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Sears Ecological Applications Co., LLC v. MLI Associates

September 1, 2009

SEARS ECOLOGICAL APPLICATIONS CO., LLC, PLAINTIFF,
v.
MLI ASSOCIATES, LLC, DEFENDANT.



The opinion of the court was delivered by: David N. Hurd United States District Judge

MEMORANDUM-DECISION and ORDER

TABLE OF CONTENTS

I. INTRODUCTION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 4

-II. BACKGROUND. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 4 -A.

Pre-Interference Patent Filings.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -

4 -B. The Board's Interference

Decision.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 5 -1.

Preliminary Motions Before the Board. . . . . . . . . . . . . . . . . . . . - 6 -2.

Claim Construction by the Board.. . . . . . . . . . . . . . . . . . . . . . . . - 8 -3.

SEACO's Motion to Bar MLI's Claims as Untimely. . . . . . . . . . . - 9 -4.

SEACO's Motion to Bar MLI's Claims as Unpatentable Pursuant to § 112. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 12 -5.

SEACO's Remaining Preliminary Motions.. . . . . . . . . . . . . . . . - 13 -6.

MLI's Motion to Invalidate SEACO's '310 and '325 Patents. . . - 13 -7.

MLI's Motion to Bar SEACO's Claims as Unpatentable Pursuant to § 112. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 16 -8.

MLI's Remaining Preliminary Motions. . . . . . . . . . . . . . . . . . . . - 17 -

III. DISCUSSION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 17 -

A. Summary Judgment Standard. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 17

-B. Standard of Review of the Board's Decision.. . . . . . . . . . . . . . . . . . . . . - 18 -

C. Burden of Proof at an Interference Proceeding. . . . . . . . . . . . . . . . . . . - 19 -

D. Obviousness under § 103(a). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -

20 -1. Standard of Review for Obviousness Under § 103(a). . . . . . . - 21 -

2. Claim Construction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 22

-a. A Person of Ordinary Skill in the Art. . . . . . . . . . . . . . . . . . - 24 -

b. "Water-Balance". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 26 -

c. "Carbohydrate". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 32 -3.

Obviousness Analysis in Light of the Prior Art.. . . . . . . . . . . . - 35

-a. Pure and Waste-Stream Components ('310 and '325 Patents).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

- 36 -b. Molecular Weight Ranges ('310 and '325 Patents). . . . . . .

- 37 -c. Chloride Salts ('325 Patent).. . . . . . . . . . . . . . . . . . . . . . . . . -

38 -E. Untimely Applications Pursuant to 35 U.S.C. § 135(b). . . . . . . . . . . . . . - 41 -

IV. CONCLUSION and ORDER. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 50 -

I. INTRODUCTION

Plaintiff Sears Ecological Applications Company ("SEACO") seeks judicial review pursuant to 35 U.S.C. § 146 of a decision by the United States Patent and Trademark Office Board of Appeals and Interferences ("the Board"). Defendant MLI Associates ("MLI") moves for summary judgment pursuant to Federal Rule of Civil Procedure 56 to affirm the Board's decision. SEACO opposes and cross-moves for summary judgment to reverse the Board's decision, or alternatively, to bar MLI's interfering patent applications pursuant to 35 U.S.C. § 135(b). MLI opposes both of SEACO's motions. Oral argument was heard on May 14, 2009 in Utica, New York. Decision was reserved.

II. BACKGROUND

A. Pre-Interference Patent Filings

SEACO and MLI are competitors in the deicing and anti-icing agent manufacturing industry. Both parties own a number of patents related to deicing and anti-icing technology. SEACO owns United States Patent Numbers 6,436,310 ("the '310 patent") and 6,440,325 ("the '325 patent"), and MLI owns United States Patent Numbers 5,876,621 ("the '621 patent"), 5,980,774 ("the '774 patent"), and 6,506,318 ("the '318 patent"). Acting under the belief that it was the proper owner of the subject matter claimed in SEACO's '310 and '325 patents, MLI filed two patent applications: (1) Patent Application Number 10/266,975 ("the '975 application") filed on October 8, 2002, and (2) Patent Application Number 10/690,894 (the '894 application") filed on October 22, 2003. As is customary practice among competing inventors, MLI's patent applications made claims identical to the claims asserted in SEACO's '310 and '325 patents, thereby provoking an interference proceeding before the Board to determine the priority owner of the patented technology.

B. The Board's Interference Decision

On December 14, 2005, the Board declared Interference No. 105,405 ("the Interference") between SEACO's '310 and '325 patents and MLI's '975 and '894 applications.*fn1 An interference is a proceeding to determine the priority of an invention between a pending application and either an already-issued patent or another pending application. MANUAL OF PATENT EXAMINING PROCEDURE § 2300.01 (8th ed. 2001 & rev. ed. 2008). Parties to an interference proceeding must describe the allegedly interfering subject matter. These descriptions are referred to as "counts." See id. § 2301.03. A party's claims corresponding to a count in an interference proceeding, whether stated within an already-issued patent or a pending application, will be deemed invalid or unpatentable if that party loses the priority determination. Id.

Count One of the Interference stated the following subject matter: A de-icing and anti-icing composition comprising an aqueous solution which contains a low molecular weight carbohydrate and a chloride or acetate salt in which the constituents are present in the following concentration:

Weight % Carbohydrate 3-60% Salt Effective freezing point lowering amount Water Balance and where said carbohydrate has a molecular weight in the range of about 180 to 1500, and is at least one selected from the group consisting of glucose, fructose, and higher saccharides based on glucose or fructose, or mixtures thereof. (Bd. Decision, Ex. 1 to Def's. Mot. for Summ. J., Dkt. No. 43-7, 2-3 (hereinafter "Bd. Decision").)

Count Two stated:

A de-icing and anti-icing composition comprising an aqueous solution which contains a low molecular weight amino acid or oligopeptide and a chloride or acetate salt in which the constituents are present in the following concentration:

Weight % Amino acid or oligopeptide 1-60% Salt Effective freezing point lowering amount Water Balance

(Id. at 3.)

All claims pending in SEACO's '310 and '325 patents and MLI's '975 and '894 applications were determined to correspond to the subject matter described in either Count One or Count Two of the Interference. (Id.) On February 6, 2007, the Board issued an 80-page decision granting in part and denying in part both parties' preliminary motions. Ultimately, without deciding the issue of priority to the claimed subject matter, the Board invalidated SEACO's '310 and '325 patents.

1. Preliminary Motions Before the Board

SEACO moved to bar MLI's applications on a number of grounds, including (1) that claims 38-40, 42-44, 46, and 49 of MLI's '975 application and claims 36 and 37 of MLI's '894 application were untimely pursuant to 35 U.S.C. § 135(b) (SEACO Preliminary Motions 3 and 5); (2) that claims 38-40, 42-44, 46, and 49 of MLI's '975 application and claims 36 and 37 of MLI's '894 application were unpatentable for failure to comply with 35 U.S.C. § 112 (SEACO Preliminary Motions 4, 6, 8, and 12); and (3) that MLI was not entitled to the benefit of the November 9, 1999, September 28, 1999, or September 30, 1997 filing dates of previously filed applications for purposes of establishing priority of the invention described in Count One (SEACO Preliminary Motions 9 and 10). (Id. at 14-16) SEACO also moved to redefine the subject matter described in Count One and Count Two. (SEACO Preliminary Motions 7 and 11). (Id. at 17.)

MLI likewise moved to bar the claims asserted in SEACO's patents on various grounds, including (1) that claims 1-12 of SEACO's '310 patent and claims 1-20 of SEACO's '325 patent were unpatentable under 35 U.S.C. § 102, or alternatively, under 35 U.S.C. § 103 (MLI Preliminary Motion 5); (2) that claims 1-12 of SEACO's '310 patent and claims 9-14 and 18-20 of SEACO's '325 patent were unpatentable for failure to comply with 35 U.S.C. § 112 (MLI Preliminary Motion 2); (3) that SEACO was entitled to neither (a) the benefit of the January 4, 1999 and January 7, 1998 filing dates of two of its previous applications for purposes of establishing priority of the inventions described in Count One and Count Two, nor (b) the January 5, 2001 filing date of one of its previous applications for purposes of establishing priority of the invention described in Count Two (MLI Preliminary Motion 3); and (4) that it was entitled to the September 30, 1997 filing date of one of its own previous applications for purposes of establishing priority of the invention described in Count Two (MLI Preliminary Motion 4). (Id. at 14-16.)

2. Claim Construction by the Board

Because the claim language dictates the determination of whether a claim is invalid under the prior art, the Board first considered the proper construction of the claims made in SEACO's patents and MLI's applications. See Beachcombers v. Wildewood Creative Prods., Inc., 31 F.3d 1154, 1160 (Fed. Cir. 1994) ("The first step involves the proper interpretation of the claims."). The Board interpreted the phrase "low molecular carbohydrate" as it appears in various claims of MLI's '975 application to mean "low molecular weight carbohydrate." (Bd. Decision, 17.) The Board reasoned:

While the phrase has no express antecedent basis in the originally filed claims, [the] interpretation of the phrase "low molecular carbohydrate" is consistent with MLI's use of the phrase "low molecular weight carbohydrate" in Claim 40, the use of the phrase "low molecular weight carbohydrate" in Claims 36-41 filed by Preliminary Amendment entered October 8, 2002, the reference to "low molecular weight sugar" at page 12, line 18, of the original specification, and the many references to hydrocarbyl aldosides, preferably mono- and disaccharides, throughout the specification as examples of carbohydrates (Specification (MLI Exh. 1025), pp. 6-7, bridging para.) suitable for use in the invention described. (Id.)

The Board also interpreted MLI's use of the phrase "comprising an aqueous solution" to indicate that water is a mandatory constituent for each of MLI's applications, and therefore, "no required low molecular weight carbohydrate and/or amino acid constituent in any one of the aqueous solutions which comprises any one of the claimed deicing and anti-icing compositions may constitute 100 weight % of any subcombination aqueous solution." (Id. at 18-19.)

With respect to SEACO's claims, it is undisputed that the Board did not construct the claims in SEACO's '310 and '325 patents within the section of the Board's decision entitled, "Claim Interpretation." (See Bd. Decision, 17-31; see also MLI's. Resp. to SEACO's.

Statement of Material Facts, Dkt. No. 51-2, ¶ 23.) Instead, the Board addressed SEACO's claim language later in its decision and concluded that SEACO's "claims are not limited to deicing compositions of pure components [and] do not exclude deicing compositions prepared from industrial waste streams." (Bd. Decision, 66.) The Board explained that all of the deicing compositions identified in SEACO's patents could include compounds found in industrial waste streams that do not inhibit the solution's deicing function. (Id.) As an example, the Board cited SEACO's comparison of the effect upon freezing temperatures of deicing compositions consisting of Brewers Condensed Solubles--a known waste stream product--to commercially available Corn Syrups, Dextrins, and Maltodextrins. (Id. at 66-67.)

Although the Board recognized Magistrate Judge David E. Peebles's prior interpretation of some of the same claim terms at issue in Cargill, Inc. v. Sears Petroleum & Transp. Corp., 334 F. Supp. 2d 197 (N.D.N.Y. 2004), the Board declined to adopt Judge Peebles's interpretation. (Bd. Decision, 30.) The Board distinguished Judge Peebles's interpretation on the grounds that Cargill was an infringement action involving the scope and content of an invention claimed in an already-issued patent as opposed to a pending application. ...


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