Star Scientific, Inc. v. R.J. Reynolds Tobacco Co.

• Decision Date: 25 August 2008
• Docket Number: No. 2007-1448.,2007-1448.
• Citation: 537 F.3d 1357
• Parties: STAR SCIENTIFIC, INC., Plaintiff-Appellant, v. R.J. REYNOLDS TOBACCO COMPANY (a North Carolina Corporation) and R.J. Reynolds Tobacco Company (a New Jersey Corporation), Defendants-Appellees.
• Court: U.S. Court of Appeals — Federal Circuit

537 F.3d 1357

STAR SCIENTIFIC, INC., Plaintiff-Appellant, v. R.J. REYNOLDS TOBACCO COMPANY (a North Carolina Corporation) and R.J. Reynolds Tobacco Company (a New Jersey Corporation), Defendants-Appellees.

No. 2007-1448.

United States Court of Appeals, Federal Circuit.

August 25, 2008.

Carter G. Phillips, Sidley Austin LLP, of Washington, DC, argued for plaintiff-appellant. With him on the brief were Eric A. Shumsky and Peter S. Choi. Of counsel on the brief were Richard McMillan, Jr., Clifton S. Elgarten, Mark M. Supko, and Michael I. Coe, Crowell & Moring LLP, of Washington, DC.

Richard A. Kaplan, Brinks Hofer Gilson & Lione, of Chicago, Illinois, argued for defendants-appellees. With him on the brief were Jerold A. Jacover, Ralph J. Gabric, K. Shannon Mrksich, Cynthia A. Homan, and Julie L. Leichtman.

Before MICHEL, Chief Judge, SCHALL and DYK, Circuit Judges.

MICHEL, Chief Judge.

Plaintiff-Appellant Star Scientific, Inc. ("Star") appeals from a final judgment in favor of Defendants-Appellees R.J. Reynolds Tobacco Company (N.C.) and R.J. Reynolds Tobacco Company (N.J.) (collectively, "RJR"). The district court entered memoranda and orders: (1) holding, after a bench trial, that Star's U.S. Patent Nos. 6,202,649 ("the ′649 patent") and 6,425,401 ("the ′401 patent") are unenforceable due to inequitable conduct; and (2) granting summary judgment of invalidity of all asserted claims of the ′649 and ′401 patents due to indefiniteness. See Star Scientific, Inc. v. R.J. Reynolds Tobacco Co., No. 8:01-cv-1504, 2007 WL 1890709, slip op. at 46 (D.Md. June 26, 2007) ("Inequitable Conduct Order"); Star Scientific, Inc. v. R.J. Reynolds Tobacco Co., No. 8:01-cv-1504, slip op. at 12-14 (D. Md. June 22, 2007) ("Indefiniteness Order").

Because the district court's judgment as to inequitable conduct was based on factual findings that we deem clearly erroneous, we reverse the judgment of unenforceability of the ′649 and ′401 patents. We also reverse the grant of summary judgment as to indefiniteness because we conclude that the claim term at issue, "anaerobic condition," is not indefinite, and we remand for further proceedings on infringement and validity.

I. BACKGROUND

A. Tobacco Curing Technology

Fresh tobacco ("green tobacco") must be dried in a process called "curing" before it is suitable for consumption as cigarettes or other such products. Curing is done in curing "barns," and commercial tobacco companies like RJR cure their tobacco in bulk-curing barns in which substantial quantities of harvested tobacco are cured together in large stacks. Smaller operations may use the older and long-used technology of "stick barns" in which much smaller quantities of tobacco are cured.

Four major mechanisms of curing have been used in the United States:

(1) air curing, where the tobacco is air-dried without the application of heat;

(2) radiant heat indirect-fired curing ("radiant heat curing"), where fuel (typically oil) is burned and the hot exhaust gases are passed through pipes running through the barn such that the hot pipes radiate heat into the barn to dry the tobacco, but the exhaust gases are then expelled outside the barn;

(3) direct-fired curing, where fuel (typically propane) is burned and the hot exhaust gases themselves are blown directly into the barn to dry the tobacco; and

(4) forced air indirect-fired curing, where fuel is burned to heat clean air that is then blown into the barn to dry the tobacco, while the exhaust gases from the fuel burning are expelled outside the barn.

In the 1960s, the primary method used by American tobacco companies was radiant heat curing. By the 1970s, most companies switched to direct-fired curing, which was the predominant method used until at least the late 1990s.

Cured tobacco contains a number of hazardous chemicals, including carcinogens known as tobacco specific nitrosamines ("TSNAs"), which are not present in green tobacco. In the 1990s, researchers began to explore TSNA formation in tobacco and discovered links between TSNAs and direct-fired curing. As a result, some researchers began to investigate how curing methods could be altered to minimize TSNA formation.

B. The ′649 Patent

In August 1998, Jonnie Williams of Star engaged attorney Romulo Delmendo of Sughrue, Mion, Zinn, Macpeak & Seas ("the Sughrue firm") to prosecute a patent application on a tobacco curing process aimed at lowering TSNA levels. Williams, the inventor, believed that TSNAs were formed due to the presence of microbes on the tobacco leaves. According to this theory, ambient oxygen in the vicinity of the drying leaves is reduced during cure by the production of carbon dioxide as the green tobacco leaves degrade and by the oxygen-poor combustion gases blown in during direct-fired curing. The microbes thus must operate anaerobically and obtain oxygen through reduction-oxidation reactions involving nitrates also produced from leaf degradation. Those reactions produce nitrites, which in turn form TSNAs through further chemical reactions. Williams' method sought to prevent TSNA formation by lessening the drop in oxygen levels through control of airflow, humidity and temperature inside the curing barn, thereby reducing the microbes' need to resort to anaerobic processes.

As part of the preparation of Williams' patent application, Delmendo was sent a letter on August 28, 1998, by scientist and Star consultant Dr. Harold Burton ("the Burton letter"). Burton wrote to relate his recent observation that Chinese tobacco products contain very low TSNA levels. The Burton letter further stated:

Since China is a developing country, they are still use [sic] the old curing technology that was abandoned in the U.S. during the sixties. It seemed to me that the probable cause for the absence of TSNA was their use of the old [radiant heat] flue-curing techniques.

J.A. at A6237. Delmendo testified that although he was initially concerned about the information, he then spoke with Burton, analyzed the letter, and ultimately concluded that neither it nor its content was material to the contemplated patent application.

Delmendo filed with the United States Patent and Trademark Office ("PTO") a provisional patent application, Application Serial No. 60/100,372 ("the Provisional"), on behalf of Williams on September 15, 1998. The application disclosed that some nations, including China, still utilize radiant heat curing. J.A. at A5808-09. The disclosure also stated: "It has been determined that [the radiant heat] process as applied to tobacco grown in the United States yields tobacco products with high levels of TSNA." Id. at A5809. Williams testified that this statement was based on inferences he drew from information he received from Brown & Williamson, another tobacco company, indicating that Brazilian tobacco cured using radiant heat techniques resulted in TSNA levels of 2-3 ppm.

Shortly after the Provisional was filed, Williams received samples from two Virginia farms that still used radiant heat curing and forwarded them to Burton for measurements of TSNA content. The first, from the Jennings farm, contained 1.0-1.5 ppm TSNAs ("the Jennings data"). The second, from the Curran farm, contained 0.39 ppm ("the Curran data"). Unlike the Jennings data, however, the Curran data was derived from a partially-cured sample; the sample was partially-cured using radiant heat curing, but Williams' associate completed the cure using a microwave prior to Burton's tests.¹ Williams informed Delmendo of the Jennings data over the phone but never showed him the actual data in document form. He did not inform Delmendo of the Curran data. Delmendo testified that he and Williams considered the Jennings data to be relevant but not a significant concern because Williams' method produced a significantly greater reduction in TSNAs.²

On September 15, 1999, exactly one year after filing the Provisional, Delmendo filed Application Serial No. 09/397,018 ("the ′018 application") on behalf of Williams. The ′018 application's draft specification adopted most of the Provisional's disclosure but deleted the statement that radiant heat curing of U.S.-grown tobacco produced "high levels of TSNA." Instead, it stated:

In flue curing processes that utilize a heat exchanger capable of providing relatively low airflow through the curing barn, I have discovered that it is possible to somewhat reduce the TSNA levels by not venting combustive exhaust gases into the curing apparatus or barn. The preferred aspects of the present invention are premised on the discovery that other parameters, as identified above (e.g., airflow), can be adjusted to ensure the prevention or reduction of at least one TSNA regardless of the ambient conditions ′649 patent col.6 ll.22-30 (emphasis added). Delmendo testified that this new disclosure was based on his discussion of the Jennings data with Williams.

Shortly after the filing of the ′018 application, Williams and Star elected to terminate the Sughrue attorneys' involvement in the prosecution and replace them with attorneys from Banner & Witcoff ("the Banner firm"), including Paul Rivard and Dale Hoscheit. Hoscheit testified that he met with Delmendo and others from the Sughrue firm to discuss the transfer of files and the status of pending applications. Paul Perito, a partner of the law firm Paul, Hastings, Janofsky & Walker ("Paul Hastings") who became the chairman of Star, tapped Scott Flicker from Paul Hastings to facilitate the transfer of files from the Sughrue firm to the Banner firm. Upon receiving the files, Rivard searched them for prior art but did not notice the Burton letter.

On February 15, 2000, Rivard filed a Petition to Make Special regarding the ′018 application, including an Information Disclosure Statement ("IDS") discussing and distinguishing certain prior art. The IDS did not include the Burton letter. The Petition was ultimately granted, and the application was allowed on September 14,...