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

• Citation: 576 F.3d 1348
• Decision Date: 19 August 2009
• Docket Number: No. 2007-1296.,No. 2007-1347.,2007-1296.,2007-1347.
• Parties: CARDIAC PACEMAKERS, INC. and Guidant Sales Corporation, Plaintiffs-Appellants, and Mirowski Family Ventures, LLC and Anna Mirowski, Plaintiffs-Appellants, v. ST. JUDE MEDICAL, INC. and Pacesetter, Inc., Defendants-Cross Appellants.
• Court: United States Courts of Appeals. United States Court of Appeals for the Federal Circuit

576 F.3d 1348

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

No. 2007-1296.

No. 2007-1347.

United States Court of Appeals, Federal Circuit.

August 19, 2009.

Arthur I. Neustadt, Oblon, Spivak, McClelland, Maier & Neustadt, P.C., of Alexandria, VA, argued for all plaintiffs-appellants. With him on the brief for Mirowski Family Ventures, LLC, et al. was Barry J. Herman. On the brief for Cardiac Pacemakers, Inc., et al., were J. Michael Jakes, Kara F. Stoll, Michael V. O'Shaughnessy and Molly R. Silfen, Finnegan, Henderson, Farabow, Garrett & Dunner, L.L.P., of Washington, DC.

Mark A. Perry, Gibson, Dunn & Crutcher LLP, of Washington, DC, argued for defendants-cross appellants. With him on the brief was Denis R. Salmon, and H. Mark Lyon, of Palo Alto, CA. Of counsel on the brief was Jeffrey M. Olson, Sidley Austin LLP, of Los Angeles, CA.

Mark M. Supko, Crowell & Moring LLP, of Washington, DC, for amici curiae Federal Circuit Bar Association, et al., on petition for rehearing en banc. With him on the brief were Michael I. Coe; and Alyson G. Barker, Howrey LLP, of Irvine, CA. Of counsel on the brief were Joseph R. Re, Federal Circuit Bar Association, of Washington, DC, and Teresa Stanek Rea, American Intellectual Property Law Association, of Arlington, VA.

Jamie H. McDole, Kirkland & Ellis LLP, of Chicago, IL, for amicus curiae Research in Motion Limited, on petition for rehearing en banc.

Edward R. Reines, Weil, Gotshal & Manges LLP, of Redwood Shores, CA, for amici curiae Cisco Systems, Inc., et al., on petition for rehearing en banc. With him on the brief were Melanie P. Sarwal, of Austin, TX, and Rebecca Fett, of New York, NY.

Lance A. Lawson, Alston & Bird LLP, of Charlotte, NC, for amici curiae AGA Medical Corporation, et al., on petition for rehearing en banc. With him on the brief were Michael S. Connor, Kirk T. Bradley and Brian F. McMahon.

R. Carl Moy, William Mitchell College of Law, of St. Paul, MN, for amicus curiae William Mitchell College of Law, on petition for rehearing en banc. With him on the brief was Jay Erstling.

Daryl Joseffer, of McLean, VA, for amicus curiae Ormco Corporation, on petition for rehearing en banc. With him on the brief was David L. DeBruin, Michael Best & Friedrich LLP, of Milwaukee, WI.

Before NEWMAN, MAYER, and LOURIE, Circuit Judges. Opinion for the court filed by Circuit Judge LOURIE, in which Circuit Judge MAYER joins and Circuit Judge NEWMAN joins parts A, B, C.1, and D.

Part C.2 was heard en banc before MICHEL, Chief Judge, NEWMAN, MAYER, LOURIE, RADER, SCHALL, BRYSON, GAJARSA, LINN, DYK, PROST, and MOORE, Circuit Judges. Opinion for the court filed by Circuit Judge LOURIE, in which Chief Judge MICHEL and Circuit Judges MAYER, RADER, SCHALL, BRYSON, GAJARSA, LINN, DYK, PROST, and MOORE join. Dissenting opinion filed by Circuit Judge NEWMAN.

LOURIE, Circuit Judge.

Cardiac Pacemakers, Inc., Guidant Sales Corporation, Mirowski Family Ventures, LLC, and Anna Mirowski (collectively, "Cardiac" or "appellants") appeal from the decision of the United States District Court for the Southern District of Indiana granting summary judgment of invalidity of claim 4 of U.S. Patent 4,407,288 ("the '288 patent"). See Cardiac Pacemakers, Inc. v. St. Jude Med., Inc., 483 F.Supp.2d 734 (S.D.Ind.2007) ("Invalidity Decision"). Cardiac also appeals aspects of the district court's decision concerning damages. See Cardiac Pacemakers, Inc. v. St. Jude Med., Inc., 418 F.Supp.2d 1021, 1027-30 (S.D.Ind.2006) ("Damages Decision"). Because the district court erred in concluding in light of our prior mandates that it could find the '288 patent anticipated, we reverse on invalidity. In light of the fact that infringement has already been decided by the district court, we remand the case solely for a determination of damages. We affirm the court's decision limiting damages to those devices that can be shown to have executed the steps of claim 4 of the '288 patent.

St. Jude Medical, Inc. and Pacesetter, Inc. (collectively, "St.Jude") cross-appeal from the district court's decision permitting damages under 35 U.S.C. § 271(f). See Id. at 1027-30. The en banc court reverses the district court's determination that 35 U.S.C. § 271(f) applies to method claims and hence permits damages in this case on devices exported where the claimed method is carried out in countries other than the United States (see Section C.2 of this opinion).

BACKGROUND

This patent dispute concerning implantable cardioverter defibrillators ("ICDs"), has been before us on four previous occasions. See Cardiac Pacemakers, Inc. v. St Jude Med., Inc., 296 F.3d 1106 (Fed.Cir. 2002); Cardiac Pacemakers, Inc. v. St. Jude Med., Inc., 381 F.3d 1371 (Fed.Cir. 2004) ("2004 Opinion"); Cardiac Pacemakers, Inc. v. St. Jude Med., Inc., 144 Fed.Appx. 106 (Fed.Cir.2005) ("2005 Reassignment Order"); In re Cardiac Pacemakers, Inc., 183 Fed.Appx. 967 (Fed.Cir. 2006) ("2006 Writ Order"). Three of our prior decisions, the 2004 Opinion, the 2005 Reassignment Order, and the 2006 Writ Order, are relevant to this appeal.

ICDs are small devices that detect and correct abnormal heart rhythms that can be fatal if left untreated. The ICDs in this case work by administering electrical shocks to the heart, those shocks being calibrated to restore normal heart functioning. Implantable cardiac devices can be programmed to administer different types of electrical shocks, including pacing shocks (which are relatively low power shocks), defibrillation (relatively high power shocks), and cardioversion, the definition of which has been a source of dispute throughout the protracted litigation of this case.

Cardiac owns various patents relating to cardiac defibrillators, including the '288 patent. The '288 patent claims a method of heart stimulation using an implantable heart stimulator that is capable of detecting heart arrhythmias, or irregular heart rhythms, and of being programmed to treat the arrhythmia through either single or multimode operation. Multimode operation allows a heart stimulator to respond to arrhythmias by applying first one type of shock and then, if unsuccessful, administering a second type of shock. Claim 4 of the '288 patent, the only claim at issue on appeal, is dependent on claim 1:

1. A method of heart stimulation using an implantable heart stimulator capable of detecting a plurality of arrhythmias and capable of being programmed to undergo a single or multi-mode operation to treat a detected arrhythmia, corresponding to said mode of operation the method comprising:

(a) determining a heart condition of the heart from among a plurality of conditions of the heart;

(b) 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;

(c) executing said at least one mode of operation of said implantable heart stimulator thereby to treat said determined heart condition.

* * *

4. The method of claim 1, wherein said at least one mode of operation of said implantable heart stimulator includes cardioversion.

The litigation history of this case is complicated and protracted, but for clarity's sake we will recite the portion of that history that is relevant to this appeal. Cardiac brought an infringement action against St. Jude on November 26, 1996, accusing St. Jude of selling ICDs that infringed a number of Cardiac's patents. In 2001 the case was tried before a jury. The jury returned a verdict awarding Cardiac $140 million in royalties for infringement of U.S. Patent 4,316,472 ("the '472 patent"). Cardiac Pacemakers, Inc. v. St. Jude Med., Inc., No. IP-96-1718-C, 2002 WL 1801647, **3-4, 2002 U.S Dist. LEXIS 14767, at *7 (S.D.Ind. July 5, 2002). The jury found the '288 patent valid and enforceable, but not infringed by St. Jude's ICDs. Id. at **2-4, 2002 U.S Dist. LEXIS 14767, at *6-*7. In doing so, the jury rejected St. Jude's argument that the invention of the '288 patent was obvious in light of various prior art references, including U.S. Patent 3,805,795 ("Denniston") and United Kingdom Patent Application 2,026,870 ("Duggan"). Id. at *117, *120. The jury also rejected St. Jude's argument that the '288 patent was unenforceable for inequitable conduct.¹ Id. at **3-4, 2002 U.S Dist. LEXIS 14767, at *7.

Following the trial, the district court granted several post-verdict motions that overturned the jury verdict and conditionally granted a new trial on several issues that St. Jude had lost at trial. First, the court granted St. Jude judgment as a matter of law ("JMOL") on invalidity and noninfringement of the '472 patent, thereby vacating the jury's $140 million damage award. Id. at *100. Cardiac has not appealed any of the district court's decisions regarding the '472 patent.

Regarding the '288 patent, which the jury found valid and not infringed, the district court granted St. Jude's JMOL motions for invalidity due to obviousness and lack of best mode. Id. at *100-*133. The court denied St. Jude's JMOL motion of unenforceability, in which St. Jude alleged that Cardiac had failed to pay proper maintenance fees. Id. at *133-*143. Finally, the court further denied Cardiac's motion for a new trial on infringement. Id. at *195-*196. The court granted a conditional new trial on the obviousness issue and the inequitable conduct issue in the event that the JMOL decision finding the '288 patent obvious was reversed on appeal. Id. at *114, *143.

Following the district court's post-trial decisions, Cardiac appealed the district court's grant of St. Jude's motion for JMOL of invalidity of the '288 patent as well as the court's rejection of Cardiac's motion for JMOL of infringement of claim 4 of the '288 patent. On appeal, we reversed on both issues....