Baxter Diagnostics Inc. v. AVL Scientific Corp., CV 91-4178 RG (Ex).
| Citation | 924 F. Supp. 994 |
| Decision Date | 25 April 1996 |
| Docket Number | No. CV 91-4178 RG (Ex).,CV 91-4178 RG (Ex). |
| Court | U.S. District Court — Central District of California |
| Parties | BAXTER DIAGNOSTICS INC., Plaintiff, v. AVL SCIENTIFIC CORP., et al., Defendants. And Related Actions. |
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Christie, Parker & Hale, LLP, Carl Kustin, Thomas J. Daly, John D. Carpenter, Art Hasan, Pasadena, CA, for plaintiff.
Thomas J. Manley, J.B. Kelly, Hunton & Williams, Raleigh, NC, William J. Robinson, David J. Meyer, Graham & James, Los Angeles, CA, for AVL Parties.
Nelson Mullins Riley & Scarborough, Sylvia K. Kochler, Atlanta, GA, for defendant-counterclaimant Frank J. Swenson.
ORDER FOR JUDGMENT
AVL Scientific Corp. ("AVL") obtained a license to use an optical sensor device that measures the concentration of gases in the blood. It alleges that Baxter Diagnostics Inc. ("Baxter") willfully infringed United States Patent No. 4,557,900 and United States Reissue Patent No. 31,879 (collectively, "the Lübbers patent"), which cover this device, by developing single- and double-layer optical blood gas sensor devices. In response, Baxter contends that the Lübbers patent is invalid. Alternatively, it contends that its sensor devices do not infringe the patent or are de minimis uses of the patented technology. This Court holds that the Lübbers patent is valid. Baxter's single-layer sensor infringes it because it is not a de minimis use of the patented technology; however, this infringement was not willful. The double-layer sensor does not infringe the patent either literally or equivalently.
Baxter contends that the Lübbers reissue patent is invalid (1) because it was procured through inequitable conduct and (2) because claims in it are obvious.
Baxter's first invalidity allegation is that the Lübbers applicants conducted themselves inequitably while their reissue application was pending. Specifically, it asserts that Gordon Peterson, one of the attorneys in charge of prosecuting the application, failed to disclose to the Patent and Trademark Office ("the PTO") that a scientist who submitted declarations advocating the patentability of the Lübbers technology was an employee of a company that had a license to use the technology. It also asserts that the applicants failed to disclose material prior art. In light of all the circumstances, the applicants' conduct was not so culpable that the patent should be invalidated.
Baxter alleges that the applicants did not disclose United States Patent No. 3,612,866 ("the Stevens patent") and British Patent No. 1,190,583 ("the Bergman patent") to the PTO even though this prior art was the focal point in the prosecution of the German counterpart of the Lübbers patent application, and the German patent examiner requested that the drafters of the German application discuss it in the text of that application.
A summary of the factual history of the Lübbers patent prosecution and the Lübbers technology is helpful in understanding Baxter's allegations.
The Lübbers patent teaches an apparatus that measures the concentration of gases, such as carbon dioxide or oxygen, in a blood sample. A vessel holds the blood sample to be tested. Within the vessel, a silicone diffusion membrane that is selectively permeable by certain gases separates the analyte gas from the blood. If the analyte is carbon dioxide, it reacts with water sealingly embedded in the membrane, changing the pH of the water. The fluorescent indicating dye that is also sealingly embedded in the membrane detects this pH change. To determine the concentration of gas, a technician interrogates the dye with a monochromatic light and reads the wavelength of the light that the dye emits. The wavelength varies according to the pH change.
Max-Planck Institute ("Max-Planck"), the owner of the Lübbers technology, filed the Lübbers patent application in Germany in 1975. It issued as a patent in late 1979. Claiming priority of the German Lübbers patent application, Max-Planck filed the American Lübbers patent application in 1976. The application issued as a patent in 1977. Max-Planck filed a reissue application in the United States on January 8, 1979. This application issued as a patent on May 5, 1985.
During the prosecution of the German application, Drägerwerk AG, a German company, filed an opposition, asserting that the Stevens and Bergman patents made the Lübbers technology unpatentable. It contended that the Stevens and Bergman patents teach an indicator "sealingly embedded" in a diffusion membrane and that a sealingly embedded indicator is an essential feature of some of the claims in the Lübbers application. Responding to the Drägerwerk opposition, Max-Planck narrowed some claims and deleted some claims. (Exs. 1791 & 1792.)
The German patent office ultimately found that the Stevens and Bergman patents did not preclude the patentability of the Lübbers technology. (Ex. 1795.) It distinguished the patents on two grounds. First, it found that, unlike the indicators in the Stevens and Bergman references, the indicator in the Lübbers patent is sealingly embedded in an indicator space that is selectively permeable by the analyte:
While the fluorescent indicator is in contact with the entire measuring cell in case of the known measuring arrangements, individual, selectively determinable components only may penetrate into the indicator space in case of the subject matter of the application. Higher measuring accuracy is thus obtained.
(Id. at 6.) Second, it found that Lübbers' idea of separating the indicating space from the light-measuring means improved upon the Stevens and Bergman patents:
The fact that the indicator space is provided independently of the light-measuring means is to be deemed an advantage according to the application over the known arrangements. Owing to this fact it is, for instance, possible to have the place of measurement shifted into the blood vessels themselves.
(Id.) It emphasized that "neither alone nor in combination are these two particularities suggested by prior art." (Id. at 7.) However, it told Max-Planck to discuss the Stevens and Bergman patents in the text of the application. (See id. at 9 ().)
Shortly after adding the discussion of the Stevens and Bergman patents to its German application, Max-Planck filed a reissue application in the United States to broaden the claims in the original Lübbers patent. The reissue application did not list the Stevens and Bergman patents in its "References Cited" section. (Ex. 331.) However, Max-Planck submitted a copy of the German Lübbers patent that discloses and discusses the Stevens and Bergman patents. (Ex. 221 at A000658.) It did not provide an English translation of this discussion.
Gordon Peterson, the attorney handling the prosecution, did not know about the Stevens and Bergman references. (Testimony of Gordon Peterson, Trial Tr. at 3314:6-10.) He had access to the German Lübbers patent, but he never obtained a translation of the portion of that patent which discusses them. (Id. at 3326:17-25; Testimony of Harry Weissenberger, Trial Tr. at 3213:9-12.)
However, several other individuals involved in the American prosecution had actual knowledge of the Stevens and Bergman references. AVL became involved in the prosecution after it became an exclusive licensee under the Lübbers patent. Dr. Hermann Marsoner and Dr. H.W. Kroneis, who worked for AVL and who were frequently consulted about the prosecution, published a paper that cited the references in 1983. (Ex. 4195 at 592.) In October 1981, Marsoner and Kroneis of AVL, Dr. Dietrich Lübbers and Dr. Norbert Optiz of Max-Planck, and Dr. Harold Heitzmann of Cardiovascular Devices, Inc., a Lübbers licensee, attended a meeting at AVL. The minutes of the meeting show that they discussed the Stevens patent. (Ex. 387.) All of these scientists were actively involved in the prosecution of the reissue application.
They had many opportunities to inform Peterson and the PTO about the Stevens and Bergman references. He sent every PTO action and response to the scientists and to Dr. Hans Hofman, the agent who prosecuted the German patent. Many of his responses argued that the prior art did not teach sealingly embedding an indicating substance in a diffusion membrane. Lübbers and Hofman commented on these responses. But neither they nor the other scientists informed Peterson of the Stevens and Bergman references.
Lübbers and Opitz were aware of their duty to disclose material prior art to the patent office. They had originally filed declarations with the PTO that did not contain an acknowledgement of their duty as inventors to disclose material prior art. (Ex. 211 at A000529, A00486-87.) The examiner notified them that their declarations were defective and asked that they file new declarations that acknowledged their duty to disclose. (Id. at A000529.) They complied with this request. The other scientists had been involved in prosecutions of patents on technology they had invented, so they were aware of the inventor's duty to disclose material prior art to the PTO.
"The concept of inequitable conduct in patent procurement derives from the equitable doctrine of unclean hands: that a person who obtains a patent by intentionally misleading the PTO cannot...
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