United States District Court, N.D. California
August 6, 2004.
NIKON CORPORATION and NIKON PRECISION, INC. Plaintiffs,
ASM LITHOGRAPHY B.V. and ASM LITHOGRAPHY, INC., Defendants.
The opinion of the court was delivered by: MARILYN PATEL, Chief Judge, District
Order and Memorandum Motion to Intervene
On December 21, 2001, plaintiffs Nikon Corporation and Nikon
Precision, Inc. (collectively "Nikon" or "plaintiffs") brought a
patent infringement action against defendants ASM Lithography
B.V. and ASM Lithography, Inc. (collectively "ASML" or
"defendants").*fn1 Among other things, plaintiffs' complaint
alleges infringement of four patents: United States Patent Number
6,233,041 ("the '041 patent"), United States Patent Number
6,377,336 ("the '336 patent"), United States Patent Number
6,392,740 ("the '740 patent"), and United States Patent Number
6,008,500 ("the '500 patent"). An additional patent United
States Patent Number 5,801,832 ("the '832 patent"), belonging to
ASML is the subject of a number of counterclaims. All five
patents pertain to photolithographic and microlithographic
machines used in the manufacture of integrated circuits.
Many of Nikon's claims against ASML concern a collection of
optical components produced by Carl Zeiss SMT AG ("Zeiss").
Zeiss's optical components make up a significant part of ASML's
accused designs, and ASML's patronage is pivotal to Zeiss's
business; in fact, ASML is Zeiss's only customer, meaning, "as a
practical matter, [the two] stand and fall together." See Zeiss
Mot., at p. 5.*fn2 Zeiss has now moved to intervene in this
action under Federal Rule of Civil Procedure 24. See
Fed.R.Civ.P. 24(a) & (b).*fn3
Federal Rule of Civil Procedure Rule 24 has long been
"liberal[ly] constru[ed] in favor of applicants for
intervention." Arakaki v. Cayetano, 324 F.3d 1078, 1082-83 (9th
Cir. 2003) (citing Donnelly v. Glickman, 159 F.3d 405, 409 (9th Cir. 1998)); see
also Haworth, Inc. v. Steelcase, Inc., 12 F.3d 1090, 1094
(Fed. Cir. 1993) (noting, generally, that procedural matters like
intervention are governed by the law of the circuit of
residence). Under Rule 24(a), a party retains the right to
intervene if: (1) the applicant has made a timely motion to
intervene; (2) the applicant has a significant protectable
interest relating to the property or transaction that is the
subject of the action; (3) the applicant is situated such that
the disposition of the action may impair or impede the
applicant's ability to protect that interest; and (4) the
applicant's interest is not adequately represented by existing
parties. See Fed.R.Civ.P. 24(a)(2); Arakaki, 324 F.3d at
1082-83. Rule 24(a)'s test is conjunctive; to merit intervention
as of right, a prospective intervenor must satisfy each
Rule 24(a) requirement. See League of United Latin Am. Citizens v.
Wilson, 131 F.3d 1297, 1302 (9th Cir. 1997).
Zeiss may not intervene under Rule 24(a). Zeiss is correct, of
course, that its motion to intervene is sufficiently timely.
Since Nikon filed its original complaint, Nikon and ASML have
indeed "covered a lot of legal ground together," establishing the
calendar for this litigation, filing potentially dispositive
motions, and participating in the construction of dozens of claim
terms. See California Dept. of Toxic Substances Control v.
Commercial Realty Projects, Inc., 309 F.3d 1113, 1119 (9th Cir.
2002) (considering three timeliness factors: "(1) the stage of
the proceeding at which an applicant seeks to intervene; (2) the
prejudice to other parties; and (3) the reason for and length of
the delay") (citation omitted); see generally Smith v.
Marsh, 194 F.3d 1045, 1050 (9th Cir. 1999); Wilson, 131 F.3d
at 1303 (noting that, when evaluating the "stage of proceeding"
factor, courts must engage in "a  nuanced, pragmatic" inquiry).
But Zeiss's motion comes during the discovery phase of this
protracted litigation, a period well before the court has
addressed any of the parties' many anticipated dispositive
motions. Id. (noting that when a court's decision to
"substantively and substantially engage the issues in [a]
case . . . weighs heavily against allowing intervention as of
right under Rule 24(a)(2)"); see also Smith, 194 F.3d at
1050-51. As the real substance of this litigation has not been
engaged, Zeiss's is not unduly tardy. Cf. Smith, 194 F.3d at
The fact that Zeiss's intervention will cause very little (if
any) prejudice to Nikon*fn4 only supports a finding of
timeliness, as does the fact that Zeiss offers a generally
persuasive explanation for its delay in seeking to intervene. Cf. Wilson, 131 F.3d
at 1304. As a part of its motion, Zeiss states unequivocally that
it has "no intention of re-asking Nikon for what it has already
[produced in discovery]," that it will readily comply with all
existing court-set schedules, and that it will not attempt to
upset any of this court's existing decisions. See Zeiss Reply,
at p. 4. Weighed against these assurances, Nikon's fears of the
need to refocus particular filings and the (amorphous) risk of a
flurry Zeiss-filed motions do not establish the requisite quantum
of prejudice nor do they show that Zeiss's participation will
prompt any delay. Cf. Wilson, 131 F.3d at 1304-05. Further,
Zeiss's explanation for its delay specifically, that Zeiss's
optics devices have recently proven the crux of this litigation
and that Zeiss waited in the hope that this action would settle
is sufficiently convincing. Cf. Wilson, 131 F.3d at 1304
(noting that it is not enough to recite the present procedural
posture of a case). Only recently has it become clear that
Zeiss's products sit at the center of this multifarious
litigation. It may be true that Zeiss might have moved to
intervene somewhat earlier in this litigation which, as Nikon
stresses, has been pending for many months.*fn5 But the
relevant question is not whether Zeiss could have sought
intervention sometime before it actually did. Id. The question,
rather, is whether Zeiss actually sought to intervene too late.
Zeiss's motion comes at a sufficiently early stage; it will not
prejudice the other parties significantly;*fn6 and Zeiss's
proffered reasons for any delay are acceptable. See California
Dept. of Toxic Substances Control, 309 F.3d at 1119. Under the
relevant test, then, Zeiss's motion to intervene is adequately
timely. See id. at 1303-04; cf. also United States v.
Oregon, 745 F.2d 550, 552 (9th Cir. 1984) (holding that the
district court did not abuse its discretion by finding prejudice
when intervention was sought after settlement involving a
delicate compromise following four years of negotiation with
certain points still disputed).
It is likewise true that Zeiss's interests may not be
adequately represented by ASML in this action. As Zeiss readily
admits, Zeiss's core litigation objective (viz., to have Nikon's
patents declared invalid) parallels ASML's goal precisely. See
Zeiss Mot., at p. 5. The two, Zeiss explains, "stand and fall
together" so much so that ASML has already made use of Zeiss's
resources in this action, consulting with Zeiss's counsel and
submitting Zeiss's claim construction arguments. See, e.g.,
Londen Decl., Exhs. H-I. It is natural to presume, then, that
ASML's representation of Zeiss's interests will be adequate. Under Ninth Circuit law, however, all
that Zeiss must show is that ASML's representation "may be"
inadequate. Northwest Forest Res. Council v. Glickman,
82 F.3d 825, 838 (9th Cir. 1996). While ASML is represented by highly
experienced, competent lawyers and is assisted by talented
scientific and technical experts, the role of Zeiss optical
components in the ASML systems is substantial and Zeiss brings a
very high, even unique, level of expertise. That expertise is
critical to the success of their joint enterprise. With Zeiss, a
corporation headquartered outside the United States, as an
intervenor there is more ready availability of discovery,
including documents and witnesses.
The court finds that Zeiss makes a sufficient showing on the
adequacy of representation factor. See Sagebrush Rebellion,
Inc. v. Watt, 713 F.2d 525, 528 (9th Cir. 1983) (considering,
inter alia, whether one part will "undoubtedly make all of the
intervenor's arguments"); cf. Trbovich v. United Mine
Workers, 404 U.S. 528, 538 n. 10 (1972).
But Zeiss has not established the requisite legally
protectable interest that is, a statutory, contract, or
constitutional interest in this litigation. Rather, all that
Zeiss states is an economic interest, albeit of a significant
sort. There is no question that Zeiss has substantial business
and economic interests in this litigation; should ASML's
microlithographic components be found unlawful, Zeiss's business
would suffer a concomitant blow. Cf. Arakaki, 324 F.3d at
1083 (holding that no protectable interest existed after the
district court dismissed a pertinent claim). But the Ninth
Circuit has held that "[a]n economic stake in the outcome of the
litigation, even if significant, is not enough" to qualify as a
protectable interest under Rule 24(a). See Greene v. United
States, 996 F.2d 973, 976 (9th Cir. 1993). This is no less true,
in the Ninth Circuit, where an unsubstantiated claim of
indemnification is also made. See id.; see also U.S. ex
rel. McGough v. Covington Technologies Co., 967 F.2d 1391, 1396
(9th Cir. 1992) (discussing how issue or claim preclusion might
impair particular interests); cf. Cunningham v. David Special
Commitment Center, 158 F.3d 1035, 1038 (9th Cir. 1998)
(reversing a decision to permit intervention where the district
court made no finding whatsoever regarding impaired or impeded
interests); Portland Audubon Soc. v. Hodel, 866 F.2d 302, 309
(9th Cir. 1989) (holding economic interest insufficient only in
the NEPA context); Coleman Capital Corp. v. Fidelity & Deposit Co, 43 F.R.D. 407,
408 (S.D.N.Y. 1967). It follows that Zeiss may not intervene as a
matter of right under Rule 24(a). Id.
Under Rule 24(b), however, Zeiss may intervene in this action.
Unlike Rule 24(a), Rule 24(b) does not require the potential
intervenor to demonstrate a "significant protectable interest."
See Kootenai Tribe of Idaho v. Veneman, 313 F.3d 1094,
1107-08 (9th Cir. 2002). There is no requirement under Rule 24(b)
that "the intervenor  have a direct personal or pecuniary
interest in the subject of the litigation," SEC v. U.S. Realty &
Improvement Co., 310 U.S. 434, 459 (1940), nor does the rule
mandate that the potential intervenor "be a person [or entity]
who would have been a proper party at the beginning of the suit."
Kootenai, 313 F.3d at 1107 (citing Wright, Miller & Kane,
Federal Practice and Procedure § 1911, 357-63 (2d ed. 1986)).
Instead, permissive intervention requires only that (1) an
independent ground for jurisdiction exist, (2) that the motion to
intervene be timely, and (3) that there exist a claim or defense
shared between the main and the intervenor's suit. See, e.g.,
id. ("[A]ll that is necessary for permissive intervention
[under Rule 24(b)] is that intervenor's `claim or defense and the
main action have a question of law or fact in common.'") (quoting
Fed.R.Civ.P. 24(b)); United States v. Washington,
86 F.3d 1499, 1506-07 (9th Cir. 1996) (following a tripartite test).
There is little question that Rule 24(b)'s three factors are
present here. Zeiss's motion or, more specifically, Zeiss's
complaint in intervention rests on a valid, independent ground
for jurisdiction, as the declaratory judgment Zeiss seeks depends
exclusively on federal patent law. See 28 U.S.C. § 2201-02;
see also 28 U.S.C. § 1331. It may be true, of course, that
Nikon has not yet affirmatively "threatened" Zeiss with suit.
See Nikon Mot., at 9-11 (citing, e.g., Arrowhead Indus. Water,
Inc. v. Ecolochem, Inc., 846 F.2d 731, 736 (Fed. Cir. 1988); BP
Chem., Ltd. v. Union Carbide Corp., 4 F.3d 975, 980 (Fed. Cir.
1993)). But Zeiss need only "reasonably apprehend" suit, and
Nikon reads this requirement too rigidly, ignoring the fact that
Zeiss could well be targeted for indirect infringement given its
relationship with ASML. There is, thus, no subject-matter
jurisdiction problem here.
In addition, Zeiss's motion presents a number of "questions of
law or fact in common" with the "main action"; as Zeiss itself
explains, "Zeiss seeks precisely the same relief that ASML does with regard to the Nikon optics patents."*fn7 See
Fed.R.Civ.P. 24(b); Zeiss Mot., at p. 7. The facts and, indeed, much
of the law are identical. Id. And, as discussed above,
Zeiss's motion is sufficiently timely, coming during the fact
discovery portion of this litigation and less than a year after
Nikon opted to focus on Zeiss-manufactured products. See
Wilson, 131 F.3d at 1303-04; see also California Dept. of
Toxic Substances Control, 309 F.3d at 1119; Oregon, 745 F.2d
at 552. Before this court and the ITC, this litigation has been
proceeding often slowly for years. In this court, much of the
substance of this action is still to come including a myriad of
summary judgment motions and, if necessary, a lengthy trial.
Rule 24 does not permit would-be intervenors to join an ongoing action
at any time, particularly when all relevant interests are
adequately represented by existing parties and motions are filed
too late. But Rule 24(b) does allow parties to intervene as a
matter of court discretion when the motion is timely, when the
court has subject-matter jurisdiction, and when there are
questions of law or fact in common. See Fed.R.Civ.P. 24(b).
All of Rule 24(b)'s terms are satisfied here, and Zeiss may
intervene in this action accordingly subject to the conditions
Finally, the court can order the proceedings in this case so as
to minimize delay and burdens to the parties and keep this case
on track. And, by this order the court instructs the parties that
it intends to do just that and expects them to conduct themselves
in accordance with this intent.
For the foregoing reasons, Zeiss's motion to intervene is
GRANTED. Zeiss is bound by all existing orders in this action,
including the court's claim construction and the court's
pre-trial schedule and discovery limits. Zeiss is also to file
its Federal Rule of Civil Procedure 26 disclosures within 45
days, making all relevant deponents available to Nikon promptly;
depositions already completed shall not be reopened.
IT IS SO ORDERED.