IP Law Daily, PATENT—D. Del.: Ingevity loses bid for new trial in patent infringement, antitrust dispute with BASF, (Feb 14, 2024)

By Justin Marcus Smith, J.D.

The court concluded there was enough evidence in the record to support the jury’s finding that Ingevity’s carbon honeycombs were staple goods.

Ingevity Corporation (Ingevity) was not entitled to judgment as a matter of law or a new trial in its dispute over patented automotive emission technology in which defendant BASF Corporation (BASF) asserted antitrust counterclaims, including patent-tying, held the federal district court in Wilmington, Delaware. The only question before the court was whether the jury based its verdict and the corresponding $28 million award for BASF’s counterclaims on substantial evidence. The court held that sales spreadsheets supported the jury’s finding that Ingevity’s carbon honeycomb products were staple goods. The court also said it did not think Ingevity was entitled, as a matter of law, to a judgment of no damages. The court similarly held against Ingevity on the jury’s determinations about tying, exclusive dealing, and tortious interference. The court concluded the jury based all of its findings on substantial evidence (Ingevity Corp. v. BASF Corp. , February 13, 2024, Andrews, R.).

Background. Plaintiffs Ingevity Corporation and Ingevity South Carolina, LLC (collectively, Ingevity) filed a patent suit against Defendant BASF alleging infringement of U.S. Patent No. RE38,844 (the ’844 Patent). The ’844 Patent claimed a technology for reducing evaporative emissions. On November 17, 2020, the court invalidated all asserted claims of the ’844 Patent for prior invention.

After BASF filed counterclaims alleging ’844 Patent tying and unlawful restraint of competition, the parties filed cross-motions for summary judgment, but the court denied both motions. The court ruled that BASF’s tying claims involved a disputed question of fact about whether Ingevity’s carbon honeycombs were staple goods.

The jury ultimately found that Ingevity 1) unlawfully tied ’844 Patent licenses to carbon honeycomb sales; and, 2) unlawfully interfered with BASF’s prospective business relationship with Kayser. Accordingly, the court awarded over $28 million to BASF on the BASF counterclaims. The court then determined that Noerr-Pennington did not immunize Ingevity’s conduct. The court rejected Ingevity’s argument that, even if the carbon honeycombs were staple goods as the jury had decided, that did not determine Ingevity’s First Amendment and patent law immunity defenses. After the court rendered its Noerr-Pennington decision, Ingevity made a renewed motion for judgment as a matter of law and motion for a new trial to the district court.

Staple goods. As to whether Ingevity should get a new trial on the staple goods question, the district court referenced how spreadsheets in the trial record showed thousands of air intake application purchases. The court held it was not unreasonable for the jury to rely more on these written documents than an interested party’s testimony about whether the documents contained errors. In the court’s view, an expert dispute over the suitability of the honeycombs for air intakes also came down to a jury credibility determination.

As to Ingevity’s argument the spreadsheets only showed anticipated use, not actual use, the court agreed with BASF that the jury could have relied on other kinds of circumstantial evidence to reach the same conclusion that the honeycombs were actually used in automotive air intake systems.

As to Ingevity’s argument that any actual use could not have been substantial, the court concluded it was permissible for the jury to analyze substantial use with reference to something other than percentage thresholds. The court said the jury could have reasonably concluded that a miniscule fraction of sales constituted substantial use to the extent substantiality can turn on a “variety of factors.”

Damages. The court said it did not think Ingevity was entitled, as a matter of law, to a judgment of no damages. BASF only needed to show Ingevity’s conduct was a material or substantial cause of its injury, not that it was the sole cause. The jury instructions and record evidence were consistent. The court also found the jury could have reasonably believed BASF’s expert over Ingevity’s expert that disaggregation of damages by lawful versus unlawful conduct was “impossible.” The court concluded Ingevity’s arguments did not call for a new trial here.

Tying arrangement. The court concluded there was substantial evidence in the record, including an expert opinion of a classic tying arrangement, that supported the jury’s finding that a tying arrangement existed. Ingevity raised several arguments to the contrary, including that there was no evidence of tying because: 1) it had merely made lawful statements in accord with the patent laws and First Amendment that it would enforce its patents; and 2) BASF’s evidence about price increases related only to carbon products. BASF, in contrast, contended the jury found liability for communications that were not protected, and, moreover, it was “undisputed” that Ingevity told customers that they had to buy Ingevity honeycombs to practice the ‘844 patent, i.e., “textbook” tying. The court sided with BASF again on the jury’s conclusions about tying.

Exclusive dealing. The court dismissed those portions of Ingevity’s motions for judgment and a new trial as moot in light of its finding that the jury had substantial evidence to find a tying arrangement. The court explained that one of the experts opined total damages would be the same if the jury had found only a tying arrangement.

Tortious interference. The court concluded there was substantial evidence for the jury finding of tortious interference. BASF’s evidence suggested not only that Ingevity knew about BASF’s prospective relationship with Kayser but Ingevity sought to interfere with it. The court held the jury was entitled to credit that evidence over Ingevity’s evidence.

The case is No. 18-1391-RGA.

Attorneys: Karen Elizabeth Keller (Shaw Keller LLP) for Ingevity Corp. and Ingevity South Carolina, LLC. Rodger Dallery Smith, II (Morris, Nichols, Arsht & Tunnell LLP) for BASF Corp.

Companies: Ingevity Corp.; Ingevity South Carolina, LLC; BASF Corp.

Cases: Patent DelawareNews