Magēmā Tech. LLC v. Phillips 66, Appeal No. 24-1342 (Fed. Cir. Sept. 8, 2025)

Our Case of the Week concerns shenanigans at trial.  Ultimately the Federal Circuit remanded for a new trial, finding Phillips’s “mischief” tainted the jury verdict because it was unclear whether the jury’s general verdict of noninfringement was based on Phillips’ improper, prejudicial theory, or was based on one of two other theories.

At issue is Magēmā ’s patent for marine grade fuel.  In 2016, international standards changed from allowing 3.5% sulfur to only .5% sulfur.  Magēmā ’s patent claim cited a process starting with fuel that met a certain, widely-recognized standard, and then involved hydroprocessing.  One component of the standard concerned the flashpoint of the oil.  Magēmā believed Phillips infringed the patent and sued.

At issue was whether the Phillips oil met the standard—i.e., whether it had the stated flashpoint.  The parties disputed where in the process the flashpoint should be measured – either outside the battery limits or inside the battery limits.  Magēmā wanted to test inside the battery limits in Phillips’ facility.  On Magēmā ’s motion to compel, Phillips argued that doing so would be too dangerous.  Phillips argued that Magēmā could simply use a generally accepted formula—the Riazi Formula—to estimate flashpoint temperature inside the battery limits at Phillips’ facility using otherwise available data.

After the close of discovery and after briefing cross-motions for summary judgment, it became clear that Phillips, in fact, had the capability of testing flashpoint inside the battery limits.  Phillips moved to supplement the summary judgment record with evidence of flashpoint testing from a new sample station it built inside the battery limits.  That motion was denied.

Then, on the eve of trial, Phillips produced its demonstrative exhibits, indicating its intent to argue to the jury that it could not find infringement because Magēmā did not have testing data from inside the battery limits, notwithstanding its argument to the court on the motion to compel that doing so would be too dangerous and that the Riazzi formula could be used instead.

Magēmā sought to exclude the argument, but the district court allowed the slide to be presented to the jury.  Phillips then cross-examined Magēmā ’s witnesses at trial, suggesting that the Riazzi formula was insufficient.  And, notwithstanding an express order from the district court precluding any further reference to the theory at trial, Phillips raised the issue again at closing argument.

The jury found non-infringement on a general verdict form.  Magēmā moved for a new trial, and the district court denied the motion for new trial, finding that the jury was likely swayed by two other noninfringement arguments that Phillips had presented.

On appeal, the Federal Circuit reversed.  The Court noted that, “[W]hen a case is submitted to the jury on a general verdict, the failure of evidence or a legal mistake under one theory of the case generally requires reversal for a new trial because the reviewing court cannot determine whether the jury based its verdict on a sound or unsound theory.”  It was undisputed that the “insufficient testing” theory was both improper and prejudicial.  The Court also found that the other two theories were sufficiently disputed at trial that it could not be certain that the “insufficient testing” theory did not taint the jury’s verdict.  The Federal Circuit remanded for a new trial.

The Court also rejected an alternative claim construction argument raised by Phillips.  The Court affirmed the district court’s agreement with Magēmā ’s proposed construction of the term because that construction was based on Magēmā ’s clear intent to act as its own lexicographer concerning the definition of that claim term.

The opinion can be found here.

By Nika Aldrich

ALSO THIS WEEK

Future Link Systems, LLC v. RealTek Semiconductor Corporation, Appeal Nos. 2023-1056, -1057 (Fed. Cir. Sept. 9, 2025)

In 2021, patent owner Future Link Systems, LLC (“Future Link”) initiated two patent infringement suits against Realtek Semiconductor Corp. (“Realtek”), a global supplier of integrated circuits. Ultimately, Future Link voluntarily dismissed both cases without prejudice. Realtek moved for Rule 11 sanctions, attorneys’ fees, and rulings on certain discovery issues. The district court denied Realtek’s motions for attorneys’ fees as sanctions under Rule 11, for attorneys’ fees under 35 U.S.C. § 285, and for fees and costs under 28 U.S.C. § 1927 in both cases. The court failed to address Realtek’s request for costs under Rule 54(d)(1). The court also denied Realtek’s discovery requests.

In this appeal, Realtek challenged the district court’s denial of (1) its motions for fees, costs, and sanctions; and (2) its discovery requests related to confidentiality.

Section 285 provides that “[t]he court in exceptional cases may award reasonable attorney fees to the prevailing party.” Rule 54(d)(1) provides that, “[u]nless a federal statute, [the Federal Rules of Civil Procedure], or a court order provides otherwise, costs – other than attorney’s fees-should be allowed to the prevailing party.” The Court here thus determined that whether the district court erred in denying Realtek fees under § 285 and Rule 54(d)(1) turned on whether Realtek could be considered a prevailing party. Under Supreme Court precedent, “[t]he touchstone of the prevailing party inquiry must be the material alteration of the legal relationship of the parties.” Tex. State Teachers Ass’n v. Garland Indep. Sch. Dist., 489 U.S. 782, 792-93 (1989). Realtek argued here that it became the prevailing party when the district court sanctioned Future Link by converting its voluntary dismissal into a dismissal with prejudice. The Court here agreed, holding that “a favorable judgment on the merits is not necessary for a defendant to be deemed a prevailing party.” The Court thus vacated the district court’s § 285 decision and remanded to address Rule 54 costs.

The Court also determined that the district court did not abuse its discretion in concluding that Future Link’s infringement claims were supported by a sufficient factual basis, and thus affirmed the district court’s denial of Rule 11 sanctions. The Court denied Realtek’s motion for fees under § 1927, finding that it failed to offer “clear and convincing evidence that meets the Fifth Circuit’s high standard of finding this litigation meritless.” Finally, the Court determined that the district court did not abuse its discretion in failing to grant Realtek’s requested discovery exemptions.

The opinion can be found here.

By Julia Davis

This article summarizes aspects of the law and does not constitute legal advice. For legal advice with regard to your situation, you should contact an attorney.