Endoheart AG v. Edwards Lifesciences Corporation

Filing 69

REPORT AND RECOMMENDATIONS recommending granting D.I. 45 MOTION to Intervene filed by Brigham and Women's Hospital Inc.. Please note that when filing Objections pursuant to Federal Rule of Civil Procedure 72(b)(2), briefing cons ists 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 11/23/2015. Signed by Judge Christopher J. Burke on 11/6/2015. (dlk)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF DELAWARE

ENDOHEART AG,
Plaintiff,

v.
EDWARDS LIFESCIENCES
CORPORATION,
Defendant.

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Civil Action No. 14-1473-LPS-CJB

REPORT AND RECOMMENDATION

At Wilmington this 6th day of November 2015, having reviewed proposed intervenor
Brigham and Women's Hospital's ("BWH") Motion to Intervene ("Motion"), (D.I. 45), and the
papers filed in connection therewith, the Court recommends that the Motion be GRANTED
based on the following reasoning. 1
I.

BACKGROUND

1.

With its Motion, BWH seeks to intervene in the case pursuant to Federal Rule of

Civil Procedure 24. BWH does so in order to be able to press its claim (set out in its Complaint
in Intervention and For Declaratory Judgment of Patent Ownership, hereafter referred to as the
"Complaint") that it is entitled to a declaratory judgment that it is the owner of United States
Patent No. 8,182,530 ("the '530 patent") and to certain patent applications related to the '530
District courts in this Circuit have treated a ruling on a motion to intervene as a
non-dispositive ruling. In re Gabapentin Patent Litig., 312 F. Supp. 2d 653, 661 (D.N.J. 2004);
Blackv. Premier Co., No. CIV.A. 01-4317, 2002 WL 31045854, at *1 n.4 (E.D. Pa. Sept. 12,
2002); United States v. WR. Grace & Co.-Conn., 185 F.R.D. 184, 187 (D.N.J. 1999). The
United States Court of Appeals for the Third Circuit has apparently not decided the issue,
however, see Dewey v. Volkswagen Aktiengesellschaft, 558 Fed. App'x 191, 198-99 (3d Cir.
2014), and some other federal courts around the country have found such a ruling to be
dispositive, see Day v. Persels & Assocs., LLC, 729 F.3d 1309, 1322 (11th Cir. 2013). In an
abundance of caution, the Court will title this document as a "Report and Recommendation."

patent (collectively, "the inventions"). (D.I. 45; D.I. 46, ex. 1) Chief Judge Leonard P. Stark has
referred the Motion to the Court for resolution. (D.I. 48)
2.

The '530 patent is the patent-in-suit in this case. Plaintiff Endoheart AG

("Plaintiff'), who claims that it (not BWH) is the rightful owner of the patent, is asserting the
patent against Defendant Edwards Lifesciences Corporation. (D.I. 1)
3.

BWH asserts that its ownership rights to the inventions arise out of the terms of

an "Intellectual Property Policy" ("the IP Policy") that the patent's inventor, Dr. Christopher
Huber, was subject to while he worked at BWH in late 2004 through 2005. The IP Policy is
attached as Exhibit A to BWH's Complaint. (D.I. 46, ex. 1 at ex. A)

II.

DISCUSSION
4.

The Court focuses herein on BWH's argument that it is entitled to intervene as of

right, pursuant to Rule 24(a). (D.I. 46 at 3-7) Rule 24(a) provides that upon timely application,
an applicant shall be permitted to intervene in an action when the applicant "(2) claims an
interest relating to the property or transaction that is the subject of the action and is so situated
that disposing of the action may as a practical matter impair or impede the movant's ability to
protect its interest, unless existing parties adequately represent that interest." Fed. R. Civ. P.
24(a)(2). The United States Court of Appeals for the Third Circuit has interpreted Rule 24(a)(2)
to require proof of four elements from the applicant seeking intervention: ( 1) a timely
application for leave to intervene; (2) a sufficient interest in the litigation; (3) a threat that the
interest will be impaired or affected, as a practical matter, by the disposition of the action, and (4)
inadequate representation of the prospective intervenor's interest by existing parties to the
litigation. Kleissler v. US. Forest Serv., 157 F.3d 964, 969 (3d Cir. 1998); see also Wharton v.
2

Danberg, C.A. No. 12-1240-LPS, 2014 WL 4925227, at* 1 (D. Del. Sept. 29, 2014).
5.

At oral argument, the parties confirmed that they both agree that, in resolving the

Motion, the Court must (1) consider only the contents of the Complaint (plus exhibits attached
thereto, documents integral thereto, or documents explicitly relied upon therein); (2) accept any
non-conclusory allegations contained in these sources as true; and then (3) determine whether the
proposed intervenor (here, BWH) has made out a prima facie case that intervention is
permissible. (D.I. 68 at 23-25, 33-34) Although the parties advise that the Third Circuit has not
directly addressed the standard for consideration of potentially disputed facts set forth in a
motion to intervene, (see D.I. 54 at 3), other circuit courts have relied on the principles described
above in this context, see Sw. Ctr. for Biological Diversity v. Berg, 268 F.3d 810, 820 (9th Cir.
2001); cf United States v. Baxter Int'!, Inc., 345 F.3d 866, 880 (11th Cir. 2003) ("A motion to
dismiss a complaint in intervention is reviewed under the same standard applicable to
consideration of a motion to dismiss the original plaintiffs' complaint."). 2 The Court agrees with
the parties that these are the appropriate principles to implement regarding this threshold-type
motion, and will proceed to apply them here.
6.

Turning now to the first element of proof regarding a motion to intervene,

Plaintiff argues that BWH cannot demonstrate that the Motion was timely filed. (D.I. 51 at 8-9)
It asserts that grant of the Motion would threaten the orderly procedure of the case schedule, and,

2

And indeed, district courts within the Third Circuit have routinely held that in
resolving a motion to intervene, a court must accept the non-conclusory allegations made in
support thereof. Palladino v. Corbett, Civil Action No. 13-5641, 2014 WL 830046, at *1 n.l
(E.D. Pa. Mar. 4, 2014); Porter v. TD. Bank, NA., Civil Action No. 10-7243, 2011WL925734,
at *2 (E.D. Pa. Mar. 14, 2011); Olympic Sports Data Servs., Ltd. v. Maselli, Civil Action No. 07117, 2008 WL 5377626, at *2 (E.D. Pa. Dec. 22, 2008).
3

in that regard, notes that the Motion was filed in July 2015-seven months after Plaintiffs
Complaint was filed in December 2014 and four months after a schedule was entered in March
2015. (Id. at 9) The Third Circuit has listed three factors for a district court to consider
regarding the timeliness of such a motion: ( 1) the state of the proceeding; (2) the prejudice that
delay may cause the parties and (3) the reason for the delay. Mountain Top Condo. Ass 'n v. Dave
Stabbert Master Builder, Inc., 72 F.3d 361, 369 (3d Cir. 1995). But it has also cautioned that in

determining whether an application for intervention of right is timely, a court should be
"reluctant to dismiss a request for intervention" on the ground that it was untimely filed, since
"the would-be intervenor may be seriously harmed if he is not permitted to intervene[.]" Id.
(internal quotation marks and citation omitted).
7.

Keeping the need for such reluctance in mind, the Court does not find the Motion

untimely here. While the parties have been proceeding with discovery, the case is not in its late
stages; instead, fact discovery does not close until April 22, 2016, 3 a Markman hearing will not
be held until January 25, 2016, and trial is not scheduled until March 2017. (D.I. 19) Moreover,
the issues relating to BWH's declaratory judgment claim appear to be narrowly focused and to
require only "limited" discovery. (D.I. 54 at 10)4 And finally, it appears not seriously disputed
that BWH only learned of its alleged ownership rights in the inventions after this litigation was
filed, and not long before it filed the present Motion. (D.I. 46 at 5; id., ex. 1 at if 19; D.I. 51 at 1

3

The parties also report that Dr. Huber, who would certainly be an important
witness regarding BWH's claim, has yet to be deposed. (D.I. 68 at 19, 55)
4

In this regard, the Court was comforted by the representation ofBWH's counsel at
oral argument that were it permitted to intervene, BWH would not seek large-scale changes to the
case schedule. (D.I. 68 at 21)
4

n.1; D.I. 54 at 9) Under these circumstances, the Court cannot agree with Plaintiff that BWH's
Motion amounts to an untimely attempt to intervene. See, e.g., Select Retrieval LLC v.
AmeriMark Direct LLC, Civil Action No. 11-812-RGA, Civil Action No. 12-1440-RGA, 2013

WL 3381324, at *2 (D. Del. July 3, 2013) (finding that a motion to intervene was "not untimely"
when filed less than four months after the scheduling order was entered and nearly two years
before the scheduled trial date); US. ex rel. Frank M Sheesley Co. v. St. Paul Fire & Marine Ins.
Co., 239 F.R.D. 404, 412 n.9 (W.D. Pa. 2006) (noting, in resolving a motion to intervene, that

the motion was timely in that "[t]his case is still in its initial stages, there have been no filings
beyond the initial pleadings and the motions sub judice, and discovery is not scheduled to
conclude until [three months from the data of the court's decision], as per the Court's Initial
Scheduling Order.").
8.

Plaintiffs next argument (and its primary argument) implicates elements two,

three and four of the test for a motion to intervene. Each of those three elements require that the
prospective intervenor has a legal "interest" in the property at issue in the litigation (here, a legal
interest in the '530 patent and related applications). See Princeton Biochemicals, Inc. v. Beckman
Coulter, Inc., 223 F.R.D. 326, 329 (D.N.J. 2004) (noting that a "claim of ownership of the

[patent-in-suit] is such a legal interest[]"). Plaintiff asserts that BWH's Complaint, even viewed
in the light most favorable to it, does not make out a viable prima facie case that BWH has an
ownership interest in the inventions, including the '530 patent. (D.I. 51 at 7-8)
9.

In concluding to the contrary-that BWH has, in fact, met its burden here

regarding the "legal interest" at issue-the Court need only look to one ofBWH's two arguments
that implicate the terms of the IP Policy. BWH asserts that Section 5.2.2 of that policy (titled
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"Related Inventions") provides it with ownership rights to the patent. That section explains that
"Inventions conceived or reduced to practice by one or more Members that are not Supported
Inventions but that arise out of or relate to the clinical, research, educational or other activities of
the Inventor at an Institution" are owned by the Institution. (D.I. 46, ex. 1 at ex. A at 5) It is not
disputed that Dr. Huber was a "Member" ofBWH during the time period at issue, nor that BWH
is an "Institution." The question is whether Dr. Huber's "Inventions" at issue (e.g., those
captured in the '530 patent-a patent Dr. Huber applied for while employed by BWH), (D.I. 46,
ex. 1 at~ 14), can be said to "arise out of or relate to" Dr. Huber's "clinical, research, educational
or other activities" while at BWH.
10.

The Complaint doesn't say much about what Dr. Huber's "clinical, research,

educational or other activities" were at BWH, other than to allege that "[i]n 2004 and 2005, Dr.
[]Huber was employed as a senior cardiac clinical fellow" at the hospital. (D.I. 46, ex. 1 at~ 9)
But even Plaintiff seemed to agree (as does the Court) that a fair inference from this allegation
and the remainder of the Complaint is that Dr. Huber was deeply involved at BWH in treating
heart and heart valve disease, work that involved the implantation of heart valves. (D.I. 68 at 40,
43-44) Considering this, along with the fact that the patent-in-suit claims, inter alia, a method of
implanting a heart valve (albeit a particular method involving transapical aortic valve
implantation), ('530 patent, cols. 21 :58-22:6), and that the patent asserts that "[o]f particular
interest to the present invention is the treatment of heart valve disease" including stenosis and
regurgitation, (id., col. 1:29-33), BWH has made a prima facie showing that the "Inventions" at
issue "ar[ose] out of or relate[d] to" Dr. Huber's work at BWH. After all, "arise out of'' or
"relate to" are broad terms.
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11.

Of course, even amidst this breadth of language, what Dr. Huber's work actually

consisted of at BWH and how that relates to the "Inventions" at issue are fact issues that are yet
to be finally resolved. But working toward such resolution is what the discovery process is for.
12.

Plaintiffs last argument relates to the fourth element of the test for motions to

intervene. Plaintiff asserts that BWH has failed to demonstrate that its interests would be
inadequately represented by the existing parties to the litigation. (D.I. 51 at 8) This fourth
element is satisfied ifthe applicant shows that representation of its interest "'may be"'
inadequate, and the burden of making such a showing "'should be treated as minimal."'
Princeton Biochemicals, Inc., 223 F.R.D. at 329 (quoting Trbovich v. United Mine Workers, 404
U.S. 528, 538 n.10 (1972)). Here, were BWH's Motion denied, then no party would currently be
asserting (as BWH does in its Complaint) that BWH is the rightful owner of the patent-in-suit.
(D.I. 46 at 7 (noting that "Edwards has not raised [the ownership issue] in the case."); D.I. 68 at
52 (same)) In that scenario, the question ofBWH's ownership interest would go unresolved.
Thus, even though Plaintiff may have a similar interest to BWH in the patent being found to be
valid, it cannot be said that the parties here will adequately represent all of BWH's relevant
interests. Cf Princeton Biochemicals, Inc., 223 F.R.D. at 329 (finding that a proposed third party
intervenor, who claimed that it owned a patent at issue in a suit between two other parties, would
not have its interests in patent ownership adequately protected were it prevented from intervening
pursuant to Rule 24(a)).

III.

CONCLUSION
13.

Because BWH has met its burden with regard to each of the four elements of the

test regarding the grant of a motion to intervene, the Court recommends that the Motion be
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GRANTED.
14.

This Report and Recommendation is filed pursuant to 28 U.S.C. § 636(b)(l)(B),

Fed. R. Civ. P. 72(b)(l), and D. Del. LR 72.1. The parties may serve and file specific written
objections within fourteen (14) days after being served with a copy of this Report and
Recommendation. Fed. R. Civ. P. 72(b). The failure of a party to object to legal conclusions
may result in the loss of the right to de novo review in the district court. See Sincavage v.
Barnhart, 171 F. App'x 924, 925 n.1 (3d Cir. 2006); Henderson v. Carlson, 812 F.2d 874, 878-

79 (3d Cir. 1987).
15.

The parties are directed to the Court's Standing Order for Objections Filed Under

Fed. R. Civ. P. 72, dated October 9, 2013, a copy of which is available on the District Court's
website, located at http://www.ded.uscourts.gov.

Christopher J. Burke
UNITED STATES MAGISTRATE JUDGE

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