US Surgical Corp. v. Hospital Products Intern.

Decision Date02 December 1988
Docket NumberCiv. No. B-81-42 (TFGD).
Citation701 F. Supp. 314
PartiesUNITED STATES SURGICAL CORPORATION, Plaintiff, v. HOSPITAL PRODUCTS INTERNATIONAL PTY. LTD., Surgeons Choice, Inc., and Alan R. Blackman, Defendants.
CourtU.S. District Court — District of Connecticut

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Michael J. Dorney, Tyler Cooper & Alcorn, New Haven, Conn., John E. Nathan, Jesse J. Jenner, Robert J. Goldman, Alan M. Gordon and Richard A. Inz, Fish & Neave, Sanford M. Litvack, Dewey Ballantine, Bushby, Palmer & Wood, New York City, for plaintiff.

Alan R. Blackman, Boca Raton, Fla., pro se.

AMENDED MEMORANDUM OF DECISION*

DALY, Chief Judge.

Plaintiff, United States Surgical Corporation ("USSC"), initiated this action on January 26, 1981 for patent infringement and related declaratory judgment relief. The complaint ultimately was amended to include claims for violation of § 43(a) of the Lanham Act, statutory and common law trademark infringement, and infringement of common law trade name rights. The plaintiffs initially sought injunctive relief, but that claim since has been rendered moot by the expiration of the patents-in-suit. The defendants generally denied the gravaman of the complaint and asserted a variety of boiler plate defenses and affirmative defenses that challenge the validity and enforceability of the patents-in-suit. They also asserted several counterclaims to redress alleged unfair competition, and for violation of the Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. § 1961. Pursuant to Fed.R.Civ.P. 42(b), the Court severed for trial the issues regarding infringement and the relevant defenses from the various other claims and counterclaims. The instant ruling, entered pursuant to Fed.R.Civ.P. 52(a),1 represents the culmination of a lengthy and protracted trial and an arduous review of the entire record, particularly the proposed findings and conclusions submitted before and after trial, as well as the trial exhibits and transcripts of the trial testimony.2

I. BACKGROUND

The subjects of the suit are four patents for surgical stapling devices and accessories all of which are owned by USSC and marketed under the trademark "AUTO SUTURE." The patents are as follows:

                Patent No.             Title                       Issue Date
                3,275,211     Surgical Stapler With            September 27, 1966
                              Replaceable Cartridge
                              ("Hirsch '211")
                3,315,863     Medical Instrument               April 25, 1967
                              ("O'Dea '863")
                3,494,533     Surgical Stapler For             February 10, 1970
                              Stitching Body Organs
                              ("Green '533")
                3,499,591     Instrument For Placing           March 10, 1970
                              Lateral Gastro-Intestinal
                              Anastomoses
                              ("Green '591")
                

The plaintiff's patented products are the mainstay of a revolution in surgical suturing procedures and replace the traditional needle and thread for suturing and reconstructing human tissue. It is alleged that Blackman, a former USSC salesman in New York, began marketing and reproducing USSC's products under either the Hospital Products Limited or Surgeons Choice label.

The following issues were tried and shall be resolved by the instant decision:

1. whether the USSC patents-in-suit are valid and enforceable;

2. whether the manufacture, use or sale of one or more of the defendants' products infringe, contributorily infringe, or induce the infringement of one or more claims of the patents in suit; and,

3. whether the defendants' infringement, if any, was willful and deliberate.

1. The Parties

The plaintiff, USSC is a New York corporation having a principal place of business in Norwalk, Connecticut. The patents-in-suit issued to USSC-Maryland, with which USSC merged in 1975. As a result of the merger USSC acquired the patents, and thus, USSC has been, and continues to be, the owner of all right, title and interest to the patents, and has standing to sue, and recover, for any past infringement.

Defendant Hospital Products International Pty. Ltd. ("HPI"), and its successor-in-interest, Hospital Products Limited ("HPL"), are Australian corporations. For present purposes, the two shall be treated synonymously. The second corporate defendant, Surgeons Choice, Inc. ("SCI"), a wholly-owned subsidiary of HPL, is a Delaware corporation that, at the time the suit was instituted, maintained a regular and established place of business in Greenwich, Connecticut. In August, 1985, SCI filed for bankruptcy under Chapter 11 of the bankruptcy laws. The bankruptcy later was converted to a Chapter 7 proceeding, and on December 20, 1985, pursuant to the automatic stay provisions of 11 U.S.C. § 362(a), the Court ordered the instant action stayed only as to SCI.3

The individual defendant, Alan R. Blackman ("Blackman"), is a United States citizen who has been associated with SCI, HPI and HPL in a variety of capacities during the relevant period. The extent and nature of Blackman's associations with the corporate defendants is a matter of some dispute and shall be discussed more fully infra.4

2. Historical Background of Surgical Stapling Devices

Throughout medical annals it appears that surgeons typically have employed manual suturing with needle and thread for the reparation and reconstruction during surgery of body tissue and organs. The several disadvantages attendant to the traditional suturing procedure include the usually excessive time while the patient is anaesthetized and his tissue is being repetitively handled, both of which may cause excessive trauma, bleeding, and infection that may impede the patient's recovery. Efforts to develop alternative, mechanical, suturing techniques and devices date back to at least as early as 1826. Not until the early portion of this century, however, did those efforts involve stapling devices such as those developed by Humer Hultl and Aladar von Petz of Hungary. Their stapling devices, like the other, similar devices developed by their contemporaries in other parts of Europe and the Orient, proved either too clumsy, tedious, or otherwise impractical for mass production and use in the surgical setting.

Prompted, at least in part, by the multitude of deaths from acute and profuse bleeding suffered by the Russian troops around Stalingrad in World War II, the Russians set out in 1946 to develop surgical staplers, particularly of the vascular genre, that would capture a simplicity of operation and time, and surpass the benefits of conventional manual suturing. The Russians organized their efforts by establishing in 1951 the Scientific Research Institute for Experimental Surgical Apparatus ("the Russian Institute"). The Russian Institute employed experts from several disciplines, including metallurgy, engineering, and the medical arts, and within several years had generated several patented inventions and designs for stapling devices.

A great many problems inherent in the Russian devices prevented any of them from ever being viable or marketable for widespread use. For example, each Russian instrument, as well as the metal staple magazines, were individually machined, which precluded the interchangeability of parts and mass production of the instruments. Further, the staples had to be loaded individually by hand; a tedious and time consuming process. Besides these difficulties, the devices also were difficult to maintain for precision operability. For example, the "C-clamp" staplers, typically used to seal off a diseased organ, utilized tiny pusher fingers attached to a pusher rod, that would press against the staples, causing them to eject from the cartridge and into the tissue. The pusher fingers were difficult to maintain and clean, and could easily bend out of alignment. In such an instance the stapler could jam during surgery or lose a staple from the staple line and cause leakage along the suture line. Similarly, the anastomosis devices, used to join two hollow body organs, also contained tiny staple pushers, that, because they were difficult to clean, would become inoperable from accumulations of fibrin. Although recognizing the need to develop devices with replaceable parts, such as anvils and magazines, the experts at the Russian Institute never were able to produce or market reliable, durable, and precision devices for mass production and widespread use.

In sum, while the Russian instruments, devised for a wide range of uses, had replaceable staple magazines that could be pre-loaded with fine wire staples, they left several problems to be overcome, such as staples that had to be hand loaded, instruments that had to be disassembled to be reloaded, the instruments accepted only a single type of magazine, and the delicate staple-driving fins were subject to damage, and the knives to dulling.

By 1958 the pioneering efforts of the Russian Institute had become known to prominent experts in the United States who had visited the Institute, and in 1959-60 the devices were brought to this country where they were demonstrated. Though well received, the shortfalls of the devices were recognized. At least one company licensed to market the Russian products in this country realized the need to develop pre-loaded disposable staple cartridges, but the idea never came to fruition. Despite great efforts, the Russian devices never were marketed with any success in this country.

The work of the Russian Institute did, however, prove to be the catalyst for research and development of similar devices in the United States. One of the most notable of the relevant American pioneering devices was the vascular stapler, used to join two severed blood vessels, and patented by Rudolph F. Mallina. Mallina and his associates were intent on improving the Russian vascular stapler. They succeeded in patenting a device that enjoyed over its Russian counterpart an economy of parts, and disposable plastic bushing halves, and staple pushers....

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