A Litigation Success Story: The AK Steel v. Sollac CaseMarch 2005 – The Lawyers, Vol. 1, No. 3
(To view the Japanese translation, please select the PDF file above) (Related article: Moot Court Room Featured on Magazine Cover.)
In U.S. patent litigation, the judge and jury are virtually always unfamiliar with the technology, which is often extremely complex. The judge, though well versed in general law, often has little experience with the intricacies of patent law. The complexities of the technology and law and the lack of expertise of the decision-maker lead many to believe the result will be random. This notion is only true if the case is litigated as a web of complex theories. To litigate successfully, your case must rise above the legal and technical intricacies. Your case must be portrayed to appeal to the sense of fair play of the judge or jury, to harness this strength of the U.S. system and avoid falling into the legal and technical abyss.
The cornerstone of a successful patent litigation strategy is a persuasive story that appeals to anyone’s sense of fairness. Attorneys often refer to the “theory” of their case, referring to the legal and factual analysis supporting their position. The better approach is to consider the “story” of your case. More plainly, “why should you win?” You must be able to concisely summarize your story in a way that is persuasive independent of the legal and technical complexities. This story must be told at the outset so that the judge or jury immediately understands why you should prevail.
In presenting your case, the evidence must be carefully selected to portray real people and real events demonstrating your story is true and why you should win. Your case is not a mountain of engineering documents and legal authority, although its “story” can only arise out of a thorough analysis and understanding of the underlying technical facts. (Otherwise, its credibility may be undermined by your opponent showing that it is based on a one-sided or incomplete consideration of the facts.) Your case is a recreation of real life events that demonstrate why you should prevail. By presenting a clear and unassailable story that appeals to the court’s sense of fairness, your case rises above the complexities of the law and technology.
The recent victory for Sollac and Ugine (“Sollac”) in the AK Steel v. Sollac litigation demonstrates the power of this approach. The Oblon, Spivak firm represented French steelmakers Sollac and Ugine (then subsidiaries of Usinor, now Arcelor). AK Steel accused Sollac of infringing six patents. After the district court and appellate court proceedings, Sollac defeated AK on all six patents. Due to the strength of this victory, the accused infringer Sollac then received a monetary settlement from patentee AK to resolve a related antitrust countersuit.
AK brought suit in the Southern District of Ohio alleging Sollac infringed AK’s patents relating to aluminum coated stainless steel. Aluminum coated stainless is highly desirable and profitable for automotive applications due to its appearance and corrosion resistance. Sollac faced the daunting task of defending against this six patent attack in Ohio, AK’s home turf and the heart of America’s steel industry.
Adding to the burden, a central issue of the case was whether the patents satisfied the legal requirement that a patent must be “enabling,” and the related technical issues concerning the phenomena by which coatings adhere to stainless steel. The patents described the invention as applicable to Type 2 aluminum coatings (pure aluminum having no silicon), but many of the patent claims were generic to any type of aluminum coating. Sollac manufactures a Type 1aluminum coating (8-10% silicon), because the silicon allows the product to be more easily bent and shaped to form automotive parts.
As the litigation proceeded, the deposition testimony of AK’s inventor and AK’s product development documentation demonstrated that, when AK filed for their patents, AK could not coat stainless with the more desirable Type 1 coating - - it would not stick.
The Theory versus The Story
A comparison of the legal/technical theories with the story line approach illustrates the power of the latter.
The Legal/Technical Theory: The legal and technical theories of the case were complex. A central legal issue was whether the patents are “enabling” for claims generic to any type of aluminum coating. Courts have described the enablement requirement as follows:
The enablement requirement is satisfied only if one skilled in the art, after reading [the patent] disclosures, could practice the invention claimed without undue experimentation. But the question of undue experimentation is a matter of degree. The fact that some experimentation is necessary does not preclude enablement; what is required is that the amount of experimentation must not be unduly extensive.
While the above general statement gives one some idea of the concept, it does little to tell one how to decide a given case. Moreover, there are numerous court decisions on the subject, some finding the patents enabling and others finding the patents invalid for lack of enablement. Complete mastery of the subject imposes a heavy burden on the judge or jury.
An array of technical issues also had the potential to muddy the waters. To successfully coat stainless with aluminum, a proper interalloy layer must be formed between the two, involving a complex study of the interaction of the materials. The temperature, composition and humidity of the atmosphere in which the stainless steel is processed before coating will also affect the surface characteristics and coatability of the stainless. In addition, the temperature of the coating bath and the composition of the coating bath will also affect coatability.
The Story: Sollac’s basic story did not require mastery of the legal concept of enablement or the technical theories of coating metallurgy. Sollac’s case was based upon a basic story which is persuasive independent of the trappings of the enablement law and metal coating technology. The basic story was: Patents are granted for technical contributions. Because AK could not coat stainless steel with Type 1 aluminum, AK’s patents cannot cover Type 1 - - it is beyond AK’s technical contribution. Therefore, AK’s patents cannot cover Sollac’s Type 1 products.
This simple, basic story line does not require a complete understanding of the law of enablement or a complete understanding of the technology. The story line only requires acceptance of the notion that, where the patentee couldn’t make it, their patents can’t cover it.
The reduction of your case to a very basic story or theme does not mean that the law and technology can be ignored. The story must be consistent with and supported by the legal and technical aspects of the case. The attorneys must master the law and the technology, but the decisionmaker should not have to. A persuasive, simple story provides the judge or jury with a compass to navigate through the legal and technical intricacies without having to completely master them.
Presenting the Case – Editing and More Editing
Sollac filed motions for summary judgment. In essence, the motions argued that AK’s case had such little merit that it should not be presented to a jury - - the judge should decide the case without a trial. The motions were briefed and then argued at two hearings, one before a court appointed Special Master, and another to the District Court Judge. The Special Master and the District Court Judge both ruled in Sollac’s favor on all six patents.
As with many patent cases, the discovery process resulted in hundreds of hours of deposition testimony and tens of thousands of pages of documents. The key to successfully telling the story was in the careful selection of the most compelling evidence, and not presenting evidence that could be considered ambiguous or tangential. This editing process is critical, but often not practiced. Attorneys are often anxious to submit as much evidence as possible. However, weak or ambiguous evidence can dilute the more clear and stronger evidence, making the overall case less persuasive.
Of the voluminous evidence obtained during discovery, only a small handful of quotes from deposition testimony and some ten documents were central to portraying the easily understandable story. The inventor testified that AK was unable to coat stainless with Type 1 aluminum when the patent applications were filed. The AK development documents chronicled the story of AK’s failed attempts to coat stainless with Type 1. Thus, the basic story was told. Sollac’s product is a Type 1 product. AK couldn’t make Type 1. Therefore, AK’s patents cannot cover Sollac’s Type 1 product. Once this story was clear, it was also clear that Sollac should prevail.
The Final Victory
After Sollac prevailed at the District Court, AK appealed to the Court of Appeals for the Federal Circuit. The Federal Circuit affirmed the District Court, citing the deposition testimony and documentation reflecting AK’s inability to make a Type 1 product. Sollac’s victory over AK’s patent suit was then complete. In the wake of this victory, AK paid a monetary settlement to Sollac to resolve a related antitrust countersuit in which Sollac alleged AK’s patent litigation was improper.
By presenting a powerful, easily understandable story, Sollac rose above the legal and technical trappings, defeated AK’s six patents, and in the end, patentee AK paid accused infringer Sollac.
The AK Steel v. Sollac case was argued before the Ohio District Court and the Court of Appeals for the Federal Circuit by Oblon, Spivak, McClelland, Maier & Neustadt. The appellate decision is reported at 344 F.3d 1234, 68 USPQ2d 1280 (Fed. Cir. 2003). The District Court decision is reported at 65 USPQ2d 1332 (S.D. Ohio 2002).