Critikon, Inc. v. Becton Dickinson Vascular Access, Inc.

• Decision Date: 12 August 1997
• Docket Number: Nos. 95-1322,95-1363,s. 95-1322
• Citation: 43 USPQ2d 1666,120 F.3d 1253
• Parties: CRITIKON, INC., Plaintiff-Cross Appellant, v. BECTON DICKINSON VASCULAR ACCESS, INC., Defendant-Appellant.
• Court: U.S. Court of Appeals — Federal Circuit

Page 1253

120 F.3d 1253

43 U.S.P.Q.2d 1666

CRITIKON, INC., Plaintiff-Cross Appellant, v. BECTON DICKINSON VASCULAR ACCESS, INC., Defendant-Appellant.

Nos. 95-1322, 95-1363.

United States Court of Appeals Federal Circuit.

Aug. 12, 1997.

Rehearing Denied; Suggestion for Rehearing In Banc

Declined Sept. 24, 1997.

Harry J. Roper, Roper & Quigg, Chicago, IL, argued for plaintiff/cross-appellant. With him on the brief was George S. Bosy. Of counsel on the brief was Madonna M. Malin, Johnson & Johnson, New Brunswick, NJ. Of counsel was Ellen D. Law, Roper & Quigg.

Edward F. Mullowney, Fish & Neave, Palo Alto, CA, argued for defendant-appellant. With him on the brief was Richard M. Barnes, Fish & Neave, New York City. Of counsel on the brief was Leslie Gordon Fagen, Paul, Weiss, Rifkind, Wharton & Garrison, New York City.

Before ARCHER, Chief Judge, RICH, and MAYER, Circuit Judges.

RICH, Circuit Judge.

DECISION

Becton Dickinson Vascular Access, Inc. (Becton Dickinson) appeals from the April 10, 1995 judgment of the United States District Court for the District of Delaware, No. 93-108-JJF, issuing a permanent injunction in favor of Critikon, Inc. (Critikon) enjoining Becton Dickinson from making, using, selling or offering to sell its infringing safety catheter products in the United States based on U.S. Patent Nos. 4,952,207, reissued as RE34,416, and 4,978,344 (the patents). Following a bench trial, the district court held that: (1) the patents were not invalid; (2) Becton Dickinson had infringed the patents, both literally and under the doctrine of equivalents; (3) the infringement was not willful; (4) Critikon did not engage in inequitable conduct; and (5) Critikon was eligible for injunctive relief. Becton Dickinson appeals the holdings on validity, infringement and inequitable conduct underlying the permanent injunction. Critikon cross-appeals the finding that infringement was not willful. We affirm-in-part and reverse-in-part and remand.

BACKGROUND

The patents and relevant claims in suit are claims 8, 21, and 56 of U.S. Patent No. RE34,416 (Lemieux reissue patent) and U.S. Patent No. 4,952,207, (original Lemieux patent) and claims 18 and 19 of U.S. Patent No. 4,978,344, (Dombrowski patent). These patents are in the field of intravenous (IV) catheters. IV catheters are thin tubes that are inserted into a vein for the administration of fluids and the like. A needle is used to insert the tube into the vein and then the needle is withdrawn, leaving the tube in the vein. The patents are specifically directed to safety IV catheters, designed to protect health care workers from accidental needle sticks. They feature a needle guard that automatically moves into position over the tip of the needle as the needle is withdrawn from the IV catheter. For ease of reference, we will refer to the reissue and original Lemieux patents collectively as the "Lemieux patents." Claims were added by the reissue.

Through a series of amended complaints, Critikon filed an infringement action against Becton Dickinson based on the Lemieux patents and the Dombrowski patent. The first such complaint alleged infringement of claim 8 of the original Lemieux patent and subsequently included a motion for preliminary injunction to enjoin Becton Dickinson from making, using or selling its catheter product for the pendency of the suit. On July 16, 1993, the district court granted the motion for preliminary injunction based on claim 8 of the original Lemieux patent. Becton Dickinson immediately filed a notice of appeal and moved us to stay the preliminary injunction pending its appeal. On August 26, 1993, we denied that motion.

In the interim, Critikon amended its complaint to assert a claim for infringement of the Dombrowski patent and, subsequently, the Lemieux reissue patent. Further, Becton Dickinson amended its answer to add the defense that the Lemieux patents were unenforceable because of Critikon's allegedly inequitable conduct during the course of prosecution.

Having obtained a trial date, Becton Dickinson withdrew its appeal to us of the preliminary injunction and, on November 1, 1993, the parties commenced a two week bench trial on liability and damages issues. The district court issued a Memorandum Opinion on July 18, 1994, finding, inter alia, that Becton Dickinson's catheter products infringed claims 8, 21, and 56 of the Lemieux patents and claims 18 and 19 of the Dombrowski patent. Further, the district court held the patents valid and enforceable. Critikon moved for a permanent injunction, and, on April 10, 1995, the district court issued the order enjoining Becton Dickinson that is the subject of this appeal.

DISCUSSION

1. Infringement/Validity

We review a district court's judgment for errors of law and clearly erroneous findings of fact. Fed.R.Civ.P. 52(a). The district court found the patents-in-suit not invalid and infringed, both literally and under the doctrine of equivalents. After careful consideration, we discern no clear error in the court's findings of fact or error in its conclusions of law and affirm the district court's findings of no invalidity and infringement.

2. Inequitable Conduct

On appeal, Becton Dickinson argues that Critikon's failure to disclose U.S. Patent No. 4,834,718 (the McDonald patent) during both the prosecution of the original Lemieux patent and the Lemieux reissue patent constituted inequitable conduct. Becton Dickinson argues that the district court's failure to find intent is contrary to the weight of the evidence. We agree. We hold that the McDonald patent was material to patentability and Critikon should have disclosed it to the Patent and Trademark Office (PTO). But, more importantly, during the reissue proceedings, Critikon should have disclosed that the original Lemieux patent was concurrently involved in the present litigation and that claims of invalidity and inequitable conduct were asserted against the patent. Failure to disclose the McDonald patent and the fact that the Lemieux patent was in litigation was done with an intent to mislead or deceive and rises to the level of inequitable conduct.

A determination of inequitable conduct is committed to a district court's discretion. Accordingly, the court's ultimate determination is reviewed for abuse of discretion; the subsidiary factual questions are reviewed for clear error and are not to be disturbed unless we have a definite and firm conviction that a mistake has been committed. Amgen, Inc. v. Chugai Pharmaceutical Co., 927 F.2d 1200, 1215, 18 USPQ2d 1016, 1028 (Fed.Cir.1991).

A patent applicant's duty to disclose material information to the PTO arises under the general duty of candor, good faith, and honesty embodied in 37 C.F.R. § 1.56(a) (1996). Specifically, applicants have a duty to disclose to the PTO information of which they are aware which is material to the examination of the application. 37 C.F.R. § 1.56(a) (1996). This duty is also applicable to reissue proceedings. 37 C.F.R. § 1.175(a)(7) (1996).

However, a breach of the disclosure duty alone does not render the patent unenforceable. There must be a showing of inequitable conduct. Inequitable conduct resides in the failure to disclose material information with an intent to deceive or mislead the PTO. J.P. Stevens & Co. v. Lex Tex, Ltd., 747 F.2d 1553, 1559-60, 223 USPQ 1089, 1092 (Fed.Cir.1984). Once thresholds of materiality and intent have been established, the court conducts a balancing test and determines whether the scales tilt to a conclusion that "inequitable conduct" occurred. Halliburton Co. v. Schlumberger Tech. Corp., 925 F.2d 1435, 1440, 17 USPQ2d 1834, 1839 (Fed.Cir.1991). The more material the omission or the misrepresentation, the lower the level of intent required to establish inequitable conduct, and vice versa. Akzo N.V. v. United States Int'l Trade Comm'n, 808 F.2d 1471, 1 USPQ2d 1241 (Fed.Cir.1986).

A. Intent

Becton Dickinson argues that the district court ignored the weight of the evidence in holding that Becton Dickinson failed to establish by clear and convincing evidence that the Lemieux patents were unenforceable due to inequitable conduct. Our review of the record leads us to conclude that Critikon failed to cite the McDonald patent and to disclose the ongoing litigation to the PTO with intent to mislead or deceive. Direct evidence of intent or proof of deliberate scheming is rarely available in instances of inequitable conduct, but intent may be inferred from the surrounding circumstances. J.P. Stevens, 747 F.2d at 1560, 223 USPQ at 1092. For example, intent may be inferred where a patent applicant knew, or should have known, that withheld information would be material to the PTO's consideration of the patent application. Driscoll v. Cebalo, 731 F.2d 878, 885, 221 USPQ 745, 751 (Fed.Cir.1984).

A relatively high degree of intent may be inferred under the facts of this case. Critikon was aware of the McDonald Patent. It was aware that the "retaining means" was a point of novelty the examiner relied upon during the course of prosecution. It knew or should have known that the "retaining means" disclosed in the McDonald patent was relevant to a point of novelty in the Lemieux proceedings. And, despite this, it did not disclose the patent or provide a good faith explanation for not disclosing the patent. Furthermore, despite the clear materiality of the ongoing litigation to the reissue proceedings, Critikon never disclosed its existence to the PTO.

Critikon was intimately familiar with the McDonald patent. Both of Critikon's patent counsel who were involved in the prosecution of the Lemieux patents, Mr. Colletti and Mr. York, had reviewed the McDonald patent in detail. On appeal, Critikon argues that Mr. Colletti believed that the reference was not material and that Mr. York had no recollection of the patent. However, at one point Mr. York reviewed the McDonald patent and in handwritten annotations opined that all the claims,...