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SLR Partners, LLC v. B. Braun Medical Inc.

January 20, 2010

SLR PARTNERS, LLC AND ROZI MEDICAL DEVICES LIMITED, PLAINTIFFS,
v.
B. BRAUN MEDICAL INC., DEFENDANT.



The opinion of the court was delivered by: Hon. Jeffrey T. Miller United States District Judge

ORDER DENYING PLAINTIFFS' RECONSIDERATION MOTION FOR

Doc. No. 34

Plaintiffs SLR Partners, LLC and Rozi Medical Devices Limited seek reconsideration of the court's order granting Defendant B. Braun Medical Inc.'s motion to dismiss on claim preclusion grounds.

I. BACKGROUND

Plaintiffs SLR Partners, LLC and Rozi Medical Devices Limited (collectively, "SLR") own United States Patent No. 5,006,114 (the "'114 patent") for technology that facilitates sterile, needleless injections into intravenous lines. In 1992, SLR approached B. Braun Medical Inc. ("Braun") about a joint effort to develop the '114 patent into a commercial product.*fn1 To that end, the parties entered an exclusive licensing agreement.

Nearly one year after entering the license agreement, SLR hired ViR Engineering ("ViR") to develop commercially viable designs based on the '114 patent at SLR's expense. ViR developed five designs that were ultimately presented to Braun by SLR. Braun then began funding ViR's work. Unbeknownst to SLR, Braun began developing ViR's plans into a commercial product called the UltraSite valve. In 1995, Braun obtained United States Patent No. 5,439,451 (the "'451 patent") on the UltraSite valve, naming four ViR engineers as the inventors. Two years later, in 1997, SLR learned about the development of the UltraSite valve and the '451 patent. SLR terminated the license agreement.

In 1998, Braun sought a declaratory judgment that Braun, and not SLR, owned the '451 patent. SLR counterclaimed for conversion, possession of personal property, fraud, and misappropriation of trade secrets. SLR prevailed at trial and won damages based upon past and future sales of the UltraSite valve, as well as punitive damages. At a subsequent equitable trial, the court gave SLR the option of owning the '451 patent and foregoing future damages. SLR elected to own the '451 patent, but this ruling was ultimately struck down by the Ninth Circuit. The parties then settled, with SLR receiving approximately $26 million (slightly more than the trial court initially awarded) and Braun maintaining ownership of the '451 patent.

SLR sued Braun for patent infringement, alleging that the UltraSite valve infringes the '114 patent. Braun moved to dismiss under Federal Rule of Civil Procedure 12(b)(6) on three grounds: claim preclusion, issue preclusion, and a release of claims provision contained in the parties' prior settlement agreement. The court granted the motion on claim preclusion grounds.

SLR now moves the court-under either Federal Rule of Civil Procedure 59(e) or 60(b)(1)-to reconsider its ruling on claim preclusion. SLR argues that the court improperly applied Ninth Circuit law instead of Federal Circuit law, the court improperly based its ruling on issues of disputed fact, and the court improperly reached the wrong conclusion under both Ninth Circuit and Federal Circuit law. For the reasons stated below, the court denies SLR's motion for reconsideration.

II. LEGAL STANDARDS

Under Federal Rule of Civil Procedure 59(e), a party may file a "motion to alter or amend a judgment" within 10 days after the entry of judgment.*fn2 Federal Rule of Civil Procedure 60(b)(1) provides that "[o]n motion and just terms, the court may relieve a party or its legal representative from a final judgment, order, or proceeding for the following reasons: mistake, inadvertence, surprise, or excusable neglect." Fed. R. Civ. P. 60(b)(1). "A motion under rule 60(b) must be made within a reasonable time," in this case no later than one year after entry of judgment. Fed. R. Civ. P. 60(c)(1). The court may repair its own mistake pursuant to Rule 60. Kingvision Pay-Per-View Ltd. v. Lake Alice Bar, 168 F.3d 347, 350 (9th Cir. 1999).

III. DISCUSSION

SLR first contends that the court erred by applying Ninth Circuit law instead of Federal Circuit law. Where a claim preclusion issue is particular to patent law, Federal Circuit law applies. Hallco Mfg. Co. v. Foster, 256 F.3d 1290, 1294 (Fed. Cir. 2001). In this case, SLR's contention is of no moment, because the court sees no substantial difference between the application of Ninth Circuit and Federal Circuit law. The Federal Circuit applies the Restatement (Second) of Judgments on claim preclusion issues. See Foster v. Hallco Mfg. Co., 947 F.2d 469, 478 (Fed. Cir. 1991). This approach is not substantially different than the approach applied by the Ninth Circuit concerning what constitutes a claim-the determinative issue here. Compare id. and A.V. Costantini v. Trans Worlds Airlines, 681 F.2d 1199, 1201-02 (9th Cir. 1982).

According to the Federal Circuit's application of the Restatement a "'claim' rests on a particular factual transaction or series thereof on which a ...


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