Johns Hopkins University v. Cellpro

• Decision Date: 24 July 1997
• Docket Number: Civil Action No. 94-105-RRM.
• Citation: 978 F.Supp. 184
• Parties: The JOHN HOPKINS UNIVERSITY, a Maryland corporation, Baxter Healthcare Corporation, a Delaware corporation, and Becton Dickinson and Company, a New Jersey corporation, Plaintiffs, v. CELLPRO, A Delaware corporation, Defendant.
• Court: U.S. District Court — District of Delaware

978 F.Supp. 184

The JOHN HOPKINS UNIVERSITY, a Maryland corporation, Baxter Healthcare Corporation, a Delaware corporation, and Becton Dickinson and Company, a New Jersey corporation, Plaintiffs, v. CELLPRO, A Delaware corporation, Defendant.

Civil Action No. 94-105-RRM.

United States District Court, D. Delaware.

July 24, 1997.

William J. Marsden, Jr., Potter Anderson & Corroon, Wilmington, DE, Steven J. Lee, Kenyon & Kenyon, New York City, Donald R. Ware, Peter B. Ellis, Foley, Hoag & Eliot, Boston, MA, for plaintiffs.

Michael Sennett, Bell, Boyd & Lloyd, Chicago, IL, for plaintiff Baxter Healthcare Corporation.

Patricia S. Rogowski, Gerald M. O'Rourke, Connolly, Bove, Lodge & Hutz, Wilmington, DE, Coe A. Bloomberg, Robert C. Weiss, Allan W. Jansen, Jerrold B. Reilly, Bruce G. Chapman, and Armand F. Ayazi, Lyon & Lyon, Los Angeles, CA, for defendant.

OPINION

McKELVIE, District Judge.

This is a patent case. On March 11, 1997, a jury returned a verdict finding that the defendant, CellPro, Inc., willfully infringed certain claims of plaintiffs' patents and awarded $2,320,493 in compensatory damages. Plaintiffs have moved pursuant to 35 U.S.C. § 284 for an order increasing the damages to three times the award. This is the court's decision on that motion.

I. FACTUAL AND PROCEDURAL BACKGROUND

The Johns Hopkins University owns U.S. Patent No. 4,965,204 (the " '204 patent"). Johns Hopkins has licensed the '204 patent to plaintiff Becton Dickinson and Company, which in turn sublicensed it to plaintiff Baxter Healthcare Corporation. The '204 patent claims all monoclonal antibodies that specifically bind to the antigen identified as "CD34."

A. The Pleadings and Findings of Infringement

On March 8, 1994, plaintiffs filed a complaint alleging that defendant CellPro, Inc. is willfully infringing claims 1, 2, 4, and 5 of the '204 patent. CellPro denied infringement and asserted certain affirmative defenses, including that the '204 patent is invalid and unenforceable. In addition, CellPro counterclaimed for plaintiffs' alleged violation of antitrust law and for a declaratory judgment that the '204 patent and three other patents owned by Johns Hopkins, U.S. Patent Nos. 4,714,680 (the" '680 patent"), 5,035,994 (the"'994 patent"), and 5,130,144 (the"'144 patent"), are invalid, unenforceable, and not infringed. The '680 patent is directed to a purified suspension of stem cells. The '994 patent is directed to a method of creating such a purified suspension of stem cells using CD34 antibodies. Finally, the '144 patent is directed to a method of using that purified suspension of stem cells in bone marrow transplants.

All four patents-in-suit are collectively known as the "Civin patents" after their inventor, Dr. Curt Civin. Civin is a physician and professor at The Johns Hopkins University School of Medicine and The Johns Hopkins University Hospital in Baltimore, Maryland.

In their reply to CellPro's counterclaim, plaintiffs denied the invalidity and unenforceability of the Civin patents. In addition, they alleged that CellPro is infringing, contributorily infringing, and inducing infringement of the '680, '994, and '144 patents. Pursuant to a stipulation entered into by the parties, the court issued an order deferring the anti-trust phase of the case until after the patent issues were tried.

The case was first tried to a jury beginning on July 24, 1995. On August 4, 1995, the jury returned a verdict finding that the claims of all of the Civin patents were invalid as obvious in light of the prior art. The jury also found that, except with respect to unasserted claims 3 and 6 of the '204 patent, each claim of the Civin patents was invalid as not enabled. The jury further found that CellPro did not literally infringe the claims of the '204 patent and that CellPro did not literally infringe, contributorily infringe, or induce infringement of the asserted claims of the '680, '994, and '144 patents. By an opinion and order dated June 28, 1996, the court granted plaintiffs' motion for judgment as a matter of law on the following issues: 1) infringement and induced infringement of the '680 patent; 2) induced infringement of the '144 patent; and 3) enablement of the '680 patent. The court granted plaintiffs' motion for a new trial on the following issues: 1) whether the '204 and '994 patents are infringed; 2) whether the '204, '680, '994, and '144 patents are obvious; and 3) whether the '204, '994, and '144 patents are enabled. A copy of the opinion is published at The Johns Hopkins Univ. v. CellPro Inc., 931 F.Supp. 303 (D.Del.1996). Subsequently, plaintiffs withdrew their claims for relief relating to the '994 and '144 patents, and the court entered orders granting judgment for plaintiffs on their claim for literal infringement of the '204 patent, on CellPro's affirmative defense of reverse doctrine of equivalents, and on CellPro's affirmative defenses and counterclaims of obviousness and nonenablement with respect to the claims of the '204 and '680 patents.

B. Trial on Claims of Willful Infringement

The issues of damages and willful infringement were tried to a jury beginning on Tuesday, March 4, 1997. At trial, plaintiffs offered evidence to establish the following in support of their claim that CellPro willfully infringed the Civin patents.

A group of investors formed CellPro in 1989 for the purpose of using technology developed by Drs. Ron Berenson and Bill Bensinger at the Fred Hutchinson Cancer Research Center in Seattle, Washington to make products to produce highly-purified stem cell suspensions using a CD34 antibody. Joseph S. Lacob, a venture capitalist with a background in biochemistry and public health, was CellPro's first president. Thomas P. Kiley, a venture capitalist with a background in intellectual property, served as a member of the board and the company's legal advisor.

In March 1989, Lacob, Kiley, and others raised $2.2 million as an initial investment in the company. The directors hired a new president, Christopher H. Porter. Dr. Porter has a Ph.D. in chemical engineering and had worked for Pfizer before joining CellPro.

At the time they formed CellPro, the investors and the officers and directors of the company were aware of Civin's '680 patent on stem cell suspensions. And they were monitoring the Official Gazette of the Patent Office for the issuance of other patents to Civin, including a patent on an antibody to the CD34 antigen, as they were aware Civin had included claims to the antibody in the parent application that gave rise to the '680 patent.

At the trial, Kiley testified he has some familiarity with the technology at issue and the patent laws. He has an undergraduate degree in chemical engineering and was a patent examiner for two years before he graduated from law school. In private practice as an associate and later as a partner at the law firm of Lyon & Lyon, he handled patent applications and patent litigation. He represented biotechnology companies, including companies that focused on monoclonal antibodies. Kiley also testified he has substantial experience in reviewing and evaluating formal opinions from counsel on the issues of patent validity.

Kiley testified that in connection with his work as legal counsel to CellPro's Board of Directors, he obtained and reviewed a copy of the Patent and Trademark Office's file on the prosecution history of the '680 patent and had concluded the patent was invalid.

At Kiley's suggestion, in late March or early April 1989, CellPro hired Lyon & Lyon and its partner Coe Bloomberg to provide an opinion with regard to the '680 patent. (Kiley testified: "Well, I thought that it would be appropriate that we have counsel opine on its potential for doing [us] harm.") Bloomberg visited CellPro in May 1989. At a Board of Directors meeting on May 5, Bloomberg reported he had reviewed the file wrapper of the '680 patent and had concluded the patent was invalid for obviousness based on the prior publication of two abstracts describing Civin's work.

Kiley testified that at that meeting he advised the Board he shared Bloomberg's view the patent was invalid.

... Mr. Bloomberg opined that the claims of the Civin patent were invalid for obviousness, based on the prior publication of Dr. Civin, which had been published more than a year before the patent application had been filed. And we discussed that. I remember that we discussed that the Federal Circuit Court of Appeals had held in a case in which he had been involved, Hybritech v. Monoclonal Antibodies, that as of, I think it was 1980, that persons skilled in the art were familiar with the details of the Kohler and Milstein process by which monoclonal antibodies were made. And, in addition, we discussed a passage in the description portion of Dr. Civin's patent application in which he was obliged to tell readers of the patent how to make the monoclonal antibodies, so that the cell suspensions of the patent could be made using those. What he said was that the process by which stem cell antibodies are made was well-known to those skilled in the art.

Kiley testified that the Board did not ask Lyon & Lyon to include an infringement analysis in its opinion.

Well, at that early stage of the company, the product itself was not yet in being. Whether the company would emphasize the stem cell product or another was a little bit of a moving target. We simply didn't know what the ultimate cell suspension would look like.

Unfortunately, neither Kiley nor Bloomberg had available at the trial any notes either might have taken with regard to the opinion that was given during that meeting.

Bloomberg apparently repeated his oral opinion of invalidity to the Board in September 1989.

In February 1990, Bloomberg wrote to Porter and Lacob to confirm his prior oral opinion. In his letter, Bloomberg reported that his firm had concluded the Civin '680 patent was invalid and unenforceable. He reported the claims of...