Case 1:15-cv-00703-GMS Document 40 Filed 10/21/15 Page 1 of 21 PageID #: 1336

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF DELAWARE

CERAMEDIC LLC,
Plaintiff,
v.

C.A. No. 15-703-GMS

DEPUY ORTHOPAEDICS, INC. and

CERAMTEC GMBH,

PUBLIC VERSION

Defendants.

CERAMEDIC LLCS OPPOSITION TO DEFENDANTS

EMERGENCY MOTION TO STAY

Brian E. Farnan (Bar No. 4089)

FARNAN LLP
919 North Market Street
12th Floor
Wilmington, DE 19801
(302) 777-0300 (Telephone)
(302) 777-0301 (Facsimile)
bfarnan@farnanlaw.com
Richard M. Cowell (admitted pro hac vice)
Kevin K. McNish (admitted pro hac vice)
DESMARAIS LLP
230 Park Avenue
New York, NY 10169
(212) 351-3400 (Telephone)
(212) 351-3401 (Facsimile)
rcowell@desmaraisllp.com
kmcnish@desmaraisllp.com
Counsel for Plaintiff CeraMedic LLC
Date: October 6, 2015

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TABLE OF CONTENTS
Page
I.

INTRODUCTION .............................................................................................................. 1

II.

FACTUAL AND PROCEDURAL BACKGROUND........................................................ 1

A.

Background Of The Standstill Agreement .............................................................. 1

B.

After CeraMedic Files Suit In The Delaware Court Of Chancery,

Defendants Remove To Federal Court Instead Of Responding To
CeraMedics Motion To Expedite. ......................................................................... 3

C.

After Defendants Admit Breaching The Standstill Agreement, The Court

Enjoins Defendants Breach. .................................................................................. 4

III.

SUMMARY OF ARGUMENT .......................................................................................... 5

IV.

ARGUMENT ...................................................................................................................... 6

A.

Defendants Lack A Strong Likelihood Of Success On The Merits. ................................... 6

1.

None of Defendants Purported Procedural Defects Establish A

Strong Likelihood of Success On Appeal. .................................................. 6
a.

The Courts Order Was Proper As A Grant Of Summary

Judgment In Favor Of CeraMedic Under Fed. R. Civ. P.
56(f)(3). ........................................................................................... 6

b.

Defendants Never Identified What Discovery Or Evidence

They Might Purportedly Need. ....................................................... 8

c.

No Trial Is Required. ...................................................................... 8

d.

CeramTecs Service Defense Lacks Merit. .................................... 9

e.

The Injunction Satisfies Fed. R. Civ. P. 65(d)(1)(A). ................... 10

2.

DePuys Purported Inability To Control The Third And Fourth

Petitions Does Not Affect CeramTecs Ability To Withdraw Those
Petitions As To The Charted Claims. ....................................................... 11

3.

Defendants Consideration and Policy Defenses Lack Merit. .................. 11

B.

Defendants Have Not Proven Irreparable Harm Without A Stay. ........................ 12

C.

A Stay Will Harm CeraMedic............................................................................... 13

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D.
V.

No Public Interest Supports A Stay. ..................................................................... 14

CONCLUSION ................................................................................................................. 15

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TABLE OF AUTHORITIES
Page(s)
Cases
Anderson v. Davila, 125 F.3d 148 (3d Cir. 1997)........................................................................... 7
Blackberry Corp. v. MobileMedia Ideas LLC, Case IPR2013-00016, Paper 31 (PTAB
Dec. 11, 2013) ................................................................................................................... 13
Bradley v. Pittsburgh Bd. of Educ., 913 F.2d 1064 (3d Cir. 1990) ................................................ 6
Catanzaro v. Masco Corp., 423 F. Supp. 415 (D. Del. 1976), affd per curiam, 575 F.2d
1085 (3d Cir. 1978), cert. denied, 439 U.S. 989 (1978) ..................................................... 9
Hilton v. Braunskill, 481 U.S. 770 (1987) ...................................................................................... 6
Holman v. Warwick Furnace Co., 456 S.E.2d 894 (S.C. 1995) ................................................... 10
IGT v. Aristocrat Techs., Case No. 2:15-cv-00473-GMN-GWF (D.I. 70) (D. Nev. Sept.
18, 2015) ........................................................................................................................... 14
Ringling Bros.Barnum & Bailey Combined Shows, Inc. v. Ringling, 53 A.2d 441 (Del.
1947) ................................................................................................................................. 11
Singer Co. v. P.R. Mallory & Co., 671 F.2d 232 (7th Cir. 1982) .................................................. 15
Smith v. Borough of Dunmore, 516 Fed. Appx. 194 (3d Cir. 2013) (unpublished opinion) ......... 7
United States v. Cianfrani, 573 F.3d 835 (3d Cir. 1978) ................................................................ 6
Wells v. Rockefeller, 728 F.2d 209 (3d Cir. 1984) .......................................................................... 8
Statutes
10 Del. Code 3104(d)(2) .............................................................................................................. 9
35 U.S.C. 316(a)(11) .................................................................................................................. 13
S.C. Code 15-9-245...................................................................................................................... 9
Rules
Fed. R. Civ. P. 4(e)(1) ..................................................................................................................... 9
Fed. R. Civ. P. 4(h)(1)(A) ............................................................................................................... 9
Fed. R. Civ. P. 56(d) ....................................................................................................................... 8
Fed. R. Civ. P. 56(f)(3) ............................................................................................................... 7, 8

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Fed. R. Civ. P. 65(d)(1)(A) ........................................................................................................... 10

S.C. R. Civ. P. 4(d)(3)..................................................................................................................... 9
Treatises
10A WRIGHT & MILLER FED. PRAC. & PROC. 2716 ..................................................................... 8

iv

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I.

INTRODUCTION
Plaintiff CeraMedic LLC (CeraMedic) respectfully requests that the Court deny

Defendants CeramTec GmbH (CeramTec) and DePuy Orthopaedics, Inc. (DePuy)

(collectively, Defendants)s motion to stay the permanent injunction the Court entered
following a teleconference with the parties. (D.I. 28.)
As the parties explained, and the Court recognized, CeramTec breached and caused
DePuy to breach their Standstill Agreement with CeraMedic by filing two petitions for inter
partes review against certain claims of CeraMedics patent with the Patent Trial and Appeal
Board (PTAB). Under the Standstill Agreement, that breach entitled CeraMedic to injunctive
relief requiring Defendants to terminate the breaching petitions as to those claims. Defendants
have delayed the vindication of CeraMedics contractual rights at every turn: removing from the
Delaware Court of Chancery to the District of Delaware, moving to stay here, and even moving
the Third Circuit for a stay before the Court could even consider the instant motion. By delaying
this case, Defendants seek to frustrate the Courts Order and improve their odds of winning a
favorable PTAB decision on the breaching petitions before the final resolution of this case.
The Court should not let Defendants run out the clock on CeraMedics claim for relief
and, accordingly, should deny Defendants motion.
II.

FACTUAL AND PROCEDURAL BACKGROUND

A.

Background Of The Standstill Agreement

On May 1, 2014, CeraMedic and DePuy entered into an agreement to facilitate patent
licensing discussions regarding one of CeraMedics patents, U.S. Patent No. 6,066,584 (the

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584 Patent). (Cowell Decl. Ex. A (the Standstill Agreement).)1 The Standstill Agreement,
which spans just over three pages,

In particular, Standstill Agreement 4 provides as follows:

On June 27, 2014, CeramTec

agreed to be bound by the Standstill Agreement,
in a separate, one-page letter agreement with CeraMedic. (Cowell Decl.
1

Citations to Cowell Decl. refer to the Declaration of Richard M. Cowell, filed

contemporaneously herewith.
2

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Ex. B (the Letter Agreement).) On December 12, 2014, CeramTec, on DePuys behalf, filed
with the PTAB two petitions for inter partes review of the Charted Claims (the First Petition
and the Second Petition):2 one covering Claims 7 and 11, and the other covering Claims 14
and 26.

On
June 8, 2015, CeramTec, on its own and on DePuys behalf, filed another petition for inter partes
review of all of the Charted Claims (the Third Petition). On June 30, 2015, CeramTec, again
on its own and DePuys behalf, filed yet another petition for inter partes review of Charted
Claims 14 and 26 (the Fourth Petition). Only the Third and Fourth Petitions challenges to the
Charted Claims are subject to the Courts injunction. (D.I. 28.)
None of the above facts are in dispute; indeed, Defendants have explicitly acknowledged
that: i) DePuy signed the Standstill Agreement, and CeramTec signed the Letter Agreement as
described above; ii)
and iii) that CeramTec filed the Third and Fourth Petitions
after May 5, 2015. (Sept. 23, 2015 Hrg. Tr. at 11:14-16; D.I. 12 at 13-38.)
B.

After CeraMedic Files Suit In The Delaware Court Of Chancery, Defendants

Remove To Federal Court Instead Of Responding To CeraMedics Motion
To Expedite.

With its Chancery Complaint, CeraMedic filed a motion for expedited proceedings in the
Delaware Court of Chancery.

(Cowell Decl. Ex. C.)

Defendants agreed to respond to

CeraMedics motion to expedite on August 14, 2015. However, instead of responding, on

August 13, 2015, Defendants removed to the Court.
2

(D.I. 1 at 1.)

The Court correctly

The First and Second Petitions are not the subject of this litigation, nor are they subject to the
injunction.
3

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recognized Defendants attempt to exploit its heavy docket to create delay. (Sept. 23, 2015 Hrg.
Tr. at 11:25-12:10.)
C.

After Defendants Admit Breaching The Standstill Agreement, The Court

Enjoins Defendants Breach.

After removal, local and national counsel appeared for both Defendants in the District of
Delaware. (D.I. 14, D.I. 22.) On September 21, 2015, the Court ordered a status teleconference
for all parties to take place on September 23, 2015. (Id.) At the teleconference, attorneys for
both Defendants appeared and made clear they appeared on behalf of both CeramTec and
DePuy. (Sept. 23, 2015 Hrg. Tr. at 1:8-13.) And Defendants counsel admitted that Defendants
breached the Standstill Agreement by filing the Third and Fourth Petitions against the Charted
Claims:

(Sept. 23, 2015 Hrg. Tr. at 11:8-18 (emphasis added).)

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III.

SUMMARY OF ARGUMENT
The immediate stay pending appeal that Defendants seek is an extraordinary remedy to

which Defendants are not entitled.

First, Defendants do not have a strong likelihood of success on the merits. Defendants
admitted breaching the Standstill Agreement during the teleconference with the Court. The
Courts subsequent entry of judgment and a permanent injunction comported with the Federal
Rules of Civil Procedure and due process.
Second, Defendants have not and cannot establish irreparable harm.

Defendants

themselves have argued that they will invalidate the Charted Claims via the First and Second
Petitions, which would render harmless to Defendants any injunction against the Third and
Fourth Petitions as to the Charted Claims.
Third, CeraMedic will suffer irreparable harm if a stay is entered. CeraMedic has already
suffered the prejudice of having to answer one of the breaching petitions.

Further delay

increases the likelihood that CeraMedic will be completely deprived of its rights under the
Standstill Agreement.
Fourth, no valid public interest supports entering a stay. One of Defendants purported
public interests amounts to nothing more than Defendants private interests in avoiding
compliance with a validly-issued injunction. The other public interest that Defendants raise is
the publics purported interest in having the Charted Claims validity adjudicated by the
PTABwhich the PTAB is already doing at Defendants request in the First and Second
Petitions.

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IV.

ARGUMENT
A stay pending an appeal is an extraordinary remedy in the Third Circuit. United

States v. Cianfrani, 573 F.3d 835, 846 (3d Cir. 1978). A movant seeking a stay carries the
burden of establishing its entitlement to a stay based on four factors: (1) whether the stay
applicant has made a strong showing that he is likely to succeed on the merits; (2) whether the
applicant will be irreparably injured absent a stay; (3) whether issuance of the stay will
substantially injure the other parties interested in the proceeding; and (4) where the public
interest lies. Hilton v. Braunskill, 481 U.S. 770, 776 (1987).
A.

Defendants Lack A Strong Likelihood Of Success On The Merits.

First and foremost, Defendants admitted during the teleconference that they breached the
Standstill Agreement. (Sept. 23, 2015 Hrg. Tr. at 11:8-18, 16:15-18.) That admission alone
precludes Defendants from establishing that they have a strong likelihood of prevailing on the
merits. Defendants procedural arguments are also unavailing. The Courts Order lacks any
procedural defects that warrant reversal, much less establish Defendants purported strong
likelihood of success.
1.

None of Defendants Purported Procedural Defects Establish A

Strong Likelihood of Success On Appeal.

a.

The Courts Order Was Proper As A Grant Of Summary

Judgment In Favor Of CeraMedic Under Fed. R. Civ. P.
56(f)(3).

Defendants argue that the Courts injunction was purportedly procedurally defective
because CeraMedic did not file a dispositive motion, nor did the parties brief any dispositive
motions. (D.I. 30 at 9-10.) Defendants rely on a single case from twenty-five years ago for the
proposition that motions and briefing are required prior to adjudicating a dispositive motion:
Bradley v. Pittsburgh Bd. of Educ., 913 F.2d 1064, 1069-70 (3d Cir. 1990).
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But in 2010, Fed. R. Civ. P. 56(f)(3) came into effect. Fed. R. Civ. P. 56(f)(3) permits
courts to grant summary judgment sua sponte after 1) giving notice and a reasonable time to
respond; and 2) identifying for the parties material facts that may not be genuinely in dispute.
Id.; see also Smith v. Borough of Dunmore, 516 Fed. Appx. 194 (3d Cir. 2013) (unpublished
opinion). While the Court did not expressly invoke Fed. R. Civ. P. 56(f)(3) in ordering final
relief for CeraMedic, its Order fits squarely within the rubric of Fed. R. Civ. P. 56(f)(3).
With respect to the notice provision of Fed. R. Civ. P. 56(f)(3), the Court gave prior
notice of the September 23, 2015 teleconference on September 21, 2015. (Oral Order of Sept.
21, 2015.) Whatever notice issues they raise, Defendants reliance on Anderson v. Davila, 125
F.3d 148, 156-57 (3d Cir. 1997) is misplaced: the Anderson court stated that we ordinarily do
not vacate a permanent injunction [for purported lack of notice] if the party appealing the
judgment is unable to show prejudice. Id. at 158. Defendants cannot show prejudice here: they
had a full opportunity to argue the merits of their case. When given that opportunity, Defendants
a) admitted their breach of the Standstill Agreement; b) admitted that Defendants and their
counsel failed to understand the Standstill Agreements one-year period provision; and c)
admitted that their only defenses were failure of consideration and unenforceability, which the
Court correctly rejected. (Sept. 23 Hrg. Tr. at 11:8-18, 12:11-13:1, 16:15-18.) Defendants may
not have made the most of their opportunity to argue the merits, but they did have a meaningful
opportunity to argue their case. The Court also identified the facts that were not in genuine
dispute: Defendants breached the Standstill Agreement and adequate consideration existed for
the Standstill Agreement as to both Defendants. (Sept. 23 Hrg. Tr. at 11:8-18, 12:11-13:1,
16:15-18.)

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The Courts injunction Order is sustainable as a sua sponte grant of summary judgment
under Fed. R. Civ. P. 56(f)(3) in favor of CeraMedic. Because the Court effectively decided this
case via summary judgment, the Third Circuit, to whom Defendants appealed, can uphold that
summary judgment for any reason supported by the record developed in the Court. Wells v.
Rockefeller, 728 F.2d 209, 215 (3d Cir. 1984) (affirming grant of summary judgment on different
grounds than those employed by district court); 10A WRIGHT & MILLER FED. PRAC. & PROC.
2716 (The appellate court does not have to affirm a decision on a Rule 56 motion for the same
reasons that persuaded the court below to grant the motion.) That further erodes Defendants
claim that they have a strong likelihood of prevailing on appeal.

b.

Defendants Never Identified What Discovery Or Evidence

They Might Purportedly Need.

Defendants complain that they did not have the opportunity to conduct discovery or
present evidence on the merits of CeraMedics claims. (D.I. 30 at 9.) But Defendants still have
not identified what, if any discovery they would have sought or evidence they would have
presented to support their defenses of a purported lack of consideration or enforceability.
Defendants did not submit any affidavits or declarations under Fed. R. Civ. P. 56(d) indicating
what, if any, additional facts were purportedly essential to justify [their] opposition to the entry
of summary judgment. In any event, Defendants had the opportunity to present those defenses at
the teleconference, as discussed above. (Sept. 23 Hrg. Tr. at 11:8-18, 12:11-13:1, 16:15-18.)
Defendants cannot show prejudice.

c.

No Trial Is Required.

As shown above, the Courts Order can be construed as a grant of summary judgment
under Fed. R. Civ. P. 56(f)(3). Defendants are not entitled to trial, nor is a trial necessary,
because summary judgment is legally sufficient to adjudicate a claim for relief if there is no
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genuine issue of material fact. See Catanzaro v. Masco Corp., 423 F. Supp. 415, 442 (D. Del.
1976), affd per curiam, 575 F.2d 1085 (3d Cir. 1978), cert. denied, 439 U.S. 989 (1978).

d.

CeramTecs Service Defense Lacks Merit.

CeraMedic properly served CeramTec in the Delaware Court of Chancery and again in
the District of Delaware.3 First, while this case was in the Delaware Court of Chancery,
CeraMedic personally served CeramTec North America Corp. (CTNA), a South Carolina-based
wholly-owned subsidiary of CeramTec, and the general agent of CeramTec in the United States.
Under Delaware law, if service is sufficient under the law of the state where service is made, that
service is legally sufficient. 10 Del. Code 3104(d)(2). Personal service on a general agent
constitutes sufficient service on the principal under South Carolina law. S.C. R. Civ. P. 4(d)(3).
Under Delaware and South Carolina law, CeraMedics personal service of CTNA sufficed to
effect service on CTNAs principal, CeramTec.
Second, CeraMedic also properly served CeramTec post-removal through the South
Carolina Secretary of State. Under Fed. R. Civ. P. 4(h)(1)(A), service may be made on a
corporate entity in the manner prescribed by Rule 4(e)(1) for serving an individual. In turn,
Rule 4(e)(1) permits service to be made following state law for serving a summons in an action
brought in courts of general jurisdiction in the state where the district court is located or where
service is made.

CeraMedics service on CeramTec is proper if it complies with either

Delaware or South Carolina law. South Carolina allows service on an unauthorized foreign
corporation doing business in South Carolina via the South Carolina Secretary of State. S.C.
Code 15-9-245.

Under South Carolina law, CeraMedics service was effective when

CeraMedics legal and factual arguments on service are described in greater detail in
CeraMedics opposition to CeramTecs motion to dismiss for insufficient service. (D.I. 18.) The
Court denied CeramTecs motion as premature (D.I. 27), but could have denied it on the merits
as well.
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CeraMedic served the Secretary of State. Holman v. Warwick Furnace Co., 456 S.E.2d 894, 896
(S.C. 1995) (We hold that service pursuant to 15-9-245 is effective upon delivery of the
[Summons and Complaint] to the Secretary of State.) CeraMedic served CeramTec via the
Secretary of State before the teleconference. (D.I. 26-1 (Proof of Service).)
Finally, CeramTecs extensive involvement in this litigation indicates that CeramTec has
received sufficient notice of this proceeding to satisfy due process, the entire point of the Federal
Rules service of process requirement. CeramTec submitted to personal jurisdiction in both
Delaware Courts (Letter Agreement; Standstill Agreement 5, 12), voluntarily appeared
through counsel at the teleconference (Sept. 23 Hrg. Tr. at 1:8-13), argued the merits of this case
at the teleconference (id. at 11:8-18, 12:11-13:1, 16:15-18), and filed an appeal.

e.

The Injunction Satisfies Fed. R. Civ. P. 65(d)(1)(A).

Defendants allege that the injunction Order does not state the reasons the injunction
issued and that the injunction Order therefore purportedly does not comply with Fed. R. Civ. P.
65(d)(1)(A). (D.I. 30 at 10.) But the injunction Order states, As stated on the record during the
teleconference with the Parties and Court this day, September 23, 2015, it is hereby ordered.
(D.I. 28.) That Order makes clear the reasons for the injunction: the record of the teleconference,
during which Defendants admitted their breach of the Standstill Agreement, and during which
the Court found their defenses insufficient. (Sept. 23 Hrg. Tr. at 11:8-18, 16:15-18.) The
injunction states that the teleconference record provides the reasons for the injunction.
Defendants even acknowledged to the Third Circuit that the Court entered the injunction based
on their breach of contract. (Cowell Decl. Ex. D (Defs. Mot. To Third Circuit For Stay) at 12
(Appellees breach of contract claim (upon which the Orders grant of relief is wholly
based).).) The Court should reject Defendants elevation of form over substance.

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2.

DePuys Purported Inability To Control The Third And Fourth

Petitions Does Not Affect CeramTecs Ability To Withdraw Those
Petitions As To The Charted Claims.

Defendants claim that the injunction is improper because it requires DePuy to withdraw
inter partes review petitions that DePuy purportedly does not control. (D.I. 30 at 10.) But the
Court has nothing but Defendants word that DePuy cannot control the Third and Fourth
Petitions. And even assuming what Defendants say is true, CeramTec, as the named Petitioner
that filed the Third and Fourth Petitions, can effect a termination of the breaching petitions as to
the Charted Claims as the injunction requires, regardless of DePuys purported inability to
terminate them.
3.

Defendants Consideration and Policy Defenses Lack Merit.

Under hornbook contract law and under governing Delaware state law, mutual promises
constitute adequate consideration under a contract. E.g., Ringling Bros.Barnum & Bailey
Combined Shows, Inc. v. Ringling, 53 A.2d 441, 447 (Del. 1947).

Defendants claim that as to CeramTec, the Standstill Agreement lacks consideration.

But CeramTec ignores the numerous other promises that CeraMedic made to
CeramTec and DePuy under the Standstill Agreement, which promises constitute adequate
consideration to CeramTec.

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The
exchange of mutual promises in the Standstill Agremeent and the Letter Agreement provided
adequate consideration to create a valid and enforceable contract.
Public policy does not bar the enforcement of the Standstill Agreement. Whatever the
nature of Defendants purported public policy interests that favors adjudication of patent validity
disputes by the PTAB (D.I. 30 at 17-18), the Standstill Agreement does not offend that public
policy.

Defendants public policy defense lacks merit.

B.

Defendants Have Not Proven Irreparable Harm Without A Stay.

Defendants cannot establish that they will suffer irreparable harm absent a stay. The
Court inquired as to what prejudice Defendants would suffer if an injunction were granted,

12

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specifically tailored the injunction to affect only the Charted Claims, and thus avoided the only
prejudice Defendants identified: the termination of the Third and Fourth Petitions as to claims
other than Charted Claims. (Id. at 15:2-10.) Defendants now argue that they may lose the Third
and Fourth Petitions challenges to the Charted Claims forever if the injunction is not stayed.
(D.I. 30 at 12-13.) But that would not work irreparable harm on Defendants. Defendants remain
free to challenge the Charted Claims through the First and Second Petition, currently pending
with the PTAB. And, as Defendants themselves have argued, the PTAB may invalidate the
Charted Claims in the First and Second Petitions, which are not subject to the injunction. (Sept.
23 Hrg. Tr. at 6:21-24.) Thus, any prejudice to Defendants is speculative at best.
C.

A Stay Will Harm CeraMedic.

The longer this litigation drags out without an injunction in place, the more prejudice
there is to CeraMedic and the more likely it is that the PTAB will institute trial4 and adjudicate
the validity of the Third and Fourth Petitions. The PTAB must make a final decision on the
validity of the Charted Claims within a year of any institution decision, which institution
decisions are expected on the Third Petition in December 2015 and on the Fourth Petition in
January 2016. 35 U.S.C. 316(a)(11). An injunction after an adverse final decision would be
worthless to CeraMedic.5

More pressingly, CeraMedic has already had to respond to the

breaching Third Petition.

(Cowell Decl. Ex. F (CeraMedics Patent Owner Preliminary

The PTABs most recent statistics have indicated that the PTAB institutes trial on
approximately 73% of petitions for inter partes review. (Cowell Decl. Ex. E (Patent Trial and
Appeal Board Statistics (8/31/2015) at 7 (1,591 granted institutions and joinders out of 2,193
institution decisions).)
5
A late injunction before a final written decision would also be worthless to CeraMedic. The
PTAB claims the authority to continue an instituted inter partes review proceeding even if the
petitioner ceases its participation in the proceeding. E.g., Blackberry Corp. v. MobileMedia
Ideas LLC, Case IPR2013-00016, Paper 31, slip op. at 3 (PTAB Dec. 11, 2013) (Cowell Decl.
Ex. G).
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Response).) CeraMedic will also have to respond to the breaching Fourth Petition by October
18, 2015, mere days away.
Further, unlike in IGT v. Aristocrat Techs., Case No. 2:15-cv-00473-GMN-GWF (D.I.
70) (D. Nev. Sept. 18, 2015) (D.I. 30 Ex. 5), Defendants have already filed breaching petitions
for inter partes review instead of merely threatening to do so. (D.I. 30 Ex. 5 at 7; see also
Cowell Decl. Ex. H (Opening Brief for IGT), at 6 (IGT expects that Aristocrat will file a
petition for inter partes review (IPR) or a reexamination proceeding in the Patent Office.).)

D.

No Public Interest Supports A Stay.

Defendants argue that [t]here is no valid public policy interest in enforcing the Courts
Order under the purportedly extraordinary circumstances of this case. (D.I. 30 at 17-18) But
that argument improperly attempts to shift Defendants burden in seeking a stay to CeraMedic.
Defendants, who have the burden of establishing that they are entitled to the relief they seek,
must show that there is a valid public policy interest favoring a stay. Moreover, the first
purportedly public interest Defendants raise is simply Defendants private interests in delaying
or avoiding compliance with a substantively and procedurally proper injunction.

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Defendants also claim that the public purportedly has an interest in the PTAB
determining the validity of the 584 Patent that weighs against an injunction. (D.I. 30 at 17-18.)
But CeramTec, on its own and on DePuys behalf, filed two petitions for inter partes review that
are neither the subjects of this litigation nor the subjects of the injunction: the First Petition and
the Second Petition. (D.I. 30 at 5.) The First Petition and the Second Petition include challenges
to each of the Charted Claims. (Id.) Because the First Petition and the Second Petition are not
subject to the injunction (or even the subject of CeraMedics complaint), the PTAB will still
adjudicate the validity of the Charted Claims even if the Court denies Defendants extraordinary
stays. Denying Defendants motion and permitting the injunction to remain in force would not
violate the public interest that Defendants claim.
Finally, Defendants reliance on Singer Co. v. P.R. Mallory & Co., 671 F.2d 232, 235
(7th Cir. 1982) is misplaced. In Singer, the court refused to enforce an injunction preventing a
patentee from seeking a reissue of its own patent. Singer Co., 671 F.2d at 236. Singers public
policy violation lay in barring the patentee from using the Patent Office to assess its own
patents validity before engaging in infringement litigation. Id. Singers narrow public policy
interest does not extend to the conduct of contract-breaching serial inter partes review
petitioners.
V.

CONCLUSION
CeraMedic requests that the Court deny Defendants motion to stay.

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Case 1:15-cv-00703-GMS Document 40 Filed 10/21/15 Page 21 of 21 PageID #: 1356

Dated: October 6, 2015

Respectfully submitted,
/s/ Brian E. Farnan
Brian E. Farnan (Bar No. 4089)
FARNAN LLP
919 North Market Street
12th Floor
Wilmington, DE 19801
(302) 777-0300 (Telephone)
(302) 777-0301 (Facsimile)
bfarnan@farnanlaw.com
Richard M. Cowell (admitted pro hac vice)
Kevin K. McNish (admitted pro hac vice)
DESMARAIS LLP
230 Park Avenue
New York, NY 10169
(212) 351-3400 (Telephone)
(212) 351-3401 (Facsimile)
rcowell@desmaraisllp.com
kmcnish@desmaraisllp.com
Counsel for Plaintiff CeraMedic LLC

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