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1 September 2015Patents

Dow Chemical’s $30m award falls through Nautilus trapdoor

A US appeals court has reversed a decision to award $30 million in supplemental damages to The Dow Chemical Company after finding that its patents were invalid under a standard established by the US Supreme Court’s Nautilus v Biosig ruling.

On Friday, August 28, a three-judge panel at the US Court of Appeals for the Federal Circuit found that two patents asserted against Canada-based Nova Chemicals Corporation were invalid on the grounds that they were indefinite.

The decision reverses a 2014 decision by the US District Court for the District of Delaware to award Dow an extra $30 million in supplemental damages to account for lost profits.

Dow had already been awarded more than $60 million in a decision handed down in 2010. That sum is not affected by the latest ruling.

The dispute began in 2005.

Dow sued Nova for allegedly infringing two ethylene polymer composition patents. The patents cover the plastic material for speciality food packaging.

The district court ruled in favour of Dow and awarded almost $62 million in damages in 2010.

Nova appealed against the decision and argued that the patents were invalid because they were indefinite.

In a decision handed down in 2012, the federal circuit disagreed and upheld the district court’s ruling. Nova’s petition to the Supreme Court to hear the case was also denied.

In March 2014, the Delaware district court ruled that Dow was due an additional $30 million to account for damages incurred after the 2010 judgment through to the expiration of the patents in 2011.

But three months later and while an appeal filed by Nova against the supplemental damages award was still pending, the Supreme Court issued its judgment in the Nautilus dispute and offered a new standard for what constitutes an indefinite patent.

Under the new standard, “a patent is invalid for indefiniteness if its claims, read in 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”.

Nova then argued that under the Nautilus decision, Dow’s patents would be invalid.

The federal circuit agreed and judged the patents to be invalid.

Judge Timothy Dyk, writing the unanimous opinion, said: “We conclude that our prior decision is not binding on the issue of indefiniteness because Nautilus changed the applicable law, our prior decision rested on the earlier law, and the patents-in-suit are invalid for indefiniteness under the new Nautilus standard.”

A spokesperson for Dow told WIPR that it is considering its options.

A spokesperson for Nova said that “we are pleased with the federal circuit's unanimous decision confirming our long-held view that the patents-in-suit are invalid.”

Carlyn Burton, partner at law firm Osha Liang, said that parties should consider the implications of the federal circuit's decision when filing patent applications.

She said: “Between this holding and the federal circuit’s finding of indefiniteness in Teva (following a remand from the Supreme Court), applicants should be particularly wary about omitting definitions for crucial terms given the heavy weight given to the intrinsic record as opposed to expert testimony.”

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