Schlich v. Broad Inst., Inc. (In Re Schlich)
Opinion
*43
Petitioner-Appellant George W. Schlich, a patent agent for Intellia Therapeutics, Inc., appeals from the district court's denial of a petition for discovery under
I. Background
A. Factual Background
The Broad Institute, Inc. is a nonprofit medical research organization founded in 2003 by Eli and Edythe Broad, alongside Harvard University, Harvard-affiliated hospitals, and the Massachusetts Institute of Technology. The nonprofit launched in 2004, focusing on the development of genomic research for the advancement of medical science. Dr. Feng Zhang is a member of the Broad Institute, and both Dr. Naomi Habib and Dr. Le Cong are Postdoctoral Associates who worked with Dr. Zhang. Dr. Zhang dedicates part of his research to the CRISPR-Cas9 system for genome editing.
Intellia is a "genome editing company" whose primary focus is the development of "potentially curative therapeutics" using the CRISPR-Cas9 system. Schlich is a European patent attorney providing legal services to Intellia in the EPO opposition proceedings against four of Broad's patents related to CRISPR-Cas9. Dr. Jennifer Doudna is a founding member of Intellia, and the company holds an exclusive *44 license to Dr. Doudna's intellectual property in the CRISPR-Cas9 therapeutics field.
The CRISPR-Cas9 system emerged from research on certain bacteria that can precisely target and "carve up" genetic material. When applied to human DNA, the potential curative value of this technology is allegedly tremendous, and its potential worth is estimated to be in the billions of dollars.
Dr. Doudna and Dr. Emmanuelle Charpentier led a team working on the bacteria associated with the CRISPR-Cas9 technology and, on May 25, 2012, filed a provisional patent application 3 at the United States Patent and Trademark Office ("U.S.P.T.O.") for certain "methods and compositions" for "DNA modification." Additionally, they published an article describing their findings in June 2012. See Martin Jinek et al., A Programmable Dual-RNA-Guided DNA Endonuclease in Adaptive Bacterial Immunity , 337(6096) Science 816 (2012).
On October 5, 2012, Dr. Zhang and other members of the Broad team, including Dr. Habib and Dr. Le Cong, submitted a manuscript that "reported the first successful programmable genome editing of mammalian cells using CRISPR-Cas9." On December 12, 2012, Broad filed its first provisional patent application with the U.S.P.T.O. relating to genomic sequence manipulation, and subsequently filed several other related provisional patent applications in the following months.
Based on two provisional patent applications filed by Broad in December 2012 and January 2013, Thomas Kowalski, a U.S. Patent Attorney, filed a Patent Cooperation Treaty ("PCT") application 4 on behalf of Broad. Since Broad's provisional patent applications included various inventions, Kowalski and Dr. Smitha Uthaman conducted an inventorship study to determine the different inventions and the corresponding contributions from each inventor. Subsequently, Broad filed ten separate PCT applications. The subject matter of the initial provisional patent applications was divided among these PCT applications listing different inventors and a "divided priority" based on the findings of the inventorship study. Eventually, the PCT applications resulted in several European patents, which Intellia now challenges at the EPO.
Schlich filed oppositions with the EPO seeking the revocation of four of Broad's European patents. At the opposition proceedings, Schlich argued, among other things, that Broad's European patents cannot claim right of priority to Broad's provisional patent applications filed with the U.S.P.T.O. because the applicants listed in the latter are not the same as those listed in the subsequent PCT applications, as is required by European patent law. In response, Broad argued that United States law, and not European law, should determine whether its European patents can claim priority to the provisional applications because those provisional patent applications were filed in the United States.
*45 According to Broad, United States law allows multiple inventions to be disclosed and multiple inventors to be listed in a provisional application without requiring that every inventor have contributed to every invention. The right of priority from that provisional application could then be severed into different PCT applications without requiring complete identity between the inventors listed in both applications, as long as the applicant "claim[s] priority in [the PCT] application with regard to an invention to which [he or she] contributed." In support of its contention that the proper procedure was followed here, Broad submitted a declaration from Kowalski describing the process he followed and the findings of his inventorship study.
B. Procedural History
In September 2016, Schlich filed an application for discovery under
On November 1, 2016, the district court ordered supplemental briefing after noting that the parties had not addressed the issue of the EPO's receptivity to the district court's assistance in providing the requested discovery prior to the hearing.
5
The parties then submitted their supplemental briefs. Broad's submission included a declaration from a former EPO official, who stated that the issue presented by Schlich in his § 1782 application "is a potential
dispute
over inventorship" or "entitlement," yet, "the EPO has no authority or jurisdiction to resolve issues of entitlement," including "whether inventorship is or is not correct." The declarant thus concluded that "discovery relating to this issue would not be considered relevant and therefore would not be considered by the EPO." On December 9, 2016, the district court denied Schlich's petition without prejudice.
In re Schlich
,
On March 15, 2017, the district court denied Schlich's Motion for Reconsideration. Schlich timely appealed. Shortly after the notice of appeal was filed, the EPO issued a preliminary and non-binding opinion and summoned the parties for oral proceedings.
II. Discussion
A. Standard of Review
Because § 1782 is a mechanism for obtaining discovery, and "[t]he trial court is in the best position to weigh fairly the competing needs and interests of parties affected by discovery,"
Seattle Times Co.
v.
Rhinehart
,
B. Section 1782(a)'s statutory requirements and the Inte l factors
Today's § 1782 is the product of over 150 years of Congressional effort and manifests the intent to provide "federal-court assistance in gathering evidence for use in foreign tribunals."
Intel Corp.
,
The district court's discretion to allow discovery if all § 1782 requirements are met is not boundless. Rather, district courts must exercise their discretion under § 1782 in light of the twin aims of the statute: "providing efficient assistance to participants in international litigation and encouraging foreign countries by example
*47
to provide similar assistance to our courts."
Intel Corp.
,
C. The district court's decision
Here, the district court addressed the statutory requirements and the discretionary
Intel
factors before arriving at its decision. It found that the first three statutory requirements were met, and assumed without deciding that the fourth requirement was also satisfied.
In re Schlich
,
Both parties agree that the only issue on appeal is the district court's interpretation of the second Intel factor. Specifically, Schlich argues that, as the party opposing discovery, Broad should have borne the burden of establishing, by authoritative proof, 8 that the foreign tribunal would not be receptive to the discovery sought. He further claims that the district court erroneously inverted the burden of proof and required him to provide authoritative proof that the foreign tribunal would be receptive to the assistance of the court in obtaining discovery. Had the district court properly placed the burden of proof on Broad, Schlich's argument goes, it would have granted the discovery request because "Broad had not definitively and conclusively shown by authoritative proof or otherwise that the EPO would not be receptive to the discovery."
Broad urges us to find Schlich's arguments on appeal waived. It argues that Schlich did not argue below that Broad bore the burden to demonstrate that the EPO would be unreceptive to the requested discovery, "let alone that Broad was required to submit 'authoritative proof' of the EPO's position." Broad further argues that Schlich's arguments also fail on the merits because although Schlich -- as the "party seeking relief" -- did have the burden to prove the elements of his claim, the district court never placed the burden on Schlich to provide " 'authoritative proof' of the EPO's receptivity -- indeed, that standard appears nowhere in the district court's decision." Instead, Broad posits, the district court's determination "was based on undisputed evidence submitted by Broad" showing that the requested discovery was irrelevant to the foreign proceedings "and thus did not turn on the burden of proof." We first address Broad's waiver argument. Because we conclude that Schlich's arguments were adequately preserved, we then turn to the merits of his arguments.
D. The arguments were adequately preserved
Broad acknowledges that Schlich addressed the "differing views" regarding who bore the burden of proof, but claims that he "did not take a position as to which view was correct" and, instead, argued in the district court that, under any of these views, the second Intel factor weighed in favor of granting the requested discovery. Broad further argues that Schlich did not develop the legal standard argument below. In consequence, according to Broad, Schlich has waived the arguments he now makes on appeal.
We find the issues adequately preserved below. Schlich raised the burden of proof argument in the district court, both in his writings prior to the hearing and at the hearing. On several occasions, Schlich recognized that the First Circuit has yet to determine the issue, but argued that Broad, as a respondent opposing discovery, should prove the foreign tribunal's unreceptivity. See , e.g. , ECF No. 27, Transcript of Hearing at 14 ("[O]nce you show that the discovery is relevant ... then the burden shifts to the opposing party, to *49 Broad, to demonstrate that the petition should not be granted."); id. at 18 ("[S]everal ... other courts ... presume that the foreign tribunal will accept the evidence unless the respondents prove otherwise, in other words, the burden is on the other side to prove that the Court won't be receptive."). Furthermore, Schlich sufficiently developed his legal standard argument by referencing other courts applying that same standard, and by further characterizing his evidence as meeting that standard. See ECF No. 22 at 5 (stating that while "Broad failed to offer any evidence that the EPO would be unreceptive to the requested discovery, [Schlich] has offered authoritative evidence to the contrary") (emphasis added). Therefore, the issues were adequately preserved. We thus address the merits of Schlich's arguments.
E. Merits
The Supreme Court has not established the appropriate burden of proof, if any, for any of the discretionary factors, or the legal standard required to meet that burden.
Intel Corp.
,
It is undisputed that Schlich, as the party seeking discovery under § 1782, had the burden of establishing that all the statutory requirements were met in order for the court to even consider exercising its discretion to grant the requested relief.
See
,
e.g.
,
Certain Funds, Accounts and/or Inv. Vehicles
,
There are differing views as to the second
Intel
factor. Some courts have ruled that the party opposing discovery bears the burden of proving that the foreign tribunal would be unreceptive to the evidence and that, absent such proof, the factor weighs in favor of granting discovery.
See
In re Chevron Corp.
,
Other courts have required "authoritative proof" of the receptivity of the foreign tribunal before finding that this factor weighs in favor of discovery.
See
,
e.g.
,
In re Babcock Borsig AG
,
Still other courts have not specifically placed a burden of proof on either party as to any of the
Intel
factors and, instead, seem to have neutrally analyzed the contentions and supporting evidence presented by all the parties in deciding whether to exercise their discretion.
See
,
e.g.
,
In re Clerici
,
In
Intel
, the Supreme Court set out a list of factors -- rather than elements of a claim -- "that bear consideration" by the district court when it exercises its discretion under the statute, leaving it up to the district court to assign those factors weight based on the particular circumstances of each case.
Intel Corp.
,
We understand the Second and Third Circuits' reasoning for placing the burden of proof on the party opposing discovery, especially in light of the interest in "providing equitable and efficacious procedures for the benefit of tribunals and litigants involved in litigation with international aspects."
Euromepa S.A.
,
Here, both parties argued and submitted authority in support of their respective positions as to the EPO's receptivity to assistance from U.S. courts. Schlich pointed to
Akebia Therapeutics, Inc.
v.
FibroGen, Inc.
,
We note that the district court considered the relevance of the discovery sought as part of its consideration of the
*52
EPO's receptivity to assistance from U.S. courts under the second
Intel
factor. Broad argues that relevance should instead be treated as a threshold statutory factor that the applicant must prove before the court exercises its discretion. We have not had the opportunity to address the role of relevance in the § 1782 analysis since
Intel
was decided, but the Second Circuit has stated that the statutory requirement prescribing that information be "for use" in a foreign proceeding incorporates a relevance requirement.
See
Certain Funds, Accounts and/or Inv. Vehicles
,
However, even when a discovery request is sufficiently relevant to be deemed "for use" in a foreign proceeding, there is nothing that prevents district courts from considering relevancy under the discretionary
Intel
factors, including the second factor, which focuses on the "nature of the foreign tribunal, the character of the proceedings underway abroad, and the receptivity of the foreign government or the court or agency abroad to U.S. federal-court judicial assistance."
Intel Corp.
,
Here, although the information sought by Schlich may have been relevant to the EPO opposition proceeding in a general sense, the district court concluded that limitations on the EPO's jurisdiction to consider inventorship rendered it irrelevant. Accordingly, although the district court treated as "undisputed" Schlich's satisfaction of the "for use" statutory requirement, it was well within its discretion to conclude that the second discretionary factor weighed against ordering discovery because the information sought was irrelevant due to the nature of the proceedings before the EPO, and to deny the discovery request based on that conclusion.
*53 III. Conclusion
For the reasons stated above, we conclude that the district court did not misapply the law in denying the requested discovery under § 1782. Based on its finding that the requested discovery would be irrelevant under the second Intel factor and, thus, that the EPO would be unreceptive to that information, the district court did not abuse its discretion. 9 Furthermore, the district court also ordered supplemental briefing to better apprehend the issues before it and showed foresight and restraint in denying without prejudice pending further developments. We thus affirm the district court's order denying discovery under § 1782.
Affirmed .
The district court of the district in which a person resides or is found may order him to give his testimony or statement or to produce a document or other thing for use in a proceeding in a foreign or international tribunal, including criminal investigations conducted before formal accusation. The order may be made pursuant to a letter rogatory issued, or request made, by a foreign or international tribunal or upon the application of any interested person and may direct that the testimony or statement be given, or the document or other thing be produced, before a person appointed by the court.
An opposition proceeding before the EPO "allows any member of the public to challenge a European patent within nine months of its grant."
A provisional patent application "serves as a placeholder with the [U.S.P.T.O.] that grants the applicant 'the benefit of priority' for an invention,"
United States
v.
Camick
,
A PCT application, also known as an international patent application, allows an applicant to simultaneously seek protection for an invention in over 150 countries. See World Intellectual Prop. Org., http://www.wipo.int/pct/en/ (last visited June 8, 2018).
The supplemental briefing order directed the parties to address the EPO's receptivity issue, including the following questions: "(1) why the Kowalski affidavit was submitted to the EPO, (2) whether the EPO has authority or jurisdiction to resolve issues of inventorship in the pending proceeding, and (3) if it does not have such authority or jurisdiction, how the EPO would be receptive to this Court's assistance in providing the requested discovery."
We note that although the district court and the parties all make reference to these four requirements as the "statutory requirements" of § 1782, some circuits only consider the first three of these as statutory requirements.
See
,
e.g.
,
Certain Funds, Accounts and/or Inv. Vehicles
v.
KPMG, L.L.P.
,
The court's memorandum and order stated that "Broad" had not demonstrated that the discovery sought was relevant, but it is evident that the court was referring to "Schlich."
"Authoritative proof" has been defined as proof that provides "clear directive" of something, such as proof "embodied in a forum country's judicial, executive or legislative declarations."
Euromepa S.A.
v.
R. Esmerian, Inc.
,
We decline Broad's invitation to consider the EPO's preliminary and non-binding opinion of April 13, 2017 -- which stated that the discovery proceedings underlying this appeal "are based on issues of entitlement in so far as they attempt to put into question the inventorship as allocated by the distribution of the contribution by Mr. Kowalski," and that "the EPO has no power to resolve ... matters of entitlement" -- because it was issued after the district court had rendered its decision and, thus, was not considered or relied on by the district court.
Reference
- Full Case Name
- In RE: Application of George W. SCHLICH George W. Schlich, Petitioner, Appellant, v. the Broad Institute, Inc., Feng Zhang, Naomi Habib, and Le Cong, Respondents, Appellees.
- Cited By
- 17 cases
- Status
- Published