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Broad Range in Prior Art Anticipates Narrow Range in Claims

February 17, 2012

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Last Month at the Federal Circuit - March 2012

Judges: Prost, Schall, Moore (author)

[Appealed from: E.D. Tex., Judge Davis]

In ClearValue, Inc. v. Pearl River Polymers, Inc., Nos. 11-1078, -1100 (Fed. Cir. Feb. 17, 2012), the Federal Circuit reversed the district court’s denial of ClearValue, Inc. and Richard Alan Haase’s (collectively “ClearValue”) motion for JMOL that the patent-in-suit was anticipated by the prior art. The Court also affirmed the district court’s grant of JMOL that Pearl River Polymers, Inc., Polychemie, Inc., SNF, Inc., Polydyne, Inc., and SNF Holding Company (collectively “Pearl River”) did not misappropriate ClearValue’s trade secret.

U.S. Patent No. 6,120,690 (“the ’690 patent”) is directed to a process for clarifying water with alkalinity below 50 ppm using a combination of a high-molecular-weight polymer and an aluminum polymer. ClearValue alleged that Pearl River indirectly infringed the ’690 patent by selling high-molecular-weight polymers, which customers used with aluminum polymers to clarify low alkalinity water. ClearValue also alleged that Pearl River misappropriated a trade secret covering a water-clarification process like that of claim 1.

Pearl River argued that a prior patent, the Hassick reference, anticipated the ’690 patent because it taught the use of a blend of a high-molecular-weight polymer and an aluminum polymer to clarify water with alkalinity less than 150 ppm. Hassick included examples, including one with water alkalinity of 60-70 ppm.

The jury found Pearl River liable for induced and contributory infringement, and the district court denied Pearl River’s motions for JMOL of noninfringement and invalidity. The jury also found that Pearl River misappropriated ClearValue’s Trade Secret #1. The district court, however, granted Pearl River’s motion for JMOL of no trade secret misappropriation, finding that the prior art disclosed every element of the trade secret before any alleged misappropriation by Pearl River.

On appeal of the invalidity issue, ClearValue first argued that Pearl River waived its invalidity defense by including them in its motion under Fed. R. Civ. P. 50(b), but not in its motion under Fed. R. Civ. P. 50(a). Following Fifth Circuit law, the Federal Circuit held that Pearl River was not barred from presenting its invalidity arguments because ClearValue did not raise waiver in opposing Pearl River’s Rule 50(b) motion. Moreover, the Federal Circuit determined that the district court erred in holding that substantial evidence supported the jury’s verdict of no anticipation.

First, the Court found that the district court erred in relying on the ClearValue expert’s testimony that the Hassick reference taught away from the ’690 patent. The Court noted that teaching away would be relevant to an obviousness determination, but is irrelevant to anticipation.

Next, the Court considered whether the Hassick disclosure’s broad range of alkalinity (150 ppm or less) anticipated the 50 ppm limitation of claim 1. ClearValue argued that the Court’s decision in Atofina v. Great Lakes Chemical Corp., 441 F.3d 991 (Fed. Cir. 2006), supported its validity argument. In Atofina, the Federal Circuit held that the prior art’s broad temperature range of 100-500ºC did not anticipate the narrow range of 330-450ºC in the claims. In that case, the facts supported that a person skilled in the relevant art would understand that the range described in the claims was “critical” to the chemical reaction.

The Court contrasted this case against Atofina. ClearValue did not argue that its claimed range was “critical” or that the method worked differently at different alkalinity points. Therefore, the Court found that the disclosed genus anticipated the claimed species. Because Hassick taught and enabled each and every element of claim 1, the jury lacked substantial evidence to find the claim not anticipated by Hassick. The Court reversed the district court’s denial of JMOL of no anticipation and did not need to consider Pearl River’s other invalidity arguments or noninfringement claim.

For ClearValue’s claim of trade secret misappropriation, the Federal Circuit agreed with the district court that the Hassick reference publicly disclosed ClearValue’s trade secret before ClearValue allegedly communicated it to Pearl River. The Court rejected ClearValue’s argument that Hassick did not disclose its trade secret because it did not teach that the combination is effective at clarifying low alkalinity water. The Federal Circuit, however, found that the alleged trade secret contained no effectiveness requirement. Thus, the Court found that the jury’s verdict of trade secret misappropriation was not supported by substantial evidence.

Summary authored by Lillian M. Robinson , law clerk at Finnegan.