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1 Evan R. Chesler (N.Y. Bar No. 1475722) (pro hac vice)


echesler@cravath.com
2 CRAVATH, SWAINE & MOORE LLP
825 Eighth Avenue
3 New York, NY 10019
Telephone: (212) 474-1000
4 Facsimile: (212) 474-3700
5 David A. Nelson (Ill. Bar No. 6209623) (pro hac vice)
davenelson@quinnemanuel.com
6 QUINN EMANUEL URQUHART & SULLIVAN, LLP
500 West Madison St., Suite 2450
7 Chicago, Illinois 60661
Telephone: (312) 705-7400
8 Facsimile: (312) 705-7401
9 Karen P. Hewitt (SBN 145309)
kphewitt@jonesday.com
10 JONES DAY
4655 Executive Drive, Suite 1500
11 San Diego, California 92121
Telephone: (858) 314-1200
12 Facsimile: (858) 345-3178
13 [Additional counsel identified on signature page]
14 Attorneys for Defendant and Counterclaim-Plaintiff
QUALCOMM INCORPORATED
15
16 UNITED STATES DISTRICT COURT
17 SOUTHERN DISTRICT OF CALIFORNIA
18
IN RE: QUALCOMM LITIGATION No. 3:17-CV-0108-GPC-MDD
19
20 QUALCOMM INCORPORATED’S
REPLY IN FURTHER SUPPORT
21 OF ITS MOTION FOR PARTIAL
DISMISSAL OF APPLE’S FIRST
22 AMENDED COMPLAINT AND
THE CMS’ COUNTERCLAIMS
23 Judge: Hon. Gonzalo P. Curiel
24 Courtroom: 2D
25 Date: October 26, 2018
Time: 1:30 P.M.
26
27
28

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1 INTRODUCTION
2 Qualcomm seeks dismissal of 56 claims: Apple’s and the CMs’
3 declaratory judgment claims for invalidity, non-infringement, determination of
4 a FRAND royalty and exhaustion with respect to the nine patents-in-suit (the
5 “Patent DJs”). That is the only relief Qualcomm seeks. As a matter of well-
6 settled law, those claims have been mooted by Qualcomm’s covenant not to
7 sue. Apple’s1 Opposition focuses almost entirely on other claims that
8 Qualcomm’s Motion does not put at issue. Disputes over issues related to the
9 parties’ other claims and counterclaims—which will be resolved at trial—have
10 no bearing on this Motion.
11 To be clear, Qualcomm’s Motion does not affect the evidence that may
12 be presented to support or rebut those other claims. Both parties will present
13 extensive evidence regarding Qualcomm’s business practices and the value of
14 Qualcomm’s licensed patent portfolio. Qualcomm is in no way “avoiding any
15 discussion of the actual merits” of its patents, as Apple suggests; rather,
16 Qualcomm served reports from fourteen experts addressing dozens of patents.
17 Apple remains free to present evidence about the nine patents-in-suit, if it so
18 chooses. Qualcomm seeks to dismiss only the Patent DJ claims.
19 As explained in Qualcomm’s opening brief, Qualcomm’s broad covenant
20 not to sue removes any threat of infringement claims for the nine patents-in-
21 suit. As a result, this Court does not have jurisdiction over the Patent DJs, and
22 those claims should be dismissed. Apple previously admitted that Qualcomm’s
23 position here is correct: “Qualcomm always has the power to remove the Nine
24 Patents by granting Apple a covenant-not-to-sue pursuant to Super Sack.”
25 (ECF 119 at 18.) Now, faced with Qualcomm’s covenant and Motion, Apple
26 attempts to reverse course. Apple’s three arguments are unpersuasive.
27
28 1
Qualcomm generally refers to Apple and its CMs collectively as “Apple”.

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1 First, Apple argues that resolution of the Patent DJs may be relevant to
2 other claims in this case. But declaratory judgment claims are not justiciable
3 when they merely would be “opinion[s] advising what the law would be” about
4 issues that may be in some way relevant to other claims; to be justiciable,
5 declaratory judgment claims must “finally and conclusively resolve the
6 underlying controversy”. MedImmune, Inc. v. Genentech, Inc., 549 U.S. 118,
7 127 n.7 (2007). As this Court has already found, a declaratory judgment ruling
8 on nine patents would resolve nothing here. In particular, a ruling as to the nine
9 patents-in-suit would not have any effect on the validity of the license
10 agreements. Qualcomm’s license agreements cover tens of thousands of
11 patents, and the royalties depend only on the volume of sales of licensed
12 devices. The royalties are not based on the enforceability of any one patent, or
13 any nine patents. Removing nine patents from Qualcomm’s patent portfolio
14 does not change the value of the portfolio.
15 Second, Apple argues that Qualcomm’s “carefully worded” covenant
16 does nothing to prevent Qualcomm from “making claims about [the nine]
17 patents to support its demands”. (Apple Opp’n 1.) Specifically, Apple points
18 to Qualcomm’s expert reports responding to Apple’s allegations about the
19 patents-in-suit. But Qualcomm has continued to address those allegations only
20 because the Court has not yet dismissed the Patent DJs. For the avoidance of
21 doubt, if the Court grants this Motion and dismisses the Patent DJs, Qualcomm
22 will not use the nine patents to prove the value of Qualcomm’s patent portfolio
23 and will withdraw its expert reports to the extent they relate to the nine patents.
24 Third, Apple argues that the Patent DJs on exhaustion (Apple’s
25 Count LIX and CMs’ Count LXVII) should not be dismissed because they
26 cover not only the nine patents-in-suit but also all “patents substantially
27 embodied in baseband processor chipsets sold by Qualcomm to Apple’s CMs”.
28 (Apple Opp’n 12.) That is inconsistent with Apple’s and the CMs’ pleadings

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1 and prior filings. The nine patents-in-suit are the only specific patents referred
2 to in the exhaustion counts and the corresponding prayers for relief. Similarly,
3 Apple and the CMs’ pending motion for summary judgment on their exhaustion
4 claims refers, at most, to the nine patents-in-suit. Because Apple’s and the
5 CMs’ exhaustion claims are directed to only the nine patents-in-suit,
6 Qualcomm’s covenant divested the Court of jurisdiction over those claims.
7 Exhaustion is a defense to infringement. Qualcomm has never asserted an
8 infringement claim with respect to the nine patents-in-suit, and now never will.
9 Even under Apple’s new reading—that the exhaustion claims cover all
10 patents substantially embodied in chipsets sold by Qualcomm to the CMs—the
11 claims should still be dismissed as nonjusticiable, because they seek an
12 advisory declaration as to an abstract legal principle. Judge Hayes dismissed a
13 nearly identical claim brought by Broadcom almost a decade ago. Broadcom
14 asked the court to “[d]eclare exhausted the Qualcomm patents that are (or have
15 been) substantially embodied by the chipsets Qualcomm sells”. Broadcom
16 Corp. v. Qualcomm, Inc., 2009 WL 684835, at *5 (S.D. Cal. Mar. 12, 2009).
17 Judge Hayes dismissed that claim because Broadcom, like Apple here under its
18 new reading, failed to identify in its complaint “with any specificity the patents
19 which it requests that the Court declare exhausted”. Id. at *6.
20 Apple’s attempt to complicate this straightforward motion, which relies
21 on settled law, should be rejected, and Apple’s and the CMs’ 56 declaratory
22 judgment claims concerning the nine patents-in-suit should be dismissed.2
23 ARGUMENT
24 I. Apple Previously Has Admitted that the Court Lacks Jurisdiction
over the Patent DJs Under These Circumstances.
25
As Qualcomm explained in its opening brief, the broad covenant
26
Qualcomm gave to Apple and the CMs divests this Court of jurisdiction over
27
2
28 Apple and the CMs do not oppose dismissal of their request for declaratory
judgment of a FRAND rate for the patents-in-suit. (Apple Opp’n 21.)

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1 claims for declarations of noninfringement, invalidity, FRAND rates and


2 unenforceability due to exhaustion as to the nine patents-in-suit. The law is
3 clear. A covenant not to sue removes jurisdiction over patent-in-suit claims.
4 See Super Sack, 57 F.3d at 1058 (“[A] patentee defending against an action for
5 a declaratory judgment of invalidity can divest the trial court of jurisdiction
6 over the case by filing a covenant not to assert the patent at issue against the
7 putative infringer with respect to any of its past, present, or future acts.”),
8 overruled on other grounds, MedImmune, 549 U.S. at 126-27. Similarly,
9 “patent exhaustion is a defense to patent infringement, not a cause of action”;
10 thus, with no threat of infringement, there can be no exhaustion controversy.
11 ExcelStor Tech., Inc. v. Papst Licensing GMBH & Co. KG, 541 F.3d 1373,
12 1376 (Fed. Cir. 2008). Because there can be no infringement claims as to the
13 nine patents, the 56 Patent DJs must be dismissed.
14 Apple previously agreed with this uncontroversial legal conclusion. In
15 its Complaint, Apple asserted that the Court had jurisdiction over its patent DJ
16 claims because “Qualcomm has not unconditionally promised not to sue Apple,
17 its suppliers, its customers, or its end-users for infringement of any of the
18 Original Patents-in-Suit based on Apple’s past, current, or future products, as
19 one may do pursuant to Super Sack . . . . and [its] progeny.” (Apple First Am.
20 Compl. (“FAC”) ¶ 141.) Apple reiterated that position in its opposition to
21 Qualcomm’s motion regarding the other nine (now dismissed) patents-in-suit:
22 “Qualcomm has not given Apple a covenant-not-to-sue that would permanently
23 moot any claim for infringement, pursuant to Super Sack”. (ECF 119 at 11 n.7
24 (emphasis added).) In Apple’s own words, “Qualcomm always has the power
25 to remove the Nine Patents by granting Apple a covenant-not-to-sue pursuant to
26 Super Sack.” (Id. at 18.) Qualcomm agrees, and it has now done so.
27 II. Apple’s and the CMs’ Other Claims Have No Bearing on the Court’s
Jurisdiction over the Patent DJs.
28
Apple argues that the parties’ other disputes, including the enforceability
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1 of Qualcomm’s license agreements with the CMs and the amount of royalties
2 owed by the CMs, allow the Court to retain jurisdiction over the Patent DJs.3
3 But that would be true only if resolution of those Patent DJs also would resolve
4 the claims relating to the parties’ broader licensing dispute. (See MTD Order
5 38-39, ECF 167 (reasoning that the CMs must demonstrate that the Court’s
6 ruling would “finally and conclusively resolve the underlying controversy”
7 between the parties).) As this Court already found, when dismissing claims
8 relating to nine other patents last year, resolving individual patent claims would
9 have no impact on the broader disputes in this case.
10 As this Court concluded, the royalties owed by the CMs do not depend
11 on the validity or infringement of any particular patent, “because each
12
13 . Id. at 41;
14 see Verance Corp. v. Digimarc Corp., 2011 WL 2182119, at *6-7 (D. Del. June
15 2, 2011) (invalidity or non-infringement declaration would not eliminate
16 Verance’s obligation to pay royalties because the license agreement did not
17 depend on the patent’s validity; DJ claims dismissed as nonjusticiable). The
18 patents-in-suit are merely nine out of tens of thousands of licensed patents.
19 Rulings as to those nine patents would not invalidate the license agreements or
20 otherwise affect the overall value of Qualcomm’s patent portfolio. As this
21 Court found, “[b]ecause the royalty rates in the SULAs are not contingent on
22 patent invalidity or noninfringement, there is no case or controversy because
23 any declaration of the Nine Additional Patents-in-Suit would not conclusively
24
3
Apple’s Opposition contains many misstatements that do not affect
25 Qualcomm’s Motion but bear mentioning. For example, Apple asserts that
Qualcomm “demanded a royalty for every baseband processor chipset used in
26 every iPhone”. (Apple Opp’n 4.) The plain terms of the CMs’ license
27 agreements apply to licensed devices (e.g., iPhones), not chipsets. Apple also
continues to assert that Lexmark governs Qualcomm’s contract rights pursuant
28 to its license agreements. (Id. at 13-14.) As explained in Qualcomm’s
opposition to Apple’s exhaustion motion, that is incorrect. (ECF 629 at 7-14.)

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1 resolve the dispute regarding royalties owed to Qualcomm.” (MTD Order 44.)
2 Apple’s reliance on Esoterix Genetic Laboratories v. Qiagen Inc. is
3 misplaced. Esoterix does not hold, as Apple suggests, that there is jurisdiction
4 over patent DJ claims whenever a concurrent dispute exists about “whether one
5 party owes another payment under a license agreement”. (Apple Opp’n 11.)
6 Esoterix granted to Qiagen a covenant not to sue as to all of the patents upon
7 which Qiagen’s obligation to pay royalties depended, while purporting to
8 reserve the right to enforce Esoterix’s license agreement with Qiagen as to the
9 very patents that were the subject of the covenant.4 2016 WL 4555613 (D.
10 Mass. Aug. 31, 2016), at *5. Esoterix moved to dismiss all of Qiagen’s
11 counterclaims, including claims seeking a declaration that no royalties were
12 owed under the license agreement because all of the relevant patents were
13 invalid. Id. Finding that the Qiagen’s royalty obligations under the license
14 agreement “depend[ed] on whether the underlying patents are valid or invalid”,
15 the Court refused to dismiss Qiagen’s claims. Id. at *3, *5. Esoterix is thus
16 distinguishable on several grounds: (i) Qualcomm’s covenant and Apple’s
17 Patent DJs concern only nine patents, not all of the tens of thousands of patents
18 licensed to the CMs; (ii) Qualcomm is not seeking to dismiss Apple’s other
19 claims as to the CMs’ license agreements; and (iii) this Court already has found
20 that the license agreements do not depend on the validity of a particular patent.
21 Apple likewise misconstrues MedImmune, 549 U.S. 118, claiming that
22 the Supreme Court found a “live contract dispute where the validity of the
23 underlying patent was challenged”. (Apple Opp’n 18.) There is (and will still
24 be) a live contract dispute here too—but not a live dispute about the nine
25 patents. As this Court previously noted, the patent claims and contract claims
26
4
27 The license agreement gave Qiagen rights to five patents for the
manufacture of certain testing kits. Qiagen’s royalty obligation as to those
28 patents ran only so long as the sale of Qiagen’s kits infringed a “valid patent
claim under one of the licensed patents”. (Carlson Decl. Ex. 1 ¶¶ 13-14.)

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1 in MedImmune were linked because the license agreement in MedImmune


2 explicitly conditioned the royalty payments for the two licensed patents on the
3 validity of those patents. MedImmune, 549 U.S. at 121-22; MTD Order 42. By
4 contrast, Qualcomm’s license agreements with the CMs contain no such
5 condition on the royalty payments.
6 Courts routinely dismiss patent claims based on covenants not to sue,
7 even where there is a dispute over royalties due under a license agreement. For
8 example, following the Supreme Court’s remand in MedImmune, Genentech
9 granted MedImmune a covenant not to sue MedImmune on all but one of the
10 licensed patent’s claims. MedImmune, Inc. v. Genentech, Inc., 535 F. Supp. 2d
11 1000, 1003 (C.D. Cal. 2008). The district court held that the covenant
12 extinguished the Court’s subject-matter jurisdiction over the DJ claims
13 regarding the patent claims covered by the covenant, even though there was a
14 dispute about the royalties owed under the license agreement. Id. at 1003,
15 1004-10. In Powertech Technology, Inc. v. Tessera, Inc., the plaintiff-licensee
16 sought declaratory judgment of non-infringement and invalidity as to a patent
17 the defendant had previously sought to enforce. 2013 WL 12324116, at *6
18 (N.D. Cal. Apr. 13, 2013). The defendant covenanted not to sue the plaintiff for
19 infringement and moved to dismiss the DJ claims. Id. Despite the existence, in
20 a separate action, of a dispute over royalty payments owed under the parties’
21 license agreement, the court dismissed the patent DJ claims for lack of
22 jurisdiction because the royalty payments did not depend on whether the patents
23 were valid and infringed, and the covenant had eliminated the possibility of any
24 infringement claims. Id. at *17-18. The existence of a dispute about royalties
25 under a license agreement does not provide a jurisdictional hook for patent
26 claims where those claims would not determine the royalties due.
27
28

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III. Qualcomm Will Not Assert the Nine Patents-in-Suit To Demonstrate


1 the Value of Its Portfolio.
2 Apple argues that Qualcomm’s expert reports responding to Apple’s
3 allegations regarding the nine patents-in-suit justify this Court’s continued
4 jurisdiction over the patent claims. But the claims regarding the patents have
5 not yet been dismissed; Qualcomm must defend those claims while awaiting the
6 Court’s ruling. If the Court grants this Motion and dismisses the Patent DJs,
7 Qualcomm will not use the nine patents to prove the value of Qualcomm’s
8 patent portfolio and will withdraw its expert reports to the extent they relate to
9 the nine patents.5 Qualcomm’s covenant is clear and means what it says. To
10 the extent there was any confusion, this clarification should resolve it. Super
11 Sack, 57 F.3d at 1059 (statement of counsel sufficient to moot claims).
12 IV. The Exhaustion Claims, However Construed, Should Be Dismissed.
13 Until Qualcomm filed this Motion, Apple’s position has been that the
14 Patent DJs concerning exhaustion (Apple’s Count LIX and CMs’ Count LXVII)
15 concern only the nine patents-in-suit. Apple’s new theory is that those counts
16 are much broader and cover all “patents substantially embodied in baseband
17 processor chipsets sold by Qualcomm to Apple’s CMs”. (Apple Opp’n 12.) It
18 does not matter which interpretation is correct because the exhaustion claims
19 must be dismissed under either reading.
20 Apple has repeatedly indicated that the exhaustion claims are limited to
21 the nine patents-in-suit. For example, the only specific patents identified in the
22 exhaustion counts are the patents-in-suit. (Apple’s FAC ¶ 592 (seeking a
23 declaration that “any of the Patents-in-Suit . . . are unenforceable as against
24 Apple due to patent exhaustion”) (emphasis added).) The prayers for relief as
25 to those claims similarly refer to only the patents-in-suit.6 Even Apple and the
26 5
Apple argues that “Qualcomm still alleges that Apple and the CMs require
27 a license to the nine patents”. (Apple Opp’n 20.) That is not true. The
covenant expressly forecloses infringement claims as to these patents.
28 6
Apple’s FAC ¶ 156, Prayer G; CMs’ Countercls. ¶ 720, Prayer O.

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1 CMs’ summary judgment motion as to their exhaustion claims refers to only the
2 nine patents-in-suit.7 (ECF 600 at 2 n.1, 13.) Because the exhaustion claims
3 are limited to the nine patents-in-suit, Qualcomm’s covenant divested the Court
4 of jurisdiction. “[P]atent exhaustion is a defense to patent infringement, not a
5 cause of action.” ExcelStor, 541 F.3d at 1376. Qualcomm has not brought an
6 infringement claim regarding the patents-in-suit and will never to do so. There
7 is no claim as to which the defense of exhaustion could be asserted.
8 Apple now contends that the exhaustion Patent DJs “extend beyond just
9 the nine patents-in-suit” to “raise a broader case or controversy ‘regarding the
10 exhaustion of Qualcomm’s patent rights with respect to patents substantially
11 embodied in baseband processor chipsets sold by Qualcomm to Apple’s CMs.’”
12 (Apple Opp’n 2.) Assuming the exhaustion claims addressed that broad,
13 unspecified set of patents, the claims would plainly be nonjusticiable. If the
14 claims are construed as encompassing unspecified patents, then the claims are
15 detached from any facts to which the law of exhaustion could be applied. They
16 seek nothing more than an abstract, advisory ruling as to exhaustion as a
17 principle of law—the paradigm of a nonjusticiable question. A court may not
18 provide “an opinion advising what the law would be upon a hypothetical state
19 of facts”. MedImmune, 549 U.S. at 127 (quotation marks omitted); see
20 Gator.com Corp. v. L.L. Bean, Inc., 398 F.3d 1125, 1132 (9th Cir. 2005)
21 (declining to reach the merits of a mooted appeal because to do so “would run
22 squarely afoul of the Supreme Court’s admonition to avoid advisory opinions
23 on abstract propositions of law”) (quotation marks omitted); MTD Order 34-35
24 (“[L]ack of specificity in identifying precise infringing patents weighs severely
25 against finding declaratory judgment jurisdiction”).
26 7
Apple’s Opposition confirms that its Motion for Summary Judgment with
27 respect to the exhaustion claims should be denied. That motion is either moot
because it is directed to three of the nine patents-in-suit (which must be
28 dismissed), or it should be denied because Apple did not present any evidence
that any other patents are substantially embodied in any Qualcomm chip.
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1 Judge Hayes’s decision in Broadcom is directly on point. Broadcom


2 asked the court to “[d]eclare exhausted the Qualcomm patents that are (or have
3 been) substantially embodied by SULA-licensed handsets (and their
4 components including chipsets), terminating all Qualcomm rights in these
5 patents as applied to these products (and their components, including chipsets).”
6 2009 WL 684835, at *5. Judge Hayes granted Qualcomm’s motion to dismiss
7 “because Broadcom does not identify with any specificity a patent that was
8 substantially embodied in a chipset or handset”. Id. at *6. Similarly, in Veoh
9 Networks, Inc. v. UMG Recordings, Inc., the court dismissed the plaintiffs’
10 declaratory judgment claim regarding an unspecified universe of copyrights.
11 522 F. Supp. 2d 1265 (S.D. Cal. 2007). The court reasoned that “because
12 Plaintiff does not reference any specific copyright . . . the relief requested
13 would necessarily take the form of an advisory opinion”. Id. at 1269.
14 To the extent that Apple argues that there is a controversy with respect to
15 the 93 patents cited by Qualcomm’s experts, that too must fail. Those patents
16 are not mentioned in Apple’s or the CMs’ pleadings and have no bearing on this
17 Motion.8 Apple is free to present evidence concerning those 93 patents at trial,
18 but they are not part of any declaratory judgment claim before this Court.
19 CONCLUSION
20 For the foregoing reasons, the Court should grant Qualcomm’s Motion
21 and dismiss Counts V-XXXI and LIX of Apple’s First Amended Complaint and
22 Counts XIII-XXXIX and LXVII of CMs’ Counterclaims.
23 8
“[I]t is settled that a party invoking federal court jurisdiction must, in the
24 initial pleading, allege sufficient facts to establish the court’s jurisdiction. . . . It
is also settled that a plaintiff must establish jurisdiction independently for each
25 cause of action asserted.” DaimlerChrysler v. United States, 442 F.3d 1313,
1318-19 (Fed. Cir. 2006). Simply put, “‘jurisdiction cannot rest on any ground
26 that is not affirmatively and distinctly set forth [in the complaint]’”. Id. at 1319
27 (quoting Shulthis v. McDougal, 225 U.S. 561, 569 (1912)); see MedImmune,
549 U.S. at 127 (a justiciable declaratory judgment claim exists when “the facts
28 alleged” show “that there is a substantial controversy . . . of sufficient
immediacy and reality to warrant the issuance of a declaratory judgment”).

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1 Dated: October 12, 2018 Respectfully submitted,


2
3 By /s/ Evan R. Chesler
Evan R. Chesler
4
5 CRAVATH, SWAINE & MOORE LLP
Evan R. Chesler (pro hac vice)
6 (N.Y. Bar No. 1475722)
echesler@cravath.com
7 Keith R. Hummel (pro hac vice)
(N.Y. Bar No. 2430668)
8 khummel@cravath.com
Richard J. Stark (pro hac vice)
9 (N.Y. Bar No. 2472603)
rstark@cravath.com
10 Antony L. Ryan (pro hac vice)
(N.Y. Bar No. 2784817)
11 aryan@cravath.com
Gary A. Bornstein (pro hac vice)
12 (N.Y. Bar No. 2916815)
gbornstein@cravath.com
13 J. Wesley Earnhardt (pro hac vice)
(N.Y. Bar No. 4331609)
14 wearnhardt@cravath.com
Yonatan Even (pro hac vice)
15 (N.Y. Bar No. 4339651)
yeven@cravath.com
16 Vanessa A. Lavely (pro hac vice)
(N.Y. Bar No. 4867412)
17 vlavely@cravath.com
Worldwide Plaza
18 825 Eighth Avenue
New York, New York 10019
19 Telephone: (212) 474-1000
Facsimile: (212) 474-3700
20
21
22
23
24
25
26
27
28

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1 QUINN EMANUEL URQUHART &


SULLIVAN, LLP
2 David A. Nelson (pro hac vice)
(Ill. Bar No. 6209623)
3 davenelson@quinnemanuel.com
Stephen Swedlow (pro hac vice)
4 (Ill. Bar No. 6234550)
stephenswedlow@quinnemanuel.com
5 500 West Madison St., Suite 2450
Chicago, Illinois 60661
6 Telephone: (312) 705-7400
Facsimile: (312) 705-7401
7
8 Alexander Rudis (pro hac vice)
(N.Y. Bar No. 4232591)
9 alexanderrudis@quinnemanuel.com
51 Madison Ave., 22nd Floor
10 New York, New York 10010
Telephone: (212) 849-7000
11 Facsimile: (212) 849-7100

12 Sean S. Pak (SBN 219032)


seanpak@quinnemanuel.com
13 50 California St., 22nd Floor
San Francisco, California 94111
14 Telephone: (415) 875-6600
Facsimile: (415) 875-6700
15
16 JONES DAY
17 Karen P. Hewitt (SBN 145309)
kphewitt@jonesday.com
18 Randall E. Kay (SBN 149369)
rekay@jonesday.com
19 4655 Executive Drive, Suite 1500
San Diego, California 92121
20 Telephone: (858) 314-1200
Facsimile: (858) 345-3178
21 Attorneys for Defendant and
22 Counterclaim-Plaintiff
QUALCOMM INCORPORATED
23
24
25
26
27
28

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1 Evan R. Chesler (N.Y. Bar No. 1475722; pro hac vice)


echesler@cravath.com
2 CRAVATH, SWAINE & MOORE LLP
825 Eighth Avenue
3 New York, NY 10019
Telephone: (212) 474-1000
4 Facsimile: (212) 474-3700
5 David A. Nelson (Ill. Bar No. 6209623; pro hac vice)
davenelson@quinnemanuel.com
6 QUINN EMANUEL URQUHART & SULLIVAN, LLP
500 West Madison St., Suite 2450
7 Chicago, Illinois 60661
Telephone: (312) 705-7400
8 Facsimile: (312) 705-7401
9 Karen P. Hewitt (SBN 145309)
kphewitt@jonesday.com
10 Randall E. Kay (SBN 149369)
rekay@jonesday.com
11 JONES DAY
4655 Executive Drive, Suite 1500
12 San Diego, California 92121
Telephone: (858) 314-1200
13 Facsimile: (844) 345-3178
14 [Additional counsel identified on signature page]
15 Attorneys for
QUALCOMM INCORPORATED
16
17 UNITED STATES DISTRICT COURT
18 SOUTHERN DISTRICT OF CALIFORNIA
19 IN RE: QUALCOMM LITIGATION No. 17-cv-0108-GPC-MDD
20 DECLARATION OF
21 JAMES W. CARLSON IN
SUPPORT OF QUALCOMM
22 INCORPORATED’S REPLY IN
23 FURTHER SUPPORT OF ITS
MOTION FOR PARTIAL
24 DISMISSAL OF APPLE’S FIRST
25 AMENDED COMPLAINT AND
THE CMS’ COUNTERCLAIMS
26
27
28
Case No. 17-cv-0108-GPC-MDD
DECLARATION OF JAMES W. CARLSON
Case 3:17-cv-00108-GPC-MDD Document 673-1 Filed 10/12/18 PageID.60849 Page 2 of 3

1 I, James W. Carlson, declare as follows:


2 1. I am a member of the bar of the State of New York and am admitted
3 to appear pro hac vice before this Court in the above-captioned case. I am an
4 associate at Cravath, Swaine & Moore LLP, attorneys for Qualcomm Incorporated
5 (“Qualcomm”).
6 2. I respectfully submit this declaration in support of Qualcomm’s Reply
7 in Further Support of its Motion for Partial Dismissal of Apple’s First Amended
8 Complaint and the CMs’ Counterclaims.
9 3. I have personal knowledge of the facts set forth herein, and if called
10 upon to do so, I could and would testify competently thereto.
11 4. Attached hereto as Exhibit 1 is a true and correct copy of Qiagen
12 Manchester Ltd. and Qiagen Inc.’s Answer, Affirmative Defenses &
13 Counterclaims to Plaintiff's Amended Complaint, Dkt. No. 72, in Esoterix Genetic
14 Laboratories v. Qiagen Inc., 2016 WL 4555613 (D. Mass. Aug. 31, 2016).
15
16 I declare under penalty of perjury under the laws of United States that the
17 foregoing is true and correct.
18
19 Executed on October 12, 2018, in New York, New York.
20
/s/ James W. Carlson
21 James W. Carlson
22
23
24
25
26
27
28
-1- Case No. 17-cv-0108-GPC-MDD
DECLARATION OF JAMES W. CARLSON
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1 Table of Documents

2 Exhibit Pages
3 1 1-26

4
5
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-2- Case No. 17-cv-0108-GPC-MDD
DECLARATION OF JAMES W. CARLSON
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Exhibit 1
Case 3:17-cv-00108-GPC-MDD
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IN THE UNITED STATES DISTRICT COURT


FOR THE DISTRICT OF MASSACHUSETTS

ESOTERIX GENETIC LABORATORIES


LLC,

Plaintiff/Counterclaim-Defendant,
CASE No. 14-CV-13228-ADB
and LABORATORY CORPORATION OF
AMERICA HOLDINGS,

Counterclaim-Defendant

v.

QIAGEN INC. and QIAGEN MANCHESTER,


LTD.,

Defendants/Counterclaim-Plaintiffs.

QIAGEN MANCHESTER LTD. AND QIAGEN INC.’S ANSWER, AFFIRMATIVE


DEFENSES & COUNTERCLAIMS TO PLAINTIFF’S AMENDED COMPLAINT

Defendants and Counterclaim-Plaintiffs QIAGEN Manchester, Ltd. and QIAGEN Inc.

(collectively, “QIAGEN”) submit their Answer, Affirmative Defenses, and Counterclaims in

response to the Amended Complaint of Plaintiff Esoterix Genetic Laboratories LLC (“EGL”).

ANSWER

NATURE OF THE ACTION

1. QIAGEN admits only that this action was styled as one for patent

infringement, violation of the Massachusetts Unfair and Deceptive Trade Practices Act, breach

of contract, and breach of the covenant of good faith and fair dealing. QIAGEN denies all

remaining allegations.

THE PARTIES

2. QIAGEN is without knowledge or information sufficient to form a belief

as to the truth of the allegations in paragraph 2 of the Amended Complaint, and therefore denies

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such allegations, except it is admitted upon information and belief that EGL’s alleged parent,

Laboratory Corporation of America Holdings, has offices at 358 South Main Street, Burlington,

North Carolina.

3. QIAGEN N.V. is no longer a party to this action, (Dkt. No. 25), so there is

no obligation to answer this allegation.

4. QIAGEN GmbH is no longer a party to this action, (Dkt. No. 25), so there

is no obligation to answer this allegation.

5. QIAGEN GmbH is no longer a party to this action, (Dkt. No. 25), so there

is no obligation to answer this allegation.

6. QIAGEN North American Holdings, Inc. is no longer a party to this

action, (Dkt. No. 25), so there is no obligation to answer this allegation.

7. QIAGEN North American Holdings, Inc. is no longer a party to this

action, (Dkt. No. 25), so therefore there is no obligation to answer this allegation.

8. QIAGEN North American Holdings, Inc. is no longer a party to this

action, (Dkt. No. 25), so therefore there is no obligation to answer this allegation.

9. Admitted.

10. Admitted.

11. Denied.

12. Admitted.

13. Denied.

14. Denied.

2
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JURISDICTION, VENUE AND GOVERNING LAW

15. QIAGEN admits only that the quote is in paragraph 10(g) of the 2008

license agreement currently between EGL and QIAGEN Manchester (the “License Agreement”).

To the extent there are other allegations, they are denied.

16. Admitted.

17. Plaintiff’s conclusions regarding venue and jurisdiction are legal

conclusions to which no response is required. Defendants deny the remaining averments.

THE FACTS

18. QIAGEN admits that there is a document titled “License Agreement”

between non-party Genzyme Corporation and non-party DxS from 2008. QIAGEN refers to that

document and denies all remaining allegations.

19. QIAGEN admits that certain EGFR mutations are predictive of the

efficacy of certain chemotherapeutic treatments for lung cancer and other diseases.

20. QIAGEN admits only that to the extent there are any rights or obligations

under the License Agreement, they were assumed by QIAGEN Manchester, and denies all

remaining allegations.

21. QIAGEN is without knowledge or information sufficient to form a belief

as to the truth of the allegations in paragraph 21 of the Amended Complaint, and therefore denies

such allegations.

22. QIAGEN is without knowledge or information sufficient to form a belief

as to the truth of the allegations in paragraph 22 of the Amended Complaint, and therefore denies

such allegations.

3
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23. QIAGEN is without knowledge or information sufficient to form a belief

as to the truth of the allegations in paragraph 23 of the Amended Complaint, and therefore denies

such allegations.

24. These allegations contain legal conclusions to which no response is

required. To the extent the allegations purport to be factual, QIAGEN is without knowledge or

information sufficient to form a belief as to the truth of the allegations, and therefore denies such

allegations.

25. QIAGEN admits only that the License Agreement purports to grant a non-

exclusive sublicense to the Patent Rights, and denies all remaining allegations.

26. Denied.

27. QIAGEN admits only that the quoted language appears in the License

Agreement, but QIAGEN refers to the document itself and denies any averment about it.

28. QIAGEN admits only that the quoted language appears in the License

Agreement, but QIAGEN refers to the document itself and denies any averment about it.

29. QIAGEN denies the allegation and refers to Section 1.9 of the License

Agreement.

30. Denied.

31. QIAGEN denies the allegation and edited quotation, and refers to Section

2.1 of the License Agreement.

32. Denied.

33. Denied.

34. QIAGEN admits only that QIAGEN paid royalties to EGL and its

predecessors during the term of the License Agreement, and denies all remaining allegations.

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35. Denied.

36. Denied.

37. QIAGEN admits only that it obtained a regulatory approval for its EGFR

test kit in July 2013, and denies all remaining allegations.

38. Denied.

39. Denied.

40. QIAGEN admits only that a very small percentage of its Test Kits were

sold to third parties located in Massachusetts, and denies all remaining allegations.

41. QIAGEN admits only that QIAGEN has communicated with EGL and

LabCorp regarding the License Agreement, and denies all remaining allegations.

42. Admitted.

43. Denied.

44. Denied.

COUNT I

PATENT INFRINGEMENT

45. QIAGEN incorporates by reference its responses to paragraphs 1 through

44 as if fully set forth herein.

46. In light of the Court’s September 25, 2015 Memorandum and Order

dismissing EGL’s claims for patent infringement, QIAGEN need not respond to this allegation.

47. In light of the Court’s September 25, 2015 Memorandum and Order

dismissing EGL’s claims for patent infringement, QIAGEN need not respond to this allegation.

48. In light of the Court’s September 25, 2015 Memorandum and Order

dismissing EGL’s claims for patent infringement, QIAGEN need not respond to this allegation.

5
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49. In light of the Court’s September 25, 2015 Memorandum and Order

dismissing EGL’s claims for patent infringement, QIAGEN need not respond to this allegation.

50. In light of the Court’s September 25, 2015 Memorandum and Order

dismissing EGL’s claims for patent infringement, QIAGEN need not respond to this allegation.

51. In light of the Court’s September 25, 2015 Memorandum and Order

dismissing EGL’s claims for patent infringement, QIAGEN need not respond to this allegation.

52. In light of the Court’s September 25, 2015 Memorandum and Order

dismissing EGL’s claims for patent infringement, QIAGEN need not respond to this allegation.

53. In light of the Court’s September 25, 2015 Memorandum and Order

dismissing EGL’s claims for patent infringement, QIAGEN need not respond to this allegation.

54. In light of the Court’s September 25, 2015 Memorandum and Order

dismissing EGL’s claims for patent infringement, QIAGEN need not respond to this allegation.

55. In light of the Court’s September 25, 2015 Memorandum and Order

dismissing EGL’s claims for patent infringement, QIAGEN need not respond to this allegation.

56. In light of the Court’s September 25, 2015 Memorandum and Order

dismissing EGL’s claims for patent infringement, QIAGEN need not respond to this allegation.

57. In light of the Court’s September 25, 2015 Memorandum and Order

dismissing EGL’s claims for patent infringement, QIAGEN need not respond to this allegation.

58. In light of the Court’s September 25, 2015 Memorandum and Order

dismissing EGL’s claims for patent infringement, QIAGEN need not respond to this allegation.

COUNT II

VIOLATION OF MASSACHUSETTS GENERAL LAWS CHAPTER 93A

59. QIAGEN incorporates by reference its responses to paragraphs 1 through

58 as if fully set forth herein.

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60. Admitted.

61. Denied.

62. Denied.

63. Denied.

64. Denied.

65. Denied.

66. Denied.

67. Denied.

68. Denied.

69. Denied.

70. Denied.

71. Denied.

72. Denied.

COUNT III

BREACH OF CONTRACT

73. QIAGEN incorporates by reference its responses to paragraphs 1 through

72 as if fully set forth herein.

74. Denied.

75. Denied.

76. Denied.

77. Denied.

78. Denied.

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COUNT IV

BREACH OF THE DUTY OF GOOD FAITH AND FAIR DEALING

79. QIAGEN incorporates by reference its responses to paragraphs 1 through

78 as if fully set forth herein.

80. Denied.

81. Denied.

82. Denied.

83. Denied.

84. Denied.

85. Denied.

86. Denied.

87. Denied.

88. Denied.

89. Denied.

90. Denied.

91. Denied.

QIAGEN denies that EGL is entitled to any of the relief requested, and/or any

other relief.

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GENERAL DENIAL

Pursuant to Rule 8(b)(3) of the Federal Rules of Civil Procedure, QIAGEN denies

each and every allegation in the Complaint that it has not expressly admitted, specifically

answered, or responded to herein.

AFFIRMATIVE DEFENSES

Without conceding the burden of proof, Defendants raise the following

affirmative defenses:

FIRST AFFIRMATIVE DEFENSE

EGL’s Amended Complaint fails to state a claim on which relief can be granted.

SECOND AFFIRMATIVE DEFENSE

EGL’s claims are barred in whole or in part by estoppel or laches.

THIRD AFFIRMATIVE DEFENSE

EGL’s claims are barred in whole or in part by the doctrine of unclean hands.

FOURTH AFFIRMATIVE DEFENSE

EGL’s claims and claims for damages are barred in whole or in part by Section

10.1(c) of the License Agreement.

FIFTH AFFIRMATIVE DEFENSE

EGL’s claims are barred in whole or in part for patent misuse.

SIXTH AFFIRMATIVE DEFENSE

EGL’s claims are barred because they seek to enforce, or rely on, contract

provisions that, without a valid patent, improperly restrain commerce or otherwise provide EGL

with greater rights that it is entitled to under the federal patent laws.

SEVENTH AFFIRMATIVE DEFENSE

EGL’s claim under MGL chapter 93A is barred because the conduct alleged to

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violate the statute did not occur “primarily and substantially” in the Commonwealth of

Massachusetts.

EIGHTH AFFIRMATIVE DEFENSE

EGL’s claims are barred in whole or in part because there is no liability as alleged

by EGL because QIAGEN’s EGFR test kits do not, but for the License Agreement, infringe a

valid claim of a licensed patent.

QIAGEN MANCHESTER, LTD. AND QIAGEN INC.’S


COUNTERCLAIMS

QIAGEN, for its counterclaims against EGL and Counterclaim-Defendant

Laboratory Corporation of America Holdings (“LabCorp”), states and alleges as follows:

NATURE OF THE ACTION

1. QIAGEN seeks a declaratory judgment of invalidity and non-infringement

for U.S. Patent Nos. 7,964,349 (“the ’349 patent”), 8,105,769 (“the ’769 patent”), 8,465,916

(“the ’916 patent”), and 9,035,036 (“the ’036 patent”).

2. In addition, QIAGEN is due restitution for the royalties it paid under

protest since QIAGEN first notified EGL that the ’468 patent and the other licensed U.S. patents

are not valid under U.S. patent law.

3. Finally, QIAGEN seeks relief from LabCorp and EGL for their improper

communications with QIAGEN’s customers, which intentionally and improperly interfered with

QIAGEN’s existing and prospective relations with its customers.

PARTIES

4. QIAGEN Manchester Ltd. is an English company having its principal

place of business at Skelton House, Lloyd Street North, Manchester, United Kingdom.

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5. QIAGEN Inc. is organized under the laws of California with its principal

place of business in Germantown, Maryland.

6. Upon information and belief, EGL is organized under the laws of

Delaware, with its principal place of business at 3400 Computer Drive, Westborough, MA

01581.

7. In its complaint against QIAGEN, EGL alleges, and therefore QIAGEN

alleges herein upon information and belief, that EGL is a wholly-owned subsidiary of LabCorp, a

corporation organized under the laws of the State of Delaware with its principal place of business

at 358 South Main Street, Burlington, North Carolina. (EGL and LabCorp are collectively

referred to as the “Counterclaim Defendants.”)

JURISDICTION AND VENUE

8. This Court has subject matter jurisdiction over QIAGEN’s counterclaims

pursuant to 28 U.S.C. §§ 1331, 1332(a), 1338(a), and 1367, and the Declaratory Judgment Act,

28 U.S.C. §§ 2201 and 2202. The amount in controversy for QIAGEN’s counterclaims exceeds

$75,000, exclusive of interest and costs.

9. Personal jurisdiction exists over the Counterclaim Defendants, and venue

is proper and convenient.

GENERAL ALLEGATIONS

10. Upon information and belief, the General Hospital Corporation (“GHC”)

and the Dana-Farber Cancer Institute, Inc. (“DFCI”) are co-owners by assignment of the ’468,

’349, ’769, ’916, and ’036 patents.

11. Upon information and belief, GHC and DFCI granted an exclusive license

to EGL’s predecessor Genzyme that includes rights to the ’468, ’349, ’769, ’916, and ’036

patents.

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12. EGL has alleged and represented to the Court that it has “all right, title and

interest” in the ’468 patent and its “related” patents, including upon information and belief, the

’349, ’769, ’916, and ’036 patents that are “related” because they claim priority to the application

that issued as the ’468 patent. Thus, upon information and belief and based on EGL’s allegations

and representations, EGL has “all right, title and interest” to the ’349, ’769, ’916, and ’036

patents.

13. In 2008, EGL’s predecessor entered into the License Agreement with

QIAGEN’s predecessor. The License Agreement purports to grant rights to QIAGEN in the

’468, ’349, ’769, ’916, and ’036 patents (collectively “the licensed patents”) to manufacture and

sell Epidermal Growth Factor Receptor mutation testing kits (“EGFR test kits”) that were

covered by the licensed patents.

14. Under the License Agreement, QIAGEN is only required to pay royalties

for sales of its EGFR test kits that but for the License Agreement “cannot be manufactured, used,

offered for sale or sold, in whole or in part, without infringing” a valid patent claim under one of

the licensed patents.

15. QIAGEN has provided notice to EGL that it believes that the ’468, ’349,

’769, ’916, and ’036 patents are invalid.

16. Although QIAGEN believes the licensed patents are invalid, QIAGEN has

continued to make royalty payments under the License Agreement under protest with the right to

recoup such royalty payments if and when a court agrees that the licensed patents are invalid.

17. In this action, EGL has alleged that QIAGEN has infringed the ’468

patent.

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18. In addition to the ’468 patent, EGL and LabCorp threatened QIAGEN’s

customers with patent infringement of at least the ’349 and ’769 patents.

19. There is an actual and justiciable case or controversy that exists between

QIAGEN and EGL regarding whether making, using, and selling QIAGEN’s EGFR test kits

infringe a valid claim of the ’349, ’769, ’916, and ’036 patents, and thus whether QIAGEN is

obligated to pay royalties on the sales of its EGFR test kits in the U.S.

The Court Has Effectively Invalidated the ’349, ’769, and ’916 Patents

20. In a September 25, 2015 Memorandum and Order, this Court held that the

’468 patent is invalid as claiming an unpatentable natural law.

21. The issues of invalidity are legally identical as between the ’468 patent

and the ’349, ’769, and ’916 patents.

22. The issues determinative of the invalidity of the ’349, ’769, and ’916

patents were actually litigated in this action by the same parties and were decided by this Court’s

September 25, 2015 Memorandum and Order.

23. All such issues were necessary to the Court’s decision in this matter.

24. Because the issues of invalidity are identical, the Court’s September 25,

2015 Memorandum and Order, effectively invalidated not only the ’468 patent, but also the ’349,

’769, and ’916 patents.

EGL and LabCorp Interfered with QIAGEN’s Customer Relations

25. In the License Agreement, EGL authorized QIAGEN to sell to customers

EGFR test kits that were covered by the licensed patents. EGL gave QIAGEN a license to sell

them for both clinical diagnostic purposes and research purposes.

26. The License Agreement covers only QIAGEN’s EGFR test kits that, but

for the License Agreement, would infringe any valid claim of any of the licensed patents.

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Neither EGL nor its predecessors provided any know-how, teachings or materials to QIAGEN or

its predecessors to help it build its kits. Rather, EGL simply provided a license to the licensed

patents—patents that QIAGEN herein alleges are patent ineligible under Section 101 of the U.S.

Patent Act.

27. During the course of the parties’ performance under the License

Agreement through 2013, LabCorp requested, and QIAGEN sold its EGFR test kits to LabCorp.

28. Upon information and belief, there came a time when EGL and LabCorp

viewed QIAGEN as a business threat.

29. Thus, Counterclaim Defendants EGL and LabCorp used improper means

to injure QIAGEN by, among other things, improperly threatening QIAGEN’s customers with

patent infringement of the licensed patents, to injure QIAGEN’s existing and prospective

contractual relations with its customers.

30. Specifically, upon information and belief, Counterclaim Defendants sent

letters (“Interference Letters”) to third parties that it knew had purchased EGFR test kits from

QIAGEN.

31. The Interference Letters listed the licensed patents, and stated that

“LabCorp has license rights to these patents as well as other pending U.S. patent applications.

Currently, LabCorp provides laboratory testing services under these patent rights, including

testing for clinical diagnostic use.” The Interference Letters told the recipient to review the

enclosed patents and to discuss with LabCorp. The Interference Letters intentionally and

improperly failed to mention that LabCorp knew that the recipient of the Interference Letter had

purchased its EGFR test kits from QIAGEN, or that LabCorp’s subsidiary EGL has licensed

such patents to QIAGEN.

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32. The Counterclaim Defendants continued to send such letters even after the

date of the FDA’s first approval of QIAGEN’s kits in July 2013, after which even EGL concedes

in its Amended Complaint that QIAGEN had full rights to sell the kits to customers for all

licensed uses. (QIAGEN contends that all of its sales before and after July 2013 were permitted

under the License Agreement.)

33. The Interference Letters were improper in motive or means in that they did

not mention QIAGEN’s license, and in that they were designed to deter third parties from doing

business with QIAGEN, in order to injure QIAGEN.

34. On information and belief, the Interference Letters interfered with

QIAGEN’s existing and prospective contracts for sales of EGFR test kits by inducing customers

to breach existing contracts with QIAGEN to purchase EGFR test kits or by causing such

customers not to make new purchases with QIAGEN in the future.

COUNT I
DECLARATORY JUDGMENT ON CONTRACTUAL RIGHTS AND OBLIGATIONS
(QIAGEN Manchester against EGL)

35. QIAGEN repeats and incorporates the averments of the foregoing

paragraphs as if fully set forth herein.

36. There is an actual and justiciable case or controversy that exists between

QIAGEN Manchester and EGL concerning the rights and obligations of QIAGEN under the

terms of the License Agreement.

37. QIAGEN Manchester has provided notice to EGL that it believes that it

does not owe any royalties for any U.S. sales because the U.S. licensed patents (the ’468, ’349,

’769, ’916, and ’036 patents) are invalid.

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38. In a September 25, 2015 Memorandum and Order, this Court held that the

’468 patent is invalid as claiming an unpatentable natural law.

39. As per Counts II-V of QIAGEN’s counterclaims, QIAGEN Manchester is

seeking a declaratory judgment that the remaining U.S. licensed patents (the ’349, ’769, ’916,

and ’036 patents) are invalid.

40. As per Count VI of QIAGEN’s counterclaims, QIAGEN Manchester is

also seeking a declaratory judgment that QIAGEN’s EGFR test kits do not infringe the

remaining U.S. licensed patents (the ’349, ’769, ’916, and ’036 patents).

41. Thus, QIAGEN Manchester hereby seeks a declaratory judgment that it

owes no royalties on U.S. sales under the License Agreement.

COUNT II
DECLARATORY JUDGMENT OF INVALIDITY OF THE ’349 PATENT
(QIAGEN Manchester against EGL)

42. QIAGEN repeats and incorporates the averments of the foregoing

paragraphs as if fully set forth herein.

43. An actual, substantial and continuing controversy exists between

QIAGEN Manchester and EGL as to whether the ’349 patent is invalid.

44. The ’349 patent is invalid for failing to comply with one or more of the

provisions of the United States Patent Action, 35 U.S.C. § 1 et seq., including but not limited to

35 U.S.C. §§ 101, 102, 103, and 112.

45. The issues determinative of whether the ’349 patent is invalid under 35

U.S.C. § 101 as claiming an unpatentable natural law were actually litigated in this action and

were effectively decided by this Court’s September 25, 2015 Memorandum and Order.

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46. Declaratory relief is both appropriate and necessary to establish that the

’349 patent is invalid, and thus QIAGEN Manchester is entitled to restitution of royalties paid

and does not owe future royalties under the License Agreement for U.S. sales, and to prevent the

assertion of the ’349 patent against QIAGEN or its customers in the future.

COUNT III
DECLARATORY JUDGMENT OF INVALIDITY OF THE ’769 PATENT
(QIAGEN Manchester against EGL)

47. QIAGEN repeats and incorporates the averments of the foregoing

paragraphs as if fully set forth herein.

48. An actual, substantial and continuing controversy exists between

QIAGEN Manchester and EGL as to whether the ’769 patent is invalid.

49. The ’769 patent is invalid for failing to comply with one or more of the

provisions of the United States Patent Action, 35 U.S.C. § 1 et seq., including but not limited to

35 U.S.C. §§ 101, 102, 103, and 112.

50. The issues determinative of whether the ’769 patent is invalid under 35

U.S.C. § 101 as claiming an unpatentable natural law were actually litigated in this action and

were effectively decided by this Court’s September 25, 2015 Memorandum and Order.

51. Declaratory relief is both appropriate and necessary to establish that the

’769 patent is invalid, and thus QIAGEN Manchester is entitled to restitution of royalties paid

and does not owe future royalties under the License Agreement for U.S. sales, and to prevent the

assertion of the ’769 patent against QIAGEN or its customers in the future.

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COUNT IV
DECLARATORY JUDGMENT OF INVALIDITY OF THE ’916 PATENT
(QIAGEN Manchester against EGL)

52. QIAGEN repeats and incorporates the averments of the foregoing

paragraphs as if fully set forth herein.

53. An actual, substantial and continuing controversy exists between

QIAGEN Manchester and EGL as to whether the ’916 patent is invalid.

54. The ’916 patent is invalid for failing to comply with one or more of the

provisions of the United States Patent Action, 35 U.S.C. § 1 et seq., including but not limited to

35 U.S.C. §§ 101, 102, 103, and 112.

55. The issues determinative of whether the ’916 patent is invalid under 35

U.S.C. § 101 as claiming an unpatentable natural law were actually litigated in this action and

were decided by this Court’s September 25, 2015 Memorandum and Order.

56. Declaratory relief is both appropriate and necessary to establish that the

’916 patent is invalid, and thus QIAGEN Manchester is entitled to restitution of royalties paid

and does not owe future royalties under the License Agreement for U.S. sales, and to prevent the

assertion of the ’916 patent against QIAGEN or its customers in the future.

COUNT V
DECLARATORY JUDGMENT OF INVALIDITY OF THE ’036 PATENT
(QIAGEN Manchester against EGL)

57. QIAGEN repeats and incorporates the averments of the foregoing

paragraphs as if fully set forth herein.

58. An actual, substantial and continuing controversy exists between

QIAGEN Manchester and EGL as to whether the ’036 patent is invalid.

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59. The ’036 patent is invalid for failing to comply with one or more of the

provisions of the United States Patent Action, 35 U.S.C. § 1 et seq., including but not limited to

35 U.S.C. §§ 101, 102, 103, and 112.

60. Declaratory relief is both appropriate and necessary to establish that the

’036 patent is invalid and thus QIAGEN Manchester is entitled to restitution of royalties paid

and does not owe future royalties under the License Agreement for U.S. sales, and to prevent the

assertion of the ’036 patent against QIAGEN or its customers in the future.

COUNT VI
DECLARATORY JUDGMENT OF NON-INFRINGEMENT OF THE LICENSED
PATENTS
(QIAGEN against EGL)

61. QIAGEN repeats and incorporates the averments of the foregoing

paragraphs as if fully set forth herein.

62. An actual, substantial and continuing controversy exists between

QIAGEN and EGL concerning whether QIAGEN’s EGFR test kits infringe any valid claim of

the licensed patents.

63. Even absent QIAGEN’s rights under the License Agreement, QIAGEN’s

EGFR test kits do not infringe, in whole or in part, either directly, indirectly, contributorily, or by

inducement, the claims of the remaining U.S. licensed patents (the ’349, ’769, ’916, and ’036

patents) either literally or under the doctrine of equivalents.

64. Declaratory relief is both appropriate and necessary to establish that

QIAGEN’s EGFR kits do not infringe the licensed patents and thus QIAGEN is entitled to

restitution of royalties paid and does not owe future royalties under the License Agreement for

U.S. sales, and to prevent the assertion of the licensed patent against QIAGEN or its customers

in the future.

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COUNT VII
RESTITUTION OF ROYALTIES PAID
(QIAGEN Manchester against EGL)

65. QIAGEN repeats and incorporates the averments of the foregoing

paragraphs as if fully set forth herein.

66. No later than October 31, 2014, via the filing of its motion to dismiss

EGL’s claim of infringement of the ’468 patent in this action, QIAGEN Manchester gave notice

to EGL that it believed the ’468 patent was invalid under section 101 of the U.S. Patent Act. This

notice also provided constructive notice of QIAGEN Manchester’s position as to the invalidity

under U.S. law of the ’349, ’769, and ’916 patents as well, as the claims of those patents are

functionally identical to those of the ’468 patent.

67. In subsequent communications, QIAGEN Manchester reiterated that it

believes that the ’468, ’349, ’769,’916, as well as the ’036 patent, are invalid and unenforceable

under U.S. law, and that it was making payment of its U.S. royalties under protest and objection.

68. In a September 25, 2015 Memorandum and Order, this Court held that the

’468 patent is invalid as claiming an unpatentable natural law.

69. The issues of invalidity are identical as between the ’468 patent and the

’349, ’769, and ’916 patents.

70. The issues determinative of the invalidity of the ’349, ’769, and ’916

patents were actually litigated in this action and were decided by this Court’s September 25,

2015 Memorandum and Order.

71. All such issues were necessary to the Court’s decision in this matter.

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72. Because the issues of invalidity are identical, the Court’s September 25,

2015 Memorandum and Order, effectively invalidated not only the ’468 patent, but also the ’349,

’769, and ’916 patents.

73. QIAGEN Manchester has also sought a declaratory judgment that the’036

patent is invalid and that the remaining U.S. licensed patents (the ’349, ’769, ’916, and’036

patents) are not infringed by QIAGEN’s EGFR test kits.

74. QIAGEN Manchester is entitled to recover its royalties paid for U.S. sales

of EGFR test kits from at least October 31, 2014.

COUNT VIII
TORTIOUS INTERFERENCE WITH CONTRACTUAL RELATIONSHIPS
(QIAGEN against LabCorp and EGL)

75. QIAGEN repeats and incorporates the averments of the foregoing

paragraphs as if fully set forth herein.

76. During the term of the License Agreement, customers had contracts and

ongoing business relationships with QIAGEN to purchase EGFR test kits.

77. Upon information and belief the Counterclaim Defendants knew of the

existence of such business relationships between QIAGEN and third parties to purchase EGFR

test kits. The Counterclaim Defendants further knew that QIAGEN reasonably expected to

continue to sell EGFR test kits to these same customers in the future.

78. The Counterclaim Defendants sent, or caused to be sent, the Interference

Letters to third parties to disrupt QIAGEN’s contractual relationships with its customers, and

intentionally induce those customers not to perform their obligations under the contracts.

79. The Counterclaim Defendants’ methods in contacting third parties were

improper in means or motive in light of its failure to note QIAGEN’s rights under the License

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Agreement, and the Counterclaim Defendants’ implication that customers were violating the

Patent Rights by using EGFR test kits from QIAGEN.

80. The Counterclaim Defendants’ failure to explain in the Interference

Letters that QIAGEN was licensed to sell the EGFR test kits at the time the Interference Letters

were sent constitutes improper means or motive as well as malicious behavior on the part of the

Counterclaim Defendants.

81. The Counterclaim Defendants wanton and malicious interference was

improper in means or motive as it was done to harm its competition and its licensee, QIAGEN,

and not for any legitimate business purpose.

82. QIAGEN has suffered damages as result of EGL’s action.

COUNT IX
TORTIOUS INTERFERENCE WITH PROSPECTIVE BUSINESS RELATIONSHIPS
(QIAGEN against LabCorp and EGL)

83. QIAGEN repeats and incorporates the averments of the foregoing

paragraphs as if fully set forth herein.

84. During the term of the License Agreement, customers had purchased

EGFR test kits from QIAGEN.

85. The Counterclaim Defendants knew of the existence of QIAGEN’s sales

to third parties of EGFR test kits. The Counterclaim Defendants further knew that QIAGEN

reasonably expected to continue to sell EGFR test kits to these same customers in the future.

86. The Interference Letters were sent to third parties to disrupt QIAGEN’s

contractual relationships with its customers, and induce those customers to not engage in future

business with QIAGEN concerning the EGFR test kits.

87. The Counterclaim Defendants’ methods in contacting third parties were

improper in means or motive in light of its failure to note QIAGEN’s rights under the License

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Agreement, and the Counterclaim Defendants’ implication that customers would violate the

Patent Rights by using EGFR test kits from QIAGEN.

88. The Counterclaim Defendants’ failure to explain in the Interference

Letters that QIAGEN was licensed to sell the EGFR test kits at the time the Interference Letters

were sent constitutes improper means or motive as well as malicious behavior on the part of the

Counterclaim Defendants.

89. The Counterclaim Defendants wanton and malicious interference was

improper in means or motive as it was done to harm its competition and its licensee, QIAGEN,

not for any legitimate business purpose.

90. QIAGEN has suffered damages as result of EGL’s action.

PRAYER FOR RELIEF

WHEREFORE, Counterclaimant QIAGEN prays for the following relief:

(a) A judgment declaring the ’349, ’769, ’916, and ’036 patents

invalid.

(b) A judgment declaring that QIAGEN’s EGFR test kits do not

infringe the remaining U.S. licensed patents.

(c) A judgment that EGL must make restitution to QIAGEN of all

royalties paid under the License Agreement since at least October 31, 2014.

(d) A judgment awarding other damages to QIAGEN.

(e) A judgment awarding QIAGEN’s costs and attorney’s fees because

this case is “exceptional” under 35 U.S.C. § 285 or to the extent allowed under applicable

law.

(f) A judgment awarding punitive damages to the extent allowed

under applicable law.

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(g) An award to QIAGEN of such further relief as the Court deems

just and proper.

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JURY TRIAL DEMAND

QIAGEN hereby demands a jury trial on all issues so triable both in EGL’s

Amended Complaint and in QIAGEN’s counterclaims.

Dated: October 23, 2015 QIAGEN Inc. and QIAGEN Manchester, Ltd.,

By their attorneys,

SALLY & FITCH LLP

/s/ Peter E. Ball


Peter E. Ball (BBO #546031)
Ryan M. Cunningham (BBO #661440)
SALLY & FITCH LLP
Tel. (617) 542-5542
Fax. (617) 542-1542
peb@sally-fitch.com
rmc@sally-fitch.com

Robert R. Baron (Admitted pro hac vice)


Marc S. Segal (Admitted pro hac vice)
BALLARD SPAHR LLP
Tel. (215) 665-8500
Fax (215) 864-8999
baron@ballardspahr.com
segalm@ballardspahr.com

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CERTIFICATE OF SERVICE

I hereby certify that I caused the foregoing document to be filed through the Court’s ECF

system and that it will be sent electronically to the registered participants as identified on the

Notice of Electronic Filing, and paper copies will be sent to those indicated as non-registered

participants on October 23, 2015.

/s/ Peter E. Ball


Peter E. Ball

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1 CERTIFICATE OF SERVICE
2 The undersigned hereby certifies that a true and correct copy of the
3 above and foregoing document has been served on October 12, 2018, to all counsel
4 of record who are deemed to have consented to electronic service via the Court’s
5 CM/ECF system per Civil Local Rule 5.4(d). Any other counsel of record will be
6 served by electronic mail, facsimile and/or overnight delivery.
7 I certify under penalty of perjury that the foregoing is true and correct.
8 Executed on October 12, 2018, at New York, New York.
9
10 By: /s/ Evan R. Chesler ________________
Evan R. Chesler
11 echesler@cravath.com
Attorneys for Defendant and
12 Counterclaim-Plaintiff
QUALCOMM
13 INCORPORATED
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CERTIFICATE OF SERVICE Case No. 17-cv-0108-GPC-MDD