Case 1:99-mc Document 262 Filed 06/08/11 Page 1 of 17 PageID #: IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF DELAWARE COMPLAINT

Transcription

1 Case 1:99-mc Document 262 Filed 06/08/11 Page 1 of 17 PageID #: IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF DELAWARE TESSENDERLO KERLEY, INC., Plaintiff, v. C.A. No. PURFRESH, INC. DEMAND FOR JURY TRIAL Defendant. COMPLAINT Plaintiff Tessenderlo Kerley, Inc. ( TKI ), by and through its undersigned attorneys, files this Complaint against defendant Purfresh, Inc. ( Purfresh ). In support of its claims, TKI states as follows: Introduction 1. This action is brought under the Patent Act, 35 U.S.C. 271 et seq., the Lanham Act, 15 U.S.C et seq., and the unfair competition laws of the State of California. 2. TKI seeks injunctive and compensatory damages for Purfresh s willful infringement of TKI s United States Patent Nos. 6,027,740 ( the '740 patent ), 6,110,867 ( the '867 patent ), and 6,464,995 ( the '995 patent ). 3. TKI also seeks injunctive and compensatory damages for Purfresh s willful, false, and deceptive advertising. 4. TKI and Purfresh are direct competitors in the market for the manufacture and sale of crop protectants.

2 Case 1:99-mc Document 262 Filed 06/08/11 Page 2 of 17 PageID #: Purfresh s patent infringement and false claims have resulted in substantial harm to TKI in the form of lost sales, lost profits, and damage to its reputation and goodwill with its customers. Injunctive relief from this Court is necessary to prevent further harm to TKI and further consumer deception. The Parties 6. TKI is a Delaware corporation having its principal place of business at 2255 North 44th Street, Phoenix, Arizona Upon information and belief, defendant Purfresh is a Delaware corporation, having a place of business at Bayside Parkway, Fremont, California Defendant Purfresh markets and distributes crop protectants throughout the United States, including California, in direct competition with TKI. Jurisdiction and Venue 9. This is an action for patent infringement arising under the Patent Act, 35 U.S.C. 271 et seq., the Lanham Act, 15 U.S.C et seq., and the unfair competition laws of the State of California. 10. This Court has subject matter jurisdiction over this action under 28 U.S.C. 1338(a) and (b), which respectively confer jurisdiction over cases of patent and federal trademark infringement and unfair competition, and under 28 U.S.C. 1331, which confers federal question jurisdiction in general. 11. This Court has jurisdiction over the subject matter of this action pursuant to 15 U.S.C in that this action arises in part under 15 U.S.C

3 Case 1:99-mc Document 262 Filed 06/08/11 Page 3 of 17 PageID #: Pursuant to 28 U.S.C. 1367, this Court has jurisdiction over the unfair competition count under the laws of the State of California in that this count is so related to the other counts pleaded that it forms part of the same case or controversy. 13. Venue is proper in this district pursuant to 28 U.S.C and Facts TKI s Patents 14. The '740 patent, entitled Method for Protecting Surfaces from Arthropod Infestation, issued on February 22, 2000, in the name of inventors Gary J. Puterka, Dennis G. Sekutowski, and David Michael Glenn. TKI enjoys all exclusive rights and privileges with respect to the '740 patent in the United States, including the right to enforce the '740 patent in its own name. A copy of the '740 patent is attached hereto as Exhibit The subject matter of the '740 patent relates to a method for protecting surfaces from arthropod infestation, which comprises applying to said surface an effective amount of a slurry comprising one or more particulate materials selected from the group consisting of calcined kaolins, hydrophobic calcined kaolins, hydrophobic calcium carbonates, calcium carbonates and mixtures thereof, said particulate materials being finely divided, wherein the surface is selected from the group consisting of fruits, vegetables, trees, flowers, grasses, roots and landscape and ornamental plants and said particulate materials as applied allow for the exchange of gases on the surface. 16. The '867 patent, entitled Method for Providing Enhanced Photosynthesis, issued on August 29, 2000, in the name of inventors David Michael Glenn, Dennis G. Sekutowski, and Gary J. Puterka. TKI enjoys all exclusive rights and privileges with 3

4 Case 1:99-mc Document 262 Filed 06/08/11 Page 4 of 17 PageID #: respect to the '867 patent in the United States, including the right to enforce the '867 patent in its own name. A copy of the '867 patent is attached hereto as Exhibit The '867 patent was the subject of reexamination proceedings, Application Serial No. 90/006,658, before the United States Patent and Trademark Office ( USPTO ). A reexamination certificate was issued by the USPTO on March 7, The subject matter of the '867 patent relates to a method for enhancing photosynthesis of a horticultural crop by increasing carbon dioxide assimilation of said horticultural crop, which comprises applying to the surface of said horticultural crop an effective amount of one or more highly reflective particulate materials, said particulate materials being finely divided, and wherein the particles as applied allow for the exchange of gases on the surface of said crop and the finely divided particulate materials have a median individual particle size below about 3 microns. 19. The '995 patent, entitled Treated Horticultural Substrates, issued on October 15, 2002, in the name of inventors Dennis G. Sekutowski, and Gary J. Puterka, and David Michael Glenn. TKI enjoys all exclusive rights and privileges with respect to the '995 patent in the United States, including the right to enforce the '995 patent in its own name. A copy of the '995 patent is attached hereto as Exhibit The subject matter of the '995 patent relates to a method for enhancing the horticultural effect of horticultural substrates selected from the group consisting of fruits, vegetables, trees, flowers, grasses, roots, and landscape and ornamental plants, which comprises applying a slurry comprising water, a surfactant, and one or more particulate materials, selected from the group consisting of calcium carbonate, hydrous kaolin, calcined kaolin and mixtures thereof, to the surface of said substrate to form a membrane comprised of one or more particulate 4

5 Case 1:99-mc Document 262 Filed 06/08/11 Page 5 of 17 PageID #: layers and the surfactant, said layers comprising one or more particulate materials, said particulate materials being finely divided, and wherein said membrane allows for the exchange of gases on the surface of said substrate. Crop Protectant Products 21. TKI manufactures and sells a kaolin-based crop protectant product under the brand name Surround, for use as a broad spectrum agricultural crop protectant for controlling damage from various insect and disease pests, a growth enhancer, and as a protectant against sunburn and heat stress. See Exhibit 4 (Surround label). TKI has the right to exclude from the marketplace any competing product for which its application infringes at least claim 1 of the '740 patent, claim 1 of the '867 patent, and/or claim 23 of the '995 patent. 22. The Eclipse crop protectant product has been distributed by defendant Purfresh under its current Purfresh corporate name and its former corporate name Novazone, Inc. See Exhibit 5 (Novazone Eclipse brochure); Exhibit 6 ( Eclipse from Purfresh brochure DS- EC-Overview-1008), available at DS_EclipseOverview_1008.pdf (last visited June 8, 2011). 23. The Purshade and Purshade-O crop protectant products are distributed by defendant Purfresh. See Exhibit 7 (Purshade brochure FLY-PURSHD ), available at (last visited June 8, 2011); Exhibit 8 (Purshade-O brochure DS-PURO-OVER-0110), available at (last visited June 8, 2011). 5

6 Case 1:99-mc Document 262 Filed 06/08/11 Page 6 of 17 PageID #: Purfresh s Infringement of TKI s Patents 24. Upon information and belief, application of the Eclipse product infringes at least claim 1 of the '867 patent and claim 23 of the '995 patent. Promotional literature for the Eclipse product describes it as: (a) a calcium carbonate and boron colloidal liquid having submicron particles; (b) effective in the control of sunburn or heat stress; and (c) enabling natural coloring and photosynthesis. See Exhibits Upon information and belief, application of the Purshade and Purshade-O products infringes at least claim 1 of the '740 patent, claim 1 of the '867 patent, and claim 23 of the '995 patent. Promotional literature including brochures, advertising, labels, and press releases, describe the Purshade and/or Purshade-O products as: (a) a calcium carbonate-based plant protectant product; (b) providing superior protection against the damaging effects of solar stress; (c) extending the duration of photosynthetic activity during the day; and (d) enabling plants to be healthier, more productive, and better equipped to resist attack from diseases and insects. See Exhibit 7; Exhibit 8; Exhibit 9 ( Purshade: Superior Solar Protection ), available at (last visited June 8, 2011); Exhibit 10 ( Purshade-O: Solar Protection for Organic Production ), available at (last visited June 8, 2011); Exhibit 11 ( Purshade O Overview ), available at (last visited June 8, 2011); Exhibit 12 ( Improving Water Use Efficiency ), available at (last visited June 8, 2011); Exhibit 13 (Purshade brochure BR-PURSHD-1209), available at (last visited 6

7 Case 1:99-mc Document 262 Filed 06/08/11 Page 7 of 17 PageID #: June 8, 2011); Exhibit 14 (Purshade brochure BR-PURSHD-1008), available at (last visited June 8, 2011); Exhibit 15 (Purfresh press release dated January 26, 2010), available at (last visited June 8, 2011); Exhibit 16 (Purfresh press release dated July 29, 2008), available at (last visited June 8, 2011); Exhibit 17 ( Purshade-O: Maximizing the Value of Every Acre with Superior Solar Protection ), available at (last visited June 8, 2011); Exhibit 18 ( Purshade: Maximizing the Value of Every Acre with Superior Solar Protection ), available at (last visited June 8, 2011); Exhibit 19 (Purshade-O Label Nos (0410) and (0410)), available at (last visited June 8, 2011); Exhibit 20 (Purshade Label Nos (0209) and (0209)), available at (last visited June 8, 2011); see also Exhibit 21 (Purfresh presentation dated January 2010); (last visited June 8, 2011). Purfresh s False and Misleading Statements 26. Upon information and belief, Purfresh made and continues to make false and misleading statements in connection with the Eclipse product and the Purshade and Purshade-O products. 27. A Novazone Eclipse brochure and an Eclipse from Purfresh brochure each provide a chart showing an SPF rating of 42 for the Eclipse product compared to an SPF 7

8 Case 1:99-mc Document 262 Filed 06/08/11 Page 8 of 17 PageID #: rating of 4 for Kaolin Clay. See Exhibits 5-6. In addition, the Eclipse from Purfresh brochure (Exhibit 6) states that Eclipse provides [an] SPF rating 10 times that of competitive products. 28. The Purshade and Purshade-O product brochures describe those products as: top-performing organic plant protectant for preventing the damaging effects of solar and water stress ; leading the industry in solar protection ; no other formulation compares with Purshade s ease of use or effectiveness at reducing sun damage and promoting plant health ; and reflect 90-98% of harmful UV radiation, without blocking photosynthetic light. The brochures also provide charts purporting that the Purshade product has an SPF rating of 42 or 45 and a superior mineral reflectance spectrum compared to Kaolin as used in Surround. In one of the brochures, Purfresh specifically purports that Surround has an SPF rating under 10. See, e.g., Exhibits 7, 8, 11, 13, 14, 17, 18, and Purfresh s SPF-related and reflectance claims have been and are false and misleading because they suggest that the Eclipse, Purshade, and Purshade-O products are superior to any Kaolin-based product, including Surround, when in fact, Surround exhibits superior reflectance and sunburn protection compared to the Eclipse and Purshade products. This is because Surround uses highly engineered calcined kaolin particles. See, e.g., Exhibit 22 (Surround Crop Protectant brochure); Exhibit 23 (Surround Crop Protectant Competitive Comparison brochure); Exhibit 24 (Surround Crop Protectant Plant Health brochure). 30. Purfresh s SPF-related claims are also false and misleading because Purfresh improperly uses a standard that is applicable to humans but not to plants or produce. The FDA defines SPF as a measure of how much solar energy (UV radiation) is required to produce sunburn on protected skin (i.e., in the presence of sunscreen) relative to the amount of solar energy required to produce sunburn on unprotected skin. See Exhibit 25 (Sunburn 8

9 Case 1:99-mc Document 262 Filed 06/08/11 Page 9 of 17 PageID #: Protection Factor (SPF)), available at (last visited June 8, 2011). There is no SPF test for plants or produce. 31. Upon information and belief, Purfresh s reflectance claims are also false and misleading because the Purshade and Purshade-O products do not reflect 90-98% of harmful UV radiation as claimed by Purfresh. though fully set forth herein. COUNT I Infringement of U.S. Patent 6,027, Paragraphs 1 through 31 of the complaint are incorporated by reference as 33. All claims of the '740 patent are presumed valid and enforceable. 34. On information and belief, defendant Purfresh has contributorily infringed and/or actively induced the infringement under 35 U.S.C. 271, and continues to contributorily infringe and/or actively induce the infringement under 35 U.S.C. 271, of at least claim 1 of the '740 patent by (a) making, having made, selling, and/or offering for sale, (b) authorizing others to make, have made, sell, and/or offer for sale, and/or (c) causing others to use the Purshade products. 35. Defendant Purfresh s infringement has been committed with knowledge of the '740 patent and has been intentional, willful and deliberate. 36. As a result of defendant Purfresh s infringement of the '740 patent, TKI has been damaged and will be further damaged, and is entitled to be compensated for such damages, pursuant to 35 U.S.C. 284, in an amount to be determined at trial. 9

10 Case 1:99-mc Document 262 Filed 06/08/11 Page 10 of 17 PageID #: As a result of defendant Purfresh s infringement of the '740 patent, TKI has suffered and will continue to suffer irreparable harm, for which TKI has no adequate remedy at law, unless the Court enjoins such infringing activities pursuant to 35 U.S.C though fully set forth herein. COUNT II Infringement of U.S. Patent 6,110, Paragraphs 1 through 37 of the complaint are incorporated by reference as 39. All claims of the '867 patent are presumed valid and enforceable. 40. On information and belief, defendant Purfresh has contributorily infringed and/or actively induced the infringement under 35 U.S.C. 271, and continues to contributorily infringe and/or actively induce the infringement under 35 U.S.C. 271, of at least claim 1 of the '867 patent by (a) making, having made, selling, and/or offering for sale, (b) authorizing others to make, have made, sell, and/or offer for sale, and/or (c) causing others to use the Eclipse and Purshade products. 41. Defendant Purfresh s infringement has been committed with knowledge of the '867 patents and has been intentional, willful and deliberate. 42. As a result of defendant Purfresh s infringement of the '867 patent, TKI has been damaged and will be further damaged, and is entitled to be compensated for such damages, pursuant to 35 U.S.C. 284, in an amount to be determined at trial. 43. As a result of defendant Purfresh s infringement of the '867 patent, TKI has suffered and will continue to suffer irreparable harm, for which TKI has no adequate remedy at law, unless the Court enjoins such infringing activities pursuant to 35 U.S.C

11 Case 1:99-mc Document 262 Filed 06/08/11 Page 11 of 17 PageID #: though fully set forth herein. COUNT III Infringement of U.S. Patent 6,464, Paragraphs 1 through 43 of the complaint are incorporated by reference as 45. All claims of the '995 patent are presumed valid and enforceable. 46. On information and belief, defendant Purfresh has contributorily infringed and/or actively induced the infringement under 35 U.S.C. 271, and continues to contributorily infringe and/or actively induce the infringement under 35 U.S.C. 271, of at least claim 23 of the '995 patent by (a) making, having made, selling, and/or offering for sale, (b) authorizing others to make, have made, sell, and/or offer for sale, and/or (c) causing others to use the Eclipse and Purshade products. 47. Defendant Purfresh s infringement has been committed with knowledge of the '995 patents and has been intentional, willful and deliberate. 48. As a result of defendant Purfresh s infringement of the '995 patent, TKI has been damaged and will be further damaged, and is entitled to be compensated for such damages, pursuant to 35 U.S.C. 284, in an amount to be determined at trial. 49. As a result of defendant Purfresh s infringement of the '995 patent, TKI has suffered and will continue to suffer irreparable harm, for which TKI has no adequate remedy at law, unless the Court enjoins such infringing activities pursuant to 35 U.S.C though fully set forth herein. COUNT IV Violation of Section 43(a) of the Lanham Act 50. Paragraphs 1 through 49 of the complaint are incorporated by reference as 11

12 Case 1:99-mc Document 262 Filed 06/08/11 Page 12 of 17 PageID #: Section 43(a)(1)(B) of the Lanham Act, 15 U.S.C. 1125(a)(1)(B), prohibits any false or misleading description of fact, or false or misleading representation of fact which in commercial advertising or promotion, misrepresents the nature, characteristics, [or] qualities of goods, services, or commercial activities. 52. Defendant s SPF-related and reflectance claims are false and misleading because they suggest that the Eclipse and Purshade products are many times superior to any Kaolin-based product, including Surround, when in fact, Surround exhibits superior reflectance and sunburn protection compared to the Eclipse and Purshade products. See, e.g., Exhibit 23 (Surround Competitive Comparison brochure). 53. Defendant s false and misleading claims were made knowingly and intentionally. 54. Defendant s false and misleading claims have deceived, and will continue to deceive, a substantial portion of defendant s current and prospective customers. 55. Defendant s false and misleading claims are material to the purchasing decisions of defendant s current and prospective customers. 56. Defendant s misrepresentations have and likely will continue to cause TKI to suffer damages to its business in the form of lost sales, lost profits, and damage to its reputation and goodwill with its customers. 57. As a result of defendant s intentional, deliberate, and willful misrepresentations, TKI has been injured. Unless defendant Purfresh is enjoined by this Court and ordered to retract and correct their false and misleading claims, defendant s statements will continue to mislead current and prospective customers and cause TKI to suffer a loss of customer 12

13 Case 1:99-mc Document 262 Filed 06/08/11 Page 13 of 17 PageID #: confidence, sales, profits, and goodwill, along with the cost of remedial corrective advertising, much of which loss is, and will be irreparable. COUNT V Unfair Competition Under California Business & Professions Code et seq. though fully set forth herein. 58. Paragraphs 1 through 57 of the complaint are incorporated by reference as 59. Unfair competition under California Business & Professions Code et seq., includes any unlawful, unfair or fraudulent business act or practice and unfair, deceptive, untrue or misleading advertising. 60. The acts and practices of defendant Purfresh as alleged herein constitute unlawful, unfair, and fraudulent business acts and practices within the meaning of California Business & Professions Code et seq. and are being harmed. 61. As a direct and proximate result of defendant s acts, consumers have been 62. Defendant s actions demonstrate an intentional, willful, and bad faith intent to harm TKI s business and the goodwill and reputation of TKI s goods and services. 63. Defendant is causing, and is likely to cause, substantial injury and damage to TKI, and TKI is entitled to injunctive relief and to recover defendant s profits and TKI s actual damages. COUNT VI False Advertising Under California Business & Professions Code et. seq. though fully set forth herein. 64. Paragraphs 1 through 63 of the complaint are incorporated by reference as 13

14 Case 1:99-mc Document 262 Filed 06/08/11 Page 14 of 17 PageID #: California s Business & Professions Code et seq. makes it unlawful for any person, firm, corporation or association, to make or disseminate or cause to be made or disseminated before the public in this state, in any advertising device or in any other manner or means whatever, including over the Internet, any statement, concerning personal property or services, professional or otherwise, or performance or disposition thereof, which is untrue or misleading and which is known, or which by the exercise of reasonable care should be known, to be untrue or misleading. 66. Defendant intentionally disseminated to members of the public in this state, false and misleading statements concerning their Eclipse and/or Purshade products in their advertisements and/or packaging. 67. Defendant knew or should have known, through the exercise of reasonable care, that its statements were false and misleading. 68. Defendant Purfresh s actions alleged herein are false and misleading in violation of et seq. such that the general public is and was likely to be deceived. 69. As a direct and proximate result of defendant s acts, consumers have been and are being harmed. 70. Defendant s actions demonstrate an intentional, willful, and bad faith intent to harm TKI s business and the goodwill and reputation of TKI s goods and services. 71. Defendant is causing, and is likely to cause, substantial injury and damage to TKI, and TKI is entitled to injunctive relief and to recover defendant s profits and TKI s actual damages. 14

15 Case 1:99-mc Document 262 Filed 06/08/11 Page 15 of 17 PageID #: REQUEST FOR RELIEF WHEREFORE, TKI respectfully requests that this Court enter a Judgment and Order in its favor and against defendant Purfresh as follows: (a) A judgment that defendant Purfresh has contributed to and/or actively induced the infringement of the '740 patent by (i) making, having made, selling, and/or offering for sale, (ii) authorizing others to make, have made, sell, and/or offer for sale, and/or (iii) causing others to use the Purshade products in the United States; (b) A judgment that defendant Purfresh has contributed to and/or actively induced the infringement of the '867 patent by (i) making, having made, selling, and/or offering for sale, (ii) authorizing others to make, have made, sell, and/or offer for sale, and/or (iii) causing others to use the Eclipse and/or Purshade products in the United States; (c) A judgment that defendant Purfresh has contributed to and/or actively induced the infringement of the '995 patent by (i) making, having made, selling, and/or offering for sale, (ii) authorizing others to make, have made, sell, and/or offer for sale, and/or (iii) causing others to use the Eclipse and/or Purshade products in the United States; (d) A judgment and order permanently enjoining defendant Purfresh from further infringing the '740 patent by (i) making, having made, selling, and/or offering for sale, (ii) authorizing others to make, have made, sell, and/or offer for sale, and/or (iii) causing others to use the Purshade products in the United States; (e) A judgment and order permanently enjoining defendant Purfresh from further infringing the '867 patent by (i) making, having made, selling, and/or offering for sale, (ii) authorizing others to make, have made, sell, and/or offer for sale, and/or (iii) causing others to use the Eclipse and/or Purshade products in the United States; 15

16 Case 1:99-mc Document 262 Filed 06/08/11 Page 16 of 17 PageID #: (f) A judgment and order permanently enjoining defendant Purfresh from further infringing the '995 patent by (i) making, having made, selling, and/or offering for sale, (ii) authorizing others to make, have made, sell, and/or offer for sale, and/or (iii) causing others to use the Eclipse and/or Purshade products in the United States; (g) A judgment and order requiring defendant Purfresh to pay all available and legally permissible damages to compensate TKI for defendant s infringing acts, but in no event less than a reasonable royalty in accordance with 35 U.S.C. 284; (h) A finding that defendant s conduct has been willful, warranting an award of treble damages under 35 U.S.C. 284; (i) A finding that this case is exceptional under 35 U.S.C. 285, warranting an award to TKI of its costs, including attorney fees, and other expenses incurred in connection with this action; (j) A permanent injunction ordering defendant Purfresh to: (1) immediately cease the dissemination of any advertising, marketing, sales sheets, promotional statements, or product literature, whether made expressly or by implication, that in any way suggests that the Eclipse and/or Purshade products have superior SPF or reflectance compared to the Surround product; and (2) issue appropriate corrective advertising, sales sheets, and labeling; (k) A judgment awarding TKI relief pursuant to 15 U.S.C and the laws of the State of California, in particular: (1) all of defendant s profits derived from the unlawful conduct; (2) all of TKI s damages sustained by reason of defendant s unlawful acts, to be trebled in accordance with 15 U.S.C. 1117; (3) all expenditures required to correct the false and misleading statements alleged herein; (4) the costs, including expenses and fees, of bringing this action; and (5) attorneys fees incurred by TKI in this action; 16

17 Case 1:99-mc Document 262 Filed 06/08/11 Page 17 of 17 PageID #: (l) A judgment and order requiring that the defendant pay TKI pre-judgment interest and post-judgment interest on all damages awarded; (m) Such further relief as this Court deems just and appropriate. Jury Demand TKI demands a trial by jury on all issues so triable. MORRIS, NICHOLS, ARSHT & TUNNELL LLP /s/ Rodger D. Smith II OF COUNSEL: Seth A. Watkins Timothy C. Bickham Houda Morad Steptoe & Johnson LLP 1330 Connecticut Avenue, NW Washington, D.C (202) Rodger D. Smith II (#3778) Jeremy A. Tigan (#5239) 1201 N. Market Street P.O. Box 1347 Wilmington, DE (302) rsmith@mnat.com jtigan@mnat.com Attorneys for Plaintiff Tessenderlo Kerley, Inc. June 8,