DCT

1:18-cv-06652

Howard Bernstein v. Molecular Defense Holdings LLC

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I. Executive Summary and Procedural Information

  • Parties & Counsel:
  • Case Identification: 1:18-cv-06652, S.D.N.Y., 07/25/2018
  • Venue Allegations: Venue is alleged to be proper in the Southern District of New York because the corporate defendants maintain their principal places of business in the district and individual defendant Kevin Davis resides in the district.
  • Core Dispute: Plaintiffs, as major shareholders in the original patent-holding entity, allege that Defendants wrongfully obtained ownership of six patents and improperly added Defendant Kevin Davis as a co-inventor on a seventh derivative patent, all related to glutathione formulations.
  • Technical Context: The patents relate to pharmaceutical formulations and methods for the oral administration of glutathione, a naturally occurring antioxidant, to treat various diseases and conditions associated with oxidative stress.
  • Key Procedural History: The complaint alleges a complex history of corporate transactions, centering on the purported transfer of six patents from Antioxidant Pharmaceuticals Corporation (APC) to Defendant Molecular Defense Holdings, LLC via a "Subscription Agreement" executed in March 2016, shortly after the original inventor, Dr. Harry Demopoulos, suffered a debilitating stroke. Plaintiffs question the validity of this transfer, alleging APC was a dissolved corporation and Dr. Demopoulos lacked capacity. The complaint also challenges the inventorship of a later-issued patent, alleging Defendant Kevin Davis was improperly added as a co-inventor to technology conceived solely by Dr. Demopoulos.

Case Timeline

Date Event
1996-12-31 Priority Date for '500 and '248 Patents
1997-12-31 Application Date for U.S. Patent No. 6,159,500
1999-12-08 Dr. Demopoulos executes assignment of patents to APC
1999-12-09 Application Date for U.S. Patent No. 6,204,248
2000-12-12 Issue Date for U.S. Patent No. 6,159,500
2001-03-20 Issue Date for U.S. Patent No. 6,204,248
2001-12-26 Antioxidant Pharmaceuticals Corporation (APC) is dissolved
2015-06-19 Provisional Application for '611 Patent filed (Dr. Demopoulos sole inventor)
2016-02-09 Dr. Demopoulos suffers a massive stroke
2016-02-24 Molecular Defense Holdings, LLC and MDC-Nevada incorporated
2016-03-02 Date of Subscription Agreement purporting to transfer APC Patents to MDH
2016-06-20 Non-Provisional Application for '611 Patent filed (Demopoulos & Davis as inventors)
2016-06-29 Dr. Demopoulos passes away
2017-02-14 Subscription Agreement filed with the USPTO
2018-01-16 Defendant Davis assigns his interest in the '611 Patent to MDC-Nevada
2018-02-27 Issue Date for U.S. Patent No. 9,901,611
2018-07-25 Complaint Filing Date

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

This analysis focuses on the first two patents listed in the complaint's "U.S. APC Patents" table. The complaint's primary allegations relate to ownership and inventorship rather than direct infringement.

U.S. Patent No. 6,159,500 - "Pharmaceutical Preparations of Glutathione and Methods of Administration Thereof," issued December 12, 2000

The Invention Explained

  • Problem Addressed: The patent’s background section states that prior attempts at oral administration of glutathione were considered ineffective because the molecule is unstable in alkaline or oxidative environments, is not absorbed by the stomach, and is degraded by enzymes in the intestine before it can be absorbed (ʼ500 Patent, col. 2:15-28).
  • The Patented Solution: The invention proposes a method for effective oral delivery of glutathione by administering a "bolus" of the compound in an encapsulated and pharmaceutically stabilized form, preferably on an empty stomach ('500 Patent, Abstract). The stabilization is achieved using an acidic reducing agent, such as ascorbic acid, which helps maintain glutathione in its active, reduced form and creates a charge couple that enhances penetration through cell membranes ('500 Patent, col. 18:5-24). This method is intended to create a high concentration of glutathione in the duodenum to facilitate efficient uptake ('500 Patent, col. 18:11-14).
  • Technical Importance: The invention provided a viable method for the oral delivery of a key biological antioxidant that was previously thought to require intravenous administration for therapeutic effect (Compl. ¶2).

Key Claims at a Glance

  • The complaint centers on ownership and does not assert specific claims for infringement. Independent claim 1 is representative of the core inventive method.
  • Essential elements of Claim 1 include:
    • A method of increasing glutathione levels in mammalian cells
    • comprising administering an oral bolus of encapsulated glutathione
    • pharmaceutically stabilized with an acidic reducing agent
    • in a rapidly dissolving formulation
    • to a mammal on an empty stomach
  • The complaint does not assert any claims for infringement.

U.S. Patent No. 6,204,248 B1 - "Pharmaceutical Preparations of Glutathione and Methods of Administration Thereof," issued March 20, 2001

The Invention Explained

  • Problem Addressed: As a continuation of the application leading to the ʼ500 Patent, the ʼ248 Patent addresses the same fundamental problem of ineffective oral delivery of glutathione ('248 Patent, col. 2:5-29).
  • The Patented Solution: This patent expands on the utility of the oral delivery method, focusing on its use to alter the reduction/oxidation (redox) potential within cells ('248 Patent, Abstract). By successfully increasing intracellular glutathione levels, the invention claims a method to alter the expression of "redox-sensitive" gene products, thereby influencing cellular processes beyond simple antioxidant effects ('248 Patent, col. 1:11-19).
  • Technical Importance: The technology links the oral administration of an antioxidant to the regulation of gene expression, proposing a therapeutic mechanism for influencing cellular behavior in various disease states (Compl. ¶1).

Key Claims at a Glance

  • The complaint does not assert specific claims for infringement. Independent claim 1 is representative of the core inventive method.
  • Essential elements of Claim 1 include:
    • A method of altering in vivo cellular gene expression of at least one gene
    • comprising the step of enterally administering an efficacious amount of glutathione
    • to alter intracellular conditions, thereby altering redox-sensitive gene expression
  • The complaint does not assert any claims for infringement.

III. The Accused Instrumentality

The complaint does not identify a specific accused product, method, or service against which it alleges patent infringement. Instead, it alleges that the Defendants are wrongfully "asserting ownership, authority, and control over the intellectual property" and are "utilizing them absent Plaintiffs' consent and to their injury" (Compl. ¶¶111, 178). The core of the complaint is that the Defendants' business operations are founded upon the alleged misappropriation of the patent portfolio itself (Compl. ¶¶1, 6, 118).

IV. Analysis of Infringement Allegations

The complaint does not contain counts for patent infringement pursuant to 35 U.S.C. § 271. The legal claims focus on declaratory relief for patent ownership (Count Five), correction of inventorship (Counts Three and Four), conversion (Count Six), and unjust enrichment (Count Seven) (Compl. pp. 28-34). Therefore, a claim chart analysis is not applicable.

No probative visual evidence provided in complaint.

  • Identified Points of Contention: The central disputes raised in the complaint are not related to infringement but to the legal rights associated with the patents themselves.
    • Ownership Question: A primary point of contention will be the validity of the March 2, 2016 "Subscription Agreement" that purported to transfer the six APC Patents from Antioxidant Pharmaceuticals Corporation (APC) to Defendant Molecular Defense Holdings, LLC. The complaint raises the question of whether this transfer was valid, given allegations that APC was a dissolved corporation at the time and that its principal, Dr. Demopoulos, may have lacked the capacity to execute the agreement following his stroke (Compl. ¶¶ 94, 100-102).
    • Inventorship Question: A second key dispute concerns U.S. Patent No. 9,901,611. The complaint raises the question of whether Defendant Kevin Davis made a material contribution to the conception of the claimed invention, as required for co-inventorship, or whether he was improperly added to an invention conceived solely by Dr. Demopoulos (Compl. ¶¶ 126, 158, 168).

V. Key Claim Terms for Construction

Because the complaint's central allegations concern patent ownership and inventorship rather than infringement, no dispute over the construction of specific claim terms is presented. An analysis of key claim terms is therefore not applicable based on the provided complaint.

VI. Other Allegations

The complaint's primary allegations, which substitute for traditional infringement claims, are as follows:

  • Improper Inventorship: The complaint alleges that Dr. Demopoulos was the sole inventor of the provisional application leading to the '611 Patent (Compl. ¶122). It further alleges that Defendant Kevin Davis was improperly added as a co-inventor to the subsequent non-provisional application, which was filed after Dr. Demopoulos suffered his stroke, despite Davis's alleged lack of "scientific or technical background" in the relevant field (Compl. ¶¶ 126-127). Plaintiffs seek a court order correcting the inventorship of the '611 Patent by removing Kevin Davis (Compl. p. 36, ¶C).
  • Wrongful Patent Transfer: The complaint alleges that the six "U.S. APC Patents" were wrongfully transferred from Dr. Demopoulos's company, APC, to Defendant Molecular Defense Holdings, LLC (Compl. ¶95). The basis for this allegation includes the claim that APC was a dissolved corporation for fifteen years prior to the transfer and thus lacked authority to assign assets, and that Dr. Demopoulos's capacity to authorize the agreement after his stroke was "questionable" (Compl. ¶¶ 100, 102). Plaintiffs seek a declaration that the Defendants have no ownership rights in the patents and that Plaintiffs are the sole owners (Compl. p. 36, ¶E).

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

The resolution of this case appears to hinge on two fundamental questions of patent law and corporate formality, rather than on technical claim interpretation.

  • A central issue will be one of corporate and contractual validity: did the dissolved corporation Antioxidant Pharmaceuticals Corporation (APC) possess the legal authority to assign the APC Patents, and did its principal, Dr. Demopoulos, have the capacity to execute the transfer to Molecular Defense Holdings, LLC shortly after his debilitating stroke?
  • A key evidentiary question will be one of inventive contribution: what evidence exists to demonstrate that Defendant Kevin Davis conceived of a significant element of the claimed invention in the '611 patent, as required to be named a co-inventor, versus the complaint's allegation that he was improperly added to an invention conceived solely by Dr. Demopoulos?