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

Background

ecoNugenics owns six United States patents concerning the administration of modified citrus pectin to mammals, particularly humans, for various medical conditions. Its original complaint alleged that Bioenergy directly and indirectly infringed those patents. The complaint stated that Bioenergy’s customers purchased and administered the product themselves, and that testing showed Bioenergy’s modified citrus pectin could not enter mammalian circulation and bind heavy metals and galectin-3 in the blood.

Bioenergy moved to dismiss. In an earlier order, the court dismissed ecoNugenics’s claims against Bioenergy, concluding that the allegation about the product’s inability to perform functions required by the patents made infringement implausible. The court also concluded that ecoNugenics had not plausibly alleged direct infringement by Bioenergy because the complaint said customers administered the product. Because direct infringement is required for contributory or induced infringement, the court dismissed those indirect-infringement theories as well. The earlier dismissal was expressly without prejudice.

After that dismissal, ecoNugenics filed another action involving the same patents, defendants, and product. The court treated that pleading as an amended complaint, consolidated it with the original action, then dismissed it on its own motion because ecoNugenics had not sought permission to amend. ecoNugenics then moved under Federal Rule of Civil Procedure 15 for leave to file a second amended complaint. The proposed complaint asserted five of the six patents, dropping the claims involving the ’302 patent.

Arguments and analysis

Bioenergy argued that the proposed amendment was untimely, futile, and made in bad faith. The court rejected undue delay as a basis for denial. It measured delay from the September 4, 2018 dismissal order and found that ecoNugenics acted diligently by filing the later motion 21 days after the court dismissed the improperly filed amended complaint and before discovery began.

The court also declined to deny the motion based on bad faith arising from counsel’s filing procedures. Although the court described the conduct as inconsistent with the rules and expressed doubt about counsel’s explanation, it found that the explanation was not implausible enough to establish dishonest intent. The court did, however, analyze the proposed substantive changes as both bad faith and futile.

For purposes of futility, the court applied the same standard used for a motion to dismiss for failure to state a claim. A proposed amendment is futile if it would not plead enough facts to state a legally plausible claim. The court held that it could consider facts ecoNugenics had previously asserted and that ecoNugenics could not remove or contradict admissions that had caused the original complaint to fail.

The proposed second amended complaint deleted the earlier allegation that testing showed Bioenergy’s product could not enter the bloodstream and bind heavy metals and galectin-3. The court held that ecoNugenics could not simply delete that damaging admission to make the infringement claims appear plausible. The proposed amendment was therefore futile and made in bad faith on that ground.

The proposed complaint also alleged that Bioenergy “administers” modified citrus pectin by providing or selling it to consumers. The court found that this contradicted the original complaint’s allegation that Bioenergy did not administer the product and that customers administered it themselves. The court rejected ecoNugenics’s argument that the new allegations merely clarified the earlier pleading.

The court further held that the ordinary meaning of “administer” in the patents was to introduce or ingest medication, not merely to make it available, provide it, market it, or sell it. It reasoned that treating “administer” as meaning “provide to” or “market” would effectively make modified citrus pectin itself patentable, contrary to ecoNugenics’s own position. The court also found the proposed allegations that Bioenergy “selected” patients through advertising futile because the customers who purchased and self-administered the product performed the selection.

Disposition

The court found that the proposed amendments were futile and made in bad faith and that the proposed second amended complaint would not survive a motion to dismiss for failure to state a claim. It therefore ordered: “Plaintiff’s Motion to Amend Its Complaint [Dkt. No. 59] is DENIED.” The opinion did not decide whether the asserted patents were valid or whether Bioenergy ultimately infringed them.