Case 1:15-cv-00661-SLR Document 9 Filed 08/24/15 Page 1 of 26 PageID #: 58
`
`IN THE UNITED STATES DISTRICT COURT
`
`FOR THE DISTRICT OF DELAWARE
`
`DNA GENOTEK INC.,
`
`Plaintiff,
`
`v.
`
`SPECTRUM DNA; SPECTRUM SOLUTIONS
`L.L.C.; and SPECTRUM PACKAGING L.L.C.,
`
`Defendants.
`
`C.A. No. 15-cv-00661-SLR
`
`JURY TRIAL DEMANDED
`
`PLAINTIFF DNA GENOTEK INC.’S OPENING BRIEF IN SUPPORT OF
`MOTION FOR PRELIMINARY INJUNCTION
`
`OF COUNSEL:
`David C. Doyle
`Brian M. Kramer
`MORRISON & FOERSTER LLP
`12531 High Bluff Drive
`San Diego, CA 92130
`(858) 314-5415
`ddoyle@mofo.com
`bmkramer@mofo.com
`
`Dated: August 24, 2015
`
`John W. Shaw (No. 3362)
`Karen E. Keller (No. 4489)
`300 Delaware Avenue, Suite 1120
`SHAW KELLER LLP
`Wilmington, DE 19801
`(302) 298-0700
`jshaw@shawkeller.com
`kkeller@shawkeller.com
`Attorneys for Plaintiff
`
`ANCESTRY EX. 1005
`
`1
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`

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`Case 1:15-cv-00661-SLR Document 9 Filed 08/24/15 Page 2 of 26 PageID #: 59
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`TABLE OF CONTENTS
`
`Page
`
`I.
`II.
`III.
`
`IV.
`
`V.
`
`INTRODUCTION AND SUMMARY OF THE ARGUMENT ........................................ 1
`STATEMENT OF THE NATURE AND STAGE OF THE PROCEEDINGS.................. 1
`STATEMENT OF FACTS ................................................................................................. 2
`A.
`DNAG is a Leading Innovator of DNA Collection Technology. ........................... 2
`B.
`The ’381 Patent Encompasses Many Embodiments of DNAG’s Sample
`Collection Devices.................................................................................................. 3
`Spectrum’s Product Infringes At Least Claim 1 of the ’381 Patent. ...................... 4
`C.
`ARGUMENT...................................................................................................................... 8
`DNAG Will Likely Succeed on the Merits............................................................. 8
`A.
`B.
`DNAG Will Be Irreparably Harmed if the Court Does Not Issue a
`Preliminary Injunction .......................................................................................... 10
`1.
`DNAG Will Suffer Irreparable Harm As a Result of Spectrum’s
`Infringing Conduct.................................................................................... 11
`a.
`Spectrum’s Infringing Product Will Cause DNAG to Suffer
`Price Erosion................................................................................. 11
`Spectrum’s Infringing Product Will Damage DNAG’s
`Relationship with Current and Potential Customers..................... 13
`Spectrum’s Infringing Product Will Harm DNAG’s Ability
`to Do Business .............................................................................. 15
`Spectrum’s Ability to Pay Money Damages is Uncertain ........................ 16
`2.
`DNAG’s Harm Is Directly Attributable to Spectrum’s Infringement ...... 17
`3.
`Harm to DNAG is Already Occurring; More Harm is Imminent............. 18
`4.
`The Balance of Hardships Weighs in Favor of Issuing an Injunction .................. 19
`C.
`The Public Interest Weighs in Favor of Issuing an Injunction ............................. 20
`D.
`CONCLUSION................................................................................................................. 20
`
`b.
`
`c.
`
`i
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`2
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`

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`Case 1:15-cv-00661-SLR Document 9 Filed 08/24/15 Page 3 of 26 PageID #: 60
`
`TABLE OF AUTHORITIES
`
`Page(s)
`
`CASES
`
`3M Unitek Corp. v. Ormco Co.,
`96 F. Supp. 2d 1042 (C.D. Cal. 2000) .....................................................................................13
`
`Abbott Labs. v. Andrx Pharms., Inc.,
`473 F.3d 1196 (Fed. Cir. 2007)................................................................................................10
`
`Abbott Labs. v. Andrx Pharms., Inc,
`452 F.3d 1331 (Fed. Cir. 2006)..................................................................................................8
`
`Abbott Labs. v. Sandoz, Inc.,
`544 F.3d 1341 (Fed. Cir. 2008)..................................................................................................8
`
`Antares Pharma., Inc. v. Medac Pharma., Inc.,
`55 F. Supp. 3d 526 (D. Del.),
` aff'd, 771 F.3d 1354 (Fed. Cir. 2014) ...................................................................................8
`
`Apple Inc. v. Samsung Elecs. Co.,
`695 F.3d 1370 (Fed. Cir. 2012)..........................................................................................11, 17
`
`Apple Inc. v. Samsung Elecs. Co.,
`735 F.3d 1352 (Fed. Cir. 2013)................................................................................................17
`
`Applied Materials, Inc. v. Advanced Semiconductor Materials Am., Inc.,
`98 F.3d 1563 (Fed. Cir. 1996)....................................................................................................8
`
`Aria Diagnostics, Inc. v. Sequenom, Inc.,
`726 F.3d 1296 (Fed. Cir. 2013)..........................................................................................11, 12
`
`Bio-Techn. Gen. Corp. v. Genentech, Inc.,
`80 F.3d 1553 (Fed. Cir. 1996)..................................................................................................15
`
`Butamax™ Advanced Biofuels LLC v. Gevo, Inc.,
`868 F. Supp. 2d 359 (D. Del. 2012).........................................................................................11
`
`Canon Computer Sys., Inc. v. Nu-Kote Int’l, Inc.,
`134 F.3d 1085 (Fed. Cir. 1998)..................................................................................................9
`
`Celsis in Vitro, Inc. v. CellzDirect, Inc.,
`664 F.3d 922 (Fed. Cir. 2012).......................................................................................... passim
`
`Douglas Dynamics, LLC v. Buyers Prods. Co.,
`717 F.3d 1336 (Fed. Cir. 2013)....................................................................................11, 13, 14
`
`ii
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`3
`
`

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`Case 1:15-cv-00661-SLR Document 9 Filed 08/24/15 Page 4 of 26 PageID #: 61
`
`Gillette Co. v. Energizer Holdings, Inc.,
`405 F.3d 1367 (Fed. Cir. 2005)..................................................................................................7
`
`Graver Tank & Mfg. Co. v. Linde Air Prods. Co.,
`339 U.S. 605 (1950)...................................................................................................................9
`
`Opticians Assoc. of Am. v. Indep. Opticians of Am.,
`920 F.2d 187 (3d Cir. 1990).....................................................................................................11
`
`Pfizer, Inc. v. Teva Pharms. USA, Inc.,
`429 F.3d 1364 (Fed. Cir. 2005)..................................................................................................9
`
`Polymer Technologies, Inc. v. Bridwell,
`103 F.3d 970 (Fed. Cir. 1996)............................................................................................11, 12
`
`Power Integrations, Inc. v. Fairchild Semiconductor Int’l, Inc.,
`2014 U.S. Dist. LEXIS 88488 (D. Del. June 30, 2014)...........................................................14
`
`Presidio Components, Inc. v. Am. Tech. Ceramics Corp.,
`702 F.3d 1351 (Fed. Cir. 2012)................................................................................................11
`
`Robert Bosch LLC v. Pylon Mfg. Corp.,
`659 F.3d 1142 (Fed. Cir. 2011)....................................................................................16, 17, 19
`
`Sanofi-Synthelabo v. Apotex Inc.,
`488 F. Supp. 2d 317 (S.D.N.Y. 2006),
` aff'd 470 F.3d 1368 (Fed. Cir. 2006) ..................................................................................15
`
`Sciele Pharma Inc. v. Lupin Ltd.,
`684 F.3d 1253 (Fed. Cir. 2012)..................................................................................................8
`
`Sofamor Danek Group, Inc. v. DePuy-Motech, Inc.,
`74 F.3d 1216 (Fed. Cir. 1996)....................................................................................................9
`
`TechSearch, L.L.C. v. Intel Corp.,
`286 F.3d 1360 (Fed. Cir. 2002)..................................................................................................9
`
`TIP Sys., LLC v. Phillips & Brooks/Gladwin, Inc.,
`529 F.3d 1364 (Fed. Cir. 2008)................................................................................................10
`
`Trebro Mfg. v. FireFly Equip., LLC,
`748 F.3d 1159 (Fed. Cir. 2014)..........................................................................................10, 11
`
`Warner-Jenkinson Co. v. Hilton Davis Chem. Co.,
`520 U.S. 17 (1997).....................................................................................................................9
`
`iii
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`4
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`

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`Case 1:15-cv-00661-SLR Document 9 Filed 08/24/15 Page 5 of 26 PageID #: 62
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`Windsurfing Int’l, Inc. v. AMF, Inc.,
`782 F.2d 995 (Fed. Cir. 1986)..................................................................................................19
`
`Winter v. Nat. Res. Def. Council, Inc.,
`555 U.S. 7 (2008).......................................................................................................................8
`
`STATUTES
`
`35 U.S.C. § 282................................................................................................................................8
`
`OTHER AUTHORITIES
`
`Manual of Patent Examination Procedure § 2111.03 (2014)..........................................................7
`
`iv
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`5
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`

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`Case 1:15-cv-00661-SLR Document 9 Filed 08/24/15 Page 6 of 26 PageID #: 63
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`I.
`
`INTRODUCTION AND SUMMARY OF THE ARGUMENT
`
`Plaintiff DNA Genotek Inc. (“DNAG”) is a leading provider of products for biological
`
`sample collection, such as saliva collection devices for DNA testing. Defendants Spectrum
`
`DNA, Spectrum Solutions L.L.C., and Spectrum Packaging, L.L.C. (collectively, “Spectrum”)
`
`have surreptitiously marketed a competing saliva collection device that infringes DNAG’s U.S.
`
`Patent No. 8,221,381 (“the ’381 patent”) and competes with DNAG’s top products. On or about
`
`July 31, 2015, Spectrum came out of hiding, revealing itself through a new website,
`
`www.spectrum-dna.com, and advertising its infringing product for sale to the general public.
`
`Spectrum’s infringing conduct and its targeting of DNAG’s current customers is causing and will
`
`continue to cause DNAG irreparable harm. DNAG, therefore, respectfully moves this Court to
`
`issue a preliminary injunction immediately prohibiting Spectrum’s infringement.
`
`II.
`
`STATEMENT OF THE NATURE AND STAGE OF THE PROCEEDINGS
`
`This patent infringement suit stems from Spectrum’s recent launch of a website offering
`
`infringing saliva collection devices to the public. DNAG suspects that Spectrum has been the
`
`secret supplier of infringing kits for Ancestry.com DNA LLC (“Ancestry”), a defendant in a
`
`separate suit by DNAG pending in this court. DNAG discovered on July 28, 2015, that Mr.
`
`Gregg Williams, owner of Defendant Spectrum Solutions, registered that same day a website
`
`with the domain name, www.spectrum-dna.com. The website was not yet operational. The next
`
`day, DNAG discovered a marketing company’s website hosting what in the last couple of weeks
`
`has become Spectrum DNA’s website offering infringing saliva collection devices for sale to the
`
`general public, as opposed to just Ancestry. DNAG reviewed online pictures of the infringing
`
`device and determined that Spectrum’s device infringed the ’381 patent. DNAG filed its
`
`complaint the next day and immediately sought to obtain samples of the Spectrum DNA devices.
`
`1
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`6
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`

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`Case 1:15-cv-00661-SLR Document 9 Filed 08/24/15 Page 7 of 26 PageID #: 64
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`After receiving samples through a third party and confirming the infringement, DNAG
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`immediately began retaining expert witnesses and drafting this motion for an injunction.
`
`Spectrum has been served, but has not answered the complaint.
`
`III.
`
`STATEMENT OF FACTS
`
`A.
`
`DNAG is a Leading Innovator of DNA Collection Technology.
`
`DNAG makes high quality products for biological sample collection, including oral fluid
`
`sample collection and stabilization solutions for molecular applications. DNAG revolutionized
`
`the DNA collection market with products that provide substantial advantages over traditional
`
`methods of biological sample collection. DNAG’s products are protected by a robust patent
`
`estate. Representative examples of DNAG patented products are depicted below. (See
`
`Declaration of Ian Curry (“Curry Decl.”) ¶ 5).
`
`Oragene●One® (OG-510) (multiple patents) OraGene●RNA® (’381 Pat., Figs. 22-24)
`
`
`Oragene●Discover (’381 Pat., Figs. 4-11)
`
` Customized Oragene® (’381 Pat., Figs. 12-21)
`
`2
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`7
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`

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`Case 1:15-cv-00661-SLR Document 9 Filed 08/24/15 Page 8 of 26 PageID #: 65
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`B.
`
`The ’381 Patent Encompasses Many Embodiments of DNAG’s
`Sample Collection Devices.
`
`Each of the above four devices is an embodiment of a DNA (or other sample) collection
`
`device covered by the ’381 patent, which is entitled “Container System for Releasably Storing a
`
`Substance.” Very generally, the ’381 patent describes “two compartment” DNA collection
`
`containers. One compartment houses a “substance,” such as a DNA preservative. The other
`
`compartment stores a “sample,” such as a user’s saliva. When in use, the separately stored
`
`“substance” and “sample” are mixed together so the combined substance-sample (e.g., saliva in a
`
`DNA preservative) can be shipped for further testing. Taking the OraGene●RNA product
`
`(Figures 22-24 of the ’381 patent), for example, the device has two main components and works
`
`in two steps. The components are (1) a collection tube with a “sample” (e.g., saliva) storage area
`
`and (2) a lid with a compartment for storing a “substance” (e.g., a DNA or RNA preservative)
`
`before the sample is collected. To use the device, a user first fills the collection tube with saliva.
`
`Second, the user places the red lid on the collection tube.
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`3
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`8
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`Case 1:15-cv-00661-SLR Document 9 Filed 08/24/15 Page 9 of 26 PageID #: 66
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`When the user screws on the lid, the “piercing members” (e.g., teeth) at the top of the collection
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`tube pierce the membrane in the lid. That releases the preservative from the lid into the sample
`
`collection tube, mixing the preservative and saliva. The preserved sample can then be tested.
`
`(Curry Decl. ¶ 5, Ex. A.)
`
`While the OraGene●RNA device is a two-step device, other embodiments of the ’381
`
`patent have more steps. For example, the Oragene●One® (OG-510) device is a four-step device.
`
`The ’381 patent has only apparatus claims. They are not limited to a particular number of steps.
`
`C.
`
`Spectrum’s Product Infringes At Least Claim 1 of the ’381 Patent.
`
`Claim 1 of the ’381 patent is representative of the claims infringed by Spectrum.
`
`1.
`
`A container system for releasably storing a substance, comprising:
`
`a) a vial comprising a first open end for receiving a sample, a
`second end comprising a sample storage chamber and a piercing
`member, wherein said piercing member comprises a side wall, a
`first cutting edge extending from a first pointed corner to a second
`corner that defines the intersection between said cutting edge and
`said side wall; and
`
`b) a lid configured to removably engage said vial, said lid
`comprising a reservoir for holding the substance, and a pierceable
`membrane sealing the substance within said reservoir,
`
`wherein, when said system is closed by removable engagement of
`said vial with said lid, said vial and said lid are movable to a
`piercing position in which the piercing member disrupts the
`pierceable membrane to allow fluid communication between said
`reservoir and said chamber, wherein the chamber is sealed against
`leakage to the outside of the container system in the piercing
`position.
`
`(Declaration of Juan C. Lasheras, Ph.D. (“Lasheras Decl.”), Ex. B., Claim 1 (emphasis added).)
`
`As set forth in more detail in the attached declaration of Dr. Juan C. Lasheras, Director of
`
`the Center for Medical Devices and Instrumentation at the University of California, San Diego,
`
`and a Fellow of the National Academy of Inventors, the Spectrum device meets every limitation
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`4
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`9
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`Case 1:15—cv—OO661—SLR Document 9 Filed 08/24/15 Page 10 of 26 Page|D #: 67
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`of claim 1 of the ’38l patent, either literally or under the doctrine of equivalents. Dr. Lasheras
`
`obtained samples of the Spectnun device and concluded that every limitation is met. He then
`
`prepared a claim chart showing how the Spectrum device infringes on a limitation-by-limitation
`
`basis. Briefly, the Spectrum device, pict1u'ed below, has three components and works using a
`
`three—step method. The three components are: (1) a collection tube with a saliva storage area; (2)
`
`a lid with a compartment for storing a DNA preservative: and (3) a removable funnel.
`
`4!’
`
`._—o
`
`din-.......
`
`(See Lasheras Dec]. 1] 9.)
`
`Spect1um’s package insert describes how to use the Spectnun device. First, a user fills
`
`the collection tube by spitting saliva through the funnel and into the sample storage area.
`
`
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`Fill the tube with saliva to the black wavy line.
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`

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`Case 1:15-cv-00661-SLR Document 9 Filed 08/24/15 Page 11 of 26 PageID #: 68
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`Second, the funnel is removed. Finally, the lid with the compartment for storing a DNA
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`preservative is screwed on the tube. 1
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`The device works when the piercing member, initially in the bottom of the lid, wedges
`
`into the collection tube and moves up to pierce the membrane in the lid, causing the stored
`
`preservative to mix with the sample. (Lasheras Decl. ¶ 28, Ex. E.)
`
`Spectrum’s product infringes at least claim 1 of the ’381 patent. There can be no serious
`
`dispute that the Spectrum device includes the claimed “first open end for receiving a sample,”
`
`“second end comprising a sample storage chamber,” “piercing member,” “lid,” “reservoir,” and
`
`
`1 DNAG calls removing the funnel from the collection tube and replacing it with the lid two
`distinct steps. Spectrum calls it a single step. The distinction is unimportant here, as the number
`of steps is not a claim limitation.
`
`6
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`11
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`

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`Case 1:15-cv-00661-SLR Document 9 Filed 08/24/15 Page 12 of 26 PageID #: 69
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`“pierceable membrane.” Each element is present in the Spectrum device. (Lasheras Decl. ¶¶ 17-
`
`30, Ex. F.) The only difference between the Spectrum device and the commercial embodiments
`
`of the DNAG devices is that, when it arrives in a box, the “piercing member” of the Spectrum
`
`device is located in the lid, as opposed to the collection tube. Thus, Spectrum might argue that
`
`its product does not literally infringe because the “piercing member” is not part of the claimed
`
`“vial.” But the claim only requires that the vial “compris[e]” a piercing member. The word
`
`“comprising” is an open-ended transitional phrase synonymous with the word “including.” See
`
`Manual of Patent Examination Procedure § 2111.03 (2014); see also Gillette Co. v. Energizer
`
`Holdings, Inc., 405 F.3d 1367, 1371-73 (Fed. Cir. 2005). When in use, the piercing member
`
`becomes wedged in the top of the collection tube, making a “vial” that comprises both a
`
`collection tube and a piercing member, as required by the claims.
`
`(Lasheras Decl. ¶ 21.) Even if the “piercing member” limitation is not met literally, the accused
`
`piercing member in the Spectrum device, depicted below, is insubstantially different than the
`
`piercing members claimed by claim 1 of the ’381 patent.
`
`Specifically, Spectrum’s piercing member performs the same function (rupturing the membrane),
`
`in the same way (by cutting the membrane), and achieves the same result (the substance and
`
`sample are mixed) as the “piercing member” in claim 1 of the ’381 patent. (Lasheras Decl. ¶¶
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`7
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`12
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`Case 1:15-cv-00661-SLR Document 9 Filed 08/24/15 Page 13 of 26 PageID #: 70
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`22-23.) Accordingly, it infringes claim 1, at least under the doctrine of equivalents.
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`IV.
`
`ARGUMENT
`
`A party seeking preliminary injunction relief must demonstrate: (1) a reasonable
`
`likelihood of success on the merits; (2) the prospect of irreparable harm in the absence of an
`
`injunction; (3) that this harm would exceed harm to the opposing party; and (4) the public
`
`interest favors such relief. See, e.g., Winter v. Nat. Res. Def. Council, Inc., 555 U.S. 7, 20
`
`(2008); Sciele Pharma Inc. v. Lupin Ltd., 684 F.3d 1253, 1259 (Fed. Cir. 2012); Abbott Labs. v.
`
`Sandoz, Inc., 544 F.3d 1341, 1344 (Fed. Cir. 2008). The first two requirements – likelihood of
`
`success on the merits and probability of irreparable harm if relief is not granted – are the key
`
`requirements. See Antares Pharma., Inc. v. Medac Pharma., Inc., 55 F. Supp. 3d 526, 529 (D.
`
`Del. ) (citing McKeesport Hosp. v. Accreditation Council for Graduate Med. Educ., 24 F.3d 519,
`
`523 (3d Cir. 1994), aff’d, 771 F.3d 1354 (Fed. Cir. 2014).
`
`A.
`
`DNAG Will Likely Succeed on the Merits
`
`At the preliminary injunction stage of a case, the movant “must demonstrate that . . . at
`
`least one of [the] allegedly infringed claims will . . . likely withstand the validity challenges
`
`presented by the accused infringer.” Abbott Labs. v. Andrx Pharms., Inc, 452 F.3d 1331, 1335
`
`(Fed. Cir. 2006) (citation omitted). Spectrum is represented by Ancestry’s counsel in this case.
`
`DNAG and Ancestry have been in discussions since May, and neither Spectrum, nor Ancestry,
`
`has articulated any invalidity or unenforceability defense to DNAG. To the extent Spectrum
`
`plans to challenge the ’381 patent, it will be entitled to a statutory presumption of validity. 35
`
`U.S.C. § 282; see also Applied Materials, Inc. v. Advanced Semiconductor Materials Am., Inc.,
`
`98 F.3d 1563, 1569 (Fed. Cir. 1996) (“When a patent has been examined and duly granted,
`
`judicial review must give due weight to the presumption of validity.”). Spectrum has the burden
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`13
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`Case 1:15-cv-00661-SLR Document 9 Filed 08/24/15 Page 14 of 26 PageID #: 71
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`of proving by clear and convincing evidence that the patent is invalid. This presumption exists at
`
`every stage of the litigation. Canon Computer Sys., Inc. v. Nu-Kote Int’l, Inc., 134 F.3d 1085,
`
`1088 (Fed. Cir. 1998) (affirming grant of preliminary injunction). Based on this presumption,
`
`the very existence of the patent, standing alone, is sufficient to satisfy DNAG’s burden as to
`
`validity in the context of a preliminary injunction motion. Id.
`
`Second, Spectrum’s product infringes the ’381 patent. Like any infringement analysis,
`
`determining likelihood of success on infringement in the context of a preliminary injunction
`
`motion involves two steps: claim construction and a comparison of the claims to the accused
`
`products. Pfizer, Inc. v. Teva Pharms. USA, Inc., 429 F.3d 1364, 1372-1373 (Fed. Cir. 2005).
`
`For purposes of a preliminary injunction, the Court need not interpret the claims conclusively
`
`and finally. Sofamor Danek Group, Inc. v. DePuy-Motech, Inc., 74 F.3d 1216, 1221 (Fed. Cir.
`
`1996). Rather, the Court need only determine “whether the accused device is likely to fall within
`
`the scope of the claims.” Id. at 1220. “To establish literal infringement, all of the elements of
`
`the claim, as correctly construed, must be present in the accused system.” TechSearch, L.L.C. v.
`
`Intel Corp., 286 F.3d 1360, 1371 (Fed. Cir. 2002). A product that does not literally infringe may
`
`still infringe under the doctrine of equivalents if the differences between an element of the
`
`claimed invention and an element of the accused product are insubstantial. See Warner-
`
`Jenkinson Co. v. Hilton Davis Chem. Co., 520 U.S. 17, 40 (1997) (infringement exists when the
`
`accused device “contain[s] elements identical or equivalent to each claimed element of the
`
`patented invention”). The “function-way-result test” is one way to determine if any difference
`
`between the accused device and the claimed invention is, in fact, insubstantial. A patentee
`
`satisfies the function-way-result test by proving that the accused product performs substantially
`
`the same function in substantially the same way to achieve substantially the same result as the
`
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`14
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`Case 1:15-cv-00661-SLR Document 9 Filed 08/24/15 Page 15 of 26 PageID #: 72
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`claimed invention. Graver Tank & Mfg. Co. v. Linde Air Prods. Co., 339 U.S. 605, 608 (1950);
`
`see also TIP Sys., LLC v. Phillips & Brooks/Gladwin, Inc., 529 F.3d 1364, 1376 (Fed. Cir. 2008)
`
`(citing Graver Tank).
`
`Dr. Lasheras’s declaration sets forth in detail his opinion that the Spectrum device
`
`infringes claim 1 of the ’381 patent. Each limitation is literally present. For completeness, Dr.
`
`Lasheras alternatively addresses infringement of the “piercing member” limitation under the
`
`doctrine of equivalents. The function of the claimed “piercing member” is to rupture the
`
`membrane of the reservoir and release the reservoir fluid. In other words, its function is to cut
`
`open the “reservoir,” which is storing the “substance.” The Spectrum device’s piercing member
`
`performs that same function. The way this is achieved is by pressing pointed corners and a
`
`cutting edge against the membrane, causing the membrane to tear and the “substance” (e.g.,
`
`preservative) to pour out through the cut membrane. The result in each is the same. The
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`“substance” mixes with the “sample.” There are no differences, let alone “substantial”
`
`differences, which are required to take the Spectrum device outside the scope of infringement
`
`under the doctrine of equivalents. A preliminary finding of infringement under the doctrine of
`
`equivalents is a sufficient basis to determine that DNAG is likely to succeed on the merits. See
`
`Abbott Labs. v. Andrx Pharms., Inc., 473 F.3d 1196, 1213 (Fed. Cir. 2007) (affirming grant of
`
`preliminary injunction after finding infringement under doctrine of equivalents).
`
`B.
`
`DNAG Will Be Irreparably Harmed if the Court Does Not Issue a
`Preliminary Injunction
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`A party seeking injunctive relief must establish that it is likely to suffer irreparable harm
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`in the absence of preliminary relief. Trebro Mfg. v. FireFly Equip., LLC, 748 F.3d 1159, 1165
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`(Fed. Cir. 2014). In the patent context, a patentee seeking injunctive relief must also show a
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`Case 1:15-cv-00661-SLR Document 9 Filed 08/24/15 Page 16 of 26 PageID #: 73
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`causal nexus between the infringing feature and consumer demand for the accused product.
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`Apple Inc. v. Samsung Elecs. Co., 695 F.3d 1370, 1375 (Fed. Cir. 2012).
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`Harm is likely to be irreparable where, as here, the patentee and infringer are direct
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`competitors, because the patentee is forced to compete against its own invention. Trebro Mfg.,
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`Inc., 748 F.3d at 1171; Douglas Dynamics, LLC v. Buyers Prods. Co., 717 F.3d 1336, 1345 (Fed.
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`Cir. 2013); Presidio Components, Inc. v. Am. Tech. Ceramics Corp., 702 F.3d 1351, 1363 (Fed.
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`Cir. 2012); Curry Decl. ¶¶ 17-21 (noting that Spectrum’s product is a direct competitor for the
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`DNAG Saliva Collection Products). “Indeed, the principal value of a patent is the right to
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`exclude arch competitors from making, selling and using an infringing product.” Butamax™
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`Advanced Biofuels LLC v. Gevo, Inc., 868 F. Supp. 2d 359, 374 (D. Del. 2012) (quoting
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`Fresenius Med. Care Holdings, Inc. v. Baxter Int'l, Inc., 2008 WL 928496, at *3 (N.D. Cal. Apr.
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`4, 2008)).
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`1.
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`DNAG Will Suffer Irreparable Harm As a Result of
`Spectrum’s Infringing Conduct
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`DNAG will suffer price erosion, loss of goodwill and damage to its reputation, and loss
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`of business opportunities unless Spectrum is enjoined. The Federal Circuit has repeatedly
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`recognized each of these market harms as irreparable. See, e.g., Aria Diagnostics, Inc. v.
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`Sequenom, Inc., 726 F.3d 1296, 1304 (Fed. Cir. 2013); Celsis in Vitro, Inc. v. CellzDirect, Inc.,
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`664 F.3d 922, 930 (Fed. Cir. 2012); see also Opticians Assoc. of Am. v. Indep. Opticians of Am.,
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`920 F.2d 187, 196 (3d Cir. 1990) (“Potential damage to reputation constitutes irreparable injury
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`for the purposes of granting a preliminary injunction in a trademark case.”).
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`a.
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`Spectrum’s Infringing Product Will Cause DNAG to
`Suffer Price Erosion
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`Erosion of market prices due to an infringer’s conduct constitutes irreparable harm
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`justifying a preliminary injunction. In Polymer Technologies, Inc. v. Bridwell, 103 F.3d 970
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`(Fed. Cir. 1996), the Federal Circuit reversed the denial of a preliminary injunction and
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`explained that the effects of price erosion cannot be remedied through money damages:
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`Competitors change the marketplace. Years after infringement has
`begun, it may be impossible to restore a patentee’s (or an exclusive
`licensee’s) exclusive position by an award of damages and a
`permanent injunction. Customers may have established
`relationships with infringers. The market is rarely the same when a
`market of multiple sellers is suddenly converted to one with a
`single seller by legal fiat. Requiring purchasers to pay higher
`prices after years of paying lower prices to infringers is not a
`reliable business option.
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`103 F.3d at 975-76 (emphasis added); see also Aria Diagnostics, 726 F.3d at 1304 (price erosion
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`is a recognized irreparable harm). As Dr. DeForest McDuff explains in his accompanying
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`declaration, competition from an infringing product reduces the price the patent holder can
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`charge, causing depressed prices. (McDuff Decl. ¶ 16.) Price erosion is particularly impactful
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`where, as here, the competing products are economic substitutes. (Id. ¶¶ 17-22.)
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`DNAG is particularly susceptible to price erosion. DNAG invests significant amounts of
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`money in research and development in order to maintain its position as the technology leader in
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`the market. (Curry Decl. ¶¶ 4, 7-9.) It also invests in costly quality control measures, and is ISO
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`certified for medical device quality management and compliant with FDA medical device quality
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`system requirements. (Id. ¶¶ 8-9.) Because DNAG must sell its Saliva Collection Products at a
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`price sufficient to recoup its research and development expenses while continuing to innovate, its
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`products are the most expensive ones in the market. (Id. ¶ 9.) Due to its comparatively
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`expensive product, DNAG is vulnerable to price-based competition that will result in
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`degradation of pricing and profit margins. (McDuff Decl. ¶ 17 (referencing public financial
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`disclosures).)
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`b.
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`Spectrum’s Infringing Product Will Damage DNAG’s
`Relationship with Current and Potential Customers
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`Harm to a company’s brand distinction and reputation in the market is sufficiently
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`irreparable to warrant an injunction. Douglas Dynamics, LLC, 717 F.3d at 1344; Celsis, 664
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`F.3d at 930 (loss of goodwill and damage to reputation are grounds for finding irreparable harm).
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`For example, where a cheaper product makes its place in the market “by infringing on the
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`intellectual property of the [better product] and capitaliz[ing] on its similarity to the better
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`product,” then harm goes “beyond a simple counting of lost sales.” Douglas Dynamics, 717 F.3d
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`at 1344. Likewise, where an infringer attempts to take for itself the benefits of a patentee’s
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`innovations and market development efforts, the resulting harm to the patentee’s goodwill and
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`reputation is irreparable. See 3M Unitek Corp. v. Ormco Co., 96 F. Supp. 2d 1042, 1051 (C.D.
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`Cal. 2000) (“If defendant is allowed to free ride on plaintiffs’ innovation and technological
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`achievements it will permanently injure plaintiffs’ reputation and goodwill within the
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`orthodontic community.”)
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`If Spectrum is allowed to market its knock-off version of DNAG’s patented product,
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`DNAG will suffer irreparable harm to its brand distinction, its reputation as an innovator, and the
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`customer goodwill that it has spent years developing. DNAG’s business reputation is based on
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`the success and performance of the Saliva Collection Products. (Curry Decl. ¶¶ 4-6.) Many of
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`DNAG’s customers actually know DNAG as “the Oragene company”—the tradename for the
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`Saliva Collection Products—rather than its actual business name. (Id. ¶ 5.)
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`The key feature distinguishing the revolutionary Saliva Collection Products from
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`DNAG’s competitors is the two-compartment container system covered by the ’381 patent.
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`(Curry Decl. ¶ 7.) This two-compartment container system reduces user error and allows DNAG
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`Case 1:15-cv-00661-SLR Document