IN RE: APPLICATION OF GEORGE W. SCHLICH; GEORGE W. SCHLICH, Petitioner, Appellant, v. THE BROAD INSTITUTE, INC., FENG ZHANG, NAOMI HABIB, and LE CONG, Respondents, Appellees.
No. 17-1377
United States Court of Appeals For the First Circuit
June 20, 2018
Torruella, Lipez, and Kayatta, Circuit Judges.
APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MASSCHUSETTS [Hon. F. Dennis Saylor IV, U.S. District Judge]
Melissa Arbus Sherry, with whom Michael A. Morin, Ryan C. Grover and Latham & Watkins LLP were on brief, for appellant.
Raymond N. Nimrod, with whom William B. Adams, Matthew D. Robson and Quinn Emanuel Urquhart & Sullivan LLP were on brief, for
TORRUELLA, Circuit Judge. George W. Schlich, a patent agent for Intellia Therapeutics, Inc., appeals from the district court‘s denial of a petition for discovery under
I. Background
A. Factual Background
The Broad Institute, Inc. is a nonprofit medical research organization founded in 2003 by Eli and Edythe Broad, alongside Harvard University, Harvard-affiliated hospitals, and the Massachusetts Institute of Technology. The nonprofit launched in 2004, focusing on the development of genomic research for the advancement of medical science. Dr. Feng Zhang is a member of the Broad Institute, and both Dr. Naomi Habib and Dr. Le Cong are Postdoctoral Associates who worked with Dr. Zhang. Dr. Zhang dedicates part of his research to the CRISPR-Cas9 system for genome editing.
Intellia is a “genome editing company” whose primary focus is the development of “potentially curative therapeutics” using the CRISPR-Cas9 system. Schlich is a European patent attorney providing legal services to Intellia in the EPO opposition proceedings against four of Broad‘s patents related to CRISPR-Cas9. Dr. Jennifer Doudna is a founding member of Intellia, and the company holds an exclusive
The CRISPR-Cas9 system emerged from research on certain bacteria that can precisely target and “carve up” genetic material. When applied to human DNA, the potential curative value of this technology is allegedly tremendous, and its potential worth is estimated to be in the billions of dollars.
Dr. Doudna and Dr. Emmanuelle Charpentier led a team working on the bacteria associated with the CRISPR-Cas9 technology and, on May 25, 2012, filed a provisional patent application3 at the United States Patent and Trademark Office (“U.S.P.T.O.“) for certain “methods and compositions” for “DNA modification.” Additionally, they published an article describing their findings in June 2012. See Martin Jinek et al., A Programmable Dual-RNA-Guided DNA Endonuclease in Adaptive Bacterial Immunity, 337(6096) Science 816 (2012).
On October 5, 2012, Dr. Zhang and other members of the Broad team, including Dr. Habib and Dr. Le Cong, submitted a manuscript that “reported the first successful programmable genome editing of mammalian cells using CRISPR-Cas9.” On December 12, 2012, Broad filed its first provisional patent application with the U.S.P.T.O. relating to genomic sequence manipulation, and subsequently filed several other related provisional patent applications in the following months.
Based on two provisional patent applications filed by Broad in December 2012 and January 2013, Thomas Kowalski, a U.S. Patent Attorney, filed a Patent Cooperation Treaty (“PCT“) application4 on behalf of Broad. Since Broad‘s provisional patent applications included various inventions, Kowalski and Dr. Smitha Uthaman conducted an inventorship study to determine the different inventions and the corresponding contributions from each inventor. Subsequently, Broad filed ten separate PCT applications. The subject matter of the initial provisional patent applications was divided among these PCT applications listing different inventors and a “divided priority” based on the findings of the inventorship study. Eventually, the PCT applications resulted in several European patents, which Intellia now challenges at the EPO.
Schlich filed oppositions with the EPO seeking the revocation of four of Broad‘s European patents. At the opposition proceedings, Schlich argued, among other things, that Broad‘s European patents cannot claim right of priority to Broad‘s provisional patent applications filed with the U.S.P.T.O. because the applicants listed in the latter are not the same as those listed in the subsequent PCT applications, as is required by European patent law. In response, Broad argued that United States law, and not European law, should determine whether its European patents can claim priority to the provisional applications because those provisional patent applications were filed in the United States.
B. Procedural History
In September 2016, Schlich filed an application for discovery under
On November 1, 2016, the district court ordered supplemental briefing after noting that the parties had not addressed the issue of the EPO‘s receptivity to the district court‘s assistance in providing the requested discovery prior to the hearing.5 The parties then submitted their supplemental briefs. Broad‘s submission included a declaration from a former EPO official, who stated that the issue presented by Schlich in his
On March 15, 2017, the district court denied Schlich‘s Motion for Reconsideration. Schlich timely appealed. Shortly after the notice of appeal was filed, the EPO issued a preliminary and non-binding opinion and summoned the parties for oral proceedings.
II. Discussion
A. Standard of Review
Because
B. Section 1782(a)‘s statutory requirements and the Intel factors
Today‘s
The district court‘s discretion to allow discovery if all
C. The district court‘s decision
Here, the district court addressed the statutory requirements and the discretionary Intel factors before arriving at its decision. It found that the first three statutory requirements were met, and assumed without deciding that the fourth requirement was also satisfied. In re Schlich, 2016 WL 7209565 at *6. Specifically as to the “for use” requirement, the district court noted as “undisputed” that “the material is requested for use in a pending [o]pposition proceeding before the EPO.” Id. at *3. It then considered the Intel factors. The district court found that the last two Intel factors weighed in favor of granting the discovery request because the request was “not obviously frivolous” nor appeared to be pursued for “improper means,” and because Broad “d[id] not contend that all of the information sought [was] confidential or would be damaging if revealed” and, in any event, the court could “narrowly tailor[]” the request and issue protective orders. Id. at *6-7. The district court, however, found that the first two discretionary factors weighed in favor of denying the petition. Id. at *4-5. Regarding the first Intel factor, the district court noted that Broad is a party in the foreign proceeding and, although Drs. Zhang, Habib, and Le Cong were not named parties, “the information sought from them relates to their employment with Broad” and “appears to come within the EPO‘s jurisdiction.” Id. at *4-5. With respect to the second discretionary factor, the court noted that “[t]he requested discovery relates to the issue of inventorship, yet inventorship determinations or disputes regarding inventorship seemed to be out of the jurisdiction of the EPO in opposition proceedings.” Id. at *5-6. The court also noted that Schlich had not shown that the requested discovery was relevant to the foreign proceeding.7 Id. at *6. After considering and balancing all of
Both parties agree that the only issue on appeal is the district court‘s interpretation of the second Intel factor. Specifically, Schlich argues that, as the party opposing discovery, Broad should have borne the burden of establishing, by authoritative proof,8 that the foreign tribunal would not be receptive to the discovery sought. He further claims that the district court erroneously inverted the burden of proof and required him to provide authoritative proof that the foreign tribunal would be receptive to the assistance of the court in obtaining discovery. Had the district court properly placed the burden of proof on Broad, Schlich‘s argument goes, it would have granted the discovery request because “Broad had not definitively and conclusively shown by authoritative proof or otherwise that the EPO would not be receptive to the discovery.”
Broad urges us to find Schlich‘s arguments on appeal waived. It argues that Schlich did not argue below that Broad bore the burden to demonstrate that the EPO would be unreceptive to the requested discovery, “let alone that Broad was required to submit ‘authoritative proof’ of the EPO‘s position.” Broad further argues that Schlich‘s arguments also fail on the merits because although Schlich -- as the “party seeking relief” -- did have the burden to prove the elements of his claim, the district court never placed the burden on Schlich to provide “‘authoritative proof’ of the EPO‘s receptivity -- indeed, that standard appears nowhere in the district court‘s decision.” Instead, Broad posits, the district court‘s determination “was based on undisputed evidence submitted by Broad” showing that the requested discovery was irrelevant to the foreign proceedings “and thus did not turn on the burden of proof.” We first address Broad‘s waiver argument. Because we conclude that Schlich‘s arguments were adequately preserved, we then turn to the merits of his arguments.
D. The arguments were adequately preserved
Broad acknowledges that Schlich addressed the “differing views” regarding who bore the burden of proof, but claims that he “did not take a position as to which view was correct” and, instead, argued in the district court that, under any of these views, the second Intel factor weighed in favor of granting the requested discovery. Broad further argues that Schlich did not develop the legal standard argument below. In consequence, according to Broad, Schlich has waived the arguments he now makes on appeal.
We find the issues adequately preserved below. Schlich raised the burden of proof argument in the district court, both in his writings prior to the hearing and at the hearing. On several occasions, Schlich recognized that the First Circuit has yet to determine the issue, but argued that Broad, as a respondent opposing discovery, should prove the foreign tribunal‘s unreceptivity. See, e.g., ECF No. 27, Transcript of Hearing at 14 (“[O]nce you show that the discovery is relevant . . . then the burden shifts to the opposing party, to
E. Merits
The Supreme Court has not established the appropriate burden of proof, if any, for any of the discretionary factors, or the legal standard required to meet that burden. Intel Corp., 542 U.S. at 264-65; see Certain Funds, 798 F.3d at 118 (noting that the Intel opinion lacks guidance regarding “minimum requirements or tests to be met“).
It is undisputed that Schlich, as the party seeking discovery under
There are differing views as to the second Intel factor. Some courts have ruled that the party opposing discovery bears the burden of proving that the foreign tribunal would be unreceptive to the evidence and that, absent such proof, the factor weighs in favor of granting discovery. See In re Chevron Corp., 633 F.3d 153, 162-63 (3d Cir. 2011) (the party opposing discovery bears the burden of proof as to the second Intel factor and thus must “present adequate evidence to support [its] contention” that the “foreign jurisdiction” is not receptive to the discovery sought); Euromepa S.A. v. R. Esmerian, Inc., 51 F.3d 1095, 1100 (2d Cir. 1995) (holding that “a district court‘s inquiry into the discoverability of requested materials should consider only authoritative proof that a foreign tribunal would reject evidence obtained with the aid of section 1782. . . . Absent this type of clear directive, however, a district court‘s ruling should be informed by section 1782‘s overarching interest in ‘providing equitable and efficacious procedures for the benefit of tribunals and litigants involved in litigation with international aspects‘” (quoting Senate Report at 3783)).
Other courts have required “authoritative proof” of the receptivity of the foreign tribunal before finding that this factor weighs in favor of discovery. See, e.g., In re Babcock Borsig AG, 583 F. Supp. 2d 233, 241 (D. Mass. 2008) (denying discovery until there was an affirmative indication of the relevant foreign tribunal‘s receptivity to the requested materials, despite recognizing it had authority under the statute to
Still other courts have not specifically placed a burden of proof on either party as to any of the Intel factors and, instead, seem to have neutrally analyzed the contentions and supporting evidence presented by all the parties in deciding whether to exercise their discretion. See, e.g., In re Clerici, 481 F.3d 1324, 1335 (11th Cir. 2007) (considering the “particular factual circumstances” of the case as to the first Intel factor; looking at the entire record to conclude that there was nothing in it “to suggest that the district court should have declined to grant the § 1782 application” as to the second and third Intel factors; and noting that if the party opposing discovery “wished to pursue his ‘unduly intrusive’ argument” under the fourth Intel factor, that party should have moved the court to limit discovery); see also Consorcio Ecuatoriano de Telecomunicaciones S.A., 747 F.3d at 1271, 1273 (noting that the Supreme Court established in Intel the “factors to be considered” and refusing to find abuse of discretion where the party opposing the discovery failed to substantiate its “blanket claim” that the discovery sought was unduly burdensome under the fourth Intel factor); Heraeus Kulzer, GmbH v. Biomet, Inc., 633 F.3d 591, 598 (7th Cir. 2011) (holding that the district court‘s denial of discovery was unreasonable because, among other things, the party opposing discovery “refus[ed] to present any evidence” in support of its contention that granting the discovery request would be burdensome); see also In re ASML U.S., Inc., 707 F. App‘x 476, 477 (9th Cir. 2017) (second Intel factor met because movant submitted “unrebutted declarations [] that the foreign tribunals would welcome the discoverable evidence“); Chevron Corp. v. Shefftz, 754 F. Supp. 2d 254, 261-62 (D. Mass. 2010) (acknowledging there are different views on who bears the burden of proof on the second Intel factor and taking “a middle ground between the two views“).
In Intel, the Supreme Court set out a list of factors -- rather than elements of a claim -- “that bear consideration” by the district court when it exercises its discretion under the statute, leaving it up to the district court to assign those factors weight based on the particular circumstances of each case. Intel Corp., 542 U.S. at 264. Because the Supreme Court gave great flexibility and discretion to district courts in weighing the different factors, we believe the Supreme Court did not intend to place a burden on either party. Rather, it intended for both parties to make their arguments as to all of the factors, and for the district court to then determine whom those factors favor. In this sense, we do not see the factors as creating a “burden” for either party to meet, but rather as considerations to guide the district court‘s decision. Both parties are free to argue their positions and submit evidence in support thereof, and the district court is then to consider all of that in weighing these factors. Of course, a party who relies on a “blanket assertion” or does not properly substantiate its contentions runs the risk of not persuading the court to exercise its discretion in its favor.
We understand the Second and Third Circuits’ reasoning for placing the burden of proof on the party opposing discovery, especially in light of the interest in “providing equitable and efficacious procedures for the benefit of tribunals and litigants involved in litigation with international aspects.” Euromepa S.A., 51 F.3d at 1100 (quoting Senate Report at 3783). We, however, do not believe that such a requirement is necessary to further these
Furthermore, requiring the party opposing discovery to present “authoritative proof” of the foreign tribunal‘s unreceptiveness, as Schlich proposes, could place pressure on the foreign tribunal and could exacerbate comity and parity concerns which “may be important as touchstones for a district court‘s exercise of discretion.” Intel Corp., 542 U.S. at 261. And, if the opposing party fails to provide such exigent proof, then that could give carte blanche to the moving party for seeking discovery that is only marginally relevant to the foreign proceeding, thus potentially promoting fishing expeditions. We thus believe that the construction we have given to the Intel factors is consistent with the purpose of the statute, as well as with Congress‘s intent to give the district court broad discretion to determine whether discovery is warranted in a specific case.
Here, both parties argued and submitted authority in support of their respective positions as to the EPO‘s receptivity to assistance from U.S. courts. Schlich pointed to Akebia Therapeutics, Inc. v. FibroGen, Inc., 793 F.3d 1108, 1112-13 (9th Cir. 2015), where, after the Ninth Circuit affirmed the district court‘s grant of discovery pursuant to
We note that the district court considered the relevance of the discovery sought as part of its consideration of the
However, even when a discovery request is sufficiently relevant to be deemed “for use” in a foreign proceeding, there is nothing that prevents district courts from considering relevancy under the discretionary Intel factors, including the second factor, which focuses on the “nature of the foreign tribunal, the character of the proceedings underway abroad, and the receptivity of the foreign government or the court or agency abroad to U.S. federal-court judicial assistance.” Intel Corp., 542 U.S. at 264. For example, although evidence may be broadly relevant to the applicant‘s claims in a foreign tribunal, the nature of the foreign proceedings and the rules of the foreign tribunal may relegate the information to marginal relevance. Where the information sought is only marginally relevant, the district court may decide to exercise its discretion to exclude the evidence because other concerns outweigh the need for the discovery. See Mees, 793 F.3d at 299 n.10 (noting that “[a] request that appears only marginally relevant to the foreign proceeding” may be denied as a discretionary matter because it “may in certain cases suggest that the application ‘is made in bad faith, for the purpose of harassment, or unreasonably seeks cumulative or irrelevant materials‘” (quoting Euromepa S.A., 51 F.3d at 1101 n.6)); In Re Green Dev. Corp. S.A. De C.V., No. CCB-15-2985, 2016 WL 640791 (D. Md. 2016) (finding the “for use” requirement satisfied where petitioner requested discovery in relation to an adverse party‘s alleged ex parte communications with the Honduran Supreme Court in order to submit that discovery to the Honduran Supreme Court and mitigate the effect of the improper communications, but ultimately denying the requested discovery under the Intel discretionary factors because the request was based on “sheer speculation,” among other reasons).
Here, although the information sought by Schlich may have been relevant to the EPO opposition proceeding in a general sense, the district court concluded that limitations on the EPO‘s jurisdiction to consider inventorship rendered it irrelevant. Accordingly, although the district court treated as “undisputed” Schlich‘s satisfaction of the “for use” statutory requirement, it was well within its discretion to conclude that the second discretionary factor weighed against ordering discovery because the information sought was irrelevant due to the nature of the proceedings before the EPO, and to deny the discovery request based on that conclusion.
For the reasons stated above, we conclude that the district court did not misapply the law in denying the requested discovery under
Affirmed.
TORRUELLA
CIRCUIT JUDGE