U.S. WATER SERVICES, INC., ROY JOHNSON, Plaintiffs-Appellants
NOVOZYMES A/S, NOVOZYMES NORTH AMERICA, INC., Defendants-Cross-Appellants
from the United States District Court for the Western
District of Wisconsin in No. 3:13-cv-00864-JDP, Judge James
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.
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.
Wallach, Hughes, and Stoll, Circuit Judges.
Wallach, Circuit Judge.
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.
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.
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.
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"). J.A. 135, 144. The Patent Family generally
claims methods of reducing fouling through the use of
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)).
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) saccharification,  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).
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