Affymetrix, Inc. v. Pe Corp.

• Decision Date: 28 January 2004
• Docket Number: No. 01 Civ. 0634(NRB).,01 Civ. 0634(NRB).
• Citation: 306 F.Supp.2d 363
• Parties: AFFYMETRIX, INC., Plaintiff, v. PE CORPORATION (N.Y.); Competitive Technologies, Inc.; Applera Corporation; Perseptive Biosystems, Inc., Defendants.
• Court: U.S. District Court — Southern District of New York

306 F.Supp.2d 363

AFFYMETRIX, INC., Plaintiff, v. PE CORPORATION (N.Y.); Competitive Technologies, Inc.; Applera Corporation; Perseptive Biosystems, Inc., Defendants.

No. 01 Civ. 0634(NRB).

United States District Court, S.D. New York.

January 28, 2004.

Robert J. Koch, Milbank, Tweed, Hadley & McCloy LLP, Washington, DC, Ralph C. Dawson, Fulbright & Jaworski, LLP, New York, NY, for Plaintiff.

David Kalow, Kalow & Springut LLP, New York NY, Matthew Powers, Weil Gotshal & Manges LLP, Redwood Shores, CA, for Defendant.

MEMORANDUM AND ORDER

BUCHWALD, District Judge.

This case arises from a complaint by Affymetrix, Inc. ("plaintiff") seeking inter alia a declaratory judgment against PE Corporation (New York), Competitive Technologies, Inc., Applera Corporation, and Perseptive Biosystems, Inc. (collectively "defendants") that five patents owned by defendant Competitive Technologies are unenforceable, invalid, and not infringed. The patents at issue are United States Patent Numbers 4,458,066 ("patent '066"), 4,500,707 ("patent '707"), 5,132,418 ("the '418 patent"), 5,153,319 ("patent '319") and 4,973,679 ("patent '679"). Now pending are plaintiff's separate motions for summary judgment on the issues of: 1) whether defendants engaged in inequitable conduct during their prosecution of all five patents in suit; 2) whether certain claims of the '066 and '418 patents were anticipated by an article entitled "The Synthesis of Oligodeoxypyrimides on a Polymer Support" ("the 1980 article"), published in the United Kingdom publication Tetrahedron Letters; and 3) whether the '679 patent fails to meet the requirements of 35 U.S.C. §§ 101 and 112. For the reasons set forth below, plaintiff's motion is granted in part and denied in part.

BACKGROUND

A. Defendants' prosecution of the patents at issue

This lawsuit involves two families of patents, for which Professor Marvin Caruthers is the common inventor. Caruthers co-invented the first line ("the C & M line"), of which patents '066, '707, '418 and '319 are at issue, with Dr. Mark Matteucci, and the second line ("the C & B line"), of which only patent '679 is at issue, with Dr. Serge Beaucage. Both inventions were developed in a laboratory at the University of Colorado, which had a contract with University Patents, Inc. (UPI),¹ to patent its inventions. Both inventions describe processes for producing polynucleotides, which are fragments of DNA used mainly for lab research.

On February 19, 1980, Caruthers and Matteucci published an article entitled "The Synthesis of Oligodeoxypyrimides on a Polymer Support" ("the 1980 article") in the United Kingdom publication Tetrahedron Letters. Ten days later, and only two weeks after UPI was first notified of the invention, see A186,² UPI filed a 14-page patent application, Serial No. 126,025 ("the parent application"), which was prepared by UPI's regular outside counsel at the time, Donald Margolis. Mr Margolis testified at his deposition that the amount of time he was given to prepare the application was "absolutely bare bones minimum," A347-48, and that he basically copied straight from the article without adding any new information, A352-53. He further testified that it was his understanding that he was put on such a tight schedule because "a publication was imminent," and publication prior to filing would jeopardize UPI's filing rights in countries that, unlike the United States, do not provide a grace period for filing after publication. A353-54. (It was only after filing that Margolis learned that the article had already been published on February 19, 1980.)

Subsequently, after UPI had begun licensing the invention to Genetic Systems (a predecessor to defendant Applera) in June, 1981, UPI hired the patent law firm Scully, Scott, Murphy & Pressey ("the Scully firm") to prepare a continuation-in-part application (CIP).³ Dr. Scully, who unlike Margolis holds a Ph.D. in organic chemistry, prepared a 58 page CIP, which UPI filed on March 24, 1981, over one year after the publication of the 1980 article. This CIP issued as patent '066 on July 3, 1984. What is significant to this case is that, among other changes, patent '066 used broader language than the parent application to describe the support structure on which the polynucleotides were to be synthesized and the "protecting group" used to cover the reactive sites of certain compounds involved in the synthesis, thereby preventing unwanted reactions from occurring at these sites. See Part II. Three days after filing the CIP, on March 27, 1981, UPI filed the first application in the C & B line of patents, patent '732, which described an improvement over the chemistry developed by Caruthers and Matteucci and which ultimately developed into the fifth patent at issue in this case, patent '679.⁴ UPI did not disclose the 1980 article to the prosecuting examiner for either of these applications.

During roughly the same time period, UPI was also applying to the European Patent Office (EPO) for patent protection for the C & M line. UPI filed an application with the EPO on February 27, 1981. The application was initially handled by the Scully firm and later by in-house counsel George Yahwak. UPI did not disclose the 1980 Article to the EPO, even though it was an absolute bar to any claims disclosed in the article. After a third party informed the EPO of the article in a letter dated March 25, 1983, the EPO issued a notice of deficiency, dated November 12, 1983, which stated that the 1980 article destroyed the novelty of claims 1-24, 27, 29 and 30 of the application. A277. (The numbering and contents of these claims are identical to those of the claims that ultimately issued in the '066 patent.) In response, UPI narrowed its application to the EPO to an aspect not disclosed in the 1980 article, i.e., the use of the nucleotide guanine. A288.

On March 16, 1982, UPI filed a CIP of its '066 application which eventually issued as patent '707.⁵ On September 17, 1982, after the prosecuting examiner had allowed claims 18-42 of UPI's '066 application, Dr. Kelvin K. Ogilvie declared an "interference" (a contest over priority between overlapping claims of rival applications). The overlap was described in the following broadly-worded "count" (or commonly-claimed subject matter): "A process for producing polynucleotides which comprises the step of condensing the 3'-OH or 5'-OH of a nucleoside linked to a functionalized inorganic polymer with a compound which is the reactive product of a nucleoside and a blocked phosphodichloridite.'' A225. As a preliminary matter, for purposes of determining which party of the two was entitled to senior party status,⁶ the patent office found on September 17, 1982 that UPI's challenged claim was entitled to the priority date of the parent application. A224.

On April 7, 1983, UPI filed a motion to dissolve the interference and enclosed the 1980 article as proof of its prior possession, stating that the article "meets every material element and limitation of [the interference count]." A235. Five days later, Ogilvie abandoned the interference, and shortly thereafter UPI withdrew its motion, the interference examiner terminated the interference, and UPI's application was transferred back to the prosecution examiner. Sometime thereafter, in-house counsel Yahwak assumed partial and eventually complete control over the prosecution of the patents at issue.

UPI subsequently filed two more applications at issue in this case: patent '418, filed on June 18, 1984 and issued on July 21, 1992, and patent '319, filed on March 31, 1986 and issued on October 6, 1992. In the eleven years from UPI's filing of patent '066 in 1981 to the issuance of patents '418 and '319 in 1992, other than during the Ogilvie interference and during another interference in 1998, UPI disclosed the 1980 article to the prosecution examiner only once in 1985 and once in 1986. On December 10, 1985, on page six of a 19 page submission requesting an amendment after the rejection of certain claims, UPI wrote "[s]ince Applicant's first report in Tetrahedron Letters, February 1980) of the process described in the present application, the process has become accepted by industry...." D0250. Shortly thereafter, on February 1986, in the remarks section of a proposed amendment after allowance,⁷ UPI expressed their "wish to bring to the Examiner's attention their initial publication regarding the present invention," neglecting however to include a publication date with the reference. D0243. Yahwak, who at this point was in charge of prosecuting the patents at issue, testified that he did so to avoid any question of inequitable conduct, as by this time UPI was in litigation with other parties who were alleging that UPI had concealed the 1980 article. Yahwak Dec. ¶ 9.

B. Circumstances giving rise to the current litigation

In September of 1997, Affymetrix entered into a written Purchase Agreement ("the Agreement") with defendant PerSeptive⁸ in which PerSeptive agreed to sell a certain amount of custom amidite products to Affymetrix during each year of the Agreement until December 31, 2005. Under the Agreement, PerSeptive represented that at the time of contracting, PerSeptive knew of no reason that Affymetrix could not use the delivered amidite products to manufacture oligonucleotides using any method contained in the '069 patent. The Agreement further provided that "[i]f for any reason PerSeptive is not able to make or have made the amidites" for a period exceeding 60 days, PerSeptive was to negotiate in good faith with Affymetrix for licensing rights to the '069 patent. Further, PerSeptive represented that at the time of the sale, it knew of no violations of any patents or other intellectual property rights that would prevent Affymetrix from so using the amidite products. PerSeptive was also obligated under the Agreement to indemnify and defend Affymetrix from infringement claims based on use of the amidite...