Patent Dispute Over Frontline Kept Alive

     ATHENS, Ga. (CN) – The maker of the anti-flea product Frontline Plus can advance patent infringement claims against a French competitor, a federal judge ruled.
     Merial Limited, a global animal health company based in Duluth, Ga., developed and patented Frontline Plus, a pesticide treatment against fleas and ticks on dogs and cats. After Frontline Plus became commercially successful, French company Ceva Sante Animale tried to introduce generic equivalents of the product on the American market, according to court filings.
     Merial sued Ceva France for planned patent infringement, seeking to block the generics from entering the market. It also sued Ceva’s American subsidiary, Ceva Animal Health, claiming that it had induced Ceva France’s planned infringement of the patent by offering marketing, sales and regulatory applications support.
     Ceva moved to dismiss, arguing that the court lacked jurisdiction over Ceva France. It also claimed that Merial’s amended complaint failed to state a claim for induced infringement against Ceva USA.
     Concluding that the court could not yet determine jurisdiction, U.S. District Judge Clay Land granted Merial’s request for jurisdictional discovery to determine Ceva France’s relationship with its American subsidiary and the extent of its direct contacts with Georgia.
     Merial had alleged that Ceva France had extensive contacts with Georgia, because it participated in trade shows in Atlanta and offered its products for sale in the state.
     But Land found that those contacts were not continuous and systematic, and that no evidence linked the Frontline Plus lawsuit to the products Ceva France tried to market in Georgia.
     The court agreed that Ceva France and Ceva USA were closely related, but noted that it was impossible to determine to what extent Ceva France does business in Georgia.
     Ceva France, which owns 70 percent of Ceva USA through one of its subsidiaries, has sold products in the United States through Ceva USA. Merial has also proven that several officers and employees have served both companies, according to the Sept. 4 order.
     Ceva USA nevertheless operates separately from Ceva France, maintains separate financial accounts, and files its own tax returns in the United States.
     Jurisdictional discovery will allow Merial to determine the extent of Ceva France’s contacts with Georgia, and the scope of Ceva USA’s involvement in the efforts to introduce the generics in the United States, the order states.
     Land refused to dismiss the induced infringement claim against Ceva USA, rejecting its argument that it had only provided general regulatory and marketing advice to its French parent. If jurisdictional discovery reveals that Ceva USA’s involvement was limited, those claims can be resolved at summary judgment, according to the ruling.
     The judge also refused to dismiss the lawsuit in favor of a declaratory judgment action Ceva France had filed in Delaware, seeking invalidation of several patent claims.
     Merial withdrew from arbitration on Sept. 13.
     A representative for Merial declined to comment on pending litigation.
     Ceva USA did not return requests for comment.

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