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A Defendant Cannot Withhold Evidence Or Contend Evidence Is Unnecessary During Discovery But Argue At Trial That Plaintiff Cannot Meet Its Burden Of Infringement For Lack Of Such Evidence
09/23/2025Plaintiff Magēmā Technology LLC (“Magēmā”) sued Phillips 66, Phillips 66 Co., and WRB Refining LP (together, “Phillips”) asserting two patents related to making residual heavy marine fuel oil (“HMFO”) with low sulfur content. HMFO is used to power large, ocean-going cargo ships and must meet an internationally recognized standard known as International Organization for Standardization 8217:2017 (“ISO 8217”). Two physical properties set by ISO 8217 are relevant: first, the flashpoint for HMFOs must be at least 140 degrees Fahrenheit; second, the sulfur content cannot exceed the maximum amount imposed by the International Maritime Organization.
In 2016, the sulfur content limit was set to 0.5% by weight. Magēmā patented a solution to desulfurize HMFO and thus bring it under the 0.5% limit. The invention teaches making a high-sulfur HMFO compliant with ISO 8217 and then exposing the HMFO to hydrogen at elevated temperatures and pressures to reduce the sulfur content. This process of desulfurizing through hydrogen exposure is called hydroprocessing or hydrotreating.
The asserted claims require that the HMFO be compliant with ISO 8217 prior to the hydrotreating process, which standard requires a flashpoint of no less than 140 degrees Fahrenheit. Phillips would not infringe if the feedstock prior to the hydrotreating unit had a flashpoint of less than 140 degrees Fahrenheit. Magēmā wanted to test the flashpoint of the feed, in order to demonstrate infringement, but the parties could not agree as to the location of the testing. Magēmā moved to compel Phillips to test the flashpoint of the feedstock right before the hydrotreater reactor. But, at the motion to compel hearing, Phillips argued that it would be too dangerous to test or to produce samples at the requested location—although it would be discovered later that Phillips had the capability to do the testing and, in fact, had obtained such test results. Phillips also argued that Magēmā did not need test results because flashpoint temperatures can be estimated using a generally accepted formula, the Riazi Formula. As a result, the Magistrate Judge—who presided over the hearing—denied the motion to compel.
Right before jury selection, Magēmā learned that Phillips planned to use a demonstrative slide during opening statements to show the jury that—despite Phillips’ pretrial representations to the contrary—Riazi Formula estimates of flashpoint are insufficient to prove infringement. Phillips also planned to argue that, because Magēmā did not have actual testing data of the flashpoint, Magēmā could not meet its burden on infringement. Despite Magēmā’s objections, the district court did not exclude Phillips from presenting its actual-testing theory to the jury. Phillips thus presented its actual-testing theory in its opening and closing statements, as well as during the cross-examination of Magēmā’s witnesses.
At trial, Magēmā filed a motion for a curative instruction that the Riazi Formula could, in fact, be used to calculate flashpoint in the absence of testing samples—which Phillips said were too dangerous to collect. The district court denied Magēmā’s motion for a curative instruction. The district court held that Magēmā could argue to the jury that no actual testing was needed, and in response, Phillips could argue that the Riazi Formula estimates prepared by Magēmā’s expert were unreliable.
On a general verdict form, the jury returned a noninfringement verdict on all claims without specifying the basis for the noninfringement finding. Magēmā moved for a new trial, which the district court denied. The district court acknowledged that Phillips’ actual-testing theory was both improper and prejudicial, but found that the error was harmless and did not affect the outcome of the trial. The district court reasoned that the jury could have found that Phillips did not practice other elements of the claims whose absence was argued at trial.
On appeal, the Federal Circuit agreed with the district court that Phillips’ actual-testing theory was improper and prejudicial. But the Federal Circuit held that the district court abused its discretion in determining that allowing the actual-testing argument was harmless error. While the jury could have permissibly found that Magēmā did not meet its infringement burden as to the other claim elements, the jury could alternatively have impermissibly found that Magēmā did not meet its infringement burden because actual testing of flashpoint temperatures was required, as Phillips repeatedly urged. Because Phillips’ improper actual-testing theory may have tainted the jury’s verdict, the Federal Circuit reversed the district court’s order denying the motion for new trial and remanded for a new trial.
