On Monday, January 30, a jury in a Delaware district court issued a $28 million verdict in favor of Evonik Degussa GmbH. Its competitor, Materia Inc., was found guilty of infringing Evonik's U.S. Patent No. 7,378,528.
Evonik's website describes itself as "one of the world's leading specialty chemical companies," and claims that in 2015 it generated sales around €13.5 billion (approximately $14.5 billion U.S.). Similarly, Materia "develops and manufactures catalysts and advance materials" for "chemical, electronic, energy, industrial, pharmaceutical, and transportation companies." These two companies would certainly have a significant amount of overlap in the types of technology they would utilize.
Evonik's patent covers technology relating to metathesis catalysts. These types of catalysts are common in petroleum reformation, pharmaceutical drugs, and other specialized compounds. These catalysts essentially aid a relatively simple reaction that is favored because it results in very little hazardous waste and by-products.
This suit was originally filed in 2009, and after eight years has finally reached a (preliminary) resolution. Materia's infringement had been established in October of 2015, leaving two main issues yet to be decided. First, the court had to determine if the '528 patent was valid. According to Law360, Materia argued the '528 patent was too poorly described to be valid, but the jury disagreed. Following that, the jury was tasked with determining the damages Evonik would receive. Evonik was eventually awarded damages based on a reasonable 5.5% royalty determination. Although $28 million in damages seems like a significant amount, Evonik was pushing for even more. However, the jury failed to find the infringement was willful, which would have led to the higher damage award.
This ruling displays the importance of three things. First, as a patent attorney, it reiterates the importance of drafting a solid application. The jury had serious deliberations regarding whether the patent was descriptive enough to be valid, and if it had found otherwise Evonik would not have been able to receive any damages at all. Second, this case highlights the difference between willful infringement and non-willful infringement. Because its infringement was found not to be willful, Materia effectively was only penalized for the payments it would have made to Evonik if the two parties had worked out a reasonable licensing agreement. However, this penalty would have been significantly higher if the jury had found Materia's infringement to be willful. Third, patent lawsuits can take forever. If this lawsuit was a child, it would be a first grader. This suit was originally filed in 2009 and just now has reached an initial ruling in district court. It is also possible that this ruling could go up on appeal, so there is no guarantee the case has concluded. Stay tuned for updates regarding a potential appeal up to the Federal Circuit.