Niazi Licensing Corp. v. St. Jude Med. S.C., Inc.

• Decision Date: 11 April 2022
• Docket Number: 2021-1864
• Citation: 30 F.4th 1339
• Parties: NIAZI LICENSING CORPORATION, Plaintiff-Appellant v. ST. JUDE MEDICAL S.C., INC., Defendant-Appellee
• Court: U.S. Court of Appeals — Federal Circuit

30 F.4th 1339

NIAZI LICENSING CORPORATION, Plaintiff-Appellant

v.ST. JUDE MEDICAL S.C., INC., Defendant-Appellee

2021-1864

United States Court of Appeals, Federal Circuit.

Decided: April 11, 2022

Michael T. Griggs, Boyle Fredrickson, S.C., Milwaukee, WI, argued for plaintiff-appellant. Also represented by Adam Brookman, Marriam Lin, Timothy Newholm.

Kalpesh Shah, Benesch Friedlander Coplan & Aronoff, Chicago, IL, argued for defendant-appellee. Also represented by Samuel Ruggio.

Before Taranto, Bryson, and Stoll, Circuit Judges.

Stoll, Circuit Judge.

This appeal asks us to resolve numerous issues: validity and infringement of various claims of U.S. Patent No. 6,638,268 ; several evidentiary rulings; and the appropriateness of the U.S. District Court for the District of Minnesota's entry of sanctions against Appellant Niazi Licensing Corporation. First, Niazi appeals the district court's determination that all but one of the asserted claims of the ’268 patent are invalid as indefinite. We conclude that, when read in light of the intrinsic evidence, a person of ordinary skill in the art would understand the scope of the claims with reasonable certainty. Accordingly, we reverse that determination and remand for the district court to resolve whether Appellee St. Jude Medical S.C., Inc. (St. Jude) has infringed those claims and whether its remaining invalidity defenses are applicable. Second, Niazi appeals the district court's summary judgment of no induced infringement of the only asserted claim it did not hold indefinite. We agree with the district court that Niazi failed to prove direct infringement—a necessary element of Niazi's inducement claim—and therefore affirm that judgment. Third, Niazi appeals the district court's sanction excluding portions of Niazi's technical expert and damages expert reports because Niazi failed to disclose the predicate facts during fact discovery and granting monetary sanctions. Because Niazi points to no abuse of discretion, we affirm the district court's entry of sanctions. Finally, Niazi appeals the district court's exclusion of portions of its damages expert report as unreliable. Because we agree that the damages opinion was conclusory and legally insufficient, we affirm that exclusion as well.

BACKGROUND

I

Congestive heart failure

is a common medical condition leading to hospital admission in the United States. Heart failure is frequently a result of the left and right sides of the heart contracting out of sync. There are different methods available for treating heart failure, such as medication or a heart transplant. Another method is resynchronization therapy, which uses electrical leads (called pacing leads) to help keep the two sides of the heart contracting with regularity and in sync.

According to the ’268 patent, at the time of the invention, physicians accomplished resynchronization therapy by inserting a catheter into the coronary sinus¹ and its branch veins (i.e., cannulating) to place pacing leads on the hearts of patients with heart failure

. ’268 patent col. 1 ll. 29–35. Because the target coronary branch veins arise at acute angles to the coronary sinus and because heart failure can cause changes in the heart's anatomy (including, for instance, the location, shape, and size of the coronary sinus and the branch veins), the specification explains that it can be "difficult to pass a lead" into the coronary sinus and its branch veins using a catheter. Id. at col. 1 l. 61–col. 2 l. 11. Recognizing this, the inventor of the ’268 patent developed a double catheter—i.e., a catheter comprising an outer and inner catheter—for cannulating the coronary sinus "without significant manipulation," id. Abstract, which he claimed in the ’268 patent.

Claim 1 (an apparatus claim) and claim 11 (a method claim) are representative of the claims on appeal and recite:

1. A double catheter, comprising:

an outer, resilient catheter having shape memory and a hook shaped distal end configured for cannulation of the coronary sinus with at least one curved bend;

an inner, pliable catheter slidably disposed in the outer catheter and of greater length than the outer catheter so that a distal end portion of the inner catheter can be extended or retracted from a distal end opening of the outer catheter to vary the overall length of the double catheter, the inner catheter having an internal lumen configured for the introduction of contrast media and a pacing lead into the coronary sinus; and

a mechanism operable from the proximal end of the outer catheter for changing the curvature of the distal end of the outer catheter.

...

11. A method for placing an electrical lead in a lateral branch of a coronary sinus vein using a double catheter including an outer catheter and an inner catheter slidably disposed inside the outer catheter, comprising:

[1] inserting the catheter into the coronary sinus; [2] advancing a guide wire through the catheter into a coronary sinus lateral branch vein;

[3] advancing the inner catheter out of a front end opening of the outer catheter along the guide wire into the branch vein;

[4] inserting the lead through the outer and inner catheters to a target location in the branch vein; and

[5] withdrawing the catheter leaving the lead in the branch vein.

Id. at col. 6 l. 62–col. 7 l. 9, col. 7 l. 63–col. 8 l. 9 (emphases added to disputed limitations).

II

Niazi sued St. Jude for patent infringement. Niazi accused combinations of St. Jude's products, including the CPS Aim^TM SL Slittable Inner Catheter (Subselector/Cannulator), of directly infringing the ’268 patent claims, and it further accused St. Jude of inducing infringement of the ’268 patent claims.

The district court construed numerous terms in claims 1, 10–11, 13–15, 18–19, and 23–27 (the "asserted claims") that are relevant to this appeal. First, the district court determined that the terms "resilient" and "pliable" in independent claims 1, 13, 18, and 24 of the ’268 patent rendered those claims and their dependents (claims 10, 14–15, 19, 23, and 25–27) indefinite. See Niazi Licensing Corp. v. Bos. Sci. Corp. , Case Nos. 17-cv-5094 WMW/BRT, 2019 WL 5304922, at *5–7 (D. Minn. Oct. 21, 2019) ( Claim Construction Op. ). The parties dispute this determination on appeal.

The court then considered independent claim 11, the only asserted claim that does not recite the terms "resilient" or "pliable." The parties first disputed whether the term "the catheter" in claim 11 rendered that claim indefinite based on a lack of antecedent basis in the claim. The court determined that the claim was not indefinite, construing "the catheter" to mean "the double catheter." Id. at *8. This construction, while relevant, is not disputed on appeal.

The parties’ second dispute as to claim 11 concerned whether the steps recited in claim 11 must be performed in the order recited in the claim, or whether mere performance of all steps (in any order) was sufficient to meet the claim. The district court determined that "logic requires the steps of [c]laim 11 to be performed in the order listed" and accordingly concluded that claim 11 "is infringed only when the steps are performed in the order listed." Id. This second construction is not meaningfully disputed on appeal.

Following fact discovery, the parties exchanged expert reports concerning infringement and validity of claim 11, as well as the amount of damages for any alleged infringement of that claim. St. Jude moved to strike portions of Niazi's technical expert (Dr. Martin Burke) report and its damages expert (Brad Carlson) report for improperly relying on facts that were not disclosed during fact discovery. Regarding Dr. Burke's report, St. Jude argued that Niazi did not disclose facts relating to alleged direct infringement—specifically, that Dr. Burke himself had directly infringed claim 11 using St. Jude's CPS catheter—which was relevant to Niazi's theory of induced infringement for this claim. As to Mr. Carlson's report, St. Jude argued that his reliance on several third-party license agreements to support his damages calculation was improper because those agreements had not been produced during fact discovery.

The magistrate judge agreed with St. Jude and, as a sanction under Federal Rule of Civil Procedure 37, excluded portions of both reports and further precluded Dr. Burke from testifying as a fact witness. See J.A. 140–54. Niazi objected to this decision, but the district court judge agreed with the magistrate judge's decision that this undisclosed evidence should be excluded and that Dr. Burke should be precluded from testifying as a fact witness. Niazi Licensing Corp. v. St. Jude Med. S.C., Inc. , Case No. 17-cv-5096 (WMW/BRT), 2020 WL 1617879, at *1–3 (D. Minn. Apr. 2, 2020) ( Sanctions Op. I ).

Not long thereafter, the district court considered the parties’ cross-motions to exclude certain expert testimony as unreliable under Federal Rule of Evidence 702 and Daubert v. Merrell Dow Pharmaceuticals, Inc. , 509 U.S. 579, 113 S.Ct. 2786, 125 L.Ed.2d 469 (1993). Relevant to this appeal, St. Jude moved to exclude Mr. Carlson's damages opinion, arguing that he failed to properly apportion damages to the value attributable to claim 11's method. The district court agreed, reasoning that Mr. Carlson's opinion failed to "apportion" between infringing and noninfringing uses and improperly included leads in the royalty base. Niazi Licensing Corp. v. St. Jude Med. S.C., Inc. , Case No. 17-cv-5096 (WMW/BRT), 2020 WL 5512507, at *9–11 (Sept. 14, 2020) ( Daubert Op. ). The district court accordingly held Mr. Carlson's opinion inadmissible. Id.

The parties thereafter cross-moved for summary judgment on numerous issues, but only one of those—the issue of induced infringement of claim 11—is relevant here. Niazi submitted a declaration from Dr. Burke in support of its summary judgment motion. In St. Jude's view, Dr. Burke's declaration recounted various factual assertions that the magistrate judge previously ordered excluded....