In Re Recombinant DNA Technology Patent & Contract Litigation

850 F. Supp. 769, 1994 U.S. Dist. LEXIS 10055, 1994 WL 161739
CourtDistrict Court, S.D. Indiana
DecidedMarch 2, 1994
DocketMDL No. 912. Civ. Nos. IP-87-0219-C, IP-88-1463-C
StatusPublished
Cited by13 cases

This text of 850 F. Supp. 769 (In Re Recombinant DNA Technology Patent & Contract Litigation) is published on Counsel Stack Legal Research, covering District Court, S.D. Indiana primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In Re Recombinant DNA Technology Patent & Contract Litigation, 850 F. Supp. 769, 1994 U.S. Dist. LEXIS 10055, 1994 WL 161739 (S.D. Ind. 1994).

Opinion

Entry Granting Lilly’s Motions for Leave to Amend, Denying Lilly’s Motion for Summary Judgment as to Patent Unenforceability in IP-87-0219-C, and Denying Lilly’s Motion for Summary Judgment for Unenforceability As to All Counts in IP-88-H-63-C

DILLIN, District Judge.

This cause comes before the Court on Lilly’s motion for leave to amend its reply to Genentech’s amended answer and counterclaim in IP-87-0219-C; Lilly’s motion for leave to amend its answer and cross demands in IP-88-1463-C; Lilly’s motion for summary judgment as to patent unenforceability in IP-87-0219-C; and Lilly’s motion for summary judgment for unenforceability as to all counts in IP-88-1463-C. 1 For the following reasons, Lilly’s motions for leave to amend are GRANTED, and Lilly’s motions for summary judgment are DENIED.

Background

These actions are two of the six cases consolidated in this Court for pretrial proceedings by the Judicial Panel on Multidistrict Litigation. See In re Recombinant DNA Technology Patent and Contract Litig., Docket No. 912 (J.P.M.L., Feb. 19, 1992), aff'd, In re Regents of the Univ. of Cal, 964 F.2d 1128 (Fed.Cir.1992). The consolidated cases arise out of various research arrangements and license agreements among the Regents of the University of California (UC), Genentech, Inc. (Genentech), and Eli Lilly & Company (Lilly).

One of the actions currently before us, IP-87-0219-C, involves several patents poten *771 tially used in the production of human insulin and/or human growth hormone (hGH). Lilly initiated this cause of action on March 6, 1987, and amended its complaint on November 9, 1987. Lilly seeks a declaratory judgment that eight of Genentech’s United States patents are invalid and not infringed. These patents are patent numbers 4,366,246; 4,601,980; 4,604,359; 4,634,677; 4,512,922; 4,518,526; 4,620,948; and 4,511,502. Genenteeh, in its counterclaims filed in IP-87-0219-C, alleges that Lilly willfully is infringing not only the patent numbers for which Lilly seeks the declaratory judgment, but also patent numbers 4,342,832; 4,425,437; 4,431,739; 4,704,362; and 4,898,830.

Two agreements involving these patents and other unpatented materials are relevant to the motions in this case. First, on August 25, 1978, Lilly and Genentech entered into the Lilly-Genentech Insulin Agreement (Insulin Agreement). Under the Insulin Agreement, Lilly acquired the right to use certain of Genentech’s biological materials and know-how “for the limited purpose of manufacturing, selling and using Recombinant Insulin without regard to Genentech Patent Rights ... Rights granted hereunder shall include the right to practice under any applicable Genentech Patent Right.” Insulin Agreement, § 6.01, Lilly Ex. 2 at 19.

Second, on August 1, 1978, KabiGen AB (Kabi) 2 and Genentech entered into the Kabi-Genentech hGH Agreement (hGH Agreement). Under this agreement, Genentech granted Kabi the right to use certain of Genentech’s biological materials and know-how for the limited purpose of manufacturing, selling and using hGH for human purposes “without regard to Genentech Patent Rights.” hGH Agreement, § 8.01, Lilly Ex. 13 at 18.

The second action before the Court is IP-88-1463-C, initiated by Genentech on November 6, 1987. Genentech amended its complaint on December 18, 1987, and the amended complaint alleges as causes of action willful infringement, breach of contract, fraud, unfair competition, theft of trade secrets, tortious interference with prospective business advantage, breach of fiduciary duty, unjust enrichment and conversion.

Lilly’s defenses to Genentech’s claims in IP-88-1463-C include estoppel, patent invalidity, patent unenforceability, statute of limitations and laches. Lilly also alleges in its defenses and cross demands that Genentech caused UC and UC researchers to breach certain agreements between UC and- Lilly; that Genentech intentionally interfered with Lilly’s relationship with UC and UC researchers, and intentionally interfered with Lilly’s prospective economic advantage arising from that relationship; that Genentech wrongfully misappropriated trade secrets; and that Genentech wrongfully converted Lilly’s property.

On February 11, 1993, Lilly moved the Court for leave to amend its reply to Genentech’s answer and counterclaim in IP-87-0219-C to raise a defense of patent misuse. On that same date, Lilly moved the Court for leave to amend its answer and cross demands in IP-88-1463-C to “clarify [that] its existing unclean hands defense includes a defense of

patent misuse____” Lilly Mem. at 1. Lilly

also sought permission to make a technical correction to its original reply in IP-88-1463-C to include in the prayer for relief an adjudication that Lilly has not converted Genentech’s property. 3

Finally, filed concurrently with Lilly’s motions for leave to amend were Lilly’s motion for summary judgment as to patent unenfor.ceability in IP-87-0219-C and motion for summary judgment for unenforceability as to all counts in IP-88-1463-C. The summary judgment motions are based on the defense of patent misuse.

Discussion

I. Lilly’s Motions to Amend

Lilly has moved the Court for leave to amend its pleadings both in IP-87-0219-C *772 and in IP-88-1463-C. Genentech opposes such motions, arguing that delay, prejudice and futility militate against such amendment. Genentech notes that the instant actions were initiated in 1987, and contends that Lilly long ago should have asserted its patent misuse defense.

Federal Rule of Civil Procedure 15(a) provides that a party may amend its pleading by leave of the court and that “... leave [to amend] shall be freely given when,justice so requires.... ” The Seventh Circuit has stated that delay in presenting an amendment “... will be a sufficient basis for denial of leave to amend only when the delay has caused the opposing party undue prejudice.” Textor v. Board of Regents of N. III. Univ., 711 F.2d 1387 (7th Cir.1983). Thus, in deciding whether we should grant Lilly leave to amend, we must determine whether Lilly’s delay in requesting leave to amend its pleadings has caused Genentech undue prejudice.

Moreover, we are mindful that other courts have found leniency of particular importance when considering whether to allow a party to amend the pleadings to raise issues of patent misuse and consequent unenforceability since “ ‘the possession and assertion of patent rights are ‘issues of great moment to the public’.’ ” Key Pharmaceuticals, Inc. v. Lowey, 373 F.Supp. 1190, 1193 (S.D.N.Y.1974) (quoting Precision Instrument Mfg. Co. v. Automotive Maintenance Mach. Co., 324 U.S. 806, 815, 65 S.Ct. 993, 998, 89 L.Ed.

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850 F. Supp. 769, 1994 U.S. Dist. LEXIS 10055, 1994 WL 161739, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-recombinant-dna-technology-patent-contract-litigation-insd-1994.