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Court Vacates Infringement Judgment for Almost $50 Million

June 27, 2001

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Last Month at the Federal Circuit - July 2001

Judges: Lourie (author), Plager, and Gajarsa

In Durel Corp. v. Osram Sylvania Inc., No. 00- 1261 (Fed. Cir. June 27, 2001), the Federal Circuit reversed the district court’s partial SJ of infringement and vacated its partial SJ dismissing a counterclaim of invalidity based on lack of enablement.

Durel Corporation (“Durel”) is the exclusive licensee of U.S. Patent No. 5,418,062 (“the ‘062 patent”), which is directed to encapsulated electroluminescent phosphor particles, each of which is encapsulated within a metal-oxide coating. Such particles are useful for illuminating watch faces and instrument panels in motor vehicles. Durel sued Osram Sylvania Inc. (“Sylvania”) for infringement of the ‘062 patent. Sylvania filed a counterclaim for a DJ of invalidity based on lack of enablement.

The issue of infringement hinged on the definition of “oxide coating.” The district court had construed this term to mean a coating primarily composed of metal cations and oxygen, but also possibly containing other elements or compounds, such as hydrogen.

Sylvania’s electroluminescent phosphor particles were coated with a mixture of aluminum oxide hydroxide, AlO(OH), and aluminum trihydroxide, Al(OH)3. The district court had concluded that since the amount of hydrogen in Sylvania’s coating was minor relative to the amount of metal cations and oxygen in the coating, the coating satisfied the oxide coating claim requirement. Therefore, the district court granted partial SJ of infringement to Durel.

On appeal, Sylvania argued that the district court had erred in its construction of the term “oxide coating,” urging that the definition in the specification requires that the coating be primarily composed of metal oxides, which are binary compounds. Durel countered that the district court had correctly adopted the definition set forth in the specification, which includes metal cations, oxygen, and minor amounts of other elements, such as hydrogen.

The Federal Circuit agreed with Sylvania. In reviewing the specification of the ‘062 patent, the Federal Circuit concluded that the claimed oxide coating must comprise primarily binary metal oxides containing only metal cations and oxygen.

Durel acknowledged that the coatings on Sylvania’s accused infringing products are mixtures of AlO(OH) and Al(OH)3. Since these accused hydroxide coatings do not meet the definition of the claim limitation “oxide coating,” the Federal Circuit reversed the district court’s grant of partial SJ of infringement. Although infringement under the DOE had not been considered at the district court, the Federal Circuit ruled that as a matter of law there could be no infringement under the DOE because the “oxide coating” limitation would be vitiated by such a holding.

Turning to the DJ counterclaim of invalidity based on lack of enablement, the district court had held that the issue was whether Durel’s patents enabled Sylvania’s accused infringing coatings. The Federal Circuit found this to be an error of law. According to the Court, the dispositive question of enablement does not turn on whether the accused infringing product is enabled, but rather on whether the patent specification would have enabled one of ordinary skill in the art to make and use the full scope of the claimed invention without undue experimentation. However, because the district court only had considered whether Durel’s patents enabled Sylvania’s accused infringing coating, the Federal Circuit held there were insufficient bases in the record to consider whether Durel’s patents were invalid for lack of enablement. Accordingly, the Federal Circuit vacated the district court’s partial SJ that the patent was not invalid.