Judge Settles Nisus, NovaGuard Patent Infringement Lawsuit

KNOXVILLE, Tenn. — The U.S. District Court, Eastern District, recently ruled in favor of Perma-Chink Systems, manufacturer of NovaGuard’s borates, in a patent infringement lawsuit filed by Nisus Corporation.

According to court documents, the litigation has been pending since 2003, when Nisus filed suit, alleging that Perma-Chink Systems’ Shell-Guard Concentrate, Shell-Guard RTU and Guardian Products infringed U.S. Patent No. 6,426,095 (also referred to as the ‘095 patent) which is embodied in Nisus’s Bora-Care product. The court ruled that the aforementioned Nisus patent is unenforceable as a result of “inequitable conduct” by Nisus’ attorneys “as demonstrated by a pattern of intentional failures to disclose highly material information to the PTO over a long period of time, clear and convincing evidence establishes that Nisus possessed an intent to deceive the PTO that resulted in a breach of its duty of candor, good faith, and honesty to the PTO.”

In response to this judgment, Nisus issued the following statement: “The judge's ruling of inequitable conduct by Nisus' attorneys is viewed as legally incorrect by their law firm. Nisus' attorneys intend to appeal the ruling.”

Rich Dunstan, president of Perm-Chink Systems, said in a statement he was “pleased” with the court’s ruling. “I am pleased that the federal district court considered the evidence and arguments that Perma-Chink Systems presented at trial and concluded that Nisus’s ‘095 patent is unenforceable.”

Nisus noted that while the '095 patent falls within the broad umbrella of Nisus' Bora-Care® technology, the formulation in this patent is not currently practiced or marketed by Nisus Corporation, and none of Nisus' current catalog of products falls within this patent.  The '095 patent is one of five patents that protect the Bora-Care invention, insuring that the product cannot be legally duplicated until 2014, Nisus says.

Kevin L. Kirkland, president of Nisus Corporation stated, "As with all our company's intellectual properties, we will vigorously defend any potential infringement. While this particular patent has no impact on our current Bora-Care formula or product, the Bora-Care brand is unique and distinctive within our industry, and will be defended as such."

On March 30, Perma-Chink filed a motion in district court to amend the court’s judgment, seeking to be awarded at least its full attorneys’ fees and costs.