TED STEWART, District Judge.
This matter is before the Court on motions from both parties. Plaintiffs filed three motions for new trial (collectively, the "New Trial Motions") and a Motion to Alter Judgment. Defendant filed a Motion to Strike Plaintiffs' Motions for New Trial for Failure to Comply with Page Limitations and a Motion for Attorney Fees. For the following reasons, the Court will deny the New Trial Motions and Defendant's Motions. However, the Court will grant Plaintiffs' Motion to Alter Judgment.
Softgel Formulators, Inc. owns United States Patent No. 8,491,888, titled "Highly Absorbable Coenzyme Q10 Composition and Method of Producing Same" (the "'888 patent"). The patent was exclusively licensed to Thorne Research, Inc. ("Thorne") by Softgel Formulators on August 1, 2011. The patent issued on July 23, 2013, and on August 22, 2013, Thorne and Softgel Formulators (collectively, "Thorne") filed this lawsuit against Xymogen for infringement of the '888 patent.
On February 20, 2018, following a six-day trial, the jury found that Xymogen's accused products did not infringe claim 1 or claim 5 of the '888 patent, and that both claims were invalid due to derivation and improper inventorship. Thorne now seeks a new trial based on: (1) the Court's rulings and instruction on the "non-crystalline" limitation; (2) insufficiency of the evidence to support derivation and noninfringement; and (3) inconsistency of the jury's verdict. Thorne also seeks to have the Judgment amended to state that claims 1 and 5 are invalid, rather than stating that the entire patent is invalid. In response, Xymogen filed a Motion to Strike the New Trial Motions for failure to comply with the page limitations set out in DUCivR 7-1(a)(3)(C). Xymogen is also seeking attorney's fees under 35 U.S.C. § 285.
DUCivR 7-1(a)(3)(C) provides that a motion for new trial, "must not exceed 2,500 words, or in the alternative, ten (10) pages." "Exceptions are rarely granted and only upon a showing of good cause."
According to Xymogen, Thorne attempted to skirt the Court's page limitation by filing three motions for new trial. Xymogen argues that the New Trial Motions are brought under the same rules and the issues substantially overlap, so Thorne should have filed one motion and either adhered to the page-limitation rule or sought leave to file an overlength motion.
Thorne argues, however, that the New Trial Motions were filed separately "in order to maintain conceptual clarity" as "[e]ach motion presents conceptually distinct legal and factual matters, and provides a separate and independent basis for a new trial."
First, there is no rule that states that a party may not file multiple motions for new trial under Rule 59. Second, while there is overlap between the motions, each one deals with a distinct issue for which a new trial may be granted. Finally, granting Xymogen's Motion would result in Thorne's inability to condense and re-file the New Trial Motions because a motion for a new trial "`must be filed no later than 28 days after the entry of judgment,' and a district court is not permitted to extend this deadline."
Under Federal Rule of Civil Procedure 59(a)(1)(A), "[t]he court may, on motion, grant a new trial on all or some of the issues . . . after a jury trial, for any reason for which a new trial has heretofore been granted in an action at law in federal court." "The decision to grant a motion for new trial is committed to the trial court's sound discretion."
"Although a trial judge has broad discretion to order a new trial, the court should also `respect the collective wisdom of the jury' and `in most cases the judge should accept the finding of the jury, regardless of his own doubts in the matter.'"
The Court construed "non-crystalline" as "no CoQ10 crystals visible by light microscope at magnifications of 640X."
After a full review of the claim-construction briefing and the '888 patent, the Court found "no statements, definitions, or arguments limiting the use of a light microscope to one specific technique or type of light microscopy," and, therefore, concluded "that claim construction is not limited to one type of light microscopy and the use of both bright field illumination and polarized light microscopy comply with claim construction."
Despite this warning, Dr. Brothers testified that he understood polarized light microscopy to be outside of the Court's claim construction. Due to the misleading nature of this testimony, the Court gave the following curative instruction:
Thorne now seeks a new trial on the issue of infringement, arguing that "multiple errors were made regarding the Court's construction of the term `non-crystalline,' including with respect to rulings on the Daubert motions and a `curative' instruction during trial which confused the jury and further prejudiced Plaintiffs."
Thorne argues that the Court's Order on the parties' motions to exclude parts of Dr. Brother's and Dr. Prestwich's expert testimonies (the "Daubert Order"),
Thorne also argues that "the Court's holding in that regard was based upon Xymogen's incorrect argument to the Court that the standard to be applied in determining whether one `skilled in the art' would have used polarizing filters is one skilled `in the art of light microscopy.'"
Xymogen argues that Thorne is merely rehashing its arguments from the Daubert Order briefing despite the Court's rejection of those arguments. "The Court's claim construction ruling and subsequent clarifying order are supported by the intrinsic evidence, and should not be disturbed merely because Thorne regrets failing to have argued for a different construction during the claim construction process."
The Court rejects Thorne's arguments. First, the scope of claim construction was not expanded by the Daubert Order. As with any category that contains sub-categories, the scope of light microscopy was not expanded by the Court's finding that two methods, or "sub-categories," of light microscopy fit within the definition. The scope of claim construction would only be expanded if the original construction specifically limited light microscopy to one method and then the Court allowed for a second method to be used. That is not the case here. Thorne failed to mention any method of light microscopy until their attempt to exclude Dr. Prestwich's testimony two months before trial, so no limitation was ever placed on "light microscopy."
Second, Thorne misunderstands the Daubert Order if it thinks that the Court based its findings on the argument that a person having ordinary skill in the art ("PHOSITA") of light microscopy is the standard by which to determine whether a polarizing filter fell within claim construction. As the Court plainly stated, "[c]laim terms are generally given their ordinary and accustomed meaning as understood by one of ordinary skill in the art,"
Further, Thorne provided no evidence that a PHOSITA of manufacturing CoQ10 supplements would only use bright field illumination, thereby warranting exclusion of Dr. Prestwich's testimony and a re-visiting of the Court's construal of "non-crystalline." Thorne alleged that the inventor of the patented products only used bright field illumination, but provided no further evidence supporting this, and there is no special definition clearly stated in the patent specification or file history that a polarized filter cannot or should not be used.
Despite these findings, Thorne argues that the Daubert Order and curative instruction were made in error because Donald Steele and Thomas Rumolo, both PHOSITAs of manufacturing CoQ10 supplements, testified in favor of Thorne's construction at trial. According to Thorne, "Mr. Steele confirmed that, when creating the formulations that resulted in the '888 patent, he looked through a microscope to determine whether crystals were present."
These statements from Mr. Rumolo and Mr. Steele, however, say nothing of the method of light microscopy used. They state that a microscope was used, but no further detail was elicited from them. Regardless, even if they specified the type of light microscopy used, they did not state that polarized light microscopy could not be used. And while that testimony may not have been appropriate in front of the jury, as it would be arguing claim construction, both parties had access to these witnesses long before trial.
Further, evidence that a PHOSITA in manufacturing CoQ10 supplements would understand light microscopy as being limited to bright field illumination was not, and has not been provided to the Court. On the contrary, one of Thorne's earlier experts, Kent Rader, submitted an expert report on behalf of Eurofins Scientific Inc., Supplement Analysis Center in which Eurofins analyzed the accused products using a "light microscope with a polarizing filter."
For these reasons, the Court finds that the Daubert Order was correct in stating that bright field illumination and polarized light microscopy are both methods of light microscopy that comply with claim construction.
Thorne argues for the first time that the Court's construction of "non-crystalline" "would allow virtually any microscopic technique to be used," and is thus invalid due to its indefiniteness.
"[A] patent is invalid for indefiniteness if its claims, read in light of the specification delineating the patent, and the prosecution history, fail to inform, with reasonable certainty, those skilled in the art about the scope of the invention."
Thorne argues that, with no limit to the methods of light microscopy that may be used under claim construction, "there would be no certainty whatsoever, and a potential infringer presumably must exhaust all of those techniques to determine whether it was infringing or not, as would a patentee."
While the Court did not limit light microscopy to a specific method, the claim construction is not indefinite. First, Thorne has not provided evidence that a PHOSITA in the manufacturing of CoQ10 supplements could not determine whether a product was within the scope of the claims.
Second, a PHOSITA in the manufacturing of CoQ10 supplements knows that the product must not contain CoQ10 crystals that are visible under a light microscope at 640X magnification. This PHOSITA, therefore, knows exactly what type of crystal he is looking for, the magnification to consider, and the type of microscope to use. This PHOSITA would also know the specific characteristics and qualities of CoQ10 crystals, including the color, whether the crystals are birefringent, and what the crystals look like under a microscope. He would, therefore, know the different methods of light microscopy that would be best for determining whether CoQ10 crystals are visible at the specified magnification, and it would be unnecessary for him to go through every single method of light microscopy in his search.
Finally, Thorne argues that "[t]here is no reason Plaintiffs should have been tasked with excluding every possible light microscopy technique during claim construction, nor should they have been expected to foresee what technique Xymogen may have employed to avoid a finding of infringement."
No party should be tasked with excluding everything that a definition at claim construction may cover. However, if a PHOSITA of manufacturing CoQ10 supplements would understand "light microscopy" as referring to only one method, then it was Thorne's duty to make the argument for that limitation during claim construction. Thorne did not. Instead, Thorne argued that the Court should construe non-crystalline as "lacking crystals visible by light microscope at magnifications of 640X," a definition that was less specific than the patent specification and was too ambiguous as it did not specify the type of crystals which must be lacking in the product. For these reasons, the Court finds that the original claim construction is not invalid due to indefiniteness.
The Tenth Circuit has produced conflicting precedent regarding the standard for granting a new trial due to an erroneous instruction.
Thorne argues that the errors in the Daubert Order were "compounded when Xymogen sought to elicit testimony from Dr. Brothers regarding the use of polarized light," and the Court gave a curative instruction which "made it very clear that the scope of the construction had changed, prejudicing Plaintiffs and creating juror confusion."
As previously stated, the scope of claim construction was not changed by the Daubert Order. The curative statement was only necessary because Thorne's expert, Dr. Brothers, did exactly what Thorne sought to keep Dr. Prestwich from doing when Dr. Brothers made misleading statements regarding the scope of claim construction. With the clarification that both methods of light microscopy fit within claim construction, the jury was able to properly weigh the strengths and weaknesses of the two methods presented by the parties as they sought to determine "whether further testing with the use of polarized light would have made Dr. Brothers' tests more reliable."
For these reasons, the Court finds that a new trial is not warranted as a result of the Daubert Order or the issuance of the curative instruction. Therefore, the Court denies this Motion.
Thorne's second motion for new trial asserts that the evidence presented at trial was insufficient for the jury to find invalidity due to derivation under 35 U.S.C. § 102(f) because Xymogen failed "to prove by clear and convincing evidence that Thomas Rumolo conceived of every element of Claims 1 and 5 of the '888 patent as construed by the Court."
"A `motion for a new trial on the ground that the verdict of the jury is against the weight of the evidence is normally one of fact and not of law and is addressed to the discretion of the trial court."
Invalidity based on the "claim that a patentee derived an invention addresses originality .. . [and] asserts that the patentee did not `invent' the subject matter of the count because the patentee derived the invention from another."
"Conception is the formation `in the mind of the inventor of a definite and permanent idea of the complete and operative invention, as it is therefore to be applied in practice.'"
Thorne argues that "[t]here is no record evidence from which a rational juror could have concluded that Mr. Rumolo conceived of: (1) a non-crystalline CoQ10 composition, meaning no CoQ10 crystals visible by light microscope at magnifications of 640x; and (2) a carrier oil."
Xymogen argues that "Thorne incorrectly suggests that because Mr. Rumolo [reduced to practice one embodiment
The Court finds that there was evidence presented at trial from which the jury could find that Mr. Rumolo conceived of the patented formula. First, Dr. Judy's original examination of the product that came from Mr. Rumolo's formula was conducted prior to claim construction, so the statement that the examination revealed crystals was made without the limitations that the patent or claim construction set on the term "non-crystalline."
Second, the jury was provided with the following testimony from Mr. Rumolo:
According to the evidence presented at trial, Dr. Judy and Mr. Steele then took this formula and reduced it to practice.
Finally, while Mr. Rumolo's testimony alone is not enough to prove conception,
The evidence presented at trial also supports the argument that the formula contained avocado oil that functioned as a "carrier oil." There was disagreement regarding the scientifically correct description of how avocado oil functions in the intestines, but Thorne itself elicited testimony from Mr. Rumolo that what he called an "absorption facilitator" was the equivalent of a "carrier oil."
However, Thorne argues that Xymogen cannot
This argument, while best addressed in conjunction with Thorne's third new trial motion, ignores the fact that the jury could have relied on some of Dr. Abato's testimony, that avocado oil acted as a "carrier oil," but not other testimony.
Therefore, the Court finds that that there was sufficient evidence presented at trial for the jury to find that Mr. Rumolo conceived of the original formula Dr. Judy and Mr. Steele later reduced to practice in the '888 patent.
Regarding the communication requirement in the test for derivation, "[t]he communication must be sufficient to enable one of ordinary skill in the art to make the patented invention."
Next, Thorne argues that a new trial is warranted because the jury's verdict of noninfringement is not supported by the evidence at trial. According to Thorne, "Dr. Prestwich testified that the Accused Products contained crystals visible by microscope examination with a polarizing filter; however, he offered no testimony whatsoever to demonstrate that those were [CoQ10 crystals
The jury was asked in the verdict form whether Xymogen had infringed claim 1 or claim 5 and the jury found that neither had been infringed. It was Thorne's burden to prove infringement by a preponderance of the evidence and they failed to meet that burden.
For these reasons, the Court finds that Thorne's arguments regarding insufficiency of the evidence in support of the jury's findings of noninfringement fail. Therefore, the Court denies Thorne's Motion for New Trial Based on Insufficiency of the Evidence.
In its third motion, Thorne seeks a new trial on infringement and invalidity due to derivation under Federal Rule of Civil Procedure 49(b)(4), asserting that the jury's findings on those claims are "fundamentally and irreconcilably inconsistent."
This Motion stems from the final day of trial in which Xymogen allegedly invited inconsistency in the verdict during its closing argument by stating:
Thorne moved for a curative instruction, arguing that the instruction was necessary because Xymogen's closing statements suggested to the jury that they could "consider Mr. Rumolo a joint or co-inventor even if he did not conceive of the `non-crystalline' limitation . . . ."
The Court declined to give the instruction, finding that Xymogen's remarks were not misleading as they clarified that Mr. Rumolo's statement regarding a "crystal-free" formula was made before the Court construed the meaning of "non-crystalline." The Court also stated that "the jury has been deliberating for several hours at this point. To now hand them an additional jury instruction would be prejudicial as they may be inclined to give that instruction undue weight."
When the jury returned the Verdict, Thorne believed that the verdict was flawed and, before the jury was discharged, requested "that the Court immediately order the jury to further deliberate and consider its answers and verdict, or to order a new trial pursuant to Fed.R.Civ.P. 49(b)(4)."
A verdict form which asks the jury to only answer questions of fact is normally considered a special verdict form under Rule 49(a).
When a general verdict form's "answers are inconsistent with each other and one or more is also inconsistent with the general verdict, judgment must not be entered; instead, the court must direct the jury to further consider its answers and verdict, or must order a new trial."
Under this Rule, "[a] verdict is irreconcilably inconsistent only when the essential controlling findings are in conflict, the jury has failed utterly to perform its function of determining the facts, and its verdict is a nullity."
Thorne argues that, "if Claims 1 and 5 were derived from Rumolo, then Rumolo's invention by necessity also infringes those same claims. But if his formulation does not infringe Claims 1 and 5, those claims cannot be derived from him."
In addressing the merits of the Motion, Xymogen argues that Thorne's "entire motion is based on a single factual flaw: [that the Accused Products and Mr. Rumolo's formula are identical.]"
Xymogen points out that Mr. Rumolo's formula, the Accused Product labels, and the NVC Master Formula documents contain different amounts and percentages of ingredients. Xymogen also notes that the jury did not make specific findings on whether the formula and the accused products were identical, and argues that "Thorne relies solely on speculation by Mr. Mahoney and attorney argument about the composition of the products."
Thorne contends, however, that the "[t]he only difference in the ingredients is that the Accused Products have two additional ingredients,"
Despite conflicting testimony and arguments as to whether the ingredients in the accused products and Mr. Rumolo's formula are identical, it is not the Court's role at this stage to weigh the evidence. With no finding from the jury as to whether the accused products and Rumolo's formula were identical, and with argument and evidence at trial in support of Xymogen's theory that the accused products are not the same as Rumolo's formula, the Court finds that Xymogen's theory is plausible. With that theory, the jury's findings of invalidity due to derivation and noninfringement are reconciled, and the Court denies Thorne's Motion.
The Verdict Form asked the jury to find whether any claim of the '888 patent was invalid due to derivation and, in a separate question, whether any claim was invalid due to improper inventorship.
The purpose of a motion to alter or amend a judgment under Rule 59(e) "is to correct manifest errors of law or to present newly discovered evidence."
Xymogen argues that the entire patent is invalid, despite the jury only considering the validity of claims 1 and 5, as the remaining claims either depend on the now invalid claims or are interrelated and, therefore, invalid as a matter of law. Thorne, however, argues that "[t]he other claims retain the presumption of validity imposed by statute because Xymogen did not seek to prove that they were invalid, nor prove to the jury's satisfaction that they were invalid."
It is true that Xymogen only sought to prove the invalidity of claims 1 and 5 of the '888 patent. That is what Xymogen stated in the Pretrial Order,
Xymogen seeks attorney's fees totaling $2,231,234.35, alleging that Thorne knew as early as November 21, 2014, that the accused products did not infringe the '888 patent and that the '888 patent was invalid, but continued to litigate in bad faith, entitling Xymogen to recover attorney's fees under 35 U.S.C. § 285.
"Section 285 demands a simple discretionary inquiry; it imposes no specific evidentiary burden,"
"District courts may determine whether a case is `exceptional' in the case-by-case exercise of their discretion, considering the totality of the circumstances."
Regarding motivation, "motivation to harass or burden an opponent may be relevant to an `exceptional case' finding[, but] motivation to implement the statutory patent right by bringing suit based on a reasonable belief in infringement is not an improper motive."
Xymogen concedes that "Thorne could conceivably have had a plausible basis for believing it could succeed on the merits when it first filed suit in August of 2013," but alleges that over the course of litigation "it became increasingly obvious that no reasonable litigant could expect success on the merits."
In response, Thorne details the evidence it produced at trial, arguing that they had reason to expect success on the merits of the case. Specifically, Thorne refers to the documents produced by Xymogen's supplier stating the makeup of the accused products, the expert testimony from Dr. Brothers and Dr. Abato that the accused products infringed claims 1 and 5, and the evidence supporting the argument that Mr. Steele and Dr. Judy conceived of the patented formula.
The Court finds that, even at the close of trial, with all of the evidence before the jury, there was a reasonable possibility of success for either side. This is partially evidenced by the Court's denial of Xymogen's Rule 50(a) motion, in which the Court found
Thorne also proffered evidence of a plausible theory opposing Xymogen's invalidity claims. And while the evidence at various points during trial may have favored one side or the other, there was no uncontroverted evidence or inevitable outcome that would lead the Court to find Thorne's efforts unreasonable and, therefore, consider this case to be exceptional.
Regarding evidence of Thorne litigation in bad faith, Xymogen argues that Dr. "Brothers revealed that Thorne's counsel explicitly instructed him not to use the scientific standard of polarized light microscopy to examine the Accused Products."
These arguments lack sufficient support for the Court to find that Thorne acted in bad faith. First, even if Dr. Brothers was instructed to only use bright field illumination, bright field illumination is a valid technique used in light microscopy, and the decision to use one technique over the other does not demonstrate bad faith. Second, the determination that bright field and polarized light could be used had not been made until after Thorne's Motion to exclude parts of Dr. Prestwich's testimony, and Thorne had the right to make the Motion. There is also no evidence that Thorne's only motivation was to stamp out competition or that the past five years of litigation in this suit were based on animosity toward a former employer. Xymogen itself said that "Thorne could conceivably have had a plausible basis for believing it could succeed on the merits when it first filed suit in August of 2013 . . . ."
Finally, as in all cases, both sides made mistakes, but neither side's actions demonstrated bad faith or rose to a level that would make this case exceptional under the statute or in light of the actions of the opposing party. Therefore, the Court finds that attorney's fees are not warranted under § 285.
It is therefore
ORDERED that Plaintiffs' New Trial Motions (Docket Nos. 404, 406, and 410) are DENIED;
ORDERED that Defendant's Motion to Strike (Docket No. 415) and Motion for Attorney's Fees (Docket No. 396) are DENIED; and
ORDERED that Plaintiffs' Motion to Alter Judgment (Docket No. 413) is GRANTED. The Judgment will be amended to state, "IT IS ORDERED AND ADJUDGED that Defendant's accused products are not infringing claims 1 and 5 of the '888 patent, and claims 1 and 5 of the '888 patent are invalid."
