Verde Environmental Tech Inc v. C2R Global Mfg Inc

I. Executive Summary and Procedural Information

• Parties & Counsel:
  • Plaintiff: Verde Environmental Technologies, Inc. d/b/a Verde Technologies (Delaware)
  • Defendant: C2R Global Manufacturing, Inc. (Wisconsin)
  • Plaintiff’s Counsel: Winthrop & Weinstine, P.A.
• Case Identification: 2:18-cv-00423, E.D. Wis., 03/16/2018
• Venue Allegations: Venue is alleged to be proper as Defendant C2R resides in, maintains a regular and established place of business in, and committed acts giving rise to the lawsuit within the Eastern District of Wisconsin.
• Core Dispute: Plaintiff alleges that Defendant’s line of drug disposal products, which use activated carbon to neutralize pharmaceuticals, infringes patents related to systems for deactivating abusable and unused medications.
• Technical Context: The technology addresses the public health and environmental problems of safely disposing of unused or residual medications, particularly abusable substances like opioids, to prevent misuse or environmental contamination.
• Key Procedural History: The complaint details pre-suit correspondence beginning on October 17, 2016, when Plaintiff provided Defendant with formal notice of the ’711 Patent and its belief that Defendant's products were infringing. The parties exchanged letters in which Defendant denied infringement and asserted invalidity without providing specific claim language analysis or prior art references.

Case Timeline

Date	Event
2004-01-23	Priority Date for ’837 Patent and ’711 Patent
2013-07-02	U.S. Patent No. 8,475,837 Issued
2013-09-17	U.S. Patent No. 8,535,711 Issued
2016-10-17	Plaintiff provides Defendant with notice of '711 Patent
2018-03-16	Complaint Filed

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

U.S. Patent No. 8,475,837 - Abuse Potential Reduction in Abusable Substance Dosage Form, issued July 2, 2013 (’837 Patent)

The Invention Explained

• Problem Addressed: The patent identifies the significant potential for abuse created by the large residual amounts of potent drugs, such as fentanyl, that remain in transdermal patches even after a full course of therapeutic use (’837 Patent, col. 1:40-55).
• The Patented Solution: The invention proposes a disposal system where a used transdermal patch is placed into a container that includes an "anti-abuse substance," specifically activated carbon, which adsorbs and immobilizes the residual drug, thereby preventing its extraction and subsequent abuse (’837 Patent, Abstract; col. 2:21-34). The system is designed to ensure contact between the drug-containing portion of the patch and the activated carbon upon disposal, as illustrated in the embodiment of Figure 1.
• Technical Importance: The invention provided a method for safely deactivating potent residual drugs at the point of disposal using a common, non-hazardous material, addressing a specific vulnerability in the life cycle of transdermal opioid patches (’837 Patent, col. 2:13-18).

Key Claims at a Glance

• The complaint asserts independent claim 1 and dependent claims 8 and 9 (Compl. ¶45).
• Independent Claim 1 requires:
  • An independent disposable container with an opening to receive a used skin-worn patch.
  • A layer inside the container containing activated carbon as an adsorption material to prevent solvent extraction of the abusable substance.
  • The layer is disposed such that inserting the patch causes the abusable substance to contact the layer.
  • A closure means for closing the container.

U.S. Patent No. 8,535,711 - Medication Disposal System, issued September 17, 2013 (’711 Patent)

The Invention Explained

• Problem Addressed: Broadening the scope beyond patches, the patent addresses the environmental contamination and abuse potential arising from the improper disposal of many forms of unused or expired medications, including pills and liquids (’711 Patent, col. 1:26-34, 1:46-54).
• The Patented Solution: The invention describes a universal medication disposal system comprising a disposable, sealable container holding an "active binding agent," such as activated carbon, that immobilizes medication on contact (’711 Patent, Abstract; col. 3:8-15). To enhance effectiveness, particularly for solid medications, the system may also include media to dissolve the medication and substances to suspend the activated carbon in a slurry, ensuring thorough contact and deactivation (’711 Patent, col. 4:1-5).
• Technical Importance: This technology offers a comprehensive, self-contained solution for the disposal of a wide array of pharmaceutical forms, addressing both environmental and abuse risks in a single, easy-to-use product (’711 Patent, col. 2:66-3:4).

Key Claims at a Glance

• The complaint asserts independent claim 1 and dependent claims 2, 6, 7, 11, and 12 (Compl. ¶50).
• Independent Claim 1 requires:
  • A disposable, sealable container that can be opened to receive unused medication.
  • An active binding agent, which includes activated carbon, inside the container for treating the medication on contact to prevent its later extraction.
  • A closure for sealing the container to capture the treated medication.

III. The Accused Instrumentality

• Product Identification: The RX Destroyer™ All-Purpose Products, RX Destroyer™ Liquids Products, Drug Buster™ Products, and Narc Gone™ products (Compl. ¶¶13-28).
• Functionality and Market Context: The accused products are drug disposal systems sold in various sizes, from small bottles to large drums (Compl. ¶¶14, 21, 25). They are alleged to contain a liquid solution and activated charcoal/carbon (Compl. ¶¶13, 24). According to the complaint, a user places medication—including pills, liquids, and transdermal patches—into the product's container and shakes it, causing the activated carbon to adsorb and neutralize the active ingredients, rendering them "irretrievable" or "unrecoverable" (Compl. ¶¶13, 16, 19). The complaint provides a printout from the defendant's website showing the accused RX Destroyer™ product container and instructions for use (Compl. ¶16, Ex. C). The products are marketed for use by the general public, medical facilities, and law enforcement (Compl. ¶24).

IV. Analysis of Infringement Allegations

’837 Patent Infringement Allegations

Claim Element (from Independent Claim 1)	Alleged Infringing Functionality	Complaint Citation	Patent Citation
(a) an independent disposable container having an opening therein to receive a skin-worn patch device containing a residual amount of an abusable substance therein;	The accused products are disposable containers (bottles, drums) with an opening designed to receive various medications, including skin-worn patches (Compl. ¶16).	¶46	col. 6:2-5
(b) a layer containing an amount of an anti-abuse substance comprising an adsorption material which is activated carbon that prevents solvent extraction of said abusable substance, said layer being disposed in said container in a manner such that a skin-worn patch device properly inserted into said container will cause said abusable substance to contact said layer containing said anti-abuse substance; and	The accused products contain activated carbon which is alleged to be an anti-abuse substance that adsorbs drugs (Compl. ¶13). Inserting a patch into the container causes it to contact the carbon (Compl. ¶16).	¶46	col. 6:6-14
(c) a closure means for closing said container containing a used skin-worn patch device.	The accused products include a cap which serves as a closure for the container (Compl. ¶16).	¶46	col. 6:15-17

• Identified Points of Contention:
  • Scope Questions: A primary question may be whether the term "layer" as used in the ’837 Patent reads on the accused products. The patent’s embodiment depicts a distinct layer of material affixed to the container wall (’837 Patent, Fig. 1), whereas the complaint describes the accused products as containing activated carbon within a "liquid solution" (Compl. ¶13), which may suggest a loose slurry rather than a fixed layer.
  • Technical Questions: The ’837 Patent is specifically directed to the disposal of "skin-worn patch devices." The infringement analysis may need to consider how the general-purpose nature of the accused products, marketed for pills, liquids, and patches (Compl. ¶16), aligns with the patent's more focused disclosure.

’711 Patent Infringement Allegations

Claim Element (from Independent Claim 1)	Alleged Infringing Functionality	Complaint Citation	Patent Citation
(a) a disposable, sealable container that can be opened to receive an amount of unused medication substance therein;	The accused products are disposable containers with an opening that allows users to add unused medications (Compl. ¶16).	¶50	col. 8:21-23
(b) an amount of an active binding agent in said container for treating said medication on contact, said binding agent includes an amount of activated carbon that prevents later independent extraction of said medication, such that insertion of said medication into said container will cause said medication to contact said binding agent; and	The accused products contain activated carbon, alleged to be an active binding agent that treats medication on contact to prevent its extraction by adsorbing the active ingredients (Compl. ¶¶13, 19, 24).	¶50	col. 8:24-30
(c) said container including a closure for sealing said container to thereby capture a treated medication.	The accused products are sold with caps that function as closures to seal the container after use (Compl. ¶16).	¶50	col. 8:31-33

• Identified Points of Contention:
  • Technical Questions: The complaint alleges infringement of dependent claim 12, which requires "media to dissolve said unused medications that are in solid form" (’711 Patent, col. 8:57-59). An evidentiary question is whether the "liquid solution" in the accused products (Compl. ¶13) is merely a carrier for the carbon or if it functions as a dissolving agent as required by the claim.
  • Scope Questions: The interpretation of "active binding agent" will be significant. The complaint alleges infringement on the basis that the accused products meet this limitation (Compl. ¶50), yet simultaneously alleges in its false advertising counts that the products are largely ineffective, stating that "less than 40% of [drugs] are deactivated after 10 days" (Compl. ¶39). This raises the question of whether a substance with such alleged performance can meet the claim requirement of being an "active" agent that treats medication "on contact."

V. Key Claim Terms for Construction

• Term: "a layer" (’837 Patent, Claim 1)

  • Context and Importance: The construction of this term is critical because the physical form of the activated carbon in the accused products (a slurry) appears different from the solid layer depicted in the patent’s primary embodiment. Practitioners may focus on this term as a potential basis for a non-infringement defense.
  • Evidence for a Broader Interpretation: The claim does not specify that the layer must be solid or fixed. An argument could be made that any distinct stratum of the anti-abuse substance, including a settled or suspended quantity in a liquid that performs the claimed function of contacting the patch, constitutes a "layer."
  • Evidence for a Narrower Interpretation: The specification explicitly describes and depicts "a layer of absorbent material 18 attached to one side of the container 16" (’837 Patent, col. 4:18-19, Fig. 1). This specific embodiment could be used to argue that "layer" is limited to a pre-applied, solid, or semi-solid coating.

• Term: "active binding agent" (’711 Patent, Claim 1)

  • Context and Importance: The definition of this term is central to the infringement analysis, particularly due to the complaint's own allegations regarding the accused products' ineffectiveness. Practitioners may focus on this term because the plaintiff's factual assertions in its false advertising count appear to contradict its infringement allegations.
  • Evidence for a Broader Interpretation: The specification provides a functional definition: a substance that begins to "immobilize or otherwise deactivate a medication immediately on contact" (’711 Patent, col. 3:20-22). This does not specify a rate or require complete deactivation, potentially allowing for a process that begins on contact but takes time to complete.
  • Evidence for a Narrower Interpretation: The patent states the agent "treats" the medication on contact to "immobilize and deactivate" it, which implies a certain level of effectiveness (’711 Patent, col. 3:12-15). Defendant may argue that a product which allegedly deactivates less than 40% of a drug in 10 days (Compl. ¶39) is not "active" in the manner contemplated and enabled by the patent.

VI. Other Allegations

• Indirect Infringement: For both patents, the complaint alleges induced infringement. The factual basis is Defendant’s sale of the products along with instructions on their websites and packaging that direct users to perform the claimed methods (e.g., add drugs to the container and shake), with the knowledge that this use constitutes infringement (Compl. ¶¶47, 51).
• Willful Infringement: Willfulness is alleged for the ’711 Patent, based on alleged pre-suit knowledge (Compl. ¶52). The complaint states that Plaintiff provided Defendant with a formal notice letter identifying the ’711 Patent and the accused products on October 17, 2016, more than a year before the complaint was filed (Compl. ¶29).

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

• A core issue will be one of definitional scope: can the term "layer," rooted in an embodiment showing a fixed coating inside a container in the ’837 patent, be construed to read on the slurry of activated carbon and liquid used in the accused products?
• A central conflict in the case will be the reconciliation of contradictory pleadings: how will the court address the tension between the plaintiff's infringement claim that the accused products contain an "active binding agent" that functions as patented, and its separate false advertising claim that the same products are substantially ineffective at deactivating drugs?
• A key evidentiary question will be one of technical function: does the liquid in the accused products perform the function of a "media to dissolve" solid medications as required by an asserted dependent claim of the ’711 patent, or does it merely act as a suspension medium for the activated carbon?