Bayer CropScience AG v. Dow Agrosciences LLC, No. 1:2010cv01045 - Document 263 (D. Del. 2012)
Court Description: OPINION and ORDER- denying 146 MOTION to Amend/Correct. Signed by Judge Joel Schneider on 4/12/2012. (lih)
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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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