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Federal Circuit Orders Star Scientific's Tobacco-Curing Patent Suit Against RJ Reynolds to Proceed
Star Scientific Inc. v. R.J. Reynolds Tobacco Co.
No. 2007-1448, U.S. Court of Appeals for the Federal Circuit, 08/25/2008
Companies Mentioned: R.J. Reynolds Tobacco Company, R.J. Reynolds Tobacco Company (N.J.), Star Scientific, Inc.
Holding
The U.S. Court of Appeals for the Federal Circuit ruled that an infringement suit filed by Star Scientific, Inc. ("Star") against R.J. Reynolds Tobacco Company over patents directed at tobacco-curing technology should proceed to trial. The U.S. District Court for the District of Maryland earlier issued a judgment of unenforceability due to inequitable conduct, on the ground that Star failed to disclose in its patent application a letter and related data indicating that Chinese tobacco had lower levels of carcinogenic chemicals. On appeal, the Federal Circuit reversed. Specifically, it held that R.J. Reynolds was unable to present sufficient evidence of an intent to deceive the U.S. Patent and Trademark Office ("USPTO"), and that the supposedly withheld information was not material enough to trigger a finding of inequitable conduct against patentee. With regard to the issue of indefiniteness, the district court held that the term "anaerobic condition" is indefinite and thus, since it appeared in every asserted independent claim, held that all asserted claims were invalid as indefinite. According to the Federal Circuit, however, because the claim term "anaerobic condition" was not indefinite, it reversed the grant of summary judgment to RJ Reynolds. On the basis of the foregoing, the Federal Circuit reversed the district court's judgment of inequitable conduct and indefiniteness against Star Scientific, and remanded the case for further proceedings consistent with its opinion.
Detailed Summary
Plaintiff-appellant Star appealed 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 ‘649 patent and ‘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. Opinion, pp. 1-2, citing Star Scientific, Inc. v. R.J. Reynolds Tobacco Co., No. 8:01-cv-1504, 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").
The patents at issue referred to a tobacco curing technology. Cured tobacco contains a number of hazardous chemicals, including carcinogens known as tobacco specific nitrosamines ("TSNAs"), which are not present in green tobacco. 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.
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 contained very low TSNA levels. Inequitable conduct issues revolved around this letter. Neither the letter nor a set of related data were ever disclosed to the USPTO.
The issues in this appeal were, given the data contained in this letter and other related data indicating that Chinese tobacco already had lower levels of nitrites, whether there was sufficient evidence of an intent to deceive the USPTO when plaintiff-appellants’ failed to disclose such letter and data; and whether the information contained in such letter and data was material enough to trigger a finding of inequitable conduct against plaintiffs-appellants. Id., p. 10.
To successfully prove inequitable conduct, the accused infringer must present “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 [USPTO].” Id., p. 11, citing Cargill, Inc. v. Canbra Foods, Ltd., 476 F.3d 1359, 1363 (Fed. Cir. 2007) (citing Impax Labs., Inc. v. Aventis Pharms. Inc., 468 F.3d 1366, 1374 (Fed. Cir. 2006). Further, at least a threshold level of each element—i.e., both materiality and intent to deceive—must be proven by clear and convincing evidence. Id.; Digital Control Inc. v. Charles Mach. Works, 437 F.3d 1309, 1313 (Fed. Cir. 2006).
With regard to the deceptive intent prong, the Federal Circuit has emphasized that “materiality does not presume intent, which is a separate and essential component of inequitable conduct.” Id., p. 12, citing GFI, Inc. v. Franklin Corp., 265 F.3d 1268, 1274 (Fed. Cir. 2001). Thus, the fact that information later found material was not disclosed cannot, by itself, satisfy the deceptive intent element of inequitable conduct. Id., p. 13, citing M. Eagles Tool Warehouse, Inc. v. Fisher Tooling Co., 439 F.3d 1335, 1340 (Fed. Cir. 2006).
Here, the district court’s finding of deceptive intent as to both patents-in-suit was based primarily on its acceptance of RJR’s theory that Williams and Star conspired to deliberately prevent Delmendo and his colleagues at the Sughrue firm from disclosing the Burton letter to the USPTO by replacing them with another law firm ("Banner firm") and purposely keeping the Banner firm ignorant of the Burton letter. The Federal Circuit held that this “quarantine” theory was not supported by clear and convincing evidence. As a result, the Federal Circuit found that the district court’s finding of deceptive intent with regard to the ‘649 patent was clearly erroneous. Id., p. 15.
Star’s witnesses testified that the reasons behind the replacement of the Sughrue firm were that a key partner passed away and that Williams observed a Sughrue attorney perform unsatisfactorily in an unrelated prosecution. The district court indicated that it viewed this testimony as not credible and that this credibility determination was a major basis for its finding of deceptive intent. Certainly, credibility determinations are an aspect of fact-finding that appellate courts should rarely reverse. But even if Star’s explanations are not to be believed, it remained RJR’s burden to prove its allegation regarding the reason for the Sughrue firm’s dismissal. RJR cannot carry its burden simply because Star failed to prove a credible alternative explanation. Id., p. 16, referring to M. Eagles Tool Warehouse, Inc. v. Fisher Tooling Co., 439 F.3d 1335, 1341 (Fed. Cir. 2006).
In reviewing the affirmative evidence, the Federal Circuit stated that RJR’s evidence had a major gap—RJR failed to elicit any testimony or submit any other evidence indicating that Star knew what the Burton letter said prior to replacing the Sughrue firm, or that the letter was a reason for changing firms. Id. RJR admitted at oral argument that it failed to even ask Williams or Star’s other executives about these critical facts, and RJR failed to identify any testimony or other evidence when specifically asked by the Federal Circuit to do so in supplemental briefing. Id.
But the district court also relied on additional evidence to find inequitable conduct as to the ‘401 patent. While the district court’s finding of deceptive intent even with regard to this additional evidence may be flawed in some respects, the Federal Circuit still reversed the holding of inequitable conduct as to the ‘401 patent because the district court’s finding of materiality was clearly erroneous. In particular, Star pointed to the disclosure of several references, including RJR’s interrogatory responses from this litigation and the language of the ‘401 patent’s specification. Id., p. 20. Thus, the specification points out that “somewhat reduce[d]” levels of TSNA were previously attainable. This alone may not render cumulative the Burton letter’s disclosure that low to undetectable levels of TSNA were previously unattainable, but another disclosure fills this gap. Id.
With regard to the district court’s ruling of indefiniteness, the district court held that the term “anaerobic condition” is indefinite and thus, since it appeared in every asserted independent claim, held that all asserted claims were invalid as indefinite .Id., p. 22, citing Indefiniteness Order, slip op. at 12-14. According to the Federal Circuit, however, because the claim term “anaerobic condition” was not indefinite, it had to reverse the grant of summary judgment to RJR. Id.
The requirement of claim definiteness is set forth in 35 U.S.C. § 112, ¶ 2, which requires claims “particularly pointing out and distinctly claiming the subject matter which the applicant regards as his invention.” Id., p. 22. The Federal Circuit has previously held that “[o]nly claims not amenable to construction or insolubly ambiguous are indefinite.” Id., citing Datamize, LLC v. Plumtree Software, Inc., 417 F.3d 1342, 1347 (Fed. Cir. 2005). A claim term is not indefinite just because “it poses a difficult issue of claim construction.” Id., citing Exxon Research & Eng’g Co. v. United States, 265 F.3d 1371, 1375 (Fed. Cir. 2001). Rather, the standard is whether “the claims [are] amenable to construction, however difficult that task may be.” Id. “By finding claims indefinite only if reasonable efforts at claim construction prove futile, we accord respect to the statutory presumption of patent validity . . . .” Id.
In this case, the “district court’s contrary conclusion was based on its misunderstanding that claim definiteness requires that a potential infringer be able to determine if a process infringes before practicing the claimed process. But we disclaimed any such approach in Invitrogen Corp. v. Biocrest Manufacturing, L.P., 424 F.3d 1374, 1384 (Fed. Cir. 2005). We explained that Stratagene, in making a similar argument, was “really talking about the difficulty of avoiding infringement, not indefiniteness of the claim.” Id. “The test for indefiniteness does not depend on a potential infringer’s ability to ascertain the nature of its own accused product to determine infringement, but instead on whether the claim delineates to a skilled artisan the bounds of the invention.” Id. (citing SmithKline Beecham Corp. v. Apotex Corp., 403 F.3d 1331, 1341 (Fed. Cir. 2005))… As construed by the district court, the term “anaerobic condition” clearly delineates the bounds of claim scope and thus is not indefinite. The district court’s grant of summary judgment of indefiniteness must therefore be reversed.” Id., p. 25.
On the basis of the foregoing, the Federal Circuit reversed the district court’s judgment of unenforceability of both asserted patents due to inequitable conduct. It also reversed the district court’s grant of summary judgment of invalidity of all asserted claims due to indefiniteness, and remanded for further proceedings on the infringement complaint consistent with its opinion.
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