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BASF Plant Science, LP v. Commonwealth Scientific and Industrial Research Organisation

United States District Court, E.D. Virginia, Norfolk Division

May 7, 2019

BASF PLANT SCIENCE, LP, AND CARGILL, INC., Defendants- Counterdefendants

          OPINION & ORDER


         These matters come to the Court on two (2) motions to dismiss, one filed by Defendant-Counterclaimant Cargill, doc. 101, and one filed by Defendants-Counterclaimants Commonwealth Scientific and Industrial Research Organization ("CSIRO"), doc. 177; and a motion to compel, doc. 108, filed by CSIRO. On April 10, 2019, this Court heard arguments on these motions as well as arguments on the parties proposed constructions of several disputed terms. This Court DENIED both motions to dismiss and GRANTED the motion to compel IN PART and DENIED it IN PART from the bench. This Opinion and Order is issued to further explain the reasons stated on the bench.

         I. BACKGROUND

         This patent infringement and contract action is the latest in a series of intellectual property and other legal battles across the globe between the parties. See Am. Compl. ¶¶ 24-25. This case is about United States patents on plants which formulate certain "long chain" fatty acids.

         BASF Plant Science is incorporated in Delaware with its principal place of business in New Jersey. Doc. 43 ¶ 1. Cargill is a corporation incorporated in Delaware with its principal place of business in Minnesota. Doc. 101-1. ¶ 3. Cargill maintains large distribution networks and has some business in Virginia. See Id. ¶¶ 9-10.

         Commonwealth Scientific and Industrial Research Organization ("CSIRO") is an Australian entity created by the Australian government with its principal place of business in the Australian Capital Territory ("ATC"). The Grains Research and Development Corporation is also an Australian entity with its principal place of business in ATC. Nuseed Pty. Ltd. has its principal place of business in Victoria, Australia.

         BASF Plant Science, LP (collectively with counterclaim-defendant, BASF Plant Science GMBH, "BASF") is a self-described "pioneer" in developing plant-based biotechnology. Am. Compl. ¶ 15. Since 1998, BASF has attempted to create a plant which can make long chain omega-3 polyunsaturated fatty acids ("LC-PUFA"), docosahexaenoic acid ("DHA") and eicosapentaenoic acid ("EPA").[1] Id. In 2011, BASF and Cargill entered into an agreement to commercialize a canola oil product that would contain such fatty acids. Id. ¶¶ 16-18. BASF agreed to develop the seeds and obtain regulatory approval, and Cargill agreed to cultivate, process, extract, and commercialize the oil product. Id. ¶ 17. Cargill and BASF planned to grow and cultivate their seeds across the United States, but not in Virginia. Doc. 101-1 ¶ 8; doc. 102 at 11. At the hearing, counsel asserted that the agreement states that the cooperative between the two (2) entities is not a partnership, notwithstanding their cooperation for mutual benefit and profit. In November of 2017, BASF petitioned the United States Department of Agriculture for deregulation of canola seeds rich in the fatty acids. Am. Compl. ¶ 21. Approval is expected this year. Id.

         On March 1, 2008, Commonwealth Scientific and Industrial Research Organization ("CSIRO") and BASF entered into a Materials Transfer and Evaluation Agreement. ("MTEA"). Doc. 165-1 ("MTEA"). Under the MTEA, the parties wished to collaborate and jointly evaluate each other's genetic data on EPA and DHA producing plants. MTEA Recitals at B. The MTEA speaks to how the parties will share information and how they will respectively own resulting intellectual property. Id. ¶¶ 4-6. The MTEA was governed "by the law in force in The Australian Capital Territory" and the parties thereto agreed to "submit to the exclusive jurisdiction of the courts of the Australian Capital Territory." Id. ¶ 14.1. That agreement was to last for two (2) years. Id. ¶ 2.1. According to its "survival clause" clauses 1, 6, 8, 9, 9, 10, 11.3, and 12 survived termination; the choice of law and forum provision was not on that list. Id. (¶ 11.4(a).

         BASF deposited samples of the seeds that it and Cargill had developed with the American Type Culture Collection ("ATCC") in Manassas, Virginia as a part of its patent requirements. Doc. 43 ¶ 19. On March 22, 2017, BASF learned that Nuseed had requested samples of its seeds from ATCC. Id. ¶ 35.

         In 2016, after BASF and CSIRO had discussed cross-licensing their similar patents, BASF and Nuseed Pty. Ltd. ("Nuseed") began discussing United States licenses. Id. ¶ 25. Evidently, Nuseed demanded high net payments, which BASF thought was unacceptable. Id. (¶ 33. BASF believed there to be a "clear and immediate" threat of litigation, so it filed suit on April 13, 2017 in the District of Delaware. Id. ¶¶ 37-38. That court held that Nuseed would have lacked standing to sue on the patents and dismissed the complaint without prejudice to filing in a forum that could exercise jurisdiction over CSIRO. Id. ¶ 38.

         The procedural history of this case is summarized in this Court's Claim Construction Order. In the interest of brevity, this Court will not repeat that summary.


         The Court heard arguments on two (2) motions to dismiss: the first filed by Cargill to dismiss it from the case for lack of personal jurisdiction and improper venue, doc. 101, and the second filed by CSIRO to have certain counterclaims and defenses dismissed under the common law doctrine of forum non conveniens in favor of an Australian forum, doc. 177. For reasons stated at the hearing and in this Opinion and Order, both motions are DENIED.


         Cargill moved under rules 12(b)(2) and 12(b)(3) of the Federal Rules of Civil Procedure to dismiss it from the case, arguing that this Court lacks personal jurisdiction over it and this Court is an improper venue. Doc. 101.

         i. Personal Jurisdiction

         (1) Legal Standard

         When resolving a motion to dismiss under Rule 12(b)(2), courts should conduct a two-step process: first, a court must determine whether the long-arm statute of the state in which it sits would authorize service of process of the Defendant, and second, whether the assertion of personal jurisdiction violates due process. Genetic Implant Systems, Inc. v. Core-Vent Corp., 123. F.3d 1455, 1458 (Fed. Cir. 1997).

         In Virginia, the long-arm statute has been read to generally permit jurisdiction as far as the Due Process Clause will permit. Prototype Prods.. Inc. v. Reset. Inc.. F.Supp.2d 691, 700 (E.D. Va. 2012): see also Touchcom. Inc. v. Bereskin & Parr. 574 F.3d 1403, 1411 (Fed. Cir. 2009) (observing that "satisfaction of Virginia's requirements for service of process is satisfied when due process is satisfied"). Accordingly, the analysis here revolves solely around the second prong of the personal jurisdiction analysis.

         A court's exercise of jurisdiction over the parties before it must comply with the requirements of the federal Constitution, specifically the Due Process Clause. Int'l Shoe V.Washington. 326 U.S. 310, 316 (1945). As the Supreme Court declared, "due process requires only that in order to subject a defendant to a judgment in personam, if he be not present within the territory of the forum, he have certain minimum contacts with it such that the maintenance of the suit does not offend 'traditional notions of fair play and substantial justice."' Id. "But the foreseeability that is critical to due process analysis is . . . that the defendant's conduct and connection with the forum State are such that he should reasonably anticipate being haled into court there." World-Wide Volkswaeon Corp. v. Woodson. 444 U.S. 286, 297 (1980).

         Whether personal jurisdiction is properly exercised over a foreign defendant entails weighing three (3) factors: (1) whether the defendant purposefully directed activities to residents of the forum, (2) whether the claim arise out of or relates to the defendant's activities with the forum, and (3) whether assertion of personal jurisdiction is reasonable and fair. Kilink. Inc. v. Paost Licensing GmbH & Co. KG. 848 F.3d 1346, 1353 (Fed. Cir. 2017). Activities conducted outside the forum may sufficiently tie a defendant to the forum if the activities constitute a purposeful availment of the forum and its laws. Am. GNC Corp. v. GoPro. Inc.. 2018 WL 6074395, at *11 (S.D. Cal. November 6, 2018) ("Federal Circuit precedent shows that such indirect, yet purposeful contacts with the forum provide a basis for the exercise of personal jurisdiction."). Moreover, contacts of a third party can be imputed onto another party for purposes of personal jurisdiction. Celgard, LLC v. SK Innovation Co.. 792 F.3d 1373, 1379 (Fed. Cir. 2015); see also Ann. Patent Digest (Matthews) § 36:80 ("Generally, the acts of an agent acting within in the scope of its agency, and the resulting contacts there from, are imputable to the principal for determining specific personal jurisdiction of the principal."); Daimler AG v. Bauman, 571 U.S. 117, 135 n.13 (2014) ("[A] corporation can purposefully avail itself of a forum by directing its agents or distributors to take action there.").

         (2) Discussion

         CSIRO argues that this Court may exercise general jurisdiction over Cargill, because of Cargill's "robust and systematic contacts" with Virginia. Doc. 107 at 24. CSIRO argues that these contacts include Cargill's 1, 800 employees in Virginia, its business locations is seven (7) Virginia cities, its land ownership in Virginia, and creates a large quantity of product here in Virginia. Id. It also argues that the fact that Cargill has registered to business in Virginia provides a "separate and independent" basis for general jurisdiction. Id. at 25. Moreover, CSIO argues that conduct that BASF performed on behalf of Cargill and with Cargill's permission, such as the ATCC deposit, is attributable to Cargill for purposes of personal jurisdiction. Doc. 107 at 16-17.

         Cargill argues that this Court lacks general jurisdiction over it, because it is not "essentially at home" in Virginia and that there are no exceptional circumstances which would otherwise justify exercising jurisdiction. Doc. 102 at 16-17. Cargill argues that it is a Delaware corporation with its principal place of business in Minnesota. Id. at 16. Responding to CSIRO's argument that business registration provides general jurisdiction, Cargill argues that such an interpretation has been rejected by many courts and defies common sense. Doc. 114 at 13.

         The Court is persuaded by CSIRO's argument. It is difficult to imagine how Cargill could not anticipate being haled into this Court for this dispute. To begin, Cargill has an extensive presence in this Commonwealth. It employs 1, 800 employees, owns land in Virginia, it is registered to do business here, and maintains business locations throughout the Commonwealth. Accordingly, the Court is of the opinion that Cargill has purposefully availed itself of Virginia; its laws; and, consequently, its jurisdiction.

         Moreover, the Court believes that the agreement between BASF and Cargill amounts to a partnership, notwithstanding what it may say.[2] Both parties entered into an agreement to commercialize the deposited seeds for their own mutual economic benefit. Furthermore, the parties divided the work necessary to accomplish those ends. Thus, when BASF deposited the seeds with the ATCC in this District and filed suit in this District, it brought matters central to that partnership into this Court's jurisdiction. Cargill does not dispute that this was done pursuant to, in fact critical to, the goals of its agreement with BASF. Cargill and BASF are working together to commercialize their potentially infringing product, and in doing so took action in this District. Indeed, Cargill and BASF are in "lock step" in their business strategy. Doc. 43. If 32. ...

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