SMITHKLINE DIAGNOSTICS v. HELENA LABORATORIES

• Decision Date: 19 June 1987
• Docket Number: Civ. A. No. B-83-10-CA.
• Citation: 662 F. Supp. 622
• Court: U.S. District Court — Eastern District of Texas
• Parties: SMITHKLINE DIAGNOSTICS, INC. v. HELENA LABORATORIES CORPORATION.

662 F. Supp. 622

SMITHKLINE DIAGNOSTICS, INC. v. HELENA LABORATORIES CORPORATION.

Civ. A. No. B-83-10-CA.

United States District Court, E.D. Texas, Beaumont Division.

June 2, 1987.

As Amended June 19, 1987.

COPYRIGHT MATERIAL OMITTED

Gilbert I. Low, Orgain, Bell & Tucker, Beaumont, Tex., Donald R. Dunner, Allen M. Sokal, Thomas H. Jenkins, Finnegan, Henderson, Farabow, Garrett & Dunner, Washington, D.C., for plaintiff, SmithKline Diagnostics, Inc.

Walter J. Crawford, Jr., Wells, Peyton, Beard, Greenberg, Hunt and Crawford, Beaumont, Tex., Charles R. Rutherford, Jerold I. Schneider, Cullen, Sloman, Cantor, Grauer, Detroit, Mich., for defendant, Helena Laboratories Corp.

FINDINGS OF FACT AND CONCLUSIONS OF LAW

JOE J. FISHER, District Judge.

The above-entitled and numbered cause came on for trial, and the Court having considered the pleadings, having heard the testimony and determined the credibility of witnesses, having examined physical exhibits and studied post-trial submissions of the parties, and all of the evidence, and having heard the arguments and reviewed the briefs of counsel, now makes the following Findings of Fact and Conclusions of Law pursuant to Rule 52, Federal Rules of Civil Procedure. If any Finding of Fact should be construed as a Conclusion of Law, it is to be so considered; and should any Conclusion of Law be construed as a Finding of Fact, it is to be so considered.

FINDINGS OF FACT

1.

This is a suit for infringement of U.S. Patent No. 4,365,970 (the Lawrence patent or the '970 patent) brought by SmithKline Diagnostics, Inc. (SKD) against Helena Laboratories Corporation (Helena).

2.

SKD owns patent in suit No. 4,365,970 to a diagnostic test for detecting occult blood in fecal matter.

3.

The test is known as a fecal specimen test slide. It includes paper containing a compound, guaiac, that turns blue in the presence of a developing solution and a catalyst, such as the hemoglobin in blood. Thus, a blue color indicates the presence of blood and is referred to as a "positive" result. The absence of blue indicates the absence of blood and is referred to as a "negative" result. It is important to verify that the guaiac paper and the developing solution are working properly. False negative or positive results can cause failure to detect colorectal cancer or unnecessary, exhaustive clinical investigations and patient anxiety.

4.

The '970 patent discloses and claims the first fecal occult blood specimen test slide having built-in positive and negative monitors for verifying the proper performance of the slide. The slide contains, besides the test area where the fecal specimen is applied, an isolated area divided into two sections. One additionally contains a catalyst — a compound that reacts to environmental conditions in a manner similar to hemoglobin — is the positive monitor. The second section lacks the catalyst and consists of the guaiac-impregnated paper alone, and is the negative monitor.

5.

After developer is added to the paper opposite the fecal specimen, developer is added to the positive and negative monitors. A blue color on the positive monitor means the reagents are working properly. The absence of a blue color on the negative monitor means the slide has not been contaminated.

6.

The invention of the '970 patent satisfied a long-felt need for a satisfactory built-in test for verifying the performance of fecal occult blood test slides. This need was recognized as early as the 1950's in a publication calling for use of external controls. External controls have been virtually unused because they are cumbersome. Nevertheless, they went essentially unchanged for thirty years.

7.

External controls had other, serious deficiencies. They were generally used as a "batch test," i.e. once for each batch of samples, which left the possibility of contamination or other error that did not affect the whole batch. Doctors that inquired about testing the slides were advised only to use a dilute blood solution as a positive control. Negative controls that would detect false positives were not suggested. Furthermore, the slides were used by people unskilled in the techniques necessary to make, store, and use controls. Despite the critical need for controls that worked, those looking for a solution to the problem experimented only with external controls.

8.

Dr. Lawrence of SKD, a coinventor of the '970 patent, followed a different approach, namely, built-in positive and negative controls on each slide. This had the advantage of verifying the performance of every slide and it was much easier to use than external controls. Furthermore, a built-in positive monitor printed during manufacturing gave more reproducible results than external controls that were applied in variable amounts. Dr. Lawrence's approach was also new in that he no longer sought only controls that simulated feces. Monitors that indicated only whether the slide and developer were working properly avoided the confusion that could result from comparing the test results on the actual fecal specimen and on the monitors.

9.

Dr. Lawrence experimented to test his ideas. By February 23, 1979, Dr. Lawrence had conceived of the definite and permanent idea of the complete and operative fecal occult blood test slide with built-in monitors that was later specified in claim 1 of the '970 patent and used in SKD's Hemoccult slides, as evidenced by his laboratory notebook and written and oral reports and demonstrations to Mr. S. Wayne Kay, who corroborated Dr. Lawrence's testimony. Dr. Lawrence had done enough work by February 23, 1979 to know that his basic concept worked satisfactorily.

10.

Claims 1, 2, 4 and 5 are alleged to be infringed (35 U.S.C. § 271) by Helena's Coloscreen products. Helena has denied infringement and counterclaimed for a declaration of noninfringement and patent invalidity for obviousness. (35 U.S.C. § 103). Much of the evidence relating to the issues of validity and infringement involved the proper interpretation of the phrase "reacts to environmental conditions in a manner similar to hemoglobin" which appears not only in the patent specification but in all of the asserted claims.

11.

The subject matter of this lawsuit is a product including a chemical test for fecal occult blood testing. Chemical tests of stool samples for occult blood was a wellknown technique for many years prior to the Lawrence patent.

For many years, SKD marketed a paper "slide" under the trademark "Hemoccult". The Hemoccult slide contained locations for one or more stool samples.

12.

In 1980, Helena, in connection with its Coloscreen slides, supplied a control system under the trademark "Colochek," which allowed verification that the chemicals were functioning properly. Helena advertised and marketed the use of the control system on each slide. The control system marketed by Helena "looked like" the fecal specimen and the positive control included hemoglobin.

By 1980, Gamma Biologicals, of Houston, was also marketing a competitive slide product with a control system including hemoglobin as the positive control.

13.

According to the Lawrence patent description, because of the possibility of false results, controls should be provided for each slide. The positive control should turn color if everything was working properly and the negative control should remain colorless (no color change) if everything was working properly. This was accomplished by placing an additional chemical in the positive control area; the preferred chemical was hemin.

14.

When Lawrence and Townsley filed for a patent, they defined their invention as an improvement on the slide in the following language (from original claim 1):

"In a specimen test slide ... the improvement comprising a control area having a positive and negative monitor, said control area positioned on a portion of the sheet facing the rear panel."

15.

The Examiner ultimately agreed to grant a patent if SKD was more specific about the positive and negative monitors. The claims were amended as follows:

"... said positive monitor additionally including a compound that reacts to environmental conditions in a manner similar to hemoglobin." (Emphasis added)

16.

The patent claims measure the invention; it is the claims which are to be considered both for purposes of validity and infringement. The claims must be interpreted in the context of the patent specification, the prior art, the level of skill in the art, the meaning of terms to those of ordinary skill in the art and the patent office proceedings. McGill, Inc. v. John Zink Co., 736 F.2d 666 (Fed.Cir.1984). After evaluating all of the evidence including considering the credibility of witnesses, the Court is satisfied that Helena has established by clear and convincing evidence that the phrase "reacts to environmental conditions in a manner similar to hemoglobin" is to be interpreted to exclude hemoglobin itself.

17.

Claims 1, 2, 4 and 5 are asserted. Helena contends that these claims are invalid for obviousness under 35 U.S.C. § 103.

The Lawrence patent is presumed valid. 35 U.S.C. Section 282. The presumption of validity casts a burden on Helena which remains with Helena throughout the trial both as to presenting evidence and as to persuasion, to rebut the presumption of validity by clear and convincing evidence. To determine if Helena has met its burden of proof, this Court must follow the four part test set forth in Graham v. John Deere, 383 U.S. 1, 86 S.Ct. 684, 15 L.Ed.2d 545 (1966), namely: (1) the scope of the prior art must be determined; (2) the differences (if any) between the prior art taken as whole and the claims must be ascertained; and (3) the level of ordinary skill in the art must be ascertained. The fourth element is identified by the generic title "Secondary Factors" and must always be considered if established by the evidence. It is against this background that the obviousness or non-obviousness of the...