Boston Scientific Corp. v. Schneider (Europe) Ag

• Decision Date: 23 October 1997
• Docket Number: CIV. A. No. 94-10967-DPW.,CIV. A. No. 95-12715-DPW.
• Citation: 983 F.Supp. 245
• Parties: BOSTON SCIENTIFIC CORP., Plaintiff, Defendant-in-Counterclaim, v. SCHNEIDER (EUROPE) AG, and Schneider (USA) Inc., Defendants and Counterclaimants, v. SCIMED LIFE SYSTEMS, INC., Defendant-in-Counterclaim. BOSTON SCIENTIFIC CORP. and Scimed Life Systems, Inc., Plaintiffs, v. ADVANCED CARDIOVASCULAR SYSTEMS, INC., and Schneider (Europe) AG, and Schneider (USA), Inc. Defendants.
• Court: U.S. District Court — District of Massachusetts

983 F.Supp. 245

BOSTON SCIENTIFIC CORP., Plaintiff, Defendant-in-Counterclaim, v. SCHNEIDER (EUROPE) AG, and Schneider (USA) Inc., Defendants and Counterclaimants, v. SCIMED LIFE SYSTEMS, INC., Defendant-in-Counterclaim.

BOSTON SCIENTIFIC CORP. and Scimed Life Systems, Inc., Plaintiffs, v. ADVANCED CARDIOVASCULAR SYSTEMS, INC., and Schneider (Europe) AG, and Schneider (USA), Inc. Defendants.

CIV. A. No. 94-10967-DPW.

CIV. A. No. 95-12715-DPW.

United States District Court, D. Massachusetts.

October 23, 1997.

COPYRIGHT MATERIAL OMITTED

Robert E. Hillman, Heidi E. Harvey, John M. Skenyon, Fish & Richardson, Boston, MA, for Boston Scientific Corp.

John E. Kidd, Louis Greco, Donald L. Rhoads, Rogers & Wells, New York City, Michael B. Bogdanow, Cynthia J. Cohen, Meehan, Boyle & Cohen, PC, Boston, MA, Timothy C. Blank, Dechert, Price & Rhoades, Boston, MA, Joseph A. Tate, Judy L. Leone, Martin J. Black, Dechert Price & Rhoades, Philadelphia, PA, for Schneider (USA) AG.

Robert E. Hillman, Heidi E. Harvey, Kurt L. Glitzenstein, Fish & Richardson, Boston, MA, for SciMed Life Systems, Inc.

Paul F. Ware, Goodwin, Proctor & Hoar, Boston, MA, for Advanced Cardiovascular Systems, Inc.

Bryan Baumeister, Roger & Wells, New York City.

Leora Ben-Ami, Annette M. McGarry, John E. Kidd, Roger & Wells, New York City.

MEMORANDUM AND ORDERS

WOODLOCK, District Judge.

I.

These two cases present images from the kaleidoscopic reconfigurations of products, affiliations and litigation undertaken during the past decade by four competitors in the market for medical devices designed to treat clogged coronary arteries.

The first case before me (Civil Action No. 94-10967-DPW) was initiated by Competitor A to establish that its products do not infringe the patent controlled by Competitor B or alternatively that the patent is invalid. Competitor B has counterclaimed alleging infringement.

During the course of this litigation, Competitor A merged with Competitor C. Competitor C in earlier litigation had unsuccessfully challenged the validity of Competitor B's patent. After the merger, Competitor A and Competitor C centralized the medical device business at issue here in Competitor C. The pleadings before me have been amended to permit Competitor B to allege infringement by Competitor C. The pleadings were also amended to permit Competitor A to allege inequitable conduct by Competitor B in the acquisition of the patent, an allegation which Competitor A's new affiliate, Competitor C, had also unsuccessfully pressed in its earlier litigation with Competitor B.

The second case before me (Civil Action No. 95-12715-DPW) was initiated by Competitors A and C to attack Competitor B's patent by alleging an antitrust violation arising out of a cross licensing agreement between Competitor B and Competitor D. Competitor D is yet another active participant in this medical device market with whom Competitors A, B and C have variously been engaged in litigation over the past decade.

The parties have filed six dispositive motions raising a classic question of patent infringement but also raising questions of first impression concerning the preclusive effect of prior litigation and the fundamental question of the proper interplay between patents and antitrust law.

II. The Pending Motions

Competitor A, plaintiff Boston Scientific Corporation ("BSC")¹ filed Civil Action No. 94-10967 (the "patent action") on May 13, 1994, against Competitor B, Schneider (Europe) AG and Schneider (USA) Inc. (collectively "Schneider")² seeking a declaratory judgment of noninfringement and invalidity as to United States Patent No. 4,762,129 (the "′129 patent"). BSC now moves for summary judgment on the issue of non-infringement.

In turn, Schneider moves 1) for partial summary judgment that BSC not be allowed to litigate the issue of validity; 2) for partial summary judgment that BSC not be allowed to litigate the issue of inequitable conduct;³ and 3) for partial summary judgment dismissing the second affirmative defense of unenforceability, filed by Competitor C, BSC's wholly owned subsidiary SciMed Life System, Inc. ("SciMed").⁴ Schneider argues that these three partial summary judgment issues were conclusively determined before Judge Alsop in the United States District Court for the District of Minnesota in Schneider (Europe) AG v. SciMed Life Systems, Inc., 852 F.Supp. 813 (D.Minn.1994), aff'd, 60 F.3d 839 (Fed.Cir.), cert. denied, ___ U.S. ___, 116 S.Ct. 520, 133 L.Ed.2d 427 (1995) ("the SciMed action").

In Civil Action No. 95-12715 (the "antitrust action") BSC and SciMed together bring an antitrust action against Schneider and Competitor D, Advanced Cardiovascular Systems, Inc. ("ACS").⁵ BSC and SciMed argue that Schneider and ACS have wrongfully obtained patents and have since used these patents to dominate the rapid exchange catheter market in the United States.

Specifically, BSC and SciMed assert that Schneider and ACS — through alleged inequitable conduct before the patent office and in other litigation, and by using a cross-licensing settlement agreement between Schneider and ACS for Schneider's Bonzel patent and ACS's series of Yock patents — have a) monopolized trade, conspired to monopolize trade, and attempted to monopolize trade in violation of Section 2 of the Sherman Act and applicable state antitrust laws (Counts 1-3); b) conspired to restrain trade in violation of Section 1 of the Sherman Act and applicable state antitrust laws (Count 4); c) violated unfair competition laws under Mass. Gen. L. ch. 93A (Count 5); and d) violated state abuse of process laws (Count 6). Before me are motions to dismiss by Schneider and ACS pursuant to Fed.R.Civ.P. 12(b)(6).

I note that in the antitrust action BSC and SciMed raise essentially the same issues (with the same supporting facts) as they have in the patent action with regard to the invalidity of the Bonzel patent due to Schneider's alleged inequitable conduct before the PTO and in the SciMed action.

III. Background

A. The Invention

The '129 (or "Bonzel") patent, entitled "Dilatation Catheter" (also known as a "balloon dilatation catheter" or, more commonly, a "rapid exchange catheter") was issued on August 9, 1988 and names Tassilo Bonzel as the inventor. The patent was amended by U.S. Reexamination Certificate B1 4,762,129 issued on July 2, 1991, pursuant to 35 U.S.C. § 304.⁶ Schneider (Europe) is the exclusive licensee, and Schneider (USA) is a sub-licensee.

In general, the catheters at issue in this case are used to treat coronary arteries that are clogged with fatty deposits ("lesions") in areas known as "stenoses." Such deposits obstruct the coronary arteries and can cause angina or a heart attack if blood flow is blocked. A procedure known as angioplasty utilizes a balloon dilatation catheter to open clogged arteries and improve blood flow. A Percutaneous Transluminal Coronary Angioplasty ("PTCA") is a special angioplasty procedure that is a less invasive alternative to coronary artery bypass surgery, and is performed by specialists known as "interventional cardiologists."⁷

First, a wide-diameter guiding catheter is inserted into the femoral artery in the patient's groin area and threaded through the blood vessels to the "ostium," or opening, of the coronary arteries. Next, a smaller diameter balloon dilatation catheter (a long, thin, plastic tube with an expandable balloon positioned on the tip) is inserted inside the larger catheter. This balloon catheter, complete with guide wire, which the doctor manipulates outside the patient's body, is also threaded to the point of the ostium. The distal tip (i.e., the end that is farthest away from the physician) of the guide wire is pushed beyond the stenosis. The balloon catheter is pushed forward along the guide wire until the balloon is beside (or inside) the stenosis. The balloon is then inflated to crack the stenosis and widen the artery walls, thereby restoring blood flow.

Balloon catheters for dilatation of human coronary arteries (and the PTCA procedure) were first introduced in 1977. However, since that time many different designs have been developed. The first design or "prior known as the "over-the-wire" catheter, utilizes two tubes (or "lumens") of the same length leading to the balloon — one covering the wire, and one for inflation.⁸ As of November 1984 the prevalent view among the majority of cardiologists was that it was necessary for an over-the-wire catheter to have a full-length guide wire lumen to assist, for example, in measuring blood pressure and withdrawing the balloon catheter. See SciMed, 852 F.Supp. at 826.

However, a problem with this design emerged whenever a physician needed to remove a balloon catheter mid-way through the procedure and insert a new one (because, for example, the balloon was too small or too large). Obviously, it was not desirable to remove the entire contraption (catheter and guide wire) from a patient's body, due to the risk and time involved in re-threading. It was preferable to leave the guide wire in place, remove the balloon catheter, and thread a new catheter over the existing guide wire. However, this procedure required the wire to be double the length of the catheter, so that as the physician slid the catheter back out over the wire, there would be enough wire outside the body to receive the catheter as it was withdrawn and still leave bare wire for a physician to hold.⁹ This complicated procedure usually required two physicians.

The Bonzel invention resolves this problem by using a short guide wire tube instead of a full-length guide wire tube. Both tubes are still employed beginning at the balloon (the distal end), but the guide wire tube terminates shortly thereafter. As a result, the guide wire exits from this short shaft instead of exiting at the end of the full length of the catheter. This change allows one physician to slide the catheter off the wire and easily insert another while still...