`
`IN THE UNITED STATES DISTRICT COURT
`FOR THE DISTRICT OF DELAWARE
`
`
`
`C.A. No. 12-1107-GMS
`
`
`
`JURY TRIAL DEMANDED
`
`
`
`C.A. No. 12-1109-GMS
`
`
`
`JURY TRIAL DEMANDED
`
`
`
`C.A. No. 12-1110-GMS
`
`
`
`JURY TRIAL DEMANDED
`
`§§§§§§§§§§§
`
`§§§§§§§§§§
`
`§§§§§§§§§§§§
`
`
`
`
`BONUTTI SKELETAL
`INNOVATIONS LLC,
`
`
`
` Plaintiff,
`v.
`
`
`ZIMMER HOLDINGS, INC. and
`ZIMMER, INC.
`
` Defendants.
`
`BONUTTI SKELETAL
`INNOVATIONS LLC,
`
`
`
` Plaintiff,
`v.
`
`
`CONFORMIS, INC.,
`
` Defendant.
`
`BONUTTI SKELETAL
`INNOVATIONS LLC,
`
`
`
` Plaintiff,
`v.
`
`
`WRIGHT MEDICAL GROUP, INC. and
`WRIGHT MEDICAL TECHNOLOGY,
`INC.
`
` Defendants.
`
`OPENING BRIEF IN SUPPORT OF DEFENDANTS’ JOINT MOTION TO STAY
`LITIGATION PENDING INTER PARTES REVIEW
`
`
`
`
`
`
`
`Case 1:12-cv-01107-GMS Document 36 Filed 01/22/14 Page 2 of 31 PageID #: 1181
`
`Jack B. Blumenfeld (No. 1014)
`Jeremy A. Tigan (No. 5239)
`MORRIS, NICHOLS, ARSHT &
`TUNNELL LLP
`1201 North Market Street, 16th Floor
`P.O. Box 1347
`Wilmington, DE 19899
`Phone: (302) 658-9200
`Fax: (302) 658-3989
`Email: jblumenfeld@mnat.com
`Email: jtigan@mnat.com
`
`
`
`Attorneys for Zimmer Holdings, Inc. and
`Zimmer, Inc.
`
`Melanie K. Sharp (No. 2501)
`Samantha G. Wilson (No. 5816)
`YOUNG CONAWAY STARGATT &
`TAYLOR, LLP
`Rodney Square
`100 North King Street
`Wilmington, DE 19801
`(302) 571-6681
`Email: msharp@yest.com
`Email: swilson@ycst.com
`
`
`
`Attorneys for ConforMIS, Inc.
`
`OF COUNSEL:
`Ken Liebman (admitted pro hac vice)
`Elizabeth Cowan Wright (admitted pro hac vice)
`FAEGRE BAKER DANIELS LLP
`2200 Wells Fargo Center
`90 South 7th Street
`Minneapolis, MN 55402
`Phone: (612) 766-7000
`Fax: (612) 766-1600
`Email: ken.liebman@faegrebd.com
`Email: elizabeth.cowanwright@faegrebd.com
`
`Daniel M. Lechleiter (admitted pro hac vice)
`FAEGRE BAKER DANIELS LLP
`300 N. Meridian Street, Suite 2700
`Indianapolis, IN 46204
`Phone: (317) 237-0300
`Fax: (317) 237-1000
`Email: daniel.lechleiter@faegrebd.com
`
`OF COUNSEL:
`Charles E. Lipsey (admitted pro hac vice)
`FINNEGAN, HENDERSON, FARABOW,
`GARRETT & DUNNER, LLP
`Two Freedom Square
`Reston, VA 20190
`(571) 203-2700
`
`Howard W. Levine (admitted pro hac vice)
`Sanya Sukduang (admitted pro hac vice)
`FINNEGAN, HENDERSON, FARABOW,
`GARRETT & DUNNER, LLP
`901 New York Avenue, NW
`Washington, DC 20001-4413
`(202) 408-4000
`Email: howard.levine@finnegan.com
`Email: Sanya.Sukduang@finnegan.com
`
`Alissa K. Lipton (admitted pro hac vice)
`FINNEGAN, HENDERSON, FARABOW,
`GARRETT & DUNNER, LLP
`Two Seaport Lane
`Boston, MA 02210-2001
`(617) 646-1600
`
`
`7945368.1
`
`-ii-
`
`
`
`Case 1:12-cv-01107-GMS Document 36 Filed 01/22/14 Page 3 of 31 PageID #: 1182
`
`Matt Neiderman (No. 4018)
`Benjamin A. Smyth (No. 5528)
`DUANE MORRIS LLP
`222 Delaware Avenue, Suite 1600
`Wilmington, DE 19899
`Telephone: (302) 657-4920
`Facsimile: (302) 397-2543
`Email: mneiderman@duanemorris.com
`Email: basmyth@duanemorris.com
`
`
`
`Attorneys for Wright Medical Group, Inc. and
`Wright Medical Technology, Inc.
`
`
`
`OF COUNSEL:
`Anthony J. Fitzpatrick (admitted pro hac vice)
`DUANE MORRIS LLP
`100 High Street, Suite 2400
`Boston, MA 02110-1724
`Telephone: (857) 488-4200
`Facsimile: (857) 401-3018
`Email: ajfitzpatrick@duanemorris.com
`
`Samuel W. Apicelli (admitted pro hac vice)
`Jeffrey S. Pollack (admitted pro hac vice)
`DUANE MORRIS LLP
`30 South 17th Street
`Philadelphia, PA 19103
`Telephone: (215) 979-1000
`Facsimile: (215) 979-1000
`Email: swapicelli@duanemorris.com
`Email: jspollack@duanemorris.com
`
`
`
`
`
`Dated: January 22, 2014
`
`
`
`
`7945368.1
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`-iii-
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`
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`Case 1:12-cv-01107-GMS Document 36 Filed 01/22/14 Page 4 of 31 PageID #: 1183
`
`TABLE OF CONTENTS
`
`I.
`
`II.
`
`NATURE AND STAGE OF THE PROCEEDINGS .................................................... 1
`
`SUMMARY OF THE ARGUMENT ............................................................................ 2
`
`III.
`
`STATEMENT OF FACTS ............................................................................................ 4
`
`A.
`
`B.
`
`C.
`
`D.
`
`BSI Monetizes Patents Through Licensing and Litigation. ..............................4
`
`The BSI Knee Patents Are Related Members of a Single Patent
`Family. ................................................................................................................5
`
`S&N, Zimmer, and Wright Medical Each Independently Petitioned
`for Inter Partes Review of Certain BSI Knee Patents. ......................................6
`
`The Defendants’ Proposed Estoppel and the Statutory Estoppel
`Arising from Inter Partes Review. .....................................................................7
`
`IV. ARGUMENT ................................................................................................................. 9
`
`A.
`
`Staying the BSI Cases Will Simplify the Issues. .............................................. 10
`
`1. The Issue Simplification Resulting from a Stay Is Well-Recognized. ...... 10
`2. Staying the BSI Cases Will Simplify the Issues Even if Not Every
`Asserted Claim Undergoes IPR. ...................................................................... 12
`A Stay of the BSI Cases Will Not Unduly Prejudice, or Present a
`Clear Tactical Disadvantage to, BSI................................................................ 17
`
`The Early Stage of this Litigation Strongly Favors a Stay. ............................ 20
`
`B.
`
`C.
`
`V.
`
`CONCLUSION ............................................................................................................ 20
`
`
`
`
`
`
`7945368.1
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`-iv-
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`
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`Case 1:12-cv-01107-GMS Document 36 Filed 01/22/14 Page 5 of 31 PageID #: 1184
`
`TABLE OF AUTHORITIES
`
`Cases
`
`AIP Acquisitions v. Level 3 Commc’ns, LLC,
`No. 1:12-cv-00617-GMS (D. Del. Jan. 7, 2014) ................................................................ 9, 15
`
`Air Vent, Inc. v. Owens Corning Corp., No. 02:10-cv-01699,
`2012 WL 1607145 (W.D. Pa. May 8, 2012) .......................................................................... 19
`
`Alloc, Inc. v. Unilin Decor NV, No. 03-cv-253-GMS,
`2003 WL 21640372 (D. Del. July 11, 2003) ...................................................................... 3, 14
`
`BodyMedia, Inc. v. Basis Sci., Inc., No. 12-cv-133 (GMS),
`2013 WL 2462105 (D. Del. June 6, 2013) ....................................................................... 18, 19
`
`Celorio v. On Demand Books LLC, No. 12-821-GMS,
`2013 WL 4506411 (D. Del. Aug. 21, 2013) ................................................................. 9, 11, 18
`
`Consolidated Aluminum Corp. v. Hi-Tech Ceramics, Inc., No. CIV-87-983E,
`1988 WL 32213 (W.D.N.Y. Apr. 1, 1998) ......................................................................... 3, 17
`
`Cost Bros. Inc. v. Travelers Indem. Co., 760 F.2d 58 (3d Cir. 1985) ............................................9
`
`Davol, Inc. v. Atrium Med. Corp., No. 12-cv-958-GMS,
`2013 WL 3013343 (D. Del. June 17, 2013) ..................................................................... 10, 11
`
`Ever Win Int’l Corp. v. Radioshack Corp., 902 F. Supp. 2d 503 (D. Del. 2012) ................... 10, 19
`
`e-Watch, Inc. v. ACTi Corp., No. 5:12-cv-00695-FB-PMA, slip op. at 17
`(W.D. Tex. Aug. 9, 2013) ...................................................................................................... 15
`
`e-Watch, Inc. v. Lorex Canada, Inc., No. 4:12-cv-03314, slip op. at 5-7
`(S.D. Tex. Sept. 26, 2013) ..................................................................................................... 15
`
`Fresenius USA, Inc. v. Baxter Int’l, Inc., 721 F.3d 1330 (Fed. Cir. 2013) .................................. 10
`
`ImageVision.Net, Inc. v. Internet Payment Exchange, Inc., No. 12-054-GMS-MPT,
`2012 WL 5599338 (D. Del. Nov. 15, 2012) ........................................................................... 13
`
`Implicit Networks, Inc. v. Advanced Micro Devices, Inc., No. C08-184JLR,
`2009 WL 357902 (W.D. Wash. Feb. 9, 2009) ........................................................................ 18
`
`In re Bear Creek Techs., Inc., No. 12-md-2344-GMS,
`2013 WL 3789471 (D. Del. July 17, 2013) .................................................................. 9, 15, 18
`
`Krippelz v. Ford Motor Co., 667 F.3d 1261 (Fed. Cir. 2012) ..................................................... 11
`
`
`7945368.1
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`-v-
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`Case 1:12-cv-01107-GMS Document 36 Filed 01/22/14 Page 6 of 31 PageID #: 1185
`
`Microsoft Corp. v. ProxyConn, Inc., Nos. IPR2012-00026 (TLG),
`IPR2013-00109 (TLG), 2013 WL 5947704 (P.T.A.B. Feb. 25, 2013) ................................ 6, 13
`
`Mission Abstract Data L.L.C. v. Beasley Broadcast Grp., No. 11-176-LPS,
`2011 WL 5523315 (D. Del. Nov. 14, 2011) ........................................................................... 18
`
`Neste Oil OYJ v. Dynamic Fuels, LLC, No. 12-1744-GMS,
`2013 WL 3353984 (D. Del. July 2, 2013) .................................................................... 3, 13, 20
`
`Pegasus Dev. Corp. v. Directv, Inc., No. 00-1020-GMS,
`2003 WL 21105073 (D. Del. May 14, 2003) ...........................................................................9
`
`Princeton Digital Image Corp. v. Konami Digital Entm’t, Inc.,
`No. 1:12-cv-01561-LPS-CJB, slip op. (D. Del. Jan. 15, 2014) ............................................... 19
`
`Procter & Gamble Co. v. Kraft Foods Global, Inc., No. C 08-0930 PJH,
`2008 WL 3833576 (N.D. Cal. Aug. 15, 2008) ....................................................................... 14
`
`Robert Bosch Healthcare Sys., Inc. v. ExpressMD Solutions, LLC,
`No. C. 12-00068 JSW, 2013 WL 752474 (N.D. Cal. Feb. 27, 2013) ...................................... 14
`
`Round Rock Research LLC v. Dole Food Co., Civil Action Nos. 11-1239-RGA,
`11-1241-RGA, 11-1242-RGA, 2012 WL 1185022 (D. Del. Apr. 6, 2012) ............................. 11
`
`Ruckus Wireless, Inc. v. Netgear, Inc., No. C 09-5271 PJH,
`2010 WL 1222151 (N.D. Cal. Mar. 25, 2010)........................................................................ 14
`
`Slip Track Sys., Inc. v. Metal Lite, Inc., 159 F.3d 1337 (Fed. Cir. 1998) .................................... 10
`
`SMT Solutions, Inc. v. ExpoEvent Supply LLC, No. 11-6225 (ES) (CLW),
`2012 WL 3526830 (D.N.J. Aug. 15, 2012) ............................................................................ 14
`
`Software Rights Archive, LLC v. Facebook, Inc.,
`Nos. C-12-3970 RMW, C-12-3971 RMW, C-12-3972 RMW,
`2013 WL 5225522 (N.D. Cal. Sept. 17, 2013) ...................................................... 10, 13-14, 19
`
`SSW Holding Co. v. Schott Gemtron Corp., No. 3:12-cv-661-S,
`2013 WL 4500091 (W.D. Ky. Aug. 21, 2013) ....................................................................... 12
`
`Target Therapeutics, Inc. v. SciMed Life Sys., Inc., No. C-94-20775 RPA (EAI),
`1995 WL 20470 (N.D. Cal. Jan. 13, 1995) ............................................................................. 11
`
`Textron Innovations Inc. v. Toro Co., No. 05-486 (GMS),
`2007 WL 7772169 (D. Del. Apr. 25, 2007)............................................................................ 11
`
`Trading Techs. Int’l, Inc. v. Open E Cry, LLC, 728 F.3d 1309 (Fed. Cir. 2013) ......................... 11
`
`Universal Elecs., Inc. v. Universal Remote Control, Inc.,
`943 F. Supp. 2d 1028 (C.D. Cal. 2013) ....................................................................................9
`
`
`7945368.1
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`-vi-
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`Case 1:12-cv-01107-GMS Document 36 Filed 01/22/14 Page 7 of 31 PageID #: 1186
`
`Viskase Corp. v. Am. Nat’l Can Co., 261 F.3d 1316 (Fed. Cir. 2001)...........................................9
`
`Walker Digital, LLC v. Google, Inc., No. 11-cv-309-SLR,
`2013 WL 1489003 (D. Del. Apr. 11, 2013)........................................................................ 3, 17
`
`Statutes
`
`35 U.S.C. § 314 ......................................................................................................................... 20
`
`35 U.S.C. § 315 .................................................................................................................. passim
`
`35 U.S.C. § 316 ......................................................................................................................... 20
`
`Other Authorities
`
`157 Cong. Rec. S1360-02 (daily ed. Mar. 8, 2011) (statement of Sen. Kyl) ............................... 16
`
`Regulations
`
`37 C.F.R. § 42.100(c) ................................................................................................................ 20
`
`37 C.F.R. § 42.101(b) ................................................................................................................ 13
`
`37 C.F.R. § 42.122(b) ................................................................................................................ 13
`
`77 Fed. Reg. 48,679 (Aug. 14, 2012) ......................................................................................... 16
`
`77 Fed. Reg. 48,695 (Aug. 14, 2012) ................................................................................... 16, 20
`
`
`7945368.1
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`-vii-
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`Case 1:12-cv-01107-GMS Document 36 Filed 01/22/14 Page 8 of 31 PageID #: 1187
`
`I.
`
`NATURE AND STAGE OF THE PROCEEDINGS
`
`On September 10, 2012, Bonutti Skeletal Innovations LLC (“BSI”) filed in this District
`
`four companion actions against Smith & Nephew, Inc. (“S&N”); Zimmer, Inc. and Zimmer
`
`Holdings, Inc. (collectively, “Zimmer”); ConforMIS, Inc.; and Wright Medical Group, Inc. and
`
`Wright Medical Technology, Inc. (collectively, “Wright Medical”).1 BSI asserts against Zimmer
`
`six related patents directed to knee implants (the “knee patents”).2 BSI asserts one of the six
`
`knee patents against ConforMIS and three of the six knee patents against Wright Medical.3 BSI
`
`also asserted four of the six knee patents against S&N.4
`
`In September 2013, S&N filed inter partes review (“IPR”) petitions in the U.S. Patent
`
`and Trademark Office (“PTO”) on all of the patents asserted against it and, two weeks later,
`
`moved to stay its action. BSI and S&N recently stipulated to a dismissal without prejudice of the
`
`S&N action. To date, however, two of S&N’s four IPR petitions on knee patents (specifically,
`
`petitions on the ’9229 and ’896 patents) remain pending before the PTO.
`
`Although the six patents asserted against Zimmer collectively contain 258 claims and the
`
`single patent asserted against ConforMIS contains 48 claims, BSI has yet to identify a single
`
`claim that Zimmer or ConforMIS allegedly infringes. With respect to the three patents asserted
`
`against Wright Medical, BSI has identified five of the 148 claims as allegedly infringed, but BSI
`
`has not limited its infringement allegations to those five claims. The Court has not entered a
`
`1 The Zimmer, ConforMIS, and Wright Medical cases are referred to herein, collectively, as
`the “BSI cases.”
`2 U.S. Patent Nos. 6,702,821 (“’821 patent”); 7,806,896 (“’896 patent”); 8,133,229 (“’3229
`patent”); 7,837,736 (“’736 patent”); 7,959,635 (“’635 patent”); and 7,749,229 (“’9229
`patent”).
`3 BSI asserts the ’896 patent against ConforMIS and the ’821, ’896, and ’3229 patents against
`Wright Medical.
`4 BSI asserted the ’821, ’896, ’3229, and ’9229 patents against S&N, along with U.S. Patent
`Nos. 7,087,073 and 5,980,559.
`
`
`
`-1-
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`Case 1:12-cv-01107-GMS Document 36 Filed 01/22/14 Page 9 of 31 PageID #: 1188
`
`scheduling order, and discovery has not begun, in any of the BSI cases. Indeed, apart from the
`
`pleadings, a motion to dismiss granted in part in the ConforMIS action, and the conferences
`
`before this Court on scheduling and a potential stay, there has been no activity in the BSI cases.5
`
`After S&N filed its stay motion in October 2013, Zimmer filed its own IPR petitions on
`
`the two knee patents asserted only against Zimmer (the ’635 and ’736 patents) and an additional
`
`IPR petition on the ’896 patent. Wright Medical has also filed its own IPR petition on the ’896
`
`patent. Thus, including S&N’s pending petitions, four of the six knee patents BSI asserts against
`
`Zimmer are presently the subjects of IPR petitions—the ’635, ’736, ’896, and ’9229 patents.
`
`This Court has held several conferences to discuss staying the BSI cases and the scope of
`
`any estoppel that should apply to parties seeking a stay but who are not IPR petitioners for a
`
`given patent-at-issue. The parties were unable to reach agreement on these issues, and the Court
`
`ordered the parties to submit a stipulated briefing schedule regarding a motion to stay pending
`
`the IPR petitions. The parties did so, and Zimmer, ConforMIS, and Wright Medical
`
`(collectively, the “Defendants,” or individually, a “Defendant”) now jointly move to stay the BSI
`
`cases pending resolution of the IPR petitions.
`
`II.
`
`SUMMARY OF THE ARGUMENT
`
`The BSI cases should be stayed because each of the pertinent factors favors a stay:
`
`1)
`
`Simplification. As this Court and others have repeatedly found, staying a
`
`complex patent case pending PTO review likely will promote judicial economy and simplify
`
`issues of claim construction, infringement, invalidity, and damages—four of the most significant
`
`issues in any patent case. In view of the pending IPR petitions, this Court should stay the BSI
`
`cases. Even though not every claim BSI could eventually assert against the Defendants is
`
`5 The Court has deferred setting a schedule until it has decided the motions seeking a stay of
`the BSI cases. (C.A. No. 12-1107, D.I. 23, Oct. 24, 2013 Tele. Conf. Tr. at 21:7-23:1.)
`
`
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`-2-
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`Case 1:12-cv-01107-GMS Document 36 Filed 01/22/14 Page 10 of 31 PageID #: 1189
`
`currently the subject of an IPR petition, staying the BSI cases likely will simplify the issues due
`
`to the relatedness of the asserted patents, the claims challenged in the IPRs, their dependent
`
`claims, and, due to the overlap in asserted patents, the BSI cases. See, e.g., Alloc, Inc. v. Unilin
`
`Decor NV, No. 03-cv-253-GMS, 2003 WL 21640372, at *2 (D. Del. July 11, 2003). This
`
`simplification is enhanced by each Defendant’s willingness—at this Court’s request, in order to
`
`facilitate a stay—to consent to an estoppel with respect to the ’821, ’3229, ’9229, and ’896
`
`patents as to grounds actually raised in an IPR petition filed by another Defendant or S&N and
`
`used by the PTO as the basis for a final, non-appealable judgment on the merits with respect to
`
`such petition.6 Moreover, there are two actions involving three of the knee patents pending in
`
`other Districts, and their relatively advanced stages may result in issues of validity being decided
`
`while the BSI cases are stayed, further simplifying the issues. See Consolidated Aluminum Corp.
`
`v. Hi-Tech Ceramics, Inc., No. CIV-87-983E, 1988 WL 32213, at *1 (W.D.N.Y. Apr. 1, 1998).
`
`2)
`
`Lack of Prejudice. BSI, a non-practicing entity, will not be prejudiced by a stay
`
`because it can be compensated with money damages for any resulting delay. Walker Digital,
`
`LLC v. Google, Inc., No. 11-cv-309-SLR, 2013 WL 1489003, at *2 (D. Del. Apr. 11, 2013).
`
`3)
`
`Early Timing. The timing of this motion favors a stay, as BSI has done nothing
`
`to move the BSI cases forward, the Court has deferred setting a schedule, and the parties have
`
`not even begun discovery. Neste Oil OYJ v. Dynamic Fuels, LLC, No. 12-1744-GMS, 2013 WL
`
`3353984, at *5 (D. Del. July 2, 2013).
`
`
`
`
`6 The stipulated estoppel does not apply to situations in which an IPR petition is withdrawn,
`terminated due to settlement, or otherwise terminated in a manner that does not address the
`merits of the arguments made in support of the petition, such as, for example, as a result of a
`settlement or BSI’s disclaimer of one or more claims at issue in the petition. See, e.g., infra
`note 9 and accompanying text.
`
`
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`Case 1:12-cv-01107-GMS Document 36 Filed 01/22/14 Page 11 of 31 PageID #: 1190
`
`III.
`
`STATEMENT OF FACTS
`
`A.
`
`BSI Monetizes Patents Through Licensing and Litigation.
`
`BSI is owned by Acacia Research Corporation (“Acacia”), which is in the business of
`
`“patent licensing.” (See Ex. A at 1; D.I. 4.)7 BSI and Acacia do not compete in the knee
`
`replacement market or produce any knee replacement products. (See Ex. B at 7 (Acacia
`
`“promote[s] a secondary market” for patents (emphasis added)).) Rather, their interest in
`
`patents is that of “strategic patent licensing and monetization.” (See Ex. C at 1.) Acacia intends
`
`its medical device patents, such as the knee patents at issue here, to be “another major growth
`
`driver for Acacia.” (See Ex. D at 1.)
`
`To accomplish its monetization strategy, BSI has filed multiple actions, against multiple
`
`medical device companies, in multiple jurisdictions. On September 10, 2012, BSI filed the
`
`pending BSI cases and its action against S&N, but then waited 116 days to serve the Complaints.
`
`(See D.I. 1, 5-7; Bonutti Skeletal Innovations LLC v. ConforMIS, Inc., Civil Action No. 12-1109
`
`(GMS) (“BSI v. ConforMIS”), D.I. 1, 5; Bonutti Skeletal Innovations, LLC v. Wright Medical
`
`Group, Inc., Civil Action No. 12-1110 (GMS) (“BSI v. Wright Medical”), D.I. 1, 5-7.) BSI
`
`currently alleges that Zimmer infringes the ’821, ’896, ’3229, ’9229, ’736, and ’635 patents; that
`
`ConforMIS infringes the ’896 patent, and that Wright Medical infringes the ’821, ’896, and
`
`’3229 patents. (See D.I. 10; BSI v. ConforMIS, D.I. 1; BSI v. Wright Medical, D.I. 7.)
`
`Three of the knee patents asserted in the BSI cases—the ’821, ’896, and ’3229 patents—
`
`are the subjects of two actions pending in other Districts. On September 10, 2012, the same day
`
`that BSI initiated the BSI cases, BSI sued several DePuy subsidiaries of Johnson & Johnson in
`
`7 Unless otherwise indicated, citations to ECF docket entries (introduced with “D.I.”) are
`citations to Bonutti Skeletal Innovations LLC v. Zimmer Holdings, Inc., Civil Action No. 12-
`1107 (GMS) (“BSI v. Zimmer”). Citations to lettered exhibits are citations to the Exhibits to
`the Declaration in Support of Defendants’ Joint Motion to Stay, filed herewith.
`
`
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`Case 1:12-cv-01107-GMS Document 36 Filed 01/22/14 Page 12 of 31 PageID #: 1191
`
`the District of Massachusetts, and currently alleges infringement of seven patents, including
`
`those three knee patents. (Bonutti Skeletal Innovations LLC v. DePuy Mitek LLC, No. 1:12-cv-
`
`11667-RGS (D. Mass.) (the “DePuy Action”); see Ex. E ¶¶ 11-13.) The parties in the DePuy
`
`Action have exchanged preliminary infringement and invalidity contentions, Markman briefing
`
`has begun, a Markman hearing is set for March 27, 2014, and dispositive motions are due on
`
`October 23, 2014. (See Ex. F at 5-8.) In addition, Biomet, Inc. filed suit against BSI on March
`
`8, 2013 in the Northern District of Indiana seeking a declaratory judgment that fifteen patents are
`
`not infringed and are invalid. (Biomet, Inc. v. Bonutti Skeletal Innovations LLC, No. 3:13-cv-
`
`00176-JVB-CAN (N.D. Ind.) (the “Biomet Action”); see Ex. G.) BSI counterclaimed for
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`infringement of all fifteen patents, including the three aforementioned knee patents. (See Ex. H.)
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`Markman briefing in the Biomet Action is due to conclude on May 12, 2014. (Ex. I at 2.)
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`B.
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`The BSI Knee Patents Are Related Members of a Single Patent Family.
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`As shown in the chart below, all six knee patents asserted in the BSI cases are related as
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`divisional, continuation, and/or continuation-in-part applications and, with certain modifications,
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`share a common specification:
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`Case 1:12-cv-01107-GMS Document 36 Filed 01/22/14 Page 13 of 31 PageID #: 1192
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`The ’635 patent is a divisional of the ’821 patent asserted against both Zimmer and
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`Wright Medical and, therefore, has a specification identical to the ’821 patent’s and also shares
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`common claim terms with the ’821 patent, such as “guide member,” “cutting tool,” and “guide
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`surface.” (Ex. J (identifying common claim terms).) The ’3229 and ’9229 patents, which are
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`related to the ’821 and ’635 patents through a series of continuations and continuations-in-part,
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`also share those same claim terms. (Id.)
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`C.
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`S&N, Zimmer, and Wright Medical Each Independently Petitioned for Inter Partes
`Review of Certain BSI Knee Patents.
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`In September 2013, S&N filed IPR petitions on every claim identified by BSI as
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`purportedly infringed by S&N and then moved to stay the case against it. (See Bonutti Skeletal
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`Innovations LLC v. Smith & Nephew, Inc., Civil Action No. 12-1111 (GMS) (“BSI v. S&N”),
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`D.I. 28 at 3; id., D.I. 27.) Subsequently, on January 3, 2014, BSI and S&N stipulated to a
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`dismissal without prejudice of BSI’s claims against S&N. (Id., D.I. 51, 52.) The timing of this
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`stipulation of dismissal prejudiced the Defendants’ ability to file additional IPR petitions on the
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`patents for which S&N had previously filed IPR petitions, as BSI did not file the stipulation of
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`dismissal until immediately prior to the January 6, 2014 statutory deadline for Zimmer and
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`ConforMIS to file stand-alone8 IPR petitions. To date, however, S&N’s IPR petitions on two of
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`the six knee patents—the ’896 and ’9229 patents—remain pending before the PTO.9
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`8
`In this context, “stand-alone” is used to refer to an IPR petition (1) filed prior to the statutory
`deadline for such filing, and (2) whose pendency is not dependent upon a predicate finding
`that the petition properly can be joined with another, timely filed petition on the same patent.
`See Microsoft Corp. v. ProxyConn, Inc., Nos. IPR2012-00026 (TLG), IPR2013-00109
`(TLG), 2013 WL 5947704, at *2 (P.T.A.B. Feb. 25, 2013) (“[T]he one-year time bar [under
`§ 315(b) for filing an IPR petition] does not apply to a request for joinder.”).
`9 On January 8, 2014, BSI filed Notices of Disclaimer with the PTO as to claim 1 of the ’821
`patent and claim 1 of the ’3229 patent, and on January 17, 2014, the PTO terminated S&N’s
`IPR petitions as to those patents. (Exs. K, L.) However, BSI has not filed a Notice of
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`Case 1:12-cv-01107-GMS Document 36 Filed 01/22/14 Page 14 of 31 PageID #: 1193
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`There are 258 claims in the six knee patents BSI asserts against Zimmer, 48 claims in the
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`knee patent BSI asserts against ConforMIS, and 148 claims in the three knee patents BSI asserts
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`against Wright Medical. (See D.I. 10-1 through 10-2 (39 claims); D.I. 10-3 through 10-5 (32
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`claims); D.I. 10-6 through 10-8 (48 claims); D.I. 10-9 through 10-11 (40 claims); D.I. 10-12
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`through 10-13 (39 claims); D.I. 10-14 through 10-16 (60 claims).) Because BSI’s infringement
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`allegations are extremely vague (BSI refused to identify all—and in two cases any—of the
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`allegedly infringing claims10), Zimmer and Wright Medical separately filed petitions on a subset
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`of the claims in the patents BSI asserts against them, respectively. Zimmer filed petitions on
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`independent claims 15 and 31 of the ’736 patent, independent claims 1 and 30 of the ’635 patent,
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`independent claim 40 of the ’896 patent, and certain dependent claims of each patent. (Exs. M,
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`N, O.) Similarly, Wright Medical filed an IPR petition on independent claims 1, 13, 25, and 40
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`of the ’896 patent. (Ex. P.) Thus, of the six knee patents asserted in the BSI cases, two (the ’635
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`and ’736 patents) are the subjects of Zimmer’s IPR petitions; a third (the ’896 patent) is the
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`subject of three IPR petitions independently filed by Zimmer, Wright Medical, and S&N; and a
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`fourth (the ’9229 patent) is the subject of an S&N petition. (BSI v. S&N, D.I. 29-4, 29-6.)
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`D.
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`The Defendants’ Proposed Estoppel and the Statutory Estoppel Arising from Inter
`Partes Review.
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`At this Court’s request, in order to facilitate a stay, each Defendant is willing to stipulate
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`to an estoppel with respect to a patent for which another Defendant or S&N has filed an IPR
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`petition. Such stipulation would estop each Defendant from later contesting in its respective BSI
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`Disclaimer as to the ’896 or ’9229 patents, and, to date, S&N’s IPR petitions on those patents
`remain pending in the PTO.
`10 BSI asserted that it could not identify allegedly infringed claims because it did not have the
`documents and devices it said it needed to properly assess infringement. (D.I. 28, Nov. 26,
`2013 Tele. Conf. Tr. at 12:25-13:5, 15:17-22, 20:17-20.) Although ConforMIS produced, on
`an expedited basis, the documents BSI requested along with a representative sample of an
`accused infringing device, BSI still has not identified any allegedly infringed claim.
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`Case 1:12-cv-01107-GMS Document 36 Filed 01/22/14 Page 15 of 31 PageID #: 1194
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`case the validity of claims at issue in an IPR petition filed by another Defendant or S&N on
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`grounds actually raised in the petition and used by the PTO as the basis for a final, non-
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`appealable judgment on the merits with respect to such petition,11 as set forth in Paragraph 2 of
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`the Proposed Order attached hereto. (Ex. Q ¶ 2.) The estoppel would not apply to any other
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`judicial, administrative, or other proceeding. (Id. ¶ 4.) In particular, Defendants agree as
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`follows:
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`Should any S&N IPR Claim, Wright Medical IPR Claim, or Zimmer IPR
`Claim survive a Knee Patent IPR after a final, non-appealable judgment on the
`merits of a Knee Patent IPR petition addressing such claim without being
`amended, narrowed, or substituted, and to the extent estoppel under 35 U.S.C. §
`315(e)(2) does not apply, each Defendant shall be estopped in the above-
`captioned action in which it is named as a Defendant from challenging the
`validity of such claim, to the extent such claim is asserted in such action, as being
`(a) anticipated under 35 U.S.C. § 102 on the basis of any prior art reference
`specifically asserted by S&N, Wright Medical, or Zimmer to anticipate such
`claim and specifically used by the PTAB in a finding of anticipation as to such
`claim, or (b) obvious under 35 U.S.C. § 103 on the basis of (i) any prior art
`reference specifically asserted by S&N, Wright Medical, or Zimmer to alone
`render such claim obvious and specifically used by the PTAB in a finding of
`obviousness as to such claim in view of such reference alone, or (ii) a
`combination of two or more prior art references specifically asserted by S&N,
`Wright Medical, or Zimmer to render such claim obvious in combination and
`specifically used by the PTAB in a finding of obviousness as to such claim in
`view of the combination of such references.
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`(Id. (footnotes omitted).)
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`Although Zimmer and Wright Medical may ultimately be subject to statutory estoppel
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`under 35 U.S.C. § 315 (e)(2) with respect to their own IPR petitions, ConforMIS, which has not
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`filed any petitions, is not subject to such estoppel. (Id. ¶ 2 n.3.)12 The Proposed Order further
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`provides that regardless of the outcome of any IPR, the Defendants shall not be estopped from
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`asserting invalidity based on any ground not specifically identified in Paragraph 2, quoted above.
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`11 See supra note 6 and accompanying text.
`12 See also infra note 15 and accompanying text.
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`Case 1:12-cv-01107-GMS Document 36 Filed 01/22/14 Page 16 of 31 PageID #: 1195
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`(Id. ¶ 3.) The Defendants’ proposed estoppel is consistent with that ordered by this Court in
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`other cases in which the Court has imposed a stay and which involved a mix of defendants who
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`were IPR petitioners and defendants who were not. See, e.g., AIP Acquisitions v. Level 3
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`Commc’ns, LLC, No. 1:12-cv-00617-GMS (D. Del. Jan. 7, 2014) (Ex. R), D.I. 62 (stipulation of
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`limited estoppel); id. at D.I. 63 (D. Del. Jan. 9, 2014) (granting stay) (Ex.