Millipore Corp. v. University Patents, Inc.

682 F. Supp. 227, 4 U.S.P.Q. 2d (BNA) 1946, 1987 U.S. Dist. LEXIS 13161, 1987 WL 43683
CourtDistrict Court, D. Delaware
DecidedSeptember 21, 1987
DocketCiv. A. 86-403-JRR
StatusPublished
Cited by13 cases

This text of 682 F. Supp. 227 (Millipore Corp. v. University Patents, Inc.) is published on Counsel Stack Legal Research, covering District Court, D. Delaware primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Millipore Corp. v. University Patents, Inc., 682 F. Supp. 227, 4 U.S.P.Q. 2d (BNA) 1946, 1987 U.S. Dist. LEXIS 13161, 1987 WL 43683 (D. Del. 1987).

Opinion

MEMORANDUM OPINION

ROTH, District Judge.

This is a declaratory judgment action brought pursuant to 28 U.S.C. § 2201 by plaintiff Millipore Corporation (Millipore) for a declaratory judgment that United States patents 4,415,732 (the ’732 patent) and 4,458,066 (the ’066 patent) owned by defendant University Patents, Inc. (UPI) are invalid, unenforceable and have not been infringed by Millipore. UPI has countered this claim by filing a Motion to Dismiss or Transfer asserting that UPI never threatened Millipore with suit or gave it a “reasonable apprehension” of suit, a necessary jurisdictional element of a declaratory judgment action. In the alternative, UPI asks the Court to transfer this action to the Northern District of California where three suits involving the same two patents were filed by UPI and have recently been settled.

I. Background.

UPI is the technology licensing agent for several major universities. It serves the important function of helping scientists, who work for universities, to commercialize their inventions. The two patents at issue are the result of work done at the University of Colorado, one of UPI’s client universities, by Professor Marvin H. Caruthers and two former graduate students, Mark Mat-teucci and Serge Beaucage. The patents involve the construction of DNA fragments in the field of genetic engineering. The first patent outlines the methods by which the instruments or “gene machines” construct the DNA, and the second involves the special chemical reagents used by these machines.

Millipore is a Massachusetts corporation which was not originally involved in the synthesis of DNA but which began planning to expand into this area in 1985. Two companies, Applied Biosystems (ABIO) and SmithKline Beckman Corporation, had been licensed by UPI to use the technology set out in the ’732 and ’066 patents. ABIO was the lead licensee and the only one with the right to offer sublicenses. ABIO’s position as a licensee, coupled with Millipore’s interest in entering the field of genetic engineering, led Millipore to begin negotiations to acquire ABIO in the fall of 1985.

During the course of these negotiations, Millipore learned that both ABIO and UPI had a right to sue for infringement of the patents, that ABIO believed the patents to be valid, and that they intended to keep all others out of the market. Millipore also discovered that ABIO and/or UPI had sued three competing manufacturers of gene machines and of reagents for DNA synthesis for infringement. The suits were filed against American BioNuclear, Biosearch, Inc. and Biosyntech, Inc. and were eventually all consolidated before the Honorable William H. Orrick in the Northern District of California. The actions have since been concluded by consent judgments, admitting validity and infringement, and by the infringers taking sublicenses from ABIO.

The negotiations between Millipore and ABIO faltered in the fall of 1985. Consequently, Millipore set its sights on purchasing Genetic Design, a company which manufactured and sold systems and reagents for DNA synthesis and protein sequencing. These negotiations culminated with Milli-pore’s acquisition of Genetic Design in Jan *230 uary, 1986. This acquisition put Millipore in the position of potential defendant in a patent infringement suit based on the similarities between the ’732 and ’066 patents and the machines and chemicals being produced by Genetic Design.

Millipore expressed an awareness in Schedule 3.1(f) to the Genetic Design Purchase Agreement, that Genetic Design, and with it thereby Millipore, would probably be sued by UPI. 1 Millipore believed this to be true in spite of its relatively small sales in the market, about $600,000 per year, because one of the defendants in the California litigation, Biosyntech, had sales of less than $100,000 per year and yet was still considered enough of a threat to warrant being sued by UPI.

Millipore also became aware that other companies, operating in the DNA synthesis market, had received letters from UPI threatening them with suit for infringement of UPI’s patents. Millipore did not receive one of these letters. However, at that time Millipore was considering investing in Applied Protein Technologies, Inc. (APT), and APT had received one of the letters. During the due diligence investigation of APT, representatives of Millipore were shown the letters from UPI which read in part:

We intend to enforce our patent rights against any company which manufactures or sells stabilized dialkylamino phosphite reagents or machines which practice the phosphoramidite process.... ******
The purpose of this letter is to put you on notice under the patent law, of our claim to, and rights in, this technology. When the present suits are concluded, we will be seeking redress from the inception of infringement, and treble damages for intentional infringement, of our patent rights by your Company.

According to information available to Millipore, APT did not make or sell the reagents or machines described in the letter. Robert Dishman, President of the Mil-liGen Division of Millipore, stated that he believed this letter was mistakenly sent to APT, rather than Millipore, because APT had been formed by one of the founders of Genetic Design. Dishman believed that UPI thought APT was carrying out this part of Genetic Design’s business when, in fact, it was being carried out by MilliGen, the successor to Genetic Design. Millipore believed it would be sued by UPI once the mistake was discovered.

Millipore also learned that one of its customers, Professor Alex Nussbaum of Harvard Medical School, had been threatened with copyright infringement and unfair competition by ABIO. The threat was apparently the result of a comparison study, performed by Nussbaum, of the ABIO and Millipore gene machines in which the Milli-pore machine was described as being better in certain respects. Because of the favorable comparison, Millipore began using the study in its sales presentations.

Later that year, in June, 1986, at an Analytica Trade Show in Munich, Germany during which ABIO and Millipore were both demonstrating their competing machines, Elaine Heron, ABIO’s representative at the Show, reiterated to Robert Dish-man that ABIO intended to sue for alleged inaccuracies and misrepresentations in Professor Nussbaum’s study. When pressed for specifics, Ms. Heron apparently pointed to only one inaccuracy, the model number of one of ABIO’s machines. This mistake was subsequently corrected by Millipore.

While discussing the California litigation at the trade show in Germany, Dishman also asked Heron if ABIO intended to sue Millipore. It is disputed as to whether Heron’s response was that ABIO intended to pursue any and all parties that infringed *231 its patents or whether she simply informed Dishman that the California litigation was still pending. Although this may not be a clear assertion of ABIO’s intention, Dish-man stated in his affidavit that he understood Heron’s response to plainly mean that Millipore would be sued by ABIO.

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682 F. Supp. 227, 4 U.S.P.Q. 2d (BNA) 1946, 1987 U.S. Dist. LEXIS 13161, 1987 WL 43683, Counsel Stack Legal Research, https://law.counselstack.com/opinion/millipore-corp-v-university-patents-inc-ded-1987.