Janssen Biotech, Inc. v. Celltrion Healthcare Co., Ltd. et al

Filing 62

Judge Mark L. Wolf: ORDER entered. MEMORANDUM AND ORDER. (Bono, Christine)

UNITED STATES DISTRICT COURT
DISTRICT OF MASSACHUSETTS

JANSSEN BIOTECH, INC.,
Plaintiff,

V.

C.A. No. 17-11008-MLW

CELLTRION HEALTHCARE CO.,

LTD., ET AL.,
Defendants.

MEMORANDUM AND ORDER

October 31, 2017

WOLF, D.J.
I.

INTRODUCTION

Plaintiff

Janssen

Biotech,

Inc.

("Janssen")

alleges

that

defendants Celltrion Healthcare, Co., Ltd. and Celltrion, Inc.

(together, "Celltrion"),
infringed

U.S.

Patent

and
No.

Hospira,

Inc.

7,598,083

(the

("Hospira")
"'083

have

Patent").

Defendants have moved to dismiss for lack of standing. They claim

that Janssen lacks standing because it is not the sole owner of
the '083 Patent and the other co-owners have not joined Janssen as

plaintiffs as required by Section 262 of the Patent Act, 35 U.S.C.
§262. See Ethicon, Inc. v. U.S. Surgical Corp., 135 F.3d 1456,

1467 (Fed. Cir. 1998). In particular, defendants allege that the

inventors,

in

a

series

of employee

secrecy agreements

(the

"Agreements"), assigned the rights to the '083 Patent to more than

200 other companies, including Johnson and Johnson ("J&J") and its
subsidiaries and affiliates.

The court, however, finds that the Agreements assigned the

patent rights to Janssen's predecessor Centocor, Inc. ("Centocor")
alone. Therefore, Janssen is the sole owner of the '083 Patent and

is not required to join any other party to maintain this action.
Accordingly, the motion to dismiss is being denied.
II.

THE COMPLAINT AND PROCEDURAL HISTORY

A. The Complaint

The facts as alleged in the complaint are as follows.

Janssen produces Remicade, a biologic medicine whose active

ingredient is a monoclonal antibody called infliximab. See Compl.
at SISI38. Growing the cells that produce biologic medicines like
infliximab requires a composition called "cell culture media."
Janssen alleges that it holds the '083 Patent. The patent claims
a "soluble composition suitable for producing a final volume of
cell

culture

media,"

and

lists

61

ingredients

in

varying

concentrations. Compl. Ex. A. It names as inventors David Epstein,

Roger Monsell, Joseph Horowitz, Susan Lenk, Sadettin Ozturk, and
Christopher Marsh. See id. Centocor, Janssen's predecessor, is
named as the assignee. See id.

Celltrion produces a biosimilar to Remicade called Inflectra,
which received Food and Drug Administration ("FDA") approval on

April 5, 2016. See id. at 152. Third-party HyClone makes the cell

culture

media

that

Celltrion

uses

to

produce

its

biosimilar

infliximab product. Id. at SI7. Hospira collaborates with Celltrion
to

market

Celltrion

Inflectra.

infringes

See

the

id.

'083

at

59.

Patent

Plaintiff

alleges

by employing

that

HyClone

to

manufacture the media under Celltrion's direction and control, and

by inducing HyClone to infringe the patent.^ See id. at 551, 101,
111. It alleges that Hospira is liable for Celltrion's actions as

a joint venturer and induces Celltrion to infringe the patent by
ordering Inflectra from it, among other things. See id. at 583.
B. Procedural History

On March 6, 2015, plaintiff initiated Civil Action No. 15-

10698 (the "2015 Action") alleging, among other things, technical

infringement

of

the

'083

Patent

under

the

Biologies

Price

Competition and Innovation Act.^ On June 14, 2016, after obtaining

1 A party is liable for direct infringement under 35 U.S.C. §271(a)
when it "[a] acts through an agent (applying traditional agency

principles) or [b] contracts with another" to do the infringing
act. See Akamai v. Limelight Networks, 797 F. 3d 1020, 1022 (Fed.

Cir. 2015). Induced infringement under §271(b) requires both an
affirmative act that encourages infringement and specific intent:
that is, "knowledge that the induced acts constitute patent

infringement." Global-Tech Appliances, Inc. v. SEB S.A., 563 U.S.
754, 766 (2011).

2 The complaint in the 2015 Action also alleged infringement of
several related patents, including U.S. Patent No. 6,284,741 (the
"'471 Patent"), which relates to the infliximab antibody that is
the fundamental component of Remicade. On August 19, 2016, the

court granted summary judgment for defendants on the claim
concerning the '471 Patent on the ground that the '471 Patent is
invalid.

The

court

subsequently

entered

partial

judgment,

authorizing plaintiffs to appeal the grant of summary judgment.

more information in discovery, plaintiffs filed a second action

alleging actual infringement of the '083 Patent under the Patent
Act, 35 U.S.C. §271{a) and (b). The cases were consolidated and
scheduled for trial beginning on February 13, 2017.

At a January 18, 2017 scheduling conference, the parties

requested that the court address certain legal issues concerning
the appropriate measure of damages and plaintiffs' entitlement to

a permanent injunction if defendants were found to have infringed
the '083 Patent. The court subsequently ordered the parties to
file memoranda addressing these issues.

In their memorandum, defendants argued for the first time

that Janssen failed to join all co-owners of the '083 Patent in
either action and, therefore, lacked standing. In particular,

defendants argued that four of the inventors of the '083 Patent

had, in their Agreements with Centocor, assigned their rights to
the '083 Patent not only to Janssen's predecessor, Centocor, but

also to Janssen's parent, J&J, and all of J&J's subsidiaries and

affiliates (together, the "J&J Family" of companies). As explained
earlier, a plaintiff's failure to join all co-owners in an action
for patent infringement requires dismissal without prejudice for
lack of jurisdiction. See Ethicon, 135 F.3d at 1467.

On February 8, 2017, the court heard oral argument on the

That appeal is pending in the United States Court of Appeals for
the Federal Circuit.

issue of standing and found that the Agreements, which did not

clearly assign patent rights to Janssen's predecessor Centocor,

raise

serious

questions

concerning

its

jurisdiction.

As

the

parties agreed, those questions required the postponement of trial
to

permit

the

filing

of

a

motion

to

dismiss

for

lack

of

jurisdiction and limited additional discovery.

On February 22, 2017, plaintiffs filed a motion to dismiss
the 2015 and 2016 Actions for lack of standing due to plaintiffs'

alleged failure to join all co-owners of the '083 Patent. The

parties conducted limited discovery in connection

with that

motion. On March 6, 2016, Janssen and J&J entered into an agreement
that states that Janssen is the sole owner of the '083 Patent, and

that neither J&J nor any of its operating companies ever owned any
interest in the '083 patent. See C.A. No. 15-10698, Docket No.
521-7. Janssen filed that agreement on March 8, 2017 with its

opposition to the motion to dismiss. See id.
On June 30, 2017, before briefing concerning the motion to

dismiss was complete, the parties agreed to the dismissal of all
of the claims for infringement of the '083 Patent in the 2015
Action and the complete 2016 Action, each without prejudice. See
C.A. No. 15-10698, Docket No. 582 at 2-3.

On May 31, 2017, Janssen filed this case. Defendants again
moved to dismiss, arguing that the court lacks jurisdiction unless

Janssen joins each of the more than 200 members of the J&J Family

that defendants assert are co-owners of the '083 Patent. On October

13, 2017, the court heard oral argument on the motion.
III. LEGAL STANDARDS

A.

Motion To Dismiss for Lack of Subject Matter Jurisdiction

The court must satisfy itself that it has subject-matter

jurisdiction before the merits of this case can be decided. See
Steel Co. V. Citizens for a Better Env't, 523 U.S. 83, 94-95

(1998). When, here, "the facts relevant to the jurisdictional

inquiry are not intertwined with the merits of the plaintiff's
claim...the trial court is free to weigh the evidence and satisfy
itself as to the existence of its power to hear the case." Torres-

Negron v. J & N Records, LLC, 504 F. 3d 151, 163 (1st Cir. 2007);
see also DDB Techs., L.L.C. v. MLB Advanced Media, L.P, 517 F.3d
1284, 1291-92 (Fed. Cir. 2008).
B. Standing

To establish that the court has subject matter jurisdiction,

the plaintiff has the burden of proving by a preponderance of the
evidence that it has standing to sue. See Lujan v. Defenders of
Wildlife, 504 U.S. 555, 561 (1992).

One co-owner acting alone lacks standing and must "join as

plaintiffs all co-owners" of the patent. Ethicon, 135 F.3d at 1467
(citing Waterman v. Mackenzie, 138 U.S. 252, 255 (1891)). In
addition,

any co-owners must ordinarily consent to join

an

infringement suit and cannot be joined involuntarily under Federal

Rule of Civil Procedure 19. See STC.UNM v. Intel Corp., 754 F.3d

940, 945-46 {Fed. Cir. 2014). In Ethicon, the Federal Circuit
characterized

this

standing

requirement

as

"a

matter

of

substantive patent law," which gives "one co-owner...the right to

impede the other co-owner's ability to sue infringers by refusing
to voluntarily join in such a suit." 135 F.3d at 1468 (citing 35
U.S.C. §262). The rule protects alleged infringers from being

subject to multiple lawsuits, and potentially conflicting rulings

and judgments. See IpVenture, Inc. v. Prostar Computer, Inc., 503
F.3d 1324, 1325 (Fed. Cir. 2007) (citing Indep. Wireless Tel. Co.
V. Radio Corp. of Am., 269 U.S. 459, 468 (1926)).
C. Interpretation of Patent Assignments

Patent

owners

may

assign

or

transfer

their

ownership

interests in a patent as personal property. See 35 U.S.C. §261.
Section 261 provides that patents "shall be assignable in law by
an instrument in writing" which may "take the form of a patent

license or any other written instrument that transfers patent

rights." Morrow v. Microsoft Corp., 499 F.3d 1332, 1337 n. 3 (Fed.
Cir.

2007). "State

transfers

of

law

property

governs

rights,

contractual

including

obligations

those

relating

and

to

patents." Regents Of Univ. Of New Mexico v. Knight, 321 F.3d 1111,
1118 (Fed. Cir. 2003). "[The Federal Circuit] treats an agreement

granting patent rights as a contract and interpret[s] its terms
consistent with the choice of law provision in the agreement in

question." Diamond Coating Techs., LLC v. Hyundai Motor Am., 823
F.3d 615, 618 (Fed. Cir. 2016).

In this case, the relevant Agreements state that New Jersey

law governs their terms. See Exhibit A to the Declaration of
Kenneth Dow (Docket No. 27-1) at 3, 6, 10, and 14 of 15. In

interpreting a contract under New Jersey law, the court must
"discern and implement the common intention of the parties."
McMahon v. City of Newark, 195 N.J. 526, 546 (2008). However, "a

contracting party is bound by the apparent intention he outwardly
manifests to the other contracting party. To the extent that his

real,

secret

intention

differs

therefrom,

it

is

entirely

immaterial." Frangella v. Frangella, 2013 WL 4792863, at *5 (N.J.

Super. Ct. App. Div. 2013). Therefore, the court's role is to
"consider what is written in the context of the circumstances at

the time of drafting and to apply a rational meaning in keeping
with the expressed general purpose." McMahon, 195 N.J. at 546

(emphasis added). "The quest is for the reasonably certain meaning
of the language used, taken as an entirety, considering the
situation

of

the

parties,

the

attendant

circumstances,

the

operative usages and practices, and the objects the parties were

striving to achieve." George M. Brewster & Sion, Inc. v. Catalytic
Constr. Co., 17 N.J. 20, 32 (1954); accord Manahawkin Convalescent

V. O'Neill, 217 N.J. 99, 118 (2014)("Courts enforce contracts based
on the intent of the parties, the express terms of the contract.

surrounding

circumstances

and

the

underlying

purpose

of

the

contract.")•

"When the terms of [a] contract are clear," the court must

"enforce it as written and not...make a better contract for either

of the parties," as "the parties are entitled to make their own
contracts." McMahon, 195 N.J. at 545-46. A contract is not "clear"

and is instead ambiguous "if its terms are susceptible to at least
two reasonable alternative interpretations, or when it contains

conflicting terms." Woodhaven Lumber & Millwork, Inc. v. Monmouth
Design & Development Co., Inc., 2014 WL 1326994, at *6 (N.J. Super.

Ct. App. Div. 2014); 5907 Blvd. L.L.C. v. W. N.Y. Suites, L.L.C.,
2013 WL 3762695, at *4 (N.J. Super. Ct. App. Div. 2013). If the

contract

is

ambiguous,

the

court

must

give

the

contracting

"parties' practical construction of the contract...controlling
weight in determining a contract's interpretation." Cty. of Morris
V. Fauver, 153 N.J. 80, 103 (1998).
"To

discover

determine

the

whether

intention

of

a

contract

the

is

ambiguous," and "to

parties," courts

may

consider

evidence outside the text of the contract. Franqella, 2013 WL

4792863, at *5 (citing Conway v. 287 Corp. Ctr. Assocs., 187 N.J.

259,

268-69

(2006)).

Such

extrinsic

evidence

includes

"the

circumstances leading up to the formation of the contract, custom,

usage, and the interpretation placed on the disputed provision by
the parties' conduct." Conway, 187 N.J. at 268-69.

The use of extrinsic evidence to determine whether a contract

is ambiguous, as well as to resolve ambiguity once it is found, is
consistent with federal common law. See Frangella, 2013 WL 4792863

at ^5 (citing In re Teamsters Indus. Emp. Welfare Fund, 989 F.2d
132, 135 (3d Cir. 1993)). In In re Teamsters, the Third Circuit

explained

that

under

"traditional

rules

of

contract

interpretation:"
To decide

whether a

contract is ambiguous, we do not

simply determine whether, from our point of view, the
language is clear. Rather, we hear the proffer of the
parties and determine if there [are] objective indicia
that, from the linguistic reference point of the parties,
the terms of the contract are susceptible of different

meanings.
existence

Before
or

making

absence

a

of

finding

ambiguity,

concerning
we

consider

the
the

contract language, the meanings suggested by counsel, and
the

extrinsic

evidence

interpretation.

See

offered

also

Contracts §223 cmt. b

in

support

Restatement

of

(Second)

each

of

(1981)("There is no requirement

that an agreement be ambiguous before evidence of a course
of dealing can be shown, nor is it required that the
course of dealing be consistent with the meaning the

agreement would have apart from the course of dealing").
Extrinsic evidence may include the structure of the
contract, the bargaining history, and the conduct of the

parties

that

reflects

their

understanding

of

the

contract's meaning.
989 F. 2d at 135 (citations omitted).

In Atl. N. Airlines v. Schwimmer, the New Jersey Supreme Court

cautioned that even though extrinsic evidence of the parties'

intent may reveal and

resolve

ambiguity in

the contractual

language, the court may not use such evidence to rewrite a contract
whose terms are clear:

10

The admission of evidence of extrinsic facts is not for

the purpose of changing the writing, but to secure light

by

which

evidence

to

measure

is

adducible

its

actual

only

significance.

for

the

Such

purpose

of

interpreting the writing—not for the purpose of
modifying or enlarging or curtailing its terms, but to
aid in determining the meaning of what has been said. So
far as the evidence tends to show, not the meaning of

the writing, but an intention wholly unexpressed in the
writing, it is irrelevant.

12 N.J. 293, 301 (1953); see also Cnty. Of Morris, 153 N. J. at

103

("Where

both

parties

to

a

contract

have

erred

in

the

construction of that contract, courts will generally not require

that the parties continue in that mistaken construction, but will
instead

insist on

a

return

to the

written

provisions of the

contract.").

Nevertheless, the contractual text "should not be construed

[so] literally...as to defeat the probable intention of the

parties; rather, particular words or clauses may be qualified by
the context and given the meaning that comports with the probable
intention." Kolbe v. BAG home Loans Servicing, LP, 738 F. 3d 432,
439-40 (1st Cir. 2013)(quoting Simonson v. Z Cranbury Assocs.

P'ship, 149 N.J. 536, 540 (1997)). "Semantics cannot be allowed to
twist and distort [the words'] obvious meaning in the minds of the

parties." Conway, 187 N.J. at 269-70. Similarly, "words and phrases
are

not to

be

isolated

but

related

to

the

context and

the

contractual scheme as a whole, and given the meaning that comports

with the probable intent and purpose; and thus the literal sense

11

of terms may be qualified by the context." Newark Publishers' Ass'n
V. Newark Typographical Union, No. 103, 22 N.J. 419, 426 (1956).
IV.

THE CONTRACTS AT ISSUE

Four of the inventors of the '083 Patent, Epstein, Marsh,

Monsell, and Ozturk executed the Agreements at issue during their

employment with Centocor and before the '083 Patent issued.^ The
Agreements are Exhibit A to the declaration of Kenneth Dow (Docket
No. 27-1).4

All

the

Agreements

contain

an

assignment

provision

identifying "the COMPANY" as the assignee of inventions conceived
in

the

course

of

the

inventor's

employment.

The

assignment

provisions are identical and state, in relevant part:
I

to

disclose

INVENTIONS ^

agree

conceived

promptly
or

made

to
by

the

COMPANY

me...during

all
my

employment with the COMPANY, and related to the actual
or anticipated business or activities of the COMPANY, or
related

to

its

actual

or

anticipated

research

and

3 The parties do not dispute that plaintiffs have demonstrated a
chain of title between Centocor and Janssen, and consequently that

anything previously assigned to Centocor is owned by Janssen. The
parties also do not dispute, and the court finds, that Joseph
Horowitz and Susan Lenk assigned their rights to the '083 Patent

to Janssen. See C.A. No. 15-10698 Docket Nos. 452-3, 452-6, and
495 at 31.

^ The parties agreed at the October 13, 2017 hearing that Epstein's

agreement is sufficiently representative of the others to be used
for the purposes of deciding the motion to dismiss. Unless
otherwise

noted,

all

citations

to

the

"Agreement"

refer

to

contract

as

Epstein's Agreement in Exhibit A to Dow's declaration.
3 "INVENTIONS"

are

identically

defined

in

each

"discoveries, improvements and/or ideas, whether patentable or
not." Dow Decl. Ex. A at 2 of 15.

12

development or suggested by or resulting from any task
assigned to me or work performed by me for, or on behalf
of, the COMPANY. I assign and agree to assign my entire
right, title and interest therein to the COMPANY.

Dow Deal. Ex. A at 2, 4, 8, and 12 of 15 {emphasis added).

Each of the Agreements includes the following provision
regarding the meaning of the term "the COMPANY":
As used in this Agreement:

The COMPANY means CENTOCOR^ and JOHNSON

any of their
acquirers, and

successors or
any of their

& JOHNSON and

assigns,
existing

purchasers,
and future

subsidiaries, divisions or affiliates, including any
such subsidiary, division or affiliate of Johnson &
Johnson to which I may be transferred or by which I may

be employed in the future. Affiliates of the COMPANY
are any corporation, entity or organization at least 50%
owned by the COMPANY, by Johnson & Johnson or by any
subsidiary of Johnson & Johnson.
Id.

The term "the COMPANY" is used throughout the Agreements,

including in several confidentiality and non-compete provisions.
For example, the confidentiality provision in each Agreement
states that the inventors:

recognize that CONFIDENTIAL INFORMATION is of great value
to the COMPANY...and that the disclosure to anyone not
authorized to receive such information...will cause

immediate irreparable injury to the COMPANY. Unless I
first secure the COMPANY'S written consent, I will not

disclose,

use,

disseminate,

lecture

upon

or

publish

CONFIDENTIAL INFORMATION. I understand and agree that my

obligations not to disclose, use, disseminate, lecture

6 The Marsh and Ozturk agreements contain a comma here. However,
the court does not consider this difference material to its
conclusions,

13

upon or publish CONFIDENTIAL INFORMATION shall continue
after termination of my employment for any reason.

Id. at 15. Epstein and Monsell's Agreements define "CONFIDENTIAL
INFORMATION" to include "information disclosed to me or known by

me as a result of my employment by the COMPANY, not generally known
to the trade or industry in which the COMPANY is engaged, about

the

products,

processes,

technologies,

machines,

customers,

clients, employees, services and strategies of the COMPANY." Dow
Decl. at 2 & 4 of 15. The Agreements of Ozturk and Marsh contain
definitions that are identical in all material respects.'' Id. at 8
& 12 of 15.

V.

ANALYSIS

As indicated earlier, the Agreements assign patent rights,

which include the rights to the *083 Patent, to "the COMPANY,"

which is defined, in pertinent part, as (1) Centocor "and" (2)

J&J, "and" (3) "any" of the J&J Family Companies, "including any"

company in the J&J Family which may employ the inventor in the
future. Defendants argue that this language assigns the rights to

the '083 Patent not just to Centocor, but to J&J and the entire
J&J

Family,

Ozturk's

which

and

includes more than

Marsh's

Agreements

200 companies.

protect

Janssen

information

"of

affiliates of the COMPANY," s^ Dow Ex. A at 8, 12 of 15, which
Janssen has argued implies that "the COMPANY" at least sometimes
excludes

J&J

affiliates.

However,

because

the

reference

to

"affiliates" does not appear in Epstein or Monsell's Agreements,
the court is not relying on it.

14

contends that, in the context of the assignment provision, "the
COMPANY" means the entity that employed the inventor when he or
she "conceived or made" the invention—in this case Centocor.

The court finds that "the express terms of the contract" are

ambiguous, and Janssen's interpretation is most consistent with
"the intent of the parties" as discerned from the "surrounding
circumstances." Manahawkin, 217 N.J. at 118. In particular, the

"the

interpretation

placed

on

the

[assignment]

provision

by

the...conduct" of the inventors, Janssen, and the rest of the J&J

Family manifest their intent to assign the '083 Patent to Centocor,
and therefore Janssen, alone. Conway, 187 N.J. at 268-69.

The Agreements are poorly drafted and do not clearly identify
the intended assignee of the rights at issue. The assignee, "the
COMPANY," is defined to include not only Centocor, but also J&J

and "any" of the J&J Family Companies. "Any" may have at least two

meanings. The parties agree that "any" sometimes means "all" or

"every." For example, "Any attempt to flout the law will be

punished," or "You are required to produce any documents relating
to the issue." See Bryan A. Garner, Garner's Modern Usage (3d Ed.

2009) at 52 (2015 Action Docket No. 521-2)("Garner"). However, "in

a sentence implying that a selection or discretionary act will
follow, it may mean 'one or more (unspecified things or people);
whichever; whatever," to be specified later. Garner at 52; see
also First Bank & Trust v. Firstar Info. Servs. Corp., 276 F.3d

15

317, 325 (7th Cir. 2001); Black's Law Dictionary 94 (6th ed.
1990)), In the definition of "the COMPANY," "any" J&J Family

Company could reasonably be construed to mean "one or more" such
companies, to be specified further in another provision. Moreover,

the assignment provision, which refers to "inventions conceived or
made by me during my employment with the COMPANY," implies that
"the COMPANY" means the inventor's employer.

Even if "any" means "one or more," "the COMPANY" is still
defined

as

"Janssen

and

J&J

and

any

[J&J

Family

Company]."

Agreement at 1 (emphasis added). Interpreted literally, therefore,
the term "the COMPANY" includes at least two entities—Janssen and

J&J. As defendants argue, "if the drafter wanted "COMPANY" to mean

only the employer or subsequent employers," and not to include
J&J, he "could have easily done so in just those words..." Defs'
Memo, at 10 (citing Assisted Living Assocs. of Moorestown, L.L.P.
V. Moorestown Twp., 31 F. Supp. 2d 389, 400 (D.N.J. 1998)).

However, if "the COMPANY" means Centocor and J&J, at minimum,
this definition conflicts with the meaning implied in various other

provisions of the agreement. The last sentence of the definition
of "the COMPANY" defines "affiliates of the COMPANY" to mean "any

corporation, entity or organization at least 50% owned by the
COMPANY, by Johnson & Johnson or by any subsidiary of Johnson &
Johnson." Agreement at 1. This definition of "affiliates" suggests
that "the COMPANY" does not include J&J and its subsidiaries, or

16

always include them. If "the COMPANY" included, or always included,
J&J and its subsidiaries, the clause could have easily ended at

"the COMPANY," to read "any corporation, entity or organization at
least 50% owned by the COMPANY."

Interpreting
subsidiaries

would

the

"the

render

COMPANY" to
the

additional

include

J&J

references

and
to

its

those

entities redundant and violate the "cardinal principle that each

term of a contract should be given meaning so that no term is

superfluous." Dubrosky v. Colonial Life & Acc. Ins. Co., 129 F.
App'x 691, 693 (3d Cir. 2005). Contracts, like statutes, are
sometimes drafted with redundancy to remove doubt or potential

ambiguity. See TMW Enter., Inc. v. Fed. Ins. Co., 619 F.3d 574,
578 (6th Cir. 2010); cf. Marx v. General Revenue Corp., 133 S. Ct.

1166, 1176 (2013). However, in this case, the definition of
affiliates does not remove any ambiguity. Rather, by including the
reference to J&J and its subsidiaries, the drafters did not use

obvious alternative language that would have made the definition
of "the

COMPANY" more

clear

and

consistent

with

defendants'

interpretation of the contract. Cf. Advocate Healthcare Network v.
Stapleton, 137 S. Ct. 1652, 1659 (June 5, 2017) ("When legislators

do

not

adopt

'obvious

alternative'

language,

'the

natural

implication is that they did not intend' the alternative. ).
Therefore, the reference to J&J and its subsidiaries in the

17

definition of "affiliates" creates ambiguity rather than resolving
it.

In

addition,

as

indicated

earlier,

in

the

assignment
I

provision, the employee agrees to assign to "THE COMPANY" any
invention made by the employee "during [his] employment with the
COMPANY." See Agreement at 1. The inventors were employed only by
Centocor. See Dow Decl. Ex. B at 4 of 26. Defendants do not contend

that they had an employment relationship with J&J, or that the

Agreements created one. Therefore, while the first sentence of the
definition of "the COMPANY" literally includes both Centocor and

J&J, the language of the assignment provision suggests that the
term "the COMPANY" means only the inventor's employer.
As the literal definition of "the COMPANY" conflicts with the

sense in which the term is used in at least two provisions of the

contract,

including

the

assignment

provision,

the

term

is

ambiguous. See Woodhaven Lumber, 2014 WL 1326994, at *6; 5907 Blvd.
L.L.C., 2013 WL 3762695, at *4. In view of the conflicting

provisions, this ambiguity is not created by a "tortured" reading
of the language. 259 Holdings Co., LLC v. Union Dry Dock & Repair

^., 2007 WL 3274272, at *3 {N.J. Super. Ct. App. Div. Nov. 7,
2007). Rather, conflicting language in the Agreement makes it
ambiguous.

As explained earlier, when a contract's written terms are

ambiguous, the contracting parties' common understanding of the

18

agreement has "controlling weight." Cnty. of Morris^ 153 N.J. at
103. "Where there is no dispute between the contracting parties
about which of two reasonable interpretations of their agreement

is correct, the parties' shared understanding...govern[s]—barring
some collateral reason to depart from ordinary principles." Kolbe,
738 F. 3d at 459. The parties' "shared understanding" can be

determined from the parties' "custom[s]" and "the interpretation

placed

on

the

disputed

provision

by

the

parties'

conduct"

concerning the agreement. Conway, 187 N.J. at 268-69.
The

extrinsic

evidence

establishes

that

the

inventors,

Janssen, and the other companies in the J&J Family understand the

Agreements to have assigned the '083 Patent to Centocor, and
therefore to Janssen, alone. Janssen customarily treats patent

rights as being owned only by the inventor's employer, rather than
by J&J or the entire J&J Family. Janssen's patent databases show
that all of its patents are assigned either to Janssen alone or to
Janssen and one other entity that was involved in the invention.
See Dow Decl. Ex. I. In addition, J&J's lead employment counsel,

Anne Martinson, revised J&J's standard employment agreement in

2008, before this litigation began, to provide clearly that
inventions are assigned only to the inventor's employer. See

Martinson Dep. at 154—155. She used three terms: (1) "COMPANIES,
defined as "all" J&J Family companies; (2) "COMPANY," defined as

"any of the COMPANIES;" and (3) "EMPLOYER," defined in Centocor

19

agreements as Centocor "or, if applicable, any other COMPANY by
which you are (or were) employed at the time an issue arises under
this agreement." Def. Ex. 10 (Sealed Docket No. 18-5) at 2 of 8.
Patent rights are assigned to the inventor's "EMPLOYER" rather
than to the "COMPANY" as they were in the pre-2008 version of the

standard agreement. Id. at 3 of 8. The confidentiality provision
covers "information about the business of any COMPANY." Id. at 34 of 8. Martinson testified that these changes reflected J&J's
custom. See Martinson Dep. at 154-55, 182.

The practices of one contracting party in performing a
contract are not always consistent with the parties' shared intent.

For example, in Gabriel v. Jackson Life Ins. Co., this court found
that an insurance company's consistent practice of "overstating

the premium payments necessary to keep coverage in force" was a
breach of contract and a violation of Massachusetts General Laws,

Chapter 93A. S^ 2015 WL 1410406, at *1, 11, 18 (D. Mass. Mar. 26,
2015).

In this case, however, the evidence demonstrates that both

parties shared a common understanding. More specifically, the
evidence regarding the inventors' intent shows that they, like
Centocor and Janssen, understood the Agreements to have assigned

patent rights, including the rights to the '083 Patent, to Centocor
alone.

First,

the '083 Patent

states

that

the

assignee

is

"Centacor, Inc." and does not include J&J or other members of the

20

J&J Family. Compl.

Ex. A. Second, as indicated earlier, the

Agreements required the inventors "to disclose promptly" to "the
COMPANY

all

INVENTIONS

conceived

or

made

by

me...during

my

employment with the COMPANY." Agreement at SIl. The inventors of
the '083 patent complied

with

this disclosure obligation

by

submitting an invention disclosure to Centocor alone in May 2004.
Dow

Decl. Ex. B. The disclosure is on Centocor letterhead, is

addressed to Kenneth Dow in his capacity as "V.P. Patent Law,

Centocor," states that it is "Centocor confidential information,"
and identifies the inventors as Centocor employees. See id. Third,

the Agreement also required that the

employees "execute

any

applications, assignments or other instruments which the COMPANY
shall consider necessary to apply for and obtain Letters Patent."

Agreement at S13. The inventors executed several such assignments
to Centacor or Janssen alone, and never to J&J or any other company

in the J&J Family. This indicates that they understood their

obligations to be only to Centocor or Janssen. Dow Decl. Exs. CH.

Finally, there is no evidence that the other members of the
J&J

Family,

which

under

defendants' interpretation

would be

intended beneficiaries of the Agreements as assignees, have ever

asserted any rights to the '083 Patent or any invention conceived

by the inventors. J&J and companies in its Family were on notice
that the '083 Patent stated that Centocor was the only assignee.

21

According to Janssen's patent database this was consistent with
the practice concerning inventions by employees of Centocor or
Janssen. See Dow Decl. Ex. I. As explained earlier, J&J recently

entered into an agreement with Janssen stating that it "has never

asserted any ownership rights in the '083 patent..." and that none
of the J&J Family of Companies "has or will assert any ownership

rights to the '083 patent."C.A. No. 15-10698, Docket No. 521-7.
Defendants

have

not

presented

any

evidence

rebutting

these

assertions.

As defendants argue, in at least eleven other cases, J&J

and/or other companies in the J&J Family have interpreted "the
COMPANY,"

as

used

in

the

confidentiality

and

non-compete

provisions of similar or identical agreements, to include J&J
and/or certain of its subsidiaries. See App'x A to Def. Memo

(Docket No. 18-1); App'x C to Def. Supp. Br. (Docket No. 52-1). As
indicated

earlier,

the

confidentiality

provision

protects

information "disclosed to [the employee] as a result of [his]

employment with the COMPANY, not generally known to the trade or
industry in which the COMPANY is engaged, about the products,
processes, technologies, machines, customers, clients, employees,
services and strategies of the COMPANY" disclosure of which it
asserts "will cause immediate irreparable injury to the COMPANY."

Agreement at 1 & SI5. In these cases, J&J and/or J&J Family
companies

in

addition

to

the
22

employer

alleged

that

their

confidential information was protected under these provisions and

that they were entitled to enforce them. App'x A to Def. Memo
{Docket No. 18-1); App'x C to Def. Supplemental Br. (Docket No.

52-1). The positions taken in these cases provide some support for
defendants' assertion that "the COMPANY" as used in the Agreements
means more than just Centocor.

Defendants argue that because Janssen's parent company has

adopted this interpretation of "the COMPANY" in one section of the
contract, Janssen cannot claim that it has a different meaning in

the

assignment

provision.

The

"principle[]

of

statutory

construction is that identical words used in different parts of
the same act are intended to have the same meaning" is "equally

applicable" to a contract, "particularly when the contract under
consideration is [] clearly the product of careful lawyering on
both sides." Celanese Ltd. v. Essex Cty. Improvement Auth., 962

A.2d 591, 601 (N.J. Super. Ct. App. Div. 2009). However, in this
case there is no evidence that the inventors had counsel or that

the Agreements were the result of careful lawyering. Rather, the
court finds that they were poorly drafted. In any event, "the

presumption of consistent usage 'readily yields' to context, and
a statutory [or contractual] term—even one defined in the statute

[or contract] —may take on distinct characters from association
with distinct statutory [or contractual] objects calling for

different implementation strategies." Util. Air Regulatory Group

23

V. EPA, 134 S. Ct. 2427, 2441 (2014); see also Robinson v. Shell
Oil Co., 519 U.S. 337, 343-44 (1997). As explained earlier, the

language

of

assignment

provision

and

the

extrinsic

evidence

persuades the court that, at least for the purposes of patent
assignments, "the COMPANY" means only Centocor and its successor
Janssen.

Assuming, without finding, that "the COMPANY" should be given

a

single

consistent

meaning

throughout

the

Agreement,

the

positions taken by J&J and/or companies in its Family in the other
cases do not compel the conclusion that the term refers to all of

the companies in the J&J Family. Those suits were brought by J&J
or J&J subsidiaries other than Janssen. The positions of companies

in the J&J Family other than Janssen in other cases is not

necessarily inconsistent with Janssen's position in this case. As
indicated

earlier,

provisions

the

protecting

other

cases

"CONFIDENTIAL

were

brought

INFORMATION,"

to

or

enforce

secret

information "disclosed to [the employee] as a result of [his]

employment

with

the

COMPANY...about the

products,

processes,

technologies, machines, customers, clients, employees, services
and strategies of the COMPANY." Agreement at 1. This definition
can be reasonably interpreted to cover information that also

belongs to J&J Family companies in addition to the employer. Such
information

could

include

information

24

about

the

employer's

products that also belongs to a company in the J&J Family company
which jointly developed the product.

Indeed, this was alleged to be the case in DePuy Spine, Inc.
and Johnson and Johnson Regenerative Therapies v. Stryker Biotech

LLC and Joseph Ross, Suffolk Super. Ct. C.A. No. 07-1464 (Docket
No.

15-3

companies

at

in

9-10).

In

the

DePuy

J&J

Spine,

Family—DePuy

the

plaintiffs

Spine,

which

were

two

was

the

individual's employer, and another company, JJRT. It was alleged

that "DePuy Spine's product development work is performed by

[plaintiff non-employer] JJRT," which "works in partnership with
the

J&J

operating

companies,

performing

the

research

and

development work necessary to bring products through FDA or other

required regulatory approval," Id. The plaintiffs in DePuy Spine
cited the "broad[]" definition of "CONFIDENTIAL INFORMATION" to

support their assertion that the Agreements protected information
about products that DePuy and JJRT were jointly developing and
strategies concerning those products. Id. at 8, 10-16. Therefore,
the position of the other companies that the Agreements protect
their confidential information, as well as the employer's, is not

necessarily

inconsistent

with

Janssen's

position

that

the

COMPANY" means only the employer. In any event, the conduct of

other companies concerning other cases is not evidence of Janssen's
customary practice or intent concerning the Agreement.

25

Finally, while defendants identified eleven cases in which a

company in addition to the individual's employer brought suit,
Janssen has presented unrebutted testimony that the vast majority
of the suits seeking to enforce similar or identical employment

agreements have been brought only on behalf of the individual's
employer. See Martinson Dep. at 354-55.^
In view of the forgoing, the court finds that the contracting

parties'

subsequent

actions

resolve

the

ambiguity

in

the

assignment of patents provision and, for the purposes of that

provision,

"the

COMPANY"

conclusion is in tension

COMPANY,"

which

refers

means

Centocor

alone.

While

this

with the literal definition of "the

to

Centocor

"and"

J&J,

a

"[d]isproportionate emphasis upon a word or clause or a single

provision does not serve the object of interpretation." Borough of
W. Caldwell, 138 A.2d at 410. Particular "words or clauses" in the
text "should not be construed literally...as to defeat the probable

^ In addition, defendants have submitted two letters written by
Janssen's Human Resources Manager, on behalf of Janssen, to two

departing employees. In them, Janssen writes that the employee
secrecy agreements created confidentiality obligations to "the
Johnson and Johnson family of companies." See Defs. Exs. 10 & 11
(Docket Nos. 18-5 & 18-6). However, the positions in these letters
are also not necessarily inconsistent with Janssen's position here
because, as explained earlier, the confidentiality provisions can
be reasonably interpreted to protect the information of other

companies in the J&J family. In any event, the evidence in favor
of Janssen's interpretation outweighs any inference that can be
drawn from these two non-public letters to particular employees.

26

intention of the parties; rather, [they] may be qualified by the

context and given the meaning that comports with the probable
intention." Simonson, 149 N.J. at 540. In light of the extrinsic
evidence that the inventors, Centocor, and J&J each understood the

ambiguous Agreements to assign patent rights solely to Centocor,
the court finds that Janssen is the only owner of the '083 Patent.

Therefore, the court has jurisdiction concerning this case. See
Ethicon, 135 F.3d at 1467.

This conclusion is not, as defendants argue, altered by the

doctrine of judicial estoppel. "As a general matter, the doctrine

of judicial estoppel prevents a litigant from pressing a claim
that is inconsistent with a position taken by that litigant either

in a prior legal proceeding or in an earlier phase of the same

legal proceeding." InterGen N.V. v. Grina, 344 F.3d 134, 144 (1st
Cir. 2003) (citing Pegram v. Herdrich, 530 U.S. 211, 227 n.8

(2000)) (emphasis added). "The doctrine is designed to ensure that

parties proceed in a fair and aboveboard manner, without making
improper use of the court system." Id. (citing New Hampshire v.
Maine, 532 U.S. 742, 749-50 (2001)). "The contours of the doctrine

are hazy, and there is no mechanical test for determining its
applicability." Alternative System Concepts, Inc. v. Synopsys,

Inc., 374 F.3d 23, 33 (1st Cir. 2004). "Because the rule is

intended to prevent improper use of judicial machinery judicial

estoppel is an equitable doctrine invoked by a court at its
27

discretion." New Hampshire v. Maine, 532 U.S. 742, 749-51 {2001)
(internal quotation marks and citation omitted).

The Supreme Court has identified three factors that courts
should

consider

in

determining

whether

to

exercise

this

discretion:

First,

a

party's

later

position

must

be

clearly

inconsistent with its earlier position. Second, courts

regularly inquire whether the party has succeeded in
persuading a court to accept that party's earlier
position, so that judicial acceptance of an inconsistent
position in a later proceeding would create the
perception that either the first or the second court was
misled...A

third

consideration

is

whether

the

party

seeking to assert an inconsistent position would derive
an unfair advantage or impose an unfair detriment on the
opposing party if not estopped.

Id. (citations omitted). The Court cautioned, however, that "[i]n

enumerating

these

prerequisites or

factors,

an

we

do

not

establish

exhaustive formula for

inflexible

determining the

applicability of judicial estoppel. Additional considerations may
inform the doctrine's application in specific factual contexts."
Id.

It is doubtful that the doctrine of judicial estoppel is
relevant in this case.

Neither Janssen nor Centocor was a party

to any of the eleven prior suits on which defendants rely to invoke
the doctrine.

"[A] party against whom judicial estoppel is

invoked, typically, must be the same party who made the prior
inconsistent representation." Knowlton v. Shaw, 704 F.3d 1, 10
(1st Cir. 2013).

28

The

First

Circuit

has

recognized,

however,

that "courts

sometimes have allowed judicial estoppel when the estopped party

was responsible in fact for the earlier representation or when the

estopped party was the assignee of a litigation claim or assumed

the original party's role." Perry v. Blum, 629 F,3d 1, 9 {1st Cir.
2010) (internal citations omitted). In this case there is no
evidence that Janssen, rather than J&J or other companies in its

Family, was "responsible in fact" for the positions taken by other

companies in other cases.

Nor is Janssen the assignee of any of

the litigation claims on which defendants rely.

Nevertheless,

applicable

because

defendants

contend

that

there is

evidence

that

the

doctrine

Janssen's

is

parent

company, J&J, is controlling Janssen in this litigation and also
controls all litigation concerning similar or identical employment

agreements brought by companies in the J&J Family, including the
03_0ven prior cases on which defendants rely. Most of the authority
defendants cite in support of this proposition, however, is

inapposite. For example, several of the cases that defendants cite
involve situations in which the estopped party was the legal

successor to the party that had taken an inconsistent position in

a prior litigation. See, e.g., Milton H. Greene Archives, Inc. v_^
Marilyn Monroe LLC, 692 F.3d 983, 998 (9th Cir. 2012) (estopped

party

was

beneficiary

of estate

29

whose

executor

had taken

inconsistent position in prior litigation).®

Another case cited

by defendants involve an estopped party that had controlled the

prior litigation. See, e.g., Lia v. Saporito, 541 F. App'x 71, 73
(2d Cir. 2013) (estopped party was sole owner of entity that took
inconsistent position in prior case).
There are some cases in which a party has been estopped

because it was controlled by an entity that took the inconsistent

position in the prior case. See Patriot Mfg. LLC v. Hartwig, Inc.,
996 F. Supp. 2d 1120, 1127 (D. Kan. 2014) (estopped party was

controlled by entity that took inconsistent position in earlier

litigation); Raizberq v. JV CJSC Gulfstream Sec. Sys., 2013 WL
1245545, at *6 (S.D.N.Y. Mar. 26, 2013) (estopped party was owned

by individual who took inconsistent position).

Neither of these

® See also Mathison v. Berkebile, 988 F. Supp. 2d 1091, 1103 (D.S.D.

2013) (warden estopped because of inconsistent position taken by
warden who had preceded him); Nat'l Union Fire Ins. Co. v. Allfirst
Bank, 282 F. Supp. 2d 339, 348 (D. Md. 2003) (subrogee was estopped
because subrogor took inconsistent position in prior litigation);
Capsopoulos on Behalf of Capsopoulos v. Chater, No. 95 C 3274,
1996 WL 717456, at *2 (N.D. 111. Dec. 9, 1996) (party seeking
social security survivor benefits estopped by inconsistent

position taken by decedant); In re 815 Walnut Assocs., 183 B.R.
423, 431-32 (Bankr. E.D. Pa. 1995) (assignee of claim estopped
because owners of assignor took inconsistent position in prior
litigation).

10 Defendants also cite Ladd v. ITT Corp., 148 F.3d 753 (7th Cir.

1998) in support of their "controlling" entity argument. That
case, however, held that judicial estoppel did not apply to the
defendants because they were not parties in the prior litigation,
even if the doctrine's purpose would be served if it were applied.
Id. at 756.

30

district court decisions in other circuits are consistent with the

only two situations in which the First Circuit has held that
judicial estoppel may apply to litigants that were not parties in
the prior cases: "when the estopped party was responsible in fact
for the earlier representation or when the estopped party was the

assignee of a litigation claim or assumed the original party's
role." Perry, 629 F.3d at 9 {internal citations omitted).
Defendants cite only a

single

First Circuit case, In

re

Colonial Mortg. Bankers Corp., 324 F.3d 12 (1st Cir. 2003), in

support of their argument that Janssen may be estopped based on
positions taken by J&J.

That case, however, concerned res

judicata, not judicial estoppel. Id. at 16. The court held that
res judicata could apply to a litigant that was not a party to the

prior litigation. Id. at 17. However, the court based its holding
on the fact the estopped party and the party in the prior

litigation "were treated as a single entity throughout the earlier
litigation, and neither of them disputed that characterization."
Id.

No similar circumstances exist here or in any of the eleven

prior lawsuits relied upon by defendants. In re Colonial Mortg.
Bankers Corp. is, therefore, inapposite.

Even if Janssen could be estopped by the positions taken by

J&J or other companies in its Family in other cases, the court

would not find the requirements for estoppel to be satisfied.

Janssen*s position that, for the purpose of the

31

assignment

provision, "the COMPANY" means the "Employer" is not "clearly
inconsistent"

with

the

positions

taken

by

J&J

affiliates

concerning non-compete and confidentiality provisions in other
cases.

Perry, 629 F.3d at 9.

Nor have defendants shown that any

court adopted or relied upon a previous inconsistent position
concerning the assignment provision asserted by a company in the

J&J Family.

Id. at 11-12.

In view of these facts and the fact

that Janssen was not a party in the other cases, Janssen will not
derive an unfair advantage if not estopped. See RFF Family P'ship,
LP V. Ross, 814 F.3d 520, 528 (1st Cir. 2016).

Moreover, judicial estoppel is an equitable, discretionary
doctrine.

New Hampshire, 532 U.S. at 750 (internal citations

omitted); Guay, 677 F.3d at 16 (1st Cir. 2012) (internal citations
omitted). The court finds that even if it had discretion, the

©quities do not favor finding Janssen is estopped from asserting
it is the sole owner of the '083 Patent. This case concerns the

enforcement of patent rights that are evidently worth hundreds of
millions of dollars. Patent

rights

encourage

innovation

and,

therefore, serve an important public interest. It would not be

equitable to estop Janssen from pursuing its patent claims because
of any inconsistent positions taken by other companies in the J&J
Family in employment cases brought against different defendants
and concerning contract provisions that are not at issue in this
case.

32

The final issue raised by the parties relates to the March 6,

2017 agreement between J&J and Janssen. As previously discussed,

that agreement states that neither J&J nor any company in the J&J
Family has ever had an ownership interest in the '083 Patent. See
C.A.

No.

15-10698

Docket

No.

521-7.

Janssen

argues

that

this

"disclaimer" provides an independent basis to find that it has
standing as the sole owner of the '083 Patent.
This issue is moot in view of the court's decisions that the

Agreements assigned the '083 Patent to Centocor alone, and that
Janssen is not estopped from advocating this conclusion. In the
interest of completeness, however, the court finds

argument unmeritorious.

Janssen's

The Federal Circuit has never held that

co-owners of a patent are not required to be joined as plaintiffs

if they disclaim their interest in the patent. Janssen relies

primarily on IpVenture, Inc. v. Prostar Computer, Inc., 503 F.3d
1324 (Fed. Cir. 2007). IP Venture involved the question of whether
a contract was an assignment of a patent or an agreement to assign
it. See id. at 1325-26.

The Federal Circuit held that the contract

was an agreement to assign. See id. at 1327. The court further
found that this interpretation was "reinforced" by a statement

made by the purported assignee that it never had any legal or
equitable rights to the patent at issue. Id. Therefore, the court
in IP Venture essentially considered the disclaimer as extrinsic

evidence supporting its interpretation of the agreement at issue.

33

IP Venture does not provide an alternative basis for finding that
Janssen has standing to bring this cases because the Agreements

assigned the '083 Patent to its predecessor Centocor alone.
VI.

CONCLUSION

In view of the foregoing, the court finds that the Agreements

assigned the inventors' patent rights to Centocor only. Janssen,
therefore, is the sole owner of the '083 Patent and has standing

to bring this case. The doctrine of judicial estoppel does not
alter this conclusion.

While the court finds that the March 6,

2017 agreement between J&J and Janssen does not provide a basis
for finding that Janssen has standing, that issue is moot.

In view of the forgoing, it is hereby ORDERED that defendants'
Motion to Dismiss (Docket No. 13) is DENIED.

UNITED STATES DISTRICT JUDGE

34