W.L. Gore & Assocs., Inc. v. Medtronic, Inc.

• Decision Date: 03 February 2012
• Docket Number: Civil Action No. 2:10cv441.
• Citation: 850 F.Supp.2d 630
• Court: U.S. District Court — Eastern District of Virginia
• Parties: W.L. GORE & ASSOCIATES, INC., and Gore Enterprise Holdings, Inc., Plaintiffs, v. MEDTRONIC, INC., Medtronic USA, Inc., and Medtronic Vascular, Inc., Defendants.

850 F.Supp.2d 630

W.L. GORE & ASSOCIATES, INC., and Gore Enterprise Holdings, Inc., Plaintiffs,

v.MEDTRONIC, INC., Medtronic USA, Inc., and Medtronic Vascular, Inc., Defendants.

Civil Action No. 2:10cv441.

United States District Court,

E.D. Virginia,

Norfolk Division.

Feb. 3, 2012.

Ahmed Jamal Davis, Fish & Richardson P.C.(DC), Washington, DC, Juanita Rose Brooks, Fish & Richardson P.C.(CA–NA), San Diego, CA, Robert M. Oakes, Susan Morrison Coletti, Timothy Devlin, Fish & Richardson(DE NA), Wilmington, DE, for Plaintiffs.

Dabney Jefferson Carr, IV, Rachel Clark Hughey, Richmond, VA, Ahmed Jamal Davis, Fish & Richardson P.C.(DC), Washington, DC, Daniel William McDonald, Karen Diane McDaniel, Rachel Clark Hughey, Thomas Joseph Leach, Merchant & Gould P.C., Minneapolis, MN, James Joseph Elacqua, Palo Alto, CA, Peter Attila Gergely, Ryan James Fletcher, Merchant & Gould P.C., Denver, CO, for Defendants.

OPINION AND ORDER

MARK S. DAVIS, District Judge.

PlaintiffsW.L. Gore & Associates, Inc. and Gore Enterprise Holdings, Inc.(collectively “Gore”) filed this action against Defendants, Medtronic, Inc., Medtronic USA, Inc., and Medtronic Vascular, Inc.(collectively “Medtronic”), alleging that Medtronic infringed upon Gore's U.S. PatentNo. 5,810,870(“the '870 patent”), entitled “Intraluminal Stent Graft.”Medtronic, in turn, has asserted various affirmative defenses and counterclaims.Gore's Motion to Dismiss Medtronic's Inequitable Conduct Counterclaim, under Federal Rule of Civil Procedure 12(b)(6), is presently before the Court.For the reasons discussed below, the motion will be DENIED.

I.FACTUAL AND PROCEDURAL BACKGROUND

On September 3, 2010, Gore filed a complaint against Medtronic alleging patent infringement.Gore alleges that Medtronic's Talent Thoracic Stent Graft and its Talent Abdominal Stent Grafts infringe claims 12, 16 and 19 of the ' 870 patent which are directed to methods of making a tubular intraluminal graft disclosed in the patent.On November 19, 2010, Medtronic filed a Motion to Dismiss Plaintiff's Complaint.On April 20, 2011, 778 F.Supp.2d 667(E.D.Va.2011), this Court denied the Defendant's Motion to Dismiss.Gore then filed an Amended Complaint on April 26, 2011, and Medtronic filed an Answer and Counterclaim on May 10, 2011.

Medtronic has asserted three counts in its counterclaim: (1) non-infringement, (2) invalidity, and (3) unenforceability due to inequitable conduct.Gore now moves to dismiss Medtronic's inequitable conduct count under Federal Rule of Civil Procedure 12(b)(6).Medtronic's inequitable conduct count can be broken into three allegations:

(1) House and Myers (the inventors named in the '870 patent) intentionally withheld material prior art (specificallyU.S. PatentNos. 5,358,516(the ' 516 patent) and 5,397,628 (the '628 patent)).

(2) House and Myers intentionally mischaracterized references they disclosed to the Patent Office(specifically, U.S. PatentNos. 5,123,917(the '917 patent), 5,107,852 (the '852 patent), 4,768,507 (the '507 patent), and German PatentNo. 3,918,736(the'736 patent)).

(3) House and Myers submitted a false affidavit to the patent office by signing the standard inventor oath (statingthey believed they were the “original, first and joint inventors”) required to be filed with the patent application.

II.STANDARD OF REVIEW

Application of Rule 12(b)(6) in patent cases is a procedural question and is therefore governed by the law of the regional circuits.McZeal v. Sprint Nextel Corp.,501 F.3d 1354, 1355–56(Fed.Cir.2007)(“A motion to dismiss for failure to state a claim upon which relief can be granted is a purely procedural question not pertaining to patent law.Thus, on review [this Court must] apply the law of the regional circuit.”);Polymer Indus. Prods. Co v. Bridgestone/Firestone, Inc.,347 F.3d 935, 937(Fed.Cir.2003)(same).In the Fourth Circuit, “[t]o survive a motion to dismiss pursuant to 12(b)(6), plaintiffs' ‘[f]actual allegations must be enough to raise a right to relief above the speculative level,’ thereby‘nudg[ing] their claims across the line from conceivable to plausible.’ ”Aziz v. Alcolac, Inc.,658 F.3d 388, 391(4th Cir.2011)(quotingBell Atlantic Corp. v. Twombly,550 U.S. 544, 555, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929(2007)).Although a court must accept the material facts alleged as true, statements of bare legal conclusions will be insufficient to state a claim.Id.

Although most unenforceability defenses need not be pled with particularity, the defense of inequitable conduct is an exception.Rule 9(b) of the Federal Rules of Civil Procedure states that: “In alleging fraud or mistake, a party must state with particularity the circumstances constituting fraud or mistake.Malice, intent, knowledge, and other conditions of a person's mind may be alleged generally.”Fed.R.Civ.P. 9(b);seeAshcroft v. Iqbal,556 U.S. 662, 129 S.Ct. 1937, 1949–50, 173 L.Ed.2d 868(2009)(although intent may be averred generally, “threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice”).Whether inequitable conduct has been adequately pleaded is a question of Federal Circuit law, not the law of the regional circuit, because it “pertains to or is unique to patent law.”Exergen Corp. v. Wal–Mart Stores, Inc.,575 F.3d 1312, 1326(Fed.Cir.2009)(citingCent. Admixture Pharm. Servs. v. Advanced Cardiac Solutions, P.C.,482 F.3d 1347, 1356(Fed.Cir.2007)).Thus, to survive a motion to dismiss under Fed.R.Civ.P. 12(b)(6), an inequitable conduct counterclaim or affirmative defense must satisfy Fed.R.Civ.P. 9(b)'s particularity standard and “identify the specific who, what, when, where and how of the material misrepresentation or omission committed before the PTO.”Exergen,575 F.3d at 1328(emphasis added).Although under Rule 9(b), “knowledge” and “intent” may be alleged generally, a pleading of inequitable conduct must include sufficient facts from which a Court can “reasonably infer that a specific individual both knew of invalidating information that was withheld from the PTO and withheld that information with a specific intent to deceive the PTO.”Delano Farms Co. v. Cal. Table Grape Comm'n,655 F.3d 1337, 1350(Fed.Cir.2011).¹“A reasonable inference is one that is plausible and that flows logically from the facts alleged, including any objective indications of candor and good faith.”Exergen,575 F.3d at 1329.The Court must accept all allegations of material fact and construe them in the light most favorable to the nonmoving party.SeeNemet Chevrolet, Ltd. v. Consumeraffairs.com, Inc.,591 F.3d 250, 253(4th Cir.2009)(noting that in ruling on a motion to dismiss, the district court must assume all well-pleaded facts to be true).

Thus, with the above standards in mind, the Court will now assess Medtronic's three theories of inequitable conduct.

III.DISCUSSION

A.Undisclosed Prior Art

Medtronic first alleges that Wayne D. House, a Gore employee and the prosecuting attorney/agent for the '870 patent, intentionally withheld U.S. PatentNo. 5,358,516(the '516 patent) and U.S. PatentNo. 5,397,628(the '628 patent) with specific intent to deceive the PTO.(Def.'s Answer and Counterclaim¶ 45, DocketNo. 69).Medtronic similarly alleges that David J. Myers, a Gore employee and the listed inventor of the '870 patent, intentionally withheld the '516 patent with specific intent to deceive the PTO.( Id.at ¶ 48).Medtronic argues that the '870 patent application represented to the PTO that the “crux” of the invention and the improvement over prior art was an ePTFE covering less than 0.10mm thick.Medtronic alleges that, notwithstanding this representation to the PTO, both Mr. House and Mr. Myers were aware that Gore already had the capability of making ePTFE coverings that were less than 0.10mm thick and had already been using such coverings in other patented implantable medical devices (specifically, the '516 and '628 patents).( Id.at ¶ 51–62).Thus, Medtronic argues that Mr. House and Mr. Myers falsely represented to the PTO that ePTFE coverings less than 0.10mm did not exist in the prior art.

Gore argues that Medtronic's allegations concerning the '516 and the ' 628 patent are pled solely on information and belief and contain nothing more than conclusory allegations that these references were “material” to the patentability of the '870 patent.Specifically, Gore argues that the '516 and the '628 patents describe vastly different technologies than the '870 patent.The '516 patent discloses a wire carrying an electrical current that is coated with a thin layer of ePTFE for insulation.( Id. at Ex. B, Docket No. 69–2; '516 patent col. 1:37–43).The '628 patent discloses a “rubber body protection material” whose purpose is to “increase the wearing comfort of cellular rubber wet suits and orthopedic braces.”( Id. at Ex. C, Docket No. 69–3; '628 patent col. 1:54–57).Gore also argues that it is clear from the specification of the '870 patent that the ' 516 and the '628 patents would not be material to patentability.Specifically, the specification of the '870 patent refers to U.S. PatentNo. 3,953,566(the '566 patent) which discloses an ePTFE film that is less than 0.10mm thick.²Thus, Gore argues that Medtronic's basis for alleging the '516 and '628 patents are material is contradicted by the patent itself.Last, Gore argues the reasonableness of Medtronic's allegations are contradicted by the prosecution history of the ' 870 patent since the patent examiner instructed the applicants to “eliminate irrelevant and marginally pertinent cumulative references.”³

The first element of an inequitable conduct claim is misrepresentation of a material fact.At the motion to dismiss stage, Medtronic must merely allege a plausible and specific claim from which a reasonable jury could infer that Mr. House and Mr. Myers knew of the prior use, appreciated that the prior use was...