Nalco v. Chem-Mod (Fed. Cir. 2018)
The district court dismissed Nalco’s patent infringement complaint with prejudice on a R. 12(b)(6) motion for failure to state a claim upon which relief can be granted. On appeal, the Federal Circuit has reversed – finding that the patentee had properly stated a claim of direct infringement, infringement under the doctrine of equivalents, indirect infringement, and willful infringement.
Nalco’s asserted U.S. Patent No. 6,808,692 covers a method of removing most of the elemental mercury from the smoke emitted by a coal plant (before it is released into the atmosphere). Although Nalco’s approach is no better than prior methods, it is cheaper and thus more likely to be adopted. The claimed method requires injection of a halide precursor that is then converted to a halide (by the heat of the furnace) which then binds to mercury in a form that can be easily filtered from the flue gas.
In U.S. Federal Court, a lawsuit begins with the filing of a complaint that must include sufficient allegations of fact that make the claim for relief plausible. A complaint with factual deficiencies is can then be dismissed. Usually, a court will dismiss the case without prejudice (allowing it to be refiled with more complete factual assertions) or even informally suggest the plaintiff file an amended complaint. Here, the Nalco has filed five different complaints (original plus four amended). The first and third amended complaints were dismissed without prejudice. Finally, at the fourth complaint the court dismissed with prejudice — leading to the appeal here.
In the complaints, Nalco explained in detail its theory of infringement. For its part, the district court appears to have conducted an informal claim construction that led to its ruling of no possible infringement. The basic problem is that the patent suggests (but does not expressly claim) that a mixing of the halide precursor with other materials occurs within the flue, while the accused system pre-mixes prior to injection into the flue.
Thus, this is a case where direct infringement will likely be resolvable as a question of law following claim construction. Here, however, the Federal Circuit rejected the lower court’s informal claim construction as premature at the pleading stage:
As Nalco explained, these disputes between the parties hinge on where “flue gas” may be located within the power plant and what limitations are appropriate on where “injecting” may occur. It is not appropriate to resolve these disputes, or to determine whether the method claimed in the ’692 patent should be confined to the preferred embodiment, on a Rule 12(b)(6) motion, without the benefit of claim construction. The purpose of a motion to dismiss is to test the sufficiency of the complaint, not to decide the merits. (internal quotes removed)
What does this mean – although claim construction is an issue of law, the court here holds that claim construction is not the type of legal question that should normally be resolved on the pleadings without the due consideration given in the Markman process.
Walking through the complaint, the appellate panel also found improper dismissal of the patentee’s claims of infringement under the doctrine of equivalents, indirect infringement, and willful infringement.