Sweet, D.J.
Plаintiffs Ferring B.V., Ferring International Center S.A., and Ferring Pharmaceuticals Inc. ("Ferring," the "Plaintiffs," or the "Counter-Defendants") have moved to certify this Court's May 24, 2018 decision ("Standing Decision" or "Standing Opinion") for interlocutory appeal under
Based on the conclusions set forth below, Plaintiff's motions are granted.
I. Prior Proceedings
Familiarity with the faсts and the prior proceedings in this action is assumed. See generally Ferring B.V. v. Allergan, Inc.,
On April 5, 2012, Ferring commenced this patent infringement action, alleging inventorship claims over certain patents owned at the time by then-Defendants Allergan, Ind., Allergan USA, Inc., and Allergаn Sales, LLC (together, "Allergan") related to formulations of desmopressin. Dkt. No. 1. Two years of motion practice followed, resulting in certain of Ferring's claims being dismissed as time-barred. See generally Ferring B.V. v. Allergan, Inc., No. 12 Civ. 2650 (RWS),
On August 31, 2015, the remainder of Ferring's claims were dismissed on summary judgment under the doctrine of equitable estoppel.
On January 7, 2016, this Court granted, in part, Ferring's summary judgment motion on Allergan's counterclaims, which left the remaining issue for trial whether Fein was a co-inventor on U.S. Patent Nos. 7,560,429 ("the '429 Patent") and 7,947,654 ("the '654 Patent," and, with the '429 Patent, the "Ferring Patents"). Ferring B.V. v. Allergan, Inc.,
In July 2017, following dissolution of an assignment agreement betwеen Allergan, Serenity, and Reprise, the three parties moved to substitute Reprise and Serenity in place of Allergan as Counterclaim Plaintiffs in this action; at the same time, Ferring moved to dismiss the surviving counterclaims for lack of standing. Dkt. Nos. 263, 269.
On September 14, 2017, the Court granted the substitution motion and denied Ferring's motion with leаve to renew. Ferring B.V. v. Allergan, Inc., No. 12 Civ. 2650 (RWS),
Trial commenced on February 21, 2018, at which time Fein testified. Fein stated that the March 2007 Agreement with Reprise was intended to assign Reprise the "ownership and interest" in his inventions for "low dose and sublingual and other routes of administration that could exploit the low dose hypothesis." Tr. 109:17-19.
On cross-examination, Fein made additional statements as to the agreements. Fein testified that the Ferring Patents did not, at the time of the Three-Way Agreement, meet all the stated descriptions of the patent rights to be assigned by Reprise under the agreement. For example, Fein stated that, at the time of the agreement, the Ferring Patents were not in Reprise's "sole and exclusive" ownership as stated to be true under the agreement. Tr. 251:13-252:20. The transferred rights that were returned to Reprise and Sеrenity from Allergan following the 2017 Reprise Assignment included only certain enumerated patents and did not include
During cross-examination of Fein, Ferring moved pursuant to Rule 52(c) to dismiss Defendants' counterclaims for lack of standing. Tr. 256:15-257:13. Accompanying their motion papеrs, Defendants moved to join Fein as a Counterclaimant pursuant to Rule 17. Dkt. No. 318. The motions were denied by the Court in its May 24, 2018 Standing Opinion, which found, in part, "whatever rights Fein had in the Ferring Patents prior to the 2007 Agreement-if any-were transferred to, and are now held by, Counterclaim Plaintiffs Reprise and Serenity." Ferring B.V. v. Allergan, Inc.,
On June 22, 2018, Ferring moved to certify for immediate appeal the Standing Opinion under
II. The Applicable Standards
While "it is a basic tenant of federal law to delay appellate review until a final judgment has been entered," (see Coopers v. Livesay,
When a district judge, in making in a civil action an order not otherwise appealable under this section, shall be of the opinion that such order involves (1) a controlling question of law (2) as to which there is substantial ground for difference of opinion and (3) that an immediate appeal from the order may materially advance the ultimate termination of the litigation, he shall so state in writing in such order.
III. Plaintiff's Motion for a Certificate of Appealability is Granted
a. The Standing Opinion Involves a Controlling Question of Law
Thе first statutory factor under Section 1292(b) is plainly established. "A question of law is controlling if reversal ... would terminate the action." See Klinghoffer v. S.N.C. Achille Lauro,
Because Counterclaim Plaintiffs' inventorship counterclaims are the only pеnding claims in this action, reversal would require dismissal of the entire action. See Ferring B.V. v. Allergan, Inc.,
b. There is Substantial Grounds for Difference of Opinion
The question of whether there is "substantial grounds for difference of opinion" is directed at the Court's Standing Finding: that a historical gap in standing, which is acknowledged only after it was cured by a Rule 25(c) substitution, need not result in dismissal. Relevant preсedent guides our conclusion that the Standing Finding presents substantial grounds for difference of opinion.
The two cases cited by this Court in finding that recognition of a historical standing defect need not result in dismissal are Mentor H/S, Inc. v. Med. Device All., Inc.,
To the extent this Court's factual findings uncover a historical standing defect as to Allergan in its position as Counterclaim Plaintiff in 2014, that defect was cured by this Court's 2017 Substitution Opinion. See Mentor H/S, Inc. v. Med. Device All., Inc.,, 1373 (Fed. Cir. 2001) (resolving temporal gap in standing by joining intellectual property licensee: "such joinder cures a technical jurisdictional defect"); see also Caterpillar Inc. v. Lewis, 244 F.3d 1365 , 73, 519 U.S. 61 , 117 S.Ct. 467 (1996) (where a "jurisdictional defect was cured ... before the trial commenсed," and "federal subject-matter jurisdiction [exists] at the time of trial," dismissal for lack of standing is improper). 136 L.Ed.2d 437
Ferring v. Allergan, 316 F. Supp. 3d at n.4.
In Mentor H/S, the Federal Circuit exercised appellate joinder under Rule 21 to join a third-party licensee of a medical device patent, after trial, for the purpose of curing a "technicаl jurisdictional defect" which existed following the assignment of intellectual property from Plaintiff to a third party.
In Caterpillar Inc., the Supreme Court held that subject matter jurisdiction existed where a non-diverse case was first brought in state court and later removed to federal court following dismissal of the non-diverse party.
As Ferring points out, however, the holding in Caterpillar has not been universally extended. Pl. Memo. in Support at 8, ECF No. 344. For example, in Grupo v. Atlas Global Group, the Supreme Court held that the Caterpillar holding was limited to situations where the issue of subject matter jurisdiction was not raised "at any point prior to the verdict or ruling." Grupo v. Atlas Global Group, L.P.,
Movants cite Schreiber Foods v. Beatrice Cheese, Inc. from the Federal Circuit for the position that "a jurisdictional defect cannot be cured by the addition of a party with standing."
In Schreiber, the original Plaintiff assigned its intellectual property rights to another entity before reacquiring the rights prior to the Court's decision and judgment.
Movants also cite Gerber Sci. Int'l, Inc. v. Satisloh AG, a 2009 District Court case from Connecticut, which noted in dicta that "if [Plaintiff] was not the rightful patent owner when the suit was brought, the case would be dismissed." No. 07-Civ-1382 (PCD),
While additional authorities on this question no doubt exist, the above case law presents substantial grounds for disagreement on the question оf whether a historical, rather than extant, gap in standing-which was cured in 2017 before it was recognized by the Court in 2018-must result in dismissal. See
c. Certification will Materially Advance the Litigation
An immediate appeal is "is considered to advance the ultimate termination of the litigation if that appeal promises to advance the time for trial or to shorten the time required for trial." See Transp. Workers Union, Local 100 v. N.Y.C. Transit Auth.,
On the other hand, as Counterclaim Plaintiffs suggest, if the Federal Circuit affirms the Standing Opinion, trial will resume at some point in the future, "further delay[ing] trial of the counterclaims filed four years ago," and "delay[ing] the ultimate termination of this litigation." Def. Memo, in Opp. at 4, ECF No. 345.
The prospect of continuing a trial in which subject matter jurisdiction is in doubt, however, counsels strongly in favor of immediate appeal. The "anomaly of a court trying a case without having jurisdiction to do so" is a potentiality that should be avoided, for purposes of judicial economy and fairness. See United States v. Boe,
IV. Plaintiff's Motion for a Stay is Granted
The "determination whether to enter a stay pending an interlocutory appeal is within the discretion of the district court." See Sutherland v. Ernst & Young LLP,
First, on the likelihood of success, Ferring contends that "a sufficient likelihood of success exists for the same reasons that justify an interlocutory appeal on standing." Pl. Memo in Support, at 10, ECF. No. 344. Ferring argues that the Standing Finding presents "substantial grounds for disagreement on the proper resolution of Ferring's Rule 52(c) standing motion and whether procedural substitution rules can cure a standing defect." Pl. Memo. in Support at 7, ECF No. 34 4. Counterclaim Plaintiffs do not dispute this. See Defs. Memo in Opp. at 3 n. 1 ("Serenity and Reprise assume, without conceding, that there is 'substantial ground for difference of opinion' with respect to the Court's determination that they have standing to pursue the counterclaim.").
Second, as to whether Ferring would be irreparably harmed if trial were to proceed with an intermediate appeal pending, the Court finds that it would. Continuation of trial at this stage, with a case-dispositive issue pending on appeаl, would drain parties' resources and the Court's. If on appeal the Federal Circuit reverses this Court's Standing Opinion, trial will have been a nullity, irreparably harming both parties.
Third, no evidence has been adduced to suggest a stay would harm either party. While a stay may prolong this litigation a few months, it has alreаdy gone on for nearly seven years. Moreover, trial will be resumed as soon as the Federal Circuit renders a decision on the appeal.
Nor would a stay affect disposition of the recently transferred case from Delaware concerning Ferring's new product, NOCDURNA, which involves different patents. See generally
Last, the public interest weights in favor of a stay. It would be a waste of resources-the parties', the Court's, and the public's-to proceed to a trial that turns out to be a nullity. For this reason, and the reasons above, a stay is warranted. Plaintiff's motion is granted.
Conclusion
For the reasons set forth above, Plaintiff's motion for a certificate of appealability is granted as to this Court's Standing Finding and its motion for a stay is granted.
It is so ordered.
Notes
Citations to "Tr." refer to the transcript of the trial held in this matter on February 21, February 22, and February 26, 2018, and any exhibits referenced therein.