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University of Pittsburgh v. Varian Medical Systems

December 17, 2008

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



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

MEMORANDUM OPINION

I. INTRODUCTION

This case involves a patent infringement claim brought by Plaintiff University of Pittsburgh ("Plaintiff") against Defendant Varian Medical Systems, Inc. ("Defendant"). This is Plaintiff's second action for patent infringement asserted against Defendant regarding the same two patents. By Order of April 30, 2008, this Court dismissed the previous action with prejudice due to lack of jurisprudential standing, in that Plaintiff failed to join the co-owner of the subject patents at the commencement of the lawsuit. Order of April 30, 2008, Civil Action No. 07-491 ("Varian I", doc. no. 294). Before this Court is Defendant's Motion to Dismiss (doc. no. 55) under Federal Rule of Civil Procedure 12(b)(6) on the grounds of claim preclusion/ res judicata, claiming in essence that the dismissal with prejudice of the prior action precludes the current action.

II. PROCEDURAL HISTORY

Plaintiff, in conjunction with Carnegie Mellon University ("CMU"), developed certain advances in medical technology that are covered by two patents: Patent No. 5,727, 554 ("the '554 patent") and Patent No. 5,784,431 ("the '431 patent"), collectively the "patents-in-suit." On April 13, 2007, Plaintiff alone initiated the first lawsuit by filing its Complaint contending that Defendant was infringing on the patents-in-suit. (Varian I, doc. no. 1). Thus began a heated litigation process. During the course of this action, Defendant discovered that Plaintiff owned the rights to the patentsin-suit jointly with CMU, prompting it to file a Motion for Summary Judgment for Lack of Standing.

A. Defendant's Motion for Summary Judgment for Lack of Standing in Varian I

On November 21, 2007, Varian filed a Motion for Summary Judgment for Lack of Standing (Varian I, doc. no. 127), claiming 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 Varian I, docs. nos. 127, 128, 130, 159, 160, 167, 170, 172).

B. Prior Related Order of Court

This Court rejected Plaintiff's subsequent attempt to join CMU through a motion pursuant to Federal Rule of Civil Procedure 19, stating as follows:

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" ([Varian I,] doc. no. 149). Defendant filed its brief in opposition to Plaintiff's Motion ([Varian I,] doc. no. 162). By Order dated December 14, 2007, ([Varian I,] Doc. no. 168), the Court denied said Motion pursuant to the June 4, 2007 Case Management Order ([Varian I,] doc. no. 30), because said Motion was untimely in that new parties were to be added approximately six months earlier, by June 15, 2007, and discovery previously had closed on October 5, 2007, except for specific limited discovery. (See [Varian I,] doc. no. 30). (Varian I, doc. no. 294 at 2).

C. Report and Recommendation ("R & R") of Special Master in Varian I

The Special Master issued his R & R on March 10, 2008 (Varian I, doc. no. 254). This Court explained the Special Master's R & R as follows:

On March 10, 2008, the Special Master, by Report and Recommendation, recommended that Defendant's Motion for Summary Judgment for Lack of Standing ([Varian I,] doc. no. 127) be granted. The Special Master found that CMU was a necessary party because it was a co-owner of the patents-in-suit and the case warranted dismissal if a co-owner of the patents-in-suit is not joined in the action. Thereafter, the Special Master "recommended that the District Court grant the Motion for Summary Judgment." (Varian I, doc. no. 294 at 2-3). However, the Special Master recommended the dismissal be "without prejudice," and recommended that Plaintiff be allowed leave to amend its Complaint and add CMU as a plaintiff.

D. This Court's Ruling on Defendant's Motion for Summary Judgment for Lack of Standing

This Court agreed with the Special Master's R & R to the extent that the Court should grant Defendant's Motion to Dismiss for Lack of Standing (Varian I, doc. no. 294), but disagreed with allowing Plaintiff to amend its complaint. This Court then held that adding CMU to the action approximately ten (10) months after the time to add new parties had closed and approximately six (6) months after the close of discovery would be untimely and unfair to Defendant, and accordingly dismissed the action with prejudice. ...


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