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Inguran, LLC v. ABS Global, Inc.

United States District Court, W.D. Wisconsin

February 26, 2019

INGURAN, LLC, CYTONOME/ST, LLC, and XY, LLC, Plaintiffs and Counter Defendants,
v.
ABS GLOBAL, INC., GENUS PLC, and PREMIUM GENETICS UK LTD, Defendants and Counter Claimants.

          OPINION AND ORDER

          WILLIAM M. CONLEY DISTRICT JUDGE.

         In this patent lawsuit, plaintiffs Inguran, LLC, Cytonome/ST, LLC and XY, LLC, allege the defendants ABS Global, Inc., Genus PLC and Premium Genetics (UK) Ltd, have infringed six patents, two owned by plaintiff XY and four owned by plaintiff Cytonome. In addition, all parties assert claims and counterclaims under state law. Before the court are the parties' fully briefed, cross-motions for summary judgment and claims construction. (Dkt. ##156, 163.) On February 8, 2019, the court also held a hearing on those motions. In this opinion and order, the court concludes that: (1) the asserted claims of the '860 patent are invalid as indefinite; (2) the asserted claims of the '822 patent fail to meet the written description requirement of 35 U.S.C. § 112; and (3) plaintiffs' state law claims are barred by the judgment issued in ABS I.

         This leaves defendants' motion for summary judgment as to the Cytonome patents (and plaintiffs' cross motion on the Tashiro invalidity counterclaim), as well as plaintiffs' motion for summary judgment on defendants' counterclaims. The court intends to issue a separate opinion shortly that: (1) construes the “direction” terms consistent with the construction offered by defendants; (2) construes the “focusing” terms to include the prosecution disclaimer; (3) grants summary judgment to defendants on most (but not all) of plaintiffs' theories of infringement based in part on the “direction” construction; and (4) denies summary judgment to defendants on the anticipation counterclaims based on Weigl, Tashiro and Wada. As a result of those anticipated rulings, some patent claims and counterclaims will continue to trial, as well as possibly defendants' counterclaims, which the court still needs to address. The court, however, will strike the April 1, 2019, trial date and all pretrial deadlines for two core reasons.

         First, after the February 8th hearing, the court reviewed more closely the IPR proceedings to date on the four Cytonome patents. While PTAB denied review (and denied defendants' petition for rehearing on denial of review) for two of the patents, the other two progressed to a hearing in January, and PTAB should issue an opinion shortly. See 37 C.F.R. § 42.100 (requiring that an IPR proceeding from institution is “normally no more than one year, ” though “can be extended by up to six months for good cause”); IPR2017-02163 (instituted on April 9, 2018); IPR2018-02161 (instituted on April 9, 2018). While neither party has asked for a stay, the court is reluctant to add patents to a jury trial that may be found to be unpatentable within a matter of days or weeks of that trial.

         Second, as the court mentioned during the hearing, there are compelling reasons to try this case and retry the remanded patent claims in ABS I in one, consolidated trial. Given that defendants have filed a motion for clarification that has stalled the Seventh Circuit's issuing of its mandate and may expand the issues for retrial. Regardless, because some trial preparation and coordination of expert schedules will be required to try the patent claims in ABS I, postponing the trial date in this case will facilitate a consolidated trial.

         As mentioned above, the court hopes to issue the second summary judgment opinion shortly. In the meantime, the parties are directed to alert the court promptly of any developments in the IPR proceedings or in the Seventh Circuit appeal of ABS I. The court will reschedule the trial as soon as practical following guidance from PTAB and the Seventh Circuit.

         UNDISPUTED FACTS[1]

         A. Overview of the Parties

         Plaintiffs Inguran, LLC d/b/a STGenetics (“ST”), XY, LLC and Cytonome/ST, LLC. Plaintiff XY is a wholly-owned subsidiary of plaintiff ST. Defendants ABS Global, Inc., Genus plc and Premium Genetics (UK) Ltd. Both Premium Genetics and ABS are wholly-owned subsidiaries of Genus. The parties are competitors in the business of providing sexed bull semen.

         B. ABS I Litigation

         In a prior lawsuit, ABS Global, Inc. v. Inguran, LLC, No. 14-cv-503 (W.D. Wis. July 14, 2014), ABS asserted antitrust claims against ST, and ST asserted counterclaims against ABS and Genus for breach of contract and patent infringement. XY also intervened in that lawsuit and asserted claims against ABS and Genus for trade secret misappropriation and patent infringement, though the two asserted patents by XY were found unpatentable in an inter partes review proceeding.

         Following extensive discovery and motion practice, a jury found in favor of ABS on its antitrust claim, and the court entered an injunction to be in force for five years. The jury also found ABS liable for trade secret misappropriation and awarded XY $750, 000 in damages. Finally, the jury found ABS had infringed ST's patents and awarded ST a lump sum and running royalties on those two patents. In a recent decision, the Seventh Circuit Court of Appeals affirmed in part and reversed in part this court's decision on a motion for judgment notwithstanding the verdict, remanding for further proceedings on patent claims alone, while affirming in all other respects. See ABS Glob., Inc. v. Inguran, LLC, No. 17-1873, 2019 WL 350647 (7th Cir. Jan. 29, 2019).

         C. XY Patents-In-Suit

         Two of the six patents-in-suit are owned by XY. Generally, U.S. Patent Nos. 6, 524, 860 (“the '860 patent”) and 9, 365, 822 (“the '822 patent”) are both directed at methods for sorting cells using improved fluid media. ('860 patent (dkt. #1-7); '822 patent (dkt. #1-6).) The '860 patent issued on February 25, 2003, and the '822 patent issued on June 14, 2016. Neither patent, however, remains in force, both having expired December 31, 2017, approximately six months after plaintiffs filed the present lawsuit.

         1. '860 Patent

         ST and XY assert infringement of claims 1-7, 17-19, 21-22, 28, 30-32 and 38-44. The only independent claims are 1 and 32. For purposes of claim construction, the parties dispute three terms: (1) “chemically coordinating” in claims 1 and 32; (2) “minimizing the chemical changes” in claims 2 and 21; and (3) “hyper-responsive” in claims 22, 31 and 38.

         The '860 patent concerns three “fluid environments”: (1) a “pre-sort” fluid environment; (2) a sheath fluid environment, which cells are exposed to during the sorting process; and (3) a “post-sort” fluid environment. The patent states that “the invention is remarkable [from earlier sex-selected sperm sorting strategies] in that it removes the total focus from that of operation of the flow cytometer to a focus on handling and removing stress from the [sperm] cells themselves.” (Pls.' Add'l PFOFs ¶ 2 (dkt. #197) (quoting '860 patent at 7:47-50).) The patent goes onto state that “by selecting the appropriate sheath fluid not only in context of flow cytometry parameters, but rather also in context of the cell parameters themselves, the changes experienced by the cells and the over all [sic] result of the sorting can be enhanced.” (Id. at ¶ 3 (quoting '860 patent at 8:7-11).)

         Consistent with these statements, plaintiffs maintain the sheath fluid environment was selected in the prior art based on parameters that affect the mechanical operation of the cell sorter, whereas the patent shifted the focus to selecting fluid environments based on how they affected the health of the cells. Independent claim 1 provides:

1. A method of sorting cells by flow cytometry comprising the steps of:
a. establishing a cell source which supplies cells to be sorted;
b. chemically coordinating a sheath fluid to create a sheath fluid environment for said cells which is coordinated with both a pre-sort and a post-sort cell fluid environment and combining such cells in a flow cytometer;
c. sensing a property of said cells in a flow cytometer;
d. discriminating between cells having a desired characteristic; and
e. collecting cells having said desired characteristic.

('860 patent at 18:42-54 (emphasis added).) Independent claim 32 provides:

32. A method of sorting cells by flow cytometry comprising the steps of:
a. establishing a cell source which supplies cells to be sorted;
b. establishing a sheath fluid to create a sheath fluid environment for said cells and combining said sheath fluid with said cells;
c. sensing a property of said cells in a flow cytometer;
d. discriminating between cells having a desired ...

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