DOW Chemical Co. v. NOVA Chemicals Corp.,
809 F.3d 1223 (Fed. Cir. 2015) (denial of rehearing en banc)
Authored by Peter McDonald
Statement of Facts: This is a patent infringement case that The Dow Chemical Company against NOVA Chemicals Corporation and NOVA Chemicals, Inc. (collectively, “NOVA”) alleging infringement of United States Patent Nos. 5,847,053 (the “ ‘053 patent”) and 6,111,023 (the “ ‘023 patent”). The DOW Chemical Company is a multinational chemical corporation that provides chemical, plastic, and agricultural products and services to consumer markets that include food, transportation, health and medicine, personal care and construction. NOVA Chemicals Corporation is a plastics and chemical company headquartered in Calgary, Alberta whose products are used in a wide variety of applications, including food and electronics packaging, industrial materials, appliances, and a variety of consumer goods. NOVA Chemicals, Inc. is their American subsidiary incorporated in Delaware.
The asserted claims of both patents cover ethylene polymer compositions, which are a type of plastic with improved modulus, yield strength, impact strength, and tear strength. These polymers can be made into films that can be down-gauged, or made thinner, without losing strength. The patents at issue require “a slope of strain hardening coefficient greater than or equal to 1.3.” 803 F.3d 623, 624 (Fed. Cir. 2015). The patents expired on October 15, 2011.
Procedural History: The Dow Chemical Company filed suit against NOVA Chemicals Corp. alleging infringement of patent claims on October 21, 2005, in the United States District Court for the District of Delaware. NOVA claims that the patents are “indefinite” because they fail to teach a person skilled in the art how to measure the “slope of strain hardening” which is required to calculate the strain hardening coefficient. On June 15, 2010, a jury found that NOVA infringed the claims of the asserted patents and that the patents were not invalid for indefiniteness. The jury had been instructed that “if the meaning of the claims is discernible it is definite.” Id. at 625. NOVA appealed, arguing that the patents were invalid for indefiniteness. In 2012, the Federal Circuit held that the patents were not indefinite. On remand, the district court held a bench trial on supplemental damages for the period between January 1, 2010 and October 15, 2011, when the patents expired. On March 28, 2014, the district court granted supplemental damages to Dow in the form of lost profits and reasonable royalties. NOVA appealed the award of supplemental damages on April 23, 2014 to the Federal Circuit. Dow cross-appealed the denial of its request for enhanced damages on May 1, 2014.
While the appeals were pending, the Supreme Court decided Nautilus, Inc. v. Biosig Instruments, Inc., 134 S. Ct. 2120, 2124 (2014). In Nautilus, the Supreme Court announced a new standard for indefiniteness, stating that “a patent is invalid for indefiniteness if its claims, read in light of the specification delineating the patent, and the prosecution history, fail to inform, with reasonable certainty, those skilled in the art about the scope of the invention.” 134 S. Ct. at 2124. NOVA argued on appeal that the damages award should be vacated because the patents are invalid for indefiniteness in light of the Nautilus decision. Dow argued that the Federal Circuit was bound by its decision and NOVA’s claim is barred due to res judicata. The Federal Circuit panel reversed the award of supplemental damages on August 28, 2015, ruling that the patents at issue did not provide one skilled in the art with the scope of the invention and thus were invalid in light of Nautilus. The Federal Circuit explained that the Nautilus decision changed the law, thus supporting the determination that the change of law exception to the doctrine of res judicata permitted appellate courts to reconsider whether the patents were invalid for indefiniteness. Dow filed a combined petition for rehearing and rehearing en banc with the Federal Circuit.
Question Presented: Whether to grant petition for rehearing en banc.
Holding: The Federal Circuit denied the petition for rehearing en banc per curiam.
Concurring Opinion of Chief Judge Prost: Chief Judge Prost and Circuit Judges Dyk and Wallach concur in the denial of rehearing, writing separately to confirm that if a skilled person would choose an established method of measurement, it may be sufficient to defeat a claim of indefiniteness, even if that method is not explicitly stated in the patent itself.
Concurring Opinion of Judge Moore: In his concurring opinion in the denial for rehearing en banc, Judge Moore focused his opinion around answering two questions: (1) Can extrinsic evidence be relied upon when determining whether a patent’s specification is definite? (2) Did the panel’s decision alter or change the law relating to indefiniteness in regards to deference to findings of fact and burden of proof?
In denying Dow’s petition for rehearing, Judge Moore reiterated that the panel’s decision did not change the law regarding indefiniteness. While the ultimate question of indefiniteness is one of law, indefiniteness sometimes requires resolution of underlying questions of fact. Nautilus only changed the governing formulation of the substantive standard for indefiniteness, which in many cases requires factual inquiries into skilled artisans’ understanding. Appreciating what a skilled artisan knew at the time of the invention is pertinent to whether the claims are reasonably clear in their meaning and scope. A question about the state of the knowledge of a skilled artisan is a question of fact, likely necessitating extrinsic evidence to establish.
Judge Moore argued that the panel’s decision cannot change the Supreme Court’s ruling that factual findings that rely on extrinsic evidence must be given deference on appeal. He further explains that two post-Nautilus cases (Teva Pharmaceuticals USA v. Sandoz, Inc., 789 F.3d 1335 (Fed. Cir. 2015) and Interval Licensing LLC v. AOL, Inc., 766 F.3d 1364 (Fed. Cir. 2014)) both recognize that factual findings underlying an indefiniteness determination are reviewed for clear error. When the jury renders a general verdict on validity or indefiniteness, the Federal Circuit must presume all factual findings in support of the verdict.
Precedent also requires that the burden of proof for indefiniteness remain on the party challenging validity and it must be established by clear and convincing evidence. The burden of proving indefiniteness includes proving not only that multiple measurement techniques exist, but also that one of skill in the art would not know how to choose among them. Judge Moore pointed out that this has been the standard for over 30 years, and this decision cannot be understood to change that standard.
Judge Moore concluded that the panel’s decision did not change the law of indefiniteness in three key respects: (1) the panel opinion does not support the proposition that extrinsic evidence cannot be relied upon when determining whether a patent’s specification is sufficiently definite; (2) the panel’s opinion does not alter the Supreme Court or Federal Circuit precedent that factual findings made incident to the ultimate legal conclusion of indefiniteness receive deference on appeal; (3) the panel’s decision does not alter Supreme Court or Federal Circuit precedent that the burden of proving indefiniteness remains on the party challenging validity. On the basis of these conclusions, Judge Moore concurred with the decision that en banc action is not warranted in this case and the issues presented are not worth rehearing.
Dissenting Opinion of Judge O’Malley: Judge O’Malley, with whom Judge Reyna joins, dissented in the denial of the petition. While O’Malley agreed that the panel’s decision did not have sweeping effects on the law of indefiniteness, she believed that the panel should not have discussed indefiniteness at all due to lack of jurisdiction to render a judgment. Judge O’Malley argued that Federal Rules of Civil Procedure Rule 54(b) prohibited the panel from reaching to apply the later-decided Nautilus decision to the earlier final judgment on validity here. O’Malley believed that the only thing the panel should have reviewed on appeal is the measure of royalty owed post-verdict and pre-expiration of the patent. In her mind, the panel should have never reviewed de novo the validity of the patent or Dow’s entitlement to supplemental damages; those were established and affirmed as final.