Dow Chem. Co. v. NOVA Chems. Corp.

• Decision Date: 28 August 2015
• Docket Number: 2014–1462.,Nos. 2014–1431,s. 2014–1431
• Citation: 803 F.3d 620,115 U.S.P.Q.2d 2024
• Parties: The DOW CHEMICAL COMPANY, Plaintiff–Cross–Appellant v. NOVA CHEMICALS CORPORATION (CANADA), Nova Chemicals Inc. (Delaware), Defendants–Appellants.
• Court: U.S. Court of Appeals — Federal Circuit

803 F.3d 620

115 U.S.P.Q.2d 2024

The DOW CHEMICAL COMPANY, Plaintiff–Cross–Appellant

v.NOVA CHEMICALS CORPORATION (CANADA), Nova Chemicals Inc. (Delaware), Defendants–Appellants.

Nos. 2014–1431

2014–1462.

United States Court of Appeals, Federal Circuit.

Aug. 28, 2015.

Harry J. Roper, Jenner & Block LLP, Chicago, IL, argued for plaintiff-cross-appellant. Also represented by, Aaron A. Barlow, Paul David Margolis ; Raymond N. Nimrod, Gregory D. Bonifield, William Adams, Cleland B. Welton, II, Quinn Emanuel Urquhart & Sullivan, LLP, New York, N.Y.

Donald Robert Dunner, Finnegan, Henderson, Farabow, Garrett & Dunner, LLP, Washington, DC, argued for defendants-appellants. Also represented by Mark J. Feldstein, Ronald Bleeker, Darrel Christopher Karl.

Before PROST, Chief Judge, DYK and WALLACH, Circuit Judges.

Opinion

DYK, Circuit Judge.

The Dow Chemical Company (“Dow”) filed suit against NOVA Chemicals Corporation (Canada) and NOVA Chemicals Inc. (Delaware) (collectively, “NOVA”), alleging infringement of claims of U.S. Patent No. 5,847,053 (the “'053 patent”) and U.S. Patent No. 6,111,023 (the “'023 patent”). A jury found the asserted claims to be infringed and not invalid. NOVA appealed, and we affirmed, holding, inter alia, that the asserted claims were not indefinite. Our mandate issued, and NOVA's petition for certiorari was denied by the Supreme Court, Nova Chems. Corp. v. Dow Chem. Co., ––– U.S. ––––, 133 S.Ct. 544, 184 L.Ed.2d 340 (2012). The district court subsequently conducted a bench trial for the supplemental damages period through the expiration date of both patents. The district court granted supplemental damages in the form of lost profits and reasonable royalties and denied Dow's request for enhanced damages. NOVA appealed, and Dow cross-appealed.

Subsequently, the Supreme Court decided Nautilus, Inc. v. Biosig Instruments, Inc., ––– U.S. ––––, 134 S.Ct. 2120, 189 L.Ed.2d 37 (2014), altering the standard for indefiniteness. We consider here only whether, under Nautilus, the supplemental damages award must be reversed because the claims are indefinite. NOVA does not request that we reopen our previous judgment as to the infringement trial.¹

We hold that the intervening change in the law of indefiniteness resulting from Nautilus provides an exception to the doctrine of law of the case or issue preclusion. In our review of the supplemental damages award, we therefore evaluate the indefiniteness of the claims under the Nautilus standard. In reviewing the supplemental damages award under the Nautilus standard, we hold that the claims are indefinite and reverse the award of supplemental damages.

Background

On October 21, 2005, Dow filed suit against NOVA, alleging infringement of claims of the '053 patent and the '023 patent. The asserted claims of both patents cover ethylene polymer compositions (a type of plastic) with, inter alia, improved modulus, yield strength, impact strength, and tear strength. These polymers can be made into films that can be down-gauged (made thinner) without losing strength. The claims at issue are independent claim 6² and dependent claims 7, 10, and 12 of the '053 patent ; and independent claim³ and dependent claims 2, 5, and 8 of the '023 patent. Both patents expired on October 15, 2011.

Relevant here, claim 6 of the '053 patent and claim 1 of the '023 patent, the independent claims, require “a slope of strain hardening coefficient greater than or equal to 1.3.” '053 patent col. 16 ll. 19–20; '023 patent col. 16 ll. 29–30. NOVA argues that the patents are indefinite because they fail to teach a person having ordinary skill in the art how to measure the “slope of strain hardening,” which is required to calculate the strain hardening coefficient.

On June 15, 2010, a jury found that NOVA infringed the claims of the asserted patents and that the patents were not invalid for indefiniteness. The jury had been instructed that “[i]f the meaning of the claims is discernible, it is definite, even though the task may be formidable and even if the conclusion may be one over which reasonable persons will disagree.” J.A. 12702. NOVA appealed, arguing, inter alia, that the patents were invalid for indefiniteness. Dow Chem. Co. v. Nova Chems. Corp., 458 Fed.Appx. 910, 911, 917–18 (Fed.Cir.2012). In that previous appeal, on January 24, 2012, we held that the patents were not indefinite. Id. at 911, 920. In so holding, we applied the law as then established by our pre-Nautilus precedent, including Exxon Research & Engineering Co. v. United States, 265 F.3d 1371 (Fed.Cir.2001). See Dow, 458 Fed.Appx. at 917–20.

On remand, the district court, inter alia, held a bench trial on supplemental damages for the period between January 1, 2010, through October 15, 2011, the date on which the patents expired. On March 28, 2014, the district court granted supplemental damages to Dow in the form of lost profits and reasonable royalties and denied Dow's request for enhanced damages. Final judgment was entered on April 14, 2014. NOVA appealed on April 23, 2014. Dow cross-appealed on May 1, 2014.

While the appeals were pending, on June 2, 2014, the Supreme Court decided Nautilus. In Nautilus, the Supreme Court held that our standard for indefiniteness was contrary to 35 U.S.C § 112, and it announced a new standard described in detail below. See 134 S.Ct. at 2124. The Court abrogated our previous inquiry into whether the claims were “amenable to construction” or “insolubly ambiguous,” id., which we applied in cases such as Exxon, and relied on in the earlier appeal in this case, Dow, 458 Fed.Appx. at 917, 919–20. Under the new standard, “a patent is invalid for indefiniteness if its claims, read in light of the specification delineating the patent, and the prosecution history, fail to inform, with reasonable certainty, those skilled in the art about the scope of the invention.” Nautilus, 134 S.Ct. at 2124.

On appeal, NOVA argues that (1) the supplemental damages award should be vacated because the patents-in-suit are invalid for indefiniteness after the Supreme Court's decision in Nautilus or (2) in the alternative, the supplemental damages award was not supported by the evidence. In its cross-appeal, Dow contends that the district court erred by not awarding enhanced damages for the supplemental damages period.

We have jurisdiction pursuant to 28 U.S.C. § 1295(a)(1). 35 U.S.C. § 112 ¶ 2 provides that “[t]he specification shall conclude with one or more claims particularly pointing out and distinctly claiming the subject matter which the applicant regards as his invention.” 35 U.S.C. § 112 (2006). Indefiniteness is a question of law that this court reviews de novo. Teva Pharm. USA, Inc. v. Sandoz, Inc., 789 F.3d 1335, 1341 (Fed.Cir.2015).

We conclude that our prior decision is not binding on the issue of indefiniteness because Nautilus changed the applicable law, our prior decision rested on the earlier law, and the patents-in-suit are invalid for indefiniteness under the new Nautilus standard. We do not address the other issues. We reverse the district court's award of supplemental damages and dismiss the cross-appeal as moot.

Discussion

I

Dow argues that we are bound by our decision in the previous appeal—an appeal from a final judgment under Federal Rule of Civil Procedure 54(b) —that the claims were not indefinite. While a judgment entered under Rule 54(b) is a final judgment, that final judgment cannot have any greater effect than any other final judgment. The earlier appeal was from the entry of judgment in the jury verdict (for the period March 2002—December 31, 2009) while the current appeal is from the supplemental damages judgment (for the period January 1, 2010—October 15, 2011). An award of supplemental damages is designed to compensate the patentee “for periods of infringement not considered by the jury,” Whitserve, LLC v. Comput. Packages, Inc., 694 F.3d 10, 38 (Fed.Cir.2012) (emphasis added), and necessarily implicates patent validity. In order to prevail on a claim for supplemental damages, a patentee must establish infringement for the supplemental damages period. If “an act that would have been an infringement or an inducement to infringe pertains to a patent that is shown to be invalid, there is no patent to be infringed.” Commil USA, LLC v. Cisco Sys., Inc., ––– U.S. ––––, 135 S.Ct. 1920, 1929, 191 L.Ed.2d 883 (2015).

The doctrine of claim preclusion does not apply as between the claims for the first and second damages periods. It is well-established that, as to claims for continuing conduct after the complaint is filed, each period constitutes a separate claim.⁴ See 18 Charles Alan Wright, Arthur R. Miller & Edward H. Cooper, Federal Practice and Procedure § 4409 (2d ed. 2002) (“A substantially single course of activity may continue through the life of a first suit and beyond. The basic claim-preclusion result is clear: a new claim or cause of action is created as the conduct continues.”); Crowe v. Leeke, 550 F.2d 184, 187 (4th Cir.1977) (“We glean from the [ ] cases that res judicata [claim preclusion] has very little applicability to a fact situation involving a continuing series of acts, for generally each act gives rise to a new cause of action.”); Exhibitors Poster Exchange, Inc. v. Nat'l Screen Serv. Corp., 421 F.2d 1313, 1316, 1318–19 (5th Cir.1970) (res judicata [claim preclusion] does not apply where plaintiff alleges “same facts—[a] 1961 refusal to deal [as an antitrust violation]”—but sought in a second and third suit to recover damages suffered since losing on summary judgment in the first suit since the damages arose from “non actions” subsequently occurring).

This rule applies to patent infringement claims. As we explained just last year,

traditional notions of claim preclusion do not apply when a patentee accuses new acts of infringement, i.e., post-final judgment, in a second suit—even where the products are the same in both suits. Such claims are barred under general preclusion principles

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