Biagro Western Sales, Inc. v. Helena Chemical Co., CIV. F. No. 01-5014 OWW DLB.

Citation160 F.Supp.2d 1112
Decision Date07 May 2001
Docket NumberCIV. F. No. 01-5014 OWW DLB.
PartiesBIAGRO WESTERN SALES, INC., a California corporation, Plaintiff, v. HELENA CHEMICAL COMPANY, a Delaware corporation, Defendant.
CourtU.S. District Court — Eastern District of California

Mark Daryl Miller, Kimble MacMichael and Upton, Fresno, CA, for plaintiff.

James T. Hannick, Gray Cary Ware and Freidenrich, San Diego, CA, Ashley I. Pezzner, Rudolph E. Hutz, Connolly Bove Lodge and Hutz, LLP, Wilmington, DE, for defendant.

MEMORANDUM OPINION AND ORDER RE: PLAINTIFF'S MOTION FOR PRELIMINARY INJUNCTION

WANGER, District Judge.

I. INTRODUCTION

Plaintiff, BIAGRO WESTERN SALES, INC., moves for a preliminary injunction against Defendant, HELENA CHEMICAL COMPANY. Jurisdiction is invoked under 28 U.S.C. §§ 1331 and 1338. See Doc. 1, ¶ 5. Oral argument was held April 16, 2001.

II. BACKGROUND

Plaintiff is a California corporation with its principal place of business in Visalia, California. See Doc. 1, ¶ 3. Plaintiff's sole business is the manufacture and sale of agricultural fertilizers derived from phosphorous acid. See Alvitre Dec., ¶ 3. On August 31, 1993, Plaintiff entered into an Exclusive License Agreement with The Regents of the University of California ("the Regents") to utilize technology replacing phosphates with phosphites as a nutrient source for plants. See Alvitre Dec., ¶ 2; Supp. Alvitre Dec., ¶ 2. Plaintiff's license includes the technology described in United States Patent No. 6,113,665 ("the '665 Patent") issued September 5, 2000. See id. The '665 patent was issued to the Regents as the assignee of the inventor, Carol J. Lovatt. See Miller Dec., ¶ 2. Several of plaintiff's products use the formulation described in the patent at issue. See Alvitre Dec., ¶ 3.

Defendant is a Delaware corporation located in Memphis, Tennessee. See Doc. 1, ¶ 4. Defendant is authorized to do business, and does business, in California. Defendant is engaged in the manufacture, use, sale, and, or offering for sale in this district of products under the designation "Elemax 0-28-26" and "Elemax 4-30-20". See id. Defendant's products allegedly infringe the '665 patent. See id.

A. Alleged Infringement
1. Testing of Defendant's Products

Prior to the '665 patent's date of issuance, Plaintiff became aware that Defendant's, Ele-Max 0-28-26 and Ele-Max 4-30-20, might be infringing on the pending application of the '665 patent that was later issued. See Alvitre Dec., ¶ 4. Defendant's products were purchased and tested by Plaintiff for possible infringement. See id.; Steinberg Dec., ¶ 2. Samples of Defendant's products were sent to CMR Laboratories in Fresno. See Steinberg Dec., ¶¶ 3-4.

a. pH Testing

The pH scale is used to show whether a solution is acidic, neutral or alkaline. See Grech Dec., ¶ 14. A pH of 1 is the most acidic, a pH of 14 is the most alkaline, and a pH of 7 is considered neutral. See id. Although pure water itself is usually given a pH of 7, most available agricultural water is slightly acidic to slightly alkaline, with a pH ranging between 6.5 and 8.5. See id., Ex. D (Western Fertilizer Handbook, 8th edition, p. 38).

Testing on January 9, 2001

On January 9, 2001, Mr. John L. Peterson of CMR Laboratories tested both samples of Ele-Max 0-28-26 and Ele-Max 4-30-20. See Peterson Dec., ¶¶ 2-3. The Ele-Max 0-28-26 was diluted with 6.5 pH water at ratios of 1:40 and 1:600. See id. at ¶ 3a. The 1:40 dilution had a 5.92 pH; the 1:600 dilution had a 6.16 pH. See id. The second Ele-Max 0-28-26 sample was then diluted with 8.5 pH water at ratios of 1:40 and 1:600. See id. at ¶ 3b. The 1:40 dilution had a 6.03 pH; the 1:600 dilution had a 6.40 pH. See id.

The Ele-Max 4-30-20 was diluted with 6.5 pH water at ratios of 1:40 and 1:600. See id. at ¶ 3c. The 1:40 dilution had a 4.71 pH; the 1:600 dilution had a 5.65 pH. See id. The second Ele-Max 4-30-20 sample was then diluted with 8.5 pH water at ratios of 1:40 and 1:600. See id. at ¶ 3d. The 1:40 dilution had a 4.88 pH; the 1:600 dilution had a 5.91 pH. See id.

Mr. Peterson asserts that fertilizer solutions within Defendant's products pH ranges (4.71-6.40) are commonly used for foliar nutritional application to plants. See id. at ¶ 4. However, Plaintiff's other expert, Mr. Nigel M. Grech, asserts that although the optimal foliage pH range for most plants is between 5.5 and 7.5, the range may fall below 5.5 and above 7.5 depending on the particular plant and the subsequent dilution of the final spray solution. See Grech Dec., ¶ 15.

Testing on March 27, 2001

On March 27, 2001, Mr. Peterson again tested Defendant's products for buffering properties. See Supp. Peterson Dec. at ¶ 2. Samples of Defendant's products (Ele-Max 4-30-20 and Ele-Max 0-28-26) were individually diluted each at the rates of 1:40 and 1:600 with de-ionized water and tap water. See id. The dilutions were titrated with 0.1 Molar Hydrochloric Acid, and the resultant pH readings were recorded and reported. See id., Ex. A. Each of the eight dilutions were then titrated with 0.1 Molar Sodium Hydroxide, the resultant pH readings were again recorded and reported. See id.

The tap and de-ionized water testing without Defendant's products was made to produce "blank" control data. See id. at ¶ 3. Samples of Defendant's products were also titrated in the same manner with 1.0 Molar Hydrochloric Acid and again with 1.0 Molar Sodium Hydroxide. See id. These results are also reported in Mr. Peterson's attached Exhibit A. See id.

b. Composition Testing

In discussing the chemical compounds, the usual letters and subscripts are used. "K" stands for potassium, "H" for hydrogen, "P" for phosphorus and "O" for oxygen. See Helena Opp., 8:15 n. 8; Young Dec., ¶ 5. Subscript numbers indicate the number of atoms within the chemical structure. See id. The combination "HPO3" designates a "phosphite". See id.

When Phosphorous Acid, H3PO3, is combined with Potassium Hydroxide, KOH, two salts, Mono-Potassium Di-Hydrogen Phosphite, KH2PO3, and Di-Potassium. Mono-Hydrogen Phosphite, K2HPO3, are created in varying amounts. See Grech Dec., ¶ 5. These two salts are known as "phosphite salts" or "phosphites". See id. As more KOH is added, more K2HPO3 is created and the pH of the solution becomes more alkaline. See id.

For purposes of this motion, Defendant accepts Plaintiff's description of the phosphite salts present in Defendant's products. See Helena Opp., 8:11-13. Plaintiff's Grech Declaration describes Defendant's two Ele-Max products as follows:

Ele-Max 0-28-26 lists its ingredients as phosphorous acid, potassium hydroxide and water. See Grech Dec., ¶ 6, Ex. 1. The potassium salts are present in a total amount of 53.9% by weight, of which KH2 PO3 is 29% and K2HPO3 is 24.8%. See Helena Opp., 8:14-16; Grech Dec., ¶¶ 5-7.

Ele-Max 4-30-20 lists its ingredients as phosphorous acid, potassium hydroxide, urea and water. See Grech Dec., ¶ 10, Ex. 1. Its total salt content is 52.91% by weight, of which 33.36% is KH2PO3, and 11.85% is K2HPO3. See id. at 9:1-3; Grech Dec. ¶¶ 10-11.

Defendant disputes Mr. Grech's conclusion that both of Defendant's products are buffered compositions. See Helena Opp., 23:14-26:5. Mr. Grech's Declaration states with regard to buffering:

Both of the above described Ele-Max products (0-28-26 and 4-30-20) are buffered compositions. A buffered solution is one that resists changes in pH. See Chemistry of the Elements, 2nd edition, p. 521 .... Both of the Ele-Max products (0-28-26 and 4-30-20) resisted changes in pH; they are therefore buffered compositions.

Grech Dec. at ¶ 13.

2. Negotiation History

Subsequent to the issuance of the '665 patent, Mr. Peter Alvitre met with Defendant's representatives in Memphis, Tennessee. See Alvitre Dec., ¶ 6. Mr. Alvitre provided Defendant a copy of the '665 patent and alerted Defendant to the possible infringement of the '665 patent, 5,830,255 patent, and 5,514,200 patent, by Defendant's products.

Defendant disputed Mr. Alvitre's assertions of infringement. See Miller Dec., ¶ 3, Ex. B. Besides raising several prior art issues, Defendant asserted that the '665 patent required a separate buffering agent and that Defendant's products contained no such agent. See id. Plaintiff's counsel argued that a buffer could be defined as "a material which resists changes in pH" and that both of Defendant's products met this definition. See id.

On December 28, 2000, Plaintiff discovered that Defendant had been awarded a substantial contract to provide its products to a company in Florida. See Alvitre Dec., ¶ 7; McLean Dec., ¶¶ 3-4. Plaintiff had also submitted a bid of $717,500 on the contract. See McLean Dec., ¶ 2. The fertilizer products used in Defendant's bid were the Ele-Max 0-28-26 and Ele-Max 4-30-20. See id. at ¶ 4.

Plaintiff's complaint was filed January 3, 2001; however, Defendant was not immediately served due to negotiations between Plaintiff and Defendant toward a potential resolution. See Alvitre Dec., ¶ 05, 8. Defendant was served with the complaint on February 5, 2001, when Plaintiff determined that a resolution would not be reached. See id., ¶ 7.

B. Plaintiff's Complaint

Plaintiff's complaint alleges one claim of patent infringement. See Doc. 1. Plaintiff asserts it is the exclusive licensee of the Regents' '665 patent; that Defendant at all relevant times knew of Plaintiff's patent; that Defendant directly infringed or engaged in contributory infringement of the '665 patent; and that it has been irreparably harmed and continues to be harmed. See id., ¶¶ 9-11.

Plaintiff requests that Patent No. 6,113,665 be adjudged a legally enforceable and valid patent; that Defendant be found to be infringing the Regents' patent; a preliminary and permanent injunction be ordered enjoining Defendant from further infringement; and an accounting of all profits received by Defendant as a result of its alleged infringement. See id., ¶¶ 5-6. Plaintiff requests...

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