BASF Plant Sci., LP v. Commonwealth Scientific & Indus. Research Organisation

• Decision Date: 15 March 2022
• Docket Number: 2020-1415, 2020-1416, 2020-1919, 2020-1920
• Citation: 28 F.4th 1247
• Parties: BASF PLANT SCIENCE, LP, Plaintiff-Appellant v. COMMONWEALTH SCIENTIFIC AND INDUSTRIAL RESEARCH ORGANISATION, Defendant-Cross-Appellant Commonwealth Scientific and Industrial Research Organisation, Grains Research and Development Corporation, Nuseed Pty Ltd., Plaintiffs-Counterclaimants-Cross-Appellants v. BASF Plant Science, LP, Cargill, Inc., Defendants-Counterdefendants-Appellants BASF Plant Science GmbH, Counter-Counterclaimant-Appellant
• Court: U.S. Court of Appeals — Federal Circuit

28 F.4th 1247

BASF PLANT SCIENCE, LP, Plaintiff-Appellant

v.COMMONWEALTH SCIENTIFIC AND INDUSTRIAL RESEARCH ORGANISATION, Defendant-Cross-Appellant

Commonwealth Scientific and Industrial Research Organisation, Grains Research and Development Corporation, Nuseed Pty Ltd., Plaintiffs-Counterclaimants-Cross-Appellants

v.BASF Plant Science, LP, Cargill, Inc., Defendants-Counterdefendants-Appellants

BASF Plant Science GmbH, Counter-Counterclaimant-Appellant

2020-1415, 2020-1416, 2020-1919, 2020-1920

United States Court of Appeals, Federal Circuit.

Decided: March 15, 2022

Catherine Emily Stetson, Hogan Lovells US LLP, Washington, DC, argued for BASF Plant Science, LP, BASF Plant Science GmbH. Also represented by Anna Kurian Shaw ; Nitya Anand, Jason Albert Leonard, New York, NY; N. Thomas Connally, III, Tysons, VA.

William M. Jay, Goodwin Procter LLP, Washington, DC, argued for Commonwealth Scientific and Industrial Research Organisation, Grains Research and Development Corporation, Nuseed Pty Ltd. Also represented by Jordan Bock, Alexandra Lu, Andrew S. McDonough, David Zimmer, Boston, MA; Alexandra D. Valenti, New York, NY. Commonwealth Scientific and Industrial Research Organisation also represented by Michael Ng, Daniel Amon Zaheer, Kobre & Kim LLP, San Francisco, CA.

Ahmed Jamal Davis, Fish & Richardson PC, Washington, DC, argued for Cargill, Inc. Also represented by Daniel Gopenko ; Christopher Robert Dillon, Boston, MA; Elizabeth M. Flanagan, Minneapolis, MN.

Before Newman, Taranto, and Chen, Circuit Judges.

Opinion dissenting in part filed by Circuit Judge Newman.

Taranto, Circuit Judge.

Commonwealth Scientific and Industrial Research Organisation (CSIRO), a research arm of the Australian government, owns six U.S. patents that are at issue before us. The parties treat four patents under the name "Group A": Nos. 9,926,579; 9,951,357; 9,970,033; and 9,994,880. They treat separately the two other patents at issue, Nos. 9,994,792 and 9,932,541 (once part of "Group B" and "Group D," respectively). The claims concern the engineering of plants, particularly canola, to produce specified oils not native to the plants. CSIRO has worked with Nuseed Pty Ltd. and Grains Research and Development Corporation to commercialize its inventions.

In 2017, BASF Plant Science, LP (BASF) sued CSIRO, Nuseed, and Grains Research in the Eastern District of Virginia, seeking a declaratory judgment limited to certain CSIRO patents other than the six now at issue. In 2018, after BASF amended its complaint to name only CSIRO, CSIRO filed an answer (for itself) along with counterclaims (for itself, Nuseed, and Grains Research) asserting infringement of the six patents now at issue and adding Cargill, Inc. (BASF's commercialization partner) as a counterclaim defendant. In 2019, BASF Plant Science GmbH entered as a party (hereinafter included within "BASF"), and BASF asserted, as an infringement defense, that it co-owned the asserted patents by virtue of a 2008 contract between it and CSIRO. Cargill soon sought dismissal of the counterclaims against it for lack of personal jurisdiction and improper venue in the Eastern District of Virginia, but the district court denied its motions. BASF Plant Science, LP v. Commonwealth Scientific & Industrial Research Organisation [hereinafter BASF v. CSIRO ], No. 2:17-cv-503, 2019 WL 2017541, at *2–5 (E.D. Va. May 7, 2019) ( Venue Opinion ).

With the array of parties set, the case proceeded to trial on eight claims of the six patents at issue now, with the trial bifurcated into liability and remedy phases. Putting aside the co-ownership defense, the parties stipulated to infringement of the asserted claims of five of the patents, and the jury found infringement of the asserted claim of the sixth (the '541 patent). J.A. 24. The jury also rejected the invalidity challenges, including the challenge that the six asserted Group A patent claims lacked adequate written-description support. J.A. 25–26. As to the co-ownership defense to infringement, the jury found that BASF co-owned the '792 patent (precluding infringement of that patent) but not the other patents. J.A. 27. Willfulness was not decided by the jury, the district court having ruled that the evidence would not support a finding of willfulness. BASF v. CSIRO , No. 2:17-cv-503, 2020 WL 973751, at *10–11 (E.D. Va. Feb. 7, 2020) ( Pre-Verdict Motions Opinion ). For the remedy phase, a jury was convened to assess past damages, but it was discharged following an evidentiary ruling concerning a proffer by CSIRO. J.A. 10568–89. After a bench trial concerning remedies, the district court denied a conduct-stopping injunction but granted an ongoing royalty on all five patents found infringed.

BASF v. CSIRO , No. 2:17-cv-503, 2019 WL 8108116, at *16, *21, *27 (E.D. Va. Dec. 23, 2019) ( Remedies Opinion ).

BASF and Cargill (for simplicity, "Appellants"), on one side, and CSIRO and its commercialization partners ("Cross-Appellants"), on the other, now appeal. Appellants together appeal the jury's verdicts of (1) adequate written description of the asserted Group A patent claims and (2) no BASF co-ownership of the five patents other than the '792 patent. Cargill appeals the district court's determination that venue was proper for Cargill. On the other side, Cross-Appellants appeal the jury's verdict that BASF co-owned the '792 patent. They also appeal several rulings by the district court that limited the remedy granted: (1) the refusal to submit willfulness to the jury; (2) a ruling on an issue about Cross-Appellants' past-damages evidence that led the court to give no damages issue to the jury; (3) the denial of an infringement-stopping injunction, with the prospective remedy limited to an ongoing royalty; and (4) the calculation of that royalty.

We hold as follows. First, we affirm the district court's determination that venue as to Cargill was proper in the Eastern District of Virginia. Second, regarding the jury's verdict rejecting the written-description challenge to the asserted Group A patent claims, we affirm as to the claims that are limited to canola plants (the only ones either side meaningfully discusses), but we reverse as to the broader genus claims. Third, we affirm the jury's verdict that five patents were not co-owned by BASF but reverse the contrary verdict as to the sixth, with the result that infringement of all valid claims of the six patents at issue is now settled. Finally, on the remedy issues, we affirm the district court's refusal to submit willfulness to the jury and its decision on the evidentiary issue concerning past damages. But we remand for reconsideration of the remedy, while leaving the current remedy in place pending such reconsideration.

I

A

Certain facts that we accept in the current posture of the case supply background to the legal disputes before us. Omega-3 long-chain polyunsaturated fatty acids (LCPUFAs)—specifically, eicosapentaenoic acid (EPA) and docosahexaenoic acid (DHA)—can be beneficial to human health. See, e.g. , '579 patent, col. 1, lines 59–61, col. 2, lines 5–25. The main source of LC-PUFAs in the human diet has traditionally been certain fish, such as salmon and mackerel, that in the wild ingest LC-PUFAs in their natural diet. Id. , col. 2, lines 5–10; J.A. 8467–70. When farm-raised, however, those fish must be fed supplements to acquire LC-PUFAs. J.A. 8477. Other oily fish caught in the wild can provide the LC-PUFA-rich oil for the supplements, but the supply of such fish was seen as undesirably low and volatile. J.A. 8477–81. The aquafeed industry therefore began exploring genetic modification of familiar oilseed crop plants, such as canola (also known as Brassica napus or rapeseed), to get them to produce LC-PUFA-rich oil that could be fed to farm-raised fish. J.A. 8481–83; '579 patent, col. 2, lines 32–35; Remedies Opinion , 2019 WL 8108116, at *1 n.2. Around 2000, both CSIRO and BASF were pursuing that goal.

CSIRO was working toward getting land plants to use a ?6-desaturase pathway for that purpose, which required inserting a series of genes drawn from other organisms (like microalgae or yeast) to encode enzymes (certain elongases and desaturases) not native to land plants. J.A. 8568–75; J.A. 8595. The theory was that introducing ?6-desaturase pathway enzymes would allow the plants to transform a short -chain fatty acid they already could make (alpha-linolenic acid or ALA) into the desired long -chain PUFAs: EPA and DHA. See J.A. 8593–94. CSIRO achieved the production of LC-PUFAs in a laboratory oilseed plant called Arabidopsis , J.A. 8602–08; J.A. 8963–82, and in 2004 it began filing provisional patent applications on the so-called "blueprint," i.e. , the series of genes that encode enzymes for each step in the ?6-desaturase pathway, see J.A. 11107–337; J.A. 11608–92. CSIRO did not immediately implement the blueprint in canola plants; instead, according to its trial evidence, CSIRO kept working with the laboratory-friendly plants to explore implementation choices relevant to producing the oil in quantities needed for ultimate commercialization. See, e.g. , J.A. 9830–40; J.A. 9979–81.

BASF was also researching the ?6-desaturase pathway in land plants. By 2002, BASF produced EPA in Arabidopsis , tobacco, and linseed (a crop plant also known as flax), and it did the same for DHA in Brassica juncea (another crop plant, closely related to canola) by 2004. J.A. 9283–85. By 2006, BASF had decided to pursue producing LCPUFAs in canola. J.A. 9504–05. Before 2007, BASF had made public several of the genes it was using. See, e.g. , J.A. 12687–92; J.A. 12607–14.

By 2007, CSIRO and BASF were discussing a focused collaboration, which they began the next year. Although both CSIRO and BASF were working on a ?6-desaturase pathway in canola, they were using (and had commercial rights to) different genes. For example, CSIRO was using a gene from Pavlova salina to code for the ?5-desaturase enzyme of the pathway, while BASF was using...