Shelly Albaum
Nov 29, 2018
And now we have Elysium's Reply Brief in support of its motion to stay the patent infringement action in Delaware. You can read the reply brief here:
Elysium's Reply in Support of Stay
I was originally dubious of Elysium's stay motion, and then I was doubly-dubious so after reading ChromaDex's Opposition Brief, which left me thinking that the stay was so obviously unwarranted that one reasonably might ask why Elysium was hesitant to vindicate its rights in this infringement action.
Elysium's Reply Brief does not change my view.
Elysium comes out of the chute breathing fire:
Plaintiffs’ opposition brief ignores the governing legal standards, mischaracterizes the parallel IPR and patent misuse proceedings, relies on cases with facts that bear no resemblance to this case, and claims prejudice without any evidentiary support...
So far so, good but then after that I can't make much sense of Elysium's arguments.
Resolving All the Issues
For example, Elysium's first argument is,
"Plaintiffs incorrectly argue that a stay must be denied unless the pending parallel proceedings will resolve all of the issues in this case."
That, of course, is not the standard, and ChromaDex recited the correct standard in its Opposition. So I went back to the Opposition Brief to see where ChromaDex might have said that:
Despite Elysium’s unsupported speculation to the contrary (addressed below), the ’086 IPR cannot resolve the entire infringement dispute between the parties. Elysium’s attempt to stay this case based on that IPR should therefore be denied.
So Elysium is taking ChromaDex's statement out of context.
It was actually Elysium that had suggested that the entire controversy might be avoided, by falsely claiming in its original motion that the Patent Misuse counterclaim "may entirely dispose of this case" and "could completely resolve," and could "lead to an outright dismissal," and "may eliminate many, if not all, of the issues in dispute."
ChromaDex was calling out this argument as simply false.
ChromaDex's opposition brief applies the correct standard, which is whether the other pending matters would simplify the litigation. ChromaDex said there cannot be much potential simplification, because even if Elysium prevailed in the other actions most of the litigation would be untouched. That is reasonable argument based on the correct standard.
I find it a compelling argument, too, because patent validity is just one component of a patent infringement case. The other components, such as infringement, damages, and claim construction, should be roughly the same size, regardless of whether both the '086 and the '807 patents, or just the '807 patent, are at issue.
So the potential to remove half the patents does not remove half the litigation.
That well-explains why Elysium dangled all that false promise in its original motion that the entire matter could be resolved elsewhere, but it is a special kind of specious to then accuse ChromaDex of requiring that the entire matter must be resolved.
Simplifying The Issues
Elysium's second point is that "Resolution of the '086 IPR will simplify the issues in this case." But then get this argument:
The pending IPR could result in the invalidation of all claims of the ’086 patent and require dismissal of the entirety of Count II of Plaintiffs’ two-count complaint. This fact alone establishes that resolution of the pending IPR will simplify this case, and Plaintiffs do not argue otherwise. (emphasis added)
That's just a false statement. The pending IPR "COULD result in..." therefore it COULD simplify the case, not it "WILL" simplify the case. The difference between those two propositions goes right to ChromaDex's point in its opposition brief, which is that Elysium's stay request is built on "wishful thinking." ChromaDex can now add that Elysium's stay request is also built on fallacious argument.
Elysium resentfully objects to ChromaDex's characterizing Elysium's argument as "wishful thinking:"
Plaintiffs deride the possibility that the PTAB will adopt Elysium’s proposed construction of “isolated” as “wishful thinking” without even attempting to justify the PTAB’s initial construction of that term.
Then Elysium argues -- wildly -- that it should be granted a stay because the Delaware Court should assume that the PTAB is going to reverse its own claim construction, simply because the PTAB could do that. That is what ChromaDex was characterizing as "wishful thinking" and Elysium reasserts it. Whatever you think of wishful thinking -- some find it a virtue -- it is hardly the legal standard for a stay.
Elysium goes on to reassert familiar positions on Patent Misuse and delay, which I have elsewhere analyzed ad nauseam.
First-Filed Rule
I thought Elysium's invocation of the first-filed rule in the original brief was just batty. But Elysium doubles down with this quote:
Plaintiffs do not deny that the issues raised by Elysium’s earlier-filed patent misuse counterclaim in the California Litigation are identical to the issues raised by Elysium’s patent misuse defense in this case.
ChromaDex does not deny it? Let's go back and read what ChromaDex wrote:
There is no such identity between this case and the California Litigation. This case involves claims that Elysium infringes the ’086 and ’807 patents. There are no infringement claims in the California Litigation. That action instead involves claims for breach of contract and trade secret misappropriation, among others. The fact that Elysium has asserted a counterclaim for “patent misuse” in the California Litigation does not put it “materially on all fours with” this infringement action. Grider, 500 F.3d at 330.8 As discussed above, resolution of the counterclaim in the California Litigation, even assuming Elysium is successful, will only impact the time period for which ChromaDex can recover damages. It will not resolve the questions of infringement, validity, or quantum of damages that must be decided in this case. Consequently, the first-filed rule has no application here.
Obviously ChromaDex IS denying that the issues are identical. Elysium's sleight-of-hand is to confuse identical claims with identical proceedings.
It makes no sense that the similarity of a single claim would be sufficient to preempt and entire proceeding. After all, ChromaDex is asserting eight claims in California against two defendants -- none of which involves Patent Misuse -- and Elysium is asserting several additional claims that are not Patent Misuse, so there is almost no identity at all between the proceedings. They are not parallel, they are wildly askew.
So, let's do some independent research to see if Elysium is just making this up. Here is a 2017 article from the Florida Law Review analyzing the First Filed Rule (69 Fla. L. Rev. 657)
Because the first-filed rule intends to prevent duplicative litigation, it applies only where the actions before both courts involve the same or substantially similar parties and issues. See Oleg Cassini, Inc. v. Serta, Inc., No. 11 Civ. 8751(PAE), 2012 WL 844284, at *3 (S.D.N.Y. Mar. 13, 2012) (“For the rule to apply, the ‘claims, parties, and available relief’ must not ‘significantly differ between the actions.’ However, the issues need not be identical, and the named parties need not be entirely the same provided that they represent the same interests.” (citation omitted) (quoting Byron v. Genovese Drug Stores, Inc., No. 10-CV-03313, 2011 WL 4962499, at *3 (E.D.N.Y. Oct. 14, 2011))); Preci-Dip, SA v. Tri-Star Elecs. Int'l, Inc., No. 08 C 4192, 2008 WL 5142401, at *2 (N.D. Ill. Dec. 4, 2008); eNom, Inc. v. Philbrick, No. C08-1288RSL, 2008 WL 4933976, at *2 (W.D. Wash. Nov. 17, 2008) (“[T]he ‘sameness' requirement does not mandate that the two actions be identical, but is satisfied if they are ‘substantially similar.”’ (quoting Inherent.com v. Martindale-Hubbell, 420 F. Supp. 2d 1093, 1102 (N.D. Cal. 2006))); Intersearch Worldwide, Ltd. v. Intersearch Grp., Inc., 544 F. Supp. 2d 949, 958-60 (N.D. Cal. 2008) (holding first-filed rule applied where parties and claims were sufficiently similar). (emphasis added)
Notice the plural in "issues" and "claims" throughout. The overall proceeding must be similar, not just a single issue.
You're making things up again, Elysium.