Patent Watch: ArcelorMittal Fr. v. AK Steel Corp.

by BakerHostetler
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[T]he commercial success of the embodiment with additional unclaimed features is to be considered when evaluating the obviousness of the claim, provided that embodiment's success has a sufficient nexus to the claimed and novel features of the invention.

On November 30, 2012, in ArcelorMittal Fr. v. AK Steel Corp., the U.S. Court of Appeals for the Federal Circuit (Dyk,* Clevenger, Wallach) affirmed-in-part, reversed-in-part, vacated-in-part and remanded the district court's judgment entering the jury verdict that AK Steel did not infringe U.S. Patent No. 6,296,805, which related to a boron steel sheet with an aluminum-based coating applied after rolling the sheet to its final thickness, and that the asserted claims were invalid as anticipated and obvious. The Federal Circuit stated:

By defining "high" mechanical resistance as greater than 1500 MPa, the prior art here suggests that "very high" mechanical resistance would be understood to be at least that high. Accordingly, both the intrinsic evidence and extrinsic evidence support the district court's conclusion that "a very high mechanical resistance" means a mechanical resistance of 1500 MPa or greater. Therefore, we affirm the district court's construction of "the steel sheet has a very high mechanical resistance.". . .

A claim is anticipated only where "each and every limitation is found either expressly or inherently in a single prior art reference." Anticipation must be proven by clear and convincing evidence. [W]hen a prior art reference discloses a "definite and limited class" of suitable members within a general formula, it may be read to disclose each member of that class. . . . There is insufficient evidence that the varieties of paints and metal alloys are sufficiently narrow that one of ordinary skill in the art would "at once envisage each member of this limited class." Without an explicit disclosure of aluminum coating or substantial evidence that aluminum belonged to a sufficiently definite and limited class of possible coatings, the jury verdict of anticipation based on [the prior art reference] Bano cannot stand. We therefore reverse the district court's denial of JMOL as to anticipation.

ArcelorMittal concedes that "each element of the invention" was known in the prior art. The jury found the asserted claims of the '805 patent obvious in view of Bano in combination with French Patent No. 1,297,906 . . . . Whether a particular technology is analogous art is a question of fact. As with the evidence about whether a skilled artisan would read Bano to disclose precoating, we think this factual dispute was for the jury to resolve. We also conclude that substantial evidence supports the jury's determination that there was a sufficient motivation to combine. AK Steel provided significant expert testimony that a person of ordinary skill in the art would have had the knowledge to combine the aluminum coating disclosed by the French '906 patent with the pre-coating that the jury found Bano disclosed and would have expected to succeed. In short, the jury properly concluded that AK Steel had established a prima facie case of obviousness. The district court properly denied ArcelorMittal's JMOL motion of non-obviousness.

The final issue is whether the district court's erroneous claim construction of "hot-rolled steel sheet" requires a new trial on obviousness. ArcelorMittal argues that a new trial is necessary because under the district court's claim construction the jury could not consider the commercial success of their cold-rolled commercial product. Although ArcelorMittal's commercial success evidence was before the jury, the district court instructed the jury only to consider "[c]ommercial success or lack of commercial success of products covered by the asserted claims." The jury was also instructed that only steel sheet hot-rolled to its final thickness was covered by the asserted claims. Thus, the jury was proscribed from considering the commercial success of ArcelorMittal's cold-rolled steel sheet.

A district court's incorrect claim construction may require a new trial, but only where the party seeking a new trial shows that they were prejudiced by the error. AK Steel argues that it is not necessary to consider the commercial success of the cold-rolled product because of the well-established principle that claims which read on obvious subject matter are unpatentable even if they also read on nonobvious subject matter. AK Steel urges that even if the claims included both hot-rolled steel (which was not cold-rolled) and cold-rolled steel, the jury's verdict that the hot-rolled steel embodiment was obvious rendered the whole claim obvious whether or not the cold-rolled embodiment is nonobvious in view of its commercial success.

However, this is not a situation in which the claims themselves describe distinct alternative embodiments of the invention, and where the obviousness of one embodiment would invalidate the entire claim. Rather, it is a situation in which the claim is limited to steel that is hotrolled, but contains "comprising" language permitting the performance of an additional (cold-rolling) step. In such circumstances our cases make clear that the commercial success of the embodiment with additional unclaimed features is to be considered when evaluating the obviousness of the claim, provided that embodiment's success has a sufficient nexus to the claimed and novel features of the invention. [T]he required consideration of commercial success includes a threshold determination of whether the commercial success has the necessary nexus with the claimed invention. The same rules apply here.

The commercial success of ArcelorMittal's cold-rolled embodiment must be considered to the extent that its success results from the claimed combination of elements that constitutes the invention, rather than from cold-rolling, which was not claimed and already known in the prior art, or from other unclaimed features. In other words, whether there is a nexus here depends upon a comparison between cold-rolled steel produced by the patented process and cold-rolled steel produced by alternative processes to see if the former achieved material commercial success over and above the latter. Absent a demonstrated nexus, ArcelorMittal's commercial success evidence is not significant. The remaining issue is whether a new trial on obviousness is required to address the issue of commercial success. We think this is not a case in which the prima facie case so strong that, as a matter of law, it would overcome ArcelorMittal's commercial success evidence. Therefore, we conclude that the district court's claim construction prejudiced ArcelorMittal with respect to obviousness. Accordingly, we vacate the jury's obviousness verdict and remand for a new trial addressing only the commercial success aspect of obviousness and infringement under the correct claim construction.

If you have questions about the material presented above, please contact Dr. Lawrence M. Sung ( lsung@bakerlaw.com or 202.861.1537) or any member of our Intellectual Property Team.

See information regarding BakerHostetler's Patent Litigation and IP Prosecution and Portfolio Management practices.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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