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Sinorgchem v. ITC & Flexsys America – Update.

Posted in Litigation Commentary by Jake Ward on January 4, 2008

Flexsys has issued a press release responding to the CAFC’s recent decision regarding the patent infringement suit with Sinorgchem.  See previous AT! posts on the ongoing litigation here , here, and here

An excerpt from the Flexsys press release follows:

ST. LOUIS – December 27, 2007 — Solutia Inc. today announced that its Flexsys subsidiary will soon be filing a petition for rehearing by all of the judges of the Court of Appeals for the Federal Circuit (CAFC). This matter involves Flexsys’ ongoing patent infringement dispute with Sinorgchem regarding process technology for the manufacture of 4-ADPA and its PPD derivatives.  In July 2006, the International Trade Commission (ITC) ruled in favor of Flexsys. Last week, a three-judge panel of the CAFC ruled 2-1 that Sinorgchem had not literally infringed Flexsys’ patents, and remanded the case to the ITC to determine whether Sinorgchem had infringed under the doctrine of equivalents.

“We will be moving quickly to file a petition for rehearing,” said Tim Wessel, vice president, Antidegradants and Crystex®. “Importantly, the ITC exclusion order that prohibits Sinorgchem’s importation of 4-ADPA and 6PPD into the United States remains in full effect.  We agree with the strongly worded dissent that the ITC decision should be upheld.”

Notably, a patent infringement action against Sinorgchem Co. and South Korean tire maker Korea Kumho Petrochemical Company is also pending before the U.S. District Court (N.D. Ohio) and will likely follow the ITC case when litigation relating to Sinorgchem’s appeal of the ITC ruling is completed.

JW Note:  It appears likely that the petition for rehearing en banc (full bench) by Flexsys will be granted, particularly in view of Judge Newman’s compelling dissent in the panel opinion.  From a practitioner’s standpoint, the outcome of this matter should be very interesting indeed. 

Sinorgchem v. ITC & Flexsys America.

Posted in Opinion Commentary by Jake Ward on December 22, 2007

Range of “Controlled Amount” Narrowly Construed Based on Definition in the Specification; Majority Panel Ignores Contrary Disclosure and the Signal “For Example” in Relation to the Range.  

(Fed. Cir. 2007, 06-1633)

6PPD

On appeal to the CAFC, Sinorgchem argued that a limited exclusion order by the International Trade Commission (“ITC”) and decision that Sinorgchem infringed four method claims of Flexys America’s U.S. Pat. Nos. 5,117,063 (“the ’063 patent”) and 5,608,111 (“the ’111 patent”) was improper.  A majority of a three-judge panel at the CAFC agreed with Sinorgchem and vacated the ITC decision.

The technology at issue relates to  a compound known as 6PPD, a rubber antidegradant used primarily in tires.  An intermediate compound, 4-aminodiphenylamine (4-ADPA) is used to make 6PPD.  Sinorgchem produces 4-ADPA and 6PPD in China and imports 6PPD for sale into the United States.

The process for making 4-ADPA includes a condensation reaction of aniline and nitrobenzene in the presence of a base and a  protic material (a proton donor, such as water).  Flexsys’ claimed process for producing 6PPD includes the step of: 

. . . reacting the aniline and nitrobenzene in a confined zone at suitable temperature, and in the presence of a suitable base and controlled amount of protic material to produce one or more 4-ADPA intermediates . . . . (Emphasis mine).

The central question was whether Sinorgchem’s method of producing 4-ADPA intermediates satisfied the above claim limitations and, in particular, whether the Sinorgchem’s methods used the controlled amount of protic material?  Sinorgchem argued that “controlled amount of protic material” should be construed to be “up to about 4% water”.  Under this construction, Sinorgchem would not infringe because Sinorgchem’s method employs more than 4% water.  Flexsys argued that “controlled amount” means “that the amount of protic material should be controlled between an upper limit and a lower limit,” where the upper limit was “that amount beyond which the reaction between nitrobenzene and aniline is inhibited,” and the lower limit was “that amount below which the desired selectivity for 4-ADPA intermediates is not maintained.” Under Flexsys’ claim construction, the Sinorgchem process would infringe.

The majority panel found that the ITC’s determination of infringement was based on an erroneous construction of the term “controlled amount”, and that Sinorgchem did not literally infringe under a correct construction.  The majority relied on Flexsys’ specifications, which state:

A “controlled amount” of protic material is an amount up to that which inhibits the reaction of aniline with nitrobenzene, e.g., up to about 4% H2O based on the volume of the reaction mixture when analine is utilized as the solvent.  (Emphasis mine).

The CAFC placed emphasis on the use of quotations marks around the term “controlled amount”, and use of the word “is”, as being indicative of the patentee acting as its own lexicographer in defining the term.  The majority disagreed with the ITC’s finding that the ” “up to about 4% H2O” language was used in the specification as an example and not a definition of the amount of water permitted,” stating that “a definition set forth in the specification governs the meaning of the claims.”  The majority also disagreed with the ITC’s reliance on a Flexsys example where more than 10% water in a reaction was described.  Specifically, the majority opined:

Where, as here, multiple embodiments are disclosed, we have previously interpreted claims to exclude embodiments where those embodiments are inconsistent with unambiguous language in the patent’s specification or prosecution history.

The majority panel of the CAFC also found it significant that the Flexsys example relied upon by the ITC does not expressly disclose the amount of water used in the reaction, and that the amount must instead be determined by a “complex calculation”.

Accordingly, the majority REVERSED AND REMANDED to the ITC to address doctrine of equivalents infringement in light of the holding that there was no literal infringement.

Circuit Judge Newman provided a strong DISSENT,  stating that the majority:

. . . made findings contrary to the detailed and unchallenged text of the patent specifications, and have construed the claims so that they exclude a major part of the invention described in the patents.

Specifically, Judge Newman recognized that:

. . . there was no disclaimer of the scope set forth in the patent specifications and claims; there is no prior art to limit the claims in the way selected by the panel majority; and there is no reason to insert an absolute numerical limit of “about 4%” protic material into the claims that do not contain a numerical limit, when the specifications of both patents demonstrate significantly higher percentages.

Nicely driving the absurdity of the majority decision home, Judge Newman further states:

It is not the judicial role to change the invention. Although the panel majority acknowledges that limits above 4% “could be found in the specification” and were so found by the Commission, the panel majority discards this undisputed fact. . . .

Thus my colleagues find “clear definitional language [of a 4% limit] set forth in the specification” although that number is in a sentence with the signal “for example,” and ignore the text and examples showing a higher range. These erroneous appellate findings of scientific fact directly contradict the findings of the Commission, made upon extensive and detailed evidence and argument on the content of the specifications, including the variables discussed and exemplified in the ‘063 and ‘111 patents. Instead, the panel majority selects the parts of the specifications that show water in the 4% range, and ignores the description and examples that show other amounts of water. . . .

Our appellate obligation is to impart consistency, predictability, and guidance to patent claiming, whereby the patent-user community can rely on a technologically correct and legally consistent interpretation of patent claims. The health of innovative technology requires confidence in objective rules of claim construction, and in uniform judicial application of the rules. The panel majority adds inconsistency and unpredictability by arbitrarily limiting the scope of the claimed invention in a way that conflicts with the teachings of the specifications and the knowledge in the field of the inventions. I respectfully dissent.

(Emphasis mine).

JW Note:  See also previous AT! discussions of Flexsys America v. Sinorgchem et al. here and here.

Flexsys Settles with Sovereign Chemical.

Posted in Litigation Commentary by Jake Ward on November 12, 2006

6PPD  

As stated in my earlier post titled Flexsys 6PPD Suit to Proceed in District Court (N.D. Ohio), Flexsys America L.P. had filed a $20 million patent infringement lawsuit in U.S. District Court (N.D. Ohio) against Chinese chemical producer Sinorgchem Co., its U.S. distributor (Akron-based Sovereign Chemical Co.), and South Korean tire maker Kumho Tire Co. Inc. and its U.S. subsidiary, Kumho Tire U.S.A. Inc

Rubber and Plastics News (subscription required) is now reporting that Flexsys has settled with defendant Sovereign Chemical Co.  The suit is continuing, however, against Sinorgchem (the Chinese manufacturer and supplier to Sovereign) and the Kumho companies.  As noted in my previous post, the ITC had found that Sinorgchem infringed Flexsys patents drawn to methods of manufacturing 6PPD and a precursor feedstock, 4-ADPA, and by selling Sinorgchem’s versions of the products in the U.S.  

Interestingly, Sovereign has filed a public document which claims that Sovereign has been harmed by Sinorgchem´s infringing conduct.  Specifically, Sovereign alleges that Sinorgchem told Sovereign (and intended Sovereign to believe and rely upon them Sinorgchem’s claims) that the products purchased by Sovereign would be free from infringement of any valid U.S. patents.

JW Note:  Has anyone out there seen this Sovereign “public document?”  A quick internet search has yielded nothing at this time.

Flexsys 6PPD Suit to Proceed in District Court (N.D. Ohio)

Posted in Litigation Commentary by Jake Ward on August 27, 2006

According to the Rubber & Plastics News (subscription required), the U.S. District Court for the Northern District of Ohio has recently allowed Flexsys America L.P. to proceed with a $20 million patent infringement lawsuit against Chinese chemical producer Sinorgchem Co.; its U.S. distributor, Akron-based Sovereign Chemical Co.; South Korean tire maker Kumho Tire Co. Inc.; and its U.S. subsidiary, Kumho Tire U.S.A. Inc.  The district court case had originally been stayed while a companion case was pending before the U.S. International Trade Commission (ITC).

Flexsys asserted in the ITC complaint that the above parties infringed on Flexsys’ U.S. Pat. Nos. 5,117,063 (the 063 patent), 5,608,111 (the 111 patent) and 6,140,538 (the 538 patent) related to N-(1,3-dimethylbutyl)-N’-phenyl-p-phenylenediamine (“6PPD”).  This chemical is a rubber antidegradant found in most tires sold in the United States.

On July 13, the ITC ruled that Sinorgchem violated Flexsys patents drawn to methods of manufacturing 6PPD and a precursor feedstock, 4-ADPA.  The ITC further ruled that Sovereign infringed by selling Sinorgchem’s versions of those products in the U.S.

Notably, the ITC exonerated Kumho, but Flexsys kept the tire maker and its U.S. arm in the lawsuit, stating the issues in the suit were different from those in the ITC case.

The limited exclusion order by the ITC may be viewed here:  Investigation No. 337-TA-533.

JW Note:  As a former rubber compounder in the tire industry (and thus being very familiar with 6PPD), I found this article to be of great interest . . . at the crossroads of my legal and technical expertise.  It will be interesting to watch how this case develops!

ITC Rescinds Order Against Sinorgchem.

Posted in General Commentary by Jake Ward on June 5, 2008

Brought to our attention this morning by this article at RubberNews (subscription required):

WASHINGTON (June 4, 2008) — The U.S. International Trade Commission has rescinded the limited exclusion order barring the U.S. sale of rubber antidegradants made by Chinese firm Sinorgchem Co. Shandong and sold by Sovereign Chemical Co.

The ITC order follows a denial by the Federal Circuit in relation to a rehearing en banc of a decision finding that Sinorgchem did not infringe Flexsys’ patent.  Specifically, the ITC order states:

Sinorgchem appealed the Commission’s final determination to the U.S. Court of Appeals
for the Federal Circuit (“Federal Circuit”). On December 21, 2007, the Federal Circuit issued its judgment vacating and remanding the Commission’s final determination for further proceedings consistent with the Court’s opinion. Sinorgchem Co., Shandong v. International Trade Commission, 511 F.3d 1132 (Fed. Cir. 2007). Intervenor Flexsys America L.P. (“Flexsys”) petitioned the Federal Circuit for rehearing and rehearing en banc. The Commission supported rehearing. On April 7, 2008, the Federal Circuit denied the petition for rehearing and rehearing en banc. The mandate of the Court issued on April 14, 2008.

Upon consideration of this matter, the Commission has determined to rescind the limited
exclusion order relating to the importation of rubber antidegradants made by Sinorgchem and Sovereign. The Commission has also determined to remand the investigation to the presiding ALJ for proceedings consistent with Sinorgchem Co., Shandong v. International Trade Commission, 511 F.3d 1132 (Fed. Cir. 2007), including issuance of a final initial determination on violation and a recommended determination on remedy and bonding.

A copy of the ITC order may be found here.

See the previous AT! posts on the Flexsys v. Sinorgchem et al. litigation here