j. walter v. chemfree

8/3/2019 J. Walter v. ChemFree

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UNITED STATES DISTRICT COURT FORSOUTHERN DISTRICT OF IOWAJ. WALTER, INC., ) Case No.

)Plaintiff, )v. COMPLAINT FOR DECLARATORY

~ RELIEFCHEMFREE CORPORATION, )Defendant.

The Plaintiff, J. Walter, Inc. (Walter), for its complaint against Defendant ChemFreeCorporation (ChemFree), herby alleges as follows:

NATURE OF THE ACTION1. Walter is a pioneer in and a leading provider of bioremediating parts washers,

bioremediating cleaning fluids, and associated technology. This lawsuit seeks to put an end toChemFrees unjustified and incorrect assertions that Walters bioremediating parts washertechnology infringes any valid claim of ChemFrees U.S. Patent No. 7,980,257 (the 257Patent), and to silence ChemFrees threats to sue Walter if Walter does not take a l icense underthat patent.

2. The essential issues in this ease have already been litigated, with a ruling inWalters favor. ChemFree sued Walter in Civil Action No. 1 :04-CV-37 11 in the United StatesDistrict Court for the Northern District of Georgia in 2004 for infringement of four other patents,each directed to bioremediating parts washing technology. In a June 18 , 2010 Order, theHonorable Judge Jack T. Camp found that all asserted ChemFree patent claims were invalid forobviousness. In a June 6, 2011 decision, after the resignation of Judge Camp, the HonorableJudge Charles R. Wolle of this Court, sitting by designation, found no sound basis for changing

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any part of Judge Camps well-reasoned order entered on June 18 , 2010. Those Orders are nowon appeal to the United States Court of Appeals for the Federal Circuit.

3. The 257 Patent issued on July 19, 2011 and is directed to the same parts washingtechnology already found to be unpatentable in the Orders issued by Judge Camp and JudgeWolle. Nonetheless, ChemFree wrongly contends that Walters parts washing technologyinfringes one or more claims of the 257 Patent.

4. ChemFrees conduct has, and continues to, put Walter under a reasonableapprehension of yet another suit, and there exists a justiciable controversy between ChemFreeand Walter. By this lawsuit, Walter seeks a declaratory judgment that Walters bioremediatingparts washers and associated technology do not infringe any valid claim of U.S. Patent No.7,980,257. Walter further seeks an award of attorneys fees to compensate Walter for the cost ofneedlessly having to defend itself against claims of infringement for technology that has beenfound to be not patentable.

The Part ies5. J. Walter, Inc. is a Delaware corporation with a place of business at 810 Day Hill

Road, Windsor, Connecticut 06095.6. On information and belief, ChemPree Corporation is a Georgia corporation with a

place of business at 8 Meca Way, Norcross, Georgia 30093.Jurisdiction and Venue

7. This is an action under the patent laws of the United States, Title 35 of the UnitedState Code, and the Declaratory Relief Act, 28 U.S.C. 2201-02.

8. This Court has subject matter jurisdiction pursuant to 28 U.S.C. ~133l, 1338(a)and 2201(a).

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9. This Court has personal jurisdiction over ChemFree because ChemFree sells partswashers that are allegedly covered by the claims of the 257 Patent in Iowa through NAPA AutoParts Stores. As of the filing of this complaint, NAPA stores in the Southern District of Iowapossessed at least one and perhaps more parts washers allegedly subject to the claims of the 257Patent. ChemFree further distributes its parts washers nationally through Home Depot, PepBoys, and Firestone stores and, on information and belief, this network includes distributionthrough stores in Iowa. On information and belief, ChemFree engages in electronic mail,telephonic, internet, and written communications with distributors and customers in Iowapursuant to its distribution activities in this state.

10. Venue is proper in this District pursuant to 28 U.S.C. ~1391. Venue isparticularly appropriate in this district before the Honorable Judge Charles R. Wolle because thisis a related case to Northern District of Georgia Civil Action No. 1 :04-cv-1371 1 which wasadjudicated by Judge Wolle following Judge Camps resignation.

FACTUAL ALLEGATIONSWalters Technology

11 . For many years, Walter has provided a wide range of industrial supplies includingcleaners, degreasers, lubricants, and other chemical solution products. As a result of thosebusiness activities, Walter was aware of the need to clean metal parts and the like that had beenfouled by oil, grease, and other hydrocarbon contaminants.

12 . It was known in the art to provide a sink-on-a-drum parts washer that used avolatile organic solvent-based cleaning fluid to clean contaminated parts. There were issues withsuch parts washers and cleaning fluids. For example, volatile organic solvent-based cleaningfluids were environmentally harmful and disposal of used volatile organic solvent-based cleaningfluids was problematic.

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13 . Walter developed a bioremediating parts washer that utilizes an aqueous (water-based) cleaning fluid. Walter developed a cleaning fluid that included a surfactant (soapsolution) and microorganisms that are capable of remediating or digesting hydrocarboncontaminants washed from parts. Walter proceeded to develop a line of parts washers thatemployed Walters cleaning fluid, in which the surfactant assists in cleaning the parts and themicroorganisms bioremediate the hydrocarbon contaminants that are washed from parts.

14 . Walters parts washers share many common features with the prior art sink-on-adrum volatile organic solvent parts washers. Both provide a sink or basin within which to washor clean a part, a reservoir tank that contains and holds a cleaning fluid, a pump to draw cleaningfluid from the reservoir and deliver it through a hose to a nozzle associated with the sink, and adrain to return used cleaning fluid (including the hydrocarbon contaminants) to the reservoirtanic. Walter proceeded to offer and sell such products in the United States, including in Iowaand elsewhere.

The Prior Litigation15 . In 2004, ChemFree sued Walter for patent infringement in The Northern District

of Georgia, Civil Action No. 1 :04-CV-371 1 (the Fi rs t Action). ChemFree alleged thatWalters bioremediating parts washer technology infringed selected claims of the followingChemFree patents:

1. U.S. Patent No. 6,019,110 (110);2. U.S. Patent No. 6,074,491 (491);3. U.S. Patent No. 6,374,835 (835);4. U.S. Patent No. 6,440,226 (226); and5. U.S. PatentNo. 6,451,125 (125).

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16 . Each of the ChemFree patents asserted in the First Action was directed to analleged invention in parts washing technology having three basic components: (a) abiodegradable, non-caustic, non-toxic, non-flammable, oil-dispersant/degreasing fluid; (b) theuse ofmicroorganisms to break down and remediate grease and oil; and (c) the physical structureand associated mechanical and electromechanical assemblies of a sink on a drum as used tocirculate the cleaning solution and contain it while it breaks down oi l and grease contaminants.

17 . After extensive discovery, both fact and expert, ChemFree withdrew itsallegations of infringement of the 491 Patent in the First Action. ChemFree s remaininginfringement allegations in the First Action were tried to the Court in a week-long bench trialbetween July 13 and 17, 2009.

18 . On June 18, 2010, The Honorable Judge Jack T. Camp of the Northern District ofGeorgia entered a lengthy Order in the First Action comprising findings of fact and conclusionsof law ruling that all asserted claims of the four ChemFree patents were invalid for obviousnessunder 35 U.S.C. 103.

19 . On July 6, 2010, July 23, 2010, and October 12 , 2010, ChemFree filed in the FirstAction extensive post trial motions for reconsideration, a new trial, and additional findings andconclusions. Judge Camp resigned from the bench on November 19 , 2010, before he heard anddecided ChemFrees post trial motions.

20. At the request of the Chief Judge of the Northern District of Georgia, the ChiefJudge of the United States Court of Appeals fo r the Eleventh Circuit certified the necessity forthe designation and assignment of a judge from another court to succeed Judge Camp. OnDecember 23, 2010, the Honorable Judge Charles R. Wolle of this Court succeeded Judge Camp

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by intercircuit assignment. Accordingly, Judge Wolle presided over the disposition of post trialmotions in the First Action.

21. Judge Wolle reviewed and became familiar with the entire relevant record in theFirst Action. At ChemFrees request, on motion, Judge Wolle received inventor testimony.Judge Wolle heard argument by counsel for the parties.

22. On June 6, 2011 Judge Wolle entered an order in the First Action denyingChemFree s post-trial motions and directing entry of judgment fo r Walter. Judgment wassubsequently entered for Walter.

The ChemFree 257 Patent23. On information and belief, ChemFree owns an undivided one-half interest in the

257 Patent, which is entitled Parts Washing System. The 257 Patent shares a commonspecification with ChemFrees 110 Patent, 491 Patent, 835 Patent, and 125 Patent. The 257Patent, the 110 Patent, the 491 Patent, the 835 Patent, the 125 patent and the 226 Patent allderive from a common parent patent application filed on September 30, 1994.

24. Each of the ChemFree patents, including the 257 Patent, are directed to partswashing technology having three basic components: (a) a biodegradable, non-caustic, non-toxic,non-flammable, oil-dispersant/degreasing fluid; (b) the use of microorganisms that break downand remediate grease and oil; and (c) the physical structure and associated mechanical andelectromechanical assemblies used to circulate the cleaning solution and contain it while itbreaks down oi l and grease contaminants. More specifically, the 257 Patent is directed to thesame invention as the four ChemFree patents found to be invalid in the First Action.

25. ChemFree did not disclose Judge Wolles June 6, 2011 Order in the First Actionto the U.S. Patent Office during prosecution of the 257 Patent.

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ChemFrees Assertion of the 257 Patent Against Walter26. Notwithstanding that the 257 Patent is directed to the same invention as the four

ChemFree patents found to be inva lid in the First Action, ChemFree has repeatedly accusedWalter of infringing the 257 Patent.

27. ChemFree accused Walter of infringement of the 257 Patent in a March 24, 2011email, before the 257 Patent had even issued. Specifically, ChemFree sent to Walter byelectronic mail a notice of ChemFrees provisional r ights under 35 U.S.C. 154(d) to areasonable royalty from a person who makes, uses, offers for sale, or sells in the United Statesthe invention as claimed in the published patent application that eventually matured into the 257Patent.

28. ChemFree again accused Walter of infringement of the 257 Patent in a July 29,2011 email. In that email, ChemFree stated:

We have reviewed some of the publicly available product literature and productdemonstrations videos on J. Walters Bio-Circle L Fluid and its Mini and Maximodel parts washers. It appears to ChemFree that both the Mini and the Maximodels practice one or more claims of the 258 [sicl Patent.

In the email, ChemFree proceeded to offer Walter a license under the 257 Patent.29. Walter is continuing to offer for sale and to sell parts washing technology that

ChemFree wrongly claims to infringe the 257 Patent. Because Walter does not infringe anyvalid claim of the 257 Patent, Walter has no intention to take a l icense under the 257 Patent.Hence, Walter has a reasonable apprehension of suit and there is a justiciable issue betweenWalter and ChemFree regarding the 257 Patent and the scope of ChemFrees purported patentrights.

COUNT I Declaratory Judgment30. Paragraphs 1-29 are incorporated by reference as if fully set forth herein.

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31. The claims of the 257 patent are invalid for failure to meet the requirement of thepatent laws of the United States, including 35 U.S.C. 102, 103 and 112.

32. Walter seeks a declaration that the claims of the 257 Patent are invalid and thatWalter does not infringe any valid claim of the 257 Patent.

COUNT II Attorneys Fees33. The 257 Patent is directed to the same invention as that found to be invalid and

not patentable and for which essentially similar patents were found invalid in the First Action.34. ChemFree has sought to require Walter to take a license under the 257 Patent

even though the 257 Patent covers the same invention as that found to be unpatentable and forwhich essentially similar patents were found inval id in the First Action.

35. ChemFree has sought to enforce the 257 Patent by requiring Walter to take alicense when ChemFree knows the 257 Patent to be invalid in view of the decision in the FirstAction.

36. ChemFree has improperly attempted to extend the scope of i ts purported patentrights by requiring Walter to take a license under the 257 Patent.

37. In view of these facts, the instant action is an exceptional case fo r which Waltershould be awarded a reasonable attorneys fee under 15 U.S.C. 285. Walter seeks an award ofattorneys fees as appropriate and justified under the present circumstances.

WHEREFORE, the Plaintiff, J. Walter, Inc., respectfhlly requests that the Court:

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A. Enter an order declaring that the claims of the 257 patent are invalid;B. Enter an order declaring that Walter does not infringe any valid claim of the 257Patent;C. Enter an order declaring that ChemFree has improperly sought to extend the scopeof its purported patent rights;D. Enter an order declaring this an exceptional case pursuant to 35 U.S.C. 285, andawarding Walter its attorney fees, costs, and expenses; andE. Grant to Walter such other and thither relief as may be just and appropriate.

WEINHARDT & LOGAN, P.C.

Mark E. Weinhardt AT0008280Holly M. Logan AT0004710Daniel le M. Shelton AT00071842600 Grand Avenue, Suite 210Des Moines, IA 50312Telephone: (515) 244-3100E-mail: mweinhardt~weinhardtlogan.comhlogan~weinhardtlogan.comdshelton~weinhardtlogan.com

OF COUNSEL:McKEON, MEUNIER, CARLIN & CURFMAN,LLCAnthony AskewStephen M. Schaetzel817 West Peachtree StreetSuite 900Atlanta, GA 30308Telephone: (404) 645-7724ATTORNEYS FOR PLAINTIFF

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j. walter v. chemfree

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