Bayer AG v. Sony Electronics, Inc. (229 F. Supp. 2d 332, 2002)

MEMORANDUM OPINION

FARNAN, District Judge.

This action was brought by Plaintiff, Bayer AG (“Bayer”), against Defendants, Sony Electronics Inc. (“SEL”), Sony Corporation, Inc. (“Sony”) and Dowa Mining Co. (“Dowa”) (collectively “the Sony Defendants”), for infringement of U.S. Patent No. 4,290,799 (the “ ’799 Patent”). The ’799 Patent issued to Bayer on September 22, 1981 and expired on February 25, 2000. The ’799 Patent describes and claims a magnetic metal powder suitable for use in magnetic recording media such as in audio and video tapes. Bayer contends that SEL infringed the ’799 Patent by making, using or selling magnetic record tapes containing the metal powders claimed in the ’799 Patent. In addition, Bayer contends that Sony and Dowa actively induced direct infringement in the United States through their activities and relationship with each other and with SEL.

The Sony Defendants have denied Bayer’s allegations of infringement and have counterclaimed for a declaratory judgment of non-infringement. In addition, the Sony Defendants have counterclaimed that' the ’799 Patent is invalid and unenforceable. Specifically, the Sony Defendants allege that the ’799 Patent is invalid on the grounds of anticipation, obviousness, en-ablement, lack of written description and indefiniteness and unenforceable due to inequitable conduct by Bayer before the United States Patent and Trademark Office (“PTO”).

The Court has subject matter jurisdiction over this action pursuant to 28 U.S.C. §§ 1331 and 1338, because this action arises under the patent laws of the United States. In addition, the Court has subject matter jurisdiction over the Sony Defendants’ counterclaim action pursuant to 28 U.S.C. §§ 1338, 2201, and 2202, because the Sony Defendants seek declaratory judgment with regard to claims arising under the patent laws of the United States. Personal jurisdiction over the parties exists pursuant to 10 Del. C. § 3104, the Delaware long-arm statute. Likewise, venue in this district is appropriate under 28 U.S.C. §§ 1391 and 1400. Neither jurisdiction nor venue is contested by the parties.

The Court conducted a nine day bench trial on the issues presented by the parties. This Memorandum Opinion constitutes the Court’s findings of fact and conclusions of law on the claims and counterclaims presented by Bayer and the Sony Defendants.

BACKGROUND

I. The Parties

Bayer is 'a German corporation having a principal place of business in Leverkusen, Germany. Bayer operates approximately 350 companies world-wide and is principally involved in the health care and chemicals industries. (DX 671).

Defendants Sony and Dowa are Japanese corporations with principal places of business in Tokyo, Japan. (DX 672, 673). In addition to other businesses not related to this action, Dowa is involved in the manufacture of high quality metal powders used in the manufacturing of magnetic recording tapes. Defendant Sony is involved in audio and video electronics, information technology, music, and motion picture and television production and distribution. Defendant Sony purchases magnetic metal powders from Dowa for use in manufacturing magnetic recording tapes.

Defendant SEL is a Delaware corporation with a principal place of business in Park Ride, New Jersey. (D.I.412, Ex. 1, ¶ A). SEL is a wholly owned subsidiary of Sony. SEL sells metal tape products that are purchased from Sony and magnetic recording tapes that are manufactured using Dowa metal powders at its facility in Dothan, Alabama.

II. The ’799 Patent And The Technology Generally

The ’799 Patent claims a metal powder suitable for magnetic recording which consists essentially of iron. (’799 Patent, Abstract & col. 1, 11. 5-7). The individual particles of the powder are acicular and contain for purposes of- Claim 1 an average of no more than 5 pores and no more than 2 metal cores and for purposes of Claim 2 an average of no more than 1 pore and 1 metal core-. The particles are produced by precipitating and oxidizing an aqueous iron-salt solution to produce finely divided acicular iron-oxide-hydroxide. The particles are stabilized by treatment with a variety of metals and compounds like cadmium, lead, calcium, magnesium, zinc, aluminum, chromium, tungsten, a phosphorous oxide and/or a boron oxide, and converted into ferromagnetic iron oxide of low pore content. The iron oxide is then reduced to a metallic iron with a gaseous reducing agent at about 300° to 600° C. (’799 Patent, Abstract).

The magnetic powder is used to make magnetic recording tapes. The purpose of magnetic powder for recording purposes is to achieve higher storage densities. Magnetic recording tapes consist of an underlying base film and a coating containing the magnetic particles. (O’Grady Tr. 660-664). The coating is produced from a mixture containing magnetic particles and other ingredients and is filtered to eliminate agglomerates that might occur because of the magnetic attraction of individual particles. (O’Grady Tr. 660-664). A coating machine applies a uniform layer of the coating to the base film. Before the coating is dried, a powerful magnetic field orients the particles so that each particle is as parallel to the direction of the magnetic tape as possible. The coated film is then dried and the surface is smoothed through a process called calendering. (O’Grady Tr. 660-664, 515). During the calendering process, the tape is pressed between heated, polished rollers to produce a smooth tape surface. The tape is then cured, and cut into strips to be wound into reels or cassettes.

Among the important properties of magnetic tape are its remanence, coercivity and squareness ratio. (DX 280 at 000101-02). Remanence is the magnetization remaining on the tape following the effects of a magnetic field, which determines the strength of a recording. (DX 280 at 000101-02). Coercivity is a measure of the tape’s resistance to demagnetization or its “magnetic hardness.” (DX 280 at 000101-02). The squareness ratio compares the strength of the recording (remanence) with the amounts of magnetization required to make the recording. (DX 280 at 000101-02).

Among the important qualities for the magnetic particles used in the coating for magnetic tapes are a high coercivity to resist being demagnetized, chemical stability to prevent rusting and the concomitant loss of information, and dispersability so that they can be uniformly coated on the tape. (O’Grady Tr. 658-661, 754). Different types of magnetic particles have been used over the years in the manufacture of magnetic tapes. Gamma iron oxide particles were used in 1937 and continue to be used today. However, as technology progressed, particles with a higher magnetization than the traditional iron oxides was needed. (DX 619 at 12-14). Companies like Defendant Sony experimented with metal tape formulations and the use of particles that were an alloy of three metals, iron, cobalt and nickel. (DX 481 at S2828). Some manufactures worked with chromium dioxide particles and others with cobalt epitaxial doped iron oxide particles. The cobalt epitaxial doped iron oxide particles predominated in the industry and are still used today in home VCR applications, because they can be produced at a lower cost than the chromium dioxide particles. (DX 619 at 12-14).

The newer generation of magnetic recording technology focuses on metal particle coatings. (DX 619 at 12-14). The efforts of several companies were aimed at producing metal particle coatings for tape applications in hand-held video cameras and professional video and audio use. A need also developed for higher densities for data storage applications, like backing up computer systems. Bayer and the Sony Defendants were among the corporations engaging in extensive research regarding these metal particles.

DISCUSSION

I. Claim Construction

A. The Legal Principles of Claim Construction

Claim construction is a question of law. Markman v. Westview Instruments, Inc., 52 F.3d 967, 977-78 (Fed.Cir.1995), aff'd, 517 U.S. 370, 388-90, 116 S.Ct. 1384, 134 L.Ed.2d 577 (1996). When construing the claims of a patent, a court considers the literal language of the claim, the patent specification and the prosecution history. Markman, 52 F.3d at 979. A court may consider extrinsic evidence, including expert and inventor testimony, dictionaries, and learned treatises, in order to assist it in construing the true meaning of the language used in the patent. Id. at 979-80 (citations omitted). A court should interpret the language in a claim by applying the ordinary and accustomed meaning of the words in the claim. Envirotech Corp. v. Al George, Inc., 730 F.2d 753, 759 (Fed.Cir.1984). However, if the patent inventor clearly supplies a different meaning, the claim should be interpreted accordingly. Markman, 52 F.3d at 980 (noting that patentee is free to be his own lexicographer, but emphasizing that any special definitions given to words must be clearly set forth in patent). If possible, claims should be construed to uphold validity. In re Yamamoto, 740 F.2d 1569, 1571 & n. * (Fed.Cir.1984) (citations omitted).

B. The Meaning Of The Disputed Terms of the ’799 Patent

Bayer asserts Claims 1-3 of the ’799 Patent against the Sony Defendants. Claims 1-3 of the ’799 Patent read as follows:

1. A metal powder, suitable for magnetic recording, consisting essentially of iron, the individual particles being acicular and containing on average no more than 5 pores and consisting on average of no more than 2 metal cores.

2. A metal powder as claimed in claim 1, in which the individual particles contain on average no more than 1 pore and consist on average of no more than 1 metal core.

3. A metal powder as claimed in .claim 1, containing about 0.1 to 1% by weight of at least one of cadmium, lead, calcium, zinc,' magnesium, aluminum, chromium, tungsten, phosphorus (expressed as P205) and/or boron (expressed as B203).

(’799 Patent, col. 8, 11. 67-68, col.9, 11. 1-13).

The parties seek construction of the highlighted terms in these claims. For the reasons that follow, the Court construes the disputed terms as follows:

1. “pores”

The parties do not dispute that a pore is a hole or cavity in a magnetic particle which may be open or closed. (DX 60; Buxbaum 11/15/96 Dep. 447-448). An “open pore” is a .“cavity or channel communicating with the surface of a particle.” (DX 60; O’Grady Tr. 687). A “closed pore” is a “cavity or channel not communicating with the surface of a particle.” (DX 60; O’Grady Tr. 687).

The parties’ disagreement centers on the size of the pores contemplated by the Bayer patent. Pores- can be classified into three size ranges: • (1) micropores which are less than approximately 2nm, (2) meso-pores which are between approximately 2nm and 50nm and-(3) macropores which are above approximately 50nm. (DX 60; O’Grady Tr. 688). Bayer contends that the size of the pores is necessarily limited by their manner of detection and count as described in the ’799 Patent. According to Bayer, this method is via bright field TEM analyses at approximately 120,000:1 magnification, i.e. the magnification present in Figures 1 through 3 of the ’799 Patent. Individual pores appear as light-colored areas or spots in an otherwise darker TEM micrograph of the particle at the relevant magnification. According to Bayer one skilled in the art would realize that only mesopores would be detectable in the TEM analysis at the magnification of 120,-000:1. Bayer contends that macropores would be excluded because their size exceeds the diameter of the particles, and micropores would be excluded because they cannot be seen, let alone counted and averaged at the 120,000:1 magnification. Thus, Bayer contends that it is only those pores visible in the TEM images at the relevant magnification that must be counted and averaged to determine the “on average” pore limitations of the ’799 Patent.

In response, the Sony Defendants contend that the term “pore” should not include any size limitations. According to the Sony Defendants, one of ordinary skill in the art reading the ’799 Patent would understand that the term “pore” refers to pores as commonly understood and that no size limitation or distinction between open and closed pores is stated or implied in the patent.

After reviewing the disputed term in light of the specification, the Court agrees with the Sony Defendants. The term pore is not limited to any size or distinction between open and closed pores. The specification contains no limitations about pore size whatsoever. If Bayer had wanted to limit the definition of pores to mesopores, it should have done so explicitly in the patent. See e.g. Beachcombers v. Wilde-Wood Creative Products, Inc., 31 F.3d 1154, 1158 (Fed.Cir.1994) (“[A] patentee can be his own lexicographer provided that patentee’s definition, to the extent that it differs from the conventional definition, is clearly set forth in the specification.”); Vi-tronics, 90 F.3d at 1582. Absent clear language in the specification departing from the customary use of the term pore, the Court concludes that the word should be given its ordinary meaning as used by those skilled in the art, without the limitation Bayer seeks to impose. See Multiform Desiccants, Inc. v. Medzam, Ltd., 133 F.3d 1473, 1477 (Fed.Cir.1998).

Bayer contends that the patent should be limited by the illustrative figures, Fig. 1-3 of the patent, which both parties agree are at a magnification of 120,000:1. The . Court disagrees. The inclusion of the TEMs in Bayer’s patent does not inform someone of ordinary skill in the art how the TEMs should be used or that they should be used for counting pores. Although TEM analysis can be used for counting pores, other methods are available and are recommended by those skilled in the art to confirm the impressions one gains from TEM analysis. (O’Grady Tr. 846-847). Further, Dr. Buxbaum, one of the inventors of the patent testified that the figures in the ’799 Patent were for illustrative purposes only and not for use in counting pores. (Buxbaum Tr. 339). Similarly, another inventor of the patent, Dr. Schroder, testified that he was not concerned about the size of the pores, because “the goal was to possibly have no pores because the recognition was prevailing with us that the fewer pores, the better.” (Schroeder 9/27/96 Dep. at 127-128).

The Court’s conclusion that the term “pore” is not limited by size is also supported by the understanding of the term by one skilled in the art. The parties agree that the literature recognizes three sizes of pores. (D.I. 476 at 25, ¶ 42; D.I. 477 at 34-35, ¶ 91). Further, Dr. Bux-baum, admitted that individuals researching magnetic particles were using high magnification TEMs to look for micropores in the late 1970s and 1980s. (Buxbaum Tr. 201). Thus, in the Court’s view, micro-pores were encompassed in the term “pores” as used by-those skilled in the art, and Bayer has not persuaded the Court otherwise.

That one skilled in the art would not exclude micropores from the term “pores” is farther evidenced by the expert testimony of Professor O’Grady, which the Court finds credible. As Professor O’Grady testified:

I have heard testimony in this court that says that micropores are of no significance. Personally, as an expert in the field, I don’t agree with that testimony. But if someone wished to place that restriction upon one skilled in the art, that person would have to state that in my opinion quite explicitly, because it’s contrary to the accepted [international [UJnion of [PJure and [AJpplied [CJhemistry definition of pores.

(O’Grady Tr. 829). Accordingly, the Court construes the “term” pore as a hole or cavity in a magnetic particle which may be open or closed, and the Court declines to impose any size limitation on the term “pore.”

2. “cores”

The term “cores” is used in the context of “metal cores.” Bayer contends that the term “core” was not understood in the art at the time the ’799 Patent was developed and that the inventors explicitly defined metal core in the patent specification as follows:

In the context of the invention, a metal core is understood to be a geometric subregion of an acicular particle which is formed by the merging of several individual pores which are thus no longer separated by matter. Needles dissociated into metal cores are formed, for example, when the metal needles are produced from acicular a-Fe203 by reduction, as a result of the fact that, dependent on the decrease in crystal volume during reduction, the pores increase in volume so that they ultimately overlap.

(’799 Patent, col. 2, 11. 42-51). Thus, Bayer contends that the inventors defined “core” in terms of a metal needle (acicular particle) whose parts have become separated or dissociated from other regions of the needle. According to Bayer, under the patent’s definition of “core,” an acicular particle which has not dissociated or separated into two or more different geometric subregions consists of one core. The presence of different geometric subregions is detected by light colored gaps in the TEM image which indicate an absence of matter. Bayer contends that these subregions may have the same or different crystallographic orientation and areas of different crystallographic orientation do not qualify as cores unless they are separated from each other by light colored gaps as viewed by the TEM image at a magnification of about 120,000:1.

■ In response, the Sony Defendants contend that the term “core” is defined in the patent with reference to crystallographic orientation, which is omitted in the Bayer definition. Specifically, the Sony Defendants highlight that part of the specification which contrasts “metal core” from the prior art “chain of spheres.” In this regard, the specification states:

The expression “chain of spheres” is known from the literature for structures which have a similar appearance in photographs taken through a microscope. However, these structures are formed by agglomeration or growth of individual metal particles. The individual “spheres” consist predominantly of differently oriented crystallographic regions. By contrast, the expression “metal core” as used herein is intended to designate a structure which may be imagined to have been formed from originally coherent material, the various metal cores of a needle having substantially the same crystallographic orientation.

(’799 Patent col. 2, 11. 51-62). According to the Sony Defendants, the definition of a “metal core” as a “subregion” of a certain crystallographic orientation is evident from the comparison between the prior art particles with “differently oriented crystallographic regions” and the “subregions” of the claimed invention with “substantially the same crystallographic orientation.”

After reviewing the claim language in light of the specification, the Court agrees with the Sony Defendants. Bayer’s definition of “core” overlooks the remaining portion of the specification which elaborates on what is meant by the term “metal core” and includes as an essential element of that term “substantially the same crystallographic orientation.” The specification explicitly explains that, as used in the patent, the term “metal core” is designated to have a structure formed “from originally coherent material, the various metal cores of a needle having substantially the same crystallographic orientation.” (’799 Patent, col. 2, 11. 60-62). That the crystallographic orientation is important to the definition of metal core is, in the Court’s view, highlighted by the comparison to the prior art “chain of spheres,” which consisted mainly of differently oriented crystallographic regions.

Bayer contends that the appropriate focus is not on the crystallographic regions, but on the lack of dissociation in the claimed invention as compared with the prior art. With regard to the prior art, Bayer explains:

As used in the ’799 Patent, the terms “dissociated” and “dissociation” regarding the prior metal needles (which the patent seeks to avoid) mean that the needle form has been separated or divided into separate parts or subregions.

(D.I. 476 at 22-23, ¶ 39). In contrast, Bayer contends that the invention of the ’799 Patent seeks to produce acicular (needle like) particles having a “coherent, non-dissociated external needed form” as depicted in Figure 1. According to Bayer, it is this “non-dissociated” form that makes the claimed invention different from the prior art needles which have “dissociated into a plurality of individual metal cores” as depicted in Figures 2 and 3. The Court disagrees with the distinction Bayer seeks to make between the claimed invention and the prior art. In the Court’s view, the specification contradicts Bayer’s position by highlighting the difference in crystallographic orientation as the key difference between the prior art and the claimed invention. That this is an important distinction between the claimed invention and the prior art was confirmed by one of the inventors of the ’799 Patent, Dr. Sehroe-der, who testified as follows:

Q: So ... it’s a logical conclusion from the preparation process of the particle that you would expect a single core to have a uniform crystallographic orientation?

A: Correct. In the literature the contrasting ... conclusion was arrived at with regard to the spheres. And subsequent to that we did our considerations for our particles.

(Schroder 9/28/96 Dep. 178-179).

In addition to the language of the specification, the Court’s definition of the term “core” is supported by a certified translation of a counterpart patent to the ’799 patent. Both the English translation and the original German text were submitted to the PTO in connection with the ’799 Patent to give Bayer the benefit of its German filing date under 35 U.S.C. § 119. In relevant part, the English translation of the counterpart patent provides:

From the literature, the phrase “chain of spheres” has been used to describe structures having a similar appearance to these clusters when viewed under a microscope.... The individual “spheres” are predominately made up of regions with different crystallographic' orientations. Contrary to this, the expression “metallic core” shall be used herein to describe a structure that originates from an originally coherent material. The metallic cores in the needle generally all exhibit the same crystallographic orientation.

(DX 699). Accordingly, the Court concludes that the term “core” is defined as a geometric sub-region of an acicular particle which is formed by the merging of several individual pores which are no longer separated by matter, but which have substantially the same crystallographic orientation.

3. “consisting essentially of iron”

Bayer contends that- the phrase “consisting essentially of iron” does not refer to a particular percentage of iron. Rather, Bayer contends that as long as iron makes up more than half of the metal content of the powder, then the powder consists essentially of iron.

In response, the Sony Defendants contend that the phrase “consisting essentially of iron” is a term of art signaling that the invention necessarily includes the listed ingredient, but excludes additional ingredients that would affect the-basic and novel properties of the claimed invention. Applying this definition in the context of the ’799 Patent, the Sony Defendants contend that the materials must be at least 90% reduced from iron oxide to elemental iron. According to the Sony Defendants, more than 10% iron oxide would have a material effect on the basic and novel properties of the claimed invention and would produce an inferior product. Further, the Sony Defendants contend that the prosecution history of the ’799 Patent indicates that the claimed metal powder cannot contain more than 7% of other metal additives.

The phrase “consisting essentially of iron” is not defined in the ’799 Patent. However, the Court of Appeals for the Federal Circuit has concluded that the drafter’s use of the phrase “consisting essentially of’ signals that the invention necessarily includes the listed ingredients and is open to unlisted ingredients that do no materially affect the basic and novel properties of the invention.” PPG Industries v. Guardian Industries Corp., 156 F.3d 1351 (Fed.Cir.1998).

Although the patent does not expressly quantify the amount of iron which must be present for the claimed invention to “consist essentially of iron,” the Court concludes that the amount can be discerned from the specification. Specifically, the specification explains that Figure 3 depicts the prior art in which the dissociation of metal particles “is lower commensurate with the degree of reduction of only 80-90%.” (’799 Patent at col. 2, 1. 39). In contrast, the specification explains that in the claimed invention, “the product is reduced throughout.” (’799 Patent at eol. 6, 1. 46). Thus, to be distinguishable from the inferior prior art product depicted in Figure 3 of the patent, the claimed invention must necessarily contain material which is more than 90% reduced from iron oxide to elemental iron.

The Court’s conclusion regarding the percentage of elemental iron reduced from iron oxide is supported by the testimony of the inventor of the ’799 Patent. During his deposition Mr. Schroder was asked the following question and gave the following answer:

Q: And what percentage of iron is required in order for you to conclude that the particles consist essentially of iron?

A: In the area of above 90 percent, depending on the multiplicity of the treatment and the preliminary steps, where the optimal reduction lies.

(Schroeder 9/30/96 Dep. 237). Further, the Court observes that there is no support in the specification for Bayer’s counter definition that the phrase “consisting essentially of iron” means that the claimed invention contains more than half iron. Accordingly, the Court concludes that the phrase “consisting essentially of iron” means that the claimed invention necessarily includes iron and is open to unlisted ingredients that do no materially affect the basic and novel properties of the invention and that the claimed invention must necessarily contain material which is more than 90% reduced from iron oxide to elemental iron.

The Sony Defendants also urge the Court to include as part of its claim construction the quantities and types of unlisted ingredients which do not materially affect the basic and novel properties of the invention. Relying on the prosecution history of the ’799 Patent, the Sony Defendants contend that the claimed metal powder cannot contain more than 7% of other metal additives Further, the Sony Defendants contend that Bayer disclaimed coverage of particles containing cobalt, nickle or tin, because they distinguished their invention from the prior art in the prosecution history by saying that the claimed invention “shows very good magnetic properties without being doped with expensive elements, as for example Co, Ni or Sn.” (D.I. 477 at 44, citing DX 28 at 2).

The Court is only required to define a claim “with whatever precision is warranted by the language of the claim and the evidence bearing on the proper construction ...” Id. at 1355. The Court may not, under the rubric of claim construction, give a claim “whatever additional precision or specificity is necessary to facilitate a comparison between the claim and the accused product,” because claim construction is a legal question and infringement is a factual question. In the Court’s view, the amount of other metal additives which would affect the basic composition of the claimed invention is not readily apparent in the claim language or specification, and is a factual question relevant to the infringement analysis. Accordingly, the Court declines to address the quantity or types of other additives that would have a material effect on the basic properties of the claimed invention in the context of its claim construction.

4. “powder”

The Sony Defendants contend that the term “powder” refers to an aggregation of loose, small, solid particles. According to the Sony Defendants, “powder” is a more limited term than “particles,” and “powder” must be loose, free flowing and unaligned. Because “powder” must be loose and free flowing, the Sony Defendants contend that “powder” is different than magnetic tape, which is not loose or free flowing.

In response, Bayer contends that the ’799 Patent places no such limitations on the term “powder.” Bayer contends that the term “powder” refers to a conglomeration of individual particles, which may be loose, free flowing and unaligned, but which need not be. Thus, Bayer contends that the term “powder” describes metal particles both before and after they are embedded into magnetic tape.

The Court addressed the parties’ respective arguments in its decision on the Sony Defendants’ Motion For Summary Judgment That Tape Is Not Powder. (D.I.217, 326). In denying the Sony Defendants’ motion, the Court stated:

After a review of the intrinsic evidence, the Court concludes that the term ‘powder’ is not limited in the manner SEL contends. Powder is used to describe a conglomeration of individual particles. Powder may be loose, free flowing and unaligned, but it need not be.

(D.I. 326 at 19). The Court is not persuaded that its prior conclusion was erroneous, and therefore, for purposes of claim construction, the Court adheres to the above-stated definition of the term “powder.”

II. Direct Infringement

A. Applicable Law

A patent is infringed when a person “without authority makes, uses or sells any patented invention, within the United States during the term of the patent....” 35 U.S.C. § 271(a). A patent owner may prove infringement under either of two theories: literal infringement or the doctrine of equivalents. In this case, Bayer’s case is premised upon the theory of literal infringement. Literal infringement occurs where each element of at least one claim of the patent is found in the alleged infringer’s product. Panduit Corp. v. Dennison Mfg. Co., 836 F.2d 1329, 1330 n. 1 (Fed. Cir.1987); Robert L. Harmon, Patents and the Federal Circuit 195 & n. 31 (3d ed.1994). In determining whether a patent has been literally infringed, the patent owner has the burden of proof and must meet its burden by a preponderance of the evidence. SmithKline Diagnostics, Inc. v. Helena Lab. Corp., 859 F.2d 878, 889 (Fed.Cir.1988) (citations omitted).

Infringement is a two step inquiry. Step one requires a court to construe the disputed terms of the patent at issue. Step two requires a court to compare the accused products with the properly construed claims of the patent. Having construed the disputed terms of the ’799 Patent, the Court will proceed to a comparison between the Sony Defendants’ accused products and the claims as construed by the Court.

B. Whether Bayer Has Established By A Preponderance Of The Evidence That SEL Directly Infringed The ’799 Patent

Bayer asserts Claims 1-3 of the ’799 Patent against SEL. By Memorandum Opinion and Order dated December 20, 2001, the Court limited the scope of Bayer’s infringement argument to literal infringement. With regard to Claim 3 of the ’799 Patent, the Court permitted Bayer to assert infringement either literally or by the doctrine of equivalents. Bayer has elected to pursue literal infringement with regard to Claim 3.

After comparing the accused products with the claims at issue, the Court concludes that Bayer has not established that SEL directly infringes the ’799 Patent. In reaching this conclusion, the Court finds credible the testimony offered by the Sony Defendant’s expert witness, Professor Kevin Dermott O’Grady.

1. Claims 1 and 2 of the ’799 Patent

a. The powder element

Claims 1 and 2 of the ’799 Patent first claim “[a] metal powder suitable for magnetic recording ...” As interpreted by the Court, the accused products meet the definition of powder. Although the accused products are in tape form, the Court has concluded that the term “powder” includes particles both before and after they are embedded in the tape.

b. The “consisting essentially of iron” element

Claims 1 and 2 of the ’799 Patent also require the metal powder to “consist[ ] essentially of iron.” The Court concludes that the accused products do not consist essentially of iron as required by these claims. The Court has construed the phrase “consisting essentially of iron” to mean that the claimed invention necessarily includes iron and is open to unlisted ingredients that do not materially affect the basic and novel properties of the invention and that the claimed invention must necessarily contain material which, is more than 90% reduced from iron oxide to elemental iron. As tested by Professor O’Grady, the accused powders contain a range of about 48-52 percent elemental iron, and thus, do not satisfy the requirement that they “consist essentially of iron” as defined by the Court. (DX 643 at 15; O’Grady Tr. 781, 785). The accused powders also contain between 28.68% and 42.33% iron oxide and aluminum oxide. (DX 643 at 15). The Court is persuaded that these levels of iron oxide would materially affect the basic and novel properties of the claimed invention. Specifically, the presence of these oxides affects the dis-pensability of the particles, which is important to their ability to be coated into recording tape. (DX 643 at 15, 17). Further, the Court observes that Bayer does nof challenge Professor O’Grady’s findings regarding the content of iron and iron oxides' present in the accused products. Rather, Bayer’s argument is premised on its claim construction that “consisting essentially of iron” means containing about fifty percent element iron. Because the Court has previously rejected Bayer’s claim construction, the Court concludes that Bayer has not proven that this element of the ’799 Patent reads onto the accused products.

In addition to the high levels of oxides as compared to the claimed invention, the Court finds that the accused products also contain significant amounts of cobalt and nickel. (DX 643 at 15-17). That the presence of these additional elements would materially affect the basic properties of the claimed invention was confirmed by Professor O’Grady, as well as by Bayer’s expert witnesses. (DX 643 at 15-17). For example, testifying on behalf of Bayer, Dr. Mallinson conceded that the presence of metal oxides and cobalt materially affect the physical and magnetic characteristics of a metal powder:

Q: In both iron oxide and iron metal powders, what is the effect of the addition of cobalt? ,

A: In the oxide particles, the principal effect is the raising of the coércivity. In the metal particles, the coercivity is also raised. But also, the saturation magnetization increases.

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Q: So cobalt can materially change a property such as coercivity in both the iron oxide and the metal particles?

A: Yes, it can.

(Mallinson Tr. 1166). Similarly, Bayer’s expert, Dr. Buxbaum, testified:

Q: So are you saying that the use of'5- and 8-percent cobalt would have a material effect on the powder; is that right?

A: It has an essential effect on the magnetic properties.

Q: And it improves them; right?

A: It improves certain properties.

(Buxbaum Tr. 191). Because the definition of “consisting essentially of iron” excludes ingredients that would affect the basic and novel properties of the invention and the accused products contain sufficient amounts of cobalt, nickel and metal oxides such that their magnetic properties and coercivity are increased, the Court concludes that the accused products do not meet the “consisting essentially of iron” element in Claims 1 and 2 of the ’799 Patent.

Bayer contends that the presence of cobalt and nickel in the accused products do not preclude a finding of infringement. Specifically, Bayer contends that the ’799 Patent contemplates the addition of elements such as cobalt, because it recognizes that higher coercive forces may be obtained “if the metal powders consisting essentially of iron contain cobalt.” (’799 Patent, col. 3, 1. 8-17). The Court is not persuaded by Bayer’s argument. The use of the phrase “consisting essentially of’ excludes unlisted ingredients which materially affect the basic and novel properties of the invention. That the specification recognizes that the addition of metals like cobalt can result in higher coercive forces does not mean that the patent claims an invention which uses additional metals to achieve those higher coercive forces. Indeed, during the prosecution history of the ’799 Patent, Bayer emphasized that its claimed invention was not doped with expensive elements like cobalt, nickel and tin. Explaining its invention to the Patent Examiner, Bayer stated:

Specifically, Fig. 1 shows a product in accordance with the present invention. This material is more stable than comparative metal pigments and shows very good magnetic properties without being doped with expensive elements as for example Co [cobalt], Ni [nickel] or Sn [tin].

(DX 28 at 2). That the presence of significant quantities of these metals (i.e. amounts sufficient to affect the basic properties of the invention) was not contemplated by the claimed invention is further confirmed by the testimony of the lead inventor of the ’799 Patent, Mr. Schroeder. Mr. Schroeder recognized that “cobalt is expensive” and that Bayer believed that its invention was better than the prior art, because it could obtain high “coercivity values that were due to cobalt without cobalt.” (Schroeder Tr. 434). Accordingly, the Court concludes that the presence of significant amounts of oxides, cobalt and nickel in the accused products precludes a finding that the accused products satisfy the “consisting essentially of iron” element in the claimed invention.

c. Pore content element

Claims 1 and 2 of the ’799 Patent next focus on the pore content. Specifically, Claim 1 requires an average of no more than 5 pores, and Claim 2 requires an average of no more than 1 pore. The Court has concluded that the term “pore” refers to a hole or cavity in a magnetic particle which may be open or closed. The term “pore” has no size limitation and the term “pores” is not limited to those pores which are visible in a TEM analysis at a magnification of 120,000:1.

Examining the accused products in light of this definition of the term “pore,” the Court concludes that the accused products do not satisfy the pore counts required by the ’799 Patent. Using TEM analysis to. count the number of pores. and complementary measurements to confirm the impressions he gained from the TEMs- and ensure that his work was representative and fair, Professor O’Grady concluded that the accused powders contained more than 5 mesopores per particle. (O’Grady Tr. 778-779, 846-847, 925; DX 643 at 13-14). Using higher magnifications,. Professor O’Grady further found that the accused powders contained on average hundreds of micropores. (O’Grady Tr. 778-779; DX 643 at 13-14). Moreover, Professor O’Grady noted that his figures , actually underestimated the number of pores visible, because only one part of a particle was visible at a time using the TEM technology. (O’Grady Tr. 778-779; DX 643 at 13-14).

Bayer contends that Professor O’Grady’s estimations regarding the number of pores is inaccurate, because the TEMs he used were at a higher magnification than that required by the ’799 Patent. As the Court has previously discussed in the context of claim construction, the ’799 Patent is not limited to those pores which can be detected in a TEM'image at a magnification of 120,000:1. Further, the Court is not persuaded by the pore counts obtained by Professor Williams. The counts made by Professor Williams were based on a definition of the term “pore” which is not in accordance with the Court’s definition. In addition, Professor Williams relied only on TEM images for his counts, even though he himself acknowledged in a textbook that TEMs should not be used in isolation. (DX 74 at 11; Williams Tr. 286-287). In contrast, Professor O’Grady used other methods to confirm his pore counts. Further, the Court finds that some aspects of the methods used by Professor Williams may have compromised his results. For example, Professor Williams admitted that some of the particles he selected for examination may have been fragments of larger particles, but he did not check to determine whether the particles were broken. (Williams Tr. 293-296). Professor Williams also selected only one or two particles per image for analysis, while one of the inventor’s of the patent, Dr. Bux-baum, used TEM images with approximately 20 individual particles and analyzed all' the particles that could be seen. (Bux-baum Tr. 109, 143-144; Williams Tr. 308). The Court finds that these different counting methods, as well as the possibility of broken particles, could lead to inaccurate or misleading results rendering the testimony of Professor Williams on the subject of- pore counts less credible than the testimony of Professor O’Grady. Accordingly, the Court concludes that the accused products fail to meet the claimed number of pores, as the term “pores” has been construed by the Court.

d. Core content element

As for the number of cores contemplated by the ’799 Patent, Claim 1 requires an average of no more than 2 metal cores, and Claim 2 requires an average of no more than 1 metal core. The Court has defined the term “core” as a geometric sub-region of an acicular particle which is formed by the merging of several individual pores which are no longer separated by matter, but which have substantially the same crystallographic orientation. Comparing the accused products with this element of the ’799 Patent, the Court concludes that the accused products contain substantially more cores than contemplated by Claims 1 and 2 of the claimed invention. Using dark field TEM studies, Professor O’Grady counted between 8 and 12 crystallites per particle, and in some cases even more. (O’Grady Tr. 776; DX 643 at 11). Further, using x-ray measurements and magnetic measurements of the activation volume of the- accused products, Professor O’Grady confirmed that the average crys-tallite size of the accused products is substantially smaller than the length of the particle. This observation further supports Professor O’Grady’s conclusion that the accused powders contain numerous metal cores. (DX 643 at 11).

Although bright field TEM images were not able to provide Professor O’Grady with an absolute count of the number of cores, Professor O’Grady did observe that using the bright field TEMs, the particles present consisted of a number of fused crystal-lites, and not one or two regions having substantially the same crystallographic orientation. (DX 643 at 13).

Bayer’s primary challenge to Professor O’Grady’s findings regarding the number of metal cores present in the accused products lies in its contention that Professor O’Grady findings are based upon an incorrect definition of the term “cores.” Because the Court has previously rejected Bayer’s claim construction argument, the Court concludes that the accused products do not satisfy the number of “cores” in Claims 1 and 2, as that term is construed by the Court. In addition, for the reasons discussed in the context of the Court’s analysis regarding the pore element, the Court is not persuaded by the core counts obtained by Professor Williams. Professor Williams used a definition of “core” that is not consistent with the Court’s definition, used only one or two particles for analysis and used only TEM images with no other techniques to confirm his results.

e. Summary

Because the elements of Claims 1 and 2 of the ’799 Patent do not read onto the accused products, the Court concludes that the accused products do not infringe Claims 1 and 2 of the ’799 Patent. Without a finding of literal infringement,, SEL cannot be liable for direct infringement of Claims 1 and 2 of the ’799 Patent.

2. Claim 3

Claim 3 of the ’799 Patent refers to the metal powder as claimed in Claim 1, but with the additional limitations that the metal powder contain about 0.1% to 7% by weight of at least one doping and/or modifying agent, i.e. cadmium, lead, calcium, zinc, magnesium, aluminum, chromium, tungsten, phosphorus and/or boron. Because Claim 3 is dependent on Claim 1, the Court’s infringement analysis regarding Claim 1 applies equally to Claim 3. Accordingly, the Court concludes that SEL is not liable for the direct infringement of Claim 3 of the ’799 Patent.

3. Summary of Conclusions Regarding Bayer’s Claim of Direct Infringement

In sum, the Court concludes that Bayer has not established that SEL directly infringed the ’799 Patent. Accordingly, the Court will enter judgment against Bayer and in favor of SEL on Bayer’s claims that SEL directly infringed Claims 1-3 of the ’799 Patent.

II. Inducement Of Infringement

A. Applicable Law

In pertinent part, 35 U.S.C. § 271(b) provides “whoever actively induces infringement of a patent shall be liable as an infringer.” It is well-established that there cannot be inducement of infringement absent direct infringement. Syrrx, Inc. v. Oculus Pharmaceuticals, Inc., 2002 WL 1840917, *1 (D.Del. Aug.9, 2002) (citing FMC Corp. v. Up-Right, Inc., 21 F.3d 1073 (Fed.Cir.1994)). As such, a claim for inducement of infringement is dependent upon proof of direct infringement. Epcon Gas Systems, Inc. v. Bauer Compressors, Inc., 279 F.3d 1022, 1033 (Fed.Cir.2002).

B. Whether Bayer Has Established That Dowa And/Or Sony Actively Induced Infringement

Because Bayer has failed to establish by a preponderance of the evidence that SEL is liable for direct infringement, the Court concludes that Bayer has not established that Dowa and/or Sony actively induced infringement of the ’799 Patent. Accordingly, the Court will enter judgment in favor of Dowa and Sony on Bayer’s claim that they actively induced infringement of the ’799 Patent.

III. Invalidity Over The Prior Art

A. Whether The ’799 Patent Is Invalid As Anticipated

As a general matter, for a patent to be invalid as anticipated under 35 U.S.C. § 102(g), the party challenging validity must show that the potentially invalidating patent or invention (1) qualifies as prior art; (2) was not abandoned suppressed or concealed; and (3) is identical to the claimed invention or process. In order for a potentially invalidating invention to qualify as prior art, the party challenging validity must show that the potentially invalidating invention or patent has priority over the claimed invention. See e.g., Thomson S.A v. Quixote Corporation, 166 F.3d 1172, 1175 & n. 3 (Fed.Cir.1999).

To show identicality between prior art and the claimed invention, the party challenging validity must show that each and every step or element of the claimed process or invention is disclosed in a single prior art reference or embodied in a single prior art device or practice, either expressly or inherently. Hazani v. United States International Trade Commission, 126 F.3d 1473, 1477 (Fed.Cir.1997). “[Ijnvalidity by anticipation requires that the four corners of a single, prior art document describe every element of the claimed invention, either expressly or inherently, such that a person of ordinary skill in the art could practice the invention without undue experimentation.” Advanced Display Sys., Inc. v. Kent State Univ., 212 F.3d 1272, 1282 (Fed.Cir.2000).

For an element to be inherently present in a prior art reference it must necessarily be present in the reference. Continental Can Co. v. Monsanto Co., 948 F.2d 1264, 1268 (Fed.Cir.1991). As the Federal Circuit has explained:

Inherency may not be established by probabilities or possibilities. The mere fact that a certain thing may result from a given set of circumstances is not sufficient. If, however, the disclosure is sufficient to show that the natural result flowing from the operation as taught would result in the performance of the questioned function, it seems to be well settled that the disclosure should be regarded as sufficient.

Monsanto, 948 F.2d at 1268-1269. Whether a step or element is inherent in a prior art reference is a question of fact. Hazani, 126 F.3d at 1477.

The Sony Defendants contend that the ’799 Patent is invalid as anticipated by three prior art references, the Phillips Patent, the Fuji Patent and the Montedison Patent. The Court will examine the Sony Defendants’ arguments as they pertain to each of these references.

1. Whether the ’799 Patent is Anticipated by the Phillips Patent

The Phillips Patent, U.S. Patent No. 3,598,568, claims a method of preparing magnetically stable powder “mainly consisting of iron.” (DX 10, Abstract). The process entails the precipitation of iron oxide hydrate (a-FeOOH) in the presence of oxygen. However, before the precipitation begins, doping agents like germanium, tin and/or aluminum are added. According to the Phillips Patent, it is essential that these agents be already present in the iron salt solution during the formation of the precipitate of iron oxide hydrate (a-FeOOH). (DX 10, col. 2, 1. 4-9). Following the precipitation of the aFeOOH, the a-FeOOH is reduced in hydrogen at a temperature between 250°C to 500C to form an iron powder. (DX 10, Abstract).

The Sony Defendants contend that the Phillips Patent anticipates the ’799 Patent, because the resultant powder produced from the process described in the Phillips Patent contains a low pore and core content. According to Professor O’Grady, the Phillips powders had on average approximately 2.3 metal cores and 0.05 pores when tested using TEM analysis. (O’Grady Tr. 761, 764-765). In addition, Professor O’Grady found that the Phillips powders had other properties similar to the powders produced from the ’799 Patent, including similarly high squareness ratios.

After reviewing the Phillips Patent in light of the ’799 Patent, the Court is not persuaded that the Sony Defendants have established by clear and convincing evidence that the ’799 Patent was anticipated by the Phillips Patent. The Phillips Patent does not mention pores and does not discuss the impact of pores on magnetic values. The Phillips Patent also does not discuss whether pores are present in the metal powders produced by the Phillips process and does not discuss methods to reduce or eliminate pores. Similarly, the Phillips Patent does not disclose metal cores as that term is used in the ’799 Patent.

The Sony Defendants contend that the fact that the reference does not expressly disclose these elements of the claimed invention is not relevant, because the elements are inherent in the Phillips Patent. The Court is not persuaded that the Sony Defendants have established inherency. Although Professor O’Grady .identified similar numbers of cores and pores in the Phillips powders and the ’799 powders, Professor O’Grady did not establish that these elements were “necessarily present” in the Phillips reference or that the Phillips’ disclosure was sufficient to show that these elements were the natural result flowing from the process as taught. In the Court’s view, Professor O’Grady’s testimony did not adequately address this issue and was, at best, conclusory in so far as inherency was concerned. Moreover, the evidence suggests difficulties with the replication of the powders produced by the Phillips process rendering those replications suspect. For example, the Phillips Patent does not provide specific guidance regarding the starting a-FeOOH material and the evidence indicates that there are many different ways of making this material using many different parameters, all of which would have an important effect on the resulting iron oxides and metal powders. (O’Grady Tr. 1230-1231; Buxbaum Tr. 32-35, 377, 1072-1074,1076-1077, 1080, 1088, 1090-1091, 1094-1099; Mallinson Tr. 1170-1171, 1188; Schroeder Tr. 459-461; Hisano Tr. 952, 1003-1005). The evidence also suggests that the process for making metal powders includes several conditions which could affect the end result such as the characteristic of ingredients used, ingredient and batch quantities, ingredient concentrations, sequence of ingredient additions, types of pre-treatments, temperatures, agitation and stirrer speeds and the type of equipment used. (Mallinson Tr. 1170-1171; Buxbaum Tr. 32-35; Schroder Tr. 459-461; Hisano Tr. 952-953, 1003-1005). Yet, the Phillips Patent does not provide specific guidance regarding these conditions, and those who prepared the powders for Professor O’Grady’s analysis were required to “fill-in” these gaps. As such, the Sony Defendants have not persuaded the Court that their reproduction was an accurate representative of the resulting powder from the prior art process described in Phillips. In addition, Professor O’Grady did not testify as to the remaining elements of the ’799 Patent, and therefore, the Court finds that the evidence is insufficient to show that each element of the claimed invention was present in the prior art reference expressly or inherently, such that the ’799 Patent was anticipated by the Phillips Patent. Accordingly, the Court concludes that the Sony Defendants have failed to establish by clear and convincing evidence that the ’799 Patent was anticipated by the Phillips Patent.

2. The Fuji Patent

The Fuji Patent, Japanese Patent Application No. 239-20939, was filed in the name of Akashi and published fifteen years before the ’799 Patent’s effective filing date. The Fuji Patent claims a process for making metal powders using a preliminary heating step. The a-Fe203 is heated at temperatures between 600°C and 900°C before it is reduced to metal. The goal of this heating step is to:

substantially enhance the packing density of said particles or the secondary grains consisting of an aggregate of the primary grains, and as a result acicular metallic iron particles obtained by the subsequent reduction will exhibit improved squareness properties in relation to their magnetic hysteresis loop as compared with the corresponding acicular metallic iron particles obtained by the same method but without said preheating treatment.

(DX 51). However, the Fuji Patent contains no data or analysis to show the actual effect of the preliminary heating on the particle morphology of the o-Fe203 or the morphology of the resulting metal powders.

As with the Phillips Patent, the Court concludes that the Sony Defendants have failed to establish by clear and convincing evidence that the ’799 Patent was anticipated by the Fuji Patent. The Fuji Patent makes no mention of pores or their impact on magnetic values. In addition, the Fuji Patent does not disclose whether pores are present in the metal powders produced by the Fuji process and does not discuss methods to eliminate pores. Further, the Fuji Patent does not discuss cores.

As with the Phillips Patent, the Sony Defendants contend that the core and pore elements are inherent in the Fuji reference. The Court disagrees. Although Professor O’Grady identified a similar number of cores and pores in the powders produced by the Fuji process, Professor O’Grady did not establish that these elements were “necessarily present” in the Fuji reference or that the Fuji disclosure was sufficient to show that these elements were the nature result flowing from the process as taught. In the Court’s view, Professor O’Grady’s testimony regarding inherency was conelusory in nature, and thus, insufficient to persuade the Court that the core and pore elements were inherently present in the Fuji reference. Further, the Court finds similar problems with regard to the reproducibility of the Fuji powders as those discussed in the context of the Phillips Patent, and the Sony Defendants have not persuaded the Court otherwise. In addition, the Court is not aware of any testimony or evidence directed to the remaining elements of the ’799 Patent. Accordingly, the Court finds that the evidence is insufficient to show that each element of the claimed invention was present in the prior art Fuji reference either expressly or inherently, and therefore, the Court concludes that the Sony Defendants have failed to establish that the ’799 Patent was anticipated by the Fuji Patent.

3. The Montedison Patent

The Montedison Patent, U.S. Patent No. 4,056,410, describes a process for preparing metallic iron based powders suitable for magnetic recording. This process is aimed at the pseudomorphic conversion of acicular particles of iron oxides or hydroxides to iron powders through reduction with a gas containing more than 50% by volume of hydrogen. (DX 20, Abstract). The Montedison patent recognizes that the pseudomorphic process is complicated in practice and attempts to avoid those complications by (1) incorporating certain additives like titanium and tin or cobalt nickel and silica into the oxide/hydroxide starting materials; (2) subjecting those materials to heating at temperatures of 400°C to 550°C in order to cause a reaction between the additive and the surface of the particle; and (3) reducing those materials in a 50% hydrogen containing gas at 340°C to 420°C. (DX 20, Col. 1, 11.27-45; Col. 2, 11.31-43; Col. 4, 11. 3-7).

The Sony Defendants contend that the ’799 Patent is anticipated by Montedi-son, because powders produced according to the examples of the Montedison patent result in powders with low core and pore content. Specifically, Professor O’Grady determined that the Montedison powder produced according to Montedison Example 6 contained approximately 4 cores and 0.05 pores, while the Bayer powder produced according to Bayer Example 1 contained approximately 4.3 cores and 0.1 pores. (DX 619 at 23).

After reviewing the Montedison Patent in light of the ’799 Patent, the Court is not persuaded that Defendants have established by clear and convincing evidence that the ’799 Patent was anticipated by Montedison. As with the Phillips and Fuji Patents, the Montedison patent contains no disclosure regarding cores and pores, their effect on magnetic properties, the manner in which to reduce pore and core content, or the number of cores and pores present in the powders. Further, unlike the heating step of the ’799 Patent which is directed to producing particles with low pore content and the structural stabilization described in the patent, the heating process described in the Montedison Patent is directed to causing a reaction between the additives and the surface of the particle. (DX 20, col. 4, 1. 3-7). Moreover, for the reasons discussed in the context of the Fuji and Phillips Patents concerning the accuracy of any reproductions of powders according to the prior art, the Court is not persuaded that the core and pore elements are present inherently in the Montedison reference. Indeed, even Professor O’Grady recognized that it is difficult to reproduce Montedison precisely, because it does not identify the precursor that was originally used. (O’Grady Tr. 806-807). . Accordingly, the Court finds that the evidence presented by the Sony Defendants is insufficient to show that each element of the claimed invention was present in the Montedison reference either expressly or inherently, and therefore, the Court concludes that the Sony Defendants have not established that the ’799 Patent was anticipated by the Montedison Patent.

B. Whether The ’799 Patent Is Invalid As Obvious

In pertinent part, 35 U.S.C. § 103 provides that a patent may not be obtained “if the differences between the subject matter sought to be patented and the prior art are such that the subject matter as a whole would have been obvious to a person having ordinary skill in the art ... ” 35 U.S.C. § 103. Obviousness is a question of law which is predicated upon several factual inquiries. Richardson-Vicks v. Upjohn Co., 122 F.3d 1476, 1479 (Fed.Cir.1997). Specifically, in determining whether a patent is invalid as obvious over the prior art, the trier of fa