Patent Cases, CROSS MEDICAL PRODUCTS, INC., Plaintiff, v. MEDTRONIC SOFAMOR DANEK, INC. et. al., Defendants. AND RELATED COUNTERCLAIMS., U.S. District Court, C.D. California, (Apr. 8, 2005)

GARY TAYLOR, District Judge

ORDER ON CROSS-MOTIONS FOR PARTIAL SUMMARY JUDGMENT RE: INVALIDITY OF THE '442 PATENT

I. BACKGROUND

Plaintiff Cross Medical Products owns U.S. Patent No. 5,624,442 (“the '442 Patent”), which relates to a “transverse connector” for connecting rods in a spinal implant system. The Court previously found several of Defendants' crosslink products infringe various claims of the '442 Patent. (See Feb. 10, 2005 Order.) The parties now cross-move for partial summary judgment on invalidity of the '442 Patent.

II. DISCUSSION

Summary judgment is proper if “there is no genuine issue as to any material fact and … the moving party is entitled to a judgment as a matter of law.” Fed.R.Civ.P. 56(c).

A patent is presumed valid. 35 U.S.C. §282 (2001). Defendants, as the parties asserting invalidity, have the burden of establishing invalidity by clear and convincing evidence. Beckson Marine, Inc. v. NFM, Inc., 292 F.3d 718, 725 (Fed. Cir. 2002).

A. Claims 1-14

1. Priority Date

Defendants argue the '442 Patent does not have a 1990 priority date because Cross's statements in its summary judgment briefing of infringement on the '442 patent restrict it to a November 19, 1993 priority date. (Defs.' Mot. Partial Summ. J. at 1.) According to Defendants, if Plaintiff is held to the 1993 priority date, then claims 1-14 of the '442 Patent are invalid as anticipated.

Defendants' argument is not persuasive. In Beckson Marine, Inc., the Federal Circuit held “litigation theories — to the extent not expressed in claim language, the patent specification, or the prosecution history — do not affect claim scope or bear on patent validity.” 292 F.3d at 726. Under this precedent, Plaintiff's “statements in connection with summary judgment briefing” cannot change the priority date of the '442 Patent.

Defendants also contend that, under the Court's February 2005 Order on infringement of the '442 Patent, “claims 1-14 include both the original and the new crosslink embodiments,” which are very different embodiments. According to Defendants, because the new crosslink embodiment is not adequately supported in the 1990 application, but arose for the first time in the 1993 continuation-in-part application, claims 1-14 “cannot be entitled to a priority date of 1990.” (Defs.' Reply at 4-5.) In support of this contention, Defendants cite Augustine Medical, Inc. v. Gaymar Industries, Inc., 181 F.3d 1291, 1302 (Fed. Cir. 1999), which held “[s]ubject matter that arises for the first time in the [continuation-in-part] application does not receive the benefit of the filing date of the parent application.”

Here, the effect of the Court's February 2005 Order, as to claims 1-14, is to include both the original and new crosslink embodiments within the scope of the claims. As Defendants correctly observe, the original and new embodiments are very different: unlike the original embodiments, the new ones “do not have three separate components — a left clamping member, a right clamping member, and a link in between.” (Defs.' Reply at 5; Defs.' Mot. Partial Summ. J. at 5-10.) And the new embodiments are not adequately supported in the 1990 application. [1] (Defs.' Reply at 5 n. 14.)

Because claims 1-14 are not directed solely to subject matter supported in the 1990 application, but are also directed to new subject matter in the 1993 continuation-in-part application, claims 1-14 cannot be entitled to a 1990 priority date. In re Chu, 66 F.3d 292, 297 (Fed. Cir. 1995). Claims 1-14 are entitled only to a 1993 priority date. Under a 1993 priority date, Defendants contend claims 1-14 are invalid as anticipated.

2. Anticipation

Where claims are entitled only to the filing date of the continuation-in-part application, they can be invalidated by intervening prior art. Mendenhall v. Cedarapids, Inc., 5 F.3d 1557, 1565-66 (Fed. Cir. 1993). Intervening prior art consists of patents or publications issued or published in the time between the original application and the continuation-in-part application.

Here, the '442 Patent is entitled only to a 1993 priority date. In 1991, an international application was published. [2] This publication is prior art to the '442 Patent. See Tronzo, 156 F.3d at 1162 (Newman, J., concurring) (“According to the court's ruling today, the patentee loses the entire benefit of [an] earlier filing whenever a continuation-in-part is filed with additional data and broadened claims based in part on that data. That is, the patentee's own prior disclosure now becomes prior art against him.”). The publication discloses, and therefore anticipates, the elements of claims 1-14. [3] (See Defs.' Mot. Partial Summ. J. at 17 n. 18; Auchter Decl. Exs. 4, 6); Brown v. 3M, 265 F.3d 1349, 1351 (Fed. Cir. 2001) (“[W]hen a claim covers several structures or compositions, either generically or as alternatives, the claim is deemed anticipated if any of the structures or compositions within the scope of the claim is known in the prior art.”).

Claims 1-14 of the '442 Patent are invalid as anticipated. Defendants' motion for partial summary judgment of invalidity of claims 1-14 is GRANTED.

B. Claims 15-20

Claims 15-20 of the '442 Patent include a limitation providing “the recesses … face the same direction.” (Defs.' Mot. Partial Summ. J. at 22 n. 31.) Defendants argue claims 15-20 are invalid as obvious in light of the Cotrel '427 application, the Cotrel-Dubousset Instrumentation, or the Compact Cotrel-Dubousset Instrumentation.

Based on the Cotrel '427 application, Defendants claim it “would have been obvious to a person of ordinary skill in the art to angle the finger and the end tab of the left hook in the same direction as the left-facing recess of the first clamping member.” (Defs.' Mot. Partial Summ. J. at 23.) Defendants' claim is a conclusion without any support and does not amount to clear and convincing evidence.

Defendants' reliance on the Cotrel-Dubousset Instrumentation is misplaced. In the Court's view, this instrumentation does not render claims 15-20 obvious because it does not resemble the device described in claims 15-20. The instrumentation does not illustrate recesses of the type described in claims 15-20 facing in the same direction.

Defendants' reliance on the Compact Cotrel-Dubousset Instrumentation is also misplaced because it does not show hooks facing in the same direction.

Defendants have not overcome the presumption of validity by clear and convincing evidence. On this basis, claims 15-20 are not invalid.

C. Invalidity Based on Lack of Written Description

Relying on Chiron Corp. v. Genentech, Inc., 363 F.3d 1247, 1255 (Fed. Cir. 2004), Defendants alternatively contend all claims of the '442 Patent are invalid under 35 U.S.C. §112 for lack of written description. In Chiron Corp., the Federal Circuit explained the written description requirement:

[Requiring a written description in the application] prevents applicants from using the amendment process to update their disclosures … during their pendency before the patent office. Otherwise, applicants could add new matter to their disclosures and date them back to their original filing date, [thereby] defeating an accurate accounting of the priority of the invention… . [T]he function of the description requirement is to ensure … the inventor had possession, as of the filing date of the application relied on, of the specific subject matter later claimed by him.

363 F.3d at 1255 (citation omitted).

In Chiron Corp., the Federal Circuit held plaintiff could not have had possession of the new subject matter (antibodies) as of the date of the earliest application because the antibodies were not in existence at the time. As a result, plaintiff's application could not have included a written description for the antibodies.

Chiron Corp. is on-point. Like Chiron Corp., where the court held plaintiff could not have had possession of antibodies at a time when they did not exist, here Defendants have shown the inventors of the '442 Patent “did not invent or conceive of the unitary and adjustable crosslinks depicted in figures 21 through 26 of the '442 patent until well after the 1990 filing date, in 1992 and 1993.” (Defs.' Mot. Partial Summ. J. at 26; Auchter Decl. Ex. 14.) Plaintiff cannot satisfy the written description requirement.

Because Plaintiff cannot satisfy this requirement, all claims of the '442 Patent are invalid for lack of written description. On this basis, Defendants' motion for partial summary judgment is GRANTED.

D. Defenses

Plaintiff argues Defendants' affirmative defenses of lack of infringement, lack of willful infringement, sales to the U.S. government, failure to state a claim, equitable estoppel, prosecution history estoppel, and laches should be rejected.

1. Infringement, Sales to the U.S. Government, Failure to State a Claim, and Estoppel

Given the Court's February 2005 Order finding Defendants' crosslinks infringe several claims of the '442 Patent, Defendants' defense of lack of infringement fails. Plaintiff's request for partial summary judgment on this defense is GRANTED.

Plaintiff argues the Court should reject the defenses of lack of willful infringement and sales to the U.S. government because they do not impact the validity of the '442 Patent. Plaintiff has not ruled out their application as defenses to damages. Therefore, Plaintiff's request for partial summary judgment on these defenses is DENIED.

Having reviewed Plaintiff's argument on Defendants' defense of failure to state a claim, and given Defendants' apparent non-opposition, Plaintiff's request for partial summary judgment on this defense is GRANTED.

Plaintiff has not carried its burden on Defendants' defenses of equitable estoppel and prosecution history estoppel. While Plaintiff asserts the Court should reject these defenses, Plaintiff has not offered any argument in support of its assertion. Plaintiff's request for partial summary judgment on these defenses is DENIED.

2. Laches

Plaintiff asserts the defense of laches must be rejected, but offers no argument in support of that assertion. Defendants, however, fully brief the issue. Defendants argue Plaintiff knew or should have known Defendants were selling infringing crosslinks several years before Plaintiff filed its complaint in 2003, yet it unreasonably delayed filing suit, resulting in material prejudice to Defendants.

“Laches is an equitable time limitation on a party's right to bring suit,” based on the maxim, “one who seeks the help of a court of equity must not sleep on his rights.” Jarrow Formulas, Inc. v. Nutrition Now, Inc., 304 F.3d 829, 835 (9th Cir. 2002) (quotation marks omitted). Plaintiff's claim is barred by laches if (1) its delay in filing suit is unreasonable, and (2) Defendants would suffer prejudice caused by the delay. Id. at 838.

a. Unreasonable Delay

“[T]he limitations period runs from the time the plaintiff knew or should have known” about the claim to the time suit was filed. Id. In a patent case, a rebuttable presumption of laches arises when the delay in filing is six years. A.C. Aukerman Co. v. R.L. Chaides Construction Co., 960 F.2d 1020, 1034-36 (Fed. Cir. (1992) (en banc).

Defendants contend the '442 Patent was issued in 1997, but Plaintiff did not sue until 2003 — a delay of five years and ten months. Defendants argue Plaintiff knew or should have known of the claim in 1997 because (1) Defendants had been selling the infringing crosslinks even before the '442 Patent was issued, and (2) Defendants and Plaintiff communicated extensively about related patents in 1999.

Defendants have raised a triable issue on whether Plaintiff unreasonably delayed filing suit. The evidence shows Defendants began selling the infringing crosslinks before the '442 Patent was issued, (Defs.' Reply at 19 (citing evidence)), which may suggest Plaintiff knew or should have known about its claim in 1997.

Because the delay is less than six years, however, the rebuttable presumption of laches does not arise. But Defendants cite cases in which courts have imposed laches where the delay was only three or four years. See, e.g., Rosemount, Inc. v. Beckman Instruments, Inc., 727 F.2d 1540, 1550 (Fed. Cir. 1984) (three-year delay); Stryker Corp. v. Zimmer, Inc., 741 F. Supp. 509, 512-13 (D.N.J. 1990) (four-year delay). In these cases, a delay of three or four years resulted in the imposition of laches because defendant was prejudiced.

b. Prejudice

Defendants contend they are prejudiced in two ways. First, Defendants argue they “suffered evidentiary prejudice because witnesses' memories have faded. For example, Dr. Byrd, one of the named inventors of the '442 Patent, was unable to recall” key information. (Defs.' Reply at 21.) Second, Defendants argue they “suffered economic prejudice… . In this case, [Defendants] developed and introduced numerous crosslink products … during [Plaintiff's] unexplained and inexcusable silence.” (Defs.' Reply at 21-22.) Defendants assert the delay resulted in a significant number of infringing sales, (Finkelstein Decl. Ex. B at 28 (referring to an amount filed under seal)), and caused Defendants to continue their marketing efforts and expand their market share while Plaintiff “bided its time.” (Defs.' Reply at 22.)

Defendants have raised a triable issue. From 1997 to 2003, Defendants' domestic sales revenue for its infringing products was significant. As in Rosemount, Inc., where the defendant was prejudiced by a three-year delay by continuing to sell the accused product, Defendants here may have been prejudiced as they continued to sell the infringing crosslinks for almost six years while Plaintiff did not file suit. The amount of Defendants' domestic sales revenue also shows Defendants spent time and money on marketing. Plaintiff has not shown Defendants would have spent this time and money if they had been sued earlier.

Plaintiff's request for partial summary judgment on this defense is DENIED.

III. DISPOSITION

Defendants' motion for partial summary judgment is GRANTED. Plaintiff's motion for partial summary judgment is GRANTED IN PART as to Defendants' affirmative defenses of lack of infringement and failure to state a claim.