Judge Robinson Denies Motion to Transfer And To Strike Preliminary Injunction Motion

March 17, 2016

Publication| Intellectual Property

In Hologic, Inc. and Cytyc Surgical Products, LLC v. Minerva Surgical, Inc., C.A. No. 15-1031-SLR (D. Del. Feb. 29, 2016), Judge Robinson denied the defendant’s motion to transfer venue and to strike Hologic, Inc.’s (“Hologic”) motion for preliminary injunction.

First, the Court rejected Minerva Surgical, Inc.’s (“Minerva”) motion to transfer venue to the Northern District of California, despite the fact that the defendant “maintains its headquarters and sole place of business” in that jurisdiction and had not yet had any sales in Delaware. Judge Robinson emphasized that Minerva’s decision to incorporate in Delaware serves as recognition that the state is “an appropriate jurisdiction for resolution of commercial disputes through litigation,” and absent some showing of a “unique or unexpected burden,” a company accepting the benefits of incorporation under the laws of the State of Delaware should not be successful in arguing that litigation in Delaware is “inconvenient.” In terms of convenience, the Court declined to elevate the convenience of one party over the other where the first-filed case between Delaware corporations did not implicate the state laws of another jurisdiction.

Second, Judge Robinson denied Minerva’s motion to strike Hologic’s motion for preliminary injunction. Minerva argued that Hologic lacked standing to bring the motion because, at the time of filing the complaint, the patents-in-suit were owned by Cytyc Surgical Products, LLC (“Cytyc”), a wholly-owned subsidiary of Hologic. Minerva argued that “because Cytyc is a patent holding company and non-operating entity, Cytyc ‘alone could not have prevailed (and likely would never even have brought) a motion for preliminary relief on its own.’” Despite the established principle that “the mere fact that a corporation’s subsidiary owns a patent is insufficient to establish that the corporation has equitable title to the patent,” Judge Robinson noted that “the issue of standing is rooted in the facts of each case” and the record clearly indicated that Hologic exercised “complete control” over Cytyc’s patent licensing and enforcement policies. Judge Robinson stated that this control extended to the patents-in-suit, and thus Hologic had equitable standing to pursue the preliminary injunction.

Analysis: A defendant’s incorporation in Delaware weighs as a strong factor against transfer of venue. Equitable standing is a fact-based inquiry in which control over a subsidiary’s patent licensing and enforcement policies can demonstrate control over the subsidiary’s patents.

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