• Jumping to Conclusions

    by  • February 22, 2009 • patent

    One thing lawyers are good at is exploiting weaknesses. A recently-filed case in Delaware used an incorrect admission in an unrelated case as grounds for a motion to dismiss, claiming that the admission demonstrated that the plaintiff was not the actual owner of the patent. The defendant’s motion was ultimately unsuccessful, but a lot time and money were wasted and there were nervous attorneys somewhere.

    The relevant, much-disputed patent is U.S. Patent No. 4,868,112. The inventor, John J. Toole Jr., assigned the patent to Genetics Institute, Inc. (“GI”). The patent issued September 19, 1989. In 1996, American Home Products (“AHP”) completed the purchase of all shares of GI and it was held as a wholly-owned subsidiary of AHP. In 2002 AHP changed its name to Wyeth. In 2002, GI Inc. changed its entity type and name to GI, LLC and recorded the change with the PTO.

    In about 2002 there had been an interference proceeding involving the ‘112 patent. During the interference, the following statement was made:

    After the interference was decided in GI’s favor, it was appealed to the district court. Both Wyeth and GI were named as parties, because, as explained in the complaint, “the most recent written assignment recorded with the PTO shows GI, LLC as the assignee” but it was the plaintiffs’ belief that “at all times including and since the Board’s October 31, 2003 decision complained of herein, all right title and interest had resided in Wyeth alone.” The answer confirmed “Wyeth is the real party in interest and owner of all right, title and interest in the ‘112 patent.” The proceeding was later settled.

    But then GI, not Wyeth, sues for a declaration that the ‘112 patent has priority over two Novartis patents, in reaction to a patent infringement suit Novartis brought against Wyeth. Novartis makes hay with the admission in the earlier case, moving to dismiss on the basis that GI is not the owner of the patent.

    After what was undoubtedly many hours of sweating later, GI filed a declaration from an in house lawyer, stated that he searched the Wyeth legal records and that:

    Those files generally include corporate agreements relating to Wyeth and any existing or former subsidiaries of Wyeth (such as Genetics Institute, LLC and Genetics Institute, Inc.) and include agreements involving transfers of assets. Upon a search of those files, I found no transfer of any intellectual property assets from Genetics Institute, Inc. or Genetics Institute, LLC to Wyeth. Based on my search of those files, I conclude that at no time did Genetics Institute, Inc. or Genetics Institute, LLC transfer any of its intellectual property assets, which includes [the ‘112 patent] to Wyeth.

    I have also searched the minutes of the Board of Directors of Genetics Institute, Inc. and Genetics Institute, LLC and I found no authorization for a transfer of U.S. Patent No. 4,868,112 or any patent to Wyeth. The only authorization by the Board of Directors of Genetics Institute, Inc. or Genetics Institute, LLC for a transfer of assets to Wyeth that I found expressly excluded patents.

    The declaration included a copy of the board consent that ratified the transfer of assets but excluded the patents.

    The court held this was uncontroverted documentary evidence that GI was the owner of the ‘112 patent and denied the motion to dismiss. Hand slapping was not foregone, though:

    The court notes at this juncture that it is well aware of the fact that counsel for GI, LLC has taken one position before the PTO and the court in this case, and another before Judge Sleet in prior litigation. Although different local counsel appear to have been involved, plaintiff had the same lead counsel in both cases. Plaintiff characterizes its prior representations as simple misstatements, emphasizing that an August 2005 settlement agreement between GI, LLC, Wyeth, Genentech and Bayer, post-dating the statements at issue, acknowledges that GI, LLC owns the ‘112 patent. (D.I.11, ex. 9) Should discovery demonstrate that GI, LLC and Wyeth are engaged in a “shell game,” as defendant suggests, the court will revisit the issue in the context of a subsequent motion following jurisdictional discovery. For purposes of the record, the court does not find plaintiffs prior statement a “judicial admission,” as defendant argues, in view of the fact that it occurred in separate litigation. Plaintiff’s motion to file a sur-reply to defendant’s motion to address this issue (D.I.18) is denied.

    Genetics Institute, LLC v. Novartis Vaccines and Diagnostics, Inc., Civ. No. 08-290-SLR, 2009 WL 396073 (D. Del. Feb. 18. 2009).

    © 2009 Pamela Chestek