Her Majesty the Queen in Right of Canada v. Van Well Nursery Inc et al

Filing 323


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1 FILED IN THE U.S. DISTRICT COURT EASTERN DISTRICT OF WASHINGTON 2 3 Feb 05, 2024 4 SEAN F. MCAVOY, CLERK 5 6 UNITED STATES DISTRICT COURT 7 EASTERN DISTRICT OF WASHINGTON 8 9 HER MAJESTY THE QUEEN IN RIGHT 10 OF CANADA AS REPRESENTED BY No. 2:20-CV-00181-SAB 11 THE MINISTER OF AGRICULTURE 12 AND AGRI-FOOD, a Canadian ORDER DENYING 13 governmental authority, PLAINTIFF/COUNTER- 14 Plaintiff/Counter-Defendant, DEFENDANT’S MOTION FOR 15 v. SUMMARY JUDGMENT RE: 16 VAN WELL NURSERY, INC., a INEQUITABLE CONDUCT 17 Washington Corporation; MONSON COUNTERCLAIM 18 FRUIT COMPANY, INC., a Washington 19 Corporation; GORDON GOODWIN, an 20 individual; and SALLY GOODWIN, an 21 individual, 22 Defendants/Counter-Plaintiffs, 23 v. 24 SUMMERLAND VARIETIES 25 CORPORATION, 26 Third Party Defendant/ 27 Counter-Defendant. 28 ORDER DENYING PLAINTIFF/COUNTER-DEFENDANT’S MOTION FOR SUMMARY JUDGMENT RE: INEQUITABLE CONDUCT COUNTERCLAIM ~1 1 Before the Court is Plaintiff/Counter-Defendant’s Motion for Summary 2 Judgment on Defendants’ Inequitable Conduct Counterclaim (Counterclaim No. 3 2), ECF No. 293. A hearing on the motion was held on January 11, 2024, by 4 videoconference. Plaintiff Her Majesty the Queen in Right of Canada, as 5 Represented by the Minister of Agriculture and Agri Food a Canadian 6 Governmental Authority, and Third-Party Defendant Summerland Varieties 7 Corporation, were represented by Jennifer D. Bennett, Michelle K. Fischer, Daniel 8 William Short and Garrett Fox. Defendant Monson Fruit Co., Inc. was represented 9 by Mark P. Walters and Mitchell D. West. Defendant Van Well Nursery, Inc. and 10 the Goodwin Defendants were represented by Quentin D. Batjer and Katie Merrill. 11 Plaintiff/Counter-Defendant moves for summary judgment on Defendants’ 12 counterclaim that alleges Plaintiff/Counter-Defendant engaged in inequitable 13 conduct in the prosecution of the Staccato patent. 14 LEGAL STANDARD 15 Summary judgment is appropriate “if the movant shows that there is no 16 genuine dispute as to any material fact and the movant is entitled to judgment as a 17 matter of law.” Fed. R. Civ. P. 56(a). There is no genuine issue for trial unless 18 there is sufficient evidence favoring the non-moving party for a jury to return a 19 verdict in that party’s favor. Anderson, 477 U.S. at 250. The moving party has the 20 initial burden of showing the absence of a genuine issue of fact for trial. Celotex 21 Corp. v. Catrett, 477 U.S. 317, 325 (1986). If the moving party meets its initial 22 burden, the non-moving party must go beyond the pleadings and “set forth specific 23 facts showing that there is a genuine issue for trial.” Anderson, 477 U.S. at 248. 24 In addition to showing there are no questions of material fact, the moving 25 party must also show it is entitled to judgment as a matter of law. Smith v. Univ. of 26 Wash. Law Sch., 233 F.3d 1188, 1193 (9th Cir. 2000). The moving party is entitled 27 to judgment as a matter of law when the non-moving party fails to make a 28 sufficient showing on an essential element of a claim on which the non-moving ORDER DENYING PLAINTIFF/COUNTER-DEFENDANT’S MOTION FOR SUMMARY JUDGMENT RE: INEQUITABLE CONDUCT COUNTERCLAIM ~2 1 party has the burden of proof. Celotex, 477 U.S. at 323. The non-moving party 2 cannot rely on conclusory allegations alone to create an issue of material fact. 3 Hansen v. United States, 7 F.3d 137, 138 (9th Cir. 1993). When considering a 4 motion for summary judgment, a court may neither weigh the evidence nor assess 5 credibility; instead, “the evidence of the non-movant is to be believed, and all 6 justifiable inferences are to be drawn in his favor.” Anderson, 477 U.S. at 255. FACTS 7 8 AAFC is a department of the Canadian government that operates a tree fruit 9 breeding program that developed the sweet cherry variety, Staccato, which is at the 10 heart of this litigation. AAFC has operated a tree fruit breeding program since 11 1924. Counter-Defendant Summerland Varieties Corporation (“SVC” f/k/a PICO) 12 is responsible for obtaining, managing, and licensing AAFC’s intellectual property 13 for selected fruit varieties. 14 A provisional application for United States Patent No. PP 20,551 P3 (“’551 15 Staccato patent”), entitled “Cherry Tree Named ‘13S2009’” was filed on March 16 13, 2002; the application was filed on March 6, 2003 and the ’551 Patent was 17 issued to AAFC on December 15, 2009. Ken Haddrell prepared the provisional 18 application for the ‘551 Staccato Patent. 19 The Court previously invalidated ‘551 Patent because it was on sale prior to 20 the “critical date,” which is one year prior to the effective filing date of the patent 21 application. Specifically, the Court found evidence of commercial sales of Staccato 22 based on Stemilt’s business records. 23 24 LAW Inequitable conduct is an equitable defense to patent infringement that, if 25 proved, bars enforcement of the patent. Therasense, Inc. v. Becton, Dickinson and 26 Co., 649 F.3d 1276, 1285 (Fed. Cir. 2011). It occurs when a patentee breaches their 27 duty to the US Patent and Trademark Office of candor, good faith, and honesty. Id. 28 To prevail on a claim of inequitable conduct, the accused infringer must ORDER DENYING PLAINTIFF/COUNTER-DEFENDANT’S MOTION FOR SUMMARY JUDGMENT RE: INEQUITABLE CONDUCT COUNTERCLAIM ~3 1 prove that the patentee acted with the specific intent to deceive the PTO. Id. 2 (citation omitted). A finding that the misrepresentation or omission amounts to 3 gross negligence or negligence under a “should have known” standard does not 4 satisfy this intent requirement. Id. (citation omitted). “In a case involving 5 nondisclosure of information, clear and convincing evidence must show that the 6 applicant made a deliberate decision to withhold a known material reference.” Id. 7 (quotation omitted). Stated another way, the accused infringer must prove by clear 8 and convincing evidence that the applicant knew of the reference, knew that it was 9 material, and made a deliberate decision to withhold it. Id. The party asserting inequitable conduct must prove a threshold level of 10 11 materiality and intent by clear and convincing evidence. Molins PLC v. Textron, 12 Inc., 48 F.3d 1172, 1178 (Fed. Cir. 1995). Intent and materiality are separate 13 requirements. Therasense, Inc., 649 F.3d at 1285. A district court may not infer 14 intent solely from materiality. Id. As the Federal Circuit instructed, specific intent 15 cannot be proven simply by showing that the applicant knew of a reference, should 16 have known of its materiality, and decided not to submit it to the PTO. Id. at 1290. “Because direct evidence of deceptive intent is rare, a district court may 17 18 infer intent from indirect and circumstantial evidence. . . To meet the clear and 19 convincing standards, the specific intent to deceive must be ‘the single most 20 reasonable inference able to be drawn from the evidence.’” Id. (quotation omitted). Determining at summary judgment that a patent is unenforceable for 21 22 inequitable conduct is permissible, but uncommon. Digital Control, Inc. v. Charles 23 Mach. Works, 437 F.3d 1309, 1313 (Fed. Cir. 2006). Summary judgment on 24 inequitable conduct is only appropriate if “the facts of materiality or intent are not 25 reasonably disputed.” A genuine issue of material fact is not raised by the 26 submission of “merely conclusory statements or completely insupportable, 27 specious, or conflicting explanations or excuses.” 28 // ORDER DENYING PLAINTIFF/COUNTER-DEFENDANT’S MOTION FOR SUMMARY JUDGMENT RE: INEQUITABLE CONDUCT COUNTERCLAIM ~4 DISCUSSION 1 2 Here, the facts as alleged by Defendants/Counter-Plaintiffs meet the 3 threshold level of materiality and intent by clear and convincing evidence. 4 Additionally, questions of fact exist that preclude summary judgment. Taking the 5 facts in the light most favorable to Defendants/Counter-Plaintiffs, the non-moving 6 party, a reasonable fact-finder could find that Plaintiff/Counter-Defendant 7 engaged in inequitable conduct. 8 Accordingly, IT IS HEREBY ORDERED: 9 1. Plaintiff/Counter-Defendant’s Motion for Summary Judgment on 10 Defendants’ Inequitable Conduct Counterclaim, ECF No. 293, is DENIED. 11 IT IS SO ORDERED. The District Court Clerk is hereby directed to enter 12 this Order and to provide copies to counsel. 13 DATED this 5th day of February 2024. 14 15 16 17 18 19 20 Stanley A. Bastian Chief United States District Judge 21 22 23 24 25 26 27 28 ORDER DENYING PLAINTIFF/COUNTER-DEFENDANT’S MOTION FOR SUMMARY JUDGMENT RE: INEQUITABLE CONDUCT COUNTERCLAIM ~5

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