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Supreme Court’s Decision in Nautilus Costs Dow Chemical Co. $30 Million in Unrelated Litigation

Posted on Sep 4, 2015 in Blog

Dow Chemical Company (“Dow”) sued NOVA Chemicals Inc. (“NOVA”) for infringement of the claims of two U.S. Patents (U.S. Pat. Nos. 5,847,053 and 6,111,023). The Delaware District Court found the claims to be infringed and not invalid. This decision was affirmed on appeal to the Federal Circuit, which held, inter alia, that the asserted claims were not indefinite. NOVA’s petition for certiorari was denied by the Supreme Court. Subsequently, the district court conducted a bench trial on the issue of supplemental damages, which it awarded in the amount of $30 Million. In The Dow Chem. Co. v. NOVA Chems. Corp. et al., No. 14-1431 (Fed. Cir. 2015), NOVA appealed the supplemental damages ruling to the Federal Circuit but did not ask the court to reopen its previous judgment as to infringement.

While the appeal was pending, the Supreme Court in Nautilus, Inc. v. Biosig Instruments, Inc., 134 S. Ct. 2120 (2014) overturned the indefiniteness standard of whether the claims were “amenable to construction” or “insolubly ambiguous” and announced the new standard:

[A] patent is invalid for indefiniteness if its claims, read in the light of the specification delineating the patent, and the prosecution history, fail to inform, with reasonable certainty, those skilled in the art about the scope of the invention.

Nautilus, 134 S. Ct. at 2124. The only issue before the Federal Circuit was whether the supplemental damages must be reversed if the claims are indefinite under Nautilus. The court answered in the affirmative, finding that: (a) claim preclusion does not apply to supplemental damages accrued after the filing of the complaint; and (b) an exception applies to the doctrine of law of the case or issue preclusion—“when governing law is changed by a later authoritative decision.” The Dow Chem. Co. v. NOVA Chems. Corp. et al., No. 14-1431, at 12 (Fed. Cir. 2015). Three conditions must be satisfied for the exception to be applied: (1) “the governing law must have been altered,” (2) “the decision sought to be reopened must have applied the old law,” (3) “the change in law must compel a different result under the facts of the particular case.” Id. at 14-15.

The Federal Circuit found that all three conditions were satisfied in this case. In particular, the claims were found indefinite under the new Nautilus standard because the patents failed to teach a person having ordinary skill in the art with “reasonable certainty” how to measure the claimed “slope of strain hardening coefficient.” The Court reversed the award to Dow of $30 Million in supplemental damages.

– by Pei-Ru Wey

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