Kaneka Corp. v. Xiamen Kingdomway Group Co. , 790 F.3d 1298 ( 2015 )

United States Court of Appeals
for the Federal Circuit
______________________
KANEKA CORPORATION,
a Japanese Corporation,
Plaintiff-Appellant
v.
XIAMEN KINGDOMWAY GROUP COMPANY,
a Chinese Corporation,
PACIFIC RAINBOW INTERNATIONAL INC.,
a California Corporation,
SHENZHOU BIOLOGY AND TECHNOLOGY CO.,
LTD., a Chinese Corporation,
Defendants-Appellees
______________________
2014-1373, -1399
______________________
Appeals from the United States District Court for the
Central District of California in No. 2:11-cv-02389-MRP-
SS, Senior Judge Mariana R. Pfaelzer.
______________________
Decided: June 10, 2015
______________________
KEITH D. NOWAK, Carter Ledyard & Milburn, LLP,
New York, NY, argued for plaintiff-appellant. Also repre-
sented by ROBERT MCGEE BOWICK, JR., Raley & Bowick,
LLP, Houston, TX.
REECE WERNER NIENSTADT, Mei & Mark LLP, Wash-
ington, DC, argued for defendants-appellees Xiamen
2 KANEKA CORPORATION v. XIAMEN KINGDOMWAY
Kingdomway Group Company, Pacific Rainbow Interna-
tional Inc. Also represented by XIANG LONG, LEI MEI.
TIMOTHY PAAR WALKER, K&L Gates LLP, San Fran-
cisco, CA, argued for defendant-appellee Shenzhou Biolo-
gy and Technology Co., Ltd. Also represented by LEI
HOWARD CHEN, HAROLD H. DAVIS, JR., JAS SINGH DHILLON
GARY HNATH, Mayer Brown LLP, Washington, DC, for
amici curiae, Zhejiang Medicine Co., Ltd, ZMC-USA, LLC.
Also represented by PAUL WHITFIELD HUGHES; TRENTON
MENNING, HENRY M. GRIFFIN IV, CHARLES STEPHEN
KELLEY, Houston, TX.
______________________
Before NEWMAN, REYNA, and HUGHES, Circuit Judges.
REYNA, Circuit Judge.
Kaneka Corporation sued Defendants Xiamen King-
domway Group Company, Pacific Rainbow International
Inc., and Shenzhou Biology and Technology Co., Ltd., in
the Central District of California, alleging infringement of
U.S. Patent No. 7,910,340 (the ’340 Patent). The district
court granted summary judgment of noninfringement
based on the district court’s claim construction. Kaneka
appealed. For the reasons that follow, we affirm-in-part,
vacate-in-part, and remand.
BACKGROUND
Coenzyme Q10 exists in animal cells. Cells use coen-
zyme Q10 to produce adenosine triphosphate, which aids
cellular respiration. Coenzyme Q10 assists adenosine
triphosphate production through redox reactions, in which
the coenzyme gives up and gains electrons. Both oxidized
and reduced coenzyme Q10 are sold as dietary supple-
ments.
KANEKA CORPORATION v. XIAMEN KINGDOMWAY 3
Kaneka owns the ’340 Patent, which describes pro-
cesses for producing oxidized and reduced coenzyme Q10.
The claims at issue in this appeal describe processes for
producing oxidized coenzyme Q10. Independent claim 1
recites:
1. A process for producing on an industrial scale
the oxidized coenzyme Q10 represented by the fol-
lowing formula:
which comprises culturing reduced coenzyme Q10-
producing microorganisms in a culture medium
containing a carbon source, a nitrogen source, a
phosphorus source and a micronutrient to obtain
microbial cells containing reduced coenzyme Q10
at a ratio of not less than 70 mole % among the
entire coenzymes Q10,
disrupting the microbial cells to obtain reduced
coenzyme Q10; and
oxidizing thus-obtained reduced coenzyme Q10 to
oxidized coenzyme Q10 and then extracting the ox-
idized coenzyme Q10 by an organic solvent under
an inert gas atmosphere.
’340 Patent col. 23 l. 56–col. 24 l. 25; J.A. 80 (certificate of
correction) (emphasis added to disputed language).
4 KANEKA CORPORATION v. XIAMEN KINGDOMWAY
Claim 11 is identical to claim 1 except the extraction
step is recited before the oxidation step. ’340 Patent col.
24 l. 50–col. 25 l. 6 (“extracting the reduced coenzyme Q10
by an organic solvent under an inert gas atmosphere, and
oxidizing the extracted reduced coenzyme Q10 to oxidized
coenzyme Q10”).
Independent claims 22 and 33 are identical to claims
1 and 11, respectively, except that the extraction step
recited in claims 22 and 33 is carried out in a “sealed
tank.” Claim 22, like claim 1, recites the oxidation step
before the extraction step. Id. col. 25 ll. 32–54 (“oxidizing
thus-obtained reduced coenzyme Q10 to oxidized coenzyme
Q10 and then extracting the oxidized coenzyme Q10 by an
organic solvent in a sealed tank”) (emphasis added to
disputed language). Claim 33 is identical to claim 22
except the extraction step is recited before the oxidation
step. Id. col. 26 ll. 13–36 (“extracting the reduced coen-
zyme Q10 by an organic solvent in a sealed tank, and
oxidizing the extracted reduced coenzyme Q10 to oxidized
coenzyme Q10”) (emphasis added to disputed language).
On March 22, 2011, Kaneka filed suit in the Central
District of California, asserting independent claims 1, 11,
22, and 33, along with respective dependent claims. In
June, Kaneka filed a Section 337 Petition in the U.S.
International Trade Commission (“Commission”) involv-
ing the same claims. The district court stayed the lawsuit
pending resolution of the Commission proceeding. The
Commission issued a decision finding no infringement by
any of the respondents.
Following the conclusion of the Commission proceed-
ing, the district court lifted the stay and construed the
asserted claims. The court construed the term “inert gas
atmosphere” to mean “a gas atmosphere that is free or
substantially free of oxygen and reactive gases.” J.A.
3578. The “culturing” step was construed such that the
mole ratio of reduced coenzyme Q10 relative to all the
KANEKA CORPORATION v. XIAMEN KINGDOMWAY 5
coenzyme Q10 in the process would be measured at a
certain point in the process according to a particular
assay described in the ’340 Patent. J.A. 14051. The court
construed the term “sealed tank” to mean “a tank that is
closed to prevent the entry or exit of materials.” J.A.
3579. The “oxidizing” step of claims 1 and 22 was con-
strued to mean “actively converting all or substantially all
of the reduced coenzyme Q10 obtained from the disruption
step to oxidized coenzyme Q10 in a step before beginning
the extraction step,” while the “oxidizing” step of claims
11 and 33 was construed to mean “actively converting all
or substantially all of the extracted reduced coenzyme Q10
obtained from the disruption step to oxidized coenzyme
Q10 in a separate step after the extraction step has been
performed.” J.A. 3585–86.
Based on the district court’s claim construction, De-
fendants moved for summary judgment of noninfringe-
ment with respect to claims 1, 11, 22, 33, and associated
dependent claims. The district court found an absence of
a genuine issue of material fact that Defendants’ accused
process does not infringe on the basis of the court’s con-
struction of three claim terms: “inert gas atmosphere,”
“sealed tank,” and the “oxidizing” step. Kaneka appealed
from the district court’s summary judgment, challenging
the district court’s claim construction. We have jurisdic-
tion under 28 U.S.C. § 1295(a)(1).
DISCUSSION
We first address whether Kaneka waived the right to
challenge certain arguments regarding the district court’s
grant of summary judgment. Shenzhou contends that
although Kaneka argued claim construction in its opening
brief, Kaneka failed to identify a genuine issue of material
fact as to whether Appellees would infringe the asserted
claims under Kaneka’s proposed construction.
We disagree. For the reasons that follow, the district
court’s grant of summary judgment of noninfringement
6 KANEKA CORPORATION v. XIAMEN KINGDOMWAY
rests on an erroneous claim construction. Hence, a genu-
ine issue of material fact concerning infringement may
exist under the proper construction. See Wilson Sporting
Goods Co. v. Hillerich & Bradsby Co., 442 F.3d 1322, 1326
(Fed. Cir. 2006) (“[T]he legal function of giving meaning to
claim terms always takes place in the context of a specific
accused infringing device or process.”). Summary judg-
ment should ordinarily be vacated or reversed if the
district court bases summary judgment on an erroneous
claim construction. Innovad Inc. v. Microsoft Corp., 260
F.3d 1326, 1335 (Fed. Cir. 2001).
We review a district court’s grant of summary judg-
ment according to the law of the regional circuit, here the
Ninth Circuit, where summary judgment is reviewed de
novo. Halo Elecs., Inc. v. Pulse Elecs., Inc., 769 F.3d 1371,
1377 (Fed. Cir. 2014) (citing Humane Soc’y of U.S. v.
Locke, 626 F.3d 1040, 1047 (9th Cir. 2010)). Accordingly,
we reapply the standard applied by the district court. See
Bos. Scientific Corp. v. Johnson & Johnson, 647 F.3d
1353, 1361 (Fed. Cir. 2011). In the Ninth Circuit, sum-
mary judgment is appropriate when, drawing reasonable
inferences in favor of the non-moving party, there is no
genuine issue of material fact. Comite de Jornaleros de
Redondo Beach v. City of Redondo Beach, 657 F.3d 936,
942 (9th Cir. 2011). We review claim construction de novo
except for subsidiary facts that are based on the extrinsic
record, which we review for clear error. Teva Pharm.
U.S.A. Inc. v. Sandoz, Inc. 135 S. Ct. 831, 841–42 (2015);
Info-Hold, Inc. v. Applied Media Techs. Corp., No. 2013-
1528, 2015 WL 1865680, at *3 (Fed. Cir. Apr. 24, 2015).
I. “Inert Gas Atmosphere”
The district court construed the term “inert gas at-
mosphere” to mean “a gas atmosphere that is free or
substantially free of oxygen and reactive gases.” J.A.
3578. While Kaneka made claim construction arguments
challenging the district court’s construction of this claim
KANEKA CORPORATION v. XIAMEN KINGDOMWAY 7
term in its opening brief, Kaneka later withdrew its
arguments in light of another unfavorable claim construc-
tion of this term in a related case pending in the Southern
District of Texas. Letter of Appellant Kaneka at 2,
Kaneka Corp. v. Xiamen Kingdomway, Nos. 14-1373, -
1399 (Fed. Cir. Oct. 16, 2014), ECF No. 103. As a result,
we affirm the district court’s grant of summary judgment
of noninfringement of independent claims 1 and 11 and
dependent claims 8-9 and 19-20.
II. “Sealed Tank”
In construing the term “sealed tank,” the district
court adopted “in its entirety” the reasoning of the Com-
mission in the related proceeding that involved the same
claim term. In that proceeding, the Commission consult-
ed a dictionary definition that defined “seal” as “a tight
and perfect closure (as against the passage of gas or
water)” because the term “sealed” is not defined in the
specification. J.A. 5347 (citing Merriam-Webster’s Colle-
giate Dictionary, 10th ed. (2001)). An expert testifying
before the Commission agreed with this meaning, explain-
ing that the plain meaning of “sealed” is “airtight.” Id.
On that basis, the district court construed the term
“sealed tank” to mean “a tank that is closed to prevent the
entry or exit of materials.” J.A. 3579.
Kaneka argues that the district court’s construction
conflicts with the intrinsic record because the specifica-
tion suggests that the “sealed tank” is not closed to pre-
vent entry and exit of all materials. Defendants respond
that the district court’s construction is consistent with the
only plain and ordinary meaning of the term “sealed,”
that is not otherwise defined by the specification.
We agree with Kaneka that the district court’s con-
struction is inconsistent with the intrinsic record. Claim
construction begins with the language of the claims.
Phillips v. AWH Corp., 415 F.3d 1303, 1312–14 (Fed. Cir.
2005) (en banc); Vitronics Corp. v. Conceptronic, Inc., 90
8 KANEKA CORPORATION v. XIAMEN KINGDOMWAY
F.3d 1576, 1582 (Fed. Cir. 1996). When interpreting
claim language, courts consult the intrinsic record, which
includes the specification and prosecution history. Phil-
lips, 415 F.3d at 1315–17. The specification is “the single
best guide to the meaning of a disputed term.” Id. at 1315
(citation omitted). Extrinsic evidence, such as dictionary
definitions, for example, may be useful when construing
claim terms, “so long as the dictionary definition does not
contradict any definition found in or ascertained by a
reading of the patent documents.” Id. at 1322–23 (inter-
nal quotation marks omitted and emphasis added).
The district court’s reliance on the Commission’s dic-
tionary definition and related testimony conflicts with the
intrinsic record. Figure 1 and Example 8 suggest that the
“sealed tank” should be sealed to the atmosphere, but not
necessarily to other materials, such as solvents. See ’340
Patent col. 23 ll. 17–44. In the industrial scale process of
Example 8, a solution of disrupted (ruptured) cells con-
taining reduced coenzyme Q10 is “sealed with nitrogen
gas,” i.e., sealed under an inert gas atmosphere such that
solution contents are not exposed to the atmosphere, and
continuously extracted in a manner that allows solvent to
flow into and out of the extraction tanks depicted in
Figure 1. Though Example 8 refers to extracting reduced
coenzyme Q10, the specification describes how to similarly
extract oxidized coenzyme Q10. See, e.g., id. col. 17 ll. 1–5.
By depicting solvent flowing into and out of the extraction
tanks, the specification indicates that the “sealed tank” is
not sealed to prevent entry or exit of all materials.
In addition, the district court’s construction of “sealed
tank” excludes Figure 1 and Example 8, which are the
only examples of an industrial scale process, as the other
examples describe lab-scale processes. A claim construc-
tion that excludes a preferred embodiment is “rarely, if
ever, correct.” MBO Labs., Inc. v. Becton, Dickinson &
Co., 474 F.3d 1323, 1333 (Fed. Cir. 2007) (citation omit-
ted). A construction that excludes all disclosed embodi-
KANEKA CORPORATION v. XIAMEN KINGDOMWAY 9
ments, such as the district court’s construction of the term
“sealed tank,” is especially disfavored. See id.
Defendants argue that because the patentee did not
define the term “sealed,” the term must have one plain
and ordinary meaning that governs. We disagree. An
adjective such as “sealed” may have more than one plain
and ordinary meaning. See, e.g., O2 Micro Int’l Ltd. v.
Beyond Innovation Tech. Co., 521 F.3d 1351, 1361 (Fed.
Cir. 2008) (recognizing that a term may have more than
one “ordinary” meaning). Although the specification does
not specifically define the term “sealed,” the appropriate
definition can be ascertained from the specification. See
Phillips, 415 F.3d at 1322–23.
Defendants argue that “sealed” must be construed ac-
cording to the dictionary definition because the written
description never uses the term “sealed”—the patentee
added the term “sealed” to the claims during prosecution.
Defendants also highlight that Figure 1 does not label the
tanks as “sealed.” We disagree that “sealed” must be
construed using a dictionary. As in the written descrip-
tion context, word-for-word alignment of disclosed embod-
iments (such as the extraction tanks depicted in Figure 1)
with claim language is unnecessary when the meaning of
a claim term can be ascertained from the intrinsic record.
See Fujikawa v. Wattanasin, 93 F.3d 1559, 1570 (Fed. Cir.
1996); Phillips, 415 F.3d at 1322–23. Accordingly, we
hold that the term “sealed tank,” means “a tank that
prevents exposure of the tank’s contents to the atmos-
phere.”
III. “Oxidizing” Step
The district court construed “oxidizing” in claims 1
and 22 to mean “actively converting all or substantially
all of the reduced coenzyme Q10 obtained from the disrup-
tion step to oxidized coenzyme Q10 in a step before begin-
ning the extraction step,” while “oxidizing” in claims 11
and 33 was construed to mean “actively converting all or
10 KANEKA CORPORATION v. XIAMEN KINGDOMWAY
substantially all of the extracted reduced coenzyme Q10
obtained from the disruption step to oxidized coenzyme
Q10 in a separate step after the extraction step has been
performed.” J.A. 3585–86. The district court concluded
that this construction has four limitations. First, oxida-
tion “must be an active, not a passive, process.” J.A.
14059. Second, “all or substantially all” of the reduced
coenzyme Q10 must be converted during the oxidation
step. Id. Third, oxidation must occur either before the
extraction step in claim 22 or after the extraction step in
claim 33. Id. Fourth, oxidation must occur separately
from the culturing, disruption, and extraction steps. Id.
Kaneka argues that the district erred for two reasons.
First, the claims do not require active conversion of re-
duced coenzyme Q10 to oxidized coenzyme Q10. Second,
the claims do not require that “all or substantially all” of
the reduced coenzyme Q10 be oxidized in a single step.
Defendants counter that the claim language requires
that the recited steps be performed in order. Defendants
contend that the order necessarily requires that “all or
substantially all” of the coenzyme Q10 be oxidized during
the oxidation step, and that no oxidation can occur during
other steps.
We agree that oxidation requires an active step. A
process is defined as “an act, or a series of acts.”
Gottschalk v. Benson, 409 U.S. 63, 70 (1972); In re Kollar,
286 F.3d 1326, 1332 (Fed. Cir. 2002) (“[A] pro-
cess . . . consists of a series of acts or steps . . . . It consists
of doing something, and therefore has to be carried out or
performed.”). Here, because the claims affirmatively
recite the step of “oxidizing,” “oxidizing” cannot be inter-
preted as doing nothing, or to simply allow oxidation to
occur on its own. Nor can the other recited claim steps,
such as culturing or disrupting, suffice as the active step
resulting in oxidation. If those other steps qualify as the
KANEKA CORPORATION v. XIAMEN KINGDOMWAY 11
oxidation step, the patentee’s inclusion of a separate
oxidation step would have no significance.
The oxidation step requires action, but it does not re-
quire the use of an oxidizing agent. Though the preferred
embodiment uses an oxidizing agent, see, e.g., ’340 Patent
col. 17 l. 13., we must be cautious not to import preferred
limitations into the claims. See Laitram Corp. v. Cam-
bridge Wire Cloth Co., 863 F.2d 855, 865 (Fed. Cir. 1998).
Dependent claims 25, 26, 37, and 38 also recite an oxidiz-
ing agent, ’340 Patent col. 25 ll. 61–64; col. 26 ll. 44–47,
but it would be improper to import a claim limitation from
a dependent claim into an independent claim, see Inter-
Digital Commc’ns, LLC v. Int’l Trade Comm’n, 690 F.3d
1318, 1324 (Fed. Cir. 2012) (quoting Liebel–Flarsheim Co.
v. Medrad, Inc., 358 F.3d 898, 910 (Fed. Cir. 2004) (“The
doctrine of claim differentiation is at its strong-
est . . . ‘where the limitation that is sought to be ‘read
into’ an independent claim already appears in a depend-
ent claim.’”)). Thus, an oxidizing agent is not required to
carry out the “oxidizing” step.
We also agree that some oxidation must occur before
the extraction step in claim 22 or after the extraction step
in claim 33. Where the steps of a method claim actually
recite an order, we ordinarily construe the claim to re-
quire order. See Interactive Gift Exp., Inc. v. Compuserve
Inc., 256 F.3d 1323, 1342 (Fed. Cir. 2001). A method
claim can also be construed to require that steps be per-
formed in order where the claim implicitly requires order,
for example, if the language of a claimed step refers to the
completed results of the prior step. E-Pass Techs., Inc. v.
3Com Corp., 473 F.3d 1213, 1222 (Fed. Cir. 2007). We
hold that the oxidation step in claims 22 and 33 refers to
the product of the previous step, and, therefore, at least
some action resulting in oxidation must be applied to the
product of the disruption step in claim 22, and the product
of the extraction step in claim 33.
12 KANEKA CORPORATION v. XIAMEN KINGDOMWAY
We disagree that the claimed order excludes passive
oxidation during other process steps. See, e.g., ’340 Pa-
tent col. 16 ll. 16–34 (discussing passive oxidation). The
claims’ preamble term “comprises” indicates that addi-
tional oxidation steps or results are not excluded. See,
e.g., Boehringer Ingelheim Vetmedica, Inc. v. Schering-
Plough Corp., 320 F.3d 1339, 1350 (Fed. Cir. 2003).
Requiring active oxidation during the oxidation step
preserves the claimed order, but does not exclude passive
oxidation during other steps.
We also disagree with the district court’s conclusion
and Defendants’ arguments on appeal suggesting that the
claimed order requires that each step occur independently
or separately. In claim 22, some action resulting in
oxidization must be applied to the product of the disrup-
tion step. See ’340 Patent col. 25 ll. 32–54 (“disrupt-
ing . . . to obtain reduced coenzyme Q10; and oxidizing
thus-obtained reduced coenzyme Q10 to oxidized coenzyme
Q10 . . . .”) (emphasis added). This does not necessarily
mean that the disruption step has to be complete before
the oxidation step begins. The claims do not exclude a
continuous process, in which later steps are initiated as
soon as at least some product from the previous step
forms, while previous steps are still ongoing. The written
description contemplates continuous process steps. See,
e.g., ’340 Patent col. 8 l. 50 (continuous nutrient feed); col.
16 ll. 7–8 (continuous extraction). 1 The claims do not
1 Kaneka admitted at oral argument that the ex-
traction step recited in claim 22 occurs after the disrupt-
ing and oxidation steps. Oral argument at 11:55–12:07
(available at http://www.cafc.uscourts.gov/oral-argument-
recordings/all/kaneka.html) (“I think it’s pretty clear that
when you use the term ‘and then’ the patent holder was
saying that extraction here in claim 22 is coming after
disruption and oxidizing.”). Kaneka’s admission implies
KANEKA CORPORATION v. XIAMEN KINGDOMWAY 13
exclude a process in which every claim step is occurring
simultaneously. By the same logic, the extraction step
recited in claim 33 does not have to be complete before the
oxidation step begins as long as the oxidation step is
applied to at least some extracted product. In other
words, the claims require order but do not require discrete
steps.
The district court concluded that “all or substantially
all” of the reduced coenzyme Q10 must be oxidized during
the oxidation step. We disagree. There is no mention in
the specification of a yield requirement. Nor is yield
relevant to the order of the claimed steps.
To summarize, the oxidation step requires some ac-
tion that results in oxidation but does not require oxida-
tion of “all or substantially all” of the coenzyme Q10.
Because the oxidation step indicates that oxidation is
carried out on the product from the previous disruption
step in claim 22, some action resulting in oxidation must
occur after some product from the disruption step forms
and before the extraction step in claim 22 begins. Simi-
larly, some action resulting in oxidation must occur after
at least some reduced coenzyme Q10 has been extracted in
claim 33. Because the claims read on a continuous pro-
cess, a process step does not need to be complete before
another step begins. Thus, it is not required that any one
step be carried out separately or independently of any
other step.
CONCLUSION
We affirm the district court’s grant of summary judg-
ment of noninfringement of independent claims 1 and 11
and dependent claims 8-9 and 19-20. We vacate summary
that some extraction must occur after some disruption
and oxidation, but not necessarily that disruption and
oxidation must be complete before extraction begins.
14 KANEKA CORPORATION v. XIAMEN KINGDOMWAY
judgment of noninfringement of independent claims 22
and 33 and associated dependent claims, and remand to
the district court for proceedings consistent with this
opinion.
AFFIRMED IN PART, VACATED IN PART, and
REMANDED
COSTS
No costs.