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University of Pittsburgh v. Varian Medical Systems

April 30, 2008

UNIVERSITY OF PITTSBURGH, PLAINTIFF,
v.
VARIAN MEDICAL SYSTEMS, INC., DEFENDANT.



The opinion of the court was delivered by: Arthur J. Schwab United States District Judge

ELECTRONICALLY FILED

ORDER ADOPTING SPECIAL MASTER'S REPORT AND RECOMMENDATION (DOC. NO. 254) IN PART; AND GRANTING DEFENDANT'S MOTION FOR SUMMARY JUDGMENT FOR LACK OF STANDING (DOC. NO. 127)

A. Defendant's Motion for Summary Judgment for Lack of Standing (Doc. No. 127)

On November 21, 2008, defendant filed a Motion for Summary Judgment for Lack of Standing, or in the Alternative, Motion for a Preliminary Hearing on the Issue of Standing (doc. no. 127). In essence, defendant sought dismissal of the case, arguing that since plaintiff was not the sole owner of the patents-in-suit because non-party CMU is a co-owner thereof, plaintiff lacks standing to sue for patent infringement. Said Motion was assigned to the Special Master pursuant to Text Order, dated November 26, 2007, and the matter thereafter was thoroughly briefed. See doc. nos. 127, 128, 130, 159, 160, 167, 170, 172.

B. Prior Related Order of Court

Instead of waiting for a ruling on said Motion by the Special Master, plaintiff filed with this Court, on December 5, 2007, a document entitled "Plaintiff University of Pittsburgh's Motion Pursuant to Federal Rule of Civil Procedure 19 to Join Carnegie Mellon University" (doc. no. 149). Defendant responded thereto with a document entitled "Defendant Varian Medical Systems , Inc.'s Opposition to Plaintiff University of Pittsburgh's Motion Pursuant to Federal Rule of Civil Procedure 19 to Join Carnegie Mellon University" (doc. no. 162). By Order dated December 14, 2007 (doc. no. 168), the Court denied said Motion pursuant to the June 4, 2007 Case Management Order (doc. no. 30), because said Motion was untimely in that new parties were to be added approximately 6 months earlier, by June 15, 2007, and discovery previously had closed on October 5, 2007, except for specific limited discovery. See Case Management Order of June 4, 2007 (doc. no. 30).

Importantly, this denial (doc. no. 168) was consistent with the ruling of the Court denying, as untimely, defendant's Motion to Amend Answer (doc. no. 236) to add an affirmative defense and counterclaim of inequitable conduct. See doc. no. 236. Although plaintiff vigorously and successfully opposed this motion of defendant as untimely, plaintiff sought to add a new party (CMU) in a more untimely manner.

C. Report and Recommendation of Special Master (doc. no. 254)

The Special Master on March 10, 2008, by Report and Recommendation, recommended that said defendant's Motion for Summary Judgment for Lack of Sanding (doc. no. 127) be granted. The Special Master found that (a) the case must be dismissed if a co-owner of the patents-in-suit is not joined in the action; (b) CMU is a co-owner of the patents-in-suit, and at the time of the commencement of the action (and to the present time) had rights in the patents-in-suit, despite the transfer of certain substantial rights; and (c) CMU thus is a necessary party to this action. Thereafter, the Special Master "recommended that the District Court grant the Motion for Summary Judgment . . . ."*fn1 This Court agrees with the analysis of the Special Master on this legal point, and approves and adopts the Report and Recommendation, in part, that the Motion for Summary Judgment for Lack of Standing (doc. no. 127) should be granted.

D. Dismissal With Prejudice

The next issue is whether the dismissal should be with or without prejudice. This issue has two (2) parts as follows: (1) Is the failure to join CMU as a necessary party correctable by adding CMU to the action now, after commencement of the case? - - an issue not addressed by Special Master; and (2) if the answer thereto is affirmative, should plaintiff in this particular case be permitted to add CMU as a party, approximately ten (10) months after the time to add new parties has closed, and approximately six (6) months after the close of discovery (see doc. no. 30), by this Court vacating its Order of December 14, 2007 (doc. no. 168) which denied plaintiff's prior Motion to Join CMU (doc. no. 149), and thus permitting plaintiff to file an Amended Complaint adding CMU?*fn2

a. The Case Must be Dismissed Because CMU Should Have Been Joined at the Commencement of the Action

Generally, United States patent law requires that all co-owners normally must join as plaintiffs in an infringement suit. International Nutrition Co. v. Horphag Research Ltd., 257 F.3d 1324, 1331 (Fed Cir. 2001). Where one co-owner possesses an undivided part of the entire patent, the joint owner must join all other co-owners to establish standing. Israel Bio- Engineering Project v. Amgen Inc., 401 F.3d 1299, 1305 (Fed Cir. 2005) (citing Prima Tek II, L.L.C. v. A-Roo Co, 222 F.3d 1372, 1377 (Fed Cir. 2000)). A contrary requirement would be in conflict with the text of Rule 19(a) of the Federal Rules of Civil Procedure. ("shall be joined as a party in the action if . . . the person claims an interest relating to the subject of the action and is so situated that the disposition of the action in the person's absence may . . . leave any persons already parties subject to substantial risk of incurring double, multiple, or otherwise inconsistent obligations by reason of the claimed interest.").

The majority of the authority holds simply that the co-owners must be joined and is silent on the issue of at what point they must be joined to the suit. However, one case from the Federal Circuit provides some guidance. In ...


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