Cerner Corporation v. Visicu, Inc.

• Decision Date: 26 October 2009
• Docket Number: Case No. 04-1033-CV-W-GAF.
• Citation: 667 F.Supp.2d 1062
• Parties: CERNER CORPORATION, Plaintiff/Counter-Defendant, v. VISICU, INC., Defendant/Counterclaimant.
• Court: U.S. District Court — Western District of Missouri

667 F.Supp.2d 1062

CERNER CORPORATION, Plaintiff/Counter-Defendant, v. VISICU, INC., Defendant/Counterclaimant.

Case No. 04-1033-CV-W-GAF.

United States District Court, W.D. Missouri, Western Division.

October 26, 2009.

COPYRIGHT MATERIAL OMITTED

Bart A. Starr, Basil Trent Webb, Holly L. Teeter, Jason Mudd, Jonathan N. Zerger, Shook Hardy & Bacon LLP, Kansas City, MO, for Plaintiff/Counter-Defendant.

Todd R. Samelman, Autumn N. Nero, Colin G. Sandercock, David L. Anstaett, David E. Jones, Steven W. Allis, Perkins Coie, LLP, Washington, DC, Gerald M. Kraai, Lathrop & Gage LLP, Overland Park, KS, John S. Skilton, Lissa R. Koop, Perkins Coie, LLP, Madison, WI, Warren J. Rheaume, Davis Wright Tremaine LLP, Seattle, WA, for Defendant/Counterclaimant.

ORDER

GARY A. FENNER, District Judge.

Now pending before the Court are six separate Motions for Summary Judgment concerning various issues present in this patent infringement case.¹ (Doc. ## 230, 232, 237, 241, 244, 269). After extensive briefing by the parties and careful consideration by the Court, Plaintiff/Counter-Defendant Cerner Corporation's ("Cerner") Motion regarding non-infringement (Doc. # 269) is DENIED; Cerner's Motion regarding invalidity (Doc. #244) is DENIED; Cerner's Motion regarding intervening rights (Doc. # 237) is GRANTED; Cerner's Motion regarding willful infringement (Doc. # 241) is DENIED; Cerner's Motion regarding misappropriation of trade secrets (Doc. #230) is GRANTED in part and DENIED in part; and Defendant/Counterclaimant Visicu, Inc.'s ("Visicu") Motion regarding no inequitable conduct (Doc. # 232) is DENIED.

DISCUSSION

I. Facts

A. Procedural History

Cerner initiated the instant action on November 12, 2004, seeking declarations that (1) it had not infringed and is not infringing Visicu's United States Patent No. 6,804,656 ("the '656 patent"), either directly or contributorily; (2) the '656 patent is invalid; (3) the '656 patent is unenforceable due to patent misuse and/or inequitable conduct; and (4) Visicu engaged in unfair competition and tortious interference with Cerner's contracts and business expectancies. (Doc. # 1). Two months later, Cerner filed its First Amended Complaint, seeking identical relief. (Doc. # 14). On October 23, 2005, Visicu answered and asserted the following counterclaims: (1) Patent Infringement; (2) Inducement of Patent Infringement; (3) Contributory Patent Infringement; (4) Trade Secret Misappropriation; (5) Breach of Contract; (6) Unfair Competition under the Lanham Act; (7) Common Law Unfair Competition; (8) Injurious Falsehood; and (9) Tortious Interference with Contract and Business Expectancy. (Doc. #57). On December 6, 2005, the Court stayed the case pending reexamination of the '656 patent by the United States Patent and Trademark Office ("PTO") and, approximately two years later, the stay was lifted. (Doc. ## 91, 103-04).

On January 7, 2008, Cerner filed its Second Amended Complaint, requesting additional declarations that it did not infringe Visicu's United States Patent No. 7,256,708 ("the '708 patent") and that the '708 patent is invalid and/or unenforceable. (Doc. # 116). Twenty-one days later, Visicu answered and amended its counterclaims to add claims of infringement, both direct and contributory, of the '708 patent. (Doc. # 117). On July 10, 2008, the Court held the Markman hearing and then issued its Claim Construction Order on July 23, 2008. (Doc. ## 134-35).

On May 15, 2009, Cerner filed its Third Amended Complaint with leave from the Court, asserting additional allegations of inequitable conduct. (Doc. #204). Cerner filed its Fourth Amended Complaint on July 28, 2009, dropping its unfair competition and tortious interference claims. (Doc. #252). Thereafter, Visicu abandoned its breach of contract, unfair competition, injurious falsehood, and tortious interference claims. (Doc. # 253).

B. Factual Background

In 1998, Drs. Brian A. Rosenfeld and Michael Breslow founded Visicu for the purpose of developing and distributing an intensive care unit ("ICU") system to assist clinicians with the monitoring and management of ICU patients. (Henkind Rpt., ¶¶ 19, 21). Visicu's ICU solution, the eICU remote monitoring system, featured both remote monitoring capabilities and clinical decision support (e.g. clinical content, algorithms, decision flowcharts, etc.) to help clinicians make decisions and guide care. Id. at ¶ 21. Visicu installed its first system in 2000. Id. at ¶ 19.

Cerner's ICU product is built around a core module called INET, which was first installed in 1999. (Henkind Rpt., ¶ 25). INET, as it stood prior to 2001, has been described as "weak," "inadequate for the critical care market space," and consisting of only "a nursing documentation system." (CERN057223-27; Fackler Depo., 15:7-12).

In the Spring of 2001, Visicu and Cerner commenced discussions regarding a possible partnership between the two parties, wherein Visicu's eICU remote monitoring system, then known as Argus, would be built upon Cerner's existing architecture. (Bowerman Depo., 36:19-37:6; Super Depo., 133:3-19; VIS0212261-62, 69, 76-79). While the partnership never came to fruition, Visicu and Cerner exchanged information regarding their respective systems, including the Gap Analysis and the Future Feature List documents. (Gap Analysis; Future Features List). Some of this information was or became public. (Henkind Depo., 132:7-24). Following the discussions, Cerner identified some features of Visicu's eICU remote monitoring system as "key" or "significant." (CERN017059; CERN010464-66).

Visicu attempted to keep detailed information about its product confidential. It was standard operating procedure at Visicu for contractors to sign a non-disclosure agreement prior to being shown any Visicu confidential information. (Bowerman Depo., 201:2-202:15). In fact, the discussions between Visicu and Cerner were covered by two confidentiality agreements, executed on April 18, 2001, and January 23, 2002. (4/18/01 Non-Disclosure Agreement ("NDA"); 1/23/02 NDA). Additionally, Visicu's technology team would not provide lists of features or screen shots of its eICU remote monitoring system without a confidentiality agreement in place and did not send electronic user manuals to its clients for fear of dissemination to individuals not under a NDA. (Bowerman Depo., 182:21-184:9). Visicu asserts that at all sales presentations in which purported confidential information was revealed, potential customers were required to sign a NDA. (Rosenfeld Depo., 295:15-296:20, 297:11-298:14; Doerfler Depo., 269:1-273:6).

Nevertheless, some information did become publicly available despite Visicu's practices to keep information confidential. A sales power-point presentation, which included screen shots, was available on the Internet beginning in 2004. (Internet Archive Wayback Machine, http://web. archive.org/web/20041011195036/http://www.nocalhimss.org/new/presentations/ 10040511—Meyers.pdf).² Additionally, Visicu's December 28, 2000, Patent Cooperation Treaty ("PCT") Application disclosed certain concepts of its eICU remote monitoring system. (Henkind Depo., 225 13:227-:, 228:1-7, 228:19-24, 230:11-22; PCT App. WO 00/79466). Visicu also conducted public trade show demonstrations of its ICU solution at conferences without requiring potential buyers to sign a NDA. (Larsen Depo., 73:4-75:24, 76:23-77:21, 78:22-79:1; 80:23-81:3, 81:21-82:11). Furthermore, Visicu permitted CNN and a local broadcast station to publicly broadcast a news story about its eICU remote monitoring system, which disclosed elements listed in the Gap Analysis. (ICUSA video).

In 2004, Cerner installed its first ICU remote monitoring solution, named INET Virtual,³ at Borgess Medical Center ("Borgess"). (Valentine Deposition ("Depo"), 60:14-25). In its negotiations with Borgess, Cerner obligated itself to build a system providing "`like for like' functionality to the Visicu virtual monitoring solution" then in place at Borgess. (BOR007462-64; CERN011672-73; CERN069218). Cerner also agreed to indemnify Borgess for breaking its contract with Visicu. (Valentine Depo., 41:16-43:1; Anderson Depo., 23:3-7).

C. The '656 Patent

On November 18, 1999, Visicu's co-founders, Drs. Rosenfeld and Breslow, applied for the '656 patent for a "system and method for providing continuous, expert network critical care services from a remote location(s)." ('656 Patent, p. 1). Visicu alleges Cerner has infringed and is infringing claims 17 and 20 through 26 of this patent. (V5SRI,⁴ ¶ 1). Claim 17 of the '656 patent is an independent claim and claims 20 through 26 depend upon claim 17. ('656 Patent).

During the original prosecution of the '656 patent, the examiner rejected Visicu's claims as unpatentable over prior art. (5/13/04 Supp. Resp. To Office Action, p. 22). In response to those rejections, Visicu cancelled the pending claims and submitted new independent claim 46,⁵ which included the elements of original claim 25 and added the limitation "the remote command center comprising a database and a workstation." (Wade Rpt., p. 179; 5/13/04 Supp. Resp. To Office Action, p. 22). In submitting its new claims, Visicu distinguished the prior art on the ground that it involved analysis of data by a human operator or observer, not a computerized rules engine. (5/13/04 Supp. Resp. To Office Action, p. 10-23).

The '656 patent issued on October 12, 2004. Id. at p. 1. Subsequently, the PTO granted an ex parte request for reexamination on January 25, 2005. (Jan. 2005 Ex Parte Reexamination Request). Following this reexamination request, the PTO rejected claims 17 and 21 through 26 "as being anticipated by Schoenberg et al. (WO 98/29790)" and claim 20 "as being unpatentable over Schoenberg et al. (WO98/29790) in view of David et al. (U.S. 5,544,649)." (Nov. 2005 Office Action, ¶¶ 2, 4). On December 6, 2005, Visicu's patent attorney, Dr. Jon Roberts, and three PTO examiners met to discuss the '656...