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Intrinsic Evidence Prevents Collateral Estoppel on Claim Construction

March 30, 2004

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Last Month at the Federal Circuit - April 2004

Judges: Bryson (author), Newman, and Prost

In Monsanto Co. v. Bayer Bioscience N.V., No. 03- 1201 (Fed. Cir. Mar. 30, 2004), the Federal Circuit reversed rulings of SJ against the patent holder based upon inequitable conduct, collateral estoppel, and noninfringement.

Aventis CropScience N.V. (“Aventis”), a predecessor of Bayer Bioscience N.V. (“Bayer”), owned four patents-in-suit that claim a variety of methods and products relating to the insertion of bacterial DNA into plants to impart resistance to certain insects. Monsanto Company (“Monsanto”) filed a DJ proceeding alleging that the four patents were unenforceable and that various claims of the patents were invalid. Aventis counterclaimed, alleging that Monsanto infringed each of the four patents. Monsanto then filed SJ motions requesting that the four patents-in-suit be held unenforceable, invalid, and not infringed. The district court granted the motions.

On the issue of inequitable conduct, the district court concluded that Aventis had filed a false declaration concerning certain tests with the PTO during prosecution of one of the patents. At the district court, the Declarant filed an affidavit explaining the nature of certain test results and their relationship to the conclusions set forth in the allegedly false declaration. The district court rejected the explanation provided in the affidavit. On appeal, the Federal Circuit concluded that a factual dispute about the truth of the PTO declaration existed that should not have been resolved on SJ. The Court also emphasized that the affiant’s assertion of no intent to deceive the PTO was based on his detailed explanation of his interpretation of the disputed test results, rather than a conclusory declaration of lack of intent to deceive. Thus, the Federal Circuit found this case satisfied the requirement described in Paragon Podiatry Laboratory, Inc. v. KLM Laboratories, Inc., 984 F.2d 1182, 1191 (Fed. Cir. 1993), that the affiant who seeks to avoid SJ must at least state facts supporting a plausible justification or excuse for the misrepresentation.

In considering the collateral-estoppel effect of certain claim constructions, the Federal Circuit found it improper for the district court to apply the construction from a previously litigated case without examining the intrinsic evidence specific to the patents in the current suit. In the previously litigated case, Plant Genetic Systems, N.V. v. DeKalb Genetics Corp., 175 F. Supp. 2d 246 (D. Conn. 2001), aff’d, 315 F.3d 1335 (Fed. Cir. 2003), the district court held that the patent in that suit enabled the transformation (insertion of the “bar” gene, which would increase the plant’s resistance to certain herbicides) of dicotyledonous (“dicot”) plants but not monocotyledonous (“monocot”) plants. Accordingly, the Court in Plant Genetic Systems ruled that several of the asserted claims were not enabled and that the remainder had to be construed to be limited to dicots, and not to cover monocots such as corn.

Because Bayer’s predecessor had litigated and lost on the question whether corn could be genetically transformed by Agrobacterium as of 1987, the district court here found that Bayer could not argue that corn could be genetically transformed by that means as of 1986, the priority date for the patents at issue in this case. Based on that ruling, the district court held that Monsanto’s corn products did not infringe any of the asserted claims of U.S. Patent No. 5,254,799 (“the ‘799 patent”), one of the patents-in-suit.

Disagreeing, the Federal Circuit noted that the specifications in the instant case differ significantly from the specification of the patent at issue in the Plant Genetic Systems case. Because similar terms can have different meanings in different patents depending on the specifics of each patent, the claim construction requires consideration of the intrinsic evidence relating to the ‘799 patent, which was not at issue in the Plant Genetic Systems case. Citing passages of the ‘799 patent specification and referencing portions of the prosecution history, the Federal Circuit found that intrinsic evidence for the ‘799 patent supports a construction that encompasses monocots. Accordingly, a SJ finding of invalidity and noninfringement based upon the collateral-estoppel effect of Plant Genetic Systems was improper.

Finally, the Federal Circuit concluded that the district court had erred in its claim construction when it limited the term “Bt2” to a toxin derived from a particular source, and, therefore, SJ of noninfringement based on that claim construction was erroneous. The Federal Circuit disagreed that two figures of U.S. Patent No. 5,545,565 indicated that the “Bt2 toxin” was limited to proteins encoded by genes derived from the berliner 1715 strain. Rather, the Court concluded that the figures show that proteins expressed by genes from the berliner 1715 strain have the claimed structure, while proteins expressed by genes from other strains of Bt may have structures different from the “Bt2 toxin.” The Federal Circuit concluded that neither the specifications of the patents at issue nor their prosecution histories suggest that the term must be limited to a toxin derived from a particular source. The SJ finding of noninfringement was reversed.