XY, LLC v. Trans Ova Genetics, LC

Filing 284

ORDER Granting Counterclaim Defendants' Motion for Summary Judgment on Antitrust Counterclaims. XY, LLC and Inguran, LLC's Motion for Summary Judgment on Statute of Limitations Grounds (ECF No. 229 ) is GRANTED. Trans Ova Genetics, LC� 39;s counterclaims for monopolization and attempted monopolization are barred by the statute of limitations. When judgment is entered, it shall be in favor of XY and Inguran and against Trans Ova as to those claims. By Judge William J. Martinez on 03/26/2015. (athom, )

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Judge William J. Martínez
Civil Action No. 13-cv-0876-WJM-NYW
XY, LLC,
Plaintiff / Counterclaim Defendant,
v.
TRANS OVA GENETICS, LC,
Defendant / Counterclaim Plaintiff,
v.
INGURAN, LLC,
Third Party Defendant.

ORDER GRANTING COUNTERCLAIM DEFENDANTS’
MOTION FOR SUMMARY JUDGMENT ON ANTITRUST COUNTERCLAIMS

Plaintiff and Counterclaim Defendant XY, LLC (“XY”) brings this action for patent
infringement, breach of contract, and related claims against Defendant and
Counterclaim Plaintiff Trans Ova Genetics, LC (“Trans Ova” or “Counterclaim Plaintiff”).
(ECF No. 113.) Trans Ova brings counterclaims against XY and third-party claims
against Inguran, LLC (“Inguran”) (together, “Counterclaim Defendants”) for, among
other claims, monopolization and attempted monopolization under the Sherman Act,
15 U.S.C. § 2. (ECF No. 192 at 59–60.) This matter is before the Court on
Counterclaim Defendants’ Motion for Summary Judgment on Statute of Limitations
Grounds (“Motion”) as to the Sherman Act counterclaims. (ECF No. 229.) For the
reasons set forth below, the Motion is granted.

I. BACKGROUND
The relevant undisputed facts are as follows. This case arises out of a License
Agreement (“Agreement”) into which the parties entered on April 16, 2004, wherein XY
licensed its patented sex-selection technology to Trans Ova for use in the animal
breeding industry. (Movant’s Statement of Material Facts (“MSMF”) (ECF No. 229 at
2–3) ¶ 1; ECF No. 247-1 at 21-49.) In the event of certain breaches of the Agreement’s
limitations and requirements by Trans Ova, the Agreement provided for termination in
writing by XY. (ECF No. 47-1 at 30.)
On November 20, 2007, XY delivered a letter to Trans Ova asserting that
Defendant had breached the Agreement in various ways and declaring the agreement
terminated (the “Termination Letter”). (MSMF ¶ 2.) Trans Ova disagreed with XY’s
assertion of breach and termination of the Agreement, and over the course of multiple
years, the parties negotiated but failed to resolve the dispute. (ECF No. 247-5.) During
this time, Trans Ova made royalty payments to XY pursuant to the Agreement, but XY
declined all such payments except for one. (ECF No. 192 at 4.)
XY filed its original complaint against Trans Ova in the District Court for the
Western District of Texas on March 5, 2012, bringing claims for patent infringement.
(ECF No. 4.) On August 1, 2012, Trans Ova filed an Answer and Counterclaims,
bringing 33 claims against the Counterclaim Defendants, including the Sherman Act
claims at issue here. (ECF No. 5.) The action was transferred to this Court on April 4,
2013. (ECF No. 1.) The operative Amended Counterclaims were filed on April 25,
2014. (ECF No. 192.)

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XY and Inguran filed the instant Motion on July 25, 2014, arguing that the
Sherman Act claims were time-barred. (ECF No. 229.) Trans Ova filed a Response
(ECF No. 247), and XY and Inguran filed a Reply (ECF No. 258).
II. LEGAL STANDARD
Summary judgment is appropriate only if there is no genuine issue of material
fact and the moving party is entitled to judgment as a matter of law. Fed. R. Civ. P.
56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986); Henderson v. Inter-Chem
Coal Co., Inc., 41 F.3d 567, 569 (10th Cir. 1994). W hether there is a genuine dispute
as to a material fact depends upon whether the evidence presents a sufficient
disagreement to require submission to a jury or conversely, is so one-sided that one
party must prevail as a matter of law. Anderson v. Liberty Lobby, 477 U.S. 242, 248–49
(1986); Stone v. Autoliv ASP, Inc., 210 F.3d 1132 (10th Cir. 2000); Carey v. U.S. Postal
Serv., 812 F.2d 621, 623 (10th Cir. 1987).
A fact is “material” if it pertains to an element of a claim or defense; a factual
dispute is “genuine” if the evidence is so contradictory that if the matter went to trial, a
reasonable party could return a verdict for either party. Anderson, 477 U.S. at 248.
The Court must resolve factual ambiguities against the moving party, thus favoring the
right to a trial. Houston v. Nat’l Gen. Ins. Co., 817 F.2d 83, 85 (10th Cir. 1987).
III. ANALYSIS
Counterclaim Defendants argue that Trans Ova’s Sherman Act counterclaims
are barred by the statute of limitations because they are based on the alleged injury
arising from the Termination Letter. (ECF No. 229.) Because the Termination Letter

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was sent more than four years before the Counterclaims were filed, Counterclaim
Defendants contend that the Sherman Act claims are untimely. (Id.)
The statute of limitations for federal antitrust claims is four years. Champagne
Metals v. Ken-Mac Metals, Inc., 458 F.3d 1073, 1088 (10th Cir. 2006) (citing Kaw Valley
Elec. Coop. Co. v. Kan. Elec. Power Coop., Inc., 872 F.2d 931, 933 (10th Cir. 1989)).
However, the Tenth Circuit recognizes a “continuing conspiracy” exception under which
the limitations period restarts when a plaintiff is injured anew by a defendant’s separate
overt act, even though the defendant acts in furtherance of a conspiracy that began
outside the limitations period. Id. “[F]or an act to trigger the exception: 1) It must be a
new and independent act that is not merely a reaffirmation of a previous act; and 2) it
must inflict new and accumulating injury on the plaintiff.” Id. (internal quotation marks
omitted).
Trans Ova argues that the continuing conspiracy exception applies to render its
Sherman Act claims timely. (ECF No. 247 at 13–14.) Specifically, Trans Ova contends
that the Termination Letter was only the beginning of a course of conduct that
continually caused it injury, rather than a final act that caused it singular injury. (Id.)
According to Trans Ova, the Counterclaim Defendants’ alleged continuous course of
conduct included the following overt acts: (1) misuse of patents through the
enforcement of anticompetitive provisions in the Agreement, including XY’s breach of
contract claim against Trans Ova in this action; (2) the enforcement of fraudulent
patents acquired through inequitable conduct before the Patent Office; (3) elimination of
competition through the use of long-term exclusive customer agreements; and (4) the

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protracted negotiations following the Termination Letter and ending with XY’s filing of its
Complaint. (Id. at 16–23.)
Even assuming that these alleged actions constitute “new and independent act[s]
that [are] not merely a reaffirmation of a previous act,” however, Trans Ova must also
show that these acts resulted in “new and accumulating injury” in order to invoke the
continuing conspiracy exception to the four-year limitations period. See Champagne
Metals, 458 F.3d at 1088. On that issue, Counterclaim Defendants point to the
deposition testimony of Trans Ova’s damages expert, Dr. David DeRamus, who stated
that the “proximate cause” of Trans Ova’s damages was the Counterclaim Defendants’
attempt to terminate the Agreement. (ECF No. 229 at 5.) Trans Ova argues that
Counterclaim Defendants have misconstrued Dr. DeRamus’s testimony, and that he
was referring to the damages resulting from XY’s alleged breach of contract. (ECF No.
247 at 14–15.) Trans Ova’s breach of contract claim asserts that the Counterclaim
Defendants breached the Agreement by purporting to terminate it without cause when
XY sent Trans Ova the Termination Letter. (ECF No. 192 at 60–61.)
Although Trans Ova correctly notes that Dr. DeRamus discussed damages
resulting from both the alleged breach of contract and the alleged antitrust violations,
his testimony nevertheless fails to support Trans Ova’s assertion that it suffered new
and accumulating injury from independent acts after the Termination Letter. As Trans
Ova admits, both its antitrust and contract damages “result from being excluded from
the relevant markets—the technology and sorting markets.” (Id. at 15.) Dr. DeRamus
explained that the damages resulting from the antitrust violations would be the same as
those resulting from the breach of contract: “You might calculate them differently in the
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decimal points, but I think generally, . . . the damages would be reasonably consistent
under either theory.” (Deposition of David DeRamus (ECF No. 247-14) at 172; see also
id. at 169–70 (“I guess the question’s whether, you know, proximate cause versus
ultimate cause”).) Under Dr. DeRamus’s theory of damages, the entirety of the injury
suffered by Trans Ova could equally have resulted from the alleged breach of contract,
which occurred when the Termination Letter was sent, or from the antitrust violations,
whose effects were felt over several years. Consequently, Dr. DeRamus’s report does
not assist Trans Ova in identifying any particular post-Termination Letter damage as a
“new and accumulating” injury resulting from the subsequent acts it identifies in its
Response, because any such injury could have flowed from the breach of contract.
Although Trans Ova has provided detailed descriptions of Counterclaim
Defendants’ alleged post-Termination Letter anticompetitive acts, it has not identified
any new injury that is specifically attributable to those acts. (ECF No. 247 at 16–22.)
Instead, Trans Ova refers generally to its injury resulting from Counterclaim Defendants’
exclusion of Trans Ova from the technology and sex-sorting markets. (Id. at 15.)
Accordingly, the Court finds that Trans Ova has failed to show that those acts caused
new and accumulating injury sufficient to trigger the continuing conspiracy exception to
the four-year statute of limitations. See Champagne Metals, 458 F.3d at 1088.
Because Trans Ova has not established that any exception applies, the four-year
limitations period applies to its antitrust counterclaims. See id. Viewed in the light most
favorable to Trans Ova, the evidence shows that Trans Ova’s injuries began when
Counterclaim Defendants prevented it from fairly competing in the technology and
sorting markets by purporting to terminate the Agreement on November 20, 2007.
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(ECF Nos. 247-14 at 6–30; 247-15 at 1–11.) T hus, the antitrust claims were untimely
unless they were filed on or before November 20, 2011. 1 The parties dispute whether
the filing date of the Counterclaims, August 1, 2012, controls (ECF No. 229 at 5–6), or
whether the filing date should relate back to March 5, 2012, the date of XY’s initial
complaint (ECF No. 247 at 17 n.9). The Court need not resolve this dispute because
Trans Ova’s Sherman Act claims are untimely by either date.
Therefore, the Court finds that Trans Ova’s Sherman Act claims are barred by
the statute of limitations, and Counterclaim Defendants’ Motion is granted.
IV. CONCLUSION
For the foregoing reasons, the Court ORDERS as follows:
1.

XY, LLC and Inguran, LLC’s Motion for Summary Judgment on Statute of
Limitations Grounds (ECF No. 229) is GRANTED; and

2.

Trans Ova Genetics, LC’s counterclaims for monopolization and attempted
monopolization are barred by the statute of limitations. When judgment is
entered, it shall be in favor of XY and Inguran and against Trans Ova as to those
claims.

1

The Court notes that some ambiguity exists as to whether a limitations period begins
running on the date of the triggering event or on the following day pursuant to the calculation
method under Federal Rule of Civil Procedure 6(a). See, e.g., Simon v. Wis. Marine Inc., 947
F.2d 446, 447 (10th Cir. 1991); Bailey v. Faux, 704 F. Supp. 1051, 1053–4 (D. Utah 1989). As
the instant case does not depend on this one-day distinction, the Court need not resolve the
question here.

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Dated this 26th day of March, 2015.
BY THE COURT:

William J. Martínez
United States District Judge

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