Evonik Degussa GmbH v. Materia Inc.

Filing 967

OPINION re: Motion for Permanent Injunction. Signed by Judge Noel L. Hillman on 8/9/2017. (fms)

UNITED STATES DISTRICT COURT
DISTRICT OF DELAWARE

EVONIK DEGUSSA GMBH,
Plaintiff,
v.
MATERIA, INC.,
Defendant.

APPEARANCES:
REED SMITH LLP
By: Eric J. Evain, Esq.
Rudolph E. Hutz, Esq.
R. Eric Hutz, Esq.
1201 Market Street, Suite 1500
Wilmington, Delaware 19801
Counsel for Plaintiff
MORRIS, NICHOLS, ARSHT & TUNNELL LLP
By: Jack B. Blumenfeld, Esq.
Thomas C. Grimm, Esq.
1201 N. Market Street
P.O. Box 1347
Wilmington, Delaware 19899
and
NIXON PEABODY LLP
By: Jason C. Kravitz, Esq.
Gina M. McCreadie, Esq.
Leslie Hartford, Esq.
100 Summer Street
Boston, Massachusetts 02110
and

Civ. No. 09-636 (NLH/JS)
OPINION

J.A. LINDEMAN & CO., PLLC
By: Aaron M. Raphael, Esq.
David R. Lipson, Esq.
3190 Fairview Park Drive, Suite 480
Falls Church, Virginia 22042
Counsel for Defendant

HILLMAN, District Judge:
Presently before the Court is Plaintiff Evonik’s post-trial
Motion for a Permanent Injunction.

At trial, the jury awarded

Evonik money damages for Defendant Materia’s pre-verdict
infringement of the ‘528 patent through September 30, 2016.
Evonik now seeks entry of a permanent injunction against
Materia’s continued infringement of the ‘528 patent.
The Court heard oral argument on the motion on June 20,
2017.

For the reasons stated herein, the motion will be

granted.
I.
The Court finds the following facts based on the evidence
admitted at trial, Materia’s Declaration of Mark Trimmer filed
in opposition to Evonik’s instant motion, and other undisputed
or stipulated facts. See Fed. R. Civ. P. 52(a)(2).
Evonik undisputedly owns the ‘528 patent, and commercially
sells metathesis catalysts covered by that patent. (Trial
Transcript, hereafter “TT”, p. 290, 294)

Materia also sells

metathesis catalysts, and is one of Evonik’s competitors in that

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market. (TT p. 305-06, 1374)

Indeed, as Materia elicited from

Evonik’s witness on cross-examination, Materia is Evonik’s
“primary competitor for olefin metathesis catalysts.” (TT p.
310)

Both companies sell their metathesis catalysts primarily

to clients in the pharmaceutical, oleochemical, fine chemical,
and polymer industries. (TT p. 295, 1366-67)
Evonik’s business plan has never included licensing the
patented technology to its competitors. (TT p. 305)

Even

further, Evonik has granted a license to practice the ‘528
patent only once. (TT p. 305)

That license was not granted to a

competitor, but rather to a customer (TT p. 305), and it was
granted in connection with the settlement of this lawsuit with
one of Materia’s co-defendants.
Evonik is much larger than Materia.

Evonik is a multi-

billion Euro company, with 30 sites in the United States, and
200 sites worldwide. (TT p. 278-80)

Materia has only two

locations: a headquarters in California and a manufacturing
facility in Texas. (TT p. 1365)
Materia has not made a profit during any of the years from
2008 through September 2016. (PTX1571.0023; see also TT p. 1370,
“Q: Is Materia profitable? A: No we’re not.”)

However, Mark

Trimmer, Materia’s Vice President and Chief Technology Officer,
states in his declaration, “Materia has sufficient funds to
cover the damages awarded by the jury in the amount of
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$1,550,916.95 and further royalty based on the jury’s 5.5%
reasonable royalty rate . . . along with any pre-judgment
interest, if awarded 1, as well as a reasonable ongoing royalty to
practice Claims 8-10 of the ‘528 Patent through the two-year
remaining life of that patent.” (Trimmer Decl. ¶ 5)

Trimmer

also testified that Materia’s revenues in 2015 and 2016 were “a
little over 28 million” dollars. (TT p. 1369-70)
Trimmer further states that Materia sells at least one
other type of catalyst-- the Grubbs I catalysts-- which
undisputedly are not covered by the ‘528 patent. (Trimmer Decl.
¶ 3)

However, Materia sells “far more” Grubbs II catalysts,

which are covered by the ‘528 patent. (TT p. 1369)
II.
“The [Court] may grant injunctions in accordance with the
principles of equity to prevent the violation of any right
secured by patent, on such terms as the court deems reasonable.”
35 U.S.C. § 283.
To obtain an injunction under § 283, “[a] plaintiff must
demonstrate: (1) that it has suffered an irreparable injury; (2)
that remedies available at law, such as monetary damages, are
inadequate to compensate for that injury; (3) that, considering

1

Evonik’s counsel stated at oral argument that “Evonik’s best
estimate at this time is that the prejudgment interest is at
least $250,000.” (June 20, 2017 Tr. p. 179)
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the balance of hardships between the plaintiff and defendant, a
remedy in equity is warranted; and (4) that the public interest
would not be disserved by a permanent injunction.” eBay Inc. v.
MercExchange, L.L.C., 547 U.S. 388, 391 (2006).

The patentee

must establish all four factors to obtain relief. Nichia Corp.
v. Everlight Ams., Inc., 855 F.3d 1328, 1344 (Fed. Cir.
2017)(“Because Nichia failed to establish one of the four
equitable factors, the court did not abuse its discretion in
denying Nichia’s request for an injunction.”).
“The decision to grant or deny permanent injunctive relief
is an act of equitable discretion by the district court.” eBay,
547 U.S. at 391.
III.
A.

Irreparable injury
“Where two companies are in competition against one

another, the patentee suffers the harm - often irreparable - of
being forced to compete against products that incorporate and
infringe its own patented inventions.” Douglas Dynamics, LLC v.
Buyers Prods. Co., 717 F.3d 1336, 1345 (Fed. Cir. 2013).

The

patentee’s unwillingness to license the patented technology also
weighs in favor of a finding of irreparable harm. Presidio
Components, Inc. v. Am. Tech. Ceramics Corp., 702 F.3d 1351,
1363-64 (Fed. Cir. 2012).

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The Court has found that Evonik and Materia are direct and
primary competitors in the commercial metathesis catalyst
market.

The Court has also found that Evonik has not, and will

not, license the ‘528 patent to competitors.

Thus, the Court

holds that Evonik will suffer irreparable harm without an
injunction.
B.

Inadequate remedy at law
The nature of the competitive relationship between Evonik

and Materia, as well as Evonik’s unwillingness to license the
‘528 patent, also weigh in favor of a conclusion that Evonik has
no adequate remedy at law. See Acumed LLC v. Stryker Corp., 551
F.3d 1323, 1327-28 (Fed. Cir. 2008); see generally ActiveVideo
Networks, Inc. v. Verizon Communs., Inc., 694 F.3d 1312, 1337
(Fed. Cir. 2012)(“As the district court correctly observed, the
issues of irreparable harm and adequacy of remedies at law are
inextricably intertwined.”).
“Additionally, ‘a patent holder’s . . . engagement in
lengthy litigation to protect [the] business decision,’ [not to
license the patented technology] as occurred here, also weighs
in favor of finding the remedy at law inadequate.” SanofiAventis Deutschland Gmbh v. Glenmark Pharms. Inc., USA, 821 F.
Supp. 2d 681, 694 (D.N.J. 2011)(quoting Federal Judicial
Center’s Patent Case Management Judicial Guide Table 9.1).

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Evonik also argues that Materia’s “questionable financial
condition,” Robert Bosch LLC v. Pylon Mfg. Corp., 659 F.3d 1142,
1155 (Fed. Cir. 2011), further supports a conclusion that Evonik
has no adequate legal remedy.

The Court however, finds Robert

Bosch distinguishable on this issue.
In Robert Bosch, the Court specifically stated, “the only
evidence of record is that [the infringer] likely will be faced
with a substantial damages award for its past infringement and
may be unable to pay even that.” 659 F.3d at 1156.
evidence here is different.

The record

While Materia’s financial condition

might be characterized as “questionable” in the sense that
Materia is not a profitable company, such a finding is not
tantamount to a finding that Materia will be unable to pay the
judgment in this case.

The evidence as to Materia’s ability to

pay - as distinguished from its profitability - is mixed, and
the Court does not find that it is “improbab[le] that [Evonik]
could collect a money judgment” from Materia. Robert Bosch, 659
F.3d at 1156.
Nonetheless, the Court concludes that the other abovediscussed factors weigh heavily in favor of a conclusion of
inadequate remedy at law.

Accordingly, the Court holds that

Evonik has sufficiently established this element.

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C.

Balance of hardships
This element “assesses the relative effect of granting or

denying an injunction on the parties.” Apple Inc. v. Samsung
Elecs. Co., 809 F.3d 633, 645 (Fed. Cir. 2015).

“[F]actors [the

Court may consider] include[] the parties’ sizes, products, and
revenue sources.” i4i Ltd. P’ship v. Microsoft Corp., 598 F.3d
831, 862 (Fed. Cir. 2010).
Materia clearly is a much smaller company.

The Court also

accepts as true Materia’s assertion that granting an injunction
will impose greater financial hardship on Materia, than not
granting an injunction would impose on Evonik.
However, relative financial hardship is but one factor the
Court considers in the equitable analysis.

“A party cannot

escape an injunction simply because it is smaller than the
patentee or because its primary product is an infringing one.”
Robert Bosch, 659 F.3d at 1156.
After eight years of litigation, during which Materia
continued to infringe the ‘528 patent, the Court must now give
due weight to Evonik’s right to exclude, pursuant to 35 U.S.C. §
154(a)(1), for the remaining two years of the life of the
patent.

Forcing Evonik to continue competing with its own

patented technology would impose a weighty hardship under the
circumstances of this case, and would be simply inequitable.

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The Court holds that the balance of hardships favors
Evonik.
D.

Public interest
Enforcing a patentee’s right to exclude furthers the public

interest.

“[T]he public interest nearly always weighs in favor

of protecting property rights in the absence of countervailing
factors, especially when the patentee practices his inventions.
‘The encouragement of investment-based risk is the fundamental
purpose of the patent grant, and is based directly on the right
to exclude.’” Apple Inc. v. Samsung Elecs. Co., 809 F.3d 633,
647 (Fed. Cir. 2015)(quoting Sanofi-Synthelabo v. Apotex, Inc.,
470 F.3d 1368, 1383 (Fed. Cir. 2006)).
Materia argues that two countervailing factors weigh
against granting an injunction.

First, Materia asserts that its

customers will be harmed if Materia is enjoined from making and
selling its Grubbs II catalyst.

According to Materia, “[t]here

is no immediate catalyst replacement without significant retesting and re-qualification by Materia and the customer.

This

means that an injunction will prevent companies who rely on
specific infringing catalysts from replacing that supply.”
(Opposition Brief, p. 15)
The Court concludes that this asserted harm is not
sufficiently weighty to outweigh the public interest in
enforcing Evonik’s patent.

The asserted harm is rather vague;
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Materia does not say what will happen if its customers cannot
“immediately” replace their supply of catalysts, and in any
event, Materia provides no evidence in this regard.
Second, Materia postulates its pharmaceutical customers
will be adversely affected because inability to use the Grubbs
II catalysts “will cause [those] customers to divert valuable
resources to find a substitute, if possible, and set back their
research and development,” thereby injuring the public health.
(Opposition Brief, p. 16)

The Court finds this argument

speculative and without evidentiary support.

As Evonik

correctly observes, Materia has not identified even one specific
customer that actually will be harmed by an injunction.
The Court holds that the public interest will not be
disserved by granting a permanent injunction.
E.

Scope of the injunction
Materia asserts that “Evonik’s requested injunction is

vague and overly broad and extends to catalysts that were not
accused of infringement.” (Opposition Brief, p. 16)

In

response, Evonik states that it “is willing to modify the
language to respond to legitimate objections or concerns.”
(Reply Brief, p. 8)
Accordingly, now that the Court has held that Evonik is
entitled to an injunction, the Court will direct the parties to

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meet and confer in an effort to create a mutually agreeable
proposed permanent injunction for the Court’s consideration.
IV.
For the reasons set forth above, the Court holds that all
four eBay factors weigh in favor of granting Evonik a permanent
injunction.

Accordingly, Evonik’s Motion for a Permanent

Injunction will be granted.

Dated: August 9, 2017
At Camden, New Jersey

__s/ Noel L. Hillman___
NOEL L. HILLMAN, U.S.D.J.

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