Israel Bio-Engineering Project v. Amgen Inc., 04-1153.

Citation401 F.3d 1299
Decision Date15 March 2005
Docket NumberNo. 04-1153.,No. 04-1301.,04-1153.,04-1301.
PartiesISRAEL BIO-ENGINEERING PROJECT, Plaintiff, v. AMGEN INC., Immunex Corporation, Wyeth, and Wyeth Pharmaceuticals, Inc., Defendants, and Yeda Research and Development Co., Ltd., Defendant, and Inter-Lab Ltd. and Serono International S.A., Movants-Appellants. Israel Bio-Engineering Project, Plaintiff-Appellant, v. Amgen Inc., Immunex Corporation, Wyeth, and Wyeth Pharmaceuticals, Inc., Defendants-Appellees, and Yeda Research And Development Co., Ltd., Defendant-Appellee.
CourtUnited States Courts of Appeals. United States Court of Appeals for the Federal Circuit

Peter J. Toren, Sidley Austin Brown & Wood LLP, of New York, New York, argued for movants-appellants. With him on the brief was James D. Arden. Of counsel on the brief were Jeffrey M. Olson and Robert A. Holland, of Los Angeles, California and Richard F. O'Malley, Jr., of Chicago, Illinois. Also of counsel was Kathi A. Cover, of Washington, DC.

Thomas L. Hamlin, Robins, Kaplan, Miller & Ciresi L.L.P., of Minneapolis, Minnesota, argued for plaintiff-appellant. With him on the brief were Tara D. Sutton, David S. Toepfer, Stephen P. Safranski, and Nicole E. Narotzky.

Robert D. Bajefsky, Finnegan, Henderson, Farabow, Garrett & Dunner, L.L.P., of Washington, DC, argued for defendants-appellees Amgen Inc., et al. With him on the brief was William L. Strauss. Of counsel on the brief were Stuart L. Watt, Monigue L. Cordray, and Karen L. Nicastro, Amgen Inc., of Thousand Oaks, California.

Nicholas Groombridge, Weil, Gotshal & Manges LLP, of New York, New York, argued for defendant-appellee Yeda Research and Development Co., Ltd. With him on the brief were Elizabeth S. Weiswasser, David Greenbaum and Daniel J. Melman.

Before BRYSON, GAJARSA, and PROST, Circuit Judges.

PROST, Circuit Judge.

In one of these two appeals, the appellant, the Israel Bio-Engineering Project ("IBEP"), appeals a grant of summary judgment by the United States District Court for the Central District of California. Israel Bio-Eng'g Project v. Amgen, Inc., No. CV 02-06860 RGK (MANx) (C.D.Cal. Feb. 18, 2004) ("IBEP II"). In the other, two other appellants, Inter-Lab Ltd. and Serono International S.A. (collectively, "the Serono parties"), appeal the same district court's denial of their motion to intervene. Israel Bio-Eng'g Project v. Amgen, Inc., No. CV 02-06860 RGK (MANx) (C.D.Cal. Sep. 4, 2003) ("IBEP I"). Because we conclude that there are still outstanding genuine issues of material fact remaining in this case, we affirm the district court's grant of summary judgment in IBEP II in part, reverse it in part, and remand the case to the district court for further proceedings consistent with this opinion. Because we conclude that no other party could adequately represent the interests of the Serono parties in this litigation, we also reverse the district court's denial of the Serono parties' motion to intervene.

BACKGROUND

In September of 1981, two Israeli firms, Inter-Yeda Ltd. ("Inter-Yeda") and Yeda Research and Development Co., Ltd. ("Yeda"), entered into a five-year agreement ("the 1981 contract") whereby Inter-Yeda agreed to finance various Yeda research projects. The terms of that contract were effective until September of 1986. One research project targeted for financing under these agreements focused on anticellular factor research.

In December of 1982, IBEP entered into three separate agreements. In one agreement, the Research & Development Agreement ("R & D Agreement"), IBEP signed a contract with the Chief Scientist of the State of Israel in which it promised to spend between seven and ten million dollars in Israeli research programs during a five-year term. In a second agreement ("the Sub-R & D Agreement"), IBEP agreed to fund Inter-Yeda's financial obligations to Yeda under the 1981 contract — including funding the research on anticellular factors. The Sub-R & D Agreement also provided for IBEP's ownership of any discoveries that were made as a result of the research funded by IBEP. That agreement was to be governed by Israeli law and covered a five-year term, which expired in December of 1987. Under a third agreement, the Technology Option and Sale Agreement ("the TOS Agreement"), IBEP agreed to grant Inter-Yeda an option to purchase the rights and title to any discoveries owned by IBEP as a result of the research performed under the Sub-R & D Agreement.

In April of 1987, after the expiration of the 1981 contract term but before the end of the five-year term contemplated in the 1982 agreements between IBEP and Inter-Yeda, researchers affiliated with Yeda and Inter-Yeda discovered a tumor necrosis factor inhibitory protein ("TNF-BP") that later proved useful in treating rheumatoid arthritis. That discovery was, according to IBEP, arrived at as a result of the anticellular factor research program funded by IBEP. IBEP was never transferred ownership of the April 1987 discovery by either Yeda or Inter-Yeda. The April 1987 discovery later formed the basis of U.S. Patent No. 5,981,701 ("the '701 patent"), which lists David Wallach, Hartmut Engelmann, Daniel Aderka and Menachem Rubinstein as inventors and Yeda as the assignee. The '701 patent was later licensed to Amgen, Inc. ("Amgen"), the Immunex Corporation ("Immunex") and Wyeth Pharmaceuticals, Inc. ("Wyeth").

In 1999, IBEP filed suit against Amgen, Immunex and Wyeth for infringement of the '701 patent. In September of 2003, Yeda was granted its motion to intervene as a defendant in that suit. At the same time, however, the district court denied the Serono parties' motion to intervene on the grounds that their interests would be adequately represented by Yeda.

In February of 2004, the district court granted summary judgment to the defendants, deciding all legal issues in the case in their favor.

IBEP and the Serono parties timely appealed the district court's decisions to this court. We have jurisdiction under 28 U.S.C. § 1295(a)(1).

DISCUSSION

We review a district court's grant of summary judgment de novo. Ethicon Endo-Surgery, Inc. v. U.S. Surgical Corp., 149 F.3d 1309, 1315 (Fed.Cir.1998). Summary judgment is appropriate where no genuine issues of material fact remain and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c). In ruling on a motion for summary judgment, a district court must credit the non-moving party's evidence and draw all inferences in that party's favor. Hunt v. Cromartie, 526 U.S. 541, 552, 119 S.Ct. 1545, 143 L.Ed.2d 731 (1999) (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986)).

A. IBEP's Appeal

IBEP appeals the district court's grant of summary judgment in favor of defendants Yeda, Amgen, Wyeth and Immunex on two principal grounds — one based on Israeli contract law and another based on Israeli labor and intellectual property law.

1. IBEP's "Single Transaction" Contract Theory

IBEP argues that under Israeli law, related contracts with a common purpose are to be seen as a single transaction and their terms are to be harmonized accordingly. Under this contract theory, IBEP argues that the 1981 agreement between Yeda and Inter-Yeda should be harmonized with Inter-Yeda's 1982 agreements with IBEP. IBEP asserts that when this is done according to Israeli law, all of Yeda's discoveries in the period between September 1986 and December 1987 would become the property of IBEP by operation of its 1982 contracts with Inter-Yeda.

In its review of the relevant contracts, the district court determined that the plain meaning of the 1981 contract only contemplated a five-year term for the agreement between Yeda and Inter-Yeda. IBEP II at 5. Because Israeli contract law allows for the consideration of extrinsic evidence in ascertaining the intent of contracting parties even if the plain meaning of a contract is unambiguous, the court then took into account all of the "surrounding facts and circumstances" relevant to the formation of the contracts at issue in this case. After reviewing all of the evidence cited by IBEP in its attempt to defeat the defendants' summary judgment motion, the court found that "[a]bsent a showing that both Yeda and Inter-Yeda intended to extend the original termination date to 1987, [the] evidence set forth by IBEP simply has no teeth." Id. at 6 (emphasis in the original). Because all of the evidence presented by IBEP concerned only its agreements with Inter-Yeda, the court found that Yeda was not bound by those agreements. Id. We agree with the district court on this issue.

IBEP's "single transaction" contract theory rests on two main premises — one legal and one factual. The legal premise is that Israeli law requires that related agreements for a common purpose be treated as a single transaction. IBEP contends that this "single transaction" theory requires the court to reconcile the terms of the 1981 contract and IBEP's 1982 agreements with Inter-Yeda and the State of Israel. Extending this argument further, IBEP argues that because the 1982 agreements were primary and the 1981 agreement was secondary to the purpose of all of the related contracts in this case, the terms of the 1982 agreements regarding the effective length of the contract periods should govern. This argument, however, misunderstands Israeli law. None of the Israeli cases cited by IBEP recites the "single transaction" rule articulated by IBEP. Israeli contract law experts have stated that contracts may be read as a whole "in appropriate circumstances" where one contract serves a primary purpose and another contract is secondary to achieving that purpose. But no authority recites the proposition that related contracts must be read to have the same terms.

The factual premise, which is linked to IBEP's legal premise, is that IBEP's intent in entering into the 1982 agreements with Inter-Yeda was to own the fruits of any research conducted in the five-year term of those agreements — whether the research was conducted by...

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