Econugenics, Inc. v. Bioenergy Life Sci., Inc.

381 F. Supp. 3d 1082
District Court, D. Maine·Decided May 7, 2019·No. Case No. 19-cv-0351 (JNE/DTS)·Published·Cited by 2 cases

Opinion

DAVID T. SCHULTZ, United States Magistrate Judge

INTRODUCTION

This Order pertains to the Court's sua sponte Order to Show Cause, on which a hearing was held March 8, 2019. Specifically, this Order addresses whether counsel1 for ecoNugenics, Inc., is in contempt of court for filing this action in seeming contravention of the Court's prior orders in Case No. 17-cv-5378.2 In addition, this order further addresses the Court's previous award of attorneys' fees under Fed. R. Civ. P. 41(d) and Plaintiff's objections regarding the amount of that award. As set forth below, counsel for ecoNugenics are not held in contempt of court; the Court does award $ 84,763.00 in attorneys' fees under Rule 41(d).

PROCEDURAL HISTORY AND FINDINGS OF FACT

This patent-infringement action3 was filed on February 13, 2019 and originally assigned to District Judge Eric C. Tostrud and Magistrate Judge Elizabeth Cowan Wright. Clerk's Notice of Initial Case Assignment, Docket No. 3. Following Defendant's filing of Notice of Related Case, and over the strenuous objection of ecoNugenics' counsel, this matter was reassigned to District Judge Joan N. Ericksen and the undersigned Magistrate Judge on February 21, 2019. Order, Feb. 21, 2019, Docket No. 10. This Court sua sponte issued an Order to Show Cause why counsel for ecoNugenics should not be held in contempt of court for willful and continued disobedience to court orders. Order to Show Cause, Docket No. 13. The reason for the Court's sua sponte order is readily apparent from the procedural history of this matter, which is set forth in detail below.

I. Procedural History

ecoNugenics filed its first patent-infringement complaint against Bioenergy Life Science, Inc. ("Bioenergy"), Chengzhi Life Sciences Company, Ltd. ("Chengzhi"), and Zhejiang Gold Kropn Biotechnology *1085Co., Ltd. ("Zhejiang"), in December 2017. Complaint, No. 17-cv-5378 (D. Minn. Dec. 7, 2017), Docket No. 1. In that complaint ecoNugenics alleged that Defendants directly and indirectly infringed six United States Patents4 relating to the administration of Modified Citrus Pectin (MCP) to mammals, particularly humans, to treat various conditions. Id. In its original complaint, ecoNugenics alleged that while MCP per se is not patentable, certain methods of administering it to patients are patentable:

MCP does not require a prescription or a Doctor's support. Accordingly, individuals have purchased the inferior MCP made available by BLS and administered it to themselves for ... detoxification of toxins and heavy metals, enhancing immune support, reducing inflammation ..., reducing fibrosis ... and the like. These individuals infringe the claims of the ecoNugenics' patents with the inducement and contribution of BLS, Chengzhi, and Gold Kropn.5

Id. at ¶ 27.

In addition, ecoNugenics alleged that "[c]omparative testing by qualified laboratories confirmed that ... the [MCP sold by] the Defendants is 'certainly not MCP with the ability to enter mammalian circulation and bind heavy metals and galectin-3 in the blood.' " Id. at ¶ 17.

On March 22, 2018, Bioenergy6 moved to dismiss ecoNugenics' complaint against it, arguing, inter alia, that the complaint failed to plead plausible claims of patent infringement because the allegations in paragraph 17 conclusively established non-infringement and those in paragraph 27 asserted only indirect infringement. Mem. in Supp. Mot. to Dismiss, No. 17-cv-5378 (D. Minn. Feb. 2, 2018), Docket No. 28. In addition, Bioenergy moved to dismiss on grounds of unpatentable subject matter, id. , in response to which ecoNugenics moved for summary judgment in its favor on the question of patentable subject matter. Mot. for Partial Summ. J., No. 17-cv-5378 (D. Minn. Feb. 22, 2018), Docket No. 33.

By Order dated September 4, 2018, the Court dismissed the complaint against Bioenergy:

The allegation [in paragraph 17] that the sample of Bioenergy's product that was tested is not MCP with the ability to enter mammalian circulation and bind heavy metals and galectin-3 in the blood renders ecoNugenics' infringement claims implausible.

Order at 13, No. 17-cv-5378 (D. Minn. Sept. 4, 2019), Docket No. 52. Because Bioenergy's MCP could not perform the function of entering mammalian blood circulation and binding heavy metals and galectin-3, as claimed by the six patents, there could be no infringement.

The Court further noted that:

In addition, the asserted patents recite administration of modified pectin. ecoNugenics alleged that the purchasers of Bioenergy's product administer the product to themselves.

*1086Id. Accordingly, the Court held, there was no plausible claim of direct infringement by Bioenergy, and because direct infringement is predicate to the claims of contributory or induced infringement, ecoNugenics had also failed to allege against Bioenergy any plausible claim of indirect infringement. Id. at 13-15. Because the Court found ecoNugenics had failed to plausibly plead infringement, it declined to address Bioenergy's claim that the asserted patents were invalid as claiming non-patentable subject matter, and denied ecoNugenics' motion for summary judgment on the question of patentable subject matter. Id. at 15-16.

Twenty days later, in apparent response to the Court's order, ecoNugenics filed a separate action alleging infringement of five of the same six patents by the same three defendants based on the same MCP product. This "new" action, No. 18-cv-2733, was randomly assigned to a different District Judge and Magistrate Judge than the original action. Clerk's Notice of Initial Case Assignment, No. 18-cv-2733 (D. Minn. Sept. 24, 2018), Docket No. 3. In the new complaint (Complaint No. 2),7 ecoNugenics deleted the factual allegations in paragraphs 17 and 27 on which its prior complaint had foundered, replacing them with new allegations. Complaint No. 2 ¶¶ 20, 31, No. 18-cv-2733, Docket No. 57. Specifically, paragraph 20 of Complaint No. 2 (apparently included in lieu of paragraph 17 of Complaint No. 1 that had alleged Bioenergy's MCP could not enter mammalian circulation and bind heavy metals and galectin-3) asserted that:

Each of the patents asserted in this suit discloses that the MCP may be administered to patients as recited in the claims through different methods .... While oral administration is generally preferred ..., being able to administer the MCP intravenously, or through other methods, allows the administration of MCP of varying character for the purpose of treating a mammal such as a human for conditions such as immune support, toxin elimination, reduction or inhibition of fibroses, reduction or inhibition of inflammation and the like. MCP products are provided by ... BLS in dosage formats intentionally prepared to encourage administration and self-administration of MCP by customers of BLS.

Paragraph 31 of Complaint No.

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Econugenics, Inc. v. Bioenergy Life Sci., Inc., 381 F. Supp. 3d 1082 (D. Me. 2019).

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