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  • Writer's pictureShelly Albaum

Elysium's Reply Brief ISO MTD Delaware

We don't care much about Elysium's reply brief in support of its Motion to Dismiss ChromaDex's Patent Infringement case in Delaware, because we already have guessed how this would come out, and studied in ChromaDex's responsive brief the reasons why this would be so.

But for completeness, and for those who are following the legal arguments too closely, here is Elysium's Reply to what ChromaDex said a week ago:

For the most part, Elysium is simply re-stating the argument in its opening brief.

Elysium's worst moment comes when it makes a red-herring pivot:

Plaintiffs’ argument that this Court should treat ChromaDex and Healthspan as a single entity because they share common management is contrary to bedrock law that corporate separateness must be respected. Delaware courts do not pierce the corporate veil so easily.

That is an argument from desperation. It misstates ChromaDex's argument and thunders about inapplicable law that is not in question.

There is another funny moment in footnote 6 when Elysium says, "Plaintiffs also conveniently ignore that Dartmouth’s consent 'shall not be unreasonably withheld.'” The funny suggestion here is that Dartmouth might have a legal duty to license to Elysium upon request, and could not have refused to do so. LOL.

Elysium's primary point worth considering, though, is whether the legal standard for an exclusive license turns on a factual question of whether the exclusive licensees would have been willing to license to Elysium, or whether it only matters that, as a matter of law, they could have chosen to do so.

The legal/factual distinction here seems to me an unsettled point of law, and may be a thing about which future jurists ponder.

It shouldn't matter in our case, though, because in our case each affiliate has the legal right to exclude Elysium, and that should end the inquiry. I think that ChromaDex's arguments about the empirical unlikelihood of it ever happening were in the nature of back-up arguments-in-the-alternative -- EVEN IF Elysium's empirical ability to get a license were the legal standard, Elysium would still lose.

To defeat ChromaDex's back-up argument about subjective intent, Elysium goes far afield in search of authority, now pulling in a case from Virginia and then another from Alabama to find instances in which standing was denied for some reason in cases involving multiple exclusive licenses to affiliates. The law in those places isn't authoritative in Delaware, and the federal judges I know don't care much about what some judge in another circuit said. The fact that Elysium can't find enough authority for their argument in the 3rd Circuit -- which is a hotbed of patent litigation -- is telling enough.

One point to which Elysium apparently has no reply at all is an issue that ChromaDex brought to the court's attention last week in an email exchange replicated in Exhibit G attached to ChromaDex's response brief.

In the email chain, ChromaDex's attorney said to Elysium's attorney, "We cannot evaluate your proposal regarding deadlines and word limits without understanding the specific bases for Elysium's motion."

Elysium responded,

"Our motion is straightforward. 'Exclusive' means only one. Dartmouth has at least two licensees, and neither can claim to be Dartmouth's 'exclusive' licensee.' Consequently, neither has standing to sue for patent infringement." (emphasis added)

Now compare Elysium's statement of the law to the CAFC's statement of the law in WiAV, interpreting the primary case Elysium relied on, Mars.

The CAFC said that neither the case that Elysium relied (Mars), nor another case, "supports the proposition...that for a licensee to be an exclusive licensee of a patent the licensee must be the only party with the ability to license the patent. Indeed, this court has recently held otherwise."

In other words, Elysium says that "Exclusive means only one," and the CAFC, which has the final say on this issue except for the SCOTUS, says exclusive does NOT mean 'only one.'

The gap between what the law is and what Elysium wishes it were could not be more clear.

And I can't find anything in Elysium's reply brief that is responsive to this point, except, arguably, a weak moment in footnote 2 in which Elysium reminds everyone that WiAV had no authority to overrule Mars. I think Elysium is trying to say that the WiAV court's statement that there can be multiple exclusive licensees can't be a correct statement of the law, because it disagrees with what Elysium wishes Mars had said. However, courts explain their prior reasoning all the time, and WiAV was very specific in harmonizing the two cases, so this is a very lame argument that Elysium can't quite state outright.

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