RAYMOND A. JACKSON, District Judge.
This matter is before the Court on Plaintiffs' Motion for a Preliminary Injunction against Defendants, BioPet Vet Lab, Inc. ("BioPet") and Radio Systems Corporation d/b/a PetSafe (collectively "Defendants"), pursuant to Rule 65 of the Federal Rules of Civil Procedure. On March 11, 2011, this Court conducted a hearing to further address arguments from both parties. For the reasons stated on the record and herein, Plaintiffs' Motion for a Preliminary Injunction is
In December 2003, Plaintiff Fred Hutchinson Cancer Research Center ("FHCRC") filed a patent application for its dog breed identification technology. Mem. in Supp of Pls.' Mot. for TRO and Prelim. Inj. at 2. On June 1, 2010, it received United States Patent No. 7,729,863 ("the '863 patent") for the technology. Id. FHCRC exclusively licensed this technology, along with the patent application, to Argus Genetics, LLC ("Argus") on August 9, 2005. Id. Argus then sublicensed the
On February 14, 2011, Plaintiffs filed a Motion for Temporary Restraining Order ("TRO") and a Motion for Preliminary Injunction. In these motions, Plaintiffs requested that Defendants refrain from infringing U.S. Patent No. 7,729,863 ("the '863 Patent") by using, selling, offering to sell, directly or indirectly, distributing, displaying, using in commerce, demonstrating, or advertising, directly or indirectly, in communications with veterinarians or veterinary business, or at any and all trade shows, conventions, seminars, or conferences, including but not limited to the 83rd Western Veterinary Conference in Las Vegas, Nevada, set for February 20-24, 2011 the following: (1) DNA breed identification products, and (2) dog breed identification services associated with a DNA breed identification product. On February 18, 2011, PetSafe filed a Response in Opposition alleging that Plaintiffs' Motions for TRO and Preliminary Injunction should be denied because the patent is invalid due to anticipation by prior art. Def.'s Resp. in Opp. Mot. for TRO at 6. Plaintiff's then filed a Rebuttal Brief on February 21, 2011. On February 22, 2011, this Court conducted a hearing and granted Plaintiff's Motion for TRO. On February 28, 2011, this Court entered a Memorandum Opinion and Order which explained the reasons the TRO was granted. Defendants filed a Response in Opposition to Plaintiffs' Motion for Preliminary Injunction and six declarations in support of its position on February 28, 2011. Plaintiffs filed a reply along with three declarations in support of their position on March 7, 2011. On March 11, 2011, this Court conducted a hearing to address both parties' arguments regarding Plaintiffs' Motion for Preliminary Injunction. Having been briefed and argued by both parties, this matter is now ripe for consideration.
Rule 65 of the Federal Rules of Civil Procedure provides for the issuance of preliminary injunctions as a means of preventing harm to one or more of the parties before the court can fully adjudicate the claims in dispute. "A plaintiff seeking a preliminary injunction must establish that he is likely to succeed on the merits, that he is likely to suffer irreparable harm in the absence of preliminary relief, that the balance of equities tips in his favor, and that an injunction is in the public interest." Winter v. Natural Res. Def. Council, Inc., 555 U.S. 7, 129 S.Ct. 365, 374, 172 L.Ed.2d 249 (2008); Real Truth About Obama v. Federal Election Commission, 575 F.3d 342, 347 (4th Cir. 2009) (indicating that the Winter standard governs preliminary injunction proceedings in the Court of Appeals for the
Given this standard, adjudication of preliminary injunctions in a patent infringement case necessarily involve consideration of substantive issues regarding the patent. To the extent that substantive issues arise that fall within the specific domain of patent law, precedent from the United States Court of Appeals for the Federal Circuit governs. See Hybritech Inc. v. Abbott Labs., 849 F.2d 1446, 1451 n. 12 (Fed.Cir.1988); EyeTicket Corp. v. Unisys Corp., 155 F.Supp.2d 527, 535 (E.D.Va. 2001).
A plaintiff must make a clear showing that it will likely succeed on the merits at trial before a court can issue a preliminary injunction in its favor. Winter v. Natural Res. Def. Council, Inc., 555 U.S. 7, 129 S.Ct. 365, 376, 172 L.Ed.2d 249 (2008); Real Truth About Obama v. Federal Election Commission, 575 F.3d 342, 346-47 (4th Cir.2009). At the preliminary injunction stage, a patent enjoys the same presumption of validity as at any other stage of litigation. Titan Tire Corp. v. Case New Holland, Inc., 566 F.3d 1372, 1377 (Fed.Cir.2009); Canon Computer Sys., Inc. v. Nu-Kote Int'l, Inc., 134 F.3d 1085, 1088 (Fed.Cir.1998). As an affirmative defense to a Plaintiff's motion for preliminary injunction, a Defendant may attack the likelihood of success by raising questions about the validity of the patent. Titan Tire Corp., 566 F.3d at 1377. However, to do so, the alleged infringer must present evidence that raises a substantial question of invalidity. Id. (emphasis in original). Once an alleged infringer has presented such evidence, the burden shifts back to the patentee to present contrary evidence that they are likely to succeed at trial on the validity issue. Id.
In support of the motion for preliminary injunction, Plaintiffs allege the following: 1) that they are likely to succeed on the merits by showing that Defendants Dog Identification Kit infringes on Claims 1, 20, 22 and 28 of the '863 patent; 2) that Plaintiffs will suffer irreparable harm based on permanent loss of customers, price erosion and losses to its reputation and goodwill; 3) that the balance of equities weighs in Plaintiffs' favor; and 4) that the public interest warrants protecting their rights under the '863 patent. See Mem. in Supp. of Pls.' Mot. for TRO and Prelim. Inj. at 12-26. This Court will address each element in turn to determine whether a preliminary injunction should be issued in this case.
In this case, Plaintiffs assert that they are likely to succeed on the merits based upon Defendants' alleged infringement on claims 1, 20, 22 and 28 of the '863 patent. Mem. in Supp. of Pls.' Mot. for TRO and Prelim. Inj. at 12. In order to prove patent infringement, Plaintiffs must compare the alleged infringing device to the properly construed claims to determine if all the claim limitations are met. Amazon.com, Inc. v. Barnesandnoble.com, Inc., 239 F.3d 1343, 1351 (Fed.Cir.2001). In support of the allegation, Plaintiffs submitted a declaration from Dr. Neal Fretwell, Research and Development Director in the Mars Veterinary unit of Mars Symbioscience, a division of Mars, Inc., which contained a comparative analysis of the '863 patent claims and Defendants' dog identification products. See generally Fretwell Decl. In his statement, Dr. Fretwell analyzes each step of claims 1, 20, 22 and 28 of the '863 patent and concludes that both BioPet and PetSafe's products perform every step of the claims and thus are literally infringing claims 1, 20, 22 and 28 of the
In response, Defendants, raise two arguments. First, Defendants allege that they are not infringing on the '863 patent in their current practices. Title 35 U.S.C. § 271 defines patent infringement stating, "whoever without authority makes, uses, offers to sell, or sells any patented invention, within the United States, or imports into the United States any patented invention during the term of the patent therefor, infringes the patent." 35 U.S.C. § 271(a). This showing requires a party "to perform each and every step or element of a claimed method or product." BMC Resources, Inc. v. Paymentech, L.P., 498 F.3d 1373, 1378 (Fed.Cir.2007) (citing Warner-Jenkinson Co., Inc. v. Hilton Davis Co., 520 U.S. 17, 117 S.Ct. 1040, 137 L.Ed.2d 146 (1997)). Defendants contend that they are not currently infringing on the '863 patent because they are not performing all of the steps of claim 1 within the United States. See Prel. Inj. Hr'g Tr. at 136:18-137:2, Mar. 11, 2011.
Specifically, Defendants argue that they are not performing step (c) of claim 1 in the United States.
In evaluating Defendants' argument of non-infringement, the Court places particular emphasis on the full analytical process described by Ms. Burnett. The witness testified to how the computer in China is run and operated. Specifically, Ms. Burnett described a process by which she extracts the DNA from the sample provided by the customer, assigns markers to the DNA (a process described as PCR), puts the PCR data on a DNA analyzer, runs it through a computer program to conduct the statistical analysis that determines the breed contribution, and extracts
Second, Defendants challenge the validity of the '863 patent on the grounds that it was anticipated by prior art. Defs.' Opp. to Pls.' Mot. for Prelim. Inj. 9-11. To show anticipation, Defendants must
According to the United States Court of Appeals for the Federal Circuit, an alleged infringer has raised substantial question of invalidity under the Titan standard if the movant cannot prove that the invalidity claim lacks substantial merit. Oakley, Inc. v. Sunglass Hut Int'l, 316 F.3d 1331, 1340 (Fed.Cir.2003) (quoting Tate Access Floors, Inc. v. Interface Architectural Resources, Inc., 279 F.3d 1357, 1365 (Fed.Cir. 2002)). Given Defendants' heavy reliance on the Koskinen article, the Court will address that article first and then discuss the other articles Defendants' use to establish their invalidity claim.
Contrary to Defendants assertions, Plaintiffs argue that the Koskinen article is not prior art because it was published less than one year before the patent's priority date and because Plaintiffs had "conceived and reduced the invention to practice before Koskinen was published." Reply in Supp. of Pls.' Mot. for Prelim. Inj. at 6; See 35 U.S.C. § 102(a) & (b) (stating that a patentee can show that an invalidity claim lacks substantial merit if the reference was published within a year of the patent date or if the invention was known or used prior to the application date of the patent or regarding a reference that was published within a year of the patent date).
Even if the Koskinen article was not disqualified as prior art based on its publication date, the Court finds that it also does not qualify as prior art because the claimed invention had been conceived and reduced to practice before the cited reference. Purdue Pharma L.P. v. Boehringer Ingelheim GMBH, 237 F.3d 1359, 1365 (Fed.Cir.2001). Under Purdue Pharma, Plaintiffs can establish that a particular invention was conceived and used before a particular reference through declaratory testimony and supporting evidence. Id. at 1365. To this effect, Plaintiffs have presented evidence in the form of declarations from Dr. Elaine Ostrander, Dr. Heidi G. Parker, Dr. Leonid Kruglak and Dr. Neale Fretwell indicating that Claims 1 and 20 of the '863 Patent were reduced to practice at a scientific meeting in May 2003 (i.e., the Cold Spring Harbor Symposium). See Reply in Supp. of Pls.' Mot. for Prelim. Inj. at 7. The inventor declarations of Drs. Ostrander, Parker and Kruglak identified all of the limitations in claims 1 and 20 and discussed how each limitation was met by the information found in the poster presented at the Cold Spring Harbor meeting in May 2003. Id.; See Ostrander/Parker Decl. at ¶¶ 7-19; Kruglak Decl. at ¶¶ 7-19. With the declarations were the inventors visual representations of the poster as well as the program that was distributed to the symposium participants. Meanwhile, Dr. Fretwell's second declaration confirmed the inventors' declarations by conducting a step by step comparison of claims 1 and 20 and the substantive material referenced on the presentation poster and in the program. Based on this analysis, Dr. Fretwell concluded that claims 1 and 20 were performed prior to the publication of the Koskinen article on July 22, 2003. See Fretwell Second Decl., ¶¶ 4, 7-16 and Ex. 2 (providing a claim chart for the '863 Patent and the 2003 Cold Spring Harbor Poster). After careful review of the documents and in light of the testimony provided through the declarations, the Court finds that the Koskinen article is not prior art and, therefore, Defendants' cannot use the article to prove their invalidity claim.
Defendants also assert that various other prior arts raise a substantial question of validity under the doctrines of anticipation and obviousness. Defendants rely primarily on the expert testimony of Dr. Baird and a claim chart (Defendant's Exhibit 2) offered in support of his findings to assert these claims.
Even if the Court accepted Dr. Baird's testimony and the accompanying claim chart as the independent expert opinion of Dr. Baird, it nonetheless fails to raise a substantial question of validity because it does not address all of the elements of the claims (e.g., neither Vila nor Randi reference the breeds covered in Claims 22 and 28) and the chart findings are effectively rebutted by the Dr. Fretwell's detailed analysis of the articles in his second declaration. See Prel. Inj. Hr'g Tr. at 92:18-93:14 and 93:21-94:3; Fretwell Second Decl. ¶¶ 22-36. Furthermore, the Court weighs Dr. Baird's testimony with caution and skepticism in light of the fact that he has a financial business interest with Defendant, BioPet. Dr. Baird is the Chief Scientific Officer of DNA Diagnostics Center, which obtains its supply kits for DNA testing from BioPet. Prel. Inj. Hr'g Tr. at 87:13 and 94:22-95:14 (describing Dr. Baird's arrangement to testify "pro bono" and his employer's financial interest in BioPet as a reseller of its products). Therefore, Dr. Baird, as a member of the management team of DNA Diagnostics Center,
In light of the fact that Defendants failed to present any credible or persuasive testimony by a person skilled in the art to support its allegations of invalidity and the
The Supreme Court of the United States has indicated that plaintiffs seeking preliminary relief must demonstrate that irreparable harm is likely in the absence of the requested relief. Winter, 129 S.Ct. at 375 (indicating that a movant for preliminary injunction must demonstrate more than a possibility of irreparable harm). Plaintiffs assert that they will suffer a permanent loss of customers and market share,
"When the failure to grant preliminary relief creates the possibility of permanent loss of customers to a competitor or the loss of goodwill, the irreparable injury prong is satisfied." Multi-Channel TV Cable Co. v. Charlottesville Quality Cable Operating Co., 22 F.3d 546, 552 (4th Cir.1994); Merrill Lynch, Pierce, Fenner and Smith v. Bradley, 756 F.2d 1048, 1055 (4th Cir.1985). Defendants argue that there has been no loss of goodwill because they have a superior rather than inferior product. Defts.' Opp. to Pls.' Mot. for Prelim. Inj. at 21-22. Defendants argue that although their testing kit identifies less breeds, they do so "with extremely high levels of statistical confidence." See Burnett Decl. ¶¶ 8-9. Through both live and declaratory evidence, Defendants also argue that they have received complaints from less that 4% of their customers. Id. at ¶ 11. In evaluating this factor, the Court considers the evidence Plaintiffs and Defendants presented regarding loss of goodwill. Additionally, the Court considers Plaintiffs' unrebutted evidence of its
Plaintiffs must also establish that the "balance of equities tips in [their] favor." Winter, 129 S.Ct. at 376. Plaintiffs assert that the balance in equities tips in their favor because 1) PetSafe has not been in the market of selling dog DNA testing kits to veterinarian customers long; 2) Mars as a sublicensee is paying royalties for a product that PetSafe is infringing upon at no added cost; and 3) PetSafe has other products that could be marketed to potential customers. Mem. in Supp. of Pls.' Mot. for TRO and Prelim. Inj. at 23-25. Defendants assert that the balance of equities weighs in their favor because 1) BioPet is a small company and will likely go out of business, or go bankrupt, if enjoined from selling the DNA Identification Kits (Defts.' Opp. to Pls.' Mot. for Prelim. Inj. at 23; Simpson Decl. ¶ 3-4) and 2) both companies would suffer an estimated $6,000,000 in lost sales from the product, with PetSafe being forced to discontinue the entire product line (see Mainini Decl. ¶ 5-6; Tedford Decl. ¶ 5-6; Defts.' Opp. to Pls.' Mot. for Prelim. Inj. at 23-24).
While this Court recognizes that it is appropriate to consider BioPet's small company size as a factor, the Court nonetheless must determine if the other prongs for injunctive relief have been established. See Bell & Howell Document Mgmt. Prods. Co. v. Altek Sys., 132 F.3d 701, 708 (Fed.Cir.1997) (stating that the risk of being put out of business does not insulate a small company from the issuance of a preliminary injunction if the other factors are met). The Court has already found Plaintiffs were likely to succeed on the merits and will suffer irreparable harm. Defendants' harm does not offset the elements of irreparable harm to the Plaintiffs nor does it overcome the public interest in enforcing patent rights.
Finally, Plaintiffs must establish that preliminary relief would be in the public interest. Winter, 129 S.Ct. at 376. Plaintiffs cite case law dating back 50 years, highlighting the strong public interest in preserving the rights of patent holders. Mem. in Supp. of Pls.' Mot. for TRO and Prelim. Inj. at 25 (citing Mazer v. Stein, 347 U.S. 201, 219, 74 S.Ct. 460, 98 L.Ed. 630 (1954) (discussing the underlying importance of patents to advancing the public welfare "through the talents of authors
For the reasons stated above and on the record, Plaintiffs' Motion for Preliminary Injunction is
Fretwell Decl. ¶¶ 9 and 27 (emphasis added).
Congress specifically enacted this provision to provide process patent holders with a cause of action for infringement against parties that used the patented process abroad to create products and then imported, used or sold those products in the United States. See Eli Lilly and Co. v. American Cyanamid Co., 82 F.3d 1568, 1571-72 (Fed.Cir.1996). Defendants argue that they are not infringing because they perform a step of the claim outside of the United States. However, in Ms. Burnett's testimony, she stated that BioPet obtains the breed contribution of the dog as an output from the computer program analysis and sends that output back to the Knoxville, TN facility via email. Prel. Inj. Hr'g Tr. at 49:7-50:8. Ms. Burnett then testified that BioPet uses this output to assign levels of contribution which is the final product sent to the customer. Prel. Inj. Hr'g Tr. at 46:18-46:22. Therefore, looking at the language of 35 U.S.C. § 271(g) as well as its legislative history, and reviewing Defendants process as stated on the record, the Court finds that Defendants still fail to assert a valid noninfringement claim.