[Breaking News] Preemptive Shot

In a preemptive shot across the bow of two of its rivals, BASF has filed separate patent-infringement lawsuits against Cheminova A/S and Makhteshim Agan of North America, and with its U.S. subsidiary Control Solutions.

According to the complaint — which was filed in U.S. District Court in North Carolina on April 8 — allowing the sale of fipronil by the two companies would "inflict irreparable and irreversible harm" and cause BASF "to suffer lost market share, price erosion and damage to the goodwill and reputation" of the company. The court documents also state, "These losses are to recapture and impossible to quantify and may affect sales and relationships relating to non-fipronil based products."

Nevin McDougall, BASF Group Vice President, North America Crop Protection, said the company’s recent actions were prompted by "some pretty clear evidence over the last six to 10 months of the intention for both parties to infringe on our patents through a number of means," including customer contacts and regulatory filings. As a result, he said, "we’ve had to take this to the next level."

"BASF, a leading provider of pest control products and the technology to develop and apply them, is committed to vigorously protecting its intellectual property and innovation investments," added Markus Heldt, president of BASF’s Crop Protection Division. "After efforts to secure assurances from both Makhteshim and Cheminova that they will not infringe the fipronil patents filed, BASF decided to enforce its rights by filing these lawsuits."

FOCUS ON FIPRONIL. As part of the action, BASF is seeking injunctions against the two companies, which would immediately prevent the sale and application of fipronil-based products that infringe on BASF’s patented technologies. While no court date has been set, McDougall said the company is optimistic BASF will receive a "favorable ruling" upon presenting its case. Bayer CropScience, which exclusively licenses two of the patents to BASF, also is named as an additional plaintiff in the suits.

At the center of the litigation are several fipronil-related patents, one of which is set to expire in August, which covers the actual chemical. In a recent interview with PCT magazine, McDougall said it is "public knowledge" that the "compound patent" for fipronil expires in August, but BASF has "a large family of additional patents for the fipronil molecule related to manufacturing processes (and) use applications that provide a much broader spectrum of patent coverage for the fipronil molecule and ultimately the Termidor brand." The two manufacturing process patents expire in 2023 and 2025, respectively, while the method-of-use patents expire in 2017, according to court documents.

Termidor, BASF’s flagship termiticide, generates more than $75 million in annual revenues, representing about 35 percent of the U.S. termite control market. More than 4 million structures have been treated with the non-repellent termiticide since it was introduced to the industry 10 years ago.

As a result, there’s a lot at stake in any litigation relating to the future of fipronil. "This will be a battle," observed one longtime industry observer. "I think the most interesting part of this to watch is whether the case is strong enough that a judge would file an immediate injunction."

Cheminova President and CEO Martin Petersen said the Denmark-based company is "very respectful" of patents. "We know the patent landscape for this molecule and … we are very confident we are not in infringement, nor in imminent infringement, of any applicable patents."

Mark Boyd, president of Control Solutions Inc. (CSI), called the lawsuit frivolous. "CSI cannot possibly have violated anything since we have never sold any fipronil," he said. "We are quite curious why BASF sees CSI as such a big threat. Molecules come off patent every year and companies like BASF file frivolous lawsuits to harass (the) competition."

Although the company’s next steps are yet to be determined, Boyd said, "Makhteshim/CSI would not move forward unless we were very confident of our legal position. This is not our first ‘rodeo.’"

Like Cheminova and Makhteshim, BASF is optimistic about the outcome of any future litigation. "We’re fully confident that those patents will be upheld," McDougall said. "Otherwise we would not take this sort of action."

The author is publisher of PCT magazine.
 

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About the Firms

BASF Corporation

Headquarters: Ludwigshafen, Germany

Year founded: 1865

About BASF: BASF originally stood for Badische Anilin & Soda-Fabrik (Baden Aniline and Soda Factory). The BASF Group comprises subsidiaries and joint ventures in more than 80 countries and operates six integrated production sites and close to 380 other production sites in Europe, Asia, Australia, the Americas and Africa. BASF has customers in more than 200 countries and supplies products to a wide variety of industries. In 2009, BASF had 105,000 employees. BASF’s Professional Pest Control headquarters is in Research Triangle Park, N.C. The division was formed in 2001 to focus initially on Phantom and Subterfuge. In 2003, BASF acquired fipronil — the active ingredient in Termidor — from Bayer CropScience AG. In December 2008, BASF acquired Sorex Holdings Ltd., which included Whitmire Micro-Gen and U.K.-based Sorex.

Web site: www.basf.com

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Cheminova

Headquarters: Lemvig, Denmark

Year founded: 1938

About Cheminova: Cheminova was founded by chemical engineer Gunnar Andreasen in Copenhagen. In 1953, Cheminova was relocated to Lemvig in the western part of Denmark. During the following decades, the company focused on the area of organophosphorous insecticides and intermediates. The product portfolio has since been expanded to include pyrethroid insecticides, herbicides and fungicides, including products such as glyphosate and flutriafol. Further, sales subsidiaries have been established in key markets and the product portfolio is today marketed under its own registrations and trademarks in most markets. Cheminova markets its products globally through subsidiaries in 20 key countries and through distribution partners in most other countries. Cheminova employs 800 people in Denmark and 1,100 abroad.

Web site: www.cheminova.com

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Makhteshim Agan Group

Headquarters: Airport City, Israel

Year founded: 1945 (Agan Chemical Manufacturers) and 1952 (Makhteshim Chemical Works)

About Makhteshim Agan Group: Makhteshim Agan Group is a manufacturer and distributor of branded off-patent crop and non-crop protection products. Makhteshim Agan Group sells its crop protection products in more than 100 countries. The firm’s product portfolio includes a full line of herbicides, insecticides and fungicides for virtually every conventional crop and non-crop category, the company reports. Makhteshim Agan Group ranks seventh overall in the global crop protection market, for both proprietary and branded off-patent products, with a global market share of more than 5 percent. In the off-patent segment, the group ranks No. 1 in the world, the firm reports. Today, about 40 percet of the company's shares are held by Koor Industries and the remainder is traded publicly on the TASE.

Control Solutions (www.controlsolutionsinc.com) is a member of Makhteshim Agan Industries (MAI) group. In 1958, the Boyd family purchased a small Pasadena, Texas, pest control company. Ford’s Pest Control grew to become Ford’s Chemical and Service in 1976. In 1985, Control Solutions Inc. (CSI) was created to distribute Ford’s products to the professional and consumer markets. Ford’s success and an interest in formulating PCO, animal health and consumer products drew the attention of Roussel, which acquired Ford’s in 1989. Since that time, CSI has added product lines for the industrial, lawn and garden, animal health and biocide markets, and works with 80+ distributors serving those markets.

Web site: www.ma-industries.com