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Whether Subject Matter Was Surrendered Is Determined by an Objective Observer

September 20, 2006

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Last Month at the Federal Circuit - October 2006

Judges: Schall (concurring-in-part, dissenting-in-part), Archer, Dyk (author)

[Appealed from: N.D. Ill., Judge Hart]

In Kim v. ConAgra Foods, Inc., Nos. 05-1414, -1420 (Fed. Cir. Sept. 20, 2006), the Federal Circuit affirmed the district court’s judgment of noninfringement of U.S. Patent No. Re. 36,355 (“the ’355 patent”) and that the ’355 patent is not invalid.

Yoon Ja Kim is the holder of the ’355 patent, which relates to breadmaking. The ’355 patent claims a combination of ascorbic acid and food acid that serves as an alternative to potassium bromate, which was widely used to improve the quality of bread but now is believed to be a carcinogen. Kim originally obtained U.S. Patent No. 5,510,129 for a potassium bromate replacer composition, but Kim surrendered the patent to the PTO and filed a reissue application, alleging that an error had arisen during prosecution. After prosecuting the reissue application, Kim obtained the ’355 patent in 1999.

In 2001, Kim filed suit against ConAgra Foods, Inc. (“ConAgra”) alleging that ConAgra induced infringement of independent claims 5 and 10 of the ’355 patent. Both claims were directed to “a potassium bromate replacer composition consisting essentially of” specific amounts of ascorbic acid and food acid and flour. Claim 10 differs from claim 5 in that it contains the additional limitation of yeast. Kim alleged that ConAgra required licensees of its Healthy Choice® brand name to use its recipes, and that the products infringed claims 5 and 10 of the ’355 patent. ConAgra stipulated that the recipes for the accused products used ascorbic acid and food acid in the claimed ranges. ConAgra filed a counterclaim for DJ of invalidity and noninfringement of the ’355 patent. ConAgra also moved for SJ of invalidity based on the recapture rule. The district court denied ConAgra’s motion, and the case went to trial.

During trial, after each party’s case-in-chief, the opposing party moved for JMOL, and the district court reserved ruling on both motions. The jury found that the asserted claims of the ’355 patent were not invalid; that ConAgra had induced infringement of claim 10 with the licensing of its Healthy Choice® 7-Grain and Whole Grain products, but that the inducement was not willful; and that claim 5 and the dependent claims were not infringed. ConAgra renewed its motion for JMOL, and the district court partially granted the motion, holding that claim 10 was not infringed. The district court entered final judgment, finding the ’355 patent not infringed and not invalid.

On appeal, the Federal Circuit first considered the district court’s claim construction and jury charge regarding the phrase “[a] potassium bromate replacer composition” in both claims 5 and 10 of the ’355 patent. The Court concluded that while the specification does not explicitly define the term “potassium bromate replacer,” it does make clear that the claimed potassium bromate replacer is an oxidizing agent. Accordingly, the Federal Circuit found no error in the district court’s construction of “potassium bromate replacer” as a composition that performs essentially the same function in the breadmaking process as potassium bromate, which is to strengthen dough, increase loaf volume, and contribute to fine crumb grain.

The Federal Circuit affirmed the district court’s finding that the accused products did not infringe. Because it was undisputed that the accused products included ascorbic acid, food acid, and yeast in the proportions claimed, the key question shifted to whether the claimed ingredients in the accused product satisfied the functionality limitations. The Court noted that Kim did not prove infringement as the testimony she presented was conclusory, unsupported by examinations or tests of the actual accused products, and based upon analogy; whereas, ConAgra presented evidence that different ingredients in its recipe affected functionality. Consequently, the Federal Circuit agreed with the district court’s decision to grant JMOL to ConAgra on claim 10 and the jury’s verdict of noninfringement of claim 5 for the same reasons.

The Federal Circuit also affirmed the district court’s denial of ConAgra’s motion for JMOL of invalidity based on the recapture doctrine. In reaching its decision, the Court focused on whether the broader aspects of the reissued claims relate to “surrendered” subject matter. The Court explained that “in determining whether ‘surrender’ of subject matter has occurred, the proper inquiry is whether an objective observer viewing the prosecution history would conclude that the purpose of the patentee’s amendment or argument was to overcome prior art and secure the patent.” Slip op. at 15. This ensures that the public can rely on a patentee’s admission during prosecution of the original patent.

With respect to ConAgra’s allegation that Kim surrendered a nonphosphate potassium bromate replacer composition, the Federal Circuit found that the prosecution history refutes ConAgra’s argument that phosphate was added by Kim to overcome a rejection. Rather, Kim overcame the obviousness rejection with other amendments, and there was no indication why Kim added the phosphate limitation at the same time. With respect to ConAgra’s allegation that Kim surrendered a potassium bromate replacer composition with a food acid range of 0.015-0.2 parts per 100 parts flour, the Court found that Kim’s reason for changing the range was not based on obviousness considerations and that the Examiner had not indicated that the original range was obvious in light of the prior art.

Finally, addressing claims of anticipation and obviousness, the Federal Circuit concluded that the jury verdict finding the claims not invalid was supported by substantial evidence. In accepting the verdict, the Court noted that the burden was on ConAgra to establish invalidity by clear and convincing evidence and they had failed to do so. The Court explained that ConAgra made virtually no effort to show that the asserted prior art disclosed the functions of potassium bromate. Moreover, there was substantial evidence that the prior art did not contain the claimed proportions of ascorbic and food acids. Thus, the prior art was not anticipatory nor did it render the ’355 patent obvious.

Judge Schall concurred-in-part and dissented-inpart. While he agreed with the majority’s opinion regarding recapture and invalidity issues, he disagreed with the majority’s construction of the term “potassium bromate replacer” in the ’355 patent. He believed that Kim acted as her own lexicographer in defining the term “potassium bromate replacer” as “a slow acting oxidant that is functional throughout the entire manufacturing process.” Accordingly, Judge Schall would have vacated the decision of the district court and remanded for an infringement analysis under this claim construction.