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Nova Chemicals Corp. (Canada) v. Dow Chemical Co.

United States Court of Appeals, Federal Circuit

May 11, 2017

NOVA CHEMICALS CORPORATION (CANADA), NOVA CHEMICALS INC. (DELAWARE), Plaintiffs-Appellants
v.
DOW CHEMICAL COMPANY, Defendant-Appellee

         Appeal from the United States District Court for the District of Delaware in No. l:13-cv-01601-LPS, Chief Judge Leonard P. Stark.

          Donald Robert Dunner, Finnegan, Henderson, Farabow, Garrett & Dunner, LLP, Washington, DC, argued for plaintiffs-appellants. Also represented by Mark J. Feldstein, Darrell Christopher Karl.

          RAYMOND N. Nimrod, Quinn Emanuel Urquhart & Sullivan, LLP, New York, NY, argued for defendant-appellee. Also represented by William Adams, Cleland B. Welton, II; Harry J. Roper, Aaron A. Barlow, Paul David Margolis, Jenner & Block LLP, Chicago, IL.

          Before Prost, Chief Judge, DYK and HUGHES, Circuit Judges.

          Prost, Chief Judge.

         NOVA Chemicals Corp. (Canada) and NOVA Chemicals Inc. (Delaware) (collectively, "NOVA") appeal the district court's award of approximately $2.5 million in attorney fees to Dow Chemical Co. ("Dow") under 35 U.S.C. § 285. NOVA filed the underlying action in equity, seeking relief from a prior judgment that it had infringed certain Dow patents. The only issue in this appeal is whether the district court abused its discretion in finding this case exceptional for purposes of § 285. Because it did not abuse its discretion, we affirm.

         I. Background

         We provide only a brief summary of the background, which is recounted in more detail in our opinions addressing the merits of the underlying patent litigation. See Dow Chem. Co. v. Nova Chems. Corp. (Canada) ('Dow 7"), 458 F.App'x 910 (Fed. Cir. 2012); see also Dow Chem. Co. v. Nova Chems. Corp. (Canada) ("Dow IF), 803 F.3d 620, 635 (Fed. Cir. 2015), cert, denied, 136 S.Ct. 2452 (2016).

         A

         In 2005, Dow filed an infringement action in the U.S. District Court for the District of Delaware, alleging that NOVA infringed U.S. Patent No. 5, 847, 053 and U.S. Patent No. 6, 111, 023 ("the asserted patents"). NOVA asserted numerous defenses, including arguments that the accused product did not infringe and that Dow lacked standing to sue because it had transferred ownership of the asserted patents. The court held a jury trial, followed by a bench trial on standing. The district court ultimately held that Dow had standing to sue and entered judgment against NOVA for over $61 million in damages ("the 2010 judgment"). J.A. 442; see also Dow Chem. Co. v. Nova Chems. Corp. (Canada), 726 F.Supp.2d 459 (D. Del. 2010); Dow Chem. Co. v. Nova Chems. Corp. (Canada), No. 05-737-JJF, 2010 WL 3070189 (D. Del. July 30, 2010); Dow Chem. Co. v. Nova Chems. Corp. (Canada), No. 05-737-JJF, 2010 WL 3056617 (D. Del. July 30, 2010). We affirmed that judgment on appeal. Dow I, 458 F.App'x at 921.

         In a separate appeal from the district court's subsequent award of supplemental damages, we held the asserted patent claims to be invalid as indefinite under the Supreme Court's intervening indefiniteness standard in Nautilus, Inc. v. Biosig Instruments, Inc., 134 S.Ct. 2120 (2014). Dow II, 803 F.3d at 635. Our decision in Dow II did not disturb the 2010 judgment relating to pre-verdict infringement. The district court had entered final judgment pursuant to Federal Rule of Civil Procedure 54(b), which NOVA had already paid at the time of the second appeal.

         During the supplemental-dam ages phase of the infringement action, NOVA became aware of evidence allegedly showing that Dow and its counsel had committed fraud on the court in the course of obtaining the 2010 judgment. By then, however, NOVA was time-barred from filing a motion under Federal Rule of Civil Procedure 60(b)(3) to set aside that judgment for fraud, misrepresentation, or misconduct. See Fed. R. Civ. P. 60(c)(1) (setting a one-year time bar). Accordingly, in September 2013, NOVA filed a separate action in equity against Dow ("the equity action") for relief from the 2010 judgment.

         In its amended complaint, NOVA alleged two frauds on the court. First, NOVA asserted with respect to standing that Dow and its counsel had misrepresented Dow's ownership of the asserted patents. NOVA based this allegation on the testimony of a former Dow tax department employee, Edward Valenzuela, in an unrelated Louisiana tax case ("the Louisiana action"). Mr. Valen-zuela testified in that case: "I think [around the end of 2001] all of Dow's patents were contributed to an intangible holding company." J.A. 22554.

         Second, NOVA alleged that Dow's counsel knew or should have known of a "scheme to mislead the jury" with respect to infringement. J.A. 21055, 21081, 21087, 21089 (capitalization omitted). In particular, NOVA contended that Dow's expert, Dr. Joao Soares, had provided conflicting testimony about testing on the ...


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