Judgment Rendered in Long-Running Nisus, Perma-Chink Dispute

KNOXVILLE, Tenn. — The U.S. District Court, Eastern District, ruled on March 16 in favor of Perma-Chink Systems, manufacturer of the NovaGuard line of products, in a patent infringement lawsuit filed by Nisus Corporation. The two parties have been battling one another on various patent-related matters since 1998.

According to court documents, the litigation at the heart of the most recent impasse 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’ Bora-Care product. The court ruled that the aforementioned Nisus patent is unenforceable as a result of “inequitable conduct” by Nisus’ attorneys, which reflected “a pattern of intentional failures to disclose highly material information over a significant period of time.”

In announcing its ruling on the long-running patent infringement case, the court rejected Perma-Chink’s more serious claim of fraud, as well as its request for attorneys’ fees and litigation costs.

In response to the ruling, 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 the patent. The '095 patent is one of five patents that protect Bora-Care, 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.”

Since the court’s March 16 ruling both sides have made additional filings in district court. Nisus filed a motion for reconsideration of the court’s March 16 ruling in order to save its attorneys, Allan Altera and Michael Teschner, from “possible disciplinary action by the U.S. Patent & Trademark Office.”

Teschner filed motions for the court to intervene and amend its judgment as it relates to the inequitable conduct charge on the basis “there is no support for any finding that (Teschner) withheld material information from the PTO with the intent to deceive and accordingly no support for any conclusion that (Teschner) committed inequitable conduct.”

Relating to the March 16 ruling, 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. Additionally, Perma-Chink filed a motion in district court to have other related patents declared unenforceable.