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Creagri, Inc. v. Pinnaclife, Inc.

United States District Court, N.D. California, San Jose Division

June 3, 2014

CREAGRI, INC., a California Corporation, Plaintiff,
v.
PINNACLIFE, INC., a Nevada Corporation, Defendant.

ORDER DENYING DEFENDANT'S MOTIONS FOR ATTORNEYS' FEES

LUCY H. KOH, District Judge.

Defendant Pinnaclife, Inc. ("Pinnaclife") brings two motions to recover attorneys' fees from Plaintiff CreAgri, Inc. ("CreAgri") arising out of a patent infringement action brought by CreAgri. CreAgri sued Pinnaclife for infringement of U.S. Patent No. 6, 416, 808 (issued from an application filed Aug. 31, 2001) ("the 808 Patent") and U.S. Patent No. 8, 216, 599 (issued from an application filed Feb. 13, 2003) ("the 599 Patent"). See ECF No. 50. The Court found both patents invalid and granted summary judgment in favor of Pinnaclife. ECF No. 177 ("SJ Order"). Pinnaclife moves for attorneys' fees under both 35 U.S.C. ยง 285 and Rule 11 of the Federal Rules of Civil Procedure. The motions are fully briefed. Having reviewed the parties' submissions, the record in this case, and the relevant law, the Court DENIES both of Pinnaclife's motions for attorneys' fees.

I. BACKGROUND

A. Factual Background

CreAgri and Pinnaclife both sell products, including dietary supplements, containing olive-derived phenolic compounds intended to promote health. ECF No. 113 at 2.[1] Olives naturally contain the phenolic compounds oleuropein, hydroxytyrosol, and tyrosol. 808 Patent 2:9-30. Olive oil is a principal fat component of the Mediterranean diet, which has been linked to a lower incidence of certain ailments, such as coronary heart disease and some cancers. Id. 2:9-14. Massive amounts of "waste water" or "vegetation water" are produced as a byproduct of olive oil production. Discarding this water creates a significant economic burden for olive oil mills. See Francesco Visioli, et al., 47 Antioxidant and Other Biological Activities of Olive Mill Waste Waters, J. Agric. Food Chem., 3397-3401 (1999), available at Marshall Decl. Ex. D, ECF No. 103-2. Because of the known health benefits of olives and olive extracts, efforts have been made to leverage olive mill vegetation water for therapeutic uses, rather than simply discarding the water as waste. CreAgri obtained, and asserted in the instant litigation, two patents covering certain compositions of phenols derived from this waste water and uses thereof. 808 Patent; 599 Patent.

The 808 Patent, entitled "Method of Obtaining a Hydroxytyrosol-Rich Composition from Vegetation Water, " claims, despite its title, compositions of olive-derived dietary supplements containing hydroxytyrosol and oleuropein or hydroxytyrosol and tyrosol at certain weight ratios. See 808 Patent at 3:43-51. The 808 Patent contains two independent claims and four dependent claims, all of which CreAgri asserted in this case. Independent claim 1 recites a range of hydroxytyrosol-to-oleoeuropein weight ratios and reads as follows:

A dietary supplement comprising an aqueous extract of olives containing a weight ratio of hydroxytyrosol to oleoeuropein of between about 5:1 and about 200:1.

Claims 2 through 4 depend from claim 1. Claim 2 recites a narrower range of hydroxytyrosol-to-oleoeuropein weight ratios. Claim 3 recites a dried supplement in powder form, and claim 4 recites an extract "in the form of a tablet, capsule, pill, or confection food additive." Independent claim 5 is similar to claim 1 except that it recites a range of hydroxytyrosol-to-tyrosol weight ratios:

A dietary supplement comprising an aqueous extract of olives containing a weight ratio of hydroxytyrosol to tyrosol of between about 3:1 and about 50:1.

Dependent claim 6 recites a narrower range of hydroxytyrosol-to-tyrosol weight ratios. On August 31, 2001, CreAgri filed the application that issued as the 808 Patent on July 9, 2002. Id.

The 599 Patent, entitled "Method for Treatment of Inflammation, " relates to using olive plant extracts to "treat[] AIDS-associated neurological disorders, inflammation and inflammation-associated disorders. "599 Patent 1:10-14 ("Field of the Invention"). The claims recite methods for treating specified inflammatory conditions with various mixtures of hydroxytyrosol or hydroxytyrosol and oleuropein. See 599 Patent. The 599 Patent contains two independent claims and fourteen dependent claims. The first independent claim, claim 1, reads as follows:

A method of treating a subject having an inflammatory condition characterized by a detectable clinical symptom or change in a level of a biochemical marker with respect to the normal range of the marker, the method comprising:
administering to the subject a dose corresponding to between about 0.1 mg/kg body weight and 2000 mg/kg body weight daily of a first treatment agent comprised of an olive plant extract having a weight ratio of hydroxytyrosol to oleuropein of between about 1:1 and about 200:1; and continuing said administration until there is observed a return of the marker level to the normal range or a desired change in the clinical symptom, where the marker or the clinical symptom is selected from the group consisting of (i) elevated levels of C-reactive protein in the case of coronary inflammation; (ii) respiratory distress in the case of bronchial inflammation; and (iii) elevated CSF levels of isoprostanes or clinical symptoms determined from neuropsychological testing in the case of neuro inflammation.

All fourteen of the dependent claims depend from claim 1. The other independent claim, claim 16, uses a slightly different therapy-substantially purified hydroxytyrosol and oleuropein-to treat a broader set of conditions:

A method of treating an inflammatory condition in a subject in need of such treatment, comprising administering to said subject a dosage amount corresponding to between about 0.1 mg/kg body weight and 2000 mg/kg body weight daily of substantially purified hydroxytyrosol or a substantially purified mixture of hydroxytyrosol and oleuropein, wherein said inflammatory condition is in response to a condition selected from the group consisting of: delayed type hypersensitivity reaction, psoriasis, an autoimmune disease, organ transplant, pain, fever, and tissue graft rejection.

The parties stipulated that "substantially purified" and "substantially purified mixture" in claim 16 meant "a compound or compounds that are removed from their natural environment, isolated and separated, and are at least 60% free from other components with which they are naturally associated, " as described in the Patent's specification. 599 Patent, 5:21-27. On February 13, 2003, CreAgri filed the application from which the 599 Patent issued nearly a decade later on July 10, 2012. Id.

B. Procedural Background

CreAgri filed its Complaint on December 23, 2011, alleging that olive-derived supplements created by Pinnaclife infringe the 808 Patent. ECF No. 1. On July 30, 2012, CreAgri amended its Complaint to allege infringement of the 599 Patent in addition to the 808 Patent. ECF No. 23. Pinnaclife moved to dismiss CreAgri's claims of infringement of the 599 Patent. ECF No. 27. The Court granted the motion as to indirect infringement but denied as to direct infringement, ECF No. 46.

CreAgri filed a Second Amended Complaint on January 22, 2013. ECF No. 50. Pinnaclife again filed a motion to dismiss the indirect infringement claims, ECF No. 54, which this Court denied, ECF No. 91. Pinnaclife answered and included counterclaims seeking declaratory judgments of invalidity and noninfringement of the 808 and 599 Patents, as well as a declaratory judgment that the 808 Patent was unenforceable due to inequitable conduct. See ECF No. 55.

While litigating the pleadings, Pinnaclife also filed a motion to compel CreAgri to comply with Patent Local Rule 3-1, which streamlines discovery and requires patentees to identify factual bases for their infringement allegations. ECF No. 34. After full briefing and a hearing, Magistrate Judge Paul Grewal denied Pinnaclife's motion in large part, finding that CreAgri had discharged its Patent Local Rule 3-1 obligations with respect to all claims of the 808 Patent and all but one claim of the 599 Patent. ECF No. 41 at 10. However, Judge Grewal ordered CreAgri to supplement its infringement contentions regarding indirect infringement, the doctrine of equivalents, and one claim of the 599 Patent. Id.

On April 16, 2013, after full briefing and a tutorial, the Court issued an order construing the disputed claims of the patents-in-suit. ECF No. 67 ("Claim Construction Order"). The Court construed disputed claims as follows:

On April 26, 2013, Pinnaclife moved to determine the sufficiency of CreAgri's responses to certain Requests for Admissions. ECF No. 70. After full briefing, ECF Nos. 75-76, Judge Grewal held a hearing, ECF No. 95. At the hearing, Judge Grewal criticized Pinnaclife for framing the requests so broadly that it would be impossible to respond to the requests and also criticized CreAgri for being evasive with privilege objections rather than responding more forthrightly. Id. The parties met and conferred during a break in the hearing and substantially narrowed their dispute, which Judge Grewal resolved on the record by ordering CreAgri to produce certain documents that CreAgri had previously agreed to produce and by ordering CreAgri to respond to one interrogatory regarding which the parties were not able to agree. Id. Judge Grewal also denied Pinnaclife's motion for discovery sanctions. Id.

Subsequently, CreAgri moved to disqualify Dr. Francesco Visioli, who was retained as Pinnaclife's expert, on the basis that Dr. Visioli had a previous confidential relationship with CreAgri. ECF No. 80. After full briefing, including a surreply, and a hearing, ECF Nos. 88, 94, the Court denied CreAgri's motion to disqualify. ECF No. 179. While the Court found that Dr. Visioli had a confidential relationship with CreAgri, the Court concluded that no ...


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