Syngenta Crop Protection, LLC v. Atticus, LLC

IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF NORTH CAROLINA

WESTERN DIVISION .

No. 5:19-CV-509-D

SYNGENTA CROP PROTECTION, )

LLC, )

Plaintiff

v. ORDER

ATTICUS, LLC,

Defendant. .

On November 12, 2019, Syngenta Crop Protection, LLC (“Syngenta” or “plaintiff”) filed suit

against Atticus, LLC (“‘Atticus” or “defendant”) alleging patent infringement [D.E. 1]. On June 29,

2021, Atticus filed an amended answer and counterclaims [D.E. 272]. Atticus raised counterclaims

alleging noninfringement and the invalidity of Syngenta’s patents, violations of the Sherman Act,

15 U.S.C. §§ 1, et seq., violations of the North Carolina Unfair and Deceptive Trade Practices Act

(“UDTPA”), N.C. Gen. Stat. §§ 75-1.1, et seq., defamation, and a claim for attorney’s fees. See

[D.E. 272] □□ 256-96. On July 13, 2021, Syngenta moved to dismiss Atticus’s antitrust, defamation,

and UDTPA claims under Federal Rule of Civil Procedure 12(b)(6) [D.E. 294] and filed a

memorandum in support [D.E. 295]. On July 20, 2021, Syngenta moved to stay discovery

concerning Atticus’s counterclaims while Syngenta’s motion to dismiss was pending [D.E. 301].

On August 3, 2021, Atticus responded in opposition to Syngenta’ motion to dismiss [D.E. 319] and

in opposition to Syngenta’s motion to stay [D.E. 323]. On August 17, 2021, Syngenta replied to

Atticus’s response in opposition to Syngenta’s motion to dismiss [D.E. 334]. As explained below,

court grants Syngenta’s motion to dismiss and denies as moot Syngenta’s motion to stay.

I.

A motion to dismiss under Rule 12(b)(6) tests the complaint’s legal and factual sufficiency.

See Ashcroft v. Iqbal, 556 US. 662, 677-80 (2009); Bell Atl. Corp. v. Twombly, 550 US. 544,

554-63 (2007); Coleman v. Md. Court of Appeals, 626 F.3d 187, 190 (4th Cir. 2010), aff'd, 566

U.S. 30 (2012); Giarratano v. Johnson, 521 F.3d 298, 302 (4th Cir. 2008). To withstand a Rule

12(b)(6) motion, a pleading “must contain sufficient factual matter, accepted as true, to state a claim

to relief that is plausible on its face.” Iqbal, 556 U.S. at 678 (quotation omitted); see Twombly, 550

US. at 570; Giarratano, 521 F.3d at 302. In considering the motion, the court must construe the

facts and reasonable inferences “in the light most favorable to [the nonmoving party].” Massey v.

Ojaniit, 759 F.3d 343, 352 (4th Cir. 2014) (quotation omitted); see Clatterbuck v, City of

Charlottesville, 708 F.3d 549, 557 (4th Cir. 2013), abrogated on other grounds by Reed v. Town of

Gilbert, 576 U.S. 155 (2015). A court need not accept as true a complaint’s legal conclusions,

“unwarranted inferences, unreasonable conclusions, or arguments.” Giarratano, 521 F.3d at 302

(quotation omitted); see Iqbal, 556 U.S. at 678-79. Rather, a party’s factual allegations must

“nudge[ ] [its] claims,” Twombly, 550 U.S. at 570, beyond the realm of “mere possibility” into

“plausibility.” Iqbal, 556 U.S. at 678-79.

When evaluating a motion to dismiss, a court considers the pleadings and any materials.

“attached or incorporated into the complaint.” E.I. du Pont de Nemours & Co. v. Kolon Indus., Inc.,

637 F.3d 435, 448 (Ath Cir. 2011); see Fed. R. Civ. P. 10(c); Goines v. Valley Cmty. Servs. Bd., 822

F.3d 159, 166 (4th Cir 2016); Thompson v. Greene, 427 F.3d 263, 268 (4th Cir. 2005). A court may

also consider a document submitted by a moving party if it is “integral to the complaint and there

is no dispute about the document’s authenticity” without converting the motion into one for summary

judgment. Goines, 822 F.3d at 166. Additionally, a court may take judicial notice of public records.

See, e.g., Fed. R. Evid. 201; Tellabs, Inc. v. Makor Issues & Rts., Ltd., 551 U.S. 308, 322 (2007);

Philips v. Pitt Cnty. Mem’! Hosp., 572 F.3d 176, 180 (4th Cir. 2009).

Syngenta’s motion to dismiss requires the court to consider North Carolina state law

defamation and UDTPA claims. Accordingly, this court must predict how the Supreme Court of

North Carolina would rule on any disputed state law issues. See Twin City Fire Ins. Co. v. Ben

Amold-Sunbelt Beverage Co. of S.C., 433 F.3d 365, 369 (4th Cir. 2005). In doing so, the court must

look first to opinions of the Supreme Court of North Carolina. See id.; Parkway 1046, LLC v. US.

. Home Corp., 961 F.3d 301, 306 (4th Cir. 2020); Stahle v. CTS Corp., 817 F.3d 96, 100 (4th Cir.

2016). If there nn governing opinions from that court, this court may consider the opinions of

the North Carolina Court of Appeals, treatises, and “the practices of other states.” Twin City Fire

Ins. Co., 433 F.3d at 369 (quotation omitted).! In predicting how the highest court of a state would

address an issue, this court must “follow the decision of an intermediate state appellate court unless’

there [are] persuasive data that the highest court would decide differently.” Toloczko, 728 F.3d at

398 (quotation omitted); see Hicks v. Feiock, 485 U.S. 624, 630 & n.3 (1988). Moreover, in

predicting how the highest court of a state would address an issue, this court “should not create or

expand a [s]tate’s public policy.” Time Warner Ent.-Advance/Newhouse P’ ship v. Carteret-Craven

Elec. Membership Corp., 506 F.3d 304, 314 (4th Cir. 2007) (alteration and quotation omitted); see

Day & Zimmerman, Inc. v. Challoner, 423 U.S. 3, 4 (1975) (per curiam); Wade v. Danek Med. Inc.,

182 F.3d 281, 286 (4th Cir. 1999).

A.

Syngenta argues that Atticus fails to state a plausible antitrust claim under section 2 of the

1 North Carolina does not have a mechanism to certify questions of state law to its Supreme

Court. See Town of Nags Head v. Toloczko, 728 F.3d 391, 398 (4th Cir. 2013).

Sherman Act. See [D.E. 295] 15-30. Atticus disagrees, See [D.E. 319] 13-30. Atticus alleges

Syngenta’s lawsuit against it is a sham and an abuse of process that amounts to monopolization or

attempted monopolization under section 2 of the Sherman Act. As explained below, the Noerr-

Pennington’ coer bars Atticus’s antitrust claim.

A patentee can be subject to antitrust liability for the anticompetitive effects ofalawsuit. See

Nobelpharma AB v. Implant Innovations, Inc., 141 F.3d 1059, 1068 (Fed. Cir. 1998); LendingTree,

LLC v. Zillow, Inc., No. 3:10-CV-439-FDW-DCK, 2011 WL 13222698, at *2 (W.D.N.C. Nov. 4,

2011) (unpublished).* However, under the Noerr-Pennington doctrine, patentees, like everyone else,

have a “First Amendment right to petition the government for redress without fear of antitrust

liability.” Balt. Scrap Corp. v. David J. Joseph Co., 237 F.3d 394, 398 (4th Cir. 2001); see Indus.

Models, Inc. v. SNF. Inc., 716 F. App’x 949, 955-56 (Fed. Cir. 2017) (unpublished); Content

Extraction & Transmission LLC v. Wells Fargo Bank, Nat’1 Ass’n, 776 F.3d 1343, 1349-50 (Fed.

Cir. 2014); ERBE Elektromedizin GmbH v. Canady Tech. LLC, 629 F.3d 1278, 1291-93 (Fed. Cir.

2010); FilmTec Com. v. Hydranautics, 67 F.3d 931, 937 (Fed. Cir. 1995); see also Waugh Chapel

S., LLC v. United Food & Com. Workers Union Local 27, 728 F.3d 354, 362-64 (4th Cir. 2013);

IGEN Int’l, Inc. v. Roche Diagnostics GmbH, 335 F.3d 303, 310 (4th Cir. 2003).

To strip a patentee of its immunity from antitrust liability, a party must show either that the

patentee obtained the patent through knowing and willful fraud, see Walker Process Equip.., Inc. v.

Food Mach. & Chem. Corp., 382 U.S. 172, 177-78 (1965), or that the lawsuit is a sham. See

? See United Mine Workers of Am. v. Pennington, 381 U.S. 657, 669-71 (1965); E. R.R.

Presidents Conf. v. Noerr Motor Freight, Inc., 365 U.S. 127, 135—45 (1961).

3 □□□ ]hether conduct in procuring or enforcing a patent is sufficient to strip a patentee of its

immunity from the antitrust laws is to be decided as a question of Federal Circuit law.”

Nobelpharma AB, 141 F.3d at 1068.

Nobelpharma AB, 141 F.3d at 1068; C.R. Bard, Inc. v. M3 Sys., Inc., 157 F.3d 1340, 1368-69 (Fed.

Cir. 1998); Lending Tree, LLC, 2011 WL 13222698, at *2. As is the case here, “an antitrust claim

‘premised on stripping a patentee of its immunity from the antitrust laws .is typically raised as a

counterclaim by a defendant in a patent infringement suit.” Nobelpharma AB, 141 F.3d at 1067.

To state a claim for treble damages under section 4 of the Clayton Act, a counterclaiming defendant

also must plausibly allege all the other elements of a substantive antitrust claim. See Dippin’ Dots,

Inc. v. Mosey, 476 F3d 1337, 1346 (Fed. Cir. 2007); Lending Tree, LLC, 2011 WL 13222698, at

*2. Atticus alleges only that Syngenta’s lawsuit against it is a sham, not that Syngenta obtained its

patents through knowing and willful fraud.

Patentees lose their Noerr-Pennington immunity wien they engage in sham litigation. See,

e.g., Octane Fitness, LLC v. ICON Health & Fitness, Inc., 572 U.S. 545, 555-56 (2014); BE & K

Constr. Co. v. N.L.R.B., 536 U.S. 516, 525-26 (2002); Prof] Real Estate Invs., Inc. v. Columbia

Pictures Indus., Inc., 508 U.S. 49, 60-61 (1993) [hereinafter PREI]; Indus. Models, Inc., 716 F.

App’x at 956; Content Extraction, 776 F.3d at 1349-50; ERBE Elektromedizin, 629 F.3d at

1291-93; FilmTec Corp., 67 F.3d at 937. Litigation is a sham if it satisfies a two-part definition

comprising an obj ective component and a subjective component. See BE & K Contr. Co., 536 U.S.

at 526 (“For a suit to violate the antitrust laws, then, it must be a sham both objectively and

subjectively.”). First, the “lawsuit must be objectively baseless in the sense that no reasonable

litigant could realistically expect success on the merits.” PREIL 508 U.S. at 60; see Octane Fitness,

572 US. at 556; BE & K Constr. Co., 536 U.S. at 526; Content Extraction, 776 F.3d at 1350. A

lawsuit is not objectively baseless if its proponent had probable cause to bring suit. See PREI, 508

US. at 62. Second, the “litigant’s subjective motivation” for the lawsuit must be to directly interfere

with a competitor’s business relationships. PREI, 508 U.S. at 60; see Octane Fitness, 572 U.S. at

. 556; BE&K Constr. Co., 536 U.S. at 526; Content Extraction, 776 F.3d at 1350. If a court

determines that a lawsuit is not objectively baseless, the court need not consider the litigant’s

subjective motivations. See PREI, 508 U.S. at 60-61.

The Noerr-Pennington doctrine is an affirmative defense, and a court generally may not

“reach the merits of an affirmative defense unless all facts necessary to the affirmative defense □

clearly appear on the face of the complaint.” Waugh Chapel S., 728 F.3d at 359-60 (cleaned up);

see Goodman v. Praxair, Inc., 494 F.3d 458, 464 (4th Cir. 2007) (en banc); Navient Sols., LLC v.

Law Offices of Jeffrey Lohman, No. 1:19-cv-461 (LMB/TCB), 2020 WL 1867939, at *4 (E.D. Va.

Apr. 14, 2020) (unpublished)! Moreover, “[clourts have routinely declined to address the Noerr-

Pennington doctrine at the motion to dismiss stage, particularly where the sham litigation exception

may be involved.” Navient Sols., 2020 WL 1867939, at *4 (collecting cases); see Klein v. Altria

Grp., Inc., 525 F. Supp. 3d 638, 662 (E.D. Va. 2021). The Federal Circuit, however, has resolved

-Noerr-Pennington immunity issues under the Rule 12(b)(6) standard. See, e.g., Content Extraction,

776 F.3d at 1346, 1349-50. And the court holds that the facts alleged in Atticus’s amended

counterclaims—which specifically pleaded an antitrust claim and the sham litigation exception to

the Noerr-Pennington doctrine—contain facts sufficient to resolve whether the Noerr-Penningto n

doctrine applies.

Taking the factual allegations in Atticus’s counterclaims and all reasonable inferences drawn

therefrom as true, Atticus has not plausibly alleged that Syngenta’s lawsuit is objectively

baseless—i.e., that no reasonable litigant could expect success on the merits. Syngenta has obtained

4 Cf. CODA Dev. S.R.O. v. Goodyear Tire & Rubber Co., 916 F.3d 1350, 1357 (Fed. Cir.

2019) (“We review a district court’s dismissal for failure to state a claim under the regional circuit’s

law.”); Bascom Glob. Internet Servs., Inc. v. AT&T Mobility LLC, 827 F.3d 1341, 1347 (Fed. Cir.

2016) (same).

a favorable jury verdict concerning one of the patents at issue in this case, thus indicating Syngenta

has probable cause to believe its patents are valid and enforceable. See Syngenta Crop Protection

LLC v. Willowood, LLC, 944 F.3d 1344 (Fed. Cir. 2019); see also [D.E. 272] {] 65-73, 161.°

Tellingly, the expert testimony that Atticus alleges shows Syngenta’s claims concerning Atticus’s

supposed infringement of the 761 patent is objectively baseless is the same expert testimony Atticus

alleges Syngenta relied on, with success, in the Willowood litigation. See [D.E. 272] {J 189-92.

Syngenta tested one of Atticus’s products and discovered reason to suspect that the

azoxystrobin in Atticus’s product might have been produced following Syngenta’s patented process.

See id. J 185. Syngenta also reviewed publicly available information about Atticus’s products and

concluded that information supported its infringement claims against multiple azoxystrobin products

that Atticus sells. See [D.E. 1-4 through 1-9, 1-13 through 1-16]. Finally, the court has reviewed □

Syngenta’s complaint and determined Syngenta plausibly alleged its patent infringement claims. See

[D.E. 25]; see, eg., Ervin Equip. Inc. v. Wabash Nat’! Corp., No. 4:15-cv-104, 2017 WL 416304,

at *3 (N.D. Ind. Jan. 31, 2017) (unpublished) (collecting cases); Metro. Reg’! Info. Sys., Inc. v. Am.

Home Realty Network, Inc., 948 F. Supp. 2d 538, 557 (D. Md. 2013); Giles v. Phelan, Hallinan &

Schmieg, L.L.P., C/A No. 11-6239 BS/KMW), 2013 WL 2444036, at *7 (D.N.J. June 4, 2013)

(unpublished); Krasnyi Oktyabr, Inc. v. Trilini Imps., 578 F. Supp. 2d 455, 475 (E.D.N.Y. 2008);

. 5 The court,expresses no opinion about whether the patents at isue in this case are, in □□□□□

valid and enforceable or whether Atticus infringed them. Moreover, the jury in Willowood only

determined that Willowood did not prove noninfringement. It did not conclude that Syngenta had

affirmatively proved infringement and its patents’ validity. See Willowood, 944 F.3d at 1354

(discussing the jury’s findings concerning the ’761 patent). Nonetheless, Syngenta’s success in that

lawsuit, combined. with other facts alleged, provides probable cause to believe Syngenta could

reasonably expect success on the merits in this case.

Arnett Physician Grp .. PC, v, Greater LaFayette Health Servs., Inc., 382 F. Supp. 2d 1092, 1097

(N.D. Ind. 2005). .

. Syngenta’s lawsuit is not obj ectively baseless. A reasonable litigant would have an objective

basis to expect success on the merits. Cf Tyco Healthcare Grp. LP v. Mut. Pharm. Co., Inc., 762

F.3d 1338, 1345-46 (Fed. Cir. 2014) (“Given the presumption of patent validity and the burden on

the patent challenger to prove invalidity by clear and convincing evidence, it will be a rare case in

which a patentee’s assertion of its patent in the face of a claim of invalidity will be so unreasonable

as to support a claim that the patentee has engaged in sham litigation.”); In re Loestrin 24 Fe

Antitrust Litig., 261 F. Supp. 3d 307, 348 (D.R.L 2017) (same); see also [D.E. 272] 262-69

(alleging the invalidity of Syngenta’s patents). Because Syngenta’s lawsuit is not objectively □

baseless, the court need not consider Syngenta’s subjective motivations for suing Atticus. See PREL,

508 U.S. at 60-61. Accordingly, the sham litigation exception does not apply, and the Noerr-

Pennington doctrine bars Atticus’s antitrust claim. □

In oppo sition, Atticus alleges that with more due diligence, Syngenta could have determined

that Atticus purchased the azoxystrobin Syngenta tested from a supplier authorized to sell

azoxystrobin madevusinig Syngenta’s patented process and that the azoxystrobin Syngenta tested may

have come from abatch Syngenta itself manufactured. See [D.E. 272] {J 80-100, 205-21, Taking

these allegations as true, Atticus’s allegations amount to a defense to liability for patent

infringement. Ultimately, Atticus may prevail on that theory. However, Atticus’s allegations

concerning due diligence do not render Syngenta’s lawsuit objectively baseless. A lawsuit is not

objectively baseless merely because reasons exist to think the plaintiff will lose. See, e.g., BE & K

Constr. Co., 536 U.S. at 532 (stating the Court’s cases “protect{] petitioning whenever it is genuine,

not simply when it triumphs” and that “even unsuccessful but reasonably based suits advance some

.

First Amendment interests”); C.R. Bard, 157 F.3d at 1369 (“[S]ham litigation requires more than

a failed legal theory.”); Krasni Oktyabr, Inc., 578 F. Supp. 2d at 475 (“[A]lthough plaintiff s suit has

proven unsuccessful, plaintiff?” 8 claims had enough merit to survive defendants’ motion to dismiss.

Even though plaintiff's allegations have failed to survive summary judgment, these allegations

cannot be viewed as objectively baseless or blatantly false based on the evidence presented.”

(citation omitted)). .

Atticus also alleges that Syngenta did not work with Atticus in good faith to resolve the

infringement issue before Syngenta filed its lawsuit. See [D.E. 272] ff] 162-78. Atticus’s □

allegations show that the parties were unable to agree on the terms of a confidentiality agreement that

would allow Atticus and Syngenta to share certain data to determine whether Atticus infringed

Syngenta’s patents. See id. Even assuming Syngenta negotiated in bad faith, that allegation does

not undermine Syngenta’s sufficient factual basis for the patent infringement suit.

Based on the Willowood litigation, Syngenta’s test of a sample of Atticus’s product, and

Syngenta’s review of publicly available information about Atticus’s azoxystrobin products, Syngenta

had probable cause to sue Atticus. This court came to a similar conclusion when it held that

Syngenta stated plausible patent infringement claims under Rule 12(b)(6). See [D.E. 25].

Accordingly, Syngenta’s lawsuit is not objectively baseless, and the court need not consider

Syngenta’s subjective motivations for filing the lawsuit. See PREI, 508 U.S. at 60-61. Thus, the .

- Noerr-Pennington doctrine bars Atticus’s antitrust claim, and the court dismisses it.

: B.

Syngenta moves to dismiss Atticus’s defamation claim. See IDE. 295] 31-33. Atticus

argues it plausibly alleged defamation based on statements in a press release Syngenta issued the day

it sued Atticus. See [D.E. 272] J] 278-85. Atticus bases its claim on two statements in Syngenta’s

press release. First, the press release stated: “The complaint, filed in the U.S. District Court for the

Eastern District of North Carolina, alleges, among other things, that Atticus’ Acadia 2 SC, Acadia

ESQ, Aquila XL, Artavia 2 SC and Artavia Xcel products each infringe certain Syngenta patents

relating to the manufacture of azoxystrobin fungicide.” Syngenta US, Syngenta Files Infringement

Suit Against Atticus (Nov. 12, 2019) [hereinafter Syngenta Press Release], https://www.syngenta-us.

com/newsroom/news_release_detail.aspx?id=212352 (last visited Mar. 21, 2022); [D.E. 272] 9224.5

Second, the press release stated: “Atticus’ infringement enables it to unfairly compete in the crop

protection market and benefit from significant product development investments made by Syngenta,

the original developer of azoxystrobin.” Syngenta Press Release; [D.E. 272] | 225. Atticus alleges

these statements are defamatory per se and made with wanton disregard for the actual truth. See id.

281,283”

To establish a defamation claim under North Carolina law, a “plaintiff must allege and prove

that the defendant made false, defamatory statements of or concerning the plaintiff, which were

published to a third person, causing injury to the plaintiff's reputation.” Griffin v. Holden, □□□□

App. 129, 133, 636 S.E.2d 298, 302 (2006) (quotation omitted); see Hendrix v. Town of W.

5 Atticus only alleges that the second half of this statement is defamatory and thus only quotes

the second half of this statement in its counterclaims. The court declines, however, to evaluate one

half of a sentence divorced entirely from the other half and from its context in the press release.

Moreover, Atticus cites the website for the press release in its counterclaims. See [D.E. 272] □□□□

7 The statute of limitations likely bars Atticus’ □ defamation claim. Under North Carolina law,

defamation claims are subject to a one-year statute of limitations. See N.C. Gen. Stat. § 1-54(3);

Philips v. Pitt Cnty. Mem’! Hosp., 222 N.C. App. 511, 526-27, 731 S.E.2d 462, 472-73 (2012).

Syngenta published its press release on November 12, 2019. See [D.E. 272] ] 223. Atticus did not

raise its defamation counterclaim until June 29, 2021. See [D.E. 272] 86. Syngenta, however, failed

to raise the statute of limitations in its brief supporting its motion to dismiss, and thus the court

considers the merits of Atticus’s defamation claim. See Eriline Co. S.A. v. Johnson, 440 F.3d 648,

656-57 (4th Cir. 2006) (stating “the general rule that a statute of limitations defense should not be

raised and considered sua sponte”).

10

Jefferson, 273 N.C. App. 27, 32, 847 S.E.2d 903, 907 (2020); Boyce & Isley, PLLC v. Cooper, 211

N.C. App. 469, 478, 710 S.E.2d 309, 317 (2011); Craven v. Cope, 188 N.C. App. 814, 816, 656

S.E.2d 729, 732 (2008); Smith-Price v. Charter Behav. Health Sys., 164 N.C. App. 349, 356, 595

S.E.2d 778, 783 (2004); see also Swinney v. Frontier Airlines, Inc., No. 1:19-cv-808, 2020 WL

3868831, at *5 (M.D.N.C. July 9, 2020) (unpublished); Moore v. Cox, 341 F. Supp. 2d 570, 574

(M.D.N.C. 2004). In considering a motion to dismiss, a court must “credit the plaintiffs allegation

of the actual falsity of a statement.” Chapin v. Knight-Ridder, Inc., 993 F.2d 1087, 1092 (4th Cir.

1993) (citation omitted): see Gilmore v. Jones, 370 F. Supp. 3d 630, 671 (W.D. Va. 2019). A

plaintiff, however, cannot merely allege falsity in “vague, conclusory terms.” Chapin, 993 F.2d at

1092; cf. Mayfield v.. NASCAR, Inc., 674 F.3d 369, 377 (4th Cir. 2012) (stating that “the usual

standards of notice pleading apply in defamation cases”); Hatfill v. N.Y. Times Co., 416 F.3d 320,

329 (4th Cir. 2005); Jolly v. Acad. Collection Serv., Inc., 400 F. Supp. 2d 851, 861 (M.D.N.C.

2005). □

Defamation can be either libel or slander. See, e.g., Craven, 188 N.C. App. at 816, 656

S.E.2d at 732; Tallent v. Blake, 57 N.C. App. 249, 251, 291 S.E.2d 336, 338 (1982); cf. Renwick

v. News and Observer Publ’g Co., 310 N.C. 312, 323-24, 312 S.E.2d 405, 412-13 (1984). □

Generally, libel is written and slander is oral. See Aycock v. Padgett, 134. N.C. App. 164, 165, 516

S.E.2d 907, 909 (1999); Tallent, 57 N.C. at 251, 291 S.E.2d at 338; cf. Bell v. Simmons, 247 □□□□

488, 494, 101 S.E.2d 383, 388 (1958). North Carolina recognizes three classes of libel—libel per

se, libel per quod, and libel by “publications susceptible of two interpretations one of which is

defamatory and the other not.” Renwick, 310 N.C. at 316, 312 S.E.2d at 408 (quotation omitted);

see Arnold v. Sharpe , 296 N.C. 533, 537, 251 S.E.2d 452, 455 (1979); Flake v. Greensboro News

11

Co., 212 N.C. 780, 785, 195 S.E. 55, 59 (1938); Clark v. Clark, 867 S.E.2d 743, 754 (N.C. Ct. App.

2021); see also Swinney, 2020 WL 3868831, at *5.

Atticus alleges the statements in Syngenta’s press release are libel per se. Libel per se is a

false written statement communicated to a third party that “tends to impeach a person in that person’s

trade or profession [or] otherwise tends to subject one to ridicule, contempt or disgrace.” Renwick,

N.C. at 317, 312 S.E.2d at 408-09; see Flake, 212 N.C. at 782, 195 S.E. at 59-60; Cherry v.

United Parcel Serv., Inc., No. 5:07-CV-403-D, 2009 WL 8641019, at *9 (E.D.N.C. Sept. 28, 2009)

(unpublished). In evaluating whether a publication constitutes libel per se, a court must analyze

whether the publication is defamatory when “stripped of all insinuations, innuendo, colloquium, and

explanatory circumstances.” Griffin, 180 N.C. App. at 134, 636 S.E.2d at 303; see, e.g., Nucor Corp.

v. Prudential Equity Grp., LLC, 189 N.C. App. 731, 736, 659 S.E.2d 483, 487 (2008). Whether a

statement is defamatory per se is a question of law. See, ¢.g., Ellis v. N. Star Co., 326 N.C. 219, 224,

388 S.E.2d 127, 130 (1990). When a plaintiff alleges that statements are defamatory per se, the

statements “must be susceptible of but one meaning and of such nature that the court can presume

as a matter of law that they tend to disgrace and degrade the party or hold him up to public hatred,

contempt or ridicule, or cause him to be shunned and avoided.” Boyce & Isley, 153 N.C. App. at

30-31, 568 S.E.2d at 898-99; see, e.g., Renwick, 310 N.C. at 317-18, 312 S.E.2d at 409; Oatesv.

Wachovia Bank & Tr. Co., 205 N.C. 14, 16, 169 S.E.2d 869, 871 (1933). “When examining an

allegedly defamatory the court must view the words within their full context and interpret

them as ordinary people would understand them.” Boyce & Isley, 153 N.C. App. at 31, 568 S.E.2d

at 899 (quotation omitted); see Renwick, 310 N.C. at 318, 312 S.E.2d at 409. However, “a statement

must state or imply a defamatory fact to be actionable.” Daniels v. Metro Magazine Holding Co.,

L.L.C,, N.C. App. 533, 539, 634 S.E.2d 586, 590 (2006); see Craven, 188 N.C. App. at 817, 656

S.E.2d at 732. Thus, a statement that is rhetorical hyperbole or “a pure expression of opinion is

protected because it fails to assert an actual fact.” Daniels, 179 NC. App. at 539, 634 2dat 590;

see Craven, 188 N.C. App. at 817, 656 S.E.2d at 732.

Atticus does not plausibly allege a defamation claim. Atticus asserts that Syngenta’s

statements in its press release are false. See [D.E. 272] 224-26. As for the first statement, that

assertion is a bare conclusion the court need not accept as true. The first allegedly defamatory

‘Statement merely summarizes the claims Syngenta alleged in its complaint against Atticus. See

Compl. [D.E. 1]. Syngenta’s summary truthfully and accurately describes the claims in its

complaint. See id. Thus, the first statement Atticus cites from Syngenta’s press release cannot

support an actionable defamation claim.

As for the second statement, the court assumes the statement’s falsity for the purpose of

resolving Syngenta’s motion to dismiss. See Chapin, 993 F.2d at 1092; Gilmore, 370 F. Supp. 3d

at 671. Assuming without deciding that Syngenta’s statement is false® and it injured Atticus’s

business reputation, the statement is mere eoinion Again, Syngenta wrote in the press release:

“Atticus” infringement enables it to unfairly compete in the crop protection market and benefit from

significant product development investments made by Syngenta, the original developer of

azoxystrobin.” Syngenta Press Release. Syngenta made the statement in the context of its public

announcement of this lawsuit. The sentences immediately before and after the alleged defamatory

statement factually summarize Syngenta’s complaint. See id. Syngenta’s assertion that Atticus

competes unfairly is premised on Syngenta’s infringement claims in this case. Indeed, the press

release contains nothing, except the announcement of the lawsuit, to support the assertion that

® The statement’s truth or falsity rests on whether Atticus did, in fact, infringe Syngenta’s

patents, and that question is at the heart of this lawsuit. □

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Atticus competes unfairly. See id. In context, Syngenta’s allegedly defamatory statement is an

opinion that Syngenta believes Atticus competes unfairly by infringing Syngenta’s patents. Syngenta

sued Atticus based on that opinion and belief. Syngenta’s statement cannot reasonably be interpreted

as stating actual facts about Atticus given that the purpose of suit (which is the subject of the press

release) is to litigate the claims in the complaint. Because the statement is a protected opinion,

Atticus has not plausibly alleged a defamation claim. Thus, the court dismisses the claim. .

C,

Syngenta moves to dismiss Atticus’s unfair and deceptive trade practices claim. See [D.E.

295] 31. Atticus’s unfair and deceptive trade practices claim is based on its sham litigation claim,

its defamation claim, and allegations that Syngenta’s alleged conduct is generally unfair and

deceptive. See IDE. 319] 10-13.

To state an unfair and deceptive trade practices claim, a plaintiff must plausibly allege: “(1)

an unfair or deceptive act or practice, (2) in or affecting commerce, and (3) which proximately

caused injury to plaintiffs.” Walker v. Fleetwood Homes of N.C., Inc., 362 N.C. 63, 71-72, 653

S.E.2d 393, 399 (2007) (quotation omitted); see SciGrip v. Osae, 373 N.C. 409, 426, 838S.E.2d

334, 347 (2020). “A practice is unfair when it offends established public policy as well as when the

practice is immoral, unethical, oppressive, unscrupulous, or substantially merits to consumers.

A practice is deceptive if it has the capacity or tendency to deceive.” Walker, 362 N.C. at 72, 653

S.E.2d at 399 (cleaned up). “[I]t is not necessary for the plaintiff to show fraud, bad faith, deliberate

or knowing acts of deception, or actual deception, but plaintiff must show that the acts complained □

of possessed the tendency or capacity to mislead, or created the likelihood of deception.” Gtess v.

Rowboat Co., Inc., 190 N.C. App. 773, 776, 661 S.E.2d 278, 281 (2008) (alteration and quotation

omitted); see Overstreet v. Brookland, Inc., 52 N.C. App. 444, 452-53, 279 S.E.2d 1, 7 (1981).

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As for Atticus’s unfair and deceptive trade practices claim based on sham litigation, see [D.E.

□ 1-1 2, “[t]he institution of a lawsuit may be the basis for an unfair trade practices claim if the

lawsuit is a mere sham to cover what is actually nothing more than an attempt to interfere directly

with the business relationships of a competitor.” United States v. Ward, 618 F. Supp. 884, 907

(E.D.N.C. 1985); see RE/MAX LLC v. M.L. Jones & Assocs., Ltd., No. 5:12-CV-768-D, 2013 WL

4647517, at *4 (E.D.N.C. Aug. 29, 2013) (unpublished). The Noerr-Pennington doctrine provides

the proper standard for evaluating allegations that the pursuit of litigation constitutes a business tort.

See IGEN Int’l, Inc., 335 F.3d at 310. As stated, the Noerr-Pennington doctrine bars Atticus’s

antitrust claim. Similarly, it bars Atticus’s unfair and deceptive trade practices claim to the extent

the claim is based on Atticus’s sham litigation claim. See, e.g., RE/MAX, 2013 WL 4647517, at *4

(holding that because the lawsuit was not objectively baseless, “the lawsuit [was] not an unfair act

prohibited by the UDTPA”); Gupton v. Son-Lan Dev. Co., 205 N.C. App. 133, 143-44, 695 S.E.2d

763, 771 (2010) (“As defendants had probable cause to bring” their lawsuit, “their actions were not

unfair.”). □

As for Atticus’s allegations that the statements in Syngenta’s press release are misleading and

deceptive, see IDE. 319] 12, 30-33, Atticus fails to ae aclaim. Plausibly alleging a defamation

per se claim may suffice to state an unfair and deceptive trade practices claim. See, e.g., Boyce &

Isley, PLLC, 153 N.C. App. at 35-36, 568 S.E.2d at 902. However, Atticus did not plausibly allege

a defamation claim. Nonetheless, the standard for an unfair and deceptive trade practices claim is

lower than that for defamation—i.e., the offending statements or conduct need only have the

tendency or capacity to mislead or deceive. See Gress, 190 N.C. App. at 776, 661 S.E.2d at 281.

As for the first allegedly defamatory statement, that statement accurately summarizes the claims

Syngenta alleged in this lawsuit. It is not misleading. As for the second allegedly defamatory

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statement, it is an opinion made in the context of a press release about this litigation and Syngenta’s

motivations for suing Atticus. Given this context, it also is not likely to deceive, given a reasonable

reader would construe it in the context of Syngenta’s adversarial position as a plaintiff. To the extent

Atticus relies on other allegations, Atticus has not pleaded those allegations with sufficient

particularity under Federal Rule of Civil Procedure 9(b). See, e.g.; Sasso v. Tesla, Inc., No. 5:21-

CV-24-D, 2022 WL 363850, at *10 (E.D.N.C. Feb. 7, 2022); Cross v. Ciox Health, LLC, 438 F.

Supp. 3d 572, 584-86 (E.D.N.C. 2020); Topshelf Mgmt., Inc. v. Campbell-Ewald Co., 117 F. Supp.

3d 722, 728-32 (M.D.N.C. 2015); see also Edmonson v. Eagle Nat’ Bank, 922 F.3d 535, 553 (4th

Cir. 2019); Harrison v. Westinghouse Savannah River Co., 176 F.3d 776, 783-84 & 11.5 (4th Cir.

1999)?

Finally, taking Atticus’s allegations as true, Atticus’s allegations concerning it and

Syngenta’s pre-suit negotiations do not plausibly state an unfair and deceptive trade practices claim.

See [D.E. 319] 11. Although Atticus and Syngenta were unable to agree on the terms of a

confidentiality agreement in order to continue negotiations, that failure alone is not sufficiently

“immoral, unethical, oppressive, unscrupulous, or substantially injurious” to state an unfair and

deceptive trade practices claim. Walker, 362 N.C. at 72, 653 S.E.2d at 399. Accordingly, the court

dismisses Atticus’s unfair and deceptive trade practices claim.

° In opposition, Atticus cites the deposition testimony of a witness from a third-party

company suggesting that, based on Syngenta’s lawsuit, he thought Atticus may have acted

improperly. See [D.E. 319] 13. Atticus did not allege or incorporate the testimony in Atticus’s-

counterclaims, and the court does not consider that testimony in resolving Syngenta’s motion to

dismiss. But even if the court were to consider it, the testimony concerns the witness’s opinion of

Atticus based on the lawsuit, not the statements in the press release. The press release is not even

mentioned in the portion of the deposition Atticus submitted as an exhibit alongside its opposition

brief. See [D.E. 321-1]. Thus, even if the court considered the testimony, the testimony would not

save Atticus’s claim from dismissal. □

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I.

In sum, the court GRANTS plaintiff's motion to dismiss [D.E. 294], DISMISSES

defendant’s antitrust, defamation, and unfair and deceptive trade practices counterclaims, and

DENIES as moot plaintiff's motion to stay [D.E. 301]. Nothing in this order affects defendant’s

remaining counterclaims for declaratory relief and attorney’s fees.

SO ORDERED. This 24 day of March, 2022.

A Daves

O'S S C. DEVER I

United States District Judge

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