MicroSource, LLC v. Eco World Grp.

• Decision Date: 23 February 2022
• Docket Number: 19-CV-04016-CJW-MAR
• Court: U.S. District Court — Northern District of Iowa
• Parties: MICROSOURCE, LLC and GAVILON FERTILIZER, LLC, Plaintiffs, v. ECO WORLD GROUP, LLC, d/b/a PRESIDION AG., Defendants. ECO WORLD GROUP, LLC, d/b/a PRESIDION AG. and ECO WORLD RESEARCH AND DEVELOPMENT GROUP, LLC, Counterclaim-Plaintiffs, v. MICROSOURCE, LLC and GAVILON FERTILIZER, LLC, Counterclaim-Defendants.

MICROSOURCE, LLC and GAVILON FERTILIZER, LLC, Plaintiffs, v. ECO WORLD GROUP, LLC, d/b/a PRESIDION AG., Defendants.

ECO WORLD GROUP, LLC, d/b/a PRESIDION AG. and ECO WORLD RESEARCH AND DEVELOPMENT GROUP, LLC, Counterclaim-Plaintiffs, v. MICROSOURCE, LLC and GAVILON FERTILIZER, LLC, Counterclaim-Defendants.

No. 19-CV-04016-CJW-MAR

United States District Court, N.D. Iowa, Western Division

February 23, 2022

MEMORANDUM OPINION AND ORDER

C.J Williams, United States District Judge.

TABLE OF CONTENTS

I. BACKGROUND ............................................................................ 6

A. Procedural History .................................................................. 6

B. Factual Background ................................................................. 7

1. The Patents ................................................................... 7

2. Ownership and License History .......................................... 8

II. DISCUSSION ................................................................................ 9

A. Summary Judgment Standard ..................................................... 9

B. Validity of the '231 Patent ........................................................ 11

1. Principles .................................................................... 12

2. Application .................................................................. 14

a. '231 claim 1 ........................................................ 15

b. '231 claim 2 ........................................................ 17

c. '231 claim 3 ........................................................ 18

d. '231 claim 4 ........................................................ 18

C. Validity of the '306 Patent ........................................................ 20

D. Claim Construction for the '306 Patent ........................................ 22

1. Principles of Claim Construction ........................................ 22

2. “organic liquid solvating system” ....................................... 24

a. Claim Language ................................................... 27

b. Specification ........................................................ 28

c. Prosecution History ............................................... 30 d. Dictionary Definitions ............................................ 32

3. “the organo liquid solvating system” ................................... 33

4. “solvent” or “solvents” ................................................... 36

5. “environmentally safe” ................................................... 39

6. “inherently rated safe for contact with humans and animals” ...... 41

7. “an alcohol or polyol from the family of alkylene and poly(alkylene) glycols” ................................................... 43

E. Infringement Evidence Disputes ................................................. 44

1. Applicable Law ............................................................ 45

2. Bowden Expert Report .................................................... 47

a. EN-CAS ............................................................. 47

b. Chill Point Definitions ............................................ 55

3. Dr. Bowden's Notes ....................................................... 57

a. Subjective Assertions ............................................. 58

b. Proper Rebuttal Opinions ........................................ 59

c. Improper Supplementation ....................................... 60

d. Rule 26 Failure to State Opinions and Their Basis .......... 63

4. Tim Ballard (EN-CAS Witness) Disclosure ........................... 64

F. Cross-Motions for Summary Judgment of Infringement /Non-Infringement ................................................................. 68

1. Plaintiffs' Motion for Summary Judgment of Non-Infringement .......................................................... 68

2. Defendants' Motion for Summary Judgment of Infringement ...... 73

a. HI-TEST ............................................................ 74

b. NITROLOCK ...................................................... 75

c. HI-TEC ............................................................. 75

d. LOCK-N ............................................................ 76

G. Damages ............................................................................. 77

1. The Fox Report's Hypothetical Negotiation ........................... 78

2. Certificate of Correction .................................................. 81

a. Considering the Corrected Claims .............................. 82

b. Considering the Uncorrected Claims ........................... 83

3. Statutory Marking ......................................................... 86

a. Constructive Notice ............................................... 87

b. Actual Notice ....................................................... 90

III. CONCLUSION ............................................................................. 92

This matter is before the Court on opposing motions for summary judgment on a counterclaim of patent infringement filed by counterclaim-plaintiffs Eco World Group, LLC, d/b/a Presidion AG (“Presidion”) and Eco World Research and Development Group, LLC (“Eco World”) (collectively “defendants”) against counterclaim-defendants Microsource, LLC (“Microsource”) and Gavilon Fertilizer, LLC (“Gavilon”) (collectively “plaintiffs”).^[1] (Doc. 108). Plaintiffs' Motion for Partial Summary Judgment is filed at Doc. 111. This matter is also before the Court on plaintiffs' motion to exclude evidence. (Doc. 112). The patent claims at issue are claims 1-10 of the U.S. Patent No. 9, 650, 306 (the '306 Patent) and claims 1-4 of the U.S. Patent No. 10, 301, 231 (the '231 Patent).

On the question of validity, the Court finds that claims 1-4 of the '231 Patent are invalid for obviousness, and thus grants-in-part plaintiffs' motion for summary judgment of non-infringement with respect to the '231 Patent. The Court does not find that claims 1-10 of the '306 Patent are invalid.

On the question of claim construction, the Court construes the disputed terms of the '306 Patent, and most relevantly does not adopt plaintiffs' construction that the mixtures or the solvents “dissolve a solute.”

On the question of infringement, the Court denies-in-part plaintiffs' motion to exclude evidence with respect to infringement evidence, denies-in-part plaintiffs' motion for summary judgment of non-infringement with respect to the '306 Patent, and denies defendants' motion for summary judgment of infringement with respect to the '306 Patent.

On the question of damages, the Court grants-in-part plaintiffs' motion to exclude evidence with respect to damages evidence, grants-in-part plaintiffs' motion for summary judgment of zero damages for infringement occurring before December 18, 2019, but denies-in-part plaintiffs' motion for summary judgment of zero damages for infringement occurring on or after December 18, 2019.

I. BACKGROUND

A. Procedural History

At this stage^[2], plaintiffs sued defendants for a declaration of noninfringement of the '306 Patent (Doc. 57, at 22), and the '231 Patent (Doc. 57, at 29), and a declaration of invalidity of the ‘306 Patent (Doc. 57, at 35) and the '231 Patent (Doc. 57, at 42). Defendants filed the counterclaim at issue, alleging that plaintiffs infringed on the claims 1-10 of the '306 Patent and claims 1-4 of the '231 Patent by manufacturing, using, and selling the NITROLOCK, NI-TEST, LOCK-N, and HI-TEC (collectively, the “Accused Products”) (Doc. 70).

Both parties filed claim construction briefs. (Docs. 94 (plaintiffs' brief); 95 (defendants' brief); 96 (defendants' reply brief); 97 (plaintiffs' reply brief)). Later, defendants moved for partial summary judgment of infringement by the NITROLOCK, HI-TEST, LOCK-N, and HI-TEC. (Doc. 108-1). In turn, plaintiffs moved to exclude evidence of infringement and damages (Doc. 112) and moved for partial summary judgment of non-infringement and lack of damages, naming the NITROLOCK and the HI-TEST. (Doc. 111-1, at 35). Both parties timely resisted the opposing party's motions.^[3] (Docs. 131 & 132). And both parties timely filed reply briefs. (Docs. 141 & 142).

B. Factual Background

The Court first turns to the background of the patents themselves, and then their ownership and license history.

1.The Patents

For purposes of this discussion, defendants Eco World and Presidion are licensees to the '306 Patent and the '231 patent.

The '306 Patent claims an improved liquid formulation of nitrification inhibitors. '306 Patent. These limit nitrification, which is a biological process that consumes nitrogen in the soil and releases nitrous oxide (N2O), thus harming crop growth, reducing the efficiency of nitrogen fertilizers, and contributing to global warming and other environmental concerns. (See id.).

The '231 patent in turn claims an improved solvent system to formulate and apply N-alkyl thiophosphoric triamide urease inhibitors. (See '231 Patent). These limit ureases, which are soil enzymes that break urea into carbon dioxide and ammonia, thus wasting urea-based fertilizers and damaging the environment. (See id.). Notably, the '231 Patent and U.S. Patent No. 10, 221, 108 (the '108 Patent) are related, because they claim priority to U.S. Provisional Application No. 61/980, 675. ('108 patent, '231 Patent). The Patent Trials and Appeals Board (“Board”) invalidated certain claims of the '108 Patent in Solvay USA Inc. v. Worldsource Enterprises, LLC, et al., PGR2019-00046. (Doc. 111-12 at 37).

2. Ownership and License History

Both patents changed hands multiple times as they...