Auburn University v. International Business Machines, Corp.
ORDERED that: 1) Auburn's 285 Motion to Strike IBM's Untimely Dispositive Motion, Doc. # 280 , is hereby GRANTED, as further set out; 2) Auburn's 285 Motion to Preclude IBM's Introduction of a New License Theory is hereby DENI ED; 3) Auburn's 285 Motion for costs associated with discovery related to evidence presented in IBMs response is DENIED; 4) The Magistrate Judge's 166 Order as to discovery of documents relating to the Sony-IBM relationship is hereby RE VERSED and Auburn's Motion to Compel, Doc. # 150 & # 154 , is hereby GRANTED as to the documents encompassed by the Court's previously issued 305 Order; 5) Any further discovery issues in this case are referred to the Magistrate Judge. Signed by Honorable Judge Mark E. Fuller on 12/22/2011. Attachments: # 1 Civil Appeals Checklist) (wcl, )
IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF ALABAMA
CASE NO. 3:09-cv-694-MEF
This cause is before the Court on IBM’s Response in Opposition to Auburn’s Motion
for Summary Judgment Against IBM’s Affirmative License Defense and Cross-Motion for
Summary Judgment (IBM’s “response”) (Doc. #280) and Auburn’s Motion to Preclude
Introduction by IBM of a New License Theory and Motion to Strike IBM’s Untimely
Dispositive Motion (Auburn’s “motion”) (Doc. #285). Also before the Court are outstanding
discovery issues raised by Auburn’s appeal of the magistrate judge’s discovery order
(Auburn’s “appeal”) (Doc. #172).
The Court held oral argument regarding IBM’s response, Auburn’s motion, and
Auburn’s appeal on December 8, 2011 (Hr’g Tr., Doc. #290). For the reasons discussed
below, Auburn’s motion is due to be granted in part and denied in part, and the magistrate
judge’s ruling is due to be reversed on the issue of the Sony-IBM relationship and affirmed
on all other issues. Auburn’s motion and Auburn’s appeal will be addressed in turn.
I. Auburn’s Motion to Strike and Motion to Preclude
A. Procedural Background
The Court’s Amended Scheduling Order (Doc. #207), set the deadline for dispositive
motions in this case as October 28, 2011. On that date, Auburn filed a motion for summary
judgment on IBM’s affirmative license defense (Doc. #255). On November 30, 2011, IBM
filed its response in opposition to Auburn’s motion for summary judgment, along with a
cross-motion for summary judgment on the affirmative license defense (Doc. #280). On
December 5, 2011, Auburn filed the motion to preclude and strike at issue here (Doc. #285).
In its motion, Auburn asks this Court to strike IBM’s cross-motion and preclude IBM from
introducing what Auburn describes as a “new license theory.” The Court heard oral
argument on the issues raised in Auburn’s motion on December 8, 2011 (Hr’g Tr., Doc.
B. Whether an Affirmative License Defense Exists is a Question of Law Predicated on
Underlying Questions of Fact
At oral argument, the Court asked the parties to file memoranda of law on whether the
affirmative license defense was premised on questions of fact or questions of law ( Hr’g Tr.,
Doc. #290, 277-78). Based on the parties’ prompt responses to the Court’s order (Docs.
#291, 293), the Court concludes that the affirmative license defense is a question of law that
depends heavily on underlying facts.
Auburn points to several cases that are helpful in resolving this question (Doc. #293).
In University of Colorado Foundation, Inc., v. American Cyanamid Co., the Federal Circuit
noted that “[t]he legal question of inventorship is reviewed without deference. . . . This court
reviews the findings of fact upon which a district court’s inventorship determination is
based for clear error.” 342 F.3d 1298, 1304 (Fed. Cir. 2003); see also Univ. of Pittsburgh
of Commonwealth Sys. of Higher Ed. v. Hedrick, 573 F.3d 1290, 1297 (Fed. Cir. 2009)
(“Inventorship is a question of law that we review de novo, based on underlying facts which
we review for clear error.”); Lucent Techs. Inc., v. Gateway, Inc., 543 F.3d 710, 722-23 (Fed.
Cir. 2008) (discussing jury trial of infringement issues).
Even in light of this precedent, IBM contends that there are two legal questions the
Court can answer based on the facts currently in the record (Doc. #291 at 5). These questions
are, one, how to interpret the employment agreement between IBM and Dr. Thomas Barnett,
and, two, “whether or not Auburn has set forth evidence of conception of certain claims of
the Auburn patents prior to that date.” (Hr’g Tr., Doc. #290 at 9-10).
However, even as IBM argues that these are questions of law for the Court to decide,
IBM’s memorandum cites cases offering observations such as “[p]riority and its constituent
issues of conception and reduction to practice are questions of law predicated on subsidiary
factual findings,” Eaton v. Evans, 204 F.3d 1094, 1097 (Fed. Cir. 2000), and “[q]uestions of
law are not answerable in a vacuum. Only after the necessary fact pattern exists can the legal
question be answered.” Dana Corp. v. Amer. Precision Co., Inc., 827 F.2d 755, 758 (Fed.
Cir. 1987). IBM argues that the “necessary fact pattern” for ruling in its favor “is found in
the undisputed facts set forth in IBM’s cross-motion.”1 (Doc. #291 at 5).
If the facts in IBM’s cross-motion are currently “undisputed,” the Court believes that
this is because Auburn was not aware of many of these facts until November 30, 2011, and
thus has not had a chance to dispute them. While the Court does not agree with Auburn that
IBM’s response purports to advance an entirely new theory of IBM’s case, the Court
recognizes that much of the evidence submitted with IBM’s response is new to Auburn. As
will be discussed below, IBM’s cross-motion will be stricken, but IBM has a right to present
new evidence in order to avoid an unfavorable ruling on Auburn’s motion for summary
judgment, and Auburn has a right to reply to IBM’s new evidence.
1. Auburn’s Motion to Strike IBM’s Cross-Motion is Due to be GRANTED
Dispositive motions in this case were due on October 28, 2011 (Doc. #207). IBM
filed this cross-motion for summary judgment on November 30, 2011 (Doc. #280). At oral
argument before this Court on December 8, 2011, IBM conceded that its motion was
untimely (Hr’g Tr., Doc. #290 at 4). IBM stated that it filed its untimely cross-motion
because the affirmative license defense was a question of law, and IBM wanted to allow the
Court the opportunity to resolve the issue before trial (Hr’g Tr., Doc. #290 at 4-5). The Court
has decided that there are factual issues that must be resolved in order to determine whether
IBM has a valid license defense.
Auburn rightfully objected to the substantive arguments presented in IBM’s response to the
Court’s request for a memorandum of law (Doc. #294). The Court will not consider IBM’s arguments,
and only mentions this statement by IBM as a point of reference.
Because IBM’s motion was untimely, and because the Court has concluded that there
are factual questions that need to be answered before the Court can make a summary
judgment ruling on the affirmative license defense, Auburn’s motion to strike IBM’s crossmotion for summary judgment (Doc. #285) is due to be GRANTED.
2. Auburn’s Motion to Preclude IBM’s “New License Theory” is due to be
a. IBM Presented Viable “New Evidence” in its Response to Auburn’s
Motion for Summary Judgment
In addition to striking IBM’s cross-motion for summary judgment, Auburn has moved
this Court to preclude the evidence introduced by IBM in its response to Auburn’s motion
for summary judgment and prevent IBM from introducing a “new license theory” (Doc.
#285 at 6). Despite Auburn’s protestations, however, IBM had a right to present the
evidence at issue in opposition to Auburn’s motion for summary judgment on the affirmative
license defense. As such, Auburn’s motion to preclude is due to be DENIED.
The Court is not convinced that IBM is introducing a “new license theory” in its
response to Auburn’s motion. Rather, IBM has introduced new evidence to develop a theory
that IBM has advanced, albeit without providing much detail, since filing its answer to
Auburn’s initial complaint in September of 2009 (See Answer, Doc. #29 at 8 (asserting on
September 28, 2009, that “Auburn’s claims are barred due to license”)).
IBM bears the burden of proving its affirmative license defense at trial. See Intel
Corp. v. Broadcom Corp., 173 F. Supp 2d. 201, 206 (D. Del. 2001) (citing McCoy v.
Mitsuboshi Cutlery, Inc., 67 F.3d 917, 920 (Fed. Cir. 1995)) (“At trial . . . the party asserting
. . . affirmative license defenses . . . bear[s] the burden of proving each of these defenses.”);
Rutgers v. United States, 41 Ct. Cl. 764, 768 (Fed. Cl. 1998) (“License to use patented
technology is an affirmative defense which imposes the burden of proving the existence of
a license on the defendant.”) (citation omitted). In its motion for summary judgment on
IBM’s affirmative license defense, Auburn argues that IBM has presented no evidence to
support its affirmative license defense (Doc. #255 at 6-7, 12).
The Eleventh Circuit has held that,2 where the non-movant—here, IBM— would bear
the burden of proof at trial and the movant has demonstrated an absence of evidence on the
issue, the non-movant may respond in one of two ways:
First, he or she may show that the record in fact contains supporting evidence,
sufficient to withstand a directed verdict motion, which was “overlooked or
ignored” by the moving party, who has thus failed to meet the initial burden
of showing an absence of evidence. Second, he or she may come forward with
additional evidence sufficient to withstand a directed verdict motion at trial
based on the alleged evidentiary deficiency.
Fitzpatrick v. City of Atlanta, 2 F.3d 1112, 1116-17 (11th Cir. 1993) (emphasis added).
Here, IBM bears the burden of proving its affirmative defense at trial, and Auburn’s
summary judgment motion argues that IBM has presented no evidence to support its defense
(Doc. #255 at 6-7, 12). As such, IBM is allowed to respond to Auburn’s motion with
“additional evidence,” as provided by Fitzpatrick.
In a patent case, the law of the circuit in which the district court sits applies to non-patent
issues. In re Cambridge Biotech Corp. 186 F.3d 1356, 1368 (Fed. Cir. 1999)
b. Auburn Incorrectly Argues that it will be Incurably Prejudiced by
Consideration of IBM’s New Evidence
Despite the propriety of IBM’s introduction of new evidence, Auburn nevertheless
contends that “allowing IBM to proceed with this new and unfounded license theory at this
late stage would incurably prejudice Auburn.”3 (Doc. #285 at 6). For the reasons discussed
below, this Court concludes that Auburn will not be prejudiced by IBM’s introduction of new
In Fils v. City of Aventura, the Eleventh Circuit held that a district court did not abuse
its discretion in considering documents filed four days after a filing deadline. 647 F.3d 1272,
1284 (11th Cir. 2011).
The Fils court discussed two cases which dictated its result. Id. at 1283. First, the
Fils court noted that Hargett v. Valley Fed. Savings Bank “suggests that the district court [in
Fils] did not abuse its discretion in [considering documents filed four days after a courtimposed deadline].” Id. (citing Hargett v. Valley Fed. Savings Bank, 10 F.3d 754 (11th Cir.
In Hargett, the Eleventh Circuit held that “the district court did not abuse its discretion
in allowing “the defendant to amend its answer to include a new defense four days before the
pre-trial conference . . . because . . . plaintiffs were aware of this defense from the
defendants’ actions in earlier stages of the litigation.” Id.
As indicated above, see supra Part I.B.2.a, IBM asserted this affirmative defense in its Answer
(Doc. #29 at 8). Therefore, contrary to Auburn’s position, this “theory” is not “new.”
The Eleventh Circuit’s holding in Hargett, and the Circuit’s subsequent citation to that
decision in Fils weigh heavily against the granting of Auburn’s motion to preclude. As in
Hargett, Auburn has been aware of IBM’s affirmative license defense since the outset of this
litigation (Answer, Doc. #29 at 8). What’s more, discovery is still open and the pre-trial
conference is more than two months away (Doc. #207). Denying Auburn’s motion in this
posture will be less prejudicial than granting the defendant’s motion to amend after the pretrial conference was in Hargett. Additionally, Auburn will have the opportunity to conduct
further discovery on the affirmative defense issue and file a reply to IBM’s response.
Next, the Fils court discusses Cia. Petrolera Caribe, Inc., v. Arco Caribbean Inc. 754
F.2d 404 (1st Cir. 1985). In that case
the defendants moved for summary judgment and, on the day scheduled for a
hearing on that motion, the defendants filed a reply brief and supporting
documents containing new evidence. The district court considered this late
brief and evidence, but did not give the plaintiffs an opportunity to respond to
these filings. The [First Circuit] found that these actions constituted an abuse
of discretion, not because the district court overlooked a filing deadline, but
because the late filing deprived the plaintiffs of an opportunity to rebut newly
Fils, 647 F.3d at 1283 (citing Petrolera Caribe, 754 F.2d at 409-10 (internal citations
In conclusion, the Fils Court noted that “[m]easured against this precedent
(Hargett and Petrolera Caribe) the district court [in Fils] did not abuse its discretion” in
considering documents filed after a deadline. Fils, 647 F. 3d at 1282. In the case before this
Court, IBM has not even missed a deadline. Indeed, as mentioned above, the close of
discovery and the final pre-trial conference are still two months away.
In sum, IBM properly responded to Auburn’s motion for summary judgment by
presenting new evidence in opposition. Auburn will not be prejudiced because Auburn will
have the opportunity to conduct additional discovery and reply to the evidence filed with
IBM’s response. Auburn has also moved for costs associated with the re-opening of
discovery (Doc. #285 at 9). This motion is due to be DENIED.
IBM has indicated that it will work with Auburn to expedite discovery on this issue.
Any additional discovery issues will be referred to the magistrate judge, and the parties are
expected to work together to gather the necessary information as quickly as possible.
II. Auburn’s Appeal of the Magistrate Judge’s Discovery Order
The Court has now resolved all of the issues contained in Auburn’s appeal of
magistrate judge’s discovery order (Doc. #172), and issues this written order to indicate
as much. This Court holds that the Magistrate Judge’s ruling on Auburn’s motion to
compel (Doc. #166) regarding documents related to the Sony-IBM relationship was
clearly erroneous. The Magistrate Judge’s order, as to the Sony-IBM issue only, is due to
be REVERSED and Auburn’s Motion to Compel (Doc. #150 & #154) is due to be
GRANTED as to the documents encompassed by the Court’s previously issued order
(Doc. #305). As to all other issues contained in Auburn’s appeal and motion to compel,
the Magistrate Judge’s Ruling is due to be AFFIRMED.
Therefore it is hereby ORDERED that:
1) Auburn’s Motion (Doc. #285) to Strike IBM’s Untimely Dispositive Motion,
Doc. #280, is hereby GRANTED. IBM’s cross-motion (Doc. #280) will be
considered only as a response to Auburn’s Motion for Summary Judgment.
2) Auburn’s Motion (Doc. #285) to Preclude IBM’s Introduction of a New License
Theory is hereby DENIED.
3) Auburn’s motion (Doc. #285) for costs associated with discovery related to
evidence presented in IBM’s response is DENIED.
4) The Magistrate Judge’s order (Doc. #166) as to discovery of documents
relating to the Sony-IBM relationship is hereby REVERSED and Auburn’s Motion
to Compel, Doc. #150 & #154, is hereby GRANTED as to the documents
encompassed by the Court’s previously issued order (Doc. #305).
5) Any further discovery issues in this case are referred to the Magistrate Judge.
DONE this the 22nd day of December, 2011.
/s/ Mark E. Fuller
UNITED STATES DISTRICT JUDGE
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