Dow Chemical Co. has won an appeals court ruling upholding a 2010 verdict totaling $76 million against Nova Chemicals Corp. in a patent conflict over enhanced polyethylene resins.
A three-judge panel in the U.S. Court of Appeals in Washington on Jan. 24 awarded Dow $61.7 million in damages plus interest for the $76 million total. Dow had argued that Nova's Surpass-brand enhanced PE violated patents for Dow's Elite-brand enhanced PE.
In a prepared statement, officials of Midland, Mich.-based Dow said Jan. 25 that the firm “will now turn its attention to recovering substantial additional damages for Nova's continued infringement in the U.S. after 2009.”
Dow officials added that the firm is “very pleased” with the decision, which “affirms Dow's jury trial win against Nova in every respect.”
Nova spokesman Pace Markowitz said his firm is “disappointed with the outcome of the case.”
“This was a split decision and one of the judges on the panel agreed with our arguments,” he said in a Jan. 25 email. “We are reviewing the decision to determine our next steps.”
The patents involved in the suit describe a new kind of plastic that is stronger than conventional plastics and that allows the use of thinner films made with less plastic for the same purpose. The original judgment against Nova came in July 2010 in U.S. District Court in Wilmington, Del.
The U.S. patents involved in the case expired in October 2011.
Nova argued before the appeals court that its material had different mechanical properties than Dow's. Nova also questioned Dow's suit, claiming Dow had transferred ownership of the patents to its Dow Global Technologies Inc. unit.
In a Jan. 27 email, Dow spokesman Bob Plishka said the firm anticipates additional damages will be in the tens of millions of dollars.
“Dow will also pursue a claim of willful infringement against Nova and seek treble damages and reimbursement of attorneys' fees and other costs incurred by Dow in this litigation,” he said.
Dow also will seek damages and injunctive relief against Calgary, Alberta-based Nova for its manufacture of infringing product in Canada. Plishka added that Dow isn't seeking any form of settlement with Nova that would avoid further litigation.
Industry sources said more than half of the output of an 850 million-pound-capacity PE line operated by Nova in Joffre, Alberta, is dedicated to Surpass production. Depending on product mix, Dow can have as much as 1.5 billion pounds annually dedicated to Elite and similar products made with the firm's Insite-brand single-site catalyst technology, they said.
Plishka declined to provide specific production numbers for Dow Elite, but he said the product line “comprises a substantial portion of our portfolio of highest-performing resins.”
Nova's Markowitz confirmed Jan. 26 that his firm has continued to produce Surpass in Joffre. “The asserted patent expired on Oct. 14, 2011, and Nova Chemicals has no restrictions on selling any grades of Surpass in the United States,” Markowitz said in an email.
Nova first commercialized Surpass in 2003. It's made via Nova's Advanced Sclairtech technology and has been used in film, rotational molding and thin-wall injection molding applications.
A PE market veteran said he believes part of the problem in the case is that Nova hired several researchers who previously had worked at Dow. Once there, they created specialty PE materials that were too close to their previous designs.
“There was some mix-up in their thinking pattern,” he said of researchers who moved from Dow to Nova. “They intended to do something new and do original research, but when you build a car at one place and then go build a car at another place, it still looks like a car.”