157 F.3d 1340 (Fed. Cir. 1998), 96-1165, C.R. Bard, Inc. v. M3 Systems, Inc.

Docket Nº:96-1165.
Citation:157 F.3d 1340
Party Name:48 U.S.P.Q.2d 1225 C.R. BARD, INC., Plaintiff-Appellant, v. M3 SYSTEMS, INC., Defendant-Appellee.
Case Date:September 30, 1998
Court:United States Courts of Appeals, Court of Appeals for the Federal Circuit
 
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Page 1340

157 F.3d 1340 (Fed. Cir. 1998)

48 U.S.P.Q.2d 1225

C.R. BARD, INC., Plaintiff-Appellant,

v.

M3 SYSTEMS, INC., Defendant-Appellee.

No. 96-1165.

United States Court of Appeals, Federal Circuit

September 30, 1998

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John F. Sweeney, Morgan & Finnegan, L.L.P., New York City, argued for plaintiff-appellant. With him on the brief were Harry C. Marcus, Desiree M. Stahl, and Walter G. Hanchuk. Of counsel were Warren H. Rotert and Steven F. Meyer.

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Richard D. Harris, Law Offices of Dick and Harris, and Paul E. Slater, Sperling, Slater & Spitz, P.C., Chicago, Illinois, argued for defendant-appellee. With them on the brief were Max Shaftal, Jordan A. Sigale, and Jovan N. Jovanovic, Law Offices of Dick and Harris, and Greg Shinall, Sperling, Slater & Spitz, P.C.

Before MAYER, Chief Judge, NEWMAN and BRYSON, Circuit Judges.

Opinion for the court by Judge NEWMAN except for Part I.E (on-sale issue) and Part VI.C (attempt to monopolize). Judge BRYSON does not join Parts I.A-D of Judge NEWMAN'S opinion. The district court's judgment concerning the on-sale bar is affirmed in separate opinions by Chief Judge MAYER and Judge BRYSON. The district court's judgment concerning the attempt to monopolize issue is reversed-in-part by Judge NEWMAN'S opinion (Parts VI.A-B), which Chief Judge MAYER and Judge BRYSON join, and affirmed-in-part by Judge BRYSON'S opinion (Part II), which Chief Judge MAYER joins. Judge NEWMAN dissents with respect to the on-sale bar and attempt to monopolize issues.

PAULINE NEWMAN, Circuit Judge.

In suit are United States Patent No. 4,944,308 issued July 31, 1990 (the '308 patent) and United States Reissue Patent No. RE 34,056 issued September 8, 1992 (the '056 patent), both entitled "Tissue Sampling Device." These patents originated with the work of Dr. Per Gunner Lindgren, a physician in Sweden, and are now owned by appellant C.R. Bard, Inc.

The patented inventions are devices for taking samples of body tissue for biopsy purposes, wherein a biopsy needle firing device or "gun" mechanically injects a biopsy needle assembly into the core body tissue. These devices are described as improving the speed, accuracy, ease, and patient comfort of tissue sampling, compared with manually inserted biopsy needles. They are said to be particularly advantageous for sampling small or movable lesions and fibrous or firm tissues, because the rapidly and firmly fired needles can penetrate even fibrotic lesions before the lesions can slip aside. The patented guns and needles have achieved commercial success.

Bard sued M3 Systems in August 1993 in the United States District Court for the Northern District of Illinois, 1 asserting that M3's ProMag biopsy gun and ACN/SACN biopsy needle assemblies infringed the '308 and '056 patents, respectively. M3 raised the defenses that the patents are invalid on several grounds and are not infringed, and also charged Bard with fraud, antitrust law violation, and patent misuse. The jury rendered special verdicts in favor of M3 on every issue, finding the '056 patent invalid and not infringed on each of the grounds of anticipation, obviousness, violation of a section 102(b) bar, incorrect naming of inventors, and non-compliance with reissue requirements; and finding the '308 patent invalid and not infringed on grounds of anticipation, obviousness, and insufficient written description. The jury also found that Bard perpetrated fraud in the Patent and Trademark Office (PTO) in obtaining both patents, that Bard misused both patents, and that Bard violated antitrust law, awarding $1.5 million in antitrust damages, trebled by the district court.

The district court denied all post-trial motions. This appeal followed. This court affirms the judgment of invalidity of the '056 patent and vacates the judgment of noninfringement of the '056 patent. The judgment of invalidity of the '308 patent is reversed and the judgment of noninfringement is affirmed. The judgments of misuse and fraud are reversed. The judgment of antitrust violation on the ground of attempt to monopolize is affirmed, but the antitrust damages award is vacated, for redetermination upon remand.

THE PATENTED INVENTIONS

The First Generation Device--The PCT Patent Application

In 1981 Dr. Lindgren, working in Sweden with Jan Allard, an engineer, designed and

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constructed the first of several successively improved mechanical biopsy guns. This "first generation" gun was designed to fire a commercially available biopsy needle assembly made by the Baxter Travenol Company, having the brand name "Tru-Cut." The Tru-Cut is a double needle consisting of a hollow outer needle called the cannula and an inner needle called the stylet. The stylet is solid except for a recess near its point. In the manual procedure for which the Tru-Cut was designed, the physician would first extend the stylet and insert the assembly into the body tissue, whereupon the tissue to be sampled would flow into the recess in the stylet; the physician would then push the cannula into the body tissue to surround the stylet and cut and trap the tissue sample in the recess.

This procedure required the physician to use both hands to manipulate the needles, while a second physician would hold and manipulate the ultrasound equipment that is usually required to view the interior of the body and direct insertion of the needles. Dr. Lindgren sought to mechanize this procedure in order to improve the speed and accuracy of insertion, to reduce human error, and to permit a physician to perform the biopsy without assistance by providing a sampling device that can be operated with one hand while the other hand holds the ultrasound apparatus.

The first generation gun is a box-like structure fitted with two spring-loaded drivers associated with slots that are configured to hold the cannula and stylet of the Tru-Cut needle assembly. To use this gun the physician must first "cock" each of the spring-loaded drivers. This cocking action, as it was often called at trial, is referred to as pre-tensioning or energizing in the patent documents. Cocking is performed by hand or with a specially designed tool described as a miniature crowbar. After the drivers are cocked, the stylet and cannula are placed in the appropriate slots and the gun housing is closed. The gun is then aimed at the target tissue and a trigger mechanism releases the stylet and cannula in rapid sequence. The needles are then manually retrieved.

Dr. Lindgren and Mr. Allard filed a patent application on the first generation gun under the Patent Cooperation Treaty (PCT). The invention was assigned to Radiplast AB, a small Swedish company associated with Dr. Lindgren. The PCT application was filed on March 31, 1982 and was published on October 13, 1983. It is prior art to the United States patents in suit.

The Second Generation--The '056 Reissue Patent

Starting in 1984, Dr. Lindgren undertook to improve the gun so that it would not be necessary for the physician to cock the two drivers manually before installing the biopsy needles, a step described as awkward and inefficient. In 1985 Dr. Lindgren, working with Dan kerfeldt, an engineer, designed a mechanism whereby the drivers are cocked by external action after the needles are placed in the gun and the housing is closed. In this mechanism rods are attached to each of the spring-loaded drivers, extend out the back of the gun, and culminate in a ring or handle. By pulling the ring or handle the operator simultaneously cocks both drivers, moving the needles rearward. A trigger mechanism then fires the stylet and cannula, in rapid sequence, into the tissue to be sampled.

The Tru-Cut needles were not usable with the second generation gun, for their structure was such that they could not be moved rearward as well as propelled forward. New needles were designed with a modified hub and flange structure and a slit in the stylet flange to facilitate placement in the gun. Corresponding structural changes were made to the gun to accommodate the changes in the needles. Radiplast, as assignee, filed a patent application in Sweden on February 19, 1986. The United States application was filed on July 30, 1986, naming Dr. Lindgren as the inventor. Corresponding United States Patent No. 4,699,154 (the '154 patent) was issued on October 13, 1987, with claims to the combination of the second generation gun and the new needle assembly. The '154 patent did not claim the needle assembly alone.

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In 1989 Bard, having become Radiplast's distributor in 1987, acquired ownership of the Radiplast patents. Bard applied for reissue of the '154 patent in order to add claims to the needle assembly alone. This reissue patent issued on September 8, 1992, and is the '056 patent in suit. During the reissue proceeding Bard and Dr. Lindgren petitioned the PTO to correct the inventorship to include Dan kerfeldt. In addition, Bard described to the PTO various activities of Radiplast in the United States, as shall be discussed in connection with the on-sale issue.

The Third Generation Gun--The '308 Patent

Dankerfeldt continued to work on improving these devices. He sought to make the gun easier to use, especially by inexperienced physicians. Because pulling the cocking ring required significant manual force to overcome the simultaneous resistance of both driver springs, he designed an external integrated cocking mechanism that energized the two springs sequentially, thereby requiring less force than did the simultaneous cocking mechanism of the second generation gun. The third generation gun also provided for...

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