Siemens Med. Solutions U.S. Inc. v. Saint–gobain Ceramics & Plastics Inc.

• Decision Date: 24 February 2011
• Docket Number: Nos. 2010–1145,2010–1177.,s. 2010–1145
• Citation: 637 F.3d 1269
• Court: U.S. Court of Appeals — Federal Circuit
• Parties: SIEMENS MEDICAL SOLUTIONS USA, INC., Plaintiff–Cross Appellant,v.SAINT–GOBAIN CERAMICS & PLASTICS, INC., Defendant–Appellant.

637 F.3d 1269

97 U.S.P.Q.2d 1897

SIEMENS MEDICAL SOLUTIONS USA, INC., Plaintiff–Cross Appellant,

v.SAINT–GOBAIN CERAMICS & PLASTICS, INC., Defendant–Appellant.

Nos. 2010–1145

2010–1177.

United States Court of Appeals, Federal Circuit.

Feb. 24, 2011.

Gregg F. LoCascio, Kirkland & Ellis, LLP, of Washington, DC, argued for plaintiff-cross appellant. With him on the brief were John C. O'Quinn, William H. Burgess, Michael A. Pearson, Jr.; and Robert G. Krupka, of Los Angeles, CA.Carter G. Phillips, Sidley Austin LLP, of Washington, DC, argued for defendant-appellant. With him on the brief were Virginia A. Seitz and James C. Owens. Of counsel on the brief was Arthur I. Neustadt, Oblon Spivak McClelland Maier & Neustadt, L.L.P., of Alexandria, VA.Before LOURIE, LINN, and PROST, Circuit Judges.Opinion for the court filed by Circuit Judge LOURIE. Dissenting opinion filed by Circuit Judge PROST.LOURIE, Circuit Judge.

Saint–Gobain Ceramics & Plastics, Inc. (“Saint–Gobain”) appeals from the decision of the United States District Court for the District of Delaware denying Saint–Gobain's motion for judgment as a matter of law (“JMOL”) or for a new trial following the jury's finding that Saint–Gobain infringed U.S. Patent 4,958,080 (the “'080 patent”) under the doctrine of equivalents. Siemens Med. Solutions USA, Inc. v. Saint–Gobain Ceramics & Plastics, Inc., 615 F.Supp.2d 304 (D.Del.2009) (“ JMOL Opinion ”). Siemens Medical Solutions USA, Inc. (“Siemens”) cross-appeals from the district court's grant of Saint–Gobain's motion for JMOL reducing the jury's award of damages. Id.

Because we discern no legal error in the court's jury instructions and no abuse of discretion in the court's evidentiary rulings, we affirm the decision of the district court denying Saint–Gobain's motion for JMOL or a new trial. However, for the reasons stated below, we vacate the district court's damages award and remand for a determination of additional damages.

Background

Positron emission tomography (“PET”) is a nuclear medical imaging technique that provides images and information about the chemical structure and function of a patient's organ systems. JMOL Opinion at 307. To obtain a PET scan, a patient is administered a radioactive isotope and enters the PET scanner. As the isotope decays in the patient's body, it emits positrons. When a positron collides with an electron in the patient's body, two gamma-ray photons are produced, which exit the patient's body. The photons are detected by the PET scanner's radiation detector, which contains thousands of scintillator crystals arranged in a ring around the patient's body. As the district court found, “[a] scintillator, generally, is a substance that absorbs high energy radiation and, in response, fluoresces photons at a specific, longer wavelength, releasing the previously absorbed energy.” Id. at 307 n. 1. The scintillator crystals convert the emitted gamma rays into visible light, which is then detected to produce a three-dimensional image of the radioactivity in the patient. This image provides useful diagnostic information about the patient's organ systems. Id. at 307.

Siemens develops, manufactures, and sells PET scanners. The scintillator crystals in Siemens' PET scanners consist of cerium-doped lutetium oxyorthosilicate (“LSO”). JMOL Opinion at 307. Saint–Gobain manufactures and sells scintillator crystals for use in PET scanners. Saint–Gobain's crystals consist of cerium-doped lutetium-yttrium orthosilicate (“LYSO”), which differs chemically from LSO in that some of the lutetium is substituted for by yttrium. Id. Specifically, Saint–Gobain's crystals are 10% Y LYSO, meaning that 10% of the lutetium atoms are substituted for by yttrium atoms. Saint–Gobain sells its scintillator crystals to Philips Medical Systems (“Philips”), which manufactures and sells PET scanners that compete with those sold by Siemens. Id. at 308.

Siemens owns the '080 patent, which relates to radiation detectors comprising an LSO scintillator crystal and a photodetector. JMOL Opinion at 307; J.A. 1210–11. The '080 patent was filed on August 4, 1989 and expired on October 6, 2008. JMOL Opinion at 307. Claim 1 of the '080 patent reads as follows:

1. A gamma ray or x-ray detector, comprising: a scintillator composed of a transparent single crystal of cerium-activated lutetium oxyorthosilicate having the general formulation Ce2 xLu2(1- x)SiO5», where x is within the range of from approximately 2x10 ^-4 to approximately 3x10 ^-2, and

a photodetector optically coupled to the scintillator for producing an electrical signal in response to the emission of a light pulse by the scintillator.

'080 patent col.12 ll.7–15.

Although the '080 patent is the only asserted patent in this case, the parties' arguments on appeal involve two additional patents. U.S. Patent 6,624,420 (the “'420 patent”), which is licensed to Saint–Gobain, discloses radiation detectors comprising LYSO scintillator crystals. JMOL Opinion at 307–08. Claim 1 of the '420 patent recites:

1. A scintillator detector for high energy radiation comprising: a monocrystalline structure of cerium doped lutetium yttrium orthosilicate, Ce2 x,(Lu1- yY y)2(1- x)SiO5» where x=approximately 0.0001 to approximately 0.05 and y=approximately 0.0001 to approximately 0.9999.

'420 patent col.7 ll.39–43. As the formula in claim 1 indicates, the LYSO crystals disclosed in the '420 patent range from 0.01% Y to 99.99% Y. The specification of the '420 patent states that LYSO crystals comprising 30% Y, 50% Y, 70% Y, and 85% Y were prepared. Id. col.4 ll.51–58. The '420 patent was filed on February 17, 2000, and its front page lists the '080 patent among the “References Cited.”

The parties also reference U.S. Patent 6,323,489 (the “'489 patent”), another patent disclosing LYSO scintillator crystals. The '489 patent was the subject of an interference action with the patent application that issued as the '420 patent. Claim 1 of the '489 patent recites:

1. A crystal scintillator comprising a transparent single crystal of cerium-activated lutetium yttrium oxyorthosilicate having the general formula Lu(2- x- z)Y xCe zSiO5, wherein 0.05=x=1.95 and 0.001=z=0.02.

'489 patent col.5 ll.2–5. Unlike the '420 patent, the specification of the '489 patent discloses the preparation of a crystal consisting of 10% Y LYSO. Id. col.3 l.64–col.4 l.1. The '489 patent was surrendered following an adverse decision in the interference proceeding. JMOL Opinion at 307 n. 3.

In April 2007, Siemens sued Saint–Gobain for infringement, including willful infringement, of claims 1 and 2 of the '080 patent. JMOL Opinion at 307. Siemens' infringement theory relied on the doctrine of equivalents. Siemens alleged that Saint–Gobain was liable for contributory and induced infringement under 35 U.S.C. § 271(b) and (c) by selling 10% Y LYSO crystals to Philips for use in its PET scanners. Id. at 308–09. Saint–Gobain argued in response that PET scanners comprising its 10% Y LYSO crystals did not infringe the '080 patent under the doctrine of equivalents. ¹ Saint–Gobain argued, in particular, that its LYSO crystals are not equivalent to those claimed in the ' 080 patent, because its crystals are separately claimed in the ' 420 patent. Id. at 308. In defense to Siemens' allegation of willfulness, Saint–Gobain pointed out that it obtained a license to the ' 489 patent and then, after the interference, to the ' 420 patent. Id. at 311–12.

A jury trial was held from September 17 to 25, 2008. Id. Despite Saint–Gobain's request for a higher evidentiary standard to prove equivalence (an issue we discuss further below), the court instructed the jury that Siemens must prove contributory and induced infringement under the doctrine of equivalents by a preponderance of the evidence. Id. at 309. Regarding the '420 patent, the court instructed the jury as follows:

[Y]ou have heard evidence that Saint–Gobain has a license under the ['420] patent to produce its 10% Y LYSO crystal. In connection with this evidence, I instruct you that a product that is covered by a subsequent patent may still infringe an earlier patent. Nonetheless, in considering the issue of infringement under the doctrine of equivalents, you may consider that Saint–Gobain obtained the license under the ['420] patent, which may be some evidence that the differences between the 10% Y LYSO crystal and the claimed LSO crystal are substantial. Such evidence may be considered along with other evidence of the similarities and differences between the claimed LSO crystal and Saint–Gobain's 10% Y LYSO crystal. It is for you to decide the issue of whether Saint–Gobain's 10% Y LYSO crystal constitutes an equivalent to the claimed LSO crystal of the '080 patent.

Id.; J.A. 451. The court also instructed the jury that, in the event it found infringement, it could consider a reasonable royalty and lost profits as damages. JMOL Opinion at 309; J.A. 467–70.

The jury found in favor of Siemens on infringement and awarded total damages of $52.3 million.² Id. The jury also found that Saint–Gobain's infringement was not willful. Id. Saint–Gobain filed a post-trial motion for JMOL or a new trial, in which Saint–Gobain challenged the following decisions of the district court: (1) a decision not to instruct the jury that infringement by equivalence must be proved in this case by clear and convincing evidence; (2) a decision not to instruct the jury that the ' 420 patent is presumed valid; (3) a decision not to admit into evidence the ' 489 patent and certain expert testimony; and (4) a decision to permit the jury to consider lost profits damages. Saint–Gobain further argued that the court should remit the jury's damages award.

In its opinion and order dated May 15, 2009, the district court denied Saint–Gobain's post-trial motion for JMOL or for a new trial. JMOL Opinion at 320. However, the court granted Saint–Gobain's request to reduce the jury's damages award, finding that evidence...