-JLT General Electric Company, et al. v. Wilkins, No. 1:2010cv00674 - Document 161 (E.D. Cal. 2011)
Court Description: MEMORANDUM DECISION AND ORDER GRANTING 125 Motion to Intervene, signed by Judge Oliver W. Wanger on 2/11/2011. (Mitsubishis motion to intervene is GRANTED, subject to its submission of a jurisdictional statement) (Gaumnitz, R)
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-JLT General Electric Company, et al. v. Wilkins Doc. 161 1 2 3 4 UNITED STATES DISTRICT COURT 5 EASTERN DISTRICT OF CALIFORNIA 6 7 8 GENERAL ELECTRIC COMPANY, 9 Plaintiff, 10 1:10-cv-00674–OWW-JLT MEMORANDUM DECISION AND ORDER GRANTING MOTION TO INTERVENE (Doc. 125) v. 11 12 THOMAS WILKINS, Defendant. 13 I. INTRODUCTION. 14 15 Plaintiff General Electric Company(“Plaintiff”) brings this 16 action against Defendant Thomas Wilkins (“Defendant”) for damages 17 and 18 Plaintiff is a developer of energy technologies and the holder of 19 U.S. Patent Nos. 6,921,985 (“‘985 Patent”) and 6,924,565, (“the’565 20 patent”). 21 ‘565 patent and asserts that he is an unnamed co-inventor of the 22 ‘985 patent. 23 patents and has licensed his interest in the technology underlying 24 the 25 Mitsubishi 26 “Mitsubishi”). 27 28 injunctive ‘985 relief. According to Plaintiff’s complaint, Defendant is listed as one of seven inventors of the Defendant asserts an ownership interest in both patent Power to Mitsubishi Systems Heavy Americas, Industries, Inc. Ltd., and (collectively Mitsubishi filed a motion to intervene pursuant to Federal Rule of Civil Procedure 24 on December 22, 2010. (Doc. 125). 1 Dockets.Justia.com 1 Plaintiff filed opposition to the motion to intervene on January 2 10, 2011. 3 2011. 4 intervene. (Doc. 142). (Doc. 155). Defendant has not opposed the motion to II. LEGAL STANDARD. 5 6 Mitsubishi filed a reply on January 17, Intervention is governed by Federal Rule of Civil Procedure 7 24. To intervene as a matter of right under Rule 24(a)(2), an 8 applicant must claim an interest, the protection of which may, as 9 a practical matter, be impaired or impeded if the lawsuit proceeds 10 without the applicant. 11 States Forest Serv., 66 F.3d 1489, 1493 (9th Cir. 1993). 12 Circuit applies Rule 24(a) liberally, in favor of intervention, and 13 requires a district court to "take all well-pleaded, non-conclusory 14 allegations in the motion as true absent sham, frivolity or other 15 objections." Southwest Ctr. for Biological Diversity v. Berg, 268 16 F.3d 810, 820 (9th Cir. 2001). A four part test is used to evaluate 17 a motion for intervention of right: 18 (1) the motion must be timely; 19 (2) the applicant must claim a "significantly protectable" interest relating to the property or transaction which is the subject of the action; 20 21 22 Forest Conservation Council v. United The Ninth (3) the applicant must be so situated that the disposition of the action may as a practical matter impair or impede its ability to protect that interest; and 23 24 (4) the applicant's interest must represented by the parties to the action. be inadequately 25 26 27 28 Forest Conservation Council, 66 F.3d at 1493. Permissive intervention is governed by Rule 24(b). An applicant who seeks permissive intervention must demonstrate that 2 1 it meets three threshold requirements: (1) it shares a common 2 question of law or fact with the main action; (2) its motion is 3 timely; and (3) the court has an independent basis for jurisdiction 4 over the applicant's claims. E.g. Donnelly v. Glickman, 159 F.3d 5 405, 412 (9th Cir. 1998). III. DISCUSSION. 6 7 A. Intervention as of Right 8 1. Timeliness 9 In assessing timeliness, courts in the Ninth Circuit consider: 10 (1) the current stage of the proceedings; (2) whether the existing 11 parties would be prejudiced; and (3) the reason for any delay in 12 moving to intervene. 13 Wilson, 131 F.3d 1297, 1302 (9th Cir. 1997). League of United Latin Am. Citizens v. 14 This litigation is at an early stage. Plaintiff’s first 15 amended complaint was filed in October, 2010. No answer has been 16 filed, discovery has not yet been completed, and a trial date is 17 not yet set. 18 of finding Mitsubishi’s motion timely. 19 established that it will be prejudiced by intervention given the 20 current stage of the proceedings. The current stage of the proceedings weighs in favor Further, Plaintiff has not 21 Plaintiff contends that it will be prejudiced if intervention 22 is granted because Mitsubishi “will fundamentally expand the issues 23 in this case” and that resisting Mitsubishi’s efforts to expand the 24 issues will itself be expensive and time-consuming. 25 Opposition 26 Mitsubishi has assured the court that it will not seek rulings on 27 the issues Plaintiff’s opposition alludes to--the validity or 28 enforceability of the ‘985 patent, the value of the ‘985 patent, or at 9-10). Plaintiff’s 3 fears are (Doc. 142, misplaced, as 1 the validity of its license with Defendant. 2 n.3). 3 issues Mitsubishi can raise as an intervenor, Plaintiff’s fears are 4 easily allayed. 5 Concepts, 6 2004)(citing 7 proposition that "[a]n intervention of right under the amended rule 8 may be subject to appropriate conditions or restrictions responsive 9 among other things to the requirements of efficient conduct of the 10 (Doc. 155, Reply at 6 As Rule 24 empowers the court to limit the scope of the See, e.g., John's Lone Star Distrib. v. Juice Bar Inc., 2004 Advisory U.S. Dist. Committee’s LEXIS 5062 notes to *7-8 Rule (N.D. 24 for Tex. the proceedings."). 11 Finally, Mitsubishi has provided adequate justification for 12 its delay in filing its motion to intervene, which was minimal. 13 Mitsubishi avers that it was not aware of the magnitude of the risk 14 to its interests until it learned of the court’s tentative ruling 15 granting 16 evaluated the conduct of Defendant and his former counsel as set 17 forth in Plaintiff’s motion for sanctions. 18 4). Plaintiff’s request for preliminary injunction and (Doc. 155, Reply at 3- Mitsubishi’s motion is timely under Rule 24. 19 2. Significant Protectable Interests 20 To demonstrate a "significantly protectable interest," "a 21 prospective 22 asserted 23 relationship between the legally protected interest and the claims 24 at issue." Northwest Forest Res. Council v. Glickman, 82 F.3d 825, 25 837 (9th Cir. 1996). 26 has 27 operative inquiry is whether the interest is protectable under some 28 law. is intervenor must protectable demonstrated a establish under some that law, and (1) the (2) interest there is a To determine whether a putative intervenor "significantly protectable" interest, the Wilderness Soc'y v. United States Forest Serv., 2011 U.S. 4 1 App. LEXIS 734 * 14 (9th Cir. 2011). 2 According to Mitsubishi's motion to intervene, "Wilkins is now 3 licensing his rights in the ‘985 patent technology to Mitsubishi," 4 (Doc. 126, MTI at 8), which allegedly entitles Mitsubishi "to use 5 or sell any product with the technology of the '985 patent." 6 155, Reply at 8). 7 license in the technology underlying the ‘985 Patent, and it is 8 clear that such a license is protectable under the law.1 9 e.g., Amgen, Inc. v. F. Hoffman-Laroche Ltd, 456 F. Supp. 2d 267, 10 280 n.11 (D. Mass. 2006) (license in technology sufficient to 11 support intervention as of right in patent infringement action).2 (Doc. Mitsubishi has properly alleged that it has a See, 12 Mitsubishi’s rights in the subject technology are derivative 13 of Defendant’s rights in the technology, and Plaintiff seeks a 14 declaration from this court that Defendant has no such rights or 15 the rights are void. 16 sufficient relationship to this litigation to warrant intervention. Mitsubishi’s protectable interest bears a 17 3. Impairment 18 For the purposes of Rule 24, impairment need not be based on 19 technical legal impairment; rather, Rule 24 intervention is 20 appropriate if a party's rights would be impaired in a "practical 21 22 23 24 25 26 27 28 1 Mitsubishi cites this court's order in Delano Farms Co. v. Cal. Table Grape Comm'n, 2010 U.S. Dist. LEXIS 74602 (E.D. Cal. 2010) as support for its proposition that it has a significant interest protectable interest by virtue of the fact that it is a licensee of technology underlying the ‘985 patent. Delano Farms is distinguishable. In Delano Farms, a party expressly challenged the validity of a license held by the proposed intervenor. Here, the validity of the purported license Defendant granted to Mitsubishi is not directly at issue. Nevertheless, there is undoubtably a relationship between Mitsubishi's license and the claims raised in Plaintiff’s complaint. 2 The intervenor in Amgen was an “exclusive licensee with substantial rights,” a term of art in patent jurisprudence. See id. As the instant action does not entail a patent infringement claim, the standing requirements applicable to infringement actions discussed in Amgen are not implicated here. 5 1 sense." Fed. R. Civ. P. 24. 2 practical sense, an adjudication that Plaintiff is the sole owner 3 of 4 Mitsubishi's rights under its license from Defendant. 5 6 the technology It cannot be questioned that, in a underlying the ‘985 Patent would destroy 4. Adequacy of Representation In determining whether an applicant's interest is adequately 7 represented by the existing parties, courts consider (1) whether the 8 interest of a present party is such that it will undoubtedly make 9 all the intervenor's arguments; (2) whether the present party is 10 capable and willing to make such arguments; and (3) whether the 11 would-be intervenor would offer any necessary elements to the 12 proceedings that other parties would neglect. E.g. Northwest Forest 13 Res. Council, 82 F.3d at 838. Generally, an applicants showing of 14 inadequate representation is minimal, e.g. Sagebrush Rebellion, Inc. 15 v. Watt, 713 F.2d 525, 528 (9th Cir. 1983), however, “[w]hen an 16 applicant for intervention and an existing party have the same 17 ultimate objective, a presumption of adequacy of representation 18 arises," e.g. Arakaki v. Cayetano, 324 F.3d 1078, 1086 (9th Cir. 19 2003). The presumption of adequate representation may be overcome 20 with a “compelling showing.” 21 Mitsubishi's interest Id. in its license is derivative of 22 Defendant's interest in the technology underlying the ‘985 patent. 23 Defendant and Mitsubishi generally have the same objective: 24 establishing Defendant's ownership of the technology underlying the 25 ‘985 patent and defeating Plaintiff's claim that Defendant is 26 obligated to assign his rights in such technology to GE. Howe e , vr 27 Mitsubishi’s interests and objectives differ in some degree from 28 Defendant’s. 6 1 It cannot be said that Defendant will undoubtably make all of 2 the arguments Mitsubishi would in this case, nor can it be said that 3 Defendant is willing and able to make such arguments. 4 Defendant chose not to offer any testimony in For example, opposition to 5 Plaintiff’s motion for preliminary injunction and chose not to 6 depose witnesses who may have offered relevant testimony on the 7 issues entailed in Plaintiff’s motion. As a result of Plaintiff’s 8 un-refuted evidence, Plaintiff’s motion for preliminary injunction 9 was granted. The court has not yet entered a formal order imposing 10 the preliminary injunction, however, because the injunction may 11 impede Mitsubishi’s rights under its license. The court has given 12 Mitsubishi an opportunity to provide input on the appropriate scope 13 of the injunctive relief Plaintiff is entitled to, and the need to 14 provide Mitsubishi with this opportunity before formally imposing 15 a preliminary injunction demonstrates the extent to which Defendant 16 is not an adequate representative of Mitsubishi’s interest. 17 Further, Defendant previously entered into a stipulation which 18 contained language that was potentially prejudicial to Mitsubishi’s 19 interest in its license. 20 (See Doc. 38, Stipulation at 4).3 Even assuming arguendo that Defendant’s interest are identical 21 to Mitsubishi’s, the record is sufficient for Mitsubishi to overcome 22 23 24 25 26 27 28 3 The Stipulation provides, inter alia, that Plaintiff would refrain from “engaging in conduct that would convey or tend to convey to third parties that Wilkins is licensing...any ownership interest...in the ‘985 Patent[].” (Doc. 38, Stipulation at 4). Although the license agreement between Defendant and Mitsubishi is not before the court, it is conceivable that either Defendant’s or Mitsubishi’s exercise of their respective rights under the license agreement could constitute conduct that would convey or tend to convey to third parties that Defendant is licensing and interest in the ‘985 Patent. Further, the Stipulation imposes express limitations on Defendant’s ability to modify or extend Mitsubishi’s license. Were Mitsubishi a part to this litigation at the time the Stipulation was crafted, it is likely that the Stipulation would have been narrower in scope and would have more carefully accounted for Mitsubishi’s interests. 7 1 the presumption of adequate representation. 2 stage of the litigation, Defendant has Even at this early engaged in allegedly 3 sanctionable conduct and has demonstrated a potential willingness 4 to disobey the court’s orders. Nonfeasance or malfeasance is a 5 basis for overcoming the presumption of adequate representation. 6 See League of United Latin Am. Citizens, 131 F.3d at 1305 n. 4 7 (citing Moosehead San. Dist. v. S.G. Phillips Corp., 610 F.2d 49, 8 54 (1st Cir. 1979) discussing basis for overcoming presumption)). 9 Although differences in litigation strategy are generally 10 insufficient to overcome the presumption of adequate representation, 11 a party with significant protectable interests should not be placed 12 at the risk of a party whose litigation tactics and conduct have the 13 potential to affect the progress of the case.4 14 has already prevented the court from Defendant’s conduct reaching the merits of 15 purported factual disputes between the parties in the context of 16 Plaintiff’s motion for preliminary injunction. Defendant engaged 17 in conduct at his deposition that impeded that proceeding, evidenced 18 by the dispute over his response to the oath. As a result, 19 Defendant would have been subject to an evidentiary sanction had he 20 attempted to timely submit testimony in opposition to Plaintiff’s 21 motion for preliminary injunction.5 22 counsel’s representation in open Similarly, despite Defendant’s court that Defendant would 23 24 25 26 27 28 4 The fact that the attorney responsible for Defendant’s representation throughout 2010 has since left the case does not render Defendant an adequate representative. Ultimately, Defendant is the master of his case, and his counsel is duty-bound to comply with Defendant’s instructions. 5 Defendant made the high-risk strategic decision not to present testimony in opposition to Plaintiff’s motion for preliminary injunction. Instead, Defendant waited until approximately six weeks after the hearing on Plaintiff’s motion to submit a declaration that had already been ruled inadmissible. (See Doc. 158). 8 1 stipulate to “lifting the seal” of his testimony in another related 2 proceeding before the United States International Trade Commission, 3 (Doc. 89, Oct. 18, 2010 RT at 35-36), Defendant subsequently refused 4 such a stipulation, (Doc. 100, Eldredge Dec., Ex. X). 5 the totality of the circumstances, Mitsubishi In light of has presented 6 sufficient factual basis for its assertion that Defendant is not an 7 adequate representative of its rights. 8 B. Permissive Intervention 9 Mitsubishi alternatively contends it is entitled to permissive 10 intervention under Federal Rule of Civil Procedure 24(b). An 11 applicant that seeks permissive intervention must satisfy three 12 threshold requirements: (1) it shares a common question of law or 13 fact with the main action; (2) its motion is timely; and (3) the 14 court has an independent basis for jurisdiction over the applicant's 15 claims. Donnelly, 159 F.3d at 412. 16 Mitsubishi invokes diversity jurisdiction as an independent 17 basis for federal jurisdiction over its claims. 18 to Intervene at 13). (Doc. 126, Motion Mitsubishi does not allege diversity exists 19 as to Mitsubishi Power Systems Americas, Inc., based on its place 20 of incorporation, principal place of business, or nerve center. 21 This can be added by a jurisdictional statement. ORDER 22 23 For the reasons stated, Mitsubishi’s motion to intervene is 24 GRANTED, subject to its submission of a jurisdictional statement. 25 IT IS SO ORDERED. 26 Dated: hkh80h 27 February 11, 2011 /s/ Oliver W. Wanger UNITED STATES DISTRICT JUDGE 28 9
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