Free Response - District Court of Arizona - Arizona

O SBORN MALEDON
A PROFESSIONAL ASSOCIATION ATTORNEYS AT LAW

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The Phoenix Plaza 21st Floor 2929 North Central Avenue Phoenix, Arizona 85012-2794 P.O. Box 36379 Phoenix, Arizona 85067-6379 Telephone Facsimile 602.640.9000 602.640.9050

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William J. Maledon, No. 003670 Brett L. Dunkelman, No. 006740 Osborn Maledon, P.A. 2929 North Central Avenue Suite 2100 Phoenix, Arizona 85012-2794 (602) 640-9000 [email protected] [email protected] David H. Pfeffer Arnold I. Rady James W. Gould Morgan & Finnegan, LLP 3 World Financial Center New York, NY 10281-2101 (212) 415-8700 (212) 415-8701 John S. Campbell W. L. Gore & Associates, Inc. 551 Paper Mill Road Newark, Delaware 19714 Attorneys for W. L. Gore & Associates, Inc.

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2171290

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF ARIZONA ) ) ) ) ) ) ) ) ) ) ) ) ) W. L. Gore & Associates, Inc., ) Counterclaimant, ) ) v. ) Bard Peripheral Vascular, Inc., David Goldfarb, ) M.D., and C. R. Bard, Inc., ) ) Counterdefendants. ) ) ) Bard Peripheral Vascular, Inc., and David Goldfarb, M.D., Plaintiffs, v. W. L. Gore & Associates, Inc., Defendant. No.: CIV `03 0597 PHX MHM GORE'S RESPONSE TO PLAINTIFFS' OBJECTION TO GORE'S NOTICE OF (1) CORRECTION OF STATEMENT MADE AT THE CONCLUSION OF THE HEARING OF 6/18/08 AND (2) [ALLEGEDLY] NEW AUTHORITY RELATING TO PLAINTIFFS' LACK OF STANDING

Case 2:03-cv-00597-MHM

Document 829

Filed 07/02/2008

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I.

INTRODUCTION On December 11, 2007, Gore plainly told the Court that the standing issue

should be decided before judgment was entered. (Trial Tr. 12/11/2007 at p. 4095:310). The Court acknowledged this by stating that Gore's motion for standing was on the top of the pile (Trial Tr. 12/11/2007 at p. 4095:11-12). Realizing the weakness of its position, Plaintiffs now urge the Court to commit error by entering a judgment before deciding if it has the Constitutional power to do so. Plaintiffs have cited no case and we have found none that supports the notion that a court should -or even can ­ enter a final judgment before resolving a challenge to its Article III jurisdiction. Plaintiffs' hyperbole and boldface type cannot hide the conclusion that Bard Peripheral Vascular ("BPV") lacks standing because (1) there is no written transfer of C.R. Bard's exclusive license to BPV as the law requires; (2) the written amendment to the license does not cure the defect because it is merely an attempted confirmation not signed by C.R. Bard which under the Mars case is ineffective to confer standing; (3) even if an oral transfer of an exclusive license were legally sufficient (which it is not) Plaintiffs' allegation of an oral license is naked attorney argument without any support in the trial record; and (4) even if an oral or implied in fact license from C.R. Bard to BPV exists, at most it gives BPV a non-exclusive sublicense to make and sell (not a transfer of the exclusive license), which does not give BPV standing to sue on the `135 patent because it would not be the transfer of an exclusive license. When combined with (a) C.R. Bard's assertion in 1998 that it owned the patent by assignment from Dr. Goldfarb after the now-purported 1996 transfer to BPV and (b) the binding testimony of C.R. Bard's general counsel and secretary that such a transfer never took place, the undisputed facts leave no doubt that BPV does not have an exclusive license. BPV should therefore be dismissed from the case.

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II.

ARGUMENT
A.

There Is No Written Transfer Of The Exclusive License From C.R. Bard, Inc. To BPV, As The Law Requires

Plaintiffs repeatedly use bold face type to attempt to create a difference between assignment of title to a patent for standing and transfer of a written
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exclusive license tantamount to an assignment asserted for standing. The Patent
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Statute on its face rebuts this argument. Specifically, 35 U.S.C. § 261 states that
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"patents, or any interest therein, shall be assignable in law by an instrument in
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writing. The applicant, patentee, or assigns or legal representatives may in like
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manner grant and convey an exclusive right under his... patents... ." (emphasis
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added). Thus, a writing is needed both to assign title to a patent and to transfer an
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exclusive license to the patent, especially where the exclusive license is tantamount
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to an assignment.
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A writing was put in evidence for Dr. Goldfarb's grant of an exclusive
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license to C.R. Bard (PX 4) and Dr. Goldfarb's 2007 assignment of his title to the
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patent to BPV (PX 1476).1 But there is simply no written conveyance of C.R. Bard's exclusive license to BPV, as the law requires. Indeed, Mr. Flink, C.R.

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Bard's Inc.'s General Counsel and Secretary, testified after the purported transfer
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that BPV (IMPRA) was not the "designated licensee." (Doc. 652, pp. 2-3). In its
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1997 action against Gore, C.R. Bard flatly stated that it "owned" the pending
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application (for the `135 patent) (Ex. A, Complaint, Doc. No. 1 at ¶10, C.R. Bard,
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Inc. v. W.L. Gore & Assoc., No. 97-00517 (D.N.J. Jan 31, 1997)) by assignment
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from Dr. Goldfarb. (Ex. B, Declaration of Richard A. Flink, Doc. No. 22 at ¶8, C.R.
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Bard, Inc. v. W.L. Gore & Assoc., No. 97-00517 (D.N.J. Jan 31, 1997)). Such
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This 2007 assignment does not cure BPV's lack of standing because, inter alia, standing must be judged when the complaint was filed in 2002. Paradise Creations, Inc. v. UV Sales, Inc., 315 F.3d 1304, 1309 (Fed. Cir. 2003). A later assignment does not cure the defect. Enzo APA & Son, Inc. v. Geapag A.G., 134 F.3d 1090, 1093 (Fed. Cir. 1998). -2Case 2:03-cv-00597-MHM Document 829 Filed 07/02/2008
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assigned ownership rights must be transferred to BPV in writing under 35 U.S.C. § 261 for BPV to have standing. As the Mars case makes clear, the later amendment to the license (not even signed by C.R. Bard as the license requires 2) "confirming" an alleged prior transfer is legally ineffective. Plaintiffs also argue that the Mars case involved transfer of title to a patent, not transfer of an exclusive license. But as explained above, the very language of § 261 shows that is a distinction without a difference. Further, as shown below, Goldfarb's exclusive license to C.R. Bard was effectively an assignment, directly triggering § 261 for its transfer. There can be no doubt that there was never any transfer of the exclusive license from C.R. Bard to BPV, let alone the legally required written transfer in accordance with § 261. That means BPV has no standing.
B.

Any Oral Or Implied License To BPV Is At Most A NonExclusive License Which Does Not Confer Standing

Plaintiffs argue that because C.R. Bard "transferred responsibility for the 1980 license to IMPRA" (Plaintiffs' Objection, p. 5), the exclusive license was
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somehow transferred thereby to BPV. That is wrong on two grounds. First, C.R.
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Bard had and has the written exclusive license. The only way it could transfer
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exclusive rights to BPV would be by assigning the written license to BPV. Any
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transfer of rights less than that is merely a non-exclusive sublicense that does not
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confer standing. See Ortho Pharm. Corp. v. Genetics Inst., Inc., 52 F.3d 1026, 1031
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(Fed. Cir. 1995); Rite-Hite Corp. v. Kelley Co., Inc., 56 F.3d 1538, 1552 (Fed. Cir.
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1995).
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Second, a transfer of "responsibility" for paying royalties is not legally a
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transfer or assignment of an exclusive license. As admitted by Mr. Flink, C.R.
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Bard's General Counsel and Secretary, whatever was done did not make BPV the
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Plaintiffs continue to falsely argue that BPV's Mr. McDermott signed the amendment on behalf of C.R. Bard, ignoring his clear trial admissions that he was signing on behalf of BPV. (Doc. 667, p. 5.)
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licensee. Instead, it only made BPV the "designated operating unit." (Gore's Motion for JMOL Regarding Plaintiffs' Lack of Standing, Doc. 652, p. 3; Ex. C, Richard Flink 30(b)(6) Tr. 80:17-21). This clear distinction is correct, because having the responsibility to pay royalties or being the designated operating unit does not mean BPV was assigned the exclusive license; it only means that BPV had a sublicense. This conclusion is fully consistent with C.R. Bard's license, which does not give C.R. Bard the right to assign the license, (PX 4, ¶ 6.4) but does give it the right to grant sublicenses (Id. ¶ 1.4) so long as Dr. Goldfarb was paid his royalty. (Id. ¶ 5.3). Such a non-exclusive sublicense simply does not confer standing.
C.

An Oral Transfer Of An Exclusive License Is Legally Ineffective And Lacks Any Support In The Record

Lacking any admissible proof of a written assignment of the exclusive license from C.R. Bard to Bard, Plaintiffs argue C.R. Bard gave an oral license to BPV.
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This fails on two grounds. First, as Gore twice before pointed out (Docs. 652 and
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667), there is no evidence of record of such an oral transfer.
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Second, as shown above, under 35 U.S.C. § 261, a transfer of an exclusive
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license is required to be in writing. As stated in Enzo APA & Son v. Geapag A.G.,
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134 F.3d 1090, 1093 (Fed. Cir. 1998), allowing a verbal license to confer standing
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means the parties would be "free to engage in revisionist history, circumventing the
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certainty provided by the writing requirement of Section 261 by claiming to be
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patentee by virtue of a verbal licensing arrangement."
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Plaintiffs assert that a writing is not required because Dr. Goldfarb retained
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"substantially all rights" and merely granted an exclusive license to C.R. Bard. But
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the only right they can point to is Dr. Goldfarb's right to share in licensing fees and
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damages resulting from litigation. (Doc. 827 at p. 6). In fact, the 1980 License
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Agreement divested Dr. Goldfarb of nearly all his patent rights, including "exclusive
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licenses, with the right to sublicense, to make, use and sell products covered by [the]
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PATENTS" as well as "sole discretion to file, control, defend and settle, by granting
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a sublicense or otherwise, all actions and claims against third parties for infringement of any PATENTS..." (PX 4 §§ 1.4, 5.3). When an inventor retains as few rights as Dr. Goldfarb did, it amounts to a transfer of title. Vaupel Textilmaschinen KG v. Meccanica Euro Italia S.P.A., 944 F.2d 870, 874-75 (Fed. Cir. 1991) (granting exclusive license to make, use and sell as well as rights to sue for past, present and future infringement with the inventor licensor retaining a right to receive infringement damages held to be an assignment); see also, Rude v. Westcott, 130 U.S. 152, 162-63 (1889) (retention of portion of "sales, royalties, or settlements, or other sources" does not limit the assignment of patent). Further, the Court in Vaupel noted that the grant of the right to sue for infringement was "particularly dispositive" on the issue. 944 F.2d at 876. Given the very similar facts of Vaupel, the clear conclusion is that Dr. Goldfarb also transferred substantially all rights and title in the 1980 Agreement to Bard. "A grant of all substantial rights in a patent amounts to an assignment ­ that is, a transfer of title in the patent..." Waterman v. Mackenzie, 138 U.S. 252, 256 (1891); Ortho Pharm. Corp. v. Genetics Inst., Inc., 52 F.3d 1026, 1030 (Fed. Cir. 1995). This conclusion is also fully consistent with C.R. Bard's admission that it "owned" the patent application (for the `135 patent), by "assignment" after the alleged transfer to BPV. It follows that under 35 U.S.C. § 261, transfer of such a license which is tantamount to an assignment must be in writing.
III.

CONCLUSION Plaintiffs' Objection fails to distinguish the Mars case. Plaintiffs instead

rehash their prior discredited arguments. This Court should grant Gore's motion that BPV has no standing and dismiss BPV from the case. That also means that the jury's damages verdict should be vacated, since (a) BPV had no standing to claim damages; (b) C.R. Bard, the exclusive licensee which could have asserted standing, is not a plaintiff and has expressly waived any claim to damages; and (c) Dr. Goldfarb has no claim to -5Case 2:03-cv-00597-MHM Document 829 Filed 07/02/2008
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damages because he only retained the right to share in damages to the extent he funded the litigation and today has no rights at all in the patent.

DATED this 2nd day of July, 2008 OSBORN MALEDON, P.A.

s/William J. Maledon Brett L. Dunkelman William J. Maledon 2929 North Central Avenue Phoenix, Arizona 85012-2794 David H. Pfeffer Arnold I. Rady James W. Gould Morgan & Finnegan, L.L.P. 3 World Financial Center New York, New York 10281-2101 John S. Campbell W. L. Gore & Associates, Inc. 551 Paper Mill Road Newark, Delaware 19714 Attorneys for W. L. Gore & Associates, Inc.

CERTIFICATE OF SERVICE I hereby certify on July 2, 2008, I electronically transmitted the attached document to the Clerk's Office using CM/ECF System for filing and transmittal of A Notice of Electronic Filing to the CM/ECF registrants. s/Deborah B. Dunn

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