ArcelorMittal France et al v. AK Steel Corporation et al

Filing 338

MEMORANDUM. Signed by Judge Sue L. Robinson on 12/4/2015. Associated Cases: 1:10-cv-00050-SLR, 1:13-cv-00685-SLR(nmfn)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF DELAWARE

ARCELORMITTAL FRANCE and
ARCELORMITTAL ATLANTIQUE ET
LORRAINE,
Plaintiffs,

v.
AK STEEL CORPORATION,
SEVERSTAL DEARBORN, INC., and
WHEELING-NISSHIN, INC.,
Defendants.

)

ARCELORMITTAL FRANCE,
ARCELORMITTAL ATLANTIQUE ET
LORRAINE, and ARCELORMITTAL
USA LLC,
Plaintiffs,

v.
AK STEEL CORPORATION,
Defendant.

)
)
)
)
)
)
) Civ. No. 10-050-SLR
)
)
)
)
)

)
)
)
)
)
)
)
) Civ. No. 13-685-SLR
)
)
)
)

MEMORANDUM
At Wilmington this 4th day of December, 2015, having reviewed the pending
motions 1 filed by the parties 2 in both of the above captioned cases, and having heard
1

The motions filed in Civ. No. 10-050 include defendants' motions for summary
judgment (D.I. 323, 325) and to change the caption to remove Severstal Dearborn, Inc.
(D.I. 320), and plaintiffs' motion to dismiss for lack of subject matter jurisdiction (D.I.

oral argument on the same, I will grant defendants' motions for summary judgment and
deny plaintiffs' motion to dismiss in Civ. No. 10-050, and will grant plaintiffs' motion to
amend in Civ. No. 13-685, consistent with the following reasoning.
1. Background. 3 The above captioned litigation has a convoluted procedural
history. Plaintiffs asserted U.S. Patent No. 6,296,805 ("the '805 patent") against
defendants by complaint filed in January 2010. The litigation proceeded to claim
construction and trial, ending in a jury verdict in defendants' favor. On appeal, the
Federal Circuit upheld the claim construction in part and reversed in part; 4 the Court
also reversed the jury's verdict of anticipation. With respect to obviousness, the Court
concluded that a new trial was required because the claim construction error prevented
the jury from properly considering plaintiffs' evidence of commercial success. See
ArcelorMittal France v. AK Steel Corp., 700 F.3d 1314 (Fed. Cir. 2012) ("ArcelorMittal

f').

321 ). The sole pending motion in Civ. No. 13-685 is plaintiffs' motion for leave to file a
first amended complaint for patent infringement. (D.I. 31)
2

Defendants (who may collectively be referred to as "defendants") include AK
Steel Corporation ("AK Steel"), Severstal Dearborn, Inc. ("Severstal"), and WheelingNisshin, Inc. in Civ. No. 10-050, and just AK Steel in Civ. No. 13-685. Plaintiffs (who
may collectively be referred to as "plaintiffs") include ArcelorMittal France ("AM France")
and ArcelorMittal Atlantique et Lorraine in Civ. No. 10-050; ArcelorMittal USA LLC was
added as a plaintiff in Civ. No. 13-685.
3

Given the robust record in this litigation, I recite only the facts necessary to the
analysis.
4

Specifically, the Federal Circuit reversed the construction for "hot-rolled steel
sheet" and upheld the construction for "very high mechanical resistance," that is, "the
flat-rolled steel has been subjected, after rolling, to additional controlled heating and
cooling and has an ultimate tensile strength of 1500 MPs or greater."

2

2. During the appeal process, in order to "correct" the construction of "very high
mechanical resistance," plaintiffs obtained U.S. Patent No. RE44, 153E ("the RE153
patent"), which application issued on April 16, 2013 and added a number of dependent
claims, including (1) claim 23, which recites "[t]he coated steel sheet of claim 1, wherein
said mechanical resistance is in excess of 1000 MPa," (2) claim 24, which confined
claim 1 to the construction affirmed in ArcelorMittal I by claiming "[t]he coated steel
sheet of claim 1, wherein said mechanical resistance is in excess of 1500 MPa," and (3)
claim 25, which depends on and further limits claim 24. See ArcelorMittal France v. AK
Steel Corp., 786 F.3d 885, 887-88 (Fed. Cir. 2015) ("ArcelorMittal//').

3. Chronologically, then, the Federal Circuit's mandate in ArcelorMittal I issued
on March 27, 2013 and the RE153 patent issued on April 16, 2013. Also on April 16,
2013, plaintiffs filed a complaint for patent infringement of the RE153 patent in Civ. No.
13-685 against AK Steel. (Civ. No. 13-685, D.I. 1) On May 10, 2013, plaintiffs filed a
motion for leave to file a second amended complaint in Civ. No. 10-050. (Civ. No. 10050, D.I. 269) Like the complaint filed in Civ. No. 13-685, plaintiffs' infringement
contentions in Civ. No. 10-050 reflected the procedural history of the litigation.
Paragraph 14 of the proposed amended complaint asserted the following:
The RE153 patent contains claims 1-16, which originally appeared in the
'805 patent, as well as new claims 17-25. Claims 1, 2, 5, 7, and 16 of the
'805 patent were previously asserted in this litigation, and appear in the
RE153 patent in substantially identical form. Pursuant to 35 U.S.C. § 252,
this Second Amended Complaint substitutes 1, 2, 5, 7, and 16 of the RE153
patent for the same claims in the now-surrendered '805 patent.
(D.I. 269, ex. A) In paragraph 23, plaintiffs generally alleged that "AK Steel's aluminum
coated, boron-containing steel sheet products ... have an ultimate tensile strength

3

greater than 1000 MPa, and at least some of the products have an ultimate tensile
strength greater than 1500 MPa," thus "directly infring[ing] one or more of the claims of
the RE153 patent." In connection with briefing on their motion to amend, plaintiffs
argued that
[t]he landscape of this case has changed dramatically since the earlier trial.
The reissue patent (RE153) has replaced the original patent (the '805 patent).
Defendants no longer contend that the claims are limited to steel having a
UTS greater than 1,500 MPa. Instead, Defendants have now conceded that
the claims of RE153 cover steel having a UTS of greater than 1,000 MPa.
And, both Defendants are now selling into the market steel that is being
hot stamped and delivered to customers that has a UTS that exceeds 1,500
MPa.
Plaintiffs' proposed amendments in the Second Amended Complaint are
directed to this new landscape. . . . . First, Plaintiffs' proposed amendments
that allege ... infringement by sales of steel having a UTS of 1,000 MPa
or greater are based on the agreed substitution of [the RE153 patent] for
the original ['805] patent, and Defendants' concession ... that the RE153
patent must be reinterpreted to cover steel with a UTS greater than 1,000
MPa. There is only a single patent, RE 153, and the parties agree that it
covers steel having a UTS of "1,000 MPa or greater."
(D.I. 277 at 4)(emphasis added) (See also Civ. No. 13-685, D.I. 10 at 8-10)
4. With the substitution of the RE153 patent for the '805 patent, defendants
moved for entry of summary judgment in Civ. No. 10-050, 5 arguing that the RE153
patent was invalid pursuant to 35 U.S.C. § 251(d). By memorandum opinion issued on
October 25, 2013 (D.I. 297), I granted the motion, having concluded that the RE153
patent had been improperly broadened:
There can be no doubt that ArcelorMittal pursued its reissue patent as
an intentional strategy to avoid the consequences of this court's narrow
claim construction, with the ultimate goal of capturing more acts of
infringement under the broadening scope of new dependent claim 23 of

5

AK Steel filed a similar motion to dismiss in Civ. No. 13-685. (D.I. 5)

4

the RE153 patent. Although such a strategy would have been perfectly
legitimate if pursued within two years from the grant of the '805 patent,[6]
the court concludes that ArcelorMittal's post-trial strategy offends the
fundamental purpose of§ 251, that is, repose.
(D.I. 297 at 10-11 )7 On appeal, the Federal Circuit affirmed in part and reversed in part:
The district court properly concluded that claims 1 through 23 of the RE153
patent were improperly broadened under§ 251 and therefore invalid.
However, the district court erred in invalidating claims 24 and 25, which the
parties concede maintain the same scope as the original claims. Because the
district court's summary judgment orders invalidated the entire RE153 patent,
we decline Appellees' invitation to reach the merits, and remand for further
proceedings consistent with this opinion and our mandate in ArcelorMittal I.
ArcelorMittal II, 786 F.3d at 892.

5. Since the Federal Circuit's mandate in ArcelorMittal II issued in June 2015,
the parties have filed multiple motions, with plaintiffs continuing their efforts to capture
new acts of infringement and defendants continuing their efforts to enforce repose. In
this regard, plaintiffs have filed a motion to amend in Civ. No. 13-685, seeking
permission to assert yet another patent against AK Steel - U.S. Reissue Patent No.
RE44,940 ("the RE940 patent"), a continuation of the patent application that issued as
the RE153 patent and which itself issued on June 10, 2014. 8 Related to the above
motion to amend, plaintiffs propose to file a covenant not to sue on the RE153 patent,

6

The '805 patent issued on October 2, 2001. (D.I. 1, ex. A)

7

By memorandum and order dated December 5, 2013, all claims of the RE153
patent were invalidated as violative of 35 U.S.C. § 251 (d); judgment was entered in
favor of defendants, thus mooting the pending motion to dismiss in Civ. No. 13-685.
(Civ. No. 13-685, D.I. 19, 20, 21)
8

The RE940 patent has two independent claims (claims 17 and 27) which
disclose, inter alia, a hot-rolled coated steel sheet having a "very high mechanical
resistance in excess of 1500 MPa .... "

5

the filing of which is conditioned on the approval of their pending motion to amend. In
Civ. No. 10-050, plaintiffs have filed a motion to dismiss for lack of subject matter
jurisdiction, based on their contentions that: (1) claims 24 and 25 were never at issue in
Civ. No. 10-050; (2) all of the asserted claims of the RE153 patent have been held
invalid; and (3) the absence of any case or controversy requires dismissal. (D.I. 322)
6. Defendants in Civ. No. 10-050 have moved for entry of judgment with respect
to both invalidity and no infringement of the RE 153 patent, arguing in general that
because claims 24 and 25 of the RE153 patent have the same scope as claim 1 of the
'805 patent, 9 the motions are appropriately resolved consistent with the 2011 trial record
and the mandate of the Federal Circuit in ArcelorMittal I. Specifically, plaintiffs
conceded "(by not addressing) the fact that the trial record has no evidence of past
infringement of claim 1 of the '805 patent, as construed by the Federal Circuit." (D.I.
297 at 5-6) 10 There being no record evidence that the accused products have an
ultimate tensile strength above 1500 MPa, entry of judgment is appropriate. As to
invalidity, defendants argue that summary judgment of obviousness of claims 24 and 25
of RE153 should be granted pursuant to the Federal Circuit's mandate in ArcelorMittal I
because ArcelorMittal's "purported evidence of commercial success is insufficient as a
matter of law to overcome the prima facie case of obviousness of the claims." (D.I. 324
at 1)
7. Plaintiffs in Civ. No. 10-050 counter that the 2011 trial record is an insufficient

9

See ArcelorMittal II, 768 F.3d at 891.

10

The Federal Circuit, in ArcelorMittal I, affirmed the judgment that the accused
products do not infringe under the doctrine of equivalents. 700 F.3d at 1321-22.

6

basis upon which to enter judgment, given that the RE153 patent did not issue until
2013; i.e., the record should be opened and defendants' "new acts of infringement"
explored. (D.I. 331 at 11, 15) Plaintiffs also contend that
[t]he Federal Circuit's decision in ArcelorMittal I held that the jury's decision
in the first trial was supported by substantial evidence on the record presented
to it. The Federal Circuit's decision does not establish a prima facie case of
obviousness as a matter of law for claims that were not even before the court.
A second jury that considers additional evidence based on a proper claim
construction, the reissue prosecution history, the commercial success of the
patented product, the copying of the patented product by Defendants, and
other secondary considerations, with regard to different claims of different
scope, may come to a different conclusion.
(D.I. 331 at 18)
8. Analysis. 11 Where to begin? In light of this procedural morass, I will begin
with the original case, Civ. No. 10-050, and the statute invoked by plaintiffs when they
pursued RE153 to avoid the consequences of the Federal Circuit's claim construction.
Section 252 provides that when a patent is surrendered for reissue, "such surrender
shall not affect any action then pending nor abate any cause of action then existing,
and the reissued patent, to the extent that its claims are substantially identical with the
original patent, shall constitute a continuation thereof and have effect continuously from
the date of the original patent." 35 U.S.C. § 252. Claims 24 and 25 of the RE153
patent are "substantially identical" to claim 1 of the '805 patent, as established by the
Federal Circuit in ArcelorMittal II and consistent with the parties' concession. See 786
F.3d at 892. Under these circumstances, I conclude, first, that claims 24 and 25 of the

11

The court has jurisdiction pursuant to 28 U.S.C. § 1338.
7

RE153 patent were asserted in Civ. No. 10-050 as a matter of law. 12 Therefore,
plaintiffs' motion to dismiss for lack of subject matter jurisdiction is denied. My second
conclusion follows from the first: Because the RE153 patent simply took the place of
the '805 patent upon its surrender - with no independent effect on any action then
pending 13 - the mandate of the Federal Circuit in ArcelorMittal I, based on the present
record, governs the resolution of claims 24 and 25 of the RE153 patent. See, e.g.,
Scripps Clinic & Research Found. v. Genentech, Inc., 678 F. Supp. 1429, 1433 (N.D.
Cal. 1988) (explaining that under§ 252, "the reissue of a patent does not affect
preexisting infringement claims 'to the extent that [the reissued] claims are
[substantially] identical with the original patent."') (citation omitted).
9. The record as to literal infringement is not quite as clear-cut as characterized
by AK Steel, starting with the Federal Circuit's observation in ArcelorMittal I that,
[a]t oral argument, AK Steel's counsel conceded that at least some
accused products have a mechanical resistance of 1500 MPa or
greater. However, as a result of the district court's incorrect claim
construction of "hot-rolled steel sheet," the jury was instructed at trial to
consider direct infringement only under the doctrine of equivalents ....
Thus, there has been no determination below regarding which accused
products would or would not literally infringe under the correct claim
construction. That infringement issue will need to be addressed in the first
instance on remand, either by the court on summary judgment or by a jury
in a new trial. Because the jury found no infringement under the doctrine of

12

As opposed to the mechanics of filing an amended complaint. Indeed, the only
reason plaintiffs filed an amended complaint in 10-050 was to assert new acts of
infringement consistent with claim 23, which impermissibly broadened the scope of the
'805 patent under the Federal Circuit's claim construction.
13

0f course, to the extent plaintiffs tried to broaden the scope of the '805 patent
through the reissue process in order to encompass new acts of infringement, their
efforts were thwarted by the provisions of 35 U.S.C. § 251(d), as established by the
Federal Circuit in ArcelorMittal II.

8

equivalents, and ArcelorMittal has not challenged that aspect of the verdict,
any infringement analysis found to be necessary on remand should be
limited to literal infringement.
700 F.3d at 1322 (emphasis added). Rather than run with the ball put in play by the
Federal Circuit, however, plaintiffs have tried to alter the playing field, first through the
broadened RE153 patent, and now through assertion of the RE940 patent in Civ. No.
13-685. 14 Certainly in the first round of motions on remand from ArcelorMittal I, the
focus of the litigation was whether the RE153 patent withstood scrutiny under 35 U.S.C.

§ 251 (d) and I noted in that context that plaintiffs had conceded - by not addressing the fact that the trial record had no evidence of past infringement of claim 1 of the '805
patent as construed by the Federal Circuit, i.e., hot-rolled coated steel sheet having an
ultimate tensile strength of 1500 MPa or greater. (D. I. 297 at 5-6) Even in the current
round of briefing, plaintiffs argue that genuine issues of material fact remain, but only as
to "the new acts of infringement by defendants" occurring "[s]ince the time of the
January 2011 trial." (D.I. 331 at 15) Given the fact that I would not allow the record to
be opened on remand if the '805 patent were still at issue, 15 and given that plaintiffs are
not asserting pre-trial acts of infringement, I find that there are no genuine issues of
material fact as to infringement of claims 24 and 25 of the RE153 patent.
10. Likewise, with respect to the issue of invalidity, plaintiffs devote most of their
current briefing to the proposition, rejected above, that claims 24 and 25 of the RE153

14

1ronically, had plaintiffs simply litigated the '805 patent under the Federal
Circuit's claim construction, they might have a verdict by now on the alleged "new" acts
of infringement rather than the instant procedural quagmire, a classic case of being
hoisted by one's own petard.
15

And recall that the RE153 patent is simply a substitute for the '805 patent.

9

patent are not in play in Civ. No. 10-050. (D.I. 331) Rather than address on a
substantive basis defendants' position that the trial record fails to demonstrate
commercial success, plaintiffs instead argue that, "[a]t a minimum, [the] additional
prosecution history [resulting through reissue proceedings] creates genuine issues of
material fact concerning claims 24 and 25, which were not part of the original trial or the
first Federal Circuit appeal." (Id. at 18, citing Interconnect Planning Corp. v. Feil, 77 4
F.2d 1132, 1139 (Fed. Cir. 1985) ("Upon reissue the 'burden of proving invalidity [is]
made heavier."') (citation omitted). Plaintiffs contend as well that the Federal Circuit's
decision in ArcelorMittal I "does not establish a prima facie case of obviousness as a
matter of law for claims that were not even before the court." (D.I. 331 at 18) In this
regard, plaintiffs suggest that "[a] second jury that considers additional evidence based
on a proper claim construction, the reissue prosecution history, the commercial success
of the patented product, the copying of the patented product by defendants, and other
secondary considerations, with regard to different claims of different scope, may come
to a different conclusion." (Id.)
11. The Federal Circuit in ArcelorMittal I upheld the jury's conclusion "that AK
Steel had established a prima facie case of obviousness." 700 F.3d at 1324. Although
the Court vacated the jury's obviousness verdict because of the erroneous claim
construction, the Court remanded for a new trial "addressing only the commercial
success aspect of obviousness .... " Id. at 1326. The Court declined to enter judgment
in favor of AK Steel, as AK Steel's prima facie case was not "so strong that, as a matter
of law, it would overcome ArcelorMittal's commercial success evidence." 700 F.3d at
1326. The Court also declined to address secondary considerations other than
10

commercial success, noting that plaintiffs had made "passing reference to other
secondary considerations such as copying and unexpected results,'' but had "not
briefed those issues sufficiently to preserve them." Id. at 1325, n.6.
12. The question once again is whether, under the circumstances at bar, I
should allow plaintiffs to start with a clean slate, as though no trial and no appeal had
ever occurred in Civ. No. 10-050. I decline to do so, and confine my analysis to the
scope of the Federal Circuit's mandate in ArcelorMittal I. As explained by the
ArcelorMittal I Court, "[a]bsent a demonstrated nexus, ArcelorMittal's commercial

success evidence is not significant." 700 F.3d at 1326. To meet its burden of
production as to nexus, plaintiffs would need evidence showing "that the product that is
commercially successful is the invention disclosed and claimed in the patent." Croes,
Inc. v. Int'/ Trade Comm'n, 598 F.3d 1294, 1311 (Fed. Cir. 2010). Defendants contend

(and plaintiffs concede by not addressing) that plaintiffs only sell flat-rolled steel sheets
that have not undergone additional heat treating and have not attained an ultimate
tensile strength of 1500 MPa or higher, as required by claim 24. (D.I. 324 at 12-14)16
On this record, I conclude that plaintiffs have not identified any genuine issues of
material fact sufficient to overcome defendants' prima facie case of obviousness.
13. Conclusion. I believe that my decisions thus far bring repose to the dispute
tried to a jury in 2011 and thereafter examined on appeal by the Federal Circuit,
consistent with the mandates issued in ArcelorMittal I and ArcelorMittal II. I

16

Dependent claim 25 of the RE153 patent requires that the coated steel sheet of
claim 24 be composed "predominantly of martensite." Neither plaintiffs nor defendants
address this limitation specifically with respect to invalidity.
11

acknowledge in this regard that plaintiffs may be precluded from asserting infringement
in the future for hot-rolled steel sheets having an ultimate tensile strength of less than
1500 MPa, and that plaintiffs have exerted substantial resources since losing claim
construction in December 2010 to achieve that very objective. Nevertheless, I conclude
that defendants' motions for summary judgment in Civ. No. 10-050 should be granted
and judgment of no infringement and invalidity of the RE153 patent be entered in Civ.
No. 10-050, thus mooting plaintiffs' proposed covenant not to sue. 17 Plaintiffs' motion to
file a first amended complaint in Civ. No. 13-685 is granted. An order shall issue.

17

0f course, if plaintiffs had simply filed the covenant instead of making it
conditional, they could have avoided the entry of judgment - once again, hoisted by
their own petard.
12