Puget Bioventures, LLC v. Biomet Orthopedics LLC, Case No. 3:10-CV-465 JD

• Decision Date: 02 July 2018
• Docket Number: Case No. 3:10-CV-465 JD
• Citation: 325 F.Supp.3d 899
• Parties: PUGET BIOVENTURES, LLC, Plaintiff, v. BIOMET ORTHOPEDICS LLC, and Biomet Manufacturing, LLC, Defendants.
• Court: U.S. District Court — Northern District of Indiana

325 F.Supp.3d 899

PUGET BIOVENTURES, LLC, Plaintiff,

v.BIOMET ORTHOPEDICS LLC, and Biomet Manufacturing, LLC, Defendants.

Case No. 3:10-CV-465 JD

United States District Court, N.D. Indiana, South Bend Division.

Signed July 2, 2018

Kelsey J. Thorkelson, PHV, Mary Pheng, PHV, Patrick M. Arenz, PHV, Ronald J. Schutz, PHV, Sharon E. Roberg-Perez, PHV, Robins Kaplan LLP, Minneapolis, MN, Patrick David Murphy, Murphy Rice LLP, South Bend, IN, for Plaintiff.

Laith M. Abu-Taleb, PHV, J. Michael Jakes, PHV, Kathleen A. Daley, PHV, Scott A. Allen, PHV, Finnegan Henderson Farabow Garrett & Dunner LLP, Washington, DC, Wendell W. Walsh, Robert J. Palmer, May Oberfell Lorber, Mishawaka, IN, Douglas D. Salyers, PHV, Troutman Sanders LLP, Atlanta, GA, for Defendants.

OPINION AND ORDER

JON E. DEGUILIO, Judge

Hudson Surgical Design, Inc. initiated this lawsuit against Biomet Orthopedics LLC and Biomet Manufacturing, LLC (collectively, "Biomet") in the Northern District of Illinois on July 19, 2010, alleging infringement of its patent for "Methods and Apparatus for Femoral and Tibial Resection," U.S. Patent No. 7,344,541 (the "'541 patent"). Hudson Surgical filed its first amended complaint two months later, in September (the "FAC"). [DE 17] Biomet answered the FAC that same month. [DE 19] On motion, the case was then transferred to this Court in November 2010 and then ordered stayed in December 2010, pending reexamination of the '541 patent before the United States Patent and Trademark Office. During the stay, Hudson Surgical assigned ownership of the '541 patent to Puget Bioventures, LLC ("Puget").

The stay was lifted in August 2017 following the reexamination, and the parties were ordered to exchange contentions and proceed with claims construction. On November 3, 2017, Biomet filed its Motion for Judgment on the Pleadings. [DE 114] For the reasons stated herein, the Court will grant Biomet's motion in part and deny in part.

FACTUAL ALLEGATIONS

The '541 patent issued to Hudson Surgical on March 18, 2008. Only four months later, Hudson Surgical sent a letter to Biomet, informing Biomet of the '541 patent. The letter advised Biomet that Hudson Surgical believed the '541 patent covered several of Biomet's products. Subsequent alerts issued in 2010, when Puget sent Biomet charts demonstrating how Biomet's products were purportedly infringing on the '541 patent. Despite these warnings, Biomet took no steps to avoid infringement of the '541 patent. Specifically, Biomet designed, made, marketed, provided, distributed, and sold potentially infringing products to hospitals and surgeons, and in so doing, allegedly committed direct infringement of the '541 patent (specifically, patent claims 21-33 and 41-48). These products include Biomet's MIS TKA instruments and techniques. Furthermore, Biomet induced and contributed to infringement of the '541 patent by providing its infringing products to hospitals and surgeons, and by training surgeons to use said products (specifically, patent claims 1, 2, 5-13, 21-33, 41-48). Finally, Puget alleges that all of Biomet's purported direct and indirect infringement has been willful.

STANDARD

A motion for judgment on the pleadings under Rule 12(c) is subject to the same standard of review as a motion to dismiss under Rule 12(b)(6). Gill v. City of Milwaukee , 850 F.3d 335, 339 (7th Cir. 2017). Therefore, the Court construes the complaint in the light most favorable to the plaintiff, accepts the factual allegations as true, and draws all reasonable inferences in the plaintiff's favor. Reynolds v. CB Sports Bar, Inc. , 623 F.3d 1143, 1146 (7th Cir. 2010). A complaint must contain only a "short and plain statement of the claim showing that the pleader is entitled to relief." Fed. R. Civ. P. 8(a)(2). That statement must contain sufficient factual matter, accepted as true, to state a claim for relief that is plausible on its face, Ashcroft v. Iqbal , 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009), and raise a right to relief above the speculative level. Bell Atl. Corp. v. Twombly , 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). However, a plaintiff's claim need only be plausible, not probable. Indep. Trust Corp. v. Stewart Info. Servs. Corp. , 665 F.3d 930, 935 (7th Cir. 2012). Evaluating whether a plaintiff's claim is sufficiently plausible to survive a motion to dismiss is " ‘a context-specific task that requires the reviewing court to draw on its judicial experience and common sense.’ " McCauley v. City of Chicago , 671 F.3d 611, 616 (7th Cir. 2011) (quoting Iqbal , 556 U.S. at 678, 129 S.Ct. 1937 ).

DISCUSSION

Biomet argues for dismissal on three grounds. First, and most briefly, Biomet submits that many of the patent claims alleged in the FAC should be dismissed as unenforceable because they were cancelled during reexamination. Biomet also argues that claims 45 and 47 of the '541 patent are patent ineligible, and therefore Puget cannot allege that Biomet infringed on those claims. Finally, Biomet maintains that the allegations of infringement are insufficiently pled.

A. Cancelled Claims

The following claims of the '541 patent were cancelled during the reexamination: 1-30, 32, 34, 41-44, 46, 48, 53, and 54. [DE 118-5] Because of this, Biomet argues that Puget's infringement allegations regarding claims 1, 2, 5-13, 21-30, 32, 41-44, 46, and 48 should all be dismissed because those claims are unenforceable. The Court agrees. The Federal Circuit has made clear that "when a claim is cancelled, the patentee loses any cause of action based on that claim, and any pending litigation in which the claims are asserted becomes moot." Fresenius USA, Inc. v. Baxter Int'l, Inc. , 721 F.3d 1330, 1340 (Fed. Cir. 2013). So, Puget's infringement allegations based on any of the cancelled claims are moot and must be dismissed for lack of jurisdiction. See SHFL Entm't, Inc. v. DigiDeal Corp. , 729 Fed. App'x 931, 934 (Fed. Cir. 2018) ("Suits based on cancelled claims must be dismissed for lack of jurisdiction, however.") (citing Target Training Int'l, Ltd. v. Extended Disc N. Am., Inc. , 645 Fed. App'x 1018, 1023 (Fed. Cir. 2016) (upholding the district court's dismissal for lack of jurisdiction because Fresenius rendered the suit moot as to the claims cancelled after reexamination) ); see also CFTC v. Bd. of Trade of City of Chicago , 701 F.2d 653, 656 (7th Cir. 1983) ("[A] dismissal for mootness is a dismissal for lack of jurisdiction...."). Puget does not oppose the dismissal of its allegations related to the '541 patent's cancelled claims in response to the instant motion. The Court will therefore dismiss these moot allegations for lack of jurisdiction, without prejudice.

B. Patent Eligibility of Claims 45 and 47

Biomet contends that claims 45 and 47 of the '541 patent are patent ineligible under 35 U.S.C. § 101. Congress has defined which inventions are patentable in § 101 of the Patent Act, which states in its entirety:

Whoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefor, subject to the conditions and requirements of this title.

The Patent Act defines the term "process" as "process, art or method, and includes a new use of a known process, machine, manufacture, composition of matter, or material." 35 U.S.C. § 100.

"Laws of nature, natural phenomena, and abstract ideas are not patentable." Mayo Collaborative Servs. v. Prometheus Labs., Inc. , 566 U.S. 66, 70, 132 S.Ct. 1289, 182 L.Ed.2d 321 (2012).¹ Whether a patent's claims are patent ineligible involves a two-part inquiry. First, the Court must "determine whether the claims at issue are directed to a patent-ineligible concept," such as an abstract idea. Alice Corp. Pty Ltd. v. CLS Bank Int'l , 573 U.S. 208, 134 S.Ct. 2347, 2355, 189 L.Ed.2d 296 (2014). If this first determination is met, the Court must then "consider the elements of each claim both individually and ‘as an ordered combination’ to determine whether the additional elements ‘transform the nature of the claim’ into a patent-eligible application." Id. (quoting Mayo , 566 U.S. at 77-78, 132 S.Ct. 1289 ).

The first Alice step requires the Court to consider the claims "in their entirety to ascertain whether their character as a whole is directed to excluded subject matter." Internet Patents Corp. v. Active Network, Inc. , 790 F.3d 1343, 1346 (Fed. Cir. 2015). For clarity's sake, the "entirety" of claims 45 and 47 is not limited to the language contained at 44:16-24 and 44:30-38 of the '541 patent. As dependent claims, claims 45 and 47 include all of the limitations of the claims from which they depend. See Markman v. Westview Instruments, Inc. , 52 F.3d 967, 1000 (Fed. Cir. 1995) ("An extensive body of law, statutory and judgemade, governs the construction and legal effect of patent claims; for example ... that a dependent claim includes all of the limitations of the independent claim[.]"). Claim 45 depends directly from independent claim 24, and claim 47 depends solely from claim 46, which itself depends solely from independent claim 24. Therefore, when the Court addresses claims 45 and 47, it addresses them in their "entirety," which includes the language of claim 24 and (when applicable) claim 46.

The second Alice step requires the Court to "examine the elements of the claim to determine whether it contains an inventive concept sufficient to transform the claimed abstract idea into a patent-eligible application." Alice , 134 S.Ct. at 2357 (internal quotation marks omitted). "Step two is ‘a search for an inventive concept—i.e., an element or combination of elements that is sufficient to ensure that the patent in practice amounts to significantly more than a patent upon the ineligible concept itself.’ " Intellectual Ventures I LLC v. Symantec Corp. , 838 F.3d 1307, 1314 (Fed. Cir. 2016) (quoting Alice , 134 S.Ct. at 2355 ).

The operative language of patent claims 45 and 47 and...