25
Jun
By Eric Schweibenz
Further to our May 10, 2012 post, on June 11, 2012, ALJ Robert K. Rogers, Jr. issued the public version of the Initial Determination (“ID”) (dated May 10, 2012) in Certain Polyimide Films, Products Containing Same, and Related Methods (Inv. No. 337-TA-772).  Due to its size, we have broken the ID into part 1, part 2, part 3, part 4, part 5, and part 6

By way of background, the Commission instituted this investigation on April 28, 2011.  The Complainant is Kaneka Corporation (“Kaneka”) and the Respondents are SKC Kolon PI, Inc. (“SKPI”) and SKC, Inc. (collectively, “SKC”).  The Commission Investigative Staff (“OUII”) did not participate in the investigation.  See our June 15, 2012 post for more details on the reduction of OUII’s role in Section 337 investigations. 

In its complaint, Kaneka asserted that SKC violated Section 337 in connection with the importation into the U.S. and sale of certain polyimide films, products containing same, and related methods that infringe certain claims of U.S. Patent Nos. 6,264,866 (the ‘866 patent), 6,746,639 (the ‘639 patent), 7,018,704 (the ‘704 patent), and 7,691,961 (the ‘961 patent) (collectively, the “asserted patents”).

According to the ID, ALJ Rogers determined that there was no violation of Section 337 in this investigation by SKC.  Specifically, ALJ Rogers determined, inter alia, that (1) the accused SKC products and processes do not infringe claims 1-3 of the ‘866 patent, claim 1 of the ‘639 patent, claim 1 of the ‘704 patent, or claim 1 of the ‘961 patent, but one SKC product does infringe claim 9 of the ‘961 patent; (2) claims 1-3 of the ‘866 patent, claim 1 of the ‘639 patent, and claim 9 of the ‘961 patent are not invalid, but claim 1 of the ‘704 patent is invalid due to indefiniteness pursuant to 35 U.S.C. § 112, ¶ 2, and claim 1 of the ‘961 patent is invalid due to lack of enablement pursuant to 35 U.S.C. § 112, ¶ 1; (3) an industry does not exist in the U.S. that exploits the ‘866, ‘639, ‘704, or ‘961 patents; (4) the ‘639 patent is not unenforceable due to inequitable conduct; and (5) SKC has failed to offer evidence of patent misuse by Kaneka. 

Claim Construction

In the ID, ALJ Rogers construed the following claim terms of the ‘866 patent:  (1) “thereafter increasing the temperature in a step-wise fashion;” (2) “further heating said prefilm to obtain an adhesive polyimide film;” and (3) “consists substantially of.”

ALJ Rogers construed “thereafter increasing the temperature in a step-wise fashion” to mean “temperature is increased in a step-by-step manner, i.e. stepped increases in temperature.”  The parties had disputed whether the term required two or more increases in temperature as opposed to only one or more increases in temperature.  Based on the intrinsic evidence, ALJ Rogers agreed with SKC that two or more increases in temperature were required.

The ALJ construed “further heating said prefilm to obtain an adhesive polyimide film” to mean “applying sufficient heat for a sufficient amount of time to produce a polyimide film with a measurable and detectable level of adhesive strength.”  SKC had argued that the term was indefinite because a person of ordinary skill in the art could not discern what level of adhesiveness falls within the scope of the claims—but ALJ Rogers rejected this argument.

ALJ Rogers construed “consists substantially of” to mean “the composition necessarily includes the listed ingredients and is open to unlisted ingredients that do not materially affect the basic and novel properties of the invention.”  The ALJ found that the proper construction of the term was clear based on relevant Federal Circuit precedent and the language of the claims read in context.

ALJ Rogers also construed the term “low viscosity” in the ‘639 patent.  The ALJ found this term to mean “a viscosity that is sufficiently low to prevent the formation of bubbles and unevenness in film thickness of the resulting polyimide film.”  SKC had argued that the term was indefinite because “low viscosity” is a relative term, and the intrinsic evidence allegedly does not provide a sufficient reference to understand what constitutes “low” viscosity versus, for example, medium or high viscosity.  However, ALJ Rogers rejected this argument after finding that there was sufficient guidance provided in the specification to determine the meaning of “low viscosity” in context.

With respect to the ‘704 patent, ALJ Rogers found that the term “average coefficient of thermal expansion” was indefinite and rendered asserted claim 1 invalid.  ALJ Rogers agreed with SKC that the ‘704 patent specification provided no guidance regarding how to calculate an average coefficient of thermal expansion.  In particular, the specification provided no indication of how many measurements to make, where on the polyimide film to make each measurement, and in what direction the measurements should be made.  The specification provided a number of examples and comparative examples, but none of these examples included an explanation regarding how the average coefficient of thermal expansion was calculated.  The prosecution history also did not reveal the method used to calculate the average coefficient of thermal expansion.

In the ‘961 patent, ALJ Rogers construed the following terms:  (1) “a polyimide film produced by a continuous process;” (2) “across the entire width;” and (3) “molecular orientation angle.”

ALJ Rogers construed “a polyimide film produced by a continuous process” to mean “a polyimide film produced by continuously casting or applying solution resin to a support.”  The ALJ first found that the term was not part of the preamble.  Moreover, even if it were, it was still limiting because it was “necessary to give life, meaning, and vitality to the claim.”  ALJ Rogers also rejected an argument by SKC that the term should be construed narrowly in view of an alleged disavowal of claim scope during prosecution. 

ALJ Rogers construed “across the entire width” to mean “across the entire part in the direction perpendicular to the transferring direction in which the film is continuously produced.”  The ALJ found that the patentee had acted as his own lexicographer in defining this term in the specification. 

With respect to the “molecular orientation angle” term, SKC argued that films with a molecular orientation angle outside of a specific range were not within the disclosed and claimed invention.  However, ALJ Rogers found that SKC had waived this argument because the term was not addressed in the Joint Stipulation of Contested Issues.  ALJ Rogers also rejected the argument on the merits.  Accordingly, he found that the claims of the ‘961 patent are not properly limited to a film with a molecular orientation within the narrow range advocated by SKC.

Validity

SKC argued that claims 1-3 of the ‘866 patent are invalid as anticipated by a U.S. Patent to Kohno or at least are invalid as obvious over Kohno in view of U.S. Patents  to Hamamoto or Haller.  ALJ Rogers found that SKC failed to present clear and convincing evidence that Kohno anticipates claims 1-3.  Specifically, he found that SKC failed to demonstrate that Kohno teaches or discloses the inclusion of “chemical curing agents selected from the group consisting of dehydrating agents and tertiary amines” or the formation of a chemically cured prefilm after step-wise heating.  ALJ Rogers also rejected SKC’s obviousness arguments.

SKC additionally argued that claims 1-3 of the ‘866 patent are invalid as either anticipated by Haller or obvious over Haller in view of Hamamoto.  ALJ Rogers found that SKC failed to present clear and convincing evidence that Haller anticipates claims 1-3.  ALJ Rogers also rejected SKC’s obviousness arguments.

SKC further argued that at least one year before the earliest effective filing date of the ‘866 patent, Kaneka and its U.S. subsidiary Kaneka Texas Corporation (“KTC”) made and sold polyimide film products manufactured using the methods described in claims 1-3 of the ‘866 patent.  ALJ Rogers rejected this argument, finding that SKC had failed to offer clear and convincing evidence that Kaneka’s and KTC’s prior manufacturing processes anticipated any of claims 1-3 of the ‘866 patent.

SKC argued that claim 1 of the ‘639 patent is invalid as anticipated by a U.S. Patent to Sutton.  ALJ Rogers found that SKC failed to present clear and convincing evidence that Sutton anticipates claim 1 of the ‘639 patent.

SKC also argued that claim 1 of the ‘639 patent is invalid as anticipated by a U.S. Patent  to Okahashi.  SKC further argued that claim 1 of the ‘639 patent is invalid as obvious over Okahashi in combination with a Japanese Patent App. to Tetsuya, a Japanese Patent App. To Koichiro, or a U.S. Patent  to Endrey.  ALJ Rogers rejected these arguments, finding that SKC failed to offer clear and convincing evidence that Okahashi anticipates claim 1 or, in combination with the other references, renders claim 1 obvious.

SKC further argued that claim 1 of the ‘639 patent is invalid as obvious over Tetsuya in view of Okahashi.  ALJ Rogers found that SKC failed to present clear and convincing evidence that the combination of Tetsuya and Okahashi rendered claim 1 obvious. 

SKC argued that claim 1 of the ‘704 patent is invalid as anticipated or obvious over a U.S. Patent  to Akahori.  ALJ Rogers found that SKC failed to present clear and convincing evidence that Akahori anticipates or renders obvious claim 1 of the ‘704 patent.  In particular, the ALJ found that, under Kaneka’s claim construction position,  Akahori does not disclose the “average coefficient of thermal expansion” of claim 1. 

However, as noted above, ALJ Rogers found that the “average coefficient of thermal expansion” term is indefinite and therefore renders claim 1 of the ‘704 patent invalid under 35 U.S.C. § 112, ¶ 2.

SKC also argued that claim 1 of the ‘704 patent is invalid as either anticipated by a U.S. Patent  to Ono or rendered obvious by Ono in view of a U.S. Patent App to Yuyama.  ALJ Rogers found that SKC had failed to present clear and convincing evidence to support these arguments. 

SKC argued that claims 1 and 9 of the ‘961 patent are invalid as either anticipated or obvious over several prior art references and samples.  However, ALJ Rogers found that SKC had failed to show by clear and convincing evidence that these references were in fact prior art to the ‘961 patent.

SKC further argued that claim 1 of the ‘961 patent is invalid under 35 U.S.C. § 112, ¶ 1 because it is not enabled by the specification for the full range of recited “A” values.  Specifically, SKC argued that there is no enabling disclosure regarding how to make a film with values near and including the endpoint of 3.00.  ALJ Rogers agreed with this argument and found that claim 1 is invalid because it is not enabled for the claimed range. 

SKC also argued that claim 9 of the ‘961 patent is invalid under 35 U.S.C. § 112, ¶ 1 because it is not enabled by the specification for the full range of recited “d/c” values.  According to SKC, while claim 9 requires that “d/c” be in the range of 1.01 to 1.20, the specification contains no enabling disclosure regarding how to make a film with values near and including the endpoint of 1.01.  ALJ Rogers rejected this argument and found that claim 9 is not invalid for lack of enablement.

SKC additionally argued that the ‘961 patent is invalid for failure to disclose the best mode for production of the claimed polyimide film known to the inventors at the time the ‘961 patent was filed.  ALJ Rogers first noted that he would not consider Kaneka’s arguments on the issue because Kaneka had failed to address the best mode issue in its initial post-hearing brief.  However, since SKC still failed to carry its burden of showing a failure to disclose the best mode by clear and convincing evidence, ALJ Rogers held that the ‘961 patent is not invalid on this basis.

Inequitable Conduct

SKC argued that Kaneka committed inequitable conduct when filing and prosecuting the ‘639 patent by failing to submit and mischaracterizing material prior art with deceptive intent.  Specifically, SKC asserted that Kaneka failed to provide a full copy of the Tetsuya reference to the examiner, and instead only provided a description of Tetsuya in the Background of the Invention section of the specification.  ALJ Rogers found that the discussion of Tetsuya in the Background of the Invention section was indeed insufficient.  Nevertheless, the ALJ found that Tetsuya was not a material reference under the “but-for” standard for materiality.  ALJ Rogers also found that SKC had failed to prove the intent prong for inequitable conduct.  Accordingly, the ALJ concluded that SKC had failed to offer clear and convincing evidence of inequitable conduct with respect to the ‘639 patent.

Patent Misuse

SKC argued that Kaneka’s conduct leading up to and throughout the investigation constituted patent misuse.  In particular, SKC claimed that from at least 2007, Kaneka had been plotting to use its U.S. patents to put pressure on competitors by way of litigation in order to decelerate or halt SKC’s entry into the polyimide film market.  SKC further claimed that Kaneka had pursued the instant investigation—and related district court litigation—in bad faith.  SKC also argued that it had lost business as a result of Kaneka’s sending threatening letters to SKC’s customers warning them not purchase any SKC products.  Finally, SKC claimed that Kaneka had consistently disregarded the Ground Rules and Procedural Schedule in the investigation, thereby imparting both inconvenience and significant cost to SKC. 

ALJ Rogers rejected these arguments and found that SKC had failed to prove the affirmative defense of patent misuse.  Specifically, the ALJ found that the fact that Kaneka implemented a strategy of asserting its patents against SKC to try to either eliminate SKC from the market or reduce SKC’s market share did not equate to patent misuse.  ALJ Rogers declined to address SKC’s argument that Kaneka had pursued the investigation in bad faith because SKC did not properly raise the argument in the context of Commission Rule 210.4.  The ALJ also rejected SKC’s argument that Kaneka’s sending warning letters to SKC’s customers constituted patent misuse.  Finally, ALJ Rogers found that the allegation that Kaneka had repeatedly violated the Ground Rules, even if proven true, did not give rise to a proper claim for patent misuse.

Infringement

Kaneka asserted that SKPI’s process for making its polyimide film products infringes claims 1-3 of the ‘866 patent.  SKC raised four non-infringement arguments in response, all of which were equally relevant to each of the asserted claims:  (1) the accused products do not practice the element that requires that the casted composition “consist[] substantially of an organic solvent solution of polyamide acid and chemical curing agents selected from the group consisting of dehydrating agents and tertiary amines;” (2) the accused products do not practice the element that requires “increasing the temperature in a step-wise fashion;” (3) the accused products do not practice the element that requires “increasing the temperature … while adjusting an imidation ratio,” “increasing the temperature … while adjusting amounts of volatile constituent,” or “increasing the temperature … while adjusting amounts of organic solvent and an imidation ratio;” and (4) the accused products do not practice the element that requires “further heating said prefilm to obtain an adhesive polyimide film.”

ALJ Rogers determined that Kaneka had demonstrated that the “consist[] substantially of an organic solvent solution of polyamide acid and chemical curing agents selected from the group consisting of dehydrating agents and tertiary amines” limitation is in fact satisfied by the accused products.  However, the ALJ found that Kaneka had failed to prove by a preponderance of the evidence that the imported accused products practice the “increasing the temperature in a step-wise fashion” limitation.  The ALJ also found that Kaneka had failed to prove by a preponderance of the evidence that SKC’s process, for any of its imported accused products, practices the “while adjusting” limitations.  Finally, ALJ Rogers found that Kaneka had shown that the imported accused LV and IN products practice “further heating said prefilm to obtain an adhesive polyimide film.”  However, he found no evidence of testing the imported accused SKPI IF products to determine if they possess a detectable and measurable level of adhesive strength, and thus that Kaneka had not met its burden to show infringement as to those products. 

Kaneka contended that SKC’s LV and IN processes infringe claim 1 of the ‘639 patent.  However, ALJ Rogers found that Kaneka had failed to prove infringement by a preponderance of the evidence.  Specifically, ALJ Rogers found that Kaneka had failed to demonstrate that any accused SKC process meets the “low viscosity” limitation under the ALJ’s construction.  The ALJ further found that Kaneka had failed to demonstrate that any accused SKC process creates a “poly(amic acid) varnish having low viscosity.”  The ALJ also found that Kaneka had failed to offer sufficient evidence to demonstrate that any SKC process meets the limitation requiring “preparing the composition of the resin solution by adding to the poly(amic acid) varnish a dehydrating agent in an amount of at least one mole … per 1 mole of amic acid of the poly(amic acid) varnish.”

Kaneka contended that SKC’s IF70 and LN100 products infringe claim 1 of the ‘704 patent.  However, as discussed above, ALJ Rogers found that this claim was indefinite.  Accordingly, the ALJ found that he could not properly analyze infringement with respect to the ‘704 patent.  Nevertheless, ALJ Rogers found that the accused SKC products do not infringe claim 1 of the ‘704 patent even under Kaneka’s proposed construction. 

Kaneka argued that SKC’s polyimide films infringe claim 1 of the ‘961 patent.  However, based on the evidence in the record, ALJ Rogers found that Kaneka had failed to prove that any SKC polyimide films meet all the limitations of claim 1 of the ‘961 patent.  Among other things, the ALJ found that Kaneka’s testing of SKC’s products was unreliable.

Kaneka also contended that SKC films infringe claim 9 of the ‘961 patent.  ALJ Rogers found that Kaneka had successfully demonstrated by a preponderance of the evidence that the IN 70 (50um) product infringes claim 9 of the ‘961 patent.  However, the ALJ found that Kaneka had failed to prove that any other SKC products infringe the claim.

Domestic Industry

ALJ Rogers determined that Kaneka had failed to satisfy the economic prong of the domestic industry requirement for any of the asserted patents in the investigation.  In particular, the ALJ found that evidence concerning Kaneka’s investments into what eventually became a KTC facility was insufficient to demonstrate a domestic industry based on a significant investment in plant and equipment. According to the ID, Kaneka had not tied its investments in the facility to the specific products alleged to practice the asserted patents.  Instead, Kaneka had only provided generalized figures regarding the amount of overall investment made at the facility.  ALJ Rogers similarly found that Kaneka’s lack of specificity doomed its argument that it satisfied the economic prong based on a significant employment of labor or capital.  The ALJ further found that there was insufficient evidence that Kaneka had made a substantial investment in the U.S. related to licensing of the asserted patents, and that Kaneka therefore could not rely on its licensing activities to meet the domestic industry requirement.  Moreover, Kaneka’s litigation expenses, without more, were insufficient to support a finding that Kaneka had satisfied the domestic industry requirement.

ALJ Rogers also found that Kaneka failed to satisfy the technical prong of the domestic industry requirement for any of the asserted patents.  Please note that this section of the public version of the ID has been heavily redacted.

Remedy and Bonding

With respect to remedy, ALJ Rogers recommended that if the Commission were to find a violation of Section 337, a limited exclusion order would be appropriate but a general exclusion order and a cease and desist order would not be appropriate.  ALJ Rogers also recommended that no bond be imposed during the Presidential review period.
Share