American Medical Systems v. MEDICAL ENGINEERING

• Decision Date: 25 June 1992
• Docket Number: No. 87-C-1236(JPS).,87-C-1236(JPS).
• Citation: 794 F. Supp. 1370
• Parties: AMERICAN MEDICAL SYSTEMS, INC., Plaintiff, v. MEDICAL ENGINEERING CORPORATION, Defendant.
• Court: U.S. District Court — Eastern District of Wisconsin

794 F. Supp. 1370

AMERICAN MEDICAL SYSTEMS, INC., Plaintiff, v. MEDICAL ENGINEERING CORPORATION, Defendant.

No. 87-C-1236(JPS).

United States District Court, E.D. Wisconsin.

June 25, 1992.

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

George Pazuniak, Rudolf E. Hutz, Eric Hutz, Connolly, Bove, Lodge & Hutz, Wilmington, Del., C. Thomas Sylke, Whyte & Hirschboeck, Milwaukee, Wis., for plaintiff.

Mark T. Banner, Jerry A. Riedinger, Grantland G. Drutchas, Marc S. Cooperman, Allegretti & Witcoff, Ltd., Chicago, Ill., Bruce R. Bauer, David R. Cross, Quarles & Brady, Milwaukee, Wis., for defendant.

DECISION AND ORDER

STADTMUELLER, District Judge.

I. INTRODUCTION

This action was filed by American Medical Systems, Inc. (AMS) against Medical Engineering Corporation (MEC) in October 1987. AMS owns, via assignment from William Klatt, U.S. Patent Number 4,597,765, entitled "Method and Apparatus for Packaging a Fluid Containing Prosthesis." AMS claims MEC has infringed the patent. MEC has counterclaimed for a declaration of invalidity of the patent, and for relief due to AMS' alleged breach of certain agreements between the parties. The case was tried to the court, sitting without a jury, for three weeks. Pursuant to Fed. R.Civ.P. 52 the following constitutes the court's findings of fact and conclusions of law.

II. THE PARTIES AND JURISDICTION

AMS is a Minnesota corporation with its principal place of business in Minnetonka, Minnesota. Its business is devoted to the research, development, manufacture and sale of penile prosthesis and other medical products of a urological nature. AMS was an independent company until May 1985, when it became a wholly-owned subsidiary of Pfizer Inc.

MEC is a Delaware corporation with its principal place of business in Racine, Wisconsin. MEC's business, too, is devoted to medical products, including mammary and penile prosthesis and urinary stents. Since 1982 MEC has been a wholly-owned subsidiary of the Bristol Meyers-Squibb Corporation.

The jurisdiction of the court arises under 28 U.S.C. § 1338(a). Venue is proper in this district pursuant to 28 U.S.C. § 1400(b).

III. THE EVOLUTION OF THE PENILE PROSTHESIS

Erectile dysfunction affects more than five million men in the United States. The causes range from the physiological to the psychological. Common physical causes include diabetes, neurological or vascular disease, prostate surgery and spinal cord injuries, to name but a few. One of the recognized treatments for erectile dysfunction is the insertion of a penile prosthesis.

The first modern penile prosthesis, known as "rods" and "multi-component inflatables," were developed in the early 1970s and continue to be actively marketed. Both AMS and MEC manufacture the rod prosthesis: respectively, the AMS 600 (Figure A)¹ and the MEC Flexi-Rod. The "rod" type device is generally comprised of cylinders of silicone material, sometimes with a metal wire core. Two cylinders are surgically implanted in the corpora cavernosa of the penis. The cylinders are always rigid, and at coitus are simply physically manipulated into position. The advantages of this device are that it is simple, inexpensive, easy to implant and essentially free from mechanical failure. On the other hand, the rods permanently rigidized the phallus, resulting in a lack of flaccidity and concomitant problems with concealment.

The multi-component inflatable device such as the AMS 700CX (Figure B) consists of a reservoir, at least one pump, and a pair of inflatable cylinders, all connected by tubing. Hence, the product is often referenced as a "three-piece" device. The reservoir is implanted in the patient's abdominal cavity, the pump in the scrotum, and the pair of cylinders in the corpora cavernosa. In operation, fluid is forced from the reservoir to the cylinders by pumping at the scrotum, which pressurizes and rigidizes the cylinders and phallus. Thereafter, a release valve in the pump can be activated to return the fluid to the reservoir, deflating the cylinders and returning the phallus to a flacid state. The advantages of this device are its superior rigidity, excellent flaccidity and concealment, and the natural look and feel it afforded. However, it requires more invasive surgery, is more expensive, and is more prone to malfunction.

Later in the 1970s both AMS and MEC independently began working on a "self-contained" prosthesis. Both designs consisted of a hydraulic, inflatable, fluid-permeable silicone cylinder with the reservoir and pump contained in the cylinder. Both efforts were geared to obtaining the benefits of the three-piece device while avoiding the multiple components and invasive surgery of the three-piece on the one hand and the permanent rigidity of the rods on the other.

MEC reached the market first, in October 1984, with a product called "Flexi-Flate." (Figure C).² The prosthesis was shipped sterile but unfilled — that is, without the saline necessary to drive the hydraulic components of the device. This "dry pack" configuration created problems.

First, quality control was compromised, since MEC was unable to conduct final functional quality control testing on all the devices. The best that could be done was to test a sample and hope it was representative. There were also problems associated with filling the prosthesis in the operating room. The doctor had to open the patient to determine the appropriate size prosthesis. Then, while the patient was open, the doctor had to fill the two Flexi-Flate cylinders with saline and aspirate them in a procedure that could easily take up to 30 minutes for a surgeon new to the process. The saline had to be specially filtered during filling to avoid the small particulate matter normally found even in the sterile, hospital-grade variety; such particulate can clog the sensitive valves in the cylinders. (Ex. 36 at 7). In addition, the amount of saline to be added to a cylinder was less than a tablespoon, about 8-12 cc, depending on the size of the prosthesis. Precision was critical; underfilling would produce a prosthesis that did not properly rigidize, and overfilling would create a prosthesis which would not deflate properly. The record reflects a number of instances of improper filling during surgeries utilizing the dry-pack prosthesis. (Exs. 55, 58-61, 92-95).

IV. KLATT'S INVENTION

In the 1970's AMS began developing its own self-contained penile prosthesis, called the Hydroflex. At least as early as January 1981 AMS knew that having a prefilled and sterile device would be important in the long run. (Ex. 533). By November 1983, AMS was actively seeking a method of providing a prefilled sterile device to the surgeon for surgical implant. (Tr. 1673-74; Ex. 511). The responsibility for solving the problem was assigned to AMS engineer William Klatt.³

Klatt spoke with the designer of the Hydroflex device about its design characteristics. He also spoke to the marketing department to find out what kind of package characteristics they would want. He was told they wanted a small, easy to open, two layer package. This packaging would allow a non-sterile nurse to open the non-sterile outer package and present the sterile inner package to a sterile nurse to open in the operating field. Mr. Klatt also spoke with a number of packaging material suppliers, including Kapak Corporation, whose pouches were ultimately used to package the Hydroflex. (Tr. 1675, 1687-1690). In addition, he discussed sterilization methods and sterilization validation with an AMS quality control engineer, John Westrom, and an independent consultant, Skyland Laboratories. (Tr. 1674-76). Mr. Klatt had generally conceived his solution by December 1983: "Place prefilled Hydroflex in package, fill package with .9% salt solution, seal package, sterilize." (Tr. 1678; Ex. 511 at Bates 217). Testing and validation of the solution, however, continued until at least late 1984. (Tr. 1684; Ex. 511).

The wet pack configuration had clear advantages over the dry pack. The prosthesis could be accurately filled with particulate-free saline, and the device could be sterilized by the manufacturer before shipment. This guaranteed quality control to the fullest extent possible by eliminating the intervening operating room filling procedure before implantation. As a result, the functional properties of the device would not change from the time of manufacture to the time of implantation. In addition, since there was no filling to be done in the operating room, the surgeon was able to immediately implant the device. The elimination of the intervening step reduced the amount of time the patient was under anesthesia, as well as the overall cost of the surgical procedure.⁴

AMS sought to patent the combination of prefilled Hydroflex and packaging created by Mr. Klatt. The invention is fully described in the patent, and discloses how to make and use the invention to obtain its benefits. The patent claims are divided into product claims and method claims. The former, claims 1-12 and 21-24, define the prefilled and presterilized packaged prosthesis. Claim 2 is representative of the product claims⁵:

A packaged fluid containing prosthesis adapted to be implanted in a sterile condition, said prosthesis comprising:

a prosthetic device, wherein said prosthetic device is an inflatable penile prosthesis, having a closed, permeable housing defining a fluid containing chamber;

a sealed, substantially fluid impenetrable enclosure surrounding said housing and defining a liquid retaining space between said enclosure and said housing, said enclosure adapted for separation from said device prior to implantation of said device; and said enclosure containing a liquid in said space with activities that substantially match the activities of the fluid in said chamber such that the mass transfer gradient across the permeable housing is insubstantial.

The other product claims add various other limitations to this structure....