The U.S. Court of Appeals for the Federal Circuit has affirmed an $85 million antitrust verdict against specialty chemicals company Ingevity Corp., leaving intact a Delaware jury’s finding that the company improperly tied patent licenses to purchases of its carbon filtering products.
In a precedential opinion issued Wednesday, a three-judge panel rejected Ingevity’s effort to overturn the judgment in favor of BASF Corp., which brought antitrust counterclaims after being sued for patent infringement. BASF alleged that Ingevity conditioned licenses to a patent covering automobile emissions-control technology on customers also buying the company’s unpatented carbon “honeycomb” filters, a practice it said restricted competition.
At the center of the appeal was whether Ingevity qualified for a patent misuse defense that can protect patent holders from antitrust liability when tying arrangements are used to guard against contributory infringement. The defense applies only if the tied products are considered “nonstaple” goods that lack substantial noninfringing uses.
Jurors concluded that Ingevity’s honeycomb filters did not meet that definition. The evidence showed the products could be used in multiple applications outside the patented system, including air-intake and induction systems, making them staple goods that are widely usable in lawful ways. The Federal Circuit said that finding was supported by sufficient evidence and would not be disturbed.
“Viewing the evidence under the proper legal standard, the jury reasonably found that the accused products had substantial non-infringing uses,” the court wrote, adding that such uses defeat the company’s attempt to claim statutory protection.
Ingevity argued that BASF failed to prove customers actually used the filters in noninfringing configurations. The panel disagreed, pointing to sales records reflecting large-volume purchases for those stated uses. The judges said the jury was entitled to rely on those documents rather than testimony from interested company witnesses.
The court also rejected Ingevity’s attempt to advance new immunity theories on appeal, ruling that it could not shift its legal arguments after trial. As a result, the panel left the damages award untouched. The district court had previously trebled the jury’s roughly $28.3 million award under federal antitrust law, bringing the total to nearly $85 million.
Separately, although the trial court had determined the patent asserted against BASF was invalid, the Federal Circuit did not reach that issue, noting that the patent expired in 2022 and any ruling would have no practical effect.
The dispute stems from a broader fight between the two chemical companies over technology used to reduce vehicle emissions. BASF maintained that Ingevity’s licensing practices forced customers to buy products they might not otherwise choose, limiting competition in the market for carbon-based filtration components.
Circuit Judges Alan D. Lourie, Sharon Prost and Tiffany P. Cunningham heard the appeal. Ingevity is represented by Cravath Swaine & Moore LLP, and BASF is represented by King & Spalding LLP.
