Coordinated Pretrial Proceedings in Antibiotic Antitrust Actions, In re

• Decision Date: 16 June 1976
• Docket Number: No. 75-1695,75-1695
• Citation: 538 F.2d 180
• Parties: In re COORDINATED PRETRIAL PROCEEDINGS IN ANTIBIOTIC ANTITRUST ACTIONS. PFIZER, INC., Appellant, v. INTERNATIONAL RECTIFIER CORP. et al., Appellees.
• Court: U.S. Court of Appeals — Eighth Circuit

Page 180

538 F.2d 180

190 U.S.P.Q. 273

In re COORDINATED PRETRIAL PROCEEDINGS IN ANTIBIOTIC ANTITRUST ACTIONS PFIZER, INC., Appellant, v. INTERNATIONAL RECTIFIER CORP. et al., Appellees.

No. 75-1695.

United States Court of Appeals,

Eighth Circuit.

Submitted March 9, 1976.

Decided June 16, 1976.

Dean C. Dunlavey, Los Angeles, Cal., for appellant; Julian O. von Kalinowski and James R. Martin, Los Angeles, Cal., Joe A. Walters, Minneapolis, Minn.; Edgar H. Martin, Washington, D. C., on brief.

John A. Reilly, New York City, for appellees; Paul H. Heller, and George E. Badenoch, on brief.

Sidney S. Rosdeitcher, Jack C. Auspitz, and Dean B. Allison, New York City, for appellee, USV Pharmaceutical Corp.

Peter R. Cohen, Beverly Hills, Cal., Marc S. Gross, New York City, for appellee, International Rectifier Corp., et al.

Before GIBSON, Chief Judge, HEANEY and WEBSTER, Circuit Judges.

GIBSON, Chief Judge.

This patent infringement case was initially filed by Pfizer, Inc. seeking damages and declaratory and injunctive relief in the Central District of California. The defendants, International Rectifier Corp. (IRC) ¹ and USV Pharmaceutical Corp. (USV), answered, pleading that Pfizer's United States Patent No. 3,200,149 ² is invalid and unenforceable for failure to meet statutory requirements of patentability and for fraud and misconduct before the Patent Office. Both defendants at first admitted infringement but subsequently amended their answer to deny infringement and assert unfair competition and antitrust counterclaims. Upon defendants' motion, the case was transferred to the United States District Court for the District of Minnesota and assigned to District Judge Miles W. Lord for coordinated pretrial proceedings with IRC's antitrust case and other antibiotic antitrust litigation, by order of the Judicial Panel on Multidistrict Litigation dated March 12, 1973. The case is scheduled to be returned to the Central District of California for trial after completion of coordinated pretrial proceedings.

While the case was pending for pretrial processing, defendants filed successive motions for partial summary judgment maintaining that Pfizer's conduct in prosecuting the patent application before the Patent Office, from the time the application was filed in May, 1961, until the patent was issued in August, 1965, constituted fraud, inequitable conduct and unclean hands, and that Pfizer's conduct before the District Court from 1973 until 1975 was also fraudulent and inequitable, separately justifying refusal to enforce the patent.

On July 16, 1975, in an extensive memorandum opinion, the District Court granted partial summary judgment and declared Pfizer's doxycycline patent invalid and unenforceable. Pfizer, Inc. v. International Rectifier Corp., 186 U.S.P.Q. 511 (D.Minn.1975). The court set forth more than 150 "uncontroverted" facts from the record of documents ³ and testimony taken in eleven days of hearings on the summary judgment and related discovery motions conducted intermittently from September, 1974, through April, 1975.

On these 150 facts, deemed uncontroverted, Pfizer was found guilty of five acts of inequitable conduct before the Patent Office, each of which, standing alone, the court considered sufficient to bar enforcement of the patent. They are: (1) Pfizer's alleged failure to disclose both the existence of, and its inability to distinguish, a prior Belgian patent of a similar compound, in order to avoid Patent Office rejection for anticipation (lack of "novelty") under 35 U.S.C. § 102 (1964) ⁴ and "obviousness" under 35 U.S.C. § 103 (1964); ⁵ (2) Pfizer's argument of an allegedly false and misleading analogy between dozycycline and certain prior art epimers, ⁶ similarly to avoid rejection for anticipation and obviousness; (3) Pfizer's alleged concealment of test data concerning the antibacterial activity of doxycycline, with similar motivation; (4) Pfizer's alleged concealment of its scientists' beliefs that doxycycline may have been coproduced in prior art processes, similarly motivated; and (5) Pfizer's alleged concealment of repeated experimental failures of processes described and claimed in the doxycycline patent with the motive of obtaining claims broader than permissible under 35 U.S.C. § 112 (1964). ⁷

Additionally, Pfizer's entire course of conduct before the Patent Office was characterized as fraudulent or "at the very least a calculated recklessness about the truth" for the purpose of obtaining as broad a patent as possible. Finally, Pfizer was summarily found guilty of concealing critical facts from the court, amounting to inequitable conduct and fraud on the court, that independently justified refusal to enforce the doxycycline patent.

On this appeal, Pfizer challenges the District Court's rulings as violative of the cardinal principle that summary judgment is permitted only if there is "no genuine issue as to any material fact," Fed.R.Civ.P. 56(c), and also the court's interpretation of the principles of law governing the patent infringement defense of unclean hands resulting from fraud or inequitable conduct by the patentee before the Patent Office and the District Court. Pfizer contends that the court resolved bitterly disputed issues of material fact, drew inferences unfavorable to the nonmovant and determined credibility without affording Pfizer a trial by jury in the Central District of California as demanded in its pleadings. ⁸

We think the court erred in granting partial summary judgment, as genuine issues of material fact remain as to each of Pfizer's five alleged acts of misconduct before the Patent Office, and the record does not reveal sufficient misconduct by Pfizer before the District Court in the pretrial proceedings to warrant a finding of fraud on the court and the imposition of a sanction of such severity. We express no opinion as to Pfizer's conduct before the Patent Office nor on the merits of the legal and factual issues of patent validity. The scientific issues at stake are of such moment that all parties should be permitted to present their evidence fully in a plenary trial not restricted to a trial by affidavit. ⁹

I. PROPRIETY OF SUMMARY JUDGMENT.

The standards to be applied in ruling upon a motion for summary judgment pursuant to Fed.R.Civ.P. 56(c) have been clearly stated by the United States Supreme Court:

Summary judgment should be entered only when the pleadings, depositions, affidavits, and admissions filed in the case "show that * * * there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Rule 56(c), Fed.Rules Civ.Proc.

Poller v. Columbia Broadcasting System, Inc., 368 U.S. 464, 467, 82 S.Ct. 486, 488, 7 L.Ed.2d 458 (1962).

To obtain a summary judgment, the movant must demonstrate the absence of any genuine issue of material fact, and the evidence submitted to the court "must be viewed in the light most favorable to the opposing party." Adickes v. S. H. Kress & Co., 398 U.S. 144, 157, 90 S.Ct. 1598, 1608, 26 L.Ed.2d 142 (1970). Movant must show "his right to a judgment with such clarity as to leave no room for controversy and that the other party is not entitled to recover under any discernible circumstances." Ozark Milling Co. v. Allied Mills, Inc., 480 F.2d 1014, 1015 (8th Cir. 1973); accord, Cervantes v. Time, Inc., 464 F.2d 986, 993 (8th Cir. 1972), cert. denied, 409 U.S. 1125, 93 S.Ct. 939, 35 L.Ed.2d 257 (1973). In determining whether a genuine issue of material fact exists, the court must give the nonmoving party the benefit of all reasonable factual inferences. Adickes v. S. H. Kress & Co., supra, 398 U.S. at 158-59, 90 S.Ct. 1598; McSpadden v. Mullins, 456 F.2d 428 (8th Cir. 1972), and must do so without assessing credibility. United States v. United Marketing Association, 291 F.2d 851, 853-54 (8th Cir. 1961). Summary judgment is to be used not as a substitute for trial, but only when "it is quite clear what the truth is (and) that no genuine issue remains for trial." Sartor v. Arkansas Natural Gas Corp., 321 U.S. 620, 627, 64 S.Ct. 724, 728, 88 L.Ed. 967 (1944).

Summary judgment is notoriously inappropriate for determination of claims in which issues of intent, good faith and other subjective feelings play dominant roles. White Motor Co. v. United States, 372 U.S. 253, 259, 83 S.Ct. 696, 9 L.Ed.2d 738 (1963); Louis Schlesinger Co. v. Kresge Foundation,388 F.2d 208, 212 (3d Cir.), cert. denied, 391 U.S. 934, 88 S.Ct. 1847, 20 L.Ed.2d 854 (1968); Severson v. Fleck, 251 F.2d 920, 924 (8th Cir. 1958); 6 J. Moore, Federal Practice P 56.17 (41.-1) (2d ed. 1976). Here matters of intent, good faith and credibility have been resolved by the court in a summary proceeding. The defendants are unable to cite any Court of Appeals decision approving a summary judgment invalidating or refusing to enforce a patent on grounds of fraud or inequitable conduct before the Patent Office. ¹⁰ This court has long held the view that summary judgment is ordinarily inappropriate for disposition of patent cases in which issues of fact predominate and the requirements of Rule 56(c) are rarely met. Long v. Arkansas Foundry Co., 247 F.2d 366, 369 (8th Cir. 1957). The impropriety of summary judgment in the instant case is compounded for the reason that forfeiture of the patent is sought on the basis of the patentee's personal misconduct in procuring the patent as well as technical and scientific fact.

II. THE DEFENSE OF MISCONDUCT BEFORE THE PATENT OFFICE.

The principle that a defendant in a patent infringement action may interpose as a complete defense the patentee's failure to deal candidly with the Patent Office is a corollary of the equitable doctrine of unclean hands. Precision Instrument Manufacturing Co. v. Automotive Maintenance Machinery Co., 324 U.S. 806, 814, 65 S.Ct. 993, 89 L.Ed. 1381 (1945). The Supreme Court has set forth the duty of candor owed by a patent applicant as follows:

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