Valence Technology, Inc. v. Phostech Lithium Inc.

Valence Technology, Inc. v. Phostech Lithium Inc.
Court (s) Database
Federal Court Decisions
Date
2011-02-17
Neutral citation
2011 FC 174
File numbers
T-219-07
Decision Content
Federal Court
Cour fédérale
Date: 20110217
Docket: T-219-07
Citation: 2011 FC 174
Toronto, Ontario, February 17, 2011
PRESENT: The Honourable Justice Johanne Gauthier
BETWEEN:
VALENCE TECHNOLOGY, INC.
Plaintiff
Defendant by Counterclaim
and
PHOSTECH LITHIUM INC.
Defendant
Plaintiff by Counterclaim
PUBLIC REASONS FOR JUDGMENT AND JUDGMENT
(Confidential Reasons for Judgment issued on February 11, 2011)
[1] The Plaintiff in this action, Valence Technology, Inc. (Valence), claims its rights under Canadian Patent Nos. 2,395,115 (the ‘115 Patent), 2,483,918 (the ‘918 Patent) and 2,466,366 (the ‘366 Patent) have been infringed by the Defendant (Plaintiff by Counterclaim) Phostech Lithium, Inc. (Phostech) by the manufacture, distribution, offering for sale, sale and use in Canada of lithiated iron phosphate (LiFePO4) cathode materials.
[2] The Plaintiff, Valence, is an American company, its head office is in Austin, Texas and it is the owner of the ‘115 Patent, ‘918 Patent and ‘366 Patent (the Valence Patents).
[3] The Defendant, Phostech, is a Canadian company which produces its product, carbon-coated lithium iron phosphate (C-LiFePO4), at its facility in Saint-Bruno-de-Montarville, Quebec, using the “P1 Process”. Phostech was originally a spin off from Hydro-Quebec with funding from the University of Montréal. By 2008, Süd-Chemie, a German company, was the sole shareholder in Phostech.[1] Süd-Chemie is currently building another plant in Quebec to produce C-LiFePO4 using a different technique (P2 Process), which will be ready in 2012.[2]
[4] The Valence Patents all relate to processes for the synthesis of lithium mixed metal cathode materials for use in lithium ion batteries, although the ‘918 is wider. The ‘366 is a divisional patent of the ‘115. These patents have a priority date of January 18, 2000 (based on US 09/484,919), a filing date of December 22, 2000 and a publication date of July 26, 2001. The ‘115 was issued on July 20, 2004, while the ‘366 was issued on March 27, 2007 after a voluntary amendment of its claims filed on August 23, 2005. The ‘918 Patent has a priority date of May 17, 2002 (based on US 10/150,343 and 10/150,353), filing date of May 6, 2003 and publication date of December 4, 2003. The ‘918 Patent was issued on January 9, 2007.
[5] In its Amended Statement of Claim,[3] Valence alleges 114 claims from the ‘115, ‘918 and ‘366 Patents have been infringed by the Defendant. In its latest Statement of Defence, Phostech alleges that it is not infringing the Valence Patents as its product (C-LiFePO4) is manufactured pursuant to Canadian Patent No. 2,307,119 (‘119 Patent) and Canadian Patent Application No. 2,423,129 (‘129 Application) for which it holds licences. Phostech also challenges the validity of the Valence Patents and claims that the ‘918 and ‘366 Patents misappropriate the ‘129 Application.
[6] At the pre-trial conference, Phostech confirmed that even if Valence were to reduce the claims on which it was relying, given that the infringement of one claim is sufficient, it still insisted that the Court deal with all 234 claims in the three patents in respect of its counterclaim. At the beginning of trial, Valence reduced its allegations to 39 claims and then on the final day of argument, Valence conceded that if the independent claims of the patents (claim 3 of the ‘115; claim 26 of the ‘366 and claim 1 of the ‘918) are found to be invalid, so too are the dependent claims.[4] Phostech agreed that for its counterclaim the Court could limit its analysis to only these three claims.[5] Also, Phostech abandoned its challenge to the validity of the ‘115 Patent altogether when it became clear that the major piece of prior art relied upon by its expert was not citable prior art.[6]
[7] Pursuant to a Bifurcation Order of Prothonotary Tabib dated June 20, 2007, questions about the extent of infringement, the quantum of damages, accounting of profits or reasonable compensation, if any, are to be determined after trial.
INDEX
Paragraph
General Background 8
Reduction and Oxidation Reactions 8
Battery Science and Composition 13
Development of cathode materials for lithium ion batteries 20
The Evidence 26
1. Claims Construction 62
i. The Principles 62
ii. Posita 66
iii. Common general knowledge 70
iv. The ‘115 Patent 78
v. The ‘366 Patent 129
vi. The ‘918 Patent 147
a. Common General Knowledge for the ‘918 Patent 147
b. The patent 150
2. Infringement 153
3. Validity 179
a. The ‘366 Patent – Insufficiency 182
b. The ‘366 Patent – Misappropriation and ss. 53(1) 195 c. The ‘818 Patent – anticipation 222
4. Remedies and costs 232
General Background
Reduction and Oxidation Reactions
[8] One scientific principle that is critical to this case is the ability of atomic elements (on the periodic table) to exist in different oxidation states and the chemical reactions called reduction or oxidation reactions that change this oxidation state.
[9] The net charge on an atom is referred to as its oxidation state or valence state. Pure elements have an oxidation state of zero (e.g. metallic iron can be depicted as Fe0). Certain atoms can exist in more than one oxidation state (e.g. iron can exist in a 2+ or 3+ oxidation state depicted as Fe2+ or Fe3+ respectively). Typically, the transition metals of the periodic table (which include iron) are able to support multiple valence states.
[10] The oxidation state of an atom can change upon reaction with another atom via an oxidation or reduction reaction. In a reduction reaction, the atom gains an electron (or multiple electrons) during its reaction with another atom and its oxidation state is reduced. For example, Fe3+ can be reduced to Fe2+ by a gain of one negatively-charged electron. Alternatively, in an oxidation reaction, an atom loses electrons during its reaction with another atom and its oxidation state will increase due to the loss of the electron(s). For example, Fe2+ minus one electron will be oxidized to Fe3+. Typically, when metallic Fe0 reacts with air, it will be oxidized (loss of electrons) to Fe3+.
[11] Certain properties of carbon are commonly agreed to. Carbon (represented by “C” on the periodic table) can exist in a variety of forms, such as amorphous carbon (carbon black), graphite and diamond. Carbon is also “the backbone of all organic compounds”, including organic polymers (“high molecular weight molecule[s] comprised of a series of repeating linked units”).[7]
[12] In carbothermal reduction (CTR), carbon reduces a compound, which involves the production of carbon monoxide (CO) or carbon dioxide (CO2) as an effluent gas. The amount of CO or CO2 that will be produced depends on the temperature of the reaction. In carbon monoxide gas, the carbon atom is in a 2+ oxidation state and has 2 electrons available to donate to neighbouring atoms, whereas in carbon dioxide gas, the carbon atom is in a 4+ oxidation state and has no electrons to donate.[8]
Battery Science and Composition
[13] A lithium-ion battery is composed of one or more electrochemical cells. Each cell is made up of an anode (negative electrode), a cathode (positive electrode), an electrolyte which allows for the transport of charged lithium ions (e.g. Li+) and a current collector.
(Figure from D. Linden and T.B. Reddy, eds., Handbook of Batteries, 3d (New York: McGraw-Hill, 2001) reproduced in Exhibit V-5)
[14] The right side of the above figure shows the anode, which is usually comprised of graphite layers (i.e. carbon) depicted as hexagons. Lithium can be stored in between these graphite layers. The anode is attached to copper foil using a binding material. The centre of the battery is an electrolyte (liquid) containing a dissolved lithium salt. On the left side of the figure is the cathode, in this case, a lithium metal oxide, made up of layers of oxygen with layers of a metal in between. There are spaces in between the layers for lithium to reside. The lithium metal oxide is attached to an aluminum current collector.
[15] The battery operates by the transfer of lithium ions from the graphite (where lithium binds only very weakly to carbon) in the anode to the metal oxide (where lithium is strongly attracted to oxygen) in the cathode. When a wire is attached connecting the negative anode to the positive cathode, the lithium ions move through the electrolyte and electrons move through the wire to the cathode which provides an electrical current that is ultimately used to power a device. Basically, the lithium moves from between the graphite layers to the layers of the lithium metal oxide. To recharge the battery, electrons are forced in the opposite direction and the lithium ions and electrons go back to the anode.
[16] Oxidation and reduction reactions occur during the charge and discharge of a battery when lithium moves from the anode to the cathode and vice versa. For illustration purposes, assume a battery uses lithium iron phosphate for its cathode material. The iron in the LiFePO4 is in the 2+ oxidation state. Iron in ferric phosphate (FePO4) is in the 3+ oxidation state. Thus, on discharge of the battery, lithium is inserted into the FePO4 of the cathode, which reduces FePO4 to LiFePO4. Upon charging the battery, the opposite reaction occurs. Lithium is extracted from the cathode which oxidizes the LiFePO4 to FePO4.
[17] It is important that lithium insertion into the cathode material does not significantly perturb the structure of the cathode. For example, it has been noted that battery cells using LiFePO4 as a cathode material have excellent reversibility on repeated cycling (ability to charge and discharge) because the structures of FePO4 (lithium extracted) and LiFePO4 (lithium inserted) are very similar.[9] Thus, the choice of the cathode material is a critical factor for a battery with a long life cycle.
[18] Among the common choices of cathode materials there are “trade-offs between the relative importance of cost, power, energy and thermal stability”.[10]
[19] Aside from the choice of cathode material, other factors which are important to the manufacture of a battery include cost, the availability of starting materials, environmental impacts and manufacturability.[11]
Development of cathode materials for lithium ion batteries
[20] Lithium ion batteries are used in virtually all portable electronic devices that are rechargeable, including laptop computers, cellular telephones and digital cameras. These batteries are also now used in many battery-powered tools, such as drills or saws and are being used in e-bikes and scooters. Lithium ion battery technology is widely accepted due to “its unique ability to offer a high level of performance in many aspects, including energy density, specific energy, specific power, cycle life, storage life and temperature range, in a safe, low-cost product.”[12]
[21] Although lithium battery research commenced in the late 1960s to early 1970s,[13] significant developments in the field were not made until 1980 when Dr. Goodenough discovered that lithium cobalt oxide (LiCoO2) had favourable properties for use as a cathode material in rechargeable batteries.[14] Sony Corporation built on this discovery and the first commercially successful lithium ion battery was introduced in 1991.[15] When compared to previous rechargeable batteries, the lithium ion battery obtained higher energy and voltage and a significantly longer life cycle.[16]
[22] While LiCoO2 had a long life cycle and excellent capacity, cobalt was not an ideal material because it “is in limited supply in nature, is relatively expensive and is regarded as not being environmentally benign.”[17] Thus, researchers began studying other cathode materials (transition metal oxides) to replace cobalt.[18] Researchers, particularly those in Japan, pursued iron oxides as potential cathode materials with little success.[19]
[23] The use of transition metals posed certain challenges, such as “maintaining the transition metal in the correct oxidation state and in a non-oxidizing atmosphere”.[20] Thus, researchers commonly used materials which contained their transition metal in the desired oxidation state.[21]
[24] In 1997, Dr. Goodenough’s group at the University of Texas reported LiFePO4 as an excellent new candidate for the cathode material.[22] That said, in January 2000, commercialized batteries still used only lithium cobalt oxide, lithium nickel oxide and lithium manganese as a cathode material.[23]
[25] Researchers have since improved the capacity of the lithium iron phosphate battery. A witness for Phostech explained that the lithium iron battery business started in 2001 as a $2 billion business, today is about $8 billion and by 2020 is expected to be roughly a $40 billion business.[24] The lithium iron battery is important as it is, effectively, an alternative to carbon (i.e. fossil fuels) as a way to store energy and is also used for large-scale applications, such as transportation.[25]
The Evidence
[26] The parties submitted a list of admissions,[26] extracts from discovery (Valence: Exhibit V-11 and Phostech: Exhibits P36A to P36F) and an Agreed Chronology of Events (see Annex B).
[27] In respect of infringement, Valence put forth one lay witness, Mr. Randall J. Adleman, and one expert, Dr. Jeffery Dahn. In response to Phostech’s arguments on invalidity, Valence put forth two experts, Dr. Elton Cairns and Dr. Dane Morgan.
[28] Phostech presented three lay witnesses, Mr. Denis Geoffroy, Dr. Nathalie Ravet and Dr. Michel Gauthier, one expert on infringement, Dr. Christopher Bale, and one expert on validity, Dr. Michael Stanley Whittingham.
[29] Mr. Adleman has been the Vice-President of Sales and Marketing at Valence Technology, Inc. since March 2010.
[30] The main purpose of his testimony was to explain Valence’s current business of supplying high performance lithium phosphate energy systems, including lithium phosphate batteries (whose cathode material is manufactured by Valence’s plants in China) and battery management systems to customers worldwide. Valence has divisions in the United States (Austin, TX and Las Vegas, NV) and the United Kingdom.
[31] He also explained that Valence used to manufacture its cathode material using lithium oxides, but due to safety issues (i.e. thermal runaway) and the potential for increased cyclability, the company switched to lithium phosphate materials. Although Valence has been around since 1989, its main focus was on research and development until it commercialized its products around 5 years ago.
[32] Mr. Geoffroy is the Technical Director at Phostech in charge of production, engineering, maintenance and purchase of materials. Although his background is in Chemical engineering (Master’s degree, 1996), when he joined Phostech in 2002, he worked for three years on the development of the business (e.g. sales and location of business partners).
[33] The main purpose of Mr. Geoffroy’s testimony was to confirm the details of Phostech’s P1 Process (given that details of this process are protected by the Confidentiality Order of Prothonotary Tabib,[27] the information relied upon by the Court will be explained in Confidential Annex A). Mr. Geoffroy also produced two samples from the Phostech P1 Process: the mixture of the ferric phosphate and lithium carbonate powders (Exhibit P-3) and the final product C-LiFePO4 (Exhibit
P-4).
[34] Dr. Nathalie Ravet is responsible for quality control at Phostech. She holds a Ph.D. (1994) in Electrochemistry. Although she officially began working for Phostech in 2007, prior to that she was part of Professor Michel Armand’s team at the University of Montreal where she also worked on the electrochemical portion of Phostech’s quality control.
[35] The main focus of Dr. Ravet’s testimony concerned her past research on LiFePO4, her various publications, presentations and posters on the subject and her involvement with Hydro-Quebéc’s ‘119 Patent (Exhibit P-14), ‘129 Application (Exhibit P-18) and Canadian Patent Application No. 2,320,661 (‘661 Application) (Exhibit P-20). These are cited as part of the prior art relied upon by Phostech and are allegedly the basis for the P1 Process.[28]
[36] Dr. Ravet testified that her experience working on the compound LiFePO4 began in 1998. At that time, Dr. Armand and Hydro-Québec had already established a collaboration with Dr. Goodenough’s group at the University of Texas.[29] In 1998, Dr. Armand’s lab was using a single-step synthesis process for LiFePO4 using an iron precursor where iron was in the 2+ oxidation state; they then moved to a two-step synthesis with the intention to optimize each of the steps.[30] Dr. Ravet’s goal was to find a different synthesis mechanism for LiFePO4, other than that proposed by Dr. Goodenough, since the precursor materials in that mechanism (i.e. precursors starting from Fe2+) were very expensive.[31] Because Hydro-Québec was interested in commercializing its own battery, Dr. Ravet’s team was involved in upgrading the LiFePO4 production process.[32]
[37] Dr. Ravet spoke about the very first time she presented her research on LiFePO4, which was in Honolulu, Hawaii, for the 196th Meeting of the Electrochemical Society (October 17 – 22, 1999). Since this was her first time speaking at a conference in English, her second language, she learned her presentation by heart and testified that her transparencies were a true indication of what she said
during the presentation (see her abstract and overhead transparencies (Exhibit P-11)).[33] She was very specific that she did not speak about the synthesis mechanism for LiFePO4 nor of the use of carbon or sugar, rather she focused on the improved electronic conductivity of one of the samples.[34] She noted, however, that after her talk she read articles that referred to her presentation as [translation] “the moment at which it was revealed that she had obtained a carbon deposit coming from the decomposition of an organic material” but she was clear that this is simply not so.[35]
[38] In that respect, Dr. Ravet presented a poster at the 10th International Meeting on Lithium Batteries in Como, Italy (May 28 – June 2, 2000). The poster (since destroyed) contained the words “carbon coating”[36] and during the poster session she answered questions from those interested and may have discussed sugar. In July 2000, she published a short article explaining her results which was accepted January 29, 2001 and published in July 2001 (Exhibit P-15).[37] The article was the first publication where they divulged having realized a carbon deposit using a carbon precursor on LiFePO4 “already synthesized”. [38]
[39] After submission of the Como article in the summer of 2000, Dr. Armand’s lab scaled up its research on a single-step process using a Fe3+ precursor,[39] since there were many problems with
Fe2+ oxidation.[40] At that time, the lab used externally applied gaseous reducing atmospheres
including a CO/CO2 combination, ammonia and hydrogen.[41]
[40] During cross-examination, Dr. Ravet addressed an abstract written by Dr. Zaghib of the Institut de Recherche d’Hydro-Québec, which lists her and Michel Gauthier as co-authors (Exhibit V-14). She admitted that Phostech at the time, between 2006 and 2007, was indicating to the public that it was making LiFePO4 in a process that was reducing Fe3+ to Fe2+ by way of the “carbo-thermal effect”;[42] however, she does not agree with what was written.[43]
[41] Dr. Michel Gauthier was President of Phostech since its creation in 2001 until June 2009. After that time he agreed to continue to represent Phostech for the needs of the litigation.[44]
[42] Dr. Gauthier holds a Ph.D. (1970) in Electrochemistry. He has worked in the field of lithium batteries for 30 to 35 years. During his 27-year employment at the Hydro-Québec Research Centre (HYREC) he introduced and developed the company’s lithium battery technology.[45]
[43] He testified about his involvement and contribution to the various patents licensed to Phostech (‘119 Patent, ‘129 Application and Canadian Patent Application No. 2,422,446 (‘446
Application)), the litigation history and Phostech’s past relationship with Valence. He also
discussed how Phostech attempted to determine whether or not it was infringing the Valence Patents through various tests. Finally, he testified in support of the misappropriation arguments of the Defendant, pursuant to s. 53 of the Patent Act, RSC 1985, c P-4.
[44] Like the other factual witnesses, Dr. Gauthier was a credible witness and the Court has no reason to believe that Phostech was acting in bad faith when it chose its P1 Process or continued to use it after receiving the letter of demand from Valence.
[45] In relation to Phostech’s arguments with regards to misappropriation (ss. 53(1) of the Patent Act), Phostech’s position is based on its belief that Valence’s patent agent clearly incorporated the claims of Hydro-Québec’s application (‘129) into the claims of the ‘366 Patent, including the use of the term “C-LiFePO4” in claim 73, which it alleges was taken from the ‘446 Application.
[46] Finally, Dr. Gauthier explained how a declaration of infringement and an injunction preventing the use of the P1 Process before the P2 Process is operational in 2012 would impact Phostech’s 55 employees and its ability to compete in the Asian markets, where most of its product is sold.[46]
[47] Valence’s expert on infringement, Dr. Jeffery Dahn, holds a Ph.D. in Physics (1982) and has been a professor in the Physics Department at Dalhousie University in Nova Scotia since 1996 with a cross-appointment in the Chemistry Department. He has had extensive experience in the area of lithium ion battery research and has won multiple awards for his work and for his teaching appointments. Dr. Dahn has authored several hundred papers dealing with lithium ion batteries and he recently completed a chapter on the subject for the 4th edition of the Handbook of Batteries.[47]
[48] Dr. Dahn was qualified as an expert in lithium ion batteries and the processes and materials involved in making the cathode materials for lithium ion batteries. He filed 3 expert reports. His first report (Exhibit V-5) deals with claims construction and infringement of the Valence Patents. In this report, he analyzes the experimental work, including thermogravimetric analysis (TGA) and x-ray diffraction (XRD), conducted by Canmet ENERGY to evaluate the P1 Process (Exhibit V-5, Tab O). His second report (Exhibit V-6) is a supplement to the first report which addresses additional facts concerning some specifications of the Phostech kiln and P1 Process which came to
light after he drafted his first report. Finally, Dr. Dahn’s third report (Exhibit V-7) replies to Dr. Bale’s first two reports (Exhibits P-6, P-7). He comments on the results of the testing conducted by Dr. Bale on Phostech’s commercial materials and the test performed by Dr. Bale in Exhibit P-7 (Dr. Bale’s Vapour Test). He also responds to criticisms from Dr. Bale concerning the Canmet ENERGY testing (namely, improper particle size) and explains additional testing done by Canmet ENERGY (V-7, Tab A) to rectify these concerns and to demonstrate that the TGA results of Dr. Bale and those of Canmet are equivalent.
[49] Despite Phostech’s attempts to impugn the credibility of this expert and the weight to be given to his evidence (see para. 165), the Court found him to be a particularly credible and compelling witness whose explanations were clear and straight-forward.
[50] Phostech’s expert on infringement, Dr. Christopher Bale, holds a Ph.D. in Engineering (1973). He is a retired professor from the Université de Montréal (École Polytechnique de Montréal) where he taught in the Department of Metallurgical Engineering since 1977 at both the graduate and undergraduate levels. He is also the co-founder and co-Director of the Centre de Recherche en Calcul Thermochimique which develops and sells software that utilizes thermochemical properties from experimentation and manipulates them to calculate and plot results or predict systems not yet in existence. Dr. Bale has over 35 years experience in chemistry, chemical metallurgy and related fields and his principal areas of expertise are thermochemistry and chemical processes simulation.
[51] Dr. Bale was qualified as an expert in the field of thermochemistry and thermodynamics aspects of chemical and materials science as well as an expert in the field of the analysis and simulation of processes used in the production of materials. Although the parties did not challenge the qualification of the experts at trial, Valence sought to clarify that “materials” in his case did not include lithium iron phosphate materials as Dr. Bale has never worked with this type of battery material.[48]
[52] There is no dispute that Dr. Bale cannot attest to what a person of ordinary skill in the art (posita) would commonly know or how he or she would understand the patents at issue. In that respect, he had to rely entirely on Dr. Whittingham’s opinion.
[53] Like Dr. Dahn, Dr. Bale filed 3 expert reports. His first report (Exhibit P-6) primarily concerns the issue of infringement of the Valence Patents by the P1 Process. Dr. Bale discusses experimental testing he performed to analyze the Phostech P1 Process precursors and final product, including TGA, XRD, differential scanning calorimetry (DSC), mass spectrometry (MS) and scanning electron microscopy (SEM). In his second report (Exhibit P-7), Dr. Bale responds to Dr. Dahn’s first report (V-5) and discusses an additional test he performed to show that FePO4 could be reduced by polymer vapours (Dr. Bale’s Vapour Test, P-7 Annex). His final report (Exhibit P-8) is a supplement to his responding report and discusses additional experimental testing conducted on Phostech’s commercial product (combined MS-TGA-DSC experiments).
[54] Essentially, the disagreement between these experts was as to whether or not the reduction of the Fe3+ in the P1 Process is effectively done by CTR. According to Dr. Bale, by the time (and temperature) that carbon (the carbon residue from the pyrolysis of the polymer used in the P1 Process) could become active, iron reduction would have already been completed by the gases, the precise composition of which is not entirely known. For Dr. Dahn, considering the particulars of the P1 Process, although a very minor fraction of the iron may be reduced by the gases produced during the pyrolysis of the organic polymer used by Phostech, the reduction process is CTR and the P1 Process includes all the essential elements of the claims at issue.
[55] Turning to the invalidity arguments and the counterclaim, Phostech presented Dr. Michael Stanley Whittingham, who holds a Ph.D. in Chemistry with a specialization in solid state chemistry (1968). Dr. Whittingham is currently a professor in Chemistry and Materials Science & Engineering at Binghamton University in New York where he teaches at the undergraduate and graduate level. His past experience includes the development of lithium ion battery materials and multiple publications in the area, including a review of lithium batteries and cathode materials published in 2004 (Exhibit P-27, p. 291-321). Dr. Whittingham was qualified as an expert in the field of the preparation of lithium ion battery materials as well as the field of the chemical and physical analysis of the properties of these materials. Dr. Whittingham is especially known in his field for the hydrothermal technique for synthesis of lithium iron phosphates, which is essentially the P2 Process that will shortly be used by Phostech at its new installation.
[56] Dr. Whittingham filed 3 reports. His first report (Exhibit P-27) deals with construction of the Valence Patents and, in his opinion, that all these patents are invalid on the basis of obviousness, anticipation and lack of sound prediction; he also claims overbreadth, misappropriation and lack of utility (for the ‘366), overbreadth (for the ‘115) and double patenting (for the ‘918). He provides a historical background on lithium rechargeable batteries. He also discusses what he views as plagiarism even though the Court did not accept him as an expert on this subject.[49] His second report (Exhibit P-28) responds to the report of Dr. Dahn on certain aspects of claims construction, while his third report (Exhibit P-38) responds to the expert reports of Drs. Cairns and Morgan and deals particularly with the passages at page 13 line 14 to page 14 line 2 of the ‘115 and ‘366.
[57] Dr. Elton J. Cairns holds a Ph.D. in Chemical Engineering (1959). He has conducted research on lithium ion cells and electrode materials for the past 20 years. His research has covered the preparation and characterization of electrode materials for lithium batteries, mostly for the cathode. He was the editor of two major electrochemical journals: The Journal of the Electrochemical Society and Electrochemica Acta and the president of both the International Society for Electrochemistry and the Electrochemical Society. Dr. Cairns was qualified as an expert in electrochemistry and lithium ion batteries.
[58] Dr. Cairns submitted one report (Exhibit V-20). This report deals with claims construction and the validity of the Valence Patents and responds to Dr. Whittingham’s first report on these issues. He also provides background on battery science and a brief history of the development of cathode materials for lithium ion cells.
[59] Valence’s second expert on validity, Dr. Morgan, holds a Ph.D. in Physics (1998). From 1998 to 2004 he was in the Department of Materials Science and Engineering at the Massachusetts Institute of Technology studying lithium ion batteries and modeling their thermodynamics and kinetic properties. He has been teaching since 2004 in the Department of Materials Science and Engineering at the University of Wisconsin in Madison, where he is now an Associate Professor. His work includes the thermodynamics and kinetic properties of battery materials, with a particular focus on lithium battery materials (lithium iron phosphate) and processes of lithium intercalation. He was qualified as an expert in the materials science of lithium ion batteries.
[60] Although Dr. Morgan prepared an extensive report (Exhibit V-24), at trial, only certain paragraphs of his report were entered into evidence (paragraphs 1-50, 85-90, 113-128, 161-164, 182) to avoid duplication, an issue that had been raised by Phostech earlier in the process.
[61] The parties are agreed that all these experts were well qualified to deal with all the issues discussed in their reports (except for plagiarism for Dr. Whittingham and common general knowledge of the posita by Dr. Bale). I agree. Although they were all credible witnesses, the Court in the end gave less weight to the opinions of Drs. Bale and Whittingham for a variety of reasons that will be discussed later on. Dr. Bale’s testimony was not particularly clear and he had some difficulty focusing on the real issues in dispute. It may well be that this was simply his lack of experience with the litigation process. I must say that I was not particularly impressed by the testimony of Dr. Whittingham.
1. Claims Construction
i. The Principles
[62] The principles applicable to the construction of patent claims are well-known. I will thus refer simply to what I said in Eli Lilly, 2009 FC 991 at paragraph 87 and 88:
87 Before considering the allegations of infringement and invalidity, the Court must construe the claims at issue in this proceeding. The principles of construction are well-established. They are set out in Free World Trust v. Electro Santé Inc. 2000 SCC 66, [2000] 2 S.C.R. 1024 (Free World Trust), and Whirlpool Corp. v. Camco Inc. 2000 SCC 67, [2000] 2 S.C.R. 1067 (Whirlpool). Since those decisions were issued, much has been written by this Court on this topic. Be it sufficient to say that "[t]he key to purposive construction is therefore the identification by the court, with the assistance of the skilled reader, of the particular words and phrases in the claims that describe what the inventor considered to be the "essential" elements of his invention." As to the further details of what date the claims are to be construed, using what criteria, what resources, through whose eyes and what is made of the resulting construction, the Court adopts and refers to paras. 32-48 of Justice Roger Hughes' decision in Pfizer Canada Inc. v. Canada (Minister of Health), 2005 FC 1725, 285 F.T.R. 1.
88 As noted in Shire Biochem Inc. v. Canada (Minister of Health), 2008 FC 538, 328 F.T.R. 123, at para. 21 (Shire), the Court "is not to construe a claim without knowing where disputes between the parties lie." … [Footnotes omitted.]
[63] There was no real disagreement between the parties in this respect[50] except maybe that Phostech argues that, in this case, the examples of the patent, particularly those in the ‘115 and ‘366 Patents, are very useful to define how certain expressions such as “carbon” would be understood. The Defendant referred to Janssen-Ortho Inc v Novopharm Ltd, 2006 FC 1234, aff’d 2007 FCA 217.
[64] The Court will obviously consider the examples in the patents under review as they are part of their specifications. However, one must be cautious not to rely too heavily on these for they are just as their description implies “examples” of some of the embodiments of the invention, and, as mentioned in most patents, they are not usually meant to limit the monopoly defined in the claims (see for example p. 35, line 19 - 21 of the ‘115 Patent).[51]
[65] As these patents were all filed after October 1st, 1989, they are subject to the Patent Act, RS 1985, c P-4 (sometimes still referred to as the New Act). They must be construed as of the date of the publication of the application. Thus, the Court must take into consideration the common general knowledge of the posita as of July 26, 2001 for the ‘115 and the ‘366 Patents, and December 4, 2003 for the ‘918 Patent.
ii. Posita
[66] It is not disputed that the posita in this case would be familiar with the technology involved in these patents and would understand how to conduct the method(s) described therein.
[67] Although there was some debate as to whether one should include in the definition of the posita, a person who would have a B.Sc. or graduate degree in physics[52] as opposed to electrical chemistry or materials science; by the end of the trial, it was clear that Phostech agrees that such persons would be included, noting however, that a notional individual with a background in physics may need a few more years of practical experience in the field of lithium batteries. In my view, this is covered by the 3-5 years of experience discussed below.
[68] I thus accept the following definition of the posita proposed by Dr. Cairns: a person with a B.Sc. in materials science, electrochemistry, physics or physical chemistry and between three to five years of work experience in the field of lithium batteries, or a graduate degree (Masters or Ph.D.) on a subject related to the field of lithium batteries. Obviously, if the graduate degree was obtained in a field other than lithium batteries (thesis) then the graduate would also need to have some practical experience in the relevant field.
[69] Finally, the notional posita is assumed to keep up-to-date in his field. However, it would appear that in this particular field, those actually practicing keep up to date mostly through reviewing publications and leading journals rather than reviewing patent applications.
iii. Common general knowledge
[70] The Court is satisfied that the posita would generally know that carbon is a reducing agent used to reduce metals to their elemental state (see also p. 60 of the ‘115 and ‘366 Patents). Dr. Bale testified that CTR is not a subject that is normally taught in chemistry, it is taught in engineering (see Transcript of September 7, 2010 at p. 45-46). He noted that this topic is also taught at the undergraduate and graduate level to chemical metallurgists. I understand from this and from the other evidence before me that the posita’s knowledge in this respect would be general and not as detailed as that of a metallurgist or chemical engineer. The posita would be generally familiar with the Ellingham Diagram discussed by Dr. Bale and would have generally known that hydrogen gas could be used as a reducing agent.
[71] Although it was known that carbon produces gases such as CO and CO2 when in contact with oxygen, it was commonly known that pure carbon cannot exist as a gas or a liquid in normal atmospheric pressure or at temperatures less than 3,600oC.[53]
[72] Obviously, the posita would be aware of all the general background information described in the patents and the section entitled “Background” in these reasons in respect of rechargeable batteries including the information described in the following paragraphs of exhibits filed by the parties which were admitted to be part of the relevant common general knowledge (Exhibit V-24: Report of Dr. Morgan, paras 10 to 27, 29, 30, 32; Exhibit V-20: Report of Dr. Cairns, paras 10 to 29, 31, 33, 35, 36; Exhibit V-5: Report of Dr. Dahn, paras 13 to 17, 19 to 27; Exhibit P-27: Report of Dr. Whittingham, “Background” section, part 1; Exhibit P-6: Report of Dr. Bale, section 2.1.1(i)(ii) and (iii) and 2.2.2, excluding the attachment referenced therein).
[73] Prior to 2000, the only synthesis method commonly known and in fact used to make lithium iron phosphate cathode materials was from a ferrous phosphate precursor, where the iron is in a +2 oxidation state and where this valency was maintained throughout the synthesis by using a non-oxidizing atmosphere.
[74] It was known to the posita that in making a lithium battery cell (both the anode and the cathode), one normally used carbonaceous material such as graphite and carbon black as well as binders. In the cathode, ground up carbon black was added to the active material to improve its electrical conductivity.[54]
[75] The Court is also satisfied that it has been established through the testimony of Dr. Dahn,[55] who referred to standard publications such as a textbook entitled Chemistry and Physics of Carbon published in 1971 (Exhibit V-5, Tab R, p. 318), that it was generally known that many polymers decompose to yield carbonaceous material or a carbon residue as a result of pyrolysis.[56]
[76] Considering what common general knowledge is (see Eli Lilly, above, at paras 96 - 100), the Court does not accept that it has been established to its satisfaction that what Dr. Ravet or any member of her research team said at the Honolulu conference became part of the common general knowledge in 1999, that is, prior to the first article she and her team published in July 2001. Also, as it is not clear exactly when in July this publication would have been circulated to the notional posita, the Court cannot assume that what one finds in that article (Exhibit P-15) was part of the common general knowledge the posita would have had in mind when reading the application for the ‘115 Patent in July 2001.[57]
[77] The Court finally notes that it had to be particularly careful with the evidence of Dr. Whittingham with respect to what was well-known and generally accepted by the posita. In effect, this expert admitted that he was not careful in his choice of words in this respect. In his report, he sometimes included knowledge that is available now as opposed to at the publication date of the patents at issue (see for e.g. Exhibit P-27, p. 5 (para. 3) and p. 6 (para. 4) and Transcript of September 14, 2010 at page 76-77), as well as information disclosed in prior art that had not yet formed part of wha