DCT

1:10-cv-00276

BASF Agro BV Arnhem NL Wadenswil Branch v. Makhteshim Agan Of North America

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I. Executive Summary and Procedural Information

  • Parties & Counsel:
  • Case Identification: 1:10-cv-00276, M.D.N.C., 04/08/2010
  • Venue Allegations: Venue is alleged to be proper based on Defendants' distribution and sales of agrochemical products in the Middle District of North Carolina, as well as Defendant Makhteshim Agan of North America, Inc.'s principal place of business in the district.
  • Core Dispute: Plaintiffs allege that Defendants' planned importation and sale of generic Fipronil-based termiticide products will infringe patents covering the manufacturing process for the Fipronil active ingredient and the methods for its application in termite control.
  • Technical Context: The case involves the agrochemical industry, specifically the market for Fipronil, a widely used insecticide for controlling termites and other pests.
  • Key Procedural History: The complaint is filed as a declaratory judgment action, seeking to block Defendants' planned market entry. Plaintiffs note that a key patent covering the Fipronil chemical compound itself (U.S. Patent No. 5,232,940) is set to expire in August 2010, which Plaintiffs frame as the pretext for Defendants' planned launch of products that allegedly infringe the asserted process and method-of-use patents.

Case Timeline

Date Event
1994-02-22 '945 Patent Priority Date
1996-11-29 '010 and '743 Patents Priority Date
1997-04-08 '945 Patent Issue Date
2002-07-02 '010 Patent Issue Date
2004-12-28 '743 Patent Issue Date
Spring 2009 Defendants begin steps to secure EPA regulatory approval
2010-04-08 Complaint Filing Date
2010-08-03 '940 compound patent expiration date
Early Aug. 2010 Defendants' alleged infringing activities scheduled to begin
2015-02-22 '945 Patent expiration date
2017-11-27 '010 and '743 Patents expiration date

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

U.S. Patent No. 5,618,945 - "Process For the Sulfinylation of Heterocyclic Compounds"

The Invention Explained

  • Problem Addressed: The patent describes conventional processes for producing sulfinylated heterocyclic compounds (a class of chemicals that includes the insecticide Fipronil) as suffering from two main drawbacks: they either require a "difficult oxidation step" that complicates manufacturing, or they use reactants that are "very toxic," making them intricate to handle safely ('945 Patent, col. 1:13-29).
  • The Patented Solution: The invention proposes a direct, one-step "sulfinylation" process. It achieves this by reacting a specific class of sulfinyl compounds, represented by the formula RS(O)X, directly with a heterocyclic compound ('945 Patent, Abstract; col. 2:10-28). This process avoids the problematic subsequent oxidation step required by prior methods and can use less toxic starting materials ('945 Patent, col. 1:25-36).
  • Technical Importance: The claimed process offers a potentially more efficient, safer, and streamlined method for manufacturing commercially valuable agrochemical compounds like Fipronil ('945 Patent, col. 1:30-36).

Key Claims at a Glance

  • The complaint asserts "one or more claims" of the '945 Patent (Compl. ¶41). Independent claim 1 is representative of the core process invention.
  • Independent Claim 1 recites a process for the sulfinylation of a heterocyclic compound, comprising the key steps of:
    • Reacting a compound of the formula RS(O)X, where R is a substituted alkyl group and X is one of several specified chemical groups.
    • Reacting this compound with a heterocyclic compound "Het" selected from a specified group (e.g., pyrazoles).
    • Performing the reaction in the presence of either (a) a catalyst such as a tosylate, hydrochloride, or mesylate of an amine, or (b) hydrochloric acid.
  • The complaint does not foreclose the assertion of other independent or dependent claims.

U.S. Patent No. 6,414,010 - "Pesticidal Pyrazoles and Derivatives"

The Invention Explained

  • Problem Addressed: The patent explains that conventional termite control methods, which rely on creating a continuous chemical "barrier" around a building, can fail if there are any "loopholes in the treatment" ('010 Patent, col. 1:11-13).
  • The Patented Solution: The invention is a method for protecting a building by applying an effective amount of a non-repellent, slow-acting insecticide (like Fipronil) at "discrete locations" rather than as a continuous barrier ('010 Patent, col. 1:49-53). Because the insecticide is not immediately lethal and is undetectable to termites, foraging insects contact the chemical, carry it back to the nest, and transfer it to other termites, achieving colony control with less total chemical application (Compl. ¶12; '010 Patent, col. 1:54-65).
  • Technical Importance: This method allows for effective termite protection using less insecticide, reducing cost, labor, and potential environmental impact compared to traditional barrier treatments (Compl. ¶22).

Key Claims at a Glance

  • The complaint asserts "one or more claims" of the '010 Patent (Compl. ¶46). Independent claim 1 is representative of the core method-of-use invention.
  • Independent Claim 1 recites a process for protecting a building, comprising the key steps of:
    • Forming a solution or suspension of an insecticidally active ingredient that has "no quick knock down effect and a secondary killing action."
    • Forming "treated and untreated locations along the perimeter of the building" by applying the solution/suspension to "discrete locations."
    • The active ingredient is an insecticide of the formula (I), a class of compounds that includes Fipronil.
  • The complaint does not foreclose the assertion of other independent or dependent claims.

U.S. Patent No. 6,835,743 - "Pesticidal Pyrazoles and Derivatives"

Technology Synopsis

This patent, like the '010 Patent, addresses the shortcomings of conventional termite barrier treatments (Compl. ¶14). It claims a process for protecting a building by applying an insecticidal compound, such as Fipronil, "at discrete locations" to leverage the compound's non-repellent and slow-acting properties for more efficient, targeted termite control ('743 Patent, col. 2:50-55).

Asserted Claims

The complaint alleges infringement of "one or more claims" (Compl. ¶51). The patent includes independent claims 1, 15, and 18.

Accused Features

The accused features are the methods of application for Defendants' Fipronil-based termiticide, which are allegedly detailed in the "Master Use Label" for their "TERMINIL" product (Compl. ¶27, ¶29).

III. The Accused Instrumentality

Product Identification

The accused instrumentalities are "Fipronil technical material" and formulated end-use products, including a termiticide to be marketed under the name "TERMINIL" (Compl. ¶24, ¶28).

Functionality and Market Context

  • The "Fipronil technical material" is the active chemical ingredient, which Plaintiffs allege on information and belief is manufactured abroad by a Chinese supplier using a process that infringes the '945 Patent (Compl. ¶26, ¶30).
  • Defendants allegedly import this material and use it to formulate end-use products like TERMINIL for sale in the U.S. (Compl. ¶27). The complaint alleges that Defendants' TERMINIL product will be sold with a "Master Use Label" that instructs customers on how to apply the product, and that these instructions direct a method of use that infringes the '010 and '743 patents (Compl. ¶29).
  • The complaint frames Defendants' products as generic versions of Plaintiffs' Fipronil-based products (e.g., Termidor®) intended to enter the market upon the expiration of the patent on the Fipronil compound itself (Compl. ¶25, ¶36).

IV. Analysis of Infringement Allegations

No probative visual evidence provided in complaint.

'945 Patent Infringement Allegations

Claim Element (from Independent Claim 1) Alleged Infringing Functionality Complaint Citation Patent Citation
A process for the sulfinylation of a heterocyclic compound comprising reacting a compound of the formula RS(O)X... Defendants import, use, or sell Fipronil technical material allegedly made via a process that involves reacting precursor chemicals. ¶26, ¶30 col. 2:12-28
with a heterocyclic compound Het... The accused process allegedly uses a pyrazole-type heterocyclic compound as a starting material to produce Fipronil. ¶26, ¶30 col. 2:29-39
in the presence of (a) a compound selected from the group consisting of the tosylates, hydrochlorides and mesylates of primary, secondary and tertiary amines, or (b) hydrochloric acid. The complaint alleges, on information and belief, that the manufacturing process used for the imported Fipronil employs the patented reaction conditions. ¶30 col. 2:41-50

'010 Patent Infringement Allegations

Claim Element (from Independent Claim 1) Alleged Infringing Functionality Complaint Citation Patent Citation
a) forming a solution or suspension of an insecticidally active ingredient in a liquid... wherein the active ingredient has no quick knock down effect and a secondary killing action; Defendants' TERMINIL product is a Fipronil-based termiticide, which is a slow-acting insecticide, provided as a formulation to be mixed with liquid. ¶21, ¶28, ¶29 col. 4:51-56
b) forming treated and untreated locations along the perimeter of the building by applying an effective amount of said solution or suspension to discrete locations... The Master Use Label for TERMINIL allegedly instructs users to apply the product at specific, non-continuous points around a building, copying Plaintiffs' "PerimeterPlus" treatment method. ¶22, ¶29 col. 1:49-53
and said active ingredient is an insecticide of the formula (I) The active ingredient in TERMINIL is Fipronil, a compound falling within the scope of formula (I). ¶28 col. 2:3-5

Identified Points of Contention

  • Evidentiary Questions ('945 Patent): The infringement allegation for the '945 process patent is based on "information and belief" regarding a manufacturing process occurring in China (Compl. ¶30). A central point of contention will be what evidence, if any, Plaintiffs can develop to prove the specific chemical steps and conditions used by the foreign manufacturer and whether that process reads on the claims.
  • Technical Questions ('010/'743 Patents): The infringement analysis for the method patents will depend on the precise instructions contained in the Master Use Label for TERMINIL. A key question is whether those instructions direct users to perform every step of the claimed methods, including the application at "discrete locations" in a manner that meets the claim limitations.

V. Key Claim Terms for Construction

For the '945 Patent

  • The Term: "reacting"
  • Context and Importance: This term, in the context of claim 1, defines the core chemical transformation. The infringement analysis will depend entirely on whether the accused process falls within the scope of the specific reaction claimed. Practitioners may focus on this term because its construction will determine whether minor variations in catalysts, solvents, or reaction conditions can avoid infringement.
  • Intrinsic Evidence for Interpretation:
    • Evidence for a Broader Interpretation: The specification describes the reaction being performed in various organic solvents (toluene, dichloroethane, etc.) and across a wide temperature range ("between 0° and 100° C."), which may support a construction that is not limited to a single set of conditions ('945 Patent, col. 3:19-28).
    • Evidence for a Narrower Interpretation: The patent provides specific working examples with precise reactants, catalysts (e.g., dimethylamine tosylate), and temperatures (e.g., "heated to 50° C."), which could be argued to limit the scope of "reacting" to processes that are highly similar to those explicitly disclosed ('945 Patent, col. 5:35-51).

For the '010 Patent

  • The Term: "discrete locations"
  • Context and Importance: This term is central to distinguishing the invention from prior art "barrier" treatments. Its definition will determine what application patterns constitute infringement. Practitioners may focus on this term as its scope—whether it means only corners, or any non-continuous pattern—is critical to the infringement case for the method-of-use patents.
  • Intrinsic Evidence for Interpretation:
    • Evidence for a Broader Interpretation: The patent's overall objective is to move away from a continuous chemical barrier, suggesting "discrete locations" could broadly mean any targeted, non-contiguous application points ('010 Patent, col. 1:49-53).
    • Evidence for a Narrower Interpretation: The specification notes that application is "more effective" at loci where termites are more frequent, such as "the corners and/or crossing walls" and areas with "greater humidity" ('010 Patent, col. 3:25-33). Example 1 shows application only at corners and wall intersections ('010 Patent, col. 5:21-32). This may support a narrower construction limited to specific, high-value structural points.

VI. Other Allegations

  • Indirect Infringement: For the '010 and '743 patents, the complaint's central theory is induced infringement. It alleges Defendants will knowingly and intentionally cause their customers to infringe by selling the TERMINIL product with a "Master Use Label" that provides instructions to perform the patented methods of application (Compl. ¶27, ¶29).
  • Willful Infringement: The complaint alleges that Defendants had pre-suit knowledge of the patents, citing communications in 2009 and 2010 where Plaintiffs sought, and Defendants allegedly refused to provide, "assurances of non-infringement" (Compl. ¶31, ¶39). This refusal to provide information about the manufacturing process is alleged to support a finding of willful infringement for any post-filing infringing activities (Compl. ¶42, ¶47, ¶52).

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

  • A central issue will be one of process verification: what evidence can Plaintiffs uncover to prove that the Fipronil technical material, allegedly sourced from a foreign manufacturer, is in fact made by the specific chemical process recited in the '945 patent, thereby substantiating an allegation currently based on "information and belief"?
  • A key legal and factual question will be one of instructional infringement: do the specific directions on the accused "TERMINIL" Master Use Label, when followed by an end-user, result in the performance of every limitation of the asserted claims of the '010 and '743 patents, particularly concerning the application at "discrete locations"?
  • A threshold procedural question, arising from the suit's nature as a declaratory judgment action, will be one of immediacy and remedy: have Plaintiffs sufficiently alleged a "real and immediate controversy" to justify adjudication before the accused products have launched, and what is the likelihood of obtaining the requested injunctive relief to prevent future, rather than ongoing, infringement?