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ecoNugenics, Inc. v. Bioenergy Life Science, Inc.

United States District Court, D. Minnesota

January 10, 2019

ECONUGENICS, INC., Plaintiff,
v.
BIOENERGY LIFE SCIENCE, INC.; CHENGZHI LIFE SCIENCES COMPANY, LTD.; and ZHEJIANG GOLD KROPN BIOTECHNOLOGY CO., LTD, Defendants.

          Steven Kelber, Esq., and Taylor Sztainer, Esq., for Plaintiff

          David Swenson, Esq., for Defendant Bioenergy Life Science, Inc.

          ORDER

          DAVID T. SCHULTZ UNITED STATES MAGISTRATE JUDGE

         INTRODUCTION

         Plaintiff ecoNugenics, Inc. moves to amend its dismissed patent infringement complaint against Defendant Bioenergy Life Science, Inc. to assert claims of direct infringement. Previously, ecoNugenics alleged inducement to infringe and contributory infringement but did not adequately plead direct infringement by Bioenergy. ecoNugenics now seeks to cure its deficient allegation of direct infringement by making allegations that directly conflict with admissions it made in the original complaint, rendering the proposed amendment futile and in bad faith. Accordingly, the motion to amend is denied.

         FACTS

         ecoNugenics owns six United States Patents relating to the administration of Modified Citrus Pectin (MCP) to mammals, particularly humans, to treat various medical conditions. Compl., Dkt. No. 1. The six patents comprise two distinct groups. The first group, U.S. Patent Nos. 6, 642, 029, 7, 026, 302, and 7, 452, 871, relates to a method of administering MCP to treat conditions caused by agents circulating in the blood such as poisonous heavy metals and environmental toxins (the “Heavy Metals Patents”). Id. Exs. A, B, C, Dkt. Nos. 1-1, 1-2, 1-3. The Heavy Metals Patents teach a composition and method of administration of MCP to bind with the toxic agents circulating in the blood. Id. The second group of patents, U.S. Patent Nos. 8, 426, 567, 9, 427, 449, and 9, 649, 329, relates to methods of selecting patients or administering to them MCP to treat various conditions such as inadequate immune function, inflammation, and fibrosis (the “Selecting and Administering Patents”). Id. Exs. D, E, F, Dkt. Nos. 1-4, 1-5, 1-6.

         In its initial complaint, ecoNugenics alleged that Bioenergy, a wholly owned subsidiary of Chengzhi Life Sciences Company with its principal place of business in Ham Lake, Minnesota, imports, promotes, and sells MCP to the public for use in treating various medical conditions, including but not limited to those conditions referenced in ecoNugenics' patents. Id. ¶ 3, Dkt. No. 1. ecoNugenics filed this action in December 2017 asserting Bioenergy directly and indirectly infringed its six patents. Id. In its complaint ecoNugenics alleged that while MCP per se is not patentable, methods of administering it to patients are patentable; thus, Bioenergy induced infringement of the patents in suit in the following manner:

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.[1]

Id. ¶ 27.

         In addition, ecoNugenics alleged in its original complaint 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. ¶ 17.

         On March 22, 2018 Bioenergy[2] moved to dismiss ecoNugenics' complaint against it, arguing, inter alia, that the complaint failed to plead any plausible patent infringement claim because the allegations in paragraph 17 conclusively established non-infringement and those in paragraph 27 asserted only indirect infringement. The Court agreed and by Order dated September 4, 2018 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's infringement claims implausible.

Order at 13, Dkt. No. 52. That is, 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.

Id. 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 also failed to allege against Bioenergy any plausible claim of indirect infringement.[3] Id. at 13-15.

         Shortly thereafter, on September 24, 2018 ecoNugenics filed a separate action alleging infringement of the same six patents by the same defendants based on the same product. This action, No. 18-cv-2733, was randomly assigned to a different District Judge and a different Magistrate Judge than were assigned to the original action. In the new complaint (FAC)[4] ecoNugenics unequivocally alleged direct infringement by Bioenergy, deleting the factual allegations in paragraphs 17 and 27 on which its prior complaint had foundered and replacing them with new allegations. FAC ¶¶ 20, 31, Dkt. No. 57. Specifically, paragraph 20 of the FAC (apparently included in lieu of paragraph 17 in the original complaint, which had alleged that independent testing demonstrated 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.

         In addition, paragraph 31 of the FAC, seemingly a replacement to the prior paragraph 27, alleged that Bioenergy “directly infringes the claims of the asserted patents by administering and providing MCP to others for the purposes recited in the claims of the asserted patents and induces infringement by other direct infringers.” That is, paragraph 31 of the new complaint utilized a different definition of the term “administer” to support its allegation of direct infringement by Bioenergy. Whereas the original complaint alleged that Bioenergy's customers administered the MCP to themselves, the FAC alleged that Bioenergy also “administered” MCP by selling it to those customers. Thus, this allegation in the FAC used the term “administer” to mean “make available”, thereby changing the essential nature of the allegation of direct infringement.

         Because the September 4, 2018 Order granting Bioenergy's motion to dismiss had not disposed of the entire action, the FAC was treated as a related case to the original action and re-assigned to the original District and Magistrate Judges. See Dkt. No. 53. Once it was reassigned, the Court directed that the FAC be filed as an amended complaint and ordered that it be consolidated with the original action. See Dkt. Nos. 54, 56. Because it was deemed an amended complaint and because no leave to file an amended complaint had been sought ...


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