Opposition Brief — Regents of the University of California v. Eli Lilly & Co.

Supreme Court, U.S.

e FILED

| FEB 20 1098

No. 97-1201

meee

IN THE

Supreme Court of the Anited States

OCTOBER TERM, 1997

THE REGENTS OF THE UNIVERSITY OF CALIFORNIA,

Petitioner,

V.

ELI] LILLY AND COMPANY,

Respondent.

On Petition for a Writ of Certiorari to

the United States Court of Appeals for

the Federal Circuit

RESPONDENT?’S BRIEF IN OPPOSITION

DONALD R. DUNNER

Counsel of Record

Of Counsel: CHARLES E. LIPSEY

AMY E. HAMILTON HOWARD W. LEVINE

ELI LILLY AND COMPANY JOHN R. ALISON

Lilly Corporate Center FINNEGAN, HENDERSON

Indianapolis, IN 56285 FARABOW, GARRETT &

(317) 276-3169 DUNNER, L.L.P.

1300 I Street, NW

Washington, DC 20005

(202) 408-4000

PRESS OF BYRON S. ADAMS # WASHINGTON, D.C. @ 1-800-347-8208

QUESTIONS PRESENTED

1. Should the Court overturn as an abuse of

discretion a decision of the Judicial Panel on Multidistrict

Litigation ("JPML") consolidating five patent-related actions

between Genentech Inc. ("Genentech"), the Regents of the

University of California ("UC"), and Eli Lilly and Co. ("Lilly"):

(1) where UC did not raise this issue before this Court by

extraordinary writ as contemplated by 28 U.S.C. § 1407(e) and

28 U.S.C. § 1651; and (2) where there were hundreds of days

of overlapping depositions, one of the patents asserted against

Lilly by Genentech was the basis for Genentech's and Lilly's

challenges to the validity and enforceability of UC's patents,

and where the actions all required an understanding of complex

biotechnology?

~ 2 Should the Court reverse as an alleged violation

of 28 U.S.C. §§ 1407(a) and 1404 an order of the multi-district

transferee Court transferring the case to itself for trial even

though: (1) UC waived this alleged defect by failing to raise it

in its principal brief before the Federal Circuit; (2) UC failed to

raise as one of its Questions Presented before this Court the

propriety of the Federal Circuit's finding of waiver; and (3) the

self-transfer practice is rooted in well established federal

procedure and is not inconsistent with the spirit of the statute?

3. Are the Eleventh Amendment concerns raised

by UC implicated where a state voluntarily enters the federal

court system by suing a third party for patent infringement?

-ii-

PARTIES TO THE PROCEEDING BELOW

The parties are Petitioner, Regents of the University of

California, and Respondent, Eli Lilly and Company. Eli Lilly

and Company possesses neither a parent company nor any non-

wholly owned subsidiaries.

-jii-

TABLE OF CONTENTS

Page

QUESTIONS PRESENTED ............. WS eee i

PARTIES TO THE PROCEEDING BELOW ............... ii

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REASONS FOR DENYING THE WRIT ................. 10

i. UC'S FIRST QUESTION DOES NOT

WARRANT REVIEW BY THIS

i ee Whe bas + a4k ose osc 12

A. Review Now Is Untimely .......... 13

B. UC's Challenge is Merely Factual ... 15

-iV-

II. UC's SECOND QUESTION REGARDING THE

PROPRIETY OF SELF-TRANSFER IS NOT

PROPERLY BEFORE THE

CREE. sa wba ean ak eek Ane os nes 6c 16

A. UC Failed Properly to Present the Waiver

Issue as a Question to this

GD sg weak bh bck Saw bas 16

B. UC Waived the Self-Transfer Argument

Set Forth in its Second Question

IE bb hobs tis beh neue Bee 19

Ill. ELEVENTH AMENDMENT CONCERNS ARE

NOT IMPLICATED BY THIS

GN 6 ik 0 8S oe seeee Caen pia caeu nus 23

CRIULRAMEMAN 6 var eudcnueguis nape bebsQcees weer sal 30

-V-

TABLE OF AUTHORITIES

FEDERAL CASES

In re American Continental Corp./Lincoln

Savings & Loan Securities Litigation,

102 F.3d 1524 (9th Cir. 1996) cert.

granted in part sub nom.Lexecon Inc.

v. Milberg Weiss Bershad Hynes &

Lerach, 117 S. Ct. 1818 (1997) ........... passim

Atascadero State Hosp. v. Scanlon,

Re Bet PE ig ook nn ks ba censees 25, 26

Becton Dickinson & Co. v. C.R. Bard, Inc.,

Dae Fe FE POMEL IOTOD once ccc cscs ccccs 20

Chisholm v. Georgia,

par ye SOT y, .) ne 23

Conopco, Inc. v. May Dep't Stores Co.,

46 F.3d 1556 (Fed. Cir. 1994) ................ 20

Consolidated Aluminum Corp. v. Foseco Int'l Ltd,

910 F.2d 806 (Fed. Cir. 1990) .. .............. 21

Genentech, Inc. v. Regents of the University of California,

939 F. Supp. 639 (S.D. Ind. 1996) ............ 29

Goodman v. Lukens Steel Co.,

I i 16

Graver Tank & Mfg. Co., v. Linde Air Prod. Co.,

SJB SPE COSIED on saci vccvcswcecvcswer 16

Hans v. Louisiana,

134 Se Saks ee CS ss A 25, 26

Izumi Seimitsu Kogyo Kabushiki Kaisha

v. U.S. Philips Corp., 510 U.S.

ZF CUD Sa RETR has KANO TE 17, 18, 19

Kaufman Co., v. Lantech, Inc.,

607 F.2d STO GROG. Cai 19RG) ooo ies cats cise 20

Lebron v. National R.R. Passenger Corp.,

12 F.3d SRG CAG Gas Se Ra 6 CO 8 BET 22

Lebron v. National R.R. Passenger Corp.,

$13 US. FPS eee ve FA REIS 20, 21, 22

In re New York,

25E USB. BOSD) oon oo SRR. FHV 25

Pennhurst State Sch. & Hosp. v. Halderman,

465 US. SO (IGS iss 5 BFA OA 25, 26

Port Authority Trans-Hudson Corp. v. Feeney,

GS US: FF O02. AEA AVEO 25, 26

Principality of Monaco v. Mississippi,

292 US. S43 CS SG 24, 26, 27

Regents of the Univ. of Cal. v. Eli Lilly & Co.,

734 F. Supp. 911 (N.D. Cal. 1990) ............. 6

Regents of the Univ. of Cal. v. Eli Lilly & Co.,

21 U.S.P.Q.2d 1201 (N.D. Cal. 1991) ........... 6

-vii-

In re Repetitive Stress Injury Litigation,

Bow eg Ee. rrr 15

Seminole Tribe of Florida v. Florida,

Pe OE RN Soi ois wei eee 24, 25

United States v. Peters,

9 U.S. (5 Cranch) 115 (1809) ........... 7, 24, 25

Vaupel Textilmaschinen KG v. Meccanica

Euro Italia SPA, 944 F.2d 870

RG ee, ee eee rE 28

Warner-Jenkinson Co. v. Hilton Davis Chem. Co.,

EF SE OT) dat eis bios os cease 3

Waterman v. MacKenzie,

OR ads Ho ee eae 28

Yee v. Escondido,

S09: 17S. 510 C982) idee vives’ 82: 17:21, 22

CONSTITUTION - FEDERAL STATUTES

US; Comm MO TE i ciaseiaia dass asik's eins oases passim

RETA MNS 2 5.555, ya hail snub een bin PhS EE 4

SRR MANNE 60.135 Jac scsius oi. povawhiuikiis baie 6

SAME MMI) Shichi iovaccw stand San 60s th 4,6

po Te 2 eer rrr se ee ree ree ree ee passim

40 43.C.. § 14676) so sisdSi aie’, ods Passim

ee x ee Reh eo ei: Gaeta 7,11, 14

SII BGT IRe gio oss cn is ARH 1 BA 3

99 UBL. GE ZTIGD voce vin ccss nee Ue, ein 29

OTHER AUTHORITIES

Sup. Ct Ro thhu.s ccaiees ease een oil) en 16, 17, 18

Erwin Chemerinsky, Federal Jurisdiction,

5 7. ae Spee Cn Fi ek a eb be. oe. 24

Robert L. Stern et al., Supreme Court Practice,

ty YR.) A ee. ee Re ed ae 15

H.R. No. 1130, 90th Cong., 2d Sess. 2 (1968), reprinted in

1968 U.S.C.C.AN. 1898, 1899 ........... 13, 14

£e.

OPINIONS BELOW

In addition to the opinions cited by UC, the opinion of

the district court on the merits is reported at 39 U.S.P.Q.2d

1225 (S.D. Ind. 1995), and is annexed as Appendix A to Lilly's

conditional cross-petition for certiorari served concurrently

herewith.

STATEMENT OF THE CASE

i. INTRODUCTION

Contrary to UC's assertion that its scientists "paved the

way for the production of recombinantly produced human

insulin,"' it was Lilly and not UC that was the first to produce

a safe and steady supply of human insulin created using

"recombinant DNA" technology. Recombinant human insulin

was developed and commercially introduced as the result of a

collaborative project between Lilly and Genentech to which

UC's scientists contributed nothing. Genentech, not UC, made

and holds the basic patent on the recombinant DNA utilized by

Lilly to make human insulin and human proinsulin. Lilly has

already paid millions of dollars to Genentech for the right to

practice under that patent.

UC nonetheless attempted to reap where it had not sown

by suing Lilly in 1990 for allegedly infringing United States

Patent Nos. 4,652,525 ("the '525 patent") and 4,431,740 ("the

‘740 patent"), seeking hundreds of millions of dollars for its

alleged contribution to Lilly's sales of recombinant human

insulin. After seven long years, both the United States District

Court for the Southern District of Indiana and the United States

1 UC Pet. at 3.

s2e

Court of Appeals for the Federal Circuit thoroughly rejected

such assertions by UC.

Throughout the litigation, UC sought to cloak itself in

the mantle of a "pioneer." (UC Pet. at 2-3.) Yet, the evidence

before the trial court established that the patents UC sought to

enforce were rooted in inequity and deceit. While UC was the

first to clone pieces of rat insulin DNA, it has now been proven

that UC's original work upon which its patent position is based

was conducted in knowing and willful violation of the

applicable federal safety regulations governing recombinant

DNA research. (Lilly Cross-Pet. at 3-9.) While UC's

competition waited for government certification of the safety of

the tools used in their recombinant DNA experiments, UC went

forward using materials it knew had not been certified as safe

by the government. /d. at 5-7. UC then misrepresented the

origins of its data to the public, the National Institute of Health

("NIH"), the United States Senate, the United States Patent and

Trademark Office ("PTO"), and the federal district court before

which this action was tried, falsely claiming that the data had

been obtained using certified materials. Jd. at 5-8.

The trial court found UC's conduct sufficiently

reprehensible that it refused to enforce the affected patent. Jd.

at 8-9. While the Federal Circuit reversed the trial court's

unenforceability holding in the apparent belief that the

misrepresentations were not material to any technical ground of

unpatentability, it did not reverse as clearly erroneous any of

the underlying factual findings of the trial court. (UC Pet. App.

A at 23.)

2 The Federal Circuit's treatment of the unenforceability issue

represents a profoundly unwise public policy. It creates a large

economic incentive for scientists to violate applicable federal safety

regulations in the race for the vast economic reward associated with

eo

Although UC's '525 patent purported to claim ail the

naturally occurring DNA sequences for proinsulin appearing in

any mammal, UC had only experimentally determined and

described a portion of the proinsulin DNA sequence for rats.

The Federal Circuit, affirming the decision of the district court,

specifically held that because, inter alia, one could not predict

the structure of human or other mammalian DNA sequences

based solely on the rat sequence, UC failed to demonstrate that

it had actually invented the broad subject matter claimed by the

'525 patent. (UC Pet. App. A at 17.) Accordingly, the Federal

Circuit held that the claims of the '525 patent, which purported

to encompass human DNA, were invalid for failing to satisfy

the written description requirement of 35 U.S.C. § 112. dd.

Likewise, regarding UC's '740 patent, the Federal

Circuit found that, during prosecution before the PTO, UC

surrendered coverage of DNA sequences of the sort utilized by

Lilly to produce human proinsulin. (UC Pet. App. A at 28.)

Therefore, relying in part on this Court's decision in

Warner-Jenkinson Co. v. Hilton Davis Chem. Co., 117 S. Ct.

1040, 1049-51 (1997), the Federal Circuit held that UC could

not recapture such subject matter in an infringement action.

(UC Pet. App. A at 32.)

Without even challenging the merits of these decisions,

UC seeks before this Court to undo the seven years of litigation

it vigorously pursued against Lilly by raising alleged defects in

venue. Yet, the Southern District of Indiana was undeniably a

proper venue for the litigation. As the district in which Lilly

securing U.S. patents on the fruit of illicit experimentation. Because this

issue is of significant importance to the analogous current debate

regarding the regulation of the cloning of human beings, Lilly has sought

review in this Court, by way of a cross-petition for writ of certiorari filed

concurrently herewith, of the Federal Circuit's enforceability holding.

she

has its principal place of business, it was a forum in which the

infringement suit could have been brought originally under 28

U.S.C. § 1400(b). The Indiana district court also had both

subject matter jurisdiction under 28 U.S.C. § 1338(a) and

personal jurisdiction over Lilly. UC does not dispute these

facts but instead complains about the particular procedural

mechanisms that were used to transfer the case from the

Northern District of California to the Southern District of

Indiana. Specifically, UC challenges the validity of (1) an

order by the JPML consolidating for pretrial proceedings UC’s

lawsuit against Lilly with four other factually related actions

involving UC, Lilly, and Genentech pursuant to 28 U.S.C. §

1407, and (2) an order by the Southern District of Indiana

transferring the trial venue from the Northern District of

California to the multidistrict forum in the Southern District of

Indiana pursuant to 28 U.S.C. § 1404(a).

There is, however, nothing remarkable about these two

orders that justifies review by this Court. As will be discussed

below, these orders were proper, were based on the particular

factual circumstances of the parties, were in accordance with

well-established law, and manifestly served the interests of

justice by promoting judicial economy. Furthermore, the

particular alleged defects in these orders raised by the first and

second questions presented in UC's certiorari petition have not

been properly presented to this Court for review. UC's third

question presented in its petition asserts that the two transfer

orders somehow violated UC's purported Eleventh Amendment

immunity. However, contrary to UC’s protestations, the

Eleventh Amendment to the Constitution simply has no bearing

on the instant case. Here, UC was a willing plaintiff in the

litigation it initiated against Lilly, not a defendant compelled to

litigate in federal court against its will. Thus, UC's reliance on

principles of sovereign immunity are misplaced and are at odds

with nearly two hundred years of precedent in this Court.

co

Il. LITIGATION HISTORY

In The Regerts of the University of California v. Eli

Lilly and Co., UC sied Lilly in the Northern District of

California for allegedly infringing its “525 and ‘740 patents.

(UC Pet. App. A at 3.) Upon motion by Genentech, the JPML

transferred the case in |992 to the Southern District of Indiana

pursuant to 28 U.SC. § 1407 for coordinated pretrial

proceedings with four other cases involving closely related

technology, factual issues, documents, and witnesses.

Contrary to UC's contentions before this Court that

there was "no common issue of material fact or law," the JPML

specifically found that each action, in addition to requiring an

understanding of recombinant DNA technology, "will present

factual questions that overlap with the other actions in this

docket." (UC Pet. at iand App. E at 65, emphasis added.) The

JPML explained that there were then thirty-five depositions

common to all five actions, "issues of patent validity pertaining

to three patents that will be present in all actions, and a

contractual settlement agreement whose interpretation will be

involved in all actions." Jd Based on these findings, the JPML

correctly found that "{c]entralization under Section 1407 is thus

necessary in order to eliminate duplicative discovery, prevent

inconsistent pretrial rulings, and conserve the resources of the

parties, their counsel and the judiciary." Jd Indeed, the

JPML's decision was correct as there were ultimately hundreds

of days of depositions which were attended by counsel for UC,

Genentech, and Lilly ’

3 UC incorrectly asserts that the JPML's decision was inconsistent

with the previous decision of the Northern District of California.

Contrary to UC's contention, Lilly had not previously moved to transfer

the case under § 1404(a) to the Southern District of Indiana. Lilly had

instead moved to dismiss the case or in the alternative transfer because

aa«

Not satisfied with the JPML's decision, UC petitioned

the Federal Circuit for a writ of mandamus to vacate the

consolidation order. The Federal Circuit denied UC’s request,

finding that there was a sufficient basis for the JPML's decision

due to numerous common factual questions between the

actions, including the following:

Regents v. Lilly (California) is described as

involving commercial activities of Lilly in

producing human insulin using, in part,

technology transferred to it by Genentech--this

technology transfer partly underlies Genentech

v. Lilly (Indiana). The agreements between the

Regents and Lilly are involved in Regents v.

Lilly (California), Genentech v. Lilly (Indiana),

Regents v. Genentech (California), and

Genentech v. Lilly and Regents (Indiana). A

settlement agreement between the Regents and

Genentech appears to be pertinent to Regents v.

Lilly (California) and Genentech vy. Lilly

(Indiana). Various Genentech patents involved

in Lilly v. Genentech (Indiana) are said to be

asserted as invalidating prior art in Regents v.

consolidate these two cases and the remaining three in Indiana for

oF

Lilly (California), Regents v. Genentech

(California), and Genentech v. Lilly and

Regents (Indiana).

(UC Pet. App. B at 54-55.) Accordingly, based on these

numerous relationships, the Federal Circuit held that UC failed

to demonstrate that the JPML’s decision was an abuse of

discretion or a usurpation of judicial authority and denied UC's

mandamus petition.

UC also challenged the JPML's consolidation on the

grounds that it violated the Eleventh Amendment to the

Constitution. The Federal Circuit, citing United States v.

Peters, 9 U.S. (5 Cranch) 115, 139 (1809) (Marshall, J.),

rejected this contention as well, holding that "[t]he Eleventh

Amendment is not designed to give procedural advantage to

State litigants, but to shield states from unconsented actions

against them." (UC Pet. App. at 52). By commencing a suit

against Lilly in federal court, the Federal Circuit explained,

"the Regents, like all litigants, become subject to the Federal

Rules, including the procedural efficiencies administered by the

Multidistrict Panel." Jd. UC accepted the Federal Circuit's

ruling and did not seek further review in this Court by

extraordinary writ as contemplated by 28 U.S.C. § 1407(e) and

28 U.S.C. § 1651.

After approximately two more years of discovery, and

after the Southern District of Indiana—the multidistrict

forum—had considered and denied two complex summary

judgment motions brought by Lilly, the district court, pursuant

to 28 U.S.C. § 1404(a) transferred the trial venue of the case to

the Southern District of Indiana based primarily on

considerations of judicial economy and the fact that the

convenience of the parties and witnesses did not dictate a

contrary forum. In rendering its decision, the district court

specifically found that (1) it had already gained an

understanding of the complex technical issues involved in the

case and it would be a waste of judicial resources to have

another court duplicate this effort, (2) judicial efficiency

heavily favored transferring the action due to the trial court's

growing familiarity with such issues, and (3) that the center of

the accused infringing activity was located in the multidistrict

venue and thus is the preferred forum for trial. (UC Pet. App.

D at 60-63.) In opposition to the transfer, UC argued that the

transfer would not serve the interests of justice or the

convenience of the parties, but did not then urge that such a

transfer would violate what UC belatedly alleges is the "clear"

language of § 1407.

After an additional year of discovery, and after the

Southern District of Indiana considered and denied a third

summary judgment motion brought by Lilly and a summary

judgment motion brought by UC, the case was finally tried

before Senior Judge S. Hugh Dillin. After a careful review of

a 13,000 page trial record developed during a two week trial,

receipt and evaluation of expert testimony from both sides, and

observation of the demeanor of six expert witnesses, five of the

inventors named on UC's patents, and three of UC's attorneys,

Judge Dillin issued a lengthy and detailed opinion holding that

UC's patents were either invalid, unenforceable, or not

infringed by Lilly. (Lilly Cross-Pet. at App. A.)

On appeal, UC raised nine issues before the Federal

Circuit. UC challenged the trial court’s findings that: (1) the

‘525 patent was invalid; (2) the ‘525 patent was unenforceable:

(3) the ‘525 patent was not infringed under the doctrine of

equivalents; (4) the “740 patent was not literally infringed; (5)

or, in the alternative, the ‘740 patent was invalid; (6) the ‘740

patent was not infringed under the doctrine of equivalents; and

(7) the ‘740 patent was unenforceable. UC also asserted that

"2

(8) the district court’s § 1404 transfer violated the Eleventh

Amendment, and (9) the district court failed properly to

evaluate the considerations set forth in § 1404. Although UC

was obviously not bashful regarding raising issues for appellate

review, UC completely failed in its principal brief before the

Federal Circuit to raise the issue of whether the transfer of the

trial venue to the multidistrict forum violated § 1407.

After Lilly had filed its principal brief before the

Federal Circuit, UC placed a single sentence in its reply brief

belatedly alleging that the § 1404 transfer allegedly violated the

statutory language of § 1407. Moreover, it was not until less

than a week before oral argument that UC first cited Judge

Kozinski's dissent in Jn re American Continental Corp./Lincoln

Savings & Loan Securities Litigation, 102 F.3d 1524 (9th Cir.

1996), cert. granted in part sub nom. Lexecon Inc. v. Milberg

Weiss Bershad Hynes & Lerach, 117 S. Ct. 1818 (1997), to the

Federal Circuit. Because UC failed to raise this issue in its

principal brief or at any earlier time during the litigation, Judge

Bryson of the Federal Circuit specifically questioned UC’s

counsel, at oral argument, on the issue of whether this argument

had been waived. In response to Judge Bryson's question

regard‘ng whether UC had properly raised this argument in its

opening brief, UC’s counsel— effectively admitting that it had

waived the argument—-stated "the exact answer to your honor’s

question is no we did not."

Seven months later, the Federal Circuit delivered a 33

page opinion holding that the '525 patent was invalid and that

Lilly had not infringed the properly interpreted claims of the

‘740 patent. Regarding UC's challenge to whether the district

court properly evaluated the criteria set forth in § 1404(a), the

Federal Circuit explained that "in a case such as this in which

several highly technical factual issues are presented and the

other relevant factors are in equipoise, the interest of judicial

206.

economy may favor transfer to a court that has become familiar

with the issues." (UC Pet. App. A. at 11.) The Federal Circuit

also held, as it did before, that "the Eleventh Amendment

applies to suits ‘against’ a state, not suits by a state," and that

“we do not believe that the Court has ever so construed the

Eleventh Amendment [as applying to suits brought by a state]."

(UC Pet. App. A. at 9.)

Furthermore, the Federal Circuit, citing its own

established precedent, found that UC, by failing to raise the

issue in its opening brief, waived its argument regarding

whether § 1407 allowed a multidistrict transferee court to

transfer a case to itself for trial under § 1404(a). (UC Pet.

App. A at 11-13.) UC filed a petition for reconsideration with

a suggestion for rehearing in banc, which did not raise any of

the issues now before the Court. Finally, UC filed its petition

for writ of certiorari on January 21, 1998.

REASONS FOR DENYING THE WRIT

The Court should not expend its extremely limited

resources by examining the propriety of the pretrial

consolidation by the JPML, which is the subject of UC's first

question presented in its petition. This issue has not been

properly raised and is fundamentally a factual dispute not

worthy of Supreme Court review. The JPML properly

determined that, due to the many overlapping witnesses and the

common factual issues involved in the actions between UC,

Genentech, and Lilly, the five separate actions should be

consolidated for pretrial proceedings to promote judic.al

economy and serve the interests of justice. On a petition for a

writ of mandamus, the Federal Circuit in 1992 reviewed the

merits of the consolidation order and after a full and fair

hearing held that the JPML had not abused its discretion. Now,

six years later, after voluminous discovery, a legally and

cSt.

technically complex trial, and an appeal to the Federal Circuit,

UC asks this Court to review the findings of the JPML and the

Federal Circuit. UC, however, did not raise the validity of the

multidistrict consolidation to this Court at that time as

contemplated by § 1407(e) and § 1651. Accordingly, this

Court should decline to consider at this late date the

circumstances regarding the pretrial consolidation.

Furthermore, and perhaps more importantly, this issue is simply

not worthy of this Court’s review. UC’s argument represents

a mere factual challenge to the findings of the JPML—findings

that were approved by the Federal Circuit—regarding the

interrelations between the five actions and does not raise a

unique question of law warranting review by this Court.

UC's challenge to the Southern District of Indiana's so-

called "self transfer"—the second question presented in UC's

petition—is also not properly before the Court. UC contends

in its petition that the allegedly “plain language and clear

legislative history"* demonstrate that a § 1407 transferee court

cannot transfer the case for trial to the multidistrict venue

pursuant to 28 U.S.C. § 1404(a). This issue is currently before

the Court in Lexecon Inc. v. Milberg Weiss Bershad Hynes &

Lerach, 1178S. Ct. 1818 (1997). However, UC fails to explain

why, despite this alleged "plain language," it failed to raise this

issue until after both parties had filed their principal briefs on

the merits on appeal before the Federal Circuit. Since UC did

not raise this issue in its opening brief, the Federal Circuit,

following its own well-established precedent, held that UC had

waived this venue argument. Thus, before this Court reaches

this issue on the merits, it must first determine whether the

Federal Circuit correctly found that UC waived this issue. This

question, however, is not included in UC's petition for certiorari

4 UC Pet. at 17.

522.

and is not "fairly included therein" under the rationale of Yee

v. Escondido, 503 U.S. 519, 537 (1992). Accordingly, this

Court should not even reach UC's second question. Moreover,

even if the Court addresses this issue, it should not disturb the

Federal Circuit's opinion because (1) UC did in fact waive this

venue issue and (2) the self-transfer practice is not in conflict

with the statutory framework for reasons cited by the

respondent and supporting amici in the Lexecon case.

Finally, the Eleventh Amendment concerns raised by

UC—UC's third question—simply have no bearing on the

issues in this case. The Eleventh Amendment immunity to

which UC clings simply does not apply where a state is a

willing plaintiff in federal court. Accordingly, for all of the

foregoing reasons, this Court should deny UC’s petition for a

writ of certiorari.

I. UC'S FIRST QUESTION DOES NOT WARRANT

REVIEW BY THIS COURT

UC's first question asks whether the Federal Circuit

erred by declining to overturn an order of the JPML, which

consolidated for coordinated pretrial proceedings five then-

pending lawsuits involving UC, Genentech, and Lilly. This

question, however, does not merit further attention by this

Court because: (1) UC failed to seek timely review of the

Federal Circuit’s denial of its petition for a writ of mandamus;

and (2) the question raises mere factual issues that have already

been considered and appropriately resolved by the JPML and

the Federal Circuit.

‘33.

A. Review Now Is Untimely

UC did not petition this Court to review the Federal

Circuit's denial of its mandamus petition at the time of the

decision. UC instead allowed the parties and the federal courts

to expend years of effort in discovery, trial preparation, trial

practice, and appellate practice, the results of which UC now

finds unsatisfactory. If UC had a continuing objection to

coordinated pretrial proceedings, it had a duty to raise those

objections promptly before this Court by application for an

extraordinary writ. Because UC did not do so, prudential

considerations weigh heavily against reviewing the propriety of

the JPML at this late date. In enacting § 1407(a), Congress

sought "to provide centralized management under court

supervision of pretrial proceedings of multidistrict litigation to

assure the ‘just and efficient conduct’ of such actions." Such

centralized management, it was hoped, would avoid or

minimize the possibility for conflict or duplication of discovery

during pretrial proceedings. Jd at 1899-1900. Although

Congress identified a number of factors relevant to the

application of a § 1407(a) transfer, it recognized that such

factors "do not lend themselves to precise measurement," and

that "the informed discretion of the judiciary is the best method

for resolving questions as to when and where cases should be

transferred for pretrial [proceedings]." Jd. at 1901.

Accordingly, to best effectuate its overall purpose of

promoting judicial economy, Congress expressly opened, yet

also carefully circumscribed, a specific path for judicial review

of JPML decisions under § 1407(e). Under the express

language of 28 U.S.C. § 1407(e), "[n]o proceedings for review

* See H.R. No. 1130, 90th Cong., 2d Sess. 2 (1968), reprinted in

1968 U.S.C.C.A.N 1898, 1899.

i. os

of any order of the panel may be permitted except by

extraordinary writ pursuant to the provisions of title 28, section

1651, United States Code." By limiting review to this

procedural mechanism, dissatisfied litigants were given a

simple choice: either pursue immediate judicial review, in the

nature of mandamus under 28 U.S.C. § 1651, or go forward

with pretrial proceedings in the transferee district.

Although UC petitioned to the Federal Circuit for

mandamus under § 1651, it did not seek review from this Court

of the Federal Circuit's denial of its mandamus petition by

extraordinary writ as contemplated by § 1407(e). 28 U.S.C. §

1651(a) undeniably provides this Court with the authority to act

upon an appropriate application under § 1407(e).” Because an

appropriate method of obtaining review by this Court existed

at that time, UC should not be permitted to avoid the

procedural mechanism specifically enacted by Congress for

review of § 1407(a) transfer orders. Indeed, logic dictates that

if UC desired to petition this Court for review, it should have

done so at the time of the Federal Circuit's denial of its

mandamus petition, not six years later—after discovery, a trial

on the merits, and an appeal to the Federal Circuit. Review of

the JPML's consolidation order at this late date utilizing the

"normal" certiorari route would seriously conflict with

Congress’ intent of permitting review of the JPML's orders only

in a manner which promotes the policy of judicial economy

° 1968 U.S.C.C.A.N. at 1902 (mandamus “is more expeditious

than appeal, and is consistent with the overall purposes of the proposed

statute”).

7 Section 1651(a) states that "The Supreme Court . . . may issue

all writs necessary or appropriate in aid of [its] jurisdiction[] and

agreeable to the usages and principles of law."

é8$-

underlying § 1407. Accordingly, this Court should decline to

review UC's first question presented.® |

B. UC's Challenge is Merely Factual

UC asserts that the JPML abused its discretion and/or

exceeded its statutory authority by consolidating the five

actions between Genentech, UC, and Lilly because—according

to UC—there were no common factual questions involved in

the actions. The fundamental flaw in UC's argument, however,

is that the there were numerous factual overlaps between the

actions, including hundreds of days of common depositions and

thousands of common documents. Indeed, UC completely

ignores the specific findings of the JPML and the Federal

Circuit regarding these factual overlaps. (UC Pet. App. B. at

54-55; UC Pet. App. E at 65.)’ In this regard, the JPML

specifically stated that the five actions, in addition to requiring

an understanding of recombinant DNA technology, "will

present factual questions that overlap with the other actions in

* Even if this Court determines that UC did not have to raise this

issue to the Court at an interlocutory stage of the proceeding, UC should

have raised this issue again to the Federal Circuit on appeal after trial.

See Robert L. Stern et al., Supreme Court Practice, 198 (7th ed.

1993)"Denial of certiorari at the interlocutory stage of a proceeding is

without prejudice to renewal of the questions presented when certiorari

is later sought from the final judgment, asswming the questions are

properly preserved in the lower courts after the denial."(emphasis

added). As UC chose not to raise this issue before the Federal Circuit,

review here is no longer appropriate.

® Due to these factual overlaps, UC's reliance on In re Repetitive

Stress Injury Litigation, 11 F.3d 368, 373 (2d Cir. 1993) is misplaced.

/26-

this docket." (UC Pet. App. E at 65, emphasis added.)'° Thus,

as UC's petition represents a mere factual challenge to the

record already reviewed by the JPML and the Federal Circuit,

it should not be reviewed by this Court pursuant to well-

established precedent."

Il. UC's SECOND QUESTION REGARDING THE

PROPRIETY OF SELF-TRANSFER IS NOT

PROPERLY BEFORE THE COURT

A. UC Failed Properly to Present the Waiver Issue

as a Question to this Court

This Court's Rule 14.1(a) specifically states that "[o]nly

the questions set out in the petition, or fairly included therein,

will be considered by the Court." Accordingly, "[tJhe framing

10 Although Lilly could spend many pages discussing the

numerous factual interconnections between the five actions, Lilly will

merely note that published European patent application EPA-1929, the

foreign counterpart of one of the patents that was in suit in the Indiana

patent action between Genentech and Lilly (U.S. Patent No. 4,704,362

issued in the names of Itakura and Riggs) provided the basis for Lilly's

defenses in the instant case that UC's "740 patent was both invalid and

unenforceable and Genentech's defense in its litigation with UC that

UC's growth hormone patent was unenforceable. Thus, one of the

critical issues in all the cases was the scope and content of this patent's

disclosure and the factual circumstances involving UC's knowledge of

this patent.

'! Graver Tank & Mfg. Co., v. Linde Air Prod. Co., 336 U.S. 271,

275 (1949)stating that "[a] court of law, such as this Court is, rather

than a court for correction of error in fact finding, cannot undertake to

review concurrent findings of fact by two courts below in the absence

of a very obvious and exceptional showing of error"); Goodman v.

Lukens Steel Co., 482 U.S. 656, 665 (1987).

a?

of the question presented has significant consequences" since

the Court does not ordinarily "consider questions outside those

presented in the petition for certiorari." Yee v. Escondido, 503

U.S. 519, 535 (1992); Izumi Seimitsu Kogyo Kabushiki Kaisha

v. U.S. Philips Corp., 510 U.S. 27, 31-32 (1993). Although this

rule is prudential in nature, the Court will only disregard it "in

the most exceptional cases." There are two principal reasons

for the rule: (1) it provides notice to the respondent of the

grounds upon which the petitioner seeks certiorari; and (2) it

assists the Court in granting certiorari in only those cases that

enable the Court to "resolve particularly important questions."

Yee, 503 U.S. at 535-36.

In the instant case, UC failed to present to the Court the

question of whether the Federal Circuit erred in finding that UC

waived the so-called Lexecon self-transfer argument. Instead,

UC only raised the self-transfer issue on the merits: whether the

language of § 28 U.S.C. 1407(a) permitted the multidistrict

judge to transfer the trial venue of the case to the multidistrict

forum under 28 U.S.C. § 1404(a). An almost identical

situation was presented to the Court in the Izumi case. In /zumi,

the petitioner presented one question for review by the Court:

"Should the United States Court of Appeals routinely vacate

district court final judgments at the parties’ request when cases

are settled while on appeal?" Izumi, 503 U.S. at 30. However,

in order to reach this question, the Court first had to decide the

following standing question later raised by petitioner:

"Whether the court of appeals should have permitted Petitioner

to oppose Respondents’ motion to vacate the district court's

judgment?" Jd. The Court explained that if the later raised

question is not fairly included in the initial question presented

for review, then "Rule 14.1 would prevent us from reaching it."

Id. at 31.

- 18 -

The Court found that the second question was not

"subsidiary" or "fairly included" in the initial question,

explaining that the later raised question is a threshold inquiry

akin to a question regarding a party's standing, in "no way

depends on the merits" of the case, and is "analytically and

factually" quite different from the question on which review

was granted. Jd. at 31-32. Moreover, the Court noted that the

analysis is not affected by the fact that the parties discussed the

question in their briefs, stating that this "fact . . . does not bring

that question properly before us." Jd at 31 n.5. Thus, this

Court held that Rule 14.1(a) imposed a heavy presumption

against considering the second question. Although

acknowledging that there are exceptions to this general rule, the

Court found that none of those exceptions applied because a

decision on a motion to intervene—the later raised question—is

a difficult one, is bound up in the facts of the case, and is

unlikely to result in a new principle of law. Jd at 33.

Therefore, since the later raised intervention issue needed to be

addressed before the Court could address the question that was

properly presented, the Court dismissed its writ of certiorari as

improvidently granted. /d. at 34.

Likewise, this Court should not grant certiorari on the

self-transfer issue raised by UC's second question presented.

To reach this question, the Court must first hold that the

Federal Circuit erred in finding that UC waived the self-transfer

argument. However, as in Jzumi, this threshold issue was not

properly presented as a question to this Court. Moreover, the

waiver issue is not "fairly included" in the question on the

merits presented by UC. As was the case in Jzumi, the waiver

issue is a threshold inquiry which in no way depends on the

merits of the case and is factually and analytically distinct from

UC's second question on the merits. To determine that the

Federal Circuit erred regarding the waiver issue, this Court

would have to examine bot the Federal Circuit's precedent on

s3¢-

briefing requirements and waiver and the factual circumstances

regarding UC's failure to raise the self-transfer issue at any time

before its reply brief at the Federal Circuit. This analysis is

completely separate and distinct from the question of whether

the language and legislative history of § 1407(a) allows self-

transfer. Furthermore, there are not sufficient reasons in the

instant case to overcome the “heavy presumption" against

reviewing an issue not fairly included in the question presented.

As in Izumi, the question regarding whether UC waived the

issue is bound up in the facts of the case and is unlikely to

establish a new principle of law. Moreover, the legal question

raised by UC on the merits has already been raised in the

Lexecon case. Thus, there is no compelling need for the Court

to now address this issue. Accordingly, this Court should not

reach this issue and thus should not grant certiorari on UC's

second question presented.

B. UC Waived the Self-Transfer Argument Set

Forth in its Second Question Presented

Even if this Court reaches the question of waiver,

certiorari on the merits is not warranted. The Federal Circuit

correctly found that UC waived this issue. UC asserts that the

"plain language and clear legislative history of Section 1407(a)"

indicates that the district court should have remanded the case

to the Northern District of California rather than transferring

the trial venue to the Southern District of Indiana pursuant to §

1404(a). (UC Pet. at 17.) However, UC provides no

satisfactory explanation why, if the language is so clear, it first

raised this issue in its reply brief before the Federal Circuit. In

this regard, UC's position is remarkably different from that of

the petitioner in Lexecon, which raised the issue regarding the

statutory language of § 1407 by writ of mandamus to the Ninth

Circuit immediately after the allegedly improper transfer and

again to the Ninth Circuit on appeal of the merits. If Lexecon

‘-.

could properly raise these arguments, there is apparently no

reason why UC could not have done the same.

It is the well-established practice in the Federal Circuit,

as in many other courts of appeals, that issues not raised in a

party's principal brief are waived. Becton Dickinson & Co. v.

C.R. Bard, Inc., 922 F.2d 792, 800 (Fed. Cir. 1990) ( "[A]n

issue not raised by an appellant in its opening brief. . . is

waived."); see also Kaufman Co. v. Lantech, Inc., 807 F.2d

970, 973 (Fed. Cir. 1986)("We note here that it is inappropriate

for appellants to discuss in their reply brief matters not raised

in either of the principal briefs."); Conopco, Inc. v. May Dep't

Stores Co., 46 F.3d 1556, 1561 n.1 (Fed. Cir. 1994). For this

reason, the Federal Circuit specifically questioned UC's counsel

at oral argument regarding whether it had properly raised the

self-transfer argument in its opening brief. As previously

mentioned, see p. 9, supra, UC conceded that it did not raise

this argument in its opening brief and thus effectively admitted

that it waived the argument under well-established practice and

precedent of the Federal Circuit.

In response, UC argues not that it had properly raised

the issue of whether the language and legislative history of §

1407(a) precluded self-transfer, but instead that it had raised

other venue challenges before the Federal Circuit. Specifically,

UC cites its contentions that Judge Dillin failed properly to

evaluate the criteria set forth in § 1404(a) (whether the transfer

was for the convenience of the parties and in the interests of

justice) and whether the transfer violated UC's alleged Eleventh

Amendment immunity from suit. Indeed, UC suggests, citing

Lebron v. National R.R. Passenger Corp., 513 U.S. 374, 379

(1995), that even if the Federal Circuit correctly found that UC

had waived this issue, review by this Court is still proper

because UC had raised these other venue issues. (UC Pet. at

16-17.)

oe

Yet, Lebron provides no support for UC's position. The

Court in Lebron merely found that "once a claim is properly

presented, a party can make any argument in support of that

claim." 513 U.S. at 379. UC, however, did not raise its claim

regarding the statutory language of § 1407 in a timely manner

before the Federal Circuit. UC only challenged whether the

district court correctly applied the criteria of § 1404 and

whether such a transfer violated the Eleventh Amendment. In

contrast, UC now seeks to broaden its claim to include ail

challenges to the venue of the trial. Such efforts should not be

countenanced by this Court. Indeed, the Federal Circuit has a

similar rule to the one cited in Lebron but nevertheless found

that UC had waived this argument.’

Moreover, in an analogous situation, this Court has

found that a claim regarding whether there had been a

regulatory taking was analytically different and not fairly

included in a claim regarding whether there had been a

physical taking. Yee, 503 U.S. at 537. The Court specifically

held that "[bjoth might be subsidiary to a question embracing

both—Was there a taking?—but they exist side by side, neither

encompassing the other." Jd In the same way, UC's

arguments that Judge Dillin did not properly apply the criteria

in § 1404(a) and that the transfer was unconstitutional do not

encompass the analytically separate question of whether §

1407(a) requires remand.

Furthermore, the Court in Lebron specifically discussed

the previous decision in Yee and distinguished Yee on the

following grounds: (1) that it was possible in Yee to consider

"2 See Consolidated Aluminum Corp. v. Foseco Int'l Ltd.,910 F.2d

804, 814 (Fed. Cir. 1990) (judgment may be defended on any ground

properly raised below).

-2-

whether there was a physical taking without inquiring into

whether there was a regulatory taking but in Lebron it was

"impossible" to consider whether Amtrack's government

connections were sufficient to convert Amtrack from a private-

entity into the Government without first determining that

Amtrack was a private entity; and (2) that while in Yee “what

would go to show a regulatory taking and what would go to

show a physical taking were quite different," in Lebron, the

elements that the Court would consider in determining whether

Amtrack was converted into the Government or whether it was

the Government to begin with are closely related and overlap.

513 U.S. at 381-82. In the instant case, it is obviously possible

to determine the § 1404 issues raised by UC without

considering the question of whether § 1407 requires remand

since this is exactly what was done by the Federal Circuit.

Moreover, as in Yee, the analysis of whether the transfer was

for the convenience of the parties and in the interests of justice

and whether it violated the Eleventh Amendment are separate

and do not overlap with the question regarding the meaning of

the language and legislative history of § 1407(a).°

Accordingly, the Court's decision in Lebron does not excuse

UC's failure to raise this issue before the Federal Circuit.

Finally, as to the merits of UC's position, it is Lilly's

position that the JPML's rule allowing self-transfer by the §

1407 transferee court is consistent with both the text and

legislative history of 28 U.S.C. § 1407 and serves the interests

'3 In addition, another reason why the Court in Lebron decided to

review the issue was that it was passed upon by the Second Circuit. Jd.

at 379; Lebron v. National R.R. Passenger Corp., 12 F.3d 388, 390 (2d

Cir. 1993)\holding that "Government action is most readily found when

the conduct at issue is performed by a government entity . . . that is not

the case here"). In the instant case, however, the Federal Circuit did not

pass on the issue, finding that it had been waived by UC.

ANTE ing A Byer SAAT ae re Ghee BV CREA RCA Rp in en gh

Aegan

PPL AR

598.

of justice. Indeed, contrary to UC's assertions, Lilly submits

that the instant case graphically illustrates the proper

functioning of the multidistrict litigation system, as envisioned

by Congress, by disposing of unmeritorious claims in the most

efficient and expeditious manner possible. Lilly's views on this

issue are amply reflected in its amicus brief, as well as the brief

of the Respondent in the Lexecon case. Lilly will not burden

this brief with a recapitulation of those views. Suffice it to say

that if this Court does not strike down the now well-established

practice of self-transfer in the Lexecon case, UC's arguments

will necessarily fail as a matter of law. Yet, even if this Court

were to rule in Lexecon that self-transfer is improper, UC's

petition must still be denied because UC, unlike the petitioner

in Lexecon, waived this argument.

Ill. ELEVENTH AMENDMENT CONCERNS ARE NOT

IMPLICATED BY THIS CASE

In its petition for certiorari, UC seeks to portray itself as

a helpless state litigant whose sovereign immunity has been

swept away by the flawed application of 28 U.S.C. §§ 1407

and 1404. UC contends that the JPML's pretrial consolidation

under § 1407 and the transfer of the trial venue to the

multidistrict forum under § 1404(a) deprived a sovereign of its

right to select a forum for its litigation and thereby violated the

Eleventh Amendment to the Constitution. (UC Pet. at 17-18.)

This argument, however, flows from UC's erroneous view that

principles of sovereign immunity are somehow implicated

where a state is a willing plaintiff in federal court. UC's novel

theory is not only directly contradicted by the jurisprudence of

this Court but also subverts the very policies underlying the

Eleventh Amendment.

The Eleventh Amendment was enacted as a direct

response to this Court's decision in Chisholm v. Georgia, 2 U.S.

.24-

(2 Dall.) 419 (1793), which allowed a South Carolina citizen to

sue the state of Georgia in federal court to recover debts for

materials supplied during the Revolutionary War.'* To

overturn the result of this case, the Eleventh Amendment

prohibits citizens of another state, or of the same state, from

suing an unconsenting state in federal court. The Eleventh

Amendment embodies the Constitutional policy that "each

State is a sovereign entity in our federal system" and that "it is

inherent in the nature of sovereignty not to be amenable to the

suit of an individual without its consent." Seminole Tribe of

Florida v. Florida, 116 S. Ct. 1114, 1118 (1996). The

sovereignty of the State of California, however, cannot be

violated when, as in this case, the state itself purposefully

chooses to bring suit in federal court. United States v. Peters,

9 U.S. (5 Cranch) 115, 139 (1809).

In United States v. Peters, Justice Marshall, writing

only eleven years after the ratification of the Eleventh

Amendment, discussed the scope of this doctrine in a case

where the State of Pennsylvania had asserted that federal courts

were without jurisdiction. In addressing the state's arguments,

Justice Marshall specifically stated the following:

The right of a state to assert, as plaintiff, any

interest it may have in a subject, which forms

the matter of controversy between individuals,

in one of the courts of the United States, is not

affected by this amendment; nor can it be so

construed as to oust the court of its jurisdiction,

should such claim be suggested. The

\4 Principality of Monaco v. Mississippi, 292 U.S. 313, 325

(1934); see Erwin Chemerinsky, Federal Jurisdiction, § 7.2 at 330-32

(1989).

“43

amendment simply provides, that no suit shall

be commenced or prosecuted against a state.

Id. at 139, emphasis added. Contrary to UC's assertions, this

statement directly addresses and thoroughly rejects UC's

assertion that the Eleventh Amendment applies where a state is

a willing plaintiff in federal court. Indeed, UC has failed to cite

one case in the two hundred years since its ratification where ©

the Eleventh Amendment was invoked in a situation such as

this where the state brought the suit.

The cases cited in UC's petition for certiorari involve

situations where the state was the defendant, not the plaintiff.'°

Moreover, much of UC's cited authority pertains to the level of

intent necessary for a state to effectuate a waiver of its Eleventh

Amendment immunity. Such principles of waiver are simply

not applicable because the Eleventh Amendment immunity

does not apply where the state is a willing plaintiff. Moreover,

the venue concern implicated by the cases cited by UC is

whether the state consented to be sued in federal court or state

court, not whether consent to proceedings in one federal court

15 See e.g., Seminole Tribe v. Florida, 116 S. Ct. 1114 (1996) (suit

against State of Florida); Pennhurst State Sch. & Hosp. v. Halderman,

465 U.S. 89 (1984) (suit against officials of State of Pennsylvania); Port

Authority Trans-Hudson Corp. v. Feeney, 495 U.S. 299, 307 (1990) (suit

against entity created by States of New York and New Jersey); Hans v.

Louisiana, 134 U.S. 1 (1890) (suit against state of Louisiana);

Atascadero State Hosp. v. Scanlon, 473 U.S. 234 (1985) (suit against

California State Hospital and California State Agency); Jn re New York,

256 U.S. 490, 496 (1921) (suit against state of New York).

~ =

could preclude transfer to another federal court as suggested by

uc."

Thus, the clear text of the Eleventh Amendment and the

jurisprudence of this Court provide no support for UC's novel

interpretation regarding the scope of the Eleventh Amendment

immunity from suit. UC attempts to bolster its position by

resorting to strained policy arguments. UC asserts that the

Federal Circuit ignored "the broad principles underpinning the

Amendment" and instead "focused myopically on the precise

words,” giving the Eleventh Amendment a "narrow, wooden,

construction." (U.C. Pet. at 21-22.) UC, however, fails to

demonstrate how the Federal Circuit's determination

contravenes any important policy.

Indeed, the Federal Circuit's decision is perfectly

consistent with this Court's precedent that citizens of the same

state,'’ foreign sovereigns,'* and federal corporations cannot

sue a state in federal court.'? All of these decisions reflect the

16 See, e.g., Port Authority Trans-Hudson Corp., 495 U.S. at 307

(holding that the states of New York and New Jersey consented to be

sued in federal court, rather than state court, and thereby waived their

Eleventh Amendment immunity); Pennhurst State Sch. and Hosp., 465

US. at 99 n.9 ("[T]he Court consistently has held that a State's waiver

of sovereign immunity in its own [state] courts is not a waiver of the

Eleventh Amendment immunity in the federal courts."); Atascadero

State Hosp., 473 U.S. at 241 ("[I]n order for a State statute . . . to

constitute a waiver of Eleventh Amendment immunity, it must specify

the State's intention to subject itself to suit in federal court.").

'7 Hans v. Louisiana, 134 U.S. 1 (1890).

'8 Principality of Monaco v Mississippi, 292 U.S. 313 (1934).

19 Id. at 327.

227

policy that a sovereign should not be compelled into the courts

of another sovereign against its will. These decisions have

absolutely nothing to do with the instant case where a state

voluntarily entered the federal court system by suing a third

party. In this regard, the Federal Circuit specifically stated that

"we do not believe that the Court has ever so construed the

Eleventh Amendment" to apply to situations where the state is

a willing plaintiff. (U.C. Pet. App. at 9.) Accordingly, the

Federal Circuit—applying the uniform precedent of this

Court—correctly held that "the Eleventh Amendment applies

to suits ‘against’ a state, not suits by a state" and that "[tJhe

Eleventh Amendment is not designed to give procedural

advantage to State litigants, but to shield States from

unconsented actions against them." (U.C. Pet. App. at 9, 52.)

UC further argues that there is a "blurring" of the

defendant-plaintiff roles in patent cases which somehow

justifies an expansion of the Eleventh Amendment beyond its

intended scope. As the patent holder, UC asserts that it must

defend its patents against charges of invalidity and

unenforceability. (UC Pet. at 24.) Thus, according to UC, its

role in patent cases is like that of a traditional defendant. Jd.

UC's contentions are without merit. In this case, there was no

legal charge or proceeding initiated by Lilly attacking UC's

patents. There was only a refusal by Lilly to acquiesce in UC's

assertion that it had a property right which Lilly was infringing.

UC chose to go to federal court to enforce its asserted property

right, just as every plaintiff in commercial civil litigation goes

to court to assert some property or contract right which its

adversary refuses to acknowledge. If UC's argument were

accepted, the plaintiff in every such commercial case could be

viewed as the de facto defendant, leading to a series of facially

absurd results.

- 28 -

Moreover, contrary to UC's assertion, there is nothing

that compels a state entity to own patents or to sue alleged

infringers. UC suggests that "[iJn these days of diminishing

public resources," state universities often patent their

discoveries to create income for additional basic research. (UC

Pet. at 19.) UC then asserts that it "must" file suit in federal

court or forego an important public asset-hypothetical royalties

from an alleged infringer. Jd. at 20. Yet, UC fails to explain

why a state cannot raise revenue for its university system in the

traditional methods available to states, such as raising taxes or

selling bonds. Lilly submits that expanding the Eleventh

Amendment to provide states with procedural advantages in

litigation is not the best or even a rational way to promote a

state's educational system.

Furthermore, UC fails to acknowledge its ability to sell

or otherwise assign its patents to a private entity for valuable

consideration and let that entity sue the alleged infringer in

federal court. This Court has specifically held that an assignee

has standing to sue an alleged infringer without the presence of

the assignor in the lawsuit. Waterman v. MacKenzie, 138 US.

252, 255 (1891)(holding that an assignment of the "whole

patent, comprising the exclusive right to make, use, and vend

the invention . . . vests in the assignee . . . a right to sue

infringers ... in the name of the assignee alone"); Vaupel

Textilmaschinen KG v. Meccanica Euro Italia SPA, 944 F.2d

870, 873-74 (Fed. Cir. 1991). By assigning its patents, UC can

still collect revenue from its technical developments and avoid

the alleged indignity of litigating in federal court.

On the other hand, if a state university sets aside its

cloak of sovereign immunity in order to sue alleged infringers

in federal court, it must be bound by the federal rules and

applicable statutes. Any other rule would transform the state

into a "super" litigant, enabling it to use its sovereign immunity

+99.

to dictate which rules and/or statutes it chooses to follow. Such

a rule would seriously undermine principles of fundamental

fairness critical to the proper operation of the federal courts by

drastically increasing the power of states at the expense of other

litigants.

Accordingly, UC is not entitled to choose the forum in

which it will proceed to trial, but is only entitled to choose to

stay out of the federal court system entirely. Once a state

voluntarily enters the federal court system by suing another

party, it loses its Eleventh Amendment protection and subjects

itself to the same rules and statutes that apply to all other

litigants, including 28 U.S.C. §§ 1404 and 1407. As aptly

stated by the Federal Circuit, "Upon entering the litigation

arena the Regents, like all litigants, become subject to the

Federal Rules." (UC Pet. App. B at 52.)

Finally, UC contends that the Eleventh Amendment

should preclude transfer to another venue because "the accused

infringer could gain through a transfer motion what it could not

accomplish through the early filing of a declaratory judgment

action." (UC Pet. at 25.) UC's argument is a logical non

sequitur. Assuming, as UC does, that Eleventh Amendment

immunity would shield a state from a declaratory judgment

action brought by a private citizen,” it necessarily follows that

the citizen cannot pick the forum for a suit he or she is not

20 This issue of whether Congress has the power to abrogate a

state's Eleventh Amendment immunity and subject it to suit under 35

U.S.C. §§ 271(h) of the patent laws is currently before the Federal

Circuit as an appeal of Judge Dillin's decision in Genentech, Inc. v.

Regents of the University of California, 939 F. Supp. 639, 646 (S.D. Ind.

1996). This question need not be addressed by the Court at this time

because the Eleventh Amendment simply does not apply where the state

is a willing plaintiff in federal court.

- 30-

entitled to file. The state may thus stay out of federal court if

it so chooses. If a state chooses, however, to enter the federal

court system by voluntarily appearing as a plaintiff, then every

defendant has the right to ask the federal court to conduct the

litigation in a more convenient forum under 28 U.S.C. §§ 1404

and/or 1407, and the federal courts have acquired the authority

over the state to make such decisions and issue appropriate

orders effecting those decisions.

CONCLUSION

For the foregoing reasons, Lilly urges the Court to deny

UC's petition for a writ of certiorari in its entirety.

Respectfully submitted,

Donald R. Dunner

Counsel of Record

Charles E. Lipsey

Of Counsel: Howard W. Levine

Amy E. Hamilton John R. Alison

ELI LILLY AND COMPANY FINNEGAN, HENDERSON,

Lilly Corporate Center FARABOW, GARRETT &

Indianapolis, Indiana 46285 DUNNER, L.L-P.

(317) 276-3169 1300 I Street, N.W.

Washington, D.C. 20005-3315

(202) 408-4000

Counsel for Respondent

Eli Lilly and Company

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