Central District Of California Finds A Presumption of Patent Infringement And Shifts The Burden To Defendants Pursuant To Section 295
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  • Central District Of California Finds A Presumption Of Patent Infringement And Shifts The Burden To Defendants Pursuant To Section 295
     

    04/27/2022
    On April 7, 2022, Judge Selna of the United States District Court for the Central District of California (CDCA) granted plaintiff’s motion for a presumption of patent infringement and to shift the burden pursuant to 35 U.S.C. § 295.  PureCircle USA Inc. et al v. SweeGen, Inc. et al, 8-18-cv-01679.

    Plaintiff PureCircle USA Inc. (PureCircle) accused defendants of infringing two patents directed to processes of manufacturing certain sweeteners under 35 U.S.C. § 271(g).  A defendant could be found to infringe a process patent pursuant to § 271(g) where it “imports into the United States … a product which is made by a process patented.”  Section 295, in turn, provides that in an action for patent infringement pursuant to § 271(g), the court shall presume that the product was made using an infringing process, and the burden of establishing otherwise shall be on the defendant, where:  “(1) a substantial likelihood exists that the product was made by the patented process, and (2) [] the plaintiff has made a reasonable effort to determine the process actually used in the production of the product and was unable to so determine.”  Judge Selna explained that “Congress passed § 295 to solve the great difficulties a patentee may have in proving that the patented process was used in the manufacture of the product in question where the manufacture occurred abroad” (internal citations omitted).

    In this case, the accused products were manufactured in China by Anhui Longking Biotechnology Co., Ltd. (Anhui).  Both Anhui and all defendants were majority owned by the same individual, who also served as the Chief Executive Officer and a director of each defendant.  PureCircle sought discovery regarding the manufacturing process from defendants and from Anhui by filing an unopposed motion for issuance of a letter of request pursuant to the Hague Convention.

    PureCircle then moved for a finding that defendants presumptively infringed the claims of the at-issue patent under § 295.  PureCircle argued that defendants have maintained throughout the case that they lack control over Anhui, despite defendants’ common ownership with Anhui, and have refused to produce any documents related to Anhui’s manufacturing process.  Judge Selna found that PureCircle made reasonable efforts to determine whether Anhui actually uses PureCircle’s patented manufacturing process.  PureCircle actively sought information from defendants about how defendants manufactured the at-issue products and also made reasonable and diligent efforts to obtain the same information from non-party manufacturers, including Anhui.  Judge Selna also found that defendants’ relationship with Anhui is highly relevant because defendants used their foreign manufacturer’s separate entity status as both a sword and a shield.  Thus, the Court concluded that defendants are in a far better position than the patentee to determine whether or not Anhui used the method claimed in the at-issue patent based on defendants’ relationship with Anhui.

    PureCircle argued that there is substantial likelihood that Anhui manufactures the at-issue products using the process claimed in the at-issue patent based on a defendant’s regulatory submissions to the Federal Drug Administration (FDA), a public presentation regarding the accused products, and independent chemical testing.  Defendants pointed to inconsistencies in the evidence presented by PureCircle.  The Court rejected such arguments, noting that even if defendants’ theory was plausible, the relevant standard for § 295 does not require PureCircle to satisfy its burden of proving patent infringements.

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