Cornell University et al v. Illumina Inc.
Filing
451
REPORT AND RECOMMENDATIONS re 405 MOTION for Leave to File an Amended Answer and Counterclaims filed by Illumina Inc.. Please note that when filing Objections pursuant to Federal Rule of Civil Procedure 72(b)(2), briefing consists solely of the Objections (no longer than ten (10) pages) and the Response to the Objections (no longer than ten (10) pages). No further briefing shall be permitted with respect to objections without leave of the Court. Objections to R&R due by 6/13/2016. Signed by Judge Mary Pat Thynge on 5/27/16. (kjk)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF DELAWARE
CORNELL UNIVERSITY, CORNELL
RESEARCH FOUNDATION, INC., LIFE
TECHNOLOGIES CORPORATION, and
APPLIED BIOSYSTEMS, LLC,
Plaintiffs,
C. A. No. 10-433-LPS-MPT
v.
ILLUMINA, INC.,
Defendant.
REPORT AND RECOMMENDATION
I.
INTRODUCTION
On May 24, 2010, Cornell University, Cornell Research Foundation, Inc.
(collectively, "Cornell"), Life Technologies Corporation ("Life Technologies"), and
Applied Biosystems, LLC ("Applied Biosystems") (collectively, "plaintiffs") brought this
action against lllumina, Inc. ("lllumina" or "defendant"), alleging infringement of several
patents in two patent families: the LDR/PCR Patent family and the Array Patent family. 1
Currently before the court is defendant's motion for leave to amend, pursuant to
Federal Rules of Civil Procedure 15(a) and 16(b) and Local Rule 15.1 , its Answer and
Counterclaims to Plaintiffs' Third Amended Complaint to allege inequitable conduct
before the United States Patent and Trademark Office ("PTO") with respect to the
1
D.I. 1. Plaintiffs filed a First Amended Complaint on August 19, 2011 (D.I. 63),
a Second Amended Complaint on April 28, 2015 (D.I. 274), and a Third Amended
Complaint on August 7, 2015 (D.I. 298).
prosecution of the LDR/PCR Patent family. 2 The patents at issue from the LDR/PCR
Patent family are: U.S. Patent Nos. 6, 797,470 ("the '470 patent"), 7, 166,434 ("the '434
patent"), 7,312,039 ("the '039 patent"), 7,320,865 ("the '865 patent"), 7,332,285 ("the
'285 patent"), 7,364,858 ("the '858 patent"), 7,429,453 ("the '453 patent"), and
8,597,891 ("the '891 patent"). The '470 patent issued from U.S. Patent Application No.
09/918, 156 ("the '156 Application"). The '434, '039, '865, '285, '858, '453, and '891
patents are continuations of the '470 patent.
Defendant alleges discovery revealed that the applicants and prosecuting
attorney of the LDR/PCR patents violated their duty of candor to the PTO by filing a
false or misleading 37 C.F.R. § 1.131 declaration ("the§ 1.131 Declaration") in
prosecuting the '156 Application. 3
According to defendant, in the § 1.131 Declaration, the applicants knowingly
made false or misleading statements regarding the date of their reduction to practice of
the claimed LDR/PCR methods in order to swear behind three references-WO
96/15281 ("Carrino"), WO 95/35390 ("Zhang390"), and U.S. Patent No. 5,876,924
("Zhang924")-upon which the PTO examiner had rejected the claims of the '156
application. 4 Defendant maintains deposition testimony of the applicants and
2
D.I. 405.
D. I. 406 at 1.
4
Id. Carrino is an international application published on May 23, 1996 under the
Patent Cooperation Treaty that claims priority to the November 16, 1994 filing of U.S.
Patent Application No. 08/344,203. Id., Ex. A (Proposed Amended Answer and
Counterclaims to Plaintiffs' Third Amended Complaint) at~ 18(c). Zhang390 is an
international application published on December 28, 1995 under the Patent
Cooperation Treaty that claims priority to the June 22, 1994 filing of U.S. Patent
Application No. 08/263,937. Id., Ex. A at~ 19(a). Zhang924 was filed July 31, 1996
and claims priority to the June 22, 1994 filing of U.S. Patent Application No.
3
2
prosecuting attorney confirm that the§ 1.131 Declaration misrepresented the date of
the applicants' reduction to practice and absent the declaration's purportedly false or
misleading statement, the LDR/PCR patents would not have issued. 5
II.
FACTS
The '156 Application was filed on July 30, 2001 by patent attorney Michael L.
Goldman on behalf of applicants Francis Barany, Matthew Lubin, and Phillip Belgrader. 6
Successive Requests For Correction Of lnventorship removed Phillip Belgrader as an
applicant and added George Barany and Robert Hammer as applicants. 7 The '156
Application issued as the '470 patent on September 28, 2004. 8 The '434, '039, '865,
'285, 858, '453, and '891 patents issued as continuations of, and claim priority to, the
'156 Application and the '470 patent. 9
The '4 70 patent "relates to the detection of nucleic acid sequence differences
using couple ligase detection reaction ('LOR') and polymerase chain reaction ('PCR')." 10
Claim 1 of the '470 patent, claims "[a] method for identifying one or more different target
nucleotide sequences comprising," among other things, "one or more oligonucleotide
probe sets," one or more ligase detection reaction [LOR] cycles," "one or a plurality of
oligonucleotide primer sets," one or more polymerase chain reaction [PCR] cycles," and
"detecting the extension products to identify one or more target nucleotide sequences in
08/263,937. Id., Ex. A at ,-r 19(b).
5
Id. at 1.
6
Id., Ex. A at ,-r 17.
7
Id., Ex. A at ,-r,-r 17(c), 17(e ).
8
Id., Ex. A at ,-r 21(i).
9
Id., Ex. A at ,-r 22.
10
Id., Ex. A at,-r 17(a); '470 patent, 1:18-20.
3
the sample." 11 The '434, '039, '865, '285, 858, '453, and '891 patents claim similar or
related LDR/PCR methods. 12
Michael Goldman prosecuted the '156 Application on behalf of applicants
Francis Barany, Matthew Lubin, George Barany, and Robert Hammer. 13 The PTO
issued an initial Notice of Allowance of the '156 Application on April, 21, 2003. 14 On
August 8, 2003, Michael Goldman entered a Request For Continued Examination and a
37 C.F.R. §§ 1.97-1.98 Information Disclosure Statement on behalf of applicants
Francis Barany, Matthew Lubin, George Barany, and Robert Hammer. 15 The
Information Disclosure Statement included the Carrino, Zhang390, and Zhang924
references. 16
On September 11, 2003, the PTO rejected the claims in the '156 Application
pursuant to 35 U.S.C. §§ 102(a), 102(e), and 103(a) as anticipated by, or obvious in
light of, Carrino, Zhang390, and Zhang924. 17 Among other things, the PTO found that
particular pages and figures in Carrino, Zhang390, and Zhang924 anticipated
independent claim 1 as well as dependent claims 3 and 4 because the references
"clearly disclose[ ] the claimed method" of "carrying out a ligation detection reaction
using probes containing primer binding sites at the appropriate ends, and then carrying
out a polymerase chain reaction on the ligated products using primers targeting said
11
'470 patent, claim 1.
D.I. 406, Ex. A at~ 22.
13
1d., Ex.Aat~~17, 17(e), 18, 18(a),20.
14
Id., Ex. A at~ 17(f); id., Ex. D ('470 Patent File History) at C001094-96.
15
Id., Ex. A at W 18, 18(a); id., Ex. D at C001099-1146.
16
Id., Ex. A at W 18(b), 18(c); id., Ex. D at C001099-1141; D.I. 429 at 1.
17
D.I. 406, Ex. A at~~ 19-19(c); id., Ex. D at C001147-54.
12
4
primer binding sites." 18
On November 14, 2003, Michael Goldman filed an "Amendment" to overcome
the PTO's rejection of the '156 Application by traversing Carrino, Zhang390, and
Zhang924 based on a 37 C.F.R. § 1.131 declaration signed by each of the applicants:
Francis Barany, Matthew Lubin, George Barany, and Robert Hammer. 19
The Manual of Patent Examining Procedure ("MPEP") is published by the PTO
for use by patent attorneys, agents, and examiners. 20 The MPEP details the laws and
regulations followed during patent examination, and is based on Chapter 37 of the
Code of Federal Regulations. 21 Chapter 715 of the 2003 version of the MPEP sets forth
the guidelines for swearing behind a reference under 37 C.F.R. § 1.131. 22 Pursuant to
Section 715.07 an applicant may swear behind a reference through a § 1.131
declaration establishing either the applicant's (1) reduction to practice prior to the
effective date of the reference, or (2) conception prior to the effective date of the
reference coupled with due diligence from prior to the reference date to either actual or
constructive reduction to practice. 23 Therefore, to swear behind a reference under the
first method, the MPEP does not require a showing of diligence; but to swear behind a
reference under the second method, the MPEP states that "the actual dates of acts
relied on to establish diligence must be provided." 24
18
Id.,
Id.,
20
Id.,
21
Id.,
22
Id.,
23
Id.,
24
Id.,
19
Ex.
Ex.
Ex.
Ex.
Ex.
Ex.
Ex.
A at ,-r 19(c); id., Ex. D at C001149-50.
A at ,-r 20; id., Ex. D at C001257-75.
A at ,-r 21.
A at ,-r 21.
A at ,-r 21 (b).
A at ,-r 21 (b).
A at ,-r,-r 21 (c), 21 (d).
5
In preparing the Amendment, Michael Barany conferred, at least, with applicant
Francis Barany. 25 Neither the Amendment nor the declaration attempted to distinguish
the '156 Application from Carrino, Zhang390, and Zhang924. 26 The§ 1.131 Declaration
submitted by the applicants included no "actual dates of acts relied on to establish
diligence." 27 Rather, the declaration stated: "[p]rior to June 22, 1994, we conceived
and diligently reduced to practice, in the United States, the invention claimed in the
above-identified patent application." 28 As a consequence, the Amendment asserted
that Carrino, Zhang390, and Zhang924 "cannot be prior art." 29 Following the
submission of the § 1.131 Declaration, the PTO withdrew the rejections based on
Carrino, Zhang390, and Zhang924. 30
-
i
I
Francis Barany and Matthew Lubin were the applicants principally responsible for:
I
I
developing the claimed LDR/PCR method. 31 At deposition, Francis Barany and
Matthew Lubin testified that the claimed LDR/PCR method had not been reduced to
practice "[p]rior to J.une 22, 1994" and that laboratory work relating to the claimed
25
Id., Ex. A at CU 20(a).
Id., Ex. A at~ 20(b); id., Ex. D at C001257-75.
27
Id., Ex. A at CU 21 (f); id., Ex. D at C001261-68.
28
Id., Ex. A at
20(c), 21 (e); id., Ex. D at C001261 (emphasis added). The
§ 1.131 Declaration also stated that "[e]vidence of this conception prior to June 22,
!
1994, is provided in attached Exhibit 1" and that "[w]e hereby declare that all statements '
made herein of our own knowledge are true; and further that these statements were
made with the knowledge that willful false statements and the like so made are
punishable by fine or imprisonment, or both, under Section 1001 of Title 18 of the
United States Code and that any such willful false statements may jeopardize the
validity of the application or any patent issued thereon." Id., Ex. D at C001261-62.
29
Id., Ex. A at~ 20(d); id., Ex. D at C001259.
30
Id., Ex. A at~ 21(g); id., Ex. D at C001276-84.
31
Id., Ex. A at~ 20(e); id., Ex. M (Deposition of Matthew Lubin) at 39:19-40:3;
id., Ex. N (Deposition of Francis Barany) at 137:6-23.
26
,.m
6
LDR/PCR methods did not begin until July 11, 1994. 32 Michael Goldman testified that
at the time he filed the Amendment and § 1.131 Declaration, he knew that the claimed
LDR/PCR methods had not been reduced to practice "[p]rior to June 22, 1994."33
Ill.
LEGAL STANDARDS
"If a party moves for leave to amend the pleadings after a deadline imposed by a
Scheduling Order, Rule 16 of the Federal Rules of Civil Procedure is also implicated." 34
Under Rule 16, "[a] schedule may be modified only for good cause and with the judge's
consent." 35 "After a pleading deadline has passed, the Third Circuit requires a showing
of good cause in order to amend." 36 "Good cause" exists if the Schedule "cannot
reasonably be met despite the diligence of the party seeking the extension." 37 '"In
contrast to Rule 15(a), the good cause standard under Rule 16(b) hinges on diligence
of the movant, and not on prejudice to the non-moving party."' 38
Pursuant to Federal Rule of Civil Procedure 15(a)(2), "party may amend its
pleading only with the opposing party's written consent or the court's leave. The court
should freely give leave when justice so requires." 39 "The Third Circuit has adopted a
Id., Ex. A at ,-r 21 (e); id., Ex. A at ,-r 20(e); id., Ex. Mat 74:7-13, 206:9-207:4;
id., Ex.Nat 195:3-7, 524:14-17.
33
Id., Ex. A at§ 21(e); id., Ex. A at ,-r 20(f); id., Ex. L (Deposition of Michael
Goldman) at 108:18-25.
34
ICU Med., Inc. v. Rymed Techs., Inc., 674 F. Supp. 2d 574, 577 (D. Del.
2009).
35
FED. R. CIV. P. 16(b)(4).
36
ICU Med., 674 F. Supp. 2d at 577 (citing E. Minerals & Chems. Co. v. Mahan,
225 F.3d 330, 340 (3d Cir. 2000)).
37
FED. R. C1v. P. 16(b)(4) Advisory Committee's Notes (1983 Amendments).
38
ICU Med., 674 F. Supp. 2d at 577-78 (quoting Roquette Freres v. SP/ Pharma.
Inc., C.A. No. 06-540-GMS, 2009 WL 1444835, at *4 (D. Del. May 21, 2009)).
39
FED. R. CIV. P. 15(a)(2).
32
7
liberal policy favoring the amendment of pleadings to ensure that claims are decided on
the merits rather than on technicalities." 40 The United States Supreme Court has stated
that although:
the grant or denial of an opportunity to amend is within the discretion of
the District Court ... , [i]n the absence of any apparent or declared
reason-such as undue delay, bad faith or dilatory motive on the part of
the movant, ... undue prejudice to the opposing party by virtue of
allowance of the amendment, futility of the amendment, etc.-the leave
sought should, as the rules require, be "freely given." 41
Because defendant seeks leave to amend its affirmative defenses and
counterclaims to assert inequitable conduct and unenforceability of the LDR/PCR
patents, the heightened pleading standard of Federal Rule of Civil Procedure 9(b)
applies to its allegations. 42 Rule 9(b) requires that "[i]n alleging fraud or mistake, a party
must state with particularity the circumstances constituting fraud or mistake. Malice,
intent, knowledge, and other conditions of a person's mind may be alleged generally."43
"'[l]nequitable conduct, while a broader concept than fraud, must be pied with
40
Leader Techs., Inc. v. Facebook, Inc., C.A. No. 08-862-LPS, 2010 WL
2545959, at *3 (D. Del. June 24, 2010) (citing Dole v. Arco Chem. Co., 921 F.2d 484,
487 (3d Cir. 1990)). Whether to grant or deny "a motion to amend a pleading under
Rule 15(a) is a procedural matter governed by the law of the regional circuit." Exergen
Corp. v. Wal-Mart Stores, Inc., 575 F.3d 1312, 1318 (Fed. Cir. 2009) (citing Cent.
Admixture Pharmacy Servs., Inc. v. Advanced Cardiac Solutions, P.C., 482 F.3d 1347,
1357 (Fed. Cir. 2009)).
41
Farnan v. Davis, 371 U.S. 178, 182 (1962).
42
"Whether inequitable conduct has been pleaded with particularity under Rule
9(b) is a question governed by Federal Circuit law." Exergen Corp., 575 F.3d at 1318
(citing Cent. Admixture, 482 F.3d at 1356); see a/so id. at 1327 ("[W]e apply our own
law, not the law of the regional circuit, to the question of whether inequitable conduct
has been pleaded with particularity under Rule 9(b).").
43
FED. R. CIV. P. 9(b).
·
8
particularity"' under Rule 9(b). 44
[T]o plead the "circumstances" of inequitable conduct with the requisite
"particularity'' under Rule 9(b ), the pleading must identify the specific who,
what, when, where, and how of the material misrepresentation or
omission committed before the PTO. Moreover, although "knowledge"
and "intent" may be averred generally, a pleading of inequitable conduct
under Rule 9(b) must include sufficient allegations of underlying facts from
which a court may reasonably infer that a specific individual (1) knew of
the withheld material information or of the falsity of the material
misrepresentation, and (2) withheld or misrepresented this information
with a specific intent to deceive the PT0. 45
IV.
DISCUSSION
A.
Rule 16(b)
The deadline for the parties to move to amend the pleadings was August 7,
2015. 46 Fact discovery concluded on December 4, 2015, except for certain depositions,
including the deposition of plaintiffs' patent attorney, that could not be completed,
despite the parties' best efforts, prior to December 4, 2015. 47 Pursuant to Rule 16(b ),
defendant must demonstrate "good cause" to modify the Scheduling Order to permit its
proposed amendment. "The good cause element requires the movant to demonstrate
that, despite diligence, the proposed claims could not have been reasonably sought in a
timely manner." 48
Defendant maintains it has shown good cause to amend its Answer and
44
Exergen, 575 F.3d at 1326 (quoting Ferguson Beauregard/Logic Controls, Div.
of Dover Resources, Inc. v. Mega Sys., LLC, 350 F.3d 1327, 1344 (Fed. Cir. 2003)).
45
Id. at 1328-29.
46
D.I. 291.
47
D.I. 398.
48
Roquette Freres v. SP/ Pharma, Inc., C.A. No. 06-540-GMS, 2009 WL
144835, at *4 (D. Del. May 21, 2009) (citing Samick Music Corp. v. Delaware Music
Indus., Inc., C.A. No. 91-23-CMW, 1992 WL 39052, at *6-7 (D. Del. Feb. 12, 1992)).
9
Counterclaims to add an inequitable conduct affirmative defense and a counterclaim for
a declaratory judgement of unenforceability because it worked diligently to discover and
confirm the facts underlying its inequitable conduct claim through depositions,
principally of Francis Barany, Matthew Lubin, and Michael Goldman, that occurred after
the August 7, 2015 deadline to amend pleadings in this case.
The depositions of Matthew Lubin, Francis Barany, and Michael Goldman did not
occur until after the August 7, 2015 deadline for amending pleadings. 49 On May 11,
2015, defendant subpoenaed Francis Barany, Matthew Lubin, George Barany, and
Robert Hammer to appear for depositions and produce relevant documents. 50 Plaintiffs'
counsel represented the applicants and responded to the subpoenas on their behalf. 51
Defendant deposed Robert Hammer on July 17, 2015, George Barany on August 20,
2015, Matthew Lubin on September 8, 2015, and Francis Barany on September 20 and
21, 2015. It was through those depositions that defendant learned the applicants had
not reduced to practice the LDR/PCR method claimed in the '156 Application prior to
June 22, 1994 and that Michael Goldman had prepared the § 1.131 Declaration signed
by the applicants. 52 Defendant received the final transcripts of Matthew Lubin's and
Francis Barany's depositions on September 16, 2015 and October 2, 2015.
Between October 5 and 7, 2015, defendant served third-party subpoenas on
plaintiffs' prosecution counsel, Michael Goldman, and his law firm. 53 Following
49
50
51
52
53
D.I. 406 at 10.
Id.
Id.
Id.
Id. at 11.
10
responses and objections to the subpoenas, defendant sought a deposition date prior
to the December 4, 2015 close of fact discovery but scheduling conflicts prevented that
from occurring. 54 On December 7, 2015, the parties entered into a stipulation to extend
the time to take certain depositions, including that of Michael Goldman, that could not
be completed, "despite the parties' best efforts," prior to the December 4, 2015 close of
fact discovery. 55 Thereafter, on December 16, 2015, defendant deposed Michael
Goldman during which he confirmed that both the applicants and the prosecuting
attorney knew, at the time of signing the§ 1.131 Declaration, that the applicants had
not reduced to practice the claimed LDR/PCR method prior to June 22, 1994. 56 He also
confirmed the absence of any ground for overcoming Carrino, Zhang390, and
Zhang924 other than the applicants' statement in the§ 1.131 Declaration. 57 Defendant
received the final transcript of Michael Goldman's deposition on December 29, 2015. 58
On January 13, 2016, defendant sent a draft of its proposed Amended Answer
and Counterclaim adding inequitable conduct allegations to plaintiffs, along with a
request for plaintiffs' consent to defendant's filing of the Amended Answer and
Counterclaims. 59 On January 19, 2016, plaintiffs indicated they would not consent. 60
Defendant then filed its motion on January 25, 2016. 61
Plaintiffs do not address the good cause requirement of Rule 16(b) to amend
54
55
56
57
58
59
60
61
Id.
Id. (quoting D.I. 398).
Id.
Id.
Id.
Id.
Id. at 11-12.
Id. at 12; D.I. 405.
11
pleadings after the deadline to amend has passed. The court determines defendant
has met that requirement because it "pleads a new legal theory-inequitable
conduct-based on a new set of facts obtained and confirmed during discovery which
took place after the Scheduling Order's deadline for amending pleadings." 62 Based on
the deposition time lines set for above, the court finds defendant worked diligently to
obtain and confirm facts to support its inequitable conduct affirmative defense and
counterclaim; particularly through the depositions of Francis Barany, Matthew Lubin,
and Michael Goldman which occurred after the August 7, 2015 deadline to amend
pleadings in this case. After obtaining and confirming those facts, defendant "filed its
amendment soon after it was able to satisfy the pleading requirements of Rule 9(b)."63
B.
Rule 15(a)
The court should grant leave to amend "[i]n the absence of any apparent or
declared reason-such as undue delay, bad faith or dilatory motive on the part of the
movant, ... undue prejudice to the opposing party by virtue of allowance of the
amendment, futility of the amendment, etc." 64
Plaintiffs do not argue that defendant unduly delayed in seeking leave to amend.
Defendant argues that it is pleading inequitable conduct without undue delay. "[T]he
question of undue delay requires that [the court] focus on the movant's reasons for not
62
ICU Med., Inc. v. Rymed Techs., Inc., 674 F. Supp. 2d 574, 578 (D. Del.
2009); see also, e.g., Enzo Life Sciences, Inc. v. Digene Corp., 270 F. Supp. 2d 484,
488 (D. Del. 2003).
63
Enzo Life Sci., 270 F. Supp. 2d at 490; id. at 489 (Because Rule 9(b) must be
plead with particularity, defendant was "prudent and possibly required to confirm the
factual allegations through discovery.").
64
Foman v. Davis, 371 U.S. 178, 182 (1962).
12
1
amending sooner."65 As the court found, above, defendant diligently worked to obtain
and confirm facts supporting its proposed amendment and filed its motion soon after
obtaining and confirming those facts and plaintiffs' refusal to agree to that amendment.
Therefore, the court finds there was no undue delay on defendant's part. Likewise,
plaintiffs do not argue bad faith on the part of defendant in seeking to amend. The
court agrees with defendant that it demonstrated its good faith in seeking leave to
amend to add an affirmative defense and counterclaim of inequitable conduct by
waiting until after completion of the applicants' and patent prosecution counsel's
depositions in confirming the relevant facts. 66 "'[P]rejudice to the non-moving party is
the touchstone for the denial of an amendment."'67 Plaintiffs' do not argue allowing
defendant to amend would cause them undue prejudice, therefore, the court finds there
would be none.
Plaintiffs' basis for its argument that the court deny defendant's motion is that its
amended pleading is futile for failure to adequately plead inequitable conduct.
Defendant contends its amended counterclaim is not futile as it properly pleads
inequitable conduct.
65
Cureton v. Nat'/ Collegiate Athletic Ass'n, 252 F.3d 267, 273 (3d Cir. 2001)
(citing Adams v. Gould Inc., 739 F.2d 858, 864 (3d Cir. 1984) cert. denied, 469 U.S.
1122 (1985)).
66
See, e.g., lntervet v. Boehringer lngelheim Vetmedica, Inc., C.A. No. 11-595LPS, 2002 WL 4808427, at *1 (D. Del. Oct. 9, 2012) ('"[U]nsupported charges of
inequitable conduct are disfavored by the Federal Circuit."') (quoting Probert v. Clorox
Co., Inc., 258 F.R.D. 491, 494 (D. Utah 2009)).
67
Arthur v. Maersk, Inc., 434 F.3d 196, 204 (3d Cir. 2006) (quoting Lorenz v.
CSX Corp., 1 F.3d 1406, 1414 (3d Cir. 1993)).
13
"An amendment is deemed futile if it could not withstand a motion to dismiss."68
"The analysis is the same as under Rule 12(b)(6) in that all factual allegations and all
reasonable inferences therefrom are accepted as true." 69 "The fact that plaintiffs
disagree with the factual representations made ... [in the pleading] is irrelevant, as the
court is not required to judge the merits of the parties' respective positions at this stage
of the proceedings." 70 In fact, at this stage, "the court does not and cannot weigh the
facts, nor determine whether a party will ultimately prevail." 71
Because inequitable conduct allegations must be plead with particularity
pursuant to Federal Rule of Civil Procedure 9(b), "the pleading must identify the specific;
i
who, what, when, where and how of the material misrepresentation or omission
committed before the PT0." 72 Defendant maintains its proposed Amended Answer and
Counterclaim of inequitable conduct satisfies these pleading requirements.
The pleading identifies applicants Francis Barany, Matthew Lubin, George
.Barany, and Robert Hammer, and their prosecution counsel Michael Goldman as the
individuals who signed and filed the§ 1.131 Declaration. 73 It also identifies Francis
Barany, Matthew Lubin, and Michael Goldman as the individuals who knew the
applicants had not reduced to practice the claimed LDR/PCR method "[p]rior to June
68
Enzo Life Sci., 270 F. Supp. 2d at 489 (citing Satellite Fin. Planning Corp. v.
First Nat'/ Bank, 646 F. Supp. 118, 120 (D. Del. 1986)).
69
Roquette Freres v. SP/ Pharma, Inc., C.A. No. 06-540-GMS, 2009 WL
1444835, at *3 (D. Del. May 21, 2009).
7
Cot'n Wash, Inc. v. Henkel Corp., 56 F. Supp. 3d 613, 626 (D. Del. 2014).
71
Roquette Freres v. SP/ Pharma, Inc., C.A. No 06-540-GMS, 2009 WL
1444835, at *3 (D. Del. May 21, 2009).
72
Exergen Corp. v. Wal-Mart Stores, Inc., 575 F.3d 1312, 1328 (Fed. Cir. 2009).
73
D.I. 406, Ex. A at ,-r 20.
°
14
22, 1994" as attested in the§ 1.131 Declaration. 74
The pleading identifies what information-the date of the applicants' reduction to
practice of the claimed LDR/PCR method-the applicants purportedly misrepresented to
the PTO through the § 1.131 Declaration. 75 The amended pleading also demonstrates
when the purported misrepresentation was made to the PTO by setting out the specific
dates of the applicants' § 1.131 Declaration as well as the actions the PTO took before
and after the filing of that declaration. 76 It identifies where the misrepresentation-the
purportedly false or misleading assertion of reduction to practice prior to June 22,
1994-occurred in the§ 1.131 Declaration, and that misrepresentation's relation to the
priority dates of Carrino, Zhang390, and Zhang924, which the PTO had previously
found to anticipate the claimed LDR/PCR method. 77
Lastly, defendant maintains its pleading demonstrates how the § 1.131
Declaration resulted in the PTO's allowance of the '470 patent over Carrino, Zhang390,
and Zhang924:
The Examiner found that Carrino, Zhang390, and Zhang924 "clearly
disclose[d]" and anticipated the LDR/PCR method set forth in independent
claim 1 and dependent claims 3 and 4 of the '156 Application; 78
To swear behind the June 22, 1994 priority date of Zhang390 and
Zhang924, the applicants and Michael Goldman submitted the § 1.131
Declaration attesting that, "[p]rior to June 22, 1994, [the applicants]
conceived and diligently reduced to practice, in the United States, the
invention claimed in the above-identified patent application,"; 79
74
75
76
77
78
79
Id.,
Id.,
Id.,
Id.,
Id.,
Id.,
Ex.
Ex.
Ex.
Ex.
Ex.
Ex.
A
A
A
A
A
A
at 1f1f 20(c), 20(e), 20(f).
at 1f1f 20-20(f), 21 (b )-21 (f).
at 1f1f 17, 18, 19, 20, 21(i).
at1f1f 18, 18(b), 18(c), 19-19(c), 20(b)-20(d), 21(f).
at 1f1f 18(c), 19-19(c).
at 1f1f 20(c), 21 (e).
15
As a consequence of the declaration, the applicants' Amendment
asserted that Carrino, Zhang390, and Zhang924 "cannot be prior art,"; 80
The § 1.131 Declaration and the accompanying Amendment neither
distinguished Carrino, Zhang390, and Zhang924 from the claimed
LDR/PCR method nor provided "actual dates" of the applicants' diligence
as required to swear behind Zhang390 and Zhang924 in the absence of
actual reduction to practice prior to June 22, 1994; 81 and
The Examiner necessarily relied on the attested date of reduction to
practice prior to June 22, 1994 in issuing the '470 patent despite Carrino,
Zhang390, and Zhang924. 82
Additionally, to meet the requirements of Rule 9(b):
[A] pleading of inequitable conduct under Rule 9(b) must include sufficient
allegations of underlying facts from which a court may reasonably infer
that a specific individual (1) knew of the withheld material information or of
the falsity of the material misrepresentation, and (2) withheld or
misrepresented this information with a specific intent to deceive the
PT0. 83
Plaintiffs argue defendant's proposed amendment is futile because it fails to
adequately plead that the§ 1.131 Declaration was material, fails to adequately plead
specific intent to deceive the PTO, and thus, fails to state a claim on which relief can be i
granted.
Defendant argues its amended pleadings allege sufficient facts from which the
court can reasonably infer that the§ 1.131 Declaration's alleged misrepresentation of
the applicants' date of reduction to practice was material to issuance of the LDR/PCR
patents. "[A]s a general matter, the materiality required to establish inequitable conduct \
80
81
82
83
Id., Ex. A at~ 20(d).
Id., Ex. A at
20(b), 21(b)-21(f).
Id., Ex. A at ,-r 21(h).
Exergen Corp., 575 F.3d at 1328-29 (Fed. Cir. 2009).
,.m
16
is but-for materiality." 84 However, "[w]hen a patentee has engaged in affirmative acts of
egregious misconduct, such as the filing of an unmistakably false affidavit, the
misconduct is material."85
The court determines the § 1.131 Declaration was material to the issuance of the
'470 patent. The Examiner found that Carrino, Zhang390, and Zhang924 "clearly
disclose[d]" and anticipated the LDR/PCR method of independent claim 1 and
dependent claims 3 and 4 of the '156 Application. In response, the applicants
submitted the§ 1.131 Declaration stating "[p]rior to June 22, 1994, [the applicants]
conceived and diligently reduced to practice, in the United States, the invention claimed
in the above-identified patent application." As a consequence of the declaration, the
Amendment asserted the Carrino, Zhang390, and Zhang924 references "cannot be
prior art." No attempt was made to distinguish those references from the claimed
LDR/PCR method. After receiving the § 1.131 Declaration and the Amendment the
Examiner issued the '4 70 patent despite the references previously cited in rejecting the
claims. It is reasonable, therefore, that but for those submissions the patent would not
have issued; there are no other apparent materials on which the Examiner could have
based his reversal on patentability.
Plaintiffs, however, contend the statement in the § 1.131 Declaration was not
84
Therasense, Inc. v. Becton, Dickinson & Co., 649 F.3d 1276, 1291 (Fed. Cir.
2011) (en bane).
85
Id. at 1292 (citing Rohm & Haas Co. v. Crystal Chem. Co., 722 F.2d 1556,
1571 (Fed. Cir. 1983) ("there is no room to argue that submission of false affidavits is
not material"); Refac Int'/, Ltd. v. Lotus Dev. Corp., 81 F.3d 1576, 1583 (Fed. Cir. 1996)
(finding the intentional omission of declarant's employment with inventor's company
rendered the affidavit false and that "[a]ffidavits are inherently material")).
17
false or misleading.
The court finds that defendant's proposed amended pleading alleges plausible
facts that the § 1.131 Declaration contained false or misleading information. As
discussed above, to antedate alleged prior art the applicant must declare that the
invention was reduced to practice prior to the date of the prior art in question or
conceived of the invention prior to the date of the prior art in question, and then
diligently acted from before the date of the prior art through actual or constructive
reduction to practice.
Plaintiffs' rely on the use of the word "conception" and "diligent" in the § 1.131
Declaration statement attesting that "[p]rior to June 22, 1994, we conceived and
diligently reduced to practice, in the United States, the invention claimed in the aboveidentified patent application" as evidence that the applicants were relying on the second
part of Rule 1.131, i.e., not representing actual reduction to practice prior to June 22,
1994. Significantly, however, is the MPEP requirement that when relying on the second
part of Rule 1.131 "the actual dates of acts relied on to establish diligence must be
provided." 86 No such dates were provided. That no such information was provided, and
the applicants' use of the conjunctive "conceived and diligently reduced to practice"
"[p]rior to June 22, 1994," it is plausible that the Examiner understood that statement as
a representation the applicants had actually reduced to practice the LDR/PCR methods.
That plausibility is bolstered by the fact that the Examiner did not request information
confirming "the actual dates of acts relied on to establish diligence."
86
Id., Ex. A at~~ 21 (c), 21 (d).
18
The court agrees with defendant that much of plaintiffs' argument is based on
pointing to other evidence they believe is inconsistent with defendant's allegations and
reading of the § 1.131 Declaration. At the pleading stage, plaintiffs' evidence is
irrelevant and the court can not address the merits of that evidence. 87 The court,
therefore, finds defendant has sufficiently alleged the§ 1.131 Declaration contains a
material false or misleading misrepresentation.
Plaintiffs also allege defendant's proposed amended pleading fails to adequately
plead specific intent to deceive the PTO. "Because direct evidence of deceptive intent
is rare, a district court may infer intent from indirect and circumstantial evidence." 88 To
meet the pleading standard, defendant "need only allege facts from which the Court
could reasonably infer that the patent applicant made a deliberate decision to deceive
the PT0." 89
Plaintiffs argue there can be no finding of deceptive intent, nor a reasonable
inference of deceptive intent because Francis Barany and Matthew Lubin testified they
believed the declaration to be true at the time of filing and that Michael Goldman also
87
See Cot'n Wash, Inc. v. Henkel Corp., 56 F. Supp. 613, 626 (D. Del. 2014)
("The fact that the plaintiffs disagree with the factual representation made by [the
defendant] is irrelevant, as the court is not required to judge the merits of the parties'
respective positions at this of the proceedings."); Bayer Cropscience AG v. Dow
Agrosciences LLC, C.A. No. 10-1045-RMB-JS, 2012 WL 1253047, at *3 (D. Del. Apr.
12, 2012) ("[l]n this context the Court must ~ccept as true [the defendant's] wellpleaded facts. The Court may not weight the facts and address the merits of [the
plaintiff's] averments.").
88
Therasense, 649 F.3d at 1290 (citing Larson Mfg. Co. of S.D., Inc. v. Aluminart
Prods. Ltd., 559 F.3d 1317, 1340 (Fed. Cir. 2009)).
89
Wyeth Holdings Corp. v. Sandoz, Inc., C.A. No. 09-955-LPS-CJB, 2012 WL
600715, at *7 (D. Del. Feb. 3, 2012) (emphasis in original); see also id. at *14 (noting
that inequitable conduct claims are rarely disallowed "at the pleading stage due to the
failure to adequately allege scienter").
19
testified he took steps to ensure that the inventors understood what the declaration, and
the specific sentence at issue, meant before they signed the declaration. 90 ·Goldman
also testified he would not have submitted a declaration that relied on a conception and
a diligent reduction to practice if there had been an actual reduction to practice. 91
Again, plaintiffs' argument relies on assertions of fact requiring the court to
address the merits of the evidence which the court may not do at this stage of the
proceedings. 92 The court determines defendant has adequately plead specific intent to
deceive the PTO. The Examiner had rejected the proposed claims. The applicants
submitted the § 1.131 Declaration (without evidence demonstrating diligence) that the
court determined plausibly could have been understood by the Examiner as attesting to
an actual reduction to practice prior to June 22, 1994. The Examiner then allowed the
claims. Francis Barany and Matthew Lubin testified the claimed LDR/PCR methods
had not been reduced to practice prior to that date and Michael Goldman testified he
knew at the time of filing the § 1.131 Declaration that there had not been actual
reduction to practice. The court, therefore, rejects plaintiffs' argument that defendant
did not adequately allege specific intent93 and grants defendant's motion with respect to
the '470 patent.
Finally, plaintiffs contend defendant failed to adequately plead the applicants'
90
D.I. 429 at 8.
Id. at 10.
92
The court notes the cases addressing inequitable conduct relied on by
plaintiffs are either on summary judgment or after trial.
93
See, e.g., eSpeed, Inc. v. Brokertec USA, LLC, 417 F. Supp. 2d 580, 591 (D.
Del. 2006) ("'Intent need not be proven by direct evidence; it is most often proven by a
showing of acts, the natural consequences of which are presumably intended by the
actor."') (quoting Mo/ins PLC v. Textron, Inc., 48 F.3d 1172, 1180 (Fed. Cir. 1995)).
91
20
and prosecuting attorney's purported misconduct with regard to the '156 Application
and resulting '470 patent infects the continuation patents, i.e., the '434, '039, '865, '285,
'858, '453, and '891 patents.
"[l]nequitable conduct 'early in the prosecution may render unenforceable all
claims which eventually issue from the same or a related application."' 94 The court
determines defendant has adequately plead that the those patents are also infected by
the alleged misconduct in prosecuting the '470 patent. Defendant alleges those patents
issued as continuations of, and claim priority to, the '156 Application and similarly claim
LDR/PCR methods relating to the detection of nucleic acid sequence differences using
coupled LOR and PCR. 95 Defendant also alleges that in prosecuting the continuation
patents, the applicant largely relied on terminal disclaimers over prior art patents in the
LDR/PCR family, such as the '470 patent, in response to obvious-type double patenting
rejections. 96 According to defendant's pleading, those terminal disclaimers indicated
the Examiner had found the continuation patents were closely related to the '4 70 patent
and, therefore, could have been rejected over the Carrino, Zhang390, and Zhang924
references but for the purportedly false§ 1.131 Declaration. 97 Accordingly, the court
also grants defendant's motion with respect to the continuation patents.
94
Agfa Corp. v. Crea Prods. Inc., 451 F.3d 1366, 1379 (Fed. Cir. 2006) (quoting
Fox Indus., Inc. v. Structural Preservation Sys., Inc., 922 F.2d 801, 804 (Fed. Cir.
1990)).
95
D.I. 406, Ex. A at 1111 17(a), 22.
96
Id., Ex. A at 1122(b); see, e.g., In re Berg, 140 F.3d 1428, 1432 (Fed. Cir.
1998) ("If the application claim is not patentably distinct, in order to overcome the
double patenting rejection, the applicant must file a 'terminal disclaimer,' forgoing that
portion of the term of the second patent that extends beyond the term of the first.")
(citing In re Goodman, 11 F.3d 1046, 1052 (Fed. Cir. 1993)).
97
D.I. 406, Ex. A at 1122(b).
21
V.
CONCLUSION
Consistent with the findings contained in the Report and Recommendation,
IT IS RECOMMENDED that defendant's motion to amend (D.I. 405) be
GRANTED.
Pursuant to 28 U.S.C. § 636(b)(1 )(B), FED. R. C1v. P. 72(a) and D. DEL. LR 72.1,
any objections to the Report and Recommendation shall be filed within fourteen (14)
days limited to ten (10) pages after being served with the same. Any response is
limited to ten (10) pages.
The parties are directed to the Court's Standing Order in Non-Pro Se matters for
Objections Filed under FED. R. C1v. P. 72 dated November 16, 2009, a copy of which is
available on the court's website, www.ded.uscourts.aov.
Dated: May 27, 2016
/s/ Mary Pat Thynge
UNITED STATES MAGISTRATE JUDGE
22
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