Rembrandt Diagnostics, LP v. Alere, Inc. et al

MOTION to Dismiss for Failure to State a Claim and Lack of Standing

S.D. Cal.September 1, 2016

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ALERE DEFENDANTS’ NOTICE OF MOTION AND MOTION TO DISMISS 16-CV-00698-CAB-NLS J. ANTHONY DOWNS (pro hac vice) JDowns@goodwinlaw.com LANA S. SHIFERMAN (pro hac vice) LShiferman@goodwinlaw.com GOODWIN PROCTER LLP 100 Northern Avenue Boston, Massachusetts 02210 Telephone: 617.570.1000 Facsimile: 617.523.1231 LAUREL KILGOUR (SBN 269307) LKilgour@goodwinlaw.com GOODWIN PROCTER LLP Three Embarcadero Center, 24th Floor San Francisco, California 94111 Telephone: 415.733.6000 Facsimile: 415.677.9041 Attorneys for Defendants ALERE INC.; ALERE TOXICOLOGY SERVICES, INC.; AMEDICA BIOTECH, INC.; AMEDITECH, INC.; INNOVACON, INC.; INSTANT TECHNOLOGIES, INC.; INSTANT TECH SUBSIDIARY ACQUISITION INC. DBA U.S. DIAGNOSTICS; AND BRANAN MEDICAL CORPORATION [Additional Counsel on Signature Page] UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF CALIFORNIA SAN DIEGO DIVISION REMBRANDT DIAGNOSTICS, LP, Plaintiff, v. ALERE, INC., ALERE TOXICOLOGY SERVICES, INC., AMEDICA BIOTECH, INC., AMEDITECH INC., INNOVACON, INC., INSTANT TECHNOLOGIES, INC., U.S. DIAGNOSTICS, INC., INSTANT TECH SUBSIDIARY ACQUISITION INC. dba U.S. DIAGNOSTICS, BRANAN MEDICAL CORPORATION, and DOES 1-10, Defendants. Case No.: 16-cv-00698 CAB (NLS) ALERE DEFENDANTS’ NOTICE OF MOTION AND MOTION TO DISMISS FOR LACK OF STANDING AND FAILURE TO STATE A CLAIM Courtroom: 4C Judge: Hon Cathy Ann Bencivengo Date: September 29, 2016 PER CHAMBERS, NO ORAL ARGUMENT UNLESS ORDERED BY THE COURT. Filed Concurrently with 1. Memorandum of Points and Authorities in Support of Alere Defendants’ Motion to Dismiss for Lack of Standing and Failure to State a Claim 2. Declaration of Lana S. Shiferman Case 3:16-cv-00698-CAB-NLS Document 58 Filed 09/01/16 Page 1 of 3 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ALERE DEFENDANTS’ NOTICE OF MOTION AND MOTION TO DISMISS 16-CV-00698-CAB-NLS 1 TO ALL PARTIES AND TO THEIR ATTORNEYS OF RECORD: PLEASE TAKE NOTICE THAT ON September 29, 2016 in Courtroom 4C of the courthouse located at 221 West Broadway, San Diego, CA 92101, before the Honorable Cathy Ann Bencivengo of the United States District Court for the Southern District of California, Defendant Alere Inc. (“Alere”) on behalf of itself and various subsidiaries who are also named as defendants1 (collectively “Alere Defendants”), will and hereby does move the Court to Dismiss Case No. 16-cv- 00698-CAB-NLS for lack of standing and failure to state a claim. Although the Alere Defendants have moved for a stay of this case pending resolution of their pending petitions for inter partes review of both asserted patents (D.I. 35), because Plaintiff Rembrandt Diagnostics LP (“Rembrandt”) recently amended its complaint (D.I. 41), the Alere Defendants are compelled to respond to the Amended Complaint regardless of their pending motion to stay. The issues raised in this motion relate to Rembrandt’s standing to assert the patent infringement claims under both of the asserted patents. Alere respectfully requests that the court grant the pending motion to stay the case pending the IPRs, except with respect to the resolution of the issues raised by this motion to dismiss which raises fundamental issues as to whether this case should proceed at all in this Court. This Motion is based on this Notice of Motion and the following Memorandum of Points and Authorities, all papers cited therein, the Declaration of Lana S. Shiferman the pleadings and other papers on file in this action, and any further papers, evident, or arguments as may be submitted to the Court in connection with this Motion. 1 Alere Toxicology Services, Inc. (“Alere Toxicology”), Amedica Biotech, Inc. (“Amedica”), Ameditech, Inc. (“Ameditech”), Innovacon, Inc. (“Innovacon”), Instant Technologies, Inc. (“Instant Technologies”), Instant Tech Subsidiary Acquisition Inc. d/b/a US Diagnostics, and Branan Medical Corp. (“Branan”). Case 3:16-cv-00698-CAB-NLS Document 58 Filed 09/01/16 Page 2 of 3 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ALERE DEFENDANTS’ NOTICE OF MOTION AND MOTION TO DISMISS 16-CV-00698-CAB-NLS 2 Respectfully Submitted, Dated: September 1, 2016 By: s/ Lana S. Shiferman J. ANTHONY DOWNS (pro hac vice) JDowns@ goodwinlaw.com LANA S. SHIFERMAN (pro hac vice) LShiferman@ goodwinlaw.com GOODWIN PROCTER LLP 100 Northern Avenue Boston, Massachusetts 02210 Tel.: 617.570.1000 Fax.: 617.523.1231 LAUREL A. KILGOUR LKilgour@goodwinlaw.com GOODWIN PROCTER LLP Three Embarcadero Center 24th Floor San Francisco, California 94111 Tel.: 415.733.6000 Fax.: 415. 677.9041 NORA S. DAKESSIAN NDakessian@ goodwinlaw.com GOODWIN PROCTER LLP 601 S Figueroa Street, 41st Floor Los Angeles, California 90017 Tel.: 213.426.2500 Fax.: 213.623.1673 Attorneys for Defendants: ALERE INC.; ALERE TOXICOLOGY SERVICES, INC.; AMEDICA BIOTECH, INC.; AMEDITECH, INC.; INNOVACON, INC.; INSTANT TECHNOLOGIES, INC.; INSTANT TECH SUBSIDIARY ACQUISITION INC. DBA U.S. DIAGNOSTICS; AND BRANAN MEDICAL CORPORATION Case 3:16-cv-00698-CAB-NLS Document 58 Filed 09/01/16 Page 3 of 3 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ALERE DEFENDANTS’ MEMORANDUM OF POINTS AND AUTHORITIES ISO MOTION TO DISMISS 16-CV-00698-CAB-NLS J. ANTHONY DOWNS (pro hac vice) jdowns@goodwinprocter.com LANA S. SHIFERMAN (pro hac vice) lshiferman@goodwinprocter.com GOODWIN PROCTER LLP 100 Northern Avenue Boston, Massachusetts 02210 Telephone: 617.570.1000 Facsimile: 617.523.1231 LAUREL KILGOUR (SBN 269307) lkilgour@goodwinlaw.com GOODWIN PROCTER LLP Three Embarcadero Center, 24th Floor San Francisco, California 94111 Telephone: 415.733.6000 Facsimile: 415.677.9041 Attorneys for Defendants ALERE INC.; ALERE TOXICOLOGY SERVICES, INC.; AMEDICA BIOTECH, INC.; AMEDITECH, INC.; INNOVACON, INC.; INSTANT TECHNOLOGIES, INC.; INSTANT TECH SUBSIDIARY ACQUISITION INC. DBA U.S. DIAGNOSTICS; AND BRANAN MEDICAL CORPORATION [Additional Counsel on Signature Page] UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF CALIFORNIA SAN DIEGO DIVISION REMBRANDT DIAGNOSTICS, LP, Plaintiff, v. ALERE INC., ALERE TOXICOLOGY SERVICES, INC., AMEDICA BIOTECH, INC., AMEDITECH INC., INNOVACON, INC., INSTANT TECHNOLOGIES, INC., U.S. DIAGNOSTICS, INC., INSTANT TECH SUBSIDIARY ACQUISITION INC. dba U.S. DIAGNOSTICS, BRANAN MEDICAL CORPORATION, and DOES 1-10, Defendants. Case No.: 16-cv-00698 CAB (NLS) REDACTED MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF ALERE DEFENDANTS’ MOTION TO DISMISS FOR LACK OF STANDING, AND FAILURE TO STATE A CLAIM Courtroom: 4C Judge: Hon Cathy Ann Bencivengo Date September 29, 2016 PER CHAMBERS, NO ORAL ARGUMENT UNLESS ORDERED BY THE COURT. Filed Concurrently with 1. Notice of Motion and Motion to Dismiss 2. Decl. of Lana Shiferman in Support of Alere Defendants’ Motion to Dismiss Case 3:16-cv-00698-CAB-NLS Document 58-1 Filed 09/01/16 Page 1 of 25 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ALERE DEFENDANTS’ MEMORANDUM OF POINTS AND AUTHORITIES ISO MOTION TO DISMISS 16-CV-00698-CAB-NLS i TABLE OF CONTENTS Page I. INTRODUCTION AND SUMMARY ........................................................... 1 Ground 1: Rembrandt Lacks “All Substantial Rights” To Sue for Patent Infringement, Thus The Patent Claims Should Be Dismissed For Lack of Standing ............................................................................................................. 2 Ground II: Rembrandt’s State-Law Claims Against Alere Inc. Should Be Dismissed For Failure to State a Claim, as Alere Inc. is Not a Party to the License Agreement ............................................................................................ 4 II. BACKGROUND ............................................................................................. 5 III. APPLICABLE LAW ....................................................................................... 8 A. Rule 12(b)(1) ......................................................................................... 8 B. Standing ................................................................................................. 9 C. Failure to State a Claim ....................................................................... 12 IV. ARGUMENT ................................................................................................ 12 A. Rembrandt Lacks Prudential Standing Because Assurance Did Not Transfer to Rembrandt All Substantial Rights in Either Asserted Patent .................................................................................... 12 1. Assurance Did Not Transfer All Substantial Rights in the ‘019 Patent ................................................................................ 12 2. Rembrandt Does Not Have All Substantial Rights in the Asserted Patents Because Assurance Has Retained Substantial Rights ..................................................................... 14 B. Rembrandt Cannot Avoid Dismissal By Retroactively Attempting to Cure its Lack of Standing ............................................ 17 C. Rembrandt Has Failed to State a Claim for Any State Law Claims Against Alere Inc. ................................................................... 18 V. CONCLUSION ............................................................................................. 19 Case 3:16-cv-00698-CAB-NLS Document 58-1 Filed 09/01/16 Page 2 of 25 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ALERE DEFENDANTS’ MEMORANDUM OF POINTS AND AUTHORITIES ISO MOTION TO DISMISS 16-CV-00698-CAB-NLS i TABLE OF AUTHORITIES Page(s) Cases Alfred E. Mann Found. For Sci. Research v. Cochlear Corp., 604 F.3d 1354 (Fed. Cir. 2000) ............................................................ 3, 11, 13, 14 Alps South, LLC v. Ohio Willow Wood Co., 787 F.3d 1379 (Fed. Cir. 2015) ...................................................................... 10, 18 Ashcroft v. Iqbal, 556 U.S. 662 (2009) ............................................................................................. 12 AsymmetRx, Inc. v. Biocare Medical, LLC, 582 F.3d 1314 (Fed. Cir. 2009) ........................................................................ 2, 11 Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007) ............................................................................................. 12 Clouding IP, LLC v. Google, Inc., 61 F. Supp. 3d 421 (D. Del. July 28, 2014) ................................................ 4, 10, 16 Datatreasury Corp. v. Wells Fargo & Co., 522 F.3d 1368 (Fed. Cir. 2008) ...................................................................... 11, 14 Diamond Coating Techs., LLC v. Hyundai Motor America, 823 F.3d 615 (Fed. Cir. 2016) .............................................................. 3, 10, 11, 18 Elite Logistics Servs., Inc. v. ATX Techs., Inc., 2007 WL 2021755 (S.D. Tex. July 9, 2007) ........................................................ 12 Ethicon, Inc. v. United States Surgical Corp., 135 F.3d 1456 (Fed. Cir. 1998) ............................................................................ 11 D.L. ex rel. Junio v. Vassilev, 2015 WL 252014 (E.D. Cal. Jan. 20, 2015) ..................................................... 7, 10 Lujan v. Defenders of Wildlife, 504 U.S. 555 (1992) ............................................................................................... 9 Morrow v. Microsoft Corp., 499 F.3d 1332 (Fed. Circ. 2007) .......................................................................... 10 Case 3:16-cv-00698-CAB-NLS Document 58-1 Filed 09/01/16 Page 3 of 25 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ALERE DEFENDANTS’ MEMORANDUM OF POINTS AND AUTHORITIES ISO MOTION TO DISMISS 16-CV-00698-CAB-NLS ii Prima Tek II, L.L.C. v. A-Roo Co., 222 F.3d 1372 (Fed.Cir.2000) .............................................................................. 13 Propat Int’l Corp. v. RPost, Inc., 473 F.3d 1187 (Fed. Cir. 2007) ...................................................................... 12, 16 Quantum Corp. v. Riverbed Tech, Inc., 2008 U.S. Dist. LEXIS 11348 (N.D. Cal. Feb. 4, 2008) ...................................... 18 Raber v. Pittway Corp., 1992 WL 219016 (N.D. Cal. May 4, 1992) ......................................................... 12 Reddy v. Nuance Commc'ns, 2012 WL 4470509 (N.D. Cal. Sept. 26, 2012) ....................................................... 5 Rite-Hite Corp. v. Kelley Co., 56 F.3d 1538 (Fed. Cir. 1995) .............................................................................. 11 Schreiber Foods, Inc. v. Beatrice Cheese, Inc., 402 F.3d 1198 (Fed. Cir. 2005) .............................................................................. 9 Sicom Sys. Ltd. v. Agilent Techs., Inc., 427 F.3d 971 (Fed. Cir. 2005) ................................................................................ 9 Somers v. Apple, Inc., 729 F.3d 953 (9th Cir. 2013) ............................................................................ 5, 12 St. Clair v. City of Chico, 880 F.2d 199 (9th Cir. 1989) ........................................................................ 7, 9, 10 Tasini v. New York Times Co., Inc., 184 F. Supp. 2d 350 (S.D.N.Y. 2002) .................................................................... 9 Toxgon Corp. v. BNFL, Inc., 312 F.3d 1379 (Fed.Cir.2002) ................................................................................ 9 U.S. v. Gonzales & Gonzales Bonds and Ins. Agency, Inc., 728 F.Supp.2d 1077 (N.D. Cal. 2010) .................................................................. 19 VirnetX, Inc. v. Microsoft Corp., 2008 WL 8894682 (E.D. Tex. June 4, 2008) ............................................. 4, 10, 17 Warren v. Fox Family Worldwide, Inc., 328 F.3d 1136 (9th Cir. 2003) ................................................................................ 9 Case 3:16-cv-00698-CAB-NLS Document 58-1 Filed 09/01/16 Page 4 of 25 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ALERE DEFENDANTS’ MEMORANDUM OF POINTS AND AUTHORITIES ISO MOTION TO DISMISS 16-CV-00698-CAB-NLS iii Waterman v. Mackenzie, 138 U.S. 252 (1891) ....................................................................................... 10, 11 Wiav Solutions LLC v. Motorola, Inc., 631 F.3d 1257 (Fed. Cir. 2010) ............................................................................ 10 Statutes 35 U.S.C. § 100(d) ..................................................................................................... 10 35 U.S.C. § 261 .......................................................................................................... 10 35 U.S.C. § 271 .......................................................................................................... 14 35 U.S.C. § 281 .......................................................................................................... 10 Other Authorities Federal Rules of Civil Procedure 8(a)(2) ................................................................. 12 Case 3:16-cv-00698-CAB-NLS Document 58-1 Filed 09/01/16 Page 5 of 25 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ALERE DEFENDANTS’ MEMORANDUM OF POINTS AND AUTHORITIES ISO MOTION TO DISMISS 16-CV-00698-CAB-NLS 1 The Alere Defendants1 submit this memorandum of points and authorities in support of their Motion to Dismiss for Lack of Standing, and Failure to State a Claim. Preliminarily, the Alere Defendants note that, as the Court is aware, they have moved to stay this case pending resolution of their pending petitions for inter partes review of both asserted patents (D.I. 35). However, because plaintiff Rembrandt Diagnostics LP (“Rembrandt”) recently filed its First Amended Complaint (“FAC”), D.I. 41, while the Motion to Stay was still being briefed, the Alere Defendants nonetheless hereby respond to the Amended Complaint even though the Court has not yet acted upon the pending Motion to Stay. The issues raised in this motion relate to Rembrandt’s standing to assert the patent infringement claims under both patents, and for failure to state a claim as to its state law claims against Alere Inc. The Alere Defendants request that the Court grant the pending motion to stay the case pending the IPRs for the reasons stated in that motion and in the Alere Defendants’ Reply Brief, except with respect to the resolution of this Motion to Dismiss, which raises fundamental issues as to whether this case should proceed at all in this Court. I. INTRODUCTION AND SUMMARY Rembrandt, a non-practicing entity, sued the Alere Defendants on March 23, 2016, alleging infringement of two patents - the ‘019 and ‘291 patents -- as to which Rembrandt claimed to own “all right, title and interest.” D.I. 1 at ¶¶ 13-14.2 At the time the Alere Defendants answered the original complaint, Rembrandt had not provided the Alere Defendants with copies of the documents by which they purported to claim ownership in the asserted patents. Rembrandt then filed an 1 Alere Inc. (“Alere”), Alere Toxicology Services, Inc. (“Alere Toxicology”), Amedica Biotech, Inc.(“Amedica”), Ameditech, Inc. (“Ameditech”), Innovacon, Inc. (“Innovacon”), Instant Technologies, Inc. (“Instant Technologies”), Instant Tech Subsidiary Acquisition Inc. d/b/a US Diagnostics, and Branan Medical Corp. (“Branan”). 2 The two patents at issue are U.S. Patent No. 6,548,019 (“the ’019 patent”) and U.S. Patent No. 8,623,291 (“the ’291 patent”) (collectively, “the Asserted Patents”). Case 3:16-cv-00698-CAB-NLS Document 58-1 Filed 09/01/16 Page 6 of 25 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ALERE DEFENDANTS’ MEMORANDUM OF POINTS AND AUTHORITIES ISO MOTION TO DISMISS 16-CV-00698-CAB-NLS 2 Amended Complaint on August 5, 2016, with the Alere Defendants stipulating to the filing, but specifically reserving all rights to challenge the Amended Complaint. D.I. 36. The Amended Complaint retained the original patent infringement claims, and added two state law claims against defendant Alere Inc., alleging that Alere Inc. had breached a 2004 license agreement relating to the ‘019 patent, and had breached a covenant of good faith and fair dealing arising out of that license agreement. Rembrandt’s Amended Complaint should be dismissed on several grounds: Ground 1: Rembrandt Lacks “All Substantial Rights” To Sue for Patent Infringement, Thus The Patent Claims Should Be Dismissed For Lack of Standing Rembrandt lacks standing to sue for patent infringement of either of the Asserted Patents because it lacks “all substantial rights” in the patents. AsymmetRx, Inc. v. Biocare Medical, LLC, 582 F.3d 1314, 1319 (Fed. Cir. 2009). Rembrandt lacks such standing for multiple reasons: (1) Rembrandt’s rights in the patents-in-suit purportedly derive from agreements it entered into in April 2015 with the previous patent owner, Assurance Biotech, LLC (“Assurance”). When the April 2015 documents were entered into, and continuing through today, Rembrandt’s ownership rights in the patents were and are limited by the following events: (i) Assurance had previously executed with Applied Biotech, (which has since become a part of defendant Innovacon, one of the defendants in Rembrandt’s first claim for relief), an exclusive license agreement (the “2004 License”) ; (ii) , Case 3:16-cv-00698-CAB-NLS Document 58-1 Filed 09/01/16 Page 7 of 25 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ALERE DEFENDANTS’ MEMORANDUM OF POINTS AND AUTHORITIES ISO MOTION TO DISMISS 16-CV-00698-CAB-NLS 3 Each one of these types of grants of patent rights to third parties is the kind of rights that courts have recognized as providing grounds to dismiss patent claims for lack of standing, even if the patent plaintiff has legal title to the patent itself. See Alfred E. Mann Found. For Sci. Research v. Cochlear Corp. (“Alfred Mann Foundation”), 604 F.3d 1354, 1360 (Fed. Cir. 2000) (discussing nonexhaustive list of rights examined in standing analysis); Diamond Coating Techs., LLC v. Hyundai Motor America, 823 F.3d 615, 618 (Fed. Cir. 2016)(“We have not allowed labels to control by treating bare formalities of “title” transfer as sufficient to determine that an “assignment” of the entire exclusive right has occurred.”). (2) Rembrandt also lacks standing as to both Asserted Patents for reasons unrelated to the 2004 License, because the former patent owner Assurance even today retains significant control over Rembrandt’s activities, including without limitation - as set forth in Rembrandt’s own agreements with Assurance: Case 3:16-cv-00698-CAB-NLS Document 58-1 Filed 09/01/16 Page 8 of 25 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ALERE DEFENDANTS’ MEMORANDUM OF POINTS AND AUTHORITIES ISO MOTION TO DISMISS 16-CV-00698-CAB-NLS 4 Rembrandt’s rights as patent owner are thus limited in ways that strip it of substantial rights. See, e.g., Clouding IP, LLC v. Google, Inc., 61 F. Supp. 3d 421, 429 (D. Del. July 28, 2014)(Stark, J.) (“while the Symantec-Clouding Agreement was drafted to convey some substantial rights to Clouding, Symantec retained enough of the bundle of rights (for each patent) that, when the Agreement is viewed as a whole, Clouding does not possess “all substantial rights.”); VirnetX, Inc. v. Microsoft Corp., 2008 WL 8894682, at *3 (E.D. Tex. June 4, 2008) (finding that plaintiff lacked all substantial rights). (3) At the time that Rembrandt filed suit, Rembrandt also lacked the ability to sue licensee Applied Biotech or its successor-in-interest Innovacon for breach of the 2004 License Agreement. Although Assurance did assign Rembrandt certain ownership rights to the ‘019 patent, Assurance did not assign any rights to Rembrandt to enforce any terms of the 2004 License or to seek damages for alleged breach. Based on the record, Rembrandt clearly lacks standing to sue for infringement of the Asserted Patents because it did not possess “all substantial rights” in the patents at the time it filed its original complaint, and still does not do so today. Ground II: Rembrandt’s State-Law Claims Against Alere Inc. Should Be Dismissed For Failure to State a Claim, as Alere Inc. is Not a Party to the License Agreement The two state-law claims in the Amended Complaint -- for breach of the 2004 License and for breach of the implied covenant of good faith and fair dealing - should also be dismissed. They are asserted solely against Alere Inc., and not against any other defendant. See FAC at ¶¶ 56, 7. However, Alere Inc. is not a party to the 2004 License because it is not the Licensee. Case 3:16-cv-00698-CAB-NLS Document 58-1 Filed 09/01/16 Page 9 of 25 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ALERE DEFENDANTS’ MEMORANDUM OF POINTS AND AUTHORITIES ISO MOTION TO DISMISS 16-CV-00698-CAB-NLS 5 Rather, the Licensee is Innovacon, as the successor in interest to Applied Biotech. But Innovacon is not named as a defendant to the state-law counts. Rather, it is named as a defendant solely with respect to the two patent infringement counts. See FAC at ¶¶ 35, 46, 56, 71. The obligations that allegedly were breached - e.g., the obligations to pay sales-based and minimum royalties and submit statements to the Licensor - are all obligations of the Licensee, not of any Affiliate. See, e.g., Shiferman Decl. Ex. 1 at ¶¶ 2.1-3.8, 4.2.2. Thus, no claim for breach, or for breach of any implied covenant of good faith and fair dealing, lies against Alere Inc. Rembrandt’s state law claims against Alere Inc. should be dismissed for failure to state a claim. See Somers v. Apple, Inc., 729 F.3d 953, 959-60 (9th Cir. 2013).3 II. BACKGROUND Rembrandt filed the original Complaint in this action- which alleged only infringement of the ‘019 and ‘291 patents- on March 23, 2016. D.I. 1. Rembrandt alleged that it “owns all rights, title and interest” in the Asserted Patents. Id. at ¶¶ 13, 14. The Complaint did not attach any exhibits or reproduce language from any documents evidencing Rembrandt’s purported ownership. The Alere Defendants answered, and raised affirmative defenses and counterclaims on May 13, 2016. D.I. 25. The Alere Defendants’ affirmative defenses included a licensing defense. Id. at 18. Rembrandt answered the counterclaims on June 6, 2016. D.I. 28. Rembrandt filed its First Amended Complaint on August 5, 2016. D.I. 41. The Alere Defendants stipulated that the FAC could be filed, but specifically reserved all rights to challenge the Amended Complaint. D.I. 36.4 3 Should the present motion be denied in whole or in part, Alere Defendants respectfully reserve their right to respond to the complaint after the Court rules on this motion. See Reddy v. Nuance Commc'ns, No. 11-5632, 2012 WL 4470509, at *2 & n.3 (N.D. Cal. Sept. 26, 2012) (“by filing even a partial Rule 12(b)(6) motion, [the defendant's] time to answer or otherwise respond to the complaint [i]s extended”). 4 Id. at 1-2 (“Alere has agreed to join this motion solely for purposes of the procedural requirements for stipulations under Civil Rule 7.2. By joining this motion Alere states that it does not object to the filing of the Amended Complaint Case 3:16-cv-00698-CAB-NLS Document 58-1 Filed 09/01/16 Page 10 of 25 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ALERE DEFENDANTS’ MEMORANDUM OF POINTS AND AUTHORITIES ISO MOTION TO DISMISS 16-CV-00698-CAB-NLS 6 The FAC again alleged that Rembrandt “owns all rights, title and interest” in the Asserted Patents, again without attaching any exhibits or reproduce language from any documents evidencing Rembrandt’s purported ownership. FAC at ¶¶ 14- 15. This Response to the FAC is the first opportunity the Alere Defendants have had to bring the information in these documents and the question of the viability of Rembrandt’s standing and this Court’s jurisdiction to the Court’s attention. In addition to the originally alleged patent infringement counts, the FAC also alleges, for the first time, “alternative” counts for breach of contract and breach of the implied covenant of good faith and fair dealing arising out of the 2004 License executed by Assurance Biotech, LLC (“Assurance”) and Applied Biotech, LLC (“Applied Biotech”) on September 29, 2004. Id. at ¶¶ 55-74; id., FAC Ex. 3 (2004 License). Rembrandt alleges that the 2004 License was transferred from Applied Biotech to “Alere,” which was a term previously defined in the claims as referring to defendant Alere Inc. Id. at p. 1 line 2, ¶ 62 (“Alere is the successor, assign and/or Affiliate of Applied Biotech, or has otherwise assumed the obligations of Applied Biotech under the Agreement.”). Rembrandt’s claims for breach of contract and breach of the implied covenant of good faith and fair dealing are asserted against “Alere” only. See id. at ¶ 56, p 22 (heading), p. 24 (prayer for relief (g) and (h)). Rembrandt alleges that under the 2004 License, “Assurance Biotech granted a license under the ’019 patent and several other U.S. and foreign patents to Applied Biotech and its successors, assigns and Affiliates.” Id. at ¶ 59. Notably, Rembrandt does not allege that it has been assigned all of Assurance Biotech’s rights and obligations under the 2004 License. Rather, Rembrandt alleges that it “has acquired from Assurance Biotech the exclusive right to sue and collect damages for all past, present, and future breaches of the Agreement, including the royalty obligations, as well as the obligation to use reasonable commercial efforts to promote and market but does not concede that Rembrandt’s amendments state a cognizable claim. By joining this motion Alere does not waive and expressly reserves all its rights to challenge the newly added claims and/or pursue all available defenses.”) Case 3:16-cv-00698-CAB-NLS Document 58-1 Filed 09/01/16 Page 11 of 25 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ALERE DEFENDANTS’ MEMORANDUM OF POINTS AND AUTHORITIES ISO MOTION TO DISMISS 16-CV-00698-CAB-NLS 7 products falling within the scope of the patents licensed in the Agreement, so as to maximize royalties due under the Agreement.” Id. at ¶¶ 68, 72. The FAC is silent as to the timing of Rembrandt’s purported acquisition of rights, does not allege that Rembrandt had acquired such rights at the time it filed this lawsuit, and does not attach or reproduce language from any documents evidencing such acquisition. Although the FAC alleges certain breaches of the 2004 License, notably it does not allege that the 2004 License has been terminated. On July 20, 2016, shortly before it filed the FAC, Rembrandt produced certain agreements relating to the ‘019 and ‘291 patents, including:5 5 Because standing is a threshold jurisdictional issue, this Court may consider matters outside the pleadings to resolve a challenge to standing under Rule 12(b)(2). See D.L. ex rel. Junio v. Vassilev, No. 1:14-CV-0824, 2015 WL 252014, at *2 (E.D. Cal. Jan. 20, 2015)(citations omitted); see also St. Clair v. City of Chico, 880 F.2d 199, 201 (9th Cir. 1989) Case 3:16-cv-00698-CAB-NLS Document 58-1 Filed 09/01/16 Page 12 of 25 Case 3:16-cv-00698-CAB-NLS Document 58-1 Filed 09/01/16 Page 13 of 25 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ALERE DEFENDANTS’ MEMORANDUM OF POINTS AND AUTHORITIES ISO MOTION TO DISMISS 16-CV-00698-CAB-NLS 9 (“We review a dismissal for lack of subject matter jurisdiction according to regional circuit law, since it is a procedural question not unique to patent law.”). Motions brought under Rule 12(b)(1) may present either a facial or factual challenge to the Court's subject matter jurisdiction. See Warren v. Fox Family Worldwide, Inc., 328 F.3d 1136, 1139 (9th Cir. 2003). In reviewing a factual challenge to the Court’s subject matter jurisdiction, the Court is not confined to the allegations of the complaint, and the presumption of truthfulness does not attach to those allegations. Id. at 1139. Instead, the Court may consider evidence outside the pleadings to resolve any factual issues bearing on jurisdiction. Id. at 1141 n. 5. Once the Court's subject matter jurisdiction is challenged, the plaintiff bears the burden of proving jurisdiction exists. St. Clair v. City of Chico, 880 F.2d 199, 201 (9th Cir. 1989). B. Standing A patent plaintiff must have standing on the date it first filed suit, and bears the burden of establishing that it did by a preponderance of the evidence. See Sicom Sys. Ltd. v. Agilent Techs., Inc., 427 F.3d 971, 975-76 (Fed. Cir. 2005); Lujan v. Defenders of Wildlife, 504 U.S. 555, 561 (1992); Schreiber Foods, Inc. v. Beatrice Cheese, Inc., 402 F.3d 1198, 1202 n.3 (Fed. Cir. 2005) (“The initial standing of the original plaintiff is assessed at the time of the original complaint, even if the complaint is later amended.”). “An objection to standing is properly made on a Rule 12(b)(1) motion” and cannot be waived. Tasini v. New York Times Co., Inc., 184 F. Supp. 2d 350, 354-55 (S.D.N.Y. 2002). In resolving standing, a Court need not accept the plaintiff’s allegations as true and may consider matters outside the pleadings to satisfy itself that it has jurisdiction. See D.L. ex rel. Junio, 2015 WL 252014, at *2 (citations omitted); see also St. Clair, 880 F.2d at 201 (“Unlike a Rule 12(b)(6) motion, a Rule 12(b)(1) motion can attack the substance of a complaint’s jurisdictional allegations despite their formal sufficiency, and in so doing rely on affidavits or any other evidence properly before the court.”). Although Ninth Circuit law governs procedural matters Case 3:16-cv-00698-CAB-NLS Document 58-1 Filed 09/01/16 Page 14 of 25 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ALERE DEFENDANTS’ MEMORANDUM OF POINTS AND AUTHORITIES ISO MOTION TO DISMISS 16-CV-00698-CAB-NLS 10 not unique to patent cases, Federal Circuit law governs whether a plaintiff has sufficient rights in the patents-in-suit to assert patent infringement. Wiav Solutions LLC v. Motorola, Inc., 631 F.3d 1257, 1263 (Fed. Cir. 2010). A plaintiff must have prudential standing in addition to Constitutional standing. Wiav Solutions, 631 F.3d at 1265 n.1; see also Alps South, LLC v. Ohio Willow Wood Co., 787 F.3d 1379, 1382 (Fed. Cir. 2015) (“we must also satisfy ourselves that… the plaintiff also possessed standing as defined by § 281 of the Patent Act.”). The Patent Act provides that “[a] patentee shall have remedy by civil action for [patent] infringement.” 35 U.S.C. § 281 (emphasis added). The definition of ‘patentee’ includes “successors in title to the patentee,” who have acquired the patent by an assignment in writing. See Diamond, 823 F.3d at 617 (citing 35 U.S.C. §§100(d); 261 ¶ 2). Courts have found that in order to have standing to sue alone, a plaintiff must possess all substantial rights in the patent. See, e.g. Morrow v. Microsoft Corp., 499 F.3d 1332, 1339 (Fed. Circ. 2007) (“the entire bundle of sticks”); Clouding IP, LLC v. Google, Inc., 61 F. Supp. 3d 421, 429 (D. Del. July 28, 2014); VirnetX, Inc. v. Microsoft Corp., No. 6:07-cv-80, 2008 WL 8894682, at *3 (E.D. Tex. June 4, 2008); see also Waterman v. Mackenzie, 138 U.S. 252, 255 (1891).7 In assessing prudential standing, courts look at the operative agreement transferring patent rights. AsymmetRx, Inc. v. Biocare Medical, LLC, 582 F.3d 1314, 1319 (Fed. Cir. 2009). “To determine whether an assignment of patent rights was made, we must ‘examine whether the agreement transferred all substantial rights’ to the patents and ‘whether the surrounding circumstances indicated an intent 7 A party may also have standing to sue if it possesses an undivided partial interest in a patent or holds exclusive rights in a particular geography within the United States. Diamond, 823 F.3d at 618. Rembrandt, however, purports to be the sole owner nationwide, so this brief will not address the possibility of co-ownership. Alere Defendants note, however, that even if Rembrandt co-owned the patents with another entity, Rembrandt would need to join that entity as a party to this lawsuit. See, e.g., Ethicon, Inc. v. United States Surgical Corp., 135 F.3d 1456, 1467 (Fed. Cir. 1998); Rite-Hite Corp. v. Kelley Co., 56 F.3d 1538, 1552 (Fed. Cir. 1995). Case 3:16-cv-00698-CAB-NLS Document 58-1 Filed 09/01/16 Page 15 of 25 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ALERE DEFENDANTS’ MEMORANDUM OF POINTS AND AUTHORITIES ISO MOTION TO DISMISS 16-CV-00698-CAB-NLS 11 to do so.’” Id. (quoting Vaupel Textilmaschinen KG v. Meccanica Euro Italia S.P.A., 944 F.2d 870, 874 (Fed.Cir.1991)). Anything less than a transfer of all substantial rights is merely a license, in which case the title remains with the owner of the patent, and the licensee does not have the right to sue in its own name alone. See Alfred Mann Foundation, 604 F.3d at 1360. Form cannot trump substance; an examination of the actual rights transferred or retained is required. See Diamond, 823 F.3d at 618 (“We have not allowed labels to control by treating bare formalities of ‘title’ transfer as sufficient to determine that an ‘assignment’ of the entire exclusive right has occurred. Rather… to determine whether a provision in an agreement constitutes an assignment or license, one must… examine the substance of what was granted.”) (citations and internal quotation omitted); Waterman, 138 U.S. at 256 (“Whether a transfer of a particular right or interest under a patent is an assignment or a license does not depend upon the name by which it calls itself, but upon the legal effect of its provisions.”). Unless a plaintiff has “all substantial rights in the patents-in-suit at the time it file[s] suit… it [is] not a ‘patentee’” and “[cannot] bring [the] suit by itself.” Diamond, 823 F.3d at 619 (affirming dismissal for lack of standing). It is axiomatic that a patent owner cannot assign or otherwise transfer more rights than it possesses at the time of the transfer. See, e.g., Datatreasury Corp. v. Wells Fargo & Co., 522 F.3d 1368, 1372 (Fed. Cir. 2008) (“the owner of a patent cannot transfer an interest greater than that which it possesses,” and therefore “an assignee takes a patent subject to the legal encumbrances thereon.”); Abraxis, 625 F.3d at 1367 (finding that IP Assignment Agreement attempted to assign rights to existing patents, but was ineffective, because the assignor… did not own the patents at the time.”); Elite Logistics Servs., Inc. v. ATX Techs., Inc., No. CIV.A. G-02-866, 2007 WL 2021755, at *2 (S.D. Tex. July 9, 2007) (plaintiff was not exclusive licensee and did not have standing because patentee “had already granted such a license to [a third party]… Case 3:16-cv-00698-CAB-NLS Document 58-1 Filed 09/01/16 Page 16 of 25 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ALERE DEFENDANTS’ MEMORANDUM OF POINTS AND AUTHORITIES ISO MOTION TO DISMISS 16-CV-00698-CAB-NLS 12 which was still in effect… whether [plaintiff] knew of its existence or not” when it filed suit). Numerous courts have found purported “assignments” were, in fact, merely licenses that did not transfer legal title and the right to sue. See, e.g., Propat Int’l Corp. v. RPost, Inc., 473 F.3d 1187, 1192 (Fed. Cir. 2007) (affirming dismissal for lack of standing because agreement did not, as plaintiff argued, provide the “functional equivalent of an assignment,” but was instead a bare license); Raber v. Pittway Corp., No. C-91-2399, 1992 WL 219016, at *3 (N.D. Cal. May 4, 1992) (alleged assignment recorded with U.S. Patent and Trademark Office was mere license), aff’d 996 F.2d 318 (Fed. Cir. 1993). C. Failure to State a Claim A complaint must contain “a short and plain statement of the claim showing that the pleader is entitled to relief.” Fed. R. Civ. P. 8(a)(2). Under Rule 12(b)(6), a complaint may be dismissed for failure to state a claim upon which relief can be granted. Fed. R. Civ. P. 12(b)(6). Under Supreme Court precedent, a plaintiff’s “[f]actual allegations must be enough to raise a right to relief above the speculative level” to satisfy the Federal Rules. Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007). “[B]are assertions… [are] not entitled to be assumed true” for purposes of a Rule 12(b) motion. Ashcroft v. Iqbal, 556 U.S. 662, 681 (2009). Dismissal under Rule 12(b)(6) may be based on either the lack of a cognizable legal theory or on the absence of sufficient facts alleged under a cognizable legal theory. See Somers v. Apple, Inc., 729 F.3d 953 at 959-60 (9th Cir. 2013). IV. ARGUMENT A. Rembrandt Lacks Prudential Standing Because Assurance Did Not Transfer to Rembrandt All Substantial Rights in Either Asserted Patent 1. Assurance Did Not Transfer All Substantial Rights in the ‘019 Patent Substantial rights in the ‘019 patent were never transferred to Rembrandt for Case 3:16-cv-00698-CAB-NLS Document 58-1 Filed 09/01/16 Page 17 of 25 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ALERE DEFENDANTS’ MEMORANDUM OF POINTS AND AUTHORITIES ISO MOTION TO DISMISS 16-CV-00698-CAB-NLS 13 several reasons. First, as of March 23, 2016, the date that Rembrandt commenced this action, The FAC does not allege, and Alere Defendants are not aware of, any evidence that Assurance or any other entity transferred any rights to Rembrandt under the 2004 License before the date Rembrandt filed the Complaint. Assurance’s retention of important rights defeats Rembrandt’s standing.8 Second, the 2004 License gave Applied Biotech other substantial rights, 8 Even if Rembrandt were an exclusive licensee (which it is not), and Applied Biotech had not been granted substantial rights (which it was), Rembrandt would need to join Assurance due to Rembrandt’s lack of all substantial rights. See Prima Tek II, L.L.C. v. A-Roo Co., 222 F.3d 1372, 1377 (Fed.Cir.2000) (general rule is that “a patentee should be joined, either voluntarily or involuntarily, in any infringement suit brought by an exclusive licensee.”). At present, however, there is only one plaintiff, and that plaintiff lacks standing to sue. Case 3:16-cv-00698-CAB-NLS Document 58-1 Filed 09/01/16 Page 18 of 25 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ALERE DEFENDANTS’ MEMORANDUM OF POINTS AND AUTHORITIES ISO MOTION TO DISMISS 16-CV-00698-CAB-NLS 14 Even if Rembrandt had an exclusive license (which it did not), this provision would defeat standing because “the nature and scope of the licensor's retained right to sue accused infringers is the most important factor in determining whether an exclusive license transfers sufficient rights to render the licensee the owner of the patent.” Alfred Mann Foundation, 604 F.3d at 1361 (emphasis added). Here, rights were retained not just by Assurance, but also by Applied Biotech. And under the 2004 License, Assurance had no authority to give away Applied Biotech’s rights that it acquired as part of the 2004 License. It is axiomatic that “the owner of a patent cannot transfer an interest greater than that which it possesses,” and therefore “an assignee takes a patent subject to the legal encumbrances thereon.” Datatreasury Corp. v. Wells Fargo & Co., 522 F.3d 1368, 1372 (Fed. Cir. 2008) (citations omitted). Assurance, therefore, could not have assigned all enforcement rights to Rembrandt, and Rembrandt (even if it were an exclusive licensee, which it is not) could not sue Applied Biotech, an exclusive license, for patent infringement under 35 U.S.C. § 271. 2. Rembrandt Does Not Have All Substantial Rights in the Asserted Patents Because Assurance Has Retained Substantial Rights Even putting aside the 2004 License, Rembrandt has also produced agreements indicating that Assurance has at best granted Rembrandt limited enforcement rights under the ‘019 and ‘291 patents, and Assurance still retains significant control over any enforcement activities. Case 3:16-cv-00698-CAB-NLS Document 58-1 Filed 09/01/16 Page 19 of 25 Case 3:16-cv-00698-CAB-NLS Document 58-1 Filed 09/01/16 Page 20 of 25 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ALERE DEFENDANTS’ MEMORANDUM OF POINTS AND AUTHORITIES ISO MOTION TO DISMISS 16-CV-00698-CAB-NLS 16 Under these circumstances, Rembrandt has less than all substantial rights in the Asserted Patents. See, e.g., Propat, 473 F.3d at 1191-92 (patentee’s “power to terminate the agreement and end all of Propat’s rights in the patent if Propat fails to perform up to the specified benchmarks… is yet another indication that [patentee] retains a significant ownership interest in the patent.”); id. at 1194 (“reasonable efforts” requirement for licensing and enforcement was “more consistent with the status of an agent than a co-owner.”); Clouding IP, 61 F. Supp. 3d at 433-36 (finding that “when the Agreement is viewed as a whole, Clouding does not possess ‘all substantial rights,’” where purported assignor retained rights including right to bring suit, right to receive portion of recovery from infringement suits, and rights to reacquire patent in event of breach). VirtnetX is instructive. In that case, the plaintiff, VirnetX, executed various assignment and license agreements with the patent owner SAIC, and acquired all rights to the Patents-in-Suit, subject to a number of rights retained by SAIC, including, inter alia, “SAIC's right to prosecute a patent infringement suit if VirnetX Case 3:16-cv-00698-CAB-NLS Document 58-1 Filed 09/01/16 Page 21 of 25 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ALERE DEFENDANTS’ MEMORANDUM OF POINTS AND AUTHORITIES ISO MOTION TO DISMISS 16-CV-00698-CAB-NLS 17 fails to terminate the infringement, enter a reasonable license agreement, or bring an enforcement action against the infringer within a specified period of time,” and “SAIC's right to receive a percentage of VirnetX's revenues from licensing and a percentage of VirnetX's net recovery from proceedings against alleged infringers.” VirnetX, 2008 WL 8894682 at *3. The Court found that SAIC’s 35% equity interest in proceeds from infringement lawsuit, in combination with its control over enforcement, “weigh[ed] towards” a finding that Virtnetx did not have all substantial rights. Id. at *5-6. “[W]hile VirnetX may have the sole right to enforce the Patents-in-Suit, VirtnetX must act in a commercially reasonable manner, and given SAIC’s reversionary rights… SAIC has the right to influence or control VirnetX’s enforcement decisions, which… indicates that SAIC did not transfer all substantial patent rights to VirnetX.” Id. at *6. “SAIC’s retained rights are such that VirnetX does not have the right to indulge infringement, which weighs towards a finding that SAIC did not completely convey the exclusive right to sue.” Id. The Court concluded that “SAIC’s portions of the bundle of rights to the Patents-in-Suit is tantamount to an ownership interest rather than a bare license with no substantial patent rights,” so “VirtnetX does not hold all substantial rights in the Patents-in-Suit and does not have prudential standing to bring this infringement action.” Id. B. Rembrandt Cannot Avoid Dismissal By Retroactively Attempting to Cure its Lack of Standing Rembrandt cannot cure its prudential standing defects by arguing that it has (or could) perfect legal title through the Confirmation Agreement (which purports to “confirm” Rembrandt’s past rights in the 2004 License) or any other document Case 3:16-cv-00698-CAB-NLS Document 58-1 Filed 09/01/16 Page 22 of 25 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ALERE DEFENDANTS’ MEMORANDUM OF POINTS AND AUTHORITIES ISO MOTION TO DISMISS 16-CV-00698-CAB-NLS 18 executed after the date this action was filed. The Federal Circuit has repeatedly rejected such arguments. In Abraxis, for example, the plaintiff executed a written assignment with the patent owner several months after filing suit, but although that assignment properly transferred legal title and contained a nunc pro tunc provision attempting to give the assignment retroactive effect, the Federal Circuit found that this did not cure the lack of standing. Abraxis Bioscience, 625 F.3d at 1366 (“Even if the [post-filing] agreement is considered to be a nunc pro tunc assignment, for purposes of standing, Abraxis was required to have legal title to the patents on the day it filed the complaint and that requirement cannot be met retroactively.”); see also Diamond, 823 F.3d at 621 (affirming dismissal for lack of standing despite plaintiff’s post-filing execution of an agreement “purportedly to clarify the parties’ original intent; namely to grant full ownership of the patents in question”)(internal quotation omitted)(citing Alps South, 787 F.3d at 1384). Rembrandt, a sophisticated licensing entity, should have investigated its rights more carefully before filing this lawsuit. See Quantum Corp. v. Riverbed Tech, Inc., 2008 U.S. Dist. LEXIS 11348, at *10 (N.D. Cal. Feb. 4, 2008)(“In light of the proliferation of patent-infringement actions, it is not too much to ask sophisticated patent litigants to be careful when it comes to the threshold matter of standing”) . In short, Rembrandt’s lack of standing requires dismissal of the patent claims for relief, pursuant to Fed. R. Civ. P. 12(b)(1). C. Rembrandt Has Failed to State a Claim for Any State Law Claims Against Alere Inc. Rembrandt’s state law claims based on alleged breaches of the 2004 License or of an implied covenant of good faith and fair dealing arising out of that 2004 License should also be dismissed for failure to state a claim under Rule 12(b)(6). The only named defendant for these two claims is Alere Inc. As stated above, the rights of the original Licensee of the 2004 License, Applied Biotech, are now held by Defendant Innovacon. Case 3:16-cv-00698-CAB-NLS Document 58-1 Filed 09/01/16 Page 23 of 25 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ALERE DEFENDANTS’ MEMORANDUM OF POINTS AND AUTHORITIES ISO MOTION TO DISMISS 16-CV-00698-CAB-NLS 19 On January 27, 2011, Applied Biotech merged into Defendant Innovacon, such that Innovacon was the surviving entity. Shiferman Decl., Ex. 6 ¶ 1.1.11 Innovacon is a separate corporate entity from Alere Inc. D.I. 26 at ¶¶ 5-11. Accordingly, Innovacon is Applied Biotech’s successor to the 2004 License, not Alere Inc. The state law claims should be dismissed accordingly, as the Amended Complaint does not allege any facts that could make Alere Inc. liable under the claims. V. CONCLUSION For the foregoing reasons, the Alere Defendants respectfully ask this Court to grant their motion to dismiss for lack of standing and failure to state a claim. Dated: September 1, 2016 By: s/ Lana S. Shiferman J. ANTHONY DOWNS (pro hac vice) JDowns@ goodwinlaw.com LANA S. SHIFERMAN (pro hac vice) LShiferman@ goodwinlaw.com GOODWIN PROCTER LLP 100 Northern Avenue Boston, Massachusetts 02210 Tel.: 617.570.1000 Fax.: 617.523.1231 LAUREL A. KILGOUR LKilgour@goodwinlaw.com 11 This Court may take judicial notice of matters of public record without converting a motion to dismiss under Rule 12(b)(6) into a motion for summary judgment. See e.g., U.S. v. Gonzales & Gonzales Bonds and Ins. Agency, Inc., 728 F.Supp.2d 1077, 1081 (N.D. Cal. 2010). Applied Biotech’s merger agreement is on file with the Secretary of State of California. Case 3:16-cv-00698-CAB-NLS Document 58-1 Filed 09/01/16 Page 24 of 25 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ALERE DEFENDANTS’ MEMORANDUM OF POINTS AND AUTHORITIES ISO MOTION TO DISMISS 16-CV-00698-CAB-NLS 20 GOODWIN PROCTER LLP Three Embarcadero Center 24th Floor San Francisco, California 94111 Tel.: 415.733.6000 Fax.: 415. 677.9041 NORA S. DAKESSIAN NDakessian@ goodwinlaw.com GOODWIN PROCTER LLP 601 S Figueroa Street, 41st Floor Los Angeles, California 90017 Tel.: 213.426.2500 Fax.: 213.623.1673 Attorneys for Defendants: ALERE INC.; ALERE TOXICOLOGY SERVICES, INC.; AMEDICA BIOTECH, INC.; AMEDITECH, INC.; INNOVACON, INC.; INSTANT TECHNOLOGIES, INC.; INSTANT TECH SUBSIDIARY ACQUISITION INC. DBA U.S. DIAGNOSTICS; AND BRANAN MEDICAL CORPORATION Case 3:16-cv-00698-CAB-NLS Document 58-1 Filed 09/01/16 Page 25 of 25 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 DECL. OF LANA S. SHIFERMAN ISO ALERE DEFENDANTS’ MTD FOR LACK OF STANDING AND FAILURE TO STATE A CLAIM 16-CV-00698-CAB-NLS J. ANTHONY DOWNS (pro hac vice) JDowns@goodwinlaw.com LANA S. SHIFERMAN (pro hac vice) LShiferman@goodwinlaw.com GOODWIN PROCTER LLP 100 Northern Avenue Boston, Massachusetts 02210 Telephone: 617.570.1000 Facsimile: 617.523.1231 LAUREL KILGOUR (SBN 269307) LKilgour@goodwinlaw.com GOODWIN PROCTER LLP Three Embarcadero Center, 24th Floor San Francisco, California 94111 Telephone: 415.733.6000 Facsimile: 415.677.9041 Attorneys for Defendants ALERE INC.; ALERE TOXICOLOGY SERVICES, INC.; AMEDICA BIOTECH, INC.; AMEDITECH, INC.; INNOVACON, INC.; INSTANT TECHNOLOGIES, INC.; INSTANT TECH SUBSIDIARY ACQUISITION INC. DBA U.S. DIAGNOSTICS; AND BRANAN MEDICAL CORPORATION UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF CALIFORNIA SAN DIEGO DIVISION REMBRANDT DIAGNOSTICS, LP, Plaintiff, v. ALERE INC., ALERE TOXICOLOGY SERVICES, INC., AMEDICA BIOTECH, INC., AMEDITECH INC., INNOVACON, INC., INSTANT TECHNOLOGIES, INC., U.S. DIAGNOSTICS, INC., INSTANT TECH SUBSIDIARY ACQUISITION INC. dba U.S. DIAGNOSTICS, BRANAN MEDICAL CORPORATION, and DOES 1-10, Defendants. Case No.: 16-cv-00698 CAB (NLS) DECLARATION OF LANA S. SHIFERMAN IN SUPPORT OF ALERE DEFENDANTS’ MOTION TO DISMISS FOR LACK OF STANDING AND FAILURE TO STATE A CLAIM Courtroom: 4C Judge: Hon Cathy Ann Bencivengo Date September 29, 2016 PER CHAMBERS, NO ORAL ARGUMENT UNLESS ORDERED BY THE COURT. Filed Concurrently with 1. Notice of Motion and Motion to Dismiss 2. Memorandum of Points and Authorities in Support of Alere Defendants’ Motion to Dismiss Case 3:16-cv-00698-CAB-NLS Document 58-2 Filed 09/01/16 Page 1 of 4 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 DECL. OF LANA S. SHIFERMAN ISO ALERE DEFENDANTS’ MTD FOR LACK OF STANDING AND FAILURE TO STATE A CLAIM 16-CV-00698-CAB-NLS 1 I, Lana S. Shiferman, declare and state as follows: 1. I am a partner in the law firm of Goodwin Procter LLP, counsel of record for Defendants Alere Inc.; Alere Toxicology Services, Inc.; Amedica Biotech, Inc.; Ameditech, Inc.; Innovacon, Inc.; Instant Technologies, Inc.; Instant Tech Subsidiary Acquisition Inc. dba U.S. Diagnostics; and Branan Medical Corporation (“Alere Defendants”) in the above-entitled case. I have personal knowledge of the facts set forth in this declaration and, if called as a witness, could and would competently testify to the matters set forth herein. 2. Attached hereto as Exhibit 1 is a true and correct copy of a Patent Acquisition Agreement by and between Assurance Biotech LLC and Rembrandt IP Management, LLC. REMBRANDT00001237-82. (Alere Defendants are filing a separate motion seeking to file this exhibit under seal.) 3. Attached hereto as Exhibit 2 is a true and correct copy of a Confirmation and Amendment to Patent Assignment by Assurance Biotech LLC and Rembrandt Diagnostics, LP, dated June 8, 2016. REMBRANDT00001361-62 (Original Production on July 20, 2016). (Alere Defendants are filing a separate motion seeking to file this exhibit under seal.) 4. Attached hereto as Exhibit 3 is a true and correct copy of a Patent Assignment by Assurance Biotech LLC and Rembrandt Diagnostics, LP, dated September 18, 2015. REMBRANDT00000800-01. (Alere Defendants are filing a separate motion seeking to file this exhibit under seal.) 5. Attached hereto as Exhibit 4 is a true and correct copy of a Distribution Agreement by Rembrandt Diagnostics, LP and Assurance Biotech LLC, dated September 9, 2015. REMBRANDT00001363-70 (Original Production on July 20, 2016). (Alere Defendants are filing a separate motion seeking to file this exhibit under seal.) 6. Attached hereto as Exhibit 5 is a true and correct copy of an Assignment and Assumption Agreement by Assurance Biotech LLC and Rembrandt Case 3:16-cv-00698-CAB-NLS Document 58-2 Filed 09/01/16 Page 2 of 4 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 DECL. OF LANA S. SHIFERMAN ISO ALERE DEFENDANTS’ MTD FOR LACK OF STANDING AND FAILURE TO STATE A CLAIM 16-CV-00698-CAB-NLS 2 IP Management, LLC, dated September 9, 2015. REMBRANDT00001234-36. (Alere Defendants are filing a separate motion seeking to file this exhibit under seal.) 7. Attached hereto as Exhibit 6 is a true and correct copy of an Agreement and Plan of Merger by and between Applied Biotech, Inc. and Innovacon, Inc., dated January 27, 2011 and the accompanying Certificates, with acknowledgment by the Secretary of State on April 11, 2011 that “the foregoing transcript of 9 pages(s) is a full, true and correct copy of the original record in the custody of the California Secretary of State’s office.” I declare under penalty of perjury that to the best of my knowledge, the foregoing is true and correct. Executed this 1st day of September, 2016, at Boston, Massachusetts. /s Lana S. Shiferman Lana S. Shiferman Case 3:16-cv-00698-CAB-NLS Document 58-2 Filed 09/01/16 Page 3 of 4 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 DECL. OF LANA S. SHIFERMAN ISO ALERE DEFENDANTS’ MTD FOR LACK OF STANDING AND FAILURE TO STATE A CLAIM 16-CV-00698-CAB-NLS i INDEX OF EXHIBITS TO DECLARATION OF LANA S. SHIFERMAN EXHIBIT TITLE DATE PAGE 1 Patent Acquisition Agreement by and between Assurance Biotech LLC and Rembrandt IP Management, LLC. REMBRANDT00001237-82 04/07/15 3 2 Confirmation and Amendment to Patent Assignment by Assurance Biotech LLC and Rembrandt Diagnostics, LP. REMBRANDT00001361-62 (Original Production on July 20, 2016) 06/08/16 49 3 Patent Assignment by Assurance Biotech LLC and Rembrandt Diagnostics, LP. REMBRANDT00000800-01 09/18/15 51 4 Distribution Agreement by Rembrandt Diagnostics, LP and Assurance Biotech LLC. REMBRANDT00001363-70 (Original Production on July 20, 2016) 09/09/15 53 5 Assignment and Assumption Agreement by Assurance Biotech LLC and Rembrandt IP Management, LLC. REMBRANDT00001234-36 09/09/15 61 6 Agreement and Plan of Merger by and between Applied Biotech, Inc. and Innovacon, Inc. 01/27/11 64 Case 3:16-cv-00698-CAB-NLS Document 58-2 Filed 09/01/16 Page 4 of 4 EXHIBIT 1 [CONFIDENTIAL - LODGED UNDER SEAL] EXHIBIT 1 Case 3:16-cv-00698-CAB-NLS Document 58-3 Filed 09/01/16 Page 1 of 1 EXHIBIT 2 [CONFIDENTIAL - LODGED UNDER SEAL] EXHIBIT 2 Case 3:16-cv-00698-CAB-NLS Document 58-4 Filed 09/01/16 Page 1 of 1 EXHIBIT 3 [CONFIDENTIAL - LODGED UNDER SEAL] EXHIBIT 3 Case 3:16-cv-00698-CAB-NLS Document 58-5 Filed 09/01/16 Page 1 of 1 EXHIBIT 4 [CONFIDENTIAL - LODGED UNDER SEAL] EXHIBIT 4 Case 3:16-cv-00698-CAB-NLS Document 58-6 Filed 09/01/16 Page 1 of 1 EXHIBIT 5 [CONFIDENTIAL - LODGED UNDER SEAL] EXHIBIT 5 Case 3:16-cv-00698-CAB-NLS Document 58-7 Filed 09/01/16 Page 1 of 1 EXHIBIT 6 EXHIBIT 6 Case 3:16-cv-00698-CAB-NLS Document 58-8 Filed 09/01/16 Page 1 of 11 AGREEJ\'IENT AND PLAt'i Oii MERGEI{ 01069625 ENDORSED - FILED in the office of the Secretary of State of the State of California MAR 21 2011 THIS.AGREEMENT A1'il) PLAN OF Mli'.RGER (this "Agreement") is made and entered into this !"!'2. day of TtUl:_,_, 2011,by and betw~en APPUEIJJHOTECH, INC. a Callfomia corporation ("AB!''), with. and into lNNffVACON1 INC., a Delaware corporation (''lNNOVACON"). w ! IN!];; .~l.l:i ~I.H: 'WHEREAS, the parties hereto desire to merge Applie~l Biotech, Inc. with alid into · lnliovtK'Oil,. Inc, upon the terms and subject to the col1ditions set forth herein. (the "Merger")und ii1 ac.cqrdan~~ witl.1 the appiicable provisions of the Delaware General CorpqmtiouLaw ("DGCL"} and tl1e Getlei'al Cqrporatiim Law cfthc State of California (the "CGCL"); NOW, THEREFORE, FOR A°i'-ID IN CONSIDERATION oftho premises, the mutuill promises,.covenants and agrQeihcnts cmitalned herein, imJs practicable thereafter, the Surviving Corporatic1n shall file the executed Certificate of Merger with the Secretary of State of the State of l)e!aware Jn accordance with the applicable provisions of the DGCL. 1.3 California Certificate of Merger. As so•s. The Cerlificafo of lncorporailon and Bylaws of INNOVACON in effect immediately prior to the Effective Time shall be the Certificate o{facotiJOrJ.tiori and Bylaws of the Surviving Corporaiion. 2,2 Bnsiliess Address. The. p;incipal bnsiness address of the Sul'vlving C.\lrpotation is 9975 Sun1111ers Ridge Road, San Diego, CA 9212L 2.3 Se,,,.Jiee of Process. The Surviving Cornoration consent"S to the bringing ii1ts the Secwfary pf State ofthe State pf Delaware as its agent to accept servfoe of process in, any proceedfog in the State of Delaware to enforce agairistthe Stirvivti1g Corp0ralion il!lY obligation of any constitncJ.lt domest[c corporation or to enforce the rights of a clisse11ting shareholder of ariy constituent don1estic corporation. ART1CLE3 CJ\.NC}l;LLATION OJ<' STOCK 3.l The Merging Corpontfom Shares. Upon the Effective Time, by virtue of the Merger and without any action M the part u:f'the holder of any oul~tandil1g stock of Al;H, all authorized; issued and outstat1>!ing shares of ABI and all rights in :respect the:reof and the eertificatcs represciiting such shares shall be surrendered and cancelled. ARTICLE.4 TERwtfliiAWN 4.1 Termination Prior to Effective Thrte. Anytb.fog hq·ein or elsewhere. to the contrary notwithstamlfog, tllis Agreement may be terminated and abandoned by appropriate action of eitherABlor iNNOVACON at any fane prforto the Effective Time. ARTICLES MISCELLANEOUS 5.1 gntir~ Agreement. '!1iis Agre<;ment constitutes tlie entire agreement and undemanding concerning the subject matter hereof between the parties hereto. This Ag;eenietrt may not be modified ot amended, except by a writing executed by both patties hereto. S.2 BimliilgEffoet. This A&'feement shall be binding on and inure to the benefit of the parties hereto and their respective successors and iiss[gl1S. S.3 Governing Law. This Agrl"ement shall be govemed by at1d construed in accordance with the laws of the State of Ddawarec EXHIBIT 6 -65- Case 3:16-cv-00698-CAB-NLS Document 58-8 Filed 09/01/16 Page 3 of 11 SA CmmterparlS,. This Agr"Cet)1e!lt may )le ex.eµuteii in pne or 1110re counte1rmts, each of ~hich shall be deemed to :b6 an orig1mil, butilli ofwhfoh together shall ~oustitute thi;; same Agreement. Any signritµre page of miy suich cormlerpart, or any electronic foesfmik thereof, may be· atfatched or appended t() any ()ther couuterpr1rt to complete a fill!y e;;ecute-·~--- Nt\me: Brian Mitchell Title:.President INNOV ACON, 11'.'C. By:-~·-- -- - -·--·----··---- Name: Ellen. Chiniara Title: Secretary Al'PLIED.BIOTECH, JNC. By:·---·····-----··---·····-·· Nmlle: Ellen Chiniara Title: Assislant Secretary l EXHIBIT 6 -66- Case 3:16-cv-00698-CAB-NLS Document 58-8 Filed 09/01/16 Page 4 of 11 .......____ s>t . Coih.tt<-rnt>r!.§. •. This Ai ~~merit !u~Y be CXe(>l,liQ;l iq on~.<>r filOl)': co1mt,,rparis, ea6h of YJhfoh shull tie deeni:ed: tii be ; h origfoal, but \lll of wlti eh to$ether shall coustltilte tlw. same Agrnement. lp,iy si~tute]'.>i\g ~ of ai;.y sµch. qounte:rpui:l, '" any electrouic tacslµtllo the;eoi'.,.m~Y 1?e .attached or Jil and s_'ial! hh4 suchparty . . JN '\VI'rNES$ '~JR:EO:i.<\ th~ undeti;\g;nod Juwe caused their duly autltodzed rep~.eSentatiYes to execute t11is Agreel));t n_t ~S' of-tli~· day and= year first above Written. INNOVA.CON, INC. By: __ Nrune: Ji;.httBridgeu Title: President ::~b;;c. Niu:no~Bri1m Mitchell 1'iile: President 1NNOVACON, !NC. E)'l ...... ~f~-~ NM'.!o: EUenChlniara Title Secretary APP Lnim BlOTECH, !NC; B . . .r:>IJ f) . t'i. ;J - ' Y'-·---~ , Nam•e: EllonChiniara Title: Assistimt SeCY!ltary ~ 1 I EXHIBIT 6 -67- Case 3:16-cv-00698-CAB-NLS Document 58-8 Filed 09/01/16 Page 5 of 11 CERTWK:A'H: OF Ai'PROVA[, OF Afperj11i:yunelerthe laws ~fthe Statc;ofCa!lfomla that the l'llittlers s<'tforth in this Certlfii'.ste ate trt1e and cotre¢t of mu P'Wl knowledge. Date -1.~' ~""" Pau :·:r:-Hempe), Seci-etary ~ j EXHIBIT 6 -69- Case 3:16-cv-00698-CAB-NLS Document 58-8 Filed 09/01/16 Page 7 of 11 Exhibit A 'lJe[aware PAGE 1 'l1ie :first State I, JEFFREY W_ BULLOCK, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE CERTIFICATE OF MERGER, WHICH MERGES: "APPLIED BIOTECH, INC. "r A CALIFORNIA CORPORATION, WITH AND INTO "INNOVACON, INC." UNDER THE NAME OJI" "INNOVACON, INC." r A CORPORATION ORGANIZED AND EXISTING UNDER THE LAWS OF THE STATE OF DELAWARE r AS RECEIVED AND FILED IN THIS OFFICE THE TWENTY-EIGHTH DAY OF JANUARY, ILD. 2011, AT 12:44 O'CLOCK P.M_ AND I DO HEREBY FURTHER CERTIFY THAT THE EFFECTIVE DATE OF THE AFORESAID CERTIFICATE OF MERGER IS THE THIRTY-FIRST DAY OF JANUARY, A.D. 2011, AT 11:59 O'CLOCK P.M. A FILED COPY OF THIS CERTIFICATE HAS BEEN FORWARDED TO THE NEW CASTLE COUNTY RECORDER OF DEEDS. 3706187 8100M 110091691 You ma.y verify -this certi:t'icat:.e online at; aorp. delawa.re. gov /aut:hver. sll'twl Jeffrey W Bullock, secretmy ofState TION: 8529455 DATE: 01-31-11 EXHIBIT 6 -70- Case 3:16-cv-00698-CAB-NLS Document 58-8 Filed 09/01/16 Page 8 of 11 CERTIFICATE Oil' MERGER OF APPLIED BIOTECH, INC. a California Corporation WITH AND INTO INNOVACON, INC. a Delaware Corporation State of Delaware Secretary of State Division of-Corporations Delivered 01:16 PM 01/28/2011 FILED 12:44 PM 01/28/2011 SRV 110091691 - 3706187 FILE Pursuant to Section 252 of the Delaware General Corporation Law (the "Delaware Code"), the undersigned ltcreby certifies in connection with the merger ("the Merger") of APPLJE.D BIOTECH, INC., a California corporation, with and into lNNOVACON, INC., a Delaware cotporation, as follows: 1. the name and state of incorporation of each corporation party to 1he Mergeris: Name Applied Biotecb, Inc. Innovacon, lnc. State oflncorpmation California Delaware 2. The Agreement and Plan of Merger (the "Agreement") wm1 approved, adopted, executed and acknowledged by each of the constituent corporations in accmdance with Section 252 of the Delaware Code and appropriate provisions of ihe California Corporations Code, effective as of theJJ~"dayof. \nn11(1f3, 2011 3. 11te Certificate of Incorporation of lnnovacon, Inc. shall be the Certificate of Incorporation of the surviving corporation. 4. The name of the surviving corporation is lllnovacon, Inc. 5. The authorized capital stock of App!ted Biotech, Jue., the Califon1ia corporation, is Six Hundred Md Seventy Thousand (670,000) shares of Common Stock par value One Cent ($.01) per shnre. 6. The Mergershall l;lecome effective at II :59 p.m. EST onJ\l\\~1fil /ii ,g/)j\ j ' 7. The executed Agreement is on file at the principal place of business of I.he surviving corporation, which I$ located at 9975 Sununers Ridge Road, San Diego, CA 92121. 8. A copy of the A1,rreemcnt will be fumished by the surviving cruporation, on request und without cost, to any stockholder ofeither of the constituent corporations. I I I I I EXHIBIT 6 -71- Case 3:16-cv-00698-CAB-NLS Document 58-8 Filed 09/01/16 Page 9 of 11 IN WITNESS WHEREOF, the undersigned, as the surviving ci)!VOration in the Merger, has caused its duly autl1orized representative to execute this Certificate of Merger as of this ,lJ ' 1 ' day of J,.,;,,,¥,, , 201]. I INNOVACON, INC. ~ (;n r c By:~{J, O.Mfi.~.(4)1..~-_,, Nrune: EHe11 Chilliara Title: Secretary 1 ------- EXHIBIT 6 -72- Case 3:16-cv-00698-CAB-NLS Document 58-8 Filed 09/01/16 Page 10 of 11 I t1er1Jtiy c11rllfy th11 l(l rurcgomg lrtm~c11p1 ul pllg11!11) 1s .. f1,1ll, trull ilnd oormct wpy ol 1ft,, Qriglnlll record in th6 custody of tha CalifornlB Secretary of State's office APR 1 l 2011 ~ Date. _______ _ ~~~ DEBRA BOWEN, Secretary of State --·.... "·~- EXHIBIT 6 -73- Case 3:16-cv-00698-CAB-NLS Document 58-8 Filed 09/01/16 Page 11 of 11