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Shelbyzyme, LLC v. Genzyme Corporation

United States District Court, Third Circuit

June 25, 2013

SHELBYZYME, LLC, Plaintiff,
v.
GENZYME CORPORATION, Defendant.

MEMORANDUM

GREGORY M. SLEET, Chief District Judge.

I. INTRODUCTION

The defendant, Genzyme Corporation ("Genzyme"), requested that the plaintiff, Shelbyzyme, LLC ("Shelbyzyme"), be required to produce certain privileged documents under the crime-fraud exception to the attorney-client privilege. (D.I. 201.) The court ordered letter briefing on this subject, (D.I. 199 at 11), and issued an order on May 22, 2013 granting in part Genzyme's request, (D.I. 219).

Presently before the court is Shelbyzyme's Motion for Reconsideration of the Court's Order to Produce Attorney-Client Privileged Documents (D.I. 220). For the reasons that follow, the court will deny this Motion for Reconsideration.

II. BACKGROUND

Genzyme seeks the production of certain documents pursuant to the crime-fraud exception to the attorney-client privilege, arguing that the applicants committed fraud in reviving U.S. Patent Application 08/790, 491 (the "491 Application"), which eventually issued as U.S. Patent No. 7, 011, 831 (the "831 Patent"). (D.I. 201 at 1-2.) In their February 2, 2002 Petition for Revival, the applicants conceded that the491 Application became abandoned on October 4, 1999 following their failure to "file a timely and proper reply to the Notice of Allowance and Issue Fee Due." (D.I. 221 at Tab 9, PTX 14-436.) The relevant regulations, however, provide that "[i]f the delay in reply by applicant or patent owner was unintentional, a petition may be filed pursuant to this paragraph to revive an abandoned application." 37 C.P.R. ยง 1.137(b). Here, the applicants represented to the Patent and Trademark Office (the "PTO") that "[t]he entire delay in filing the required reply from the due date for the required reply until the filing of this Petition... was unintentional, " and were thus able to revive the 491 Application.

In its letter briefing, Genzyme suggested that the applicants' statement to the PTO was fraudulent, arguing that both the abandonment of the 491 Application and at least part of the delay in seeking its revival were intentional. (D.I. 201 at 2.) While the court found insufficient evidence of an intent to abandon, it was able to infer "that [the Research Foundation of the City University of New York ("RF-CUNY")] knew by December 1999 that the 491 Application had been abandoned, which would render false the applicants' February 2002 representation that [t]he entire delay in filing the required reply... was unintentional.'" (D.I. 219 at 2.) From this conclusion, the court was able to find the remaining elements of prima facie fraud in the patent prosecution context.[1] ( Id. at 2-3.)

Shelbyzyme now contends that the court erred in drawing the inference that RF-CUNY knew of the abandonment by December 1999 and thus was mistaken in its subsequent finding on the "intent to deceive" prong. (D.I. 220 at 1-2.) Additionally, Shelbyzyme takes issue with the court's characterization of a declaration attached to the Petition for Revival, which the court referenced in its discussion of the "reliance" element. ( Id. at 2.)

III. STANDARD OF REVIEW

While the Federal Rules of Civil Procedure do not mention either motions for reargument or reconsideration, courts have generally treated such requests as motions to alter or amend a judgment under Rule 59(e). See Flash Seats, LLC v. Paciolan, Inc., No. 07-575-LPS, 2011 WL 4501320, at *1 (D. Del. Sept. 28, 2011). "A proper Rule 59(e) motion... must rely on one of three grounds: (1) an intervening change in controlling law; (2) the availability of new evidence; or (3) the need to correct clear error of law or prevent manifest injustice." Lazaridis v. Wehmer, 591 F.3d 666, 669 (3d Cir. 2010). These limited bases are consistent with the fundamental purpose of a motion for reconsideration, which is "to correct manifest errors of law or fact or to present newly discovered evidence." Max's Seafood Cafe v. Quinteros, 176 F.3d 669, 677 (3d Cir. 1999).

Numerous decisions from this district make clear that such motions are to be granted "sparingly" under the Local Rules, Tristrata Tech., Inc. v. ICN Pharms., Inc., 313 F.Supp.2d 405, 404 (D. Del. 2004); see also D. Del. LR 7.1.5, and are appropriate only where "the court has patently misunderstood a party, made a decision outside the adversarial issues presented by the parties, or made an error not of reasoning but of apprehension." Flash Seats, 2011 WL 4501320, at *2 (citing Shering Corp. v. Amgen, Inc., 25 F.Supp.2d 293, 295 (D. Del. 1998)). Accordingly, motions for reconsideration or reargument are improper when used "as a means to argue new facts or issues that inexcusably were not presented to the court in the matter previously decided." Daoud v. City of Wilmington, 2013 WL 2284888, at *2 (D. Del. May 23, 2013) (quoting Brambles USA, Inc. v. Blocker, 735 F.Supp. 1239, 1240 (D. Del. 1990)). "A guiding principle in applying the limitations on reargument under Local Rule 7.1.5 is that a motion for reargument can never be allowed to encourage a never ending polemic between litigants and the Court.'" Shering Corp., 25 F.Supp.2d at 295 (quoting Pirelli Cable Corp. v. Ciena, 988 F.Supp. 424 (D. Del. 1997).

IV. DISCUSSION

Shelbyzyme suggests that the court's May 22 order contained two legally significant errors relating to the intent and causation/materiality prongs of the crime-fraud ...


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