Niazi Licensing Corp. v. St. Jude Med. S.C., Inc.
| Decision Date | 23 March 2021 |
| Docket Number | Case No. 17-cv-5096 (WMW/BRT) |
| Parties | Niazi Licensing Corporation, Plaintiff, v. St. Jude Medical S.C., Inc., Defendant. |
| Court | U.S. District Court — District of Minnesota |
This patent-infringement matter is before the Court on the parties' cross-motions for summary judgment. (Dkts. 180, 184.) For the reasons addressed below, Defendant's motion for summary judgment is granted and Plaintiff's motion for summary judgment is denied.
Plaintiff Niazi Licensing Corporation (NLC) owns United States Patent No. 6,638,268 (the '268 Patent), which pertains to a catheter system that can be inserted into the coronary sinus of the heart. This catheter system allows medical professionals to administer fluids and introduce pacing leads to the coronary sinus. Although the use of catheters was known in 2003 when the '268 Patent issued, the '268 Patent describes an invention that, based on its structure and shape, purportedly is better suited for "use in the coronary sinus, especially in patients suffering from congestive heart failure." The '268 Patent claims a double catheter system with an "outer, resilient catheter having shape memory and a hook-shaped distal end" and an "inner, pliable catheter slidably disposed in the outer catheter." The patent also claims methods of using the catheter system.
NLC commenced this patent-infringement action against Defendant St. Jude Medical S.C., Inc. (St. Jude), on November 13, 2017. NLC alleges that St. Jude has indirectly infringed the '268 Patent by inducing its customers—namely, medical professionals—to infringe the '268 Patent. Only a single method claim remains in dispute in this lawsuit: Claim 11 of the '268 Patent, which claims a series of steps for "using a double catheter." In its entirety, Claim 11 provides as follows:
In its October 21, 2019 claim construction order, the Court construed "the catheter" to mean "the double catheter" and held that "Claim 11 is infringed only when the steps are performed in the order listed."
The parties now cross-move for summary judgment. NLC argues that it is entitled to summary judgment in its favor on the issues of infringement, St. Jude's invalidity defenses, and St. Jude's challenge to NLC's entitlement to damages that accrued before the inventor assigned the '268 Patent to NLC. According to NLC, this matter should proceed to trial only on the issues of willful infringement and damages. St. Jude argues that it is entitled to summary judgment in its favor as to infringement and, in the alternative, contends that NLC cannot obtain pre-assignment damages as a matter of law.
Summary judgment is proper when the record before the district court establishes that there is "no genuine dispute as to any material fact" and the moving party is "entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). A genuine dispute as to a material fact exists when "the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). When deciding a motion for summary judgment, a district court construes the evidence in the light most favorable to the nonmoving party and draws all reasonable inferences in the nonmoving party's favor. See Windstream Corp. v. Da Gragnano, 757 F.3d 798, 802-03 (8th Cir. 2014). When asserting that a fact is genuinely disputed, the nonmoving party must "submit affidavits, depositions, answers to interrogatories, or admissions on file and designate specific facts" in support of that assertion. Gander Mountain Co. v. Cabela's, Inc., 540 F.3d 827, 831-32 (8th Cir. 2008); see also Fed. R. Civ. P. 56(c)(1)(A). A nonmoving party may not "rest on mere allegations or denials but must demonstrate onthe record the existence of specific facts which create a genuine issue for trial." Krenik v. County of Le Sueur, 47 F.3d 953, 957 (8th Cir. 1995) (internal quotation marks omitted).
NLC and St. Jude cross-move for summary judgment as to St. Jude's alleged infringement of Claim 11 of the '268 Patent. A finding of infringement of a method claim requires that "each and every step of the method or process was performed." Aristocrat Techs. Austl. Pty Ltd. v. Int'l Game Tech., 709 F.3d 1348, 1362 (Fed. Cir. 2013). By contrast, summary judgment of non-infringement is appropriate if, after resolving all reasonable factual inferences in favor of the patentee, "no reasonable jury could find infringement." Absolute Software, Inc. v. Stealth Signal, Inc., 659 F.3d 1121, 1130 (Fed. Cir. 2011).
It is undisputed that St. Jude does not itself perform the patented medical procedure. Instead, NLC alleges that St. Jude has indirectly infringed Claim 11 of the '268 Patent by inducing its customers—namely, medical professionals—to practice the patented method via St. Jude's product instructions and marketing materials. "Whoever actively induces infringement of a patent shall be liable as an infringer." 35 U.S.C. § 271(b). "In order to succeed on a claim of inducement, the patentee must show, first that there has been direct infringement, and second that the alleged infringer knowingly induced infringement and possessed specific intent to encourage another's infringement." Minn. Mining & Mfg. Co. v. Chemque, Inc., 303 F.3d 1294, 1304-05 (Fed. Cir. 2002)(citation omitted). The Court addresses, in turn, the issues of direct infringement and St. Jude's knowledge and intent.
Liability for the inducement of patent infringement "may arise if, but only if, there is . . . direct infringement." Limelight Networks, Inc. v. Akamai Techs., Inc., 572 U.S. 915, 921 (2014) (internal quotation marks and alterations omitted). "A method patent claims a number of steps," and a method patent "is not infringed unless all the steps are carried out." Id. "Direct infringement of a method claim can be based on even one instance of the claimed method being performed." Mirror Worlds, LLC v. Apple Inc., 692 F.3d 1351, 1359 (Fed. Cir. 2012). But a defendant "cannot be liable for inducing infringement" if the "performance of all the claimed steps cannot be attributed to a single person." Limelight Networks, 572 U.S. at 923.
This Court previously held that Claim 11 of the '268 Patent is infringed only if the steps of the patented method are performed in the order listed. As such, to be entitled to summary judgment of infringement, NLC must prove that St. Jude induced a single person to actually perform every step of Claim 11 in the exact order that those steps are listed in the '268 Patent. See Mformation Techs., Inc. v. Research in Motion Ltd., 764 F.3d 1392, 1398-99 (Fed. Cir. 2014). Conversely, if NLC fails to prove that any one step of the method was not so performed, St. Jude is entitled to summary judgment of non-infringement. See Aristocrat Techs., 709 F.3d at 1362; cf. Medgraph, Inc. v. Medtronic, Inc., 843 F.3d 942, 949 (Fed. Cir. 2016).
NLC first contends that St. Jude's experts have admitted that direct infringement has occurred. In support of this argument, NLC relies on the following statement from the rebuttal report of St. Jude's damages expert, Dr. Mohan Rao: "In fact, based on my discussion with [St. Jude's technical expert] Dr. [David] Benditt, I understand that in practice, physicians utilize the method as listed in Claim 11 of the '268 patent less than 1 percent of the time." But for at least two reasons, this evidence is insufficient to satisfy NLC's burden to prove infringement. First, the statement in Dr. Rao's expert report is hearsay within hearsay and, therefore, inadmissible in evidence. See Rainforest Cafe, Inc. v. Amazon, Inc., 86 F. Supp. 2d 886, 902-03 (D. Minn. 1999) (); Multi-Tech Sys., Inc. v. Hayes Microcomputer Prods., Inc., 800 F. Supp. 825, 844 (D. Minn. 1992) ().1
Second, even if Dr. Rao's statement were not inadmissible hearsay, it is inadmissible for another reason: namely, because it clearly reflects a hypothetical assumption, which is unfounded speculation. The purpose of Dr. Rao's rebuttal expertreport is to opine as to the extent of NLC's recoverable damages assuming that NLC were to prove infringement, which is not an uncommon practice. See, e.g., Sys. Dev. Integration v. Comput. Scis. Corp., 886 F. Supp. 2d 873, 882 (N.D. Ill. 2012) ( ). Neither Dr. Rao nor Dr. Benditt purport to have either personal knowledge or data from which they have concluded that direct infringement of Claim 11 of the '268 Patent has occurred. Instead, the statement in Dr. Rao's report reflects Dr. Benditt hypothesizing as to the possibility of infringement occurring, which cannot demonstrate infringement.2 See ACCO Brands, Inc. v. ABA Locks Mfr. Co., 501 F.3d 1307, 1313-14 (Fed. Cir. 2007) (...
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