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U.S. Water Services, Inc. v. Novozymes A/S

United States Court of Appeals, Federal Circuit

December 15, 2016

U.S. WATER SERVICES, INC., ROY JOHNSON, Plaintiffs-Appellants
v.
NOVOZYMES A/S, NOVOZYMES NORTH AMERICA, INC., Defendants-Cross-Appellants

         Appeals from the United States District Court for the Western District of Wisconsin in No. 3:13-cv-00864-JDP, Judge James D. Peterson.

          Michelle Marie Umberger, Perkins Coie, LLP, Madison, WI, argued for plaintiffs-appellants. Also represented by John Singleton Skilton, Autumn N. Nero, David J. Harth, Brandon Michael Lewis; Colin Gene Sandercock, Washington, DC.

          David Keith Tellekson, Fenwick & West LLP, Seattle, WA, argued for defendants-cross-appellants. Also represented by Ewa M. Davison, Phillip Decker, Elizabeth B. Hagan; Virginia Kay DeMarchi, Michael C. Saunders, II, Mountain View, CA.

          Before Wallach, Hughes, and Stoll, Circuit Judges.

          Wallach, Circuit Judge.

         U.S. Water Services, Inc. and Roy Johnson (together, "U.S. Water") sued Novozymes A/S and Novozymes North America, Inc. (together, "Novozymes") in the U.S. District Court for the Western District of Wisconsin ("District Court"), alleging indirect infringement of U.S. Patent Nos. 8, 415, 137 ("the '137 patent") and 8, 609, 399 ("the '399 patent") (together, "the Patents-in-Suit"). Novozymes counterclaimed for declaratory judgment of noninfringement, invalidity, and inequitable conduct. The parties later filed cross-motions for summary judgment. The District Court granted Novozymes's Motion in part, finding claims 1, 6, and 12-13 of the '137 patent and claims 1-2, 5-12, 16-22, 25, 28-32, and 34-35 of the '399 patent (collectively, "the Asserted Claims") invalid as inherently anticipated by various prior art references. U.S. Water Servs., Inc. v. Novozymes A/S, 120 F.Supp.3d 861, 868-82 (W.D. Wis. 2015). However, the District Court denied Novozymes's Motion as to inequitable conduct by U.S. Water. Id. at 882-83.

         U.S. Water appeals the District Court's anticipation finding. Novozymes cross-appeals the District Court's finding of no inequitable conduct. We have jurisdiction pursuant to 28 U.S.C. § 1295(a)(1) (2012). We vacate-in-part, affirm-in-part, and remand for further proceedings consistent with this opinion.

         Background

         I. The Relevant Patents

         The technology at issue relates to the production of ethyl alcohol (i.e., ethanol) from a milled grain. Ethanol production yields an insoluble byproduct that deposits on, or "fouls, " the processing equipment. See, e.g., '399 patent col. 1 ll. 34-38; J.A. 1376-90 (Confidential Material). The Patents-in-Suit disclose methods for reducing or preventing fouling. See '399 patent col. 3 ll. 21-24; '137 patent col. 1 ll. 50-53.

         The Patents-in-Suit share a common specification and are related to one another as continuations of the application that also led to U.S. Patent No. 8, 039, 244 ("the '244 patent") (collectively, "the Patent Family").[1] J.A. 135, 144. The Patent Family generally claims methods of reducing fouling through the use of phytase.[2]

         Each patent discloses the addition of the enzyme phytase at various points in the ethanol production process. For example, the '244 patent is entitled "Reducing Insoluble Deposit Formation in Ethanol Production" and discloses the addition of phytase after fermentation has finished. See '244 patent col. 12 ll. 9-13 (reciting "adding phytase to . . . thin stillage, backset, or [a] mixture thereof containing phytic acid or salts of phytic acid under conditions suitable for converting the insoluble phytic acid or phytic acid salts to soluble products"); id. col. 1 ll. 65-67 ("In an embodiment, the present method includes adding an enzyme with phytase activity to the ethanol-processing fluids after fermentation . . . ."). The '399 patent is entitled "Reducing Insoluble Deposit Formation in Ethanol Production" and the '137 patent is entitled "Preventing Phytate Salt Deposition in Polar Solvent Systems." The patents' claims disclose the introduction of phytase into the production process under certain conditions, but they do not disclose precisely when the phytase should be added and under what conditions. See, e.g., '399 patent col. 12 ll. 44-48 (reciting "providing . . . phytase in the ethanol processing fluid" to reduce "the formation of insoluble deposits of phytic acid and/or salts of phytic acid"); '137 patent col. 12 ll. 33-38 (reciting "adding phytase to an ethanol processing fluid . . . under conditions suitable for converting the insoluble phytic acid or phytic acid salts to soluble products"). But see id. col. 1 ll. 58-60 ("The method can include: adding an agent to the ethanol-processing fluids after fermentation . . . ." (emphasis added)).

         II. The Prior Art

         The District Court found that either International Publication No. WO 01/62947 A1 ("Veit"), J.A. 1580-610, or U.S. Patent No. 5, 756, 714 ("Antrim") inherently anticipated the Asserted Claims. U.S. Water, 120 F.Supp.3d at 878-82. Veit is entitled "Fermentation with a Phytase" and explains that ethanol production from whole grains involves four steps: (1) milling, (2) liquefaction, [3] (3) saccharification, [4] and (4) fermentation. Veit p. 2 ll. 24-29. Veit discloses that adding phytase during the saccharification and fermentation stages of ethanol production can result in "increases [in] the fermentation and ethanol yields." Id. p. 5 l. 29; see id. p. 1 ll. 7-8, p. 2 ll. 15-19, p. 8 ll. 4-11 (further describing the process for adding phytase at either step). Antrim is entitled "Method for Liquefying Starch" and discloses a method for liquefying corn starch that "relates to the removal, and/or inactivation of an enzyme inhibiting composition from a granular starch prior to or during liquefaction." Antrim col. 1 ll. 14-16. The enzyme inhibiting composition is "comprise[d of] a form of phytate" that "acts to inhibit [alpha]-amylase hydrolysis of a starch solution during low pH liquefaction." Id. col. 5 ll. 30-36. Antrim is directed at a more efficient liquefaction process through the use of enzymes. See id. col. 4 ll. 6-21 (summarizing the objectives of the invention).

         Discussion

         U.S. Water argues that the District Court erred in granting summary judgment of invalidity based on inherent anticipation because the District Court expressly acknowledged the existence of a disputed material fact. Novozymes challenges the District Court's inequitable conduct finding. After ...


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