IP Law Daily, PATENT—M.D.N.C.: Syngenta wins partial summary judgment on fungicide infringement claims, (Mar 28, 2017)

By Robert Margolis, J.D.

The federal district court in Greensboro, North Carolina, has granted in part summary judgment for Syngenta Crop Protection, LLC, finding that two of its patents are valid and have been infringed by Willowood, LLC, and several of its affiliates (collectively, "Willowood"). The court also granted summary judgment for validity on a third patent, but held there are genuine issues of material fact as to whether Willowood infringed that patent, and denied each parties’ motions as to a fourth Syngenta patent (Syngenta Crop Protection, LLC v. Willowood, LLC, March 24, 2017, Eagles, C.).

Syngenta owns four United States patents protecting azoxystrobin, a fungicidal compound used to protect various crops, and the process for making it. Those patents are U.S. Patent Nos. 5,602,076 ("the ‘076 Patent"), 5,633,256 ("the ‘256 Patent"), 5,847,138 ("the ‘138 Patent"), and 8,124,761 ("the ‘761 Patent"). Willowood sells generic crop-protection products, using generic azoxystrobin fungicides Azoxy 2SC and AzoxyProp Xtra. Azoxystrobin technical, a relative pure form of the chemical compound azoxystrobin, is the active ingredient in both Willowood and Syngenta’s products. Syngenta brought patent infringement claims against Willowood related to all four of the above patents, as well as Copyright infringement claims alleging that Willowood copied Syngenta’s product labels.

‘076 and ‘256 Patents. The court granted Syngenta summary judgment as to its claims of infringement of these two patents, finding the absence of a genuine factual dispute that both patents are valid and that Willowood infringed them. As to validity, Willowood presented no evidence at all to counter the presumption of validity that these patents enjoy due to their registration.

As to infringement, various Willowood subsidiaries imported five kilograms of azoxystrobin technical from a Chinese supplier before the ‘076 and ‘256 Patents had expired, and commissioned the formulation and analysis of fungicides using azoxystrobin technical. Willowood admitted all of this was done with knowledge of the ‘076 and ‘256 patents and that these activities would likely infringe them, the court found.

Willowood conceded that one of its affiliates, Willowood USA, LLC, infringed the two patents by importing the azoxystrobin technical into the United States. Thus, the court granted summary judgment on infringement as against Willowood USA. The court denied summary judgment on infringement as to another Willowood affiliate, Willowood Limited, a Hong Kong entity, because it found a genuine issue of material fact as to whether that entity’s shipment of azoxystrobin technical "FOB China" was a sale "within the United States" under Section 271(a) of the Patent Act.

The court granted summary judgment for Syngenta on its claim for indirect infringement against the Willowood entity, Willowood, LLC, that commissioned a third-party to formulate azoxystrobin fungicides from the azoxystrobin technical imports. The court found that Willowood, LLC, knew that the use of azoxystrobin technical by the third party would infringe Syngenta’s patents.

‘138 Patent. The court granted Syngenta summary judgment as to the validity of the ‘138 Patent, which claims a process for preparing a group of compounds, including azoxystrobin. Willowood presented expert testimony to support its contention that the ‘138 Patent is invalid due to obviousness, but the court found that the testimony was improper because the expert analyzed obviousness "using the patent itself as [a] roadmap," and did not articulate why a person of ordinary skill in the art would combine the particular prior art references that the expert had cited. This use of "hindsight" rendered the testimony insufficient to establish obviousness, the court held.

The court denied Syngenta summary judgment on infringement, however, agreeing with Willowood that a genuine issue of material fact exists as to whether a "single entity" performed the patented process. The "single entity" rule requires that "all steps of a claimed process are performed by or attributable to a single entity," Akamai Techs., Inc. v. Limelight Networks, Inc., 797 F.3d 1020, 1022 (Fed. Cir. 2015), and Willowood presented evidence that a third-party, not affiliated with Willowood, performed portions of the manufacturing process.

‘761 Patent. The ‘761 is another process patent, and the court denied Syngenta’s summary judgment motion as to both validity and infringement. Willowood’s expert testimony on obviousness as to this patent did not suffer from the same flaw as his testimony concerning the ‘138 Patent, the court found. Thus, Willowood presented admissible evidence that conflicted with Syngenta’s expert’s testimony, which sufficed to create a triable issue of fact as to obviousness, the court held. Similarly, the court found that conflicting expert testimony created a triable issue of fact as to infringement. Since both parties had moved for summary judgment on whether Willowood had infringed the ‘761 Patent, the court denied both motions.

The court did conclude that the burden of proving infringement should shift from Syngenta to Willowood under Section 295 of the Patent Act. According to the court, Syngenta established the requisite basis for a burden shift—there is a substantial likelihood that Willowood infringed the ‘761 Patent, and Syngenta has made reasonable discovery efforts that proved unsuccessful to obtain certain production records from Willowood’s third-party supplier in China.

Copyright claims. Willowood also sought summary judgment on Syngenta’s copyright infringement claims, but the court stated that it will rule on that aspect of Willowood’s motion by separate order.

The case is No. 1:15-cv-00274-CCE-JEP.

Attorneys: Hari Santhanam (Kirkland & Ellis, LLP) and Richard A. Coughlin (Smith Moore Leatherwood LLP) for Syngenta Crop Protection, LLC. Alan W. Duncan (Mullins Duncan Harrell & Russell PLLC) and Barry S. Neuman (Whiteford, Taylor & Preston LLP) for Willowood, LLC, Willowood USA, LLC and Willowood Azoxystrobin, LLC.

Companies: Syngenta Crop Protection, LLC; Willowood, LLC; Willowood USA, LLC; Willowood Azoxystrobin, LLC

Cases: Patent NorthCarolinaNews