PPG Industries Inc v. Valspar Corp

I. Executive Summary and Procedural Information

• Parties & Counsel:
  • Plaintiff: PPG Industries, Inc. (Pennsylvania)
  • Defendant: The Valspar Corporation (Delaware) and Valspar Sourcing, Inc. (Minnesota)
  • Plaintiff’s Counsel: Hogan Lovells US LLP
• Case Identification: 2:17-cv-00760, W.D. Pa., 06/09/2017
• Venue Allegations: Plaintiff alleges venue is proper in the Western District of Pennsylvania because Defendants conduct substantial business in the district, including research, manufacturing, and sales of the relevant coating products, and because the inventors were employed and conducted their research in the district.
• Core Dispute: Plaintiff seeks a declaratory judgment that its INNOVEL® internal spray coatings for beverage cans are licensed to practice Defendants' patents and/or that those patents are invalid.
• Technical Context: The technology concerns chemical compositions for internal protective coatings on food and beverage cans, specifically formulations intended to be free of Bisphenol A (BPA).
• Key Procedural History: This action is procedurally complex, arising from prior disputes. Defendants previously sued Plaintiff in the District of Minnesota, alleging infringement of the patents-in-suit. Separately, Plaintiff challenged the validity of two parent patents in inter partes reexamination proceedings, which led to an appeal at the U.S. Court of Appeals for the Federal Circuit (CAFC). During that appeal, Defendants granted Plaintiff a license to the "subject matter" of the parent patents, leading the CAFC to dismiss the appeal as moot. Plaintiff now contends that this license also covers the patents-in-suit, estopping Defendants' infringement claims.

Case Timeline

Date	Event
2004-10-20	Priority Date for all Patents-in-Suit (Provisional Application filing)
2012-03-29	Plaintiff requests inter partes reexaminations of parent patents
2013-12-31	U.S. Patent No. 8,617,663 Issues
2014-09-16	U.S. Patent No. 8,835,012 Issues
2015-09-28	PTAB reverses Examiner's rejections in reexaminations
2016-01-26	U.S. Patent No. 9,242,763 Issues
2016-05-23	Defendants file infringement suit against Plaintiff in D. Minn.
2016-08-16	U.S. Patent No. 9,415,900 Issues
2016-11-01	CAFC hears oral arguments on reexamination appeal
2016-11-15	Defendants grant Plaintiff a license covering parent patents
2017-02-09	CAFC holds reexamination appeal moot based on license
2017-05-22	U.S. Supreme Court issues TC Heartland venue decision
2017-06-09	Complaint for Declaratory Judgment Filed

II. Technology and Patent(s)-in-Suit Analysis

U.S. Patent No. 8,617,663 - “Coating Compositions for Cans and Methods of Coating”

• Issued: December 31, 2013

The Invention Explained

• Problem Addressed: The patent’s background section describes that many conventional coatings for food and beverage packaging contain Bisphenol A (BPA) or related compounds, which are "perceived by some people as being potentially harmful to human health" (’663 Patent, col. 1:35-41). This creates a need for packaging coatings that do not contain such compounds while still meeting rigorous performance standards (Compl. ¶23).
• The Patented Solution: The invention is a coating composition that includes an "emulsion polymerized latex polymer" ('663 Patent, Abstract). This polymer is created by polymerizing an "ethylenically unsaturated monomer component" in an aqueous dispersion of a separate, water-dispersible polymer salt, thereby creating a latex polymer system suitable for coating cans without using BPA-based epoxy resins ('663 Patent, col. 1:49-56).
• Technical Importance: This technology offers a potential alternative to the prevalent epoxy-based can liners, aiming to address market and regulatory demand for BPA-free packaging solutions.

Key Claims at a Glance

• The complaint seeks a declaration of license and/or invalidity for the patent’s claims generally, specifically referencing Claim 28 in an exemplary invalidity chart mentioned but not attached in the complaint (Compl. ¶¶56, 83). The analysis below focuses on independent method claim 16 as representative of the core inventive method.
• Independent Claim 16:
  • Providing an aqueous coating composition including a latex polymer that is substantially free of bound BPA and aromatic glycidyl ether compounds.
  • The latex polymer is formed by emulsion polymerizing a mixture of monomers.
  • The monomer mixture comprises 0.1 to 30 weight percent of an oxirane functional group-containing monomer.
  • The polymerization occurs in the presence of an acid- or anhydride-functional polymer.
  • Spray applying the coating composition to an interior surface of a food or beverage can.

U.S. Patent No. 8,835,012 - “Coating Compositions for Aluminum Beverage Cans and Methods of Coating Same”

• Issued: September 16, 2014

The Invention Explained

• Problem Addressed: The ’012 Patent, a continuation of the same patent family, addresses the identical technical problem of replacing BPA-containing can coatings with a suitable alternative ('012 Patent, col. 1:29-41).
• The Patented Solution: The patent describes a functionally identical solution based on an emulsion polymerized latex polymer created from specific monomer components in the presence of a water-dispersible polymer salt ('012 Patent, Abstract; col. 2:11-24).
• Technical Importance: This patent extends the patent protection around the core BPA-free coating technology to cover additional embodiments and claim scopes.

Key Claims at a Glance

• The complaint asserts that claims including 7, 21, 24, 25, 26, 29, 42, and 80 are invalid (Compl. ¶90). The analysis below focuses on independent method claim 1 as a representative asserted claim.
• Independent Claim 1:
  • Receiving a coating composition that includes an emulsion polymerized latex polymer.
  • The polymer is a reaction product of an ethylenically unsaturated monomer component polymerized in the presence of an aqueous dispersion of a salt of an acid- or anhydride-functional polymer.
  • The monomer component includes an oxirane group-containing monomer.
  • The monomer component includes at least 40 wt-% of one or more monomer types selected from alkyl acrylates and methacrylates.
  • The coating composition is made without using PVC compounds, BPA, or aromatic glycidyl ether compounds.
  • Spray applying the coating composition onto an interior surface of an aluminum beverage can.

U.S. Patent No. 9,242,763 - “Coating Compositions for Aluminum Beverage Cans and Methods of Coating Same”

• Issued: January 26, 2016

Technology Synopsis

This continuation patent further refines the claims around the core BPA-free coating technology, which is based on an emulsion polymerized latex polymer formed from specific monomers in the presence of a water-dispersible polymer salt (’763 Patent, Abstract). The invention aims to provide a viable alternative to traditional epoxy-based can liners (Compl. ¶23).

Asserted Claims

Independent method claim 1 is representative of the asserted claims (Compl. ¶97).

Accused Features

Plaintiff seeks a declaration that its INNOVEL® coating product is licensed to practice the patent’s claims (Compl. ¶68).

U.S. Patent No. 9,415,900 - “Coating Compositions for Aluminum Beverage Cans and Methods of Coating Same”

• Issued: August 16, 2016

Technology Synopsis

As the most recent continuation in the family, this patent provides further protection for the BPA-free can coating technology utilizing an emulsion polymerized latex polymer (’900 Patent, Abstract). The technical problem and solution are consistent with the other patents-in-suit (Compl. ¶23).

Asserted Claims

Independent method claim 1 is representative of the numerous asserted claims (Compl. ¶104).

Accused Features

Plaintiff seeks a declaration that its INNOVEL® coating product is licensed to practice the patent’s claims (Compl. ¶74).

III. The Accused Instrumentality

Product Identification

Plaintiff’s INNOVEL® HPS™ ("INNOVEL") product (Compl. ¶34).

Functionality and Market Context

The complaint identifies INNOVEL® as an "inside spray coating for beverage cans" (Compl. ¶34). The filing is a declaratory judgment action by the producer of INNOVEL®, so the complaint does not detail the product's specific chemical composition. Instead, it frames the product as the subject of an infringement dispute initiated by Defendants in a separate litigation, where Defendants allege that the commercialization of INNOVEL® infringes the patents-in-suit (Compl. ¶¶34, 52). The central issue presented in the complaint is not the technical operation of INNOVEL®, but whether it is covered by a license or whether the patents asserted against it are invalid (Compl. ¶53). No probative visual evidence provided in complaint.

IV. Analysis of Infringement Allegations

The complaint is for declaratory judgment and does not contain infringement allegations or an associated claim chart. The core of the complaint is a legal dispute over the scope of a license agreement, rather than a technical dispute over infringement.

Plaintiff alleges that Defendants granted it a license covering the "subject matter" of U.S. Patent Nos. 7,592,047 and 8,092,876, which are parents to the patents-in-suit (Compl. ¶¶48, 58). Plaintiff asserts that because the patents-in-suit claim the "exact same subject matter" and have "virtually identical" written descriptions, the license estops Defendants from pursuing infringement claims related to the INNOVEL® product under the patents-in-suit (Compl. ¶¶51, 52, 58). Defendants, by continuing to prosecute a separate infringement action, implicitly dispute this interpretation of the license's scope (Compl. ¶52).

• Identified Points of Contention:
  • Scope Questions: The primary question for the court appears to be one of contract interpretation and estoppel: does the license grant for the "subject matter" of the parent patents extend to preclude infringement suits on the subsequently issued continuation patents-in-suit?
  • Technical Questions: While the underlying dispute involves infringement, this complaint does not provide the technical basis for Defendants' infringement allegations from the parallel Minnesota case. The central technical question that would arise in that litigation, however, is whether the chemical composition of the INNOVEL® product and its method of application meet the limitations of the asserted claims.

V. Key Claim Terms for Construction

• The Term: "substantially free of bound BPA and aromatic glycidyl ether compounds" ('663 Patent, Claim 16).
• Context and Importance: This term is foundational to the patent's purpose, which is to provide a BPA-free coating alternative. The construction of "substantially free" will define the boundary between compositions that fall within the scope of the claims and those that do not. Practitioners may focus on this term because it quantifies the threshold for being considered "BPA-free" under the patent.
• Intrinsic Evidence for Interpretation:
  • Evidence for a Broader Interpretation: The specification provides explicit quantitative definitions, stating that "substantially free" means the compositions "contain less than 1000 parts per million (ppm) of the recited mobile compound" ('663 Patent, col. 3:25-28). A party could argue this provides a clear, high ceiling for the term.
  • Evidence for a Narrower Interpretation: The specification also provides stricter definitions for "essentially free" (<100 ppm) and "completely free" (<20 ppb) ('663 Patent, col. 3:28-35). A party might argue that, given the stated purpose of avoiding perceived health risks from BPA, a person of ordinary skill in the art would understand "substantially free" in the context of the claims to require a level closer to "essentially free," particularly for bound BPA.

VI. Other Allegations

• Indirect Infringement: The complaint does not provide sufficient detail for analysis of indirect infringement allegations.
• Willful Infringement: The complaint does not provide sufficient detail for analysis of willful infringement allegations.

VII. Analyst’s Conclusion: Key Questions for the Case

This declaratory judgment action appears to center on two pivotal questions for the court:

• A primary issue will be one of legal scope and estoppel: does the license granted by Defendants covering the "subject matter" of two parent patents legally preclude them from asserting the continuation patents-in-suit, which Plaintiff alleges share a virtually identical specification and claim the same core invention?
• A secondary, but fundamental, issue will be one of patentability: did the application of a previously known chemical composition to the inside of a can—a fact Plaintiff alleges Defendants conceded during prior proceedings—constitute a non-obvious and patentable invention, or are the patents-in-suit invalid as anticipated or obvious in view of the prior art?