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DSM IP Assets, B.V. v. Lallemand Specialties, Inc.

United States District Court, W.D. Wisconsin

March 22, 2018

DSM IP ASSETS, B.V. & DSM BIO-BASED PRODUCTS & SERVICES, B.V., Plaintiffs and Counter-Defendants
LALLEMAND SPECIALTIES, INC. & MASCOMA LLC, Defendants and Counterclaimants.

          OPINION & ORDER


         In this lawsuit, plaintiffs DSM IP Assets, B.V. and DSM Bio-Based Products & Services B.V. (collectively “DSM”) claim that Lallemand Specialties, Inc. and Mascoma LLC (collectively “Lallemand”) are infringing U.S. Patent No. 8, 795, 998 (the “'998 patent”). Before the court are the parties' cross motions for claims construction and summary judgment, with plaintiffs seeking summary judgment on defendants' anticipation defense, and defendants seeking summary judgment on their indefiniteness defense and plaintiffs' claim of infringement. (See dkts. ##59, 72, 64.) The court held an “expert colloquy” on Friday March 16, 2018, at which the parties' experts made brief presentations and were guided through a discussion with the court's neutral expert (see dkt. #144) regarding proposed claim constructions (dkt. #151) and the issues before the court at summary judgment, followed by cross-examination by the parties' counsel. Having considered the parties' extensive written submissions, expert reports and colloquy presentations, along with additional argument of counsel and the record as a whole, the court will now issue its final claims constructions, grant plaintiffs summary judgment on anticipation and indefiniteness, and deny defendants' motion for summary judgment on infringement.


         A. Parties

         Plaintiffs are Netherlands corporations that have their registered places of business in The Netherlands. DSM Bio-Based Products & Services is a “pioneer” “in biomass conversion” and develops “bioconversion technologies” for the “biofuels industry.” 2017 Review of Business, DSM, center.html#H4794108691 (last visited Mar. 13, 2018). DSM IP Assets, B.V. is the holding company for DSM's intellectual property. Lallemand is a Minnesota corporation that has its principal place of business in Milwaukee, Wisconsin, while Mascoma is a Delaware LLC, with its principal place of business in Lebanon, New Hampshire. Lallemand “specializ[es] in the development, production, and marketing of yeasts and bacteria, ” while Mascoma is “a leader in advanced bioconversion products.” See At a Glance, Lallemand, (last visited Mar. 13, 2018); Overview, Mascoma, (last visited Mar. 13, 2018).

         B. Enzymatic Activity

         A chemical agent that increases the rate of reaction without being consumed by the reaction is a catalyst. Enzymes are the most common biological catalysts. The rate at which a reaction produces its end product is the rate of catalysis.[2] (Defs.' Resp. to Pls.' PFOF (dkt. #80) ¶ 21.) The rate of catalysis of an enzymatic reaction can be impacted by various conditions, including “changes in the concentration of substrate, enzyme, and/or other molecules that can bind to enzymes, pH, and temperature, and other cellular mechanisms.” (Id. ¶ 22.) For instance, increasing the concentration of substrate increases the reaction rate of an enzyme-catalyzed reaction until it reaches the saturation level.

         Cells modify specific enzyme activity based on the cell's production needs through allosteric regulation, covalent modification of enzyme structure, and inhibition. A cell's production of enzymes involves the expression of genes and then translation into an active enzyme. While genetic expression produces enzymes, their activity is not solely dependent on expression. After an enzyme is produced, it can be modified by chemical reactions such as thiolation, methylation, phosphorylation, and acetylation. Enzymes can also be impacted by temperature and pH. For instance, each enzyme has a specific pH at which it operates most efficiently; the optimal pH depends on ionizable amino acid residues. The enzyme can become denatured by a change away from its optimal pH due to changes in the amino acids' ionization states. As for temperatures, from 0˚C to approximately 40˚C, enzymatic reaction rates tend to double for every 10˚C increase in temperature, but at some point increasing temperature causes denaturation of enzymes, decreasing the reaction rate. (See Pls.' Reply to Defs.' Resp. to Pls.' PFOF (dkt. #92) ¶¶ 25-26, 28-30, 87-90.)

         The Nomenclature Committee of the International Union of Biochemistry and Molecular Biology assigns “EC” numbers, which categorize enzymes based on the reactions they catalyze. For example, one of the principle enzymes at issue here is categorized as “EC, ” which refers to the catalysis of the conversion of acetyl-Coenzyme A to acetaldehyde; an enzyme that performs this task is also referred to as NAD+dependent acetylating acetaldehyde dehydrogenase activity.

         C. Ethanol Production

         The largest industrial biotechnology fermentation process is ethanol production. The parties agree that Saccharomyces cerevisiae, a species of yeast, produces ethanol by fermenting glucose obtained from raw material, like corn, as illustrated here:[3] (IMAGE OMITTED) In the production of ethanol, the NADH created by the conversion of glyceraldehyde-3-phosphate to pyruvate is used in the creation of ethanol from acetaldehyde. Where redox imbalance exists (i.e., where there is excess NADH), cell growth and ethanol production are impeded. Thus, yeast cells also produce glycerol to consume unused NADH as the main pathway for intracellular redox balance. In that reaction, dihydroxyacetone phosphate (“DHAP”) is reduced to glycerol-3-phosphate (“G-3-P”) via NAD+dependent glycerol-3-phosphate dehydrogenase (“GPD”), which involves oxidizing NADH into NAD.[4] The G-3-P is hydrolyzed creating glycerol and inorganic phosphate by glycerol 3-phosphate phosphatase (“GPP”).[5]

         Importantly, glycerol is considered a waste byproduct of ethanol production because it uses some of the glucose that could go toward additional ethanol production. This is no small problem because in industrial-scale ethanol production, glycerol production can decrease ethanol yield by millions of gallons. At the colloquy, the experts agreed that for a yeast cell under anaerobic conditions, eliminating GPD2 would decrease -- but not eliminate -- glycerol production compared to a yeast cell with GPD2, all other things being equal.

         D. The '998 Patent

         1. Overview and Prosecution History

         The '998 patent, entitled “Fermentative Glycerol-Free Ethanol Production, ” was filed July 18, 2011 and issued on August 5, 2014. The listed inventors are Jacobus Thomas Pronk, Antonius Jeroen Adriaan Van Maris, and Victor Gabriel Guadalupe Medina. The only assignee listed is Technische Universiteit Delft.

         In response to an Office Action, the patent applicants explained that the invention “provides a yeast cell that actually grows preferentially in the presence of acetate, ” which was unique because the prior art did not suggest modifying a yeast cell to make it a net consumer of acetate so that it could use “acetate as an electron acceptor to reoxidize NADH, ” thereby reducing the necessity of glycerol synthesis. (May 2, 2013 Amend. & Resp. to Office Action (dkt. #62-12) 8.) These features, the applicants argued, distinguished the claimed invention from Valadi's work by taking “advantage of the presence of acetate, ” while “the Valadi yeast still generates the undesired acetate contaminant as a product of its metabolism.” (Id.) Unlike Valadi, which diminished the NADH-dependent glycerol synthesis, the claimed invention consumed acetate and supplied NAD+dependent acetylating acetaldehyde dehydrogenase -- an alternate NAD generation pathway. (Id. at 10.) Further, the applicant explained that

Sonderegger, as is recognized by the Examiner, is focused on the phosphoketolase circuit that is an alternate route for pentose-based metabolism. The phosphoketolase pathway generates acetyl phosphate and thus it is necessary to employ both phosphotransacetylase as well as acetyl acetaldehyde dehydrogenase to generate NAD. This approach is dependent on a pentose metabolism pathway, unlike the present invention, and it depends on acetate generated by the metabolism of xylose, and does not address the presence of acetate from external sources.

(Id. at 8.) The examiner found this explanation “persuasive” for claim 7, which became term 4 in claim 1. (See Aug. 1, 2013 Office Action (dkt. #47-74) 49); Oct. 30, 2013 Amend. (dkt. #47-75) 3-6; Not. Allowability (dkt. #47-75) 17-18.)[6]

         2. Objectives and Specifications

         a. The Claimed Yeast Cells

         The patent at issue discloses transgenic yeast cells that reduce or completely lack “enzymatic activity needed for the NADH-dependent glycerol synthesis” as compared to wild-type yeast cells. ('998 Patent (dkt. #1-1) 2 (Abstract).) Specifically, the yeast cells either reduce or eliminate the activity of GPD or GPP. (See Id. at 40 (67:20-28).) The cells also contain acetylating acetaldehyde dehydrogenase activity (EC, alcohol dehydrogenase (EC and acetyl-Coenzyme A synthetase (EC, permitting the conversion of NADH to NAD, which provides a metabolic pathway that complements the deletion of glycerol synthesis. Thus, the patent provides two methods of reducing NADH-dependent glycerol synthesis.

         The claimed transgenic yeast cells convert acetate or acetic acid into ethanol through three different, enzymatic reactions using acetyl-CoA synthetase (EC, aadh (EC, or alcohol dehydrogenase (EC[7]

         (IMAGE OMITTED)

         The patent specifies aldehyde/alcohol dehydrogenase enzyme (“AdhE”) as a “bifunctional protein” that performs EC activity from Escherichia coli, Staphylococcus aureaus and Piromyces sp.E2. A bifunctional protein is one that catalyzes two reactions.

         b. Blomberg Assay & HPLC Analysis

         At the heart of defendants' request for summary judgment on indefiniteness is the Blomberg assay. In the section titled Enzyme Activity Assays, the patent details that “Glycerol-3-phosphate dehydrogenase activities were assayed in cell extracts at 30˚ C. as described previously (Blomberg and Adler (1989), J. Bacteriol. 171:1087-1092.[)]” ('998 Patent (dkt. #1-1) 16 (20:37-40.).) The Blomberg assay is used to measure GPD activity through the measurement of substrate consumption. At the colloquy, the experts agreed that the Blomberg assay relies on the measurement of NADH. The parties agree that it can be used to measure GPD1 activity, but disagree whether it can be used to measure GPD2 activity.

         Lallemand attempted to test the GPD2 activity of the accused products by removing EDTA from the Blomberg assay buffer solution.[8] In his role as a retained expert for this case, Professor Winge directed Lallemand to make three modifications to the assay, which he believed would stabilize GPD2: (1) maintain the pH at 7.5, (2) provide magnesium, and (3) provide a reductor for GPD2's cystines. The parties disagree about the scientific validity of these modifications, and Winge acknowledged at the colloquy that there were no published scientific articles or studies supporting his modifications to the Blomberg assay to stabilize the GPD2 activity, nor did he run any regression analyses to try to confirm his opinion.

         In the section titled Metabolite Analysis, the patent describes how “[s]upernatant obtained by centrifugation of culture samples was analyzed for glucose, acetic acid, succinic acid, lactic acid, glycerol and ethanol via HPLC analysis.” (Id. at 16 (19:65-67); see also Id. 19:67-20:19 (describing HPLC analysis with a Waters Alliance 2690 HPLC).) The parties agree that HPLC analysis can be used to measure the rate at which glycerol is produced during fermentation and that it is disclosed in the patent. At the colloquy, Winge opined that measuring the glycerol production was inappropriate because there was not a direct correlation between concentrations of GPD and glycerol. However, he also agreed that current technology did not support more accurate means for testing, like carbon tracking in vivo. Moreover, the experts agreed at the colloquy that so far there is no way to currently measure GPP activity or G-3-P production because the GPP enzymatic reaction (EC converting G-3-P to glycerol happens so quickly.

         E. Sun Patent

         Lallemand asserts that the '998 patent was anticipated by International Publication No. WO 2009/111672, which the parties refer to as “Sun, ” after the lead inventor, Jun Sun. The Sun patent discloses “a non-naturally occurring microbial organism that includes one or more gene disruptions occurring in genes encoding enzymes that couple long-chain alcohols (LCA) production to growth of the non-naturally occurring microbial organism.” (Sun Patent (dkt. #55-2) 4 (2:23-26).) Specifically, the microorganisms are designed to create LCA using “a malonyl-CoA-independent fatty acid synthesis (FAS) pathway and an acyl-reduction pathway.” (Id. (2:6-7); see also Id. at 116 (114:2-5).) Sun explains that “some embodiments” contain “one or more gene disruptions in the eukaryotic organism encoding an enzyme, ” such as “a glycerol-3-phospate dehydrogenase shuttle[ or] an external NADH dehydrogenase.” (Id. at 61-62 (59:24-60:3).) The cells “disrupt[] . . . the glycerol-3-phosphate dehydrogenase shuttle.” (Id. at 63 (61:26-28); id. at 64 (62:13-14) (“In some embodiments, the ethanol-specific alcohol dehydrogenases is disrupted to prevent ethanol formation.”).) Further, some embodiments detail “a non-naturally occurring eukaryotic organism [that] uses a heterologous acetaldehyde dehydrogenase (acetylating).” (Id. at 69 (67:15-16).) Sun specifies “exemplary bacteria” and “[e]xemplary yeasts or fungi” that can be chosen to be the “[h]ost microbial organism[], ” including Saccharomyces cerevisiae. (Id. at 32-33 (30:27-31:2).)

         As defendants' expert, Professor Winge compared the claim elements of the '998 patent with the disclosures in Sun. His analysis can be summarized as follows:[9]


Required Element

Sun References


Transgenic yeast cells comprising one or more recombinant heterologous, nucleic acid sequences encoding a protein with NAD+dependent acetylating acetaldehyde dehydrogenase activity (EC

2:23-24; 30:27-31:2; 59:24-60:11; 67:15-25


wherein said cells lack enzymatic activity needed for the NADH dependent glycerol synthesis, or said cells have a reduced enzymatic activity with respect to the NADH-dependent glycerol synthesis compared to a corresponding wild-type yeast cell, and

59:24-60:11; 61:1-62:2; 62:3-22; 65:23-27; 68:5-30


wherein said cells are free of NAD-dependent glycerol 3-phosphate dehydrogenase activity or have reduced NAD-dependent glycerol 3-phosphate dehydrogenase activity compared to corresponding wild-type cells, and/or

59:24-60:11; 61:1-62:2; 62:3-22; 65:23-27; 68:5-30


wherein the cells are either free of glycerol phosphate phosphatase activity or have reduced glycerol phosphate phosphatase activity compared to corresponding wild-type cells, and

59:24-60:11; 61:1-62:2; 62:3-22; 65:23-27; 68:5-30


which comprise a genomic mutation in at least one gene selected from the group consisting of GPD1, GPD2, GPP1 and GPP2, and

59:24-60:11; 61:1-62:2; 62:3-22; 65:23-27; 68:5-30


wherein said cells further comprise one or more nucleic acid sequences encoding an acetyl-Coenzyme A synthetase activity (EC and

61:1-62:2; 62:3-22; 114:2-9


one or more nucleic acid sequences encoding NAD+dependent alcohol dehydrogenase activity (EC

61:1-62:2; 62:3-22; 114:2-9


The cells of claim 1 are Saccharomycetaceae, Kluyveromyces, Pichia, Zygosaccharomyces, or Brettanomyces.



The cells of claim 1, wherein at least one said mutation is a complete deletion of said gene in comparison to the corresponding wild-type yeast gene

59:24-60:11; 61:1-62:2; 62:3-22; 65:23-27; 68:5-30

         Plaintiffs dispute that Sun discloses genetic modifications to the genes encoding GPD or GPP.[10] Plaintiffs also dispute whether: (1) Sun discloses a single embodiment with all the limitations of the asserted claims; and (2) Sun would have led a person of ordinary skill in the art to combine its teachings to create yeast cells for reducing the production of glycerol and increasing production of ethanol as disclosed in the '998 patent.

         F. Accused Products

         Defendants apparently offer for sale two genetically modified yeast cells, TFY and YP3, that are designed to reduce the production of glycerol. Both products contain nucleic acid sequences that encode an NAD+dependent alcohol dehydrogenase activity (EC TFY uses a transgenic S. cerevisiae to produce ethanol through the fermentation of partially or totally liquefied grains. Lallemand explains that TFY increases the production of ethanol by: (1) reducing glycerol production; (2) improving yeast's tolerance of industrial fermentation conditions; and (3) reducing the need for glucoamylase (an enzyme that converts starch into glucose). The parties agree that glycerol production is reduced but not entirely eliminated, and that TFY also contains glycoamylase from S. fibuligera. Thus, the parties agree that the first and third methods of boosting ethanol production are present in the accused products, while DSM contends that Lallemand has not proven that the second method is present.

         The parties also agree that the yeast cells of TFY lack the GPD2 gene and are modified with genes from Bifidobacterium adolescentis, which “provide pyruvate formate lyase activating enzyme (pflA), pyruvate formate lyase (pflB), and the bifunctional acetaldehyde-CoA/alcohol dehydrogenase AdhE.” (Defs.' Reply to Pls.' Resp. to Defs.' PFOF (dkt. #95) ¶ 49.) Thus, TFY converts pyruvate to ethanol and oxidizes NADH to NAD. Internal Lallemand documents refer to TFY as strain M8841. Plaintiffs contend that Lallemand also sells strain M10156 as TFY to one customer.

         Derived from TFY, YP3 contains the same modifications. It was created to overexpress Stl1, a native glycerol transport protein. The parties disagree about the purpose of this overexpression: Lallemand contends that “[t]he purpose of Stl1 in TFY is to attenuate Gpd1 function by increasing the intracellular concentration of glycerol, ” while DSM contends that Lallemand's R&D documents show instead that the Stl1 glycerol transport protein's overexpression in YP3 “downregulates Gpd1 via feedback inhibition.” (Id. ¶ 60.) The parties agree that this modification decreases the amount of extracellular glycerol and helps the yeast remain osmotically balanced under stressful conditions. Internal Lallemand documents refer to YP3 as strain 12156.

         Additionally, the parties agree that a number of Lallemand's documents refer to “downregulat[ion], ” including “of the gpd1/gpd2 genes.” (See Defs.' Resp. to Pls.' Addl. PFOF ¶¶ 31-32; LAL00041342 (dkt. #47-48) 1; International Patent Publication No. WO 2012/138942 (dkt. #47-47) ¶ 150.) However, they disagree about what that means.

         G. Person of Ordinary Skill in the Art

         Finally, in the summary judgment briefing, the parties dispute what would qualify a person to be one of ordinary skill in the art, although that dispute does not appear to be material to their motions. Regardless, at the colloquy, the parties' experts agreed that in order for one to practice the patent, they would need a master's level understanding of biochemistry, or biological or mechanical engineering. They also agree that that person would require familiarity with the use of multiple enzymes in biochemical reactions, as well as background processes, and would have experience with metabolic flux. Therefore, the court finds that this is a reasonable floor for one with sufficient skill in the art to practice the invention, and that such an individual would understand the basic elements of the claims well enough to know when to consult others with the necessary specific expertise to implement some of the actual steps for industrial scale ethanol production through the use of modified yeast cells.



         As explained at the time of the court's earlier, proposed constructions, “‘the claims of a patent define the invention to which the patentee is entitled the right to exclude.'” Phillips v. v. AWH Corp., 415 F.3d 1303, 1312 (Fed. Cir. 2005) (en banc) (quoting Innova/Pure Water, Inc. v. Safari Water Filtration Sys., Inc., 381 F.3d 1111, 1115 (Fed. Cir. 2004)). For this reason, the right to exclude “begins and ends . . . with the actual words of the claim.” Renishaw PLC v. Marposs Societa' Per Azioni, 158 F.3d 1243, 1248 (Fed. Cir. 1998). The goal of claims construction “is to give claim terms the meaning understood by a person of ordinary skill in the art at the time of invention.” Mass. Inst. of Tech. v. Shire Pharms., Inc., 839 F.3d 1111, 1118 (Fed. Cir. 2016) [hereinafter MIT] (citing Phillips, 415 F.3d at 1312-14). While this includes “a heavy presumption that claim terms are to be given their ordinary and customary meaning, ” id. at 1118 (quoting Aventis Pharm. Inc. v. Amino Chems. Ltd., 715 F.3d 1363, 1373 (Fed. Cir. 2013)), this “meaning” is based on the understanding of a person of ordinary skill in the art after reading the entire patent, id. (quoting Phillips, 415 F.3d at 1321). See also Renishaw, 158 F.3d at 1250 (“Ultimately, the interpretation to be given a term can only be determined and confirmed with a full understanding of what the inventors actually invented and intended to envelop with the claim.” (citing Markman v. Westview Instruments, Inc., 517 U.S. 370, 389 (1996))).

         For patent claims in highly specialized fields of study, like that at issue here, “determining the ordinary and customary meaning of the claim requires examination of terms that have a particular meaning in a field of art, ” yet are “not immediately apparent, ” which requires the court to examine intrinsic and extrinsic evidence “‘concerning the relevant scientific principles, the meaning of technical terms, and the state of the art.'” Phillips, 415 F.3d at 1314 (quoting Innova, 381 F.3d at 1116).[11] Similarly, while the “ordinary meaning” inquiry remains “an objective baseline from which to begin claim interpretation, ” id. at 1313 (citing Innova, 381 F.3d at 1116), where a patent fails to explicitly define a disputed or arguably ambiguous term, the court may look to the patent as a whole, including its prosecution history, to determine that term's meaning, Wi-LAN USA, Inc. v. Apple Inc., 830 F.3d 1374, 1387 (Fed. Cir. 2016) (citing Phillips, 415 F.3d at 1315). See also Renishaw, 158 F.3d at 1248 (“The intrinsic evidence, and, in some cases, the extrinsic evidence, can shed light on the meaning of the terms recited in a claim, either by confirming the ordinary meaning of the claim terms or by providing special meaning for claim terms.” (citing Vitronics, 90 F.3d at 1583)). Still, claims construction is viewed as a question of law, Wi-LAN, 830 F.3d at 1381, reserved only for the court, Teva Pharms. USA, Inc. v. Sandoz, Inc., 135 S.Ct. 831, 835 (2015).

         Here, the parties dispute the proper construction of four terms, all found in claim 1. (See Joint Statement on Claims Construction (dkt. #44) 2-3; '998 Patent (dkt. #1-1) 40 (67:12-37).)[12] Plaintiffs claim that all four of their proposed constructions are faithful to the terms' “[p]lain and ordinary meaning[s], ” although even they put a gloss on certain terms, while defendants claim that some terms require further construction to be consistent with the claimed invention and prosecution history. (Joint Statement on Claims Construction (dkt. #44) 2-3.) With emphasis on the terms in dispute, Claim 1 specifies:

1. Transgenic yeast cells comprising one or more recombinant heterologous, nucleic acid sequences encoding a protein with NAD-dependentacetylatingacetaldehydedehydrogenaseactivity (EC, wherein said cells lack enzymatic activity needed for the NADH-dependent glycerol synthesis, or said cells have a reduced enzymatic activity with respect to the NADH-dependent glycerol synthesiscompared to a corresponding wild-type yeast cell, and wherein said cells are free of NAD-dependent glycerol 3-phosphate dehydrogenase activity or have reduced NAD-dependentglycerol3-phosphatedehydrogenaseactivity compared to corresponding wild-type cells, and/or wherein the cells are either free of glycerol phosphate phosphatase activity or have reduced glycerol phosphate phosphatase activity compared to corresponding wild-type cells, and which comprise a genomic mutation in at least one gene selected from the group consisting of GPD2, GPD2, GPP1 and GPP2, and wherein said cells further ...

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