Bloomberg News

Dow Chemical Wins Appeal Backing $61.7 Million Nova Verdict

January 24, 2012

(Updates with Dow comment in fourth paragraph.)

Jan. 24 (Bloomberg) -- Dow Chemical Co. won an appeals court ruling that upholds a $61.7 million patent-infringement verdict against Nova Chemicals Corp. from 2010 related to plastic used in grocery bags.

The U.S. Court of Appeals for the Federal Circuit in Washington rejected Nova’s arguments that its Surpass plastic didn’t infringe two Dow patents, and that the patents were invalid. The opinion was posted on the court’s website today.

Nova, owned by Abu Dhabi-based International Petroleum Investment Co., was accused of using Dow inventions for polymers that are thinner and stronger than conventional plastic. The Federal Circuit said the patents clearly described what Dow said it invented, and that the verdict of infringement “is supported by substantial evidence.”

With interest, the jury award was $76 million, and the company plans to seek “substantial additional damages” for Nova’s continued infringement in the U.S. after 2009, said Bob Plishka, a spokesman for Dow.

The company is seeking damages and an order to block further use of the inventions in Canada, he said.

Nova had also argued that Midland, Michigan-based Dow transferred the patents to a holding company for tax purposes. The majority of the three-judge panel said the trial judge was correct to rule that the patents weren’t part of the creation of that holding company. Circuit Judge Jimmie Reyna said he would have sided with Nova on that issue and thrown out the verdict.

Panel Split

Nova, while saying it was disappointed with the ruling, pointed out that the panel was split. The company can ask the panel to reconsider its findings, or ask that the entire court consider the case.

“We’re reviewing the decision to determine what our next steps will be,” Pace Markowitz, a spokesman for Nova, said by telephone.

The case is Dow Chemical Co. v. Nova Chemicals Corp., 10-1526, U.S. Court of Appeals for the Federal Circuit (Washington). The lower court case is Dow Chemical Co. v. Nova Chemicals Corp., 05cv737, U.S. District Court for the District of Delaware (Wilmington).

--With assistance from Phil Milford in Wilmington, Delaware. Editors: Andrea Snyder, Steve Walsh

To contact the reporter on this story: Susan Decker in Washington at sdecker1@bloomberg.net

To contact the editor responsible for this story: Michael Shepard at mshepard7@bloomberg.net


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