Union Carbide Chemical & Plastic Tech v. Shell Oil

• Decision Date: 20 September 2002
• Docket Number: No. 02-1020.,No. 02-1001.,02-1001.,02-1020.
• Citation: 308 F.3d 1167
• Parties: UNION CARBIDE CHEMICALS & PLASTICS TECHNOLOGY CORPORATION and Union Carbide Corporation, Plaintiffs-Appellants, v. SHELL OIL COMPANY, Shell Chemical Company, and Cri Catalyst Company, Defendants-Appellees.
• Court: U.S. Court of Appeals — Federal Circuit

Page 1167

308 F.3d 1167

UNION CARBIDE CHEMICALS & PLASTICS TECHNOLOGY CORPORATION and Union Carbide Corporation, Plaintiffs-Appellants, v. SHELL OIL COMPANY, Shell Chemical Company, and Cri Catalyst Company, Defendants-Appellees.

No. 02-1001.

No. 02-1020.

United States Court of Appeals, Federal Circuit.

September 20, 2002.

Rehearing Denied November 1, 2002.

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Steven J. Glassman, Kaye Scholer LLP, of New York, NY, argued for plaintiffs-appellants. With him on the brief were Benjamin C. Hsing and Kimberly D. Branch.

William C. Slusser, Slusser & Frost, L.L.P., of Houston, TX, argued for defendants-cross appellants. With him on the brief were Claudia Wilson Frost, Jayme Partridge, and Laura Friedl Jones. Of counsel on the brief was John D. Norris, Howrey Simon Arnold & White, L.L.P., of Houston, TX.

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

PROST, Circuit Judge.

This is a patent infringement action in which Union Carbide Chemicals & Plastics Technology Corporation and Union Carbide Corporation (collectively "Union Carbide") brought suit against Shell Oil Company, Shell Chemical Company, and CRI Catalyst Company (collectively "Shell") for infringement of various claims of Union Carbide's U.S. Patents Nos. 4,916,243 ("the '243 patent"), 4,908,343 ("the '343 patent"), and 5,057,481 ("the '481 patent"). Union Carbide appeals from the final decision of the United States District Court for the District of Delaware upholding the jury's verdict of noninfringement of the three patents and denying Union Carbide's motion for a new trial. Union Carbide Chems. & Plastic Tech. Corp. v. Shell Oil Co., 163 F.Supp.2d 426, 464-65 (D.Del. 2001). Shell cross-appeals the district court's decision granting judgment as a matter of law (JMOL) in Union Carbide's favor on all of Shell's asserted invalidity defenses, denying Shell's motion for JMOL on the issue of Union Carbide's alleged inequitable conduct, and denying Shell's motion for attorney fees. Id. For the reasons set forth below, we affirm-in-part, reverse-in-part, and remand for further proceedings consistent with this opinion.

I. BACKGROUND

A. The Patents

Union Carbide is the assignee of the '243, the '343, and the '481 patents. These patents are directed to improved silver catalysts for the production of ethylene oxide. Id. at 429-30. Ethylene oxide is a chemical used to make substances such as polyester fiber, resin, and film, and it is created when ethylene reacts with oxygen. Id. at 430. This reaction yields three primary products: ethylene oxide, carbon dioxide, and water. Id. The latter two are undesirable byproducts, and for years scientists have sought to improve the efficiency of the reaction by producing more ethylene oxide and less carbon dioxide and water. Id. It is well known in the field that one can increase reaction efficiency by combining the ethylene and the oxygen in the presence of a silver catalyst. Id. This catalyst can itself be improved by the addition of other metals to the silver. Id. These additional metals are referred to as "promoters," and they act both to increase the efficiency of the reaction and to prolong the lifespan of the catalyst itself. Id.

Both parties refer to the '243 patent as the "synergy patent" and the '343 and the '481 patents as the "salt patents." Id. at 430-31. Claim 4 is the only claim of the synergy patent at issue. Id. Claim 4 depends from claim 1, which reads in pertinent part:

1. In the continuous process for the production of ethylene oxide ... in the presence of a supported, silver-containing catalyst in a fixed bed, tubular reactor used in commercial operations to form ethylene oxide ... the improvement in which the catalyst comprises silver deposited on an alpha-alumina macroporous support in a first amount having a surface area less than 10 m²/g and contains a combination of (a) cesium in a second amount and (b) at least one alkali metal ... in a third amount, which combination comprises (a) and (b) in amounts in relation to the amount of silver in the catalyst sufficient to provide an efficiency of ethylene oxide manufacture that is greater than the efficiencies obtainable in the same ethylene oxide production system, including the same conversions, than (i) a second catalyst containing silver in the first amount and cesium in the second amount, and (ii) a third catalyst containing silver in the first amount and the alkali metal in the third amount, wherein the combination of silver, cesium and alkali metal in said catalyst is characterizable by an efficiency equation:

NOTE: OPINION CONTAINING TABLE OR OTHER DATA THAT IS NOT VIEWABLE

where

BA₁ = BRb,

BA₂ = BK,

BA₃ = BNa,

BA₄ = Bl_i, and where the coefficient b₀ through b_9j and BG, BRb, BK, BNa, BLi and BCs are determined from a composite design set of experiments using the same ethylene oxide production system for the independent variables silver, cesium and alkali metal, and wherein BG is the difference of the average value of the silver content from the silver content used in the design set, BCs is the difference of the average value of the cesium content from the cesium content used in the design set, BRb is the difference of the average value of the rubidium content from the rubidium content used in the design set, BK

is the difference of the average value of the potassium content from the potassium content used in the design set, BNa is the difference of the average value of the sodium content from the sodium content used in the design set and BLi is the difference of the average value of the lithium content from the lithium content used in the design set '243 patent, col. 29, I. 53-col. 30, I. 54 (emphases added).

Claim 4, in turn, claims "[t]he process of claim 1 wherein said alkali metal is lithium." Id. at col. 30, ll. 60-61. In general terms, therefore, claim 4 is directed to a catalyst that contains a "synergistic" mixture of silver, cesium, and lithium, meaning that the combination of the three metals renders the catalyst more efficient than a comparable silver-cesium or silver-lithium catalyst would be. Id. at col. 1, ll. 32-33. Additionally, the claimed catalyst must be "characterizable by an efficiency equation" provided in the patent. It is the proper construction of this efficiency equation limitation that is at issue on appeal.

Like the '243 synergy patent, the '343 and the '481 salt patents are directed to silver catalysts for the manufacture of ethylene oxide.¹ Claim 1 of the '343 patent recites:

1. A catalyst for the manufacture of ethylene oxide by the epoxidation of ethylene containing an impregnated silver metal on an inert, refractory solid support and an efficiency-enhancing amount, relative to the amount of silver metal, of a mixture of (i) a cesium salt of an oxyanion of an element selected from Groups 3 through 7b inclusive, of the Periodic Table of the Elements, and (ii) at least one of an alkali metal salt of lithium, sodium, potassium and rubidium and an alkaline earth metal salt, in which the anions of such salts are halides of atomic numbers of 9 to 53, inclusive, and oxyanions of elements other than the oxygen therein having an atomic number of 7 or 15 to 83, inclusive, and selected from Groups 3a to 7a, inclusive, and 3b through 7b, inclusive, of the [P]eriodic Table of the Elements.

'343 patent, col. 32, l. 63-col. 33, l. 9 (emphases added). Similarly, claim 1 of the '481 patent recites:

1. A catalyst for the manufacture of ethylene oxide by the epoxidation of ethylene containing an impregnated silver metal on an inert, refractory solid support and an efficiency-enhancing amount, relative to the amount of silver metal of a mixture of cesium salts, at least one of which is a cesium salt in which the anion thereof is an oxyanion of an element having an atomic number of 21 to 75 and being from groups 3b through 7b, inclusive, of the Periodic Table of the Elements.

'481 patent, col. 27, ll. 48-56 (emphases added).

In general terms, therefore, both the '343 and the '481 salt patents claim a silver catalyst containing "an efficiency-enhancing amount ... of a mixture of [salts]." Whereas the '481 patent claims a mixture of cesium salts, however, the '343 patent claims a mixture of cesium, alkali metal, and alkali earth metal salts.²

Shell manufactures and sells ethylene oxide catalysts containing different combinations and amounts of metal promoters. Union Carbide, 163 F.Supp.2d at 434.

B. District Court Litigation

In April 1999, Shell brought suit against Union Carbide in the Southern District of Texas. Id. at 430. The following month, Union Carbide filed its own action against Shell in the District of Delaware, where the two cases were subsequently consolidated and tried. Id. In its complaint, Union Carbide alleged that six of Shell's silver catalysts infringe Union Carbide's synergy and salt patents. Id. Shell counterclaimed that the patents in suit are invalid and not infringed. Id.

Following a Markman, 517 U.S. 370, 116 S.Ct. 1384, 134 L.Ed.2d 577 hearing, the court construed the disputed term "characterizable by an efficiency equation" in claim 1 of the '243 patent to mean that "the synergistic combination of silver, cesium, and alkali metal in [the] catalyst is determined from the efficiency equation." Id. at 437 (emphasis added). In other words, the court construed the claim limitation to require that an infringer actually use the efficiency equation identified in the patent to develop its silver ethylene oxide catalysts. The court conceded that this construction departed from the plain meaning of "characterizable," but found that the '243 patent specification and prosecution history justified the departure. Id. at 436-37. The court noted that the patent examiner rejected Union Carbide's initial application, which lacked the efficiency equation, as obvious and indefinite. Id. at 436. In response to the...