back out again.” Mr. Davis theorized that adding something to the central carbon atom might effect a workable compromise, but there were “hundreds of thousands” to “millions” of available possibilities (Tr. 74-75). Davis first tried amines, but they also proved to be unstable. He next found a compound in the literature (Beilstein) called Crystal Violet Thiocarbinol which was said to be a white crystalline material. He made it, but “Beilstein was wrong” because it “turned out to be not white, not stable, and no good” (Tr. 75-77). Davis then experimented with a diphenylmethane dye, Michler’s Hydrol, which has only two instead of three phenyl groups attached to the central carbon atom. Michler’s Hydrol Thiocarbinol proved to be a little better than Michler’s Hydrol itself, but it gave a slow reaction with ordinary paper and “wasn’t any good either” (Tr. 78-80). Davis became discouraged, and in February of 1955 he “sat back and tried to figure out what I could substitute on that Crystal Violet central carbon atom.” He formed another theory, to put a meta directing group, such as nitro, carbonyl or sulfonyl, directly on the central carbon atom.. The nitro group made “a mess” so that idea went “down the drain.” He did not know how to put a carbonyl or sulfonyl group directly on the central carbon atom, however, so he again referred to Beilstein to see if any Crystal Violet derivative of that type had ever been made (Tr. 80-83; TX 1141-B). Beilstein, a German publication consisting of about 100 volumes (Tr. 1784-85), was available to Davis at Indiana University in 1954-55. He first looked for a Crystal Violet nucleus with either a carbonyl or sulfonyl group attached to the central carbon atom, to see if he could learn how to make them. He looked under the name index and the empirical formula index but there was nothing there (Tr. 83-85). Modifying his initial theory, Davis then checked Beilstein to determine whether a similar material had been made from Michler’s Hydrol. He did not find anything in the name index because of Beilstein’s improper nomenclature, but he found three compounds in the formula index and one of them was described as a “sulfone.” Beilstein described how to make the sulfone, but it did not say anything meaningful about color forming properties; it only stated that the sulfone dissolved in mineral acids with a blue color (Tr. 90-91). Davis then believed he had found something which might fit the theory that he had developed, and he went back to the lab to make the sulfone. If it turned out to be unstable, then there would be no point in going any further. If it turned out to be too stable, however, then he might be able to. make the corresponding Crystal Violet derivative in which he originally was interested (Tr. 83-91; TX 1143 at 91-118). Davis made the “sulfone” by a procedure which differed from the one in Beilstein, but one with which he had experience in making other materials. He reacted Michler’s Hydrol with benzene sulfinic acid, producing what is now called the benzene sulfinate of Michler’s Hydrol (“BSMH”). Based on Beilstein’s description of the compound as a “sulfone,” Davis expected the procedure to take a long time. To his surprise, the reaction occurred immediately (Tr. 93-97). Davis re-crystallized the BSMH which he had obtained, from either benzene or toluene, and tested its solubility in hot and cold benzene. He could not get enough of the BSMH to dissolve in cold benzene to give any worthwhile test. By dissolving it in hot benzene, however, he obtained a strong enough solution to give an immediate strong blue color on clay but no color on newsprint. He believed that this showed him that BSMH was in the stability range he was seeking — less stable than Crystal Violet Cyanide but more stable than Crystal Violet Base (Tr. 101-05). From these tests Davis concluded that BSMH was not soluble enough at room temperature to have any apparent commercial value in recording systems. Nonetheless, Davis believed he had made the first “Davis dye salt,” a sulfinate derivative of Michler’s Hydrol) which might be useful as a color precursor if the solubility problems could be overcome. Davis next made the paratoluene sulfinate of Michler’s Hydrol (PTSMH). It proved to him to have a “marked jump” in solubility, and it gave a very intense blue color on clay, but no coloration on newsprint. He testified: “The minute I saw it didn’t all come out in benzene ... I tried it out in a mixture of PCB and' mineral oil, and it stayed in and gave a very good print. It now had commercial possibilities.” (Tr. 110-12.) Davis first thought that he had made sulfones of Michler’s Hydrol, because Beilstein described BSMH as a sulfone. After a month’s further work, and based on observations such as the speed of reaction, he began to suspect that the compounds must be salts and not sulfones (Tr. 97-100). Davis observed that when PTSMH was dissolved in acetone it was colorless, but when water was added to that solution it turned intensely blue immediately, meaning that the water was causing a color formation that could not be an acid-base reaction as with the NCR systems (Tr. 97-101, 115-16). Davis confirmed these findings in oleic acid and soap systems (when washing his hands) and concluded that BSMH and PTSMH formed color by a mechanism that was altogether different from anything described by NCR, a totally new type of reaction which was physical in nature, i.e., dissociation, instead of a chemical reaction. On the basis of all his observations, Davis concluded that colorless PTSMH and BSMH must be associated dye salts and that BSMH was not a sulfone as suggested in Beilstein (Tr. 114-19). Davis carried out the above work and made his discoveries beginning in February of 1955 (Tr. 124-26; TX 1114-B at 16 et seq.). By May of 1955, Davis was convinced that he had discovered a new recording system which gave images stable to light and humidity, based on inexpensive chemical starting ingredients (Tr. 127, 129). Davis also recognized that the system would require significant additional development work with a lot of materials, waxes, solvents and coating procedures, and that Davis had neither the facilities nor the money to carry out such projects (Tr. 130). He accordingly decided to contact companies and try to interest them in doing the development work (Tr. 127-34). B. Davis’ Activities To Sell Rights To Develop His Inventions Davis first obtained the names of various carbon paper manufacturing companies from a government brochure, and drafted standard letters which he sent in May of 1955 to companies such as Ditto, Smith-Corona, A.B. Dick, Interchemical, Addressograph-Multigraph, Remington Rand, IBM, Burroughs, Royal McBee, and Moore Business Forms (Tr. 134-36; TX 300 at 83-84). Davis lacked the funds, facilities and intent to make any product that could be sold or offered for sale because that would have required hundreds of pounds of the precursor and large rolls of paper just to start an evaluation (Tr. 134-35). “There was no way I could make even enough to start this out.” (Tr. 135.) Davis’ letters accordingly explained that he had discovered in his laboratory a new colorless recording system having certain properties, but which needed further evaluation. He offered each company the opportunity to discuss acquisition of the right to develop his inventions (Tr. 134-37; TX 300 at 83-84, 841-42). Davis learned that many of these companies were not interested because of the “not invented here”, syndrome, a common impediment to small inventors seeking to interest large companies in their inventions (Tr. 2052-53). Others wanted a disclosure of the invention, but he told them that he would give only a partial disclosure, without naming the key to his new system, the color precursors (Tr. 138). In face-to-face meetings with those companies which did indicate an interest, Davis demonstrated the color forming capabilities of his inventions with small pieces of homemade CB sheets containing his secret precursor. To prove that he did not have the same system as NCR’s chlorinated biphenyls, he chewed on a sample of his wax- and-precursor to show that it was not toxic (Tr. 138). Davis also gave representatives of some of these companies little strips of his CB paper. (Id.) There was only about fifteen millionths of a pound of his new dye salt on each little sheet, “about the size of a fly speck.” (Tr. 139.) There was no equipment known at that time which could analyze such a small amount of material and determine its chemical composition. (Id.) Davis never provided any of the companies which he contacted or anyone else with samples of the dye salt itself, as opposed to dye salt dissolved in a solvent and coated with wax o.n a few small strips of paper (Tr. 139). Davis sent one of his standard letters to the president of Moore on May 27, 1955, because Moore was the largest manufacturer of business forms in the United States, possibly in the world. (Id.) His letter inquired whether Moore was interested in developing his invention, and offered to discuss the matter with Moore representatives (Tr. 139-40; TX 300 at 265.) Davis thereafter met with B.J. Staneslow of Moore, and several others, in Niagara Falls, New York. They talked about Davis’ invention and how it differed from the NCR system. Davis demonstrated his new product without disclosing the secret dye salt. Moore understood the need for secrecy, and stated, “Naturally, we do not expect you to divulge the identity of your materials.” (TX 300 at 274.) Moore evidenced interest, as revealed by Moore’s internal memos and the further communications with Davis over the next few months (Tr. 140-45, 716-22; TX 300 at 243-44). Moore evaluated Davis’ inventions as best it could with the limited information imparted by Davis, found that the inventions compared favorably to the NCR paper, and concluded that while a “considerable amount” of work was needed, “there is a strong possibility that Davis has a new colorless dye which could be patented.” Moore could not identify Davis’ precursor, however, and admitted that “It will be necessary to wait for the disclosure to determine this.” (TX 300 at 268-69 & 278-79.) Davis also learned that Moore had precursor systems of its own under investigation. Moore kept trying to obtain additional information from Davis and would not commit itself, so Davis assumed Moore was “just stalling” and advised them in August of 1955 that he thought Moore would have been “an ideal purchaser for this invention” but he -had “just made an oral agreement with a responsible firm for the purchase of an option on my colorless copy paper. For this reason I must inform you that the rights for my colorless copy paper are no longer available.” (Tr. 140-43; TX 300 at 281-84.) The company to which Davis was referring was The McBee Company (“McBee”) of Athens, Ohio (Tr. 143). Davis first contacted McBee in May 1955. Davis gave McBee a demonstration of his invention without disclosing the chemical composition of his dye salt and McBee invited Davis for a visit (Tr. 145, 156-57; TX 300 at 140-44). Davis took some of his dye salt, “I didn’t tell them what I had,” McBee provided waxes, and Davis ran off about a dozen CB sheets on a small piece of research coating equipment which McBee had (Tr. 158). McBee saw the invention work, “and they liked what they saw.” (Id.) McBee asked for an option on the rights to Davis’ inventions, and an agreement was signed on September 12,1955 (Tr. 159-160; TX 300 at 146-58). Davis did not tell McBee “anything about what materials were used until they actually bought the option.” (Tr. 159.) During the initial option period, Davis worked with a McBee representative in a locked research room “in privacy” making coatings of Davis dye salts on paper. McBee decided that more development work was needed, and let the option expire on January 13, 1956. McBee returned to Davis all the samples that McBeé had made, the copies of the patent applications, and all the other documents. Davis understood that McBee would keep the inventions secret (Tr. 161-67; TX 300 at 78-80, 196-97 & 199-204). In 1958, Eli Lilly and Company (“Lilly”) and Davis also entered into a contract whereby Lilly would investigate another of Davis’ inventions, a dinitro Crystal Violet base, which was “altogether different” from the inventions involved in this action (Tr. 178-79). Davis hoped that Lilly would work on developing the sulfinates of Michler’s Hydrol as well, but Lilly never did any work of consequence on the sulfinates. Davis then terminated the agreement with Lilly in January of 1960 because Lilly failed to do the required work, and all the patent rights were reassigned to Davis. Lilly, as McBee, also agreed to keep secret the disclosure made by Davis (Tr. 179-85, 191-95 & 197-98; TX 300 at 78-80, 217-23 & 240-41). C. Patent Procurement History In mid-1955, about the time Davis had started his discussions with McBee, he decided to protect his inventions by patenting them. At the Cincinnati Public Library, Davis obtained a pamphlet published by the PTO on how to patent your own invention. Because the pamphlet recommended that inventors engage a patent attorney, Davis contacted Wood, Herron & Evans and met with Mr. Wood (now deceased) in July of 1955 (Tr. 147-49; TX 300 at 822). To reduce expenses, Davis prepared a “rough draft of the colorless dye salt application in July. Later, I prepared one on the colorless recording paper.” Davis gave his drafts to Mr. Wood in August of 1955 (Tr. 149-50; TX 300 at 867-74). The draft application which Davis prepared on the colorless dye salts acknowledged that BSMH, which he had found in Beilstein, was a known compound (he had not looked up the original Hinsberg articles). Although BSMH was “not listed in Beilstein as it would ordinarily be” — it was “listed backwards” as phenyl — Davis named BSMH the same way Beilstein did, “so you could find it”: The only known member of this series [Davis dye salts], that from Michler’s Hydrol and benzenesulfinic acid (called Phenyl - (4,4' - bis-dimethylaminobenzhydryl)-sulfone), is completely insoluble in the usual solvents used in recording systems. (TX 300 at 870, compare p. 296; see also Tr. 2119-21.) He used the phrase “The only known member” without specifically identifying a standard reference work like Beilstein because that is the way he had seen it done in patents at NCR and elsewhere (Tr. 154, 360, 370-73; TX 1143 at 13; TX 1675-78). Davis’ reference to the poor solubility of BSMH reflected his above-discussed inability to dissolve BSMH at room temperature in various solvents. Davis fervently believed at that time, and still believes, that this statement “accurately describes the teachings of Beilstein.” (Tr. 152-56, 254.) The two original applications, one on the transfer sheet (TX 1094) and the other on the dye salt (TX 1093), were filed on September 12, 1955 (Tr. 160; see also TX 344). The 1955 transfer sheet application described transfer sheets having on their surface a coating containing a substantially colorless sulfinate salt of Michler’s Hydrol (TX 1094; -TX 300 at 324-32). Several examples of such sheets were given, and the application stated further that the “dye salt” used in the invention is “more particularly described in my copending application Serial No. 533,877, filed September 12, 1955, for ‘Colorless Dye Salts and Their Use’.” (TX 300 at 331.) The 1955 dye salt application described the sulfinate derivatives of Michler’s Hydrol and their utility in transfer sheets for colorless recording systems (TX 1093; TX 300 at 292-302). “Michler’s Hydrol-p-Toluenesulfinate” (PTSMH) was specifically disclosed (TX 300 at 298), and the application explained that the colorless dye salts “may be used as a component of the coating of a transfer sheet.” (TX 300 at 299.) The dye salt application also incorporated by specific reference the entire disclosure of the transfer sheet application (TX 300 at 299), with the result that both 1955 applications disclosed transfer sheets having coatings containing PTSMH (Tr. 1058-62). PTSMH is a substantially colorless salt of toluenesulfinic acid and 4,4'-bis(Di-methylamino) benzhydrol (Michler’s Hydrol), so that claim 11 of the 327/803 Davis reissue patent, for example, appears to be fully supported by the disclosure of the 1955 Davis applications (Tr. 1155/1160-61; TX 1091, col. 10). As indicated earlier, the two 1955 Davis patent applications were prosecuted by Davis with the assistance of Mr. Wood (Tr. 170-71). When an Office Action was received from the PTO, Davis wrote up the substance of the response, and Mr. Wood put it in “more formal polished” terminology. (Id.) The PTO allowed some claims’, but they did not provide sufficiently broad coverage, so Mr. Wood recommended that additional compounds be made and tested to provide a basis for broader claim coverage (Tr. 170-73). In order to obtain access to equipment, chemicals and other facilities for further experimentation, Davis accepted employment as a “visiting man” for one year at the Colorado School of Mines (Tr. 173). Davis worked there from the latter part of 1956 to mid-1957, teaching chemistry during the day and working on his inventions at night (Tr. 174). - In this manner, he developed further information concerning his inventions, and a better understanding of how to define the dye salts (Tr. 173-74). On the basis of that work, the two 1955 applications were refiled as continuation-in-part (“CIP”) applications in May of 1957 (Tr. 174-75, 999-1002, 1004-05; TX 1095, 1096, 344). The 1957 transfer sheet application (TX 1095) stated that the “dye salts which are used in the practice of the present invention are more particularly described in my co-pending application Serial No. 533,877, filed September 12, 1955.” (TX 1095, 300 at 350-63.) This specific reference appears to have incorporated in the 1957 transfer sheet application the entire disclosure of the 1955 dye salt application (Tr. 175-77, 1155, 1160-61; TX 1095, 1093; see also TX 344). The 1957 dye salt application (TX 1096, 300 at 383-98) also specifically incorporated by reference the entire disclosure of the 1955 transfer sheet application (TX 300 at 394). This cross-referencing in the 1957 applications to the 1955 applications was in addition to the 1957 applications being CIPs of the corresponding 1955 applications (Tr. 1058-62; TX 1093, 1094, 1095, 1096) . Thus, each of the 1957 applications disclosed transfer sheets having upon their surface a coating containing substantially colorless PTSMH, and each provided sufficient disclosure support for claims, such as claim 11 of the 327/803 reissue patent. The 1957 transfer sheet application also disclosed diethylbenzene sulfinate of Michler’s Hydrol and its utility as a Davis dye salt coated on a transfer sheet (Tr. 1062; TX 1095 at 10). One aspect of the agreement between Davis and Lilly was that Lilly’s attorneys would continue the prosecution of the Davis applications (Tr. 181-83, 186). A Lilly attorney, Dr. VanArendonk (now deceased), rewrote and combined the two 1957 applications into a single application, which was filed on March 19, 1959 (Tr. 187; TX 1097). . Davis understood that the 1959 application was entitled to the benefit of the filing dates of his earlier applications, even though the earlier applications were not specifically mentioned (Tr. 188-97, 205-06; TX 300 at 18-19). For reasons which were never clear to Davis, Dr. VanArendonk drew the structural formulas of the Davis dye salts as sulfones, but the text of the 1959 application continued to refer to them as salts. The PTO questioned whether the sulfinates should be called “salts,” and this issue was fully discussed in the written record (Tr. 188-89, 1108-10). The Davis 1959 application continued to disclose the use of PTSMH and diethylbenzene sulfinate of Michler’s Hydrol in colorless coatings on transfer sheets (Tr. 1057-58). After Davis reacquired the rights to his inventions from Lilly, he took over the prosecution of the 1959 application himself. Low on funds and being “a brash young man in those days, I got out my own how to patent your own invention brochures, and Mr. Wood’s past responses, and I figured since I was a good writer, I could write my own responses.” (Tr. 198.) Davis could not overcome the formal arguments of the Examiner, however, so in 1962 he re-filed VanArendonk’s 1959 application as a CIP application. The 1962 application corrected the structure drawings and added some “really precise terms” which Davis hoped would satisfy the Examiner (Tr. 198-99, 206-07; TX 1098). After filing the 1962 . application (TX 1098), Davis did a considerable amount of additional experimental work with coatings on papers, and then filed a separate application in 1964 to cover the colorless recording paper itself (Tr. 208-09; TX 1099). Davis prosecuted the 1962 and the 1964 applications by himself to a successful conclusion. The 1962 dye salt application (TX , 1098) was granted as the original Davis 404 patent on July 6, 1965 (TX 1042), and the 1964 transfer sheet application (TX 1099) was granted as the original Davis 327 patent on October 11, 1966 (TX 1043). D. Warren And Scott’s Acquisition Of The Inventions In 1965, Davis contacted S.D. Warren Company of Westbrook, Maine (“Warren”), to determine its interest in his inventions (Tr. 211-12). Davis and Warren entered into, an agreement in August of 1965, whereby Warren agreed to pay $15,000 for the right to study the inventions for ten months, and an option to acquire them (Tr. 212- 15; TX 307, 382). The agreement contemplated that Davis would assist Warren in a feasibility study, and that Warren would pay Davis’ expenses to travel to Italy to work with the Binda company, a Warren licensee (Tr. 213- 14, 1936). Warren employees, Fred Brinnick (now deceased) and Millard Spencer, were assigned part-time to the feasibility study of the Davis dye salts (Tr. 1941). These studies confirmed that the Davis inventions worked (TX 1030). The only problem was in coating the dye salts on paper because the coatings under investigation were emulsions which did not “glue” the dye salt to the paper in a commercially satisfactory manner as there was premature migration causing smudging or blueing (Tr. 1966-67, 1977-82; TX 1619 at 25, 29-30; TX 1052). Warren recognized that the migration problem could be overcome by using encapsulation, rather than the emulsification system under study, but Warren was afraid to investigate encapsulation systems because of the strong patent position then held by NCR (Tr. 1974-76; TX 1620 at 15-23, 27-28; TX 1618 at 75-76; TX 1619 at 10, 21, 45-46; TX 333, 334). Warren never commercially developed the Davis inventions, mainly because its fear of NCR imposed constraints against using encapsulation. This fear, financial problems, other compelling projects, and the lack of thin paper capabilities, led Warren to suspend work with the Davis dye salts (Tr. 970-71, 1934, 1949-50, 1977-79; TX 1620 at 35-37; TX 1618 at 65-66; TX 1619 at 22-23, 101, 108). Warren, nevertheless, concluding that the Davis inventions were “an asset” which held commercial promise, paid an additional $20,000 at the end of the option period in order to acquire all rights to the Davis inventions (Tr. 916, 1980-84; TX 1620 at 35). When Scott' acquired Warren in 1967, Scott also acquired full title to the Davis patents in suit. (D.I. 113 at 5.) E. Moore’s Quest To Develop A Commercially Acceptable Carbonless Copy System On and off from 1938 Moore had an interest in developing a carbonless copy-system (TX 5, 8, 10, 12). It was not, however, until 1954 that Moore hired Dr. Norman Macaulay to concentrate on developing a carbonless copy system to compete with NCR’s patented CVL/BLMB system (Tr. 723-26). By coincidence, Dr. Macaulay’s start in this endeavor coincided with Davis’ investigation into the same field. Dr. Macaulay, a Ph.D. chemist who had specialized in dyestuffs, spent about six months in 1954-55 investigating the scientific, technical and patent literature to determine the scope and content of the art which was available at that time. Macaulay completed his 167-page literature study in the second half of 1955 (TX 10), and it described ' numerous approaches to the problem of selecting suitable dye precursors for carbonless copy systems (Tr. 645-47, 726-76). Macaulay’s literature survey identified many of the NCR and other patents relied upon by Moore as. prior art in this litigation (Tr. 152-53). These patents suggested using Michler’s Hydrol itself, the methyl ether of Michler’s Hydrol, and “thousands” of other chemicals, as colorless dye precursor candidates. Neither NCR nor anyone else has ever used Michler’s Hydrol or the methyl ether of Michler’s Hydrol in a commercially acceptable carbonless copy system (Tr. 727-28, 752-54, 757-59, 761, 768, 774-76, 1197, 2100-01). Macaulay’s survey included reference to publications such as Beilstein, Berichte, and Chemical Abstracts, but neither Macaulay nor the other Moore scientists who relied on the survey were led to the Hinsberg publications abstracted or reproduced therein (Tr. 736-40, 742, 746-47, 754). After completing his literature study in 1955, Macaulay was “thoroughly conversant with the problems and the literature,” so he began actual laboratory work to develop a carbonless copy system (Tr. 730-31, 770, 788-89; TX 8). He consulted with knowledgeable representatives of experienced dye manufacturing companies of the day, including National Aniline, Dye Specialties, DuPont, ICI, Lampson-Paragon, GAF, and the like. These companies shared their knowledge and expertise with Moore, and provided a wide variety of precursor candidates for evaluation by Macaulay and his colleagues, but with no success (Tr. 728-29, 768-808, 820, 823, 831-32, 835-37, 1384-90; TX 1639 at 60-62, 74, 78). Macaulay’s colleagues at Moore included Dr. George Baxter who joined Moore in 1957, Dr. Henn Ruus who joined Moore in 1958, and George Maalouf who joined Moore in 1963, plus a number of laboratory technicians who helped with their investigations and evaluations (TX 341 at 46; TX 340 at 69; TX 342 at 5). Moore also retained several outside consultants to assist these scientists in their research efforts (Tr. 1381-84). One such consultant was Dr. Herbert A. Lubs, a renowned dye chemist who had retired from the DuPont Company in Wilmington, Delaware, shortly before Moore hired him as a consultant in 1965 (TX 51, 56 at 3.) For the next five years, Dr. Lubs met with the Moore scientists, principally Dr. Baxter, Dr. Ruus and Mr. Maalouf, at one month intervals. Dr. Lubs gave Moore many ideas to further the precursor investigations, and routinely provided copies of technical and scientific articles and patents (Tr. 814-20; TX 342 at 67-76). On several occasions over the years 1955-1969, Moore’s research efforts to develop a carbonless copy system reached the pilot plant stage. Each time, however, the' system under development proved to be deficient and to have problems which could not be surmounted with the result that one approach after another was abandoned (Tr. 803-06, 1593-1601). By 1969, fifteen years after Dr. Macaulay began his investigations, and thirty years after Moore first began its research, Moore’s efforts still had not developed a marketable carbonless copy paper. Over this long period, Moore had evaluated numerous combinations of clay and other coatings for the CF sheet, solvents, and in particular a wide variety of precursor candidates. Moore was never able to find a satisfactory combination, however, and it became apparent early in the program that the lack of a suitable colorless dye precursor was the serious “bottleneck” preventing success (Tr. 806, 838; TX 38): “our major problem is still fading of the color image”; (TX 39), “solving the color precursor bottleneck”; (TX 44), “Poor stability of the colored image ... has been the principal drawbacks”; (TX 90), “The lack of suitable color precursors is the bottleneck in getting our system into production”; (TX 59), “efforts to develop a functional product have been seriously hampered by ... our inability to acquire a color-precursor ... satisfying the many requirements demanded by the product”; {see also TX 21, 24, 26, 28, 30, 34, 37, 41, 42, 67). The wide variety of precursor candidates investigated by Moore prior to 1969 included triphenylmethane dyes, derivatives of Indigo, indicators, phthalocyanines, coordination compounds, anthraquinones, metal complexes, azo dyes, and the like (TX 45, 49, 52, 60, 65). Moore also evaluated Michler’s Hydrol, the methyl ether of Michler’s Hydrol, and many other derivatives of Michler’s Hydrol (TX 116, 87, 107). The properties of these derivatives differed unpredictably, and they could not be successfully employed {id.). At one point in the mid-1960’s, results were so discouraging that Moore abandoned investigation of derivatives of Michler’s Hydrol altogether and as far as Moore could tell, they all had problems (Tr. 811-13, 817, 825-31). At no time during the thirty year period between 1938 and 1969 did Moore’s experts and researchers ever suggest using any sulfinate derivative of Michler's Hydrol as a key to solving the precursor “bottleneck” problem (Tr. 820, 859-62). In 1969, B.J. Staneslow, Moore’s manager of chemical research, gave a copy of the Davis 404 patent to Dr. Henn Ruus, who was then doing research on dye precursor candidates for Moore (TX 340 at 19-21, 28-31, 35-39). In October of 1969, following the teachings of the Davis 404 patent, Dr. Ruus made PTSMH, tested it, and soon found that it was the most “promising” precursor investigated in all the years preceding (TX 340 at 51). Further evaluations soon established that PTSMH was the precursor of choice for Moore (TX 340 at 19-20, 30-31, 51; Tr. 689, 702-03, 712, 839-46; TX 95, 96). Moore’s contemporaneous documents recorded that PTSMH was the best precursor available to Moore: (TX 108) PTSMH “is superior to the others”; (TX 111) “There can be no substitute precursor at this time that can be used”; (TX 129) “the best overall precursor”; (TX 87) “The sulfinates are the precursors most suitable for microencapsulation.” Dr. Ruus informed Dr. Macaulay or Dr. Baxter, Mr. Maalouf and Dr. Lubs in late 1969 that he had learned about PTSMH from the Davis 404 patent (TX 96, 340 at 42, 51). It is interesting to note, however, that on their depositions in early 1983 (before Scott had located Dr. Ruus and deposed him), Macaulay, Baxter and Maalouf all professed ignorance as to whether Dr. Ruus had learned of PTSMH from a Davis patent, or whether he had discovered it independently (Tr. 691-92, 700, 704; TX 341 at 162-76; TX 342 at 89-95). F. Moore Acquires Lácense For The Davis Patents After Moore learned of PTSMH from the Davis 404 patent in late 1969, Moore decided that a license under the patent was necessary in order to use PTSMH commercially (Tr. 840-47, 861-63, 874-81, 1361-62, 1428; TX 341 at 194,196-210; TX 111). At Moore’s request, Dr. Lubs in early 1970 met with Davis at the Cincinnati Airport, but the meeting resolved nothing. Davis had a severe hearing problem, and Dr. Lubs was “an elderly man who had a bladder problem, and he had to keep running back and forth.” It turned out each was talking about ' different things. Davis thought Dr. Lubs was interested in rights to a completely different Davis invention (Tr. 217-19, 834-47; TX 101). Dr. Lubs died shortly thereafter. Moore then sent Davis a copy of a proposed license. Only then did Davis realize that Moore was interested in the colorless dye salt 404 patent (Tr. 219-20, 874-75, 882-83). Davis immediately advised Moore that there had been a “hell of a mix-up” and that the dye salt patents had been assigned to Warren (Tr. 218-26). Moore then contacted Warren in late 1970, and began negotiations for a license under the Davis 404 patent. Eventually, Scott (which by then had acquired Warren) granted Moore a license under the Davis 404 and 327 patents (TX 308). It. took, however, almost two years of hard bargaining to finalize the royalty and other terms of the license agreement. After Moore asked for a license (TX 178), Scott and Moore exchanged numerous proposals, counter-proposals, and revisions for a license under the Davis patents (Tr. 921-39; TX 178, 179, 182, 184, 185, 187, 197, 198). Moore consulted general lawyers as well as patent lawyers regarding the strength of the Davis patents, Moore’s infringement of them, and the wording of the agreement (Tr. 1404, 1437-39, 877-78, 880-81, 926-27; TX 170, 182, 190). There were also extensive negotiations with respect to an appropriate royalty rate and base. Moore proposed several different approaches; including basing the royalty on the amount of dye salt used to coat the paper, rather than the price of the recording paper itself, and redefining “net sales value” to reduce the royalties. Scott, on the other hand, insisted on basing the royalty on the net sales value of the recording paper to third parties (Tr. 1395-97, 1430-44, 884-89, 893-98, 1567-68, 926-38). Robert Downie, Moore’s Vice President and Director of Research, ascertained from Moore’s accountants how much the royalties would be, projected on a yearly basis (Tr. 1434-35; TX 70, 180, 186, 202). Moore knew what the license would cost when Downie signed the agreement (Tr. 1399). Ultimately, Moore agreed to pay royalties at the rate and on the basis originally suggested by Scott (TX 179), viz: 2% of the first $200,000 of the net sales value of all Recording Paper sold by Moore and 1% of the amount of the net sales value of Recording Paper in excess of $200,000 per year. Recording Paper was defined as paper which falls within the scope of the claims of the 327 patent (TX 308). Claim 11 of that patent, and of the 327/803 reissue patent, is representative. (D.I. 113 at 6, 8.) Downie was the Moore executive who made both the decision to enter into the Scott-Moore license, and the decision a few years later to terminate it (Tr. 1360-62). He signed.the final version of the agreement on June 12, 1972, but, “before the ink was dry” (Tr. 1397), and before the final agreement was signed by Scott on January 25, 1973, Downie began seeking royalty reductions. Scott’ rejected most of those efforts (Tr. 939-41, 903-05, 1397; TX 201, 202, 203, 207, 208, 209). Moore proffered many excuses to obtain royalty reductions, including the need to facilitate Moore’s internal accounting procedures, changes in the base papers Moore was using, and the Hinsberg publications (Tr. 245, 947; TX 210, 223). On several occasions Moore threatened to change from PTSMH to an alternate precursor not covered by the licensed Davis patents, so as to avoid royalties altogether (Tr. 952, 1394, 1415). Never, however, did Moore take the position that the patented inventions did not work, and Downie told Davis at a meeting in Boston in 1975 that “the'patents worked perfectly” (Tr. 242, 1394, 1415, 1450-56, 947-50, 952, 954-55, 904-05; TX 197, 210, 222, 223, 1081, 1083). Consistent with Downie’s remark, Moore promoted its Moore Clean Print (MCP) carbonless business forms made under the Davis patents as “the greatest advance in carbonless paper in decades” (TX 1670; Tr. 2064; TX 421, 1671). Moore extolled the virtues of its MCP business forms, “best of all, it allows you to keep hands, clothing and work surfaces clean” (TX 1091, col. 5, lines 13-14; TX 1094, 1670; Tr. 2064), and they produce “a clear, crisp image that actually intensifies with age.” (TX 1673; Tr. 64, 67, 2072; TX 1673.) Moore’s sales of MCP business forms increased substantially each year starting in 1972 as reflected in the royalty payments made to Scott. These royalty payments through mid-1976 amounted to $563,-215. (TX 219, 420.) G. Moore Terminated The License Agreement In 1976 Downie negotiated and signed the Scott-Moore license because he had been advised by Moore’s technical personnel that they had to use PTSMH, in MCP (Tr. 873, 1602-04,1362), and by Moore’s counsel that MCP paper containing PTSMH infringed the Davis claims (Tr. 1404-07, 862, 878-81; TX' 170). Downie obligated Moore to pay royalties on the sales of MCP business forms because “we wanted to start swimming” (Tr. 1328), but he did not expect to pay significant royalties as sales increased because he “didn’t expect to continue using PTSMH” (Tr. 1400,1392). Downie thought that PTSMH could be quickly replaced with a non-infringing black imaging precursor (Tr. 1328, 1399-1400). Downie viewed Scott as nothing more than a “supplier” which enabled Moore to use PTSMH in MCP for a year or two and that the royalty was just a “component” in the cost of the finished product (Tr. 1403). Downie’s wish was to reduce costs (Tr. 1402, 900-01). When the hoped-for black precursor sought by Moore could not be developed as planned, and the royalties to Scott increased, the “pragmatic” Downie (Tr. 1326) first tried several ways to reduce the royalty “costs.” After Scott refused, to grant concessions of the size demanded by Downie (Tr. 1326, 1452-55; TX 213), Downie made what he repeatedly characterized as a “commercial” or “business” decision (Tr. 1452). He simply refused to incur further “costs,” i.e., to pay any further royalties (Tr. 1461; TX 232). Although Downie terminated the license agreement, Moore continued to sell MCP business forms using the Davis inventions (Tr. 1462-63). At the time Moore terminated the license agreement and refused to pay royalties after June 30, 1976, it asserted the Hinsberg publications as the excuse for its actions (Tr. 1402; TX 1079). On the other hand, Scott considered the Hinsberg assertion as “Downie’s ploy to get' a royalty reduction” (TX 1079; Tr. 948)., In later discussions with Scott, Downie confirmed that a royalty reduction was what he really sought (TX. 1080, 1083; Tr. 948, 1402, 1461). Downie testified that Moore’s patent counsel had advised him that the Davis patents were invalid in view of Hinsberg (Tr. 1409-10). Although Scott has alleged wilful infringement since 1977 in its pleadings, Moore has never offered any such legal opinion in evidence, claiming privilege and blocking discovery. The record does not support the existence or content of such opinions, or reveal what information may have been supplied by Moore on which they were based. Downie had read the 1897 and 1917 Hins.berg articles before he terminated the license with Scott (Tr. 1407). He knew that although the Davis patents claimed colorless copy systems, paper coated with chemicals, methods of printing, and manifold sheets, none of these were taught in the Hinsberg publications (Tr. 1407-08; TX 1639 at 114, 118-119; see also Tr. 1607-08). Downie also knew that merely because a chemical changed color did not mean it could be used as a precursor, because precursors in carbonless systems had to possess many demanding properties (Tr. 1372-78; TX 1639 at 65-73). There is nothing in the record to suggest that Moore’s counsel in 1975-76 were ever informed of the many property demands on a color precursor, or of other key facts relevant to validity, such as Moore’s long search for suitable precursors and its utter failure until it learned of the Davis patents. At the time Downie ceased paying royalties in 1976, he “made a business decision” and “never changed it” (Tr. 1412). He later learned that Scott had gone back to the PTO and that the PTO considered Hinsberg (Tr. 1410). Downie also knew that the PTO found claims in the Davis patents covering MCP to be patentable over Hinsberg and Beilstein (Tr. 1411; TX 1639 at 127-131). The PTO rulings adverse to Moore did not in any way change Downie’s decision to terminate the license (Tr. 1410-13). It did not change his mind at all, because “I thought I was right the first time; after I examined it, I still considered I was correct”; “I re-examined my business judgment and felt the same, that it was unchanged”; “I gave my best business judgment, and I reaffirmed my business judgment” (Tr. 1410-13, 1422-25). The PTO’s rejection of Moore’s invalidity arguments in the reissue proceedings was simply dismissed by Downie, “The Patent Office had, in my opinion, been wrong the first time. There is no reason they shouldn’t be wrong the second time.” (TX 1639 at 129.) The Court is convinced that Downie’s decision to terminate the license was based on the fact that the royalties increased too much and that Moore was not capable of. developing the alternate precursor as Downie had contemplated (Tr. 1572-74). The citation of Hinsberg in terminating the license was nothing more than a colorable excuse for a “business” expediency in an attempt to disregard Scott’s patent rights. Downie “made an estimate of the cost of litigation,” then “looked at the thing from a commercial point of view and decided to stop paying the royalty” and that was “the commercial decision that I took in stopping payment on the patent.” (Tr. 1355; TX 1639 at 110, 131.) At the time Downie stopped paying royalties, he was “unconcerned as to what. Warren’s next move or step or reaction would be” (Tr. 1422-25). Downie believed that the imminent development by Moore of a black precursor would minimize the extent of any problem with Warren (Tr. 1424). This, however, was no excuse for terminating the license and continuing infringement (Tr. 1589-90). Moore scientists worked assiduously on alternative precursors, but they were unable to perfect a commercially acceptable system to use in place of PTSMH until the Davis patents expired. Moore accordingly was forced to continue using PTSMH in its MCP business forms in wilful disregard of the Davis patents, and to do so for the remaining life of the patents (Tr. 1532, 1351; TX 343 at 3-5, 10-11, 23-26, 31-32, 38, 42-44, 61-64; D.I. 113 at 7). Moore carried out its threat (TX 232) and refused to make the royalty payment for the third calendar quarter of 1976, which fell due at the end of October. This was clear confirmation of Moore’s election to terminate the Scott-Moore license agreement under the applicable termination provisions, based on the asserted default by Scott. H. Suit Brought And The PTO Reissue Findings Scott brought this suit against’Moore a few months later in May of 1977. (D.I. 1.) Shortly after this action was filed, Scott learned for the first time of Davis’ 1955 and 1957 patent applications. Scott promptly filed applications ■ to reissue the Davis 327 and 404 patents then in suit, in order to claim the benefit of the filing dates of the 1957 recording paper application and both of the 1955 applications. (TX 300 at 5, 73, 75; TX 301 at 5, 75, 77.) As before mentioned, the reissue proceedings at the PTO required more than four years, and the two reissue patents in suit were granted to Scott in November of 1981 (Tr. 264, 993; TX 300, 301, 1090, 1091). Under the so-called “Dann amendments” in effect in the reissue proceedings at the time, Moore actively participated as a protester throughout the reissue proceedings. Moore presented evidence, and factual and legal arguments, to the effect that reissue patents should be refused on the basis of: (1) Davis’ 1955 efforts to sell the rights to develop his inventions; (2) the Beilstein/Hinsberg prior art; (3) the statement concerning the solubility of BSMH; and (4) Davis’ fraud and inequitable conduct (Tr. 984-1002; TX 300 at 412-62; TX 301 at 292-344). The PTO reissue file of each application exceeds 1,000 pages, in large measure because of the volume of evidence presented by Scott/Davis for consideration, and the PTO’s careful evaluation of it, and of Moore’s submissions and arguments. The voluminous files were explained and summarized at trial by John F. Witherspoon, Scott’s expert and a former member of the Board of Appeals (Tr. 978). When he characterized the reissue prosecution as “very thorough and extensive,” this Court agreed, “You don’t have to say any more. Of all the reissue applications I have seen, I have never seen one so complete.” (Tr. 1107-08.) The primary reissue Examiner, James R. Hoffman, thoroughly considered and rejected Moore’s protest that the Davis patents should be barred because of Davis’ early efforts to interest others in developing his invention and to sell rights in his inventions for that purpose. The background facts in connection with Davis’ early activities were presented to the PTO by means of a first Declaration, with extensive exhibits (Tr. 1015-16; TX 301 at 79-287). Moore responded with a “Protest to Reissue” which set forth the grounds upon which Moore initially protested the grant of any reissue patent (Tr. 1019-23; TX 301 at 293-316). Moore, citing elaborate facts and legal authority, included a section specifically asserting that the Davis patents were invalid as being “on sale” in 1955. (TX 301 at 306-309.) Davis filed two more Declarations, which attached additional exhibits concerning his activities in 1955-59 (TX 301 at 483-523, 742-850). Moore filed responses, which contained extensive arguments on alleged public use, sale, and/or offer to sell by Davis in 1955-59 which Moore contended barred any reissue (TX 301 at 544-46, 860-69). At trial, Davis confirmed the truthfulness of all his reissue Declarations (Tr. 258-61), and Moore had a full opportunity to cross-examine Davis concerning them. Examiner Hoffman carefully considered the issue “whether Davis undertook any activity during the critical period which could be construed as placing the invention on sale or in public use” (TX 301 at 940). After reviewing all the evidence, the Examiner noted that he had “read all of the cases cited by the protestor as well as the cases cited by the Commissioner____ Additionally, he has made his own search of the case law.” (TX 301 at 941.) In every case cited in which á “public use” or “on sale” bar was found, “without exception, the inventor has sold, attempted to sell, or publicly used the invention defined in the claims of his patent.” (Id.) “No case has been found where any court has found that the invention was in public use or on sale solely as a result of the inventor’s sale or attempted sale of the rights to his invention or as a result of his demonstrating the invention to prospective purchasers of such rights” (id. at 942; Tr. 1091-92, 1094-95, 1097-1100, 1150-52, 1159-60; TX 300 at 1035-36). Examiner Hoffman thus concluded that there is “not even a hint” of evidence indicating that patents should be barred by Davis’ early activities: The activities of Davis shown on the record of this application are not the kind of activities which could give rise to a “public use” or “on sale” bar under 35 USC 102(b). There is not even a hint of a prima facie case that1 Davis either publicly used or placed on sale the invention claimed in this application prior to one year before the effective filing date of any claim. (TX 301 at 945; see also TX 300 at 1039.) When Scott filed the reissue application, it also provided the PTO with copies of the 1897 and 1917 Hinsberg publications, together with English translations (TX 301 at 34-62). In its “Protest to Reissue,” Moore argued that Hinsberg precluded the reissuance of any patent claims (TX 301 at 295-303). Examiner Hoffman proceeded to analyze the Hinsberg publications in detail, and concluded that Hinsberg was “not material to the patentability” of the 327 patent claims in issue: The Hinsberg references are somewhat relevant to the invention claimed in this application since Hinsberg disclosed compounds which might be used in the claimed invention. However, since each claim in this application is directed to a coated substrate and Hinsberg does not suggest applying the disclosed compounds to a substrate nor does he suggest any utility for them whatsoever, Hinsberg does not provide basis for rejection of any claim under either 35 USC 102 or 35 USC 103. Thus Hinsberg is not material to the patentability of the instant claims. (TX 301 at 401.) Examiner Hoffman also concluded with respect to the 404 patent claims 1-5 and 10 that “there is nothing in the Hinsberg disclosure which could possibly suggest to one of ordinary skill in the art that the materials he discusses could be used in a printing process” (TX 300 at 524). The Examiner accordingly allowed claims from both of the original Davis patents, including representative claims such as claim 11 of the 327 patent, and claim 10 of the 404 patent. Moore contended at trial that the last part of the single sentence which appears in the 404/797 reissue patent (TX 1090), col. 3, lines 15-19), but which does not appear in the 327/803 reissue patent (TX 1091), was in error. That sentence acknowledged: “The only known member” of the Davis dye salts, BSMH, and stated that it “is completely insoluble at room temperature in the usual solvents used in recording systems.” Moore’s arguments concerning the solubility of BSMH were made to the PTO during the reissue proceedings. Moore contended that BSMH was soluble in solvents such as benzene, and made certain (with capital letters and underlining) that the reissue Examiner could not miss Moore’s point, “Davis is DEAD WRONG” (TX 300 at 635). Moore also presented demonstrative exhibits to the PTO which consisted of CF and CB sheets, contained in eight separate envelopes, allegedly to prove that BSMH is soluble “in benzene or any solvent useful for the production of carbonless copying systems” and that it also has color forming properties (TX 300 at 636-39, 647-54, 785-90, 948-51). These eight envelopes and their original contents were admitted at trial (TX 1657-1664). The reissue Examiner nevertheless held in the next Office Action that “Moore has been unable to produce even the slightest bit of documentary evidence that any person of ordinary or even extraordinary skill would have ever thought of utilizing” the sulfinates of Michler’s Hydrol “in a printing process prior to applicant” (TX 300 at 657). These same arguments regarding solubility were emphasized by Moore repeatedly throughout the trial of this case, principally through the testimony of Dr. William J. Bailey and the video testimony of Nancy Mitchell. Their testimony, however, which tends to show that BSMH can be dissolved in benzene and other solvents and produce a blue color on clay, adds nothing to the evidence presented to, considered by, and rejected by, the PTO in the reissue proceedings. In addition, throughout the reissue proceedings Moore contended that Davis was guilty of fraud and inequitable conduct in connection with the prosecution of the applications leading to the original Davis 327 and 404 patents (TX 300 at 414-22, 749-70, 785-87, 947-66, 1014-20, 1047-66). Specifically, Moore claimed (1) that Davis had withheld documents and information regarding his “on sale” activities which he should have known were material to the examination of the patent applications, (2) that he failed to specifically disclose the Beilstein publication, which he admittedly knew about, and the Hinsberg publications which Moore asserted he must have known about, and (3) that he had falsely described the solubility of BSMH. Davis has consistently maintained in his reissue Declarations, on his deposition, and at trial that he never read the Hinsberg publications until Moore brought them up in connection with the Scott-Moore license, long after the original patents issued. This is completely understandable because the Beilstein reference to BSMH, erroneous as it was, provided all the information of interest to him (Tr. 85, 249-50, 262, 355, 614; TX 1665, Vol. 3 at 345; Vol. 4 at 546, 569; Vol. 5 at 9, 19). The issue of Davis’ allegedly inequitable conduct was also submitted to the Assistant Commissioner of Patents for resolution and in a thoroughly reasoned and comprehensive decision, the Assistant Commissioner concluded that the applications should not be stricken for fraud as Moore demanded: For the reasons given above, the record of these reissue applications is not clear and convincing that any fraud was practiced or attempted on the Office or that there was a violation of the duty of disclosure through either bad faith or gross negligence so as to warrant striking these applications under 37 CFR 1.56(d). (TX 301 at 986-98.) III. VALIDITY AND ENFORCEABILITY A. The Issue of Obviousness Moore contends here, as it did in the reissue proceedings before the PTO, that the evidence clearly establishes that the Davis patents and reissue patents are invalid because they would have been obvious to a person having ordinary skill in the carbonless copying art in 1955 to use prior art sulfinates of Michler’s Hydrol for color formers used or described for use in the NCR carbonless systems. The Court disagrees. Obviousness under 35 U.S.C. § 103 is a conclusion of law based upon fact determinations. As set forth in Graham v. John Deere Co., 383 U.S. 1, 17, 86 S.Ct. 684, 693, 15 L.Ed.2d 545 (1966), and in Stevenson v. Internatio