United States District Court, D. Massachusetts
MEMORANDUM AND ORDER
Janssen Biotech, Inc. ("Janssen") alleges that
defendants Celltrion Healthcare, Co., Ltd. and Celltrion,
Inc. (together, "Celltrion"), and Hospira, Inc.
("Hospira") have infringed U.S. Patent No. 7, 598,
083 (the "'083 Patent"). Defendants have moved
to dismiss for lack of standing. They claim that Janssen
lacks standing because it is not the sole owner of the
•083 Patent and the other co-owners have not joined
Janssen as plaintiffs as required by Section 262 of the
Patent Act, 35 U.S.C. §262. See Ethicon, Inc. v.
U.S. Surgical Corp., 135 F.3d 1456, 1467 (Fed. Cir.
1998). In particular, defendants allege that the inventors,
in a series of employee secrecy agreements (the
"Agreements"), assigned the rights to the '083
Patent to more than 200 other companies, including Johnson
and Johnson ("J&J") and its subsidiaries and
court, however, finds that the Agreements assigned the patent
rights to Janssen's predecessor Centocor, Inc.
("Centocor") alone. Therefore, Janssen is the sole
owner of the '083 Patent and is not required to join any
other party to maintain this action. Accordingly, the motion
to dismiss is being denied.
COMPLAINT AND PROCEDURAL HISTORY
facts as alleged in the complaint are as follows.
produces Remicade, a biologic medicine whose active
ingredient is a monoclonal antibody called infliximab.
See Compl. at SISI38. Growing the cells that produce
biologic medicines like infliximab requires a composition
called "cell culture media." Janssen alleges that
it holds the '083 Patent. The patent claims a
"soluble composition suitable for producing a final
volume of cell culture media, " and lists 61 ingredients
in varying concentrations. Compl. Ex. A. It names as
inventors David Epstein, Roger Monsell, Joseph Horowitz,
Susan Lenk, Sadettin Ozturk, and Christopher Marsh. See
id. Centocor, Janssen's predecessor, is named as the
assignee. See id.
produces a biosimilar to Remicade called Inflectra, which
received Food and Drug Administration ("FDA")
approval on April 5, 2016. See id. at ¶ 52.
Third-party HyClone makes the cell culture media that
Celltrion uses to produce its biosimilar infliximab product.
Id. at ¶ 7. Hospira collaborates with Celltrion
to market Inflectra. See id. at 59. Plaintiff
alleges that Celltrion infringes the '083 Patent by
employing HyClone to manufacture the media under Celltrion*s
direction and control, and by inducing HyClone to infringe
the patent. See id. at 551, 101, 111. It
alleges that Hospira is liable for Celltrion's actions as
a joint venturer and induces Celltrion to infringe the patent
by ordering Inflectra from it, among other things. See
id. at 583.
March 6, 2015, plaintiff initiated Civil Action No. 15-10698
(the "2015 Action") alleging, among other things,
technical infringement of the '083 Patent under the
Biologies Price Competition and Innovation Act. On June 14, 2016,
after obtaining more information in discovery, plaintiffs
filed a second action alleging actual infringement of the
'083 Patent under the Patent Act, 35 U.S.C. §271(a)
and (b) . The cases were consolidated and scheduled for trial
beginning on February 13, 2017.
January 18, 2017 scheduling conference, the parties requested
that the court address certain legal issues concerning the
appropriate measure of damages and plaintiffs'
entitlement to a permanent injunction if defendants were
found to have infringed the '083 Patent. The court
subsequently ordered the parties to file memoranda addressing
their memorandum, defendants argued for the first time that
Janssen failed to join all co-owners of the '083 Patent
in either action and, therefore, lacked standing. In
particular, defendants argued that four of the inventors of
the '083 Patent had, in their Agreements with Centocor,
assigned their rights to the '083 Patent not only to
Janssen's predecessor, Centocor, but also to
Janssen's parent, J&J, and all of J&J's
subsidiaries and affiliates (together, the "J&J
Family" of companies) . As explained earlier, a
plaintiff's failure to join all co-owners in an action
for patent infringement requires dismissal without prejudice
for lack of jurisdiction. See Ethicon, 135 F.3d at
February 8, 2017, the court heard oral argument on the issue
of standing and found that the Agreements, which did not
clearly assign patent rights to Janssen's predecessor
Centocor, raise serious questions concerning its
jurisdiction. As the parties agreed, those questions required
the postponement of trial to permit the filing of a motion to
dismiss for lack of jurisdiction and limited additional
February 22, 2017, plaintiffs filed a motion to dismiss the
2015 and 2016 Actions for lack of standing due to plaintiffs1
alleged failure to join all co-owners of the '083 Patent.
The parties conducted limited discovery in connection with
that motion. On March 6, 2016, Janssen and J&J entered
into an agreement that states that Janssen is the sole owner
of the '083 Patent, and that neither J&J nor any of
its operating companies ever owned any interest in the
'083 patent. See C.A. No. 15-10698, Docket No. 521-7.
Janssen filed that agreement on March 8, 2017 with its
opposition to the motion to dismiss. See id.
30, 2017, before briefing concerning the motion to dismiss
was complete, the parties agreed to the dismissal of all of
the claims for infringement of the '083 Patent in the
2015 Action and the complete 2016 Action, each without
prejudice. See C.A. No. 15-10698, Docket No. 582 at
31, 2017, Janssen filed this case. Defendants again moved to
dismiss, arguing that the court lacks jurisdiction unless
Janssen joins each of the more than 200 members of the
J&J Family that defendants assert are co-owners of the
'083 Patent. On October 13, 2017, the court heard oral
argument on the motion.
Motion To Dismiss for Lack of Subject Matter
court must satisfy itself that it has subject-matter
jurisdiction before the merits of this case can be decided.
See Steel Co. v. Citizens for a Better Env't,
523 U.S. 83, 94-95 (1998). When, here, "the facts
relevant to the jurisdictional inquiry are not intertwined
with the merits of the plaintiff's claim...the trial
court is free to weigh the evidence and satisfy itself as to
the existence of its power to hear the case."
Torres-Negron v. J & N Records, LLC, 504 F.3d
151, 163 (1st Cir. 2007); see also DDB Techs., L.L.C. v.
MLB Advanced Media, L.P, 517 F.3d 1284, 1291-92 (Fed.
establish that the court has subject matter jurisdiction, the
plaintiff has the burden of proving by a preponderance of the
evidence that it has standing to sue. See Lujan v.
Defenders of Wildlife, 504 U.S. 555, 561 (1992).
co-owner acting alone lacks standing and must "join as
plaintiffs all co-owners" of the patent.
Ethicon, 135 F.3d at 1467 (citing Waterman v.
Mackenzie, 138 U.S. 252, 255 (1891)). In addition, any
co-owners must ordinarily consent to join an infringement
suit and cannot be joined involuntarily under Federal Rule of
Civil Procedure 19. See STC.UNM v. Intel Corp., 754
F.3d 940, 945-46 (Fed. Cir. 2014). In Ethicon, the
Federal Circuit characterized this standing requirement as
"a matter of substantive patent law, " which gives
"one co-owner...the right to impede the other
co-owner's ability to sue infringers by refusing to
voluntarily join in such a suit." 135 F.3d at 1468
(citing 35 U.S.C. §262). The rule protects alleged
infringers from being subject to multiple lawsuits, and
potentially conflicting rulings and judgments. See
IpVenture, Inc. v. Prostar Computer, Inc., 503 F.3d
1324, 1325 (Fed. Cir. 2007) (citing Indep. Wireless Tel.
Co. v. Radio Corp. of Am., 269 U.S. 459, 468 (1926)).
Interpretation of Patent Assignments
owners may assign or transfer their ownership interests in a
patent as personal property. See 35 U.S.C.
§261. Section 261 provides that patents "shall be
assignable in law by an instrument in writing" which may
"take the form of a patent license or any other written
instrument that transfers patent rights." Morrow v.
Microsoft Corp., 499 F.3d 1332, 1337 n. 3 (Fed. Cir.
2007) . "State law governs contractual obligations and
transfers of property rights, including those relating to
patents." Regents Of Univ. Of New Mexico v.
Knight, 321 F.3d 1111, 1118 (Fed. Cir. 2003). "[The
Federal Circuit] treats an agreement granting patent rights
as a contract and interpret[s] its terms consistent with the
choice of law provision in the agreement in question."
Diamond Coating Techs., LLC v. Hyundai Motor Am.,
823 F.3d 615, 618 (Fed. Cir. 2016).
case, the relevant Agreements state that New Jersey law
governs their terms. See Exhibit A to the
Declaration of Kenneth Dow (Docket No. 27-1) at 3, 6, 10, and
14 of 15. In interpreting a contract under New Jersey law,
the court must "discern and implement the common
intention of the parties." McMahon v. City of
Newark, 195 N.J. 526, 546 (2008). However, "a
contracting party is bound by the apparent intention he
outwardly manifests to the other contracting party. To the
extent that his real, secret intention differs therefrom, it
is entirely immaterial." Frangella v.
Frangella, 2013 WL 4792863, at *5 (
N.J.Super.Ct.App.Div. 2013). Therefore, the court's role
is to "consider what is written in the context of the
circumstances at the time of drafting and to apply a rational
meaning in keeping with the expressed general
purpose." McMahon, 195 N.J. at 546 (emphasis
added). "The quest is for the reasonably certain meaning
of the language used, taken as an entirety, considering the
situation of the parties, the attendant circumstances, the
operative usages and practices, and the objects the parties
were striving to achieve." George M. Brewster &
Sion, Inc. v. Catalytic Constr. Co., 17 N.J. 20, 32
(1954); accord Manahawkin Convalescent v.
O'Neill, 217 N.J. 99, 118 (2014)("Courts
enforce contracts based on the intent of the parties, the
express terms of the contract, surrounding circumstances and
the underlying purpose of the contract. ").
the terms of [a] contract are clear, " the court must
"enforce it as written and not...make a better contract
for either of the parties, " as "the parties are
entitled to make their own contracts." McMahon,
195 N.J. at 545-46. A contract is not "clear" and
is instead ambiguous "if its terms are susceptible to at
least two reasonable alternative interpretations, or when it
contains conflicting terms." Woodhaven Lumber &
Millwork, Inc. v. Monmouth Design & Development Co.,
Inc., 2014 WL 1326994, at *6 ( N.J.Super.Ct.App.Div.
2014); 5907 Blvd. L.L.C. v. W. N.Y. Suites, L.L.C.,
2013 WL 3762695, at *4 ( N.J.Super.Ct.App.Div. 2013). If the
contract is ambiguous, the court must give the contracting
"parties' practical construction of the contract...
controlling weight in determining a contract's
interpretation." Cty. of Morris v. Fauver, 153
N.J. 80, 103 (1998).
determine whether a contract is ambiguous, " and
"to discover the intention of the parties, " courts
may consider evidence outside the text of the contract.
Frangella, 2013 WL 4792863, at *5 (citing Conway
v. 287 Corp. Ctr. Assocs., 187 N.J. 259, 268-69 (2006))
. Such extrinsic evidence includes "the circumstances
leading up to the formation of the contract, custom, usage,
and the interpretation ...