A federal jury in Chicago returned a verdict against American National Can Co. that gives plastics packaging firm Viskase Corp. one of the largest damage awards ever handed down in a patent infringement case. ANC Vice President of Communications Carol Constantine said her company will "[exhaust] every remedy to set aside or reduce'' the $102.3 million verdict. The court could triple the award because the jury found the infringement to be willful.
Viskase, a Chicago company that makes a multilayer, heat-shrinkable plastic film packaging for fresh meat, brought suit against ANC in U.S. District Court in December 1993. Viskase alleged that ANC, a multibillion-dollar subsidiary of Pechiney of Paris, willfully ignored six patents for improvements for heat-shrinkable plastic bags, then used the improvements in two of its product lines. Viskase holds patents on the bag materials.
Viskase manufactures the bags in a three-layer process, with the outer two layers coextruded from very low density polyethylene from Dow Chemical Co., and the middle layer a Saran material to serve as an oxygen barrier. The bags are used to hold 10-35 pounds of fresh meat, including turkeys and processed hams. Viskase received the patents on the improvements, which increased puncture and abrasion resistance, between 1989 and 1993.
In 1990, Viskase, a relatively small player in the market and a subsidiary of Envirodyne Industries Inc. in Oak Brook, Ill., brought suit against W.R. Grace & Co., one of the largest players in the heat-shrinkable plastic packaging market, for infringement on the same pa-tents. Grace settled out of court for about $8 million in 1992, according to Roy E. Hofer, a lawyer representing Viskase. A W.R. Grace spokesman declined comment on the ANC verdict.
ANC's lawyers claimed that Viskase's patents were invalid because they were based on some of ANC's earlier patents. However, U.S. District Judge Elaine E. Bucklo ruled before trial that ANC's first product lines infringed both sets of Viskase's patents.During the trial Bucklo determined ANC failed to prove Viskase's patents were invalid.
Bucklo could award treble damages, including punitive damages and other costs, bringing the total amount to $325 million, based on the ``willful violations'' of the patent infringements.
The jury determined Viskase's award amount based on lost profit, price erosion and a reasonable royalty of 30 percent for use of the patents.
Shares of Envirodyne stock rose 34 percent, to $5.375, in Nasdaq trading the day after the announced settlement.
Hofer said in a telephone interview that it was ANC's attitude that resulted in the large award. Despite knowing the results of Viskase's suit against Grace, ANC proceeded to infringe on Vis-kase's patents, he said.
``It was their `damn the torpedoes, full speed ahead and if they sue us we'll claim their patents are invalid' approach that proved to the jury that the infringement was willful,'' Hofer said.
``I think the jury essentially gave us what we asked for because ANC corporate officers were not truthful on the witness stand, and because the jury found they were a willful infringer,'' Hofer concluded.
``We stand behind the sworn testimony of our employees,'' Constantine said.
Hofer said he is filing a post-trial motion to enjoin ANC from further violation of Viskase's patents, and to obtain pre-judgment interest and treble damages.