Opinion
C. A. No. 10-433-LPS-MPT
02-05-2018
CORNELL UNIVERSITY, CORNELL RESEARCH FOUNDATION, INC., LIFE TECHNOLOGIES CORPORATION, and APPLIED BIOSYSTEMS, LLC, Plaintiffs, v. ILLUMINA, INC., Defendant.
MEMORANDUM ORDER
I. INTRODUCTION
Cornell University and Cornell Research Foundation, Inc. (referred to collectively as "Cornell" and individually as "Cornell University" and "CRF") are plaintiffs in this action, jointly with Life Technologies Corporation and Applied Biosystems, LLC (collectively "Life Tech"). On May 24, 2010, plaintiffs brought this lawsuit against defendant Illumina, Inc. ("Illumina") alleging infringement of certain patents. The parties entered into a settlement agreement effective April 14, 2017 (the "Settlement Agreement"), and a stipulation of dismissal pursuant to the Settlement Agreement (the "Dismissal") was entered on April 24, 2017. On June 21, 2017 Cornell filed a Motion to Vacate Stipulation of Dismissal Pursuant to Rule 60 and to Rescind Settlement Documents for Fraud or, Alternatively, for Leave to Conduct Discovery ("Motion to Vacate"). On August 31, 2017, Cornell filed its reply brief and two declarations in support of its Motion to Vacate. Currently before the court is Life Tech's Motion to Strike portions of Cornell's reply brief and supporting declarations.
D.I. 1.
D.I. 606-2.
D.I. 598.
D.I. 602. Life Tech subsequently filed a Cross-Motion to Dismiss or Stay Cornell's Motion and to Compel Mediation or Arbitration ("Cross-Motion"). D.I. 625.
D.I. 641, 644, 645.
D.I. 658.
II. BACKGROUND
In its Motion to Vacate, Cornell seeks vacatur of the Dismissal entered in this action because it was submitted pursuant to the Settlement Agreement with Life Tech and Illumina that Cornell was purportedly fraudulently induced to agree to. It also seeks rescission of the Settlement Agreement and an April 27, 2017 sublicense agreement entered into between Life Tech and Illumina (the "Sublicense Agreement") that was also part of the same allegedly fraudulent scheme. Alternatively, if the court believes more evidence is needed to support Cornell's requested relief, it asks for the opportunity to conduct discovery, which it contends would also help determine to what degree Illumina conspired in Life Tech's allegedly fraudulent scheme.
D.I. 603 at 1.
Id. Cornell also alleges the settlement of a suit brought by Illumina against Life Tech in the Southern District of California (the "Illumina California Action") shortly after this case was dismissed, is an additional part of Life Tech's alleged fraudulent scheme. Id. at 3.
Id. at 3.
In its Motion to Strike, Life Tech asserts Cornell waited until its reply in support of the Motion to Vacate to: (i) address for the first time the parties' rights and obligations under their New Exclusive License Agreement (the "NELA"), which should have been addressed in a full and fair opening brief under D. Del. LR 7.1.3(c)(2), and (ii) includes new factual allegations in support of Cornell's claim of fraud, including additional personal attacks against Life Tech's in-house counsel Rip Finst and Phil Makrogiannis. In support of Cornell's purportedly untimely new assertions, Cornell includes second declarations of Valerie Cross Dorn and Brian J. Kelly. According to Life Tech, those declarations include legal arguments about the parties' NELA and new factual allegations about a 1998 agreement between the parties (most of which are not referenced in the reply brief) to do an end-run around the 10-page limit for reply briefs recited in D. Del. LR 7.1.3(a)(4). Life Tech's motion seeks to strike Section D of Cornell's reply brief, portions of the Second Dorn Declaration, and the entirely of the Second Kelly Declaration. If, however, the court permits these new allegations, Life Tech requests the opportunity to submit a sur-reply with supporting declarations to address Cornell's new allegations and arguments.
D.I. 659 at 2.
D.I. 659 at 2 (citing D.I. 644 (Second Dorn Decl.) and D.I. 645 (Second Kelly Decl.)).
D.I. 659 at 2.
D.I. 641.
D.I. 644.
D.I. 645.
D.I. 659 at 2. Defendant Illumina joins Life's Tech's Motion to Strike and seeks the same relief identified in Life Tech's motion, some of which material also appears in Cornell's reply brief to Illumina's opposition to the Motion to Strike (D.I. 642), or, in the alternative, that Illumina be afforded an opportunity to submit a sur-reply of the same length and within the same deadline as the court may afford to Life Tech. D.I. 660.
III. LEGAL STANDARDS
Delaware Local Rule 7.1.3(c)(2) recites, in relevant part: "Reply Briefs. The party filing the opening brief shall not reserve material for the reply brief which should have been included in a full and fair opening brief." "This provision exists, in part, to prevent litigants from engaging in impermissible 'sandbagging,' reserving crucial arguments for a reply brief to which an opponent cannot respond." Arguments and evidence submitted in violation of this rule may be excluded.
D. Del. LR 7.1.3(c)(2).
Fifth Mkt., Inc. v. CME Grp., Inc., C.A. No. 08-520-GMS, 2013 WL 3063461, at *1 (D. Del. June 19, 2013) (citing Rockwell Techs., LLC v. Spectra-Physics Lasers, Inc., C.A. No. 00-589-GMS, 2002 WL 531555, at *3 (D. Del. Mar. 26, 2002)).
Fed. Election Comm'n v. O'Donnell, 209 F. Supp. 3d 727, 737 (D. Del. 2016) (finding argument waived when made for the first time in defendants' reply brief); see also Lab. Skin Care, Inc. v. Ltd Brands, Inc., 757 F. Supp. 2d 431, 438-39 (D. Del. 2010) (excluding certain evidence relied upon in defendants' reply brief that should have been included in their opening brief in violation of D. Del. LR 7.1.3(c)(2)); Jordan v. Bellinger, C.A. No. 98-230-GMS, 2000 U.S. Dist. LEXIS 19233, *17 n.7 (D. Del. Apr. 28, 2000) (declining to address new arguments reserved for the reply brief in violation of D. Dell LR 7.1.3(c)(2)).
Delaware Local Rule 7.1.3(a)(4) provides that "no reply brief shall exceed 10 pages, . . . exclusive of any table of contents or table of citations."
D. Del. LR 7.1.3(a)(4).
IV. DISCUSSION
Life Tech contends a central issue in Cornell's Motion to Vacate is whether Life Tech acted within its rights under the NELA in entering into the challenged agreements with Illumina. Life Tech maintains that with the NELA, Cornell granted Life Tech an exclusive license to the patents asserted in this case, the exclusive right to enforce those patents against Illumina, and sole control of this litigation, including the right to settle and to grant sublicenses under any terms. Despite Life Tech's contentions regarding that central issue, Cornell only addressed the NELA in passing in two footnotes in its opening brief.
D.I. 659 at 2.
Id. (citing D.I. 621 (Life Tech's answering brief in opposition to the Motion to Vacate) at 1-2, 4-6, 11-15).
Id. (Citing D.I. 603 at 16 n.1 & 17 n.2).
In its reply brief, however, Cornell included four pages of argument (Section D), and many additional pages in its declarations, substantively addressing the NELA for the first time. Life Tech states Cornell conceded these reply arguments were new, but justified its conduct by stating: "Cornell raised Life Tech's likely arguments regarding the NELA in its Opening Brief at pages 16 n.1 and 17 n.2, so it is fully within its rights to address those issues here." Life Tech maintains that contention is incorrect because Cornell knew Life Tech's "likely arguments" as it outlined those arguments in correspondence with Cornell well before Cornell filed its Motion to Vacate. Life Tech insists Cornell had no reasonable basis not to fully address those arguments in its opening papers. It, therefore, requests the court strike the arguments regarding the NELA (Section D) that Cornell decided to save for its reply brief.
Id.
Id. (quoting D.I. 641 at 6 n.6).
Id. (citing IC Ex. 26 at 2-7 (discussing NELA provisions 1.8, 4.5, 10.2, 14.1, 14.2, 14.3, and 16.1)). In addition to the parties' briefing on the Motion to Vacate and the Cross Motion, certain documents were submitted for in camera review to assist the court in its assessment of those pending motions. Those documents are cited in this Memorandum Order as "IC Ex. ___."
Id. at 2-3.
Id. at 3.
Cornell argues that its reply submissions were based directly on points contained in its opening papers or were in direct response to arguments made by Life Tech or Illumina. Cornell maintains Life Tech's motion is merely an attempt to undermine its ability to respond to Life Tech's and Illumina's arguments and should be denied in its entirety. It also asserts there are no grounds to grant leave to submit sur-replies.
D.I. 665 at 1.
Id.
Id.
Cornell contends there is no basis to strike Section D of its reply brief to Life Tech. It maintains Section D addresses Life Tech's arguments that the purported fraud it perpetrated was authorized or somehow excused by the parties' NELA and that Life Tech's assertion that Cornell should be barred from responding to the NELA defenses is baseless.
Id.
Id.
Cornell notes its Motion to Vacate seeks vacatur of the Dismissal and rescission of the Settlement Agreement and Sublicense Agreement based on alleged fraudulent conduct by Life Tech and Illumina. Cornell maintains in its opening brief and supporting declarations, it repeatedly referenced the NELA and submitted that Agreement to the court. Cornell states it did this despite the fact that Cornell's request for relief is based on the purported fraudulent conduct of Life Tech and Illumina, not the NELA.
Id. (citing D.I. 603).
Id. (citing D.I. 603 at pp. 3, 13; 604 at ¶¶ 1, 3; 605 at ¶¶ 1, 6; 606 at ¶¶ 2, 6, 36, 56 & Ex. A).
Id.
Cornell acknowledges it was aware Life Tech might attempt to rely on the NELA to justify its actions. In view of that, in its opening papers, Cornell maintains it expressly addressed and refuted Life Tech's anticipated defenses based on the NELA. Cornell states it foresaw that Life Tech might argue that regardless of its purported fraud, Life Tech's actions were authorized by the NELA, that the NELA obligated Cornell to sign the Settlement Agreement regardless of its terms, and that Cornell must arbitrate this dispute:
Id.
Id.
In response to this motion, Life Tech will likely argue that its actions were authorized by its license agreement with CRF and that Cornell needs to arbitrate this dispute. First nothing in the parties' license agreement authorizes Life Tech to defraud Cornell or obligated Cornell to sign the Settlement Agreement. This is why Life Tech had to deceive Cornell to obtain Cornell's signature. Second, Rule 60 relief cannot be granted by an arbitrator. Third, this dispute is not subject to any applicable arbitration obligation, because the arbitration clause in the Settlement Agreement only relates to an arbitration between Cornell/Life Tech versus Illumina.Cornell also anticipated that Life Tech would argue the NELA granted Life Tech the right to enter into the Sublicense Agreement without notice to or consent from Cornell:
Further, although not directly relevant to this motion, Life Tech was not authorized to enter into the Sublicense Agreement under Section 14.1 of the parties' license agreement, because that provision was only applicable for 90 days after that agreement went into effect in 2010.Cornell states it expressly addressed those likely Life Tech defenses in its opening brief even though Cornell's Motion to Vacate does not seek relief under the NELA. In its answering papers, Life Tech raised the same defenses Cornell anticipated and addressed in it opening brief. Life Tech argues that the NELA: (i) obligated Cornell to sign the Settlement Agreement regardless of its contents; (ii) excused its alleged fraud because Life Tech had the right to control this Action; (iii) empowered Life Tech to grant the Sublicense Agreement to Illumina; and (iv) compelled Cornell to arbitrate this dispute. Cornell states it then responded in detail to those attempted defenses under the NELA in it reply papers.
Id. (quoting D.I. 603 at 17 n.2) (underlining in original).
Id. at 2 (quoting D.I. 603 at 16 n.1).
Id.
Id.
Id. (citing D.I. 621 at 1 n.2, 3 n.4, 11-15).
Id. (citing D.I. 621 at 6-9).
Cornell argues having raised those anticipated defenses in it answering papers, Life Tech now asserts that Cornell is barred from responding in reply to Life Tech's arguments. Cornell characterizes Life Tech's position as being that Cornell was obligated to use its opening papers to showcase in full Life Tech's potential defenses; a baseless assertion that Life Tech cites no case law to support it. Cornell insists that Section D of its reply brief is based on its opening papers and directly responds to defenses raised by Life Tech in its answering papers. Consequently, Cornell maintains there is no basis to strike that section.
Id.
Id.
Id.
Id. (citing In re Fleming Co., Inc., 316 B.R. 809, 815 n.3 (D. Del. 2004) ("[E]verything in plaintiffs' reply memorandum is either in the original brief or in response to defendants' arguments . . . . Therefore, defendants' motion is denied.")).
Specifically responding to Life Tech's grounds for striking Section D of Cornell's reply brief, it first disputes Life Tech's assertion that Cornell raised for the first time in reply that it was not required to sign the Settlement Agreement. Cornell maintains it expressly stated and corroborated in its opening papers that Cornell would only sign the Settlement Agreement if it was modified and that "nothing in the parties' license agreement . . . obligated Cornell to sign the Settlement Agreement." In its answering papers, Life Tech cited NELA Sections 14.3 and 14.4 to support its assertion that the NELA compelled Cornell to sign the Settlement Agreement. Cornell states it was fully within its rights to explain why those two sections do not support Life Tech's assertion in its reply brief.
Id.
Id. (citing D.I. 603 at 2, 5, 6, 14, 17 n.2).
Id. (citing D.I. 621at 12-13).
Id. (citing D.I. 641 at 6-8).
Next, Cornell states it did not improperly raise the implied covenant of good faith in its reply brief. Cornell maintains its opening papers are replete with points that Cornell would only sign the Settlement Agreement if it was modified and if Life Tech warranted that Life Tech had no undisclosed settlement terms with Illumina. Included in its opening papers was correspondence with Life Tech in which Cornell noted Life Tech's "obligations to the Cornell Parties and the well established principles of good faith and fair dealing . . . ." In its answering papers, Life Tech specifically asserted that Cornell was obligated to sign any settlement agreement Life Tech presented. In response to that argument, Cornell noted that such a purported obligation would be unconscionable and violative of the implied covenant of good faith. Cornell maintains it raised these issues in its opening papers and was simply responding in reply to Life Tech's argument.
Id. at 3.
Id. (citing D.I. 603 at 2, 5, 6, 14, 17 n.2; D.I. 604 at ¶¶ 28, 30; 606 at ¶¶ 29, 30, 33, 35, 38, 52; IC Exs. 7, 9, 11, 12, 14, 15, 16 & 17).
Id. (quoting IC Ex. 17 at 3) (emphasis added).
Id. (citing D.I. 621 at 3, 11-13).
Id. (citing D.I. 621 at 6-8).
Id.
Cornell also contends Life Tech's assertion that Cornell raised for the first time in reply that the Settlement Agreement and Sublicense Agreement are subject to rescission is false. Cornell states its opening papers contain a number of references to rescission of those agreements and expressly noted that "nothing in the parties' license agreement authorizes Life Tech to defraud Cornell . . . ." In its answering brief, Life Tech argued rescission was not appropriate in view of the provisions of the NELA. In direct response to Life Tech's argument, Cornell states it explained why no provision in the NELA excused Life Tech's alleged fraud or barred the court from rescinding agreements induced by that fraud. Cornell again insists Life Tech has no basis to try to stop Cornell from responding to its arguments.
Id.
Id. (citing D.I. 603 at 1, 16, 17 n.2; D.I. 606 at ¶ 69).
Id. (citing D.I. 621 at 14-15).
Id. (citing D.I. 641 at 6-9).
Id.
Cornell argues that, contrary to Life Tech's assertion, it raised for the first time in reply that Life Tech lacked authority to grant the Sublicense Agreement to Illumina, the opening brief expressly asserted:
Further, although not directly relevant to this motion, Life Tech was not authorized to enter into the Sublicense Agreement under Section 14.1 of the parties' license agreement, because that provision was only applicable for 90 days after that agreement went into effect in 2010.
Id. (quoting D.I. 603 at 16 n.1).
Finally, Cornell describes as false Life Tech's assertion that it raised for the first time in reply that it had an interest in enforcement of the licensed patents. Cornell states in its opening papers, it repeatedly noted its rights and interests in those patents. In response Life Tech argued that because the NELA gave it control of enforcement efforts, Cornell had no interest. In direct response to Life Tech's argument, Cornell noted it has an interest on multiple grounds, including because it is a co-plaintiff in this action. Cornell contends, therefore, that there is no basis to strike any portion of its reply brief.
Id. at 4.
Id. (citing D.I. 603 at 4, 13, 15, 16; 604 at ¶¶ 1, 6, 7, 31; 605 at ¶¶ 1, 6, 7, 19; 606 at ¶¶ 2, 7, 10, 11, 64, 67).
Id. (citing D.I. 621 at 14-15).
Id. (citing D.I. 641 at 9).
Id.
In response, Life Tech repeats that Cornell improperly reserved crucial arguments for its reply brief. Life Tech asserts the rights and responsibilities of Cornell and Life Tech concerning the filing of this lawsuit and the settlement thereof are entirely governed by the NELA, which granted Life Tech an exclusive license to the patents-in-suit, the right to sue Illumina for infringement, to settle this litigation on any terms, and the sole right to grant sublicenses to the patents. Life Tech argues that, although Cornell contests the scope of Life Tech's authority under the NELA, there can be no serious disagreement that the NELA is cental to the parties' present disputes. Life Tech avers it put Cornell on notice that the NELA controls this dispute when it sent Cornell a detailed letter identifying eight applicable sections of the agreement with Life Tech's interpretation of those provisions, a fact that Cornell does not and cannot deny. Life Tech argues, therefore, that Cornell's assertions that the NELA is "not directly relevant" and merely the basis for Life Tech's "defenses" is incorrect.
D.I. 667 at 1.
Id. (citing D.I. 659 at 1-2, 4-6, 11-15; D.I. 606, Ex. A).
Id.
Id. (citing IC Ex. 26).
Id. (citing D.I. 603 at 16, n.1).
Id. (citing D.I. 665 at 1-2).
Id.
Life Tech states that when it filed its Motion to Vacate, Cornell only addressed the NELA in passing. Life Tech argues Cornell does not contest that its opening brief addressed the NELA just twice, in two short footnotes. Life Tech contends the text of those footnotes belie Cornell's argument that they "expressly addressed and refuted the NELA defenses that Cornell anticipated Life Tech might raise." Life Tech maintains the short length of the footnotes in Cornell's opening brief compared with the lengthy arguments in Section D of the reply brief and accompanying declarations is evidence that Cornell improperly ignored the central issues in its motion, only to reveal its position for the first time in reply.
Id.
Id. (citing D.I. 665 at 1-3).
Id. (citing D.I. 665 at 1).
Id.
Life Tech asserts Cornell's other justifications are even more unavailing. Life Tech argues that Cornell's claim that it raised its covenant of good faith argument in its "opening papers" is disingenuous because the "paper" to which Cornell cites is not in its brief, but is a random page in the middle of one of the exhibits Cornell submitted for in camera review. Life Tech also disputes Cornell's claim that it somehow has rights beyond those in the NELA "because it is a co-plaintiff in this Action," because the portions of its opening papers purportedly supporting that argument only refer to Cornell as the licensor of the patents. Life Tech maintains there is nothing in the cited pages about Cornell having any particular rights because it became a party to this case. Life Tech also accuses Cornell of exaggerating what little its opening brief did contain, characterizing the single sentence in footnote 1 of its opening brief as an "express discussion of Life Tech's likely argument," rather than a single sentence that begins "although not directly relevant to this motion." Lastly, Life Tech asserts that Cornell does not even contend it raised an unconscionability argument in its opening brief. Life Tech maintains that none of this satisfies the requirement of a "full and fair" opening brief.
Id.
Id.
Id.
Id. at 1-2 (citing D.I. 665 at 4 (citing portions of D.I. 603-606)).
Id. at 2.
Id. (citing D.I. 665 at 3 (emphasis added by Life Tech)).
Id.
Although Cornell did not extensively discuss the NELA in its opening brief, it did raise the issues Life Tech asserted in its answering brief in support of its positions. In its brief in opposition to Cornell's Motion to Vacate, Life Tech argues it had the exclusive right to control the illumina litigation and its settlement and to grant sublicenses on any terms. Life Tech contends Cornell had no rights with respect to the settlement of this action, or influence the terms of the settlement; Cornell only had the duty to cooperate. In support of its contentions regarding its rights and Cornell's obligations under the NELA, Life Tech cites §§ 14.3 and 14.4 of the NELA. In its opening brief, Cornell argued it was not obligated to sign the Settlement Agreement. Its reply brief responded to Life Tech's arguments base on §§ 14.3 and 14.4 and stated that nothing in those sections required Cornell to sign any settlement agreement presented by Life Tech. Cornell continued its response to Life Tech's argument stating that an obligation to sign any settlement agreement Life Tech presented Cornell would be unconscionable and would violate the implied covenant of good faith and fair dealing, giving as a hypothetical example a settlement agreement that has as part of its consideration, a provision requiring Cornell to deed its Ithaca, New York campus to Life Tech as being violative of the implied covenant of good faith. In its answering brief Life Tech asserted it was authorized under the NELA to enter into the Sublicense Agreement under §§ 3.1 and 14.1 of the NELA. In its opening brief, Cornell asserted Life Tech was not authorized to enter into the Sublicense Agreement under § 14.1, because that provision was only applicable for 90 days after this agreement went into effect in 2010. In its reply brief, Cornell responded to Life Tech's interpretation of the NELA with regard to the propriety of Life Tech entering the Sublicense Agreement. Finally, Life Tech maintains Cornell was required to submit its disputes to arbitration. In its opening brief, Cornell raised the issue and declared the dispute is not subject to any applicable arbitration agreement.
D.I. 621 at 11-15.
Id. at 12.
Id.
D.I. 603 at 17 n.2.
D.I. 641 at 6.
Id. at 7-8 (citing Dunlap v. State Farm Fire & Cas. Co., 878 A.2d 434, 442 (Del. 2005 ("Stated in the most general terms, the implied covenant requires a party in a contractual relationship to refrain from arbitrary or unreasonable conduct which has the effect of preventing the other party to the contract from receiving the fruits of the bargain. Thus, parties are liable for breaching the covenant when their conduct frustrates the overarching purpose of the contract by taking advantage of their position to control implementation of the agreement's terms.") (internal quotation marks and citations omitted)).
D.I. 621 at 13.
D.I. 603 at 16 n.1.
D.I. 641 at 8-9.
D.I. 621 at 1 n.2, 3 n.4.
D.I. 603 at 17 n.2.
Because the court finds the issues and arguments in Section D of Cornell's reply brief were either in its opening brief and/or in response to Life Tech's arguments in its answering brief, the court denies Life Tech's motion to strike Section D of Cornell's reply brief and determines no sur-reply is appropriate.
See, e.g., In re Fleming Co., Inc., 316 B.R. 809, 815 n.3 (D. Del. 2004) ("[E]verything in plaintiffs' reply memorandum is either in the original brief or in response to defendants' arguments . . . . Therefore, defendants' motion is denied.").
With regard to the "second declarations" of Dorn and Kelly, Life Tech states those collectively span nearly 20 pages and, other than the first eleven paragraphs of Dorn's second declaration addressing Life Tech's Cross-Motion, the remainder of this declaration, and the entirety of Kelly's second declaration, contain new factual allegations that are either irrelevant, or at best, should have been included in fair and full opening papers. Life Tech also contends both declarations contain legal arguments that should not be in declarations at all, but instead merely seek to extend the 10-page reply brief limit.
D.I. 659 at 3.
Id.
Specifically, Life Tech asserts the Second Dorn Declaration contains new factual assertions regarding alleged follow-on discussions between the parties about converting the NELA to a non-exclusive license, and additional details concerning an April 12, 2017 meeting between Cornell and Life Tech. Life Tech states both sections include pointed attacks against the credibility of Finst and Makrogiannis. Life Tech argues it and its declarants should have had an opportunity to address these assertions in its answering brief.
Id. (citing D.I. 644 at ¶¶ 12-13).
Id. (citing D.I. 644 at ¶¶ 15-17).
Id.
Id.
Life Tech maintains the bulk of the remaining allegations of the Second Dorn Declaration, spanning more than six pages, constitute Cornell's commentary on the underlying facts and legal arguments concerning the NELA that have no place in a declaration, let alone a declaration submitted in reply. Life Tech contends portions of the declaration are undisguised legal arguments with headings, such as, "Cornell Was Not Obligated to Sign Any Settlement Agreement Presented by Life Tech" and "Life Tech Did Not Have Authority to Enter Into the Sublicense Agreement With Illumina." Life Tech states the text under those headings sets forth provisions of the NELA in block quotes with accompanying attorney argument as to their meaning. Dorn then argues another new issue: that "A Significant Portion of Life Tech's Expenditures in the Action Was Incurred Due to Life Tech's Covenant Not to Sue Illumina," a theme that Kelly picks up in his declaration. Finally, Dorn's declaration concludes with three paragraphs about purported "Irreparable Harm To Cornell," but, Life Tech argues, those paragraphs contain no facts based on Dorn's personal knowledge and are mere arguments designed to circumvent the page limits. Life Tech therefore requests that the court strike paragraphs 12 through 35 of the Second Dorn Declaration.
Id.
Id. (citing D.I. 644 at pp. 8, 9).
Id. at 3-4 (citing D.I. 644 at ¶¶ 21-28).
Id. at 3 (citing D.I. 644 p. 10).
Id. at 4 (citing D.I. 644 at ¶¶ 33-35).
Id.
Life Tech contends the Second Kelly Declaration is also improper as it provides additional assertions regarding the April 2017 meeting and attacks against Finst that should have been included in his original declaration. Kelly also offers his unsupported "beliefs" and presents as fact what "Life Tech knew" and what representations Life Tech "intentionally" made. According to Life Tech, the remainder of Kelly's declaration contains entirely new accusations about a nearly 20-year old agreement between the parties, and a subsequent covenant not to sue, that have no connection to the present dispute, but pertain to an issue on which Life Tech has already prevailed in this court. Life Tech argues the reference itself to these disputes violates a 2010 settlement agreement between the parties in which Cornell released all prior claims and complaints against Life Tech. In what Life Tech characterizes as "a 14-paragraph rant," Kelly purports to describe "a history of collusive activity where Illumina and Life Tech (or its predecessors) granted rights to the technology Life Tech licensed from [Cornell], without involving Cornell," and asserts that these "episodes . . . are eerily similar to the Sublicense Agreement between Life Tech and Illumina at issue here." Life Tech insists none of this has anything to do with Cornell's Motion to Vacate, none of it is based on any personal knowledge, and none was raised in Cornell's opening brief or is responsive to issues that Life Tech or its declarants raised in its answering brief. Life Tech therefore requests that the court strike the entirety of the Second Kelly Second.
Id. (citing D.I. 645 at ¶¶ 2-5).
Id. (citing D.I. 645 at ¶ 6).
Id. (citing D.I. 645 at ¶ 5).
Id. (citing D.I. 206).
Id.
Id. (quoting D.I. 645 at ¶¶ 7-20).
Id.
Id.
Cornell maintains there is no basis to strike paragraphs 12 to 35 of the Second Dorn Declaration because every paragraph therein specifically responds to arguments raised by Life Tech. Life Tech attorney Makrogiannis asserted as a defense to the Motion to Vacate, that Cornell failed to accept Life Tech's proposal for a non-exclusive license, and Dorn responded to that. Life Tech attorney Finst asserted that at the parties' April 12, 2017 meeting, he never represented that the rights to enforce patents were reserved in the settlement and Dorn responded to that assertion. Life Tech asserted there was no relationship between the settlement of this action and the settlement of the Illumina California Action, to which Dorn responded. Life Tech asserted that Cornell was obligated to sign the Settlement Agreement regardless of its terms and Dorn responded to that assertion. Attorney Finst repeatedly stressed how he accommodated Cornell in the settlement discussions and Dorn explained he was playing a double game, pretending to support Cornell while doing a secret unauthorized deal with Illumina. Life Tech argued that it was authorized to grant the Sublicense Agreement to Illumina, and Dorn addressed that assertion. Life Tech referenced its investment in this action to somehow justify its alleged fraud and Dorn pointed out that a significant portion of Life Tech's expenditures were caused by Life Tech's secret, purportedly improper, grant of a covenant not to sue Illumina, which covenant was the subject of motion practice in this action. Finally, Cornell states Dorn's closing discussion of irreparable harm simply amplified statements in her first declaration. Cornell maintains everything in the Second Dorn Declaration is directly responsive to arguments raised by Life Tech in its opposition papers and by seeking to strike most of the Second Dorn Declaration, Life Tech is improperly attempting to prevent Cornell from responding to Life Tech's arguments. In response to Life Tech's assertion that the Second Dorn Declaration is improper attorney argument, Cornell states Dorn simply responded to Life Tech's NELA arguments, an agreement she helped draft. Cornell also notes attorney Finst made numerous arguments based on the NELA in his declaration, and maintains that, under Life Tech's theory, those paragraphs from his declaration should be stricken as well.
D.I. 644.
D.I. 665 at 4.
Id. (citing D.I. 644 at ¶¶ 12-14).
Id. (citing D.I. 644 at ¶¶ 15-18).
Id. (citing D.I. 644 at ¶ 20).
Id. (citing D.I. 644 at ¶¶ 21-22).
Id. (citing D.I. 644 at ¶¶ 23-24).
Id. (citing D.I. 644 at ¶¶ 25-28).
Id. (citing D.I. 644 at ¶¶ 29-32).
Id. (citing D.I. 644 at ¶¶ 33-35).
Id. (citing D.I. 606 at ¶¶ 67-69).
Id. at 4-5.
Id. at 5 n.3.
Id. at 5 (citing D.I. 624 at ¶¶ 7-12, 23-24, 38, 47, 50 and 58-59).
Id.
Cornell likewise argues there is no basis to strike the Second Kelly Declaration. Cornell states that declaration was specifically submitted to address assertions by Life Tech and Illumina in their respective opposition papers. Finst contested that he made any representation at the parties' April 12, 2017 meeting that rights to enforce patents were preserved in the settlement and Kelly, who was an attendee at that meeting, properly addressed Finst's assertions. Cornell states in its opening brief, it repeatedly discusses the improper collaboration between Life Tech and Illumina to defraud Cornell, and, in response, Illumina repeatedly asserted as a defense that it has consistently acted in "good faith." Cornell maintains to address the credibility of Illumina's assertions of "good faith," Kelly details past instances where Illumina allegedly improperly conspired with Life Tech (to Cornell's detriment) concerning a purportedly unauthorized covenant not to sue. Cornell states this testimony is only cited in its reply brief to Illumina, and that Illumina has not sought to strike that brief. Moreover, Cornell notes the background regarding the allegedly improper secret deal between Life Tech and Illumina, is already of record in this action and was the subject of prior motion practice. Cornell asserts it does not seek any affirmative relief based on this allegedly prior improper conduct; instead it is offered solely to address the credibility of Illumina's claims of "good faith," which it maintains is entirely appropriate.
Id. at 5 n.3.
Id. at 5.
Id. (citing D.I. 645 at ¶¶ 2-5). Cornell states this is the only portion of the Second Kelly Declaration cited in Cornell's reply brief to Life Tech because the rest of that declaration is directed to the credibility of Illumina's assertions of "good faith." Cornell argues, therefore, that Life Tech has no standing to seek to strike to other portions of the Second Kelly Declaration. Id. at 5 n.4.
Id. at 5 (citing D.I. 603 at 2, 3, 8, 16-17, 19; D.I. 629 at 1, 3, 9, 12, 17).
Id. (citing D.I. 645 at ¶¶ 6-20).
Id. (citing D.I. 642 at 2, 8).
Id.
Id. (citing D.I. 206, 234).
Id. (citing Boston Scientific Scimed, Inv. v. Cordis Corp., 434 F. Supp. 2d 308, 314 (D. Del. 2006) (holding portions of a reply brief addressing credibility issues were appropriate), rev'd on other grounds, 554 F.3d 982 (Fed. Cir. 2009)).
Cornell concludes by reiterating that the goal of the Motion to Strike is to prevent it from responding to various baseless arguments, and that its reply submissions were specifically responsive to arguments raised by Life Tech and Illumina and all were consistent with its opening papers.
Id.
Life Tech disputes Cornell's justification of the second declarations of Dorn and Kelly as merely "responsive to arguments raised by Life Tech in its opposition papers." Life Tech acknowledges in one respect this is accurate in that the new declarations purport, in part, to address Life Tech's legal arguments. Life Tech argues, however, that coming from percipient witnesses, this is improper. Life Tech maintains it is also another attempt to introduce arguments that should have been in a full and fair opening.
D.I. 667 at 2 (citing D.I. 665 at 4-5 (emphasis added by Life Tech)).
Id. (citing, e.g. D.I. 644 at ¶¶ 21-22, 25-28).
Id. (citing GemCap Lending, LLC v. Quarles & Brady, LLP, No. 14-7937, 2017 WL 4081884, at *11 (C.D. Cal. Sept. 13, 2017) ("Legal arguments are inappropriate in declarations."); Monec Holding AG v. Motorola Mobility, Inc., No. 11-798-LPS-SLR, 2014 WL 4402825, at *1 (D. Del. Sept. 5, 2014) (including legal analysis in supporting papers, rather than briefing, is an improper attempt to circumvent page limitations.)).
Id.
Otherwise, Life Tech maintains the declarations are rife with new factual assertions, including exchanges between Dr. Barany and Finst about other patent families, the parties' "desire[s]" related to possible renegotiation of the NELA, and "amplifi[ation]" of statements in prior declarations to which Life Tech has no opportunity to respond. Moreover, Life Tech asserts the declarations also contain baseless speculation about the other parties' motives and arguments based on "records" instead of personal knowledge. Life Tech insists all of this should be stricken.
Id. (citing D.I. 644 at ¶ 16).
Id. (citing D.I. 644 at ¶¶ 12-13).
Id. (citing D.I. 665 at 4, citing D.I. 644 at ¶¶ 33-35).
Id.
Id. (citing, e.g., D.I. 644 at ¶ 19 (stating what she "believe[s]"), ¶ 20 (setting forth what she thinks is "logic[al]" and attempting to substitute her judgment for the court's); D.I. 645 at ¶ 6 (Kelly's beliefs)).
Id. (citing D.I. 645 at ¶¶ 8-11).
Id.
Life Tech also contests Cornell's attempt to shield the Second Kelly Declaration by casting it as a response to Illumina's assertions of "good faith" that Life Tech allegedly has no standing to strike. Life Tech first argues the Second Kelly Declaration was filed in support of both Cornell's replies, as the docket reflects. Regardless, Life Tech rejects the suggestion that it cannot respond to those allegations as absurd because the Second Kelly Declaration contains an entirely new set of aspersions against Life Tech and its employees. Kelly purports to describe Life Tech's and Illumina's "history of improperly conspiring to Cornell's detriment." Life Tech argues this is not "entirely appropriate," does not have anything to do with bolstering credibility, and the Boston Scientific case Cornell cites does not suggest otherwise. According to Life Tech, Boston Scientific has nothing to do with allegations of past bad acts, but rather competing expert testimony about how a person having ordinary skill would have understood the teachings of the prior art. There, Judge Robinson found that Cordis violated Local Rule 7.1.3(c)(2) by including arguments in its reply brief not offered in its opening brief and granted Boston Scientific's motion to strike those portions of Cordis's reply. Life Tech maintains the same result is warranted here.
Id.
Id.
Id. (citing D.I. 645 at ¶¶ 7-20).
Id. (citing D.I. 645 at ¶ 20).
Id. (citing D.I. 665 at 5).
Id. (citing Boston Scientific, 434 F. Supp. 2d at 314).
Id. (citing Boston Scientific, 434 F. Supp. 2d at 314).
Id.
With regard to the Second Dorn Declaration, the court declines to strike paragraphs 12 through 35 of the Second Dorn Declaration as those paragraphs specifically respond to arguments raised by Life Tech or amplify statements in her first declaration. As Cornell notes, Life Tech attorney Makrogiannis asserted as a defense to the Motion to Vacate the Cornell failed to accept Life Tech's proposal for a non-exclusive license. Dorn responded to Makrogiannis' contention. Life Tech attorney Finst asserted that at the parties' April 12, 2017 meeting, he never represented that the rights to enforce patents were reserved in the settlement. Dorn responded to Finst's assertion. Makrogiannis and Finst maintained there was to relationship between the settlement of this action and the settlement of the Illumina California Action. Dorn responded to those assertions. Finst states Cornell was obligated to sign the Settlement agreement regardless of its terms. Dorn responded to that assertion. Finst repeatedly stated how he accommodated Cornell in the settlement discussions. Dorn responded to Finst's statements by stating that, rather than bing accommodating, Life Tech was not candid about Cornell's communications during the settlement discussions by not revealing simultaneous discussions with Illumina concerning the Sublicense Agreement. Finst argued Life Tech was authorized to grant the Sublicense Agreement. Dorn responded to that argument, insisting it did not have the authority to grant the Sublicense Agreement. Finst mentioned the amount of money it had expended in this action. Dorn explained a significant portion of Life Tech's expenses was incurred in large part due to its own conduct, not any conduct on the part of Cornell. As to Life Tech's argument regarding Dorn's discussion of irreparable harm in paragraphs 33-35, the court agrees with Cornell that those paragraphs merely amplify statements in her first declaration. With regard to Life Tech's contention that assertion that the Second Dorn Declaration contains improper attorney argument, Cornell states Dorn was responding to Life Tech's NELA arguments-a document she helped draft. Also, asserts Finst made numerous arguments based on the NELA in his declaration which, under Life Tech's should be stricken as well; an assertion to which Life Tech did not respond in its reply.
D.I. 622 (Makrogiannis Decl.) at ¶ 5 (stating Cornell did not respond to Life Tech's April 2015 invitation to discuss converting the NELA into a non-exclusive license); ¶ 9 (stating Cornell did not respond to Life Tech's February 2017 invitation to discuss converting the NELA into a non-exclusive license).
D.I. 644 at ¶¶ 12-13.
D.I. 624 (Finst Decl.) at ¶ 49 (disputing Cornell's allegations that he assured Cornell at an April 12, 2017 meeting that Cornell's rights to pursue Illumina products not at issue in the Action were preserved in the settlement").
D.I. 644 at ¶¶ 15-18.
D.I. 622 at 9 (stating no consideration was exchanged for the settlement of this action other than what was set forth in the Settlement Agreement); D.I. 624 at ¶¶ 61-62(stating that settlement of the Illumina California Action "had nothing to do with the NELA patents).
D.I. 644 at ¶ 20.
D.I. 624 at ¶¶ 6-13 (stating Life Tech had the exclusive right to bring claims against Illumina and the exclusive right to control any resulting settlement-the only right Cornell had was to receive an executed copy of any sublicense agreement and any settlement papers entered into as a result of the legal proceeding).
D.I. 644 at 21-22.
D.I. 624 at ¶¶ 23, 26, 28-34, 37, 40-41, 45, 50, 53.
D.I. 644 at ¶¶ 23-24.
D.I. 624 at ¶ 58 (stating Life Tech had the exclusive right under the NELA to grant sublicenses to the patents licensed thereunder).
D.I. 644 at ¶¶ 25-28.
D.I. 624 at ¶¶ 13, 17, 50.
D.I. 644 at ¶¶ 29-32.
D.I. 606 at ¶¶ 67-69.
D.I. 624 at ¶¶ 7-12, 23-24, 38, 47, 50, 58-59.
Consequently, the court denies Life Tech's request to strike paragraphs 12 through 35 of the Second Dorn Declaration.
With regard to the Second Kelly Declaration, the court also declines Life Tech's request to strike that declaration. Cornell states that declaration was specifically submitted to address assertions by Life Tech and Illumina in their opposition papers. Finst contested he made any representation at the parties' April 12, 2017 meeting that rights to enforce the patents were preserved in the settlement agreement. Kelly addressed Finst's assertion. Cornell states paragraphs 2 through 5 are the only portion of the Second Kelly Declaration cited in its reply brief to Illumina because the rest of that declaration is directed to the credibility of Illumina's assertion of "good faith." In its opening brief, Cornell repeatedly discussed the purportedly improper collaboration between Life Tech and Illumina to defraud Cornell. In its answering papers, Illumina repeatedly asserted as a defense it acted in good faith throughout this action. To address Illumina's assertion of good faith, Kelly details past instances that call into question Illumina's assertion. Cornell states this testimony is only cited in its reply brief to Illumina, and Illumina did not move to strike that brief. Cornell does not seek any affirmative relief based on that allegedly prior improper conduct; it is only offered to address the credibility of Illumina's claims of "good faith."
D.I. 655 at 5.
D.I. 624 at ¶ 49.
D.I. 645 at ¶¶ 2-5 (stating that Life Tech assured Cornell that rights to pursue Illumina products not at issue in this action would be preserved).
Id. at 5 n.4.
D.I. 629 at 1, 3, 6, 9, 12, 17.
D.I. 645 at ¶¶ 6-20.
D.I. 665 at 5 (citing D.I. 642 at 2, 8).
Id.
Id.
Finally, the court disagrees with Life Tech's argument that Boston Scientific does not support Cornell's argument that it is entirely appropriate for Kelly to have challenged the credibility of Illumina's "good faith" defense. Although that case does not center on allegations of past bad acts, it nevertheless states "[I]t is not inappropriate for [defendant], in its reply brief, to address the strength and credibility of [its expert] based on [defendant's] earlier analysis of the level of ordinary skill in the art." Here, Cornell addressed the "strength and credibility" of Illumina's "good faith" defense which the court finds appropriate.
Boston Scientific, 434 F. Supp. 2d at 314 (citing In re Fleming Co., 316 B.R. 809, 815 n.3 (D. Del. 2004)). --------
The court, therefore, denies Life Tech's request to strike the Second Kelly Declaration. The court again denies Life Tech's request to file a sur-reply.
V. CONCLUSION
For the reasons stated above, Life Tech's Motion to Strike (D.I. 658) is DENIED.
VI. DISPOSITION
Consistent with the findings herein,
IT IS ORDERED and ADJUDGED that the Life Tech's Motion to Strike (D.I. 658) is DENIED.
Pursuant to 28 U.S.C. § 636(b)(1)(A), FED. R. CIV. P. 72(a) and D. DEL. LR 72.1, any objections to the Memorandum Order shall be filed on or before February 20, 2018 and is limited to ten (10) pages. Any response shall be filed on or before March 7, 2018 and is limited to ten (10) pages.
The parties are directed to the Court's Standing Order in Non-Pro Se matters for Objections Filed under FED. R. CIV. P. 72 dated October 9, 2013, a copy of which is available on the court's website, www.ded.uscourts.gov. February 5, 2018
/s/ Mary Pat Thynge
Chief U.S. Magistrate Judge