CDXC's Reply in Motion to Dismiss Patent Misuse Claim
Last week we covered Elysium's opposition to ChromaDex's latest motion to dismiss the Patent Misuse claim, and yesterday ChromaDex filed its Reply brief, which denounces Elysium's Opposition brief almost as hotly as we did in our coverage last week.
Attorney Anthony Stiegler routinely puts the "Cool" in "Cooley," but even Cooley is showing some signs of frustration with Elysium's no-holds-barred fact-free pleading style. We learn from ChromaDex's brief that:
"Elysium's opposition overreaches..."
"Elysium resists the opportunity...to substantially streamline this litigation..."
"In an attempt to save its claim, Elysium now makes a new 90-degree turn..."
"Elysium overreaches again by falsely accusing ChromaDex..."
And that's just page 1. On page 2 Cooley describes Elysium's patent misuse claim as "fictional" (I have said "bogus," but we are in full agreement), and Elysium's argument as "strained." Here, listen to Cooley:
Elysium dedicates the majority of its Opposition to falsely arguing that the Court has subject matter jurisdiction based on a threat of imminent future harm from a patent litigation suit under the MedImmune test. (Opp. at 6-12.) However, Elysium does not cite a single case finding jurisdiction based on a similar dearth of affirmative acts by a patentee specifically directed at the declaratory judgment plaintiff...To argue that ChromaDex has taken at least one affirmative act to create an implied threat of patent litigation, Elysium tries to rewrite the history of the parties’ NIAGEN Supply Agreement. Changing its story yet again, Elysium now asserts that 'ChromaDex terminated its license to Elysium'...This is not, however, a license termination case,"
because Elysium never had a patent license, and the only license they ever did have -- an implied license to re-sell the ingredients they purchased -- never terminated.
Such an implied license still exists for Elysium to sell through any product that it lawfully purchased from ChromaDex. However, no implied license from ChromaDex would ever extend to an ingredient purchased from a third party. Elysium’s argument obviously glosses over this critical distinction, intentionally conflating the two concepts with deliberately loose language in what can only be viewed as an attempt to mislead the Court. ChromaDex’s decision to cut off future deliveries to a delinquent customer says nothing about whether ChromaDex has grounds to, or ever intends to sue Elysium for patent infringement based on an ingredient that it purchased from a third party. (emphasis added)
Elysium further misrepresents that Mr. Jacksch threatened Elysium with patent infringement when Mr. Jaksch said that ChromaDex would 'vigorously defend' its global patent portfolio. However, supporting its licensors’ patent portfolio from attack, such as defending against Elysium’s inter partes review challenges...is not tantamount to ChromaDex offensively accusing Elysium of infringing those patents....A statement of defense is not objectively probative of an intent or willingness to institute offensive patent infringement litigation, especially where Elysium has acted as the aggressor and itself filed inter-partes patent reviews against ChromaDex’s licensor, which the licensor is defending.
ChromaDex defeats Elysium's final argument -- that ChromaDex must resolve its patent rights here and now or promise to forgo those rights in the future -- with this payoff quote from mandatory 9th Circuit authority:
“A patentee has no obligation to spend the time and money to test a competitors’ product nor to make a definitive determination, at the time and place of the competitors’ choosing, that it will never bring an infringement suit. And the patentee’s silence does not alone make an infringement action or other interference with the plaintiff’s business imminent. Prasco, 537 F.3d at 1341” ...The law is clear that ChromaDex need not go through the effort of an infringement and patent claim analysis or provide an unequivocal covenant never to sue for infringement merely because Elysium wants one.
Well, it is not so surprising that Cooley would be able to slam dunk its position, given that the thing Cooley is opposing is a bogus claim that has also been mooted. There is simply no reason for this part of the dispute to be in contention, but for Elysium's apparently insatiable thirst for litigation.
However, as much as I enjoyed reading Cooley's reply brief, it was only made possible by Elysium's outrageous litigation behavior, and the utter mismatch between Cooley's adherence to traditional, professional standards of etiquette, and Elysium's apparent insistence that its attorneys launch kitchen-sink challenges to practically every assertion in every paper filed, which I think constitutes an abuse of the judicial process.
Of course, ChromaDex's position today -- that a bogus-mooted patent misuse claim is not justiciable -- is every bit as strong as ChromaDex's claim last May that a bogus patent misuse claim was not cognizable. The law didn't matter then -- it never matters if the clerk doesn't take time to read the briefs and the underlying exhibits.
But since May, this litigation has expanded dramatically, and the Central District of California is no doubt aware of that, and maybe will this time be less indulgent of a hyper-litigious plaintiff. We'll know soon.