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Arizona Board of Regents v. Seattle Genetics, Inc.

United States District Court, D. Arizona

August 4, 2015

Arizona Board of Regents, for and on behalf of Arizona State University, Plaintiff,
v.
Seattle Genetics, Inc., Defendant.

ORDER

NEIL V. WAKE, District Judge.

Before the Court are Defendant Seattle Genetics, Inc.'s Motion for Summary Judgment (Docs. 256 (redacted), 310 (sealed)) and ASU's Motion for Partial Summary Judgment (Docs. 293 (redacted), 299 (sealed)). Each motion is supported by a separate statement of facts filed under seal and filed in a redacted version. Each party has filed an opposition to the opposing party's motion in sealed and redacted versions, a controverting statement of facts in sealed and redacted versions, and a reply in sealed and redacted versions. Oral argument on these motions was heard on June 30, 2015.

On motions for summary judgment, the movant must file a separate statement of facts, and any party opposing the motion must file a separate controverting statement of facts, which may include additional facts that establish a genuine issue of material fact or otherwise preclude judgment in favor of the moving party. LRCiv 56.1(a), (b). The movant is not permitted to file a separate statement responding to the non-movant's controverting statement of facts or the additional facts, but may include any evidentiary objections in the reply memorandum. LRCiv 7.2(m)(2). SeaGen's Response to ASU's Supplemental Statement of Facts (Docs. 398 (redacted) and 416 (sealed)) is therefore not authorized by the Local Rules and will be stricken.

I. SUMMARY

Plaintiff alleges that Defendant infringed Plaintiff's patent by making and selling a product using an anticancer drug similar to anticancer drugs covered by Plaintiff's patent. Defendant alleges that the anticancer drug in its product is not covered by Plaintiff's patent, but even if it were, Defendant is not liable for infringement because Plaintiff agreed in writing that Defendant will not pay Plaintiff any royalties for using Defendant's anticancer drug.

Undisputed evidence shows that when Plaintiff executed the agreement it knew Defendant believed its anticancer drug did not infringe Plaintiff's patent and Defendant intended to develop products using its anticancer drug instead of Plaintiff's anticancer drugs that Defendant was licensed to use. Further, it shows Defendant paid Plaintiff a substantial amount of money in exchange for Plaintiff's agreement that Defendant would not pay Plaintiff any royalties related to Defendant's anticancer drug, and Plaintiff understood that it would not receive any royalties related to Defendant's anticancer drug. Thus, Defendant is not required to compensate Plaintiff for making and selling products using Defendant's anticancer drug and cannot be held liable for patent infringement damages.

II. LEGAL STANDARD

Summary judgment is proper if the evidence shows there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(a). The party seeking summary judgment bears the initial burden of identifying the basis for its motion and those portions of the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, which demonstrate the absence of any genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). When the moving party has carried its burden, the nonmoving party must produce evidence to support its claim or defense by more than simply showing "there is some metaphysical doubt as to the material facts." Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986).

On summary judgment, the nonmoving party's evidence is presumed true, and all inferences from the evidence are drawn in the light most favorable to the nonmoving party. Eisenberg v. Ins. Co. of North America, 815 F.2d 1285, 1289 (9th Cir. 1987); Baldwin v. Trailer Inns, Inc., 266 F.3d 1104, 1117 (9th Cir. 2001). But conclusory and speculative testimony in affidavits and moving papers is insufficient to raise genuine issues of fact and to defeat summary judgment. Thornhill Publ'g Co., Inc. v. GTE Corp., 594 F.2d 730, 738 (9th Cir. 1979). "If a party fails to properly support an assertion of fact or fails to properly address another party's assertion of fact as required by Rule 56(c), the court may... consider the fact undisputed for purposes of the motion." Fed. R. Civ. 56(e)(2).

III. UNDISPUTED MATERIAL FACTS

On June 3, 1997, the United States Patent and Trademark Office granted U.S. Patent No. 5, 635, 483 ("Patent") to Profs. George R. Pettit and Joszef Barkoczy. Arizona State University ("ASU") is the assignee of the Patent. The Patent expired in 2014.

On February 3, 2000, Seattle Genetics, Inc. ("SeaGen") entered into License Agreement No. 651-01.LIC ("License") with the Arizona Board of Regents acting on behalf of ASU. The License provided that it embodied the entire understanding of the parties and no amendment or modification would be binding on the parties unless made in writing and signed by each party.

A. Original Terms of the License

The License included the following definitions:

1.2. "ASU's PATENT RIGHTS" shall mean patent rights to certain subject matter, which is included in the following:
Under ASU Case No. 651:
U.S. Patent No. 5, 635, 483 entitled "Tumor Inhibiting Tetrapeptide Bearing Modified Phenethyl Amides."
For the purposes of this Agreement, only those compounds taught in the above named patent and identified as stereoisomers of a compound commonly referred to as "Auristatin E" are included in this license and the grant of rights described in Article 2 of this Agreement shall pertain only to the following:
Auristatin E. Compound No. 1S2R
Auristatin E. Compound No. 1R2R
Auristatin E. Compound No. 1S2S
Auristatin E. Compound No. 1R2S
Each of which falls within the general structure shown below:
[diagram]
and any corresponding extensions or foreign ...

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