Nobelpharma AB v. Implant Innovations, Inc., 91 C 4632.

Decision Date31 January 1995
Docket NumberNo. 91 C 4632.,91 C 4632.
PartiesNOBELPHARMA AB, Plaintiff, v. IMPLANT INNOVATIONS, INC., Defendant.
CourtU.S. District Court — Northern District of Illinois

Alan I. Becker, Daniel G. Litchfield, Douglas B. Harper, Burditt & Radzius, Chicago, IL, Douglas E. Olson and Jeffrey M. Olson, Lyon & Lyon, Los Angeles, CA, for plaintiff Nobelpharma AB, a Swedish corp.

Edward L. Foote, Peter Charles McCabe, III, Winston & Strawn, Gomer Winston Walters, James Ray Wood, Steven J. Soucar, Wood, Phillips, VanSanten, Hoffman & Ertel, Stephen Gary Rudisill, Arnold, White & Durkee, Chicago, IL, Philip G. Koenig, Jason M. Honeyman, Wolf, Greenfield & Sacks, P.C., Boston, MA, for defendant Implant Innovations, Inc.

Alan I. Becker, Burditt & Radzius, Chicago, IL, for counter-defendant Nobelpharma USA Inc.

MEMORANDUM OPINION

BRIAN BARNETT DUFF, District Judge.

On May 10, 1994, out of an abundance of caution, we held a conference with the parties to this suit and suggested to them that, to bring solid closure to the preceding patent trial, we may need to rule on the outstanding issue of inequitable conduct. At the conference, we asked the parties to brief us on whether such a ruling would be appropriate.

Accordingly, on May 12, 1994, Implant Innovations, Inc. ("3i"), submitted a brief requesting that we rule on the issue and produce findings of fact and conclusions of law to accompany our ruling. On the same day, Nobelpharma AB ("Nobelpharma") submitted its response. In June, 3i submitted its proposed findings and conclusions, and, again, Nobelpharma submitted its response. For the reasons discussed below, we deny 3i's (prompted) request for a ruling on inequitable conduct and, consequently, also deny its (prompted) request that we produce findings of fact and conclusions of law. Instead, pursuant to Fed.R.Civ.P. 58, we enter final judgment on the jury verdict in favor of 3i in the amount of $9,904,737.

I. Background

On July 23, 1991, Nobelpharma sued 3i, alleging infringement of U.S. Patent Number 4,330,891 ("the '891 patent"), which concerns a dental implant. 3i raised numerous affirmative defenses, including: (1) non-compliance with 35 U.S.C. § 101; (2) non-compliance with 35 U.S.C. § 102; (3) non-compliance with 35 U.S.C. § 103; (4) non-compliance with 35 U.S.C. § 112; (5) inequitable conduct; and (6) misuse. Further, 3i sought declaratory relief that the '891 patent was "invalid, void, ... not infringed, and ... not enforceable" for the reasons it raised in its affirmative defenses. Def.Am.Answer at ¶ 20. Further still, 3i counterclaimed, alleging that Nobelpharma violated antitrust laws.

On March 14, 1994, the case went to jury trial, which began with Nobelpharma's presentation of its infringement claim. At the close of Nobelpharma's case in chief, 3i moved pursuant to Fed.R.Civ.P. 50(a) for judgement as a matter of law on the issues of infringement and validity. On April 8 and 11, we granted 3i's motion. Immediately afterward, we proceeded with 3i's antitrust counterclaim. The jury returned a verdict in favor of 3i in the amount of $9,904,737.

II. Discussion

3i argues that, "pursuant to the Supreme Court's decision in Cardinal Chemical Co. v. Morton Int'l, Inc., ___ U.S. ___, 113 S.Ct. 1967, 124 L.Ed.2d 1 (1993), we should decide whether the '891 patent is unenforceable on grounds of inequitable conduct for important public policy reasons." Def.Br. at 1-2. Interpreting Cardinal, 3i states that "there is a valid and important public policy consideration in having all of the issues decided, including validity and unenforceability, even if the plaintiff has not proved infringement." Def.Br. at 5. Moreover, "the same public policy considerations apply here in the sense that the Federal circuit should review the entire case." Def.Br. at 5-6.

Nobelpharma responds that Cardinal "provides no suggestion that there are important public policy reasons for determining that an invalid patent is unenforceable on the grounds of inequitable conduct." Pl.Br. at 4, n. 2. "The benefits recognized by the Supreme Court in Cardinal for preserving an invalidity determination when there is no infringement are not present here where the patent has been held invalid and the inequitable conduct issue is unresolved." Id.

In Cardinal, the Court considered the Federal Circuit's "routine" "practice" of "vacating declaratory judgments regarding patent validity following a determination of noninfringement." ___ U.S. at ___, 113 S.Ct. at 1971. After finding that the "Federal Circuit's practice was ... neither compelled by common law nor supported by the `case and controversy' requirement," the Court held that "a finding of non-infringement alone ... does not justify" "refusing to reach the merits of a validity determination." Id. at ___-___, 113 S.Ct. at 1976, 1978.

The Court found that three policy concerns supported its holding. First, it found that unless courts make a validity determination, defendants may suffer because "a company once charged with infringement would remain concerned about the risk of similar charges if it developed and marketed similar products in the future." Id. at ___, 113 S.Ct. at 1976-7. Second, unless courts make the determination, plaintiffs may suffer because "patentees would lose the practical value of a patent that should be enforceable against different infringing devices." Id. at ___, 113 S.Ct. at 1978. Third, without the determination, society may suffer because of the "strong public interest in the finality of judgments in patent litigation." Id. at ___, 113 S.Ct. at 1977. In its subsequent discussion about finality, the Court discussed the importance of making a validity determination. Id. at ___, 113 S.Ct. at 1977-8.

Unlike in Cardinal, in this case we made an infringement and validity determination and, in a sense, vacated the enforcement determination. This case, then, is Cardinal in reverse. The issue is whether, with the determinations reversed, this case still implicates the Court's policy concerns.

All of the Court's concerns, even the one about finality of judgments, contemplate the post-litigation interests of the parties. Specifically, they contemplate the parties' interest in knowing the scope of their property rights. As the Court indicated, making a validity determination goes a long way toward defining the scope of those rights. After that, however, making an enforcement determination goes no extra distance at all. If the patent is invalid, of course it is unenforceable. The issue is moot. Clements Indus. v. Meyers & Sons Corp., 712 F.Supp. 317, 320, n. 2 (S.D.N.Y.1989) (stating that "our conclusion that the patent is invalid because of obviousness and anticipation makes it unnecessary to determine the inequitable conduct issue"); see Paragon Podiatry Lab., Inc. v. KLM Labs., 984 F.2d 1182, 1188, n. 6 (Fed.Cir.1993); Buildex, Inc. v. Kason Indus., Inc., 849 F.2d 1461, 1466 (Fed.Cir.1988); see also United Carbon Co. v. Binney Co., 317 U.S. 228, 237, 63 S.Ct. 165, 170, 87 L.Ed. 232 (1942) (holding that "we are of the opinion that the claims in litigation are bad for indefiniteness, and we have no occasion to consider questions of novelty, invention, and infringement"). Therefore, if courts make a validity determination and not an enforcement determination, they do not implicate the Cardinal policy concerns.

The Federal Circuit announced one exception to the rule that a validity determination moots an enforcement determination. In Buildex, the court stated that, "although this inequitable conduct issue may appear moot in view of our holding that the '265 patent is invalid ..., the question of Holden's and Buildex's conduct in the procurement of the patent is still relevant to Kason's request for attorney fees." 849 F.2d at 1466; see Paragon, 984 F.2d at 1188, n. 6 (stating that "this issue of inequitable conduct is not mooted by our decision holding that the patent is invalid in view of KLM's motion for attorney fees"). The Federal Circuit announced the exception because the inequitable conduct issue may bear on whether the case is "exceptional," which is part of the attorney fee inquiry. Id.

Despite 3i's motion for attorney fees, this case does not fall under the Circuit's exception. At trial, the jury found that Nobelpharma acted fraudulently. Given the jury's finding, already we can determine whether this case is "exceptional." See, e.g., Stevens & Co. v. Lex Tex Ltd., Inc., 747 F.2d...

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2 cases
  • Nobelpharma AB v. Implant Innovations, Inc., 96-1463
    • United States
    • United States Courts of Appeals. United States Court of Appeals for the Federal Circuit
    • November 18, 1997
    ...conduct, concluding that its judgment of invalidity rendered the issue of enforceability moot. Nobelpharma AB v. Implant Innovations, Inc., 875 F.Supp. 481, 34 USPQ2d 1090 (N.D.Ill.1995). The court then denied NP's renewed motion for JMOL on the counterclaim or, in the alternative, for a ne......
  • Nobelpharma AB v. Implant Innovations, Inc., 96-1463
    • United States
    • United States Courts of Appeals. United States Court of Appeals for the Federal Circuit
    • March 20, 1998
    ...conduct, concluding that its judgment of invalidity rendered the issue of enforceability moot. Nobelpharma AB v. Implant Innovations, Inc., 875 F.Supp. 481, 34 USPQ2d 1090 (N.D.Ill.1995). The court then denied NP's renewed motion for JMOL on the counterclaim or, in the alternative, for a ne......
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