VALENCE TECHNOLOGY, INC. Plaintiff Defendant by Counter claim v. PHOSTECH LITHIUM INC., 2011 FC 174

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 Counter claim 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 (LiFePO 4 ) 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- LiFePO 4 ), 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-LiFePO 4 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- LiFePO 4 ) 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 Fe 0 ).

Certain atoms can exist in more than one oxidation state ( e.g. iron can exist in a 2+ or 3+ oxidation state depicted as Fe 2+ or Fe 3+ 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, Fe 3+ can be reduced to Fe 2+ 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, Fe 2+ minus one electron will be oxidized to Fe 3+ . Typically, when metallic Fe 0 reacts with air, it will be oxidized (loss of electrons) to Fe 3+ . [ 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 (CO 2 ) as an effluent gas. The amount of CO or CO 2 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 LiFePO 4 is in the 2+ oxidation state. Iron in ferric phosphate (FePO 4 ) is in the 3+ oxidation state.

Thus, on discharge of the battery, lithium is inserted into the FePO 4 of the cathode, which reduces FePO 4 to LiFePO 4 . Upon charging the battery, the opposite reaction occurs. Lithium is extracted from the cathode which oxidizes the LiFePO 4 to FePO 4 . [ 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 LiFePO 4 as a cathode material have excellent reversibility on repeated cycling (ability to charge and discharge) because the structures of FePO 4 (lithium extracted) and LiFePO 4 (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 (LiCoO 2 ) 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 LiCoO 2 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 LiFePO 4 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 C onfidentiality 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-LiFePO 4 (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 LiFePO 4 , 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 LiFePO 4 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 LiFePO 4 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 LiFePO 4 , other than that proposed by Dr. Goodenough, since the precursor materials in that mechanism ( i.e. precursors starting from Fe 2+ ) were very expensive. [31] Because Hydro-Québec was interested in commercializing its own battery, Dr. Ravet​s team was involved in upgrading the LiFePO 4 production process. [32] [ 37 ] Dr. Ravet spoke about the very first time she presented her research on LiFePO 4 , which was in Honolulu , Hawaii, for the 196 th 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 LiFePO 4 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 10 th 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 LiFePO 4 ​ 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 Fe 3+ precursor, [39] since there were many problems with

Fe 2+ oxidation. [40] At that time, the lab used externally applied gaseous reducing atmospheres including a CO/CO 2 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 LiFePO 4 in a process that was reducing Fe 3+ to Fe 2+ 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-LiFePO 4 ​ 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 4 th 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 h is 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 p erson of o rdinary s kill in the a rt (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 FePO 4 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 Fe 3+ 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 1 st , 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 CO 2 when in contact with oxygen, i t was commonly known that pure carbon cannot exist as a gas or a liquid in normal atmospheric pressure or at temperatures less than 3,600 o C. [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 what can be regarded as common general knowledge. iv. The ​115 Patent [ 78 ] As mentioned, the number of claims in play in this patent was greatly reduced and the Court only needs to construe the independent claim 3. [58] [ 79 ] This claim reads as follows: 3.

In a method of making a lithium mixed metal polyanion compound by reacting a mixture of a lithium compound and at least one metal containing compound, said compounds in particle form, the improvement comprising: incorporating carbon into said mixture in an amount sufficient to reduce the oxidation state of at least one metal ion of the metal containing compound without full reduction to an elemental state and carrying out the reaction in the presence of said carbon. [ 80 ] The ​115 Patent is entitled Preparation of lithium-containing materials , the 63 page disclosure is followed by 140 claims.

Considering the claim at issue here, the Court will focus in these reasons on the parts of the disclosure that were referred to by the parties and appear to be the most relevant. [59] Also, because the ​366 Patent and the ​115 Patent share a common disclosure (with the exception of p. 20o to 20r), I will include some passages that may be more relevant to the ​366 Patent.

This will avoid having to refer to this disclosure again while construing the claims of the ​366 Patent. [ 81 ] Under ​Field of the Invention​ on page 1, one finds that the invention is to relate to ​improved materials usable as electrode active materials and to their preparation.​ In the ​Background of the Invention​, the inventor describes in general terms the preparation of lithium batteries, the material used for the anode and the preferred positive electrode active materials which are said to ​ all have a common disadvantage in that the charge capacity of a cell comprising such cathodes suffers a significant loss in capacity​ (page 2, line 32 to 34). [ 82 ] In the ​Summary of the Invention​ on page 4, it becomes clear that the methods of the invention are useful in the preparation of materials of known products as well as novel compounds (see page 14).

The desirable lithium mixed metal phosphate is represented by the nominal general formula Li a MI b MII c (PO 4 ) d . In one aspect MI and MII are the same, although in a preferred aspect they are different from one another. At least one of MI or MII is an element capable of an oxidation state higher than that initially present in the lithium- mixed metal phosphate compound (page 4, line 35 to page 5, line 2).

The invention is said to apply to a variety of metals, for example MI is selected from: Fe (iron), Co (cobalt) , Ni (nickel), Mn (manganese), Cu (copper), V (vanadium), Sn (tin), Ti (titanium), Cr (chromium), and mixtures thereof (page 5). Among other things, it is said that MI is preferably at the +2 oxidation state (page 6).

The disclosure then goes on to discuss aspects where the structure of the product may differ due to variations of the product formula. [ 83 ] The inventor also indicates that the anode active material (negative electrode) also comprises ​carbonaceous material such as graphite​ (page 7). [60] [ 84 ] At page 7 of the disclosure, it is clear that in one embodiment: The starting (precursor) materials include a lithium-containing compound, one or more metal containing compounds, a compound capable of providing the phosphate (PO 4 ) -3 anion, and carbon.

Preferably, the lithium-containing compound is in particle form, and an example is lithium salt. Preferably, the phosphate-containing anion compound is in particle form, and examples include metal phosphate salt and diammonium hydrogen phosphate (DAHP) and ammonium dihydrogen phosphate (ADHP). The lithium compound, one or more metal compounds, and phosphate compound are included in a proportion which provides the stated nominal general formula.

The starting materials are mixed together with carbon, which is included in an amount sufficient to reduce the metal ion of one or more of the metal-containing starting materials without full reduction to an elemental metal state. Excess quantities of carbon and one or more other starting materials (i.e., 5 to 10% excess) may be used to enhance product quality. A small amount of carbon, remaining after the reaction, functions as a conductive constituent in the ultimate electrode formulation. This is an advantage since such remaining carbon is very intimately mixed with the product active material.

Accordingly, large quantities of excess carbon, on the order of 100% excess carbon are useable in the process. The carbon present during compound formation is thought to be intimately dispersed throughout the precursor and product. This provides many advantages, including the enhanced conductivity of the product.

The presence of carbon particles in the starting materials is also thought to provide nucleation sites for the production of the product crystals. (page 7, line 28 to page 8, line 23) [ 85 ] The disclosure then goes on to discuss various aspects of this method which can be carried out in a single phase or in two phases with different precursors. Then at page 13, the inventor gives some more details about the preparation of the starting materials and how they are to be reacted: Before reacting the compounds, the particles are intermingled to form an essentially homogeneous powder mixture of the precursors.

In one aspect, the precursor powders are dry-mixed using a ball mill, such as zirconia media. Then the mixed powders are pressed into pellets. In another aspect, the precursor powders are mixed with a binder. The binder is selected so as to not inhibit reaction between particles of the powders. Therefore, preferred binders decompose or evaporate at a temperature less than the reaction temperature.

Examples include mineral oils (i.e., glycerol, or C-18 hydrocarbon mineral oil) and polymers which decompose (carbonize) to form a carbon residue before the reaction starts, or which evaporate before the reaction starts.

In still another aspect, intermingling is conducted by forming a wet mixture using a volatile solvent and then the intermingled particles are pressed together in pellet form to provide good grain-to-grain contact. (page 13, line 19 to page 14, line 2; emphasis added) [ 86 ] At page 14, one finds again that although one could use the precursor compounds in ​a proportion which provides the stated general formula of the product,​ the carbon may also be present at up to 100% excess compared to the stoichiometric amount required to do the reduction. [ 87 ] At page 16 the inventor states: it is desirable to conduct the reaction at a temperature where the lithium compound reacts before melting.

The temperature should be about 400°C or greater, and desirably 450°C or greater, and preferably 500°C or greater, and generally will proceed at a faster rate at higher temperatures.

The various reactions involve production of CO or CO 2 as an effluent gas. [ 88 ] The inventor then goes on to explain how depending on the production of CO or CO 2 , one will require more carbon if one wishes to use only the stoichiometric quantity required to reduce the metal to a certain valency. [ 89 ] At page 17, one can read: the method of the invention utilizes the reducing capabilities of carbon in a unique and controlled manner to produce desired products having structure and lithium content suitable for electrode active materials.

The method of the invention makes it possible to produce products containing lithium, metal and oxygen in an economical and convenient process. The ability to lithiate precursors, and change the oxidation state of a metal without causing abstraction of oxygen from a precursor is heretofore unexpected.

These advantages are at least in part achieved by the reductant, carbon, having an oxide whose free energy of formation becomes more negative as temperature increases. [ 90 ] The method is said to utilize ​an effective combination of quantity of carbon, time and temperature to produce new products and to produce known products in a new way​ (page 18, line 4 to 7). Various details as to the gases produced at different temperatures

and as to the temperature ramp rate during the reaction are then discussed before specifying that ​[t]he heating is preferably conducted under non-oxidizing or inert gas such as argon or vacuum.

Advantageously, a reducing atmosphere is not required, although it may be used if desired ​ (page 18, line 35 to page 19, line 2; emphasis added). [ 91 ] According to the inventor, the invention resolves the capacity problem caused by the widely used cathode materials in improving the said capacity in a relatively economical and readily adaptable method for commercial production, particularly for the preparation of large quantities. [ 92 ] Then at page 20, the inventor discusses another embodiment of the method of the invention which comprises: a method of making a lithium mixed metal polyanion compound by reacting a mixture of a lithium compound and at least one metal containing compound, said compounds in particle form, the improvement comprising of an incorporating carbon into said mixture in an amount sufficient to reduce the oxidation state of at least one metal ion of the metal containing compound without full reduction to an elemental state and carrying out the reaction in the presence of said carbon.

This embodiment is described in terms similar if not identical to those found in claim 3. [ 93 ] The additional pages (20a to 20n) [61] added at some point before the issuance of the patent describe further embodiments or aspects of the methods of the invention, some are more precise in terms of the precursor materials to use while others involve different stages where the carbon is sometimes described as part of the starting materials and sometimes is simply said to be incorporated into the starting materials described therein.

Sometimes this incorporation is prior to heating (page 20a, line 10) and sometimes it is simply before carrying out the reaction (page 20i, line 32). [ 94 ] A particularly preferred embodiment is where the compositions described use carbon in excess desirably up to 100% stoichiometric excess (page 20i, line 9 to 13). [ 95 ] At page 20j, the inventor describes an embodiment where the starting materials desirably include carbon, in powder form, and the reaction involves reacting ​a finely divided mixture​ of the reactants. [ 96 ] At pages 20o to 20r (which are only present in the ​366 Patent), various aspects of the invention include mixing the starting materials in particle form with a volatile solvent or binder, where the starting materials include carbon.

Additionally, these pages describe various compositions made through a process whereby the precursor compounds are mixed with a volatile solvent or binder and reacted in the presence of carbon. [ 97 ] It is not clear to me that amendments made well after the publication date are to be considered in construing the patent given that these amendments would not be available at the date of publication.

The parties did not raise or argue this point and I need not decide it in this case for I am satisfied that the construction I have adopted (in respect of the ​115 and ​366 Patent claims) would be the same whether I consider the disclosure as originally published or as amended. [ 98 ] The disclosure then gives a brief description of the 23 figures found at the end of the patent, the first three refer to LiFePO 4 which is the material at issue in these proceedings.

That final compound is specifically referred to many times in the disclosure. [ 99 ] At page 27, one finds a detailed description of the preferred embodiments which goes into the specifics of the construction of the positive electrode and the lithium iron battery. [62] [ 100 ] It is followed by a series of ten examples. The first three examples relate to the reaction of LiFePO 4 using materials (including carbon) for which few details are given. Examples 4 to 10 relate to other compounds covered by the nominal formula referred to earlier.

Again the carbon used is not described in detail except in example 9 where it is specified to be ​Shiwinigan Black​ ( sic ). [63] [ 101 ] From page 45 to 60, the inventor discusses the ​Characterization of Active Materials and Formation and Testing of Cells​.

[ 102 ] At page 60, the inventor states that ​[t]he reduction capability of carbon over a broad temperature range is selectively applied along with thermodynamic and kinetic considerations to provide an energy-efficient, economical and convenient process to produce compounds of a desired composition and structure. This is in contrast to known methods.​ Then at line 16, one finds a passage that was the subject of much discussion during the trial, it reads as follows: Principles of carbothermal reduction have been applied to produce pure metal from metal oxides by removal of oxygen. See, for example, U.S.

Patent Nos. 2,580,878, 2,570,232, 4,177,060, and 5,803,974. Principles of carbothermal and thermal reduction have also been used to form carbides. See, for example, U.S. Patent Nos. 3,865,745 and 5,384,291; and non-oxide ceramics (see U.S. Patent No. 5,607,297) . Such methods are not known to have been applied to form lithiated products or to form products without oxygen abstraction from the precursor. The methods described with respect to the present invention provide high quality products which are prepared from precursors which are lithiated during the reaction without oxygen abstraction.

This is a surprising result. [ 103 ] Then on page 61: The convenience and energy efficiency of the present process can also be contrasted to known methods for forming products under reducing atmosphere such as H 2 which is difficult to control, and from complex and expensive precursors. [ [64] ] In the present invention, carbon is the reducing agent, and simple, inexpensive and even naturally occurring precursors are useable.

For example, it is possible to produce LiFePO 4 from Fe 2 O 3 , a simple common oxide. [ 104 ] The parties are agreed that all the elements mentioned in independent claim 3 whatever their meanings are essential.

The Court agrees. [ 105 ] In their agreed list of issues, the parties included the meaning of the word ​carbon​ and of the expression ​incorporating carbon into said mixture​. [ 106 ] Also, even though this was not in the agreed list of issues and was only made clear during the final arguments, [65] Phostech argues that considering the amount of carbon to be included ​ in Phostech​s view a stoichiometric quantity ​ and the requirement that the reaction be carried out in the presence of such carbon, it is also an essential element of the claim that carbon be the only reducing agent used in the process. [ 107 ] From my review of the disclosure and all the claims, it appears that the invention set out in the ​115 Patent can be summarized as: an improved method where selective CTR is used to make lithium mixed metal compounds (such as LiFePO 4 ) that could contain conductive carbons intimately mixed in the final product of the reaction.

Thus, a feature of the invention is that carbon can have a dual role ​ enabling the use of cheaper metal-containing compounds with a valency that will be reduced by CTR and increasing the conductivity of the end product. [ 108 ] The particular monopoly claimed in claim 3 relates more specifically to the use of carbon or CTR to make a ​lithium mixed metal polyanion​. [ 109 ] Here, ​polyanion​ will be understood in its usual and customary meaning requiring at least two anion species, that is, multiple elements and an overall negative charge such as in phosphate (PO 4 ) 3- . [ 110 ] It is agreed that the requirement for the precursors or starting materials to be in ​particle form​ means that the lithium and the transition metal(

s) containing compound can be in various forms such as crystals, granules or powders and that the posita would understand that they need to be sufficiently small to permit them to be reactive. [ 111 ] Turning now to the issues in dispute. Dr. Whittingham opined that the word ​carbon​ means carbon in particulate form or particles of carbon. He notes that ​carbon​ must necessarily refer to solid carbon and that the form customarily used in the industry in

making lithium batteries was carbon black powder. He thus assumes that this was what the inventor had in mind particularly in light of example 9, which uses Shawinigan Black. However, Dr. Whittingham appears to agree although reluctantly [66] that the reference to a binder that would ​carbonize​ at page 13 implies that the residue which includes carbon would be in particulate form. Still, according to him, it would be excluded from the claim unless it was added in that form to the mixture of starting materials. For all practical purposes, except for the fact that claim 3 covers only polyanion compounds, Dr.

Whittingham construed independent claim 3 exactly like independent claim 1 which expressly provides that carbon in particle form must be a starting material. [ 112 ] Dr. Whittingham also opines that the posita would read claim 3 as requiring that the carbon be added in the exact amount required to reduce one of the transition metals, that is, in a stoichiometric proportion. [ 113 ] For Valence , ​carbon​ is not restricted to a form where it is elemental or pure carbon for there is no specification as to the source or provenance of the carbon in the claim.

The claim only requires that the reduction take place in the presence of this carbon. For Dr. Cairns, it is clear that ​carbon​ would be construed by a posita to include not only carbon black powder but also, among other things, [67] the carbon in the residue referred to in page 13 of the disclosure which results from the pyrolysis of binders such as hydrocarbon mineral oil and polymers which are expressly said to ​carbonize​. Drs. Dahn and Morgan share this view. [ 114 ] Dr.

Dahn [68] testified that ​incorporating carbon into said mixture​ only means to a posita that you have to add carbon to the reaction mixture to perform the necessary reduction and it really doesn​t matter how the reducing carbon gets in there. It could be done directly in the form in which it will react or via a precursor material such as a binder (including a polymer) which would yield carbon in a form that can be used in the CTR. Dr.

Dahn contrasts the wording of claims 2 and 3, for example, where in claim 2 the carbon is mixed in the starting material in particle form whereas in claim 3, the language indicates that it could be added in any way possible, not only in particle form. Dr. Cairns and Morgan again supported this

interpretation. [ 115 ] It is not disputed that the posita would understand that in carrying out the selective CTR the ​carbon​ must be intimately mixed with the starting material before the reduction starts and he or she would know that the carbon, whether included in particle form before the mixture was heated or in particle form before the reduction starts as a result of the decomposition of a polymer, would be equally capable of carrying out the CTR. [ 116 ] The Court notes that independent claim 108 covers a composition prepared by the process described in very similar words as claim 3.

Claim 109 (dependent on claim 108) is restricted to a composition prepared by the process where carbon in powder form is used implying that ​carbon​ in independent claim 108 comprises more than that form. [ 117 ] The explanation given by Phostech​s counsel to justify interpreting the different language used in claim 1 versus claim 3 or claim 25 versus claim 26 is not convincing.

Although it is evident that these claims cover embodiments, that can be distinguished on other grounds, this in and of itself does not explain why the inventor chose such different wording to describe the carbon and how it is used in the process. [ 118 ] The Court notes that Dr. Whittingham appears to have used his knowledge and understanding of the ​366 and ​918 Patents to confirm or come to his understanding of claim 3 (and later his view on claim 26 which will be discussed below in the ​366 Patent). [69] One cannot use external sources of this kind to construe a patent. Also Dr.

Whittingham reluctantly admitted in cross-examination that in the end, the posita would understand that ​carbon​ referred to in claim 3 must be in a form where it is capable of performing CTR. [70] [ 119 ] ​Carbon​ is a wide term. The fact that carbon black in powder form is what first comes to mind because it is used in making cathode cells or because it is used in example 9 and appears to be one of the preferred forms is not sufficient to justify limiting the claim in the manner proposed by Dr.

Whittingham, especially when it is clear and was known that it makes no difference to the carbon​s ability to reduce in CTR. [71] Having considered the expression in its entire context, the Court prefers the construction proposed by Drs. Cairns, Dahn and Morgan [ 120 ] This leaves only one issue: whether or not claim 3 requires as one of its essential elements that carbon be the sole reductant used in the process. [ 121 ] It is evident, in my view, that, in fact, this claim only refers to the minimum amount of carbon that should be incorporated prior to carrying out the reduction.

One only needs to consider the dependent claims 52 and 53 which necessarily cover embodiments included in claim 3 in order to conclude that the

interpretation proposed by Dr. Whittingham is not tenable in this particular

context. In effect, those dependent claims refer to processes where the carbon added is in excess of the stoichiometric amount by as much as 100%. [ 122 ] I t is not disputed that the only reductant claimed is carbon. However, the claim as drafted only describes it in the portion which follows the introductory comment ​the improvement comprising:​ along with the features that are new.

This signals that there may be other non-essential elements used in conjunction with the essential elements of the method claimed. [72] For example, there is no mention of the gaseous atmosphere the posita would be expected to use in carrying out the CTR. All the experts agreed that as mentioned in the disclosure (para. 90 above), a posita would normally use a non-oxidizing atmosphere.

This includes an inert gas, vacuum or a reducing atmosphere (more expensive and sometimes more difficult to control) although the use of the latter is not necessary, it is clearly acknowledged that one may still choose to use it. [ 123 ] I am also satisfied that the posita would know that some gases will be produced when the binder or solvent referred to on page 13 of the ​115 Patent either evaporates or carbonizes. [73] Also, the posita would know that if one uses a hydrated compound as a starting material, such as a dihydrated phosphate, water would evaporate to produce H 2 O gas. [ 124 ] The Court accepts Dr.

Dahn​s evidence that CTR itself generates gases (such as CO) that will contribute to the reduction reaction.

In fact the disclosure itself indicates that depending on the temperature of the reaction, different gases will be produced such as CO, CO 2 or a combination thereof. [74] [ 125 ] All this to say that the posita could expect that by using certain embodiments covered by claim 3, some gases, including in certain cases a reducing atmosphere used as a non-oxidizing environment, may well contribute to the reduction of metal ions in the metal-containing compound even when one uses the CTR method described in claim 3. [ 126 ] Obviously, this does not mean that claim 3 would cover a method where one used a reducing atmosphere or another reducing agent to reduce all or most of the metal ions in the metal compound before the CTR process described in claim 3 can occur.

For example, if one were to use a reducing atmosphere of hydrogen in conditions (time, temperature, quantity) where it is clear that the hydrogen will reduce the valency of the metal-containing compound well before the claimed process can take place. [ 127 ] There are also many variants between those extremes that could occur. The Court is not willing to venture as to where one should draw the line considering that the evidentiary record before me is neither adequate nor sufficient to do so.

Had Phostech made its position clear before the closing of evidence, especially when the Court expressly sought clarification in this respect, the Court would have insisted on obtaining better evidence from the experts. As the matter stands now, more precise

interpretation of claim 3 is better left to another day when the expert evidence deals with this issue in a more satisfactory manner. [ 128 ] Based on the foregoing and considering the expert evidence before me, the Court concludes that it is not an essential element of claim 3 that each and every ion of the metal-containing compound be reduced by the carbon described in the claim. v. The ​366 Patent [ 129 ] As mentioned, the ​366 has the same disclosure as the ​115, with the exception of the additional pages 20o to 20r. It ends with 82 claims. [ 130 ] The only independent claim to be construed is claim 26.

It reads as: A method for the synthesis of a Li metal compound of the formula Li a MI 1-y MII y (XO 4 ) d wherein the lithium of the metal compound is inked by being nucleated or bound to carbon, a is greater than 0 but less than or equal to 3, and y is greater or equal to 0 and less than or equal to 1, d is greater than 0 and less than or equal to 3, X is P, S or Si, MI is a transition metal or a mixture of transition metals selected from the group consisting of Fe, Co, Ni, Mn, Cu, V, Ti, and Cr, and MII is an element with fixed valency selected from the group consisting of Mg, Ca, Zn, Sr, Pb, Cd, Sn, Ba, Be, and mixtures thereof, by bringing into

equilibrium for a thermal synthesis, a mixture containing at least one precursor of

a) a source of the element MI, at least part of said transition metal or metals that constitute MI being in an oxidation state greater than that of the metal in the compound of the above formula;

b) a source of the element MII;

c) a compound that is a source of the element lithium;

d) a compound that is a source of the element XO 4 if the element X is not present in another compound or source;

e) a source of carbon, said at least one precursor of said sources (

a) to (

d) being present in the mixture in proportions required to form the lithium metal compound, and said at least one precursor having one or more additional elements other than the elements of (

a) to (d), said method comprising effecting the thermal synthesis reaction between said at least one precursor of said mixture in a gaseous atmosphere to reduce the valency of the transition metal or metals to a desired valency and including the step of controlling the composition of the gaseous atmosphere, the temperature of the reaction and the relative amount of the source of lithium proportionately to the sources of (a), (

b) and (d), said method comprising at least one thermal step to heat said source of carbon and to decompose or transform the same, and to obtain said mixed metal compound having electrical conductivity. [ 131 ] There is no disagreement that except for MII, each stated element is essential. There is a dispute as to the meaning of the words ​source of carbon​ and ​additional elements​ and as to what is the reducing agent in the asserted claim. [ 132 ] Other issues relating to construction raised by Dr.

Whittingham in his initial report [75] such as those relating the expressions ​mixed metal compound having electrical conductivity​ and ​decompose or transform​ were abandoned by Phostech before the end of the oral arguments. [ 133 ] Dr. Whittingham opines that ​a source of carbon​ would normally be construed as carbon itself or a compound containing carbon. However, given that sub-paragraph (

e) does not include the words ​a compound that is a source of​ as in sub-paragraph (

c) and (

d) of the claim, it is to be limited to carbon itself and not to a compound containing carbon. According to Phostech​s expert, the specification and the examples do not support any other construction. [ 134 ] This is disputed by Valence whose experts stated that the posita would understand that this is referring to carbon itself or any carbon-containing material such as those that can yield carbon in a form that can achieve the CTR.

In reaching this conclusion, they considered among other things the other portion of the claim which refers to ​one thermal step to heat said source of carbon and to decompose or transform the same​. Although the term ​source of​ is not used per se in the disclosure, this step would be understood as including what is described on page 13 of the specification ( i.e. a binder that decomposes to form a carbon residue). Here again, Valence experts do not construe this expression as being limited to carbon in a particle form. [ 135 ] In respect of the ​thermal step​ referred to above, Dr.

Whittingham agreed that this would be understood as a step which would heat the ​source of carbon​ causing it to change its chemical composition (decompose) or transform. Dr. Whittingham also acknowledged that there is support (albeit this is the only instance) for a source other than carbon itself at page 13 of the specification. [ 136 ] According to Dr. Dahn, this thermal step is to enable the carbon to reduce the metal and to make the reaction product (final compound) conductive. This is disputed by Dr.

Whittingham who understands that this source of carbon will only be used as residual carbon in the final product. His view is based on the description of embodiments found on pages 20o to 20r of the disclosure where the process described includes the use of a binder or volatile solvent as well as carbon in particle form. [ 137 ] With respect to the ​additional element​, there is no dispute that this refers to an element that participates in the overall reaction, but does not become part of the final product because of the formula referred to at the beginning of claim 26. According to Dr.

Cairns, this emphasizes the point that one uses a compound as opposed to pure elements. [76] This requires the inclusion of one element of the periodic table that is not MI, MII, Li, XO 4 to be present in one of the precursor materials described in sub paragraph (

a) to (

d) of the claim. An example of this would be when the source of lithium (

c) is lithium carbonate. Carbon and oxygen in the lithium carbonate would be ​additional elements​. For Dr. Cairns, this ​additional element​ could be carbon that could function as a reducing agent but it is not necessarily so in all embodiments covered. All are agreed that the meaning of this term would be the same in all claims (such as claim

1). [77] [ 138 ] Dr. Whittingham​s opinion that this expression necessarily refers to carbon is based on his view that there is no other information about this additional element in the disclosure. He also notes that in claim 1 the additional element must be carbon for there would be no other reductant listed in that claim apart from the reducing atmosphere. It would thus appear to be wider than the invention for it would not involve CTR.

However, Phostech acknowledged that whether or not a claim should fail for insufficiency or because it is broader than the invention is not relevant at this stage, the Court must construe the claim without regard to its validity. [ 139 ] The Court finds that the

interpretation of ​source of carbon​ proposed by Valence​s experts is more in line with the context in which one must read claim 26 particularly having regard to the structure of the claims that follow. In effect, although as a whole the claims are not particularly well written and one can detect many overlaps if not redundancies, the Court cannot simply ignore them as Dr. Whittingham appears to have done. [ 140 ] In this case, claims 33 to 36, which are all dependent on claim 26, each cover specific type of sources of carbon such as: a. The source of carbon is carbon or a precursor thereof (claim 33); b.

The source of carbon comprises a polymer (claim 36); c. The source of carbon contains a source of oxygen and hydrogen which are chemically bound (claim 34); d. The source of carbon is a polymer or mineral oil which is capable of degradation at the stated temperature (claim 35). [ 141 ] As one can appreciate, in this context, to construe the source of carbon as referring exclusively to solid carbon, as proposed by Dr. Whittingham, makes little sense. [ 142 ] As to the ​additional elements​, the Court again prefers the

interpretation proposed by Dr. Cairns as it is more in line with the wording of the claim itself which does not appear to contain any ambiguity [78] unless one considers issues of invalidity such as insufficiency or overbreadth. [ 143 ] The ​gaseous atmosphere​ refers a non oxidizing atmosphere that can include, as dependent claim 29 illustrates, a reducing or neutral atmosphere. The reducing atmosphere may include CO (claim 42), CO in the presence of a neutral gas (claim 44) or CO mixed with CO 2 (claim 46).

Furthermore, as mentioned in claim 49, the reducing atmosphere may be obtained by the thermal decomposition of the source of carbon which generates CO, or a mixture of CO/CO 2 with water vapour. [ 144 ] As mentioned earlier, the Court is satisfied that the posita would understand that some of these gases may evolve from either the decomposition of certain binders or volatile solvents mentioned on page 13 of the patent or the CTR reaction. [ 145 ] In this context, the Court finds that the reducing agent(

s) in the ​366 Patent, particularly claim 26, include the source of carbon and the reducing atmosphere which may comprise gases evolving from the decomposition of the source of carbon or during CTR and externally applied gases such as CO/CO 2 with or without neutral gases. [ 146 ] Finally, the Court finds that the expression ​linked by being nucleated or bound to carbon​ would be understood by a posita, not as referring to only the formal molecular bond between the lithium and carbon proposed by Dr. Whittingham, but rather, as explained by Dr. Morgan and Dr.

Dahn, to the fact that the lithium iron phosphate would be intimately associated or attached to the carbon. The word ​nucleated​ is qualified by the words ​linked​ and ​bound​ and the fact that the inventor on page 8, lines 22 to 23 of the disclosure was only formulating a hypothesis (​thought​). [79] As explained by Dr. Dahn, the coating referred to in claim 31 is only one such type of attachment or bond.

vi. The ​918 Patent a. Common General Knowledge for the ​918 Patent [ 147 ] In addition to the common general knowledge described above in respect of the ​115 and ​366 Patent, the Court is satisfied that what is generally disclosed in the ​119 Patent and the series of articles published before 2003 in relation thereto was part of general knowledge on or before December 2003. [ 148 ] As mentioned by Dr.

Cairns, I also accept that a posita would have known that most of the polymers decompose below 400 o C by that date. [ 149 ] There is insufficient evidence for the Court to conclude that the content of the original application for the ​115 Patent, although clearly part of prior art published at the time had become part of the common general knowledge. b. The patent [ 150 ] The ​918 Patent is entitled ​Synthesis of Metal Compounds Useful as Cathode Active Materials​ and its 57-page disclosure ends with 12 claims.

The parties are agreed that the Court only needs to construe claim 1 which is the only independent claim in this patent. It reads as follows: 1.

A solid state method for synthesizing an inorganic metal compound, comprising the steps of: combining starting materials comprising at least one particulate metal compound and at least one organic material to form a mixture; and heating the mixture at a temperature to form a reaction product, wherein upon heating, the at least one organic material decomposes to form a decomposition product containing carbon in a form capable of acting as a reductant, wherein at least one metal of the starting materials is reduced in oxidation state during heating to form the inorganic metal compound. [ 151 ] There is no dispute as to the meaning of this claim or the invention described in the patent.

The parties have also agreed and so does the Court that all the elements of Claim 1 are essential. Although the Court has clearly gone through the disclosure very carefully, in light of the above, it is not useful to discuss the disclosure in these reasons.

It is also worth mentioning that the language indicates that carbon need only be a reductant (see paras 12 and 18 of the disclosure), which does not preclude the use of a gaseous atmosphere that participates in the reduction. [80] [ 152 ] Claim 1 covers a wider variety of precursor materials (including organic compounds) and a wider range of materials produced by the synthesis. For example, there is no requirement that such products include lithium or PO 4 . 2.

Infringement [ 153 ] It is not disputed that Valence has the burden of proof and that it must establish on a balance of probability that the process used by Phostech includes all the essential elements of at least one claim in the patent at issue. [ 154 ] Since the beginning of these proceedings, Phostech​s position has been that its process does not involve any CTR. Also, that there is no ​carbon​ (in particle form) in its starting materials or incorporated into them.

Thus, there can be no infringement of the ​115 Patent. [ 155 ] It has been established that the starting materials of the P1 Process are pellets of fine particles [81] of lithium carbonate (Li 2 CO 3 ) and a ferric phosphate (FePO 4 ⋅ 2H 2

O) mixed and coated with a polymer ​ a binder that carbonizes at a temperature below

400 o C leaving a carbon residue mixed into the aforementioned starting materials before the reaction is carried out in the presence of such carbon. [ 156 ] Dr. Dahn calculated the amount of carbon which should be present in the residue left at the end of the polymer decomposition (pyrolysis or carbonization) and was satisfied that there was enough to reduce the iron in the ferric phosphate used in the P1 Process from Fe 3+ to Fe 2+ . This is not contested. [ 157 ] There is no dispute that the Phostech final product contains between 1% to 2% residual carbon. [ 158 ] In light of the construction adopted by the Court, on its face, the P1 Process includes all the essential eleme

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