Carnegie Institution of Washington v. Pure Grown Diamonds, Inc.

Background

The court considered two consolidated patent-infringement actions. Carnegie Institute of Washington was the assignee of the two patents-in-suit, and M7D Corporation was their licensee with rights to enforce them. The plaintiffs sued Pure Grown Diamonds, Inc. and IIa Technologies PTE, Ltd. (collectively, “PGD”) in one action and Fenix Diamonds LLC in the other. They alleged direct, induced, and willful infringement.

The first patent, U.S. Patent No. 6,858,078, concerns a method for growing single-crystal diamonds through microwave plasma chemical vapor deposition. Among other limitations, the claimed method requires controlling temperature gradients across the diamond’s growth surface. The second patent, U.S. Patent No. RE41,189, concerns a method for improving the optical clarity of chemical-vapor-deposition diamonds through high-temperature and high-pressure treatment.

Motions to Dismiss

PGD argued that the asserted claims were ineligible for patent protection under 35 U.S.C. § 101 because they were directed to natural phenomena. Fenix did not make that argument. The court applied the framework for determining whether patent claims are directed to a natural phenomenon and, if so, whether they contain an inventive concept.

The court held that the § 101 inquiry ended at the first step because neither patent was directed to a natural phenomenon. The ’078 Patent described laboratory production of synthetic diamonds under conditions and on a time scale different from natural diamond formation. The ’189 Patent described a method of annealing diamonds in a manner that does not occur in nature. The court explained that applying principles of chemistry and physics to a new and useful laboratory process can be patentable. It also stated that PGD’s arguments more closely concerned whether the inventions were an insufficient advance over prior art, an issue the court said was properly reserved for a later stage.

All defendants moved under Federal Rule of Civil Procedure 12(b)(6), which allows dismissal for failure to state a legally sufficient claim. The court held that the complaints plausibly alleged direct infringement because they alleged that the defendants manufactured, imported, or sold high-quality Type IIa diamonds produced through the microwave plasma chemical vapor deposition process and inferred that the diamonds were made using the patented processes. Although the factual basis was limited, the court found it minimally sufficient.

The court also found the allegations of induced and willful infringement sufficient at the pleading stage. It relied on allegations about the general notoriety of the patents in the relevant field and, as to PGD, the fact that its Chief Technical Officer was the named inventor on at least seven diamond patents. The court described this issue as close but sufficient to support a plausible inference that the defendants knew of the patents-in-suit.

The court therefore denied the defendants’ motions to dismiss in their entirety.

Claim Construction

Because the complaints survived dismissal, the court construed disputed patent terms after a claim-construction hearing. Claim construction is the court’s determination of what patent-claim language means to a person of ordinary skill in the relevant field.

For the ’078 Patent, the court construed “controlling temperature of a growth surface of the diamond such that all temperature gradients across the growth surface are less than 20°C” to mean that the temperature gradients across the growth surface are “maintained at less than 20°C.” The court rejected the defendants’ proposed limitation requiring measurements only between the middle and an edge of the growth surface. It also rejected a proposed requirement that those particular measurements be used to control all gradients, but added the temporal requirement that the gradients remain below 20°C during the growth process.

The court adopted Fenix’s construction of “the growth surface” as “the surface upon which diamond growth is occurring.” It explained that the growth surface begins at the exterior surface of the diamond seed and shifts outward as new diamond forms. The construction was not limited to areas where only single-crystal diamond grows and therefore could include localized polycrystalline growth.

For the ’078 Patent’s temperature and pressure limitations, the court held that the relevant temperature was the temperature of the growth surface, not the temperature of the deposition chamber as a whole. It also held that the specified conditions had to apply during a substantial portion of the growth process, while rejecting the word “maintained” as too restrictive because the claims use the term “comprising.” The court instead construed the relevant conditions as being “set” at the specified temperature and pressure.

For the ’189 Patent, the court held that the phrase “to improve the optical clarity of [a] CVD diamond” was nonlimiting because it appeared in the claim preamble and described the purpose or intended use of the method rather than an additional required step. The court adopted the parties’ stipulated construction of the temperature-and-pressure limitation. Under that construction, the diamond must be subjected to a temperature above 1500°C, a pressure of at least 4.0 gigapascals, and a temperature-pressure combination below the diamond-graphite boundary.

For both patents, the court adopted PGD’s construction of “single-crystal diamond” and “single crystal CVD diamond”: a stand-alone diamond made by chemical vapor deposition with insubstantial non-monocrystalline growth. The court rejected the plaintiffs’ broader construction because it could erase the distinction in the ’078 Patent between “substantially single-crystal diamond” and “single crystal diamond.” The court chose PGD’s construction over Fenix’s because PGD’s wording accounted for forms of non-single-crystal growth beyond polycrystallinity.

Disposition

The court denied defendants’ motions to dismiss in their entirety and adopted the claim constructions stated in the opinion. The opinion did not enter judgment on the infringement claims; it resolved the pleading challenges and claim-construction disputes at this stage of the litigation.