Earlier this year, in U.S. Water Services, Inc. v. Novozymes A/S, the Federal Circuit reversed a decision by the U.S. District Court for the Western District of Wisconsin, partially granting judgment as a matter of law in favor of Defendants-Appellees Novozymes A/S and Novozymes North America, Inc. that claims 1, 6, and 12 of U.S. Patent No. 8,415,137 and claims 1, 2, 5, 7–9, and 18–20 of U.S. Patent No. 8,609,399 were invalid as inherently anticipated. In reversing and remanding the District Court, the Federal Circuit determined that Novozymes did not meet its burden at trial of showing that the prior art inherently anticipates the asserted claims.
The dispute between the parties began when Plaintiffs-Appellants U.S. Water Services, Inc. and Roy Johnson filed suit against Novozymes for infringement of the asserted claims of the '137 and '399 patents. A jury determined that the asserted claims were not inherently anticipated by International Publication No. WO 01/62947 A1 ("Veit"). Novozymes responded by moving for judgment as a matter of law, which the District Court granted, and U.S. Water Services then appealed.
The '137 and '399 patents, which share a common specification as continuations of an earlier-filed application, are directed to methods for reducing the formation of deposits of phytic acid salts and phytates on equipment used during ethanol production. Representative claim 1 of the '137 patent recites:
1. A method of reducing formation of insoluble deposits of phytic acid or salts of phytic acid on surfaces in a fuel ethanol-processing equipment, the method comprising:
adding phytase to an ethanol processing fluid in the equipment containing phytic acid or salts of phytic acid under conditions suitable for converting the insoluble phytic acid or phytic acid salts to soluble products; thereby reducing the formation of deposits of insoluble phytic acid or phytic acid salts on surfaces in the equipment; wherein the equipment in which deposit formation is reduced comprises a beer column, and
wherein the pH of the ethanol processing fluid in the beer column is 4.5 or higher during production of ethanol.
The opinion notes that phytase is an enzyme that is capable of breaking down phytic acid found in plant material.
Veit describes a process for producing ethanol, and in particular, discloses the addition of phytase during the fermentation step (or a combined or simultaneous fermentation and saccharification step) of ethanol production that may result in the increase in the fermentation and ethanol yields. In the lone experiment disclosed in Example 1 of Veit, the addition of phytase is shown to improve the fermentation process; the experiment was conducted in a 500 mL bottle in which phytase was added during the pre-saccharification reaction (i.e., prior to fermentation).
At trial, the jury determined that Novozymes had not proven by clear and convincing evidence that Veit anticipates the asserted claims by inherently disclosing the requirement of reducing the formation of insoluble deposits of phytic acid or salts of phytic acid. The jury also determined that Novozymes infringed the asserted claims, and awarded damages of $7,582,966 to U.S. Water Services. Novozymes moved for judgment as a matter of law, arguing that Veit inherently anticipates the asserted claims because Example 1 shows that in the absence of any phytate, no deposits of phytate can form. The District Court granted Novozymes' motion, finding that Veit inherently disclosed using phytase to reduce phytate deposits because Veit's fermentation test expressly disclosed conditions sufficient to break down all the phytic acid present in the ethanol fluid, which would have prevented phytate deposits from forming on ethanol processing equipment.
On appeal, U.S. Water Services argued that the District Court erred because Novozymes failed to show that a rational jury could have found that Example 1 inherently anticipateds the asserted claims since the asserted claims require a reduction of phytate deposits on surfaces on ethanol processing equipment. The Federal Circuit agreed with U.S. Water Services, finding that:
The District Court erred in ruling as a matter of law that Veit inherently anticipates the Asserted Claims. The Asserted Claims require the reduction of phytic acid deposits in specific locations of an ethanol plant such as on the "heat transfer equipment" or in the "beer column." . . . By contrast, Veit does not disclose any examples using phytase to reduce phytic acid deposits in an ethanol plant, but rather describes in Example 1 an experiment in a laboratory bottle.
In particular, the opinion notes that in Veit, the phytase is not added into fermentation, but rather is added into a saccharification step, which differs from the reaction specified in the asserted claims. The opinion indicates that "[e]nzymes that may be effective at saccharification's temperatures may be ineffective at the lower temperatures required during fermentation," and therefore concludes that "Veit's addition of phytase at the pre-saccharification stage cannot disclose the reduction of phytic acid deposits on ethanol processing plant equipment as required by the Asserted Claims." The Federal Circuit also noted that:
[U]nlike the stated limitations for reducing deposits found in the Asserted Claims, Example 1 [of Veit] does not provide any conditions necessary to determine whether any deposit on equipment is formed during the experiment, nor does it provide any specific variables that impact phytase in a way that will always reduce deposits in the plant equipment.
The Federal Circuit therefore determined that there was "substantial evidence to support the jury finding that Example 1 only discloses the possibility of reducing phytic acid concentration below detection levels, which is not legally sufficient to demonstrate inherent anticipation" (emphasis in opinion). Citing Hansgirg v. Kemmer, 102 F.2d 212, 214 (CCPA 1939), for the proposition that "[i]nherency . . . may not be established by probabilities or possibilities," the Court explained that:
Because Example 1 is silent as to whether its Protocol would reduce phytate fouling in the "beer column" or "heat transfer equipment" and Novozymes did not provide evidence that Example 1 satisfies all the required constraints in the Asserted Claims, Veit does not disclose whether any deposits would have formed when using Example 1's Protocol in a fuel ethanol plant.
The Federal Circuit therefore found that Novozymes did not meet its burden at trial of showing by clear and convincing evidence that Example 1 would always eliminate phytic acid deposits under the conditions required by the asserted claims, that a jury could have reasonably found that Veit does not inherently anticipate the asserted claims, and that the District Court erred in overturning the jury's verdict. The Federal Circuit thus reversed and remanded the District Court's decision partially granting judgment as a matter of law in favor of Novozymes.
U.S. Water Services, Inc. v. Novozymes A/S (Fed. Cir. 2019)
Panel: Circuit Judges Moore, Wallach, and Taranto
Opinion by Circuit Judge Wallach