## Facts

- Studiengesellschaft Kohle, m.b.H. (SGK) owned U.S. Patent No. 4,125,698 covering olefin polymerization processes using specified catalyst systems.
- Shell Oil Company held a patent portfolio license from SGK beginning in 1974; the parties renegotiated the relationship in 1987.
- The 1987 agreement granted Shell a paid-up license for up to 450 million pounds of polypropylene annually and imposed a 1.5% running royalty on polypropylene sales above that amount.
- Shell adopted a polypropylene production method at its Seadrift, Texas plant in 1987 and did not pay royalties on Seadrift-made polypropylene, asserting the process did not fall within the ’698 patent.
- SGK terminated the license in 1993 and sued for (1) unpaid royalties for 1987–1993 under the license and (2) infringement for Shell’s alleged post-termination use of the processes from 1993–1995.
- In district court, Shell obtained summary judgment that claims 1–6 and 14 were invalid based on failure to secure an earlier priority date in view of intervening prior art; the court also declined to reach certain infringement disputes (claim 13 and various polybutylene-related claims).
- The district court certified an interlocutory question asking whether SGK could recover damages for unpaid royalties for the period from breach until Shell first challenged patent validity, despite a later holding of invalidity.

## Issues

1. Whether claims in a continuation-in-part application may obtain an earlier effective filing date by combining support from multiple parent applications to avoid intervening prior art.
2. Whether infringement disputes concerning claim 13 (polypropylene operations) and claims 7, 9–12, and 15 (polybutylene operations) were properly before the district court.
3. Whether, after invalidity is found, a licensor may recover contract damages for unpaid royalties accruing between the alleged breach and the date the licensee first challenges validity.

## Decision

- Affirmed summary judgment that claims 1–6 and 14 were invalid because a claim cannot obtain an earlier filing date by combining multiple prior applications when no single parent provides full support.
- Reversed the district court’s refusal to address infringement disputes involving claim 13 and the polybutylene-related claims; remanded for adjudication on the merits.
- Answered the certified question yes: SGK could recover damages for breach of contract for unpaid royalties from the date of breach until the date Shell first challenged validity.

## Legal Principles

- A continuation-in-part claim is entitled to an earlier filing date only if a single earlier application provides adequate written-description support for the entire claim; an applicant may not combine multiple prior applications to construct an earlier priority date for an individual claim.
- When pleadings and the record place particular infringement theories in controversy, a district court must resolve them rather than dismiss them as not properly before the court.
- A licensee’s later success in proving patent invalidity does not automatically bar recovery of royalties that accrued before the licensee first challenged validity; enforcing pre-challenge royalty obligations is permissible when it does not materially conflict with the federal policy favoring validity challenges.

## Conclusion

The Federal Circuit held that invalidity followed from the inability to claim priority by mixing support from multiple parent applications in a continuation-in-part, required the district court to address properly presented infringement disputes, and permitted recovery of unpaid royalties accruing before the licensee’s first validity challenge even though the relevant patent claims were later held invalid.


Studiengesellschaft Kohle, m.b.H. v. Shell Oil Co., 112 F.3d 1561 (Fed. Cir. 1997)