Dow Chemical Co. v. Nova Chemicals Corp. (Canada)

458 F. App'x 910
CourtCourt of Appeals for the Federal Circuit
DecidedJanuary 24, 2012
Docket2010-1526
StatusUnpublished
Cited by9 cases

This text of 458 F. App'x 910 (Dow Chemical Co. v. Nova Chemicals Corp. (Canada)) is published on Counsel Stack Legal Research, covering Court of Appeals for the Federal Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Dow Chemical Co. v. Nova Chemicals Corp. (Canada), 458 F. App'x 910 (Fed. Cir. 2012).

Opinions

Opinion for the court filed by Circuit Judge PROST.

Dissenting opinion filed by Circuit Judge REYNA.

PROST, Circuit Judge.

Nova Chemicals Corporation (“Nova”) appeals from the district court’s denial of its motion for judgment as a matter of law. Nova argues that the district court should have, in the first place, found that the Dow Chemical Company (“Dow”) lacked standing to bring this suit. Nova also argues that the district court should have set aside a jury verdict of infringement in Dow’s favor and instead found that the patents asserted by Dow are invalid for indefiniteness and lack of an adequate written description and are not infringed. Because we see no error in the district court’s standing and invalidity analyses, and because substantial evidence supports the jury’s infringement finding, we affirm.

Background

Dow brought this suit to enforce U.S. Patent No. 5,847,053 (“'053 patent”) and U.S. Patent No. 6,111,023 (“'023 patent”) (collectively, “the patents in suit”). The patents in suit claim a new kind of plastic that is stronger than conventional plastics, which allows, for example, using thinner films (less plastic) for the same purpose. Dow markets its invention as ELITE. Nova’s competing product is named SURPASS. Dow claimed in the district court that SURPASS infringes the patents in suit. Nova put on a three-part defense. First, it argued that Dow lacked standing to enforce the patents in suit. Second, it argued that the patents in suit were invalid for indefiniteness and lack of an adequate written description.1 Third, it ar[912]*912gued that SURPASS did not infringe the patents in suit.

Nova did not prevail on any of its arguments in the district court. The district court held a bench trial to resolve the standing issue and found that Dow had standing to enforce the patents in suit. Dow Chem. Co. v. Nova Chems. Corp., 726 F.Supp.2d 459, 463-64 (D.Del.2010). With respect to Nova’s indefiniteness argument, the district court found that the patents were not indefinite as a matter of law and construed the claims. The district court nonetheless allowed the jury to consider whether the patents were invalid for indefiniteness and lack of an adequate written description. The infringement issue was also submitted to the jury. In the end, the jury found the patents in suit valid and infringed and awarded approximately $61.7 million in damages to Dow for lost profits and reasonable royalties. The district court subsequently denied Nova’s renewed motion for judgment as a matter of law and entered judgment in line with the jury’s verdict. This appeal ensued. We have jurisdiction under 28 U.S.C. § 1295(a)(1).

Analysis

Nova makes three main arguments on appeal. First, it argues that Dow lacks standing to enforce the patents in suit. Second, it argues that the patents in suit are invalid for indefiniteness and lack of an adequate written description. Third, it argues that the jury’s verdict of infringement is not supported by substantial evidence. We address each argument in turn below.

A. Standing

The standing issue concerns the ownership of the patents in suit. There is no dispute that Dow is indeed the original assignee of the patents in suit and record title holder at the U.S. Patent and Trademark Office (“PTO”). Therefore Dow is the presumed owner of the patents in suit. See SiRF Tech., Inc. v. Int’l Trade Comm’n, 601 F.3d 1319, 1327-28 (Fed.Cir.2010) (“The recording of an assignment with the PTO is not a determination as to the validity of the assignment. However, we think that it creates a presumption of validity as to the assignment and places the burden to rebut such a showing on one challenging the assignment.” (citation omitted)). Effective on January 1, 2002, however, Dow and its holding company, Dow Global Technologies, Inc. (“DGTI”) entered into a “Contribution Agreement” (or “the agreement”) according to which a large share of Dow’s intellectual property rights was transferred to DGTI. Apparently, the Contribution Agreement was intended to generate certain tax benefits for Dow. Nova argues that the patents in suit were among the intellectual property rights that were transferred to DGTI under the Contribution Agreement. As a result, according to Nova, Dow does not have standing to enforce the patents in suit. Cf. Arachnid, Inc. v. Merit Indus., Inc., 939 F.2d 1574, 1579 (Fed.Cir.1991). Dow disagrees, arguing that it held on to the patents in suit so that it could enforce them in a suit such as this.

After holding a bench trial, the district court determined that the patents in suit were never transferred to DGTI. In particular, the court found that the Contribution Agreement was unambiguous in that it incorporated a document — entitled Schedule A — that contained a list of all the patents that were transferred to DGTI. The court heard and credited testimony from a Dow employee who was in charge of preparing and maintaining Schedule A, and she corroborated Dow’s assertion that the patents in suit never appeared in Schedule A. Based on these findings, the court found that Dow had met its burden [913]*913of establishing the ownership of the patents in suit. And, because the court found that the clear terms of the agreement controlled, it declined to evaluate the extrinsic evidence that Nova suggested defeated Dow’s standing. The court accordingly denied Nova’s request to dismiss the suit for lack of standing. For the reasons set forth below, we agree with the district court’s determinations.

Our standing analysis presents an issue of contract interpretation: whether Dow transferred the patents in suit to DGTI under the Contribution Agreement. Two sections of the Contribution Agreement (sections 2.01 and 1.07) are particularly important to our analysis. Section 2.01 of the agreement states,

2.01 Transfer of Patent Rights and Technology. Effective on the Transfer date, [Dow] hereby conveys, transfers, assigns and delivers to DGTI, and DGTI hereby accepts from [Dow] as an additional contribution to DGTI’s capital, all of [Dow’s] right and title to and interest in the Patent Rights, Technology and Work Processes, which rights are owned or controlled by [Dow] on the Transfer Date or thereafter.

J.A. 5041-42. This section essentially provides that Dow transferred its “Patent Rights” to DGTI. We must therefore determine whether the patents in suit fit within the scope of “Patent Rights.” That brings us to section 1.07, which defines “Patent Rights” in just two sentences:

1.07 “Patent Rights” means any and all patents and applications for patents of any kind, filed with and/or granted by a governmental body of the United States or any other country ... which are owned solely or controlled by [Dow] on the Transfer Date or thereafter, that [Dow] is able to assign to DGTI without the consent of or accounting to a Third Patty or Affiliated Company, without diminishing the royalties paid or payable by or otherwise materially affecting the obligations of such Third Party or Affiliated Company with respect to such Patent Rights, and without resulting in a loss of rights.

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458 F. App'x 910, Counsel Stack Legal Research, https://law.counselstack.com/opinion/dow-chemical-co-v-nova-chemicals-corp-canada-cafc-2012.