Therasense, Inc. v. Becton, Dickinson and Co.

• Decision Date: 24 June 2008
• Docket Number: No. C 04-02123 WHA.,No. C 05-03117 WHA.,No. C 04-03327 WHA.,No. C 04-03732 WHA.,C 04-02123 WHA.,C 04-03327 WHA.,C 04-03732 WHA.,C 05-03117 WHA.
• Citation: 565 F.Supp.2d 1088
• Court: U.S. District Court — Northern District of California
• Parties: THERASENSE, INC., Plaintiff, v. BECTON, DICKINSON AND COMPANY, Defendant. and Consolidated Cases.

565 F.Supp.2d 1088

THERASENSE, INC., Plaintiff, v. BECTON, DICKINSON AND COMPANY, Defendant.

and Consolidated Cases.

No. C 04-02123 WHA.

No. C 04-03327 WHA.

No. C 04-03732 WHA.

No. C 05-03117 WHA.

United States District Court, N.D. California.

June 24, 2008.

COPYRIGHT MATERIAL OMITTED

Jason Rantanen, Jeffrey I. Weinberger, John Walter Peck, Ted G. Dane, Esq., Munger, Tolles & Olson LLP, Los Angeles, CA, Rohit K. Singla, Munger Tolles & Olson, San Francisco, CA, David Wille, Matthew A. Hayenga, Baker Botts LLP, Dallas, TX, James W. Cannon, Jr., Maria W. Boyce, William P. Johnson, Baker Botts L.L.P., Austin, TX, Jose E. Rivera, Karen L. Hale, Abbott Park, IL, Steven Mitby, Baker Botts LLP, Houston, TX, for Plaintiff.

Bradford J. Badke, Brandon H. Stroy, Brien P. Santarlas, Sanjeev Mehta, Neal K. Dahiya, Ropes & Gray LLP, New York, NY, Mark D. Rowland, Mark Daniel Rowland Gabrielle Elizabeth Higgins, Ropes & Gray LLP, Palo Alto, CA, for Defendant.

FINDINGS OF FACT AND CONCLUSIONS OF LAW

WILLIAM ALSUP, District Judge.

INTRODUCTION

After a bench trial, this order constitutes the findings of fact and conclusions of law. Both sides have submitted lengthy proposed findings and conclusions. Rather than address each and every proposal, this order will find its own way through the evidence and arguments. Any proposal that has been expressly agreed to by the opposing side, however, shall be deemed adopted even if not expressly stated herein. That a proposal has not been expressly covered herein does not necessarily mean it was rejected; it only means that the Court found it unnecessary to reach.

THE PROCEDURAL HISTORY OP THE CASE

Abbott Laboratories filed the first of these actions on May 28, 2004. Three subsequent actions were filed. All concerned four United States patents owned by Abbott and Therasense, Inc.¹ U.S. Patent No. 5,820,551 is the subject of this order. These actions were originally assigned to The Honorable Martin J. Jenkins. Judge Jenkins issued a first claim construction order for certain other patents and a separate claim construction order for the '551 patent. He also issued three separate summary judgment orders. The final one, dated April 3, 2008, involved all parties and all patents in suit. While the final summary judgment order did eliminate several infringement counts, several other claims were still viable. Immediately after issuing the final summary judgment order, Judge Jenkins left the federal bench, and all four cases came to the undersigned.

All four cases were subsequently consolidated and a trial date was set for May 27, 2008. All defendants were permitted to file one more round of summary judgment motions and each party was allowed motions in limine. A technology tutorial for the undersigned was also held. The motions for summary judgment and motions in limine were fully briefed. A first omnibus order ruled on the motions for which oral argument was not required. Argument was then heard for the remaining pending motions. In a second omnibus order, the final pending motions were decided. Defendant Roche Diagnostics Corporation subsequently settled on the eve of trial.

During this time, the Court and counsel also addressed the shape of the trial. It was decided that a trial on the '551 patent would be held first with all defendants and would be broken up into three separate phases: (i) invalidity and unenforceability; (ii) infringement (if needed); and (hi) willfulness and damages (if needed). All parties then stipulated that phase one of the '551 trial would be tried to the bench. Defendants raised four issues for phase one: inequitable conduct, obviousness, prosecution laches, and non-compliance with the written-description requirement.

When the trial on the '551 patent began, the remaining defendants were Bayer Healthcare, LLC, Becton Dickinson & Company, and Nova Biomedical Corporation (collectively "BD/Nova"). Before trial began, Abbott made a request to add Attorney Lawrence Pope as a live trial witness in its case-in-chief. During Attorney Pope's deposition, Abbott's counsel had on three separate occasions insisted to defense counsel that Attorney Pope would not appear in person at trial. This was said in aid of repeated instructions not to answer. Attorney Pope was, therefore, scheduled to appear only through video-deposition. Based on Abbott's insistence at deposition that Attorney Pope would not appear live at trial, Abbott's request to have Attorney Pope appear as a live trial witness was initially denied. This denial was on the ground that it would be unfair to defendants, who had relied on the deposition representations to their detriment in not bringing Rule 37 motions. During trial, however, Abbott renewed its motion to allow Attorney Pope to testify in person at trial. The Court then asked Abbott to submit a sworn proffer showing the proposed statement of Attorney Pope's testimony. Abbott submitted a declaration signed by Attorney Pope detailing the facts he would cover in his testimony. Because of the seriousness of the accusation against Attorney Pope, the Court relented and allowed Abbott to call Attorney Pope in its case-in-chief on those topics raised in his declaration.

After defendants closed their case-in-chief, Abbott moved for partial findings under Rule 52(c) that defendants had failed to meet their burden of proof with respect to their defense of prosecution laches. The motion was granted on the ground that defendants had failed to show any intent to delay prosecution of the '551 patent or that substantial prejudice resulted from any such delay. Abbott also moved for partial findings as to defendants' remaining invalidity defenses. These motions were all denied. Abbott rested its case-in-chief on June 2 and closing arguments were heard on June 3. This order now follows.

THE UNITED KINGDOM WORK

United States Patent No. 4,545,382 (and its European counterpart) is a decisive item of prior art in this decision. Here is its story. In the late 1970's and early 1980's, two research groups at the University of Oxford and the University of Cranfield in the United Kingdom were working on electrochemical sensors to detect the concentration of specific components in solutions. In particular, they were interested in developing electrochemical sensors that could be used to test glucose levels in human blood. Doctors Irving Higgins, Hugh Hill, and Elliot Plotkin were part of these research groups. In 1981, both groups teamed with a newly founded company, Genetics International, which was co-founded by James McCann. One goal was to create the first commercial electrochemical sensor for glucose.²

In 1981, the researchers filed their first patent application. This became the '382 patent in the United States and No. 0078,636 B2 in the European Patent Office. The specification taught an improved electrochemical sensor for use in various liquid mixtures. The sensor was an electrode coated with specified chemicals that generated a tiny but detectable flow of electricity in the presence of glucose. The technology itself will be described below. In brief, the chemicals coated onto the electrode combined with glucose or whatever other "substrate" was being tested to generate small currents of electricity, which could then be measured by an ammeter. The higher the concentration of substrate, the higher the electrical current, and the higher the meter reading. The patent disclosed certain ferrocene chemistry that allowed for fasting testing.

Although the United States '382 patent lived out its seventeen years without incident, its EPO counterpart (i.e., the '636) was eventually revoked based on a German prior-art reference that was cited by a third party in a European opposition proceeding. That was in the mid-1990's. The decision to revoke the patent was appealed, however, and the patent was eventually reissued by a technical board of appeal in the European Patent Office. Certain submissions made along the way by Abbott's predecessors, however, have turned out to be important in this proceeding by reason of their non-disclosure to the PTO during prosecution of the '551 patent in suit.

The research group continued its work on sensors for testing glucose levels in blood. Dr. Hill and his colleagues filed several additional patent applications, which were later combined to form a single United States patent application. All parties herein agree that the resulting U.S. Patent No. 5,820,551—the patent in suit— claims priority to May 1983. James McCann and Drs. Hill, Higgins and Graham Davis were listed as the inventors.

Originally, the claimed invention of the '551 patent was the development of a disposable electrode strip whose electrodes could be covered by a single drop of solution. These one-use strips would be inserted into a convenient unit for digital readout of the level of a target compound (like glucose) in a test liquid mixture (like blood). After a strip was used to generate a readout, it could be thrown away.

The '551 patent was in prosecution for over fourteen years. During this period, Genetics International changed its name to Medisense, Inc. Various claims were rejected twelve times by the PTO examiner, David Shay. Eleven out of the twelve rejections relied on the '382 patent or its European counterpart, the '636 patent. During this prolonged prosecution, Medisense amended the proposed claims several times to overcome rejections by Examiner Shay—all without success. At times, Medisense also submitted declarations from persons of ordinary skill in the art to distinguish its claims from the prior art. None of the proposed amendments ever included a limitation for a sensor without a filter or a membrane.

In the meantime, several other companies, including defendants Bayer Healthcare, LLC, and Becton Dickinson & Company, had begun manufacturing and selling disposable electrochemical sensors for diabetic patients.

In 1996—while the '551 patent was still...