BASF AGRO B.V., ARNHEM (NL), WADENSWIL BRANCH et al v. MAKHTESHIM AGAN OF NORTH AMERICA, INC. (MANA) et al
Filing
127
MEMORANDUM OPINION AND ORDER granting 78 Motion for TRO that Defendants, their officers, agents, servants, employees, attorneys, affiliates, and those persons in active concert or participation with Defendants are enjoined from using, importing, ma rketing, offering to sell, or selling in or to the United States, or inducing others to use, the accused products in this litigation and any other fipronil-related product in any manner that infringes the 010 or 743 patents or induces infringement th ereof. This Temporary Restraining Order shall remain in force until further order of this court. IT IS FURTHER ORDERED that Plaintiffs shall post a bond in the amount of $1 million (one million dollars). If Plaintiffs have not posted such a bond by 5:00 p.m. on April 15, 2011, the Temporary Restraining Order recited herein shall automatically dissolve except upon further order of this court. Signed by JUDGE WILLIAM L. OSTEEN JR. on 4/13/11. (Wilson, JoAnne) Modified on 4/13/2011 insert spacing (Wilson, JoAnne).
IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF NORTH CAROLINA
BASF AGRO B.V., ARNHEM (NL),
WADENSWIL BRANCH, et al.
Plaintiffs,
v.
MAKHTESHIM AGAN OF NORTH
AMERICA, INC. (MANA) et al.
Defendants.
)
)
)
)
)
)
)
)
)
)
)
)
1:10CV276
MEMORANDUM OPINION AND ORDER
OSTEEN, JR., District Judge
Presently before the court is Plaintiffs’ Motion for a
Temporary Restraining Order (Doc. 78).
For the reasons that
follow, this court grants that motion by order entered April 4,
2011, and recited here.
This court recognizes that the record in
this case is not yet fully developed.
Any findings or
conclusions in this Memorandum Opinion are based upon the limited
record as relates to Plaintiffs’ motion for a temporary
restraining order (“TRO”) and are made for the limited purpose of
deciding that motion.
These findings and conclusions are made
without prejudice to future presentations of evidence or
arguments by the parties.
This matter is before this court for review of the Report
and Recommendation (“Report”) filed on March 22, 2011, by the
1
Magistrate Judge in accordance with 28 U.S.C. § 636(b).
In the
Report, the Magistrate Judge recommends that Plaintiffs’ motion
for a TRO be granted.
(See Doc. 101 at 2.)
Defendants filed
timely objections (Doc. 108) to the Report, and Plaintiffs filed
a response (Doc. 109).
This court is required to “make a de novo determination of
those portions of the report or specified proposed findings or
recommendations to which objection is made.”
636(b)(1).
28 U.S.C. §
This court “may accept, reject, or modify, in whole
or in part, the findings or recommendations made by the
magistrate judge. . . . or recommit the matter to the magistrate
judge with instructions.”
Id.
This court has appropriately reviewed the portions of the
Report to which objection was made and has made a de novo
determination which is in accord with the Magistrate Judge’s
Report.
This court therefore adopts the Report as modified
herein.
I.
LEGAL STANDARD
“A plaintiff seeking a [TRO] must establish that he is
likely to succeed on the merits, that he is likely to suffer
irreparable harm in the absence of preliminary relief, that the
balance of equities tips in his favor, and that an injunction is
in the public interest.”
See Winter v. NRDC, Inc., 129 S. Ct.
365, 374 (2008) (citations omitted); see also, e.g., Martinez v.
2
RegisterFly, Inc., No. 1:07CV00188, 2007 WL 1028516, at *1
(M.D.N.C. Mar. 21, 2007) (applying the preliminary injunction
standard to a motion for a TRO).
“[I]njunctive relief [is] an
extraordinary remedy that may only be awarded upon a clear
showing that the plaintiff is entitled to such relief.”
Winter,
129 S. Ct. at 375-76 (citation omitted).
II.
ANALYSIS
As an initial matter, this court concludes that it has
jurisdiction to decide Plaintiffs’ motion for a TRO at this time.
It is undisputed that, as of the filing of the complaint in this
case, Defendants had not yet engaged in activities that
potentially infringe United States Patent Nos. 6,414,010 (“the
‘010 patent”) and 6,835,743 (“the ‘743 patent”).
However,
Plaintiffs assert, and this court agrees, that jurisdiction is
proper because Defendants have “taken concrete steps” and “made
meaningful preparation . . . with intent to engage in potentially
infringing activities” by, inter alia, obtaining fipronil
technical material and securing EPA approval of a master label1
for a fipronil-related product.
See Sierra Applied Scis., Inc.
v. Advanced Energy Indus., Inc., 363 F.3d 1361, 1378 (Fed. Cir.
2004) (internal quotation marks omitted).
1
“The [master] label of a termiticide provides important
use instructions that pest management professionals (“PMPs”) must
follow in order to comply with federal . . . regulations.”
(Potter Decl. (Doc. 95-4) ¶ 28.)
3
A.
Plaintiffs are likely to succeed on the merits
In order to satisfy the first prong of the test for
preliminary relief, Plaintiffs must show that they will likely
prove that Defendants will infringe at least one valid and
enforceable patent claim.
Abbott Labs. v. Andrx Pharm., Inc.,
473 F.3d 1196, 1201 (Fed. Cir. 2007) (citation omitted).
By statute, the ‘010 patent and the ‘743 patent are both
presumptively valid, as are all claims of those patents, and the
burden of establishing invalidity rests with Defendants.
U.S.C. § 282.
See 35
Defendants have raised issues as to the validity
of Plaintiffs’ patents and claims, but in light of the statutory
presumption and the limited record that is available at this
preliminary stage of the litigation, this court finds that
Defendants have not “establish[ed] a substantial question of
invalidity or unenforceability, i.e., that [Defendants are]
likely to succeed in proving invalidity or unenforceability of
the asserted patents.”2
(citations omitted).
See Andrx Pharm., Inc., 473 F.3d at 1201
This court therefore concludes that
Plaintiffs have sufficiently demonstrated, for purposes of
obtaining a TRO, that their patents and claims are valid.
This court also concludes that Plaintiffs have made the
2
Although the parties have briefed the Markman hearing
issues, no hearing has been held. Furthermore, Defendants
reference obviousness and other matters related to patent
validity that have not been fully briefed.
4
necessary showing that they will likely prove that Defendants
will infringe Plaintiffs’ patents.
Plaintiffs have presented
evidence that the methods protected by the ‘010 patent and the
‘743 patent are embodied by the Exterior Perimeter/Localized
Interior treatment method that is described in the master label
for Plaintiffs’ Termidor SC product.
(See Davis Decl. (Doc. 10-
3) ¶ 18; Potter Decl. (Doc. 95-4) ¶ 43.)
Further, Plaintiffs
have presented evidence that Defendants purposely conformed the
master label for their fipronil-related product as closely as
possible to the master label for Plaintiffs’ Termidor SC product,
such that there are no substantive differences between the
treatment methods described in the two labels.
(Doc. 95-4) ¶ 58.)
(Potter Decl.
Plaintiffs have also produced declarations
from expert witnesses stating their opinions that the master
label for Defendants’ fipronil-related product will induce
infringement of Plaintiffs’ patents.
(See Davis Decl. (Doc. 10-
3) ¶ 31; Potter Decl. (Doc. 95-4) ¶ 31.)
Based on this forecast
of evidence, this court concludes that Plaintiffs have
sufficiently demonstrated for present purposes that Defendants’
master label will induce infringement of the ‘010 patent and the
‘743 patent.
B.
Plaintiffs are likely to suffer irreparable harm in the
absence of preliminary relief
“Irreparable harm is presumed when a clear showing of patent
5
validity and infringement has been made.”
Amazon.com, Inc. v.
Barnesandnoble.com, Inc., 239 F.3d 1343, 1350 (Fed. Cir. 2001)
(citations omitted).
Plaintiffs have made the requisite showing
of patent validity and infringement, and Defendants have to this
point offered very little evidence to rebut the presumption of
irreparable harm.
This court therefore concludes that Plaintiffs
have adequately demonstrated that they are likely to suffer
irreparable harm in the absence of preliminary relief.
C.
The balance of equities tips in Plaintiffs’ favor
This court finds that, in the absence of preliminary relief,
Plaintiffs stand to “lose the value of [their] patent[s],”
whereas entry of a TRO would merely deprive Defendants of “the
ability to go on to the market and begin earning profits
earlier.”
See Glaxo Grp. Ltd. v. Apotex, Inc., 64 F. App’x 751,
756 (Fed. Cir. 2003).
This court also notes that Defendants’
potential loss of profit will be “secured by the issuance of [a]
bond if the ultimate ruling is non-infringement or patent
invalidity.”
See id.
For these reasons, this court concludes
that, for TRO purposes, the balance of equities weighs in
Plaintiffs’ favor.
D.
A TRO is in the public interest
The public interest weighs against “shifting market benefits
to the infringer while litigation is pending for patents that are
likely to withstand the attack” and thereby eroding “the
6
incentive for discovery and development of new products.”
See
Abbott Labs. v. Sandoz, Inc., 544 F.3d 1341, 1362 (Fed. Cir.
2008).
In short, “the public is best served by enforcing patents
that are likely valid and infringed.”
Abbott Labs. v. Andrx
Pharm., Inc., 452 F.3d 1331, 1348 (Fed. Cir. 2006).
Because
Plaintiffs have adequately demonstrated that their patents are
likely to be valid and that Defendants are likely to infringe
those patents, this court concludes that a TRO preventing such
infringement is in the public interest.
III. AMOUNT OF SECURITY
Federal Rule of Civil Procedure 65(c) provides: “The court
may issue . . . a temporary restraining order only if the movant
gives security in an amount that the court considers proper to
pay the costs and damages sustained by any party found to have
been wrongfully enjoined or restrained.”
Fed. R. Civ. P. 65(c).
This court has considered the parties’ arguments concerning the
proper amount of security (Docs. 117, 120) and finds that a bond
in the amount of $1 million (one million dollars) is sufficient
to pay Defendants’ costs and damages in the event Defendants are
found to have been wrongfully restrained.
In support of this determination, this court notes that
Defendants have not yet successfully registered their Taurus SC
product with EPA and that Defendants’ sales projection assumes
that EPA will approve Defendants’ pending registration
7
application.
This court observes further that Defendants have
not provided any documentation in support of their estimated
sales.
This court also notes that Defendants’ requested bond
amount represents Defendants’ sales projection for all of 2011,
rather than a sales projection based on a reasonable estimate of
how long this court’s TRO will remain in effect.
Even if this
court accepts, arguendo, Defendants’ assertion that the bulk of
termiticide sales takes place between April and June, this court
nonetheless finds that it would be excessive at this stage to
require Plaintiffs to secure Defendants’ projected sales for all
of 2011.
A motion for a preliminary injunction remains pending
before this court, and in the event that motion is granted, this
court will revisit the issue of the proper amount of security.
IV.
CONCLUSION
For the foregoing reasons, this court concludes that
Plaintiffs’ Motion for a Temporary Restraining Order (Doc. 78)
should be granted.
IT IS THEREFORE ORDERED that Defendants, their officers,
agents, servants, employees, attorneys, affiliates, and those
persons in active concert or participation with Defendants are
enjoined from using, importing, marketing, offering to sell, or
selling in or to the United States, or inducing others to use,
the accused products in this litigation and any other fipronilrelated product in any manner that infringes the ‘010 or ‘743
8
patents or induces infringement thereof.
This Temporary
Restraining Order shall remain in force until further order of
this court.
IT IS FURTHER ORDERED that Plaintiffs shall post a bond in
the amount of $1 million (one million dollars).
If Plaintiffs
have not posted such a bond by 5:00 p.m. on April 15, 2011, the
Temporary Restraining Order recited herein shall automatically
dissolve except upon further order of this court.
This the 13th day of April 2011.
United States District Judge
9
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?