Nisus Corp. v. Perma-Chink Systems, Inc.

327 F. Supp. 2d 844, 2003 U.S. Dist. LEXIS 25780, 2003 WL 23689570
CourtDistrict Court, E.D. Tennessee
DecidedSeptember 30, 2003
Docket3:98-cv-00433
StatusPublished
Cited by2 cases

This text of 327 F. Supp. 2d 844 (Nisus Corp. v. Perma-Chink Systems, Inc.) is published on Counsel Stack Legal Research, covering District Court, E.D. Tennessee primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Nisus Corp. v. Perma-Chink Systems, Inc., 327 F. Supp. 2d 844, 2003 U.S. Dist. LEXIS 25780, 2003 WL 23689570 (E.D. Tenn. 2003).

Opinion

MEMORANDUM OPINION

VARLAN, District Judge.

I. Introduction

This patent infringement action was brought by plaintiff Nisus Corporation (“Nisus”) against defendant Perma-Chink Systems, Inc. (“Perma-Chink”) on July 14, 1998 pursuant to the patent laws of the United States, 35 U.S.C. § 1 ef seq. Nisus seeks a judgment that Perma-Chink is infringing on its rights under U.S. Patent No. 5,645,828 (“the '828 patent”) and demands compensatory and punitive damages. On May 23, 2002, Perma-Chink brought several counterclaims against Ni-sus, including a claim of non-infringement and antitrust violations.

This matter is before the Court on the following: Perma-Chink’s “supplemental brief in support of motion for summary judgment of non-infringement” [Doc. 348] 1 ; Nisus’ objections to the magistrate judge’s order ruling on its motion for leave to file a supplemental expert report [Doc. 363]; and Nisus’ motion for consolidation [Doc. 378], Oral argument on these motions was heard by the Court on July 25, 2003 [see Doc. 389]. The Court has carefully considered the entire record, including the parties’ excellent briefs and arguments and the applicable law, and is of the opinion that Nisus cannot prevail on any pending issue.

Therefore, based upon the reasons set forth herein, the Court will OVERRULE Nisus’ objections to the order disallowing a supplemental expert report; will GRANT summary judgment to Perma-Chink on the issue of non-infringement; and will DENY AS MOOT Nisus’ request for consolidation.

II. Relevant Facts

1. Nisus’ Patent

In 1983, Richard Dunstan and Allan Dietrich formed Perma-Chink, which manufactures and sells a line of products for the log home industry. During the early 1980s, Dietrich and two Perma-Chink employees, Vincent Palmere and Stanley Ga-lyon, invented a formulation that would later lead to the '828 patent, which involves “Methods and Compositions for Retarding and Eradicating Infestation in Trees and Tree Derived Products.” In 1990, Dietrich, Palmere, and Galyon left Perma-Chink to form Nisus.

On July 8, 1997, the United States Patent and Trademark Office granted the '828 patent to Dietrich, Palmere, and Galyon. The inventors assigned their rights to the '828 patent to Nisus. Nisus manufactures and distributes an insecticide and wood preservative product called Bora-Care, which is formulated based upon the '828 patent. Subsequently, Perma-Chink developed, advertised, and sold its own insecticide and wood preservative formulation, which is embodied in a product called *847 Shell-Guard. Nisus alleges that Perma-Chink’s Shell-Guard product infringes on the '828 patent and therefore on Bora-Care.

2. Nisus’ Patent Claims

The '828 patent makes fifteen claims about its method for preventing or eradicating the infestation of tree-derived products. The active ingredient in the formulation described in the '828 patent is boron, which functions as both a pesticide and preservative. In order for a product based on the patented formulation to function as designed, the boron must penetrate and diffuse throughout the wood. Only claims 1 and 2 of the '828 patent are independent, while the remaining claims are dependent on claims 1 and 2.

Claims 1 and 2 outline a two-step process for diluting a chemical composition and applying it to the surface of a tree-derived product, as follows:

1. A method of preventing or eradicating an infestation in a tree derived product comprising the steps of:
diluting an environmentally safe composition which is the product of a mixture or the reaction product of of [sic] a mixture of alkylene glycols including at least one short chain polyalkylene glycol having an average molecular weight of between about 200 and about 400, and at least one short chain alkylene glycol; and boron provided as a glycol soluble boron containing composition in an amount effective to prevent or eradicate infestation with water in an amount of between about 1 part boron to about 8.8 parts water to about 1 part boron to about 85.5 part water; and applying said composition to a surface of said tree derived product, wherein said composition exhibits improved depth of penetration.
2. A method of preventing or eradicating an infestation in a tree derived product comprising the steps of:
applying to said tree product an environmentally safe composition which is the product of a mixture or reaction product of at least one short chain alkylene glycol, a glycol soluble boron containing compound in an amount effective to prevent or eradicate infestation and at least one short chain po-lyalkylene glycol having an average molecular weight of between about 200 and about 400, wherein said composition exhibits improved depth of penetration.

[see U.S. Patent No. 5,645,828 at pp. 30-31 attached to Doc. 1 (emphasis added)].

Nisus contends Perma-Chink’s Shell-Guard product infringes the two independent claims and six of the dependent claims — specifically claims 1 through 4 and 9 through 12. As emphasized above, both claims 1 and 2 of the '828 patent require that the formulation exhibit “improved depth of penetration.” Since all of the other claims are dependent upon claims 1 or 2, there must be a showing that Shell-Guard exhibits “improved depth of penetration” in order to infringe the '828 patent. See Wahpeton Canvas Co., Inc. v. Frontier, Inc., 870 F.2d 1546, 1553 (Fed.Cir.1989)(“[i]t is axiomatic that dependent claims cannot be found infringed unless the claims from which they depend have been found to have been infringed”).

3. Court’s Construction of Nisus’ Patent Claims

The parties requested that the Court construe the claims at issue pursuant to Markman v. Westview Instruments, Inc. (“Markman II”), 517 U.S. 370, 116 S.Ct. 1384, 134 L.Ed.2d 577 (1996). The Honorable Curtis L. Collier, the United States District Judge originally assigned to this *848 case, held a Markman hearing on October 2, 2001 and issued a memorandum opinion construing the claims on January 14, 2002. The Court construed the term “improved depth of penetration,” the only remaining claim at issue, to mean “improved cross-grain penetration in comparison to the Japanese prior art” [see Doc. 215 at p. 12].

III. Nisus’ Objections to Disallowance of Supplemental Expert Report

1. Standard of Review

Nisus has filed objections to the magistrate judge’s order ruling on its motion for leave to file a supplemental expert report [Doc. 363].

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327 F. Supp. 2d 844, 2003 U.S. Dist. LEXIS 25780, 2003 WL 23689570, Counsel Stack Legal Research, https://law.counselstack.com/opinion/nisus-corp-v-perma-chink-systems-inc-tned-2003.