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From Antitrust Law Daily, January 6, 2016

Cattle sexing technology company dismissed from monopolization, patent suit

By Greg Hammond, J.D.

Following the dismissal of monopolization and attempted monopolization claims, a cattle sexing technology company was entitled to judgment on the pleadings with regard to the remaining patent misuse and inequitable conduct claims. In granting judgment on the pleadings, the federal district court in Denver concluded that the patent misuse and inequitable conduct claims were defenses to a patent owner’s claim of infringement, but that the sexing technology company did not own the patents or bring the underlying patent infringement claims at issue (XY, LLC v. Trans Ova Genetics, LC, January 5, 2016, Martínez, W.).

XY, LLC—the owner of patented sex-technology—filed a patent infringement suit against Trans Ova Genetics, LC—a cattle genetics company—after XY terminated a licensing agreement with Trans Ova. The district court previously dismissed Trans Ova’s monopolization and attempted monopolization counterclaims as time-barred and later denied Trans Ova’s motion to construe the antitrust counterclaims as recoupment claims against third-party defendant Inguran, LLC—another sexing technologies company. Inguran subsequently moved for judgment in favor of itself and, in the alternative, judgment on the pleadings.

The court denied the motion for entry of judgment in favor of Inguran, but granted the alternative request for judgment on the pleadings.

Patent misuse. Inguran argued that Trans Ova’s patent misuse and inequitable conduct claims against it must fail because both were defenses to a patent owner’s claim of infringement, but that XY was the company that owned the patents and brought the patent infringement claims, not Inguran. The court agreed with Inguran, concluding that Trans Ova failed to state a claim for patent misuse or inequitable conduct against Inguran because these were not affirmative claims, but were instead defenses against XY’s claims of infringement.

Breach of contract. Judgment on the pleadings was also granted in favor of Inguran on Trans Ova’s claims for breach of contract and breach of the duty of good faith and fair dealing, which were based on an alter ego theory. Allegations that Inguran purchased a controlling interest in XY, induced XY to wrongfully terminate its license agreement, and induced XY to reject Trans Ova’s attempt to proceed under the license agreement or to renegotiate the license agreement in good faith were insufficient. The allegations failed to establish that Inguran used the corporate form to shield itself or that justice requires piercing the corporate veil, and Trans Ova never pleaded that equity requires disregarding the corporate form.

Because the court resolved all remaining claims against Inguran, the company was terminated as a party from the action.

The case is No. 13-cv-0876-WJM-NYW.

Attorneys: Daniel Lynn Moffett (Akin, Gump, Strauss, Hauer & Feld, LLP) and Jon F. Sands. (Sweetbaum Sands Anderson, PC) for XY, LLC. Donald E. Lake, III (Lewis Brisbois Bisgaard & Smith, LLP) for Trans Ova Genetics, LC. Kirt Stephen O'Neill (Akin, Gump, Strauss, Hauer & Feld, LLP) for Inguran, LLC.

Companies: XY, LLC; Trans Ova Genetics, LC; Inguran, LLC

MainStory: TopStory Antitrust ColoradoNews

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