Johns Hopkins University v. Datascope Corp., Civil No. WDQ-05-0759.

Decision Date09 August 2007
Docket NumberCivil No. WDQ-06-2711.,Civil No. WDQ-05-0759.
Citation513 F.Supp.2d 578
PartiesThe JOHNS HOPKINS UNIVERSITY and Arrow International, Inc., Plaintiffs, v. DATASCOPE CORPORATION, Defendant.
CourtU.S. District Court — District of Maryland

Lawrence Paul Fletcher Hill, Gordon Feinblatt Rothman Hoffberger and Hollander LLC, Baltimore, MD, Marc J. Jason, Rebecca Eisenberg, Ira Elijah Silfin, Kenneth Philip George, Amster Rothstein and Ebenstein LLP, New York, NY, for Plaintiffs.

Kevin Francis Arthur, Kramon and Graham PA, Baltimore, MD, Paul H. Kochanski, Robert Bruce Cohen, Roy Henry Wepner, Lerner David Littenberg Krumholz and Mentlik LLP, Westfield, NJ, for Defendant.

MEMORANDUM OPINION

WILLIAM D. QUARLES, Jr., District Judge.

The Johns Hopkins University ("JHU") and Arrow International, Inc., ("Arrow") sued Datascope Corporation ("Datascope") for patent infringement. Pending are the Plaintiffs' motions for Judgment on Partial Findings and to Alter/Amend Judgment and the Defendant's motions for Judgment as a Matter of Law and to Alter/Amend Judgment. For the reasons discussed below, the Court will grant the Plaintiffs' motion for judgment on partial findings, the Plaintiffs' and Datascope's motions to amend, and will deny Datascope's motions for judgment.

I. Background

JHU owns Patents 5,766,191, "Perucutaneous Mechanical Fragmentation Catheter System" (the "'191 patent"); 6,824,551, "Perucutaneous Mechanical Fragmentation Catheter System" (the "'551 patent"); and 7,108,704, "Percutaneous Mechanical Fragmentation Catheter System" (the "'704 patent"). The '191 patent was issued on June 16, 1998, the '551 patent was issued on November 30, 2004, and the '704 patent was issued on September 19, 2006. The patents claim methods for fragmenting clots within hemodialysis grafts. Arrow licenses the patents and sells a device based on them. Jan. 18, 2006 Mem. Op.

On June 11, 2007, the Court bifurcated the trial so that the jury hearing the Plaintiffs' infringement claims would not hear Datascope's evidence that the patents are unenforceable because of the Plaintiffs' inequitable conduct and unclean hands. From June 11-15, the parties tried the infringement claims and Datascope's obviousness defense. On June 15, 2007, the jury found for the Plaintiffs, and the Court entered judgment for $690,875.

On July 25, 2007, the parties tried Datascope's inequitable conduct and unclean hands defenses. Datascope offered evidence of the Plaintiffs' allegedly improper conduct in prosecuting the '704 patent. At the conclusion of Datascope's evidence, the Plaintiffs moved for Judgment on Partial Findings under Federal Rule of Civil Procedure 52(c).

II. Analysis
A. Motion for Judgment on Partial Findings

The Plaintiffs argued that Datascope did not offer clear and convincing evidence of inequitable conduct. Specifically, the Plaintiffs argued that Datascope did not establish that: (1) the attorney prosecuting the patent knew of information withheld from the Patent and Trademark Office (the "PTO"); (2) the allegedly withheld information was material; (3) the withheld information was not cumulative; and (4) there was an intent to deceive the PTO.

1. Standard of Review

Rule 52(c) permits the entry of judgment as a matter of law on a claim or defense when: (1) a "party has been fully heard on an issue[;]" (2) "the court finds against th[at] party on that issue[;]" and (3) the claim or defense cannot succeed "without a favorable finding on that issue." Fed.R.Civ.P. 52(c). "In considering a motion for judgment for partial findings under Fed.R.Civ.P. 52(c) the judge, as trier of the facts, must weigh and consider all of the evidence presented." Cherrey v. Thompson Steel Co., Inc., 805 F.Supp. 1257, 1261 (D.Md.1992). Judgment under Rule 52(c) must be supported by findings of fact and conclusions of law. Fed. R.Civ.P. 52(a).

2. Applicable Law
a. Inequitable Conduct

"Patent applicants owe a `duty of candor and good faith' to the PTO." Bruno Indep. Living Aids, Inc. v. Acorn Mobility Services, Ltd., 394 F.3d 1348, 1352 (Fed.Cir.2005) (citing 31 C.F.R. § 1.56(a) (2004)). Inequitable conduct may include "affirmative misrepresentations of a material fact, failure to disclose material information, or submission of false material information, coupled with an intent to deceive." Baxter Intern., Inc. v. McGaw, Inc., 149 F.3d 1321, 1327 (Fed.Cir.1998). To prove inequitable conduct resulting from a failure to disclose, Datascope

must offer clear and convincing proof of: (1) prior art or information that is material; (2) knowledge chargeable to applicant [or the attorney who prosecuted the application] of that prior art or information and of its materiality; and (3) failure of the applicant to disclose the art or information resulting from an intent to mislead the PTO.

Cordis Corp. v. Boston Scientific Corp., 188 Fed.Appx. 984 (Fed.Cir.2006) (citing FMC Corp. v. Manitowoc Co., 835 F.2d 1411, 1415 (Fed.Cir.1987)).

The "[a]pplicant must be chargeable with knowledge of the existence of the prior art or information, for it is impossible to disclose the unknown." Manitowoc, 835 F.2d at 1415. Indeed, the applicant must have actual knowledge of the prior art reference. Digital Control, Inc. v. Charles Mach. Works, 437 F.3d 1309, 1318 (Fed.Cir.2006). The Federal Circuit has said, however, that "one should not be able to cultivate ignorance, or disregard numerous warnings that material information or prior art may exist, merely to avoid actual knowledge of that information or prior art." Brasseler, U.S.A. I, L.P. v. Stryker Sales Corp., 267 F.3d 1370, 1384 (Fed.Cir. 2001) (quotations omitted).

b. Unclean Hands

The doctrine of "[u]nclean hands bars a party from receiving equitable relief because of that party's own inequitable conduct. Food Lion, Inc. v. S.L. Nusbaum Ins. Agency, Inc., 202 F.3d 223, 228. Datascope bears the burden of proving by clear and convincing evidence that the Plaintiffs acted with unclean hands." In re Omeprazole Patent Litigation, 483 F.3d 1364, 1374 (Fed.Cir.2007).

3. Findings of Fact

Datascope alleges that Alan Miller, Ph. D., breached the duty of candor. On October 7, 2004, Dr. Miller, a patent prosecuting attorney at Amster Rothstein & Ebenstein LLP ("Amster"), filed the '704 patent application with the PTO. During the prosecution of that patent, the Plaintiffs began the instant litigation against Datascope for the infringement of the '191 patent and the '551 patent. Subsequently, the '704 patent claims were included. The Plaintiffs' litigation counsel are different Amster attorneys.

Datascope answered the Plaintiffs' interrogatories in June 2005 (the "Initial Response"). (Def.Ex. 742). Dr. Miller read the Initial Response. July 25, 2007 Trial Tr. 9. That response included reference to the Fischell '425 patent — prior art that Datascope contends affects the patentability of what would become the '704 patent. Although the response noted that Datascope "may supplement [its] answer" after further review of the references contained in the Initial Response, Tr. 11 (emphasis added), Dr. Miller was not told that it would or even that it would likely file supplemental answers. Importantly, Datascope did not challenge Dr. Miller's handling of the Initial Response; indeed, Dr. Miller submitted the information included in the Initial Response to the PTO — including reference to the Fischell '425 patent.

In October 2005, Datascope supplemented its responses to the Plaintiffs' interrogatories (the "First Supplement"). (Def.Ex.748). In January 2006, Datascope again supplemented its responses (the "Second Supplement"). (Def.Ex.752). Dr. Miller was not informed of either set of supplemental answers. Tr. 13-24. Datascope also, provided, the Plaintiffs with the expert report of Thomas Aretz, M.D. (the "Aretz Report"). (Def.Ex.753). Dr. Miller did not learn of the Aretz Report. Tr. 14-15. Dr. Miller did not ask the litigation team for additional information, and the litigation team did not offer it to him. Id. 15-20. Thus, Dr. Miller did not have knowledge of Datascope's (1) further explanations regarding prior art and, in particular, the Fischell '425 patent; (2) evidence of prior publications and prior uses; and (3) evidence of the ordinary skill in the art.

4. Conclusions of Law

Dr. Miller's submission of information from the Initial Response was not inequitable conduct. Although it is clear that Dr. Miller did not learn of the information contained in the Supplements or the Aretz Report, Datascope contends that Dr. Miller deliberately avoided that knowledge and that such avoidance requires that he be charged with that knowledge. This contention rests solely on the reference in the Initial Response that Datascope may supplement that response. As Dr. Miller and the litigation team did not discuss their work, there is insufficient evidence that he cultivated his ignorance.

Datascope argued that because Dr. Miller and the litigation team worked for Amster, the Court may infer deliberate avoidance. If Dr. Miller and the litigating attorneys were in separate law firms, it would be improper to draw such an inference from their lack of communication. The Court will not draw that inference merely because the attorneys practice at the same firm. Such an inference would merely penalize multi-practice law firms for their depth and sophistication.

Datascope argued that the Plaintiffs had a duty of inquiry. Indeed, the Federal Circuit has said that applicants should inquire

when they were on notice of certain factual issues which may have been material to the prosecution of the patent application .... Attorneys must conduct meaningful inquiries when the surrounding factual circumstances would cause a reasonable attorney to understand that relevant and questionable material information should be assessed.

Brasseler, 267 F.3d at 1385. The "duty" to inquire does not...

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