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Latest Federal Circuit Court Cases, 3/5/18

March 5, 2018

Overview

Nalco Co. v. Chem-Mod, LLC, Appeal No. 17-1036 (Fed. Cir. Feb. 27, 2018)

In Nalco Company v. Chem-Mod, LLC, the Federal Circuit reviewed the district court’s decision to dismiss Nalco Company’s complaint for failure to state a claim upon which relief can be granted.  The Federal Circuit reversed the district court’s decision finding that Nalco was not required to prove its case at the pleading stage and that disputes regarding claim construction are not properly resolved on a motion to dismiss.

The claims all concerned a “method for the removal of elemental mercury, a toxic pollutant, from the flue gas created by combustion in coal-fired power plants.”  Specifically, a chemical is added to the process, which combines with the mercury in flue gas to form particles that can be filtered more easily.  Preferably, this chemical is added in the combustion zone of the furnace.  The defendants add the chemical in a different area of the plant.

The first issue in the case was whether Nalco stated a plausible cause of action for direct infringement.  Nalco had asserted two theories for its claims.  Chem-Mod moved to dismiss them both.

The Federal Circuit found that Chem-Mod’s objections to the first theory of direct infringement “read like classic Markman arguments.”  In particular, it found that Chem-Mod was objecting to Nalco’s proposed construction for “flue gas” and this was “a dispute not suitable for resolution on a motion to dismiss.”  On the second theory, the issue was whether the claimed method should be confined to the preferred embodiment of injecting the chemical in the combustion zone.  The Federal Circuit found that, like with the first theory, it was improper to resolve this issue without the benefit of claim construction.

In coming to these conclusions, the Federal Circuit reiterated that a party does not need to prove its case at the pleading stage and the purpose of a complaint is to put the alleged infringer on notice of the accused infringement.  Here, in particular, the Federal Circuit found “Nalco’s pleading clearly exceeds the minimum requirements under Rule 12(b)(6), especially as ‘the Federal Rules of Civil Procedure do not require a plaintiff to plead facts establishing that each element of an asserted claim is met.’  . . . The district court’s failure to credit these allegations as true is reversible error.”

Nalco also pleaded that Chem-Mod was liable under a theory of divided infringement. Nalco’s allegations were based upon Chem-Mod controlling and directing the operation of a test facility that carried out the claimed method and its own full scale testing of its product using the claimed method.  The Federal Circuit reversed the district court’s dismissal of that cause of action, holding that Nalco’s “allegations adequately plead attribution of the testing activities to Defendants.”

The district court had also dismissed the allegation of infringement based on the doctrine of equivalents because “Nalco had failed to adequately allege that Defendants’ use of the Chem-Mod Solution required performance of all steps or the equivalent claim limitations of the ’692 patent, particularly the “injecting” of bromide into flue gas.” The Federal Circuit held that Nalco had incorporated sufficiently detailed infringement contentions explaining this particular claim, and that Chem-Mod had failed to show why these allegations did not state a claim under the doctrine of equivalents.

Finally, the district court had dismissed the claims of indirect infringement and willful infringement because of Nalco’s failure to plead direct infringement.  Since the Federal Circuit found that Nalco had adequately pleaded direct infringement, it also reversed the district court’s dismissal of the indirect infringement and willfulness claims.

Notably, this is the second time in two weeks that the Federal Circuit has reversed a district court’s decision to dismiss a patent case at the pleading stage.  See our write-up concerning Aatrix Software, and the propriety of dismissing a case on Section 101 grounds on a motion to dismiss, here.

Read the full decision 

ALSO THIS WEEK 

Knowles Electronics LLC v. Cirrus Logic, Inc., Appeal No. 2016-2010 (Fed. Cir. Mar. 1, 2018)

In an appeal from an inter partes reexamination, the Court held that the broadest reasonable interpretation of a term in a preamble of a patent could be different from the construction that the Federal Circuit held applied to the same term in the same claims in the same patent in an appeal of a different case.  The Court also found claims to be invalid based on the written description requirement in 35 U.S.C. § 112, because the specification disclosed a genus and the claims recited an undisclosed species within that genus.  Finally, the Court addressed the propriety of parties to the inter partes reexamination.  Judge Newman dissented on the claim construction issue.

Read the full decision

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