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

Filing 323

ORDER DENYING 293 PLAINTIFF/COUNTER-DEFENDANT'S MOTION FOR SUMMARY JUDGMENT RE: INEQUITABLE CONDUCT COUNTERCLAIM. Signed by Chief Judge Stanley A Bastian. (LAS, Case Administrator)

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FILED IN THE
U.S. DISTRICT COURT
EASTERN DISTRICT OF WASHINGTON

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Feb 05, 2024

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SEAN F. MCAVOY, CLERK

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UNITED STATES DISTRICT COURT

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EASTERN DISTRICT OF WASHINGTON

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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-

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Plaintiff/Counter-Defendant,

DEFENDANT’S MOTION FOR

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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,
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Defendants/Counter-Plaintiffs,

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v.

24 SUMMERLAND VARIETIES
25 CORPORATION,
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Third Party Defendant/

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Counter-Defendant.

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ORDER DENYING PLAINTIFF/COUNTER-DEFENDANT’S MOTION
FOR SUMMARY JUDGMENT RE: INEQUITABLE CONDUCT
COUNTERCLAIM ~1

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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.
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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.
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LEGAL STANDARD

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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.
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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

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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.
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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.
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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.
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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.
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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

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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

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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

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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.”
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ORDER DENYING PLAINTIFF/COUNTER-DEFENDANT’S MOTION
FOR SUMMARY JUDGMENT RE: INEQUITABLE CONDUCT
COUNTERCLAIM ~4

DISCUSSION

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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.
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Accordingly, IT IS HEREBY ORDERED:

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Plaintiff/Counter-Defendant’s Motion for Summary Judgment on

10 Defendants’ Inequitable Conduct Counterclaim, ECF No. 293, is DENIED.
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IT IS SO ORDERED. The District Court Clerk is hereby directed to enter

12 this Order and to provide copies to counsel.
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DATED this 5th day of February 2024.

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Stanley A. Bastian

Chief United States District Judge

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ORDER DENYING PLAINTIFF/COUNTER-DEFENDANT’S MOTION
FOR SUMMARY JUDGMENT RE: INEQUITABLE CONDUCT
COUNTERCLAIM ~5