Evonik Degussa GmbH v. Materia Inc.

Filing 1013

OPINION - Signed by Judge Noel L. Hillman on 3/28/18. (rwc)

UNITED STATES DISTRICT COURT
DISTRICT OF DELAWARE

EVONIK DEGUSSA GMBH,
Plaintiff,
v.
MATERIA, INC.,
Defendant.

APPEARANCES:
ERIC JAMES EVAIN
GRANT & EISENHOFER, P.A.
123 JUSTISON STREET
WILMINGTON, DELAWARE 19801
On behalf of Plaintiff
R. ERIC HUTZ
RUDOLPH E. HUTZ
RYAN P. COX
REED SMITH LLP
1201 MARKET STREET, SUITE 1500
WILMINGTON, DELAWARE 19801
On behalf of Plaintiff
JACK B. BLUMENFELD
THOMAS C. GRIMM
MORRIS, NICHOLS, ARSHT & TUNNELL
1201 NORTH MARKET STREET
P.O. BOX 1347
WILMINGTON, DELAWARE 19899
On behalf of Defendant

09-cv-636 (NLH/JS)
OPINION

HILLMAN, District Judge:
Before the Court are three separate but overlapping motions
filed by Evonik.

First is an informal motion by Evonik to find

inequitable conduct.

Second is Evonik’s Motion to set aside the

judgment of no willfulness, find Materia’s pre-verdict
infringement willful on summary judgment, and find Materia’s
post-verdict infringement willful on summary judgment.

Third is

Evonik’s Motion for enhanced damages pursuant to 35 U.S.C.
§ 284.
These motions come to the Court following a January 2017
jury trial on the issues of lack of enablement, lack of an
adequate written description, willfulness of Materia’s
infringement, and damages.

The jury found for Evonik on both

invalidity counterclaims and awarded damages to Evonik for
Materia’s infringement of the ‘528 patent, but found for Materia
on the issue of the willfulness of that infringement.
Subsequently, on August 9, 2017, the Court found for Evonik on
Materia’s counterclaim of invalidity due to indefiniteness.

The

Court then entered Judgment on the jury’s verdict. 1
For the reasons that follow, all of Evonik’s motions will
be denied.

1

This Court has federal question jurisdiction over this
matter pursuant to 28 U.S.C. § 1331 and pursuant to 28 U.S.C.
§ 1338(a) for matters arising under federal patent law.
2

I. Inequitable Conduct
Before the Court is Evonik’s “Opening Brief in Support of
Inequitable Conduct.”

Although not filed as a formal motion,

“Evonik requests that the Court find the ‘590 patent
unenforceable due to inequitable conduct.”

The Court, however,

has already held that it lacks jurisdiction to rule on whether
the ‘590 patent is enforceable because Materia has granted
Evonik a broad covenant not to sue.
Nonetheless, a finding that Materia engaged in inequitable
conduct would support a conclusion that Materia’s counterclaim
against Evonik for infringement of the ‘590 patent – in which
Evonik prevailed on the basis of noninfringement (hereafter “the
‘590 infringement action”) – is an exceptional case under 35
U.S.C. § 285.

A holding that the ‘590 infringement action is an

exceptional case would then open the door to an award of
reasonable attorneys’ fees to Evonik in connection with that
suit.

See 35 U.S.C. § 285 (“The court in exceptional cases may

award reasonable attorney fees to the prevailing party.”);
Sulzer Textil A.G. v. Picanol N.V., 358 F.3d 1356, 1370 (Fed.
Cir. 2004) (“An award of attorneys’ fees under § 285 follows a
two-step analysis.

The court first determines whether the case

is ‘exceptional,’ and, if so, then determines whether an award
of attorneys’ fees is appropriate.”); Ruiz v A.B. Chance Co.,
234 F.3d 654, 669 (Fed. Cir. 2000) (“A finding of inequitable
3

conduct can be the basis for awarding attorney fees under
section 285.”).

In short, Evonik’s application is ultimately

about attorneys’ fees. 2
The Court heard oral argument on June 20, 2017.
Supplemental briefing was completed on August 9, 2017.

For the

reasons that follow, the Court finds Evonik has failed to prove
Materia engaged in inequitable conduct during the prosecution of
the ‘590 patent. 3
Evonik contends that Materia’s inequitable conduct began
during the USPTO interference proceedings (Nos. 105,373 and
105,374) between Professor Grubbs and Professor Nolan, and
continued on through post-interference prosecution of the ‘590

2

Evonik does not cite § 285 in either of its briefs. At
oral argument, the Court asked: “A finding of inequitable
conduct . . . means a finding of an exceptional case entitling
you to some measure of attorneys fees? Is that what this is
ultimately about?” Counsel for Evonik responded: “Yep. . . . if
[Materia] pursued inequitable conduct against [Evonik] for all
this time, then yes, all of this deals down to attorney’s fees.”
(June 20, 2017 Oral Argument Tr., p. 104-05)
3

This Opinion constitutes the Court’s Findings of Fact and
Conclusions of Law pursuant to Rule 52(a)(1). Pierre v. Hess
Oil Virgin Islands Corp., 624 F.2d 445, 450 (3d Cir. 1980)
(holding that to be in compliance with Rule 52(a), findings of
fact and conclusions of law do not need to be stated separately
in a court’s memorandum opinion); see also Ciolino v. Ameriquest
Transp. Servs., Inc., 751 F. Supp. 2d 776, 778 (D.N.J. 2010)
(issuing an opinion which constituted the courts findings of
fact and conclusions of law).
4

patent.

Evonik asserts four separate, but related, bases of

inequitable conduct.
First, it is undisputed that Materia did not disclose the
existence of Materia’s ‘125 patent, and related information
concerning the ‘125 patent. 4

Evonik contends the ‘125 patent is

“but-for prior art,” which Materia disputes.

More specifically,

Evonik asserts Mark Trimmer 5 “knew that the ‘125 patent covered
what the ‘590 patent claimed, making the ‘125 patent
invalidating prior art.”
Second, Evonik asserts that Materia did not disclose
Professor Nolan’s alleged derivation of the subject matter of
the ‘590 patent.

Materia disputes derivation, and as will be

discussed further below, the jury apparently rejected any
finding of derivation when it rendered its verdict against
Evonik and in favor of Materia on the issue of Materia’s
willfulness in infringing the ‘528 patent.
Third, Evonik asserts that Materia failed to disclose the
factual bases for a list of preliminary motions filed by Materia

4

The parties have often referred to this information as “the
Boulder information” because the source of this information was
various filings in patent litigation involving Boulder
Scientific Company, CalTech and Materia.
5

Mark Trimmer is the Executive Vice President of Materia and
Materia’s Senior Vice President of Research and Development.
Trimmer managed the Boulder litigation, the interferences, and
the current litigation. (Trial Tr. p. 1308; Trimmer 1/9/14 Dep.
Tr. p. 215-16)
5

in the interferences, which challenged the patentability of the
‘590 patent.
Lastly, it is undisputed that the Grubbs v. Nolan
interferences were settled.

Evonik contends that the parties to

the interferences “settled with the intent to conceal from the
USPTO Nolan’s derivation, the Boulder Information, and the bases
underlying Materia’s preliminary motions.”
“To prevail on inequitable conduct, an accused infringer
must show that the applicant: ‘(1) made an affirmative
misrepresentation of material fact, failed to disclose material
information, or submitted false material information, and (2)
intended to deceive the [PTO].’”

Leviton Mfg. Co. v. Universal

Sec. Instruments, Inc., 606 F.3d 1353, 1358 (Fed. Cir. 2010)
(alteration in original) (quoting Cargill, Inc. v. Canbra Foods,
Ltd., 476 F.3d 1359, 1363 (Fed Cir. 2007)); see also Transweb,
LLC v. 3M Innovative Props. Co., 812 F.3d 1295, 1303-04 (Fed.
Cir. 2016) (“A judgment of inequitable conduct requires . . .
materiality, knowledge of materiality, and a deliberate decision
to deceive.” (citing Therasense, Inc. v. Becton, Dickinson &
Co., 649 F.3d 1276, 1290 (Fed. Cir. 2011)).
“Intent and materiality are separate requirements.

A

district court should not use a ‘sliding scale,’ where a weak
showing of intent may be found sufficient based on a strong
showing of materiality, and vice versa.
6

Moreover, a district

court may not infer intent solely from materiality.

Instead, a

court must weigh the evidence of intent to deceive independent
of its analysis of materiality.”

Therasense, 649 F.3d at 1290.

In extreme cases of “egregious misconduct,” or “affirmative
misconduct,” “materiality [can be] presumed.”

Apotex, Inc. v.

UCB, Inc., 763 F.3d 1354, 1362 (Fed. Cir. 2014) (referencing
Therasense); see also Transweb, LLC, 812 F.3d at 1304 (“Except
in cases of egregious misconduct, the materiality must reach the
level of but-for materiality.”).
A. Burden of Proof
The Court ordered supplemental briefing from the parties to
help determine what the burden of proof is for inequitable
conduct in the context of a § 285 entitlement to attorneys’
fees.

Specifically, the Court asked: “[M]ust Evonik prove

inequitable conduct by clear and convincing evidence . . . or
must Evonik prove inequitable conduct by a preponderance of the
evidence.”
In Therasense, 649 F.3d 1276, the Federal Circuit
established the burden of proof for finding inequitable conduct.
The Federal Circuit held that “[t]o prevail on the defense of
inequitable conduct, the accused infringer must prove that the
applicant misrepresented or omitted material information with
the specific intent to deceive the PTO.

The accused infringer

must prove both elements – intent and materiality – by clear and
7

convincing evidence.”

Id. at 1287 (citation omitted) (citing

Star Sci. Inc. v. R.J. Reynolds Tobacco Co., 537 F.3d 1357, 1365
(Fed. Cir. 2008)).

In applying this heightened burden, the

Court noted that “prevailing on a claim of inequitable conduct
often makes a case ‘exceptional,’ leading potentially to an
award of attorneys’ fees under 35 U.S.C. § 285.”

Id. at 1289.

The Federal Circuit mentioned this in connection with its
observation that a finding of inequitable conduct has “farreaching consequences.”

Id.

As for the burden of proof for finding a case exceptional,
prior to Octane Fitness, LLC v. Icon Health & Fitness, Inc., 134
S. Ct. 1749 (2014), the standard for finding a case exceptional
was “clear and convincing.”

Brooks Furniture Mfg. v. Dutailer

Int’l, Inc., 393 F.3d 1378, 1382 (Fed. Cir. 2005) (“[T]he
underlying improper conduct and the characterization of the case
as exceptional must be established by clear and convincing
evidence.”), overruled by Octane Fitness, 134 S. Ct. 1749.

In

Octane Fitness, the Supreme Court decided:
[W]e reject the Federal Circuit’s requirement that
patent litigants establish their entitlement to fees
under § 285 by “clear and convincing evidence.” We have
not interpreted comparable fee-shifting statutes to
require proof of entitlement to fees by clear and
convincing evidence.
And nothing in § 285 justifies
such a high standard of proof. Section 285 demands a
simple discretionary inquiry; it imposes no specific
evidentiary burden, much less such a high one. Indeed,
patent-infringement litigation has always been governed
by a preponderance of the evidence standard, and that is
8

the “standard generally applicable in civil actions,”
because it “allows both parties to ‘share the risk of
error in roughly equal fashion.’”
Octane Fitness, 134 S. Ct. at 1758 (citations omitted) (first
quoting Brooks Furniture, 393 F.3d at 1382; and then quoting
Herman & MacLean v. Huddleston, 459 U.S. 375, 390 (1983)).
The question for this Court is whether Octane Fitness
changed the burden of proof for inequitable conduct when used to
establish an exceptional case.

The supplemental briefing

received from the parties confirms the Court’s initial finding
that courts are split on their interpretation of Octane Fitness
as it applies in this context.

Based on the Court’s review of

Octane Fitness and Therasense, the Court finds the appropriate
burden of proof to apply in this case to be clear and convincing
evidence.
The Court’s reading of Octane Fitness does not show an
intention to change the burden of proof established in
Therasense.

First, Therasense is not cited or referenced in the

Octane Fitness opinion.

If it had been the Supreme Court’s

intention to overrule that case, one would certainly expect
mention of Therasense.

Further, the reasons behind the Octane

Fitness Court determining a preponderance of the evidence
standard applies to the exceptional case analysis do not
translate into the inequitable conduct analysis.

9

And the policy

reasons behind the Therasense court’s decision still hold true
even in light of the Octane Fitness decision.
In Octane Fitness, the Supreme Court compared § 285 with
comparable fee-shifting statutes – a comparison that certainly
has no connection with the burden of proof for inequitable
conduct.

The Octane Fitness Court also noted that “nothing in §

285 justifies such a high standard of proof.”
1758.

134 S. Ct. at

For proving inequitable conduct, however, the Federal

Circuit in Therasense pointed out a multitude of “far-reaching
consequences” that justified a higher standard of proof.
F.3d at 1289.

649

While the Octane Fitness Court noted that

“patent-infringement litigation has always been governed by a
preponderance of the evidence standard,” and referenced that
this standard is generally applicable in civil cases to allow
for both parties to equally share in the risk of error, Octane
Fitness, 134 S. Ct. at 1758 (citing Huddleston, 459 U.S. at
390), the inequitable conduct clear and convincing standard was
an established exception to that generalization at the time
Octane Fitness was decided and, again, the Federal Circuit
explained the need for a departure from the preponderance of the
evidence standard in Therasense.

Sharing equally in the risk of

error, when there are such “far-reaching” consequences,
justified to the Therasense court that a clear and convincing
evidence burden of proof was necessary.
10

Accordingly, the Court finds that neither Octane Fitness’s
clear holding that an exceptional case is governed by a
preponderance of the evidence standard, nor the reasoning behind
that decision, evidence the Supreme Court’s intent to change the
burden of proof for showing inequitable conduct, nor does the
reasoning support such a result.

And without so much as a

reference to Therasense, the Court is convinced the Supreme
Court did not intend to change the inequitable conduct burden of
proof established in that case.
This same position has been adopted by other district
courts post-Octane Fitness.

For instance, the Eastern District

of Texas determined as follows:
The parties dispute what the correct burden of proof is
as to Tyson’s allegations of inequitable conduct. It is
undisputed that proof of inequitable conduct requires
“clear and convincing evidence.” Tyson, however, argues
that it need only put forward a preponderance of the
evidence per the standard in Octane Fitness; it claims
to use the label “inequitable conduct” merely as a
shorthand.
Since inequitable conduct is neither a
necessary nor a sufficient condition for a finding of
exceptionality, the evidence supporting the allegation
stands on its own. Thus, the Court will consider that
evidence as part of the “totality of the circumstances”
inquiry required by Octane, and the totality of the
evidence (including both evidence of alleged inequitable
conduct and other evidence) will be weighed using the
preponderance of the evidence standard. If the evidence
of inequitable conduct is sufficient to satisfy the
clear and convincing standard, the proof of inequitable
conduct will be entitled to substantial weight in that
calculation.

11

DietGoal Innovations LLC v. Chipotle Mexican Grill, Inc., Nos.
12-764, 12-338, 2015 WL 1284669, at *5 (E.D. Tex. Mar. 20, 2015)
(first quoting Star Sci., Inc., 537 F.3d at 1365; see also
Essociate, Inc. v. 4355768 Can., Inc., No. 14-679, 2015 WL
12766051, at *1-2 (C.D. Cal. Apr. 1, 2015) (refusing to engage
in an inequitable conduct analysis, but noting that “a defendant
must show by clear and convincing evidence” that there was
inequitable conduct in determining when a case is exceptional
under § 285); Robbins Co. v. Herrenknecht Tunnelling Sys. USA,
Inc., No. 13-2113, 2015 WL 3454946, at *4 (N.D. Ohio May 29,
2015) (applying a clear and convincing evidence standard);
Stretchline Intellectual Props. Ltd. v. H&M Hennes & Mauritz LP,
No. 10-371, 2015 WL 5175196, at *6 (E.D. Va. Sept. 3, 2015)
(following DietGoal’s approach). 6
The Court recognizes those cases that have come down the
other way, finding a preponderance of the evidence standard
applicable in light of Octane Fitness.

See Snap-on Inc. v.

Robert Bosch, LLC, No. 09-6914, 2016 WL 1697759, at *4 (N.D.

6

The Court notes that the parties dispute the meaning of
this passage from DietGoal. The Court reads the opinion to
state that, even in the context of a § 285 motion, clear and
convincing evidence is needed to establish proof of inequitable
conduct, which is entitled to substantial weight. If a party
fails to meet that burden, however, evidence supporting the
allegation of inequitable conduct can still be factored into the
Court’s consideration of the totality of the circumstances in
determining if the case is exceptional, under a preponderance of
the evidence.
12

Ill. Apr. 28, 2016) (“Assuming that the preponderance standard
applicable to § 285 attorney fee motions applies (ordinarily,
the clear and convincing standard applies to an inequitable
conduct defense to patent enforceability), Bosch has not proven
inequitable conduct.”); E. Coast Sheet Metal Fabricating Corp.
v. Autodesk, Inc., No. 12-517, 2015 WL 4603463, at *5 (D.N.H.
July 30, 2015) (“When raised as a defense, inequitable conduct
must be proved by clear and convincing evidence.

But where

. . . inequitable conduct is raised as a basis for an award of
attorney fees under 35 U.S.C. § 285, the court applies the
preponderance of the evidence standard prescribed by Octane
Fitness.” (first citing Am. Calcar, Inc. v. Am. Honda Motor Co.,
768 F.3d 1185, 1188 (Fed. Cir. 2014); and then citing Octane
Fitness, 134 S. Ct. at 1758))). 7

However, none of these cases

provide a detailed analysis on the choice of this particular

7

The Court also notes several cases have referenced this
issue in determining the burden of proof but have declined to
decide the issue. See, e.g., Skedco, Inc. v. Strategic
Operations, Inc., No. 13-968, 2016 WL 8678445, at *11 (D. Or.
Apr. 1, 2016); Novartis Corp. v. Webvention Holdings LLC, No.
11-3620, 2015 WL 6669153, at *4 n.5 (D. Md. Oct. 28, 2015)
(“Post-Octane Fitness, courts have disagreed on the burden that
applies to proving inequitable conduct before the PTO. Some
courts have held that clear and convincing evidence is the
standard during the liability phrase, whereas a preponderance of
the evidence standard applies when inequitable conduct is raised
as the basis for a fee award under 35 U.S.C. § 285.” (first
citing Stretchline Intellectual Props., 2015 WL 5175196; and
then citing Octane Fitness, 134 S. Ct. at 1758 n.6, 1757)).
These decisions have been considered by the Court but do not
impact the Court’s analysis.
13

burden of proof, and none of these cases convince the Court that
a preponderance of the evidence standard is the correct one to
apply post-Octane Fitness.
B. The asserted nondisclosure of alleged derivation
Before turning to this Court’s findings of fact and
conclusions of law, the issue of Professor Nolan’s alleged
derivation, and Materia’s asserted failure to disclose such
derivation (Evonik’s second asserted basis for a finding of
inequitable conduct) must be separately addressed.
Materia asserts, and the Court agrees, that this Court
cannot find that Professor Nolan did, in fact, derive his
invention covered by the ‘590 patent from Professor Herrmann.
All of the facts supporting Evonik’s argument in this regard
were put before the jury at trial.

In finding against Evonik,

and for Materia, on the issue of willful infringement of the
‘528 patent, the jury necessarily must not have found that
Professor Nolan stole his idea from Professor Herrmann.

The

Court cannot, as a matter of law, make a finding of fact that
directly conflicts with the jury’s verdict in this regard. See
Door-Master Corp. v. Yorktowne, Inc., 256 F.3d 1308, 1314 (Fed.
Cir. 2001) (“[T]he district court may reweigh evidence in
deciding whether the case is exceptional so long as the court’s
findings do not conflict with the jury’s findings.” (citing
Jurgens v. CBK, Ltd., 80 F.3d 1566, 1572 (Fed. Cir. 1996))).
14

Thus, the Court rejects Evonik’s second basis for
inequitable conduct.

Moreover, to the extent that the other

asserted bases are dependent in part on alleged derivation –
namely, Evonik’s assertion that the Grubbs v. Nolan
interferences were settled to hide the fact of derivation, among
other things; and the assertion that the alleged derivation was
the underlying factual basis of at least two of Materia’s listed
preliminary motions – the Court does not consider those aspects
of Evonik’s arguments.
C. The remaining grounds for inequitable conduct
Evonik’s first and third bases of inequitable conduct are
based on nondisclosures which Evonik asserts were but-for
material to the ‘590 patent prosecution.

Evonik’s theory

concerning the fourth basis – settlement of the interference –
is based not on deliberate withholding of material information,
but rather what Evonik asserts is egregious misconduct aimed at
preventing the need for ever disclosing but-for material
information.
As to all of these bases, however, Evonik must establish
that Materia made a “deliberate decision to deceive.”
812 F.3d at 1304.

Transweb,

As Evonik itself quotes in its brief, “the

specific intent to deceive must be the single most reasonable
inference to be drawn from the evidence . . . .

Indeed, the

evidence must be sufficient to require a finding of deceitful
15

intent in light of all the circumstances.”

Therasense, 649 F.3d

at 1290.
1. The evidence does not support a conclusion that anyone
acting on behalf of Materia made a deliberate decision to
deceive the USPTO.
Of course, a factfinder often will be required to “‘infer
intent from indirect and circumstantial evidence’ because
‘direct evidence of deceptive intent is rare.’”

Transweb, 812

F.3d at 1304 (quoting Therasense, 649 F.3d at 1290).
Nonetheless, Therasense requires that the indirect and
circumstantial evidence must add up to a singular inference of
deceitful intent.

The evidence fails in this critical regard.

Evonik asserts that there is clear evidence of deceptive
intent in the actions and testimony of Trimmer and Materia’s
patent agent, Mark Warzel.
close case.”

According to Evonik, “this is not a

But when the evidence itself is considered, it is

much more equivocal than Evonik makes it out to be.
The Court begins with Trimmer’s Boulder Declaration
executed on July 14, 2003.

(PX-1152).

The declaration

explained to the Colorado district court how Professor Nolan and
Materia were competitors, and why Professor Nolan, in his role
as expert witness for Materia’s adversary in the Boulder
litigation, should not have access to Materia’s confidential
documents it had produced in the litigation.

The declaration is

eight pages long and consists of sixteen numbered paragraphs.
16

The ‘125 patent is mentioned exactly once; and not in relation
to Nolan’s ‘590 patent application.
Rather, Trimmer’s Declaration points to Materia’s ‘125
patent as an example of the overlap between Materia’s technology
in the ROMP polymer area and a different patent application
filed by Nolan which also “describes and claims certain . . .
ROMP reactions.”

(¶ 10).

In a separate paragraph, Trimmer

states that “a subset of the complexes covered by claim 1” of
Nolan’s ‘590 patent application “would infringe” Materia’s ‘121
and ‘139 patents without any mention of Materia’s ‘125 patent.
(¶ 11).
In an apparent attempt to bridge this gap, Evonik relies on
the following general statements in Trimmer’s declaration:
•

“[a] review of Prof. Nolan’s publications and
patents reveals a great deal of overlap between
Prof. Nolan’s research and commercial activities
and Materia’s technology” (Trimmer Decl. ¶ 7); and

•

“Prof. Nolan’s articles also reveal substantial
overlap between his work and Materia’s technology”
(Id. ¶ 12).

Based on these selected portions of Trimmer’s Declaration,
Evonik would have the Court draw the inference that “Trimmer
knew that the ‘125 patent covered what the ‘590 patent claimed,
making the ‘125 patent invalidating prior art.”

The Court

rejects that inference as without sufficient evidentiary
support.

The Court also rejects as unsupported by the evidence

17

the related assertion that Trimmer later deliberately decided
not to disclose the ‘125 patent as prior art during the ‘590
patent prosecution.
With regard to the failure to disclose the ‘125 patent and
related information, Trimmer testified at his deposition:
[Trimmer reading Materia’s response to Interrogatory
Number 29]: It says no one made a decision not to
disclose the specific Boulder information identified.
Q:

Okay.
So it’s not a question of someone just
decided not to do it, it just never came up,
correct?

A:

It just never came to mind, no.

(Trimmer 30(b)(6) Dep. p. 153; see also p. 275 “[The ‘125
patent] did not come to my mind.”; p. 274 “Q: Why wasn’t the
‘125 disclosed in connection with the ‘590? A: I don’t know.

I

don’t know.”) 8
Evonik invites the Court to discredit this testimony based
on a very slim reed: twenty entries on Materia’s privilege log.
(PX-1309)

The log demonstrates that Trimmer was included in

approximately twenty e-mail communications in 2008 and 2009
concerning the ‘590 patent while the ‘590 patent was being

8

During oral argument on the instant motion, counsel for
Evonik repeatedly characterized this testimony as Trimmer
asserting that he had “memory loss,” that he “just forgot,”
“forgot all about this stuff,” that he had a “memory lapse,”
that Trimmer’s testimony was that “I forgot about it.” (Oral
Argument Tr. p. 81-83, 87). Evonik’s moving brief makes the
same assertions. The Court finds no evidential support for
counsel’s characterization.
18

prosecuted.

Of course the content of those communications are

unknown, and further, Trimmer was either the author or recipient
of only eleven e-mails; the remainder he was merely copied on.
Nonetheless, Evonik reasons that since Trimmer had
communications, and saw communications, concerning the ‘590
patent, there is no way the Boulder information and the ‘125
patent could not have come to Trimmer’s mind, and therefore
Trimmer must be lying.

The Court disagrees.

Evonik has pointed

to no evidence contradicting Trimmer’s testimony.

There is no

inherent inconsistency between Trimmer’s testimony and the
privilege log.
The evidence concerning Warzel’s alleged deceptive intent
is even weaker.

Evonik’s theory is that Warzel was “willfully

blind” to the need to disclose to the Patent Office the factual
bases for the list of Materia’s preliminary motions.
Warzel became Materia’s in-house patent agent shortly after
the interferences were settled.

He testified at his deposition 9

that when he took over the post-interferences prosecution of the
‘590 patent, he did not conduct “a full and complete review of
every document that might have been part of” the interference
file. (Warzel 3/13/14 Dep. p. 89-90)

9

More specifically, he

Warzel was outside the subpoena power of the Court and did
not testify at trial.
19

testified “I did not know about the list of [preliminary]
motions,” (Id. at p. 115), which was drafted and filed prior to
Warzel’s employment with Materia.
Based on this testimony, Evonik argues that Warzel
“shirk[ed] his duty [as a licensed practitioner] to investigate”
and “fail[ed] in his duty to be fully informed.” 10

Even

assuming, for argument’s sake, that Evonik is correct in this
regard, it does not follow that “[t]he consequence of these
failures is that deceptive intent may be inferred,” as Evonik
strenuously asserts.
The Court declines to draw such an inference based solely
on the fact that Warzel did not look for information related to
interferences that had settled prior to Warzel’s employment with
Materia.

The implicit assumption of Evonik’s willful blindness

argument is that Warzel had some reason to believe or suspect
that Materia had engaged in inequitable conduct prior to
Warzel’s arrival at Materia.

The evidence does not support such

a factual finding.
The Court does not find that anyone acting on Materia’s

10

Evonik also asserts that Warzel breached his duty to
disclose but that argument is inconsistent with the undisputed
evidence that Warzel did not even know of the existence of the
information Evonik asserts he should have disclosed. Warzel
testified “I’m not even aware of the existence of the list of
motions, let alone the motions themselves.” (Warzel 3/13/14 Dep.
p. 128);(see also id. p. 171 “I did not know about the list of
motions or the motions themselves.”).
20

behalf intended to deceive the USPTO.
2. The evidence does not support a finding of egregious
misconduct.
The egregious misconduct exception to the but-for
materiality requirement is intended “to capture extraordinary
circumstances” of misconduct.

Therasense, 649 F.3d at 1293.

Therasense provides the following examples of egregious
misconduct: “the filing of an unmistakably false affidavit,” id.
at 1292; “manufactur[ing] false evidence,” id.; “perjury and
suppression of evidence,” id. at 1293; “manufacture and
suppression of evidence,” id.; and “bribery and suppression of
evidence,” id.
Assuming without deciding that suppression of evidence
alone can, in some instances, be sufficient to support a finding
of egregious misconduct, compare id. (“perjury and suppression
of evidence,” “manufacture and suppression of evidence,”
“bribery and suppression of evidence”(emphasis added)), the
Court concludes that settling the interferences is not
tantamount to suppressing evidence.

Preventing the need for

disclosing certain evidence in the first place is not analogous
to actively taking steps to hide evidence that must be
disclosed.

The Court does not find Materia engaged in egregious

misconduct when it settled the interferences.

21

For the reasons set forth above, the Court holds that
Evonik has not established by clear and convincing evidence 11
that Materia engaged in inequitable conduct. 12
That being said, the Court acknowledges that Evonik intends
to move for attorneys’ fees under § 285, 13 and that Evonik
intends to advance additional bases for finding this case
exceptional other than inequitable conduct, as explained
(inappropriately) in its supplemental brief and at the hearing
before this Court on inequitable conduct.

In light of this

finding that there is not clear and convincing evidence of
inequitable conduct, the Court will still consider any motion
for attorneys’ fees on other bases, and the Court will give due
consideration to the allegations that make up Evonik’s

11

However, the Court finds that even on the more lenient
preponderance of the evidence standard, Evonik has failed to
show inequitable conduct in this case, such that its inequitable
conduct argument would fail under either burden this Court were
to apply. This Court’s finding that the clear and convincing
evidence standard should apply under these circumstances thus is
not essential to the Court’s resolution of this dispute.
12

At the end of its opposition brief, Materia argues that
Evonik’s motion is frivolous and states that this Court should
impose sanctions on Evonik, pursuant to 28 U.S.C. § 1927. The
Court declines to sanction Evonik. While the Court concludes
that Evonik’s motion is without sufficient evidentiary support,
it does not find the motion frivolous.
13

“The court in exceptional cases may award reasonable
attorney fees to the prevailing party.” 35 U.S.C. § 285. “The
prevailing party may prove the existence of an exceptional case
by showing inequitable conduct before the PTO.” Leviton Mfg.
Co., 606 F.3d at 1358.
22

inequitable conduct claim even in light of its finding that the
clear and convincing evidence burden has not been established.
See Octane Fitness, 134 S. Ct. at 1756 (“[A]n ‘exceptional’ case
is simply one that stands out from others with respect to the
substantive strength of a party’s litigating position . . . or
the unreasonable manner in which the case was litigated.
District courts may determine whether a case is ‘exceptional’ in
the case-by-case exercise of their discretion, considering the
totality of the circumstances.”).
II. Pre-Verdict Willfulness
Evonik asks the Court to alter or amend the judgment based
on its allegation that the jury considered improper evidence,
leading to its verdict in favor of Materia on willfulness.
Evonik asks the Court to then enter summary judgment on
willfulness, arguing there are no genuine issues of material
fact.
Federal Rule of Civil Procedure 59(e) provides a device for
a party to make a motion “to alter or amend a judgment.”

“A

proper motion to alter or amend judgment ‘must rely on one of
three major grounds: “(1) an intervening change in controlling
law; (2) the availability of new evidence [not available
previously]; [or] (3) the need to correct clear error [of law]
or prevent manifest injustice.”’”

N. River Ins. Co. v. CIGNA

Reinsurance Co., 52 F.3d 1194, 1218 (3d Cir. 1995) (alterations
23

in original) (quoting Nat. Res. Defense Council v. U.S. Envtl.
Prot. Agency, 705 F. Supp. 698, 702 (D.D.C.), vacated on other
grounds, 707 F. Supp. 3d (D.D.C. 1989)).

A “[p]laintiff’s mere

dissatisfaction with the jury’s assessment . . . does not
constitute manifest injustice.”
2d 418, 423 (D. Del. 2012).

Norman v. Elkin, 849 F. Supp.

“The standard for obtaining relief

under Rule 59(e) is difficult to meet.”

Carrier Corp. v.

Goodman Global, Inc., 162 F. Supp. 3d 345, 370 (D. Del. 2016).
Evonik’s motion rests on its argument “that it was error to
permit the jury to consider evidence that Materia allegedly
developed a belief that Evonik’s patent claims were invalid.”
Evonik posits that this information “tainted” the judgment of
the jury “because it was given the option to accept Materia’s
excuse that it developed a belief that the ‘528 patent was
invalid months after it decided to infringe.”

At the October

24, 2017 hearing before this Court, Evonik phrased the question
before the Court as follows: “Was the jury verdict of no
willfulness tainted by [Mark] Trimmer’s testimony that Materia
developed a belief that Evonik’s ‘528 patent was invalid, where
Materia did not hold that belief when it started infringing in
June 2008?” 14

14

The specific legal error Evonik is claiming is the Court’s
decision on one of its motions in limine which allowed this
evidence to be heard by the jury.
24

The Court finds it must reject this argument.

The Court

finds reference to Materia’s summation instructive here, as it
succinctly tells the story Materia asked the jury to believe:
Trimmer downloaded a copy of the ‘528 patent in early
June of 2008, a few days after it issued. . . . And
Evonik makes a big deal about the fact that Trimmer
didn’t undertake any investigation until . . . Materia
received that threatening letter from Evonik in
September of 2008.
So you heard Mark Trimmer testify that he missed
it. He did download this thing and he missed it. He
doesn’t deny that. Right?
But what’s interesting is that, take a look when he
forwards this patent, right, this is the Herrmann
patent, 2008, he forwards it to Mark Warzel, patent agent
at Materia, and he says all of three letters, FYI. Does
that sound like panic? Does that sound like someone who
has just seen that his employer’s biggest competitor has
issued a patent with a claim broad enough to cover their
biggest product? . . . Or does that sound like someone
who actually genuinely didn’t realize what was in there?
. . . .
. . . [Evonik] want[s] you to infer from the fact
that Mark Trimmer saw this patent, realized that the
patent issued on June 2, 2009, they want you to infer
that he did this intentionally. He decided I’m going to
play dumb. I’m going to ignore the fact that this patent
is a big deal, that this patent is coming right at the
heart of my products. Right?
. . . [T]hey want you to believe that they finally
expanded it to cover all NHCs, and his big reaction was
FYI? And he thinks that his biggest competitor – this
is their theory – his biggest competitor just got a
patent that covers his biggest product, and he can just
bury it. It will just go away, right? I’ll pretend I
never saw it.
It’s ridiculous.
He missed it.
Should he have
been more careful?
Clearly.
Clearly he should have
been more careful. But he didn’t see it. And there’s
no evidence to suggest that he did. . . .
. . . .
25

. . . How did Trimmer miss it? Because it looks an
awful lot like all the claims in the prior patents.
Okay. That’s how he missed it. There’s no evidence of
intent, willfulness.
There’s no evidence of wanton,
reckless conduct. It’s just a mistake, and that’s not
willfulness.
. . . .
Mark Trimmer did not engage in willful, reckless,
wanton conduct.
There’s no evidence to suggest
otherwise. There’s insinuation and there’s innuendo and
there’s character assassination.
Of course, Evonik presented a different story, with a
different recitation of the facts and the legal connotations for
those facts.

However, the Court is not convinced that the

picture painted by Materia was an unreasonable one for the jury
to believe.

Thus, it becomes relevant what Materia did once it

was unquestionably alerted to the scope of Evonik’s patent.

The

Court allowed that evidence in, and the Court does not find it
did so in error.
As Evonik phrases it: “The proper inquiry is what was in
the mind of the infringer when he learned of the adverse patent
rights and still decided to infringe.”

The time in which

Materia “learned of the adverse patent rights” was a question of
fact set before the jury – did Materia learn of Evonik’s adverse
patent rights in June when the patent issued, or in September
upon receiving Evonik’s letter?

Clearly Materia learned of the

patent itself in June, but the point in time in which it

26

realized that the patent rights were adverse is a different
matter.
Willfulness necessarily involves knowledge of the patent
and of infringement.

As the Court instructed the jury at trial,

“the burden to prove willful infringement includes more than
mere knowledge of the patent.”

Aeritas, LLC v. Alaska Air Grp.,

Inc., 893 F. Supp. 2d 680, 685 (D. Del. 2012).

While Evonik

argues to the Court that there is no question Trimmer had
knowledge of both the patent and its scope, this was a question
for the jury.

That Evonik believes Trimmer’s testimony was

“transparently false and self-serving” and should not have been
believed, and would not have been believed if not for the Court
allowing this evidence, does not merit the Court altering the
verdict as found by the jury.

The Court found, and reaffirms

here, that the evidence was relevant and properly admitted, and
whether Trimmer’s testimony was credible was, and remains, for
the jury.
Evonik argues Halo Electronics, Inc. v. Pulse Electronics,
Inc., 136 S. Ct. 1923 (2016) requires a different result.

Halo

established the current framework for determining willfulness in
2016.

In Halo, the Supreme Court overturned the willfulness

test from In re Seagate Technology, LLC, 497 F.3d 1360 (Fed.
Cir. 2007).

The Supreme Court explained the Seagate test as

follows:
27

First, “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,” without regard to
“[t]he state of mind of the accused infringer.” . . . .
Second, after establishing objective recklessness,
a patentee must show – again by clear and convincing
evidence – that the risk of infringement “was either
known or so obvious that it should have been known to
the accused infringer.” Only when both steps have been
satisfied can the district court proceed to consider
whether to exercise its discretion to award enhanced
damages.
Halo, 136 S. Ct. at 1930 (alteration in original) (citation
omitted) (quoting Seagate, 497 F.3d at 1371).
The Supreme Court found “[t]he Seagate test ‘is unduly
rigid, and it impermissibly encumbers the statutory grant of
discretion to district courts.’”
Fitness, 134 S. Ct. at 1755).

Id. at 1932 (quoting Octane

“In particular,” the Supreme

Court found the Seagate test “can have the effect of insulating
some of the worst patent infringers from any liability for
enhanced damages.”

Id.

The Seagate test aggravates the problem by making
dispositive the ability of the infringer to muster a
reasonable (even though unsuccessful) defense at the
infringement trial.
The existence of such a defense
insulates the infringer from enhanced damages, even if
he did not act on the basis of the defense or was even
aware of it. Under that standard, someone who plunders
a patent – in fringing it without any reason to suppose
his conduct is arguably defensible – can nevertheless
escape any comeuppance under § 284 solely on the strength
of his attorney’s ingenuity.

28

Id. at 1933.

The Court stated that “culpability is generally

measured against the knowledge of the actor at the time of the
challenged conduct.”

Id. 15

Evonik argues Halo stands for the proposition that
“willfulness is measured by assessing the infringer’s state of
mind when he or she learns of the patent at issue and thereafter
decides to infringe or continue to infringe,” which Evonik
argues is limited to when “Materia learned of Evonik’s ‘528
patent on June 2, 2008.”

The Court disagrees with Evonik’s

interpretation of Halo and its application to this case.
Halo clearly stands for the proposition that timing matters
in determining willfulness.

In this case, however, the Court

does not find this limits the window in which a jury could find
willfulness solely to June 2, 2008.

In its brief, Materia

states: “Nothing in Halo restricts that ‘challenged conduct’ to
the knowledge of the actor at the very moment it becomes aware
of an issued patent that it has no reason to believe it is
infringing.”

The Court agrees with this reading of Halo.

The

Court finds that the period of “challenged conduct” is broader
than Evonik would make it seem, and that Halo’s limitation

15

The Court further disclaimed the clear and convincing
standard of proof for the more lenient preponderance of the
evidence standard. Halo, 136 S. Ct. at 1934.
29

applies to those defenses that were never relied on during this
period of challenged conduct.
The Court finds that granting Evonik’s motion would result
in an unjustified overturning of the jury’s verdict that there
was not willfulness in this case.

See Richardson v. Suzuki

Motor Co., 868 F.2d 1226, 1250 (Fed. Cir. 1989) (“Willfulness of
behavior is a classical jury question of intent.

When trial is

had to a jury, the issue should be decided by the jury.”
(citation omitted)), superseded by statute on other grounds, B.
Braun Med., Inc. v. Rogers, 163 F. App’x 500, 509 (9th Cir.
2006); accord WBIP, LLC v. Kohler Co., 829 F.3d 1317, 1340 (Fed.
Cir. 2016) (The Federal Circuit “do[es] not interpret Halo as
changing the established law that the factual components of the
willfulness question should be resolved by the jury.”).

The

Court will not alter the judgment to find willfulness. 16
III. Post-Verdict Willfulness
Evonik asks the Court to also find post-verdict willfulness
by Materia, separate and distinct from its request for the Court
to find pre-verdict willfulness.

The Court does not find

sufficient evidence of post-verdict willfulness.

16

Evonik’s motion similarly asks for the Court to grant
summary judgment on willfulness. As the Court will not be
amending the judgment, the Court will deny this request.
30

Materia concedes that it continued its sales until receipt
of the Court’s August 2017 Opinion and Order on indefiniteness,
at which point it ceased all sales.

Evonik argues “Materia’s

indefiniteness defense has been without legal basis at least
since the Court’s Markman Opinion.”

However, the Court did not

rule on indefiniteness until August 2017, when the Court granted
summary judgment in favor of Evonik.

The Court finds that as

the Court declined ruling on indefiniteness prior to that point,
despite several opportunities to do so, Materia’s post-verdict
infringement was not willful. 17
IV. Enhanced Damages
35 U.S.C. § 284 allows the awarding of enhanced damages:
Upon finding for the claimant the court shall award
the claimant damages adequate to compensate for the
infringement, but in no event less than a reasonable
royalty for the use made of the invention by the
infringer, together with interest and costs as fixed by
the court.
When the damages are not found by a jury, the court
shall assess them.
In either event the court may
increase the damages up to three times the amount found
or assessed.
Increased damages under this paragraph
shall not apply to provisional rights under section
154(d).
A finding of willfulness is a prerequisite to awarding
enhanced damages.

Ansell Healthcare Prods. LLC v. Reckitt

Benckiser LLC, No. 15-915, 2018 WL 620968 (D. Del. Jan. 30,

17

Materia asks the Court to sanction Evonik “for requiring
Materia to respond to this frivolous argument.” The Court
declines to do so.
31

2018) (“Under Halo, . . . before the Court can consider whether
to award enhanced damages, the factfinder must first determine
that the defendant’s behavior was subjectively willful under a
preponderance of the evidence standard.”); accord Power
Integrations, Inc. v. Fairchild Semiconductor Int’l, Inc., No.
04-1371, 2017 WL 6206382, at *6 n.9 (D. Del. Dec. 8, 2017)
(“Courts may decline to enhance damages even after a finding of
willfulness – but they may not enhance damages absent such a
factual finding.”).

While “a necessary” basis for enhancing

damages, a finding of willfulness is not a sufficient condition
for enhancing damages.

Idenix Pharms. LLC v. Gilead Scis.,

Inc., 271 F. Supp. 3d 694, 698 (D. Del. 2017).

Rather, a

finding of willfulness “merely ‘opens the door’ to the Court
making a discretionary decision as to whether damages should be
enhanced.”

Id.

Evonik concedes that “a degree of culpability” is needed to
warrant enhanced damages.

It argues that this “can be satisfied

several ways, including by a finding of willful infringement,
inequitable conduct or litigation misconduct.”
Jurgens, 80 F.3d 1566 for this proposition.

Evonik cites

The Court finds

this to be a distorted reading of Jurgens.
Jurgens states that “[b]ecause increased damages are
punitive, the requisite conduct for imposing them must include
some degree of culpability.”

Id. at 1570.
32

It recognized that

“[a]n act of willful infringement satisfies this culpability
requirement and is, without doubt, sufficient to meet the first
requirement to increase a compensatory damages award.”

Id.

Recognizing that “[i]ncreased damages also may be awarded to a
party because of the bad faith of the other side,” the Jurgens
court warned that “[t]he correlation between bad faith, willful
infringement and increased damages . . . is sometimes
misunderstood because the term ‘bad faith’ has numerous patent
law applications,” only some of which “are relevant in
determining the predicate culpability for an increased damages
award.”
Evonik focuses on this statement that bad faith can support
inequitable conduct in isolation.

However, the Jurgens court

continues:
Bad faith is used, for example, in referring to
misconduct in the prosecution of or litigation over a
patent.
Such conduct includes inequitable conduct
during patent prosecution, bringing vexatious or
unjustified suits, attorney or client misconduct during
litigation, or unnecessarily prolonging litigation.
These acts by themselves, however, are not sufficient
for an increased damages award under section 284 because
they are not related to the underlying act of
infringement and say nothing about the culpability of
the infringer. Only a culpable infringer can be held
liable for increased damages, not an innocent one. The
listed acts might be evaluated to determine if the
infringer acted willfully in light of the totality of
the surrounding circumstances. The ultimate fact to be
proven, that is, the basis for increased damages,
however, would be that the infringement was willful, not
that litigation activities were improper.
Thus,
although
an
infringer’s
inequitable
conduct
in
33

prosecuting his own patents, or his egregious conduct in
infringement litigation may be sufficient for other
sanctions or fee awards, or may be used as a factor in
determining whether or how much to increase a damages
award once sufficient culpability is found, these
actions are not sufficient independent bases to justify
increased damages under section 284.
Id. at 1570-71 (citations omitted) (emphasis added).

“’Bad

faith’ is more correctly called ‘bad faith infringement,’ and it
is merely a type of willful infringement.”

Id. at 1571.

Evonik

fails to appreciate this clarification from the Jurgens court.
Jurgens does not change the established law that willfulness is
a prerequisite for enhanced damages.
As the Court stated earlier in this Opinion, the Court will
uphold the jury’s determination on willfulness.

Accordingly,

the Court does not address the Read factors 18 and will deny
Evonik’s motion for enhanced damages.

18

When the court considers whether to enhance damages
based on willfulness, it turns to the factors set forth
in Read Corp. v. Portec, Inc., 970 F.2d 816, 826-27 (Fed.
Cir. 1992), overruled on other grounds by Markman v.
Westview Inst. Inc., 52 F.2d 967 (Fed. Cir. 1995): (1)
deliberate copying; (2) defendant’s investigation and
good faith-belief of invalidity or non-infringement; (3)
litigation behavior; (4) defendant’s size and financial
condition; (5) closeness of the case; (6) duration of
the misconduct; (7) remedial action by the defendant;
(8) defendant’s motivation for harm; and (9) attempted
concealment of the misconduct.
Green Mountain Glass LLC v. Saint-Gobain Containers, Inc., No.
14-392, 2018 WL 1202638, at *10 (D. Del. Mar. 8, 2018) (citing
Read, 970 F.2d at 826-27).
34

An accompanying Order will be entered.

Date:
March 28, 2018
At Camden, New Jersey

s/ Noel L. Hillman
NOEL L. HILLMAN, U.S.D.J.

35