Opinion ID: 166601
Heading Depth: 3
Heading Rank: 1

Heading: Preliminary issues before the arbitrator

Text: 18 At the arbitration, MACTEC sought to introduce extrinsic evidence of the parties' intent over the meaning of the term remediation well to support its position that the royalty payments only applied to wells involving NoVOCs or UBV technology. Both sides briefed and argued the issue before the arbitrator. The arbitrator felt that extrinsic evidence of intent was only relevant if one of the contract terms was ambiguous. Finding no ambiguity in the contract, the arbitrator excluded all extrinsic evidence of the parties' intent. 19 MACTEC also raised two affirmative defenses in its hearing brief (which was filed only a few days before the actual hearing). First, MACTEC claimed that Gorelick's interpretation of the contract constituted patent misuse under Zenith Radio Corp. v. Hazeltine Research Inc., 395 U.S. 100, 136, 89 S.Ct. 1562, 23 L.Ed.2d 129 (1969). Second, MACTEC argued that Gorelick's patent was effectively invalid because the European Patent Office concluded that the technology was not based on an inventive step. 20 Gorelick, in his hearing brief, filed a motion to strike these two defenses. Gorelick argued that the defenses were not timely raised because they were not included in MACTEC's specification of defenses, filed on April 1, 2002 (pursuant to the arbitrator's scheduling order). After hearing argument, the arbitrator issued the following oral ruling: 21 [T]he motion to strike is granted on several bases. Number one, we had a clear scheduling order. And I believe, if I'm accurate, that all claims and defenses had to be asserted in writing by April 1st of this year. That was not done. 22 Secondly, even if it weren't an issue of failure to specify on time, you can't bring up new defenses in a case where there's been as much discovery and motions as there have been in this case. You can't bring up new defenses a week or five days before trial. 23 And thirdly, invalidity of the patent is beyond my jurisdiction. That's a federal issue, and we're not going to decide the patent issues here. If there was an invalidity of the patent, you've got a right to file a lawsuit in federal court. Those two issues are out of this case, period, okay? 24