3V, Inc. v. Ciba Specialty Chemicals Corp.

• Decision Date: 20 November 2008
• Docket Number: Civil Action No. 06-672-JJF.,Civil Action No. 06-593-JJF.,Civil Action No. 06-629-JJF.
• Citation: 587 F.Supp.2d 641
• Parties: 3V, INC., Plaintiff, v. CIBA SPECIALTY CHEMICALS CORP., Defendant. CIBA Specialty Chemicals Corp., Cross-Plaintiff, v. 3V, Inc., Cross-Defendant. CIBA Specialty Chemicals Corp., Plaintiff, v. 3V, Inc., Defendant.
• Court: U.S. District Court — District of Delaware

Page 641

587 F.Supp.2d 641

3V, INC., Plaintiff, v. CIBA SPECIALTY CHEMICALS CORP., Defendant.

CIBA Specialty Chemicals Corp., Cross-Plaintiff, v. 3V, Inc., Cross-Defendant.

CIBA Specialty Chemicals Corp., Plaintiff, v. 3V, Inc., Defendant.

Civil Action No. 06-593-JJF.

Civil Action No. 06-629-JJF.

Civil Action No. 06-672-JJF.

United States District Court, D. Delaware.

November 20, 2008.

Alan E.J. Branigan, Esquire; Brion Heaney, Esquire and Richard J. Traverso, Esquire of Millen White Zelano & Branigan, P.C., Arlington, VA, Frederick L. Cottrell III, Esquire and Chad M. Shandler, Esquire of Richards Layton & Finger, Wilmington, DE, for Defendant, Cross-Plaintiff, and Plaintiff CIBA Specialty Chemicals, Corp.

Angelica M. Colwell, Esquire of Nexsen Pruet, LLC, Charleston, SC, Joseph Grey, Esquire of Stevens & Lee, P.C., Wilmington, DE, for Plaintiff, Cross-Defendant and Defendant 3V, Inc.

OPINION

FARNAN, District Judge.

Presently before the Court is 3V's Motion to Dismiss Civil Action Nos. 06-00593-JJF, 06-00629-JJF, and 06-00672-JJF for lack of subject matter jurisdiction. (D.I. 34 in 06-00593-JJF.)¹ Also before the Court is CIBA's Motion For Leave Of Court To Serve Limited Discovery Relating To 3V's Disclaimer Of Its Patent Claims. (D.I. 37.) For the reasons discussed, the Court will grant 3V's Motion to Dismiss and deny CIBA's Motion For Leave of Court To Serve Limited Discovery.

I. Factual Background

This dispute stems from Interference No. 105,262, initiated by the Board of Patent Appeals and Interferences of the United States Patent and Trademark Office ("the Board") on May 24, 2005. In this interference proceeding, the Board considered the question of whether 3V, Inc. ("3V") or CIBA Specialty Chemicals Corporation ("CIBA") was the first to invent the invention claimed in both 3V's U.S. Patent No. 5,658,973 ("the '973 patent," filed on July 26, 1995) and CIBA's U.S. Patent Application Serial No. 10/081,291 ("the '291 application," filed on February 22, 2002). On July 27, 2006, the Board issued a final decision on the interference, and the decision was partially adverse to both parties. Although the Board found that CIBA had priority of invention, it also found that claims 16-27 of CIBA's '291 application were not entitled to the benefit of CIBA's European application EP 95810042.2 (filed on January 23, 1995). (D.I. 1, at ¶ 13; D.I. 1 in 06-00629-JJF, at ¶ 12.) As a result, the Board found that claims 16-27 in CIBA's application were unpatentable under 35 U.S.C. § 102(e) as anticipated by 3V's '973 patent. (D.I. 1 in 06-00629-JJF, at ¶ 12.)

In response to the Board's decision, 3V initiated Civil Action No. 06-00593-JJF pursuant to 35 U.S.C. § 146, challenging the Board's determination that CIBA held priority of invention.² (D.I. 1.) CIBA counterclaimed, alleging that claims 16-27 of its '291 application were entitled to the benefit of its European application EP 95810042.2 such that 3V's '973 patent would not anticipate them. (D.I. 5.) In addition, CIBA initiated two separate actions of its own. First, pursuant to 35 U.S.C. § 146, CIBA filed a Cross-Complaint, again asking the Court to overturn the Board's decision that claims 16-27 of its '291 application were not entitled to the benefit of European Application EP 95810042.2. (D.I. 1 in 06-00629-JJF.) Second, pursuant to 35 U.S.C. § 291, CIBA asked the Court to determine whether CIBA's U.S. Patent No. 6,380,286 was entitled to priority of invention over 3V's '973 patent.³ (D.I. 1 in 06-00672-JJF.)

Following the initiation of these actions, the parties engaged in settlement negotiations. Believing these negotiations to be at a standstill, on March 20, 2008, 3V filed a statutory disclaimer pursuant to 35 U.S.C. § 253, disclaiming all claims of the '973 patent and dedicating to the public its entire right, title, and interest in the patent. (D.I. 34 ¶ 3.) 3V then filed the present motion to dismiss, contending that there was no longer a cognizable controversy before the Court because it no longer held any interest in the '973 patent. (D.I. 34.) CIBA opposed the motion, contending that the Court must still consider whether claims 16-27 of CIBA's '291 application are entitled to the benefit of EP 95810042.2 such that the '973 patent would not then constitute prior art. (D.I. 36 ¶¶ 4-5.) In addition, CIBA filed a motion seeking leave of Court to take additional discovery pertaining to 3V's disclaimer of its patent claims. (D.I. 37.)

II. PARTIES' CONTENTIONS

A. 3V's Motion to Dismiss for Lack of Personal Jurisdiction

3V contends that all three cases before the Court should be dismissed because there is no longer a justiciable case or controversy. (D.I. 34 ¶ 10.) 3V contends that because it has disclaimed all claims of the '973 patent, "the effect is the same as dedication of the patent to the public or abandonment." (Id. ¶ 5.) Lacking any interest in a patent that may interfere with CIBA's '291 application, 3V urges that it would no longer have anything to protect in a § 146 or § 291 action against CIBA. (D.I. 40 ¶ 9.) Thus, according to 3V, the current case is moot.

CIBA responds that 3V's disclaimer "does nothing to prevent its 5,658,973 [patent] from being used [as prior art] (albeit incorrectly) against CIBA's claims 16-27." (D.I. 36 ¶ 4.) CIBA urges that although 3V disclaimed the subject matter for which it had the burden of proof during the interference, the corresponding subject matter for which CIBA had the burden of proof (i.e., whether CIBA's '291 application can claim priority to their earlier European application) remains. (Id. ¶ 2.) According to CIBA, 3V cannot unilaterally cut off CIBA's access to "its only remaining avenue of appeal" on these issues simply by disclaiming its interest in the '973 patent. (Id. ¶ 6.)

B. CIBA's Motion for Leave to Serve Limited Discovery Relating to 3V's Disclaimer of its Patent Claims

CIBA contends that 3V "has planned for a long time, if not from the outset, to file its recent disclaimer and motion to dismiss," yet, "in an effort to run up CIBA's litigation costs and for other strategic reasons, ... failed to inform CIBA of its disclaimer until after CIBA spent, unnecessarily, hundreds of thousands of dollars in attorneys' fees and costs...." (D.I. 38 at 2.) As a specific example, CIBA complains that although 3V filed its disclaimer on March 20, 2008, it never informed CIBA of the disclaimer until seven days later, and then only through its motion to dismiss. CIBA contends that during the seven day interval, it spent roughly $44,000 reviewing documents for production to 3V. (D.I. 38 at 2-3; D.I. 45 at 3 n. 2.)

CIBA would like to serve additional discovery to conclusively prove that 3V intentionally failed to advise 3V of its disclaimer so that the case may then be declared exceptional. Briefly, CIBA asks that it be entitled to conduct discovery pertaining to, at least, "when 3V decided to disclaim the heart of its action in this Court; why, except to run up its competitor's expenses, it failed to notify CIBA of that intent; and, why 3V apparently did no electronic discovery...." (D.I. 38 at 4.)

The gist of CIBA's position appears to be that had 3V genuinely intended to litigate in good faith, rather than simply string CIBA along as it burned through resources, 3V would have been more engaged in discovery, especially in light of agreed upon discovery obligations. CIBA points to the following examples of 3V's failure to participate in discovery:

• In May of 2007, CIBA requested the depositions of three individuals regarding 3V's electronically stored information ("ESI"). 3V has allegedly done "nothing" in response to this request. (Id. at 4.)

• 3V allegedly failed to advise CIBA of the dates when 3V began to preserve ESI and/or when it suspended automated deletion of ESI. (Id. at 5.)

• On August 9, 2007, 3V agreed to provide a key word list for CIBA to use in filtering its ESI. 3V did not provide such a list until after roughly six months had passed. (Id.)

• 3V has allegedly produced no electronic discovery, including requested documents pertaining to 3V's application for a Chemical Abstract Service registry number for the chemical "Uvasorb HA88" (Id. at 5-6.)

• 3V allegedly failed to conduct a review of the ESI produced by CIBA on March 3, 2008. (D.I. 45 at 1.)

3V responds first that the information CIBA would seek is either protected by the attorney-client privilege or is work product. (D.I. 44 at 1, 5-6.) With regard to CIBA's allegations that 3V failed to advise CIBA of its intention to disclaim its patent claims, 3V states that it delayed filing the disclaimer until it was clear that settlement was unlikely to be reached, and that negotiations were ongoing two weeks prior to the filing of the disclaimer. (Id. at 1.) 3V further states that it had notified CIBA in a March 6, 2008 telephone call that it was considering a disclaimer as a means of ending the litigation, but that it would exercise this option only if settlement efforts failed. (Id. at 4-5.) Furthermore, to the extent CIBA complains of having unnecessarily spent money on discovery, 3V contends that (1) CIBA needed to collect documents to support its own affirmative claims and counterclaims in any event, and (2) 3V had no control over the allegedly unduly expensive discovery methods employed by CIBA. (Id. at 3, 9-10.)

As to CIBA's allegations that 3V failed to engage in discovery, 3V states that it had produced 2,759 pages of documents in early June 2007, but that CIBA failed to produce any documents whatsoever until March 2008, despite assurances from CIBA in August 2007 that documents would be forthcoming. (Id. at 3-4.) 3V further states that, prior to filing its disclaimer, it had begun looking into whether it needed to provide the requested depositions regarding ESI, that it has located documents regarding 3V's application for a Chemical Abstract Service number, and that it has repeatedly confirmed to CIBA that its ESI...