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Creative Compounds, LLC v. Starmark Laboratories

June 24, 2011

CREATIVE COMPOUNDS, LLC, PLAINTIFF-APPELLANT,
v.
STARMARK LABORATORIES, DEFENDANT-APPELLEE.



Appeal from the United States District Court for the Southern District of Florida in case no. 07-CV-22814, Judge Alan S. Gold.

The opinion of the court was delivered by: Linn, Circuit Judge.

Before RADER, Chief Judge, CLEVENGER and LINN, Circuit Judges.

Creative Compounds, LLC ("Creative") filed a complaint with the U.S. District Court for the Southern District of Florida against Starmark Laboratories ("Star-mark") seeking a declaratory judgment that Starmark's patent, U.S. Patent No. 7,109,373 (the "'373 Patent"), is invalid and not infringed. Starmark, in its Answer, alleged infringement of the '373 patent and sought a declaration that Creative's patent, U.S. Patent No. 7,129,273 (the "'273 Patent"), is invalid. The district court granted Starmark's motion for summary judgment on all counts and denied Creative's motion to dismiss for lack of jurisdiction. Order, Creative Compounds, LLC v. Star-mark Labs., Inc., No. 07-cv-22814 (S.D. Fla. Sept. 17, 2009), ECF No. 107 ("Summary Judgment Order"). Creative appeals. For the reasons explained below, this court affirms the district court's judgment as to the '373 Patent, reverses the district court's determination as to jurisdiction over the '273 Patent, and vacates the district court's decision as to the validity of the '273 Patent.

I. BACKGROUND

Both the '373 and '273 Patents relate to innovations in dietary supplements and food products. These patents relate to creatine formulations that increase the bioavail-ability of creatine. Creatine is an amino acid derivative naturally present in muscle tissue. '373 patent col. 1, ll. 15-17. It serves as a central component of the metabolic system and provides energy for work and exercise performance. Id. col. 1, ll. 15-20. It assists in producing adenosine triphosphate ("ATP") during short bursts of high intensity exercise. The depletion of creatine has been associated with the onset of fatigue. Id. col. 1, ll. 20-29.

Creatine is most commonly used by body builders looking for a steroid-free way of improving athletic performance. Id. col. 2, ll. 4-11. The prior art teaches oral creatine supplementation using creatine monohydrate. Id. col. 2, ll. 15-20. Creatine monohydrate is typically sold as a nutritional supplement in powder form. Id. Drawbacks of using creatine monohydrate include its low solubility in water and low bioavailability. Id. col. 2, ll. 40-65.

A. Starmark's '373 Patent

The application for the '373 Patent was filed on December 18, 2003, claiming priority to a provisional application filed on December 18, 2002. The '373 Patent discloses creatine salts comprising two molecules of creatine and one molecule of dicarboxylic acid. Id. col. 3, ll. 55-59. These embodiments purport to provide hydro-soluble creatine salts. Id. Claims 1-6 cover creatine salts, whereas claims 7-13 cover methods of making these creatine salts. Independent claim 1 recites:

1. A creatine salt having the formula wherein A represents an anion of a dicarboxylic acid.

Dependent claim 3 recites:

3. The creatine salt of claim 1, wherein A is an anion of malic acid.

Independent claim 7, representative of the method claims, recites:

7. A process comprising reacting a molar excess of creatine monohydrate and a dicarboxylic acid or a tricarboxylic acid with heat to form a createine salt having the formula:

The '373 Patent issued on September 19, 2006, to SAN Corporation ("SAN") listing SAN's CEO, Matthias Boldt ("Boldt"), as the sole inventor. In October 2006, Boldt formed Starmark, where he serves as CEO, president, and sole shareholder. All right, title, and interest in the '373 Patent was then assigned to Starmark.

B. Creative's '273 Patent

Creative filed the application for the '273 Patent on April 30, 2003. Unlike the '373 Patent, which claims a genus of possible creatine salts, Creative's '273 Patent is narrower and covers only dicreatine malate compounds. Claims 1-3 cover a dicreatine malate compound and claims 4-10 cover methods of administering a dicreatine malate compound.

Independent claim 1, representative of the compound claims, recites:

1. A dicreatine malate compound comprising approximately two creatine cations per one malic acid dianion.

Independent claim 4, representative of the method claims, recites:

4. A method of increasing the production of adenosine triphosphate in a human body comprising administering to a subject a dicreatine malate compound comprising approximately two creatine cations per one malic acid dianion.

The '273 Patent issued to Creative on October 31, 2006, about one month after the issuance of Starmark's '373 Patent. Creative's '273 Patent lists Derek Cornelius ("Cornelius") and Gary Haynes ("Haynes") as co-inventors.

C. Factual History

Starmark and Creative are competitors in the creatine market. Creative markets and sells a dicreatine malate compound under the trade name 2CM. Starmark retails its own dicreatine malate compound under its own mark.

In August 2009, after receiving a notice of allowance on the '373 Patent, Boldt, as SAN's CEO, mailed letters to purchasers of dicreatine malate compounds. These letters advised the industry that SAN's '373 Patent would soon issue.

Viewing these letters as threatening, Creative decided to mail letters of its own. Creative's letter advised the industry about a notice of allowance on its competing patent, the '273 Patent. Creative did not simply stop there. Rather, Creative included a letter from its patent counsel. This letter, in relevant part, stated:

It has also come to my attention that SAN Corporation has sent a number of threatening letters to the industry alleging that it also has received a Notice of Allowance of its patent application entitled Creatine Salts and Method of Making Same[, the '373 Patent] . . . . Even if SAN is correct that a patent will issue from its ...


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