Kemin Foods, L.C. v. Pigmentos Vegetales del Centro S.A. de C.V. ("PIVEG") (05-1479) - September 25, 2006
The patents in suit include process and product claims pertaining to purified lutein that is extracted from plants. Lutein is a carotenoid (i.e., an organic, naturally occurring pigment) that Kemin and PIVEG incorporate in dietary health supplements that they manufacture and distribute.
While Kemin won on infringement of another patent in the same suit, Kemin unsuccessfully argued in the district court that PIVEG infringed certain product claims of U.S. Patent No. 5,382,714 . During trial, Kemin intended to pursue an allegation of infringement of a process claim ’714 patent, but was effectively precluded from doing so by a pretrial order striking a supplemental expert report proffered by Kemin.
In its original complaint, Kemin broadly alleged that PIVEG was infringing on its patents, "including without limitation claim 1" of the '714 patent. During the course of litigation, Kemin listed claims 1, 2, and 4 of the ’714 patent, but "reserved" the right to pursue claim 5 (the process claim) pending further discovery:
To date . . . discovery regarding PIVEG’s actual process has been unreliable at best and is the subject of a motion to compel by Kemin. Thus, it is possible that PIVEG may use a water/alcohol mixture, as the solvent in its process, thereby infringing the method of claim 5 of the ’714 patent. Accordingly, as discovery is ongoing, Kemin reserves the right to assert claim 5 of the ’714 patent when PIVEG’s process is known. There are no additional claim construction issues that arises [sic] with respect to claim 5 of the ’714 patent which are not already addressed [by the briefing on the claims already specifically asserted].Kemin apparently had difficulty obtaining information about PIVEG’s process in making the allegedly infringing process. Pursuant to a corporate policy, PIVEG maintained no documentation of its process for purifying lutein. The only documentary evidence PIVEG provided Kemin was a two-page document prepared at the request of PIVEG’s litigation counsel. As part of discovery, Kemin was permitted to visit PIVEG’s manufacturing facility, which is located in Mexico. When Kemin visited the facility, however, various parts of PIVEG’s process were either not operating at all or were not operating under normal conditions.
As a result, the district court ordered a second inspection, and this time the site visit suggested some inconsistencies between PIVEG’s actual process and its two-page process document. Kemin’s supplemental expert report explained that analysis of samples collected during the second visit suggested—for the first time—that PIVEG’s process might be covered under claim 5 (PIVEG subsequently claimed they changed their process after the second visit)
Oddly enough, the magistrate judge would have none of it, and admonished Kemin for the late timing of the "additional claim" raised by the supplemental expert report. Apparently. the magistrate judge believed the claim was being raised in the supplemental expert report for the first time in the litigation. Needless to say, the Federal Circuit reversed:
This case is a rather amusing read. Almost every stock legal theory related to patent law was asserted in this case, including unfair competition and antitrust - Kemin even managed to obtain a 35 U.S.C. 295 presumption at one point, based on PIVEG's conduct (see Dennis Crouch's Patently-O post on this case here). At one point, PIVEG argued with the court about who should have been deemed the "prevailing party" for the purposes of FRCP 54(d), even though PIVEG was found to have infringed and subject to an injunction.
We see nothing more Kemin could have done to keep claim 5 alive during the pretrial phase of the litigation. Kemin repeatedly advised the court and PIVEG that once it obtained information about PIVEG’s process, that information might implicate claim 5. In the Markman briefing, Kemin took account of claim 5. And as soon as it obtained sufficient information about PIVEG’s process, Kemin provided a detailed analysis of its claim 5 infringement contentions. Under these circumstances, we conclude that the magistrate judge should not have granted PIVEG’s motion to strike Kemin’s supplemental expert report.
Because the supplemental expert report was the primary—perhaps even the sole—evidentiary basis for Kemin’s claim 5 infringement allegation, the effect of the magistrate’s decision was to preclude Kemin from pursuing its allegation of infringement of claim 5. That outcome is potentially significant, because in order to avoid the effect of the ’564 patent injunction, PIVEG asserts that it has switched to a new process. Yet according to Kemin, even if that process falls outside the injunction, it still might infringe claim 5 of the ’714 patent. Thus, we vacate the judgment as it applies to claim 5 of the ’714 patent, and we remand for the district court to consider Kemin’s supplemental expert report and Kemin’s related allegation that PIVEG infringes claim 5 of the ’714 patent.
Oh, and the damages going into appeal? $58,775.
Another worthwhile note is that claim construction was not an issue in this case, leaving the court with the more deferential "clearly erroneous" and "substantial evidence" standards for review. With the one exception, almost all of the lower court's findings were affirmed on appeal in all respects.