Nalco Company v. Chem-Mod, LLC
883 F.3d 1337
Fed. Cir.2018Background
- Nalco is exclusive licensee of U.S. Patent No. 6,808,692, claiming a method to oxidize elemental mercury in coal-fired flue gas by injecting a thermolabile bromine precursor and collecting resulting mercuric bromide on alkaline particles.
- Defendants (Chem-Mod and related entities) market the "Chem-Mod™ Solution," which mixes bromine precursors (MerSorb/S‑Sorb) with coal before combustion and supplies treated coal or services to power plants; Nalco alleges this practices claim 1 either literally or under equivalents.
- PTO reexamination affirmed the asserted claims as amended; Nalco filed suit after the reexamination certificate issued and amended complaints several times alleging direct, divided, induced, contributory, doctrine-of-equivalents, and willful infringement.
- The district court dismissed successive pleadings (ultimately the Fourth Amended Complaint) mainly on grounds that (1) Defendants do not “inject” the precursor into flue gas as claimed but mix it with coal pre‑combustion, and (2) Nalco failed to plead that any single defendant performed or controlled all claimed steps (divided infringement), and thus also dismissed indirect, equivalents, and willfulness claims.
- On appeal the Federal Circuit reversed in part: it held Nalco plausibly alleged direct infringement (two alternative theories), doctrine of equivalents, indirect (induced and contributory) infringement, and willful infringement, but left undisturbed the district court’s dismissal of Nalco’s divided-infringement theory based solely on Defendants’ commercial sales/Section 45 tax-credit theory.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Literal direct infringement ("injecting" into flue gas) | Injecting treated coal (MerSorb+coal) via coal injectors into an operating furnace places bromine precursor into coal combustion flue gas; alternatively, precursor flows under pressure from injection site into flue region. | The Chem‑Mod process applies additives before combustion (not an injection into flue gas); reexamination admissions limit "flue gas" to downstream of combustion zone; thermolabile precursor would decompose and not survive to flue. | Reversed: Complaint plausibly alleges both theories; claim construction and factual resolution inappropriate on Rule 12(b)(6). |
| Divided infringement (attribution of third‑party acts) | Defendants directed/controlled pilot and full‑scale testing (EERC and plant tests) so a single entity is attributable for all steps; test facilities executed all claimed steps at defendants' direction. | Defendants argued lack of control/agency and that commercial sales/Section 45 tax credit relationship doesn’t show direction and control. | Reversed as to testing allegations: pleadings sufficiently allege direction/control for pilot/full‑scale testing; district court dismissal of commercial‑activity attribution stands. |
| Doctrine of equivalents | Even if "injecting" is limited, injecting MerSorb mixed with coal is equivalent—performs same function, way, and result (makes precursor available to decompose in flue gas and oxidize mercury). | Defendants argued lack of literal infringement and that equivalents not adequately alleged. | Reversed: DOE claim adequately pleaded under Twombly/Iqbal. |
| Induced and contributory infringement; willfulness | Nalco alleged defendants had pre‑suit knowledge of the '692 patent, provided instructions/support, controlled testing, sold MerSorb/S‑Sorb especially adapted for infringement, and acted with specific intent to induce. | Defendants argued lack of adequately pleaded direct infringement, lack of requisite intent for inducement, and that additives have substantial noninfringing uses. | Reversed: Because direct infringement allegations survive, indirect claims adequately pleaded—inducement (specific intent/knowledge) and contributory (knowledge and alleged lack of substantial noninfringing uses) survive; willfulness reinstated for further proceedings. |
Key Cases Cited
- Ashcroft v. Iqbal, 556 U.S. 662 (pleading standard; factual plausibility)
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (pleading standard; sufficient factual matter)
- In re Bill of Lading Transmission & Processing Sys. Patent Litig., 681 F.3d 1323 (patent pleading principles)
- Akamai Techs., Inc. v. Limelight Networks, Inc., 797 F.3d 1020 (divided infringement; direction or control/joint enterprise tests)
- Travel Sentry, Inc. v. Tropp, 877 F.3d 1370 (context for Akamai attribution principles)
- Global-Tech Appliances, Inc. v. SEB S.A., 563 U.S. 754 (inducement requires knowledge of infringement)
- Warner-Jenkinson Co. v. Hilton Davis Chem. Co., 520 U.S. 17 (doctrine of equivalents framework)
- Graver Tank & Mfg. Co. v. Linde Air Prods. Co., 339 U.S. 605 (doctrine of equivalents foundation)
- Commil USA, LLC v. Cisco Sys., Inc., 135 S. Ct. 1920 (knowledge requirement for contributory infringement)
- Gibson v. City of Chicago, 910 F.2d 1510 (motion to dismiss tests sufficiency, not merits)
- Vita-Mix Corp. v. Basic Holding, Inc., 581 F.3d 1317 (definition of substantial noninfringing use)