Applied Med. Res. Corp. v. U.S. Surgical Corp.

• Decision Date: 14 January 2005
• Docket Number: No. CV 03-1267 CJC(MLGX).,CV 03-1267 CJC(MLGX).
• Citation: 352 F.Supp.2d 1119
• Parties: APPLIED MEDICAL RESOURCES CORPORATION, Plaintiff, v. UNITED STATES SURGICAL CORPORATION, Defendant.
• Court: U.S. District Court — Central District of California

352 F.Supp.2d 1119

APPLIED MEDICAL RESOURCES CORPORATION, Plaintiff, v. UNITED STATES SURGICAL CORPORATION, Defendant.

No. CV 03-1267 CJC(MLGX).

United States District Court, C.D. California, Southern Division.

January 14, 2005.

Bert C. Reiser, David W. Long, William K. West, Jr., Howrey Simon Arnold & White, Washington, DC, Brian C. Horne, Joseph F. Jennings, Joseph R. Re, Karen Vogel Weil, Valerie L. Bracken, Knobbe Martens Olson and Bear, Gregory S. Cordrey, Howrey Simon Arnold & White, Irvine, CA, David L. Bilsker, Howrey Simon Arnold & White, San Francisco, CA, Robert P. Taylor, Howrey Simon Arnold & White, Menlo Park, CA, Karen A. Gibbs, Applied Medical Resources Legal Department, Rancho Santa Margarita, CA, for Plaintiff.

Bradford J. Badke, David F. Owens, Harvey Kurzweil, Kristopher M. Dawes, Lisa B. Deutsch, Dewey Ballantine, New York, NY, Donald L. Morrow, Paul Hastings Janofsky & Walker, Costa Mesa, CA, Fred H. Bartlit, Jr., Glen E. Summers, Bartlit Beck Herman Palenchar & Scott, Denver, CO, Jill Rochelle Trumbull-Harris, Bartlit Beck Herman Palenchar and Scott, Chicago, IL, for Defendant.

ORDER GRANTING PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT REGARDING COLLATERAL ESTOPPEL

CARNEY, District Judge.

Plaintiff Applied Medical Resources Corp. ("Applied") seeks partial summary judgment that Defendant United States Surgical Corp. ("U.S.Surgical") is collaterally estopped from relitigating the validity of Claim 18 of U.S. Patent No. 5,385,553 ("the '553 Patent"). The Court concludes Applied is entitled to such a judgment.¹ The issue of the validity of Claim 18 of the '553 Patent was vigorously litigated and ultimately determined in the parties' previous lawsuit in the Eastern District of Virginia. Consequently, U.S. Surgical cannot now resurrect and relitigate the issue in this lawsuit, even if there are new arguments that U.S. Surgical wants to raise that were not made in the parties' prior lawsuit.

I. THE RELEVANT FACTUAL BACKGROUND²

A. THE HISTORY BETWEEN THE PARTIES

1. THE FIRST LAWSUIT: APPLIED I

In August of 1996, Applied sued U.S. Surgical in the Eastern District of Virginia for infringement of the '553 Patent and two other patents ("Applied I"). See Applied Medical Resources Corp. v. United States Surgical Corp., 967 F.Supp. 861 (E.D.Va.1997). The infringement allegations were based in part on U.S. Surgical's manufacture and sale of the Versaport, a trocar used for laparoscopic surgery. Applied asserted infringement of Claims 4 and 18 of the '553 Patent. Id. As part of its defense, U.S. Surgical argued the asserted claims of the '553 Patent were invalid. Specifically, in its Answer and during pretrial proceedings, U.S. Surgical contended a variety of grounds for the alleged invalidity of the asserted claims of the '553 Patent, including anticipation, obviousness, indefiniteness and failure to disclose the best mode. Ex. A (Answer, September 23, 1996) at 6; Ex. K (Expert Report of Ronald Luther) at ¶ 85.

Applied I was tried before a jury over a 14-day period. During the trial, both parties presented testimonial and documentary evidence of the alleged infringement and alleged invalidity of the '553 Patent. At the conclusion of the evidence, arguments of counsel, and the Court's instructions, the matter was submitted to the jury. The Applied I jury answered "No" to the special interrogatories directed to the validity of Claim 18 of the '553 Patent:

a. Has U.S. Surgical met its burden of proving by clear and convincing evidence that Claim 18 of the '553 patent is anticipated by the prior sale of the 5mm Endoport seal? (Interrogatory No. 2);

b. Has U.S. Surgical met its burden of proving by clear and convincing evidence that Claim 18 of the '553 patent is invalid because it fails to disclose the best mode of practicing the claimed invention? (Interrogatory No. 4);

c. Has U.S. Surgical met its burden of proving by clear and convincing evidence that Claim 18 of the '553 patent is anticipated by a public use of Applied's Sureseal valve more than one year before the effective filing date of the '553 patent application? (Interrogatory No. 7); and

d. Has U.S. Surgical met its burden of proving by clear and convincing evidence that Claim 18 of the '553 patent is anticipated by or [sic] a description in a printed publication of Applied's Sureseal valve more than one year before the effective filing date of the '553 patent? (Interrogatory No. 8).

See Ex. B (Applied I Judgment) and Ex. I (Interrogatories to the Jury) at 4-5, Section VI.

The Versaport was found to infringe Claim 18 of the '553 Patent. Ex. J (Applied I Injunction). The District Court denied each of U.S. Surgical's motions for judgment as a matter of law and entered judgment that Claims 4 and 18 of the '553 Patent were "valid and infringed." Ex. B (Applied I Judgment). Based on the jury verdict, damages were awarded to Applied and the District Court entered an injunction prohibiting U.S. Surgical from "making, using, offering to sell and selling" the infringing trocars. Ex. J (Applied I Injunction).

Following U.S. Surgical's appeal of the Applied I judgment, the Federal Circuit affirmed. Applied Medical Resources Corp. v. United States Surgical Corp., 147 F.3d 1374 (Fed.Cir.1998). The United States Supreme Court denied U.S. Surgical's petition for a writ of certiorari. United States Surgical Corp. v. Applied Medical Resources Corp., 525 U.S. 1104, 119 S.Ct. 870, 142 L.Ed.2d 772 (1999).

2. THE SECOND LAWSUIT: APPLIED II

Following the jury verdict in Applied I, U.S. Surgical introduced a re-designed floating seal trocar, also referred to as the Versaport. In April of 1999, Applied filed suit in this Court, alleging the re-designed Versaport infringed Claims 3 and 18 of the '553 Patent ("Applied II"). In its Answer, U.S. Surgical again asserted an affirmative defense challenging the validity of the '553 Patent. Ex. H (Answer, May 24, 1999).

After intensive briefing, the Court denied summary judgment of infringement as to Claim 18, finding the existence of genuine issues of material fact. Ex. C (Summary Judgment Order, July 10, 2000). In its Summary Judgment Order, the Court also concluded U.S. Surgical was collaterally estopped from raising any challenge as to the validity of the '553 Patent. On February 26, 2002, the Court granted Applied's motion for summary judgment that U.S. Surgical literally infringed Claim 3 of the '553 Patent. Ex. D (Summary Judgment Order, February 26, 2002). By Minute Order, the Court also denied U.S. Surgical's Motion for Invalidity of the '553 Patent, finding U.S. Surgical collaterally estopped from asserting the invalidity of Claim 3. Ex. L (Minute Order, February 26, 2002). On October 15, 2003, the Court issued an order enjoining U.S. Surgical from further infringement. Minute Order, October 15, 2003, SACV 99-0625 CJC (MLGx), docket # 488. Following U.S. Surgical's appeal, the Federal Circuit, without an opinion, affirmed the district court's rulings. Ex. E (Federal Circuit's Rule 36 Affirmance, September 11, 2003).

A jury trial on the issue of damages for U.S. Surgical's infringement of Claim 3 of the '553 Patent was held in this Court beginning July 14, 2004.³ The jury awarded $43.5 million to Applied and found U.S. Surgical's infringement of Claim 3 to be willful. Jury Verdict Form, SACV 99-0625 CJC (MLGx), docket # 820. The Court then used its discretion and enhanced the damages by 25 percent. Minute Order, October 1, 2004, SACV 99-0625 CJC (MLGx), docket # 856.

B. THE PRESENT LAWSUIT: APPLIED III

The current action, filed in July of 2003, represents the third lawsuit initiated by Applied against U.S. Surgical for infringement of the '553 Patent ("Applied III"). Upon entry of the injunction in Applied II, U.S. Surgical introduced another re-design of its trocar, referred to as the Versaport Plus. Claim 18 of the '553 Patent is the only patent claim at issue in this lawsuit. In its Answer, U.S. Surgical has asserted an affirmative defense of patent invalidity. Specifically, U.S. Surgical's Answer alleges: "Certain claims of the '553 Patent are invalid because they fail to comply with the requirements of the patent laws of the United States, including without limitation sections 102, 103 and 112 of Title 35 of the United States Code." Ex. F. (Answer, September 22, 2003).

As stated above, on November 15, 2004 Applied moved for summary judgment that, based upon the judgment in Applied I, U.S. Surgical is barred by collateral estoppel from relitigating the issue of whether Claim 18 of the '553 Patent is valid.⁴

II. STANDARD FOR SUMMARY JUDGMENT

Pursuant to Federal Rules of Civil Procedure 56(c), summary judgment is appropriate when there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c). Upon a showing that there is no genuine issue of material fact as to a particular claim or defense, a court may grant summary judgment in the party's favor "upon all or any part thereof." Fed.R.Civ.P. 56(a). Determination of a motion for summary judgment is appropriate when the parties raise only questions of law, the resolution of which does not involve disputed material facts. Delbon Radiology v. Turlock Diagnostic Center, 839 F.Supp. 1388, 1391 (E.D.Cal.1993). The applicability of collateral estoppel in this case is a pure issue of law that does not involve any disputed facts. Fireman's Fund Ins. Co. v. Stites, 258 F.3d 1016, 1020 (9th Cir.2001).

III. APPLICATION OF COLLATERAL ESTOPPEL IS APPROPRIATE

A. THE ISSUE OF INVALIDITY OF THE '553 PATENT HAS ALREADY BEEN LITIGATED

Collateral estoppel, also referred to as issue preclusion, bars the relitigation of an issue actually adjudicated in previous litigation between the same parties. Stated differently, "[u]nder collateral estoppel, once a court has decided an issue of fact or law necessary to its judgment, that decision may preclude relitigation of the issue in a suit on a...