Solvay S.A. v. Honeywell Specialty Materials LLC et al
Filing
299
MEMORANDUM OPINION. Signed by Judge Sue L. Robinson on 8/26/2011. (nmf)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF DELAWARE
SOLVAY, S.A.,
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Plaintiff,
v.
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HONEYWELL SPECIALTY
MATERIALS LLC and HONEYWELL
INTERNATIONAL INC.,
Defendants.
Civ. No. 06-557-SLR
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Richard L. Horwitz & David Ellis Moore of Potter Anderson & Corroon, LLP, Wilrnington,
Delaware. Attorneys for Plaintiff. Of Counsel: Barry J. Herman, Jean-Paul Lavalleye,
Richard D. Kelly, Jeffrey B. Mcintyre, Tia D. Fenton & John F. Presper of Obion,
Spivak, McClelland, Maier & Neustadt, PC.
Thomas C. Grimm & Benjamin J. Schladweiler of Morris, Nichols, Arsht & Tunnell,
Wilmington, Delaware. Attorneys for Defendants. Of Counsel: Robert G. Krupka,
Laura M. Burson & Guy Ruttenberg of Kirkland & Ellis, LLP.
MEMORANDUM OPINION
Dated: August J.lo , 2011
Wilmington, Delaware
~~Udge
I. INTRODUCTION
Plaintiff Solvay, S.A. ("Solvay") brought suit against defendants Honeywell
Specialty Materials LLC and Honeywell International Inc. (collectively, "Honeywell")
asserting, inter alia, infringement of U.S. Patent No. 6,730,817 ("the '817 patent"). The
parties cross-moved for summary judgment regarding infringement and validity of the
'817 patent. (0.1. 121,0.1. 134) On December 9,2008, this court granted Honeywell's
motion for summary judgment of invalidity of the '817 patent, concluding that Honeywell
was the first inventor pursuant to 35 U.S.C. § 102(g). (0.1. 230) The court also granted
Solvay's motion for summary judgment of infringement of claims 1,5-7 and 10-11 of the
'817 patent, and granted in part Honeywell's motion for summary judgment of no
infringement, concluding that claims 12-18, 21 and 22 of the '817 patent were not
infringed. (0.1. 229) On appeal, the Federal Circuit upheld the court's determination on
infringement but reversed in part the court's opinion on invalidity, holding that
Honeywell was not a prior inventor of the '817 patent for purposes of § 102(g). See
Solvay S.A. v. Honeywelllnt'l, Inc., 622 F.3d 1367, 1370 (Fed. Cir. 2010).
Presently before the court are: (1) Honeywell's renewed motion for summary
judgment of invalidity of the '817 patent under 35 U.S.C. § 102(g) (0.1. 259) and its
motion for leave to file same (0.1. 251); (2) Honeywell's motion for summary judgment
of no willful infringement (0.1. 274); (3) Honeywell's motion for leave to file a motion for
summary judgment of invalidity of the '817 patent under 35 U.S.C. § 102(e) (0.1. 282);
and (4) Solvay's motion for leave to file a sur-reply brief in opposition to Honeywell's
motion for summary judgment of no willful infringement (0.1. 298). For the reasons that
follow, Honeywell's renewed motion for summary judgment of invalidity under § 102(g)
(0.1. 259) is denied, and its motion for leave to file its renewed motion for summary
judgment (0.1. 251) is denied as moot. Honeywell's motion for summary judgment of
no willful infringement (0.1. 274) is granted. Honeywell's motion for leave to file its
motion for summary judgment of invalidity under § 102(e), which was not contemplated
by the court's April 29, 2011 scheduling order, is denied. (0.1. 282) Solvay's motion for
leave to file a sur-reply brief (0.1. 298) is denied as moot.
II. BACKGROUN0 1
Solvay's '817 patent, which has a priority date of October 23, 1995, discloses
and claims processes for making 1,1,1 ,3,3-pentafluoropropane ("HFC-245fa") by
reacting 1,1,1 ,3,3-pentachloropropane C'HCC-240fa") with hydrogen fluoride ("HF") in
the presence of a hydrofluorination catalyst. The HFC-245fa product formed by the
processes of the '817 patent is one of a group of non-ozone depleting
hydrofluorocarbons ("HFC") that were legislatively mandated to replace ozone-depleting
chlorofluorocarbons ("CFC") and hydrochlorofluorocarbons ("HCFC"). The claims of the
'817 patent relate to processes for making HFC-245fa that include continuously drawing
off gaseous HFC-245fa and hydrogen chloride ("HC!") from the reaction mixture.
On July 11, 1994, Honeywell filed a patent application that later issued as United
States Patent No. 5,574,192 ("the '192 paten!"). Honeywell's '192 patent claims a
process for making 245fa by reacting 240fa with hydrogen fluoride in the presence of a
1A more detailed description of the facts is set forth in both this court's previous
opinion, Solvay, S.A. v. Honeywell Specialty Materials LLC, 591 F. Supp. 2d 729 (D.
Del. 2008), and the Federal Circuit's opinion, Solvay S.A. v. Honeywelllnt'l, Inc., 622
F.3d 1367 (Fed. Cir. 2010).
2
catalyst. (D.1. 286, Ex. 3) Solvay amended the claims of the '817 patent to claim an
improvement over the '192 patent which relates to withdrawing 245fa from the reactor
continuously as it is being formed. (D.1. 136, Ex. 13)
In early 1994, Honeywell entered into a research contract with the Russian
Scientific Center for Applied Chemistry ("RSCAC"), pursuant to which the RSCAC
performed process development studies in Russia for the commercial production of
HFC-245fa. 2 (D.1. 264 at 3) The RSCAC sent a report detailing the results of its
studies to Honeywell in July 1994. (D.1. 260 at 3) Prior to Solvay's October 1995
priority date, Honeywell used RSCAC's report to duplicate RSCAC's experiments in the
United States. 3 (D.1. 264 at 4) Honeywell then continued working to develop and
perfect its process for the preparation of HFC-245fa throughout the summer of 1995,
ultimately filing an application to patent the process in July 1996, which resulted in U.S.
Patent No. 5,763,706 ("the '706 patent"). (ld.)
III. STANDARD OF REVIEW
"The court shall grant summary judgment if the movant shows that there is no
genuine dispute as to any material fact and the movant is entitled to judgment as a
matter of law."4 Fed. R. Civ. P. 56(a). The moving party bears the burden of proving
2For purposes of this proceeding, the parties do not dispute the fact that the
process performed by the RSCAC engineers corresponds to the invention claimed in
the '817 patent, and that the RSCAC engineers conceived the invention and reduced it
to practice in Russia. (D.1. 264 at 3)
3The Federal Circuit found that Honeywell replicated or reproduced the work of
the RSCAC engineers. See Solvay, 622 F.3d at 1371-72.
4Rule 56 was revised by amendment effective December 1, 2010. 'The standard
for granting summary judgment remains unchanged," and U[t]he amendments will not
3
that no genuine issue of material fact exists. See Matsushita Elec. Indus. Co. v. Zenith
Radio Corp., 475 U.S. 574, 586 n.1 0 (1986). "Facts that could alter the outcome are
'material,' and disputes are 'genuine' if evidence exists from which a rational person
could conclude that the position of the person with the burden of proof on the disputed
issue is correct." Horowitz v. Fed. Kemper Ufe Assurance Co., 57 F .3d 300, 302 n.1
(3d Cir. 1995) (internal citations omitted). If the moving party has demonstrated an
absence of material fact, the nonmoving party then "must come forward with 'specific
facts showing that there is a genuine issue for triaL'" Matsushita, 475 U.S. at 587
(quoting Fed. R. Civ. P. 56(e». The court will "view the underlying facts and all
reasonable inferences therefrom in the light most favorable to the party opposing the
motion." Pa. Coal Ass'n v. Babbitt, 63 F.3d 231, 236 (3d Cir. 1995). The mere
existence of some evidence in support of the nonmoving party, however, will not be
sufficient for denial of a motion for summary judgment; there must be enough evidence
to enable a jury reasonably to find for the nonmoving party on that issue. See
Anderson v. Uberty Lobby, Inc., 477 U.S. 242, 249 (1986). If the nonmoving party fails
to make a sufficient showing on an essential element of its case with respect to which it
has the burden of proof, the moving party is entitled to judgment as a matter of law.
See Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986).
affect continuing development of the decisional law construing and applying these
phrases." Fed. R. Civ. P. 56 advisory committee's note to 2010 Amendments.
4
IV. DISCUSSION
A. Section 102(g)
1. Prior invention
Pursuant to § 102(g), an applicant may not receive a patent if "before such
person's invention thereof the invention was made in this country by another inventor
who had not abandoned, suppressed, or concealed it." 35 U.S.C. § 102(g)(2);5 see
also Apotex USA, Inc. v. Merck & Co., 254 F.3d 1031, 1035 (Fed. Cir. 2001).
According to the Federal Circuit, this section "retains the rules governing the
determination of priority of invention." Hybritech, Inc. v. Monoclonal Antibodies, Inc.,
802 F.2d 1367,1376 (Fed. Cir. 1986) (quoting Kimberly-Clark Corp. v. Johnson &
Johnson, 745 F.2d 1437, 1444 (Fed. Cir. 1984». To this end, a party alleging prior
invention may establish that he was the first to invent by showing that he was either:
(1) the first to reduce the invention to practice; or (2) the first to conceive the invention6
and to then exercise reasonable diligence in attempting to reduce the invention to
practice from a date just prior to the applicant's conception to the date of his reduction
to practice. See Union Carbide Chems. & Plastics Tech. Corp. v. Shell Oil Co., 308
F.3d 1167, 1189 (Fed. Cir. 2002). The Federal Circuit has explained that
5Consistent with the Federal Circuit's decision in this case, the court applies the
post-1999 version of § 102(g).
6The Federal Circuit has determined that the RSCAC conceived the '817 patent,
and that Honeywell's reproduction of the RSCAC's invention did not constitute
conception by Honeywell. See Solvay S.A. v. Honeywelllnt'l, Inc., 622 F.3d 1367, 1377
(Fed. Cir. 2010). Thus, the issue presently before the court is whether the RSCAC
reduced the invention to practice in this country by sending instructions to Honeywell,
which Honeywell used to perform the process in the United States.
5
[a] principal purpose of § 102(g) is to ensure that a patent is awarded to a
first inventor. However, it also encourages prompt public disclosure of an
invention by penalizing the unexcused delay or failure of a first inventor to
share the "benefit of the knowledge of [the] invention" with the public after
the invention has been completed.
Checkpoint Sys v. U.S. Int'l Trade Comm'n, 54 F.3d 756,761 (Fed. Cir. 1995) (citing
Paulik v. Rizkalla, 760 F.2d 1270, 1280 (Fed. Cir. 1985».
The court concludes that, as a matter of law, the RSCAC qualifies as "another
inventor" who reduced the invention to practice "in this country." It is undisputed that
the RSCAC conceived the invention and reduced it to practice in Russia. See Solvay,
622 F.3d at 1371-72. The Federal Circuit also determined that the RSCAC sent
instructions to Honeywell on how to perform the process, and that Honeywell used
those instructions to duplicate the RSCAC's experiments in the United States. Id.
According to Solvay, Honeywell's duplication of the RSCAC's process is insufficient for
the RSCAC to qualify as "another inventor" under the statute because the Federal
Circuit determined that the RSCAC performed the act of inventing in Russia, as
opposed to inventing the process in this country. (0.1. 264 at 5-8) However, the
Federal Circuit made no determination about whether the RSCAC reduced the
invention to practice in the United States. See Solvay, 622 F.3d at 1376.
Federal Circuit precedent indicates that the RSCAC's actions are sufficient to
establish its conception in this country for purposes of § 102(g)(2), regardless of its
activities in Russia. In Scott v. Koyama, 281 F.3d 1243 (Fed. Cir. 2002), the Federal
Circuit found that Scott conceived an invention in the United States by sending a written
disclosure of the process to his assignee's United States subsidiary. More specifically,
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the Federal Circuit held that "the inventor of an invention of foreign origin may rely on
the date that the invention was disclosed in the United States, as a conception date for
priority purposes." Id. at 1246-47. However, the Court concluded that Scott's written
disclosure of the invention did not constitute a reduction to practice in the United States
because the subsidiary did not actually perform the process in the United States. Id.
As in Scott, the RSCAC invented its process abroad and "conceived" it in the United
States by disclosing it in writing to a United States affiliate. Scott is distinguishable from
the facts of the instant case, however, because (unlike the United States subsidiary in
Scott) Honeywell actually performed the process in the United States based on the
information provided by the RSCAC to duplicate the RSCAC's experiments. See
Solvay, 622 F.3d at 1371-72.
In Holmwood v. Sugavanam, 948 F.2d 1236, 1238-39 (Fed. Cir. 1991), an
inventor who conceived and reduced to practice a fungicide abroad was found to have
successfully reduced the invention to practice in the United States for purposes of §
102(g) when his assignee sent the fungicide from Germany to a United States affiliate
to verify the positive test results. The Federal Circuit held that the fungicide was
reduced to practice in the United States as a result of the tests performed here, which
showed that the fungicide worked for its intended purpose. Id.; see also Therasense,
Inc. v. Becton, Dickinson & Co., 560 F. Supp. 2d 835, 865 (N.D. Cal. 2008) (holding
that "an initial reduction to practice outside the United States is not fatal to Abbott's
attempt to meet its burden of production" where the invention was later successfully
performed in the United States). The court concludes that the RSCAC's conception
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and reduction to practice in Russia, followed by its communication of instructions to
Honeywell and Honeywell's performance of the process in the United States based on
those instructions, mirror the facts set forth in Holmwood and demonstrate that the
RSCAC qualifies as "another inventor" who reduced the invention to practice "in this
country" under § 102(g) as a matter of law.
Solvay claims that Holmwood and Scott are inapposite because they address
priority of invention in interferences under § 102(g)(1), as opposed to invalidity based
on prior invention under § 102(g)(2). Prior to 1999, § 102(g) did not distinguish
between invalidity and interferences, stating that a person shall be entitled to a patent
unless,
before the applicant's invention thereofL] the invention was made in this
country by another who had not abandoned, suppressed, or concealed it.
In determining priority of invention there shall be considered not only the
respective dates of conception and reduction to practice of the invention,
but also the reasonable diligence of one who was first to conceive and last
to reduce to practice, from a time prior to conception by another.
35 U.S.C. § 102(g) (1952 & 1994) (emphasis added). The 1999 amendment to the
statute divided the provision into two subsections, with § 102(g)(2) retaining the "made
in this country" language for purposes of determining invalidity:
A person shall be entitled to an invention unless - (g)(1) during the course
of an interference ... another inventor involved therein establishes, to the
extent permitted in section 104, that before such person's invention
thereof[,] the invention was made by such other inventor and not
abandoned, suppressed, or concealed, or (2) before such person's
invention thereof, the invention was made in this country by another
inventor who had not abandoned, suppressed, or concealed it.
35 U.S.C. § 102(g) (2002) (emphasis added). Solvay cites no authority indicating that
the language of § 102(g)(2) should be interpreted differently than the same language
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had been interpreted before the 1999 amendment.
2. Abandonment, suppression and concealment
If a party establishes prior invention under § 102(g) by clear and convincing
evidence, then the burden of production shifts to the patentee to produce evidence
sufficient to create a genuine issue of material fact as to whether the party alleging prior
invention abandoned, suppressed, or concealed the invention. Apotex, 254 F.3d at
1037 -38. If the patentee carries this burden of production, then the party alleging prior
invention may rebut the evidence of abandonment, suppression or concealment with
clear and convincing evidence that affirmative steps were taken to make the invention
publicly known. Id.; see also Friction Div. Prods., Inc. v. Fl. Du Pont de Nemours &
Co., 658 F. Supp. 998,1013 (D. Del. 1987).
The court concludes that Solvay, as the patentee, has produced evidence
"sufficient to create a genuine issue of material fact as to whether the prior inventor had
suppressed or concealed the invention." See Apotex, 254 F.3d at 1037-38. More
specifically, Solvay has produced evidence of a confidentiality agreement between the
RSCAC and Honeywell which precluded the RSCAC from disclosing the invention. (D.I.
253, Ex. 2)
Honeywell rebuts this evidence of concealment with evidence of public
disclosure: (1) the Russian patent application filed on May 25, 1994; (2) Honeywell's
filing of the '706 patent in July 1996; and (3) the September 1997 Solvay Memorandum,
in which the RSCAC openly shared its invention with Solvay. (D.I. 260 at 7-8) Although
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there is no explicit disclosure requirement in § 102(g),7 "the spirit and policy of the
patent laws encourage an inventor to take steps to ensure that the public has gained
knowledge of the invention which will insure its preservation in the public domain or else
run the risk of being dominated by the patent of another." Apotex, 254 F.3d at 1038.
The court cannot fathom how the '706 patent (filed in July 1996) and the September
1997 Solvay Memorandum notified the public of Honeywell's invention in a manner
sufficient to preserve its rights prior to Solvay's October 1995 priority date. Honeywell's
motion is denied and, absent further illumination on this legal issue, the court will
preclude Honeywell from introducing evidence of these disclosures to the jury.
With respect to the May 1994 Russian patent application, the court concludes
that there are genuine issues of material fact as to whether this publication discloses
the subject matter of the '817 patent. s Therefore, Honeywell's renewed motion for
summary judgment of invalidity under § 102(g) is denied.
B. Willfulness
The Federal Circuit set forth a two-pronged standard for establishing willfulness
in In re Seagate Technology, LLC, 497 F.3d 1360 (Fed. Cir. 2007), the first prong of
which states:
7
And the court has found no case law on point.
BEven if the '706 patent were considered, its relevance to the '817 patent for
purposes of § 102(g) is questionable, as the '706 patent includes modifications made
by Honeywell to the RSCAC invention. The Federal Circuit held that H[t]he invention at
issue is the invention claimed in Solvay's '817 patent, not the one claimed in
Honeywell's '706 patent" and Honeywell's '706 patent "is immaterial for the purpose of
assessing Honeywell's prior invention defense under § 102(g)(2)." Solvay, 622 F.3d at
1379. Likewise, it is not clear from the record as to whether the 1997 Solvay
Memorandum discloses the subject matter of the '817 patent.
10
[T]o establish willful infringement, a patentee must show by clear and
convincing evidence that the infringer acted despite an objectively high
likelihood that its actions constituted infringement of a valid patent. The
state of mind of the accused infringer is not relevant to this objective
inquiry.
Id. at 1371 (internal citations omitted). The existence of this objective risk is
"determined by the record developed in the infringement proceeding." Id. The
objective prong is generally not met when the accused infringer maintains a reasonable
defense to infringement, even if the jury ultimately reaches a verdict of infringement.
See Spine Solutions, Inc. v. Medtronic SofamorDanek USA, Inc., 620 F.3d 1305, 1319
(Fed. Gir. 2010) (holding that objective prong is generally not met "where an accused
infringer relies on a reasonable defense to a charge of infringement"); DePuy Spine,
Inc. v. Medtronic Sofamor Danek, Inc., 567 F.3d 1314, 1336 (Fed. Gir. 2009)
(concluding that accused infringer presented a substantial question of noninfringement
which precluded a finding of objective recklessness despite the jury's ultimate finding of
infringement).
If the objective prong is satisfied, the patentee must next establish that "this
objectively-defined risk (determined by the record developed in the infringement
proceeding) was either known or so obvious that it should have been known to the
accused infringer." Seagate, 497 F.3d at 1371. This subjective prong hinges on the
fact finder's assessments of the credibility of witnesses. LG Elecs. U.S.A., Inc. v.
Whirlpool Corp., _ _ F. Supp. 2d _ _, Giv. No. 08-234-GMS, 2011 WL 2610177, at
*10 (D. Del. July 1, 2011). "The drawing of inferences, particularly in respect of an
intent-implicating question such as willfulness, is peculiarly within the province of the
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fact finder that observed the witnesses." Uquid Dynamics Corp. v. Vaughan Co., 449
F.3d 1209, 1225 (Fed. Cir. 2006).
In support of its motion for summary judgment of no willful infringement,
Honeywell contends that it presented credible invalidity defenses which preclude a
finding of willfulness. (0.1. 275 at 7-13) Specifically, Honeywell contends that this
court's prior summary judgment ruling in Honeywell's favor is conclusive evidence that
Honeywell's invalidity defense was credible despite the Federal Circuit's subsequent
reversal of that decision. (Id. at 7-9) Moreover, Honeywell contends that its renewed
motion for summary judgment presents additional invalidity defenses which are also
credible and preclude a finding of objective recklessness. (Id. at 9-10) Honeywell
further contends that the '817 patent is invalid based on Honeywell's own '192 patent,
and the prosecution history of the '817 patent demonstrates the examiner's doubts as
to the '817 patent's validity. (Id. at 10-14) According to Honeywell, to the extent
Solvay's allegations are based on willfulness allegedly occurring after remand from the
Federal Circuit, Solvay cannot prevail because it failed to seek a preliminary injunction.
(Id. at 15-16)
Solvay challenges Honeywell's contention of no willfulness only as it pertains to
the period following the Federal Circuit's decision on October 13, 2010. (0.1. 285 at 1,
12) ("Solvay's allegation of willful infringement is limited to the time period since the
Federal Circuit issued its decision in this case on October 13, 2010.") According to
Solvay, Honeywell has no credible non-infringement defenses, and questions remain
regarding the credibility of Honeywell's new invalidity defenses. (Id. at 12-13,15-18)
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With respect to its failure to seek a preliminary injunction, Solvay contends that the
Federal Circuit's decision in Seagate does not require a patentee to request a
preliminary injunction in cases where such a request would have been futile despite a
likelihood of success on the merits. (Id. at 14) Solvay contends that Honeywell's
litigation misconduct further demonstrates Honeywell's willfulness. (Id. at 18-20)
The court concludes that summary judgment of no willfulness is appropriate
because Honeywell presented a credible invalidity defense, precluding a finding of
objective recklessness despite the Federal Circuit's ultimate rejection of the defense. 9
See Black & Decker, Inc. v. Robert Bosch Tool Corp., 260 Fed. Appx. 284, 291 (Fed.
Cir. 2008) ("[C]redible invalidity arguments demonstrate the lack of an objectively high
likelihood that a party took actions constituting infringement of a valid patent."). In its
December 9, 2008 decision on summary judgment, this court credited Honeywell's §
102(g) invalidity defense, and the court declines to characterize its prior ruling on this
point as baseless. The Federal Circuit's ultimate decision to reject Honeywell's §
102(g) defense following an exhaustive analysis is irrelevant to the willfulness inquiry.
See DePuy Spine, 567 F.3d at 1336 (finding no willful infringement, despite the jury's
ultimate finding of infringement, where accused infringer presented a substantial
question of non-infringement).
Moreover, Solvay discredited its own contentions regarding the baseless ness of
Honeywell's invalidity defenses by failing to move for summary judgment of validity or
9The court rejects Solvay's contention that its claim for willfulness, as it pertains
to the period after the Federal Circuit's October 13,2010 decision, should survive
summary judgment. Solvay cites no authority permitting a willfulness allegation based
upon an interlocutory order by the Federal Circuit.
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willfulness and by presenting arguments which suggest Honeywell's invalidity
contentions are "substantial, reasonable, and far from the sort of easily-dismissed
claims that an objectively reckless infringer would be forced to rely upon." Honeywell
Int'llnc. v. Universal Avionics Sys. Corp., 585 F. Supp. 2d 636,644 (D. Del. 2008)
(internal quotations omitted); see also Cordance Corp. v. Amazon.com, Inc., 639 F.
Supp. 2d 406, 416 (D. Del. 2009) (granting summary judgment of no willfulness where
plaintiff's responses to defendant's invalidity defenses were sUbstantial and plaintiff did
not itself move for summary judgment on defendant's primary defenses). Because the
court finds that Solvay has not presented evidence sufficient to support a finding of
willfulness under Seagate, Honeywell's motion for summary judgment of no willful
infringement is granted.
IV. CONCLUSION
For the reasons stated, Honeywell's renewed motion for summary judgment of
invalidity under § 102(g) is denied, and Honeywell's motion for leave to file its renewed
motion for summary judgment is denied as moot. Honeywell's motion for summary
judgment of no willfulness is granted. Honeywell's motion for leave to file its motion for
summary judgment of invalidity under § 102(e) is denied. Solvay's motion for leave to
file a sur-reply brief is denied as moot. An appropriate order shall issue.
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