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Case 1:10-cv-01045-RMB-JS Document 263

Filed 04/12/12 Page 1 of 14 PageID #: 8499

IN THE UNITED STATES DISTRICT COURT

vtp

Tt1T(t

Plaintiff,

DOW AGROSCIENCES LLC,

Defendants.

OPINION AND ORDER

This matter is before the Court on defendant Dow Agrosciences LLCs 146]
.

(DAS) DAS

Motion for Leave to File an Amended Answer. to amend its answer to assert an

[D.I.

seeks

inequitable The Court (Bayer), to be

conduct counterclaim and related affirmative defenses. received the response of plaintiff Bayer Cropscience AG DABs reply, and held oral argument. For the

reasons

discussed, Background By

DABs motion is DENIED.

way

of

brief

background,

Bayer

filed

this

patent

infringement lawsuit regarding its 401 patent on December 3, 2010,

and denied in part Bayers motion to strike DABs fifth and seventh
affirmative defenses and hfHr6 counrerolaim. eve er
,

See December 30, 2011


sr
.

is

si

ii.

vs

eve

Case 1:10-cv-01045-RMB-JS Document 263

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fifth affirmative defense raising equitable estoppel, the motion was granted. Judge Burnb ruled that the defense was not pleaded As

with particularity as required pursuant to Fed. R. Civ P. 9(b). to DASs seventh affirmative defense alleging patent

misuse,

Bayers motion was denied.

However,

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. DASs 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 DASs failure to offer the particularity required by sounding in fraud. Fed. R. Civ. P. 9(b) for claims

Bayers request to dismiss the patent misuse

and prosecution history estoppel claims was denied. DASs inequitable motion seeks to to add the the affirmative affirmative defense defense of of

conduct,

re-plead

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

Case 1:10-cv-01045-RMB-JS Document 263

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the

PTO

relevant
issued.

information CAl avers

in

his but

possession for

before

the

401 to

natent

that

Timmis s

failure

disclose this material information,

the claims of the

401 patent (PAA)

as written would not have issued.


I44, 48,d. The withheld information at

Proposed Amended Answer

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 remaining claims therefore, also
of

4-D 401 the

the

and,

include

As will be discussed in more detail herein, the reason DASs 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, DASs amendment must be denied as futile. Delano Farms Co. v. California Table Grape Comn., 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 eraceo vl:adco roc roet aclcs

Case 1:10-cv-01045-RMB-JS Document 263

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limitation of biological activity of 2, 37. DAS also avers that

4D monooxygenase.

Ii.
401 a

the written description of the

patent describes only the disclosed gene--the tfdA gene--as monooxygenase. 38. However,

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 DASs 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 true because the patent

defines the biological activity of 2, ability to cleave the side at 2. chain Bayer

4-D monooxygenase as the of the herbicide argues 2, 4-D. exact

Answering

Brief

(AB)

further

the

mechanism of action of the enzyme (how it cleaves the side chain of 2,4-D) or the name given to the enzyme of the invention. j. is not Bayer relevant to the also argues its

patentability

nomenclature is not wrong.

Bayer alleges DASs argument is based

on a misreading of the prosecution history that cannot possibly be accepted. j. at 3. Bayer argues that since DASs arguments are

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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.
to

Bayer

arpued the

in PlC

its is

Brief not

that

its

alleged most

specific

intent

deceive

the

single

reasonable

inference to draw from the evidence.


pursue this defense at oral argument.

AB at 18-19.

Bayer did no:

Albeit,

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 DASs Infringement of Claims 1-3 and 8 of the 401 Patent [D,I. 111] and

DAB filed a Motion for Summary Judgment of Non-Infringement 218]


.

[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 DASs amendment the should be applies denied the
.

as

determining

futility

Court

same

standard of legal sufficiency as applies under Rule 12(b) (6) re Burlington Coat Factory Sec. Litig., 114 F.3d 1410,

1434

(3d

hAS also filed a Motion for Partial Summary Judgment that rDT Claims 4 and 5 are Invalid Because they are Indefinit 220)

Case 1:10-cv-01045-RMB-JS Document 263

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becirawr. 796
0

thr

Brown v.
.

Shillir: Uorris

Inc.,

250

5. 3d 799,

(3d jr.

2001)

The

factual allecations must be enouch when

a ora
Atlantic

o:e a
Corp. a v,

f:r :e:
Twombly, 550 U.S. s 554, 570 (2007).
speciric,

Bell

Determinono wherher

claim is

ulausible

ccnrex:

requiring the reviewing court to draw on its experience and common sense. Ashcroft v. Tqbal, 556 U.S. 662, 66364 (2009)

Although decisions related to a motion to amend are reviewed pursuant to regional conduct is law, a the sufficiency unique to of a pleading law and v. of is

inequitable

question

patent

therefore governed by Federal Circuit law. Mart Stores, Inc., 575 F.3d 1312, 1318

Exergen Corp. (Fed. Cir,

Wal The

2009).

standard for pleading a sufficient inequitable conduct defense was addressed in Exergen, 3 the accused infringer facts (1) from To successfully plead inequitable conduct must which include a court sufficient may allegations infer of the

underlying applicant falsity of

reasonably

knew of the withheld material information or of the material misrepresentation, and (2) withheld or

the

misrepresented this information with a specific intent to deceive the PTO, Id. at 1328-29,
Ili

Subsequent

to

Exergen

the

Federal

Corcuit issued Its cuinicu

Therasense, inc. v. aec:cn, iickinscn

1reqrabe conacr J an apnican:, wt iritert co rsead or 5 deree the eamuer, faols to iscose materal nfcrmation or
F!

F,3d 1309,

1313

(Fed.

Cir.

2006).

Case 1:10-cv-01045-RMB-JS Document 263

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slJng sca
[oun

arl sis ;here a eak showinc of ith


tr .how o

irtent

could h

s i.o. n Ld.

nt

rr orit,

versa. an

at 12O-l. conduct ic

Therasense

also hid that a pdrty xnakLg show but for an crniss ion or

inequitabe

claim must

:nLsYEure2nt,

of toe oto :
.

nil. cnL, at 129192. ht omitted efooe, t


:at

oh il

ouil ro

ho

allowed a patnt to issue. ai sufficient rirs facts to mn snow

orou-nr that it t

flAf to

1e a ma:eridi i

disclnse

ilct to the Pil. uti


one e

Payr 1
io

ailues,

rhat

flAPs andnont
Titois s

b oau

rio

so.;w

but

for

Oro salon

401 patent would not have issued.

The Court disagrees.

The

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to toe PiG out oreacteo toe ciuty oy not ciasoPosing tcie information (UI4243), and; asoose ris a:er 401 patent as written the (5 [but for at least Timrnis :ora:o to :e would not have issued forth (9144) in
.

failure a These arid

averment s

satisfy

requirements

set

Exerqen

sufficiently allege materiality and but for causation. Bayers argument as to materiality and but for causation does not appreciate the Courts standard of review at this stage of the proceedings. as true DABs As noted, in this context the Court must accept The Court may not weigh the

well-pleaded facts.

facts and address the merits of Bayers averments.

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 Inc., of the case.). at *3 also (D. Shionogi Del. Aug. Pharma, 31, Inc. v.

yian,

2011 WL 3860680,

2011),

This

is also not the appropriate time to rule on disputed issues of fact and claim construction. this very thing. of One the Nonetheless, example is Bayer asks the Court to do Bayers depended argument on

that

the

patentability

claims

never
SH

the on
-

distinction
2

example is Bayers argument that [t]he change in nomenclature used


to s

noater ca se:.oes
401 patent of the claimed biological

the definition given in the of 2, 4

mcnooxvaenase,

ahich the invenrior;s defined as

Case 1:10-cv-01045-RMB-JS Document 263

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of 2,4-ID.

Id,

at 6,

ifl addition,

Bayer argues the inventors

2,4ID.

Id,

at

7. Suffice it
to

DASs responses to these agumenzs. vigorously contested. Thus,

say they

are

DAS

since Bayers 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. goes to of the heart of the case

Bayers be

materiality argument addressed


in

and will and

the

context

Judge

Bumbs

Markman

summary

judgment rulings. and Bayer is right

If there are no genuine issues of material fact

as

to claim construction,

Bayers motion

for

partial summary judgment will be granted. necessary,

If that occurs,

and if

the Court can revisit Bayers 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, PTOs decision to issue the cateno had nothing to do with how the enzyme performed its, biological function, La., what cosubstrate it used, Id. at 3. Bayer
...

aciotion,

er 1 Ba araes one

nventors prcvideu ar expOlcit

,,

Case 1:10-cv-01045-RMB-JS Document 263

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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 partys pleading or whether the standard discussed in Exergen applies. of authority on the issue, the standard to be used Although there is a split

the Court finds that Exergen sets forth to analyze whether DASs inequitable

conduct charge pleads sufficient facts to set forth a viable claim for relief. One reason is that Therasense The discussed the

evidentiary standard to be used at trial. evaluate Exergen standard the the and sufficiency of the parties Court the distinguished clear and between

decision did not Second, in

pleadings. the Rule

9(b)

pleading to a

convincing

standard

applicable

review of the ultimate merits of the defense. Therasense decision, Delano Farms Co.,

Third,

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
Sanooz

C Inc
,

See 20il at 600715


,

Iteth aodnas Ccrporaton

il

Del

a resu:, from

one Court w:z1 exarnone whether inS pLeu su:rocienn tacos a re.asonable inference can be drawn that material

which

10

Case 1:10-cv-01045-RMB-JS Document 263

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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, is the only relevant that Timmis, a fact named DAS pleads to support inventor of the 401

allecation

patent,

was a co-author of a June 1995 published paper disclosing


.

that the tfdA gene was a dioxygenase. of this that (1) analysis the Court assumes (2) the

FAA 40.

For purposes averments

truth of DASs

this fact was material, the information to the

Timmis had an ongoing duty to and (3) Timmis failed to

disclose

PTO,

disclose the information.

Nonetheless,

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. A reasonable

inference is one that is plausible and that the facts alleged, and good faith.

flows logically from

including any objective indications of candor Exergen, 575 F.3d at 1329 n. 5. It is not

reasonable to infer that Timmis had a specific intent to deceive


lit

r ea

sce

ta

rs

published in his 1995 article.


coca not aliece tna t::rjnts

This is especially true since DAS


arm; rote or

prosecution of the

401 patent.

Also,

DAS does not even allege

II

Case 1:10-cv-01045-RMB-JS Document 263

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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 reclassification of the TidA enzyme was material to those events. AB at

Furthermore, DABs averment that Timmis deliberately withheld


information with the specific intent to deceive the FTC is at odds with

the

objective

fact

that in

Timmis 1995.

published
The

the

allegedly with

incriminating

information

June

Court

agrees

Bayers argument that DAB offers no reasonable explanation why Dr. Timmis would tell the whole world in a later publication something he didnt want the FTC to know.
,

at 19. Conversely, the Court


RB at 7.

disagrees with DAS that this was unremarkable.

To the

extent DAB argues that specific intent to deceive can be inferred

from the fact that the discovery revealed in Tinrniss 1995 article
was critically important, the argument is rejected. This argument As

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

Case 1:10-cv-01045-RMB-JS Document 263

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materiality, and decided not to submit it to the PTD oe t crc a soecific ntebo to cieceive. 649 F,3d at 1290. Thus, materiality and intent are evaluated

Id.

Of course,

since direct evidence of deceutive intent is rare,

a court can infer intent from indirect and circumstantial evidence. Id. Here, however, insufficient averments have been pled from

which the Court can make this inference. intent regional may be averred generally, our

Although knowledge and precedent like that of

circuits,

requires that the pleadings allege sufficient a

underlying facts

from which a court may reasonably infer that Exeregn,

party acted with the requisite state of mind, at 1327. The Court does not intent to deceive

575 F.3d

reasonably infer that Tirnxnis had a PTO simply because he failed to

specific

the

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, proceeds down that road DAS must
Teva D.N.J. 2010

RB at 3. plead a

However, before it proper


Inc.

charge
V.

of

inequitable Laboratories, 1 Health 2010 ; ; Inc.

conduct.

Accord

Neuroscience, Teb. WL
24,

Watson

2011 WL 741250 V. 1 Luoin Ltd.,

2011;

Teva Womens Oct. 27,

4392503

(D,N.J.

Rec t icel

Automcbi I bosreme

LmbH Mich.

Auo cmotive Nov. 3,

Comccnents

Hcldinus,

LLC,

2011 IlL 5307717

(S.D.

2011) ; Abaxis,

The 6 Court oboes no weioht to CAls oleacVno that rersons no facts to suuport this ccriclusory allegation.

13

Case 1:10-cv-01045-RMB-JS Document 263

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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

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