Bayer CropScience AG v. Dow Agrosciences LLC
Filing
263
OPINION and ORDER- denying 146 MOTION to Amend/Correct. Signed by Judge Joel Schneider on 4/12/2012. (lih)
IN THE UNITED STATES DISTRICT COURT
vt’p
Tt1T(’t’
Plaintiff,
DOW AGROSCIENCES LLC,
Defendants.
OPINION AND ORDER
This matter is before the Court on defendant Dow Agrosciences
LLC’s
146]
(“DAS”)
DAS
.
“Motion for Leave to File an Amended Answer.”
seeks
to
amend
its
answer
to
assert
an
[D.I.
inequitable
conduct counterclaim and related affirmative defenses.
The Court
received the response of plaintiff Bayer Cropscience AG
(“Bayer”),
DAB’s
reply,
discussed,
and
held
oral
argument.
For
the
reasons
filed
this
to
be
DAB’s motion is DENIED.
Background
By
way
of
brief
background,
Bayer
patent
infringement lawsuit regarding its ‘401 patent on December 3, 2010,
and denied in part Bayer’s motion to strike DAB’s fifth and seventh
affirmative defenses and hfHr6 counrerolaim.
eve er
,
.
,
is
,
si
ii.
See December 30, 2011
sr
.
vs
eve
fifth affirmative defense raising equitable estoppel, the motion
was granted.
Judge Burnb ruled that the defense was not pleaded
with particularity as required pursuant to Fed. R. Civ P. 9(b).
to
DAS’s
seventh
affirmative
Bayer’s motion was denied.
defense
However,
alleging
patent
As
misuse,
Judge Bunt held that if DAS
intended to rely on a patent misuse claim that implicates fraud, it
needed to re-plead the defense with particularity.
DAS’s third
counterclaim for a declaratory judgment of unenforceability was
premised on the claim that the
‘401 patent was
invalid due to
equitable estoppel, patent misuse and prosecution history estoppel.
To the extent the counterclaim was based on equitable estoppel, it
was dismissed without prejudice because of DAS’s failure to offer
the particularity required by
sounding in fraud.
Fed.
R.
Civ.
P.
9(b)
for claims
Bayer’s request to dismiss the patent misuse
and prosecution history estoppel claims was denied.
DAS’s
inequitable
motion
seeks
conduct,
to
to
add
the
affirmative
defense
of
re-plead
the
affirmative
defense
of
equitable estoppel, to amend the existing patent misuse affirmative
defense, and to amend the existing counterclaim for a declaratory
judgment of unenforceability.
DAS Opening Brief
(“Brief”)
at 1.
At oral argument the parties agreed that these amendments rely on
the same core set of facts and the claims and defenses rise or fall
2
the
PTO
natent
relevant
issued.
information
CAl
avers
in
his
that
“but
disclose this material information,
as written would not have issued.
¶I44,
possession
for”
before
Timmis’ s
the claims of the
the
‘401
failure
to
‘401 patent
Proposed Amended Answer
(“PAA”)
48,d.
The withheld information at
issue relates to claim 1 of the
‘401 patent that recites the term “biological activity of 2,
monooxygenase.”
patent
depend
DAS
from
avers
claim
that
1
the
4-D
remaining claims
the
‘401
therefore,
and,
of
include
the
also
As will be discussed in more detail herein, the reason
DAS’s amendments rise or fall together is because they are all
premised on the allegation that Bayer committed fraud, e.g., it
acted with the specific intent to deceive the United States
Patent and Trademark Office (“ITO”)
If the fraud allegation is
not properly pled pursuant to applicable Federal Circuit
precedent, DAS’s amendment must be denied as futile.
Delano
Farms Co. v. California Table Grape Com’n., 655 F.3d 1337, 1350
(Fed, Cir. 2011)
(“A charge of inequitable conduct based on a
failure to disclose will survive a motion to dismiss only if the
plaintiff’ s comolaint recites facts from which the court may
reasonably infer that a soecific individual both knew of
invalidating information that was withheld from the ITO and
withheld that information with a specific intent to deceive the
PTC “
Notao , Deanc Farrns toes ot nstircc1s betqee’ a
se rasco
eoce
.
.
“ts Court toes not app idocb/Iqnal to affimati e
defenses,”
2011 Ut 6934557, at *4,
The same is true for the
rro tbt tnt a s no ‘er’aceo vl:adco roc
roet aclc±s
limitation of “biological activity of 2,
¶37.
DAS also avers
that
4—D monooxygenase.”
Ii.
the written description of the
‘401
patent describes only the disclosed gene--the tfdA gene--as
monooxygenase.
¶38.
However,
a
DAS avers that while the ‘401
patent application was pending, Timmis was one of the authors of a
June 1995 published paper revealing that the tfdA gene encoded a
dioxygenase,
not
a
monooxygenase.
According
to
DAS,
Timmis
“deliberately withheld this information with a specific intent to
deceive the PTO.”
j. fl45, 48.b.
Bayer opposes DAS’s amendment on futility grounds and asserts
two main arguments.
Bayer first argues the withheld information
was not material to the patent examiner during the prosecution of
the
‘401 patent.
Bayer contends the patentability of the claims
did not depend on the distinction between a wmonooxygenasel and a
“dioxygenase.”
Bayer
argues
this
is
defines “the biological activity of 2,
ability
to
Answering
“cleave
Brief
the
(“AB”)
side
at
chain”
2.
true
because
the
patent
4-D monooxygenase” as the
of
Bayer
the
herbicide
further
argues
2,
the
4-D.
exact
mechanism of action of the enzyme (how it cleaves the side chain of
2,4-D)
or the name given to the enzyme
patentability
of
the
invention.
nomenclature is not wrong.
j.
is not
Bayer
relevant to the
also
argues
its
Bayer alleges DAS’s argument is based
on a misreading of the prosecution history “that cannot possibly be
accepted.”
j. at 3.
Bayer argues that since DAS’s arguments are
4
futile, DAS cannot show that “but. icr” the fact Tirnnis withheld the
referenced information the
‘401 natent would not have issued.
Bayer’ s second main arcumen: is that hAS’ s defense is futile
because it does not adequately allege a specific intent to deceive
the
PTO.
intent
to
Bayer
arpued
deceive
the
in
its
PlC
is
Brief
not
that
the
inference to draw from the evidence.
its
single
alleged
most
AB at 18-19.
pursue this defense at oral argument.
Albeit,
specific
reasonable
Bayer did no:
Bayer still argues
DAS did not sufficiently plead that it intended to deceive the PTO.
Also relevant to this background discussion is the fact that
Bayer recently filed a Motion for Partial Summary Judgment on DAS’s
Infringement of Claims 1-3 and 8 of the
‘401 Patent
[D,I.
111]
DAB filed a Motion for Summary Judgment of Non-Infringement
218]
.
and
[D.I.
Oral argument on the motions as well as the Markman hearing
will be held in June 2012.
Discussion
As
futile.
noted,
In
Bayer
argues
determining
DAS’s
futility
amendment
the
should be
Court
applies
denied
the
standard of legal sufficiency as applies under Rule 12(b) (6)
re
Burlington Coat
2
Factory Sec.
Litig.,
114
F.3d
1410,
as
same
.
1434
(3d
hAS also filed a Motion for Partial Summary Judgment that
rDT
Claims 4 and 5 are Invalid Because they are Indefinit
220)
becirawr.
796
(3d jr.
2001)
e
a ora
Bell
Atlantic
0
Brown v.
thr
The
.
Shillir: Uorris
Determinono wherher
5. 3d 799,
f:r :e:
v,
a
250
factual allecations must be enouch when
o:e a
Corp.
Inc.,
Twombly,
claim is
550
U.S.
ulausible
554,
570
“ccnrex:
s
(2007).
speciric,
requiring the reviewing court to draw on its experience and common
sense.”
Ashcroft v.
Tqbal,
556 U.S.
662,
663—64
(2009)
Although decisions related to a motion to amend are reviewed
pursuant
to
inequitable
regional
conduct
law,
is
sufficiency
question
a
the
unique
to
therefore governed by Federal Circuit law.
Mart
Stores,
Inc.,
575
F.3d
1312,
1318
of
a
pleading
patent
law
Exergen Corp.
(Fed.
Cir,
of
and
v.
is
Wal
2009).
The
standard for pleading a sufficient inequitable conduct defense was
addressed in Exergen,
3
To successfully plead inequitable conduct
the
must
accused
underlying
applicant
falsity
of
infringer
facts
(1)
from
which
include
court
a
sufficient
may
allegations
reasonably
infer
of
the
knew of the withheld material information or of the
the
material
misrepresentation,
and
(2)
withheld
or
misrepresented this information with a specific intent to deceive
the
PTO,
Id.
at
1328-29,
Corcuit issued Its cuinicu
Ili
Subsequent
to
Exergen
the
Federal
Therasense, inc. v. aec:cn, iickinscn
1reqrabe conacr J an apnican:, wt iritert co r±sead or
5
deree the eamuer, faols to iscose materal
nfcrmation or
F!
F,3d 1309,
1313
(Fed.
Cir.
2006).
6
“slJng sca
s’ i.o. n
[oun
versa.
an
arl sis ;here a ‘eak showinc of
“
Ld.
ith
tr’
at 12O-l.
inequitabe
:nLsYEure’2nt,
conduct
ic
claim must
ai’
sufficient
rirs
facts
ilct to the Pil.
uti
one
e
b oau
mn
to
snow
Payr
1
show
of toe oto :
io
rr orit,
“but
nil. cnL,
for”
oh il’
at
orou-nr
ht
an
crniss ion
ouil ro
or
ho
1291—92.
.
that
it
omitted
t
efooe,
ailues,
rio
could h
also hid that a pdrty xnakLg
Therasense
allowed a patnt to issue.
nt
.how o
irtent
t
so.;w
:at
‘401 patent would not have issued.
7
“but
flAf
to
1e
disclnse
rhat
for”
a
ma:eridi
flAP’s andnont
Tit’ois’ s
i
Oro salon
The Court disagrees.
The
to toe PiG out oreacteo toe ciuty oy not ciasoPosing tcie
information (UI4243), and;
(5 “[but for at least Timrnis’
asoose ris a:er
‘401
patent
averment s
as
:ora:o to :e
written
satisfy
would
the
failure
not
have
requirements
a
issued”
set
forth
(9144)
in
These
.
Exerqen
arid
sufficiently allege “materiality” and “but for” causation.
Bayer’s argument as to “materiality” and “but for” causation
does not appreciate the Court’s standard of review at this stage of
the proceedings.
as
true
DAB’s
As noted,
in this context the Court must accept
well-pleaded facts.
The
Court may
facts and address the merits of Bayer’s averments.
not
weigh the
See In re Intel
Corp. Microprocessor Antitrust Litig., 496 F. Supp. 2d 404, 407 (D.
Del.
2007)
(“The
turpose
of a motion to
dismiss
is
to
test
the
sufficiency of a complaint, not to resolve disputed facts or decide
the
merits
yian,
of
Inc.,
the
case.”).
also
2011 WL 3860680,
Shionogi
(D.
Del. Aug.
at *3
Pharma,
31,
Inc.
2011),
v.
This
is also not the appropriate time to rule on disputed issues of fact
and claim construction.
Nonetheless,
this
example
very
thing.
patentability
of
One
the
claims
is
never
‘SH
Bayer asks the Court to do
Bayer’s
depended
argument
on
“
the
on
-
that
“the
distinction
2
example is Bayer’s argument that “[t]he change in nomenclature used
to
s
noater ca se:.oes
the definition given in the
of 2, 4
‘401 patent of the claimed ‘biological
mcnooxvaenase,
‘
8
ahich the invenrior;s defined as
of 2,4-ID.”
2,4—ID’.”
Id,
Id,
at
at 6,
ifl addition,
Bayer argues the “inventors’
7.
DAS’s responses to these agumenzs.
vigorously contested.
Thus,
Suffice it
to
say they
are
DAS
since Bayer’s materiality argument is
based upon disputed facts and a claim construction that has not yet
been issued,
the argument must be rejected at this time.
materiality argument
addressed
in
the
judgment rulings.
and Bayer
is
right
goes
to
context
of
the
heart
Judge
the
Bumb’s
case
Markman
and will
and
be
summary
If there are no genuine issues of material fact
as
to claim construction,
partial summary judgment will be granted.
necessary,
of
Bayer’s
Bayer’s motion
If that occurs,
for
and if
the Court can revisit Bayer’s argument.
4
Bayer also argues that DAS did not plead sufficient facts from
There are other examples of Bayer asking the Court to
prematurely rule on claim construction and to weigh and decide
disputed issues of fact.
Bayer argues, “[t]he exact mechanism of
action of the enzyme
or the name given to the enzyme has
never
been reevant to ane pater cf the invention.”
tabilirv
1
AS
2.
at
It also crones, “PTO’s decision to issue the cateno had
nothing to do with how the enzyme performed its, biological
function, La., what ‘co—substrate’ it used,”
Id. at 3.
Bayer
...
acio±tion,
er
1
Ba araes “one
nventors prcvideu ar expOlcit
,,
9
which a reasonable inference may be drawn that it acted with the
Therasense the Federal Cirouit wrote that the specific intent to
deceive must be the single most reasonable inference to be drawn
from the evidence.
lb.
at 1290.
Some confusion has arisen as to
whether this language applies to a party’s pleading or whether the
standard discussed in Exergen applies.
Although there is a split
of authority on the issue,
the Court finds that Exergen sets forth
the
to
standard
to
be
used
analyze
whether
DAS’s
inequitable
conduct charge pleads sufficient facts to set forth a viable claim
for
relief.
One
reason
is
that
Therasense
evidentiary standard to be used at trial.
evaluate
Exergen
the
the
standard
sufficiency of the parties’
Court
and
the
distinguished
clear
and
the
Therasense decision, Delano Farms Co.,
Rule
standard
review of the ultimate merits of the defense.
the
decision did not
pleadings.
between
convincing
The
discussed
Second,
9(b)
pleading
applicable
Third,
in
to
a
in a post
supra., the Federal Circuit
appeared to endorse the Exergp standard when discussing whether a
charge of inequitable conduct based on a failure to disclose will
sr
a
a
ooo
no
snss
Iteth aodnas Ccrporaton
C
Sanooz
See
Inc
,
20il at 600715
il
Del
—,
a resu:,
from
one Court w:z1 exarnone whether inS pLeu su:rocienn tacos
which
a
re.asonable
inference
10
can
be
drawn
that
material
this is the sinole most reasonable inference to be drawn from the
The PAA pleads that Timmis deliberately withheld the alleed
relevant information with the soecific intent to deceive the
FAA ¶50.
this
However,
allecation
patent,
the only relevant
is
that
Timmis,
a
fact
named
of this
analysis
that
this fact was material,
disclose
inventor
of
the
‘401
was a co-author of a June 1995 published paper disclosing
that the tfdA gene was a dioxygenase.
(1)
DAS pleads to support
the
the Court
information
assumes
to
disclose the information.
(2)
the
FAA ¶40.
.
the
For purposes
truth of DAS’s
averments
Timmis had an ongoing duty to
PTO,
and
Nonetheless,
(3)
Timmis
failed
to
the mere fact that Tirnnis
had this knowledge is not in an of itself sufficient to justify the
inference that “Timmis deliberately withheld this information with
a specific intent to deceive the PTO.”
FAA ¶45.
inference is one that is plausible and that
“A reasonable
flows logically from
the facts alleged,
including any objective indications of candor
and
Exergen,
good
faith.”
575
F.3d
at
1329
n.
5.
It
is
not
reasonable to infer that Timmis had a specific intent to deceive
e
lit
t
published in his 1995 article.
coca
not
aliece
tna
prosecution of the
r ea
sce
ta
rs
This is especially true since DAS
t::rjnts
arm;
‘401 patent.
rote
Also,
II
or
DAS does not even allege
DczL
jy
cZiiL.
pleadinc is any alienation that TirrLrnis was aware of the events that
occurrec curing patent prosecution or nao dcv reason to appreciate
that his knowledge of the re—classification of the TidA enzyme was
material to those events.”
AB at
Furthermore, DAB’s averment that Timmis deliberately withheld
information with the specific intent to deceive the FTC is at odds
with
the
objective
incriminating
fact
information
that
in
Timmis
June
1995.
published
The
the
Court
allegedly
agrees
with
Bayer’s argument that “DAB offers no reasonable explanation why Dr.
Timmis would tell the whole world in a later publication something
he didn’t want the FTC to know.”
,
at 19. Conversely, the Court
disagrees with DAS that this was “unremarkable.”
RB at 7.
To the
extent DAB argues that specific intent to deceive can be inferred
from the fact that the discovery revealed in Tinrnis’s 1995 article
was critically important, the argument is rejected.
This argument
resurrects the “sliding scale” analysis rejected in Therasense.
the Federal Circuit wrote:
[A] district court may not infer intent solely
from materiality.
Instead,
a court must
weight the evidence of intent to deceive
indeoendeni of its analysis of materiality.
tne
auoicant
anew
ci
a
referen cc,
should
have
known
of
its
parent prcsecctlcn s a reO neirinc” oucause 5 acanciteoged
e
under section 1002 of Title 18 the duty to disclose material
inference
that
TlnLmis
deliberately intended to deceive the PlO,
12
As
materiality, and decided not to submit it to
the PTD oe t crc a soecific ntebo to
cieceive.
649
F,3d
Id.
Of course,
at
1290.
Thus,
materiality
and
intent
are
evaluated
since direct evidence of deceutive intent is rare,
a court can infer intent from indirect and circumstantial evidence.
Id.
Here,
however,
insufficient
averments
which the Court can make this inference.
‘intent’
may
regional
circuits,
be
underlying facts
averred
generally,
have
1327.
specific
from
our
precedent
like
that
of
requires that the pleadings allege sufficient
from which a court may reasonably infer that
The Court does not
intent
pled
“Although ‘knowledge’ and
party acted with the requisite state of mind,”
at
been
to
deceive
Exeregn,
a
575 F.3d
reasonably infer that Tirnxnis had a
the
PTO
simply because
he
failed
to
disclose the finding in his 1995 article.
6
DAS argues all it seeks “is the chance to take discovery, and
to try its allegations if warranted,”
RB at 3.
However, before it
proceeds
plead
proper
down
inequitable
that
road
conduct.
DAS
Accord
Laboratories,
2011 WL 741250
1
Health
V.
2010 ; ;
Inc.
Rec t icel
Hcldinus,
LLC,
1
Luoin
must
Teva
Neuroscience,
D.N.J.
Ltd.,
2010
Automcbi I bosreme
2011 IlL 5307717
a
Teb.
WL
2011;
4392503
LmbH
(S.D.
24,
Mich.
Inc.
(D,N.J.
3,
V.
Watson
Oct.
13
27,
Comccnents
2011) ; Abaxis,
The
6 Court oboes no weioht to CAl’s oleacVno that rersons
no facts to suuport this ccriclusory allegation.
of
Teva Women’s
Auo cmotive
Nov.
charge
Accordingly, it is hereby ORDERED this 12th day of April, 2012, that
prejudice.
thirty
(30)
DAS
is
granted
leave
to
re-file
its
motion
within
days of its receipt of this Order.
s/Joel Schneider
JOEL SCHNEIDER
United States Magistrate Judge
14
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