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Syngenta Crop Protection, LLC v. Willowood, LLC

United States Court of Appeals, Federal Circuit

December 18, 2019

SYNGENTA CROP PROTECTION, LLC, Plaintiff-Appellant
v.
WILLOWOOD, LLC, WILLOWOOD USA, LLC, WILLOWOOD AZOXYSTROBIN, LLC, WILLOWOOD LIMITED, Defendants-Cross-Appellants

          Appeals from the United States District Court for the Middle District of North Carolina in No. 1:15-cv-00274-CCE-JEP, Judge Catherine C. Eagles.

          Russell Evan Levine, Kirkland & Ellis LLP, Chicago, IL, argued for plaintiff-appellant. Also represented by Hari Santhanam, Meredith Zinanni.

          Steven Edward Tiller, Whiteford, Taylor & Preston LLP, Baltimore, MD, argued for defendants-cross-appellants. Also represented by Peter James Davis; Barry S. Neuman, Washington, DC; Alan Duncan, Leslie Cooper Harrell, Mullins Duncan Harrell & Russell PLLC, Greensboro, NC.

          Megan Barbero, Appellate Staff, Civil Division, United States Department of Justice, Washington, DC, argued for amicus curiae United States. Also represented by Mark R. Freeman, Joseph H. Hunt; Matthew G.T. Martin, The United States Attorney's Office, Middle District of North Carolina, United States Department of Justice, Greensboro, NC.

          Melvin C. Garner, Leason Ellis LLP, White Plains, NY, for amicus curiae New York Intellectual Property Law Association. Also represented by Lauren Beth Emerson, Robert M. Isackson, Martin Schwimmer.

          James Peter Rathvon, Paley Rothman, Bethesda, MD, for amici curiae Aceto Agricultural Chemicals Corp., Aceto Corporation, AgLogic Chemical, LLC, Agro-Gor Corp., Albaugh, LLC, Argite, LLC, Atticus, LLC, Axss Technical Holdings, LLC, Chemstarr, LLC, Consus Chemicals, Inc., Decco U.S. Post-Harvest, Inc., Drexel Chemical Company, Ensystex, Inc., Ensystex II, Inc., Ensystex III, Inc., Ensystex IV, Inc., Extremis, LLC, GeneraTec, LLC, Gharda Chemicals International, Inc., Helm Agro US, Inc., LG Chem, Ltd., MEY Corporation, PBI Gordon Corp., Promika, LLC, Raymat Crop Science, Inc., Raymat Materials, Inc., RedEagle International, LLC, RiceCo, LLC, Ro-tam Agrochemical Company, Ltd., Rotam Ltd., Rotam North America Inc., Sharda CropChem Ltd., Sharda USA, LLC, Summit Agro US, LLC, Summit Agro North America Holding Corporation, Tacoma AG, LLC, Tide International USA, Inc., Troy Corporation, United Phosphorus, Inc., UPL Delaware Inc., Woodstream Corporation.

          Jeffrey Paul Kushan, Sidley Austin LLP, for amici curiae Biotechnology Innovation Organization, CropLife International. Also represented by Kathi A. Cover, iBiq-uity Digital Corporation, Columbia, MD.

          Before Reyna, Taranto, and Stoll, Circuit Judges.

          REYNA, CIRCUIT JUDGE

         Syngenta Crop Protection, LLC, sued Willowood, LLC, Willowood USA, LLC, Willowood Azoxystrobin, LLC, and Willowood Limited in the U.S. District Court for the Middle District of North Carolina for copyright infringement and patent infringement, asserting four patents directed to a fungicide compound and its manufacturing processes. Prior to trial, the district court dismissed the copyright infringement claims, determining them to be precluded by the Federal Insecticide Fungicide and Rodenticide Act. The district court granted-in-part and denied-in-part Syngenta Crop Protection, LLC's summary judgment motion with respect to patent infringement. The district court also denied-in-part the defendants' motion to exclude expert testimony on damages.

         After a jury trial, the district court entered judgment in favor of Willowood Limited on all patent infringement claims; in favor of all defendants on infringement of one patent at issue; and against Willowood, LLC, and Willowood USA, LLC, on infringement of the remaining three patents. The district court denied Syngenta Crop Protection, LLC's motions for judgment as a matter of law. Syngenta Crop Protection, LLC, appeals the district court's denials of its motions for judgment as a matter of law and its final judgment. Defendants conditionally cross-appeal the district court's partial denial of their motion to exclude expert testimony on damages. For the reasons explained below, we affirm-in-part, reverse-in-part, vacate-in-part, and remand for further proceedings consistent with this opinion.

         Background

         I. The Asserted Patents

         Syngenta Crop Protection, LLC, ("Syngenta") is the assignee of U.S. Patent Nos. 5, 602, 076 ("the '076 patent"), 5, 633, 256 ("the '256 patent"), 5, 847, 138 ("the '138 patent"), and 8, 124, 761 ("the '761 patent"). The '076 patent is entitled "Certain Fungicides, Pesticides and Plant Growth Regulants." The '256 patent is entitled "Certain Pyrimidinyloxy-phenyl Acrylates, Derivatives Thereof and Their Fungicidal Use." The '076 and '256 patents (collectively, "the Compound Patents") expired on February 11, 2014. The Compound Patents are directed to a group of chemical compounds, including azoxystrobin, a fungicide commonly used in agriculture to control fungal growth on crops. J.A. 7; Appellant's Br. 9.

         The '138 patent is entitled "Chemical Process" and expired on December 8, 2015. The '138 patent is directed to a two-step process for manufacturing azoxystrobin that includes an etherification step followed by a condensation step. Appellant's Br. 12; J.A. 6672. The etherification step produces an intermediate compound that is then used in the condensation step to produce azoxystrobin. J.A. 6672.

         The '761 patent is entitled "Processes for the Preparation of Azoxystrobin Using DABCO as a Catalyst and Novel Intermediates Used in the Processes" and does not expire until April 15, 2029. The '761 patent is directed to a process of using the chemical catalyst 1, 4-diazabicyclo[2.2.2]octane ("DABCO") during the condensation step to manufacture azoxystrobin. '761 patent col. 1 ll. 20-25; J.A. 6682-83. Each claim of the '761 patent requires at least "the presence of between 0.1 and 2 mol % of [DABCO]." '761 patent col. 20 ll. 1-2, 25-26.

         II. The Asserted Copyrights

         Syngenta uses azoxystrobin as an active ingredient in formulating its fungicide end-use products. Appellant's Br. 7. Syngenta markets and sells these end-use products under several brand names, including QUADRIS® and QUILT XCEL®. Id. Both products are sold with detailed labels that provide directions for use, storage, and disposal, as well as first-aid instructions and environmental, physical, and chemical hazard warnings. Id. at 19. The QUADRIS® label comprises fifty-four pages of small-type text and charts. J.A. 276; 424-77. The QUILT XCEL® label comprises twenty-nine pages of small-type text and charts. J.A. 276; 481-509. Syngenta registered these two labels with the U.S. Copyright Office on March 25, 2015. Appellant's Br. 19; J.A. 276-77, 479.

         III. District Court Proceedings

         On March 27, 2015, Syngenta brought suit against Willowood, LLC ("Willowood LLC"), Willowood USA, LLC ("Willowood USA"), and Willowood Limited ("Willowood China") (collectively, "Willowood")[1] for patent and copyright infringement. Willowood China is a Hong Kong company that contracts for the manufacture of azoxystrobin in China and sells the fungicide to Willowood USA, its Oregon-based affiliate. Willowood USA and Willowood LLC contract with third parties to formulate azoxystrobin into Willowood's generic end-use fungicide products, and market and sell azoxystrobin and those end-use products in the United States. Shortly before the expiration of the Compound Patents, Willowood filed applications with the Environmental Protection Agency ("EPA") to register its Azoxy 2SC and AzoxyProp Xtra generic products, which correspond in composition and labeling to Syngenta's QUADRIS® and QUILT XCEL® fungicides, respectively. J.A. 278, 714; Appellant's Br. 19.

         Syngenta asserted in its suit that Willowood's Azoxy 2SC and AzoxyProp Xtra products infringed claims 1-4 and 12-14 of the '076 patent, claims 1-3, 5, and 7 of the '256 patent, claims 6 and 12-14 of the '138 patent, and claims 1, 3-5, and 9-10 of the '761 patent. J.A. 1617-1619, 1627. Syngenta also asserted that Willowood infringed Syngenta's registered copyrights in its QUADRIS®and QUILT XCEL® labels by copying those labels for Willowood's Azoxy 2SC and AzoxyProp Xtra product labels. J.A. 289-91.

         A. Pre-Trial Motions

         On October 31, 2016, both parties filed motions for summary judgment. Syngenta moved for summary judgment that all asserted claims of the four patents were infringed by Willowood. Willowood cross-moved for summary judgment, seeking dismissal of Syngenta's copyright claims and its claim of infringement of the '761 patent.

         1. Patent Infringement Claims

         The district court granted summary judgment against Willowood USA for direct infringement of the Compound Patents on the basis of Willowood's concession that Wil-lowood USA imported five kilograms of azoxystrobin into the United States in 2013, prior to the Compound Patents' expiration. Syngenta Crop Prot., LLC v. Willowood, LLC, No. 1:15-CV-274, 2017 WL 1133378, at *2 (M.D. N.C. Mar. 24, 2017) ("Summary Judgment Order"); see also J.A. 1617-18. The district court also granted summary judgment against Willowood LLC for induced infringement of the Compound Patents on the basis of Willowood's concession that Willowood LLC contributed to and induced the formulation and testing of Willowood's Azoxy 2SC and AzoxyProp Xtra products by third parties using the same imported five kilograms of azoxystrobin. Summary Judgment Order, 2017 WL 1133378, at *2-3; see also J.A. 1618. The district court, however, denied summary judgment against Willowood China for direct infringement of the Compound Patents. Summary Judgment Order, 2017 WL 1133378, at *2. The district court found a genuine dispute of material fact as to whether Willowood China's sale of five kilograms of azoxystrobin to Willowood USA took place in China or within the United States as required under 35 U.S.C. § 271(a). Id.

         The district court next denied summary judgment as to infringement of the '138 patent. Id. at *5. The district court found that it was undisputed that Willowood China purchases azoxystrobin from its Chinese supplier, Yang-cheng Tai He Chemicals Corp. ("Tai He"), and sells it to Willowood USA, which then imports the azoxystrobin into the United States. Id. at *4; see also J.A. 1619. The district court found that it was also undisputed that the azoxystrobin in question was manufactured in China by performing both steps of the process claimed in the '138 patent. Summary Judgment Order, 2017 WL 1133378, at *4. Relying on our decision in Akamai Technologies., Inc. v. Limelight Networks, Inc., the district court determined that 35 U.S.C. § 271(g) requires that all steps of a claimed process be performed by or attributable to a single entity. Id. at *5 (citing 797 F.3d 1020, 1022 (Fed. Cir. 2015)). On this basis, the district court found a genuine dispute of material fact as to whether Tai He performed both steps of the process claimed by the '138 patent during its manufacture of azoxystrobin or whether Willowood directed Tai He and others to practice the claimed process. Id. at *4-5.

         With respect to the '761 patent, both parties agreed that the issue of infringement turned on whether the azoxystrobin that Willowood China purchases and Willowood USA imports was manufactured using DABCO at concentrations within the claimed range of 0.1 and 2 mol %. Summary Judgment Order, 2017 WL 1133378, at *6; J.A. 1627. The district court denied summary judgment on this issue, finding a genuine dispute of material fact as to whether Willowood's suppliers used DABCO within the claimed range in the manufacturing process. See Summary Judgment Order, 2017 WL 1133378, at *7.

         The district court next granted Syngenta's motion to shift the burden of proof to Willowood under 35 U.S.C. § 295 on the claim of infringement of the '761 patent. The district court found that Syngenta demonstrated a substantial likelihood of infringement, rejecting Willowood's argument that neither Tai He nor any of its intermediaries manufacture azoxystrobin using DABCO within the claimed range. Id. at *7-8. The district court credited the testimony of Syngenta's expert, who testified that it would not be commercially reasonable to manufacture azoxystrobin using DABCO outside the claimed range. Id. at *8. The district court noted that Willowood's expert did not rebut this testimony, and Willowood's only rebuttal witness, the president of Tai He, had "credibility issues." Id. The district court also determined that Willowood did not produce any manufacturing records demonstrating that DABCO was not used or describing what process was used instead. Id. at *8, *10. The district court further found that Syngenta made reasonable efforts to discover Tai He's actual manufacturing process, but was unsuccessful because of Willowood's failure to cooperate. Id. at *9- 10. Finding both elements of § 295 satisfied, the district court shifted the burden to Willowood to prove non-infringement of the '761 patent. Id. at *11.

         2. Copyright Infringement Claims

         In its cross-motion for summary judgment, Willowood argued that Syngenta's copyright claims should be dismissed because the Federal Insecticide, Fungicide, and Rodenticide Act ("FIFRA") precludes copyright protection for Syngenta's labels. J.A. 730-37. Willowood asserted that FIFRA requires generic fungicide products to have labels that are "identical or substantially similar" to brand-name labels. J.A. 730-31. Willowood further contended that because much of its labels' text comprises instructions and warnings mandated by FIFRA and EPA regulations, and only limited means of expressing such information exist, extending copyright protection to Syngenta's labels "would make subsequent labeling practically impossible." J.A. 731 & n.14, 733-35 (citing SmithKline Beecham Consumer Healthcare, L.P. v. Watson Pharm. Inc., 211 F.3d 21, 23 (2d Cir. 2000)).

         Willowood also argued that any language that is not required by the EPA is nonetheless uncopyrightable because it is so "basic" and "commonplace in the industry," that it merges with the ideas the language is meant to convey. J.A. 732. In the alternative, Willowood argued that its use of some of the ...


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