United States Court of Appeals
for the Federal Circuit
__________________________
PROMEGA CORPORATION,
Plaintiff-Appellant,
and
MAX-PLANCK-GESELLSCHAFT ZUR FORDERUNG
DER WISSENSCHAFTEN E.V.,
Plaintiff,
v.
LIFE TECHNOLOGIES CORPORATION,
INVITROGEN IP HOLDINGS, INC.,
AND APPLIED BIOSYSTEMS, LLC,
Defendants-Appellees.
__________________________
2011-1263
__________________________
Appeal from the United States District Court for the
Western District of Wisconsin in case no. 10-CV-0281,
Senior Judge Barbara B. Crabb.
___________________________
Decided: March 28, 2012
___________________________
JAMES R. TROUPIS, Troupis Law Office LLC, of Mid-
dleton, Wisconsin, argued for plaintiff-appellant. With
him on the brief was SUSAN R. PODOLSKY, of Alexandria,
Virginia.
PROMEGA CORP v. LIFE TECH 2
KRISTINE E. JOHNSON, Parsons Behle & Latimer, Salt
Lake City, Utah, argued for defendants-appellees. With
her on the brief was FRANCIS M. WIKSTROM. Of counsel on
the brief were AMY SUN and KURTIS D. MACFERRIN, Life
Technologies Corporation, of Carlsbad, California.
__________________________
Before RADER, Chief Judge, NEWMAN and DYK, Circuit
Judges.
Opinion for the court filed by Circuit Judge DYK. Dissent-
ing opinion filed by Circuit Judge NEWMAN.
DYK, Circuit Judge.
Promega Corporation (“Promega”) appeals a decision
of the United States District Court for the Western Dis-
trict of Wisconsin granting Invitrogen IP Holdings, Inc.’s
(“IP Holdings”) motion to compel arbitration. Promega
Corp. v. Life Techs. Corp., No. 10-cv-281 (W.D. Wis. Feb.
16, 2011) (“Arbitration Order”). Because the district court
properly compelled arbitration, we affirm.
BACKGROUND
In 1996, Research Genetics, Inc. (“Research Genetics”)
was the exclusive worldwide licensee of German patent
number 38 34 636 and corresponding patents and patent
applications in the United States, Europe, and Japan
(collectively, the “licensed patents”) relating to genetic
identification, including U.S. Patent No. RE37,984 (the
“’984 patent”). On June 19, 1996, Research Genetics
entered into a license agreement (the “1996 agreement”)
with Promega which granted Promega “an exclusive,
worldwide, license under [the licensed patents] for the
HUMAN GENETIC IDENTITY MARKET and the
HUMAN CLINICAL MARKET” and a nonexclusive
3 PROMEGA CORP v. LIFE TECH
license under the licensed patents for all other uses other
than those exclusively reserved to Research Genetics.
J.A. 646-47. Under the terms of the 1996 agreement,
Promega was required to pay Research Genetics an initial
license issue fee and a royalty on all products sold pursu-
ant to the exclusive license grant. Additionally, under
section 9.4 of the 1996 agreement, Promega had the right
to sublicense the licensed patents. Additionally, section
22.1 of the 1996 agreement included an arbitration clause
which provided that “[a]ll controversies or disputes aris-
ing out of or relating to this Agreement, or relating to the
breach thereof, shall be resolved by arbitration.” J.A. 658.
The 1996 agreement also provided that the agreement
could “not be assigned by either party without the express
written consent of the other party.” J.A. 658. In 2001, in
connection with Research Genetics’ merger into its parent
company, Invitrogen Corporation (“Invitrogen”), Promega
granted written consent to assign Research Genetics’
rights under the 1996 agreement to Invitrogen. In 2003,
Promega granted Invitrogen written consent to assign its
rights under the 1996 agreement to IP Holdings, a wholly-
owned subsidiary of Invitrogen. On November 21, 2008,
Invitrogen merged with Applied Biosystems Inc. (“AB”),
one of Promega’s sublicensees, and changed its name to
Life Technologies Corporation (“Life Technologies”). IP
Holdings remained a wholly owned subsidiary of Life
Technologies.
After the merger with AB, Life Technologies obtained
information that led it to conclude that Promega had been
paying less than it was required to pay on Promega’s
sublicensees’ sales of products incorporating the licensed
patents. Life Technologies subsequently notified Promega
of its alleged noncompliance with the terms of the 1996
agreement. Promega disagreed with Life Technologies’
calculation of the royalties due. After negotiations be-
PROMEGA CORP v. LIFE TECH 4
tween the parties failed to resolve the issue, on May 4,
2010, Life Technologies demanded arbitration pursuant to
section 22.1 of the 1996 agreement, contending that
Promega failed to comply with section 9.4 of the 1996
agreement and demanding an accounting of all sales of
the licensed technology by Promega’s sublicensees.
Rather than submit to arbitration, on May 26, 2010,
Promega filed suit against Life Technologies in the United
States District Court for the Western District of Wiscon-
sin, seeking a declaratory judgment of non-arbitrability of
Life Technologies’ claims under the 1996 agreement, and
alleging, inter alia, infringement of five United States
patents, including the ’984 patent. Specifically, Promega
contended that the rights under the 1996 agreement had
never been assigned to Life Technologies, and that Life
Technologies was therefore not entitled to demand arbi-
tration. In the course of preparing its responses to
Promega’s filings, Life Technologies discovered that IP
Holdings had not assigned its rights under the 1996
agreement to Life Technologies. Accordingly, IP Holdings
served Promega with a demand for arbitration on behalf
of IP Holdings. IP Holdings also filed a motion to compel
arbitration.
In response to IP Holdings’ motion to compel arbitra-
tion, Promega argued, inter alia, that there was a sub-
stantial question as to the continued existence of IP
Holdings and its authority to demand arbitration. In
particular, Promega alleged that it had been informed by
Life Technologies that IP Holdings was to be dissolved. 1
1 On May 1, 2009, Life Technologies and IP Hold-
ings executed an agreement under which IP Holdings
transferred its interests in all agreements to which it was
a party to Life Technologies, with the exception of agree-
ments requiring the consent of a third party prior to
assignment. The agreement indicated that IP Holdings
5 PROMEGA CORP v. LIFE TECH
The district court denied IP Holdings’ motion to compel
arbitration without prejudice to allow for limited discov-
ery on the questions of whether IP Holdings was the
current assignee of the 1996 agreement and whether IP
Holdings maintained its legal existence. During the
course of discovery, IP Holdings produced documentation
demonstrating that Invitrogen had assigned its rights
under the 1996 agreement to IP Holdings; that Promega
had consented to the assignment; and that IP Holdings
had not been dissolved and remained a corporation in
good standing. Following this limited discovery, IP Hold-
ings filed a second motion to compel arbitration.
On February 17, 2011, the district court entered an
order compelling arbitration between Promega and IP
Holdings with respect to those claims relating to the 1996
agreement. In its order, the district court found that IP
Holdings was the assignee of the 1996 agreement, re-
mained in existence, and that it was irrelevant that
Promega alleged that IP Holdings was merely a “puppet”
of Life Technologies, noting that Promega “cite[d] no
authority for the proposition that a corporation cannot
assert rights under a contract unless it has offices and
employees or if all of its actions are directed by a parent
company.” Arbitration Order, slip op. at 6-7. The court
further rejected the proposition that because IP Holdings
would “promptly seek consent” for all agreements requir-
ing the consent of a third party for assignment and that
the transfer of IP Holdings’ rights under these agree-
ments would be effective on the date consent was re-
ceived. J.A. 1351. On September 11, 2009, Life
Technologies notified Promega by letter that it was in the
process of an internal restructuring which would involve
the dissolution of IP Holdings and assignment of all
agreements held by IP Holdings to Life Technologies. IP
Holdings did not request Promega’s consent to assign its
rights under the 1996 agreement to Life Technologies.
PROMEGA CORP v. LIFE TECH 6
had intended to assign its rights to Life Technologies and
because Promega had not consented to that assignment,
IP Holdings could no longer demand arbitration. Follow-
ing the district court’s order compelling arbitration,
Promega’s infringement claims against Life Technologies
and AB, as well as other claims relating to a separate
agreement between Promega and AB, remained pending
before the district court. The district court’s order was
certified as a final order pursuant to Federal Rule of Civil
Procedure 54(b).
Promega timely appealed. We have jurisdiction pur-
suant to 28 U.S.C. § 1295(a)(1).
DISCUSSION
In reviewing a district court’s order compelling arbi-
tration, we review “the district court’s determination that
the parties have contractually bound themselves to arbi-
trate de novo, and its factual findings for clear error.”
Datatreasury Corp. v. Wells Fargo & Co., 522 F.3d 1368,
1371 (Fed Cir. 2008). “We are obligated to follow regional
circuit law on questions of arbitrability that are not
‘intimately involved in the substance of enforcement of a
patent right.’” Microchip Tech. Inc. v. U.S. Philips Corp.,
367 F.3d 1350, 1356 (Fed. Cir. 2004) (quoting Flex-Foot,
Inc. v. CRP, Inc., 238 F.3d 1362, 1365 (Fed. Cir. 2001)).
In this case, the issues of arbitrability are not intimately
involved in the substance of enforcement of a patent right,
and thus we apply the law of the Seventh Circuit. Arbi-
tration agreements are governed by state contract law,
Tinder v. Pinkerton Sec., 305 F.3d 728, 733 (7th Cir.
2002), 2 except to the extent that state law is displaced by
2 The 1996 agreement is governed by Wisconsin
law. J.A. 658 (“This Agreement shall be governed by
Wisconsin law applicable to agreements made and to be
performed in Wisconsin.”).
7 PROMEGA CORP v. LIFE TECH
“federal substantive law regarding arbitration” under the
Federal Arbitration Act (“FAA”), Preston v. Ferrer, 552
U.S. 346, 349 (2008).
The FAA mandates enforcement of valid, written arbi-
tration provisions. See 9 U.S.C. § 2 (2006); Circuit City
Stores, Inc. v. Adams, 532 U.S. 105, 111 (2001); Sharif v.
Wellness Int’l Network, Ltd., 376 F.3d 720, 726 (7th Cir.
2004). “[T]he first task of a court asked to compel arbitra-
tion of a dispute is to determine whether the parties
agreed to arbitrate that dispute.” Mitsubishi Motors
Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614, 626
(1985). This inquiry consists of two underlying issues:
first, whether the parties entered into an agreement to
arbitrate; and second, whether the dispute between the
parties falls within the scope of the arbitration agree-
ment. See Granite Rock Co. v. Int’l Bhd. of Teamsters, 130
S. Ct. 2847, 2856 (2010) (“To satisfy itself that such
agreement exists, the court must resolve any issue that
calls into question the formation or applicability of the
specific arbitration clause that a party seeks to have the
court enforce.”); see also Zurich Am. Ins. Co. v. Watts
Indus., Inc., 466 F.3d 577, 580 (7th Cir. 2006). In deter-
mining whether an agreement requires arbitration, courts
must recognize that the FAA “establishes a national
policy favoring arbitration when the parties contract for
that mode of dispute resolution.” Preston, 552 U.S. at
349.
Promega raises various arguments as to why it should
not be compelled to arbitrate. First, Promega contends
that the arbitration clause at issue here is permissive
rather than mandatory. In support of its contention,
Promega relies on language from section 15.3 of the 1996
agreement which provides that where there is a dispute
over whether a material breach of the agreement has
occurred, the parties “may invoke the arbitration provi-
PROMEGA CORP v. LIFE TECH 8
sion of paragraph 22.0.” J.A. 654 (emphasis added).
However, the arbitration provision of section 22.1 and
Appendix E to the 1996 agreement, which discusses
arbitration procedures, both very clearly provide that all
controversies or disputes arising out of the 1996 agree-
ment “shall” be submitted for arbitration once the arbitra-
tion provision has been invoked. J.A. 658, 665 (emphasis
added). While the agreement does not compel a party to
demand arbitration, once a party does so, the plain lan-
guage of the 1996 agreement shows that arbitration is
mandatory, not permissive.
Second, Promega argues that IP Holdings is merely a
shell subsidiary and that the real party-in-interest is Life
Technologies. Because there was no agreement between
Promega and Life Technologies to arbitrate, Promega
maintains that the district court erred in compelling
arbitration. However, Promega’s argument misses the
mark. There is no question that Promega consented to
Invitrogen’s assignment of the rights and obligations
under the 1996 agreement to IP Holdings, and Promega
does not contend otherwise. The 1996 agreement could
not have been assigned from IP Holdings to Life Tech-
nologies because Promega never consented to such as-
signment. Although IP Holdings may have intended to
transfer its rights under all agreements to Life Technolo-
gies and the parties may have acted at times as though
such an assignment had occurred, the transfer of IP
Holdings’ interest in the 1996 agreement could not be
effective absent the consent of Promega, which was never
requested or obtained. As the district court noted,
Promega cannot have it both ways; it cannot deny IP
Holdings the right to arbitrate because it assigned its
right to Life Technologies, and then consequently deny
Life Technologies the right to arbitrate because Promega
did not grant IP Holdings consent to assign its rights. See
9 PROMEGA CORP v. LIFE TECH
Arbitration Order, slip op. at 8. Because there was no
assignment, the rights under the 1996 agreement remain
with IP Holdings. Because there is no dispute that IP
Holdings remains a corporation in good standing under
Delaware law, we conclude that there is a valid agree-
ment between Promega and IP Holdings to arbitrate.
Third, Promega asserts that the arbitration provision
does not encompass the dispute over Promega’s alleged
failure to pay royalties because the parties intended
arbitration to apply only to small disputes between non-
competitors. According to Promega, the dispute at issue
here is not a small, informal dispute, and Life Technolo-
gies is now Promega’s direct competitor. The arbitration
provision here provides: “All controversies or disputes
arising out of or relating to this Agreement, or relating to
the breach thereof, shall be resolved by arbitration con-
ducted in Chicago, Illinois, in accordance with the proce-
dure set forth in Appendix E.” J.A. 658. This provision is
not limited to small disputes, or to disputes with those
who do not compete with Promega. The arbitration
provision here clearly and unambiguously applies to all
disputes arising out of or relating to the 1996 agreement.
The unexpressed “intent” of the parties cannot limit the
scope of this broad arbitration clause. Imposing limits on
such a clause would be inconsistent with the well-
established presumption in favor of arbitration. See AT &
T Techs., Inc. v. Commc’ns Workers of Am., 475 U.S. 643,
650 (1986). Where, as here, “the arbitration provision is
broad . . . only an ‘“express provision excluding a particu-
lar grievance from arbitration . . . [or] the most forceful
evidence of a purpose to exclude the claim from arbitra-
tion”’ can keep the claim from arbitration.” Exelon Gen-
eration Co. v. Local 15, Int’l Bhd. of Elec. Workers, 540
F.3d 640, 646 (7th Cir. 2008) (alteration in original)
(quoting AT & T Techs., 475 U.S. at 650).
PROMEGA CORP v. LIFE TECH 10
Fourth, Promega alleges that compelling arbitration
would be unjust and unfair in this situation due to the
fact that the agreed-upon arbitration procedures set forth
in Appendix E do not permit third-party discovery;
Promega argues that such discovery is essential to the
dispute in this case because important discoverable
information remains in the possession of Life Technolo-
gies. Appendix E to the 1996 agreement provides that
during arbitration, “either party may engage in discovery
upon any matter, not privileged, relevant to the dispute,
claim or controversy,” including “written interrogatories,
requests for production of documents and tangible things,
requests for admissions and oral depositions of the other
party and its employees.” J.A. 665. IP Holdings also
represented during oral argument that Life Technologies
would consent to discovery during the arbitration proceed-
ings and would produce relevant documents. 3 In general,
3 During oral argument, in response to the Court’s
inquiry about Promega’s ability to obtain discovery from
third parties, counsel for IP Holdings, which also repre-
sents Life Technologies and AB in the district court
proceedings, represented that Life Technologies would
consent to discovery:
The Court: “So Life Technologies has consented to deposi-
tions and whatever else?”
Counsel: “Yes, and the reason for that, frankly, is that
IP Holdings, as the Court is aware, is a
wholly-owned subsidiary of Life Technologies.
It does not maintain its documents sepa-
rately, so—”
The Court: “You are not relying on the difference in
corporate form to resist discovery?”
Counsel: “That is correct your Honor, that’s correct.”
Oral Arg. at 17:01, Dec. 6, 2011, available at
http://www.cafc.uscourts.gov/oral-argument-
recordings/all/promega.html.
11 PROMEGA CORP v. LIFE TECH
“courts must place arbitration agreements on an equal
footing with other contracts, and enforce them according
to their terms.” AT&T Mobility LLC v. Conception, 131 S.
Ct. 1740, 1745 (2011). “[P]arties may agree to limit the
issues subject to arbitration, to arbitrate according to
specific rules, and to limit with whom a party will arbi-
trate its disputes.” Id. at 1748-49 (internal citations
omitted). Thus, Promega was free to accept or reject the
provisions set forth in Appendix E when it entered into
the agreement with Research Genetics, and cannot now
claim that the terms that it agreed to are unfair.
Promega has not called our attention to any case that
holds that limitations on discovery warrant a departure
from the FAA’s mandate to enforce arbitration provisions;
and we conclude that the limitations set forth in Appendix
E do not warrant such a departure. See 1 Thomas H.
Oehmke, Commercial Arbitration § 10:12 (3d ed. 2004) (“A
lack of discovery is no basis to find that a statutory claim
is inarbitrable so long as there is sufficient discovery
available to those who enjoy statutory rights to vindicate
their claims in arbitration.”).
Fifth, Promega urges that arbitration is inappropriate
because its claims of patent infringement against Life
Technologies and AB remain pending in the district court.
In this case, Promega’s claims of infringement of four
patents pending before the district court have no relation-
ship to the arbitrable claims. The arbitrable claims under
the 1996 agreement are related to the district court
proceedings only in that Promega asserts infringement of
a fifth patent—the ’984 patent—which is one of the pat-
ents licensed to Promega under the 1996 agreement
which Promega contends entitles it to sue for infringe-
ment. “The preeminent concern of Congress in passing
the [FAA] was to enforce private agreements into which
parties had entered, and that concern requires that we
PROMEGA CORP v. LIFE TECH 12
rigorously enforce agreements to arbitrate, even if the
result is ‘piecemeal’ litigation.” Dean Witter Reynolds,
Inc. v. Byrd, 470 U.S. 213, 221 (1985). Thus, the Supreme
Court has instructed that “the relevant federal law re-
quires piecemeal resolution when necessary to give effect
to an arbitration agreement.” Moses H. Cone Mem’l Hosp.
v. Mercury Constr. Corp., 460 U.S. 1, 20 (1983). The
district court’s duty to compel arbitration is not altered by
the fact that non-arbitrable claims may remain pending
in the district court. See, e.g., Klay v. All Defendants, 389
F.3d 1191, 1204 (11th Cir. 2004) (recognizing the district
court’s authority to compel arbitration of arbitrable
claims, while allowing related non-arbitrable claims to
proceed before the district court).
Finally, Promega raises various equitable defenses to
arbitration; namely, laches, waiver, unjust enrichment
and estoppel. “The [FAA] establishes that, as a matter of
federal law, any doubts concerning the scope of arbitrable
issues should be resolved in favor of arbitration, whether
the problem at hand is the construction of the contract
language itself or an allegation of waiver, delay, or a like
defense to arbitrability.” Moses H. Cone, 460 U.S. at 24-
25. It is well established that “issues of procedural arbi-
trability, i.e., whether prerequisites such as time limits,
notice, laches, estoppel, and other conditions precedent to
an obligation to arbitrate have been met, are for the
arbitrators to decide.” Howsam v. Dean Witter Reynolds,
Inc., 537 U.S. 79, 85 (2002) (citation omitted). 4 Defenses
4 See also Flender Corp. v. Techna-Quip Co., 953
F.2d 273, 277 (7th Cir. 1992) (“Where the scope of the
agreement is unlimited, issues addressed to the liability
of the parties and to the cancellation of the underlying
agreement, rather than the agreement to arbitrate, are to
be determined by the arbitrator.” (quoting Maria Victoria
13 PROMEGA CORP v. LIFE TECH
to liability under the agreement must be raised before the
arbitrator. There is no claim here that there is a ground
for revocation of the agreement itself. See Mitsubishi
Motors, 473 U.S. at 632-33.
There is also no basis for Promega’s claim that an evi-
dentiary hearing is required as there are no contested
factual disputes.
Accordingly, the district court’s order compelling arbi-
tration between Promega and IP Holdings is affirmed.
AFFIRMED
COSTS
Costs to appellees.
Naviera, S.A. v. Cementos Del Valle, S.A., 759 F.2d 1027,
1031 (2d Cir.1985))).
United States Court of Appeals
for the Federal Circuit
__________________________
PROMEGA CORPORATION,
Plaintiff-Appellant,
and
MAX-PLANCK-GESELLSCHAFT ZUR FORDERUNG
DER WISSENSCHAFTEN E.V.,
Plaintiff,
v.
LIFE TECHNOLOGIES CORPORATION,
INVITROGEN IP HOLDINGS, INC., AND APPLIED
BIOSYSTEMS, LLC,
Defendants-Appellees.
__________________________
2011-1263
__________________________
Appeal from the United States District Court for the
Western District of Wisconsin in Case No. 10-CV-0281,
Senior Judge Barbara B. Crabb.
__________________________
NEWMAN, Circuit Judge, dissenting.
Although arbitration may be a salutary alternative to
litigation, there is no agreement to arbitrate as between the
parties in interest for this dispute. No consent was given to
assignment of the contract to Life Technologies, although
PROMEGA CORP v. LIFE TECH 2
consent is explicitly required by the terms of the prior
contract.
In the absence of agreement to arbitrate, arbitration
cannot be imposed. I respectfully dissent from the court’s
contrary ruling.