United States District Court, M.D. North Carolina
MEMORANDUM OPINION AND ORDER
Catherine C. Eagles, District Judge.
Crop Protection, LLC has sued four affiliated companies
denominated collectively here as Willowood,  alleging patent
and copyright infringement. Syngenta contends Willowood has
infringed its patents in connection with the manufacture and
sale of Willowood's Azoxy 2SC, AzoxyProp Xtra, and
Tebustrobin S.C. products and has infringed its copyrights by
verbatim copying of Syngenta product labels. Syngenta seeks
partial summary judgment on Counts I through IV, asserting
that its 5, 602, 076 Patent, 5, 633, 256 Patent, 5, 847, 138
Patent, and 8, 124, 761 Patent are valid and that Willowood
infringed the patents. Syngenta makes related evidentiary
objections to opinion testimony by the defendant's expert
Dr. Mark A. Lipton. Willowood seeks summary judgment on Count
IV, asserting that its products do not infringe the '761
Patent as a matter of law, and on Counts V and VI, asserting
that Syngenta does not have a valid copyright and that its
copying constituted fair use.
Court will grant in part and deny in part Syngenta's
motion for summary judgment and will deny Willowood's
motion for summary judgment as to Count IV. The Court retains
under advisement Willowood's motion for summary judgment
as to Counts V and VI, which will be resolved by separate
following facts are undisputed. Syngenta holds several
patents protecting azoxystrobin, a fungicidal compound used
to protect various crops, and the process for making
The '076 and '256 Patents expired on February 11,
2014, and the ' 138 Patent expired on December 8, 2015.
Doc. 96-1 at ¶ 29, 30. The '761 Patent will expire
in April 2029. Id. at f 31. Willowood sells generic
versions of crop-protection products, including the generic
azoxystrobin fungicides Azoxy 2SC and AzoxyProp Xtra. Doc. 12
at ¶¶ 73, 75; Doc 16 at ¶¶ 4, 8.
Willowood and Syngenta use azoxystrobin technical, a
relatively pure form of the chemical compound azoxystrobin,
as the active ingredient in their azoxystrobin fungicides.
Doc. 96-1 at ¶¶ 34-35; Doc. 12 at ¶ 37
(admitting allegation in Doc. 1 at ¶ 37).
Count I (the '076 Patent) and Count II (the '256
moves for summary judgment on these two counts, contending
that the evidence shows that the two patents are valid and
that Willowood infringed the patents. The Court views the
evidence in the light most favorable to Willowood, the
non-moving party, as is appropriate at summary judgment.
are "presumed valid, " 35 U.S.C. § 282(a),
unless the defendant can show invalidity by clear and
convincing evidence. Microsoft Corp. v. Mi Ltd.
P'ship, 564 U.S. 91, 95 (2011); Insite Vision
Inc. v. Sandoz, Inc., 783 F.3d 853, 858 (Fed. Cir.
2015). Willowood presents no evidence of invalidity for
either the '076 or '256 Patents. Doc. 137 at
17:13-18:15. The Court will grant summary judgment for
Syngenta on this issue.
'076 and '256 Patents claim a group of chemical
compounds, which include azoxystrobin. Docs. 1-8, 1-9; Doc.
96-1 at ¶¶ 74, 87. In 2013, W-Ltd bought five
kilograms of azoxystrobin technical from its Chinese
supplier, Yangcheng Tai He Chemicals Corp., ("Tai
He"), and sold it to W-USA. See Doc. 137 at
41:12-: 15; Doc. 105 at 6-7 n.3; Doc. 15 at ¶ 6, W-USA
imported the five kilograms of azoxystrobin technical into
the United States before the expiration of the two patents.
Doc. 96-7 at 3; Doc. 96-9 at 5, 6. W-LLC commissioned
Adjutants Unlimited, Inc. to formulate fungicides using
azoxystrobin technical and to create product samples.
See Doc. 137 at 26:3-:7. W-LLC then commissioned
Analytical & Regulatory Chemistry, Inc. (ARC) to analyze
the product samples for its EPA applications. Doc. 96-7 at 3;
Doc. 96-10 at 41:21-42:10. Before performing these studies,
and before importing the azoxystrobin technical, Willowood
knew of the '076 and '256 Patents and knew that these
activities would likely infringe the patents. See
Doc. 96-7 at 3; Doc. 96-10 at 305:11-:18.
Direct Infringement by W-USA and W-Ltd
who "makes, uses, offers to sell, or sells any patented
invention, within the United States or imports into the
United States any patented invention" without the patent
holder's permission has infringed the patent. 35 U.S.C.
concedes that in 2013, W-USA infringed the '076 and
'256 Patents by importing five kilograms of azoxystrobin
technical into the United States. Doc. 96-9 at 5, 6. The
Court will grant summary judgment against W-USA on these two
also concedes that W-Ltd sold azoxystrobin technical to
W-USA, which is located in Roseburg, Oregon. See
Doc. 15 at ¶ 6; Doc. 16 at ¶ 3. Willowood asserts
that the sale did not infringe because the shipment of
azoxystrobin technical "FOB China" by W-Ltd, a Hong
Kong company, was not a sale "within the United
States" under § 271(a). See Doc. 15 at ¶ 3, 6;
Doc. 137 at 18:16-:19.
board or "FOB" is a shipping term that indicates
when in the delivery process title transfers from the buyer
to the seller. Litecubes, LLC v. N. Light Prods.,
Inc., 523 F.3d 1353, 1358 n.1 (Fed. Cir. 2008).
"FOB China" means that title transferred to the
buyer, W-USA, when the seller, W-Ltd, conveyed the goods to
the shipper in China. See Id. at 1358 n.1, 1369.
analyzing where a sale took place, the Court should not
"exalt form over substance." Id. at 1370
(quoting TV. Am. Philips Corp. v. Am. Vending Sales,
Inc., 35 F.3d 1576, 1579 (Fed. Cir. 1994)). When other
factors indicate an intention to sell infringing products to
customers in the United States, shipment FOB a location
abroad neither limits the place of sale to the location from
which the goods were shipped nor precludes liability under
§ 271. SEB S.A. v. Montgomery Ward & Co.,
Inc., 594 F.3d 1360, 1375 (Fed. Cir. 2010),
aff'd sub nom. Glob.-Tech Appliances, Inc. v. SEB
S.A., 563 U.S. 754 (2011); see also Transocean
Offshore Deepwater Drilling, Inc. v. Maersk Contractors USA,
Inc., 617 F.3d 1296, 1310-11 (Fed. Cir. 2010). To
determine the location of the sale, the fact-finder can
consider the location of the buyer and seller, N. Am.
Philips, 35 F.3d at 1579, "where the products were
shipped from and where the products were shipped to, "
SEB, 594 F.3d at 1375, "the transfer of
tangible property, " Transocean, 617 F.3d at
1311, and "the agreement by which such a transfer t[ook]
place." Id.; see also Litecubes, 523
the seller, W-Ltd, was in Hong Kong, Doc. 15 at ¶ 3,
while the buyer, W-USA, was in the United States. Doc. 16 at
¶ 3. W-Ltd shipped the azoxystrobin technical FOB China
to W-USA, for delivery in the United States. See Id.
at ¶ 8; Doc. 15 at ¶ 6. There is a genuine issue of
material fact on whether the sale took place in the United
States. See SEB, 594 F.3d at 1375 (approving
instructions to the jury to consider evidence including FOB
terms, invoices with U.S. companies, and delivery to the
United States to determine the location of the sale). Summary
judgment will be denied as to whether W-Ltd infringed.
Indirect Infringement by W-LLC
actively induces infringement of a patent shall be liable as
an infringer." 35 U.S.C. § 271(b). Induced
infringement requires (1) "active steps taken to
encourage direct infringement, " Takeda Pharm.
U.S.A., Inc. v. W.-Ward Pharm. Corp., 785 F.3d 625, 630
(Fed. Cir. 2015) (quotation omitted), and (2) knowledge or
willful blindness that the induced acts constitute patent
infringement. Glob.-Tech Appliances, 563 U.S. at
766, 768. An active step sufficient for induced infringement
includes causing, urging, encouraging, or aiding another to
infringe the patent. Takeda Pharm., 785 F.3d at 631
n.3 (citing legal Corp. v. Tokyo Electron Co., Ltd.,
248 F.3d 1376, 1379 (Fed. Cir. 2001)).
commissioned Adjuvants to formulate azoxystrobin fungicides
from the imported azoxystrobin technical and commissioned ARC
to analyze samples of the resulting end products. Doc. 137 at
20:9-: 19, 26:3-:7; Doc. 96-10 at 41:21-42:10. W-LLC knew
that this use of azoxystrobin technical by Adjuvants and ARC
would infringe Syngenta's patents. Doc. 96-10 at
305:5-:18. By commissioning Adjuvants and ARC to undertake
formulation and analysis that required using azoxystrobin
technical, W-LLC actively induced infringement of the
'076 and '256 Patents. The Court will grant summary
judgment in favor of Syngenta against W-LLC.
Count III (the '138 Patent)
moves for summary judgment as to the validity of the '
138 Patent, which protects a chemical process used to produce
azoxystrobin technical. Willowood proffers Dr. Lipton's
expert opinion as evidence that the ' 138 Patent is
invalid due to obviousness, see 35 U.S.C. §
103, and asserts that summary judgment should be denied.
Syngenta contends that Willowood's evidence of
obviousness is insufficient to raise a disputed question of
material fact and moves to exclude Dr. Lipton's analysis.
noted supra, the burden to show invalidity is on the
challenger, and therefore Willowood must show by clear and
convincing evidence that at the time of the invention, the
patent's claimed subject matter was obvious to a person
of ordinary skill in the art. Plantronics, Inc. v. Aliph,
Inc., 724 F.3d 1343, 1353 (Fed. Cir. 2013). To prove
obviousness, the defendant must explicitly provide "[a]
reason for combining disparate prior art references."
In Touch Techs., Inc. v. VGO Commc'ns, Ina, 751
F.3d 1327, 1351 (Fed. Cir. 2014); KSR Int'l Co. v.
Teleflex Inc., 550 U.S. 398, 418 (2007) (requiring that
arguments explicitly provide an "articulated reasoning
with some rational underpinning" to make the asserted
combinations (quoting In re Kahn, 441 F.3d 977, 988
(Fed. Cir. 2006))).
evaluating obviousness, an expert should take steps "to
guard against slipping into use of hindsight and to resist
the temptation to read into the prior art the teachings of
the invention in issue." Graham v. John Deere Co. of
Kan. City, 383 U.S. 1, 36 (1966) (quotation omitted);
see KSR Int'l, 550 U.S. at 421 (noting a
factfinder "must be cautious of arguments reliant upon
ex post reasoning"); Insite Vision,
783 F.3d at 859. In this case, Dr. Lipton stated several
times that "the substance of claim 6" was the
"starting point" of his obviousness analysis. Doc.
96-15 at 142:8-:21, 144:5-:6. He explicitly admitted that he
started with Claim Six and worked backwards. Doc. 96-15 at
on Interactive Gift Express, Inc. v. CompuServe
Inc., 256 F.3d 1323, 1331 (Fed. Cir. 2001), Willowood
contends that "an analysis of claim validity must start
with die claim itself." Doc. 102 at 13. However,
Interactive involved claim construction, not
validity, and it does not justify a hindsight analysis.
See 256 F.3d at 1331. Willowood also asserts that
Dr. Lipton only started with Claim Six to identify prior art
and to understand the invention. See MPEP §
2145(X)(A) (9th ed. Nov. 2015). However, his deposition
belies this assertion:
Q: So as part of your invalidity analysis you assume that
someone of ordinary skill would be interested, in the first
instance, in making compound (XV) from compound (X), correct?
A: Since that is the substance of claim 6, that's my
Doc. 96-15 at 142; 16-:21. Willowood points to no explanation
from Dr. Lipton indicating that he had a reason beyond the
' 138 Patent to assume that a person of ordinary skill
would be motivated to attempt the intermediate combinations
of prior art necessary to achieve the ' 138 Patent's
process. Dr. Lipton analyzed obviousness using the
"patent itself as [a] roadmap" and "did not
articulate reasons why a person of ordinary skill in the art
at the time of the invention would combine" particular
prior art references. InTouch Techs., 751 F.3dat
1351; see Doc. 96-15 at 146:11-:20.
of the hindsight embedded in his analysis and the lack of
reasons for combining the relevant prior art, Dr.
Lipton's expert opinion is not the product of a reliable
method and will not help the jury determine obviousness.
See Fed. R. Evid. 702; InTouch Techs., 751
F.3d at 1351-52. The Court will grant Syngenta's motion
to exclude this evidence. Without any additional evidence on
the validity of the ' 138 Patent, Willowood cannot meet
its burden to demonstrate obviousness. The Court will
grant summary judgment for Syngenta on the issue of the
validity of the '138 Patent.
'138 Patent claims a process for preparing a group of
compounds, including azoxystrobin, by performing an
electrification step followed by a condensation step.
See Doc. 96-1 at ¶ 94-99, 111-13; Doc. 1-10 at
16-17. It is undisputed that W-Ltd buys azoxystrobin
technical from Tai He and sells it to W-USA, and that W-USA
imports the azoxystrobin technical into the U.S. and uses it
to formulate its end products, which W-IXC sells to the
public. Doc. 9640 at 64:4-: 15, 278:4-: 14; Doc. 96-8 at 3.
It further is undisputed that the azoxystrobin technical that
W-Ltd buys from Tai He is made overseas by a process that
contains the etherification and condensation steps set forth
in the ' 138 patent See Doc. 99-9 at 23,
Doc. 99-8 at 4-5, 7; Doc. 137 at 40:9-41:10.
an act of infringement to "import into the United
States or offer to sell, sell, or use within the United
States a product which is made by a process patented in the
United States." 35 U.S.C. § 271(g). Syngenta
contends that it is entitled to summary judgment on
infringement because the Willowood entities infringed the
' 138 Patent under § 271(g) by importing into the
United States azoxystrobin technical made by the claimed
process, using it to formulate end products, and selling the
azoxystrobin technical and resulting end products in the
United States. Willowood asserts that § 271(g) requires