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Optigen, LLC v. International Genetics

April 16, 2010

OPTIGEN, LLC, PLAINTIFF,
v.
INTERNATIONAL GENETICS, INC, ET AL., DEFENDANTS.
OPTIGEN, LLC, PLAINTIFF,
v.
TEXAS A&M UNIVERSITY SYSTEM, ET AL., DEFENDANTS.



The opinion of the court was delivered by: Andrew T. Baxter, U.S. Magistrate Judge

DECISION AND ORDER

Presently before this court is plaintiff's amended cross-motion (Dkt. No. 130), pursuant to FED. R. CIV. P. 56(f), to deny or continue the motion of Defendant International Genetics, Inc. ("InGen") for summary judgment (Dkt. No. 116) until the plaintiff can conduct further discovery.*fn1 For the reasons stated below, this court grants the cross-motion, in that it orders a continuance with respect to InGen's summary judgment motion until July 2, 2010 so that plaintiff can conduct further relevant discovery, and gives plaintiff leave to file a supplemental response in opposition to InGen's motion by August 2, 2010.

I. Relevant Facts and Procedural History

Plaintiff OptiGen, LLC ("Optigen") is a company based in Ithaca, New York in the business of providing DNA-based diagnostic services to test for inherited diseases in dogs. OptiGen is the exclusive licensee of several U.S. patents relating to genetic tests for inherited canine diseases, and has filed two actions, now consolidated (09-CV-6 Dkt. No. 38), alleging, inter alia, infringement of those patents. (Complaint, 09-CV-06, Dkt. No. 1 ("06 Compl."); Complaint, 09-CV-457, Dkt. No. 1 ("457 Compl.")).

Defendant PinPoint DNA Technologies, Inc. ("PinPoint"), was founded in 2006 by Defendant Richard Dobbins ("Dobbins") and is based in Georgia. (06 Compl. ¶¶ 5, 12). PinPoint offered a service called "Pawsitive I.D." for the DNA testing in dogs and cats. (Id. ¶ 13). In January 2008, OptiGen notified PinPoint and Dobbins that their activity in selling, offering to sell, making, and using one particular genetic test by means of the Pawsitive I.D. testing kit constituted infringement of two of OptiGen's patents. (Id. ¶ 14). By April 15, 2008, PinPoint no longer actively promoted that genetic test on its website. (Id. ¶ 15).

In approximately July 2008, Dobbins set up InGen under the law of The Bahamas to perform genetic testing for pets in that country. InGen purchased assets from PinPoint, including the Pawsitive I.D. product and trademark, database, and website domain names. (06 Compl. ¶ 16). InGen now offers the Pawsitive I.D. and other genetic testing service for purchase through its Bahamian website, including to customers in the United States. (Id. ¶ 23).

On February 12, 2010, plaintiff requested a conference with this court to resolve certain discovery disputes with InGen and related defendants. (09-CV-06 Dkt. No. 112). The court scheduled a conference for March 23rd. In the interim, InGen filed a motion for summary judgment, seeking dismissal of all the claims against it in both actions. (09-CV-06 Dkt. No. 116). During the discovery conference, this court addressed various discovery issues, taking into account the pendency of the InGen summary judgment motion, which, even if granted, would not affect numerous causes of actions against PinPoint, Dobbins, and other defendants in both cases. On March 24, 2010, this court entered an order resolving the discovery issues and, with the consent of the parties involved, extending the deadline for the completion of ongoing discovery until July 2, 2010. (Dkt. No. 121).*fn2 On March 29, 2010, plaintiff filed its opposition to InGen's summary judgment motion and the cross motion under Rule 56(f), which it amended the following day. (09-CV-06 Dkt. Nos. 124-130). On April 5th, InGen filed a response to plaintiff's cross motion. (Dkt. No. 137).*fn3

InGen's summary judgment motion relies heavily on a recent en banc decision of the Federal Circuit which held that the infringement provisions of Section 271(f) of the Patent Act do not apply to a "method" patent. Cardiac Pacemakers, Inc. v. St. Jude's Medical, Inc., 576 F.3d 1348, 1365-66 (Fed. Cir. 2009), cert. denied, U.S., 130 S.Ct. 1088 (2010) (interpreting 35 U.S.C. § 271(f)). The patents in dispute in the cases before this court are "method" or "process" patents, in that they protect, not a product or device, but a series of steps of a method or process. (InGen's Memo. of Law, Dkt. No. 116-1, at 3-4).*fn4 Section 271(f) expands the reach of the Patent Act to impose infringement liability on one who "supplies or causes to be supplied in or from the United States all or a substantial portion of the components of a patented invention... in such manner as to actively induce combination of such components outside of the United States in a manner that would infringe the patents if such combination occurred within the United States." 35 U.S.C. § 271(f).

InGen construes the Cardiac Pacemaker case as holding that, to infringe a U.S. method patent, all of the steps of the method must be performed within the United States. It argues that, because InGen does not conduct any genetic testing in the United States, it cannot infringe the OptiGen patents, even assuming that InGen performs the patented method in the Bahamas (which InGen concedes, only for the purposes of its motion). (InGen's Memo. of Law at 2 n.1, 4-5). InGen further argues that, if it cannot infringe OptiGen's patents from the Bahamas, it also cannot be liable on OptiGen's claims based on the Lanham Act or its common law claim for misappropriation of intellectual property. (Id. at 6-8).

In opposing InGen's summary judgment motion, OptiGen argues:

Contrary to InGen's assertions, [the Cardiac Pacemakers] case is not dispositive of OptiGen's patent claims. First, the Federal Circuit's decision in Cardiac Pacemakers is limited in scope, as it addresses infringement under only one section of the Patent Act--Section 217(f). Cardiac Pacemakers does not address, among other things, whether an accused infringer who, like InGen, sells or offers to sell within the United States the performance of every step of a patented method infringes under 35 U.S.C. § 271(a). Second, Cardiac Pacemakers impacts OptiGen's Section 271(f) claims only to the extent that InGen is performing the patented method in the Bahamas. OptiGen has reason to believe that InGen conducted, and continues to conduct, testing in the United States and it is entitled to full discovery into that subject before this motion is ruled upon.

(OptiGen Memo. in Opposition to InGen's Motion for Summary Judgment, Dkt. No. 124-1, at 6). OptiGen further argues that its various other claims against InGen--for inducing infringement by others, violations of the Lanham Act, and unfair competition--would survive even if its patent infringement claims did not. (Id. at 14-19).

In its reply in support of its summary judgment motion, InGen responds to OptiGen's argument that it's infringement action is based, in part, on InGen's sale or offer of sale of a patented method within the United States. Critically, for the purposes of this court's decision on OptiGen's Rule 56(f) cross-motion, InGen relies heavily on factual statements about the manner in which it sells its genetic testing services from the Bahamas in an attempt to establish that it does not sell or offer to sell the patented method in the U.S. (Reply in Support of InGen's Summary Judgment Motion, Dkt. No. 137, at 2).*fn5 Further, InGen distinguishes cases cited by OptiGen with respect to the sale/offer of sale theory of infringement, in part, by arguing that InGen's sales methods differ factually from those of the parties in other cases who were found to be making infringing offers and sales in the U.S. (Id. at 3-6).*fn6 In opposing OptiGen's cross-motion under Rule ...


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