Free Answer to Counterclaim - District Court of Delaware - Delaware

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IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF DELAWARE E. I. DUPONT DE NEMOURS AND COMPANY, Plaintiff, v. GREAT LAKES CHEMICAL CORPORATION, Defendant. ) ) ) ) ) ) ) ) ) ) )

C.A. No. 04-1452 (JJF)

PLAINTIFF DUPONT'S REPLY TO COUNTERCLAIM OF DEFENDANT GREAT LAKES Plaintiff E. I. du Pont de Nemours and Company ("DuPont"), by and through its undersigned counsel of record, states for its Reply to the Counterclaims of Defendant Great Lakes Chemical Corporation ("Great Lakes") the following as to each numbered paragraph of Defendant's Counterclaims. COUNTERCLAIM 1. DuPont admits that Counterclaim Count I (breach of contract)

arises under the common law of the State of Delaware, but denies the allegations of paragraph 1 concerning Counterclaim Count IV (patent misuse), leaving Great Lakes to its proofs, and denies that DuPont has committed any such acts entitling Great Lakes to the relief sought thereunder or any relief whatsoever. 2. DuPont admits that Counterclaim Count II (patent invalidity) and

Counterclaim Count III (patent noninfringement) purport to be brought pursuant to the Federal Declaratory Judgments Act, 28 U.S.C. §§ 2201 and 2202, and seek a declaratory judgment of invalidity and/or noninfringement of United States Patent No. 6,376,727

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("the `727 patent"), but denies that Great Lakes is entitled to such declaratory relief or any relief whatsoever. THE PARTIES 3. 4. Admitted. Admitted. JURISDICTION AND VENUE 5. DuPont admits that Great Lakes purports to bring its Counterclaim

Count II (patent invalidity) and Counterclaim Count III (patent noninfringement) seeking declaratory judgment under the Patent Laws of the United States, 35 U.S.C. §1, et seq., and that this Court has subject matter jurisdiction over these Counterclaims pursuant to 28 U.S.C. §§ 1331 and 1338(a). 6. DuPont admits that this Court has supplemental jurisdiction over

the subject matter of Great Lakes' Counterclaim Count I (breach of contract) and Counterclaim Count IV (patent misuse) under 28 U.S.C. § 1367. 7. Admitted. BACKGROUND 8. 9. Admitted. DuPont admits that under Article II(a) of the 2002 Cross-License

Agreement, which 2002 Cross-License Agreement was intended to amend the 1994 License Agreement with any inconsistencies resolved in favor of the terms of the 2002 Cross-License Agreement (collectively the "License Agreements"), DuPont granted to Great Lakes "a non-exclusive license to manufacture, have made, use, sell, import and/or export Product under any claim of the DuPont Patents, any extension, reissue or revival

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thereof, and all foreign counterparts of said DuPont Patents," wherein the term "Product" as defined in Article I therein "is limited to HFC-227, i.e., CF3 -CF2-CHF2 , CF3-CHF-CF3 and/or mixtures of such isomers," and the term "DuPont Patents" as defined in Article I therein "means the patents and patent applications, both U.S. and foreign, which are listed on Exhibit A of [the 2002 Cross-License Agreement]." DuPont admits that Article II granted Great Lakes the right to extend this license to its "Customers," as that term is defined in Article I therein. DuPont denies the remaining allegations of paragraph 9. 10. DuPont admits that the 2002 Cross-License Agreement states that

so long as Great Lakes is not in default of payment thereunder, DuPont shall not assert any "DuPont Patent" licensed in Article II(a) therein or any patent or patent application then or thereafter controlled by DuPont "to prevent Great Lakes or its Customers from importing, exporting, manufacturing, using and/or selling Product as provided by the grant of Article II(a)", and that "[n]o license or right is granted by implication or otherwise with respect to any patent application or patent or any product of DuPont except as specifically set forth herein." DuPont admits that the 2002 Cross-License Agreement includes a provision under Article XIV entitled "Dispute Resolution", wherein "upon written request of either party," any dispute or disagreement concerning the provisions of the Agreement "shall be referred to the representatives of the parties for decision", and if not resolved within thirty (30) days, to "third party mediation." DuPont denies the remaining allegations of paragraph 10. 11. DuPont admits that, on November 17, 2004, DuPont filed its

original Complaint in this action, asserting that Great Lakes infringed the '727 patent by making and using the claimed azeotropic compositions of the '727 patent in its

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manufacture of HFC-227, and seeking an injunction preliminarily and permanently enjoining Great Lakes from further acts of infringement of the '727 patent. DuPont denies the remaining allegations of paragraph 11. 12. DuPont admits that on February 7, 2005, DuPont filed an

Amended Complaint in this action, again asserting that Great Lakes infringed the '727 patent by making and using the claimed azeotropic compositions of the '727 patent in its manufacture of HFC-227. DuPont admits that the Amended Complaint also includes, inter alia, a count for breach of contract arising from Great Lakes' breach of the License Agreements. DuPont denies the remaining allegations of paragraph 12. 13. DuPont admits that on February 7, 2005, outside counsel for

DuPont sent a letter to outside counsel for Great Lakes, with copies to persons designated by Great Lakes in the License Agreements, notifying Great Lakes that it had materially breached the License Agreements, and stating that if the breach were not cured by Great Lakes within sixty (60) days, DuPont intended to terminate Great Lakes' rights under the License Agreements. DuPont denies the remaining allegations of paragraph 13. 14. DuPont admits that neither DuPont nor Great Lakes has sought by

written request to invoke the dispute resolution provision of the License Agreements. DuPont denies the remaining allegations of paragraph 14. 15. DuPont admits that on July 21, 2005, Great Lakes notified DuPont

of Great Lakes' intended royalty payment under the License Agreements for the second quarter of 2005, and that on July 22, 2005, DuPont notified Great Lakes that "[i]n view of the pending legal proceeding in the District of Delaware involving the rights and obligations of Great Lakes and DuPont under the Cross-License Agreement, and in

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particular DuPont's assertion that as a result of Great Lakes' actions, Great Lakes has breached the terms of the Cross-License Agreement," DuPont would not accept the royalty payment. DuPont admits that it accepted royalty payments from Great Lakes prior to expiration of the sixty (60) day period for Great Lakes to cure its material breach of the License Agreements. DuPont denies the remaining allegations of paragraph 15. 16. Paragraph 16, by which Great Lakes purports to reserve the right to

state additional unspecified counterclaims, is incapable of response, and therefore DuPont denies the same. COUNTERCLAIM COUNT I BREACH OF CONTRACT 17. DuPont incorporates its responses to paragraphs 1 through 16

above as if set forth in full herein. 18. Denied. COUNTERCLAIM COUNT II PATENT INVALIDITY 19. DuPont incorporates its responses to paragraphs 1 through 18

above as if set forth fully herein. 20. Denied. COUNTERCLAIM COUNT III PATENT NONINFRINGEMENT 21. DuPont incorporates its responses to paragraphs 1 through 20

above as if set forth fully herein. 22. Denied.

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COUNTERCLAIM COUNT IV PATENT MISUSE 23. DuPont incorporates its responses to paragraphs 1 through 22

above as if set forth fully herein. 24. 25. Denied. Denied. DEFENSES DuPont asserts the following defenses to the allegations contained in Great Lakes' Answer and Counterclaim. FIRST DEFENSE Great Lakes' Counterclaims fail to state a claim upon which relief can be granted. SECOND DEFENSE Great Lakes is barred from obtaining the equitable relief sought or any equitable relief whatsoever under the doctrine of unclean hands. DuPont reserves the right to amend its Reply to Great Lakes' Answer and Counterclaim to state additional defenses. DEMAND FOR JURY TRIAL DuPont hereby requests a jury trial on all triable issues raised in Great Lakes' Answer and Counterclaim and DuPont's Reply in response thereto. PRAYER FOR RELIEF DuPont denies that Great Lakes is entitled to the relief sought in its Answer and Counterclaim, or any other relief whatsoever. -6-

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WHEREFORE, DuPont respectfully requests that the Court enter judgment against Great Lakes: (i) (ii) (iii) dismissing each of Counterclaim Counts I-IV with prejudice; awarding DuPont the relief sought in the Amended Complaint; awarding DuPont all costs and expenses in defending against each

of Counterclaim Counts I-IV, including without limitation, an award of attorneys fees and costs; and (iv) just and proper. POTTER ANDERSON & CORROON LLP awarding DuPont such other and further relief as the Court deems

OF COUNSEL: Bruce D. DeRenzi John T. Gallagher MORGAN & FINNEGAN, L.L.P. 3 World Financial Center New York, New York 10281-2101 (212) 415-8700 Dated: March 15, 2005

By: /s/ David E. Moore Richard L. Horwitz (#2246) David E. Moore (#3983) Hercules Plaza, 6th Floor 1313 North Market Street Wilmington, Delaware 19801 (302) 984-6000 [email protected] [email protected] Attorneys for Plaintiff E.I. du Pont de Nemours and Company

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IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF DELAWARE

CERTIFICATE OF SERVICE I, David E. Moore, hereby certify that on October 13, 2005, the attached document was electronically filed with the Clerk of the Court using CM/ECF which will send notification of such filing(s) to the following and the document is available for viewing and downloading from CM/ECF: Frederick L. Cottrell, III Alyssa M. Schwartz Richards Layton & Finger One Rodney Square P. O. Box 551 Wilmington, DE 19899

I hereby certify that on October 13, 2005, I have Federal Expressed the documents to the following non-registered participants: Richard D. Harris Brad R. Bertoglio Jordan Herzog Greenberg Traurig LLP 77 W. Wacker Dr., Suite 2500 Chicago, IL 60601

By:

/s/ David E. Moore Richard L. Horwitz David E. Moore Hercules Plaza, 6th Floor 1313 N. Market Street Wilmington, Delaware 19899-0951 (302) 984-6000 [email protected] [email protected]

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