## Facts

- Crucible, Inc. and Crucible Materials Corp. owned U.S. Patent Nos. 3,746,518 and 3,561,934, covering specified composition ranges for high-speed tool steels intended to improve performance characteristics.
- Stora entities manufactured and sold “ASP” high-speed steel products that Crucible alleged fell within the asserted patent claims.
- Litigation proceeded in federal district court, where the infringement and validity disputes were tried to the bench; antitrust and damages issues were severed.
- The district court held claim 30 of the ’518 patent and claim 4 of the ’934 patent valid, infringed, and enforceable, and entered an injunction against Stora and its “successors in interest and assigns.”
- Stora admitted infringement of the ’934 patent but maintained validity and enforceability challenges, including prior-art defenses and inequitable conduct allegations tied to PTO proceedings.
- During litigation, Stora and another company formed Kloster Speedsteel AB; Kloster acquired the facility used to produce the accused ASP products and continued production.
- Kloster intervened and sought to modify the injunction, arguing Rule 65(d) did not permit binding “successors and assigns” in the manner ordered; the district court denied modification.
- On appeal, Stora challenged validity, infringement, and enforceability; Kloster challenged the injunction’s reach; Crucible cross-appealed the denial of enhanced damages and attorney’s fees.

## Issues

1. Whether Stora proved by clear and convincing evidence that the asserted patent claims were invalid (including anticipation or obviousness).
2. Whether the patents were unenforceable for inequitable conduct based on alleged nondisclosure of prior art during PTO proceedings.
3. Whether Rule 65(d) permitted an injunction to bind a successor entity such as Kloster as a “successor in interest and assign,” or as a person in privity/active concert with the enjoined party.
4. Whether the district court properly denied findings and remedies based on willful infringement, including enhanced damages and attorney’s fees.

## Decision

- The Federal Circuit affirmed the judgment that the asserted claims were valid, infringed, and enforceable.
- The court affirmed application of the injunction to Kloster, concluding Kloster was a successor in interest continuing the enjoined operations and thus properly bound under Rule 65(d).
- The court remanded for reconsideration of willfulness and the associated requests for enhanced damages and attorney’s fees.

## Legal Principles

- Patent invalidity must be proven by clear and convincing evidence; where the PTO has considered relevant prior art, the challenger’s burden is particularly difficult.
- Inequitable conduct requires proof of materiality and intent; failure to cite a reference does not alone establish unenforceability without sufficient evidence on both elements.
- An injunction under Rule 65(d) may bind nonparties that are in privity with, or in active concert or participation with, an enjoined party and have notice of the order; corporate restructuring and asset transfers do not defeat effective injunctive relief where the successor continues the same infringing enterprise.
- Evidence that an accused infringer continued infringing activity with knowledge of the patent and without competent, independent legal advice may support a willfulness determination, bearing on enhanced damages under 35 U.S.C. § 284 and attorney’s fees under § 285.

## Conclusion

The Federal Circuit upheld the patents’ validity, infringement, and enforceability and sustained an injunction reaching a successor entity that acquired the infringing facility and continued production, while sending back for further analysis whether the infringement was willful and whether enhanced damages and attorney’s fees were warranted.


Kloster Speedsteel AB v. Crucible, Inc., 793 F.2d 1565 (Fed. Cir. 1986)