MAGĒMĀ TECHNOLOGY LLC v. PHILLIPS 66
Before Moore, Stoll, and Bumb. Appeal from the District Court for the Southern District of Texas.
Summary: A district court abused its discretion by permitting a defendant to argue to a jury that actual testing was required to show infringement, after the same party successfully opposed a motion to compel by representing such testing was not necessary.
Magēmā sued Phillips for infringement of its patent directed to a low-sulfur heavy marine fuel oil (“HMFO”)—a fuel used in large, ocean-going cargo ships. The asserted claims required that, before a process called hydroprocessing, the HMFO must have a flashpoint of at least 140°F. During discovery, Magēmā moved to compel Phillips to produce actual flashpoint testing data. However, Phillips successfully opposed the motion to compel, arguing that actual testing would be too dangerous and representing that Magēmā could instead rely on a generally accepted formula to estimate the flashpoint temperature. But on the eve of trial, Magēmā learned that Phillips, contrary to its representations, planned to argue that actual testing was required and that formula estimates were insufficient to prove infringement. Magēmā objected to Phillips presenting its actual-testing theory at trial, but the district court overruled the objection. At trial, Phillips repeatedly argued that actual testing was required to demonstrate the flashpoint limitation. The jury returned a noninfringement verdict. Magēmā then moved for a new trial, which the district court denied. Although the district court acknowledged Phillips’ actual-testing argument was “improper and prejudicial,” the district court found it was harmless error because the jury could have found noninfringement based on other claim limitations.
On appeal, Magēmā argued that the district court abused its discretion in denying the motion for new trial. The Federal Circuit agreed that Phillip’s actual-testing argument was both improper and prejudicial, but did not agree that it was harmless error. The Federal Circuit found that Phillips “sandbagged Magēmā right before trial with a bait-and-switch” by reneging on its prior representations that actual testing was not required and that formula estimates were sufficient. Further, the Federal Circuit determined that the error was not harmless because the case was submitted to the jury on a general verdict and the Federal Circuit could not determine whether the jury based its verdict on the improper actual-testing argument or on a different issue. Thus, the Federal Circuit reversed the district court’s denial of the motion for new trial and remanded for a new trial.
Editor: Sean Murray
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