Mckesson Information Solutions v. Bridge Medical

• Decision Date: 18 May 2007
• Docket Number: No. 2006-1517.,2006-1517.
• Citation: 487 F.3d 897
• Parties: McKESSON INFORMATION SOLUTIONS, INC., Plaintiff-Appellant, v. BRIDGE MEDICAL, INC., Defendant-Appellee.
• Court: U.S. Court of Appeals — Federal Circuit

487 F.3d 897

McKESSON INFORMATION SOLUTIONS, INC., Plaintiff-Appellant, v. BRIDGE MEDICAL, INC., Defendant-Appellee.

No. 2006-1517.

United States Court of Appeals, Federal Circuit.

May 18, 2007.

Daniel Johnson, Jr., Morgan Lewis & Bockius LLP, of San Francisco, California, argued for plaintiff-appellant. With him on the brief was Mark K. Dickson, Winston & Strawn LLP, of San Francisco, California. Of counsel on the brief was Marcus T. Hall.

Jose L. Patińo, Morrison & Foerster LLP, of San Diego, California, argued for defendant-appellee. With him on the brief were Eric M. Acker and Katherine L. Parker.

Before NEWMAN, Circuit Judge, CLEVENGER, Senior Circuit Judge, and BRYSON, Circuit Judge.

Opinion for the court filed by Circuit Judge CLEVENGER. Dissenting opinion filed by Circuit Judge NEWMAN.

CLEVENGER, Senior Circuit Judge.

Plaintiff McKesson Information Solutions, Inc. ("McKesson") appeals the final decision of the United States District Court for the Eastern District of California dismissing McKesson's infringement suit against defendant Bridge Medical, Inc. ("Bridge") after the court found the only patent at issue, U.S. Patent No. 4,857,716 ("the '716 patent"), unenforceable due to inequitable conduct.

As set forth in considerable detail below, this case involves McKesson's nondisclosure of three items of information during prosecution of the '716 patent in a setting where the applicant had co-pending applications. The district court found each of the three nondisclosures individually and collectively material to prosecution of the application that led to the '716 patent. With regard to deceptive intent regarding each nondisclosure, the district court found circumstantial evidence strongly supports an inference of deceptive intent. After assessing all the facts, the district court held that McKesson failed to provide a credible explanation for the material nondisclosures. As the district court noted, this was not a case of mistake or negligence—the prosecuting attorney testified that he would make all the same nondisclosure decisions again if prosecuting the same applications today.

The district court's thorough written opinion documents the court's correct understanding and application of the relevant precedent. The issues of materiality and intent are fact-driven. With regard to the issue of intent, the law recognizes that deceptive intent is virtually never shown or disproved by direct evidence. Instead, the ultimate fact finding on the issue depends on assessment of all the inferences, favorable and unfavorable, that can be drawn from pertinent evidence. To prevail on appeal, McKesson must demonstrate that the district court's findings of fact are clearly erroneous. After careful review of the record, we conclude that McKesson has not met its burden, and we therefore affirm.

I

A

The '716 patent provides "a patient identification system for relating items with patients and ensuring that an identified item corresponds to an identified patient." '716 patent, at [57]. This is accomplished first by providing a set of bar codes associated with a given patient such that one bar code from the set is physically attached to the patient and the other bar codes from the set are physically attached to, for example, the patient's medications; and second by providing a portable handheld bar code reader (or patient terminal) wirelessly connected to a base station unit (typically located in the patient's room) that communicates via modem with a system computer capable of "processing and storing patient data." Id. col.30 l.23— col.31 l.17. Thus, among the handheld patient terminal, the base station, and the system computer, the '716 patent teaches a "three node approach to communications." J.A. at 366. Moreover, because the handheld patient terminals are portable, it is desirable to prevent one such terminal from wirelessly communicating with a base station in, say, an adjacent room. The base stations of the '716 patent therefore include "a programmable unique identifier" that "only allow[s] communication with a portable handheld patient terminal . . . having a corresponding program identifier." '716 patent col.31 ll.2-7.

The only independent claim of the '716 patent incorporates both of these features— i.e., three-node communications and a programmable unique identifier—as limitations. Claim 1 thus provides:

1. A patient identification and verification system comprising:

(a) programmed system computer means for processing and storing patient data;

(b) input means operatively interconnected to the programmed system computer means for input of data to the programmed system computer means;

(c) output means operatively interconnected to the programmed system computer means for output of data from the programmed system computer means;

(d) first bar code identifier means adapted for attachment to a patient for identification of the patient, the bar code identifier means including a patient unique code;

(e) a plurality of second bar code identifier means for identifying patient care related items, such as medication, etc.;

(f) the input means and output means including:

(i) microprocessor controlled portable handheld patient terminal means having bar code reader means for scanning the first bar code identifier means to identify the patient and for scanning the second bar code identifier means for relating various items to a specific patient, the portable handheld patient terminal means further including keyboard means for data entry and display means for display of information, the portable handheld patient terminal means including electromagnetic wave transceiver means including means for transmission of patient and item data as an electromagnetic wave which is representative of the first and second bar code identifier means scanned by the bar code reader means and including means for receipt of data as an electromagnetic wave;

(ii) microprocessor controlled base station means including electromagnetic wave transceiver means for receipt of and transmission of the patient and item data as an electromagnetic wave to the electromagnetic wave transceiver means of the portable handheld patient terminal means, the base station means being interconnected to the programmed system computer means at least in part by electrical lines for receipt and transmission of the patient and item data on the electrical lines to the programmed system computer means, the base station means includes a programmable unique identifier, the base station means including means for only allowing communication with a portable handheld patent [sic] terminal means having a corresponding program identifier, the patient system including means for programming the portable handheld patient terminal means with the corresponding identifier ["programmable unique identifier" limitation]; and

(iii) the programmed system computer means including program means for verifying the patient and item data properly correspond and transmitting an alarm signal if improper correspondence noted.

Id. col.30 l.23—col.31 l.17 (emphasis added).

On October 6, 1987, claim 1 was submitted in substantially this form—except that the "programmable unique identifier" limitation was separated as a limitation in dependent claim 6—as part of parent Application No. 06/862,278 ("the '278 application") (subsequently abandoned) in response to an April 6, 1987, rejection by Examiner David Trafton of the United States Patent and Trademark Office ("PTO"). Accompanying this submission were the remarks of prosecuting attorney Michael Schumann:

None of the references either singularly or in combination teach or suggest the claimed invention. In addition to numerous other differences, none of the references teach the three node approach to communications as provided in the claimed invention. In the present invention, the first node of communication is a main or central computer which may have its own terminals for entry/display of information. The second node of communication are [sic] the base stations which are wired to the main computer. The base stations are preferably located in the various patient rooms and other suitable locations. The third node of communication in the present invention is the portable handheld patient terminal which cooperates with the base stations to provide for wireless transmission of data between the base station and the patient terminal. This approach provides a system which allows for maximum portability of the patient terminals and yet allows access to the main computer in an inexpensive manner by use of the base stations which provide wired communication to the main computer. Many of the references such as Koenig do disclose the use of wireless transmission which has long been in use, and many of the systems do disclose the use of bar code readers to scan bar codes to see if they correspond. However, none of the references disclose the real time, interactive three node communication system of the present invention as claimed.

J.A. at 366-67 (emphasis added).

In a December 8, 1987, office action, Examiner Trafton maintained his rejection of amended claim 1, albeit based upon a different combination of prior art references patents to Blum and Pejas. However, Examiner Trafton also explained that dependent claim 6 would be allowable if rewritten in independent form. J.A. at 371. Schumann accepted this offer on June 8, 1988, by abandoning the '278 application and filing a continuation application (Application No. 07/205,527) with the only independent claim rewritten in the manner suggested by Examiner Trafton. The claims in their current form were allowed on February 27, 1989, and the '716 patent issued on August 15, 1989.

B

During this same time period, Schumann was simultaneously prosecuting another application—Application No. 06/862,149 ("the '149 application")—before another PTO examiner, Robert Lev. The invention of this simultaneous...