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Bayer Intellectual Property GmbH v. Cap Im Supply, Inc.

United States District Court, D. Delaware

March 28, 2018

BAYER INTELLECTUAL PROPERTY GMBH, BAYER ANIMAL HEALTH GMBH, and BAYER HEALTHCARE, LLC, Plaintiffs,
v.
CAP IM SUPPLY, INC., Defendant.

          Jack Blumenfeld, MORRIS, NICHOLS, ARSHT & TUNNELL LLP, Wilmington, DE; Gary H. Levin (argued), Stephanie M. Papastephanou, Timothy J. Doyle, and Samuel A. McMahon, BAKER HOSTETLER LLP, Philadelphia, PA; Irene E. Hudson, BAKER HOSTETLER LLP, New York, NY. Attorneys for Plaintiffs

          John W. Shaw, Karen E. Keller (argued), and David M. Fry, SHAW KELLER LLP, Wilmington, DE. Attorneys for Defendant.

          MEMORANDUM OPINION

          ANDREWS, U.S. DISTRICT COURT JUDGE:

         Presently before the Court are Plaintiffs' motion for preliminary injunction (D.I. 6), and Defendant's cross-motion for summary judgment of non-infringement (D.I. 58), and Defendant's motion to strike (D.I. 96) both the declaration of Dr. Alan White (D.I. 81) and Plaintiffs' reply brief in support of their motion for preliminary injunction (D.I. 78). The issues have been fully briefed. (D.I. 7, 59, 78). The Court held oral argument on February 23, 2018. (D.I. 115). For the reasons stated herein, Plaintiffs' motion for preliminary injunction and Defendant's cross-motion for summary judgment are DENIED.

         I. BACKGROUND

Plaintiffs assert U.S. Patent No. 7, 728, 011 ("the 'Oil patent), which issued on June 1, 2010, and covers spot-on solutions for controlling fleas, ticks, and mosquitoes on animals. (D.I. 7, p. 1). Claim 1 of the '011 patent reads as follows:

1. A composition for controlling parasites on an animal comprising:
a. from about 35% to about 60% by weight of permethrin;
b. from about 2.5% to about 12.5% by weight of imidacloprid or an analog;
c. from about 27.5% to about 62.5% by weight of N-methylpyrrolidone;
d. from 0% to about 5% by weight of water;
e. from 0% to about 0.5% by weight of phenolic antioxidants; and
f. from 0% to about 0.5% by weight of at least one organic acid.

('011 patent, claim 1). Plaintiffs' K9 Advantix®II product embodies the '011 patent. (D.I. 7, p. 1). Its active ingredients are imidacloprid, permethrin, and pyriproxyfen, all of which are dissolved in the solvent N-methylpyrrolidone ("NMP"). (Id.). Plaintiffs distribute K9 Advantix®II in veterinary clinics and the pet specialty channel, which includes large pet-specialty retailers. (Id.).

         In 2014, Defendant began developing the accused products, which contain the same active ingredients as K9 Advantix®II. (D.I. 59, p. 2). The accused products' active ingredients are dissolved in a mixture of NMP and another solvent, dimethyl sulfoxide ("DMSO"). (Id.). Specifically, Defendant's Advecta™3 product contains 45.02% by weight permethrin; 8.80% by weight imidacloprid; 36.35% of an NMP/DMSO mixture, namely: 18.88% by weight NMP and 17.47% by weight DMSO; 0.39% by weight water, 0.11% by weight BHT (a phenolic antioxidant); and 0.03% by weight citric acid (an organic acid). (D.I. 7, p. 12).

         In April 2015, Defendant provided Plaintiffs with descriptions of the formulations of two of the accused products. (D.I. 60 at 13-14). Plaintiffs' August 19, 2015, response indicated that Plaintiffs could not assess infringement at that time, and could not do so until Defendant's formulations received marketing approval. (Id. at 14). In October 2015, Defendant sent a response letter taking the position that market approval is not necessary to assess infringement. (Id.). Though Defendant sent follow-up letters in December 2015 and June 2016, Defendant received no substantive response from Plaintiffs until September 15, 2016, when Plaintiffs sent Defendant a notice letter asserting that Defendant's products may infringe the '011 patent. (Id; D.I. 63-4 at 50). Defendant replied by letter on September 28, 2016, denying infringement and offering to discuss the matter further. (Id. at 51-52). On October 28, 2016, Plaintiffs replied, seeking compensation for Defendant's use of Plaintiffs' data to obtain EPA registration for its products, but making no mention of infringement. (Id. at 53-54). Defendant launched the accused products in January 2017. (D.I. 59, p. 3). Plaintiffs purchased two boxes of Defendant's Advecta™3 product on January 30, 2017, for testing by a third party. (D.I. 9, ¶¶ 3-5). The preliminary results were provided to Plaintiffs on March 7, 2017 (D.I. 10, ¶ 20), and the final results were completed on April 20, 2017 (D.I. 78, p. 19). Plaintiffs filed their complaint on May 22, 2017 (D.I. 1), and filed this motion approximately two weeks later on June 5, 2017 (D.I. 6).

         The spot-on product market comprises multiple generic and branded competitors and products, such as Bayer's K9 Advantix®II product, Frontline's fipronil product, and Sergeant's fipronil generics. (D.I. 115 at 21:15-22:23; D.I. 63-9 at 63-64, 78). As of June 2017, the entire spot-on product market was declining, due in part to customer migration to flea and tick products with other modes of administration, such as orally-administered products. (D.I. 115 at 20:23-21:1, 51:2-5; D.I. 63-9 at 76).

         II. LEGAL STANDARD

         A. Summary Judgment

         "The court shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(a). The moving party has the initial burden of proving the absence of a genuinely disputed material fact relative to the claims in question. Celotex Corp. v. Catrett, 477 U.S. 317, 330 (1986). Material facts are those "that could affect the outcome" of the proceeding, and "a dispute about a material fact is 'genuine' if the evidence is sufficient to permit a reasonable jury to return a verdict for the nonmoving party." Lamont v. New Jersey, 637 F.3d 177, 181 (3d Cir. 2011) (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986)).

         B. Preliminary Injunction

         Pursuant to 35 U.S.C. § 283, a court in a patent case "may grant injunctions in accordance with the principles of equity to prevent the violation of any right secured by patent, on such terms as the court deems reasonable." 35 U.S.C. § 283.[1] "The grant or denial of a preliminary injunction under 35 U.S.C. § 283 is within the sound discretion of the district court." Abbott Labs. v. Andrx Pharm., Inc.,452 F.3d 1331, 1334 (Fed. Cir. 2006). The Federal Circuit has "cautioned, however, that a preliminary injunction is a drastic and extraordinary ...


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