IP Law Daily, PATENT—D. Del.: Beef packing company’s inequitable conduct counterclaims fail in microbiological testing provider’s infringement suit, (Dec 17, 2024)

By Saurabh Kashyap, B.A., LL.B., LL.M.

National Beef Packing Co. did not meet Rule 9(b)’s specificity requirements regarding individuals responsible, withheld material, and its impact on USPTO’s decision granting asserted patents.

Ruling on multiple motions in a patent infringement lawsuit filed by a microbiological testing services provider against National Beef Packing Co., Inc., the federal district court in Wilmington, Delaware, denied the defendant’s counterclaims of inequitable conduct and granted the plaintiff’s motion to strike the defendant’s affirmative defenses. The court found that National Beef’s inequitable conduct counterclaims and affirmative defense failed to meet Rule 9(b)’s specificity requirements regarding the individuals involved, the withheld material, and its impact on the USPTO’s decision granting the patents. However, the court granted National Beef leave to amend, allowing it the opportunity to cure these deficiencies with more specific allegations (Institute for Environmental Health, Inc. v. National Beef Packing Company, LLC, No. 1:23-cv-00826-JHS (D. Del. Dec. 16, 2024)).

Background. The plaintiff, Institute for Environmental Health, Inc. (“IEH”), is a company specializing in microbiological testing services and patented technologies for pathogen detection in food products. The defendant, National Beef Packing Co., Inc., is one of the largest beef processors in the United States, conducting microbiological testing as part of its food safety compliance and quality control measures.

In this lawsuit, IEH asserted its U.S. Patent Nos. 7,534,584 (the '584 Patent), 8,822,143 (the '143 Patent), 9,637,771 (the '771 Patent), and 9,845,486 (the '486 Patent). The '584 patent, titled Modular Compositing—Multiple Lot Screening Protocols for Detection of Pathogens, Microbial Contaminants and/or Constituents, serves as the parent patent to the ’143 and ’771 patents, all sharing the same specification. While the ’486 patent is not part of this family, it similarly relates to pathogen detection methodologies. Additionally, National Beef referenced U.S. Patent No. 8,389,233 (the '233 patent), which, although not part of the case, became relevant due to its overlapping prosecution history with the reexamination proceedings of the '584 patent.

IEH filed this lawsuit alleging that National Beef’s microbiological testing protocols infringed its asserted patents. In response, National Beef claimed that the ’143 and ’771 patents were unenforceable due to inequitable conduct. National Beef alleged that IEH failed to disclose material findings from reexamining the parent '584 patent, where multiple claims had been ruled unpatentable.

According to National Beef, the withheld documents—consisting of office actions, examiner decisions, and third-party comments—were highly material because the claims of the ’143 and ’771 patents were not patentably distinct from the rejected claims in the '584 patent. National Beef argued that IEH's attorneys knowingly withheld this information to mislead the U.S. Patent and Trademark Office (USPTO) into granting the patents. IEH moved to dismiss the counterclaims and strike the affirmative defense.

Rule 9(b) and inequitable conduct. The court assessed National Beef’s inequitable conduct allegations under the heightened pleading standard of Rule 9(b), which requires allegations of fraud to state the who, what, when, where, and how of the alleged misconduct. Citing Exergen Corp. v. Wal-Mart Stores, Inc., 575 F.3d 1312 (Fed. Cir. 2009), the court pointed out that the allegations must include specific facts that show the materiality of the omitted information and a specific intent to deceive the USPTO. Further, the court stated that the party asserting inequitable conduct must satisfy the but-for-materiality test under Therasense, Inc. v. Becton, Dickinson & Co., 649 F.3d 1276 (Fed. Cir. 2011) by demonstrating that the patents would not have been granted had the information been disclosed.

Upon analysis, the court found that National Beef’s allegations failed to meet Rule 9(b)’s requirements in several key respects.

On the “who” element, the court found that National Beef did not identify a specific individual responsible for the alleged misconduct. Instead, it vaguely referenced “IEH” and its “attorneys.” The court noted that the duty of candor before the USPTO applies to individuals, not organizations, and that National Beef’s failure to name a specific person rendered the allegation insufficient.

The court determined that National Beef adequately pled the "what" element by identifying categories of omitted documents, including office actions, responses, and third-party comments from reexamining the '584 patent. These documents allegedly contained findings that were adverse to the patentability of claims that National Beef argued were substantially similar to those in the ’143 and ’771 patents.

On the “when” element, the court found National Beef’s allegations sufficient because it claimed that the omissions occurred during the prosecution of the ’143 and ’771 patents, and the relevant timelines were publicly available in the USPTO records.

The court held that National Beef's allegations fell short on the "where" element because it did not specify where the material information was located in the withheld documents. Merely referring to broad categories of documents failed to provide the required level of detail.

Regarding the “how” element, the court concluded that National Beef’s allegations were insufficient because it failed to explain how the omitted information would have influenced the examiner’s decision to issue the ’143 and ’771 patents. The court emphasized that alleging the information “would have impacted patentability” was not enough without showing that it would have prevented the claims from being allowed.

Finally, the court found that National Beef did not satisfy the but-for-materiality requirement under Therasense. National Beef’s claims that the omitted information was relevant fell short of the requirement to show that the patents would not have been issued had the information been disclosed.

Conclusion. Thus, the court granted IEH's motion to dismiss National Beef's inequitable conduct counterclaims and to strike its affirmative defense, holding that the allegations lacked the specificity required under Rule 9(b). However, the court granted National Beef leave to amend its pleadings, reasoning that the deficiencies could potentially be cured. The court explained that National Beef must identify the specific individual responsible, pinpoint the material content within the omitted documents, and demonstrate how the information would have impacted the patent examiner's decision.

The Case is No. 1:23-cv-00826-JHS.

Judge: Slomsky, J.

Attorneys: David Ellis Moore (Potter Anderson & Corroon, LLP) for Institute For Environmental Health, Inc. Frederick L. Cottrell (Layton & Finger, PA) for National Beef Packing Co., LLC.

Companies: Institute For Environmental Health, Inc.; National Beef Packing Co., LLC

Cases: Patent DelawareNews GCNNews