Free Reply in Support of Motion - District Court of Arizona - Arizona

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FENNEMORE CRAIG P.C. 3003 NORTH CENTRAL AVENUE, SUITE 2600 PHOENIX, ARIZONA 85012-2913 PHONE (602) 916-5000 ANDREW M. FEDERHAR (#006567) LATHAM & WATKINS LLP 885 THIRD AVENUE NEW YORK, NEW YORK 10022 STEVEN C. CHERNY 555 ELEVENTH STREET, N.W. WASHINGTON, DC 20004 MAXIMILIAN A. GRANT Attorneys for Plaintiffs/Counterdefendants Bard Peripheral Vascular, Inc. and David Goldfarb, M.D. and Counterdefendant C.R. Bard, Inc.

UNITED STATES DISTRICT COURT DISTRICT OF ARIZONA Bard Peripheral Vascular, Inc., and David Goldfarb, M.D., ) ) No. CV-03-0597-PHX-MHM ) Plaintiffs, ) ) v. ) ) W.L. Gore & Associates, Inc., ) ) Defendant. ) PLAINTIFFS' REPLY IN SUPPORT _____________________________________) OF THEIR MOTION TO STRIKE ) GORE'S IMPROPER "REPLY" W.L. Gore & Associates, Inc., ) REGARDING ITS NOTICE OF ) SUPPLEMENTAL AUTHORITY Counterclaimant, ) ) v. ) (Assigned to the Hon. Mary H. Murguia) ) Bard Peripheral Vascular, Inc., ) David Goldfarb, M.D., and ) C.R. Bard, Inc. ) ) Counterdefendants. ) ) )

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I.

INTRODUCTION Gore's fourth (and third unauthorized) brief disputing the binding nature of

the jury's verdict of nonobviousness belatedly concedes that Plaintiffs' interpretation of the law is correct and there is no legal authority supporting the proposition that a jury verdict on obviousness is "advisory."1 Instead, the controlling case law (including the alleged supplemental authority Gore submitted to justify re-arguing its position) establishes just the opposite. See, e.g., Perkins-Elmer Corp. v. Computervision Corp., 732 F.2d 888, 894-95 & 895 n.5 (Fed. Cir. 1984) (rejecting argument that jury verdict on nonobviousness is advisory); Agrizap, Inc. v. Woodstream Corp., 520 F.3d 1337, 2008 WL 819757, *4 (Fed. Cir. Mar. 28, 2008) (treating jury verdict as binding). The sole remaining basis for Gore's assertion that it is entitled to a "doover" of the verdict on nonobviousness (which the jury reached after considering the voluminous evidence, and extensive testimony by the parties' fact and expert witnesses) is an off-hand comment regarding a footnote in the Northern District of California's model jury instructions by Mr. Swinton in the midst of a lengthy charge conference that the jury would "provide the Court at least an advisory verdict." (Tr. at 3108:19-20.) As it turned out, that footnote is contrary to the Federal Circuit's controlling law. Connell v. Sears, Roebuck & Co., 772 F.2d 1542, 1547 (Fed. Cir. 1983) (Seventh Amendment entitles parties to jury trial "in determining obviousness"); Perkins-Elmer Corp., 732 F.2d at 895 n.5 ("use of an advisory jury is limited to actions not triable of right by a jury"). Based on this threadbare statement, Gore urges the Court to re-find the facts already found by the jury. Gore's argument that Mr. Swinton's comment rises to the level of a binding agreement by the parties' counsel that supersedes Plaintiffs' constitutional right to a jury verdict on nonobviousness is contrary to the law and, consequently, meritless.

1

Gore's latest brief cites but one case, Fuji Photo Film Co., Ltd. v. Jazz Photo Corp., 394 F.3d 1368 (Fed. Cir. 2005). In Fuji, the issue was not if an alleged stipulation was reached, but rather the scope of that undisputedly agreed on stipulation. Id. at 1375 (affirming enforcement of stipulation because neither party had objected to the court's unequivocal and precise statement that it "will consider, but not be bound by [the jury's verdict], in rendering its ruling"). Fuji is inapposite. Similarly, the treatises cited by Gore fail to address an obviousness verdict and are off point. Document 820

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II.

ARGUMENT First, stipulations between parties are contracts that courts will not enforce

absent a showing "of informed and voluntary assent of a party to the agreement." United States v. McGregor, 529 F.2d 928, 931 (9th Cir. 1976); see also CDN Inc. v. Kapes, 197 F.3d 1256, 1258 (9th Cir. 1999) (citing McGregor and explaining that stipulations require voluntary and informed consent). But, "[o]ral stipulations are [only] binding if the record affirmatively demonstrates the stipulation terms were announced to the parties, and the parties understood the effects of their agreement." Hamilton v. Willms, No. CV F 026583 AWI SMS, 2007 WL 707518, *10 (E.D. Cal. Mar. 6, 2007) (citing 83 C.J.S. Stipulations § 23).2 The Court's local rules adhere to this black letter law by requiring parties to expressly state that they agree to an oral stipulation in open court, and that the scope of agreement be carefully memorialized on the record: Stipulations of Counsel No agreement between parties or attorneys is binding, if disputed, unless it is in writing signed by the attorney of record or by the unrepresented party, or made orally in open court and on the record; provided, however, that in the interests of justice the Court shall have the discretion to reject any such agreement. LRCiv 83.7. This requirement serves the necessary function of evidencing that the parties understand the scope and terms of any alleged stipulation, and that each party voluntarily consents to be bound by such terms. Absent a clear indication in "the record [that] affirmatively demonstrates the stipulation terms were announced to the parties, and the parties understood the effects of their agreement," Hamilton, 2007 WL 707518 at *10, "[n]o agreement between parties or attorney is binding." LRCiv 83.7. There is no evidence in the trial record that shows the parties entered a binding stipulation that the jury's nonobviousness verdict would be merely advisory.

2

In Hamilton the precise terms of the stipulation were discussed on the record, the parties notified the court that they had their clients' consent to the stipulation, and then expressly consented to the stipulation. In enforcing the stipulation, the court found that the parties and court had "acted on" the stipulation. 2007 WL 707518 at *12. None of these facts are found here and, instead, neither Plaintiffs nor Gore's actions are consistent with treatment of the jury's verdict as advisory. (See, e.g., Gore filing of JMOL of Obviousness, Doc. No. 650.) Document 820

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Had they done so, they would have been required to so stipulate under Federal Rule 39(a)(1). Gore's mining of the transcript can do no better than produce Mr. Swinton's off-hand comment regarding a footnote in a model jury instruction, which demonstrates ­ at most ­ that the parties understood the legally erroneous footnote similarly. (See also note 2, infra.) Mr. Swinton's comment was not a voluntary, informed agreement entered into by both parties in open court deciding that the jury's verdict with respect to nonobviousness would be advisory. 3 It does not constitute a binding stipulation under Ninth Circuit law or this Court's local rules. Second, Plaintiffs' Complaint properly preserved their constitutional right to a jury trial on obviousness. Connell, 772 F.2d at 1547 (Fed. Cir. 1983) (Seventh Amendment entitles parties to jury trial "in determining obviousness"). Because "use of an advisory jury is limited to actions not triable of right by a jury," the jury's verdict cannot be "deemed" advisory. Perkins-Elmer Corp., 732 F.2d at 895 n.5 (emphasis

added). Plaintiffs never treated the jury's consideration of nonobviousness as advisory, expressly disputed any assertion that the verdict was advisory, (Tr. at 4325:16-24), and never waived the petition for a jury verdict set forth in the Complaint. JURY TRIAL DEMANDED 12. Plaintiffs claim trial by jury with respect to any issues properly so triable. (Doc. No. 1 at 3.) Denial of Plaintiffs' Seventh Amendment right would be reversible error. See, e.g., Connell, 772 F.2d at 1547.
3

Gore's most recent brief misquotes the Court and omits key words from its citation to the record without noting their omission. For example, Gore argues in its brief that Mr. Swinton allegedly did not deny the Court's response that "we have an understanding that it's an advisory." (Doc. No. 819 at 3 (citing Tr. at 3109).) Gore omits the key, repeated, word from the Court's statement ... "if." THE COURT: It doesn't matter to me if we -- I guess if we have an understanding that it's an advisory verdict, but I didn't ­ I didn't know, is there any obligation to let the jury know? (12/4/07 Tr. at 3109:23-25 (emphasis added).) By dropping the "I guess if" and the remaining portions of the sentence, Gore misrepresents the Court's words that reflect the equivocal nature of the discussion. Regardless, as in Structural Rubber, confusion by the parties or the court cannot usurp the jury request preserved in Plaintiffs' Complaint and their constitutional right thereto. Document 820

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Third, despite its self-serving, post-hoc arguments, Gore's actions establish that Gore itself did not treat the jury's consideration of nonobviousness as advisory until after it received an adverse jury verdict. Instead, Gore submitted a motion for JMOL of obviousness pursuant to FED. R. CIV. P. 50. (Doc. No. 650.) Gore's filing of such a brief would be unnecessary and improper had Gore believed the jury's verdict to be advisory. See, e.g., Perkins-Elmer Corp., 732 F.2d at 894-95 ("The view ... that a jury verdict on nonobviousness is at best advisory, would make charades of motions for directed verdict or JNOV under Fed. R. Civ. P. 50 in patent cases."). Yet Gore did move for JMOL and further informed the Court that it may renew that motion after final judgment was entered. (Tr. at 4329:5-11 (Gore's counsel advising the Court of its right to renew each of its ten JMOL motions as "Rule 50(b) motions" after entry of final judgment).) Moreover, Gore never sought an advisory verdict under Rule 39 and did not seek special factual findings under Rules 49 or 52. Even had Gore done so, its request would have to be rejected. In a case where the defendant did move under Rule 39 and "argue[d] that the jury verdict on obviousness is advisory and that the court must make its own determination on obviousness" (as Gore does here), the court rejected that argument and found no legal authority supporting the proposition that a "jury verdict on that issue is solely advisory." eSpeed, Inc. v. BrokerTec USA, L.L.C., 404 F.Supp.2d 575, 582 (D. Del. 2005). Here, Gore not only failed to move under Rule 39, it filed a Rule 50 motion, two actions that cannot be squared with its present assertion that Gore allegedly believed the jury verdict to be advisory. Id.; Perkins-Elmer Corp., 732 F.2d at 894-95. The situation facing this Court closely parallels that set forth in the case cited by Plaintiffs' in their initial brief, a case that Gore has studiously ignored, Structural Rubber Prods. Co. v. Park Rubber Co., No. 79-C-1223, 1987 WL 17836, (N.D. Ill. Oct. 1, 1987), aff'd, No. 88-1129, 1988 WL 76497 (Fed. Cir. July 27, 1988) (attached as Exs. A & B of Doc. No. 800.) In Structural Rubber, the same sort of confusion was present during the charge conference:

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At the instruction conference, held at the close of evidence, I again made it clear that I thought the jury's verdict would be advisory and again no one disagreed. 1987 WL 17836, at *1-2. Thus, the district court tried the case to verdict believing the jury's decision on obviousness was advisory. Id. There, as here, "[t]he jury found in favor of the plaintiff." Unlike the situation here, after the verdict: [T]he plaintiff's attorneys took the position, for the first time [unlike here], that the jury's verdict could be binding. The issue was briefed and I agreed that the jury's verdict could be binding and I entered a finding on the liability issue in the plaintiff's favor based on the jury's verdict. I did that despite the fact that the defendants had gone to trial and verdict believing that the jury's verdict was merely advisory. Id. Thus, post-verdict, the court reviewed the controlling law and found that the jury's verdict was not advisory and could only be reviewed pursuant to Rule 50, regardless of the defendant's alleged subjective belief: Prior to and throughout the trial, the court believed that the jury's verdict would be advisory, because the issue of obviousness is a question of law. ... [After the jury's verdict], [t]he issue was briefed and I agree that the jury's verdict could be binding and I entered finding on the liability issue in the plaintiff's favor based on the jury's verdict.

The same result should obtain here. Plaintiffs' have a constitutional right to a jury trial on nonobviousness that was properly preserved in their Complaint. To the extent Gore wished to obtain and memorialize a stipulation that Plaintiffs' waive that right, it would have conferred with Plaintiffs' counsel, obtained "informed and voluntary assent," and then properly memorialized any stipulation in writing or with a clear and unequivocal statement regarding the scope of a "stipulation" on the record. Notably, the argument Gore initially presented ­ that obviousness is necessarily an issue for the Court merely because it is a question of law (see Doc. No. 799 at 3-5) ­ is refuted by the

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controlling law. See, e.g., Perkins-Elmer, 732 F.2d at 895 n.5; Connell, 722 F.2d at 1546-47; see also eSpeed, 404 F.Supp.2d at 582.4 ***** Finally, Gore does not dispute that the arguments it presented in conjunction with its initial "Submission of Supplemental Authority" and its associated "Reply" brief are wholly improper. (See Doc. No. 819 at passim.) Gore's practice of rearguing its contentions under the guise of a submission of "supplemental authority" needlessly causes excessive briefing to be submitted to the Court and is improper in this Circuit. See, e.g., United States v. Fowlie, 24 F.3d 1059, 1068 n.7 (9th Cir. 1994); Chan v. Orthologic, Corp., 1998 WL 1018624, *7 n.5 (D. Ariz. 1998); Seidman v. Paradise Valley Unified School Dist. No. 69, 327 F. Supp. 2d 1098, 1121 (D. Ariz. 2004). Accordingly, Gore's unauthorized supplemental briefs and arguments should be stricken. III. CONCLUSION WHEREFORE Plaintiffs respectfully request that the Court (i) enter judgment of nonobviousness in accordance with the jury's verdict, (ii) strike Gore's Reply in Support of its Submission of Supplemental Authority and preclude Gore from further unauthorized submissions, and (iii) grant any other relief the Court deems just.

4

Gore's latest filing makes plain that Gore's main objective is, as anticipated, to evade the preclusive effect of its tactical decision to move for JMOL of obviousness on only one of the infringed claims (claim 20) based on one of the asserted bases (the Volder publication). (Doc. No. 819 at 5 ("Plaintiffs' argument that Gore is limited to arguing obviousness of claim 20 because Gore's JMOL motion only referred to claim 20 is of no moment ..."). To support this tactic, Gore's submissions have, alternatively, mischaracterized and ignored the holdings in the Fresenius Med. Care Holdings, Inc. v. Baxter Int'l, 2007 U.S. Dist. LEXIS 14528, at *17 (N.D. Cal. Feb. 13, 2007) and Martek Biosciences Corp. v. Nutrinova, Inc., 520 F.Supp.2d 537, 554-54 (D. Del. 2007). But Gore has identified no legal authority to refute these cases which hold that Gore's post-verdict JMOL cannot include arguments not preserved in its pre-verdict JMOL, as required by the Federal Rules. FED. R. CIV. P. 50(b) Advisory Committee Notes to the 2006 Amendments ("Because the Rule 50(b) motion is only a renewal of the preverdict motion, it can be granted only on grounds advanced in the preverdict motion."). Document 820

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May 5, 2008 Bard Peripheral Vascular, Inc., David Goldfarb, M.D. & C. R. Bard, Inc. By their attorneys, By: __s/ Andrew M. Federhar_________ FENNEMORE CRAIG P.C. ANDREW M. FEDERHAR 3003 North Central Avenue, Suite 2600 Phoenix, Arizona 85012-2913 Phone (602) 916-5000 LATHAM & WATKINS, LLP STEVEN C. CHERNY 885 Third Avenue New York, NY 10022 Phone (212) 906-1200 MAXIMILIAN A. GRANT 555 Eleventh Street, N.W. Washington, DC 20004 Phone (202) 637-2200

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CERTIFICATE OF SERVICE
I hereby certify that on May 5, 2008, I electronically transmitted the attached PLAINTIFFS' REPLY IN SUPPORT OF THEIR MOTION TO STRIKE GORE'S IMPROPER "REPLY" REGARDING ITS NOTICE OF SUPPLEMENTAL AUTHORITY to the Clerk' s Office using the CM/ECF System for filing and transmittal of a Notice of Electronic Filing to the CM/ECF registrants. Plaintiffs By: s/ Andrew M. Federhar One of its attorneys

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