The Federal Circuit on Wednesday upheld a Delaware jury’s $85 million antitrust verdict against Ingevity Corp., rejecting the company’s attempt to invoke a statutory patent misuse defense. The case centers on Ingevity’s alleged practice of tying licenses for its automobile carbon filtering technology to purchases of other unpatented products, a strategy BASF Corp. challenged in response to Ingevity’s patent infringement suit.
In a precedential ruling, a three-judge panel of the Federal Circuit affirmed the jury’s finding that Ingevity had engaged in anticompetitive tying. At issue was whether Ingevity could shield itself under the patent misuse defense, which can limit antitrust liability if the tied sale is meant to prevent contributory patent infringement. The court noted that this defense applies only if the tied products are nonstaple, meaning they lack significant noninfringing uses.
The jury concluded that Ingevity’s carbon filtering “honeycombs” are staple goods, citing evidence that they can be used in air-intake systems not covered by the patent. The Federal Circuit found this evidence sufficient, stating, “Viewing the evidence under the proper legal standard, the jury reasonably found that the accused products had substantial non-infringing uses, and that finding was supported by sufficient evidence. That the products had substantial non-infringing uses means that they are staples.”
Ingevity argued there was no proof that customers actually used the products in noninfringing applications. The panel, however, pointed to sales records showing purchases for use in induction systems, allowing the jury to infer that buyers acted in accordance with those stated purposes. The court also rejected Ingevity’s claim of immunity from antitrust liability, noting that the company had shifted its arguments on appeal and could not reverse course at this stage.
The damages award, initially $28.3 million, had been trebled by the lower court to nearly $85 million. The Federal Circuit declined to disturb that judgment. The court also bypassed determining the validity of the underlying patent, U.S. Patent No. RE38,844, deeming it moot since the patent expired in 2022.
Ingevity is represented by Wes Earnhardt and Sharonmoyee Goswami of Cravath Swaine & Moore LLP. BASF is represented by Paul Alessio Mezzina, Alexander Kazam, Christopher Yook, Brian Eutermoser, and Thomas Friel of King & Spalding LLP.
The case, Ingevity Corp. et al. v. BASF Corp., case number 24-1577, was heard in the U.S. Court of Appeals for the Federal Circuit. The decision highlights how courts continue to scrutinize attempts to link patent licensing to unrelated product sales, particularly when the products have meaningful noninfringing uses, reinforcing limits on the patent misuse defense in antitrust disputes.
