02-1532,
-1559
CARDIAC
PACEMAKERS, INC.,
GUIDANT
SALES CORPORATION, and ELI LILLY AND COMPANY,
Plaintiffs-Appellants,
and
ANNA
MIROWSKI,
Plaintiff-Appellant,
v.
ST. JUDE
MEDICAL, INC.,
PACESETTER,
INC., and VENTRITEX, INC.,
Defendants-Cross Appellants.
Arthur I. Neustadt, Oblon, Spivak, McClelland, Maier
& Neustadt, P.C., of
Denis R.
Salmon, Gibson, Dunn & Crutcher LLP, of
Appealed
from:
Judge David
F. Hamilton
CARDIAC
PACEMAKERS, INC.,
GUIDANT
SALES CORPORATION, and ELI LILLY AND COMPANY,
Plaintiffs-Appellants,
and
ANNA
MIROWSKI,
Plaintiff-Appellant,
v.
ST.
JUDE MEDICAL, INC.,
PACESETTER,
INC., and VENTRITEX, INC.,
Defendants-Cross-Appellants.
__________________________
DECIDED:
__________________________
Before NEWMAN, Circuit Judge, FRIEDMAN, Senior
Circuit Judge, and RADER, Circuit Judge.
NEWMAN, Circuit Judge.
This patent
infringement action was brought by Cardiac Pacemakers, Inc., Guidant Sales
Corp., Eli Lilly and Company, and Anna Mirowski (collectively "CPI")
against St. Jude Medical, Inc., Pacesetter, Inc., and Ventritex, Inc.
(collectively "St. Jude"), in the United States District Court for
the Southern District of Indiana.[1] The appeal relates to United States Patent
No. 4,407,288, entitled "Implantable Heart Stimulator and Stimulation
Method," inventors Alois A. Langer, Steve A. Kolenik, Marlin S. Heilman,
Mieczyslaw Mirowski, and Morton M. Mower.
We affirm in part and modify in part the district court's claim
construction, reinstate the jury verdict of validity, and remand for a new
trial of infringement and reassessment of damages. We affirm the district court's decision
upholding the patent term extension.
THE
PATENTED INVENTION
The pumping action
of the human heart occurs by electrical stimulation of various parts of the
heart muscle, a complex process flowing from the nervous and other bodily
systems. Heart arrhythmias result from
disturbances in this process, whereby the heart may beat too slowly (bradycardia),
too rapidly (tachycardia), or in an erratic, disorganized, or quivering fashion
(fibrillation). Arrhythmias may occur in
varying degrees. In treating such heart
abnormalities it is important to determine the form and degree of arrhythmia
present, as well as to identify the section or sections of the heart in which
the arrhythmia originates, such as the ventricles or the atria. The treatment must be appropriate to the
specific abnormality.
The inventions
subject of this lawsuit are implantable cardiac defibrillators (ICDs) that are
permanently installed under the skin, and that determine abnormal cardiac
activity and treat that activity by delivering electrical shocks to the heart
muscle in appropriate strengths. The
first successful ICDs were developed in about 1980 by a team led by the late
Dr. Mieczyslaw Mirowski, an inventor of the patents in suit. In the district court two patents were in
suit, for improved ICDs whereby the ICD evaluates the abnormal heart activity,
determines the pattern of electrical stimulation needed to treat the type of
arrhythmia exhibited by the heart, delivers the appropriate electrical pulses
or shocks, and changes the pulses as necessary for optimum treatment. United States Patent No. 4,316,472 (the '472
patent) is for an improved ICD whereby the implanted device analyzes the
arrhythmia, and the requisite energy levels for electrical shocks to the heart
are calculated and externally programmed.
Patent No. 4,407,288 (the '288 patent) is for a further improvement that
continuously determines the nature of an arrhythmia as it occurs, and
selectively performs multi-mode therapy.
Multi-mode therapy includes administering relatively mild pacing shocks
to correct mild arrhythmias, intense shocks to correct fibrillation, and shocks
appropriate to correct cardioversion, which the district court defined as
"the application of non-pacing electrical pulses designed to stimulate
sufficient heart tissue to correct an arrhythmia, with energy levels generally
below those used for defibrillation."
The cardioversion capability is basic to this appeal.
CPI charged St.
Jude with infringement of claims 1 and 18 of the '472 patent and claims 4 and
13 of the '288 patent. The jury found
St. Jude liable for infringement of the '472 patent, but not the '288 patent. The jury found both patents valid, and
rejected St. Jude's charge that the '288 patent is unenforceable for
inequitable conduct during patent prosecution.
The jury awarded damages of $140 million for infringement of the '472 patent.
On post-trial
motions the district court granted JMOL in favor of St. Jude on most of the
issues on which CPI had prevailed in the jury verdict. The court held that the claims of both the
'472 patent and the '288 patent are invalid and not infringed, and granted a
conditional new trial in the event of reversal on appeal. The court also granted St. Jude's motion for
sanctions based on witness misconduct, and awarded partial attorney fees to St.
Jude based on Cardiac Pacemakers' failure to comply with certain discovery
obligations.
No appeal is taken
as to the '472 patent. CPI appeals the
judgment of invalidity and non-infringement of the '288 patent, and requests
reinstatement of the jury verdict. St.
Jude cross appeals the court's ruling, as a matter of law, that patent term
extension was properly granted.
I
VALIDITY
At issue are claims
4 and 13 of the '288 patent. Claim 4,
and claim 1 from which it depends, state:
1.
A method of heart stimulation using an implantable heart stimulator
capable of detecting a plurality of arrhythmias and capable of being programmed
to undergo a single or multi-mode operation to treat a detected arrhythmia,
corresponding to said mode of operation the method comprising the steps of:
(a) determining a condition of the
heart from among a plurality of conditions of the heart;
(b) selecting at least one mode of
operation of the implantable heart stimulator which operation includes a unique
sequence of events corresponding to said determined condition; and
(c) executing said at least one mode
of operation of said implantable heart stimulator thereby to treat said
determined heart condition.
4.
The method of claim 1, wherein at least one mode of operation of said
implantable heart stimulator includes cardioversion.
Claim 13, and claim 10 from which it depends, state:
10.
An implantable heart stimulator capable of monitoring and detecting a
plurality of arrhythmias, and capable of being programmed to undergo a single
or multi‑mode of operation corresponding to a respective arrhythmia to
treat automatically the detected arrhythmia, said stimulator comprising:
determining means for determining
the occurrence of one of a plurality of conditions of the heart;
selecting means responsive to said
determining means for selecting at least one mode of operation of said
implantable heart stimulator corresponding to a respective one of said
plurality of conditions for automatically treating said determined conditions;
and
executing means for executing a
sequence of events defined by said at least one mode of operation, whereby to
treat said determined condition.
13.
The stimulator of claim 10, wherein said at least one mode of operation
includes cardioversion.
Granting judgment
of invalidity as a matter of law, the district court ruled that Claims 4 and 13
are invalid on the ground of obviousness and for failure to disclose the best
mode of making and using the invention.
Obviousness
In review of a jury
verdict on the ground of obviousness, the underlying findings of fact, whether
explicit or presumed as necessary to support the verdict, are reviewed for
substantial evidentiary support; and the ultimate question of obviousness is
reviewed for correctness in law, based on the factual premises. See Hewlett-Packard Co. v. Mustek
Systems, Inc., 340 F.3d 1314, 1319 (Fed. Cir. 2003); LNP Eng'g Plastics,
Inc. v. Miller Waste Mills, Inc., 275 F.3d 1347, 1353 (Fed. Cir.
2001). These standards are applied by
the district court upon motion for judgment as a matter of law, and again by
the appellate court upon grant or denial of that motion. Medtronic, Inc. v. Advanced Cardiovascular
Systems, Inc., 248 F.3d 1303, 1309 (Fed. Cir. 2001) ("This court
reviews a district court's grant of JMOL de novo and reapplies the JMOL
standard.") (citing Markman v. Westview Instruments, Inc., 52 F.3d
967, 975 (Fed. Cir. 1995) (en banc),
aff'd, 517 U.S. 370
(1996)).
CPI argues that the
jury verdict must be upheld because there was substantial evidence at trial
whereby a reasonable jury could have sustained the validity of the patent on
the ground of obviousness, pointing out that issued patents can only be proved
invalid by clear and convincing evidence.
See, e.g., Sun Studs, Inc. v. ATA Equip. Leasing, Inc., 872 F.2d 978, 988 (Fed. Cir. 1989)
(reviewing the verdict in light of the burden of proof).
At the trial each
side explained what the cited references taught, as well as the general
knowledge in this field of technology at the time the invention was made. The jury was instructed that:
The suggestion [to combine elements
from separate references] can be expressly stated in a particular reference or
it can be within the knowledge that was generally available to one of ordinary
skill in the art.
Jury Instruction
No. 46. Prior knowledge in the field of
the invention must be supported by tangible teachings of reference materials,
and the suggestion to combine references must not be derived by hindsight from
knowledge of the invention itself. See
Gambro Lundia AB v. Baxter Healthcare Corp., 110 F.3d 1573, 1578-79
(Fed. Cir. 1997) ("However, the record must provide a teaching,
suggestion, or reason to substitute computer‑controlled valves for the
system of hoses in the prior art. The
absence of such a suggestion to combine is dispositive in an obviousness
determination."); Interconnect Planning
Corp. v. Feil, 774 F.2d 1132, 1143 (Fed. Cir. 1985) ("When
prior art references require selective combination by the court to render
obvious a subsequent invention, there must be some reason for the combination
other than the hindsight gleaned from the invention itself.").
CPI's witnesses
testified that the '288 invention was not a simple combination of known steps,
but a complex solution to a difficult problem, achieved amid skepticism
concerning the feasibility of producing a single implantable device that could
detect and treat a wide range of heart abnormalities. St. Jude's witnesses disagreed with CPI as to
the unobviousness of the combination.
Evidence was presented to the jury of a long-felt but unmet need to
achieve multi-mode detection and stimulus capability that included
cardioversion. There was evidence that
cardioversion was not treatable by existing multi-mode ICD's, and there was
evidence of skepticism that such multi-mode treatment could be achieved. The jury found that invalidity of the '288
patent on the ground of obviousness had not been proved.
The district court,
granting St. Jude's motion for judgment as a matter of law, found that each of
the elements of claims 4 and 13 was previously known. The court cited references that described
implanted cardiac devices that provided multimode therapy, although none
included cardioversion therapy. The
court found that cardioversion therapy was known, and found that
"compelling motivation" to combine therapies in a single implanted
device was provided by an article by Haft, wherein Haft explained that pacing
therapy may trigger ventricular fibrillation.
The district court found that Haft identified the problem solved by the
'288 patent, and concluded that it would have been obvious to design a pacing
device that could defibrillate if necessary.
That is, the court found that there was a known need to treat mixtures
of arrhythmias, and that it would have been obvious to combine known methods of
separate treatment.
Among the cited
references, the district court placed weight on a British patent 2,026,870 to
Duggan, as providing the motivation to combine treatments of different
arrhythmias. Duggan discusses
cardioversion achieved by application not of a single large shock, as in the
'288 patent, but by a combination of small pacing shocks delivered
simultaneously to multiple sites on the heart.
CPI's expert explained that what Duggan taught was a form of pacing and
not true cardioversion, and concluded that Duggan does not propose the
combination of therapies provided by the '288 patent, or teach how to achieve a
device that produces this combination.
We think that the
district court, in granting JMOL, applied an incorrect standard to the ultimate
question. Recognition of the problem of
treating complex heart arrhythmias does not render obvious the eventual
solution. Recognition of a need does not
render obvious the achievement that meets that need. There is an important distinction between the
general motivation to cure an uncured disease (for example, the disease of
multiple forms of heart irregularity), and the motivation to create a
particular cure.
There can of course
arise situations wherein identification of the problem is itself the
invention. But in the case at bar the
problem was well-recognized: the problem of treating complex cardiac
arrhythmias. The solution of this
problem, according to the trial proceedings, had not previously been
achieved. It was undisputed that before
the work of Dr. Mirowski and his team there was no implantable device that was
capable of treating the combination of abnormal arrhythmias including
cardioversion. Recognition of an
unsolved problem does not render the solution obvious.
Expert witnesses
for each side presented opposing opinions as to the unobviousness of the
Mirowski invention. St. Jude's expert
testified that in his opinion persons of ordinary skill in the relevant field
would have been motivated to modify Duggan "if one felt it [cardioversion]
would be better accomplished with a single high energy shock." CPI's expert testified that the Duggan
reference teaches away from use of high-energy shock because Duggan is
concerned only with power consumption in ICDs.
St. Jude stressed the obviousness of high energy cardioversion or
defibrillation shocks due to the statement in the Haft article that
"antitachycardia pacing could induce fibrillation." CPI presented contrary expert opinion,
stressing that no reference teaches combining cardioversion with other cardiac
therapies in a single device, or states that it is feasible to do so.
It was not disputed
that before the '288 invention this combination of modes of treatment had not
been achieved. CPI pointed out that
claim 4 requires cardioversion, not defibrillation, and that the Haft article
is concerned with fibrillation. The jury
heard testimony that defibrillation shocks, not cardioversion shocks, revert
fibrillation. The jury also heard
testimony that defibrillation energy levels are different from cardioversion
energy levels. While the jury also heard
testimony that "cardioversion and defibrillation are so similar to
practically be the same therapy," other witnesses disputed this position.
Whether the prior
art provides the suggestion or motivation or teaching to select from prior
knowledge and combine it in a way that would produce the invention at issue is
a question of fact. Winner Int'l
Royalty Corp. v. Wang, 202 F.3d 1340, 1348 (Fed. Cir. 2000). These issues were extensively explored at the
trial, including evidence of the commercial success and the interest of others
in licensing the Mirowski inventions.
The record contains substantial evidence whereby a reasonable jury could
have reached the verdict that it would not have been obvious in March 1981 to
provide an ICD that includes cardioversion.
In view of this evidentiary support, the district court's grant of JMOL
cannot stand. See Continental
Air Lines, Inc. v. Wagner‑Morehouse, Inc., 401 F.2d 23, 30 (7th Cir.
1968)[2]
(the jury verdict must be sustained, even if the judge would have reached a
different conclusion, if the verdict is supported by substantial
evidence). The grant of JMOL is
reversed, and the jury verdict is reinstated that the '288 patent is not
invalid for obviousness.
Best Mode
St. Jude also
presented the defense that the '288 patent is invalid for failure to set forth
the best mode of practicing the invention.
The jury found that the patents were not invalid on this ground. On St. Jude's post-trial motion the district
court ruled that the best mode requirement was violated, and granted judgment
of invalidity as a matter of law. On
this question of fact, we review the evidentiary record for substantial
evidence supporting the jury verdict.
A best mode
violation requires that the inventor knew of and concealed a better mode than
was disclosed for making and using the claimed invention. Randomex, Inc. v. Scopus Corp., 849
F.2d 585, 588 (Fed. Cir. 1988) ("It is concealment of the best mode of
practicing the claimed invention that
section 112 para.1 is designed to prohibit.") (emphasis in original); Hybritech,
Inc. v. Monoclonal Antibodies, Inc., 802 F.2d 1367, 1384-85 (Fed. Cir.
1986) ("in order to find that the best mode requirement is not satisfied,
it must be shown that the applicant knew of and concealed a better mode than he
disclosed").
The best mode
requirement differs from the enablement requirement, for failure to enable an
invention will produce invalidity whether or not the omission was deliberate,
whereas invalidity for omission of a better mode than was revealed requires
knowledge of and concealment of that better mode. See In re Gay, 309 F.2d 769,
772 (CCPA 1962) (best mode requirement precludes inventors "from applying
for patents while at the same time concealing from the public preferred
embodiments of their inventions which they have in fact conceived"). Thus the inventor must disclose the best mode
of what he claims as his invention. See
also, e.g., Brooktree Corp. v. Advanced Micro Devices, Inc., 977 F.2d 1555, 1575 (Fed. Cir.
1992) ("Invalidity for violation of the best mode requires intentional
concealment of a better mode than was disclosed . . . ." ) The question here raised relates to the best
mode obligation with respect to subject matter that is not part of the
invention, but that is used in conjunction therewith -- here the battery for
use with these battery-powered ICDs.
St. Jude argued at
trial that the inventors were required to include in the patent specification
the best battery known to them at the time the patent application was filed. The inventors had asked Honeywell to develop
an improved battery for use in these cardiac devices; Honeywell did so, and
about four months before the '288 application was filed Honeywell published an
article at the Power Sources Conference, describing the battery that it
developed. The inventors testified that
a battery was not part of their invention, that the Honeywell and other
batteries for ICDs were known when the '288 application was filed, that various
known batteries were usable in their device, that in the evolving battery art
other batteries were being developed, and that they actually chose a different
battery for their commercial device. The
inventors stressed that their invention was not about batteries, that there was
no intent to conceal the Honeywell or any battery, and that it was not
concealed. St. Jude argued that a
battery was necessary to operate the device, that the Honeywell battery should
have been mentioned, and that not mentioning it amounted to culpable
concealment. The jury found in favor of
CPI on this question.
The district court,
reversing the jury verdict, held that the inventors were required to include
the Honeywell battery in the patent specification, since it was the best
battery then known to them. The court
deemed it insufficient that Honeywell had publicly described and published the
battery, and found that Honeywell's publication was in "a forum for
battery specialists, not for cardiologists and inventors of ICDs." The court held that failure to include the
Honeywell battery in the specification invalidated the patent on best mode
grounds.
CPI states that the
district court erred in law, pointing out that the invention is not about
batteries, that the Honeywell battery was known, and that there was no evidence
or basis for inference of intent to conceal the battery. The obligation to disclose the best mode
relates to the invention that is described and claimed. See Engel Industries, Inc. v.
Lockformer Co., 946 F.2d 1528, 1532 (Fed. Cir. 1991) ("The best mode inquiry
is directed to what the applicant regards as the invention, which in turn is
measured by the claims.") Subject
matter that is not part of the invention that is claimed need not be included
in the specification, and thus is not subject to the best mode
requirement. As explained in Engel,
946 F.2d at 1532-33, "the reasons are pragmatic: the disclosure would be
boundless, and the pitfalls endless."
There was evidence
before the jury that persons knowledgeable in the field of the invention would
know the sources of batteries for pacemakers and related devices. There was no evidence of concealment, and the
jury had evidence that the Honeywell battery was published in a publication for
battery specialists. There was
substantial evidence whereby a reasonable jury could have found that the best
mode requirement had not been violated.
The grant of JMOL on this issue is reversed, and the jury verdict is
reinstated.
The Conditional New Trial
On the validity
issues, the district court granted a new trial in the event of our reversal of
the grant of judgment as a matter of law.
We review the grant of a new trial in accordance with Seventh Circuit
standards, see n.2 supra, as stated in, e.g., Billy-Bob
Teeth, Inc. v. Novelty, Inc., 329 F.3d 586, 590-91 (7th Cir. 2003)
("We review a grant of a new trial for abuse of discretion. A new trial may be granted only when the
verdict is against the manifest weight of the evidence.")
The jury verdicts
on the issues of obviousness and best mode were not against the manifest weight
of the evidence. See Continental
Air Lines, 401 F.2d at 30 ("If the evidence in the record, viewed from
the standpoint of the successful party, is sufficient to support the jury
verdict, a new trial is not warranted merely because the jury could have
reached a different result. Neither the
trial court nor this Court may substitute its judgment for that of the jury on
disputed issues of fact.") (quoting Gebhardt v. Wilson Freight
Forwarding Co., 348 F.2d 129, 133 (3d Cir. 1965)). Further, there was no issue of prejudicial
procedural error or incorrect instruction of law. In these circumstances the conditional grant
of a new trial exceeded the court's discretionary authority, and is vacated.
INFRINGEMENT
The jury found that
claims 4 and 13 of the '288 patent are not infringed. Only the judgment as to claim 4, the method
claim, is appealed.
CPI argues that the
district court incorrectly construed claim 4 as being in the form of 35 U.S.C.
§112 ¶6, and thereby incorrectly instructed the jury with respect to
infringement. CPI argues that on the
correct claim construction, the undisputed facts establish that the accused
devices infringe claim 4. St. Jude
disagrees, and also states that the misconduct of one of CPI's expert witnesses
so tainted the issue of infringement that in all events a new trial of
infringement is required if this court modifies the claim construction. The district court sustained the verdict of
non-infringement, and granted a conditional new trial on the ground of witness
misconduct.
Procedural Matters
St. Jude states
that CPI failed to preserve a right to appeal the claim construction, because
CPI did not make formal objection when the jury was instructed on the claim
construction. CPI responds that the
claim construction was decided at the Markman hearing, and was not a
proper subject of trial objection under Rule 51. St. Jude counters that all objections must be
raised at the specified times during a jury trial, or they are waived. Thus St. Jude states that CPI has no right to
appellate review of the claim construction that was decided at the Markman
hearing and on which the jury was instructed and the trial conducted.
Rule 51 prevents a
party from assigning error to an incorrect jury instruction that could have
been corrected if the error had been timely raised. A party must warn the court and the opposing
party that there has been an error of law.
Here, the asserted error was the decision of the Markman hearing,
held well before trial. The district
court's construction of the claims was resolved in that decision, and was the
subject of a written decision issued some six months before trial. The jury was instructed in accordance with
that decision.
CPI points out that
the issues of claim construction had been fully argued and briefed at the Markman
hearing, and that its disagreement concerning §112 ¶6 was well known to the
district court during that hearing. CPI
refers to the "futility" exception, recognized by the Seventh Circuit
in Chestnut v. Hall, 284 F.3d 816, 820 (7th Cir. 2002) ("A party
may be excused from complying with the formalities of Rule 51 where: (1) the
party's position has been previously made clear to the court; and (2) further
objection would be unavailing and futile. ") (citing Carter v. Chicago
Police Officers M.L., 165 F.3d 1071, 1078 (7th Cir. 1998)). Cf. Ecolab Inc. v. Paraclipse, Inc.,
285 F.3d 1362, 1369-70 (Fed. Cir. 2002) (applying regional circuit law to rule
51 and the futility exception).
When the claim
construction is resolved pre-trial, and the patentee presented the same
position in the Markman proceeding as is now pressed, a further
objection to the district court's pre-trial ruling may indeed have been not
only futile but unnecessary. In this
case the court's claim construction resulted from a hearing at which all
parties' positions were presented, and the applicability of §112 ¶6 to the
claims was extensively argued. The issue
was complex, and it was fully litigated to the court, who announced its
decision before the jury was instructed.
Objection under Rule 51 was not required to preserve the right to appeal
the Markman ruling.
Claim Construction
CPI argues that the
district court incorrectly construed clause (a) of claims 1 and 4:
(a) determining a condition of the heart from among
a plurality of conditions of the heart.
The court held that
clause (a) is in the step-plus-function form of §112 ¶6.[3] Implementing that holding, the court ruled
that clause (a) "is limited to detecting and distinguishing among
arrhythmia by analyzing the outputs of rate circuitry and PDF [probability
density function] circuitry," the process in the '288 specification. The jury was instructed that unless a
combination of rate output and PDF circuitry or the equivalent thereof was used
in the St. Jude device, the claim was not infringed.
CPI states that
this claim construction is incorrect, that clause (a) is not in §112 ¶6 form
and is not converted to that form simply because the preamble of the claim
states that the invention is "the method comprising the steps
of:". See claim 1, ante. CPI states that clause (a) simply recites a
step that is part of the claimed method, and that absent the signal "step
for" there is a presumption that a step does not invoke §112 ¶6. The district court disagreed, stating that if
clause (a) were construed as CPI proposes, it would "allow[] CPI to claim
all possible methods of detecting heart arrhythmia." Concluding that the patent would thus
"sweep[] too broadly," the court ruled that clause (a) covers only
the specific procedures in the specification for determining the condition of
the heart, and technologic equivalents of those procedures.
CPI is correct that
"claiming a step by itself, or even a series of steps, does not implicate
§112 ¶6," as explained in O.I. Corp. v. Tekmar Co., 115 F.3d 1576, 1582 (Fed. Cir. 1997). Thus clause (a) was inappropriately assigned
to §112 ¶6. However, removal of clause
(a) from §112 ¶6 does not automatically convert it into an open-ended step
without limits. A claim limitation is
always construed in light of the specification, whatever the form of the
claim. See, e.g., Kinik
Co. v. U.S. International Trade Comm'n, 362 F.3d 1359, 1365 (Fed. Cir.
2004) ("The words of patent claims have the meaning and scope with which
they are used in the specification and the prosecution history."); Multiform
Desiccants, Inc. v. Medzam, Ltd.,
133 F.3d 1473, 1478 (Fed. Cir. 1998) ("The best source for understanding a
technical term is the specification from which it arose, informed, as needed,
by the prosecution history."); Grain Processing Corp. v. American Maize
Products Co., 840 F.2d 902, 908 (Fed. Cir. 1988) ("All claims must be
construed in light of the specification and the prosecution history.").
CPI argues that
upon the correct claim construction the "determining" step is not
limited to any particular procedure, because the specification makes clear that
various methods may be used to determine the condition of the heart. The specification, after describing the PDF
circuitry, states that "conventional logic circuitry" can be used:
It is also to be noted that conventional
logic circuitry can be provided for determining, based on the previously
discussed inputs, the existence of various medical conditions, for example,
ventricular tachycardia, ventricular fibrillation and super‑ventricular
tachycardia. Such conventional logic
circuitry can be provided either in the dedicated cardiac state evaluation
circuit 34, or in one of the processors/controllers to be discussed below.
'288 patent, col. 10,
lines 19-28 (emphasis added). CPI argues
that the invention is not based on how the cardiac condition is determined, but
on the treatment that is applied to that condition. CPI states that the rate plus PDF method is
simply a preferred embodiment, and that this limitation should not be imported
into the claim.
We conclude that
the district court erred in applying §112 ¶6.
Method claims necessarily recite the steps of the method, and the
preamble words that "the method comprises the steps of" do not automatically
convert each ensuing step into the form of §112 ¶6. Nor does the preamble usage "steps
of" create a presumption that each ensuing step is in step-plus-function
form; to the contrary, the absence of the signal "step for" creates
the contrary presumption. The district
court's claim construction is modified accordingly; the "determining"
step must be construed, as for all claim steps, in light of the specification
and the prosecution history. We remand
to the district court for that purpose.
Infringement
CPI states that if
§112 ¶6 is eliminated from the claim construction, judgment in favor of CPI is
required. St. Jude states that if the
claim construction is changed, at a minimum there should be a new trial of infringement.
CPI states that the
jury reached the incorrect verdict of non-infringement of the '288 patent
because of the incorrect claim construction.
At the trial, on the instruction that only rate-plus-PDF detection
circuitry or its technologic equivalent was covered by the claim, the jury
found no infringement of the '288 patent.
There was extensive evidence that St. Jude did not use a rate-plus-PDF
procedure. CPI did present evidence to
try to prove that the St. Jude circuitry is equivalent to PDF circuitry, and
St. Jude presented contrary evidence.
CPI argues that on the correct claim construction, any method of
determining the condition of the heart would literally satisfy clause (a), and
that the question of §112 ¶6 equivalency should not have arisen. CPI argues that we can, and should, find
infringement as a matter of law once we correct the district court's claim
construction.
St. Jude responds
that if we modify the district court's claim construction, as we have, a new
trial is required so it can present evidence and argument that were not needed
under the district court's original claim construction, such as whether the
now-asserted scope of the claims is supported by the specification. St. Jude points out that it is entitled to
jury determination of the question of infringement. We agree.
It is well established that when an incorrect jury instruction -- such
as an incorrect claim construction -- removes from the jury a basis on which
the jury could reasonably have reached a different verdict, the verdict should
not stand. See Texas Digital
Sys. v. Telegenix, Inc., 308 F.3d 1193, 1201 (Fed. Cir. 2002) (an erroneous
instruction on claim interpretation that affects the jury's verdict on
infringement is grounds for a new trial); Ecolab Inc. v. Paraclipse, Inc., 285 F.3d 1362, 1373 (Fed. Cir.
2002) (same).
CPI is correct that
a claim construction limited to §112 ¶6 equivalency would remove the
possibility of finding infringement if the CPI and St. Jude circuitries were
not technologically equivalents but nonetheless determined the condition of the
heart. We conclude that a new trial of
infringement is required, for the question of infringement was not explored on
the purportedly less restrictive claim construction that avoids §112 ¶6. That question requires findings and conclusion
by the trier of fact.
The Sanctions for False Testimony
The district court
held that if a new trial of infringement is required, CPI should pay St. Jude's
attorney fees for the new trial because of the misconduct of a CPI infringement
expert. CPI argues that if the new trial
of infringement is based solely on the district court's erroneous claim
construction and is unrelated to the false testimony of the witness,[4]
the contingent sanction of attorney fees should be vacated.
The new trial here
ordered is unrelated to the witness' deception; indeed, the jury rendered a
verdict of noninfringement of the '288 patent despite his contrary
testimony. Therefore the conditional
sanction is vacated.
DAMAGES
The jury awarded
damages of $140 million for infringement of the '472 patent. The district court granted JMOL of
non-infringement of the '472 patent; that judgment is not appealed. CPI asks that the damages award be applied to
the '288 patent, arguing that the same evidence was presented for both patents
without distinction. St. Jude responds
that the damages award cannot be shifted to a patent that the jury found not to
be infringed, and argues that it is excessive in any event.
We conclude that it
is inappropriate to shift the jury's damages award. The damages for infringement of the '288
patent, should infringement be found on remand, requires determination on
remand.
PATENT
TERM EXTENSION
St. Jude by cross
appeal challenges the district court's ruling that the term of the '288 patent
was properly extended under the Drug Price Competition and Patent Term
Restoration Act (the Hatch-Waxman Act).
The Act permits a patentee to obtain an extension of the patent term if
marketing of the patented product was delayed due to federal regulatory review:
35 U.S.C. §156(a) The term of a patent which claims a product,
a method of using a product, or a method of manufacturing a product shall be
extended in accordance with this section from the original expiration date of
the patent, which shall include any patent term adjustment granted under
section 154(b), if --
. . . .
(4)
the product has been subject to a regulatory review period before its
commercial marketing or use;
(5) (A) except as provided in subparagraph (B) or
(C), the permission for the commercial marketing or use of the product after
such regulatory review period is the first permitted commercial marketing or
use of the product under the provision of law under which such regulatory
review period occurred;
(B) in the case of a patent which
claims a method of manufacturing the product which primarily uses recombinant
DNA technology in the manufacture of the product, the permission for the
commercial marketing or use of the product after such regulatory review period
is the first permitted commercial marketing or use of a product manufactured
under the process claimed in the patent;
(Emphasis added.)
Questions of
statutory interpretation receive plenary review on appeal. Warner-Lambert Co. v. Apotex Corp.,
316 F.3d 1348 (Fed. Cir. 2003); Hosiden Corp. v. Advanced Display
Manufacturers, 85 F.3d 1561, 1567 (Fed. Cir. 1996). The question here arises because the CPI
device is not the first device covered by the '288 patent to receive FDA
approval. CPI had granted licenses to
two other companies for defibrillators, however, term extension was not
requested based on the licensees' devices.
In CPI's application for extension based on its PRx defibrillator, CPI
stated that licenses had been granted for two other defibrillators covered by
the '288 patent, the Ventritex V-100 and the Medtronic PCD, for each of which
the licensee had obtained FDA approval.
The Patent and Trademark Office and the FDA granted the extension based
on the PRx approval period.
The district court
held that extensions under subsection (5)(A) need not be based on the first
FDA-approved medical device covered by the patent, but must be based on
"the first permitted commercial marketing or use of the product" that
is the basis of the application. The
district court stated that the statute gives patentees a choice "in
matching up products and the patents for which they seek extensions."
St. Jude argues
that the district court erred, and that CPI's PRx defibrillator cannot be a
basis for extension of the term of the '288 patent, no matter how independent
its FDA approval procedure, because the Ventritex and Medtronic ICDs were
previously approved and commercialized.
CPI responds that when various devices, all requiring separate
regulatory approval, are covered by the same patent, it suffices that the
particular device on which the application for extension is based is covered by
the patent and is subject to regulatory review, and that only one extension per
patent is available.
The district court
agreed with CPI, and held that §156(a)(5)(A) does not require that the device
on which the extension is based is the first approved product within the claims
of the patent. The court stated:
"The court should not read into subparagraph (a)(5)(A) the limiting
requirement that Congress imposed so clearly in writing subparagraph (a)(5)(B),
but only for method patents primarily using recombinant DNA
technology." The district court
relied on the fact that §156(a)(5)(A) refers to "marketing or use of the
product" that the patentee has selected, whereas subparagraph (a)(5)(B),
for DNA technology, refers to "the first permitted commercial marketing or
use of a product manufactured under the process claimed in the
patent." In Brown v. Gardner
the Court cautioned that "where Congress includes particular language in
one section of a statute but omits it in another section of the same Act, it is
generally presumed that Congress acts intentionally and purposely in the
disparate inclusion or exclusion."
513 U.S. 115, 120 (1994) (quoting Russello v. United States, 464
U.S. 16, 23 (1983)).
St. Jude argues
that the comparison between subparagraphs (a)(5)(B) and (a)(5)(A) is strained,
and does not support the distinction drawn by the district court. St. Jude criticizes the weight the court gave
to the change in text from "the" to "a," and directs
attention to Fisons PLC v. Quigg, 876 F.2d 99, 100-01 (Fed. Cir. 1989),
wherein this court held that a drug-patent extension must be based on the first
FDA approval of the active ingredient of the patented product because, under
the definition in §156(f)(2), the active ingredient is the approved
"product." Thus in Fisons
the court held that subsequent extensions were not available for subsequent
products using the same active ingredient that was the basis of the first
extension, implementing the principle that only one extension is available per
approved product. See Fisons,
876 F.2d at 100 ("[I]t follows that because Fisons' patented new products
containing cromolyn sodium did not qualify as the first permitted commercial marketing or use of the active
ingredient cromolyn sodium, extensions of the patent term for the subject
patents were not permissible.")
The district court
agreed that only one extension was available, but held that the patentee was
not required to rely on a licensee's version of the device as the basis for the
extension. The legislative history
supports this interpretation, for as originally proposed §156(a) required that
extensions "be granted only for the first approved product," H.R.
Rep. No. 98-857, pt. 1, at 38 (1984), but that provision was removed from the
legislation before enactment. See
Gulf Oil Corp. v. Copp Paving Co., 419 U.S. 186, 200 (1974) (Congress's
failure to enact a proposed version of a statute "strongly militates
against a judgment that Congress intended a result that it expressly declined
to enact.")
The decision that
extension was available based on CPI's PRx defibrillator is affirmed.
Lapse Due to Incorrect Payment of Maintenance
Fees
St. Jude also
argues that the '288 patent expired when CPI did not pay the correct
maintenance fee, and that although the payment was later corrected and accepted
by the Patent and Trademark Office, the patent must be deemed to have expired
with the error, at least for purposes of term extension:
35 U.S.C. §156(a) The term of a patent which claims a product,
a method of using a product, or a method of manufacturing a product shall be
extended in accordance with this section . . . if --
(1)
the term of the patent has not expired before an application is
submitted under subsection (d)(1) for its extension.
The district court
held that, in accordance with statute and regulation, the error had been
corrected and the patent had not expired.
CPI points out that
the statute provides for late payment and for correction of error without loss
of rights, and that this was achieved.
35 U.S.C. §41(c)(1) states:
§41(c)(1) If the Director accepts payment of a
maintenance fee after the six-month grace period, the patent shall be
considered as not having expired at the end of the grace period.
St. Jude argues
that this beneficence does not affect the requirement of §156(a)(1) that the
application for extension must be submitted before patent
"expiration," and that the later revival of an expired patent does
not overcome this stricture.
When the '288
patent was issued in 1983, the patentee was a "small entity" and
qualified for reduced fees under 35 U.S.C. §41(h)(1). From 1987 to 1998 the patentee paid the
maintenance fees at the reduced rate applicable to small entities. However, in 1985 the '288 patent was
non-exclusively licensed to a large entity, triggering the regulatory provision
whereby the small entity status is lost to the patentee. See 37 C.F.R. §1.9(d) (1985)
(providing that small entity status is lost when any rights are licensed to any
concern that does not qualify as a small entity). Meanwhile the patent was licensed to Eli
Lilly & Company, which does not qualify as a small entity. In 1998 CPI advised the PTO of the error,
stated that the erroneous payments as a small entity were made in good faith,
and tendered the additional sums due and statutory penalties. The PTO accepted the late payments on October
16, 1998.
St. Jude argues
that the patent expired in 1987 when the first incorrect maintenance fee was
paid. However, the statute is explicitly
contrary. See 35 U.S.C. §41(c)(1)
("If the Director accepts payment of a maintenance fee after the six-month
grace period, the patent shall be considered as not having expired at the end
of the grace period.") A similar
issue was considered in Ulead Systems, Inc. v. Lex Computer & Mgmt.
Corp., 351 F.3d 1139 (Fed. Cir. 2003), wherein this court confirmed that
the patent did not expire.
The district court
correctly held that the '288 patent did not expire, and that the application
for term extension was validly submitted.
The decision on this issue is affirmed.
Costs
Each party shall
bear its costs.
AFFIRMED IN PART,
REVERSED IN PART, AND REMANDED
[1] Cardiac Pacemakers, Inc. v. St. Jude Medical, Inc.,
NO. IP 96-1718-C H/G, 2000 U.S. Dist. LEXIS 17352 (S.D. Ind. Nov. 29, 2000)
(Claim Construction); Cardiac Pacemakers, Inc. v. St. Jude Medical, Inc.,
NO. IP 96-1718-C H/G, 2002 U.S. Dist. LEXIS 14767 (S.D. Ind. July 5, 2002)
(Amended Final Judgment).
[2] We apply the procedural law of the regional circuit in
reviewing the procedure underlying the district court's post-trial
determinations. See National
Presto Co. v. West Bend Co., 76 F.3d 1185, 1188 n.2 (Fed. Cir. 1996)
("On procedural matters not unique to the areas that are exclusively
assigned to the Federal Circuit, the law of the regional circuit shall be
applied.")
[3] 35 U.S.C. '112 &6. An element in a claim for a combination may
be expressed as a means or step for performing a specified function without the
recital of structure, material, or acts in support thereof, and such claim
shall be construed to cover the corresponding structure, material, or acts
described in the specification and equivalents thereof.
[4] The witness had concealed contradictory testimony that he
had given in a related case. CPI has
paid and is not appealing the sanctions already imposed, for St. Jude's
attorney fees and expenses associated with the false testimony.