Perseptive Biosystems v. Pharmacia Biotech, CIV. A. 93-12237-PBS.

• Decision Date: 28 January 1998
• Docket Number: No. CIV. A. 93-12237-PBS.,CIV. A. 93-12237-PBS.
• Parties: PERSEPTIVE BIOSYSTEMS, INC., Plaintiff, v. PHARMACIA BIOTECH, INC., et al., Defendants.
• Court: U.S. District Court — District of Massachusetts

12 F.Supp.2d 69

PERSEPTIVE BIOSYSTEMS, INC., Plaintiff, v. PHARMACIA BIOTECH, INC., et al., Defendants.

No. CIV. A. 93-12237-PBS.

United States District Court, D. Massachusetts.

January 28, 1998.

Robert H. Stier, Jr., Todd S. Holbrook, Bernstein, Shur, Sawyer & Nelson, Portland, ME, Paul S. Veidenheimer, Hutchins, Wheeler & Dittmar, Boston, MA, Richard L. Edwards, Campbell, Campbell & Edwards, Boston, MA, for PerSeptive Biosystem.

William H. Paine, William F. Lee, Lisa Pirozzolo, Hale & Dorr, Boston, MA, John M.R. Patterson, Pennie & Edmonds, New York, NY, Paul S. Veidenheimer, Hutchins, Wheeler & Dittmar, Boston, MA, Richard L. Edwards, Campbell, Campbell & Edwards, Boston, MA, Stanton T. Lawrence, Pennie & Edmonds, Washington, DC, for Sepracor Inc.

Robert H. Stier, Jr., Bernstein, Shur, Sawyer & Nelson, Portland, ME, for Pharmacia LBK Biotechnology AB.

William H. Paine, William F. Lee, Lisa Pirozzolo, Hale & Dorr, Boston, MA, for BioSepra, Inc., Sepracor Inc.

Robert H. Stier, Jr., Todd S. Holbrook, Bernstein, Shur, Sawyer & Nelson, Portland, ME, for Pharmacia Biotech.

MEMORANDUM AND ORDER

SARIS, District Judge.

INTRODUCTION

Plaintiffs PerSeptive Biosystems, Inc. and Purdue Research Foundation (collectively "PerSeptive") have filed motions (1) to vacate the March 31, 1997 order on correction of patents; (2) to enter a judgment pursuant to Fed.R.Civ.P. 54(b); and (3) to withdraw the motion to correct inventorship. This flurry of motions was precipitated by a new standard articulated in a recent decision, Stark v. Advanced Magnetics, Inc., 119 F.3d 1551, 43 U.S.P.Q.2d 1321 (Fed.Cir. July 11, 1997) ("Stark"), which fundamentally alters the legal landscape of proceedings pursuant to 35 U.S.C. § 256. After hearing, this Court must re-examine its March 31, 1997 decision under the new standard.

PROCEDURAL BACKGROUND

As background, on January 9, 1996 this Court allowed defendants' motion for partial summary judgment. Based on the undisputed facts in the record, the Court concluded as a matter of law that, pursuant to 35 U.S.C. § 116, Frank Warner and/or Linda Lloyd were joint inventors of three patents concerning "perfusive chromatography". See Memorandum and Order, Jan. 9, 1996 ("PerSeptive I") (Attachment A to this opinion.) The Court directed PerSeptive to move to correct inventorship of the patents pursuant to 35 U.S.C. § 256 or the patents would be held invalid. Although objecting to that ruling and requesting the right to seek an interlocutory appeal on the inventorship issue, plaintiff moved to correct the inventorship. The Court held ten days of hearings on that motion. On March 31, 1997, the Court ruled that PerSeptive had not met its burden of proving by a preponderance of the evidence that the nonjoinder was made without deceptive intent on the part of the named inventors. See Memorandum and Order, Mar. 31, 1997, at 131 ("PerSeptive II") (Attachment B to this opinion.)

Because the Federal Circuit had not decided the proper burden of proof for the element of deceptive intent in a correction motion pursuant to § 256, that issue was starkly contested by the parties. Defendants urged the Court to put on the plaintiffs, i.e. the named inventors, the burden of proving the absence of deceptive intent on the part of the named inventors by clear and convincing evidence. The named inventors argued that the defendants were required to prove their intent by clear and convincing evidence, or, as a fallback, that if the named inventors bore the burden, they were required to prove the absence of deceptive intent only by a preponderance of the evidence. I adopted the fallback position of the plaintiffs. Id. at 123-25.

DISCUSSION

1. Stark

Stark holds, contrary to what the parties and the Court had assumed, that the proper focus of a Section 256 hearing is not on the intent of the named inventors. Instead, correction of inventorship under Section 256 "only requires an inquiry into the intent of the nonjoined inventor." Stark, 119 F.3d at 1552 emphasis added. Section 256 "allows complete substitution of inventors as long as the true inventors are without deceptive intent." Id. at 1556.

To the extent the defendants allege deceptive conduct on the part of the named inventors, the Court is called upon to examine that claim under the "inequitable conduct" doctrine. Id. at 1555-1556. Under this doctrine, defendants bear the burden of proving deceptive intent by the named inventors by clear and convincing evidence. See Glaverbel Societe Anonyme v. Northlake Mktg. & Supply, Inc., 45 F.3d 1550, 1556-57 (Fed.Cir.1995) ("The factual premises of materiality and intent must be proved by clear and convincing evidence."). As Stark points out, a patent may be held unenforceable under the inequitable conduct doctrine where any co-inventors have been omitted with evidence of deceptive intent on the part of the named inventors. See 119 F.3d at 1555-56 (citing Burroughs Wellcome Co. v. Barr Lab., Inc., 40 F.3d 1223, 1226 (Fed.Cir.1994)); see also 35 U.S.C. § 115 (requiring that an applicant for a parent "shall make oath that he believes himself to be the original and first inventor").

With respect to Warner and Lloyd, the nonjoined and unnamed true co-inventors, exhaustive discovery has unearthed no hint of deceptive intent. The named inventors proffer none. Still, the straightforward, straightjacket task mandated in Stark — the inquiry into the intent of the nonjoined inventor(s) — is complicated by the fact that both Warner and Lloyd are probably estopped from asserting an inventorship interest, as they have received notice of these proceedings, but declined to intervene.¹ See PerSeptive II at 88. Accordingly, I decline to order the patents to be corrected and instead simply hold, as suggested by PerSeptive, that they are correctable — subject to the claim of estoppel — because there is no evidence of deceptive intent on the part of the nonjoined inventors.

2. Inequitable Conduct

In light of Stark, the Court must reexamine the legal effect of its factual findings in PerSeptive II that defendants have proven by clear and convincing evidence that the named inventors made a series of misrepresentations to the United States Patent and Trademark Office ("PTO"). First, in the 117-page opinion, I concluded that the named inventors intentionally misrepresented their role in developing the perfusive particle and intentionally underplayed the role of Polymer Laboratories. Second, I concluded that defendants had demonstrated that the named inventors made four affirmative misrepresentations to the Parent Examiner regarding the timing of the invention. I fully re-adopt all factual findings in PerSeptive II. See id. at 88-122 & 125-131.

Even before Stark was decided, defendants had filed a motion for determination of inequitable conduct based on these factual findings. (Docket No. 876.) Rather than resolve this action in a piecemeal fashion, I conclude that it is both more efficient and in the interest of justice to determine whether defendants have proven by clear and convincing evidence that the named inventors engaged in inequitable conduct during prosecution of the patent by omitting co-inventors with deceptive intent, rather than to permit plaintiffs to withdraw the motion to correct inventorship. This determination would permit all issues concerning inventorship can be considered in a single appellate proceeding. While all parties envisioned the proceeding to be governed by Section 256, I see no unfair surprise in determining whether plaintiffs engaged in inequitable conduct solely with respect to the omission of inventors because this issue of deceptive intent is substantially the same issue addressed in the Section 256 proceeding under a shifted burden. Early in the Section 256 proceeding, this Court suggested that it decide the issue of inequitable conduct as well as inventorship with respect to each of the alleged misrepresentations. Plaintiffs had objected because of the late notice, and the Court declined to decide the inequitable conduct issue given its ruling on inventorship under Section 256. Now, under Stark, I have reconsidered that decision, in part.

There is no right to a jury trial on the affirmative defense of inequitable conduct, which provides relief by way of a court's equitable powers. See Cabinet Vision v. Cabnetware, 129 F.3d 595, 599 n. 4 (Fed.Cir.1997). A trial court may decide the issue of inequitable conduct involving "conduct-of-the-applicant in-the-PTO" in a nonjury trial before determining "infringement/validity issues." Gardco Mfg. Inc. v. Herst Lighting Co., 820 F.2d 1209, 1213 (Fed.Cir.1987) (holding that a prior trial of the inequitable conduct claim is precluded only where the party seeking the jury trial shows that the factual issues relating to a legal claim for patent infringement were common with those relating to the equitable claim).

A conclusion of inequitable conduct requires an equitable weighing by the Court of the factual issues of intent to deceive and materiality of the alleged omissions or misrepresentations in the totality of the circumstances. See Nobelpharma AB v. Implant Innovations, Inc., 129 F.3d 1463, 1474 (Fed. Cir.1997). The Federal Circuit has clearly delineated the applicable standard:

Inequitable conduct resides in the failure to disclose material information with an intent to deceive or mislead the PTO. Once thresholds of materiality and intent have been established, the court conducts a balancing test and determines whether the scales tilt to a conclusion that `inequitable' conduct has occurred. The more material the omission or the misrepresentation, the lower the level of intent required to establish inequitable conduct, and vice versa.... Direct evidence of intent or proof of deliberate scheming is rarely available in instances of inequitable conduct, but intent may be inferred from the surrounding circumstances.

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