ducing new proprietaries to growers. From these "tales of woe," one can learn not to expect to intercept a share of the pesticide market without matching man for man, dollar for dollar, idea for idea, the competitors who became successful by dint of hard work on the part of experienced personnel. And Mr. Riedeburg underscored "experienced." The successful marketer of proprietary compounds has knowledgeable managerial talent working within the framework of an autonomous company or division. Mr. Riedeburg emphasizes this point greatly—independence of the individual company or the division within a company. The precepts that a pesticides company must follow (and here Mr. Riedeburg seemed to be stating an obvious point which, in his experience, is anything but obvious) are that success depends on a team effort which prospers as a result of an excellent research and development program, shrewd sales strategy, superior communications up and down the line, and all necessary financial resources. The rewards can be great. He cited one compound with a markup of 400% over the cost of production. The range of profitability on pesticides is great. Mr. Riedeburg cited as example these rates (gross profit of sales): DDT, 3 1 % ; BHC, 2 1 % ; parathion, 32%; malathion, 6 5 % ; aldrin, 5 7 % ; endrin, 69 %; and Sevin, 4 3 % . With that kind of profitability, many companies have shown an interest in pesticides. But those companies that have not succeeded in their pesticides operations have failed because their management lacked understanding of the nature of the pesticides business. There were "unqualified square pegs" placed in positions of authority, fumbling R&D programs, poor communication, lack of patience by top management (it takes at least five years to get a pesticide candidate on the market), underfinancing, poor marketing research, and bad planning. Those companies that succeeded used experienced management and team effort, provided good R&D leadership, and had ample funds, autonomy, good marketing research, and "some luck." From the standpoint of continuing prosperity, the greatest problem now facing agrichemical producers is to provide profitability at the distributor level and at what is left of the dealer's activity.
"Usefulness" Ruling May Impede Research From legal department to research laboratory to executive wing, chemical industry sources were virtually of one mind last week. Their thinking is that the Supreme Court's ruling on "usefulness"—as the term applies to the patentability of a chemical process—can't help but impede progress in the useful arts. The High Court held that a novel process to make a known compound for which there is no known use, beyond possibly that of an object of scientific curiosity, cannot be patented (C&EN, March 28, page 37). The ruling was handed down in the case of Brenner vs. Manson (docket number 58). In 1960, organic chemist Dr. Andrew J. Manson applied for a patent on a new way to make certain known steroids. The Patent Office rejected the application on the grounds that Manson had failed to show any "utility" for the compound produced. (Dr. Manson had offered as evidence of product usefulness reports by other chemists on the tumor-inhibiting properties in mice of an adjacent homolog of his steroid. But the Patent Office said that just because one compound inhibits the growth of tumors, there's no reason to presume that a closely related compound will do the same.) The U.S. Court of Customs and Patent Appeals (CCPA) reversed the Patent Office decision, holding that it is not necessary to show that a product is useful. A novel chemical process is patentable so long as it produces the intended product, CCPA ruled. Not so, says the Supreme Court in upholding the Patent Office. "[A] patent is not a hunting license," it says. "It is not a reward for the search, but compensation for its suc-
United States Code, Title 35, Patents, Section 101 Inventions patentable "Whoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefor, subject to the conditions and requirements of this title."
cessful conclusion," the court says. The Court concedes that its ruling may discourage disclosure of scientific information and force inventors or the companies they work for to keep new processes under wraps until they can find uses for the resulting products. This is the main thrust of chemical industry arguments against the Court's ruling. But the Court then goes on to discount the value of patent disclosure in spurring others to take up the search for product uses. For one thing, it claims that patents are drafted purposely in such a way as to "disclose as little useful information as possiblewhile broadening the scope of the claim as widely as possible." The Court also claims that there is little incentive for others to look for uses for products whose method of production is patented by someone else. Whatever weight is attached to the value of encouraging disclosure, the Court felt that "a more compelling consideration is that a process patent in the chemical field, which has not been developed and pointed to the degree of specific utility, creates a monopoly of knowledge which should be granted only if clearly commanded by the statute," the majority decision reads. "Until the process claim has been reduced to production of a product shown to be useful, the metes and bounds of that monopoly are not capable of precise delineation . . . . Such a patent may confer power to block off whole areas of scientific development without compensating benefit to the public," the Court says. Dissent. In a dissenting opinion shared by Justice Douglas and many of the chemical industry's top patent authorities, Justice Harlan levels a point-by-point attack on the logic of the majority ruling. Among other things, Justice Harlan points out that other process claims are not disallowed simply because products .they produce may be of vast importance. Nor, in his opinion, does advance knowledge of a specific product use provide much safeguard on this score or "fix metes and bounds," since hundreds of uses may be found after a patent is granted which greatly enhance its value. Justice Harlan voices concern about the impact the decision may have on chemical research. "Chemistry is a highly interrelated field and a tangible benefit for society may be the outcome of a number of different discoveries, APRIL
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one discovery building upon the next. To encourage one chemist or research facility to invent and disseminate new processes and products may be vital to progress, although the product or process be without 'utility' as the Court defines the term, because that discovery permits someone else to take a further but perhaps less difficult step leading to a commercially useful item." Patent authorities in the chemical field say that the Supreme Court's ruling removes the classic distinction between the statuatory classes of patentable items. They say the ruling effectively ties process usefulness to product usefulness for the first time. Justice Harlan perhaps best sums up the views of chemical industry dissenters as well in this way: "If the usefulness (of a process) was typically regarded as inherent during a long and prolific period of chemical research and development in this country, surely this is added reason why the Court's result should not be adopted until Congress expressly mandates it . . ."
Nation's Natural Gas Reserves Increase The nation's proved reserves of natural gas increased by 21.3 trillion cubic feet in 1965, bringing total reserves to a record 286.5 trillion cubic feet, according to the American Gas Association. Production of natural gas in 1965 was 16.3 trillion cubic feet. Gross additions of natural gas reserves last year were the third highest since AGA began compiling reserve statistics in 1945. Only increases in 1955 and 1956 exceeded the present increase. According to AGA, Texas .has the largest reserves with 120.6 trillion cubic feet. Other states with considerable gas reserves are Louisiana, Oklahoma, Kansas, New Mexico, California, Wyoming, West Virginia, and Arkansas. Earlier this year (C&EN, March 21, page 24), Stanley Learned, president of Phillips Petroleum, said that current restrictive regulation of natural gas producers by the Federal Power Commission has dampened producers' incentive to search out new reserves. As a result, he feels that the nation will not be able to meet its gas demands in less than 10 years. Mr. Learned believes that 30 trillion cubic 28
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feet of additional reserves must be found each year. As to the status of the nation's proved reserves of liquid hydrocarbons, the American Petroleum Institute says that the total, as of Dec. 31, 1965, is 39.4 billion barrels, also the highest on record. Total liquid hydrocarbon production in 1965 was 3.2 billion barrels, an increase of 61 million barrels over 1964 production. Crude oil production was 2.7 billion barrels and natural gas liquid production was 555 million barrels.
BRIEFS Carter Products, Inc., has changed its name to Carter-Wallace, Inc. Wallace Laboratories, a manufacturer of prescription drugs, has been a division of Carter for several years. Carter-Wallace also has a Food Products division.
The three sales corporations, GivaudanDelawanna, Inc., Givaudan Flavors, Inc., and Sindar Corp., will operate as divisions of Givaudan Corp. The divisions will be called Aromatic Chemical Division, Flavor Division, Fragrance Division, and Sindar Division.
Chevron Chemical and Showa Denko likely will team up to produce mxylylene diamine. Under an agreement now being negotiated, Chevron would supply m-xylylene and the Japanese firm would produce the diamine. Chevron's plans are to test market the chemical in the U.S. Though a number of firms have tried to introduce the chemical as a raw material for fibers, Chevron is looking toward other applications, such as the making of epoxy resin cross-linking agents. Its physical properties, intermediate between those of pure aliphatic and pure aromatic diamines, make m-xylylene diamine applicable to markets that could total several million pounds by 1970.
Dow Chemical is closing its high-density polyethylene plant in Bay City, Mich. The company says it can't get enough low-cost petroleum feedstocks to make the plant pay. The sevenyear-old unit has been making about 25 million pounds per year of resin, mostly for Dow's own use at Midland. Because of oil import restrictions Dow has had to run its Bay City operation
largely on 10 cent-per-gallon Canadian feedstock. The company had sought to bring quota-free 4 V 2 cent-per-gallon Caribbean feedstock into a foreign trade zone proposed for Bay City. But in December (C&EN, Dec. 20, 1965, page 18) the request was effectively denied when the Government placed imports into foreign trade zones under the oil import quota system.
NEW FACILITIES Westinghouse Electric plans to build a prototype atomic power plant that will make more fuel than it uses. The company will seek the assistance of electric utility companies and will commit $10 million and its facilities to build a sodium-cooled, fast-breeder reactor using plutonium fuel. John W. Simpson, vice president of the Westinghouse Electric utility group, told the Joint Congressional Committee on Atomic Energy that a long-range problem is the possible shortage of uranium ores. The solution to this problem will center mainly in the development of breeder reactors. The company will start building the prototype by 1970.
Monsanto's packaging division has "substantially increased" its facilities for the production of blow-molded, polyvinyl chloride bottles. Industry will use a total of 120 million PVC bottles in 1966, of which Monsanto will make 60 million. There will be a steady increase in the demand for PVC bottles (C&EN, Feb. 14, page 25); by 1970, about 1 billion PVC bottles will be made in the U.S.
Commonwealth Oil Refining Co. plans to expand its facilities on a recently purchased tract of land. The land, adjacent to the company's petrochemical complex (C&EN, Aug. 30, 1965, page 36) in Penuelas, P.R., brings the company's holdings there to 718 acres.
Ketchigan Pulp Co., an Alaskan company jointly owned by Georgia-Pacific Corp. and FMC Corp., is planning a $3 million addition to its wood pulp production plant. Completion should be in early fall.
Du Pont has awarded Chemical Construction Corp. of New York a con-
tract to design and erect its 1500 tona-day sulfuric acid plant near Burnside, La. (C&EN, Jan. 24, page 19). Chemico will also construct off-site facilities such as a pumping station and railroads.
Tennessee Corp., a subsidiary of Cities Service, will begin construction of a sulfuric acid plant at Augusta, Ga. The plant, which will be in operation by early 1967, will cost nearly $3 million. It will have a capacity of 125,000 tons per year of 100 % sulfuric acid.
Givaudan Corp. plans to build a new manufacturing plant at Clifton, N.J., for the production of its bacteriostat, G - l l (hexachlorophene). The new plant will cost approximately $2 million.
Monsanto plans to increase production of polyvinyl chloride paste resins by 25% at Springfield, Mass. The expanded facility will be ready for operation in April.
The nonferrous and minerals division of Arthur G. McKee & Co. has been granted the contract for engineering and construction of a major expansion
of American Smelting & Refining's
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copper mill in Mission, Ariz. The project, which will cost approximately $9 million, will produce an additional 20,000 tons of copper a year, 50% more than current production.
Ethyl Corp. has started the second phase of its polyvinyl chloride plant near Baton Rouge, La. Nichols Construction Co. will finish the $4.8 million project this year.
FMC Corp. plans to expand its chemical complex at Lawrence, Kan., for producing phosphoric acid. The multimillion dollar expansion is scheduled for completion next fall. Primary market for the acid will be the fertilizer industry in the Midwest.
Kerr-McGee Corp. (C&EN, Oct. 4, 1965, page 27) has awarded a contract to Wellman-Lord, Inc., for engineering its phosphate mining and beneficiation complex in Polk County, Fla. The complex will have a capacity of 1.5 million tons per year of dry, un ground phosphate rock. Completion of the complex is scheduled for late this year.
A. H. Robins, pharmaceutical manufacturer in Richmond, Va., plans to double the size of its research center. The
$2 million project will be built by The Austin Co. The building, which will be ready for use in July 1967, will provide facilities for research in chemistry, pharmacology, biochemistry, microbiology, and pharmacy.
MARKETS Atlas Chemical Industries, will increase the price of glycerine by V 4 cent a pound. Shell Chemical recently increased its price of synthetic glycerine (C&EN, March 14, page 17).
FINANCIAL Humble Oil and Refining Co. will be the fourth participant in the Center for Fundamental Oil Shale Research at the Denver Research Institute of the University of Denver. The center has acquired a total of $240,000 from Humble, Shell, Oil Shale Corp., and Aquitaine Oil Corp. to cover a three-year program of oil shale studies.
Glidden Co. had its sales and net income per common share rise more than 15% for the six months ending Feb. 28. This represents an increase in sales of more than $21 million, or a total of more than $158 million. During the same period in fiscal 1965, sales were more than $136 million.
EXPANSION IN THE CHEMICAL INDUSTRY
Here are companies making news last month, adding to the chemical process industries by . . . PLANNING . . . Company and Site American Can Co. Skelly Oil Co. Chemplex Co. Clinton, Iowa Archer Daniels Midland Co. Peoria, III. Chemetron Corp. National Cylinder Gas Division Richmond, Va. Waynesboro, Va. FMC Corp. Pocatello, Idaho
Plant or Unit Low-density polyethylene
Remarks Capacity: 100 million pounds a year. License from Du Pont
Caprylic, capric, lauric, myristic, palmitic, and stearic acids Nitrogen, oxygen, and argon
Completion in early 1967
Air separation
Electric-furnace phosphorus
Capacity: 216 tons of products a day. Part of nitrogen will go by pipeline to nearby Du Pont plant. On stream in midsummer On site unit at Du Pont plant will have capacity for 64 tons a day. To be in operation late this year Expanding capacity, now 200 million pounds a year
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