Trial Date Approaches for Fipronil Patent Infringement Lawsuit

Nearly 18 months after BASF filed two separate patent infringement lawsuits in U.S. Federal District Court against Cheminova A/S and Makhteshim Agan of North America, a trial date finally appears to be on the horizon, perhaps providing PMPs, distributors and chemical suppliers serving the pest management industry with much-needed clarity on likely market conditions in 2012.

Up to this point the Makhteshim case has garnered the most headlines, thanks in part to Judge William L. Osteen’s decision last April to issue a Temporary Restraining Order preventing Makhteshim from selling any fipronil-related product that may infringe on BASF’s perimeter use patents (‘010 and ‘743), before reversing course in May and denying BASF’s bid for a preliminary injunction blocking the introduction of the company’s fipronil-based termiticide.

That ruling (see June PCT, pgs. 146-150) prompted Control Solutions, Makhteshim’s U.S. subsidiary, to introduce Taurus SC Termiticide/Insecticide, a 9.1% formulation of fipronil. In announcing the product launch in June, Dr. Yoav Zeif, director of global products and marketing for the Makhteshim Agan Group (MAI), said, “We are pleased to have achieved such a successful outcome which required us to overcome many complex patent, engineering and business challenges. Our success is a clear demonstration of our ability to seize significant opportunities in the agrochemicals space leveraging the differentiating qualities of MAI’s people.”

Shortly after the product was introduced, however, Jan Buberl, head of BASF’s Specialty Products Division, said, “I would caution all PMPs who have a desperate need to take on this product to always keep in mind that the intellectual property discussion is not yet finished and is in full litigation, and that a potential outcome that would confirm the validity of the intellectual property and the encroachment of the intellectual property, may have risks for not only distributors, but also for PMPs.”

Buberl added that BASF is continuing to invest in the Termidor brand and he doesn’t anticipate the company’s market position to be impacted significantly by the introduction of the first post-patent fipronil product in the U.S. pest management industry. “We can clearly see that a lot of our customers have full trust in the BASF and Termidor brand,” he said, adding that the company remains “very committed” to product stewardship, “not only with the existing (Termidor) products we have, but also with the new innovations we’re going to launch into the marketplace over the next couple of years.”  

While a trial date has not yet been set for the Makhteshim case, like this summer’s temperatures, the Cheminova litigation heated up following a second Markman hearing held in June to determine the meaning and scope of various patent claim terms not addressed in the initial hearing, specifically terms relating to the fipronil manufacturing process patent (‘943).

In its memorandum opinion and order, which was issued in early August, Judge Osteen of the U.S. District Court in the Middle District of North Carolina ruled that the meaning and scope of the patent claim terms presented by the parties for construction were determined as follows:

• The term “in the presence of” is construed as “in the same place as, in the vicinity of, or in the area immediately near.”
• The term “compound” is construed as “a substance whose molecules consist of atoms of different elements; the elements cannot be separated by physical means.”
• The term “corrosion inhibiting compound” is construed as “a compound that slows, interferes with, or prevents the action, process, or effect of eating away or diminishing, that results from an acid or alkali reaction or a chemical alteration.”

Buberl said the court’s interpretation of the patent claim terms was a “very positive development” for the company, setting the stage for a jury trial later this year or in early 2012. “With the decision of the 9th of August, what is very clear is that (the) intellectual property which was under discussion in the Cheminova case has been clarified in the Markman hearing in a way that really is in line with … the BASF view. So, from our side, it’s a very positive development confirming our position around the intellectual property we have.”

As Cheminova’s attorneys prepare for trial, Brad Chalk, business manager, non-crop products, said the company remains optimistic it ultimately will prevail. “Our chemical engineering people are highly confident in their position,” he said, and while it’s clear “these really specific remaining issues may not be thrown out by the judge without a trial,” that doesn’t mean the company is chastened by the court’s recent action.

In fact, Chalk compared the proceedings to a prize fight, with two worthy opponents punching and counter-punching one another in a series of three-minute rounds, with the ultimate victor winning the most rounds. “It sounds to me that one way or the other, the landscape should become clearer by late fall,” he said.

According to Buberl, while various rulings have been “more or less favorable” depending on what’s happening in the case at any given time, he’s “convinced” that in the end BASF “will have a very positive outcome in all these decisions.”

In mid-September, following a motion hearing, the Court held a status conference for the purpose of establishing a schedule for resolution of remaining pending motions, summary judgments and pretrial disclosures in the Cheminova case. Based on the transcript of that hearing, it’s apparent the parties, along with the judge, are eager to get the case moving.

Attorney Joshua C. Krumholz of Holland & Knight LLP, representing the Defendants, said, “…as the Court knows, we (Cheminova) have been the one pushing for trial…and the reason we’ve been pushing to get the trial date…is because the Plaintiffs are sitting here with the ultimate remedy already. It’s not a damage case. We haven’t sold anything from the marketplace. There’s no dollars to get. What they want is injunctive relief keeping us out of the market. They have that. They have that today. They have it tomorrow. They have it up until the time the jury gets to decide this case. So we have been pushing for the trial, and they have – I don’t want to say they’re dragging their feet, but they don’t have an incentive to get it to trial.”

Attorney Catherine Nyarady of Paul Weiss Rifkind Wharton & Garrison, representing the Plaintiffs, countered that if BASF loses at trial, the company can be held liable for damages that Cheminova incurs by staying off the market. “So it is in our interest, and we have been incentivized from the beginning to get to trial,” she said. “It simply is not true that we have nothing to lose here … and there’s no harm to us. We don’t know that until the trial is over.”

Despite the concerns of both parties, Judge Osteen said the court is “plowing along as best we can,” pointing out there’s much to be done in the days ahead if the case is to go to trial in November. The court must address the summary judgment on the application patent, cross-motions for summary judgment on the manufacturing patent and motions to strike portions of the expert reports. He said, “…there’s no way I’m going to tell you we’re going to get all these motions done before the 11th (of October)… So I think we’re talking about four weeks after the 11th for a trial setting. So I think mid November, realistically … is about the best we can hope for…”

Complicating matters further is Judge Osteen’s full docket for the remainder of the year, as well as an upcoming staffing change at the Court, which could push the trial into mid-January, further delaying the final chapter of this widely-watched case, the ending of which remains in question.

The author is publisher of PCT magazine.