The Federal Circuit has overturned the invalidation of a Maxell patent asserted against battery manufacturer Amperex Technology. On March 6, the appellate court issued a precedential opinion in which it held that Western District of Texas Judge Alan D. Albright erred by concluding that certain claim limitations were both optional and required, a "contradiction" that rendered the patent indefinite. This conclusion was "inapt", the Federal Circuit countered—ruling instead that there was no contradiction under a proper reading of the claims. Despite that decision, all four patents-in-suit remain invalid as a result of inter partes reviews (IPRs) for which appeals are currently active before the Federal Circuit.
Earlier Litigation Sees Parties Spar over Alternative Service, Venue, and Jurisdiction
The underlying dispute first hit the courts in April 2021, when TDK subsidiary Amperex—citing licensing discussions initiated by Maxell—filed a declaratory judgment action in the District of New Jersey, soon after the end of a one-year litigation standstill between the parties, and days before a deadline after which Maxell threatened litigation of its own. The patent owner then "reluctantly" filed that threatened action two days later in the Western District of Texas, accusing Amperex of infringing the same four patents at issue in the New Jersey action (8,691,446; 9,077,035; 9,166,251; 9,350,019).
That September, Amperex filed a motion to dismiss the Texas action under the first-to-file rule. Echoing similar arguments raised on both sides in other Maxell cases, Amperex further raised issues pertaining to alternative service, proper venue, and personal jurisdiction. With respect to service, Amperex (a Hong Kong corporation) argued that Maxell (a Japanese corporation), while allegedly evading service in New Jersey, had improperly tried to serve the Texas complaint to Amperex in Hong Kong, asserting that the person who accepted service was not authorized to do so and that Maxell instead needed to effect service via the Hague Convention. Amperex also argued that Maxell had failed to establish general or specific jurisdiction against it in West Texas, alleging that in its attempts to establish specific jurisdiction, Maxell had cited outdated information on product sales (outside the damages period), seeking in the alternative to transfer the Texas case to New Jersey. Back in the New Jersey action, Maxell filed its own motion to dismiss or transfer to West Texas, in part invoking the anticipatory-suit exception to the first-to-file rule (which bars a suit that a party improperly files in a preferred forum after receiving a threat of a "mirror image" suit in another court). The court granted transfer to West Texas on that basis, a decision that the Federal Circuit subsequently declined to overturn based on a mandamus petition from Amperex.
In January 2022, Judge Albright then denied Amperex's motion to dismiss, ruling that the court had specific jurisdiction over the defendant due to its sale of certain products to a customer based in Dallas (which falls in the Northern District of Texas), its shipment of other products to customers elsewhere in Texas, and certain activities (including communications and the provision of sample products) related to potential sales in Austin. As for service of process, Judge Albright found that because Hong Kong had not opted out of Article 10 of the Hague Convention (which permits other means of service instead of service through a member state's "Central Authority"), it was appropriate to determine whether service had been proper under Hong Kong law—determining, under the applicable ordinance, that Maxell had properly effected personal service by serving a company representative at Amperex's registered Hong Kong Address. Judge Albright also declined to dismiss under the first-to-file rule, citing the New Jersey court's ruling invoking the anticipatory-suit exception, and rejected the defendant's request to transfer the case.
Court's Markman Order Knocks Out One Patent; PTAB Then Invalidates All Four
The case then proceeded through claim construction, which went poorly for the plaintiff as to the '035 patent. In February 2022, Judge Albright provided the parties with a set of preliminary claim constructions that, among others, adopted the defendant's position that the following term from claim 1 of that patent—describing a lithium-ion battery's positive electrode and requiring "at least two lithium-containing transition metal oxides, represented by formulas that include a transition metal element M1" (as later summarized by the Federal Circuit)—is invalid as indefinite:
"M1 represents at least one transition metal element selected from [cobalt], [nickel] and [manganese], . . . wherein the content of [cobalt] in the transition metal M1 of the formulae (1) and (2) is from 30% by mole to 100% by mole".
The following month, Maxell filed a motion for reconsideration of that construction or, in the alternative, for partial final judgment on the '035 patent. That November, the court then issued a Markman order setting its final claim constructions, including (atypical for Judge Albright) a written analysis detailing the basis for his conclusions. In that order, Judge Albright agreed with the defendants that because formulae 1 and 2 both include M2 and M3, which can be one of several specified metal elements but also allow the concentrations to be zero (for M2 in formula 2 and for M3 in both formulae), the "claims simultaneously require the presence of M2 and M3 but also describe them being as optional", which is "contradictory and thus indefinite". The identified contradiction stemmed from the fact that "[t]he first part of the claim recites a Markush group where [cobalt] is not necessarily required to be in the claimed compound while the second part of the claim recites that [cobalt] is necessarily required". Characterizing the first part of the claim as providing "options" (cobalt, nickel, and manganese), he held that "[f]or an element to simultaneously be optional and required is a contradiction on its face". Judge Albright determined as a result that "that there is clear-and-convincing evidence that a POSITA [(person of ordinary skill in the art)] would not understand with 'reasonable certainty' what this claim requires", rejecting multiple arguments to the contrary from Maxell. Judge Albright also granted partial final judgment for the '035 patent, severing and staying claims relating to that patent. The patent owner appealed later that month ( 23-1194).
In late March 2023, meanwhile, the Patent Trial and Appeal Board (PTAB) invalidated all claims from the four patents-in-suit in IPRs filed by Amperex (with three cofiled by campaign codefendant Zhuhai CosMX Battery). Following those decisions, Amperex renewed its motion to stay pending the outcome of any appeals or rehearing petitions with respect to the two patents that remained in suit (the '019 and '251 patents, with Maxell having dropped the '446 patent to narrow the list of asserted claims earlier that month). Judge Albright then granted that motion in early April, three weeks before the case had been scheduled to go to trial. As noted above, appeals are active for all four IPRs, with briefing having completed in each proceeding in late February.
The Federal Circuit Reverses on Indefiniteness
Ruling on appeal on March 6, the Federal Circuit held that the rationale underpinning Judge Albright's decision had been "incorrect" in that "there is no contradiction in the claim language at issue in this case". Since it is "perfectly possible for a transition metal element to meet both requirements", the appellate court determined that "[t]he two limitations are therefore not contradictory". This logic is not disturbed by the fact that the "two requirements are placed in separate limitations" (the first in limitation [c], and the second in limitation [f]), the court explained: One must read later text alongside "earlier text to discern its meaning", and it does not matter that it would have been more "artful" to place both limitations within limitation [c] (particularly since that placement is readily explained by the fact that the second limitation "was added during prosecution to overcome a prior art reference that primarily used nickel as a transition metal").
With this in mind, the Federal Circuit ruled that Judge Albright was wrong to read limitation [c] as providing "options" (cobalt, nickel, or manganese") for the makeup of M1 that (as paraphrased by the appellate court) "limitation [f] then takes back". That characterization is "inapt", the Federal Circuit held: Beyond the fact that it wrongly reads the "limitations in isolation from each other", the court explained, "[c]laim limitations do not grant options. They state requirements—conditions that must be met for a product or process (as the case may be) to come within the claim's protected zone of exclusivity. If there are two requirements, and it is possible to meet both, there is no contradiction". Indeed, the court noted that this is the same idea behind the principle by which dependent claims add "narrowing limitations to the independent claims to which they refer", determining that there is no difference where, as here, "the further narrowing limitation is recited in the independent claim itself".
The Federal Circuit then concluded by overturning Judge Albright's indefiniteness order and the resulting partial final judgment, remanding for further proceedings.
For more on an earlier Maxell case with a similar procedural history, see "West Texas Maxell-Lenovo Litigation Touches on Alternative Service, Proper Venue, Personal Jurisdiction over Foreign Defendants" (April 2022). More on the growing trend that has allowed plaintiffs to circumvent complications when serving foreign defendants, a trend continued by the rulings discussed in the present article, can also be found at "Motions for Alternate Service on Foreign Defendants Multiply, Particularly in Texas" (February 2022).
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