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Roche Diagnostics Corp. v. Meso Scale Diagnostics, LLC

United States District Court, D. Delaware

March 21, 2019

ROCHE DIAGNOSTICS CORPORATION, Plaintiff,
v.
MESO SCALE DIAGNOSTICS, LLC, Defendant. MESO SCALE DIAGNOSTICS, LLC, Counterclaim Plaintiff,
v.
ROCHE DIAGNOSTICS CORPORATION, and BIOVERIS CORPORATION, Counterclaim Defendants.

          Joel Friedlander, Christopher M. Foulds, and Christopher P. Quinn, FRIEDLANDER & GORRIS, P.A., Wilmington, DE James T. McKewon, Jeffrey N. Costakos, Eric L. Maasen, and Rachel M. Blise, FOLEY & LARDNER, LLP, New York, NY Attorneys for Plaintiff and Counterclaim Defendants

          Jack B. Blumenfeld and Jeremy A. Tigan, MORRIS, NICHOLS, ARSHT & TUNNELL LLP, Wilmington, DE Adam K. Mortara, Steven E. Derringer, and J. Scott McBride, BARTLITT BECK HERMAN PALENCHAR & SCOTT LLP, Chicago, IL Nosson D. Knobloch, Daniel R. Brody, and Daniel C. Taylor, BARTLITT BECK HERMAN PALENCHAR & SCOTT LLP, Denver, CO Attorneys for Defendant and Counterclaim Plaintiff

          MEMORANDUM OPINION

          STARK U.S. DISTRICT JUDGE:

         Plaintiff Roche Diagnostics Corporation brought this declaratory judgment suit against Defendant Meso Scale Diagnostics, LLC ("Meso") seeking judgment that it does not infringe Meso's license rights to patented diagnostics detection technology known as electrochemiluminescence ("ECL"). (See D.I. 1) Meso filed counterclaims against Roche Diagnostics Corporation and BioVeris Corporation ("BioVeris" and, collectively, "Roche") asserting infringement often patents. (See D.I. 42-1)

         Presently before the Court is Roche's Motion for Summary Judgment (D.I. 98) regarding the scope of Meso's license to practice the asserted patents.[1] Having considered the parties' briefs and numerous exhibits (see D.I. 99-101, 109-10, 116-17) and having heard oral argument on October 23, 2018 (see D.I. 124 ("Tr.")), the Court will deny the motion.

         BACKGROUND

         The following facts are not disputed. In 1992, IGEN and Boehringer Mannheim GmbH ("BM") executed a license agreement ("1992 License") wherein IGEN authorized BM to develop diagnostic instruments with ECL detection. (D.I. 99 at 3; Ex. 4[2]) In 1998, Roche purchased BM, so Roche became the licensee under the 1992 License. (See D.I. 109 at 6 n.l; Ex. O) Beginning in 1994, IGEN and Roche had been selling ECL instruments. (See D.I. 99 at 3)

         At around the same time, Jacob Wohlstadter, the son of IGEN's CEO, was researching multi-array methodologies at another entity, MST. (See Id. at 4) On November 30, 1995, IGEN and MST executed a joint venture agreement ("JVA"), which provided that "MST and IGEN have jointly prepared a Research Outline for a program of research and development (the 'Research Program') to be conducted by" Meso. (Ex. 8 at 1) The Recitals further provided that Meso was "organized for the purpose of conducting this research and development and, if successful, developing, manufacturing, marketing and selling products, processes and services." (Id.) Under the JVA, MST exclusively licensed its intellectual property to the joint venture while IGEN provided an exclusive license, significant financial investment, office and laboratory facilities, and research personnel. (See D.I. 109 at 2)

         Also on November 30, 1995, IGEN and Meso executed a license agreement ("Meso License") governing IGEN's license grants to Meso. (Ex. 7) Section 2.1 of the Meso License states:

2.1. IGEN Technology. IGEN hereby grants to [Meso] an exclusive, worldwide, royalty-free license to practice the IGEN Technology to make, use and sell products or processes (A) developed in the course of the Research Program, or (B) utilizing or related to the Research Technologies; provided that IGEN shall not be required to grant [Meso] a license to any technology that is subject to exclusive licenses to third parties granted prior to the date hereof. In the event any such exclusive license terminates, or IGEN is otherwise no longer restricted by such license from licensing such technology to [Meso], such technology shall be, and hereby is, licensed to [Meso] pursuant hereto.

(Id. at 2)

         "IGEN Technology" is defined in the Meso License as "all inventions, know-how, methods, procedures and other technology, whether or not patented or patentable, now or hereafter owned by, licensed to, or otherwise obtained by, IGEN" including "ECL Technology." (Id. at 1-2) "Research Technologies" is defined in the JVA as "(i) selection and screening methods, ... (ii) modified electrodes, [3] . . . and (iii) multi-array diagnostic .... 'Research Technologies' specifically include, but are not limited to, ... agents to extend the electrical potential of an electrode in the direction perpendicular to its surface . . . ." (Ex. 8 at 2)

         The JVA provided that "[i]f no product has been developed by the time this Agreement is set to expire [in five years, Meso] shall prepare and submit to IGEN a written research plan and budget (the 'Additional Research Budget') for the conduct of additional research." (Id. at 15) More than five years later, on February 15 and April 19, 2001, Meso sent IGEN Additional Research Budgets; the parties amended the JVA in August 2001. (Exs. 16, 19, 22) Under the "Additional funding if product developed" provision, the JVA defined a "developed product" as one that has been or is ready to be submitted for FDA approval or is declared developed by the Board of Managers. (Ex. 8 at 6)

         In the meantime, in 1997, IGEN sued Roche for breach of the 1992 License. (See D.I. 99 at 5) A jury found that Roche materially breached the 1992 License; judgment for IGEN was affirmed on appeal on July 9, 2003. (See Id. at 6) Thereafter, the 1992 License was terminated and, on July 24, 2003, IGEN and Roche executed a new license agreement ("2003 License") to give Roche a non-exclusive license to IGEN's ECL technology limited to human patient diagnostic uses. (See D.I. 99 at 6; D.I. 109 at 6; Ex. 34) Meso consented to the 2003 License to Roche. (See D.I. 109 at 6; Ex. T)

         In 2003, BioVeris acquired IGEN's ECL technology and, in 2007, Roche acquired BioVeris. (See D.I. 99 at 6-7; D.I. 109 at 7)

         In June 2010, Meso sued Roche in the Delaware Court of Chancery. (See D.I. 99 at 7) That Court's decision that Meso had consented to but was not a party to the 2003 License between IGEN and Roche, and that only BioVeris (as IGEN's successor-in-interest) could enforce the 2003 License against Roche for sales made outside the defined field in the 2003 License, was affirmed by the Delaware Supreme Court in June 2015. (See id.)

         In February 2017, Roche filed the instant declaratory judgment action against Meso, to which Meso responded with counterclaims - including for breach of the Meso License - in April 2017. (D.I. 1, 10)

         LEGAL STANDARDS

         Under Rule 56(a) of the Federal Rules of Civil Procedure, "[t]he court shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." The moving party bears the burden of demonstrating the absence of a genuine issue of material fact See Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp.,475 U.S. 574, 585-86 (1986). An assertion that a fact cannot be - or, alternatively, is - genuinely disputed must be supported either by "citing to particular parts of materials in the record, including depositions, documents, electronically stored information, affidavits or declarations, stipulations (including those made for purposes of the motion only), admissions, interrogatory answers, or other materials," or by "showing that the materials cited do not establish the absence or presence of a genuine dispute, or that an adverse party cannot produce admissible evidence to support the fact." Fed.R.Civ.P. 56(c)(1)(A) & (B). If the moving party has carried its burden, the nonmovant must then "come forward with specific facts showing that there is a genuine issue for trial." Matsushita, 475 U.S. at 587 ...


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