Microsource, LLC v. ECO World Grp., LLC

• Decision Date: 23 February 2022
• Docket Number: 19-CV-04016-CJW-MAR
• Citation: Microsource, LLC v. ECO World Grp., LLC, 587 F.Supp.3d 770 (N.D. Iowa 2022)
• 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.
• Court: U.S. District Court — Northern District of Iowa

587 F.Supp.3d 770

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.

Signed February 23, 2022

Luke C. Holst, Patrick E. Brookhouser, Jr., Pro Hac Vice, Matthew Munro, Pro Hac Vice, McGrath North Mullin & Kratz, PC LLO, Omaha, NE, for Plaintiffs/Counterclaim-Defendants.

Allison Elizabeth Kerndt, Matthew McGuire, Nyemaster Goode, Jeffrey D. Harty, Nyemaster Goode PC, Des Moines, IA, for Defendants/Counterclaim-Plaintiffs.

MEMORANDUM OPINION AND ORDER

C.J. Williams, United States District Judge

TABLE OF CONTENTS

I. BACKGROUND...786

A.ProceduralHistory...786

B.FactualBackground...786

1.The Patents...786

2.Ownership and LicenseHistory...787

II. DISCUSSION...787

A.Summary JudgmentStandard...787

B.Validity of the '231 Patent...789

1. Principles...789

2. Application...789

a. '231 claim 1...791

b. '231 claim 2...792

c. '231 claim 3...793

d. '231 claim 4...793

C.Validity of the '306 Patent...794

D.Claim Construction for the '306 Patent...794

1.Principles of ClaimConstruction...795

2. "organic liquid solvating system"...796

a. ClaimLanguage...798

b. Specification...798

c. ProsecutionHistory...800

d. DictionaryDefinitions...801

3. "the organo liquid solvating system"...801

4. "solvent" or "solvents"...803

5. "environmentally safe"...805

6. "inherently rated safe for contact with humans and animals"...806 7. "an alcohol or polyol from the family of alkylene and poly(alkylene) glycols"...807

E.Infringement EvidenceDisputes...808

1.ApplicableLaw...808

2.Bowden ExpertReport...809

a. EN-CAS b. Chill PointDefinitions...814

3.Dr. Bowden'sNotes...815

a. SubjectiveAssertions...816

b. Proper RebuttalOpinions...816

c. ImproperSupplementation...817

d. Rule 26 Failure to State Opinions and TheirBasis...819

4.Tim Ballard (EN-CAS Witness)Disclosure...819

F. Cross-Motions for Summary Judgment of Infringement /Non-Infringement...821

1.Plaintiffs' Motion for Summary Judgment of Non-Infringement...822

2.Defendants' Motion for Summary Judgment of Infringement...824

a. HI-TEST...825

b. NITROLOCK...825

c. HI-TEC...826

d. LOCK-N...826

G. Damages...827

1.The Fox Report's HypotheticalNegotiation...827

2.Certificate of Correction...829

a. Considering the CorrectedClaims...830

b. Considering the UncorrectedClaims...830

3.StatutoryMarking...832

a. ConstructiveNotice...833

b. ActualNotice...834

III. CONCLUSION...835

This matter is before the Court on opposing motions for summary judgment on a counterclaim of patent infringement filed by counterclaim-plaintiffsEco World Group, LLC, d/b/a Presidion AG("Presidion") and Eco World Research and Development Group, LLC("Eco World")(collectively "defendants") against counterclaim-defendantsMicrosource, 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. PatentNo. 9,650,306(the '306 Patent) and claims 1–4 of the U.S. PatentNo. 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-partplaintiffs' 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 adoptplaintiffs' construction that the mixtures or the solvents "dissolve a solute."

On the question of infringement, the Courtdenies-in-partplaintiffs' motion to exclude evidence with respect to infringement evidence, denies-in-partplaintiffs' motion for summary judgment of non-infringement with respect to the '306 Patent, and deniesdefendants' motion for summary judgment of infringement with respect to the '306 Patent.

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

I.BACKGROUND

A.Procedural History

At this stage² , 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.(Seeid. ).

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.(Seeid. ).Notably, the '231 Patent and U.S. PatentNo. 10,221,108(the '108 Patent) are related, because they claim priority to U.S. Provisional ApplicationNo. 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, etal. , PGR2019-00046. (Doc. 111-12, at 37).

2.Ownership and License History

Both patents changed hands multiple times as they passed from the inventors to defendants.

On May 16, 2017, the U.S. Patent and Trademark Office("USPTO") issued the '306 Patent.'306 Patent, Date of Patent.The '306 Patent stemmed from an application labeled 14/689,470, and a provisional application labeled 61/980,675.Id.Each inventor assigned the '306 Patent to Worldsource Enterprises, LLC, between November 14, 2018, and December 18, 2018.(Doc. 108-3, at 53).Months earlier, however, in an agreement last revised on July 1, 2018, Worldsource Enterprises, LLC, licensed the '306 Patent to defendant(counter-claim plaintiff) Eco World Research and Development Group under the terms of a First Amendment to a Master Agreement.⁴(Doc. 111-11, at 12–14).Defendant(counter-claim plaintiff) Eco World Research and Development Group in turn licensed the '306 Patent to defendant Presidion, purportedly effective as of April 23, 2018.(Doc. 116-2, at 73, 91).

On May 28, 2019, the USPTO issued the '231 patent.( '231 Patent, at Doc. 70-2).This patent stemmed from an application labeled 15/636,211. (Id. ).Though no party provided a copy of the assignment of the '231 Patent, the Patent Assignment Abstract of Title indicates that the inventors assigned the application that would become the '231 Patent to Worldsource Enterprises, LLC, on December 7, 2018.UNITED STATES PATENT AND TRADEMARK OFFICE , 15/636,211, Public Patent Application Information Retrieval , https://portal.uspto.gov/pair/PublicPair (last visited Feb. 10, 2022).Months earlier, on July 1, 2018, Worldsource Enterprises, LLC, licensed the application that would become this patent to Eco World under the terms of the First Amendment to the Master Agreement.(Doc. 116-2, at 91).

II.DISCUSSION

In resolving these three motions, the Court must address (1) whether the '306 and '231 patents are invalid; (2) the proper claim construction for their claim terms; (3) the admissibility of infringement evidence; (4) the dueling motions for summary judgment on infringement/non-infringement; (5) the admissibility of damages evidence; and (6)plaintiffs'motion for summary judgment on damages.The Court takes each issue in turn.

A.Summary Judgment Standard

Summary judgment is appropriate when "the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law."FED. R. CIV. P. 56(a).When asserting that a fact is undisputed or is genuinely disputed, a party must support the assertion by "citing to particular parts of materials in the record, including depositions, documents, electronically stored information, affidavits or declarations, stipulations ..., admissions, interrogatory answers, or other...