U.S. WATER SERVICES, INC., Roy Johnson, Plaintiffs-Appellants v. NOVOZYMES A/S, Novozymes North America, Inc., Defendants-Cross-Appellants
2015-1950, 2015-1967
United States Court of Appeals, Federal Circuit
December 15, 2016
We therefore reverse the jury‘s verdict that Power Integrations infringed claims 6, 7, 18, and 19 under the doctrine of equivalents.
IV. Permanent Injunction
Following trial, the district court granted Power Integrations’ motion for a permanent injunction and enjoined “Fairchild from selling, offering to sell, and importing the products found at trial to infringe and those products ‘not colorably different’ from them.” Permanent Injunction Order, 2014 WL 2960035, at *2. The district court denied Fairchild‘s motion for a permanent injunction. Fairchild appeals both of these rulings.
We first note that Fairchild‘s appeal of the district court‘s denial of Fairchild‘s motion for a permanent injunction is moot. The district court entered judgment of infringement against Power Integrations on the ‘972 patent alone. We have reversed that judgment. See supra at 1341-45. Without a judgment of infringement by Power Integrations, issuance of a permanent injunction is not appropriate.
Turning to the district court‘s grant of Power Integrations’ motion for a permanent injunction, we vacate that decision. We have significantly reduced the scope of Fairchild‘s infringement liability in this case. As a result of our above holdings, only the district court‘s judgment that Fairchild is liable for direct infringement of the ‘851 and ‘876 patents remains untouched. We leave it to the district court to determine in the first instance if a permanent injunction is appropriate in view of Fairchild‘s infringement liability. Though, we recognize that the district court may exercise its discretion and defer its decision until Power Integrations’ claims that Fairchild induced infringement of the ‘851 and ‘876 patent are resolved.
CONCLUSION
For the preceding reasons, we affirm-in-part, reverse-in-part, and vacate-in-part the final judgment entered by the district court and remand for further proceedings.
AFFIRMED-IN-PART, REVERSED-IN-PART, VACATED-IN-PART, AND REMANDED
COSTS
Each party shall bear its own costs.
MICHELLE MARIE UMBERGER, Perkins Coie, LLP, Madison, WI, argued for plain-
DAVID KEITH TELLEKSON, Fenwick & West LLP, Seattle, WA, argued for defendants-cross-appellants. Also represented by EWA M. DAVISON, PHILLIP DECKER, ELIZABETH B. HAGAN; VIRGINIA KAY DEMARCHI, MICHAEL C. SAUNDERS, II, Mountain View, CA.
Before WALLACH, HUGHES, and STOLL, Circuit Judges.
WALLACH, Circuit Judge.
U.S. Water Services, Inc. and Roy Johnson (together, “U.S. Water“) sued Novozymes A/S and Novozymes North America, Inc. (together, “Novozymes“) in the U.S. District Court for the Western District of Wisconsin (“District Court“), alleging indirect infringement of U.S. Patent Nos. 8,415,137 (“the ‘137 patent“) and 8,609,399 (“the ‘399 patent“) (together, “the Patents-in-Suit“). Novozymes counterclaimed for declaratory judgment of noninfringement, invalidity, and inequitable conduct. The parties later filed cross-motions for summary judgment. The District Court granted Novozymes‘s Motion in part, finding claims 1, 6, and 12-13 of the ‘137 patent and claims 1-2, 5-12, 16-22, 25, 28-32, and 34-35 of the ‘399 patent (collectively, “the Asserted Claims“) invalid as inherently anticipated by various prior art references. U.S. Water Servs., Inc. v. Novozymes A/S, 120 F. Supp. 3d 861, 868-82 (W.D. Wis. 2015). However, the District Court denied Novozymes‘s Motion as to inequitable conduct by U.S. Water. Id. at 882-83.
U.S. Water appeals the District Court‘s anticipation finding. Novozymes cross-appeals the District Court‘s finding of no inequitable conduct. We have jurisdiction pursuant to
BACKGROUND
I. The Relevant Patents
The technology at issue relates to the production of ethyl alcohol (i.e., ethanol) from a milled grain. Ethanol production yields an insoluble byproduct that deposits on, or “fouls,” the processing equipment. See, e.g., ‘399 patent col. 1 ll. 34-38; J.A. 1376-90 (Confidential Material). The Patents-in-Suit disclose methods for reducing or preventing fouling. See ‘399 patent col. 3 ll. 21-24; ‘137 patent col. 1 ll. 50-53.
The Patents-in-Suit share a common specification and are related to one another as continuations of the application that also led to U.S. Patent No. 8,039,244 (“the ‘244 patent“) (collectively, “the Patent Family“).1 J.A. 135, 144. The Patent Family generally claims methods of reducing fouling through the use of phytase.2
Each patent discloses the addition of the enzyme phytase at various points in the ethanol production process. For example,
II. The Prior Art
The District Court found that either International Publication No. WO 01/62947 A1 (“Veit“), J.A. 1580-610, or U.S. Patent No. 5,756,714 (“Antrim“) inherently anticipated the Asserted Claims. U.S. Water, 120 F. Supp. 3d at 878-82. Veit is entitled “Fermentation with a Phytase” and explains that ethanol production from whole grains involves four steps: (1) milling, (2) liquefaction,3 (3) saccharification,4 and (4) fermentation. Veit p. 2 ll. 24-29. Veit discloses that adding phytase during the saccharification and fermentation stages of ethanol production can result in “increases [in] the fermentation and ethanol yields.” Id. p. 5 l. 29; see id. p. 1 ll. 7-8, p. 2 ll. 15-19, p. 3 ll. 4-11 (further describing the process for adding phytase at either step). Antrim is entitled “Method for Liquefying Starch” and discloses a method for liquefying corn starch that “relates to the removal, and/or inactivation of an enzyme inhibiting composition from a granular starch prior to or during liquefaction.” Antrim col. 1 ll. 14-16. The enzyme inhibiting composition is “comprise[d] of a form of phytate” that “acts to inhibit [alpha]-amylase hydrolysis of a starch solution during low pH liquefaction.” Id. col. 5 ll. 30-36. Antrim is directed at a more efficient liquefaction process through the use of enzymes. See id. col. 4 ll. 6-21 (summarizing the objectives of the invention).
DISCUSSION
U.S. Water argues that the District Court erred in granting summary judgment of invalidity based on inherent anticipation because the District Court expressly acknowledged the existence of a
I. Standard of Review
This court reviews the grant of summary judgment under the law of the regional circuit in which the district court sits. Classen Immunotherapies, Inc. v. Elan Pharm., Inc., 786 F.3d 892, 896 (Fed. Cir. 2015). The Seventh Circuit reviews a district court‘s grant of summary judgment de novo. Greer v. Bd. of Educ., 267 F.3d 723, 726 (7th Cir. 2001). Summary judgment is proper only “if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.”
II. Anticipation
U.S. Water argues that the District Court erred in granting summary judgment based on a finding that the Patents-in-Suit are inherently anticipated by Veit and Antrim. That is so, U.S. Water contends, because the District Court acknowledged the existence of a genuine dispute as to a material fact. Appellants’ Br. 35. We agree with U.S. Water.
A. Legal Framework
Although “the anticipation inquiry first demands a proper claim construc-
Even if a prior art reference does not explicitly disclose all features of the claimed invention, we have found that the reference inherently may do so. See Schering Corp. v. Geneva Pharm., Inc., 339 F.3d 1373, 1377 (Fed. Cir. 2003). “[A]nticipation by inherent disclosure is appropriate only when the [single prior art] reference discloses prior art that must necessarily include the unstated limitation.” Transclean Corp. v. Bridgewood Servs., Inc., 290 F.3d 1364, 1373 (Fed. Cir. 2002) (citation omitted). “Inherency, however, may not be established by probabilities or possibilities. The mere fact that a certain thing may result from a given set of circumstances is not sufficient.” Cont‘l Can Co. USA, Inc. v. Monsanto Co., 948 F.2d 1264, 1269 (Fed. Cir. 1991) (internal quotation marks and citations omitted). Rather, “[t]he inherent result must inevitably result from the disclosed steps . . . .” In re Montgomery, 677 F.3d 1375, 1380 (Fed. Cir. 2012).
B. The District Court‘s Finding
The District Court analyzed the Asserted Claims of the Patents-in-Suit and found seven common elements shared by these claims. U.S. Water Servs., 120 F. Supp. 3d at 868. After comparing these common elements with the disclosures in Veit and Antrim, the District Court concluded that “[t]he evidence of record show[ed] beyond genuine dispute that the expressly disclosed elements, one through six, [were] disclosed in Veit and Antrim.” Id. at 872; see id. at 868. As to the last element, “thereby reducing the formation of insoluble deposits,” the District Court determined that “the critical issue” was whether Veit or Antrim inherently disclosed “adding phytase for the purpose of reducing deposits.” Id. at 872.
In addressing this issue, the District Court explained that “the critical facts that are relevant to the court‘s anticipation analysis are not in dispute.” Id. at 881. In particular, the District Court observed that “[t]he [Patents-in-Suit] describe a method for using phytase in terms of ranges for dosage, temperature, and pH; Veit and Antrim disclose the same method, using overlapping and often narrower ranges.” Id. On this basis, the District Court determined that “summary judgment [was] appropriate because the evidence of record establishe[d] that deposit reduction [was] a natural result of the methods for adding phytase during ethanol production that Veit and Antrim disclose.” Id. at 878. The District Court added that, although “Veit and Antrim do not expressly identify the benefit that U.S. Water‘s patents identify, they nevertheless inherently disclose that benefit.” Id. at 879. Thus, the District Court determined either Veit or Antrim inherently disclose element seven.
C. A Genuine Dispute as to a Material Fact Bars Summary Judgment Based on Inherent Anticipation
We must determine whether the District Court overlooked a genuine dispute about a material fact—whether the reduction of “insoluble deposits of phytic acid or salts of phytic acids” as recited in the Asserted Claims was inherent in either Veit or Antrim through the use of phytase. In reaching this conclusion, “we must view the evidence and draw all inferences in a way most favorable to the nonmoving party.” Bombard v. Fort Wayne Newspapers, Inc., 92 F.3d 560, 562 (7th Cir. 1996) (citation omitted).
The District Court correctly identified that “[t]he issue on which this case ultimately turns is whether Veit [or] Antrim inherently disclose using phytase to reduce deposits in ethanol production machinery.” U.S. Water Servs., 120 F. Supp. 3d at 878. However, it erred in finding no genuine dispute of material fact as to whether the Patents-in-Suit are inherently anticipated because “the prior art discloses the conditions that will necessarily result in phytase reducing deposits.” Id. at 879. The District Court erred in deeming irrelevant the fact that “U.S. Water . . . adduced evidence[, including expert testimony,] . . . that practicing Veit and Antrim will not always result in deposit reduction.” Id. The District Court recognized this conflicting evidence that went to the core of an inherent anticipation analysis, but concluded this evidence did not preclude summary judgment. Id. By disregarding this evidence, the District Court improperly made credibility determinations and weighed conflicting evidence. See Anderson, 477 U.S. at 255 (“Credibility determinations, the weighing of the evidence, and the drawing of legitimate inferences from the facts are jury functions, not those of a judge, [when] he is ruling on a motion for summary judgment . . . .“).
We find that the record evidence demonstrates that “there is sufficient evidence
III. Inequitable Conduct
Novozymes argues that the District Court erred in granting summary judgment of no inequitable conduct. See Cross-Appellants’ Br. 53-68. In particular, Novozymes contends that the District Court failed to recognize a genuine dispute as to a fact material to the inequitable conduct inquiry. Id. at 63-68. We disagree.
A. Legal Framework
“Inequitable conduct is an equitable defense to patent infringement that, if proved, bars enforcement of a patent.” Therasense, Inc. v. Becton, Dickinson & Co., 649 F.3d 1276, 1285 (Fed. Cir. 2011) (en banc). A finding of inequitable conduct as to “any single claim renders the entire patent unenforceable” and may “render unenforceable other related patents and applications in the same technology family.” Id. at 1288 (internal quotation marks and citations omitted). “Inequitable conduct occurs when a patentee breaches his or her duty to the [U.S. Patent and Trademark Office (‘USPTO‘)] of candor, good faith, and honesty.” Ferring B.V. v. Barr Labs., Inc., 437 F.3d 1181, 1186 (Fed. Cir. 2006) (internal quotation marks and citation omitted); see
“A party seeking to prove inequitable conduct must show . . . that the patent applicant made misrepresentations or omissions material to patentability, that he did so with the specific intent to mislead or deceive the [USPTO], and that deceptive intent was the single most reasonable inference to be drawn from the evidence.” Ohio Willow Wood Co. v. Alps S., LLC, 813 F.3d 1350, 1357 (Fed. Cir. 2016) (citations omitted). “To prove the element of materiality, a party claiming inequitable conduct ordinarily must show that the patentee withheld or misrepresented information that, in the absence of the withholding or misrepresentation, would have prevented a patent claim from issuing.” Id. (internal quotation marks and citation omitted). “Specific intent to commit acts constituting inequitable conduct may be inferred from indirect and circumstantial evidence[,] . . . [b]ut deceptive intent must be the single most reasonable inference drawn from the evidence.” Id. at 1358 (internal quotation marks and citations omitted).
B. Relevant Facts
Novozymes bases its inequitable conduct charge on representations made by U.S. Water about the application that led to the ‘244 patent and, thus, the Patent Family. Specifically, following the examiner‘s rejection of certain claims in the application as obvious over certain prior art such as Veit, U.S. Water amended the proposed claims in the application to change the stage at which phytase was added. See J.A. 2222-30 (Amendments to the Claims), 2309-17 (further Amendments to the Claims). U.S. Water narrowed its claims to add phytase specifically to “the thin stillage, backset, or mixture thereof.” J.A. 2222-26. As a result, U.S. Water argued the amended claims overcame Veit, where “phytase is added before fermentation” to “release nutrients so that yeast are more efficient at fermentation.” J.A. 2228, 2229. The ‘244 patent subsequently issued in October 2011 with the amended claim language. J.A. 1344.
Around the same time, U.S. Water was involved in litigation against ChemTreat,
While the litigation with ChemTreat remained ongoing and after the court identified the apparent discrepancy, U.S. Water amended the continuation application that led to the ‘137 patent. This amendment cancelled all pending claims and replaced them with new claims. J.A. 2540-53 (Amendment dated July 20, 2012). The new claims broadly required “adding phytase to an ethanol processing fluid in the plant.” J.A. 2541, 2545. The amended claims also identified the differences with claim 1 of the ‘244 patent, which sought to narrow the claimed subject matter. See J.A. 2545.
C. The District Court Did Not Err in Finding a Lack of Materiality
The District Court determined that Novozymes failed to demonstrate a genuine dispute over either materiality or intent, and that the law did not require a finding of inequitable conduct. U.S. Water Servs., 120 F. Supp. 3d at 883. As to materiality, the District Court determined that “Novozymes falls short of establishing the but-for materiality” of the information disclosed in the ChemTreat litigation. Id. Specifically, the District Court observed that the amendment of the continuation application that led to the ‘137 patent “set out the amended claim with differences with claim 1 of the ‘244 patent highlighted,” such that it “would have been amply clear to the examiner that the patentees were seeking a claim that was broader in the sense that the after-fermentation limitation was removed.” Id. Furthermore, the District Court determined that “th[e] third-party submission provides one more reason that the examiner knew she had to evaluate the allowability of the broader claims over the prior art, particularly Veit . . . .” Id.
Novozymes argues that “[t]here is at least a genuine issue of fact that the ChemTreat litigation documents withheld by U.S. Water from the [USPTO] are material.” Cross-Appellants’ Br. 63 (emphasis omitted). Novozymes contends that the Patents-in-Suit would not have issued had the examiner been aware of these documents and disclosures. Id. at 64-65.
There is no genuine dispute about this material fact. The record contains no suggestion that, but-for the disclosures made during the ChemTreat litigation, the examiner would not have issued the Patents-in-Suit. Instead, the record shows that the examiner was aware of the differences between the pending claims of the Patents-in-Suit and the ‘244 patent, whether as discussed in U.S. Water‘s Declaration or the third-party‘s submission. See J.A. 5399-404. The examiner reviewed the third-party‘s submission and the relevant prior art, see J.A. 5399-404, but found that the evidence did not affect the ultimate patentability determination. U.S. Water did not withhold or misrepresent information to the USPTO. See Fiskars, Inc. v. Hunt Mfg. Co., 221 F.3d 1318, 1327 (Fed. Cir. 2000) (“An applicant is not required to tell the [USPTO] twice about the same prior art, on pain of loss of the patent for inequitable conduct.“).
Finally, Novozymes also contests the District Court‘s finding of no intent to deceive the USPTO. Cross-Appellants’ Br. 65-68. However, because we find no error in the District Court‘s determination under the materiality prong of the inequitable conduct analysis, we need not address intent. See Ohio Willow Wood, 813 F.3d at 1357 (explaining that a party alleging inequitable conduct must prove materiality and intent); Therasense, 649 F.3d at 1290 (same).
CONCLUSION
We have considered the parties’ remaining arguments and find them unpersuasive. Accordingly, the decision of the U.S. District Court for the Western District of Wisconsin is
VACATED-IN-PART, AFFIRMED-IN-PART, AND REMANDED
COSTS
Each party shall bear its own costs.
INTERNATIONAL CUSTOM PRODUCTS, INC., Plaintiff-Appellee v. UNITED STATES, Defendant-Appellant
2016-1024
United States Court of Appeals, Federal Circuit.
Decided: December 15, 2016
