XY, LLC v. Trans Ova Genetics, LC

Filing 529

RECOMMENDATION OF UNITED STATES MAGISTRATE JUDGE by Magistrate Judge Nina Y. Wang on 07/13/2022. This court respectfully RECOMMENDS that: Defendant Trans Ova Genetics, LC's Renewed Motion to Dismiss Count VI of Plaintiffs' Operative Complaint Pursuant to Fed. R. Civ. Proc. 12(b)(6) 439 be DENIED without prejudice; Trans Ova's Motion for Leave to File a Second Amended Answer and Counterclaims to Plaintiffs' Fourth Amended Complaint 446 be GRANTED. (alave, )

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Civil Action No. 17-cv-00944-WJM-NYW
XY, LLC,
INGURAN, LLC, and
BECKMAN COULTER, INC.
Plaintiffs,
v.
TRANS OVA GENETICS, LC,
Defendant.

RECOMMENDATION OF UNITED STATES MAGISTRATE JUDGE
Magistrate Judge Nina Y. Wang
This matter comes before the court on two motions:
(1)

Defendant Trans Ova Genetics, LC’s (“Defendant” or “Trans Ova”)
Renewed Motion to Dismiss Count VI of Plaintiffs’ Operative Complaint
Pursuant to Fed. R. Civ. Proc. 12(b)(6) (“Renewed Motion to Dismiss Count
VI”), [Doc. 439, filed May 20, 2021]; 1 and

(2)

Trans Ova’s Opposed Motion for Leave to File a Second Amended Answer
and Counterclaims to Plaintiffs’ Fourth Amended Complaint (“Motion to

Where the court refers to the filings made in Electronic Court Filing (“ECF”) system in
this action, it uses the convention [Doc. ___]. When the court refers to the ECF docket
number for a different action, it uses the convention [ECF No. ___]. In either case, the
court identifies the page number as assigned by the ECF system.
1

Amend Answer” and, together with the Renewed Motion to Dismiss Count
VI, the “Motions”), [Doc. 446, filed June 11, 2021].
The Motions were referred to the undersigned Magistrate Judge pursuant to 28
U.S.C. § 636(b), the Order Referring Case dated April 19, 2017, [Doc. 17], and the
Memoranda dated May 28, 2021 and June 15, 2021, respectively, [Doc. 443; Doc. 448].
Upon consideration of the briefing associated with these two Motions, the entire docket,
and the applicable law, this court respectfully RECOMMENDS that Trans Ova’s Renewed
Motion to Dismiss Count VI be DENIED without prejudice and Motion to Amend Answer
be GRANTED.
BACKGROUND
The background of this action has been discussed in detail in prior orders of the
court, see, e.g., [Doc. 275], and therefore, this discussion will focus on the instant Motions.
Plaintiff XY, LLC (“XY”) initially brought suit against Trans Ova in a separate action first
before the United States District Court for the Western District of Texas (“Western District
of Texas”) and then transferred to this court, XY, LLC v. Trans Ova Genetics, LC, No. 13cv-0876-WJM-NYW (“XY I” or “the 2012 Lawsuit”). The case proceeded to trial by jury
on January 26, 2016, see [ECF. No. 419], and final judgment entered on April 19, 2016. 2
[ECF No. 507].

Ultimately, an Amended Final Judgment and Second Amended Judgment entered after
an appeal to the United States Court of Appeals for the Federal Circuit (“Federal Circuit”).
[ECF No. 648; ECF No. 702]. These amended judgments are not relevant to the issues
at hand.
2

2

After the trial on XY I, on December 6, 2016, XY initiated this action against Trans
Ova in the Western District of Texas, asserting a variety of causes of action, including
infringement of four patents, United States Patent Nos. 9,145,590 (“‘590 Patent”),
7,723,116 (“‘116 Patent”), 9,365,822 (“‘822 Patent”), and 7,208,265 (“‘265 Patent”), trade
secret misappropriation, and unfair competition. See [Doc. 5]. On December 19, 2016,
prior to Trans Ova filing a responsive motion or pleading, XY filed a First Amended
Complaint asserting two additional patents, United States Patent No. 6,372,422 (“‘422
Patent”) and 8,652,769 (“‘769 Patent”). See [Doc. 6]. Then, on April 21, 2017, following
the transfer of this action to this District, XY filed a Second Amended Complaint adding
co-plaintiff Beckman Coulter, Inc., (“Beckman Coulter”) and an additional patent, United
States Patent No. 9,134,220 (“‘220 Patent”). See [Doc. 24]. On May 5, 2017, Trans Ova
moved to dismiss, based on its court-imposed license theory and that the asserted claims
of the ‘116, ‘265, ‘422, and ‘769 Patents, as well as the claims for trade secret
misappropriation under the Defend Trade Secrets Act, common-law trade secret
misappropriation, common-law unfair competition, quantum meruit, and unjust
enrichment, were barred by claim preclusion. See [Doc. 31 (“Motion to Dismiss”)].
XY subsequently filed Third and Fourth Amended Complaints without objection
from Trans Ova. See [Doc. 51, filed July 26, 2017; Doc. 74, filed October 18, 2017]. The
Third Amended Complaint added another co-plaintiff, Inguran, LLC d/b/a STGenetics
(“Inguran”), an exclusive licensee to the ‘590, ‘116, ‘822, ‘265, ‘422, and ‘769 Patents
(referred to collectively with XY and Beckman Coulter as “Plaintiffs”). See [Doc. 50-1].
The currently operative Fourth Amended Complaint, [Doc. 74], replaced the ‘220 Patent
3

with a reissued patent, United States Patent No. RE46,559 (“‘559 Patent”). The Parties
also filed a Joint Status Report informing the court that the Motion to Dismiss directed at
the Second Amended Complaint could be determined as if directed at the Fourth
Amended Complaint. See [Doc. 83]. Around that same time, Trans Ova filed a Motion
to Supplement its Preliminary Invalidity Contentions. [Doc. 84].
On January 11, 2018, the presiding judge, the Honorable William J. Martinez,
granted in part and denied in part Trans Ova’s Motion to Dismiss. See [Doc. 120]. Judge
Martinez rejected Defendant’s theory regarding the royalty imposed in XY I but dismissed
the asserted claims of the ‘116, ‘265, ‘422, and ‘769 Patents with prejudice, leaving the
asserted claims of the ‘590, ‘822, and ‘559 Patents at issue. See [id. at 5–6]. In light of
the January 11, 2018 Order, and based on Trans Ova’s withdrawal of its request to
supplement its invalidity contentions, see [Doc. 133 at 2–3], this court denied as moot
Trans Ova’s Motion to Supplement its Preliminary Invalidity Contentions. See [Doc. 134].
On February 21, 2018, XY and Inguran filed a Motion for Leave to File a Fifth
Amended Complaint seeking to add two new patents, United States Patent Nos.
9,625,367 (“‘367 Patent”) and 9,835,541 (“‘541 Patent”), as well as adding Inguran as a
named Plaintiff on the currently pleaded Count XII, which alleges infringement of the ‘559
Patent. See [Doc. 137]. Trans Ova objected to the addition of the ‘367 Patent. See [id.
at 1]. The following day, Trans Ova filed a Motion for Judgment on the Pleadings with
respect to the ‘559 Patent, arguing that the patent claimed unpatentable subject matter.
See [Doc. 138]. On August 9, 2018, Judge Martinez granted Trans Ova’s Motion for
Judgment on the Pleadings as to the ‘559 Patent, and denied the Motion for Leave to File
4

a Fifth Amended Complaint. [Doc. 262]. 3 Given Judge Martinez’s ruling, as of August
2018, the only remaining claims arose from the ‘590 and the ‘822 Patent.
In light of Judge Martinez’s ruling, this court directed the Parties to meet and confer
and file a Joint Status Report regarding the impact of that ruling upon the motions thenreferred to the undersigned Magistrate Judge. See [Doc. 263]. Among those referred
motions were Plaintiffs’ Motion to Exclude New Invalidity Arguments, [Doc. 170]. See
[Doc. 263; Doc. 265].

The Parties agreed that the arguments with respect to the

dismissed ‘559 Patent were moot, but that the arguments with respect to the ‘590 Patent
remained intact. See [Doc. 265]. On October 2, 2018, after full briefing, this court
recommended that Plaintiffs’ Motion to Exclude New Invalidity Arguments be granted in
part and denied in part.

See [Doc. 341].

Trans Ova objected to the court’s

Recommendation on October 12, 2018. [Doc. 350].
On August 31, 2018, the Parties filed their respective dispositive motions. [Doc.
290; Doc. 293].

Trans Ova also sought to withdraw its prior Stipulation regarding

infringement, [Doc. 88], and substitute it with a different stipulation, based on its argument
that as of May 7, 2018, the MoFlo SX instruments had been operating in a range that did
not infringe the asserted claims of the ‘590 Patent. See [Doc. 292]. XY and Inguran
objected to the withdrawal of the prior Stipulation regarding infringement, and filed a
Motion to Strike. [Doc. 315]. On December 5, 2018, this court recommended that the
Motion to Strike be denied, allowing Trans Ova to move forward with its argument that as
Judge Martinez subsequently denied summarily a Motion for Reconsideration on August
22, 2018. [Doc. 276]. The Fourth Amended Complaint, [Doc. 74], remains the operative
pleading in this matter.
3

5

of May 7, 2018, it did not infringe the asserted claims of the ‘590 Patent. See [Doc. 363].
The court also then permitted limited discovery with respect to the voltage of the MoFlo
SX. See [Doc. 369; Doc. 374]. Plaintiffs objected to the Recommendation with respect
to the Motion to Strike, [Doc. 371], and Defendant responded, [Doc. 373].
On September 20, 2018, this court entered a Final Pretrial Order, [Doc. 326], and
Judge Martinez set the action for a five-day trial to commence on July 29, 2019, see [Doc.
335]. On March 7, 2019, XY and Inguran sought a stay of the proceedings related to one
of the two remaining patents, the ‘822 Patent, based on a ruling of invalidity by the United
States District Court for the Western District of Wisconsin. [Doc. 382]. In response, facing
the potential of successive trials in this matter, Judge Martinez issued an Order to Show
Cause as to why the court should not enter a Rule 54(b) judgment on all counts except
Count I (as to the ‘590 Patent) and Count III (as to the ‘822 Patent). [Doc. 383]. After
Responses to the Order to Show Cause, [Doc. 386; Doc. 387], Final Judgment was
entered pursuant to Rule 54(b) in favor of Trans Ova and against Plaintiffs, [Doc. 389],
and appeal was taken to the Federal Circuit, [Doc. 391].
On July 31, 2020, the Federal Circuit issued its opinion, reversing the district
court’s judgment that the asserted claims of the ‘559 Patent were ineligible under 35
U.S.C. § 101; vacating the district court’s judgment with respect to claim preclusion as to
the ‘422, ‘116, and ‘769 Patents; and remanding for further proceedings. [Doc. 408]. After
the Mandate issued, [Doc. 411], the Parties sought, and this court convened, a number
of status and scheduling conferences to determine the scope of the case moving forward.
See [Doc. 412; Doc. 427; Doc. 432]. On May 11, 2021, the Parties filed a Stipulation,
6

identifying the counts, asserted patents and claims, and defenses that were as to six
patents before the court and not subject to pending motions: the ‘590 Patent, the ‘116
Patent, the ‘822 Patent, the ‘422 Patent, the ‘769 Patent, and the ‘559 Patent. [Doc. 435
at 2]. The Parties further acknowledged that Trans Ova indicated its intent to move for
leave to amend its Answer and Counterclaims, [Doc. 75]. See [Doc. 435 at 2–3].
On May 20, 2021, Trans Ova filed the instant Renewed Motion to Dismiss Count
VI based on claim preclusion grounds. [Doc. 439]. Then, on June 11, 2021, Trans Ova
filed the instant Motion to Amend Answer, seeking leave to file a proposed Second
Amended Answer and Counterclaims to include, inter alia, a counterclaim against XY and
Inguran for invalidity based on inequitable conduct as to the ‘769 Patent and a
counterclaim against all Plaintiffs of invalidity based on inequitable conduct as to the ‘559
Patent. [Doc. 446]. On July 2, 2021, the Parties filed a Joint Stipulation regarding the
‘559 Patent-in-Suit and the Related U.S. Patent No. 10,495,562 (“‘562 Patent”), whereby
Plaintiffs stipulated that they “shall not sue TOG for infringing any claim of the ‘562 Patent
by making, using, offering to sell, or selling the Accused Sperm Sorting Systems in this
Litigation or any future lawsuit,” and “TOG hereby withdraws its pending motion for leave
to add declaratory judgment counterclaims pertaining to the ‘562 Patent . . .” [Doc. 457
at ¶ 1 (footnote omitted)]. Trans Ova expressly maintained the instant Motion to Amend
pertaining to the ‘769 Patent and the ‘559 Patent. [Id. at ¶ 1 n.1].
The Parties proceeded with limited discovery and briefing on claim construction.
See, e.g., [Doc. 456; Doc. 466; Doc. 470]. Judge Martinez conducted a claim construction
hearing on December 14, 2021, see [Doc. 497], during which he ordered the Parties to
7

proceed with a mediation lasting at least three days. See [Doc. 498]. The case, and the
consideration of the pending motions and claim construction, were stayed during the
mediation process. [Id.]. As a result of the mediation, the Parties stipulated to the
dismissal of the ‘422 Patent. See [Doc. 506].
Finally, on June 6, 2022, the Parties filed a Unified Stipulation Regarding
Infringement. [Doc. 526]. In that Stipulation, the Parties identified the following claims
remain:
Count

Patent

Plaintiffs

Asserted
Claims

Stipulated
Infringement

I

‘590

II

‘116

XY &
Inguran
XY &
Inguran

VI

‘769

XY &
Inguran

1, 3–10, 23, 26, 27,
and 29-36
1–5, 8–12, 15–18,
20–22, 24, 26, 33–
34, and 38-41
1–4, 7–11, 14–16

XII

‘559

XY,
Inguran, &
Beckman
Coulter

All asserted claims up to
and including May 6, 2018
All asserted claims, except
cl. 38, up to and including
January 6, 2022 4
All asserted claims up to
and including May 22,
2022 5
All asserted claims up to
and including August 1,
2021

1, 3–4, 7–8, 12–16,
18–21

However, in the Final Invalidity Contentions filed by Trans Ova on June 3, 2022, it
identifies Count III, which asserts claim 11 of the ‘822 Patent, as still at issue. [Doc. 527-

Specifically, Trans Ova asserts that the below-identified sorting facilities ceased
infringing any Asserted Claim of the ‘116 Patent as follows: Maryland sorting facility:
November 3, 2021 (all sorters); Texas sorting facility: November 22, 2021 (all sorters);
Iowa sorting facility: September 19, 2021 (two of the four sorters), and December 5, 2021
(the two remaining sorters); Wisconsin sorting facility: December 20, 2021 (all sorters);
and California sorting facility: January 6, 2022 (all sorters). [Doc. 526 at ¶ 4(b)].

4

5

The ‘769 Patent expired on May 22, 2022. [Doc. 526 at ¶ 4(c)].
8

1 at 1; 528-2]. In reviewing the voluminous docket, this court finds no dismissal of Count
III between the filing of the Joint Status Report on May 11, 2021 and the Final Invalidity
Contentions on June 3, 2022. Accordingly, it is unclear whether XY and Inguran continue
to assert Count III, but Trans Ova has withdrawn its stipulation of infringement, compare
[Doc. 526] with [Doc. 88; Doc. 292], or that XY and Inguran are no longer asserting the
‘822 Patent. Nevertheless, because the pending Motions do not involve the ‘822 Patent,
this court need not resolve this ambiguity in this Recommendation.
Against this backdrop, the court turns to the two Motions pending before it.
ANALYSIS
I.

Renewed Motion to Dismiss Count VI
Originally, Judge Martinez dismissed Count VI on claim preclusion grounds,

reasoning that “[a]s for the 769 Patent, which issued after the 2012 Lawsuit started, the
Court agrees under the circumstances that XY had a duty to move to amend (as it had
already moved to amend to add an after-acquired claim) given that it would be accusing
the same Trans Ova products and processes, and that the 769 Patent was a continuation
of a patent already in suit.” [Doc. 120 at 14]. On appeal, the Federal Circuit observed
that “the parties’ only dispute concerns whether the district court properly concluded that
XY’s 2012 and 2016 lawsuits present the same cause of action”, and found that its
decision in SimpleAir, Inc. v. Google LLC, 884 F.3d 1160, 1165 (Fed. Cir. 2018) should
control. XY, LLC v. Trans Ova Genetics, LC, 968 F.3d 1323, 1334 (Fed. Cir. 2020).
Because the district court had “erred in its claim-preclusion analysis by failing to compare
the scope of the patent claims asserted in the 2012 lawsuit with the scope of the patent
9

claims asserted in the 2016 lawsuit,” the Federal Circuit vacated the dismissal of the ‘769
Patent, and remanded to the district court to conduct a claim preclusion analysis
consistent with SimpleAir. Id. at 1335.
A.

Legal Standard

SimpleAir had initiated a series of patent infringement actions against Google’s
Cloud Messaging and Cloud to Device Messaging Services; each case involved one or
more patents from a family of patents owned by SimpleAir. SimpleAir, 884 F.3d at 1163.
In the fourth action, SimpleAir asserted claims for infringement of two patents that were
linked with a parent patent that had been subject to, but dismissed out of, a prior suit. Id.
The district court dismissed the action on claim preclusion grounds, reasoning that the
patents-in-suit were essentially the same as previously adjudicated patents because they
derived from the same parent application – and thus shared a common specification –
and were terminally disclaimed to the parent. Id. at 1164. The district court did not
compare the claims of the two patents to the previously adjudicated patents. See id.
SimpleAir argued two theories on appeal.

First, it argued that because the

particular patents-in-suit had not been previously adjudicated, no claim preclusion could
apply. SimpleAir, 884 F.3d at 1164. Second, it argued that even if claim preclusion could
apply across different patents derived from the same family, it did not apply in its particular
circumstance because Google had failed to establish that the causes of action were
“essentially the same[.]” Id. The Federal Circuit determined that claim preclusion was
not foreclosed simply because the patents-in-suit had not been adjudicated in a prior suit.
Id.

However, the common specification and terminal disclaimer were insufficient to
10

sustain the district court’s holding of claim preclusion. Id. at 1166. Instead, the Federal
Circuit adopted a standard that “where different patents are asserted in a first and second
suit, a judgment in the first suit will trigger claim preclusion only if the scope of the asserted
patent claims in the two suits is essentially the same. . . . [C]laims which are patentably
indistinct are essentially the same.” Id. at 1167.
B.

Application

The Parties correctly acknowledge that the Federal Circuit instructed the district
court on remand to compare the scope of the asserted claims to those asserted in the
prior litigation in the first instance. See [Doc. 439 at 7; Doc. 445 at 7–8]. 6 Trans Ova, as
the party asserting claim preclusion, bears the burden of proof. See Johnson v. Spencer,
950 F.3d 680, 712 (10th Cir. 2020).
First, this court notes that when determining whether causes of action are the
same, it defines “a cause of action by the transactional facts from which it arises.” In re
PersonalWeb Techs. LLC, 961 F.3d 1365, 1375 (Fed. Cir. 2020), cert. denied sub nom.
PersonalWeb Techs., LLC v. Patreon, Inc., 142 S. Ct. 2707 (2022). Claim preclusion
does not apply unless the products or processes are essentially the same. See id. Here,
there is no dispute that the accused products and processes between the 2012 Lawsuit
and this action are, for the purposes of the claim preclusion analysis, essentially the same.
Indeed, Trans Ova’s non-infringement arguments do not suggest otherwise, as they go

To the extent that XY and Inguran suggest that the decision and mandate of the Federal
Circuit necessarily determined that the Asserted Claims of the ‘769 Patent are broader
than the previously adjudicated patents from XY I, or there would be no need for remand,
this court respectfully disagrees.
6

11

to whether the Asserted Claims are patentably indistinct and not whether there is a
material difference in the accused products, and Trans Ova’s non-infringement
arguments do not involve the steps in dispute.
Next, this court addresses the correct framework for comparison of the Asserted
Claims. In its Renewed Motion to Dismiss, Defendant compares independent claim 1 of
the ‘769 Patent with claims 1, 10, 11, and 15 of the ‘687 Patent and claims 1, 8, 9, and
19 of the ‘921 Patent. [Doc. 439 at 7–8]. XY and Inguran contend that in the 2012
Lawsuit, XY asserted claims 1, 2, 6–9, 12, and 13 of the ‘687 Patent and claims 1, 2, 5,
18, and 20 of the ‘921 Patent.

[Doc. 445 at 9 n.3 (citing Doc. 445-3 at 2)]. On Reply,

Defendant does not dispute XY’s and Inguran’s contention. See [Doc. 449]. Thus, this
court will compare independent claim 1 of the ‘769 Patent to the broadest of the claims of
the ‘687 and ‘921 Patents previously asserted -- independent claim 1 of the ‘687 Patent
and independent claim 1 of the ‘921 Patent. 7
Independent claim 1 of the ‘769 Patent discloses:
A method of producing a frozen-thawed sorted artificial insemination
sample comprising:
thawing frozen sperm cells;
staining said thawed sperm cells with a concentration of a Hoechst 33342
greater than 40 micromolar;
establishing the staining temperature between about 30 C and about 40 C;
determining a sex characteristic of said sperm cells;
Claim 20 of the ‘921 Patent is also an independent claim, but has additional limitations
than Claim 1 of the ‘921 Patent. In addition, “[b]y definition, an independent claim is
broader than a claim that depends from it[.]” Littelfuse, Inc. v. Mersen USA EP Corp., 29
F.4th 1376, 1380 (Fed. Cir. 2022).
7

12

separating said sperm cells according to the determination of their sex
characteristic;
isolating sperm cells separated according to the determination of their sex
characteristic in a collection element at a rate of greater than 1000 sperm
per second for either X-chromosome bearing sperm or Y-chromosome
bearing sperm;
establishing a frozen-thawed sorted artificial insemination sample from said
sperm cells isolated in said collection element; and
fertilizing an egg with said frozen-thawed sorted artificial insemination
sample at success levels of at least about 70% of the success levels with
sperm cells that have not been separated and/or frozen.
[Doc. 439-2 at 40, col. 30 ll. 19–40].
Independent claim of the ‘687 Patent discloses:
A method of using stained sperm cells collected from mammals, comprising
the steps of:
collecting semen from a male of a non-human mammal;
freezing said semen;
thawing said semen;
incubating sperm cells contained within said semen in a concentration of a
Hoechst 33342 greater than 40 micro-molar;
establishing the temperature at which said sperm cells in said concentration
of Hoechst 33342 stain are incubated between about 30 degrees centigrade
and about 40 degrees centigrade;
adjusting a duration of time said sperm cells are incubated with said
concentration of Hoechst 33342 stain;
staining DNA within said sperm cells with sufficient uniformity to allow Xchromosome bearing sperm cells to be differentiated from Y-chromosome
bearing sperm cells based upon the magnitude of fluorescence;

13

determining the sex characteristic of a plurality of sperm cells contained
within said frozen-thawed semen;
separating said sperm cells according to the determination of their sex
characteristic;
isolating sperm cells separated according to the determination of their sex
in a collected element;
establishing a sample from said sperm cells isolated in said collection
element;
successfully fertilizing at least one egg of a female non-human mammal
with said sample at success levels of at least about 70% of success with
spermatozoa that have not been separated and/or frozen; and
successfully producing offspring non-human mammal of the desired sex.
[Doc. 439-3 at 41, col. 30, ll. 9–42].
Independent claim 1 of the ‘921 Patent discloses:
A process for preparing sperm cell samples, the process comprising:
collecting semen from a male mammal; freezing said semen to form frozen
semen;
thawing said frozen semen to form frozen-thawed semen; incubating sperm
cells contained within said frozen thawed semen in a concentration of
Hoechst 33342 stain of greater than 40 micro-molar,
establishing the temperature at which said sperm cells are incubated
between about 30 degrees centigrade and about 40 degrees centigrade;
adjusting a duration of time said sperm cells are incubated in said
concentration of Hoechst 33342 stain;
staining said sperm cells with Sufficient uniformity to allow X-chromosome
bearing sperm cells to be differentiated from Y-chromosome bearing sperm
cells based upon the magnitude of fluorescence;
determining the sex characteristic of a plurality of sperm cells contained
within said frozen-thawed semen; separating said sperm cells according to
the determination of their sex characteristic;
14

isolating sperm cells separated according to the determination of their sex
in a collection element;
establishing a sample from said sperm cells isolated in said collection
element; wherein fertilizing at least one egg of a female mammal with said
sample at success levels of at least about 70% of Success with
spermatozoa that have not been separated and/or frozen is achieved.
[Doc. 493-4 at 40, col. 29 ll. 33–62].
The Parties concede that patent claims do not need to include identical steps to
be “essentially the same.” See Puget Bioventures, LLC v. Biomet Orthopedics LLC, No.
3:17-cv-502 JD, 2018 WL 2933733, at *3 (N.D. Ind. June 11, 2018). Instead, the Parties’
dispute over whether the scope of these claims are “essentially the same” focuses upon
the steps of “collecting” and “freezing” the sperm cells prior to thawing them. 8 See [Doc.
439 at 9; Doc. 445 at 6]. Trans Ova insists that these two steps are “meaningless”
because the asserted claims of the ‘769 Patent expressly recite “thawing frozen sperm
cells[,]” and “[p]lainly, before frozen sperm cells can be thawed, they must first be
collected and frozen.” [Doc. 439 at 9]. Trans Ova points to the prosecution history of the
‘769 Patent to support its conclusion: (1) the Examiner allowed the claims because the
prior art failed to teach fertilizing an egg with frozen-thawed sperm at success levels at
least about 70% of sperm that had not been separated and/or frozen; and (2) XY
overcame the Patent Examiner’s rejection of the ‘769 Patent for double patenting over
the ‘687 and ‘921 Patents by the filing of a terminal disclaimer. [Id. at 10–11]. While
While some courts have declined to determine claim preclusion prior to claim
construction, see, e.g., Oyster Optics, LLC v. Cisco Sys., Inc., No. 2:20-cv-00211-JRG,
2021 WL 1530935, at *4 (E.D. Tex. Apr. 16, 2021), the Parties have represented to the
court, and this court agrees, that the ruling on the instant Renewed Motion to Dismiss is
not dependent upon claim construction.
8

15

acknowledging that the terminal disclaimer was not dispositive as to claim preclusion,
Trans Ova points to the Federal Circuit’s language in SimpleAir that observes that
terminal disclaimers are a “strong clue” of patentable indistinctness. [Id. at 11].
XY and Inguran disagree, in part pointing to Trans Ova’s own non-infringement
theories in the 2012 Lawsuit. See [Doc. 445 at 10]. Specifically, XY and Inguran contend
that Trans Ova’s argument that it did not infringe the Asserted Patents in the 2012 Lawsuit
because it did not, itself, conduct the “collecting” and “freezing” steps is a tacit admission
that these steps are not “meaningless” and the scope of Asserted Claims of the ‘769
Patent is not essentially the same as the scope of the asserted claims in either the ‘687
or ‘921 Patents. [Id.]. XY and Inguran further argue that to find otherwise would allow
Trans Ova to avoid infringement under the ‘769, ‘687, or ‘921 Patents by simply avoiding
any direct involvement or control over the collecting and freezing of sperm. See [id. at
12]. XY and Inguran urge the court to conclude that the Asserted Claims of the ‘769
Patent are broader than those of the ‘687 and ‘921 Patents, and thus, not subject to claim
preclusion. [Id.].
This court begins by considering the shared specification of the ‘769, ‘687, and
‘921 Patents and the prosecution history of the ‘769 Patent. The Patent Examiner for the
‘769 Patent acknowledged that they were not identical. See [Doc. 439-6 at 10]. Instead,
the Patent Examiner rejected claim 90 of Application No. 12/853,196 (which ultimately
matured into claim 1 of the ‘769 Patent) over claims 1, 8, and 13 of the ‘687 Patent based
on non-statutory obviousness-type double patenting, because the conflicting claims were
not patentability distinct, as:
16

both inventions are drawn to similar method comprising the steps of;
collecting/obtaining frozen semen from a male mammal; thawing the
semen, staining the semen with Hoechst 33342 at the same concentrations,
temperature range and times; determining the sex characteristic of a
plurality of sperm cells in the semen (at least about 85% bearing X or Y);
separating the sperm cells according to the determination of their sex
characteristic; isolating sperm cells according to their sex characteristic in a
collection element; establishing a sample from said isolated sperm cells; . . .
successfully fertilizing at least one egg at success levels of at least about
70% of success with spermatozoa that have not been separated and/or
frozen; and successfully producing offspring of non-human mammal of the
desired sex.
[Doc. 439-6 at 9–10]. The Patent Examiner reached a similar conclusion as to claims
89–97 of the ‘196 Application compared to claims 1, 2, 5, and 15–17 of the ‘921 Patent.
[Id.]. The Examiner further explained when comparing claims 89–97 of the ‘196 Patent
to the identified claims of the ‘687 and ‘921 Patents, that while not identical, the
differences were superficial and would have been obvious to one of ordinary skill in the
art at the time of the invention. [Id.]. In addition, this court notes the Patent Examiner
suggested that references, including Seidel et al., “teach a method wherein collected
bovine sperm was frozen, thawed, staining nuclear DNA” and “teach a method of
obtaining frozen sperm cells[.]”

[Id. at 14; Doc. 439-5 at 13].

Finally, this court

acknowledges that the existence of the terminal disclaimer in the context of a continuation
patent, while not dispositive, is a “strong clue” that claim 1 of the ‘769 Patent is not
patentably distinct from claim 1 of the ‘687 Patent and claim 1 of the ‘921 Patent. See
Indivior Inc. v. Dr. Reddy's Laboratories, S.A., 752 Fed. Appx. 1024, 1035 (Fed. Cir. 2018)
(“While not dispositive, the filing of a terminal disclaimer here is a ‘strong clue’ that the
claims of the ’305 patent are patentably indistinct from those of the ’514 patent.” (citing
SimpleAir, 884 F.3d at 1168)).
17

But obviousness is a mixed question of fact and law, and without expert testimony
regarding the steps of “collecting” and “freezing,” and whether or not such steps are
inherent in “thawing,” or otherwise immaterial to patentability distinction, this court is
hesitant to conclude, at this juncture, that such steps are “meaningless” as a matter of
law. See, e.g., Stragent, LLC v. BMW of N. Am., LLC, No. CV 20-510-LPS, 2021 WL
1147468, at *6 (D. Del. Mar. 25, 2021) (holding that without the benefit of an expert
opinion, the court was not in a position to hold that the additional limitations “would not
materially impact the question of patentability”). The Patent Examiner does not discuss
the “collecting” and “freezing” steps as part of the Office Action, though in his own
amendments, he eliminated the step of “obtaining frozen sperm cells” without explanation.
See [Doc. 439-5 at 9, 12]. And as SimpleAir and its progeny recognize, there is no
prohibition on broadening claims in continuation patents subject to a terminal disclaimer.
See SimpleAir, 884 F.3d at 1167–68. Nevertheless, this court is not persuaded the mere
existence of additional steps of “collecting” and “freezing” necessarily mean that the
Asserted Claims are patentably distinct, particularly when “mere obvious variations of the
same invention” are not patentably distinct. Cf. Gilead Scis., Inc. v. Natco Pharma Ltd.,
753 F.3d 1208, 1213 (Fed. Cir. 2014). 9
Thus, this court cannot conclude that Trans Ova has carried its burden at this
juncture (nor can it conclude as a matter of law that the inventions are patentably distinct),
This court notes that Trans Ova has withdrawn certain arguments with respect to
invalidity of the ‘769 Patent based on anticipation and obviousness. See [Doc. 527; Doc.
528]. This Recommendation should not be interpreted as an invitation to re-introduce
those invalidity arguments, even if Trans Ova does not agree that it is estopped from
asserting that the Lu Paper is prior art.

9

18

based on the record before it and, in turn, respectfully recommends that the instant Motion
to Dismiss be DENIED without prejudice, to be renewed if appropriate in limine or at
trial.
II.

Motion to Amend Answer
In its Motion to Amend Answer, Trans Ova seeks leave to file a Second Amended

Answer and Counterclaims to assert a counterclaim of inequitable conduct against XY
and Inguran as to the ‘769 Patent and a counterclaim against all Plaintiffs of invalidity
based on inequitable conduct as to the ‘559 Patent. [Doc. 446 at 1]. Because the
deadline for amendment of pleadings had long passed by the time Trans Ova sought to
amend its Answer, this court applies a two-part test to determine whether leave should
be granted. First, the court considers whether the moving party demonstrates good cause
pursuant to Rule 16(b) of the Federal Rules of Civil Procedure. See Gorsuch, Ltd., B.C.
v. Wells Fargo Nat’l Bank Assoc., 771 F.3d 1230, 1242 (10th Cir. 2014); SIL-FLO, Inc. v.
SFHC, Inc., 917 F.2d 1507, 1518 (10th Cir. 1990). Next, the court weighs whether the
amendment should be allowed pursuant to Rule 15(a). Gorsuch, 771 F.3d at 1242. Trans
Ova contends that it satisfies both prongs required to amend its Answer to include
affirmative defenses of inequitable conduct with respect to the ‘769 and the ‘559 Patent.
See [Doc. 446].
Good Cause. Rule 16(b) provides that a scheduling order “may be modified only
for good cause and with the judge’s consent.” Fed. R. Civ. P. 16(b)(4). “In practice, this
standard requires the movant to show the ‘scheduling deadlines cannot be met despite
[the movant’s] diligent efforts.’” Gorsuch, 771 F.3d at 1240 (citing Pumpco, Inc. v.
19

Schenker Int’l, Inc., 204 F.R.D. 667, 668 (D. Colo. 2001)). “Rule 16(b) does not focus on
the bad faith of the movant, or the prejudice to the opposing party. Rather, it focuses on
the diligence of the party seeking leave to modify the scheduling order to permit the
proposed amendment.” Colo. Visionary Acad. v. Medtronic, Inc., 194 F.R.D. 684, 687 (D.
Colo. 2000).
Leave to Amend. Rule 15(a) provides that leave to amend “shall be freely given
when justice so requires.” Fed. R. Civ. P. 15(a). Courts have described the standard
under Rule 15(a) as “more lenient” than that under Rule 16(b). See Pumpco, 204 F.R.D.
at 668. Refusing leave to amend is generally only justified upon a showing of undue
delay, undue prejudice to the opposing party, bad faith or dilatory motive, failure to cure
deficiencies by amendments previously allowed, or futility of amendment. See id.; Frank
v. U.S. West, Inc., 3 F.3d 1357, 1365 (10th Cir. 1993). Whether to allow amendment is
within the trial court’s discretion. Burks v. Oklahoma Publ'g Co., 81 F.3d 975, 978–79
(10th Cir. 1996).
A.

‘769 Patent

With respect to the ‘769 Patent, Trans Ova argues that it was diligent in asserting
its affirmative defense of inequitable conduct based on evidence gathered during a
parallel inter partes review (“IPR”) proceeding that took place after the dismissal of the
‘769 Patent. See [Doc. 446 at 3–7]. Specifically, Defendant contends that certain facts
came to light during the IPR (which ranged from June 2018 to June 2019) that were not
otherwise known to it, and that once the stay was lifted on April 22, 2021, see [Doc. 429],
it acted promptly by filing the motion by the June 11 deadline set by the court. [Doc. 446
20

at 3–7]. Courts have found that the burden to establish diligence is satisfied, for example,
when a party learns of new information in a deposition or that the governing law has
changed. See Gorsuch, 771 F.3d at 1240. Based on the record before it, this court finds
that Trans Ova has demonstrated sufficient diligence under Rule 16(b)(4).
Next, Trans Ova asserts that amendment is appropriate under Rule 15(a) because
there has been no undue delay or bad faith by it; Plaintiffs will not be prejudiced by it; and
the proposed amendment is not futile. See [Doc. 446 at 13–15]. In response, XY and
Inguran assert, and argue in detail, that the proposed amendment is futile and that it will
be prejudiced. See [Doc. 458 at 7–12]. Given the detail of and complexity of the
arguments, this court respectfully RECOMMENDS that, rather than forcing these
arguments into the context of this instant Motion to Amend Answer, the court exercise its
discretion and decline to engage in the various aspects of the futility analysis at this
juncture, and GRANT the Motion to Amend Answer as to the ‘769 Patent, reserving issues
of the viability of such affirmative defense.
B.

‘559 Patent

With respect to the ‘559 Patent, Defendant contends that it first learned of possible
inequitable conduct during the Rule 30(b)(6) depositions of XY’s in-house counsel, Ryan
Christensen, on April 18–19, 2018. [Doc. 446 at 7–8]. Then, on April 24–25, 2018, and
May 15 and 17, 2018, other witnesses corroborated Mr. Christensen’s testimony. [Id. at
9]. No later than May 22, 2018, Trans Ova informed Plaintiffs’ counsel that it was
contemplating an inequitable conduct defense but wished to complete some depositions
prior to seeking amendment. [Id. at 10]. Those depositions were completed no later than
21

June 21, 2018. See [id.]. Then, on August 3, 2018, Trans Ova filed a motion to amend
its Answer to include a counterclaim for inequitable conduct that was subsequently
mooted when the court granted judgment on the pleadings as to the ‘559 Patent. See
[Doc. 259; Doc. 262].
XY and Inguran oppose, setting forth a very different account, describing Trans
Ova’s decision to “backload its discovery efforts and drag its feet on formulating and
formalizing its defenses.” [Doc. 458 at 6–7]. Namely, they point to the fact that discovery
opened in this action in March 2017, and Trans Ova did not request its first deposition
until February 2018. See [id.]. XY and Inguran contend that Trans Ova’s “inexcusable
delay” in seeking discovery has deprived them of the opportunity to defend against the
charge of inequitable conduct. [Id. at 4].
While this court respectfully agrees that the delay in initiating discovery may, in
some instances, preclude the finding of good cause, this court is not persuaded that Trans
Ova did not act in a sufficiently diligent manner based on the circumstances before the
court. This court notes that in late 2017–early 2018, the Parties were engaged in multiple
telephonic discovery dispute conferences before this Magistrate Judge. See, e.g., [Doc.
58; Doc. 60; Doc. 77; Doc. 79]. Document production was ongoing, and issues with
respect to privilege had been raised. See [Doc. 104]. Furthermore, Plaintiffs sought to
further amend their operative pleading. See [Doc. 137]. Given the general tenor of
discovery at that juncture and that the affirmative defense of inequitable conduct is subject
to the heightened pleading standard of Rule 9(b), this court finds good cause under Rule
16(b)(4).
22

Having found good cause under Rule 16(b)(4), this court also finds that
amendment is appropriate under Rule 15. While XY and Inguran argue that they have
been deprived the opportunity to defend against the charge of inequitable conduct, this
court notes that (and XY and Inguran have recognized), as with all affirmative defenses,
the burden to establish inequitable conduct by clear and convincing evidence rests with
Trans Ova. See, e.g., [Doc. 458 at 11 n.5]. In addition, if there is any asymmetry of
information regarding the conduct associated with the prosecution of the ‘559 Patent,
such asymmetry favors Plaintiffs – not Defendants. Finally, based on the course of
litigation in this and the 2012 Lawsuit, this court cannot conclude that Plaintiffs could have
been reasonably surprised that inequitable conduct was raised as an invalidity theory with
respect to the ‘559 Patent. See, e.g., [Doc. 80]. Accordingly, this court respectfully
RECOMMENDS that Trans Ova’s Motion to Amend Answer be GRANTED.

In so

recommending, this court does not pass on the substantive issues of viability of these
additional defenses.
CONCLUSION
Accordingly, for the foregoing reasons, this court respectfully RECOMMENDS
that:
(1)

Defendant Trans Ova Genetics, LC’s Renewed Motion to Dismiss Count VI
of Plaintiffs’ Operative Complaint Pursuant to Fed. R. Civ. Proc. 12(b)(6)
[Doc. 439] be DENIED without prejudice;

23

(2)

Trans Ova’s Motion for Leave to File a Second Amended Answer and
Counterclaims to Plaintiffs’ Fourth Amended Complaint [Doc. 446] be
GRANTED. 10

DATED: July 13, 2022

BY THE COURT:

Nina Y. Wang
United States Magistrate Judge

Within fourteen days after service of a copy of the Recommendation, any party may
serve and file written objections to the Magistrate Judge’s proposed findings and
recommendations with the Clerk of the United States District Court for the District of
Colorado. 28 U.S.C. § 636(b)(1); Fed. R. Civ. P. 72(b); In re Griego, 64 F.3d 580, 583
(10th Cir. 1995). A general objection that does not put the District Court on notice of the
basis for the objection will not preserve the objection for de novo review. “[A] party’s
objections to the magistrate judge’s report and recommendation must be both timely and
specific to preserve an issue for de novo review by the district court or for appellate
review.” United States v. One Parcel of Real Property Known As 2121 East 30th Street,
Tulsa, Oklahoma, 73 F.3d 1057, 1060 (10th Cir. 1996). Failure to make timely objections
may bar de novo review by the District Judge of the Magistrate Judge’s proposed findings
and recommendations and will result in a waiver of the right to appeal from a judgment of
the district court based on the proposed findings and recommendations of the magistrate
judge. See Vega v. Suthers, 195 F.3d 573, 579-80 (10th Cir. 1999) (District Court’s
decision to review a Magistrate Judge’s recommendation de novo despite the lack of an
objection does not preclude application of the “firm waiver rule”); International Surplus
Lines Insurance Co. v. Wyoming Coal Refining Systems, Inc., 52 F.3d 901, 904 (10th Cir.
1995) (by failing to object to certain portions of the Magistrate Judge’s order, crossclaimant had waived its right to appeal those portions of the ruling); Ayala v. United States,
980 F.2d 1342, 1352 (10th Cir. 1992) (by their failure to file objections, plaintiffs waived
their right to appeal the Magistrate Judge’s ruling). But see Morales-Fernandez v. INS,
418 F.3d 1116, 1122 (10th Cir. 2005) (firm waiver rule does not apply when the interests
of justice require review).
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