Cardiac Pacemakers, Inc. v. St. Jude Medical, Inc.

• Decision Date: 26 March 2007
• Docket Number: No. 1:96-cv-1718-DFH-TAB.,1:96-cv-1718-DFH-TAB.
• Citation: 483 F.Supp.2d 734
• Parties: CARDIAC PACEMAKERS, INC., Guidant Sales Corporation, Mirowski Family Ventures, LLC, and Anna Mirowski, Plaintiffs, v. ST. JUDE MEDICAL, INC., and Pacesetter, Inc., Defendants.
• Court: U.S. District Court — Southern District of Indiana

483 F.Supp.2d 734

CARDIAC PACEMAKERS, INC., Guidant Sales Corporation, Mirowski Family Ventures, LLC, and Anna Mirowski, Plaintiffs, v. ST. JUDE MEDICAL, INC., and Pacesetter, Inc., Defendants.

No. 1:96-cv-1718-DFH-TAB.

United States District Court, S.D. Indiana, Indianapolis Division.

March 26, 2007.

J. Michael Jakes, Kara Farnandez Stoll, Michael Andre Morin, Michael Vincent O'Shaughnessy, Finnegan, Henderson, Farabow, Garrett & Dunner, LLP, Washington, DC, John R. Schaibley, III, Robert K. Stanley, Baker & Daniels, Indianapolis, IN, for Plaintiffs.

Daniel Pierre Muino, Frederick Brown, Gibson Dunn & Crutcher LLP, San Francisco, CA, David A. Segal, Gibson Dunn & Crutcher LLP, Irvine, CA, Denis R. Salmon, H. Mark Lyon, Gibson Dunn & Crutcher LLP, Palo Alto, CA, Jeffrey M. Olson, Sidley Austin LLP, Los Angeles, CA, Jay G. Taylor, Michael T. McNally, Philip A. Whistler, Thomas Eugene Mixdorf, Ice Miller LLP, Indianapolis, IN, for Defendants.

ENTRY ON POST-REMAND MOTIONS FOR SUMMARY JUDGMENT

HAMILTON, District Judge.

Introduction

This long-running patent infringement lawsuit is before the court on motions for summary judgment on the issues of infringement and anticipation. As explained in detail below, the court finds as a matter of law that defendants' devices infringe the one method claim still at issue. The court also finds as a matter of law that the remaining method claim, under the broader claim construction applied after the Federal Circuit's remand, is invalid as anticipated by the prior art. The court is entering final judgment for defendants.

Implantable cardiac defibrillators ("ICDs") are sophisticated electrical devices that can deliver life-saving therapy to correct dangerous and even fatal abnormal heart rhythms. Plaintiffs Cardiac Pacemakers, Inc., Guidant Sales Corporation, Mirowski Family Ventures, LLC, and Anna Mirowski (collectively, "CPI") sued defendants St. Jude Medical, Inc., and Pacesetter, Inc. (collectively, "St.Jude") in 1996 for infringing numerous claims of four United States patents relating to ICDs. Plaintiffs voluntarily dismissed claims under one patent before trial, and the court on summary judgment held invalid the relevant claims of another patent. The Federal Circuit affirmed that decision in an appeal of a partial final judgment on that issue. Cardiac Pacemakers, Inc. v. St. Jude Medical, Inc., 296 F.3d 1106 (Fed.Cir.2002).

In 2001, the case went to trial on four claims of the two remaining patents. The jury found that one patent (U.S. Patent No. 4,407,288) was valid but not infringed. The jury found that the other (U.S. Patent No. 4,316,472) was valid and infringed, and awarded CPI damages of $140 million. This court later granted judgment as a matter of law to St. Jude on all claims, including a finding that the relevant claims of the '288 patent were invalid as obvious in light of the prior art. Cardiac Pacemakers, Inc. v. St. Jude Medical, Inc., 2002 WL 1801525 (S.D.Ind.2002). To the court's surprise, CPI did not appeal the portion of the judgment setting aside the $140 million damage award on the '472 patent. Instead, CPI appealed primarily on the basis of a claim construction issue on one claim, claim 4, of the '288 patent that the jury found was not infringed, and appealed this court's finding of invalidity for obviousness, among several other issues.

The Federal Circuit affirmed in part and reversed in part. The Federal Circuit agreed that the construction of claim 4 needed a fresh look, though the Federal Circuit did not itself decide how the claim should be construed. The Federal Circuit remanded for reconsideration of the construction of the one claim and a new trial on that one claim. Cardiac Pacemakers, Inc. v. St. Jude Medical, Inc., 381 F.3d 1371, 1381-82 (Fed.Cir.2004). The Federal Circuit also held that this court erred in overturning the jury's finding that claim 4 of the '288 patent was valid and not obvious. Id. at 1378.

After remand, the parties staked out their positions in new claim construction briefs on claim 4, as well as a series of motions for summary judgment. The court construed claim 4 and addressed several other issues, but not all of the pending motions for summary judgment. Cardiac Pacemakers, Inc. v. St. Jude Medical, Inc., 418 F.Supp.2d 1021, 1031 (S.D.Ind.2006). The Federal Circuit denied CPI's petition for a writ of mandamus, which had argued that this court was violating the Federal Circuit's mandate by leaving open for consideration on remand several issues pursued by St. Jude. In re Cardiac Pacemakers, Inc., 183 Fed.Appx. 967 (Fed.Cir. 2006).¹

The parties then tried to settle the case. On July 31, 2006, the parties announced an interesting partial settlement that substantially narrowed the issues and limited the potential damages. See Remand Docket No. 181, Exs. A & B (SEC Form 8-K's). Plaintiffs agreed not to pursue lost profits, agreed to cap any royalty at no more than three percent of net sales revenues from infringing sales, and agreed not to pursue prejudgment interest. Defendants agreed not to pursue a fraud claim or an inequitable conduct defense based on certain alleged misconduct, and agreed not to pursue any claim for attorney fees. The parties later informed the court that continued settlement negotiations had reached an impasse so that the court should return to the remaining summary judgment motions. Each side filed a short statement commenting on the effects of the court's claim construction interpretation and their partial settlement on the issues presented by the motions. Remand Docket Nos. 198 & 202. More recent settlement efforts have also reached an impasse. The court now addresses the pending motions as follows.

I. Infringement Issues

The court's March 1, 2006 claim construction ruling on remand narrowed the issues on infringement considerably. The undisputed facts before the court show that the accused St. Jude devices perform all steps of the '288 patent's claim 4 method when the devices actually carry out the form of therapy known as "cardioversion" (as distinct from both pacing therapy and defibrillation). In other words, plaintiffs are entitled to partial summary judgment on that question. St. Jude has had ample opportunity to distinguish the operation of its devices from the newly-construed version of claim 4, and it has not done so. CPI's motion for summary judgment on infringement is granted to the extent that the actual operation of those devices to deliver cardioversion therapy infringes claim 4.

That finding does not go so far as to hold defendants liable for infringement, however. CPI's decision to limit its case now to the claim 4 method means that CPI must show such actual use of the St. Jude devices, see 418 F.Supp.2d at 1041-42, and it must show that St. Jude induced any infringement that might be shown. Those are issues as to which neither side has shown it is entitled to summary judgment.²

CPI has also asked the court to rule on a question that may be relevant to damages. The issue is whether St. Jude had available to it a non-infringing alternative design under U.S. Patent No. 4,880,005, a patent for an ICD device that would have had the capacity to learn from its experience in treating arrhythmias. Claim 4 of the '288 patent requires the step of "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." Under the '005 patent, the device's choice of therapy would depend on the patient's history with the device. For example, a device might be programmed initially to respond to a certain form of ventricular tachycardia (rapid heart rate) with pacing shocks, to be followed by more powerful cardioverting shocks if the pacing is not successful. But the device could also be programmed to respond to the second or later similar episodes of tachycardia by skipping the previously unsuccessful therapy of pacing shocks and going straight to the cardioverting shocks. Defendants argue that a device programmed in this manner to learn from its experience in treating a patient's condition does not provide "a unique sequence of events corresponding to said determined condition," as required by claim 4 of the '288 patent.

CPI argues that this question is too hypothetical at this stage and that there are issues of fact as to whether the '005 form of programming was in fact available to St. Jude during the period of alleged infringement. The court agrees with CPI that the issue is not yet suitable for a definitive ruling on summary judgment. There are disputed factual issues as to whether and exactly when a design under the '005 patent would have been available to St. Jude.

Accordingly, CPI's motion for summary judgment on infringement (Remand Docket No. 72) is granted to the extent that any proven actual use of the St.Jude devices for cardioversion therapy infringes claim 4 as a matter of law. CPI's motion is denied in other respects, without reaching the specific intent issue raised recently. St. Jude's motion for summary judgment on the issue of infringement (Remand Docket No. 85) is also denied.

II. Anticipation

A patent claim is invalid as anticipated if every limitation in a claim is found in a single prior art reference, either explicitly or inherently. See Schering Corp. v. Geneva Pharmaceuticals, Inc., 339 F.3d 1373, 1377 (Fed.Cir.2003) (affirming summary judgment of invalidity based on anticipation); MEHL/Biophile Int'l Corp. v. Milgraum, 192 F.3d 1362, 1365 (Fed.Cir.1999) (same). The first step of an anticipation analysis is claim construction; the second step is a comparison of the construed claim to the prior art. Helifix, Ltd. v. Blok-Lok, Ltd., 208 F.3d 1339, 1346 (Fed.Cir.2000). Anticipation must be shown by clear and convincing evidence. Id. To be anticipating, a prior art reference must disclose "each and every limitation of the claimed invention[,] ... must...