DCT
1:24-cv-00519
MP Mine Operations LLC v. Neo Water Treatment LLC
I. Executive Summary and Procedural Information
- Parties & Counsel:
- Plaintiff: MP Mine Operations LLC, and Secure Natural Resources LLC (Delaware)
- Defendant: Neo Water Treatment LLC, and Neo Chemicals and Oxides LLC (Delaware)
- Plaintiff’s Counsel: Faegre Baker Daniels LLP; Pillsbury Winthrop Shaw Pittman LLP
- Case Identification: 1:24-cv-00519, D. Del., 05/22/2024
- Venue Allegations: Venue is alleged to be proper in the District of Delaware because both Defendants are Delaware limited liability companies.
- Core Dispute: Plaintiffs allege that Defendants misappropriated trade secrets relating to water treatment technology, improperly patented those secrets, and are now infringing one of the resulting patents.
- Technical Context: The technology involves using rare earth elements, such as cerium and lanthanum, as clarifying agents to remove phosphorus and other contaminants from wastewater.
- Key Procedural History: The complaint's allegations are rooted in the 2015 bankruptcy of Molycorp, Inc. Plaintiffs claim to have acquired Molycorp's intellectual property related to its rare earth-based water treatment business via an Asset Purchase Agreement in 2016. Defendants are alleged to be entities that emerged from the same bankruptcy but were not entitled to the intellectual property at issue. Plaintiffs allege that former Molycorp employees, now employed by Defendants, used the acquired trade secrets to file for the patents now in dispute.
Case Timeline
| Date | Event |
|---|---|
| 2015-06-25 | Molycorp, Inc. files for Chapter 11 bankruptcy protection. |
| 2016-04-15 | Plaintiff SNR executes Asset Purchase Agreement for Molycorp Minerals assets. |
| 2016-09-06 | Defendant entities ("Downstream Debtors") emerge from Molycorp bankruptcy. |
| 2017-06-19 | Plaintiff MP Mine executes Asset Purchase Agreement for remaining Molycorp Mineral Debtors assets. |
| 2017-11-01 | Earliest priority date for U.S. Patent No. 11,111,161. |
| 2018-09-25 | Priority date for U.S. Patent No. 10,988,395. |
| 2021-04-27 | U.S. Patent No. 10,988,395 issues. |
| 2021-09-07 | U.S. Patent No. 11,111,161 issues. |
| 2022-12-20 | U.S. Patent No. 11,530,148 issues. |
| 2023-08-01 | U.S. Patent No. 11,713,262 issues. |
| 2024-05-22 | Second Amended Complaint filed. |
II. Technology and Patent(s)-in-Suit Analysis
U.S. Patent No. 10,988,395 - "Cerium-Lanthanum Treatment Method for Reduction of Contaminants in Wastewater Membrane Bioreactors"
Patent Identification
The patent-in-suit is U.S. Patent No. 10,988,395, "Cerium-Lanthanum Treatment Method for Reduction of Contaminants in Wastewater Membrane Bioreactors," issued April 27, 2021 (the "’395 Patent").
The Invention Explained
- Problem Addressed: The patent describes the challenge of removing phosphorus from wastewater using Membrane Bioreactor (MBR) systems ('395 Patent, col. 1:52-54). While traditional clarifying agents like ferric salts can remove phosphorus, they often cause "excessive levels of fouling or damage to the membranes," which halts operations and requires costly cleaning or replacement ('395 Patent, col. 2:3-12).
- The Patented Solution: The invention proposes a method of dosing a wastewater stream with a "rare earth clarifying agent," specifically chloride salts of cerium (Ce) and lanthanum (La), before passing the stream through the MBR's membrane ('395 Patent, Abstract). This process is claimed to effectively remove phosphorus by binding it into solids that can be filtered out, without causing the detrimental membrane fouling associated with prior art agents ('395 Patent, col. 4:51-65). The overall process is illustrated in the patent’s Figure 1 ('395 Patent, Fig. 1).
- Technical Importance: The described solution offers a way to meet stringent phosphorus discharge regulations in wastewater treatment while avoiding a primary operational drawback—membrane fouling—of existing MBR chemical treatment methods ('395 Patent, col. 2:15-20).
Key Claims at a Glance
The complaint alleges infringement of at least Claim 1 and notes that independent claims 1 and 22 disclose the core invention (Compl. ¶¶64, 76).
Independent Claim 1:
- A method for treating wastewater using a membrane bioreactor comprising:
- dosing a wastewater stream...containing a first concentration of phosphorus with a dose amount of a rare earth clarifying agent to obtain a dosed wastewater stream, the first concentration of phosphorus being greater than a target concentration of phosphorus; and
- passing the dosed wastewater stream through a membrane of the membrane bioreactor system to obtain a membrane permeate stream, the membrane permeate stream having a permeate concentration of phosphorus less than the first concentration phosphorus.
Independent Claim 22:
- A method for treating wastewater using a membrane bioreactor comprising:
- dosing a wastewater stream...with a dose amount of a rare earth clarifying agent comprising CeCl3 and LaCl3...;
- removing at least some of the phosphorus as precipitated sludge from the wastewater stream; and
- passing the dosed wastewater stream through a membrane of the membrane bioreactor system to obtain a membrane permeate stream...
III. The Accused Instrumentality
Product Identification
The accused instrumentality is Defendants' "WaterFX product" (Compl. ¶74).
Functionality and Market Context
- The complaint alleges that Defendants offer for sale and sell the WaterFX product, described in their marketing materials as a "lanthanide solution" (Compl. ¶¶74-75). An annotated corporate organizational chart from the Molycorp bankruptcy proceeding illustrates the 'Molycorp Minerals Debtors' entities whose assets were subject to the sale (Compl. p. 6).
- According to these materials, the product "has successfully removed phosphorous in ... membrane bioreactors (MBRs)" (Compl. ¶74; Ex. N). The complaint alleges that based on such statements, Defendants are practicing the method of at least Claim 1 of the ’395 Patent (Compl. ¶76).
IV. Analysis of Infringement Allegations
The complaint’s infringement allegations are based primarily on Defendants’ marketing materials for the WaterFX product.
’395 Patent Infringement Allegations
| Claim Element (from Independent Claim 1) | Alleged Infringing Functionality | Complaint Citation | Patent Citation |
|---|---|---|---|
| A method for treating wastewater using a membrane bioreactor comprising: dosing a wastewater stream... with a dose amount of a rare earth clarifying agent... | Defendants sell the "WaterFX product," which is described as a "lanthanide solution," for use in wastewater treatment. | ¶74 | col. 9:22-31 |
| ...and passing the dosed wastewater stream through a membrane of the membrane bioreactor system to obtain a membrane permeate stream... | Defendants' marketing materials state that the WaterFX product "has successfully removed phosphorous in membrane bioreactors (MBRs)." | ¶74 | col. 9:53-61 |
Identified Points of Contention
- Evidentiary Questions: The complaint's infringement allegations rely on marketing statements rather than detailed technical analysis of the accused product's use. A central question will be what factual evidence supports the assertion that the use of "WaterFX" in an MBR system meets all limitations of the asserted claims, including the specific concentration and removal efficiency parameters.
- Scope Questions: A potential issue may arise regarding direct versus indirect infringement. The complaint alleges Defendants are "practicing" the claimed method (Compl. ¶76), which suggests direct infringement. However, selling a product for others to use in an infringing method typically gives rise to claims of indirect infringement. The complaint does not plead specific facts to support an inducement theory, such as citing instructions or user manuals that direct customers to perform the claimed steps.
V. Key Claim Terms for Construction
The primary dispute centers on ownership rather than claim construction. However, should the infringement analysis proceed, the following term may be critical.
The Term
"rare earth clarifying agent"
Context and Importance
The definition of this term is central to the scope of the patent's claims. The accused product is described as a "lanthanide solution," while the patent repeatedly characterizes the invention as using "chloride salts" of rare earth elements. Practitioners may focus on whether the accused "lanthanide solution" meets the more specific "chloride salts" definition supported by the patent's disclosure.
Intrinsic Evidence for Interpretation
- Evidence for a Broader Interpretation: The patent frequently uses the general term "rare earth clarifying agent" in describing the invention, which could support an argument that the claims are not limited to a particular salt form ('395 Patent, col. 2:28-34).
- Evidence for a Narrower Interpretation: The specification consistently and repeatedly defines the agent as "chloride salts of rare earth elements" or, more specifically, "CeCl3 and LaCl3" ('395 Patent, col. 4:11-12; col. 4:37-38; Abstract). This consistent specification may suggest a narrower construction limited to the disclosed chloride salt embodiments.
VI. Other Allegations
Indirect Infringement
The complaint does not contain specific factual allegations to support claims for induced or contributory infringement, such as knowledge and intent to encourage infringement by customers. The Prayer for Relief includes a standard request to enjoin those acting "in active concert or participation" with Defendants (Compl., Prayer ¶3).
Willful Infringement
The complaint does not allege that Defendants had pre-suit knowledge of the ’395 Patent itself. The Prayer for Relief requests treble damages for "intentional, willful, and malicious misappropriation of Plaintiffs' inventions, trade secrets, and infringement of Plaintiffs' patents" (Compl., Prayer ¶8). This suggests that any claim for enhanced damages for infringement may be tied to the allegation that Defendants knew they were using misappropriated technology that was later patented.
VII. Analyst’s Conclusion: Key Questions for the Case
The resolution of this case appears to depend on three central, open questions for the court:
- A core issue will be one of rightful ownership: Do Plaintiffs possess superior title to the technology claimed in the asserted patents as a result of the Molycorp bankruptcy proceedings and subsequent asset purchase agreements, or was the technology independently developed by the named inventors while employed by Defendants?
- A related question will be one of trade secret misappropriation: Does the evidence show that the named inventors conceived of the patented inventions while employed at Molycorp, and subsequently used that proprietary information to file patent applications on behalf of Defendants, as alleged in the complaint?
- A final evidentiary question will be one of infringement: Assuming Plaintiffs are deemed the rightful owners of the ’395 Patent, does the evidence, which currently consists of marketing materials, demonstrate that Defendants' "WaterFX" product is used in a manner that directly practices every step of the asserted method claims?