Fmc Corp. v. Control Solutions, Inc.
| Decision Date | 16 May 2005 |
| Docket Number | Civil Action No. 05-cv-01553. |
| Citation | 369 F.Supp.2d 539 |
| Parties | FMC CORPORATION, Plaintiff, v. CONTROL SOLUTIONS, INC., Defendant. |
| Court | U.S. District Court — Eastern District of Pennsylvania |
Abbe F. Fletman, Kelly Dobbs Bunting, Wolf, Block, Schorr & Solis-Cohen, LLP, Philadelphia, PA, for Plaintiff.
Control Solutions, Inc., Pasadena, TX, pro se.
John A. Rothschild, Fox, Rothschild, O'Brien & Frankel, Aleksander Jerzy Goranin, Hangley, Aronchick, Segal & Pudlin, Philadelphia, PA, for Defendant.
This matter concerns the alleged copyright infringement of a label used on pesticide products. The immediate issue involves a request for a preliminary injunction. A hearing having been held and briefs having been submitted, the Court will issue the preliminary injunction for the reasons and upon the terms discussed below.
Plaintiff FMC Corporation ("FMC") is headquartered in Philadelphia, Pennsylvania, and holds itself out to be "one of the world's foremost, diversified chemical companies with leading positions in agricultural, industrial and consumer markets."1 Defendant Control Solutions, Inc. ("CSI"), a producer of generic pesticide products, located in Pasadena, Texas, employs approximately 45 people and competes with FMC and others in the distribution of pesticides. The specialty products division at FMC, the division responsible for the TalstarOne pesticide/termiticide has a comparable number of employees to CSI. See 4/21/05 Hr. Tr. at 8. Plaintiff FMC develops, manufactures, markets and distributes pest control products for professional and home use. CSI's business is to manufacture and market pesticide products containing generic active ingredients. 4/22/05 Hr. Tr. at 96. FMC alleges that CSI is willfully violating FMC's copyright on the TalstarOne pesticide product label and seeks to enjoin CSI from selling its generic Bifen I/T pesticide using an allegedly infringing product label.2
Pesticide product labels are heavily regulated by the United States Environmental Protection Agency (the "EPA") pursuant to the Federal Insecticide Fungicide and Rodenticide Act ("FIFRA"), 7 U.S.C. §§ 136, et seq. Consistent with FIFRA, the process by which regulated pesticide products are registered for sale in the United States involves submission and approval of detailed product labels, typically in booklet or pamphlet form, providing specifically mandated information about hazards and directions for use, including identification of the pests to which the pesticides are directed and the application and mixing rates of the pesticides for a wide variety of uses. Portions of the TalstarOne pesticide product label that FMC claims CSI is infringing were composed by FMC in conformity with specific legal and regulatory standards and guidelines. These standards and guidelines were established by Congress and the EPA as requirements for registering pesticide products for sale.
CSI began distributing a generic brand of pesticide containing bifenthrin, Bifen I/T, more than five years after FMC's patent on bifenthrin expired. Bifen I/T contains the exact ingredients, in the identical proportions as, and is thus functionally equivalent to, FMC's TalstarOne product. CSI's Bifen I/T label was prepared and submitted to the EPA as part of, in EPA parlance (or, as familiarly termed by the witnesses, "EPA speak"), a "me-too" submission. In fact, Mr. Joe Blake, CSI's Director for Regulatory Affairs, initially represented to the EPA that the Bifen I/T product would be not only a me-too submission but also a "re-pack" of Talstar TC Flowable, the immediate predecessor product to TalstarOne. A re-pack registration with the EPA generally takes less time and requires less information in order to secure EPA approval. See 4/22/05 Hr. Tr. at 116-118. However, FMC claims it never sold any Talstar product to CSI.3 Thus, if FMC's claim on this point is accurate, it is impossible that CSI could have submitted a re-pack of the FMC product.4
With regard to alleged copyright infringement by CSI of FMC's TalstarOne product label, FMC delivered a cease and desist letter to CSI's chief executive officer on March 4, 2005. FMC received no response until March 28, 2005, when CSI announced that it had retained counsel and rejected FMC's claims of copyright infringement. Therefore, FMC contends that as of March 4, 2005, CSI's alleged copyright violation is willful and knowing.5 Moreover, FMC contends that without immediate injunctive action, CSI will continue to illegally profit from FMC's copyrighted and proprietary property, including by granting sub-registration rights to two other companies, Phoenix Environmental Care LLC ("Phoenix") and Regal Chemical ("Regal"), to use a label substantially similar to the label CSI copied from FMC. See 4/22/05 Hr. Tr. at 118-120.
FMC filed its Complaint (Docket No. 1) and, pursuant to Fed.R.Civ.P. 65, its Motion for Temporary Restraining Order and Rule to Show Cause Why a Preliminary Injunction Should Not Issue (Docket No. 3) and Motion for Expedited Discovery, alleging that CSI deliberately appropriated FMC's copyrighted product label for TalstarOne™ Multi-Insecticide, for CSI's Bifen/IT product rather than incurring the expense of independently developing a label of its own. At this stage in the litigation, namely, assessing whether a preliminary injunction should issue, the Court is to decide whether CSI's admittedly virtually verbatim copying of FMC's product label violates federal copyright law and justifies the entry of preliminary injunctive relief.
Following a phone conference with the parties, the Court denied the Motion for Temporary Restraining Order, granted expedited discovery for both parties, scheduled an intermediate conference call to monitor the expedited discovery, established a supplemental briefing schedule and scheduled an evidentiary hearing and oral argument on the request for a preliminary injunction. The evidentiary hearing and oral argument was held on April 21 and 22, 2005.
FMC seeks a preliminary injunction ordering CSI, and anyone or any entity acting in concert with CSI, to: (1) stop manufacturing the infringing label or causing the label to be manufactured; (2) halt using the infringing label; (3) stop placing any product that has the infringing label affixed to it into the stream of commerce; (4) recall all products bearing the infringing label that are not already in the hands of an end user; (5) destroy all existing infringing labels; and (6) immediately provide all of Bifen I/T's distributors, customers and sub-registrants with a copy of the preliminary injunction order.
For the reasons stated below, the Court finds that CSI is willfully violating FMC's copyright to the TalstarOne product label and, as a result, is knowingly and willfully selling its Bifen I/T product with an infringing product label. CSI is also knowingly and willingly assisting other generic manufacturers to label their respective bifenthrin-based products with a similarly infringing label. Therefore, for the reasons detailed below, consistent with FMC's relief request, supra, save subpart (4) and a portion of subpart (6), the Court issues a preliminary injunction to prevent further sales or facilitation of sales of any product utilizing a product label that has been approved by the EPA (or is currently within the EPA review process) based upon a me-too submission by CSI that consists of a product label based on the virtually verbatim copying of the TalstarOne label. The Court also requires that FMC post a $100,000 bond in accordance with Fed.R.Civ.P. 65(c).
A trial on the merits of the claims and defenses will follow promptly.
More than 20 years ago, FMC developed bifenthrin, a chemical that eradicates insects, including termites and other pests. See Declaration of Linda Froelich ("Froelich Decl.") ¶ 4. FMC obtained a patent protecting bifenthrin and later registered its technical formulation and end-use products with the EPA and state pesticide regulatory authorities. Froelich Decl. ¶ 5. Several of the FMC end-use product registrations are on pesticide products commonly sold to distributors for use by professional exterminators, landscapers and other pest management professionals. Id. By December 9, 1997, FMC's patent on bifenthrin had expired, permitting its manufacture, use, and sale by producers of generic pesticides. Froelich Decl. ¶ 6. CSI is such a producer of generic pesticides.
In August 2003, FMC introduced TalstarOne, in which bifenthrin is the active ingredient. TalstarOne is the successor product to a number of FMC's prior pesticide products. Froelich Decl. ¶ 7. TalstarOne is a multi-insecticide used to control many pests indoors and outdoors in residential, institutional, public, commercial and industrial buildings, and on lawns, ornamental plants, parks, recreational areas and athletic fields.6 Id. FMC contends that TalstarOne, distributed throughout the United States, is one of FMC's most successful products. Froelich Decl. ¶ 8. FMC further contends that TalstarOne is considered to be a premier insecticide for use by pest management professionals in the United States. Froelich Decl. ¶ 9.
FMC became aware of CSI's marketing efforts for CSI's Bifen I/T in late 2003 and early 2004. However, FMC did not attempt to assess whether CSI was violating FMC's copyright on the TalstarOne label until November 2004. After completing a comprehensive comparison of the CSI label against its own TalstarOne label, FMC concluded that the CSI label was a virtually identical copy of the FMC label and sent a cease and desist letter to CSI in early March 2005 alleging that CSI was violating the copyright on the TalstarOne label. CSI never inquired of FMC whether it could buy or license the rights to...
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