Grain Processing Corp. v. American Maize-Products Co.

Grain Processing Corporation (Grain) (plaintiff) owned a patent for maltodextrin food additives and the processes for producing them. Grain sold maltodextrins under the brand name Maltrin. In 1979, American Maize Products Company (Maize) (defendant) began selling Lo-Dex 10, a waxy-starch maltodextrin, which it made using two processes. Grain sued Maize for infringement and obtained an injunction precluding Maize from producing and selling Lo-Dex 10. In 1991, Maize developed a new process for producing Lo-Dex 10. The new process used the enzyme glucoamylase, which was commercially available since the early 1970s. Despite this availability, Maize did not use the glucoamylase process until 1991 because it was more expensive than the previous processes. The glucoamylase process successfully produced non-infringing Lox-Dex 10. During the damages portion of Grain’s infringement suit, Grain claimed damages in the form of lost profits arising from lost sales of Maltrin. Grain alleged that the lost sales that would not have occurred but for Maize’s infringement. The district court denied lost profits, instead awarding a three percent reasonable royalty. Grain appealed. The Federal Circuit reversed and remanded. On remand, the district court again denied lost profits, finding that glucoamylase was an acceptable non-infringing substitute during the period of Maize’s infringement, and this precluded Grain’s claim of lost profits. Grain appealed.