Case 1:19-cv-01334-CJB Document 674 Filed 02/16/24 Page 1 of 6 PageID #: 17624
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE DISTRICT OF DELAWARE
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`MIDWEST ENERGY EMISSIONS CORP.
`and MES INC.,
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`Plaintiffs,
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`v.
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`ARTHUR J. GALLAGHER & CO., ET AL.,
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`Defendants.
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`Civ. No. 1:19-cv-01334-CJB
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`JOINT LETTER TO THE HONORABLE CHRISTOPHER J. BURKE
`REGARDING DISPUTE RAISED AT PRETRIAL CONFERENCE
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`February 16, 2024
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`VIA CM/ECF
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`The Honorable Christopher J. Burke
`United States District Court
` for the District of Delaware
`J. Caleb Boggs Federal Building
`844 N. King Street
`Unit 28, Room 2325
`Wilmington, DE 19801-3555
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`Dear Judge Burke:
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`Pursuant to the Court’s February 14, 2024 order, the parties provide their
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`respective positions regarding item 2 addressed at the pretrial conference (“Defendants’
`recently produced documents and their relation to the applicable standard for contributory
`infringement.”). The Parties positions are provided below:
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`Re: Midwest Energy Emissions Corp., et al. v. Arthur J. Gallagher
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`& Co., et al., C.A. No. 1:19-cv-01334-CJB
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`1
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`Case 1:19-cv-01334-CJB Document 674 Filed 02/16/24 Page 2 of 6 PageID #: 17625
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`ME2C’s position: The parties have disputed the appropriate standard for contributory
`infringement at the motion to dismiss and summary judgment stages. The Court has
`consistently affirmed that ME2C’s proposed articulation is appropriate for this case. See
`D.I. 611 at 7 (explaining dispute and concluding, “[t]he Court sides with Plaintiffs here.”).
`As explained by the Court most recently:
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`[T]o determine whether the “no substantial non-infringing uses” element of
`Plaintiffs’ contributory infringement claim has been met, we must look not
`to whether refined coal, as a general matter, has any substantial non-
`infringing uses. Rather, we must focus on whether the accused refined coal,
`as it was sold and delivered by Defendants to their power plant customers,
`could practically be used for purposes other than infringement.
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`D.I. 611 at 8; see also id. at 8 n. 6 (explaining that the relevant time period for this inquiry
`is during the damages period). Despite the Court’s resolution of this dispute, Defendants
`continue to propose their rejected legal standard for the final jury instructions. As to the
`contributory infringement factors, the parties propose:
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`1. that a power plant has directly infringed one or more claims of an asserted
`ME2C patent;
`2. that the Defendant sold that power plant refined coal made with calcium
`bromide;
`ME2C proposes:
`3. that the refined coal supplied to that power plant, as sold and
`delivered during the damages period, is not a staple article or commodity
`of commerce capable of substantial non-infringing use;
`4. that the refined coal constituted a material part of the claimed invention;
`and
`5. that the Defendant knew that the refined coal was especially made or
`adapted for use in an infringing method.
`Defendants propose:
`3. that refined coal made with calcium bromide was not a staple article
`or commodity of commerce capable of substantial non-infringing use;
`4. that refined coal made with calcium bromide constituted a material part
`of the invention of the asserted claim; and
`5. that the Defendant knew that refined coal made with calcium bromide
`was especially made or adapted for use in infringing the asserted claim.
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`The different proposals reflect one substantive dispute between the parties: what is
`the scope of the refined coal the jury must evaluate for contributory infringement? ME2C’s
`position is that it is the specific accused refined coal at issue in this case (i.e., “the refined
`coal supplied to that power plant”). In contrast, Defendants that it is all refined coal—
`even coal prepared for non-accused power plants that burn different ranks and categories
`of coal and refined coal sold before the patents issued.
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`The Court has already held that the factfinder must consider the circumstances of
`the coal actually at issue here. See D.I. 611 at 7 (collecting cases); see also Hodosh v.
`Block Drug Co.,
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`Case 1:19-cv-01334-CJB Document 674 Filed 02/16/24 Page 3 of 6 PageID #: 17626
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`Inc., 833 F.2d 1575, 1578 (Fed. Cir. 1987) (noting that the language of the contributory
`infringement statute “deals with the material actually sold by the accused and the uses
`made of it by its purchasers”) (emphasis added); i4i Ltd. P’ship v. Microsoft Corp., 598
`F.3d 831, 851 (Fed. Cir. 2010) (“Whether a use is ‘substantial,’ rather than just ‘unusual,
`far-fetched, illusory, impractical, occasional, aberrant, or experimental,’ cannot be
`evaluated in a vacuum. . . . In assessing whether an asserted noninfringing use was
`‘substantial,’ the jury was allowed to consider not only the use’s frequency, but also the
`use’s practicality, the invention’s intended purpose, and the intended market.” (emphasis
`added)), aff’d, 564 U.S. 91 (2011)); Env’t Mfg. Sols., LLC v. Peach State Labs, Inc., No.
`6:09-cv-395-Orl-28DAB, 2011 WL 1262659, at *16 (M.D. Fla. Mar. 31, 2011).
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`Because the jury will not be instructed by the Court as to the proper standard for
`contributory infringement until the final jury instructions, certain anticipated arguments
`from Defendants are likely to create a substantial risk of juror confusion (e.g., “It doesn’t
`matter if the accused power plants had no choice but to infringe; we couldn’t possibly
`contribute to infringement because there are some other suppliers that sold their version of
`refined coal to non-infringing power plants,” or “Defendants’ refined coal had a substantial
`non-infringing use before the patents issued, so they can’t contribute to infringement
`now.”). Each argument encourages the jury to depart from the Federal Circuit’s guidance
`that substantial noninfringing use cannot be evaluated “in a vacuum.” i4i, 598 F.3d at 851.
`If those arguments are permitted at trial, ME2C would at least request a curative instruction
`explaining that these arguments are irrelevant under the correct legal standard:
`Accordingly, ME2C requests that the Court adopt its jury instruction proposal for
`contributory infringement factors 3–5 before trial begins.
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`Moreover, under ME2C’s proposal and the Court’s previous rulings on the
`contributory infringement standard, Defendants’ proposed exhibits DTX-1968-1971 are
`inadmissible under Rule 403. These exhibits compare the accused refined coal tonnage to
`tonnage sold by non-accused power plants and/or to refined coal sold outside the damages
`period. Defendants have no legitimate basis for such comparisons.
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`During the pretrial conference, Defendants argued that these exhibits could be
`relevant to the issue of knowledge, but the relevant inquiry is whether Defendants knew
`that the accused refined coal (as sold and delivered) could contribute to infringement.
`Assuming Defendants have evidence, they can dispute the knowledge requirement without
`referencing non-accused refined coal. Indeed, it would be highly misleading to allow
`Defendants to argue that they lacked knowledge of infringement at their power plant
`customers during the damages period because they believed that other, non-accused refined
`coal suppliers were selling to non-infringing power plants.
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`As a specific example, DTX-1970 identifies refined coal sold “without ACI” by the
`Defendants. However, the amount of this “without ACI” refined coal correlates to the
`amount of refined coal sold before the EPA implemented mercury regulations and well
`before the damages period. This is apparently a recent, attorney-created document—
`having been produced for the first time in January 2024—and thus it could not be
`relevant to Defendants’ knowledge during the 2019–2021 damages period. Regardless,
`Defendants should not be able to confuse the jury into believing that it shows the accused
`refined coal in this case (sold between 2019–2021) being used without ACI. This risk of
`confusion outweighs any potential probative value for the document.
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`3
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`Case 1:19-cv-01334-CJB Document 674 Filed 02/16/24 Page 4 of 6 PageID #: 17627
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`Defendants’ Position:
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`The Formulation Charts. DTX-1968 shows the formulation (% MerSorb and %
`SSorb) of Refined Coal (“RC”) sold by each CERT RC entity to its associated power plant.
`The Formulation Charts show that the formula for RC remained the same over time and
`across power plants using different emissions control equipment, burning different coal
`types, before and after the patents issued, and, with stipulated facts (DI 658-1 ¶¶ 43-45),
`with and without activated carbon. Even with an “as made and delivered” limitation on
`substantial non-infringing uses (SNIU) § 271(c), the Formulation Charts are admissible at
`least as follows:
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`(1) To rebut ME2C’s assertion that Defendants’ RC was tailored for each plant. The
`formulation was the same regardless of the plant’s coal type and equipment configuration.
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`(2) To rebut ME2C’s assertion that RC’s formulation was adjusted for use with
`activated carbon injection (“ACI”) supplied by an accused power plant.
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`(3) To provide irrefutable evidence that Defendants’ RC was not “especially made and
`adapted to infringe,” 35 U.S.C. § 271(c), at least because: (a) a formula fixed before the
`Asserted Patents existed cannot be especially made and adapted to infringe a non-existent
`patent; (b) a formula that didn’t change after ACI was adopted and was the same as at a
`plant that never used ACI is not especially made and adapted for use with ACI.
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`(4) To refute state of mind under § 271(c). Because of the facts above, Defendants
`could not “know” that RC was especially made and adapted to infringe. The Formulation
`Charts show there is no triable issue of fact as to this element of Plaintiffs’ claim.
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`(5) To negate an inference of intent—“the purposeful, culpable expression and
`conduct” necessary to induce infringement, Global-Tech Appliances, Inc. v. SEB S.A., 563
`U.S. 754, 763 (2011)—based on the act of selling RC, where RC with the same formulation
`was sold before and after the Asserted Patents existed, to power plants with and without
`ACI. That RC with the same formulation was sold regardless of ACI use negates an
`inference such sales were made with a purposeful, culpable state of mind to cause or
`encourage any power plant to use ACI.
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`(6) To rebut an allegation of willfulness, at least because the Formulation Charts show
`the formula—prescribed and certified by the EERC to meet emissions reductions
`requirements of the United States Code without ACI—was set before the Asserted Patents
`existed, was not altered after issuance, and was not changed or adapted for ACI.
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`(7) To negate state of mind under both §§ 271(b)-(c), because a reasonable but legally
`erroneous belief one does not infringe is a complete defense (see point (4) below).
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`The Tonnage Charts. The Coal Tonnage Charts, DTX 1969 and 1970, show
`amounts of RC sold by Defendants before and after the Asserted Patents existed, to accused
`plants with and without the use of ACI, and to plants that never used ACI. Even under an
`“as made and delivered” limitation, the Tonnage Charts are admissible at least as follows:
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`(1) To show Defendants’ RC was not especially made and adapted to infringe, and that
`they did not believe that to be so (see points (3)-(4) above). The Formulation Charts show
`the formula and the Tonnage Charts show the extent of non-infringing use, corroborating
`the good faith and reasonableness of Defendants’ knowledge and belief.
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`Case 1:19-cv-01334-CJB Document 674 Filed 02/16/24 Page 5 of 6 PageID #: 17628
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`(2) To negate an inference of intent for inducement (see point (5) above). The Tonnage
`Charts will also rebut the factually incorrect argument that a power plant uses ACI because
`it is burning RC or that they must be used together. There is no link between the two.
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`(3) To rebut willfulness (see point (6) above). Also, that Defendants sold RC in large
`quantities to accused and non-accused (non-ACI) plants for the purpose of implementing
`a statutory clean coal program passed by Congress and only did so during the statutory
`period negates an inference that Defendants sold RC with an intent to cause infringement.
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`(4) While Defendants respectfully disagree with the use of an extra-statutory “as made
`and delivered” limitation to exclude SNIU, even under such a rule, the Tonnage and
`Formulation Charts are admissible. A reasonable but legally erroneous belief that one does
`not infringe is a complete defense to induced and contributory infringement:
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`Qualifying or limiting [Global–Tech’s] holding, as the Government and Commil
`seek to do, would lead to the conclusion, both in inducement and contributory
`infringement cases, that a person, or entity, could be liable even though he did not
`know the acts were infringing. In other words, even if the defendant reads the
`patent’s claims differently from the plaintiff, and that reading is reasonable, he
`would still be liable because he knew the acts might infringe. Global–Tech requires
`more. It requires proof the defendant knew the acts were infringing. And the Court’s
`opinion was clear in rejecting any lesser mental state as the standard.
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`Commil USA, LLC v. Cisco Systems, Inc., 575 U.S. 632, 642 (2015). This rule applies even
`if the belief relates to a putative defense that’s not legally cognizable. Kinetic Concepts,
`Inc. v. Blue Sky Medical Group, Inc., 554 F.3d 1010, 1024-25 (2009) (testimony that
`defendant did not believe it was inducing infringement because it was “practicing the prior
`art,” which isn’t a defense, was “substantial evidence” supporting jury verdict that it lacked
`“necessary intent to induce”). Excluding evidence showing why Defendants did not believe
`they were infringing—even if legally erroneous—is contrary to Commil and Kinetic.
`Section 271(c) creates infringement liability for sale of a “material” “constituting a material
`part of the invention” with knowledge “the same” is not “suitable for substantial
`noninfringing use.” Here, the “material part of the invention” as defined by the asserted
`claims and Plaintiffs’ expert is “coal with added bromine,” D.I. 546-1, Ex. A, ¶ 111.
`Defendants reasonably believe that SNIU (a) should be based on that which “constitutes
`the material part of the invention” as defined in the claims; and (b) should not be limited to
`uses of only the subset of accused products selected by Plaintiffs as used on site by the
`direct infringer, In re Bill of Lading, 681 F.3d 1323, 1338 (Fed. Cir. 2012) (“These
`allegations are tailored too narrowly; they say nothing more than ‘if you use this device to
`perform the patented method, the device will infringe and has no noninfringing uses.’ But
`that is not the relevant inquiry.”). Defendants have a reasonable belief that the sales of the
`claimed “coal with added bromine” as shown on the Formulation and Tonnage Charts are
`SNIU. Under Commil and Kinetic, these exhibits are admissible to show state of mind.
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`In the interest of narrowing the dispute, Defendants withdraw DTX 1971.
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`Case 1:19-cv-01334-CJB Document 674 Filed 02/16/24 Page 6 of 6 PageID #: 17629
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`Dated: February 16, 2024
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`DEVLIN LAW FIRM LLC
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`/s/ James M. Lennon
`James M. Lennon (No. 4570)
`1526 Gilpin Avenue
`Wilmington, DE 19806
`(302) 449-9010
`jlennon@devlinlawfirm.com
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`OF COUNSEL:
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`Bradley W. Caldwell
`Jason D. Cassady
`John Austin Curry
`Justin T. Nemunaitis
`Warren J. McCarty, III
`Daniel R. Pearson
`Adrienne R. Dellinger
`Aisha Mahmood Haley
`Richard A. Cochrane
`CALDWELL CASSADY CURRY PC
`2121 N. Pearl Street, Suite 1200
`Dallas, Texas 75201
`Phone: (214) 888-4848
`Fax: (214) 888-4849
`bcaldwell@caldwellcc.com
`jcassady@caldwellcc.com
`acurry@caldwellcc.com
`jnemunaitis@caldwellcc.com
`wmccarty@caldwellcc.com
`dpearson@caldwellcc.com
`adellinger@caldwellcc.com
`ahaley@caldwellcc.com
`rcochrane@caldwellcc.com
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`Attorneys for Plaintiffs Midwest
`Energy Emissions Corp. and MES
`Inc.
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`Respectfully submitted by,
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`MORRIS JAMES LLP
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`/s/ Kenneth L. Dorsney
`Kenneth L. Dorsney (#3726)
`Cortlan S. Hitch (#6720)
`500 Delaware Avenue, Suite 1500
`Wilmington, DE 19801
`(302) 888-6800
`kdorsney@morrisjames.com
`chitch@morrisjames.com
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`OF COUNSEL:
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`Jeff Dyess
`Paul Sykes
`Benn Wilson
`Ashley M. Robinson
`BRADLEY ARANT BOULT CUMMINGS LLP
`1819 Fifth Avenue North
`Birmingham, AL 35203
`Telephone: (205) 521-8000
`Facsimile: (205) 521-8800
`Email: jdyess@bradley.com
`psykes@bradley.com
`bcwilson@bradley.com
`amrobinson@bradley.com
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`Jessica Zurlo
`BRADLEY ARANT BOULT CUMMINGS LLP
`1615 L Street NW
`Ste 1350
`Washington, D.C. 20036
`Telephone: (202) 393-7150
`Facsimile: (202) 347-1684
`Email: jzurlo@bradley.com
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`Attorneys for Defendants CERT Operations IV
`LLC, CERT Operations V LLC, CERT Operations
`RCB LLC, CERT Operations II LLC, Senescene
`Energy Products, LLC, Springhill Resources LLC,
`Buffington Partners LLC, Bascobert (A) Holdings
`LLC, Larkwood Energy LLC, Cottbus Associates
`LLC, Marquis Industrial Company, LLC, Rutledge
`Products, LLC
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`6
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