Green Patent Blog®

Galen Suppes is a chemical engineering professor at the University of Missouri and co-founder and Chief Scientific Officer of Renewable Alternatives, LLC (Renewable Alternatives). 

Suppes and former Mizzou grad student and post doc William Sutterlin founded Renewable Alternatives in 2003 to develop inventions relating to fuel cell technology, eco-friendly antifreeze and non-toxic diesel fuel additives.  According to Suppes, the university failed to recognize and pursue commercial prospoects for his research.

In January, the university sued Suppes, Sutterlin, Renewable Alternatives and another company called Homeland Technologies, LLC (alleged to be solely owned by Suppes) in federal court in Jefferson City, Missouri over ownership of certain technology developed by the defendants. 

The complaint (missouri_complaint.pdf) sought a declaratory judgment that the University of Missouri is the legal owner of inventions, patents and patent applications conceived and reduced to practice by Suppes and Sutterlin while they were employed by the university.  The complaint also alleged that Suppes and Sutterlin breached their employment agreements and asked the court to automatically assign the invention rights to the university.

The complaint listed U.S. Patent No. 6,574,971 (’971 patent) and requested that the court require the defendants to provide a listing of all other inventions, patents and applications they worked on during their employment with the university.

The ‘971 patent is entitled “Fatty-acid thermal storage devices, cycle and chemicals” and relates to methods for producing fatty acid derivatives for use as phase change materials (PCM).  According to the ‘971 patent, the simple process disclosed provides high conversions of feedstocks to useful PCM chemicals, which can be used to eliminate the need for air conditioning and shift load to non-peak demand times.

Last month, Judge Scott O. Wright granted Suppes’ and Homeland Technologies’ motion to dismiss the suit for lack of subject matter jurisdiction because the complaint failed to allege any violations of the federal Patent Act (missouri_order.pdf). 

Federal courts have jurisdiction over patent disputes only to the extent that federal patent law creates the cause of action or the requested relief necessarily depends on resolution of a “substantial question” of federal patent law.  Suppes had argued that neither applied here because the case was simply a contract dispute. 

The court agreed:

None of the relief sought by plaintiff is relief provided by the Patent Act.  The relief sought by plaintiff is based upon alleged violations of the plaintiff University’s rights under the University’s Collected Rules and plaintiff’s employment agreement with defendant Suppes.

Accordingly, the case was dismissed due to lack of subject matter jurisdiction, and the university will have to re-file in state court if it wants its claims adjudicated.

In a previous post, I wrote about Toyota’s infringing hybrid drive train and the Federal Circuit’s order for the district court to reassess its ongoing royalty rate of $25 per infringing vehicle.

That decision affirmed a $4.3 million jury verdict that Toyota’s hybrid drive trains infringed U.S. Patent No. 5,343,970, owned by hybrid technology company Paice LLC (Paice), as an equivalent system but vacated the district court award of a $25 per vehicle ongoing royalty.

Last month, after considering new evidence on damages, Judge David Folsom of the U.S. District Court in Marshall, Texas ordered the rate increased to about $98 per infringing vehicle, or 0.48% on each Prius, 0.32% on each Toyota Highlander and 0.26% on each Lexus RX400h.

Before stepping in to reset the ongoing royalty rate, the court allowed the parties to go through mediation and exhaust their efforts to set a rate themselves.

According to the court order (paice_royalty_order.pdf), when an injunction is not proper, the question that should guide a court’s determination is ”what amount of money would reasonably compensate a patentee for giving up his right to exclude yet allow an ongoing willful infringer to make a reasonable profit?”

Judge Folsom decided to raise the rate for several reasons:  Toyota is now an adjudged infringer; higher oil and gas prices have made Paice’s hybrid technology more valuable and increased Toyota’s hybrid sales; Toyota’s hybrid vehicles help it meet the increased U.S. fuel efficiency standards; and the popularity of the infringing vehicles has enhanced Toyota’s reputation as a green company.

The court’s final calculation was based on application of a 25% “rule of thumb” to Toyota’s profit margin of 9%, which yields an initial figure of 2.25%.  The court then reduced that figure by one-third to 1.5% in view of the jury’s award for past damages and because Toyota makes less profit on its hybrid vehicles than its non-hybrids. 

Finally, the court excluded the value of the internal combustion engine (ICE) from the royalty base because it is not a core component of Paice’s invention.  Taking 1.5% of $6,500 (the value of the hybrid drive train less the ICE as determined by one of the economics experts in the case), the court arrived at a per-vehicle ongoing royalty of $98.

In a previous post, I wrote about the U.S. International Trade Commission’s (ITC) investigation of a host of major electronics companies accused of infringing a seminal LED patent owned by Gertrude Neumark Rothschild.

The ITC recently began investigating six more companies, based in China and Taiwan, in response to another complaint by the retired Columbia University Professor.  The Notice of Investigation names Chi Mei Lighting Technology Corp., Tekcore Co. Ltd., Toyolite Technologies Corp., Tyntek Corp., Visual Photonics Epitaxy Co. and Xiamen Sanan Optoelectronics Technology.

The ITC is a federal agency that investigates trade and importation issues, including conducting quasi-judicial proceedings involving alleged infringement of intellectual property rights by importation of accused products pursuant to 19 U.S.C. § 1337.  It is a popular forum for patentees (though only injunctive relief is available, not monetary damages) because the proceedings progress much faster than those in the federal courts.

According to the Notice, the ITC will determine whether Section 1337 is violated by:

the importation into the United States, the sale for importation, or the sale within the United States after importation of certain light emitting diode chips, laser diode chips or products containing same that infringe one or more of claims 10, 12, 3, and 16 of U.S. Patent No. 5,252,499…

The asserted patent is directed to methods of making LEDs capable of emitting short wavelength (green or blue) light.  The patent addresses the problem of “doping” wide band gap semiconductor materials, an essential step in creating adequate conductance for the materials to function as LEDs.  Doping means adding impurities to a semiconductor to increase the number of free charge carriers.

Undoubtedly, Rothschild hopes to continue her recent success enforcing her LED patents.  She has been aggressively litigating her patents and several companies have taken licenses, including Philips Lumileds, Epistar, Sony, Sanyo and others.