Hologic, Inc. et al v. Minerva Surgical, Inc.

Filing 82

MEMORANDUM ORDER denying #52 MOTION TO STRIKE // Defendant Minerva Surgical, Inc.'s Motion to Strike Plaintiffs' Preliminary Injunction Motion for Lack of Standing and Motion for Expedited Relief, denying #35 MOTION to Transfer Case to Northern District of California. Signed by Judge Sue L. Robinson on 2/29/2016. (nmfn)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF DELAWARE

HOLOGIC, INC. and CYTYC
SURGICAL PRODUCTS, LLC,
Plaintiffs,

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v.

MINERVA SURGICAL, INC.,
Defendant.

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MEMORANDUM ORDER
At Wilmington this 291h day of February, 2016, having reviewed the motions filed
by defendant Minerva Surgical, Inc. ("Minerva") to transfer venue and to strike plaintiffs'
preliminary injunction motion for lack of standing , and the papers filed in connection
thereto;
IT IS ORDERED that Minerva's motion to transfer (D.I. 35) is denied, for the
reasons that follow:
1. Minerva moves to transfer this action to the Northern District of California,
where it maintains its headquarters and sole place of business. The analytical
framework for motions to transfer pursuant to 28 U.S.C. § 1404(a) are well known and
will not be repeated here. See, e.g., In re Link_A_Media Devices Corp., 662 F.3d 1221
(Fed. Cir. 2011); Jumara v. State Farm Ins. Co., 55 F.3d 873 (3d Cir. 1995); Helicos

Biosciences Corp v. 11/umina, Inc., 858 F. Supp. 2d 367 (D. Del. 2012). I have gleaned
the following from the above case law: A plaintiff, as the injured party, has the privilege

of initiating its litigation in the forum it chooses. A defendant's place of incorporation is
always an appropriate forum in which to sue that defendant. The purpose of§ 1404(a)
is not to usurp plaintiff's choice, but to give courts the discretion to transfer if the
interests of justice so dictate. The Third Circuit in Jumara gave the courts some factors
to balance in making their determination, keeping the above tenets in mind. The
Jumara factors should be viewed through a contemporary lens. In this regard, I have
declined to transfer based on the location of potential witnesses and of books and
records, as discovery is a local event, 1 and trial is a limited event. 2 With respect to the
factor related to "administrative difficulty from court congestion," the case management
orders always start with the schedules proposed by the litigators. It has been my
experience that most litigators (especially those representing defendants) are in no
hurry to resolve the dispute. If there is a need to expedite proceedings, that need is
accommodated. In sum, this factor generally is neutral.
2. Minerva argues that, because it is a start-up company with only one product -

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Depositions generally are taken where the deponents reside, and books and
records generally are kept in a digital format and easily transferable. To the extent that
Minerva's books and records are kept in "physical form" (hard to believe, but suggested
by Minerva), it would be the opposing party's burden to travel for an inspection and/or to
pay for copies.
2

According to national statistics, less than 13.9 % of patent infringement cases
resolve on the merits. Howard, Brian, The Truth About Patent Damage Awards,
Law360 (Oct. 16, 2014) (patent cases filed between 2000 and 2013); Morgan, Paul,
Microsoft v. i4i - Is the Sky Really Falling?, PatentlyO (Jan. 9, 2011) ("[M]ore than 97%
of patent suits are settled before trial with no judicial validity test."); Denlow, Morton,
Hon. Ret., Magistrate Judges' Important Role in Settling Cases, The Federal Lawyer,
101 (May/June 2014) ("In 2012, less than 2 percent of federal civil cases went to trial.").

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the accused product - and no sales yet in Delaware, 3 the balance of hardships weigh in
favor of transfer. With respect to the lack of ties to Delaware but for incorporation, even
it that were the case, 4 the place of incorporation reflects a company's recognition that
Delaware is an appropriate jurisdiction for resolution of commercial disputes through
litigation. See, e.g., Micron Technology, Inc. v. Rambus Inc., 645 F.3d 1311, 1332
(Fed. Cir. 2011 ). Having accepted the benefits of incorporation under the laws of the
State of Delaware, "a company should not be successful in arguing that litigation" in
Delaware is "inconvenient," "absent some showing of a unique or unexpected burden."
ADE Corp. v. KLA-Tencor Corp., 138 F. Supp. 2d 565, 573 (D. Del. 2001 ). In this case,
Minerva asserts that it does not have the financial resources to litigate in Delaware; in
contrast, plaintiff Hologic, Inc. ("Hologic"), which is headquartered in Massachusetts, not
only has the resources to litigate in California, but has done so in the past. 5
3. I recognize that litigating in Delaware may be a more expensive exercise for
Minerva than litigating in California. 6 Under the circumstances at bar, however - a first-

3

Although there is record evidence that the accused product was demonstrated
at one Delaware hospital by a representative of Minerva. (D.I. 38 ~ 8)
4

Minerva suggests that it "presently has no intention of selling the Accused
Devices in Delaware," discounting its sales effort to the Delaware hospital. (D.I. 38 at
2-3) I am not persuaded that a start-up company, especially one complaining about its
lack of financial resources, is not interested in making sales, and decline to give such a
suggestion any substantial weight.
5

According to Hologic, it was a defendant in two of the three lawsuits, and
brought the third lawsuit because it was related to one of the other two cases; to wit,
California is not a venue of choice for Hologic. (D.I. 49 at 13)
6

As noted by Minerva, the increase in costs is associated with retaining Delaware
counsel and with travel.

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filed case between Delaware corporations that does not implicate the state laws of
another jurisdiction - I decline to elevate the convenience of one party over the other.
"The burden of establishing the need for transfer ... rests with the movant." Jumara, 55
F.3d at 879. The record at bar does not reflect (and I am not persuaded) that litigating
in Delaware imposes a unique or unexpected burden on Minerva, such that transfer is
warranted.
IT IS FURTHER ORDERED that Minerva's motion to strike (D.I. 52) is denied,
for the reasons that follow:
4. Minerva has filed a motion to strike Hologic's pending motion for a preliminary
injunction based on Hologic's alleged lack of standing. As presented by Minerva,
Hologic lacks standing because, at the time of filing the complaint, the patents in
dispute 7 were owned by plaintiff Cytyc Surgical Products LLC ("Cytyc"), a
Massachusetts company and wholly owned subsidiary of Hologic. According to
Minerva, because Cytyc is a patent holding company and non-operating entity, Cytyc
"alone could not have prevailed (and likely would never even have brought) a motion for
preliminary relief on its own." (D.I. 52 at 3)
5. "The general rule is that one seeking to recover money damages for
infringement of a United States patent (an action 'at law') must have held the legal title
to the patent during the time of infringement." Arachnid, Inc. v. Merit Industries, Inc.,
939 F.2d 1574, 1579 (Fed. Cir. 1991) (emphasis in original). In contrast, "[a]n owner of
the equitable title may seek redress against an infringer in a court of equity" where he

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U.S. Patent Nos. 9,095,348 and 6,872, 183.

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may only seek equitable relief. Id. at 1580 (citation omitted). "The fact that a corporate
parent's subsidiary owns a patent is not enough to establish that the parent has a legal
ownership interest in the subsidiary's patent." Digitech Image Techs., LLC v. Newegg
Inc., 2013 WL 1871513, at *4 ((C.D. Cal. May 3, 2013) (emphasis in original). Accord,
Abraxis Bioscience, Inc. v. Navinta LLC, 625 F.3d 1359, 1366 (Fed. Cir. 2010).
Moreover, "the mere fact that a corporation's subsidiary owns a patent is insufficient to
establish that the corporation has equitable title to the patent." 8 Digitech, 2013 WL
1871513, at *4 (emphasis added). Accord, Top Victory Electronics v. Hitachi Ltd., 2010
WL 4722482, at *4 (N.D. Cal. Nov. 15, 2010) (the fact that the companies are "closely
intertwined by virtue of their parent/subsidiary relationship" is insufficient to establish
standing); Merial Ltd. v. lntervet, Inc., 430 F. Supp. 2d 1357, 1361-63 (N.D. Ga. 2006)
("standing under the Patent Act cannot be based on the mere fact that [the subsidiary]
is a wholly-owned subsidiary of [the parent company]"); Beam Laser Sys., Inc. v. Cox
Communications, Inc., 117 F. Supp. 2d 515, 521 (E.D. Va. 2000) (ownership of
corporate stock does not create equitable title in that corporation's property); and Site
Microsurgical Sys., Inc. v. Cooper Cos., 797 F. Supp. 2d 333, 338 (D. Del. 1992)
(finding mere fact of a parent-subsidiary relationship did not confer standing on parent).
See also, Spine Solutions, Inc. v. Medtronic Sofamor Danek USA, Inc., 620 F.3d 1305,
1317-18 (Fed. Cir. 2010) (standing not established based on a corporate
"understanding" that one subsidiary owned and enforced the patent and a second

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"Equitable title may be defined as 'the beneficial interest of one person whom
equity regards as the real owner, although the legal title is vested in another."' Digitech,
2013 WL 1871513, at *3 (citation omitted).

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subsidiary was the only entity that made and sold products practicing the patent).
6. As is evident from the above recitation, the issue of standing is rooted in the
facts of each case. While the "mere fact" of stock ownership or of a corporate
relationship does not alone establish standing, the record at bar is sufficient to
demonstrate "that boundaries between the corporations [at bar] have been breached."
Top Victory, 2010 WL 4722482, at *3. More specifically, the record reflects that, at the

time the original complaint and the motion for preliminary relief were filed, Cytyc owned
the patents-in-suit and Hologic owned and "exercised ... complete control over Cytyc,"
including control over all of Cytyc's business decisions and Cytyc's patent enforcement,
assignment, and licensing policies. (D.I. 611[1[ 5, 6) According to Hologic, "[b]ecause
of the structure of this corporate relationship and Hologic's complete control over
Cytyc's patent licensing and enforcement policies, Hologic has had control over the
Patents-in-Suit, and has enjoyed exclusive rights thereunder." (Id.) Under these
circumstances, Hologic has established its equitable standing to pursue injunctive relief.
See also Cognex Corp. v. Microscan Sys., Inc., 2014 WL 2989975, at *5 (S.D.N.Y.

June 30, 2014); Atmel Corp. v. Authentic, Inc., 490 F. Supp. 2d 1052, 1055 (N.D. Cal.
2007); Pipe Liners, Inc. v. American Pipe & Plastics, Inc., 893 F. Supp. 704, 706 (S.D.
Tex. 1995).
IT IS FURTHER ORDERED that the parties shall bear their own costs for the
above described motion practice, as I considered neither motion frivolous.

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