ceramdeic

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF DELAWARE

CERAMEDIC LLC,

Plaintiff,

v.

DEPUY ORTHOPAEDICS, INC. and

CERAMTEC GMBH,

Defendants.

C.A. No. 15-703-GMS

CERAMEDIC LLC’S OPPOSITION TO DEFENDANTS’

EMERGENCY MOTION TO STAY

Brian E. Farnan (Bar No. 4089)

FARNAN LLP

919 North Market Street

12th Floor

Wilmington, DE 19801

(302) 777-0300 (Telephone)

(302) 777-0301 (Facsimile)

[email protected]

Richard M. Cowell (admitted pro hac vice)

Kevin K. McNish (admitted pro hac vice)

DESMARAIS LLP

230 Park Avenue

New York, NY 10169

(212) 351-3400 (Telephone)

(212) 351-3401 (Facsimile)

[email protected]

[email protected]

Counsel for Plaintiff CeraMedic LLC

Date: October 6, 2015

Case 1:15-cv-00703-GMS Document 40 Filed 10/21/15 of 21 PageID #: 1336

Tracie

Typewritten Text

Tracie

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PUBLIC VERSION

i

TABLE OF CONTENTS

Page

I. INTRODUCTION .............................................................................................................. 1

II. FACTUAL AND PROCEDURAL BACKGROUND........................................................ 1

A. Background Of The Standstill Agreement .............................................................. 1

B. After CeraMedic Files Suit In The Delaware Court Of Chancery,

Defendants Remove To Federal Court Instead Of Responding To

CeraMedic’s Motion To Expedite. ......................................................................... 3

C. After Defendants Admit Breaching The Standstill Agreement, The Court

Enjoins Defendants’ Breach. .................................................................................. 4

III. SUMMARY OF ARGUMENT .......................................................................................... 5

IV. ARGUMENT ...................................................................................................................... 6

A. Defendants Lack A Strong Likelihood Of Success On The Merits. ................................... 6

1. None of Defendants’ Purported Procedural Defects Establish A

Strong Likelihood of Success On Appeal. .................................................. 6

a. The Court’s Order Was Proper As A Grant Of Summary

Judgment In Favor Of CeraMedic Under Fed. R. Civ. P.

56(f)(3). ........................................................................................... 6

b. Defendants Never Identified What Discovery Or Evidence

They Might Purportedly Need. ....................................................... 8

c. No Trial Is Required. ...................................................................... 8

d. CeramTec’s Service Defense Lacks Merit. .................................... 9

e. The Injunction Satisfies Fed. R. Civ. P. 65(d)(1)(A). ................... 10

2. DePuy’s Purported Inability To Control The Third And Fourth

Petitions Does Not Affect CeramTec’s Ability To Withdraw Those

Petitions As To The Charted Claims. ....................................................... 11

3. Defendants’ Consideration and Policy Defenses Lack Merit. .................. 11

B. Defendants Have Not Proven Irreparable Harm Without A Stay. ........................ 12

C. A Stay Will Harm CeraMedic. .............................................................................. 13


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D. No Public Interest Supports A Stay. ..................................................................... 14

V. CONCLUSION ................................................................................................................. 15


iii

TABLE OF AUTHORITIES

Page(s)

Cases

Anderson v. Davila, 125 F.3d 148 (3d Cir. 1997)........................................................................... 7

Blackberry Corp. v. MobileMedia Ideas LLC, Case IPR2013-00016, Paper 31 (PTAB

Dec. 11, 2013) ................................................................................................................... 13

Bradley v. Pittsburgh Bd. of Educ., 913 F.2d 1064 (3d Cir. 1990) ................................................ 6

Catanzaro v. Masco Corp., 423 F. Supp. 415 (D. Del. 1976), aff’d per curiam, 575 F.2d

1085 (3d Cir. 1978), cert. denied, 439 U.S. 989 (1978) ..................................................... 9

Hilton v. Braunskill, 481 U.S. 770 (1987) ...................................................................................... 6

Holman v. Warwick Furnace Co., 456 S.E.2d 894 (S.C. 1995) ................................................... 10

IGT v. Aristocrat Techs., Case No. 2:15-cv-00473-GMN-GWF (D.I. 70) (D. Nev. Sept.

18, 2015) ........................................................................................................................... 14

Ringling Bros.—Barnum & Bailey Combined Shows, Inc. v. Ringling, 53 A.2d 441 (Del.

1947) ................................................................................................................................. 11

Singer Co. v. P.R. Mallory & Co., 671 F.2d 232 (7th

Cir. 1982) .................................................. 15

Smith v. Borough of Dunmore, 516 Fed. App’x. 194 (3d Cir. 2013) (unpublished opinion) ......... 7

United States v. Cianfrani, 573 F.3d 835 (3d Cir. 1978) ................................................................ 6

Wells v. Rockefeller, 728 F.2d 209 (3d Cir. 1984) .......................................................................... 8

Statutes

10 Del. Code § 3104(d)(2) .............................................................................................................. 9

35 U.S.C. § 316(a)(11) .................................................................................................................. 13

S.C. Code § 15-9-245...................................................................................................................... 9

Rules

Fed. R. Civ. P. 4(e)(1) ..................................................................................................................... 9

Fed. R. Civ. P. 4(h)(1)(A) ............................................................................................................... 9

Fed. R. Civ. P. 56(d) ....................................................................................................................... 8

Fed. R. Civ. P. 56(f)(3) ............................................................................................................... 7, 8


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Fed. R. Civ. P. 65(d)(1)(A) ........................................................................................................... 10

S.C. R. Civ. P. 4(d)(3) ..................................................................................................................... 9

Treatises

10A WRIGHT & MILLER FED. PRAC. & PROC. § 2716 ..................................................................... 8


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I. INTRODUCTION

Plaintiff CeraMedic LLC (“CeraMedic”) respectfully requests that the Court deny

Defendants CeramTec GmbH (“CeramTec”) and DePuy Orthopaedics, Inc. (“DePuy”)

(collectively, “Defendants”)’s motion to stay the permanent injunction the Court entered

following a teleconference with the parties. (D.I. 28.)

As the parties explained, and the Court recognized, CeramTec breached and caused

DePuy to breach their Standstill Agreement with CeraMedic by filing two petitions for inter

partes review against certain claims of CeraMedic’s patent with the Patent Trial and Appeal

Board (“PTAB”). Under the Standstill Agreement, that breach entitled CeraMedic to injunctive

relief requiring Defendants to terminate the breaching petitions as to those claims. Defendants

have delayed the vindication of CeraMedic’s contractual rights at every turn: removing from the

Delaware Court of Chancery to the District of Delaware, moving to stay here, and even moving

the Third Circuit for a stay before the Court could even consider the instant motion. By delaying

this case, Defendants seek to frustrate the Court’s Order and improve their odds of winning a

favorable PTAB decision on the breaching petitions before the final resolution of this case.

The Court should not let Defendants “run out the clock” on CeraMedic’s claim for relief

and, accordingly, should deny Defendants’ motion.

II. FACTUAL AND PROCEDURAL BACKGROUND

A. Background Of The Standstill Agreement

On May 1, 2014, CeraMedic and DePuy entered into an agreement to facilitate patent

licensing discussions regarding one of CeraMedic’s patents, U.S. Patent No. 6,066,584 (“the


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’584 Patent”). (Cowell Decl. Ex. A (“the Standstill Agreement”).)1 The Standstill Agreement,

which spans just over three pages,

In particular, Standstill Agreement § 4 provides as follows:

On June 27, 2014, CeramTec

agreed to be bound by the Standstill Agreement,

in a separate, one-page letter agreement with CeraMedic. (Cowell Decl.

1 Citations to “Cowell Decl.” refer to the Declaration of Richard M. Cowell, filed

contemporaneously herewith.


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Ex. B (“the Letter Agreement”).) On December 12, 2014, CeramTec, on DePuy’s behalf, filed

with the PTAB two petitions for inter partes review of the Charted Claims (“the First Petition”

and “the Second Petition”):2 one covering Claims 7 and 11, and the other covering Claims 14

and 26.

On

June 8, 2015, CeramTec, on its own and on DePuy’s behalf, filed another petition for inter partes

review of all of the Charted Claims (“the Third Petition”). On June 30, 2015, CeramTec, again

on its own and DePuy’s behalf, filed yet another petition for inter partes review of Charted

Claims 14 and 26 (“the Fourth Petition”). Only the Third and Fourth Petitions’ challenges to the

Charted Claims are subject to the Court’s injunction. (D.I. 28.)

None of the above facts are in dispute; indeed, Defendants have explicitly acknowledged

that: i) DePuy signed the Standstill Agreement, and CeramTec signed the Letter Agreement as

described above; ii)

and iii) that CeramTec filed the Third and Fourth Petitions

after May 5, 2015. (Sept. 23, 2015 Hrg. Tr. at 11:14-16; D.I. 12 at ¶¶ 13-38.)

B. After CeraMedic Files Suit In The Delaware Court Of Chancery, Defendants

Remove To Federal Court Instead Of Responding To CeraMedic’s Motion

To Expedite.

With its Chancery Complaint, CeraMedic filed a motion for expedited proceedings in the

Delaware Court of Chancery. (Cowell Decl. Ex. C.) Defendants agreed to respond to

CeraMedic’s motion to expedite on August 14, 2015. However, instead of responding, on

August 13, 2015, Defendants removed to the Court. (D.I. 1 at 1.) The Court correctly

2 The First and Second Petitions are not the subject of this litigation, nor are they subject to the

injunction.


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recognized Defendants’ attempt to exploit its heavy docket to create delay. (Sept. 23, 2015 Hrg.

Tr. at 11:25-12:10.)

C. After Defendants Admit Breaching The Standstill Agreement, The Court

Enjoins Defendants’ Breach.

After removal, local and national counsel appeared for both Defendants in the District of

Delaware. (D.I. 14, D.I. 22.) On September 21, 2015, the Court ordered a status teleconference

for all parties to take place on September 23, 2015. (Id.) At the teleconference, attorneys for

both Defendants appeared and made clear they appeared on behalf of both CeramTec and

DePuy. (Sept. 23, 2015 Hrg. Tr. at 1:8-13.) And Defendants’ counsel admitted that Defendants

breached the Standstill Agreement by filing the Third and Fourth Petitions against the Charted

Claims:

(Sept. 23, 2015 Hrg. Tr. at 11:8-18 (emphasis added).)


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III. SUMMARY OF ARGUMENT

The immediate stay pending appeal that Defendants seek is an extraordinary remedy to

which Defendants are not entitled.

First, Defendants do not have a strong likelihood of success on the merits. Defendants

admitted breaching the Standstill Agreement during the teleconference with the Court. The

Court’s subsequent entry of judgment and a permanent injunction comported with the Federal

Rules of Civil Procedure and due process.

Second, Defendants have not and cannot establish irreparable harm. Defendants

themselves have argued that they will invalidate the Charted Claims via the First and Second

Petitions, which would render harmless to Defendants any injunction against the Third and

Fourth Petitions as to the Charted Claims.

Third, CeraMedic will suffer irreparable harm if a stay is entered. CeraMedic has already

suffered the prejudice of having to answer one of the breaching petitions. Further delay

increases the likelihood that CeraMedic will be completely deprived of its rights under the

Standstill Agreement.

Fourth, no valid public interest supports entering a stay. One of Defendants’ purported

“public” interests amounts to nothing more than Defendants’ private interests in avoiding

compliance with a validly-issued injunction. The other public interest that Defendants raise is

the public’s purported interest in having the Charted Claims’ validity adjudicated by the

PTAB—which the PTAB is already doing at Defendants’ request in the First and Second

Petitions.


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IV. ARGUMENT

A stay pending an appeal is an “extraordinary remedy” in the Third Circuit. United

States v. Cianfrani, 573 F.3d 835, 846 (3d Cir. 1978). A movant seeking a stay carries the

burden of establishing its entitlement to a stay based on four factors: “(1) whether the stay

applicant has made a strong showing that he is likely to succeed on the merits; (2) whether the

applicant will be irreparably injured absent a stay; (3) whether issuance of the stay will

substantially injure the other parties interested in the proceeding; and (4) where the public

interest lies.” Hilton v. Braunskill, 481 U.S. 770, 776 (1987).

A. Defendants Lack A Strong Likelihood Of Success On The Merits.

First and foremost, Defendants admitted during the teleconference that they breached the

Standstill Agreement. (Sept. 23, 2015 Hrg. Tr. at 11:8-18, 16:15-18.) That admission alone

precludes Defendants from establishing that they have a strong likelihood of prevailing on the

merits. Defendants’ procedural arguments are also unavailing. The Court’s Order lacks any

procedural defects that warrant reversal, much less establish Defendants’ purported strong

likelihood of success.

1. None of Defendants’ Purported Procedural Defects Establish A

Strong Likelihood of Success On Appeal.

a. The Court’s Order Was Proper As A Grant Of Summary

Judgment In Favor Of CeraMedic Under Fed. R. Civ. P.

56(f)(3).

Defendants argue that the Court’s injunction was purportedly procedurally defective

because CeraMedic did not file a dispositive motion, nor did the parties brief any dispositive

motions. (D.I. 30 at 9-10.) Defendants rely on a single case from twenty-five years ago for the

proposition that motions and briefing are required prior to adjudicating a dispositive motion:

Bradley v. Pittsburgh Bd. of Educ., 913 F.2d 1064, 1069-70 (3d Cir. 1990).


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But in 2010, Fed. R. Civ. P. 56(f)(3) came into effect. Fed. R. Civ. P. 56(f)(3) permits

courts to grant summary judgment sua sponte after 1) giving notice and a reasonable time to

respond; and 2) identifying for the parties material facts that may not be genuinely in dispute.

Id.; see also Smith v. Borough of Dunmore, 516 Fed. App’x. 194 (3d Cir. 2013) (unpublished

opinion). While the Court did not expressly invoke Fed. R. Civ. P. 56(f)(3) in ordering final

relief for CeraMedic, its Order fits squarely within the rubric of Fed. R. Civ. P. 56(f)(3).

With respect to the notice provision of Fed. R. Civ. P. 56(f)(3), the Court gave prior

notice of the September 23, 2015 teleconference on September 21, 2015. (Oral Order of Sept.

21, 2015.) Whatever notice issues they raise, Defendants’ reliance on Anderson v. Davila, 125

F.3d 148, 156-57 (3d Cir. 1997) is misplaced: the Anderson court stated that “we ordinarily do

not vacate a permanent injunction [for purported lack of notice] if the party appealing the

judgment is unable to show prejudice.” Id. at 158. Defendants cannot show prejudice here: they

had a full opportunity to argue the merits of their case. When given that opportunity, Defendants

a) admitted their breach of the Standstill Agreement; b) admitted that Defendants and their

counsel failed to understand the Standstill Agreement’s one-year period provision; and c)

admitted that their only defenses were failure of consideration and unenforceability, which the

Court correctly rejected. (Sept. 23 Hrg. Tr. at 11:8-18, 12:11-13:1, 16:15-18.) Defendants may

not have made the most of their opportunity to argue the merits, but they did have a meaningful

opportunity to argue their case. The Court also identified the facts that were not in genuine

dispute: Defendants breached the Standstill Agreement and adequate consideration existed for

the Standstill Agreement as to both Defendants. (Sept. 23 Hrg. Tr. at 11:8-18, 12:11-13:1,

16:15-18.)


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The Court’s injunction Order is sustainable as a sua sponte grant of summary judgment

under Fed. R. Civ. P. 56(f)(3) in favor of CeraMedic. Because the Court effectively decided this

case via summary judgment, the Third Circuit, to whom Defendants appealed, can uphold that

summary judgment for any reason supported by the record developed in the Court. Wells v.

Rockefeller, 728 F.2d 209, 215 (3d Cir. 1984) (affirming grant of summary judgment on different

grounds than those employed by district court); 10A WRIGHT & MILLER FED. PRAC. & PROC. §

2716 (“The appellate court does not have to affirm a decision on a Rule 56 motion for the same

reasons that persuaded the court below to grant the motion.”) That further erodes Defendants’

claim that they have a strong likelihood of prevailing on appeal.

b. Defendants Never Identified What Discovery Or Evidence

They Might Purportedly Need.

Defendants complain that they did not have the opportunity to conduct discovery or

present evidence on the merits of CeraMedic’s claims. (D.I. 30 at 9.) But Defendants still have

not identified what, if any discovery they would have sought or evidence they would have

presented to support their defenses of a purported lack of consideration or enforceability.

Defendants did not submit any affidavits or declarations under Fed. R. Civ. P. 56(d) indicating

what, if any, additional facts were purportedly “essential to justify [their] opposition” to the entry

of summary judgment. In any event, Defendants had the opportunity to present those defenses at

the teleconference, as discussed above. (Sept. 23 Hrg. Tr. at 11:8-18, 12:11-13:1, 16:15-18.)

Defendants cannot show prejudice.

c. No Trial Is Required.

As shown above, the Court’s Order can be construed as a grant of summary judgment

under Fed. R. Civ. P. 56(f)(3). Defendants are not entitled to trial, nor is a trial necessary,

because summary judgment is legally sufficient to adjudicate a claim for relief if there is no


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genuine issue of material fact. See Catanzaro v. Masco Corp., 423 F. Supp. 415, 442 (D. Del.

1976), aff’d per curiam, 575 F.2d 1085 (3d Cir. 1978), cert. denied, 439 U.S. 989 (1978).

d. CeramTec’s Service Defense Lacks Merit.

CeraMedic properly served CeramTec in the Delaware Court of Chancery and again in

the District of Delaware.3 First, while this case was in the Delaware Court of Chancery,

CeraMedic personally served CeramTec North America Corp. (CTNA), a South Carolina-based

wholly-owned subsidiary of CeramTec, and the general agent of CeramTec in the United States.

Under Delaware law, if service is sufficient under the law of the state where service is made, that

service is legally sufficient. 10 Del. Code § 3104(d)(2). Personal service on a general agent

constitutes sufficient service on the principal under South Carolina law. S.C. R. Civ. P. 4(d)(3).

Under Delaware and South Carolina law, CeraMedic’s personal service of CTNA sufficed to

effect service on CTNA’s principal, CeramTec.

Second, CeraMedic also properly served CeramTec post-removal through the South

Carolina Secretary of State. Under Fed. R. Civ. P. 4(h)(1)(A), service may be made on a

corporate entity “in the manner prescribed by Rule 4(e)(1) for serving an individual.” In turn,

Rule 4(e)(1) permits service to be made “following state law for serving a summons in an action

brought in courts of general jurisdiction in the state where the district court is located or where

service is made.” CeraMedic’s service on CeramTec is proper if it complies with either

Delaware or South Carolina law. South Carolina allows service on an unauthorized foreign

corporation doing business in South Carolina via the South Carolina Secretary of State. S.C.

Code § 15-9-245. Under South Carolina law, CeraMedic’s service was effective when

3 CeraMedic’s legal and factual arguments on service are described in greater detail in

CeraMedic’s opposition to CeramTec’s motion to dismiss for insufficient service. (D.I. 18.) The

Court denied CeramTec’s motion as premature (D.I. 27), but could have denied it on the merits

as well.


10

CeraMedic served the Secretary of State. Holman v. Warwick Furnace Co., 456 S.E.2d 894, 896

(S.C. 1995) (“We hold that service pursuant to § 15-9-245 is effective upon delivery of the

[Summons and Complaint] to the Secretary of State.”) CeraMedic served CeramTec via the

Secretary of State before the teleconference. (D.I. 26-1 (Proof of Service).)

Finally, CeramTec’s extensive involvement in this litigation indicates that CeramTec has

received sufficient notice of this proceeding to satisfy due process, the entire point of the Federal

Rules’ service of process requirement. CeramTec submitted to personal jurisdiction in both

Delaware Courts (Letter Agreement; Standstill Agreement §§ 5, 12), voluntarily appeared

through counsel at the teleconference (Sept. 23 Hrg. Tr. at 1:8-13), argued the merits of this case

at the teleconference (id. at 11:8-18, 12:11-13:1, 16:15-18), and filed an appeal.

e. The Injunction Satisfies Fed. R. Civ. P. 65(d)(1)(A).

Defendants allege that the injunction Order does not state the reasons the injunction

issued and that the injunction Order therefore purportedly does not comply with Fed. R. Civ. P.

65(d)(1)(A). (D.I. 30 at 10.) But the injunction Order states, “As stated on the record during the

teleconference with the Parties and Court this day, September 23, 2015, it is hereby ordered….”

(D.I. 28.) That Order makes clear the reasons for the injunction: the record of the teleconference,

during which Defendants admitted their breach of the Standstill Agreement, and during which

the Court found their defenses insufficient. (Sept. 23 Hrg. Tr. at 11:8-18, 16:15-18.) The

injunction states that the teleconference record provides the reasons for the injunction.

Defendants even acknowledged to the Third Circuit that the Court entered the injunction based

on their breach of contract. (Cowell Decl. Ex. D (Defs.’ Mot. To Third Circuit For Stay) at 12

(“…Appellee’s breach of contract claim (upon which the Order’s grant of relief is wholly

based)….”).) The Court should reject Defendants’ elevation of form over substance.


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2. DePuy’s Purported Inability To Control The Third And Fourth

Petitions Does Not Affect CeramTec’s Ability To Withdraw Those

Petitions As To The Charted Claims.

Defendants claim that the injunction is improper because it requires DePuy to withdraw

inter partes review petitions that DePuy purportedly does not control. (D.I. 30 at 10.) But the

Court has nothing but Defendants’ word that DePuy cannot control the Third and Fourth

Petitions. And even assuming what Defendants say is true, CeramTec, as the named Petitioner

that filed the Third and Fourth Petitions, can effect a termination of the breaching petitions as to

the Charted Claims as the injunction requires, regardless of DePuy’s purported inability to

terminate them.

3. Defendants’ Consideration and Policy Defenses Lack Merit.

Under hornbook contract law and under governing Delaware state law, mutual promises

constitute adequate consideration under a contract. E.g., Ringling Bros.—Barnum & Bailey

Combined Shows, Inc. v. Ringling, 53 A.2d 441, 447 (Del. 1947).

Defendants claim that as to CeramTec, the Standstill Agreement lacks consideration.

But CeramTec ignores the numerous other promises that CeraMedic made to

CeramTec and DePuy under the Standstill Agreement, which promises constitute adequate

consideration to CeramTec.


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The

exchange of mutual promises in the Standstill Agremeent and the Letter Agreement provided

adequate consideration to create a valid and enforceable contract.

Public policy does not bar the enforcement of the Standstill Agreement. Whatever the

nature of Defendants’ purported public policy interests that favors adjudication of patent validity

disputes by the PTAB (D.I. 30 at 17-18), the Standstill Agreement does not offend that public

policy.

Defendants’ public policy defense lacks merit.

B. Defendants Have Not Proven Irreparable Harm Without A Stay.

Defendants cannot establish that they will suffer irreparable harm absent a stay. The

Court inquired as to what prejudice Defendants would suffer if an injunction were granted,


13

specifically tailored the injunction to affect only the Charted Claims, and thus avoided the only

prejudice Defendants identified: the termination of the Third and Fourth Petitions as to claims

other than Charted Claims. (Id. at 15:2-10.) Defendants now argue that they may lose the Third

and Fourth Petitions’ challenges to the Charted Claims forever if the injunction is not stayed.

(D.I. 30 at 12-13.) But that would not work irreparable harm on Defendants. Defendants remain

free to challenge the Charted Claims through the First and Second Petition, currently pending

with the PTAB. And, as Defendants themselves have argued, the PTAB may invalidate the

Charted Claims in the First and Second Petitions, which are not subject to the injunction. (Sept.

23 Hrg. Tr. at 6:21-24.) Thus, any prejudice to Defendants is speculative at best.

C. A Stay Will Harm CeraMedic.

The longer this litigation drags out without an injunction in place, the more prejudice

there is to CeraMedic and the more likely it is that the PTAB will institute trial4 and adjudicate

the validity of the Third and Fourth Petitions. The PTAB must make a final decision on the

validity of the Charted Claims within a year of any institution decision, which institution

decisions are expected on the Third Petition in December 2015 and on the Fourth Petition in

January 2016. 35 U.S.C. § 316(a)(11). An injunction after an adverse final decision would be

worthless to CeraMedic.5 More pressingly, CeraMedic has already had to respond to the

breaching Third Petition. (Cowell Decl. Ex. F (CeraMedic’s Patent Owner Preliminary

4 The PTAB’s most recent statistics have indicated that the PTAB institutes trial on

approximately 73% of petitions for inter partes review. (Cowell Decl. Ex. E (Patent Trial and

Appeal Board Statistics (8/31/2015) at 7 (1,591 granted institutions and joinders out of 2,193

institution decisions).) 5 A late injunction before a final written decision would also be worthless to CeraMedic. The

PTAB claims the authority to continue an instituted inter partes review proceeding even if the

petitioner ceases its participation in the proceeding. E.g., Blackberry Corp. v. MobileMedia

Ideas LLC, Case IPR2013-00016, Paper 31, slip op. at 3 (PTAB Dec. 11, 2013) (Cowell Decl.

Ex. G).


14

Response).) CeraMedic will also have to respond to the breaching Fourth Petition by October

18, 2015, mere days away.

Further, unlike in IGT v. Aristocrat Techs., Case No. 2:15-cv-00473-GMN-GWF (D.I.

70) (D. Nev. Sept. 18, 2015) (D.I. 30 Ex. 5), Defendants have already filed breaching petitions

for inter partes review instead of merely threatening to do so. (D.I. 30 Ex. 5 at 7; see also

Cowell Decl. Ex. H (Opening Brief for IGT), at 6 (“IGT expects that Aristocrat will file a

petition for inter partes review (“IPR”) or a reexamination proceeding in the Patent Office.”).)

D. No Public Interest Supports A Stay.

Defendants argue that “[t]here is no valid public policy interest in” enforcing the Court’s

Order under the purportedly extraordinary circumstances of this case. (D.I. 30 at 17-18) But

that argument improperly attempts to shift Defendants’ burden in seeking a stay to CeraMedic.

Defendants, who have the burden of establishing that they are entitled to the relief they seek,

must show that there is a valid public policy interest favoring a stay. Moreover, the first

purportedly “public” interest Defendants raise is simply Defendants’ private interests in delaying

or avoiding compliance with a substantively and procedurally proper injunction.

6


15

Defendants also claim that the public purportedly has an interest in the PTAB

determining the validity of the ’584 Patent that weighs against an injunction. (D.I. 30 at 17-18.)

But CeramTec, on its own and on DePuy’s behalf, filed two petitions for inter partes review that

are neither the subjects of this litigation nor the subjects of the injunction: the First Petition and

the Second Petition. (D.I. 30 at 5.) The First Petition and the Second Petition include challenges

to each of the Charted Claims. (Id.) Because the First Petition and the Second Petition are not

subject to the injunction (or even the subject of CeraMedic’s complaint), the PTAB will still

adjudicate the validity of the Charted Claims even if the Court denies Defendants’ extraordinary

stays. Denying Defendants’ motion and permitting the injunction to remain in force would not

violate the public interest that Defendants claim.

Finally, Defendants’ reliance on Singer Co. v. P.R. Mallory & Co., 671 F.2d 232, 235

(7th Cir. 1982) is misplaced. In Singer, the court refused to enforce an injunction preventing a

patentee from seeking a reissue of its own patent. Singer Co., 671 F.2d at 236. Singer’s public

policy violation lay in barring the patentee from using the Patent Office to assess its own

patent’s validity before engaging in infringement litigation. Id. Singer’s narrow public policy

interest does not extend to the conduct of contract-breaching serial inter partes review

petitioners.

V. CONCLUSION

CeraMedic requests that the Court deny Defendants’ motion to stay.


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Dated: October 6, 2015 Respectfully submitted,

/s/ Brian E. Farnan

Brian E. Farnan (Bar No. 4089)

FARNAN LLP

919 North Market Street

12th Floor

Wilmington, DE 19801

(302) 777-0300 (Telephone)

(302) 777-0301 (Facsimile)

[email protected]

Richard M. Cowell (admitted pro hac vice)

Kevin K. McNish (admitted pro hac vice)

DESMARAIS LLP

230 Park Avenue

New York, NY 10169

(212) 351-3400 (Telephone)

(212) 351-3401 (Facsimile)

[email protected]

[email protected]

Counsel for Plaintiff CeraMedic LLC


ceramdeic

Documents

defendants consideration

defendants breach

defendants emergency

harm ceramedic

favor of ceramedic

plaintiff ceramedic

gms ceramedic llcs opposition

ceramedic files suit