Layne Christensen Co. v. The Purolite Co.
| Decision Date | 24 March 2011 |
| Docket Number | CIVIL ACTION No. 09-2381-JWL-GLR |
| Parties | LAYNE CHRISTENSEN COMPANY, and DR. ARUP SENGUPTA, Plaintiffs, v. THE PUROLITE COMPANY, Defendant. |
| Court | U.S. District Court — District of Kansas |
In this action for patent infringement and breach of contract, Plaintiffs allege that Defendant, as a former licensee, infringed upon a patent for removal of arsenic from drinking water and breached the post-termination provisions of their license agreement. Currently pending before the Court is Plaintiffs' Motion to Disqualify Counsel (ECF No. 115). Plaintiffs request that the Court enter an order to disqualify attorney Robert C. Sullivan, Jr. and his current law firm, Fish & Richardson, from representing Defendant in this action. As set forth below, the motion is denied.1
The Court makes the following findings of fact:
In the Spring of 2003, Drs. Arup SenGupta, ("SenGupta") and Luis Cumbal invented certain technology used to selectively remove contaminants, such as arsenic, from water or other fluids (the "SenGupta Technology"). The SenGupta Technology is the subject of United States Letters PatentNo. 7,291,578 (the "'578 patent"), the patent at issue in this action.
On November 25, 2003, SenGupta and SolmeteX, Inc. ("SolmeteX") entered into a license agreement (hereafter the "SenGupta-SolmeteX License Agreement"), which licensed the SenGupta Technology to SolmeteX. It granted SolmeteX an exclusive worldwide license, including the right to grant sublicenses, practice all methods and processes claimed or disclosed in the '578 patent, make, use, import, sell, and to otherwise use and exploit the SenGupta Technology.2 Section 4.1.2 of the SenGupta-SolmeteX License Agreement provided that SolmeteX was responsible for filing, prosecuting and maintaining all licensed patents:
Except as set forth in Section 4.1.1, [SolmeteX] shall be responsible for determining the patent prosecution strategy for the Licensed Inventions and for filing, prosecuting and maintaining all Licensed Patents at Licensee's expense. [SenGupta] shall cooperate with [SolmeteX] in regard thereto and shall take all actions requested by [SolmeteX] in connection therewith. In addition, [SenGupta] will supply any additional information relating to the inventions described in the Licensed Patents that [SolmeteX] may reasonably request from time to time.3
In 2004, SenGupta hired the law firm of Howson & Howson to file U.S. Patent Application No. 10/925,600, which claimed priority to U.S. Provisional Application No. 60/538,131, and which ultimately became the '578 patent.
Applying the SenGupta Technology to resin beads manufactured by Defendant The Purolite Company ("Purolite"), SolmeteX commercialized a product that can be used to remove arsenic from water. On September 29, 2004, SolmeteX and Purolite entered into an agreement entitled "Exclusive Manufacturing, Supply and Distribution Agreement" (the "SolmeteX-PuroliteAgreement").4 Under this agreement, SolmeteX appointed Purolite as its exclusive manufacturer and supplier. It also granted Purolite a sublicense of SolmeteX's intellectual property to the extent necessary to manufacture, supply, and distribute the product. Section 4.6 of the agreement set out each party's rights and responsibilities with regard to patent prosecution:
SolmeteX is currently in the process of applying for a United States patent related to the [product] on behalf of [SenGupta], to which SolmeteX has exclusive worldwide rights. Purolite will be responsible during the Term, at its own cost, for worldwide patent filings in those countries they deem appropriate following the issuance of US patent(s). Purolite will keep SolmeteX informed of the progress of such patent applications, and will allow SolmeteX the ability to review and comment on all correspondence and official documentation relating thereto. Purolite will promptly inform SolmeteX of any decisions it may make not to pursue certain patents or related applications (which shall be limited to those made in good faith business judgment). SolmeteX will have the right to pursue any such patents and related applications in its sole name and at its expense, and Purolite agrees to provide reasonable assistance requested by SolmeteX in that process.5
On or about January 13, 2005, the law firm of Howson & Howson filed an international patent application, pursuant to the Patent Cooperation Treaty entitled "Method of Manufacture and Use of Hybrid Anion Exchanger for Selective Remove of Contaminating Ligands from Fluids, " using the subject matter disclosed in the '578 patent.6 The application listed SenGupta and Cumbal as the applicants and was signed by George A. Smith, Jr. of Howson & Howson, as attorney for applicants.7 The application claims priority of the earlier filed U.S. patent application for the same SenGupta Technology which became the '578 patent.
In the summer of 2006 Purolite retained Robert C. Sullivan, Jr. ("Sullivan"), who was thena member of the Darby & Darby law firm, "to engage foreign patent lawyers to prosecute several national phase entries of the [Patent Cooperation Treaty] application."8 Plaintiffs contend that Purolite hired Sullivan "to prosecute on SenGupta's behalf (as applicant and inventor) several national phase entries of the [Patent Cooperation Treaty] application for the SenGupta Technology."9 In letters dated July 11, 2006, Marie Collazo, Director of Patent Services of the Darby & Darby firm, directed local counsel in Germany and in Japan to "initiate national phase procedures" in those countries for the January 13, 2005 international patent application.10 The letters specifically identified SenGupta as the applicant of the European national phase application and copied Sullivan and Stefan Brodie, of Purolite International, Ltd., on the correspondence.
On July 31, 2006, Marie Collazo of Darby & Darby sent a letter to Stefan Brodie of Purolite International, Ltd., regarding the European patent application.11 The letter noted that the Patent Cooperation Treaty was published with the International Search Report, and requested that Mr. Brodie provide a copy when the Report was made available.
On August 2, 2006, Flynn Barrison, Assistant Patent Services Manager at Darby & Darby, sent a letter to Stefan Brodie about the Japanese patent application.12 It enclosed correspondence, confirming that the Japanese national phase of the application was filed with the Japanese Patent Office. The letter also advised of the deadline for, and costs associated with, requesting examinationof the application. Sullivan was copied on the correspondence.
On August 30, 2006, Marie Collazo of Darby & Darby sent to Stefan Brodie a letter, enclosing a copy of the official filing receipt for the Hong Kong application.13 Sullivan was copied on the letter.
On November 15, 2006, Flynn Barrison sent another letter to Stefan Brodie regarding the European patent application.14 The letter inquired whether an amendment should be prepared to amend the specification and claims. Flynn Barrison sent another letter to Stefan Brodie on December 20, 2006, enclosing a copy of the official Notification from the European Patent Office.15The letter also quoted the cost of filing a request to record registration of a patent application in Hong Kong, based upon a published European patent application. Sullivan was copied on all the correspondence.
On January 18, 2007, Flynn Barrison, informed foreign local counsel that "[o]ur client is interested in obtaining coverage in Hong Kong" and directed local counsel to register SenGupta's international patent application for the SenGupta Technology in Hong Kong.16 Sullivan and Stefan Brodie were copied on this correspondence, regarding SenGupta's Hong Kong national phase entry.
On or about November 30, 2007, in connection with an Agreement of Sale between SolmeteX and Plaintiff Layne Christensen Company ("Layne"), Layne acquired SolmeteX's assets, including SolmeteX's rights in the November 25, 2003 SenGupta-SolmeteX Agreement.
In December 2008 SenGupta emailed Gary Thundercliff of Purolite about revoking SenGupta's agreement with SolmeteX and entering into an agreement with Purolite. In an email dated January 6, 2009, Gary Thundercliff told SenGupta that he would have Sullivan of Darby & Darby call to "hear your situation."17 According to Sullivan, the topic of his conversation in January 2009 with SenGupta was SenGupta's belief that SolmeteX had stolen from him certain intellectual property and his desire to end his relationship with SolmeteX and to enter into an agreement with Purolite (to the exclusion of SolemeteX).18 Sullivan states that at the onset of the call, he inquired whether SenGupta had his own counsel who would participate in the call.19 SenGupta told Sullivan that he was not represented by any lawyer.20 Sullivan then advised SenGupta that neither he nor Darby & Darby represented him and that they represented only Purolite.21
On July 15, 2009, Sullivan transferred Darby & Darby's files of to attorney Richard Johnson of Husch Blackwell Sanders.22 The letter identified the files as the Hong Kong, European, and Japanese patent applications for "Method of Manufacture and Use of Hybrid Anion Exchanger for Selective Removal of Contaminating Ligands From Fluids." The letter states:
Further to your e-mail of July 1, 2009 on behalf of your client, Layne Christensen, we are hereby transferring the above-identified files to you. Accordingly, our firmhas terminated its representation with respect to these three patent applications.... We have also informed the associates in foreign countries that we are no longer responsible for prosecution and maintenance, and that further correspondence should be directed to your firm.23
Mr. Johnson acknowledged receipt of the files on August 3, 2009.24
On July 21, 2009, Layne, having acquired SolmeteX, filed this action, asserting...
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