Tyco Healthcare Group LP v. Ethicon Endo-Surgery, Inc.

587 F.3d 1375, 2009 U.S. App. LEXIS 26568, 2009 WL 4546935
CourtCourt of Appeals for the Federal Circuit
DecidedDecember 7, 2009
Docket2008-1269, 2008-1270
StatusPublished
Cited by18 cases

This text of 587 F.3d 1375 (Tyco Healthcare Group LP v. Ethicon Endo-Surgery, Inc.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Federal Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Tyco Healthcare Group LP v. Ethicon Endo-Surgery, Inc., 587 F.3d 1375, 2009 U.S. App. LEXIS 26568, 2009 WL 4546935 (Fed. Cir. 2009).

Opinions

MICHEL, Chief Judge.

Tyco Healthcare Group LP (“Tyco Healthcare”) appeals the dismissal of its patent infringement suit against Ethicon Endo-Surgery, Inc. (“Ethicon”). The district court dismissed without prejudice the infringement suit because Tyco Healthcare had failed to prove ownership of the asserted patents, and thus lacked standing to sue. Ethicon cross-appeals, arguing that the dismissal should have been with prejudice. We affirm the district court’s decision to dismiss without prejudice.

I. BACKGROUND

The present litigation concerns three patents, presently at issue (“the patents-in-suit”), directed to medical instruments that employ ultrasonic energy to cut and coagulate vessels in surgery.1 While the applications for these patents were pending, the respective inventors assigned their rights to either U.S. Surgical Corporation (“USSC”) or Misonix. Misonix had previously granted USSC an exclusive license and the right to sue on any inventions and patents concerning the subject matter of the involved patents. Thus, as of March 1999, all necessary rights to enforce the patents resided in USSC.

On April 1,1999, USSC entered into two agreements: a Contribution Agreement and a Settlement Agreement. The Contribution Agreement was executed by USSC and Kendall LLP. With the Contribution Agreement, USSC agreed to “assignf], transferf ], and deliver[ ] to [Kendall] ... all of the assets, properties, and business,” excepting certain “Excluded Assets,” existing as of April 1, 1999. The transferred assets included patents, except “[a]ny and all patents and patent applications relating to any pending litigation involving USSC,” as set forth by the Excluded Assets provision. Section 4.21 of the Contribution Agreement stated in part that “there are no actions pending or threatened by or against, or involving USSC,” except “as set forth on Schedule 4.21.” Shortly after the execution of the Contribution Agreement, Kendall changed its name to Tyco Healthcare. Thus, any rights transferred to Kendall via the Contribution Agreement are now held by Tyco Healthcare.

On the same day the Contribution Agreement was signed, USSC and Ethicon executed the Settlement Agreement, which purported to resolve “five pending patent litigations” and several interference proceedings between the two companies. The Settlement Agreement granted immunity from infringement liability to certain then-existing products made or sold by Ethicon. USSC and Ethicon also agreed to dismiss with prejudice the litigations listed in the agreement. Presently, both Ethicon and Tyco Healthcare concur that the type of products accused of infringement in the current suit are the same type of products immunized by the Settlement Agreement. Both parties also agree that the current products accused of infringement are not immunized because they were made or sold after April 1, 1999, the effective date of the Settlement Agreement.

In October 2004, Tyco Healthcare commenced the present action against Ethicon, claiming infringement of the patents-in-suit. After discovery, a trial was held in December 2008 before Judge Arterton. Tyco Healthcare called its first witness, Mr. Steven Amelio, a Tyco Healthcare [1378]*1378vice-president and its Rule 30(b)(6) witness. During Mr. Amelio’s cross-examination, Ethicon challenged Tyco Healthcare’s asserted ownership of the patents for the first time.

The following day, a Saturday, Tyco Healthcare produced the Contribution Agreement, which allegedly documents the 1999 transfer of title of the patents from USSC to Kendall (now named Tyco Healthcare). On the Monday, Mr. Amelio was recalled as a witness and testified that ownership of the patents-in-suit was transferred from USSC to Kendall.

At the close of Tyco Healthcare’s casein-chief, Ethicon moved for judgment as a matter of law on the issue of standing, contending that Tyco Healthcare did not own the patents-in-suit. The district court held Ethicon’s motion in reserve but ultimately granted it and dismissed the case without prejudice.

Tyco Healthcare timely appealed, and Ethicon timely cross-appealed. We have jurisdiction under 28 U.S.C. § 1295(a)(1).

II. DISCUSSION

A plaintiff generally has the burden of proving standing to sue. Lujan v. Defenders of Wildlife, 504 U.S. 555, 561, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992). “[T]o assert standing for patent infringement, the plaintiff must demonstrate that it held enforceable title at the inception of the lawsuit.” Paradise Creations, Inc. v. UV Sales, Inc., 315 F.3d 1304, 1309 (Fed.Cir.2003).

The ownership of the patents-in-suit here rests, in part, on the correct interpretation of a particular phrase of the Contribution Agreement. Under Delaware law, which governs the Contribution Agreement, “the role of a court [when interpreting a contract] is to effectuate the parties’ intent.” Lorillard Tobacco Co. v. Am. Legacy Found., 903 A.2d 728, 739 (Del.2006).

The contractual phrase in dispute is “related to pending litigation.” If the patents-in-suit are “related to” any litigation involving USSC pending at the time the Contribution Agreement became effective, then the patents were not transferred to Kendall (and thus Tyco Healthcare) but stayed with USSC. If the patents were not related to the pending litigation, they are beyond the scope of the “Excluded Assets” provision and therefore Kendall received ownership of the patents.

The contract gives no explicit definition of the phrase “related to pending litigation.” Tyco Healthcare argues that the phrase includes only patents asserted in a pending litigation or patent applications in the same family as an asserted patent. But that view is too narrow based on the language of the Contribution Agreement. In general, “related to” means one thing has some relationship or connection to another thing. See Random House Webster’s Unabridged Dictionary 1626 (1998) (defining “related” to mean “associated, connected” and “allied by nature, origin, kinship, marriage, etc.”); see also Lorillard, 903 A.2d at 740 (“When a term’s definition is not altered or has no gloss in the [relevant] industry it should be construed in accordance with its ordinary dictionary meaning.”) (quotation marks omitted). In legal parlance, “related” takes meanings with similar breadth. See Black’s Law Dictionary 1288 (6th ed. 1991) (defining “related” as “[standing in relation; connected; allied; akin”); see also 28 U.S.C. § 1367(a) (granting supplemental jurisdiction over claims “so related to” a claim based on original jurisdiction); Times Mirror Magazines, Inc. v. Field & Stream Licenses Co., 294 F.3d 383, 390 (2d Cir.2002) (“Possession of a famous or strong mark entitles the possessor to [1379]*1379broad protection for related goods.”). In many patent contexts, the term “related” adopts a similarly encompassing meaning. See, e.g., In re Fallaux,

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Bluebook (online)
587 F.3d 1375, 2009 U.S. App. LEXIS 26568, 2009 WL 4546935, Counsel Stack Legal Research, https://law.counselstack.com/opinion/tyco-healthcare-group-lp-v-ethicon-endo-surgery-inc-cafc-2009.