Durel Corp v. Osram Sylvania Inc

• Decision Date: 27 June 2001
• Citation: 256 F.3d 1298,59 U.S.P.Q.2d 1238
• Parties: (Fed. Cir. 2001) DUREL CORPORATION, Plaintiff-Cross Appellant, v. OSRAM SYLVANIA INC., Defendant-Appellant. 00-1261, -1391 DECIDED:
• Court: U.S. Court of Appeals — Federal Circuit

Page 1298

256 F.3d 1298 (Fed. Cir. 2001)

DUREL CORPORATION, Plaintiff-Cross Appellant, v. OSRAM SYLVANIA INC., Defendant-Appellant.

00-1261, -1391

United States Court of Appeals for the Federal Circuit

DECIDED: June 27, 2001

Amended: August 1, 2001

Appealed from: United States District Court for the District of Arizona

[Copyrighted Material Omitted]

Senior Judge Edward Rafeedie

Laurence H. Pretty, Christie, Parker & Hale, LLP, of Pasadena, California, argued for plaintiff-cross appellant. Of counsel was John David Carpenter.

Robert G. Krupka, Kirkland & Ellis, of Los Angeles, California, argued for defendant-appellant. With him on the brief were John M. Desmarais, and Robert A. Appleby, Kirkland & Ellis, of New York, New York; and Christopher Landau, Kirkland & Ellis, of Washington, DC. Of counsel was Jay I. Alexander, Kirkland & Ellis, of Washington, DC.

Before LOURIE, Circuit Judge, PLAGER, Senior Circuit Judge, and GAJARSA, Circuit Judge.

LOURIE, Circuit Judge.

Osram Sylvania Inc. ("Sylvania") appeals from the judgment of the United States District Court for the District of Arizona holding that Sylvania infringed Durel Corporation's U.S. Patents 5,418,062, 5,439,705, and 5,156,885. Durel Corp. v. Osram Sylvania Inc., 52 USPQ2d 1418, 1435 (D. Ariz. 1998). Sylvania also appeals from the district court's grant of partial summary judgment dismissing Sylvania's counterclaim for declaratory judgment of invalidity for failure to meet the enablement requirement of 35 U.S.C. § 112. Id. Finally, Sylvania appeals from the district court's denial of its motion for a new trial on damages. Durel Corp. v. Osram Sylvania Inc., No. 95-1750 (D. Ariz. Apr. 13, 2000). Durel cross-appeals from the district court's denial of its motion for judgment as a matter of law that Sylvania willfully infringed the '885 patent. Durel Corp. v. Osram Sylvania Inc., No. 95-1750 (D. Ariz. Apr. 21, 2000). Durel also cross-appeals from the denial of its motion to award damages for the period between the close of discovery and entry of the injunction. Durel Corp. v. Osram Sylvania Inc., No. 95-1750 (D. Ariz. May 4, 2000). Because the district court erred in its construction of the term "oxide coating" and Sylvania's coatings do not infringe Durel's patents as a matter of law, we reverse.

BACKGROUND

Durel is the exclusive licensee¹ of the '062, '705, and '885 patents, which relate to encapsulated electro luminescent ("EL") phosphor particles used in applications such as illuminating watch faces and instrument panels in motor vehicles. Encapsulating phosphor particles within the claimed oxide coatings increases the particles' resistance to deterioration attributable to atmospheric humidity. Durel, 52 USPQ2d at 1420. All of the independent claims of the patents recite that the phosphor is encapsulated by an "oxide coating." Claim 1 of the '062 patent claims a product (in relevant part) as follows:

1.Encapsulated electro luminescent phosphor particles, each comprising a particle of zinc sulfide-based electro luminescent phosphor which is essentially completely encapsulated within a substantially transparent, continuous metal oxide coating . . . .

'062 patent, col. 14, ll. 24-28 (emphasis added). The specification of each patent defines "oxide coating" as follows:

As used herein, "oxide coating" means a material made up primarily of metal cations and oxygen, but which may contain minor amounts of other elements and compounds originating in the precursor materials or phosphor particles, which can be generated in coating form on phosphor particles under the conditions described herein. Advantageous results have been obtained with coatings of titania (TiO2) and titania/silica TiO2/(SiO2). It is believed that useful results may also be obtained with other oxides formed from precursors in low temperature reactions such as silica (SiO2), alumina (Al2O3), tin oxide (SnO2), zirconia (ZrO2), etc., and similarly formed compound oxides such as mullite (3Al2O3 2Si[O]2).

'062 patent, col. 5, ll. 36-49; '885 patent, col. 5, ll. 33-45; '705 patent, col. 5, ll. 36-49 (emphasis added).

The patents each disclose the same twenty-eight examples, three of which coat phosphor with TiO2/SiO2; the remaining twenty-five examples coat phosphor with TiO2. '062 patent, col. 11, ll. 55 to col. 14, ll. 22. The oxide coating can be formed by the hydrolysis reaction of precursor molecules such as titanium tetrachloride (TiCl4) and water, which react in the vapor phase to produce TiO2 and hydrochloric acid. Id. at col. 6, ll. 41-52. Moreover, a high ratio of titanium tetrachloride molecules to water molecules is maintained "to promote the formation of more anhydrous titania films which are believed to provide optimum protection against humidity-accelerated decay." Id. at col. 7, ll. 20-22. If encapsulation is performed at low temperatures, the coatings may be insufficiently moisture impermeable, "a result it is believed of having a more open or more hydrated structure." Id. at col. 8, ll. 12-13.

Sylvania manufactures two types of phosphors relevant to this appeal: EL-type phosphors coated by a fluidized-bed reaction of water vapor and trimethyl aluminum; and newly encapsulated ("NE")-type phosphors coated by a water-free pyrolysis reaction of trimethyl aluminum, oxygen, and ozone. It is undisputed on appeal that the coatings on both the EL- and NE-type phosphors are a mixture of aluminum oxide hydroxide, AlO(OH), and aluminum trihydroxide, Al(OH)3. Durel, 52 USPQ2d at 1429.

Durel sued Sylvania for infringement of its '062, '705, and '885 patents by the EL-type phosphors. Id. at 1427. The district court^*construed the term "oxide coating" as being primarily composed of metal cations and oxygen, but also possibly containing other elements or compounds found in the original precursor ingredients or phosphor particles. Id. at 1428. The court then concluded that "a synthetic chemist would interpret the [patents] by using atomic mass to determine whether a coating is primarily metal cations and oxygen atoms with minor amounts of other elements and compounds found in the precursors." Id. at 1428. The court calculated that AlO(OH) is composed of approximately 43.3% aluminum, 53.3% oxygen, and 3.4% hydrogen, and that Al(OH)3² is composed of 49.1% aluminum, 45.3% oxygen, and 5.6% hydrogen.³ Id. at 1429. Finally, the court concluded that AlO(OH), containing 96.6% metal cations and oxygen and 3.4% other elements, and Al2(OH)3, containing 94.4% metal cations and oxygen and 5.6% other elements, fell squarely within its construction of the term "oxide coating." Id. Sylvania's coatings contained at least 94.4% aluminum and oxygen,

satisfying the "primarily" requirement of the court's definition of "oxide coating." Id. The court concluded that the amount of hydrogen, at most 5.6%, was minor in light of the amount of metal cations and oxygen in the coating. Id. Moreover, because the court found that hydrogen originated from water, which is defined in the specification as a precursor compound, it fell within the definition of the minor (non-metal or oxygen) ingredients of the coating. Id. The court therefore concluded that Sylvania's coating satisfied the oxide coating claim requirement and granted partial summary judgment to Durel. Id.

Finally, the court dismissed Sylvania's counterclaim for declaratory judgment of invalidity for lack of enablement under 35 U.S.C. 112, ¶ 1, concluding that Sylvania had not proven by clear and convincing evidence that Durel's patents were nonenabling. Id. at 1435. The court stated that "the only question at issue in this proceeding is whether Durel's patents fail to enable without undue experimentation a trimethyl aluminum precursor ("TMA") and alumina coating as used by [Sylvania]." Id. at 1432. The court then granted partial summary judgment to Durel, holding that the patents were enabled because it found that undue experimentation was not required to make an alumina-coated EL-type phosphor from the known TMA precursor. Id. at 1435. Because "the only precursor and coating at issue in this case is TMA and alumina," the court did not follow through with its observation that "it is apparent that some of the precursors or coating material suggested by Durel would require undue experimentation." Id.

Sylvania then began manufacturing NE-type phosphors, which are produced by pyrolysis, and moved for summary judgment of noninfringement with respect to those phosphors, arguing that claim 1 of the '062 patent is limited to phosphors produced by hydrolysis. The court declined to construe the claim as being limited to hydrolysis and denied Sylvania's motion. Durel Corp. v. Osram Sylvania Inc., No. 95-1750 (D. Ariz. Feb. 12, 1999) (order). Sylvania stipulated to infringement based on the court's claim construction and a trial was held on damages and willfulness. The jury returned a damages verdict of almost $50 million but declined to find that the infringement was willful.

DISCUSSION

A determination of infringement requires a two-step analysis. Gentry Gallery, Inc. v. Berkline Corp., 134 F.3d 1473, 1476, 45 USPQ2d 1498, 1500 (Fed. Cir. 1998). "First, the claim must be properly construed to determine its scope and meaning. Second, the claim as properly construed must be compared to the accused device or process." Id. "Literal infringement requires that every limitation of the patent claim be found in the accused device." Gen. Mills, Inc. v. Hunt-Wesson, Inc., 103 F.3d 978, 981, 41 USPQ2d 1440, 1445 (Fed. Cir. 1997). Claim construction is an issue of law, Markman v. Westview Instruments, Inc., 52 F.3d 967, 970-71, 34 USPQ2d 1321, 1322 (Fed. Cir. 1995) (en banc), aff'd, 517 U.S. 370 (1996), that we review de novo, Cybor Corp. v. FAS Techs., Inc., 138 F.3d 1448, 1456, 46 USPQ2d 1169, 1172 (Fed. Cir. 1998) (en banc). Whether a claim encompasses an accused device, either literally or under the doctrine of equivalents, is an issue of fact that, following a...