BASF Plant Science, L.P., Cargill, Inc. v. Commonwealth Scientific, et al. (“CSIRO”)
Docket No. 2020-1415-16, 2020-1919-20 (https://cafc.uscourts.gov/opinions-orders/20-1415.OPINION.3-15-2022_1921729.pdf)
NEWMNA (D), TARANTO, CHEN
March 15, 2022
Brief Summary: Following a dispute regarding a collaboration agreement, FC panel affirmed DC fining on venue and WD of species but not genus claims, affirmed no co-ownership of certain patents but reversed as to co-ownership of one patent, and affirmed as to no willfulness but remanded for damages calculation.
Summary: BASF and Cargill appealed the jury verdict that certain of CSIRO’s patents include an adequate written description (WD) and no co-ownership by BASF of four patents (the “Group A” patents that share a specification and claim priority to CSIRO’s 2004 provisional application). Cargill appealed the DC determination that venue based on its partner BASF’s deposit of seeds with the ATCC was proper for Cargill under section 271(a). CSIRO appealed the jury’s verdict that BASF co-owns one patent (the ‘792 patent, not a Group A patent), the refusal of the DC to submit willfulness to the jury, damages determination, denial of an infringement-stopping injunction and ongoing royalty, and the royalty calculation. The claims relate to genetically-engineered plants, “particularly canola, to produce specified oils not native to the plants” (e.g., omega-3 fish oils, “LC-PUFAs” including EPA and DHA). Both parties were working on similar approaches, but “using (and [having] commercial rights to) different genes”, and entered into a collaboration agreement (“MTEA”) to evaluate combinations of the genes which ended in 2010. CSIRO later partnered with another AU government agency (Grains Research), granted the commercial company Nuseed an exclusive license to its technology and patents, and these partners then “worked toward marketing products” to feed fish (Aquaterra) and humans (Nutriterra). BASF partnered with Cargill to develop “a LC-PUFA-producing canola seed line called LFK” (deposited with the ATCC to support its patent applications) which Cargill used “in cross-breeding work to eventually to develop a commercial seed oil product called Latitude”. BASF and CSIRO unsuccessfully negotiated for a license, after which BASF sued Nuseed for a declaratory judgment (DJ) that was dismissed for lack of jurisdiction. This case began when BASF sued CSIRO (which includes Nuseed and Grains) and CSIRO countersued. BASF also alleged it co-owned some of the patents under the MTEA.
On venue, the FC panel agreed with CSIRO “s that 28 U.S.C. § 1400(b) does not provide venue protection to a third-party counterclaim defendant—which is Cargill’s role here” (Home Depot, US 2019; distinguished from TC Heartland, US 2017 (“allowance of venue ‘where the defendant resides’ (emphasis added) was limited, for a corporation, to the place of incorporation” and GE (US 1932 (“did not involve third-party practice at all: no new party brought in after filing was at issue”). The FC panel explained that Cargill did not “contend in this court that BASF’s deposit of seeds at the ATCC for patenting was outside the scope of infringing ‘uses’ under 35 U.S.C. § 271(a)” or any “remotely persuasive argument why imputation of an act done in furtherance of a partnership cannot support venue” (Celgene, FC 2021; Andra, FC 2021). This part of the DC’s decision was therefore affirmed.
Regarding WD, the FC panel affirmed the DC decision “as to the claims are limited to canola plants”, but “reversed as to the broader genus claims.” The FC panel explained that the specification must “show that the inventor actually invented the invention claimed” but also that “[a]ctual reduction to practice is not a requirement” (Ariad, FC 2010). It also explained that “‘a patentee may rely on information that is well-known in the art’ to the extent it informs how a relevant artisan would reasonably understand what is actually described in the specification” (Ajimoto, FC 2019). The FC panel wrote “that a relevant artisan,” reading the specification “when interested in developing an oilseed crop plant that could produce LCPUFAs, would have focused on canola and soy (and maybe flax)” (Novozymes, FC 2013 (“blaze mark” strain of written-description doctrine)) and “as to canola, the specification and trial evidence support a finding that the inventors had more than “a ‘mere wish or plan’ for obtaining the claimed invention” and “a highly predictive model” (unlike Centocor, FC 2019 (claims to “fully human antibody with certain therapeutic properties… but the specification (1) disclosed only a chimeric (human/mouse) antibody that met the critical therapeutic claim limitations and (2) had only “a few sentences sprinkled throughout . . . that mention[ed] human antibodies”). It distinguished this case from Nuvo (FC 2019) in which it found “[i]n light of the fact that the specification provides nothing more than the mere claim that uncoated [acid inhibitors] might work, even though persons of ordinary skill in the art would not have thought it would work, the specification is fatally flawed” (see also Rochester, (FC 2004) (“invalidating a patent that functionally claimed compounds that selectively inhibited an enzyme, but identified no compound capable of that function”)). Regarding the genus-type claims (all plants), the FC panel found the specification did not provide “a representative number of species” (Juno, FC 2021; Glaxo, FC 2014 (noting functional-structural distinction)) and “success in Arabidopsis did not automatically mean success (or possession of the invention) in all plant cells—unlike in Amgen” (Amgen, FC 2003). Thus, the FC panel found the specification supported the species-specific, but not the genus, claims.
The FC panel affirmed the verdict of no-coownership of the Group A patents and reversed the verdict that BASF co-owns the ‘792 patent. “The Ownership provision” of the MTEA “addresses ‘New Materials, Transformed Lines and Results and any Intellectual Property subsisting in them”. BASF argued that “even though none of the six patents claim the BASF-CSIRO-gene-combination constructs or properties of them or uses of them, it is enough ‘that CSIRO obtained its patents by drawing on the lessons it learned from the experiments involving both BASF and CSIRO’s materials’” (“It argues only that CSIRO obtained information pertaining to how to get constructs working in canola, with no details identified or shown to be significant to any claim.”) Judge Newman dissented as to the reversal regarding the ‘792 patent (e.g., “The ’792 patent includes BASF gene-encoded enzymes, as shown by undisputed evidence”.)
The FC panel affirmed the DC’s “refusal to submit willfulness to the jury and its decision on the evidentiary issue concerning past damages” but remanded it “for reconsideration of the remedy, while leaving the current remedy in place pending such reconsideration.” Regarding willfulness, the FC panel explained that “[t]o establish willfulness, a patentee must show that the accused infringer had a specific intent to infringe at the time of the challenged conduct”, which was not shown here (Bayer, FC 2021 (must establish “more than ‘[k]nowledge of the asserted patent and evidence of infringement’”; Halo, US 2016).