ZMC seeks $100 million in CoQ10 damages, but Kaneka dismisses claim as 'wishful thinking'

By Stephen Daniells

- Last updated on GMT

ZMC seeks $100 million in CoQ10 damages, but Kaneka dismisses claim as 'wishful thinking'

Related tags: Kaneka, Coenzyme q10

Co-enzyme Q10 suppliers ZMC-USA and Zhejiang Medicine Company, Ltd. have filed an amended complaint against Kaneka Corporation for damages in excess of $100 million in an ongoing dispute over CoQ10 patents.

ZMC’s announcement comes in response to an alleged failure by Kaneka to withdraw letters it sent suggesting that ZMC was infringing on its patent, as ordered by a US District Court judge in August.

In response, Kaneka states the claim to $100 million in damages “is devoid of any factual or legal basis, and, as such, is nothing but a pure publicity stunt based on fantasy, wishful thinking and fiction”​.

History

The dispute has centered on patent #7,910,340 issued on March 22, 2011 and entitled, “Process for Producing Coenzyme Q10”​: The patent described the production of ubiquinol (CoQ10) from ubiquinone (QH – the reduced form of CoQ10).

Kaneka filed an initial complaint in Los Angeles against ZMC-USA and Zhejiang Medicine Co., and this was subsequently transferred to Texas. Kaneka voluntarily dismissed this case on August 25, 2011.

The initial filing was followed by a complaint in the same Southern District of Texas by ZMC seeking “a declaration from the Court that the claims of Kaneka’s most recent patent are not infringed by ZMC and are invalid, unenforceable, void and of no legal consequence”​.

Kaneka also filed a case with the ITC against seven CoQ10 suppliers, and this filing was followed by letters being sent on behalf of Kaneka to several companies discussing the alleged patent infringement.

On August 22, 2011, US District Court Judge Lynn Hughes ordered Kaneka to withdraw the letters it sent suggesting that ZMC was infringing on its patent.

Retraction?

Despite Judge Hughes’ order to withdraw its letters, ZMC alleges that: “Kaneka has refused to retract the public assertions in its letters that ZMC's process of making CoQ10 infringes the Kaneka patent”​.

As a result of this alleged lack of retraction, ZMC claims to have “suffered severe damage including lost sales and business opportunities”​.

In its amended complaint, ZMC is now seeking “awards of compensatory and punitive damages in excess of $100 million against Kaneka, as well as a declaration that ZMC has not infringed any valid and enforceable claim of the Kaneka patent”.

No standing order

Fighting back, Kaneka has stated that there is no standing order requiring Kaneka to withdraw those letters in the any of the two pending cases before the district court or the ITC.

“If Kaneka was in violation of a standing order issued by a federal judge, it would have been subject to contempt, which is not the case,”​ said the company.

According to Dr Dariush Adli, Kaneka’s lead counsel, Kaneka had a right as matter of law to notify infringers and potential infringers of its good faith belief in their infringing activities.

“The overwhelming case law from the United States Supreme Court and Federal Circuit authoriz[es] such letters. See, e.g. Globetrotter Software, Inc. v. Elan Computer Group, Inc., 362 F.3d 1367, 1374 (Fed. Cir. 2004) (stating, “A patentee that has a good faith belief that its patents are being infringed violates no protected right when it so notifies infringers.”).

“ZMC and its counsel have since backed down and stopped pursuing retraction of those letters in the two pending court and ITC cases.”

“In light of the above, it is clear that ZMC’s press release has nothing to do with the law of notice letters or of or facts of the two ongoing cases before the district court and the ITC,”​ added Kaneka.

“Justified damages”

Despite the Kaneka statements, Scott Steinford, president of ZMC-USA said that: "The damages sought in this complaint are justified and hopefully will act as a deterrent to predatory litigation designed solely to interfere with normal and customary business conduct."

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