Nisus Corp v. Sostram Corp

I. Executive Summary and Procedural Information

• Parties & Counsel:
  • Plaintiff: Nisus Corporation (Tennessee)
  • Defendant: Sostram Corporation (Georgia)
  • Plaintiff’s Counsel: Luedeka, Neely & Graham, P.C.
• Case Identification: 3:10-cv-108, E.D. Tenn., 03/19/2010
• Venue Allegations: Plaintiff alleges venue is proper based on Defendant's substantial and continuous business in the district, including the sale of the accused product to pest control contractors.
• Core Dispute: Plaintiff alleges that Defendant’s borate-based termiticide product infringes a patent related to methods for preventing termite damage by treating the surface of non-wood building materials.
• Technical Context: The technology involves chemical pest control compositions and methods designed to create a surface barrier on materials like concrete, preventing termites from building shelter tubes to access and damage structures.
• Key Procedural History: The patent-in-suit, originally issued in 2009, has undergone two subsequent ex parte reexaminations, culminating in a second reexamination certificate in 2022. These proceedings resulted in the cancellation of several original claims, including all original independent claims, and the amendment of the remaining claims. The enforceable scope of the patent is therefore narrower than its originally issued form.

Case Timeline

Date	Event
2004-01-16	'902 Patent Priority Date
2004-07-01	'902 Patent assigned to Plaintiff Nisus Corporation
2009-10-06	U.S. Patent No. 7,597,902 Issues
2010-03-19	Complaint Filed
2020-12-23	First Reexamination Certificate ('902 C1) Issues
2022-04-21	Second Reexamination Certificate ('902 C2) Issues

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

U.S. Patent No. 7,597,902, Termite Tubing Preventative For Non-Wood Materials, issued October 6, 2009

The Invention Explained

• Problem Addressed: The patent's background explains that while borate treatments can protect wood from termites, they do not solve the problem of termites building shelter tubes over non-wood or non-cellulosic construction materials, such as concrete foundations, to reach vulnerable cellulose materials inside a building ('902 Patent, col. 2:1-8). Previous approaches, like soil poisoning, raised environmental concerns, and incorporating borates directly into cementitious products could compromise their structural integrity ('902 Patent, col. 1:36-44, col. 2:13-17).
• The Patented Solution: The invention proposes applying a borate-containing composition directly onto the surface of non-wood building components. This creates a chemical barrier that deters or kills termites, thereby preventing them from building their protective tubes across the treated surface to other parts of a structure ('902 Patent, Abstract; col. 2:24-39). The detailed description specifies a formulation containing disodium octaborate tetrahydrate (DOT) and a glycol carrier, which is applied to materials like concrete, brick, or steel ('902 Patent, col. 3:24-34, col. 4:20-27).
• Technical Importance: The described method offered a targeted, environmentally safer alternative to widespread soil poisoning for preventing termite intrusion via non-wood pathways ('902 Patent, col. 2:18-21).

Key Claims at a Glance

The complaint alleges infringement of "at least one of the claims" of the '902 Patent without specifying which ones (Compl. ¶19). Subsequent to the complaint's filing, all original independent claims (1, 15, 29) were cancelled during reexamination. The first amended independent claim is Claim 8.

• Independent Claim 8 (as amended by '902 C2 Certificate):
  • A method for reducing termite damage, comprising the steps of:
  • mixing disodium octaborate tetrahydrate, water, and a specified glycol to form a borate solution of a specific concentration;
  • obtaining a cementitious building component susceptible to termite shelter tubes;
  • "coating" the exposed surface of the component with a "penetration minimizing agent" and the borate solution; and
  • incorporating the coated component into a structure.
  • The method requires that the resulting surface concentration of borates creates a barrier that substantially reduces termite tube formation and that the coating "does not penetrate throughout the interior" of the component.

III. The Accused Instrumentality

Product Identification

The accused instrumentality is Defendant's termiticide borate product known as "BOR-RAM" (Compl. ¶2).

Functionality and Market Context

• The complaint alleges that BOR-RAM is a "termiticide borate product" sold to pest control contractors for use in and around residential and commercial properties (Compl. ¶¶2, 9).
• It is alleged to compete directly with Plaintiff's own BORA-CARE® brand product (Compl. ¶4).
• The complaint does not provide sufficient detail for analysis of the BOR-RAM product's specific chemical composition, its formulation, or the precise instructions for its application.

IV. Analysis of Infringement Allegations

The complaint does not contain an element-by-element claim chart. It makes general allegations that Sostram's acts of "making, selling, offering to sell...products and/or methods covered by at least one of the claims of the '902 Patent" constitute infringement (Compl. ¶19). The core theory appears to be that the intended use of the BOR-RAM product by Sostram's customers (pest control contractors) constitutes practice of a method claimed by the '902 Patent (Compl. ¶20).

No probative visual evidence provided in complaint.

Identified Points of Contention

• Scope Questions: A central question will be whether the use of the BOR-RAM product meets the limitations added to the claims during reexamination. For instance, does the application of BOR-RAM, as instructed by Sostram, involve "coating" a surface with a "penetration minimizing agent" as required by amended claim 8? The complaint is silent on this point.
• Technical Questions: What evidence demonstrates that the application of BOR-RAM results in a coating that "does not penetrate throughout the interior of the cementitious building component"? This limitation, also added during reexamination, presents a specific factual hurdle for the plaintiff. The infringement analysis will depend on the physical properties of the BOR-RAM formulation when applied to materials like concrete.

V. Key Claim Terms for Construction

• The Term: "penetration minimizing agent"

• Context and Importance: This term was added to independent claim 8 during reexamination to distinguish the invention from the prior art and is therefore critical to the claim's scope. Practitioners may focus on this term because infringement will depend entirely on whether the accused method includes the use of such an agent.

• Intrinsic Evidence for Interpretation:

  • Evidence for a Broader Interpretation: A party might argue that the phrase "coating...with a penetration minimizing agent and the borate solution" ('902 C2, Claim 8) could encompass a single, pre-mixed formulation containing both components.
  • Evidence for a Narrower Interpretation: The patent specification describes applying a "penetration minimizing solution...before the borate solution is applied" and provides examples like "wax emulsions, polymer forming agents...or other sealants such as coating systems or paints" ('902 Patent, col. 5:42-52). This language suggests a distinct component or a separate application step, potentially supporting a narrower construction that requires two separate materials or actions.

• The Term: "cementitious building component"

• Context and Importance: The amended claims are directed specifically to methods involving "cementitious" components. The definition of this term will define the field of use for the patented method.

• Intrinsic Evidence for Interpretation:

  • Evidence for a Broader Interpretation: The specification provides a list of "cementitious materials" that "can include brick, block, stone, concrete, stucco, gypsum" ('902 Patent, col. 3:25-27). This list supports a broad definition covering a wide range of common construction materials, not just structural concrete.
  • Evidence for a Narrower Interpretation: A party could argue that in the context of foundations and termite barriers, the term should be limited to structural or load-bearing components. However, the explicit inclusion of non-structural materials like "stucco" and "gypsum" in the specification may counter this argument.

VI. Other Allegations

• Indirect Infringement: The complaint alleges active inducement of infringement under 35 U.S.C. § 271(b) (Compl. ¶20). The factual basis alleged is that Sostram actively induces its customers to use the BOR-RAM product in a manner that infringes the '902 Patent's method claims (Compl. ¶20).
• Willful Infringement: Plaintiff alleges that Defendant's infringement is willful, based on the assertion that Sostram acted with "knowledge of, or reason to know, that they constitute and/or actively induce infringement" (Compl. ¶21). The complaint does not plead specific facts, such as pre-suit notice, to support this allegation.

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

• A core issue will be one of post-reexamination scope: can the Plaintiff demonstrate that the accused method of using the BOR-RAM product meets all limitations of the patent’s claims as amended and narrowed during two reexaminations, particularly the newly-added requirement of using a "penetration minimizing agent"?
• The case will likely depend on a question of evidentiary proof: what is the precise chemical composition of the BOR-RAM product and what are the specific use instructions provided by Sostram to its customers? The factual record developed in discovery concerning these details will be dispositive.
• A third central question will be one of indirect liability: as the asserted claims are method claims, the analysis will focus on whether Sostram, by selling BOR-RAM with specific instructions or marketing, knowingly and intentionally encouraged its customers to perform the patented method, thereby satisfying the requirements for active inducement.