Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Optigen, LLC v. International Genetics

March 8, 2011

OPTIGEN, LLC, PLAINTIFF,
v.
INTERNATIONAL GENETICS, INC., GENETIC FULFILLMENT USA, LLC, PINPOINT DNA TECH., INC., AND RICHARD B. DOBBINS, DEFENDANTS,
INTERNATIONAL GENETICS, INC., GENETIC FULFILLMENT USA, LLC, PINPOINT DNA TECH., INC., AND RICHARD B. DOBBINS, COUNTER-CLAIMANTS,
v.
OPTIGEN, LLC, COUNTER-DEFENDANT,
OPTIGEN, LLC, PLAINTIFF,
v.
INTERNATIONAL GENETICS, INC., GENETIC FULFILLMENT USA, LLC, PINPOINT DNA TECH., INC., AND RICHARD B. DOBBINS, DEFENDANTS,



The opinion of the court was delivered by: Hon. Glenn T. Suddaby, United States District Judge

MEMORANDUM-DECISION and ORDER

Currently before the Court in this patent infringement action filed by Optigen, LLC ("Plaintiff"), are the following three motions: (1) Plaintiff's motion to dismiss certain of the counterclaims and to strike certain of the affirmative defenses of International Genetics, Genetic Fulfillment USA, Pinpoint DNA Technologies and Richard Dobbins ("Defendants") for failure to state a claim pursuant to Fed. R. Civ. P. 12(b)(6) (Dkt. No. 13); (2) a motion for summary judgment filed by Defendant International Genetics ("InGen") (Dkt. No. 116); and (3) Plaintiff's cross-motion to amend its Complaint (Dkt. No. 162, 166). For the reasons set forth below, Plaintiff's motion to dismiss is granted; Defendant InGen's motion for summary judgment is granted in part and denied in part; and Plaintiff's motion to amend is granted.

I. RELEVANT BACKGROUND

A. Plaintiff's Claims

Generally, Plaintiff's Complaint alleges as follows. (See generally Dkt. No. 1 [Plf.'s Compl.].)

Plaintiff is in the business of providing DNA-based diagnostic services to test for inherited diseases in dogs. On September 8, 1998, "United States Patent No. 5,804,388, entitled 'CHROMOSOME 9 AND PROGRESSIVE ROD-CONE DEGENERATION DISEASE GENETIC MARKERS AND ASSAYS' (the "'388 patent"), [was] issued." "Cornell Research Foundation, Inc. is the assignee of the '388 patent, [and Plaintiff] is the exclusive licensee of the '388 patent." On December 25, 2007, "United States Patent No. 7,312,037, entitled 'IDENTIFICATION OF THE GENE AND MUTATION RESPONSIBLE FOR PROGRESSIVE ROD-CONE DEGENERATION IN DOG AND A METHOD FOR TESTING SAME' (the "'037 patent"), [was] issued." "Cornell Research Foundation, Inc. is the assignee of the '037 patent, [and Plaintiff] is the exclusive licensee of the '037 patent." The 388 patent and 037 patents relate to identifying whether a dog is a carrier of Progressive Rod-Cone Disease ("PRCD"), is predisposed to PRCD, or is genetically normal.*fn1

In 2006, Dobbins founded PinPoint, which offered a service called "Pawsitive I.D." for the DNA testing of dogs and cats. "When Pawsitive I.D. was purchased by a customer, the customer was sent a kit that was used to collect a tissue sample[, which would] . . . then [be] mailed . . . back to PinPoint for analysis." "In January 2008, [Plaintiff] notified PinPoint and Dobbins that their activity in selling, offering to sell, making and using genetic tests for PRCD by means of the Pawsitive I.D. testing kit constituted infringement of the '388 and '037 patents." "By April 15, 2008, PinPoint was no longer offering the PRCD test."

At some point in 2008, "InGen was established in . . . Freeport, Bahamas" by Dobbins. At approximately that time, "InGen purchased assets from PinPoint[,] including the Pawsitive I.D. product and trademark, database, and website domain names." Furthermore, "Dobbins prepared the content of InGen's website."

"The Pawsitive I.D. website (www.pawsitiveid.net) directs visitors to InGen's website (www.ingen.bs). "The InGen website states that 'InGen now offers the test for . . . []PRCD[] that PinPoint was forced to withdraw in April 2008 due to patent issues. . . . InGen does not have these issues and has recommended the testing for this eye disease.'" "On the InGen website, there is a question and answer column for InGen's customers[, which] includes" statements acknowledging that InGen's services would amount to patent infringement if offered in the United States, Canada and/or European Union.*fn2 "InGen offers the Pawsitive I.D. testing service (including the PRCD test) for purchase through its website, including to customers in the United States." "InGen also advertises the Pawsitive I.D. testing service (including the PRCD test) for sale within the United States." "InGen has sold the Pawsitive I.D. testing service (including the PRCD test) to customers in the United States."

"InGen contracts with Genetic Fulfillment as a shipping contractor to fill the orders placed with InGen." "When a customer places an order through InGen's website, Genetic Fulfillment ships the kit to the customer from Marietta, Georgia." "Once the customer collects the sample from the dog or cat, the customer ships the sample to Genetic Fulfillment at a post office box in Atlanta, Georgia[, and] Genetic Fulfillment then forwards the sample to InGen in The Bahamas for performance of tests that infringe the '388 and '037 patents."

Based on these factual allegations, Plaintiff's Complaint asserts the following five claims against Defendants: (1) patent infringement and inducing infringement under Sections 271(a), 271(b) and 271(f) of the United States Patent Act against Defendants Pinpoint DNA Technologies ("Pinpoint") and Richard Dobbins ("Dobbins"); (2) patent infringement and inducing infringement under Sections 271(a), 271(b) and 271(f) of the United States Patent Act against Defendants InGen and Dobbins; (3) inducing infringement under Section 271(b) of the United States Patent Act against Defendant Genetic Fulfillment USA ("Genetic"); (4) false advertising under the Lanham Act against Defendants InGen and Dobbins; and (5) unfair competition against Defendants InGen, Dobbins and Pinpoint. (See generally Dkt. No. 1 [Plf.'s Compl.].)*fn3

B. Undisputed Material Facts

The following is a general summary of material facts that are undisputed by the parties. (Compare Dkt. No. 116, Attach. 3 [Defs.' Rule 7.1 Statement] with Dkt. No. 127 [Plf.'s Rule 7.1 Response] and Dkt. No. 162, Attach. 14 [Plf.'s Suppl. Rule 7.1 Response].)

Richard B. Dobbins is the Chief Executive Director of InGen, which is a Bahamian corporation with an address of The Bloneva Building, Freeport, The Bahamas. InGen offers diagnostic services to test for genetic diseases in dogs, including the testing for PRCD. InGen was established in 2008, in direct response to Plaintiff's allegation of patent infringement, in its cease-and-desist letter, and for the sole purpose of offering patent-protected genetic tests from an offshore country, in which the patents-in-suit were not registered.

InGen operates out of an office at 1395 Cobb Parkway, N.W., Marietta, Georgia, where shipments are received and sent. InGen's phone number begins with a 678 area code, which is the area code for the Atlanta area. Sherrill Williams is the Operations Manager and sole employee of InGen. She works exclusively out of the Marietta office, and has never traveled to the Bahamas. Ms. Williams was a PinPoint employee until December 31, 2009.

InGen has no, and has never had any, employees or operations in the Bahamas. Mr. Dobbs conducts most of his supervision of InGen's business from Georgia and infrequently goes to the Bahamas.

InGen maintains a website accessible to customers located in the United States. The website allows anyone viewing it, including those located in the United States, to order InGen's genetic testing products. Payment for the products can also be made on the website. InGen's customers within the United States, who make up 80 to 85% of InGen's total customers, can access InGen's website to obtain their results.

Genetic is located in Suite G in the same building in Marietta, Georgia as the building in which InGen has its office. Genetic does not have its own telephone number, fax number, or email account; rather, Genetic's telephone number, fax number, and email account are those of InGen's. Genetic's only customers are InGen and PinPoint. Ms. Williams has been identified to third parties as the Genetic contact. In addition, Ms. Williams is listed as the contact on the Genetic FedEx account, which is paid for by InGen.

When a customer places an order through InGen's website, Genetic receives a notice. Genetic then assigns a profile number to the test purchased, packages a kit for the customer to collect a sample of hair or other specimen, and ships the kit to the customer by FedEx. Once the customer collects the sample from the dog, the customer ships the sample to Genetic in Marietta, Georgia. InGen contracts with Dr. Sunar and Dr. Dennis Reeder, of Frisco, Texas, for DNA extraction services. InGen does not have a DNA extraction facility in the United States or the Bahamas. Once the DNA is extracted, InGen forwards it from Marietta, Georgia to a lab in Freeport, The Bahamas, for genetic testing.

Familiarity with the remaining undisputed material facts of this action, as well as the disputed material facts, as set forth in the parties' Rule 7.1 Statement, Rule 7.1 Response, and Rule 7.1 Supplemental Response is assumed in this Decision and Order, which (again) is intended primarily for the review of the parties. (Id.)

C. Plaintiff's Motion to Dismiss Certain of Defendants' Counterclaims and Affirmative Defenses for Failure to State a Claim

Generally, in support of its motion to dismiss certain of Defendants' counterclaims and to strike certain of Defendants' affirmative defenses, Plaintiff argues as follows: (1) Defendants' Fourth Counterclaim alleging unenforceability for inequitable conduct should be dismissed and their Fifth Affirmative Defense should be stricken because (a) neither were pled with particularity, and (b) the counterclaim and affirmative defense do not state a claim or defense; (2) Defendants' Fifth Counterclaim alleging unenforceability for patent misuse should be dismissed and their Sixth Affirmative Defense should be stricken because (a) Defendants failed to provide adequate notice of the relevant events, and (b) the counterclaim and affirmative defense do not state a claim or defense; and (3) Defendants' First Counterclaim for accord and satisfaction should be dismissed because Defendants did not (and could not) allege the existence of a new agreement under which Plaintiff released any claims of infringement by Defendants or waived any of its rights to enforce the patents. (See generally Dkt. No. 14 [Plf.'s Memo. of Law].)

In Defendants' response to Plaintiff's motion to dismiss, they concede that, with regard to their inequitable-conduct and patent-misuse counterclaims, "further specificity is required." (See generally Dkt. No. 19 [Defs.' Response Memo. of Law].) As a result, "Defendants do not oppose [Plaintiff's] motion . . . to strike these pleadings and/or affirmative defenses without prejudice, and pending full discovery on those subjects." (Id.) However, Defendants further argue that Plaintiff's motion to dismiss their accord-and-satisfaction counterclaim should be denied, without prejudice and pending further discovery on the subject because they have alleged facts plausibly suggesting that an enforceable contract was created between the parties in satisfaction of any claim for liability. (Id.)

In its reply, Plaintiff argues as follows: (1) based on Defendants' concession, their inequitable-conduct and patent-misuse claims must be dismissed; and (2) Defendants' accord-and-satisfaction counterclaim must also be dismissed because (a) the allegations in the counterclaim do not support a valid claim for accord and satisfaction, (b) Defendants' response to Plaintiff's motion to dismiss does not contain "facts supporting a valid claim," (c) Defendants "failed to offer any probative evidence contesting [Plaintiff's] showing, based on documentary evidence, that [Plaintiff] did not release any claims for patent infringement," and (d) further discovery is not necessary when the allegations in the counterclaim "do not support a valid claim." (See generally Dkt. No. 20 [Plf.'s Reply Memo. of Law].)

D. Defendant InGen's Motion for Summary Judgment

Generally, in support of its motion for summary judgment, Defendant InGen argues as follows: (1) Plaintiff's Second Cause of Action should be dismissed because (a) InGen does not perform, nor has it ever performed, genetic testing in the United States, and therefore cannot, as a matter of law, infringe Plaintiff's United States patents, and (b) InGen does not import into the United States any "diagnostic kits" for genetic testing or any "isolated nucleic acid molecule" and therefore cannot, as a matter of law, be liable for infringement of any apparatus claims of Plaintiff's United States patents; and (2) Plaintiff's Fourth and Fifth Causes of Action should be dismissed because (a) InGen's statements on its website that it is not infringing on Plaintiff's patents is not false or misleading, and therefore it cannot, as a matter of law, be liable under the Lanham Act for publishing these statements, and (b) InGen has not infringed any of Plaintiff's patents, and therefore cannot, as a matter of law, be liable for misappropriating any intellectual property belonging to Plaintiff. (See generally Dkt. No. 116, Attach. 1 [InGen Def.'s Memo. of Law].)

In Plaintiff's response to Defendant InGen's motion for summary judgment, it argues as follows: (1) the Federal Circuit's decision in Cardiac Pacemakers Inc. v. St. Jude Med., Inc., 576 F.3d 1348 (Fed. Cir. 2009), does not bar Plaintiff's patent claims because the decision applies only to 35 U.S.C. § 271(f), and therefore does not apply to testing performed in the United States; (2) Plaintiff has valid claims for infringement under 35 U.S.C. § 271(a) because Defendant InGen offered to sell or sold the patented methods; (3) Plaintiff's claims alleging inducing infringement under 35 U.S.C. § 271(b) are supported by admissible record evidence; (4) Defendant InGen's role as PinPoint's successor precludes summary judgment; (5) Defendant InGen's representation on its website that it is not infringing on Plaintiff's patents constitutes a false statement concerning the nature and quality of InGen's products and services, which is actionable under the Lanham Act; (6) because Plaintiff has a property interest in the information protected by its patents, Defendant InGen can be held liable for unfair competition for using "the skill, expenditures and labors" of Plaintiff to its commercial advantage; and (7) summary judgment is inappropriate because discovery has not been completed. (See generally Dkt. No. 124, Attach. 1 [Plf.'s Response Memo. of Law].)

In its reply, Defendant InGen argues as follows: (1) Plaintiff's Section 271(a) claim must be dismissed because (a) the "sells" and "offers to sell" language in Section 271(a) does not apply to method patents, and (b) even if the "sells" and "offers to sell" language in Section 271(a) applies to method patents, InGen does not sell or offer for sale in the United States any methods for genetic testing; (2) there can be no inducement of infringement under 35 U.S.C. § 271(b) because Ingen does not induce its customers to conduct any genetic testing, does not provide its customers with any materials necessary for conducting genetic testing, and conducts all genetic testing outside the United States; (3) because Plaintiff's infringement claims cannot survive its motion for summary judgment, Plaintiff's unfair competition and Lanham Act claims must be dismissed; (4) any claims of successor liability against InGen are properly considered through post-judgment proceedings, and only if liability is determined as to Defendant PinPoint; and (5) further discovery before deciding its motion for summary judgment is not necessary because "the only question before this Court is where InGen performs its genetic testing,"*fn4 and no amount of discovery will change the fact that InGen operates in the Bahamas. (See generally Dkt. No. 137 [InGen Def.'s Reply Memo. of Law].)

In Plaintiff's supplemental response to Defendant InGen's motion for summary judgment,*fn5 in addition to reiterating previously advanced arguments, it argues, inter alia, as follows: (1) "[t]here is no dispute that InGen offers to sell and sells the patented method of detecting [PRCD] to customers in the United States," and therefore summary judgment cannot be granted to InGen on Plaintiff's Section 271(a) claims; (2) InGen should be held liable for PinPoint's acts of infringement because discovery has revealed that no consideration was given to PinPoint for the "purchase" of its assets by InGen, and that Defendant Dobbins controls every aspect of the business of PinPoint and InGen; and (3) InGen and Dobbins have intentionally misled InGen's customers by making it appear as if InGen owns a laboratory in the Bahamas when in fact InGen owns only some equipment in the Bahamas. (Dkt. No. 162, Attach. 1.) Plaintiff also requests leave to amend its Complaint to add a Sixth Cause of Action "relat[ing] to the transfer of PinPoint's assets," and allegations pertaining to "representations about InGen's business operations and [the] location of InGen's business." (Id.) Finally, Plaintiff concedes that the Federal Circuit's decision in Cardiac Pacemakers, Inc., which was issued during the pendency of this action, "appears to" bar its claims asserted against InGen under Section 271(f). (Id.)

In its supplemental reply (and response to Plaintiff's cross-motion), Defendant InGen argues, inter alia, as follows: (1) even applying the "essential activity" test articulated in CLS Bank Int'l v. Alice Corp., 667 F. Supp. 2d 29, 36 (D. D.C. 2009), it is entitled to summary judgment on Plaintiff's Section 271(a) claims because "any sales and/or offers to sell genetic testing in the present matter occur outside the United States, as do all transactions between InGen and its customers and all genetic testing"; (2) the Supreme Court's decision in Quantra Computer, Inc. v. LG Elec., Inc., 553 U.S. 617 (2008), did not overrule the Federal Circuit's holding in NTP, Inc. v. Research in Motion, LTD, 418 F.3d 1282 (Fed. Cir. 2005), that the "sale" and "offer for sale" language of Section 271(a) does not apply to method patents; and (3) Plaintiff's cross-motion to amend should be denied because (a) the motion has been made after an "inordinate delay," (b) allowing Plaintiff to amend will prejudice InGen by forcing it to "seek additional and costly discovery to prove the truth of the statements [that Plaintiff alleges are false,]" and (c) ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.