Case 1:20-cv-00925-JFB-SRF Document 117 Filed 03/30/21 Page 1 of 10 PageID #: 6578
`
`IN THE UNITED STATES DISTRICT COURT
`FOR THE DISTRICT OF DELAWARE
`
`HOLOGIC, INC., a Delaware corporation;
`and CYTYC SURGICAL PRODUCTS,
`LLC, a Massachusetts limited liability
`company,
`
`Plaintiffs,
`v.
`
`MINERVA SURGICAL, INC., a Delaware
`corporation.
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` C.A. No. 20-925-JFB-SRF
`
`JURY TRIAL DEMANDED
`
` REDACTED - PUBLIC VERSION
`
`DEFENDANT MINERVA SURGICAL, INC.’S OPENING BRIEF IN SUPPORT OF ITS
`MOTION FOR PARTIAL SUMMARY JUDGMENT OF NO LOST PROFITS
`
`Ian R. Liston (#5507)
`Jennifer A. Ward (#6476)
`WILSON SONSINI GOODRICH & ROSATI, P.C.
`222 Delaware Avenue, Suite 800
`Wilmington, DE 19801
`(302) 304-7600
`iliston@wsgr.com
`jward@wsgr.com
`
`Counsel for Defendant Minerva Surgical, Inc.
`
`Of Counsel:
`
`Vera M. Elson
`WILSON SONSINI GOODRICH & ROSATI, P.C.
`650 Page Mill Road
`Palo Alto, CA 94304
`(650) 493-9300
`velson@wsgr.com
`
`Edward G. Poplawski
`Olivia M. Kim
`Erik J. Carlson
`WILSON SONSINI GOODRICH & ROSATI, P.C.
`633 West Fifth Street, 15th Floor
`Los Angeles, CA 90071
`(323) 210-2900
`epoplawski@wsgr.com
`okim@wsgr.com
`ecarlson@wsgr.com
`
`Dated: March 22, 2021
`
`

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`Case 1:20-cv-00925-JFB-SRF Document 117 Filed 03/30/21 Page 2 of 10 PageID #: 6579
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`TABLE OF CONTENTS
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`Page
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`I.
`
`II.
`
`III.
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`IV.
`
`INTRODUCTION .............................................................................................................. 1
`
`LEGAL STANDARDS ...................................................................................................... 1
`
`A.
`
`B.
`
`Summary Judgment ................................................................................................ 1
`
`Lost Profits .............................................................................................................. 2
`
`HOLOGIC IS NOT ENTITLED TO LOST PROFITS ...................................................... 3
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`CONCLUSION ................................................................................................................... 4
`
`i
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`

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`Case 1:20-cv-00925-JFB-SRF Document 117 Filed 03/30/21 Page 3 of 10 PageID #: 6580
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`TABLE OF AUTHORITIES
`
`CASES PAGE(S)
`
`Anderson v. Liberty Lobby, Inc.,
`477 U.S. 242 (1986) .............................................................................................................1
`
`Aptargroup, Inc. v. Summit Packaging Sys., Inc.,
`No. 94 C 2304, 1996 U.S. Dist. LEXIS 3026 (N.D. Ill. Mar. 7, 1996) ...........................2, 3
`
`BIC Leisure Prods. v. Windsurfing Int’l, Inc.,
`1 F.3d 1214 (Fed. Cir. 1993)................................................................................................2
`
`Celotex Corp. v. Catrett,
`477 U.S. 317 (1986) .............................................................................................................1
`
`Go Med. Indus. Pty, Ltd. v. Inmed Corp.,
`300 F. Supp. 2d 1297 (N.D. Ga. 2003) ................................................................................4
`
`Grain Processing Corp. v. Am. Maize-Prods. Co.,
`185 F.3d 1341 (Fed. Cir. 1999)........................................................................................2, 4
`
`Kearns v. Chrysler Corp.,
`32 F.3d 1541 (Fed. Cir. 1994)..............................................................................................4
`
`Matsushita Elec. Indus. Co. v. Zenith Radio Corp.,
`475 U.S. 574 (1986) .............................................................................................................1
`
`Mentor Graphics Corp. v. Eve-USA, Inc.,
`851 F.3d 1275 (Fed. Cir. 2017)............................................................................................2
`
`Pall Corp. v. Micron Separations, Inc.,
`66 F.3d 1211 (Fed. Cir. 1995)..........................................................................................2, 3
`
`Panduit Corp. v. Stahlin Bros. Fibre Works, Inc.,
`575 F.2d 1152 (6th Cir. 1978) .................................................................................1, 2, 3, 4
`
`Presidio Components, Inc. v. Am. Tech. Ceramics Corp.,
`875 F.3d 1369 (Fed. Cir. 2017)............................................................................................3
`
`Schneider (Eur.) AG v. Scimed Life Sys.,
`852 F. Supp. 813 (D. Minn. 1994) ...................................................................................2, 3
`
`RULES
`
`FED. R. CIV. P. 56(a) ........................................................................................................................1
`
`ii
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`

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`Case 1:20-cv-00925-JFB-SRF Document 117 Filed 03/30/21 Page 4 of 10 PageID #: 6581
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`I.
`
`INTRODUCTION1
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`Hologic seeks both lost profits and reasonable royalty in damages for sales of the accused
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`product—Minerva’s Spring Handle device—from June 2018 to November 19, 2018 (the
`
`expiration of the ’348 patent). See Ex.2 1 (Barry Opening Report) at ¶¶ 16-20. But Hologic
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`cannot prove lost profits as a matter of law. Specifically, Hologic cannot prove that the second
`
`Panduit factor—the absence of non-infringing substitutes—is met. There is no factual dispute as
`
`to whether Minerva had a compulsory license issued by this Court to sell the original product,
`
`which is not accused in this case, in the damages period (June-November 2018). It is also well-
`
`established law that a licensed product is an acceptable non-infringing substitute. Accordingly, a
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`summary judgment of no lost profits is appropriate.3
`
`II.
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`LEGAL STANDARDS
`
`A.
`
`Summary Judgment
`
`When there is “no genuine dispute at to any material fact and the movant is entitled to
`
`judgment as a matter of law,” summary judgment is appropriate. FED. R. CIV. P. 56(a). The
`
`moving party bears the initial burden to show the absence of a genuine issue of material fact
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`supported by evidence showing a jury could not reasonably find the nonmoving party’s favor.
`
`Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986); Anderson v. Liberty Lobby, Inc., 477 U.S.
`
`242, 252 (1986). The burden then shifts to the non-movant to demonstrate the existence of a
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`genuine issue for trial. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586-87
`
`(1986).
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`1 Unless stated otherwise, all emphasis in quotes is added.
`2 All exhibits are attached to Declaration of Erik J. Carlson filed concurrently hereto.
`3 Hologic has an alternative theory seeking only reasonable royalty in damages in the event that
`it cannot recover any lost profits. See Ex. 1 (Barry Opening Report) at ¶ 127.
`
`

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`Case 1:20-cv-00925-JFB-SRF Document 117 Filed 03/30/21 Page 5 of 10 PageID #: 6582
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`B.
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`Lost Profits
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`A patent owner seeking to recover lost profits must show “causation in fact” in a “but
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`for” analysis where absent infringement, there is a reasonable probability that the patent owner
`
`would have made the infringer’s sales. Grain Processing Corp. v. Am. Maize-Prods. Co., 185
`
`F.3d 1341, 1349 (Fed. Cir. 1999). Because this is difficult to establish, courts typically apply the
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`four-factor test articulated in Panduit Corp. v. Stahlin Bros. Fibre Works, Inc., 575 F.2d 1152,
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`1156 (6th Cir. 1978) to determine the “but for” causation. BIC Leisure Prods. v. Windsurfing
`
`Int’l, Inc., 1 F.3d 1214, 1217-18 (Fed. Cir. 1993) (“(1) demand for the patented product; (2)
`
`absence of acceptable noninfringing substitutes; (3) manufacturing and marketing capacity to
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`exploit the demand; and (4) the amount of profit it would have made.”). “Damages under
`
`Panduit are not easy to prove.” Mentor Graphics Corp. v. Eve-USA, Inc., 851 F.3d 1275, 1285
`
`(Fed. Cir. 2017). Among other reasons, the Panduit test is difficult to prove because the first two
`
`factors, taken together, require patentees “to prove demand for the product as a whole and the
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`absence of non-infringing alternatives,” thereby tying lost profit damages “to specific claim
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`limitations and ensur[ing] that damages are commensurate with the value of the patented
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`feature.” Id.
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`Notably, for the purpose of the second Panduit factor, a licensed product is an acceptable,
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`non-infringing substitute. See Pall Corp. v. Micron Separations, Inc., 66 F.3d 1211, 1222-23
`
`(Fed. Cir. 1995) (“The district court . . . held that the Cuno membranes were ‘acceptable
`
`noninfringing substitute for the Pall membranes. . . . [A]fter Pall settled with Cuno, the district
`
`court correctly held that Cuno’s presence in the marketplace could not be ignored . . .”); see also,
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`e.g., Schneider (Eur.) AG v. Scimed Life Sys., 852 F. Supp. 813, 858 (D. Minn. 1994) (“A
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`licensed product is an acceptable non-infringing alternative as of the time that it is licensed.”)
`
`(citing BIC Leisure, 1 F.3d at 1218); Aptargroup, Inc. v. Summit Packaging Sys., Inc., No. 94 C
`
`2
`
`

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`Case 1:20-cv-00925-JFB-SRF Document 117 Filed 03/30/21 Page 6 of 10 PageID #: 6583
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`2304, 1996 U.S. Dist. LEXIS 3026, at *15 (N.D. Ill. Mar. 7, 1996) (“Devices produced by a third
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`party licensee of the patentee . . . are considered to be acceptable non-infringing substitutes.”).
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`III.
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`HOLOGIC IS NOT ENTITLED TO LOST PROFITS
`
`In the First Action, this Court found that “Hologic is entitled to recover a reasonable
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`running royalty from the last-produced date of sales (April 1, 2018) to the date the ’348 patent
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`expired (November 19, 2018)” for the accused product at issue in that case (i.e., Minerva’s
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`original product). First Action, D.I. 616 (05/02/19 Memorandum and Order (“May 2019
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`Order”)) at 20. There is no dispute that the May 2019 Order is a compulsory license which
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`allowed Minerva to freely sell its original product during this case’s damages period (June-
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`November 2018). Hologic’s damages expert, Chris Barry, admitted to this. Ex. 3, 02/25/21
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`Barry Dep. Tr. at 54:10-18, 55:13-56:17 (identifying the May 2019 Order as a compulsory
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`license); id. at 56:18-25 (“Q. So from June 2018 to November 2018, Minerva had an option to
`
`sell only the original design, rather than transitioning into selling the spring design, is that right?
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`. . . A. Yes, that’s correct.”).
`
`However, Hologic and Mr. Barry failed to consider Minerva’s licensed product—the
`
`original design—as a non-infringing substitute for the accused Spring Handle product in
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`analyzing the second Panduit factor—or in any analysis relating to lost profits—in this case. See
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`generally Ex. 1 (Barry Opening Report), ¶ 31-39; Ex. 2 (Barry Reply Report). This is fatal to
`
`Hologic’s claim of lost profits as it is well-settled that a licensed product is an acceptable non-
`
`infringing alternative. See, e.g., Pall Corp., 66 F.3d 1211 at 1222-23; Schneider (Eur.) AG, 852
`
`F. Supp. at 858; Aptargroup, Inc., 1996 U.S. Dist. LEXIS 3026 at *15.
`
`Indeed, there is no dispute that the original product was acceptable to potential customers
`
`and was available at the relevant time. See, e.g., Presidio Components, Inc. v. Am. Tech.
`
`Ceramics Corp., 875 F.3d 1369, 1380 (Fed. Cir. 2017) (“To prove the absence of acceptable,
`
`3
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`

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`Case 1:20-cv-00925-JFB-SRF Document 117 Filed 03/30/21 Page 7 of 10 PageID #: 6584
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`non-infringing alternatives, the patentee may prove either that the potential alternative was not
`
`acceptable to potential customers or was not available at the time.”) (citing Grain Processing
`
`Corp., 185 F.3d at 1353-55). Mr. Barry admitted that Minerva’s original product was sold in the
`
`same time period for substantially similar prices and offering substantially similar characteristics
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`as the accused Spring Handle product. See, e.g., Ex. 3, 02/25/21 Barry Dep. Tr. at 29:18-24 (“Q.
`
`Do you have any understanding as to whether if there were any price differences between the
`
`original handle and the spring handle? A. I know I looked at it, but I don’t have a current
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`memory of the numbers. I don’t think there was much of a difference at all. But I would have
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`to go back and check to be sure.”); Ex. 4, MSIDE001633 (showing original product price as
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` and the accused Spring Handle product price as
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`
`
`); Ex. 1 (Barry Opening Report) at ¶ 119 (“I understand from Mr.
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`Leinsing that the [Spring Handle] Device has a slight modification of the handle and otherwise
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`retains the features from the original Minerva device and does not impact the features that drive
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`demand.”).
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`Because there is no factual dispute as to whether Minerva had a compulsory license to
`
`sell the original product, which is an acceptable non-infringing substitute under the second
`
`Panduit factor, Hologic cannot prove lost profits as a matter of law. See, e.g., Kearns v. Chrysler
`
`Corp., 32 F.3d 1541, 1552 (Fed. Cir. 1994) (affirming summary judgment of no lost profits
`
`because plaintiff “failed to prove the Panduit requirements for lost profits”); Go Med. Indus. Pty,
`
`Ltd. v. Inmed Corp., 300 F. Supp. 2d 1297, 1316 (N.D. Ga. 2003) (granting summary judgment
`
`of no lost profits because “[p]laintiffs cannot show the absence of non-infringing substitutes”).
`
`IV.
`
`CONCLUSION
`
`For the foregoing reasons, Minerva’s motion should be GRANTED.
`
`4
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`

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`Case 1:20-cv-00925-JFB-SRF Document 117 Filed 03/30/21 Page 8 of 10 PageID #: 6585
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`Dated: March 22, 2021
`
`Respectfully submitted,
`
`WILSON SONSINI GOODRICH & ROSATI, P.C.
`
`
`/s/ Ian R. Liston
`Ian R. Liston (#5507)
`Jennifer A. Ward (#6476)
`WILSON SONSINI GOODRICH & ROSATI, P.C.
`222 Delaware Avenue, Suite 800
`Wilmington, DE 19801
`(302) 304-7600
`iliston@wsgr.com
`jward@wsgr.com
`
`Counsel for Defendant Minerva Surgical, Inc.
`
`Of Counsel:
`
`Vera M. Elson
`WILSON SONSINI GOODRICH & ROSATI, P.C.
`650 Page Mill Road
`Palo Alto, CA 94304
`(650) 493-9300
`velson@wsgr.com
`
`Edward G. Poplawski
`Olivia M. Kim
`Erik J. Carlson
`WILSON SONSINI GOODRICH & ROSATI, P.C.
`633 West Fifth Street, 15th Floor
`Los Angeles, CA 90071
`(323) 210-2900
`epoplawski@wsgr.com
`okim@wsgr.com
`ecarlson@wsgr.com
`
`5
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`

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`Case 1:20-cv-00925-JFB-SRF Document 117 Filed 03/30/21 Page 9 of 10 PageID #: 6586
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`CERTIFICATE OF SERVICE
`I hereby certify that on March 22, 2021, [SEALED] Defendant Minerva Surgical, Inc.’s
`Opening Brief in Support of its Motion for Partial Summary Judgment of No Lost Profits was filed
`with the Court’s CM/ECF system and served via email upon counsel below.
`
`Via Electronic Mail
`
`Karen L. Pascale
`Pilar G. Kraman
`YOUNG CONAWAY STARGATT & TAYLOR, LLP
`Rodney Square
`1000 North King Street
`Wilmington, DE 19801
`Telephone: (302) 571-6600
`kpascale@ycst.com
`pkraman@ycst.com
`
`Attorneys for Plaintiffs, Hologic, Inc. and Cytyc
`Surgical Products, LLC
`
`Via Electronic Mail
`
`Matthew M. Wolf
`Marc A. Cohn
`Jennifer A. Sklenar
`ARNOLD & PORTER KAYE SCHOLDER LLP
`601 Massachusetts Ave., NW
`Washington, DC 20001-3743
`Telephone: (202) 942-5000
`Matthew.wolf@arnoldporter.com
`Marc.cohn@arnoldporter.com
`Jennifer.sklenar@arnoldporter.com
`
`Attorneys for Plaintiffs, Hologic, Inc. and Cytyc
`Surgical Products, LLC
`
`

`

`Case 1:20-cv-00925-JFB-SRF Document 117 Filed 03/30/21 Page 10 of 10 PageID #: 6587
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`Via Electronic Mail
`
`Via Electronic Mail
`
`Ryan J. Casamiquela
`ARNOLD & PORTER KAYE SCHOLER LLP
`Three Embarcadero Center
`San Francisco, CA 94111-4024
`Telephone: (415) 471-3100
`Ryan.casamiquela@arnoldporter.com
`
`Attorneys for Plaintiffs, Hologic, Inc. and Cytyc
`Surgical Products, LLC
`
`Assad H. Rajani
`ARNOLD & PORTER KAYE SCHOLER LLP
`Five Palo Alto Square
`3000 El Camino Real, Suite 500
`Palo Alto, CA 94306
`Telephone: (650) 319-4500
`
`Attorneys for Plaintiffs, Hologic, Inc. and Cytyc
`Surgical Products, LLC
`
`Dated: March 22, 2021
`
`/s/ Ian R. Liston
` Ian R. Liston (#5507)
`
`Counsel for Defendant Minerva Surgical, Inc..
`
`-2-
`
`