CCD Holdings, LLC v. Cenergy USA, Inc.

622 F.Supp.3d 743

CCD HOLDINGS, LLC, Plaintiff v. CENERGY USA, INC.; Wal-Mart Stores, Inc.; Wal-Mart.com USA, LLC;Magic Dirt LLC; and Magic Dirt Horticultural Products LLC, Defendants

CASE NO. 4:19cv102 JM

United States District Court, E.D. Arkansas

Signed August 23, 2022

Jennifer Lynn Mozwecz, Pro Hac Vice, SRM Law, P.C., Chicago, IL, for Plaintiff.

Michael P. Padden, Pro Hac Vice, Pearne & Gordon LLP, Chicago, IL, Una L. Lauricia, Pro Hac Vice, Pearne & Gordon LLP, Cleveland, OH, Joseph Davidson Calhoun, III, Calhoun Law Firm, Little Rock, AR, for Defendants Wal Mart Stores Inc., Wal Mart.Com USA LLC, Cenergy USA Inc.

Joseph Davidson Calhoun, III, Calhoun Law Firm, Little Rock, AR, for Defendants Magic Dirt LLC, Magic Dirt Horticultural Products LLC.

ORDER

James M. Moody Jr., United States District Judge

This is an action for patent infringement. On September 27, 2021, the Court entered an order construing the term "solvent" to mean "a substance combined with the lignocellulosic fiber, and which dissolves or disperses one or more other substances."¹ (Doc. 119). Defendants Cenergy USA, Inc., Magic Dirt LLC and Magic Dirt Horticultural Products LLC (collectively "Magic Dirt") have moved for summary judgment arguing that with this construction, Plaintiff CCD Holdings, LLC ("CCD") cannot establish that its claims have been infringed. (Doc. 120). CCD filed a response to the motion, and Magic Dirt filed a reply.

The parties agree on the law to be applied. "An infringement analysis involves a two-step process: the court first determines the meaning of disputed claim terms and then the accused device is compared to the claims as construed." McGinley v. Luv N' Care Ltd., 819 F. App'x 913, 917 (Fed. Cir. 2020) (citing Markman v. Westview Instruments, Inc., 52 F.3d 967, 976 (Fed. Cir. 1995)), aff'd, 517 U.S. 370, 116 S.Ct. 1384, 134 L.Ed.2d 577 (1996). "The second step, the determination of infringement, whether literal or under the doctrine of equivalents, is a question of fact." Bai v. L & L Wings, Inc., 160 F.3d 1350, 1353 (Fed. Cir. 1998). Summary judgment on the issue of infringement is proper "when no genuine issue of material fact exists, in particular, when no reasonable jury could find that every limitation recited in the properly construed claim either is or is not found in the accused device." Wi-LAN USA, Inc. v. Ericsson, Inc., 675 F. App'x 984, 992 (Fed. Cir. 2017) (quoting Bai, 160 F.3d at 1353). Under the doctrine of equivalents, all the limitations of the claim must be satisfied at least equivalently. Id.

In support of their motion for summary judgment, Magic Dirt submitted a statement of undisputed material facts. (Doc. 120 at 3-9). These asserted facts primarily come from the declaration of Robert Joblin, president of Cenergy USA, Inc. (a managing member of Magic Dirt LLC and Magic Dirt Horticultural) and a co-inventor on the Magic Dirt Patent:²

• The potting soil product sold under the MAGIC DIRT trademark ("Magic Dirt") does not include any solvent combined with the lignocellulosic fiber processed by ruminant digestion and anaerobic digestion (hereinafter "AD fiber").

• Magic Dirt is made of pine bark combined with AD fiber. The AD fiber was produced using an organic waste processing system substantially in accordance with the process disclosed in the Dvorak Patent.³

• In order to lower the pH of the AD Fiber to a level conducive for plant nutrition and growth, aged pine bark is combined with AD Fiber in a volume ratio of about 25% bark to about 75% Ad Fiber.

• Magic Dirt is made with the following process disclosed in the Matic Dirt Patent:

In operation of the waste-processing system, cow manure is transferred to the mixing chamber, where the manure is mixed with activated sludge (essentially the liquid fraction saved from the previous digestion/processing of manure). That sludge-like mixture is heated to approximately 105 to 130 degrees Fahrenheit. (Heavy solids such as grit fall to the bottom of the mixing chamber under the influence of gravity and are removed using an auger in the bottom of the mixing chamber, and transferred to a disposal site.) After a stay of approximately one day in the mixing chamber, the sludge flows through an opening in the wall separating the mixing chamber and the digester, where anaerobic digestion takes place. The activated sludge added to the manure in the mixing chamber serves to start the anaerobic digestion process.

The digester is essentially a long enclosed chamber having a center wall running most of the length of the chamber, thereby forming a U-shape digestion pathway; the digester has a long sludge flow path, and thus a long residence time of approximately twenty days. As the sludge flows through the digester, anaerobic digestion processes the manure sludge into activated sludge.

From the digester, the activated sludge flows into a clarifier chamber. The clarifier uses gravity to separate the activated sludge into liquid and solid portions. Under the influence of gravity and separation panels, the liquid portion rises to the top of the mixture and is decanted away. The solid portion of the activated sludge settles to the bottom of the clarifier. Sometimes the solids are subjected to mechanical press processing to reduce the moisture content; such processing is not recommended for the disclosed composition, because that will reduce the length of fibers unnecessarily. Unlike the '589 patent and other known prior art, most of the activated sludge is removed from the clarifier and is processed through a screen separator

. . . .

The fibers of the present invention have a second processing step not disclosed in the '589 patent, namely, an additional step of heat drying the fibers while they are free-falling. The fibers of the present invention are transported to approximately 15 to 20 feet above the ground level, then pumped out into the air and through an airstream having a temperature of approximately 100 degrees Fahrenheit. This aerates and separates the fibers, and causes them to dry as they descend. It also provides the fibers with a more airy, fluffy consistency, which allows further drying after free-fall drying. . . .

After drying, the fibers are preferably mixed with pine bark, preferably aged pine bark, to yield a composition having the desired pH, preferably about 6.7. At this time, it is ready to function as a premium potting soil. (Magic Dirt Patent, col. 5 line 27 to col. 6 line 34.)

• The bark mixed with the AD Fiber is drier than the AD fiber, and it is a not a solvent; it does not dissolve or disburse the AD Fiber.

• Nothing besides bark is combined with the AD Fiber to produce Magic Dirt potting soil.

A portion of Joblin's declaration that was not included in Defendants' statement of undisputed material facts describes the process that occurs before the cow manure is transferred to the mixing chamber: "In collecting cow manure (for the fiber) and transporting it to the digester, the manure is usually scraped or flushed off the concrete in the barns and milking parlor prior to the digester or vacuumed into a truck for transport to the digester. Before entering the digester, the manure is usually stored in a waste/sludge holding pit, where it is diluted to facilitate flow into through the digester." (Doc. 120 at 8.)

Applying the Court's construction of the term solvent, which appears in each of the asserted claims,⁴ Defendants argue that CCD cannot establish that Magic Dirt potting soil infringes on any of the three patents at issue. Defendants analyze what they contend is the broadest of the asserted claims for each of the three patents—claim 13 of the '652, claim 16 of the '879 Patent, and claim 1 of the '730 Patent—and assert that if Magic Dirt does not infringe on these claims, it does not infringe on any of the other asserted claims.

Claim 13 of the '652 Patent provides:

13. Animal bedding, comprising: at least one solvent, wherein the at least one solvent comprises water present in a concentration of less than approximately 70% weight; a lignocellulosic fiber, wherein the lignocellulosic fiber has been processed by ruminant digestion and anaerobic digestion; and wherein the density fiber of the animal bedding ranges from approximately 0.950 grams per cubic centimeter to approximately 1.40 grams per cubic centimeter.

Claim 16 of the '879 Patent provides:

16. A lignocellulosic fibrous composite, comprising: at least one solvent, wherein the at least one solvent comprises water; a lignocellulosic fiber, wherein the lignocellulosic fiber has been processed by ruminant digestion and anaerobic digestion; wherein the at least one solvent is present in a concentration of less than approximately 70% by weight; and wherein the density of the lignocellulosic fibrous composite ranges from approximately 5 pounds per cubic

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