Perseptive Biosystems Inc v. Pharmacia Biotech

• Decision Date: 29 August 2000
• Citation: 225 F.3d 1315,56 USPQ2d 1001
• Parties: (Fed. Cir. 2000) PERSEPTIVE BIOSYSTEMS, INC., Plaintiff-Appellant, v. PHARMACIA BIOTECH, INC., PHARMACIA BIOTECH AS, SEPRACOR INC., PHARMACIA LBK BIOTECHNOLOGY AB, BIOSEPRA, INC., and PHARMACIA BIOTECH (also known as Pharmacia Biopress Technology, also known as Procordia AB), Defendants-Appellees. 98-1325 DECIDED:
• Court: U.S. Court of Appeals — Federal Circuit

Page 1315

225 F.3d 1315 (Fed. Cir. 2000)

PERSEPTIVE BIOSYSTEMS, INC., Plaintiff-Appellant, v. PHARMACIA BIOTECH, INC., PHARMACIA BIOTECH AS, SEPRACOR INC., PHARMACIA LBK BIOTECHNOLOGY AB, BIOSEPRA, INC., and PHARMACIA BIOTECH (also known as Pharmacia Biopress Technology, also known as Procordia AB), Defendants-Appellees.

98-1325

United States Court of Appeals for the Federal Circuit

DECIDED: August 29, 2000

Appealed from: United States District Court for the District of Massachusetts Judge Patti B. Saris

[Copyrighted Material Omitted]

Donald R. Dunner, Finnegan, Henderson, Farabow, Garrett & Dunner, L.L.P., of Washington, DC, argued for plaintiff-appellant. With him on the brief was Thomas H. Jenkins. Of counsel was Scott H. Blackman. Of counsel on the brief were David S. Godkin, David C. Berry, and Richard S. Sanders, Testa, Hurwitz & Thibeault, LLP, of Boston, Massachusetts. Also of counsel on the brief was Lee Carl Bromberg, Bromberg & Sunstein, LLP, of Boston, Massachusetts.

Robert H. Stier, Jr., Pierce Atwood, of Portland, Maine, argued for defendants-appellees. Of counsel on the brief was Kenneth R. Adamo, Jones, Day, Reavis & Pogue, of Cleveland, Ohio.

Before NEWMAN, PLAGER, AND CLEVENGER, Circuit Judges.

Opinion for the court filed by Circuit Judge CLEVENGER. Dissenting Opinion filed byCircuit Judge NEWMAN.

CLEVENGER, Circuit Judge.

PerSeptive Biosystems, Inc. ("PerSeptive") appeals the judgment of the United States District Court for the District of Massachusetts, holding PerSeptive's United States Patents Nos. 5,019,270 ("the '270 patent"), 5,228,989 ("the '989 patent") and 5,384,042 ("the '042 patent") (collectively, "the patents") unenforceable due to inequitable conduct before the United States Patent and Trademark Office ("PTO"). Because the district court correctly found that the named inventors of the patents made material misrepresentations regarding inventorship with intent to deceive the PTO during the prosecution of the patents, we affirm the holding of inequitable conduct.

I

In 1993, PerSeptive sued Pharmacia Biotech, Inc., Pharmacia Biotech AS, Sepracor Inc., Pharmacia LBK Biotechnology AB, and Biosepra, Inc. (collectively, "Pharmacia") for patent infringement of the '270 and '989 patents. In 1995, PerSeptive added a claim for infringement of the '042 patent. All three patents, which derived from a single patent application, are concerned with high-speed chromatography, or separation of biological materials, of a type described by the patents as "perfusive" chromatography. The '270 patent claims a method for practicing perfusive chromatography, the '989 patent claims a particle used for perfusive chromatography, and the '042 patent claims a matrix of particles used for perfusive chromatography. All three patents list the same inventors, Dr. Noubar Afeyan, Professor Fred Regnier, and Dr. Robert Dean.

In response to the PerSeptive allegations, Pharmacia raised, among others, the defenses that the patents were invalid for failure to name the correct inventors, and that they were unenforceable due to inequitable conduct practiced by the named inventors during prosecution. In January 1996, the district court ruled on cross-motions for summary judgment on the question of whether the patents were invalid for failure to list the correct inventive entity. See PerSeptive Biosystems, Inc. v. Pharmacia Biotech, Inc., No. 93-12237, slip op. at 32-33 (D. Mass. Jan. 9, 1996) ("PerSeptive I"). In that decision, the district court concluded that there was "undisputed, clear and convincing evidence" that the inventorship was incorrect, but declined to hold the patents invalid. The district court reasoned that Pharmacia had not shown an absence of genuinely disputed facts regarding whether the named inventors had omitted the unnamed inventors with deceptive intent, thereby precluding the correction of inventorship under the then-current understanding of 35 U.S.C. § 256 (1994). See PerSeptive I, slip op. at 31 ("[T]here remains a disputed issue of fact as to the named inventors' state of mind, preventing the court from ordering the correction of the patent without hearing."). Accordingly, the court invited PerSeptive to move, under section 256, to correct the inventorship of the patents. See id.

In March 1997, after a ten-day hearing, the district court denied PerSeptive's motion to correct inventorship, basing its conclusion on a pattern of false statements and misrepresentations by the named inventors to the PTO regarding the inventorship and timing of the invention. See PerSeptive Biosystems, Inc. v. Pharmacia Biotech, Inc., No. 93-12237, slip op. at 126 (D. Mass. Mar. 31, 1997) ("PerSeptive II").

Soon after that ruling, the Federal Circuit decided Stark v. Advanced Magnetics, Inc., 119 F.3d 1551, 43 USPQ2d 1321 (Fed. Cir. 1997). In Stark, this court held that section 256 authorizes correction of inventorship when there is no deceptive intent on the part of the omitted inventors and does not require inquiry into the intent of the originally-named inventors. Because this holding was contrary to the understanding of the district court and the parties at the time of the PerSeptive II decision, the district court, in January 1998, reconsidered PerSeptive II. See PerSeptive Biosystems, Inc. v. Pharmacia Biotech, Inc., 12 F.Suupp.2d 69, 70 (D. Mass. Jan. 28, 1998) ("PerSeptive III").

In PerSeptive III, the district court vacated its denial of PerSeptive's section 256 motion, concluding that no evidence had been introduced relating to the intent of the unnamed inventors. See id., at 71. The court did, however, "reexamine the legal effect of its factual findings in PerSeptive II that [Pharmacia had] proven by clear and convincing evidence that the named inventors made a series of misrepresentations to the [PTO]." Id., at 71. Adopting all the factual findings of PerSeptive II, the district court concluded that the named inventors had committed inequitable conduct when prosecuting the application that yielded the three patents. See id., at 73. Accordingly, the court held that the patents were unenforceable, and entered final judgment under Fed. R. Civ. P. 54(b). See PerSeptive Biosystems, Inc. v. Pharmacia Biotech, Inc., No. 93-12237, slip op. at 2 (D. Mass. Mar. 13, 1998) (Order).

This appeal followed, vesting us with jurisdiction pursuant to 28 U.S.C. § 1295(a)(1) (1994).

II

Inequitable conduct includes affirmative misrepresentations of a material fact, failure to disclose material information, or submission of false material information, coupled with an intent to deceive. See Molins PLC v. Textron, Inc., 48 F.3d 1172, 1178-79, 33 USPQ2d 1823, 1826-27 (Fed. Cir. 1995). The defense of inequitable conduct is entirely equitable in nature, and thus not an issue for a jury to decide. SeeParagon Podiatry Lab. Inc. v. KLM Labs., Inc., 984 F.2d 1182, 1190, 25 USPQ2d 1561, 1568 (Fed. Cir. 1993); Gardco Mfg., Inc. v. Herst Lighting Co., 820 F.2d 1209, 1211-13, 2 USPQ2d 2015, 2017-19 (Fed. Cir. 1987).

Determination of inequitable conduct requires a two-step analysis. First, the trial court must determine whether the conduct meets a threshold level of materiality. The trial court must then also determine whether the evidence shows a threshold level of intent to mislead the PTO. See Baxter Int'l, Inc. v. McGaw, Inc., 149 F.3d 1321, 1327, 47 USPQ2d 1225, 1228-29 (Fed. Cir. 1998); Halliburton Co. v. Schlumberger Tech. Corp., 925 F.2d 1435, 1439, 17 USPQ2d 1834, 1838 (Fed. Cir. 1991). These threshold determinations are reviewed by this court under the clearly erroneous standard of Federal Rule of Civil Procedure 52(a). See Kingsdown Med. Consultants, Ltd. v. Hollister, Inc., 863 F.2d 867, 872, 9 USPQ2d 1384, 1389 (Fed. Cir. 1988). Once the threshold levels of materiality and intent have been established, the trial court is required to weigh materiality and intent. See Molins, 48 F.3d at 1178, 33 USPQ2d at 1826-27. The more material the conduct, the less evidence of intent will be required in order to find that inequitable conduct has occurred. See N.V. Akzo v. E.I. Dupont de Nemours, 810 F.2d 1148, 1153, 1 USPQ2d 1704, 1708 (Fed. Cir. 1987). In light of all the circumstances, the court must then determine whether the applicant's conduct is so culpable that the patent should be held unenforceable. See LaBounty Mfg., Inc. v. United States Int'l Trade Comm'n, 958 F.2d 1066, 1070, 22 USPQ2d 1025, 1028 (Fed. Cir. 1992). We review the district court's ultimate determination of inequitable conduct under an abuse of discretion standard. See Kolmes v. World Fibers Corp., 107 F.3d 1534, 1541, 41 USPQ2d 1829, 1834 (Fed. Cir. 1997); Halliburton, 925 F.2d at 1440, 17 USPQ2d at 1838; Kingsdown, 863 F.2d at 876, 9 USPQ2d at 1389.

A

The patent application which led to the '270, '989, and '042 patents was filed in July 1989, and listed only Afeyan, Regnier and Dean as inventors. See PerSeptive II, slip op. at 69. In PerSeptive I, the district court, after extensive factfinding and analysis, determined that "undisputed, clear and convincing evidence" supported the conclusion that the named inventors were not the sole inventors of the subject matter of the three patents. PerSeptive I, slip op. at 25. The district court decided that Frank Warner and Linda Lloyd of Polymer Laboratories, Ltd. ("Polymer Labs"), a British company specializing in the area of chromatography and polymer analysis, also should have been named as inventors. See id. at 29. The district court also considered whether Mary Ann Rounds, Regnier's research assistant at his Purdue University laboratory, should have been named as an inventor, but concluded that this question was "a hotly disputed issue of fact." Id. at 21.

There is no dispute now between the parties that Warner, Lloyd, and Rounds-- none of whom are named as inventors--worked in close collaboration with the named inventors in the development of the perfusive chromatography techniques and...