Further to our November 20, 2009 post, on March 8, 2010, the Federal Circuit issued its decision in Ajinomoto Co., Inc. v. Int’l Trade Comm’n, No, 2009-1081.  In the decision, the Federal Circuit affirmed the ITC’s final determination in Certain Feed Products (Inv. No. 337-TA-571) that (1) U.S. Patent Nos. 5,827,698 (the ’698 patent) and 6,040,160 (the ‘160 patent) are invalid for violating the best mode requirement of 35 U.S.C. § 112, first paragraph, and (2) the ‘698 patent is unenforceable due to inequitable conduct.

By way of background, the ‘698 and ‘160 patents relate to processes for manufacturing lysine.  Lysine is an essential amino acid that livestock must obtain from their food sources.  Since naturally occurring lysine may be inadequate, feed manufacturers and farmers regularly add lysine as a dietary supplement to grass feed for livestock.   The industry uses microorganisms such as Eschericia coli (E. coli) to synthesize lysine from a carbon source.  The methods that are the subject of the ‘698 and ‘160 patents improve the processes through which  genetically engineered E. coli can synthesize lysine, thus allowing for the production of greater quantities of lysine than from naturally occurring E. coli strains. 

On April 25, 2006, Ajinomoto filed a complaint with the ITC alleging respondents Global Bio-Chem Technology Group Co. Limited, Changchun Dacheng Bio-Chem Engineering Development Co., Ltd., Changchun Balocheng Bio-Chem Development Co., Ltd., Changchun Dahe Bio Technology Development Co., Ltd. and Bio-Chem Technology (HK) Limited (collectively, GBT) violated Section 337 in the importation and sale of certain lysine feed products.  After the ITC initiated an investigation, but before the evidentiary hearing, GBT admitted infringement.  On July 31, 2008, ALJ Charles E. Bullock rendered an initial determination (“ID”) that the asserted claims of the ‘698 and ‘160 patents were invalid for violation of the best mode requirement, and that both patents were thus unenforceable due to inequitable conduct.  Ajinomoto petitioned the ITC for review.  On September 29, 2008, the Commission issued a notice determining to review, but taking no position on, ALJ Bullock’s finding that the ‘160 patent was invalid for failing to meet the best mode requirement based on fictitious data and that the ‘160 patent was procured by inequitable conduct.

On appeal to the Federal Circuit, Ajinomoto did not dispute many of the ITC’s underlying factual findings but instead asserted error in the legal test employed by the ITC in defining the best more requirement.  In particular, Ajinomoto asserted that the best mode requirement applies to “innovative aspects” or “innovative features” of the invention.  The Federal Circuit, however, disagreed with Ajinomoto.  The court held that the best mode inquiry relates to the invention as claimed -- in this case, processes for making lysine using a genetically altered E. coli bacterium -- and is not limited to “innovative aspects or features,” which the court characterized as “vague” terms that “appear nowhere in our best mode case law.”

The Federal Circuit concluded that the ITC applied the correct test to the best mode analysis, and that, in accordance with 35 U.S.C. § 112, first paragraph, the inventors were obligated to disclose their preferred host strains to the U.S. Patent and Trademark Office.  Because the Federal Circuit concluded that the best mode requirement had been violated based solely on the inventors’ failure to disclose their preferred host strains, the court did not address the other best mode violations found by the ITC.

The Federal Circuit also rejected Ajinomoto’s alternative argument that it had satisfied the best mode requirement because it had publicly deposited a strain containing a lysic variant.  The court held that the strain deposited was not the strain preferred by the inventors, and thus, “the deposit failed to enable one skilled in the art to practice the inventors’ preferred embodiment and thus concealed the best mode.”

Finally, with respect to inequitable conduct, the Federal Circuit noted that Ajinomoto failed to challenge the ITC’s finding of intent to deceive and that Ajinomoto’s sole argument on appeal of this issue was limited to a single sentence asserting that the inequitable conduct decision should be reversed because it was based upon an erroneous best mode conclusion.  The Federal Circuit characterized Ajinomoto’s argument as “conclusory” and held that it was therefore waived on appeal.  The Federal Circuit concluded that its decision not to address the ITC’s inequitable conduct decision “does not affect the finding of no violation of section 337 in this case” based upon its conclusion that the asserted patents were invalid for failure to comply with the best mode requirement.