Cargill, Inc. v. Canbra Foods, Ltd.
| Decision Date | 14 February 2007 |
| Docket Number | No. 2006-1265.,No. 2006-1302.,2006-1265.,2006-1302. |
| Citation | 476 F.3d 1359 |
| Parties | CARGILL, INCORPORATED, Plaintiff-Appellant, v. CANBRA FOODS, LTD., Dow Agrosciences, LLC, and Dow Agrosciences Canada, Inc., Defendants-Cross Appellants. |
| Court | U.S. Court of Appeals — Federal Circuit |
Allen M. Sokal, Finnegan, Henderson, Farabow, Garrett & Dunner, L.L.P., of Washington, DC, argued for plaintiff-appellant. With him on the brief was Jeffrey W. Abraham.
Harry J. Roper, Jenner & Block LLP, of Chicago, IL, argued for defendants-cross appellants. With him on the brief were George S. Bosy, Raymond N. Nimrod, Patrick L. Patras, and Steven McMahon Zeller. Of counsel was Marc Goldman, of Washington, DC. Of counsel on the brief were Guy A. Relford and Kenneth B. Ludwig, Dow AgroSciences LLC, of Indianapolis, IN.
Before LINN, PROST, and JORDAN,* Circuit Judges.
Plaintiff Cargill, Incorporated ("Cargill") appeals from a final judgment of the United States District Court for the District of Oregon concerning four patents owned by Cargill, namely U.S. Patents No. 5,969,169 (the "'169 patent"), No. 6,201,145 (the "'145 patent"), No. 6,270,828 (the "'828 patent"), and No. 6,680,396 (the "'396 patent"). Upon a motion for summary judgment by Canbra Foods, Ltd., Dow Agrosciences, LLC, and Dow Agrosciences Canada, Inc. (collectively, "Defendants"), the district court held that the '828 and '396 patents are invalid because of the on-sale bar set forth in 35 U.S.C. § 102(b). The court also granted Cargill's motion for summary judgment that Defendants had infringed the '169 and '145 patents. Following trial, however, the court entered judgment that the '169 and '145 patents are unenforceable due to inequitable conduct. Defendants cross-appeal the district court's claim construction with respect to all four patents, as well as its grant of summary judgment of infringement of the '169 and '145 patents.
For the reasons discussed below, we affirm the judgment of the district court with respect to invalidity and unenforceability, and, as a result, Defendants' cross-appeal is moot.
In the present action, Cargill alleged that Defendants infringed the '169, '145, '828, and '396 patents. The '169 and '145 patents relate to a non-hydrogenated canola oil that possesses superior oxidative stability and fry stability, and is useful for food applications. The claimed oil is referred to in the '169 and '145 patents by the designation "IMC 130." According to the patents, ordinary canola oil is unstable and easily oxidized during cooking, which creates an off-flavor in the food. It also develops an undesirable odor when being stored. Therefore, the superior stability of the IMC 130 oil makes that oil more acceptable for cooking and storage.
The oxidative stability of canola oil can be measured in at least two ways: in terms of AOM (Active Oxygen Method) hours, or in terms of peroxide and para-anisidine values.1 Generic commercial canola oil typically has an oxidative stability of about 22 AOM hours, whereas IMC 130 has an oxidative stability of about 35 to 40 AOM hours. Claim 1 of the '169 patent therefore recites:
A non-hydrogenated canola oil having a polyunsaturated fatty acid content of from about 7% to about 17%, an oleic acid content of about 74% to about 80% and an oxidative stability of from about 35 to about 40 AOM hours in the absence of added antioxidants.
The '145 patent recites the same oxidative stability range, 35 to 40 AOM hours, in dependent claim 2.
U.S. Patent Application No. 08/425,108 (the "'108 application"), which ultimately issued as the '169 patent, was initially rejected by the examiner as being anticipated by a European patent application by Wong et al. ("Wong"). The examiner's reasoning was that Wong disclosed a canola oil with a fatty acid composition similar to that of IMC 130. According to the examiner, oxidative stability is based directly on fatty acid composition, and therefore, both the oil disclosed in Wong and IMC 130 would exhibit a similar oxidative stability. In response, the applicant argued that the test data set forth in the specification refutes the examiner's position. The applicant contended that the data demonstrates that two canola oils with similar fatty acid compositions, the claimed IMC 130 oil and an oil designated as IMC 129, have strikingly different oxidative stability values. Thus, the applicant took the position that Wong could not be found to anticipate the claimed oil solely because it recites a canola oil with a similar fatty acid composition.
After several office actions and responses, the examiner allowed the claims and explained that:
IMC 129, which is one of the parent lines used to produce the instant oil [IMC 130], reads on the fatty acid content but as shown in the examples, does not display the required oxidative stability. As shown in the examples, one cannot predict the oxidative stability of an oil based on the fatty acid composition of the oil.
The '145 patent issued from a continuation of the '108 application, and has the same specification as the '169 patent.
The other two patents at issue, the '828 and '396 patents, relate to canola oil that has low glucosinolate content and low α-linolenic acid content. According to those patents, reducing the glucosinolate and α-linolenic acid content results in an oil with desirable properties, including low sulfur content, improved sensory characteristics, and greater oxidative stability. Claim 1 of the '828 patent recites:
A canola oil from Brassica seeds, said oil having an α-linolenic acid content of about 1.7% to about 7% relative to the total fatty acid content, and a sulfur content of less than or equal to 3.0 ppm as determined by high performance liquid chromatography.
The '396 patent is a continuation of the application that issued as the '828 patent. Both patents refer to the claimed oil by the designation "IMC 01."
As previously noted, the district court held on summary judgment that the '828 and '396 patents are invalid under the on-sale bar of 35 U.S.C. § 102(b), finding that the invention, IMC 01, was reduced to practice and the subject of a sale prior to the critical date. Also, on summary judgment, the court held that Defendants' product infringed claims 1, 6, and 7 of the '169 patent, and claims 5, 6, and 8 of the '145 patent. However, several issues relating to the '169 and '145 patents remained for trial, including validity, damages, and inequitable conduct. Following trial, the district court granted Defendants' motion for judgment that the '169 and '145 patents are unenforceable due to inequitable conduct. In reaching that decision, the court relied on two documents that contained the applicant's internal testing data but that were not disclosed to the examiner during prosecution. Cargill appeals the district court's decisions on invalidity and unenforceability. We have jurisdiction pursuant to 28 U.S.C. § 1295(a)(1).
Cargill appeals the district court's determination that the '169 and '145 patents are unenforceable because of inequitable conduct, and the decision that the '828 and '396 patents are invalid due to the on-sale bar. We address those contentions in turn.
To hold a patent unenforceable due to inequitable conduct, there must be clear and convincing evidence that the applicant (1) made an affirmative misrepresentation of material fact, failed to disclose material information, or submitted false material information, and (2) intended to deceive the U.S. Patent and Trademark Office ("PTO"). Impax Labs., Inc. v. Aventis Pharm. Inc., 468 F.3d 1366, 1374 (Fed. Cir.2006).
The materiality element of inequitable conduct was recently clarified in Digital Control Inc. v. Charles Machine Works, 437 F.3d 1309 (Fed.Cir.2006). In that decision, we explained that the standard for materiality set forth in the current version of PTO Rule 56, see 37 C.F.R. § 1.56(b) (2006), did not supplant the earlier "reasonable examiner" standard, see 37 C.F.R. § 1.56(a) (1991). Digital Control, 437 F.3d at 1316; see also Impax Labs., 468 F.3d at 1374. Rather, Digital Control, 437 F.3d at 1316. The present version of Rule 56 states that:
[I]nformation is material to patentability when it is not cumulative to information already of record or being made of record in the application, and
(1) It establishes, by itself or in combination with other information, a prima facie case of unpatentability of a claim, or
(2) It refutes, or is inconsistent with, a position the applicant takes in:
(i) Opposing an argument of unpatentability relied on by the Office, or
(ii) Asserting an argument of patentability.
A prima facie case of unpatentability is established when the information compels a conclusion that a claim is unpatentable under the preponderance of evidence, burden-of-proof standard, giving each term in the claim its broadest reasonable construction consistent with the specification, and before any consideration is given to evidence which may be submitted in an attempt to establish a contrary conclusion of patentability.
37 C.F.R. § 1.56(b) (2006). Under the earlier "reasonable examiner" standard, "information is material where there is a substantial likelihood that a reasonable examiner would consider it important in deciding whether to allow the application to issue as a patent." 37 C.F.R. § 1.56(a) (1991).
The intent element of inequitable conduct requires that "the involved conduct, viewed in light of all the evidence, including evidence indicative of good faith, must indicate sufficient culpability to require a finding of intent to deceive." Impax Labs., 468 F.3d at 1374-75 (quoting Kingsdown Med. Consultants, Ltd. v. Hollister Inc., 863 F.2d 867,...
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