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

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Opposition Brief
- **Published:** January 1, 1998
- **Citation:** 523 U.S. 1089

## Text

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
pe, EB Eee Pee ETT ET Tee Tere ili
ee re Vv
REE TE SB ee ey ea l
IO OT nn cece ns cccvestccses l
I ie rca techie bees kw 6 2
Il. Py 8) 4 ar 5
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

: S58 SRP A RR STENT ER ee OTe

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386013_2094%3A2. Public record. Not legal advice.