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Sandvik Intellectual Property Ab v. Kennametal

July 24, 2012

SANDVIK INTELLECTUAL PROPERTY AB, PLAINTIFF,
v.
KENNAMETAL, INC., DEFENDANT.



The opinion of the court was delivered by: McVerry, J.

MEMORANDUM OPINION AND ORDER OF COURT ADOPTING SPECIAL MASTER'S REPORT AND RECOMMENDATION ON CLAIM CONSTRUCTION

Before the Court is PLAINTIFF'S OBJECTIONS TO REPORT AND RECOMMENDATION OF SPECIAL MASTER filed by Sandvik Intellectual Property AB ("SIPAB") (Document Nos. 247 and 249) and the RESPONSE filed by Kennametal, Inc. ("Kennametal") (Document No. 252). Also pending is the MOTION TO ADOPT REPORT AND RECOMMENDATION OF SPECIAL MASTER AS TO CLAIM CONSTRUCTION filed by Kennametal (Document No. 241) and the BRIEF IN OPPOSITION filed by SIPAB (Document No. 253).

Having reviewed the record de novo, and the objections of SIPAB to the Report and Recommendation of the Special Master, the Court adopts in its entirety the claim construction recommended by the Special Master in his Report and Recommendation dated February 26, 2012 (Document No. 240).

BACKGROUND

A. The '625 Patent

There being no objection to the Special Master's summary of the patent, the Court adopts it in whole, and will partially quote it hereafter.

SIPAB (through a related company, Sandvik, Inc.) and Kennametal are both in the business of manufacturing and selling metal cutting tools. SIPAB owns U.S. Patent No. 5,487,625 ("the '625 Patent), entitled "Oxide Coating Cutting Tool." The '625 Patent discloses cutting tool inserts*fn1 coated with alumina that have a particular microstructure and crystallographic texture to overcome shortcomings of the prior art. *fn2 Alumina (A12O3) is a commonly employed coating material in the coating tool industry. Alumina is deposited onto the surface of the cutting tool through the process of chemical vapor deposition ("CVD"). Alumina may crystallize onto the surface in a variety of phases (i.e., polymorphs), each having its own physical properties (e.g., hardness, density, thermal properties). One of those phases (αalumina) deposits in the form of coarse grains having a size of 1-6 μm depending on the deposition conditions. The α-alumina will deposit in a thermodynamically stable hexagonal crystalline structure. It is this phase that is utilized as a coating material for cutting tools in the preferred embodiments of the '625 Patent.

One manner of assessing the specific orientation and structure of α-alumina crystals produced on a tool surface by CVD is the measurement of the texture coefficient ("TC") along a particular orientation of the crystal. The '625 Patent states that the TC for α-alumina may be calculated using the Harris equation, which is commonly used to calculate TC and is stated mathematically as:

"n" is the number of X-ray diffraction ("XRD") peaks found in the X-ray spectrum, "I(hkl)" the intensity of the individual peaks in the XRD pattern from the test sample, and "Io(hkl)" is the intensity from standard XRD data for the particular crystalline structure being assessed.

The claims of the '625 Patent are directed to coated cutting tool bodies having one or more refractory layers of which at least one layer is α-alumina. Claim 1, the only independent claim of the '625 Patent, reads:

1. A coated cutting tool body with one or more refractory layers of which at least one layer is alumina, said alumina layer having a thickness (d) of 0.5-25 μm and a single phase α-structure with a grain size (s):

0.5 μm <><1 μm="" for="" 0.5="" μm=""><><2.5 μm;="" and="" 0.5="" μm=""><><3 μm="" for="" 2.5=""><><25 μm,="" said="" alumina="" layer="" exhibiting="" a="" texture="" coefficient="" greater="" than="" 1.3="" for="" the="" (012)="" growth="" direction="" of="" the="" equivalent="" crystallographic="" planes="" defined="">

wherein: I(hkl)=measured intensity of the (hkl) reflection;

Io(hkl)=standard intensity of the ASTM standard powder pattern diffraction data; and n=number of reflections used in the calculation, wherein (hkl) reflections used are: (012), (104), (110), (113), (024), (116).

Thus, the claimed invention of the '625 Patent specifies the thickness depth, grain size, and TC (as calculated by the modified Harris equation) of the α-alumina coating layer of the cutting tool.

B. The Dispute Between the Parties

The dispute between the parties with regard to the scope of claim terms is narrow, pertaining only to the "texture coefficient" phrase. Kennametal asserts that the TC equation phrase contains terms that render it indefinite. In response, SIPAB argues that the overwhelming intrinsic and extrinsic evidence, which includes Kennametal's own pre- and post-litigation conduct, establishes that the disputed claim phrase and terms are not indefinite and should be given their ordinary meaning to one skilled in the art. Further, SIPAB contends that the TC formula is definite because it is a known formula in the art as of the time of the patent.

Kennametal does not dispute that the various TC formulas were known in the art before the patent's December 1992 claimed priority date. Rather, Kennametal's position is that the claims are indefinite not because the TC formula is unknown, but because the '625 Patent fails to specify how to select and calculate the two variables that the TC formula requires to calculate a TC value:

* I0(hkl) = standard intensity of the ASTM standard powder pattern diffraction data; and

* I(hkl) = measured intensity of the (hkl) reflection.

Kennametal contends that the '625 Patent provides no guidance on the following two (2) questions:

(1) which "standard intensity" should be selected among the more than a dozen "ASTM standard powder pattern diffraction data" of α-alumina available in December 1992?"; and

(2) how should the intensity of an α-alumina coating be measured using XRD (for instance, which parameters for the testing and analysis of intensity data should be chosen)?

In response, SIPAB submits that "I(hkl) is the measured intensity of the hkl reflection using X-Ray Diffraction, where hkl are the Miller indices of the measured crystallographic plane" and that "I0(hkl) is the standard intensity of the hkl reflection as indicated on Powder Diffraction File 10-173 for alpha-Aluminum Oxide (corundum)."

C. Claim Construction Proceedings

On October 10, 2010, the parties submitted a Joint Disputed Claims Terms Chart (Document No. 94). Thereafter, on November 1, 2010, SIPAB filed its Opening Claim Construction Brief (Document No. 103) and on November 22, 2010, Kennametal filed its Response to SIPAB's Opening Claim Construction Brief (Document No. 107). Because of the complexity of the issues raised in the parties' briefs, by Order of November 30, 2010, the Court appointed Frederick H. Colen, Esquire as Special Master to serve throughout the claim construction process including, but not limited to, the Claim Construction Hearing and the Report and Recommendation (Document No. 125)

A Claim Construction Hearing ("Markman Hearing") was conducted on June 13-14, 2011, before the Special Master, with the undersigned in attendance, at which all parties were represented by counsel who presented and argued the issues skillfully and effectively. Todd B. Hufnagel, Ph.D., testified as an expert witness for SIPAB and William E. Mayo, Ph.D., testified as an expert witness for Kennametal. Both provided extensive testimony as to their respective positions with respect to the definiteness / indefiniteness of the claims of the '625 Patent and the bases for their opinions.

Prior to the Markman Hearing, SIPAB requested that the Court determine whether the invalidity defense of indefiniteness should be decided by the Court as part of the claims construction determination or by the jury at the trial of the case. Both parties briefed the issue and agreed that oral argument was unnecessary as the issue could be decided on the briefs. See Document Nos. 150, 151, 155, and 156. The Court requested the Special Master to provide the Court with his recommendation as to the disposition of this issue as part of the Report and Recommendation.

After the Markman hearing, SIPAB filed a Motion to Strike Opinions (and other testimony) of William E. Mayo, Ph.D., Kennametal's expert, under Federal Rule of Evidence 702 (Document No. 199). That matter was also fully briefed by the parties. See Document Nos. 200, 209, and 212. The Court requested the Special Master to provide the Court with his recommendation as to the disposition of this Motion as part of the Report and Recommendation.

On February 16, 2012, Special Master Colen issued his Report and Recommendation on Claim Construction (the "Report and Recommendation") (Document No. 240), in which he made the following recommendations:

1. It is prudent and appropriate for the Court to consider the issue of indefiniteness at the claim ...


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