Case 1:17-cv UNA Document 1 Filed 05/22/17 Page 1 of 11 PageID #: 1 IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF DELAWARE

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1 Case 1:17-cv UNA Document 1 Filed 05/22/17 Page 1 of 11 PageID #: 1 IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF DELAWARE BAYER INTELLECTUAL PROPERTY GMBH, BAYER ANIMAL HEALTH GMBH, and BAYER HEALTHCARE LLC, v. CAP IM SUPPLY, INC., Plaintiffs, Defendant. C.A. No. JURY TRIAL DEMANDED COMPLAINT FOR PATENT INFRINGEMENT Plaintiffs Bayer Intellectual Property GmbH, Bayer Animal Health GmbH, and Bayer HealthCare LLC (collectively, Bayer or Plaintiffs, for their Complaint against Defendant CAP IM Supply, Inc., allege as follows: Nature of the Action 1. This is an action for infringement of United States Patent No. 7,728,011 ( the 011 Patent under the Patent Laws of the United States, 35 U.S.C. 1 et seq. The 011 Patent covers Bayer s K9 Advantix II product for the prevention and treatment of ticks, fleas, and mosquitoes for dogs. The Parties 2. Bayer Intellectual Property GmbH ( Bayer IP is a corporation organized and existing under the laws of Germany, with a place of business at Alfred-Nobel-Strasse 10, Monheim, Germany. Bayer IP is a wholly owned subsidiary of Bayer AG. 3. Bayer HealthCare LLC ( Bayer HealthCare is a limited liability company organized and existing under the laws of the State of Delaware, with its principal place of business at 100 Bayer Blvd, Whippany, NJ Bayer HealthCare is also a wholly owned

2 Case 1:17-cv UNA Document 1 Filed 05/22/17 Page 2 of 11 PageID #: 2 subsidiary of Bayer AG, an entity formed under the laws of, and based in, Germany. Bayer Animal Health ( Bayer AH is a division of Bayer HealthCare with its principal place of business at Shawnee Mission Parkway, Shawnee, Kansas. The business of Bayer HealthCare relevant to this action is operated by Bayer AH. 4. Bayer Animal Health GmbH is a corporation organized and existing under the laws of Germany, with a place of business at Kaiser-Wilhelm-Allee 50, Leverkusen, Germany. Bayer Animal Health GmbH is also a wholly owned subsidiary of Bayer AG. Bayer Animal Health GmbH, Bayer HealthCare, and Bayer IP are affiliated companies under common control. 5. On information and belief, CAP IM Supply, Inc. ( CAP IM is a corporation organized and existing under the laws of the State of Delaware with its principal place of business at 303 Perimeter Center North, Suite 300, Atlanta, Georgia Jurisdiction and Venue 6. This action arises under the patent laws of the United States, 35 U.S.C. 1, et seq. This Court has subject matter jurisdiction over the action under 28 U.S.C and 1338(a. 7. This Court has jurisdiction over CAP IM Supply as it is incorporated under the laws of the State of Delaware. 8. Venue is proper in this judicial district under 28 U.S.C. 1400(b. Background 9. On June 1, 2010, the 011 Patent, titled Dermally Applicable Liquid Formulations for Controlling Parasitic Insects on Animals, was duly and legally issued with four claims by the United States Patent and Trademark Office ( USPTO to inventors Kirkor Sirinyan, Hubert Dorn, Martin Gilges, and Olaf Hansen. The 011 Patent was reexamined and on January 24, 2013, the USPTO issued a Reexamination Certificate confirming the patentability 2

3 Case 1:17-cv UNA Document 1 Filed 05/22/17 Page 3 of 11 PageID #: 3 of claims 1-4 and adding new claims 5 and 6. A true and correct copy of the 011 Patent with the Reexamination Certificate is attached to this complaint as Exhibit A. 10. The 011 Patent claims novel skin-friendly dermally applicable liquid formulations for the dermal control of parasitic insects on animals. As set forth in independent Claim 1, the formulations of the 011 Patent comprise (i the pesticide permethrin, in a concentration of about 35-60% by weight, (ii the pesticide imidacloprid (1-[6-chloro-3- pyridinylmethyl]-n-nitro-2-imidazolidinium or an analog of imidacloprid in a concentration of about % by weight, and (iii an organic solvent N-methylpyrrolidone ( NMP in a concentration of about % by weight. Claim 1 further specifies that the composition may also contain small amounts of water (0 to about 5% by weight, a phenolic antioxidant (0 to about 0.5% by weight, and an organic acid (0 to about 0.5% by weight. Dependent Claim 2 specifies that the composition contain about % of a co-solvent. (Exhibit A at columns The comprising language in the claim preamble contemplates that the composition may contain additional components, such as further active ingredients. One such exemplified compound is pyriproxyfen. (Exhibit A at 3: The formulations of the 011 Patent have excellent storage stability, are easily applied, and are well tolerated by animals. 11. Bayer IP is the owner, by assignment registered in the USPTO, of the entire right, title, and interest in the 011 Patent. Bayer Animal Health GmbH is the exclusive licensee of Bayer IP under the 011 Patent. Bayer HealthCare is the exclusive sub-licensee of Bayer Animal Health GmbH under the 011 Patent. 12. Bayer HealthCare, through Bayer AH, is engaged in the research, development, and marketing of, inter alia, a variety of products that kill pests that afflict animals, including companion animals. Certain of these products contain pesticides that have been registered and 3

4 Case 1:17-cv UNA Document 1 Filed 05/22/17 Page 4 of 11 PageID #: 4 approved for sale by the U.S. Environmental Protection Agency ( EPA. One such product manufactured and sold in the U.S. by Bayer AH is K9 Advantix II topical tick, flea, and mosquito treatment, which contains the registered pesticides imidacloprid, permethrin, and pyriproxyfen and is one of the leading products in the U.S. for the prevention and treatment of ticks, fleas, and mosquitoes on dogs. The K9 Advantix II product is exclusively marketed in the U.S. by Bayer AH. 13. The K9 Advantix II product is covered by at least one claim of the 011 Patent. Bayer has complied with the marking requirements of 35 U.S.C. 287 by listing the 011 Patent on the packaging of the K9 Advantix II product sold in the U.S. 14. The K9 Advantix II product is registered by the EPA pursuant to Section 3 of the Federal Insecticide, Fungicide, and Rodenticide Act ( FIFRA, 7 U.S.C. 136 et seq. Bayer HealthCare holds the following EPA registrations authorizing sale and distribution of K9 Advantix II in the U.S.: Registration Nos , , , and As part of the EPA s registration process, Bayer HealthCare incurred significant costs in conducting the studies and collecting data to fulfill the statutory requirements under FIFRA in support of its application to the EPA to register the K9 Advantix II product. 16. Defendant currently sells and offer to sell in the United States, either directly or through distributors, pesticide products containing imidacloprid, permethrin, and pyriproxyfen, with NMP solvent, a co-solvent, and small amounts of a phenolic antioxidant and an organic acid for the treatment of ticks, fleas, and mosquitoes on dogs under the tradenames Advecta 3, PetLock MAX, ParaDefense TM ADVANCED, and Provecta TM ADVANCED. These products compete directly with Bayer s K9 Advantix II product and infringe the 011 Patent. 4

5 Case 1:17-cv UNA Document 1 Filed 05/22/17 Page 5 of 11 PageID #: On information and belief, Defendant CAP IM manufactures in the United States or imports into the United States the products, or compositions for the products, that are sold as Advecta TM 3, PetLock MAX, ParaDefense TM ADVANCED, and Provecta TM ADVANCED. 18. On December 3, 2015, CAP IM applied to the EPA for registration under Section 3 of FIFRA for approval to sell products containing imidacloprid, permethrin, and pyriproxyfen as topical treatments for fleas and ticks on dogs. On September 7, 2016, CAP IM notified Bayer HealthCare of its reliance under FIFRA section 3(c(1(F on studies submitted by Bayer HealthCare to the EPA to support CAP IM s application for a single end-use registration for a companion animal product containing a combination of the active pesticide ingredients imidacloprid, permethrin, and pyriproxyfen. 19. In a letter dated September 15, 2016, Bayer AH advised CAP IM of the 011 Patent. 20. On September 26, 2016, the EPA granted CAP IM a conditional registration, EPA Reg. No , in accordance with FIFRA section 3(c(7(A for its pesticide product for dogs containing imidacloprid, permethrin, and pyriproxyfen. On information and belief, the EPA s approval of CAP IM s registration relied on animal safety and efficacy data previously generated and submitted by Bayer HealthCare in support of the Bayer registrations. CAP IM has not paid Bayer HealthCare for relying on its data. A copy of this registration certificate is attached as Exhibit B. 21. Under FIFRA, a registrant may distribute or sell its registered products under the name of another person or entity when certain conditions have been satisfied. Such distribution is termed a supplemental distribution. On information and belief, the products Advecta 3 and PetLock MAX are distributed by TruRx, LLC ( TruRx and PetIQ, LLC ( PetIQ as 5

6 Case 1:17-cv UNA Document 1 Filed 05/22/17 Page 6 of 11 PageID #: 6 supplemental distributors of CAP IM. On information and belief, TruRx and PetIQ are affiliated companies. Advecta3 and PetLock MAX are trademarks owned by TruRx and PetIQ. ParaDefense and Provecta are trademarks of CAP IM. CAP IM s EPA Registration No (Exhibit B lists Advecta, PetLock, and ParaDefense as brand names for its registered product. 22. The Advecta 3 product is made available by Defendant, and on information and belief specifically by PetIQ, for purchase throughout the United States at retail stores such as Target, Menards, and Walmart and is advertised, via the internet for example, as follows: Advecta 3 contains the same active ingredients used in Bayer K9 Advantix II. See e.g., website page: A copy of each website page cited in this paragraph is attached to this Complaint in Exhibit C. The product label and packaging for the Advecta 3 products also state that Advecta 3 Contains the Same Active Ingredients Used in K9 Advantix II. 23. The PetLock MAX product is made available by Defendant, and on information and belief specifically by TruRx, for purchase throughout the United States at pet specialty stores, such as PetSmart. It is advertised, via the internet for example, as follows: PetLock MAX contains the same active ingredients used in Bayer K9 Advantix II. See e.g., website page: A copy of each website page cited in this paragraph is attached to this Complaint in Exhibit C. The product label and packaging for the PetLock MAX products also state that PetLock MAX Contains the Same Active Ingredients Used in K9 Advantix II. 24. The ParaDefense TM ADVANCED product is made available throughout the United States by Defendant CAP IM. On information and belief, CAP IM sells 6

7 Case 1:17-cv UNA Document 1 Filed 05/22/17 Page 7 of 11 PageID #: 7 ParaDefense TM ADVANCED to veterinary clinics through distributors. Internet advertising for the product states that it Contains same active ingredients as found in Bayer K9 Advantix II. See website page A copy of each website page cited in this paragraph is attached to this Complaint in Exhibit C. The product label and packaging for the ParaDefense TM Advanced products also state that the products Contain the Same Active Ingredients Used in K9 Advantix II. 25. The Provecta TM ADVANCED product is made available throughout the United States by Defendant CAP IM. On information and belief, CAP IM sells Provecta TM ADVANCED to veterinary clinics through distributors. Internet advertising for the product states that it Contains same active ingredients as found in Bayer K9 Advantix II. See website pages A copy of each website page cited in this paragraph is attached to this Complaint in Exhibit C. The Safety Data Sheet for this product lists CAP IM as the product supplier under the CAP IM EPA Reg. No A copy of the Safety Data Sheet is attached to this Complaint in Exhibit D. 26. The CAP IM EPA Registration under which Defendant s products are sold indicates that the products contain 8.8% by weight imidacloprid, 44.0% by weight permethrin, and 0.44% pyriproxyfen. (Exhibit B at 5 of 25, which are within the specified ranges of claim 1 and all other claims of the 011 Patent. 27. Analysis of a sample of the Advecta 3 product (Lot #6L010A from a Target store in Overland Park, Kansas, which sample is representative of the products accused herein as sold under EPA Registration , provides the composition in the below table. 7

8 Case 1:17-cv UNA Document 1 Filed 05/22/17 Page 8 of 11 PageID #: 8 Advecta 3 Permethrin 45.02%* Imidacloprid 8.80% Pyriproxyfen 0.46% NMP 18.88% DMSO** 17.47% Miglyol 4.31% Water 0.39% Butylated hydroxytoluene 0.11% Citric Acid 0.03% *Percentages by weight **Dimethyl sulfoxide (solvent 28. The concentration of imidacloprid, permethrin, and pyriproxyfen determined by the analysis is consistent with the concentrations for these active ingredients specified in Defendant CAP IM s EPA Reg. No According to EPA Reg and this analysis, the Advecta 3 accused product contains: permethrin in an amount within the range of element a. in Claim 1; imidacloprid in an amount within the range of element b. of Claim 1; water in an amount within the range of element d. in Claim 1; butylated hydroxytoluene in an amount within the range of element e. in Claim 1 for phenolic antioxidants. The 011 Patent identifies butylated hydroxytoluene as a phenolic antioxidant. (Exhibit A at 7: citric acid in an amount within the range of element f. in Claim 1 for organic acids. The 011 Patent identifies citric acid as a preferred organic acid (Exhibit A at 7:

9 Case 1:17-cv UNA Document 1 Filed 05/22/17 Page 9 of 11 PageID #: As to element c. of Claim 1, the Advecta 3 product contains 18.88% NMP (the solvent specified in element c., but also contains 17.47% of dimethyl sulfoxide DMSO. The Advecta 3 product contains a total of 36.35% by weight of this mixture of NMP and DMSO. 30. DMSO and NMP are insubstantially different from each other and equivalent to each other in properties that are relevant to performance as the major solvent in the compositions of claim 1 and in Defendant s accused products. The mixture of NMP and DMSO in Defendant s accused products is insubstantially different from an equal amount of NMP as claimed. The amount of this mixture in Defendant s accused products is within the range specified for NMP in Claim 1. Any differences between the mixture of DMSO and NMP in Defendant s products and the claimed NMP in properties relevant to the intended parasiticidal action of the compositions are insubstantial. 31. As demonstrated from the above analysis, the Advecta 3 product contains a miglyol compound in an amount within the range specified for co-solvents in dependent claim 2 of the 011 Patent. The 011 Patent identifies miglyol compounds as among preferred cosolvents. (Exhibit A at 7: Claim for Relief -- Infringement of the 011 Patent 32. Bayer incorporates each of the preceding paragraphs as if fully set forth herein. 33. Defendant has infringed and continues to infringe the 011 Patent by importing, making, offering to sell, and selling in the United States products that contain imidacloprid, permethrin, and NMP and equivalent organic solvents and that are within at least claims 1 and 2 of the 011 Patent, including the Advecta 3, PetLock MAX, ParaDefense TM ADVANCED, and Provecta TM ADVANCED products. 9

10 Case 1:17-cv UNA Document 1 Filed 05/22/17 Page 10 of 11 PageID #: As set forth above, in a letter dated September 15, 2016, in response to CAP IM s notification to Bayer of its intent to rely on Bayer Registration data, Bayer AH advised CAP IM of the 011 Patent. Defendant CAP IM is acting with knowledge of the 011 Patent and without a reasonable basis for believing that it would not be infringe the 011 Patent, making its infringement willful. 35. As a direct result of Defendant s infringing acts, Bayer has suffered and will continue to suffer damage and irreparable harm. 36. Unless Defendant and those acting in active concert with Defendant are enjoined from infringing the 011 Patent, Bayer will suffer irreparable injury for which damages are an inadequate remedy. PRAYER FOR RELIEF Bayer respectfully requests the following relief from this Court: (a (b Judgment that CAP IM has infringed one or more claims of the 011 Patent; Entry of a preliminary and permanent injunction against Defendant CAP IM and those in privity with it and those acting in concert with it from further infringement of the 011 Patent such as through sale of the Advecta 3, PetLock MAX, ParaDefense TM ADVANCED, and Provecta TM ADVANCED products; (c An award to Bayer of damages adequate to compensate it for all infringement occurring through the date of judgment, with prejudgment interest, and for any supplemental damages as appropriate and post-judgment interest after that date; (d (e An award of enhanced damages for willful infringement as permitted by law; A finding that this is an exceptional case under 35 U.S.C. 285 and an award of reasonable attorneys fees and costs; and (f An award of such other and further relief as the Court may deem just and proper. 10

11 Case 1:17-cv UNA Document 1 Filed 05/22/17 Page 11 of 11 PageID #: 11 DEMAND FOR TRIAL BY JURY Pursuant to Federal Rule of Civil Procedure 38(b, Bayer hereby demands a trial by jury of all issues so triable. MORRIS, NICHOLS, ARSHT & TUNNELL LLP /s/ Jack B. Blumenfeld Jack B. Blumenfeld (#1014 Megan Dellinger (# North Market Street P.O. Box 1347 Wilmington, DE ( jblumenfeld@mnat.com mdellinger@mnat.com OF COUNSEL: Attorneys for Plaintiffs Gary H. Levin BAKERHOSTETLER LLP Cira Centre, 12 th Floor 2929 Arch Street Philadelphia, PA ( Irene Hudson BAKERHOSTETLER LLP 45 Rockefeller Plaza New York, NY ( Krista Lynch BAKERHOSTETLER LLP 1050 Connecticut Avenue N.W. Suite 1100 Washington, DC ( May 22,