Central Admixture Pharmacy v. Advanced Cardiac

• Decision Date: 03 April 2007
• Docket Number: No. 2006-1307.,2006-1307.
• Parties: CENTRAL ADMIXTURE PHARMACY SERVICES, INC. and Dr. Gerald D. Buckberg, Plaintiffs-Appellees, v. ADVANCED CARDIAC SOLUTIONS, P.C. and Charles Wall, Defendants-Appellants.
• Court: U.S. Court of Appeals — Federal Circuit

482 F.3d 1347

CENTRAL ADMIXTURE PHARMACY SERVICES, INC. and Dr. Gerald D. Buckberg, Plaintiffs-Appellees, v. ADVANCED CARDIAC SOLUTIONS, P.C. and Charles Wall, Defendants-Appellants.

No. 2006-1307.

United States Court of Appeals, Federal Circuit.

April 3, 2007.

Brett J. Williamson, O'Melveny & Myers LLP, of Newport Beach, CA, argued for plaintiffs-appellees. With him on the brief was Nathaniel L. Dilger.

Robert J. Veal, Smith, Gambrell & Russell, LLP, of Atlanta, GA, argued for defendants-appellants. With him on the brief was Brendan E. Squire.

Before SCHALL, GAJARSA, and PROST, Circuit Judges.

GAJARSA, Circuit Judge.

In this patent infringement case, defendants Advanced Cardiac Solutions and Charles Wall (collectively "ACS") appeal from several summary judgment orders issued by the United States District Court for the Northern District of Alabama. The district court found ACS liable to plaintiffs Central Admixture Pharmacy Services ("CAPS") and Dr. Gerald Buckberg for willful infringement of U.S. Patent No. 4,988,515 ("the '515 patent"), and dismissed ACS's counterclaims of false marking and false advertisement. Because the certificate of correction CAPS obtained from the U.S. Patent and Trademark Office ("PTO") to alter the asserted claims of the '515 patent is invalid, we vacate the finding of infringement and remand for a redetermination of infringement under the patent's original, uncorrected claims. We affirm the district court's summary judgment findings that the patent is not invalid and that CAPS did not commit false marking or false advertisement, as well as the court's procedural rulings with respect to ACS's defenses of inequitable conduct and patent misuse.

I. BACKGROUND

A. The Technology and Patent

The patent at issue claims a chemical solution used during heart surgery. If blood supply to the heart is interrupted during surgery, lack of fresh blood ("ischemia") will, untreated, cause cardiac tissue to die. '515 patent col.1 ll.11-22. The patented solution contains glucose and amino acids to nourish the heart tissue even without a continuous supply of blood, allowing surgeons to operate on the heart for longer periods of time.

The patent has claims directed to the solution and to methods of treatment using the solution. For the purposes of the issues we reach on this appeal, Claim 1 is representative. That claim initially read:

In an amino acid enriched cardioplegic solution for use in treating human hearts to prevent or reverse heart muscle damage due to ischemia, said cardioplegic solution having a calcium ion concentration, a metabolizable substrate concentration and an osmolarity, wherein the improvement comprises:

maintaining said calcium ion concentration of said cardioplegic solution at a lowered level of between about 50-300 umol;

maintaining said concentration of metabolizable substrate in said cardioplegic solution between about 400-1000 mg % wherein said metabolizable substrate is selected from the group consisting of glucose, fructose, a salt of malic acid, a salt of succinic acid and a salt of pyruvic acid; and

maintaining said osmolarity of said cardioplegic solution at an increased level of between about 400-500 mOsmol.

'515 patent col.8 l.56 to col.9 l.5 (emphasis added).

B. The Certificate of Correction

On December 15, 1999, CAPS applied, pursuant to 35 U.S.C. § 255, for a certificate of correction to replace all instances of the word "osmolarity" in the '515 patent with the word "osmolality."

Section 255 provides:

Whenever a mistake of a clerical or typographical nature, or of minor character, which was not the fault of the Patent and Trademark Office, appears in a patent and a showing has been made that such mistake occurred in good faith, the Director may, upon payment of the required fee, issue a certificate of correction, if the correction does not involve such changes in the patent as would constitute new matter or would require reexamination. Such patent, together with the certificate, shall have the same effect and operation in law on the trial of actions for causes thereafter arising as if the same had been originally issued in such corrected form.

On January 30, 2001, after the complaint in this lawsuit was filed, the PTO issued the requested certificate. The two terms, which each describe the concentration of a chemical solution contributing to that solution's osmotic pressure, are related but subtly different in meaning. "Osmolarity" refers to the amount of solute (dissolved chemical) per liter of total solution. At the concentrations involved in this case, osmolarity is measured in milliosmoles per liter (mOsmol/L). In contrast, "osmolality" refers to the amount of solute per kilogram of solvent. It is measured in milliosmoles per kilogram (mOsmol/kg). Osmolality can be more-or-less directly measured and calculated using a device called an osmometer, which computes osmolality from the depression of the solution's freezing point. Osmolarity is derived from the osmolality figure.

As highlighted above, the asserted patent claims initially required the solution to have an "osmolarity . . . of between about 400-500 mOsmol," but after the certificate issued, the claims required an "osmolality . . . of between about 400-500 mOsmol."¹ (emphasis added). For the solutions at issue here, the numerical figure for osmolarity will be less than the figure for osmolality by about one or two percent.² The result of this change is to cause the claimed concentration range to shift slightly downwards, covering less-concentrated solutions near the low end of the claimed range and ceasing to cover more-concentrated solutions near the high end. All of the allegedly infringing solutions have concentrations near the low end of the claimed range. Because of the change in the range, it is more likely that the accused solutions infringe the corrected claims, while they may not have infringed the original claims.

C. Dr. Buckberg's Dealings with UC and NIH

The research that led to the '515 patent was conducted under a grant awarded by the National Institutes of Health ("NIH") to Dr. Buckberg's employer, the University of California ("UC"). '515 patent col.1 ll.23-25. The government therefore has certain rights with respect to the patent under the Bayh-Dole Act, 35 U.S.C. §§ 200-212, including the right to be notified of the invention, id. § 202(c)(1), to obtain patents in foreign countries where the inventor does not pursue patent applications, id. § 202(c)(3), a royalty-free nonexclusive license, id. § 202(c)(4), and the ability under certain circumstances to "march-in" and compel the patentee to grant a license to a third party, id. § 203.

During patent prosecution, Dr. Buckberg designated UC as his assignee. On February 12, 1987, UC communicated to NIH its intent to abandon its interest in the pending application. One month later, Dr. Buckberg wrote to NIH to request that it waive patent rights in the application so that he could pursue the application in his personal capacity. See 35 U.S.C. § 202(d) (allowing agencies to grant such requests). NIH granted that waiver on September 23, 1987, on the condition that "the inventor shall grant to the Government of the United States a nonexclusive, irrevocable, royalty-free license to use the invention for governmental purposes. . . . This determination will become effective upon receipt of the executed copy [of the license]." Dr. Buckberg made an admission under Fed.R.Civ.P. 36 that he never executed the requested license.³ The patent issued on January 29, 1991. On June 24, 1991, UC assigned its interest in the '515 patent to Dr. Buckberg. The same day, Dr. Buckberg exclusively licensed the patent to CAPS.

D. Litigation History

On August 31, 2000, CAPS filed this infringement suit. Dr. Buckberg later joined as a plaintiff. In an order dated January 13, 2006, the district court disposed of most of the issues in the case. It found that the plaintiffs had standing to bring this suit, granted summary judgment to the plaintiffs that the patent was not invalid and that the plaintiffs had not committed false marking or false advertising, and dismissed the defendants' inequitable conduct defense on the pleadings. It also granted to the plaintiffs conditional summary judgment of infringement and willfulness for actions occurring after the issuance of the certificate of correction, contingent upon the certificate being found valid. The district court later determined that the certificate was valid as a matter of law. The plaintiffs then withdrew their claims of infringement for acts prior to the issuance of the certificate, making the district court's infringement and willfulness judgments final as to all acts of infringement still alleged by the plaintiffs. ACS timely appealed to this court.

II. DISCUSSION

A. Standing

ACS argues that CAPS lacks standing to bring this action because, as a result of Dr. Buckberg's failure to execute the license required by NIH, neither CAPS nor Dr. Buckberg have rights to the '515 patent. If ACS is correct, this action must be dismissed since only the patent owner or the holder of all substantial rights under the patent may sue for infringement. See Propat Int'l Corp. v. Rpost, Inc., 473 F.3d 1187, 1189-93 (Fed. Cir.2007); Fieldturf, Inc. v. Sw. Recreational Indus., 357 F.3d 1266, 1268-70 (Fed.Cir.2004); Speedplay, Inc. v. Bebop, Inc., 211 F.3d 1245, 1249-52 (Fed.Cir. 2000); Rite-Hite Corp. v. Kelley Co., 56 F.3d 1538, 1551-52 (Fed.Cir.1995) (en banc).

As an initial matter, Dr. Buckberg admitted pursuant to Fed.R.Civ.P. 36 that he did not execute the license to NIH. He later sought to retract that admission, but the district court refused to allow him to do so. That refusal was not an abuse of discretion, so the fact that Dr. Buckberg did not execute the license is for the purposes of this case "conclusively established." Fed.R.Civ.P. 36(b).

We discussed the consequences of a patentee's...