Huvepharma EOOD v. BASF Corp

I. Executive Summary and Procedural Information

• Parties & Counsel:
  • Plaintiff: Huvepharma EOOD (Republic of Bulgaria) and Huvepharma, Inc. (USA)
  • Defendant: BASF Corporation (USA) and BASF Se (Federal Republic of Germany)
  • Plaintiff’s Counsel: Bayard, P.A.
• Case Identification: 1:20-cv-00513, D. Del., 04/15/2020
• Venue Allegations: Venue is alleged to be proper in the District of Delaware because Defendant BASF Corporation is a Delaware corporation and Defendant BASF Se is a foreign company.
• Core Dispute: Plaintiff alleges that Defendant’s Natuphos® E animal feed additives are produced by a method that infringes a U.S. patent covering the production of E. coli phytase in fungal host cells.
• Technical Context: The technology involves the biotechnological production of phytase, an enzyme added to animal feed to improve the nutritional uptake of phosphorus by monogastric animals like swine and poultry.
• Key Procedural History: Plaintiff Huvepharma is the exclusive licensee of the patent-in-suit from Cornell Research Foundation, Inc. The complaint alleges that Defendant BASF was aware of the patent family through the patent prosecution activities of its corporate predecessor, Diversa Corp. Subsequent to the filing of this complaint, all claims of the patent-in-suit (Claims 1-23) were cancelled in an Inter Partes Review (IPR) proceeding (IPR2019-00577), a development which may render the infringement claims moot and limit any potential damages to the period before the claims were cancelled.

Case Timeline

Date	Event
1998-06-25	’300 Patent Priority Date
2001-09-01	Exclusive license agreement between Cornell Research Foundation and Phytex, LLC
2006-01-01	Phytex begins U.S. manufacturing and sale of OptiPhos® product
2013-01-01	Huvepharma acquires Phytex's rights, including exclusive license to the '300 Patent
2014-01-01	BASF allegedly begins manufacturing accused Natuphos® E products
2015-03-31	U.S. Patent No. 8,993,300 Issues
2016-01-01	Defendants allegedly begin importing and selling Natuphos® E in the U.S.
2019-01-23	Inter Partes Review (IPR2019-00577) filed against the '300 Patent
2020-04-15	Complaint Filed
2023-03-15	U.S. Patent Office issues certificate cancelling all claims of the '300 Patent

II. Technology and Patent(s)-in-Suit Analysis

U.S. Patent No. 8,993,300 - “Overexpression of Phytase Genes in Yeast Systems”

• Patent Identification: U.S. Patent No. 8993300, “Overexpression of Phytase Genes in Yeast Systems,” issued March 31, 2015.

The Invention Explained

• Problem Addressed: The patent describes that prior microbial phytase enzymes used in animal feed were not sufficiently heat-stable (thermotolerant) to withstand the feed pelleting process, which involves heat. This instability, along with high production costs, limited their practical use. (’300 Patent, col. 2:42-51; Compl. ¶29).
• The Patented Solution: The invention provides a method for producing a more effective and thermostable phytase enzyme. The method involves taking a polynucleotide (gene) that encodes for a phytase from the bacterium Escherichia coli and expressing this gene in a different type of organism—a fungal or yeast cell—which serves as a "heterologous host." This process is designed to yield a functional phytase that can be isolated for use in animal feed. (’300 Patent, Abstract; col. 9:12-20).
• Technical Importance: This approach provided a method to economically produce a phytase that was not only effective at releasing phosphorus but was also more stable at the higher temperatures required for manufacturing commercial animal feed. (’300 Patent, col. 9:28-34).

Key Claims at a Glance

• The complaint asserts infringement of claims 1-9. (Compl. ¶57).
• Independent claim 1, the broadest asserted claim, recites the following essential elements:
  • A method of producing a phytase in fungal cells, the method comprising:
  • providing a polynucleotide encoding an Escherichia coli phytase;
  • expressing the polynucleotide in the fungal cells; and
  • isolating the expressed Escherichia coli phytase wherein the Escherichia coli phytase catalyzes the release of phosphate from phytate.
• The complaint asserts dependent claims 2-9, which add further limitations regarding the type of fungal cell and properties of the resulting phytase. (Compl. ¶57).

III. The Accused Instrumentality

Product Identification

• The accused instrumentalities are Defendant's "Natuphos® E" phytase animal feed products, including various formulations such as Natuphos® E 5000, Natuphos® E 10000, and Natuphos® E 50000. (Compl. ¶9).

Functionality and Market Context

• The Natuphos® E products are enzymes sold as additives for animal feed to help swine and poultry digest phytate, thereby releasing phosphorus for nutritional absorption. (Compl. ¶47). The complaint alleges these products are manufactured outside the U.S. using the patented method and then imported, distributed, and sold within the U.S. by BASF. (Compl. ¶9, ¶15).
• The complaint alleges that the accused products are produced by expressing a polynucleotide encoding an E. coli AppA phytase within a fungal host, Aspergillus niger, and then isolating the resulting enzyme. (Compl. ¶39-41, ¶43-44).
• The complaint positions Natuphos® E as a direct competitor to Huvepharma's own product, OptiPhos®, which is alleged to be manufactured using the patented method. (Compl. ¶7-8).

IV. Analysis of Infringement Allegations

The complaint does not provide the referenced claim chart exhibit. The following summary is based on the narrative allegations.

No probative visual evidence provided in complaint.

'300 Patent Infringement Allegations

Claim Element (from Independent Claim 1)	Alleged Infringing Functionality	Complaint Citation	Patent Citation
A method of producing a phytase in fungal cells, the method comprising: providing a polynucleotide encoding an Escherichia coli phytase;	The accused phytase products are alleged to have been produced by providing a polynucleotide that encodes a phytase derived from E. coli. The complaint cites laboratory testing that allegedly confirmed the presence of E. coli AppA proteins in the final product.	¶40, ¶41	col. 9:12-14
expressing the polynucleotide in the fungal cells; and	The complaint alleges that the phytase in the accused products was expressed in a fungal host, specifically the filamentous fungus Aspergillus niger.	¶39, ¶41, ¶43	col. 9:16-18
isolating the expressed Escherichia coli phytase	The Natuphos® E enzyme is allegedly isolated from the production broth through industrial processes such as solid/liquid separation and ultra-filtration.	¶44, ¶45	col. 8:3-7
wherein the Escherichia coli phytase catalyzes the release of phosphate from phytate.	The accused products are marketed for and function to catalyze the release of phosphate from phytate in animal feed to improve nutrient absorption.	¶46, ¶47	col. 1:31-34

Identified Points of Contention

• Factual Question: A central factual dispute is foreshadowed by the complaint's own allegations. While Plaintiff asserts, based on its own testing, that the accused product is made using an E. coli-derived gene (Compl. ¶41), it also acknowledges that a BASF document claims the gene is a "synthetic hybrid" sourced from other bacteria (Hafnia sp., Yersinia mollaretii and Buttiauxella gaviniae) (Compl. ¶41). This raises a critical evidentiary question: what is the actual genetic origin of the enzyme in the accused Natuphos® E products?
• Scope Questions: The case raises the question of whether the term "Escherichia coli phytase" should be construed to cover a synthetically created phytase, or if its scope is limited to a phytase expressed from a polynucleotide physically isolated from an E. coli organism.

V. Key Claim Terms for Construction

The Term: "Escherichia coli phytase"

• Context and Importance: The definition of this term is dispositive. The infringement case hinges on whether the enzyme in Defendant’s product falls within its scope. Practitioners may focus on this term because the complaint anticipates a defense that the accused phytase is a "synthetic hybrid" derived from different organisms.
• Intrinsic Evidence for Interpretation:
  • Evidence for a Broader Interpretation: The patent specification focuses on the functional characteristics and advantages of the resulting enzyme, such as thermostability and pH optima. (e.g., ’300 Patent, col. 8:1-12). A party could argue the term should encompass any phytase that has the defining sequence and functional properties of the E. coli AppA phytase disclosed in the patent, regardless of its precise manufacturing origin (e.g., synthetic vs. naturally isolated).
  • Evidence for a Narrower Interpretation: The patent repeatedly describes the invention as involving a gene "isolated from" E. coli. For example, the specification states, "The preferred appA gene is isolated from Escherichia coli," and "The '300 Patent involves producing phytases that are encoded by polynucleotides isolated from bacterial cells, i.e., from E. coli." (’300 Patent, col. 9:12-14; Compl. ¶31). This language may support a narrower construction limited to phytase originating from a gene physically extracted from E. coli bacteria.

VI. Other Allegations

Willful Infringement

• The complaint alleges that Defendants' infringement was willful. The allegations are based on imputed knowledge through a corporate predecessor, Diversa Corp. The complaint asserts that during the prosecution of its own phytase patents, Diversa cited the parent patent of the '300 patent family as prior art, thereby establishing awareness. (Compl. ¶50-51). Plaintiff alleges that Defendants, as Diversa's successor-in-interest, continued to sell the accused products after the '300 patent issued in 2015, despite this knowledge. (Compl. ¶52-53).

VII. Analyst’s Conclusion: Key Questions for the Case

• A primary issue in this case will be one of evidentiary proof: can Plaintiff demonstrate, through discovery and expert analysis, that the enzyme in BASF's Natuphos® E products is in fact an "Escherichia coli phytase" as required by the claims, directly contradicting BASF's own technical documentation?
• A key legal question will be one of claim construction: does the term "Escherichia coli phytase," as used in the patent, encompass the "synthetic hybrid" enzyme that BASF allegedly uses, or is its meaning restricted to enzymes derived from naturally occurring E. coli genetic material?
• The most significant question, arising from events after the complaint was filed, is procedural and remedial: given the subsequent cancellation of all asserted patent claims by the U.S. Patent Office, what is the legal effect on this litigation, and what, if any, past damages could Plaintiff recover for the period of infringement prior to the claims' invalidation?